The Bulls Are Pounding On The Door Of Resistance, Will It Open?
The Bulls were able to win the battle yesterday in 3 of 4 indexes and as a result, are pounding on the door of resistance. The question that still needs to be answered is, will it open? As I mentioned yesterday, this is a battleground, and it seems like the first round was won by the Bulls. Most noteworthy is the NASDAQ which is very close to making new all time highs. For new or inexperienced traders this is a great chance to study possible topping patterns. Price action resistance is always of critical importance and therefore must be given respect as you plan the day ahead.
Events to Consider
I think the GDP number at 8:30 AM Eastern will be critical today. A good number may be all that’s needed to inspire the bulls to stampede through resistance. On the other hand, a bad number could have the opposite effect allowing the bears to feed. Also on the Economic Calendar, today is the Weekly Jobless Claims and a slew of Fed speakers. The Earnings Calendar has 92 companies reporting, and therefore we must continue to stay on our toes to protect our capital.
Plan of Action
My plan is to wait for the reaction to the GDP number because it will likely influence today’s open. Although resistance will challenge any upside move, another consideration will be the possible window dressing effect. I remain cautiously bullish but will be ruthless in the protection of my profits due to the power of price resistance. Failure patterns here are not to be trifled with so in conclusion I recommend we remain very cautious. New and inexperienced traders are highly encouraged to stand aside while this battle continues.
I wish you all a productive and profitable day.
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
The Danger Zone Battle Begins, It’s Time To Raise Your Caution Level
The price of the major indexes finished the day pressed directly against the Danger Zone of price resistance. The feeding grounds of the Bears! If a reversal of the market is to occur it would be right in this area. We should be watchful of the Bears reestablishing dominance. With the end of quarter window dressing possible, this could be an interesting battle to watch from a distance. However, joining the battle in the danger zone could prove to be very damaging to your account. Futures were slightly positive overnight but once again have moved to the downside this morning. For new stock and options traders, this is a battle you should consider sitting out until there is evidence of victory has been established. Keep in mind this fight could take a couple of days with consolidation as a result.
Events To Consider
On the Economic Calendar, we have pending Home Sales and the all important Petroleum Status Report at 10 AM Eastern and 10:30 AM Eastern respectively. The Earning Calendar shows 63 companies reporting today. Stay on your toes around these events and reports. The last thing we want to do is get caught, unaware. As the CEO of our trading business’s, the responsibility lies directly on our shoulders.
My Plan Of Action
As for me, I will be very slow to move on new positions this morning until I see some direction. However, I will quickly as possible protect capital if the Bears gain the upper hand and failure (reversal) price action begins to win the day. Let’s hope the end of quarter window dressing wins the day and as a result, the bulls charge upward!
Have a fantastic day and keep your caution flags waving.
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
Danger Zone
Good Morning Traders.
After the significant drop in the morning, I was pleasantly surprised to see the Bulls pull off a very nice rally recovering nearly all of the move lower. The big question is can it follow through? Last night the futures were up about 30 points, but they are now suggesting a lower open of 20 to 30 points. We are truly in the danger zone so be very careful.
On the Economic Calendar this morning we have the International Trade goods number that has the potential to move the market at 8:30 eastern. At 9 AM we have Case-Shiller report, and then 10 AM the consumer confidence number, both of which would have to be a pretty big surprise to move the market. Keep in mind; we have more Fed speakers today. On the earnings calendar, we have 78 companies reporting today.
My plan of action for today is to be very cautious. That was great to have the rally yesterday, but that rally stopped right at resistance levels. If the Bulls don’t step up and defend today, the Bears could regain direction and move use lower. I will likely sit on my hands until we have some price action clues established. I suggest extreme caution because we are in a very dangerous place where big moves are possible.
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
Good Morning!
The bears are hungry, and it looks like they plan to fed well today. The failure of Congress to pass a new healthcare bill is gaping the market sharply lower this morning. The selloff began in Asian markets last night and went all around the world. Quietly I was hoping why would pull off a last minute deal before today’s open but apparently they have given up at least for now.
The economic calendar events will not provide us any help today because all have are a few bond announcements and a couple of Fed speakers that still have something say after talking all last week. On the earnings front, we have 50 companies reporting today so stay on your toes.
The first order of business for me this morning is to manage the positions that I’m in. We have some very nice profits in RWO trades so let’s make sure we are taking care of that business first. Don’t act out of panic but clearly think through each position and respond as with a business frame of mind. We will now start looking for some bearish positions, but we must remember that the 1st quarter is coming to an end and the possibility of an end a window dressing rally is possible.
Have an awesome day!
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
The Bulls were able to win the battle yesterday in 3 of 4 indexes and as a result, are pounding on the door of resistance. The question that still needs to be answered is, will it open? As I mentioned yesterday, this is a battleground, and it seems like the first round was won by the Bulls. Most noteworthy is the NASDAQ which is very close to making new all time highs. For new or inexperienced traders this is a great chance to study possible topping patterns. Price action resistance is always of critical importance and therefore must be given respect as you plan the day ahead.
