The US Futures are taking a little rest this morning as US/China trade negotiations resume amid new tensions here in America.  Asian markets were flat and mixed overnight while European markets slide south with banks leading the way.  As a result US markets futures are currently pointing lower but there is still a lot of morning earnings yet to come to influence today’s open.

Without question the index trends are still up and the bulls at least to this point appear to have almost limitless energy to drive higher.  There are clues that this run is overextended and profit taking could soon begin but it would be unwise to fight a relentless bull run.  Trying to predict a top is just as wrong as trying to predict a market bottom.  Eventually the bulls will rest and the price will pullback but wait for the clues and follow them rather than predict.  Having said that I would be cautious about adding too many long positions this late in the rally.

On the Calendar

On the Earnings Calendar we have 159 companies reporting results today.  Among the most notable today, WMT, AAP, NBL, LC, AWK, CTB, CXW, DVN, ECL, FE, GPC, HLF, HST, HSBC, KAR, LZB & TSRH.

Action Plan

After a nice 3-day weekend the current futures look as if they want to extend the vacation by taking a little rest this morning with a modest pullback at the open.  Don’t be too surprised if the overall market is a little sluggish this morning as well with many traders likely extending their vacation as well.  US/China trade negotiations resume today here in the US amid new tensions.  Expect some fast price action if there are any news leaks from the negotiation table.

Earnings continue to roll in by in large positive and although we are seeing a little softness this morning the bulls are clearly in charge and the trends are still up.  According to T2122 we are very overextended but with indexes so close major resistance levels I would not be at all surprised to see the markets continue to extend to test them.  I see these resistance levels at the DIA 260 area, SPY 281, QQQ 171 and IWM around 158. 

Trade Wisely,

Doug