The NASDAQ lept higher yesterday, setting new records while the Dow, SP-500, and Russell struggled to find follow-through to break price resistance levels. In a pattern that’s becoming all too familiar of late, the big morning gap struggled to find buyers or sellers as it chopped sideways the majority of the day. This morning with the EU forecasting an 8.3% economic slump and the US states beginning more business shutdowns, it looks as if the big gap this morning will be down trapping those that chased in yesterday.
Asian markets closed mixed but mostly lower overnight. European markets fall on concerning economic data with the DAX, FTSE, and CAC down 1% or more this morning. US Futures in reaction to virus-related business uncertainty suggest a substantial gap down at the open ahead of a light day of earnings and economic reports.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 10-companies fessing up to quarterly earnings. Notable reports include LEVI and PAYX.
News and Technical’s
We have reached nearly 3 million coronavirus cases in the United States, with several states doubling infection rates in just two weeks. Florida is once again closing restaurants, health clubs, and group party venues, and some areas in Texas are reaching hospital capacity. Australia closed interstate borders in an attempt to slow the spread of the pandemic, and the Governor of California asks indoor business to close. With more and more states adding to shutdown orders and mulling future restrictions, it would seem the economic recovery continues to face considerable challenges. As tensions grow with China, the US is conducting war games in the South China Sea and, at the same time, looking at banning social media apps such as TikTok. During the night, the EU cut its economic forecasts for the region and is now projecting an 8.3% decline in the economy this year.
Yesterday’s big morning gap struggled to find follow-through buyers spending most of the day chopping sideways. The DIA, on a last-minute surge at the end of the day, breached the resistance of its 200-day average. Although the SPY tried hard to break the resistance of the early June island reversal pattern, it closed the day, failing to breakthrough. The QQQ lept higher with the tech giants leading the way while the IWM closed the day lower once again, unable to reach its 200- day average. With a light day of earnings and economic news, the market seems to have turned its attention to the impacts of the viral surge that is prompting business shutdowns in several states. As of now, the US futures are pointing to a gap down open that has the potential to create abandoned baby patterns at resistance in the DIA and SPY. With the VIX remaining elevated, expect the wild price volatility to continue today.
With markets around the world surging under bull pressure while at the same time coronavirus infection rates set new records, one has to wonder if the rally is real or if the world is suffering from a major case of denial? I guess we will find out if companies can support these prices with 3rd quarter earnings just around the corner. Set for a big gap up open, the indexes will be testing key moving averages resistance levels as well as the island reversal patterns created in early June. The question for today, will we see follow-through buying after the gap, or will it produce another pop and drop pattern like Friday?
Asian markets closed sharply higher overnight, with the Shanghai index leaping nearly 5.75%. European markets are very bullish this morning with the DAX, FTSE, & CAC all higher by more than 1.5%. US Futures point to a substantial gap up at the open as the bulls push once again push for new record highs in the tech sector.
Economic Calendar
Earnings Calendar
On Monday’s earnings calendar, we have 35 companies stepping up to report quarterly results. However, looking through the list, I’m not finding any of today’s reports as particularly notable.
News and Technical’s
After a holiday, 3-day weekend markets around the world surge higher. With 3rd quarter earnings only a couple weeks away, there seems to be no price too high as market leaders set new records. I can’t decide if this rally is justified or if the entire world is suffering from a major case of denial. Over the weekend, health departments reported increased infection rates in 40-State with some Texas regions reaching their hospital capacity. Florida reported more than 10,000 new infections each day of the long weekend. Lawlessness is also on the rise with more 40 shootings in New York alone that resulted in an 8-year old innocent bystander killed by a stray bullet. Although 1.4 million people filed for unemployment last week, the Employment situation number better than expected rehiring occurred over the previous month. With unemployment, at 11%, the market appears to ultra-confident that the coming earnings season will support current stock prices.
With the market set to open with a huge gap up open, the DIA and IWM will once again attempt to break above their 200-day averages. The QQQ will challenge new record highs, and the SPY will test the resistance fo the island reversal pattern printed in early June. I expect T2122 to reach into the bearish reversal zone at the open, so be careful chasing the open with a fear of missing out. Please make sure there are follow-through buyers rather than the pop and drop pattern like we saw on Friday’s morning gap.
The NASDAQ soars to new record highs, as does the number of coronavirus infections across the country. As business once again close and state rollback reopening plans, the market appears to have no concerns whatsoever, pointing to a substantial gap ahead of the holiday shutdown. Bad news has become good news, and the good news is now seen as excellent news, and no price is apparently too high for the bulls. Today is all about the jobs, then expect volume to drop off quickly as we head into an early market close for the holiday.
Asian markets closed higher across the board even as hundreds of protesters were arrested in Hong Kong under the new security laws. European markets trade sharply higher this morning boosted by vaccine hopes with banks up as much as 4%. Ahead of employment data and jobless claims, the US Future point a gap open even as virus numbers surge to a new daily record high.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have just seven companies reporting results. The only somewhat notable report is that from KFY.
News and Technical’s
As we hit a new daily record high of coronavirus infections and states rollback reopening plans, the US Futures point to new record highs. California has once again closed all indoor operations for about 70% of the States population due to rising numbers. New York has also announced to rollbacks, and Apple said it would close 30 more stores across the country in response. Congress extended the paycheck protection program, and it looks as if Congress is moving forward with another round of direct payments to taxpayers that could be as much as $6000 per household. With MSFT and AMZN leading the way, the QQQ set new record highs yesterday with the DIA and IWM closing the day slightly lower.
Today we get both the Employment Situation number and the weekly Jobless Claims. If the consensus estimates are correct, the rehiring last month is likely a new record since the numbers have been tracked all the way back to 1939. Looking at the market, the millions that remain unemployed and the current round of further state shutdowns don’t seem to matter. Bad news is good news, and good news is excellent news as there appears to be no price too high as stocks continue this historic rally. One has to wonder if the upcoming earnings can support current market prices. Only time will tell. Keep in mind that we have an early market close today, and volume is likely to fall off quickly after the morning reports as traders head out for the 3-day weekend. Have a safe and fantastic 4th of July, everyone!
After a late-day surge, the market closed inking the most robust quarterly rally since 1987 fuled by trillion upon trillion of stimulus and historic central bank operations. However, immediately after the cash close, the futures began selling off and now point to a substantial gap down at the open, taking back most of yesterday’s rally. With a long weekend beckoning traders to extend vacations, look for volumes to decline over the next couple days after the morning reaction to earnings and economic news.
Asian markets closed mixed but mostly higher after June manufacturing activity beat expectations. European markets are decidedly bearish this morning with indexes declining by as much a 1.50%. US Futures point to a gap down open ahead of a big morning of economic data and worries of rising virus infections weigh on the market.
Economic Calendar
Earnings Calendar
On the 1st day of the 3rd quarter, we have 13 companies stepping up to report quarterly results. Notable reports include M, STZ, CPRI, & GIS.
News and Technicals
The last day of the 2nd quarter spent most of the morning session chopping in a narrow range, but in the afternoon, the bulls seized control, pushing the index up into the close. Thanks to the trillion upon trillion in central bank operations and governmental stimulus, we had the most robust quarterly rally since 1987. Interestingly enough, as the market surged higher into the close, the Absolute Breadth Index declined, and the VIX held above a 30 handle. Gold and silver also sharply rallied often considered a safe-haven trade. During testimony to congress, Dr. Fauci, the White-House health advisor, said the coronavirus outbreak is going to be very deturbing and may top 100,000 new cases per day. Yesterday the US reported just over 46,000 new infections and more than 750 further deaths. As the death toll approaches 130,000, Goldman Sachs called for a national mask-wearing requirement in public to save the economy. During the night, the Senate voted to extend the small business coronavirus relief program called the Paycheck Protection Program through August 8th. Also during the night, Hong Kong makes its first arrests just one day after China’s new so-called national security law. The law says that any person that acts to undermine national unification faces punishment up to a lifetime in prison.
Yesterday’s rally pushed the DIA up to test its 500-day moving average, but by the close was unable to muster the energy to break above. The SPY comfortably held above its 200-day while the IWM remained substantially below. The DIA, SPY, and IWM are still within a short-term downtrend while the QQQ continues to dominate the market with MSFT and AAPL doing the majority of the lifting yesterday. Immediately after the cash close yesterday, the futures began to selloff and now point to a significant gap down this morning. With a busy economic calendar, the next 2-days and rising concerns on the impacts of the rising pandemic, anything is possible as we approach the 4th of July market shutdown. Expect volume to begin to decline as traders take off early to extend their vacation time.
The market continued its roller-coaster ride of wild volatility, rising sharply in hopes of more government stimulus on the way as the coronavirus spread to more than 44,000 people yesterday. Several states have once again closed bars and fitness facilities as the WHO warns that the worst is yet to come in the world war against the pandemic. Overnight China defiantly passes the so-called national security law for Hong Kong and threatened retaliation for any actions brought against them. What that means in the weeks and months ahead is anyone’s guess.
Asian markets rallied overnight as their June PMI beat expectations. European markets trade mixed in a whipsaw session as they react to Chinese data and the WHO pandemic warning. US Futures appear to be struggling for the inspiration to follow-through yesterday’s bullishness pointing to a flat open ahead of a big day of Fed speak that includes Jerome Powell.
Economic Calendar
Earnings Calendar
On the Tuesday Earnings Calendar, we have just 15 companies stepping up to report on this last day of the 2nd quarter. Notable reports include FDX, AYI, CAG & SCS.
Technically Speaking
The market overlooked rising coronavirus and rallied sharply, mainly on the hope there will be more governmental stimulus on the way. Yesterday, we saw an increase of 44,734 new cases of the virus reported in the US. According to the reports, China has discovered a new strain of the coronavirus, and the WHO warns the worst is yet to come. Shell has announced that it will take a massive write-down up to 22 billion as a result of COVID impacts on the industry. Wells Fargo said it would cut dividends after the Fed stress tests, but JPMorgan, Citi, and Goldman stated they would matain dividends in the coming quarter. During the night, China passed what they called a Hong Kong national security law for Hong Kong that has drawn criticism from around the world. When asked about possible repercussions, Chinese officials defiantly stated they would retaliate against any actions or sanctions brought against them. Boeing had its first successful test flight of the 737 Max yesterday as they pursue recertification of the aircraft after the deadly crashes that grounded them more than a year ago.
Although the Dow rose 580 points by the close yesterday holding on to its 50-day average, the index continues to remain in a short-term downtrend. The SPY printed and Piercing Candle Pattern holding its 200-day average while the IWM did much better breaking the high of Friday’s big selloff. As wonderful as that may seem on the surface, the SPY and IWM technically remain in short-term downtrends with the Absolute Breadth Index pulling back yesterday. A big part of yesterday’s rally likely was nothing more than short-covering. On the last trading day of the quarter, anything is possible, but as of now, the futures seem to be struggling for the inspiration to follow-through on the bullishness for a second day, suggesting a flat open.
With the strong selling on Friday, the DIA tested and held its 50-day moving average by the close of the day with the SPY, IWM, and QQQ remaining safely above this crucial psychological support. As we head into a short week of trading, the VIX remains quite elevated, so expect the wild price volatility to continue, and the pandemic surge raises reopening uncertainty.
Asian markets closed down overnight with the NIKKEI dropping more than 2 % as the coronavirus death toll tops 500,000 worldwide. However, the European markets are cautiously bullish this morning seeing modest gains this morning. US futures opened trading lower but have recovered and pointed to a mixed but modestly optimistic open amid all the economic uncertainty.
Economic Calendar
Earnings Calendar
With just 2-days to the end of the 2nd quarter according to the earnings calendar, we have about 50 companies reporting, but only the report from MU is particularly notable today.
Technically Speaking
As the summer temperatures rise, so does the spread of the coronavirus hitting new record highs. Several states are rolling back reopening plans and closing large gathering places such as many of the beaches in Florida. Although testing has only gone up by 7 to 10 percent, Arizona has seen an infection surge of 260% in June. Chesapeake Energy has filed for bankruptcy, and Boeing is laying off 12,000 people as the virus continues to impact the airline industry. Health and Human Services Secretary Alex Azar warned on Sunday that the time is running our for the US to curb the surge of the pandemic across the country. Speaker of the House, Nancy Pelosi, asked health officials to make it mandate the wearing of masks across the country.
The heavy selling on Friday tested the daily 50-moving average of the DIA as support, and by the close, the bull managed to hold onto this crucial psychological support. Financial stocks suffered as well on Friday after the Fed required the backs to freeze buyback programs and cap dividends. Futures opened Sunday evening gapping down but have recovered to pointing to a modest gap up open, Although putting on a brave face for today’s open remember the DIA, SPY, and IWM remain in a short-term downtrend and with the VIX elevated expect very volatile price action for the short trading week ahead.
Texas and Florida delay reopening plans, and the number of COVID cases surge to new records. Banks had a good day yesterday with a discussion of suspending provisions of Volker Rule, but after the close, the Fed put restrictions on banks after conducting stress tests. Disney announced an indefinite closure of its theme parks, and Apple said it will close more stores in response to the rising infection rates. As we slide into the weekend, the continued uncertainty is very visible in the elevated VIX.
Asian markets closed the week mixed but mostly higher with only Hong Kong closing in the red. This morning European markets are bullish with their indexes up more than 1.50%. After a choppy overnight session, US Futures point to a flat to open, heading into the uncertainty of the weekend.
Economic Calendar
Earnings Calendar
As we wind down 2nd quarter earnings, we have just 14 companies reporting on this Friday. Notable reports include JRJC and FIZZ.
Technically Speaking
Another choppy day as the market dealt with virus concerns and unemployment coming in stronger than expected. During the day, both Texas and Florida suspended their reopening plans after hitting new record-high infection rates. Across the nation, new cases topped 40,000 yesterday with the death toll reaching 125,000. Disney announced they would suspend the reopening of their amusement parks indefinitely, and Apple will close more stores in response to the rising infection rates. Banks rose sharply yesterday on the news that the government may ease or remove some of the provisions of the Volker Rule. After stress testing, the banks are now required to cap dividend payments as well as end all stock repurchase programs until September. Nike reported that sales declined 38% last quarter, and the stock is indicated to open only slightly lower this morning.
We had a volatile overnight future as the market responded to the bank stress test results, but in the standard fashion of late, they have rebounded this morning pointing to flat to slightly bullish open. It seems that any and all negative economic news only inspires the bulls to buy. Perhaps, we are experiencing the end of quarter window dressing, but with the QQQ having rallied 50% from the March lows, I wonder how much longer this ravenous bull run can continue. The DIA, SPY, and IWM continue to cling to their longer-term up-trends, but the current short-term downtrend and the elevated VIX indicates and underlying stress that could bring the bears out of hiding next quarter. Of course, all of this could change if the Fed puts their printing pressed into overdrive, and Congress offers up more stimulus. Consider your risk carefully as we head into the weekend.
A spike in COVID-19 numbers and the prospect of a Biden presidency brought out the bears yesterday as we wind down what has proved to be a remarkable 2nd quarter. Some huge uncertainties lye ahead as several southern states reports new record infection levels. AAPL announced it is closing several more stores in response as Texas nears COVID related ICU capacity. Facing a big day of economic data, the futures point to a modestly lower open as the VIX looks to another day of significant volatility.
Asian markets closed mixed but mostly lower overnight as the IMF slashes economic forecasts. European markets trade mixed but lean slightly bullish this morning as Wirecard files for bankruptcy. Here in the US, with a big data dump, futures point to declines, but I would not expect the bulls to give up easily. Prepare for the considerable price volatility to continue.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have the largest day this week, with 26 companies stepping up to report. Notable reports include DRI, FDS, MKC, RAD & NKE.
Technically Speaking
The bears made a big appearance yesterday with the Dow selling-off 710 points in reaction to rising coronavirus cases. Yesterday they reported more than 35,000, but this morning CNBC is reporting the daily spike above 45,000, which would be a new single-day record. According to reports, infection rates have increased by 30%, while testing has only increased by 7%. New York and several other states are requiring travelers from hot spot states to quarantine for 14 days, and Europe is considering restricting travel from the US. AAPL announce it is closing more stores in Texas as the state nears ICU capacity. New polls indicate that Joe Biden has taken a big lead in the Presidential race, and some are suggesting that the market could see more weakness ahead as a result. A resurgence of the pandemic, widespread public unrest, and a presidential election is likely to keep the market on edge and volatility high for the next several months making 2020 one for the record books.
The DIA, SPY, and IWM created a lower high on Tuesday and lower low yesterday, leaving behind bearish evening star patterns. The QQQ also printed and evening star pattern but closed the day above recent support and continues to remain above its trend. I don’t expect the bulls to give up easily, and unless we see enough selling in the QQQ to break the uptrend, the big five tech giants can continue to hold up the indexes. If significant profit-taking begins in AAPL, MSFT, GOOG, FB & AMZN as the 2nd quarter winds down, we could face a very different market in the weeks and months ahead. Facing a big day of economic data and rising pandemic uncertainty, anything is possible, and we should plan for substantial volatility as we head toward the weekend.
A new record in the QQQ on the morning gap, but all the indexes struggled to find follow-through buyers with declining breadth as prices failed to break above the bearish engulfing candles left behind last Friday. As the tech sector led rally prints, all-time highs coronavirus infections have spiked 30% over the previous seven days, according to reports. The Whitehouse health advisor warned yesterday day afternoon if this trend continues, a full shutdown of infected states to combat the spread may be required. A disturbing thought considering the fragile condition of businesses and historic unemployment.
Asian market closed mixed but mostly modestly lower overnight. European markets spooked by the rapidly rising virus infections around the world are decidedly bearish this morning seeing red across the board. Ahead of alight day on the earnings and economic calendar, US Futures point to a bearish open and more price volatility ahead.
Economic Calendar
Earnings Calendar
On the Hump Day earnings calendar, we have just 11 companies reporting quarterly results. Somewhat notable reports include BB and WGO.
Technically Speaking
A day after the Nasdaq gapped up to notch a new record high, the market struggled to find willing buyers to follow through. By the close, the DIA and IWM failed to rise above the Friday selloff candle while remaining under their 200-day average. While well above its 200-day average, the SPY tried hard to break above Friday’s bearish engulfing candle, but by the end of trading Tuesday, the bulls failed to breakthrough. The QQQ left behind a possible reversal pattern with a shooting star that could become an abandoned baby reversal if the index gaps lower at the open. The Absolute Breadth Index continued to show that yesterday’s rally lacked buyer’s momentum with the big internet techs garnering the vast majority of the attention. While the market has chosen to ignore pandemic numbers according to reports, the number of infections has risen 30% in the last 7-days. The Whitehouse public health adviser suggested yesterday if this trend continues, a total shutdown of an effected state may be required to combat the spread. Let’s hope that does not occur!
Ahead of a light day of earnings and economic reports, the market may be more sensitive to the news cycle that this morning seems to be heavily laden with COVID related stories. Weekly homebuyer mortgage demand slipped slightly in today’s reading but remained 18% higher than last year. As the 2nd quarter winds down after achieving a history-making rally, we can expect considerable volatility in the days ahead. A rotation into income securities and safety plays may be underway with a noticeable increase in precious metals. Although it sold off on yesterday’s gap up, the price action in the VIX-X continues to suggest considerable uncertainty closing above 31 as the Tech Sector hit new records. A small but noticeable clue that price action could remain very challenging in the day ahead.
Fueled by just a few tech giants, the market rallied on Monday in a somewhat choppy session even as the Absolute Breadth Index declined. MSFT and AAPl hit new record highs, and the QQQ had a new all-time closing high on Monday as is set to make another new high as the index gaps up this morning. Falling Existing Home Sales and rising COVID infections did nothing to dissuade the bulls from buying.
Asian markets closed in the green across the board in a will evening of trading due to peter Navarro’s comments on the US/China trade deal. European markets are decidedly bullish this morning, with the DAX up more than 2.5%. Ahead of PMI and New Home Sales US Futures point to a substantial gap up open that will likely ink a new record high in the Nasdaq.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just six companies reporting. The only somewhat notable reports today is LZB.
Technically Speaking
Markets rallied yesterday with MSFT and AAPL reaching out to new record highs. According to the WHO we also set a new world record with more than 180,000 new coronavirus infections. In the US, we saw more than 31,000 new infections reported with Multiple US states experiencing rapidly rising hospitalizations. Protests in the park across the street from the White House attempted to pull down the statue of Andrew Jackson, and in Seattle, a protester held district of the Capitol Hill area now has the attention of Govoner due to the growing violence. We also had a very wild night in the futures market. Futures fell sharply after Peter Navarro was reported to have said the China Trade deal was dead. Later Navarro denies saying that stating the agreement isn’t over and the futures quickly recovered. Yesterday, AAPL announced IOS 14 is coming in September and reported their new iPhones and iPads would no longer include INTC chips. INTC is indicated higher this morning, go figure. Existing-Home Sales slumped substantially last month; however, it seems, any and all bad news only inspires the bulls to buy.
On a technical basis, the DIA and IWM remain below there 200-day averages, but it would appear this morning’s gap up will test them as resistance. The SPY will test the high of Friday’s selloff, and the QQQ will set a new record high at the open today. The Absolute Breadth Index declined on Monday as the majority of the index’s rally came in the big tech giants AAPL, AMZN, MSFT, GOOG, FB, and NFLX. Although the VIX-X pulled back yesterday, it remains quite elevated even as the bulls push to new record highs, so stay on your toes as quick reversals and whipsaws are possible. Today will get readings on PMI and New Home sales with a very light day on the earnings front.
