This morning the markets are gapping up the 2nd day in a row. Yesterday we had a breath divergence that won out with the markets weakening from the open.
I put on some trades yesterday just prior to the close as the 3-day pullback looked to me like a good entry for a short term swing. I bought both SLS and CSX.
Of note, Oil weak, Metals weak, Financials and biotech strong and TLT weak
Overall looks like a positive bias this morning.
The key this morning will be to look for breath divergences again during the first 15 to 30 minutes. That will give you an idea if today will be a repeat from yesterday.
Not much has changed on the political and foreign policy fronts. My comments yesterday have not changed.
Although, for entertainment, Kelly’s first day on the job resulted in the first casualty being the Mooch. 10 days as communications director probably set a record.
To me, it looks like the White House is getting ready for a battle. They have learned the hard way that putting establishment Republicans in key positions to appease the elites do not work. The only thing that will appease the entrenched establishment Republicans is to remove Trump from office. And that is what they are trying to do. And at this point, they do not try to hide it.
Who will win? If Sessions had not recused himself Trump would be a cinch to win out. Without an effective AG it’s a much closer call. But I still give the nod to Trump. Say 3 to 1 in favor of the swamp getting drained and Trump surviving.
But there will be the same chaotic mess we have been seeing every day. Except that in the wings you have the special counsel getting ready to deliver a bombshell at any time. If you think things are chaotic now, wait until Mueller and his team announce Trump is guilty of some major felony. It is coming as they did not hire their team to exonerate Trump.
So again that’s the backdrop the market is in right now. Be prepared for anything, we are in unchartered territory right now in the U.S. where people are openly calling for a coup, with many in Congress supporting it.
Should be interesting, to say the least. I do not plan on losing any money in the event things turn south. But might be easier said than done.
Today, if we get a pullback I will be looking to add to my positions. If it looks like a trend day up early I may take a stab at a breakout play. 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