Domestic and international political uncertainty appears to have no effect on the tenacious bulls with a refuse to lose attitude. Today is a big day of earnings and economic
reports that could bring out some volatility depending on the results. Inspired by a price increase from NFLX the QQQ
reached out to test its 50-day average as resistance yesterday. The Dow will need more than a 300 point rally,
and the SP-500 will require another 20
point gain to match that feat.
A tall order perhaps considering how stretched this rally has become, but you never say never. The
British Parliament will once again attempt
a no-confidence vote of the Prime Minister today which could create some market
turmoil as they continue to wrestle over leaving
the Euro. Remember that Price is King
and our job as traders is to stay focused
on how the market reacts to the news, not
the news itself!
On the Calendar
We have 24 companies stepping up to report results on the
Earnings Calendar today. Notable
earnings, GS, AA, BAC, BK, BLK, SCHW, CMA, CSX, FUL, PNC, and USB.
Action Plan
The Brexit vote suffers an epic
failure, and Parliament the Prime minister will once again face a no-confidence
vote later today. The market goes
up. The 26th day of the government
shutdown and the market goes up. Several
notable earnings miss with the latest miss from BLK this morning, and the
futures currently point to gains. In the
last several days any hint of profit taking is met by a wave of program buying
as the tenacious bulls push upward toward the 50-day moving averages. The bulls are in control, and they are not
taking no for an answer!
T2122 continues to signal
that the rally is overbought and suggesting
a pullback could occur at any time. Traders need to stay on their toes watching price
action and remember that the bears could reemerge
at any time. We have a big day on the Economic Calendar
today with Retail Sales numbers out before the open that could easily inspire
the bull or bears depending on the results.
Stay focused and flexible because
anything is possible.
Earnings reports, the government
shutdown in its 25th day and a Brexit vote could make for a
challenging day. So far the bulls have done a very good job of
defending price supports, but the bears
have also been working hard keeping the index
range bound in a rather tight consolidation. That consolidation could easily become the
launching platform to attack the 50-averages, which
for Dow is nearly 400 points higher. Or,
it could also become the “border wall” that
the bears defend.
Today we could see a rise in
volatility this afternoon depending on the result of the Brexit vote because of
the currency ramifications. We will have
to remain flexible, stay focused on price action and avoid over-committing to a
directional bias as the events of the day roll out. Fast price action and whipsaws are possible
after the Brexit vote so stay on your toes, as it may prove to be a challenging
day.
On the Calendar
On the Earnings Calendar,
we have 18 companies reporting. Notable
reports JPM, UNH, WFC, INFO & DAL before the market open. After the bell UAL reports.
Action Plan
Earnings results and political uncertainty will keep traders on their toes today. First,
we have several notable earnings before the bell that could provide a little volatility
before the open. Then this afternoon we
could see some substantial volatility as a result of the Brexit vote this afternoon. At this time the vote is expected to fail, and some say it could be an epic failure that
could wildly move currency markets. As
we begin the 25th day of the shutdown
TSA workers all across the country are calling in sick in protest. Air travel could become very difficult and create
unintended economic impacts as the shutdown drags on.
The good news is that the bulls thus far seem largely
unaffected by the turmoil rejecting yesterday’s gap
down and defending price supports. Currently,
the futures are suggesting a gap up to an upper range of the current
consolidation, but that could easily improve or worsen as earnings results roll
out. T2122 pulled back yesterday but remains
stretched suggesting more pullback or consolidation is possible. I would not rule out a bullish push to test
the daily 50 averages nor can we rule out the possible pullback so stay flexible
and focused on price action for clues. With
the Brexit vote possibly kicking in an extra dose of volatility it could be
challenging day to navigate.
Yesterday I mentioned that the market needs a rest, but he tenacious
bulls had other plans yesterday printing the 5th straight day up since
September. The Dow has now recovered 2254 points in 11
days, and yet nothing has changed with the
political uncertainty. There has been progress in the trade negotiations but still, no agreement and the government shut down at 21
days is now tied for the longest in history with no apparent resolution in
sight.
Please understand I’m not suggesting bearishness I’m only
pointing out the curious nature of the market and how important it is to follow the price action and trade the chart without trying to predict. I still believe the market needs a little
rest or pullback, but big opportunity
may be just around the corner. As we
head into an uncertain weekend, I suggest
being careful chasing this rally which appears
stretched in the short-term. However, I
would be preparing a watchlist of candidates
that could soon setup great swing and positon trades.
On the Calendar
On the Earnings Calendar,
we have a light day with only eight companies reporting with INFY the most
notable reporting before the bell.
Action Plan
The Bulls proved to very tenacious
yesterday defending price levels every time
there was even a hint of profit-taking. One would think that kind of pressure would continue
through the end of the week, but
interestingly enough the futures appear to be lackluster
this morning. As I write this, the US Futures are suggesting a flat open
as we enter the 21st day of the government shutdown. That ties for
the longest shutdown in history, but as
we head into the weekend, there seems to
be no resolution
in sight.
Trade negotiations this week proved to be productive, but there are not stories coming out that there is a lot of work to be done before finalizing an agreement. Now the question is will bulls remain strong as we head into the weekend amid all the uncertainty? T2122 continues to signal caution and suggesting a short-term overbought condition but as you know price action is currently not confirming that conclusion. We will have to tread carefully this morning to see if the bulls have the energy to push higher or if the profit-takers take control ahead of the weekend. I would suggest being very careful about over-committing to long positions this late in the rally.
Climbing more than 2200
points in just 10-days, the US futures this morning are suggesting a
little rest might be in order. As we
enter the 20th day of the government shutdown and as of now no
indication of when an agreement with China might occur there is still significant
uncertainty for the market to ponder.
With the VIX closing below a 20 handle perhaps we could see a simple consolidation rather than
the punishing selloff we have experienced lately. With hundreds of charts indicating possible
bottoming patterns, a little rest or pullback could set up some great entries
for swing and position traders. Remember
that the market is likely to remain very sensitive to political news and still subject
to quick price action and reversals so remain flexible and focused on price
action. Great opportunity for swing
traders and good stock pickers may be just around the corner so dust off that
wishlist and be prepared.
On the Calendar
On the Earnings Calendar,
we have 17 companies reporting earnings
today with none that are notable unless you happen
to own one of them. Remember earnings
season is coming,
it would be a good time to get into the habit of checking reporting dates.
Action Plan
With a failed meeting between the President and Democratic congressional leaders our government shut down now enters day
20. The news on US / China trade remains
positive, but there has been no
indication as to when a decision might be forthcoming. After notching a 4th bullish day,
the futures are suggesting the market needs a little rest this morning. As I write this the Dow indicating a gap down
just short of 100 points but I do expect that improve during the pre-market
pump.
Climbing more than 2200 Dow points in just ten days a little rest is definitely warranted, but that does not necessarily mean we are due a significant selloff. The best scenario would be a consolidation as we wait for some resolution of all this government uncertainty. Let’s keep a close eye on price support levels in the indexes. The good news is with so many charts showing signs of bottoming a pullback, or some consolidation could be just what the doctor ordered to set up trade entries. Polish up your watchlist because major opportunity may be just around the corner.
The US Futures are suggesting the 3rd straight day
of bullishness this morning wish is something the Dow has not seen since the 30th
of November. Trade negotiations with China continue today, and according to reports progress is being made,
and hopes for an agreement are
rising. As we enter day 18 of the government
shut down the President will bring his case the people this evening from the
oval office. A move, that is sure to create a firestorm of Washington spin and could affect
market volatility throughout the day and overnight.
The morning gap raises the possibility of a pop and drop pattern so traders should be careful not
to chase into the open until we see if there is follow-through
buying that supports the gap. With all
the political news swirling traders should stay focused
on price action and prepared for whipsaw and quick price action.
On the Calendar
On the Earnings Calendar,
we have 15 companies reporting with HELE and LNN as the most notable both of
which report before the open today.
Action Plan
With two days of
bullish price action behind us, the 3rd day in a row with a bullish
close a condition not seen since November
30th. Although we are in the 18th
day of the Federal Government shutdown, the
US Futures are pointing to bullish open this morning with a gap up of more than
150 points. The bullish sentiment appears based upon the positive reports that
the US and China trade negations are making progress that may soon result in a
deal.
The President will be speaking from the Oval Office this
evening taking the border wall debate directly to the people. Expect the political spin to reach new heights
and keep in mind the market could be very sensitive to the reports. With a large gap up this morning, we will need to be on the lookout for a
possible pop and drop unless buyers prove the ability to support the gap. Please keep in mind that that T2122 is in the
bullish reversal zone. That does not
mean a selling is imminent, but it does
suggest a short-term overbought condition that we must respect when considering
new long positions. Today could prove to
be a bumpy ride so stay flexible and focused on price action.
Uncertainty continues as the
government shutdown begins a new week with little to no progress. As a matter of fact, the President seemed
only to reinforce his position with a flurry of border security tweets this
weekend. On the positive side, there
seems to be a renewed energy between the US and China to resolve the trade
war. Let’s hope for a positive outcome
soon!
Futures are currently pointing to a flat open which is something
we’ve not seen for a long time. A nice change in my humble opinion. A quiet consolidation would be nice, but I
suspect the market will remain very sensitive to political news and volatility remains
high. After a 750 point rally on Friday,
don’t rule out the possibility of some profit-taking. I would also not be that surprised to see a
test of the overnight high in the futures.
Stay flexible and prepared for quick reversals on political news and as always
stay focused on price.
On the Calendar
On the Earnings Calendar,
there are 12 companies reporting earnings today, but there are none particularly
notable.
Action Plan
US futures opened trading
very positive and at one point suggested a bullish move of more than 150
points. However, having sold off during
the evening, we could experience some we’ve not seen for a long time, a flat
open to the market. I must say a nice change
if that does occur! US / China trade negotiations
seem on track this morning, and both sides appear to more inclined to complete
the process. Unfortunately, there is still on progress on
the government shutdown and the President seemed to dig in his heels with a flurry
of tweets on border security this weekend.
Although there is still significant
political uncertainty, the market on Friday seemed to issue a vote of
confidence rallying more than 750 points.
I would expect the market to stay very sensitive to political news with
fast moves that could easily reverse direction intraday. Don’t rule out the possibility of some profit
taking today nor the possibility of testing the overnight futures highs. The current
market condition continues to favor day trading but a flat open today could
finally signal that the market is trying to settle its nerves. As always stay focused on price action and
remain flexible.
Another day and another 300-point
reversal gap overnight, challenging even the most experienced traders. I wish I could say the turmoil will be over soon, but there is no way
to know how long it will take for the political drama to subside. With the Employment Situation report and the
Jerome Powell comments later this morning
I would not rule out the possibility of more
intraday whipsaws.
With such extreme intraday moves quick day traders continue
to have the upper hand with swing and position
traders have little to no edge. Holding positions overnight is risky business let alone
holding over a weekend. Consider that risk
as you plan how to handle the weekend ahead.
On the Calendar
We have just nine companies reporting earnings today.
Action Plan
The market currently seems to love 300 point gaps this
week. Wednesday more than a 300 point
gap down a whipsaw back up. Yesterday day more than a 300 point gap done
and three whipsaws during the day
covering more than 300 points. Now, this
morning US Futures are pointing to a 300 point gap up though we are still
waiting for the government funding to reopen.
The rebound this morning is focused on US-China trade talks improving. With the big Employment
Situation report coming out an hour before the market open and the Jerome
Powell speaking at 10:15 we could certainly see more whipsaws today.
As always after the morning gap wait to see if buyer’s support the gap and plan for fast price action
as extreme price volatility to continue.
Once again the current market condition favors quick day trading due to
the big intraday swings. The market
remains very sensitive to political news as well so plan your risk going into
the weekend very carefully.
Mostly blaming the trade war and slowing sales in China, Tim
Cook lowers the revenue projections for
AAPL for the first time since the introduction of the iPhone in 2007. Because of the companies heavy weighting in
the DIA, SPY, and QQQ we will see sharp
declines at the open as investors reprice the
tech giant’s value.
Asian markets closed down across the board last night, and European indexes are also lower this
morning. Selling pressure in the US Futures
is pointing to a gap down of more than 300 Dow points at the open. I think the big question for the day is will
the AAPL disappointment spill over into other companies triggering more selling
and fear. Expect very fast price action
at the open that will challenge even the most experienced day traders. Buckle up it could be a very rough day.
On the Calendar
On the Earnings Calendar,
we have 14 companies reporting today.
Action Plan
After gaping down more than 300 points yesterday, positive comments from the President
on trade negotiations embolden the bulls recovering
to an 18 point Dow gain. This morning the
market faces a gap down that will be much harder to recover from and may spawn
additional selling in the tech sector.
Yesterday after the close AAPL reported disappointing revenue guidance sending
the stock sharply lower. With slowing iPhone sales this is the first
time AAPL has lowered revenue projections since
the popular device came to market in 2007.
Currently, the Dow Futures
indicate a gap down open of more than 300 points. With AAPL so heavily
weighted in the DIA, SPY, and QQQ it could
be a rough day for the market. According
to a report, Warren Buffett will lose 2.8 Billion on his AAPL position today. As the power switches
isles in the House today the first order of business is electing a new
speaker. Once that is complete, they hope to pass several bandaid
bills as a temporary patch to reopen
parts of the Federal Government while negotiations
continue on the border wall. With so
much uncertainty expect volatility to be back on the rise this morning fast price action more suitable for day traders
than swing and position trading.
As I write this, the Dow
is expected to open more than 300 points lower and continues to face the uncertainty
of the government shutdown. Asian markets sold off sharply during the
night with December manufacturing numbers came in worse than expected. European markets are bearish across the board
as well this morning, and the US Futures
are pointing to a nasty overnight reversal
gap down.
Today the President is meeting with Congressional leadership so we will have to say on our toes because the
market is likely to react quickly to any news, positive or negative that
results from the negotiation. The volatile
price action continues to favor the quick day traders as the risk of holding positions
overnight in this emotional market remains very high. Price action will likely be very sensitive to
any political news so remain focused, flexible and ready for intraday
reversals.
On the Calendar
On today’s Earnings Calendar we have only seven companies reporting, and unless you happen to hold them,
they are not particularly notable.
Action Plan
The bullish gap on Monday looks fully reverse as the market sentiment
continues to flip-flop from moment to moment.
The current price action continues to
favor quick day trading because the risk of holding over trades over a single
night is unsuitable for most swing traders.
The President has called a meeting with Congressional leadership to
discuss ending the government shutdown. The
news spin out of this meeting could move the market sharply so we will have to
stay flexible and focused on price action.
Currently, the Dow futures
are pointing to a 350 point gap down which of course means we have to watch carefully
for the possibility of a reversal whipsaw much like we experienced last
Thursday. However, there is no reversal,
and the sellers remain in control after
the open it would be wise to remember that support could be hundreds of points lower. That’s one of the challenges of whip like
this because the price action didn’t take
the time to build support levels. Volatility
is likely to be very high today and price
action very sensitive to political news.
Stay flexible, focused on price
action, avoid trying to predict and watch out for possible whipsaws.
As we bid farewell to 2018, reflecting on the last 12 months of trading, it was overall a great year albeit quite
challenging to navigate. As we enter 2019, the market is showing its first clues of bottoming
but still faces significant uncertainty this
will likely continue to challenge traders for the next several weeks to months.
But for those disciplined to price action, I have no doubt 2019 will provide us with great opportunities
to profit. Be careful with this mornings gap up and watch for the possibility of a pop and drop.
We need to see buyers coming in to support this gap and willing to
challenge resistance levels. That may be a lot to ask with volumes likely
to decline quickly today as traders set their sights on 2019 celebrations. I wish you all a Happy New Year and a prosperous 2019!
On the Calendar
On the Earnings Calendar,
we have 18 companies reporting this New Year’s Eve, but none of them are particularly notable.
Action Plan
The Futures are pointing to
a big gap up this morning after the President stated he had a good conversation
with the Chinese President Xi about trade. As I write
this the Dow Futures are suggesting a gap up of more than 200 points. As great as it is to see bullishness in this
market I must say it seems highly suspect and would suggest caution on this
last day of trading for 2018. Shortly
after the Presidents comments, a report suggested that the two sides are still
very far apart on key elements of the agreement. Another clue is that Asain markets closed
mixed with the Nikkei lower 62 points on the same news. European markets are also not impressed and currently
mixed but mostly falt on the day.
After the morning rush, expect
the volumes to drop off quickly as traders turn
there focus toward celebrating the new New Year. Keep in mind the Federal Government is still
shut down, and the new Congress will begin to whip up market emotions later this week. If buyers
support the gap after the open keep an eye on price resistance levels
and watch for the possibility of a pop
and drop. I wish you all a Very Happy
New Year!
