Maintain an Edge.

My knowledge of technical analysis and reading price action is what gives me an edge in the market.  To make a living as a full-time trader, I have to recognize when I have an edge and when I don’t if I want to make consistent profits.  We all know that individual earnings are unpredictable.  When we get them in groups of 500, they can easily swing the entire market before the open or after it closes.  That means to trade today I have to be willing to give up my edge, toss caution to the wind and embrace gambling.  I choose to maintain an edge!

I’m very light in my accounts and don’t expect to add new risk today.  With so many unpredictable earnings reports I have to forfeit my technical analysis edge to trade today.  Gambling has never been a winning strategy for me.  When my edge is gone, I prefer to stand on the sideline watching the battle and protecting my capital.  Buckle up friends; it could be a bumpy ride!

On the Calendar

One hour before the market opens the Economic Calendar get the day going with International Trade and the weekly Jobless Claims reports.  International trade is expected to widen the deficit in September with a consensus reading of $63.9 vs. $63.3 billion.  Also at 8:30 AM Eastern the weekly Jobless claims were expecting 235K only slightly higher than the 222K last week.  At 10:00 AM Pending Home Sales number is expected to rise 0.4% after last months 2.6% drop due to hurricane impacts.  There is a Fed Speaker at 10:30 AM as well as a few lessor reports and bond auctions.

Today is a huge day on the Earnings Calendar with more than 500 companies expected to fess up to last quarters results.  There are a lot of potential market-moving reports today with the likes of GOOG, MSFT, INTC, WDC, WYNN, AAL, BMY, COP, MO just to name a few.

Action Plan

Yesterdays light sell-off is being met this morning with futures are currently pointing to a slight bounce back at the open.  With so many companies reporting the bulls and bears will have a lot to fight about in the next 2 hours before the market opens.  Anything is possible.  Then after the market close will some really big hitters report, so no matter what happens during the day, it could all change in the after-hours session.

Trade Wisley,

Doug