Although the 2-day short squeeze rally relieved selling pressure to end the week, it did little to improve the technical picture of the index charts, with substantial overhead resistance and downtrends still in force.  The QQQ looks to join the IWM with the 50-day average ready to cross its 200-day to the downside.  With Ukrainian and Russian officials meeting in hopes of finding some common ground and a hectic week of market-moving, economic reports expect the wild price gyrations to continue.  Intraday whipsaws and complete overnight reversals are likely as the drama of this week unfolds.

Overnight, Asia began their trading week mixed but mostly bullish in a muted session as oil prices surged 4%.   However, this morning, European markets are decidedly bearish, with red across the board as new sanctions against Russia impact investor sentiment.  Ahead of International Trade figures and a slew of earnings reports, U.S. futures point to a substantial gap down at the open.  Keep in mind overnight futures lows could easily receive a test during the day.

Economic Calendar

Earnings Calendar

We have about 200 companies listed on the earnings calendar to kick off the new trading week.  Notable reports include DDD, AAON, ACAD, AMBA, BLNK, BRMK, CIVI, CWEN, DNMR, DVAX, ENDP, FRPT, GDPN, HPQ, KD, RIDE, LCID, LAZR, MBI, NVAX, OKE, PRTY, PDCE, PUBM, SBAC, SDC, & WDAY.

News & Technicals’

The ruble was trading as low as 119 per dollar as offshore trading started on Monday morning during Asia hours, from nearly 84 per dollar the previous day, according to Factset data.  Russian President Vladimir Putin put his country’s nuclear deterrence forces on high alert Sunday.  Last week, President Joe Biden responded to Russia’s unprovoked attack on Ukraine by announcing several rounds of sanctions on Russian banks, on the country’s sovereign debt, and Putin and Foreign Minister Sergey Lavrov.   Ukraine’s President Volodymyr Zelenskyy believes the next 24 hours will be a “crucial period” for his country.  Ukrainian troops, and citizens that have taken up arms, continue to fight to invade Russian forces.  As a result, Russia has been hit with a massive round of sanctions isolating its economy and financial system.  In addition, the start-up announced Monday that U.S.-listed Chinese electric car company Nio is set to offer its shares for trading in Hong Kong on March 10.  The move comes as regulatory risks grow in the U.S. and China for Chinese companies listed in New York, adding compliance challenges for businesses and investors.  “Based on the foregoing and as advised by our PRC Legal Adviser [Han Kun Law Offices], we are of the view that the Cybersecurity Review Measures will not have a material adverse effect on our business, financial condition, operating results, and prospects,” the electric car company said in a filing with the Hong Kong stock exchange.  Treasury yields fell sharply in early  Monday trading, with the 10-year sliding to 1.9004% and the 30-year declining to 2.2270%.

The massive 2-day rally to wrap up last week’s volatility relived selling pressure as it tested some overhead resistance levels but unfortunately did little to improve the price and technical damage in the index charts.  Increasing sanctions against Russia created currency fluctuations, with the ruble sharply declining to cause their central bank to impose 20% interest rates.  According to reports, the next 24 hours will be critical as the Russian and Ukrainian officials meet to find common ground and begin a cease-fire.  However, Putin put his nuclear facilities on high alert, heading into talks.  Expect the uncertainty to matain the wild price volatility and respect overhead resistance levels with overall market downtrends holding despite the big 2-day rally.  We have more inflation reports coming out on Tuesday, with Powell testifying in congress Wednesday and Thursday to add market stress, then ending the week with the Employment situation numbers.  So buckle up for another uncertain week where volatile is likely to remain high and where daytraders have the upper hand. 

Trade Wisely,

Doug