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’s Handicapping Picks

Skype: Ricca

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