Price Resistance proves stronger than the Bulls.

The Bulls stayed in control yesterday, but resistance levels proved to be stronger.  It seems a lot of the Bulls decided to avoid the summer heat and hung out in the barn as volume was very low yesterday.  Price action was understandably choppy as a result.  Technically speaking nothing changed yesterday.  Indexes remain under price resistance, and light volume rallies don’t inspire much confidence.

Boredom is dangerous for most traders.  Rather than just sit and watch as we break discipline and trade just to have something to do.  Allways keep in mind that you are the CEO of your trading business and it’s your job to maintain the discipline and stick to your plan.

On the Calendar

Tuesday’s Economic Calendar begins with the JOLTS numbers at 10:00 AM Eastern.  This month job openings are expected to slip slightly lower to 5.975 million.  Lately, openings have been running about 1 million above totals for hiring.  Wholesale Trade is also at 10:00 AM but is normally a non-market moving number.  We have Fed speakers at 12:30 PM and 1:20 PM to round out calendar today.

On the Earnings Calendar, we have 17 companies expected to report earnings today.  One to keep an eye on is PEP as the consumer defensive stocks have been showing signs of strength of late.  If you are not already in the habit of checking earning reports before entering new trades now would be a good time to start.  Next week we will begin ramping up with 100’s of reports daily.  Not knowing can cost you a lot of money.

Action Plan

Yesterday saw the Bulls matain control but sadly lacked the energy to break overhead resistance levels. Futures are currently pointing to a flat to slightly lower open this morning.  The overall market seems to lack inspiration and is simply marking time with choppy low volume price action.  With both economic and earnings news continuing to be on the light side we may have to wait a little longer for that inspiration to appear.

I will be looking for new bullish trades today, but as we approach resistance levels, I must also keep my mind open for bearish positions if failure patterns begin to show up in the charts.  The market itself is in a slow, plodding mood, so there is no need to rush into new trades.  Even the best fo the best setups are having difficulty performing in this environment.  Stay disciplined and always remember that cash is a position.

Trade Wisely,

Doug