Death, destruction, unemployment, disease, and social unrest is not enough to dissuade the bulls from pushing higher this morning as futures recover overnight losses and point to a bullish gap up open.  The index trends and price patterns remain bullish as investors hold on to hopes of a fast economic recovery.  As you plan your risk, keep in mind the busy economic calendar in the last half of the week that will have a high focus on unemployment. 

Asian markets closed higher as US/China tensions continue to simmer.  European markets are also bullish this morning on reopening hopes, and the US Futures point to a Dow gap up of nearly 150 points despite the social unrest and business closures.  We have a light day of earnings and economic data, so markets may be a bit more sensitive to the political news cycle today.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have about just over 30 companies reporting quarterly results.  Notable reports include AMBA, CBRL, CRWD, LE, HQY, SDRL, ZM, BBW, DKS, & ZM.

Technically Speaking

A night after violent protests, looting, and police officers injured, the futures continue to push higher.  The President has called the demonstrations acts of domestic violence and stated he would call out the national guard to regain order.  Let’s hope it does not come to that.  As tensions continue to grow between the US and China, there is news that China may not live up to the Phase 1 trade agreement after the Whitehouse stripped Hong Kong of its special status.  Amidst all everything else, the economy has to deal with the threat of a new trade war; it would make a recovery exceptionally challenging.  That said, death, destruction, and disease have done nothing to dissuade the bulls from buying up stock despite the ugly economic numbers.

The T2122 indicator continues to signal an overbought condition, but the price action and price patterns of the index charts remain very bullish.  Economic metrics, historic unemployment, and soaring consumer, as well as governmental debit, are apparently of no consequence these days.  Through this new normal is confusing as technical traders, we must stay focused on the price action.  With high volatility and the market’s predilection of significant morning gaps, that can be a dangerous endeavor.  Watch for clues of profit-taking lues as we head into a busy economic calendar through the remainder of the week, but until then, trade stick with the market direction as the bulls drive upward.

Trade Wisely,

Doug