As expected the Stock Market ran up until Wednesday and has now slowed up into either a consolidation or a pullback.
It remains to be seen where we are at now. My thoughts are unless we get some earthshaking news (which is always a possibility) we will be in a consolidation.
The Stock Market is gaping down a bit over 1/4% this morning 15 min before the open.
Of note, TLT off almost 3/4% while Oil and Silver are strong. To me, this looks like neutral to a slightly positive bias premarket.
We are still very overbought right now. So I suspect we do not get a rally this week until this wears off.
I did put on a small hedge yesterday using SDS. This is a 2X short SPY trade. I do not plan on keeping it on long. But I am still uncertain when to take it off.
We still have the risks in the market both for the longs and shorts. I went through them in detail yesterday. They are still here and as we approach the first 10 days in May the risks will accelerate if you long.
The political dysfunction is still at a fever pitch and is rising if that is possible. As we approach the IG and Special Counsel report I can imagine complete hysteria will envelop the nation.
This will be doubly true if indictments start getting handed down based upon the IG report. I expect we have the potential to see some civil unrest developing in some of the major cities.
Already many are calling for taking to the streets on a regular basis. What is amusing( if you can find it amusing) is that the people calling for taking to the streets will be at home under armed guards when and if this ensues.
Easy to call for unrest when you know that you will not be on the streets exposing yourself to violence. Such brave politicians we have these days.
I say this only to point out the risk to the long side. We are entering into the endgame phase of the Russia investigation. Do not underestimate the risks to the market during this stage.
The risks are not only from the actual facts but also the rumors and false reporting that we will inevitably see.
That is why I started a hedge yesterday:)
Let’s see how close I get to reality or whether this is just a delusional paranoid rant! Should be interesting.
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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