Another gap up. One has to ask where will this market move end and where?
If you have the answer to that question please email it to me:)
There are many that claim to have the answer but no one does. However, there are a select few that can break it down to probability theory and use risk management to give you the best chance at trading markets in the short or medium term.
That really is all you can expect, a positive EV setup with solid trade sizing and money management techniques. If you master this you will be ahead of 90% of the active traders.
The markets made it through the electoral college debacle. It looks like the market was correct not to give it any consideration at all. But if you think this issue is out of the woods it’s a long way to the 20th of January. The brain trusts are hard at work attempting to uncover any angle at all to prevent the President Elect from taking office.
So as a trader you still need to be aware of the now remote chance of a disruption sufficient enough to spook the markets.
On the Geopolitical front, there were several suspected terrorist attacks yesterday which had no effect on the markets. The badgering of our armed forces by China and Russia seems to have stopped except for China taking our underwater sub for kicks.
But that went without incident so all is calm. The only thing that could upset the calm is our government’s retaliation against Russia for the alleged hacking. Threats have been made but hopefully, this administration will hold off until Congress gets a full report from all intelligence agencies.
But it’s just another thing to be aware of that could potentially trigger a market moving situation.
Overall, however, it’s clear sailing for the final two weeks of the year. The tailwind is at your back so now is the time to take advantage of it. Of course, that does not mean going all in:) It means to shift gears a bit but still use position sizing and money management.
I am long looking to get longer into year end. The market is overbought but markets can stay overbought much longer than one can imagine. A good approach to take is the 8 day EMA on the daily chart for momentum. Above that all clear, below caution.
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
RickJ’s Handicapping Picks