Trump Speak Makes Investors Nervous – Look For Soft Price Action Today

Posted 9:00 AM ET - Yesterday's price action was lackluster. I expected to see nice follow-through after the reversal last Friday and we did not get it. The S&P 500 did make a new all-time high, but it traded in a very tight range most of the day. The pattern of lower opens and higher closes is still intact and that is bullish. We could see some selling pressure today. I noticed that my proprietary indicators were showing internal weakness Monday and the S&P 500 is down three points before the open. Trump makes investors nervous and tonight he will address Congress. I don't believe his speech will get specific since many of the details are still being hashed out. Look for quiet trading with a slightly negative bias today. Use SPY $235 as your stop on a closing basis. We will get official PMI's tomorrow and I'm expecting them to be good. ISM manufacturing, the Beige Book and ISM services will be released as well. Global and domestic economic conditions are gradually improving. The next FOMC meeting is two weeks away and those headwinds will increase each day. The market should still have some gas in the tank and I am expecting it to grind higher for another week. Swing traders need to respect the market stop in at SPY $235 on a closing basis. Start setting targets on your long call positions. The market momentum is starting to wane. Day traders need to be patient on the open today. We need to gauge the selling pressure this morning. Support is at $236.60 and we could test that level. This is a low probability trading environment so trim your size. Yesterday the S&P 500 was trapped in a three-point range almost the entire day. I will look for trading opportunities on both sides today. After the speech tonight I believe investors will take a deep breath and stocks will grind higher the rest of the week. Look for quiet trading today with a slightly negative bias. . .

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