As I expected, the markets took us through two very typical responses last week...
First, we had a relief rally after the French presidential vote generated a positive surprise.
Then we caught a classic "sell the news" response to the Trump tax plan.
The French presidential election is still a big deal because of its implication for the continued health of the European Union (EU).
As we discussed last week, had the two anti-EU candidates won, the markets would have had a severe sell-off.
I recommended we refrain from trying to "handicap" the result ahead of time - a potentially costly move - and take a position once the result became clear.
That was absolutely the right way to play it.
Now, I mention this not to look backwards or gloat, but because the confluence of circumstances has contributed to a technical setup I'm looking at that's going to continue to influence the opportunities ahead.
There will be a way to play what's coming next, too...
Tags:trading strategies
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