It looks like I am going to get the stock market dip I wanted to start getting ready for mean reversion trades this morning.
We are past the interest rate hike and now have the uncertainty of the spending bill along with the hysteria regarding the Tariffs.
I usually listen to Maria Bartiroma in the morning while looking over the markets. If you up that early and are looking for good market analysis, there is none better. She is one of the best in the business.
Herman Caine during an interview this morning expressed it as well as anyone I have heard. “Take a chill pill”:)
First, as Herman explained these proposed tariffs right now are for negotiating better trade deals. You cannot negotiate effectively without showing commitment and a hammer.
No country wants a trade war. The U.S. is in much better shape to withstand one than China or the E.U. for that matter. The E.U. is fighting to stay alive while China’s economy dwarfs the U.S. economy.
While I agree that Tariffs are not good all other things being equal, sometimes you have to threaten them and be prepared to follow through if you’re going to make better trade deals.
Caine set things into perspective without the political spin that really does not address the merits honestly but are only designed to further a narrative irrespective of whether they are true or false. But that the U.S. politics these days. Honesty and integrity are long gone, and Americans are suffering for it.
So, where is the opportunity now for the swing trader. First on the tax bill. Most likely there will be no shutdown. Whether it looks like the spending bill or a very short term one remains to be seen. But rest assured we are most likely not looking at a shutdown. Although you cannot rule that out.
So, when this is behind us, most likely Friday I expend a nice bounce.
The Tariffs I am not so worried about. But if a deal is made with China I expect also a big rebound in the markets.
So both of these events create opportunities for a nice swing trade long. And of course, the devil is in the details….timing.
I will be looking for a mean reversion trade either this morning or before the close unless we get a big reversal off the open.
As I see it, it is time to start getting back long for the next swing high. With the market down almost 300 points premarket this qualifies for “blood in the streets”. The best time to start trading:)
I got long a 1/2 position in AMTX. But did not get any bounce to exit and the drop was not one I wanted to add another position. So I am in at 1.99 with the stock closing at 1.94. Depending on where we open and the market action I might add the 2nd half.
See you at the open.
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
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