New all-time highs as the indexes continue to extend with the smell of freshly printed money inspiring the bulls.  In just 6-trading days, the Dow surged over 1900 points, and the party is not over yet, with the futures pointing to another gap up open.  Stay with the trend, but I caution traders to avoid overtrading or becoming complacent.  A pullback could begin at any time, and remember, a gap up to new highs brings with it the possibility of a pop and drop price pattern.  Until then, enjoy the party!

Asian markets traded mixed but mostly higher overnight, and European markets advance with modest gains this morning.  Ahead of an FOMC announcement Wednesday afternoon, expect price volatility to continues as the bulls push for more records at today’s open.  Stay focused and flexible as we enter a busy week of earnings and economic data.

Economic Calendar

Earnings Calendar

On the Monday calendar, we have just short of 100 companies stepping up to report quarterly results.  However, many of them are small-cap unverified reports.  Notable reports include HQY, FENG,& VUZI.

News & Technicals

White House advisor Fauci is warning against lifting U.S. restrictions as Germany declares a 3^rd wave of infections, and Italy prepares for an Easter lockdown with the infection rates rise.  Ireland, Austria, and the Netherlands are the latest countries to suspend the AstraZeneca vaccine over blood clot concerns.  According to the TSA, passenger screenings hit the highest levels in over a year as travel begins to recover.  The 10-year treasury yield stubbornly holds above 1.6%, with an FOMC meeting just around the corner. 

Indexes finished last week strong as new all-time high records continue on almost a daily basis.  How long this bullish frenzy of buying can last is anyone’s guess, but chasing this rally could prove to be very dangerous as we extend.  The current SP-500 P/E ratio is 80% above its 10-year average, and the 4-week new high/new low ratio continues to suggest an extremely overbought condition in the short-term.  That said, the VIX continues to decline, closing above a 20 handle on Friday.  The QQQ remains the problem child, still trading below its 50-day average with significant overhead resistance above.  Ahead of the FOMC, treasuries continue to hold above 1.6% as inflation worries persist.  Stay with the bullish trend but don’t become complacent because a rest or pullback could begin anytime.

Trade Wisely,

Doug