We received a strong dose of price volatility yesterday, but there was very little change technically in the index charts by the end of the day.  We are still dealing with overhead resistance and possible topping patterns, and at the same time, the bulls remain vigilant defending price support levels.  Today the market may pick a direction depending on how we react to the employment situation numbers.  Come in strong, and we could finally get the bulls to challenge resistance levels and perhaps set some record highs.  Come in hot, and the bears might act up as they worry about the possible changes to FOMC easy money policies.  In short, anything is possible!

Overnight Asian markets traded mixed as the RBI keeps interest rates unchanged.  Across the pond, European markets trade flat and slightly lower ahead of the U.S. jobs data.  This morning stock futures are taking a wait-and-see stance but prepare for just about anything after the number release an hour ahead of the open.  Prepare for more volatility as the market reacts. 

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a very light day with only 12 companies listed.  The only notable report on the day is that from HOFT.

News & Technicals’

AMC is seeking approval to boots it’s stock authorization by 25 million shares laying out its case on a YouTube program.  Facebook ran into another antitrust issue with the U.k.’s Competition and Markets Authority.  The regulatory agency will investigate whether Facebook is abusing a dominant position in the social media or digital advertising markets through its individual data collection.  Elon Musk is at it again, tweeting a meme about a couple breaking up and adding the hashtag Bitcoin and a broken heart emoji.  Bitcoin fell 4%, and other cryptocurrencies also sank.  How much longer will the SEC allow him to manipulate market prices!  U.S. Treasury yields traded slightly higher this morning, with the 10-year ticking up to 1.6267% and the 30-year rose to 2.3024%.

Although we had a lot of price volatility yesterday, technically, there was very little change in the index charts.  The bulls defend support levels, and the bears seemed to stand their ground defending overhead price resistance levels.  The VIX made no decision, and the T2122 indicator ended the day back in the upper range after the bounce.  All eyes will be on the Employment Situation number this morning that estimates that it will come in strong.  The worry from the market is if the number comes in too hot, it could raise the pressure on the FOMC to act reducing some of the easy money policies.  So your guess is as good as mine as to what happens next.  Futures currently point to a flat to mixed open, but everything could change rather dramatically after the release of the numbers at 8:30 AM eastern.  Stay focused and settle in for another bull/bear fight near overhead resistance.

Trade Wisley,

Doug

Index prices drifted sideways in a choppy market session as the market struggles with momentum waiting on jobs data.  The big question of the morning is, will the data inspire the bulls, or will it bring out the bears?  Anything is possible, and the market has proven it’s not shy about making huge moves, so plan your risk accordingly.  Keep in mind we still have the Employment Situation number to deal with before the market open on Friday.  Stay focused and flexible!

Asian markets traded mixed overnight, with Hong Kong selling off 1.13%.  European markets trade decidedly bearish this morning in reaction to Chinese data.  Ahead of a big day of earnings and economic data, the U.S. futures currently point to a bearish open, but in truth, anything is possible as the data rolls out.  Buckle up it could be a wild ride!

Economic Calendar

Earnings Calendar

We have our busiest day this week, with 24 companies on the earnings calendar.  Notable reports include ASAN, AVGO, CEIN, CRWD, DOCU, DLTH, EXPR, FIVE, SJM, JOAN, LULU, MDB, SCWX, WORK, SUMO, TLYS, & ZUMZ.

News & Technicals’

The frenzy of meme-stock traders nearly doubled the share price of AMC on Wednesday, with more than 70 million shares traded.  The stock is up more than 2800% year to date as this dangerous activity continues to draw the attention of regulators.  Analysts suggest oil prices continue to rise this summer as economies around the world reopen.  Demand in the U.S. has begun to draw down reserves built during the pandemic, with $80 per barrel or higher expected targets.  Russia is warning this morning that its economy is showing signs of overheating as consumer inflation accelerated again in May to top the 5.5% reading in April.  Treasury yields traded mixed this morning ahead of private payrolls and jobless claims data.  The 10-year rose to 1.5926% as the 30-year dipped to 2.2774%.

The price activity in the indexes drifted sideways yesterday in a choppy session as the market continues to struggle with momentum.  On the good side, the bearish activity on Tuesday found no followthrough sellers holding as price supports.  That said, we still have overhead resistance in all the index charts, and the possible double top pattern in the SPY and weakness in big tech remains a concern.  Today, we face our biggest day of earings coupled with several possible market-moving economic reports that could provide inspiration.  The question yet to be answered is will that inspiration favor the bulls or the bears? Premaket futures are currently under pressure suggesting a bearish open, but anything is possible as the market reacts to jobs data.

Trade Wisely,

Doug

Yesterday’s big morning gap lost buying energy almost immediately as resistance won the day.  Though the price action left behind bearish engulfing, dark cloud cover patterns and a possible double top on the SPY price supports also proved to hold.  Is there a reason for concern?  Yes, but there is also no reason to believe the sky is falling.  A follow-through down today could become very concerning but should the bulls find inspiration in the jobs data holding on to price supports, the uncertainty may shift to those holding short positions.  Stay focused as anything is possible.

Overnight Asian markets traded mixed but mostly lower as Australia’s GDP came in stronger than expected.  European markets trade modestly bullish this morning near record highs.  U.S. futures are once again pumping the open ahead of the ADP jobs data.  What happens next is anyone’s guess, so keep a sharp focus on price action, support, and resistance levels for clues.

Economic Calendar

Earnings Calendar

The Wednesday earnings calendar lists 19 companies reporting, with several as unconfirmed.  Notable reports include AAP, CLDR, LE, NTAP, PVH, & SPLK.

News & Technicals’

According to Fed official William Dudley, the recent spike in U.S. inflation is “likely transitory for now, but could become more persistent in the coming years.”  That kind of like saying you’re a bit pregnant but plan for the next few years to be a lot of work!  Ahead of the private payroll jobs data, treasuries ticked slightly lower to 1.606%  on the 10-year and 2.288% for the 30-year yields.  Economists look for private payrolls to improve over the April reading at 266,000 to 674,000 in May.  ZOOM reports blowout earnings but now sees a 50% revenue growth for the full fiscal year but warns of a coming slowdown.  ZM stock price is little changed this morning.  Amazon has set its big summer sales event, Prime Day, for June 21 and 22. 

Yesterday proved to be a bit disappointing after the overly rambunctious morning gap that was stopped in its tracks by price resistance.  I think you would have to say that resistance won the day leaving behind some concerning bearish candle patterns and a possible double top on the SPY.  However, it was not that bad if you consider the overall chart and the fact that price supports held by the close of the day.  What will be very important is how price action follows though today!  Should price move on lower today, confirming the bearish engulfing and dark cloud cover patterns, that’s a more serious concern.  If today the price action holds price support, we may still have a reason for caution, but odds of new record highs improve.  A lot will depend on the market reaction to the Private Payroll numbers released before the bell. Buckle up; anything is possible.

Trade Wisely,

Doug

Though futures opened lower Monday evening, the bulls found inspiration overnight as European markets surged to new records after better than expected economic data.  With the SPY in striking distance of a new record at the open, it seems unlikely the institutions will miss the opportunity to grab a new headline to kick off the first trading day of June.  That said, keep we still have substantial resistance in the QQQ and IWM to overcome.  With bond yields ticking higher this morning with inflation pressures growing, that may still be problematic, particularly for the tech sector.  Stay focused and flexible as we test price resistance levels.

Overnight Asian markets traded mixed with Chinese factory activity expanding.  However, European markets are decidedly bullish this morning on solid data and rallying oil prices.  U.S. futures have sharply recovered off opening lows ahead of manufacturing data to kick-off the first trading day in June.  Keep in mind that big gaps can create significant price volatility.  Plan according.

Economic Calendar

Earnings Calendar

We have 27 companies listed on the earnings calendar as we begin trading this short trading week.  Notable reports include ZM, Kirk, AMBA, CGC, APPS, & HPE.

News and Technicals’

Futures opened trading lower Monday evening, but the bulls found inspiration to surge higher with the SPY in striking distance of new record highs sometime during the night.  Oil prices surged overnight, with the benchmark Brent crude futures up 2.15% and U.S. crude advanced 2.8%.  The world’s largest meat processors were hit over the weekend by an organized cyberattack.  Australian and North American units were affected, but the Australian attack shut down operations across several states with no indication as to how long the stoppage might last.  Tesla is raising prices again due to supply chain pressures in raw materials.  Treasury yields tick higher this morning, with the 10-year coming in at 1.6130% and the 30-year rising to 2.2924% after April’s Core inflation number rose 3.1%, which was hotter than expected.

When it comes to the technicals, the DIA and SPY bull trends continue to test record levels, and with this morning’s gap up, the SPY could breakout at the open.  Strength in the financial, oil, and healthcare sectors allowed the IWM to recover its 50-day average; however, it still has substantial overhead resistance to overcome.  The QQQ is also dealing with overhead resistance, and though the bulls are pushing in the premaket to kick off the first trading day in June, rising bond rates may prove problematic for the tech sector.  Getting this close to new records, I can’t imagine that the institutions will pass up on the opportunity to gain the headline but remember, the possibility of pop and drop at resistance also exists.  That said, try not to chase overextended stocks at the open.  Let’s wait and see if there is a follow-through of buying after the gap. 

Trade Wisely,

Doug

Despite all the premarket blustering trying to inspire the bulls the last couple of mornings, the indexes remain stuck near overhead resistance.  NVDA reported an 84% increase in sales last quarter, but the stock is nearly unchanged this morning as the market seems to struggle with momentum.  How we open today will depend on the reaction to the Durable Goods, GDP, and Jobless Claims numbers.  I think it is fair to say anything is possible.  However, keep in mind the coming 3-day weekend, and don’t be surprised if trading volumes quickly decline after the morning session as traders head out to extend their time off.

During the night, Asian markets traded mixed in a somewhat choppy session.  European markets traded mixed this morning and primarily flat, cautiously waiting on U.S. Economic data.  U.S. futures have rallied off of overnight lows as earnings roll out, and we wait on crucial data points to be revealed.

Economic Calendar

Earnings Calendar

We have our most significant day of earnings data this week, with 40 companies listed on the calendar.  Notable reports include BBY, CRM, ADSK, BOX, BURL, COST, DELL, DG, DLRT, GPS, GCO, HPQ, MDT, OLLI, SAFM, ULTA, VEEV, & VMW.

News & Technicals’

NVDA crushed 1^st quarter results with sales up 84% compared to last year and sold $155 million in crypto mining chips.  Interestingly the stock is basically unchanged this morning.  The US and China talked on the phone for the first time under the Biden administration and were stated as candid, pragmatic, and constructive.  It is beginning to look more and more likely that the pandemic origin was from a Wuhan lab where game of function activities took place.  After ending the Trump investigation immediately after entering office president, Biden has now ordered an investigation.  Russia has decided it will not make Covid vaccines compulsory for its citizens, with Putin telling officials on Wednesday that it would be “counterproductive.”

Though there was an effort in the premarket futures to inspire the bulls yesterday morning, the indexes remained stuck near overhead resistance.  Overall we chopped in a very narrow range in the DIA, SPY, and QQQ while IWM enjoyed a surge of activity bolstered by oil numbers.  This morning futures appear uninspired after the huge beat from NVDA.  However, they have significantly improved from overnight lows.  That said, with Durable Goods, GDP, and Jobless Claims before the open, anything is possible when trading begins today.  As you plan your risk, keep in mind the coming 3-day weekend and the possibility that trading volumes could quickly decline if traders wrap up their week early. 

Trade Wisely,

Doug

The Amazon antitrust action by the Washington D.C. attorney general quickly dampened the bullish energy yesterday.  Indexes took a little break resting at or near price resistance levels in the charts.  The IWM is the only index that suffered some technical damage as it once again failed at its 50-day average.  Keep in mind after the Thursday morning economic reports, don’t be surprised if volumes begin to decline as traders escape early to extend Memorial day vacations.  Plan carefully as we slide into a 3-day weekend and begin summer trading.

During the night, Asian markets closed with modest gains led by the HIS gaining 0.88%. However, European markets are trading very cautiously this morning near the flatline but mostly lower when writing this report.  As earnings roll out this morning, the U.S. futures point to a bullish open ahead of the Petroleum numbers as they test overhead resistance levels.

Economic Calendar

Earnings Calendar

We have just over 30 companies listed on the earnings calendar this morning, but several are unconfirmed reports.  Notable reports include NVDA, ANF, AEO, BBW, CPRI, DKS, APPS, ELF, NXGN, PDD, PSTG, SNOW, & WDAY.

News & Technicals’

Washington D.C. attorney general Karl Racine began an Amazon antitrust action claiming the company is unfairly raising consumer prices.  The lawsuit alleges the company utilizes monopoly pricing power contracts with third-party sellers.  An ad was running in the UK stating, “time to buy,” Bitcoin was banned by the Advertising Standards Authority.  Treasury yields traded mixed this morning, with the 10-year rising slightly to 1.567%  while the 30-year declined slightly to 2.256%.  China is once again failing to live up to its trade commitments in the phase one trade deal.  Chinese purchase of U.S. goods through April is 73% of what they should be according to the agreement.  China is also in the news for cracking down on cryptocurrency mining activities proposing punishments for companies or individuals involved.  Being a central hub of crypto mining activity could create more price volatility in the digital currency.

Technically speaking, the DIA and SPY are in pretty good shape though still challenged by overhead resistance.  The QQQ and the IWM have the biggest hurdles to overcome with significant price resistance levels above.  That said, the bulls are once again pumping the premarket, trying to inspire buyers as the morning earings rollout.  Later this morning, we will get a reading on the Petroleum Status that could be very important for the IWM that once again failed at its 50-day average yesterday.  Remember, as we slide into a 3-day weekend, the volumes could become light as traders head out early to extend their vacations.  Plan your risk accordingly.

Trade Wisely,

Doug

As inflation fears subsided, the index chart technicals continued to improve yesterday.  That said, price action remains challenging, and it’s worth noting that this all-or-nothing market environment has swung up and down nearly 2000 points in the last 7-days.  Challenging may be an understatement!  We still have overhead resistance levels to overcome, so be careful chasing stocks well above support and near resistance.  New records may be just around the corner, but we still can’t rule out bear attacks near resistance highs.  Stay focused on price action for clues.

Overnight Asian markets rallied strongly, led by SHANGHAI surging 2.40% by the close of trading.  Across the pond, the DAX hits an all-time high while the FTSE and CAC trade oddly near the flatline.  Ahead of earnings, Case-Shiller, Housing data, and Consumer Confidence numbers, the U.S futures push for another bullish gap up open. 

Economic Calendar

Earnings Calendar

We have under 25 companies reporting today, but we have several potential market movers on the list.  Notable reports include A, AZO, CBRL, INTU, NAT, JWN, RRGB, SOL, TOL, URBN, & ZS. 

New & Technicals’

Elon Musk said he spoke to bitcoin miners, and after doing so, the price surged to near $40,000.  Make you wonder how much longer the SEC will allow him to get away with this manipulation and why would anyone want to own something that one person can move the price so dramatically.  What’s the next move, Elon?  Amazon could announce a deal as early as today to buy MGM Studios.  The $9 billion deal would be AMZN’s biggest acquisition since the Whole Foods purchase in 2017.  Ahead of Case-Shiller numbers and the New Home Sale figures, Treasuries are drifting lower this morning.  The 10-year fell to 1.591%, and the 30-year dipped to 2.283%.  After one denial after another, the evidence begins to mount that Covid-19 came from a Wuhan Lab.  The WHO has repeatedly said the virus jumped from bast to humans, but there is no evidence that the virus exists in bat populations after extensive testing. 

Chart technicals continued to improve yesterday as inflation fears subsided.  The tech giants enjoyed substantial rallies pushing indexes toward resistance levels.  In this all-or-nothing market environment, I would not rule out the possibility of new record highs in the DIA or SPY by the end of the week.  However, with the recent volatility, we should also not rule out the possibility of another bear attack near market highs.  Keep in mind the Dow has covered nearly 2000 points in just the last 7-day of trading.

Interestingly the Absolute Market Breadth indicator continues to decline as we surge higher.  It is, however, encouraging that the VIX suggests market fear is subsiding.  Stay focused and flexible as volatile price action is likely to remain challenging.

Trade Wisely,

Doug

Last week’s bounce substantially improved the technical picture in the DIA and SPY.  However, the bulls still have a lot of work to clear overhead resistance levels in the QQQ and IWM.  With a busy week of earnings and economic data, anything is possible, but possible traders will have to stay focused and flexible with big price swings.  Buying the dip works only if the market moves higher.  Remember, the market will top at some point in time, and buying the dip will prove painful.  Plan your risk carefully and keep in mind gap up opens near resistance levels can run into entrenched bears.  Be careful not to chase.

Asian markets opened the week mixed with modest gains and losses by the close of the session.  European markets trade with modest gains this morning, starting the week with a modicum of caution., The U.S. futures point to bullish open with a light day of earnings and economic data as bulls try to inspire enough buying to break through resistance levels.  Volatility is likely to remain high and watch for the possible a pop and drop near resistance.

Economic Calendar

Earnings Calendar

We start the week off with 38 companies listed on the earnings calendar with several unconfirmed.  Notable reports include API, CRMT, XOG, & NDSN.

News & Technicals’

We have a pretty busy week on the earnings calendar this week, along with housing numbers, durable goods, GDP, and Personal Income to keep traders busy as we wrap up May.  As you plan forward, remember that following Monday, the market is closed for Memorial Day.  Bitcoin continues its wild fluctuations dropping to 32,000 but trying to start the week positive this morning.  Treasury yields are drifting lower this morning, with the 10-year slipping to 1.617% and the 30-year dipping to 2.315%.  The Nobel prize-winning economist Robert Shiller believes there is a bubble forming.  He says he’s most worried about housing, crypto’s, and stocks calling it a “wild west” mentality among investors. 

Last week’s relief rally substantially improved the indexes’ technical picture, but there are still questions to be answered.  Rallying to reclaim support levels and break downtrends is the first step, and now we need some proof the bulls can hold them as support.  Substantial overhead resistance still exists in the QQQ and IWM.  In last week’s bounce, the T2122 indicator moved near overbought levels, and with the futures pointing to a bullish open, we should watch for the potential of a pop and drop pattern.  The VIX closed on Friday just above a 20 handle, holding above its 50-day average and price support.  So though the technical picture has improved, there are still questions to be answered.  I would not rule out the possibility of a rally to end the week that could even make new record highs.  However, we can also not rule out the possibility that the bears could defend resistance highs.  Stay focused and avoid chasing with the fear of missing out.

Trade Wisely,

Doug

We all enjoy a nice relief rally but keep your eyes focused on the overhead price resistance levels because that will reveal if the bulls have what it takes to plow through bearish defenses.  I wouldn’t expect smooth price action with the VIX holding a 20-handle and still above its 50-day average.  Though the DIA and SPY hold bullish trends, the QQQ and IWM remain uncomfortably below significant resistance levels.  Plan your risk carefully as we slide into the weekend.

Overnight Asian markets ended the week with a mixed and choppy session, with Taiwan surging 1.6%. European markets trade mixed with modest gains or losses as they wait on economic data.  Ahead of PMI and Housing data, U.S. futures point to bullish open as bonds pull back slightly. 

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a lighter day of reports with just 14 companies listed.  Notable reports include BAH, BKE, DE, DSX, FL, & VHC.

News & Technicals’

A nice relief rally began yesterday as the buy the dip traders satisfied their appetite, lifting tech and crypto.  The U.S Treasury calls for stricter cryptocurrency compliance with IRS suggesting it poses tax evasion risk.  Janet Yellen proposes a global minimum corporate tax rate of 15% and says discussions should continue to be ambitious to push the rate even higher.  Israel and Hamas agree to a cease-fire; however, both sides seem very skeptical about it holding as they sling insults back and forth at each other.  Treasury yields are drifting slightly lower this morning, with the 10-year dropping to 1.618% and the 30-year coming in at 2.323% ahead of PMI and housing data.

Though we experienced a nice relief rally, the bulls still need to show the willingness to follow through, clearing overhead price resistance levels.  The tech giants provided a significant portion of the rally, but a quick look at the charts shows they are still in downtrends.  The QQQ was able to get above its 50-day average, so the test now is, can it hold it as support?  This morning bond rates are softening slightly, which could be very helpful to the struggling tech sector.  The VIX closed the day above its 50-day average and a 20 handle.  We should continue to expect significant price volatility and should not rule out the possibility of reversals as we approach price resistance levels.  Be careful not to chase as you plan your risk heading into the weekend.

Trade Wisely,

Doug

Though the index charts have taken some technical damage, the DIA and SPY finding the energy to hold at their respective 50-day averages provide hope that a relief rally may soon follow.  However, the damage in the QQQ and IWM is much more significant and will require substantial effort by the bulls to reverse the current downtrends and overhead price resistance levels.  The elevated VIX suggests we should expect challenging price volatility as the bulls and bears battle for control.  Inexperienced traders will likely find this environment very costly due to the speed and range of the point moves, overnight reversals, and whipsaws that are likely to occur.

Asin markets traded mixed but mostly lower overnight though Japan’s exports surged in April.  European markets are currently green across the board this morning after the Fed talks of tapering.  On the other hand, U.S. futures point to a bearish open though will off the overnight lows ahead of Jobless Claims and the Philly Fed numbers.

Economic Calendar

Earnings Calendar

Today we have just 39 companies listed on the calendar, but several of them have not confirmed their reports.  Notable reports include AMAT, BJ, CSIQ, DECK, HRL, KSS, RL, PANW, & ROST.

News & Technicals’

Facebook is facing some court challenges that could lead to a ban on its EU-U.S. data transfers.  Blocking their transatlantic data flow will have profound implications for other U.S. tech giants.  Bitcoin plunges 30% and at one point touched 30,000 yesterday, which constitutes a 50% haircut from recent highs.  Hamas says it sees a cease-fire possible in the coming days, but this fight has gone on for decades and is unlikely to find a resolution anytime soon.  The 10-year Treasury yield dipped this morning to 1.663%, and the 30-year fell to 2.371% after investors digested the FOMC minutes, where there were hints that the committee might begin pulling back on debit purchases. 

Yesterday’s sell-off created some technical damage in the index charts, but there was also a few rays of hope, with the DIA and SPY finding at least some temporary support at their 50-day moving averages.  Unfortunately, the QQQ and IWM are under this critical psychological level but managed to hold the price supports of last week’s selling.  Recovery, however, could be challenging with both technical and price action resistance levels overhead blocking the potential relief rallies.  The VIX closed well below its high of the day but remained quite elevated above a 22 handle so expect considerable price action volatility to continue.  Experienced day-traders will likely have the upper hand in this environment, while swing traders may find the quick whipsaws and complete overnight reversals very challenging. 

Trade Wisely,

Doug