After a nosedive on Tuesday, the markets are rebounding premarket with most over +.25% 30 min before the open.
Of note, financials, metals biotech, all positive. Oil and TLT weak.
A slightly positive bias for the day at least looking at the premarket. Things can change on a dime.
If you do not think Trump’s agenda has an impact on the markets all you need to do is see the market’s reaction to McConnell pushing back the Health Care Vote yesterday.
These events are going to be more and more frequent.
My guess is the Health Care vote has a good chance of not getting out of the Senate. They need 50 votes in the Senate since 0 Democrats will be voting for any bill the Republicans put forward.
So only 2 defects allowed. Between the concerns of the conservatives and the recalcitrance of the Never Trumpers, I do not see how they will ever get to 50.
Many of the never Trumpers would eagerly risk losing the Senate and the House to assure Trump does not get a 2nd term. Not backing Health Care and Tax Cuts would in their way of thinking assure Trump not getting reelected.
So the strategy is all too simple for them. And for cover, they can always use the CBO report that is never going to be perfect no matter whatever bill they bring up.
Now, if tax cuts and health care are dead in the water, what do you think the market is going to do?
I have thought about this for some time and do not see any logical way either of these is going to pass.
But perhaps I am being a bit too cynical:) One never knows when you’re dealing with politics.
I would like to see the betting odds on either of those or the betting odds on when Wray gets up for a vote in the Senate for the head of the FBI. My guess is not for a long long time if ever.
The markets so far have taken this political turmoil very well. I doubt that this will continue. With the Fed tightening when they should have been loosening the credit markets does not help at all either.
I do not think you want to be around when the lights go out on this market. I suspect when the market participants decide to exit, it will be a thing of beauty watching the panic in the air.
For today I will most likely start entering some beginning mean reversion trades. I have several stocks and ETFs picked out for these. But they will be short term trades. I will be looking for a quick profit rather than letting the trades be extended to the normal exit.
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