After a long weekend, the stock market is poised to gap lower this morning by about 1/4%.
Of note, TLT is off 1/2% while Oil is strong. Also, Metals and financials are weak. Most likely the U.S. dollar is up almost 1/2% is contributing to the metals being off.
We have our bottom reversal trade in GLD which most likely will get stopped out today unless we get a reversal by 10:30.
A lot of news starting out the short week. First, we have the Kavanaugh hearing set to begin today. They promise to be a stomach-churning display of Congressional dysfunction that we have not seen since the Bork hearings.
The odds are 12 to 1 that Kavanaugh will be confirmed. I am not that optimistic. 3 to 1 or even less is more like it unless the governor of Arizona can get his Senate appointment through before the vote in the full Senate.
There are just too many side issues involved that have nothing to do with Kavanaugh’s credentials, and everything to do with the Senate’s displeasure for Trump to think this will go through without a hiccup.
A Kavanaugh defeat has the potential to be a market moving event. As 4-4 Supreme Court is less likely to overturn a lower court ruling on a Special Counsel, subpoena, indictment, or for that matter an impeachment.
We have seen what the market does when new comes out that is very negative to the President’s position in office.
This could well be the same type of news.
Also, Canada negotiations begin anew this week. I cannot imagine Canada will not work out a trade deal with the U.S. But Trudeau is a different animal than most leaders. In addition, he has nothing to lose at this point since his polling is in the toilet.
A deal will be very positive for this stock market, a no deal negative, but most likely not that much.
We have another CEO that has joined the SJW ranks this weekend. NIKE added Colin Kaepernick to be the front person in their new ad campaign.
This in my judgment does not bode well for NIKE stock. No matter what you think of Kaepernick, he is a polarizing figure. Someone, that any CEO would be wise to not put front and center representing their company. Today’s political and social divide is so extreme there will be a backlash.
NIKE stock is off almost 3% this morning. I suspect it goes much lower from here. Look at Dick’s Sporting Goods. Their anti-firearm position has brought their company down from a leader in sporting goods to a company that is now in trouble.
On the international front, N. Korea is at a stalemate on the nuclear deal, the U.S. is sailing warships in the S. China Seas, Russia is on the move in Syria as is Iran. Warnings are coming out quickly from the U.S. to both Russia and Iran that are being ignored.
In other words one big clusterf…!
If you can view everything as a 3rd person omniscient, and not get emotionally involved in the insanity around you, things are getting very interesting.
Despite all of the above, the stock market keeps setting record highs. Tax cuts, record corporate profits, record unemployment, wage growth, low-interest rates, and low inflation is just what the Dr. ordered to offset the dismal home and abroad news.
The question everyone is asking. When will the bull market end? Watch the recession odds numbers. for the U.S. economy.
Absent a recession, I doubt this market is going to do anything but go up, The caveat, of course, is the news. But, somehow, with the stock market, there is always the potential for bad news to hit. It just seems now its a bit greater.
Seasonally Sept tends to be weak for the markets, then sometime in October things turn and you get the best months of the year for the stock market.
November, December, and January are the best months. They have been for some time.
A lot to mull over for a Monday morning:) If you are a short-term trader these are just things to consider, but not to dwell on.
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
https://rickjshandicappingpicks.com/investing
Skype: Ricca
