We have had an interesting Stock Market the last week or two. You either have a gap down and lower or a gap up and it does not hold.
The news is pounding this market not because it is all negative, but because of the knee-jerk reaction, in part caused by program trading.
The only way you can trade markets like this is to trade smaller and have larger stops. Otherwise, you do not have a chance.
You will either be whipsawed every day or you will take huge loses.
Just trade 1/2 size with double the usual stop and you should do much better.
It seems thing does not change when it comes to the news. We still have tariffs. But now we have something we have not seen for a while. A government shutdown looms. And this time, I think investors should pay attention to it.
The president is committed at this point to getting 5 million for the wall. Before he was forced to compromise to get the military spending he felt was needed. But now, he is free to concentrate on the funding for the wall.
Combine that with 2020 approaching and I doubt he is going to leave the wall as an unfilled promise.
So that means, if you have been taking the very profitable buy the day before the shutdown deadline trade, it might not work this time around.
I know it is hard to predict something that has work 100% in the past as not working this time, but, just keep that in mind:)
Which causes us a problem. As we are now in the most profitable days historically for the stock market. The next 2.5 weeks has been almost the nuts in trading the long side.
It will be interesting what happens this time around. Shutdown fears vs a very strong historical pattern.
I have taken my advice for a change and have cut my trading size down while increasing my stop loss size. It has worked out fine for me, as I have been holding my own in this market. Not making much money but not getting crunched either.
Looking over the indexes this morning most are up over 1% premarket. Financials are leading the way, with most everything else in the green except TLT and the U.S. dollar.
That is a very strong premarket configuration. I would not be playing a gap fill today:)
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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