The stock market is up slightly 45 min before the open with QQQ leading the way.
Of note, Metals are down, the dollar is up with everything else hovering around even.
We are long IBB and UUP, So far they are looking fine. IBB is a short-term swing which I expect will exit soon. UUP is a bottom reversal trade and those can be very long-term if they work out.
We also have QQQ that I place yesterday A.M. with a 1/4 position. I was a bit early but that happens all the time.
Today we get a glimpse of whether establishment Republicans are in trouble. Its Strange vs Moore in the Alabama special election.
The odds have ballooned up to 10 to 1 in favor of Moore. If this holds it will be a precipitous sign for the establishment Republicans.
Logically, they would out of self-preservation start backing Trump’s pro-growth agenda. Health Care is dead, however, they can still pull it together with Tax Cuts, infrastructure, and the wall.
Now that is logical. Humans, for the most part, have never been prone to logical thinking. Right now in DC, it is money and power.
Clinton found out that money and power sometimes do not work. I have a feeling the establishment Republicans are going to get the same lesson.
What that means is tax cuts is not a sure thing, the wall, and infrastructure uncertain also.
It also means that the investigations of the White House will continue unabated by both the House and Senate. As Feinstein said, these investigations will likely continue for another year or two.
It has come done to a do or die situation for the establishment.
At least that is the way they see it. Even if they remove Trump it will only solidify the movement that got Trump into office. If he stays and they do not bend they will be gone.
Which for the markets means more chaos and turmoil.
Then as a bonus, there is the special counsel. Who knows how long that will take and what surprises he will have for the Stock Market. If he comes out with charges against Trump, expect the market to tank by 1,000 points in a very short time. Minutes, not days.
Now, that will most likely be a buying opportunity in the stock market as I suspect the White House has prepared for that contingency.
Putting this all together volatility should increase. It has been very tame for a long time. I expect this to change anytime.
If you have a balanced portfolio, you will survive. If not, you risk some serious reduction of capital. By diverse, I mean bonds, metals in addition to stocks.
Watch Alabama today. That will really signal what is coming in the primaries.
If we happen to get a down day today I will be adding to QQQ or perhaps buy some SPY before the close.
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
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