The record breaking year continues.

Although the market seems stretched the Bulls continue to charge upward and the record breaking year continues.  Eventually, the momentum of this rally will fade, but as of now, the Bulls are firmly in control.  Rather than chasing new positions I want to focus on profit taking as we head toward the weekend.  Selling into strength as the market becomes stretched is a trait of successful traders.  New or inexperienced traders are feeling the pressure of missing out often make the mistake of chasing market highs.  Take from one that made that painful mistake over and over.  If you’re not already in positions taking advantage of the rally, it would be wise to wait.  There are a lot of great looking charts.  If you can enter them at low-risk entry points okay but keep in mind it will be difficult for them to rally is the overall market does pull back.  Make sure you have a plan.

On the Calendar

Thursdays Economic Calendar kicks off with Consumer Price Index at 8:30 AM Eastern.  The consensus is expecting a 0.3% increase month vs. the 1% rise previously.  The spike in prices is yet another impact  Hurricane Harvey is having in the country.  The tally for Hurricane Irma is unknown at this time.  Also at 8:30 AM is the weekly jobless claims which surprised the market due to the surge of 62,000 new claims.  The consensus is for some 302K claims today, and this number is expected to continue to rise over the next several weeks.  Once again the effects of Harvey and Irma.  There are several other reports today but nothing considered to be market moving.

On the Earning s Calendar, we have 35 companies reporting results today.  One of the bigger stocks to report today is ORCL.  A good report could give the QQQ’s a little boost.

Action Plan

The indexes continue to defy gravity as the momentum of this rally continues to attract buyers.  Once again new records were set in the DIA, SPY and the QQQ’s while the IWM continued to rally testing resistance levels.  As we continue to melt up once again, the VIX is nearing historic lows raising the slight concern of complacency.

The trend is up so I will continue to trade long and continue looking for long positions.  Although the market seems very stretched as of right now, there are no clues in the price action of a direction change.  Common sense, however, would suggest a rest or pullback could come at any time.  Don’t predict it just focus on the price action for the clues and stay with the trend.

Trade Wisley,

Doug