It is all about the President this morning for the Stock Market. With the Manfort verdict and the Cohen plea, the stock market is worried.
As soon as the Cohen plea came out the stock market dropped about 120 pts in about 3 min. It stayed there for a while and now we find our selves with the stock market off about 1/4% premarket.
TLT, Oil, and Metals are positive. Financials and the Dollar negative.
To me, that is a neutral premarket bias. Primarily its Oil that is keeping the Premarket in Neutral territory up over 1.5%.
I mentioned yesterday that bad news about the U.S. Presidency would send the stock market into a tailspin. We got a taste of this after the Cohen plea.
Now, you’re going to hear spin 24/7 from our learned politicians and our Media. My suggestion is to turn it off or risk mental instability:)
There are several people to listen too regarding the implications of this and it does not include politicians and the Media.
I have mentioned what I consider reliable analysis in previous posts and would be glad to share them again. If you are interested just sent me an email and I will share the list again.
As a general rule however what you hear from the politicians and the media will be spin as opposed to facts at this point.
Absent any new news I would not be surprised to see the stock market put in another rally today.
I suggested an exit on NFLX midday yesterday and it would have given anyone that took the mean reversion trade a 9% gain in a little over one day.
We are overbought at this point in the short term but the markets can stay overbought for a long time. Just something to keep in mind when your swing trading. Ideally, you want to see the stock market oversold for mean reversion trading. For momentum trading, overbought markets are ideal markets.
The only comment I want to make about the political turmoil from yesterday is that the actions of Lannie Davis seem very strange to me.
As Cohen’s attorney, it’s his job to do what is best for his client.
Cohen pled guilty to on charge that arguably was not a crime and Cohen is also out in the media making political statements.
If things go south for his client his machinations will not help his client one bit. In addition, he came out and said his client would not accept a pardon from the President.
Now, what Attorney would preclude his client from being absolved from all charges? Not that a pardon was coming, but being an Attorney for 30+ years I cannot imagine a defense attorney making that statement.
I always said when I retired from the law that the greatest benefit from not practicing was that I would not have to be around Attorneys:)
I would not be surprised if Davis sometime in the future might be facing disbarment proceedings.
But these types of stories show you the dysfunctional political environment the U.S. is in right now. Until it subsides(if it does), you will be getting these volatile markets. In some cases, you will be looking at extreme volatility.
Of course, the upside to all of this is that you are watching “House of Cards” play itself out every day in real time. Very entertaining as long as you do not get caught up in the insanity. If you watching this as an Omniscient 3rd person you are being entertained every day.
Add a handicapping element into the mix and you will not find better entertainment:)
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