Will the stock market rally continue? Or will politics get in the way again?

The stock market has had quite a run from the lows retracing to the 62% mark. This morning we are gaping up again about 1/4%.
 
Of note, most everything green except TLT. This to me is a positive premarket bias.
 
We are at an inflection point for this move. The 62% mark is significant resistance and it would not surprise me if we consolidate here for a while.
 
In addition, as I explained the other day we are reaching a confluence of events that make the odds of a drop in the markets higher than usual.
 
The IG report will be coming out in May. Most likely early May. The special counsel has hinted that his report will be finalized around the same time.
 
In addition, Goudy has indicated he would like Horowitz to appear before his committee on May 8th. Whether this is to review his findings post report or pre-report remains to be seen.
 
It would be very unusual to have the OIG head to appear before his report has been submitted. So unusual you would have to be a bit concerned about what Congress is up to.
 
So most likely they know the report will be out before then.
 
Its still a bit unusual, but you should be watching to see how this develops.
 
In addition, the fallout from the Cohen raid is just getting started. So far there have only been a few leaks. But I suspect that as we get closer to the IG report the leaks will start flowing. Some true and some false.
 
As I have said, the stake is very high and both sides have reached the point of no return. The line has been crossed and there is no undoing what has been done. There will be severe consequences. The only thing that remains to be seen is what they will be and to whom.
 
People at this point are desperate. And when you have desperate people there usually is nothing that is off bounds. Several years ago it would of been unthinkable that a U.S. presidents private attorney would be raided. But in this political environment, nothing is off limits.
 
If this battle gets more out of hand the markets will most likely take a dive. Depending on what develops.
 
My guess is that the markets get a scare very soon. And we have all seen what happens when the markets get scared. It would not surprise me before this is all over to see a retest of the previous lows.
 
It looks to me like this would be a good time to put on a hedge. Sometime this morning looks like a good time. I am going to look over the right vehicle and start out with a 1/2 hedge. The idea will be to keep the hedge on until after the IG report. Then reevaluate.
 
At least that is what I am thinking right now.
 
There is a positive aspect to the news cycle. It looks to me that within the next week or two N Korea and S Korea are going to end the Korean war officially.
 
Also, it’s becoming likely that there will be a nuclear disarmament agree with N. Korea soon with a return of the Americans N. Korea is holding hostage now.
 
This is a big positive for the markets. Combine this with the likelihood of a trade deal with China it’s very positive.
 
As always nothing is a no-brainer:) But I am betting on one more scare from the politicians that will hit this market.

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

https://rickjshandicappingpicks.com/investing

Skype: riccja

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