Consumer Inflation

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Consumer Inflation

Focus this morning will turn to the consumer inflation numbers that economists expect to come once again come in hot.  However, the hope is prices have peaked, and the increases will be temporary, as the Fed has suggested.  I must admit to skepticism on that point, but time will tell.  As earnings continue to roll out positively, the DIA and SPY printed more new records while, at the same time, the absolute breadth index fell near a 2-year low.  The 10-year Treasury yields rose three basis points, and the 30-year rallied close to 3 basis points in year morning trading ahead of the CPI report.

Asian markets ended the day with modest gains after a choppy session of trading.  European markets trade green across the board this morning, but gains are modest ahead of the U.S. opening bell.  With a substantial consumer inflation number pending, the U.S. futures suggest a flat mixed open, but that is likely to change dramatically market reacts to the CPI number before the bell. So expect an extra dose of price volatility at the open as traders and investors digest the results.

Economic Calendar

Earnings Calendar

We have 140 companies listed on the Wednesday earnings calendar, with quite a few that are unconfirmed.  Notable reports include AIT, ARRY, BLNK, BMBL, CLOV, EBAY, XONE, FOSL, RIDE, MNKD, NGMS, NIO, PRGO, RXT, RGLD, RPRX, STAF, VRM, & WEN.

News and Technicals’

After passing a 1.2 trillion dollar plan on infrastructure, the Senate passed the framework for another 3.5 trillion spending plan before leaving on summer break.  However, both plans could take weeks, if not months, to make their way through the house. Then, in what is likely the largest cryptocurrency thefts to date, more than $600 million was stolen by hackers.  According to reports, Poly Network disclosed the attack on Twitter, asking them to return the hacked assets.  Yeah, that should work, LOL.  Poly Network is a platform that looks to connect different blockchains so that they work together. Finally, as gas prices rise, the White House will call on OPEC to raise its oil production.  The national average is up about a dollar per gallon on Tuesday at $3.18. 

Today the market will turn its focus to consumer inflation with the latest CPI reading before the bell.  Economists expect the number to come in hot, climbing 0.5% for the month and 5.3% yearly.  Although they expect the prices to have peaked, the big question is whether it’s elevated temporarily as the Fed has suggested.  Unfortunately, economists expect to see continued increases.  While setting new records in the DIA and SPY yesterday, the absolute breadth index registered its lowest low in nearly 2-years.  That said, the index trends remain strongly bullish, with futures mixed as we wait on the CPI number.

Trade Wisely,

Doug

Wait-and-See

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Wait-and-See

While bullish trends dominate in the DIA, SPY, & QQQ, traders and investors appear to be taking a wait-and-see approach. As a result, there is a noticeable decline in volume, and the absolute breadth index continues to diverge, yet the VIX is in decline. So are we waiting on the massive congressional spending bills, or could it be a wait to see if the CPI number on Wednesday is inflationary?  We seem to be building up for a substantial move, but the question is will it be bullish or bearish? So plan your risk carefully as we wait for the decision.

Asian markets mostly rallied overnight, led by the HIS gaining 1.23% even as more pandemic restrictions occur in China.  European markets trade mostly higher with modest gains as pandemic caution lingers and worries of tapering grow. Finally, as earnings results roll out, U.S. futures trade mixed and relatively flat as bulls and bears look for inspiration to break the index consolidation. 

Economic Calendar

Earnings Calendar

We have about 140 companies listed on the Tuesday earnings calendar, but there is a considerable number unconfirmed.  Notable reports include COIN, ARMK, XAIR, CSPR, FTEK, GO, JMIA, MCFE, PAAS, POSH, PSTL, PUBM, SIEN, SGFY, SMCI, SYY, TDG, U, UPST, & WW.

News & Technicals’

China has tightened measures the rapidly increasing infection rates, further dampening investor sentiment toward Chinese stocks. In addition, disruptions in the Chinese economy could also affect global growth.  The Senate plans to vote on the 2700 page trillion-dollar infrastructure bill today and immediately begin efforts to pass another 3.5 trillion dollar package with no Republican support.  The popular by now pay later offerings for online shopping is causing consumer debit and credit card balances to spike, especially for younger consumers.  Analysts warn this trend could be the next hidden source of consumer debt.  While the embattled Governor of New York fights to stay in office, Governor Newsome of Calfornia faces an upcoming Sept. 14th recall election.  The rollout of new pandemic health orders and the massive exodus from to state may pose a real threat to Newsom’s chances of survival.  All the political disruptions could have substantial market impacts as the political theater plays out.

Though trends in the DIA, SPY, and QQQ are very bullish, there seems to be a building uncertainty and a wait-and-see attitude among investors and traders.  Perhaps they are waiting to see if the massive spending bill will pass through congress?  Or maybe, it’s a wait on the inflationary reading on CPI coming out on Wednesday? As a result, the volume has become noticeably lighter, and the Absolute Breadth Index continues to diverge rather dramatically from the index charts.  Technically speaking, the bullish trends look solid, yet a growing number of talking heads warn of a 10 to 20 percent pullback on the way. In addition, the VIX suggests fear is in decline, yet one must wonder if it is displaying some complacency?  As for me, I will stay with the trend, but I continue to reduce my bullish aggressiveness and am ready to act should prices begin to slide south. 

Tread Wisely,

Doug

Infrastructure Bill

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Infrastructure Bill

After setting new records on Friday, we look to have mixed open as we wait for a vote in the Senate on the trillion-dollar infrastructure bill.  Volume on Friday was below average, and the absolute breadth index decline to recent lows, but the VIX indicated declining fear falling below its 50-day average.  With another busy week of earnings and a CPI reading on Wednesday, the recent price volatility will likely stick around, so plan your risk carefully.  Though the IWM remains weak, the trends in the DIA, SPY, and QQQ are very bullish.  So stay with the trend but have a plan should the bears decide to attack due to the lofty valuations. 

Asian market kicked off the week with modest gains as oil prices fell 3%.  European markets trade primarily in the red this morning, keeping an eye on earnings results.  With more than 200 companies reporting and a JOLTS report later this morning, the U.S. futures suggest a mixed open with the Dow in retreat and the Nasdaq pointing to modest gains.  Let the wild earnings rollercoaster ride continue!

Economic Calendar

Earnings Calendar

Although the bulk of market-moving reports are behind us, we still have a busy week of reports with more than 200 listed on the calendar.  DDD, PLNT, APD, AMC, GOLD, BNTX, CBT, ELY, CF, CHGG, CXW, APPS, DISH, EBIX, ELAN, ENR, GLNG, KNDI, QLYS, SGMS, SDC, TTD, TSN, & WKHS.

News & Technicals’

According to reports, the Senate is inching closer to passing the trillion-dollar infrastructure bill.  Debate is now closed, and there is the hopefulness that a vote is forthcoming.  With more hyped-up deals turning into flops, lawsuits against the once-popular SPAC are running into suspect dealmaking questions.  On Sunday, Larry Brilliant, a famed epidemiologist, said that the world is nowhere near the end of the pandemic, with only a small proportion of the world’s population vaccinated.  He suggested that vaccinated people aged 65 with a weakened immune system should get a booster shot right away.  If that’s not gloomy enough, a U.K. report delivered a stark warning on climate change, calling it a code red for humanity.  Treasury yields start the week higher, with the 10-year trading up to 1.292% and 30-year rising to 1.942%

After gapping higher and setting new records in the DIA & SPY, the market mostly chopped the rest of the day as if most traders left for an early weekend after the jobs report. As a result, volume came in lower than average, and the Absolute Breadth Index fell to recent lows to close the week.  However, on a positive note, the VIX finally broke down below its 50-day average.  The bulls remain in control with positive trends in the DIA, SPY, and QQQ, with the IWM remaining the outlier still below its 50-day average.  Though we’re over the hump with market-moving reports, we still have a busy week of earnings to keep the price volatility high.  That said, stay with the trend but have a plan to protect your capital should the bears find a reason to attack.  From these loft valuations, any pullback could be swift and painful. 

Trade Wisely,

Doug

Employment Situation

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This morning it’s all about the Employment Situation Report, and the stakes are high, with the SPY and QQQ setting new record highs.  There is a vast uncertainty among the economist’s estimates ranging from 350,000 to 1.2 million.  The big miss in the ADP number on Wednesday will have traders and investors alike at the edge of their seats because anything is possible.  Past that, we have a lighter day of earnings, and with the majority, market-moving earnings behind us, can this massive bull run continue?  Your guess is as good as mine.

Asian markets closed the week with a mixed lackluster performance.  European markets trade bullishly but very near the flatline as they track earnings, rising infection rates, and economic data. Likewise, though we ended trading yesterday, with a very confident surge of buying the U.S. futures appears less certain this morning, trading with modest gains and losses as we wait on the jobs data. 

Economic Calendar

Earnings Calendar

W have a lighter day on earnings with 135 companies listed on the calendar, but a good number of them are unconfirmed small-cap reports.  Notable reports include CGC, CNK, CRON, DKNG, D, FLR, GCI, GT, MGP, NUAN, NCLH, RUTH & SPB.

News & Technicals’

All eyes are on the Employment Situation numbers this morning, and uncertainty is high, with estimates ranging from 350,000 to 1.2 million.  Economists polled by Dow Jones have the number at 845,000, while Econoday’s consensus is 900,000 nonfarm payrolls.  The big miss on the ADP private payrolls and the fact the market is at record highs raises the stakes.  As we wait for the data, Treasury Yields moved higher this morning, with the 10-year trading at 1.236% and the 30-year rising to 1.879%.  The Chinese government-imposed restrictions on tech giants and sectors such as education.  According to Charles Li, the former CEO of Hong Kong Exchange, companies need to get used to the pace of reforms. So beware if you trade in Chinese issues!  The concern is growing that the rising infection rates of nearly 94,000 on a 7-day average will slow the economy as some states consider vaccination passports to enter public spaces such as restaurants, health clubs, theaters etc… 

On the technical front, indexes put on a brave face ahead of the employment data setting new record highs in the SPY and QQQ surging into the close of the day.  The question to be answered is that confidence will hold up after the number at 8:30 AM Eastern?  Economist estimates are all over the place, so get ready for just about anything.  We could have a wildly bullish day if the numbers come in strong, or we could have set an enormous bull trap should they disappoint.  Though we still have a lot of earnings in the coming weeks, the vast majority of market-moving reports will be behind us, and hopefully, the wild price gyrations subside as well.  However, I would not hold my breath with the VIX holding will off its lows as the market sets new record highs.  Volatility could be here to stay, particularly if the market stumbles. So let’s get ready to rumble!

Trade Wisely,

Doug

Slowing Recovery?

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Slowing Recovery

With a huge miss on the private payrolls number, worries of a slowing recovery added more price volatility and once again raised the bar of uncertainty.  Though the DIA and IWM show a bit of strain looking at the SPY and QQQ, one could assume jobs no longer holding within striking distance of new records. So is this constant push of bullishness warranted, or do we see a dangerous level of complacency starting to develop?  Expect the challenging price action to continue with a massive day of earnings data and jobless claims before the open.

During the night, Asian markets traded mixed but mostly lower as the Chinese online gaming stocks continued to experience selling pressure.  European market trade with modest gains and losses this morning as they wait on the Bank of England.  As earnings roll out, U.S. futures point to a modestly bullish open with the recently problematic jobless claims number just around the corner.  As you plan forward, remember the Employment Situation number before the bell on Friday.

Economic Calendar

Earnings Calendar

We have our busiest earnings calendar of the week with more the 375 companies reporting.  Notable reports include AMRN, AIG, BYND, CAH, CVNA, LNG, ED, CTVA, DIN, DBX, DUK, LOCO, EVRG, EXPD, FEYE, FSR, FNKO, GPRO, GRPN, HBI, ILMN, IFF, K, MRNA, NVO, PZZA, PRTY, PENN, SEAS, SHAK, SFM, STWD, STOR, SWCH, TRIP, OLED, VIAB, SPCE, W, WOW, YELP, YETI, ZG, & ZNGA.

News & Technicals’

Today the President will announce a new national target for electric vehicles to make up 40% to 50% of all new vehicle sales by 2020. However, some EV manufactures suggest such rapid adoption faces significant hurdles such as charging infrastructure, vehicle costs, and consumer adoption.  According to Sean Yokota of the SEB, stocks are headed into a correction and says Japanese markets could be among the hardest hit as the country strains to contain the spread of the delta variant.  In an attempt to attract workers, Target will offer 100% of college tuition and textbooks for associate and undergraduate degrees in business-related subjects.  Walmart, Chipotle, and Starbucks offer similar education programs.  Treasury yields edged higher this morning, with the 10-year trading up to 1.194% and the 30-year advancing to 1.845%.

The wild volatility continued yesterday as slowing recovery worries grew after the huge miss in the number of private payrolls.  That said, the SPY and QQQ remain remarkably resilient as if to say jobs no longer matter with the indexes within striking distance of new record highs. However, the consistent bullish pressure could also point to a dangerous complacency building in the market. So please don’t bother me with details and get out of my way because I want to buy something!  Today is the busiest day of earnings report this season, and with jobless claims before the bell, traders should plan for the price volatility to continue.  Remember to plan your risk carefully with the market-moving Employment Situation number before the market opens on Friday.  Hang on tight as this data-driven rollercoaster ride continues.

Trade Wisely,

Doug

Wild Price Action

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Wild Price Action

The wild price action continued yesterday with a massive whipsaw the managed to squeak out the 42nd record high for the year in the SP-500.  With a massive number of earnings reports in the pipeline for the end of the week and jobs data, we should prepare for the price volatility to continue.  With the blessing of the President, the CDC added two more months to the eviction moratorium even though the courts have ruled they do not wield power to do so. So hold on tight; the wild ride is likely to continue the rest of the week.

Asian markets traded mixed but mostly higher as a private survey showed growth in Chinese service activity though there is another infection concern in the Wuhan province.  European indexes trade modestly higher this morning as they cautiously trade earnings results.  However, with an earnings deluge and a pending ADP report, U.S. futures currently trade mixed to slightly lower. Still, the truth is anything is possible by the open, so buckle up the wild ride is about to take another lap.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have a big day with nearly 290 companies reporting.  Notable reports include ETSY, ALB, ALL, ABC, APO, BKNG, BOOT, BWA, CVS, EA, ETR, EXC, FSLY, TWNK, HUBS, IAC, JACK, KHC, LMND, LL, MRO, MBI, MCK, MTOR, MET, MGM, NUS, PBR, DOC, QRVO, RYN, ROKU, RCL, RGR, TM, UBER, VMC, WDC, & WU.

News & Technicals’

Though the courts say the CDC does not have the authority, they went ahead with a new eviction ban with the blessing of the President through October 3rd.  The President said the legal challenge would allow time to distribute funds.  In other news, Biden called on Cuomo to resign after the state Attorney confirmed multiple accounts of sexual harassment.  However, Cuomo refuses to resign, so it will now be up to the state assembly to impeach or remove him from office.  Yellen to support the next multi-trillion-dollar spending plan, saying she believe its necessary to remain as the world’s pre-eminent economic power.  Hmm, piling on more debt helps us to remain a superpower?  Treasury yields rise slightly this morning, with the 10-year trading at 1.182% and the 30-year advancing to 1.854% as we wait on the private payroll number.

With a last-minute surge, the SP-500 squeaked out its 42nd new record to close another wild day of price action.  After gapping up, sellers pushed the Dow down, breaking the consolidation support only to reverse in a volatile whipsaw that not only recovered the loss but tacked on another 200 points to boot.  Such price volatility is excellent for intraday traders but very frustrating for swing and position traders who cannot matain an edge with huge price reversals of the last couple of days.  For the rest of the week, markets will have jobs data to digest, along with a deluge of earnings reports.  We begin with the ADP private payrolls number before the bell today, followed by Jobless Claims on Thursday and the Employment Situation on Friday morning.  I suspect the wild price action is likely to stay with us through the rest of the week. So fasten your seatbelt tightly and plan your risk carefully.

Trade Wisely,

Doug

Nasty Whipsaw

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Nasty Whipsaw

Gapping up to kickoff the typically volatile August market, the nasty whipsaw that followed may have woke the mean monster of uncertainty. Of course, with the VIX rising and the Absolute Breadth Index falling with more than 700 earnings reports and lots of jobs data yet to digest, a little uncertainty is understandable.  Plan your risk carefully because these big price swings can chop an account to pieces as the market searches for direction from this consolidation.

Overnight Asian markets tumbled with the Chinese government saying online gaming was opium for the mind.  However, European markets sport modest gains across the board fueled by positive earnings results.  With jobs data just around the corner and a slew of earnings reports rolling out U.S. futures, attempt to reverse yesterday’s selling, pointing to a substantial bullish gap-up.  Hold on tight as the wild ride continues.

Economic Calendar

Earnings Calendar

We have a busy day on the Tuesday earnings calendar with more than 200 companies stepping up to reports quarterly results.  Notable reports include ATVI, AKAM, BABA, AMGN, ARNC, CAR, BHC, APRN, BP, CLX, CZR, COP, DISCA, DD, ETN, EXPD, BEN, HSIC, HLF, HST, H, KTOS, LYV, LYFT, MAR, MTCH, MCHP, NKLA, PSX, RL, SEE, SEDG, SRC, SPWR, VVNT, WLTW, & UAA.

New & Technicals’

Western and China’s Henan province, which is significant transport hubs grapple with the aftermath of a devastating flood likely to trigger another shipping crisis.  Supply chain software firm E@open said there would probably be fewer smaller discounts during the peak Black Friday sales.  CNBC’s Jim Carmer says it is the height of irresponsibility to invest in Chinese stock right now and urged investors to stay away.  Europe’s recovery could be derailed due to pandemic fears.  According to reports, 40% of U.K. consumers are not comfortable taking vacations abroad or going to large public gathers such as sports or music events. The White House and the Congress are engaged in a game of hot potato over who’s responsible for allowing the federal eviction moratorium to expire after the CDC director could not find legal authority to extend.  Let the finger-pointing and blame game begin!

Yesterday’s nasty whipsaw and rising VIX likely planted some seeds of uncertainty yesterday, but once again, the overnight session has found reason to bounce.  The bearish engulfing candles left behind in the DIA, SPY, and IWM will only be valid if they follow through to the downside, and the overnight push is trying to ensure that is not going to happen.  As I mentioned yesterday, August is typically volatile but toss in supply chain challenges, fears of slowing growth, and the rising infection rates and uncertainty begins to raise its ugly head.  Markets hate uncertainty!  With possible market-moving jobs data later this week and over 700 earnings reports to digest, expect the wild price action to continue. 

Trade Wisely,

Doug

Resting Consolidation

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Resting Consolidation

Though we had a little pushing and shoving in the price action last week, the resting consolidation in the DIA, SPY, and QQQ was technically healthy after such a wild selloff and recovery. With three indexes within striking distance of new records, traders and investors will focus on jobs data this week, and we may experience some choppy price action as we wait. First, however, we begin the week with some key inflation data with the PMI report this morning.  With about 2/3rds of the SP-500 reporting this week, there will be a lot of data for the market digest.  So plan carefully and be ready for just about anything.

Asian markets began the month green across the board, with the SHANGHAI leading the way up 1.97% at the close.  European markets are trade mixed with modest gains and losses this morning.  As earnings roll out and facing PMI and ISM numbers, U.S. futures point to bullish open to kick off this busy week of earnings and jobs data.

Economic Calendar

Earnings Calendar

To begin the first trading week in August, we have nearly 100 companies stepping up to report.  Notable reports include ALX, ANET, CVI, FANG, EMN, RACE, GAIA, GPN, GPRE, HSBC, IPI, L, MOS, NXPI, OHI, ON, OTTR, PXD, O, SPG, TTWO. TSEM, RIG, & WMB.

News & Technicals’

Federal unemployment programs that have paid jobless benefits since March 2020 end September 6th.  At this point, Congress does not appear willing to extend them again.  The U. S. Senate on Sunday finalized the text for its 2700 page $1 trillion infrastructure bill.  Treasury yields rise this morning ahead of PMI data, with the 10-year trading at 1.242% and the 30-year advancing to 1.916%.  The reopening of hospitality services using vaccine passes has drawn criticism due to the rising infection rates.  Though the steel demand is on the rise, the Chinese government is likely to lower the production in the second half of the year, dropping it below 2020 levels.

The resting consolidation over the last week in the DIA, SPY, and QQQ held above support levels, though we did have some modest pushing and shoving by the bears.  As we begin the typically choppy August, all but the IWM are within striking distance of new record highs.  However, the Friday Employment Situation number will be critical if the market is to continue its advance.  Though the premarket activity suggests a bullish open, keep a close eye on the consolidation resistance because we may experience choppy price action as we wait on all the jobs data later this week.  Stay with the bullish trend but once again avoid overtrading and remain flexible should the bears find a reason to attack.

Trade Wisely,

Doug

Briefly touched the sky.

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Briefly touched the sky

Shrugging off the GDP and jobless claims, miss the DIA and SPY briefly touched the sky, printing new records but was unable to hold there into the close.  Amazon reported another $100 billion quarter but missed expectations and guided lower slipping more than 200 points after the bell.  Though the futures suggest a little selling pressure, this morning, anything is possible as we digest more than 125 earnings reports and react to Employment cost and Personal income data before the open. 

Asian markets had a rough night closing in the red across the board, led by the NIKKEI falling 1.80%.  European markets are also retreating this morning, seeing red across the board as earnings roll out.  Ahead of another big day of data, the U.S. futures point to a lower open, with the NASDAQ leading the way down 1% after the AMZN miss. 

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we finish the week with more than 125 companies reporting.  Notable reports include ABBV, BLMN, BAH, COG, CPRI, CAT, CBOE, CERN, CVX, CL, XOM, HUN, ITW, JCI, LIN, LYB, NWL, PG, QSR, VFC, WPC, GWW & WY.

News & Technicals’

Amazon gave a weaker-than-expected outlook for the third quarter.  Sales topped $100 billion for the 3rd quarter in a row but missed expectations and look to open more than 200 points lower this morning.  Tesla has agreed to pay $1.5 million to settle claims that one of the company’s updates temporarily limited maximum battery charging, paying owners $625 each.  The company also suffered a setback after a Tesla Megapack battery ignited in  Australia’s Victoria State.  The 19-member Eurozone economy grew by 2% in the three months ending in June, reporting an annual inflation projection to reach 2.2%.  Treasury yields are pulling back again this morning, with the 10-year falling to 1.247% and the 30-year dipping to 1.904% ahead of the June personal consumption index and employment cost index numbers.

Both the DIA and SPY briefly touched the sky, printing new record highs before slipping back before the close.  Though there appears to be a little selling pressure in the futures this morning, the DIA, SPY, and QQQ remain in bullish patterns.  A substantial miss on yesterdays GDP and jobless numbers topping expectations didn’t seem to bother the bulls at all as they continued to charge higher.  The China tech crackdown is also not slowing down the bullish activity, with CNBC reporting $3.6 billion flowing into the stocks in a week ending Wednesday.  The buy the dip crowd is still working hard.  The only index suffering technical damage is the IWM, still lingering below its 50-day average though well-off recent lows.  As we wind down the week, I will once again repeat; stay with the trend, avoid overtrading, and have a plan to protect your capital should the market stumble from these lofty valuations.

Trade Wisely,

Doug

Infrastructure Plan

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The Fed stands pat, the Senate advanced the $550 billion infrastructure plan, and Facebook posts blowout earnings but looks ahead for growth to slow. As a result, the SPY and QQQ are within striking distance of new records, and though the DIA left behind a bearish engulfing candle, the overall price pattern remains bullish.  With a huge round of earnings, GDP, and Jobless claims coming our way, there is a lot of data to digest, and the potential for volatile prices continues.  Plan your risk carefully as the bull run continues to extend.

Overnight Asian markets rebounded, led by Hong Kong, surging 3.30% after China backs off on the tech crackdown.  European market advance seeing green across the board after the Fed decision.  U.S. futures reverse overnight lows pointing to a Dow gap up more than 100 points as we wade through earnings data waiting on the GDP and claims. 

Economic Calendar

Earnings Calendar

We have the highest number of earnings reports this week on the Thursday calendar, with more than 225 fessing up to results.  Notable reports include MO, AER, AMZN, bud, MT, AZN, CC, CNX, DECK, FSLR, GILD, HSY, HBAN, KDP, LH, LBTYA, MMP, MLM, MA, MPW, MRK, MSTR, TAP, NOK, NOC, OPK, OSTK, PINS, SPGI, SWKS, SO, STM, SU, TMUS, TWLO, X, VLO, WWW & YUM.

News & Technicals’

The Senate has advanced the $550 billion infrastructure plan targeted into transportation, utilities, and broadband.  The highly anticipated Robinhood IPO kicks off today, with some saying there’s considerable upside potential.  The FOMC moved slightly toward reversing its easy-money policies on Tuesday while keeping the interest rate near zero.  However, Jerome Powell said the committee wants to see more data and may now wait until November to begin tapering.  Facebook tops earnings expectations but warned it expects a significant growth slowdown.  Treasury yields are slightly lower this morning ahead in reaction to the Fed decision, with the 10-year falling to 1.249% and the 30-year dipping to 1.898%.

We saw some choppy price action yesterday, as the DIA, SPY, and QQQ hold very bullish price patterns.  The SPY is easily in striking distance of new record highs, and the QQQ is not far behind despite the lackluster price reactions in the big tech blowout earnings.  The DIA finished the day leaving behind a bearish engulfing candle, but that will only matter if it follows through to the downside today.  That said, Dow futures point to a gap up open of more than 100 points with the premarket pump underway. First, of course, we still have to get past a huge wave of earnings reports, the latest reading on GDP, and Jobless claims.  The GDP has the potential of coming in hot signaling inflation, and of course, jobless numbers missed last week though eventually ignored as the bulls charge forward. So expect the volatile price action to continue as the market digests all the data. 

Trade Wisely,

Doug