It was an overall dull trading day until the news that the US Treasury plans to burrow 3 Trillion this quarter.  I guess that was music to the ears of the market, creating a sharp rally recovering yesterday’s losses to close in the green.  The bullish energy stayed with the futures all evening and now points to substantial gap up open ahead of earnings and economic data.

Asian markets closed mostly higher despite the big hit Hong Kong reported in the first quarter.  European markets are in rally mode this morning as more virus restrictions lifted, and the hope of recovery grows.  US Futures suggest a Dow bullish gap of nearly 250 points reversing yesterday’s selloff and proving support of the DIA and IWM 50-day average. 

Economic Calendar

Earnings Calendar

With new additions, the Tuesday earnings calendar expects more than 375 reports today.  Notable reports include NEM, DIS, ATVI, AOS, ALK, AGN, ALL, BYND, BCO, CAKE, CC, DVA, DVN, D, DD, EA, FACU, FLR, ITW, I, J,  KGC, LC, TREE, LGIH, MPC, MAT, OXY, PINS, PLNT, PRU, REGN, RCL, STOR, SU, SYY, TRIP, W, WU, & WYNN.

Technically Speaking

It was a pretty bleak day yesterday with light and choppy price action until the report came out that the US Treasury planned to burrow a record 3 Trillion this quarter.  After the news, the market rallied strongly, confirming the market has no concern about debit as long as the money keeps flowing to the market.  The bullish energy continued overnight with the futures market rising, pointing to a substantial gap up open reversing Monday’s selloff.  California, Wahington, joins other states in getting back to business with limitations and new social guidelines.  The market seems to have gains some energy on the reopening even though many suggest its too early, worrying about the 2nd round of increasing infections.  Even Congress has returned to work wearing masks and indicating no more closures of the government. I’ll let you decide if that’s good news or not!

By the close yesterday, the DIA & IWM proved the 50-day average as support with this morning’s follow-through providing some conformation of the hold.  We have a big day of earings with over 375 companies reporting, but I’m not sure that matters.  We rally on good earnings reports, and we rally on bad earings reports choosing to focus on the trillions of governmental spending.  I guess massive debt negative earnings growth and 30 million unemployed is no match for the apparent unlimited checkbook of the government.  One has to wonder about the long-term ramifications of these decisions.  That said, the trend is bullish, the hold of support levels provides conformation, and we as traders must focus on the price action of the charts.  I don’t need to understand it or agree with the market decisions as long as I set aside my bias and trade the price action.

Trade Wisely,

Doug