Another day and another record close for the DIA, but it’s not all the sunshine and roses the bulls hoped for as the NASDAQ continues to languish below the 50-day average. With the 10-year Treasuries topping 14-month highs this morning, inflation worries could once again weigh heavily on the tech sector, adding an uncomfortable level of market uncertainty. Leaving behind a mixed bag of results in the indexes, it’s hard to be a committed bull and just as hard to be a committed bear. That said, traders should prepare for more volatile price action such as intraday whipsaws or complete reversals.
Asian markets closed with modest gains across the board overnight, with the HSI leading the way up 0.84%. European markets are also bullish across the board this morning, showing modest gains. With bond rising and a Consumer Confidence report at 10 AM, Eastern U.S. futures currently point to a mixed open. Stay focused and flexible as investors sort out their inflation concerns.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 76 companies listed, but a significant number of them have not verified once again. Notable reports include CHWY, BEEM, BNTX, BB, FDS, LULU, MKC, PVH, QUWI, & XL.
News and Technicals’
Another record close of Dow after a choppy price action day with the VIX climbing back above 20 handles. The 10-year Treasuries is once again pushing higher, hitting a 14-month high touching 1.77%. In a joint letter published in newspapers worldwide, global leaders called for a pandemic treaty to improve cooperation and transparency. Signers to the letter included Prime Minister Boris Johnson, French President Emmanual Macron, and German Chancellor Angela Merkel. The U.S., China, and Russia have not signed on the Idea as of now.
We had a mixed bag of results in the indexes yesterday, with the DIA closing at record highs while IWM left behind a bearish evening star pattern. The bulls fought pretty hard in the QQQ lifting the index to its downtrend, printing an unconvincing hanging man pattern at resistance as it continues to struggle beneath the 50-day average. Recovering from early losses, the SPY tried to breakout but by the end of the day settled back to close below Friday’s close, unable to follow-through but perhaps just taking a rest above a price support level. Unfortunatunally, the VIX popped back above 20 handles, and the absolute breadth indicator indicated a lack of bullish momentum with more stocks declining or moving sideways than rising. Futures are mixed this morning, with rising bond rates likely rising inflation concerns once again. A few notable earnings reports and a reading on Consumer Confidence numbers are ready for yet another day of volatile price action.
The Dow set a new record high with a last-minute surge as the dark pool activity consolidated to the market. Both the DIA and SPY are in good technical condition, while the QQQ struggles in a downtrend. With a light day on the earnings and economic calendar, the market may be a bit more sensitive to the news cycle today. According to the VIX, fear is finally declining, but as traders can attest, the wild whipsaws in price action remain challenging. Plan your risk carefully as that condition is likely to continue.
Asian market closed higher in a volatile session with Nomura shares plunging 16% due to a U.S. hedge fund. Credit Suisse is also sliding sharply across the pond as European markets trade modestly higher with the U.K. relaxing pandemic restrictions. The U.S. futures point to a lower open this morning but are well off of overnight lows. Be careful chasing, and don’t be surprised if overnight lows receive a test as support.
Economic Calendar
Earnings Calendar
To kick off the last 3-days of the quarter, we have 69 companies listed on the earnings calendar, with a large number of them unconfirmed. The only verified potential notable report is from CALM.
News and Technicals’
With an end-of-day surge as the dark pool trading consolidated to the market, the DIA reached a new record high, and the SPY cleared some price resistance. President Biden is under pressure considerable pressure with more than 100,000 illegal immigrants crossed the border in February. Biden is also intending to push for the 4 trillion dollar infrastructure plan before moving on to his next phase of health and family care. Let’s hope we don’t run out of ink to keep printing money! A draft study jointly written by the WHO and China says animals are the likely source of the Covid outbreak. While France and Germany face a deteriorating public health situation, the U.K. is relaxing its restrictions allowing up to six people to meet outdoors. According to reports, the massive container ship stuck in the Suez Canal is not partially floated. Still, there is no indication of how long it will take to complete the operation and resume business.
On the technical front, the indexes got a big shot in the arm in the last few minutes of trading. The DIA managed a new record high by a few ticks, and the SPY lept above some concerning price resistance. At the same time, the QQQ lagged, remaining in a downtrend, as did the IWM. After another wild session, the VIX closed below a 19-handle, suggesting fear is diminishing, but clearly, the wild intraday whipsaw continues. In this all-or-nothing market, the T2122 indicator went from an oversold to indicating a possible overbought condition in just two trading days. As the morning pump begins, futures are well off of overnight lows but, as of now, suggest a lower open. I suspect another wild week of price is ready to begin.
The big question of the day, can the bulls follow-through with yesterday’s nice relief rally clearing some of the overhead price resistance? A weak 7-year bond auction has treasury yields ticking higher this morning to worry investors about coming inflation pressures. Additional pressures of the already strained supply chain may factor with the blockage of the Suez Canal that could take weeks to clear. Be careful not to chase or overtrade and remember as the futures pump up the open the pop and drops that occurred all week.
Asian markets caught some seeling relief overnight, seeing green across the board to end the week. European markets are also seeing some modest relief this morning following a better-than-expected global sentiment report. Ahead of possible market-moving economic reports and a light day on the earnings calendar, the bulls are working hard in the futures to continue yesterday’s bounce.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have a light day with 36 companies listed but only a handful of verified reports. There are no notable reports today.
News & Technicals’
Markets enjoyed a nice relief rally yesterday despite some concerning news. North Korea has kicked up its heels again, firing two ballistic missiles increasing the foreign policy challenges for President Biden. A blockage in the Suez Canal is delaying an estimated $400 million in goods every hour, adding worries to an already strained supply chain. Estimates suggest it could take weeks to clear the blockage. Social Media once again came under fire as pressure increases to change laws placing liability on the company for the content posted. I suspect substantial social media changes are on the way.
The challenge for the market today is follow-though with yesterday’s relief rally bounce. The DIA held nicely on its uptrend, and the SPY, through briefly falling below its 50-day average, proved to hold this critical psychological level by the close. As nice as it was to see the bulls fighting back, they still have some substantial overhead resistance hurdles in their path. The 10-year treasury is ticking up this morning to 1.65% after a weak 7-year bond auction. Big tech could continue to struggle with the rising yields and the growing political pressure they face in congress. Futures suggest a bullish open ahead of potentially market-moving economic reports, so be ready for volatility. As we know, the morning pump has created nasty whipsaws in price action this week. Stay focused and flexible.
Treasury yields are rising this morning after another frustrating whipsaw spanning more than 600 Dow points closing all four indexes lower on the day. Lower highs and broken price support levels in the SPY, QQQ, and IWM should raise caution levels while the DIA continues to enjoy bullish leadership. With the Powell speaking tour behind us, keep a close eye on those treasury yields, and overhead price resistance as the indexes search for direction and momentum.
Asian markets closed mixed overnight, with tech suffering significant losses with the SEC adopting a new law that could delist Chinese companies from U.S. Exchanges. European markets trade modestly red as another pandemic lockdown weighs on investor sentiment. Ahead of the GDP and Jobless Claims futures at trying one again to pump up premarket.
Economic Calendar
Earnings Calendar
The Thursday earnings calendar has 70 companies stepping up to report, but there are many unconfirmed numbers. Notable reports include BLNK, DRI, MOMO, MOV, & CLDX.
News & Technicals’
Treasury yields are pushing slightly higher again this morning, trying to hold onto bullish trends despite the very dovish Fed. AstraZeneca revised its vaccine data, indicating a lower efficacy rate after being called on the carpet for releasing outdated data. The SEC has opened an inquiry into a special purpose acquisition company (SPACs). The SEC is asking banks to provide information voluntarily, but according to the enforcement division, it could be a precursor to a formal investigation. There will be another hearing today in Congress as the CEOs of Facebook, Google, and Twitter face more questions about the spread of misinformation across social platforms. Chinese tech stocks have a rough night after the SEC adopted a law called the Holding Foreign Companies Accountable Act on Wednesday. Companies unwilling to meet the provisions of accounting could be de-listed from U.S. stock exchanges.
Yesterday proved to be another disappointing whipsaw that covered more than 600 Dow points. Although the technical damage is not severe except in the tech sector, investor confidence is taking some damage as the wild swings continue to chop up trading accounts. That said, the futures are once again working to pump up today’s open even after a rough night for Asian markets and a very cautious start in European indexes. As long as traders are willing to chase the moring pump, there is no reason it can’t continue. Swing and position traders I likely finding this price action very frustrating, while experienced day traders are likely having a field day with the huge whipsaws. We are finally past the Powell speaking fest but face the potential market-moving economic reports of GDP and Jobless Claims before the open. Remember, one of the great thing about being a trader is that we can choose to stand aside protecting our capital when feel you have no edge. Just because the market’s open does not mean you have to put money at risk. Ask yourself, are you addicted to risk, or does your action constitute a good business decision?
Elon Musk says you can now use bitcoin to your new Tesla, and at the same time, a Central Banker calls for more regulation on cryptocurrencies. Hmm. Yesterday’s selling came as worries over pandemic infection rates rise around the country, diminishing hopes of a summer recovery. Unfortunately, the selling added to the technical damage in the index charts. The bulls will have a lot of work ahead of them to recover overhead resistance levels in the SPY, QQQ, and now the IWM. Be careful as this choppy and whipsaw-riddled price action tends to chop up trader’s accounts.
Asian markets retreated overnight, closing red across the board with the NIKKEI and HIS down more than 2%. European markets trade with modest losses across the board as recovery concerns weighs on investors. However, here in the U.S., the premarket futures point to bullish open ahead of earnings, Durable Goods Orders, and another round of Powell testimony. Expect the choppy price volatility to continue.
Economic Calendar
Earnings Calendar
On the hump day earnings calendar, we have 53 companies listed, but only half verified they would reveal quarterly results. Notable reports include KBH, GIS, FUL, RH, SCVL, TCEHY, WGO & WOR.
News & Technicals’
You can now buy your new Tesla using bitcoin, but Agustin Carstens from the Bank for International Settlements calls for regulation of what he called a ‘’speculative vehicle’. Interesting considering many central banks are actively exploring their digital currencies. Intel is working hard to get back on top with plans to make chips for other companies and spend 20 billion to build two new chip plants in Arizona. The wildly speculated GME shares fell 12% as the company said it might sell stock to fund a transformation. During the conference call that at one point reached maximum capacity, the company declined to answer any questions. No surprise that the company missed on both the top and bottom line.
Yesterday was a disappointing day in the indexes as the bear returned, adding more technical damage to the charts and essentially reversing the bullish hope of just one day ago. The culprit this time is the rising infections across the U.S. and lockdown in Europe as recovery hopes diminished. However, this morning the bulls are once again trying to pump up the sentiment in the premarket. We have Powell speaking again today, and so far, he seems to have calmed the bond market with his extremely dovish comments. In this choppy market environment, I’ve been hearing from many traders having their accounts chopped to pieces. The super bullish momentum has faded, making this a stock pickers market. Chasing and complacency are very dangerous.
The possible inclusion of outdated data in its vaccine trial has AstraZenica back in the headlines this morning. After a nice relief rally that printed bullish morning star patterns in the SPY and QQQ, U.S. futures now suggest a follow-through to confirm the pattern could see a challenge by the bears. With a joint effort to sanction China by the U.S, EU, UK, and Canada, markets hold their breath, wondering what the Chinese retaliation could entail. Though Powell’s comments softened Treasury yields yesterday, they remain in bullish trends, so keep an eye on them.
Asian markets closed lower overnight after a choppy session, responding to a lackluster Baidu debut in Hong Kong. Across the pond, European markets trade with modest losses across the board as the new lockdown measures shake recovery sentiment. Ahead of earnings, New Home Sales, and another big day of Fed speak, futures markets point to some modest bearish pressure at the open. Stay focused.
Economic Calendar
Earnings Calendar
The Tuesday earnings calendar has 49 companies listed, with 35 verified reports stepping up to quarterly results. Notable reports include GME, CHWY, ADBE, HOME, HUYA, INFO, & SCS.
News and Technicals’
AstraZenica is back in the news this morning but for the undesirable reason that they may have included outdated data in the vaccine trial. This morning, Tesla also has some undesirable news for firing an employee that is part of a whistleblower complaint to the federal safety investigation over solar fires. In a coordinated action, the U.S., EU, UK, and Canada imposed sanctions on Chinese officials on Monday. The countries cited human rights abuses which, of course, China has denied. We wait for the Chinese retaliation that will likely add tensions between the countries with trade ramifications possible.
Yesterday’s rally was a nice relief as the Powell comments softened bond yields. However, the treasuries remain in bullish trends that we will have to keep an eye on due to the market implications. The SPY and QQQ left behind morning star type patterns, but futures markets currently suggest the indexes may have some trouble following-through bullishly due to U.S./China tensions. Selling pressure in the financial sector and energy sector added minor technical damage to the IWM, putting in a possible lower high at price resistance yesterday. Further selling could intensify the concerns today. Keep in mind the SPY, QQQ and IWM now have overhead price resistance that must clear if it is to resume the rally. Stay focused and flexible.
With the third wave of infections expanding across Europe, the country has gone back into lockdown. However, recovery hopes and the massive stimulus are on investors’ minds here in the U.S., with officials monitoring the rising cases in 21 states. With the 10-year treasury softening, perhaps the NASDAQ can gain enough relief to challenge its 50-day average as resistance. Though the DIA, SPY, and IWM left a reason for caution selling-off into Friday’s close, the bulls still control the trends. With Powell speaking three times this week and a busy economic calendar, price volatility is likely to remain high.
Asian markets closed the day mostly lower as the Turkish Lira weakens sharply. European markets are trying to shake off the 3rd lockdown as they chop around the flat-line this morning. U.S. futures are mixed up well off overnight lows as the morning pump begins ahead of Powell and the Existing Home Sale number. Plan carefully and avoid complacency.
Economic Calendar
Earnings Calendar
Monday, we have 60 companies on the earnings calendar, but only 13 have verified their reports. Notable reports include NEWT, SNX, & TME.
News & Technicals’
As we begin the week, Europe is back under lockdowns as the third wave of infections dash hopes for a spring recovery. Sadly, infections are reportedly rising in 21 states, with officials warnings against reopening too quickly and relaxing masking requirements. Canadian Pacific railway will buy Kansas City Southern for $25 billion if approved by regulatory agencies creating the first rail network connecting the U.S. and Canada. Treasury yields have softened slightly this morning, but according to Jim Bianco say it will not last, expecting they will heat up again in the second half of the year as the U.S. recovers economically.
Although Friday markets found sellers into the close, the DIA, SPY, and IWM are technically in pretty good shape, even though the candle patterns warrant a little caution. The QQQ remains the most technically vulnerable, having failed at a lower high below its 50-day average. Although we got past the FOMC announcement last week, we have a Fed speaker parade, including Jerome Powell Monday, Tuesday, & Wednesday. With Europe back in lockdown, futures are trying to rally off of overnight lows ahead of Powell’s speech and the latest reading on Existing Home Sales.
The calming words and dovish Fed policy meet with a feisty bond market worried about inflation, creating a failure of the 50-day average as techs suffered. Rising bonds engaged the bear in the market around the world during the night, even as a flurry of institutional reports try to calm fears. The good news is that bond rates have softened slightly this morning, allowing the future to breathe a sigh of relief. With concerning candle and price pattern in the charts to overcome the bulls will have to work overtime.
Overnight Asian markets closed the week with red across the board due to inflation worries. European markets also see red across the board this morning, spooked by the rising bond rates. However, here in the U.S., futures markets are green across the board, trying to put a brave face on concerning situation. Keep an eye on those bond prices and remain flexible.
Economic Calendar
Earnings Calendar
We have a light day on the Friday earnings calendar with less than 30 companies, but of those, there are only eight verified reports. With mostly small-cap companies reporting, the only notable I can come up with is ERJ.
News & Technicals’
Feisty bond markets seemed to reject the calming words of Jerome Powell as worries of inflation pushed bond rates higher. Markets around the world have also reacted negatively, but the bulls are pushing back this morning after a flurry of institutional reports trying to calm nerves. The first U.S. – China meeting under the new administration began with long-winded speeches criticizing each other and flinging insults. It will be interesting to see how the meeting progresses today. The 10-year Treasury yields are moderating slightly this morning after touching a 14-month high bring a sigh of relief to the futures. Amazon has become the new home of the NFL after closing an 11-year media rights deal for Thursday night games. The U.S. House passed two immigration bills yesterday afternoon that creates a path to citizenship for millions setting up a fight in the Senate.
Yesterday’s selloff raises the level of caution, leaving behind potential bearish candle and price action patterns on the index charts. However, the bullish trends in the DIA, SPY, and IWM still exist, with the bearish failure of the QQQ at its 50-day average making up the bulk of the concern. Should those pesky bonds remain elevated, the tech sector could continue to struggle. Unfortunately, we have inserted the tech giants into the DIA and SPY indexes and given them a tremendous weight in the average. Should they continue to struggle, so could the overall averages. It would be wise to keep an eye on the bond market and avoid complacency.
Jerome Powell waved his exceedingly dovish magic wand, calming a worrisome market with intentions to hold near-zero interest rates until 2024. As a result, the DIA and SPY surged off of intraday lows to ink new record highs. Despite his efforts, the 10-year treasury trades higher this morning, touching 1.74% as inflation worries linger. That said, the QQQ remains the worrisome index with significant overhead price resistance though it squeaked out a close above its 50-day average. The best we can do as traders is to stay with the trend and avoid becoming complacent.
Asian markets surged overnight after the dovish Fed comments, with the HIS leading the way up 1.28%. European markets trade mixed with the DAX up over 1% while the FTSE and CAC hover near the flat-line. With earnings and Jobless claims and those pesky rising bond rates, the U.S. futures have bounced off of overnight lows in the premarket pump yet still point to a mixed open.
Economic Calendar
Earnings Calendar
We have 90 companies on the Wednesday earnings calendar, but a good number of them are unverified reports. Notable reports include CAN, CSIQ, DXLG, DG, DLTH, FDX, NKE, OLLI, WOOF, SCHL, SIG, UTZ, & WB.
News & Technicals’
After the Fed’s dovish comments that expect to hold interest rates near zero until 2024, the DIA and SPY inked new record highs. Unfortunately, the 10-year Treasury yield continues to rise, reaching 1.74% as investors worry about inflation. The European central bank chimed in to echo the Fed, saying they will not react to short-term inflation increases. The IRS announced yesterday they would move the regular April 15th tax deadline to May 17th to help with the taxation changes. Just in time to take advantage of the stimulus payments, Apple is reportedly preparing to roll out high-end iPads ahead of its usual release cycle. According to reports, GOOG plans to spend $7 billion to construct new data centers and office space in 2121.
On the technical front, the trends in the DIA, SPY, and IWM remain in good condition after the modest selling that occurred ahead of the Fed announcement. Though the QQQ squeaked out a close above its 50-day average, it remains the weakest of the indexes faced with considerable overhead resistance. If big tech continues to struggle with the rising bond rates, it could be an interesting challenge for the indexes due to the heavy tech weighting. We may have to consider the possibility of longer-term overall market consolidation as investors weigh inflation worries against the exceedingly dovish Fed. With Jobless Claims numbers in focus, the U.S. futures point to a mixed open.
Jerome Powell has a difficult task today as he attempts to walk a tightrope of rising inflation concerns and economic recovery. The 10-year Treasury yields hitting new highs ahead of the announcement raises the stakes, and the entire world economy is watching. Congress will have its own balancing act to perform today in a hearing to deal with illegal border crossings that have hit record highs. Stay focused and flexible because anything is possible as we wait on the data.
Asian markets closed mixed but mostly lower in a choppy cautious session as they monitor the FOMC. European indexes also trade cautiously this morning, bounding around the flatline as they wait on the Fed decision. Ahead of a big day of data, U.S. futures appear to be treading water near the flatline ahead of earnings and potentially market-moving reports. Buckle up!
Economic Calendar
Earnings Calendar
We have 65 companies listed on the Wednesday earnings calendar, but a significant number of them are unconfirmed. Notable reports include AOUT, CTAS, FIVE, MLHR, LE, RIDE, OTCM, PDD, WSM, & ZTO.
News & Technicals’
The pressure on Jerome Powell today as he attempts to walk a tightrope between Washington and Wall Street. The fireworks begin at 2 PM eastern with the FOMC statement followed by the press conference at 2:30. Treasury yields have hit a 13-month high this morning ahead of the Fed decision. Simultaneously, the pandemic is improving here in the U.S.; German cases are rising exponentially. A reminder that we may still have a long road ahead of us in the battle against Covid-19. Italy and France have decided to restart AstraZeneca vaccinations they recently stopped due to blood clotting concerns. There will be in hearing in Congress today as illegal border crossings hit record numbers. Democrats frame it as a minor problem while Republicans suggest it’s an all our crisis. It should be an exciting day of political pandering and soundbites.
Markets paused yesterday, somewhat holding their breath as we wait on the FOMC decision. Yesterday’s economic data was a bit disappointing, and today we get the latest reading on Housing Starts and the status of Petroleum reserves. Though potentially market-moving, all eyes will be on Jerome Powell’s tightrope walk later this afternoon. The DIA, SPY, and IWM indexes remain in good condition holding on to bullish trends. The QQQ is another matter leaving behind a concerning candle pattern at its 50-day moving average. What today’s follow-through price action on the tech sector could be of critical importance. With the 10-yields on the rise this morning, there is a lot at stake.
