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What happened??? Thanksgiving week is supposed to be positive for the stock market??? My thoughts

It looks like another solid plunge on the open this morning.
 
The indexes are all off over 1% with the Nasdaq leading the way getting close to the -2% mark.
 
Financials are off over 1.5%, While TLT and the U.S. Dollar is positive.
 
That is a pretty negative bias (to say the least) this morning. I really do not see any bright spots in any of this, except perhaps TLT not being a little stronger.
 
After a tough October, the markets are sliding again just prior to Thanksgiving. The test will be how they do Wedn and Friday. If we do not get a rebound those two days, that will be a very bad signal.
 
Imagine in a dream world where the U.S. politicians would be working together to build on what the Trump administration has started with unemployment, GDP, Trade and border security.
 
Where they all had no special interests they were beholden to and could make their decisions solely on what is good for the U.S.
 
Where foreign influence was absent in the legislative bodies, and decisions could be made solely on the merits.
 
Where billionaires, did not an easy route to influence elections by being able to make almost unlimited funds available to make the changes that their ideological view of the world is.
 
Where the press was actually the free press again and had no bias toward any party or ideology. But merely reported, with triple checking of the facts before reporting on them.
 
Well, one could argue the U.S. has never been to that eutopia:) But, I assure you, we are closer to what George Orwell envisioned when he wrote his book “1984”)
 
He was just 20 to 30 years ahead of himself in his prediction.
 
So when you scratch your head and wonder what is happening to the markets, all you need know is that all of these influences are catching up with reality.
 
And to top it off, the Fed is no longer there to rescue anyone at this point. They are merely adding fuel to the fire when liquidity is sorely needed right now.
 
Much more of this, and you will see a recession in the U.S. you never would have thought possible. It will make the housing drop look like kindergarten if things are not reversed.
 
That is my “Scrooge” analysis as we head into the Holidays. Is it accurate? Only time will tell. But, even if I am in the ballpark the U.S. is in for a rude awakening in short order.
 
You cannot have any law and order, 24/7 subversion of the government, and no press to protect the U.S. without consequences.
 
The market is expressing just the beginning of these at the moment.
 
So what does one do?
 
My approach is to always allow for the possibility you are wrong. I almost always factor that into the equation. The human mind can only process so much, and there is a lot going on right now, both that you can see and much you cannot see.
 
So my approach is to try to have objective benchmarks to trade rather than my overall view of things.
 
One I shared with you a few days ago. The Nas/SP relative strength chart on a weekly basis. That has only widened and we are weeks away from a long trigger if not months at this point.
 
Watch financials, Watch the Fed, and trade what you see not what you hope things are. Trade the tape.
 
That means be conservative at the moment even though we are heading into a very strong period historically.
 
I exited my Qcom trade yesterday for a nice profit. I am still in my 1/4 position in SPY, and if the day closes weak will add another 1/4 unit. These are mean reversion trades.
 
I went through this in 2008 and it was much worse. Although, If we do not see a rally into year end, it has the makings of another 2008.

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

RickJ’s Handicapping Picks

https://rickjshandicappingpicks.com/investing

Skype: Ricca

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Thanksgiving week for the Markets, what to expect and a trading tip. What more could you ask for:)

As we enter Thanksgiving week, it looks like in the pre-market we are having some softness.
 
After two up days, that is not surprising. If history is a guide, however, this should be a positive week for the markets. In addition, this is a seasonal period that has been the strongest of the year.
 
The indexes are off around 1/4%. TLT is off the same. Metals, biotech, and oil off in the same area.
 
Even the U.S. Dollar is in the red, although only a hair.
 
What is more significant is we are off sharply from the overnight highs.
 
Whenever you get a sell off the pundits have to attribute it something. You have to remember there is a lot of program trading out there that works off news feeds.
 
It’s an interesting concept, as opposed to scanning for technical indicators. These scan for news, where programmers weigh the significance of various words and sentences and translate them into buy and sell signals.
 
These have been the market movers. And why you often times see a substantial overreaction to the news.
 
As an example, Kudlow says Trump is meeting with China on Trade, the programs hit and we get a nice rally, and then an hour later Trump might say time to put more tariffs on China, and we get a nose dive.
 
What is pretty consistent in all this is, If you fade the move off the news, and get your timing even remotely correct you have chances at making a nice swing out of it.
 
What the public does is exacerbate the move. So the programs initiate the selling. Then the public piles on at the end of the move.
 
So you look for moves with high volume. Not steady moves, but quick downswings with high volume after a news item.
 
Those are the ones to consider fading. But a caveat, I would not stick around too long in the trade. As you are only trading the bounce, not taking any real position.
 
Try it on paper, and you will be amazed how it works out.
 
It’s really a subset of the government shutdown trades that were so profitable a few years ago. Brinkmanship, the market went sharply lower, and a deal the last second. This played out so many time I lost count:)
 
But that is a subset, the one I am talking about now is a quicker trade. It plays itself out quickly.
 
As we enter Thanksgiving Week, the stock market is not as oversold as it was mid-week. I plan on exiting QCOM shortly after the Open. SSO I have not gotten my exit signal but we are close.
 
With a trade like Qcom I usually wait a bit to see how the market is going to set up for the day before exiting.
 
I will actively be looking for some swings this week. But, until the Nas/SP relative strength signals a buy, I am going to stay conservative. It is a long way from that triggering.

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

RickJ’s Handicapping Picks

https://rickjshandicappingpicks.com/investing

Skype: Ricca

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Is there a trigger to let you know when it is safe to get back in the markets? Let me show you.

Is the bull market dead in the water at this point? Historically, the answer is easy. No.
 
But it has been a painful ride:) October was grueling and November so far has not been much better.
 
One thing to watch for a turnaround is this graph. The bottom graph is what to watch for, the blue crossing back up over the yellow line on a weekly basis.
 
 
Graph courtesy of Quantifiable Edges
Watch for the Nas/SP relative to switch to the Nas leading. That would be a good trigger for a market turnaround. It’s not perfect, but it’s not bad.
 
The good news this morning is the election drama is about over, with no surprises so far.
 
The bad news is, the eurozone is in disarray, and the Fed had reach peak insanity mode.
 
Now I am not saying Alan Greenspan was correct when he opened the floodgates of liquidity for Y2K. But, what I am saying is you have to have some accountability and consistency in Fed policy.
 
The policy cannot dramatically change depending on what the thoughts of the head of the Fed seem to be at the time.
 
If people lose faith in the Fed as an institution you might as well get rid of it, as it creates more harm than good. Let the market dictate the rates. If dramatic events happen, then have a non-political department that deals with that.
 
But to have Powell, and his cronies on TV every other day disrupting the markets, is not healthy.
 
I am approaching the markets with some conservative trading, but not abandoning the idea that we are hitting the best weeks and months of the year historically.
 
But I was invested when the U.S. credit rating was cut during the best weeks and months of the year:) Was in Hawaii on the beach on Friday when I learned the news.
 
I expected the markets to off about 2,000 Monday morning. When they were only down 100 to 200 I hedged everything.
 
I do not think that is where we are now. It would take a trigger, and that is what to watch for.
 
I made a few more trades yesterday, and am slowly positioning myself for a rebound.
 
So, we will see:) No sure things when your gambling. And make no mistake, short-term trading is just another form of gambling.
 
The difference is that there are many more variables in play. Blackjack its simply the count, and how to avoid getting caught:) Dice there is no out, Poker, lot of variables, except in 10 handed Omaha 8 ring games, and sports handicapping, the easiest of the bunch, except you, have to overcome the 5% vig. That is the tough part.

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

RickJ’s Handicapping Picks

https://rickjshandicappingpicks.com/investing

Skype: Ricca

 
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Seasonality vs Dysfunction, which wins out in the near term for the stock market. My thoughts.

The Stock Market is disappointing a lot of investors at the moment. But remember we are not even 10% off the highs. In the scheme of things, this is nothing.
 
A blip so to speak:)
 
The positive is we are entering the best six months of the year. In addition, from mid-November through the first few weeks in January, historically have been the strongest.
 
That is a big positive. Do not let the negative news make you forget that.
 
The negatives are long, however. And they will show up, but I doubt they will overcome the tailwind for the next six to seven weeks.
 
1. The Fed is in delusional mode. If they think raising rates in the face of political unrest at home, rising tensions across the world, tariff fights still going on, caravans coming to the southern border, then they are in the wrong line of work.
 
Unfortunately by the time they figure it out, if they ever do, it will be a tough landing for the U.S., who has held up very well against the economies of the world.
 
In my opinion, its time for a rate cut, and some bond buying again as a protection against increasing risks. It does not have to be anything dramatic, but enough to give confidence to the markets that the Fed is there to protect the U.S. economy if needed. Right now, the mood is very anti-fed.
 
2. The U.S. once the model of democracy in the world, has become the laughing stock of the world. The antics of our politicians have done more for the propaganda of our enemies than they could have done on their own.
 
The faith in the election system is at an all-time low by both sides. The election system infrastructure is antiquated with no desire to correct it. The only thing the politicians want is a system that they can easily manipulate to get an edge. And that is what you are seeing occur right now.
 
So, without transparent free and fair elections, what do you have? The answer is obvious, you have what you are seeing now across the U.S. With Broward County the extreme example.
 
Both parties are at fault. Both want to protect the status quo at all costs. After all, if the people actually decided things, the special interests both foreign and abroad would be left out in the cold.
 
I am an independent, and if I had to pick a party it would be libertarian at the moment. If the political system in place in the U.S. does not change quickly it will self-destruct. Which is what we are seeing now.
 
The markets are also seeing this.
 
3. Polarization in the U.S. has become so extreme that there are groups of people that are so entrenched that they most likely will never return to reality.
 
You see it on the social media. And you see it on both sides. The only defense they have is that the U.S. media has now become the worst media of any country in the world. There are exceptions of course, but they are few and far between.
 
I challenge anyone to give me the name of a country that overall has a worse media than the U.S.
 
This, of course, exacerbates the problems, since the gas lighting and brainwashing go on 24/7.
 
That is why you are seeing the uptick in domestic violence, 24/7 non-stop media gaslighting and brainwashing. Pushed along of course by politics and other special interests.
 
Most of the polarization are people that have become useful idiots to the few that are pulling the strings. If you were an outsider looking in it would be fascinating to observe. The human race has not learned a thing over the years. Its the same continuous patterns being played out time and time again.
 
For the markets, for now, this is built into them. But at some point something will snap unless some things change in the U.S. A country overloaded in Debt, that has a political system that cannot function, and is hell-bent on destroying the other side rather than working together for the good of the country, is not a country that has is in its infancy. Its a country in the last stages of its existence or transformation as a former president called it.
 
4. Internationally, things are not as bad as the media would have you believe. I could give example after example but suffice it to say, that is the least of America’s problems right now.
 
So what do you do as a long-term investor? The only way to deal with this is asset allocation. If you have a nest egg and do not know about asset allocation, I suggest you read up on it. Because it is critical to keeping your investments safe.
 
If your a shorter term investor than the above does not concern you so much from an investing standpoint. You just need to recognize when the investing environment shifts.
 
Saying all of this, I suspect many people felt the same way in the 60s. But, the U.S. at this point in time to me seems to be a bit different then what I saw in the 60s. Of course, I was in the “make love not war” generation in college at the time, but I was still interested then in the markets and politics.
 
The key is as in everything else if you can keep your head when everyone else around you is losing theirs, you will have an advantage.
 
That should be your goal. Do not get caught up in any particular ideology of hate and division. I have been there, and it’s exciting and fun at times. But in the end, its a waste of energy and has no productive value.
 
So how do you know if you are caught up in this craziness? Well, one test would be, if you really think Trump is like Hitler, then you have gone off the deep end. I am not an avid Trump supporter and am critical at times of some of the things he says.
But, more on policy and communication.

But I will also say overall, I would vote for him in 2020.

But, that’s a big step from the “Trump is Hitler stage”:) I can say with 100% certainty if you really believe that, you have lost all sense of reason. You have let the 24/7 pounding the media gives you, gaslight and brainwash you.

 
If you are in that category, whatever you do, do not take up trading. Regain your perspective, if you can.
 
Now, enough of my perspective, (for what it is worth) and back to trading.
 
I made 2 trades yesterday. I started a position in SPY via SSO at 111.11 and is now trading at 111.95. In addition, I started a position in MOS at 36.62 and premarket is now at 35.75.
 
With the Index looking to gap up about 1/2 %, it will not give me an opportunity to add to my SSO position. I may look for another swing this morning. But will wait to see how the first 15 min or so shapes up today.

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

RickJ’s Handicapping Picks

https://rickjshandicappingpicks.com/investing

Skype: Ricca

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Sessions fired day 1 after the midterms. And you thought things would quiet down:) My thoughts on the markets

The Stock market is reversing some of its gains from yesterday with most index’ off just around 1/2%.
 
Financials are getting hammered.
If you thought things were going to quiet down for a while after the midterms, think again. TLT, the Dollar and Oil are positive.
 
Overall, it looks like a negative premarket bias. I would not be quick to play a gap fill today.
 
If you thought things were going to quiet down for a while after the midterms, think again. On Wedn, we have the House leaders announcing an investigation of Trump is top on the agenda.
 
Trump not to be outdone fires Sessions and goes around Rosenstein with an acting AG whose nickname is “the hammer”:)
 
To me it looks like Trump’s first to years was foreplay between the Dems and Trump. Now it is about to get real. Rumor has it indictments are coming down the pike very soon( and not against the Trump team).
 
With a big advantage in the Senate and McConnell, Grassley, and Graham in Trump’s corner now, Trump should have an easy time picking a new AG.
 
For the markets, this means more volatility. As the fighting intensifies. I doubt there will be any compromise, it appears to be a winner take all fight. As it has been from the start.
 
The difference now is Trump will have his own Justice Department. Something the Dems are in an outright panic about. And rightfully so.
 
So how do you swing trade now? Well, remember we are now in the best 6 months of the year and the midterms are behind us. That to me means despite the increased volatility, there is money to be made.
 
But, be aware of the volatility when position sizing. It will make your life much easier as you sit through your trades.
 
Trading is no getting rich scheme. The money is made by the methodical application of methods that have a high probability of continuing to work.
 
Similar to sports betting if you hear someone touting a sure thing or a 90% success rate. Do not even begin to consider them. Usually, the bigger the hype the worse the results you are going to have with them.
 
There are plenty of serious handicappers and investors that share their ideas and some of their trades (plays) with the idea of educating because they enjoy what they do.
 
Those are the ones to watch for.
 
The stock market is now short-term overbought. I would be waiting for a pullback before getting into a swing right now. As far as mean reversion, we are aways from that right now.
 
We caught part of the move with SSO a few weeks ago. And that is the goal. To catch part of the move.
 
For those following my sports plays, I am slowly getting caught up with my google sheets. I got sidetracked the last month or two. But will have them current shortly.
 

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

RickJ’s Handicapping Picks

https://rickjshandicappingpicks.com/investing

Skype: Ricca

 
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