After a choppy Thursday with the market reacting to declining home sales futures markets were quickly lifted out the overnight doldrums with news of a pending trade deal.  The story was very lacking in details but the possible end of this trade war was enough to inspire the bulls to push for more than a triple point gap up.  A positive close today will cap an extraordinary 9^th straight week of market gains. 

Overhead resistance is certainly still a factor and though I feel the fear of missing out just like everyone else I will stick to my discipline and avoid chasing so late in the rally.  I will also plan to use this mornings gap up to take some profits where possible and reduce my weekend risk.  My job is to advance my account and this late in such an extraordinary run a Friday morning gap up is a gift I plan to take to the bank.

On the Calendar

On the Earnings Calendar we get a little break today with less than 50 companies reporting.  Notable earnings include, AN, COG, CHK, MGA, RY, RUTH, WPC and W.

Action Plan

Another news report that the US and China are getting closer on a trade deal quickly lifted the futures out of negative overnight territory.  Although the report contained no information on the details or timing the bulls are pushing a triple-digit gap up open this morning.  As I mentioned yesterday a strong finish to week would not be surprising to cap off a nine-week rally of more than 4200 Dow points.

Though gapping up the indexes will still be challenged by the price resistance just above so be careful not chase this morning.  As normal I plan to use a Friday morning gap as an opportunity to take some profits and reduce weekend risk if at all possible.  This week we have seen the bull ignore falling retail sales numbers and yesterdays decline in home sales but I don’t believe that can continue forever.  Stay disciplined on the job of protecting your capital and advancing your account.  Have a great weekend everyone.

Trade Wisely,

Doug