Markets are unchanged an hour before the open. In addition, there is nothing to note in pre-market trading.
So an uneventful premarket.
I sold my SPY mean reversion trade for a small gain. The exit parameters were met at the close yesterday.
In addition, I sold a swing trade that I was hoping to turn into a medium term swing in REN. The stock bounced 2% after I bought it but came back below my purchase price by the close so I exited.
These swings that move and then pull back, usually are good candidates to exit and move on to another swing trade. Good swing trades once they break out do not pull back right away.
On the Political front, we are reaching the well-known debt ceiling crisis again. Why they have a debt ceiling is beyond me. All it does is create the opportunity for crisis as opposed to anything constructive.
But that is Congress creating a crisis where none needs to be created. In any event, we are looking at the Democrat position of no approval of the budget unless the border wall is removed. It seems to be a take it or leave it.
My take on this is that unless the Republican’s concede on this the government is going to shut down this time. The Democrats have already crashed and burned. They have nothing to lose now. They have leaders now that are promoting resistance at all costs.
So then why would they agree on anything? And just coincidently they are not agreeing on anything. It is just getting worse.
The big question is whether the Republicans will cave and agree to this and give them a win. My guess is they will cave because that is what Republicans do. They do not fight by the same rules as the Democrats.After all, they are Gentlemen to the end, regardless of the cost.
So what we will most likely get is last min hysterics as always with a cave at the last second with a removal of the border wall.
This, of course, creates a great trading opportunity to buy a day or so before the debt ceiling deadline and take your money when they pass the budget. The only problem with this is that the cave is not as certain as it was on prior occasions. Where we were dealing with something that was almost 100%, the environment now is such that I would put the odds at 60% of a cave.
I am not sure I am going to play this trade this time. I want to see what clues I can get out of this mess. We will see:)
Today I might try a several BO trades but I will put a tight leash on these until I see how the debt ceiling issues play out.
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
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