Markets are gapping down this morning almost 1/4% 45 min before the open.
Of note, metals strong, financials off, biotech up. A neutral premarket to me.
I had one stock yesterday on my watch list and it took off without me. Was up almost 4% on the day and I missed it.
That happens from time to time. I did not like the breath at the time so passed on the trade.
This morning on my watch list is AGN. Ideally, we get some kind of divergence on the 15 min chart. We have that now, however, let’s see what it looks like after the open.
It’s amazing to me how quiet things are when Congress and the President are not in session:) Perhaps we can convince them to stay on vacation permanently. Would be an improvement from the chaos we see when they are in session.
Of note, Grassley announced he is ramping up the Russia Collusion investigation in the Senate. A big mistake for the Republican Party. They should be winding things down with 2018 around the corner.
Trumpers are running against establishment Republicans in the primaries in Alabama, Nevada, and Arizona. My guess is all 3 establishment Republicans will get primaried out. So I would be wagering against Heller, Flake, and Strange. You get odds on all 3 and I do not think you will do worse than 2 out of 3 with a good chance of 3 for 3.
Alabama will be a good indicator as the GOP establishment is spending big dollars to get Strange in. The odds have now switched to Moore being favored over strange. By election day I suspect the line will be at least 2 to 1 against Strange. If he loses the Republicans will most likely shift gears on this Russia investigation. But it might be too late.
I do not think the Democrats will benefit from the Republicans failure to govern. The group that will most likely benefit will be the Trumpers. At least that is how I see it.
Now you can ask what about the polls? I suspect the polling that shows Trump with a 34% approval rating is off by at least 10 pts as were the polls pre-election. Rasmusson has Trump at 41%, 7 pts higher than what the mainstream media is touting.
So, when evaluating what the proper odds will be, you have to add at least 10 points to the polling. Many Trump voters will not admit they are a Trump person because of the violence directed to Trump supporters. In addition, most of the polling is oversampled with a universe of Democrats overweighted in the mix.
That is how I view things. I could, of course, be off. It has happened before. As in the Wray confirmation. But, let’s see how he does his first 6 months to evaluate him.
I do not think the Senate would have approved him if he was going to help Trump. Many in the Senate are all in on Trump being removed from office. And when I say all in, I mean all in. If they lose they will lose big.
This entire political drama and chaos put “House of Cards” as a light comedy compared to reality in the U.S.
One new line that came out is Ryan in the primary. He is a 10 to 1 favorite to win the primary. Take the odds. It will be much closer by the primary. I would guess he is no more than a 4 to 1 favorite. One tipoff is Ryan just came out in full support of building the wall! That is most likely because his internal polling indicates trouble is brewing.
The big question is whether Trump will endorse him. I think he will not and will endorse Ryan’s challenger. It would be much closer if they were not going after Trump’s son. But, for Trump that is crossing all lines. He will not forget this. So, I expect Ryan will get some payback. We will see:)
All this means that Chaos is not winding down anytime soon. I suspect things are going to get much worse before long. Trump’s UN success with N. Korean sanctions is forcing the schemers to get things moving faster. What they do not need is Trump having success after success. Will make it much harder for them come removal time.
All this means is that the markets are subject to a severe downdraft when things really start getting dicey on the Presidency. I suspect when that time comes we will see at least a 500 pt down day if not bigger. The timing is the key.
If you could find out how some of the key political players were hedging their portfolios or going short you would probably be able to hit the date within days:)
My trading will be the same as yesterday, cautious and waiting for a good setup depending on the breadth.
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
