Jerome Powell has a difficult task today as he attempts to walk a tightrope of rising inflation concerns and economic recovery. The 10-year Treasury yields hitting new highs ahead of the announcement raises the stakes, and the entire world economy is watching. Congress will have its own balancing act to perform today in a hearing to deal with illegal border crossings that have hit record highs. Stay focused and flexible because anything is possible as we wait on the data.
Asian markets closed mixed but mostly lower in a choppy cautious session as they monitor the FOMC. European indexes also trade cautiously this morning, bounding around the flatline as they wait on the Fed decision. Ahead of a big day of data, U.S. futures appear to be treading water near the flatline ahead of earnings and potentially market-moving reports. Buckle up!
Economic Calendar
Earnings Calendar
We have 65 companies listed on the Wednesday earnings calendar, but a significant number of them are unconfirmed. Notable reports include AOUT, CTAS, FIVE, MLHR, LE, RIDE, OTCM, PDD, WSM, & ZTO.
News & Technicals’
The pressure on Jerome Powell today as he attempts to walk a tightrope between Washington and Wall Street. The fireworks begin at 2 PM eastern with the FOMC statement followed by the press conference at 2:30. Treasury yields have hit a 13-month high this morning ahead of the Fed decision. Simultaneously, the pandemic is improving here in the U.S.; German cases are rising exponentially. A reminder that we may still have a long road ahead of us in the battle against Covid-19. Italy and France have decided to restart AstraZeneca vaccinations they recently stopped due to blood clotting concerns. There will be in hearing in Congress today as illegal border crossings hit record numbers. Democrats frame it as a minor problem while Republicans suggest it’s an all our crisis. It should be an exciting day of political pandering and soundbites.
Markets paused yesterday, somewhat holding their breath as we wait on the FOMC decision. Yesterday’s economic data was a bit disappointing, and today we get the latest reading on Housing Starts and the status of Petroleum reserves. Though potentially market-moving, all eyes will be on Jerome Powell’s tightrope walk later this afternoon. The DIA, SPY, and IWM indexes remain in good condition holding on to bullish trends. The QQQ is another matter leaving behind a concerning candle pattern at its 50-day moving average. What today’s follow-through price action on the tech sector could be of critical importance. With the 10-yields on the rise this morning, there is a lot at stake.
A choppy market session found sellers after the gap up open, but bulls ultimately won the day, climbing the wall of worry to set new records. However, futures trade missed this morning, facing the latest read on Retail Sales and the beginning of the 2-day FOMC meeting. As inflation concerns linger in the bond market, worries grow that the Fed could hint of interest higher rates in 2032. Should they do so, expect price volatility to follow as investors digest the future ramifications. Plan your risk carefully!
Overnight Asian markets rallied with modest gains across the board. European markets also trading in the green this morning, with VW surging 5.6%. U.S. futures have rallied off overnight lows but continue to suggest a flat, mixed open ahead of potentially market-moving economic reports. Fasten your seatbelts; the next couple of days could be an exciting ride.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we now have more than 100 companies, but quite a few are not verified. Notable reports include COUP, CRWD, DBI, JILL, JBL, LEN, & VEL.
News & Technicals’
The market set new records in a choppy market session that seemed to struggle with momentum. Sweden and Latvia joined Germany, France, Italy, and Spain on Monday, stopping the administration of the AstraZeneca vaccine over blood clot fears. However, the company says there is no data that really justify these decisions and could have pandemic consequences. According to the U.S. solar industry, they posted record growth in 2020, adding 19.2 gigawatts of new capacity and an increase of 43% from last year. Solar installations are planned to quadruple by 2030.
As I write this report, the U.S. futures trade mixed with retail numbers and the beginning of the FOMC meeting in focus. Consensus estimates say retail numbers will decline rather sharply from the last reading, but they have set the expectation so low it may not be that hard to top the target. With bond rates moving up and worries about rising inflation, all eyes will be on the Fed announcement Wednesday afternoon. There is speculation that the committee could suggest rate increases by 2023. A long way off, but even a hint that higher rates are possible significant price volatility could be the result. Carefully consider your risk as you plan the path forward over the next couple of days. The NASDAQ is currently pricing in a gap up to test its 50-day average as resistance this morning. Will there be any bears ready to defend? Only time will tell.
New all-time highs as the indexes continue to extend with the smell of freshly printed money inspiring the bulls. In just 6-trading days, the Dow surged over 1900 points, and the party is not over yet, with the futures pointing to another gap up open. Stay with the trend, but I caution traders to avoid overtrading or becoming complacent. A pullback could begin at any time, and remember, a gap up to new highs brings with it the possibility of a pop and drop price pattern. Until then, enjoy the party!
Asian markets traded mixed but mostly higher overnight, and European markets advance with modest gains this morning. Ahead of an FOMC announcement Wednesday afternoon, expect price volatility to continues as the bulls push for more records at today’s open. Stay focused and flexible as we enter a busy week of earnings and economic data.
Economic Calendar
Earnings Calendar
On the Monday calendar, we have just short of 100 companies stepping up to report quarterly results. However, many of them are small-cap unverified reports. Notable reports include HQY, FENG,& VUZI.
News & Technicals
White House advisor Fauci is warning against lifting U.S. restrictions as Germany declares a 3rd wave of infections, and Italy prepares for an Easter lockdown with the infection rates rise. Ireland, Austria, and the Netherlands are the latest countries to suspend the AstraZeneca vaccine over blood clot concerns. According to the TSA, passenger screenings hit the highest levels in over a year as travel begins to recover. The 10-year treasury yield stubbornly holds above 1.6%, with an FOMC meeting just around the corner.
Indexes finished last week strong as new all-time high records continue on almost a daily basis. How long this bullish frenzy of buying can last is anyone’s guess, but chasing this rally could prove to be very dangerous as we extend. The current SP-500 P/E ratio is 80% above its 10-year average, and the 4-week new high/new low ratio continues to suggest an extremely overbought condition in the short-term. That said, the VIX continues to decline, closing above a 20 handle on Friday. The QQQ remains the problem child, still trading below its 50-day average with significant overhead resistance above. Ahead of the FOMC, treasuries continue to hold above 1.6% as inflation worries persist. Stay with the bullish trend but don’t become complacent because a rest or pullback could begin anytime.
In a prime-time address, President Biden says all adults should be able to receive at least one vaccination by the end of May and suggest things might get back to normal by the 4th of July. The market enjoyed a strong bullish run yesterday as investors celebrated the signing of the stimulus bill and the softening bond yields. Though we made the record books in the DIA, SPY, and IWM, the QQQ still has the overhead resistance of its 50-day average to overcome. Though we have a light day of earnings and economic reports, those pesky bond yields are creeping up with the 10-year back at 1.6%.
Overnight Asian markets closed mixed but mostly higher as the NIKKEI surged 1.73%. However, with bond yield climbing again, European indexes trade with modest losses across the board this morning. U.S. futures traded mixed coming off of overnight lows, trying to ignore bond yields and inspire more buying. This week experienced a fantastic bullish party extending the indexes, but one has to wonder if there is a nasty hangover just around the corner as bond yields creep higher. Plan carefully heading into the weekend.
Economic Calendar
Earnings Calendar
We have a lighter day on the Friday earnings calendar with just 31 companies stepping up to report. Notable reports include BKE, KIRK, & NOG.
News & Technicals’
In a prime-time address, President Biden will direct states to make all adults receive at least one vaccination by the end of May. Unfortunately, more countries have suspended the AstraZeneca vaccine due to rising issues of blood clots. The U.S. has not suspended its use so far. Although fear declined with successful 10 and 30-year bond auctions this week, the yeild is again topping 1.6% this morning. After signing the 1.9 Trillion bill, the White House says stimulus checks could start showing up in bank accounts as soon as this weekend assuming you use direct deposit. New York Governor Cuomo’s pressure continues to grow with calls for him to resign and an impeachment probe picking up steam.
Another day and more records highs for the indexes as the DIA, SPY & IWM bulls celebrate the next round of stimulus. The QQQ also enjoyed a nice rally with big tech finding buyers, but it still must deal with its 50-day average that may yet serve as overhead resistance. The VIX continues to weaken though tenaciously holding above a 20 handle. The four-week new high/new low ratio indicator signifies an extremely overbought short-term condition in the indexes, so be careful not to chase this late in the rally. With the bond rates popping back up this morning, it may be a good day to take some profits heading into the weekend.
The bulls lifted the Dow above 32,000 for the first time in history as the market celebrates the passage of one of the biggest spending bills of all time. Treasury yields also softened after a successful 10-bond auction sending industrial and consumer defensive stocks soaring as big tech continued to suffer. With more than 150 earings reports, Jobless Claims, JOLTS, and a 30-year bond auction ahead, the bulls push for another gap up open to keep the party going. Be careful not to chase such an extended rally because a significant pullback could begin at any time but until then, enjoy the ride!
Asian markets advanced overnight, led by the Hong Kong surging 1.65% at the close of the session. European markets traded mixed this morning as they chop cautiously around the flatline waiting for the next move of the ECB. U.S. Futures want the bullish party to continue pointing to a gap up open ahead of earnings and jobs data.
Economic Calendar
Earnings Calendar
As usual, Thursday is the busiest day of the week on the earnings calendar, with more than 150 companies reporting quarterly results. Notable reports include DOCU, LOCO, XONE, GCO, GOGO, GRDX, J.D., PRTY, PBPB, STNE, TTSH, TLYS, ULTA, MTN, WPM, & ZUMZ.
News & Technicals’
The passage of the stimulus bill lit a fire under the bulls pushing Dow above 32,000 for the first time in history. It is one of the biggest spending packages in history and the first legislative win for President Biden. Simultaneously, the President is under heavy pressure with more than 150,000 illegal border crossings in February, setting new records. The 10-year treasury yield softened slightly after a quick and successful auction yesterday afternoon. Today there will be a 30-year auction that to keep an eye on at 1 PM eastern. Denmark suspends using the AstraZeneca Covid vaccine after severe cases of blood clots reported in those vaccinated. President Biden will speak to the nation in a prime-time address on Thursday where he plans to announce the “next phase” of his pandemic response.
When it comes to the chart technicals, there is no question that bulls are large and in charge in the Dow, cementing new records prices. Although the NASDAQ has also enjoyed a nice relief rally, big tech continues to struggle with price resistance levels closing the day well below its 50-day average. Industrial and consumer defensive sectors continue to see substantial rallies as the massive rotation of the pandemic high flyers hits a fevered pitch. Be very cautious not to chase overextended stocks. With such a massive point rally in just a few days as a substantial pullback would not be out of the question and could begin at any time. Until then, enjoy the ride as the market celebrates the creation of deficit spending.
The bulls went back to work in the NASDAQ yesterday, lifting the index 3.69%, with the Dow briefly touching a new record high. However, the bulls still have a lot of ground to recover, with the QQQ, SPY, and IWM still challenged by overhead resistance. I think the big question the market has to grapple with is the bullishness of another 1.9 Trillion in stimulus and the possible bearishness that could create in interest rates and inflation. The success of the 10-year bond auction at 1 PM eastern today could be telling.
Asian markets closed mixed after a choppy session that saw selling into the close of the day. European markets seesaw this morning with modest gains and losses as the rally momentum seems to have faded. Ahead of earnings and a reading on the CPI, U.S. futures trade mixed in the premarket as inflation worries linger.
Economic Calendar
Earnings Calendar
On the Wednesday earnings calendar, we have just short of 100 companies fessing up to quarterly results. Notable reports include AMC, ASAN, BLDP, BBW, CPB, CLDR, EXPR, FOSL, FNV, LC, NGMS, SUMO, tup, UNFI, & VRA.
News & Technicals’
The bulls went back to work on Tuesday, pushing the Dow to a new high, but afternoon selling closed short of a record high close. The SPY and QQQ rallied sharply, testing resistance levels of price and downtrend, with big tech leading the gains. The U.S. House plans to pass the Senate revised stimulus bill today, and the President says he will sign it as soon as it hits his desk, adding 1.9 trillion in deficit spending. At 1:00 PM Eastern today, there will be a bond auction of the 10-year Treasuries. The last 10-year auction triggered a sharp rise in rates raising significant concerns of inflation. I may be wise to keep an eye on today’s auction if it energizes the bears for another attack. Representative Suzan DelBene is reintroducing a bill aimed at creating a national standard for digital privacy rights allowing states to build on the protections of the federal standard.
A look at the index charts, and it’s pretty easy to see the DIA is leading the way in printing a new record high before the profit-taking heading into the close. IWM is also in good condition though still challenged by some overhead resistance. Both the SPY and QQQ rallied sharply but still must address the downtrend as well as price resistance levels above. Keep in mind that that the QQQ remains the weakest of the indexes needing to recover more than 10 points to challenge its 50-day average as resistance. Before the bell, we will get the latest reading on CPI, and later today, it may be wise to keep an eye on the 10-year bond auction.
Yesterday’s price action was exciting but left behind an uncertain mixed bag of results. While industrials and consumer defensive stocks enjoyed a bullish stampede, the bears had their way in the NASDAQ pushing it into the correction zone. Adding more confusion, we have 1.9 trillion in stimulus on the way, coupled with rising concerns about inflation and a plethora of shooting star patterns left behind at or near resistance levels tossed in for an extra dose of uncertainty. With the Dow up more than 1200 points in just 3-trading days, the futures are once again pumping the fear of missing out and trying to encourage traders to chase. Plan your risk very carefully.
Asian markets closed mixed but mostly higher as SHANGHAI struggled to find buyers. European markets trade green across the board this morning, keeping a close eye on bond rates. U.S. futures once again surge higher with the House planning to pass the massive stimulus bill within the next 48 hours. Be careful chasing already extended stocks and keep an eye on bond rates with a 10-year auction scheduled for Wednesday afternoon.
Economic Calendar
Earnings Calendar
We have about 70 companies reporting quarterly results this Tuesday. Notable reports include AVAV, BNED, PLCE, DQ, DKS, HRB, NAV, & THO.
News & Technicals’
Yesterday was a rather odd day in the market with the bulls stampeding into industrials and consumer defensive sector stocks while the Nasdaq suffered significant losses. The bulls seem focused on the pending 1.9 trillion dollar stimulus bill, with the House planning to complete its work in the next 24 hours. Unfortuntually, the 10-year treasury yields continue to raise inflation concerns with all newly printed money about to enter circulation. It may be wise to watch the 10-year note auction scheduled for Wednesday afternoon, keeping your fingers crossed that it goes much better than the prior. The CDC announced yesterday that people fully vaccinated against Covid could return to meeting indoors without masks, but the government continues to caution about removing mask requirements too soon.
Technically we have an uncertain mixed bag in the indexes. The DIA reached out to a new record high yesterday but lost more than half of its gains, with sellers taking profits into the close. Simultaneously, the QQQ remained under significant selling pressure dipping a full 10% from its recent highs. Toss in the shooting star patterns at or near resistance levels left behind in the SPY and IWM, and the path forward becomes even more uncertain. However, once again, the premarket pump tries to encourage traders to chase, dredging up the fear of missing out emotion. Be very careful remembering that the Dow is already more than 1200 points above its low in just 3-days of trading. With long-bonds holding at higher rates, there is a lot of risk should the bears decide to defend resistance. Plan carefully, avoid over-trading, and chasing already extended stocks.
Friday brought a welcome relief raising hopes and leaving behind bullish engulfing patterns all over the place. Remember, hammer patterns must be validated with follow-through bullish price action. Soon money will begin to flow from the 1.9 trillion stimulus bill. Still, the question to be answered is can all the newly printed money overcome the consequences of rising inflation concerns as bond yields surge upward. Keep in mind the VIX remains elevated, so expect challenging price action so plan carefully.
Asian markets had a rough overnight session, with the HIS leading the declines closing down 1.92%. Across the pond, European markets trade modestly higher this morning, and the U.S. point to a flat open as investors monitor rising bond rates. Plan for choppy price action as the bulls and bears battle for control.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 65 companies stepping up to report quarterly results. Notable reports include BNFT, CASY, TACO, NCMI, NIU, PVAC & SFIX.
News & Technicals’
Over the weekend, the Senate pass the 1.9 Trillion stimulus bills, and after another vote from the House, the money will begin to flow. While one would expect the market to celebrate, the newly printed money futures seem to be struggling a bit this morning. It turns out the massive printing continues to worry the market about inflation, with the 10-year Treasury yield topping 1.6%. Yemen’s Houthis attacked Saudi oil facilities this weekend, once again raising tensions in the region and pushing crude prices above $70 per barrel. The defense department stated the U.S. would hold accountable those responsible for the rocket attacks against the Iraqi base that hosts American troops.
On the technical front, last Friday’s relief rally left behind a lot of bullish hammer patterns lifting hopes that a market recovery had begun. Although buying the dip has been a good strategy in the past, I’m not sure it will work this time. Keep in mind a hammer pattern requires the price to follow-though to be valid. With rising bond rates spooking investors, can all the government stimulus still overcome the concerns of if it just made it worse? Then we still have the challenge of downtrends as well as overhead price resistance levels yet to overcome. With the VIX still elevated, I expect price action to remain challenging in the week ahead. Watch for overnight reversal and intraday whipsaws as the bulls and bears battle for control. Keep an eye on bonds, as I suspect it will be difficult for the tech sector to bounce back should they continue to rise.
Jerome Powell stepped on a landmine with his inflation comments that raised some uncertainty about future interest rates. Long-term bond yields surged bring out the bears and creating substantial technical damage to the SPY and QQQ index charts. Although it was painful, the DIA and IWM holding at their 50-day averages could be a silver lining, not to mention the massive stimulus bill that’s moving through the Senate. Expect price volatility to continue as we face potential market-moving reports before the bell.
Asian markets had a rough night of volatility but ended the session only modestly lower. European market trade cautiously this morning as they monitor the inflation-sensitive long bonds. U.S. futures recovered from overnight losses, currently pointing to a flat or ever so slight bullish open ahead of the Employment Situation report. With the VIX elevated cinch up your big boy pants for another day of volatility.
Economic Calendar
Earnings Calendar
As we slide toward the weekend, we have a lighter day on the Friday earnings calendar with just 24 companies reporting. Notable reports include BIG, HIBB, & RUTH.
News & Technicals’
Reacting to Jerome Powells inflation comments where he stated the committee would ‘probably’ not raise interest rates, the market plunged sharply. The bears also gained energy as the longer-term treasuries rallied sharply as worried investors ran for the doors. The Senate cleared a hurdle yesterday, paving the way for the next round of stimulus. The hope is to have it completed by mid-March. Before the bell today, we will get the latest reading on the Employment Situation. Economists expect 210,000 jobs were created in February, up from the 49,000 last month but warn we have a long way to go before seeing a substantial employment recovery.
There is no doubt that yesterday’s price action was painful as it reacted to the Powell inflation comments. The majority of the technical damage focused on the tech sector, while the DIA and IWM managed to hold their 50-day averages. With the SPY so heavily weighted with tech giants, it also suffered substantial technical damage closing below its 50-average that now become overhead price resistance. With the VIX closing above 28 handles and turbulent overnight futures trading, expect another rough day price action. Keep an eye on the 10, 20, & 30-year treasury bonds. Should they continue to rise, the bears will likely remain in control. With market-moving economic news before the open, futures are trying to put on a positive face but stay on your toes and be ready for just about anything. Have a wonderful weekend, everyone!
Although the bulls tried to in the premarket to lift bullish spirits, they ran into a roadblock with declining mortgage applications and a substantial miss on Private Payroll’s. Also, those pesky long-term bonds seem to hang in there stubbornly, adding uncertainty. The tech sector suffered the most significant technical damage failing its 50-day average and closing with a lower low that signals a downtrend. With the VIX rising sharply into yesterday’s close, expect price action to remain quite challenging.
Overnight Asian markets sold off strongly across the board, with tech leading the way. European market trade in the red this morning as they closely monitor the long-term bonds. Ahead of more jobless data, the U.S. futures currently suggest a lower open. Still, as we have seen, anything is possible depending on the investor’s reaction as they digest new data. Hold on tight it could be a wild ride.
Economic Calendar
Earnings Calendar
As usual, the number of earning reports ramp-up on Thursday, with a total of more than 100 companies revealing quarterly results. Notable reports include COST, BALY, BJ, AVGO, BURL, CNQ, CHUY, CIEN, FRGI, GPS, GWRE, KR, MIK, SDC, SWBI, & TTC.
News & Technicals’
Yesterday’s premarket bullish ran into a roadblock after learning that mortgage applications stalled and Private Payrolls registered a substantial decline. We spent the rest of the day with whipsawing price action that ultimately left behind bearish price patterns. The biggest concern is the QQQ failure of its day moving average and making a lower low, signaling a downtrend. Apple is now the target of a government antitrust probe in the U.K., adding to the suffering tech sector’s woes. SpaceX made headlines yesterday after a successful rocket landing of a high-altitude test flight. However, after landing, the rocket exploded.
The technical troubles we now see in the tech sector could make it very difficult for the DIA and SPY to gain headway due to the massive weighting that these tech giants hold in the indexes. While the SPY managed to hold at price support, if the QQQ remains under pressure, the big tech has the weight to pull it under. After failing the 50-day average, we can’t rule out the possibility of a 200-day average could be tested, which means another 10% could be shaved off of the QQQ. Today we face another job number with the Weekly Jobless claims and will follow that up with the Employment Situation number before the bell on Friday. With VIX elevated above 26 handles, be prepared for more gaps and whipsaws to challenge a trader’s skill.
