And now the Stock Market is back to China!
The stock market was holding up yesterday until news broke that the White House was in the process of putting on some 200 billion in new tariffs with China.
Then the stock market dropped about 100 points in 5 min. To me what is significant is that the drop by the end of the day was not worse. As I see it this stock market still has room on the upside.
Watching how the market reacts to news can give you significant clues as to the future direction of the market.
Actually, its probably the best indicator around if you know how to analyze it.
The stock market is off about 1/5% about 30 min before the open.
Of note, TLT is positive .5%, Oil and financials are negative, while metals are slightly positive.
To me, this is a negative premarket bias. I would not be surprised to see some more downside today.
Our GLD trade still has not had any follow through, however, it is showing some life this morning positive about 1/5th %. If it does not move soon I suspect we will be stopped out of the trade.
Other news of importance is today is the deadline for Canada to reach a trade agreement with the U.S. So far, an agreement has been elusive.
It would not surprise me to see no agreement, but I would put the odds at 50/50.
Trudeau is very similar to the E.U. when it comes with economic dealings and the U.S. The E.U. is a long way from a trade agreement and the White House is taking a hard stand at this time.
Then we get to Turkey, a Nato Country, that is openly seeking alliances with Iran, China, and Russia. In a normal world, Turkey would be out of NATO soon, but in the world, we live in today, who knows.
In addition, Turkey is taking a very hard stand on releasing the U.S. prisoner. Tensions are rising, as this White House is a bit different than others. Taking U.S. citizens prisoner opens yourself up to all kinds of sanctions nowadays.
So, the bottom line is the geopolitical environment is unsettled. Add tariffs into the mix and I find it amazing the stock market makes new highs daily:)
On the home political front, today appears to be a key day for the Mueller investigation. The DOJ has a rule that after labor day, there are no actions that might interfere in an election.
So the argument goes, that Mueller, is precluded from any actions until after the midterms once labor day hits.
How valid this will be with this special counsel remains to be seen. But keep that in mind. Already the media is predicting a bombshell today based upon the above.
The media these days has become very unreliable in its factual reporting, let alone its speculation.
But, it’s just something to keep in mind today as a potential market mover.
In addition, I doubt the above rule would apply to leaks:) So, I imagine leaks will continue despite the DOJ rules.
A lot of uncertainty out there now. Midterms are 60 days away and the political environment is just going to get crazier the closer we get to November.
There is a lot at stake for both parties, and I suspect, both will pull out all stops on this one.
If your head is spinning trying to decipher all of this, you can make it simple and just trade price:) Ideally, you want to have a good understanding of the environment the stock market is in.
The stock market is still overbought here, but a significant down day today might get me interested. I will be watching to see where we close. I most likely will not do much until the close.
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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