Their horns are still very sharp!

The Bulls proved their horns are still very sharp as they pushed the Bears back on the news of a US-Mexico trade agreement.  All four major indexes printed new record highs, and the only hint of profit-taking came in the IWM as it pulled back before the close.  Today the Bulls certainly have the advantage of momentum, and current Futures suggest another modestly bullish open.  However, after such a big surge in price, it would not be out of the question to see some profit-taking begin soon.

As a full-time trader with a family that depends on me, I make a habit of taking some profits when the market is showing strength.  Consequently, I went to the bank yesterday and plan to do the same today.  I’m always very grateful with the market give up profits so easily on a big surge.  As traders, we all want more, but the last thing we want to do is allow greed to prevent us from taking profits.

On the Calendar

International Trade in Goods tops the Tuesday Economic Calendar at 8:30 AM eastern and is a potential market-moving report.  According to forecasters, the good deficit will widen to $69.4 in July vs. $67.9 billion in June.  At 9:00 AM is the S&P CoreLogic Case-Shiller expects home prices to gain 0.2 percent in June holding the year-on-year at 6.5 percent.  Consumer Confidence is at 10:00 AM continues to strength expecting at the reading of 126.8 in August.  Other than that we have Retail Inventories & Wholesale Inventories @ 8:30 AM, Redbook @ 8:55 AM, Richmond Fed Manufacturing Index @ 10:00 AM, State Street Investor Confidence Index @ 10:00 AM, and Bond Auctions @ 11:30 AM & 1”00 PM to close the calendar day.

We have 40 companies reporting with BBY and TIF among those coming before the market open.  Among the reports after the bell, today is HPE and HRB.

Action Plan

A very nice bullish surge as the US and Mexico come to an agreement on trade yesterday.  The DIA, SPY, and QQQ left behind open gaps as well as closed at new record highs.  The IWM also saw a strong bullish surge but was unable to hold on to those gains throughout the day leaving behind a shooting star candle pattern.  European markets are modestly bullish across the board this morning while the Asian markets closed the day relatively flat.  Currently, the Dow futures are pointing to a modestly bullish open but with earnings and economic news before the bell that could certainly change.

Momentum up favors the bulls but keep in mind profit-taking could begin at any time considering yesterdays big move.  As the market rallies, remember to take some profits along the way.  Never want to allow greed to get in the way of taking profits.

Trade Wisely,

Doug