As the Labor Day weekend approaches the bulls look to extend yesterday’s rally with yet another substantial gap up open.  The all or nothing emotional price action has become tiring and honestly ridiculous considering tariffs remain in place and negotiations have yet to begin.  Having said that, it’s still nice to have a relief rally!  The question now is, can it hold as traders head out for the long weekend, hurricane Dorian targets the Florida coast and growing uncertainty of earnings growth?

Asian markets closed the week mixed but mostly higher as Beijing signals a desire to come back to the negotiations table.  European markets see green across the board on the easing of trade war rhetoric even as a no-deal Brexit threat grows.  The US Futures are in celebration mode this morning pointing to another substantial gap higher of more than 100 Dow points.  Be careful not to chase the open and don’t be surprised if the price action quickly runs out of steam and become light and choppy as traders head out to enjoy the long weekend.

On the Calendar

On the Friday Earnings Calendar we have just 14 companies reporting with BIG, CPB, and JKS among the notable.

Action Plan

Yesterday’s big rally is getting a big gap follow-through this morning extending the indexes into a short-term overbought condition according to T2122.  With the Labor Day weekend just around the corner, volumes could quickly decline as traders take off early for the extended weekend vacation.  Market emotions are high that a deal will be forthcoming, but a lot can happen over a 3-day weekend so plan your holdings accordingly.

According to forecasts, hurricane Dorian is likely to make landfall on the Flordia Coast Monday.  For all our Flordia friends I wish you safety as you make preparations to protect your homes and property. It now appears the storm will slow down and strengthen so, and please don’t brave the storm, get yourselves to safety and wait it out.  Dangerous storms such as this can have also have substantial market impacts that affect price action so prepare for more volatility come Tuesday morning.

Trade Wisely,

Doug