April Employment Situation

May 7, 2021 by Doug Campbell

Today is all about the April Employment Situation number and how the market will react as the economy heats up.  Economists suggest the number could top 1 million. With the Fed warnings that the rapid increase in asset prices poses a significant economic risk, inflation impacts could soon change the easy policies.   Making new record highs in the Dow yesterday and pushing higher still in the premarket, the bulls seem undeterred, at least for the moment.  However, it may be wise to reduce some risk heading onto the weekend depending on the reaction to jobs data.

Asian markets closed mostly lower but near the flatline overnight.  European markets are, however, decidedly bullish this morning, with the DAX surging more than 1.3%.  Ahead of earnings and jobs data, the futures point to possible new records at the open as we wait on the release of the Employment Situation data.  Stay focused; it could be a wild morning of price action. 

Economic Calendar

Earnings Calendar

We have a lighter day on the earnings calendar but still have more than 125 companies reporting.  Notable reports include AMCX, CI, CNK, CIO, CRON, DKNG, ELAN, ERF, FLR, LEA, NKLA, RUTH, SPB, TU, & VTR.

News & Technicals’

All eyes will be on the April Employment Situation number coming out before the bell this morning.  Consensus expects new jobs will top 1 million, but that number could also be hot enough to consider the unwinding the easy Fed policies.  The pandemic situation in India continues to worsen, with more than 400,000 infections for the 3^rd time this week. In the last seven days, the country total stands at 2.7 million cases.  Treasury yields turned slightly higher early this morning, with the 10-Year rising to 1.575% and the 30-year edging up to 2.247% ahead of today’s jobs report.  In a report, yesterday afternoon Fed warned that the rising asset prices pose an increasing threat to the financial system.  “Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.  Well, thank you very much, Captain Obvious!  Who would guessed that printing nearly 19 Trillion in one year would have significant financial impacts?

However, a warning from the Fed did not detur the bulls yesterday, pushing the Dow to new record highs in a substantial late-day surge.  The push continues this morning in the premarket, with the futures currently pointing to a bullish gap-up open ahead of the Jobs report.  Ths SPY also had a good day yesterday, putting it in striking distance of a new record at the open.  That said, the tech sector remains the problem child below a substantial price resistance, facing higher bond prices and a severely expanding chip shortage.  We have partied for an entire year on easy Fed policy and massive money printing.  The trend remains bullish, so stay with it as long as it lasts, but one must consider the magnitude of the hangover lurking in the near future. 

Trade Wisely,

Doug

Finally, a Consolidation Breach

May 6, 2021 by Doug Campbell

Though beginning with a volatile pop and drop, the bulls finally mustered the energy to breach the wide-range consolidation, briefly touching a new record high.  Unfortunately, the pop and drop won the day in the SPY, QQQ, and IWM closing below the previous day.  Today, we have nearly 375 earnings reports and a jobless number, so expect the challenging price action to continue.  Futures are pumping up the premarket, so keep an eye out for yet another pop and drop open.

Asian markets traded mixed but mostly higher, led by the NIKKEI surging 1.80% even as the SHANGHAI closed marginally lower.  European markets chop around the flatline as they wait on the Bank of England policy decision.  U.S futures are pushing for a bullish open with a big day of earnings data and the latest reading on jobless claims.  Buckle up and remember to plan for the employment situation number before the bell Friday morning.

Economic Calendar

Earnings Calendar

Today we have the largest number of earnings reports so far this quarter, with nearly 375 fessing up to quarterly results.  Notable reports include AMC, AL, ALL, ABEV, AIG, ANGI, BUD, APLE, MT, BLL, BDX, BYND, APRN, BIP, CAH, CARS, CVNA, CNP, NET, ED, DDOG, XRAY, DBX, LOCO, ET, EXPE, FVRR, FLIR, GPRO, GPRN, HL, IAC, IRM, K, LYV, MGA, MAIN, MCK, MCHP, MRNA, MNST, MUR, NCLH, NRG, OTE, PZZA, PK, PTON, PENN, PLNT, POST, PLL, RMAX, REGN, ROKU, SBH, SEAS, SHAK, SFM, SQ, STMP, STOR, SPWR, TPR, TDC, THS, TRIP, UMH, OLED, VER, VIAC, W, WPM, YELP, & ZTS.

News and Technicals’

We finally had a slight breach of the wide-range consolidation that began nearly three weeks ago as the Dow managed to reach out to a new record high yesterday briefly.  India’s health ministry showed more than 412,000 new infections over 24 hours, pushing 21 million.  Worries are growing that the prolonged outbreak could lead to new variants that would threaten the global progress of the pandemic.  On a bright note, in the suffering tech sector, the 10-year treasuries note slipped lower this morning to 1.58% though the 30-year crept higher to 2.262% ahead of the weekly Jobless Claims.  The forecast is that 527,000 new unemployment claims were filed last week.

As the DIA breaks the consolidation log jam, the tech-laden SPY popped and dropped yesterday, still challenged by the price resistance above.  The QQQ also tried to move higher yesterday morning, but sellers eventually won the day, closing the day below the previous day’s close.  IWM also slid slightly lower even as the oil and financial sectors pushed higher.  With a considerable number of earnings reports and Jobless Claims before the open, the futures are again trying to pump the buying enthusiasm currently pointing to a bullish open.  At the risk of sounding like a broken record, watch out for the possible pop and drop at the open.  Keep in mind as you plan your risk forward, we will get the employment situation number before the open Friday.  An open gap is possible, so plan accordingly.

Trade Wisely,

Doug

Another Whipsaw

May 5, 2021 by Doug Campbell

With Yellen suggesting the higher rates may be on the way to prevent the market from overheating, she created a nasty market whipsaw that produced some technical damage in the QQQ.  On the other hand, the DIA bounced strongly enough to set up a new record high for the index if it can follow through today.  Unfortunately, that’s been the problem for the last couple of weeks; inability to follow through!  With a big day of earnings and private payroll number just around the corner, one has to wonder who it will inspire today? Bulls or Bear?

Overnight Asian markets closed in the red with modest declines across the board.  However, European markets are decidedly bullish this morning, with the DAX up more than 1%.  Ahead of earnings and jobs data, the Dow futures are trying to add to yesterday’s whipsaw rally, pointing to bullish open.  Be careful rushing in until we see some actual follow-through buying.  Remember, the pop and drops of late in this wide-ranging consolidation can be very punishing. 

Economic Calendar

Earnings Calendar

The hump day earnings calendar is a busy one, with more than 200 companies scheduled to reveal quarterly results.  Notable reports include GM, ALB, ABC, GOLD, BKNG, BWA, CERN, CF, CLH, CYBR, EMR, ETSY, FSLY, FOX, GDDY, HLT, HFC, HUBS, KTOS, LNC, LL, MTW, MRO, MET, NYT, NVO, NUS, PYPL, QRVO, QLYS, RLT, RGLD, SMG, SSYS, RGR, RUN, SKT, TRMB, TUP, HEAR, TWLO, UBER, WW, & ZNGA.

News & Technicals’

Janet Yellen spouted off about the need to raise rates to prevent the market from overheating, creating nasty whipsaw intraday.  She later clarified that she is not predicting it will need to go up or as to when it will be necessary.  Well, thank you very much!  If the volatility created cost you some money yesterday, make sure to send her a thank you card.  Yellen then said, “We propose to raise the global minimum tax and to close tax loopholes that allow American corporations to shift earnings abroad,” at the Wall Street Journal’s CEO Council Summit.  Get ready for global taxation. President Joe Biden set the goal of getting 70% of U.S. adults to receive at least one dose of a Covid vaccine by July 4. The White House will also aim to have 160 million adults fully vaccinated by Independence Day, senior administration officials said.  Treasury yields declined yesterday, but this morning ahead of the private payrolls, data have once again started to creep higher.  The 10-year traded at 1.605% this morning, and the 30-year edged higher to 2.278%. 

Yesterday’s price action produced some technical damage in the QQQ, with the index dropping through support levels of price and current trend.  That left behind a somewhat significant price resistance level that the tech sector will now have to overcome.  However, the DIA produced a strong bounce-off of price support to create possible new record highs if the index can find the energy to follow through today.  The bounce in the SPY was also productive, but it also now has a price resistance level to deal with to move higher.  One thing for sure this wide-ranging consolidation filled with chop and whipsaws is challenging and very frustrating.  Be careful not to overtrade!  Today begin to focus on jobs numbers, the private payrolls, jobless claim on Thursday, followed by the Employment Situation numbers Friday morning.  Stay focused and flexible with more than 200 companies reporting and inflation worries and all the talk of higher rates and taxes; there is a lot for the investors to digest.  Anything is possible. 

Trade Wisely,

Doug

A Nice Start to May

May 4, 2021 by Doug Campbell

Yesterday’s surge was a nice start to May, but the ability to follow through and break this choppy consolidation range continues to elude the bulls.  With treasuries creeping higher this morning, the tech sector has topped earnings estimates by as much as 20% is struggling to hold price support and a possible double top failure in play.  Be careful not to chase or overtrade a dull market because it can quickly chop up an account, leaving you bruised and battered before a direction manifests.

Overnight Asian markets closed mixed but mostly lower as the RBA holds steady on policy.  European indexes trade mixed in a session muted with recovery worries.  Facing a big day of earnings data as well as trade and factory numbers, U.S. futures currently point to a flat open with tech under slight pressure due to rising bonds. Could it be just another day of choppy consolidation as the market searches for some inspiration?

Economic Calendar

Earnings Calendar

Earnings ramp up this Tuesday with more than 200 companies listed on the calendar set to report quarterly results.  Notable reports include UAA, ATVI, ALGT, ANDE, AKAM, ARNC, ANET, BHC, LNG, COP, CMI, CVS, DENN, DVN, D, DD, ETN, RACE, BEN, IT, HSIC, HST, H, IDXX, INCY, INFN, KKR, LPX, LYFT, MPC, MLM, MTCH, MCFE, MTOR, NXST, PFE, PXD, SEE, SU, SYY, TMUX, SPCE, VMC, WMG, WU, XLNX, & ZG.

News & Technicals’

It was a nice start to May with the indexes surging at the open, but sadly they lacked much energy to do much else, chopping sideways to down the remainder of the day.  There are some starting to suggest that the market is topping due to the lack of momentum. However, the big instutions continue to sing in unison that this summer will see the indexes higher.  Treasury yields advance this morning, with the 10-year at 1.61% and the 30-year moving up to 2.29%.  Yesterday gold and silver surged after Warren Buffet said they see a significant rise in inflation as of late.  As the CDC tells Americans, they can now freely resume travel around the country; India’s pandemic case total crossed 20 million with more than 345K infections reported yesterday.   President Biden has set a deadline to reach an agreement on the infrastructure bill of May 31^st as he travels around the country trying to sell the public on the multi-trillion deficit spending plan. 

The bulls took a solid run at setting a new Dow record high yesterday but fell short as the tech sector found sellers damping the early enthusiasm.  Interestingly the VIX crept slightly higher, and the Absolute Breadth Index moved lower despite the bullish effort.  With earnings estimates topped by more than 20%, it makes me wonder what it’s going to take to break this choppy consolidation range.  Trends remain bullish, with bonds moving slightly higher this morning, adding a little pressure to the tech sector struggling to hold onto its index price supports.  As the morning earnings roll out, futures suggest a flat open with trade numbers and factory order numbers on the horizon.  It looks as if the lackluster price action could continue this morning.  Plan your risk carefully and avoid overtrading.

Trade Wisely,

Doug

Frustrating Week

May 3, 2021 by Doug Campbell

Though we had a week of blowout earnings, the price action that followed made for a very frustrating week as it chopped sideways with little to no momentum.  With the futures once again pushing hard in the pre-market, the question is will this time be different, or will it turn out to be just another pop and drop that we experienced several times over the last couple of weeks?  Overall index trends are still bullish but stay focused and flexible with a busy week of earnings ahead.

Asian markets closed in the red across the board overnight with Twain tensions rising and India reeling from pandemic infection rates.  However, European indexes trade higher this morning, with the U.K. closed to celebrate their May Day holiday.  Here in the U.S., the pre-market pump has begun ahead of a busy day of earnings as well as manufacturing data.  Will there be some follow-through or another frustrating whipsaw?  Plan your risk carefully.

Economic Calendar

Earnings Calendar

Kicking off the first week of May, we have more than 100 companies reporting quarterly results.  Notable reports include AMG, ALK, WEK, APO, CAR, CBT, CHGG, CC, FANG, EL, FN, GPP, IRBT, L, MOS, RMBS, ON, PETS, RBC, RIG, & XPO.

News & Technicals’

Warren Buffett announced his successor, CEO Greg ABEL when he would be no longer man the helm of Berkshire Hathaway.  Treasury yields dipped slightly this morning ahead of the manufacturing data, with the 10-year coming in at 1.625% and the 30-year traded flat at 2.298%.  The Phillippine secretary of foreign affairs accused Beijing of strainings its friendship with the Philippines.  In a Twitter post, Locsin asked China to “get the f— out!”  Keep a close eye on this as the war of words escalates with Taiwan clearly in China’s crosshairs.  The president will out touring the country trying to sell the infrastructure bill to the public as Congress continues to wangle over the size and scope.  As India’s pandemic numbers spike, the U.S. discusses a more comprehensive licensing of vaccines that may waive patent protections.  Over the weekend, India reported more than 400,000 daily cases bringing the countries total to nearly 20 million.  On Friday, the White House announced that it would restrict travel from India.

There’s no doubt that last week was a confusing and frustrating week of price action as companies report blowout results while the market showed little to no interest.  Technically speaking, the bullish trend remains intact though the price action has lingered in a wide-ranging consolidation.  For some reason, the pre-market futures appear inspired to get moving this morning, but once again, I feel it’s necessary to suggest caution in case of another pop and drop.  Don’t case, instead let’s wait to make sure there is some actual buying after the open with enough momentum to last more than a few minutes.  With a big week of earnings and news, stay focused and flexible.

Trade Wisely,

Doug

Puzzling Week of Price Action

April 30, 2021 by Doug Campbell

As big tech produces historic earning numbers, it has been a puzzling week of lackluster price action.  Could the rising bonds and concerns of inflation causing the lack of momentum, or perhaps the significantly elevated P/E ratios causing the problem?  Whatever the cause, the price action continues to chop up accounts as it whipsaws in a better than 500-point consolidation range in the Dow.  As we enter the last trading day of the month and slid into the weekend, consider your risk carefully.

Asian markets traded lower across the board overnight, with the HSI falling nearly 2%.  European indexes trade mainly lower this morning as the Eurozone deals with another pandemic-related recession.  After the blowout earnings in AMZN, the U.S. point to a lower open ahead of personal income numbers.  Get ready for another day of choppy uncertainty. 

Economic Calendar

Earnings Calendar

On the Friday Earnings calendar, reports lighten up, giving us a little break after such a big week of data.  Notable reports include ABBV, BCS, CHTR, CVX, CLX, CL, E, XOM, GT, HP, ITW, NWL, PSX, PBI, QSR, GWW, & WY.

News & Technicals’

It’s been a puzzling week with massive earnings beats but a market devoid of the momentum to react to the historic results.  Make a person wonder if the saying, sell in May and stay away, will merit this year?  According to the European Commission, Apple has abused its dominant position in the distribution of music streaming apps.  The stock is indicated lower this morning.  Unfortunately, the Eurozone economy has once again slipped into another recession as they deal with the 3^rd wave of pandemic lockdowns.  Inda reported another new record with over 386,000 new infections in a single day.  In April alone, the county has had to deal with 6.6 million new cases, bringing more than 18.76 million cases in total.  As the market digests the blowout earnings reports, the 10-year treasury pushed higher to 1.647% with only a slight movement in the 30-year, moving up to 2.31%.

On the index technical front, the SPY managed to set a new record high, but the day’s price action was not exactly confidence building leaving behind a possible hanging man candle pattern on the chart.  Overall the trends remain bullish even as the price action continues in a choppy consolidation zone.  , With the price action lacking directional momentum and chop zone of more than 500 points in the Dow, it has been a challenging and punishing time for swing traders.  Holding longer-term positions in trend stocks have rewarded trader with discipline to hold through the uncomfortable chop.  However, the quick, experienced day traders seem to have the upper hand.  With the bulk of earnings inspiration behind us, significantly elevated P/E ratios, and the summer doldrums just around the corner, traders should be cautious of overtrading.

Trade Wisely,

Doug

Blowout Reports

April 29, 2021 by Doug Campbell

Big tech delivers blowout reports as AAPL and FB surge in after-hours trading. Today we will hear from AMZN and TWTR as we roll into the biggest day of earnings so far this quarter.  The FED will keep rates low and plans to buy $120 billion in bonds a month, keeping pedal to the metal for the foreseeable future with little to no concern about inflation.  The President rolled out plans for nearly $4 Trillion government spending last night, so let’s party like it’s 1999 as long as it lasts.

Asian markets saw bullish gains overnight led by the HIS rising 0.80%, reacting to the FED policy.  European markets are mixed but mostly higher as Nokia surges 16%.  Ahead of a massive day of earnings and an economic calendar that includes GDP & Jobless Claims, futures point to a substantial gap open.  Buckle up it could be a wild day of price action!

Economic Calendar

Earnings Calendar

Today will be the biggest day of earnings so far this quarter.  Notable reports include MCD, AOS, AEM, MO, AMZN, AMT, BAX, BLUM, COG, CARR, CAT, CHD, CRUS, CTXS, CMCSA, CUBE, DVA, DLR, DPZ, ERJ, FSLR, GLPI, GILD, HSY, IP, KDP, KIM, KHC, TREE, LOGI, MMP, MA, TAP, NEM, NIO, NOK, NOC, PFPT, RCL, SWKS, SO, TROW, TXRH, TW, TWTR, X & XEN.

New & Technicals’

Blowout reports from big tech companies AAPL & FB appear to have finally broken the earnings doldrums of the last couple of weeks, with the bulls pushing hard in the future.  However, looking forward, AAPL is warning the chip shortages may slow growth looking forward.  The President rolled out a massive plan with $2 Trillion on infrastructure and another $1.8 Trillion for families, children, and students!  Under his proposal, workers would get 12 weeks of family and medical leave up to $4000 a month. The 10-year treasuries are back up again this morning, climbing to 1.65%, and the 30-year rose to 2.318%.  Gerome Powel and the FOMC kept the pedal to the metal, keeping rates near zero with plans to buy $120 Billion in bonds each month.

With futures on the rise this morning, the SPY and QQQ may open at new record highs.  Let’s watch carefully to make sure there is some follow-through buying after the open.  We don’t want to rush into a pop and drop!  The Fed, massive government spending, and big tech earings certainly favor the bulls, and the overall bullish trends with blue skies above show no signs of stopping just yet.  Stay with the trend as long as it lasts but let’s not become complacent as P/E ratios continue to stretch to remarkable levels.  AMZN and TWTR report after the bell today, so prepare for more price volatility and possible gapping open on Friday.

Trade Wisely,

Doug

Mixed Bag of Results

April 28, 2021 by Doug Campbell

The after the bell reports resulted in a mixed bag of price action results.  GOOGL soared, but MSFT seemed to miss a step indicating a lower open this morning.  After the morning rush in reaction before the bell reports, there is a good chance the market slips into a light and choppy pattern as we wait for the FOMC decision.  If that not enough, FB and AAPL report after the bell setting the stage for a Thursday morning gap.  Your guess on direction is as good as mine!  Then later tonight, the President will unveil another massive spending plan in a joint session of Congress.  Indeed a busy week of data!

Overnight Asian markets saw modest gains by the close in a choppy session at investors grappled with economic data.  European markets trade with modest gains this morning with the Fed meeting in focus.  The U.S. displays a mixed bag this morning as the investors try to digest an overflowing plate of data headed in our direction.  Anything is possible, so plan your risk carefully.

Economic Calendar

Earnings Calendar

The Hump day earnings calendar has 190 companies listed, ready to report quarterly results.  Notable reports include AAPL, FB, AFL, ARCC, ADP, AVB, BA, BSX, EAT, CAKE, CME, CDE, DB, EBAY, EQIX, F, GRMN, GD, GSX, GRUB, HUM, LC, MGM, MAA, MCO, NSC, ORLY, PSA, QCOM, ROK, R, SNY, NOW, SHOP, SIRI, SIX, SPOT, TDOC, TEVA, VVV, WELL, WING, WH, YNDX, & YUM.

News & Technicals’

We had a mixed bag of results after the bell earnings reports, with GOOG soaring and MSFT, AMGN, and TXN looking to gap lower this morning.  Today the report ramp-up, including the giants FB and AAPL stepping up after the bell.  Suppose that’s not enough to we also have the FOMC Announcement at 2 PM Eastern with the press conference to follow.  Tonight the President will address a joint session of Congress to unveil another massive spending plan of nearly $2 Trillion.  India once again reports record new cases and fatalities, and according to some reports, the numbers could be underreported by nearly half as overfull hospitals turn people away.  Ahead of the Fed decision, the 10-Year Treasury rallied above 1.65% this morning, and the 30-year climbed to 2.321% as inflation concerns grow.

On the Techincal front, the bulls remain in control of the trends, though they have experienced a choppy consolidation over the last couple of weeks.  The T2122 indicator continues to display a short-term overbought condition, but as the market reacts to a tidal wave of data, anything is possible.  While the market tries to climb a wall of worry, the VIX is also consolidating above recent lows.  That said, the best we can do as retail traders is stay with the trend, avoid overtrading and complacency, ready to react if the market suddenly reveres.  Expect the market to become light and choppy after the morning rush as we wait on the FOMC.  Then anything is possible.  Remember, with FB and AAPL, reporting after the bell tomorrow’s open could easily begin with a gap.  The question to be answered is up or down?

Trade Wisley,

Doug

Big week of data

April 27, 2021 by Doug Campbell

Earnings reports move into high gear today with a big week of data that could easily create significant price volatility in the days ahead.  With more than 100 company’s reporting, the beginning of the FOMC meeting, and the latest reading on Consumer Confidence, investors will have a lot to digest as we head into GOOGL and MSFT reports after the bell.  A Wednesday morning gap is possible, but the question to be answered is up or down?  Consider your risk carefully.

Asian markets traded mixed but mostly lower overnight though HSBC shares surged on earnings results.  European markets currently see modest losses across the board as they monitor company reports and wait on the Fed.  However, U.S. futures continue to move bullishly, suggesting a modestly higher open at the time of writing this report.  Get ready for all the pops and drops earnings can create!

Economic Calendar

Earnings Calendar

The 2^nd quarter earnings season kicks into high gear today, with more than 100 companies listed on the calendar.  Notable reports include GOOGL, MSFT, MMM, ABB, AMD, AMGN, ADM, BP, COF, CNC, DB, GLW, CROX, ECL, LLY, EXX, FFIV, FEYE, FISV, GE, HAS, ILMN, IVZ, JBLU, JNPR, MDLZ, PINS, PHM, RTX, ROP, SHW, SBUX, SYK, TXN, UBS, UPS, V, WM, & YUMC.

News & Technicals’

As this big week of data rolls out, we had a bit of a mixed bag of results with the SPY and QQQ squeaked out new records, the DIA moved slightly lower in an essentially choppy price action day.   Today begins the 2-day FOMC meeting with their decision announcement at 2 PM Eastern Wednesday.  BP beats quarterly estimates and commits to a $500 million stock buyback in the second quarter.  After the bell, TSLA reported better than expected results; however, the stock is indicated modestly lower this morning.  Rep. Richard Neal will introduce legislation that would provide Universal paid family and medical leave of up to 12 weeks and make permanent the tax credits provided in Biden’s Covid relief package.  The President issued yet another executive order raising the federal contractor minimum wage to $15 an hour.  Treasury yields pushed higher this morning, with the 10-year advancing to 1.581% and the 30-year rising to 2.258%.

Bullish trends remain strong earnings ramp-up to a fevered pitch, and we wait on the FOMC decision.  All eyes will be on the tech giants GOOGL and MSFT after the bell today.  Can they produce results to support current prices with P/E Ratios already near 30 and above?  We will find out later today!  Until then, we have a significant day of company reports and economic data to digest.  However, after the burst of morning activity, don’t be too surprised if price action becomes light and choppy as we wait in anticipation of the tech reports.  Plan for the possibility of a substantial gap up or down Wednesday morning, depending on the tech results, and plan your risk accordingly heading into the close of the day.  Interestingly, as the SPY and QQQ crept higher, so did the VIX, with a very unimpressive performance in the market breadth indicator. 

Trade Wisely,

Doug

Tech Titan’s Earnings

April 26, 2021 by Doug Campbell

If the tech titan’s earnings results are not enough, how about we toss in a big week of economic data and an FOMC decision for good measure!  The daily reversals of last week left us guessing as the price support held, as did the price resistance setting the stage for another week of possible volatile big point moves.  Prepare for the possibility of big gap opens, overnight reversals, and intraday whipsaws as we react to all the data.  Will the week produce the thrill of victory or the agony of defeat? 

Asian markets closed the day mixed but mostly lower as they monitor the terrible pandemic conditions in India.  European markets trade flat this morning, with Germany set for a third wave lockdown that could last until June.  Ahead of earnings and the latest reading on Durable Goods, U.S. Futures seem to be taking a wait-and-see approach pointing to a flat and mixed open.

Economic Calendar

Earnings Calendar

This week is an enormous week of earnings reports highlighted by the tech giants.  Today with begin with 72 companies listed on the calendar stepping up to report.  Notable reports include AGNC, ACI, CNI, CAJ, CHKP, HMST, LII, OMF, OTIS, PKG, SBAC, SUI, & VALE.

New & Technicals’

Results from the tech titan’s earnings will likely be the driver for price movement for this week.  It begins after the bell with TSLA today, GOOG and MSFT on Tuesday, FB on Wednesday with AMZN hitting the tape on Thursday.  Inda reported its 5^th straight day of more than 350,000 new infections.  The U.S. said it would send the raw materials needed for India to ramp up the manufacturing of the vaccine and other necessary medical equipment.  Germany has implemented tough new lockdown rules to curb the third wave of infections with measures that could last until June.  Treasury yields are creeping up this morning ahead of the busy week of data, with the 10-year coming in at 1.579% and the 30-year climbing to 2.254%. Wells Fargo is now predicting that the recent slump in yields will soon end with bonds breaking higher as inflation worries increase.

Not only do we have a busy week of earnings, but we will also have a big week of economic data highlighted by the FOMC decision Wednesday afternoon.  Friday proved to be another reversal day with a significant point recovery, but it fell short of breaking above the highs.  With a week of daily reversals behind us and facing a week of market-moving data, we could have about anything happen.  Technically the indexes are in good shape, but last week’s wild daily reversals provided clear evidence of just how dangerous this market can be with all the emotion it has generated with the big point moves.  Good reports, and we could easily see considerable gaps in the market open.  Should something stumble, be ready for the exact opposite as possible. Put on your big-boy pants and lace up some flexible shoes, because anything is possible!

Trade Wisely,

Doug