A slowing job growth proved to be no concern for the market on Friday, pushing all four indexes into new record territory.  The rapidly rising pandemic infection rate, the death toll is, however, forcing states to increase restrictions as hospitalizations strain the capacity limits of the health care system.  That said, no price seems too high as investors rush into stocks focused on stimulus hopes, vaccine news that points to 2021 recovery.  However, at this elevation, if the market stumbles, the resulting pullback could be very painful if the market does suddenly decides we have pushed too high too quickly in anticipation.

Asian markets closed in red across the board overnight.  European markets trade mixed as they push forward with last-ditch Brexit efforts.  U.S. futures trade lower this morning but are will off the overnight lows as the morning lows as institutions try to keep investors buying, predicting a 2021 spring economic restart. 

Economic Calendar

Earnings Calendar

We have several notable companies fessing up to quarterly results on the Monday earnings calendar.  Notable reports include CASY, HQY, JKS, SFIX, SUMO & TOL.

News & Technicals’

Even with a sizable miss on the jobs front, the market continued to surge higher, setting new record highs on all four indexes.  Futures markets are currently looking a bit lower this morning but have already bounced off the morning lows with the morning pump-up underway.  As investors work the price, the market for a hopeful spring recovery of the pandemic rising oil prices becomes noticed at the gas pumps, with the national average price rising $0.04 a gallon.  Simultaneously, the White House health advisor says this winter will be the worst event that this country has faced.  California has issued a statewide stay at home order, and states around the country continue to ramp up restrictions measure to combat the spread. 

Trends remain very bullish, and there seems to be a non-stop barrage from institution headlines predicting a massive restart to the economy in 2021.  I certainly hope they are correct, but that has created a potentially dangerous short-term overbought condition.  The T2122 indicator continues to warn that a pullback could begin at any time; however, stimulus hopes, vaccine news, record holiday salse, and 2021 predictions have investors willing to ignore the current pandemic economic impacts.  How long this can continue is anyone’s guess but be careful not to overtrade because one day, the market may suddenly decide to care about the impacts, and the technical supports are a long way from current prices.

Trade Wisely,

Doug