The Bulls are firmly in control.

The Bulls are firmly in control.

The Bulls are firmly in control.The Bulls are firmly in control and the Bears are either running for their lives or have gone into hibernation.  The news of the 23K Dow print spread like wild fire yesterday afternoon.  The President even chimed in on the subject as he was pushing for the tax reform legislation.  Those sitting out are really feeling the pressure of missing out right now and are likely to charge in pushing us even higher.  It may seem completely irrational and nonsensical to you but for goodness sake don’t try and fight this move.  To do so would be akin to trying hold back the tide.  Also don’t become complacent or chaise.  Focus on price and have a plan!

On the Calendar

We begin the hump day Economic Calendar today with Housing Starts at 8:30 AM Eastern.  The September consensus is 1.170 million annualized starts and 1.238 million permits which constitutes a slight slowing in both metrics.  At 10:30 AM the EIA Petroleum Status report will be released.  I think most are expecting to see demand growth and supplies continuing to decline slowly.  Then at 2:00 PM is the Beige Book and the Treasury Budget which come out about 2 weeks prior to the next FOMC meeting.  It’s unlikely they will move the market.

The number of reports continue to shuffle around a bit but today the Economic Calendar has about 80 companies reporting today.  AXP, AA, EBAY, UAL, UTI, KMI are just some of the notable reports today.  Please make sure to check reporting dates as part of your daily preparation.

Action Plan

Although I was sitting in a doctor’s office I caught the close on my phone and was not surprised to see new record highs once again.  For a moment the Bulls push the Dow over 23,000.  On my drive 2-hour home I was flipping through the radio stations and heard at least 3 reports on the 23k print and even a sound bite from the President.  I thought to myself the “Fear of Missing Out”, crowd will likely gap the market higher tomorrow.  As of now, that thought seems appears correct, with the Dow futures pointing to more than a 50-point gap up.

Don’t chaise but stay with the trend.  The bulls are firmly in control and as long earnings report continue to be mostly positive higher prices are likely.  Remember to take some profit along the way to relieve pressure on trades.

Trade Wisely,

Doug

The Trend is Strong

The Trend is Strong

The Trend is StrongJust when you think the market is about to take a breath and rest the Bulls step up and drive us even higher.  Once again new record highs ring out inspiring more and more buyers to enter the market.  With earnings session underway anything is possible, but so far they have been coming in strong that could continue fueling the Bulls to push even higher. The trend is strong and clearly very bullish.

Don’t try and fight or just might find yourself under the hooves of charging bulls.  There was a time in my trading career when I believed I had gained so much knowledge and skill I could predict the market.  I would find myself often trying to fight the market trend allowing my bias to control my decisions.  Long story short, my accounts suffered tremendous damage as a result.  Whether it seems rational or not work within the trend as long as it continues.

On the Calendar

The Economic Calendar starts off with Import and Export Prices at 8:30 AM Eastern.  Conseensus sees a 0.5% gain vs. 0.5% percent last month.  At 9:15 AM is the most important number of the day, Industrial Production.  Forestasters are calling for a 0.4% September gain in production numbers.  Then at 10:0 AM the Housing Market Index is expected to hold unchanged at 64.  Then at 2:00 PM is the Treasury Budget wihich is calling for a 3.0 billion surplus.  Then at 4:00 PM is the Treasury International Capital which tracks financial instrments in and our of the the country.

The Earnings Calendar has bumped up to more than 50 companies expected to report results today.  JNJ, IBM, GS, PGR, CREE, HOG, MS are some of the notables reporting.  NFLX reported good results after the close yesterday.

Action Plan

I sometimes feel a little like Bull Murray in “Goundhog Day,” when everyday I repeat the market has once again set new records.  As is case for yesterday with the DIA, SPY and QQQ’s all closing at new record highs once again.  The IWM lagged behind choosing instead to remain in a tight consolidation range.  The VIX continues to hover just above record lows and hanging on to its sub ten reading.

Although this run seems to be a bit long in the tooth, the Bears seem to be no where in sight.  At this time there also seems to be no Fear of their return at the moment.  Common sense keeps telling me this can’t go on forever.  However betting against or standing aside in a wildly bullish market such as this would be a mistake.  If earnings begin to roll in showing that most companies can support these lofty price levels, then the trend up could continue much longer.  Set aside your bias and trade the charts in front of your with a focus on price action.

Trade Wisely,

Doug

The Bulls maintain market control.

The Bulls maintain market control.

The Bulls maintain market control.Another weekend passes without a major incident effecting the market.  The Senate takes up tax reform, and earnings session begins to heat up this week.  Both could provide significant price action as well as increased volatility.  The futures are pointing to a slightly higher open today, as the Bulls maintain market control.

The Yellen speech on Sunday seemed to raise the likelihood of an interest rate increase in December.  Normally that is seen as a bearish signal, but lets keep some perspective and realize that would only bring the rate up to 1.5%.  If the market can’t handle a 1.5% interest rate, we will have far bigger problems in the economy.

On the Calendar

We begin a new week on the the Economic Calendar with the Empire State Mfg. Survey at 8:30 AM Eastern.  New orders are at and 8-year highs while delivery delay are at record levels.  This one of the first signals that an economy may start overheating.  Forecasters see the October number coming in at 20.5 vs. 25.2 last month.  The Treasury Budget is a 2:00 PM today but not expected to move the market.  There is on Fed Speaker late this evening and other than that just a few bond auction to round out the calendar.

This week the Earnings Calendar begins to ramp up with potential market moving reports.  It’s every traders responsibility to check reporting dates of the stock you own or are thing about buying.  Failure to do so can result in a very painful lession.  There are 27 reports today with the most notable report coming from NFLX after the bell.  The first of the so called FANG stocks could certanially have an overall market effect.  Time to prepare for higher volitality.

Action Plan

The Bulls continue to show incredible resielence, and there seems to be no fear of profit taking or retracement at the moment.  It will be interesting to see how stocks respond as earnings report begin to roll out.  Will earnings support these price levels?  Analysts say yes with an 11% growth expected overall this year.  Only time will tell.

Earnings Session normally kicks up the volitality.  Large market gaps ups or gap down open become much more likely so plan your trades accordingly.  As of now, the overall market trend continues to be up so I will continue looking for long trades to move with the trend.  The VIX does give me a little pause with it showing so much complaicency which should keep us focused on price action for clues of change.  At times like this, it’s important to trade what you see in the chart.  It’s so easy to missout on nice moves if you get caught up in your own pearsonal bias of what you believe the market should or should not be doing.  Always remeember that the market can remain irrational much longer that you stay liquid trying to fight it.

Trade Wisely,

Doug

Should I stay or should I go?

Should I stay or should I go?

Should I stay or should I go?An old song lyric seems to describe my thoughts this morning.  “Should I stay or should I go,” by The Clash.  As most of you know, I consider Friday to be Profit Day as we head into the uncertainty of a weekend.  Even though we saw a tiny bit of profit taking yesterday in the overall market, our current trades mostly managed to move up.  Yes, the weekend is uncertain, but as of now, the overall market is still very strong with the future pointing to a higher open.  So what’s a guy to do?  Focus on price action and let it lead the way!  If I see the bears stepping in, I may begin to trim risk and put some gains in the bank.  If the bulls remain strong, I may lean toward letting them ride because of the comfortable gains we currently hold.  Of course if your nervous or would sleep better by reducing some risk than by all means do so!  You can’t go broke taking a profit, and you can always reenter on Monday.  What ever you decide focus on price and remember Price is King!

On the Calendar

There’s no rest for the weary on this Friday’s Economic Calendar having the most important reports of the week.  It all begins before the market opens at 8:30 AM Eastern with the Consumer Price Index followed directly by Retail Sales numbers.  Forecasters see a 0.2% in the core number and 0.6% increase in energy.  The year-on-year number is expected to rise, to 2.3%.  Hurricane replacement sales and higher gasoline prices are expected to bloat the Retail Sales number today.  Consensus see’s a rare 1.8% as a result.  Of lesser importance, Business Inventories and Consumer Sentiment are both at 10:00 AM followed by the Treasury Budget at 2:00 PM.  We have 3 Fed Speakers today, and Janet Yellen speaks on Sunday.

On the Earnings Calendar, we have 20 companies expected to report today.  Especially notable will be BAC and WFC which both report before the bell.  PNC and JBHT also report before the market opens today.

Action Plan

Yesterday proved to be another record high intraday on the DIA, SPY, and QQQ’s but it was unable to hold on to that level into the close.  Although some selling occurred, it was very light and choppy.  As I write this, the Futures are pointing to a slightly higher open.  BAC has already reported beating estimates by 3 cents a share.

Because it Friday I will be focused on profits but because I’m pretty comfortable with the current positions a hold over the weekend is possible.  Of course, price action, as always will be the key decision maker.

Trade Wisely,

Doug

The 48th Dow record this year.

The 48th Dow record this year.

The 48th Dow record this yearIn my 27 plus years as a trader, I have witnessed many extraordinary market events.  However, I have to say that this year is one of the most amazing.  According to the news, President Trump is the most hated president in history yet since his election the market continues to leap higher with confidence.  Yesterday marked the 48th Dow record this year, and the other indexes have followed setting record after record.

As earnings season begins, it now falls to the companies to prove their results can support these high prices.  Personally, I think they will.  Market analysts expect to see 11% growth in company revenues this year.  What’s really surprising is they expect another 11% growth next year as well.  If that actually comes to pass, then this trend could easily keep going up for the foreseeable future.  As I said before, Amazing!

On the Calendar

We kick off the Thursday Economic Calendar at 8:30 AM Eastern with the weekly Jobless Claims followed directly by the PPI-FD report.  Consensus has Jobless claims easing slightly from 260k to 252k this week, but impacts from Puerto Rico are still a wild card.  The Sept. PPI consensus expects a gain of 0.4% overall reading.  At 11:00 AM we get the latest reading from the EIA Petroleum Status Report.  Most are continuing to expect rising demands to diminish supplies.  We have 3 Fed Speakers and several non-market moving reports today with the Treasury Budget at 2:00 PM to round out the day.

The 4th Quarter Earnings Season officially kicks off today with reports from C and JPM before the market opens.  Earnings reports will ramp up sharply next week so make sure your checking before placing new trades.

Action Plan

The DIA, SPY, and QQQ’s all closed at new record highs yesterday despite very slow and choppy price action.  The market had little to no reaction to the FOMC minutes yesterday which was quite odd.  That would suggest all the pressure now falls to the big bank reports today and tomorrow.  In a rising rate environment, one would expect the banks to report well, but as you know, anything is possible.

Futures are currently suggesting a flat to slightly lower open as I write this but as the earnings reports come out that could certainly change quickly.  As we head into the weekend, I am thinking some profits into the market strength.  I will also look for new long trade entries to take advantage of the uptrend.  As always I will avoid chasing and favor stocks that are at or near price support levels.

Trade Wisely,

Doug

The Calm Before the Storm

The Calm Before the Storm

The Calm Before the StormAlthough bullish, so far this week the price action has been choppy.  Many individual stocks performed well, but overall the market was simply marking time as it waits for the FOMC minutes and the kick off to earnings season.  Think of this as the calm before the storm. As the drama earnings season unfolds, we can expect to see greater premarket futures activity around the reports as the market first speculates and then reacts to the new data.  New and inexperienced traders often find earnings to be very challenging due to the big price swings they can create.

My suggestion is to focus on the price action, support levels, resistance levels and trend of the overall market.  Currently, the trend is up.  Stay the course and trade with the trend but avoid speculating on the individual stock earnings reports.  Also, I suggest turning off CNBC and all the emotion they stir up around events.  Drama is great for their ratings but not so much for your trading accounts.

On the Calendar

The Economic Calendar today is dominated by Fed.  We have a Fed Speaker at 7:17 AM and another at 2:40 PM.  However, it’s the FOMC Minutes releasing at 2:00 PM that will garner the most focus.  The market will be looking for clues not only to future interest rate increases but also details of their balance sheet unwinding plans.  At 10:00 AM  is the JOLTS report which tracks monthly changes in job openings.  The consensus is expecting this number to remain very strong at 6.160 million.

I’m showing just over 20 events on the Earnings Calendar today.  Before the market open we will hear from BLK, DAL, and FAST.  Keep in mind this is the calm before the storm on the earnings front.  Thursday we will hear from C & JPM with BAC and WFC on deck for Friday to kick off earnings season.  Make sure you are doing your due diligence on every trade because, and earnings surprise can be very costly!

Action Plan

Yesterday the morning pop was once again met with whipsaw in price action then followed by lots of chop the rest of the day.  The managed to close at yet another record high while the SPY, QQQ, and IWM chose to rest in a consolidating range.  Futures are currently pointing to flat to slightly lower open, but that could change because I’m writing this 3 hours before the open.

Don’t be surprised to see very light volumes and choppy price action until the release of the FOMC minutes at 2:00 PM.  Directly after the release, we could see some fast intraday price swings in reaction.  After that drama subsides, the market focus will turn directly to the big bank earnings which will begin before the market opens on Thursday.  As you know, earnings reports are unpredictable, and the big bank reports are normally market moving events so plan your trading accordingly.

Trade Wisely,

Doug

The Bulls take a healthy rest.

The Bulls take a healthy rest.

The Bulls take a healthy rest.

The Bulls take a healthy restAfter a strong and extended upward run the Bulls take a healthy rest.  As much as we all like to see the market power higher a nice rest to develop a new level of price support is productive.  If the Bulls maintain control while building support, more buyers will be attracted, and confidence in the trend will expand.  Having taken profits into the rally, we are in very comfortable position without all the pressure.  Our profits are safe while those that allow greed to control their trading likely saw their gains diminish yesterday.  We are now free to find new low-risk entries.

 

On the Calendar

Another light day on Economic Calendar with the NFIB Small Business Index at 6:00 AM Eastern.  There is a Fed Speaker at 10:00 AM and one at 8:00 PM today as well as several bond auctions to round out the day.

On the Earnings Calendar, there are a few companies reporting, but I don’t see any market movers.  Keep in mind that Earnings Season will officially kick off on Thursday with reports from C and JPM.  Make sure to check all position you hold and those you are considering buying for earnings dates.  Fail to do so, and the consequences can be significant.

 Action Plan

Yesterday the market took a well-deserved rest pulling back slightly with choppy price action.  With the banks back open today we should see some better price action, but don’t be surprised if it remains choppy as we wait for the Fed Minutes.  Another reason the market could continue to pause is the kick off to Earnings Season beginning on Thursday.  Will the Bulls or the Bears be inspired as results roll out?

The overall up-trend continues strong, so I will continue looking for long positions.  Futures are once again pushing higher with the Dow suggesting it will open at or near record highs.  I would be cautious of chasing the opening pop as it could produce another whipsaw much like what happened yesterday.  I will give it a good 15 to 30 minutes to see if real buyers step in after the professional pump.

Trade Wisely,

Doug

Bulls continue to show strength.

Bulls continue to show strength.

Bulls continue to show strength.

Bulls continue to show strength.After such an impressive run higher, the Bulls continue to show strength this morning.  The Dow futures are pointing to a new record high, and the VIX hovers near historic lows.  Is there really no fear in the market or are we looking at mass complacency?  Your guess is as good as mine.  It is logical to think a pullback could begin at any time after such a strong bullish move.  However, it’s a mistake to try an predict a top.

As I was coming up as a trader, this is a mistake that I would repeat over and over.  I would predict that the market was up so much it absolutely had to come back down.  Sadly that proved to be a very costly mistake for me.  At times I would stand aside anticipating a pullback only the watch the market continues moving higher and leaving behind.  I would often miss out on the biggest bull run of the year.  Even worse I would at times get short thinking the Bears had to take over soon only to be run over by the bulls.

When we look at the charts, it’s logical to think a pullback is likely and we should prepare.  However, if we put our bias aside, we see a chart showing no evidence of a pullback as of now.  I am not suggesting we should throw caution to the wind and buy with both hands if fact I have been taking profits into the strength.  I am only trying to suggest that you see the chart as it is not as you believe it should be!  Emotion can easily trump logic making a run last much longer than anyone expects.

On the Calendar

About all that’s on the Economic Calendar is that today is Columbus Day.  As a result, banks and bond markets closed in observance of the national holiday.

On the Earnings Calendar, there are 14 companies reporting today, but I don’t see anything particularly noteworthy or market moving.

Action Plan

The DIA, SPY, IWM, and QQQ’s decided to a little rest on Friday morning, but the Bulls had another plan’s for the afternoon lifting them off the intraday lows.  The QQQ’s managed a new record high close by the end of trading on Friday following through after it’s impressive breakout Thursday.  As of now, the futures are suggesting a bullish open today with the Dow possibly opening today’s trading at yet another record high.  Friday saw the VIX rise slightly after having reached a new closing low Thursday.

With the banks closed today it’s possible we could see a choppy light day after the morning rush.  There are a lot of good-looking charts to choose from but make sure that you’re not chasing.  I want to continue to trade long with this very bullish trend however we should not be surprised to see profit taking begin at any time.  Plan accordingly.

Trade Wisely,

Doug

Can this Bull Run continue?

Can this Bull Run continue?

Can this Bull Run continue?As this week trading week comes to a close, the majority of traders have just one question on their mind.  Can this Bull Run continue?  Common sense would tell us the odds of a pullback after seven straight days of new records is pretty high.  However, the strength of the run ahead of earnings season already defies logic.  I say that only to remind you that predicting what a market may or may not do is an exercise in futility.  Anything is possible!  The best we can do as traders is have a plan with a set of rules to manage our emotions.  As a result of my rules made it necessary for me to lighten up my risk to the market by taking some profits.  Logic says a pullback is likely, but the price action has no hint of a pullback as of now.  If there are more buyer than sellers, then the market could still move higher!  What matters is that you are managing you and remembering that this is a business.

On the Calendar

On the Economic Calendar today we have the Mr. Big report at 8:30 AM with the Employment Situation.  As this report will incorporate the effect of the hurricanes, the consensus estimates are all over the place.  Essentially the best they can do is guess.  For example, the nonfarm payroll expects 100K, but the consensus ranges between Zero and 140K.  There are two reports unlikely to move the market, Wholesale trade at 10:00 AM and Consumer Credit at 3:00 PM.  There are 5 Fed Speakers on the calendar today.

On the Earnings Calendar, there are only eight companies reporting today.  I do not see any earnings reports that are particularly notable.

Action Plan

After the news reported a successful vote in Congress allowing the Tax Plan Process to move forward, the Bulls came out in force to express their support.  As I mentioned above, I reduced some of my risk to the market closing part or all of a few positions to capture gains ahead of the weekend.  The VIX made a new closing low yesterday below a 9-handle.  Truly amazing!  I think it would be wise to guard yourself against complacency.

Once again I will be more focused on taking profits today, but I will not rule out the possibility of new trades.

Trade Wisely,

Doug

Unable to find profit takers.

Unable to find profit takers.

Unable to find profit takersAlthough the market appears to be quite extended, its unable to find profit takers just yet.  The VIX continues to dance near historic lows but as of yet unable to make a run for a new low print.  Perhaps the market is waiting on all the Fed speak today or more likely focused on the Employment Situation number that comes out Friday morning.  None the less I will continue to be very focused on price action and prepared to take profits ahead of the weekend if weakness shows itself.  With an extended market and the weekend near, I will need to uncover a nearly perfect trade setup for me to buy additional risk.

On the Calendar

The Economic Calendar events of interest begin at 8:30 AM Eastern.  International Trade forecasters are calling for a narrowing of the trade gap this month due to the hurricane effect.  August is expected to come in at $42.5 vs. July’s 43.7 reading.  A narrowing trade gap should be of benefit to the 3rd quarter GDP.  Also at 8:30 AM is the weekly joblesss claims and is expected to come in with a reading of 265K vs. 272k last week.  There are 4 Fed Speakers on the calendar today with three of them speaking in rapid succession beginning at 9:15 AM.  At 10:00 is Factory Orders which is expected to rise 1% in August vs. the 3.3% decline in July.

On the Earnings Calendar, there are only 14 companies set to report.  Of note are reports STZ before the open and COST after the close today.

Action Plan

The incredible strength of the Bulls kept profit taking in check even though it’s quite extended.  The promise of a tax plan continues to inspire investment no matter the price or valuation.  Also, keep in mind that earnings season will begin soon and there seems to be tremendous optimism of strong reports.

With the market continuing to show enough strength to hold up I maintained all the current positions.  As a result, I again will focus on price action and prepare to take some profits before the weekend if necessary.  As we wait for the big employment number Friday, it would not be a surprise to see choppy light volume action again today.

Trade Wisely,

Doug