Third Quarter Earnings craziness begins today!

With the beginning of the third quarter earnings today I’m hopeful we will finally shake lose from the choppy range bound price action of late.  Please, please make a habit of checking current holdings and possible new trades for earnings reports.  Getting caught by surprise is not acceptable for professional traders.  I think this round of earnings will be very important.  We have had an amazingly bullish market since the presidential election.  It will now be up to the companies to prove with their results that current high prices of the market are justified by earnings results.  Stay on your toes there are likely volatile days ahead.

On the Calendar

We kick off the Calendar with big reports this Friday morning.  First the Consumer Price Index at 8:30 AM Eastern followed immediately by the Retail Sales report.  Shortly after at 9:15 is the Industrial Production report.  We have a Fed Speaker at 9:30 than the less important Business Inventories and Consumer Sentiment report.  Consensus expects a 0.1% gain in the CPI, Retail Sales a weak 0.1% gain and a solid showing in Industrial Production of 0.2% increase.  The Business Inventories are expected to grow 0.3% while Consumer Sentiment should remain but strong but decline slightly.

We get a running start on the 3^rd quarter Earnings Calendar today with reports from C and JPM before the bell.  How the big bank’s report will likely have a major effect on how the market open today.  Over all, there are 14 companies reporting earnings today.

Action Plan

Yesterday price action was just what the doctor ordered with the Bulls stepping up to the plate and following through on Wednesday’s strong performance.  Although the price action was bullish, the SPY, IWM and QQQ’s continue to overhead resistance yet to deal with so don’t sound the All Clear signal just yet.

With so much big data coming out before the market opening today anything is possible, so we will have to think on our feet.  Currently, the futures are flat as the market waits for the deluge of news.  As a result, I will need to remain flexible and closely focus on the price action at the open before making decisions on new positions.  Of course, the first order of business is to manage current positions.  Friday, as you know, is normally the day I look to bank some profits rather than entering new trades.  However, with the overall market showing signs of shaking off the range bound chop, I will not rule out new trades today.

Trade Wisely,

Doug