A Potentially Bearish Technical Signal

/in , /by

What’s in Today’s Report:

  • A Potentially Bearish Technical Signal
  • Updated Market Outlook (Factoring in GME)
  • Weekly Market Preview:  GME, Stimulus and Economic Data
  • Weekly Economic Cheat Sheet:  Jobs Week

Futures are sharply higher as markets bounce back from last weeks’ declines following a generally quiet weekend.

Stocks are seeing an oversold bounce and are recouping some of Friday’s losses as there was no notable news (positive or negative) on the GME situation, although the Reddit short squeeze crowd is now targeting silver – so they haven’t gone away.

Regarding stimulus, the process is continuing and at this point markets expect a stimulus bill in the coming weeks (likely somewhat smaller than $1.9 trillion but not that much smaller).

Economic data was mixed as the Jan. Chinese Manufacturing PMI missed estimates (51.3 vs. (E) 51.6) while the UK Mfg PMI beat estimates and the EU number was in-line with expectations, but none of those numbers are moving markets.

Today focus will be on the two near term market catalysts:  GME and stimulus.  Regarding GME, if there are any signs of contagion we should expect more volatility.  On stimulus, Biden is meeting with centrist Republicans today but the bottom line is the market expects a lot more stimulus in the coming weeks and anything that alters that view would be a negative.