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.
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.
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.
Some nasty retail earnings and tough talk raise concerns about the so-called Phase 1 trade deal bring a needed pause in the bull run. Even bulls need a little rest from time to time, and this little pullback may prove to be very productive as long as the overall index trends hold. Better earnings results out from TGT and LOW have already recovered some the overnight losses in the futures market now suggesting a modest gap lower at the open.
Overnight Asian markets closed the day bearish across the
board on growing trade tensions. European markets are also reacting lower this morning,
seeing red across the board. US Futures
have lifted overnight lows but continue to point to modest declines ahead of
more impeachment hearings and the FOMC minutes due out at 2 PM Eastern today.
On the Calendar
On the hump day Earnings Calendar, we have more than 50
companies reporting today. Notable
reports include LOW, TGT, JACK, LB, LZB, NTES, and QIWI.
Action Plan
Yesterday’s gap up opens eventually turned into a pop and
drop pattern with the Dow closing the day with a bearish engulfing candle. However, the SPY and QQQ found enough buyers
by the end of the day, and the price action finished the day with just a little
rest from breaking daily records. It
would seem tensions between the US and China have once again flared with new tariffs
threatened as part of the rhetoric. Today
the impeachment show continues on the capital hill while the market waits for
the FOMC minutes at 2 PM Eastern.
Even with the slight bearishness of yesterday index trends
remain intact while the VIX continues to register little to no fear of in the market. Although the futures are under slight
pressure this morning, I see this pullback as nothing more than a rest so
far. Of course, that could quickly
change if the Phase 1 proposal falls apart, but my guess is that’s not likely at
least for now. We needed a little rest,
and as long as the overall trends hold, this pullback may well prove to be nothing
more than a pause in an otherwise very bullish trend. Futures point to modest gap down at the open,
but be very careful chasing the open down as many will see this as an opportunity
to buy. As always, wait for proof of
follow-through!
While the bulls seemed to struggle to find inspiration in
the morning session, there was a constant and persistent push in the Dow futures,
which led the indexes throughout the entire day, ultimately setting new record
highs. Oddly, even so-called safe-haven sectors
are being swept up in this relentless bull run.
A rare thing to see, so enjoy it.
How long this can last is anyone’s guess, so don’t get caught up in the
emotion of will bullishness stay focused on price action, plan carefully, and
remember to take profits along the way!
While trouble in Hong Kong continues to get more violent
Asian markets managed to close mostly higher though China said yesterday they
were pessimistic about a trade deal. European
stocks joined the US markets in bullishness setting 4-year highs and are green
across the board this morning. US
futures pared gains slightly after HD missed on sales expectations but still
point to new record highs ahead of the Housing Starts number at 8:30 AM
Eastern.
On the Calendar
On today’s Earnings Calendar we have just over 60 companies
reporting. Notable reports include HD,
JKS, KSS, MDT, TJX, and URBN.
Action Plan
Pimco predicts the US and China will sign a Phase 1 trade
deal before Christmas causes the futures to leap higher. However, after HD missed on sales expectations,
futures have softened but continue to point to another record high open. Impeachment hearings resume this morning, and
according to reports, the President is considering the idea of testifying in
his own defense. Expect the political
drama to attract a good deal of attention, but it’s unclear if the bulls will waver
in their march higher even if the news is bad.
Although the markets seemed to lack momentum yesterday, the
constant push in the futures market finally broke the log jam setting new
record highs for the day. It’s
interesting to note value stocks and consumer defensive stocks are moving up in
concert with growth and high beta stocks, which is quite odd. Relentless bullishness seems to be the best
description of the current market, and it doesn’t seem to matter what their
buying just buy something. How long this
can last is anyone’s guess, but enjoy it because it’s not often such an event
occurs. As always keep your emotions in check,
stay focused on price remembering how quickly sentiment can shift.
In a last-minute surge of bullishness, the Dow close 4 points over 28000 as new records in three of the four major indexes created history. The poor small-cap Russell continues to lag way behind, under-loved, and struggling with resistance. Positive news on the Phase 1 trade deal negotiations has the market once again gaping higher as the bulls continue to show no fear of heights. With Fed signaling a rate-cutting pause and earnings season, winding down the market may become more sensitive to trade developments and news out the impeachment hearings. Remember, big round numbers such as 28,000 will likely see a test as support in the not to distant future, so remain flexible and focused on price action.
Overnight Asian markets closed green across the board despite the increasingly violent protests in Hong Kong choosing to focus on US/China trade hopes. European markets are mostly flat and mostly lower this morning, taking a much more cautious approach to trade news. However, US Futures are tossing caution to the wind looking to extend Friday’s record-breaking rally with a Dow gap up open of more than 75 points. The possibility of a pop and drop exists, so consider your risk carefully if you chase the open.
On the Calendar
On the Monday Earnings Calendar, we just over 50 companies reporting results. Of the companies reporting, MANU is the only one that I see as particularly notable.
Action Plan
The big move Friday looks to have additional inspiration this morning after a report of a productive meeting on the Phase 1 trade deal. With the majority of earnings reports now behind us, we still have about 200 companies reporting this week. The majority of the notable reports will be in the retail sector, with HD kicking it off tomorrow morning. As Impeachment hearings enter their second-week traders will have to keep on eye on the news for possible market-moving reports spun-out of by the political drama.
On Friday, the Dow closed above 28,000 for the first time while the DIA lagged slightly behind at 279.84. Big round numbers can sometimes be a stumbling block for the market, but the SP-500 cut through 3100 like warm butter and the Nasdaq lept right though 8500 like it wasn’t even there. That in mind, be careful chasing the morning opening gap. Testing these big round numbers as support is not out of the question in the near future, so as always remain focused on price action for clues. With earnings winding down and the rate-cutting, Fed pausing inspiration may turn to the Phase 1 trade deal hopes and making the market very news sensitive.
Another day and more new record highs as the bullish trend show no signs of stopping their push higher just yet. Though yesterday’s rally was not broad-based key stocks, continue to find the support needed to drive the indexes higher even with troublesome developments in the US/China Phase 1 negotiations. News that the USMCA trade deal may be finalized soon helped to lift spirits ahead of the busy morning of economic reports and the resumption of the impeachment hearings in the House.
Have a wonderful weekend!
Asian market closed their week mixed amidst trade tensions
and Hong Kong protests. European markets
are mostly bullish this morning renewed trade deal hopes and the US futures
point to another gap up and new record highs at the open. With a light day of earnings attention will shift
to the possible market-moving economic reports and the political drama unfolding
on Capitol Hill.
On the Calendar
On the Friday Earnings Calendar, we get a break from with
only six companies reporting today, but we still have a couple of notable reports
with JNP and JD, which both report before the bell.
Action Plan
The bulls achieved more record highs on Thursday, although the
rally was not broad-based, with the T2122 indicator moving slightly lower in
the process. Nonetheless, the bulls
remain in control, and the technicals of the index charts remain very
bullish. The House will resume
impeachment hearings today, so beware of possible events that could quickly move
the market with more than enough political rhetoric to choke both bulls and
bears.
With the 4th quarter earnings season winding down,
we have a very light day on the earnings calendar this Friday. However, we have a big morning on Economic Calendar
with several potential market-moving reports that could inspire some price action
volatility. Most notable is the Retail
sales number at 8:30 AM ET, and the Industrial Production follows quickly after
at 9:15 AM. Futures got a lift this morning
on a story that suggests Congress is nearing the completion of the USMCA trade
deal with Mexico and Canada. After the
morning rush, don’t be surprised if the congressional hearings divert attention,
and we have a period of light choppy price action as the political drama
unfolds.
The House of Mouse (DIS) surprised the market yesterday,
reporting it had gained 10 million new subscribers on the first day of service,
pushing the stock up more than 7% on the day and taking the Dow to record highs
in the process. FOMC Chairman Jerome
Powell testified yesterday they will back off on rate cuts adopting a wait and
see approach siting a strong economy led by solid jobs growth. Mr. Powell speaks today with the House Budget Committee
giving us a one day reprieve from the impeachment hearings.
Asian markets closed the day mixed and mostly lower on trade
war tensions as they demand more tariff cuts.
European indexes are trading flat to mostly lower this morning in reaction
to the apparent stalemate in US/China trade talks. US Futures currently suggest a flat open but
have improved after WMT reported an earnings beat this morning. Jobless Claims and PPI numbers are out 8:30
AM Eastern as well as a big round of earnings reports, so stay focused on price
action for clues.
On the Calendar
On the Thursday Earnings Calendar, we have just over 275
companies reporting quarterly results. Notable
reports include WMT, NVDA, AMAT, BAM, CGC, DDS, FTCH, HP, IGT, SCVL, SINA,
VIAB, WB, WIX, & WSM.
Action Plan
The Dow powered to new record highs after DIS reported their
new streaming service gained 10 million subscribers on its very first day of
service. However, this morning, futures
are pointing slightly bearish with China not wanting to commit to a level of
farm purchases and demanding removal of tariffs. The Congressional impeachment hearing had a huge
viewership but seemed to have very little if any impact on the market. We have break in that regard today, but the
hearings resume on Friday.
Mr. Powell testified yesterday that after 3-rate cuts, the
FOMC is comfortable taking a wait and see approach with future rate cuts unlikely
in the near future. The chairman will
continue his testimony before the House Budget Committee at 10 AM Eastern
today. We have a big day earnings with
the retail giant WMT reporting before the bell and NVDA as the most notable after
the bell. CSCO disappointed the market
yesterday afternoon and is indicated to open substantially lower this morning.
We could have an interesting market day as the events on Capitol
Hill unfold. We have the Jerome Powell
testifying in Congress as the House begins the Presidential impeachment hearings. We can expect a belly full of political drama
and possibly news-driven price action to keep us on our toes. If that’s not enough for the market to digest
trade war uncertainty has once again raised its ugly head bring out the bears
this morning ahead of the 8:30 AM CPI report.
Asian markets closed in the red across the board as the civil unrest in Hong Kong, and trade uncertainty woke up the bears. European markets are also decidedly bearish this morning, seeing nothing but red across their major indexes. US Futures point a gap down open this morning ahead of earnings reports, CPI, and full-day of Capitol Hill drama. Stay focused on price action and prepare for the possibility of new driven reversals.
On the Calendar
On the Earnings Calendar, we have more than 160 companies
reporting results. Notable reports include
CAE, CSCO, CPA, ENR, FVRR, LK, NTAP, QIWI, SSYS, TNK, TSEM, and VIPS.
Action Plan
Today will be a very busy day on Capitol hill and could
spill over into market price action. Chairman
Powell will testify before the Joint Economic Committee just a day after the
President suggests the US should have negative rates like other countries have. That could set the stage for some interesting
conversation and questioning by the committee.
Meanwhile, in the house chamber they Nancy Pelosi will begin the
presidential impeachment hearings that are not only likely to move the market but
also provide Saturday Night Live plenty of comedic inspiration.
Technically speaking, the bulls continue to demonstrate their
resiliency in spite of all the political lunacy and uncertainty it faces. This morning it would appear that the bears are
trying to reengage as trade war uncertainty once again floats to the surface affecting
prices in Asia and Europe during the night.
After the morning gap down I would not be surprised to see the price
action become light and choppy as we wait for the news-driven events of the day
come to light. Remain focused on price
action and flexible as market direction could quickly shift in reaction.
News from BA that the 737 may be back in the sky by January inspired
the bulls to shake off the trade fears that began the day to close the DIA at a
new record high close. Relentlessly the
bulls have pushed past bad news to move up and if that bad news eventually
finds resolution the surges even higher.
This morning there is speculation the President will delay European
tariffs by 6-months on Wednesday, lifting futures off of overnight lows. Expect news-driven price action to continue with
he Powell speech on Wednesday and the Impeachment hearing also scheduled to
begin.
Asian markets recovered from early lows closing in the green
despite trade concerns and Hong Kong unrest.
European are also green across the board this morning on hope of an auto
tariff delay. US Futures continue to
fluctuate this morning with more than 300 earnings reports to digest. That said, I expect a modest gap up at the
open with the bulls still in control.
On the Calendar
On the Earnings Calendar, we have over 300 companies reporting
today. Notable reports include DHI,
TWOU, ADT, AAP, ACM, CBS, BREW, DF, OSTK, ROK, SWKS, TLRY, TSN, and YY.
Action Plan
The bullishness of this market has been truly
remarkable. As issues continue to swirl around
trade and Hong Kong, the bulls relentlessly surge forward. Although yesterday’s rally was not broad-based,
a new record high closing high in the DIA was inked mostly on the back of BA
news. With an upcoming speech by the President
on Wednesday with speculation that he is going to dealy European tariffs for 6-months
markets this morning a once again surging higher. Jerome Powell is also scheduled to speak on
Wednesday.
All the while, the Presidential impeachment hearings will
begin, and we can count on a barge of political rhetoric and spin to captivate
the public and potentially move the market.
News-driven price action can be challenging to trade, but it could also
turn out to be a non-event if the bulls remain as relentless as they have been over
the last month of trading. No matter
what happens, as traders, it’s our job to focus on the price action and follow
the clues they present without bias or prediction.
