The tech giants almost single handily lifted the QQQ to new record highs while China’s plan to release reserves toppled trends in inflationary stocks and commodities.  At the same time, the DIA suffered technical damage in a wild price action day with a substantial whipsaw intraday.  With price volatility so high, day traders likely have the upper hand, while swing and position traders may find the whips in price action challenging to downright unsavory. 

While we slept, Asian markets closed mixed through the HIS rallied 0.85%.  European markets are decidedly bearish this morning as the tumble in commodities continues.  The U.S. futures currently point to a lower open with a very light day of earnings and economic data to provide inspiration as we slide into the weekend.  Should the tech titans happen to turn south, it could be a painful day.

Economic Calendar

Earnings Calendar

We have a very light day on the Friday earnings calendar with just 3-companies listed and only one verified report coming from GLBS, which is not particularly notable. 

News & Technicals’

Commodities plunged yesterday as China announced a plan to release reserves of metals that included Copper, Aluminum, palladium, and platinum.  The move caused a spike in the U.S. dollar, also affecting Gold and Silver, as well as oil and grain futures.   That said, we can expect most of the prices to recover due to the rising inflation.  Morgan Stanley has upgraded Occidental due to higher prices suggesting a 40% increase in the stock. Exon Mobil received a similar upgrade earlier this week.  Remarkably with inflation on the rise, the 10-year Treasury note fell this morning to 1.477%, and the 30-year dipped to 2.067%, likely giving the Fed a sigh of relief.  The Covid-19 delta variant initially discovered in India is now spreading around the world, becoming the dominant strain in some countries, such as the U.K., and likely to become so in others, like the U.S. The variant now makes up 10% of all new cases in the United States, up from 6% last week. Studies have shown the variant is even more transmissible than other variants.

Yesterday’s price action saw traders rushing into the tech giants lifting the QQQ to new record highs. At the same time, the DIA suffered some technical damage following through to the downside after failing its 50-day average on Wednesday.  With 40% of the SPY weighted by the tech giants held its ground but fell just short of breaking back above price resistance, and though the IWM recovered substantially, it has the uncertainty of a lower high followed by a lower low.  China’s action tossed a monkey wrench into inflation-related stocks breaking established trends adding another layer of uncertainty as to what happens next.  One thing for sure is that price volatility and huge intraday whipsaw will keep us all guessing.  Stay focused and flexible as we slide into the weekend.  Happy Father’s day!

Trade Wisely,

Doug