Markets are gapping up this morning lead by IWM with QQQ trailing. Of note, Financials are strong, Oil Strong, GLD and SLV weak.
This combination has a slight bias for the potential of a strong day today.
I added a few swing trades yesterday and exited one namely AKAO. I bought it a few days ago and there was no follow through so I took a small loss. These trades are not trades where you are investing and taking a look next year to see where they are.
They are based upon a mixture of variables that tend to be predictive of a bias of a move to the upside right away. So if the expected does not occur it is best to exit and look for other trades. The result is in this type of trading, many small losses that are offset easily by few wins by much larger gains. That is the theory anyway:)
On the political front both home and abroad. Nothing has changed with the exception that the discussion has gone from Trump/Russia to Obama spying on Trump.
If you are a Trump supporter you happy and if you’re a Trump hater unhappy and there are plenty of both.
It’s a bit early to say with 100% certainty that Trump was spied on but if I were making a line and you wanted to bet that Trump was not spied on by the previous administration you could get easily from me 10 to 1. At that price, I would have a very large overlay as I put the line out at 100 to 1 and that might be shortchanging it.
Now, whether the spying was justified or illegal, is a closer question. But as time goes by, that argument is being eroded.
Now, you’re hearing this from an independent. I am neither Republican or Democrat. I have no bias toward either side except as I view what the facts are.
Understanding what is going on and why is essential to understanding the backdrop of the markets. As right now there are a number of things going on that could easily topple this bull market. A constitutional crisis is certainly one of them. A government shutdown is another.
With the likelihood of the Reid rule now being applied to supreme court nominations ni the Senate, the Democrats are even going to be more hard pressed to do something like shut the government down the end of this month.
This is going to get very crazy beginning say around 4/20 or so when the markets realize that a shutdown will most likely happen.
Those are my thoughts on a Wed morning. The gist is you do not want to be overextended in the markets going into this debt ceiling fight.
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’s Handicapping Picks