Bulls defend Friday’s low.

February 2, 2021 by Doug Campbell

The bulls showed up for work yesterday defending the Friday low, and this morning, ahead of a big round of market-moving earnings reports, they are trying to follow through with another bullish open.  Please pay close attention as we approach overhead resistance and expect wild price action to continue with the VIX remaining elevated above a 30 handle.  Wednesday’s open will depend heavily on how AMZN & GOOGL perform reporting after today’s close, so carefully consider your risk.  Anything is possible!

Asian markets rebounded strongly overnight, with the HSI up 1.23%.  A positive global market sentiment reading also has European markets trading in the green across the board this morning.  Ahead of a big day of potential market-moving earnings reports, the U.S. Futures point to another bullish open to test overhead price resistance levels. 

Economic Calendar

Earnings Calendar

We have another big day of potential market-moving reports with more than 50 companies stepping up with results.  Notable reports include BABA, GOOGL, AMZN, EA, AMCR, AMGN, ATHM, BP, CMG, CB, COP, TCS, ETN, EMR, COM, RACE, FEYE, BEN, GAIN, GL, HOG, HCA, MHO, MPC, MTCH, MCK, MPLX, PFE, PBI, POWI, SIRI, SYY, & UPS.

News & Technicals’

The bulls did a good job defending last Friday’s low but spent a considerable amount of time consolidating in choppy ranges on intraday charts.  Perhaps the major snowstorm on the east coast affected the overall volume.  We still have price resistance levels above to deal will, and with GOOGL & AMZN reporting after the bell today, anything is possible Wednesday morning.  Currently, futures point to a nice bullish open trying to follow through ahead of a big round of morning earnings reports.  GameStop shares fall another 30%, losing more than half of their value in just two days as the Reddit short squeeze begins to fizzle.  However, Robinhood had to raise another $2.4 billion to cover the retail trading frenzy.  What comes next is anyone’s guess, but with the VIX still above a 30 handle, traders will have to remain focused and flexible as the wild ride in price action continues.

It will be interesting to see how the indexes will deal with the price resistance above as market-moving earings roll out.  With the Tech Giants, GOOGL, and AMZN reporting after the bell, the Wednesday open carries the risk of a substantial gap at the open.  The question to be answered is which way, up or down?  Consider your risk carefully as we head into today close.  Keep in mind beginning Job’s data will be in focus the rest of the week, beginning with the ADP on Wednesday, Jobless Claims Thursday, and the Employment Situation number Friday morning. 

Trade Wisely,

Doug

Volatile Price Action

February 1, 2021 by Doug Campbell

Futures reverse from overnight lows, but traders should prepare for very volatile price action with the VIX remaining quite elevated.  Toss on in earnings, economic reports, and the Reddit community’s uncertainty, and anything is possible.  The bears are not likely to give up as easily as they have in the recent past, having broken the long-standing uptrend creating price resistance levels on the index charts.  Big gaps, intraday whipsaws, and overnight reversals are possible, so stay focused and flexible.

Asian markets traded very bullishly overnight, closing green across the board.  European markets are climbing this morning as the U.S. futures rebounded off overnight lows, pointing to a substantial gap up reversal from Friday’s close.  Prepare for another hectic day of price action.

Economic Calendar

Earnings Calendar

As we begin the first trading week of February, we have nearly 40 companies reporting to kickoff the week.  Notable reports include ARE, CBT, CRUS, FN, KRC, NTDOY, NXPI, ON, TMO, & VRTX.

News & Technicals’

The Futures point to a bullish open rebounding off of overnight lows as the wild price volatility continues.  Although the market is hoping for more stimulus, senators present President Biden with a slimmer version of the 1.9 Trillion dollar plan preposed.  While very likely there will be more stimulus on the way, it looks as if this will be Biden’s first major political test and has the potential to create additional market uncertainty.  Silver is in the news this morning as the Reddit traders attempt a short squeeze.  As long as this activity continues, expect price volatility to remain relatively high due to the uncertainty.  An uncertainty that attracts the attention of Congress and the SEC could mean a new flurry of new regulation could be on the way that creates own brand uncertainty for traders and investors to digest.

The long-standing bullish trend broke on the technical front, encouraging the bears to continue the selloff into Friday close creating technical damage to the long-standing bull run.  Now with resistance levels above, the bulls may find it more challenging to regain control.  With a busy week of earings, the Employment Situation number Friday, and the Reddit community creating uncertainty, anything is possible.  The T2122 indicator suggests we are near a short-term oversold condition, but with the VIX elevated, expect a bumpy ride ahead.  Big morning gaps, whipsaws, and overnight reversals are likely to test all traders and investors’ metal.

Trade Wisley,

Doug

What comes next?

January 29, 2021 by Doug Campbell

Although the bulls rushed in to defend price supports, the pullback late in the day left behind more questions than answers.  During the night, futures tested Wednesday lows, and so far, the bulls are defending, but it would be unwise to assume the bears have given up with so many stocks remaining under price resistance levels.  Expect the price action to be challenging, with the VIX remaining elevated despite yesterday’s bullishness. 

Asian markets closed in the red across the board, lead by the NIKKEI falling 1.89%.  European markets trade modestly lower across the board this morning, with worries over the trading mania in GME, AMC, and others continue.  U.S futures currently point to a bearish open though well off their overnight lows ahead of earnings and economic data.  Expect the wild price action to continue, and the market manipulation gains regulatory attention.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have nearly 70 companies fessing up to quarterly results.  Notable reports include CVX, BAH, CAT, CHTR, CHD, CL, LLY, HON, LHX, LYB, PSX, PSXP, ROP, SAP, SYF, TTM, & WY.

News & Technicals’

The bulls charged back yesterday but struggled to hold all the gains reacting to pirce resistance levels by the end of the day.  The market manipulation in GME, AMC, and other heavily shorted stocks is now dominating the news cycle and has gained Congress’s attention.  It may seem as if the little guy has finally found a way to stick it to “the man,” but this will eventually cost us all.  The credibility of the entire market is at stake, and I suspect a new wave of regulation will soon be on the way.  Brokers will have to protect themselves with significantly increased margin requirements, and option prices will necessarily increase due to the risk and wild volatility.  Gamble if you must but also be willing to accept the consequences.

Yesterday’s rally index’s tested the resistance of price action and the break of the uptrend.  While there were stocks all over the market that experienced a surge upward, you will see substantial resistance above.  The question to be answered will the bulls have the energy to push through this resistance, or will the bears gain the strength to defend.  The VIX remains significantly elevated, so traders should expect the wild volatility to continue.  Overnight futures traded bearishly; however, this morning pump has lifted them well off the lows.  Stay focused on price action and remain agile as anything is possible.

Trade Wisely,

Doug

Disappointing Durable Goods

January 28, 2021 by Doug Campbell

A disappointing Durable Goods report brought out the bears yesterday, and they continued their attack after the FOMC decided to take no further action on rates or spending programs.  The wild volatility continued after the close as sellers drove down AAPL, FB, and TSLA after reporting.  With the VIX elevated above 37 handles and a busy day of earnings and economic reports, expect the will prepare for the wild rollercoaster ride to continue today.

Asian markets had a rough session overnight led by the HIS selling off 2.55%.  European markets see red across the board this morning in reaction to the Wall Street plunge.  That said, U.S. futures are trying to put on a brave face this morning, bouncing off overnight lows ahead of another big day of data.  Keep that seatbelt fastened for a bumpy ride.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our busiest day of the week, with nearly 100 companies reporting.  Notable reports include MCD, FLWS, AOS, MO, AAL, CMCSA, DHR, DLB, DOV, DOW, ETH, JBLU, JNPR, MA, MKC, MDLZ, MSCI, MUR, NOC, NUE, PHM, RHI, RCI, SWKS, LUV, SWK, TROW, TSCO, X, VLO, V, WRK, & XEL.

News and Technicals’

The bears went to work yesterday after the disappointing Durable Goods reports and stayed on task into the close after the FOMC decided to stand pat on rates and buying programs.  After the bell, Apple reported a blowout quarter but sold off in the post marekt trading.  Tech giants FB and TSLA also struggled in the post-market trading but look a bit healthier this morning.  Overnight, GME and AMC fluctuated wildly as the speculation short squeeze traders continued to pile into the stocks.  President Biden says they are looking into the situation.  That kind of market attention usually brings rule changes not favorable to traders. 

Yesterday’s selloff spiked the VIX closing at the high of the day above a 37 handle.  Unfortuntually, the T2122 indicator suggests there is still more room to the downside before indicating a short-term oversold condition.  Options traders may particularly find this morning challenging with wide bid/ask spreads and very high priced options due to the volatility.  Facing another big day of earnings and economic data, be prepared for the possibility that the rollercoaster ride is likely to continue. 

Trade Wisely,

Doug

Mixed Bag

January 27, 2021 by Doug Campbell

U.S. futures point to a mixed bag this morning, with the QQQ gapping higher after the strong earnings performance from MSFT, while the Dow points to a substantial gap down.  Although AMD and TXN topped earnings expectations, they indicate a lower this morning.  With a big day of earning and economic data that includes an FOMC announcement, traders should prepare for just about anything to occur in price action.  It would not be a surprise to see more index gaps tomorrow with AAPL, TSLA and FB reported after the bell today. 

Asian markets closed overnight with mixed results after the IMF raised the global economic growth forecast.  However, European markets trade decidedly bearish this morning as they keep an eye on earnings results.  U.S. indexes face a mixed open ahead of a blizzard of market-moving data.  Buckle up it could be a wild ride for the next couple of days.

Economic Calendar

Earnings Calendar

As the number of earnings ramp-up, the Wednesday calendar adds more market-moving tech reports.  Notable reports include TSLA, ABT, AMP, ANTM, AAPL, T, ADP, BX, ADP, BX, BA, EAT, CP, GLW, CREE, CCI, DRE, FB, GD, HES, LRCX, LVS, LEVI, MKTX, NDAQ, NSC, NG, PKG, NOW, SYK, TER, VFC, & WHR.

News & Technicals’

A strong round of tech earnings after the bell sees the QQQ popping higher as MSFT add sales surprised the market.  However, we face a mixed bag of index reactions this morning.  As you would expect, MSFT is indicated sharply higher at the open but, the good vibes seem to stop there with AMD, and TXN indicated lower despite topping expectations.  President Biden orders an additional 200 million doses of vaccine and suggests that things are likely to worsen before getting better.  He went on to say an expectation of half a million deaths by the end of February is possible after yesterday’s death toll topped 4000 once again.  Goldman Sachs CEO David Solomon will see his pay cut by 10 million after the company admitted wrongdoing in the 1Malysia Development Berhad scandal.  That’s roughly 36% of his yearly salary, and, of course, no one will go to jail. 

Today we traders face a blizzard of data beginning with Durable Goods Orders and FOMC Announcement and a huge round of earnings that will include APPL, TSLA & FB after the bell.  Futures are all over the place this morning, with the Dow indicating a gap down of 200 points while QQQ points to a gap higher.  Expect the wild volatility to continue, but don’t be too surprised if price action becomes choppy after the open as we wait for Powell and the highly anticipated reports after the close.  Anything is possible, so stay focused and flexible as the drama unfolds. 

Trade Wisely,

Doug

Whipsaw to start the week.

January 26, 2021 by Doug Campbell

We started the week with a nasty price action whipsaw in the indexes that kicked the VIX briefly above a 26 handle.  Let it serve as a reminder of just how quickly and punishing a market reversal can be when indexes with indexes so elevated as earnings season ramps up.  The bulls ultimately won the day defending price support and trends, but note that the bears are starting to show a bit more aggression as of late.  Today, we will hear from our first tech giant, MSFT, after the bell.  Prepare for the possibility of substantial morning gaps as a result.

Asian markets closed in the red across the board last night, with the HIS retreating 2.55%.  However, the European markets are in bullish mode this morning despite vaccine challenges focused on earnings hopes.  U.S. Futures point to modest gains this morning ahead of earnings and the latest reading on Consumer Confidence at 10 AM Eastern.  Expect price volatility to continue and plan your risk carefully with market-moving reports after the bell and FOMC decision Wednesday afternoon.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we a busy day and dig in the tech giants’ reports after the bell.  Notable reports include SBUX, MSFT, MMM, AMD, ALK, AXP, ADM, CHRW, CNI, COF, CIT, DHI, FFIV, FCX, GE, IVZ, JNJ, LMT, NAVI, NEE, NVS, CAR, PII, PLD, RTX, ROK, TXN, UBS, VZ, & XRX.

News & Technicals’

Yesterday’s market price action delivered a couple of whipsaws, creating some fear with the VIX popping over above 26 but closing the day above a 23 handle.  Today, we a big round of earings that includes the first of the tech giants, MSFT, reporting after the bell.  Traders should prepare for the possibility of substantial overnight gaps or reversals as these market-movers report.  Janet Yellen, confirmed by the Senate, becomes the first woman to lead the U.S. Treasury Department.  The U.S. House delivers the article to impeach former President Trump for a second time in an attempt to bar him from holding office ever again.  The trail begins in early February.  Minnesota confirms the first known U.S. case of the more contagious Covid variant discovered first in Brazil.  A record spike in infections sparks fears of new lockdown restrictions in Dubai, which relies heavily on tourism. 

Though the bears showed some aggression yesterday, the bulls ultimately won the day defending price supports and holding trends.  However, as we ramp up earnings activity, the bearish aggression is worth noting, keeping us focused, flexible, and prepared.  With price to earings valuations so high, an earnings miss is likely to create some punitive price action by the offending stock.  Should one of the tech giants stumble, it could prove painful for the overall market.  Have a plan to protect your capital should a stumble come to pass but until then, stick with the bullish trend but avoid overtrading or chasing already extended stocks.

Trade Wisely,

Doug

Data, Earnings & Economic

January 25, 2021 by Doug Campbell

Between the earnings and economic calendar, traders and investors will have a lot of data to digest this week.  Plan for the considerable price volatility and be prepared for the possibility of overnight reversals with the after the bell giant tech reports with substantial gaps at the open.  With P/E ratios already extended, can companies produce earnings results to support these prices?  We’re about to find out, so stay focused, flexible, and ready for just about anything.

Asian markets traded very bullishly overnight, with the HSI leading the way up a whopping 2.41%.  However, European markets trade in the red across the board, and the U.S. futures that were quite bullish overnight now point to a mixed open.  With so much data coming our way, be prepared for considerable price volatility in reaction earnings and economic news.

Economic Calendar

Earnings Calendar

We have a busy week of earnings that will include market-moving giant tech reports.  Notable reports include AGNC, BRO, CR, ELS, KMB, & STLD.

News & Technicals’

Traders and investors will have a lot of data to digest this week with a busy economic calendar and an earings calendar brimming will market-moving reports.  The futures were quite bullish during the night but have moderated considerably this morning, pointing to flat open.  However, with so much data coming our way, anything is possible.  Treasury yields are falling this morning as investors keep watch on the Biden 1.9 Trillion stimulus plan.   The President restricted travel from the U.K., Brazil, and South Africa to mitigate risk from new virus strains that may be vaccine-resistant.  In another executive action, Biden extended the student loan freeze for another eight months, and new data shows loans in forbearance are risings, adding pressure to the banking sector.

Although we saw a little selling last week, trends remain bullish, though mainly in a choppy consolidation.  The week ahead could prove rather challenging as the market processes a big round of earnings.  With P/E ratios already very extended, can companies produce earnings results that support these elevated prices?  We will soon see, but traders should expect substantial volatility with the possibility of overnight market reversals and opening gaps as a result.  Before making any new trade decision, make sure you’re checking the company’s earnings date as big price moves are possible.  Focused, flexible, and agile traders with well-planned trades that carefully manage risk can do well in this environment.  Buckle up!

Trade Wisely,

Doug

Insipid Price Action

January 22, 2021 by Doug Campbell

Yesterday’s insipid price action and declining volume suggested the market needed a rest after the hard bullish partying earlier this week.  With the futures currently suggesting an overnight gap down at the open today, we are reminded that bears still exist.  Now the question to be answered, do the bears have teeth, or will the dip crowd have the energy to defend trends and price supports as we slide into the weekend?  Recent evidence and hope for another 1.9 trillion stimulus seem to give the bulls the upper hand. 

Asian markets closed in the red across the board, with the HIS leading the way, dropping 1.60%.  European markets retreat as well this morning as the virus spread and economic data damper recovery enthusiasm.  Ahead of earnings and several possible market-morning economic reports, U.S. futures point to a gap down open within bullish index trends.  Prepare for an extra dose of volatility as we head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have 22 companies fessing up to quarterly results.  Notable reports include ALLY, HBAN, KSU, RF, & SLB.

News & Technicals’

While mostly bullish, the market’s price action seemed a bit insipid while still squeaking out new records in the SPY and QQQ.  The energy and financial sectors experienced a notable weakness, while the big tech growth names garnered most the bullish attention.  Whitehouse adviser Dr. Fauci says new data shows vaccines appear to be less effective against some newly identified strains.  President Biden plans to sign more executive orders today but has reportedly come under pressure to scale back his 1.9 Trillion stimulus package.  INTC stock surged just minutes before the close yesterday when an infographic related to the coming earnings report was leaked.  The stock sold off after the bell and the release of the earnings.  The company says it’s investigating the situation.  Have I mentioned, I’m not too fond of earnings and the price manipulation it creates.

Technically speaking, trends remain bullish all-be-it quite stretched with volume declining even as new record highs occurred.  However, this morning futures point to a gap down open, reminding us that bears still exist.  We have a lighter day on the earnings calendar but several possible market-moving economic reports to keep us busy.  As long as overall trends and support hold in this morning’s pullback, this is healthy market price action.  However, it might be a bit painful from this elevated position for those overtrading.  Plan your risk carefully as we head into the weekend.

Trade Wisely,

Doug

Market Celebrated

January 21, 2021 by Doug Campbell

With record highs across the board, the market celebrated strong earning and the administration change in the Whitehouse with the promise of more stimulus on the way.  Though there is a chorus of investment banks suggesting higher market highs are on the way, some are suggesting a euphoric market bubble has formed.  Who’s right?  Your guess is as good as mine.  The best we can do is plan carefully, avoid overtrading and stay with the trend as long as it lasts, but always remembering it will one day end. 

Overnight Asian markets traded mostly higher, and European markets edge higher, keeping an eye on earnings data.  U.S. futures point to a positive open with a busy day of earnings, economic and political news setting the stage for possible volatile price action.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have the biggest day of the week, with 43 companies on the list and 33 confirmed reports.  Notable reports include INTC, BKR, CTXS, CSX, FITB, IBM, ISRG, KEY, MTB, PPG, STX, SIVB, TAL, TRV, & UNP.

News and Technicals’

The market celebrated the strong earnings and President Biden’s inauguration, setting new record highs set in all four indexes.  He signed 17 executive orders yesterday and plans another 10 today addressing pandemic issues.  Dr. Fauci says the U.S. will remain a WHO member and join the global Covid vaccine plan.  Stock futures are once again edging higher this morning, with Godman, Morgan Stanley, and JPMorgan singing in chorus for higher valuation to come.  However, not everyone feels that way, with Jeremy Grantham saying the market is in a bubble with very seldom seen euphoria levels.  As a technical trader, all I can do is stay with the bullish trend until as long as it lasts, carefully planning risk, making sure to follow my trading plan rules, and avoiding overtrading with the existing extending market condition.

Setting new record highs across the board makes it easy to see that the bulls are large and in charge of the market trends.  However, it is also easy to see a very extended market condition that poses a significant risk of a steep selloff that should cause the market to stumble.  Take caution in trading stocks that extend from price supports.  We have a big day earnings and economic data and a boatload of political news that has the potential to create significant price volatility.  Plan carefully.

Trade Wisley,

Doug

Inauguration Day

January 20, 2021 by Doug Campbell

Markets are bullish this Inauguration day as we swear in Joe Biden as the 46^th president of the United States.  Though security is high in Washington D.C., most expect an uneventful transition of power.  However, a light and choppy day of price action is possible after the morning rush of earnings fueled trading with traders distracted by the political festivities.  As your plan your risk forward, keep in mind we have a busy economic calendar Thursday and Friday, not to mention the ramp-up in earnings reports.

Overnight Asian markets traded mixed but mostly higher as shares of Alibaba soar.  European markets cautiously edge higher this morning earnings and inauguration in focus.  U.S. futures point to a bullish open, with NASDAQ leading the pack on the back of the strong NFLX earings.  Stay frosty as the price volatility is likely to ramp with earnings.

Economic Calendar

Earnings Calendar

On the Hump Day earings calendar, we have 25 verified reports fessing up to quarterly results.  Notable reports include AA, ASML, BK, CFG, DFS, FAST, KMI, MS, PG, USB, UAL, & UNH.

News & Technicals’

Coming back from the MLK holiday, the bulls went back to work with energy from earnings reports and hopefulness we will soon get another big round of stimulus.  During confirmation hearings yesterday, Treasury secretary nominee Yellen stated that the country should act big in the next virus package to bolster the economy.  After the bell, Netflix reported a solid quarter surprising and that it is not shrinking away from the challenge that the Disney streaming service provides.  Today we have the inauguration of President Biden and transition of power.  Biden plans to issue executive orders to rejoin the Paris climate accord and revoke the Muslim travel ban on his first day in office.  It will not be a surprise if we see some light and choppy price action after the open with the inauguration ceremony’s political distraction. 

Although the bulls came to work yesterday, they seemed to struggle a bit will overhead resistance.  Perhaps a result of traders extending their holiday.  With the big overnight move in NFLX, the QQQ will be the leader this morning and may well ink a new record high at the open as a result.  The energy and financial sectors continue to fule the IWM higher yesterday, closing the day just short of a new record.  Trends remain bullish, although the T2122 Indicator continues to warn of a short-term overextended condition.  Stay with the trend but don’t become complacent as we stretch out to the upside.

Trade Wisely,

Doug