Geopolitical news will undoubtedly lead to a “buy-the-dip” opportunity. With this in mind, we will watch for support and reactionary lows this morning. We will wait for the opening range (9:30 ~ 10:20 AM) before adding major risks to our portfolio. We were taking risk off into strength over the past couple of weeks. Now we have a catalyst.
Since the market momentum has been bullish of late, we’d find it hard for the bigger macro issues to change so dramatically so as to effect market direction in one day.
XII and Volatility
We’ll watch the major indices, and one of our favorites, the ARCA Institutional Index (XII) components for support. XII is trending between standard deviation one and two bands as the group rallied into the first trading day of 2020.
Watch the top-weighted stocks in the XII. These candidates should hold up well and present buying opportunities over the next few days.
The 12 candidates above are a small subset of stocks we will consider trading if “simultaneous” movement picks up today. The Dow Industrials Top 30 stocks should be in play today.
Defense and military stocks are bullish, NOC, LMT, RTN, and GD.
Futures are moving off Globex session lows. Gold is higher.
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during market hours, as we navigate the current environment. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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