Its all about tax cuts this week. The stock market will most likely react to rumor until the actual vote or non vote by week end.
The odds are 3 to 1 in favor of a vote in the Senate by year end.
However, the odds of a Individual Tax Cut by year end are 2-1 against and a Corporate tax cut by year end even money.
I guess the thinking is that the bill will get out of the Senate but then reconciliation will fail this year.
Myself I say take the 3 to 1 on a Senate vote on tax cuts this year. As I view the polticial environment in the Senate there is little to no chance of a vote on tax cuts this year. Rememer McConell was humilated on the health car bill by McCain killing the bill.
Votes are not brought up unless they will pass. So, McConnell will not make that mistake again.
So your looking a no Democrats voting for the bill, and you have a handful of Republicans that say they are on the fence. Only 1 of them to me is an honest broker holding out for some changes. The rest its purely political.
This means that more than likely you will see McCain, Flake and Corker voting no to take the heat off the rest. Remember Flake and Corkers popularity at home is so low they are not running in the primary. So they are lame duck. McCain on the other hand has a terminal illness and more than likely this will be his last term in the Senate.
The rest of the no votes will get a pass so that they can tell their constituents they tried.
That’s the way it works in the Senate. Call me a cynic, but lets see how close I get. It will be a miracle if it gets out of the Senate. There are special interests with substantial bucks paying or elected officials to vote no. And to our politicians at this point, that is all that matters.
What that means for the stock market is expect ups and downs with the news this week and then a sell off when it becomes clear the bill is not getting out of the Senate.
One alternative to the above is a bill comes out of the Senate that they know is a non starter in the House. Never underestimate the inginuity of our Senators. Especially when they political scores to settle.
The stock market this morning is pretty tame so far about even. Of note Metals, Oil and Natural gas strong. TLT is slightly up.
A neutral environment to me.
I have GLD as a system trade and still hanging onto XNCR.
I expect weakness this week unless we get a bill passed out of the Senate. I also expect some volitility based upon the tax bill news.
After this week, I expect another rally as this is the best time of the year historically for the markets.
Also, we have a government shutdown issue looming in December!
The way to look at these unknowns is that they creat opportunity. But timing is everything.
I will look for a day trade this morning at the open. Come follow along at @rickjswings
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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