As we look at price action this morning we see the S&P up almost ¾ of a percent in early action, trading at 2830.75, about ½$ off highs of the day. Alphabet reported fantastic earnings yesterday after the close and the market is showing great strength and resolve. In fact, we have made a new high for the move which is all the more impressive due to ongoing back and forth with China concerning tariffs. Adding to the bullish tilt in the stock index across the board is the continued strength in the Nasdaq. Traders should look for continued strength in all sectors of the stock market as long as tariff talks remain calm. The market is starting to become overbought and the next big target on the upside for the S&P is 2839.25 which was the high back on February 18. The remainder of the day should be quiet on the economic front, but the market is preparing for a big number on Friday’s GDP. Early whispers are that this could be a whopping number. The street is looking for 4.0. If that should come in as expected, my guess is that we will see a dip in stocks due to jump in the Treasury yields. So, traders should be on high alert as the number comes out at 7:30 am Central time. If we see the trade reach 2839-2840 today, I believe a nice short could be established there with a stop at 2845. Look for profit target 2810.
E-mini S&P 500 Sep ’18 Daily Chart