Do you have an Edge? That is the question I continue to ask myself as we wait on trade talks and a tariff decision. We know the market continues to be very sensitive on this subject, and we experienced yesterday the market could move substantially on any news report or rumor on the subject. Every trader should consider carefully consider their risk as this market-moving decision approaches. If that would not enough, we also have an FOMC rate decision at 2:00 PM Eastern to consider today. Although the expectation is the committee will hold rates steady, a change in the statement or the Chairman’s press conference can create some price volatility.
Overnight Asian markets closed mixed but mostly higher as they
closely monitor tariff news and the possibility of a Phase 1 trade deal. European indexes trade mixed but mostly lower
this morning ahead of the FOMC rate decision.
US Futures ahead of the CPI report indicate a relatively flat and mixed
open with the QQQ looking the most bullish, but that could change significantly
by the open. Don’t be surprised if
indexes become light and choppy as we wait on the FOMC decision that may well
prove an overall non-event.
On the Calendar
On the hump day Earnings Calendar, we have 37 companies fessing
up their quarterly results. Notable
earnings include AEO, LULU, TLRD, PLCE, UNFI, & VRA.
Action Plan
Only 14 days to Christmas!
Before the market opens today, we will get the latest
reading on the CPI number. Consensus estimates
expect a slight decline but could move the market and affect the open if the
reading happens to surprise. At 2:00 PM,
FOMC will release the results of the 2-day interest rate meeting. Their decision is likely to be a non-event
because the expectation is they will hold rates steady and unlikely to change forward
projections. Of course, if during the
Chairman’s press conference, if we learn something more about their forward-thinking,
we could experience some price volatility.
As the House prepares to impeach the President, the main
market focus at the moment is the US/China trade deal and, more importantly,
what it may mean for the Sunday scheduled tariff increase. We saw the market sensitivity
to this yesterday as the pre-market futures quickly recovered due to a Journal
report. Then, when the government couldn’t
confirm the tariff delay as reported, the market quickly reversed to the negative
whipsawing prices. With that in mind,
carefully consider your risk as we wait for the Presidents decision.
Articles of impeachment, pending tariffs, or phase one deal,
and a pending FOMC decision is a trifecta of uncertainty and possibly the
perfect storm for price volatility. This
morning the bears are reacting to the uncertainty but we could be just one news
report or tweet away that from triggering major sentiment shift. What comes next is anyone’s guess and the
question we much answer is how much risk are we willing to take while we wait
for the next shoe to drop. If it happens
during the day, traders can react, but if it occurs overnight, traders will
have have to deal with the aftermath. Consider
your risk very carefully!
Asian markets closed mixed but mostly negative as China
consumer inflation jumps in November and pork price surge 110 percent. Across the pond, Eurozone indexes are red
across the board as they closely monitor the approaching tariff deadline. US Futures indicate the bears are once again
making a push lower this morning with the Dow pointing to 100 point gap down ahead
of earnings and economic reports.
On the Calendar
On the Earnings Calendar, we have 26 companies stepping up
to report quarterly results. Among the
notable reports today are GME, AZO, PLAY, & OLLI.
Action Plan
Santa will be here in 15 day!
It would appear that Congress has made some progress may finally complete the North American trade deal that has been languishing for many months. At the same time, the House has prepared articles impeachment that may be released as early as today and voted on by the end of the week. While all this political drama has been unfolding, the market has been holding its breath, waiting for clarification of the Phase 1 trade deal with China or if there will be a new tariff increase this Sunday. Monday’s sideways chop displayed the uncertainty of the market. According to the reports, China has agreed increase its soybean purchases and reported pork price spiked 110% in November.
As we wait for some clarification, the bears have come out to
play with futures markets pointing to lower open this morning. A little fear seemed to creep into the
thinking of the market yesterday with the rising 16% as the indexes price
chopped sideways. Today begins the 2-day
FOMC meeting with an announcement scheduled for 2:00 PM Eastern Wednesday. Although they have projected a wait a see approach
on further rate cuts, waiting for their actual decision always adds a twinge of
uncertainty for the market to work through.
After a big Friday rally and at the cusp of new record highs,
the market this morning is tiptoeing on a bed of pin and needles. Will there or won’t there be a Phase 1 trade
deal? What will the President decide about
the Dec. 15th tariff increase? The market is waiting for answers to these questions
and the decision is likely to have substantial impacts on overall market sentiment. Tensions
between the countries flared once again with China accusing the US of violations
of international law after the House passed a bill citing human rights violations
for their use of detention camps.
Overnight, Asian markets closed mixed but mostly higher even after reporting declines in exports for November. European markets are modestly lower across the board this morning and US Futures chop around the flat-line with a slightly bearish lean. With such a big decision pending, plan your risk carefully, and plan for the possibility of substantial moves depending on the answer we receive!
On the Calendar
On the Earnings Calendar, we have 27 companies fessing up to
their quarterly results. Among the notable
earnings are CASY, CHWY, SFIX, TOL, & MTN.
Action Plan
What, no premarket pump, no 5 AM news citing unnamed sources
to start the day? Well, that’s a change
that we will have to keep a close eye on as we move toward the December 15th
tariff deadline. Though the Director of
the National Economic Council Larry Kudlow said on Friday that the Phase 1
trade deal was getting closer to completion, China appears to be very unhappy this
morning. Last week the House passed a
bill chastising China for its use of detention camps. During the night, China claims the bill
violates international law flaring tensions between the two countries once
again. The President’s decision could be
critical for the market direction this week.
Until then, we wait on pins and needles!
Santa is coming!
Technically speaking, the bullish trend is still in tack, but
after a 4-day recovery rally of more than 675 Dow points, perhaps a little rest
is just what the doctor ordered. The SPY
came very close to breaking to new record highs on Friday’s strong rally. However, close also means that the price
resistance above did its job of holding the line as we wait on an important
tariff decision. What happens next could
be some big moves either up or down, depending on the decision. Remain flexible and plan your risk
accordingly.
The two days of light choppy price action is likely to get a
shot of volatility this morning with the release of the Employment Situation
number at 8:30 AM. Although the ADP
number showed a sharp decline, it will be interesting to see if that will
manifest in the government number. The
bulls seem to suggest the number will be positive as the once again pump up the
early morning futures. As we head into
the weekend facing a tariff increase on the 15th, I would not be too
surprised to see some profit-taking.
Asian markets closed the week on a bullish tone with modest
gains across the board. European markets
are moving higher this morning green across the board. US Futures also point to bullish gains at the
open that could easily expand the gap if the Employment number is positive or diminish
if the number happens to be disappointing.
Plan you risk into the weekend carefully as the political football of
US/China trade continues to be kicked around in the news.
On the Calendar
On the Friday Earnings Calendar, we
have a relatively quiet day with only 15 companies reporting. Notable earnings include BIG and GCO.
Action Plan
Another day of chop after attempting a pre-market pump,
traders took a wait and see approach.
This morning the focus will turn toward the Employment Situation number,
and once again the futures are tiring to lift the market ahead of the number. The good news is we will likely get some
price action today, but the question remains will retail traders get much of a
chance, or will it most of the price action occur in the gap. One thing for sure is that the bulls are still
in control with a relentless optimism amidst the political uncertainty.
After the morning rush, the market could once again turn its
attention to the pending tariff increase scheduled on the 15th. It the bulls continue to ignore the potential
risks pushing toward new record highs, or will there be some profit-taking into
the weekend to avoid the risk? Only time
will tell, but I, for one, will want to be more of a profit-taker rather than
adding risk into the weekend.
The big morning gap yesterday seemed to be met with a lot of
uncertainty as to what happens next with the Phase 1 trade agreement. The bulls find very few buyers after the gap,
and the bears could not inspire any sellers, so we lingered the rest of the day
in a choppy sideways consolidation waiting for news to break the deadlock. Although the uncertainty remains, the futures
market that had been flat most of the night found some inspiration somewhere to
once again point to a bullish gap up open.
Asian markets closed positive across the board overnight as confusion over the trade continues. European markets are trading mixed but mostly higher this morning ahead of German economic data. US Futures point to a 100 point Dow gap ahead of the biggest day of earnings this week and some potential market-moving economic reports. The market is very news sensitive regarding trade, so remain flexible as sentiment could quickly shift as this political drama continues.
On the Calendar
On the Thursday Earnings Calendar, we have our biggest day
of the week, with 51 companies reporting. Notable reports include ULTA, AOBC, CM, CLDR,
DOCU, DG, DLTH, EXPR, GWRE, JILL, KR, MIK, SIG, PLCE, TIF, & ZM.
Action Plan
After the morning pop yesterday, the price action in the
indexes stagnated in a sideways chop seemly uncertain as to what comes next. However, this morning, futures have found
some inspiration even though the future of the Phase 1 trade deal remains uncertain. With the decline in petroleum reserves and
the expectation that OPEC may make deeper cuts in oil production, there was
some nice movement in the sector yesterday, helping to the overall market.
Today is the biggest day of earnings this week and could provide
the source of inspiration for the bulls or the bears. However, in light of yesterday’s sharp decline
in ADP numbers, the Friday Employment Situation report may create more
consolidation after the morning rush while we wait. With the market sensitivity to any news on
the trade deal and what that might mean for tariffs, traders will have to
remain very flexible and prepared for quick price action surges or reversals. As the indexes move back up toward price
resistance levels, remember to take some profits.
The so-called Phase 1 trade deal has become a ridiculous political
football creating a frustratingly news-driven market chopping up trader’s
accounts. The President says maybe we wait
until after the 2020 election, and the Dow drops more than 400 points. Bloomberg puts out a story citing “people
familiar with the talks,” and suggests a deal is edging closer, and the Dow gaps
up. All of the drams over a trade deal
that we no one really knows what it does or does not include. Silly!
The good news is that even though the short-term index trends broke
yesterday the bulls found the energy to defend important price supports and
longer-term trends. However, traders
will have to remain very nimble in this emotional football continues to be kicked
around.
Asian market closed seeing only red across the board overnight
with European markets in reaction to the Bloomberg story reversed early losses and
currently see green across the board. US
Futures ahead of earnings and economic reports are also reacting sharply higher
after the Bloomberg report with the Dow expected to gap up triple digits in
reaction.
On the Calendar
On the hump day Earnings Calendar, we have 31 companies
reporting their results. Notable reports
include RH, WORK, HOME, CPB, FIVE, HRB, RY, TLYS, and VRNT.
Action Plan
Yesterday the President said it might be better to wait
until after the 2020 election to make a deal with China. Commerce secretary came out echoing those
comments and said they have not ruled out imposing tariffs on imported European
Autos. Then at 5 AM this morning,
Bloomberg News reported that the US and China were edging closer to a trade
deal citing “people familiar with the talks.”
The Futures quickly rallied from overnight losses on the report. I don’t know about you, but all this market
manipulation around the so-called Phase 1 deal has become absolutely ridiculous.
Technically speaking, the short-term index trends broke
yesterday, but the longer-term bullish trends remain intact as bulls defended
key price action supports. Although
yesterday’s price action was quite bearish, the pullback may, in fact, open the
door to opportunity, so stay focused on price for clues. As a result of the Bloomberg report, the futures
point to a gap up open in the Dow of more than 100 points ahead of earnings and
economic reports. At 10 AM Eastern today,
impeachment hearings will resume providing a little distraction and drama to
the day.
A miss on US Manufacturing and concerns of a US/China trade deal delay inspired the bears and triggered a wave of profit-taking yesterday. Threats of a possible 100% tariff against France in response to there new digital tax aimed at American companies as well as possible steel and aluminum tariffs for Argentina and Brazil added more pressure to the selloff. This morning the President raised concerns that the US/China trade agreement may not happen until after the 2020 election has futures pointing to more losses this morning.
Asian markets closed mixed but mostly lower overnight, with
Australia sinking more than 2%. Across
the pond Euro Zone indexes are mostly lower after the President’s comments on the
US/China trade delay. US Futures point
to a gap down open of about 100 Dow points following though after yesterday pop
and drop pattern leaving behind bearish engulfing candle patterns and lifting
the fear level in the VIX substantially.
Keep in mind that a pullback in a bullish trend may ultimately prove to
be a buying opportunity if the bulls prove strong enough to defend. So stay focused on the price for clues.
On the Calendar
On the Tuesday Economic Calendar, we have 20 companies reporting
quarterly results. Notable reports
include AZO, BMO, CONN, LE, MRVL, CRM, WDAY, and ZS.
Action Plan
The President’s trip abroad as proved to be quite eventful. After the passage of a digital tax in France targeting US companies, he has threatened new tariffs as much a 100% in retaliation. He also said steel and aluminum tariffs for Argentina and Brazil might be in play very soon. This morning the President suggested it might be better to wait until after the 2020 election to complete a trade deal with China sending the US Futures market sharply lower. All the while impeachment hearings resume on Wednesday here in the US while the President remains abroad scheduled to meet with the Queen.
Futures that had been modestly bullish most of the night now
appear to threaten a gap down this morning following through after Monday’s selloff. While the selling yesterday was worrisome, leaving
behind bearish engulfing candles, price supports, and overall trade largely
held up to the attack. However, follow-through
selling today may well create some technical damage to the index charts. The VIX closed the day just below a 15 handle
as fear quickly accelerated after the pop and drop day that energized the bears,
triggering a wave of profit-taking as trader scrambled to protect profits.
After a bearish short session on Friday, the bulls are trying to spark a rally this morning ahead of the PMI and ISM manufacturing reports. According to reports, the US consumer showed their confidence with an increase of 20% in Black Friday sales and an expectation that Cyber Monday could hit new record spending levels. That’s good for the economy but may prove to problematic for the market today with low volume as distracted traders search for online deals.
Asian markets were green across the board overnight fueled on better than expected Chinese manufacturing numbers. Unfortunately, the European markets are flat with mixed results as their manufacturing once again shrink. US Futures have pulled back from overnight highs as we wait on US Mfg reports at 9:45 and 10:00 AM Eastern. With Dec. 15th tariffs quickly approaching and China threatening retaliation for the bill supporting a Democratic Hong Kong, the path forward may have some new obstacles to overcome. As always, stay focused on price action for clues.
On the Calendar
On the Monday Earnings Calendar, we have a light day with
just 15 companies reporting as trading resumes after the Holiday. There are no particularly notable reports
today.
Action Plan
The market reacted negatively in the low volume, short
session, Friday after the President signed the bill supporting the Hong Kong
protesters. The December 15th
tariffs now come into focus as trade negotiations stall, and China threatens retaliation. On a positive note, holiday deal shoppers
were out in force with Black Friday sales up 20% according to reports. Retail is expecting today, Cyber Monday, to
set new sales records as consumers show signs of ramping up their holiday
online shopping.
Positive Chinese manufacturing data helped to boost overnight
markets, but Euro Zone manufacturing activity once again declined tempering
this morning’s bullishness. This morning
at 9:45 and 10:00, we will hear find out how US Manufacturing measures up with
the PMI & ISM reports. Consensus
estimates look favorable. Don’t be
surprised if volume quickly declines after the morning rush with traders extending
holiday vacations and distractions from Cyber Monday shopping.
The President’s positive comments on the Phase 1 trade
agreement has once again inspired the bulls to continue to reach out for new
highs. The earnings miss by DE has
dampened the overnight bullishness, but with a big morning of market-moving
economic reports that are expected to be positive according to consensus, all
signs point higher. Typically, after the
morning rush of activity, the volume will quickly diminish as traders set-out
to begin their holiday celebrations. Plan
accordingly.
Asian markets closed mixed but mostly higher with high hopes
news of a completed trade deal will be forthcoming. European are green across the board this morning
in response to the favorable trade comments by President Trump. US Futures point to modest gains at the open after
setting new records for the 10th time this month.
On the Calendar
On the pre-holiday Earnings Calendar, we have 21 companies
reporting quarterly results. Notable
reports include DE & DAKT, both reporting before the bell today.
Action Plan
President Trump has once again inspired the market this morning
suggesting they are very close to completing the Phase 1 trade deal. However, he also said they want to see a
democratic outcome in Hong Kong, which many see as a major obstacle to Chinese support. Yesterday, we saw record highs for the 10th
time in the last 30 days. Clearly, the
bulls are in control, and the trend remains very strong.
Although we have a rather light day on the earnings calendar
we have a very busy morning on the economic calendar with several potential
market-moving reports. The consensus
estimates of these reports are all positive, so only a major surprise seems capable
of derailing this relentless bull. Keep
in mind that volume is likely to decline very quickly after the morning rush as
traders head out for their holiday plans.
Although the market is open for short a session on Friday, the HRC and
RWO trading rooms will remain closed until Monday Dec. 2nd. I wish you all a very Happy Thanksgiving!
With the bulls inspired by Hong Kong election results, renewed
trade hopes, and a huge day merger news made setting new record highs in the DIA,
SPY,and QQQ look easy as they quickly recovered last week’s pullback. Today, the attention will likely shift to earnings
and economic reports to find inspiration.
After such a big move yesterday and heading toward a major holiday. It
will be interesting to see if bulls can find the energy to continue their relentless
march higher.
Asian markets closed mixed but modestly higher with Alibaba
making a huge splash in Hong Kong markets.
European markets are treading cautiously with mixed results as they
continue to monitor US/China trade news.
US Futures are rather subdued this morning ahead of earnings reports and
several potential market-moving economic reports. With markets at new record highs consider
your risk carefully as the holiday shutdown approaches.
On the Calendar
On the Tuesday Earnings Calendar nearly 50 companies
reporting results. Notable reports
include BBY, ADSK, BNS, BOX, CHS, CBRL, DELL, DKS, DLTR, EV, GES, HRL, HPQ,
MOV, VEEV, and VMW.
Action Plan
Monday became on the biggest merger days in history, providing
additional energy to an already bullish sentiment setting new records in the
DIA, SPY, and QQQ in the process. T2122
suggests this bull run still has some upside potential but could soon reach a
short-term overbought condition if the bulls continue to find inspiration to
rally. Earnings reports could provide
that inspiration, or perhaps it will be the New Home Sales and Consumer
Confidence reports at 10:00 AM Eastern.
One thing for sure is that the bulls remain firmly in control of a trend
that shows no price action clues of ending at this point.
Futures markets seem much more subdued this morning, perhaps
needed a little rest after such a big effort yesterday. It is also possible with the Holiday looming
and the nasty weather conditions moving across the country that traders will
try and escape early. Don’t be too
surprised if volumes begin to decline quickly with price action becoming very
light and choppy after the morning rush Wednesday. As we push new market highs, plan your risk carefully
heading into the holiday.
