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

Government Stimulus

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Government Stimulus

New of more government stimulus provides the bullish energy to set new NASDAQ records amid rising infections, hospitalizations, and deaths.  Europe leaders reach a deal to provide another $858 billion (US Value) in stimulus, and reports suggest Congress is aiming at a total that will top 1 trillion.  There seems to no lack of desire to buy up stocks at any price as many issues hit new record highs yesterday ahead of earnings their earnings reports.  With a light day of economic news, earnings and stimulus news will take front and center as futures push for another record high open today.

Asian markets traded higher overnight, supported by hopeful vaccine news.  European markets are decidedly bullish in reaction to the stimulus deal, and the US futures all point to a bullish gap-up open fueled by more government deficit spending.  Continue to ride the wave as long as it lasts.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 43 companies stepping up to report results today.  Notable reports include CNI, COF, KO, CMA, IBKR, ISRG, IRBT, LMT, LOGI, NAVI, NVS, PM, PLD, SNAP, SYF, TER, TXN, & UBS.

News & Technical’s

Hopeful vaccine news and lots of talk about government stimulus big tech led Monday’s rally that inked another all-time high close for the NASDAQ.  At the same time, virtual infections, hospitalizations, and deaths rose.  According to reports, EU leaders reached a deal of fiscal stimulus that totals $858 billion, and the US is shooting for a plan that will add at least another trillion in US stimulus.  A new study from New York suggests that as many of 1/3 of businesses will never reopen due to pandemic impacts, but as of now, the market seems utterly unconcerned about unemployment.  UBS reported an 11% fall in second-quarter profits early this morning and warned of continued credit losses, but the stock is gapping up this morning.  KO reported a 33% decline in earnings; however, it sees demand improving as lockdowns ease, pushing the shares higher this morning.  Chicago took steps to increase COVID restrictions yesterday, and according to reports, LA County is on the cusp of another shut-down in the battle against the virus. 

DIA, SPY & IWM setup yesterday with bullish patterns with the big-5 tech giants doing the majority of the lifting.  The QQQ hit new record highs, and the US futures point to more records at the open as the race to buy stocks at all-time highs continues.  With a very light day on the economic calendar, earnings reports and government stimulus news will take front and center.  Somehow COVID, unemployment, and year over year, declining company revenues no longer matter.  Stay with the bullish trend but remain focused and flexible because this sensitive news market has proven several times how quickly it can reverse.

Trade Wisely,

Doug

Economic Uncertainty

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Economic Uncertainty

As we begin a new week, an economic uncertainty continues to grow as the fast-spreading virus threatens shutdowns and fills hospitals ICU units to capacity.  However, the market seems relatively undeterred with visions of enormous government stimulus spending hopes on the horizon in Europe and the United States.  The big question yet to be answered is, can we deficit spend enough to cover the business impacts of the pandemic?  With a light economic calendar, a busy earnings calendar, and pandemic uncertainty rising expect price action to remain volatile and challenging.

Asian markets closed the overnight mixed but mostly higher as the SHANGHAI rallied more than 3%.  European markets trade mixed with EU leaders deadlocked on a massive stimulus coronavirus recovery fund.  US futures have rallied off overnight lows ahead of earnings reports indicating a flat to slightly bearish open with NASDAQ futures bank in the green.  Buckle-up and stay focused and flexible.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have 22 companies reporting quarterly results.  Notable reports include PEP, HAL, MAN, PETS, CCK, IBM, LOGI & STLD.

News and Technical’s

Concern is rising as US infection rates top 3.7 million with a death toll moving over 140,000 this weekend.  Florida has reported more than 10,000 new infections in the last 5-days as space in ICU units in several hot spot states are reportedly at capacity.  As the healthcare system strains to keep up, the market seems transfixed on hopes of massive government stimulus in the pipeline in Europe and the United States.  I guess the question yet to be answered is, can the government actually buy our way out of this pandemic without a massive debt crisis as the after effect?  I guess only time will tell.  I think one of the most honest answers I’ve heard came from Jamie Dimon’s warning for the US economy this weekend, “nobody knows what comes next.” 

Technically the indexes continue in bullish trends even with the palpable uncertainty that lies ahead.  This week we have a relatively light economic calendar, but traders will have to navigate a minefield of earnings reports the could create some significant price volatility.  Futures opened on a positive note last night but quickly slipped negative, suggesting that Florida may have to shut down once again.  However, in the normal fashion of late, the morning pump has rallied the futures well of the lows currently indicating a flat to everso slight bearish open as we wait on morning earnings.  Stay flexible with an ear to the news that could quickly create reversals both up and down.

Trade Wisely,

Doug

Grinding Day

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Grinding Day

Yesterday a slow and grinding day of price action with a little profit-taking after a mixed bag of earnings reports and higher than expected jobless numbers.  That said, the indexes suffered little to no technical damage with the bulls fighting hard to defend against any attempt by the bears to start a selloff.  The tech sector may experience some pressure today after NFLX disappointed investors after the bell yesterday.  Infection numbers continue to set new records, but the market is unconcerned as they wait for the next round of stimulus spending.

Asian markets closed the trading week mixed but mostly higher amidst rising US-China tensions.  European markets trade mixed this morning with an ever so slight advantage to the bulls.  Here in the US, after smashing the new infection record and disappointing NFLX report, futures point to modestly bullish open ahead of earnings and economic data.

Economic Calendar

Earnings Calendar

On the Friday Earnings Calendar, we have 28 companies fessing up to their quarterly results.  Notable reports include ALLY, BLK, CFG, KSU, FR, & STT.

News and Technical’s

Indexes found a few profit-takers yesterday after a mixed bag of earnings reports and Jobless Claims numbers higher than expected.  The market was also dealing with a new record high in pandemic infections, but just one day later, that record was smashed with the number topping 77,000 yesterday.  According to reports, the next congressional stimulus bill will cost 1.3 Trillion as written with several elected officials suggesting it needs to be substantially more.  Netflix reported a miss after the bell yesterday with and expectation that subscribers will decline in the coming quarter.  Share of Netflix fell as much as 10% in extended trading, which may add some pressure today on the high flying tech sector.  This morning analysts expect a significant increase in housing starts as the 30-year mortgage fell briefly below 3% for the first time in history yesterday.  We will also get a reading on Consumer Sentiment as well as several notable earnings reports that could move the market.

Yesterday mild round of profit-taking made for a slow grinding day of price action but little to no technical damage to the index charts.  The tech sector has seen a bit of weakness this week, and it will be interesting to see if the miss from Netflix yesterday will continue that pressure today.  There has been a notable increase in the consumer defensive and consumer staples stocks in the last few days.  It would seem we are witnessing a rotation into better value dividend-paying issues as the interest in the high flying tech sector wains.  There may be some concern that some of the current market leaders will have a difficult time supporting these high prices in their upcoming earnings reports.  As we approach the weekend, consider carefully consider the risk as the pandemic infections surge and an uncertain earnings season ramps up to a fevered pitch.

Trade Wisely,

Doug

Big Day of Data

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Big Day of Data

Facing a big day of earnings and economic data while digesting more new records in daily infections and deaths, the US Futures point to the gap down open.  While it was nice to see some follow-through bullishness yesterday, the elevated VIX continues to show the market uncertainty and adds significant complexity for traders as they try to navigate the wild price swings.  Today is likely to be no different with gaps and intraday reversals as the market attempts to digest all the data.

Asian markets close the day seeing only red across the board as the tensions between the US and China rise.  European markets are also trading lower this morning as virus concerns weigh heavily on investors.  US Futures point to a lower open this morning, reacting to early earnings data and rising pandemic impacts.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 37 companies reporting their quarterly results.  Notable reports include JNJ, NFLX, ABT, BAC, SCHW, DPZ, JBHT, MS, PPG, TSM, & TFC.

News and Technical’s

With daily reversals and big point moves as this morning begins, it looks like the market is shaping up to give us more of the same.  Sadly we seem to be losing the battle on the virus front hit a new national record of daily infections as well as a new daily record death toll.  Several state now requiring the wearing of masks in public while some profoundly affected states want to soldier on without additional measures.  The pandemic is putting a strain on the healthcare system in several states filling their hospitals to near capacity.  Today we will get earnings reports BAC and MS and NFLX.  Although very early in the season, the results have been a mixed bag.  We also have our biggest day of the week on the economic calendar, which includes Jobless Claims and Retail Sales numbers as if there is not already a lot for the market to digest. 

Yesterday’s big gap up was an excellent follow-through to Tuesday’s rally but ended the day rather unconfidently.  The DIA tested the resistance of the Island Reversal pattern established in early June, but the bears held their ground by the close.  The SPY easily broke above its island reversal pattern holding it solidly into the close while the QQQ struggled with a lackluster performance with several of the big tech giants finding some profit-takers.  IWM benefited from the rally in the financials after the GS earnings report finally breaking above and holding its 200-day moving average by the close.  With a big day of data, the US Futures currently point to a gap down open.  The VIX, although pulling back yesterday, continues to hold above its 200-day average holding on to an elevated close above 27 handles.  With so much data coming our way, anything is possible, so plan carefully and remain flexible.

Trade Wisely,

Doug

Another Price Action Reversal

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Another Price Action Reversal

Monday’s price action delivers bearish reversal patterns but fails to follow-though, so on Tuesday, the market is dealt another full price action reversal by the bulls.  The VIX continues to remain very elevated, and the Absolute Breadth Index continues to decline as infection rates rise in 39 states.  Interestingly so-called safe-haven issues in the consumer defensive sector had a very good day yesterday, and gold and silver values continue to climb.  Indeed an interesting dichotomy for traders to navigate.

Asian markets trade mixed but mostly higher overnight, with the NIKKEI closing up 1.59%.  European markets are in the full-on bullish mode this morning, reacting to the hopeful vaccine news.  US futures are leaping higher this morning on the same vaccine news and in reaction to the GS earnings.  At the moment, the Dow futures suggest a gap up open of nearly 450 points.

Economic Calendar

Earnings Calendar

On the hump day earings calendar, we have 27 companies reporting with our second round of big bank reports.  Notable reports include AA, BK, GS, INFY, PNC, SNBR, USB, & UNH.

News and Technical’s

The game is on with 3rd quarter earnings with JPM reporting declining earnings results but, they beat the analyst’s estimates, so the stocks rallied.  I suspect this will continue today as we progress through several significant bank reports this morning.  A strong late-day rally pushed the Dow up 556 points reversing Mondays bearish reversal pattern that failed to follow through.  Interestingly, Gold, Silver, and bonds rallied with the market as the Absolute Breadth Index continues to decline.  The VIX pulled back below its 50-day average but remained elevated, closing the day above 29 handles and suggesting the wild price volatility is far from over.  This morning futures point to a bullish follow-through in anticipation of earnings and a hopeful report from Moderna on a vaccine trial that produced a COVID-19 immune response. 

Thirty-nine states now report rising infection rates with more than 65,000 new cases reported yesterday with more than 900 deaths.  Adding to the tensions with China, the President yesterday signed a bill sanctioning them and ending Hong Kong’s preferential treatment status.  China has, of course, already vowed retaliation but, as of now, has given no details as to what that might entail.  Apple has won in EU courts, saying the company doesn’t have to pay nearly 15 billion in Irish taxes.  Texas approves tax breaks for Tesla if they build the proposed 1.1 billion car plant near Austin.  I suspect other states will soon join the bidding war for the construction.  With less than 4-months to the presidential election, Joe Biden seems to be gaining momentum according to the latest poll.  We can expect some market volatility as the race heats up, and the political rhetoric reaches a fevered pitch over the months ahead.

Trade Wisley,

Doug