While traders enjoyed a three-day weekend, the jobs report blew past consensus expectations adding 916,000 in March. That has the bulls working hard in the premarket point strong bullish open to follow the light volume but record-setting Thursday close. On the bullish side, the VIX is finally breaking down, but on the bearish side, treasuries ticked higher as inflation worries continue due to the vastly stronger than expected jobs number. Though we will set new records at the open, be careful not to chase already extended stocks.
Overnight Asian markets rallied to close green across the board, with the HIS leading the way, up 1.97%. European markets are also showing modest bullish across the board this morning, with tech shares gaining favor. Ahead of a light day of earnings & economic reports, the U.S futures point to a substantial gap up of more than 200 Dow points. Buckle up; it could be a somewhat volatile price action morning.
Economic Calendar
Earnings Calendar
We have 23 companies listed on the earnings calendar to kick off this week, but there are only 3-verified. Notable reports include LNN, MAXN, & PAYX.
New & Technicals’
During the Friday Easter shut down, the monthly government jobs report blew past the expectations, with payrolls jumping 916,000 in March. As a result, the U.S. Treasury yields edge higher in reaction to the strong jobs report’s performance due to inflation worries. Senator Roy Blunt on Sunday urged President Biden to cut his $2 trillion infrastructure plan to $615 billion with a focus on rebuilding physical infrastructure. Kevin O’Leary, chairman of O’Leary ETFs, calls for the U.S. to be “extremely aggressive” to level the playing field with China. He says that could include delisting Chinese stocks and shutting Chinese companies out of the U.S. court system. I suspect we will hear a lot more about this subject in the near future as tensions between the U.S. government & businesses grow against Chinese practices.
Although a light volume day, the SP-500 found a path to a new record high, topping 4000 for the first time in history. The Dow set another new record as well as the QQQ and IWM lagged behind. With the strong jobs report and the anticipation of a bullish 2nd quarter earnings season, the bulls should have the upper hand as long as inflation worries stay in check. With the DIA and SPY working together again, the lagging QQQ is less of a concern, but it would wise to respect the overhead resistance if bonds continue to rally. With the VIX finally falling below support levels, perhaps, we can get past some of these wild whipsaws and get a bit more confidence in the price action. Unfortunitually, the T2122 indicator is already in a short-term overbought condition, with the gap up this morning suggesting an extreme extension, so be careful not to chase already extended stocks in fear of missing out.
Markets gapped up Thursday, in particular the QQQ which gapped-up 1.3% following the overnight rollout of President Biden’s infrastructure plan and a higher-than-expected Weekly Jobless Claims number. After the open, all three major indices ground sideways the rest of the day. This ended in a ally to the highs the last half-hour of the day. This left us with a potential Hanging Man candle in the DIA and strong white bullish candles in the SPY and QQQ. On the day, DIA gained 0.38%, SPY gained to 1.08% (new all-time high), and QQQ gained 1.70%. The VXX lost another 3% to 11.05 and T2122 spiked back up deep into the overbought territory at 93.39. 10-year bond yield fell slightly (after again rising over night) to 1.714% and Oil (WTI) rose 3.5% to $61.24/barrel.
On Friday the Nonfarm Payrolls report for March came in 300,000 jobs better than was expected (at +916,000) as unemployment fell to 6%. January and February totals were also revised up by 150,000. In addition, CNBC also reported than their informal survey of economists are expecting spectacular growth in Q2 (they estimate a 10% average GDP growth). This may be great news for stock prices in Q2, but could also lead to inflation faster than has been expected…which may lead to Fed tightening faster than they have repeatedly claimed. So, as usual, there are arguments on either side of the market.
Over the weekend, TSLA announced it shipped 184,000 vehicles in Q1 while producing 180,000. All cars produced were Model 3 sedans or Model Y SUVs as production of Models S and X stopped. For reference, GM shipped 642,250, F shipped 521,350, and Stellantis (Dodge/Jeep) shipped 469,650 during the quarter. In other news, big Tech and social media companies are facing another PR nightmare as Sunday reports came out that details from about 500 million FB accounts have been found on the internet available to hackers. In another nightmare for a business, after denying it at first, AMZN admitted that their delivery and warehouse workers have been forced to urinate in bottles, because making a trip to a restroom would hurt their performance standards rating and impact their pay. In the admission, AMZN said this is a long-standing and industry-wide issue.
Related to the virus, US infections are rising again after plateauing at a level above the fall plateau. The totals have risen to 31,420,331 confirmed cases and deaths are now at 568,777. The number of new cases has ticked higher again to an average of 63,471 new cases per day. However, new deaths are trending down again, now at 833 per day. On Friday, the CDC said travel for fully-vaccinated and masked people is low risk. The Hospitality, Travel, and Tourism industries cheered loudly at this announcement. On Saturday, the CDC said a record 4.1 million vaccinations were administered and the 7-day average is now over 3 million/day.
Globally, the numbers rose to 131,993,083 confirmed cases and the confirmed deaths are now at 2,867,681 deaths. The trends have reversed and are now trending toward trouble again as we have seen significant upticks recently. The world’s average new cases are rising again (about 10,000 per day) and are now at 585,951 per day. Mortality, which lags, also ticked up, now at 9,822 new deaths per day. In South America, Chile has registered a record number of new cases each of the last several days. Brazil continues to see record numbers of covid deaths, but the ICU bed occupancy has started to lessen slightly (still over 90%) at least in Rio de Janeiro. In Europe, the UK has said the public can return to sporting events later in April and they will create a “fully vaccinated” travel passport. In less good news, the UK announced it has found 30 cases of blood clots (25 more than had previously been made public) after AZN vaccinations, which has renewed the debate over AZN vaccine safety in the UK and Europe.
Overnight, Asian markets were mixed. Hong Kong (+1.97%) and Shenzhen (+1.02%) paced the gainers while India (-1.54%) and Thailand (-1.04%) led the losses. In Europe, Russia (-0.92%) is the only exception to green across the board (on modest moves) so far Monday. The FTSE (+0.35%), DAX (+0.66%), and CAC (0.59%) are typical of the continent at mid-day. As of 7:30 am, US Futures are pointing to a solid green open after Friday’s blowout jobs report. The DIA is implying a +0.71% open, the SPY implying a +0.58% open, and the QQQ implying a +0.44% open.
The major economic news scheduled for Monday is limited to Mar. Service PMI (9:45 am), Feb. Factory Orders and ISM Service PMI (both at 10 am). There are no major reports scheduled for the day.
Overnight markets seem to be pointing higher after huge gains in the Jobs Report delivered on Friday when the market was closed. Bond yields also ticked higher overnight, likely also reacting to the Jobs report and its implied potential for inflation. So, beware of volatility as both the bulls and bears have something to hang their hats on today.
With that said, the trend remains strongly bullish in the short and longer terms. So, follow the market trend, respect both support and resistance, and don’t chase the moves you missed. Be sure to follow your trading rules, because consistency is the key to long-term trading success. Keep taking trade goals (profits) off the table when you can, stick to your rules, and maintain that discipline.
Ed
Swing Trade Ideas for your consideration and watchlist: CVX, WTI, GUSH, LUV, DVN, FANG, MRO, BKD, EOG, CSCO, TGT, ALLY, ANF, TRQ. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Yesterday registered a substantial surge into big tech, but the bullishness fell short of breaking through its 50-day average and remains challenged by significant overhead resistance. With bonds remaining stubbornly bullish after the unveiling of the infrastructure proposal, the question is, can we get a day of follow-though? Keep in mind with everyone thinking about the 3-day weekend ahead, the volume could become light and price action choppy after the morning economic news reaction.
Overnight Asian markets closed green across the board, lead by Hong Kong surging nearly 2%. European indexes trade modestly bullish this morning as they await several data releases. On the first trading day of April U.S. points to modest gains ahead of Jobless Claims and ISM numbers as we slide toward the Good Friday shutdown. Plan your risk carefully.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have 36 companies listed, but the majority are unconfirmed. Looking through the list, I can only come up with one notable report coming from KMX.
News & Technicals’
There was a surge into big tech yesterday, but overall it was a mixed bag of results, with profit-takers coming in at the close. President Biden’s $2trillion infrastructure is getting a mixed response as worries about the significant tax increases will slow economic and job recovery. Microsoft won a $21.9 billion contract for augmented reality headsets giving the stock a boost into yesterday’s close. Although the 10-year treasuries softened a bit yesterday, they stubbornly hold above 1.71% as inflation concerns continue.
While there was a general sense of bullishness in the market yesterday, in reality, the DIA, SPY, and IWM were in a resting mode while big tech enjoyed a substantial surge of energy. However, at the end of the day, the QQQ could not break above its 50-day average and still has considerable overhead resistance. The SPY missed setting a record high by just a few ticks and then ran into some profit-takers, which honestly surprised me during the end-of-quarter window dressing. The Absolute Breadth Index continues to raise the concern that overall momentum is lacking, and the nasty whipsaw of late keeps us guessing what comes next as the VIX chops with uncertainty. Plan your risk carefully as we head into the Good Friday shutdown and the 3-day Easter weekend.
The large caps gapped slightly higher while the QQQ gapped up about half a percent. The large-caps then ground sideways the rest of the day while the QQQ saw some follow-through before starting its sideways grind at 11am. All three backed off the highs at the end of the day. This left all three with upper wicks. On the day, SPY gained 0.41%, DIA lost 0.19%, and QQQ gained 1.53%. The VXX fell again to 11.40 and T2122 roe a bit but remains in the mid-range at 60.29. 10-year bond yields rose to 1.739% and Oil (WTI) fell almost 2% to $59.39.
After the close, President Biden announced his $2.25 trillion infrastructure plan. It calls for $621 billion in transport infrastructure, $580 billion into manufacturing (R&D and job training), $300 billion for drinking water infrastructure, $300 billion into affordable housing construction, and $400 billion for care of elderly/disabled Americans. The primary way it proposes paying for the plan is the reversion of the Corporate tax rate from 21% to 28% (it was 35% through 2017).
In other government news, after hours, Treasury Sec. Yellen has restarted the hedge fund regulatory panel as part of an overhaul of financial regulation systems. Also included in the oversight mandate of this panel will be the Treasury bond, Mutual Fund, and Money Market segments of Wall Street. This came as the SEC also announced it has opened a probe into the Archegos fund that caused the massive block trades Friday-Tuesday due to margin call on that fund’s levered positions.
Related to the virus, US infections are rising again after plateauing at a level above the fall level. The totals have risen to 31,166,344 confirmed cases and deaths are now at 565,256. The number of new cases has jumped higher again to an average of 65,308 new cases per day. However, new deaths are mostly flat at 932 per day. In vaccine news, a trial of the MRNA vaccine booster shot aimed at the South African variant is now underway. In addition, PFE announced that the ongoing Phase 3 trial has shown its vaccine protection lasts at least 6 months (better than the 90-day estimate the company originally offered) and also appears to be 91% effective against the South African variant. In other related news, GOOG also announced that it is speeding up reopening offices and will put limits on future remote work. DAL also told reporters that it is eliminating empty middle seats due to a surge in air travel demand.
Globally, the numbers rose to 129,606,380 confirmed cases and the confirmed deaths are now at 2,830,726 deaths. The trends have reversed and are now trending toward trouble again as we saw a significant uptick today. The world’s average new cases are rising again (about 10,000 per day) and are now at 575,440 per day. Mortality, which lags, also ticked up, now at 10,041 new deaths per day. French President Macron called for another national lockdown as cases have spikes. Meanwhile Austria is signing a deal to buy 1 million doses of the Russian Sputnik vaccine amid AZN deadline misses and general vaccine shortages.
Overnight, Asian markets were green across the board, with the lone exception of New Zealand (-0.58%). Hong Kong (+1.97%), Shenzhen (+1.46%), and India (+1.20%) led the gainers, but the surge was about two-thirds of a percent on average. In Europe, we see green all the way across the board so far today. Some of the smaller exchanges are running faster, but the FTSE (+0.49%), DAX (+0.35%), and CAC (+0.25%) are fairly typical of the continent at this hour. As of 7:30 am, US Futures are also pointing to a green, if uneven, open. The DIA (+0.02%) is flat, while the SPY is implying a +0.28% open and the QQQ is implying a +0.95% open.
The major economic news scheduled for Thursday is limited to Weekly Jobless Claims (8:30 am), Mfg. PMI (9:45 am), and ISM Mfg. PMI (10 am). Major earnings reports for the day are limited to KMX before the open. There are no major reports after the close.
Bond rates came down significantly overnight but remain above 1.71%. With only Weekly Jobless Claims to come as a different driver, the market action today may be a referendum on the specifics of the President’s proposed infrastructure plan or the tax scheme that is proposed to pay for that investment. So, beware of volatility.
As we always say, consistency is the key to long-term trading success. So, keep taking trade goals (profits) off the table when you can, stick to your rules, and maintain that discipline. Be sure to follow your trading rules, follow the market trend, respect both support and resistance, and don’t chase the moves you missed. And if you don’t have an edge (like being on the right side of a trend), then think twice before trading.
Ed
Swing Trade Ideas for your consideration and watchlist: No tickers today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
This afternoon President Biden will unveil his more than $2 trillion infrastructure proposal as the first part of his recovery plan. If approved, it will raise the Corporate Income tax to 28%. Inflation concerns continue to weigh on investors’ minds, with the 10-year treasuries holding above 1.73% and the Case-Shiller, showing that housing prices grew faster over year over year over more than 15 years. Jobs data will be in focus the rest of the week, with Private Payrolls coming in before today’s open.
Overnight Asian markets saw declines across the board after coming under criticism for withholding pandemic data in its report to the WHO. European markets trade with modest losses this morning, worried about rising inflation. Ahead of a busy day of earnings, economic data, and the unveiling of the infrastructure plan, U.S. futures point to flat and mixed open.
Economic Calendar
Earnings Calendar
On the hump day earnings calendar, we have more than 100 companies listed, but a considerable number of them are not verified. Notable reports include WBA, MU, AYI, AESE, FUV, CONN, DGLY, GES, NG, & VRNT.
News and Technicals’
President Biden will unveil his infrastructure plan with more than $2 trillion in government spending over the next 8-years. Included in the proposal is a Corporate Tax increase to 28%. The second part of his plan will include Health Care and child care spending of another $2 trillion. The Amazon-backed food delivery company, Deliveroo, had a rough beginning in its London IPO, dropping over 30%. Those pesky 10-year Treasury bonds pulled back slightly yesterday but currently holding a 1.73% keeping the pressure on inflation worries. The Fed is also under pressure after the Case-Shiller Index posted housing prices were up 11.2% year over year, which is the most significant annual increase in more than 15-years. Critics point out the Fed is responsible for the sharp inflationary spike in housing due to its commitment to near-zero rates and its continued buying of mortgages- backed securities that total more than $2.2 trillion. The Fed now owns a full 1/3rd of the mortgage-backed securities market!
On the technical front, the DIA trend remains very bullish, and SPY is in good shape holding above price supports though it still struggles to join in on the record-breaking levels. IWM had a good day with the bulls defending critical price support as the financial sector gained ground. The QQQ continues to languish under its 50-day average, weighed down by rising bond rates. Jobs data will focus on the remainder of the beginning, with the private payroll number this morning. Keep in mind as you plan your risk forward of the Good Friday market shutdown.
The indecisive chop continued Tuesday with a modest gap-down in the large-caps and a half percent gap-down in the QQQ. After that, all three traded in a volatile range the remainder of the day. It is worth noting that the markets did see a last-minute rally (most likely on the clearance of dark pool trades). All 3 major indices were indecisive, printing Doji candles, but the downtrend remains in tact across those indices. On the day, SPY lost 0.27%, DIA lost 0.25%, and QQQ lost 0.50%. The VXX fell over 4% to 11.49 and T2122 remains in the mid-range at 52.54. 10-year bond yields backed off from overnight 14-month highs to close at 1.71% and Oil (WTI) fell almost 2% to $60.45/barrel.
After hours, it was announced that President Biden will lay out his infrastructure and economic plans on Wednesday. As previously noted, the plan separates the health and child care portions of the Administration’s domestic policy. So, it will focus on roads, bridges, railways, and waterways. However, it will also include modest “green” energy infrastructure proposals and probably most important for market sentiment, the tax proposals to pay for the plan. This is expected to include an increase in corporate tax rates from 21% to 27%.
Also, after hours, the AMZN warehouse union vote in Alabama has now ended. The National Labor Relations Board has begun reviewing the eligibility of the 5,800 votes and ballot counting is expected to begin early next week and last a few days. Still, ballot objections, procedural, and legal challenges and are expected to last quite some time before a decision on the outcome of the vote is known.
Related to the virus, US infections are rising again after plateauing at a level above the fall level. The totals have risen to 31,097,154 confirmed cases and deaths are now at 564,138. The number of new cases has jumped higher again to an average of 65,012 new cases per day. However, new deaths are mostly flat at 977 per day. The CDC reported after the close that nearly 50% of US seniors are fully vaccinated now. AR finally joined the rest of the nation and now all 50 states have announced schedules to open vaccinations to all adults. However, at the same moment AR Gov. Hutchinson also lifted the statewide mask mandate. Finally, early today PFE announced that its vaccine is 100% effective and well tolerated in kids 12-15 years of age.
Globally, the numbers rose to 128,932,176 confirmed cases and the confirmed deaths are now at 2,818,762 deaths. The trends have reversed and are now trending toward trouble again as we saw a significant uptick today. The world’s average new cases are rising again (about 10,000 per day) and are now at 564,934 per day. Mortality, which lags, also ticked up, now at 9,790 new deaths per day. Germany limited the AZN vaccine to people over the age of 60 on Tuesday over blood clot fears. New cases and hospitalizations are rising again in CA, leading to the Ontario Premier to tell people “don’t make plans for Easter.”
Overnight, Asian markets were nearly red across the board. Malaysia (-2.22%), Indonesia (-1.42%), and India (-1.04%) led the losses, but all the major exchanges were also down just less than a percent. The only exceptions were Australia (+0.78%) and New Zealand (+0.92%). In Europe, we are seeing much more of a mixed bag so far today. At this point, the majority of exchanges are modestly red or modestly green. The exceptions are Denmark (+1.99%) and Spain (+1.59%). However, FTSE (-0.22%), DAX (-0.02%), and DAD (-0.24%) are more typical. As of 7:30 am, US Futures are pointing to a mixed, but modestly green open. The large-caps are flat with the DIA implying a -0.10% open and the SPY implying a +0.07% open. However, the QQQ is showing modest gains, implying a +0.56% open.
The major economic news scheduled for Wednesday is limited to ADP Nonfarm Employment (8:15 am), Chicago PMI (9:45 am), Feb. Pending Home Sales (10 am), and Crude Oil Inventories (10:30 am). Major earnings reports for the day are limited to AYI and WBA before the open. Then after the close, GES and MU report.
It was also reported that a slight drop in mortgage rates for the week did nothing to reverse the downtrend in financing activity, which will bleed through to banks and housing names. While there is not a lot of other economic data scheduled for today, the new infrastructure plan (and its payment mechanisms) announcement may have markets waiting on more direction. So, beware of volatility.
If you are trading in this choppy market, be sure to follow your rules, follow the market trend, respect both support and resistance, and don’t chase the moves you missed. Consistency is the key to long-term trading success, not hitting massive winners once in a while. So, keep taking trade goals (profits) off the table when you can, stick to your rules, and maintain that discipline.
Ed
Swing Trade Ideas for your consideration and watchlist: No tickers today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
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.
Markets gapped down modestly on Monday and followed-up with a selloff the first hour. However, this gave way to a late morning rally and an afternoon of more volatility. This left us with indecisive days in the SPY (Spinning Top) and QQQ (Doji) with the DIA being more positive. On the day, SPY closed down 0.05%, QQQ down 0.03%, and the DIA up 0.32% (closing at an all-time high close). The VXX rose over 2% to 12.01 and T2122 fell back into the mid-range at 68.12. Bond yields spiked again as the 10-year yield ended at 1.712% and Oil (WTI) rose over 1% to $61.64/barrel.
In miscellaneous business news, after the close, CNBC reported that TSLA has been double charging some customers for cars and are so far having trouble responding to refund demands. Earlier in the day the Suez Canal was cleared but experts expect it to take a week for the 400-ship backlog to be cleared in the waterway that 15% of global trade passes through. In the air sector, LUV placed an order for 100 of the troubled BA 737 Max plane. Finally, as the quarter winds down, Monday saw more huge dark-pool block trades by the big banks. Today it was WFC making a $2 billion block trade and MS another $500 million block trade. This follows up on $10.5 billion trades by GS, $13 billion by MS, and $20 billion by Achegos Capital (brought on by margin calls from banks on their over-levered positions) Friday that caused massive volatility in some tickers.
Overnight the 10-year bond yield spiked to a 14-month high of 1.77%. This may be a catalyst for inflation fear and the bears to step into markets today. Japan’s largest bank also warned of a $300 million loss tied to the fund at the bottom of the massive block trades the last few days. However, it appears the major US banks have dodged big losses on the situation so far.
Related to the virus, US infections are rising again after plateauing at a level above the fall level. The totals have risen to 31,033,801 confirmed cases and deaths are now at 563,206. The number of new cases has jumped higher again to an average of 64,552 new cases per day. However, new deaths are mostly flat at 988 per day. President Biden urged states to reinstate mask mandates on Monday. This came after CDC Dir. Walensky went off script and warned of “impending doom” as she is scared the trends are going up again and way too many states are opening up too soon. The CDC also extended the eviction moratorium until June 30. On the bright side, the President said that more than 90% of adults in the US will be eligible for vaccination by April 19, with AR being the only state that has not set the timeline for expanding eligibility to all adults. The US has also administered more than 3 million vaccination per day over each of the four days.
Globally, the numbers rose to 128,341,355 confirmed cases and the confirmed deaths are now at 2,806,709 deaths. The trends have reversed and are now trending toward trouble again as we saw a significant uptick today. The world’s average new cases are rising again (about 10,000 per day) and are now at 557,315 per day. Mortality, which lags, also ticked up, now at 9,707 new deaths per day. Brazil announced a troubling trend, with more young people contracting covid (a 500% increase in the 30-39 age group, +600% in the 40-49 group). JNJ announced it will ship Europe 200 million doses during April. However, Germany will now require a negative test to enter their country.
Overnight, Asian markets were mostly green, with a couple exceptions like Australia (-0.90%) and Indonesia (-1.55%). India (+2.33%) far outpaced the region with Shenzhen (+0.85%), Shanghai (+0.62%), and Taiwan (+0.48%) being more typical leaders. In Europe, we see the same picture taking shape so far today. Only Russia, Finland, and Denmark are negative and even then, basically flat. Meanwhile, the rest of the continent is modestly green. The FTSE (+0.19%), DAX (+0.63%), and CAC (+0.52%) are typical. As of 7:30 am, US Futures are red across the board, but also diverging. The DIA is implying a -0.11% open, the SPY implying a -0.33% open, and the QQQ implying a -0.79% open at this point.
The major economic news scheduled for Tuesday is limited to Conf. Board Consumer Confidence (10 am). Major earnings reports for the day are limited to ASO and MKC before the open. Then after the close, CHWY, LULU, and PVH report.
Bond yields are up significantly again overnight, which may well give the bears some strength as inflation fear and the underlying unease about massive block trades makes traders nervous. However, the bulls are not likely to give up easily with the DIA at all-time highs and the SPY less than half a percent for blue sky. So, be prepared for volatility today as the quarter continues to wind down.
We’ve said it many times, successful long-run trading means accepting that there are times when it’s best to sit on the sidelines. For me, times of a choppy market are at the top of that list. You have to decide for yourself if today is one of those days for you. Regardless, follow your trading rules, follow the trend, respect both support and resistance, and don’t chase the moves you missed. Consistency is the key to long-term trading success. So, keep taking trade goals (profits) off the table when you can, stick to your rules, and maintain that discipline.
Ed
Swing Trade Ideas for your consideration and watchlist: No tickers today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
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The Dow set a new record high with a last-minute surge as the dark pool activity consolidated to the market. Both the DIA and SPY are in good technical condition, while the QQQ struggles in a downtrend. With a light day on the earnings and economic calendar, the market may be a bit more sensitive to the news cycle today. According to the VIX, fear is finally declining, but as traders can attest, the wild whipsaws in price action remain challenging. Plan your risk carefully as that condition is likely to continue.
Asian market closed higher in a volatile session with Nomura shares plunging 16% due to a U.S. hedge fund. Credit Suisse is also sliding sharply across the pond as European markets trade modestly higher with the U.K. relaxing pandemic restrictions. The U.S. futures point to a lower open this morning but are well off of overnight lows. Be careful chasing, and don’t be surprised if overnight lows receive a test as support.
Economic Calendar
Earnings Calendar
To kick off the last 3-days of the quarter, we have 69 companies listed on the earnings calendar, with a large number of them unconfirmed. The only verified potential notable report is from CALM.
News and Technicals’
With an end-of-day surge as the dark pool trading consolidated to the market, the DIA reached a new record high, and the SPY cleared some price resistance. President Biden is under pressure considerable pressure with more than 100,000 illegal immigrants crossed the border in February. Biden is also intending to push for the 4 trillion dollar infrastructure plan before moving on to his next phase of health and family care. Let’s hope we don’t run out of ink to keep printing money! A draft study jointly written by the WHO and China says animals are the likely source of the Covid outbreak. While France and Germany face a deteriorating public health situation, the U.K. is relaxing its restrictions allowing up to six people to meet outdoors. According to reports, the massive container ship stuck in the Suez Canal is not partially floated. Still, there is no indication of how long it will take to complete the operation and resume business.
On the technical front, the indexes got a big shot in the arm in the last few minutes of trading. The DIA managed a new record high by a few ticks, and the SPY lept above some concerning price resistance. At the same time, the QQQ lagged, remaining in a downtrend, as did the IWM. After another wild session, the VIX closed below a 19-handle, suggesting fear is diminishing, but clearly, the wild intraday whipsaw continues. In this all-or-nothing market, the T2122 indicator went from an oversold to indicating a possible overbought condition in just two trading days. As the morning pump begins, futures are well off of overnight lows but, as of now, suggest a lower open. I suspect another wild week of price is ready to begin.
The big question of the day, can the bulls follow-through with yesterday’s nice relief rally clearing some of the overhead price resistance? A weak 7-year bond auction has treasury yields ticking higher this morning to worry investors about coming inflation pressures. Additional pressures of the already strained supply chain may factor with the blockage of the Suez Canal that could take weeks to clear. Be careful not to chase or overtrade and remember as the futures pump up the open the pop and drops that occurred all week.
Asian markets caught some seeling relief overnight, seeing green across the board to end the week. European markets are also seeing some modest relief this morning following a better-than-expected global sentiment report. Ahead of possible market-moving economic reports and a light day on the earnings calendar, the bulls are working hard in the futures to continue yesterday’s bounce.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have a light day with 36 companies listed but only a handful of verified reports. There are no notable reports today.
News & Technicals’
Markets enjoyed a nice relief rally yesterday despite some concerning news. North Korea has kicked up its heels again, firing two ballistic missiles increasing the foreign policy challenges for President Biden. A blockage in the Suez Canal is delaying an estimated $400 million in goods every hour, adding worries to an already strained supply chain. Estimates suggest it could take weeks to clear the blockage. Social Media once again came under fire as pressure increases to change laws placing liability on the company for the content posted. I suspect substantial social media changes are on the way.
The challenge for the market today is follow-though with yesterday’s relief rally bounce. The DIA held nicely on its uptrend, and the SPY, through briefly falling below its 50-day average, proved to hold this critical psychological level by the close. As nice as it was to see the bulls fighting back, they still have some substantial overhead resistance hurdles in their path. The 10-year treasury is ticking up this morning to 1.65% after a weak 7-year bond auction. Big tech could continue to struggle with the rising yields and the growing political pressure they face in congress. Futures suggest a bullish open ahead of potentially market-moving economic reports, so be ready for volatility. As we know, the morning pump has created nasty whipsaws in price action this week. Stay focused and flexible.
