We began the week with the indexes higher on weak volume as the end-of-quarter window dressing with another surge upward in the final few minutes of the day.  However, price volatility remains uncomfortably high as investors choose to ignore a five and 10-year bond inversion and another record trade deficit.  As a result, the index price pattern remains bullish as they continue to extend the winning streak into the end of the quarter.  With the economic reports report indicating a weakening economy and the yield inversion suggesting a possible recession on the way, be very careful not to overtrade with a fear of missing out.

Asian markets closed mixed but mostly higher as Japan warns of a rapidly weakening yen that hit a 6-year low.   European market sees only green this morning as Ukraine -Russian talks bring high hopes of a resolution to the aggression.  The U.S. futures recovered from early overnight losses to point toward a gap up open ahead of potentially market-moving economic reports.  Be prepared for more challenging price action as we extend.

Economic Calendar

Earnings Calendar

We have between 50 and 60 companies listed on the Tuesday earnings calendar, but quite a few are unconfirmed.  Notable reports include LULU, MU, ASO, CLAM, CHWY, lODE, CONN, ESLT, INFI, KALA, MKC, PRGS, PVH, RH, DTC, SPWH, SNDL, VRNT,& ZVO.

News & Technicals’

“What we want to make very clear to crypto exchanges, financial institutions, individuals, and anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable,” Deputy U.S. Treasury Secretary Secretary Secretary Wally Adeyemo told CNBC on Tuesday.  “We will come and find you,” Adeyemo said.  His comments come shortly after the G-7 major economies pledged to ensure the Russian state, elites, proxies, and oligarchs would not be able to leverage digital assets to sidestep the impact of international sanctions.  Speaking to CNBC on Tuesday, Saudi Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz Al Saud said the organization’s very existence depended on the separation of its mission to stabilize oil prices from other geopolitical factors.  Earlier this month, Saudi Arabia and the UAE voted in favor of a U.N. General Assembly resolution urging Russia to abandon the invasion and withdraw all troops.  Prince Abdulaziz said there were other forums through which the Kingdom could voice its opinion on Russia’s actions, which is in line with the global response.  “We are completely against any blackmailing,” Germany’s Finance Minister Christian Lindner told CNBC Monday.  Europe’s dependency on Russian energy has prevented the bloc from imposing an oil embargo on Moscow as part of its broader sanctions on the Kremlin.  This contrasts with a decision from the White House, which has banned Russian oil and gas imports.

Monday proved to be volatile for the markets, but the indexes closed higher on weak volume, ignoring a record trade deficit and the 5-10 bond yield inversion.  It makes me quite uncomfortable as the charts continue to extend as the economic data deteriorates.  That said, the price patterns remain bullish and premarket futures continue to push for higher prints each morning.  I suspect the continued rally results from the end-of-quarter window dressing that I’ve mentioned the last few days.  Watch for and be prepared for the possibility of a big letdown when it’s over.  Also, keep a close eye on the 2-year bonds as they creep higher, suggesting a recession may be just around the corner. 

Trade Wisley,

Doug