It’s that time of year for the markets and except for seasonal weakness historically early this week it’s the wind at the back of the markets through year end.
I am long and looking to get longer this week. In addition breakout, trades will be taken through year end.
The market is off slightly an hour before the open. Both qqq and spy are off the same amount. It would not be unusual to expect a 1 to 3-day pullback here especially with the historical weakness the first few days of this week.
On the Geopolitical front, things are still simmering but nothing I can see to cause immediate concern right now. However, Turkey’s threats to flood the euro zone with immigrants, the Philippines moving toward a Russia-China alliance and away from the West, and all the other culprits will flare up from time to time.
At home here in the U.S.,far fetched the most pressing issue that could disrupt the markets I can see is the transition of power. The recount has developed in full speed now in the three states Trump lost that were the closest.
If you think that 1000 point drop was frightening on the night of the election you have not seen anything yet should this transition become in doubt. I do not even want to guess how far the markets will fall if there is real uncertainty what happens come January for the new President to take over.
This is something to really keep a watch on. I know the markets have not even considered a disruption of the transition as any far-fetched possibility considering that the % chances of overturning the count in all 3 states is virtually 0 per Nate Silver , one has to think the strategy is a bit more complex than one that has no chance to succeed.
Again, this has the potential to disrupt the markets substantially if any uncertainty starts spreading. You do not want to be caught on the wrong side of this one.
It would be nice not having to consider all the external “noise” in the background of the markets but unfortunately the trading environment in one way or another has a correllation. Sometimes positive and sometime negative. An interesting topic for another day:)
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. 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
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