Unable to agree on a stimulus deal, the futures were already pointing to a bearish open.  The news that the President and the First Lady tested positive for COVID-19 added another layer of uncertainty for the path forward.  Will the bull show the strength to defend the 50-day moving averages on the DIA, SPY, and QQQ or will the bear regain control of market direction?  As we slide into the weekend, there seem to be more questions than answers for traders to grapple with, suggesting a volatile day of price action awaits.

Asian markets in a choppy session closed mixed but mostly lower overnight.  European markets are lower across the board, with the DAX down 1% in reaction to the uncertainty ahead.  Ahead of the Employment Situation number, US Futures point to a nasty gap down of more than 300 Dow points.  With the path forward clouded in uncertainty, weigh your risk carefully as head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have eight companies on the list, but apparently, all of them are unconfirmed.  Consequently, we have no notable reports today.

News & Technicals’

A choppy Thursday market session as we waited to hear deal or no deal on a fifth stimulus package.  Failing to come to an agreement, the House moved forward, passing their 2.2 Trillion plan that has little to chance of getting past the Senate.  According to reports, the two sides will continue to talk, but with congress about to recess, hopes that a deal has diminished.  US Futures slipped into the red during the evening as a result.  Then we heard the news the President and the First Lady tested positive for Covid-19, and futures quickly plunged 500 points.  They have recovered from early morning lows, but the uncertainty about what comes next has the market facing a nasty gap down this morning.

Having recovered their 50-day averages, it will now be a critical test for the bulls to defend the level as support.  A fall back below this crucial psychological level will damage the index chart technicals and could threaten the overall market confidence.  Today we get a reading on the Employment Situation numbers before the bell, so get ready for a volatile morning of price action and carefully consider your risk as we head into an uncertain weekend.

Trade Wisely,

Doug