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

The FOMC woke sleeping bears after using the term “economic uncertainly” due to the business impacts of the coronavirus pandemic.  They also mentioned the need for more government stimulus, which we all know is likely on the way, assuming Congress will eventually get its act together once they get over point fingers at one another trying to assign blame to the other party.  After a historic rally, a little resting consolidation or pullback is healthy for the market, assuming the bulls defend price support levels.

Asian markets closed in the red across the board after announcing they will resume trade talks with the US.  European markets are also in a bearish mood this morning, reacting to the Fed statement of uncertainty.  US Futures point to a lower open but have bounced off of overnight lows ahead of earnings and potentially market-moving economic reports.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 32 companies stepping up to report quarterly results.  Notable reports include BABA, BJ, EL< GFI, MLCO, & ROST.

News & Technical’s

Wednesday started strong setting new record highs and pushing AAPL briefly above 2 Trillion in market cap, but comments from the FOMC brought out some profit takers.  Minutes from the last FOMC meeting used the words “economic uncertainty” ahead due to coronavirus business impacts.  Honestly, I don’t understand how that could have been a surprise to the market, but it seems to have woke up the bears at least temporarily.  The Fed also mentioned the need for more government stimulus, which is likely on the way, assuming Congress will eventually get its act together and come to an agreement.  Chinas commerce ministry announced early Thursday that they would go back to the trade negotiation table with the US helping to lift US futures off of overnight lows. 

Technically speaking, yesterday’s pullback should raise the awareness that the market will not go up forever, but so far, indexes remain in bullish trends and above price support levels.  However, it should be no surprise that the markets are significantly extended, and consolidating rest or a pullback is overdue if only to allow moving averages to catch up.  Healthy markets test support and trends, so don’t fear a possible pullback.  Lowered prices set up new opportunities.

Trade Wisely,

Doug

Although a lighter day on the earnings calendar, we have some heavy hitters stepping up to the plate with impressive pandemic results inspiring the futures higher this morning.  Should the bulls remain motivated throughout the day, the SP-500 may finally close at a new record high joining the NASDAQ in the winner’s circle.  Bullish momentum could undoubtedly use some improvement with far more stocks pulling back or consolidating with just a select few pushing the indexes higher.  Perhaps today’s big reports can help cure that issue.

Asian markets closed trading with modest gains though mixed with the NIKKEI slightly lower due to new virus concerns.   European markets, however, are green across the board this morning, led by the DAX up nearly 1% on the day.  Fulled up on strong earnings results form WMT and HD, US futures point to a bullish open and a likely new record for the SP-500. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have a lighter day with just 17 companies reporting quarterly results.  Notable reports include HD, AAP, A, AMCR, CREE, JKHY, KSS, LZB, SE, & WMT.

News & Technical’s

The early report from HD said quarterly sales lept higher more than 20% as DIY consumers stuck home during the pandemic began home improvement projects.  The bullish report has futures pointing to a higher open with the SP-500 likely to join the NASDAQ in the new record high club.  However, with several notable reports yet to come this morning, anything is possible by the open.  It looks like Oracle is setting up a bidding war looking to challenge Microsoft for a shot at buying TikTok.  Markets typically embrace high priced bidding wars and could continue to inspire the bulls.  On a bearish note, the coronavirus has now claimed the lives of more than 170,000 Americans with daily infection numbers averaging more than 50K.  That said, Congress adjourned for the rest of the summer without a stimulus deal, and as far as I can tell, no plan as to when they might try again.  One thing for sure is that both parties will be trying to direct blame at each other in a colossal finger-pointing match as election rhetoric ramps up. 

Technically speaking, the indexes remain in bullish trends, but directional momentum has become noticeably weak.  Once again, the market found enough energy to push the NASDAQ to new record highs as the Absolute Market Breadth Index declined.  With several notable earnings reports, an expectation of increasing Housing Starts perhaps we see that momentum burst to resolve the divergence. 

Trade Wisely,

Doug

While index trends remain very bullish, uncertainty continues to swirl, making it very challenging for the market to see the light at the end of the tunnel.  A delayed stimulus deal, mounting pandemic impacts, rising China tensions, and a very contentious election on the horizon is likely to keep volatility high and price action challenging in the months ahead.  Though the bulls are clearly in control, don’t forget the bears still exist, so stay focused because this very news-driven market can quickly shift.

Asian markets closed mixed but mostly higher overnight, even as Japan’s economy shrank in the 2^nd quarter.  European markets trade in the green but have fluctuated as they cautiously monitor geopolitical tensions.  US Futures point to a bullish open as the SP-500 continues to challenge overhead price resistance attempting to set a new record high.

Economic Calendar

Earnings Calendar

With the majority of 3^rd quarter earnings in the rearview, we have a much lighter week of reports with just 22 companies reporting this Monday.  Notable reports include CRMT, FN, JD, & NAT.

News & Technical’s

After another low volume light choppy price action Friday, the SP-500 continues to struggle with overhead resistance and an elusive new record high.  However, being this close, the last several days of consolidation builds upon the bullish trend, and I suspect institutions will likely push it though before that is a chance of any meaningful pullback.  As the 2020 election nears, the Democrats call for the Postal chief to testify at an urgent hearing to discuss concerns over ballot handling after recent operations changes.  Speaker Pelosi is planning to call the House back into session to vote on a Postal Service bill that’s likely to trigger a political firestorm.  Just one more thing to deal with as this very divisive election season heats up.  Federal bailout numbers of the airline industry swelled to more than $25 billion this year, but that may not be enough to prevent a massive wave of industry layoffs.  As many as 75,000 could soon lose their jobs as the pandemic continues to impact airline operations.  Boeing reported its second straight month of negative sales growth with far more order cancelations than new sales. 

Although the technicals of the index charts remain quite bullish delays of the next stimulus bill, pandemic, tensions with China, and the ramp-up into the election silly season present considerable uncertainty for the overall market.  I do suspect the SP-500 will soon make a new record high, but traders will have to stay on their toes as the market digests a likely very news-driven month ahead.  Make no mistake; the bulls remain in control; however, this historic rally back to pre-pandemic highs remains quite volatile, and we should expect that turbulence to continue for the foreseeable future. 

Trade Wisely,

Doug

A rebound in the tech sector bounced the QQQ off of trend and price support helped to push the SP-500 within 6 points of a new record high.  It seems unlikely to me that we get that close to a big market headline, and the institutions fail to push it through.  However, we still have to deal with Jobless Claim data and a big day of bond auctions with rate and currency pricing implications digest today that could create some price volatility.  Tuesday afternoon reminded us that the bears are still out there and their restless, hungry, so stay focused and flexible should they happen to find some inspiration in the news.

Asian markets closed mostly bullish overnight even as Australia’s jobless rate hit a 22-year high.  European markets appear to be on the cautious side this morning, trading slightly lower as they monitor jobless numbers.  US futures are choppy and flat this morning while poised to set a new SP-500 record as we wait on earnings, jobless claims, and significant day of bond auction data.

Economic Calendar

Earnings Calendar

The Thursday earnings calendar is the busiest day of the week, with 124 companies reporting quarterly results.  Notable reports include AQN, AMAT, BIDU, BAM, FTCH, GLOB, IQ, NTES, TPR, & TK.

News & Technical’s

Ahead of Jobless Claims and a big day of bond auctions US government debit prices are rising this morning.  Today the US Treasury will auction $35 Billion in 8-week bills, $30 billion in 4-week bills, and $26 billion in 30-year bonds.  Interestingly gold futures are trading lower this morning while silver futures trade slightly higher.  Negotiations on the next stimulus bill seem to have ground to a halt and descended into rhetoric driven finger-pointing match of whos to blame.  Which side blinks first is anyone’s guess, but they do both seem to agree on the $1200 taxpayer payments.  There are new concerns about the accuracy of COVID test data.  According to reports reported new infections have declined 19% over the last 7-days, but testing has fallen by as much as 12% over the same period.  Texas cases have dropped off by 10%; however, the number of tests fell 53% over the last two weeks.  The big question, are the numbers artificially skewed, or are we gaining ground in the pandemic battle?  Only time will tell as the nation prepares to reopen schools and colleges.

Yesterday’s rally closed the SP-500 just 6 points below new record highs with a rebound in the tech sector leading the charge higher.  The pullback in the QQQ tested support and trend with buyers surging back into the big-5 tech stocks.  The bearish price action on Tuesday afternoon was unable to follow-though as we expected.  All eyes are on the weekly jobless claims coming out at 8:30 AM eastern.  Stay focused and flexible with a new record close at hand and the T2122 indicator suggesting an overextended market we should prepare for just about anything to occur.

Trade Wisely,

Doug

The bears make a rare appearance leaving behind some concerning candle patterns, but I suspect they will find it very difficult to gain much momentum with a possible record high in the SP-500 so close at hand.  Remember bearish candle pattern requires follow-through to be valid, and this morning the bulls are pushing hard in the futures to punish traders that took early short positions.  Institutions want that new record headline, and it seems unlikely they will give up this close to making it happen.

Asian markets had mixed but mostly bullish results during the night, and European markets whip around mixed this morning over the possible return of the virus.  US point to a substantial overnight reversal of yesterday’s bearish close with the Dow expected to gap up more than 225 points. 

Economic Calendar

Earnings Calendar

On the Hump Day earnings calendar, we have 87 companies stepping up to reports quarterly results.  Notable reports include LMND, CSCO, EAT, CHU, ENS, FOSL, GMAB, YY, JMIA, LYFT, PING, SDC, SPTN, TCEHY, VFF, WPM, & ZTO.

News & Technical’s

Presidential candidate Joe Biden has chosen California Senator Kamala Harris for his running mate this fall.  If Biden wins in the fall, he will be the oldest elected president at 78 possible, putting Harris teed-up for a run for the top job after one term.  President Trump announced a deal Moderna of 100 for 100 million doses of coronavirus vaccine as Russia comes under considerable criticism for rushing the widespread use of a vaccine after test just 100 individuals.  As a result of COVID economic impacts, the UK is now in recession with a record economic plunge over 20%.  Yesterday Florida reported a record 276 death caused by the virus on Tuesday.  A grim reminder we have a long way to go in our battle with the disease.  Congress remains deadlocked on the next stimulus bill continuing to point fingers at one another to pass the blame for the delay.

Yesterday’s price action left a few questions for the traders to ponder as the bears made a rare appearance in the afternoon session to snap 8-straight days of a market rally.  They left behind concerning candlestick pattern, but this morning the bulls are fired up again, pointing to a substantial gap up.  I think it’s improbable the bears will have a chance to gain much momentum with the SPY so close to setting a new record high.  In-fact the selling yesterday may have picked up just enough short interest to pull off a quick short squeeze to help secure that new record high headline.  That said, once the new record is achieved, a rest or pullback in the market is not out of the question.  Stay focused, and flexible.

Trade Wisely,

Doug

Hopeful vaccine news out of Russia is inspiring the bulls for a gap up open this morning that may well set a new record high in the SP-500.  Although Congress continues the battle of soundbites and rhetoric, there is still significant hope they will soon come to an agreement on more stimulus.  How this might affect the Presidential executive orders is unclear but slowing the debit spending no longer the issue. It’s the battle of who’s willing to spend the most.

Asian markets closed missed but mostly higher overnight with Hong Kong leading the way up 2.11%.  European markets are sharply higher across the board up to more than 2.5% on recovery hopes.  US Futures indicate a very bullish gap up open with the SP-500 nearing a new record high ahead of earnings and PPI data.

Economic Calendar

Earnings Calendar

On the Tuesday Earnings Calendar, we have a decline, with 88 companies stepping up to report.  Notable reports include NIO, GOOS, CSPR, HUYA, IHG, LITE, MAC, MLCO, RRGB, SFTBY, SYY, & VIAV.

News & Technical’s

Yesterday’s bullish move left the SP-500 less than 1% from new record highs.  Airlines reported that travel is increasing, providing a big lift to the sector, including a BA which rallied more than 5.5%.  Heavy equipment manufacturers DE, CAT, and CMI buying surged yesterday with energy and financial sectors also gaining ground.  During the night, Russia claims the development of the world’s first coronavirus vaccine lifting the futures markets sharply higher this morning.  Of course, a lot of testing will have to is required before the acceptance of a new vaccine here in the US, but with global cases topping, 20 million hope is high.  New US sanctions against Chinese government officials yesterday once again ratchet up tensions between the countries, adding uncertainty to global banks.  As MSFT works to buy TikTok, the French government opens an investigation into privacy concerns of the popular social media App. 

With the bulls solidly in control and the futures pointing to a bullish gap open, the SP-500 is likely to reach a new record high.  Traders should be careful not to chase stocks already well within a bullish run with the fear of missing out.  Remember, this will be the 8^th straight day of gains, increasing the odds of a market rest or pullback at any time.  The T2122 indicator this buying wave is very stretched, and a new record high could be the catalyst that brings out some profit-takers.  Having said that, we should rule out the possibility that Congressional Stimulus news could provide another shot of energy for the bulls.  Stay focused, flexible, and plan your trading carefully. 

Trade Wisley,

Doug

With stimulus money once again flowing with the stroke of the Presidential pen, the path to record highs in the SP-500 is clear for the bulls for an easy headline.  Although we have several significant reports on the economic calendar this week, today is light, allowing earnings news and politics to drive the day.  While a new record in the SP-500 seems likely soon, traders should watch for possible profit-taking that could begin at any time having moved up 7-days in a row.

Asian markets closed Monday mixed but mostly lower remaining cautious with the rising tensions between the US and China.  However, European indexes are green across the board this morning, and US futures have recovered from overnight lows suggesting a modestly bullish open to begin the week. 

Economic Calendar

Earnings Calendar

Although the 3rd quarter earnings season starts slowing this week, Monday’s calendar remains quite busy with more than 200 companies reporting.  Notable reports include ANGI, GOLD, CGC, CDR, SCOR, CEIX, DUK, AGM, GOGO, HVT, IAC, INO, IPAR, JCOM, MAR, MELI, OXY, ON, PPL, APTS, RCL, SEAS, SPG, TME, TLRY, & WKHS.

New & Technical’s

With the stroke of a pen, the President signs a series of executive orders extending coronavirus relief through the end of the year after Congress failed to reach an agreement on the stimulus bill.  Those unemployed will receive $400 in additional financial support down from the $600 that lapsed over a week ago.  However, it requires the State to come up with $100 of the $400 benefit, and it’s unclear if they can do so.   The initial market reaction to this action showed mixed results, but the additional deficit spending has gold and silver futures flying high this morning.  Some analysts say gold could ready $4000 an ounce!  With the election less than 100 days away, the President also raised tariffs on aluminum reigniting the trade war with Canada, and of course, Canada retaliated in kind.  This weekend the US reached another grim milestone, topping 5 million coronavirus cases.  Daily infection rates have begun to level off in Florida, Texas, and California, with some mid-west, states becoming a concern as their numbers surge. 

With the SP-500 just over 1% from new record highs and the stimulus money flowing again, I suspect the path is clear for the bulls to push forward.  Although the index has moved higher seven sessions in a row, I can’t imagine institutions failing to reach that out for that record-high headline.  However, traders will also have to stay focused on the possible profit-taking that could begin at any time.  With a light day on the economic calendar, earnings results and political spin cycle are the likely drivers for today.

Trade Wisley,

Doug

All eyes are on the Employment Situation number and rightfully so.  A lot is riding on this number with estimates that range for 0 to 3 million jobs created.  Although futures are currently pointing to a bearish open, anything is possible after the number releases an hour before the market open.  An executive order banning all transactions in 45 with WeChat and TikTok is increasing tensions with China, and Congress left Washington for a week without a deal on stimulus, adding a bit more uncertainty as we slide into the weekend.

Asian markets closed in the red across the board last night in reaction to the rising tensions.  European markets are choppy and flat this morning as they monitor jobs news and US-China relations.  With a lot at stake as the US, market prices at or near record highs, anything is possible at the open as we react to the data.  Fasten your seat belt and prepare for wild price action as we head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a lighter day, with 83 companies stepping up to report.  Notable reports include KIM, MGA, VTR, & VIRT.

News and Technical’s

Another day of big tech buying pushing the NASDAQ to another record high topping the 11,000 level for the first time.  The SPY is now less than 1.3 percent away from new record highs, and a lot will depend on the significant Employment Situation number at 8:30 AM eastern today.  The estimates range between 0 jobs gained last month to 3 million with a consensus estimate of 1.4.  Obviously, at the current elevation of the market, this number has the potential of creating considerable price volatility before the open.  Congress adjourned and went home for a week without a deal on the heavily anticipated stimulus bill, with both sides blaming each other for the delay.  Senator Sanders introduced a new bill called Make the Billionaires Pay Act.  If passed, it will require the richest in the country fork over hundreds of billions to the government with the intent of funding health care for Americans for the next year.  Tensions between the US and China continue to grow after the President signed an executive order banning transactions with WeChat and TikTok.  The order takes effect in 45 days, causing the shares of Tencent (TCEHY) to drop sharply.  There is no news yet of possible China retaliation. 

The technicals of the index charts remain very bullish with nothing but very high prices to hint of possible profit-taking could start at any time.  A lot is riding on the Employment Situation number.  Futures are weak this morning as we wait for the report, but anything is possible at the market open.  Buckle up; it could be a bumpy ride as we head into the weekend.

Trade Wisely,

Doug

Fueled by Fed, vaccine, and stimulus hopes the market shrugged off the very disappointing private payrolls numbers as the Dow surged more than 370 points, and the SP-500 closed only 2% below new record highs.  Today we face another big day of news-driven price action with more than 400 earnings reports and Jobless Claims.  As this rally stretches-out, remember profit-taking could begin at any time, so stay focused.  Although weak, the bears still exist, so be careful not to be lulled into complacency.

Asian markets closed mostly lower overnight, and European indexes are modestly lower across the board after the Bank of England holds rates steady.  US Futures have pulled back from overnight highs as we wait on earnings and jobless data before the open. It’s been a wild bullish party every day this week.  The question will the party go on, or will the hangover begin soon?

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we now have more than 400 companies fessing up to quarterly results.  Notable reports include AL, AEP, APLE, BLL, BHC, BDX, BKNG, CAH, CUBE, DBX, FSLR, FLIR, FLO, GCI, GPRO, GWPH, HL, ILMN, IRM, KTB, MAIN, MELI, MUR, MYL, NWSA, NLOK, NCLH, PZZA, PLUG, POST, RMAX, QSR, STMP, TMUS, TM, TTD, TRIP, VIAC, WIX, YELP, & ZTS.

News & Technical’s

Even with a very disappointing ADP, private payrolls number, the market continues to rally energetically as if jobs no longer matter in the economy.  With the Dow closing up 373 points and SP-500 only 2% from new record highs the VIX struggles to decline, and the Absolute Breadth Index displays a remarkable divergence to the bullish price action.  How much longer this condition can continue to exist is anyone’s guess, but one thing for sure, the bulls continue to stampede higher with little to no regard for valuation.  Keep an eye on AAPL as it nears a 2 Trillion market cap accounting for a full 6.5% of the entire SP-500.  After another day of wrangling, Congress remains deadlocked on the next Stimulus plan.  Some have suggested a Friday deadline to get to an agreement, and the President has promised an executive order should they fail.  Gold and Silver continue to rally sharply as the debasement of the US dollar continues, and worry of substantial future inflation grows. 

Today we will get the latest reading on Jobless Claims with consensus estimates looking for a slight rise in applicants this week.  However, whatever the number is, I’m not sure it will matter as the market continues to ride the massive wave newly printed money.  As you plan your day, remember we will get the Employment Situation number before the market opens on Friday.  Consensus suggests an improvement in the unemployment rate of 11.1% last month to 10.5%. Even with the improvement, it isn’t easy to correlate the current market valuation with such a high level of unemployment.  As this multi-day rally stretches-out, stay vigilant to price action watching for the possibility that profit-taking could begin at any time.

Trade Wisley,

Doug