Challenging Market

Indexes holding above key support near all-time highs with indecisive daily candles that included daily price whipsaws has made for a very challenging market.  The Bulls continue to control the trend, so a move higher is certainly a possibility.  Indecisive candle patterns near all-time market highs suggests we must prepare for a possibility of the Bears gaining a foothold.  Toss in all the weekend conversation of China tariffs and the retail traders will have to be ready for just about anything.

US Futures are only suggesting a modest loss at the open currently but remember its how buyers and sellers react after the open that matters.  Stay focused on price action and remember all the intraday whipsaws we experienced last week could easily continue this week.  Be careful not to over-trade and stay focused on price action.

On the Calendar

We have 3-bond Settlements to begin the Monday Economic Calendar day.  At 8:30 AM Eastern we have the only potential market-moving report, with the Empire State Mfg. Survey.  Consensus for September is 23.0 with a continued strong build in orders and a rising backlog.  After that we one Bill Announcement @ 11:00 AM and 2-Bill Auctions @ 11:30 AM to close the calendar day.

On the Earnings Calendar, we show 15 companies reporting and by far the most notable of the day happen after the morning close with FDX, and ORCL confesses quarterly results.

Action Plan

Over the weekend there was sure a lot of conversation about China Tariffs form the Whitehouse to the financial talking heads.  Even a former Obama staff member chimed in surprisingly in support of the renegotiations of the China trade deal.  Asian markets closed mixed but mostly lower overnight while European markets are currently modestly lower across the board.  Consequently, US Futures are also currently suggesting a modestly lower open.  The stage appears set, and we should prepare for the possibility that the Whitehouse could lower the boom at any time.

At the close of Friday, the bulls were still in control, and the uptrends in the indexes continue to hold above key support levels.  Unfortunitually the candle patterns left behind on Friday were very indecisive.  Combine that with the threat of tariffs and a slightly lower open and indexes near all-time market highs; traders need to set aside their bias and prepare for anything.  Continue to watch for head fakes, fast reversals, and whipsaws.

Trade Wisley,

Doug