Big Tech Leads

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Big Tech Leads

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!

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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 3rd 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. 15th.  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

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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

Deluge of Big Tech Reports

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A deluge of big tech reports, GDP and Jobless claims have come together to create the perfect storm of uncertainty.  Today could be very challenging, but the Friday open has the potential to be very wild, and no one knows if the bulls or the bears will leading the charge.  Anything is possible, so consider the risk carefully you carry into today’s close.  Can they produce earnings strong enough to support current prices?  We will find out after the bell today.

Asian markets closed modestly bearish across the board overnight in reaction to the FOMC rate decision.  European markets trade cautiously this morning, leaning slightly into the red.  US Futures are decidedly bearish this morning, pointing to a gap down open ahead of earnings, GDP and jobless claims.  Buckle up the next 24 hours have the potential to be very volatile.

Economic Calendar

Earnings Calendar

All eyes will be on the big tech earnings reports after the bell today.  Overall we have more than 250 companies reporting their quarterly results will make it our busiest day so far this season.  Notable reports include FB, AMZN, AAPL, GOOGL, AMT, BUD, MT, AZN, TEAM, BAX, CARS, CC, CI, CLF, CMCSA, COF, COR, CS, CROX, DECK, DNKN, ELAN, EA, LLY, EXPE, F, FTS, GPC, GILD, GRUB, HBI, HST, K, KHC, LIN, LTC, MA, MGM, TAP, MCO, NEM, NOC, PG, PFPT, RDFN, SHAK, SIRI, SO, SWK, SYK, SYK, TW, UPS, X, VLO, VRTX, WM, WWE, XLNX, & YUM.

News & Technical’s

This morning we will likely get an historic reading on the GDP with numbers near the World War 2 economic impacts.  The question to be answered is the number already baked into the market’s pricing, or will there be a strong reaction.  At the same time will get the latest details on Jobless claims that could begin to creep back up due to the second wave virus impacts.  The FOMC yesterday decided to stand fast on interest rates and said the direction of the economy will be tied directly to the length and duration of the pandemic.  There are likely to be a lot of fireworks after the bell today as FB, AMZN, APPLE, and GOOGL report quarterly results.  The uncertainty surrounding these reports has the market on edge, and traders should expect a wild open on Friday as a result.  As Congress haggles over the details of the next stimulus bill, the still found time to hold a virtual flogging of the top tech business accusing them of everything from anticompetitive practices to outright stealing. I’m sure there is much more to come on this subject in the near future.

Even with the uncertainty and very choppy price action, the bulls have maintained majority control over the indexes.  However, with such a big day of data coming our way, anything is possible.  Going into the close today, traders will have to consider carefully the risk and price volatility we could experience Friday at the open.  The potential for a huge gap is high, and the big question yet to be answered is, will it be controlled by the bull or the bear?  Your guess is as good as mine.

Trade Wisely,

Doug

Considerable Uncertainty

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Considerable Uncertainty

There seems to be considerable uncertainty amongst traders and investors facing a big day of earnings and a pending FOMC decision.  Yesterday was undoubtedly a frustrating day of intraday whipsaws and choppy price action that culminated in a bearish push reversing the bullish action seen on Monday.  What comes next is anyone’s guess, so stay focused and flexible.  Remember, there is no shame in standing aside, protecting your capital if you have no edge in such a new driven environment.  Cash is a position!

Asian markets closed the day mixed and relatively flat as they wait for the FOMC decision.  European markets also trade mixed chopping around the flat-line uncertain about what comes next.  US Futures trade flat this morning ahead of a massive day of data with an equal chance of encouraging the bulls or bringing on a bearish attack.  Buckle up for the wild ride the next couple days could provide.

Economic Calendar

Earnings Calendar

Earnings ramp-up today with 176 companies stepping up to report quarterly results.  Notable reports include FB, AMP, NLY, ANTM, APA, ADM, ADP, AVB, BCS, APRN, BA, BSX, CAKE, CCI, DB, DIN, DRE, EPD, EQIX, GRMN, GD, DE, GM, GLAD, GSX, KGC, LRCX, NSC, ORLY, ONDK, PYPL, QCOM, R, SNY, SHOP, SIX, SPOT, RGR, TWOW, RIG, & YUMC.

News & Technical’s

The market will have no shortage of data to digest today with 3rd quarter earnings ramping up and including some of the tech giants reporting after the bell.  We will also get the FOMC decision at 2 PM Eastern, followed by Jerome Powell’s press conference 30 minutes later.  Republicans and Democrats seem to be digging into entrenched position over the next stimulus bill as the two sides step up the rhetoric as they battle between price tags of 1 to 3 trillion of additional deficit spending.  Meanwhile, on the coronavirus front, the official death toll from the pandemic crossed 150,000, with more than 65,000 new infections report yesterday.  With all this going on, Congress still has the time to bring in several of the top tech company CEO’s to grill them in public hearings. 

After a very choppy day of trading, the bears stepped up their activity as we headed into the close yesterday, reversing the bullish action on Monday.  Clearly, there remains considerable uncertainty among traders and investors amidst the mixed bag of earnings reports as companies report the impacts of the pandemic.  With a slew of morning earnings and economic reports followed by an FOMC decision, anything is possible.  Traders will have to be in top form to navigate the minefield of news that could create very volatile price action in reaction.  Plan carefully, stay focused, and flexible while weighing the considerable risk in such a new driven environment.

Trade Wisely,

Doug

Tech Giants Lead

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The tech giants MSFT, AAPL, GOOG, FB, and AMZN had nice rallies yesterday, lifting the indexes while the vast majority lacked the volume to break choppy consolidation ranges.  Please make no mistake that price patterns of stocks and the indexes remain bullish; however, there appears to be a palpable uncertainty as we ramp up earnings.  With a busy day of earnings reports, a reading on Consumer Confidence, and the beginning of the 2-day FOMC meeting, anything is possible, and price volatility could be challenging.

Asian markets were mixed but mostly higher overnight with modest gains in the SHANGHAI and HIS.  European markets are flat to slightly lower this morning amid stimulus hopes and rising US/China tensions.  US Futures are lifting off of morning lows but continue to point to a modestly lower open ahead a big day of earnings and economic data.  Remain focused and flexible as anything is possible.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have a big day with 93 companies reporting results.  Notable reports include MMM, AMD, AFL, AKAM, MO, AMGN, CAR, BXP, CNC, DB, GLW, DHI, DENN, EBAY, ECL, FEYE, BEN, HOG, JBLU, JNPR, MCD, MDLZ, MSCI, OKE, PFE, RTX, ROK, ROP, SPGI, STX, SHW, STAG, SBUX, TRU, V, WH, & YNDX.

News & Technical’s

The Senate unveils their version of the coronavirus relief plan with $1200 stimulus checks and $500 for dependents.  The bill includes a replacement of 70% of unemployed wages in the extended benefits.  There is also considerable funds to help schools trying to get back work this fall.  The President’s national security advisor Robert O’Brien has tested positive for COVID, but hot states are starting to show signs of slowing infection rates.  However, major league baseball postponed two games yesterday of their shortened season due to several players testing positive.  Today begins a marked increase in earnings season ramps up to a fevered pitch with several big tech reports on the way Wednesday and Thursday.  Today also starts the 2-day FOMC meeting that culminates in a 2 PM Eastern announcement Wednesday afternoon.  According to consensus estimates, the Consumer Confidence numbers expect a small decline when they are released a 10 AM Eastern.

Yesterday saw nice gains in APPL, AMZN, GOOG, FB & MSFT but, the majority of stock found it challenging to find enough volume to move out of choppy consolidation ranges.  Futures opened trading last night positive but have since shown some hesitation ahead of busy earnings calendar.  Although the VIX pulled back yesterday, it remains quite elevated closing above a 24 handle.  So as a few tech giants do the majority of the lifting, there seems to be a palpable uncertainty that the majority of stocks will have some trouble supporting current prices.  Only time will tell, but traders should prepare for considerable volatility as we progress through this new laden week.  Be careful not to overtrade staying focused on price action flexible as the market reacts to all the data.

Trade Wisely,

Doug

Very Newsy Week

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Very Newsy Week

Stimulus, huge earnings & economic reports that include an FOMC announcement, pandemic, and rising tensions between the US and China set the stage for a very newsy and potentially volatile market week ahead.  Traders could see significant morning gaps, whipsaws, and quick intraday reversal in reaction to all the news coming our way this week.  Experienced day traders may have the upper hand this week, while new or inexperienced traders may find it better to stand aside protecting their capital as the market grapples with all the news.

Asian markets closed mixed but mostly lower overnight.  European markets trade mixed and primarily flat this morning as US/China tensions and pandemic impacts weigh on investors.  US Futures, however, fueled up on another trillion in government stimulus is green across the board and looking for a bullish gap open.

Economic Calendar

Earnings Calendar

We have a hectic week of big earnings reports, but we kick it off this Monday, with 51 companies stepping up with quarterly results.

New and Technical’s

We have an incredibly busy week of news that has the potential to affect the overall market price volatility.  We have a big week of earnings reports that include AAPL, MSFT, FB, GOOG & AMZN.  An FOMC meeting announcement Wednesday afternoon economic calendar that also includes Durable Goods, Consumer Confidence, GDP, Jobless Claims & Personal income, and Outlays.  A likely stimulus bill, topping 1 trillion, that’s an apparent political football gaining headlines and creating turbulence moving its way through congress.  Not to mention the growing tensions between the US and China as well as pandemic news that continues to threaten the economy.  Traders should prepare for significant morning market gaps, possible whipsaws, intraday reversals, and considerable price volatility as investors grapple with all the reports. 

Last week’s pullback left behind some unfavorable price patterns in the index charts that hint of some pricing stress yet, at the same time, maintain bullish overall trends.  Some short-term price supports broke while longer-term supports held fast, adding to the complexity of such a newsy week of potentially market-moving news.  Traders will have to remain flexible and consider carefully consider the risks of holding any positions overnight due to likely volatility.  Plan carefully, and buckle up for what could be a very wild week.

Trade Wisely,

Doug

Joblessness

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Joblessness

Rising joblessness due to growing pandemic pressures and increasing tensions between the US and China had bears asserting themselves yesterday afternoon.  Intraday charts indicate a little caution may be in order as we head into the uncertainty of the weekend, but as of now, the daily bullish index trends remain intact.  With another big government stimulus plan on the way, it may be difficult for the bears to follow-though on yesterday’s selling.  I would not expect the bulls to give up easily as they bask in the glow of newly printed money.

Asian markets saw red across the board during the night as rising US/China tensions weigh on investors.  European markets are also in the red this morning after China orders the closing of a US consulate in retaliation.  US Futures currently point to modest declines as we wait on new home sales data and earnings.  Expect price volatility to remain high as we head into the uncertainty of the weekend.

Economic Calendar

Earnings Calendar

On the Friday, we have 45 companies set to report quarterly results.  Notable reports include AXP, BLMN, HON, NEE, NEP, SLB, & VZ.

News and Technical’s

The market had to deal with the prospect that the pandemic is having severe impacts on national joblessness.  There are nearly 30 million Americans unemployed far more than the worst of the 2008 financial crisis.  The US has now reached another grim record topping 4 million infections, and yesterday, Florida record a record daily death toll.  Yesterday, the President suggested that some schools may have to delay reopening and also canceled parts of the upcoming GOP convention.  If that were not enough uncertainty for the market to deal with China last night made its retaliatory move in the dangerous game with the US.  China has now ordered the US to close the consulate in Chengdu.  In a fiery speech, Secretary of State Mike Pompeo’s slammed the Chinese government for its actions while attempting to rally the Chinese people against the Communist Party.  According to reports, the Senate expects to unveil its coronavirus relief pan next week, adding yet another wrinkle for the market to grapple with heading into an uncertain weekend.

Although we did see some significant selling yesterday afternoon, the daily technicals of the index charts remain bullish, with the short-term uptrends still intact.  The big question for today is, with the mounting economic pressures of the pandemic can the bulls find the energy to defend price supports heading into the weekend.  Keep an eye on the tech giants that have led this historic market rally.  Should they begin to experience some profit-taking, it may be tough for the indexes to maintain current trends. 

Trade Wisely,

Doug

Stimulus on the way.

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Stimulus on the way

With more Federal stimulus on the way, the bulls continue the drive higher yesterday after news that the Senate may allow a reduced unemployment bonus payment of $100 per week.  Today we have our biggest round of earnings this week and will also get the latest reading on unemployment.  So far, the market has shrugged off the rising tensions between the US and China though many are warning that impacts could have significant market impacts.  For now, the bulls are large and in charge, with no signs of slowing down in the charts.

Asian markets closed mixed but mostly lower overnight as US/China tensions grow.  However, European markets are decidedly bullish, seeing green across the board.  US Futures point to another gap up open focused on more stimulus, earnings reports. 

Economic Calendar

Earnings Calendar

Today we have our biggest day of earnings this week with 110 companies reporting.  Notable reports include APD, ALK, AB, T, AN, BX, SAM, CTAS, CTXS, DHR, DWO, EW, EXPE, FCX, HSY, HBAN, INTC, KMB, MTB, MAT, NUE, PNR, PBCT, PHM, SWKS, LUV, TSCO, TRV, TWTR, UNP, VRSN, & GWW.

News and Technical’s

Focused on hopeful earnings reports, the indexes continued the rally with a strong late-day surge.  The bulls shrugged off rising tensions between the US, and China and the markets remain unconcerned about the protest violence around the country and or the rising pandemic death toll.  After the bell, yesterday MSFT reported as expected but sold off about 2%, and TSLA reported is 4th straight profit seeing a rally in aftermarket trading.  The Senate reportedly reached a tentative $1 trillion agreement on the next round of federal stimulus.  We are still waiting on the retaliation that Beijing has vowed on the closure of the Houston consulate.  Some have started to mention the tensions as the next cold war and concerns are growing as to far the two countries will go and how deep the possible market impacts could become in the near future.

Technically speaking, the indexes are in bullish patterns, and the bulls are pushing yet another gap up open this morning.  Today we have our biggest day of earnings this week and will get the latest reading on unemployment which is expecting about 1.3 million new filings.  About 20 million Americans remain unemployed, which is far higher than during the depths of the 2008 financial crisis.  It would seem as long as the central banks and government stimulus continues to deficit spend employment is no longer a factor considered for economic health.  I suspect we can expect more of the same as the presidential election nears.  Buckle up for a bumpy ride.

Trade Wisely,

Doug

Chinese Consulate Ordered to Close

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The State Department orders the Chinese Houston consulate to close after charging two Chinese nationals in vaccine hacking attacks against American companies.  Beijing, of course, vows retaliation as the tensions continue to grow and adding another layer of uncertainty for the market to deal with as earnings season ramps up.  Pressure is also increasing on the economic recovery as the US death toll tops 1100 for the first time since April with the President stating its likely to get worse before getting better.

Asian markets closed the day mixed, but mostly lower and European indexes trade in the bearish territory this morning, reacting to the rising tensions between the US and China.  US futures have rallied off overnight lows ahead of Housing Data, and a big round of earning that includes MSFT after the bell today. 

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have 47 companies reporting quarterly results.  Notable reports include MSFT, TSLA, ABB, ALGN, BKR, BIIB, CP, CMG, CSX, DFS, DOV, EFX, HCA, KEY, KMI, NDAQ, RCI, SLG, SAVE, UAL, & WHR.

News & Technical’s

With tensions growing between the US and China, the State Dept. orders China to close the Houston consulate as Beijing vows retaliation.  The decision come after the US charges two Chinese nationals in vaccine hacking attacks.  The President, in his first coronavirus briefing in several weeks, said we should expect the pandemic to get worse before it gets better and encourages Americans to wear masks to help prevent the spread.  The briefing came on the heels of the largest daily death toll spike since April topping 1100.  United Airlines posts a 1.5 billion dollar loss in pandemic impacts that sadly continue to grow daily.  During the night, the Alaska Peninsula experience a powerful 7.8 earthquake.  Worries of a possible tsunami sent residents fleeing to higher ground, but that threat has now passed.  Gold is soaring this morning after Europe delivers another 2 trillion in virus stimulus.  Here in the US, Congress continues to haggle over their next stimulus package that may happen as soon as next week.

Yesterday’s gap up open tested but ultimately failed the breach of the resistance of the Island reversal pattern created in early June price action.  However, the SPY not only breached the resistance but yesterday broke above its island pattern and, although found some profit-taking by the end of the day, managed to hold onto the new level as support.  After attempting a push to new record highs, the QQQ seemed to run out steam leaving behind a contradictory dark cloud pattern while still in a bullish trend.  In an interesting turn of events, IWM finished the day strong with the aid of a financial rally.  With tensions rising with China, futures were a bit bearish during the night, but as is the norm lately, the morning pump has begun ahead of housing numbers and a big wave of earnings reports.  Expect price volatility to remain high.

Trade Wisely,

Doug