It’s looking like another gap higher this morning in the stock market of about .25% 40 min before the open.
A number of overbought oversold variables I look at are now at the extremes for overbought. A caveat, however, is that markets can stay overbought at extreme levels for a long time. If you’re fading them they can most likely stay overbought long enough to bust you before they turn around!
My approach to this market is to play the long side but to not do so aggressively. There are opportunities to the long side but considering how overbought we are most of what I will be doing is day trading breakouts.
I still have my GLD position and that is one I will stay in as long as my method does not flash a sell signal. So far no sell signal is in sight.
As far as geopolitical risk Turkey has calmed down a bit but I think that is only temporary. Top on the list now is Russia. The build up of troops on their western border near Ukraine could explode anytime. If it does expect gold to skyrocket and the stock market to take a quick nose dive.
At home, we have the Milwaukee riots now. So far the markets have completely ignored the rioting in major cities. However, the loss of Capital from these cities and the eventual decline of tourism here in the U.S. will take its toll.
What is remarkable to me is despite all the geopolitical turmoil and political discord at home the markets just keep going up.
I guess there are some things that are just beyond comprehension. But with the markets you need to remember that price movement is king. It is what it is despite what you think it should be:)
If you wish to follow my trades and comments you can go to @rickjswings. It’s my private twitter feed. I post some of my trades along with several comments shortly after the open and occasionally throughout the day.
Good Luck Today
RickJ’s Handicapping Picks