Yesterday a slow and grinding day of price action with a little profit-taking after a mixed bag of earnings reports and higher than expected jobless numbers. That said, the indexes suffered little to no technical damage with the bulls fighting hard to defend against any attempt by the bears to start a selloff. The tech sector may experience some pressure today after NFLX disappointed investors after the bell yesterday. Infection numbers continue to set new records, but the market is unconcerned as they wait for the next round of stimulus spending.
Asian markets closed the trading week mixed but mostly higher amidst rising US-China tensions. European markets trade mixed this morning with an ever so slight advantage to the bulls. Here in the US, after smashing the new infection record and disappointing NFLX report, futures point to modestly bullish open ahead of earnings and economic data.
Economic Calendar
Earnings Calendar
On the Friday Earnings Calendar, we have 28 companies fessing up to their quarterly results. Notable reports include ALLY, BLK, CFG, KSU, FR, & STT.
News and Technical’s
Indexes found a few profit-takers yesterday after a mixed bag of earnings reports and Jobless Claims numbers higher than expected. The market was also dealing with a new record high in pandemic infections, but just one day later, that record was smashed with the number topping 77,000 yesterday. According to reports, the next congressional stimulus bill will cost 1.3 Trillion as written with several elected officials suggesting it needs to be substantially more. Netflix reported a miss after the bell yesterday with and expectation that subscribers will decline in the coming quarter. Share of Netflix fell as much as 10% in extended trading, which may add some pressure today on the high flying tech sector. This morning analysts expect a significant increase in housing starts as the 30-year mortgage fell briefly below 3% for the first time in history yesterday. We will also get a reading on Consumer Sentiment as well as several notable earnings reports that could move the market.
Yesterday mild round of profit-taking made for a slow grinding day of price action but little to no technical damage to the index charts. The tech sector has seen a bit of weakness this week, and it will be interesting to see if the miss from Netflix yesterday will continue that pressure today. There has been a notable increase in the consumer defensive and consumer staples stocks in the last few days. It would seem we are witnessing a rotation into better value dividend-paying issues as the interest in the high flying tech sector wains. There may be some concern that some of the current market leaders will have a difficult time supporting these high prices in their upcoming earnings reports. As we approach the weekend, consider carefully consider the risk as the pandemic infections surge and an uncertain earnings season ramps up to a fevered pitch.
Facing a big day of earnings and economic data while digesting more new records in daily infections and deaths, the US Futures point to the gap down open. While it was nice to see some follow-through bullishness yesterday, the elevated VIX continues to show the market uncertainty and adds significant complexity for traders as they try to navigate the wild price swings. Today is likely to be no different with gaps and intraday reversals as the market attempts to digest all the data.
Asian markets close the day seeing only red across the board as the tensions between the US and China rise. European markets are also trading lower this morning as virus concerns weigh heavily on investors. US Futures point to a lower open this morning, reacting to early earnings data and rising pandemic impacts.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have 37 companies reporting their quarterly results. Notable reports include JNJ, NFLX, ABT, BAC, SCHW, DPZ, JBHT, MS, PPG, TSM, & TFC.
News and Technical’s
With daily reversals and big point moves as this morning begins, it looks like the market is shaping up to give us more of the same. Sadly we seem to be losing the battle on the virus front hit a new national record of daily infections as well as a new daily record death toll. Several state now requiring the wearing of masks in public while some profoundly affected states want to soldier on without additional measures. The pandemic is putting a strain on the healthcare system in several states filling their hospitals to near capacity. Today we will get earnings reports BAC and MS and NFLX. Although very early in the season, the results have been a mixed bag. We also have our biggest day of the week on the economic calendar, which includes Jobless Claims and Retail Sales numbers as if there is not already a lot for the market to digest.
Yesterday’s big gap up was an excellent follow-through to Tuesday’s rally but ended the day rather unconfidently. The DIA tested the resistance of the Island Reversal pattern established in early June, but the bears held their ground by the close. The SPY easily broke above its island reversal pattern holding it solidly into the close while the QQQ struggled with a lackluster performance with several of the big tech giants finding some profit-takers. IWM benefited from the rally in the financials after the GS earnings report finally breaking above and holding its 200-day moving average by the close. With a big day of data, the US Futures currently point to a gap down open. The VIX, although pulling back yesterday, continues to hold above its 200-day average holding on to an elevated close above 27 handles. With so much data coming our way, anything is possible, so plan carefully and remain flexible.
Monday’s price action delivers bearish reversal patterns but fails to follow-though, so on Tuesday, the market is dealt another full price action reversal by the bulls. The VIX continues to remain very elevated, and the Absolute Breadth Index continues to decline as infection rates rise in 39 states. Interestingly so-called safe-haven issues in the consumer defensive sector had a very good day yesterday, and gold and silver values continue to climb. Indeed an interesting dichotomy for traders to navigate.
Asian markets trade mixed but mostly higher overnight, with the NIKKEI closing up 1.59%. European markets are in the full-on bullish mode this morning, reacting to the hopeful vaccine news. US futures are leaping higher this morning on the same vaccine news and in reaction to the GS earnings. At the moment, the Dow futures suggest a gap up open of nearly 450 points.
Economic Calendar
Earnings Calendar
On the hump day earings calendar, we have 27 companies reporting with our second round of big bank reports. Notable reports include AA, BK, GS, INFY, PNC, SNBR, USB, & UNH.
News and Technical’s
The game is on with 3rd quarter earnings with JPM reporting declining earnings results but, they beat the analyst’s estimates, so the stocks rallied. I suspect this will continue today as we progress through several significant bank reports this morning. A strong late-day rally pushed the Dow up 556 points reversing Mondays bearish reversal pattern that failed to follow through. Interestingly, Gold, Silver, and bonds rallied with the market as the Absolute Breadth Index continues to decline. The VIX pulled back below its 50-day average but remained elevated, closing the day above 29 handles and suggesting the wild price volatility is far from over. This morning futures point to a bullish follow-through in anticipation of earnings and a hopeful report from Moderna on a vaccine trial that produced a COVID-19 immune response.
Thirty-nine states now report rising infection rates with more than 65,000 new cases reported yesterday with more than 900 deaths. Adding to the tensions with China, the President yesterday signed a bill sanctioning them and ending Hong Kong’s preferential treatment status. China has, of course, already vowed retaliation but, as of now, has given no details as to what that might entail. Apple has won in EU courts, saying the company doesn’t have to pay nearly 15 billion in Irish taxes. Texas approves tax breaks for Tesla if they build the proposed 1.1 billion car plant near Austin. I suspect other states will soon join the bidding war for the construction. With less than 4-months to the presidential election, Joe Biden seems to be gaining momentum according to the latest poll. We can expect some market volatility as the race heats up, and the political rhetoric reaches a fevered pitch over the months ahead.
A sharp rally followed by a nasty reversal selloff leaving behind bearish candle patterns and more questions than answers heading into 3rd quarter earnings. The VIX closed above a 32 handle showing a level of uncertainty not generally associated with new record highs. I suspect the volatility will remain quite high, making the navigation through earnings season quite challenging even for very experienced traders. Stay sharp and plan for just about anything in the days ahead.
Asian markets saw modest losses across the board even as their June trade data beat expectations. European markets are trading lower this morning as concerns of the spiking pandemic infections weigh on investor sentiment. US Futures again find the energy to pump up in the premarket trying to ignore yesterdays selling damage as earnings season begins. Anything is possible, so stay focused and flexible.
Economic Calendar
Earnings Calendar
Today we officially kick-off 3rd Quarter earnings with 14 companies fessing up to quarterly results. Notable reports include JPM, AMX, C, DAL, FAST, & WFC.
News and Technical’s
I’m guessing yesterday turned out to be a bit painful after the significant index gains quickly reversed after the Governor of California announced a sweeping roll-backs due to a 28% increase in infections. Two of the largest California school districts will not reopen favoring distance learning in an attempt to protect students and teachers from the virus. I had mentioned the possibility of a pop and drop pattern, but the way this reversal played out was strickly the sensitivity of the market to the news. Interestingly as the market rallied yesterday, the Absolute Breadth Index continued to decline. However, as soon as the selling began, the Breadth Index rallied with the selloff. I believe that a large portion of that problem is that just 5-companies now command a full 25% of the entire SP-500 weight. An imbalance that could become a significant problem should profit-taking take hold in the five heavyweights. Yesterday may have been a preview of what could happen if that should come to pass.
Technically speaking, the flash selloff yesterday adds a bit of complication to the look of all the index charts as we begin 3rd quarter earnings. The DIA left behind a nasty shooting star pattern that once again failed the 200-day average. It would appear ahead of earnings they bulls are pushing to test the 200 once again as resistance at the open. The SPY left behind a bearish dark cloud cover pattern failing to hold the break of the early June island reversal pattern. The NASDAQ was the first index to have reversed yesterday from a very extended run leaving behind a bearish engulfing pattern on the QQQ. IWM finished the day with a dark cloud cover pattern, and the VIX ended the day printing a reversal that broke above its 50-day average closing above a 32 handle. With the VIX so elevated and facing an uncertain earnings season traders should expect challenging price volatility. Stay focused, and flexible as anything is possible in the days ahead.
As the bulls push for new record market highs this morning, it seems there is no price too high for some stocks with 3rd quarter earnings set to begin this week. With Covid-19 infections rising, some areas have reported hospitals are at capacity. Still, the market seems confident that no matter the impacts, the Fed and the Congress will cover the costs with more debt to keep the market going up. Expect the wild volatility to continue in the week ahead.
Asian markets rose sharply overnight, with the NIKKEI closing up nearly 2.25%. European markets are full-on bullish across the board this morning up more than 1.3%. US futures opened positive and continue to push higher this morning with a gap up open that will set new NASDAQ record highs at the open. Go bulls!
Economic Calendar
Earnings Calendar
This week we begin the 3rd quarter earnings season with the big bank beginning to report on Tuesday. We start the week with a light day with just 9-companies reporting with only one notable report coming from PEP this morning.
News and Technical s
I’m not sure it makes any difference to write about the impacts of coronavirus as the country continues to soar in new infections. As states require the wearing of masks such as Florida after reporting more than 15,000 new infections, protests broke out from groups saying that infringes on their rights. You can’t make this stuff up! If I were writing a novel, it would be so unbelievable it would not sell. Several areas in the country reporting that hospitals are at capacity treating Covid-19 patients, and the death toll in the US is back on the rise. Approaching earings, the market appears to have little to no concern about the pandemic with the expectation that the Fed and Congress will continue to escalate the deficit to keep the market going higher. With the national debt over 26.5 Trillion, the consequences of such spending are apparently irrelevant in today’s society.
Futures began trading last night seeing only bullishness, and that sentiment has only grown as we near the open of the day. The NASDAQ is poised to set another new all-time high at the open, and the SPY will gap above the island reversal that has recently served as resistance. The DIA, which has struggled with the resistance its 200-day average, will gap above it this morning at the open. Gaping to new record highs always carries with it the risk of a potential pop and drop, but with the bulls relentlessly willing to pay any price for stocks ahead of earnings, I would not rule out a big short squeeze sending indexes even higher. Expect wild price action to continue in the week ahead. Stay focused and flexible.
As we head into the weekend, the tech giants continue to lead the way setting new records while DIA, SPY, and IWM experience some selling pressure. At the same time, 18 million Americans remain unemployed as more than 1.3 million files for benefits. That nearly doubles the number we experienced in the depths of the 2008 and 2009 depression. The VIX continues to display the uncertainty the market faces as a select few stocks continue to rise to new price highs.
Asian markets closed the day lower across the board as virus infections weigh on recovery hopes. However, European markets are bullish this morning in reaction to hopeful Italian data. US Futures have recovered from overnight lows suggesting modest declines at the open ahead of a very light day of earnings reports and pending PPI data.
Economic Calendar
Earnings Calendar
On Friday’s earnings calendar, we have a light day with just 11 companies stepping up to quarterly results. The report from SJR is the only particularly notable report I see. Remember, the official kick-off to the 3rd quarter earnings season begins next week.
News and Technical’s
Another day of records with the NASDAQ reaching out to new highs while at the same time coronavirus infections in the US topped 63,000 for the first time. More than 1.3 million filed for unemployment last week, and the concern is that the numbers may now start to grow as states struggle in their efforts to recover with the recent surge in the pandemic infections. It’s interesting to note that even at 1.3 million, the number is double the worst numbers we experienced in the depression of 2008 and 2009. A day after the Supreme Court rules against the President, his competitor calls for an end of the era of shareholder capitalism, suggesting higher corporate taxes. Tensions continue to grow as following the impositions of sanctions of three local Chinese officials of China’s ruling Communist party over human rights abuses. China vows to retaliate.
As we head toward the weekend, the imbalance between the tech giants continues with the QQQ holding on to a strong uptrend while the DIA, SPY, and IWM experience selling pressure. I have to wonder what happens to the market if or when profit taking begins in the tech sector. The VIX continues to suggest a considerable uncertainty exists as it seesawed between a low of 26 and a high of 31 handles yesterday. Facing a light day on both the economic and earnings calendar, the market could be sensitive to the news cycle, and price action is likely to remain volatile. Next week begins the 3rd quarter earnings season, which is likely to keep the wild price action going into the near future. Stay focused and flexible, carefully considering the risk you carry into the weekend.
As the Nasdaq prints, another record high the US also sets a new national record of Covid-19 infections and health officials as calling for a federal policy to curb the spread. While on the surface, the market appears to have absolutely no concerns, yet the VIX remains quite elevated, and the Absolute Breadth Index continues to decline. An interesting dichotomy that could produce a bullish short squeeze or an attack by the bears as recovery concerns mount. Stay focused and flexible as the market grapples with what comes next.
Asian markets continue their bullish run with week lead by China, which rose 1.39%. European markets have seesawed between gains and loss this morning as they cautiously monitor pandemic numbers and the challenging recovery. Ahead of a light day of earnings and another round of jobless claims US futures point to a slightly lower open.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have just 11 companies reporting quarterly results. Notable reports include WBA, BNED, FC, HELE, PSMT, & WDFC.
News and Technical’s
The bulls refuse to lose continuing to buy up the big tech giants with NASDAQ setting another record high lead by AAPL, which also closed the day at a record high. As the market continues to surge, so does the pandemic infections, hitting a new national record of 60,000 new cases reported in a single day. Health officials are calling for a federal policy action to curb the spread of the virus, suggesting another shutdown may be necessary. A new study warns of a potential wave of brain damage as an aftereffect of Covid-19 infections. The research shows patients suffering from temporary brain dysfunction, strokes, nerve damage, or other serious brain effects. A scary thought considering the US is now dealing with more than 3 million that have already been affected by the virus. According to reports, there is already a noticeable pullback in driving activity as people choose to stay home rather than risking infection. United Airlines warns that half of its workforce may be furloughed, suggesting up to 36,000 people could see their jobs cut as recovery hopes fade in the recent weeks. Bed Bath & Beyond announced they would close 200 stores after reporting a sharp sales decline of nearly 50%, and the Pier One said it would not reopen retail stores in their bankruptcy reorganization moving to online sales only.
Technically speaking, the DIA, SPY, and IWM indicate a possible higher low could be forming after yesterday’s rally, yet at the same time struggling with overhead resistance and potentially bearish candle patterns. Adding to the confusion is the fact that the VIX remains elevated, and the Absolute Breadth Index continues to decline. I see the potential for a bullish short squeeze and, at the same time, see the possibility that the bears could soon attack at any time due to growing recovery concerns. It’s also odd to see indexes setting new records while at the same time precious metals continue rally sharply. Ahead of weekly jobless numbers, the futures currently point to a slightly lower open. Stay focused on price action and remain flexible and prepared for just about anything.
With coronavirus surging around in many US states, the business remains under tremendous pressure with additional closures and further delays of reopening of the economy. The huge back to the school shopping season is also in question as school districts and parents grapple with the difficult decisions of reopening and child safety. Yesterday’s mild selloff left more questions with bearish candle patterns appearing on the index charts at possible highs or near resistance levels. With the VIX rising in yesterday’s close expect price volatility to remain high and extreme sensitivity to news events.
Asian markets closed mixed but mostly higher, with Shanghai rising 1.74%. European markets are seeing modest declines across the board this morning as the surge in pandemic infections worries investors. US Futures chop around the flat-line this morning with a light day of earnings and economic news.
Economic Calendar
Earnings Calendar
On the Hump day earnings calendar, we have just 14 companies expected to report quarterly results. Notable reports include BBBY, MSM & SMPL.
News and Technical’s
US coronavirus infections have topped 3-million cases with states reporting more than 55,000 instances yesterday and 993 deaths. Arizona has seen a 26% increase in infections with the WHO suggesting just a 5% increase is troubling. In response to rapidly rising cases and hospitalizations, Texas canceled the state fair while San Francisco delays reopening indoor dining. It’s no wonder that parents have concerns about sending their children back to school this fall, and retailers worry about the back to the school shopping season. The President is suggesting he will do all he can to pressure schools to reopen. Tensions between the US and Chiana continue to grow after the FBI Director slammed their government for the use of espionage and cyberattacks against the United States. He said the stakes could not be higher, and the potential economic harm to American business as a whole almost defies calculation. These comments come on the heels of the Secretary of State threatening to ban Chinese social media apps.
After a gap down open, the bulls once again attempted a rally to test resistance levels but found resistance and ultimately selling off by the close. Potential bearish candle patterns such as an abandoned baby pattern or evening star patterns were left behind on the DIA, SPY. The QQQ left behind the uncertainty of a shooting star pattern, and the VIX rose above a 29 handle. Declining issues far outpaced advancing issues after the Schwab pointed out that 90% of the current market rally is attributed to just the top 10% of companies. This colossal imbalance raises the question, what happens to the market should these tech giants begin to selloff? An interesting question to ponder as we head for a relatively flat open with a light day of earnings and economic news.
The NASDAQ lept higher yesterday, setting new records while the Dow, SP-500, and Russell struggled to find follow-through to break price resistance levels. In a pattern that’s becoming all too familiar of late, the big morning gap struggled to find buyers or sellers as it chopped sideways the majority of the day. This morning with the EU forecasting an 8.3% economic slump and the US states beginning more business shutdowns, it looks as if the big gap this morning will be down trapping those that chased in yesterday.
Asian markets closed mixed but mostly lower overnight. European markets fall on concerning economic data with the DAX, FTSE, and CAC down 1% or more this morning. US Futures in reaction to virus-related business uncertainty suggest a substantial gap down at the open ahead of a light day of earnings and economic reports.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 10-companies fessing up to quarterly earnings. Notable reports include LEVI and PAYX.
News and Technical’s
We have reached nearly 3 million coronavirus cases in the United States, with several states doubling infection rates in just two weeks. Florida is once again closing restaurants, health clubs, and group party venues, and some areas in Texas are reaching hospital capacity. Australia closed interstate borders in an attempt to slow the spread of the pandemic, and the Governor of California asks indoor business to close. With more and more states adding to shutdown orders and mulling future restrictions, it would seem the economic recovery continues to face considerable challenges. As tensions grow with China, the US is conducting war games in the South China Sea and, at the same time, looking at banning social media apps such as TikTok. During the night, the EU cut its economic forecasts for the region and is now projecting an 8.3% decline in the economy this year.
Yesterday’s big morning gap struggled to find follow-through buyers spending most of the day chopping sideways. The DIA, on a last-minute surge at the end of the day, breached the resistance of its 200-day average. Although the SPY tried hard to break the resistance of the early June island reversal pattern, it closed the day, failing to breakthrough. The QQQ lept higher with the tech giants leading the way while the IWM closed the day lower once again, unable to reach its 200- day average. With a light day of earnings and economic news, the market seems to have turned its attention to the impacts of the viral surge that is prompting business shutdowns in several states. As of now, the US futures are pointing to a gap down open that has the potential to create abandoned baby patterns at resistance in the DIA and SPY. With the VIX remaining elevated, expect the wild price volatility to continue today.
With markets around the world surging under bull pressure while at the same time coronavirus infection rates set new records, one has to wonder if the rally is real or if the world is suffering from a major case of denial? I guess we will find out if companies can support these prices with 3rd quarter earnings just around the corner. Set for a big gap up open, the indexes will be testing key moving averages resistance levels as well as the island reversal patterns created in early June. The question for today, will we see follow-through buying after the gap, or will it produce another pop and drop pattern like Friday?
Asian markets closed sharply higher overnight, with the Shanghai index leaping nearly 5.75%. European markets are very bullish this morning with the DAX, FTSE, & CAC all higher by more than 1.5%. US Futures point to a substantial gap up at the open as the bulls push once again push for new record highs in the tech sector.
Economic Calendar
Earnings Calendar
On Monday’s earnings calendar, we have 35 companies stepping up to report quarterly results. However, looking through the list, I’m not finding any of today’s reports as particularly notable.
News and Technical’s
After a holiday, 3-day weekend markets around the world surge higher. With 3rd quarter earnings only a couple weeks away, there seems to be no price too high as market leaders set new records. I can’t decide if this rally is justified or if the entire world is suffering from a major case of denial. Over the weekend, health departments reported increased infection rates in 40-State with some Texas regions reaching their hospital capacity. Florida reported more than 10,000 new infections each day of the long weekend. Lawlessness is also on the rise with more 40 shootings in New York alone that resulted in an 8-year old innocent bystander killed by a stray bullet. Although 1.4 million people filed for unemployment last week, the Employment situation number better than expected rehiring occurred over the previous month. With unemployment, at 11%, the market appears to ultra-confident that the coming earnings season will support current stock prices.
With the market set to open with a huge gap up open, the DIA and IWM will once again attempt to break above their 200-day averages. The QQQ will challenge new record highs, and the SPY will test the resistance fo the island reversal pattern printed in early June. I expect T2122 to reach into the bearish reversal zone at the open, so be careful chasing the open with a fear of missing out. Please make sure there are follow-through buyers rather than the pop and drop pattern like we saw on Friday’s morning gap.
