Another day another gap up. The question is do we get the hat trick in the Nasdaq🙂
Two days and two big reversals. Its anyone’s guess but the midday reversals in the Nasdaq are not good signs any way you want to spin it.
Trump is speaking live in Davos now and I am wondering what are the odds that Soros is in the crowd listening:) My weird sense of humor at work.
I am looking at a mean reversion trade this morning in IYT. It will depend on how the ETF opens but it is one of the few that have shown up on my morning screen.
I will most likely start off with a 1/2 position equalling 25,000. For this trade 50,000 is a full position.
If we get a big gap up in the ETF I will be passing on the trade.
Historically this method on this ETF has a 2.75 Profit factor, with an average net profit $489.00 on a full position. Average winning trade is 1000 and average losing trade is 1000. % of trades profitable is 73%
Net profit to max drawdown is 5 to 1 intraday and 8 to 1 close.
Those numbers are pretty good and to me worth a trade.
I will be posting the trade on my twitter feed.
Nothing new on the political front. I will let you know when the U.S politics reaches a more sane atmosphere. However, my guess is the U.S. will get much worse before it gets better.
I know it does not seem possible, but, I suspect the Nunez revelations combined with the special counsel sword of Damocles will bring things to the breaking point. Too much is invested by both sides at this point. Its come down to an all or nothing game. Not what you like to see from the U.S. policymakers and the U.S. intelligence community.
I am sure an outsider looking in would find the dynamics fascinating. And that is how you should look at it also. It is not worth devoting your emotional well being into something as dysfunctional as politics.
I promise you it will affect your trading if you do not heed this advice. I see too many close friends getting insane over the day to day machinations of our lawmakers. And when I use the term insane, I am being kind.
And I am not talking about fringe people. I am talking about solid successful people.
So again beware of that trap. Its one of the many traps waiting for you to prevent you from being a successful trade or for that matter successful in any endeavor.
I am done preaching this morning:) Let’s see if we can make some money today.
Of note, all I see is green this morning with the exception of TLT which is off slightly and the Dollar which is off .4%.
That is a bit different than the previous two mornings where TLT diverged from the what I consider a logical configuration. But today all things are lining up for a day that might just hold the gap.
We will see.
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