The Stock Market is off a bit this morning an hour before the open. But hardly enough to even call it much of a gap down.
Of note, TLT is off almost 1/5th%. Metals and financials are weak. Oil is strong.
To me, this seems like a neutral to neutral + premarket bias. I would not be surprised to see a range day today with little movement as we approach the holiday weekend.
The big news to watch is the Canada trade negotiations. I am a bit more optimistic this morning that something gets agreed on. But remember, these trade deals go through Congress.
You can almost always count on Congress to throw a monkey wrench into the works. But that is 30 to 60 days away.
China is becoming more complicated by the day. With the White House accusing China of undermining the nuclear negotiations with N. Korea and the China economy starting to feel the effect of the trade war, the situation has become volatile.
Unless trade talks get back on track soon, the China U.S situation will get into dangerous territory.
Also, the U.S. NATO allies are not acting so much like allies anymore. The E.U. seems to be siding with Iran as is Turkey.
In addition, the rhetoric out of the E.U. is starting to become a bit hostile to the U.S. This is still in its infancy but without some new leadership out of the E.U., I see it getter worse.
To me, this means on a global scale, that a slowdown is very likely. I do not think you can have countries working against each other without eventually affecting the global economy.
Hopefully, the Fed will consider the above it making its decisions to tighten. Although I am far from an expert, it appears to me that any tightening at this point is worrisome.
Sometimes it good to have an academic at the helm of the Fed and sometimes a pragmatist who sees the big picture. Now is not the time for an Academic.
So while the markets make new highs now every day, I remain in the “keep your eyes open” camp. Trade price but be aware of the many issues out there that can derail this stock market.
We are long GLD. It broke out from a bottom. The jury is still out whether this will be a good trade. So far we have had no follow through on the trade. Our stop is a tight one.
We will have very few mean reversion trades until this market pulls back a bit. But I have been doing a bit of momentum trading that has been better than I have ever imagined it would be.
The problem with momentum trading is it is more labor intensive than a mean reversion trade. It requires a lot more time, and the need to be at your screen during much of the market hours.
So far, I do not mind the extra work. How long that lasts remains to be seen🙂 But, the profits since I have been trading this technique have been astonishing.
I do not share these trades as there is not enough time in the day to watch them and share them. So unless I can figure out a way to share these do not expect them.
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Good Luck Today
RickJ’s Handicapping Picks