U.S. Consumers Spending Stagnant On Higher Income

This morning, data for U.S. consumer income was reported as a 0.5% rise. The market was expecting just 0.3% and a half point gain is the biggest gain seen for more than half a year.

On the other hand, personal consumption rose just 0.1% and once you factor in higher prices real spending was unchanged. This marks a clear cutback in spending in favor of savings, or more likely in favor of paying down debt. Question also whether this is an indication whether those stimulus checks in May will get spent with local retailers versus allocated to pay down additional debt or further fund the savings account.

At 10:00 a.m. EST today, we will get the University of Michigan Sentiment Index numbers. The market expects an end-of-month value of 69.5, as compared to a prior reading of 70.8.

The pre-market activity suggested a mildly higher open.

With the weekend now here, we'll pick up with our educational video series on technical analysis basics.

In this edition of the Traders Whiteboard we will be introduced to the concept of establishing a trading game plan.

Far too often I hear from traders who tell me that they are in a trade, but are not sure what to do next. In a perfect trading world. this question would never be asked because everyone of us would have a pre-established trade plan in place before we open the trade.

The whole video is just 5 minutes long. So, grab a cup of coffee and click on the the video image above to start it playing.

I'll be posting additional lessons over the weekend...

Trade well.

Christopher Smith
TheOptionClub.com