No Fear

Even in the face of 276 billion in possible China tariffs, the Bulls are showing no fear this morning with the Futures suggesting a substantial gap up at the open.  The DIA, SPY, and IWM having held key levels of price support last week look ready to for another leg higher.  The QQQ’s still has some work to do to reclaim a key support but the current bullish would suggest that is certainly possible.

Although the market is putting on a brave face this morning, keep in mind that the bullish sentiment could quickly shift if the tariffs become a reality.  If the market doesn’t care then why wouldn’t the president move forward with them?  Plan your risk accordingly.  Keep in mind whipsaw price action is possible near market highs so be careful not to chase with the fear of missing out.  Remember low-risk entries occur at or near price support not at or near price resistance.

On the Calendar

We begin this week with an Economic Calendar without an expected market-moving report the entire day.  We have a Bond Announcement @ 11:00 AM, a Fed Speaker @ 11:30 AM, 2-Bond Auctions @ 11:30 AM, TD Ameritrade IMX @ 12:30 and Consumer Credit @ 3:00 PM to close the day.

Of the 24 companies reporting on the Earnings Calendar this Monday, I don’t see anything particularly notable or market-moving.  However, it’s still extremely important that you are checking reporting dates against your current holdings.  Doing so is a simple practice that is important for all traders.

Action Plan

It would appear that the threat of new tariffs is not enough to deter the Bulls from pushing the market higher.  Asian markets were mixed but mostly lower overnight however European markets are currently showing modest gains across the board this morning.  There is still a significant amount of time before the open, but currently, the Dow Futures are suggesting a gap up of nearly 100 points.

Friday’s sudden attack lower was defended by Bulls holding key support levels in the DIA, SPY, and IWM.  The QQQ remained below an important resistance level but this mornings bullishness looks as if regaining this level as support is possible.  All-in-all the bullishness this morning looks good for a new leg higher in the market.  Remember too we watchful of whipsaws at or near market highs.  Also, remember the Fear-Of-Missing-Out is a powerful emotion so be careful not to over-trade or chase gapping stocks near resistance.  Ignoring the possible tariff now could still create a quick change in market sentiment if levied, so plan according.

Trade Wisely,

Doug