What is the stock market waiting for? Could it be Congress, If so do not hold your breath!

The stock market is slightly down 30 min before the open.

Of note, almost everything is hovering around the 0 line! Does not happen very often.

The markets are in a wait and see mode looking for clues from Congress on tax reform. The problem I see is the only clues are that Congress, especially the Senate, is giving clues that indicate that there is very little chance of tax reform by year-end.

Some Republicans are blaming this on Corker and Trump spate, but although it’s a convenient argument, it belies the fact that Congress cannot pass anything Trump-related.

The Dems are sticking together for the most part and for the Republicans its everyone for themselves. So needing 50 votes when they have 52 seats assures defeat. Just take a look at health care.

Things will change but it will not be until after 2018. The Republican establishment is still in denial as to the beating they are going to take in 2018. The public is angry, and the health care debacle by the Senate is most likely the final straw.

That means without tax reform this year the stock market will be vulnerable. I say that with egg on my face as I have been warning about all these event risks for months now. And the market has gone straight up.

But that is the risk you take predicting the markets. Very similar to handicapping sports when you lay -3 and the team loses by 40:)

A few years ago I missed an NBA total by almost 100 points! A received an email from a long-term follower that he had never seen a miss like that ever in his years of handicapping:)

Back to the markets, the market is a bit oversold right now by way of consolidation rather than any significant pullback. Any positive news from Congress(even a rumor) will propel the market higher.

It used to be in the days of helicopter Ben that you could always count on the fed to loosen things up. Greenspan was also somewhat reliable but to a lesser degree.

But, Yellen, and her group of madmen, it’s tightening, and normalization regardless of how grim the world looks.

My guess she will not be long for the Fed, as her tenure ends in February. If you get another Bernanke type this market could propel much higher.

I am in day trading mode but am accumulating a few positions to hold through next April. I am concentrating on income producing equities and forgoing speculative issues for the most part. I am also looking at some medium income-producing bonds. Not the ETF but the actual bonds themselves.

Yesterday, I put on an SSO trade and held it overnight. It started out as a day trade, but the trend day that looks promising fizzled out. In the very short term, however, I am thinking a rally in the stock market. I am in SSO at 99.30.

I am also in UUP. We are getting some consolidation here after a nice runup. If it turns into a reversal I will exit. Otherwise, I am long dollar hopefully for a long time.

There is a lot of money to be made if you find a bottom reversal. But be prepared to take small losses. As the win rate for these is less than 50%.

I am watching UNG now for a bottom reversal but its aways off from triggering.

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

RickJ’s Handicapping Picks

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