Markets gapped down Monday (on fears over the Iran mess), but the bulls would have none of it. An all-day rally left all the major indices printing very strong Marubozu (shaved head) candles, closing on the highs. While the SPY, DIA, and QQQ did not print new all-time highs, we are back within spitting distance of those marks. Markets are also still not over-bought again (at least by the T2122 metric, which rose, but remains below 80). Oil prices also stabilized, dipping after the true risk of Persian Gulf conflict was reweighed.
A US Marine Brigadier General (William Seely) sent a letter to the Iraqi Ministry of Defense implying that the US would be removing troops from Iraq, starting with the Green Zone. However, after-hours the US Department of Defense said the letter was a mistake and denied that US troops will be leaving, but are instead just repositioning. In the meantime, the US deployed the 82nd Airborne Division (about 3,500 men) and a 2,200 man Marine Rapid-Reaction Group back to the region and President Trump said we were not leaving unless Iraq pays us for building an airbase. Finally, the Pentagon rejected President Trump's list of threatened 52 Iranian targets as many of them are illegal targets under International law (cultural and religious sites).
In business news, American Airlines (AAL) reached an agreement with Boeing (BA) over the compensation BA will pay over the grounding of the 737Max. Finally, Pier 1 Imports (PIR) reported it will close 450 stores (nearly half of their current stores).
Tuesday’s major economic news includes Import/Exports (8:30 am), and Nov. Factory Orders and Nov. Non-Mfg. PMI (both at 10 am). There are no earnings reports Tuesday.
Overnight, Asian markets were mixed but mostly green. In Europe, markets are green across the board at this point. As of 7:45 am, U.S. futures are sitting on either side of flat as the world seems to have now moved past the latest Persian Gulf crisis for the moment. Even oil is down about a percent at this point.
The bulls great showing Monday tells us who is in-charge of markets. While anything can happen short-term, as we've said before, it's hard to bet against the bulls in the longer-term. As always, keep planning your trades, trading your plans and keep taking profits along the way. Remember it is consistent singles and doubles that win the game...not occasional home runs. However, it may be time to reconsider any short or hedge positions put on due to the US-Iran situation.
Swing Trade Ideas for your consideration and watchlist: PTCT, CHGG, BLUE, VG, EXAS, TDOC, GGAL, WORK, GPS, M, ATVI, GRUB Trade smart, take profits along the way and trade your plan. Also, don't forget to check for upcoming earnings. The stocks/etfs we mention and talk about are not recommendations to buy or sell.
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