Higher on Weak Volume

Higher on Weak Volume

We began the week with the indexes higher on weak volume as the end-of-quarter window dressing with another surge upward in the final few minutes of the day.  However, price volatility remains uncomfortably high as investors choose to ignore a five and 10-year bond inversion and another record trade deficit.  As a result, the index price pattern remains bullish as they continue to extend the winning streak into the end of the quarter.  With the economic reports report indicating a weakening economy and the yield inversion suggesting a possible recession on the way, be very careful not to overtrade with a fear of missing out.

Asian markets closed mixed but mostly higher as Japan warns of a rapidly weakening yen that hit a 6-year low.   European market sees only green this morning as Ukraine -Russian talks bring high hopes of a resolution to the aggression.  The U.S. futures recovered from early overnight losses to point toward a gap up open ahead of potentially market-moving economic reports.  Be prepared for more challenging price action as we extend.

Economic Calendar

Earnings Calendar

We have between 50 and 60 companies listed on the Tuesday earnings calendar, but quite a few are unconfirmed.  Notable reports include LULU, MU, ASO, CLAM, CHWY, lODE, CONN, ESLT, INFI, KALA, MKC, PRGS, PVH, RH, DTC, SPWH, SNDL, VRNT,& ZVO.

News & Technicals’

“What we want to make very clear to crypto exchanges, financial institutions, individuals, and anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable,” Deputy U.S. Treasury Secretary Secretary Secretary Wally Adeyemo told CNBC on Tuesday.  “We will come and find you,” Adeyemo said.  His comments come shortly after the G-7 major economies pledged to ensure the Russian state, elites, proxies, and oligarchs would not be able to leverage digital assets to sidestep the impact of international sanctions.  Speaking to CNBC on Tuesday, Saudi Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz Al Saud said the organization’s very existence depended on the separation of its mission to stabilize oil prices from other geopolitical factors.  Earlier this month, Saudi Arabia and the UAE voted in favor of a U.N. General Assembly resolution urging Russia to abandon the invasion and withdraw all troops.  Prince Abdulaziz said there were other forums through which the Kingdom could voice its opinion on Russia’s actions, which is in line with the global response.  “We are completely against any blackmailing,” Germany’s Finance Minister Christian Lindner told CNBC Monday.  Europe’s dependency on Russian energy has prevented the bloc from imposing an oil embargo on Moscow as part of its broader sanctions on the Kremlin.  This contrasts with a decision from the White House, which has banned Russian oil and gas imports.

Monday proved to be volatile for the markets, but the indexes closed higher on weak volume, ignoring a record trade deficit and the 5-10 bond yield inversion.  It makes me quite uncomfortable as the charts continue to extend as the economic data deteriorates.  That said, the price patterns remain bullish and premarket futures continue to push for higher prints each morning.  I suspect the continued rally results from the end-of-quarter window dressing that I’ve mentioned the last few days.  Watch for and be prepared for the possibility of a big letdown when it’s over.  Also, keep a close eye on the 2-year bonds as they creep higher, suggesting a recession may be just around the corner. 

Trade Wisley,

Doug

Premarket Looks Green on Slow News Day

Markets opened essentially flat on Monday and then went on a morning roller-coaster ride.  However, at about 12:30 pm, the bulls took over and put in a sustained rally for the rest of the day, closing on the highs.  This left us with white-bodied candles with lower wicks in all 3 major indices.  The QQQ put in a Doji Continuation signal while it is quite possible to see the DIA as a Hanging Man candle after the rally of the last 2 weeks.  On the day, SPY gained 0.70%, DIA gained 0.27%, and QQQ gained 1.56%.  The VXX rose 2% to 25.73 and T2122 fell to 82.69.  10-year bond yields fell a bit to 2.455% and Oil (WTI) plunged more than 9% to $103.49.

Before the opening Monday, TSLA made an SEC filing saying that it wants to split the stock and will ask for approval at its next annual shareholder’s meeting.  This would be done with a “stock dividend,” although the split ratio was not revealed.  With a stock dividend, for example, if the split was 4-for-1, then every stockholder of record would get 3 additional shares for every share they own at the time of the split.  The annual meeting has not yet been scheduled, but the 2021 meeting was in early October.  TSLA stock has more than doubled since the last split in August 2020.

SNAP Case Study | Actual Trade

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President Biden released his 2023 Budget Monday.  The plan calls for a 20% minimum income tax rate for those who earn over $100 million, increasing the corporate tax rate from 21% to 28%, and repealing several tax breaks for oil and gas producers.  The proposal has zero chance of passing as-is but will be the starting point for the haggling in the House and Senate.

The “Chinese Beige Book” a private market survey (not official Chinese government numbers) of 4300 Chinese Manufacturers, says that Chinese Manufacturing has been hit harder by Covid this quarter than last year.  This will have read-through impacts on supply chain issues across the globe. The problem was attributed to the rest of the world coming out of fiscal and monetary stimulus mode as well as the impacts of the disease on both Chinese production and demand.  Revenue, profit, and demand growth are all getting softer, which highlights the reason China is still easing while the rest of the world has begun to tighten.  One anomaly is that the survey found that the much-derided Chinese Property sector is actually doing better than the headline would have us believe.  This is especially true in Beijing and Shanghai (the current city lockdown notwithstanding) according to a report from CNBC.

Overnight, the Asian markets were mostly green.  Hong Kong (+1.12%) and Japan (+1.10%) led the gainers while Malaysia (-0.91%) and Shenzhen (-0.46%) paced the losses.  However, in Europe, with the exception of Russia (-0.91%) we see strong green numbers across the board at mid-day.  The FTSE (+1.33%), DAX (+1.91%), and CAC (+2.30%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.38% open, the SPY is implying a +0.39% open, and the QQQ implies a +0.35% open at this hour.  10-year bond yields are up strongly again to 2.503% and Oil (WTI) is rebounding 1.46% from Monday’s terrible drubbing in early trade.

Major economic news scheduled for release on Tuesday is limited to Feb. JOLTS and Conf. Board Consumer Confidence (both at 10 am) and a couple of Fed speakers (Williams at 9 am and Harker at 10:45 am).  The major earnings reports scheduled before the open are limited to ASO, ESLT, and MKC.  Then after the close, CALM, CHWY, CNXC, LULU, MU, MLKN, PVH, and RH report.

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With Ukraine making some gains in the South (near besieged Mariupol) and no major economic news this morning, the mood seems to be somewhere between lifting and waiting in the premarket. However, we should expect massive volatility (especially in energy markets) to continue to be the norm. So, don’t get complacent. The bulls still clearly have the momentum, but there is resistance close overhead from major averages in the QQQ and DIA as well as prior price levels. Be careful of both quarter-end window dressing rotation toward the winners funds look to assure owners they are in the ones that did best…even if it was a last-minute entry. And expect that intraday volatility as we head into the last 3 days of a quarter of war and inflation-ridden markets.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: TDOC, FAST, NET, PLTR, MCHP, ORCL, DLTR, WMT, UPS, MSFT, COST, BSX, ARKK, AMD. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Vastly Improved, But

Vastly Improved

The relief rally of the last two weeks has vastly improved the technicals of the indexes but will it be enough to keep us moving higher.  In the bull’s favor, we have the possibility of the end-of-quarter window dressing as institutions put new investor money to work.   In the bear’s favor, we have a possible risk-off scenario beginning to occur with a bond yield inversion as inflation worries grow.  If that’s not enough to keep traders on edge, then add in a hectic week of possible market-moving economic reports, and we have a recipe for challenging price volatility. 

Asian markets traded mixed and relatively flat as Shanghai went back into partial lockdown.  Across the pond, European markets see green across the board.  However, facing bond inversion fears, International Trade numbers, and a 2-year auction, rising recession fears suggest a mixed open well off the overnight lows.  So, get ready for just about anything as we finish this wildly volatile quarter!

Economic Calendar

Earnings Calendar

To kick off the last four trading days of the 1st quarter, we have more than 30 companies listed on the calendar, with the majority unconfirmed.  Notable reports include AND, AVAH, BITF, PLAY, JEF, TPG & XPEF.

News and Technicals’

The yield on the 5-year Treasury note rose five basis points to 2.6309% at 5:05 a.m.  ET, while the 30-year yield was less than one basis point to 2.5956%.  This is the first time the shorter-dated Treasury yield has risen above the longer-dated U.S. government bond since 2006.  President Joe Biden’s job approval ratings keep falling in his second year in the White House.  Just 40% of Americans approve of the job he is doing, an NBC News survey finds, the lowest rating Biden has seen in his presidency.  Biden’s drop in approval comes as a large majority of Americans continue to say the U.S. is headed in the wrong direction, the poll found.  Since the beginning of March, five cargoes of Russian oil, or about 6 million barrels, have been loaded and are bound for India – set to be discharged in early April, said Matt Smith, lead oil analyst at Kpler.  “This is about half the entire volume discharged last year — a significant uptick,” he told CNBC.  If China also buys oil from Russia – also widely expected to be discounted – it could impact crude prices, analysts said.  “Urals crude from Russia is being offered at record discounts,” the International Energy Agency said on March 17.  Shanghai, a city of 26 million people on the southeastern coast of China, is a hub for finance and international business in the country.  Municipal authorities ordered half of the city to lock down for mass virus testing from Monday to Friday morning.  Shanghai International Port Group, which manages the city’s ports, said in an online statement Monday production units generally maintained 24-hour operations.  President Joe Biden proposed a new 20% minimum billionaire tax.  The “Billionaire Minimum Income Tax” would assess a 20% minimum tax rate on U.S. households worth more than $100 million.  Over half the revenue could come from those worth more than $1 billion.  As the short-term treasury yields begin to invert as investors worry about a recession, the 10-year moved only slightly higher in early Monday trading to trade at 2.5066%, and the 30-year ticked slightly higher to 2.6004%. 

Technically speaking, the last couple week weeks have vastly improved the technicals of the index charts.  However, the sharp rally on meager volume combined with the possible over-extension in the prices in the short-term remains a concern.  On the one hand, due to the end-of-quarter window dressing, we may still see more extension as institutions put new money to work in the market.  But, on the other hand, the yield curve inversion in the 5-and-10 year bonds has the potential to derail bullish plans triggering risk-off conditions in the market.  In addition, we have a hectic week of market-moving economic data to keep traders on edge and price volatility high and challenging to navigate.  Finally, today we have International Trade numbers and the rapidly rising 2-year bond auction to contend with as we slide toward the end of this very volatile first quarter of 2022.

Trade Wisely,

Doug

Rates, Russia, and Shanghai Lockdown In News

Stocks made a modest gap higher Friday and then went on an all-day roller-coaster ride that ended on an upswing.  This left all 3 major indices as indecisive candles, with only the SPY having an appreciable candle body.  On the day, SPY gained 0.49%, DIA gained 0.43%, and QQQ lost 0.08%.  The VXX was flat at 25.20 and T2122 remained in the overbought territory at 86.77.  The 10-year bond yield spiked higher again to 2.477% and Oil (WTI) went up slightly to $112.58.

As mentioned above, interest rates spiked Friday.  As a result, 30-year, fixed-rate mortgage rates soared to 4.95% on average.  This was the second spike of a quarter percent during the week and, as a result, the average mortgage payment is now 20% (1.64%) higher than one year ago.  Coming into the Spring housing market, when 40% of all home sales occur, this doesn’t bode well for builders and related businesses. In other interest rate news, the 5-year and 30-year bond yields have inverted early today. This was the first inversion since 2006 and could be a harbinger of a recession to come. However, this is not the primary inversion that yield-watchers focus on. The main rate being watched “2-year vs. 10-year,” which remains positive for now.

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On the Russian invasion story, Bloomberg reported Friday afternoon that Chinese companies and diplomats have been pressing the US State Dept. for details on how to comply with sanctions against Russia.  While the Chinese may be looking for loopholes, this is encouraging since there are no secondary sanctions for those who violate the rules.  So, a desire to work within the sanction rules is seen as a bad sign for Russia and a great sign for the West. Elsewhere, the war continues with a tightening of the siege of Mariupol and Russian advances around Kyiv seem to be attempting to cut the capital off as well.

In other China-related news, the city of Shanghai (25 million people, the country’s financial hub, and a major seaport) announced that it will be locked down in two stages, half at a time.  This lockdown is planned for a total of nine days, with the Eastside closed until April 1 and the Westside closed from April 1-5. The city had already been reeling from local lockdowns for a couple of weeks. So, while the total lockdown of half the city at a time will have an impact on supply chains and global trade, the effect will not be as crippling as a lockdown out of the blue.

In a follow-up to a story from last month, it seems a 16-year-old in London has been arrested and released and named as the head of the hacking group Lapsus$.  Apparently, he was only caught when a rival hacking group gave his identity to authorities due to a group rivalry.  This kid, along with 6 friends aged 16 to 21, are the ones that hacked NVDA last month and just last week hacked both MSFT and OKTA.  (The source code to Bing, Bing Maps, and Cortana have been posted online, just like the NVDA source code was a month ago. In addition, the login credentials of 95% of OKTA users have been exposed.  OKTA is an identity/authentication platform used by thousands of businesses for both online and physical access, including NASDAQ.)

Overnight, the Asian markets were mixed but leaned to the downside as most of the gainers were very modest.  Hong Kong (+1.31%) was an outlier on the green side.  However, New Zealand (-1.21%), Shenzhen (-1.02%), Taiwan (-0.89%), and Japan (-0.73%) paced the losses in the region.  In Europe, markets are solidly green with the lone exception of Russia (-2.15%) at mid-day.  (Remember that Russia is now allowing all stocks to trade, but non-Russian investors are still prohibited to sell stock and the Russian Central Bank is putting a floor under their market to prevent collapse.)  The FTSE (+0.72%), DAX (+2.10%), and CAC (+1.91%) are typical of the range of gains in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green open.  The DIA implies a +0.14% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.17% open at this hour.  10-year bond yields are down slightly and Oil (WTI) is off almost 5% to $108.25 in early trade.

Major economic news scheduled for release on Monday is limited to Feb. Trade Goods Balance and Feb. Retail Inventories (both at 8:30 am).  The major earnings reports scheduled before the open are limited to JEF, SAIC, and XPEV.  There are no major earnings scheduled for after the close.

Major economic news later this week include Feb. JOLTS, Conf. Board Consumer Confidence, and a Fed speaker on Tuesday.  Wed. brings ADP Nonfarm Employment, Q4 GDP, and Crude Oil Inventories.  Then on Thursday we get Feb. PCE Price Index, Weekly Jobless Claims, Feb. Personal Spending, Chicago PMI, and a Fed speaker.  On Friday we get Avg. Hourly Earnings, Nonfarm Payrolls, Participation Rate, Unemployment Rate, and ISM Mfg. PMI.

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With a heavy dose of economic news in the week ahead, premarket prices are tepidly higher. The massive volatility in energy markets continues to be the standard. The bulls still clearly have the momentum, but there is resistance close overhead from major averages and prior price levels. Be careful of both quarter-end window dressing and intraday volatility as we head into the last 4 days of a quarter of war and inflation-ridden markets.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: RIOT, BABA, NET, NVDA, PLTR, FSR, LUMN, NKE, CVS, AMD, DGX. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Durable Goods Orders Decline

Durable Goods Orders

Though recent market data such as yesterday’s negative durable goods orders hint at a slowing economy, the bulls ignored the data charged forward on Thursday.  Big tech led the way yesterday, surging sharply upward, but new European regulations that may curb their dominance could slow their rally today.  This morning we will get another reading on the already weak Consumer Sentiment and Pending Home Sales.  Plan your risk carefully as we slide into the uncertainty of the weekend with indexes at or near significant price resistance levels.

Asian markets traded mixed overnight, with the volatile HSI leading the selling dropping 2.47% to wrap up their trading week.  After striking a natural gas deal with the U.S, European markets trade with modest gains with monetary policy data pending.  Finally, with a light day of earnings reports, the U.S. futures point to a modestly bullish open hoping to extend the winning streak a second week.  However, expect price volatility to remain challenging in the days ahead as continued geopolitical and inflationary pressures weigh on world markets.

Economic Calendar

Earnings Calendar

As we wrap up the week, we have a light day on the earnings calendar with about 30 companies listed, with the vast majority unconfirmed.  Notable reports include DOOO, DCTH, MOV, PNT, & TRUHY.

News & Technicals’

U.S. President Joe Biden and European Commission President Ursula von der Leyen announced the formation of a joint task force to bolster energy security for Ukraine and the EU for next winter and the following one.  The primary goals of the task force, the U.S. and EU said in a joint statement, would be to diversify LNG supplies in alignment with climate objectives and reduce demand for natural gas.  It comes amid heightened concern that energy-importing countries continue to top up President Vladimir Putin’s war chest with oil and gas revenue on a daily basis.  In addition, the European Parliament and EU member states reached a historic deal on the Digital Markets Act.  The reforms aim to prevent tech giants from abusing their market position to harm smaller rivals.  So-called “gatekeepers” that violate the DMA face potential fines of up to 10% of their global revenues.  Neon is required for the lasers used in a chip production process known as lithography, where machines carve patterns onto tiny pieces of silicon made by the likes of Samsung, Intel, and TSMC.  These machines are produced by Dutch firm ASML.  According to Peter Hanbury, a semiconductor analyst at research firm Bain & Co, more than half of the world’s neon is produced by a handful of companies in Ukraine.  This marks the first high-level visit between the two sides since bloody clashes on their contested border led to the deaths of 20 Indian and 4 Chinese soldiers in June 2020.  Both governments are mum on the agenda and expectations from the visit, which remained cloaked in unusual secrecy.  As the host of the annual BRICS summit later this year,  China is also believed to be seeking India’s presence at the forum, putting India, China, and Russia at the same table.  Treasury yields tick higher in the early Friday trading, with the 10-year rising to 2.3630% and the 30-year pricing up to 2.5182%.

The bulls ignored the worse-than-expected Durable Goods orders as they worked hard to rally the tech giants on Thursday.  Unfortunately, new European regulations targeting the tech giants may hamper their efforts a little today.  Nevertheless, index chart technicals continue to improve as the bulls work to hold higher lows and finish the week strong.  This morning we will turn our attention to the Consumer Sentiment reading and the Pending Home sales.  Finally, with earnings winding down and only four days next week to wrap up the 1st quarter of trading, watch for the possible end-of-quarter window dressing.  Price volatility is likely to remain high, with the world seemingly becoming a more and more dangerous place filled with uncertainty.  So, plan your risk carefully as we move toward the weekend. 

Trade Wisely,

Doug

LNG Deal and Consumer Sentiment In News

Markets gapped up on Thursday and then proceeded to put in a slow, all-day rally that closed near the highs.  This left us with large white candles in all 3 major indices and a lower-high for our new trend.  On the day, SPY gained 1.51%, DIA gained 1.05%, and QQQ gained 2.22% (led by a banner day by NVDA).  The VXX fell 1% to 25.20 and T2122 rose back deeper into the overbought territory at 87.15.  10-year bond yields pulled back from early-day highs to close up at 2.364% and Oil (WTI) fell 3% to $111.37/barrel.

On the Russian invasion story, NATO and the European Union sanctioned 400 more individuals (300 of which are Russian Parliamentarians) as well as Russian defense companies.  The US Treasury Dept. and UK PM Johnson both threatened to sanction Russian-owned gold.  President Biden publicly said that if Russia used chemical or biological weapons, we would respond and the response would depend on the nature of the use (which implies a proportionate military response).  Later, at a meeting of the G7, Biden went on to say he believes that Russia should be removed from the G20.  Overnight, as expected, the US and EU reached a natural gas supply deal that will cut or eliminate the need for Russian natural gas.

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Related to energy, US average gasoline prices have also fallen about 10 cents in the last week according to AAA.  However, in some places like CA, gas has reached $7 at some stations.  Meanwhile, oil prices declined globally Thursday after the EU decided to not sanction Russian oil…at this point. On the other hand, US natural gas producers are meeting with German gas buyers today in support of the LNG deal mentioned above. US producers will supply the EU with 15 billion cubic meters on LNG this year and up to 50 billion cubic meters each year until at least 2030.  It is unclear if this is in addition to the 6.5 billion cubic feet of LNG per day the US already supplies the EU.  Meanwhile, the Russian Duma is discussing taking Bitcoin in payment for their oil from “friendly” countries like China and Turkey in order the avoid sanctions.

In other European developments, the EU and European Parliament have reached a deal on their “Digital Markets Act.”  The law is aimed at curbing global (US for all intents and purposes) tech giants from abusing their position to hurt smaller rivals.  If any “gatekeeper” company is found guilty of doing so, they can be fined 10% of their global revenue (repeat offenders can be fined 20% of global revenue).  The law will immediately impact FB, AAPL, AMZN, and GOOG who operate “walled gardens” that limit customer choices and make it hard or impossible for outside companies to reach those “captured customers” without paying dearly for the privilege.  It also creates a massive set of rules the companies must comply with in order to do business in the largest combined consumer market.

Overnight, the Asian markets were mixed to end the week.  Hong Kong (-2.47%), Shenzhen (-1.89%), and Shanghai (-1.17%) were the only real movers as the rest of the region was split on modest moves.  In Europe, stocks are leaning to the upside at mid-day, with the notable exceptions of Russia (-3.66%) and Greece (-1.38%).  The FTSE (+0.25%), DAX (+0.80%), and CAC (+0.78%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.27% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.49% open at this hour.  10-year bond yields are flat at 2.363% and Oil (WTI) is down almost 2% in early trading.

Major economic news scheduled for release on Friday includes Michigan Consumer Sentiment and Feb. Pending Home Sales (10 am) and two more Fed speakers (Williams at 10 am and Waller at noon).  The major earnings reports scheduled before the open are limited to DOOO.  There are no earnings scheduled for after the close.

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The natural gas deal likely means great days for the Us natural gas suppliers and shippers. However, it may be too late to chase that trade if you didn’t take the hint when I mentioned the potential earlier this week. Beyond that, the European Digital Markets Act impacts may hold sway today. However, US traders may well ignore that story, counting on tech giant litigation to mitigate future damage. With that said, the Russian invasion is likely to hold the mindshare of traders as we head into the weekend news cycle. The bias is clearly bullish with the strong rally and now a higher-low, especially if we can get some follow-through. However, be careful of volatility and quarter-end window dressing starting to happen.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: CGNT, JBT, BNTX, ROKU, ZG, PYPL, NFLX, HUBS, PINS, CRM, QS, PLTR, HOOD. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Bears Reemerged

Bears Reemerged

The bears reemerged yesterday, snapping the six-day winning streak and pushing the DIA below its 50- day average.  However, the bulls held the SPY, QQQ, and IWM above the critical technical level.  This morning we will turn our attention to Durable Goods, Jobless Claims, PMI, and the news coming out of the NATO meeting.  As commodities prices continue to rise, so does inflation and the chances that the Fed will be forced to act more aggressively in May, keeping traders on edge and price action challenging.  Plan your risk carefully.

During the night Asian market closed, mixed easing Covid restrictions but concerned about rising energy prices.  European markets trade near the flatline this morning, focusing on the NATO meeting results today.  U.S. futures markets are doing the standard premarket pump up ahead of economic data that could bring an extra dose of volatility should the durable goods number disappoint. 

Economic Calendar

Earnings Calendar

As usual, Thursday is the biggest earnings day of the week, with about 80 companies listed with several unconfirmed.  Notable reports include AMPS, CODX, DRI, FDS, MCW, NEOG, NIO, SGLB, SMRT, TITN, TMDI, & UFAB.

News and Technicals’

Russian President Vladimir Putin has been in power for more than two decades and, during that time, has carefully cultivated an image of himself as an authoritarian, strongman leader.  Now, analysts say his decision to invade Ukraine is the biggest mistake of his political career and has weakened Russia for years to come.  As a result, both economically and geopolitically, Russia’s position looks increasingly isolated and vulnerable.  Three pressing threats loom large over the summit, requiring the alliance to determine its response and whether military intervention would be needed.  That includes mistaken fire on an allied nation, cyberattacks on a NATO member state, and the possibility of chemical or biological warfare within Ukraine.   NATO leaders are also expected to announce more humanitarian aid to Ukraine, particularly the embattled port city of Mariupol, a fresh round of sanctions and new pressure on Moscow’s energy sector.  In addition, it is the first suspected launch of an ICBM since November 2017 during heightened tensions between North Korea’s Kim Jong Un and former U.S. President Donald Trump.  While North Korea has conducted a flurry of ballistic missile tests in recent months, Thursday’s suspected launch of an ICBM represents a significant escalation.  Clean energy and low-carbon-emitting companies would stand to benefit.  Fossil fuel production companies stand to lose.  Higher carbon footprint companies such as heavy manufacturing and industrial chemical companies will not be expected to decarbonize overnight, but they will need to disclose their emissions data.  Compliance and auditing service companies will see a surge in demand, as will software companies that automate the processes.  Treasury yields are back on the rise again this morning, with the 10-year trading up to 2.39% early Thursday morning and the 30-year rose slightly to 2.5313%.

The bears reemerged yesterday to relieve the recent rally’s short-term overextension slightly.  While the DIA closed the day back below its 50-day average, the bulls were able to defend this critical technical level in the SPY, QQQ, and IWM.  With no significant market-moving earnings report this morning, we will turn our attention to the Durable Goods number that analysts expect to come in with a negative reading.  Nevertheless, it may give us some insight into the inflationary impacts on consumers and if it suggests a slowing of our economy is underway.  Commodities prices continue to surge, with Brent crude topping 121 a barrel yesterday, but the national average gas prices stood firm at $4.24 and diesel at $5.14.  We may also be sensitive to today’s NATO meeting with the U.S. sending more troops and leveling more sanctions against Russia with fears of chemical weapons rising.  So, expect price volatility to remain challenging and keep an eye on the bond yields as they inch closer and closer toward inversion. 

Trade Wisley,

Doug

US-EU Energy Deal Near, Goods and Claims on Tap

Markets gapped down 0.7% – 0.9% and then followed through with a long, slow all-day selloff, closing near the lows.  This left us with black candles in all 3 major averages and the first appreciable pullback in well over a week.  Even so, none of the 3 major indices even tested their T-lines (8ema) and the QQQ was just an inside day (Bearish Harami) candle.  On the day, SPY lost 1.29%, DIA lost 1.36%, and QQQ lost 1.44%.  The VXX was flat at 25.49 and T2122 dropped, but remains just inside the overbought territory at 81.95. 10-year bond yields fell to 2.293% and Oil (WTI) spiked another 4.5% to $114.23 as Russia said storm damage could put a major pipeline out of service for a month or more.

On the Russian invasion story, the US formally charges Russia with war crimes on Wednesday, and NATO announced it is expanding the number of troops in Eastern Europe by adding 4 battle groups (only about 500 additional troops) in that area.  In response, Russia is expelling 12 American diplomats and is demanding that “unfriendly countries” pay for Russian Natural Gas in rubles, with Gazprom (Russian LNG firm) ordered to make changes to contracts within a week.  The news caused the Ruble to rally.  (However, existing contracts could not be changed.  So, the impact in the short term is questionable.)  The Russian stock market partially reopened today as well.

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In another Russian Sanctions-related story, it appears the US and EU are close to a deal on cutting European use of Russian natural gas.  Sources told Bloomberg it would be announced Friday.  The agreement is expected to result in a large surge of US-produced LNG being sent to Europe starting as soon as a few months from now.  The largest US natural gas producers are LNG, CQP, XOM, and CVX.

After the close, FUL and TCOM reported beats on both revenue and earnings.  Meanwhile, OLLI missed on revenue while beating on earnings.  Unfortunately, KBH missed on both lines.  So far this morning, MOMO beat on both lines while TITN beat on earnings and missed on revenue.  However, DRI reported missing on both revenue and earnings.

Overnight, the Asian markets were mixed but leaned to the downside.  Hong Kong (-0.94%), Shenzhen (-0.83%), and Shanghai (-0.63%) paced the losses while Singapore (+1.05%) led gainers.  In Europe, markets are also mixed as Russia resumed trading with short-selling banned and foreign investors prohibited from selling at all (at least until April).  It is also suspected that the Russian government is a buyer of last resort placing a floor under the market.  As a result, the Russian MOEX is up 4.37%.  However, the FTSE (+0.14%), DAX (-0.31%), and CAC (-0.04%) are more typical of the region at mid-day.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.48% open, the SPY is implying a +0.64% open, and the QQQ implies a +0.74% open at this hour.  10-year bond yields are back up to 2.379% and Oil (WTI) is flat in early trading.

The major economic news scheduled for release on Thursday include Feb. Durable Goods Orders, Q4 Current Account, and Weekly Initial Jobless Claims at 8:30 am, Mfg. PMI and Services PMI (both at 9:45 am) and more Fed speakers (Waller at 9:10 am and Bostic at 11 am).  The major earnings reports scheduled before the open include DRI, MOMO, HEPS, SNX, and TITN.  Then after the market close, NIO reports.

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The major indices look to be pointing higher early, but for the first time in days we have economic news this morning. In addition, news out of the meetings President Biden is attending in Europe has the potential to roil markets. So, be careful not to ignore volatility. With that said, a minor, one-day pullback is the best bulls could have hoped for in the recent rally and if yesterday was our “higher low” the bulls may be ready to run up to at least the next resistance level. The bias is clearly bullish in the short term.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: QS, JBT, BNTX, PLTR, NFLX, FDX, CRM, HOOD, RBLX, PINS. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

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🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Sixth Day of Gains

Sixth Day of Gains

With another mighty push, the bulls managed the sixth day of gains, testing resistance levels even as traders now price in a 50 basis point rate increase for May.   Inflation continues to impact consumer activity, with Mortgage Applications falling by -8.1% while Brent Crude passed 118 a barrel this morning.  Jerome Powell will be speaking again before today’s open, with housing and petroleum numbers coming out during the morning session.  So, be careful chasing already extended stocks even though we may still experience some end-of-quarter window dressing. 

Asian markets closed green across the board led by the Nikkei surging 3.00% higher.  European markets trade mixed but mostly lower this morning with U.K. inflation hitting multi-decade highs and Ukraine war pressures.  U.S. futures point to lower open as they assess the impacts of inflation and more hawkish Fed willing to sacrifice growth to fight the rapidly rising consumer prices. 

Economic Calendar

Earnings Calendar

We have less than 50 companies listed on the Wednesday earnings calendar.  Notable reports include AWH, CTAS, CRBLF, FWRG, GIS, FUL, JKS, KBH, OLLI, SOL, SIEN, SCS, TCEHY, COOK, TCOM, WGO, & WOR.

News & Technicals’

Transportation Secretary Pete Buttigieg on Wednesday announced $2.9 billion for new competitive grants designed to improve U.S. transportation infrastructure.  The sum, part of the bipartisan $1 trillion infrastructure law President Joe Biden signed into law, is intended to bankroll highway, bridge, and freight projects.  State, regional and local governments will be able to contend for the grant funding through three separate programs with a single application.  As a result, Tencent reported its slowest quarterly revenue growth on record in the fourth quarter of 2021.  Revenue came in at 144.18 billion yuan ($22.62 billion), up 8% year-on-year.  The Chinese technology giant continues to feel the impact of Beijing’s regulatory tightening on the domestic technology sector.  The delisting of U.S.-listed Chinese stocks may come in the next two to three years, according to Jamie Allen of the Asian Corporate Governance Association.  Dual-listed Chinese stocks were recently in the spotlight after delisting fears reemerged following a U.S. Securities and Exchange Commission announced that U.S.-listed securities for five Chinese companies are at risk of delisting.  Following an initial plunge, the shares later saw a sharp reversal after Chinese state media reported that the U.S. and China regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks.  CNBC’s Jim Cramer on Tuesday warned investors against buying unprofitable stocks due to unwarranted optimism about the stock market.  “Right now, we need to bow down to the Fed and the forces of inflation,” the “Mad Money” host said.  Treasury yields turned slightly lower in early Wednesday trading, with the 10-year dipping less than a basis point to 2.3753%, while the 30-year moved slightly higher to 2.932%.

Indexes surged higher with the SPY and QQQ making it the sixth day of gains in the relief rally even as volume continued to decline.  However, with traders now pricing in a 50 basis point increase in May, the bulls may find it challenging to keep the pace.  Before the bell, Jerome Powell delivers another speech, but it seems unlikely he will change his hawkish tough talk in light of the rapidly rising commodity prices.  Then we will turn our attention to New Home Sales figures and the Petroleum status report before the 20-year bond auction at 1:00 PM Eastern.   Consumers worldwide are feeling the pinch of inflation, and more and more, we hear about the possibility of a recession, so be very careful chasing already extended stocks.  Though we could see a more bullish end-of-quarter window dressing, it is hard to imagine 2nd a vigorous round of 2nd quarter earnings with food and energy prices restricting consumer activity.

Trade Wisley.

Doug