What caused monday’s stock market plunge? Facebook revelations or political dysfunction heating up?

Markets after Monday’s stock market plunge are gaping up a bit this morning. Of note Oil and financials on the plus side while TLT and Metals weak.

A neutral to slightly higher bias as I see it.

We have Fed day tomorrow. Typically big moves down prior to Fed day are good areas for a short-term swing trade.

On Monday I made 2-day trades. One in SSO that was intended as a swing but the market rebound off the lows made the EOD trigger no longer valid. I was frontrunning the signal and was rewarded with a 1% gain in several hours.

The other was in a stock I have been following. It’s a low price very speculative stock that I have been trading in and out of.  The stock is AMTX and is a low priced equity with very high volatility. I had a 10c gain in my day trade. Although this morning premarket, it is up 6.5%!  That’s the way this stock moves every day. If the stock gets back around the 2.20 or 2.10 area I will be looking for another trade.

We are almost at the point where one needs to consider mean reversion trades. As I said the bounce of the lows changed my view a bit, but another dip down from here will surely get me started.

Beware, however, we have the Fed tomorrow and the spending bill Friday. Both can be market moving events The Fed most likely will continue its tightening mode regardless of the political drama unfolding in the U.S.  This drama has the potential to derail the entire U.S. economy if things turn south.

In addition, we are back to government shutdown threats. The spending bill is one of the biggest in history and the Freedom Caucus want none of it. So how this plays out remains to be seen. I expect last min histrionics will again be played out this week. But, the game of chicken is a monthly occurrence now.

Finally, the end game of the political drama we are seeing unfold before our eyes in the U.S. is quickly reaching the endgame for both sides. Will it be impeachment and removal or will it be imprisonment for the plotters?

That’s the extremes and the fact McCabe has been fired as a result of an FBI internal investigation seems to make the 2nd possibility more likely. I expect indictments will be handed down soon against McCabe.

In addition to this drama, we have a new one unfolding. Although not new in the actions of the participants. Turns out revelations have shown that the new pay for play is for foreign countries to give money to the children of the politicians. The examples I have seen involve, Biden, Carrey, and McConnell all with billions of dollars to their children from China. This had the potential to be a big one as it unfolds.

I received quite a few emails from my Sunday post that explained where to go to get a balanced picture of the reality of the political landscape these days. The responses were all over the board from adding a few good sites to outright ridicule that I panned Morning Joe and Maddow:)

Let me say that we are watching history unfold before our eyes. Democracy requires a peaceful transition of power regardless who wins. What we are getting now is far from what you would expect from a developed democracy that is supposed to be a model for the world.

You will not find a better political drama on any movie or Cable TV series. What you are seeing now is real-time, dynamic, with plot changes occurring sometimes hourly. In addition, most of what you are seeing is not random. Both sides have carefully planned out strategies of which the stakes could not be any higher for both.

So you owe it to yourself to not be drawn in by the hysteria generated by many commentators for sake of a political ideology or ratings. it is essential if you’re really wanting to sit back and enjoy watching the drama unfold that you find reliable people to listen to on the issues and the facts.Without that, you are really missing out on this historical drama.

In addition, if you’re a swing trader you really have to have a perspective on reality. If you’re in a dream world from watching the hysteria generated on TV then your not going to be able to make intelligent investing decisions.

That’s my 2 cents on the subject. I listed 4 people I thought would give you a well-balanced view of reality. 3 of the 4 are Democrats with the other being a Republican. 2 are moderate Democrats. 1 is a liberal Democrat while the other is a conservative Republican. All 4 have a very high degree of honesty and integrity.

Put them on your reading list and you will be more in tune with what is actually going on along with what the issues really are.

If I make any day trades today I will post them.

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


Skype: riccja

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