Rumors of a US/China negotiations
breakthrough, declining 10-year Treasury yields and busy earnings and economic calendars the
market has a full plate this morning. The
question is will it be a satisfying meal or will it cause indigestion? On the Economic Calendar the GDP according to
consensus is expected to decline and Jobless Claims rise slightly at 8:30 AM
Eastern. One has to wonder if that could
fuel growth concerns or if the numbers will come in better than expected to
reduce those concerns.
The technical s of the index charts don’t provide much in the way of clarity either. The QQQ remains the market leader holding on to a nice uptrend while the DIA and IWM struggle with resistance in a modest downtrend. The SPY appears to want to break the tie but continues to hover just above support and below resistance with indecisive price action. I think it’s safe to say anything is possible so plan accordingly.
On the Calendar
We have nearly 120 companies reporting earnings on the
calendar today. Notable reports include,
ACN & QIWI.
Action Plan
Futures were looking lower last night as Asian markets reacted negatively to the declining
10-year treasury yield. However, with
the rumor of a US/China breakthrough in the
trade negotiations European markets are up across the board and the US Futures have
responded bullishly bouncing off their overnight lows. As I write this Futures point to a flat open
but with nearly 120 companies reporting earnings and a full economic calendar
it’s anyone’s guess how we open trading today.
The consensus is suggesting a decline in the GDP number and a
slight increase in Jobless Claims 8:30 AM Eastern. It will be interesting to see if these two
reports will add to or take away from the economic slowdown concerns. The DIA
and the IWM are still in technical down-trends
under significant resistance levels even after the nice recovery off of
yesterdays lows. The SPY continues to
hover between support and resistance and the
QQQ remains the strongest of the indexes holding on to its uptrend. With so many
factors pushing and pulling the market
today anything is possible.
While the market keeps
a close eye on possible interest rate inversion and possible economic slowdown
the US Futures point to a bullish open and a welcome relief to last Friday’s
selloff. Currently the Dow futures point
to more than a 100 point gap up as I write this but still has to clear the
Housing Starts hurdle at 8:30 AM Eastern. A miss of consensus estimates could fuel the fire of economic slowdown while a beat
could clear the way for a bullish morning gap.
As nice a relief rally may be please remember it will take a
huge effort by the bulls to clear the technical damage created in last Friday’s
selloff. The DIA and IWM still the lower
high and are technically in a downtrend.
The SPY while technically stronger
still has significant resistance to deal
with while the QQQ continues to enjoy the
benefits of market leadership. Be careful
not to get caught up in fear of missing
out and chasing into positions as the market tests
price resistance.
On the Calendar
We have just under 60 companies reporting quarterly earnings today.
Notable reports today include CRON, OLLI, CCL FDS, INFO, KBH, MKC &
VALE.
Action Plan
After a very indecisive price action day the DIA finished up
a whopping $0.11, SPY down $0.21, QQQ down $0.31 and IWM up $0.66 we have a
substantial change of attitude this morning.
First Asian markets closed mixed but the NIKKEI and HIS posted solid gains lifting the US Futures. The good vibes continue this morning with European markets bullish across the board with
modest gains. As I write this Dow futures
suggest a gap up of more than 100 points but we still have some economic hurdles to cross before the open.
Besides some notable earnings the 8:30 AM Housing Starts
number will be important this morning amidst
the worries of an economic slowdown. Consensus estimates of 1.213 million units which is just slightly less than the
previous reading. Although a gap up will
be a nice relief remember we still have substantial
technical issues to overcome particularly
in the DIA and IWM so we must still keep a close eye on price resistance levels
above. However, the QQQ is still technically
sound holding higher lows and continues as the market leader at the moment.
If the US futures are any indication
of the day we have ahead we should expect price action to become a bit more
volatile and challenging and the 21% one day
rally in VIX seems to confirm that possibility.
During the night the Dow futures were up more than 100 points shortly
after the open but reversed sharply and traded more than 120 points lower as
Asian markets fell sharply due to global growth concerns.
Technically both the DIA and
the IWM have confirmed lower high failures at price resistance. Although Friday’s price action raises major
concerns for the SPY the pullback in QQQ is only a test of support and the
overall uptrend at this point. Currently
the US futures are only pointing to a modestly lower open but we should expect an
extra dose of price volatility so plan your risk carefully.
On the Calendar
On the Earnings Calendar we have over 70 companies reporting
earnings today. Among the notable reports RHT 7 WGO.
Action Plan
After 2-years of investigation it would seem the Mueller findings have cleared the President of the collusion with Russia. The Attorney General also says the report did
not find enough evidence to charge the president with obstruction of
justice. Now one would think that mess is finally behind us but I would bet money
that’s it’s far from over and will become
a never-ending story in the political
spin cycle. Rockets fired into Israel
will cut the Netanyahu visit to the US short and raises concerns of a violent escalation
in the area.
Futures have been a roller-coaster
ride overnight. First the Dow futures rallied more than 100 points after the AG cleared the
president. Then Asian markets opened and
fell sharply with the Dow futures reversing and dropping more than 120
points. European
markets are modestly lower across the board but the early morning pump has the
US futures suggesting only a modestly lower
open as I write this. I will not be at all surprised if both the overnight
high and low get tested at some point during the day.
Remember Friday’s sharp escalation in VIX suggests a bit more volatility
price action is not out of the question so plan your risk accordingly.
Global Growth concerns once again raise its ugly head after European data disappoints just one day after a broad-based market
rally. I must admit I was hoping for a
little follow through to the upside this morning but the futures are currently pointing to a gap down open across all
indexes. Overall it has been a great
week of gains in the QQQ & SPY and some profit-taking as we head into the weekend
should not be that surprising.
Although yesterdays strong
rally may have felt as if the all-clear sounded, however, a quick look at the index
charts shows us that price resistance above is still at work. The DIA
and IWM are particularly problematic with the lower high still in force even
after such a bullish move Thursday. Keep
that in mind as you plan your risk heading into the weekend.
On the Calendar
We have a light day on the Earnings Calendar with less than 40 companies reporting. Notable earnings DXLG, HIBB, JKS & TIF.
Action Plan
After such a big rally on Thursday that was very broad-based I was hoping for a little more
upside this morning. However, the market
has different plans after some disappointing European
data once again raises concerns of a global
economic slowdown. Asian markets managed
an ever so slightly bullish close across the board but this morning European markets are all seeing red.
US Futures that have been out of sync of late have linked
back up and currently indicate a lower open today. The recently
problematic Existing Home Sales out at 10 AM Eastern could belay some slow down
concerns if the number comes in showing an increase as the consensus is
expecting. Of course if it misses the exact
opposite may be true adding to the slow
down concerns this morning. All and all
it has been a fantastic week of gains and there is nothing wrong with a little
profit-taking as we head into the weekend.
The FOMC signals no rate increases for the rest of the year
but the market seems very unimpressed by the action. While the market has been trying to ignore the
clues of an economic slowdown the Fed appear to have taken a no-confidence vote in its strength. Financials quickly reacted negatively to the news and are looking slightly
lower this morning.
Asian and European
market responded mostly higher on the
news but the US Futures currently show mixed
reviews. The Dow indicates a slightly
lower open while the NASDAQ is suggesting slightly higher. Technically speaking the SPY and the QQQ are
in very good shape but the Dow and the IWM having printed lower highs at
resistance there is reason for a little caution. Also keep an eye on the VIX that once again
quietly crept up yesterday. If that
continues it could trigger a little profit-taking as we head toward the
weekend.
On the Calendar
We have nearly 100 companies reporting earnings today with
the most notable being, NKE, CSIQ, CTAS, CEO, CAG, DRI, LE, PTR & TCEHY.
Action Plan
The market seems quite
unimpressed by the FOMC decision to avoid raising interest rates for the rest
of the year. Normally low rates would
inspire the market but in this case the FOMC appears not so confident in the overall economy. During the night the Dow Futures were down
about 100 points even though Asian and European
markets responded marginally higher. As I write
this futures have rallied in the pre-market pump but it would not surprise me to the
overnight lows tested sometime today.
The QQQ remains very strong, the SPY is holding firm in consolidation but the DIA and IWM continue
to signal a little caution due to their lower high prints. All indexes continue to have resistance challenges
above making the path forward difficult to determine. The VIX edged higher again yesterday
suggesting a little fear might be creeping
in which could lead to some profit-taking if that were to continue as we head toward the weekend.
The bulls were in full force and driving upward until news
came out raising questions about the US/China trade negotiations bringing out the bears to reverse the days
progress. After the close, FDX reported disappointing earnings raising more
questions about global growth concerns.
Asian markets were tepid and cautious overnight closing mixed but mostly
lower. European
markets are currently trading lower across the board this morning as well.
US Futures are pointing to a flat open and would not be a surprise
to see light and choppy price action
until the FOMC reveals it’s a decision on interest rates and delivers their
forecast at 2:00 PM Eastern. Directly
after expecting some wild price volatility
that could extend through the chairman’s
press conference scheduled at 2:30 PM. Setting that aside, the candle patterns left
behind on yesterday index charts increases
the caution level with their placement at or near price resistance.
On the Calendar
We have 52 companies on the Earnings Calendar stepping up to report
today. Among the notable reports: GIS,
GES, MU and WSM.
Action Plan
Early bullishness yesterday faded away in the afternoon session after a news report suggesting the trade
negotiations with China had run into new
challenges. Candle patterns left behind
at or near resistance levels suggest a little caution might be in order as the market
tries to digest the full measure of the issue.
The disappointing market price action dealt
with another disappointment as FDX missed earnings and tumbling nearly 7%.
Today is all about the FOMC
and although the committee is not likely to raise rates, their forward forecast
and decisions on balance sheet unwinding will have the market’s attention. The festivities begin at 2:00 PM Eastern with
the Chairman’s press conference at 2:30.
It would not be a surprise to see light choppy price action as we wait
for the Fed announcement followed by a period of volatility and wild price swings
directly after. Currently futures are pointing
to falt open with European markets currently in red across the board and Asian
markets having closed flat to mostly lower overnight.
The feisty bulls staged
a late-day rally yesterday and according to
the futures markets want to keep their
party going this morning despite the FOMC meeting that begins today. Asian markets were tepid and cautious closing
mixed but mostly lower overnight. However
European markets as well as the US Futures
are throwing caution to the wind with the Dow pointing to a triple point gap up.
A breach of key resistance levels in the SP-500 and the NASDAQ
will occur this morning if the bullishness holds until the open. Remember not to chase the morning gap let’s
wait until we see buyer supporting the gap to avoid the dreaded pop and drop at
price resistance. Having said that if those
feisty bulls want to party ahead of the FOMC lets ride along and continue to
profit as they push our positions higher.
Gaps are gifts so consider taking some of those gits to the bank.
On the Calendar
We have 50 companies reporting earnings today. Among the most notable are MIK, CHA, DSW,
FDX, FNV and SCS.
Action Plan
Today begins the FOMC meeting where its largely expected that
the committee will make no change in the current interest rate. It’s normal for price action to become light and choppy as the market waits for the Fed decision but a late afternoon
surge of bullishness defied the norm. Though
Asian markets closed mixed but mostly lower, European markets are currently green across the board as are the US Futures.
If the bullishness in the futures holds through open the NASDAQ and the SP-500 will open above key
resistance levels. As always, don’t
chase a morning gap into price resistance because
of the of possible pop and drop it
can set up. There is no rush so let’s wait and see if buyers step
in after the open supporting the gap. Honestly,
I don’t understand where all this bullishness sentiment is coming from but that
doesn’t matter. My job, our job as
traders is the trade the chart and if the
bulls want to go up then the understanding why is not important. We of course always have to remain vigilant watching
for price action clues of profit taking or reversal prepared for that
possibility. Until then it the bulls want
to party let’s continue to profit from
the festivities.
Futures are mixed this morning as the US government launches
a probe of the FAA and their approval of the 737 Max aircraft. As a result BA shares are gaping down, giving
back Friday’s gains and setting the stage for a mixed open according to the
futures. With the FOMC this week and first-quarter earnings finally starting
to wind down don’t be surprised to light and choppy price action after the morning
rush as we wait for the announcement and forecast Wednesday afternoon.
*** The flooding in Nebraska
made last week very challenging. They
restored internet service to the area on Saturday and the flood waters have
begun to recede across Nebraska. I’ve completed
the clean up from the flooding in my house and reconstruction can now begin. My wife and I would like to thank everyone
for all the kind notes and well wishes we have received over the last
week. You are the best!
As bulls continue to test
upper resistance levels keep in mind that the bears continue to lurk about defending
their territory above. Remember to take
some profits near resistance and be careful not to over-trade or directionally overcommit
as the bulls are bears battle over this important level.
On the Calendar
We have over 140 companies fessing up to quarterly results
this morning. Notable reports include,
TLRY, TACO, LL, OSTK & STNE.
Action Plan
The bulls have been doing a great job pushing hard and
continuing to test key resistance levels in the index charts. However, the bears have stood their ground thus
far defending resistance with the exception of
the QQQ which closed just above resistance on Friday. Currently US Futures are mixed with the Dow
looking lower amidst an FAA probe and BA shares giving up Friday’s gains. Asia stocks closed higher overnight, and European
markets are mostly higher but mixed at the time of writing this blog post.
As markets continue to be
hope for a positive resolution Us Trade Negotiations the market faces another
FOMC meeting this week including the all-important forward forecasts. Don’t be surprised to light choppy price
action after the morning rush as the market waits for the Fed Announcement on
Wednesday afternoon. Although there are
still notable earnings this week today is last big day of the very strung out first-quarter
earnings season with more than 140 companies reporting. Stay long but respect overhead resistance
saying focused on price action for clues and stay disciplined to your rules.
An AAPL upgrade fired up a strong tech rally offsetting the BA decline as the orchestrated an impressive short squeeze and putting the bulls back in control at least for the short-term. The big question is can they maintain this control as we once again push upward toward the significant price resistance levels in the index charts. Only time will tell but it would be wise to respect the price resistance being careful not to over-commit staying focused on the price action for clues of a bearish line of defense.
BA is once again pushing lower this morning after yet another
country has grounded the new 737 pulling the Dow Futures down in the process. After such an impressive rally yesterday it
would not be out of the question to see a little market rest or even a bit of a
profit-taking pullback. Stay focused on the price action and remember that bears will
not likely give up without a fight.
On the Calendar
On the Earnings Calendar we have 125 companies reporting
today. Notable reports, COHU, COUP, DKS,
MOMO, SWCH & ZAGG.
Action Plan
After a fantastic rally lead
by tech stocks after an AAPL upgrade. BA’s
substantial gap down recovered sharply after the FAA announced that the aircraft
was still airworthy. However, during the
evening another country has grounded the new 737 and the stock is once again
sliding south pulling the Dow futures into the red this morning. SP-500 and NASDAQ futures are currently modestly
higher.
As indexes recover from last
weeks slide, keep an eye on overhead resistance and be careful not to overtrade
or overcommit long near such significant price levels. At 8:30 AM Eastern we get the latest reading
on CPI where consensus is expecting to see an increase. Obviously, that could have greatly effect the
market open depending on the actual number so keep an eye on the futures as we approach
the open. Remember to trade the chart
for what it is not for what you want it to be.
