News & Sector flow: COVID-19 continues in the headlines, but markets shrug. The phase one China trade pact is coming under increased scrutiny with calls for verification on the agreed upon commitments amid China’s crackdown on Hong Kong. Both the trade deal scrutiny and the crackdown have had little effect on Chinese stock markets which bolted between 3 and 5% on Monday (some analysts pointing to much better news flow and commentary coming from official party news outlets). The U.S. Dollar continues its weakness, so gold, silver, metals, mining shares, and emerging markets have attracted interest. Keep an eye on these. Breakouts can continue to run. Much has been made of the NDAQ (QQQ) running to new all-time highs, but other indices have not participated in the move (DJIA/DIA, Transports/XTN, SPX/SPY, this is a potential negative divergence and a BIG one).

Shortside Thoughts: Human nature being what it is, we sometimes deprive ourselves of rational analysis. When we are emotionally invested in an outcome it is hard to admit when we are wrong in a trade. Mental stops or stop orders will preserve our trading capital. Many focus on winning in every trade. It is best to focus on winning percentage setups, and capital risk management (Stop Loss Order or Range Order). Sometimes the best trade of any day is a loss that avoided a disaster.

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