Markets are off a bit an hour before the open. Of note, GLD and SLV are positive, while financials are off a bit but it is a scattered weakness in some of the financials as opposed to across the board. TLT is up and oil is unchanged.
To me, this means a bias to the downside today but not by much.
I put on a swing trade yesterday in INVA. I have been tracking that stock for awhile and yesterday was the perfect opportunity to take a shot at it. We were shaping up to be a trend day up with $ADD over +1500. I got in at 13.74 with a day target of 14.31. Everything went almost to perfection, except we got a pullback in the markets that looked to me like was way too much to sustain a trend day.
I booked my profit at 14.04. After that, the stock hit my target of 14.31:)
The lesson of the above trade is to have a basket of stocks with good setups ready and waiting. When a trend day is setting up early in the day start monitoring your basket for trades.
A flashing light should go off when $ADD is +1000 or more after 30 min of trading. Confirmation of a trend day to me is >+1500 on $ADD. That is when the wind is at your back for these BO trades.
A lot of money is lost on range days playing breakouts for a day trade. And more is lost trading long on a trend day down day. If your going to trade opposite of a trend day the time is right before the close. But even that is tricky and requires a lot of judgment.
On the home front, it is quiet as Congress is on their many vacations. Notice how quiet it is when they are gone. Very peaceful:)
However, on the world front, things are not so quiet. Trump is working 7 days a week and has been since he started running for President. Non-stop is his psychological makeup. Not many can do that when they are younger but even fewer when they are in their 70s.
So, there is a plus to that in at least one person is trying to improve the U.S. But the downside is sometimes things can get iffy trying to interpret what he is up to.
The big thing now is the U.S. warships heading to the Korean Peninsula. Trump, rightfully so, does not telegraph his intentions. But, word is now that China has amassed 150,000 troops on the Korean border with S. Korea.
Whether this is coordinated with Washington as part of a plan or is to let Washington know they will not tolerate the U.S. attacking N.Korea remains to be seen. After all, Trump just met with the Chinese leader a few days ago with all accounts of the meeting being a big success.
So how you interpret the above should be how to take advantage of the market with this news. If you think China is on board with the ouster of the N.Korean leader you can play a news rally, as it will rally at the first sign of this happening.
But if you interpret the above to mean a confrontation with China militarily then you do not want to be messing with the markets. As the volatility has the potential to be extreme.
Myself, I tend to think it the first scenario but not by enough to bet any money on it.
And then, of course, we have Syria. Trump give Syria and Russia a warning and you would think World war 3 has been started by his second-guessing critics. When Obama did what he did the warmongers were screaming at him daily. And now that Trump is actually doing something in a reasonable, thoughtful way the same critics are still warmongering.
This has the potential to ignite much more than the situation in N.Korean. China is a steady thoughtful country that is not going to do anything unless the U.S. goes way off the reservation.
In Syria however, the U.S. is not dealing with China. They are dealing with Syria, Iran, and Russia. Not even close to the steady thinking process that China has. That is where the problem will be if one does develop, not N.Korea.
Those are my thoughts on a Tuesday morning. Geopolitical events are not only interesting but if you are trading it is something you really have to stay on top of. If you do, you have the opportunity to be rewarded for it. If you do not, it can really bite you.
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
