Predictions

Over the weekend there seemed to be a flurry of traders posting predictions of the week ahead.  They ranged from the extremely bullish to those shouting the sky is about to fall.  As short-term swing traders, what you think will happen is far less important than how you react to what is happening!  Predicting can create a bias that clouds the view of price action signals that leads to all kinds of trading mistakes.

Have you ever missed a fantastic trade because you were sure the market would tank or lost a bucket full of money because you were sure you had a no lose position?  That’s the result of predicting and trading your bias while ignoring the clues the market was presenting.  Fight the market, and you will lose.  Listen to the market, learn to follow it’s lead and trading becomes much easier.

On the Calendar

We begin the last week of September with a busy week on the Economic Calendar.  However, today there are no expected market-moving reports.  At 8:30 AM Eastern is the Chicago Fed National Activity Index report and then the Dallas Fed Mfg Survey @ 10:00 AM.  We have 4-Bond events between 11:00 AM and 1:00 PM to wrap up the calendar day.

Today on the Earnings Calendar we have 16 companies reporting, but there are none particularly notable with almost all of the classified as penny stocks.

Action Plan

After very strong rallies in the DIA and SPY, last week momentum certainly favors the Bulls.  Trends are bullish, and all the major indexes are above key supports.  However, having moved up so far so fast, a rest or even a profit-taking pullback is not out of the question.  Toss in a heavy Economic Calendar week topped by the FOMC meeting announcement at 2:00 PM Wednesday and the potential for the end of quarter window dressing to occur and we could face a challenging week ahead.

Asian markets closed mixed but mostly higher with the new 10% tariffs on 200 billion in Chinese imports kicking in today.  European markets are currently in the red across the board.  US Futures are pointing to a modestly lower open this morning, but the gap down in the QQQ is the most concerning.  Leaving behind a bearish engulfing candle on Friday and falling below a key price support this morning should be closely watched.  If bears take it below 180, it could easily trigger some fear in the market so keep a close on the price action.

Trade Wisely,

Doug