It looks like a soft open this morning for the stock market. Although it’s still 90 min. before the open.
Looking over the pre-market landscape TLT is +.44 while the market indexes are off about .25%.
IBB is showing some weakness again this morning. It was looking like a biotech rebound until the President-Elect started bashing the pharmaceutical companies. Then yesterday the rebound that was in its infancy came crashing down. I suspect the new administration is not just playing lip service to this idea of pharmacy costs being too high. So I would be careful in this sector.
That also might explain some of the blowbacks the President Elect is getting from his own party. The special interest groups have their hands in the pocket of almost every politician in DC. The President-Elect comes in beholden to no one and in particular wants to change DC to where it benefits the people rather than special interest groups.
So, expect more of the same with some of the republicans causing as much difficulty for the President-elect as many of the Democrats. There is a lot of money involved here and in some instances the political life of some of the Republican Congressmen.
The gloves are off and anything goes as we have seen from Intelligence leaks to the mainstream media, some republicans sabotaging his top picks for his cabinet, and some republican’s appearing on CNN to put the knife in a bit deeper while Democrats and the media are piling on.
If your any type of moderate and just want to see the U.S. concentrate on what is good for Americans this has to cause you some concern as an investor. The market does not do well in this kind of environment.
Now, you might laugh when I say that as the market has been going straight up since the day after Trump was voted in. But, with the Fed intent on raising rates (unless Yellen is removed) and the day to day greek tragedy that is unfolding in DC, I feel this market is not on strong footings. Combine that with the Geopolitical buildup in tensions around the world and to me, its looking like the fall in the markets could come at any time.
Right now there is no bad news for the markets. But, when it turns, the opposite will be true. No news will be good news. That’s the way the market works.
Things to keep a watch on the nex week that are market movers are:
1.Confirmation hearings ( If things go sour for more than one of Trump’s nominees it could dramatically affect the markets)
2. Any breakout of hostilities involving Russia, China or Iran. The world is positioning itself to where diplomacy is on the backburner. This could blow up at any time.
3. The international meeting of countries lead by France and secretly by the outgoing administration in the U.S. (both lame duck) to solve the 2 state solution in the Mideast. Any resolution that goes before the U.N before the 20th will most likely result in not only hostility between many of the western countries and Israel but also an unknown effect here in the U.S. between the parties and the outgoing administration.
If I were an outsider looking down at the world right now I could make a very good argument that the world has gone insane and is rapidly spiraling out of control. In an age of nuclear weapons, that does not bode well.
That’s the backdrop I see before us as we plan a strategy to make money in the markets. Fortunately, very intelligent people have a different assessment of the state of things:) I just call it as I see it.
I am long and looking to get longer on any pullback. Despite the above comments seasonally, we have a tailwind at our back and I plan to try to take advantage of it.
My swing trades are looking fine and my GLD trade is really kicking as it up almost another 1% this morning pre-market and is up almost 6% from my entry at 108.25
I have a number of trades on my radar. Most are breakout trades but a big down day would start the ball rolling on another mean reversion trade in the indexes.
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