Big News Day

I have to admit that I was somewhat surprised that yesterdays FOMC announcement turned out to be such a non-event.  The market just yawned and saw nothing to react too.  Today is another big news day with some big after the bell earnings reports tossed in for good measure.  The Bulls are firmly in control buy at the end of the day yesterday price action suggested a little weariness and maybe a rest in the rally is possible.  With all the news the market will have a lot to chew on and potentially react so stay on your toes.  In an all bull market it’s very easy to become complacent because you can buy almost anything at anytime and the rising tide makes you money.  Guard yourself against complacency by staying focused on the only thing that really matters, Price!  The clues will be there if you watch and listen to the market.

On the Calendar

We kick off the Thursday Calendar with the weekly Jobless Claims at 8:30 AM Eastern.  The after-effects of Hurricane Maria are expected to continue to impact initial claims with a rise to 239k vs. 236k.   Also at 8:30 AM  is the Retail Sales numbers which are expected to see the core rate rise by a solid 0.4%.  To finish the 8:30 AM data dump is Import and Export Prices where forecasters see imports rising 0.7% with exports only increasing 0.3%.  At 9:45 we get the PMI Composite a reading above 50 indicates manufacturing growth while a sub-50 print points to a decline.  Business Inventories comes out at 10:00 AM and forecasters see a 0.1% draw-down in inventories which is considered bullish.  After that, we have a few non-market-moving reports and bound announcements.

The Earnings calendar show just over 30 companies reporting today.  There are several big noteworthy reports after the bell such as ADBE, COST, ORCL & JBL.

Action Plan

The strength and longevity of this current rally is a bit spooky but also very impressive.  Spooky because the DIA has managed to leave behind gaps 5-days in a row, and impressive in breadth.  Once again new records were set in the DIA and the SPY.  A 25,000 Dow print is now only 325 points away, and the bulls seem very determined to get it there.  However, with the late afternoon selling yesterday across all indexes perhaps a little rest in this bull march is possible.   There is a big economic data dump today as well as several big earnings reports after the bell so the market will have a lot reaction worthy events today.

Currently, futures are once again suggesting a gap up in the Dow, and the VIX continues to register little to no fear.  There is no denying that the trend is up and the bulls are in control.  As a result, I will stay long and continue to look for long trades as long as that condition exists.  Long ago I learned the hard way that trading my bias, predicting market turns and fighting the market was a losing business model!  However, that does not mean we should be complacent and toss caution to the wind.  Stay focused on price, listen to the market and be flexible enough to adapt if a change appears.

Trade Wisely,

Doug