Big Week of Data

The market faces a very big week of Economic data and earnings reports to keep traders on their toes.  On Wednesday we have an FOMC interest rate announcement and Friday the big Employment Situation report.  With all the rumors of slower sales, AAPL earnings will be the center of attention after the bell on Tuesday.  AAPL has a huge weighting in not only the QQQ but the DIA and SPY as well.  Suffice it to say if AAPL misses estimates the overall market will feel the impact.

With the DIA, SPY and QQQ’s still below the daily 50-simple-moving-average this week could be critical.  It could serve as the inspiration for Bulls the break-through resistance or give the Bears the energy to push the overall market lower.  Traders should prepare for an extra dose of price volatility this week as the market reacts to all this data.  Fast price action, intraday whipsaws, and big opening gaps that could create full-on reversals are definitely within the realm of possibility this week.  Plan your risk carefully and stay focused on price action clues.

On The Calendar

The Economic Calendar begins the last trading day of April three important reports.  At 8:30 AM Eastern Personal Income and Outlays should jump as much as 1.6 to 2.0 % hitting the FOMC’s price target according to consensus estimates.  Personal income is also expected to rise 0.4 percent.  The Chicago PMI at 9:45 AM expects a slight increase to 57.8 vs. the 57.4 reading in March.  Pending Home Sales comes out at 10:00 AM and expects a 1.0 percent increase in March to follow up the big 3.1 percent jump in February.  After that, we have the Dallas Fed Mfg Survey and three bound events which are not expected to move the market.

Action Plan

With so many Earnings and a calendar full of big economic data, this could be a week of big gaps and fast price action.  Futures currently point to a bullish open but let’s keep in mind that three of the four major indexes have significant resistance above.  Also, keep in mind with the big jump expected in Personal Income and Outlays report there is the possibility that interest rate fears could once again influence trading.

AAPL could be a big driving force this week, and all eye will be focused there after the bell on Tuesday.  Expect a big gap up or down Wednesday morning depending on the results.  The FOMC announcement on Wednesday afternoon with also have the market on edge not to mention the Friday Employment Situation report and well over 1000 companies reporting.  Volatility could become very challenging with whipsaws and morning gap reversals so plan your risk carefully.

Trade Wisely,

Doug