Futures had a bit of a temper tantrum last night after the
Senate failed to pass the massive stimulus bill. We can expect significant price sensitivity
through-out the day as they legislators scramble to resolve issues and vote
again later today. A passage could trigger
a quick rally, but a failure could really bring out the bears, so keep an eye
to the news as they wrangle party politics.
Asian markets closed mixed but mostly lower as Hong Kong and
Australia saw heavy selling during the night.
European markets continue to tumble with the FTSE down another 3.5% as
the coronavirus continues to ravage the euro block. With tremendous overnight volatility, US futures
point to a substantial gap lower this morning that will test the lows of last
weeks as support. Hang on for another
wild day of price action.
On the Monday earnings calendar, we have over 80 companies stepping
up to report quarterly results today. However,
after looking through the list, I don't see any particularly notable or market-moving
After another volatile evening where the futures briefly dropped
to limit down, they point to a substantial gap down this morning. The massive stimulus bill failed to pass last
night but will try once again today. If passed
or fails to pass, it's likely to be a market-moving event, so keep an eye to
the news as we progress through the day waiting on the vote.
The Olympic committee is under pressure to postpone or cancel
the Summer games hosted in Japan due to the virus concerns. Canada and Australia are the first countries
to announce they will not send athletes should the games move forward as
Last evening the President activated the National Guard in
New York, Californa, and Washington to expedite the moving of medical supplies
and equipment as their outbreaks continue to grow at an exceptional rate.
The QQQ had the best chance of recovering the 500-day
average last week, but on Friday left behind a very disappointing bearish
engulfing candle. This morning the four
major indexes are set to open at or below recent market lows. Although most charts paint a pretty grim picture,
there was an effort by the bulls to defend the week's lows. In a surprise and very bold move, Goldman
upgrades BA suggesting they have enough cash to get through the crisis and that
air travel will return following the crisis.
I assume the Goldman is also anticipating that the government will swoop
in with a considerable bailout for the company in an attempt to prevent massive
We can continue to expect extreme price volatility and
sensitivity to the congressional vote on the stimulus bill. I would not rule out the possibility of a
quick and substantial rally should the bill pass. However, another failure to pass could easily
trigger another sharp selloff that could easily trip circuit breakers. Keep in mind no matter what happens, holding
positions overnight will remain very dangerous due to the overnight swings. I think a V-bottom recovery is unlikely
because we are still weeks if not months away from seeing an improvement in the
war against the outbreak.
A ray of sunshine begins the market day with the first
bullish follow-through open setting up this morning. It's been nearly 2-weeks since
we have seen a positive close followed by an optimistic open the next. That said, expect the wild price volatility
to continue as infections here in the US begin to spike heading into another
Asian markets closed mixed but mostly higher as China holds
steady on its price rates. European
markets are green across the board this morning, reacting to the massive government
stimulus efforts. The US futures point a
positive open ahead of economic and earnings data but expect the price action to
remain very challenging.
On the Friday economic calendar, we have 59 companies reporting. Looking through the list about the only
notable stock I can find today is HIIB.
After another turbulent evening where the US Futures traded
between 350 down and 900 up currently points to positive open of more than 700
points. However, with such volatility in
price, anything is possible by the open.
With virus infections beginning to rise rapidly, the California
Governor ordered that all residents stay home and inside. The first state to issue such an extreme
lockdown order. Italy now has the distinction
of the largest death toll surpassing China as the country calls out the
military to move coffins overwhelming the countries cemetery system. Here in the US, infection estimates could
reach more than 30,000 by next week.
The Senate has proposed a massive spending bill sending
direct payments to US citizens of $1200 per adult and $500 per child, including
billions and billions for company bailouts.
I doubt this will be the last of the backstop measures that will be
required to stabilize the economy.
Although we saw more than a 1200 point swing the in Dow yesterday,
it was nice to see a positive close. As
of now, it looks as if we could get our first bullish follow-through open that
we have seen in 2 weeks of massive overnight reversals. Crossing my fingers and hoping it will hold
at least to the open, the QQQ could recover its 500-day moving average. The technical damage in the charts is so extreme
that even a hold of this week's lows could lift spirits as we head into another
Although there are some fantastic values in stock prices, buying
them in the faces of such volatility and extreme uncertainty is not for the
faint of heart. With the VIX holding above
a 70 handle options are punishingly expensive, and the slippage in the bid/ask
spreads make then nearly impossible to trade except for very quick and very dangerous
day-trades. Let's all hope for the best but
prepare for the wild price action to continue in the coming weeks as impacts of
the outbreak continue to expand. Protect
your capital, take care of your family, and support your communities as best
you can through these troubling times.
I had a computer problem this morning, so I apologize, but I
will have to keep the blog short this morning.
After another wild night of price action in the futures market, it would
appear sellers still have the upper hand this morning. Even the so-call safe-haven securities sold
off yesterday in a rush to raise cash and avoid additional market risk. During the night, the ECB unveiled a massive stimulus
plan of more than 800 billion with the President signed the first stimulus package
for the US almost immediately after the Senate passage. They are now going to work on the second
package that could top 1.2 trillion with direct payments to US citizens. Monday, tradings pits will close, and we will
move to a fully electronically traded market. It's unclear how that might affect price
With infections numbers continuing to grow, we could easily
see more than 10,000 cases by the weekend, which would suggest and exceptional
expansion is likely to occur over the next 2-weeks. I know I sound like a broken record but Protect
Your Capital because the uncertainty going forward is expected to get much
worse before it gets better. More
importantly, protect yourself and your family.
The next few weeks could be difficult, but I'm confident better days lie
We have more than 120 companies reporting earnings today,
but in the current situation, it's unlikely many will notice. Notable reports include DRI, LEN, CAN, CTSAS
As violent price gyrations continue, so does the extreme
danger for retail traders. Although we
have had several big one day rallies, we have yet to see the bulls able to
follow-through the next day. Instead was
we see is overnight reversal ripping the heart out of traders that tried to
hold positions just one more day. This morning
is a repeating that pattern once again with US Futures limit down wiping out
most if not all of yesterday's hopefulness.
Asian markets seesawed back and forth overnight, finally
closing the day lower across the board.
European markets are sharply lower this morning with the DAX, FTSE,
& CAC, all showing losses fo more than 5%.
Ahead of a Housing Starts number and 60 earings report Dow futures to point
to an overnight reversal of more than 800 points, and fear and uncertainty continue
to drive extreme price volatility.
Prepare for another wild day.
On the hump day earings calendar, we have about 60 companies
reporting results. Notable reports
include GIS, FIVE, GES, HABT, TLRD, TCOM, & WSM.
Biden swept three primary elections last night as he doubles
the delegate lead over Sanders can drawing closer to clinching the Democratic
nomination. President Trump has now won
enough delegates to lead the Republican party in the 2020 election.
After a day of rally closing the Dow up more than 1000
points, futures now point to an overnight reversal wiping out the gains waiting
on yet another government bailout proposal to be passed. Munchin reportedly warns senators the impacts
of the virus could lead to a 20% US unemployment rate as a business shutdown
responding to CDC recommendations.
The Vegas strip is quiet for the first time since the
Kennedy assassination as all gaming in the state was ordered to shut down. Kansas schools have closed public schools for
the rest of the year! The first such state
to make such a drastic decision.
Yesterday's relief rally was a nice change to the extreme
selling pressure, but sadly it looks as if a second day of follow-through is too
much to ask for amid such wild volatility.
After another wild night of price, action futures reached another limit
down trading halt. The QQQ rally moved
up to test the resistance of its 500-day average, but sadly the overnight
reversal will wipe out almost all of yesterday's hopeful gains at the open.
With the VIX closing, the day above a 75 handle, and a likely
sharp move higher this morning options, prices will remain very dangerous and
virtually untradeable. While there are
some tempting values in stock prices, the volatility requires a tremendous tolerance
for risk that few retail traders are willing to ride out. The best course of action for most is to
continue to remain disciplined to your trading plan and protect your capital while
market prices continue to gyrate violently.
It would appear attempting to buy our way out of this
current crisis is not going to work after the massive move of the FOMC did
little to dissuade the bears in the face of such uncertainty. I would like to assume the worst is over, but
with the US just now beginning the process of a shutdown, the path forward is
more uncertain than ever. Long and short
trader getting involved in this will volatility with have to have considerable
tolerance for risk with the VIX now above the 2008 high. It would seem the best course of action for
most retail traders is to remain on the sidelines protecting their capital
until we begin to see some improvement.
Asian markets closed mixed with Australia surging nearly 6% overnight. Unfortunately, European markets are still
feeling some selling pressure this morning as they are modestly lower across the
board. After a wild night of volatility
in the futures markets, point to a little bullishness at the open. With a big day of earnings, economic data, and
uncertainty, anything remains possible.
On the Tuesday earnings calendar, we have 60 companies reporting
quarterly results. Notable reports
include FDX, FLR, HDS, LE, & MIK.
With more than 4200 confirmed cases and over 70 deaths, the
CDC has recommended restricting gatherings to less than ten people in an attempt
to slow the spread. Many states have now
recommended closing bars, restaurants, night clubs, fitness facilities, and
schools until further notice. Small
business impacts are tremendous.
The Feds surprise rate cut and massive cash injection increased
the fear of the unknown lifting the VIX-X above the 2008 highs and creating the
worst one-day selloff since 1987. All 11
sectors of the S&P were down on the day, but there were some bright spots amongst
the carnage, such as KR and CLX.
Airlines have already asked the government for a 50 billion
dollar bailout, and I’m guessing there will be many more industries to follow
as the impacts on business grows. The
virus is now impacting the Presidential election, with Ohio closing its primary
Overnight futures came close to a limit up rally, but during
the night gave back most of the move in another display of incredibly dangerous
When looking at the charts, there is very little to see but tremendous
technical damage. One would hope that
yesterday was the final capitulation, but with much of the country right at the
beginning of its shutdown, the path forward seems more uncertain than ever. With such incredible price volatility, stock
traders attempting to pick up the deeply discounted stocks will have a
substantial tolerance to risk and willing to hold through the huge overnight reversal
and steep intra-day swings. With implied
volatility so high option traders face incredibly inflated contract prices, as
well as punishing bid/, ask spreads making it extremely dangerous to trade. Until there is some improvement, it is hazardous
to consider being long or short. Staying
in cash on the sidelines, protecting your capital continues to be the most reasonable
course of action the majority of traders consider.
From record market highs to bailout conditions in less than
a month! Oh, how the tables have turned by
a microscopic virus wreaking havoc around the world. A punishing day that saw heaving selling in
every sector of the market, and a barrage of bad news that points massive economic
impacts in the weeks and months to come.
With so much uncertainty facing the market, anything is possible, and it
seems government money can't buy back investor confidence facing a pandemic.
Asian markets finished the week in the red, with Japan closing
more than 6% lower on the day. European markets
are in bounce mode this morning, rallying more than 5%. After a very turbulent night, US Future now
points to a Dow gap up of more than 1000 points as this will price action rollercoaster
ride heads into the uncertainty of the weekend.
Plan your risk carefully because anythings possible by Monday morning!
On the Friday earnings calendar, we have just short of 70
companies reporting quarterly results.
Notable reports include BKE & GOGO.
Another rough market day triggering circuit breakers with
the Dow suffering the worst one day plunge since 1987 even as the Fed stepped
up with half a trillion dollars. A barrage
of virus news with professional sporting teams suspending seasons and large
venue closures in an attempt to control the virus spread.
Although its Friday the 13th, there is a favorable
breeze blowing in the pre-market after a wild night of price volatility in the
futures markets. Japan sold off sharply
last night, dropping as much as 10% at one point, pushing Dow futures down as
much at 700 points. However, the bulls
have come roaring back with a substantial gap up in prices at the open
today. Cross your fingers that it can
hold heading into a weekend that's not likely to provide better news on the
Index charts, as well as most stock charts, are in an ugly
technical condition. The Dow dropped
like a hot knife through butter closing well below the 2018 low nearly 19% below
its 500-day average. The SP-500 finished
the day just short of 14% below its 500-day with the Nasdaq composite 8.5%
below. The failure in the Russel is epic,
closing more than 28% below its 500-day average. What happens next is anyone's guess, as the
economic impacts of the outbreak continue to compound. Some analysts are suggesting the market could
lose half of its value by the time this is over, and the full measure of
damages totaled. Congress is working on some
kind of relief package, but according to reports, it will be next week before a
vote occurs. The silver lining to all of
this is that great stocks are reaching bargain prices for those willing to hold
through what is likely going a very turbulent market for weeks or even months
to come. As we head into an uncertain
weekend, plan your risk carefully because anything is possible by Monday
With the longest bull run in market history officially over and unprecedented travel restrictions going into place, investors continue to run for the doors. As the markets continue to tumble, expect more forced selling as mutual fund, 401K redemption's and margin calls grow. We are in uncharted waters as the now official pandemic personal, business, and economic impacts create an uncertain path forward. Protect your capital!
Asian markets closed lower across the board as Japan falls into bear a bear market. European markets just one day after a central bank rate cut sees losses of more than 5% this morning. Ahead of a huge day of earnings and economic reports, the US Futures have to trigger their second circuit breaker in a week. Halting trading but pointing to a morning gap down of more than 1200 points. Hold on tight; this will be a bumpy ride today!
On the Thursday earnings calendar, we have our biggest day
this week, with more than 250 companies reporting. Notable reports include DG, AVGO, WORK, ADBE,
CRON, GPS, JBL, ORCL, TLYS, TUP, ULTA, & ZUMZ.
Yesterday the WHO declared a global pandemic as the virus continues to spread around the world. The White House bans travel from most European countries for 30 days in an attempt a slow the spread of the virus.
The NBA suspends the season, and March Madness will happen
with no spectators allowed.
The longest bull run in market history is now officially
over as US markets slump into bear market territory and continuing to slide south.
What’s there to say other than the charts are a mess and
continue to worsen as virus panic grips the market. Although it seemed nearly implausible just a
few days ago that the market would test the 2018 lows this morning that looks
very likely with the Dow pointing to more than 1000 points lower at the
open. While the virus situation could get
much worse, there is a silver lining if we can get past the emotion of the selloff. Eventually, this will be over, and great stocks
will be at bargain-basement prices. The
massive price volatility is currently very dangerous, but given time it will
get better, so protect your capital and be patient.
After an excellent one day rally, it seems the bears have
come back this morning to punish anyone that held long positions overnight with
the US futures another substantial overnight reversal. With the central bank's actions ineffective and
federal government stimulus likely months away, the path forward for the market
is clouded with uncertainty. With US
infections jumping to more than 1000, its evident this outbreak will get much
worse before it gets better, so expect the wild market volatility to continue.
Asian markets close red across the board overnight, but European
markets see only green this morning after the bank of England cut rates by 25
basis points. Ahead of the CPI report
and more than 100 earnings reports Dow futures to point to substantial gap down
wiping out about half of yesterday rally in one fell swoop. Prepare for another wild day of price volatility!
On the Hump day earnings calendar, we have nearly 120 companies
reporting results. Notable results
include TACO, EXPR, HABT, LK, UNFI, VRA, & ZAGG.
Joe Biden takes a commanding lead in the Democratic race for
the President wining in 4 more states last evening.
Italy's infection number cross over 10,000 as the country
mulls the idea of a full country shutdown.
According to the CDC, the US confirmed infections jump over 1000, with
the virus spreading to 30 states. The President
pitched an idea of cutting payroll taxes to 0% for the rest of the year but didn't
hold your breath because stimulus packages commonly take more than
The rally yesterday was great to get a little relief in the
selling. Unfortunately, there is a lot
of work to do before there we will see a significant improvement to the massive
technical damage suffered by stocks and indexes. With the coronavirus numbers growing, federal
stimulus actions having little to no effect, and health officials struggling to
slow the spread of the outbreak, investors remain very uncertain about the path
forward. This morning we face another
overnight reversal with the Dow pointing to gap down of more than 500 points as
this frustrating volatility continues to challenge even the most experienced traders. Sadly, it seems this problem is far from over,
and traders should prepare for another day of wild price action.
There is blood in the street this morning with the virus
news not getting any better and plunge in oil prices that's shaking up currency
markets around the world. During the
night, US futures trading halted as the 5% circuit breaker tripped. Suffice it to say we face a very rough day in
the markets with a huge gap down and the real possibility that more circuit breakers
could trip during the day as investors run for the doors. Expect extreme price volatility and hazardous
market condition in the days ahead.
Asian markets plunged during the night, with Japan falling
over 5% by the close. European markets are
sharply lower this morning with the DAX, FTSE, and CAC all down by more than 6%. US Futures point to a gap of more than 1200
points down as the market grapples with plunging oil prices, currency
fluctuations, and an outbreak continuing to spread uncertainty of economic
impacts. Expect a very rough day!
We have a very light day on the economic calendar with a 3
& 6-month bond auction as well as the TD Ameritrade IMX report at 12:30 PM
Monday begins with just short of 100 companies fessing up to
quarterly results. Notable reports
include CASY, SOHU, SFIX, & MTN.
With OPEC failing to cut a deal with Russia, they have
decided to dump a glut of oil onto the market, driving the prices sharply lower,
punishing Russia for not joining their attempt at price controls. At the opening of the futures market on
Sunday evening, oil price plunged, pulling the overall market down as it
fell. The plunge in oil prices is also
creating substantial currency fluctuations putting central banks between a rock
and a hard place. Cut rates to stimulate
the economy or raise rates to support currency valuation. What a tangled web this has suddenly become. Even the cryptocurrencies are feeling the
pain with $26 billion wiped away in the last 24 hours.
With the futures pointing to massive losses during the night,
a 5% down circuit breaker tripped halting futures trading to prevent them from
falling further. If the selling resumes
during the day, we could trigger more circuit breaker trading halts as
investors run for the doors. A drop of
7% in the SP-500 halts trading for 15 minutes, a decline of 13% will once again
stop trading for 15 minutes. A decline
of 20% will stop trading for the rest of the day.
When it comes to the outbreak news, the spread continues around
the world, and here in the United States as the governor of New York said, it's
like trying to stop air. Long story
short, it will likely get worse in the days and weeks ahead, and the uncertainty
of the economic impacts will continue to worry investors and make the price
very volatile and trading very dangerous in the near term.
The charts are simply a mess due to the very high emotion
and uncertainty the market faces. If circuit
breakers begin to trigger the panic could much worse. You can just imagine the phones ringing off
the hook at mutual funds, 401K plans, and brokerage firms as investors pull the
plug to stop the pain. With the market
gaping the DIA and SPY below their 500-day averages and the QQQ open below its
200-day where this panic selling end is anyone's guess. Hold on tight this could be a very wild week.
The market hates uncertainty, and holy cow do we have a
basket full of the unknown with a spreading outbreak heading into a
weekend. After giving up the Wednesday
rally, markets around the world are selling off this morning as worries of the
mounting economic impacts continue to grow.
To say the price action volatility is challenging is a gross
understatement of the danger this market presents. Unless the wave bad virus news suddenly
shifts this weekend, we should plan for more wild and unpredictable price swings
Asian markets closed the week in the red across the board. European markets are down more than 3% this morning as traders run for the door leading into the weekend. Ahead of expected bullish Employment Report, US Futures point to dismal gap down of more than 600 points as worries virus economic impacts continue to inspire the bears.
On the Calendar
On the Friday earings calendar, we have our lightest day
this week with just 29 companies reporting.
Looking through the list, I see particularly notable reports.
As the virus fears continue to grow the 10-year Treasury yield,
hit a new record low of 0.7% as investors run to safety. On the bright side and 30-year mortgage rates
dip to 3.3% that may help home sales and inspire a round of refinancing to keep
On the Virus front, South Korea infections have grown to 6600. In Iran, there were more than 1000 new infections, and their death toll has risen to 124. Australia shut down its first school the Netherlands confirms its first death, Vatican City reported its first case of the virus as confirmed infections in Italy rise above 3000. China invokes 'force majeure,' a provision that exempts business form contractual obligations. According to reports, the government has issued nearly 5000 such certificates as of March 3 due to the epidemic.
As oil demand continues to drop, OPEC is trying to get
approval for the most significant oil supply cut since the 2008 banking
crisis. Russia, to this point, has not
endorsed the proposal.
The DIA managed to hold on to its 500- day average at the
close yesterday, but the SPY once again failed to hold on to its 200-day. After yesterday's overnight reversal, Wednesday's
big rally was wiped out as the spreading virus continues to worry
investors. Now the concern is, will the
indexes retest last week's lows, and if so, will the lows hold as support? Only time will tell, but one thing for sure
is that is is a hazardous market condition as it tries to come to grips with
As we head into an uncertain weekend, US Futures point to another
huge gap down as the extreme volatility makes it very challenging and dangerous
to trade. Although analysts expect to
get a good jobs number this morning virus fears are likely to rule the
day. As confirmed cases grow around the
world, fear of what comes next here is the US will likely get much worse before
it gets better. No matter your level of
trading experience, it will be tough to protect your capital if you choose to hold
positions into the weekend. With that in
mind, we should not be surprised to see another rough day of selling as traders
go into weekend protection mode. With
the bad news on the virus continuing to increase next week could easily be more
of the same with very volatile price action.
Remember, cash is a position, and protecting your capital during times
like this may prove the very best decision you can make amidst all this uncertainty.