Monday morning and an hour before the open markets are gaping down about 1/4% except for IWM which is off 3/4%.
Of note, GS -.55% and TLT +.28%.
I have a pretty light number of trades for me, only 4 and two of them are to the short side. Another is a longer term Trump sector trade.
I have seen some talk this morning about a mean reversion long trade in the indexes. I do not think we are there yet. The markets are still overbought short term. This pullback should have a bit more to go.
On the Political front, things are getting crazier in the U.S. if that could be possible. The stakes have been raised in the fight between the democrats and republicans. In addition, raised between republicans and republican never trumpets.
The rhetoric has now reached a fevered pitch which cannot end well for the losing side. I do not want to get into much detail on here as this is an investing site. But you cannot trade without some idea of the environment you are trading in.
I have said this before, I have never seen in my lifetime politicians on both sides have so little regard for the truth. This can also be said about our much of our media.
The idea of honesty, integrity, fair dealing, compromise for the benefit of the people have all been thrown by the wayside. With only a few exceptions, honesty and fair dealing in our political system are long gone. It is almost a contest as to who can say the biggest lie as if the public was completely ignorant.
The markets so far have not factored in our broken political system. When they do it is not going to be pretty.
People can argue that we have had blowups before in our politics and the markets have gone their merry way. But I sense this is much different. It has the potential to completely disrupt the markets.
I am going to leave it at that with the caveat if you have a large amount of your wealth in the markets right now you should be looking to either lighten up or get some balance to your portfolio. There are many sites that have great techniques for balancing out your portfolio to reduce risk. This area has been studied to the Nth degree.
If anyone wishes to get some sites that discuss this please send me an email.
Now if you’re a short-term swing trader as I am you do not need to be as concerned as your trades are for the most part going to have stopped and also only last 1 to 5 days. But still, it is a good idea still to keep abreast of the political backdrop, especially when the potential for market-shaking news goes up exponentially.
For me today, I will be looking for a trade or two if I get the right setup. Ideally, I would like to see some more pullback before getting aggressive again. Now that I am sure a few stocks I would actually welcome it:)
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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