Market participants always want news and information. It is what they base their decisions and actions on. But since early February 2018, that appetite has become markedly larger and the responses to information magnified.
The “Big News” planned for the upcoming week is as follows;
-Tuesday, 2/27/2018, Jerome Powell, the new Fed Chairman, will give his first report to congress. You can bet the market will be hanging on every word.
-Wednesday, 2/28/2018, the latest GDP numbers will be released at 8:30 AM ET, prior to the market open.
-Thursday, 3/1/2018, Mr. Powell will conclude his report to congress.
There are a lot of company’s reporting earnings this week, but no major, bellwether types.
I think the big deal will be the nuance of what Jerome Powell says and what the GDP number is. The fear that drove the big drop in early February was economic strength resulting in inflation and a subsequent increase in interest rates to try to control inflation. That is what everyone will be watching for and responding to.
We can expect more volatility day-to-day, and before long, clarity on market direction, either to more highs, or the beginning of a deeper correction. We continue to be at a key decision point and it could go either way.
The best strategy is to be careful, keep capital available for new opportunities, take advantage of clear setups, and to follow a time testing trading plan. That is what I am doing, and it continues to work.
If there is a change and clarity, I will send an update at that time.
Meanwhile, trade safe, keep your winners big and losers small and have fun!