Morning Market Thoughts

by DAN Good morning. The futures are up this morning on optimism that some type of tax cut might actually happen. Mixing two common phrases: While hope springs eternal, the devil is in the details. No one really knows for sure what will ultimately come from the Swamp.

OPEC is also meeting today and the question is whether the cartel will continue to cut production through 2018 in order to elevate oil prices and slay the frackers. I’ve been largely ignoring the energy stocks, however the Oil & Gas Exploration & Production ETF ($XOP) and the SPDR Energy ETF ($XLE) are looking interesting — particularly the XOP. Nothing to do yet, but the XOP is still down 60% from the June 2014 peak, and it’s up 60% from its January 2016 low. Go figure.

As noted last night, the sell of in the high flying FANG stocks took them down to test key support levels, and they are rebounding a bit this morning. Zoom out to the weekly charts and you’ll see that the uptrends are intact. But it’s important to pay attention to current volatility and to high volume, steep declines because of what it represents — institutional distribution. But these stocks could continue to move higher…or not. As some funds sell, other funds buy. Tops are processes that can take a long long time to complete. In Mentorland, one person’s sell is another person’s hold. And one person’s hold is another person’s buy. So decide what your approach is in every stock you own. Are you going to pay attention to the short-term volatility, or are you going to take a long term approach and view your stocks as investments. There is no universal “correct” answer. You just need to ask yourself that question and find your own answer.

Pay attention to the banks and brokers. $SCHW, $ETFC, and $AMTD are working well and coming out of squeezes. Regional banks are also doing well.

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This week, we’ve discounted all of our trading courses by 25%. I’ve been pushing the “59 Minute Trader” because we’re seeing so many money-making opportunities due to the volatility at the open. If you want to ramp up your trading performance, this is one big way to do it. And even if you are not interested in short-term trading, the concepts taught in this course will be invaluable to your decision-making process in managing your holdings. Check it out!

See you in the forum.

–Dan

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