A Little Rest

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A Little Rest

Climbing more than 2200 points in just 10-days, the US futures this morning are suggesting a little rest might be in order.  As we enter the 20th day of the government shutdown and as of now no indication of when an agreement with China might occur there is still significant uncertainty for the market to ponder.

With the VIX closing below a 20 handle perhaps we could see a simple consolidation rather than the punishing selloff we have experienced lately.  With hundreds of charts indicating possible bottoming patterns, a little rest or pullback could set up some great entries for swing and position traders.  Remember that the market is likely to remain very sensitive to political news and still subject to quick price action and reversals so remain flexible and focused on price action.  Great opportunity for swing traders and good stock pickers may be just around the corner so dust off that wishlist and be prepared.

On the Calendar

calendar

On the Earnings Calendar, we have 17 companies reporting earnings today with none that are notable unless you happen to own one of them.  Remember earnings season is coming, it would be a good time to get into the habit of checking reporting dates.

Action Plan

With a failed meeting between the President and Democratic congressional leaders our government shut down now enters day 20.  The news on US / China trade remains positive, but there has been no indication as to when a decision might be forthcoming.  After notching a 4th bullish day, the futures are suggesting the market needs a little rest this morning.  As I write this the Dow indicating a gap down just short of 100 points but I do expect that improve during the pre-market pump. 

Climbing more than 2200 Dow points in just ten days a little rest is definitely warranted, but that does not necessarily mean we are due a significant selloff.  The best scenario would be a consolidation as we wait for some resolution of all this government uncertainty.  Let’s keep a close eye on price support levels in the indexes.  The good news is with so many charts showing signs of bottoming a pullback, or some consolidation could be just what the doctor ordered to set up trade entries.  Polish up your watchlist because major opportunity may be just around the corner.

Trade Wisely,

Doug

Morning Market Prep Video
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US / China talks inspire bullishness.

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bullishness

The US Futures are suggesting the 3rd straight day of bullishness this morning wish is something the Dow has not seen since the 30th of November.  Trade negotiations with China continue today, and according to reports progress is being made, and hopes for an agreement are rising.  As we enter day 18 of the government shut down the President will bring his case the people this evening from the oval office.  A move, that is sure to create a firestorm of Washington spin and could affect market volatility throughout the day and overnight. 

The morning gap raises the possibility of a pop and drop pattern so traders should be careful not to chase into the open until we see if there is follow-through buying that supports the gap.  With all the political news swirling traders should stay focused on price action and prepared for whipsaw and quick price action. 

On the Calendar

calendar

On the Earnings Calendar, we have 15 companies reporting with HELE and LNN as the most notable both of which report before the open today.

Action Plan

With two days of bullish price action behind us, the 3rd day in a row with a bullish close a condition not seen since November 30th.  Although we are in the 18th day of the Federal Government shutdown, the US Futures are pointing to bullish open this morning with a gap up of more than 150 points.  The bullish sentiment appears based upon the positive reports that the US and China trade negations are making progress that may soon result in a deal.

The President will be speaking from the Oval Office this evening taking the border wall debate directly to the people.  Expect the political spin to reach new heights and keep in mind the market could be very sensitive to the reports.  With a large gap up this morning, we will need to be on the lookout for a possible pop and drop unless buyers prove the ability to support the gap.  Please keep in mind that that T2122 is in the bullish reversal zone.  That does not mean a selling is imminent, but it does suggest a short-term overbought condition that we must respect when considering new long positions.  Today could prove to be a bumpy ride so stay flexible and focused on price action.

Trade Wisely,

Doug

Morning Market Prep Video

Shutdown Continues

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Shutdown
Government Shutdown

Uncertainty continues as the government shutdown begins a new week with little to no progress.  As a matter of fact, the President seemed only to reinforce his position with a flurry of border security tweets this weekend.  On the positive side, there seems to be a renewed energy between the US and China to resolve the trade war.  Let’s hope for a positive outcome soon! 

Futures are currently pointing to a flat open which is something we’ve not seen for a long time.  A nice change in my humble opinion.  A quiet consolidation would be nice, but I suspect the market will remain very sensitive to political news and volatility remains high.  After a 750 point rally on Friday, don’t rule out the possibility of some profit-taking.  I would also not be that surprised to see a test of the overnight high in the futures.  Stay flexible and prepared for quick reversals on political news and as always stay focused on price.

On the Calendar

calendar

On the Earnings Calendar, there are 12 companies reporting earnings today, but there are none particularly notable.

Action Plan

US futures opened trading very positive and at one point suggested a bullish move of more than 150 points.  However, having sold off during the evening, we could experience some we’ve not seen for a long time, a flat open to the market.  I must say a nice change if that does occur!  US / China trade negotiations seem on track this morning, and both sides appear to more inclined to complete the process.   Unfortunately, there is still on progress on the government shutdown and the President seemed to dig in his heels with a flurry of tweets on border security this weekend.

Although there is still significant political uncertainty, the market on Friday seemed to issue a vote of confidence rallying more than 750 points.  I would expect the market to stay very sensitive to political news with fast moves that could easily reverse direction intraday.  Don’t rule out the possibility of some profit taking today nor the possibility of testing the overnight futures highs.  The current market condition continues to favor day trading but a flat open today could finally signal that the market is trying to settle its nerves.  As always stay focused on price action and remain flexible.

Trade wisely,

Doug

Morning Market Prep Video

Another 300-point reversal.

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Another 300-point reversal

Another day and another 300-point reversal gap overnight, challenging even the most experienced traders.  I wish I could say the turmoil will be over soon, but there is no way to know how long it will take for the political drama to subside.  With the Employment Situation report and the Jerome Powell comments later this morning I would not rule out the possibility of more intraday whipsaws. 

With such extreme intraday moves quick day traders continue to have the upper hand with swing and position traders have little to no edge.  Holding positions overnight is risky business let alone holding over a weekend.  Consider that risk as you plan how to handle the weekend ahead. 

On the Calendar

calendar

We have just nine companies reporting earnings today.

Action Plan

The market currently seems to love 300 point gaps this week.  Wednesday more than a 300 point gap down a whipsaw back up.  Yesterday day more than a 300 point gap done and three whipsaws during the day covering more than 300 points. Now, this morning US Futures are pointing to a 300 point gap up though we are still waiting for the government funding to reopen.  The rebound this morning is focused on US-China trade talks improving.  With the big Employment Situation report coming out an hour before the market open and the Jerome Powell speaking at 10:15 we could certainly see more whipsaws today.

As always after the morning gap wait to see if buyer’s support the gap and plan for fast price action as extreme price volatility to continue.  Once again the current market condition favors quick day trading due to the big intraday swings.  The market remains very sensitive to political news as well so plan your risk going into the weekend very carefully.

Trade Wisely,

Doug

Morning Market Prep Video

AAPL projections disappoint.

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AAPL

Mostly blaming the trade war and slowing sales in China, Tim Cook lowers the revenue projections for AAPL for the first time since the introduction of the iPhone in 2007.  Because of the companies heavy weighting in the DIA, SPY, and QQQ we will see sharp declines at the open as investors reprice the tech giant’s value. 

Asian markets closed down across the board last night, and European indexes are also lower this morning.  Selling pressure in the US Futures is pointing to a gap down of more than 300 Dow points at the open.  I think the big question for the day is will the AAPL disappointment spill over into other companies triggering more selling and fear.  Expect very fast price action at the open that will challenge even the most experienced day traders.  Buckle up it could be a very rough day.

On the Calendar

calendar

On the Earnings Calendar, we have 14 companies reporting today.

Action Plan

After gaping down more than 300 points yesterday, positive comments from the President on trade negotiations embolden the bulls recovering to an 18 point Dow gain.  This morning the market faces a gap down that will be much harder to recover from and may spawn additional selling in the tech sector.  Yesterday after the close AAPL reported disappointing revenue guidance sending the stock sharply lower.  With slowing iPhone sales this is the first time AAPL has lowered revenue projections since the popular device came to market in 2007. 

Currently, the Dow Futures indicate a gap down open of more than 300 points.  With AAPL so heavily weighted in the DIA, SPY, and QQQ it could be a rough day for the market.  According to a report, Warren Buffett will lose 2.8 Billion on his AAPL position today.  As the power switches isles in the House today the first order of business is electing a new speaker.  Once that is complete, they hope to pass several bandaid bills as a temporary patch to reopen parts of the Federal Government while negotiations continue on the border wall.  With so much uncertainty expect volatility to be back on the rise this morning fast price action more suitable for day traders than swing and position trading.

Trade Wisely,

Doug

Morning Market Prep Video

Government Uncertainty

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Uncertainty

As I write this, the Dow is expected to open more than 300 points lower and continues to face the uncertainty of the government shutdown.   Asian markets sold off sharply during the night with December manufacturing numbers came in worse than expected.  European markets are bearish across the board as well this morning, and the US Futures are pointing to a nasty overnight reversal gap down. 

Today the President is meeting with Congressional leadership so we will have to say on our toes because the market is likely to react quickly to any news, positive or negative that results from the negotiation.  The volatile price action continues to favor the quick day traders as the risk of holding positions overnight in this emotional market remains very high.  Price action will likely be very sensitive to any political news so remain focused, flexible and ready for intraday reversals.

On the Calendar

calendar

On today’s Earnings Calendar we have only seven companies reporting, and unless you happen to hold them, they are not particularly notable. 

Action Plan

The bullish gap on Monday looks fully reverse as the market sentiment continues to flip-flop from moment to moment.  The current price action continues to favor quick day trading because the risk of holding over trades over a single night is unsuitable for most swing traders.  The President has called a meeting with Congressional leadership to discuss ending the government shutdown.  The news spin out of this meeting could move the market sharply so we will have to stay flexible and focused on price action.

Currently, the Dow futures are pointing to a 350 point gap down which of course means we have to watch carefully for the possibility of a reversal whipsaw much like we experienced last Thursday.  However, there is no reversal, and the sellers remain in control after the open it would be wise to remember that support could be hundreds of points lower.  That’s one of the challenges of whip like this because the price action didn’t take the time to build support levels.  Volatility is likely to be very high today and price action very sensitive to political news.  Stay flexible, focused on price action, avoid trying to predict and watch out for possible whipsaws.

Trade Wisely,

Doug

Morning Market Prep Video

Farewell to 2018

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Farewell to 2018

As we bid farewell to 2018, reflecting on the last 12 months of trading, it was overall a great year albeit quite challenging to navigate.  As we enter 2019, the market is showing its first clues of bottoming but still faces significant uncertainty this will likely continue to challenge traders for the next several weeks to months.

But for those disciplined to price action, I have no doubt 2019 will provide us with great opportunities to profit.  Be careful with this mornings gap up and watch for the possibility of a pop and drop.  We need to see buyers coming in to support this gap and willing to challenge resistance levels.  That may be a lot to ask with volumes likely to decline quickly today as traders set their sights on 2019 celebrations.  I wish you all a Happy New Year and a prosperous 2019!

On the Calendar

calendar

On the Earnings Calendar, we have 18 companies reporting this New Year’s Eve, but none of them are particularly notable. 

Action Plan

The Futures are pointing to a big gap up this morning after the President stated he had a good conversation with the Chinese President Xi about trade.  As I write this the Dow Futures are suggesting a gap up of more than 200 points.  As great as it is to see bullishness in this market I must say it seems highly suspect and would suggest caution on this last day of trading for 2018.  Shortly after the Presidents comments, a report suggested that the two sides are still very far apart on key elements of the agreement.  Another clue is that Asain markets closed mixed with the Nikkei lower 62 points on the same news.  European markets are also not impressed and currently mixed but mostly falt on the day.

After the morning rush, expect the volumes to drop off quickly as traders turn there focus toward celebrating the new New Year.  Keep in mind the Federal Government is still shut down, and the new Congress will begin to whip up market emotions later this week.  If buyers support the gap after the open keep an eye on price resistance levels and watch for the possibility of a pop and drop.  I wish you all a Very Happy New Year!

Trade Wisely,

Doug

Morning Market Prep Video

Massive Short Squeeze

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Short Squeeze

Yesterday’s huge reversal triggered a massive short squeeze forcing those caught short forcing them to buy to cover positions.  Those that held their short positions through the night hoping for another reversal will certainly experience more pain this morning with Futures pointing to a trip point gap up at the open.  If you are holding long positions, a big Congratulations is in order but remember to take profits because this massive volatility is likely not over. 

The Dow gained more than 1400 points in just 2-days!  A gap up this morning could easily bring in profit-takers as they avoid the weekend risk.  Congress has now adjourned leaving the Federal Government shut down for the rest of the year.  With many traders likely planning to extend their New Year’s holiday volume could be lacking on Monday and remember the markets will close on Tuesday.  There is a lot to consider when planning your risk heading into this weekend.

On the Calendar

calendar

A light day on the Earnings Calendar with only Eight companies reporting with none that are particularly notable unless you happen to be holding them.

Action Plan

With the Congress now adjourned until next year, it looks as if the Federal Government will remain shut down until sometime next year.  We should continue to expect the massive volatility to continue which makes holding positions into he the weekend carry significant risk.  US Futures this morning are pointing to a significant gap up follow-through on yesterday’s huge reversal whipsaw that triggered a massive short squeeze.  Those that held short positions through the night will be in pain this morning keeping the pressure on the short squeeze, but if you’re holding long positions I would like to remind you that gaps are gifts!

The potential of another reversal whipsaw heading into the weekend is certainly not out of the question so be careful not to allow greed, prevent you from taking profits.  Personally, I would like to see a bullish close today but with the extreme volatility and the Dow having gained more than 1400 points in just two days some profit taking to avoid the weekend risk would not be a big surprise.  Also, keep in mind that volume on Monday (New Year’s Eve) is likely to drop and price action becomes erratic as traders head out for the holiday.  Plan your risk accordingly.

Trade Wisely,

Doug

Morning Market Prep Video

Christmas Eve Rout

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Christmas Eve Rout

With he seeing nothing but political turmoil and uncertainty ahead created the worst Christmas Eve rout in market history.  As Congress returns and the border wall debate resumes traders will have to stay very nimble because the Washington news spin cycle could create some extreme market whips.  A market condition for only the most experienced day traders.  Swing and position traders have no edge as the extreme price action chops up accounts of those unwilling to stand aside.

Technically speaking the market the market is in a short-term oversold condition that would normally indicate a relief rally is close at hand.  However, with the current political turbulence sellers could easily remain in control much longer than we can stay liquid waiting and hoping for a bounce.  One news report or Tweet is all it would take reversing the market direction in about half a heartbeat.  Protect your capital and remain disciplined as uncertainty continues to whip.

On the Calendar

Calendar

Today we have 16 companies reporting earnings with LIVE being the most notable of the day.  Make sure to continue checking reporting dates against current holdings.

Action Plan

If you ever needed an example of just how much the market hates uncertainty you only need to see the 653 point selloff on Monday; the worst Christmas Eve performance in market history.  Although there has been no change in the uncertainty the US Futures are pointing to a bullish open this morning.  Of course, that’s assuming they can maintain those positive feeling throughout the morning.  Given the volatility of late, we have to assume anything is possible at the open.

The President seems to have dug in his heels regarding the border wall and so has the Senate which refuses to consider the House bill that includes funding.  As Congress returns from Christmas break and the battle resumes the market will be sensitive to any news reports on the subject.  Expect violent swings as the market reacts to the Washington spin cycle.  Considering the market has been straight down for the last eight days of trading we should typically be on the watch for a relief rally.  Unfortunately, until the market sees some resolution to the political uncertainty sellers could easily remain in control.

Trade Wisley,

Doug

Morning Market Prep Video

T’was the day before Christmas

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T’was the day before Christmas

‘Twas the day before Christmas

And the market wears a frown. 

No congressman’s stirring,

our government’s shut down!

Powell is the Fed Chair,

His rates raised a stench.

Now everyone’s thinking,

He might be the Grinch.

Though jobs are still growing,

And building is strong.

The Bull’s Ran away,

Cause they think that’s all wrong!

FANG has a toothache,

And oil’s in a slump,

But no matter what happens,

We’ll blame it on Trump.

No Santa Clause rally,

Cause China won’t trade,

But it all will get better,

Once an agreement is made.

Though technically damaged,

And the market feels fear,

This one day will be over,

So be of good cheer!

Take heart fellow traders,

As Christmas draws near,

Resolve to joyful,

And embrace the New Year.

Though our problems are many,

Count your Blessings and worth,

With freedom our nation,

the best place on earth!

On the Calendar

Calendar

There are only five companies reporting earnings today and none that are particularly notable unless you happen to hold them or thinking for buying one.

Action Plan

Although the market will open this Christmas Eve, expect volumes to drop quickly after the morning rush and price action to become light and choppy.  Of course, as the political drama continues to unfold in Washington DC, we can not rule out the possibility of volatility sparked by news reports, or random tweets.  Currently, the US futures are suggesting a gap up open, and it holds it will constitute the totality of this years Santa Clause rally. 

If you’re thinking about trading today and holding over the holiday, I would suggest you thoughtfully reconsider the risk of the government shutdown that may last for the rest of the week.  A Christmas truce on volatility may be called for today but expect it to roar back to life on Wednesday.  The period between Christmas and the New Year is normally challenging due to light and volume but this year could see very wild price action due to the political uncertainty.  The market will close early today at 1:00 PM Eastern and of course will stay closed Christmas day.

I wish you and your family a Very Merry Christmas!

Trade Wisely,

Doug

Morning Market Prep Video