The bill is now on the president’s desk, but he calls the stimulus bill unacceptable. He calls on Congress to raise the direct payments to $2000 from the approved $600 and cut the laundry list of wasteful pork belly spending. An interesting turn of events is likely to keep the media hopping and the market unsettled with the uncertainty. The NASDAQ printed its 54th new record high in 2020 yesterday, a remarkable feat considering the economy’s actual state. Keep in mind volume typically declines as we head into the holiday shutdown. Plan your risk accordingly.
Overnight Asian markets rallied in response to the Congressional passage of the stimulus bill. Across the pond, European are mostly higher on hopes that a Brexit trade deal is on the verge of completion. U.S. Futures recovered overnight loss and currently point to a bullish open ahead of a busy economic calendar with potentially market-moving effects. Right Way Options will be closed on Christmas Eve and Christmas day, so there will be no blog or Morning Prep Video. On behalf of my family, I want to wish you and yours a safe, Very Merry Christmas.
Economic Calendar
Earnings Calendar
It should not be a big surprise that there are very few earnings as we head toward the Christmas shut down. There is only one notable report, PAYX. We have no notable reports on Thursday and, of course, Friday.
News and Technicals’
After weeks of wrangling, both Congress bodies finally passed the stimulus bill, but now that’s it’s on the President’s desk, he says it’s unacceptable. Although he has not said he will veto the bill, he has asked Congress to increase the direct payments to $2000 per citizen and up to $4000 per couple. He also listed a disgraceful laundry list of wasteful pork belly spending in the bill he wants cut before signing the spending plan. A movie script on the last few week’s politicals in the U.S. would have been trashed as too unbelievable just a few years ago. According to reports, the U.K. and E.U. may be near a Brexit trade deal, good news, as they quickly approach the deadline. With the new virus, strain brings up worries of more business restrictions; the Dow lost ground yesterday, but the resilient NASDAQ inked its 54th new record of 2020. A remarkable and honestly unbelievable feat considering the state of the economy and rapidly pandemic having many hospitals near capacity.
We have a very bid day on the Economic Calendar today, and the bulls remain very feisty, recovering from overnight losses pointing to a bullish open. Index trends remain bullish, but with the Absolute Breadth Index continuing to decline and the holidays just around the corner, there is a reason for caution. Plan your risk carefully. Right Way Options will be closed on Christmas Eve and Christmas day, so there will be no blog or Morning Prep Video. On behalf of my family, I want to wish you and yours a safe, Very Merry Christmas.
The bulls stampeded back into stocks after gaping substantially lower yesterday, choosing to hear no evil or see no evil in the new, more infectious strain of the virus impacting Europe. In a late-night session, the U.S. House passed the stimulus bill and spending bill, avoiding a government shutdown. Now traders will have to answer the question, is the stimulus already priced into the market? Currently, futures are flat, while yesterday’s bullish price action raises hope of a Santa Claus rally.
Overnight Asian markets dipped in reaction to the new economic restrictions weighing on investors. After a rough day of selling yesterday, European markets trade modestly higher this morning despite the new virus strain’s economic impacts. After receiving the government go-ahead for the 2nd largest stimulus bill in government history, U. S. futures are taking a wait and see approach ahead economic reports.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just 4-verified reports. Notable reports include KMX, CTAS, & NEOG.
News & Technicals’
After weeks of political gamesmanship, the U.S. House passed the 2nd largest stimulus bill in government history. Americans could get the $600 direct payments as soon as next week and extend a lending program for business and up to 15 billion in aid to airlines. Google and Facebook are reportedly teaming up to battle antitrust lawsuits that have raised the possible collusion between the companies to price fix advertising prices. The SEC has been very busy of late and, according to reports, will soon sue the cryptocurrency firm Ripple for selling unregistered securities. The new strain highly contagious strain of the virus is already suspected to be here in the U.S., according to Whitehouse health officials. Scientists from the U.K. suggest the new strain is up to 70% more contagious. However, the market chose to ignore the new threat to the economy in favor of the new deficit spending bill in a highly volatile trading session yesterday. According to Johns Hopkins data, the U.S. is recording at least 215,700 new infections and at least 2600 deaths each day based on a seven-day average.
After some wild price action whipsaws, the bulls rushed back in yesterday as if they have zero concern about the overall economy’s state. However, after passing the $900 billion stimulus plan, the U.S. Futures seem to have stalled this morning. Printing bullish candle patterns on the index charts suggest there is still hope for a Santa Claus rally as we head toward the Christmas shutdown. We have many potentially market-moving data coming our way on the economic calendar today and tomorrow, so stay focused and expect price sensitivity to the news cycle. Will we continue to hear no evil and see no evil as economic impacts continue to grow?
The U.K. reported a new, more contagious strain of the virus on Sunday, overshadowing the 900 billion stimulus bill agreement sending the futures sharply lower. If this morning’s gap-down reversal gains momentum, it could be a painful day with price and technical supports substantially lower. Though cooler heads may prevail, make sure you have a plan to protect your capital. Expect extreme sensitivity to the news as countries extend and strengthen restrictions in reaction to the new strain.
Asian markets closed mixed but mostly lower overnight. European markets trade decidedly bearish this morning as new travel restrictions go into place. U.S. futures have bounced off overnight lows but still point to a substantial gap down ahead of a light earnings and economic calendar day. Buckle up volatility and with an extreme sensitivity to news surrounding the new strain.
Economic Calendar
Earnings Calendar
As we kick off the Holiday week, we have a light earnings calendar. Notable reports include FDS & HEI.
News and Technicals’
The second vaccine from Moderna reaches hospitals today after emergency approval last week, with infection and death rates remaining very elevated. Late Sunday afternoon, Congress agreed on a 900 billion dollar stimulus bill, the 2nd largest in history. The House will vote on the bill later today, sending to on to the Senate for approval. Airlines are on track to receive another 15 billion in government support but must call back furloughed workers to receive the payments. Yesterday the U.K. scientists identified a new, more aggressively infectious strain of COVID. In reaction, several countries have already banned travel, and instead of the planned easing of restrictions ahead of Christmas, Parlement may add to lockdown restrictions in an emergency Parliament meeting. After hearing about the stimulus agreement, U.S. futures surged 200 points but have turned sharply bearish as new restrictions in reaction to the new strain worry investors.
After a very volatile overnight futures market fueled on the mixed emotions of stimulus and a more infectious strain of the virus, the market points a substantial gap down at the open. Dow futures more than 600 points but has thus far rallied off the overnight lows. That said, those that were buying up positions before the weekend will likely experience a painful reversal this morning. Perhaps cooler heads will prevail, but this is the kind of event that could easily trigger a swift and significant selloff. Try not to panic and stay focused on the price action but plan to protect your capital if the run for the door gains momentum.
The bulls and bears stood toe to toe yesterday, duking it out with either side unable to gain any momentum as we wait on Congress. Evidence continues to show that pandemic restrictions are slowing the economy, and with infection rates exploding to about 1 million every 4-days, I suspect that will only get worse. Has this rally already priced in the stimulus bill? Maybe, so be careful overtrading and consider your risk carefully heading into the weekend and the holiday week ahead.
Asian markets closed the week red across the board in reaction to the Bank of Japan rate decision. European markets this morning show modest gains even as a no-deal Brexit weighs on investor minds. U.S. Futures are trying to shake off overnight lows during the morning pump up that has become all too familiar of late. With a light earnings and economic calendar day, expect an extra dose of news sensitivity as we head into the weekend.
Economic Calendar
Earnings Calendar
We have a light day on the Friday earnings calendar, but we still have a few meaningful reports. Notable reports include APOG, DRI, NKE, & WGO.
News & Technicals’
With an afternoon vote, the FDA endorses the second vaccine choice, with Moderna gains approval for emergency use. A good thing as the infection rate explodes around the country, adding about 1 Million new positive tets in just 4-days. According to reports, the widespread hack included a breach at Microsoft. They are not suggesting millions of Americans may have been affected by the attack. The deadline for a Brexit trade deal is drawing near with several key disputes yet to resolve. A no-deal Brexit could create some stock market and currency market fluctuations. Keep an eye on this developing story.
After gapping higher on high hopes of a stimulus bill, the market seemed to lose momentum quickly and chopped in a narrow range the rest of the day. The Absolute Market Breadth Indicator continues to decline, and the T2122 indicator suggests a very extended condition in the indexes. That said, the bears don’t appear to have any teeth, and the trends remain bullish as we wait for a congressional decision. The indexes appear pensive and wound pretty tight, waiting on a news event that can create an explosive move in either direction. As you plan your risk into this weekend, keep in mind volume tends to decline quite sharply, heading into the Christmas holiday shutdown.
The market seems solely focused on stimulus, rallying the NASDAQ to new record highs. Little details such as declining retail sales, new record hospitalizations, and the highest daily death toll over 3600 Americans won’t stand in its way. Sorry for the sarcasm, but ignoring the economy’s actual state can make for a hazardous situation if the market sentiment suddenly decides to shift. Stay with the bullish trend but stay focused and have a plan to capture gains and protect your capital because a shift south could be swift and punishing.
Overnight Asian markets recovered from early losses to close with modest gains across the board. Across the pond, European markets advance with stimulus talks in focus. Ahead of Housing Starts, Jobless Claims, and the Philly Fed MFG Index, futures currently point to a bullish open fueled up on hopes of more federal deficit stimulus spending. Stay focused as we continue to extend.
Economic Calendar
Earnings Calendar
As usual, the Thursday earnings calendar is one of your busiest days of reports. Notable reports include CAN, BB, FDX, GIS, JBL, NAV, RAD, & WOR.
News & Technicals’
Focused only on stimulus hopes and seemingly ignoring any other economic details, the futures are rising this morning. A miss on Retails Sales, a decline in PMI, with new records of more than 3600 deaths and hospitalizations while on the same day printing new a record on the NASDAQ. Jerome Powell left rates near zero and reintegrated the FOMC commitment to keep them low as long as necessary for the economy to recover. The FDA expects to vote on Moderna’s Covid vaccine later today, and Congress is making progress on the stimulus bill. Several states joined Texas in an antitrust lawsuit against Google, claiming collusion with Facebook fixing advertising prices. Antitrust against the tech giants seem to be shaping up as a theme for 2021.
At the risk of sounding like a broken record, stay with the bullish trend but have a plan to capture gains and protect capital if the market suddenly decides to care about the actual economy’s condition. Before the open, today will get readings on Housing Starts, Jobless Claims, and the Philly Fed MFG Index. The most likely to move the market would typically be the Jobless Claims, but with high hopes of newly printed stimulus debit, even a negative number could inspire new record index highs. I will reiterate that both T2122 and T2101 are both flashing clues to be cautious, so be careful not to overtrade or chase already extended stocks.
Just 2-weeks before Christmas, Senate leader McConnell congratulates Biden as the president-elect, and he and Schumer say a stimulus funding deal is on the way. That has the futures pointing to new record highs at the open, assuming the data deluge on the economic calendar doesn’t trip up the bulls. Keep in mind that shortly after the open price, action could become light and choppy as we wait for the FOMC decision and press conference beginning a 2 PM Eastern time. Stay on your toes and prepare for the possibility of some price volatility.
During the night, Asian markets closed the day mixed but mostly higher following the U.S. rebound on Tuesday. European indexes are advancing across the board following a positive global growth trend. Here in the U.S., the bulls are fueled up on stimulus hopes ahead of a big day of economic reports. Buckle up it could prove to be a wild ride.
Economic Calendar
Earnings Calendar
The hump day earnings calendar is a light one, but we have a couple of reports worth a look. Notable reports include LEN & TTC.
News & Technicals’
After meeting yesterday on the stimulus bill, Senators McConnell and Schumer hope to soon progress on the funding deal. Hopefulness that the spending bill will soon be on the way is inspiring the bulls once again this morning, likely setting new record highs at the open today. However, attention will quickly turn to the busy economic calendar with Retail Sales, PMI Composite, Business Inventories, Housing Market Index, and EIA Petroleum Status. If that’s not enough to keep traders guessing, we have the FOMC Announcement and the Chairman’s press conference to keep the price volatility alive. In a move that seems to put the presidential election to rest, Senate Leader McConnell congratulates Biden on his win and urges Republicans not to reject the president-elect’s victory.
The bullish trends remain, and with hopes of more stimulus futures point to more record highs this morning. That said, clues are warning that a little caution is warranted. The Absolute Market Breadth indicator continues to downtrend even as the market rallies, suggesting fewer and fewer stocks keep the rally alive. Also, the T2122 indicator is once again suggesting a short-term over-extension. Stay with the trend but have a plan to protect your profits and capital if sentiment begins to shift quickly. Monday’s big rehearsal should serve as a reminder that bears still exist and how quickly the bullish tide can recede from this elevation.
Yesterday was a mixed bag of results in the indexes as vaccine news seems to have lost some of its power to inspire the bulls facing a long winter with more lockdown restrictions likely. However, with the healthcare system bursting at the seams with pandemic patients, Congress feels the pressure to pass a stimulus bill by the end of the week. Could this perhaps inspire a Santa Claus rally, or has is it already baked into the current index prices. Something ponders as you plan your risk facing a hectic week of economic data ahead.
Overnight Asian markets closed in the red across the board, responding to a resurgence of virus concerns. European markets trade cautiously mixed this morning with Brexit talks in focus. Here in the U.S., futures point to an overnight reversal as the bulls gain new energy with high hopes of stimulus money soon on the way.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have a light day. Notable reports include AOUT and NDSN.
News & Technicals’
Yesterday the vaccine news that pushed the markets higher at the open ran out of energy, creating a mixed bag of results in the indexes. The QQQ and IWM managed to rally while the DIA and SPY sold-off as the VIX rallied, showing a little fear. It would seem the vaccine news has now baked in, and the market is beginning to focus on the genuine possibility of more restrictions and lockdowns impacting business. The Electoral College has confirmed Joe Biden as the next President of the United States and ended the Trump administration’s long legal battle. Futures are once again rising with Congress working to pass a stimulus bill by the end of the week. With the U.S. death toll topping 300K and the health care system strained nearing capacity in many parts of the country, Congress feels the growing pressure to respond. The big tech social media giants face hefty fines under new UK rules as the U.S. steps up with substantial antitrust pressure of their own.
Although the DIA and SPY selling was significant, the daily charts remain in bullish trends but signal a bit more caution is warranted. It is still possible that the indexes experience a Santa Claus rally is a stimulus bill does get passed. Still, we should also consider the possibility that stimulus hopes have already been priced into the market. With pandemic lockdown restrictions on the rise and a long winter ahead, the stimulus bill’s passage may well become a sell the news event. Yesterday’s price action points to growing volatility and points to the danger of chasing stocks that are already quite extended. We have a lot of data coming our way in the next few days, so plan your risk carefully and remember to take some profits along the way.
Jobless claims disappointed markets yesterday but having Congress adjourn for the weekend without reaching a stimulus deal appears to be the more significant disappointment this morning. The Whitehouse’s legal battle could also create considerable volatility in the days ahead, depending on how or if the Supreme Court gets involved. The market hates uncertainty, and as we slide into this weekend, considering this historic rally, traders have some tough decisions to make. Capture gains or wait, holding on to hopes for the week ahead. What’s your choice?
Asian markets finished the week with mixed results, but European markets see red across the board as Brexit, and the U.S. stimulus battle continues. The U.S. futures market point to a bearish open that could test index trend supports as traders grapple with the weekend’s uncertainty. It’s been a while since the bears showed much of a willingness to fight but never forget they can attack anytime, so have a plan to protect your capital should they decide to show some teeth.
Economic Calendar
Earnings Calendar
Although we have some very small-cap companies, Friday is a light day of quarterly reports. Looking through the list, I could only come up with one somewhat notable, JOUT.
News & Technicals’
An increase in unemployment has the bears stirring about yesterday, but overall the market was still hoping that Congress would reach a stimulus deal. Instead, Congress passed a single week stopgap spending bill avoiding a government shutdown and then adjourned for the weekend. As a result, the market is showing its disappointment, suggesting a bearish open. Prizer’s Covid vaccine took a big step forward with the FDA’s advisory committee recommendation for emergency use. Now it moves up the ladder looking for a full FDA agency approval. In a move that bucks the overall market love affair with Tesla, Jefferies downgraded the company, suggesting they don’t believe the carmaker can dominate the auto industry. Battleground states urge the Supreme Court to reject Texas efforts to overturn the election results. Seventeen states have joined with Texas setting up an interesting legal battle that could create substantial market shockwaves depending on how the battle progresses.
Although the pullback may be disappointing to many, the T2122 indicator has signaled this possibility for some time. Should the early morning bearishness hold through the open, the short-term trends will receive a test of support. If the bulls have the energy to defend, then there is no harm in taking a little break in the current rally. However, if the bears become emboldened, price support suggests that the pullback could be quite painful. Remember, the market has the propensity to throw a bit of a temper tantrum when they don’t get their stimulus fix. Stay focused and have a plan should the bears decide to show their teeth.
The markets once again took their cues from vaccine news and hopefulness for federal stimulus as the SP-500 topped 3700 for the first time in history and the Nasdaq set its 50th record high for the year. Valuations continue to soar as the overall market P/E Ratio stretches 72% above the 10-year average. The U.S. added 1 million new infections in just 4-days, but that is not slowing down the bull run with a parade of big investment banks predicting a bullish 2021 market. Trade with the trend but have a plan should the sentiment suddenly shift because current market prices are long from technical supports.
Asian markets traded mixed but mostly higher overnight, with the Shanghai down more than 1%. European markets are currently bullish across the board this morning, with Brexit talks in focus. U.S. Futures point to another morning of bullishness ahead of the JOLTS report and several earnings reports.
Economic Calendar
Earnings Calendar
On the Hump day earnings calendar, we have another light day but still have several quarterly reports of potential market moving. Notable reports include ADBE, CPB, DBI, HOV, VRA & VRNT.
News and Technicals’
It’s becoming all too common, with the market setting new record highs based on vaccine news and federal stimulus hopes. The SP-500 tops 3700 for the first time in history as the Nasdaq prints its 50th record high for the year. As the markets surge higher, so goes the pandemic infections adding 1 million new cases in just 4-days. Phizer is now warning that people with significant allergic reactions shouldn’t take the vaccine after two of Britain’s National Health Service experienced severe reactions. However, both are not recovering, according to the national medical director. Citi Private Bank added its voice to the chorus of big investment banks predicting market gains in 2021 and went on to say it loves these ‘unstoppable’ trend. Mortgage rates continue to fall, setting the 14th record low of the year today, driving more refinance demand.
Without question, the bulls have shown remarkable resiliency and a willingness to buy almost anything, no matter the price. Trends remain strong as we continue to extend steeply away from technicals supports. Stay with the trend, but once again, I caution you to be very careful not to overtrade or chase already extended stocks. Remember, what goes up in a euphoric market rally tends to have severe correction consequences at some point in time. Be prepared in case the sentiment suddenly shifts.
The NASDAQ sets if 49th record high of the year even as the bears make half-hearted attempts in the SPY and DIA. While there are clues that the economy is slowing due to pandemic shutdowns, the bulls remain resolute, showing a willingness to keep extending. Even with vaccines coming to market, we still have a long winter ahead of us, and in the short-term, markets look very extended. Euphoric markets tend to last longer than most would expect, so stay with the trend, avoid chasing extended stocks, and be careful not to overtrade. Runs like this tend to end in an ugly way.
Asian markets closed modestly lower across the board overnight, and European markets see red with a Brexit deal hanging in the balance. Ahead of earnings, another light economic calendar, and Congress still unable to get their act together, U.S. Futures point to lower open.
Economic Calendar
Earnings Calendar
Although the earnings have been winding down, we still have several stepping up with quarterly reports. Notable reports include CHWY, GME, AZO, CONN, GWRE, HRB, THO., BF.B.
News & Technicals’
Although we had a little selling yesterday, it was very controlled, and by the end of the day, the bulls maintained control of the trends. The NASDAQ fought the selling, rising to its 49th high record for the year. The Pfizer vaccine has begun rolling out, with a 90-year-old woman in the UK receiving the very first dose. The UK is dubbing the event at V-day after suffering considerable losses across the country due to the pandemic. With the federal government facing a funding shutdown on the 11th, the best it seems that Congress can do is attempt to pass a spending bill that will cover a single week of operation as they continue to haggle over the stimulus bill. With management like that, it’s no wonder that the federal debt is quickly approaching 30 trillion.
Bulls remain in control of the trends, and the T2122 indicator continues to flash a short-term overbought condition. There are so many stocks looking parabolic; it’s very reminiscent of the euphoria present in the 1999, 2000 tech bubble. Although the market conditions are very different, the fear of missing chase of very extended stock prices is much the same. A euphoric market can last much longer than one might think, but it is usually swift and very punishing for those coming to the party late when they end. Although I sound like a broken record, I want caution traders to stay with the trend but guard yourself against overtrading and avoid chasing already extended stocks.
