As we bid farewell to 2018, reflecting on the last 12 months of trading, it was overall a great year albeit quite challenging to navigate.  As we enter 2019, the market is showing its first clues of bottoming but still faces significant uncertainty this will likely continue to challenge traders for the next several weeks to months.

But for those disciplined to price action, I have no doubt 2019 will provide us with great opportunities to profit.  Be careful with this mornings gap up and watch for the possibility of a pop and drop.  We need to see buyers coming in to support this gap and willing to challenge resistance levels.  That may be a lot to ask with volumes likely to decline quickly today as traders set their sights on 2019 celebrations.  I wish you all a Happy New Year and a prosperous 2019!

On the Calendar

On the Earnings Calendar, we have 18 companies reporting this New Year’s Eve, but none of them are particularly notable. 

Action Plan

The Futures are pointing to a big gap up this morning after the President stated he had a good conversation with the Chinese President Xi about trade.  As I write this the Dow Futures are suggesting a gap up of more than 200 points.  As great as it is to see bullishness in this market I must say it seems highly suspect and would suggest caution on this last day of trading for 2018.  Shortly after the Presidents comments, a report suggested that the two sides are still very far apart on key elements of the agreement.  Another clue is that Asain markets closed mixed with the Nikkei lower 62 points on the same news.  European markets are also not impressed and currently mixed but mostly falt on the day.

After the morning rush, expect the volumes to drop off quickly as traders turn there focus toward celebrating the new New Year.  Keep in mind the Federal Government is still shut down, and the new Congress will begin to whip up market emotions later this week.  If buyers support the gap after the open keep an eye on price resistance levels and watch for the possibility of a pop and drop.  I wish you all a Very Happy New Year!

Trade Wisely,

Doug