Morning Market Prep March 16, 2018

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Boring, choppy price action.

Choppy price action days like we saw yesterday can be frustrating and downright boring at times as we watch price grind up and down.  Inexperienced traders just wanting some action often let choppy, boring markets affect their decision making.  When I was a new trader just like most new traders, I just wanted to trade.  Consequently, I made a lot of very bad decisions trying to force trades just because I was bored.  Long story short if the choppy price action persisted very long I would have a huge string of losing trades.  Individually the trades were not big losers but added up the damage to my account was substantial.  If boredom is affecting your decision making, take a break.  It’s amazing how a short break from your screens can help a trader maintain focus and promote good decision making.

On the Calendar

No rest this Friday on the Economic Calendar with four important reports.  Kicking off at 8:30 AM Eastern with the Housing Starts report which is calling for a decline from the 1.326 million annualized in January to 1.285 for February.  Permits according to consensus will decline in February to 1.322 million vs. 1.377 million annualized.  At 9:15 is Industrial Production forecasters expect a 0.4% increase overall with the manufacturing growth increasing 0.4% as well.  The Consumer Sentiment report at 10:00 AM is expected to decline slightly to 98.8 vs. the 99.7 February reading.  Also at 10:00 AM is the JOLTS report is expecting job openings to decline slightly to 5.800 million vs. 5.811 in December.  AT 1:00 PM is the Old Rig count but it very unlikely it will move the market.

On the Earnings Calendar, we have 67 companies expected to report results.

Action Plan

At the open yesterday, futures pointed to a possible bounce, but the bulls lacked the energy to hold onto early gains as trade war fears continue to swirl.  The good news is the DIA held onto supports by the close while the other indexes all help up pretty well.  There is, however, the reason to keep a close eye on the DIA and the SPY because it wouldn’t take much to tip the scales to favor the bears.  So come on bulls sharpen those horns and push.

As I write this, futures markets are flat to every so slightly bullish but remember we have some big reports the market will have to digest before the open.  Also, keep in mind as we head into the weekend that the FOMC meets next week on interest rate policy so don’t be surprised to see some directionless chop in the day ahead.  Have a great weekend.

Trade Wisely,

Doug

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