Pre market comments posted to my Discord Channel RickJInvest this morning:
7/8
A lot to go over this morning. It is 2:00 AM here in Vegas:) My sleeping schedule is reversed from what it was when I was playing poker full time. Now I am early to bed and up between 1 and 2 AM to start the day. The first hour is going over the overnight plays in MLB, then during the week the next few hours are getting ready for the trading day. Then On Monday and Friday I leave the house for 5:30 A.M. Pickleball:) 1.5 hours of play and its back home to finish out the trading day:)
[1:56 AM]
When I was playing poker full time it was the exact opposite. The motto is you can adjust to about any routine that fits into your routine that you pick for your daily activities. Once you settle into it, you do not think anything of it anymore.
[1:58 AM]
We start the week with a lot of news from last week, and we get no vacation from the news cycle this week, or perhaps any week heading into the November elections. But one overwhelming theme is that heading into November elections, the powers that run this country are not going to allow a market crash. They will do everything they can to keep this bull market intact, and interest rates from rising. After November however all bets are off. As depending on who wins will set the course for monetary policy for the next four years.
[1:59 AM]
In other words, take advantage of the tail wind while it is still there, as once it is removed, look out below:)

Starting out with the monthly chart of $SPX, you can see the almost straight up move of the index Beginning in October of 2022
[2:04 AM]
In Dec of 2021 the Fed decided to reduce its balance sheet which resulted in a year pullback. Then in October of 2022, although their rhetoric was hawkish, they slowly started to reverse course resulting in this run. The lesson is, do not fight the fed. As a trader you need to be aware of not what they are saying, but what they are actually doing!
[2:06 AM]
I do not put a lot of weight on the week to week reports that come out as most are fictious numbers, which are adjusted substantially a month later. But a lot of traders do pay attention to them and react to them, so it becomes important to know what they are reporting, not for reality, but the messaging and clues they provide.
[2:08 AM]
For instance the non farm payrolls was revised down by 57000 jobs for April. That is a big miss:) If I were in business and I was off that much I would not have a job very long.
riccja — Today at 2:09 AM
Usually the initial report is for the messaging, then the revision comes in about the same time as the new report for the next month. The new report gets the headlines, and the revision is found somewhere in the small print. See how that works:)

Daily on QQQ shows new highs for this move, we had a small consolidation starting in June with a breakout late last week. FVE is healthy,

In addition the all important QQQ/SPY chart is widening. Remember this is perhaps the best chart that tells whether you have a tail wind or head wind. When QQQ out performs SPY think Tailwind:)

A lot of activity in TLT, primarily because of the mixed messaging of Powell and the gang. TLT has been reacting violently to every news item that hits lately. But as you can see from the daily chart above , while it is messy, the trend is up, which means mortgage rates are declining, at least for the time being.
riccja — Today at 2:27 AM
In order to trade effectivly you have to be able to know what reality is. That means staying away from the incessant 24/7 cable news cycle. You would be better off not watching cable news, and sticking to apolitical journalists and experts that either have their own shows on Rumble, or put out their own substacks. Unfortunately cable news has become propaganda outlets. My view is that if you could wager on the truth of what they are asserting, and wagered the opposite across the board, you would win around 80% of your wagers:) Unfortunately, they do not put out lines on most of the absurd commentary you see on Cable news.
[2:29 AM]
But I have friends and family when you talk about what is going on around the world you would think you are listening to a cable news commentator. And if you make the wrong decision to engage them on any subject, you face a whirlwind of backlash. So my rule is to not engage, keep my views of reality to myself, and move ahead, trying to make successful trades that come around because many are not reality based.
[2:30 AM]
Think of it as being a contrarian:)
[2:31 AM]
One of the big questions out there now is whether the Fed is going to start cutting rates.
riccja — Today at 2:34 AM
It is getting late in the game for them to start cutting for election purposes. That tells me regardless of what they say, rates most likely are not going to be cut much heading into November. Why? Certainly the news is out there that would justify rate cuts. From the Geopollitical uncertainty around the world, the political dysfunction in the US, the uncertainty of the 2024 elections, the almost certain violence that will come about around election time, the pandemic (bird flu) that is starting to be talked about) , the bank failures, and of course the economic data. All in normal times would have the Fed flooding liquidity into the markets.
[2:35 AM]
But not this time. We will have to wait until after November when I think the answer will be obvious.
[2:37 AM]
Hint: How many times has Yellen talked about Climate change being the #1 priority of the Fed? More than once would be too much as it is not a federal reserve issue. Everytime she talks she discusses Climate change. I would suggest that after November this will become front and center again, so be forwarned.
riccja — Today at 2:49 AM
[2:49 AM]
Note that this week on Tuesday and Wednesday we have Powell testifying in front of Congress
[2:50 AM]
Tuesday the Senate and Wednesday the House
[2:50 AM]
Then Thursday it is CPI and Friday PPI
[2:50 AM]
So a busy week:)
[2:52 AM]
Let me suggest it would be time better spent to watch and see what our elected members of the Senate and House are doing in the trading arena rather then the testimony of Powell:)
riccja — Today at 4:01 AM
So as I started today, this is going to be a busy week for news. On friday we collected $260.00 on our short put with PTLR. The trade was never at risk of closing below the strike price. I am going to focus on these types of trades where I feel there is a very high win % with a low risk of trading below the strike price. In addition, while my GME did not meet my criteria because of the quality of the company, I am going to stick to my parameters as to the company quality as it will allow me to sell calls in the event it trades below the strike price at the close on Friday. Also remember, there is still exposure in trading after the close on Friday. So pay attention to pricing after hours!!!
[4:02 AM]
So for now we have our portfolio consisting of Closed end funds with quality management that trade at a significant discount to Net Asset Value.
[4:03 AM]
Mean reversion is off the table for now, and now and then I trade a swing trade.
[4:04 AM]
With the markets going to higher levels so quick, and the uncertainty of the political environment in the US, being prudent is at least for me the way to go.
[4:05 AM]
How bad can that strategy be when cash now returns around 5% risk free:)
I typically post premarket comments about 3 times a week. In the discord channel I welcome comments and discussion. 4 years ago I added the investing portion as a no cost add on for my handicapping subscribers who also were interesting in trading.
Most of my trades are given out as I trade them. This has become a very popular addition to my handicapping group, some of who have been with me since the very beginning, over 20 years ago:)
Right now everything is free! It will stay that way until the beginning of college football. Since I am using a new data base for overnight MLB plays I decided it would not be fair to charge for MLB until I find a solid data set. These data providers come and go, and the one I was using went:)
It is not easy to find reliable data sources. For example while we are beating the closing line by over 70% this season, we have been carrying a net loss for most of the season of around 13 units. This can of course turn, but we are at over 160 plays now, so we will see:)
And MLB for overnight sides ends the end of August. September historically has been a miserable month for Overnight Sides.
Now back to handicapping, you can take a look at what I have to offer now for free. Just send me an email to RickJ@Rickjshandicappingpicks.com and I will sign you up for the email list, and also send you an invite to my two discord channels.
Just the side comments on a variety of different issues (Health and HOAs) are worth taking a look at.
So join us at least until the end of August when you will have a chance to join us for the Football season.
RickJ
RickJ’s Handicapping Picks
rickjshandicappingpicks.com