After receiving the worst unemployment number in history, the market chose to focus on the coming 2-trillion stimulus bill extending the bullishness for a 3^rd day.  The rally recovered some important price levels of support, but not the question is, will they hold heading into an uncertain weekend.  With the US now with the highest number of confirmed infections and the 2^nd quarter earnings season just around the corner, there is still a lot of fear in the market.

Asian markets follow the lead of the US rallying to close out the week in the green.  European indexes, however, are red across the board this morning but only down about 2% at the time of this report.  US Futures point to an overnight gap down at the open ahead of personal income and consumer sentiment reports.  Consider your risk carefully as we head into the weekend because anything is possible by Monday morning.

Economic Calendar

Earnings Calendar

We have a light day on the economic calendar with just over 40 companies reporting.  However, the majority are small-cap companies, and I can find no particularly notable reports today.

Top Stories

Hopes are high that the House will move forward with a vote today on the 2-trillion stimulus bill.  There is, however, still a chance that one or more representatives reaching for the spotlight could delay the vote into the weekend.

The US now has the grim title as the highest number of infections that will, too, continue to rise exponentially through the weekend.  As of this morning, 85,625 American infections and more than 1300 have died.

The market shrugged off the record-breaking 3.2 million unemployment number to record the biggest bounce 3-day bounce off in history.  To put this into perspective, unemployment topped out around 780,000 during the 2008 banking crisis.

Technically Speaking

Although the third day of the rally was fantastic, it did little to improve the technicals of the index charts.  The QQQ had the best response once again, recovering its 500-day average.  The SPY broke through resistance at 255, and the Dow recovered it 2018 low.  The question now is, can they hold these important price supports heading into the uncertainty of the weekend.  Hope that passage of the stimulus bill will undoubtedly provide a little help, but the unrelenting bad news of the virus spread will continue to weigh heavily on the minds of investors.  Keep in mind it will be at least another 3-weeks before the relief checks start to reach American bank accounts.  In this market, a lot can happen over the course of just one hour; 3-weeks will feel like a lifetime!

Those that rushed to by at the end of the day yesterday will be punished this morning with a nasty overnight gap down.  As for me, I plan to go into the weekend, essentially flat.  I won’t rule out the possibility of some quick intra-day trades, but for me holding into the weekend is a straight-up gamble that I will avoid.  Be safe, my friends and have a wonderful weekend.

Trade Wisley,

Doug

Our first 2-day rally in weeks was a sweet relief, but today we face a possible history-making increase in joblessness.  Can the hope of the 2 Trillion dollar stimulus bill keep the bulls engaged in the wake of high virus-related unemployment?  We will soon find out at 8:30 AM Eastern this morning.  With the death toll and infections, rising holding positions into the uncertainty weekend will likely be difficult.

Asian markets closed lower across the board, with the NIKKEI falling 4.50%.  European indexes are seeing modest losses this morning, and the US Futures point to a Dow gap down of more than 150 points ahead of readings on GDP and Jobless Claims.  Expect considerable volatility as the market reacts to the first economic data to include the outbreak impacts on business.  It could be a wild day, so buckle up.

Economic Calendar

Earnings Calendar

We have nearly 110 companies fessing up to quarterly results on Thursday.  Notable reports include CSIQ, FDS, GME, JEF, KBH, LULU, MOV, SIG & RH.

Top Stories

Now the Senate has passed the stimulus bill it’s now time for the House to get the political spotlight.  According to reports, they plan to begin their work on Friday, and the political rhetoric is already raising concerns about how long they might delay getting the bill to the President.

The coronavirus death toll jumped over 1000 during the night with confirmed cases quickly approaching 70,000.  The New York health care system is already in a crisis and seems to be on the same escalation curve as Italy.

The entire market is sitting on the edge of its seat this morning, waiting for a reading on the jobless numbers at 8:30 AM eastern.  Consensus Estimates expects more than 700,000, but some are suggesting the number could be as high as 3.5 million.  Needless to say, the outbreak impacts on employment are significant, and it will be interesting to see if the warm and fuzzy glow of the stimulus bill will keep the bulls engaged.

Technically Speaking

Yesterday we witnessed the first day of bullish follow-through in several weeks.   At the close of trading, the DIW, SPT, and IWM managed to hold on to some gains as traders took profits ahead of the Jobless numbers.  Sadly the QQQ closed lower on the day and failed to hold it’s 500-day average.  The DIA managed to test the 2018 lows, but the resistance proved too strong backing way sharply after the test. 

Having taken some very nice gains yesterday, I now think the risks are just way too high ahead of the jobless numbers and heading into the week.  The outbreak numbers have begun to rise exponentially, and I suspect it will weigh heavily on the minds of investors.  If anything, the path forward appears even more uncertain with such a long road ahead in a battle with an enemy we can’t see. 

Trade Wisely,

Doug

Congress finally came to an agreement, and the stimulus is on the way!  The question is, will it bring stability to the market?  In a very wild overnight session, the Dow futures rallied 500 points after the news of the agreement.  Unfortunately, as I write this report, the futures have been unable to hold the news-driven gains.  With unemployment numbers due out tomorrow and New York seeing a doubling of confirmed cases every 3-days one has to wonder if there is any amount of money that can buy our way out of this terrible situation.

Asian markets closed positive across the board last night, with the Nikkei lifting over 8%.  Sadly, European markets are not feeling the love form all the stimulus spending with mixed results and the DAX down 2.25%.  Here in the US, the futures markets have seen a very turbulent evening.  They have been bullish and then swung quickly bearish, where it might be by the open is anyone’s guess!  About the only thing, I think we can count if very volatile price action in the day ahead.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have over 50 companies reporting results.  Looking through the list PAYX is only notable I can come with this morning. 

Top Stories

At about 1:30 AM the Congress cane to an agreement on the stimulus plan.  The question now, will the market be able to rally a second day on the news?  Only time will tell.

They are reaching a critical situation in New York City now with more than 25,000 cases, as the cases double every three days overwhelming the healthcare system.  The President said yesterday that he would like the country to get back to work by Easter, which is just three weeks away.  However, health officials and many of the state Governors disagree, saying the risk of spread is too high. 

As business around the country continues to shut down, the next focus may be the unemployment numbers that are due out on Thursday morning.  Consensus estimates suggest more than 700,000 will be out of work, and the numbers are likely to rise in the coming weeks.

Technically Speaking

I was so nice to see a little relief from the selling yesterday, but now the question is, can it follow-though?  In the middle of the night, Congress finally came to an agreement, and the President said he would sign the stimulus bill immediately after its passage.  Futures rally nearly 500 points on the news but have already faded into the red in a very volatile overnight session.  With 2.5 trillion buy us some stability?  One would hope so because the Trillions that FOMC has spent has done nothing to curb the historic market collapse. 

Tomorrow we will get a reading on unemployment, and according to estimates, it will be shocking.  Of course, direct payments will be helpful to those out of work, and the company bailouts with the support of the medical system is much needed.  However, with all this spending translate into stock buying as the virus spreads and the path forward remains uncertain? I’ve said it before, and I will repeat once more that it seems unlikely we can buy our way out of a pandemic that continues to spread across our country.

Trade Wisely,

Doug

With Congress still trying to get it to act together on a massive stimulus bill, the US Futures point to a welcome rally.   Though it might prove to be only a monetary relief with quickly rising infection numbers and a death toll sharply rising, any reprieve in the selling that created the fastest 30% decline in history is a welcome relief.  We still face a busy week of economic reports with impacts of the outbreak starting to trickle into the numbers.  Expect price volatility to continue with lots of news-driven whipsaws and reversals as the market tries to recover.

Asian markets closed in the green across the board with the Nikkei surging more than 7% even after the postponement of the Summer Games.  European markets are also in the mood to rally this morning with gains in the DAX over 6% in reaction to the Fed Stimulus.  Ahead of earnings from NKE, CCL, and economic reports that include PPI & New Home Sales, US Futures point to a huge gap up at the open.  If Congress can pass the stimulus, expect another surge of short-term optimism that could extend the relief rally.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 72 companies stepping up to report results.  Notable reports include NKE, CCL, CONN, INFO, & SCS.

Top Stories

In the last six weeks, the Dow has lost about 11,000 points, but this morning we have a moment of relief with the US Futures pointing to a rally of more than 900 points.  We are still waiting on Congress to decide on a stimulus package that will total more than 2-trillion dollars.  The unprecedented move by the FOMC that through the doors open for unlimited asset buying was only able to inspire the bulls for a brief moment yesterday, ultimately closing lower on the day.

With pressure rising, the Olympic Committee has decided to postpone the start of the Summer Games for the first time in history.  In wartime, the games Olympic’s experienced full cancellation 3-times but never a postponement.   Just another item for the history books alongside the fastest 30% market decline ever.  The President said in comments yesterday that he expects a quick recovery for the market. However, reports suggest he like the rest of us is concerned the recovery will be a slow process due to the company level damage and unemployment. 

Technically Speaking

With the futures pointing to a substantial gap up and the hope that Congress might get its act together passing the massive stimulus bill, we could finally see a little relief from the selling.  Unfortunately, with infections approaching 45,000 and more than 525 reported deaths here in the US, it’s challenging to be in a celebratory mood.  The QQQ has the best chance of recovering its 500-day average, but even with the big up expected this morning, the bulls will have to deal with if as resistance. 

We will get the latest reading on the PPI and New Home Sales, both of which expect declines according to consensus estimates.  As the coronavirus impacts trickle into the earnings and economic reports, we could see volatile price swings that traders will have to consider when holding positions overnight.  I suspect the road to recovery will be a very bumpy one with dangerous whipsaws and flat our reversals to challenge trader skills. Don’t forget that consistent base hits win games, not the exciting home runs.  When the recovery begins, don’t allow greed to prevent you from taking those base hit trade profits.  To be a consistently profitable trader, we have to get comfortable with taking profits consistently.!

Trade Wisely,

Doug

Futures had a bit of a temper tantrum last night after the Senate failed to pass the massive stimulus bill.  We can expect significant price sensitivity through-out the day as they legislators scramble to resolve issues and vote again later today.  A passage could trigger a quick rally, but a failure could really bring out the bears, so keep an eye to the news as they wrangle party politics.

Asian markets closed mixed but mostly lower as Hong Kong and Australia saw heavy selling during the night.  European markets continue to tumble with the FTSE down another 3.5% as the coronavirus continues to ravage the euro block.  With tremendous overnight volatility, US futures point to a substantial gap lower this morning that will test the lows of last weeks as support.  Hang on for another wild day of price action.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have over 80 companies stepping up to report quarterly results today.  However, after looking through the list, I don’t see any particularly notable or market-moving reports.

Top Stories

After another volatile evening where the futures briefly dropped to limit down, they point to a substantial gap down this morning.  The massive stimulus bill failed to pass last night but will try once again today.  If passed or fails to pass, it’s likely to be a market-moving event, so keep an eye to the news as we progress through the day waiting on the vote.  

The Olympic committee is under pressure to postpone or cancel the Summer games hosted in Japan due to the virus concerns.  Canada and Australia are the first countries to announce they will not send athletes should the games move forward as scheduled.

Last evening the President activated the National Guard in New York, Californa, and Washington to expedite the moving of medical supplies and equipment as their outbreaks continue to grow at an exceptional rate. 

Technically Speaking

The QQQ had the best chance of recovering the 500-day average last week, but on Friday left behind a very disappointing bearish engulfing candle.  This morning the four major indexes are set to open at or below recent market lows.  Although most charts paint a pretty grim picture, there was an effort by the bulls to defend the week’s lows.  In a surprise and very bold move, Goldman upgrades BA suggesting they have enough cash to get through the crisis and that air travel will return following the crisis.  I assume the Goldman is also anticipating that the government will swoop in with a considerable bailout for the company in an attempt to prevent massive layoffs.

We can continue to expect extreme price volatility and sensitivity to the congressional vote on the stimulus bill.  I would not rule out the possibility of a quick and substantial rally should the bill pass.  However, another failure to pass could easily trigger another sharp selloff that could easily trip circuit breakers.  Keep in mind no matter what happens, holding positions overnight will remain very dangerous due to the overnight swings.  I think a V-bottom recovery is unlikely because we are still weeks if not months away from seeing an improvement in the war against the outbreak.

Trade Wisely,

Doug

A ray of sunshine begins the market day with the first bullish follow-through open setting up this morning. It’s been nearly 2-weeks since we have seen a positive close followed by an optimistic open the next.  That said, expect the wild price volatility to continue as infections here in the US begin to spike heading into another uncertain weekend. 

Asian markets closed mixed but mostly higher as China holds steady on its price rates.  European markets are green across the board this morning, reacting to the massive government stimulus efforts.  The US futures point a positive open ahead of economic and earnings data but expect the price action to remain very challenging.

Economic Calendar

Earnings Calendar

On the Friday economic calendar, we have 59 companies reporting.  Looking through the list about the only notable stock I can find today is HIIB.

Top Stories

After another turbulent evening where the US Futures traded between 350 down and 900 up currently points to positive open of more than 700 points.  However, with such volatility in price, anything is possible by the open. 

With virus infections beginning to rise rapidly, the California Governor ordered that all residents stay home and inside.  The first state to issue such an extreme lockdown order.  Italy now has the distinction of the largest death toll surpassing China as the country calls out the military to move coffins overwhelming the countries cemetery system.  Here in the US, infection estimates could reach more than 30,000 by next week.

The Senate has proposed a massive spending bill sending direct payments to US citizens of $1200 per adult and $500 per child, including billions and billions for company bailouts.  I doubt this will be the last of the backstop measures that will be required to stabilize the economy. 

Technically Speaking

Although we saw more than a 1200 point swing the in Dow yesterday, it was nice to see a positive close.  As of now, it looks as if we could get our first bullish follow-through open that we have seen in 2 weeks of massive overnight reversals.  Crossing my fingers and hoping it will hold at least to the open, the QQQ could recover its 500-day moving average.  The technical damage in the charts is so extreme that even a hold of this week’s lows could lift spirits as we head into another uncertain weekend.

Although there are some fantastic values in stock prices, buying them in the faces of such volatility and extreme uncertainty is not for the faint of heart.  With the VIX holding above a 70 handle options are punishingly expensive, and the slippage in the bid/ask spreads make then nearly impossible to trade except for very quick and very dangerous day-trades.  Let’s all hope for the best but prepare for the wild price action to continue in the coming weeks as impacts of the outbreak continue to expand.  Protect your capital, take care of your family, and support your communities as best you can through these troubling times.

Trade Wisely,

Doug

I had a computer problem this morning, so I apologize, but I will have to keep the blog short this morning.  After another wild night of price action in the futures market, it would appear sellers still have the upper hand this morning.  Even the so-call safe-haven securities sold off yesterday in a rush to raise cash and avoid additional market risk.  During the night, the ECB unveiled a massive stimulus plan of more than 800 billion with the President signed the first stimulus package for the US almost immediately after the Senate passage.  They are now going to work on the second package that could top 1.2 trillion with direct payments to US citizens.  Monday, tradings pits will close, and we will move to a fully electronically traded market.  It’s unclear how that might affect price action. 

With infections numbers continuing to grow, we could easily see more than 10,000 cases by the weekend, which would suggest and exceptional expansion is likely to occur over the next 2-weeks.  I know I sound like a broken record but Protect Your Capital because the uncertainty going forward is expected to get much worse before it gets better.  More importantly, protect yourself and your family.  The next few weeks could be difficult, but I’m confident better days lie ahead.

Economic Calendar

Earnings Calendar

We have more than 120 companies reporting earnings today, but in the current situation, it’s unlikely many will notice.  Notable reports include DRI, LEN, CAN, CTSAS & OLLI.

Trade Wisely,

Doug

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

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

Economic Calendar

Earnings Calendar

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

Top Stories

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

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

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

Technically Speaking

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

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

Trade Wisely,

Doug

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

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

Economic Calendar

Earnings Calendar

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

Top Stories

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

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

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

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

Technically Speaking

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

Trade Wisely,

Doug

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

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

Economic Calendar

Earnings Calendar

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

Top Stories

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

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

Technically Speaking

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

Trade Wisely,

Doug