Starting the week the Stock Market is off slightly, recovering from a deep drop after hours.
Financials and Metals are strong. TLT about unchanged.
To me, this is a slightly positive premarket bias.
The big question is was Friday’s rally at the bottom. You can get 100s of different opinions on that one. But if you trade price you would not be too concerned.
The only certainty in the stock market is that predicting bottoms and tops is about as tough as it gets.
That is why when trading mean reversion trades there is an expectation you are not going to catch it perfectly. Typically, you will be under water at first on most trades.
That is the complete opposite of momentum trading where either it works right away or it does not.
I have several mean reversion trades on at this point. LOW and SSO. Both are slightly underwater right now. Today is day 3 on these trades.
The news has not changed except for the new hysteria talking point. Seems like a Washington Post reporter was murdered in Saudi Arabia. It not take long for the spin to get started.
The media, Democrats, Rhinos, Turkey have all coordinated to spin the idea that The Saudi’ are responsible and need to be punished severely.
Its as if by magic the same spin came out all at once. 24/7 now criticizing Trump for bowing to the Saudi’. 24/7 that there is no way that the U.S. should go forward with its arms deal.
I just started reading Tucker Carleson’s new book “Ship of Fools”. This is a perfect example.
My prediction is that this entire incident was a false flag. A lot of people have a vested interest in making sure the Saudi’ do not get those arms. Most have close ties with Iran.
The one thing I have learned over the last few years is that when the media and the Democrats are spinning something the truth is found on the opposite side of what they are spinning.
Not to say the Republican’s are much better but with Trump in office, all the spinning has been in overdrive on the Democrat and media side.
The end result of all of this will most likely be that in a few weeks the truth will come out. That nothing sinister happened. And that those responsible were not part of the new Saudi Government.
You have to remember the Saudi’ and Israel have the best intelligence in the world. There is no way they will sit back and let the pro-Iran people destroy the progress that has been made between Trump and the Saudi’
So let’s see how it plays out. Should be interesting. And also has the potential to affect the stock market. As if the Anti-Saudi group wins this it will have very severe implications going forward.
We also have the midterms rapidly approaching. Not much has changed with the general view that the Republicans keep the Senate and the Democrats get the House back.
My view is that the House is close to a toss-up. The odds are about 2 to 1 now, and I would take the 2 to 1 all day:)
For business news, Sears has gone bankrupt. Amazing how these old established retailers are biting the dust. Remember when there was a Blockbuster on every corner:)
We are still oversold and I expect more upside and then a pullback. The key will be to see how big the pullback is and if it tests the lows.
If we get some good news soon, you might see a V-shaped recovery. But right now I am at a loss to see where that news is going to come from.
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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