The Shakedown 9-22-19

Who doesn't love a Friday afternoon sell off?

Stocks sold off Friday on Trump's comments that he "didn't need a trade war deal before the 2020 election," along with Chinese trade officials canceling scheduled trips to the US as the seemingly never ending trade war continues to exhaust traders. It was a pivotal moment for markets as hopes were high of a trade deal, with these comments being seen as a major setback for any progress made. 

The Fed cut interest rates Wednesday by a quarter point and Trump was quick to lash out at Fed Chair Jerome Powell, as he desired a larger rate cut. The setback in the trade war coinciding with Trumps dissatisfaction with interest rate levels could definitely be more than just a coincidence. General consensus is that he's kicking the can down the road with China to force Powell's hand into further rate cuts. He knows stocks will pop whenever the trade war is settled so he has an automatic bullish catalyst in his back pocket right in time for campaign season. So while stocks are at highs it makes sense to see him push the trade war further. We'll see how this mess transpires. 

There are murmurs of another cycle of Quantitative Easing to begin as the fed bought bonds for the second week in a row, after 250 straight weeks  without buying as monetary policy tightened. This would be extremely bullish for the market. 

https://moneyandmarkets.com/fed-restarts-bond-buying-qe4/

You have to continue to be ultra selective in this market, as we're very likely to continue with this type of chop for months. Earnings season is just a few weeks away.

AMED Long

We've been waiting on this AMED to setup so long and it has finally given us the beautiful daily setup that we've been looking for, while the weekly has been a beautiful site for some time. You have to love how AMED gives the tight daily flag in from of 136/137 with the massive resistance level overhead at 140/142. We always love when stocks give a tight entry a bit below a huge macro resistance level so that we don't have to buy the macro resistance level which they always seem to make tricky. I'm going to start looking for volume through that $136 area, Friday's high, with $137 being the technical trigger.

Trigger: 136/137

Stop: 131.49

Target: 150-160+

Hope to see you in the chat Monday!

Watchlist coming in the following email.