Futures point to another gap up bullish open as the Tokyo Olympics begin under a state of emergency. Infection rates topped 56,000 here in the U.S. yesterday, with the 3rd straight day over 50K. However, though there has been a noticeable decline in volume, the bulls appear undeterred with new record levels within striking distance. If we have the ability to ignore inflationary pressures and rising jobless claims, don’t bother us with all those delta variant stories we have stocks to buy! Stay with the trend but stay focused as we approach overhead resistance just in case the bulls run stumbles.
Asian markets traded mixed overnight, with tech falling due to China’s regulatory fear. European markets advance this morning, keying off earnings results. Though we struggled to gain traction during the day yesterday, the overnight futures are once again pushing for a bullish gap up open to close out this volatile week of price action.
Economic Calendar
Earnings Calendar
We have a little slower day on the Friday earnings calendar with 41 companies listed, but a large number of them are unconfirmed. Notable reports include AXP, HON, KMB, NEE, RF, & SLB.
News & Technicals’
The Tokyo Olympics kick off today under a state of emergency, with spectators banded, resignations from sexist remarks, and a bear near a stadium used for matches. Here in the U.S., the new infections topped 56,000 yesterday, with three days in a row over 50k. According to the CDC, they are considering masking requirements but say at this point, those vaccinated are okay without masks. They went on to say the delta variant is one of the most infectious respiratory diseases seen by experts. In its annual report, the IMF said the Fed must carefully communicate its thinking of the eventual withdrawal of the easy monetary policies. They raised concerns that higher U.S. interest rates will drain capital flows from emerging markets at a critical time. Hmmm, why is IMF worried about interest rates when our Fed says inflation is transitory?
Another bullish day as indexes rallies back toward resistance highs with possible new records just around the corner. Unfortunately, as indexes stretch up, there has been a noticeable decline in volume, and the Absolute Breadth Index continues to show a struggle with momentum. In just three trading days, the Dow up more than 1000 points from the Monday low, increasing the danger if the market should stumble. Inflationary pressures, increasing jobless numbers, and the rapidly rising infection rates are just a few of the possible stumbling blocks placed in the path of this bull run. Stay with the trend but remain focused to avoid complacency. This morning the 10-year Treasury ticked up to 1.281%, and the 30-year rose to 1.917% ahead of PMI.
Trade Wisely,
Doug
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