What implications does the change in direction of the Kavanaugh confirmation have for the stock market. My thoughts

A new week for the Stock Market and we are starting it with the markets slightly negative.
TLT is off almost 1/2%, and the U.S. Dollar is off 1/4%.
Most everything else is in the green with oil leading the way positive about 3/4%.
To me this looks like a positive premarket bias. Already SPY and IWM are at break-even:)
I have talked in the past about the odds of Kavanaugh being confirmed and how getting 10 to 1 that he will not has a lot of value.
Well, the odds are almost even money right now. At one point you could have gotten 20 to 1:)
At even money, if I was forced to wager on it I would take the don’t. The momentum of a withdrawal by Kavanaugh or a defeat in the Senate to me is an almost certainty right now. The handwriting is on the wall.
It appears that all the long vomiting inducing Bork hearings of the past could have been avoided by simply finding someone from High School that would say Bork got frisky with them.
How simple. No real defense to it. Accusations are damaging. And with the Republicans that is all you need do. The strategy is in for some time to come now. Next, we will be going back to grade school to find some poor student the person stole a kiss from. Sounds ludicrous? It’s coming. After all, whatever it takes is the motto.
Irrelevant it destroys a man and his family. Collateral damage so to speak.
The other collateral damage at some point is going to be the markets. The U.S. Government has broken down at this point. It’s almost to the point of being non-functioning. The FBI heads have either been fired or forced to resign, DOJ at some point soon will get an overhaul, and the sad thing is, that will only put a dent in the problems the U.S. is facing.
If the polling is even close to accurate, the Democrats will take back the House and then you will see chaos you never dreamed possible with a Republican Senate and Presidency.
Of course, you probably thought that now:) Never underestimate the human race. Things most likely can and will get a lot worse.
This will at some point take its toll on the stock market. The tax cuts and deregulation have saved it up until now. However, with the Fed showing no fear in raising rates, and the White House showing no fear in keeping up the tariff fights, things can change quickly.
Now I do not think the White House has a bad idea on their Tariff plan. The problem is the timing. You can only do so much at one time. And when what you are doing sabotages your other plans, the entire plan might fail.
For instance, to pick a fight with China when they are needed to some degree to finally get the N. Korea denuclearization finalized seems a bit iffy.
To time these tariff fights with arguably the most important midterms in some time just a few months away, in my mind cannot be a good strategy.
The White House, underestimated in my mind, not only the stubbornness of other countries to fall in line but also the degree in which the former administration was going to sabotage them at every turn.
From Kerry making secret visits to Iran and who knows where else, and Obama shadowing Trump’s visits to foreign leaders the threats of a damaging tariff battle get diminished.
Especially when others are promised and asked to wait it out as Trump will either be removed or if not, beaten in the next election.
I could go on and on. I have not even touched upon the problems in the DOJ that may well be Trump’s undoing at some point.
Now we can discuss the technical nature of the markets but that is not quite as interesting as real-life events that are unfolding.
But let’s give it a go. We are prime for a rally. And we may well get one. But my guess is we dip before we rally here. Or at best we muddle around in this area for a while.
One thing to keep in mind down the road is, that if an administration gets in that is pro increasing taxes, and pro-regulation you had best head for the hills in the market. The sooner the better.
There is a lot more to discuss this morning, but there is only so much time. Watch the financials and TLT.
What I do is have a 15 min chart of each to monitor throughout the trading day. Look for reversals. If you get a reversal in both the markets will follow shortly. That applies to both directions.
For example, if you see GS go from positive to negative, while TLT goes negative to positive that is a very strong harbinger of what to expect in the stock market.
Does not happen that often but if you catch it right, you can pick off some profits.

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: Ricca

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