Jeff Bishop Weekly Money Multiplier | Will the Buying Stop Soon?

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One of the headlines on Barron’s the other day was titled This Bull Market Has No Expiration Date. Now, that sounds wildly optimistic, but we are near all-time highs again, and the S&P 500 is on a 7-straight day winning streak.

However, I know, when the majority of the players in the market get complacent and greedy…market volatility is just around the corner.

But right now… there are several reasons to be bullish stocks

  • Reports are that the U.S. and China trade talks are going well and a deal could be announced soon.
  • Strong March employment data (196K jobs added vs. 177K estimated)
  • A dovish Fed

If you’re wondering, I like to look through economic data, watch market volatility, and other market internals. I do it to get a feel for market sentiment.

So, while I think stocks are overheating here… I’m waiting for my money indicator to tell me what to trade and whether to be long or short.

That said, there are many symbols I’m currently watching that include NDAQ, WTW, KL, ROKU, and SHOP… not all of them are bullish.

Furthermore, it’s a critical week for stocks, as earnings season kicks off again, with the big banks on Friday.

Read on for the full earnings and economic schedule, as well as, my market thoughts.

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Will the Buying Stop Soon?

The market ended higher… yet again, and it’s something we figured would happen. The S&P 500 Index notched its seven straight winning session – the longest streak in a year and a half… and it’s just a tad over 1% off its all-time high. You see, there haven’t been many risks on the table right now. But that’s all changing very soon.

The banks are kicking off earnings season on Friday with JPMorgan Chase (JPM) reporting in the morning. Now, we’re going to be focused on major earnings announcements in the coming weeks… seeing whether there actually has been growth.

Right now, what we’re noticing is just relentless buying… and little overnight volatility in the markets. That tells us one thing: the quants may be leading this rally. These quants are just relying on mathematics to buy the market… and they might be ignoring the fundamentals. If we see a downtick in earnings… well, my educated guess would be these quant hedge funds will dump their long positions.

But what are Weekly Money Multiplier clients and I watching?

Well, we’re keeping an eye on:

  • The 10-Year Treasury and 3-Month Treasury yields.
  • Corporate earnings.
  • U.S – China trade talks. There’s still some risk on the table with this because Intellectual Property (IP) theft and tariffs still remain major issues.
  • Brexit.
  • Tech sector. Profits have been shrinking at an alarming rate with the tech sector… and valuations have been inflating. Moreover, semiconductor orders have slumped.
  • The Federal Open Market Committee (FOMC). With the jobs market showing some signs of growth… it’s going to be interesting to see what the Fed does and says.

What We’re Watching in SPY and $VIX

Here’s what I’m watching with the SPDR S&P 500 ETF (SPY) and the CBOE Volatility Index ($VIX).

Compare that hourly chart to that of the $VIX.

Looking at the $VIX and the SPY, you’ll notice they’re inversely related. In other words, when the $VIX is at extreme points (the blue encircled areas)… and you’ll notice the blue line cross above the red line… it indicates the market could pull back and fall. If the blue line crosses below the red line, that signals it might be time to get long the market.

That’s what I call the money pattern. The specific pattern we’re looking for here is for the blue line to cross below the red line in the SPY… coupled with the $VIX at extreme points, and the blue line crossing above the red line.

Right now, we’re seeing the $VIX below 13 – that’s considered an extreme point. The SPY also looks like it’s shaping up for a bearish move.

Despite the market being relentless… I can’t ignore the technicals because we’ve seen this time and time again.

That said, let’s take a look at what’s on tap for the economic and earnings calendar. Now, the earnings calendar will be pretty light this week. However, next week is when things really start to pick up… and there should be plenty of opportunities out there for Weekly Money Multiplier clients.

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Monday April 8, 2019

Economic Calendar

  • 10:00 AM EST                 Factory Orders
  • 10:00 AM EST                 Durable Goods Orders

Earnings Calendar

  • No notable earnings.

Tuesday April 9, 2019

Economic Calendar

  • 6:00 AM EST                   NFIB Small Business Optimism
  • 7:45 AM EST                   ICSC Weekly Retail Sales
  • 8:55 AM EST                   Johnson/Redbook Weekly Sales
  • 10:00 AM EST                 JOLTs Job Openings
  • 4:30 PM EST                   API Weekly Inventory Data

Earnings Calendar

Earnings Before Open

  • Lindsay Corp. (LNN) implying 7.81% move (monthly contracts). Historical average move 8.62%.
  • Shaw Communications (SJR) implying 4.22% move (monthly contracts). Historical average move 4.44%.

Earnings After Close

  • PriceSmart (PSMT) implying 9.78% move (monthly contracts). Historical average move 10.61%.
  • Levi Strauss & Co (LEVI) reporting after the close. Note: This was a recent initial public offering (IPO) and there are no options available yet.

Wednesday April 10, 2019

Economic Calendar

  • 7:00 AM EST                   MBA Mortgage Applications Data
  • 8:30 AM EST                   Consumer Price Index (CPI)
  • 10:30 AM EST                 Weekly DOE Inventory Data
  •  2:00 PM EST                   FOMC Meeting Minutes
  • 2:00 PM EST                   Monthly Budget Statement

Earnings Calendar

Earnings Before Open

  • Delta Air Lines (DAL) implying 4.11% move. Historical average move 3.95%.
  • MSC Industrial Direct (MSM) implying 6.17% (monthly contracts) move. Historical average move 7.79%.

Earnings After Close

  • Bed Bath & Beyond (BBBY) implying 12.91% move. Historical average move 15.46%.

Thursday April 11, 2019

Economic Calendar

  • 8:30 AM EST                   Weekly Jobless Claims
  • 8:30 AM EST                   Continuing Claims
  • 8:30 AM EST                   Producer Price Index (PPI)
  • 9:30 AM EST                   Fed’s Clarida speaks at annual IIF Meeting in Washington
  • 9:45 AM EST                   Bloomberg Consumer Comfort Index
  • 10:30 AM EST                 Weekly EIA Natural Gas Inventory Data

Earnings Calendar

Earnings Before Open

  • Fastenal Co. (FAST) implying 6.21% move (monthly contracts). Historical average move 7.97%.
  • Apogee Enterprises (APOG) implying 9.89% move (monthly contracts). Historical average move 12.29%.

Earnings After Close

  • No notable earnings.

Friday April 12, 2019

Economic Calendar

  • 8:30 AM EST                   Import Prices
  • 10:00 AM EST                 University of Michigan Confidence
  • 1:00 PM EST                   Baker Hughes Weekly Rig Count

Earnings Calendar

Earnings Before Open

  • JPMorgan Chase & Co. (JPM) implying 3.12% move. Historical average move 2.23%.
  • Wells Fargo & Co. (WFC) implying 3.27% move. Historical average move 3.28%.
  • PNC Bank (PNC) implying 3.29% move. Historical average move 3.31%.
  • Infosys Technologies (INFY) implying 6.59% move (monthly contracts). Historical average move 4.74%.
  • First Republic Bank (FRC) implying 4.27% move (monthly contracts). Historical average move 5.9%.

Source: WeeklyMoneyMultiplier.com | Original Link

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