Traders should fasten their seat-belts tightly because it looks as if the road ahead may continue to be challenging to navigate.  With the radical price swings, trading risks are extraordinarily high so consider your decision carefully should you choose to risk your hard-earned money in a market where it is near to impossible to maintain an edge.  Very experienced day-traders have the upper hand, while swing and position traders have a substantial risk of intra-day whipsaws and complete overnight rehearsals.

Asian markets closed the day mixed but mostly lower overnight.  European markets are modestly bearish this morning ahead of an ECB meeting, and the US futures currently point to a bearish open ahead of earnings and economic reports. 

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 22 companies reporting quarterly results.  Notable reports include CHWY, PTON, PLAY, ORCL, & ZUMZ.

News & Technical’s

The wild price action volitility continued yesterday will a big relief rally, but the big question is can it hold.  After rising more than 680 points, the Dow dropped more than 200 points in just 30 minutes, heading into the close.  The VIX pulled back nicely but ended the day holding at its 200-day average and remaining elevated at the finish, pointing to the significant danger these big price swings create.  What comes next is anyone’s guess, so use caution avoiding overtrading because retail traders have little to no edge with such an uncertain condition.

In the index charts, there continues to be no significant technical damage; however, the threat that DIA and SPY may yet test their 50-day moving averages does still exist.  Although a light day on the earnings calendar, we do have several notable reports as well as an economic calendar that includes Jobless Claims, PPI before the bell for the market to digest before the open.  Currently, futures point to a bearish open, but a lot could change over the next 2 hours with volatility so high.  Buckle up the road ahead is likely to remain bumpy and very challenging to navigate. 

Trade Wisely,

Doug

In the last 3-trading days, we’ve received a reminder that bears still exist despite a very favorable Fed and massive governmental intervention.  Although the futures point to a nice relief bounce at the open, let’s not forget that the 50-day average may still get tested in the days ahead.  Be careful rushing back into highly volatile price action with the buy the dip mantra ringing in your ears.  Stay focused and consider carefully how this wild price action takes away a trader’s edge.

Asian markets closed in the red across the board overnight as tensions with the US continues to grow.  European market point to a modest bounce at the open, and the US futures point to a little relief rally ahead of earnings and the JOLTS number at 10:00 AM Eastern.  Expect the wild price volatility to continue.

Economic Calendar

Earnings Calendar

On the Hump day earnings calendar, we have 20 companies stepping up to report quarterly results.  Notable reports AVAV, ABO, GIII, GME, NAV, RH, VRNT, & ZS.

News and Technical’s

After a 3-day nasty selloff, futures point to a modest bounce this morning.  With the Dow closing just 1.2% above its 50-day average and SP-500 hovering less than 1% above this critical technical indicator, traders should be cautious with the buy the dip mantra and rushing into positions.  Although there has been nothing typical about this year’s market, we must consider the possibility that 50-day averages may still experience a test of support.  Market pullbacks most certainly provide buying opportunities; however, the violence of this selloff adds the tremendous risk head fakes and fast intraday reversals with the VIX so elevated.  A bounce may, in fact, provide an opportunity to take some risk off the table rather than add—something to consider as you plan your day forward.

Technically speaking, the indexes were so overextended they have yet to experience any significant technical damage even though the psychological damage has been rather extreme.  Fast moves like this make traders very jittery so prepare for considerable price volatility in the days ahead.  If this pullback has hurt, you guard yourself against revenge trading.  Stay focused on your plan and your rules.  The market is a high-risk proposition at the moment, so carefully consider this question.  Are you gaining or losing your edge when trying to trade an extremely volatile market.  Plan carefully!

Trade Wisely,

Doug

Due to a computer snafu, the usual blog is unavailable.  Sorry for the inconvenience. 

Economic Calendar

Earnings Calendar

On the Tuesday Earnings Calendar, we have just 14 companies stepping up to report quarterly results.  Notable reports include BBW, CAL, HRB, JAMF, & SCVL.

The tremendous August market performance looks to finish strong this morning with 3-new companies trading on the Dow as well as new shares from the stock split in AAPL and TSLA.  Coming as the biggest August rally since 1986, the question is, can the bullishness continue with a 3-day weekend on the horizon.  Stay focused, be careful not to over-trade and extended market and remember bears still exist even though we’ve not seen them for quite a long time.

Asian markets closed mixed but mostly lower overnight, but European markets trade higher this morning inspired by the very dovish Fed.  US Futures point to modest gains at the open but could easily add fresh new records as the bulls continue to ride the wave of governmental stimulus.

Economic Calendar

Earnings Calendar

On the last day of August 2020, we have 12 companies repoing quarterly results.  Notable reports include SCSC, BAM & ZM.

News & Technical’s

On our last day of August, we have three new companies trading on Dow with APPL and TSLA trading with new shares after splitting their stocks.  Historically August is not a great month for the markets, but this year August will end with its most robust performance since 1986 amid unprecedented governmental intervention.  The magnitude of the market recovery is nothing short of remarkable considering the national GDP is a negative 31 with 1 in 3 Americans unemployed.  According to reports, the FDA is ready to fast track coronavirus vaccine ahead of phase three trials breaking with its typical protocols.  Yesterday, India set a new world record, reporting more than 73,000 new infections in a single day.  The violent protests in Portland, Oregon, that have gone on for 3-months turned deadly this weekend with a shooting.  Killing each other over political ideology is nothing new, but it’s a shame how divided and weaker we are as a nation as a result. 

With bullish and fresh new records on Friday, the Futures point to bullish open.  Although the index appears stretched, there is at this time no price action clues of bearishness beginning.  However, with a 3-day weekend on the horizon, a declining Absolute Breadth Index, as well as a stubbornly elevated VIX,  traders should not become complacent.  Bears still exist and could attack at any time, so stay focused and flexible. 

Trade Wisely,

Doug

A new record high in the SP-500 but an intra-day whipsaw and a rising VIX could suggest a little turmoil is brewing under the surface.  As we head into a big day of data, the market is hoping to get more clarity and forward guidance on continued aggressive asset purchases from the Jackson Hole symposium.  The bulls have enjoyed an incredible run producing the best August for the SP-500 since 1986.  Heading into the weekend stay focused and plan your risk carefully yesterday’s turbulence may signal profit-taking could begin at any time.

Asian markets closed mixed but mostly higher overnight after hearing there longer serving Prime Minister will step down citing health concerns.  European markets are also mixed but mostly lower this morning as US Futures continue to drive higher with the Dow pointing to a gap up of 100 points but a relatively flat NASDAQ.

Economic Calendar

Earnings Calendar

The Friday earnings calendar is a relatively light day with just 12 companies reporting.  Notable reports include BIG & HIBB.

News & Technical s

The new Fed policy that will allow inflation to rise above 2% by keeping interest rates very low for an extended time was approved by the market with a new record high in the SP-500.  However, there was some volatility during the day with an intra-day whipsaw that the bulls managed to defend by the close of the day.  With the Jackson Hole symposium continuing today the markets are hoping to hear more forward guidance from the Fed and a commitment to continue aggressive asset purchases.  With all the warm a fuzzy talk and massive amounts of newly printed money, the SP-500 is headed for it best August since 1986 despite 1 in 3 unemployed Americans.  Interestingly the VIX rallied briefly above 26 handles settling at the close in the mid 24’s, indicating investors remain nervous that another market dip is possible. 

The technicals of the daily index charts remain very bullish; however, the intra-day whipsaw, a falling absolute market breadth index, and rising VIX may suggest a little trouble under the surface of this historic recovery rally.  With a big day of possible news-driven price action and the weekend just around the corner, plan your risk carefully and don’t be surprised if profit-taking picks up to capture the gains of this very bullish week.  Have a wonderful weekend, everyone.

Trade Wisely,

Doug

After another record-setting day, world markets seem to be holding their breath this morning as we wait for the Feds new policy speech.  With all eyes focused on Jerome Powell, how the market perceives the new stance on inflation may well extend this rally higher or bring out the bears.  If that’s not enough to digest, the market has a damaging hurricane to keep track of, significant day earnings reports, as well as GDP and Jobless data.  Stay on your toes; today is not the time to become complacent.

Asian markets closed mixed but mostly lower overnight.  European markets see red across the board this morning as they trade cautiously awaiting the Powell remarks.  US Futures currently point to lower open, but anything is possible, so remain focused and flexible.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have the biggest day of reports this week, with more than 40 companies fessing up to results.  Notable reports include DG, FLWS, ANF, BILL, BURL, CM, COTY, DXLG, DLTR, GPS, HPQ, MRVL, OLLI, SAFM, TD, YLTA, VEEV, VMW, & WDAY.

News & Technical’s

The majority of the countries’ refining capacity has been shuttered and locked-down as hurricane Laura pummels the Lousiana and Texas coast.  They are calling this an unsurvivable system with a storm surge estimate that could reach 30 to 40 miles inland, putting millions of homes at risk.  While keeping an eye on storm damages, the market has a big day of information to digest, with the biggest being the Fed chairman’s speech at Jackson Hole, where its expected he will layout a new inflation policy.  How the market perceives this speech could inspire the markets higher or bring out the bears should Powell fall short of expectations.  That in its self is plenty to deal with, but before the speech, we will get a reading on the GDP and Jobless Claims, not to mention the biggest day of earnings results this week. 

Bullish trends continued to stretch out yesterday with the SP-500 and NASDAQ once again setting new records.  Markets around the world seem to be holding their breath this morning as we wait for the  Fed speech.  No pressure Jerome, only the future direction of the market is at stake.  Stay focused and flexible, remembering that what goes up will eventually come down, so don’t become complacent.

Trade Wisely,

Doug

More record highs in the SP-500 & NASDAQ indexes as the Absolute Breadth Index continues to decline.  Although this divergence is a bit troubling, the bullish trends and price patterns in the indexes remain bullish.  The VIX is also a little perplexing stubbornly holding above 20 handles as the market stretches higher.  However, the upcoming speech from Jerome Powell that’s likely to layout a new inflation policy that will keep interest rates low for the foreseeable future may well inspire the bulls even higher in the days ahead.

Asian markets closed mixed but mostly lower overnight.  European markets trade mixed and cautiously flat this morning as they wait on the Fed policy speech.  US Futures ahead of earnings, a Durable Good report, and a possibly damaging hurricane bearing down on the gulf coast point to cautiously flat open today.

Economic Calendar

Earnings Calendar

On the Hump day earnings calendar, we have 21 companies stepping up to report quarterly results.  Notable reports include WSM, BILI, BOX, CHS, DKS, EV, EXPR, HEI, LCI, NTAP, PTR, RY, & SPLK.

News & Technical’s

Yesterday we heard about layoffs from Delta Airlines, and today American Airlines says it will cut up to 19,000 jobs when the Federal-aid expires in October.  In the restructure plan Bed Bath & Beyond said they would cut 2800 as impacts from the pandemic continue to mount for US business.  However, a look at the index charts, and it appears the need for employment is no longer a requirement for a healthy economy as the NASDAQ and the SP-500 set new record highs.  Gas futures are on the rise as hurricane Laura intensifies and takes direct aim on the Texas coast.  Evacuations are underway as the oil and gas industry shuts down with the damaging storm set to make landfall late Wednesday night or early Thursday.  CRM saw a nice bump up yesterday after learning it would be added the Dow average, but after the bell, the stock soared higher on the back of a strong earnings report.  The stock is indicated to gap nearly 15% higher at today’s open.

Index trends remain very bullish, and though we saw just a little selling the Dow yesterday, the price patterns remain very strong.  Overnight futures were a bit muted, and this morning point to a relatively flat open ahead of earnings reports and a Durable Goods number that consensus suggests will show a substantial decline.  That said, the market has its focus on the Jackson Hole Symposium, where the Fed chair is likely to roll out a new Fed inflation policy that will keep interest rates low for the foreseeable future.

Trade Wisely,

Doug

After a little intra-day pop and drop, the bulls came out in force once again, setting new records pushing the SP-500 above 3400.  The bulls want to add to yesterday’s impressive display of strength, pointing to yet another gap up open with all eyes on a possible inflation policy change from the Fed expected on Thursday.  The Dow still needs about 4.5% to set a new record, and with significant changes coming in the average at the end of the month, institutions will have to work hard to get that headline.

Asian markets closed mixed but mostly lower overnight.  However, European markets are modestly bullish across the board this morning.  US Futures are currently mixed this morning with the Dow expected to gap more than 150 points and NASDAQ flat to slightly lower. 

Economic Calendar

Earnings Calendar

The Tuesday earnings calendar shows 24 companies stepping up to report quarterly results.  Notable reports include JWN, ADSK, ATHM BMO, BNS, BBY, PLCE, HAIN, HPE, HRL, INTU, SJM, MDT, CRM, TOL, & URBN.

News and Technical’s

More record highs after a day of robust bullish activity as the market looks forward to a significant policy speech from Powell on Thursday.  According to reports, the Fed Chair will lay out a plan that changes the way the committee views inflation.  The idea is to keep rates very low until they see a substantial increase in inflation, which is a significant shift in the FOMC history that worked to control inflation.  Big changes are coming to the Dow Industrial Average with CRM replacing XOM, AMGN replacing PFE, and HON will take the position of RTX before the market opens on August 31.  The change intends to balance the index after the AAPL decided to move forward with a 4-for-1 split, which will move it weighting from number 1 down to the 17^th position.  Delta announced plans to furlough 1900 pilots in October as a result of pandemic impacts with other airlines likely to follow their lead soon. 

A look into the index charts, you can see nothing but bullishness as we continue to pump-out new records almost daily.  With the possibility of a new inflation policy coming to the Fed and seemingly no substantial concerns about Federal debt, we may have to come up with a new definition for what constitutes an overly frothy market environment.  As traders, all we can do is stay with the current trends, stay focused, and avoid becoming complacent in case the music does suddenly stop.

Trade Wisely,

Doug 

There are stampeding bulls everywhere you look this morning with futures point to massive gap up at the open lead by the colossal tech giant AAPL the will split its stock after the bell today.  The market is also looking to the Fed to bring more support and clarity to there future policy actions with the beginning of there Jackson Hole symposium.  With the Nasdaq and SP-500 at new record highs, how much more money printing do we need until the market can stand on its own?  Perhaps we will find out soon.

Asian markets enjoyed a nice rally overnight, with the HSI up nearly 1.75%.  European markets are profoundly bullish this morning with the DAX and CAC up more than 2%.  US Futures ahead of a light day of earnings and economic news point to a substantial gap up, setting new records and lifting the Dow to challenge breakout resistance.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have 26 companies reporting results.  Notable reports include PANW & QFIN.

News & Technical’s

As two tropical storms threaten the Gulf states, the market is seeing nothing but bullishness this morning following the led of Asian and European markets up sharply this morning.  Though many tech companies appear priced to perfection, traders and investors can’t seem to get enough of these high flyers no matter the price.  AAPL stock will split after the bell today as it continues to ride the wave of this historic rally as the most valuable company in market history.  With the SP-500 at new record highs and the Nasdaq setting records almost daily, the Dow remains about 5% below record territory but working hard to catch up this morning gaping up more than 250 points.  With such a massive gap up, we have to consider the possibility of a pop and drop pattern, but I wouldn’t hold my breath waiting for it with such wild exuberance.  Markets will be looking to the Fed’s annual Jackson Hole symposium hoping for more market supporting operations and assurance of long term low rates.  How long and how high do the markets have to go being propped up by Federal debit before it can stand on its own? 

The strong bullish trends continue bouncing of price support levels at the end of the last week.  Price patterns are also very bullish in the DIA, SPY, and IWM.  While the trend in the QQQ is remarkably bullish, it is also very extended nearly 9% above its 50-day average.  With just five of the tech giants dominating the indexes, any stumble could signal a top, so don’t become complacent.

Trade Wisely,

Doug

As I mentioned yesterday, don’t expect the bulls to give up easily.  After bears enjoyed a brief burst of energy, the bulls rushed back in pushing the tech sector to its 35^th record high this year led by AAPL closing above a 2 trillion market cap for the first time in history.  However, there is an interesting imbalance with the majority of the SP-500 stocks in decline, while the tech giants continue to lift the index.  A unique COVID season condition that one has to wonder how much longer it can continue.  I guess only time will tell, but it would be wise to remember bears still exist, and it would be foolish to become overly complacent.

Asian markets close the trading week on a bullish note rising modestly across the board overnight.  European markets, however, trade flat to slightly lower this morning with disappointing PMI reading.  US futures were bullish most of the night, but this morning has slipped slightly negative ahead of earnings, a PMI report, and Existing Home Sales.  Plan your risk carefully as we slide into the weekend.

Economic Calendar

Earnings Calendar

On the Friday Earnings calendar, we have a rather light day with just 18 companies fessing up to quarterly results.  Notable reports include BKE, DE, FL & PDD.

News & Technical’s

Though the bears began the day with a short burst of energy, the bulls stampeded back into control, pushing the NASDAQ up to its 35 record high this year.  AAPL led the way yesterday closing for the first time above a 2 trillion market cap and showing no signs that the new high prices concern buyers.  How much higher it can go is anyone’s guess.  What is interesting is that we saw very few companies pushing the index higher yesterday as the vast majority continued to drift sideways or pullback.  One has to wonder how much longer this unique COVID season condition lasts with such an extreme imbalance between the have’s, and the have not’s.  That said, at this time, the indexes all remain in very bullish trends with equally bullish price patterns even as the Absolute Market Breadth Index continues to signal a significant divergence.  While we continue to enjoy this impressive rally, never forget that the bears are still out there waiting for an opportunity to feed.  Stay focused and plan carefully.

Trade Wisely,

Doug