Dip This Week Lasted 1 Hour – Bid Is Strong and No Speed Bumps

Posted 9:30 AM ET - The market dipped early Wednesday and it spent the rest of the day recovering. Stocks gapped higher yesterday and the S&P 500 made a new all-time high. That pullback on Wednesday only lasted an hour. Buyers are engaged and I don't see any speed bumps ahead. Two "dark clouds" have temporarily parted. The budget needs to be approved a week from today and the rhetoric has been amiable between both parties. In all likelihood the budget will be extended into February. The second dark cloud was missile testing in North Korea. I believe "Rocket Man" will stop testing during the Olympics. With the possible speed bumps out-of-the-way the market will grind higher. Corporate earnings will be excellent and earnings season has started. The guidance and optimism should be very high. Economic releases have been robust. The Fed plans to hike three times this year. Inflation is below target levels and four rate hikes is not currently being considered. The new chairman (Powell) will want to ease into his new position and the rhetoric should remain dovish. Swing traders should maintain call positions. Raise your stop to SPY $275 on a closing basis. As the market moves higher trail your stop. We should still have two good weeks of price action. Day traders need to be cautious when the market opens higher. Make sure the gains hold before buying. Intraday ranges have been compressed and day trading has been difficult. Focus on sectors that are strong that day. Stay long and trail your stops higher. . .

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