Friday’s close saw a little selling coming into the market with
the VIX bouncing up 6% by the close, but overall, the index trends remain bullish. Heading into another mid-week holiday with a
nasty winter storm spreading across the east coast low volume algo-driven chop
could be the bulk of price action after the opening rush. Trade and Housing numbers could provide some short-lived
inspiration, but our time may be better spent reviewing this year’s results and
preparing goals & plans for 2020.
Happy New Year
Asian markets closed the day mixed but mostly higher waiting
on November Hong Kong data. European markets
this morning are trading lower across the board but on light holiday volumes. US Futures suggest a flat to ever so slightly
bullish open ahead of the International Trade in Goods and Pending Home Sales November
results.
On the Calendar
On the 2nd to last trading day of 2019, the Earnings
Calendar indicates there are just eight companies reporting today but seven of
the report are unconfirmed and I don’t see a single notable report among them.
Action Plan
A New Beginning with Right Way Options in 2020
With a nasty winter storm spreading across the east coast
and another mid-week holiday facing the market trading volume is likely to diminish
quickly after the morning rush. We have little
to nothing on the earnings calendar for the market to react to, so it will likely
look to the economic calendar for some inspiration. Consensus expects a widening of the gap in November’s
reading on International Trade in Goods number at 8:30 AM Eastern and an
increase in the 10:00 AM Pending Home Sales report. Of course, news events could temporarily fire
up some price action, but most likely, the next couple of days will see a lot
of algo-driven chop.
There is always the possibility of a little end of month
window dressing but there is also the chance we could see some end of year
profit-taking. Last Friday saw a slight
increase in the VIX, but so far this morning the US Futures are suggesting a
flat to ever so slightly bullish open.
Rather than trading, the next few days may be better spent reviewing
this year’s results looking for improvements to trading rules and plans. Perhaps, start by setting goals for 2020 and building
watchlists so that you can jump-start the New Year as a better, more prepared
trader.
Although Santa has returned to the North Pole and his jolly
Ho, Ho, Ho, has faded into memory, the big guys’ influence continues as the strong
retail numbers continue to inspire the bulls.
Lead by AMZN’s record-breaking sales results, there were new record
highs achieved in the DIA, SPY and QQQ on relatively low holiday volume. As we head into the weekend and the New Year,
the bulls seem to have plenty of momentum on their side, but be careful not to become
too complacent.
The count down has begun.
Asian markets finished the week mixed but mostly lower. European markets this morning see only green following
the optimistic lead of Wall Street. US
Futures point to a gap up open on this last Friday of 2019, fulled by momentum
with very little on the earnings or economic calendar to provide inspiration.
On the Calendar
On the Earnings Calendar, we have 18 companies reporting but
none are particularly notable.
Action Plan
Strong holiday retail sales continued to inspire markets
higher yesterday as it seems Santa’s influence remains strong this year. Once again, the DIA, SPY and QQQ reached out
for new record highs yesterday on low holiday volume. There is no doubt this has been an amazing
quarter to top off a truly remarkable decade for the market. As we slide into the weekend with just three
trading days left in 2019, the momentum is certainly with the bulls and there are
no indications in the price action they are ready to stop just yet.
Finish Strong!
However, we all know that what goes up must eventually come
down, so we must not get complacent and be ready to act if and when the bears
decide to reassert themselves. Futures
this morning point currently point to a mixed open with the Dow suggesting a
substantial gap up at the open. Gap up
opens at new market highs make me watchful of the dreaded pop and drop possibility
so be careful not to chase the open, wait to see if there are buyers that
follow-through. With such a strong trend
and momentum, follow-through may not be much of a wait even though there will
be very little inspiration in the earnings and economic calendar today.
Santa always seems to have some influence over the market during
this time of year but this year we have experienced an exceptional Santa Claus rally. A better than expected quarter of earnings, a
dovish FOMC, strong employment, and the Phase One tariff relief has made it pretty
easy for the jolly old man and reindeer to pull out record highs day after
day. With China now in the news
following through on tariffs cuts, the bullish trend shows no clues of stopping
just yet.
An RWO Membership is a great last minute Gift!
Asian markets closed mixed but with very modest gains and losses overall. European markets are trading mixed and mostly flat as traders seem to be taking profits and cutting risks heading into the holiday. US Futures point to modest gains this morning ahead of Durable Goods and New Home Sales numbers. After the morning rush, it would not be a surprise to light and choppy price action as traders head out for holiday plans. I would not rule out the possibility of some profit-taking at some point in the day.
On the Calendar
On the Earnings Calendar, we have just 13 companies
reporting on Monday. Ten scheduled on Tuesday
and with the market closed for Christmas on Wednesday, there will be no earnings
reports. Of the companies reporting, their none that are particularly notable the
entire week!
Action Plan
Santa’s Coming to Town!
With Santa’s reindeer pulling hard, the markets continue to rally
setting new records nearly every day. News
that China is cutting tariffs as part of the Phase One trade deal may allow
this Santa rally to continue on this eve of Christmas Eve. Today may be the best day of volume this week,
but traders should carefully consider the risks of the typical very low volume
that could easily continue right into the New Year. I would not be too surprised to see volumes
drop quickly after the morning rush of activity as traders head for their
holiday plans.
With nothing much to react to the earnings calendar, the market
will likely turn to the economic reports to find some inspiration. Keep an and eye on the Durable Goods report
at 8:30 AM Eastern and the New Home Sales numbers at 10:00 AM. As a reminder, Right Way Options trading room
will be open Tuesday and Thursday for chat only; there will not be a moderator. Of course, on Christmas day, the room is
closed. As a result, there will be no morning blog
post or Morning Market Prep Video until Friday.
I wish you and your family a very Merry Christmas!
Markets ignore impeachment of the President and power higher
once again, setting new record highs. Santa
Claus has done well this year! Now the
question on trader’s minds is, can this rally continue right into the weekend
or will there be some profit-taking as trade reduce risk ahead of the
holiday. With a light earnings calendar,
the market will likely look to the big reports on the economic calendar for inspiration. As of now, the bulls are solidly in control
of the bullish trends, and the bears seem to no willingness to fight back as
the VIX continues to decline.
Membership is a great Gift!
Overnight Asian markets closed the week mostly lower as
Japan’s automakers fall after the US House passed the North American trade
agreement. European markets see only
green this morning as the rally continues after the Phase 1 trade deal lifted
spirits. Here in the US, the Futures
currently point to a flat slightly bullishly leaning open ahead of GDP, Personal
Income and Outlays, & Consumer Sentiment reports.
On the Calendar
On the Friday Earnings Calendar, we have just 14 companies fessing
up to their results. Notable reports,
BB, CCL, & KMX.
Action Plan
Markets defied the Presidential impeachment by the House
rallying to new record highs confident that the Senate will respond with an
acquittal. With the mid-week holidays
just around the corner, Santa has delivered the market a very nice rally without
the wild volatility. Perhaps this
bullishness can continue right on through the new year, but being a little more
conservative, I’m likely to go to the bank today, lowering my risk into the
weekend. Don’t get me wrong; there is
nothing in the charts at this point that suggests bearishness but anything can
happen over the weekend and I’m happy with a bird in the hand.
Five Golden Rings!
With a relatively light day on the earnings calendar, I
would expect the market to look to the economic reports of GDP, Personal Income
and Outlays, & Consumer Sentiment to find inspiration today. Consensus estimates suggest the reports will remain
strong so a surprise reading could upset the apple cart, so as always, stay focused
on price action for clues. If you’re
traveling this weekend to join family and friends to celebrate Christmas, I
wish you all safe travels and a Very Merry Christmas!
You can’t make this stuff up! While the market consolidates at record highs,
the House votes to impeach the president while he takes the stage at a packed
out campaign rally. Thus far, the market
seems to have taken the vote in stride as the bullish trend remains intact. With several earnings and economic reports this
morning, perhaps the market can find some inspiration to break out of the
consolidation that began after the Monday morning rally. However, with the Holiday’s just around the
corner volume is likely to remain light after the morning burst of energy.
Asian markets closed mixed but mostly lower overnight, with
the central bank holding rates steady. European
indexes trade mixed but slightly lower this morning after the Bank of England announces
no rate changes. US Futures have bounced
around the flat-line this morning with an ever so slight bullish lean ahead of
an economic calendar data dump.
On the Calendar
On the Thursday Earnings Calendar, we have our biggest day this
week, with 26 companies reporting. Among
the notable reports are RAD, ACN, CAG, DRI, SAFM, FDS & NKE.
Action Plan
As expected, the market wandered sideways in consolidation, waiting
for some inspiration. During the evening,
the full House voted to impeach President Trump. The tally showed that not one of the President’s
party voted in favor of the impeachment with just a few from the opposing party
not voting to impeach. So far, the
overall market has seen no reaction to the vote. Overall the bullish trends remain intact and
the bulls have the upper hand although there was a tiny hint fear with the VIX
rising ever so slightly at the close yesterday.
After the bell yesterday MU reported better than expected
earnings lifting the stock and this morning, we have a few reports that may
help the market find some inspiration.
However, it’s more likey it will be the economic reports, Jobless
Claims, Philly Fed Survey, & Existing Home Sales that will fuel the bulls
or bears this morning. With the Holiday’s
rapidly approaching, don’t be too surprised if a morning burst of energy quickly
fades into light and choppy price action.
Consolidate Word Combining Companies Consolidation Organization
The trends remain bullish but since Monday afternoon, the market
seems very comfortable with the price level has slipped into a choppy
consolidation. With the VIX registering
little to no fear and light earnings and economic calendars, we may see much of
the same today. News on Brexit could
create some volatility. Although the market has largely ignored the impeachment
drama, there is the outside possibility of a market reaction once the official
vote occurs later today.
An RWO Membership is a Great Gift idea!
Asian markets closed mixed overnight as the monitored Brexit developments. European indexes are trading mixed and cautious on the revived fears of a no Brexit deal. US Futures this morning hover around the flat-line, looking for some inspiration that may not occur until the bigger economic reports scheduled on Thursday and Friday.
On the Calendar
On the Hump Day Earnings Calendar, we have 15 companies stepping
up to quarterly results. Notable reports
today include MU, PAYX & GIS.
Action Plan
Today the House is likely to vote to impeach the president with
votes falling across party lines. Thus
far, the political has been little more than a distraction but we should not
rule out the possibility of price reaction after the vote. It may or may not occur but it’s better to prepare
than being caught flat-footed in the heat of the moment. Brexit is now back in the news as the Prime
Minister risks a No Deal exit from the Euro block by the end of the year. After the bell yesterday, FDX missed on
earnings and guided lower as the bad blood with AMZN continues to grow.
With a light day of earnings reports and only the Petroleum
Status number to react to on the Economic Calendar bulls and bears my find it
difficult to find inspiration. I would
not be surprised to see light choppy price action continuing the consolidation
that began Monday afternoon. That said,
the trends remain bullish, and with the VIX showing little to no fear the bears
seem unable to mount much of an attack. In
this environment, stocks with momentum can continue to higher or lower but as always
keep an eye on support and resistance levels for profit opportunities.
In a display of force, the bulls rushed into the morning
session seeming buying with both hands quickly pushing the Dow up 200
points. However, about an hour into the
day, a switch flipped and, buying fatigue seemed to settle over the market giving
back half of the Dow gains by the close.
Overall breadth was strong as stock all over the market reached out to
new 52 week highs and inking new record index highs. With a light day on the earnings calendar this
morning, perhaps the Housing numbers can provide some inspiration.
The Gift of Membership!
Asian markets closed green across the board last night but
European markets are trading modestly in the red this morning after their
record-breaking rally yesterday. US Futures traded in the red most of the night,
and this morning continues to suggest a modestly bearish open ahead of earnings
and economic reports.
On the Calendar
On the Tuesday Earnings Calendar, we have 17 companies
fessing up to quarterly results. Notable
reports include CTAS, FDX, JBl & NAV.
Action Plan
11 Pipers Piping
In the morning session yesterday it seemed traders could not
buy stocks fast enough as the Dow surged more than 200 with good overall breadth. Then suddenly it seemed we hit a point of
buyer exhaustion and the rest of the day the market drifted sideways and south giving
up 100 of the Dow points previously gained.
The strong breadth would suggest there is more bullishness to come but
price action itself suggests a little caution with the Dow having left behind a
shooting star pattern while the IWM appears stalled at price resistance. The QQQ remained strong through the close,
but the SPY printed a hanging man suggesting a little caution is warranted.
Perhaps we can find some inspiration in the Housing Starts
number at 8:30 AM which according to consensus estimates, should remain strong. Also, keep an eye on the Industrial Production
and JOLTS reports. Futures trading in
the red most of the night and at the time of writing this report still suggest
a modestly lower open, but that could easily change based on earnings and
economic reports. Although the price
action is giving us contradictory signals, the overall index trend remains bullish,
and thus far, the bears don’t seem to have sharp teeth.
With a partial trade deal, no new tariffs, and the FOMC
behind us, the market breathed a sigh of relief, setting new records in the DIA,
SPY and QQQ. Now the question is, has
the market already priced in this good news, or will the bulls continue to find
inspiration allow for a Santa Clause rally into the New Year? Although the full House is preparing to vote
on the presidential impeachment, it has thus far only served as a distraction
rather than impacting this tenaciously bullish run. As of now, the bulls remain in control, and the
index trends continue to point higher. As
always, stay focus on price action watching for clues of change.
Give the Gift of Membership!
Overnight Asian markets closed mixed but mostly lower even
amid better-than-expected industrial output.
Across the pond, the Stoxx 600 hits new record highs in response to the US/China
deal as European indexes see only green this morning. Not to be outdone, the US Futures point to modest
gains at the open ahead of several economic reports with PMI numbers the most potentially
market-moving.
On the Calendar
On today’s Earnings Calendar, we have 22 companies reporting
quarterly results, but there are no particularly notable reports.
Action Plan
The nine ladies are dancing!
Friday was a day of wild volatility as the market reacted to
the US/China trade news. Removing the
December tariffs proved to be a big relief to the market but as we learn about
what’s in the trade deal, it will be interesting to see how the market responds. Has the deal already ben priced in, or will it
continue to inspire the bulls? One thing
for certain with new record highs printed in the DIA, SPY and QQQ on Friday the
trend is up and the bulls at this point remain in control.
With just nine days until Christmas, trade deal, tariffs
& FOMC behind us, the stage may be set for a Santa rally taking us right
into the New Year. One possible stumbling
block is the impeachment process that may serve as a distraction but, the market to this point has had little concern
as the political drama heads to the full House for a vote. As I write this note, the Futures point to bullish
open ahead of manufacturing, PMI, & housing numbers. Be careful chasing the morning gap by waiting
to see if buyers follow-through to avoid the possibility of a pop and drop bull
trap.
What a difference a day makes! After learning the US and China have reached a tentative that removes the looming tariff overhang, the bulls easily pushed the DIA, SPY, and QQQ to new record highs. Futures this morning seem quite confident that the President will accept the Phase 1 agreement removing the weekend stumbling block and clearing a path for a possible Santa Clause into the new year. The huge victory for Boris Johnson in the UK sets the stage for Brexit to occur, and the Sterling is soaring as a result. After a long day debate, the House committee is likely to vote on impeachment today but with the trade news it will likely be a non-event for the market.
Give the Gift of Membership!
Overnight, Asian markets rallied as much as 2%, with the
pending weight of new tariffs now lifted.
European markets are also in rally mode this morning in reaction to the
trade deal and the history-making UK election results. US Futures point to a substantial gap up open
that well set new records for the second time this week. Remember, gaps are gifts so consider taking
some profits as we head into the weekend.
On the Calendar
On the Friday Earnings Calendar, we have only 11 companies
reporting results and there are no particularly notable events today.
Action Plan
Sing the 12 Days of Christmas
What a difference a day makes. Yesterday we learned the US and China reached
a tentative agreement. We are still waiting
on the President to accept the deal but the market seems quite positive he will
do just that. Although there are very
few details about what’s in this Phase 1 agreement, the bulls confidently set
new record highs in the DIA, SPY, and QQQ after hearing the news. The UK Prime Minister Boris Johnson accomplished
a remarkable win that will secure Britain’s exit from the Euro block. After 14 hours of debate, the impeachment
committee postponed their vote until sometime today to send the articles of
impeachment to the full house for their decision.
The market’s around the world are responding positively to the
trade news helping the US Futures point to yet another record-making day at the
open. Assuming the President will accept
the deal sometime today, we have the makings for a very bullish day to close
the week. Removing the massive tariff
overhang from the weekend will make it much easier for the bulls to remain in
control of this trend. It may also open the door for a nice Santa
Clause rally as we head into the New Year.
Impeachment, Tariffs, and Brexit, Oh My! While the House impeachment committee prepares
a Thursday vote charging the president with high crimes and misdemeanors,
citizens of Britain go to the polls as the Prime Minister fights for a majority. What a tangled web of uncertainty the market
faces as we wait. After learning that
the FOMC will hold the line on interest rates and the positive economic comments
by the Chairman, the DIA, SPY and QQQ closed with modest gains. One wonders if they can continue to remain so
brave if we head into the weekend still waiting on a presidential tariff
decision.
Overnight Asian markets closed mixed but mostly higher as they closely monitor trade and tariff developments. European markets are moderately green across the board as the watch developments in the UK election and wait on an ECB rate decision with Christine Lagarde at the helm. With an impeachment vote pending, US Futures are pointing to modest gains at the open as the President prepares to meet with trade advisers. Keep a close eye on price action for clues as we wait for possible market-moving news.
On the Calendar
On the Thursday Earnings Calendar, we have 22 companies
reporting quarterly results. Notable
reports include COST, ADBE, AVGO, CIEN, ORCL.
Action Plan
13 day to Christmas!
After cutting the interest rates three times in 2019, the
FOMC decided to stand pat and have encouraging words about the overall
economy. As expected, there was very little
price movement after the release, but the bulls finally manged a positive Dow
close by the bell. The house impeachment
committee debated late into the evening with a vote likely to occur sometime
today, sending the articles to the full house vote. Across the pond, British citizens are voting today
in an attempt by the Prime Minister to win a party majority that will pass his
Brexit deal. Should his party win gain,
the majority needed the Brexit deal could occur rather quickly and may affect
the overall market. Should they lose,
the opposing party promises a new vote to determine if the country wants to
proceed with Brexit at all.
As we wait for the decision on the Dec 15th
tariffs, the bulls have done a very good job of defending the overall index
trends. However, as the weekend approaches,
one wonders how long they will remain this brave in the face of so much uncertainty. Futures are modestly bullish this morning ahead
of the Jobless Claims, and PPI reports. After
the bell, we will hear from ADBE, AVGO, COST, & ORCL earnings that could prove
to be market-moving. A confusing and
worrisome market to be sure so plan your risk carefully.
