Productive price action as the market rests.

Thus far the pullback/rest is showing productive price action in my opinion.  Healthy markets commonly rest or pullback to test price supports.  As of now, this resting pullback is not showing signs that the bears are taking over so far.  Of course, that can always occur very quickly around new market highs.  As the overall trend is still up will remain bullish, but I also want to be prepared in the event the Bears decide its time to feed.   Always keep in mind that whipsaw price and swift reversal are common around potential market tops.  Although fear is essentially not present at the moment we all know how quickly that can change so be prepared.

On the Calendar

The only thing of significance on the Economic Calander this hump day is the EIA Petroleum Status Report at 10:30 AM Eastern.  The last three reports have shown a decline in supplies, but the news lately from US producers suggest they have no intentions of slowing down.  As a result oil prices and oil companies have continued to show weakness.  Today’s number could easily move if this market.

On the Earnings Calendar, there are 29 companies expected to report earnings this morning.  A quick scan of those on the docket there is none that would normally move the market.  However, if you own or happen to be considering one of these companies, please understand the implications.

Action Plan

The market having rested a couple of days and pulling back to an area of possible support is healthy price action in my opinion.  Futures have been dancing around the area of a flat open this morning.  I think the Oil status number could be very influential on the market direction today.  A build in supplies would be negative while a reduction in supply is positive for oil prices.

I will, of course, attend to current positions first but will continue looking for new long positions staying with the direction of the overall market.  I will be very watchful for whipsaw price action at these levels and will exercise caution on new trades until I see the Bulls picking up their activity.

Trade Wisely,

Doug