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Government Shutdown = V Bottom? My thoughts

Who would have thought. The stock market is + almost 13% since the shutdown. Trump’s political opponents have to be getting concerned:)

Afterall, a nice market crash would fit right into their game plan. But the stock market as it is prone to do as trump would say ” is a tricky business”)

Most everything is in the green this morning except TLT the the metals. This to me is a positive configuration and I would not be thinking this morning of a gap fill trade.

Where this ends is anyone’s guess. Myself, I do not think a V shaped recovery is in the cards. We are right at resistence, the 50% pullback line from the lows of the previous highs.

I am hard pressed to think that we do not turn lower very soon. But you cannot trade this until we actually do turn lower. Or at least have some intraday guidelines to go by.

Today 1647 on the ES is a reasonable start. If we break that then you might consider looking for some short setups. But even then I would be looking at higher timeframes for the Stoch to start turning down.

Another good technical indicator to use as a screen is the RSI below 45 on your shorter time frame with the Stoch and Rsi on the higher ones trending down.

As far as new trades right here, not for me. I may miss out but, I still have a basket of a diverse group of investments so I am not missing out on much.

My TLT trade is under water, and my FXE trade is on the cusp of getting stopped out. So neither have been stellar swing trades so far. FXE is right at the decision point, and TLT for me is also a semi hedge. And even so neither has a very large loss.

Keep in mind, the political environment has not changed it has only gotten worse. I do not see it improving, especially as the media is providing a shield for the disinformation that is rolled out on a daily basis.

If your getting your info from the main stream media , you are sadly living in an alternate reality. And your trading will suffer. Its essential you get unbiased objecting reporting as a backdrop to figuring out the trading environment the market is in.

In addition, the Mueller report is coming out, at least as to collusion and perhaps obstruction any time now. To complicate thing Barr is heading into confirmation hearings and it looks like it will go through the Senate Judiciary along party line.

The excuse for voting no on confirmation of Barr is that he refuses to say he will violate established DOJ policies that have been in place for years. So of course, the Dems are voting against him. If Lynch were being confirmed now, they would all vote yes, despite she told Comey to tell everyone the Clinton investigation was a matter. That was fine with them:)

But that is politics. It gets more interesting in the final vote in the Senate. The odds are pretty high that Barr gets approved easily. Myself, I am not that convinced.

There are two issues here. Does the Senate try to hold off the final confirmation vote until after Mueller releases his report and do any Republicans vote no. And if more than 4 vote no he goes down, as Schumer will have every Dem voting no if that happens.

The reason this is important is that this is a market moving event. There will be a lot of misreporting both before and after the report. In other words, it will be chaos as usual:)

So as usual:

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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What will trigger the market to break from this consolidation? Higher or lower? My Thoughts

The stock market after a runup off the the latest freefall, has been a strong one. Much strong than one would expect if the market was going to roll over and head south anytime soon.

However, you can not discount that until we break out from this short consolidation to the upside. So far the market has taken a breather from its run, and where it goes from here should give a good indication of whether this December november swoon was serious.

On a positive note, I expected the market to roll over when Powell gave his speech last week and indicated that he had not changed course on rate hikes. He softened up a little but still had no indication of changing direction.

This would have been the key time, when the markets could have resumed their downward spiral. But, they stayed solid. Oftentimes its clues like this that give you an indication where the market is heading next. The best clue is how the market reacts to negative news. And we got that clue last week.

So my guess is sometime this week or next we break out to the upside.

For how long that remains to be seen. We still have the Mueller wildcard, the govt shutdown, an impeachment bill brought on day 1 with the house, and the Dems partying in Puerto Rico while Trump is in the White House working on the people’s business.

So there is plenty that could trigger this market to the downside. Hearings will be getting underway in earnest in the House to continue onward with the attempted take down of this President. It will be an onslaught with the media spinning it in the most negative way possible 24/7.

So, be prepared for more volitility once this gets underway. As far as the Mueller report, I am going to share my thoughts on that in the political-odds section when I discuss the 50/50 odds of impeachment wager. There are a lot of variables to consider, an interesting wager to say the least.

But, if things go sideways, after the report, you do not want to be on the wrong side of this market, at least for a week or two.

I am still long TLT and FXE. Those are my most recent trades that remain that I have not taken a profit in. TLT is not only a trade but a hedge, FXE broke out but has now settled back. If it does not get moving I will be out by the end of the week.

Once we give this consolidation a bit more time, I plan on adding a few long swing trades. But that is a few days away.

As I type this the markets are up about 1/5 with QQQ leading the way at .4%. TLT is off slightly,Oil and Metals are positive and the US dollar is strong.

That to me is a slightly positive bias this morning. If the dollar was weak, and TLT strong it would set the stage for a nice bounce. That is the pre-market reading you want to see. But things can change on a dime. But I see more consolidation ahead 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

0

Did Romney’s Op-Ed start the tone for the Gap down in the market? My thoughts

It’s a very precarious start for the stock market in 2019.
SPY -.87%QQQ -2.42%IWM -.71%IBB -1.28%TLT +.21%Financials -1%+U.S. Dollar +.33%Oil -1%Metals +.5%

Putting it all together it appears to be a negative premarket bias. I would not be trading any gap fills today. Chances for a trend day down seem ripe.

On the political landscape we are still in partial shutdown mode. I do not see Trump caving and I do not see the Dems caving. So, this may well last awhile.

Unless their are enough votes in the Senate to override a Trump Veto. At first glance you might think not, but although a longshot, I would not rule it out.

The house takes control this week. And look out, as then investigations start in earnest. My thought is that the special counsel has been waiting for the change in control of the house. Will issue a report that will promptly initiate the beginning of impeachment proceedings in the House.


I know that there are theories that abound the other way on this but my opinion is that has been the goal from the start. All part of the insurance policy.


I expect a full out assault from the House, The AG in the Southern District of New York, the Media, and from many in the Senate.



Already, Romney has issued a cowardly assault on the President in the Washington Post to start out the new year.

No doubt this was not a spur of the moment thing, but has been planned in concert with others in DC.

This is the time they are going to go full out , to either remove Trump in any way they can. As afterall, the gravy train they have all been on is threatened. And they cannot let that happen.


So that is where we stand going into the New year. The odds are 50/50 of a Trump impeachment in the house, I would be betting he gets impeached. Almost seems like a sure thing to me. They only need a majority, and Ryan and the other 100 republicans that stepped aside to let the Dems take control, did not do that for no reason.


The House gained enough Democrat seats that even if their were a few Dems that had some integrity there would not be enough to defeat an impeachment vote.


The media will be in full frontal assault. Blood will be in the water, and it will be a feeding frenzy.


Now, the question is does Trump survive, and secondly does the Republican party survive.


If anyone can survive it will be Trump. But, Sessions put him in such a hole that I think he is a dog at this point. Unless, he goes on full assault mode and soon. This rope a dope he has been playing is not working.

As far as the Republican party, you are looking at a Republican establishment in its death throus. Trump has 95% of the base and they are discusted with the establishment. The republicans think they can pull off the same thing they did with the tea party. I think they are in for a rude shock.


The end result may well be, the Dems get control of the all brancheds of government in 2020, if they take Trump down and no MAGA candidate comes forward.

The Establishment will not let that happen and my prediction is if trump goes so goes the Republican party.

What does this mean for the markets? Not good. If you thin 2018 was craay, 2019 should be crazy x10.

So be prepared. I would not at all be surprised to see a full blown bear market before the end of 2020.

Happy New Year:)

Now a caveat, I am not alway correct:) But lets just say I think the probability is now low of the above scenerio occuring.

In the meantime all you can do is take your swing trades, mean reversion trades, and see how things go.


I will have more on the Trump impeachment odds in another post later this week.

RickJ

RickJ’s Handicapping Pick

srickjshandicappingpicks.com/investing

Skype: riccja




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Is the stock market ready to bounce:) My thoughts.

Our politicians have done what no one else has been able to do since Trump took office. They have created such fear and anxiety that finally the markets are reacting.


Of course the Fed is not helping raising rates in the face of any number of uncertainties facing the U.S., the least of which is the self inflicted wound the Fed has imposed on the U.S.


In any event, after the worst December so far the markets have ever had we find ourselves +.34% the day after Christmas. Not a conforting sight considering the carnage.


And of course, the markets have to look forward to in 2019:

1. more rate hikes

2. Dems taking over the house with the start of non-stop investigations to begin day 1. If you think Mueller was harassment, you have not seen anything yet. The U.S. will have to endure Schiff on TV every day now with his more than circumstantial B.S.

3. The uncertainty in the Mideast, although, if you do not watch fake news, Trump’s actions in the Mideast are actually making sense.

4. The ending of the Mueller investigation?????

5. Impeachment proceedings in the House????

6. Germany threatening the U.S.????


But let’s raise rates a few more times:) Just to see what happens.


So the question is, of course, where do we go from here? To say the market is oversold would be stating the obvious at this point. The problem is in these severe selloffs, they can get worse. There is no magical point they bounce. You can only go by historical statistics.


They say there is a high probability that we bounce soon, but that there is also a reasonable chance we go lower first.


So, if your a plunger (gambling terms) you probably do not have to worry about it now, as you are most likely broke.
But if your managing your trades appropriately, you most likely underwater, but still thinking clearly.


I have been slowly adding some mean reversion trades, and that is about it right now. Getting ready for the bounce:)
Some tips from someone that has been through this a number of times. If your losing sleep at night or thinking you just need to sell everything. You are trading too high.


That is not the way trading , or any type of gambling works. You should never you’re risking an amount that causes you any concern. That is one of the secrets of becoming successful at this. One of many.
So we have the shutdown and there is no telling when that will end. However, most likely the market has now built that into the equation.


Some things to watch early next year are :

  1. How easily does Trump’s new AG get through the Senate, if at all

  2. 2. What does Mueller conclude about Trump on Collusion and Obstruction ( I expect the worst with a prompt beginning of impeachment in the house)
    3. Watch Graham. He is the bellwether. If he goes full attack mode against Trump the tide may be turning. So far he has stuck with him for the most part. But Graham goes the way the wind is blowing.
    4. Watch Huber, there is speculation rampant from indictments are on the way for the entire crew behind the spying and unmasking to he is doing nothing.
    If you can keep your emotions out of it, it should make for some entertaining days ahead. If you have a lot invested emotionally on either side you are missing out on some very interesting times the U.S. is going through.
    I am looking at another mean reversion trade, but will most likely only add on another leg lower.
    Stay safe trading, these are very treacherous times for the markets.

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

0

Threat of Shutdown vs Super Strong seasonality. Which will win out over the next 2 weeks? My thoughts

We have had an interesting Stock Market the last week or two. You either have a gap down and lower or a gap up and it does not hold.
 
The news is pounding this market not because it is all negative, but because of the knee-jerk reaction, in part caused by program trading.
 
The only way you can trade markets like this is to trade smaller and have larger stops. Otherwise, you do not have a chance.
 
You will either be whipsawed every day or you will take huge loses.
 
Just trade 1/2 size with double the usual stop and you should do much better.
 
It seems thing does not change when it comes to the news. We still have tariffs. But now we have something we have not seen for a while. A government shutdown looms. And this time, I think investors should pay attention to it.
 
The president is committed at this point to getting 5 million for the wall. Before he was forced to compromise to get the military spending he felt was needed. But now, he is free to concentrate on the funding for the wall.
 
Combine that with 2020 approaching and I doubt he is going to leave the wall as an unfilled promise.
 
So that means, if you have been taking the very profitable buy the day before the shutdown deadline trade, it might not work this time around.
 
I know it is hard to predict something that has work 100% in the past as not working this time, but, just keep that in mind:)
 
Which causes us a problem. As we are now in the most profitable days historically for the stock market. The next 2.5 weeks has been almost the nuts in trading the long side.
 
It will be interesting what happens this time around. Shutdown fears vs a very strong historical pattern.
 
I have taken my advice for a change and have cut my trading size down while increasing my stop loss size. It has worked out fine for me, as I have been holding my own in this market. Not making much money but not getting crunched either.
 
Looking over the indexes this morning most are up over 1% premarket. Financials are leading the way, with most everything else in the green except TLT and the U.S. dollar.
 
That is a very strong premarket configuration. I would not be playing a gap fill 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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