Mixed Bag

January 27, 2021 by Doug Campbell

U.S. futures point to a mixed bag this morning, with the QQQ gapping higher after the strong earnings performance from MSFT, while the Dow points to a substantial gap down.  Although AMD and TXN topped earnings expectations, they indicate a lower this morning.  With a big day of earning and economic data that includes an FOMC announcement, traders should prepare for just about anything to occur in price action.  It would not be a surprise to see more index gaps tomorrow with AAPL, TSLA and FB reported after the bell today. 

Asian markets closed overnight with mixed results after the IMF raised the global economic growth forecast.  However, European markets trade decidedly bearish this morning as they keep an eye on earnings results.  U.S. indexes face a mixed open ahead of a blizzard of market-moving data.  Buckle up it could be a wild ride for the next couple of days.

Economic Calendar

Earnings Calendar

As the number of earnings ramp-up, the Wednesday calendar adds more market-moving tech reports.  Notable reports include TSLA, ABT, AMP, ANTM, AAPL, T, ADP, BX, ADP, BX, BA, EAT, CP, GLW, CREE, CCI, DRE, FB, GD, HES, LRCX, LVS, LEVI, MKTX, NDAQ, NSC, NG, PKG, NOW, SYK, TER, VFC, & WHR.

News & Technicals’

A strong round of tech earnings after the bell sees the QQQ popping higher as MSFT add sales surprised the market.  However, we face a mixed bag of index reactions this morning.  As you would expect, MSFT is indicated sharply higher at the open but, the good vibes seem to stop there with AMD, and TXN indicated lower despite topping expectations.  President Biden orders an additional 200 million doses of vaccine and suggests that things are likely to worsen before getting better.  He went on to say an expectation of half a million deaths by the end of February is possible after yesterday’s death toll topped 4000 once again.  Goldman Sachs CEO David Solomon will see his pay cut by 10 million after the company admitted wrongdoing in the 1Malysia Development Berhad scandal.  That’s roughly 36% of his yearly salary, and, of course, no one will go to jail. 

Today we traders face a blizzard of data beginning with Durable Goods Orders and FOMC Announcement and a huge round of earnings that will include APPL, TSLA & FB after the bell.  Futures are all over the place this morning, with the Dow indicating a gap down of 200 points while QQQ points to a gap higher.  Expect the wild volatility to continue, but don’t be too surprised if price action becomes choppy after the open as we wait for Powell and the highly anticipated reports after the close.  Anything is possible, so stay focused and flexible as the drama unfolds. 

Trade Wisely,

Doug

Whipsaw to start the week.

January 26, 2021 by Doug Campbell

We started the week with a nasty price action whipsaw in the indexes that kicked the VIX briefly above a 26 handle.  Let it serve as a reminder of just how quickly and punishing a market reversal can be when indexes with indexes so elevated as earnings season ramps up.  The bulls ultimately won the day defending price support and trends, but note that the bears are starting to show a bit more aggression as of late.  Today, we will hear from our first tech giant, MSFT, after the bell.  Prepare for the possibility of substantial morning gaps as a result.

Asian markets closed in the red across the board last night, with the HIS retreating 2.55%.  However, the European markets are in bullish mode this morning despite vaccine challenges focused on earnings hopes.  U.S. Futures point to modest gains this morning ahead of earnings and the latest reading on Consumer Confidence at 10 AM Eastern.  Expect price volatility to continue and plan your risk carefully with market-moving reports after the bell and FOMC decision Wednesday afternoon.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we a busy day and dig in the tech giants’ reports after the bell.  Notable reports include SBUX, MSFT, MMM, AMD, ALK, AXP, ADM, CHRW, CNI, COF, CIT, DHI, FFIV, FCX, GE, IVZ, JNJ, LMT, NAVI, NEE, NVS, CAR, PII, PLD, RTX, ROK, TXN, UBS, VZ, & XRX.

News & Technicals’

Yesterday’s market price action delivered a couple of whipsaws, creating some fear with the VIX popping over above 26 but closing the day above a 23 handle.  Today, we a big round of earings that includes the first of the tech giants, MSFT, reporting after the bell.  Traders should prepare for the possibility of substantial overnight gaps or reversals as these market-movers report.  Janet Yellen, confirmed by the Senate, becomes the first woman to lead the U.S. Treasury Department.  The U.S. House delivers the article to impeach former President Trump for a second time in an attempt to bar him from holding office ever again.  The trail begins in early February.  Minnesota confirms the first known U.S. case of the more contagious Covid variant discovered first in Brazil.  A record spike in infections sparks fears of new lockdown restrictions in Dubai, which relies heavily on tourism. 

Though the bears showed some aggression yesterday, the bulls ultimately won the day defending price supports and holding trends.  However, as we ramp up earnings activity, the bearish aggression is worth noting, keeping us focused, flexible, and prepared.  With price to earings valuations so high, an earnings miss is likely to create some punitive price action by the offending stock.  Should one of the tech giants stumble, it could prove painful for the overall market.  Have a plan to protect your capital should a stumble come to pass but until then, stick with the bullish trend but avoid overtrading or chasing already extended stocks.

Trade Wisely,

Doug

Data, Earnings & Economic

January 25, 2021 by Doug Campbell

Between the earnings and economic calendar, traders and investors will have a lot of data to digest this week.  Plan for the considerable price volatility and be prepared for the possibility of overnight reversals with the after the bell giant tech reports with substantial gaps at the open.  With P/E ratios already extended, can companies produce earnings results to support these prices?  We’re about to find out, so stay focused, flexible, and ready for just about anything.

Asian markets traded very bullishly overnight, with the HSI leading the way up a whopping 2.41%.  However, European markets trade in the red across the board, and the U.S. futures that were quite bullish overnight now point to a mixed open.  With so much data coming our way, be prepared for considerable price volatility in reaction earnings and economic news.

Economic Calendar

Earnings Calendar

We have a busy week of earnings that will include market-moving giant tech reports.  Notable reports include AGNC, BRO, CR, ELS, KMB, & STLD.

News & Technicals’

Traders and investors will have a lot of data to digest this week with a busy economic calendar and an earings calendar brimming will market-moving reports.  The futures were quite bullish during the night but have moderated considerably this morning, pointing to flat open.  However, with so much data coming our way, anything is possible.  Treasury yields are falling this morning as investors keep watch on the Biden 1.9 Trillion stimulus plan.   The President restricted travel from the U.K., Brazil, and South Africa to mitigate risk from new virus strains that may be vaccine-resistant.  In another executive action, Biden extended the student loan freeze for another eight months, and new data shows loans in forbearance are risings, adding pressure to the banking sector.

Although we saw a little selling last week, trends remain bullish, though mainly in a choppy consolidation.  The week ahead could prove rather challenging as the market processes a big round of earnings.  With P/E ratios already very extended, can companies produce earnings results that support these elevated prices?  We will soon see, but traders should expect substantial volatility with the possibility of overnight market reversals and opening gaps as a result.  Before making any new trade decision, make sure you’re checking the company’s earnings date as big price moves are possible.  Focused, flexible, and agile traders with well-planned trades that carefully manage risk can do well in this environment.  Buckle up!

Trade Wisely,

Doug

Insipid Price Action

January 22, 2021 by Doug Campbell

Yesterday’s insipid price action and declining volume suggested the market needed a rest after the hard bullish partying earlier this week.  With the futures currently suggesting an overnight gap down at the open today, we are reminded that bears still exist.  Now the question to be answered, do the bears have teeth, or will the dip crowd have the energy to defend trends and price supports as we slide into the weekend?  Recent evidence and hope for another 1.9 trillion stimulus seem to give the bulls the upper hand. 

Asian markets closed in the red across the board, with the HIS leading the way, dropping 1.60%.  European markets retreat as well this morning as the virus spread and economic data damper recovery enthusiasm.  Ahead of earnings and several possible market-morning economic reports, U.S. futures point to a gap down open within bullish index trends.  Prepare for an extra dose of volatility as we head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have 22 companies fessing up to quarterly results.  Notable reports include ALLY, HBAN, KSU, RF, & SLB.

News & Technicals’

While mostly bullish, the market’s price action seemed a bit insipid while still squeaking out new records in the SPY and QQQ.  The energy and financial sectors experienced a notable weakness, while the big tech growth names garnered most the bullish attention.  Whitehouse adviser Dr. Fauci says new data shows vaccines appear to be less effective against some newly identified strains.  President Biden plans to sign more executive orders today but has reportedly come under pressure to scale back his 1.9 Trillion stimulus package.  INTC stock surged just minutes before the close yesterday when an infographic related to the coming earnings report was leaked.  The stock sold off after the bell and the release of the earnings.  The company says it’s investigating the situation.  Have I mentioned, I’m not too fond of earnings and the price manipulation it creates.

Technically speaking, trends remain bullish all-be-it quite stretched with volume declining even as new record highs occurred.  However, this morning futures point to a gap down open, reminding us that bears still exist.  We have a lighter day on the earnings calendar but several possible market-moving economic reports to keep us busy.  As long as overall trends and support hold in this morning’s pullback, this is healthy market price action.  However, it might be a bit painful from this elevated position for those overtrading.  Plan your risk carefully as we head into the weekend.

Trade Wisely,

Doug

Market Celebrated

January 21, 2021 by Doug Campbell

With record highs across the board, the market celebrated strong earning and the administration change in the Whitehouse with the promise of more stimulus on the way.  Though there is a chorus of investment banks suggesting higher market highs are on the way, some are suggesting a euphoric market bubble has formed.  Who’s right?  Your guess is as good as mine.  The best we can do is plan carefully, avoid overtrading and stay with the trend as long as it lasts, but always remembering it will one day end. 

Overnight Asian markets traded mostly higher, and European markets edge higher, keeping an eye on earnings data.  U.S. futures point to a positive open with a busy day of earnings, economic and political news setting the stage for possible volatile price action.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have the biggest day of the week, with 43 companies on the list and 33 confirmed reports.  Notable reports include INTC, BKR, CTXS, CSX, FITB, IBM, ISRG, KEY, MTB, PPG, STX, SIVB, TAL, TRV, & UNP.

News and Technicals’

The market celebrated the strong earnings and President Biden’s inauguration, setting new record highs set in all four indexes.  He signed 17 executive orders yesterday and plans another 10 today addressing pandemic issues.  Dr. Fauci says the U.S. will remain a WHO member and join the global Covid vaccine plan.  Stock futures are once again edging higher this morning, with Godman, Morgan Stanley, and JPMorgan singing in chorus for higher valuation to come.  However, not everyone feels that way, with Jeremy Grantham saying the market is in a bubble with very seldom seen euphoria levels.  As a technical trader, all I can do is stay with the bullish trend until as long as it lasts, carefully planning risk, making sure to follow my trading plan rules, and avoiding overtrading with the existing extending market condition.

Setting new record highs across the board makes it easy to see that the bulls are large and in charge of the market trends.  However, it is also easy to see a very extended market condition that poses a significant risk of a steep selloff that should cause the market to stumble.  Take caution in trading stocks that extend from price supports.  We have a big day earnings and economic data and a boatload of political news that has the potential to create significant price volatility.  Plan carefully.

Trade Wisley,

Doug

Inauguration Day

January 20, 2021 by Doug Campbell

Markets are bullish this Inauguration day as we swear in Joe Biden as the 46^th president of the United States.  Though security is high in Washington D.C., most expect an uneventful transition of power.  However, a light and choppy day of price action is possible after the morning rush of earnings fueled trading with traders distracted by the political festivities.  As your plan your risk forward, keep in mind we have a busy economic calendar Thursday and Friday, not to mention the ramp-up in earnings reports.

Overnight Asian markets traded mixed but mostly higher as shares of Alibaba soar.  European markets cautiously edge higher this morning earnings and inauguration in focus.  U.S. futures point to a bullish open, with NASDAQ leading the pack on the back of the strong NFLX earings.  Stay frosty as the price volatility is likely to ramp with earnings.

Economic Calendar

Earnings Calendar

On the Hump Day earings calendar, we have 25 verified reports fessing up to quarterly results.  Notable reports include AA, ASML, BK, CFG, DFS, FAST, KMI, MS, PG, USB, UAL, & UNH.

News & Technicals’

Coming back from the MLK holiday, the bulls went back to work with energy from earnings reports and hopefulness we will soon get another big round of stimulus.  During confirmation hearings yesterday, Treasury secretary nominee Yellen stated that the country should act big in the next virus package to bolster the economy.  After the bell, Netflix reported a solid quarter surprising and that it is not shrinking away from the challenge that the Disney streaming service provides.  Today we have the inauguration of President Biden and transition of power.  Biden plans to issue executive orders to rejoin the Paris climate accord and revoke the Muslim travel ban on his first day in office.  It will not be a surprise if we see some light and choppy price action after the open with the inauguration ceremony’s political distraction. 

Although the bulls came to work yesterday, they seemed to struggle a bit will overhead resistance.  Perhaps a result of traders extending their holiday.  With the big overnight move in NFLX, the QQQ will be the leader this morning and may well ink a new record high at the open as a result.  The energy and financial sectors continue to fule the IWM higher yesterday, closing the day just short of a new record.  Trends remain bullish, although the T2122 Indicator continues to warn of a short-term overextended condition.  Stay with the trend but don’t become complacent as we stretch out to the upside.

Trade Wisely,

Doug

1st Quarter Earnings

January 19, 2021 by Doug Campbell

All through the bears made a quick visit last Friday, the bullish trends remain, and according to the futures, the bulls are rested and ready to get back to work this morning.  With the inauguration just around the corner and the ramp-up of 1^st quarter earnings, traders should expect an extra dose of price volatility in the days ahead.  Although the market is very hopeful about the next round of stimulus, make sure you check earnings dates before making trading decisions. With so many stocks looking elevated, a disappointing earnings report could create painful selloffs.  Plan carefully.

Asian markets traded mixed but mostly higher overnight, with the HIS surging 2.70% higher.  European markets trade cautiously this morning, chopping around the flat-line.  However, the bulls seem to be on a mission this morning, pointing to a gap up open ahead of earnings results.  It would be wise to expect an extra dose of volatility as earnings ramp up.

Economic Calendar

Earnings Calendar

We begin to ramp up the 1^st quarter earnings calendar with 20 companies reporting results.  Notable reports include IBKR, NFLX, BAC, SCHW, CMA, GS, HAL, JBHT, LOGI, PETS, STT, & ZION.

New & Technicals’

Last Friday, big bank earnings beat estimates, but they all found a few sellers.  Today we ramp earnings, but futures are currently staging a rally ahead of GS, and BAC reports this morning, with the first big tech report this afternoon coming from NFLX.  With the change in power at the White House just around the corner, it’s possible we could experience a bit of price volatility with lower than usual volumes as the world watches.  Although energy prices have seen a sharp rally recently, the IEA cut their oil demand outlook due to pandemic lockdown restrictions.  Germany has discovered a new virus variant among 35 hospital patients. Though the outgoing Trump administration wants to lift travel ban restrictions, the Biden administration says they will keep Europe and Brasil restrictions in force. 

Although we experienced a little bearish activity last Friday, overall uptrends held as support.  This morning as we return to work after the MLK holiday, the bulls seem ready to resume their march higher, with the Dow futures suggesting a gap up of more than 150 points at that time of writing this report.  BAC beat top-line estimates but fell short of revenue expectations, yet the stock is holding up in premarket trading.  Higher unemployment, weak retail sales have not dampened the spirit of the bulls with the hope of more stimulus on the way, so perhaps earnings can be added to the list of things that don’t matter all that much in this environment.  Keep an eye out for price volatility due to earnings and the transition of power in the Whitehouse.

Trade Wisely,

Doug

Another 1.9 Trillion

January 15, 2021 by Doug Campbell

Another 1.9 Trillion may be on the way soon if President-Elect Biden’s stimulus plan can make it through the congressional gauntlet. Somewhat surprisingly, the market at this point is taking a wait and see attitude as it faces big bank earnings and a full plate of economic data with the potential to create some price volatility.  We have a 3-day weekend with the market closed on Monday for Martin Luther King day, plan according to keeping in mind earnings ramp up next week.

Overnight Asian markets struggled after the U.S. blacklisting of smartphone maker Xiaomi.  European markets trade lower across the board this morning on slower than expected recovery concerns.  Ahead of a big day of earnings and economic data, U.S. futures currently point to lower open the day after the IWM set a new record high.  Buckle up the road ahead could be a bumpy one.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just five verified reports, but they are potentially market-moving.  Notable reports include C, JPM, PNC, & WFC.

News & Technicals’

President-elect Biden revealed his stimulus plan adding another 1.9 Trillion to the 900 Billion passed just last month.  The plan includes raising the federal minimum wage to $15.00 an hour and sending an additional $1400 in direct payments to most Americans.  Big banks will take center stage this morning with reports from C, JPM, PNC & WFC.  The financial sector has enjoyed a tremendous bull run for the last couple of months, so all eyes will be watching.  If that’s not enough, we have a full plate of economic reports that have the potential to add to this morning’s price volatility.  Make sure your checking company reporting dates before buying or selling decisions.  Prices have risen so much in the last few months an earnings miss could see a severe and painful punishment.

The DIA & IWM indexes hit new record levels yesterday, but only the IWM could hold the new ground by the close of the day.  That said, the indexes continue in bullish trends ahead of a big day of data.  Futures point to lower open as I write this report, but traders will have to stay flexible because anything is possible in reaction to all the news.  As you plan your risk into the weekend, it would be wise to remember 1^st quarter earnings ramp up next week, and who knows what kind of political goofiness could crop up affecting market prices with the inauguration of President Biden.  Monday, the market will be closed for Martin Luther King day so enjoy your 3-day weekend!

Trade Wisely,

Doug

Trends Remain Bullish

January 14, 2021 by Doug Campbell

SPY and the QQQ provided some market lift yesterday while the DIA and IWM took a little break.  Index trends remain bullish as officially kickoff the 1^st quarter earnings season hearing from BLK with GS, JPM & C reports Friday morning.  We will get the latest reading on Jobless Claims, Jerome Powell speaks at 12:30 AM Eastern, and President-Elect Biden will reveal his stimulus plan.  These are potentially market-moving events, so stay alert for price volatility as the data is released. 

Asian markets closed mixed but mostly higher as China’s December trade data beat expectations.  Across the pond, European markets trade with modest gains across the board on hopes of U.S stimulus.  U.S. futures trade mixed but mostly higher this morning with the intoxicating smell of freshly printed deficit spending in the air.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have the 1st quarter earnings season’s official kickoff with eight verified reports.  Notable reports include APHA, BLK, TSM, & DAL. 

News & Technicals’

The U.S House has voted to impeach President Trump.  Now the Senate will take up the issue, but according to reports, the trial may not begin until after President Biden’s inauguration.  Airbnb yesterday canceled reservations in the Washington area during the inauguration.  Though a bit choppy, the market managed to push upward, led by the SPY and QQQ, while the DIA and IWM chose to rest, slipping sideways.  We have vaccines back in the news as J&J’s one-shot system is proving safe and generates a promising immune response.  Health officials are hopeful as the new vaccine would greatly simplify the inoculation of the country.  Treasury yields are again on the rise this morning with the expectation of Bidens’ stimulus plan announcement later today. The market loves freshly printed deficit spending, so be prepared for a possible reaction.

Trends remain bullish, with the indexes charts mostly consolidating as we head into the 1^st quarter earnings season.  Blackrock (BLK) will kick off the big bank’s reports today, followed by JPM, GS, and C on Friday.  The financial sector has rallied strongly in anticipation so let’s hope it’s not a buy the rumor sell the news event.  Keep in mind before the market, we get the latest reading on Jobless Claims and have Jerome Powell speaking at 12:30 PM eastern.  Stay alert as big moves up or down remain quite possible.

Trade Wisley,

Doug

Energy Sector Leads.

January 13, 2021 by Doug Campbell

The energy sector was the clear winner yesterday, with the financial sector coming in a close second, helping to set new record highs Russell-2000.  The Dow fell just short of setting new records as the rotation to value stocks continues.  Retail had a very good day as well, surging higher as folks spend their stimulus checks.  However, with high political drama in Washington, traders should prepare for the possibility of price volatility as we near the inauguration of President-elect Biden.  Be prepared if a profit-taking wave begins because the point move down to price supports is substantial.

Asian markets closed mixed but mostly lower as the surge in pandemic cases puts 28 million people in lockdown.  European markets trade cautiously around the flatline, while the U.S. futures seem to take a wait and see approach as the pandemic death toll sets a new daily record and the political drama in Washington unfolds.  It would be wise to prepare for a bumpy ride.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have eight companies fessing up to quarterly results today.  Notable reports include INFO, INFY, SJR, & WIT.

News & Technicals’

Another day and another record high as IWM continues to surge higher, supported by rising energy prices and strong buying in the financial sector.  The bulls pushed hard but fell just short of breaking out to a new record.  Unfortunately, we also set a grim new record of pandemic related death with more than 4300 Americans succumbing to the virus.  China is also under pressure putting 28 million people into lockdown ahead of their lunar holiday.  Facebook has again banned the President from posting to his account until after the inauguration of president-elect Biden.  Though under pressure from Congress, Vise-president Pence has refused to envoke the 25^th Amendment to remove President Trump from power in his last week of office.  However, that is not the answer Congress wants to hear, so they are moving forward with impeachment proceedings in an attempt to remove the President from office.  It will not be a surprise if the political drama in Wahington spills over to the market in the form of price volatility.

Technically there is no doubt the bulls are still in control and that the index trends remain bullish.  That said, the T2122 indicator is warning once again of a short-term extended condition.  The VIX also remains a bit perplexing, closing the day above a 23 handle as new record highs continue.  Stay with the trend but have a plan should a profit-taking wave begin because there is a large point move before finding price supports on the charts. With many charts showing very extended conditions, it’s easy to find parabolic stocks in nearly all market sectors.  Be careful not to chase!

Trade Wisely,

Doug