The bears found the energy to defend overhead resistance yesterday, leaving behind some dark cloud cover and bearish engulfing patterns overnight.  That said, it now looks as if the institutions were setting a bear trap as they began pumping up the futures moments after the closing bell rang.  Unfortunately those pesky bond rates are not retreating this morning, and the mortgage applications have stalled as a result.  Perhaps like the 21 million unemployed, higher long-term rates no longer matter as long as the government continues to flood the economy with newly printed money. 

Asian markets surged higher overnight, with Hong Kong leading the way closing up 2.70%.  European markets also have on their bullish caps this morning as they await U.K. budget plans.  U.S. futures point to a strong overnight reversal that could create another short squeeze with ADP numbers just around the corner.

Economic Calendar

Earnings Calendar

The number of earnings reports bump up slightly today, with 59 companies expected to fess up to quarterly results.  Notable reports include AEO, DLTR, MRVL, OKTA, PDCO, RRGB, SNOW, SPLK, & TCOM, WEN.

News & Technicals’

Although the bulls made several attempts to break overhead resistance levels in the index charts, the bears sustained enough energy to defend and repel each push.  However, almost immediately after the close, institutions went to work pumping the futures to trap remaining short sellers this morning with a substantial gap up in play this morning.  Twenty and thirty-year bonds retreated ever so slightly yesterday, but this morning yields don’t appear to be cooperating with the bullish sentiment tenaciously holding strong.  Perhaps, like the 21 million Americans unemployed, we can add the rising bond rate to the list of things we can ignore and no longer matter as long the government continues to flood the economy with money skyrocketing the debt.  The White House says the U.S. will have enough vaccine for all adults by the end of May and has ordered all educators to receive at least one shot by the end of March to get schools reopened. 

ON the technical front, resistance levels held yesterday, leaving behind concerning darkcloud cover patterns and even a bearish engulfing pattern on the QQQ closing once again below its 50-day average.  Look closely, and the QQQ has the hint of a head and shoulder pattern beginning to develop.  That said, it now looks as if the institutions set a bear trap going to work immediately after yesterday’s close, pumping up the futures.  Mortgage applications demand number in this morning indicate demand has stalled due to the rising rates, and I would suspect also playing a role is the rapidly rising housing costs.  Don’t worry about that, though, because the Fed says there is no inflation.  Okay, sorry for the sarcasm.  With the ADP report, ISM Services, Petroleum Status, Beige Book, and those pesky bond rates stay on your toes as they try to fire off another morning short-squeeze.

Trade Wisely,

Doug