Rollercoaster Ride

Another day and another wild rollercoaster ride as the Futures respond sharply higher on the news that the US and China are coming back to the trade negotiation table.  Dow Futures currently indicate about a 200 point gap up at the open which will be about 425 points above yesterdays low.  Wow, that’s some very difficult volatility to deal with unless you’re a very fast day trader that also happens to trade overnight.

If you’re a swing trader or position trader your, this kind of price action is without question very challenging.  Wild swings like this can also inspire poor emotional decision making the and keeping traders off balance.  If you don’t feel you have an edge in this wild volatility, then don’t fight it.  Step back take a breath and re-engage the market with a clear head when your edge returns.

On the Calendar

We start off Thursday on a dead run with three important market-moving reports at 8:30 AM Eastern.   Housing Starts are expecting a decline to 1.271 million in July vs. 1.173 in June with permits rising to a 1.307 million rate.  Weekly Jobless Claims expect to continue to show very strong labor demand with a consensus for today of 215,000 wish is 2000 higher than the last reading.  Finally, the Philly Fed Business Outlook Survey expects to report a strong 22.5 according to the consensus estimate which seems to be continuously lower than the actual number.   We have the Natural Gas Report @ 10:30 AM, 2-Bond Announcements @ 11:00 AM, The Fed Balance Sheet & Money Supply @ 4:30 PM none of which would be expected to move the market.

On the Earnings Calendar, we show 52 companies are scheduled to fess up to their results today.  Before the bell, we will hear from JCP, JD, and WMT.  After the close AMAT, NVDA & JWN are among those reporting.

Action Plan

Asian markets were lower overnight and appear under stress after making a four-year low.  European markets, however, are all showing gains this morning.  After another rollercoaster ride yesterday we look to keep the wild price action going with another full overnight reversal at the open.  Responding to the report that China and the US are coming back to the trade negotiation table have futures flying high this morning.  Currently, the Dow Futures indicate a gap up of near 200 points at the open.

With big morning gaps also comes the possibility of whipsaws so plan your entries carefully and be careful not to chase.  Keep in mind, at the open today; the Dow will be about 425 points higher than it was at yesterdays low.  Now that’s some wicked volatility to deal with when trying a matain an edge.

Trade Wisely,

Doug