Another day and another record close for the DIA, but it’s not all the sunshine and roses the bulls hoped for as the NASDAQ continues to languish below the 50-day average.  With the 10-year Treasuries topping 14-month highs this morning, inflation worries could once again weigh heavily on the tech sector, adding an uncomfortable level of market uncertainty.  Leaving behind a mixed bag of results in the indexes, it’s hard to be a committed bull and just as hard to be a committed bear.  That said, traders should prepare for more volatile price action such as intraday whipsaws or complete reversals.

Asian markets closed with modest gains across the board overnight, with the HSI leading the way up 0.84%.  European markets are also bullish across the board this morning, showing modest gains.  With bond rising and a Consumer Confidence report at 10 AM, Eastern U.S. futures currently point to a mixed open.  Stay focused and flexible as investors sort out their inflation concerns.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 76 companies listed, but a significant number of them have not verified once again.  Notable reports include CHWY, BEEM, BNTX, BB, FDS, LULU, MKC, PVH, QUWI, & XL.

News and Technicals’

Another record close of Dow after a choppy price action day with the VIX climbing back above 20 handles.  The 10-year Treasuries is once again pushing higher, hitting a 14-month high touching 1.77%.  In a joint letter published in newspapers worldwide, global leaders called for a pandemic treaty to improve cooperation and transparency.  Signers to the letter included Prime Minister Boris Johnson, French President Emmanual Macron, and German Chancellor Angela Merkel. The U.S., China, and Russia have not signed on the Idea as of now. 

We had a mixed bag of results in the indexes yesterday, with the DIA closing at record highs while IWM left behind a bearish evening star pattern.  The bulls fought pretty hard in the QQQ lifting the index to its downtrend, printing an unconvincing hanging man pattern at resistance as it continues to struggle beneath the 50-day average.  Recovering from early losses, the SPY tried to breakout but by the end of the day settled back to close below Friday’s close, unable to follow-through but perhaps just taking a rest above a price support level.  Unfortunatunally, the VIX popped back above 20 handles, and the absolute breadth indicator indicated a lack of bullish momentum with more stocks declining or moving sideways than rising.   Futures are mixed this morning, with rising bond rates likely rising inflation concerns once again.  A few notable earnings reports and a reading on Consumer Confidence numbers are ready for yet another day of volatile price action.

Trade Wisley,

Doug