After more than a month and a half bull run the bulls
continue to show resiliency fighting hard yesterday after a very disappointing retail sales report. Overnight future traded into the red as the Asian markets reacted to the possibility of a
slowing US Economy but this morning the futures have recovered pointing to
modest bullish open.
Take a look at the weekly index charts with our a single down candle since 12/28/18 with the Dow nearly 3700 points off the low and the SP-500 nearly 400 points higher. Truly an amazing rally that has provided traders with fantastic gains. Considering that as we head into the weekend be careful not chase entries this late into the rally and remember to take some profits.
On the Calendar
On the Earnings Calendar we get a little break today with
only about 50 companies fessing up to earnings results. Notable reports DE, MCD, NWL, PEP, RBS, YNDX.
Action Plan
After a disappointing Retail
Sales report and discovering that the
President is planning to declare a national emergency the market dipped
slightly to end the day. However, the
bulls fought back hard all day long choosing to ignore the data with amazing resiliency. Ironically
Asian markets traded lower across the board in response to a slowing US Economy
and overnight US Futures traded into the red.
Once again the bulls refuse to lose and this morning the as I write the morning note, futures markets are pointing to modest
gains at the open.
There is no doubt that the index trends are still up and although
they appear stretched and losing price momentum more upside is certainly possible driven by earnings results. As we head toward the weekend remember to take
some profits and evaluate the level of risk you will hold through the weekend. We have had an
incredible month and a half bull run providing great profits, don’t give it back
by chasing entries so late in the rally.
Have a great weekend everyone!
I find the hyper-confidence currently displayed by the US markets a bit puzzling this morning especially with president reportedly considering a 60-day extension of the tariff deadline. Nonetheless the bulls are in full on beast mode this morning ahead a huge day of earnings reports and government shutdown delayed retail sales numbers.
Asian markets were subdued overnight as trade negations are
scheduled to continue into Friday. However, European markets are higher amid earnings
result and the US Futures currently indicate another gap up open. There is not a clue in the price action suggest
bearishness but this late in the rally I must admit concern about adding new long
risk with the indexes so extended. Enjoy
the ride and hold on tight and let’s hope the negotiations progress as positively
as the market is pricing everything.
On the Calendar
On the Earnings Calendar we have more than 220 companies
reporting earnings today. Watch for
notable reports from NVDA, CM, CGC, AMAT, ARCH, ANET, AZN, AVP, BLMN, CBS, CC,
CME, KO, CS, DUK, GEO, IRM, SIX, WM &
ZTS.
Action Plan
We have another interesting day ahead of us and I have to be
honest the hyper-confidence of the US
Market has me nervous and a bit
puzzled. First, reports are now questioning
whether or not the President will sign
the compromise bill which would avoid the Friday night government shutdown. I find that difficult to believe but if true I’m
confident the market will react negatively if that were to occur. Secondly, the market seems to believe a Chain
trade deal is imminent but the president reportedly is considering a 60 extension of the
deadline.
Would that not suggest negotiations
are not going that well and how is dragging this threat out another 60 days reason
to gap the market higher this morning? Things that make me say Hmmm? Asian markets were very subdued overnight but
European markets and US Future are still
determined to run higher. Remember we
have a big day of earnings and Retail Sales numbers that may move the market
around before the open.
Yesterday the market celebrated Congress passing a deal to
avoid another government shutdown but we sill have another hurdle to clear, the presidents signature. He has remarked that he doesn’t like the deal
but has also said he doesn’t think there will be another shutdown. Markets
are higher around the world on hopes that US/China trade talks are progressing positively. Although there has been no news of progress the president seems to have softened his tariff deadline. Talk about keeping the market on the edge of its
seat!
Futures are bullish this
morning ahead of a big day of earnings and a potential market-moving CPI report
out before the open. The bulls are large
and in charge and trend continues to rise but I continue to see signs of diminishing
momentum and some overbought conditions.
Stay bullish but stay focused on price action clues of weary bulls and
profit-taking. This late in the rally be
careful not to overextend and remember to take some profits along the way!
On the Calendar
On the Earnings Calendar we have a very big day with 170
companies reporting. Among the notable
reports keep your eyes on, AIG, FUN, CTL, DBA, EQIX, FOSL, DLPI, HCP, HLT, H,
KGC, LPX, MRO, NTAP, STAG, SPWR, WCN, WMB, WH & YELP.
Action Plan
After a big day up as the market responded to Congressional
deal to avoid a shutdown. Now it’s up to the President to sign it and
although he says he doesn’t like it he also said he doesn’t think there will be another shutdown. Let’s hope he does sign it because if not the
market will be very disappointed and
react negatively very quickly.
Today we have a big day of earnings and a CPI report for the
market to chew on before the open. The Asian market
and European markets are bullish on hopefulness of US/China trade negotiation progress. To my knowledge there has not been any news
on the subject other than President has mentioned he may soften his tariff
deadline position. As a result, Us Futures
currently point to a bullish gap up open.
I plan to remain bullish on the market as long as the trend holds but with
T2122 pegged near 100 I also want to careful
not to overextend with long positions.
Yesterday’s indecisive
price action yesterday gave way to bullish excitement
during the evening after hearing the Congress has a deal to avoid another government
shutdown. The good news spread around
the world with Asian markets closing with
substantial gains across the board. European
markets are also currently bullish across the board
with US Futures pointing to a Dow gap up around 200 points.
As exciting as this is please remember we still have the US/China
trade negotiations to deal with and the possible
tariff increase at the end of the month.
Let’s hope the negotiations
progress quickly and positively to clear this major stumbling block from the bullish
path of the market. Yesterday we
experienced a pop and drop because buyers failed to support the morning gap.
With the much bigger gap this morning we must also be careful not to chase and make sure buyers step supporting such a
big pop. News on then trade negotiations front could still create significant
price volatility so stay on toes and focused on price action.
On the Calendar
On the Earnings Calendar 113 companies
stepping up to report today. Among the
notable today are: ATVI, AYR, AKAM, ARCC, BXMT, DENN, GRPN, HUBS, TAP, OXY,
SHOP, STE, TRIP, TWLO, UAA, WELL.
Action Plan
After a day of market indecision one of the stumbling blocks
appears to have been cleared last night as the Congress looks to have finally agreed on the budget avoiding another government
shutdown. US Futures almost immediately started to rally on that news and good
news has at this moment is suggesting a substantial gap up of more than 200 Dow
points.
Can we now sound the all clear? Not yet, remember we still have the bigger of
the stumbling blocks, US/China trade.
News on the current negotiations
could easily move the market dramatically so stay on your toes and don’t blindly chase this morning excitement at the
open. The trend is bullish and the bulls
are clearly in control but let’s make
sure we have buyers supporting this gap and not have the pop and drop we
experienced yesterday if you’re holding
long positions that gap into profit this morning remember that gaps are
gifts and consider taking some of those gains the bank.
Bullish trends coupled with a solid defense of key support last Friday
are providing a warm a fuzzy feeling this morning as the futures suggest a gap
up open. Positive earnings results have
played a key role in providing the
bullish energy and with another big week of earnings ahead lets hope that
continues. However, there are some very
big stumbling blocks traders will have to keep an eye on this week that could
easily derail current sentiment.
At the top of the list is the resumption of the US/China trade negotiations which of course the market is very sensitive too and
could quickly reverse the market on any negative new report. Secondly the Congress must work through their budget impasse or we face another
government shutdown Friday night. We should
expect the political spin to be disruptive. Last
but not least is the lingering threat of a global slowdown and possible recession
that keeps popping up in the news and weigh on the collective conscience of the
market. Let’s ride the bullishness as
long as it lasts but make sure you have a prepared plan if the bulls lose
footing due to political uncertainty.
On the Calendar
On the Earnings Calendar we have 110 companies stepping up to report results. Among the notable reports today are, BHF, RE,
L, OHI, RICK, QSR & VNR.
Action Plan
The market faces a
very interesting week as the US/ China
trade negotiations resume and Congress
wrangles to break the impasse that could lead
us into another government shutdown on Friday.
There is also more rumbling in the news of
a possible global recession for the market to chew as well as a big week of earnings
reports. Despite the political uncertainty
the futures are pointing to a positive open this morning with European markets bullish and Asian markets have closed mixed on the day.
On Friday the Bulls did a very good job of defending key
price support levels. DIA 250, SPY 267, QQQ
166 & IWM 145. With the overall market
trend still bullish and Friday’s bullish defense the expected morning open paints
a positive chart pattern assuming the bulls can follow through. T2122 has relaxed enough
to give us room to the upside and the bulls have an obvious momentum
advantage. As good as all that sounds
remember the rules about chasing a morning gap.
Remember no matter the warm of the fuzzy
feeling of bullishness, political news certainly has the power to quickly shift sentiment so stay focused on
price an plan your risk carefully.
Once again US/China trade uncertainty raises its ugly head providing the Bears the energy to
drive back the Bulls and test key support levels. As uncomfortable as it might have been the tenacious Bulls stepped up and effectively defended
price supports and the overall bullish market
trend. Currently the futures are
suggesting that Bulls will once need a strong defense
with an opening gap down of more than 100 points.
Overall this pullback was expected and normal healthy price action but the political uncertainty raises an additional challenge as traders face the weekend risk. Remember you don’t have to trade every day and the view from this sideline can be very comforting as we head into the weekend. After a great month of profits the last thing I want to do is try and predict the outcome of political uncertainty and give back hard-earned gains. As a result my plan for the day is to protect my capital and quietly slide into a restful weekend.
On the Calendar
On the Earnings Calendar we get a little break with only 52
companies reporting. Among the notable reports, ARNC, EXC, HAS, PSX & VTR.
Action Plan
Yesterday’s selloff became a bit
rough when the head of the US Economic Council reported that the US / China negotiations are still a long way from a
deal. The market then received a second blow when the Whitehouse moved the North
Korean meeting to March. Asian markets were lower across the board last night
while European markets mostly chop sideways nearly flat on the day. As I write this US Futures suggest a gap down
open testing yesterdays lows and key support levels.
On the bright side the key levels I mentioned in yesterdays
note held as support as the bulls effectively defended them with a nice late
day rally. With the looming political uncertainty
of US/China trade what will traders do as we head into the weekend? Without
question the bullish trend is currently still intact and this pullback is
nothing more than healthy price
action. However, it could easily become
serious if the bulls retreat ahead of the weekend. Let’s
hope the new cycle is quiet today, cooler heads prevail and bulls continue to
defend price support. Have a great
weekend everyone!
Futures this morning are
suggesting a lower open this morning, and although it’s down, it’s not bearish. In fact, I would say a market pullback or
consolidation is a sign of a healthy trend as long as the bulls defend support
levels. The Dow has rallied nearly 17% from
the market lows and a full month of bullish trading without a pullback. As resilient as the bulls have been, I doubt
they will give up easily and will likely fight to hold key price supports. In fact, this pullback could be very short
lived as long as earnings continue to roll out positively.
If the market simply consolidates
this can be a profitable time for stock pickers. If supports are defended a pullback can setup
new low-risk entries into existing trends?
So don’t fear a pullback embrace it because it’s the natural price
action of the market. It only becomes a
problem is support levels fail because that usually means significantly higher price
volatility. Keep an eye on support and
trend and remember Price is King.
On the Calendar
On the Earnings Calendar,
we have a big dig day with 230 companies fessing up to earnings results. Some of the notable today are ANGI, MT, CAH, COLM, DNKN, EXPE, GRUB, K,
MAT, PENN, TWTR, TSN, WU, WWE & YUM.
Action Plan
Yesterday we saw a notable decline in bullish energy as the
market slid sideways in a very choppy price action day. This morning Futures are suggesting a
pullback with the Dow expected to gap
down more than 100 points. Although a
down day a pullback or merely a consolidation would be healthy for the overall market and does not at this time suggest bearishness. With more than 200 companies reporting today anything
is possible and futures could easily change their tune by the open.
Important support levels to watch
DIA 250, SPY 267, QQQ 166 & IWM 145.
If bulls can defend those supports levels or above the odds of the
bullish trend staying intact is very high. Breaking
those levels would add a bit of complication and likely see some fear and price
volatility return to the market. If the
market consolidates it can be a profitable
time for adept stock pickers as good patterns and trade setups will likely continue
to develop. As always stay focused on
price action trading the chart not your bias.
In an amazing show strength,
the Bulls refused to give an inch and ultimately defied gravity pushing upward
right into the close. In the shadow of
GOOG earnings that seemed to disappoint investors and ahead of State of the Union Address that may prove to be controversial
the futures market currently points to yet
another gap up open. Go Bulls!
As much as my current long positions are benefiting from the bullish activity adding new
risk so late in the rally should be carefully
considered. The fear of missing out is a
strong emotion that often causes traders to abandon their discipline and
blindly chase into positions without consideration to risk or price resistance. The market can certainly continue to rally from
here, but it’s very important to plan acceptable risk trades and avoid chasing.
On the Calendar
On the Earnings Calendar,
earnings reports ramp up today with 150 companies reporting. Among the notable reports: ALL, APC, ADM,
BDX, BP, CNC, DLR, EA, EL, LAZ, PBI, RL, SNAP, VIAB & DIS.
Action Plan
The Bulls refused to
lose continuing to defy gravity with Dow
closing up 175 points. During the
evening Futures were lower as earnings from GOOG, GLUU, GILD and STX disappointed
investors. Surprisingly futures shook off the disappointment around 2:00 AM and began
to rally strongly and have not looked back since. As I write this, ahead of many of the morning
earnings reports, futures are suggesting a gap up open of more than 75 points.
Tonight is the delayed State of the Union address in which
there is speculation that the President will declare a National Emergency to fund the border wall without
Congressional approval. Should that occur, it will most certainly set
off a firestorm of controversy that could affect the overall market. Pop some corn, put your feet and watch the
show! Though my long positions are likely
to benefit from this morning bullishness, I will not chase entries so late in
this rally. If you do decide to enter new
risk today make sure you wait for proof that buyers are in support of the
morning gap.
Most of the time I approach the market with a directional assumption, but right now I feel much more comfortable sitting on the fence. After a run that produced the best January market
performance n 32 years, I simply feels right to be a little cautious. Having produced substantial profits in the
bull run, I went into the weekend holding only a few long positions and a
couple of conservative hedge trades to
reduce my long risk.
Let me be very clear that I am not at all bearish. There is nothing in the price action that
suggests bearishness, and as a matter of fact, earnings could easily
continue to inspire the bulls higher. I
do believe the bull run is a little stretched however
so it would be wise to be on the lookout for clues of a pullback or at a minimum
a consolidation. My current watchlist chalked
full of very good looking charts, but as of this morning I plan to take slow with
more of a wait and see approach before adding new risk.
On the Calendar
On the Earnings Calendar,
we have 80 companies reporting results today.
Notable earnings today: AVB, CLX, GILD, GOOGL, LM, LEG, ON, STX &
SYY.
Action Plan
A rather quiet market news weekend as the nation focused mostly on the Super Bowl and the resulting parties. Although we are about at the mid-point of earnings season, we have a very big week ahead of us with GOOGL reporting after the bell today. As I write this Futures are currently flat but keep in mind that CLX reports before the open among other potential market move reports, so anything is possible.
I went into the weekend light in my account wanting to
protect capital and thinking a rest or even a market
pullback could begin at any time. As of this morning,
I’m still comfortable with that decision. However,
I want to be clear that I’m not at all bearish just cautious after the best January
market performance in 32 years. Earnings could easily continue to inspire the bulls propelling price even higher, but I think just a single stumble could also trigger
some profit-taking. While I still have
several long positions, I also have also
added some positions to hedge to reduce my long risk. Although I’m choosing caution, there are a lot of very good looking charts on my watchlist
ready to become active trades depending upon overall price action.
There can be no doubt that the bulls did an extraordinary job in January. As a matter of
fact, the news sited it’s the best
January since 1987. And the bull
continue this amazing effort pushing us even
higher? Yes, however, the odds of pullback
beginning soon continue to mount even though there is no evidence of such in the price action.
Continued good earnings and a trade deal between the US and China would most certainly continue to provide energy for the bulls to continue running. However, I prefer to be more of a profit taker today than a buyer of new risk as we head into the weekend. Outstanding profits have been made over the last three weeks an I prefer to tuck them safely away in my account before the weekend rather than risk them to the unknown. What will you do?
On the Calendar
On the Earnings Calendar,
we get a little break today with only 66 companies reporting earnings. Notable earnings include CVX, CI, DB, D, XOM, MRK & WY.
Action Plan
Yesterday we had a bit of split decision with the Dow finishing down 15 points and the SP-500 closing
up 23 points. The NASDAQ had the best
results reacting to earnings results pushing 98 points higher. As I write this,
the Futures currently point to a mixed open, but
a lot could change as earnings roll out and the big Unemployment Situation number reveal at 8:30 AM Eastern.
According to the news,
this has been the strongest January rally
since 1987. The bulls continue to climb the wall of worry charging forward with seemingly
boundless energy. No, complaints here because
the profits have been great! However, what goes up must certainly come down eventually so stay focused
on the price action clues. As we roll
into the weekend, I plan to be more of a profit-taker rather than a buyer. Could the market go higher? The answer is a definite, YES, but it’s my opinion that the odds are growing for a pullback. Thus I prefer to have the majority
of my capital tucked safely in my account before the weekend.
