Good day! My outlook for the week remains unchanged from this weekend. Following last week's gains, it was little surprise that we saw things slow down as the week kicked off. The index futures were trading off premarket highs following gains into the early-morning hours and continued to sell off into 11:15 a.m. ET, but the move was narrow intraday and the intraday trading range narrowed even further after noon.
As I mentioned in yesterday's column, it will be difficult for the bears to regain the upper hand on the daily time frame very quickly, but the bulls will find the path more difficult as well. Securities focused on earnings and other news, as well as those in the same sector, will garner the most interest.
Dow Jones Industrial Average (Figure 1)
The earnings news afterhours on Monday failed to reignite the bulls. Netflix (NFLX) shares were down over 4% following news that the company's earnings guidance for next quarter is weaker than previously anticipated. The index futures were up slightly afterhours on a continuation of the morning reversal, but fell back quickly as the evening wore on. By 1:00 a.m. ET on Tuesday morning they were back at the zone of Monday's morning lows.
Ahead of Tuesday's open, watch for earnings from Delta (DAL), Ford (F), Coca-Cola (KO), and 3M (MMM). The Case-Shiller 20-city home price index is also due out ahead of the open. Prices are expected to have fallen 3.2% in February following a 3.1% decline in January. Amazon.com (AMZN) reports after the closing bell.
The market will also be looking ahead to Wednesday's meeting announcement by the Federal Open Market Committee regarding their latest stance on interest rates. This two-day meeting begins on Tuesday with the announcement due out on Wednesday afternoon.