Friday already with a constructive start to the new year in the markets...where to from here??

Friday already with a constructive start to the new year in the markets…where to from here??

The markets are about unchanged an hour before the open. Looking over the premarket landscape it’s a rare morning that nothing stands out. Perhaps this is the quiet before the storm:)

We are of course still in a seasonally strong period which is offset to some degree by the ever increasing uncertainty of the transition of power in the U.S.

If anyone thought this was going to be a smooth transition with both sides respecting each other along with the Never Trumpers in the Republican party giving up the ghost, you have not seen the ever increasing battle lines being drawn the last 8 years.

First, the Democrats have laid down the gauntlet that Trump either has to abandon the Republicans or will get no help from the Democrats on virtually anything.

Now I ask, did the American people vote their representatives into office to take this approach? Whether it comes from Republicans or Democrats obstructing just for the sake of obstructing is a dead end strategy. The risk for the Democrats is that in 2018 the final nail in the coffin of what once was a great party will be hammered home.

And the U.S. will be left with a fractured Republican Party that still has some leaders relishing the old days of war, war, war.

Regardless of what you think of Trump, he has it right, that it’s time for the U.S. to start concentrating on the homeland. Both in terms of infrastructure, jobs, and inner cities. In addition, its time to remove the threats to our security from the U.S. and clean up the Federal agencies and Congress.

Now, you would think this approach would be right up the Democrat’s game plan. This is what they espouse and finally, you have a President that might just try to accomplish these. But alas, he is a Republican:)  So you now see the Democrats siding with the right wing neo-cons bashing Russia to the point it’s getting embarrassing for them.

If anyone watched the Congressional hearings yesterday on the Russia hacking one had to be very disappointed. Down to every representative, there was not one tough question posed. Not one!!!

They were all leading and designed to make a point. And they came that way from both sides of the isle!

Now, you may ask, why is this important on an investing site. The reason is that with the battle lines being drawn the way they are, expect some big surprises that will dramatically affect the volatility in the markets. They will come without warning.

We have already seen several of these that are to the forefront now. The U.S. nonveto of the U.N. resolution on Israel and the Russian hacking leaks by our intelligence services to targeted mainstream media who they know will report it without skepticism and to the contrary will embellish it and give it a life of their own.

Between now and the 21st these two items will be at the forefront. 50 countries meet on the 15th to brainstorm what they think is best in the Mideast. The timing is very suspect just 5 days before the transfer of power in the U.S. Rest assured there most likely is a game plan to have another U.N. resolution before Obama leaves office. This could cause havoc both at home and abroad.

The Russia hacking story keeps getting more intense by the day. McCain now espouses these acts are an act of war! Obama moves troops to the Russian border! Obama throws 32 Russian diplomats out of the U.S.! All this when a thinking logical person looking at this, like you and me, can see that there is no proof presented that proves anything at all.

Many experts have weighed in on this that are independent of our government and the intelligence agencies. Mcaffee and Wordfence, two of the leaders of internet security have both written articles that explain that there is nothing to even suggest Russia was involved with these hackings.

So, expect some big surprises the next two weeks. Once Trump gets in most of these will be dispelled by people in the agencies themselves, hearing by DOJ and Homeland security rather than Congress, and a record number of whistleblowers coming forward on the 21st. As I said it will be embarrassing how many come forward.

If you’re heavily invested in the markets I would stay on top of these two themes at least for the next two weeks.

A little long winded this morning but there is a lot going on now that we have not seen for a very long time. The herd is getting on board and trying to steamroll this story in a very deceptive way. As most of you that have been following me the general rule in sports betting is to fade the herd. The more one side is on a team typically the better the opposite side. This is usually true in the markets.

I suggest it’s also true to a degree on political affairs. Let’s see how my predictions pan out the next few weeks.

Let me also put the following disclaimer. I am a member of neither party. I have been in the past associated with both parties depending what point in my life I was in. Presently I am an Independent who is issue driven.

I have no dogmatic ideological views to promote or defend. I only view what is before me for the sake of the fascination of the dynamics of geopolitical and political affairs and how they might affect the markets.

My GLD trade is looking good although there is some weakness this morning in gold. In addition, I have a variety of swing trades on.

My thought is any weakness to start buying again to ride out the positive seasonality. My Nasdaq SPY model will trigger long today if the Nasdaq just holds even with SPY on the day.

This falls in line with the consolidation we have seen the last 4 weeks in the market. If we do get the signal from this indicator I would suspect it would fall in line with a nice rally from this level to perhaps 2340 on SPX. We will see.

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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