Earlier today, a midday report from Reuters suggested that the phase one trade deal is unlikely to happen before 2020. Unsurprisingly, stocks sunk on the news.
Then, a few hours later, the Fed released minutes from its October policy meeting, where most FOMC (Federal Open Market Committee) members saw little reason to continue cutting rates.
As you may have figured out already, the market is motivated by two types of events:
Trade war news and rate cuts.
And without a partial trade deal or rate cut in the near future, bulls are starting to panic.
Honestly, I can’t blame them. For weeks now, the promise of a trade war de-escalation has propped up stocks.
Now that the phase one deal is off the table in 2019, investors have little to look forward to.
Heck, Q3 earnings are almost done as well.
Unless President Trump stuns the market with some sort of hugely positive trade development, we could see another holiday dip – like the one that happened in late 2018, just a few weeks later.
Because of that, I have Friday, December 6th, already circled on my trading calendar. That’s the day the Bureau of Labor Statistics releases its jobs report.
If America’s employment numbers skew negative, watch out, because it could get ugly in a hurry.
And so, while it might make sense to short everything under the sun in anticipation, there are actually a few stocks that could end up doing quite well amidst the carnage. Particularly those that have already sold off like the dickens, and are nearing a breakout past resistance.
Case in point, let’s take a look at Endo International PLC (NASDAQ: ENDP).
In the daily candlestick chart above, you can see that ENDP is almost at key resistance – the high from October. Contact with the lower Bollinger Band (BB) was just made, suggesting that this stock is destined to rise higher. The current weekly candlestick just cleared the high from three days ago and is now almost above the November high.
Normally, we’d take a stock like ENDP long right away, but because key resistance lingers overhead (alongside a diving market), we need to see it make a true breakout first.
And that, based on ENDP’s current trajectory, could happen very soon, meaning it might make sense to go long at a trigger point of $5.40. There’s also a chance that ENDP could also bounce off resistance, but with the recent setting of consecutive higher lows, a long position seems more likely to generate a winning trade.
Even if the general market takes a nosedive in the meantime.