06/29/2022 ES Trade Plan Worksheet

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Jun 292022

Consumer Confidence dropped to 98.7 in June as concerns about high gas and food prices, (i.e. inflation) increase.  The level is the lowest in over a decade.  The reading conveys a larger risk of recession, kind of a self-fulling prophesy; if consumers slow buying, the economy hurts and a recession is possible.

Tesla (TSLA) is down premarket after announcing they laid off about 200 hourly workers of their auto pilot system.  It’s likely Tesla will need to make many more cost cuts as China’s Covid shutdown and Tesla’s losing “investment” in bitcoin impact the company’s finances.

Disney (DIS) shares are up premarket after the Disney board decided to renew CEO Bob Chapek’s contract by 3 years.  Chapek has steered the company through tough times; the pandemic and fights with the Florida governor.

Pinterest (PINS) shares are up over 5% premarket after news CEO and co-founder Ben Silbermann will leave the company to make way for former Google executive Bill Ready.

Premarket earnings include BNED, BBBY, GIS, MKC, and PAYX.

The economic calendar includes GDP @ 8:30am ET and Oil @ 10:30am ET.

Fed speakers include Powell @ 9:00am ET and Bullard @ 1:05pm ET.

Volatility remains elevated and ticked up from Tuesday’s selloff.

Whale bias is bullish into the US session open.


 Posted by at 7:34 am

06/28/2022 ES Trade Plan Worksheet

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Jun 282022

The ”bullwhip effect” is starting to show up in corporate earnings which should lead to a turn down in inflation.  The “bullwhip effect” is when companies over-react to customer demand, over-order inventory which trickles down to wholesalers and manufacturing supplying or creating more products, using more resources which drive resource prices up.

The companies then build too much inventory which will need to be discounted to sell since it costs more to store the inventory than to sell at a discount.  We’re seeing drops in metal, commodities, and energy prices as a result.

Oil and Cotton have fallen sharply since their peaks.  Lower oil prices should trickle into lower gasoline prices over the next several weeks, but current prices will impact June CPI numbers.

China cut their quarantine time down for inbound travelers from 14 days to 7 days.  China had no new Covid infections on Tuesday.  Markets are viewing this as good for business in the world’s second largest economy.

Morgan Stanley (MS) is up premarket after they became to first big bank to raise dividends after passing the Fed’s stress test.  Goldman Sacs (GS), Wells Fargo (WFC), and Bank of America (BAC) are all expected to raise their dividends.

Nike (NKE) is down premarket after warning higher transportation costs and the stronger US dollar will hurt profit margins.  No corporate earnings of note for Tuesday.

The economic calendar is full with Trade Balance and Wholesale Inventories @ 8:30am ET, HPI and S&P/Case-Shiller 20-City Composite @ 9:00am ET, and Consumer Confidence and Richmond Fed Mfg Index @ 10:00am ET.

Volatility continues to drop as we enter the summer doldrums where volatility and volume drop as traders take vacations.

Whale bias is bullish but on light overnight volume.


 Posted by at 7:21 am

06/20/2022 Juneteenth Federal Holiday

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Jun 202022

Ok, I’ll admit that I totally forgot about this new Federal holiday and went to work as usual this morning… On June 17, 2021, Congress passed legislation making June 19th a Federal holiday called Juneteenth National Independence Day. The date marks the day that Union General Gordon Granger’s June 19, 1865 proclaimed that Texas was freed from slavery. Texas, along with other Southern states had outlawed Abraham Lincoln’s Emancipation Proclamation. This year, the first Federally recognized Juneteenth falls on Monday, June 20. US stock markets are closed today.

 Posted by at 6:52 am