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.
Last nights CNBC headline that reads, “US and China are reportedly drawing closer to a final agreement” lifted markets around the world with the hope a deal is forthcoming. Although the article goes on to say both countries still have to agree on a number of important issues the bulls grabbed a hold of that headline and ran. As a result, the US Futures point to a gap up open that indicate the SPY and the QQQ will open above key resistance levels assuming the bullish sentiment holds throughout the morning.
Once again assuming the bulls have the energy to hold this
new price level of support it opens the door for the market to test all-time market highs in the near future. Of course we still have to be watchful of a
pop and drop pattern if buyers fail to support the morning gap so be careful
not to chase. Remember we have the big employment
number coming Friday morning and it’s not unusual for the market to become
light and choppy as we wait.
On the Calendar
We have fewer than 30 companies reporting earing today as
the first quarter reports continue. Among the most notable are CALM, DGLY & KODK.
Action Plan
Shortly after the Asian markets open CNBC reported that the
US and China are drawing closer to a final trade agreement. Then went on to say, “Both countries have yet
to agree on a number of important issues.” None the less the Asian markets responded
bullishly to the headline closing higher across the board. Currently European
markets are mixed but mostly higher with the FTSE just slightly in the
red.
Consequently the US
futures are bullish across the board with the Dow indicating a gap up of 100
points or more as I write this report.
At the close yesterday the indexes all faced a challenging price
resistance level but as of right now both the SPY and QQQ indicate they will
gap through resistance at the open. That
certainly opens the door for a possible
new record market highs in the near future
assuming the bulls can hold above resistance.
Of course we must still watch for the possibility of a pop and drop pattern developing if buyers
fail to support the morning gap this morning.
Remember we have the big Employment Situation number coming Friday
morning and it’s not uncommon for the price
action to become light and choppy as we wait.
The first trading day of the second quarter the bulls put on
a display of power charging through price resistance and breaking the last
weeks chop zone. Unfortunately, the bulls
stopped just short of the next price resistance hurdle in all four of the major
indexes. It would be completely rational to think the momentum of yesterday bullishness would be enough to carry the index’s over this price barrier. However, it’s also quite rational to think a little pause to take a breath or even some profit-taking
might be in order.
With the DIA and SPY finally
making a new high we technically in a much better position, assuming the bulls
can hold this newly attained elevation. The
QQQ stopped short of a new high yesterday closing at price resistance while the
IWM continues to languish in a downtrend.
Futures are currently flat this morning but keep an eye on the Durable
Good Orders report at 8:30 AM Eastern as it could set the tone for the day.
On the Calendar
We have a significant
decline in earnings reports today with just
over 20 companies. Notable earnings include
GME, PLAY, NG & WBA.
Action Plan
After huge bullish one day rally where the Dow gained a
whopping 329 points the futures indicate a more subdued open this morning. As a matter of
fact, US Futures trading in the red
all night and have only begun to see positive prints in the pre-market
pump. Asian markets finish their trading
day mixed but mostly higher overnight. European
markets are bullish across the board this morning after reporting stronger than
expected factory activity overshadowing
another failed Brexit vote. Unless they
can come to an agreement in the coming
days the 5th largest economy will leave the bloc on April 12 with no
deal.
Although yesterday was a great day for the market finally
breaking a week-long chop zone the
indexes charts find themselves with yet another price resistance hurdle just above. Perhaps the sheer
momentum of yesterday’s bullishness is
enough to propel the indexes over the hurdle but
we shouldn’t expect the bear to give up easily.
After such a big one day move it would not be at all surprising to see a
little profit-taking to test overnight futures lows or pause the action to take
a breath. The Durable Goods Orders at
8:30 AM could set the tone for the day but the consensus estimate is expecting
a decline in this potential market-moving number.
Futures opened trading very bullish last night on optimism as the US/China trade negotiations resume in Washington DC today. The good vibes were significantly enhanced during the night when better than expected Chinese
manufacturing data came to light. Not surprisingly, Asian markets closed
sharply higher last night and European markets are strongly bullish this
morning ahead of yet another Brexit vote.
Perhaps this is the bullish shot in the arm we have been waiting for to provide the momentum required to break through the index price resistance that has proved so stubborn over the last few weeks. Keep in mind, we still have a full plate of economic and earnings data for the market to digest this morning that could either enhance or subdue how the market open. Be careful to avoid chasing the morning open with the fear of missing out. Watch and wait for price action to prove buyers will step in to support the gap. Remember gaping into price resistance can produce those nasty pop and drop patterns so it’s wise to exercise a little patience this morning.
On the Calendar
We have 164 companies reporting on the first day of the 2nd
quarter. Among the notable reports CALM,
DGLY & KODK.
Action Plan
Stronger than expected Chinese
manufacturing data and optimism as the US and China resume trade negotiations today
in Washington DC has futures signaling a substantial morning gap up open today. Asian markets closed bullish across the board
last night and European markets are also sharply higher this morning ahead of another
Brexit vote. We also have a busy
Economic Calendar this morning Retail Sales, PMI Manufacturing, Business
Inventories, ISM Mfg. Index and Construction Spending for the market to digest.
As I write this the Dow futures
indicate a gap of more than 175 points but at one point it was more than 200
points. If this bullishness holds, index
charts will be gapping above some price resistance levels or will be very near
then at the open. Keep an eye on the US points
this morning that has the possibility of enhancing or subduing the bullishness. Technically this could be the burst fo bullish
momentum to finally breakthrough the resistance above that has proved to be
such a stubborn obstacle for the last few weeks. With that said be careful not to chase the
gap up open. Let’s wait to see if the buyers
support the gap because the last thing we would want to see is a pop and drop
pattern.
US/China trade optimism inspired Asian markets to close
higher and currently European markets are
also feeling bullish ahead of another Brexit vote later this morning. As a result, the US Futures are very happy
this morning suggesting a 100 point gap up in the Dow at the open. As great as that sounds be careful chasing the morning gap because of the significant
resistance levels just above. Let’s wait
and is if buyers step in after the open supporting
this gap.
If you have yet to take some profits this week, remember
gaps are gifts and this morning may be a perfect
time to reduce risk by taking some
profits to the bank. Be careful not to over-trade as the market tests
resistance and keep in mind the bear are unlikely to give up easily. However, the hopefulness of a US/China trade deal may be just enough to
inspire the bulls to keep climbing. Stay
focused on price action and give consideration
to the risk you carry into the weekend.
On the Calendar
On the last trading day of the first quarter we still have
we still have companies more than 60 companies reporting. A good thing because 2nd quarter earnings season
will kick off in about three weeks.
Among those reporting BB and KMX are notable.
Action Plan
As US/China trade negotiators
gave the markets a lift overnight stating the talks were productive but stopped short of providing any
details. Asian markets closed higher across
the board on the trader optimism. European markets are also higher across the board
and later this morning the UK will once again vote on a Brexit plan that would
have them leaving the EU by mid-May.
That of course could create a market reaction and currencies may see some fluctuation in reaction.
Currently US Futures
are also suggesting a bullish open today
but except the QQQ the indexes still have
significant resistance levels above. The bulls and bears have been pretty equally matched
all week leaving behind indecisive candle patterns. Perhaps the positive comments on the trade negotiations
is enough to inspire the bulls but they will need some significant momentum to
break the bearish resistance levels above.
Remember not to chase a morning gap into price resistance. Wait and see if buyers step in supporting the
gap. Have a great weekend everyone.
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.
