EB Daily Market Report - Thursday, April 18, 2024

Upcoming Schedule

This week I'll be with family, so my scheduling might be a little off, though I believe most of the reports that I usually do I should be able to produce without too much issue. I might send out ChartLists as of Thursday's close instead of Friday's, meaning that they should be on our website sometime Friday morning. The timing of the Weekly Portfolio Report could be impacted, I'm just not sure at this point.

The bigger scheduling issue will be next week. I will be leaving Wednesday midday on a trip and will not return until sometime Sunday afternoon or evening. ChartLists won't be updated until the following week. The Weekly Portfolio Report will likely be postponed until the following week. When I return Sunday afternoon or evening, I'm planning to record a Weekly Market Recap Video, that will likely be in lieu of a Weekly Market Report (written) that I typically provide on Monday. I'll need Monday to prepare for our final part of our Educational Series, "Trading Gaps". I doubt that I'll have time to record a Fab 5 setups video.

I apologize for any inconvenience in advance, but it's always good to take brief vacations. I will be following the market periodically while I'm gone and if I see anything unusual, I'll pass it along to John Hopkins, who will provide a very brief market update Wednesday, Thursday, and Friday of next week. Everything should be completely back to normal by Monday, April 29th.

Model ETF Portfolio Draft

I'll be hosting our Model ETF Portfolio Draft today at 5:30pm ET. I will be discussing current market themes and our unique "ETF Analyzer" spreadsheet, where I'll share the best ways to utilize this important tool. I will pass along a few ETFs on our updated Strong ETF ChartList (SETFCL). However, we will NOT draft the actual ETFs for the next quarter today. The stock market is in a very precarious situation short-term, so announcing the ETFs in our next portfolio will be delayed until early next week - likely just before my trip on Wednesday.

Executive Market Summary

• Futures were slightly higher overnight and our key indices did climb at the opening bell
• After a promising morning of buying, the bears have returned and our major indices reached or neared new recent lows this afternoon
• Transportation ($TRAN, -0.08%), after breaking below critical support near 15200 yesterday, is near the unchanged line at last check
• The 10-year treasury yield ($TNX) gained 6 basis points today, closing at 4.65% a few moments ago
• The Volatility Index ($VIX, -1.59%) saw early strength, but then pulled back to a 3-day low at 17.21, before rallying a bit earlier this afternoon
• Cryptocurrencies are rebounding as bitcoin ($BTCUSD, +3.67%) pushes back above 63000 one day after dipping below 60000
• Commodities are mixed, but one very bullish signal is copper's ($COPPER, +2.02%) surge to highs not seen since June 2022; this is typically a signal of improving global economic activity
• The sector leaderboard is jumbled with 5 sectors higher, 5 sectors lower, and 1 unchanged; technology (XLK, -1.03%) remains decidedly weak, though
• Netflix (NFLX, -0.94%) will report its latest quarterly results after the bell today

Market Outlook

Early this morning, we saw what appeared to be a nice recovery. I said on my show this morning that I'm not trusting morning strength. I want to see buyers at the end of the day, not the beginning of the day. The problem, technically, is that we're in the midst of a downtrend and we're seeing failures galore at the declining 20-hour EMAs. Check out the SPY, QQQ, and IWM:

SPY

QQQ

IWM

Maybe we'll see a bit of a short-term reprieve, given the positive divergences that are printing on the SPY and IWM?

Sector/Industry Focus

I run down my long-term signals periodically and none are suggesting that the current weakness we're experiencing will become entrenched long-term. In other words, this is not the start of a lengthy secular bear market - at least not in my view. But....there are current short-term technical violations that we cannot ignore. Perhaps the most important is the recent breakdown in the transports ($TRAN), which just three weeks ago looked as if it was ready for a major launch to the upside. Things have changed, however, especially as more market participants realize that any cut in the fed funds rate by the Fed will likely have to wait much longer than originally anticipated. These types of fundamental changes need to be worked through and that seems to be the message the market is sending us right now. First, let me show you what I feel is a very significant breakdown in the TRAN:

ChartLists/Strategies

You have to be a daredevil to take on new positions at this time. I'll pass.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Thursday, April 18:

TSM, NFLX, ISRG, PPG, WAL

Friday, April 19:

PG, AXP, SLB, WIT, FITB, HBAN, RF

Economic Reports

Initial jobless claims: 212,000 (actual) vs. 215,000 (estimate)

April Philadelphia Fed manufacturing index: 15.5 (actual) vs. +0.0 (estimate)

March existing home sales: 4,190,000 (actual) vs. 4,180,000 (estimate)

March leading indicators: -0.3% (actual) vs. +0.0% (estimate)

Happy trading!

Tom