Indexes hold key supports.

Although a slow and choppy day the indexes hold key supports as they waited for after the bell earnings reports.  Of course, the tech behemoth GOOG was the most anticipated, and once again the company sailed past estimates gaining nearly $50 a share in aftermarket trading.  Futures that flat-lined all day became decidedly bullish and maintained that stance through the night.  Asian and European markets were also bullish overnight and helping the Futures that are currently suggesting a substantial gap up open.

Be careful not to get caught up in earnings euphoria and chase into stocks that are near resistance levels.  Remember, that warm and fuzzy feeling we get from good earnings reports can quickly reverse with so many companies reporting.  I’m not hoping for or anticipating that I’m only reminding everyone we need to remain flexible,  focused and prepared to adjust with market conditions.

On the Calendar

The only potential market-moving report on the Tuesday’s Economic Calendar is the 9:45 AM PMI Composite Flash Report.  Consensus expects the PMI Composite to come in at 56.3, manufacturing at 54.9 and PMI services at 56.4 for July.  We have the FHFA Housing Price Index at 9:00 AM, the Richmond Fed Manufacturing Index at 10:00 AM and two Bond Auctions at 11:30 AM & 1:00 PM to finish up the day.

Earnings reports continue to ramp up with 144 companies reporting today.

Action Plan

Yesterday’s price action was mind-numbingly slow and choppy waiting for the after the bell earnings reports topped by GOOG.  After the reports, the Futures became decidedly bullish and remained so all night.  Asian and European markets also took the queue trading higher across the board.  As I write this, the Dow futures are pointing to a substantial gap up of nearly 100 points.  However, with a large number of earnings reports before the bell this morning that could certainly change.

GOOG blew the doors in its earnings report lending credence to the bullish anticipation of this quarters tech results.  Financial’s were also a bright spot for the market yesterday with many of the big banks starting to recover breaking multimonth downtrends.  With so many companies reporting this week keep in mind that price action can be very fast and challenging to trade even for experienced traders.  While it’s true, the market looks bullish and likely to gap up today that can easily reverse as companies report.  Stay nimble and plan your risk carefully.

Trade Wisely,

Doug