In testimony to the Senate banking committee, Powell reiterated low-interest rates, and they plan to keep their foot on the gas with monetary operations.  With a very dovish Fed and House planning to pass the 1.9 Trillion dollar stimulus bill, the bulls stampeded the Dow to new record highs.  The Spy and the QQQ also enjoyed substantial rally though they still have overhead price resistance to clear.  With a huge day of earnings and economic data coming our way, anything is possible.  Buckle up for additional volatility.

Aian markets rallied strongly overnight, with the NIKKEI surging 1.67%.  European markets trade mixed this morning with modest gains and losses after yesterday’s strong rally.  U.S. future point to a mixed open with a massive day of data to digest. 

Economic Calendar

Earnings Calendar

We have a huge day on the Thursday earnings calendar with more than 230 companies reporting quarterly results.  Notable reports include ADT, ABNB, ALRM, ABEV, AEP, AMT, BUD, ADSK, BBY, BYND, CZR, CWH, CM, CARS, CVNA, CNP, CLF, CUBE, DPZ, DASH, ETSY, STAY, FTCH, FSLR, FSR, GCI, GIL, HPQ, IHRT, SJM, KDP, KTOS, TREE, LYV, MAIN, MRNA, NTES, NLSN, NKLA, NCLH, PZZA, PCG, PLUG, RMAX, RKT, CRM, SEAS, SRE, SHAK, SHOO, STOR, RUN, TK, TD, VALE, SPCE, VMW, W, & ZS.

News & Technicals’

Uncle Powell reiterated in the Senate that the Fed would continue to hold rates low and keep their foot on the gas, pumping money out through continued operations.  The dovish comments set a fire under the bulls lifting the Dow to new record highs as the so-called recovery stocks continued to extend.  According to reports, the JNJ one-dose vaccine will soon help in the battle against the pandemic.  Unfortunately, in a statement yesterday afternoon, the CDC director said the new Covid Variants could undermine all our efforts.  Ugg!  GameStop shares are once again surging as the Reddit crowd continues to play games with a company that is drawing attention to regulators.  This week Congress proposed a 5% per trade tax, which will affect all traders.  Charlie Munger, in an interview yesterday, explained that novice investors are being lured into a bubble.  The 1.9 Trillion stimulus bills is expected to pass the House on Friday, and President Biden will extend the national emergency declaration.

Technically speaking, the DIA is once again showing tremendous bullishness, and through the SPY rallied strongly off of support, they still have overhead resistance to overcome.  The T2122 indicator is again warning that markets are overextended but with an extremely dovish Fed and Congress ready to pump another 1.9 trillion into the economy, I’m not sure it matters.  That said, be very careful overtrading and remember to take profits because if this market stumbles, the pullback could be very damaging to your accounts.  With a huge day of earnings and several potential market-moving economic reports, price volatility could be very challenging.

Trade Wisely,

Doug