Is the move irrational behavior?  Goldman Sachs has warned that it is and the conspiracy theorists come out of the woodwork proclaiming a rigged market.  The fact is the market wants to go up for the time being.  Fight it and you’re likely to lose because a market can remain irrational much longer than we as retail traders can stay liquid!  Follow the price action and avoid predicting.  Could today bring in the sellers?  Yes, but it could also inspire the bulls to keep pushing higher.  Relax, focus on price and it will lead the way.

Who would have guessed the hope of a federal funds rate cut from 2.5 percent to 2.25 percent would have the power to reverse market sentiment lifting the Dow more than 1250 points in just 5-days of trading.  This morning with fresh presidential tariff threats making headlines the US futures point to yet another gap triple point gap up.  

On the Calendar

We have just 19 companies fessing up to their quarterly results today.  Notable reports include Play & HRB.

Action Plan

The power of the assumed future interest rate cut continues to propel the bulls higher even as signs of a weakening economy emerge in the US and continued threats of tariff increases from the Whitehouse.  The biggest part of yesterdays move occurred in the overnight gap and according to the futures we can expect yet another gap up of more than 100 Dow points. 

In the past I would try to figure out such price movements that seem to be completely irrational.  I would attempt to countertrend trade these relentless moves only get run over by market momentum.  Here are the simple facts.  The bulls are currently in control and they currently believe the market should be valued higher!  Personally I don’t believe that is right but what I think or feel has no bearing on what is occurring.  Trade the chart as it is not as you think it should be because the market doesn’t care what you think.  Could this turn out to be an irrational rally?  Yes, it could but it could also just keep going up.  Focus on price action and it will lead the way.

Trade Wisely,

Doug