Posted by Pete Stolcers on October 3
Posted 9:30 AM ET – The S&P 500 and Russell 2000 continue to march higher. Tech stocks are relatively soft and we can expect the bid to strengthen as earnings season approaches. Economic reports should be market friendly and I’m expecting this rally to continue.
China’s official PMI posted its highest reading since 2012. ISM manufacturing came in at 60.8 and that is a very “hot” reading as well. ADP will report tomorrow and we will also get ISM services. Initial jobless claims have been drifting lower during the last month and job growth should be steady.
Earnings season starts next week and that typically attracts buyers.
North Korean missile tests and a likely rate hike in December have not dampened spirits.
Any rumor of a tax deal will fuel this breakout.
Swing traders should be long calls. Ride these positions and use SPY $250 as your stop on a closing basis.
Day traders need to be a little cautious on the open. We’ve seen a pattern where the market pushes higher early in the day and then it retraces. A small round of buying late in the day gets us back to the high. The intraday price action has been very dull. I am carrying more overnight positions than normal and my day trading has been minimal. Most of the move takes place overnight and there isn’t much going on during the day.
Ride your longs and know that we still have a few more weeks of bullish price action (even without a tax deal).
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