The Overall Markets Continues to Downtrend.  Can the Employment Report Inspire the Bulls?

The markets slow, steady push upward yesterday showed that the Bulls were still in the fight.  Although they still had a lot of work to do, I began to invasion a break of the downtrend.  I had started to think that the Bulls just might have gained an edge over the Bears on the battlefield of resistance.  As the afternoon session progressed, the Bears seemed to regain the upper hand, particularly in the DIA chart.  My visions of Friday break of resistance faded as well, but I was holding out hope that the Friday report could inspire the Bulls.

Then during the evening, we heard of the US retaliation attack on Syria with 59 Tomahawk missiles.  I quickly took at look at the futures as they quickly moved south on the news.  The good news is that because I have to trade plan, a process that I follow and a set of rules to protect me from Me.  Because of it, my capital is safe, and I was able to sleep like a baby.

For those of you that don’t have a plan, I have to ask, What are you waiting for?  They are not that difficult to develop.  In fact, the time invested in developing a well thought out trading plan could prove to be the best money you have ever spent!   I can attest to that truth as it has saved me from my emotions and foolish ideas more times than I can count.  Just buckle down and get it done!

Calendar Events

This morning we get Mac Daddy report for the week.  The Employment Situation report provides a clue to the health of the overall markets and thus can easily move the market upon its release.  The ADP on Wednesday painted a pretty picture of jobs growth, so most are expecting today’s number to be very positive.  However, a big jobs number can also be a double-edged sword.  If the number is too hot, it could force the FOMC to act sooner expected on interest rates encouraging the Bears.

Plan of Action

My plan for the morning is to relax with my wife and enjoy and nice breakfast.  I will completely ignore all the drama and hype before and immediately after the report.  My charts are marked up, and I’m prepared to act if and only if price action warrants.  My stops are in place; my risk is within my tolerance acceptable zone, and I have the discipline to wait calmly.  Anything is possible.  The markets have a lot to chew on this morning, so I’m expecting considerable volatility.

I wish you all a profitable day and fantastic weekend!

Trade Wisely,

Doug