As stats reopen their economies, consumers were out in force shopping according to the retail sales number.  Although they remain sharply lower year over year, the bulls produced a massive gap at the open that proved to be very volatile are the coronavirus brings new China restrictions.  Here in the US, governor’s remove restrictions on restaurants and health clubs, several states reported a record number of infections yesterday.  The VIX remains elevated as the market continues to rally, creating extreme price volatility intraday to challenge even the most adept day trader skills.

Asian markets closed mixed but mostly higher as the IMF warns of an unprecedented crisis.  European markets have fluctuated this morning but currently point to modest gains across the board as US Futures once again suggest a substantial gap up open.  Stay focused on price action and remain very flexible with such high price action volatility.

Economic Calendar

Earnings Calendar

On the Hump Day earnings calendar, we have a light day with 12 companies stepping up to report quarterly reports.  Looking through the list, I only see one marginally notable report from ABM. 

Technically Speaking

Fueled by much better than expected retail sales, the already bullish futures lept higher at the open.  Though consumers returned to shopping with a vengeance raising hope of the recovery, the year over year numbers still needs a lot of improvement.   News that China is implementing another round of restrictions with a resurgence of coronavirus cane close to reversing the bullish intraday, but the bulls charged back in before the close of day.  Although the reopening of the economy has the bulls out in force, it is coming at a high cost, with several states reporting a record number of COVID-19 infections and hospitalizations yesterday.  Should this trend continue, it will make a recovery very challenging for all struggling retail business.  However, there was positive news of a treatment that, in a preliminary test, shows signs of improving the survivability of those hospitalized.

At the close yesterday, the DIA recovered and held just above its 200-day average while IWM remains challenged by this key resistance.  The SPY closed well above its 200-day, attempting to test the island reversal pattern created on the June 11^th gap down.  The QQQ remains by far the most resilient of indexes lead by the internet giants, AAPL, AMZN, MSFT, GOOG & FB.  The T2122 indicator is once again signaling a short-term extended condition with the Dow recovering more than 1400 points in just 2-days of trading.  Although the VIX has pulled back the last couple of days, it remains very elevated closing above a 33 handle as the extreme price volatility continues to keep the danger level high.  The enormous overnight reversal gaps and the rapid intraday price swings have made the market particularly dangerous for retail traders.  They are either forced to hold and pray, suffering whatever the market hands out, stand on the sidelines, or attempt day trading the extreme volatility.  Its no surprise there is another gap expected this morning, but what comes next in Coronaland is anyone’s guess.

Trade Wisely,

Doug

Fear of the rising virus hospitalizations, debit, bankruptcies, and growing tensions with China & North Korea are apparently no match for an FOMC with an unlimited checkbook.  From Monday open to Tuesday, a swing of 1000 points just in the morning gap after the Fed adds another 750 billion in direct company bond purchases.  This morning the indexes will challenge the huge June 11^th gap as the massive price volatility continues.

Asian markets roared back overnight with  Japan rising nearly 5%, and European markets reverse to bullishness with the DAX up over 3% on in reaction to the Fed spending.  Ahead of the Retail Sales numbers and the Chairman’s congressional testimony US Futures are decidedly bullish, suggesting a considerable gap in the indexes. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have just over 20 companies reporting their quarterly results.  Notable reports include LEN, ORCL, GRPN, HRB, & MFA.

Technically Speaking

With slow and steady pressure, the bulls recovered from the substantial morning gap down as the incredible price volatility continues.  Yesterday we heard the Planet Fitness declared bankruptcy, but the stock rallied during the day.   Today 24 Hour Fitness joined them in declaring bankruptcy.  United Airlines burrowed 5 billion against its frequent flyer program, and Hertz announced a new stock sale with the suggestion that investors will lose their money.  However, none of that seems to matter these days, including rising coronavirus, unemployment, and the soaring national debt.  That said, the market celebrated the news that the FOMC will add another 750 billion to buy bonds directly from companies.  The President announced a plan to spend Trillion on infrastructure and will sign an executive order on police reform later today. 

This morning ahead of the Jerome Powell’s testimony on the hill and several economic reports, we are once again expecting a 500 point gap at the open.  Yesterday, bearish, today bullish.  Count it up; that’s a 1000 point swing in just the morning gap!  Amazingly that seems to have become the new normal. Today’s gap will test the 200-day average on the DIA and IWM as resistance and move us to back up into the vast gap down created on June 11^th.  The SPY quickly recovered its 200-day average yesterday, and the QQQ rally regained the breakout high of last February with the big internet tech companies leading the way.  With the market tossing around 500 point gaps, what happens next is anyone’s guess, so prepare for another wildly volatile day.

Trade Wisely,

Doug

News that Beijing is once again instituting coronavirus isolation measures and the resurgence of hospitalizations here in the US have the bears on the prowl this morning.  As of Friday, longer-term trends and major price support areas, as well as 50-day averages, remain bullish.  However, the substantial spike in the VIX could make the days ahead very challenging for traders, and those bullish technical s could quickly turn bearish.  With the Fed step up their operations, will the Congress approve more stimulus, will it be enough to keep the economy afloat if the feared second wave of infections begins to inflate?  Tough questions to answer, making the path forward very uncertain.

 Asian markets closed lower across the board, with the NIKKEI falling nearly 3.5% overnight.  European indexes are decidedly bearish this morning as the threat of virus rebounds.  US futures point to a rather grim gap down with the Dow expected to fall more than 500 at the open.  It would appear the wild ride of 2020 is far from over, and the complexity of the recovery will be far more challenging than the recent rally would suggest. 

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have a relatively light day.  Notable reports included JKS & TTM.

Technically Speaking

The Friday’s bounce after the Thursday rout was a nice break in the selling, but the news over the weekend has the bears charging again this morning.  We learned during the night that Beijing as reinstated isolation measures in some areas, established checkpoints and closed some schools due to a resurgence of the Coronavirus.  Here in the US, even as the States try to reopen their economy’s infection rates and hospitalizations are accelerating.  Planet Fitness has filed for bankruptcy and said they would close about 1000 locations as it attempts to reorganize.  I suspect we will begin to hear of many more bankruptcies in the coming months as the full measure of business impacts is realized.  According to reports, protesters have taken over a small area of Capitol Hill in Seattle, forcing a police station to close for the safety of the officers.  The President has theathend to mobilize the national guard to restore order, but the idea does not have support by the governor. 

As bad as the Thursday sell was, the longer-term bullish trends and major price supports have so far held in the DIA, SPY, and QQQ.  They all remain above their respective 50-averages, and the QQQ thus now is merely testing the breakout as support.  Unfortunately, the spike volatility could quickly shift those bullish technicals as the uncertainty about the path ahead with the resurgence of the virus.  There are those once again predicting a market calamity, and those that believe the virus news has blown everything out of proportion, and the recovery will resume.  The fact is no one knows the futures and the best we can do as traders; avoid the prediction and stay focused on price action for our trade queues or stand aside if you fell the risk of uncertainty is too high.  Remember, there is no shame in protecting your trading capital; in fact, that is one of the primary jobs in this wild business of trading.

Trade Wisely,

Doug

Yesterday we were reminded that no matter how much the government spends in stimulus or the trillions injected by the Central Banks, traders must always respect the bears!  In this incredibly emotional feast or famine market, the daily overnight institutional overnight gaps have become very wearisome.  Unfortunitually it appears to be the new normal, and we should expect the wild volatility to continue as we head toward the uncertainty of the weekend.

Asian markets closed the week lower across the board but managed to recover a substantial amount of the early losses.  European markets are bullish across the board this morning but continue to fluctuate as the attempt to recover from another round of pandemic worries.  US Futures have also seen substantial volatility this morning but continue to point to a sizeable overnight gap up as we grapple with a resurgence of coronavirus infections and hospitalizations.  Buckle up, as it could be another wild rise as we slide into a weekend of unknowns.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have 30 companies reporting quarterly results.  Looking through the list, I can only find one particularly notable report, that being PRTY.

Technically Speaking

Yesterday we were reminded that we must never forget that the bears and always have a plan to protect our capital if they launch an attack.  For some time, there have been clues that the market was extraordinarily overextended, but if you are like me, you’ve grown weary of the overnight institutional gaps.  However, it has become the new normal in this all or nothing, feast or famine market.  Today looks to begin similarly, but this time a substantial overnight gap up.  With coronavirus cases continuing to rise, Arizona announced their hospitals are near capacity. Yesterday’s jobless claims added another 1.5 million unemployed, which is a modest improvement of the prior week but indeed demonstrated just how challenging this economic recovery has become.

Considerable technical damage occurred in the DIA and IWM yesterday as the indexes failed their 200-averages.  The Dow is now less than 850 points away from testing its 50-day morning average, and even with today’s big gap up, we should not ignore the possibility that it might see a test in the near future.  The SPY is in a much better technical situation having closed at it’s 200-average with the big tech firms providing the majority of the price support.  Of course, the QQQ is in the best technical, having only suffered a pullback to test its bullish trend.  As we slide into the weekend, expect a considerable amount of price volatility as traders and investors grapple with the uncertainty of the weekend.

Trade Wisely,

Doug

Gaping up and running ahead of the FOMC announcement, the NASDAQ set new record highs once again.  The committee suggested interest rates would remain near zero until sometime in 2022. Still, after the Chairman’s press conference, the bears made an appearance moving the index’s lower with only the QQQ closing the day with gains.  Sadly, this morning rug is pulling out with the market suddenly concerned with the rising coronavirus infections and hospitalizations around the country. 

Asian markets closed lower across the board in reaction to the FOMC forecast.  European markets are also tumbling this morning by as much as 2.50%.  US Futures are plunging this morning and have worsened in the pre-market, suggesting a substantial decline at the open with more jobless data on the way.  Expect significant price volatility.

Economic Calendar

Earnings Calendar

On the Thursday economic calendar, we have short of 30 companies stepping up the earnings reporting podium.  Notable reports include LULU, ADBE, PLCE, PLAY, & PVH.

Technically Speaking

After a choppy beginning to the week as we waited for the FOMC committee decision, it pretty much turned out to be a non-event.  The decided that interest rates would likely remain near 0 until sometime in 2022 and that they will continue appropriate operations to support the economy.  The initial market reaction was bullish, but after the Chairman’s press conference, the bears pushed back, closing the index’s modestly lower.  This morning according to reports, the market is once again suddenly concerned about the second wave of coronavirus with infection rates that have risen the last couple weeks.  There are 9- California counties reporting a spike in new coronavirus cases and hospitalizations.  Airlines and cruise lines are sharply lower this morning, and not surprisingly, some retailers also see bear activity. 

This morning US Futures point to an ugly gap down of 500 points or more in the Dow.  The big question will be the activity in the NASDAQ giants that have seen remarkable bullishness of late and supplied most of the index’s levity.  Should stocks like AAPL, AMZN, GOOG, MSFT turn lower, it could a rather harsh pullback could ensue.  However, if the bulls can continue to show their tenacity of last couple weeks, the selling could be quickly absorbed, and price support levels defended.  Hold on tight; it may be a wild morning with a considerable dose of price volatility. 

Trade Wisely,

Doug

After a late-session bullish run, the US Futures began to sell off, and the news cycle headlines shifted to something a bit more bearish.  A new record daily high in worldwide virus infections, Texas with a record number of COVID-19 hospitalizations, the US officially in recession and headlines of a cold war with China.  Things that make you say, hmmm?  Those the entered late into the run could feel a bit of pain this morning with yet another morning institutional gap.

Asian markets closed mixed but mostly higher overnight, but European markets are decidedly bearish this morning.  US Futures point to a Dow gap down around 300 points ahead of earnings and the kickoff to the 2-FOMC meeting.  Expect an extra dose of price volatility at the open.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 39 companies fessing up to quarterly results.  Notable reports include AMC, CHWY, CONN, FIVE, GME, HDS, MOV, SIG, VRNT.

Technically Speaking

Almost immediately after the market closed on Monday, the US Futures began to a selloff, and the news shifted to bearish headlines.  We learned we are officially in a recession, that Texas now has a record number of COVID-19 hospitalizations, and the world infections hit a new all-time high.  According to reports, the US and China entered an economic cold war.  China has also invoked the anger of Australia, Canada, Germany, Netherlands, and Sweden in what’s being called “Wolf Warrior diplomacy.”  Dow Futures were down about 350 points overnight, but the typical morning pump has begun lifting them well off the lows.  I suspect we will see a bit more 2-sided price action increasing the price volatility this morning.  The wild card in the mix is the beginning of the FOMC meeting and what we might learn on Wednesday about the committee’s historic buying programs.

In the last 7-market sessions, the Dow has run up nearly 2500, the SP-500 more than 225 and NASDAQ in a 9-day bull run is up a whopping 850 points.  Such an enthusiastic bulls run can sometimes lead to a painful pullback as if the carpet is pulled out from underneath, especially for those that entered trades late in the rally.  The indexes are so extended that a 50% pullback in the Dow, about 1250 points, would remain in a bullish trend.  I am in no way suggesting that will occur!  I am only pointing out the potential danger that may exist in such an extended condition.  Of course, the new normal is the institutional overnight gap that may leave many retail traders squealing from the feeling.

Trade Wisely,

Doug

Even after last week’s run that lifted the Dow more than 2000 points, the US Futures point to a gap up open led by rallies oil, airlines, and cruise lines.  Even as US cases of the virus topped 2 million, the death toll passed 110,000 and, protests keep business shuttered; the NASDAQ set new record highs with a surprise jobs number.  As there is no president for such a strong rally, what comes next is anyone’s guess.  Just stay focused on price action watching for the clues of profit-taking if a pullback begins.

Asian markets closed up across the board in reaction to rising oil prices.  European markets traded mixed this morning with worries about pandemic restrictions and protests that grew violent over the weekend.  The US markets are by far the most bullish of current world markets, pointing to a substantial gap up once again.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have a light day with just 24 companies reporting.  Notable reports include CASY & SFIX.

Technically Speaking

After last week’s remarkable rally, it would be reasonable to expect a little rest or pullback in the market considering the Dow increased by more than 2000 points.  In reaction to the better than expected jobs report, the DIA and the IWM lept well above its 200-day moving averages for the first time since February while the QQQ set new record highs.  As world economies begin to reopen Coronavirus cases top 7 million with US cases now over 2 million and a death toll of over 112,000.  The UK has implemented a  mandatory 14-day quarantine on all that travel into the area; however, British Airways is threatening lawsuits.  In reaction to the widespread protesting, the Democrats plan to propose new police procedures and accountability rules.  The majority fo the Minneapolis city council has is backing the idea of disbanding the police force entirely. 

There is no president in history for this remarkable market rally.  The T2122 indicator appears pinned against the ceiling suggesting an extreme short-term overextension.  That said, the US futures point to another gap up open with airlines and curse lines leading the way.  Oil is surging this morning after OPEC decided to extend the historic production cuts through the summer, which is also helping to boost the futures this morning.  What comes next is anyone’s guess, so stay focused on price action and be prepared for the possibility of profit-taking if the bears finally decide to make an appearance. 

Trade Wisely,

Doug

With the Employment Situation pending with an expectation one of the worst reports in history, the bulls remain relentlessly bullish.  Futures suggest yet another overnight gap after a day sluggish price action that struggled to find buyers until the last minutes of the day.  Don’t fight the bull party be have a plan when the music stops because it could bring out a wave of profit-takers at any time. The bears are nowhere to be seen, as they have been lulled to sleep with piles and piles of Central Bank spending government stimulus.

Asian markets closed the week higher across the board, and European markets are all green this morning.  Ahead of job numbers, the US Futures can see only bullishness expecting another big gap before the release. 

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just nine companies reporting today, with the only particularly notable being TIF.

Technically Speaking

What is there to say about this market except for relentless bullishness that occurs mostly in the overnight futures session.  After a day of very lethargic and slightly bearish price action, another surge in minutes of the day the Dow rose more than 80 points to close day green.  This heading into the Employment Situation report, we have yet another institutional overnight gap suggesting the Dow will open up more than 300 points. 

There is nothing left to but hold on tight and enjoy the ride and stay vigilant because it could end with the same extreme price action.  Have a wonderful weekend everyone!

Trade Wisely,

Doug

The bullish optimism was on display yesterday as the Dow surged more than 500 points to challenge its 200-day moving average, and the NASDAQ reached out to test all-time highs.  After several days of the strong rally, it is, however, not a big surprise to see the future gaping slightly lower as under the pressure of some profit-taking.  Unemployment will be the theme for the next couple days in the economic calendar, but as of late, no matter how grim the numbers, it has only served to inspire the bulls higher.  Who knows, perhaps, that trend will continue today.

Asian markets closed mixed but mostly higher overnight fueled on hopes of economic recovery.  European markets are currently trading modestly lower this morning as the ECB mulls more stimulus.  The US Futures point to a lower open but have pared overnight lows as we head toward earnings and economic reports.  As you plan, remember the Employment Situation report Friday morning.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our biggest day of quarterly reports this week, with 68 companies stepping forward.  Notable reports include DOCU, AVGO, CIEN, DXLG, DLTH, GIII, GPS, HOV, SJM, MIK, SAIC, TTC, MTN, & ZUMZ.

Technically Speaking

Hold on to your seat, everyone I know this will be a surprise, but this morning we have another market gap today!  However, rather than gaping up, we see a little profit-taking pressure after a huge bullish day where the Dow rallied more than 500 points.  That said, I would not expect the pullback to last long with both the US and the ECB talking about another round of government stimulus.  With the NASDAQ testing all-time highs, I’m not sure why they feel the need to stimulate as if debit no longer matters.  Health care workers are under pressure as cases in several southern states surge as the US death toll nears 110,000.  As protests continue across the country, the officer directly involved now faces 2^nd-degree murder charges.  Although the protests have become less violent, Las Vegas has pulled an ad campaign encouraging tourism due to the dangerous unrest. 

The four major indexes continue in robust bullish trends that I must admit were much stronger than I would have imagined given the protesting disruption that closed and damaged so many businesses across the country.  The NASDAQ challenged all-time highs yesterday just before succumbing to some end of day profit-taking.  Today, we have our biggest day of earnings reports this week, and we face another Jobless Claims number where consensus suggests more 1.5 million more Americans applied for unemployment.  The good news is the number continues to decline, but the total number of unemplyed is staggering.  Thus far, no matter how bad the employment news, the market has rallied, hoping things will be sharply better soon.  Perhaps that optimism will overcome the bearish gap down this morning after the report.  As you plan forward to remember, the Employment Situation number will be out Friday morning before the market opens and is expected to show numbers this country has not seen since the world war. 

Trade Wisely,

Doug

Bullish overnight gaps and low volume chop through the day seem to have become the new normal in the recovery.  The rest of this week, we face a significant economic data dump that is likely to reveal historically ugly numbers, but of late, that has only served to bulls to buy.  With the NASDAQ easily within striking range of new record highs, I suspect no matter the numbers; we see the tech sector breakthrough this week.   

Asian markets closed the day green across the board as optimism of reopening brings out the bulls.  European markets also advance as they keep an eye on rising US/China tensions.  Ahead of earnings and economic reports, the US Futures see nothing but green pointing to yet another gap up at the open. 

Economic Calendar

Earnings Calendar

On the Hump Day calendar, we have less than 40 companies reporting their quarterly results.  Notable reports include CPB, AEO, CNK, & GWRE.

Technically Speaking

The new norm for the market seems to be a big overnight gap and grind sideways throughout the day with choppy price action with low volume.  Today the futures are pointing to the same bullish gap up open as the bulls near new record highs in the Nasdaq.  There was widespread protesting across the nation yesterday afternoon and during the night, but thankfully the majority of the demonstrations were peaceful.  Sadly the Pentagon has moved troops into DC to protect the public and defend businesses from looting.  In California, the police have taken over Jackie Robinson Stadium to using it as a temporary field jail.  Oil price continued to rise yesterday, hitting 3-month highs on expectations OPEC plans to extend the deepest production cuts in history in response to record low demand due to COVID-19 restrictions.  Considering we still have a Presidental election to deal with and a possible resurgence of the virus this fall 2020 may continue to provide challenging price volatility and uncertainty for the foreseeable future.

The bulls are clearly in control, and the trillions of stimulus and central bank operations have sent the bears into summer hibernation.  With the NASDAQ so close to making new record highs, it would be shocked if the institutions didn’t continue to drive forward if only to get the headline to inspire investors that all is okay.  Trends of all the major indexes remain bullish, and as of now, no price action in the charts suggest that bulls are ready to stop buying.  The T2122 indicator has pegged at the top of the range, indicating an extremely extended condition as we head into a big day of economic data.  That said, it seems no matter how negative the financial numbers reflect on the economy and unemployment; it only inspires the bulls to buy, buy, buy.

Trade Wisely,

Doug