If I had to pick one word to describe this week of trading, it would be anticipation.  With the FOMC expected to cut rates on Wednesday.   The question is, will it be enough after a 10% market rally in anticipation of an aggressive FOMC move?  The market will also have to focus on over 1200 earnings reports this week and the resumption of US/China trade negotiations.  If that’s not enough for the market to digest, let’s toss in a very busy week of market-moving economic reports such as the Friday Employment Situation number to continue to stir the volatility.

During the night, Asian markets closed modestly lower across the board ahead of the pending trade talks.  This morning European markets are also pensive currently trading mixed but mostly lower.  US Futures are also starting the day timidly, pointing to flat open.  Although the index trends are bullish and new record highs were made on Friday this morning’s uncertainty is palpable.  I’m expecting price action this week to challenge even the most experienced traders.  Plan your risk carefully.

On the Calendar

We have a huge number of earnings this week with more than 120 companies reporting today.  Notable reports include AKS, BAH, BTND, CTB, TACO, RE, ILMN, LEG, NBR, SNY, TXRH, RIG, and VNO.

Action Plan

This week has the potential of being a very challenging trading week full of uncertainty and price volatility.  We have more than 1200 companies expected to report this week, a busy economic calendar that includes the FOMC rate decision Wednesday afternoon as well as the Employment Situation Report Friday, and for good measure, let’s toss in the resumption of China Trade talks.  With the SP-500 at new record highs and up more than 10% in just the last 2-months, there is a lot at stake.

The NASDAQ also closing at new record highs on Friday index trends are bullish, and there is very little fear with the VIX hovering just above 12.  As I write this report, US Futures are flat ahead of today’s earnings reports, and its possible trading could remain choppy and indecisive until the FOMC decision where is largely expected a rate cut is forthcoming.  The question is, will it be enough to please the market after running up so hard in anticipation?  I expect this to be a very challenging week, even for every experienced trader’s.  

Trade Wisely,

Doug