It’s been a wild week for US indices, particularly yesterday which saw big declines before an late afternoon rebound. It appears that the break of 16,000 triggered a wave of stop loss selling and perhaps forced liquidations from margin calls that may have caused a short-term washout. Today’s action may give us a better indication of whether US markets are ready to break their free-fall or keep on going.
In Europe today, the answer has been to keep on going with the Dax
and FTSE both taking out yesterday’s lows. In the US, the Dow has dropped back under 16,000 but continues to find support above yesterday’s low near 15,850. Should that level hold, a double bottom may form putting in a floor for now but a failure would kick off another downleg. Regardless, with QE3 ending later this month and earnings season underway, we may see markets remain volatile for the next month or so which may create trading opportunities for bulls and bears depending on the day and even by the hour it seems.
Better than expected US jobless claims has reminded traders that the US economy remains strong despite a strong of misses yesterday. Earnings and guidance have been disappointing for the most part which could see Netflix, Wal-Mart and eBay active today.
We could see more action and the potential for reversals through the day. First up are industrial production and Philadelphia Fed with traders looking for confirmation of yesterday’s weak retail sales and Empire Manufacturing performances.
Later in the morning energy comes into focus with both Natural gas and crude oil inventories out today due to the Monday holidays. WTI continues to test key support in the $77.00 to $80.00/bbl range. Also today, Apple could be active with a launch event scheduled for its newest iPads and iMacs.
Note, to keep up with my thoughts on trading through the day follow me on Twitter @CCieszynski_CMC
Also for more market analysis, check out comments from my colleague Ric Spooner below.
Netflix $0.96 vs street $0.92 net subscriber adds domestic 980K way short of guidance 1,330K, guides next Q earnings to $0.44 way short of street $0.87, net sub adds domestic 1.85M below street 2.18M, international 2.1M vs street 2.6M
Wal-Mart cut 2015 sales growth guidance to 2-3% from 3-5%
Ebay $0.68 vs street $0.67, guides next Q EPS to $0.88-$0.91 vs street $0.91, cuts FY revenue guidance to $17.85B-$17.95B from $18.00B-$18.30B
Goldman Sachs $4.57 vs street $3.21, raises dividend 9.1%
Mattel $0.98 vs street $1.02
American Express $1.40 vs street $1.37
Economic reports released overnight and this morning include:
US jobless claims 264K vs street 290K
Canada manufacturing sales (3.3%) vs street (2.0%)
Eurozone consumer prices 0.3% as expected
Eurozone core CPI 0.8% vs street 0.7%
Economic reports due later today include:
9:15 am EDT US industrial production street 0.4%
9:15 am EDT US manufacturing production street 0.3%
10:00 am EDT US Philadelphia Fed street 19.8
10:30 am EDT US natural gas storage street 91 BCF
11:00 am EDT US crude oil inventories street 2.4 mmbbls