Last Monday, a punishing gap down for those holding long positions, so I guess its only fair to punish those who held short positions over the weekend with a massive gap up this morning.  Anyone else tired of this all or nothing, whipsaw morning gap market?  Sadly I suspect there is more to come this week as we face an economic calendar chalked full of market-moving events and enough political drama churning in the news to all investors on edge.  If that’s not enough, let’s toss in rising pandemic numbers for an additional dose of uncertainty.

Asian markets closed mixed but mostly higher overnight following reports of US sanctions as tech tensions continue to rise between the US and China.  European markets are decidedly bullish this morning, with HSBC bouncing more than 8% on the day.  US Futures are wildly bullish this morning, suggesting a Dow gap of more than 300 points to test its 50-average as resistance.  With so much data coming our way, expect another week of wild price volatility to challenge traders!

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have 19 companies reporting quarterly results.  Notable reports include CALM, SINA, THO, UNFI, & WB.

News and Technicals’

Last Monday, the market gapped down huge, so I guess it only makes sense that the futures are pointing to a considerable gap up this morning.  The President’s taxes dominate the news cycle this morning with the NYT reporting that he paid no taxes for several years due to business losses.  Is should make for some great political drama in the Presidential debate scheduled for tomorrow.  A federal judge has temporarily blocked the administration’s ban on new TikTok downloads form US app stores.  However, the much broader ban is set to come into effect on Nov.12^th was not part of the judge’s order, so expect this more turbulence with the tech tensions between the US and China.  Speaker Pelosi still believes there is a chance to pass a stimulus deal, but the other side of the aisle appears much less optimistic that a compromise can be struck.  Treasury yields are on the rise as signs of a worsening pandemic worldwide and hear in the US keep investors on edge as to what comes next.

Looking that futures this morning, one would guess there must have been some big news to drive such a surge upward this morning.  If there is, it has escaped me! In fact, we face a very uncertain week ahead with a full economic calendar, a GDP number expected to come in pretty ugly on Wednesday, and the Employment Situation on Friday, not mention all the political drama churning up emotion as the election approaches.  The bullishness this morning is nice to see but keep in mind the significant price resistance above that includes 50-day moving averages.  Traders will have to stay on their toes for a possible short squeeze triggered by the morning gap or the equally likely pop and drop that could occur at resistance.  Please fasten your seat belt tightly; it could be a bumpy ride ahead.

Trade Wisley,

Doug