As stimulus hope fades and a coronavirus resurgence here in the U.S. and Europe, overnight futures markets point to a nasty gap down ahead of market-moving earnings and economic reports.  The swirling uncertainty continues to make price action very volatile and dangerous, likely chopping up accounts of the inexperienced. Today’s news could quickly improve or worsen this morning open, so plan your risk carefully and work to avoid emotionally charged decisions.

Asian markets slip south across the board overnight, and European markets are decidedly bearish this morning after France declares a public health emergency.  Ahead of earnings and economic data that included jobless numbers futures suggest a nasty gap and more price volatility for the traders to navigate. 

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 13 verified reports rolling out today.  Notable reports include UAL, DAL, SCHW, TACO, ISRG, MS, TFC, & WBA.

News & Technicals’

The bears made some headway yesterday, pushing the indexes lower after a report suggesting the hoped-for stimulus before election day fades.  Additional reports reviled the speaker Pelosi spoke to Munchin yesterday and plans to continue the stimulus conversation later today but noted there remains a vast divide in viewpoints.  Coronavirus is once again front and center in this morning’s news, with France declaring a public health emergency and Europe scrambling to control the reemergence with new lockdown procedures.  Here in the U.S., the infection rates are also surging again, topping more than 50,000 for the second day in a row.  Sadly the death toll is also rising, weighing the market sentiment heading into today’s open and piling on to the bad news coronavirus clinical trails are pausing over safety concerns.  As the election season politics shifts into high gear, the second presidential debate is being replaced with dueling town hall meetings.  What could go wrong with that?

All this uncertainty seems to have energized the bears this morning, with the futures pointing to a substantial gap down this morning.  However, with several notable earnings and economic reports headed our way before the open, we could easily see an improvement or a worsening of this volatile overnight swing.  Buckle up; it could be a wild ride today.

Trade Wisely,

Doug

With the indexes in a short-term overextended condition and a mixed bag of earnings results, the bears began probing for weaknesses breaking the 4-day rally.  BAC disappointed this morning, reversing early futures bullishness, but with several more potential market-moving reports this morning, we could easily flip-flop several more times before the open.  Anything is possible, and keep in mind how quickly market emotion can shift on any stimulus news.

Asian markets, in reaction the Xi’s speech, closed with mixed but modestly higher results.  European markets are chopping around the flatline this morning as virus worries weigh on investor sentiments.  US Futures seem uncertain this morning, but asf earings roll out, anything is possible, so prepare for another day of price volatility as a hopeful market awaits more government deficit spending.

Economic Calendar

Earnings Calendar

On the hump day earrings calendar, we have 12 verified reports, and several are considered market-moving.  Notable reports include AA, ASML, BAC, GS, INFY, PNC, SNBR, USB, UNH, & WFC.

News & Technicals’

With a mixed bag of earnings results yesterday and the indexes significantly extended, the bears made a half-hearted appearance breaking a 4-day winning streak.  However, after spending considerable time reviewing charts last night, I feel like I saw this kind of price action before in 1999.  Instead of wild speculation on dot.com companies, this time, there seems to be a willingness to throw money at the market, betting on government stimulus.  Let’s face it the actual economy is struggling, and with coronavirus cases rising again, the economic challenges business face this winter could be substantial.  Like in 1999, the markets could continue to zoom higher, ignoring the massive national debt, but the consequences of doing also increase the risk.  Long story short, follow the price action higher but don’t drink the kool-aid.  This wild-eyed bullishness party will eventually end, and I suspect the hangover it has the potential to produce will be very painful and destroy a lot of accounts as it did in 1999.  Stay frosty and focused.

Technically speaking, the bulls remain in substantial control of the indexes, but they are short-term overextended, and the bears are beginning to probe for weaknesses in their defenses.  BAC reported disappointing results this morning, reversing futures that at one point suggested a gap up open but now indicate a slightly bearish open.  However, many more notable reports for the market to react to before the open anything is possible.  Remain flexible and remember the market is sensitive to stimulus news and could become increasingly sensitive to virus numbers once again.

Trade Wisely,

Doug

Stimulus, what the market wants the most, continues to languish deadlocked and mired in political gamesmanship.  Toss in the kickoff of 4^th quarter earnings season, a supreme court hearing, and the uncertainty of the coming elections, and we have the makings for extreme price volatility.  Stimulus hopes pushed the indexes into a hyper-extended condition yesterday, so there will be a significant amount of pressure for companies to perform at these levels.  Stay focused as anything is possible.

Asian markets struggled overnight but finally managed modest gains after reporting rising exports.  European markets are lackluster this morning, currently showing modest losses across the board.  US Futures have rallied off overnight lows as earnings roll-out, indicating a possible gap down in the Dow while the NASDAQ points higher lead by APPL and the new iPhone anticipation.  Keep an eye on the latest reading on the GDP this morning that consensus suggests will decline.

Economic Calendar

Earnings Calendar

Today begins the kickoff of the 4^th quarter earnings season with 14 companies reporting.  Notable reports include JPM, JNJ, BLK, C, DAL, FAST, EDU, & WIT.

News and Technicals’

The bulls continued to the rally yesterday even with what they want is still mired in politics with no apparent progress.  The President is back on the campaign trail after testing negative for the virus and no longer contagious.  He has a lot of catching up to do having been ill with Biden leading significantly in the polls.  Senators will begin questioning the new supreme court nominee in a marathon session that will take up the entire day.  What that means for the progress of a stimulus bill before the election remains uncertain.  Today, Apple CEO Tim Cook will put on his best song and dance act as he unveils the iPhone’s next iteration.  There has been a discussion of a significant redesign and the introduction of 5G devices that they hope will trigger a substantial wave of upgrades by the end of the year.  Another major distraction will be the Amazon Price sales event that begins on Wednesday.

With JPM firs out of the gate with their earnings this morning, the Futures currently point toa gap down open.  However, with several more potential market-moving reports this morning and the latest reading on the GDP before the market opens, anything is possible.  Technically speaking, index charts are in a hyper-extended condition, so today’s events will be very critical to inspire the bulls to defend this massive anticipatory rally.  Expect price volitility to remain high with an extreme sensitivity to political news surrounding stimulus negotiations.  Buckle up for another wild earnings season with a presidential election tossed in for good measure.

Trade Wisely,

Doug

With bond markets closed, no earnings or economic events, the start fo the supreme court hearings, and Stimulus talks at an impasse, futures point to a flat open. That’s something we’ve not seen in quite a long time.  The bulls remain in control, but that control depends heavily on the hopes of the stimulus deal.  The President raised his offer to 1.8 Trillion, and now both sides of the aisle are unhappy with the proposal.  Traders should prepare for significant news-driven volatility amidst a week of substantial distractions.

Asian markets closed the day mixed with the HIS leaping higher by 2.2%.  European markets hold modest gains across the board this morning while U.S. Futures remain flat and choppy with the bond markets closed for Columbus Day.

Economic Calendar

Earnings Calendar

We have no confirmed earnings reports on this Columbus day Monday.

News & Technicals’

The President has upped his offer for Stimulus to 1.8 Trillion and now has opposition on both sides of the aisle.  The D’s say it’s not enough, and the R’s are upset because the cost is much higher than they are willing to pass.  With the beginning of the Amy Coney Barrett’s supreme court confirmation hearings, I suspect the distraction will take the focus off getting a stimulus bill completed.  Although the markets are open today, the bond markets are closed today due to Columbus Day’s banking holiday.  We will have a few more distractions this week with the Tuesday launch event of this year’s iPhone lineup.  A Morgan Stanley analyst wrote this fall’s launch would be the most significant iPhone event in years.  We will also have a massive focus on online shopping events with Amazon’s Prime 2-day sales event may other online competitors tagging along with sales events of their own. 

Last week was all about the bulls pushing the markets up in hopes of more Stimulus.  That created tremendous price volatility as the Congress and the President waged a political battle making headlines that would swing market emotions violently.  Unfortunately, with no progress over the weekend and Speaker Pelosi quoted saying that talks “remain at an Impasse,” we should plan for the market emotion to continue spilling out with the news cycle out of D.C.  With banks closed today, and the beginning of the supreme court hearings, it would not be a surprise to see a day of algo-driven choppiness.  Futures suggest a flat open with nothing on the earnings or economic calendar to inspire the bulls or the bears; we could have the quietest market open in weeks. 

Trade Wisley,

Doug

***Notice due to a Windows Update I’m currently unable to record the Morning Prep Video.  I will work on the problem but if I can get it fixed the video will be late.  Sorry for the inconvenience. 

Speculation that elected officials will eventually get their act together and agree on a stimulus package continues to elevate the indexes pointing to another gap up open.  Pelosi and Munchin continue to talk, but it’s unclear if the President will reverse his thinking and support a big package deal.  One thing for sure is that this creates a dangerously volatile market condition that’s more akin to gambling as traders bet on the possible outcome.  Consider your risk carefully as we head into a weekend with incredible uncertainty as to what happens next.

Asian markets wrapped up their week with mixed but mostly lower results by the close.  European markets are also cautiously mixed as they monitor US stimulus efforts.  However, US Futures point to another gap up open as hope of a deal continues to inspire bullish speculation despite the dangerous consequences of news-driven extreme volatility.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have no confirmed reports; thus, there are no notable reports.

News and Technicals’

Markets held up yesterday after Speaker Pelosi made it clear there will be no stimulus bull that does not include a broader response, including aid for cities and states.  However, Munchin and Pelosi spoke on Thursday to resume negotiations, but at this time, it’s unclear if the White House will accept a broader proposal.  With the upcoming Supreme Court appointment hearings, there is little time to hammer out a deal before the election. Still, the market itself is holding on to hope, and lifting the indexes higher speculation an agreement is forthcoming, setting the stage for incredible volatility and sensitivity to the Washington spin cycle.  Betting a deal will come together could prove profitable but could prove very painful should they fail, and traders wake up to gap down overnight reversal.  Consider your risk carefully heading into the uncertainty of the weekend. 

Technically speaking, the index charts are bullish as they work to break recent price resistance levels.  That said, volatility remains very high, making the path forward quite dangerous as we wait on politicians to get their act together.  A big ask this close to a presidential election.  Anything it possible, and trading in this environment is more than gambling.  If you do trade, measure the risks carefully, avoid overtrading, and be willing to pivot on a moment’s notice.

Trade Wisely,

Doug

Stimulus hopes once again fueled the bulls to surge right back into price resistance levels after the President stated he would support $1200 direct payments to taxpayers and another 25 billion for airlines.  However, it’s unclear at this time if Congress can come to an agreement before the election.  Should they fail, it could quickly produce another whipsaw down, so plan your risk carefully because price support levels are now quite a long way away.

Asian markets closed mixed but mostly lower overnight.  However, European markets show some relief trading green across the board as they monitor US stimulus hopes.  Ahead of the latest reading on Jobless Claims, US Futures look to extend yesterday’s significant reversal pointing to another gap up open with $1200 stimulus checks hopes dangling before them.

Economic Calendar

Earnings Calendar

We have our biggest day of earnings this week, but still, only 9 confirmed quarterly reports.  Notable reports include AYI, CCL, DPZ, & HELE.

News & Technicals’

With the hopefulness of more stimulus, the market surged back into price resistance, pushing the T2122 indicator back into a possible overbought condition.  The President stated he is willing to sign a stand-alone bill that would send $1200 check to taxpayers and will support a 25 billion package for airlines.  As of now, it’s unclear if or when Congress will proceed with the requested spending bills, but the anticipation has the bulls running.  Regeneron has asked for emergency approval for the coronavirus treatment taken by the President.  In a statement, the President said he intends to make the virus vaccine free to US Citizens and, in the same breath, blamed China for the pandemic.

Closing at or near price resistance levels yesterday, the US Futures look to extend that rally this morning, pointing to yet another gap up open. Yesterday’s rally significantly improved the technical picture in the index charts with the SPY and QQQ recovering their 50-averages as support.  That said, the huge reversal also adds significant risk for those chasing the rally with price support so far away.  The market has proven its sensitivity to the news report on the subject of the stimulus.  Stay focused, and remember we are only one tweet or one news story away from another possible whipsaw back down.  Plan your risk carefully!  The stimulus is not a done deal and there is concern that Congress may not agree before the election.  The market will be focused on the Jobless numbers calendar this morning and could change how the market opens this Thursday so, prepare for more volatility.

Trade Wisley,

Doug

It’s off, no, it’s back on!  Yesterday’s nasty whipsaw demonstrated just how sensitive, emotionally charged, and dangerous the Presidential election’s path forward has become.  I want to say I believe the worst is behind us, but I don’t think that’s right, and traders could be caught in the crossfire.  With so much wild volatility, it is nearly impossible for swing traders to maintain an edge, and sadly that may be the case through the election.  The path forward is clouded in uncertainty, so plan your risk carefully or choose to stand aside until the clouds lift.

Asian markets closed mixed but mostly lower overnight in reaction to US Stimulus news.  European markets trade in the red across the board this morning as stimulus fears weigh on the investors.  Ahead of a big day of Fed speak, and the FOMC minutes, US Futures once again point to a significant gap in hopes that at some stimulus may still be on the horizon.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have just seven verified quarterly reports.  Notable reports include LW, RPM, & SAR.

News & Technicals’

Yesterday I titled the blog “Silly Season” but had no idea just how correct that sentiment would become.  As I’m sure you all know, the President pulled out of stimulus negations suggesting the other side was not working in good faith.  However, this morning, the President asks Congress to move forward on a bailout deal for airlines and direct $1200 payments to the citizens removing money for what he calls mismanaged states.  Nonetheless, the action created a nasty whipsaw yesterday with the market having already priced in a stimulus deal.  I wish I could be confident the market turmoil and uncertainty is over. Sadly, I think there is a genuine possibility the political uncertainty and market sensitivity to the news cycle will continue through the election.  After the bell yesterday, House Democrats accused Facebook, Amazon, Apple & Alphabet of having monopoly power, recommending significant changes and challenges could be on the way for the tech giants.  With these companies holding huge index weight, market growth may become problematic if the political pressure grows.

As a result of yesterday’s whipsaw, the SPY and QQQ closed back below their 50-day moving averages.  However, with the hope of some stimulus still on the horizon, US Futures are poised for a bullish open that could recover these critical psychological levels today.  That said, be prepaid for move wild price volatility ahead.  We still have price resistance above in the index charts to deal with and a path forward fraught with high volatility danger as the political silly season come into full bloom.

Trade Wisely,

Doug

With the election silly season in its final stretch and the President back at work, expect the political spin and uncertainty of what happens next to keep the price action volatile and the overall market on edge.  The CDC is warning that the virus can spread through airborne transmission and infect others more than six feet away.  Joe Biden is calling for the President to institute a national mask mandate.  A tweetstorm is surly to soon follow on the subject. 

Asian markets closed mixed but mostly higher as Australia’s central bank held steady on their interest rate policy.  European markets are trading with modest gains across the board as the US futures point to flat open ahead of economic data and a speech from Jerome Powell.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have just three confirmed earnings reports.  Notable reports include PAYX & LEVI.

News and Technicals’

The President is back in the White House medical unit while still recovering and is already receiving negative feedback for returning to work while still infected.  Joe Biden says the President bears responsibility for Covid-19 infection and calls for a national mask requirement.  With just four weeks until the election, I suspect both candidates will raise the bar on politicalizing the pandemic.  The CDC has now acknowledged that the virus spread through airborne transmission that infected others more than 6′ feet from one another.  Google has rebranded its office tools as Workspace as it goes head to head with Microsoft Office working to gain market share as more and more people are working from home.  A trend I suspect will continue over the coming years.  According to reports, teen spending has dropped to a two-decade low as the pandemic pressures have affected their parents and dramatically cut service jobs that teens often hold. 

After a surge of buying pressure yesterday, indexes reached out to test price resistance levels in the indexes pushing the T2122 indicator into a short-term overbought condition.  IWM experienced the most significant technical improvement on the day with oil and financial sector stocks bouncing up from recent lows.  Futures struggled around that flatline most of the evening and continue to this morning, although they well off their overnight lows.  After partying hard yesterday, it’s possible, the bulls need a little rest, but let’s hope the bears are not fortified in the price resistance above ready to attack.  With a light day on the earnings calendar, economic reports, Jerome Powell’s speech, and the stimulus news spin will likely keep the pice volatility high.

Trade Wisely,

Doug

After a choppy news-driven choppy week of price action, last week with an ugly GDP, layoffs, and slower than expected job recovery, the bulls did a good job or defending price support.  Most notable last Friday was the bounce in the financial and energy sector, giving the IWM the power required to break above its 50-day average.  However, with the uncertainty of the presidential election and still no deal on a 5^th stimulus package, it may be too early to sound the all-clear just yet.  Expect price volatility to remain considerably choppy.

Asian markets closed mixed but mostly higher overnight, reacting to a bounce in oil prices.  European markets are higher this morning across the board, and the US Futures point to a substantial gap up at the open as the market tracks the president’s health.  With a light economic and earnings calendar, price action may be particularly sensitive to the news cycle, so remain focused and flexible.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have just one unconfirmed possible earnings report today PRED. It’s a penny stock company and not notable as market-moving.

Trade Wisely,

Doug

Unable to agree on a stimulus deal, the futures were already pointing to a bearish open.  The news that the President and the First Lady tested positive for COVID-19 added another layer of uncertainty for the path forward.  Will the bull show the strength to defend the 50-day moving averages on the DIA, SPY, and QQQ or will the bear regain control of market direction?  As we slide into the weekend, there seem to be more questions than answers for traders to grapple with, suggesting a volatile day of price action awaits.

Asian markets in a choppy session closed mixed but mostly lower overnight.  European markets are lower across the board, with the DAX down 1% in reaction to the uncertainty ahead.  Ahead of the Employment Situation number, US Futures point to a nasty gap down of more than 300 Dow points.  With the path forward clouded in uncertainty, weigh your risk carefully as head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have eight companies on the list, but apparently, all of them are unconfirmed.  Consequently, we have no notable reports today.

News & Technicals’

A choppy Thursday market session as we waited to hear deal or no deal on a fifth stimulus package.  Failing to come to an agreement, the House moved forward, passing their 2.2 Trillion plan that has little to chance of getting past the Senate.  According to reports, the two sides will continue to talk, but with congress about to recess, hopes that a deal has diminished.  US Futures slipped into the red during the evening as a result.  Then we heard the news the President and the First Lady tested positive for Covid-19, and futures quickly plunged 500 points.  They have recovered from early morning lows, but the uncertainty about what comes next has the market facing a nasty gap down this morning.

Having recovered their 50-day averages, it will now be a critical test for the bulls to defend the level as support.  A fall back below this crucial psychological level will damage the index chart technicals and could threaten the overall market confidence.  Today we get a reading on the Employment Situation numbers before the bell, so get ready for a volatile morning of price action and carefully consider your risk as we head into an uncertain weekend.

Trade Wisely,

Doug