Stocks Rise on Tuesday, Stimulus & Earnings in Focus
The US majors are extending yesterday's gains with European and Asian markets up across the board, and leading the way. The S&P broke above the 21 day EMA in the overnight session, after seeing a rejection during yesterday's cash market. You guys know the game - when bears go to sleep, central banks show up and raid the barn. I see no reason for the continued irrational exuberance today, and so I suspect we're seeing the last of the interim bounce, which will quickly reverse by EOD/tomorrow.
The Dollar (DXY) continues to break out, and although we may see a retest of the neckline around 90.75, we're likely going much higher in the near term, as traders continue to digest the repetitive, but weakening "hope" and "optimism" driven narratives, spoon fed to them by the media each day. We're seeing Vix take a breather at a 27 handle, and we're sitting just north of the highway of MA's on the hourly. As we mentioned yesterday, it's possible we trade in a tight range here, while markets exaust the last of the dip buying.
We're seeing notably less euphoria over in the WSB crowd, with many of the most shorted names significantly off their recent high's, and heading lower. After hitting an 8 year high, Silver is taking a beating today, and is down almost 10% since yesterday's open. Needless to say, when the clearing houses raised Robinhood's deposit requirements 10-fold overnight recently, they proved to the world that margin is a weapon, and it's controlled, operated, and managed by the clearing house, not the investor, and not the broker. Some of us in the industry understand this, as we've seen this type of behaviour in the past, but many traders are not aware of the power of clearing houses. They mistakenly blamed Robinhood, who had no choice in the matter. Traders should be extremely cautious with their leverage right now in a market which has become more corrupt and fraudulent with each passing day.
Amazon and Alphabet release earnings after the close, and I expect to see a blow out quarter, as usual. With these 2 giants potentially seeing some flows later/tomorrow, and possibly raising the tide for all boats this week, we may see further pressure on Vix. We'll have to wait and see what the numbers look like, and then reassess our outlook based on the technicals/ prevailing sentiment.
Lastly, with Democrats threatening to move ahead with their $1.9 Trillion stimulus proposal without the support of Republicans, we should see a slew of MSM headlines today about how awesome this proposal is going to be, and how it will change everything for average American households. Republicans are offering up a measly $600 Billion proposal, which I imagine is just a formality, as Democrats now have control of the congress, senate, and white house.
Crazy fact of the day: According to Zero Hedge, over 75% of companies in the S&P have beat earnings expectations in the past 4 quarters in a row. 84% have beat in the most recent quarter. What pandemic?
Thanks for your time today guys, and I hope you enjoyed the analysis! Stay tuned for our live play-by-play to begin shortly. Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
The Dollar (DXY) continues to break out, and although we may see a retest of the neckline around 90.75, we're likely going much higher in the near term, as traders continue to digest the repetitive, but weakening "hope" and "optimism" driven narratives, spoon fed to them by the media each day. We're seeing Vix take a breather at a 27 handle, and we're sitting just north of the highway of MA's on the hourly. As we mentioned yesterday, it's possible we trade in a tight range here, while markets exaust the last of the dip buying.
We're seeing notably less euphoria over in the WSB crowd, with many of the most shorted names significantly off their recent high's, and heading lower. After hitting an 8 year high, Silver is taking a beating today, and is down almost 10% since yesterday's open. Needless to say, when the clearing houses raised Robinhood's deposit requirements 10-fold overnight recently, they proved to the world that margin is a weapon, and it's controlled, operated, and managed by the clearing house, not the investor, and not the broker. Some of us in the industry understand this, as we've seen this type of behaviour in the past, but many traders are not aware of the power of clearing houses. They mistakenly blamed Robinhood, who had no choice in the matter. Traders should be extremely cautious with their leverage right now in a market which has become more corrupt and fraudulent with each passing day.
Amazon and Alphabet release earnings after the close, and I expect to see a blow out quarter, as usual. With these 2 giants potentially seeing some flows later/tomorrow, and possibly raising the tide for all boats this week, we may see further pressure on Vix. We'll have to wait and see what the numbers look like, and then reassess our outlook based on the technicals/ prevailing sentiment.
Lastly, with Democrats threatening to move ahead with their $1.9 Trillion stimulus proposal without the support of Republicans, we should see a slew of MSM headlines today about how awesome this proposal is going to be, and how it will change everything for average American households. Republicans are offering up a measly $600 Billion proposal, which I imagine is just a formality, as Democrats now have control of the congress, senate, and white house.
Crazy fact of the day: According to Zero Hedge, over 75% of companies in the S&P have beat earnings expectations in the past 4 quarters in a row. 84% have beat in the most recent quarter. What pandemic?
Thanks for your time today guys, and I hope you enjoyed the analysis! Stay tuned for our live play-by-play to begin shortly. Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
