The Stock Market is gaping down this morning about an hour before the open. The Nasdaq leads the way off 3/4%.
Of note, TLT and Financials are negative while Metals and oil positive. Oil is up almost 1.5%.
To me, this is a neutral Pre-market bias. That can change depending on how TLT and the Financials go before the open.
Its mostly about China trade this morning, as China has pulled out of trade talks this weekend. And it appears, more Tariffs are coming China’s way.
I am pretty sure that the trade talks have not been as easy as the White House anticipated. I remember the statement “Trade wars are easy”!
This one appears to be anything but easy. If I were a Monday morning quarterback I would suggest these were a tactical mistake for the White House. With Midterms coming up and his enemies waiting for him to slip up, trade wars have complicated things for the White House and Republicans running for reelection.
There is something to be said for doing things one step at a time. But I have to admit, I was not critical at the time this all started. So, the woulda coulda argument is just that. An observation, after the fact.:)
In the U.S. we have gone from Chaos to pure madness. The U.S. is sinking into an abyss that is not going to end well for it at home.
First, we have the Kavanaugh madness. It’s clear the Democrats are going to do whatever it takes, legal or illegal to derail this nomination. And it is equally clear that the Republican does not have the stomach for the fight.
Of course, there is nothing new about this. Democrats do whatever it takes and Republicans think that appeasing is always the best way to go rather than take the fight to them.
So we are seeing the results of the two strategies with Kavanaugh. And it is turning out that Kavanaugh is going to be collateral damage.
For the Democrats that is acceptable. After all, the ends always justify the means. For the Republicans, they will hold their heads down in shame and then do it again the next time.
Kavanaugh has gone from a 10 to 1 favorite to be confirmed to a 2 to 1 dog. If I were forced to wager on this I would lay the 2 to 1. Because after all, how would anyone in their right mind wager that the Republicans would take a stand.
The first accuser’s story has been taken to the woodshed. But, as expected we have a 2nd accuser now, with about the same specificity as the first. And as if that is not enough, to add to this circus, we have Stormy Daniels attorney saying that Kavanaugh was part of a group that systematically raped women.
Of course, no evidence has been presented.
Like I said, lay the 2 to 1. Can you see Collins and Murkowski saying, oh what the heck, I am voting yes? And Flake you can take as a given he is not voting for the nomination.
An outside observer might wonder what is going on with Americans here. It’s all pretty simple. The one thing that you can be certain of is this has nothing to do with Kavanaugh’s sexual proclivities.
Its all about the midterms and control of the Supreme Court. Nothing else matters. How many lives get ruined forever means nothing to our representatives in DC. That is why they have no business being there.
Then to add to the madness, McCabe released some memos stated the 2nd in Command at the DOJ was wanting to wear a wire while talking to the President to help get him removed from office.
Let that sink in for a while. And this person is controlling the Special Counsel investigation! If you have not noticed, there is no law and order at the moment in the U.S. Unless of course, you are on the wrong side of the establishment.
Another interesting side note is Sessions lack of response to these revelations. As the AG you would expect, that allegations as serious as this would prompt an immediate response from the AG. At least a public statement. But all we have from Sessions is silence.
As Spock would say, it’s not logical:)
Finally, we have the declassification issue. The White House has ordered the declassification of the FISA material along with the text messages of all involved.
If these are released, the results will be devasting in my opinion. And, this NYT report about Rosenstein was a warning shot to Rosenstein what will happen if he allows this.
Which if true means there is much more to Rosenstein then just these remarks.
So that is the backdrop we find ourselves heading into what is typically the worse week of the year for the stock market:)
I have thinned out substantially many of my swing trades, and as of now just have a handful. I am going to be very conservative this week. More than I typically am.
There will be massive demonstrations this week in DC on both sides of the Kavanaugh issue. It would not surprise me to see Antifa show up at some point also.
I was in college during the 60s. The “Make love not war” generation. And I would say what is going on right now is much worse then what we saw back then. There are some that disagree with this statement, but I do not think it is even close.
Back then they did not have the outside interests and the massive flows of money coming in to disrupt things here in the US.
Now there are unlimited resources to undo American society. Or as Obama would put it “transform America”
That is what this fight is all about. The issues are merely the means to the end for the participants.
I assure you, at some point, this will spill over to the stock market. I am not sure what the trigger will be, but I can guess it might have something to do with removing Trump from office.
If those efforts become obtainable, the market will drop as you have never seen it in history. My guess is at least down 2000 points in the dow for the day. It will be pure panic.
So keep an eye on things.
If you want a simple weather vane for the political future of the President, just follow Lyndsey Graham.
He is very vocal. On talk shows all the time. And he has vacillated from ridiculing Trump to praising him.
At this moment, Graham acts like he is Trump’s best friend. That means Trump is fine. That things are under control. But if this tenor shifts with Graham and you start seeing him back away from the President and get back into Trump bashing mode you will know things have changed.
It’s really that easy to get a reasonable handle on what kind of jeopardy Trump might be in. You can use that as a guide for hedging your positions. I will be doing that, I can assure you.
We are far from mean reversion territory today, and I suspect it would take quite a drop from here for me to get interested in a trade.
But, despite my negativity, I trade price. So let’s see how things go this morning:)
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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