Back in the Saddle

Good morning friends.  It’s good to be back in the saddle.  Las Vegas is always fun and meeting with fellow traders at the Expo is a blast.  However, as Dorthy says in Wizard to Oz, “There is no place like home.”

The Bulls remain in control, and the overall trends are still very bullish.  I will continue trading long, and with the overall trend, however, I think it would be wise to stay laser-focused on price action.  As strong as this bull run is we don’t want to become complacent.  One method to combat complacency is taking profits consistently into market strength.  Doing so will relieve the pressure on a winning trade.  There is nothing like taking profits to the bank to remove the emotions of fear and greed.

On the Calendar

There are several items on the Economic Calendar such as bond auctions but nothing that is expected to move the market.  At 12:10 PM there is a Fed Speaker to be aware of but again unlikely to move the market.

On the Earnings Calendar, there are just over 200 companies expected to report today.  As the last really big week for this earnings season we and expect about 1500 reports so stay on your toes for another wild week.

Action Plan

With the DIA, SPY, and QQQ all setting new closing records on Friday the trend higher is still absolutely intact and bullish at this time.  The poor IWM just can’t seem to get with the program join in with the rally.  As of now it continues to consolidate and would have to be considered the weakest of the indexes even though sellers have been unable to take control.

Futures this morning are mixed as I write this, but of course, with so many pre-market earnings reports anything is possible.  The bullishness of this rally has been remarkable, and I know many traders think these prices are unsustainable.  While I agree this bullishness seems irrational, it would be unwise to anticipate a market correction.  If you take a look at the tech bubble of the late 90’s you can see that irrational market behavior can last several years.  Please understand I am not suggesting this rally will last for years, I’m simply pointing out it has happened before.  Stay with the trend until the trend ends.

Trade Wisely,

Doug