Tuesday had a lot of potential most of the morning. A large gap up, a continuation but then close to 11 or so a steady weakening into the close.
The only thing that I could see that might of precipitated it was Fed Speak. And there is more of it today. It is looking to me that now the Fed is most likely going to raise rates in December. I guess they are believing their own numbers that completely ignore the soft recovery and the record amount of Americans out of the workforce.
My prediction is if the Fed does start “normalizing” rates it is not going to be a pretty sight.
But the Fed has blinked before and perhaps this is just talking as it all has been before. It does not seem however to look that way this time around.
We are entering soon the strongest months of the year for the stock market. Typically I put together a portfolio of stocks to hold until may 1. I have been doing that for years. This last year however I blinked and jettisoned the portfolio early as a result of the historic freefall of the market. So I like all the other punters who did that lost money. Even I am not immune to the vagaries of human nature:) Where was my inner Spock to save me from that human decision!
So this year I may forgo this approach and stick to my mean reversion and breakout trading which has served me well. We will see. I am still on the fence.
The market has come back from the abyss and it at its overnight highs 30 min before the open. 2126.50 was the ES low 12 pts below where we are now.
I had a good day in the markets yesterday as I had a good gain with my dec2 45 calls in TWLO for a 33% gain in a day or so. I also took a position in the stock when it plummeted intraday for a nice profit. I also had another swing that worked out very well. I exited these at the close.
I have two mean reversion trades still going so the gap up is a welcome sight. This week is working out as planned so far and I expect further strength into Fridays open. Then all bets are off:)
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. 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
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