Shooting stars and doji’s abound.

As I looked through the charts last night, I saw a lot of shooting stars and Doji’s at highs which are considered bearish.  I also saw a lot of indecisive doji’s at highs and in consolidations.  Both of these conditions would warrant significant caution. However, there was also a lot of very bullish patterns and some fantastic looking charts.  What’s a guy to do?  Yesterday was a very emotional day for the market due to the congressional hearings.  There were several full reversal whipsaws during the day making charts very convoluted.  As of now I’m staying bullish on the overall market and may even consider adding some risk ahead of the weekend, but I will give the market a good 30 minutes to an hour to settle in before making any decisions.

On the Calendar

A very light Friday on the Economic Calendar with only a couple reports with little to no significance.  On the Earnings Calendar, it’s much the same with only eight companies reporting.  None of which should be market moving.  Truly the quiet before the storm, because next week we have one of the fullest calendars of market moving reports I’ve seen in a long time.  Of course, the biggest is the FOMC decision on interest rates.

Our news filled day yesterday turned out to be a non-event the U.K. elections could create some turmoil abroad and is worth noting.  Long story short, the Prime Minister lost so may key seats it would normally force her resignation.  However, she is refusing to resign and will now seek the approval of the Queen to form a government.  Let the drama begin!

Action Plan

As you know Friday is normally my day to take some profits and a day I usually restrict myself from adding new positions.  However, with the decks, somewhat cleared for the President to proceed with his plans; And the house passing the bill that removes much of the Dodd-Frank debacle I’m thinking of adding risk.  The big banks began a rally yesterday, and I would expect that to continue today.  Futures have the chances of that the FOMC will raise interest rates next week above 95% which should help the banks even more.  Hince, I will be looking for an entry in the financial sector.  Stay tuned.

Trade Wisely,

Doug