As expected a Monday pullback in the Stock Market….What now????

After a rare down day on Monday, the markets are about unchanged 30 min before the open. Of note TLT and GS are both off almost 1/2% and GLD down almost 1% premarket.

So not much to go by for clues premarket. The weakness yesterday was not a surprise by historical standards. I expect this weakness to continue for another day or 2. After that, i suspect we will get new highs into year end barring any surprises.

The only surprise I can see is the transition period from Obama to Trump. It’s already being marred by rioting, death threats to electors, and recounts. I suspect the U.S. is in for more surprises before the transition in January. To the White Houses’ credit, they have downplayed the idea of the transition not going as planned. As far as they are concerned the matter is closed at least so far.

So it is something to keep a watch on as its the only thing I can see on the horizon that could potentially affect the markets big time in the next 50 days or so.

One thing to watch is IBB the biotech sector. If it starts plummeting in the next 50 days the odds are high that there is something serious in the works to disrupt the transition. I am sure it’s not a foolproof indicator but one that is easy to watch and has some correlation.

Remember how biotech took a beating after Clinton came out and talked about doing something dramatic about high drug prices. Then after the election biotech has rebounded nicely. So keep a watch on this sector as an advance warning. Typically the big investors are ahead of the news and oftentimes this shows up in one manner or another if you know where to look.

I am still long several stocks and looking now to get longer on this pullback. I did attempt a BO trade yesterday that went nowhere for a small loss. Today I am still game for BO trades so let’s see if any setup today.

If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. 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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