Short Trading Week

Friday was a low-volume, indecisive, green day across the markets.  Expectations for a low-volume holiday week ahead and the desire to avoid weekend headline risk may well have led to this blah day.  In any case, the SPY, DIA, and QQQ all appeared to be curling up after a three-day pullback.  Likewise, T2122 rose back to mid-range.  So, on a small green day, we started to see broader participation in the rally of the last nearly two months.  

On the Trade War front, over the weekend the two Presidents continued to “talk past each other” as reported by Bloomberg.  However, China did announce guidelines that it will increase penalties for violations of Intellectual Property rights, as part of an effort to “reduce frequent IP violations by 2022.”  However, no details were released nor any mention made of state-sponsored or owned organizations (which are by far the biggest concerns in the IP theft arena).  This was seen as an olive branch toward the Trump Administration who will be able to claim it as a trade war win.

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In Hong Kong, the pro-Democracy Party has won a huge victory in the “District Council” elections on the heaviest voter turnout ever.  Results showed the Pro-Democracy party winning nearly 10 times the number of seats that the Pro-Beijing Party won.  However, this will have no impact on actual governance in Hong Kong, as both the “Legislative Council” and Government Offices (who actually make and enforce laws) are essentially Beijing-controlled.  Nonetheless, this result may send a message to the Mainland and might cause a rethinking of their approach.

There is no major economic news for Monday.  The only earnings report of note before the bell is from JEC.  However, in merger news, Swiss pharmaceutical giant Novartis agreed to buy MDCO.   Meanwhile, overnight, Asian markets were mixed but mostly green.  In Europe, all markets are almost all in the green as well at this point.  As of 7:30 am, U.S. futures are pointing to a small gap higher.

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We have the holiday coming this week and very little scheduled market-moving news.  It is quite possible that we just drift, at least until next week when the initial Black Friday and Cyber Monday sales reports will be available.  If we do get unexpected news this week, be careful, as low volume is likely to magnify the typical market over-reaction.   

So, remember that in the longer-term the market is bullish.  Continue to take profits, move stops, and trade your plan.  Keep in mind that a Trader’s job is to consistently make gains, not to hit home runs every once in a while.

Ed

Swing Trade Ideas for your watchlist and consideration. Long – X, ADT, STT, BAC, DIS, NTAP, CTL, DXC, BIDU, PWR, FEYE. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.

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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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