Defending Support

Although the price action yesterday was challenged by a nasty whipsaw the Bulls did a good job of defending support levels.  This morning it would seem the Bulls have gathered some reinforcements and are looking to challenge the January high in the SPY.  The SPY has been pounding on that door all week, and just maybe the Bulls can break it down today.

As you know, I like going to the bank on Friday.  The expected gap up may be just the reason I need to take some profits and reduce my weekend risk.  Stay focused on price action because market highs can produce head fakes and whipsaws.  A morning gap into resistance is a perfect setup for both so set aside your bias and be ready to react if that happens to occur.  Personally, my hope is for a breakout and run higher.  Unfortunately, I can’t pay my bills with hope.

On the Calendar

We kick off this Friday on the Economic Calendar at 8:30 AM with the Durable Good Orders.  Consensus suggests an increase of 0.5 percent with core capital goods also up 0.5 percent.  After that, we have a Fed Speaker @ 10:00 AM and the Baker-Hughes Rig Count at 1:00 PM.  Also, keep in mind there will likely be a slew of news reports from the Jackson Hole Symposium.

On the Earnings Calendar, we have a very light day with under 20 earnings reports.  Most notable would be FL, BKE, HIBB and UBNT all reporting before the bell today.

Action Plan

After a day of choppy price action and nasty whipsaw, the Bulls seemed to gather some energy overnight.  With apparently no concern for rising tariffs Asian market closed mostly higher.  European markets are higher across the board and look to finish this week on a positive note.  Consequently, the US futures are pointing to a bullish open with the Dow expected to gap more than 50 points higher.

Perhaps today is the day when the SPY breaks out to and new record high joining IWM.  That’s my hope, however, once again we have to watch carefully for the possibility of head fakes and whipsaws.  Remember volumes continue to be low, and the news will be bursting with reports out of Jackson Hole.  Remember today is a great day to put some profits in your account and a gap up morning may be just what the doctor ordered to make that possible.  Have an awesome weekend.

Trade Wisely,

Doug