All yes on the Employment Situation.

Employment Situation

The two days of light choppy price action is likely to get a shot of volatility this morning with the release of the Employment Situation number at 8:30 AM.  Although the ADP number showed a sharp decline, it will be interesting to see if that will manifest in the government number.  The bulls seem to suggest the number will be positive as the once again pump up the early morning futures.  As we head into the weekend facing a tariff increase on the 15th, I would not be too surprised to see some profit-taking.

Asian markets closed the week on a bullish tone with modest gains across the board.  European markets are moving higher this morning green across the board.  US Futures also point to bullish gains at the open that could easily expand the gap if the Employment number is positive or diminish if the number happens to be disappointing.  Plan you risk into the weekend carefully as the political football of US/China trade continues to be kicked around in the news.

On the Calendar

On the Friday Earnings Calendar, we have a relatively quiet day with only 15 companies reporting.  Notable earnings include BIG and GCO.

Action Plan

Another day of chop after attempting a pre-market pump, traders took a wait and see approach.  This morning the focus will turn toward the Employment Situation number, and once again the futures are tiring to lift the market ahead of the number.  The good news is we will likely get some price action today, but the question remains will retail traders get much of a chance, or will it most of the price action occur in the gap.  One thing for sure is that the bulls are still in control with a relentless optimism amidst the political uncertainty.

After the morning rush, the market could once again turn its attention to the pending tariff increase scheduled on the 15th.  It the bulls continue to ignore the potential risks pushing toward new record highs, or will there be some profit-taking into the weekend to avoid the risk?  Only time will tell, but I, for one, will want to be more of a profit-taker rather than adding risk into the weekend. 

Trade Wisley,

Doug

Lot’s of uncertainty.

uncertainty

The big morning gap yesterday seemed to be met with a lot of uncertainty as to what happens next with the Phase 1 trade agreement.  The bulls find very few buyers after the gap, and the bears could not inspire any sellers, so we lingered the rest of the day in a choppy sideways consolidation waiting for news to break the deadlock.  Although the uncertainty remains, the futures market that had been flat most of the night found some inspiration somewhere to once again point to a bullish gap up open.

Asian markets closed positive across the board overnight as confusion over the trade continues.  European markets are trading mixed but mostly higher this morning ahead of German economic data.  US Futures point to a 100 point Dow gap ahead of the biggest day of earnings this week and some potential market-moving economic reports.  The market is very news sensitive regarding trade, so remain flexible as sentiment could quickly shift as this political drama continues.

On the Calendar

On the Thursday Earnings Calendar, we have our biggest day of the week, with 51 companies reporting.  Notable reports include ULTA, AOBC, CM, CLDR, DOCU, DG, DLTH, EXPR, GWRE, JILL, KR, MIK, SIG, PLCE, TIF, & ZM.

Action Plan

After the morning pop yesterday, the price action in the indexes stagnated in a sideways chop seemly uncertain as to what comes next.  However, this morning, futures have found some inspiration even though the future of the Phase 1 trade deal remains uncertain.  With the decline in petroleum reserves and the expectation that OPEC may make deeper cuts in oil production, there was some nice movement in the sector yesterday, helping to the overall market. 

Today is the biggest day of earnings this week and could provide the source of inspiration for the bulls or the bears.  However, in light of yesterday’s sharp decline in ADP numbers, the Friday Employment Situation report may create more consolidation after the morning rush while we wait.  With the market sensitivity to any news on the trade deal and what that might mean for tariffs, traders will have to remain very flexible and prepared for quick price action surges or reversals.  As the indexes move back up toward price resistance levels, remember to take some profits. 

Trade Wisely,

Doug

Ridiculous Political Football

Political Football
Phase 1 Trade Deal

The so-called Phase 1 trade deal has become a ridiculous political football creating a frustratingly news-driven market chopping up trader's accounts.  The President says maybe we wait until after the 2020 election, and the Dow drops more than 400 points.  Bloomberg puts out a story citing “people familiar with the talks,” and suggests a deal is edging closer, and the Dow gaps up.  All of the drams over a trade deal that we no one really knows what it does or does not include.  Silly!  The good news is that even though the short-term index trends broke yesterday the bulls found the energy to defend important price supports and longer-term trends.  However, traders will have to remain very nimble in this emotional football continues to be kicked around.

Asian market closed seeing only red across the board overnight with European markets in reaction to the Bloomberg story reversed early losses and currently see green across the board.  US Futures ahead of earnings and economic reports are also reacting sharply higher after the Bloomberg report with the Dow expected to gap up triple digits in reaction. 

On the Calendar

On the hump day Earnings Calendar, we have 31 companies reporting their results.  Notable reports include RH, WORK, HOME, CPB, FIVE, HRB, RY, TLYS, and VRNT.

Action Plan

Yesterday the President said it might be better to wait until after the 2020 election to make a deal with China.  Commerce secretary came out echoing those comments and said they have not ruled out imposing tariffs on imported European Autos.  Then at 5 AM this morning, Bloomberg News reported that the US and China were edging closer to a trade deal citing “people familiar with the talks.”  The Futures quickly rallied from overnight losses on the report.  I don’t know about you, but all this market manipulation around the so-called Phase 1 deal has become absolutely ridiculous.  

Technically speaking, the short-term index trends broke yesterday, but the longer-term bullish trends remain intact as bulls defended key price action supports.  Although yesterday’s price action was quite bearish, the pullback may, in fact, open the door to opportunity, so stay focused on price for clues.  As a result of the Bloomberg report, the futures point to a gap up open in the Dow of more than 100 points ahead of earnings and economic reports.  At 10 AM Eastern today, impeachment hearings will resume providing a little distraction and drama to the day.

Trade Wisely,

Doug

Miss on US Manufacturing

Manufacturing

A miss on US Manufacturing and concerns of a US/China trade deal delay inspired the bears and triggered a wave of profit-taking yesterday.  Threats of a possible 100% tariff against France in response to there new digital tax aimed at American companies as well as possible steel and aluminum tariffs for Argentina and Brazil added more pressure to the selloff.  This morning the President raised concerns that the US/China trade agreement may not happen until after the 2020 election has futures pointing to more losses this morning.

Asian markets closed mixed but mostly lower overnight, with Australia sinking more than 2%.  Across the pond Euro Zone indexes are mostly lower after the President’s comments on the US/China trade delay.  US Futures point to a gap down open of about 100 Dow points following though after yesterday pop and drop pattern leaving behind bearish engulfing candle patterns and lifting the fear level in the VIX substantially.  Keep in mind that a pullback in a bullish trend may ultimately prove to be a buying opportunity if the bulls prove strong enough to defend.  So stay focused on the price for clues.

On the Calendar

On the Tuesday Economic Calendar, we have 20 companies reporting quarterly results.  Notable reports include AZO, BMO, CONN, LE, MRVL, CRM, WDAY, and ZS.

Action Plan

The President’s trip abroad as proved to be quite eventful.  After the passage of a digital tax in France targeting US companies, he has threatened new tariffs as much a 100% in retaliation.  He also said steel and aluminum tariffs for Argentina and Brazil might be in play very soon.  This morning the President suggested it might be better to wait until after the 2020 election to complete a trade deal with China sending the US Futures market sharply lower.  All the while impeachment hearings resume on Wednesday here in the US while the President remains abroad scheduled to meet with the Queen. 

Futures that had been modestly bullish most of the night now appear to threaten a gap down this morning following through after Monday’s selloff.  While the selling yesterday was worrisome, leaving behind bearish engulfing candles, price supports, and overall trade largely held up to the attack.  However, follow-through selling today may well create some technical damage to the index charts.  The VIX closed the day just below a 15 handle as fear quickly accelerated after the pop and drop day that energized the bears, triggering a wave of profit-taking as trader scrambled to protect profits.

Trade Wisely,

Doug

Manufacturing focus

Manufacturing focus

After a bearish short session on Friday, the bulls are trying to spark a rally this morning ahead of the PMI and ISM manufacturing reports.  According to reports, the US consumer showed their confidence with an increase of 20% in Black Friday sales and an expectation that Cyber Monday could hit new record spending levels.  That’s good for the economy but may prove to problematic for the market today with low volume as distracted traders search for online deals.

Asian markets were green across the board overnight fueled on better than expected Chinese manufacturing numbers.  Unfortunately, the European markets are flat with mixed results as their manufacturing once again shrink.  US Futures have pulled back from overnight highs as we wait on US Mfg reports at 9:45 and 10:00 AM Eastern.  With Dec. 15th tariffs quickly approaching and China threatening retaliation for the bill supporting a Democratic Hong Kong, the path forward may have some new obstacles to overcome.  As always, stay focused on price action for clues.

On the Calendar

On the Monday Earnings Calendar, we have a light day with just 15 companies reporting as trading resumes after the Holiday.  There are no particularly notable reports today.

 Action Plan

The market reacted negatively in the low volume, short session, Friday after the President signed the bill supporting the Hong Kong protesters.  The December 15th tariffs now come into focus as trade negotiations stall, and China threatens retaliation.  On a positive note, holiday deal shoppers were out in force with Black Friday sales up 20% according to reports.  Retail is expecting today, Cyber Monday, to set new sales records as consumers show signs of ramping up their holiday online shopping.

Positive Chinese manufacturing data helped to boost overnight markets, but Euro Zone manufacturing activity once again declined tempering this morning's bullishness.  This morning at 9:45 and 10:00, we will hear find out how US Manufacturing measures up with the PMI & ISM reports.  Consensus estimates look favorable.  Don’t be surprised if volume quickly declines after the morning rush with traders extending holiday vacations and distractions from Cyber Monday shopping.

Trade Wisely,

Doug

Positive Comments on Trade

Positive Comments

The President's positive comments on the Phase 1 trade agreement has once again inspired the bulls to continue to reach out for new highs.  The earnings miss by DE has dampened the overnight bullishness, but with a big morning of market-moving economic reports that are expected to be positive according to consensus, all signs point higher.  Typically, after the morning rush of activity, the volume will quickly diminish as traders set-out to begin their holiday celebrations.  Plan accordingly.

Asian markets closed mixed but mostly higher with high hopes news of a completed trade deal will be forthcoming.  European are green across the board this morning in response to the favorable trade comments by President Trump.  US Futures point to modest gains at the open after setting new records for the 10th time this month.

On the Calendar

On the pre-holiday Earnings Calendar, we have 21 companies reporting quarterly results.  Notable reports include DE & DAKT, both reporting before the bell today.

Action Plan

President Trump has once again inspired the market this morning suggesting they are very close to completing the Phase 1 trade deal.  However, he also said they want to see a democratic outcome in Hong Kong, which many see as a major obstacle to Chinese support.  Yesterday, we saw record highs for the 10th time in the last 30 days.  Clearly, the bulls are in control, and the trend remains very strong.

Although we have a rather light day on the earnings calendar we have a very busy morning on the economic calendar with several potential market-moving reports.  The consensus estimates of these reports are all positive, so only a major surprise seems capable of derailing this relentless bull.  Keep in mind that volume is likely to decline very quickly after the morning rush as traders head out for their holiday plans.  Although the market is open for short a session on Friday, the HRC and RWO trading rooms will remain closed until Monday Dec. 2nd.  I wish you all a very Happy Thanksgiving!

Trade Wisely,

Doug

Bulls Inspired

Bulls Inspired

With the bulls inspired by Hong Kong election results, renewed trade hopes, and a huge day merger news made setting new record highs in the DIA, SPY,and QQQ look easy as they quickly recovered last week's pullback.  Today, the attention will likely shift to earnings and economic reports to find inspiration.  After such a big move yesterday and heading toward a major holiday. It will be interesting to see if bulls can find the energy to continue their relentless march higher. 

Asian markets closed mixed but modestly higher with Alibaba making a huge splash in Hong Kong markets.  European markets are treading cautiously with mixed results as they continue to monitor US/China trade news.  US Futures are rather subdued this morning ahead of earnings reports and several potential market-moving economic reports.  With markets at new record highs consider your risk carefully as the holiday shutdown approaches.

On the Calendar

On the Tuesday Earnings Calendar nearly 50 companies reporting results.  Notable reports include BBY, ADSK, BNS, BOX, CHS, CBRL, DELL, DKS, DLTR, EV, GES, HRL, HPQ, MOV, VEEV, and VMW.

Action Plan

Monday became on the biggest merger days in history, providing additional energy to an already bullish sentiment setting new records in the DIA, SPY, and QQQ in the process.  T2122 suggests this bull run still has some upside potential but could soon reach a short-term overbought condition if the bulls continue to find inspiration to rally.  Earnings reports could provide that inspiration, or perhaps it will be the New Home Sales and Consumer Confidence reports at 10:00 AM Eastern.  One thing for sure is that the bulls remain firmly in control of a trend that shows no price action clues of ending at this point.

Futures markets seem much more subdued this morning, perhaps needed a little rest after such a big effort yesterday.  It is also possible with the Holiday looming and the nasty weather conditions moving across the country that traders will try and escape early.  Don’t be too surprised if volumes begin to decline quickly with price action becoming very light and choppy after the morning rush Wednesday.  As we push new market highs, plan your risk carefully heading into the holiday.

Trade Wisely,

Doug

The Trade War Pendulum

Trade War Pendulum

The pendulum of the Phase 1 deal that has swing somewhat bearish heading into the weekend has this morning swing back to the bullish side, helping to inspire a Monday morning gap.  The bulls got an early start after news that pro-democracy candidates won big in Hong Kong.  The pullback last week that held trading sets up a great opportunity if the bulls can remain inspired to attack all-time market highs as we head into the Thanksgiving Holiday.

Asian markets rallied substantially overnight in reaction to Hong Kong election results.  European markets are also green across the board this morning on renewed US-China trade hopes.  US Futures opened bullishly and remained strong throughout the night, currently pointing to gap up opens across all indexes.  Perhaps Santa can begin his run early this year fueled by strong consumer sentiment.

On the Calendar

On the Monday earnings calendar we have 31 companies stepping up to report.  Notable reports include PANW, A, AMBA, HPE, NTNX, & PVH.

Action Plan

Trade uncertainty dimmed Friday bullishness, but they have spun the story once again, and this morning, the bulls are pushing for a higher open.  Pro-democracy candidates won big in the elections on Sunday in Hong Kong with a record voter turnout.  A major step for the people of Hong Kong but they still have an uphill fight with the Beijing control of top leadership. 

With the short holiday week, we still have several notable earnings reports Monday & Tuesday and a busy economic calendar through Wednesday.  However, expect volumes to decline quickly by mid-week and remain relatively low until Dec. 3rd as traders extend their Thanksgiving vacations.  That being said the market indexes appear setup to attack new record highs as long as sentiment on the Phase 1 agreement remains positive.  Last week's strong consumer reading suggests Santa could have a nice run this year.

Trade Wisley,

Doug

Little to no Fear

Little to no Fear

Although we have had 3-days of pullback in the indexes, the VIX shows little to no fear, and so far the indexes has suffered no discernible technical damage.  According to reports, the likelihood of a completed Phase 1 trade deal before the scheduled December 15th tariff increase has diminished.  As we head into the uncertainty of the weekend and the coming holiday, it may be difficult for the bulls to find much inspiration.  However, a consolidation at this level would be productive and bullish as we wait for some political clarity.

Asian markets closed mixed overnight as trade uncertainty weighed on investor's minds.  Across the pond, European markets are bullish following positive Euro data.  US Futures point toward a modestly bullish open ahead of Consumer Sentiment that consensus expects to increase slightly at 10 AM Eastern.  Plan your risk carefully as we head into the weekend. 

On the Calendar

On the last day of trading this week, we have just 15 companies reporting earnings.  Notable reports include BKE, FL, HIBB, and SJM.

Action Plan

During the impeachment hearings, the congress could not be bothered to pass a federal budget but did set aside enough time to kick the can down the road with another stopgap spending bill to avoid a government shutdown.  It now looks as if there will not be a Phase 1 trade agreement before the scheduled December 15th tariffs increases.  China said in a report that they want a trade deal but are not afraid to fight.  Impeachment hearings have not progressed into Russian election meddling as the political drama extends.

With a light day of earnings and economic reports the US Futures are trying to put on a brave face and break the 3-day pullback as we head into the weekend.  With not many places to find inspiration and trade up in the air it may be difficult for the bulls to gain much traction.  However, if they can prevent additional selling and slip the indexes into a consolidation I believe that would be a win keeping the market trends bullish.  Although we pulled back there has been on technical damage, and this rest appears to very constructive thus far.  According to the VIX, fear of a selloff remains very low as we head into the weekend.

Trade Wisley,

Doug

Tariff Concerns

Tariff

The possible delay of the Phase 1 trade deal and the questions about that means for the December 15th tariff increases brought out the bear yesterday.  However, by the end of the day the technicals of the index charts took little to no damage.  Even the VIX by the end of the day showed little to no fear growing in the overall market.  That being said, the market is obviously quite sensitive to the notion of increased tariffs by the end of year, and it will likely continue to be a driver of market sentiment requiring traders to remain nimble.

Asian markets closed in the red across the board in reaction the possible trade deal delay.  This morning European markets are lower across the board as the concern of Hong Kong bill passed by Congress could affect trade relations going forward as it heads to the President’s desk for signature.  US Futures are flat to slightly bearish ahead earnings and economic calendar reports.

On the Calendar

On Thursday’s Economic Calendar, we have 46 companies reporting earnings.  Notable reports include JACK, LB, LXB, NTES, and QIWI.

Action Plan

A story suggesting there would not be a Phase 1 deal this year brought out the bears yesterday.  The major concern was not the Phase 1 deal; it’s the question as to what happens with the tariffs scheduled to increase December 15?  Clearly and increase before the end of the year could have serious impacts on a market that has rallied on the optimism of a partial deal.  Though we have a few earnings reports today, it's unlikely the market will see much impact from their results; instead, the market may focus on the economic calendar news with Jobless Claims, Philly Fed Survey, and Existing Home Sales.

Although yesterday selling was a concern, the technicals of the index charts took very little damage yesterday.  Personally, I think the pullback to at this point was good to relieve the relentless bullish pressure.  In fact, this pause in the rally could setup new buy opportunities assuming we can get some clarification on the Phase 1 negotiations and December 15th tariffs.  Stay on your toes as this political football continues gets kicked about along with market sentiment.

Trade Wisely,

Doug

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