As the US House makes another attempt to pass a $2.4 Trillion stimulus package, Goldman Sacks cuts their 4th quarter GDP estimate in half, citing gridlock and fading hopes of additional stimulus. The early evening futures rally faded during the night, suggesting a substantial gap down at the open. With the DIA 200-day just over 1.85% lower, a test of that level is certainly within the realm of possibilities as we slide into a politically charged weekend.
Asian markets closed mixed overnight in a volatile session. European markets, unfortunately, decidedly bearish this morning as travel and tech stocks suffer more bearish pressure. US futures point to a substantial gap down at the open with a Durable Good report pending, rising virus concerns, and a pending Supreme Court appointment adding uncertainty to the weekend.
Economic Calendar
Earnings Calendar
We have a very light Friday earnings calendar with only three confirmed quarterly reports, with none of them rising to notability status.
News & Technicals’
The overnight futures session turned out to be a volatile and challenging as Thursday’s market price action. News that the US House is preparing a new 2.4 trillion stimulus package, including more direct payments, perked up futures during the early evening. However, this morning the bears appear to remain tenacious, reversing the overnight bullishness, now pointing to a lower open on Friday. I suspect as the pressure of reelection continues to grow, there will be a stimulus deal struck this time around. Apple will be back in court soon with the EU appealing there 15 billion tax battle to their highest court, attempting to reverse the lower court decision that favored the company. Goldman Sachs cut fourth-quarter GDP forecast in half, citing the stalemate in Congress that has delayed further government stimulus. Amazon announced a slew of new tech devices to boost the holiday shopping seasion, including a self-flying drone home security device.
Yesterday volatile session added more questions than answers for traders and did nothing to improve the technicals of the index charts. With the lackluster performance of the bulls yesterday and the bears proving much more tenacious than earlier this year, the confidence of a substantial bounce-back rally seems to have faded. With the DIA only 1.85% from testing its 200-day average and the political fireworks expected this weekend, we should not rule out the possibility of a test. On the other hand, the hopefulness of another massive government stimulus package could easily inspire the bulls triggering a short-covering rally. In other words, anything is possible, and traders will need to remain focused and flexible as we slide toward the uncertainty of the weekend.
It’s now clear that the bears were ready to defend price resistance levels in index charts leaving behind disturbing bearish engulfing candles as they overwhelmed the bulls. The T2122 Indicator suggests a very oversold short-term condition exists but with the DIA now less than 2% from its 200-day average, we can’t rule out a possible test. With COVID numbers rising in the US and Europe facing the possibility of a double-dip recession, the path forward is certainly uncertain. I expect price volatility will remain very challenging in the days ahead.
Overnight, in a volatile session, Asian markets closed in the red. European markets facing a resurgence of the virus trade mixed but mostly lower this morning concerned about the global economy. Ahead of earnings, Jobless Claims, and a lot more Fed speak US Futures point to muted and mixed open. Buckle up for another challenging day.
Economic Calendar
Earnings Calendar
We have our busiest earnings calendar this week, with 26 companies stepping up to report. Notable reports include DRI, COST, CAN, BB, KMX, FDX, JBL, RAD, TCOM, & MTN.
News & Technicals’
The early gap up gains quickly faded with the Dow giving up a 176 gain to finish the day down 525 points. With the DIA now less than 2% from its 200-day average, it now seems a likely target. After a Kentucky Court decision, protesters took to the streets that sadly resulted in 2 police officers shot as the protest turned violent. Thankfully both officers are expected to recover from there injuries. According to reports, Europe could be facing a double-dip recession with the pandemic spreading, creating new restrictions and obvious economic impacts. New cases are also rising again here in the US, putting a gloomy uncertainty over the market and path ahead for the US economy.
After a somewhat volatile overnight futures session, they currently point to a muted and mixed open ahead of earings, Jobless Claims, and a considerable amount of Fed speak. The technicals of the index charts are pretty ugly, but there is some hope with the T2122 Indicator suggesting a very oversold short-term condition. The significant bearish engulfing patterns left behind on the index charts are certainly dishearting, and we can’t rule out the possibility that the indexes might eventually test their 200-averages in the near future. However, if the news cycle gives us a little break, a modest relief rally could be in order. Traders will have to stay at the top of their game because wild price volatility is likely to remain quite challenging.
Although this earnings season has produced new record highs and much better than expected company profits, Jerome Powell suggested in his testimony yesterday that more government economic intervention may be necessary. With COIVD-19 cases once again on the rise and the national death toll in the US setting a world record of more than 200,000, the path ahead is definitely uncertain. The US House yesterday passed a spending bill that will prevent a government shutdown if approved by the Senate and signed by the President. Still, as the election looms, political tensions hit a fevered pitch, and the market is understandably concerned about what lies ahead.
Asian markets closed the day mostly higher with Australia leading the gains up more than 2%. European markets are seeing substantial gains this morning ahead of important euro-zone data. US Futures also point to significant gains at the open but be careful chasing the moring pop as we approach the downtrend and the price resistance above.
Economic Calendar
Earnings Calendar
On the hump day Earnings Calendar, we have just 12 companies reporting quarterly results. Notable reports include CTAS, GIS, JKS, & WOR.
News & Technicals’
Breaking a 4-day selling streak, big tech lead a modest relief rally in an otherwise choppy price action day as the indexes grind toward the resistance. After the bell, NKE reported blowout earnings substantially beating expectations and indicating about 12% this morning. The US House passed a spending bill sending it to the Senate for approval to avoid a government shutdown if approved and signed by the President. Sadly, the US has set another grim record in its battle with COVID-19 with a world record death toll that now tops 200,000. Parts of Europe are back under lockdown restrictions, and infection numbers here in the US are once again on the rise, with several states reporting their highest number of infections to date. Without a doubt, the pandemic continues to upend American life, and unfortunately, if numbers continue to rise, the damage to the economy is likely to much worse. With an average daily death toll around 800, it seems we have a long way to go if we are to defeat this microscopic enemy.
On the technical front, all four indexes remain in downtrends and below price resistance levels. Jerome Powell, in his testimony, suggested more government stimulus may be necessary to curb the economic damage of unemployment. However, Larry Kudlow, US Economic Council, later in the day, indicated that additional incentives are not required. No matter what you believe, there remains a tremendous uncertainty for the market to digest in the week and months ahead. This morning futures point to a bullish open but be careful rushing in with a fear of missing out as the indexes approach resistance.
The bears overwhelmed the market worried about political infighting over a high court appointment, a possible government shutdown, a delayed or no 2nd stimulus package, an upcoming election, and rising coronavirus concerns. Even though the bulls fought back, leaving behind some hopeful candle patterns that a relief rally may soon begin, the market downtrend and substantial resistance levels above provide concern that the overall downtrend may not be over just yet.
Asian markets chopped in an uncertain session with rising pandemic concerns. European markets have found a bit more bullishness this morning, getting a modest relief rally after yesterday’s rout. US Futures at the time of writing this report suggest a mixed but relatively flat open with tech doing its best to lead a relief. Expect price volatility to remain high with the market sensitive to the news cycle.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 12 companies reporting quarterly results. Notable reports include NKE, AZO, KBH, SCS, & SFIX.
News and Technicals’
Worries about political infighting over a high court appointment, a possible government shutdown, a delayed or no 2nd stimulus package, an upcoming election, and rising coronavirus concerns had the bears working hard yesterday. The first 4-day string of selling since February has created technical damage and damaged to trader confidence in the path ahead. According to the T2122 indicator, the indexes are in a short-term oversold condition suggesting a relief rally may begin soon but having broken down below the 50-day averages and price support, the resistance above could stop any bullish attempt. Should we see a failure at or near the 5-day average, we can’t rule out the possibility of a 200-day average test in the weeks ahead. We should also consider the chance that we have seen the highs for the year, and the market could settle into a volatile sideways consolidation.
Technically speaking, the rally off of yesterday lows left behind hopeful candle patterns that a relief rally could soon begin. However, with the DIA, SPY, QQQ all below substantial resistance levels, a one day bounce while in a downtrend is nowhere near an all-clear signal to buy the dip. With so much uncertainty ahead, expect extreme sensitivity to the news cycle, overnight reversals, intraday head-fakes, and whipsaws, making price action very challenging to navigate. The silver lining in all of this is that stocks are on sale, and eventually, there will be some bargains when this is over.
A political battle royal has begun for the appointment of a Supreme Court Justice, and the aftershocks are creating market havoc this morning with the US Futures pointing to an ugly gap down open. The morning selling will make the lower low to confirm the downtrend in the DIA, SPY & QQQ. There is also significant pressure in the financial sector after leaked documents that show red-flagged transactions that amount to more than $2 trillion. Today could be a very painful day for the buy the dip buyers that loaded up on trades last week. Be careful as fear and possible margin calls could accelerate the selloff.
Asian markets closed mixed but mostly lower after the report that HSBC moved most of the suspicious money flagged in the leaked report. European markets are decidedly bearish this morning, with indexes trading more than 3% lower this morning. US Futures also point to a painful open that will create substantial damage to trader confidence and technical damage in the index charts. Prepare for a wild ride!
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 18 companies stepping up to report quarterly results, but there are not any particularly notable.
News & Technicals’
It seems the appointment of a new Supreme court justice will become a distraction political battle royal and possibly pulling attention away from completing an additional stimulus package. It’s such a hot topic that candidates received a record 90 million in campaign contributions as it fired up both political bases. Nancy Pelosi has gone as far as to threaten impeachment proceedings in an attempt to block a Trump appointment. This morning’s futures market sums up the intensity of the distraction, with Dow currently expecting a gap down of more than 500 points. According to reports, the President approved the Tiktok deal, and China has responded, saying they will blacklist some US tech firms raising uncertainty for foreign tech business. Leaked US government documents show that several big banks may have moved elicit funds. Germany’s largest bank, Deutsche Bank, tops the list and appears to have facilitated the more of the $2 trillion in suspicious transactions flagged by the US Government. JP Morgan is second on the list. Both banks indicate lower this morning, putting additional pressure on the markets.
The question of whether the 50-day morning average of the Dow holding as price support has been answered this morning with a punishing gap down at the open. The lower low not confirms the downtrend of the DIA, SPY, and QQQ and creates substantial technical damage in the charts. I would not be at all surprised to hear about margin calls that have the potential to accelerate the selling. Today may prove to be one of those awful market days that test a trader’s tolerance to risk. Buckle up for a wild ride.
There was considerable price movement yesterday as the bulls and bears battled for control with MSFT and AAPL leading the QQQ its first close below its 50-day average since April. With the weekend approaching, a light day of earnings and economic news, as well as September options expiration, expect price volatility to continue. Plan your risk carefully as you consider the uncertainty of the weekend ahead.
Asian markets seesawed overnight but ultimately find the inspiration to rally, closing green across the board. With a significant spike in coronavirus and new shutdown measures taking place, European markets trade cautiously mixed but mostly lower this morning. US Futures traders flat to mostly lower overnight, but as the morning pump begins, they have rallied off overnight lows with the tech sector leading the way.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have a very light day with just one company expected to report today. That stock is TC and not at all notable unless you happen to one the sub-$1.00 equity.
News & Technicals’
With MSFT and AAPL under selling pressure, the indexes struggled yesterday with punishing intra-day whipsaws that kept traders on edge. The QQQ attempted to recover its 50-day moving average but ended the day closing below this psychological support. With US Futures mixed this morning, it’s understandable that there may be a little apprehension as we slide into the uncertainty of the weekend. Today is the last day trading for September options, so as traders unwind positions would may see and an extra dose of price volatility. Should the bears find the inspiration to rally, keep the resistance above with the downtrend created by this week’s lower high. Head fakes and intra-day are pretty common on options expiration day, and with the VIX still hovering above a 26 handle, traders must prepare for anything.
With just one small-cap stock reporting and a light day on the economic calendar, there won’t be much to react to except election news and political spin. I would not be at all surprised to see a choppy consolidation day. I wish you all a profitable Friday and a Fantastic Weekend!
The celebration of the FOMC’s commitment to hold rates at historic lows for years lasted about an hour before the bears reemerged, seemly gaining the upper hand by the close. The price action left behind some troubling candle patterns and set the stage for possible index lower highs at price resistance. With futures pointing to a nasty gap down open, the question now is, will recent lows and the 50-day moving averages hold as support?
Asian markets closed in the red across the board overnight. European markets are also decidedly bearish this morning despite the Bank of England’s’ decision to keep rates low. Ahead of potentially market-moving economic reports, US Futures point to a substantial gap down at the open. Expect another wildly volatile day.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have a light day with less than 10 confirmed reports. Notable reports include APOG & CMD.
News & Technicals’
After the FOMC committed to keeping interest rates at historic lows, we experienced a nasty intraday reversal with the bears surging into the close. During the Jerome Powells press conference, he noted that the economy looking forward remains uncertain and may take an extended time for employment to recover. Snowflake, ticker (SNOW) doubled yesterday to become the most significant software IPO in market history. The shares priced at $120 per share for the initial offering soared to over $253 in yesterday’s trading. OPEC and its allies are meeting today to discuss production limits. Analysts at this time don’t believe there will further production cuts but do expect the then to renew their commitment to the deep cuts they’ve already made.
The last hour selloff in the indexes left behind some worrisome candle patterns at or very near price resistance levels, possibly setting the stage for lower high price patterns. Early rallies in the financial and oil sectors struggled to hold onto gains as the bears once again seem to gain the upper hand. Unfortunately, the US Futures currently point to a substantial gap down this morning. A painful reminder that buying stocks near price resistance levels is a practice that retail traders should avoid. The question to be answered now is whether the recent lows at or near the 50-day moving averages will hold as price support or will an official downtrend be established? Today we have a light day on the earnings calendar, but before the bell, we will get the latest reading on Housing Starts, Jobless Claims, and the Philly Fed MFG Index. Prepare for another volatile day.
Yesterday ended with a mixed bag on index results heading into a big day of economic data that includes an FOMC statement and the chairman’s press conference. With the indexes closing at or very near price resistance levels, today’s data may well inspire the bulls higher or bring bears out of hiding depending on how investors digest the results. With an elevated VIX and futures pointing to gap up open, it seems an understatement to say anything is possible. Stay focused, and flexible.
Asian markets closed mixed in a rather falt session after Japan reported a disappointing plunge in exports. European markets trade mixed, cautiously awaiting the central bank decision. Overnight futures struggled to gain ground, but as the open near the pre-market pump up has begun suggesting another bullish morning gap. Buckle up.
Economic Calendar
Earnings Calendar
On the Hump Day earnings calendar, we have just 16 companies reporting quarterly results. Notable reports include BRC & MlHR.
News & Technicals’
Though there was a lot fo bullish energy at the open yesterday, we ended with a mixed bag of results. The SPY and IWM mostly chopped in a narrow range, with the DIA giving up early gains to close essentially flat. The QQQ and big tech struggled to hold the morning gap in the morning session, but the bulls fought back, closing the index with solid gains near price resistance levels. After the bell, FEX and ADBE produced strong earnings, with both stocks indicating substantial gains at the open today. However, during the night, US Futures seemed to struggle, often dipping into negative territory until early morning pump up began, which seems to have become the standard operating procedure for this year. Blackstone’s Tony James is warning this morning of a possible lost decade where market returns become anemic in a low-interest-rate environment but facing significant headwinds moving forward. During the night, Hurricane Sally strengthened to a Category 2 storm that made landfall at high tide, shutting down power and threatening widespread flooding. What a year! To much water in the south while the Pacific coast burns, suffering from drought.
The FOMC will be in focus today as we wait for there interest rate decision, and of course, all eyes will be on the Jerome Powell at the press conference that follows. If that’s not enough, we keep investors guessing we also have Retail Sales, Business Inventories, Housing Market Index, and a Petroleum Statis report to digest before the 2 PM eastern statement release. Add to that index charts testing price resistance levels and an elevated VIX, and I think it’s safe to say anything is possible. As I write this report, futures point to a gap up open; however, I would not be at all surprised to see very anemic and choppy price action ahead of the FOMC decision. Becare not to chase with a fear of missing out if the morning gap does unfold.
It looks as if yesterday’s nice relief rally will enjoy a flow-through gap up this morning. The question is, will the bears be lying in wait to attack as we approach resistance in the index charts? The lackluster performance of big tech and the new daily record of COVID-19 cases reported by the WHO adds some uncertainty. Remember, the FOMC meeting begins today, and the market will often become choppy as it waits for there direction.
Asian markets closed mostly up overnight as China reported its first positive retail sales report since the beginning of the pandemic. European markets are cautiously bullish this morning as they await the central bank decision. Us Futures point to another substantial gap up open ahead of economic and earnings news and kick off the of the 2-day FOMC meeting.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 17 companies reporting quarterly results. Notable reports include ADBE, FDX, and CBRL.
News & Technical
The nice relief rally fell short of breaking price resistance in the index charts as big tech produced a lackluster performance. The VIX pulled back but remained relatively elevated, closing well above 25 handles. The WHO reported a record one-day spike in coronavirus cases and warned that the pandemic shows few signs of slowing. In a somewhat confirming story of the epidemic, the IEA cut 2020 oil demand seeing a ‘treacherous’ path ahead due to the rising cases heading into the fall. The President seems to have walk back his requirement of a TicTok sale approving of the deal with Oracle. Apparently, in the partnership of the social media app, Oracle will be responsible for the privacy concerns that caused potential banning. However, make no mistake the apps fundamental purpose to data-mine users as all social media will continue.
Technically speaking, yesterday’s bounce quickly moved the T2122 indicator from short-term oversold but may near a short-term overbought condition as soon as the open today as the all or nothing knee-jerk reaction volatility continues. The FOMC meeting begins today, and traders should keep in mind that it’s pretty standard for the market to become quite and the price action choppy as we wait for the statement and Powell’s presser. As we approach resistance in the index charts, observe to see if the bears will line up in defense. Yesterday week performance in the big techs is a bit concerning should those bears decide to attack. With the election on the horizon and coronavirus cases rising, the uncertainty of the path ahead is likely to keep traders on edge and volatility high. Plan your risk accordingly.
A big weekend of buyout news combined Friday afternoon bounce that left the DIA and SPY hovering above there 50-day averages has the overnight futures pointing toward a substantial gap up this morning. However, keep a close on the overhead resistance above as new cases of COVID-19 begin to rise, and the presidential election that adds significant uncertainty to the path forward.
Asian markets rallied overnight as Japan’s Softbank lept by 9% after the announcement that Nvidia will buy Arm Holdings from them in a 40 Billion dollar deal. However, European indexes are flat and mostly lower this morning, giving up early gains as Brexit challenges persist. US Futures suggest a gap up of 250 points in the DOW ahead of a light day of earnings and economic reports. Traders should expect challenging price volatility to continue.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have a light day with just 14 companies stepping up to report. Looking through the list, there is only one, LEN, that stands out as a notable report.
News & Technical’s
As more than 100 wildfires continue to burn, across California, Oregon, and Washington, the search for missing people has begun. Millions of acres have burned with some entire communities decimated as high winds continue to challenge firefighter efforts. With college in full swing around the country, cases of COVID-19 are starting to tick higher once again. The Whitehouse medical advisor warned this weekend to brace for a problematic fall with the likely spread of the virus picking up pace. As of now, nearly 200,000 Americans have fallen victim to the pandemic. Nvidia is spending 40 billion to buy Arm Holdings from SoftBank in a busy weekend news cycle of buyouts. Innunmedics shares doubled after news that Gilead agreed to by the cancer drug maker in a 21 million dollar deal. In the battle for TikTok, it looks like Oracle may have emerged the winner to partner with the popular social media app only days before the ban deadline. According to reports, Chinese owners reject Microsoft’s offer in favor of Oracle this weekend.
The DIA & SPY continue to hover above their 50-day moving averages bouncing Friday afternoon. The QQQ also bounced but lacked the energy to recover its 50-day average by the close. All the buyout news seems to have inspired the bulls this morning, with Futures pointing to a gap up open in the DOW of nearly 250 points. The bullish price action could trigger a bit of a short squeeze this morning but let’s not forget the resistance above the selloff as created. The historically low rates favor the bulls, but the uncertainty of rising COVID-19 cases and the upcoming presidential election could also inspire considerable price volatility.
