With a positive US/China Wall Street Journal report, the CVX buyout of APC, Uber IPO filing, Disney’s new streaming service and the kick of 2nd quarter earnings US futures are finally shaking off the doldrums that plagued price action all week. Of course a lot could still change but as I write this the US Futures are pointing a gap up open of more than 150 points.
As the big bank earnings roll in and investors listen in on
conference calls expect some price volatility to occur throughout the morning
as we head toward the open. It would be wise
to remember that all the indexes still have price resistance above and the risk
of chasing this morning gap into resistance need careful consideration. After such a long week of choppy price action
it’s easy to get caught up in the excitement and feel the fear of missing out. Remember this is just the first day of 2nd
quarter earnings there will be more than enough opportunity to come so there is
no need to rush.
On the Calendar
We have a light day on the Earnings Calendar but with only
14 companies reporting but we have a few heavyweight reports kicking of 2nd
quarter earnings season. Notable reports
JPM, INFY, PNC, WFC.
Action Plan
US Futures are very happy this morning even before the big
bank earnings have begun. First the Wall
Street Journal reported positive comments on the progress of the US/China trade
deal raising hopes of completion. Then Chevron
announced it was buying APC in a 33 billion dollar deal. In other news the market seems to like is the
streaming service set to launch in November by Disney and the Uber IPO filing
release. Asian markets closed mixed
overnight and European markets are only modestly higher as investors deal with
another round of growth concerns.
As I write this the JPM just reported a top line beat on
earnings and the futures are pointing to more than a 150 point gap up at the
open. Remember a huge gap like this
opens the door for a possible pop and drop pattern so don’t get caught up in
the morning excitement chasing the open. Let’s wait and see if buyers support the gap
and keep in mind sentiment can change during a companies conference call. Today is profit Friday so those holding long
positions may want to consider the morning gap as a gift and ring the register. As this is just day one of 2nd quarter
earnings consider the carefully the risk you carry into the weekend. With that in mind I wish you all great profits
today and a wonderful weekend!
Not event he FOMC minutes was able to shake the market out of its pre 2nd quarter doldrums. There are a lot of great looking bullish chart setups but with the overall market chopping sideways they’re finding it very difficult to attract enough buyers to get them moving. Unfortunately today is likely to be very much the same as we wait for some of the big bank earnings Friday before the bell. The question is will they inspire the bulls, embolden the bears or will the doldrums continue? Anything is possible.
Technically the indexes are bullish with the SPY and QQQ in
the lead while the DIA and IWM lag behind.
I’m comfortable holding current positions but I’m finding it difficult
to add new risk in such choppy price action.
It’s very easy to overtrade a dull market and wake up the next morning
to find the market moving sharply against your positions. When the overall market is showing cautious price
action that may be a clue we should be doing the same. Be patient and avoid predicting and wait for the
price to show us the way.
On the Calendar
We have only 12 companies reporting earnings today with FAST
and RAD likely the most notable.
Action Plan
Not even the FOMC minutes could break the market out of the
choppy price action we’ve experienced this week. Oddly enough there are a lot very good
looking charts setting up good entry patterns if only the bulls could find the
inspiration. Asian markets closed mixed
but mostly lower overnight. European markets
are basically flat this morning after the decision to grant a 6-month extension
to try an obtain a Brexit deal by
October 1st. Here in the US
future are edging higher this morning but with light economic and earnings
calendars it will be difficult to find inspiration.
The SPY and the QQQ continue in bullish patterns, holding
above support levels and maintaining the trend.
At the close of yesterday the QQQ’s seem the most likely candidate to
attack the all-time index highs. With BA
moving lower to test a critical level of price support the DIA is still doing a
good job of holding support and IWM continues to lag as the weakest index. As we wait for the big bank earnings on
Friday morning, I’m expecting another day of choppy price action. Although there may be lots of great looking
charts be careful on to overtrade.
Although the Dow shed 190 points yesterday the SP-500 and
the NASDAQ stood resolute and well defended by the bulls. Even with the IMP once again cutting global
growth forecasts last night, the futures are pointing to a bullish open this
morning. Asia closed mixed but mostly
lower due to growth concerns but European markets appear largely unconcerned as
they wait for an ECB rate decision and Brexit summit.
Technically speaking the SPY and QQQ continue to look very strong
holding support levels and trend. Though
the DIA and IWM found some sellers yesterday the bears have not shown much conviction. After the morning rush doesn’t be surprised
to more light and choppy price action as we wait for the FOMC minutes this afternoon.
On the Calendar
We have a light day on the Earnings Calendar today with just
11 companies reporting. Notable reports include
DAL before the bell and BBBY reporting after the close.
Action Plan
During the evening the IMF once again cut global growth forecasts
getting a negative reaction lower by Asian markets closing mixed but mostly
negative. European markets however are
slightly higher ahead of ECB rate decision and a Brexit summit. US Futures currently seem unconcerned about
the IMF report this morning pointing to bullish open ahead of the CPI report
and release fo the FOMC minutes.
Although the SPY and QQQ closed lower yesterday there has
been on technical damage as they continue to hold supports and trend. Although the DIA slipped back below a level of
resistance yesterday the bears seemed to lack downside conviction. The IWM remains the weakest of the indexes
leaving behind a possible failure pattern at price resistance. I would not be at all surprised to more light
choppy price action today as the market waits for the FOMC minutes and the kick
off to 2nd quarter earnings on Friday.
Although the SPY eked out a 22 cent gain for an 8-day winning streak it’s overall looking for inspiration. The DIA lost 94 cents, the QQQ gained 47 cents and the IWM slipped 26 cents in a day of pensive price action. Perhaps it’s waiting for the FOMC minutes that will be out Wednesday afternoon but with the fed not planning to raise rates this year it may be difficult to find inspiration there. We may have to sit through light and choppy price action until Friday when the big back kick off the new earnings season.
Futures are pointing to flat open after rallying off the
overnight lows. Asian markets closed
mixed but modestly higher overnight on the back of rising oil prices. European markets are flat this morning after the
president threatened new tariffs due to Airbus subsidies that may be ruled illegal.
It’s very easy to become bored and
over-trade a dull market. The market has
provided some great profits over the last three months don’t give them back as
the market wanders looking for inspiration.
On the Calendar
On the Earnings Calendar we have just over 20 companies
reporting earnings today. Notable
reports include PSMT,SJR & WDFC.
Action Plan
Although the DIA closed down yesterday the SPY managed an 8th
straight day of gains with a bullish push in the last 10 minutes of the day closing
up 22 cents. The QQQ managed a 47 cent
gain while the IWM slipped 26 cents. That’s
the price action of a pensive market waiting for some kind of inspiration. Today looks to be another dull day with the
US Futures currently flat having rallied off of the overnight lows.
With today’s light economic and earnings calendar we may
have to wait until the release of the FOMC minutes on Wednesday afternoon to
find a catalyst. However with the FOMC
planning no rate increase this year even that news could be uninspiring. With the new concerns raised on earnings
growth we may have to wait until Friday’s big bank earnings to find that spark.
When the market is dull it very easy for
traders to become bored and over-trade a dull market. Trading just to have something to do is bad
business. We’ve made great profits in
the last few months so let’s not give them back over-trading a dull market.
A report suggesting we could have a challenging 2nd
quarter earnings season dampened the bullish
sentiment this morning. Asian markets closed mixed but mostly lower
and European markets are seeing flat and
mixed markets this morning. Currently the Dow futures are pointing to a gap down of about 75 points while the
SP-500 and the NASDAQ futures are flat to
modestly lower.
With a challenging 2nd quarter in mind and a relatively light economic calendar this week we
could unfortunately experience some light
and choppy price action this week as we wait.
On Friday the 12th we get reports from JPM, PNC & WFC followed by C and GS Monday the 15th. We will have a little excitement this week
with the CPI report and the FOMC minutes on Wednesday.
On The Calendar
Interestingly enough we have around 50 companies showing up
on the Earnings Calendar today but there is
only handful that are confirmed reports
so far this morning. Looking through
the list there is none that are
particularly notable.
Action Plan
During the evening futures were looking bullish on continued
hopes of a trade deal but this morning they have taken on bearish attitude. Asian market closed mixed but mostly lower
and European markets are mixed and currently
flat. It seems as if the market is now suddenly
worried that 2nd quarter earnings will not support current
prices.
Analysts have lowered
earnings targets significantly. According to a report the expectation was for
about a 3% growth in earnings but now their thinking it could be down 4%. If the analysts lower the targets enough and
the company tops the estimates the market could still go higher in this silly
game. However, if a large group of
companies misses the lowered targets then
this could be a very challenging upcoming earning season. Friday the 12th
we will hear from JPM, PNC and WFC followed closely by C and GS Monday the 15th
to set the stage.
US Futures are pointing to positive open ahead of the Employment Situation
number at 8:30 AM Eastern and learning a trade deal with China could happen in
the next four weeks. Yesterday the bulls appeared to have little concern about
the deal with the DIA confidently breaking through price resistance catching up
with the SPY and QQQs already above key levels.
Even the IWM joined in with bullish day although still below previous
highs.
The bulls now have a clear
path to test all-time market highs and perhaps set new records assuming support
levels hold. Profits have been pretty
easy to come by this week but don’t let greed prevent you from taking at least
some of those to the bank before the weekend.
Through bulls may have their eyes on new market highs we never know what
the future holds. Profits today can be
gone on Monday so plan your risk carefully into the weekend.
On the Calendar
We only have eight companies reporting earnings today with
none that are particularly notable.
Action Plan
I must admit that yesterday turned much better than I expected
as we waited to hear news about a trade deal with China. The bulls appeared
to have total confidence of a positive outcome providing another nice day of
gains rather than the consolidation I was expecting. More than that it appears the bulls have more
upside energy this morning with futures pointing to bullish open ahead of the
Employment Situation report. The consensus is expecting a nice rebound in
the employment number to 170K after last months disappointing reading of just
20K.
Yesterday’s price action was also a big day the market on a technical
basis with the DIA breaking through resistance with the SPY and QQQ proving to
hold strong above new supports. Even the
IWM got with program putting in a bullish day though still a lower high at this
point. It’s
been a great week of gains and as we head into the weekend its wise to remember
your trading plan and goals, taking profits as necessary. I wish you all a great weekend.
The President is meeting
the Chinese Vice Premier at 4:30 Eastern today and the big question is, will they
or won’t they announce a deal has been struck ending the US/China trade
war? Then the next question, if they do announce a
deal how will the market respond? Big questions for traders to ponder today as
we wait. If that’s not enough to think
about keep in mind the Employment Situation number come out before the market
open on Friday.
Certainly, a lot to think about, as you plan your risk heading into Friday. As of now US Futures are pointing to flat open voting to take a wait and see approach at least for the moment. My thought is to avoid adding new risk today and maybe even take some profits to reduce my overall risk depending on the price action of the day. Friday morning could be a wild ride if an agreement is announced and could be equally nutty if there is no agreement. So Will They?
On the Calendar
We have fewer than 20 companies reporting as the 1st
quarter reports finally begin to wind down.
However, we still have a few notable report s that include STZ, DLTH
& ISCA.
Action Plan
During the early evening US Futures were up nearly 60 points
on the news that President Trump would be meeting with the Chinese Vice Premier
today. The assumption is that the
US/China trade war may be close to completing a deal. The meeting is not until 4:30 ET today. However, instead of a morning pump in the futures
today the markets are in more of a somber
mood. Asian markets closed mixed on very
light price action overnight they waiting
for news on an agreement. European markets are currently flat to mostly lower as
Italy is expected to cut the 2019 GDP forecast.
Consequently, US
futures are currently flat shaking off the overnight highs. TSLA fell about 7% after missing on delivery estimates and warning of a negative quarterly report. Now the question is will we or won’t we hear
about a trade deal with China later this afternoon and what should we do as we
wait. The next question, if there is a
deal will it move the market higher or will it be more of a sell the news event? Tough questions to sure and a very uncertain day
ahead for traders to ponder. Also keep
in mind the Employment Situation number will
be out before the market opens on Friday.
Last nights CNBC headline that reads, “US and China are reportedly drawing closer to a final agreement” lifted markets around the world with the hope a deal is forthcoming. Although the article goes on to say both countries still have to agree on a number of important issues the bulls grabbed a hold of that headline and ran. As a result, the US Futures point to a gap up open that indicate the SPY and the QQQ will open above key resistance levels assuming the bullish sentiment holds throughout the morning.
Once again assuming the bulls have the energy to hold this
new price level of support it opens the door for the market to test all-time market highs in the near future. Of course we still have to be watchful of a
pop and drop pattern if buyers fail to support the morning gap so be careful
not to chase. Remember we have the big employment
number coming Friday morning and it’s not unusual for the market to become
light and choppy as we wait.
On the Calendar
We have fewer than 30 companies reporting earing today as
the first quarter reports continue. Among the most notable are CALM, DGLY & KODK.
Action Plan
Shortly after the Asian markets open CNBC reported that the
US and China are drawing closer to a final trade agreement. Then went on to say, “Both countries have yet
to agree on a number of important issues.” None the less the Asian markets responded
bullishly to the headline closing higher across the board. Currently European
markets are mixed but mostly higher with the FTSE just slightly in the
red.
Consequently the US
futures are bullish across the board with the Dow indicating a gap up of 100
points or more as I write this report.
At the close yesterday the indexes all faced a challenging price
resistance level but as of right now both the SPY and QQQ indicate they will
gap through resistance at the open. That
certainly opens the door for a possible
new record market highs in the near future
assuming the bulls can hold above resistance.
Of course we must still watch for the possibility of a pop and drop pattern developing if buyers
fail to support the morning gap this morning.
Remember we have the big Employment Situation number coming Friday
morning and it’s not uncommon for the price
action to become light and choppy as we wait.
The first trading day of the second quarter the bulls put on
a display of power charging through price resistance and breaking the last
weeks chop zone. Unfortunately, the bulls
stopped just short of the next price resistance hurdle in all four of the major
indexes. It would be completely rational to think the momentum of yesterday bullishness would be enough to carry the index’s over this price barrier. However, it’s also quite rational to think a little pause to take a breath or even some profit-taking
might be in order.
With the DIA and SPY finally
making a new high we technically in a much better position, assuming the bulls
can hold this newly attained elevation. The
QQQ stopped short of a new high yesterday closing at price resistance while the
IWM continues to languish in a downtrend.
Futures are currently flat this morning but keep an eye on the Durable
Good Orders report at 8:30 AM Eastern as it could set the tone for the day.
On the Calendar
We have a significant
decline in earnings reports today with just
over 20 companies. Notable earnings include
GME, PLAY, NG & WBA.
Action Plan
After huge bullish one day rally where the Dow gained a
whopping 329 points the futures indicate a more subdued open this morning. As a matter of
fact, US Futures trading in the red
all night and have only begun to see positive prints in the pre-market
pump. Asian markets finish their trading
day mixed but mostly higher overnight. European
markets are bullish across the board this morning after reporting stronger than
expected factory activity overshadowing
another failed Brexit vote. Unless they
can come to an agreement in the coming
days the 5th largest economy will leave the bloc on April 12 with no
deal.
Although yesterday was a great day for the market finally
breaking a week-long chop zone the
indexes charts find themselves with yet another price resistance hurdle just above. Perhaps the sheer
momentum of yesterday’s bullishness is
enough to propel the indexes over the hurdle but
we shouldn’t expect the bear to give up easily.
After such a big one day move it would not be at all surprising to see a
little profit-taking to test overnight futures lows or pause the action to take
a breath. The Durable Goods Orders at
8:30 AM could set the tone for the day but the consensus estimate is expecting
a decline in this potential market-moving number.
Futures opened trading very bullish last night on optimism as the US/China trade negotiations resume in Washington DC today. The good vibes were significantly enhanced during the night when better than expected Chinese
manufacturing data came to light. Not surprisingly, Asian markets closed
sharply higher last night and European markets are strongly bullish this
morning ahead of yet another Brexit vote.
Perhaps this is the bullish shot in the arm we have been waiting for to provide the momentum required to break through the index price resistance that has proved so stubborn over the last few weeks. Keep in mind, we still have a full plate of economic and earnings data for the market to digest this morning that could either enhance or subdue how the market open. Be careful to avoid chasing the morning open with the fear of missing out. Watch and wait for price action to prove buyers will step in to support the gap. Remember gaping into price resistance can produce those nasty pop and drop patterns so it’s wise to exercise a little patience this morning.
On the Calendar
We have 164 companies reporting on the first day of the 2nd
quarter. Among the notable reports CALM,
DGLY & KODK.
Action Plan
Stronger than expected Chinese
manufacturing data and optimism as the US and China resume trade negotiations today
in Washington DC has futures signaling a substantial morning gap up open today. Asian markets closed bullish across the board
last night and European markets are also sharply higher this morning ahead of another
Brexit vote. We also have a busy
Economic Calendar this morning Retail Sales, PMI Manufacturing, Business
Inventories, ISM Mfg. Index and Construction Spending for the market to digest.
As I write this the Dow futures
indicate a gap of more than 175 points but at one point it was more than 200
points. If this bullishness holds, index
charts will be gapping above some price resistance levels or will be very near
then at the open. Keep an eye on the US points
this morning that has the possibility of enhancing or subduing the bullishness. Technically this could be the burst fo bullish
momentum to finally breakthrough the resistance above that has proved to be
such a stubborn obstacle for the last few weeks. With that said be careful not to chase the
gap up open. Let’s wait to see if the buyers
support the gap because the last thing we would want to see is a pop and drop
pattern.
