The Trend is Strong

Just when you think the market is about to take a breath and rest the Bulls step up and drive us even higher.  Once again new record highs ring out inspiring more and more buyers to enter the market.  With earnings session underway anything is possible, but so far they have been coming in strong that could continue fueling the Bulls to push even higher. The trend is strong and clearly very bullish.

Don’t try and fight or just might find yourself under the hooves of charging bulls.  There was a time in my trading career when I believed I had gained so much knowledge and skill I could predict the market.  I would find myself often trying to fight the market trend allowing my bias to control my decisions.  Long story short, my accounts suffered tremendous damage as a result.  Whether it seems rational or not work within the trend as long as it continues.

On the Calendar

The Economic Calendar starts off with Import and Export Prices at 8:30 AM Eastern.  Conseensus sees a 0.5% gain vs. 0.5% percent last month.  At 9:15 AM is the most important number of the day, Industrial Production.  Forestasters are calling for a 0.4% September gain in production numbers.  Then at 10:0 AM the Housing Market Index is expected to hold unchanged at 64.  Then at 2:00 PM is the Treasury Budget wihich is calling for a 3.0 billion surplus.  Then at 4:00 PM is the Treasury International Capital which tracks financial instrments in and our of the the country.

The Earnings Calendar has bumped up to more than 50 companies expected to report results today.  JNJ, IBM, GS, PGR, CREE, HOG, MS are some of the notables reporting.  NFLX reported good results after the close yesterday.

Action Plan

I sometimes feel a little like Bull Murray in “Goundhog Day,” when everyday I repeat the market has once again set new records.  As is case for yesterday with the DIA, SPY and QQQ’s all closing at new record highs once again.  The IWM lagged behind choosing instead to remain in a tight consolidation range.  The VIX continues to hover just above record lows and hanging on to its sub ten reading.

Although this run seems to be a bit long in the tooth, the Bears seem to be no where in sight.  At this time there also seems to be no Fear of their return at the moment.  Common sense keeps telling me this can’t go on forever.  However betting against or standing aside in a wildly bullish market such as this would be a mistake.  If earnings begin to roll in showing that most companies can support these lofty price levels, then the trend up could continue much longer.  Set aside your bias and trade the charts in front of your with a focus on price action.

Trade Wisely,

Doug