The Bulls Are Pounding On The Door Of Resistance, Will It Open?

The Bulls were able to win the battle yesterday in 3 of 4 indexes and as a result, are pounding on the door of resistance.  The question that still needs to be answered is, will it open?  As I mentioned yesterday, this is a battleground, and it seems like the first round was won by the Bulls.  Most noteworthy is the NASDAQ which is very close to making new all time highs.  For new or inexperienced traders this is a great chance to study possible topping patterns.  Price action resistance is always of critical importance and therefore must be given respect as you plan the day ahead.

Events to Consider

I think the GDP number at 8:30 AM Eastern will be critical today.  A good number may be all that’s needed to inspire the bulls to stampede through resistance.  On the other hand, a bad number could have the opposite effect allowing the bears to feed.  Also on the Economic Calendar, today is the Weekly Jobless Claims and a slew of Fed speakers.  The Earnings Calendar has 92 companies reporting, and therefore we must continue to stay on our toes to protect our capital.

Plan of Action

My plan is to wait for the reaction to the GDP number because it will likely influence today’s open.  Although resistance will challenge any upside move, another consideration will be the possible window dressing effect.  I remain cautiously bullish but will be ruthless in the protection of my profits due to the power of price resistance.  Failure patterns here are not to be trifled with so in conclusion I recommend we remain very cautious.  New and inexperienced traders are highly encouraged to stand aside while this battle continues.

I wish you all a productive and profitable day.

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Trade Wisely,

Doug