As harsh as the selling might have felt during the morning
session but thus far the bulls defended index 50-day average supports.
A very good sign but with so many big earnings reports rolling our this
week we should expect more volatility over the next couple of weeks with both bullish
and bearish surprises.
Earnings season normally produces significant overnight market gaps adding complexity to your trading decisions. New US/China trade tensions and newly imposed sanctions on Venezuela also adding stumbling blocks effecting price action volatility. Keep in mind the tech bellwether AAPL reports after the bell today opening the door for a Wednesday market gap. Clearly, there is a lot to consider as we plan our risk in the day ahead. Be careful not to over-commit and stay focused on price action.
On the Calendar
On the Earnings Calendar, we have 112 companies reporting today. There
are more notable reports today than I can list here but keep in AAPL, AMD and EBAY report after the bell today.
Action Plan
After a steep decline during the morning session, the bulls went to work showing a
willingness to defend the 50-day average
support of the indexes. A good sign but
the real test will be after the market bellwether
AAPL reports after the bell this afternoon.
Currently, futures are suggesting
a modest decline this morning, but with so
many earnings reports before the bell, I would
expect something very different by the open.
New tensions this morning
as US and Russia impose sanctions on Venezuela and new tensions on the US/ China
trade negotiations as the US files criminal charges on the china mobile device maker
Huawei. Keep in mind that the FOMC
meeting begins today which will culminate with their rate decision Wednesday afternoon. AAPL’s earnings report will set the stage for
a flurry of big tech reports this week. Unfortunately, most
of them will report aftermarket close which sets the stage for significant
market gaps the next morning. Consider the
gap risk as your plan ahead and expect considerable price action volatility.
A big week of heavyweight earnings, big economic reports, and the FOMC rate decision the conditions are
right for the perfect storm for high volatility. With prices testing the long-term downtrend resistance and the short term trend up and
appearing overextended it’s unwise to ignore the possibility of a selloff. There at a lot of clues pointing to caution. However, the direction will likely come down
to earnings results and the FOMC decision.
Because many of the Tech heavyweights
report after the market closes, we should also expect the possibility of overnight
reversal gaps and plan our risk accordingly.
Asian markets closed mixed but mostly lower while European markets are
currently lower across the board. US Futures
have been under some selling pressure all morning and currently suggest a lower
open. Stay focused on price action and
don’t be surprised to see higher volatility and challenging price action ahead.
On the Calendar
On the Earnings Calendar,
we have a very big week ahead with more notable earnings than I have the time
to note here. Make sure you’re checking earnings reports against all
current holdings and new positions you’re considering. Today we have 73 companies reporting.
Action Plan
The market has a lot to deal with over the next couple weeks,
and I would suspect the price action could
become more volatile and trading could become
more challenging. On the Economic
Calendar this week we have the FOMC rate decision on Wednesday along with the
GDP report and then the big Employment Situation number on Friday to name some
of the heavyweights. We also have a big week of earnings with many
of most market influential companies reporting which could easily make for some
wild price swings.
Price action wise we are simultaneously
in the perfect price pattern for the market to rise or fall and I believe
it will all be up to the FOMC and how the earnings come out that will decide
the direction. Believe me, I don’t want to see the market pullback, but I think we should prepare for that possibility.
Unfortunately, if it does happen there
is a high probability will begin with an overnight gap. Of course the
same is true if the news supports higher prices because many of the big techs
report after the bell. Set your bias
aside, remain flexible and focused on price as this week unfolds. Remember sometimes less is more and we don’t
have to trade every day to be successful traders.
Our government works in mysterious ways as two failed votes
to reopen the government inspires confidence that a compromise may be forthcoming.
That hope is inspiring the bulls this morning with the US Futures
suggesting a substantial gap up
open. Earnings, Durable Goods Orders, and
New Hope Sales results may enhance the bullishness or temper that sentiment by
the open but so far the bulls appear firmly
in control.
While the indexes were content to consolidate there was steady
buying pressure showing up in a lot of stocks
yesterday. I personally found it very difficult not to overextend myself with so many great looking chart patterns and
setups appearing. As for now, this is a stock pickers market with a lot of good price action signals. Unfortunately,
we still have to hold our breath as we enter positions because all the
government uncertainty could easily reverse the current sentiment in about half
a heartbeat. Keep that in mind as you
consider the weekend ahead and the risk that can bring to your portfolio.
On the Calendar
Durable Goods Orders – Consensus – 8:30 AM Eastern
New Home Sales – Consensus – 10: AM Eastern
Baker-Hughes Rig Count – 1:00 PM ET
On the Earnings Calendar,
we have 38 companies reporting. Notable
today: ABBV, APD, CL, DHI, LEA, NEE, SYF, & VOD.
Action Plan
While the indexes continued to consolidate yesterday, there was consistent buying pressure
showing up in a significant number of stocks.
So many in fact it was difficult to
stick to my plan and avoid becoming over-committed while still testing
resistance in the indexes. Both bills voted
on yesterday to reopen the government failed, but
that is now being viewed as a good thing because Senate leadership is finally
trying to work out a compromise.
Overnight Asian markets rallied despite the trade war
jitters that continue to crop up every few days. European markets are also bullish this
morning helping the US Futures point a substantial gap up open of more than 150
points as a write this. Of course
Earnings and the two big economic reports could certainly change that before
the open. With the renewed hope that the government shutdown may
soon consider your holdings carefully as
we move into the weekend. If the market
does open with a nice gap up, I will likely
bank some profits to reduce my weekend risk.
I wish you all a great day and a fantastic
weekend!
The market appears stuck
between a rock and a hard place as talk of an economic
slowdown, political uncertainty both domestic
and abroad, and earnings season unfolds.
Indexes dance between significant levels of price resistance and current short-term trend supports waiting for
the event that will determine direction.
While I believe it’s very healthy that the markets are consolidating all
the outside influences means traders will have stay on their toes and prepared for just about anything.
Be cautious about over-committing
to a directional bias as we chop around in this tight price action range. Just one event could change direction, and unfortunately,
that could easily happen overnight. Yesterday’s
whipsaw price action should serve as a reminder
of a nervous market and how quickly sentiment
can shift.
On the Calendar
On the Earnings Calendar,
we have the biggest day this week with 125 companies reporting results. Notable
earnings: ISRG, ALK, BMY, DFS, ETFC, FCX, HBAN, INTC, JBLU, MKC, NSC,
RCI, LUV, SBUX, UNP, GWW, WDC.
Action Plan
There was more conversation from IMF’s Lagarde about an economic slowdown overnight with China as the
point of concern. As a result, we see muted and mixed markets around the world. As I write this US Futures, suggest a flat open, but
I suspect that could change dramatically as the morning earnings results roll
out. Two bills to end the government
shutdown mover forward to a today but
both are currently expected to fail. That’s
really not important, but the heightened political spin leading up to
the vote and the aftermath could certainly
affect the market attitude.
As of now the Bulls and Bears appear deadlock with the
indexes slipping into a consolidation range.
Personally, I think this rest is healthy
for the market as we build a level of price action support just above the 50-day
moving averages. Unfortunately, with all the political uncertainty, economic
slowdown talk and earnings results just one event
could substantially change market sentiment.
That could mean a fast move up or a fast move down, and traders should
prepare for the possibility of either. A
directional over-commitment could be a mistake as we continue to dance between
support and resistance levels.
Although the selloff yesterday may have been painful for may
long traders there was a silver lining showing at the close. After a hard test of their daily 50-averages, all four
of the major indexes bounced and closed at or just above this key psychological
support. This morning US Futures are
currently suggesting a bullish open, but
a lot will depend on the morning earnings
reports if that holds.
With little on the Economic Calendar today, political uncertainty
and global growth concerns, there is significant
pressure for companies to perform and prove they
can support current price levels.
Yesterday the VIX indicated a little fear is coming back into the market. Couple that with earnings and we have a recipe
for increased volatility hinged directly upon earnings results.
On the Calendar
On the Earnings Calendar, we
have 93 companies reporting today.
Notable reports, F, ABT, CP, CTXS, CCI, FFIV, KMB, LRCX, LVS, NG, PG,
TXN, UTX, & XLNX.
Action Plan
A decline of 3% in Existing Home Sales yesterday enhanced the
premarket fears of an economic slowdown pushing the Dow down 300 points. However, after a hard test of the daily 50-averages, the bulls responded showing at
least an initial willingness to defend it as support. As tenuous
as it may seem, the uptrend is still valid thus far and perhaps we a consolidation
will develop. Earnings Reports will be a
key element over the next few weeks that determine
market direction.
According to new reports,
the Presidents proposal to reopen the government will come to a vote later this
week, but the opposition vows it will not pass.
Pressure from employee groups continues
to increase as some 800,000 continue to work without pay. Futures this morning are pointing to a
bullish open currently suggesting a gap up of more than 100 points providing
some relief to yesterday selloff. Unfortunately, the bullishness has little to no
tailwinds with Asian market having closed
nearly flat on the day and European markets
mixed but currently mostly lower. With little
on Economic Calendar, today Earnings Reports
will be in high focus.
Three day weekends are a nice
break for traders, but they tend to create volatile price action and market
reversals upon the reopening. On Friday
I mentioned my intention of taking profits and reducing risk ahead of the long
weekend. With the futures currently
suggesting a Dow gap down between 150 and 200 points at the open, I’m that my
profits safely tucked away before the close on Friday.
Should we not panic as if the sky is falling? No, after such a huge market runs a pullback or consolidation is normal and
healthy as long as price support hold and the
bulls show a willingness to defend them.
The IMF report citing global growth concerns have markets around the world
reacting negatively to the possibility of an economic slowdown. However, the real test for our market will be
company earnings reports. So stay focused
on price action, support, resistance, and trend for clues to market direction.
On the Calendar
We have 81 companies reporting earnings today with notable earnings COF, FITB, HAL, JNJ, PETS,
PLD, STLD, AMTD, TRV, UBS & ZION.
Action Plan
Concerns on of global growth concerns after an IMF report, the
Government Shutdown in entering day 32 and new concerns about US/Trade negotiation progress have the bears pushing a bearish open today. Asian markets all closed in the red overnight,
and European
markets are also lower across the board. As a result,
Futures are currently pointing to gap down open between 150 to 200 points lower
at the open.
The economic report of Existing Home Sales and a significant
number of Earnings Reports this morning could easily improve or worsen the situation
depending upon the results. As nasty as
this gap down may seem at the moment, keep in
mind the indexes are currently holding above price support levels and their
respective 50-day moving averages. The expected
pullback or consolidation is a healthy thing as long as the bulls defend
support levels. Keep in mind earnings season
tends to increase market volatility and big morning reactions are typical. Which means bearish markets can reverse
bullish and vice-versa so remain flexible and focused on the price action and
the patterns within the charts.
Yesterday’s news that the US was considering tariff reductions
with China sent the index sharply higher. Although there are still no specific details markets
around the world reacted positively on the hope progress is being made. Asian markets closed higher across the board,
and European indexes are currently sharply higher this morning in reaction.
US Futures are pointing to a substantial
gap up open that push US indexes above there respective 50-day averages just ahead of a 3-day weekend. After such a strong bullish run and gaping higher this morning I will likely take-profits on several
positions to reduce the risk of the long weekend. Gaps are gifts, and I would rather make a
bank deposit today than worry about the possibility of events that could change
sentiment over the weekend and holiday. If
the market continues higher, I can always reenter but if the market reverses I
won’t get a do-over to capture gains.
On the Calendar
On the Earnings Calendar,
we have 15 companies reporting with the most notable being CFG, KSU, RF, SLB,
STT, STI, VFC, and WIT.
Action Plan
After the bell,
yesterday we NFLX reported a beat on the top line but a slight miss on revenue to
kick off our the tech earnings season reports.
Next week the number of earnings reports begin to ramp, up and that will often increase market volatility. First quarter earnings session drags out much
longer, so it’s very important to make it a habit of check reporting dates as
part of your daily preparation. Skipping
this step can make for very painful lessons.
Thus far we’ve had a mix of earnings results lets hope that begins to
improve over the next couple weeks.
Next Monday the markets will be closed for Martin Luther
King so think about your risk as we head into the 3-day weekend. Today marks
the 28th day of the government shutdown, and both sides appear unwilling to budge. The market has largely ignored the shutdown
but as it continues to drag out the unintended economic consequences are starting
to appear and could begin to cause some market stress. Futures are pointing to
a gap up open of more than 100 points on US/China trade progress. A gap up ahead of a long weekend may be a
good time to ring the register and bank some profits to reduce the risk of uncertainty. Have a great weekend everyone!
With indexes at or near significant price resistance levels
and their respective 50-day moving averages,
traders should be careful about adding new long positions
and thinking about banking some profits.
Please understand that I am in no way suggesting bearishness. In fact,
with the DIA and the SPY so close to testing
their 50- day averages I would not want to rule a bullish effort to do just that. However, we can also not rule out the possibility of a pullback at resistance and
some profit-taking to begin.
We have a lot of economic and earnings data coming out
before the bell today, so anything is
possible, but futures are currently
pointing to gap down open. Asian market
closed lower across the board, and European markets are also all in the red this morning. MS, has
already reported an earnings miss this morning so we will need some good data to
inspire the bulls. The price support built
over the last week with the tight range consolidation may now provide some selloff
protection if the bears decide to come to
work today. As always, price is king so stay focused on price action for
clues.
On the Calendar
We have 43 companies reporting earnings today with NFLX
kicking off tech reports this afternoon.
Notable reports today AXP, BBT, FAST, JBHT, KEY, MTB, MS, PPG & TSM.
Action Plan
Earnings and Economic reports will likely be the key driving
force for the market this morning. On
the Economic Calendar, we have Housing
Starts, Jobless Claims, and the Philly Fed
all coming out an hour before the market open.
On the Earnings Calendar, we will
hear from BBT, KEY, MS, MTB, and PPG
before the bell which could obviously move the market. T2122 continues to suggest a pullback, or at a minimum,
a consolidation could begin at any time, but
so far, the bulls have had the energy and momentum to keep moving higher.
Currently, the Futures are suggesting
a lower open, but with so much pending news anything is possible by the time we
hear the bell ring. With the DIA and the
SPY so close to testing their 50-day averages I would not rule out the possibility
of a bullish effort to accomplish that task.
If we do see some selling, the tight consolidation just below could
easily serve to support prices keeping the bears in check. Remember the rule: we want to buy stocks at or
near price support. With the indexes at
or near price, resistance be very careful not to over-commit to long positions.
Domestic and international political uncertainty appears to have no effect on the tenacious bulls with a refuse to lose attitude. Today is a big day of earnings and economic
reports that could bring out some volatility depending on the results. Inspired by a price increase from NFLX the QQQ
reached out to test its 50-day average as resistance yesterday. The Dow will need more than a 300 point rally,
and the SP-500 will require another 20
point gain to match that feat.
A tall order perhaps considering how stretched this rally has become, but you never say never. The
British Parliament will once again attempt
a no-confidence vote of the Prime Minister today which could create some market
turmoil as they continue to wrestle over leaving
the Euro. Remember that Price is King
and our job as traders is to stay focused
on how the market reacts to the news, not
the news itself!
On the Calendar
We have 24 companies stepping up to report results on the
Earnings Calendar today. Notable
earnings, GS, AA, BAC, BK, BLK, SCHW, CMA, CSX, FUL, PNC, and USB.
Action Plan
The Brexit vote suffers an epic
failure, and Parliament the Prime minister will once again face a no-confidence
vote later today. The market goes
up. The 26th day of the government
shutdown and the market goes up. Several
notable earnings miss with the latest miss from BLK this morning, and the
futures currently point to gains. In the
last several days any hint of profit taking is met by a wave of program buying
as the tenacious bulls push upward toward the 50-day moving averages. The bulls are in control, and they are not
taking no for an answer!
T2122 continues to signal
that the rally is overbought and suggesting
a pullback could occur at any time. Traders need to stay on their toes watching price
action and remember that the bears could reemerge
at any time. We have a big day on the Economic Calendar
today with Retail Sales numbers out before the open that could easily inspire
the bull or bears depending on the results.
Stay focused and flexible because
anything is possible.
Earnings reports, the government
shutdown in its 25th day and a Brexit vote could make for a
challenging day. So far the bulls have done a very good job of
defending price supports, but the bears
have also been working hard keeping the index
range bound in a rather tight consolidation. That consolidation could easily become the
launching platform to attack the 50-averages, which
for Dow is nearly 400 points higher. Or,
it could also become the “border wall” that
the bears defend.
Today we could see a rise in
volatility this afternoon depending on the result of the Brexit vote because of
the currency ramifications. We will have
to remain flexible, stay focused on price action and avoid over-committing to a
directional bias as the events of the day roll out. Fast price action and whipsaws are possible
after the Brexit vote so stay on your toes, as it may prove to be a challenging
day.
On the Calendar
On the Earnings Calendar,
we have 18 companies reporting. Notable
reports JPM, UNH, WFC, INFO & DAL before the market open. After the bell UAL reports.
Action Plan
Earnings results and political uncertainty will keep traders on their toes today. First,
we have several notable earnings before the bell that could provide a little volatility
before the open. Then this afternoon we
could see some substantial volatility as a result of the Brexit vote this afternoon. At this time the vote is expected to fail, and some say it could be an epic failure that
could wildly move currency markets. As
we begin the 25th day of the shutdown
TSA workers all across the country are calling in sick in protest. Air travel could become very difficult and create
unintended economic impacts as the shutdown drags on.
The good news is that the bulls thus far seem largely
unaffected by the turmoil rejecting yesterday’s gap
down and defending price supports. Currently,
the futures are suggesting a gap up to an upper range of the current
consolidation, but that could easily improve or worsen as earnings results roll
out. T2122 pulled back yesterday but remains
stretched suggesting more pullback or consolidation is possible. I would not rule out a bullish push to test
the daily 50 averages nor can we rule out the possible pullback so stay flexible
and focused on price action for clues. With
the Brexit vote possibly kicking in an extra dose of volatility it could be
challenging day to navigate.
