The markets are up almost 1/2 % premarket. TLT off 1/3% GLD off 1/5% Vix.x off 2.50%.
This is a positive premarket and I expect some follow-through this morning after the open.
One of the most amazing things is the Senate trial on impeachment begins next Tuesday and the markets have shrug it off paying no attention to it.
As I have said, I expect some drama in the Senate but an acquittal after the clown show is over. They do not have the votes in the Senate to convict. As someone put it yesterday, neither the facts and the law are on their side.
The market is about as overbought as I have seen in it. Any startling news at this point could give a sharp reaction to the downside. If by any quirk it starts looking like there is a chance at conviction in the Senate, the Markets would take a nosedive that would leave you either breathless or broke.
To be on the safe side, I would not be overinvested in this market right now. Remember we are dealing with politicians. They are not the most reliable to say the least.
Saying that I have a base portfolio that I am also using short term swing trades and in addition selling weekly puts for income. I do not recommend the 2nd approach unless you are a seasoned gambler. It is one of the more riskier things you can do in the market. You have to stay on top of these trades closely. But with adequate screening you can find some incredible trades with returns you would find hard to imagine.
In order to short puts, you need a margin account, and need to have substantial funds to weather the downside to these trades. When I say substantial, I mean at the very least 100,000 and ideally 500,000. The more the better.
The reason is you are only going to risk a very small % of your account on each trade.
Let’s take a look at the updated political odds this morning:
Senate convicts Trump in 1st Term: 11/89 +2 Pts (This is the one to watch) Was at .07/.93
I took the 9/91 a few days ago. I can lay it off at .10 this morning. with a 10%+gain. I am going to hold off for another 10% right now. So will most likely lay it off at .11.
Trump to get the Republican nomination: 92/8 +2 Pts (Another one to watch) Staying at the highs
Which Party wins the Presidency in 2020: It is virtually a tossup at this point with the Dems having lost any edge they had a month ago. (If Trump is not at the head of the party the Republicans have virtually no chance of keeping the Presidency or the Senate, they will lose all 3)
Control of the House after 2020: Dems 73/27 +1 Pt ( I think there is value taking the odds on this one, you are getting over 2 to 1 and the negative effect of impeachment, in my opinion, has not been built into the line yet. A better wager will be to bet against every incumbent house member that voted to impeach in 2020 that reside in states that Trump carried. That will be around 30 wagers. You will probably get +odds on most on the open, and I cannot see losing over 50% with the potential over winning over 60% of them. This is probably the best wager that will come around in a long time. Except of course for the Netanyahu wager, I made 100% on a few months ago:)
That was a wager where very few understood how Israel elections worked. You were getting a nice price on a wager that had the wrong favorite.
Control of the Senate after 2020: 72/28 Republicans. -1 Pt
U.S. Presidential winner:
Trump: 51/49 No Change
Warren: 6/84 No Change
Biden: 22/78 -2 Pts
Buttigieg 5/85 -2 Pts
Sanders 21/79 No Change
Bloomberg 6/84 +1 Pt
Clinton 2/98 No Change
These are pretty meaningless right now the way the Democrats pick their candidate. Essentially, whoever the party leaders want the party leaders get. And they do not want Sanders. My guess is a brokered convention and a new name appears. I would say the odds are 50/50 that the Democrat nominee is not on the list of candidates right now.
Watch the conviction odds every day to get an idea of where things are at. It is very unlikely they get the votes needed to convict. However, the Senate is a snakepit. Do not be surprised if this turns out closer then you think. If the odds start getting close to 3 to 1 against conviction its time to start paying attention.
RickJs Handicapping Picks