The Bulls take a healthy rest.

The Bulls take a healthy rest.

After a strong and extended upward run the Bulls take a healthy rest.  As much as we all like to see the market power higher a nice rest to develop a new level of price support is productive.  If the Bulls maintain control while building support, more buyers will be attracted, and confidence in the trend will expand.  Having taken profits into the rally, we are in very comfortable position without all the pressure.  Our profits are safe while those that allow greed to control their trading likely saw their gains diminish yesterday.  We are now free to find new low-risk entries.

On the Calendar

Another light day on Economic Calendar with the NFIB Small Business Index at 6:00 AM Eastern.  There is a Fed Speaker at 10:00 AM and one at 8:00 PM today as well as several bond auctions to round out the day.

On the Earnings Calendar, there are a few companies reporting, but I don’t see any market movers.  Keep in mind that Earnings Season will officially kick off on Thursday with reports from C and JPM.  Make sure to check all position you hold and those you are considering buying for earnings dates.  Fail to do so, and the consequences can be significant.

 Action Plan

Yesterday the market took a well-deserved rest pulling back slightly with choppy price action.  With the banks back open today we should see some better price action, but don’t be surprised if it remains choppy as we wait for the Fed Minutes.  Another reason the market could continue to pause is the kick off to Earnings Season beginning on Thursday.  Will the Bulls or the Bears be inspired as results roll out?

The overall up-trend continues strong, so I will continue looking for long positions.  Futures are once again pushing higher with the Dow suggesting it will open at or near record highs.  I would be cautious of chasing the opening pop as it could produce another whipsaw much like what happened yesterday.  I will give it a good 15 to 30 minutes to see if real buyers step in after the professional pump.

Trade Wisely,

Doug