Hi Folks.
Before I get to the news this week, I feel compelled to mention that the last two trading days of last week were pretty much textbook for what to look for in the early stages of a correction (meaning significant selloffs may be in the offing).
Most of us can remember the Pandemic selloff of 2020, which started with a couple of days where the Dow shed 300-500 points (on a Thursday and Friday, no less), and then opened the week of Feb. 24-28 with 4 consecutive days of 800-1200 point drops which continued until mid-March, and by the time the dust settled, the Dow had dropped from 29184 to 18194 in just 4 weeks.
The FF Calendar numbers were meaningless during this time, as panic selling due to the pandemic-related shutdowns across the planet turned Buyers into Sellers like usual during times of fright and uncertainty.
I have no idea what's going to happen this week, but just pay attention to the financial news channels next week, and listen to any floor trader interviews that get through. Floor traders tend to be the most honest about what's happening and what they are expecting to happen in the coming hours and days.
And remember, during panic selling, irrationality rules the day, so if price action doesn't match what you think you should be seeing based on posted numbers, don't worry. The market will find it's bottom soon enough. In the meantime, if the market is selling off, look for sell entries only. Don't try and be a counter-trend hero. These are the days where counter-trenders get crushed.
Now, on to the news.
MONDAY: So we actually have news today, for the first time in 2 or 3 weeks. Final Services PMI at 9:45 and ISM Services PMI at 10. The Final Manufacturing numbers came out on Thursday and were swept up in the panicked run for the door by traders, so one can't put too much emphasis on last week's number's impact, as traders were already yanking on the ejection cord before the ISM numbers dropped at 10. Watch earlier price action, and if the market is still shedding triple digit points, pray for a lousy PMI number so you can sell along with them at 10. Loan Officer Survey at 2 and Daly from the Fed at 5 are both non-events.
TUESDAY: Tuesday is the new Monday, almost. Trade Imbalance number at 8:30 and the first sighting of that RCM/TIPP Economic Optimism Report, which is a floater and rarely shows up on the first day it appears on the calendar. So it's pretty much the same as saying No News today. But if yesterday was the start of a real selloff, it likely won't matter as it should take weeks for the market to bottom out.
WEDNESDAY: Crude Oil at 10:30, the 10y Bond Auction at 1:01 (and which is not tradeable as far as I can tell) and a Consumer Credit number at 3:00, which I've never paid attention to and likely won't start today. Play the breakouts of the high/low on the 10:30 5M Oil candle and maybe make a few bucks in the process.
THURSDAY: Lots of junk today. First time Unemployment Claims at 8:30, which I've been ignoring for years, as have most traders, but last week it set a new recent high, so traders will be watching it like a hawk this week. For some reason traders believe a second bad number will cement the Fed's decision to cut rates in September. I don't agree solely because there are a ton of numbers yet to come between now and the Sept. meeting, and Powell isn't going to get cornered into cutting rates based on one or two early numbers. If Unemployment keeps getting worse each week through August, then that's a different story and a rate cut just might be on the table at the next meeting. And none of it will have much if any impact on the markets if we are still in a power dive downwards. As for the rest of Thursday, we have Final Wholesale Inventories at 10, NatGas at 10:30, the 30y Bond Auction at 1:01, Barkin from the Fed jabbering at 3:00 p.m. and a floating Mortgage Delinquencies number which may or may not drop today. None of the later entries will likely have the same impact as the Unemployment number, and if that one comes in at or lower than expected, even that won't make much of a difference.
FRIDAY: Absolutely nothing today. A great day to take off and start the weekend early, unless the market is still irrationally selling off, in which case, sell-and-hold will be the Order of the Day until further notice.
Jeff
