Santa held Hostage?

During the evening the Congress passed a continuing resolution that prevents a government shut down.  However, their action only extended the battle for 2-weeks.  Now the question is will the hoped-for Santa Claus Rally be held, hostage by Congress?  Santa held hostage, shame on you Congress!  My feeble attempt at humor is simply point out that the market will likely remain sensitive to the spin out of Washington D.C.  Of course, the bulls could find their inspiration in the Employment situation number to move higher, but the governmental pressure will be ever-present.  Also, weighing on the mind of the market is the upcoming FOMC meeting.  As for me, I will continue to focus on price action and continue to trade with the trend.  However, I may trade smaller than normal positions due to the uncertainty of the new cycle.

On the Calendar

We begin the Friday Economic Calendar with the very important Employment Situation report at 8:30 AM Eastern.  Consensus for November expects a strong showing between 184,000 and 190,000.  The overall rate is seen holding at 4.1% with hourly earnings increasing 0.3%.  At 10:00 AM we get a reading on Consumer Sentiment which is expected to tick higher to 98.8 vs. 98.5 last month.  Wholesale Trade numbers are also at 10:00 AM with the oil rig count at 1:00 PM.  Neither of which are likely to move the market.

On the Earnings Calendar, we only have 8-companies reporting.  Looking through the list, I would not expect any of today’s reports to affect the overall market.

Action Plan

Yesterday’s modest bounce held some key support levels and provided some much need relief.  There are a lot of charts showing bullish patterns.  Now, all we need is a little more volume to build some momentum, to continue the trend.  Currently, the Dow Futures are suggesting a positive option on the news from capitol hill.  During the evening Congress passed a continuing resolution that avoids a Saturday shutdown of the government.  Unfortunately, they only kick the can down the road two weeks.  That means the budget battle will continue and the market will remain sensitive to the news.  Perhaps the market will get a shot in the arm after the Employment Situation report to reinforce and inspire the bulls higher.

Trade Wisely,

Doug