Remain Objective

With such a strong bull run underway it can be difficult to remain objective.  There are those with a wildly bullish market bias and those expecting an imminent collapse as a result of the being overbought.  The financial news only serves to fan the flames of both sides of this drama.  Toss in turbulent government and about 1500 earnings reports and you have the makings for a very wild week.  So whats a trader to do?

What works for me is to turn off all the noise, focus on price action, my trading rules, goals and discipline.  Price is King.  I can only make money if I’m on the right side a price move.  What I think or feel should happen is completely irrelevant and only clouds my view of actual price action.  Turn off the noise, set your bias aside and trade the chart.

On the Calendar

The Economic Calendar begins with a potential market-moving report at 8:30 AM Eastern.  The Personal Income and Outlays core number is expected to rise by only 0.1% September with the year over year rate stuck at 1.3%.  However, personal income is expecting an increase of 0.4%, and consumer spending is expected to jump 0.9% as a result of post-hurricane auto replacements.  At 10:30 AM is the Dalla Fed Mfg. Survey is not expected to move the market with a strong number of 21.3 according to forecasters.

The Earnings Calendar will be front and center this week with more than 1500 companies reporting.  Today we get it kicked off with just over 180 posting results.  I highly recommend taking the time to make sure of the reporting dates of companies you hold or those you are considering as new purchases.

Action Plan

Last week ended with a bang due to some great big tech earnings reports.  Both the SPY and the QQQ closed at new record highs while DIA and IWM lagged slightly behind.  Currently, futures are pointing to lower open as I write this but with so many earnings reports coming out that could easily change.  There is widespread speculation today of possible arrests from the Russian investigations.  That, of course, could temper the bulls enthusiasm as it could slow or even stop the tax plan.

As for me, I will stay the course, trading with the trend which is bullish but extended.  With such a huge number of companies reporting this week anything is possible.  Don’t be surprised to volatile moves up or down as the market reacts to earnings as well as the news.  Fast intraday whips are not out of the question so avoid chasing and wait for low-risk defensible positions.  My suggestion is to turn off the news, avoid the drama and stay focused on the price the action.

Trade wisely,

Doug