Yesterday was a mixed bag of results in the indexes as vaccine news seems to have lost some of its power to inspire the bulls facing a long winter with more lockdown restrictions likely. However, with the healthcare system bursting at the seams with pandemic patients, Congress feels the pressure to pass a stimulus bill by the end of the week. Could this perhaps inspire a Santa Claus rally, or has is it already baked into the current index prices. Something ponders as you plan your risk facing a hectic week of economic data ahead.
Overnight Asian markets closed in the red across the board, responding to a resurgence of virus concerns. European markets trade cautiously mixed this morning with Brexit talks in focus. Here in the U.S., futures point to an overnight reversal as the bulls gain new energy with high hopes of stimulus money soon on the way.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have a light day. Notable reports include AOUT and NDSN.
News & Technicals’
Yesterday the vaccine news that pushed the markets higher at the open ran out of energy, creating a mixed bag of results in the indexes. The QQQ and IWM managed to rally while the DIA and SPY sold-off as the VIX rallied, showing a little fear. It would seem the vaccine news has now baked in, and the market is beginning to focus on the genuine possibility of more restrictions and lockdowns impacting business. The Electoral College has confirmed Joe Biden as the next President of the United States and ended the Trump administration’s long legal battle. Futures are once again rising with Congress working to pass a stimulus bill by the end of the week. With the U.S. death toll topping 300K and the health care system strained nearing capacity in many parts of the country, Congress feels the growing pressure to respond. The big tech social media giants face hefty fines under new UK rules as the U.S. steps up with substantial antitrust pressure of their own.
Although the DIA and SPY selling was significant, the daily charts remain in bullish trends but signal a bit more caution is warranted. It is still possible that the indexes experience a Santa Claus rally is a stimulus bill does get passed. Still, we should also consider the possibility that stimulus hopes have already been priced into the market. With pandemic lockdown restrictions on the rise and a long winter ahead, the stimulus bill’s passage may well become a sell the news event. Yesterday’s price action points to growing volatility and points to the danger of chasing stocks that are already quite extended. We have a lot of data coming our way in the next few days, so plan your risk carefully and remember to take some profits along the way.
Jobless claims disappointed markets yesterday but having Congress adjourn for the weekend without reaching a stimulus deal appears to be the more significant disappointment this morning. The Whitehouse’s legal battle could also create considerable volatility in the days ahead, depending on how or if the Supreme Court gets involved. The market hates uncertainty, and as we slide into this weekend, considering this historic rally, traders have some tough decisions to make. Capture gains or wait, holding on to hopes for the week ahead. What’s your choice?
Asian markets finished the week with mixed results, but European markets see red across the board as Brexit, and the U.S. stimulus battle continues. The U.S. futures market point to a bearish open that could test index trend supports as traders grapple with the weekend’s uncertainty. It’s been a while since the bears showed much of a willingness to fight but never forget they can attack anytime, so have a plan to protect your capital should they decide to show some teeth.
Economic Calendar
Earnings Calendar
Although we have some very small-cap companies, Friday is a light day of quarterly reports. Looking through the list, I could only come up with one somewhat notable, JOUT.
News & Technicals’
An increase in unemployment has the bears stirring about yesterday, but overall the market was still hoping that Congress would reach a stimulus deal. Instead, Congress passed a single week stopgap spending bill avoiding a government shutdown and then adjourned for the weekend. As a result, the market is showing its disappointment, suggesting a bearish open. Prizer’s Covid vaccine took a big step forward with the FDA’s advisory committee recommendation for emergency use. Now it moves up the ladder looking for a full FDA agency approval. In a move that bucks the overall market love affair with Tesla, Jefferies downgraded the company, suggesting they don’t believe the carmaker can dominate the auto industry. Battleground states urge the Supreme Court to reject Texas efforts to overturn the election results. Seventeen states have joined with Texas setting up an interesting legal battle that could create substantial market shockwaves depending on how the battle progresses.
Although the pullback may be disappointing to many, the T2122 indicator has signaled this possibility for some time. Should the early morning bearishness hold through the open, the short-term trends will receive a test of support. If the bulls have the energy to defend, then there is no harm in taking a little break in the current rally. However, if the bears become emboldened, price support suggests that the pullback could be quite painful. Remember, the market has the propensity to throw a bit of a temper tantrum when they don’t get their stimulus fix. Stay focused and have a plan should the bears decide to show their teeth.
The markets once again took their cues from vaccine news and hopefulness for federal stimulus as the SP-500 topped 3700 for the first time in history and the Nasdaq set its 50th record high for the year. Valuations continue to soar as the overall market P/E Ratio stretches 72% above the 10-year average. The U.S. added 1 million new infections in just 4-days, but that is not slowing down the bull run with a parade of big investment banks predicting a bullish 2021 market. Trade with the trend but have a plan should the sentiment suddenly shift because current market prices are long from technical supports.
Asian markets traded mixed but mostly higher overnight, with the Shanghai down more than 1%. European markets are currently bullish across the board this morning, with Brexit talks in focus. U.S. Futures point to another morning of bullishness ahead of the JOLTS report and several earnings reports.
Economic Calendar
Earnings Calendar
On the Hump day earnings calendar, we have another light day but still have several quarterly reports of potential market moving. Notable reports include ADBE, CPB, DBI, HOV, VRA & VRNT.
News and Technicals’
It’s becoming all too common, with the market setting new record highs based on vaccine news and federal stimulus hopes. The SP-500 tops 3700 for the first time in history as the Nasdaq prints its 50th record high for the year. As the markets surge higher, so goes the pandemic infections adding 1 million new cases in just 4-days. Phizer is now warning that people with significant allergic reactions shouldn’t take the vaccine after two of Britain’s National Health Service experienced severe reactions. However, both are not recovering, according to the national medical director. Citi Private Bank added its voice to the chorus of big investment banks predicting market gains in 2021 and went on to say it loves these ‘unstoppable’ trend. Mortgage rates continue to fall, setting the 14th record low of the year today, driving more refinance demand.
Without question, the bulls have shown remarkable resiliency and a willingness to buy almost anything, no matter the price. Trends remain strong as we continue to extend steeply away from technicals supports. Stay with the trend, but once again, I caution you to be very careful not to overtrade or chase already extended stocks. Remember, what goes up in a euphoric market rally tends to have severe correction consequences at some point in time. Be prepared in case the sentiment suddenly shifts.
The NASDAQ sets if 49th record high of the year even as the bears make half-hearted attempts in the SPY and DIA. While there are clues that the economy is slowing due to pandemic shutdowns, the bulls remain resolute, showing a willingness to keep extending. Even with vaccines coming to market, we still have a long winter ahead of us, and in the short-term, markets look very extended. Euphoric markets tend to last longer than most would expect, so stay with the trend, avoid chasing extended stocks, and be careful not to overtrade. Runs like this tend to end in an ugly way.
Asian markets closed modestly lower across the board overnight, and European markets see red with a Brexit deal hanging in the balance. Ahead of earnings, another light economic calendar, and Congress still unable to get their act together, U.S. Futures point to lower open.
Economic Calendar
Earnings Calendar
Although the earnings have been winding down, we still have several stepping up with quarterly reports. Notable reports include CHWY, GME, AZO, CONN, GWRE, HRB, THO., BF.B.
News & Technicals’
Although we had a little selling yesterday, it was very controlled, and by the end of the day, the bulls maintained control of the trends. The NASDAQ fought the selling, rising to its 49th high record for the year. The Pfizer vaccine has begun rolling out, with a 90-year-old woman in the UK receiving the very first dose. The UK is dubbing the event at V-day after suffering considerable losses across the country due to the pandemic. With the federal government facing a funding shutdown on the 11th, the best it seems that Congress can do is attempt to pass a spending bill that will cover a single week of operation as they continue to haggle over the stimulus bill. With management like that, it’s no wonder that the federal debt is quickly approaching 30 trillion.
Bulls remain in control of the trends, and the T2122 indicator continues to flash a short-term overbought condition. There are so many stocks looking parabolic; it’s very reminiscent of the euphoria present in the 1999, 2000 tech bubble. Although the market conditions are very different, the fear of missing chase of very extended stock prices is much the same. A euphoric market can last much longer than one might think, but it is usually swift and very punishing for those coming to the party late when they end. Although I sound like a broken record, I want caution traders to stay with the trend but guard yourself against overtrading and avoid chasing already extended stocks.
A slowing job growth proved to be no concern for the market on Friday, pushing all four indexes into new record territory. The rapidly rising pandemic infection rate, the death toll is, however, forcing states to increase restrictions as hospitalizations strain the capacity limits of the health care system. That said, no price seems too high as investors rush into stocks focused on stimulus hopes, vaccine news that points to 2021 recovery. However, at this elevation, if the market stumbles, the resulting pullback could be very painful if the market does suddenly decides we have pushed too high too quickly in anticipation.
Asian markets closed in red across the board overnight. European markets trade mixed as they push forward with last-ditch Brexit efforts. U.S. futures trade lower this morning but are will off the overnight lows as the morning lows as institutions try to keep investors buying, predicting a 2021 spring economic restart.
Economic Calendar
Earnings Calendar
We have several notable companies fessing up to quarterly results on the Monday earnings calendar. Notable reports include CASY, HQY, JKS, SFIX, SUMO & TOL.
News & Technicals’
Even with a sizable miss on the jobs front, the market continued to surge higher, setting new record highs on all four indexes. Futures markets are currently looking a bit lower this morning but have already bounced off the morning lows with the morning pump-up underway. As investors work the price, the market for a hopeful spring recovery of the pandemic rising oil prices becomes noticed at the gas pumps, with the national average price rising $0.04 a gallon. Simultaneously, the White House health advisor says this winter will be the worst event that this country has faced. California has issued a statewide stay at home order, and states around the country continue to ramp up restrictions measure to combat the spread.
Trends remain very bullish, and there seems to be a non-stop barrage from institution headlines predicting a massive restart to the economy in 2021. I certainly hope they are correct, but that has created a potentially dangerous short-term overbought condition. The T2122 indicator continues to warn that a pullback could begin at any time; however, stimulus hopes, vaccine news, record holiday salse, and 2021 predictions have investors willing to ignore the current pandemic economic impacts. How long this can continue is anyone’s guess but be careful not to overtrade because one day, the market may suddenly decide to care about the impacts, and the technical supports are a long way from current prices.
Ahead of the Employment Situation report, U.S. futures see nothing but bullishness, pushing for more record highs at the open. Let’s keep our fingers crossed that the pandemic, which is shutting down business all over the country, has not yet trickled into employment. The NASDAQ set its 47th new high record for the year in yesterday’s bull run even as hospitalizations reach critical capacity issues and the death toll surges. Have a plan just in case the market suddenly decides to care because it’s a long way to the daily 50-moving average.
Asian markets closed Friday trading mixed as SMIC shares plunge in Hong Kong after the Pentagon blacklisting. European market trade cautiously higher focused on U.S. stimulus efforts and Brexit issues. With a light day on the earnings calendar, the U.S. futures point to more recording highs ahead of the government’s reading on employment.
Economic Calendar
Economic Calendar
We have a light day on the Friday earnings calendar. Notable reports include BIG & GCO.
News and Technicals’
Bulls remain large and in charge, with the Nasdaq making it 47th new record high this year. News that suggested distribution issues with the new Phizer vaccine created a wild whipsaw near the end of the day. That said, the current market shakes off any concerning news, and the bulls rush back, bidding up already stretched and high priced stocks. Biden is endorsing the latest Covid stimulus deal saying it’s a good start, which would suggest even more deficit spending is on the way in his administration. A lot is riding on the 900 billion stimulus package success as Congress rushes to avoid a government shutdown on December 11th. In a surprising move, Warner Media announced that all scheduled 2021 new movies would simultaneously release to movie theaters and the HboMax.com streaming service. A massive blow to the theater business and a reminder of how the pandemic is reshaping the business landscape. Not that market cares, but there were more than 210,000 new infections reported yesterday and nearly 3000 deaths as hospitalizations soar, straining healthcare capacity. Also, in the news, the Pentagon blacklists China chipmaker SMIC and oil producer CNOOC in a reaction to a long history of Chinese espionage complaints.
Trends are most certainly bullish, and although all my trades are long positions, I’m becoming more and more concerned about the overextension I see so many stocks. Trade with the trend but guard yourself against overtrading and chasing already extend stocks. As yesterday’s vaccine news triggered the end of the day, whipsaw reminds us just how sensitive this market is and how quickly significant profits can disappear.
New records were set yesterday as the bulls continue their relentless drive higher. The SP-500 inked a new all-time high at the same time pandemic hospitalizations topped 100,000, and the daily death toll set a new record of more than 3100. However, the hopefulness of another $900 billion stimulus and record-setting holiday consumer spending continues to inspire higher and higher stock valuations even as the Beige Book suggests the economy is slowing. Let’s party like it’s 1999 but stay focused because a pullback could begin at any time.
Asian markets traded mixed but mostly higher overnight as they reported growing services activity. European markets trade cautiously this morning, currently showing mixed results. U.S futures also appear a bit cautious this morning ahead of earnings reports and Jobless Claims.
Economic Calendar
Earnings Calendar
We have a busy day on the Thursday earnings calendar. Notable reports include DG, KR, CM, COO, CVRL, DLTH, EXPR, KIRK, LE, MRVL, MIK, OLLI, SIG, SWBI, TLYS, TD, ZUMZ.
News & Technicals’
While we have a growing hopefulness of a bipartisan toned-down stimulus bill, the pandemic’s impacts continue to hit new records. Pelosi and Schumer have made concessions backing a $900 billion stimulus plan rather than the $2.2 Trillion plan that failed to gain traction. With a government threat of a government shutdown on December 11th and a Congressional recess just around the corner, there is not much time to get a deal passed. Yesterday, Congress unanimously passed a bill requiring Chinese companies to adhere to U.S accounting practices or face delisting from U.S. indexes. I suspect it will quickly be signed into law by the president. There may be some tough decisions for investors holding Chinese stocks and could easily create considerable volatility in their price action. Los Angeles issued a stay at home order yesterday as hospitalizations continue to spike around the country and the daily death toll hit a new daily record of more than 3100. The Chief of the CDC says the next few months could be the most difficult in U.S. history, and yesterday Beige Book hinted that the economy is slowing as a result. Keep that in mind as we continue to ignore impacts stretching the indexes higher, setting new record highs.
Technically speaking, the index trends remain incredibly bullish, and the ravenous appetite for high priced stocks continues unabated. Indeed, the record-setting holiday spending and the hopefulness of another stimulus deal could trigger a Santa Claus rally but be careful not to chase or overtrade should we suddenly decide to acknowledge the economic impacts of debit and the pandemic.
After a brief rest, the bulls are back in a big way, reversing price action overnight to challenge recent record highs. Jerome Powell says the economy is ‘extraordinarily uncertain,’ but looking at the charts’ price action, it would seem there is no price too high for investors. So let the party continue but be very aware of the risk should the markets decide to test price support levels. Remain diligent in your trade planning and avoid the chase with a fear of missing out.
Overnight Asian markets were higher across the board after reporting that China’s manufacturing hit a 10-year high. European markets are surging higher this morning as Pfizer and BioTech both apply for vaccine approvals. Ahead of earnings, ISM, and Powell comments the bulls are stampeding higher this morning, suggesting a Dow reversal of 300 points when writing this report.
Economic Calendar
Earnings Calendar
We a busier day on the Tuesday economic calendar. Notable reports include CRM, BMO, VNS, BOX, HEP, NTAP, & TCOM.
News and Technicals’
This morning, there is not much to say except that after a brief Cyber Monday rest, the bulls are back on the gas with a significant overnight reversal to test recent market highs. Pfizer and BioTech both apply for vaccine approval in Europe, and it seems as long as we can matain vaccine headlines, the market reacts bullishly. Powell will be speaking again today, defending the Cares Act provisions and calling the economic outlook ‘extraordinarily uncertain.’ However, after a historic November, the bulls appear unconcerned, and no price seems too high as P/E ratios continue to stretch out. Perhaps with Amazon reporting that holiday shopping this year was the biggest in history suggests we move right into the Santa Claus rally.
I mentioned a couple of times yesterday the there was no fear in yesterday’s selloff and the technical patterns in the indexes remained bullish. However, when a 400 point selloff in the Dow is insignificant, it’s also a warning of just dangerous it could quickly become to traders that chase already extended stock prices. Let the party continue but be diligent in your trade planning, taking trades with acceptable risk to a stop and avoiding the chase with a fear of missing out.
Although retail is celebrating a colossal holiday consumer spending spree that set new records, small business sentiment dropped to a new record low. The consumer spending would suggest more market upside on the way in the so-call Santa Claus rally. However, with the SP-500 more than 60% above the March low in the face of pandemic economic impacts, a rest or pullback would not be a big surprise.
Asian markets closed the day modestly lower overnight after reporting a 7-month streak of manufacturing growth. European markets trade mixed but mostly flat this morning, seemingly taking a rest on this last day of November. The U.S. futures point to mixed open with a possible light volume day with traders likely extending holiday vacations and the distraction of Cyber Monday sales.
Economic Calendar
Earnings Calendar
On this last day of November, we have a light day of earnings reports. Going through the list, I don’t see any that are particularly notable.
News and Technicals’
According to retail reports, holiday shopping hit new spending records, which is likely to continue with the Cyber Monday sales event today. Don’t be surprised if volumes remain low as many will be distracted surfing the internet to bag a few deals. On the bright side, such a strong showing of consumer spending could spark the so-called Santa Claus Rally into the end of the year. Unfortunately, small business confidence seems to be going in the other direction, dropping to an all-time low according to the Q4 CNBC|SurveyMonkey Small Business Survey. The results show that 53% of small business owners say they expect tax policy & increased government regulation will negatively impact their business. With small businesses as one of the largest job creators, this negative sentiment could see employment numbers struggle in a post-pandemic recovery.
Interestingly the futures don’t seem inspired by the colossal holiday buying spree pointing to a pullback in the pre-market. However, with the SP-500 up more than 60% since the March bottom to set new records despite unemployment and a severely damaged economy, perhaps a rest is not that big of a surprise. Bullish trends remain, but there’s a danger with index prices so elevated from their respective 50-day averages. That said, plan carefully, and don’t be surprised if the volume is a bit light today with traders extending vacations to shop.
Vaccine fueled recovery hopes helped to inspire the bulls to new record-breaking levels creating headlines around the world. Massive rallies in energy, financials, and consumer staples have created impressive reversal patterns in the charts and suggest the move may have become a bit parabolic in the short-time. Expect volume to decline rather sharply today after the deluge of economic data as traders head out for holiday plans. Consider your risk carefully as we head into the shutdown and what typically is a choppy light volume market condition on Black Friday and the Cyber-Monday shopping distractions.
Asian markets closed mixed but mostly higher overnight while European markets slip slightly lower, resting after yesterday’s sharp rally. As we wait for a massive morning of potential-market moving economic data, the futures are taking a wait and see approach indicating a modestly lower open. Stay safe and have a Very Happy Thanksgiving, everyone!
Economic Calendar
Earnings Calendar
On the eve of the Thanksgiving shutdown, we have a relatively light day of earnings calendar. Notable reports include DE & FRO.
News & Technicals’
A pre-holiday surge set new records lifting the Dow above 30,000, enjoying the blue sky above with IWM. Energy, financials, and consumer staples sectors were the big winners, while some tech giants struggled to find buyers. Focused on vaccine recovery, hopes the bulls maintain solid control of the index trends, and there seems no price too high that they are willing to pay. Reaching the 30,000 goal was very important for the institutions. As reported on CNBC, this new threshold could draw in new investors from the sidelines with hopes that more stocks will participate in the next leg. However, there are those worried that the market is heating up to an unstainable level. One thing for sure, as the pandemic continues to impact business and the expectation of higher taxes on the horizon, traders will have to remain nimble.
Today is a massive deluge of potentially market-moving data. As of now, U.S. Futures point to a slightly lower open as if taking more of a wait and see approach this morning. Although 2020 is far from typical, it would be wise to keep in mind that volume usually shrinks quickly ahead of the holiday as traders hit the roadways and airports. Light volume choppy price action and be expected during the short session on Black Friday often extends into the following week with shoppers focused on Cyber-Monday deals. No doubt this has been a challenging year, but we still have so much to be thankful for in this great country of ours. Please take a moment during this holiday to remember those that serve in the military, our first responders as well as the health care professionals on the front lines keeping us safe.
