Bull run continues to produce new records.

As this record setting Bull run continues in the DIA, their tenaciousness has proved very impressive.  Setting the sixth new record highs in as many days on the DIA is no small feat.  As impressed as I am with the 30 stocks or the Dow holding up the entire market it also raises a concern.  Unless the other indexes step up and participate soon, I’m concerned the pressure on the DIA could suddenly break.  So come on Bulls get to work in the SPY, QQQ’s and IWM.

On the Calendar

On the Economic Calendar today we start with the weekly Jobless Claims at 8:30 AM Eastern.  Claims have been running steady at historic lows, and forecasters see more of the same expecting claims of 244K this week.  At 10:00 AM we have Factory Orders, and ISM Non-Mfg Index reports.  After back-to-back in May and April consensus expects to see a 2.7% increase in the June numbers on the back of aircraft orders.  Nondurable goods are expected to continue flat with weak pricing.  ISM is expected to remain strong at 56.9 with both new orders and backlogs staying at consistently elevated levels.

The Earnings Calendar is full to the brim with more than 535 companies expected to report today.  With the Employment Situation number coming on Friday morning we would normally see the market quiet and choppy as it waits.  However, with such a huge schedule of earnings reports is reasonable to expect more than normal market volatility.  Make sure you are aware of the reporting dates of stocks that could affect your portfolio.

Action Plan

After the morning gap the Bears went to work trying to take over, but by the end of the day, the Bulls proved to be too strong closing the DIA at a new record high.  Both the SPY and the QQQ’s made significant recoveries from the intraday lows while the small cap index, IWM, continued under selling pressure.

The overall trends clearly remain bullish.  As a result, I will continue to look for long trades in stocks trending in the direction of the overall market.  With so many earnings reports I will be watchful for an extra dose of volatility today.  I will also remain focused on price action.  With the weekend coming and after such a strong DIA rally the possibility of very swift whipsaws or reversals exist.  Please don’t misunderstand.  I am not bearish, suggesting bearishness or even attempting to predict that a selloff is about to begin.  I am merely suggesting it’s wise to consider the possibility and watch price action for clues.  Preparation is always better than making emotional decisions in the heat of the moment!

Trade Wisely,

Doug