Volatility Continues

Markets are once again gaping higher this morning as this wild ride of volatility continues.  With nearly 450 companies reporting earnings today and a busy economic calendar, anything is possible.  Price resistance did its job yesterday rejecting the days high.  This mornings gap brings the price right back up to those same price resistance levels.  I intend to very cautious this morning and will watch price action closely to see if this gap is actually going to be supported by buyers.

Keep in mind AAPL reports this afternoon and we have the Employment Situation report before the open on Friday even more volatility risk for those holding positions into today’s close.  Remember mid-term elections are next week, and the trade issues with China continue.  Think about that as you plan your risk heading into the weekend.

On the Calendar

We have a huge day on the Earnings Calendar with nearly 45 companies reporting.  Some of the notable earnings for today are: AGIO, AIG, ALL, AMAG, AMCX, AME, AMGP, AMRN, APA, AR, ARES, AROC, ATH, AWK, BCE, BID, BLL, BMCH, BSIG, CBRE, CF, CHD, CI, CJ, CLI, CMP, CNO, CNQ, CNSL, D, DM, DNOW, DWDP, EPZM, ESRT, ESRX, FISV, FND, FRAC, GEL, GLOG, GLPI, GNRC, GOV, HBI, HCC, HGV, HPP, IDXX, IIVI, INAP, INGR, IT, JHG, KRG, KW, LITE, MAA, MAC, MD, MDU, MGP, MMP, MOH, MPC, MPLX, MPW, MRC, MSCI, MT, MTDR, NBL, NE, NFX, NI, NNN, NTCT, NXPI, NYT, O, OMF, OSK, PAH, PBH, PBI, PENN, PGTI, PH, PKI, PPC, PPL, PWR, QRVO, RDS.A, RDUS, RGLD, RPT, RYN, SEE, SFM, SHPG, SNDR, SPOT, SSNC, STAY, STOR, SU, TEVA, THS, TPX, TRP, TS, TVPT, UFS, USCR, VECO, W, WCC, WMB, WPX, WTI, WYND, XPO, ZTS.

Action Plan

Asian markets closed mixed overnight, but European markets are currently bullish across the board.  While I love the bullish enthusiasm in the US Futures this morning, I’m want to extra cautious about the possibility of a pop and drop today.  AAPL reports this afternoon, and we have the Employment Situation number coming in Friday morning before the open.  If that’s not enough to give you a little pause, then answer this question.  What’s changed?  The trade war tensions are still there; the mid-term elections are still on the horizon, and earnings reports have been far from stellar.

Please understand I want the market to go up, but I will only believe it when I actual buyers are supporting the gap after the open.  Until then I will remain cautious remembering that volatility is still very high and with more than 400 earnings reports that anything is possible.  Keep a close eye on resistance levels as we move up to test.

Trade Wisely,

Doug

Possible Follow-through?

Bullishness in the Asian and European market has the US Futures suggesting the first possible follow-through rally in nearly a month!  Certainly exciting to see but as the indexes challenge price resistance levels, we can’t rule out the possibility of profit-taking.  As a result, traders will need to say on their toes focused on price action and aware of the current market volatility.

As earnings continue to roll out this morning, keep in mind that anything is possible.  We have recently experienced the pain caused by chasing into a gap up open that ultimately sells off the rest of day.  Please understand I’m not hoping for or suggesting that will occur.  I’m merely pointing out the possibility and that traders need to remain thoughtful of the risk and prepared for anything this volatile market tosses our way.  Have a plan and trade with a stop!

On the Calendar

On the Earnings Calendar, we have over 250 companies reporting earnings today.  Among the most notable today: ACGL, ACOR, ADP, AEE, AMGN, ANTM, APC, APO, APTV, BAX, BG, BGS, BHE, BIDU, BJRI, BXP, CAKE, CDW, CG, CHRW, CIM, CLVS, CLX, CONE, CRTO, CVE, CXO, DDD, EA, EBAY, EIX, EL, EPD, ESIO, ETR, EXAS, EXC, EXR, FB, FEYE, FLT, GM, GRMN, H, HCLP, HCP, HES, HFC, HLF, ICE, ICPT, IGT, INN, IQ, K, MDR, MGM, MXIM, MXL, NBR, NCR, NTRI, NUVA, OI, OKE, OMI, ORBC, PAYC, PBF, PDM, PSA, QNST, RDC, RDN, RPAI, RRR, RXN, SC, SEND, SF, SFLY, SITE, SNY, SPR, SPWR, SSW, TAP, TEL, TMHC, TMUS, TTMI, VOYA, VRSK, WEC, WES, WLL, WNC, YUM, YUMC, ZEN

Action Plan

Could we actually get two bullish days in the row?  Big gains in Asian markets overnight with European decidedly bullish this morning has US Futures currently suggesting a gap higher of more than 100 points.  Unfortunately, with such a big gap, we have to be on guard for the possibility of a pop and drop as the indexes challenge the downtrend and price resistance levels.  Consequently, be careful chasing into the morning gap until we see real buying supporting the new level.

Of course with more than 250 companies reporting earnings a lot could change by the open.  Continue to plan for high volatility, fast price action, and whipsaws.  As the indexes and individual stocks test, upper resistance levels remember to take some profits to the bank.

Trade Wisely,

Doug

Silver Lining

Without a doubt, yesterday was an ugly ride, but it also revealed a possible silver lining.  Where was the silver lining?  In the last 15 minutes of the day, we experienced a huge bounce that can only occur when the big institutions finally step in to snap up the bargains and defend the lows.  We still need proof of that with a follow-through rally today.  Make no mistake, if this is a short-term bottom the price action will still be very challenging to trade.

Asian and European had mixed results during the night, but the US Futures are currently pointing to higher open that has the potential of recovering some key support levels.  Fast price action, whipsaws and the possibility of overnight reversals will continue to make the waters very difficult to navigate.  With nearly 1000 companies yet to report this week anything is possible so prepare for the bumpy ride to continue!

On the Calendar

Tuesday begins with the CoreLogic Case-Shiller report at 10:00 AM and expecting at 0.1 percent monthly gain and the Year-on-Year rate at 6.0 percent.  Then the Consumer Confidence report is at 10:00 AM where consensus expects the October reading to decline slightly to 136.3.  After that we have two Bond Auctions at 11:30 AM, then the Farm Prices report at 3:00 PM.

On the Earnings Calendar, more than 280 companies are expected to report today.  Here are some the most notable: ACCO, AER, AET, AGCO, AGN, AKAM, ALSN, AMKR, AMT, AN, AOS, APTI, ARE, ARNC, ARRY, AVB, AWI, AXGN, BHGE, BKI, BLKB, BP, BRX, BTU, CGNX, CHGG, CLR, CMI, CNX, CTSH, EAT, ECL, EGHT, EHC, EPR, ERJ, ESV, ETN, EXP, FCAU, FET, FIS, FLIR, FTSI, GE, GPN, GWR, HCA, HMC, HUN, I, IDTI, INCY, INST, IPGP, KBR, KEM, KLAC, KO, LL, LYB, MA, MAS, MDLZ, MSM, NEO, OLN, PEG, PFE, QGEN, QTS, RIG, RMBS, SABR, SCI, SHOO, SNE, ST, TCO, TKR, TPR, TREX, TXRH, UAA, UDR, VMC, VNO, VNOM, VNTR, VSH, WAB, WCG, WCN, WDR, WELL, WH, WING, WLH, XYL

Acton Plan

I mentioned yesterday that I would not be surprised to see another leg lower but yesterdays price action was downright nasty!  However, the big swoon that was rallied strongly in the last 15 minutes of the day may be exactly the thing we needed.  The only way to have such a massive bounce at the end of the day is with institutions stepping up in a big way to defend the lows.  If and that is big IF, we can get a follow-through today, we may have finally put in a short-term bottom.

Expect very high volatility to continue with fast price action.  Traders should expect to be challenged by large morning gaps, intraday whipsaw and the possibility of overnight reversals.  How companies report will be critical.  Stay buckled up because the wild ride is far from over.

Trade Wisely,

Doug