Global Growth concerns once again raise its ugly head after European data disappoints just one day after a broad-based market
rally. I must admit I was hoping for a
little follow through to the upside this morning but the futures are currently pointing to a gap down open across all
indexes. Overall it has been a great
week of gains in the QQQ & SPY and some profit-taking as we head into the weekend
should not be that surprising.
Although yesterdays strong
rally may have felt as if the all-clear sounded, however, a quick look at the index
charts shows us that price resistance above is still at work. The DIA
and IWM are particularly problematic with the lower high still in force even
after such a bullish move Thursday. Keep
that in mind as you plan your risk heading into the weekend.
On the Calendar
We have a light day on the Earnings Calendar with less than 40 companies reporting. Notable earnings DXLG, HIBB, JKS & TIF.
Action Plan
After such a big rally on Thursday that was very broad-based I was hoping for a little more
upside this morning. However, the market
has different plans after some disappointing European
data once again raises concerns of a global
economic slowdown. Asian markets managed
an ever so slightly bullish close across the board but this morning European markets are all seeing red.
US Futures that have been out of sync of late have linked
back up and currently indicate a lower open today. The recently
problematic Existing Home Sales out at 10 AM Eastern could belay some slow down
concerns if the number comes in showing an increase as the consensus is
expecting. Of course if it misses the exact
opposite may be true adding to the slow
down concerns this morning. All and all
it has been a fantastic week of gains and there is nothing wrong with a little
profit-taking as we head into the weekend.
The FOMC signals no rate increases for the rest of the year
but the market seems very unimpressed by the action. While the market has been trying to ignore the
clues of an economic slowdown the Fed appear to have taken a no-confidence vote in its strength. Financials quickly reacted negatively to the news and are looking slightly
lower this morning.
Asian and European
market responded mostly higher on the
news but the US Futures currently show mixed
reviews. The Dow indicates a slightly
lower open while the NASDAQ is suggesting slightly higher. Technically speaking the SPY and the QQQ are
in very good shape but the Dow and the IWM having printed lower highs at
resistance there is reason for a little caution. Also keep an eye on the VIX that once again
quietly crept up yesterday. If that
continues it could trigger a little profit-taking as we head toward the
weekend.
On the Calendar
We have nearly 100 companies reporting earnings today with
the most notable being, NKE, CSIQ, CTAS, CEO, CAG, DRI, LE, PTR & TCEHY.
Action Plan
The market seems quite
unimpressed by the FOMC decision to avoid raising interest rates for the rest
of the year. Normally low rates would
inspire the market but in this case the FOMC appears not so confident in the overall economy. During the night the Dow Futures were down
about 100 points even though Asian and European
markets responded marginally higher. As I write
this futures have rallied in the pre-market pump but it would not surprise me to the
overnight lows tested sometime today.
The QQQ remains very strong, the SPY is holding firm in consolidation but the DIA and IWM continue
to signal a little caution due to their lower high prints. All indexes continue to have resistance challenges
above making the path forward difficult to determine. The VIX edged higher again yesterday
suggesting a little fear might be creeping
in which could lead to some profit-taking if that were to continue as we head toward the weekend.
The bulls were in full force and driving upward until news
came out raising questions about the US/China trade negotiations bringing out the bears to reverse the days
progress. After the close, FDX reported disappointing earnings raising more
questions about global growth concerns.
Asian markets were tepid and cautious overnight closing mixed but mostly
lower. European
markets are currently trading lower across the board this morning as well.
US Futures are pointing to a flat open and would not be a surprise
to see light and choppy price action
until the FOMC reveals it’s a decision on interest rates and delivers their
forecast at 2:00 PM Eastern. Directly
after expecting some wild price volatility
that could extend through the chairman’s
press conference scheduled at 2:30 PM. Setting that aside, the candle patterns left
behind on yesterday index charts increases
the caution level with their placement at or near price resistance.
On the Calendar
We have 52 companies on the Earnings Calendar stepping up to report
today. Among the notable reports: GIS,
GES, MU and WSM.
Action Plan
Early bullishness yesterday faded away in the afternoon session after a news report suggesting the trade
negotiations with China had run into new
challenges. Candle patterns left behind
at or near resistance levels suggest a little caution might be in order as the market
tries to digest the full measure of the issue.
The disappointing market price action dealt
with another disappointment as FDX missed earnings and tumbling nearly 7%.
Today is all about the FOMC
and although the committee is not likely to raise rates, their forward forecast
and decisions on balance sheet unwinding will have the market’s attention. The festivities begin at 2:00 PM Eastern with
the Chairman’s press conference at 2:30.
It would not be a surprise to see light choppy price action as we wait
for the Fed announcement followed by a period of volatility and wild price swings
directly after. Currently futures are pointing
to falt open with European markets currently in red across the board and Asian
markets having closed flat to mostly lower overnight.
The feisty bulls staged
a late-day rally yesterday and according to
the futures markets want to keep their
party going this morning despite the FOMC meeting that begins today. Asian markets were tepid and cautious closing
mixed but mostly lower overnight. However
European markets as well as the US Futures
are throwing caution to the wind with the Dow pointing to a triple point gap up.
A breach of key resistance levels in the SP-500 and the NASDAQ
will occur this morning if the bullishness holds until the open. Remember not to chase the morning gap let’s
wait until we see buyer supporting the gap to avoid the dreaded pop and drop at
price resistance. Having said that if those
feisty bulls want to party ahead of the FOMC lets ride along and continue to
profit as they push our positions higher.
Gaps are gifts so consider taking some of those gits to the bank.
On the Calendar
We have 50 companies reporting earnings today. Among the most notable are MIK, CHA, DSW,
FDX, FNV and SCS.
Action Plan
Today begins the FOMC meeting where its largely expected that
the committee will make no change in the current interest rate. It’s normal for price action to become light and choppy as the market waits for the Fed decision but a late afternoon
surge of bullishness defied the norm. Though
Asian markets closed mixed but mostly lower, European markets are currently green across the board as are the US Futures.
If the bullishness in the futures holds through open the NASDAQ and the SP-500 will open above key
resistance levels. As always, don’t
chase a morning gap into price resistance because
of the of possible pop and drop it
can set up. There is no rush so let’s wait and see if buyers step
in after the open supporting the gap. Honestly,
I don’t understand where all this bullishness sentiment is coming from but that
doesn’t matter. My job, our job as
traders is the trade the chart and if the
bulls want to go up then the understanding why is not important. We of course always have to remain vigilant watching
for price action clues of profit taking or reversal prepared for that
possibility. Until then it the bulls want
to party let’s continue to profit from
the festivities.
Futures are mixed this morning as the US government launches
a probe of the FAA and their approval of the 737 Max aircraft. As a result BA shares are gaping down, giving
back Friday’s gains and setting the stage for a mixed open according to the
futures. With the FOMC this week and first-quarter earnings finally starting
to wind down don’t be surprised to light and choppy price action after the morning
rush as we wait for the announcement and forecast Wednesday afternoon.
*** The flooding in Nebraska
made last week very challenging. They
restored internet service to the area on Saturday and the flood waters have
begun to recede across Nebraska. I’ve completed
the clean up from the flooding in my house and reconstruction can now begin. My wife and I would like to thank everyone
for all the kind notes and well wishes we have received over the last
week. You are the best!
As bulls continue to test
upper resistance levels keep in mind that the bears continue to lurk about defending
their territory above. Remember to take
some profits near resistance and be careful not to over-trade or directionally overcommit
as the bulls are bears battle over this important level.
On the Calendar
We have over 140 companies fessing up to quarterly results
this morning. Notable reports include,
TLRY, TACO, LL, OSTK & STNE.
Action Plan
The bulls have been doing a great job pushing hard and
continuing to test key resistance levels in the index charts. However, the bears have stood their ground thus
far defending resistance with the exception of
the QQQ which closed just above resistance on Friday. Currently US Futures are mixed with the Dow
looking lower amidst an FAA probe and BA shares giving up Friday’s gains. Asia stocks closed higher overnight, and European
markets are mostly higher but mixed at the time of writing this blog post.
As markets continue to be
hope for a positive resolution Us Trade Negotiations the market faces another
FOMC meeting this week including the all-important forward forecasts. Don’t be surprised to light choppy price
action after the morning rush as the market waits for the Fed Announcement on
Wednesday afternoon. Although there are
still notable earnings this week today is last big day of the very strung out first-quarter
earnings season with more than 140 companies reporting. Stay long but respect overhead resistance
saying focused on price action for clues and stay disciplined to your rules.
An AAPL upgrade fired up a strong tech rally offsetting the BA decline as the orchestrated an impressive short squeeze and putting the bulls back in control at least for the short-term. The big question is can they maintain this control as we once again push upward toward the significant price resistance levels in the index charts. Only time will tell but it would be wise to respect the price resistance being careful not to over-commit staying focused on the price action for clues of a bearish line of defense.
BA is once again pushing lower this morning after yet another
country has grounded the new 737 pulling the Dow Futures down in the process. After such an impressive rally yesterday it
would not be out of the question to see a little market rest or even a bit of a
profit-taking pullback. Stay focused on the price action and remember that bears will
not likely give up without a fight.
On the Calendar
On the Earnings Calendar we have 125 companies reporting
today. Notable reports, COHU, COUP, DKS,
MOMO, SWCH & ZAGG.
Action Plan
After a fantastic rally lead
by tech stocks after an AAPL upgrade. BA’s
substantial gap down recovered sharply after the FAA announced that the aircraft
was still airworthy. However, during the
evening another country has grounded the new 737 and the stock is once again
sliding south pulling the Dow futures into the red this morning. SP-500 and NASDAQ futures are currently modestly
higher.
As indexes recover from last
weeks slide, keep an eye on overhead resistance and be careful not to overtrade
or overcommit long near such significant price levels. At 8:30 AM Eastern we get the latest reading
on CPI where consensus is expecting to see an increase. Obviously, that could have greatly effect the
market open depending on the actual number so keep an eye on the futures as we approach
the open. Remember to trade the chart
for what it is not for what you want it to be.
Futures are wildly mixed this morning the Dow Futures
pointing to a gap down of more than 150 points while the SP-500 and NASDAQ Futures
point to modest gains. The huge decline
in the Dow is due to the sharp decline in BA shares after a second 737 Max 8 plane crash. It is also important to note that we have a
potential market-moving Retail Sales number
at 8:30 AM Eastern after the very disappointing
results in the last reading.
As the SPY and QQQ move higher this morning remember to
respect the possible overhead price resistance above. If a lower high failure would to occur that
would be technically very damaging so stay focused on price action and avoid
chasing the morning gap. Let’s wait and
see if buyers step up after the open in support of the gap. The Whitehouse
has forwarded the new budget that includes a border wall funding and threats of
yet another government shutdown are already spinning the political rhetoric. Also keep in mind the US/China negotiations
could still be a huge market-moving event if or when we finally get news on the
subject.
On the Calendar
On the Earnings Calendar we have 100 companies reporting today.
Action Plan
We have a very interesting market
setup this morning that could make for a challenging day. Asian markets that began three trading day lower
managed to close modestly positive despite
global growth concerns. European are currently
slightly higher across the board ahead of a crucial Brexit vote while US Futures
are widely mixed. Currently the Dow Futures
point to a gap down of more than 150 mostly due BA shares falling sharply as
the result of another plane crash.
However, the SP-500 and the NASDAQ futures are pointing to gap up opens
that may retest resistance levels.
It will be interesting to see
how this plays out with such mixed results at the open. Keep an eye on overhead resistance levels in
both the SPY and QQQ and be very careful about chasing the open. The Retail Sales number at 8:30 AM Eastern
could be critical for the day. The last
reading on retail sales saw a decline -1.2% and consensus for today is for a
reading 0.0% which means the futures could quickly change before the open
depending upon actual number.
With an ugly decline
yesterday I think most traders went into the close hoping the Friday Employment Situation number would get the bulls
back on the job. Unfortunately China’s very disappointing trade numbers last night
has the markets around the world reacting significantly
lower as the global slowdown theme continues to spread.
Futures are pointing to
a gap down of more than 100 points but that could greatly improve or get worse depending on the economic reports at
8:30 AM Eastern. This has obviously been a
rough week for the market and the failure
has key resistance levels does not help the technical
picture of the market. Consider carefully
the risk you carry into the weekend keeping in mind that we’ve still could
hear about a US/China trade deal.
On the Calendar
A little slower day on the Friday earnings calendar with just under 60 reports today. No particularly notable except maybe MTM
today.
Action Plan
Looking at the futures
this morning I wish I had held more of
the hedge positions through today. Futures were lower but pretty benign until China released trade numbers that were
sharply lower than expected. Asian
markets closed sharply lower and currently European are also declining across
the board.
Today is the big Employment situation
number. Estimates expect 180k jobs created
and that the unemployment rate will tick down to 3.9 %. That would be a very good number but sharply
lower than 304K reading last month. We
also have the Housing Starts number that disappointed on the last reading so keep
a close eye on the futures at 8:30 AM eastern as the open could improve or get
worse very quickly, Consider the risk
you hold into the weekend and remember we’ve yet to hear news on the US/China
trade deal. Have a great weekend everyone.
As always with a gap open we want
to avoid the urge to chase. Wait and watch
the price action after Clues of a slowing economy that continue to pop
up in the economic data have slowly begun a toll on this tremendous bull run. Slowing retail and housing were swept aside due to hopes of a forthcoming US/China
trade deal. The appears to be growing weary of the wait and yesterdays disappointing
trade numbers added additional pressure.
Thus far the selling has been very controlled and after such
a steep rally should not have been a surprise.
Futures this morning are currently trying to rally off the overnight low
but are suggesting a modest gap down at the open. Although we may see in increase in price volatility as fear grows I would be careful not
to chase the gap waiting to see if sellers
support the move.
On the Calendar
We have 185 companies fessing up to quarterly results
today. Among the notable earnings are:
COST, BKS, AOBC, BURL, CRCM, CHUY, LOCO,
GNC, HRB, HOV, KR, PLUG & UMH.
Action Plan
Disappointing economic
growth numbers in Europe, US trade deficits, North Korea appearing to restart
their nuclear program while the world
continues to wait for a US/China trade
deal have the futures looking gloomy this morning. The bulls have worked pretty hard to hold
price action supports are beginning to falter as hungry bears continue the gap to see
if sellers support the move lower with additional selling.
T2122 this morning is likely
to reach the bullish reversal zone at the open.
That doesn’t mean we should get an immediate bounce it only suggests the
odds of a relief rally are growing as long as there is not a piling on of more
bad news. So far this has been a very controlled
pullback but this mornings gap down has the potential to increase price volatility.
While the market waits
for details of the US/China negotiations the
price action has become very light and choppy and there is a danger of
over-trading a dull market. Traders can
easily become bored during choppy markets talking themselves into trader they
would normally avoid just to have something
to do and break the boredom.
If the overall market is patiently
waiting perhaps we should do the same.
Eventually the stalemate will be
broken and the market could suddenly move either up or down. Unfortunately,
that big move often happens overnight and the result can be very costly if you
find that you’re on the wrong side of the
move. Exercise your discipline, stay focused
on price action and carefully weigh the risks of
over-trading a dull market.
On the Calendar
On the Earnings Calendar we have more than 120 companies reporting.
Notable reports are, ANF, AEO, BJ. BKCC, BREW, DLTR, SWRE & RST.
Action Plan
Yesterday was a mind-numbingly boring day with light volume
chop as the market waits for news on the trade
deal. The entire range of the DIA
yesterday was less than $1.50 closing
just 0.09 cents below the open of the day.
There are certainly very good looking
stocks but keep in mind a single new report could move the market substantially
so be careful not to over-trade out of sheer boredom.
Asian markets closed mixed over-night and currently European markets are mixed and mostly flat as
it seems the entire world is watching and waiting. Currently the futures are pointing to a modestly lower open having recovered about 50% from
their overnight lows. Perhaps earnings
and economic reports can break the logjam this morning and we can pick a
direction. If not it would be wise to
remember that really big moves often happen overnight on news events. Over-trade a dull market and you can easily
find yourself on the wrong side of the move.
Plan your risk accordingly.
