The Bulls continue their march higher.

After seeing the terrible news out of Las Vegas, I was half expecting to see the market lower this morning.  Looking at the futures clearly, that is not the case as the Bulls continue their march higher.  Lately, I have heard from a lot of traders trying to predict a market selloff.  While their argument is rational and compelling, they are missing out on a very key element.  Emotion!  Let’s face it the market is emotional and thus does not have to abide by the rules of rationality.  If the market was rational how could you explain the late 90’s bull run?  As retail traders, it’s very important that we simply continue to trade the trend that is before us and avoid the urge to predict.  Now that does not mean we throw caution to the wind and go all in!  We must always be prepared and focused on price action.  When the trend is over price will tell us, and we need to have a plan ready to go to avoid emotional decision-making.

On the Calendar

The Economic Calendar begins the 4^th quarter with the PMI Mfg. Index at 9:45 AM Eastern time.  Forecasters see no change from September’s 53.0 print.  At 10:00 AM we get the most important number of the day in the ISM Mfg. Index report.  The consensus for September’s headline is 58.0 vs. August’s 58.8.  Also at 10:00 AM today is Construction Spending where the consensus call for August is a 0.3 percent rise.  We have a Fed Speaker at 2:00 PM and few bond related items to round out the day.

On the Earnings Calendar, we have under 20 companies reporting, and I would not expect any of them to be market moving.  With the 4^th quarter earnings season just around the corner, I would be wise to make them part of your planning going forward.

Action Plan

The futures are pointing higher with the DIA, SPY, and IWM likely to make new record high prints at the open.  The QQQ is lagging behind and still under price resistance but also gapping higher at the open.  Always keep in mind that gaps at the market open can produce whipsaw price action so avoid chasing in at the open.

Because I don’t want to chase, I will be looking for new long trades setting up at or near price support levels.

Trade Wisely,

Doug