After Thursday’s rally, the stock market is starting April with a gap down this morning. We are up off the overnight lows with the indexes down from 1/5 to 1/2%.
Of note, Financials, U.S. Dollar, and TLT weak and Metals and Oil positive.
To me, this looks like a neutral bias despite the gap lower we are seeing this morning.
I have a number of trades going right now.
Mean reversion trades in SSO and QLD. Both are aways from the exit trigger.
I also added GLD for a swing trade on Thursday. This is a swing trade as opposed to a mean reversion trade. It is a 3-day trade taking advantage of some short-term bias’. We are gaping up about 1/2% in GLD this morning.
Finally, I am back in AMTX with a 1/2 position at 1.75. Note that the trading range has changed on this stock. I am using for now 1.70 to 1.90.
AMTX has been a great trading vehicle for picking off a few hundred here and there. So far I have not had a losing trade playing these ranges in the stock. Let’s see how long this can last:)
As far as the international front there is good and bad. The good is that I am predicting the N.Korea is going to denuclearize. Most likely the deal has already been struck. No more testing so far, agreement to allow S. Korea and the U.S. to conduct joint exercises, N. Korea committing to being in the Olympics the next 2 times, and a summit scheduled now between N.Korea and S. Korea.
These are not small developments. The Trump administration will most likely accomplish what many others before it have not been able to accomplish.
The negative is the trade situation between the U.S. and China. However, China’s response so far has been extremely muted. Yes, they announced increased tariffs but the size was minuscule. My guess is that once the agreement is made with N. Korea to denuclearize the U.S. will sit down with China and reach a deal on trade. That should be by the end of April.
At home, the situation is much worse. Congress is as dysfunctional as it has ever been. The grandstanding of the politicians on the Sundays shows is astonishing since they do almost nothing while in session except make things worse.
The political divide in the U.S. keeps getting worse. Boycott talks are picking up steam again with both sides now threatening boycotts as a tactic for what they do not like the other side. This is no small thing as it not only threatens the 1st amendment but also will have an effect on the U.S. economy.
As a swing trader, you want to have a list of the companies that might be affected by these potential boycotts. Netflix and the list of companies pulling their ads from the Ingrahm show would be a good start.
Then you have the immigration issue that is getting more heated. Now you have Mexico contributing to the problem allowing large groups from S. America to traverse Mexico to try to get into the U.S. illegally.
I doubt this will end well for the U.S, Mexico or the unfortunates that are marching this way. The risks they face are extreme along the way let alone what they will face at the border.
I imagine there will be repercussions for this against Mexico in the way of NAFTA or AID to Mexico. And I would expect it to happen soon. I doubt the Trump administration is going to sit by and let Mexico be a party to what is going on without paying a price.
There, of course, is more unfortunately but too numerous to talk about this morning 30 min before the open.
There are positives. Low-interest rates(for now), the tax cuts, employment at record lows, business coming back into the U.S. to name a few. These tax cuts are going to do wonders for the bottom line of many stocks being traded the next earnings season.
Volatility is here to stay for awhile. So like it or not you need to adjust for it. Cut your trade size back so that your always comfortable regardless of how the market moves. If you feel stress or worry about what the market is going to do your trade size is too high.
This is supposed to be a fun endeavor. If you’re not having fun take a break for a few weeks and adjust your mental balance. Sometimes it’s necessary when you trade or gamble every day. I have done it more times then you can count:)
Have a great trading day!
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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