Friday proved to be an erratic day of price action, with growing geopolitical tensions and the worries of the pending FOMC raising the bar of uncertainty.  In addition, sporadic earnings results as we begin to ramp up the number of reports and economic numbers hinting at a slowing economy just add to the precarious path forward.  Unfortunately, overnight futures action continues to whipsaw in huge point moves suggesting today could see much of the same.  So plan your risk carefully as we wait for the Fed decision Wednesday afternoon. 

Asian markets closed mixed after a choppy session with tech stock still under selling pressure.  However, this morning, the European markets trade decidedly bearish with Ukraine invasion concerns and a possible hawkish Fed.  In addition, U.S. futures whipsawed during the night, now pointing to a modestly lower open ahead of earnings results and the PMI flash report.  So, hang on tight as we begin another day of volatile uncertainty.

Economic Calendar

Earnings Calendar

To begin the trading week, we have more than 40 companies listed, with the majority of them confirmed.  Notable reports include BOH, BMRC, CR, HAL, HMST, IBM, PETS, SMBK, STLD, TRST, & ZION.

News & Technicals”

The U.S. State Department urged U.S. citizens in Ukraine to leave the country immediately, as Russia’s military buildup at the border shows no sign of dissipating.  According to Ukrainian and Western officials, Russia has repeatedly denied it is preparing to invade its neighbor Ukraine, despite stationing around 100,000 Russian troops at various locations along the border.  As a result, analysts are now questioning whether the West can actually deter Russia and just how far Western allies are willing to defend the country.  Ballistic missiles intercepted two over Abu Dhabi early Monday morning.   The ministry confirmed no casualties from the attack and that “fragments of the ballistic missiles fell in different areas” around Abu Dhabi.  The targeted missile launch comes just one week after a deadly Houthi-claimed attack on Abu Dhabi that used what UAE officials say were drones and missiles.  According to a person familiar with the matter, an activist is pushing Peloton to fire its chief executive officer and consider a sale as its share price has plummeted.  Blackwells Capital, which has a stake of less than 5% in Peloton, believes Peloton could be an attractive acquisition target for larger technology or fitness-oriented companies, the person said.  To be sure, Foley and other insiders have super-voting Class B shares, which gave them control over 80% of Peloton’s voting power as of Sept. 30, according to a proxy filing.  Cryptocurrencies continued their dramatic slide Saturday.  Bitcoin was trading at around $35,000, about half of its value since its November high.  Treasury Yields trade mixed in early Monday trading with the 10-year trading at 1.7475% and the 30-year declining slightly to 2.0602%

With significant geopolitical concerns and investors worried about the upcoming Fed decision, the indexes ultimately fell prey to the bears after a very erratic day of price action.  Unfortunately, the wild price action continued in the overnight futures markets that have whipsawed as they searched for direction amid the uncertainty.  Although the T2122 indicator suggests an extreme oversold condition, we should expect more of the say today.   Questionable economic reports and spermatic earnings results have not helped the situation, and as we ramp the number of reports, price volatility is likely to continue.  Should we find a reason to begin a relief rally, watch overhead resistance levels, and keep in mind a lot of the wild speculation will be less willing to rush back in, meaning a less robust rally is possible. 

Trade Wisely,

Doug