The Fuse
What are futures doing?
Futures are mixed this morning with the Nasdaq in the red along with small caps but industrials and SPX 500 are showing some green. Likely to be a rather boring day barring any news, but look for some opportunities to add plays and take profits when you can, also add some protective puts.
News
Continuation from Thursday’s rally had the STOXX up .2% led by an increase in France. The FTSE added a bit more, .3% while the US dollar index fell .2%. Gold is down as is silver, crude oil slightly gaining ground. German bunds are up 2bps but US 10 yr treasury yields down 2bps. In Japan the Nikkei gained 1.2%, Hong Kong finally up, by .8% but Shanghai down 1%.
Volatility
The VIX really came down hard yesterday with a close under 16%, first time in awhile. It simply means investors/traders are very comfortable with where the market is at and the risk appetite is strong. That may change of course when earnings start to roll in next week./p>
If you are an existing Market Blast or Trader’s Pass member, log in here:
Interest Rates
Rates are not moving much this morning as the yield curve is quiet. Fed funds also quiet, seeing good action in high yield. Next week’s inflation numbers might move the markets a bit more.
Earnings
Strong earnings but cautious guidance from Delta, that stock is down about 4.5% today.
Events
A solid day for the bulls as everything seemed to align in the right direction. Good, broad strength which included not only the semiconductor stocks but also the Mag 7 names (most of them), which helped lift others in need of a push. This is the sort of rally the bulls can appreciate and would like to have more often.
Breadth
Good breadth figures but not a rout by any means. The A/D line was 16-10 bullish, so there was some selling done during the session. Rotation has been the hallmark lately, oscillators are back to flat. New highs continue to crush new lows, heading into a Friday with so many unknowns we could see a bit of profit-taking.
Volume
Nothing to write home about on volume today. There was some good turnover early on, also big option volume recently and yesterday as well. As we move closer to more earnings announcements look for the volume levels to accelerate, for now just the calm before the storm. Just because volume was low does not leave the bulls too vulnerable here.
Support Levels
As we experienced some ‘dipping’ this week into lower levels and probed support, the indices held firm and now seem ready to tackle new highs again – across the board. The SPX 500 and Industrials are closest but the IWM and Nasdaq can move swiftly. Just in time for earnings season, getting the crowd all hyped up and energized.
The Internals
What’s it mean?
A pretty solid move by the markets yesterday supported by strong internals. The VOLD was the standout, finishing at the highs of the session but the ADD and ADSPD failed to impress. VIX was down all day and finished on its lows, below 16%. That is a pretty low figure. TICKS were very strong and heavy green all day long, a slew of buy programs. Put/calls fell, which is bullish.
The Dynamite
Economic Data:
- Friday:N/A
Earnings this week:
- Friday:DAL
Fed Watch:
We heard from the new Chairman last week of the FOMC and he did not reveal much, as expected. With some inflation data coming out soon before the next meeting this month markets will be watching closely. Friday’s job report with fewer than expected created a bit of a buzz for fed futures, which now see less of a hike chance in 2026.
Stocks to Watch
Memory Stocks – A massive torching this week of Micron, Sandisk and others helped to squash some recent gains in semiconductors. This is all mechanical selling here, but then the buying was the same. Look for a rebound this week.
Apple – Strong week for the big iPhone maker and a solid finish, not far off the old highs. A followthrough week would be huge for this name before earnings hit end of July.
VIX – Coming into a holiday week volatility is often sold off hard and then rebounds once the market opens again. That would be more selling as futures sell off with rising volatility, but it doesn’t always happen — just usually.
[/MM_Access_Decision]
