U.S. Stocks Sell-Off Amid Impeachment Buzz
Today has brought a massive shift in fortunes for U.S. stocks. Following a somewhat strong Wall Street open, values have slid well off intraday highs. The result has been a full-scale reversal, with the DJIA DOW (-200), S&P 500 SPX (-28), and NASDAQ (-115) trending to the red.
The primary driver of this afternoon’s reversal has been growing talk of a move to impeach Trump from Congressional Democrats. Reports have surfaced that suggest formal proceedings may be underway. In addition, an official announcement on the subject from Speaker of The House Nancy Pelosi is scheduled for later today.
While impeaching Trump is a longshot in the eyes of many, the buzz has created uncertainty in the markets. As a general rule, traders and investors aren’t fond of the unknown; if a serious bid at impeachment is made, then expect high volatility for U.S. stocks.
U.S. Stocks Reverse Course Amid Impeachment Buzz
In a Live Market Update from earlier today, I broke down a long trade recommendation for the December E-mini S&P 500. The play turned out to be a success, generating a rapid short-term bump from daily downside support. If you missed it, check it out here.
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Much like the S&P 500, the December E-mini DOW is challenging several key daily support levels:
- Support(1): Bollinger MP, 26736
- Support(2): Daily SMA, 26457
Bottom Line: Today’s late session is likely to be very active for U.S. stocks. Values are falling rapidly as impeachment buzz grows. If official proceedings against Trump are launched, it may turn very ugly by Wall Street’s closing bell.
If we do see the markets continue to fall, a long from the Daily SMA (26457) will set up in the December E-mini DOW. For the remainder of the session, I will have buy orders queued up from 26464. With an initial stop at 26419, this trade produces a fast 25 ticks on a sub-1:1 risk vs reward management plan.
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