Let the good times roll!

Yesterday I mentioned that I would not be surprised to see the rest and even slip into consolidation.  The Bulls obviously had other plans, setting new record highs in all the major indexes.  It seemed as if the entire world suddenly became worried that they were missing out and started buying with both hands.  Let the good times roll!

Yesterday’s rally was not only strong it was very widespread with strength even in microcap stocks.  As we head into the weekend, let’s not forget to take some profits and be thankful for the relative ease at which they occurred.

On the Calendar

The Friday Economic Calendar begins with two very important reports.  At 8:30 AM eastern is the Consumer Price Index which forecaster see rising 0.1%, less food and energy the and the number grows to 0.2%.  Year-on-year, the consensus gain is expected at 2.1% with the core at 1.7%.  Also at 8:30 is the very important Retail Sales that includes holiday spending.  December Retail sales expect an increase of a strong 0.5% with ex-auto sales at 0.4%.  10:00 AM brings the Business Inventories which forecasters see a 0.3% build for November inventories.  We have two Fed speakers today, one at 12:30 PM and another at 4:15 PM to close the calendar week.

On the Earnings Calendar, we have 18 companies reporting with the big banks in focus today.  Blackrock already reported very strong results and had increased their assets under management to a whopping six-trillion!  We will also hear from PNC, JPM, and WFC today.

Action Plan

The bulls were out in force yesterday closing all four of the major averages at new record highs.  Also, surprising was the strength across almost all sectors.  And it would appear that the bulls want even more with the Dow Futures currently pointing to a gap up of nearly 100 points.  Go, Bulls go!

As normal I will be much more focused on taking profits as we head into the weekend than adding additional risk.  We should also keep our emotions in check because all the rampant enthusiasm in the market it would be easy to chase an over-trade.  If you do add new trades today make sure you are entering low-risk positions that are at or near price support levels.  Don’t become complacent and stay focused on price action clues.  It may seem as is the market will never again selloff right now, but we all know the day is coming so stay focused.

Trade Wisely,

Doug