The stock market is gapping up this morning, in most instances over .5%.
Of note, Financials, Metals, very strong. Only red I can see is TLT and its only off .14%.
I am still long JO and UUP for bottom reversal trades. JO almost stopped out yesterday but a late rally kept me in. Premarket JO is off -1.5%:( I also have for mean reversion XNCR and a trade I made yesterday in IBB.
Biotech has been beaten down for awhile now and my models show mean reversion is a good wager right now. We will see:)
It’s obvious the rally is predicated on the tax bill that has now been delayed until Thursday. I suspect the odds are getting betting for a pass of the bill. Its hard for me to quantify it right now as it will depend on what they do with the state tax deductions.
Although, I am still skeptical of the bill passing in the Senate unless they get a handful of Democrats on board.
At home, the Special Counsel probe has taken an unexpected turn. It turns out that right now a focus of the probe is the Illegal lobbying done by foreign governments that have influenced U.S. policy at the expense of the U.S. national security.
The rumors are running rampant now that this is all part of a sting put in motion by Trump, Mueller, and Sessions. I am a bit skeptical of taking that leap:) But there is no question that the probe is concentrating on that area right now.
The lobbying firms and Congressmen involved in this wide open to indictments. I imagine there are Congressmen losing a lot of sleep right now. In addition, you can tell something is up when some in the mainstream media are now wanting the Special Counsel to be fired. A complete shift from where they were a week before! In addition, Pelosi is now calling for the need of a 2nd special counsel.
Some in Congress are not very happy with this shift in direction.
What does this mean for the markets? A lot. If this is true this could shake the foundations of our country as there will be quite a few Congressmen open to Criminal prosecution. Keep a watch on this one. Especially as to who the next indictments are against.
In addition, if you have a large portfolio my recommendation is you hedge heading into this weekend. There is a lot going on politically in the U.S. right now. Combined with the direction the special counsel is taking I suspect there is a reasonable chance of widespread violence this weekend. If it gets out of hand the markets will tank on Monday.
I am hedging as its only a very short time. Nothing significant happens this weekend and hedges are lifted on Monday. But I think the risk is very high this weekend. Complacency is very low on this remarkably.
Let’s see how close I get on this guess:) I stay up on most of the news and then try to extrapolate what the effects could be on the markets. Sometimes I am correct and sometimes not. But as you have seen from the political odds section I typically get it right.
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