Window Dressing?

With futures pointing to a positive open and the possibility of a little end of quarter window dressing remember to consider the weekend uncertainty and coming holiday as you plan your day.  Volume could quickly decline, and price action may become choppy for the next few trading days.   Remember the market closes Tuesday at 1:00 PM Eastern and is closed Wednesday to celebrate the 4^th of the July.

Remember to use caution and watch for the possibility of whipsaw price action with the morning gap.  Carefully consider how much risk you want to carry into the weekend with the trade war uncertainty and a mid-week holiday directly after.  Even the best of the entry signals may find it difficult to find the energy to follow-through.

On the Calendar

We kick off the Friday Economic Calendar at 8:30 AM Eastern with the Personal Income and Outlays report.  Consensus expects a personal income & consumer spending increase of 0.4 percent in May.  The overall price index expects a year-on-year rate of 2.2 percent.  At 9:45 AM, the Chicago PMI, expects a strong but slightly lower June consensus at 60.1 vs. the 62.7 May reading due to rising costs and trouble filling open jobs.   The Consumer Sentiment number will remain very strong according to consensus which a June reading of 99.0.  To wrap up the calendar month, we have the Baker-Hughes Rig Count at 1:00 PM which is unlikely to move the market.

On the Earnings Calendar, we have 11 companies expected to report results today.  The most notable of the day is STZ which report before the open bell.

Action Plan

I read a report this morning that said the Futures are rising today due to easing trade tensions.  That seems unlikely to me because I’ve seen no change in the pressure applied by the White House.  Today is the last trading day of June, and the last day of the 2^nd quarter, so the futures rally and be attributed to the end of quarter window dressing.  Whatever the reason Dow Futures are currently pointing to gap up around 100 points.  As you plan for the day, remember the rules about chasing a morning gap and watch the possibility of a whipsaw.

Also, keep in mind that today is a getaway day leading into the July 4^th holiday.  I would not be surprised to see volume begin to fall off quickly and choppy price action to begin until we get past the 4^th.  It would also be wise to think about how much risk you want to carry into the weekend.

Trade Wisely,

Doug