***Notice due to a Windows Update I’m currently unable to record the Morning Prep Video. I will work on the problem but if I can get it fixed the video will be late. Sorry for the inconvenience.
Speculation that elected officials will eventually get their act together and agree on a stimulus package continues to elevate the indexes pointing to another gap up open. Pelosi and Munchin continue to talk, but it’s unclear if the President will reverse his thinking and support a big package deal. One thing for sure is that this creates a dangerously volatile market condition that’s more akin to gambling as traders bet on the possible outcome. Consider your risk carefully as we head into a weekend with incredible uncertainty as to what happens next.
Asian markets wrapped up their week with mixed but mostly lower results by the close. European markets are also cautiously mixed as they monitor US stimulus efforts. However, US Futures point to another gap up open as hope of a deal continues to inspire bullish speculation despite the dangerous consequences of news-driven extreme volatility.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have no confirmed reports; thus, there are no notable reports.
News and Technicals’
Markets held up yesterday after Speaker Pelosi made it clear there will be no stimulus bull that does not include a broader response, including aid for cities and states. However, Munchin and Pelosi spoke on Thursday to resume negotiations, but at this time, it’s unclear if the White House will accept a broader proposal. With the upcoming Supreme Court appointment hearings, there is little time to hammer out a deal before the election. Still, the market itself is holding on to hope, and lifting the indexes higher speculation an agreement is forthcoming, setting the stage for incredible volatility and sensitivity to the Washington spin cycle. Betting a deal will come together could prove profitable but could prove very painful should they fail, and traders wake up to gap down overnight reversal. Consider your risk carefully heading into the uncertainty of the weekend.
Technically speaking, the index charts are bullish as they work to break recent price resistance levels. That said, volatility remains very high, making the path forward quite dangerous as we wait on politicians to get their act together. A big ask this close to a presidential election. Anything it possible, and trading in this environment is more than gambling. If you do trade, measure the risks carefully, avoid overtrading, and be willing to pivot on a moment’s notice.
Stimulus hopes once again fueled the bulls to surge right back into price resistance levels after the President stated he would support $1200 direct payments to taxpayers and another 25 billion for airlines. However, it’s unclear at this time if Congress can come to an agreement before the election. Should they fail, it could quickly produce another whipsaw down, so plan your risk carefully because price support levels are now quite a long way away.
Asian markets closed mixed but mostly lower overnight. However, European markets show some relief trading green across the board as they monitor US stimulus hopes. Ahead of the latest reading on Jobless Claims, US Futures look to extend yesterday’s significant reversal pointing to another gap up open with $1200 stimulus checks hopes dangling before them.
Economic Calendar
Earnings Calendar
We have our biggest day of earnings this week, but still, only 9 confirmed quarterly reports. Notable reports include AYI, CCL, DPZ, & HELE.
News & Technicals’
With the hopefulness of more stimulus, the market surged back into price resistance, pushing the T2122 indicator back into a possible overbought condition. The President stated he is willing to sign a stand-alone bill that would send $1200 check to taxpayers and will support a 25 billion package for airlines. As of now, it’s unclear if or when Congress will proceed with the requested spending bills, but the anticipation has the bulls running. Regeneron has asked for emergency approval for the coronavirus treatment taken by the President. In a statement, the President said he intends to make the virus vaccine free to US Citizens and, in the same breath, blamed China for the pandemic.
Closing at or near price resistance levels yesterday, the US Futures look to extend that rally this morning, pointing to yet another gap up open. Yesterday’s rally significantly improved the technical picture in the index charts with the SPY and QQQ recovering their 50-averages as support. That said, the huge reversal also adds significant risk for those chasing the rally with price support so far away. The market has proven its sensitivity to the news report on the subject of the stimulus. Stay focused, and remember we are only one tweet or one news story away from another possible whipsaw back down. Plan your risk carefully! The stimulus is not a done deal and there is concern that Congress may not agree before the election. The market will be focused on the Jobless numbers calendar this morning and could change how the market opens this Thursday so, prepare for more volatility.
It’s off, no, it’s back on! Yesterday’s nasty whipsaw demonstrated just how sensitive, emotionally charged, and dangerous the Presidential election’s path forward has become. I want to say I believe the worst is behind us, but I don’t think that’s right, and traders could be caught in the crossfire. With so much wild volatility, it is nearly impossible for swing traders to maintain an edge, and sadly that may be the case through the election. The path forward is clouded in uncertainty, so plan your risk carefully or choose to stand aside until the clouds lift.
Asian markets closed mixed but mostly lower overnight in reaction to US Stimulus news. European markets trade in the red across the board this morning as stimulus fears weigh on the investors. Ahead of a big day of Fed speak, and the FOMC minutes, US Futures once again point to a significant gap in hopes that at some stimulus may still be on the horizon.
Economic Calendar
Earnings Calendar
On the Wednesday earnings calendar, we have just seven verified quarterly reports. Notable reports include LW, RPM, & SAR.
News & Technicals’
Yesterday I titled the blog “Silly Season” but had no idea just how correct that sentiment would become. As I’m sure you all know, the President pulled out of stimulus negations suggesting the other side was not working in good faith. However, this morning, the President asks Congress to move forward on a bailout deal for airlines and direct $1200 payments to the citizens removing money for what he calls mismanaged states. Nonetheless, the action created a nasty whipsaw yesterday with the market having already priced in a stimulus deal. I wish I could be confident the market turmoil and uncertainty is over. Sadly, I think there is a genuine possibility the political uncertainty and market sensitivity to the news cycle will continue through the election. After the bell yesterday, House Democrats accused Facebook, Amazon, Apple & Alphabet of having monopoly power, recommending significant changes and challenges could be on the way for the tech giants. With these companies holding huge index weight, market growth may become problematic if the political pressure grows.
As a result of yesterday’s whipsaw, the SPY and QQQ closed back below their 50-day moving averages. However, with the hope of some stimulus still on the horizon, US Futures are poised for a bullish open that could recover these critical psychological levels today. That said, be prepaid for move wild price volatility ahead. We still have price resistance above in the index charts to deal with and a path forward fraught with high volatility danger as the political silly season come into full bloom.
With the election silly season in its final stretch and the President back at work, expect the political spin and uncertainty of what happens next to keep the price action volatile and the overall market on edge. The CDC is warning that the virus can spread through airborne transmission and infect others more than six feet away. Joe Biden is calling for the President to institute a national mask mandate. A tweetstorm is surly to soon follow on the subject.
Asian markets closed mixed but mostly higher as Australia’s central bank held steady on their interest rate policy. European markets are trading with modest gains across the board as the US futures point to flat open ahead of economic data and a speech from Jerome Powell.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just three confirmed earnings reports. Notable reports include PAYX & LEVI.
News and Technicals’
The President is back in the White House medical unit while still recovering and is already receiving negative feedback for returning to work while still infected. Joe Biden says the President bears responsibility for Covid-19 infection and calls for a national mask requirement. With just four weeks until the election, I suspect both candidates will raise the bar on politicalizing the pandemic. The CDC has now acknowledged that the virus spread through airborne transmission that infected others more than 6′ feet from one another. Google has rebranded its office tools as Workspace as it goes head to head with Microsoft Office working to gain market share as more and more people are working from home. A trend I suspect will continue over the coming years. According to reports, teen spending has dropped to a two-decade low as the pandemic pressures have affected their parents and dramatically cut service jobs that teens often hold.
After a surge of buying pressure yesterday, indexes reached out to test price resistance levels in the indexes pushing the T2122 indicator into a short-term overbought condition. IWM experienced the most significant technical improvement on the day with oil and financial sector stocks bouncing up from recent lows. Futures struggled around that flatline most of the evening and continue to this morning, although they well off their overnight lows. After partying hard yesterday, it’s possible, the bulls need a little rest, but let’s hope the bears are not fortified in the price resistance above ready to attack. With a light day on the earnings calendar, economic reports, Jerome Powell’s speech, and the stimulus news spin will likely keep the pice volatility high.
After a choppy news-driven choppy week of price action, last week with an ugly GDP, layoffs, and slower than expected job recovery, the bulls did a good job or defending price support. Most notable last Friday was the bounce in the financial and energy sector, giving the IWM the power required to break above its 50-day average. However, with the uncertainty of the presidential election and still no deal on a 5th stimulus package, it may be too early to sound the all-clear just yet. Expect price volatility to remain considerably choppy.
Asian markets closed mixed but mostly higher overnight, reacting to a bounce in oil prices. European markets are higher this morning across the board, and the US Futures point to a substantial gap up at the open as the market tracks the president’s health. With a light economic and earnings calendar, price action may be particularly sensitive to the news cycle, so remain focused and flexible.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have just one unconfirmed possible earnings report today PRED. It’s a penny stock company and not notable as market-moving.
Unable to agree on a stimulus deal, the futures were already pointing to a bearish open. The news that the President and the First Lady tested positive for COVID-19 added another layer of uncertainty for the path forward. Will the bull show the strength to defend the 50-day moving averages on the DIA, SPY, and QQQ or will the bear regain control of market direction? As we slide into the weekend, there seem to be more questions than answers for traders to grapple with, suggesting a volatile day of price action awaits.
Asian markets in a choppy session closed mixed but mostly lower overnight. European markets are lower across the board, with the DAX down 1% in reaction to the uncertainty ahead. Ahead of the Employment Situation number, US Futures point to a nasty gap down of more than 300 Dow points. With the path forward clouded in uncertainty, weigh your risk carefully as head into the weekend.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have eight companies on the list, but apparently, all of them are unconfirmed. Consequently, we have no notable reports today.
News & Technicals’
A choppy Thursday market session as we waited to hear deal or no deal on a fifth stimulus package. Failing to come to an agreement, the House moved forward, passing their 2.2 Trillion plan that has little to chance of getting past the Senate. According to reports, the two sides will continue to talk, but with congress about to recess, hopes that a deal has diminished. US Futures slipped into the red during the evening as a result. Then we heard the news the President and the First Lady tested positive for Covid-19, and futures quickly plunged 500 points. They have recovered from early morning lows, but the uncertainty about what comes next has the market facing a nasty gap down this morning.
Having recovered their 50-day averages, it will now be a critical test for the bulls to defend the level as support. A fall back below this crucial psychological level will damage the index chart technicals and could threaten the overall market confidence. Today we get a reading on the Employment Situation numbers before the bell, so get ready for a volatile morning of price action and carefully consider your risk as we head into an uncertain weekend.
Stimulus hopes created a big short squeeze rally, but the uncertainty yesterday afternoon made tremendous price volatility as market sentiment swung violently. Renewed hopes once again have US Futures pointing to a big emotional morning gap, but traders will have to be on guard for more wild price swings driven by political news sensitivity. Adding to the potential volatility is a big day of economic reports that can potentially move the market substantially.
Asian markets had a rough overnight session with the NIKKEI closed due to an electronic system failure. European markets are cautiously bullish this morning as they track developments on the US stimulus package. Ahead of a busy economic calendar, US Futures point to Dow gap up as traders speculate on a stimulus agreement. It could be a wild ride today so stay focused and flexible.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have another light day with just 9-confirmed reports. Notable reports include CAG, PEP, STZ & BBBY.
News and Technicals’
Hopes of a new stimulus bill and some end of quarter window dressing fueled a substantial short squeeze yesterday. Unfortunately, the day ended with tremendous price volatility when the House delayed the vote on the 2.4 trillion dollar plan. The President has extended an offer for 1.2 trillion, so the standoff continues today. Airlines are moving forward to Furlow around 38,000 employees today, saying they will reverse the decision if another 20 billion in bailout funds, that’s part of the stimulus plan, is approved. The Senate passed, and the President signed a spending bill after funding briefly lapsed, avoiding a government shutdown. Asian markets had a tough night with trading suspended for a full session due to a failure in the Tokyo fully electronic system. Apparently, the backup system all failed as well.
With some hope renewed on a stimulus bill, US Futures point to another big gap-up open this morning. Traders will have to stay on their toes as any news coming out the Washington spin cycle could crate quick price reversals should congress fail. The big move yesterday improved the technicals of the index charts pushing the DIA and SPY above their 50-day averages and increased the risk due to the substantial political uncertainty. Facing another big day of economic reports, prepare for anything as this wild rollercoaster ride continues.
Heading into a big data deluge for the next 3-days the last thing we need was to hear was 28,000 job losses at Disney, 9000 from Shell that will add to the 10’s of thousands of airline workers that could lose their jobs tomorrow if billions in bail money is not approved in the next 24 hours. Expect the considerable price volatility and investor uncertainty to remain with us for the rest of the week if not through the election. As far as the debate goes, all we confirmed is the embarrassing behavior of our leaders.
Asian markets closed mixed but mostly lower overnight, and European markets trade cautiously bearish this morning with modest losses across the board. US Futures have bounced off overnight lows ahead of economic data and a very light day of earnings reports. Stay focused as we test resistance in the indexes as downtrends remain intact.
Economic Calendar
Earnings Calendar
On the hump day earnings calendar, we have a light day with just six companies expected to report. The only notable report is the gold miner NG.
News & Technicals’
As we head into October, the market focus will turn toward job numbers over the next 3-days. After the bell yesterday, Disney announced a layoff of 28,000 employees. Unless airlines receive billions in bailout money in the next 24 hours, 10’s of thousands of airline employees join the unemployment line. Adding insult to injury, Shell also announced 9000 job cuts as the oil sector continues to suffer impacts from coronavirus. US Futures remained bullish during most fo the Presidential debate, but after it ended, they began to sell-off. I’m not sure we learned anything in the argument that the market didn’t already know but rather sold off merely from the embarrassment of it all. Today before the bell, we will get a jobs reading from the ADP, a GDP report that’s likely to remain to be quite ugly, PMI, Pending Home Sales, and the Petroleum Status numbers. That said, expect more volatility and uncertainty heading into the close with another busy economic calander of market-moving reports on Thursday.
Yesterday’s price action seemed to reflect the uncertainty of the debate and the data deluge ahead, chopping in a rage with equally matched bulls and bears. The DIA, SPY, and IWM remain in downtrends while the QQQ tries to lead the market higher, holding on to its 50-day average by the close. However, with so much data coming our way, anything is possible, so stay focused and flexible.
Yesterday’s rally was a tremendous relief from the selling pressure, but with the indexes thrusting up into price resistance levels all in one move, it also creates a tough decision for traders. Do you buy with the fear fo missing out at the price resistance where a reversal back down could occur, or do you wait for a lower risk entry? Tough decisions with a big week of economic data, coronavirus concerns, and massive political dramas on several fronts adding a hefty dose of uncertainty to the mix. Choose carefully because the next big swing could occur at any time.
Asian markets closed the day mixed but modestly higher in a choppy session, reflecting the uncertainty ahead. European markets after a big relief rally yesterday are in pulling back with Brexit issues and US politics, creating a bit of caution. US futures pulled back from evening highs, shifting slightly negative, but as we approach the open, they have become quite choppy ahead a light day of earnings reports and economic data.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have a light day with just 11 companies reporting quarterly reports. Notable reports include INFO, MKC & MU.
News and Technicals’
I’m running behind this morning, so this will be a short and sweet report. Yesterday was a nice rally, but unfortunitually, it didn’t change the technicals of the index charts. Pushing back into downtrends and price resistance can easily make us feel as if we’re missing out, and we make the mistake of buying at price resistance and breaking our trading plan rules. Though this could be the beginning of a rally that will extend higher, it could also be nearing the high point or failure point to continue the existing downtrend. Big tech seems to have the best chance of leading us higher, but the high price volatility, morning gaps, and overnight reversals require us to have a higher tolerance for risk.
The T2122 indicator went from oversold to nearly overbought in one fell swoop, and one has to consider the possibility that a similar reversal back down is equally possible. That creates a significant conflict in a trader between the fear of missing out and large potential losses that can quickly occur with such high volatility. The only way I know to resolve that conflict is to stick to your plan and follow your rules. Remember, your plan helps you make money; your plan helps you protect your capital. We have a lot of data coming our way in the next few trading days, so plan your risk carefully and expect the wild price volatility to continue for the foreseeable future.
Last Monday, a punishing gap down for those holding long positions, so I guess its only fair to punish those who held short positions over the weekend with a massive gap up this morning. Anyone else tired of this all or nothing, whipsaw morning gap market? Sadly I suspect there is more to come this week as we face an economic calendar chalked full of market-moving events and enough political drama churning in the news to all investors on edge. If that’s not enough, let’s toss in rising pandemic numbers for an additional dose of uncertainty.
Asian markets closed mixed but mostly higher overnight following reports of US sanctions as tech tensions continue to rise between the US and China. European markets are decidedly bullish this morning, with HSBC bouncing more than 8% on the day. US Futures are wildly bullish this morning, suggesting a Dow gap of more than 300 points to test its 50-average as resistance. With so much data coming our way, expect another week of wild price volatility to challenge traders!
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 19 companies reporting quarterly results. Notable reports include CALM, SINA, THO, UNFI, & WB.
News and Technicals’
Last Monday, the market gapped down huge, so I guess it only makes sense that the futures are pointing to a considerable gap up this morning. The President’s taxes dominate the news cycle this morning with the NYT reporting that he paid no taxes for several years due to business losses. Is should make for some great political drama in the Presidential debate scheduled for tomorrow. A federal judge has temporarily blocked the administration’s ban on new TikTok downloads form US app stores. However, the much broader ban is set to come into effect on Nov.12th was not part of the judge’s order, so expect this more turbulence with the tech tensions between the US and China. Speaker Pelosi still believes there is a chance to pass a stimulus deal, but the other side of the aisle appears much less optimistic that a compromise can be struck. Treasury yields are on the rise as signs of a worsening pandemic worldwide and hear in the US keep investors on edge as to what comes next.
Looking that futures this morning, one would guess there must have been some big news to drive such a surge upward this morning. If there is, it has escaped me! In fact, we face a very uncertain week ahead with a full economic calendar, a GDP number expected to come in pretty ugly on Wednesday, and the Employment Situation on Friday, not mention all the political drama churning up emotion as the election approaches. The bullishness this morning is nice to see but keep in mind the significant price resistance above that includes 50-day moving averages. Traders will have to stay on their toes for a possible short squeeze triggered by the morning gap or the equally likely pop and drop that could occur at resistance. Please fasten your seat belt tightly; it could be a bumpy ride ahead.
