Bulls remain in control

With Asian markets mostly higher overnight and European markets currently bullish across the board the US Futures are pointing to a gap up open as the bulls remain in control for Friday’s open.  The NASDAQ regained a key support yesterday as the DIA and SPY pushed higher and the IWM decided to take a break.  If the Futures continue to maintain current prices, the SPY will open very near new record highs once again.

Once again I want to remind everyone to be careful chasing gaps into market highs.  Wait for proof that buyers will follow-through after the open.  Remember the pop and drops on the 10^th and 12^th of this week when you think about rushing into a gap open.  As always I plan to reduce my risk heading into the weekend and tucking in some of those tasty profits safely into the bank.

On the Calendar

A busy day this Friday on the Economic Calendar.  At 8:30 AM Eastern we get both Retail Sales and Import/Export Prices.  Consensus expects another solid month with a 4 % gain in August Retail Sales, remove autos, and the call is for a 0.5 percent gain.  August import prices expect a 0.1 percent decline while Export prices will increase 0.2 percent according to forecasters.  We have a Fed Speaker at 9:00 AM and then Industrial Production at 9:15 AM.

Capacity Utilization is expected to tighten to 78.3 percent with an increase of 0.4 percent in Industrial Production with the manufacturing component also up 0.3 percent in August.  At 10:00 AM we will get both Business Inventories and Consumer Sentiment reports.  Business inventories expect an increase of 0.5 percent as the underlying sales remain strong and the Consumer Sentiment Index also moves up to 97.0 according to consensus.  We wrap up the calendar day with the Baker-Hughes Rig Count at 1:00 PM.

On the Earnings Calendar, we only have five companies reporting with PLAY being the most notable before the bell.

Action Plan

Have you taken some profits this week?  If not, Friday is a great day to take some risk off the table before the weekend and tuck it safely away in your account.  Futures are pointing to a Bullish open following the lead of European markets that are currently higher across the board and Asian market closing the week mostly higher overnight.

If the market opens where the Futures currently suggests, the SPY will be very close to a new record high.  Remember to be careful not to chase the morning gap an continue to be watchful for clues of reversal and of course those nasty whipsaws that have plagued the market all week.  I wish you all a fantastic weekend.

Trade Wisely,

Doug