Situation Awareness
Situation Awareness: Cautious. Equity futures are pointing to a lower open, driven by finger-pointing at rising oil prices and concerns about the Iran situation as well as profit-taking after a huge run to record highs, especially after disappointing price action in TSLA, IBM, HON, and NOW following their earnings reports. Trade mode: neutral and watchful. Focus is on monitoring whether the recent buy-the-dip impulse remains intact, or if the market decides to defy it. Today’s economic calendar includes Initial and Continuing Jobless Claims and preliminary S&P Global U.S. Manufacturing and Services PMI readings. Regime context — data unavailable% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 0 bulls vs. 0 bears. The 5-day trend data unavailable.
SIP: CX CACI GGG OKLO
- What’s working: Reversal signals are highest count scan.
- Leading sectors: Technology (RSPT 3.48), Financials (RSPF 2.5), Communication Services (RSPC 1.36). leading themes: data unavailable.
- Key event: Traders will be watching to see if the ‘buy-the-dip’ trend remains intact.
- Market read: Yesterday’s rally was concentrated in mega-cap tech, but breadth was weaker, suggesting underlying vulnerability.
- DEP watchlist: AMPX, FCEL, MXL
- SIPS: AKTS, AMCX, AVGO
Today’s Market Narrative
Equity futures are signaling a lower open this morning, reversing some of yesterday’s upward momentum. S&P futures are trading -14.00 below fair value and Nasdaq futures are -51.00 below fair value. This pullback is attributed to a combination of factors, including rising oil prices, renewed fears of conflict involving Iran, and profit-taking after a strong rally. Disappointing earnings reactions from key companies like Tesla (TSLA), IBM (IBM), Honeywell (HON), and ServiceNow (NOW) are further weighing on sentiment.
Overnight, Asian-Pacific markets displayed mixed performance, with Japan’s Nikkei (-0.8%) and South Korea’s Kospi (+0.9%) setting fresh record highs. European indices are mainly trading lower, with France’s CAC (+0.2%) outperforming. Bond yields are also creeping higher, with the 10-yr note yield back above 4.30%, putting additional pressure on equities.
The market’s focus will be on whether the “buy-the-dip” mentality, which has been a consistent feature of recent trading, will persist. Traders will be closely monitoring the reaction to today’s economic data releases—Initial Jobless Claims and PMI readings—for clues about the health of the economy and the potential path of interest rates.
Any indications that the economy is slowing down or that inflationary pressures are easing could boost the “buy-the-dip” crowd. Conversely, stronger-than-expected data could exacerbate concerns about further rate hikes and trigger a deeper sell-off. The Iran situation is also a wildcard, with any escalation of tensions likely to further rattle the market.
Macro & Policy
The bond market is showing signs of stress, with the 10-yr Treasury yield climbing to 4.31% overnight. This move reflects concerns about inflation and the possibility of further interest rate hikes by the Federal Reserve. Overnight, U.S. Treasuries are on track for a modestly lower start. Flash April Manufacturing and Services PMI readings were released overnight.
Geopolitical tensions remain a significant concern, particularly the situation involving Iran. While the market initially reacted positively to reports of potential ceasefire talks, the underlying risks remain elevated, as reflected in the nervousness surrounding oil prices ($93.99, +1.03, +1.1%). Bank Indonesia made no policy changes, keeping its policy rate at 4.75%.
Economic Calendar Today
- 8:30 AM ET: Initial Jobless Claims (week ending April 18) – Expected: 212,000 | Prior: 208,000 – A higher-than-expected number could signal a weakening labor market, potentially easing pressure on the Fed to raise rates. The actual number came in at 214,000.
- 8:30 AM ET: Continuing Jobless Claims (week ending April 11) – Prior: 1.809 million – An increase in continuing claims would reinforce concerns about labor market weakness.
- 9:45 AM ET: S&P Global U.S. Manufacturing PMI (Apr P) – Prior: 51.9 – A reading above 50 indicates expansion in the manufacturing sector.
- 9:45 AM ET: S&P Global U.S. Services PMI (Apr P) – Prior: 50.2 – A reading above 50 indicates expansion in the services sector.
- No major earnings reporting of specific setup significance today.
Earnings & Corporate News
Yesterday, Boeing (BA) reported a narrower-than-expected Q1 loss, sending shares +5% higher. Revenue rose 14.0% yr/yr to $22.22 bln, topping expectations, as the company pointed to a strong start to the year and robust demand across its businesses. Conversely, United Airlines (UAL) tumbled after cutting its full-year EPS outlook.
Several companies have reported earnings this morning, including American Airlines (AAL 11.42, -0.08, -0.7%) which beat EPS estimates but guided in-line; American Express (AXP 333.00, +0.10, +0.03%) beat on both EPS and revenue and reaffirmed guidance; Hasbro (HAS 99.98, +9.37, +10.3%) issued upside Q1 revenue guidance and reaffirmed FY26 guidance; Honeywell (HON 205.10, -14.87, -6.8%) beat EPS but missed on revenue and guided lower; IBM (IBM 232.62, -19.24, -7.6%) beat on both EPS and revenue and reaffirmed FY26 revenue guidance. Lam Research (LRCX 263.76, -1.79, -0.7%) beat on both EPS and revenue and guided higher; Lockheed Martin (LMT 540.00, -15.43, -2.8%) missed on both EPS and revenue and guided in-line; Netflix (NFLX 94.47, +1.23, +1.3%) authorized the repurchase of an additional $25 billion of the Company’s common stock; ServiceNow (NOW 89.12, -13.95, -13.5%) reported EPS in-line and revenue in-line; Tesla (TSLA 376.30, -11.21, -2.9%) beat on both EPS and revenue; Texas Instruments (TXN 257.18, +20.87, +8.8%) beat on both EPS and revenue and guided higher.
Adobe (ADBE) announced a $25 billion share repurchase program, providing some support to the software space.
WaveFinder Signal Summary
The scan environment is mixed today. Continuation (2LYNCH) signals are reasonably abundant with 127 signals, but volume isn’t strong. The Reversal scan generated a higher signal count at 145, and is worth watching if the market turn lower. The strongest D9M setup looks to be POET due to the high Chg% and relative volume. Yesterday 79% of stocks traded above their 20 SMA (short-term bullishness) vs only 39% today, indicating weakening breadth. 71.15% of stocks trade above their 40 SMA (intermediate term bulliness) up from 70.36% yesterday, an indication of continued intermediate-term strength.
Today’s Watchlist
- TSLA — Disappointing earnings action, potential short opportunity if price action validates the gap down.
- IBM — Earnings beat but gap down could trigger further selling.
- AAL — Guided in-line, but airline stocks facing cost pressures, looking for downside continuation.
- OKLO — Agreement to advance nuclear infrastructure.
- POET — High Chg% and relative volume may lead to further gains.
- AMCX — Nice uptrend, good RVOL and 2LYNCH signal
Action Codes of the Day
- CRT Controlled Risk Taking — choppy markets demand heightened diligence.
- BTFD Buy The Dip — monitoring whether the recent buy-the-dip impulse remains intact provides an opportunity for BTFD.