Our government works in mysterious ways as two failed votes to reopen the government inspires confidence that a compromise may be forthcoming.  That hope is inspiring the bulls this morning with the US Futures suggesting a substantial gap up open.  Earnings, Durable Goods Orders, and New Hope Sales results may enhance the bullishness or temper that sentiment by the open but so far the bulls appear firmly in control.   

While the indexes were content to consolidate there was steady buying pressure showing up in a lot of stocks yesterday.  I personally found it very difficult not to overextend myself with so many great looking chart patterns and setups appearing.  As for now, this is a stock pickers market with a lot of good price action signals.  Unfortunately, we still have to hold our breath as we enter positions because all the government uncertainty could easily reverse the current sentiment in about half a heartbeat.  Keep that in mind as you consider the weekend ahead and the risk that can bring to your portfolio.

On the Calendar

Durable Goods Orders – Consensus – 8:30 AM Eastern

New Home Sales – Consensus – 10: AM Eastern

Baker-Hughes Rig Count – 1:00 PM ET

On the Earnings Calendar, we have 38 companies reporting.  Notable today: ABBV, APD, CL, DHI, LEA, NEE, SYF, & VOD.

Action Plan

While the indexes continued to consolidate yesterday, there was consistent buying pressure showing up in a significant number of stocks.  So many in fact it was difficult to stick to my plan and avoid becoming over-committed while still testing resistance in the indexes.  Both bills voted on yesterday to reopen the government failed, but that is now being viewed as a good thing because Senate leadership is finally trying to work out a compromise. 

Overnight Asian markets rallied despite the trade war jitters that continue to crop up every few days.  European markets are also bullish this morning helping the US Futures point a substantial gap up open of more than 150 points as a write this.  Of course Earnings and the two big economic reports could certainly change that before the open.  With the renewed hope that the government shutdown may soon consider your holdings carefully as we move into the weekend.  If the market does open with a nice gap up, I will likely bank some profits to reduce my weekend risk.  I wish you all a great day and a fantastic weekend!

Trade Wisely,

Doug