Morning Market Thoughts

by DAN Good morning. We’re looking at a weaker open, and the reasons are pretty widespread. On the political front, the Comey Reality Show debuts on Thursday, and that’s got everyone on edge. The Brits are holding a general election in a few days, and in light of the recent terrorist attacks, there is a lot of uncertainty about the outcome. The FOMC will be meeting next week, and the European Central Bank (ECB) will be meeting on Thursday to discuss monetary policy in the Eurozone. And President Trump is tweeting about a big meeting today with Republican “leadership” (a word without a definition) concerning tax cuts and healthcare. That’ll always keep people on edge because of the uncertainty about the aftermath of the meeting. More tweets?

This is all the stuff that traders pay attention to because all of these issues have a long-term impact on the market. And “long term”, as I use the term, is an impact that lasts at least 6 months, and often much longer.

The short term news blips might influence stocks for a brief period of time — the morning the news hits the wire, perhaps an entire day,…but most news items don’t have long term consequences for the market. Healthcare and tax issues are long term issues. Leadership in the UK is a long term matter. FOMC and ECB banks have long term influence on the market. James Comey…will not have a long term influence on the market. He is a moth with in insatiable attraction to spotlights, so he’ll have his day on Thursday. I’m sure some of his comments will prompt a negative news flow, which will be a drag on the market. The extent of the negative news flow? Unknowable right now. Might turn out to be a big deal, might turn out to be nothing.

The bottom line is that there are a lot of distractions this week, and that’ll make for some trendless trading.

My overall outlook remains bullish. We’re struggling with resistance, but I don’t see any negative divergences that hint at more selling.

I mentioned several stocks that were in squeezes last night. I suggest that you check those out this morning and log into the trading room to discuss. My bet is that some of them will be money makers.

See you there.

–Dan

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