What is the single most important thing lurking in the background that might crash the stock market?

Small caps gapping down almost .5% with the other indexes up about 1/5%.

Of note, Financials strong, metals weak (especially silver) oil weak, TLT off a bit.

Overall looks like a soft premarket.

The Nasdaq is very oversold right now and ripe for some type of a bounce. I am looking at several ways to play it.

First, nflx or qqq looks like the way to go for a quick gain. I would prefer seeing a red to green trade but it looks like I will have to settle for a gap fill first to try that trade.

Another stock I am looking for is MMC with the same strategy as above.

So ideally we get a gap fill early and then look to get long on a red to green move after the gap fill. That is looking like my plan this morning.

Not sure where MMC is going to open so might just be a red to green trade from the start on that one.

There are a few other stocks I am looking at but the above looks like great setups to me.

Not much new on the news front over the July 4th holidays with the exception of the N.Korea test and CNN further endearing themselves to the world by allegedly threatening a minor for posting a meme on the internet.

I have a hunch that this time CNN has crossed the line and will pay the consequences. Their viewership is in freefall and now they have compounded their situation by this puzzling display of tone deafness.

How this affects the markets is unknown although it just creates more insanity to the already chaotic state of U.S. politics.

In addition remember, we have health care on tap when the distinguished senators get back from their well earned 4th holiday, Yellen and the Fed in tightening mode trying as best they can to put a halt to the optimism created by new jobs and a growing manufacturing base.

Also lurking in the weeds is the special counsel. At any point in time, a leak could send this market quickly into a nosedive. This could occur at a moments notice.

I expect we get a few leaks from this group and in addition, I fully expect a constitutional crisis to develop as a result of Sessions losing control of the Justice Department. It is not going to be pretty when the branches of government finally standoff to assert control.

This is a wound that did not have to happen. But as it will turn out most likely the worst decision Trump made was appoint Sessions as AG. This, of course, is in retrospect, as I did not see it coming in the slightest. But, again in retrospect, what would one expect from a person who has been a sitting congressman for over 30 years.

Of all the things going on now this to me is the most dangerous for the markets. And I see no way to avoid what is coming short of Sessions reversing his recusal and getting rid of a special counsel that arguably should not have been appointed in the first place.

If you have any doubts as to what their goal is, all one needs to do is see who they are hiring. It’s the who’s who of Democratic attorneys with strong ties to the higher-ups in the Democratic party.

If your an anti trumper you should be ecstatic. If you’re a Trump person you are most likely angry. And if you’re neither you are most likely concerned about the potential for bias of the special counsel and his team.

Myself, I am concerned. This has the potential to further politicize an already political process that is right at the breaking point. It also has the potential to further divide and already an extremely divided country.

Once the markets take this seriously I expect a drop that will make people look in disbelief how it could occur in the magnitude.

I got off on this tangent as I feel this is probably the most significant thing that has come along for some time now that has the potential to crash this market.

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

RickJ’s Handicapping Picks

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