Choppy Week

I don’t know about you, but I will be happy to see this choppy, week come to an end.  I have spent the better part of the last 2-weeks talking about caution and avoidance of the choppy price action.  That caution has proved to have been correct, but just like everyone else I’m tired of the chop and hope next will be better as traders return from extended holiday vacations.

However, I plan to remain cautious into the weekend with the uncertainty of trade war rhetoric ramping up.  As of yesterday, every one of our positions held unrealized gains so I will be far more focus on taking profits today than I will be about adding risk ahead of the weekend.  With 3^rd quarter earnings season kicking off next week the market will at least have something else other than political wrangling from which to draw inspiration.

On the Calendar

We kick off the Economic Calendar this Friday with two potentially market-moving the reports at 8:30 AM Eastern.  First, consensus expects the Employment Situation report to show new job growth of 190,000 with the unemployment rate down to 3.8 percent.  Hourly earnings are also moving up in June with consensus suggesting a 0.3 increase and a year-on-year rate up to 2.8 percent.  The International Trade deficit is expected to narrow sharply to $43.7 with a 2.1 percent increase for exports while the imports only gained 0.2 percent.  After that, we have the EIA Natural Gas Report @ 10:30 AM, the Baker-Hughes Rig Count @ 1:00 PM and Treasury STRIPS @ 3:00 PM.

A very light day on the Earnings Calendar with only three companies reporting.  Keep in mind is the calm before the storm of 3^rd quarter earnings which officially kicks off next week when some of the big banks report.

Action Plan

I plan to wrap up the end of this odd trading week much the same as it began with caution.  Yesterday day ending on a positive note but whipped several times on anemic volume.  Currently, Futures are pointing to a negative open as the market reacts to the tariff battle.  Keep in mind with the Employment Situation number which comes out before the open that could quickly change.

Next Friday the 3^rd quarter earnings season will get underway giving the market more to think about other than political uncertainty.  Perhaps we will finally exit this choppy consolidation and pick a direction next week.  Volume should improve next week as traders return from their extended holiday vacations and price action should become more deliberate without all the whipsaws.  Trade war rhetoric could ramp up this weekend as both the US and China lob threats back an forth.  Plan your risk into the weekend carefully.

Trade Wisely,

Doug