A brutal day on Monday with the markets gapping down and staying down all day. This morning an hour before the open we are unchanged after some gains in overnight trading.
It is looking to me that we have lower to go. I was open to starting mean reversion trading at the close but then saw the breath and price action. That was enough to convince me to wait.
I am long Soyb and Weat. We are right above my stop points on both so its either rally from here or a small loss.
Today it’s still time to be cautious. I expect some follow through to the downside.
So I will be monitoring the market for the first 15 min to decide whether to jump in for swing longs. On the Geopolitical front things are getting even more nervous.
Putin decides to bring all Russian nationals home from foreign schools. Obama and Kerry both threaten Putin. The democrats continue to demonize Russia for the Wikileaks revelations.
Nothing good can come from this as I see it. Threats and accusations are rising every day now along with one of the U.S. ships getting attacked in the Mideast by one of Iran’s proxies.
These are very dangerous times and if you are in the markets with a substantial % of your assets it is something that you should monitor daily. Again and I cannot stress this enough…If hostilities break out between Russia and the U.S. no matter how small of an event the market is going down substantially!
Combine that with the continued polarization here at home between our elected representatives means a real recipe for disaster. One item that has not been built in the markets is the effect of boycotts on major business because of political or issue leanings.
The NFL has already taken a hit as a result of the American flag and National Anthem issue. Kroeger now is the target of boycott groups now while we can see what happened to Target over the transgender bathroom issue. They have been hammered in the markets as a result of boycotts.
I think this way of retaliation is just starting in the U.S. Leaders in both parties have pushed this type of retaliation and it is going to blow up in America’s face.
Then you combine all of this with a potential rate hike in Dec and you can understand what a headwind is:) The markets right now are pricing in a 75% hike in Dec. That is astonishing to me as the world is begging the Fed now not to do that.
These are what the markets have to deal with. And things you should be monitoring if you’re seriously involved in the markets. It would be nice if you could pull out your charts and trade solely from them. In many instances, you can but you still need to know the universe your trading in.
Finally, any comments I have made in no way represent my position on any political party, candidate or any issue for that matter. They are only brought up to illustrate the potential effect of events on the markets.
That’s going to be it for this morning. I will be commenting on the market open and trading environment for the first 10 to 15 min of the day from my private twitter feed @rickjswings
Good Luck Today
RickJ
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