The Fuse
Equity futures are up strong today as there seems to be good followthrough from Friday’s record breaking session. With a flood of earnings to be released this week there could be a bullish tint to the week. Options expiration for October is on Friday.
Bond markets are closed today in observance of the Columbus Day holiday.
Stocks in Europe were mostly flat, the dollar climbed .1% while crude dropped 1.8% on heavy volume. Natural gas also fell .6%, gold retreated a small amount. Stocks in Asia were mixed, Japan was closed but Shanghai was up 2.1%, Hong Kong down .9%.
No earnings today but several will be out Tuesday including UNH, C, GS, BAC, JNJ, PNC and SCHW.
We certainly have to worry about the Middle East conflict and how that is heading towards a much more concerning page. Oil prices are volatile now as is gold, we’ll have to watch these for opportunities to buy lower.
Terrific breadth on Friday with stocks soaring to new highs. When you have this condition it creates more upside opportunity. Oscillators are right near the flat line and if they can get over that hump we see more rallying in the short run. Again, new highs just crushing new lows.
Volume trends the last couple of days last week were very positive. Good, strong volume with stocks moving higher means we are seeing big institutions coming in with some heavy force buying stocks hand over fist. That is a huge bullish condition that is catching short sellers looking the wrong way.
Support levels are hard to read when we have stocks making new highs. The natural level might be the 20 day moving average or perhaps even the 10 day moving average to slow things down. The 20 ma for the SPX is about 2% lower, the Nasdaq about 1.5% lower if the market needs a retreat.
The Internals
What’s it mean?
That was some session Friday! The internals were on fire everywhere, that VOLD shot up and finished higher than Tuesday’s rally. ADD also joined in, the ADSPD nearly a trend up day. TICKS were super strong and green, buy programs hitting all session while the VIX did make a modest run lower. Followthrough always key.
The Dynamite
Economic Data:
- Monday:Bond Market closed, Fedspeak
- Tuesday:Empire State, Fedspeak
- Wednesday:import prices
- Thursday:Retail sales, jobless claims, philly fed, industrial production, cap utilization, biz inventories
- Friday:housing starts, building permits, fedspeak
Earnings this week:
- Monday:
- Tuesday:UNH, C, JNJ, BAC, SCHW, GS, PNC, WBA, UAL, IBKR, FULT
- Wednesday:ASML, MS, ABT, USB, SFY, AA, KMI, CSX, DFS, EFX
- Thursday:TSM, TRV, ELV, INFY, MTB, NFLX, ISRG, WDFC, MRTN,
- Friday:CMA, SLB, AXP, PG, RF, ALLY
Fed Watch:
More Fedspeak this week but not as much as last, when we had 15 speakers in total! Whew! The inflation reports last week were mixed but they still see the fed cutting at least once and likely twice before the end of the year. Last week’s release of the Fed minutes pretty much told the story there, rates have backed up to be more aligned with fed talk.
Stocks/Issues to Watch
Retail sales – With a huge jump in retail spending over the summer will this be cooling down before the holidays?
Earnings – Later in the week some big names will report earnings, and this will likely be a market moving event.
One thing to remember, you don’t want to be too short during earnings season.
Boeing – Not that it matters much, but Friday after the close the company snuck in their earnings results early, a huge loss and 17K jobs being cut. Who does this on a Friday night, like a massacre? The stock may be hit hard.
