Tech Sector Bounce

August 13, 2020 by Doug Campbell

A rebound in the tech sector bounced the QQQ off of trend and price support helped to push the SP-500 within 6 points of a new record high.  It seems unlikely to me that we get that close to a big market headline, and the institutions fail to push it through.  However, we still have to deal with Jobless Claim data and a big day of bond auctions with rate and currency pricing implications digest today that could create some price volatility.  Tuesday afternoon reminded us that the bears are still out there and their restless, hungry, so stay focused and flexible should they happen to find some inspiration in the news.

Asian markets closed mostly bullish overnight even as Australia’s jobless rate hit a 22-year high.  European markets appear to be on the cautious side this morning, trading slightly lower as they monitor jobless numbers.  US futures are choppy and flat this morning while poised to set a new SP-500 record as we wait on earnings, jobless claims, and significant day of bond auction data.

Economic Calendar

Earnings Calendar

The Thursday earnings calendar is the busiest day of the week, with 124 companies reporting quarterly results.  Notable reports include AQN, AMAT, BIDU, BAM, FTCH, GLOB, IQ, NTES, TPR, & TK.

News & Technical’s

Ahead of Jobless Claims and a big day of bond auctions US government debit prices are rising this morning.  Today the US Treasury will auction $35 Billion in 8-week bills, $30 billion in 4-week bills, and $26 billion in 30-year bonds.  Interestingly gold futures are trading lower this morning while silver futures trade slightly higher.  Negotiations on the next stimulus bill seem to have ground to a halt and descended into rhetoric driven finger-pointing match of whos to blame.  Which side blinks first is anyone’s guess, but they do both seem to agree on the $1200 taxpayer payments.  There are new concerns about the accuracy of COVID test data.  According to reports reported new infections have declined 19% over the last 7-days, but testing has fallen by as much as 12% over the same period.  Texas cases have dropped off by 10%; however, the number of tests fell 53% over the last two weeks.  The big question, are the numbers artificially skewed, or are we gaining ground in the pandemic battle?  Only time will tell as the nation prepares to reopen schools and colleges.

Yesterday’s rally closed the SP-500 just 6 points below new record highs with a rebound in the tech sector leading the charge higher.  The pullback in the QQQ tested support and trend with buyers surging back into the big-5 tech stocks.  The bearish price action on Tuesday afternoon was unable to follow-though as we expected.  All eyes are on the weekly jobless claims coming out at 8:30 AM eastern.  Stay focused and flexible with a new record close at hand and the T2122 indicator suggesting an overextended market we should prepare for just about anything to occur.

Trade Wisely,

Doug

Bears Make A Rare Appearance

August 12, 2020 by Doug Campbell

The bears make a rare appearance leaving behind some concerning candle patterns, but I suspect they will find it very difficult to gain much momentum with a possible record high in the SP-500 so close at hand.  Remember bearish candle pattern requires follow-through to be valid, and this morning the bulls are pushing hard in the futures to punish traders that took early short positions.  Institutions want that new record headline, and it seems unlikely they will give up this close to making it happen.

Asian markets had mixed but mostly bullish results during the night, and European markets whip around mixed this morning over the possible return of the virus.  US point to a substantial overnight reversal of yesterday’s bearish close with the Dow expected to gap up more than 225 points. 

Economic Calendar

Earnings Calendar

On the Hump Day earnings calendar, we have 87 companies stepping up to reports quarterly results.  Notable reports include LMND, CSCO, EAT, CHU, ENS, FOSL, GMAB, YY, JMIA, LYFT, PING, SDC, SPTN, TCEHY, VFF, WPM, & ZTO.

News & Technical’s

Presidential candidate Joe Biden has chosen California Senator Kamala Harris for his running mate this fall.  If Biden wins in the fall, he will be the oldest elected president at 78 possible, putting Harris teed-up for a run for the top job after one term.  President Trump announced a deal Moderna of 100 for 100 million doses of coronavirus vaccine as Russia comes under considerable criticism for rushing the widespread use of a vaccine after test just 100 individuals.  As a result of COVID economic impacts, the UK is now in recession with a record economic plunge over 20%.  Yesterday Florida reported a record 276 death caused by the virus on Tuesday.  A grim reminder we have a long way to go in our battle with the disease.  Congress remains deadlocked on the next stimulus bill continuing to point fingers at one another to pass the blame for the delay.

Yesterday’s price action left a few questions for the traders to ponder as the bears made a rare appearance in the afternoon session to snap 8-straight days of a market rally.  They left behind concerning candlestick pattern, but this morning the bulls are fired up again, pointing to a substantial gap up.  I think it’s improbable the bears will have a chance to gain much momentum with the SPY so close to setting a new record high.  In-fact the selling yesterday may have picked up just enough short interest to pull off a quick short squeeze to help secure that new record high headline.  That said, once the new record is achieved, a rest or pullback in the market is not out of the question.  Stay focused, and flexible.

Trade Wisely,

Doug

Hopeful Vaccine

August 11, 2020 by Doug Campbell

Hopeful vaccine news out of Russia is inspiring the bulls for a gap up open this morning that may well set a new record high in the SP-500.  Although Congress continues the battle of soundbites and rhetoric, there is still significant hope they will soon come to an agreement on more stimulus.  How this might affect the Presidential executive orders is unclear but slowing the debit spending no longer the issue. It’s the battle of who’s willing to spend the most.

Asian markets closed missed but mostly higher overnight with Hong Kong leading the way up 2.11%.  European markets are sharply higher across the board up to more than 2.5% on recovery hopes.  US Futures indicate a very bullish gap up open with the SP-500 nearing a new record high ahead of earnings and PPI data.

Economic Calendar

Earnings Calendar

On the Tuesday Earnings Calendar, we have a decline, with 88 companies stepping up to report.  Notable reports include NIO, GOOS, CSPR, HUYA, IHG, LITE, MAC, MLCO, RRGB, SFTBY, SYY, & VIAV.

News & Technical’s

Yesterday’s bullish move left the SP-500 less than 1% from new record highs.  Airlines reported that travel is increasing, providing a big lift to the sector, including a BA which rallied more than 5.5%.  Heavy equipment manufacturers DE, CAT, and CMI buying surged yesterday with energy and financial sectors also gaining ground.  During the night, Russia claims the development of the world’s first coronavirus vaccine lifting the futures markets sharply higher this morning.  Of course, a lot of testing will have to is required before the acceptance of a new vaccine here in the US, but with global cases topping, 20 million hope is high.  New US sanctions against Chinese government officials yesterday once again ratchet up tensions between the countries, adding uncertainty to global banks.  As MSFT works to buy TikTok, the French government opens an investigation into privacy concerns of the popular social media App. 

With the bulls solidly in control and the futures pointing to a bullish gap open, the SP-500 is likely to reach a new record high.  Traders should be careful not to chase stocks already well within a bullish run with the fear of missing out.  Remember, this will be the 8^th straight day of gains, increasing the odds of a market rest or pullback at any time.  The T2122 indicator this buying wave is very stretched, and a new record high could be the catalyst that brings out some profit-takers.  Having said that, we should rule out the possibility that Congressional Stimulus news could provide another shot of energy for the bulls.  Stay focused, flexible, and plan your trading carefully. 

Trade Wisley,

Doug

Stimulus Money Flowing Again

August 10, 2020 by Doug Campbell

With stimulus money once again flowing with the stroke of the Presidential pen, the path to record highs in the SP-500 is clear for the bulls for an easy headline.  Although we have several significant reports on the economic calendar this week, today is light, allowing earnings news and politics to drive the day.  While a new record in the SP-500 seems likely soon, traders should watch for possible profit-taking that could begin at any time having moved up 7-days in a row.

Asian markets closed Monday mixed but mostly lower remaining cautious with the rising tensions between the US and China.  However, European indexes are green across the board this morning, and US futures have recovered from overnight lows suggesting a modestly bullish open to begin the week. 

Economic Calendar

Earnings Calendar

Although the 3rd quarter earnings season starts slowing this week, Monday’s calendar remains quite busy with more than 200 companies reporting.  Notable reports include ANGI, GOLD, CGC, CDR, SCOR, CEIX, DUK, AGM, GOGO, HVT, IAC, INO, IPAR, JCOM, MAR, MELI, OXY, ON, PPL, APTS, RCL, SEAS, SPG, TME, TLRY, & WKHS.

New & Technical’s

With the stroke of a pen, the President signs a series of executive orders extending coronavirus relief through the end of the year after Congress failed to reach an agreement on the stimulus bill.  Those unemployed will receive $400 in additional financial support down from the $600 that lapsed over a week ago.  However, it requires the State to come up with $100 of the $400 benefit, and it’s unclear if they can do so.   The initial market reaction to this action showed mixed results, but the additional deficit spending has gold and silver futures flying high this morning.  Some analysts say gold could ready $4000 an ounce!  With the election less than 100 days away, the President also raised tariffs on aluminum reigniting the trade war with Canada, and of course, Canada retaliated in kind.  This weekend the US reached another grim milestone, topping 5 million coronavirus cases.  Daily infection rates have begun to level off in Florida, Texas, and California, with some mid-west, states becoming a concern as their numbers surge. 

With the SP-500 just over 1% from new record highs and the stimulus money flowing again, I suspect the path is clear for the bulls to push forward.  Although the index has moved higher seven sessions in a row, I can’t imagine institutions failing to reach that out for that record-high headline.  However, traders will also have to stay focused on the possible profit-taking that could begin at any time.  With a light day on the economic calendar, earnings results and political spin cycle are the likely drivers for today.

Trade Wisley,

Doug

Employment Situation in Focus

August 7, 2020 by Doug Campbell

All eyes are on the Employment Situation number and rightfully so.  A lot is riding on this number with estimates that range for 0 to 3 million jobs created.  Although futures are currently pointing to a bearish open, anything is possible after the number releases an hour before the market open.  An executive order banning all transactions in 45 with WeChat and TikTok is increasing tensions with China, and Congress left Washington for a week without a deal on stimulus, adding a bit more uncertainty as we slide into the weekend.

Asian markets closed in the red across the board last night in reaction to the rising tensions.  European markets are choppy and flat this morning as they monitor jobs news and US-China relations.  With a lot at stake as the US, market prices at or near record highs, anything is possible at the open as we react to the data.  Fasten your seat belt and prepare for wild price action as we head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a lighter day, with 83 companies stepping up to report.  Notable reports include KIM, MGA, VTR, & VIRT.

News and Technical’s

Another day of big tech buying pushing the NASDAQ to another record high topping the 11,000 level for the first time.  The SPY is now less than 1.3 percent away from new record highs, and a lot will depend on the significant Employment Situation number at 8:30 AM eastern today.  The estimates range between 0 jobs gained last month to 3 million with a consensus estimate of 1.4.  Obviously, at the current elevation of the market, this number has the potential of creating considerable price volatility before the open.  Congress adjourned and went home for a week without a deal on the heavily anticipated stimulus bill, with both sides blaming each other for the delay.  Senator Sanders introduced a new bill called Make the Billionaires Pay Act.  If passed, it will require the richest in the country fork over hundreds of billions to the government with the intent of funding health care for Americans for the next year.  Tensions between the US and China continue to grow after the President signed an executive order banning transactions with WeChat and TikTok.  The order takes effect in 45 days, causing the shares of Tencent (TCEHY) to drop sharply.  There is no news yet of possible China retaliation. 

The technicals of the index charts remain very bullish with nothing but very high prices to hint of possible profit-taking could start at any time.  A lot is riding on the Employment Situation number.  Futures are weak this morning as we wait for the report, but anything is possible at the market open.  Buckle up; it could be a bumpy ride as we head into the weekend.

Trade Wisely,

Doug

Fed, Vaccine, and Stimulus

August 6, 2020 by Doug Campbell

Fueled by Fed, vaccine, and stimulus hopes the market shrugged off the very disappointing private payrolls numbers as the Dow surged more than 370 points, and the SP-500 closed only 2% below new record highs.  Today we face another big day of news-driven price action with more than 400 earnings reports and Jobless Claims.  As this rally stretches-out, remember profit-taking could begin at any time, so stay focused.  Although weak, the bears still exist, so be careful not to be lulled into complacency.

Asian markets closed mostly lower overnight, and European indexes are modestly lower across the board after the Bank of England holds rates steady.  US Futures have pulled back from overnight highs as we wait on earnings and jobless data before the open. It’s been a wild bullish party every day this week.  The question will the party go on, or will the hangover begin soon?

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we now have more than 400 companies fessing up to quarterly results.  Notable reports include AL, AEP, APLE, BLL, BHC, BDX, BKNG, CAH, CUBE, DBX, FSLR, FLIR, FLO, GCI, GPRO, GWPH, HL, ILMN, IRM, KTB, MAIN, MELI, MUR, MYL, NWSA, NLOK, NCLH, PZZA, PLUG, POST, RMAX, QSR, STMP, TMUS, TM, TTD, TRIP, VIAC, WIX, YELP, & ZTS.

News & Technical’s

Even with a very disappointing ADP, private payrolls number, the market continues to rally energetically as if jobs no longer matter in the economy.  With the Dow closing up 373 points and SP-500 only 2% from new record highs the VIX struggles to decline, and the Absolute Breadth Index displays a remarkable divergence to the bullish price action.  How much longer this condition can continue to exist is anyone’s guess, but one thing for sure, the bulls continue to stampede higher with little to no regard for valuation.  Keep an eye on AAPL as it nears a 2 Trillion market cap accounting for a full 6.5% of the entire SP-500.  After another day of wrangling, Congress remains deadlocked on the next Stimulus plan.  Some have suggested a Friday deadline to get to an agreement, and the President has promised an executive order should they fail.  Gold and Silver continue to rally sharply as the debasement of the US dollar continues, and worry of substantial future inflation grows. 

Today we will get the latest reading on Jobless Claims with consensus estimates looking for a slight rise in applicants this week.  However, whatever the number is, I’m not sure it will matter as the market continues to ride the massive wave newly printed money.  As you plan your day, remember we will get the Employment Situation number before the market opens on Friday.  Consensus suggests an improvement in the unemployment rate of 11.1% last month to 10.5%. Even with the improvement, it isn’t easy to correlate the current market valuation with such a high level of unemployment.  As this multi-day rally stretches-out, stay vigilant to price action watching for the possibility that profit-taking could begin at any time.

Trade Wisley,

Doug

31st Record High

August 5, 2020 by Doug Campbell

The NASDAQ gap up this morning my well create its 31^st record high in the index this year.  Fueling the bullish morning sentiment is news that Congress is nearing a deal on another massive spending bill, and the Fed is nearing a commitment to leave interest rates low for years to get an inflation rate above 2%.  Yesterday Gold topped $2000 an ounce and is up by another $36 and Silver continue rapidly rising on the devaluing of the US dollar.  Buy, Buy, Buy and party like its 1999.

Asian markets closed mixed but mostly higher overnight as tensions grow with a US visit to Taiwan likely to anger China.  European markets are in rally mode this morning, reacting to favorable earnings results.  US Futures point to another gap up open ahead of a busy day of earnings and economic reports hopeful of a more than trillion-dollar stimulus deal on the way.

Economic Calendar

Earnings Calendar

On the Hump day earnings calendar, we have more than 300 companies reporting results.  Notable reports include FSLY, SQ, DDD, ALRM, ALB, AWK, ABC, BNFT, BWA, BIP, CWH, CNVA, FUN, CTL, CVS, DISCA, ENR, EPR, ETSY, FRT, FISV, FIT, FNV, GDDY, TWNK, HUBS, HUM, IIPR, JCK, LYV, MRO, MET, MRNA , NYT, NLSN, OIH, PAAS, PBPB, PSA, REGN< ROKU, SRE, STOR, SPWR, TRI, VSLR, W, WELL, & WEN.

News and Technical’s

News that Congress may soon reach an agreement on the stimulus bill and the possibility that FOMC may commit to not change interest rates until reaching a 2% inflation rate has today’s futures suggesting more new record highs.  The gap up at the open will create the 31^st new record high this year in the NASDAQ as unprecedented Fed actions, and government spending programs continue to drive the market higher.  Also quickly rising is Gold, which topped $2000 per ounce yesterday and is another $36 per ounce this morning as we continue to devalue the US dollar.  A national debit quickly nearing 27 Trillion seems to be of no consequence as long as the market moves higher.  Disney reported it lost 3.5 billion in theme park revenue, but with 100 million subscribers to the Disney Plus app, the stock is up more than 6% higher this morning.  Today we will hear from ADP on their Employment Report, International Trade, ISM Non-Manufacturing Index, and the Petroleum Status numbers as well as more than 300 earnings reports.  F=Remember we are building toward the Employment Situation number Friday morning.  Not that unemployment matters anymore in light of all the newly printed money.

Technically speaking, the bulls reaming solidly in control with the tech sector continuing to set new records and the Dow that may well top 27,000 with this mornings gap up.  The VIX remains elevated but closed below a 24 handle for the first time since February.  Today the DIA 50-day average is likely to cross the 200-day average recovering from the cross down that occurred in mid-March.  Follow suit will be the IWM cross that may rise above later this week or early next week, assuming the bears continue to stay away. 

Trade Wisely,

Doug

Big Tech Leads

August 4, 2020 by Doug Campbell

Big tech continues to lead the way higher with Congress deadlocked on the next stimulus bill and a sharply declining Absolute Breadth Index.  New tensions with China are having a slightly bearish effect on the market this morning as they label the US a ‘Rogue Country’ accusing the US of theft as the government clears the way for MSFT to purchase TikTok.  China once again vows retaliation as we head into another big day of earnings reports.

Asian markets saw bullnesss across the board during the night, with Hong Kong rising a full 2%.  European markets are mixed but mostly higher but have retreated from session highs on weak earnings results.  US Futures point to a modest decline at the open in reaction to China tensions with the latest reading on Factory orders and a slew of earnings reports for the market to digest this morning.

Economic Calendar

Earnings Calendar

Tuesday is a busy day on the economic calendar, with over 200 companies stepping up to reports quarterly reports.  Notable reports include BP, DIS, ATVI, ACM, ALL, AMCX, ANDE, ARNC, ANET, BYND, CNK, DVN, EXC, EXPD, EXR, FOXA, IT, GLUU, GDOT, IGT, KRR, LDOS, LC, TREE, LGIH, LPSN, MIC, MNK, MTCH, MCHP, NMST, NKLA, RL, TWLO, WU, WW, & WYNN.

News and Technical’s

It would seem the possible purchase of TikTok by MSFT has inflamed the tensions between the US and China.  During the evening, Chinese state media slammed the US as a ‘rogue country.’  They call it a smash and grab of the Chinese technology and vow retaliation.  The US has said that the App is a security risk funneling user data directly to the Chinese government, and without the possible purchase from MSFT, the was on the path to be banned by executive order.  After another day of negotiations that, according to reports, was productive but ended with no deal on the stimulus thus far.  The President is now saying if they don’t get it done soon, he could do by executive order.  Morgan Stanley believes the vast sums of money put into keeping people in work as well as supporting those that are unemployed could make the difference in driving up inflation.  The sharp rise in Gold and Silver would seem to agree with that sentiment.  What that might mean for the future of the economy and its effects on the overall market, only time will tell. 

Yesterday the QQQ closed at a new record high with all indexes rising with APPL and MSFT leading the bullish charge.  The massive imbalance in the market continues to grow as with just a few tech giants lifting the indexes as the Absolute Breadth Index continues to decline sharply.  That said, the technicals of the index charts remain very bullish with the DIA 50-day average posied to cross above its 200-day.  As the indexes stretch out to new records on the bullishness in tech Gold, Silver and bonds continue to rise, and VIX remains stubbornly elevated.  The question is, how long can this continue and what happens when the next shoe drops?  Stay focused, and flexible.

Trade Wisely,

Doug

AAPL Leading the Way!

August 3, 2020 by Doug Campbell

With AAPL leading the way, the bulls once again successfully defended vital price support levels on Friday with a remarkable surge of buying at the end of day Friday.  With a rise of 10.47%, APPL became the most valuable company in the world, and single handly was responsible for the majority of the rally.  The bullish pressure continues this morning with APPL indicated to gap up at the open. 

Asian markets were mixed but mostly higher overnight as China’s July manufacturing data come in above expectations.  European indexes trade bullishly across the board this morning and US Futures that traded flat most of the night have gone bullish this morning with new record highs likely in the QQQ at the open.  A busy economic and earnings calendar will likely keep volatility elevated in the week ahead, so remain focused on price action and remain flexible.

Economic Calendar

Earnings Calendar

Our biggest week of earnings reports for the 3^rd quarter is now behind us, but we still have a busy week with 146 companies reporting this Monday.  Notable reports include AIG, AWR, CRUS, CLX, CTB, ESS, IR, J, LEG, L, MCK, MOS, NNN, O, RNG, SBAC, TTWO, THC, TXRH, TSN, VVV, SPCE, VNO,& WMB.

News and Technical’s

Saturday negotiations on the stimulus bill ended in a deadlock with the unemployment bonus remaining as the major sticking point.  The $600 per week additional payment ended last Friday as the two sides duke it out with sound bites and rhetoric in the weekend news that will spill over into this week’s price action.  As pandemic infections spread widely across the country, Lord & Taylor, the owner of Men’s Wearhouse files for bankruptcy.  A theme that’s become all too familiar in recent months and sadly a reality that could easily continue through the rest of the year.  Last week the President threatened to ban the popular social media app TikTok but has since backed off the notion after MSFT announced it is in discussions to buy the company in a deal they hope to complete by Sept. 15^th.  A move that would, for the first time, put MSFT in direct competition with FB and TWTR. 

With a strong afternoon rebound, the bulls once again defend critical moving average support in the DIA mostly on the bullishness of AAPL.  Not only did the price of the stock soar 10.47% on Friday, but it also became the most valuable company in the world.  Pre-market activity indicates the rush to buy MSFT is not over with the stock indicated to gap up again at the open today.  Although the US Futures were relatively flat overnight, they have started the morning push that is likely to set new all-time high records in the QQQ.  Interestingly the Absolute Breadth Indicator continues to decline, which indicates fewer and fewer companies are responsible for the current rally.  Expect another wild week of price action, especially if we begin to see any profit-taking in the big tech stocks.

Trade Wisely,

Doug

Blowout Tech Earnings

July 31, 2020 by Doug Campbell

The worst reading on GDP in history and blowout tech earnings deliver a surprisingly muted response in the US Futures markets this morning.  Even with the concern of rising unemployment with the four tech giants adding more than 200 billion in valuation on Thursday afternoon, I would have expected more.  We have certainly seen the market leap higher on far less in recent months, have we not?  With this now in the rear-view mirror, perhaps the focus has turned the stimulus battle in Congress and the rising virus death toll.  Perhaps, we should consider the possibility of a sell the news event as we slide into the weekend.

Asian markets closed mixed with Japan falling as much as 3% overnight.  European markets trade mixed but mostly bullish this morning as they wait on their GDP numbers.  Ahead of another big round of earnings and economic reports, US futures point to modest gains at the open.  Expect volatility to remain elevated as we slide into the weekend.

Economic Calendar

Earnings Calendar

This Friday, we have just over 110 companies reporting.  Notable reports include ABBV, BAH, CAT, CHTR, DVX, CHD, CL, D, E, XOM, FCAU, GT, ITW, IYB, MELI, MRK, NWL, NOK, PSX, PINS, TIF, UAA, VFC, & WPC.

News & Technical’s

After the worst GDP reading in history, big tech surprised investors with blowout earnings results.  According to reports, the four tech giants added over 200 billion in valuation Thursday afternoon.  With a considerable increase in iPhone and iPad sales, it would seem a substantial amount of the stimulus checks went directly to buy new tech devices.  Maybe the biggest surprise is that the futures after such an impressive tech performance show bullishness but somewhat muted in response.  Perhaps it’s the infighting of Congress as they haggle over the new stimulus bill, the rising virus death toll, or the US/China tensions as Moderna experiences another cyber attack to steal details on the vaccine.  The one thing I think we can continue to count on is that this earnings season will continue to deliver surprises, and price action will likely remain volatile.

Although we experienced some significant selling yesterday morning that pushed the Dow briefly below its 50-day moving average, there was little to no technical damage left behind in the indexes by the end of the day.  The bulls showed their strength defending price support levels, and the bears can’t seem to sustain an attach longer than a couple of hours.  I hate even to bring this up, but with the muted futures response this morning, should we consider the possibility of a so-called sell the news event?  Maybe?  However, I will have to stay with the current trend and bullish patterns for now.  Today will get a reading on the Personal Income and Outlays and Consumer Sentiment with industrials and oil front and center on the earnings calendar. 

Trade Wisely,

Doug