Modestly better than expected earnings results and a 2-year debt ceiling agreement between the Whitehouse and Congress have the US indicating a bullish open ahead of a big day of reports.  After a mostly choppy price action day, the bull finally overwhelmed the bears as they defended trends and key supports.  Of course with nearly 140 companies on deck to report and the Existing Home Sales number a 10:00 AM Eastern a lot could change by the open but so far it would appear the bulls have the upper hand.

Asian markets responded bullishly overnight on the better than expected earnings results closing in the green across the board.  European markets are also bullish this morning as they welcome a new Prime Minister ( Boris Johnson ) and a government reorganization that may or may not lead to Brexit deal.  As a result, all four major indexes indicate a bullish open.  Expect price action volatility to expand as the number of earnings reports ramp-up this week.

On the Calendar

On the Tuesday Earnings Calendar, we have about 140 companies fessing up to quarterly results.  Notable reports include AN, AVY, BIIB, CNI, CNC, CMG, CB, KO, DFS, FITB, FE, HAS, IRBT, JBLU, KEY, KMB, LMT, PNR, PHM, DGX, SHW, SNAP, SWK, TXN, TRV, UBS, UTX & V.

Action Plan

After a mostly choppy price action day, the bulls finally got it together and appeared to gain the upper hand by the close.  The QQQ demonstrated the tenacity of the bulls recovering and defending a key support and ultimately maintaining the bullish trend in the DIA, SPY as well.  Earnings after the bell appeared to come in slightly better than expected and the announcement of a Whitehouse and Congressional 2-year debt ceiling deal also lifted spirits.

Consequently, US Futures are pointing to a higher open this morning ahead of nearly 140 earnings reports that obviously could improve or dampen the actual open depending on the reaction of the results.  At 10:00 AM Eastern we will get the latest reading on Existing Home Sales which can move the market and the only such report on the economic calendar with the power to do so today.  I’m expecting volatility to expand the rest of the week as the number of earnings reports expands.  Challenging price is likely with the possibility of substantial morning opening gaps that could include overnight reversals.

Trade Wisely,

Doug

Friday’s price action certainly raised a lot of concerns, but the selling stopped short of breaking the current up-trends in the DIA, SPY, and QQQ leaving behind a palpable earnings uncertainty.  Of course, the growing tensions with Iran and the uncertainty of US/China trade negotiations and huge earnings calendar this week only add to the uncertain path ahead.  We should expect and prepare for the possibility that two-sided very challenging price action will continue in the days ahead.

Asian markets struggled overnight closing in the red across the board.  However, European markets are currently trading with modest gains across its 3-major indexes this morning.  US Futures are also projecting modest gains at the open as earnings continue to roll out.  There is little on the Economic Calendar for the market to react on this morning, so it’s all about the quality of the earnings reports and how they are perceived by the market this morning.  With so many big reports this week we should plan for the possibility of large overnight gaps and reversals and should plan our risk accordingly.

On the Calendar

On the Monday Earnings Calendar, we have 70 companies reporting in a week where the number of earnings ramp up substantially.  Among the notable are ACC, CALM, GNC, HAL, LII, PETS, STLD, AMTD, WHR, and ZION.

Action Plan

No doubt about it last Friday was a rough day as selling increased into the close as traders took profits ahead of an uncertain weekend.  Tensions with Iran continued to grow after Friday’s capture of a British oil tanker and now the claims they have claimed they have captured and detained about a dozen individuals they accuse as US spies.  However, the Friday selling stopped short of breaking the current uptrends in the DIA, SPY, and QQQ.  Although the price patterns left behind warrant an extra measure of caution keep in mind, there must be a downside follow-through breaking trends to indicate bearishness.

This morning futures are currently pointing to bullish open ahead of the 70 or so earnings reports expected today.  We should expect the rather challenging volatility to continue and the possibility it could ramp up with about 800 earnings reports, including three-quarters of the so-called FANG companies.  Large overnight gaps are possible as these big techs report so carefully plan your risk.  So far, the earings price action has been very choppy and two-sided, so it may be wise to avoid becoming over-extended in your holding with a single directional bias.

Trade Wisely,

Doug

After a concerning morning selloff during the morning session, the bulls stepped up right on queue defending current up-trends and holding key support levels with a nice afternoon rally.  After the bell, yesterday MSFT’s strong earnings report also seems to have at least temporarily lifted some trade war fueled tech earning concerns. 

FOMC members Willimas & Clarida spurred speculation of a more aggressive interest rate cut after their comments late Thursday.  As a result, Asian markets closed decidedly bullish seeing green across the board.  However, European markets are mixed but mostly slightly lower this morning after the Fed clarifies and tones down the rate cut rhetoric.  Consequently, US Futures point to modestly bullish open as earnings reports roll in and ahead of the Consumer Sentiment at 10:00 AM Eastern.  With tensions once again on the rise after the US downing of an Iranian drone carefully consider the risk you carry into the weekend.

On the Calendar

On Friday’s Earnings Calendar we have a slightly lighter day with 39 companies reporting.  Notable reports today include BLK, CLF, KSU, MAN, NVR, SLB, STT, and SYF.

Action Plan

Yesterday’s strong earnings report from MSFT may go a long way to soothing traders concerns of a trade war influenced tech slow down at least for today.  Next week we jump headlong into earnings with more than 800 companies expected to report with big tech being a major focus.  There is renewed hope of a bigger rate cut this morning after a late afternoon speech’s by FOMC members Williams & Clarida spurred speculation of a more aggressive Fed.  If that is the case, with such strong current economic indicators, it will leave very little firepower for the Fed if an economic crisis really does arrive. 

Technically speaking the afternoon rally yesterday seemed to come at just the right time holding current trends and key support levels in the indexes.  Toss in a good MSFT report, and a warm and fuzzy feeling of possible rate cuts the US Futures are suggesting a modest rally at the open, and I would not be surprised if overnight futures highs get tested sometime during today’s session.  We have Consumer Sentiment at 10:00 AM Eastern that is expected to remain strong and more Fed speak to round out this week’s economic calendar. 

Trade Wisely,

Doug

With the smell of fresh blood in the air after the disappointing results, NFLX reported yesterday the nearly forgotten bears are once again on the prowl.  NFLX has warned they would miss expectations and it makes you wonder what might lay ahead with the many other company warnings that were issued.  Technically speaking the bullish trends in the DIA, SPY and QQQ remain intact, but we should expect price action to become much more volatile as earnings reports increase over the next couple weeks.

Asian markets closed lower across the board overnight, reacting to earnings and growing trade war tensions.  European markets are currently mixed but mostly lower, citing trade uncertainty and tech earnings concerns.  US Futures have recovered significantly from overnight lows ahead of the 8:30 AM eastern Jobless Claims report and the Philly Fed Business Outlook Survey which both have the potential of moving the market.  I would expect challenging price action in weeks ahead, so plan your risk carefully.

On the Calendar

On the Thursday Earnings calendar, we have 90 companies stepping up to report quarterly results.  Among the notable reports ALLY, BBT, COF, CHWY, DHR, DOV, ETFC, GPC, HON, ISRG, MTB, MS, MSFT, NVS, NUE, PM, PPG, SKX, SWKS, STI, TSM, UNP, and UNH.

Action Plan

NFLX earnings disappointed traders after the bell yesterday reporting a significant decline in domestic subscribers.  Shares of the streaming service are indicated to open nearly 40 points lower this morning pulling the QQQ down to test breakout support levels.  It may also elevate the concerns of all the other tech companies that have warned about missing expectations this season.  Perhaps an even more damaging report came for CSX yesterday sending the railroad sharply lower raising significant concerns for the overall transport sector.

With another big round of earnings reports this morning and the tech giant MSFT reporting after the bell, we should expect an increase in volatility.  As of the close of yesterday overall trends of the DIA, SPY and QQQ remain bullish, but with the scent of blood in the air, hungry bears will be on the prowl.  As I write this, the bulls are trying to put on a brave face with the futures recovering significantly from overnight lows and currently suggesting modestly bearish open.  I would not be at all surprised to see a retest of the overnight lows depending on the morning earnings results and the 8:30 AM Economic Calendar reports. 

Trade Wisely,

Doug

Presidential remarks that trade negotiations with China have a long way go and his willingness to raise another 325 billion in tariffs did little to dissuade the bulls after Powell’s dovish speech in Paris raising hopes of a rate cut.  Although choppy consolidation over the last couple days has maintained bullish trends, it seems to have also seemed to signal a wait and see attitude as earnings season continues to ramp up.  Big tech will begin to join the earnings stage this afternoon with reports from EBAY, NFLX, and IBM.  Keep in mind that NFLX has already warned it will miss analysts estimates.

Asian markets reacted negatively to the tough trade talk closing modestly lower across the board overnight.  Currently, European markets are mixed but by and large slightly lower as they also ponder the difficulties ahead with Chinese trade negotiations.  Despite that US Futures continue to put on a brave face indicating a very slightly bullish open fulled by hopes of a rate cut ahead of the Housing Starts report at 8:30 AM Eastern.   Anything is possible, so plan your day very carefully and stay focused on price clues as they develop.

On the Calendar

On the Wednesday Earnings Calendar, we have 55 companies reporting quarterly results.  Among the notable reports are AA, BAC, BK, CCI, EBAY, IBM, NFLX, KMI, NDLS, PNC, PGR, USB & WIT.

Action Plan

We have an interesting setup for this mornings market.  The President yesterday remarked that the US/ China negotiations have a long way to go and went on to say he could impose an additional 325 billion in tariffs.  However in a speech in Paris yesterday the Fed Chairman Powell reiterated a weakening global economy once again raising hopes of a rate cut.  While Asian and European markets reacted negatively to the long road ahead on trade, the US futures choose to rally during the night on rate cuts.  It would seem our priorities are very misplaced!

After 2-days of sideways chop, perhaps today with a big round of notable earnings reports the market can find the inspiration it needs to break the log jam.  BAC has already topped estimates, but as of writing this report, investors appear unimpressed, and the stock is indicated lower.  This afternoon  EBAY, NFLX, and IBM will set the stage for the beginning of big tech earnings.  Also, keep in mind, we have Housing Starts and the Petroleum reports on the economic calendar that may have a say in market direction. 

Trade Wisely,

Doug

Based on yesterdays anemic price action, it might be fair to say that the Amazon Prime sales event has become a de facto holiday much like Black Friday.  Although the sales event has been extended another day this year, the bigger round of earnings coming out this morning could inspire more attention from the trading community and shaking up the price action for today.  As with every earnings season, we must prepare for the possibility of higher volatility and have a well-thought plan to protect our current positions and overall capital from the extreme moves stocks can make after reporting.

Asian markets closed mixed, but mostly lower overnight and European markets seem somewhat subdued this morning with modest mixed results as they also wait for earnings results.  Consequently, US Futures are at this moment almost flat hoping to find inspiration in the coming reports.  JPM has already reported an earnings beat, but currently, traders appear dissatisfied with the result as the stock is currently indicated to gap lower at the open.  Trends remain very bullish, although it appears a bit extended as the uncertainty of earnings begins to ramp up. 

On the Calendar

On the Tuesday Earnings Calendar, we have 43 companies fessing up to results as 3 quarter earnings begin ramping up.  Some of the notable reports today include CSX, CTAS, DPZ, GS, JNJ, JPM, SCHW, UAL & WFC.

Action Plan

Price action was light and choppy as if it was a holiday market.  My guess is the Amazon Prime day and the huge sales events other retailers put on to compete distracted traders and investors out searching for a deal.  With the Prime event now extended another day if possible today could be much of the same.  However, today, we have a bigger round of earnings that could shake up the market can get things going.

We also have a parade of Fed speakers on the Economic Calendar today including Jerome Powell, but it’s unlikely we will learn any new details as to if or how much of a rate cut is on the way.  Chart technicals continue to be very bullish, and the trends remain strong all-be-it a bit extended.  With so many earnings reports for traders to digest anything and everything is possible and we should prepare for the possibility of heightened volatility.  Remember to check all your current positions against the earnings calendar as well as any new positions you are considering to add.  I know it’s a pain to do, but the market rarely rewards laziness, and as the CEO of your trading business, the buck stops with you! 

Trade Wisely,

Doug

Hopes of an FOMC rate cut has set new record levels in the DIA, SPY, and QQQ, but now we will see how the rubber meets the road as earnings session begins.  Can companies produce the traction that supports these lofty prices is the question?  The big banks will dominate this week, but the bigger concern is how the big techs will fair amid the lingering trade war with China.

Overnight Asian markets managed to close with modest gains across the board even as the reviled the lowest quarterly growth figures in 27 years.  European markets are also trading in the green this morning with modest gains across the board.  As a result, the US Futures are pointing to a bullish open ahead of the Citigroup earnings report.  Expect higher volatility in the days and weeks ahead with the possibility of large overnight gaps as markets react to actual earnings results.

On the Calendar

The Earnings Calendar this week will be dominated by the big bank reports that kickoff the 3^rd quarter earnings season today.  Among the notable reports are C, JBHT & WTFC.

Action Plan

As third-quarter earnings season start rolling out today, we will find out if company results can support the dramatic increases in prices over the last couple months.  An FOMC rate is one thing, but as China witnessed overnight, the trade war may have something say about earnings growth.  China numbers revealed the slowest quarterly rate of growth in 27 years.  US Economic indicators have continued to show strength however, many companies have already issued warnings that they will miss the analyst’s estimates. 

With so many prices at new record highs, the pressure is on for earnings performance.  We should expect significant volatility in the days and weeks as the market reacts to the actual results.  The bigs banks are on deck this week with some of the big techs starting next week where most of the concern lies.  The technicals of the DIA, SPT, and QQQ remain very bullish with the bulls firmly in control.  Let’s hope their energic anticipation of a rate cut holds up as earnings begin to roll out beginning with Citigroup this morning before the bell.

Trade Wisely,

Doug

With Jerome Powell’s congressional tightrope walk complete the market couldn’t be happier with his dovish comments pointing to an interest rate cut later this month.  Now the question to be asked is the potential rate cut already priced into the market?  The just 28 trading days the Dow has gained 2400 points topping 27,000 for the first time in history.  Could this become a buy the rumor sell the news kind of event?  It might be wise to consider that as you plan your risk into the weekend.

Earnings session kicks off on Monday with many of the big banks reporting next week so buckle up for increased volatility.  Overnight Asian markets closed with modest gains across the board after the release of trade data.  European markets are also showing gains this morning, which is helping to lift the US futures that are pointing to another bullish open and likely more new record highs.

On the Calendar

On the Friday Earnings Calendar, we have 17 companies stepping up to report.  Notable reports include INFY & HIFS.

Action Plan

With Jerome Powell’s congressional tour complete and his dovish comments suggesting an interest rate cut is forthcoming new market records highs continue.  The power of an assumed rate cut is truly amazing with the Dow having gained 2400 points in just 28 trading days.  That exuberance looks to continue this morning the futures pointing to another gap up open today.  As we head into the weekend after such an impressive run, it may be wise to ring the register taking some profits to the bank with earnings season kicking off on Monday.

As of now, the bulls are in full control, and the technicals of the charts continue to look strong but be very careful chasing stocks so late in a rally.  At some point, the low rate euphoria will begin to diminish, and the market will remember we still don’t have a trade deal with China.  With punishing tariffs still in place, many companies continue to warn that they will miss analysts estimates this quarter.  Something to at least consider as you plan your risk into the weekend and the beginning of earnings season.  Have a great weekend!

Trade Wisley,

Doug

New record highs printed in the Dow, SP-500 with the NASDAQ managing to close at historic highs as the market reacted to yesterday’s dovish comments from the Fed Chairman.  Today Powell has a repeat performance on Capitol Hill, but today his hot seat is in front of the Senate Banking Committee.  Although I think it’s unlikely we will learn any more during today testimony, we should still prepare for the possibility of volatility.

Overnight, Asian markets reacted bullishly to Powell’s comments closing up across the board.  However, as I write this, European indexes are mixed and nearly flat, but that is not affecting the US Futures that point to another bullish open.  The CPI and Jobless Claims report at 8:30 AM Eastern will, however, have the final say on the market open this morning.  The trends are bullish, and the bulls are clearly in control with the market fueled up on likely interest rate cuts.

On the Calendar

On the Thursday Earnings Calendar, we have just nine companies reporting quarterly results.  Notable reports include DAL and FAST.

Action Plan

The Fed Chairmans testimony in Congress yesterday all but confirmed a rate cut of at least 25 basis points is on the way.  Today he must do it all over again at the Senate Banking Committee, but I would be surprised if we learned any new details today.  The market reaction was initially very strong, pushing the SP-500 briefly over 3000 for the first time in history.  The Dow printed a new record high but was also unable to hold it by the close leaving shooting star pattern on SPY and DIA charts.  However, bulls carried the day in the QQQ closing firmly in new record territory with tech now leading the way.

A shooting star pattern is considered a bearish pattern, but that is only true if prices follow-through with a downside move.  Without a follow-through, it may signal a little caution and possibly not even that if the bulls find the energy to move the indexes higher.  We have the CPI and Jobless Claims at 8:30 AM Eastern that have the potential to move the market before the open.  Currently, the futures point to a modestly bullish open with trends remaining very strong.

Trade Wisely,

Doug

Jerome Powell will be walking a tightrope as he testifies on Capitol Hill today and tomorrow.  The world is hoping he will bring some clarity to the FOMC’s next move but don’t be surprised if he keeps us in the dark.  At times he will likely sound dovish as he shares his concerns for a weakening global economy.  However, don’t be surprised if he also comes of hawkish as he holds to his mandate of jobs growth that is currently exceeding expectations.

Consequently, we could experience some price volatility as the market reacts to his comments.  Remember we also have the release of the FOMC minutes at 2:00 PM Eastern today that can also create some market turbulence.  Asian markets closed mixed, but mostly modestly lower and European markets are currently seeing modest declines across the board as the world waits for the Fed Chairman to speak.  As a result, US Futures are also suggesting a bit of pensiveness pointing to a modestly lower open.  Plan your risk carefully.

On the Calendar

On the hump day Earnings Calendar, we have 12 companies stepping up to report results.  Amon the notable reports will be BBBY and MSM.

Action Plan

Today will be a very big day for Fed Chairman Jerome Powell as he testifies in Congress.  He will be walking a slippery tight rope between Washington D.C. and Wall Street trying to uphold his mandate while trying to appease both worlds.  Certainly, a tough task that is likely to create some market volatility today and tomorrow.  I expect him to lay out a case for possible rate cuts due to a weakening global economy.  However, I also expect him not to provide us the certainty of a cut or how deep that cut might be if the data moves them to that decision.

If that’s not enough to give the market a case of indigestion then lest toss in the release of the FOMC minutes at 2:00 PM Eastern to keep everyone guessing.  As I write this futures are a bit pensive suggesting a modest pullback at the open as we wait for the Capital Hill drama to unfold.  Trends in the DIA, SPY & QQQ remain bullish while IWM continues to struggle with an overall downtrend.  Plan your risk carefully and remember Earnings season kicks off next Monday.

Trade Wisely,

Doug