Impressive show of force.

The NASDAQ joined the Russell to compete for market leadership as the bulls make an impressive show of force yesterday with both indexes printing new record highs.  The SPY broke-out of consolidation while the DIA continues to lag behind although much strongly looking that just a few days ago when it was threatening failure of its 50-day average.

With trade uncertainty continuing to bubble to the surface traders should remain focused on price action.  As we have all experienced recently, reversals can occur with the speed of a single tweet or ill-timed political comment from either side of the negotiations.  Make sure to have a plan to protect profits and don’t allow greed to get in the way of taking them regularly.

On the Calendar

On the Economic Calendar for Tuesday is the Redbook at 8:55 AM and PMI Services at 9:45 AM Eastern.  There are to potential market-moving reports that both come out at 10:00 AM.  First, the ISM Non-Mfg Index where forecasters expect an increase of 1.2 points to 58.0.  Secondly, the JOLTS reports expects to remain very strong with a reading of 6,543 million open positions looking for qualified employees to fill them across the country.  At 11:30 AM we have a single bond auction to close the calendar day.

On the Earnings Calendar, we have 34 companies reporting earnings today.  It is important to make a habit of checking earnings dates for the companies you hold and those you are considering to purchase.

Action Plan

A beautifully bullish day in the market yesterday with the QQQ showing the strongest performance with a new record high close joining IWM with its record close.  The SPY broke above the price resistance of the recent consolidation and showing the energy to hold there through the close of the day.  The DIA also gaped up strongly but as of right now continues to lag behind and is back into the consolidation zone that started in early May.

As I write this, the futures are pointing to a modestly bullish open today.  New all-time highs in several tech companies yesterday including AAPL, AMZN, NVDA, and MSFT to name a few.  It would be really nice to see a follow-through bullishness today but keep a close eye on price action because profit takers could begin to step in at any time.  Keep in mind that political uncertainty continues to swirl in trade negotiations so have a plan in place to protect profits if trade jitters suddenly return.

Trade Wisely,

Doug