Bulls Held Tough

The Bulls held tough at trend and support yesterday even in the face of some nasty tech selling.  Now we need to see the Bulls muster the energy to follow-through and rally off of support.  With a very busy Economic Calendar today and several big earnings reports perhaps they can find the catalyst necessary to do so.  If the Bulls are unable to push higher, then keep a close eye on selling pressure in the tech sector.  We don’t want to see that pressure boil over in more selling that breaks support.

Be careful on the over-trade keeping in mind the possible 200 billion in tariffs threat that could happen this week and the big Employment Situation report on Friday which has in the past created light and choppy price action as the market waits.

On the Calendar

A busy day on the Thursday Economic Calendar begins at 8:15 AM with the ADP Employment Report.  ADP’s estimate in August is 182,000 but, this number has been quite inaccurate month over month.  The weekly Jobless Claims at 8:30 AM expect 213,000 up just slightly from last week when claims hit a 50-year low.   Also at 8:30 AM is Productivity and Cost which estimates nonfarm productivity is increasing to 3.0 and labor costs down 1.0 percent.

Factory orders & ISM Non-Mfg Index are both come out at 10:00 AM.  Factory Orders are expect a decline of 0.7 percent due to a sharp aircraft-related decline while the ISM consensus in August is for a slight increase to 56.7 vs. 55.7 in July.  EIA Natural Gas Report is at 10:30 with the EIA Petroleum Status Report coming at 11:00 both of which do not forecast forward.  Finally the Fed Balance Sheet at 4:30 PM which is scheduled to reduce securities holdings.  We have a Fed Speaker at 10:00 AM, 6-Bond Announcements at 11:00 AM and the Money Supply report at 4:30 PM to wrap up this very full calendar day.

The Earnings Calendar also has its biggest day of the week with nearly 50 companies reporting.  Look for BKS, GIII, and NAV to report before the bell with ABM, AVGO, FIVE, FNSR, GME, MRVL, OKTA, and PANW to report after the close.

Action Plan

Futures are pointing to a modestly higher open this morning in the Dow, but the SP-500 and NASDAQ are flat to slightly lower.  Asian markets were down across the board overnight with the European markets currently holding mixed results.  There is a lot of economic news today and keep in mind the big Employment Situation report comes out Friday morning.  Light and choppy price action can sometimes occur as the market waist for that government employment number so don’t be surprised if price action happens to be a little subdued.

The bulls has did a great job of holding trends and support levels yesterday.  If they can muster the energy to follow-through to the upside today that could prove to be very bullish for the market and an opportunity for buyers.  If they are unable to push upward the selling pressure seen in the techs yesterday could trigger some additional selling.  Remember the possibility of the new China tariffs still weighs on the mind of the market as well.  Price is King so stay focused on price action and know that head fakes and whipsaws continue to be a possibility as we test support levels.

Trade Wisely,

Doug