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.
On Sunday the Wall Street Journal triggered a buy the rumor rally
when they reported that the US and China are “in the final stage of completing a
trade deal.” The story offered nothing
as to an actual completion date of the agreement and had little to no details
about what’s included. Nonetheless, markets
around the world have reacted bullishly to the hope that some kind of agreement is forthcoming hopefully
sooner than later.
We have more than 500 companies reporting earnings this week
and busy economic calendar as we move toward the Friday Employment Situation report. The index trends are still up but we still have those pesky price resistance levels above
that continue to demand respect. As we
saw on Friday a gap into price resistance can prove dangerous and costly if you
chase into it with a fear of missing out.
Wait for proof in the price action after the gap that buyers are
stepping in supporting the gap to avoid those nasty pop and drop patterns.
On the Calendar
On the Earnings Calendar we have 64 companies stepping up to report earnings results today.
Action Plan
Friday’s gap up open into resistance found sellers and through
our the morning gave back the entire gain
and at one point was looking pretty grim.
Fortunately the bulls went back to
work in the afternoon recovering about half of the initial morning gap. This morning futures are once again signaling
a gap up open with Asian and European markets
also bullish overnight. On Sunday the
Wall Street Journal reported that the US
and China are “in the final stage of completing a
trade deal.” It cited that Beijing was offering some lower tariffs on U.S. Products and markets responded bullishly
around the world.
Unfortunately the story said nothing about the timeline to completion and little to no detail
as to the contents in the agreement. A true to form buy the rumor market pop! Nonetheless, the trend is still up and thus
far key resistance levels are still holding and must be respected. We have another big week of earnings reports
and several significant economic reports culminating on Friday with the big
Employment Situation number on Friday morning.
As always, avoid chasing the morning
gap waiting instead for proof in the price action that buyers are going to set
in supporting the gap.
Asian markets closed
higher overnight even after China manufacturing
numbers declined for the 3rd straight month. European markets are also higher across the board
this morning due to fresh US-China trade comments according to CNBC. Consequently,
US Futures are pointing to a substantial gap up this morning supposedly in reaction to yesterday’s GDP number
if you believe the news.
Currently the futures suggest a gap of more than 175 Dow points
this morning to test key resistance index levels. Those caught short could enhance the bullish move,
buying to cover in a so-called
short squeeze. We should also be on
guard for the possibility of a pop and
drop pattern at or near price resistance. Don’t chase with the fear of missing out,
take a breath and wait to see if buyers step in supporting the gap before
adding risk ahead of the weekend.
On the Calendar
We get a little break on the Earnings Calendar with just 50
companies reporting earnings today. Notable
reports today are XRAY, FL and SNH.
Action Plan
Futures are sharply higher this morning though I’m not sure
why other than the bulls just want to go
up. CNBC is suggesting it due to US/China
trade comments but the only story I can find on the subject suggests that Intellectual Property Theft remains a major sticking point. There is also a suggestion that the market is
responding to yesterday’s strong GDP news.
Odd, but okay. Nonetheless we are looking at a substantial gap up this morning
and those caught short may trigger a short squeeze this morning.
Although we have a lighter day on the earnings calendar we
have several potential market-moving
economic reports this reports morning. Remember
to not chase a morning gap especially right
into price resistance. Wait to see if
buyers step in supporting the gap because we don’t want to get caught in a classic pop and drop at price resistance. If
resistance does break an attack of record market
highs may be in the cards. Have a fantastic weekend everyone!
