Looking at the news stack for this week, I need to take a minute to just level set today. It’s going to be a busy one.

Big week for earnings and if anything we will exit the week with more clarity on what some very big players are thinking. Just a quick sample of who is on deck:

Monday – SOFI, CFLT

Tuesday – XOM, UPS, GM, PFE, CAT, AMD

Wednesday – META (Facebook)

Thursday – AMZN, AAPL, GOOG, F, QCOM

There are plenty more but that will suffice and provide a very broad brush view of the current state of affairs.

It’s equally as busy on the economic calendar:

Tuesday – Employment Cost Index, Case-Shiller Home Prices, Chicago PMI

Wednesday – JOLTS Job Openings, Construction Spending, ISM Manufacturing Data

Thursday – Jobless Claims, Factory Orders

Friday – Unemployment Rate, Nonfarm Payrolls, Participation Rates, Average Hourly Earnings

I didn’t mention the Federal Reserve meeting and their rate decision on Wednesday, markets expect a 25bps increase, a downshift from the previous 50bps. Most importantly this is the rate where markets expect the Fed to “settle” until they are willing to signal possible intentions to ease.

Markets will be looking/searching/reaching for any type of Dovish tilt. Are we close? Inflation is coming down, can we pause perhaps? Do you really need to take it over 5%? Anything? Bueller?….. Bueller?…..

We will not get another Fed rate decision until March 22nd.

---

Personally I think the bigger story is earnings. When you review that list of companies reporting above, forward earnings guidance is where the rubber meets the road.

Take Amazon for example, they were one of the first to announce serious job cuts and they provided Q4 earnings guidance at the time a mile wide, anywhere between $0 and $4 billion. We either won’t make a dime or who knows, it may not be so bad after all?

As I type this the VIX (Volatility Index) is still under 20, although it’s already up 7% this morning, perhaps waking up to the fact just how much is at stake this week. If it remains under 20 at 4pm Friday, I will be very surprised and equally intrigued to the true mechanics behind the scenes.

Lastly we have to talk about the technicals, because we are at some very key levels.

The SPY (S&P 500 ETF) is at ~403 still above the 200 day at ~395 where all the major moving averages are currently converging. This is tricky because if we break lower and fail to find support at the 200 day, the other averages could dip lower as well and fail to cross to the upside.

Small caps (Russel 2000 ETF: IWM) are above the 200 day also with their 20 and 50 day moving averages having already crossed above.

The Nasdaq 100 (QQQ) is in the most precarious spot of all, hovering slightly below its 200 day at ~292. Next serious support is around the 20 day and 50 day at ~280. Needless to say depending on how these earnings reports go this week, a retest of the 280 level is in play.

---

Be prepared for a wild ride…

Have a good week.