Today’s U.S. session has brought more bids to the equities indices and good news on the trade deficit front. At the midway point of the trading day, the DJIA DOW (+40), S&P 500 SPX (+7), and NASDAQ (+23) are all holding firm in the green. Boosted by a stronger-than-expected Goods Trade Balance Report (Oct.), U.S. stocks are extending yesterday’s bullish sentiment.

In the coming 24 hours, liquidity in the equities and commodities markets are likely to fall off as the Thanksgiving holiday approaches. However, this morning featured several key economic metrics and decent participation. Here is a quick look at the highlights: 

Event                                                                 Actual      Projected      Previous

Goods Trade Balance (Oct.)                          $-66.53B           NA               $-70.55B

New Home Sales Change (MoM, Oct)            -0.7%             1.1%                4.5%

Richmond FED Manufacturing Index (Nov.)   -1                   -1                       8

The headliner of today’s economic reports is the shrinking Goods Trade Balance from October. The number showed a $4 billion improvement in the U.S. trade deficit over September. While this figure isn’t the most important report addressing foreign trade, it is a positive given that the signing of “Phase 1” of the U.S./China trade deal has been delayed.

USD/JPY Rallies Following Trade Deficit News

For the second session in a row, the USD/JPY has been on the march north. Rates are above the 109.00 handle and appear poised to test the daily Double Top pattern (109.47-48).

Here are a few levels to watch going into the Wednesday session:

• Resistance(1): Double Top, 109.47-48
• Support(1): Daily SMA, 108.80
• Support(2): Bollinger MP, 108.76

Bottom Line: If we see the bullish sentiment continue to dominate the USD/JPY , a shorting opportunity from the Daily Double top may come into play by the end of the week. Until elected, I will have sell orders queued up from 109.44. With an initial stop at 109.78, this trade produces 30 pips on a slightly-sub 1:1 risk vs reward ratio.