The images of fleeing diplomats and the hints of Fed tapering seem to have a few bears milling about this morning pondering the uncertainty.  Could their summer hibernation come to an end as we wind down the bulk of earnings season inspiration?  Perhaps but with new records in the DIA and SPY, trends remain very bullish.  Only the IWM has a hint of bearishness as it continues to languish below its 50-day average. So prepare for the possibility of price turbulence as the markets work through the details of the uncertainty. 

Asian markets closed mostly lower overnight, lead by the Nikkei falling 1.62% after China’s economic data disappoints.  Geopolitical concerns have European markets seeing red across the board this morning as investors monitor the fast-changing events.  Ahead of earnings and a light day of market-moving economic news, U.S. futures suggest a modestly bearish open within bullish trends amid tapering uncertainty. 

Economic Calendar

Earnings Calendar

To kick off the new trading week, we have around 190 companies listed, but a large number of them are small-cap unconfirmed events.  Notable reports include PLNT, DDD, APD, AMC, GOLD, BNTX, CBT, ELY, CF, CHGG, CXW, APPS, DISH, ELAN, ENR, GLNG, KNDI, QLYS, SGMS, SDC, TTD, TSN, & WKHS.

News & Technicals’

President Biden experiences his Saigon moment as the Taliban seize Kabul as diplomats flee.  After taking over the presidential palace, the Taliban has taken over the entire country in about 30 days.  Reports suggest that there is growing support to announce tapering its debit asset purchase program in September.  It will be interesting to see how a market addicted to money flowing from the Fed will react when and if it does come to an end.  This morning Treasury yields decline with the 10-year falling to 1.263% and the 30-year dipping to 1.921%, with the Fed minutes expected Wednesday afternoon.  With turmoil in Haiti, Afganistan, and Malaysia, markets worldwide are experiencing a little bearish pressure due to the uncertainty.

Coming off a week of fresh record highs in the DIA and SPY, the images of fleeing diplomats and the talk of Fed tapering have the bears stirring about this morning.  Earnings season provided a good deal of bullish energy, but as the season winds down, the bulls will have to begin looking elsewhere for inspiration.  Trends is in the DIA, SPY, and QQQ are very bullish, but they also appear somewhat overextended.  The big question is, do the bears have any teeth, and will the geopolitical along with the taper talk wake them from the summer hibernation.  Only time will tell but be ready for some price turbulence as the market grapples with the uncertainty.

Trade Wisely,

Doug