I you want my market comments before the open, SIGN-UP FOR THE PLATFORM. This morning I told users that the opening move was “fluffy” and the market would pullback. Once support was established it would be a buying opportunity. This is the best $1/day you can spend. Trading profits from one day like this pays years of access.
The market wants to move higher and it is starting to discount an air strike in Syria, Fed tapering and the debt ceiling. These are all nagging issues, but they will be resolved in coming weeks.
President Obama has been speaking to international leaders and he is trying to justify an air strike in Syria. Global allies are divided and so are both parties in the US. We’ve wasted valuable time and an air strike could be costly and ineffective. Chemical weapons have been moved to churches, hospitals and schools. The House will vote next week and the outcome is uncertain.
The Unemployment Report showed that 169,000 jobs were created in August. That was a little light, but close to consensus estimates. It still keeps the Fed on track for tapering. They will start very slowly and they don’t want to see interest rates spike any higher than they already have. Their policies are still accommodative.
Politicians have returned from recess and the debt ceiling rhetoric will pick up. The market won’t worry about a default because it knows the can has historically been kicked down the road at the last minute.
Economic releases have been very strong globally and domestically. Corporations are lean and mean and any uptick in demand will go straight to the bottom line.
With each passing week Asset Managers will get a little more anxious. They will try to front run a year-end rally and the bid will strengthen.
I am long calls and I am day trading from the long side. Once the FOMC makes its statement I will get more aggressive with my call purchases. I hope that I will be able to buy on weakness, but I am prepared to buy on strength if the reaction is positive.
We will still see some nervousness for a couple of weeks. Buy calls and take profits ahead of the FOMC meeting.
The market tested the downside this morning and it rebounded sharply. It should be able to grind higher the rest of the day.