No Fear

The only thing fear this that there is no fear!  On Friday last week, the VIX hit the lowest low ever recorded by the index.  As a result, complacency is very high as money continues to rush into the market as is it can never fall again.  Trust me it will.  However, you can also trust that you and will not be able to predict the time or the event that will bring back the bears.  So the moral of the story is, don’t fight the trend AND avoid complacency.

That sounds easy, but in reality, it’s pretty difficult to do because we have to set aside our bias and shut off the noise.  What works for me is to focus on the price action.  If we give up the idea that we can predict the next move of the market and look at a chart with an unbiased eye price will almost always provide clues.  What we want, hope or believe should happen is irrelevant.  Focus on Price.

On the Calendar

On the Economic Calendar this Tuesday we get started at 10:00 AM Eastern with the JOLTS report.  With the country running at near full employment the job openings number continues to grow.  Consensus for September is expecting job openings of 6.082 million.  Janet Yellen speaks at 3:00 PM but other than that there are some bound auctions and a non-market-moving Consumer Credit report to close the day.

While the Economic Calendar is light, the Earnings Calendar is very busy with more than 425 earnings reports expected.  Earnings continue to roll out with very strong reports, but that is no excuse to be complacent.  Make sure to check current holdings as well as those you are thinking so adding to your portfolio for coming reports.  A tiny effort on our part can save us from a very bad day if a company reports poorly.

Action Plan

The SPY, DIA and the QQQ’s once again all closed at record highs.  Overnight futures were very bullish with the Dow Futures up more than 50 points.  This morning that bullishness has tempered slightly with futures mixed.  However, with so many earnings reports before the market opens anything is possible.

I will continue to manage the positions that I’m in as well as look for new long positions.  The trend is up so until that trend ends I intend to trade in that direction.  Like everyone else, I believe the market is overextended but will not try to predict a top and find myself fighting the entire market.  What I do want to fight is complacency by staying focused on price action and have a plan to avoid emotion in the heat of battle.  Believe in preparation, not luck!

Trade Wisely,

Doug