After a turbulent morning session dominated by bears, the bull won the day, triggering a relief rally to squeeze out short traders as they took profits.  However, anything is possible with a jam-packed day of market-moving earnings and economic reports.  So, keep a close eye on overhead resistance and support levels as the market react to all the data and prepare for possible gappy market opens the rest of the week as the tech giants report.   Price action will likely be challenging as the drama unfolds with so much at stake.  Plan your risk carefully!

Asian markets trading mixed during the night as many of the big banks downgraded the growth potential of China as the lockdown continues.  However, European markets see green across the board this morning despite a Russian nuclear threat.  U.S. futures point to a bearish open with the uncertainty of earnings and economic data ahead.

Economic Calendar

Earnings Calendar

Big Tech will highlight the earnings reports on Tuesday, with nearly 200 companies listed on the Tuesday calendar.  Notable reports include GOOGL, MSFT, MMM, ADM, ARCC, AVY, BYD, CNI, CAI, COF, CNC, CMG, CB, GLW, DHI, ENPH, EQR, EXAS, FFIV, FANUY, GE, GM, HUBB, JBLU, JNPR, MDLZ, MSCI, NAVI, NTRS, NVS, PEP, RRC, RTX, SHW, SSTK, SKX, TER, TXN, TRU, TZOO, UBS, UPS, VLO, V, WM, & WH.

News & Technicals’

According to the top Russian official, “ the threat of nuclear war is real after the U.S. expressed the desire to see Moscow weakened.   On Monday, the Twitter board agreed to a $44 billion buyout from Tesla CEO Elon Musk.  However, few additional details are known, leaving users and employees uncertain about the future.  In addition, the Tesla CEO has shared little about how he plans to improve Twitter, though he’s offered many criticisms.  As a result, it’s unclear who will lead the company under Musk’s ownership or what is ahead for the company’s workforce.  Twitter Chief Executive Parag Agrawal told employees on Monday that the future of the social media firm is uncertain after the deal to be taken private under billionaire Elon Musk closes.  He was speaking at a town hall meeting that Reuters heard.  “Once the deal closes, we don’t know which direction the platform will go,” Agrawal said.  Donald Trump said he wouldn’t return to Twitter on Monday even if Elon Musk reversed the former president’s ban.  “I was disappointed by the way Twitter treated me.  I won’t be going back on Twitter,” the former president told CNBC’s, Joe Kernen.  Twitter permanently suspended Trump from the platform in January 2021 following the attack by his supporters on the U.S. Capitol.  Several economists at major investment banks have cut their China growth expectations in just about a week.  The new median forecast among nine financial firms tracked by CNBC expects 4.5% China GDP growth for the full year.  Nomura had the lowest forecast, while UBS cut its estimates the most.  Treasury yields continued to dip slightly in early Tuesday trading, with the 5-year trading at 2.82%, inverted over the 10-year at 2.78%, and the 30-year pricing at 2.86%.

On Monday, the bears dominated the early trading session to test 2022 lows, but bulls won the day, triggering a nice relief rally as short traders took profits.  We have a jam-packed economic calendar today coupled with the massive anticipation of the big tech earnings from MSFT and GOOGL after the bell.   The tech giants will continue to report throughout the week, keeping traders guessing and the price action volatile.  Significant point gap up or gap down opens could occur as a result, so plan your risk carefully as the drama unfolds.  As we rally, respect overhead resistance levels and avoid the fear of missing and the desire to chase stocks that could gap substantially, vastly increasing the risk.  Disappointing reports could also create huge point intraday whipsaws, so plan your risk carefully and be careful not to overtrade. 

Trade Wisley,

Doug