Russell, New Record High!

Yesterday turned out to be very productive for current positions.  The Russell poked a finger in the eye of resistance breaking through to a new record high.  The SPY and QQQ had solid moves higher with the DIA lagging in more of a consolidation pattern.  Currently, the Futures are pointing to a flat to slightly lower open however that could quickly change with earnings reports and economic news.  Today is the Speaker Ryan’s imposed deadline on the North American Trade Agreement and the trade negotiations with China begin as well.

Although IWM set a new record high yesterday keep in mind the SPY, QQQ, and DIA remain under significant resistance levels.  As a result, we must watch for the possibility of reversal at or near resistance and prepare plans if the unfortunate event occurs.  Business requires planning and trading is a business like any other!

On the Calendar

Market-movers on today’s Economic Calendar are the Weekly Jobless Claims and the Philly Fed Survey both of which come out at before the bell at 8:30 AM Eastern.  Consensus estimates suggest Jobless Claims will increase to 215k vs. the last reading at 211k but continue to demonstrate a strong labor demand.  The Philly Fed Survey forecast is 21.0 for May vs. the April reading of 23.4 as it pulls back from a nearly 50-year record high.  The reports not expected to move the market, Consumer Comfort, E-Commerce Sales, Leading Indicators, Natural Gas report, 8-bond related events, Fed Balance Sheet, Money Supply and two Fed Speakers.

On the Earnings Calendar, WMT reports before the bell along with 40 other companies throughout the day.

Action Plan

As your planning for the day keep in mind that the SPY, QQQ, and DIA are still below significant resistance levels.  As they approach test these key levels, it’s important to stay focused on the price action.  No matter how much we want prices to break through resistance, we have to prepare for the possibility they could fail.  I think a consolidation in this area would be my personal preference to build energy one way or the other.  As you know what we want and what we get are two very different things, and as of now, Mr. Market has not called to ask me what I prefer.  Consequently, I have to remain unbiased and have a plan for all possibilities.

Trade Wisely,

Doug