Nice bounce, but?

I don’t know about you, but I certainly wanted to see a little bullish follow-through after yesterdays nice bounce.  Unfortunately, the current futures market is proving once again that what I want has nothing to do with what the market does!  Sadly a lesson that took me a long time to learn.

With volatility so high anything is possible.  If the market provides us with a quick profit, we should consider taking some or all of it off the table during turbulent market conditions.  It may not be what you were planning for hoping for but it far better to take small gains consistently than letting those gains diminish or disappear overnight.  As we head into the weekend, consider your risk carefully and remember that Thanksgiving is just around the corner which means volume will likely decline sharply heading into the holiday.

On the Calendar

On the Earnings Calendar, there are only 16 companies reporting as the 4^th quarter season winds down.

Action Plan

After the nice bounce yesterday, I’m guessing that everyone was hoping for a follow-through push higher this morning.  I know that’s what I wanted to see!  However, what we want has nothing to do with what the market gives us.  The unfortunate truth is that currently, the Dow Futures look to take back some of the reality with a gap down of more than 100 points.  Disappointing yes, but not all that surprising given the recent market volatility.

As we head into the weekend, consider your risk carefully with high market volatility in mind.  If you have current profits, it may be wise to take some if not all the gains and tuck that safely away in your account over the weekend.  As 4^th quarter earnings wind down, expect the market to become even more sensitive to any reports China trade and the likelihood of an agreement.  Also, as Thanksgiving approaches, keep mind that volume can quickly dry up as traders take time off for the holiday, adding to the already challenging price action.  Have a great weekend everyone!

Trade Wisely,

Doug