Bulls stepped up.

With Euro jitters fading (at least for now) the bulls stepped up to the plate yesterday in a show of strength.   Holding the DIA and SPY 50-day average is vital if we hope to see additional price improvements in the market.  The IWM moved with great confidence yesterday once again posting record high as it reacted bullishly to support.

These bullish moves in price still face key resistance levels as political uncertainty continues to swirl.  Today the White House is expected to decide on steel and aluminum tariffs affecting some important trading partners.  Obviously, the market is sensitive to this issue and react swiftly to the decision so keep a close eye on price action and prepared to react.

On the Calendar

The Thursday Economic Calendar starts with the Weekly Jobless Claims and Personal income and Outlays at 8:30 AM Eastern.  Consensus suggests the weekly claims will come in at 224,000 a full 10K decline from last week.  Personal income expects a moderate 0.3 percent in April with consumer spending is expected to increase 0,4 percent.  Exclude both food and energy, and the core index expects only a 0.1 percent increase to 1.8 percent annual reading.  At 9:45 AM the Chicago PMI is expected to rise to 58.4.  Then at 10:00 AM forecasters expect Pending Home Sales to increase 0.4 in April as more homes come to market helping to boost sales.  The EIA Petroleum Status reports is the last of the market-moving reports this morning and in not forwardly forecast.  We have two Fed Speakes today at 12:30 PM & 8:30 PM along with two bond events and several non-market-moving reports to close the day.

The Earnings Calendar shows 63 companies reporting today with AEO, DG, and DLTR before the open.  After the bell, we will hear from COST, LULU, and GME.

Action Plan

After the sharp morning gap up the bulls found stored reserves of energy pushing the markets sharply higher as Euro Jitters dissipated for the time being.   Trade will be on the mind of the market today as the White House may decide to move forward on steel and aluminum tariffs.  Currently, Futures are pointing to a flat to slightly lower open but with a big day of economic reports and several earnings events that could quickly change.

As our current positions continue to extend gains, make sure you are adjusting stops to protect profits.  Don’t let greed get in the way of taking profits as political uncertainty continues to swirl on trade negotiations, North Korea and the Euro.  The DIA, SPY, and QQQ continue in consolidation between key support and resistance levels.  Breakouts or failures of these key levels could create some fast price action so watch closely.

Trade Wisely,

Doug