Monday morning and that means a new week for the Stock Market. But where do we go from here? The market broke all-time highs last week as every financial network acted like they were calling a horse race!
That is what financial news has come down to:)
One thing to keep in mind is we are in a seasonally bullish bias.That means a tail wind. In addition, my SPX QQQ model has turned bullish
Typically when this model signals a bullish trigger it adds to the tailwind or reduces the headwind in the markets. Just something to keep in the back of your mind.
I am long and looking to get longer on any pullbacks. Breakout trades will most likely be day trades only until we get some kind of pullback.
Looking over the pre-market landscape there are some big moves going on this morning. Dm is off 3%!!! While IBB, TLT, and GLD are plus almost 1%.
It looks like today will have some volatility with numbers like that before the open.
On the U.S. political front, Congress will be taking up the new administration’s appointments.
You would think since the Republican’s set a record in 2008 approving Obama’s appointments on the theory that the president, for the most part, should be able to choose his own cabinet, that they would get reciprocity from the Democrats.
That certainly would be a logical way to think. But in Washington logic is not the norm. Partisanship, backstabbing, bitterness and just plain stupidity reigns. Perhaps that is why Congress’ approval rating is close to 10%.
So I expect anything during these hearings. I do not expect clear sailing. What these hearings bring to mind as to what they might turn into is the Bork hearings for Supreme Court Justices. I have never before seen two people, Biden and Kennedy, stoop to such low conduct during hearings on Supreme Court Nominees. They even have a name for that now in DC. It’s called “Borking” a nominee. I suspect we will get that during these hearings.
However, thanks to the genius of Harry Reid, this might all be avoided as Reid invoked the “nuclear option” to get Obama’s appointees through with only a 51% vote rather than 60% when filibustered.
If the republicans get off their high horse and forget about being gentlemen in a bloodsport like politics, they will invoke what is now called the “Reid” rule and get the process through without a hitch.
Will it be as easy as that? Most likely not. You have McCain, Graham, and Rubio who I suspect will be undermining Trump every chance they get. But, you have 8 to 10 Democrats that are moderate and up for reelection in 2018 in states that Trump won. So it would be political suicide for these individuals to go contrary to Trump’s picks.
As Trump said after Clinton conceded. This politics is a complicated business:)
Now, I know this was long winded but it’s the backdrop of what to expect the next two weeks. A circus with political backstabbing at its peak.
It should be entertaining and also if we get to the point where the republicans decide not to invoke the Reid rule all mayhem will take place and the markets will not like it one bit.
So that is the first thing to watch for during these hearings. I would get very cautious if it becomes the Republicans position that they will allow filibusters on these nominees. Our country will come to a standstill if that happens.
My prediction, however, is even the Republican’s are not that stupid to not take advantage of the “Reid” rule gift. We will see:)
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
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