The following is from today’s mid day premium update from All About Trends. Subscribers receive daily commentary and a weekend wrap-up. Experience our accurate market analysis, trading methodology, and stock selection to raise your equity curve for only $20 for the first two months. If you want to wait and see and give our free newsletter a try to see what we’re all about and grab a free report here.
In our weekend newsletter we laid out a game plan based upon deal or no deal. That game plan remains in effect with a twist and the twist is IF some sort of deal is reached during market hours we could see a "Don't Blink" moment, you'll know it when you see it.
Late last week we said:
On a deal
1. You will be paying up. Think of times in the past where ABC stock is up 3 points and you don't buy it only to see by the end of the day it's up 6. We've seen those days in the past quite a bit. Of course this assumes it's not a pop and drop to which nobody knows at the moment in time one pulls the trigger on a trade or two.
2. You had better be quick to pull the trigger on something if anything. Think Gap And Go let's party! And that's about all we see out of a deal is a let's party sigh of relief, don't forget that once the party is over then comes the hangover. It would just be a relief rally when all is said and done in our opinion but we'll see and as usual take it one step at a time. A relief rally could last 5 minutes or it could last a few weeks. Right now a lot of names are pulling back Off Highs (POH) in an orderly manner. That IS the technical backdrop here.
IF no deal is reached? We could have a reaction sell off (face of fear folks). To that we have laid out a lot of in the face of fear support levels in the charts, most are prior supports, blue lines and moving averages all pretty standard fair around here that we talk about every day. We are stacked in cash and in a very good position no matter what occurs.
It's still holiday trade and ought to be through January 4 so keep that in mind.
12-31 Notice how each index above is at or near the 50% Fibonacci retracement zone? Notice how each index is oversold stohcastically speaking? These are positives to be aware of. On top of that the follow the leaders section just below shows strength too, another positive. So you see? IF in our opinion it wasn't for a news driven event that is bent on bickering via checks and balances the market is ripe for a bounce TECHNICALLY SPEAKING. Heck we'd be nibbling on all of the names in the long side watch list if it wasn't for the news driven hurry up and wait for a deal or no deal. ULTIMATELY there will be a deal, has to be.
As far as falling off the cliff? Look folks, it's an opportunity if it happens to be able to jump in and take a few long trades in the face of fear. Speaking of fear you can not turn on a TV anywhere and not hear this doom and that gloom. It's sooooooo rampant it's getting a bit tiring. It's an event that will get taken care of, it's just a matter of when and how and how much.
Never mind the doom and gloom as odds would favor that when a deal is finally done it takes impending tax hikes back down to year end levels, think RETROACTIVE if it doesn't get done today.