Whipsaws and head fakes

All bulls have remained in charge holding key support, but those pesky bears have certainly made this week challenging with all the whipsaws and head fakes they have used to muck up the works.  I would not expect the bears to give up easily, but the announcement that the US and China will come back to the trade negotiation table may finally inspire the bulls to break for higher ground.  Although still, a very dangerous storm with the east coast hurricane downgraded to a category-2 may also help to lift the mood of the market.

Leaving behind some questionable candle patterns in the indexes yesterday we are not out of the woods just yet and have to remain watchful of those nasty intraday whipsaws and head fakes.  However, the path higher seems to have fewer obstacles to overcome at the moment. Stay focused and price and always be prepared with a plan to deal with whatever the market tosses at us.

On the Calendar

The potential market-moving CPI report and the weekly Jobless Claims kick off the Economic Calendar at 8:30 AM Eastern.  Forecasters expect the CPI to rise 0.3% in August with the overall year-on-year core at 2.3 percent.  Consensus expects 210,000 in initial claims coming off a 50-year low as labor demand remains very high.  We have a Fed Speaker @ 10:00 AM, Natural Gas report at 10:30, three Bond Announcements @ 11:00 AM, another Fed Speaker at 12:30 PM, a 30-Yr. Bond Auction at 1:00 PM, the Treasury Budget at 2:00 PM, Fed Balance Sheet and Money Supply at 4:30 PM to wrap up the day.

On the Earnings Calendar, we have 33 companies fessing up to their quarterly results.  Before the bell, KR is among those reporting, and ADBE is the most notable after the market close today.

Action Plan

With all the gaps and whipsaws and choppy consolidations, this has been a rather challenging week.  On the positive side, the indexes have held on key supports but so far have not found the energy to follow-through to the upside.  Yesterday it was announced that the US and China could begin another round of trade negotiations.  As a result, Asian markets closed higher across the board with the European markets are mixed but mostly higher.  Consequently, US Futures are suggesting a bullish open as I write this.

The market continues to prone to intraday whipsaws but perhaps with China tariffs temporarily set aside and the east coast hurricane down to a category-2 storm the bulls can produce a more deliberate effort.  While the bears have not shown a lot of strength, they sure have been disruptive, and they will likely not give up easily.  We still need to be watchful of head fakes, and whipsaws so stay focused on price and prepared for anything.

Trade Wisely,

Doug