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Thursday, October 31, 2019

Market Update 10/31/2019 - The Trick or Treat Trade, & The Big Reveal!

Here we go again - the financial fake news if blaming Trump for the tiny pullback we're seeing in pre-market. Can you imagine the chaos they could create, if the entire market collapses on Trumps watch? The, "I told you so's", will be coming out of the woodwork! 

Bloomberg is also reporting on the California fires, something they have ignored for several weeks. Why now? Which came first the chicken, or the egg; the negative news, or the negative futures??
Why not report on the wild fires around the globe, and Eco collapse in Australia, and South America? What about the South African swine flue epidemic sweeping Asia, crop failures, and skyrocketing food prices?     

They're also talking down oil, calling this little dip, a big roll over!? Calling BS on that! This is where I think they're setting the bear trap, for the Trick or Treat Trade.  I don't believe I've seen the market sell off on Halloween, because it's kind of a holiday; traders take their kids trick or treating, and there are a lot of Halloween parties... It's a good excuse to cover your shorts, and take the day off. 

Of topic: Yesterday, I heard someone on CNBC (I think it was? I don't pay too much attention...) trying to downplay the affect, an Elizabeth Warren win might have on markets (estimated to be -25%).... and she pointed to the Trump rally, pontificating, that if markets were wrong on Trump, then markets may be wrong on Warren. That's the most absurd pontification I've heard in a while! Capitalism, and deregulation vs Socialism? lol Granted, Warren wouldn't get one measure passed, that Wall Street isn't on board with, because Congress is bought and paid for, but still....        

Yesterday's Trade on the FOMC announcement:

I didn't think they would cut, but it's a good thing they did, or we might have seen another taper tantrum. 

$SPX continued higher after the The Fed announcement which was expected.... I had already raised the short term target, and the breakout was obvious. It looked like some retail bears tried to sell the news, but that failed miserably, and soon they were squeezed out at a new intra-day high. It was an easy trade, given the way the $VIX was driven to new recent lows. Always trust the $VIX. No $VIX strength = no fear.   

Here's what it looked like on a 1 min chart - pullback to support, rally to a higher high. 

 Psychological target of 3050. Funny I was just talking about psychological targets containing a "5", yesterday. In numerology the number 50 means grace, as a gift, or grace period, and it is...

$GOLD: We also saw a little shakeout in gold, followed by a nice rally back above support, if you were watch the $GLD chart, located in the public charts area, but that trade scares me, and it has to be watched like a hawk, and I already have too much on my plate. 

The Big Reveal:

I have to get to the Trick or Treat trade, so I'll do The Big Reveal tomorrow. I'm plan to publish the chart that has kept me on the right side of the trade, since the bottom near the beginning of the year, and anyone who's been following me for any length of time, knows my record.

Don't miss it, because fear is about to return in a BIG WAY, very shortly.

 Energy: This is where I expect to find the Trick or Treat Trade, and the fake news has already set the bear trap.

Of course watch $WTI crude: Not sure oil is going to lead oil producers, but it makes sense...

 $OIH - Oil producers. I really like this set up. It's a little pullback to a higher low.

You could buy this fund for $11, or trade the 3X Leveraged Fund (GUSH), depending on your risk tolerance.
Usually I use a pink line for support, but you'll see it in purple. Could see a little shakeout, before the breakout, but I haven't checked futures. 

$GUSH - not sure if this rally will continue for more than a day, but I see a possible breakout pattern, and we could see short covering in the energy sector continue into Thanksgiving.

$XOM - I suggest you watch this one. Remember when I hated it, back when CNBC was pushing it? Well, now I'm lovin' it!

 The only other bullish trade I see is in $AMD, and if you're short Semi's you could hedge yourself with some of that, so getcha-some-a-dat!

Dammit Stockcharts site just crashed, and I'm outta time.

Maybe I'll add that $AMD chart to the Public Charts area, and I'll alert to that...

I'll also be added the $OIH....

Good luck,


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