Some nasty retail earnings and tough talk raise concerns about the so-called Phase 1 trade deal bring a needed pause in the bull run.  Even bulls need a little rest from time to time, and this little pullback may prove to be very productive as long as the overall index trends hold.  Better earnings results out from TGT and LOW have already recovered some the overnight losses in the futures market now suggesting a modest gap lower at the open. 

Overnight Asian markets closed the day bearish across the board on growing trade tensions. European markets are also reacting lower this morning, seeing red across the board.  US Futures have lifted overnight lows but continue to point to modest declines ahead of more impeachment hearings and the FOMC minutes due out at 2 PM Eastern today.

On the Calendar

On the hump day Earnings Calendar, we have more than 50 companies reporting today.  Notable reports include LOW, TGT, JACK, LB, LZB, NTES, and QIWI.

Action Plan

Yesterday’s gap up opens eventually turned into a pop and drop pattern with the Dow closing the day with a bearish engulfing candle.  However, the SPY and QQQ found enough buyers by the end of the day, and the price action finished the day with just a little rest from breaking daily records.  It would seem tensions between the US and China have once again flared with new tariffs threatened as part of the rhetoric.  Today the impeachment show continues on the capital hill while the market waits for the FOMC minutes at 2 PM Eastern.

Even with the slight bearishness of yesterday index trends remain intact while the VIX continues to register little to no fear of in the market.  Although the futures are under slight pressure this morning, I see this pullback as nothing more than a rest so far.  Of course, that could quickly change if the Phase 1 proposal falls apart, but my guess is that’s not likely at least for now.  We needed a little rest, and as long as the overall trends hold, this pullback may well prove to be nothing more than a pause in an otherwise very bullish trend.  Futures point to modest gap down at the open, but be very careful chasing the open down as many will see this as an opportunity to buy.  As always, wait for proof of follow-through!

Trade Wisely,

Doug

While the bulls seemed to struggle to find inspiration in the morning session, there was a constant and persistent push in the Dow futures, which led the indexes throughout the entire day, ultimately setting new record highs.  Oddly, even so-called safe-haven sectors are being swept up in this relentless bull run.  A rare thing to see, so enjoy it.  How long this can last is anyone’s guess, so don’t get caught up in the emotion of will bullishness stay focused on price action, plan carefully, and remember to take profits along the way!

While trouble in Hong Kong continues to get more violent Asian markets managed to close mostly higher though China said yesterday they were pessimistic about a trade deal.  European stocks joined the US markets in bullishness setting 4-year highs and are green across the board this morning.  US futures pared gains slightly after HD missed on sales expectations but still point to new record highs ahead of the Housing Starts number at 8:30 AM Eastern.

On the Calendar

On today’s Earnings Calendar we have just over 60 companies reporting.  Notable reports include HD, JKS, KSS, MDT, TJX, and URBN.

Action Plan

Pimco predicts the US and China will sign a Phase 1 trade deal before Christmas causes the futures to leap higher.  However, after HD missed on sales expectations, futures have softened but continue to point to another record high open.  Impeachment hearings resume this morning, and according to reports, the President is considering the idea of testifying in his own defense.  Expect the political drama to attract a good deal of attention, but it’s unclear if the bulls will waver in their march higher even if the news is bad. 

Although the markets seemed to lack momentum yesterday, the constant push in the futures market finally broke the log jam setting new record highs for the day.  It’s interesting to note value stocks and consumer defensive stocks are moving up in concert with growth and high beta stocks, which is quite odd.  Relentless bullishness seems to be the best description of the current market, and it doesn’t seem to matter what their buying just buy something.  How long this can last is anyone’s guess, but enjoy it because it’s not often such an event occurs.  As always keep your emotions in check, stay focused on price remembering how quickly sentiment can shift.

Trade Wisely,

Doug

In a last-minute surge of bullishness, the Dow close 4 points over 28000 as new records in three of the four major indexes created history.  The poor small-cap Russell continues to lag way behind, under-loved, and struggling with resistance.  Positive news on the Phase 1 trade deal negotiations has the market once again gaping higher as the bulls continue to show no fear of heights.  With Fed signaling a rate-cutting pause and earnings season, winding down the market may become more sensitive to trade developments and news out the impeachment hearings.   Remember, big round numbers such as 28,000 will likely see a test as support in the not to distant future, so remain flexible and focused on price action.

Overnight Asian markets closed green across the board despite the increasingly violent protests in Hong Kong choosing to focus on US/China trade hopes.  European markets are mostly flat and mostly lower this morning, taking a much more cautious approach to trade news.  However, US Futures are tossing caution to the wind looking to extend Friday’s record-breaking rally with a Dow gap up open of more than 75 points.  The possibility of a pop and drop exists, so consider your risk carefully if you chase the open.

On the Calendar

On the Monday Earnings Calendar, we just over 50 companies reporting results.  Of the companies reporting, MANU is the only one that I see as particularly notable.

Action Plan

The big move Friday looks to have additional inspiration this morning after a report of a productive meeting on the Phase 1 trade deal.  With the majority of earnings reports now behind us, we still have about 200 companies reporting this week.  The majority of the notable reports will be in the retail sector, with HD kicking it off tomorrow morning.  As Impeachment hearings enter their second-week traders will have to keep on eye on the news for possible market-moving reports spun-out of by the political drama.

On Friday, the Dow closed above 28,000 for the first time while the DIA lagged slightly behind at 279.84.  Big round numbers can sometimes be a stumbling block for the market, but the SP-500 cut through 3100 like warm butter and the Nasdaq lept right though 8500 like it wasn’t even there.  That in mind, be careful chasing the morning opening gap.  Testing these big round numbers as support is not out of the question in the near future, so as always remain focused on price action for clues.  With earnings winding down and the rate-cutting, Fed pausing inspiration may turn to the Phase 1 trade deal hopes and making the market very news sensitive. 

Trade Wisely,

Doug

Another day and more new record highs as the bullish trend show no signs of stopping their push higher just yet.  Though yesterday’s rally was not broad-based key stocks, continue to find the support needed to drive the indexes higher even with troublesome developments in the US/China Phase 1 negotiations.  News that the USMCA trade deal may be finalized soon helped to lift spirits ahead of the busy morning of economic reports and the resumption of the impeachment hearings in the House. 

Asian market closed their week mixed amidst trade tensions and Hong Kong protests.  European markets are mostly bullish this morning renewed trade deal hopes and the US futures point to another gap up and new record highs at the open.  With a light day of earnings attention will shift to the possible market-moving economic reports and the political drama unfolding on Capitol Hill.

On the Calendar

On the Friday Earnings Calendar, we get a break from with only six companies reporting today, but we still have a couple of notable reports with JNP and JD, which both report before the bell.

Action Plan

The bulls achieved more record highs on Thursday, although the rally was not broad-based, with the T2122 indicator moving slightly lower in the process.  Nonetheless, the bulls remain in control, and the technicals of the index charts remain very bullish.  The House will resume impeachment hearings today, so beware of possible events that could quickly move the market with more than enough political rhetoric to choke both bulls and bears. 

With the 4^th quarter earnings season winding down, we have a very light day on the earnings calendar this Friday.  However, we have a big morning on Economic Calendar with several potential market-moving reports that could inspire some price action volatility.  Most notable is the Retail sales number at 8:30 AM ET, and the Industrial Production follows quickly after at 9:15 AM.  Futures got a lift this morning on a story that suggests Congress is nearing the completion of the USMCA trade deal with Mexico and Canada.  After the morning rush, don’t be surprised if the congressional hearings divert attention, and we have a period of light choppy price action as the political drama unfolds.

Trade Wisely,

Doug

The House of Mouse (DIS) surprised the market yesterday, reporting it had gained 10 million new subscribers on the first day of service, pushing the stock up more than 7% on the day and taking the Dow to record highs in the process.  FOMC Chairman Jerome Powell testified yesterday they will back off on rate cuts adopting a wait and see approach siting a strong economy led by solid jobs growth.  Mr. Powell speaks today with the House Budget Committee giving us a one day reprieve from the impeachment hearings.

Asian markets closed the day mixed and mostly lower on trade war tensions as they demand more tariff cuts.  European indexes are trading flat to mostly lower this morning in reaction to the apparent stalemate in US/China trade talks.  US Futures currently suggest a flat open but have improved after WMT reported an earnings beat this morning.  Jobless Claims and PPI numbers are out 8:30 AM Eastern as well as a big round of earnings reports, so stay focused on price action for clues.

On the Calendar

On the Thursday Earnings Calendar, we have just over 275 companies reporting quarterly results.  Notable reports include WMT, NVDA, AMAT, BAM, CGC, DDS, FTCH, HP, IGT, SCVL, SINA, VIAB, WB, WIX, & WSM.

Action Plan

The Dow powered to new record highs after DIS reported their new streaming service gained 10 million subscribers on its very first day of service.  However, this morning, futures are pointing slightly bearish with China not wanting to commit to a level of farm purchases and demanding removal of tariffs.  The Congressional impeachment hearing had a huge viewership but seemed to have very little if any impact on the market.   We have break in that regard today, but the hearings resume on Friday.

Mr. Powell testified yesterday that after 3-rate cuts, the FOMC is comfortable taking a wait and see approach with future rate cuts unlikely in the near future.  The chairman will continue his testimony before the House Budget Committee at 10 AM Eastern today.  We have a big day earnings with the retail giant WMT reporting before the bell and NVDA as the most notable after the bell.  CSCO disappointed the market yesterday afternoon and is indicated to open substantially lower this morning.

Trade Wisely,

Doug

We could have an interesting market day as the events on Capitol Hill unfold.  We have the Jerome Powell testifying in Congress as the House begins the Presidential impeachment hearings.  We can expect a belly full of political drama and possibly news-driven price action to keep us on our toes.  If that’s not enough for the market to digest trade war uncertainty has once again raised its ugly head bring out the bears this morning ahead of the 8:30 AM CPI report. 

Asian markets closed in the red across the board as the civil unrest in Hong Kong, and trade uncertainty woke up the bears.  European markets are also decidedly bearish this morning, seeing nothing but red across their major indexes.  US Futures point a gap down open this morning ahead of earnings reports, CPI, and full-day of Capitol Hill drama.  Stay focused on price action and prepare for the possibility of new driven reversals.

On the Calendar

On the Earnings Calendar, we have more than 160 companies reporting results.  Notable reports include CAE, CSCO, CPA, ENR, FVRR, LK, NTAP, QIWI, SSYS, TNK, TSEM, and VIPS.

Action Plan

Today will be a very busy day on Capitol hill and could spill over into market price action.  Chairman Powell will testify before the Joint Economic Committee just a day after the President suggests the US should have negative rates like other countries have.  That could set the stage for some interesting conversation and questioning by the committee.  Meanwhile, in the house chamber they Nancy Pelosi will begin the presidential impeachment hearings that are not only likely to move the market but also provide Saturday Night Live plenty of comedic inspiration.

Technically speaking, the bulls continue to demonstrate their resiliency in spite of all the political lunacy and uncertainty it faces.  This morning it would appear that the bears are trying to reengage as trade war uncertainty once again floats to the surface affecting prices in Asia and Europe during the night.  After the morning gap down I would not be surprised to see the price action become light and choppy as we wait for the news-driven events of the day come to light.  Remain focused on price action and flexible as market direction could quickly shift in reaction.

Trade Wisely,

Doug

News from BA that the 737 may be back in the sky by January inspired the bulls to shake off the trade fears that began the day to close the DIA at a new record high close.  Relentlessly the bulls have pushed past bad news to move up and if that bad news eventually finds resolution the surges even higher.  This morning there is speculation the President will delay European tariffs by 6-months on Wednesday, lifting futures off of overnight lows.  Expect news-driven price action to continue with he Powell speech on Wednesday and the Impeachment hearing also scheduled to begin.

Asian markets recovered from early lows closing in the green despite trade concerns and Hong Kong unrest.  European are also green across the board this morning on hope of an auto tariff delay.  US Futures continue to fluctuate this morning with more than 300 earnings reports to digest.  That said, I expect a modest gap up at the open with the bulls still in control.

On the Calendar

On the Earnings Calendar, we have over 300 companies reporting today.  Notable reports include DHI, TWOU, ADT, AAP, ACM, CBS, BREW, DF, OSTK, ROK, SWKS, TLRY, TSN, and YY.

Action Plan

The bullishness of this market has been truly remarkable.  As issues continue to swirl around trade and Hong Kong, the bulls relentlessly surge forward.  Although yesterday’s rally was not broad-based, a new record high closing high in the DIA was inked mostly on the back of BA news.  With an upcoming speech by the President on Wednesday with speculation that he is going to dealy European tariffs for 6-months markets this morning a once again surging higher.  Jerome Powell is also scheduled to speak on Wednesday.

All the while, the Presidential impeachment hearings will begin, and we can count on a barge of political rhetoric and spin to captivate the public and potentially move the market.  News-driven price action can be challenging to trade, but it could also turn out to be a non-event if the bulls remain as relentless as they have been over the last month of trading.  No matter what happens, as traders, it’s our job to focus on the price action and follow the clues they present without bias or prediction.

Trade Wisely,

Doug

Closing at new record highs on Friday, the bears have decided they have something to say this morning trying to claw back a good portion of the move.  The good news is with the banks closed in honor of Veterans Day, the bears may find it difficult to find enough energy to create much technical damage.  Although it’s always disappointing to see a weekend reverse a strong close of the previous week, the volume is likely to be light and price action choppy due to the holiday.

Asian markets closed the day seeing only red with trade tensions growing over the weekend, and Hong Kong protests flare up once again.  European markets are also bearish this morning as they watch trade developments, and the US Futures are following the same path the Dow pointing to a triple point gap down this morning. 

On the Calendar

There are no events on the Economic Calendar with the banks closed due to Veterans Day.

We have over 140 companies reporting earnings results today.  Notable reports include FOLD, FNV, TME, and TERP.

Action Plan

Having taken a few days off, I feel a bit out of the sorts this morning trying to catch up, so this blog post will well be short.  Although the DIA, SPY, and QQQ closed at a new record high on Friday it was interesting to note that T2122 slightly declined.   That often suggests the rally was not broad-based with just key stocks rising to finish the week strong.

This morning futures are decidedly bearish looking to take back a sizeable portion of Friday’s rally at the open.  However, with the banks closed for Veterans Day, this pullback may not create any serious technical damage.  In fact, after the morning rush expect price action to become light and choppy.

Trade Wisely,

Doug

Though the indexes have inked new records, the price action indicates the bull may be a bit winded after such a big bullish run.  A little consolidation or slight pullback to test new supports and allowing time for the key averages to catch up could be just what it needs to set up the next leg higher.  There may be some concern as well; the Phase 1 trade deal is already priced into the market before we even know what it does or does not include.  Between Wednesday and Friday, we have more than 1000 earnings reports for the market to digest as well, so traders should remain flexible and focused on price action clues.

Asian markets traded cautiously as they closely watch the Phase 1 trade developments.  European markets are also timid this morning trading flat to slightly bullish this morning.  US Futures were flat to slightly bearish most are again getting the morning pump up ahead of a big round of earnings that are now pointing to a modest gap up open.  Let’s hope today we can see some follow-through rather than the sideways chop after the institutional gap we’ve experienced in the last 2-days.

On the Calendar

On the hump day earnings calendar, we have over 430 companies’ results.  Notable reports include UPWK, ALB, UHAL, ANGI, BIDU, GOLD, BLMN, CRCM, CARS, CVNA, FUN, CTL, COTY, CVS, ELF, ET, EOG, EXPE, STAY, FISV, FIT, FLO, FOSL, GLUU, GDDY, TWNK, HUM, IAC, IQ, KGC, LL, MRO, NYT, ODP, PAAS, PZZA, PRGO, QCOM, RCII, SMG, SQ, TRIP, VVV, VER, WEN, & WLH.

Action Plan

Ahead of a very big day of earnings, futures are taking a wait and see approach.  Most of the evening, they were flat to slightly lower have been slowly creeping up as we wait for results.  After inking new record highs in the Dow yesterday, perhaps the futures are indicating we need a rest to confirm new levels of support and allow the key averages time to close the distance with the price.   Pensiveness could also be due to the Phase 1 trade deal and concerns that it’s already completely priced into the market.

Technically speaking, the bulls remain in control, but the averages do appear to be a little too far ahead of their 50-day averages.  Should a slight pullback or consolidation occur, I think that could be very bullish for the market as long as the new support levels prove strong enough to hold.  With more than 1000 earnings reports between today and the end of the week, anything is possible, but so far this earnings session, the results favor the bulls. 

Trade Wisely,

Doug

Asian markets closed bullish across the board following the lead of US markets after setting new records.  European markets are modestly bullish across the board as the monitor US/China trade developments closely.  US Futures currently point to a Dow gap up of nearly 75 points ahead of a huge day of earnings reports. 

New record after new record on a rally very few expected, but it looks as if the bulls want to stretch even further this morning on high hopes of the Phase 1 deal.  Yesterday was rather frustrating, technically producing a pop and drop pattern that chopped in a very small range after the big gap up. Ahead of a big day of earnings and economic reports futures markets once again point to a gap open that we will have to again watch for proof of follow-through buying.  Guard yourself against chasing into the gap as profit-taking could begin at any time.

On the Calendar

On the Tuesday earnings calendar, we have over 360 companies reporting results.  Notable reports include PTON, AGN, AINV, ARNC, BDX, CZR, CWH, CNK, DVA, DVN, EMR, HST, HUBS, LAMR, LC, LPX, MNK, MTCH, MYL, NEM, PBI, PAA, PPL, RRGB, REGN, SSTK, TPR, TRVG, TRUP, VOYA, & WW.

Action Plan

Yesterday was a bit frustrating with a big institutional gap that found no follow-through chopping in a very small range the entire day.  Of course, we set new records in the DIA, SPY, and QQQ, and it looks as if we could do the same today with another gap up open indicated in the futures.  The T2122 indicator settled after the morning gap, which gives a bit more up-side room if the bulls continue to find inspiration.

With a big day of earnings reports and the International Trade in goods report at 8:30 AM, anything is possible, but with high hopes of a Phase 1 trade deal the bulls appear relentless in their run higher.  As the melt-up continues, stay focused on price watching for clues of profit-taking beginning.  It’s very easy in such a bullish environment to get caught up in the euphoria and over-trade so late in the rally.  Remember, gap up opens can be a great time to take some profits and be careful not to chase stocks that have already run multiple days higher.

Trade Wisely,

Doug