What will trigger the market to break from this consolidation? Higher or lower? My Thoughts

The stock market after a runup off the the latest freefall, has been a strong one. Much strong than one would expect if the market was going to roll over and head south anytime soon.

However, you can not discount that until we break out from this short consolidation to the upside. So far the market has taken a breather from its run, and where it goes from here should give a good indication of whether this December november swoon was serious.

On a positive note, I expected the market to roll over when Powell gave his speech last week and indicated that he had not changed course on rate hikes. He softened up a little but still had no indication of changing direction.

This would have been the key time, when the markets could have resumed their downward spiral. But, they stayed solid. Oftentimes its clues like this that give you an indication where the market is heading next. The best clue is how the market reacts to negative news. And we got that clue last week.

So my guess is sometime this week or next we break out to the upside.

For how long that remains to be seen. We still have the Mueller wildcard, the govt shutdown, an impeachment bill brought on day 1 with the house, and the Dems partying in Puerto Rico while Trump is in the White House working on the people’s business.

So there is plenty that could trigger this market to the downside. Hearings will be getting underway in earnest in the House to continue onward with the attempted take down of this President. It will be an onslaught with the media spinning it in the most negative way possible 24/7.

So, be prepared for more volitility once this gets underway. As far as the Mueller report, I am going to share my thoughts on that in the political-odds section when I discuss the 50/50 odds of impeachment wager. There are a lot of variables to consider, an interesting wager to say the least.

But, if things go sideways, after the report, you do not want to be on the wrong side of this market, at least for a week or two.

I am still long TLT and FXE. Those are my most recent trades that remain that I have not taken a profit in. TLT is not only a trade but a hedge, FXE broke out but has now settled back. If it does not get moving I will be out by the end of the week.

Once we give this consolidation a bit more time, I plan on adding a few long swing trades. But that is a few days away.

As I type this the markets are up about 1/5 with QQQ leading the way at .4%. TLT is off slightly,Oil and Metals are positive and the US dollar is strong.

That to me is a slightly positive bias this morning. If the dollar was weak, and TLT strong it would set the stage for a nice bounce. That is the pre-market reading you want to see. But things can change on a dime. But I see more consolidation ahead today.

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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