500,000 American Deaths

February 23, 2021 by Doug Campbell

A sad new world record was made yesterday as the U.S.  topped 500,000 American Deaths due to the pandemic.  However, the infection rates are declining, and there may be a light at the end of this very long and grim tunnel.  Facebook struck a deal with Australia to restore service, but the tech sector remains a bit of concern after breaking the bullish trend.  Jerome Powell will testify today, and it seems to have the market a bit on edge this morning, so it may be wise to keep an eye on price action as he speaks today.

Asian markets closed mixed but mostly higher overnight as HSBC topped earnings estimates.  However, European markets are in decline this morning, lead by the DAX trading down over 1% this morning.  The U.S. fluctuated dramatically overnight, but the premarket pump is trying to put on a brave face, currently suggesting a flat open ahead of earnings and the Powell testimony. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 60 companies reporting quarterly results.  Notable reports include AAN, APLE, ARNC, AGR, BMO, BNS, BCO, COG, CHE, CLVS, CSGP, CBRL, DK, FLS, FI, HEI, HD, INTU, JAZZ, LDOS, M, MCFE, MDT, NXST, PXD, RRD, SPT, SQ, TRI, TOL, & UPWK.

News and Technicals’

Yesterday the U.S. hit a grim world record with more than 500,000 American deaths due to pandemic.  The silver lining is that the rate of infections is declining, and vaccine availability is growing around the country.  Facebook struck a deal with Australian news creators and will begin restoring the services it banded just last week.  Apparently, the trending #deletefacebook struck a chord with the company leadership.  Treasury Security Yellen sounded a warning yesterday about the ‘extremely inefficient way to conduct monetary transactions with bitcoin.  She went on to say there remain important questions about the legitimacy and stability of the blockchain and cited dangers that it poses to investors.  Home Depot tops earnings estimates this morning, reporting a 25% surge in sales. However, the stock is not seeing much price benefit from the report in the premarket. 

Tech had a rough day yesterday, even as the DIA managed to squeak out a modest gain on the day.  During the night, futures have fluctuated substantially between gains and losses, with the premarket pump once again lifting price off of overnight lows.  We have a busy day earnings and some Jerome Powell testimony that seems to have the market a little on edge this morning.  The House plans to pass the Biden Covid relief bill this week without a single bi-partisan vote in other political news setting up an interesting test for the newly formed Senate. Expect the Washington spin machine to shift into high gear in the days ahead.  Technically speaking, the SPY and QQQ are beginning to raise some concerns after the selling yesterday.  Stay focused and prepared for anything.

Trade Wisely,

Doug

Will Choppy Price Continue?

February 22, 2021 by Doug Campbell

Will the choppy price action continues this week?  Rising treasury rates and jobless claims coupled with declining housing numbers added some uncertainty to the market condition.  However, the indexes held onto bullish trends and price supports with the hope of big stimulus checks next month.  The QQQ and SPY are the most concerning at the moment, leaving behind dark cloud cover candle patterns that suggest more lows are possible.  A big week of earnings and economic data will keep us on our toes and likely continue price volatility.

Asia markets traded mostly lower overnight after China left the benchmark lending rate unchanged.  European markets trade lower across the board this morning, and U.S. futures point to a bearish open as treasury yields continue to rally.  Buckle up it could be a bumpy ride this morning.

Economic Calendar

Earnings Calendar

We have 38 companies reporting quarterly results this Monday.  Notable reports include AL, ACC, AWR, AU, BCC, CTB, CVI, FANG, DISCA, DISH, EXR, FIVN, DGOT, HTA, LSI, MRO, NHI, NLS, OXY, OKE, PANW, REAL, O, RSG, RCL, RIG, WMB, & ZI.

News & Technicals’

Every day last week started with a gap up open that immediately found sellers directly after.  Overall there was little to no bearishness, just a week of a week choppy consolidating price action raising a little uncertainty.  Higher jobless claims and a significant shift lower in housing as worries of rising rates battled with the expectation of more stimulus.  With treasury yields climbing this morning, the bears show a bit of feistiness this morning, suggesting a lower open.   Following a United Airlines engine failure, Boeing removed 24 777 aircraft from service as the FAA orders inspections.  During the night, China keeps benchmark lending rates unchanged.  After a brutally cold week, Texas residents are suffering once again with enormous energy bills.

Although trends remained bullish last week, choppy price action raised considerable uncertainty.  The QQQ tested and held a key support area, but it looks as if it will gap below it this morning.  Both the SPY and QQQ left behind dark cloud cover candle patterns raising some concern of a possible follow-through as we begin a new week.  Today we have a very light economic calendar, but earnings reports will keep us on our toes.  Though we have some bearishness showing this morning keep in mind with big stimulus checks expected next month, we can’t rule out the possibility of a buy the dip rally.  Stay focused, avoid making rash decisions while waiting to see if the bears have the wherewithal to push on lower.

Trade Wisley,

Doug

Jobless Claims Spook Market

February 19, 2021 by Doug Campbell

Indexes briefly reacted negatively yesterday with jobless claims rising and housing starts declining, suggesting the so-called recovery is struggling.  However, combat that Jannet Yellen came out with a go-big promotion for more stimulus and futures turned bullish this morning.  Today we have a relatively light day on the earnings calendar with readings on PMI and Existing Home Sales after the open.  Though the price action this week suggests some uncertainty, the overall trends remain bullish.  With our next stimulus fix on the way, soon stay with the trend and ride the wave as long as it lasts.

Overnight Asian markets recovered early losses to close with modestly mixed results.  European markets trade cautiously higher this morning, with a focus on earnings.  U.Ss futures recovered from overnight lows, pointing to a modestly bullish open ahead of earnings and economic reports.  Price action remains somewhat choppy, so plan your risk carefully as we slide into the weekend.

Economic Calendar

Earnings Calendar

We have a lighter day on the Friday earnings calendar with just over 40 companies fessing up to quarterly results.  Notable reports include AEE, DE, DTE, ERF, E, MGA, & MGI.

News & Technicals’

The indexes experienced a little selling yesterday, reacting to higher than expected joblessness and a substantial decline in housing starts.  However, this morning futures are trying to shake off the weakening recovery after Janet Yellen pitches for the massive 1.9 trillion stimulus package.  Facebook made the news again, banning thousands of Australian accounts after deciding to block publishers from sharing and viewing news content on its site.  The #deletefacebook hashtag is trending across other social platforms. 

Although the indexes price action has experienced a lot of chop this week, the overall bullish trends continue to hold.  Without question, the economic data has raised some uncertainty. Still, with the market now addicted to newly printed money and the promise its next fix is just around the corner, the economy’s condition no longer seems to matter.  I believe this will end badly in the long run, but for now, all we can do as traders stay with the trend.  That said, we must remain disciplined, avoid overtrading with a fear of missing out and chasing already extended stock prices.  An outsider looking at our index charts would have to assume that the pandemic was the best thing that’s ever happened to our economy!  However, we all know that is not the case.  Stay focused and flexible, sticking to your trading rules, and be prepared should the market stumble.

Trade Wisely,

Doug

Choppy Mixed Bag of Results

February 18, 2021 by Doug Campbell

With a choppy mixed bag of results on Wednesday, the bullish momentum seems to have run into a bit of uncertainty.  The DIA set a new all-time high as it defiantly rallied while SPY, QQQ, and IWM slipped modestly lower.  Today, we have another big day of data coming our way, and although the futures currently point to lower open, anything is possible as the market reacts to the news.  Keep an eye on the GameStop hearing in Congress as it could have market implications and news-related price reactions.

Overnight Asian markets traded mixed but mostly lower, and European markets flip-flop between modest gains and losses this morning.  Ahead of a big day of data that includes Housing Starts, Jobless Claims, and the Philly Fed traders should prepare for just about anything even though futures currently suggest a cautiously lower open.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have more than 100 companies reporting quarterly results.  Notable reports include WMT, BCS, GOLD, BLMN, APRN, COG, CBB, CVA, CS, DBX, FE, FVRR, FTDR, GLPI, GLOB, HL, HRL, HST, IDA, LTC, NEM, OPI, OPK, PLNT, PPL, RXT, SO, TXRH, TTD, TPH, TRIP, VTR, WM, & WST.

News & Technicals’

Futures point to a lower open the day after a choppy mixed bag of results on Wednesday.  The DIA defiantly rallied to a new record high, with SPY, QQQ, and IWM indexes moving marginally lower.  Today Congress will hold a hearing to investigate the short squeeze inspired by the Reddit community.  Robinhood, Citadel, and Reddit CEO’s will testify as well as the Roaring Kitty the turn out hold a securities license and now faces fraud charges from the SEC.  Interactive Brokers chair says the financial system came dangerously close to failure during the GameStop mania.  Facebook has decided to block all news from Australia from being posted on the social platform even as Google reached a revenue-sharing agreement with news creators.  Facebook has also decided it will debunk climate change myths and will be the sole judge of truth.  Who else is getting tired of the truth filter of the all-knowing Facebook!

Though the choppy price action is raising some caution flags, index trends remain bullish.  That said, we seem to have lost some momentum, and a bit of uncertainty has crept into the mix.  Today we have another big day of earnings and economic data that includes Jobless claims.  Currently, futures suggest a lower open, but with so much data coming our way before the bell, traders should prepare for just about anything.

Trade Wisely,

Doug

Rising Bond Rates

February 17, 2021 by Doug Campbell

Rising bond rates created a little uneasiness yesterday, robbing the bullish energy created in the morning gap to new highs.  This morning the rapid decline in mortgage applications due to the rising interest rates may also contribute to futures taking a wait-and-see approach.  We have a big day of earnings and economic reports with PPI and Retail Sales before the bell and the FOMC minutes later this afternoon.  I think it’s fair to say anything is possible with that much data for the market to digest. 

Asian markets traded mixed overnight, with Hong Kong surging more than 1%.  European markets show modest declines across the board as they track rising Treasury yields.  Ahead of a big day of data, the U.S. Futures point to flat but slightly lower open at the time of this report.  However, with a significant day reports, anything is possible. Stay focused and flexible.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have just short of 100 companies reporting quarterly results.  Notable reports include SHOP, ALB, ADI, AXTA, BIDU, SAM, BCOV, FUN, CAKE, CHH, CDE, CONE, ET, EQT, FSLY, GRMN, GPC, GOOD, HVT, HLF, H, IAG, IQ, JACK, MIC, MANT, MRO, NI, OC, PAAS, SNBR, STMP, RGR, SPWR, SKT, TLRY, TWLO, WCN, WING, & WIX.

News & Technicals’

While the DIA made a new record high yesterday, it was not the kind of price action that provided a lot of confidence.  I mentioned being careful of the possibility of a pop and drop pattern after the substantial gap up.  Although we did pullback after the open, there was no technical damage in the price action; in fact, it could have been much worse with the concerns of rising bond yields.  The bitter cold snap highlighted a significant deficiency in the U.S. power grid and exposed a massive deficiency in green energy efforts.  The rolling blackouts affected a large portion of the county, with Texas being the hardest hit from the winter storm.  According to reports, SpaceX raised another $850 million in funding, increasing the company valuation overnight.  The European-based game developer Epic Games filed an antitrust complaint against Apple as the attack on big tech continues.

Trends remain very bullish, but with concerns of rising bond rates, U.S. Futures seem to be taking a wait-and-see approach this morning.  Mortgage applications reported another decline in demand at the fastest pace in months as interest rates rise.  We have a busy economic calendar with PPI and Retail Sales before the bell.  The consensus expects an increase in retail numbers due to the last stimulus checks.  Also, keep in mind the industrial production numbers and the FOMC minutes later this afternoon.  If that’s not enough to create price volatility, toss in about 100 earings reports for the market to digest as well.  Anything is possible, so stay focused on price action.

Trade Wisely,

Doug

Severe Cold

February 16, 2021 by Doug Campbell

While the severe cold is slowing down most of the country, the bulls remain undeterred, with the futures pointing more index records at the open.  Although we have a short market week of trading, we have a week chalked full of earnings and economic reports for traders to digest.  Expect price volatility to remain high as a result.  Be careful chasing the morning record-setting gap with a fear of missing out.  Please make sure we see follow-through buying and not the dreaded pop and drop that we can sometimes experience at market highs.  Stay focused and flexible.

Overnight Asian markets rallied with lead by the HIS up nearly 2% on the day.  However, European markets are trading nearly flat and have fluctuated throughout the morning, seemly concerned about the extending risk rally.  The U.S. Futures don’t share that concern with the bulls charging forward, likely to set new records in the DIA, SPY, and QQQ at the open.  Fasten your seatbelts as the buying frenzy continues.

Economic Calendar

Earnings Calendar

As we begin a short market week, we have about 80 companies stepping up to report quarterly results.  Notable reports include AAP, A, ALX, ACC, AIG, ANDE, AN, CAR, BYD, CLR, DENN, DVN, ECL, ES, EXAS, EXPD, GEO, INVH, LZB, LPX, OXY, PLTR, RNG, TRU, VNO, YNDX & ZTS.

News & Technicals’

As ugly cold snap grips, the country’s oil hits pandemic highs, with rolling blackouts due to the massive demand for power.  However, the cold has not dampened the spirit of the bulls as they pushed sharply higher overnight.  The 30-year Treasury yield is holding above 2%, a level not seen in nearly a year.  Not satisfied with the Trump acquittal, Speaker Pelosi has announced an independent 9/11-style commission on the Capitol riot.  According to reports, Australia will support the proposed media law on Facebook and Google.  The new law would require the media giants to pay for the news created by other agencies.  Google has threatened to turn off its search app in the country should it pass.  Should other countries join in with this tactic, it would have far-reaching impacts on social media. 

Though the market experienced a little price weakness last week, the futures are fired up this morning.  If current prices hold until the open, the DIA, SPY, and QQQ will set new record highs a the open, with a sharp gap-up move.   Trends are decidedly bullish, but I suspect the T2122 indicator will suggest a very extended condition at the open.  Before chasing in with a fear of missing out, let’s make sure we see follow-through buying rather than getting caught in a classic pop a drop price pattern.  We have a busy week of earnings and economic calendar news, so continue to expect wild price volatility while trying to price in the next round of government stimulus.

Trade Wisely,

Doug

3-Day Weekend!

February 12, 2021 by Doug Campbell

Although most of the country will be dealing with cold conditions over this 3-day weekend, I would not rule out the possibility of light and choppy day as traders get way early to extend their time off.  Even though indexes seemed to struggle to hold the bullish momentum, there was little to no fear that accompanied yesterday’s profit-taking.  As we slide into the uncertainty of a long weekend, it would not be odd to see additional profit-taking with traders reducing risk.  As long as index trends and support levels hold banking, some recent gains may be a wise move.

Asian markets we mostly closed to as they celebrate their new year.  European markets trade mixed but mostly flat this morning as they react to the 9.9% economic slump reported in the U.K.  U.S. futures currently suggest a slightly lower open with light earnings and economic calendars.  Plan your risk carefully as we head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just about 40 companies expected to reports quarterly results.  Notable reports include D, ENB, FTS, MCO, NWL, & WPC.

News & Technicals’

Although there was little increase in fear, the indexes seemed to struggle to hold on to the bullish momentum.  Perhaps it was a light recognition that the Jobless claims were higher than expected but, it may have been nothing more than the 3-day weekend and traders heading out early.  The White House secures a deal for more than 200 million more Covid vaccine doses as the public finds it difficult to access the shot.  The United Kingdom reported that its economy contracted by 9.9% in 2020, the worst performance since the Great Frost of 1709.  Yesterday the U.S. reported a deficit expectation of more than 2 Trillion dollars for 2121, not including the 1.9 Trillion stimulus or the college loan forgiveness moving through Congress.  That said, Speaker Pelosi intends to include the 15 dollars per hour Federal minimum wage mandate in the stimulus package.

We have a light day on the earnings calendar with only a Consumer Sentiment report for traders to react to at 10 AM Eastern.  With a 3-day weekend ahead, price action could become relatively light and choppy as traders get away early to enjoy the extra time off.  Recently, something of a rare event in the current market is seeing the U.S. futures pointing to a flat to slightly lower open this morning.  Perhaps a little profit-taking is possible heading into the weekend?  Plan your risk carefully.

Trade Wisely,

Doug

Whipsaw raises caution.

February 11, 2021 by Doug Campbell

A nasty intraday whipsaw likely quickened the pulse of traders and investors yesterday, but by the end of the day, the buying frenzy reengaged to squeak out a new Dow record high.  With a busy day of earnings, a Jobless report before the bell amidst a backdrop of Congressional drama, we should plan for price volatility to continue.  Stay with the trend but be willing to take profits quickly as the indexes stretch out in exuberance for the next round of stimulus.

Overnight Asian markets closed in the green with modest gains heading into the Chinese new year shutdown.  Across the pond, markets trade cautiously bullish this morning, sporting modest gains.  U.S. Futures point to a bullish open but have moderated slightly from the early morning highs.  Plan your risk carefully as we head toward a 3-day weekend.

Economic Calendar

Earnings Calendar

Today we have our busiest day of earnings data for traders to digest this week, with just over 120 companies stepping up to report.  Notable reports include TWOU, AEM, AB, MT, ARES, AZN, ACB, BJRI, BWA, BAM, CC, NET, DDOG, DBA, DLR, DUK, EXPE, FRT, FLO, GRNC, GDDY, HUBS, HII, ILMN, K, KIM, KHC, MAC, TAP, NNN, PEP, POOL, QSR, SSTK, TU, THS, TSN, VRSN, DIS, AUT, & YETI.

News and Technicals’

Once again, the bulls won the day after a nasty intraday whipsaw leaving uncertain candle patterns behind on the index charts, such as the hanging man pattern on the DIA.  However, undaunted the premarket futures point possible record highs as the indexes stretch out with the hope of more stimulus on the way.  Treasury yields fell yesterday after Jerome Powell said the U.S. is a long way from where it needs to be in terms of employment as he painted a gloomy picture of the economy.  That said, the overall market seems to very little concerned about the jobs market or the overall economy as long as the government continues to print debt.  It may be great for the short-term as exuberance pushes us higher, and traders need to stay with the trend capitalizing on the buying frenzy.  Still, traders need to remain on guard for the danger this is likely to create in the long-term.

Trends remain bulls, and index prices are solidly above price support levels. Still, the wild whipsaw experienced yesterday likely quickened traders’ pulse, raising questions about the level of danger that exists.  Today we face more D.C. drama with a boatload of earnings data and Jobless numbers to keep the tensions high and the prices volatile.  The T2122 indicator continues to warn of a short-term overbought condition, so stay focused and willing to take profits quickly should the bears decide to wake up. 

Trade Wisley,

Doug

A little hiatus.

February 10, 2021 by Doug Campbell

With the bulls taking a little hiatus yesterday, we technically broke the six-day rally. Still, with the bears seemingly back in hibernation, the indexes merely drifted sideways the majority of the day.  Both Congressional bodies busy expect some political news volatility as they move forward in the Trump trial and the 1.9 trillion dollar stimulus bill passage.  Facing another big day of earnings data and the CPI numbers before the bell futures markets point to another bullish open.  As we continue to extend the indexes, remember to take some profits.

Asian markets produced another bullish close overnight with modest gain across the board.  However, European markets trade cautiously this morning with flat and mixed results.  U.S. futures with the aroma of freshly printed stimulus money just about the corner, the bulls remain large and in charge. Still, don’t rule out the possibility of some wild price volatility as we digest all the earnings and economic news.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have just short of 100 companies reporting quarterly results.  Notable reports include GM, IRBT, ELY, NLY, ARCC, BHF, BG, CDW, CINF, CME, KO, CXW, EFX, EQIX, EQR, EXEL, HP, IFF, IPG, IQV, KGC, MGM, ORLY, PAYC, PAG, SAVE, STAG, TEVA, TM, UBER, UAA, WU, WH, XPO, ZG, & ZMGA.

News & Technicals’

We broke a six-day rally yesterday with the bulls needing a little hiatus and, the bears showed no teeth as the index drifted mostly sideways.  That said, stock pickers enjoyed nice rallies in more than enough stocks to make for a great trading day.  With Senate occupied by the Trump trail and the House moving forward with the 1.9 Trillion dollar stimulus plan, it may be wise to keep an eye on the political news as it could create some price volatility.  As President Biden pushes for herd immunity, anti-vaccine protesters could derail or delay efforts to combat the pandemic.  The J&J CEO is now suggesting that people may need annual Covid vaccine short for several years.  If true, we have a long way to go before returning to normal in light of virus new variants.  Ugg!

Technically speaking, index trends remain bullish, albeit a little stretched in the short-term, but with another round of stimulus checks around the corner, it could stay that way.  I know there is a lot of talk in the market about the possibility of a significant correction that could begin at any time.  Though that may be correct, as traders, the best we can do is stay with and benefit from the wild enthusiasm as long as it lasts.  However, we should avoid overtrading, chasing already extended stocks, and avoid the greed that often gets in the way of making profits.  Remember, consistently profitable traders must get comfortable with taking profits consistently. 

Trade Wisely,

Doug

Six-Day Winning Streak

February 9, 2021 by Doug Campbell

After a blistering six-day winning streak that lifted the Dow more than 1500 points, futures markets suggest a modest rest at the open today.  Normally we would expect a pullback or, at a minimum, some consolidation after such a robust move.  However, with the market hopeful of another 1.9 trillion-dollar deficit spend, we can’t rule out the possibility that indexes could continue to inflate.  Today begins the Trump impeachment trial, and with a big day of earnings and the Job opening report, we have plenty to inspire substantial price action.  Plan your risk carefully.

Overnight Asian markets closed green across the board with modest gains.  European markets trade with modest declines this morning. U.S. Futures suggest a modestly lower open as the bulls take a little breather after the volatile stampede higher that set record highs in four indexes. 

Economic Calendar

Earnings Calendar

On Tuesday’s earnings calendar, we have 90 companies stepping up to report.  Notable reports include TWTR, CGC, AKAM, CNC, CSCO, CEIX, COTY, DD, ENOH, FISV, FOXA, IT, GLUU, GT, HAIN, HBI, HMC, INCY, J, LYFT, MAT, NRZ, PAA, REYN, SPGI, THC, TRVG, WELL, & YELP.

News & Technicals’

It was a big day for the bulls yesterday, pushing all four indexes to new record highs.  After a six-day winning streak that saw the Dow rally more than 1500 points has the T2122 4-week new high/new low ratio suggesting a short-term overbought condition.  However, with the Democrats intending to pass the 1.9 trillion stimulus package as soon as possible, the market could undoubtedly inflate higher.  According to reports, this will not be a bipartisan effort as the President had suggested.  They also plan to press ahead on a $15 an hour minimum wage despite deficit concerns, have unveiled a one-year plan to send up to $3,600 per child to all households, and proposed a plan to forgive up to $50,000 in student debt.  Today also begins the impeachment trial of former President Trump, so we have a lot of potential political news to move the market this week.

As I write this report, the U.S. futures point to a modest pullback at the open after posting a robust six-day rally as the fear of the Reddit retail frenzy faded.   Index trends are certainly bullish but don’t rule out the possibility of a little rest as we wait for the next stimulus deal.  With so many stocks in an extended condition, it’s a little hard to be a buyer because of the additional risk to a logical stop-loss.  Remember to take some profits and avoid overtrading.  Today we have the Job openings report and a big round of earnings to us on our toes.  Plan your risk carefully.

Trade Wisely,

Doug