Price Action continues to consolidate in a very tight range.

Overall the price action of the market remains fenced into a very small range.  I think most would like to see that north gate open which will put a lot of pressure on the Employment number to perform well.  However, the south gate is under pressure from uncertainty as well as falling oil prices.  The longer the Bulls and Bears are confined, pressure will continue to increase making a big move possible.  One thing is for sure; I will carefully watch both fence lines, prepared to react if one gives way.  Now is not a time to be blinded by bias.

On the Calendar

Today we get one the most watched number on the street, the Government Employment Situation Report.  The March number was a disappointing 98k but the consensus expectation today is 185k.  Although this number seems to be very inconsistent, it remains on the best gauges on the overall health of the economy.  After all, if jobs are growing, then business must be growing, and consumers must be happy and confident enough to part with their money.  The Employment Situation number comes out at 8:30 AM Eastern so any reaction to the number will be before the open.

Beginning at 11:30 we have a string of Fed speakers including Chairman Yellen at 1:30.  If they happen to utter something that the market is not expecting plan on a market reaction.  There are just over 100 companies reporting today.  I either looked at the Earnings Calendar wrong, or they made some changes because next week is now another big of reports.  Ugg!

Action Plan

Yesterday I spoke bullishly about the overall market, but the sell-off in oil left us stuck with more choppy price action.  Currently, I am still bullish holding several profitable long positions however if oil continues to slide south it obviously keeps the Bulls penned up.  The Employment Situation number could be the deciding factor today.  Friday is profit day, and I am planning to put some money in the bank.

Trade wisely,

Doug

Positive price action at support inspires a little bullishness.

Seeing a little positive price action at support encouraged the Bulls to work a tiny bit harder yesterday.  As expected there was no interest rate increase, but the odds of a June increase are now better than 90%.  However, it’s important to note even with three more 25 basis point increases the prime rate will still be below 2%.  The news out of the Washington DC says we can expect a vote on the new health care bill today.  It would appear they have finally acquired enough votes to get the job done.  I suspect that is one of the reasons we are seeing the futures pushing higher this morning.  Today is also the last big day of earnings this quarter with nearly four times more reports than are scheduled for all of next week.  If the Friday Employment Situation report is as positive as the ADP suggests, a bullish breakout could be in the cards.  Only time will tell.  If you happen to be an old Star Wars fan, May the 4^th be with you!

On the Calendar

On the Economic Calendar, today is International Trade, Jobless Claims, and Productivity Costs all coming out at 8:30 AM Eastern.  At 10 AM we will get the Factory Orders number.  As usual the most important of the these will be the International Trade & Jobless Claims, but they would need a surprise to move the market.  Please keep in mind that Friday is the big Employment Situation report.  Chalked full of reports today is the Economic Calendar with 558 companies revealing quarterly numbers.  Today is the last big earnings day this quarter. Yeah!

Action Plan

After giving up ground in the morning, the Bulls dug in and pushed back finally showing some strength.  It’s going to be important for the Bull’s to step up again today and follow through with another show of force.  Typically the market will be choppy ahead of the Employment Situation Report, but Wednesday’s strong showing of 175K in the ADP could inspire a bit of confidence in the Bulls.  Currently, the futures are pointing to a 50 point gap up which is encouraging.  I will be looking for new positions today.  Keep in mind Congress is expecting to vote on the new health care bill today.  If it finally passes, I think the market will view that as a positive.

Trade wisely,

Doug

Choppy price action expected, uncertainty abounds.

Choppy price action is the norm as the market waits for the announcement.  Today could be extra challenging due to earnings reports.  Apple missed the mark yesterday which could prove difficult for the QQQ to continue it’s leadership higher.  Both the DIA and the SPY are in tight consolidation ranges not providing us directional clues just yet.  Toss in the FOMC, the Employment Situation Report on Friday along with a slew of earnings, uncertainty abounds.  As always try to avoid all the noise and emotion by staying focused on the price action.

On the Calendar

Today on the Economic Calendar we have a couple of potential stumbling blocks.  The first being the Petroleum Status Report which had shown a small improvement in supplies.  However, there was a recent story about the US, and I think Lydia have ramped up production which tosses the Status number into question.  Then, of course, have the FOMC Announcement at 2:00 PM Eastern.  I think it’s very doubtful the Fed will raise rates today if they reference more hike in the near future the market will react.  The ADP Employment is at 8:15 AM and ISM Non-MFG index come out at 10 AM.

On the earnings calendar, we continue to ramp up with more than 400 companies reporting today.  Please continue to look before leaping into a trade just before and earnings report.  Use TWLO as an example of how being uninformed can cost you a bundle!

Action Plan

FOMC days tend to be very challenging days to trade.  As a general rule, the price action is slow and choppy until the announcement, and then volatility goes wild with big up and down swings in just a few minutes.  Once the initial reaction subsides, Yellen gives a press conference stirring the pot again.  I would encourage new or struggling traders to stand aside avoiding the additional risk.

Another complication today is that APPL missed earnings yesterday afternoon.  The selling was not extreme in the post-market, but the influence of APPL can move markets if selling pick up today.  Currently, the futures are pointing to a modestly lower open.  I want to take an extra dose of caution this morning.  Perhaps the market can shake off the poor reports, but I don’t want to risk more capital until I see that in the price action.  I’m expecting choppy action until the FOMC announcement, so there is no need to rush new entry decisions.

Trade wisely.

Doug