Shockingly the market didn’t sell-off the bull flag in the afternoon and maintained the breakout instead
That afternoon sell-off has been strong of late, but the bull flag held strong on the charts and the breakout is still in play. Should you be short right now? Not according to the charts. Yes, there is plenty of headline risk out there, and North Korea is firing some missiles today, but the market seems unfazed. But you have a meeting at the White House with the entire Senate tomorrow, and bank on whatever is talked about being leaked to the media.
You simply cannot get 100 senators together and expect them all to remain tight-lipped. That is an odd event, because I can’t recall that happening in recent history summoning the entire Senate to the White House. I don’t necessarily think that means we will go to war with them Thursday morning, but I think things are getting much more serious at this point with North Korea and that a strike is much more likely to happen now.
But this week is about tax cuts and avoiding the government shutdown. The shut won’t happen though. Democrats don’t want to employ a practice commonly associated with Republicans and the Republicans can avoid it simply by passing a continuing resolution to fund the government. The key is whether Trump can get through his tax cuts pushed through and for the industrial sector, the wall being included will be important too.
So that is the scoop. I focused more on the head line risk and less on the technicals today, but before I wrap this up, let me just throw in there that the Nasdaq hit new all time highs yesterday. So keep your trading focus primarily on tech until the market gives you a reason otherwise.
S&P 500 Chart
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