A quiet opening this morning after a very strong move to the upside. Today is FMOC day, where we should hear whether rate cuts are in the cards.
The EU is flooding liquidity in the markets, which prompted the move yesterday. Trump is now jawboning the Fed to follow suit so that the dollar does not get too strong and affect trade.
How this works out remains to be seen, I am skeptical that Powell is going to turn into a rate cutter consider what we are seeing in the U.S. economy. But there are many who disagree with me:)
On the geopolitical front, things are still heating up. Iran now is the hot spot and its getting hotter. U.S troops are heading that way, while the EU ponders which side they are on. Iran gave everyone a 10 day line in the sand before they start enriching uranium to levels prohibited under the Iran agreement.
There is some question whether they ever stopped or ever complied with anything in the Iran agreement. But that is an open question.
On Trade Trump and Xi are meeting at the G20. The NAFTA rewrite is waiting for the House to approve it( never happen), and the White House has reached an agreement with Mexico on handling the caravans.
There is a lot to watch, all potentially market moving.
On the Home front, its dysfunction as usual in DC. Nothing is getting done, except for what the White House can maneuver through agreements and executive orders.
In addition, the house has not quit the witch hunt, even though Mueller essentially found nothing after 2 years and 40 Million. But the tone has changed. The dems are in desperation mode, while Barr and Durham start their investigations and prosecutions.
I would usually think that it would be business as usual, where nothing happens, but Durham changes the equation. He is a no-nonsense prosecutor. I actually believe this time will be different. Heads will roll.
So, expect more volatility in the markets as this progresses.
The market is primed for another shot to the upside if Powell starts talking dovish or there is a deal with China. I would not want to be short anything in this market right now. There will be pullbacks , but forget about trying to pick a top.
If you were a top picker the last year or so, I doubt you would be in action right now:)
So that is a readers digest version of the back drop for the markets this morning. Its much more complex than this, but, its not the purpose of this site to examine each in more detail.
As a trader you have to have a grasp on what is going on. What that means is forget about the media. Forget all Cable Tv pundits. Pick out five to 10 real experts in their fields, and follow them to get an idea of the environment. I see some of the best traders stuck in these destructive political themes. It can only hurt their trading.
I have no particular ideology. I am issue driven. I evaluate politicians based upon what i see and observe, rather then what the media tell me to believe.
In addition, I am a true contrarian. Usually the herd is wrong. You can almost take that as a given.
My granddaughter was explaining her views on many issues to me, some of with I agreed with and some I did not. But after seriously explaining to me her thoughts she said: ” But I do not like Trump”. My only comment to her was that when all around you have the same view, you should question whether its the correct one. As usually, group thinking is wrong.
It seemed like a light went on:) But, who knows.
There are things to like about Trump and things to dislike. But, to hate the person to the degree we are seeing is a symptom of obsessive irrational thought. A trap that is not good to fall into.
The idea is to approach things from an analytical perspective rather than an emotional one. Not everyone has the ability to do that. As we say a person light themselves on fire in front of the White House last week. But many do, and many choose the emotional irrational side.
Its not easy when you are bombarded 24/7 with fake news. But, nothing is ever easy in life. And its times like these that determine what you are made of.
So, try to let your analytical side take hold, get good information, and you will become a better trader.
I will try to post more often, but between handicapping sports, and preparing for the stock market open, it’s tough to work in a blog post regularly.
I do share my thoughts for a few minutes each morning on my private twitter feed @rickjswings. Its free, and it is only for about ten min in the morning after the market opens.
As a part of my sports handicapping subscription I sent out almost all of my trades via Viber. This has been a nice valued added feature of the handicapping service. At $49.00 a month for all sports plays I handicap, you get most of my stock trades.
If you want to follow some of my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:) In addition, I share all my short term swing trades to subscribers.
Good Luck Today
RickJ’s Handicapping Picks