Technical Damage

May 20, 2021 by Doug Campbell

Though the index charts have taken some technical damage, the DIA and SPY finding the energy to hold at their respective 50-day averages provide hope that a relief rally may soon follow.  However, the damage in the QQQ and IWM is much more significant and will require substantial effort by the bulls to reverse the current downtrends and overhead price resistance levels.  The elevated VIX suggests we should expect challenging price volatility as the bulls and bears battle for control.  Inexperienced traders will likely find this environment very costly due to the speed and range of the point moves, overnight reversals, and whipsaws that are likely to occur.

Asin markets traded mixed but mostly lower overnight though Japan’s exports surged in April.  European markets are currently green across the board this morning after the Fed talks of tapering.  On the other hand, U.S. futures point to a bearish open though will off the overnight lows ahead of Jobless Claims and the Philly Fed numbers.

Economic Calendar

Earnings Calendar

Today we have just 39 companies listed on the calendar, but several of them have not confirmed their reports.  Notable reports include AMAT, BJ, CSIQ, DECK, HRL, KSS, RL, PANW, & ROST.

News & Technicals’

Facebook is facing some court challenges that could lead to a ban on its EU-U.S. data transfers.  Blocking their transatlantic data flow will have profound implications for other U.S. tech giants.  Bitcoin plunges 30% and at one point touched 30,000 yesterday, which constitutes a 50% haircut from recent highs.  Hamas says it sees a cease-fire possible in the coming days, but this fight has gone on for decades and is unlikely to find a resolution anytime soon.  The 10-year Treasury yield dipped this morning to 1.663%, and the 30-year fell to 2.371% after investors digested the FOMC minutes, where there were hints that the committee might begin pulling back on debit purchases. 

Yesterday’s sell-off created some technical damage in the index charts, but there was also a few rays of hope, with the DIA and SPY finding at least some temporary support at their 50-day moving averages.  Unfortunately, the QQQ and IWM are under this critical psychological level but managed to hold the price supports of last week’s selling.  Recovery, however, could be challenging with both technical and price action resistance levels overhead blocking the potential relief rallies.  The VIX closed well below its high of the day but remained quite elevated above a 22 handle so expect considerable price action volatility to continue.  Experienced day-traders will likely have the upper hand in this environment, while swing traders may find the quick whipsaws and complete overnight reversals very challenging. 

Trade Wisely,

Doug

Worrisome Cracks

May 19, 2021 by Doug Campbell

With the DIA and SPY cling to bullish trends, worrisome cracks have developed in the index charts.  I use charts because I believe they me clues.  However, to read those clues, we have to see the charts for what they are, not for what we want them to be.  The QQQ and IWM are in failure patterns below their 50-day averages, and both the DIA and SPY show possible lower highs that are in striking distance of new lower lows.  For years and market, sell-off offered an opportunity to buy the dip, and perhaps this one is no different, but I think it time to consider the possibility the market top is near.

Asian markets traded mostly lower overnight, with Australia falling a full 2%.  European markets trade decidedly bearish this morning, and the U.S. futures, despite solid earnings results, point to bearish open as we wait for the FOMC minutes.

Economic Calendar

Earnings Calendar

On the Hump day earnings calendar, we have 31 companies fessing up to quarterly results.  Notable reports include CSCO, ADI, JD, LB, LOW, SCVL, TGT, & TJX.

News & Technicals’

Though we saw solid earnings results yesterday, the market yawned and spent the day chopping in a very tight range intraday consolidation.  This morning we have already heard from TGT and LOW with massive beats on expectations, but the bears seem to be making another attempt at control this morning.  According to reports, about $270 billion has disappeared from the crypto markets, and bitcoin continues to slide south after the Musk tweet.  One has to wonder at the validity of a currency that collapses after a company chooses not to use it to sell cars.  Ahead of the FOMC minutes, the 10-year treasuries lifted to 1.66% this morning, and the 30-year rose to 2.385% as inflation worries persist.  President Biden extended the grace period for Chinese companies to comply with new restrictions to June 11^th versus the prior date of May 27^th.

Some worrisome cracks are starting to show in the primary index charts.  Both the QQQ and IWM show possible failures at their 50-day moving averages.  The VIX, as of yesterday, is trying to hold a higher low, and the Absolute Breadth Indicator has trended lower since March of last year.  Despite consistent reassurance from the Fed that the current inflation is transitory, worries persist that the market is overheating and may soon force the hand of the FOMC.  Though the DIA and SPY continue to cling to bullish trends, price patterns in the charts are raising some concern.  The DIA now shows a lower high and is within striking distance of last week’s low.  The SPY is in a similar pattern and has a stronger overhead resistance than that of the DIA.  Futures trade decided bearish this morning ahead of the Petroleum numbers, a 20-year bond auction, and the release of FOMC minutes.  Caution flags are waving, so plan accordingly.

Trade Wisely,

Doug

Inflation Jitters

May 18, 2021 by Doug Campbell

Futures perked up overnight, trying to shake off inflation jitters, but those pesky bonds are moving slightly higher this morning, mixing in some uncertainty.  As solid earnings results from HD and WMT try to inspire the premarket bulls, we still have new permits, and housing starts to digest before the open.  Though the DIA and SPY continue to cling to a bullish trend, the QQQ and IWM remain challenged by the overhead resistance of their 50-day averages.  Keep in mind intraday whipsaw and pop and drop patterns are still possible as we attempt to challenge price resistance levels.  Stay focused.

Overnight Asian markets enjoyed a bounce back with the NIKKEI, leading the up closing up more than 2%.  European markets have also turned positive this morning. However, the concern is growing about a quickly spreading virus variant in the U.K.  Fueled on the blowout earnings results, U.S. futures point to a bullish open ahead of new construction housing data.  Remember, choppy price action is still possible ahead of the Wednesday release of the FOMC minutes. Be careful not to chase the open.

Economic Calendar

Earnings Calendar

On the earnings calendar, we have a focus on big retail, with more than 40 companies reporting.  Notable reports include HD, WMT, BIDU, DQ, IQ, M, NTES, SE, TTWO, TTM, & TCOM.

News and Technicals’

After a day of choppy rest with modest losses, the futures perked up overnight as they try to shake off last week’s inflation jitters.  Home Depot reported blowout results early this morning as sales lept higher by 32.7%.  The new virus variant that emerged in India could become the dominant strain in the U.K. in a matter of according to health officials.  The U.K. is detecting a rapid spread of the new variant.  Though futures try to push higher this morning, the same is true of the 10-Year Treasuries as they top 1.65%, with the 30-year rising to 2.368%.  In a call with Netanyahu, Biden said the U.S. supports a ceasefire; however, the conflict between Israel and Hamas continues to escalate.  More than 300 rockets have bombarded Israeli cities. 

On the technical front, not much changed yesterday, with the SPY and IWM remaining under their 50-day averages.  The DIA and SPY ended the day with only modest losses holding on to key supports though still challenged by overhead resistance. Earnings from HD and WMT are trying to inspire the bulls as we wait on the latest reading of building permits and housing starts.  It will be interesting to see if the sharply rising materials costs have dampened new construction activity.  As the futures rise, keep in mind that bonds are also moving higher this morning.  Be careful not to chase and watch for the possible pop and drop near price resistance levels.  Keep in mind that the T2122 indicator is nearing an overbought condition already, and the VIX yesterday held at a higher low.  We should also not rule out the possibility of another day of chop as we wait on the FOMC minutes released Wednesday afternoon.

Trade Wisely,

Doug

Shell-Shocked

May 17, 2021 by Doug Campbell

The violence of the last weeks selling and bounce likely left traders and investors a bit shell-shocked and rightfully concerned about what comes next!  Markets hate uncertainty, and with rising inflation, the Fed’s following action certainly raises the bar on uncertainty.  Toss in the growing instability in Israel, cybersecurity threats, higher taxes as just a few of the pending concerns, the stage is set for some very challenging price action.  For now, calmer price action can be found in stocks sectors XLF, XLE, XOP, XLB & XLP. 

Overnight Asian market trade mixed with the NIKKEI lower by nearly 1%.  European markets trade lower across the board this morning with modest losses.  Ahead of manufacturing and housing numbers, the U.S. futures point to a lower open and the uncomfortable possibility that the QQQ could fail at its 50-day average.  Stay focused and flexible, ready to fast price action and intraday whipsaws.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have more than 190 companies listed on the calendar, but the vast majority listed are unconfirmed.  Notable reports include TWNK, IBIO, RIDE, RYAAY, TME.

News & Technicals’

After bouncing back from last week’s sell-off is now facing a morning with futures suggesting a lower open and price resistance levels above, leaving behind a bit of uncertainty.  According to a U.S Trade Representative and an EU Commission official, the European Union and the U.S. have started talks to end steel tariffs.   The efforts to get Iran back on track with its nuclear deal could undercut the efforts to end the conflict between Israel and Palestinian militants.  Reviving the deal means that Iran would receive Billions of dollars in sanctions relief that Tehran could use to fund Hamas.  Treasury yields are pulling back slightly this morning, with the 10-year dipping to 1.617% and the 30-year slipping to 2.336%.  I suspect today’s speech from Richard Clarida, Vice-Chair of the Fed, will have lots of eyes looking for future clues as investors try to balance an overheating market and the possibility of rising interest rates.  Investors will also closely inspect the FOMC minutes released Wednesday afternoon.

Last week’s volatility likely left traders and investors a bit shell-shocked with the speed and violence of the selling.  It also left behind some serious technical questions to be answered in the week ahead.  The NASDAQ suffered the worst of the technical damage confirming a downtrend and now having to deal with its 50-day average as price resistance.  The Russel suffered similar technical damage.  The SPY successfully held at its 50-day average, bouncing strongly to end the week but now has price resistance above that could block the path higher.  With inflation worries and the real possibility of Fed rate action, we should expect the wild price volatility to continue.  Stay focused and plan your risk carefully.

Trade Wisely,

Doug

April Employment Situation

May 7, 2021 by Doug Campbell

Today is all about the April Employment Situation number and how the market will react as the economy heats up.  Economists suggest the number could top 1 million. With the Fed warnings that the rapid increase in asset prices poses a significant economic risk, inflation impacts could soon change the easy policies.   Making new record highs in the Dow yesterday and pushing higher still in the premarket, the bulls seem undeterred, at least for the moment.  However, it may be wise to reduce some risk heading onto the weekend depending on the reaction to jobs data.

Asian markets closed mostly lower but near the flatline overnight.  European markets are, however, decidedly bullish this morning, with the DAX surging more than 1.3%.  Ahead of earnings and jobs data, the futures point to possible new records at the open as we wait on the release of the Employment Situation data.  Stay focused; it could be a wild morning of price action. 

Economic Calendar

Earnings Calendar

We have a lighter day on the earnings calendar but still have more than 125 companies reporting.  Notable reports include AMCX, CI, CNK, CIO, CRON, DKNG, ELAN, ERF, FLR, LEA, NKLA, RUTH, SPB, TU, & VTR.

News & Technicals’

All eyes will be on the April Employment Situation number coming out before the bell this morning.  Consensus expects new jobs will top 1 million, but that number could also be hot enough to consider the unwinding the easy Fed policies.  The pandemic situation in India continues to worsen, with more than 400,000 infections for the 3^rd time this week. In the last seven days, the country total stands at 2.7 million cases.  Treasury yields turned slightly higher early this morning, with the 10-Year rising to 1.575% and the 30-year edging up to 2.247% ahead of today’s jobs report.  In a report, yesterday afternoon Fed warned that the rising asset prices pose an increasing threat to the financial system.  “Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.  Well, thank you very much, Captain Obvious!  Who would guessed that printing nearly 19 Trillion in one year would have significant financial impacts?

However, a warning from the Fed did not detur the bulls yesterday, pushing the Dow to new record highs in a substantial late-day surge.  The push continues this morning in the premarket, with the futures currently pointing to a bullish gap-up open ahead of the Jobs report.  Ths SPY also had a good day yesterday, putting it in striking distance of a new record at the open.  That said, the tech sector remains the problem child below a substantial price resistance, facing higher bond prices and a severely expanding chip shortage.  We have partied for an entire year on easy Fed policy and massive money printing.  The trend remains bullish, so stay with it as long as it lasts, but one must consider the magnitude of the hangover lurking in the near future. 

Trade Wisely,

Doug

Finally, a Consolidation Breach

May 6, 2021 by Doug Campbell

Though beginning with a volatile pop and drop, the bulls finally mustered the energy to breach the wide-range consolidation, briefly touching a new record high.  Unfortunately, the pop and drop won the day in the SPY, QQQ, and IWM closing below the previous day.  Today, we have nearly 375 earnings reports and a jobless number, so expect the challenging price action to continue.  Futures are pumping up the premarket, so keep an eye out for yet another pop and drop open.

Asian markets traded mixed but mostly higher, led by the NIKKEI surging 1.80% even as the SHANGHAI closed marginally lower.  European markets chop around the flatline as they wait on the Bank of England policy decision.  U.S futures are pushing for a bullish open with a big day of earnings data and the latest reading on jobless claims.  Buckle up and remember to plan for the employment situation number before the bell Friday morning.

Economic Calendar

Earnings Calendar

Today we have the largest number of earnings reports so far this quarter, with nearly 375 fessing up to quarterly results.  Notable reports include AMC, AL, ALL, ABEV, AIG, ANGI, BUD, APLE, MT, BLL, BDX, BYND, APRN, BIP, CAH, CARS, CVNA, CNP, NET, ED, DDOG, XRAY, DBX, LOCO, ET, EXPE, FVRR, FLIR, GPRO, GPRN, HL, IAC, IRM, K, LYV, MGA, MAIN, MCK, MCHP, MRNA, MNST, MUR, NCLH, NRG, OTE, PZZA, PK, PTON, PENN, PLNT, POST, PLL, RMAX, REGN, ROKU, SBH, SEAS, SHAK, SFM, SQ, STMP, STOR, SPWR, TPR, TDC, THS, TRIP, UMH, OLED, VER, VIAC, W, WPM, YELP, & ZTS.

News and Technicals’

We finally had a slight breach of the wide-range consolidation that began nearly three weeks ago as the Dow managed to reach out to a new record high yesterday briefly.  India’s health ministry showed more than 412,000 new infections over 24 hours, pushing 21 million.  Worries are growing that the prolonged outbreak could lead to new variants that would threaten the global progress of the pandemic.  On a bright note, in the suffering tech sector, the 10-year treasuries note slipped lower this morning to 1.58% though the 30-year crept higher to 2.262% ahead of the weekly Jobless Claims.  The forecast is that 527,000 new unemployment claims were filed last week.

As the DIA breaks the consolidation log jam, the tech-laden SPY popped and dropped yesterday, still challenged by the price resistance above.  The QQQ also tried to move higher yesterday morning, but sellers eventually won the day, closing the day below the previous day’s close.  IWM also slid slightly lower even as the oil and financial sectors pushed higher.  With a considerable number of earnings reports and Jobless Claims before the open, the futures are again trying to pump the buying enthusiasm currently pointing to a bullish open.  At the risk of sounding like a broken record, watch out for the possible pop and drop at the open.  Keep in mind as you plan your risk forward, we will get the employment situation number before the open Friday.  An open gap is possible, so plan accordingly.

Trade Wisely,

Doug

Another Whipsaw

May 5, 2021 by Doug Campbell

With Yellen suggesting the higher rates may be on the way to prevent the market from overheating, she created a nasty market whipsaw that produced some technical damage in the QQQ.  On the other hand, the DIA bounced strongly enough to set up a new record high for the index if it can follow through today.  Unfortunately, that’s been the problem for the last couple of weeks; inability to follow through!  With a big day of earnings and private payroll number just around the corner, one has to wonder who it will inspire today? Bulls or Bear?

Overnight Asian markets closed in the red with modest declines across the board.  However, European markets are decidedly bullish this morning, with the DAX up more than 1%.  Ahead of earnings and jobs data, the Dow futures are trying to add to yesterday’s whipsaw rally, pointing to bullish open.  Be careful rushing in until we see some actual follow-through buying.  Remember, the pop and drops of late in this wide-ranging consolidation can be very punishing. 

Economic Calendar

Earnings Calendar

The hump day earnings calendar is a busy one, with more than 200 companies scheduled to reveal quarterly results.  Notable reports include GM, ALB, ABC, GOLD, BKNG, BWA, CERN, CF, CLH, CYBR, EMR, ETSY, FSLY, FOX, GDDY, HLT, HFC, HUBS, KTOS, LNC, LL, MTW, MRO, MET, NYT, NVO, NUS, PYPL, QRVO, QLYS, RLT, RGLD, SMG, SSYS, RGR, RUN, SKT, TRMB, TUP, HEAR, TWLO, UBER, WW, & ZNGA.

News & Technicals’

Janet Yellen spouted off about the need to raise rates to prevent the market from overheating, creating nasty whipsaw intraday.  She later clarified that she is not predicting it will need to go up or as to when it will be necessary.  Well, thank you very much!  If the volatility created cost you some money yesterday, make sure to send her a thank you card.  Yellen then said, “We propose to raise the global minimum tax and to close tax loopholes that allow American corporations to shift earnings abroad,” at the Wall Street Journal’s CEO Council Summit.  Get ready for global taxation. President Joe Biden set the goal of getting 70% of U.S. adults to receive at least one dose of a Covid vaccine by July 4. The White House will also aim to have 160 million adults fully vaccinated by Independence Day, senior administration officials said.  Treasury yields declined yesterday, but this morning ahead of the private payrolls, data have once again started to creep higher.  The 10-year traded at 1.605% this morning, and the 30-year edged higher to 2.278%. 

Yesterday’s price action produced some technical damage in the QQQ, with the index dropping through support levels of price and current trend.  That left behind a somewhat significant price resistance level that the tech sector will now have to overcome.  However, the DIA produced a strong bounce-off of price support to create possible new record highs if the index can find the energy to follow through today.  The bounce in the SPY was also productive, but it also now has a price resistance level to deal with to move higher.  One thing for sure this wide-ranging consolidation filled with chop and whipsaws is challenging and very frustrating.  Be careful not to overtrade!  Today begin to focus on jobs numbers, the private payrolls, jobless claim on Thursday, followed by the Employment Situation numbers Friday morning.  Stay focused and flexible with more than 200 companies reporting and inflation worries and all the talk of higher rates and taxes; there is a lot for the investors to digest.  Anything is possible. 

Trade Wisely,

Doug

A Nice Start to May

May 4, 2021 by Doug Campbell

Yesterday’s surge was a nice start to May, but the ability to follow through and break this choppy consolidation range continues to elude the bulls.  With treasuries creeping higher this morning, the tech sector has topped earnings estimates by as much as 20% is struggling to hold price support and a possible double top failure in play.  Be careful not to chase or overtrade a dull market because it can quickly chop up an account, leaving you bruised and battered before a direction manifests.

Overnight Asian markets closed mixed but mostly lower as the RBA holds steady on policy.  European indexes trade mixed in a session muted with recovery worries.  Facing a big day of earnings data as well as trade and factory numbers, U.S. futures currently point to a flat open with tech under slight pressure due to rising bonds. Could it be just another day of choppy consolidation as the market searches for some inspiration?

Economic Calendar

Earnings Calendar

Earnings ramp up this Tuesday with more than 200 companies listed on the calendar set to report quarterly results.  Notable reports include UAA, ATVI, ALGT, ANDE, AKAM, ARNC, ANET, BHC, LNG, COP, CMI, CVS, DENN, DVN, D, DD, ETN, RACE, BEN, IT, HSIC, HST, H, IDXX, INCY, INFN, KKR, LPX, LYFT, MPC, MLM, MTCH, MCFE, MTOR, NXST, PFE, PXD, SEE, SU, SYY, TMUX, SPCE, VMC, WMG, WU, XLNX, & ZG.

News & Technicals’

It was a nice start to May with the indexes surging at the open, but sadly they lacked much energy to do much else, chopping sideways to down the remainder of the day.  There are some starting to suggest that the market is topping due to the lack of momentum. However, the big instutions continue to sing in unison that this summer will see the indexes higher.  Treasury yields advance this morning, with the 10-year at 1.61% and the 30-year moving up to 2.29%.  Yesterday gold and silver surged after Warren Buffet said they see a significant rise in inflation as of late.  As the CDC tells Americans, they can now freely resume travel around the country; India’s pandemic case total crossed 20 million with more than 345K infections reported yesterday.   President Biden has set a deadline to reach an agreement on the infrastructure bill of May 31^st as he travels around the country trying to sell the public on the multi-trillion deficit spending plan. 

The bulls took a solid run at setting a new Dow record high yesterday but fell short as the tech sector found sellers damping the early enthusiasm.  Interestingly the VIX crept slightly higher, and the Absolute Breadth Index moved lower despite the bullish effort.  With earnings estimates topped by more than 20%, it makes me wonder what it’s going to take to break this choppy consolidation range.  Trends remain bullish, with bonds moving slightly higher this morning, adding a little pressure to the tech sector struggling to hold onto its index price supports.  As the morning earnings roll out, futures suggest a flat open with trade numbers and factory order numbers on the horizon.  It looks as if the lackluster price action could continue this morning.  Plan your risk carefully and avoid overtrading.

Trade Wisely,

Doug

Frustrating Week

May 3, 2021 by Doug Campbell

Though we had a week of blowout earnings, the price action that followed made for a very frustrating week as it chopped sideways with little to no momentum.  With the futures once again pushing hard in the pre-market, the question is will this time be different, or will it turn out to be just another pop and drop that we experienced several times over the last couple of weeks?  Overall index trends are still bullish but stay focused and flexible with a busy week of earnings ahead.

Asian markets closed in the red across the board overnight with Twain tensions rising and India reeling from pandemic infection rates.  However, European indexes trade higher this morning, with the U.K. closed to celebrate their May Day holiday.  Here in the U.S., the pre-market pump has begun ahead of a busy day of earnings as well as manufacturing data.  Will there be some follow-through or another frustrating whipsaw?  Plan your risk carefully.

Economic Calendar

Earnings Calendar

Kicking off the first week of May, we have more than 100 companies reporting quarterly results.  Notable reports include AMG, ALK, WEK, APO, CAR, CBT, CHGG, CC, FANG, EL, FN, GPP, IRBT, L, MOS, RMBS, ON, PETS, RBC, RIG, & XPO.

News & Technicals’

Warren Buffett announced his successor, CEO Greg ABEL when he would be no longer man the helm of Berkshire Hathaway.  Treasury yields dipped slightly this morning ahead of the manufacturing data, with the 10-year coming in at 1.625% and the 30-year traded flat at 2.298%.  The Phillippine secretary of foreign affairs accused Beijing of strainings its friendship with the Philippines.  In a Twitter post, Locsin asked China to “get the f— out!”  Keep a close eye on this as the war of words escalates with Taiwan clearly in China’s crosshairs.  The president will out touring the country trying to sell the infrastructure bill to the public as Congress continues to wangle over the size and scope.  As India’s pandemic numbers spike, the U.S. discusses a more comprehensive licensing of vaccines that may waive patent protections.  Over the weekend, India reported more than 400,000 daily cases bringing the countries total to nearly 20 million.  On Friday, the White House announced that it would restrict travel from India.

There’s no doubt that last week was a confusing and frustrating week of price action as companies report blowout results while the market showed little to no interest.  Technically speaking, the bullish trend remains intact though the price action has lingered in a wide-ranging consolidation.  For some reason, the pre-market futures appear inspired to get moving this morning, but once again, I feel it’s necessary to suggest caution in case of another pop and drop.  Don’t case, instead let’s wait to make sure there is some actual buying after the open with enough momentum to last more than a few minutes.  With a big week of earnings and news, stay focused and flexible.

Trade Wisely,

Doug

Puzzling Week of Price Action

April 30, 2021 by Doug Campbell

As big tech produces historic earning numbers, it has been a puzzling week of lackluster price action.  Could the rising bonds and concerns of inflation causing the lack of momentum, or perhaps the significantly elevated P/E ratios causing the problem?  Whatever the cause, the price action continues to chop up accounts as it whipsaws in a better than 500-point consolidation range in the Dow.  As we enter the last trading day of the month and slid into the weekend, consider your risk carefully.

Asian markets traded lower across the board overnight, with the HSI falling nearly 2%.  European indexes trade mainly lower this morning as the Eurozone deals with another pandemic-related recession.  After the blowout earnings in AMZN, the U.S. point to a lower open ahead of personal income numbers.  Get ready for another day of choppy uncertainty. 

Economic Calendar

Earnings Calendar

On the Friday Earnings calendar, reports lighten up, giving us a little break after such a big week of data.  Notable reports include ABBV, BCS, CHTR, CVX, CLX, CL, E, XOM, GT, HP, ITW, NWL, PSX, PBI, QSR, GWW, & WY.

News & Technicals’

It’s been a puzzling week with massive earnings beats but a market devoid of the momentum to react to the historic results.  Make a person wonder if the saying, sell in May and stay away, will merit this year?  According to the European Commission, Apple has abused its dominant position in the distribution of music streaming apps.  The stock is indicated lower this morning.  Unfortunately, the Eurozone economy has once again slipped into another recession as they deal with the 3^rd wave of pandemic lockdowns.  Inda reported another new record with over 386,000 new infections in a single day.  In April alone, the county has had to deal with 6.6 million new cases, bringing more than 18.76 million cases in total.  As the market digests the blowout earnings reports, the 10-year treasury pushed higher to 1.647% with only a slight movement in the 30-year, moving up to 2.31%.

On the index technical front, the SPY managed to set a new record high, but the day’s price action was not exactly confidence building leaving behind a possible hanging man candle pattern on the chart.  Overall the trends remain bullish even as the price action continues in a choppy consolidation zone.  , With the price action lacking directional momentum and chop zone of more than 500 points in the Dow, it has been a challenging and punishing time for swing traders.  Holding longer-term positions in trend stocks have rewarded trader with discipline to hold through the uncomfortable chop.  However, the quick, experienced day traders seem to have the upper hand.  With the bulk of earnings inspiration behind us, significantly elevated P/E ratios, and the summer doldrums just around the corner, traders should be cautious of overtrading.

Trade Wisely,

Doug