A rare morning with the markets gaping down a bit 30 min before the open. Of note, Oil down, Financials down, Metals up sharply.
Not much to go on this morning although perhaps a slight downward bias.
I had one swing yesterday that I exited at break even during the middle of the day. The stock did not move much and the market was looking like it wanted to head down.
Today same strategy. I have a few more stocks in my basket, however, today is options expiration. That means typically weakness during the first few hours of trading. Sometimes I short spy at the open and hold it for 3 hours and then exit. Today I have a number of things to do so will not be making that trade today.
But it’s good to stay away from long swings for the first 3 hours today. Then look over your possible trades and with a few hours left in trading perhaps make a trade or two into the close. That will be my strategy today.
On the political front, the rhetoric is heating up. Trump’s speech was not well received except by his base. It prompted all types of inhabitants of the DC environment to speak out and comment. The most significant to me was the top 2 in the DOJ blowing it off without a kind word for the President. It was not like they bashed him but to call a press conference and openly indicate that neither was going to resign at the moment was an in your face approach.
Not one you would expect from an institution that answers to the President and where the AG is a Republican conservative.
This will add to the chaos in DC. The DOJ to this point has lost complete control as I see it. With Sessions recusing himself and allowing a special counsel he has essentially become an absent AG. No matter what you think of the Russia special counsel it is the most significant thing going on in DC right now. And for the AG to take himself out of the picture just means more chaos. And that is what you are seeing now.
So the U.S. just gets closer and closer to a constitutional crisis. It could be triggered a number of ways. If Trump fires the special counsel or Sessions I suspect that will prompt action by the House and Senate. Similar to his firing of Comey but much more intense.
If the Special Counsel comes back and list crimes that Trump has committed and seeks to indict or whatever scheme might be in place, mayhem will break loose.
And then, of course, you have the pro-U.S. agenda that is staggering in Congress which the crisis will make dead in the water. And not but not least how are the 60 million voters that voted for Trump going to take this. Most of these voters are still strongly in Trump’s corner.
I spent some time on this as it is not only of significance for the markets but also the odds are greater than 50/50 that we are quickly heading in that direction. None of the players are backing off. Essentially it has come down to an all or nothing proposition for all the players in this grand scheme.
Not the ideal environment for the markets. At some point, reality will set in. As I have said first you have to figure out what is going on and then the timing part is the hardest. And that is where we are now. Timing.
Enough rambling this morning, but perhaps I am delusional and my analysis is off base:) One never knows for certain. Only time will tell.
I will post any trades I make today on my private twitter feed @rickjswings. It is free.
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