Earnings could push us to new market highs But, will the weekend effect get in the way?

There is no question that the earnings from AMZN and GOOG will inspire the Bulls.  It is possible we could see all time now highs in the markets today.  However, with tensions rising in North Korea and Congress still dragging their feet on a budget extension could derail that plan.  I think we have to approach today with the idea that anything is possible.

If the Congress would get out of the way and do their job, I think the market would be free to rally.  Congressional tradition suggests they will play games all day letting the markets close in limbo.  Then to prove to us just how hard they work they will work late into the night.  That tosses huge questions on how Monday morning will be affected forcing the Bulls to keep their hand in their pockets today.

If by some miracle Congress does get something done before the market close we could see some wild price action after the news.  Trying to predict what will happen is a fool’s errand, so the best we can do is focus on the price action and make wise business decisions with the information at hand.

On the Calendar

We kick off Friday with a reading of the GDP number at 8:30 AM Eastern.  The GDP is a market moving number.  Also at 8:30 we get the Employment Cost Index followed by the Chicago PMI at 9:45 and the Consumer Sentiment at 10:00.  Clearly, these are all important numbers, but unless there issue a big surprise, it’s unlikely they will have much of an effect.  On the Earnings Calendar, we have 97 companies reporting today.

Action Plan

Friday is normally a profit taking day for me but today may be a little different.  All the earnings after the close yesterday have the potential of creating some pretty good buy signals today.  I want to be careful not to overload ahead of the weekend and may consider smaller than normal positions.  We have to keep in mind that tensions are growing concerning North Korea.  Anything is possible so keep that in mind as you prepare for the weekend.

Trade Wisely,

Doug