Traders seemed to love the trade news ahead of Tuesday’s market hours.  President Xi Jinping had said China will work to lower tariffs and stabilize international trade.  As a result, markets gapped mildly higher at the Open.  However, from there it was an indecisive day ending in some form of Doji across all major US indices. The trading at the all-time highs is not a bad sign. Markets are extended and need a rest or pullback. At this point, we are seeing more indecision then signs of a sell-off.

During the day Tuesday WBA soared again (as it had the prior 2 days), but then crashed back at day end.  This on news of the company investigating taking itself private.  (Based on the prior two days of gains, it makes you wonder if someone perhaps leaked that news to friends/family who tried to cash-in.)  After-hours, AIZ, DVA, DVN and ES all reported beats.  Meanwhile, FANG, HST, and MCHP reported misses.

Wednesday’s economic calendar is limited to Crude Oil Inventories (10:30 am) and a couple more Fed speakers in the afternoon.  However, again earnings will likely have the most sway again as BR, CBRE, CVS, CPRI, COTY, HUM, SEE, AES, VMC, and WEC are among those reporting before the bell. Also, of note is that homebuilder TMHC has reached an agreement to buy its smaller competitor WLH and CNBC is reporting XRX will make an offer to buy HPQ.

Tuesday’s economic calendar includes Sept. Trade Balance (8:30 am), Service PMI (9:45 am), ISM Non-Mfg. PMI and JOLTS (both at 10 am) and a couple of FOMC speakers in the afternoon.  However, earnings are likely to drive markets again as AGN, ARNC, BDX, EMR, EXPD, FIS, HSIC, MYL, NEM, PPL, REGN, TPR, and ZBH all report before the Open.

Overnight, Asian markets were green.  In Europe, markets are mixed, but mostly green at this point.  As of 7:30 am, U.S. futures were just on the green side of flat.

Again, markets are a bit extended at this point and showing signs of indecision at the all-time highs. However, this is constructive (as compared to a raging bull run that often leads to a collapse). Don’t be too surprised if we drift sideways a bit or even pullback to retest the breakout level before any climb resumes.

Ed

Swing-Trade Trade ideas for your consideration. Long – GPC, IPG, SNA, K, MHK, CMI, PCAR, STX, VLO, ALK, ROL, KSU, KEY, OLLI. Short – EFX, MLM, LMT, NOC, VMC. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.

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