On Sunday, 2/5/17, the Atlanta Falcons will face the New England Patriots in Super Bowl 51. I think it will be easier to pick who is going to win the big game, than to pick the direction that the market will go in the short term. The difference is; we will know the winner of the Super Bowl late in the day Sunday. It may be weeks or months before we know what the broad market is going to do.
Traders and investors seem to be more focused on the White House than they are on earnings. Despite the flurry of executive actions and the ensuing headlines, very little of lasting substance has been implemented in a way that has lasting impact on business. Implementing policies, getting legislation passed and seeing their impact doesn’t happen on an hourly or daily basis. So, we are seeing a real mixture of market reactions, which is dominated primarily by uncertainty. Expect this to continue for at least the near term.
That doesn’t mean there aren’t good trades available. There are individual companies and sectors that have real clarity and very clear trends in place. In the video version of this update, I highlight a couple of charts (that we are trading) that demonstrate this point. Be sure to watch.
Gold continues to show the beginnings of what could be a really nice uptrend. We’ve been talking about this for a few weeks now and it just gets clearer and clearer. Of course, there are no guarantees, but the technical evidence for a continued uptrend in Gold is really strong and we are taking trades accordingly.
Oil showed some minor signs of life last week, but still has yet to breakout to the upside in a way that would signal a bigger rally. ~$56.27 remains a key level that we would like to see price break through with some momentum. If it does that, then look out! Meanwhile, we wait.
That’s it for this week. If you like football, I hope you enjoy the game and that your team wins (as long as your team is from Atlanta…)
Take care, trade safe. Use risk control and keep your winners big and your losers small.
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