1st Quarter Earnings

January 19, 2021 by Doug Campbell

All through the bears made a quick visit last Friday, the bullish trends remain, and according to the futures, the bulls are rested and ready to get back to work this morning.  With the inauguration just around the corner and the ramp-up of 1^st quarter earnings, traders should expect an extra dose of price volatility in the days ahead.  Although the market is very hopeful about the next round of stimulus, make sure you check earnings dates before making trading decisions. With so many stocks looking elevated, a disappointing earnings report could create painful selloffs.  Plan carefully.

Asian markets traded mixed but mostly higher overnight, with the HIS surging 2.70% higher.  European markets trade cautiously this morning, chopping around the flat-line.  However, the bulls seem to be on a mission this morning, pointing to a gap up open ahead of earnings results.  It would be wise to expect an extra dose of volatility as earnings ramp up.

Economic Calendar

Earnings Calendar

We begin to ramp up the 1^st quarter earnings calendar with 20 companies reporting results.  Notable reports include IBKR, NFLX, BAC, SCHW, CMA, GS, HAL, JBHT, LOGI, PETS, STT, & ZION.

New & Technicals’

Last Friday, big bank earnings beat estimates, but they all found a few sellers.  Today we ramp earnings, but futures are currently staging a rally ahead of GS, and BAC reports this morning, with the first big tech report this afternoon coming from NFLX.  With the change in power at the White House just around the corner, it’s possible we could experience a bit of price volatility with lower than usual volumes as the world watches.  Although energy prices have seen a sharp rally recently, the IEA cut their oil demand outlook due to pandemic lockdown restrictions.  Germany has discovered a new virus variant among 35 hospital patients. Though the outgoing Trump administration wants to lift travel ban restrictions, the Biden administration says they will keep Europe and Brasil restrictions in force. 

Although we experienced a little bearish activity last Friday, overall uptrends held as support.  This morning as we return to work after the MLK holiday, the bulls seem ready to resume their march higher, with the Dow futures suggesting a gap up of more than 150 points at that time of writing this report.  BAC beat top-line estimates but fell short of revenue expectations, yet the stock is holding up in premarket trading.  Higher unemployment, weak retail sales have not dampened the spirit of the bulls with the hope of more stimulus on the way, so perhaps earnings can be added to the list of things that don’t matter all that much in this environment.  Keep an eye out for price volatility due to earnings and the transition of power in the Whitehouse.

Trade Wisely,

Doug

Another 1.9 Trillion

January 15, 2021 by Doug Campbell

Another 1.9 Trillion may be on the way soon if President-Elect Biden’s stimulus plan can make it through the congressional gauntlet. Somewhat surprisingly, the market at this point is taking a wait and see attitude as it faces big bank earnings and a full plate of economic data with the potential to create some price volatility.  We have a 3-day weekend with the market closed on Monday for Martin Luther King day, plan according to keeping in mind earnings ramp up next week.

Overnight Asian markets struggled after the U.S. blacklisting of smartphone maker Xiaomi.  European markets trade lower across the board this morning on slower than expected recovery concerns.  Ahead of a big day of earnings and economic data, U.S. futures currently point to lower open the day after the IWM set a new record high.  Buckle up the road ahead could be a bumpy one.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just five verified reports, but they are potentially market-moving.  Notable reports include C, JPM, PNC, & WFC.

News & Technicals’

President-elect Biden revealed his stimulus plan adding another 1.9 Trillion to the 900 Billion passed just last month.  The plan includes raising the federal minimum wage to $15.00 an hour and sending an additional $1400 in direct payments to most Americans.  Big banks will take center stage this morning with reports from C, JPM, PNC & WFC.  The financial sector has enjoyed a tremendous bull run for the last couple of months, so all eyes will be watching.  If that’s not enough, we have a full plate of economic reports that have the potential to add to this morning’s price volatility.  Make sure your checking company reporting dates before buying or selling decisions.  Prices have risen so much in the last few months an earnings miss could see a severe and painful punishment.

The DIA & IWM indexes hit new record levels yesterday, but only the IWM could hold the new ground by the close of the day.  That said, the indexes continue in bullish trends ahead of a big day of data.  Futures point to lower open as I write this report, but traders will have to stay flexible because anything is possible in reaction to all the news.  As you plan your risk into the weekend, it would be wise to remember 1^st quarter earnings ramp up next week, and who knows what kind of political goofiness could crop up affecting market prices with the inauguration of President Biden.  Monday, the market will be closed for Martin Luther King day so enjoy your 3-day weekend!

Trade Wisely,

Doug

Trends Remain Bullish

January 14, 2021 by Doug Campbell

SPY and the QQQ provided some market lift yesterday while the DIA and IWM took a little break.  Index trends remain bullish as officially kickoff the 1^st quarter earnings season hearing from BLK with GS, JPM & C reports Friday morning.  We will get the latest reading on Jobless Claims, Jerome Powell speaks at 12:30 AM Eastern, and President-Elect Biden will reveal his stimulus plan.  These are potentially market-moving events, so stay alert for price volatility as the data is released. 

Asian markets closed mixed but mostly higher as China’s December trade data beat expectations.  Across the pond, European markets trade with modest gains across the board on hopes of U.S stimulus.  U.S. futures trade mixed but mostly higher this morning with the intoxicating smell of freshly printed deficit spending in the air.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have the 1st quarter earnings season’s official kickoff with eight verified reports.  Notable reports include APHA, BLK, TSM, & DAL. 

News & Technicals’

The U.S House has voted to impeach President Trump.  Now the Senate will take up the issue, but according to reports, the trial may not begin until after President Biden’s inauguration.  Airbnb yesterday canceled reservations in the Washington area during the inauguration.  Though a bit choppy, the market managed to push upward, led by the SPY and QQQ, while the DIA and IWM chose to rest, slipping sideways.  We have vaccines back in the news as J&J’s one-shot system is proving safe and generates a promising immune response.  Health officials are hopeful as the new vaccine would greatly simplify the inoculation of the country.  Treasury yields are again on the rise this morning with the expectation of Bidens’ stimulus plan announcement later today. The market loves freshly printed deficit spending, so be prepared for a possible reaction.

Trends remain bullish, with the indexes charts mostly consolidating as we head into the 1^st quarter earnings season.  Blackrock (BLK) will kick off the big bank’s reports today, followed by JPM, GS, and C on Friday.  The financial sector has rallied strongly in anticipation so let’s hope it’s not a buy the rumor sell the news event.  Keep in mind before the market, we get the latest reading on Jobless Claims and have Jerome Powell speaking at 12:30 PM eastern.  Stay alert as big moves up or down remain quite possible.

Trade Wisley,

Doug

Energy Sector Leads.

January 13, 2021 by Doug Campbell

The energy sector was the clear winner yesterday, with the financial sector coming in a close second, helping to set new record highs Russell-2000.  The Dow fell just short of setting new records as the rotation to value stocks continues.  Retail had a very good day as well, surging higher as folks spend their stimulus checks.  However, with high political drama in Washington, traders should prepare for the possibility of price volatility as we near the inauguration of President-elect Biden.  Be prepared if a profit-taking wave begins because the point move down to price supports is substantial.

Asian markets closed mixed but mostly lower as the surge in pandemic cases puts 28 million people in lockdown.  European markets trade cautiously around the flatline, while the U.S. futures seem to take a wait and see approach as the pandemic death toll sets a new daily record and the political drama in Washington unfolds.  It would be wise to prepare for a bumpy ride.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have eight companies fessing up to quarterly results today.  Notable reports include INFO, INFY, SJR, & WIT.

News & Technicals’

Another day and another record high as IWM continues to surge higher, supported by rising energy prices and strong buying in the financial sector.  The bulls pushed hard but fell just short of breaking out to a new record.  Unfortunately, we also set a grim new record of pandemic related death with more than 4300 Americans succumbing to the virus.  China is also under pressure putting 28 million people into lockdown ahead of their lunar holiday.  Facebook has again banned the President from posting to his account until after the inauguration of president-elect Biden.  Though under pressure from Congress, Vise-president Pence has refused to envoke the 25^th Amendment to remove President Trump from power in his last week of office.  However, that is not the answer Congress wants to hear, so they are moving forward with impeachment proceedings in an attempt to remove the President from office.  It will not be a surprise if the political drama in Wahington spills over to the market in the form of price volatility.

Technically there is no doubt the bulls are still in control and that the index trends remain bullish.  That said, the T2122 indicator is warning once again of a short-term extended condition.  The VIX also remains a bit perplexing, closing the day above a 23 handle as new record highs continue.  Stay with the trend but have a plan should a profit-taking wave begin because there is a large point move before finding price supports on the charts. With many charts showing very extended conditions, it’s easy to find parabolic stocks in nearly all market sectors.  Be careful not to chase!

Trade Wisely,

Doug

Bulls win the day.

January 12, 2021 by Doug Campbell

The bears made a brief appearance yesterday to remind us there are some concerns to be aware of, but the bulls, hopeful of more stimulus, won the day defending the early selloff.  Rising treasury rates hint at the possibility of additional price volatility slow the rally of growth names and inspire more attention toward consumer cycles, and value plays as a result.  With the VIX closing above a 24 handle once again testing its 50-day average as resistance, traders will need to stay on their toes.  Swift whipsaws and reversals are possible.

Asian markets closed green across the board even as China moves to lockdown more areas of the country due to surging pandemic numbers.  European markets are mixed and mostly lower this morning as investors focus on virus impacts and turbulent U.S. politics.  That said, the U.S futures are once again on the rise this morning, hovering just below new index records ahead of the jobs opening report.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have just seven confirmed quarterly reports.  Notable reports include ACI & KBH.

News and Technicals’

After a nasty gap down at the open, the bulls went to work defending the selloff pushing the index back up but fell short of fully recovering.  The U.S. House has introduced an article of impeachment with a vote planned for next Tuesday.  I could include a provision to prevent president Trump from holding elected office.  China adds to lock down areas as the virus spikes ahead of the WHO visit intended to investigate the origin of the pandemic. The death toll in the U.S rose above 375,000 as the health care system strains to handle the growing numbers of the infected despite the efforts to vaccinate.  Treasury yields continue to climb, with the 10-year notes hitting 1.156% and the 30-year moving to 1.888% as the market reacts to the president-elect Biden promise of further economic stimulus.  Rising bond rates could signal more volatility ahead for investors.

Yesterday’s bumpy ride ended the day with no discernible technical damage to the index charts.  However, it demonstrate the potential danger of possible swift and substantial moves that could occur should sentiment shift.  It servers as a reminder that to be prepared should the bears have an opportunity to attack.  Although the bulls stepped up and defended the early selloff, the VIX rallied once again to test its 50-day average as resistance.  Closing above a 24 handle as the indexes hover near all-time highs remains a concern and keeping traders a bit on edge and alert to the potential of whipsaws and even the possibility of reversal.  Stay with the trade and remain focused with a plan as the price moves could be substantial.

Trade Wisely,

Doug

2021 begins bullish.

January 11, 2021 by Doug Campbell

After a huge bullish party on the first week of 2021 where bad jobs data didn’t matter, may the futures suggest the market may have to deal with a hangover this morning.  Surging pandemic numbers with California officials reporting a death every 8-minutes on average weighs on investors.  Index trends remain in bullish trends and enjoy price breakout price supports just below.  That said, a 200 point Dow reversal at the open with the VIX still hovering above a 20 handle could become painful if the bears begin to show their teeth.

Overnight Asian markets were mixed but mostly higher.  European markets currently trade in the red across the board, and U.S futures point to a gap down open ahead of a light economic calendar day.  Keep in mind; we officially kick off the 1^st quarter earnings season this week so expect some price volatility and wild morning swings as traders and investors react to the data.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have 11 companies that have confirmed their quarterly results will release today.  Notable reports include CNXC, KRUS & SNX.

News & Technicals’

After a substantial rally on the first week of 2021, the market seems to have turned its attention to pandemic concerns.  According to health officials, California is in crisis mode with hospitals over capicty and an average of one death every eight minutes.  Refrigerated trucks must now be utilized as temporary storage of bodies, and waiting patients line the hallways as the system strains to provide care.  Japan has now identified another variant of the virus, while countries scramble to contain two other contagious variants that have emerged in the U.K. and South Africa.  The 10-year treasury is on the rose above 1.1% following Bidens Friday pledge of more economic stimulus that would be, ‘in the trillions of dollars.”  If that’s not enough political news to give the market heartburn, Congress is moving forward with President Trump’s impeachment process with just a week to go before President Biden takes office. 

Though it seems like there chaos around the world, the U.S. market has had an unbelievable ability to ignore continuing to set records.  The jobs data seems to no longer be necessary as long as the government is willing to deficit spend.  Although that would seem to have a diminishing return over time, stocks have enjoyed a ravenous bull run.  Index’s remain in bullish trends as the VIX continues to hover above a 20 handle.  This morning futures point to a gap down open, but with indexes above price supports and tends, it could be nothing more than a short-term pullback.  Stay with the trend while keeping in mind there could be a substantial risk if the sentiment suddenly shifts.  Don’t overtrade and have a plan should the bears make an appearance.

Trade Wisely,

Doug

No Price Too High?

January 8, 2021 by Doug Campbell

Bulls continue to run, and no price seems too high, setting new records as traders and investors hope for more federal stimulus.  Today we get the latest reading on the Employment Situation, but it may not matter as we saw on Wednesday when private payrolls declined and the market soared.  That said, stay focused and prepared because if a bearish move were to begin, price supports are painfully lower so, have a plan.  Also, keep in mind, this could be a particularly newsy weekend on the political front.

Overnight Asian markets mostly rose, with the NIKKEI soaring 2.36%.  European markets trade higher this morning, and ahead of the Employment Situation report, U.S. futures point to more record highs.  Remember to take some profits after such a steep rally as we head into the weekend.

Economic Calendar

Earnings Calendar

We have had a very light day on the Friday earnings calendar with only one verified report coming from the small-cap company LEDS.

News & Technicals’

The market continued to rally after congress certified the Biden presidency.  In the final days of the Trump administration, there has been a call to invoke the 25^th amendment to remove him from power.  Congress is also threatening the 2^nd impeachment to remove the president.  How these events might impact the market is anyone’s guess.  As of now, the bulls seem very confident the Biden administration will put the printing presses into overdrive, adding additional federal stimulus, resulting in new market records with the Dow more than 1100 points above the Monday low.  Sadly at the same time, the daily death rate from the pandemic also set a new record, topping 4000 for the first time.

A look at the index charts, and there is not much to say other than the bulls remain in control, and no price seems too high as traders and investors rush into already extended stocks.  Today we will get a reading on the Employment Situation.  Consensus suggests job growth declined in December due to pandemic restrictions. Still, I’m not sure that matters in this current environment as we saw on Wednesday with private payrolls falling and the Dow rallied sharply.  The T2122 indicator is once again signaling a short-term overbought condition, and the VIX remains elevated above 20 handles as we continue to push higher.  Stay with the trend and stay focused because a profit-taking pullback has the potential of beginning at any time and could be rather steep with not much for nearby price support.

Trade Wisely,

Doug

Disgraceful Display

January 7, 2021 by Doug Campbell

After a hideous and disgraceful display of politically fueled violence, Congress went back to work to certify the election for our Joe Biden.  Let’s hope this country can now begin to heal.  The bulls are clearly in control with hopes that more government stimulus is on the way under the new administration.  Futures point to a modestly bullish open ahead of our biggest day of earnings this week and an economic calendar that includes a reading on Jobless Claims.

Asian markets closed mixed but mostly higher while China telecom shares plunged after the flip-flopping NYSE delisting decision.  European markets are mostly higher this morning, and the U.S. futures indicate new market records at the open.   Keep in mind before the bell tomorrow; we will get the latest reading  Employment situation number, so plan your risk accordingly.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our most significant day with 21 confirmed reports.  Before the bell, we will hear results from ANGO, AYI, BBBY, CAG, CSVI, HELE, LNN, LW, NTIC, PKE, REVG, SCHN, STZ, WBA, & WEI.  After the bell, ACCD, AEHR, DCT, FC, MU, PSMT, & WDFC.

News & Technicals’

In my opinion, yesterday’s attack on the U.S., the capital, was one of the most shocking and disappointing events as our countrymen disgraced our republic.  As a former military officer, I will pick up my M16 and defend the people’s right to protest.  However, no matter your cause, there is no excuse for violence that puts our fellow countrymen in harm’s way.  There is no excuse for this kind of behavior!  After a very long night session, Congress certified the election for president-elect Joe Biden.  Let’s hope the healing can now begin.   

The bulls were out in force yesterday as it became evident that the Senate would flip after the runoff elections in Georgia, with the market celebrating a hopefulness of more government stimulus.  The DIA and IWM closed at new record highs while the SPY pullback late in the day, losing its hold on an intraday record high.  Trends remain bullish in the DIA, SPY & IWM while the QQQ displays a bit of weakness breaking its short-term uptrend.  This morning, futures point to modest gains, ahead of International trade numbers and the weekly Jobless Claims report.  As you plan forward, keep in mind that we will get the Employment Situation number before the bell on Friday, which is often a market mover.

Trade Wisely,

Doug

Political News

January 6, 2021 by Doug Campbell

Political news out of the Georgia runoff election and the Congressional vote to certify the Biden presidency with efforts to block the process could set off price action fireworks in the market today.  The bulls have defended support levels, but they fell just short of clearing the price resistance above at the close yesterday.  With the VIX remaining elevated, be prepared for some news related price volatility, and don’t forget the FOMC minutes’ release this afternoon.

Overnight Asian markets closed mixed but mostly higher as energy stocks surged following the OPEC action. European markets see green across the board this morning, while the U.S. Futures offer up a mixed bag of results with the Dow higher and the other indexes modestly lower heading into the open.  Stay focused and flexible as anything is possible on this very political new driven day.

Economic Calendar

Earnings Calendar

On the Hump Day earnings calendar, we have nine verified reports.  Before the bell, we will hear from GBX, MSM, RPM, SMPL, & UNF.  After the bell, LNDC, RELL, RGP, & SAR will report.

News & Technicals’

We face an interesting day in the market with a lot of political news that has the potential to move the market.  First, we have the runoff elections that are drawing closer to flip the Senate raising concerns it will clear the deck for higher taxes.  We also Congress try to certify the Biden election win, but a group also moves to block the effort, and protests have already begun.  The 10-year Treasury yield rose above 1% for the first time since March in reaction to current Georgia runoff results, and Bitcoin surged above $35,000 for the first time.  While politics preoccupy the market, the daily death toll hit new records as more than 3800 Americans succumb to the virus.  Sadly, a grisly reminder we may have a long way to go to win this pandemic battle. 

Yesterday’s bullish price action lifted the index charts just enough to challenge price resistance but failed to clear the level by the close.  We should plan for the possibility of price volatility based on the political wrangling in Congress and Georgia. We also have some economic news to keep an eye on, such as releasing the FOMC minutes at 2:00 PM Eastern to create some price action fireworks.  The VIX remains elevated as we attempt to rally, and the Absolute Breadth Index continues to show a concerning decline.  Stay with the bullish trend but stay on your toes should the sentiment quickly shift.

Trade Wisely,

Doug

Reason for Caution

January 5, 2021 by Doug Campbell

Yesterday selling us reminded us that bears still exist and that an overextended market condition can produce quick and painful selloffs.  What happens next could be very important to the short-term future direction of the market.  If the bulls are strong enough to defend yesterday’s lows over the next few days, Monday’s price action will be chalked up to volatility.  However, if the bears show the ability to create a lower low in the next few days, they could gain the upper hand can create technical damage in the index charts.  Expect the Georgia runoff election news to create pice sensitivity over the next 24 hours.

Overnight Asian markets recovered from early losses after the NYSE reversed its Chinese telecom delisting decision.  European markets see modest losses across the board this morning as England goes into a nationwide lockdown.  U.S. futures lose overnight gains turning modestly bearish as we head toward the open with ISM Mfg. Data in focus at 10 AM Eastern. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have twelve companies listed but only one verified report.  Keep an eye on SGH reporting after the bell today.

News & Technicals’

A late afternoon decision by the NYSE reversed their decision to delist three Chinese telecom giants helping the overnight futures trade higher.  Yesterday’s pop and drop price action left behind bearish candle patterns as the market reacted to Iranian military action, the pending Georga Senate runoff election, and surging pandemic concerns.  Although there is a reason for caution heading into the Tuesday open, the bulls fought back, holding on to essential supports such as the psychological Dow 30,000.  Remember, one day does not make a trend, so what happens next will be very important to the market’s short-term direction.  Should the bulls prove strong enough to defend and recover broken trends, yesterday’s selloff could prove to be nothing more than volatility.  However, if the bears can produce a follow-through, lower low in the next few days, they could gain the upper hand. 

News out of Georgia may well create some price sensitivity and volatility today and into tomorrow open.  Plan your risk carefully.  Also, more news such as England going into another pandemic triggered, countrywide lockdown, New York considering making it a crime to avoid vaccination, or the possible addition of more public restrictions could add to the price volatility.  Stay on your toes and be careful not to overtrade in this environment.

Trade Wisely,

Doug