An amazing time to be a trader!

The bulls seem inspired to reach out to 25,000, and the VIX may be poised to make a new historic low.  Indeed, An amazing time to be a trader!  There is no fear in the market and money following to the market currently seems to be unending.  When times are this good, it’s very easy for traders to become complacent.  Take advantage of everything this bullish exuberance has to offer but maintain your focus and discipline.  It could happen today or years from now, but eventually, the tide will go out.  Be prepared, not surprised by always having a contingency plan.  Let the good times roll but always have your go bag packed an ready.

On the Calendar

The Thursday Economic Calendar gets going at 8:15 AM Eastern with the ADP Employment Report.  The ADP has lost much of its credibility this year having been glaringly wrong so much of the time.  ADP is expecting 188k in jobs growth in December.  At 8:30 AM we shift to Jobless Claims, which are expected to decline slightly to 240K this week.  The EIA Petroleum Status Report is at 11:00 AM today and will likely be the most potential market-moving report of the day.  They don’t forecast this number, but with the current rally in oil trader would the trend of supply reductions to continue.  There are several other lesser reports today as well as Bill Announcements and a Fed Speaker at 1:30 PM.

On the Earnings Calendar, there are 16 companies reporting today.  Notable is LK, MON, and PKE before the bell with PSMT and SONC after the bell.   I would not expect any of the earnings reports today to be particularly market-moving.

Action Plan

New all-time highs in the DIA, SPY, QQQ with IWM continued to lag behind in consolidation.  The Dow closed only 78 points below the huge round number of 25,000.  Futures are currently pointing to a Dow gap up of about 70 points this morning suggesting 25K will most likely give way to the bulls today.  I think the question is what happens when this major milestone occurs.  As always stay focused on price action for clues and try not to predict or trade your bias.

Clearly, the bulls are large and in charge, but there is also the potential stumbling blocks to be aware of today.  First, is how price will react to the big round number of 25K.  Will we blast right through with price holding it as support or will it become a significant level of resistance for the Dow?  Secondly, with the strong current rally underway in oil a surprise EIA Status showing a build in supplies could trip up this bull rally.  The VIX is very near all-time-lows suggesting no fear but don’t make the mistake of being complacent.  It is entirely possible with the gap up this morning that the VIX could set a new historic low.  Truly, an amazing time to be a trader!

Trade Wisely,

Doug