Positive price action at support inspires a little bullishness.

Seeing a little positive price action at support encouraged the Bulls to work a tiny bit harder yesterday.  As expected there was no interest rate increase, but the odds of a June increase are now better than 90%.  However, it’s important to note even with three more 25 basis point increases the prime rate will still be below 2%.  The news out of the Washington DC says we can expect a vote on the new health care bill today.  It would appear they have finally acquired enough votes to get the job done.  I suspect that is one of the reasons we are seeing the futures pushing higher this morning.  Today is also the last big day of earnings this quarter with nearly four times more reports than are scheduled for all of next week.  If the Friday Employment Situation report is as positive as the ADP suggests, a bullish breakout could be in the cards.  Only time will tell.  If you happen to be an old Star Wars fan, May the 4^th be with you!

On the Calendar

On the Economic Calendar, today is International Trade, Jobless Claims, and Productivity Costs all coming out at 8:30 AM Eastern.  At 10 AM we will get the Factory Orders number.  As usual the most important of the these will be the International Trade & Jobless Claims, but they would need a surprise to move the market.  Please keep in mind that Friday is the big Employment Situation report.  Chalked full of reports today is the Economic Calendar with 558 companies revealing quarterly numbers.  Today is the last big earnings day this quarter. Yeah!

Action Plan

After giving up ground in the morning, the Bulls dug in and pushed back finally showing some strength.  It’s going to be important for the Bull’s to step up again today and follow through with another show of force.  Typically the market will be choppy ahead of the Employment Situation Report, but Wednesday’s strong showing of 175K in the ADP could inspire a bit of confidence in the Bulls.  Currently, the futures are pointing to a 50 point gap up which is encouraging.  I will be looking for new positions today.  Keep in mind Congress is expecting to vote on the new health care bill today.  If it finally passes, I think the market will view that as a positive.

Trade wisely,

Doug