30 min before the open and the stock market is going to gap up about 1/4 %. That’s good for me as I am still long a number of stocks.
But do not get excited. The only thing right now the market has going for it is that the sentiment is sour. The uncertainty surrounding the next 3 weeks is high. We have the UK referendum , the fed meeting, and a variety of other events will make trading difficult especially if you’re on the wrong side of things.
But if you’re disciplined in your techniques, position sizing and in trade risk management you have little to worry about. If your not then you do not have a chance. Instead of slim and none its more likely none and none at all!
Today I will be very selective on my trades and may not take any unless something really looks good.
One thing that happened last week was the surprise in the jobs report on Friday. This was a game changer as it was dismal and so far below expectations that a rate hike in June would be a big surprise. Although already we have had fed governors saying no backing off of rate hikes. Incredible.
The bit event to watch the stock market for today is Yellen speaking between 9:30 and 10:00. I suspect everyone will be listening and we will get quite a bit of volatility. Which way it washes out will most likely depend on what she says. If she is hawkish on hikes expect the market to break big to the downside. If she gets dovish that most likely will propel the market higher today at least.
It usually would be a safe bet that she will be dovish but with this fed, I do not think you can bet a lot of money on it in the stock market. The bigger risk to me is the downside as expectations are dovish.
Should be interesting for the stock market to say the least. The best news setups are the ones that you know the outcome but the markets get nervous anyway. The debt ceiling debacles were a good example. There was no doubt the debt ceiling was going to be raised yet the market tanked every time and then rallied every time it was raised. Small risk big rewards. I keep searching for those all the time.
The UK exit is the closest to that right now however the odds have gotten a bit closer at around 3 to 1. I have not looked the last few days so might be different this morning. If the jump to 10 to 1 then you could consider stepping up with a low-risk play. These are good usually for quick pops but do not overstay your welcome!
If you wish to follow my trades just follow @rickjswings. Its my private twitter feed and its free for now and most likely for awhile.
Good Luck Today
RickJ’s Handicapping Picks