I think cautiously optimistic best describes the current
market condition and investor sentiment even though yesterday’s pop and drop price
action may have been bit disappointing. The
bullish trends in the DIA, SPY and QQQ show the overall optimism of an all-time
market high resistance test. However,
the price action is showing considerable caution as we approach high resistance
levels as investors wonder what comes next?
Can earnings continue to support current price evaluations or not?
On this 4th day of 2nd quarter earnings
results thus far are somewhat mixed so investors are is hoping clues will emerge
today that support current trends. So
with the overall market cautiously optimistic we must stay with the trend but keep
a close eye on price action as we approach resistance highs. Clearly the bulls want new market highs but the
big question is earnings continue to support these lofty levels?
On the Calendar
On the Earnings Calendar we have more than 70 companies reporting
on this the 4th day of 2nd quarter earnings. Notable reports today include, PIR, ABT, AA,
BK, BHP, CCI, ETFC, KSU, LVS, MS, PEP & USB.
Action Plan
As I write this, US Futures are modestly bullish anticipating
a fresh round of earnings and last nights report showing China’s economic growth
was better than expected. After the bell
yesterday NFLX disappointed investors but even after projecting weak forward
guidance the price bounced back substantial for early low’s. IBM is also lower this morning in reaction to
earnings that disappointed. Asian
markets closed mixed but modestly higher overall and currently European markets
show modest gains but also showing slightly mixed results.
While yesterday’s pop and drop pattern was disappointing there
was no technical damage to the index charts that continue to remain bullish. With a large group of notable earnings this
morning anything is possible by the time the market opens today. Although holding trends in the DIA, SPY and
QQQ and investors appear very cautious as we approach all-time high resistance
levels. If we do ultimately gap higher
at the open, we must once again exercise discipline waiting to see if buyers step
in to support the gap. I’m confident the
markets will reach out to test all-time highs but the big question is can they
hold them once there?
A fresh round of earnings reports that include some big tech
has inspired the futures markets sharply higher this morning and has the QQQ
reaching out of an all-time high test. If
this bullishness holds throughout the morning the Dow futures suggest a gap up
of more than 100 points after barely having the energy to move yesterday. Asian market closed bullish overnight and
European markets are mixed but mostly higher.
Bullish trends are intact for the DIA, SPY and QQQ but the IWM is questionable as it struggles with a lower resistance level. Remember to respect the resistance above a be careful to not chase into the morning gap. Wait for proof that buyers will support the gap as the indexes reach out toward all-time high resistance levels. Personally it would be very disappointing after such an impressive 3-month rally if we don’t at least test the all-time highs. The bulls want that headline but let’s not forget there could be bears up there ready to defend so plan your risk accordingly. It’s great to be reaching out but the next step is the ability to hold on to the new elevation and that is still in question.
On the Calendar
We have over 60 companies reporting today with the first big
tech earnings beginning. Some of the
more notable reports today are, BAC, BLK, CMA, CSX, JNJ, UNC, UNH, WIT, NFLX
& IBM.
Action Plan
After a disappointing price action day where both bull and
bears lacked inspiration futures are bullish ahead of a fresh crop of earnings that
include some big tech reports. During
the night Asian stocks advanced closing higher across the board. European markets are currently mixed but mostly
higher as cautious traders wait for US earnings data. So far this morning JNJ has reported an
earnings beat and is indicated higher and although BAC reported better than
expected the stock is currently indicating a flat to lower open. After the bell today we will hear from IBM
and NFLX.
Technically speaking the bullish trends continue in the DIA,
SPY and QQQ. We are so close to testing
the all-time highs in the QQQ and the SPY it would be a surprise to me if the
bulls don’t find a way to reach out very shortly. Who knows today might be the day! Currently the Dow futures suggest a gap up
open of more than 100 points and if the current bullishness continues through
the open the QQQ will be very close to breaking out. As bullish as it now appears make sure you
respect resistance an avoid chasing the open gap. Let’s make sure buyers are willing to step up
in support.
It’s tax day 2019 but that fact has not dulled the bullish
market sentiment with the QQQ and SPY within striking distance of all-time
highs. Asian markets closed mixed and subdued
overnight but European markets are modestly upbeat this morning. As I write this US futures are pointing to a
modestly bullish open while waiting for the fireworks of big bank earnings
reports.
Although within striking distance of all-time highs remember
that means there is price resistance above that must be dealt with and defeated. The DIA still has more than a 400 point hill
to climb to test the all-time highs and that could be challenging to do with challenges
that BA continues to face. Let’s also
not forget the small caps that are lagging way behind at the moment. The bulls are without a doubt currently
control but they do face challenges to consider as you plan your risk for the
week ahead.
On the Calendar
We have more than 60 companies reporting earnings today. Notable reports include C, GS & SCHW.
Action Plan
After Friday’s strong market performance on the back of big
bank earnings the QQQ and SPY are within striking distance of all-time highs. With another round of big bank earnings
reports this morning can the bullishness continue. At this hour futures are pointing to a modest
open but that will likely change for better or worse as soon as earnings begin
to roll out. Asian markets closed mixed
but mostly lower overnight but European markets are currently modestly higher
citing optimism over US-China trade talks.
This weekend the President once again public chastised the
FOMC stating the market would be a lot higher if the Fed would stop worrying about
nonexistent inflation. I suspect that
kind of pressure will do little to dissuade Mr. Powell and the other voting committee
members. Remember earnings season and
very volatile with large gap up or gap down market opens. Don’t get caught up in the hype and drama and
make the mistake of chasing the gap. Allow
the market to open, watch the price action, making sure buyers or sellers
support the gap before making entry decisions.
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.
