Fearless market gaps to new record levels.

Price action is showing amazing confidence as the fearless market gapped up and ran to new record levels yesterday.  I must admit at these levels leaving gaps behind gives me pause, but the overall direction of the market is clear.  The Bulls are in control, so I will continue to trade with the trend until price action provides clues to the contrary.   Naturally, we all have a bias but it is the successful trader that sets it aside allowing the market to work for them rather than fighting it.  We all want to be right but would you rather be right or profitable?

On the Calendar

Another light day on the Economic Calendar.  There are 3 Fed Speakers as some bond auctions but no economic reports of note.  The Earnings Calendar shows 21 companies reporting today including a few important name like ADBE, FDX, RHT, and LEN.  FDX can move the market because many feel it is an indicator pointing out the health of the consumer.  The report from FDX will not occur until after the market closes today.

Action Plan

The DIA displayed amazing strength yesterday gapping up and continuing up to new record highs once again.  Also, the SPY dramatically improved, leaving a gap behind and managing a new closing high.  The QQQ’s and the IWM lagged behind but managed to close near the high of the day.  Fear once again is extremely low and only about 1 ½ points from new record lows.

There is no question that the Bulls are in control although volumes were slightly light yesterday.  It is as if the market is melting up without concern.  I have to admit that makes me a little nervous but all I have to do is to continue to trade with the direction of the overall market.  The trend is up, so I will continue looking for long positions as long as that continues to be true.  However, at these price levels, it is important not to become complacent.  So I will be very focused on price action and prepared if clues of weakness start so show.  Although I will be trading long, I will also increase my aggression when it comes to capturing gains.  Swift reversals can occur around market highs.  I will not allow winning trades to become losers.

Trade Wisely,

Doug