Commentary: Paul Ebeling on Wall Street, Q-1 Earnings Season is Here

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What happened last week

All indices move higher, and the NAS Comp and PHLX Semiconductor Sector were the leaders. Meanwhile, the S&P 500 marked another record high. As the market has come to grips with the action in the fed funds rates.
Some stocks are getting extended near term due to their recovery success. Others are looking ready to move up from solid tests. Overall, recovery stocks are working and are showing good patterns.

The market is in a nice rotation, all of the leaders showed solid Bullish action ahead of earnings.

The Technicals

S&P 500 was up 7 of 10 sessions, putting it in the extended mode near term. It is in its channel as it approaches the upper marks.

The NAS Comp is not too far from new highs, but it is also extended a bit near term, as it has also put in a 1,000+ point move during a strong 10 sessions running. It gapped over the 78% Fibo retracemen mark Thursday and found buyers off of a 2-day test after marking that mark.

What to expect this week

Mr. Biden’s not confirmed regulators are wasting no time trying to unravel Wall Street-friendly measures introduced under President Trump (45), using trick quick-fix legal tactics.

Small caps and cyclicals have been stellar outperformers over the past yr. They were discounting the recovery and re-opening that we are about to see. So, now comes execution risk and potential surprises that are not priced in.

The US big banks reporting Quarterly earnings results this week inclding: JPMorgan Chase $JPM, Goldman Sachs $GS, Wells Fargo $WFC and Morgan Stanley $MS may well reflect a bottom-line boost from this higher-rate environment and trading activity

Retail sales: Key look at US consumer spending will be released Thursday, with consumption poised to get a boost from the stimulus checks and Spring weather. Economists expect US Commerce Department’s March retail sales report to show a monthly gainer of 5.4%

Have a healthy week, Keep the Faith!