Can the Bulls repair the technical damage?

While many traders are focused on the what will happen today, I am honestly more concerned with the overall technical damage in the charts.  Today we may bounce, but the big questions are will the Bulls have the energy to repair the price damage.  If we do rally, I will be keenly focused on the on the price action as we approach resistance levels.  In my heart of hearts, I want the Bulls to remain in control and buy the dip, but I won’t risk my money on hope or guesses.  I will need to see proof, and that may take a little time to develop.  Twenty-seven years experience has taught me that there is no need to rush.  If I can control my emotions, wait and watch, I get better trades, and my win/loss ratio can continue to average around 70%.  You don’t have to trade every day to be a successful full-time trader!

On the Calendar

Tuesdays Economic Calander is another very light one.  At 9:00 Am Eastern is the FHFA House Price Index followed by the Richmond Fed Manufacturing Index at 10:00.  Both are really not-consequential reports having little chance of moving the market.  Rounding out the calendar day is a 4-week bond auction.

Over 60 companies grace the Earnings Calendar today with their quarterly results.  INTU, MOMO, and TOL, CRM and AABA may be extra notable for some of the members. Make sure you are checking the reporting date of all companies that affect your portfolio.

Action Plan

As I was out playing with telescopes and photographing the eclipse yesterday, I was not following along intraday as normal.  Although the DIA failed the 50-day average during the day making a new low the Bull managed to stage enough of a rally to recover price and close above this important support level.  The SPY, QQQ’s and the IWM all staged a late day rallies but remain under key moving averages.  I suspect the market will bounce and the current futures are pointing to a slight gap up.  However, other than the DIA the indexes are in a precarious position.  Any rally back toward resistance levels could produce failure patterns continuing the current downtrends.

As you all know, I try to avoid prediction of any kind.  I simply want to follow price when evidence of direction supported by actual buyers or sellers.  As a result, I will likely give the market 20 to 30 minutes to digest the morning rush before making any trading decisions today.  Of course, the top order of business is to manage current positions protecting profits and trading capital.

Trade Wisely,

Doug