Yesterday just 5 min after I posted that you could take it to the bank that there would be no rate hikes before the elections in November a Fed Governor gave a speech that there might be a rate hike in September!!!
I guess no one told him not to rock the boat with the elections coming up:) Either that or perhaps he is a Republican.
Either way I stick to my analysis. Which means that rate hike talk creates opportunity to start taking swing longs again on pullback. At least that is how I am going to play it.
We have the Fed minutes on tap today at 11 and I suspect you will see a dovish fed from those minutes. Ideally we get more of a pullback this morning in the stock market with the idea of taking break out trades to the upside after the minutes are released if the market reacts positively.
If you want to be more aggressive you could take a few breakout trades before the minutes and i might just do that depending on how the trades set up. I have my eye on a basket of stocks ready to break out. So lets see how it goes today. One other thing is that the pullback yesterday helped but did not reduce a overbought condition. That means any break out trade I take will be a short-term trade.
On the geopolitical front the news that Iran has let Russia use their airbases for strikes inside Syria is a red flag that cannot be good for the U.S. In addition word is that China is helping train Assad troops in Syria.
These events while at present are unlikely to trigger any market reaction. Down the road they have the potential to cause havoc depending on how things play out. Best to keep an eye on this as the exit will be very crowded if things get crazy.
One other ting to keep track of is the chances of a recession here at home in the U.S. A good way to do that is to read “Dash of Insight” each week. That publication should keep you abreast so that you have an advanced warning of that possibility. Right now the odds of a recession are extremely low short-term.
So today I most likely will be taking a few breakout trades if they trigger. My only position is GLD and I am sitting on a nice gain there. One of the filters I am using in addition to the overall market is $ADD. Typically if that is -500 or below I refrain from taking long breakout trades. If its +1000 or more I take most that trigger with the idea of holding for a trend day. There is nothing better than taking a long breakout and have the day turn into a strong trend day.
Enough mumbling for this morning. If you wish to follow my trades and comments just go to @rickjswings.Its my private twitter feed for the markets. Unlike my private sports handicapping feed its free!
Good Luck Today
RickJ’s Handicapping Picks