The market is in free fall this morning and at this pace ,it is looking like close to a 1% gap down on the open.
Who wouldn’t be nervous when you look at the news every day. The U.S. is in complete turmoil as a result of the destructive presidential campaigns on both sides . Russia and Iran are beating the war drums. The Mideast is in flames with death and destruction daily.
All our politics now are consumed with is not issues but personal destruction. Forget the issues. It’s gotten to the point on some networks now that issues are not even discussed. Only personal destruction . I am afraid this is all going to catch up with the markets.
And of course, you have the fed talking about raising rates. What planet are these guys on? They should be trying to figure out how to avoid the biggest recession in the history of the World when the house of cards starts falling down.
If you think the election is going to suddenly make all this disappear I think not. If anything the U.S. is becoming even more polarized if that is possible. The warfare you’re seeing in the press is just the tip of the iceberg of what you will see after the election. Regardless of who wins you will most likely see a DOJ that will go after opponents obsessively. That is not good for the U.S.
As far as fault, both parties have contributed substantially to the mess the U.S. is in. I see no leadership in either party at the moment that is going to change this.
So where does that bring us in the markets? The risk now is not of losing out on a rally. The risk now is a black swan event that sends the market in freefall. It does not have to be a logical event as I have discussed before however there are plenty logical events that could trigger this free fall.
Some words of advice, if the rhetoric and what you see daily in the U.S. now is getting to you, it is just like gambling. It’s time to step back and turn off the news. Take a break. Its just going to get worse. I suspect we are going to see things happen in the next 30 days that one never thought possible in our pillar of democracy. It seems ironic that this could all occur under the “hope and change” candidates watch!
I am an independent and what you are seeing from both parties now is the exact reason. Truth and the welfare of the U.S. is a side issue. Deception, manipulation are the strategies of the day.
Another way to look at this is if you are my age, which most of you probably are not. The last 70 years have been pretty boring after world war 2 compared to the turmoil seen since the beginning of time. So history is being made right now and you are here to witness it first hand.
Make no mistake about it, this is going to affect the stock market sooner or later. It is not the time to have a substantial portion of your assets in the market in my opinion unless it is well balanced. There are plenty of sites and books that discuss how to balance a portfolio for safety. If you have an interest just email me and I would be happy to send you some of them.
The above are my observations and I in no way intend to promote either party or candidate by my statements. They are observations that are meant to get you as a trader to understand that trading should never be in isolation to the events around you. Many traders take a look at charts and that is it. But the backdrop of what is going on should always be kept in mind and paid attention to.
For today I will be looking at the first 15 min of trading and decide if the environment is right for breakout trades. Presently the only position I have is my first 1/4 position long SPY.
Good luck today
RickJ’s Handicapping Picks