A tough market to swing trade especially if you use tight stops!
Interesting premarket this morning with the indexes mostly unchanged however QQQ is down almost 1/2%.
Of note, Financials are in animal mode with BAC + almost 3% and GS +2%. Oil is strong, Metals weak, and TLT weak -1%.
Overall looks like a positive bias per the premarket. The only flag is QQQ.
I have not seen the news this morning but I suspect Congress is loosening the lending rules for banks while also weakening Dodd-Frank.
With the rules the way they are now you have a better chance of getting a refinance with 0 money in the bank and a 650 credit score then 1,000,000 in the bank and an 800 credit score. Sounds logical to me:)
It’s all about liquidity of the mortgage as no one wants to get caught with mortgages they cannot sell. The Fed has made the rules so ridiculous to cause crazy examples like the above to be true.
Or another, if you want an interest only refinance the DTI rules are 50% higher than a conventional with the same term and interest rate despite the fact the payment is over 50% lower and in some instances 75% lower.
Combine the above with the randomness of the appraisal process and you get chaos in the mortgage lending markets for homes priced above $600,000.
You could get 10 appraisals and you would most likely get 10 different values with the top to bottom greater than 200,000!
That is what happens when the government interferes with the markets. You get chaos. So now they are trying to fix what is obviously broken, all to the benefit of the big banks. How that washes out for the consumer remains to be seen.
I got off on a tangent a bit this morning but I thought you might like to hear something financially related rather than how our political landscape might affect the markets.
There are many more areas I could get into, Healthcare being another, but I will save that for another day.
I did a quick swing yesterday and took a small profit.
Today I will be looking for a similar trade, however, the environment is not even close to what it was yesterday morning. But we will see how the morning develops.
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’s Handicapping Picks