The stock market is gapping up about 1/4% an hour before the open.
Of note, Dollar and TLT weak, everything else looks green with Natural gas leading the pack at +2.5%.
On Wednesday I sold my GLD position at 125.12. I had entered the position on Nov 1st of last year at 120.97. A 3.4% gain in a little over 2 months.
This was a system trade which took off at first, settled back to where we had a loss for awhile and then the latest rally gave us the gain.
Its still all about DACA and the IG report for the markets. Sure there is still a lot of positive effects from the tax cut bill but that is old news.
On DACA the sides are still polarized despite what you might have seen watching the White House get together. You would have thought they were old friends getting together to shoot the breeze:)
Make no mistake about it, nobody’s position has changed and compromise is still a dirty word.
Chance of a DACA agreement lets say 5 to 1 against by the end of March.
So what will happen with the budget? Already the Republicans in the Senate are considering no budget. Why didn’t I think of that? After all, a budget gets in the way of spending money you do not have, along with getting boxed into what your priorities are going to be.
So it will be interesting to see how this plays out.
Of course, the President was very gracious in saying he would sign what they put in front of him on DACA even if he disagrees with it. Not much risk there, as he knows Congress has very little chance of passing a DACA extension bill.
No matter how you look at it the can will be kicked down the road on this one.
As to the IG report, all sides are now jockeying for position ahead of Jan 15st. The smart money is that the report will be devasting for the intelligence community and the prior administration.
I am not so sure that it will be devasting but that is a possibility. The key is what will be done prior to the report coming out to minimize the damage. In other words, what leaks will be spread by the media before Jan 15th?
I find it hard to imagine that there will not be some earth-shaking revelation about the President coming out before the 15th. Something the media will be ready to run with 24/7.
It would not be consistent to have a quiet period heading into this report.
And the problem is if I am correct then I expect the markets will have a violent reaction to the leaks, as they did on the CNN report that turned out to be completely wrong a few weeks ago.
The 15th is next Monday and typically the leaks come out on Friday so the Sunday Cable talk shows have a dearth of material to cover.
If you have a large position in the markets right now on the long side, it would be prudent to hedge your risks until after the Report comes out.
Just some thoughts on a Thursday morning:)
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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