Stock Market Comment

Stock Market Comment

A Comment regarding the stock market:

“It looks like the market is due for a correction but the trend has been up up up. Any thoughts on the short term through march.”

I agree…it would seem that way. My swing trade parameters tells me however that the market is not ready to be sold for a swing. More importantly the fed is pumping liquidity into the markets at unprecedented rates. Until this eases up or reverses course it would be folly to attempt a swing trade on the short side. And there is no indication this is going to change anytime soon.

On a fundamental front however we do have the sequestration beginning march 1st. Logically you would think at some point between now and march 1st market participants would be getting very nervous and that might trigger a significant pullback. But its very speculative thinking. Regardless of what the politicians say publicly if past history is any guide a last minute deal is more likely to happen.

Of course this time might be different…but who knows. One thing we do know is that Obama is not hesitant to go out of his way to disrupt the markets as a bargaining tool. His well timed press conferences did just that on the fiscal cliff. Rather then waiting until after the markets closed on a friday he choose to give a press conference 30 min before the market closed causing an almost 300 pt downswing in the market. I would not expect anything less of him this time around.

Perhaps the strategy should be to put on a short term hedge or get short about 15 min before he gives a press conference if no deal has been made. That most likely will be my strategy…but only for a short term swing.

In any event…that is my thoughts on the markets at this point.

Twitter: rickjsportplays
Twitter: rickjswingtrade

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