Morning Market Prep Jan 19 2018

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Shocking!

A day without new record new record highs?  Shocking!  It would seem the Bears are starting to test the strength of the advancing Bulls with little attacks here and there.  The results of this minor skirmishes have thus far proved the Bull is strong and unwilling to yield even a little.  Does that mean we should toss caution to the wind and chase into this rally?  Absolutely not.  Chasing with the fear of missing out cost me a lot of money over the years as I was learning my craft.  If you are going to buy look for stocks that are finding buyers at or near price support levels.  Futures are bullish this morning, and trends are still solidly pointing up so stay with the trend but choose your risk wisely.

On the Calendar

The Friday Economic Calendar is a light one for a change.  At 10:00 AM Eastern we get the latest reading on Consumer Sentiment which consensus it expecting an increase to 97.0 vs. Decembers 95.9.  Other than that Fed speaking tour continues with one at 8:45 AM, then 1:00 and 1:30 PM.

The Earnings Calendar is also light today with only 17 companies reporting earnings today.  Most notable are those reporting before the bell such as RF, CFg, FHN, KSU, and SLB.  Keep in mind that earnings reports ramp up heavily next week.  Make sure you are checking dates on positions you hold and those your thinking of buying.

Action Plan

Although there were a couple of intra-day bears attacks, the bulls managed to hold the battle line with relative ease.  During the evening there was an attempt to move the futures lower, but once again the bulls were not interested in giving up any ground.  Also during the evening, the US House passed a tempory spending bill.  Now it’s up to the Senate to prevent the government from shutting down at midnight tonight.  I don’t know about you, but this drama is getting old.

Despite the political drama and the intermittent bear attacks the futures market is putting on a confident face.  As I write this, the Dow futures are pointing to a gap up open, and the NASDAQ could set new records at the open.  Go Bulls!  Stay with the trend but keep in mind that gap up opens can be very whippy so avoid chasing.  As always I will be focused on profit taking more than adding new risk as we head into the weekend.  However, I will be looking for trades, and anything is possible.

Trade Wisely,

Doug

See http://bit.ly/MorningMarketPrep01192018 for video