Equity futures are trying to turn positive this morning as the markets move toward an overbought reading. As a result of that (when it occurs), we could expect a sharp pullback.
Interest Rates are up slightly as the treasury market will have some heavy bond auctions today.
Not much on the news front this morning, China missed on some economic data while more troubles in Europe as retail sales in Italy were down and German industrial production was weaker.
Decent earnings beat this am from JILL but a miss from Campbell’s Soup. Last night a miss from avocado grower Calavo. Today we’ll hear from Smartsheet, GameStop and Trip.com.
Nothing much to worry about right? Market is biding time until the next Fed meeting, which appears that may be a contentious one.
Breadth bounced back nicely and remains overbought and on a buy signal.
It was another light volume session.
We nearly saw 4,300 on the SPX 500. 4,299 was the high of the session Monday and that could mark the high for this latest move unless there is a catalyst to get buyers off the sidelines. A consolidation that does not break 4,250 would be ideal for the bulls.
What’s it mean?
A pretty strong day on a solid reversal. It seemed markets were going to flounder but a midday surge in buying and volume nixed that idea.
VOLD had a nice run higher today as did the ADD, which seemed to catch the bears off guard. VIX is dangerously low here under 14%, but until some protection is bought that will be the theme. Put/calls plunged once again. We’re on the lookout for some sort of reversal before the end of the week.
- Wednesday: Consumer credit, crude inventories
- Thursday: Jobless Claims, Fed Balance Sheet
- Friday: Baker Hughes Rig Count
Earnings this week:
- Wednesday: CPB, LOVE, OLLI, JILL, VRA, GME, SMTC, SMAR, RENT, HCP
- Thursday: TTC, SIG, FCEL, DOCU, PL, MTN, NAPA
- Friday: NIO
Fed Watch: Fed Officials are ‘officially’ on a quiet period. The next meeting starts in a week. Fed Futures are seeing a 1 in 4 chance of a rate hike at the June meeting.
Issues/Stocks to Watch this Week
Apple – WWDC is happening this week, and all eyes will be on some new products that are in development.
Crude Oil – An OPEC+ meeting was to be held this past weekend, if some production cuts are announced we could see big moves in crude.
VIX – Volatility is down sharply and as such protection is rather cheap to come by. I don’t expect to see volatility this low for much longer.