Stimulus hopes once again fueled the bulls to surge right back into price resistance levels after the President stated he would support $1200 direct payments to taxpayers and another 25 billion for airlines.  However, it’s unclear at this time if Congress can come to an agreement before the election.  Should they fail, it could quickly produce another whipsaw down, so plan your risk carefully because price support levels are now quite a long way away.

Asian markets closed mixed but mostly lower overnight.  However, European markets show some relief trading green across the board as they monitor US stimulus hopes.  Ahead of the latest reading on Jobless Claims, US Futures look to extend yesterday’s significant reversal pointing to another gap up open with $1200 stimulus checks hopes dangling before them.

Economic Calendar

Earnings Calendar

We have our biggest day of earnings this week, but still, only 9 confirmed quarterly reports.  Notable reports include AYI, CCL, DPZ, & HELE.

News & Technicals’

With the hopefulness of more stimulus, the market surged back into price resistance, pushing the T2122 indicator back into a possible overbought condition.  The President stated he is willing to sign a stand-alone bill that would send $1200 check to taxpayers and will support a 25 billion package for airlines.  As of now, it’s unclear if or when Congress will proceed with the requested spending bills, but the anticipation has the bulls running.  Regeneron has asked for emergency approval for the coronavirus treatment taken by the President.  In a statement, the President said he intends to make the virus vaccine free to US Citizens and, in the same breath, blamed China for the pandemic.

Closing at or near price resistance levels yesterday, the US Futures look to extend that rally this morning, pointing to yet another gap up open. Yesterday’s rally significantly improved the technical picture in the index charts with the SPY and QQQ recovering their 50-averages as support.  That said, the huge reversal also adds significant risk for those chasing the rally with price support so far away.  The market has proven its sensitivity to the news report on the subject of the stimulus.  Stay focused, and remember we are only one tweet or one news story away from another possible whipsaw back down.  Plan your risk carefully!  The stimulus is not a done deal and there is concern that Congress may not agree before the election.  The market will be focused on the Jobless numbers calendar this morning and could change how the market opens this Thursday so, prepare for more volatility.

Trade Wisley,

Doug