After a long weekend, the markets are in the red this morning. The stock market is hovering around the -1/2% area.
Of note, the U.S. Dollar, Oil, and Natural gas are strong. While most everything else including TLT is in the red.
I mention TLT as typically you see TLT with gains premarket when the index is gaping down. What this means is not clear but on occasion, it could mean a nice gap fill trade.
Supporting that also is financials while not strong is not weaker than the overall gap down in the markets. Not much to go on for sure.
I would watch the 270 area in SPY. That’s a critical area and if it breaks cleanly we are most likely heading lower.
I also mentioned Natural Gas for a reason. I have been watching it for some time now for a bottom reversal trade.
It’s looking now that the time is about right to give it a go this morning. Looking at the daily charts we have had a steady decline in UNG from the 38 area going back to December of 2016.
There was a nice pop starting in Dec of 2017 taking us to the 27.60 are with a pullback not quite testing the bottom where we stand now at 21.70.
There are several divergences on this retest. And we are getting a nice gap up this morning in UNG of almost 2%.
I am going to trade this off the 60 min charts this morning. I will be looking at the break of 21.80 and the volume after the first 60 min to determine the probability of the bottom reversal being real.
So at 7:30 PST I will decide whether to get into the trade this morning. If I do the 20 day MA on the 60 min chart will be my initial stop on a close only basis. Then I will reevaluate after the close today.
These trades are perhaps 50/50 trades or a bit less. But when you catch the reversal the profits far outweigh the losses making it a nice positive EV trade.
The first area of resistance on the trade is 22.80 to 23.20. After the 24 to 24.25 25 to 25.30. After those levels, we are off to the races:)
Let’s see how it turns out.
On the political front, it is more of the same. Although, the special counsel report that came out Friday has taken some of the risk off an immediate Trump removal attempt. It has not calmed down the rhetoric from the media but by now you most likely have figured out that its best to find an alternate source for determining what reality is.
In addition, DACA went down in flames in the Senate. They had 4 bills they voted on and none came close to passing. One thing is for certain is you can count on the Senate to get virtually nothing passed. I am still amazed they got the tax bill through.
On the geopolitical front, both parties are ignoring the effects of demonizing Russia to the degree that they are doing it.
Its gotten to the point that they are letting their political narrative, that is there for a specific reason, get in the way with sound foreign policy.
I am not sure how this is going to play out. But its a dangerous game they are playing right now. To jeopardize national security for the sake of political gain is somewhere in never-never land to me.
But you have to give them some slack. After all, they are only humans. You cannot expect much considering the history of the human race. More than likely it will be more of the same. We are aways from no more wars and international cooperation.
All of this adds volatility to the markets. As the markets enjoy a stable environment. Uncertainty breeds fear and fear, well we know what that breeds. We saw it a few weeks ago:)
Enough rambling this morning. Look for me to put out this trade on my personal twitter feed @rickjswings. Its free so take a look.
Finally, March Madness is rapidly approaching. I am running a special on the handicapping side of my site. It is 44.00 from now until April 2nd when the championship game is played.
All plays are sent out via my private twitter feed and directly to your email. In addition, you get all plays in the rest of the sports I handicap during this period.
I have made it easy to sign up:
After you sign up you will get an email from me on how to proceed.
Good Luck Trading today!
If you want to follow some of my trades along with 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:)
Good Luck Today
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