As violent price gyrations continue, so does the extreme danger for retail traders.  Although we have had several big one day rallies, we have yet to see the bulls able to follow-through the next day.  Instead was we see is overnight reversal ripping the heart out of traders that tried to hold positions just one more day.  This morning is a repeating that pattern once again with US Futures limit down wiping out most if not all of yesterday’s hopefulness. 

Asian markets seesawed back and forth overnight, finally closing the day lower across the board.  European markets are sharply lower this morning with the DAX, FTSE, & CAC, all showing losses fo more than 5%.  Ahead of a Housing Starts number and 60 earings report Dow futures to point to an overnight reversal of more than 800 points, and fear and uncertainty continue to drive extreme price volatility.  Prepare for another wild day.

Economic Calendar

Earnings Calendar

On the hump day earings calendar, we have about 60 companies reporting results.  Notable reports include GIS, FIVE, GES, HABT, TLRD, TCOM, & WSM.

Top Stories

Biden swept three primary elections last night as he doubles the delegate lead over Sanders can drawing closer to clinching the Democratic nomination.  President Trump has now won enough delegates to lead the Republican party in the 2020 election. 

After a day of rally closing the Dow up more than 1000 points, futures now point to an overnight reversal wiping out the gains waiting on yet another government bailout proposal to be passed.  Munchin reportedly warns senators the impacts of the virus could lead to a 20% US unemployment rate as a business shutdown responding to CDC recommendations.

The Vegas strip is quiet for the first time since the Kennedy assassination as all gaming in the state was ordered to shut down.  Kansas schools have closed public schools for the rest of the year!  The first such state to make such a drastic decision. 

Technically Speaking

Yesterday’s relief rally was a nice change to the extreme selling pressure, but sadly it looks as if a second day of follow-through is too much to ask for amid such wild volatility.  After another wild night of price, action futures reached another limit down trading halt.  The QQQ rally moved up to test the resistance of its 500-day average, but sadly the overnight reversal will wipe out almost all of yesterday’s hopeful gains at the open.

With the VIX closing, the day above a 75 handle, and a likely sharp move higher this morning options, prices will remain very dangerous and virtually untradeable.  While there are some tempting values in stock prices, the volatility requires a tremendous tolerance for risk that few retail traders are willing to ride out.  The best course of action for most is to continue to remain disciplined to your trading plan and protect your capital while market prices continue to gyrate violently. 

Trade Wisely,

Doug

It would appear attempting to buy our way out of this current crisis is not going to work after the massive move of the FOMC did little to dissuade the bears in the face of such uncertainty.  I would like to assume the worst is over, but with the US just now beginning the process of a shutdown, the path forward is more uncertain than ever.  Long and short trader getting involved in this will volatility with have to have considerable tolerance for risk with the VIX now above the 2008 high.  It would seem the best course of action for most retail traders is to remain on the sidelines protecting their capital until we begin to see some improvement.

Asian markets closed mixed with Australia surging nearly 6% overnight.  Unfortunately, European markets are still feeling some selling pressure this morning as they are modestly lower across the board.  After a wild night of volatility in the futures markets, point to a little bullishness at the open.  With a big day of earnings, economic data, and uncertainty, anything remains possible.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 60 companies reporting quarterly results.  Notable reports include FDX, FLR, HDS, LE, & MIK.

Top Stories

With more than 4200 confirmed cases and over 70 deaths, the CDC has recommended restricting gatherings to less than ten people in an attempt to slow the spread.  Many states have now recommended closing bars, restaurants, night clubs, fitness facilities, and schools until further notice.  Small business impacts are tremendous.

The Feds surprise rate cut and massive cash injection increased the fear of the unknown lifting the VIX-X above the 2008 highs and creating the worst one-day selloff since 1987.  All 11 sectors of the S&P were down on the day, but there were some bright spots amongst the carnage, such as KR and CLX.

Airlines have already asked the government for a 50 billion dollar bailout, and I’m guessing there will be many more industries to follow as the impacts on business grows.  The virus is now impacting the Presidential election, with Ohio closing its primary polls.

Overnight futures came close to a limit up rally, but during the night gave back most of the move in another display of incredibly dangerous price volatility.

Technically Speaking

When looking at the charts, there is very little to see but tremendous technical damage.  One would hope that yesterday was the final capitulation, but with much of the country right at the beginning of its shutdown, the path forward seems more uncertain than ever.  With such incredible price volatility, stock traders attempting to pick up the deeply discounted stocks will have a substantial tolerance to risk and willing to hold through the huge overnight reversal and steep intra-day swings.  With implied volatility so high option traders face incredibly inflated contract prices, as well as punishing bid/, ask spreads making it extremely dangerous to trade.  Until there is some improvement, it is hazardous to consider being long or short.  Staying in cash on the sidelines, protecting your capital continues to be the most reasonable course of action the majority of traders consider. 

Trade Wisely,

Doug

From record market highs to bailout conditions in less than a month!  Oh, how the tables have turned by a microscopic virus wreaking havoc around the world.  A punishing day that saw heaving selling in every sector of the market, and a barrage of bad news that points massive economic impacts in the weeks and months to come.  With so much uncertainty facing the market, anything is possible, and it seems government money can’t buy back investor confidence facing a pandemic.

Asian markets finished the week in the red, with Japan closing more than 6% lower on the day.  European markets are in bounce mode this morning, rallying more than 5%.  After a very turbulent night, US Future now points to a Dow gap up of more than 1000 points as this will price action rollercoaster ride heads into the uncertainty of the weekend.  Plan your risk carefully because anythings possible by Monday morning!

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just short of 70 companies reporting quarterly results.  Notable reports include BKE & GOGO.

Top Stories

Another rough market day triggering circuit breakers with the Dow suffering the worst one day plunge since 1987 even as the Fed stepped up with half a trillion dollars.  A barrage of virus news with professional sporting teams suspending seasons and large venue closures in an attempt to control the virus spread.

Although its Friday the 13^th, there is a favorable breeze blowing in the pre-market after a wild night of price volatility in the futures markets.  Japan sold off sharply last night, dropping as much as 10% at one point, pushing Dow futures down as much at 700 points.  However, the bulls have come roaring back with a substantial gap up in prices at the open today.  Cross your fingers that it can hold heading into a weekend that’s not likely to provide better news on the virus front.

Technically Speaking

Index charts, as well as most stock charts, are in an ugly technical condition.  The Dow dropped like a hot knife through butter closing well below the 2018 low nearly 19% below its 500-day average.  The SP-500 finished the day just short of 14% below its 500-day with the Nasdaq composite 8.5% below.  The failure in the Russel is epic, closing more than 28% below its 500-day average.  What happens next is anyone’s guess, as the economic impacts of the outbreak continue to compound.  Some analysts are suggesting the market could lose half of its value by the time this is over, and the full measure of damages totaled.  Congress is working on some kind of relief package, but according to reports, it will be next week before a vote occurs.  The silver lining to all of this is that great stocks are reaching bargain prices for those willing to hold through what is likely going a very turbulent market for weeks or even months to come.  As we head into an uncertain weekend, plan your risk carefully because anything is possible by Monday morning.

Trade Wisely,

Doug

With the longest bull run in market history officially over and unprecedented travel restrictions going into place, investors continue to run for the doors.  As the markets continue to tumble, expect more forced selling as mutual fund, 401K redemption’s and margin calls grow.  We are in uncharted waters as the now official pandemic personal, business, and economic impacts create an uncertain path forward.  Protect your capital!

Asian markets closed lower across the board as Japan falls into bear a bear market.  European markets just one day after a central bank rate cut sees losses of more than 5% this morning.  Ahead of a huge day of earnings and economic reports, the US Futures have to trigger their second circuit breaker in a week.  Halting trading but pointing to a morning gap down of more than 1200 points.  Hold on tight; this will be a bumpy ride today!

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our biggest day this week, with more than 250 companies reporting.  Notable reports include DG, AVGO, WORK, ADBE, CRON, GPS, JBL, ORCL, TLYS, TUP, ULTA, & ZUMZ.

Top Stories

Yesterday the WHO declared a global pandemic as the virus continues to spread around the world.  The White House bans travel from most European countries for 30 days in an attempt a slow the spread of the virus. 

The NBA suspends the season, and March Madness will happen with no spectators allowed.

The longest bull run in market history is now officially over as US markets slump into bear market territory and continuing to slide south.

Technically

What’s there to say other than the charts are a mess and continue to worsen as virus panic grips the market.  Although it seemed nearly implausible just a few days ago that the market would test the 2018 lows this morning that looks very likely with the Dow pointing to more than 1000 points lower at the open.  While the virus situation could get much worse, there is a silver lining if we can get past the emotion of the selloff.  Eventually, this will be over, and great stocks will be at bargain-basement prices.  The massive price volatility is currently very dangerous, but given time it will get better, so protect your capital and be patient.

Trade Wisely,

Doug

After an excellent one day rally, it seems the bears have come back this morning to punish anyone that held long positions overnight with the US futures another substantial overnight reversal.  With the central bank’s actions ineffective and federal government stimulus likely months away, the path forward for the market is clouded with uncertainty.  With US infections jumping to more than 1000, its evident this outbreak will get much worse before it gets better, so expect the wild market volatility to continue.

Asian markets close red across the board overnight, but European markets see only green this morning after the bank of England cut rates by 25 basis points.  Ahead of the CPI report and more than 100 earnings reports Dow futures to point to substantial gap down wiping out about half of yesterday rally in one fell swoop.  Prepare for another wild day of price volatility!

Economic Calendar

On the Hump day earnings calendar, we have nearly 120 companies reporting results.  Notable results include TACO, EXPR, HABT, LK, UNFI, VRA, & ZAGG.

Top Stories

Joe Biden takes a commanding lead in the Democratic race for the President wining in 4 more states last evening.

Italy’s infection number cross over 10,000 as the country mulls the idea of a full country shutdown.  According to the CDC, the US confirmed infections jump over 1000, with the virus spreading to 30 states.  The President pitched an idea of cutting payroll taxes to 0% for the rest of the year but didn’t hold your breath because stimulus packages commonly take more than 6-months. 

Technically Speaking

The rally yesterday was great to get a little relief in the selling.  Unfortunately, there is a lot of work to do before there we will see a significant improvement to the massive technical damage suffered by stocks and indexes.  With the coronavirus numbers growing, federal stimulus actions having little to no effect, and health officials struggling to slow the spread of the outbreak, investors remain very uncertain about the path forward.  This morning we face another overnight reversal with the Dow pointing to gap down of more than 500 points as this frustrating volatility continues to challenge even the most experienced traders.  Sadly, it seems this problem is far from over, and traders should prepare for another day of wild price action.

Trade Wisely,

Doug

There is blood in the street this morning with the virus news not getting any better and plunge in oil prices that’s shaking up currency markets around the world.  During the night, US futures trading halted as the 5% circuit breaker tripped.  Suffice it to say we face a very rough day in the markets with a huge gap down and the real possibility that more circuit breakers could trip during the day as investors run for the doors.  Expect extreme price volatility and hazardous market condition in the days ahead.

Asian markets plunged during the night, with Japan falling over 5% by the close.  European markets are sharply lower this morning with the DAX, FTSE, and CAC all down by more than 6%.  US Futures point to a gap of more than 1200 points down as the market grapples with plunging oil prices, currency fluctuations, and an outbreak continuing to spread uncertainty of economic impacts.  Expect a very rough day!

Economic Calendar

We have a very light day on the economic calendar with a 3 & 6-month bond auction as well as the TD Ameritrade IMX report at 12:30 PM eastern time.

Earnings Calendar

Monday begins with just short of 100 companies fessing up to quarterly results.  Notable reports include CASY, SOHU, SFIX, & MTN.

Top Stories

With OPEC failing to cut a deal with Russia, they have decided to dump a glut of oil onto the market, driving the prices sharply lower, punishing Russia for not joining their attempt at price controls.  At the opening of the futures market on Sunday evening, oil price plunged, pulling the overall market down as it fell.  The plunge in oil prices is also creating substantial currency fluctuations putting central banks between a rock and a hard place.  Cut rates to stimulate the economy or raise rates to support currency valuation.  What a tangled web this has suddenly become.  Even the cryptocurrencies are feeling the pain with $26 billion wiped away in the last 24 hours.

With the futures pointing to massive losses during the night, a 5% down circuit breaker tripped halting futures trading to prevent them from falling further.  If the selling resumes during the day, we could trigger more circuit breaker trading halts as investors run for the doors.  A drop of 7% in the SP-500 halts trading for 15 minutes, a decline of 13% will once again stop trading for 15 minutes.  A decline of 20% will stop trading for the rest of the day.

When it comes to the outbreak news, the spread continues around the world, and here in the United States as the governor of New York said, it’s like trying to stop air.  Long story short, it will likely get worse in the days and weeks ahead, and the uncertainty of the economic impacts will continue to worry investors and make the price very volatile and trading very dangerous in the near term.

Technically

The charts are simply a mess due to the very high emotion and uncertainty the market faces.  If circuit breakers begin to trigger the panic could much worse.  You can just imagine the phones ringing off the hook at mutual funds, 401K plans, and brokerage firms as investors pull the plug to stop the pain.  With the market gaping the DIA and SPY below their 500-day averages and the QQQ open below its 200-day where this panic selling end is anyone’s guess.  Hold on tight this could be a very wild week.

Trade Wisely,

Doug

The market hates uncertainty, and holy cow do we have a basket full of the unknown with a spreading outbreak heading into a weekend.  After giving up the Wednesday rally, markets around the world are selling off this morning as worries of the mounting economic impacts continue to grow.  To say the price action volatility is challenging is a gross understatement of the danger this market presents.  Unless the wave bad virus news suddenly shifts this weekend, we should plan for more wild and unpredictable price swings next week.

Asian markets closed the week in the red across the board.  European markets are down more than 3% this morning as traders run for the door leading into the weekend.  Ahead of expected bullish Employment Report, US Futures point to dismal gap down of more than 600 points as worries virus economic impacts continue to inspire the bears. 

On the Calendar

Earnings Calendar

On the Friday earings calendar, we have our lightest day this week with just 29 companies reporting.  Looking through the list, I see particularly notable reports.

Top Stories

As the virus fears continue to grow the 10-year Treasury yield, hit a new record low of 0.7% as investors run to safety.  On the bright side and 30-year mortgage rates dip to 3.3% that may help home sales and inspire a round of refinancing to keep banks busy.

On the Virus front, South Korea infections have grown to 6600.  In Iran, there were more than 1000 new infections, and their death toll has risen to 124.  Australia shut down its first school the Netherlands confirms its first death, Vatican City reported its first case of the virus as confirmed infections in Italy rise above 3000.  China invokes ‘force majeure,’ a provision that exempts business form contractual obligations.  According to reports, the government has issued nearly 5000 such certificates as of March 3 due to the epidemic. 

As oil demand continues to drop, OPEC is trying to get approval for the most significant oil supply cut since the 2008 banking crisis.  Russia, to this point, has not endorsed the proposal. 

Technically Speaking

The DIA managed to hold on to its 500- day average at the close yesterday, but the SPY once again failed to hold on to its 200-day.  After yesterday’s overnight reversal, Wednesday’s big rally was wiped out as the spreading virus continues to worry investors.  Now the concern is, will the indexes retest last week’s lows, and if so, will the lows hold as support?  Only time will tell, but one thing for sure is that is is a hazardous market condition as it tries to come to grips with such uncertainty.

Action Plan

As we head into an uncertain weekend, US Futures point to another huge gap down as the extreme volatility makes it very challenging and dangerous to trade.  Although analysts expect to get a good jobs number this morning virus fears are likely to rule the day.  As confirmed cases grow around the world, fear of what comes next here is the US will likely get much worse before it gets better.  No matter your level of trading experience, it will be tough to protect your capital if you choose to hold positions into the weekend.  With that in mind, we should not be surprised to see another rough day of selling as traders go into weekend protection mode.  With the bad news on the virus continuing to increase next week could easily be more of the same with very volatile price action.  Remember, cash is a position, and protecting your capital during times like this may prove the very best decision you can make amidst all this uncertainty.

Trade Wisely,

Doug

The Biden win on Super Tuesday, the IMF approving $50 Billion and the House passing $8.3 in virus spending brought out the bulls yesterday with the healthcare sector leading the way.  Although the Dow surged more than 1100 points this morning the Dow futures suggest a good portion of the move will be taken back in an overnight gap down.  Such is the nature of a market that’s facing so much uncertainty.  While I would like to think the volatility will soon get better I have to remember we are just at the very beginning of the outbreak here in the US.  I suspect the wild price gyrations will continue to make for very challenging trading for the near future.

Asian markets rallied sharply overnight in reaction to Wall Streets’ big move and the IMF $50 billion in virus relief.  Unfortunately, European markets are decidedly bearish this morning and the US Futures point to a disappointing overnight reversal gap punishing those that bought up stocks yesterday hoping the relief rally was underway.  Expect the extreme volatility to continue as we move toward the uncertainty of the weekend.

On the Calendar

Earnings Calendar

No the Thursday earnings calendar we have our biggest day this week with 230 companies reporting results.  Notable reports include COST, ADT, AOBC, BJ, BURL, CHUY, HRB, KTB, KR, FIZZ, PLUG & TTC.

Top Stories

A huge surge of bullishness led by the healthcare sector after the more moderate Joe Biden became the leading candidate for the democratic party.  The buying accelerated throughout the afternoon session with hopeful traders looking for a relief rally.

The US House passes and 8.3 billion dollar emergency spending plan to battle the coronavirus and the IMF puts up more than 50 billion in aid to help defray the massive health care costs of the fast-spreading virus.  

Airlines continue to cancel 1000’s of flights due to lack of demand parking unneeded aircraft.  The industry now projects losses that could reach 113 billion.  Italy may suspend budget rules to pass a 5.6 billion dollar virus package after yesterday ordering all schools closed for 2-weeks.  Iran has now set up checkpoints between cities and closed all schools and universities trying to curb the spread of the very contagious virus.  Last night China reported an increased relapse rate with patients getting the virus once again. 

Technically Speaking

Yesterday’s rally pushed the Dow up to test its 200-day average and a significant price resistance level. The SPY once again broke back above its 200-day average while the technically strong QQQ lifted back up toward its 50-day.  The beleaguered IWM rallied but remained substantially below its 200- day average.  With so much price volatility its hard to make heads or tails of any technicals on daily charts.  Expect the wild price action to continue as the uncertainty here in the US continues to grow.

Acton Plan

Although risking sounding like a broken record, traders should be very careful in this very volatile price action environment.  Overnight price action swings are very dangerous for anyone other than day-traders.  Just a day after the Dow surged more than 1100 points the Dow futures suggest a huge reversal this morning gapping substantially lower.  As we head into the uncertainty of the weekend anything is possible.  With our biggest day of earings this week, several potential market-moving economic reports and the likelihood of disturbing virus news trader should continue to expect extreme volatility.  While this sell-off was traumatic I’m not sure we have reached a point of capitulation.  With the outbreak in the US just in the beginning stages we should not rule out the possibility of a retest of recent lows or perhaps even deeper losses in the near future.  Plan your risk carefully.

Trade Wisely,

Doug

After cutting the interest rate by 50 basis points the market appeared to have a bit of a temper tantrum showing its disappointment with the Dow closing down nearly 800 points on the day.  The president also expressed disappointment calling for a much deeper cut.  However, after the big win of Joe Biden on Super Tuesday this very emotional market is in rally mode even though this sets up a party battle for remaining delegates that could go all the way to the convention.  We should expect another wild news-driven day as virus news continues to cloud the path forward with tremendous uncertainty.

During the night Asian markets closed mixed and nearly flat as auto sale and service sector numbers plummet as a result of the outbreak.  European markets have recovered early losses and are green across the board while here in the US the futures market points to a huge gap up as this wildly emotional market flop’s all over the place.  Traders should plan for the extreme price volatility to continue as we once again approach another uncertain weekend.

The Economic Calendar

The Earnings Calendar

On the hump day earnings calendar we have about 130 companies reporting results.  Notable reports include ZM, ANF, AEO, CPB, DLTR, GWRE, MRVL, OMI, SPLK, & PLCE.

Top Stories

During the night China reported that vehicle sales dropped 80% and the service sector is down 70% as impacts from the outbreak begin to roll out.

After cutting the rates by 50 basis points the market shot up nearly 700 points in just 7 minutes but in a very volatile session ended the day down with the Dow losing 800 points.

Joe Biden pulled off a huge victory last on Super Tuesday pulling ahead in the delegate count but with wins in California and Colorado Bernie Sanders has enough delegates to set up a party battle into the convention.  It’s going to be a wild election year but it would seem the market is happy that Biden has emerged as the front runner with US Futures pointing to a substantial opening gap.

Technical Speaking

Yesterday’s wild price action volatility moved prices so fast you might have felt a bit seasick just watching the swings.  At the end of this wild ride the Dow had once again failed its 200-day average and the IWM closed back down near its 500-day average.  The QQQ fell back below the 50-day average while the SPY edged down toward its 200-day.  Dark cloud cover candle patterns were left behind on all the indexes but with such extreme volatility I’m not sure that means all that much.  As the US cases of the virus continue to grow we should also see the high volatility continue with so much uncertainty ahead.  As of now US Futures point to a huge gap up seemingly reacting to last night’s election results but keep in mind as news of the virus spread continues to roll anything is possible in the days and weeks ahead.  Hold on tight this rollercoaster ride may have just begun.

Trade Wisely,

Doug

Yesterday we experienced a record-breaking bounce on hopes of a big central bank intervention.  While it was wonderful to get a relief rally in the selling this all or nothing market price action remains very dangerous due to the extreme volatility.  The market loves freshly printed money and lower interest rates but one has to wonder how effective such a move will be against a virus outbreak.  Plan your risk carefully and be prepared for very fast price action and news-driven reversals.  This is not a market for the faint of heart or those without sizable tolerance to risk.  Plan carefully!

Asian markets closed mixed overnight as the RBA cuts the cash rate to new record lows.  European markets are decidedly green this morning on huge stimulus hopes and US Futures point to an extension of yesterdays rally at the open.  It would be wise to note significant price resistance levels are still above in the major indexes.  Chasing this wild rally could prove dangerous considering the wild volatility.

Economic Calendar

Earnings Calendar

On the Tuesday calendar we have 90 companies reporting with a heavy concentration of retail reports today.  Notable reports include TGT, AVAV, AZO, HPE, IGT, KSS, JWN, ROST, URBN, & VEEV.

Market New Highlights

Yesterday the Dow bounced nearly 1300 setting a record for the largest one day gain in history on hopes of central bank intervention.  Overnight Australia cut interest rates to 25 basis points and President Trump has already chimed in urging the Fed to follow suit with a big rate cut. 

Polls are open for Super Tuesday with Burnie Sanders currently leading in delegates but Joe Biden seems to be gaining some traction getting the endorsement of several former candidates that have now dropped out of the race.  The outcome of Super Tuesday could have a market effect in the coming days.

On the virus front the confirmed cases in the US is now over 100 as the fast-spreading illness is now in 10 states.  Fearful consumers, expecting the worst, cleared shelves of long shelf life food products, vitamins & sanitizers with the Governor of Washington suggesting avoidance of public gatherings.  South Korean infections continue to accelerate as more and more countries report newly discovered cases.

The Technical s

The incredibly wild price volatility continues to plague price action making it very challenging and very dangerous except for very experienced traders with a substantial tolerance to risk.  Even with the big move yesterday the Dow remains more than points below its 200-day average and significant level of price resistance at 27,300.  The SP-500 rallied above its 200-day and the QQQ used the 200 as a launchpad but remained below its 50-day average resistance.  Overnight futures were once again very volatile and continue to bounce around significantly this morning.

Action Plan

Traders unable to deal with the extreme price volatility should protect their capital and watch the show from the sidelines.  We are in a day-traders market and we should prepare for news-driven intra-day reversal and large overnight gaps.  Although the market is betting on a huge central bank bailout one has to wonder how effective that will be against a long-term virus threat.  Only time will tell but one thing for sure the fear of this outbreak may be along way from calming down as the spread continues.

Trade Wisely

Doug