Inflation Rate Hit 7.9%

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Inflation Rate Hit 7.9%

Although the inflation rate hit 7.9% and the prices at the pump continued to rise, the bulls decided the conditions were right to buy in another light volume day.  But, as Russian forces advance on the Ukrainian capital city, the question is, can the bulls follow through another day with the uncertainty of the weekend?  In addition, with a light day of earnings, the Consumer Sentiment report could be market-moving if it reflects the impacts of rising prices and the likely constriction of consumer activity.  Expect choppy conditions to continue and plan carefully with the FOMC decision next week.

Asian markets traded mixed but mostly lower overnight, with the Nikkei declining 2.05%.  However, despite the advancing Russian invasion, European markets are in rally mode this morning, seeing nothing but green across the board.  U.S. futures point to a considerable gap as they try to shake off inflation impacts on the economy.  Watch for those whipsaws and the dreaded pop and drop as we test price resistance levels with the uncertainty of the weekend pending.

Economic Calendar

Earnings Calendar

We have a light day to wrap up the earnings reports for this week.  The calendar lists 57 companies, but most of those are not confirmed.  Notable reports include BKE, FUTU, GENI, PLXP, RGF, & SPNE.

News & Technicals’

Satellite images show that Russian armored units have fanned out through the towns close to Antonov airport.  Artillery howitzers are thought to be situated in firing positions nearby.  The latest images come as Russia’s onslaught of Ukraine enters its 16th day, invading troops seeking to maintain pressure on Kyiv and Mariupol.  Supply-side risks arising from the war have stoked extreme volatility across global commodity markets, with oil, nickel, and wheat also surging alongside natural gas in recent weeks.  Natural gas is once again front and center after Russian Deputy Prime Minister Alexander Novak warned that Moscow could halt its exports to Germany via the Nord Stream 1 pipeline.  The Senate passed a bill to fund the government through September, preventing a shutdown.  The legislation also includes $13.6 billion for humanitarian and military assistance for Ukraine as it fights off a Russian invasion.  However, lawmakers scrapped $15.6 billion in supplemental coronavirus relief from the plan.  Rivian missed Wall Street’s fourth-quarter earnings expectations and forecast a modest increase in vehicle production for 2022.  Rivian said it expects to produce 25,000 vehicles this year, as the electric vehicle start-up battles through supply chain constraints and internal production snags.  T said reservations for its vehicles had reached about 83,000 as of March 8, up from 71,000 in December.  Treasury Secretary Janet Yellen said Thursday that Americans would likely see another year of “very uncomfortably high” inflation.  “We have seen a significant increase in gas prices, and I guess that next month, we’ll see further evidence of an impact on U.S. inflation of Putin’s war on Ukraine,” Yellen said.  The Treasury secretary’s comments came just hours after the Labor Department said consumer prices rose 7.9% in February, the fastest pace since 1982.  Treasury yields pulled back slightly in early Friday trading, with the 10-year slipping to 1.9864% and the 30-year dipping to 2.3641%.

After learning that the inflation rate hit 7.9%, the bulls decided that it was a reason to buy in another light volume day.  The question is, can they follow through another day as Russia closes in on the Ukrainian capital city and faces the uncertainty of the weekend.  As a result, prices at the pump inched higher once again at the national gas price at $4.33 a gallon, and diesel surged to $5.13, adding pressure to shippers and consumers alike.  We have a very light day on the earnings and economic calendar; however, the reading on Consumer Sentiment will be an important measure of the inflationary impacts.  Technically we have substantial price resistance above, and downtrends continue in all four indexes.  That said, we can’t rule out an attempt to test those resistance levels, but in the same breath, new lows are possible as the wild price gyrations continue.   As you plan forward, keep in mind the FOMC decision is forthcoming. 

Trade Wisely,

Doug

Another Gap – This One To The Upside

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Stocks gapped down about 1.2% on a +7.9% Annual CPI numbers Thursday and then put in a roller-coaster morning that found the lows of the day about noon.  However, from there stocks rallied slow and steady the rest of the day.  This left us with white body candles with significant wicks (Doji type in the QQQ) but had recovered most of the gap down in the large-cap indices by day end.  It is worth noting that volume was extremely low in all 3 major indices.  On the day, SPY lost 0.47%, DIA lost 0.37%, and QQQ lost 1.11%.  The VXX fell over 4% to 25.83 and T2122 fell back to the mid-range at 51.38.  10-year bond yields shot up to 1.992% and Oil (WTI) fell another 2.16% to $106.25/barrel.

After the close, DOCU, NTCO, and ULTA reported beats on both lines.  However, both ORCL and ZUMZ missed on earnings while reporting in line on revenue.  ORCL said that losses on investments into a gene-sequencing company and ARM server chip manufacturer (neither listed) were the cause of the earnings miss.  After hours, electric vehicle maker RIVN also missed on earnings and announced they expect to produce only 25,000 vehicles this year, far below Wall Street expectations.

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On the Russia story, they started to retaliate against Western sanctions on Thursday.  Russia Prime Minister Mishustin said that legislation has already been drafted to seize the assets of Western companies that have suspended operations in their country.  This would include over 240 western companies such as MCD, AAPL, BP, SHEL, XOM, GS, JPM, KO, MSFT, MSFT, IBM, TM, etc.  They also banned the export of a wide range of products including telecom, medical, automotive, electrical, and agricultural products through the end of 2022. This export ban is mainly a PR stunt since importers of such equipment have largely already ended those sales.  On the “companies exiting Russia” front, both GS and JPM joined the list by announcing they’re in the process of winding down Russian operations.  Beyond all this, Western banks such as C, CS, DB, and GS are owed more than $121 billion by Russia. Those banks told Bloomberg they are now expecting at least significant losses (if they are paid in Rubles that cannot be moved out of Russia, as the Ruble devalues) and possibly total losses on those loans. On the ground in Ukraine, Russia has expanded its offensive to the West and is now attacking cities within 70 miles of the Polish border.

The ECB made a surprise announcement that it will end its bond-buying program.  However, this will not take effect until Q3 and only if economic data continues to support that faster than planned move.  It is worth noting that ECB President Lagarde said the war in Ukraine “is having a material impact on economic activity and inflation” and therefore circumstances may change.  Still, ending buying in Q3 is the latest plan.

Overnight, the Asian markets were mixed but leaned to the red side.  Japan (-2.05%), Hong Kong (-1.61%), and Taiwan (-0.97%) led the region lower.  In Europe, stocks are strongly in the green across the board at mid-day. The FTSE (+1.69%), DAX (+3.21%), and CAC (+2.46%) are representative of the continent in early afternoon trading.  As of 7:30 am, US Futures are also pointing toward a strongly green start to the day.  The DIA implies a +1.25% open, the SPY is implying a +1.39% open, and the QQQ implies a +1.56% open at this hour.  10-year bond yields have breached the 2% level and Oil (WTI) is up modestly to $1.06.65/barrel in early trading.

The major economic news scheduled for release on Friday is limited to Michigan Consumer Sentiment (10 am).  There are no major earnings reports scheduled for release Friday.    

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Once again, volatility reigns as we are seeing another gap in the opposite direction today. This move comes on without any particularly good news and therefore must be seen to be whiplash (reaction to over-reaction). Just remember that the pattern lately has been either to fade the gap or at least have a wild roller-coaster ride after the gap. Also, remember that this is Friday and there is a weekend news cycle to live through before we can adjust any trades. So, prepare yourself for that situation by getting flat, small, or hedged. Who knows what the news out of Ukraine could be this weekend? New scanctions? Escalation? Progress from talks now that Russia is in a better position? It could go any direction.

I know it is a very hard thing to do…the right thing often is. However, if a volatile, choppy market is not your wheelhouse and you aren’t able to become that fast daytrader, sitting on your hands is the best move you could make. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase gaps and moves. Trading is a marathon, not a sprint. So, stick to your trading rules and manage the things that you can control. 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 money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: QS, ITUB, AVGO, M, CRSP, CRWD, CAR, PFE, COST, WMT, DRE. 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.

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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.

Free YouTube Education  •  Subscription Plans • Private 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

Low-Volume Rally

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Although it was nice to get a relief rally yesterday, the low-volume move was likely more short covering than actual buying.  Sadly, the big point rally did little to nothing in repairing the technical damage in the index charts.  So today, we will turn our attention back to the rising inflation and the ugly impacts for the consumers as the national average price of gasoline rises to $4.31, up from $4.17 just one day ago.  Plan for some wild price volatility as traders react to the CPI number revealed before the bell. 

Asian markets followed the U.S. markets with a sharp overnight rally, with the Nikkei leading the way, rising 3.94%.  Unfortunately, the relief rally may be short-lived, with European markets decidedly bearish this morning.  U.S. futures also point to a nasty gap down as we wait on the CPI numbers. 

Economic Calendar

Earnings Calendar

We have more than 250 companies listed on the Thursday earnings calendar, but a large number of them are unconfirmed.  Notable reports include ORCL, RIVN, ACRX, BZUN, BLNK, DLTH, LOCO, AG, GCO, HGBL, JD, LZ, MLNK, NEON, PSTL, RRGB, TLYS, UTLA WPM, & ZUMZ.

News & Technicals’

Russia – Ukraine fails to reach a cease-fire deal, sending U.S. futures lower and Wednesday’s substantial gains.  Brent crude futures were up $3.10, or 2.8%, at $114.24 a barrel at 0419 GMT after trading in a more than $5 range.  In nearly two years, the benchmark contract slumped 13% in the previous session in its biggest one-day drop.  U.S. West Texas Intermediate (WTI) crude futures were up $1.58, or 1.5%, at $110.28 a barrel, after trading in a more than $4 range.  The contract had tumbled 12.5% in the most significant daily decline in the previous session since November.  On Thursday, Bitcoin and other cryptocurrencies fell as some of the initial excitement around U.S. President Joe Biden’s executive order on digital assets faded.  Bitcoin was down more than 6% at $39,086 at 3:38 a.m.  ET on Thursday, according to data from CoinDesk.  Some high-profile cryptocurrency industry players praised the president’s executive order, while others called the move “defensive.”  Amazon’s 20-to-1 split makes it more palatable to the price-weighted Dow Industrials.  Perhaps the Dow index committee may consider giving Walgreens the boot from the index as that company reevaluates its Boots unit.  On top of Amazon and Alphabet, which had its 20-to-1 split back in February, Nvidia could also be waiting in the wings.  According to Dow Jones, economists expect consumer inflation will hit a new 40-year high of 7.8%.  The consumer price index is the last big inflation release before the Federal Reserve meets next Tuesday and Wednesday.  CPI was expected to peak in March, but now economists say it could do so later in the spring, depending on what happens with oil prices.  Treasury yields declined slightly in early Thursday trading, with the 10-year slightly lower at 1.9270% and the 30-year dipping to 2.3022%.

With a sizeable overnight gap and a  low-volume move, the indexes managed to trigger a short-covering squeeze pushing the indexes up to test overhead resistance.  Although the rally relieved the recient selling pressure, it, unfortunately, did nothing to improve the overall bearish technical picture of the indexes.  Helping the rally was the commodity selling, but I fear that will be very short-lived with the pending CPI number before the bell today.  Though bent crude declined, the average national price of gasoline moved higher to $4.31 a gallon.  Some areas of California are approaching $8.00 a gallon while diesel prices around the county top $5.00 a gallon.  The rapidly rising prices create long lines at stations as consumers rush to fill their tanks before the subsequent price increase.  So buckle up for another round of volatility as the market comes to grip with the rising inflation and the massive impacts to the consumer. 

Trade Wisely,

Doug

AMZN Split and CPI Lead The Market News

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Markets made a massive gap higher (2% to 2.5%) Wednesday after commodity prices began to fall the previous night.  However, the rest of the day was a roller-coaster ride with a slightly bullish trend.  This resulted in the best day since the recovery from the Covid Crash (June 2020).  We were left with a Spinning Top in the SPY, a Doji in the DIA, and a white candle with larger wicks on both ends in the QQQ.  All 3 of the indices did test, but none of them was able to break through, their T-line by day end.  On the day, SPY gained 2.66%, DIA gained 2.10%, and QQQ gained 3.60%.  The VXX fell 4% to 27.03 and T2122 rose to just outside the overbought territory at 79.41.  10-year bond yields spiked to 1.943% and Oil (WTI) took a tremendous beating (down 13% at one point before rallying), closing down 10.54% to $110.66/barrel.  Wheat also fell more than 6.5% on the day.

After the close, AMZN announced a 20-for-1 stock split for owners of record on May 27 (effective June 3, 2022).  In addition, the company announced a $10 billion stock buyback program, which replaces the current $5 billion buyback program.  The stock spiked over 13.5% on the news during post-market trading. Also after the close, LU, FNV, KRO, and CRWD all reported beats on both lines.  However, BEKE missed on earnings while beating on revenue.

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Overnight, the House passed a bipartisan $1.5 trillion omnibus spending bill (including $13.6 billion for Ukraine) Wednesday evening.  Covid-19 Relief spending was stripped out to avoid contention and make it easier to get to 60 votes in the Senate.  The Senate will take up the bill today and it needs to be passed by Friday to avoid a government shutdown.

Related to Oil prices, US Energy Sec. Granholm called on US oil and gas companies to increase production.  However, many oil industry officials at the conference expressed reluctance to add even more capacity.  The executives noted that the White House had also asked OPEC to increase output. (On that front, the UAE openly called Wednesday for OPEC to increase production to replace any Russian oil that is banned by the West.)  So, US companies fear the cost and long-term nature of adding US capacity when it is possible that supply may have overcome the current deficit by the time that output was online (i.e. prices may have come back down).  There was also an unstated concern about US government policies intended to promote competing “green” alternatives to oil and gas. Those concerns aside, US producers have already increased US output by a million barrels per day this year. 

On the Russian invasion story, CAT and DE joined the chorus of companies that have suspended sales and business operations to Russia.  MCD clarified that their closure of 850 restaurants in Russia will cost them $50 million per month. Meanwhile, Russia has escalated the bombardment of surrounded cities.  In Mariupol, they bombed a children’s hospital as well as the civilian evacuation corridor, killing several people.  Russian Foreign Minister Lavrov also claimed they have found an alternative buyer for oil and gas that is now being sold to Europe.

Overnight, the Asian markets were strongly green across the board.  Japan (+3.94%), Taiwan (+2.46%), and Shenzhen (+2.18%) led the way higher.  However, in Europe, stocks are mostly red (with the exceptions of Norway (+0.14%) and Finland (+0.22%)) at mid-day.  The FTSE (-1.30%), DAX (-3.10%), and CAC (-2.43%) are leading the way lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap lower at the bell.  The DIA implies a -0.89% open, the SPY is implying a -0.89% open, and the QQQ implies a -1.31% open at this hour.  10-year bond yields are up to 1.953% and Oil (WTI) has spiked another 4.35% to $113.40/barrel in early trading.

The major economic news scheduled for release on Thursday is limited to February CPI and Weekly Initial Jobless Claims (both at 8:30 am) and Feb. Federal Budget Balance (2 pm).  The major earnings reports scheduled for release before the open are limited to BZUN, CLVT, GCO, and JD.  Then after the close DOCU, ORCL, and ULTA report.   

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Volatility remains king as it appears we will see a significant gap down at the open. However, there is CPI data before the open and that may change things. The question is whether hot CPI data will lead to more fear when a rate hike next week is already assumed to be a certainty. Regardless of how we open, be wary of intraday swings and be very cautious. So, if you are trading, trade small, be nimble, and be prepared to accept volatility-caused pain.

Trading is a marathon, not a sprint. So, ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase gaps and moves. So, stick to your trading rules and manage the things that you can control. 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 money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: OPCH, OXY, WU, OLED, PENN, RKT, KO, ENPH, BCC, UPST, HPQ, BLNK, PLUG, NET, RUN, FSLR. 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 Plans • Private 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

U.S. Embargo of Russian Oil

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The U.S. embargo of Russian oil spiked prices, pushing the national average of gasoline to $4.17 a gallon.  However, with the CPI just around the corner, U.S. futures suggest a considerable gap up pressing short traders and likely inspiring the fear of missing out in retail traders.  So before you jump emotionally, consider the risk carefully and remember the big point whipsaws of late.  There is no doubt we all want some relief in the selling but chasing a big gap at the open only adds tremendous risk.  So plan your next move bucause carefully; in truth, nothing has changed, and the uncertainty of the path forward continues.

Overnight Asian markets traded mostly lower as the threat of global recession raises its ugly head.   However, European markets are green across the board this morning, with the DAX and CAC spiking up more than 4%.  U.S. futures also point to a significant gap up at the open, trying to shake off the consumer demand destruction, high energy prices, and inflation uncertainties. 

Economic Calendar

Earnings Calendar

We have nearly 150 companies listed on the earnings calendar, but there is a good number of unconfirmed.  Notable reports include ACOR, ADDYY, AMPY, BGSF, CVGW, CPB, PLCE, EXPR, FOSL, KFY, MQ, LCUT, NGMS, OTLY, REVG, THO, VRA, VERX, VIVHY, & ZIM.

News & Technicals’

If Russia retaliates by refusing to supply Europe with oil, that could “easily” send oil prices another $20 to $30 per barrel, said Andy Lipow, president of Lipow Oil Associates president.  “My greatest fear is that these prices have risen so fast that you cause a recession in Europe and Latin America that rolls on into the United States that ultimately affects China’s ability to sell consumer goods to the rest of the world,” he told CNBC’s “Squawk Box Asia” on Wednesday.  A complete ban on Russian energy imports in all significant consuming countries would “severely reduce and disrupt energy supply” and prices could soar further into “uncharted territory,” wrote Caroline Bain, chief commodities economist at Capital Economics.  A Chinese state-sponsored hacking group successfully compromised the computer networks of at least six U.S. state governments, according to research published by Mandiant.  APT41, which Mandiant claims carries out state-sponsored espionage on behalf of China, took advantage of software flaws and quickly exploited security vulnerabilities made public by researchers.  Mandiant said Tuesday that APT41 appeared to be “undeterred” by the indictment and its goals remain “unknown.”  For China, the speed and severity with which the U.S. and its allies sanctioned Russia is a warning sign that could guide future economic and foreign policy.  “This is a very multilateral moment,” said Reva Goujon, senior manager for the China corporate advisory team at Rhodium Group.  Beijing has refused to call Russia’s attack on Ukraine an invasion.  Instead, China has focused on promoting negotiations between Russia and Ukraine, and it opposes the economic measures that have been taken against Russia.  Treasury yields moved slightly higher in early Wednesday trading, with the 10-year up to 1.8992% and the 30-year pricing at 2.2622%.

Yesterday proved to be another rough day, with oil prices rising sharply after the U.S. embargo of Russian oil.  As a result, the National average gas prices spiked to $4.17 per gallon, pressuring an already stretched consumer and fanning the flames of inflation.  However, with a worrisome CPI number just around the corner, the U.S. futures point to a substantial overnight gap up, with Brent crude prices pulling back to $123.00 a barrel at the time of this report.  That said, the U.S. consumer can expect much higher energy prices going forward unless the administration restores domestic production.  Sadly this big gap puts the retail trader at high risk of an intraday whipsaw if they chase the gap while also being left behind if this is the beginning of a relief rally.  So pay close attention to overhead resistance for entrenched bears and keep in mind that nothing has changed.  The war is still in progress, inflation is impacting consumer habits, inflation is rising with the rapidly increasing food and energy prices, and the indexes remain in a downtrend.  Don’t allow the emotion of the day or the fear of missing out to dictate your trading decisions, as that will often take money right out of your accounts!

Trade Wisely,

Doug

Commodities Ease, Bulls Look to Make Hay

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The volatility train kept rolling Tuesday with premarkets falling back to nominally flat opens that were followed by an all-day roller-coaster.  We closed on a downswing.  This gave us huge, high-wick, inverted hammer (I don’t believe those are bullish) type candles in the SPY and DIA.  Meanwhile, the QQQ printed a black, long-legged Doji.  All 3 major indices are close to challenging the breakout of their “dreaded-h” patterns.  On the day, SPY lost 0.74%, DIA lost 0.58%, and QQQ lost 0.46%.  The VXX was down 1% to 28.15 and T2122 remains in the low end of the midrange at 29.12.  10-year bond yields rose to 1.852% and Oil (WTI) spiked almost 4.5% to $124.75/barrel.

The Russian invasion and sanctions continue to be the story driving markets.  MCD stock took a big hit (almost 5%) Monday as it was noted over the weekend that MCD has a larger footprint in Russia than other fast-food chains.  After the close, Russia threatened to stop gas flows to Europe and said the world will see $300 Oil if the WOn the Russian invasion and sanctions front, MCD and SBUX both announced they are closing all Russian locations (MCD has 850) until further notice.  KO followed suit by also suspending business in Russia.  PEP announced they have suspended soda sales, but will continue to sell snacks and other products to Russia.  President Biden also announced a ban on the import of Russian Oil/Gas and the UK announced they will be completely out of Russian oil by the end of this year.  Then overnight, commodity prices fell as traders at least temporarily came to the conclusion the initial reaction (such as a 350% spike in Nickel prices) was an over-reaction.

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AAPL had a blasé product announcement event Tuesday.  The company unexpectedly raised the price of their replacement entry-level iPhone SE by 7.5% (to $429 from $399), showing that they are not concerned about gaining market share in the mid-range phone market (the one phone segment AAPL lags far behind).  Other announcements were as expected, with new iPhone colors, a new iPad, a faster Mac, and a 27” display, all of which are priced at the extreme end of those product categories relative to competitors.

Overnight, President Biden issued an executive order on cryptocurrencies.  The order basically sets up a framework for regulating cryptocurrencies to protect consumers, businesses, and investors while mitigating systemic risk.  He also directed the government to explore the technology and capacity needs for a potential Central Bank Digital Currency (such as China now has).  While critics immediately said they fear the move will make the US fall behind other countries due to the regulation, others such as exchange managers say it is a constructive approach.  In either case, Bitcoin spiked 8% on the news as markets love the removal of uncertainty.

After the close, CASY, ABM, and SFIX all beat on both lines.  However, SFIX shares plummeted after the company announced that it is slashing forecasts for the full year.  So far this morning, ZIM, THO, KFY, and REVG have all reported beats on both lines.  However, ADDYY, CPB, and DSEY all reported beats on earnings while missing on revenue.

Overnight, the Asian markets were mixed but leaned slightly green.  Shanghai (-1.13%), Shenzhen (-1.12%), and South Korea (-1.09%) paced the losers with India (+2.07%), Thailand (+1.52%), and Singapore (+1.48%) leading the more plentiful gainers.  In Europe, stocks are mostly (and strongly) green at mid-day.  The FTSE (+1.35%) lags with the DAX (+4.50%) and CAC (+4.53%) leading most of the rest in a bull charge.  Only Norway and Denmark see any red and they are only fractionally down.  As of 7:30 am, US Futures are pointing toward a strong gap higher.  The DIA implies a +1.44% open, the SPY is implying a +1.58% open, and the QQQ implies a +1.98% open at this hour.  10-year bond yields are up to 1.91% and Oil (WTI) is down 2.26% to $120.87 in early trading.

The major economic news scheduled for release on Wednesday is limited to January JOLTS (10 am), Crude Oil Inventories (10:30 am), and the WASDE report (noon).  The major earnings reports scheduled for release before the open are limited to ADDYY, CPB, PLCE, DSEY, KFY, REVG, THO, UNFI, and ZIM.  Then after the close SID, BEKE, LU, and NTCO report.  

LTA Scanning Software

Once again, volatility is king as it appears we will see a significant gap at the open. However, Russian bombing of Ukrainian cities is picking up pace as it now appears the Russian strategy is to reduce the major cities to rubble before entering. The question is whether the bulls can sustain the early momentum after the open given the various threats to European gas supplies and the increasing likelihood of at least partial western energy sanctions. Remain very cautious. A gap up DOES NOT indicate a bottom has been put in. So, if you are trading, trade small, be nimble, and be prepared to accept volatility-caused pain.

Trading is a marathon, not a sprint. So, ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase gaps and moves. So, stick to your trading rules and manage the things that you can control. 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 money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: BITO, WOOF, ZIM, OSTK, DLTR, PLUG, TSLA, MDT, MVIS, AAPL, CLOV, FSK, OLED, ENPH. 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 Plans • Private 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

Fears of Higher Inflation

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Fears of Higher Inflation

It was not only the higher oil prices that kept the bears active on Monday but the fears of higher inflation and the uncomfortable impacts to the consumer.  Though the indexes appear in a short-term oversold condition, the pending CPI number will likely keep the bears active on the uncertain path forward.  In addition, this morning, we will briefly turn our attention to the trade deficit that continues to expand.  So plan your rick carefully and continue to respect overhead resistance levels as long as the downtrend remains in effect.

Asian markets closed in the red across the board during the night, with Shanghai leading the selling down 2.35% at the close.  European markets trade mixed but mostly higher this morning as they keep a close eye on invasion developments.  Ahead of earnings and economic data, the U.S. futures point to a gap up open, hoping to trigger a little relief in the selling.

Economic Calendar

Earnings Calendar

The number of earnings events ramps on this Tuesday, with more than 130 companies listed though we have a large number of them unconfirmed.  Notable reports include DKS, ABM, AVD, CDMO, BNED, BKEP, BMBL, CASY, CIVI, FTEK, GLRE, NVEI, WOOF, PCT, SFIX, VTNR, & WTI.

News & Technicals’

“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television.  “The surge in prices would be unpredictable.  It would be $300 per barrel if not more.”  His comments come with Russia’s onslaught of Ukraine well into its second week, with the already dire humanitarian crisis expected to worsen as the Kremlin continues its invasion.  “It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said Monday in an address on state television.  “The surge in prices would be unpredictable.  It would be $300 per barrel if not more.”  His comments come with Russia’s onslaught of Ukraine well into its second week, with the already dire humanitarian crisis expected to worsen as the Kremlin continues its invasion.  Tensions are rising in Europe’s ex-Soviet Baltic nations that President Vladimir Putin might not stop at invading Ukraine and could have his sights set on them.  Baltic states in north-eastern Europe, which are now members of the EU and NATO, were invaded and occupied in June 1940 by the Soviet Union.  They remained within the USSR until its collapse in 1991.  “Clearly, Putin is now in some kind of aggressive war mood,” European Commission Vice President Valdis Dombrovskis said.  Treasury yields rally in early Tuesday trading as inflation worries grow.  The 10-year surged 9-basis points to 1.8421%, and the 30year rose to 2.2334%.

The rising oil prices and the fears of higher inflation reading when CPI numbers come out Thursday morning kept the bears working hard Monday.  As a result, the Nasdaq officially fell into bear territory closing down 20% from January highs.  Although the indexes appear to be in a short-term oversold condition, the rising prices will make it difficult for a consumer-based economy to find much footing.  So if a relief rally can get started, it would be wise it respects overhead resistance levels as long as the index downtrends continue.  In addition, it would appear the geopolitical fallout of the Russian invasion is far from over, so expect price volatility to remain uncomfortably high.  Finally, with earnings beginning to wind down and inflation numbers on the horizon, the path forward is uncertain.  Large intraday whipsaws and significant overnight gaps are likely to continue as the uncertainty unfolds.  So plan your risk carefully and avoid overtrading.

Trade Wisley,

Doug

Trade, AAPL Event but Russia Still Top Story

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On the strength of the Russian invasion and increased fear over what it may do to the global economy, the bears controlled the market all day long Monday.  The open was relatively flat, but from that point all 3 major indices sold off the entire day, closing on the lows.  This left us with massive black candles heading toward the breakout point of Bearish-h patterns in all those indices.  On the day, SPY lost 2.91%, DIA lost 2.37% and QQQ lost 3.69%.  The VXX was up nearly 9% to 28.49 and T2122 still has not reached oversold territory, sitting at 25.75.  10-year bond yields rose to 1.782% and Oil (ETI) fell back from the highs, but still gained 3.76% to $120.05/barrel.

The Russian invasion and sanctions continue to be the story driving markets.  MCD stock took a big hit (almost 5%) Monday as it was noted over the weekend that MCD has a larger footprint in Russia than other fast-food chains.  After the close, Russia threatened to stop gas flows to Europe and said the world will see $300 Oil if the West puts sanctions on Russian energy exports.  Russian Deputy Prime Minister Novak said, “no decision on whether to shut down the flow had been taken yet and the pipeline is running at full capacity now.”  However, the threat was not veiled.  European market gas prices surged almost 80% in reaction to the threat. (Roughly 40% of European natural gas and 25% of the oil comes from Russia.) On the front, the last major holdout RDS.A apologized for buying a shipment of Russian oil after the invasion and announced they will stop buying from Russia. They join XOM, BP, and others in boycotting Russian Oil.

SNAP Case Study | Actual Trade

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Overnight, the London Metals Exchange was forced to halt the trading of Nickel after an unprecedented 250% spike in the metal.  (Russia is the world’s largest exporter of nickel.)  As with Wheat (Russia and Ukraine produce one-third of the world’s supply) and Oil (Russia is the third-largest exporter), commodities are on a rocketship with the disruptions caused by the Russian aggression.

AAPL will hold its first product launch event of the year today.  Bloomberg reports that the company will announce a low-cost ($399) version of its iPhone, replacing a non-5G model launched in 2019.  Cupertino is also supposed to announce a new mid-range iPad Air, a revised Mac computer, and a new version (15.4) of the iOS operating system

Overnight, the Asian markets were mostly deeply in the red again.  India (+0.95%) was the lone green in the region.  However, Shenzhen (-2.62%), Shanghai (-2.35%), and Taiwan (-2.06%) led the region lower.  In Europe, stocks are mixed but lean to the green side at mid-day.  The FTSE (+0.14%), DAX (+0.98%), and CAC (+2.00%) are fairly indicative of early afternoon trading on the continent with 4 smaller exchanges in the red (Athens -2.63% is an outlier) and Russia remaining closed.  As of 7:30 am, US Futures are pointing toward a green open.  The DIA implies a +0.57% open, the SPY is implying a +0.63% open, and the QQQ implies a +0.39% open at this hour.  10-year bond yields have rebounded to 1.851% and Oil (WTI) is up another 3% to $122.96/barrel in early trading.

The major economic news scheduled for release on Tuesday is limited to January Imports/Exports and January Trade Balance (all at 8:30 am).  However, the EIA will also publish its Short-Term Energy Outlook at noon, which may garner some headlines given the Oil situation.  The major earnings reports scheduled for release before the open are limited to DKS and WOOF.  Then after the close ABM, CASY, and SFIX reports.   

LTA Scanning Software

The volatility parade continues as the Russian bombing of Ukrainian cities picks up pace. Today it looks like the gap will be bullish after yesterday’s all-day selloff. The question is whether the bulls can sustain momentum after the open given the overnight threats to European gas supplies and the likelihood of some sort of western energy sanctions. So, remain very cautious. If you are trading, trade small, be nimble, and be prepared to accept volatility-caused pain.

Trading is a marathon, not a sprint. So, ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase gaps and moves. So, stick to your trading rules and manage the things that you can control. 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 money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: EOLS, ENPH, CLOV, OLED, OSTK, MDT, LHCG, PFE, CHPT, LUMN, FCEL, PLUG, TAN 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 Plans • Private 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

Invasion and Fallout Remain Top Story

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Bears took back control Friday as the Russian attack on a Ukrainian nuclear reactor site (causing fires) led to a 1% gap-down in the large-dap indices and two-thirds of a percent in the QQQ.  From there we had a roller-coaster ride the rest of the day that ended on an upswing the last 15 minutes.  This left us with gap-down Spinning Top type candles in all 3 major indices.  On the day, SPY lost 0.81%, DIA lost 0.49%, and QQQ lost 1.45%.  The VXX rose over 4% to 26.20 and T2122 fell but remains in the middle of the range at 52.87.  10-year bond yields fell sharply to 1.736% and Oil (WTI) spiked over 7% to $115.37/barrel.

February Payrolls data came out on Friday.  The biggest news was Nonfarm Payrolls grew more than 50% more than expected (+687k vs +400k est.).  The Participation rate also inched up a tenth of a percent versus January.  However, Average Hourly Earnings grew less than expected (+5.1% vs. +5.8% expected) and continue to fall behind inflation.  Finally, the Unemployment Rate fell to 3.8% (versus 3.9% expected).   

SNAP Case Study | Actual Trade

Click for video

On the Russian Invasion/Sanctions front, Russia reneged twice on ceasefires for civilian evacuations of cities under bombardment, and the US is in talks with Poland and other NATO allies to give Ukraine F-16s, which the US would then replace. V, MA, and AXP all also turned off their payment networks in Russia. For his part, Putin signed a decree that forces creditors to set up bank accounts in Russia and accept payments in Russian Rubles for both sovereign and corporate debt.  The idea is to avoid defaults while also shifting the pain of sanctions onto Western creditors (who must now accept Rubles and then cannot move the money out of Russia).  It’s worth noting that Rosneft, Gazprom, the Railway, and the Russian government all have large dollar payments on outstanding debt due soon (about $800 billion in the next 30 days).  So, western funds, banks, or energy companies expecting payments, you not only can’t get the money you are “paid,” but those funds will also continue to depreciate as the Ruble loses value.

BBBY stock is surging in premarket (up as much as 80%) after it became known that the Chairman of GME owns as much as 10% of the BBBY stock. GME Chairman Ryan Cohen was formerly the founder of online retailer CHWY.  He wrote a letter to the BBBY board suggesting they selloff the BuyBuy Baby chain and consider taking the company private via sale to private equity firms.  However, he reiterated the main problems facing the company (supply chain issues and market share losses) can be solved longer-term.

Overnight, the Asian markets were down hard.  Hong Kong (-3.87%), Shenzhen (-3.43%), and Japan (-2.94%) led the carnage.  In Europe, markets are red at mid-day, but not as bleak as in Asia.  The FTSE (-0.30%), DAX (-1.11%), and CAC (-1.21%) lead because of their size, but some of the smaller exchanges are both much deeper in the red as well as even a couple are slightly in the green in early afternoon trading.  As of 7:30 am, US Futures are pointing to another gap down.  The DIA implies a -0.78% open, the SPY is implying a -0.70% open, and the QQQ implies a -0.80% open at this hour.  10-year bond yields are higher to 1.775% and Oil (WTI) has spiked another 4+% to $120.48/barrel in early trading.

There is no major economic news scheduled for release on Monday.  The major earnings reports scheduled for release before the open are limited to AMR and CIEN.  Then after the close IEA reports.  

The major economic news scheduled for Friday includes Feb. Nonfarm Payrolls, Feb. Avg. Hourly Earnings, Feb. The major economic news for later this week includes January Imports/Exports and Trade Balance on Tuesday.  Wednesday brings January JOLTS and Crude Oil Inventories.  Thursday brings inflation information with the February CPI as well as Weekly Initial Jobless Claims and the February Federal Budget Balance.  Finally, on Friday we get the Michigan Consumer Expectations. 

LTA Scanning Software

Once again markets are taking a beating as Russia continues to violate ceasefires and bomb civilian areas of major Ukrainian cities. Russian sanctions and the fallout (the IMF is now predicting a significant hit to global GDP) continue to lead markets lower, but volatility remains high and losses are uneven. So, remain very cautious. If you are trading, trade small, be nimble, and be prepared to accept volatility-caused pain.

Once again, ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase moves. Trading is a marathon, not a sprint. So, stick to your trading rules and manage the things that you can control. 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 money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. 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 Plans • Private 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

Oil Prices Surged

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Oil Prices Surged

Brent crude briefly topped $130 a barrel Sunday night as oil prices surged, with the U.S. considering a total embargo on Russian oil products.  With gas prices up 65% in this year alone, worries of recession and stagflation worry investors not only in the U.S. but worldwide.  Thursday’s CPI report will be of particular interest with the sharp rise in all commodity prices this year.  However, today we have a light day of earnings of economic data, so plan for extra sensitivity to the news cycle and the rapidly rising price impacts to the consumer.

During the night, Asian markets traded sharply lower, with the Hong Kong leaning the way down 3.87% at the close.  This morning, European markets are also under pressure, seeing red across the board.  With a light day or earnings and economic data, U.S. futures point to a substantial gap down at the open in reaction to pain rise in energy prices.

Economic Calendar

Earnings Calendar

We begin the new week with a lighter day on the earnings calendar with 70 companies listed.  Notable reports include CIEN, CLAR, EGRX, IPI, ROVR, SQSP, TDUP, & VET. 

News & Technical’s

“The China-Russia relationship is valued for its independence,” Chinese Foreign Minister Wang Yi said.  Wang portrayed the bilateral relationship as separate from China’s relations with other countries or regions.  He added that the Red Cross Society of China would provide Ukraine with emergency supplies “as soon as possible.”  Economist Stephen Roach warns that the effects of any default on Russia’s sovereign debt as a result of the Ukraine crisis would spill over to emerging markets.   And China would not be unscathed, and he told CNBC’s “Squawk Box Asia.”  The U.S. has sanctioned Russia’s sovereign debt while major rating agencies slashed Russia’s sovereign rating to “junk” status.  In addition, Carl Icahn has sold the last of what was once a 10% stake in energy company Occidental Petroleum, The Wall Street Journal reported.  The sale ended an uneasy relationship between the billionaire activist investor and the oil-and-gas producer just as the latter’s shares surged.  The Journal reported that Icahn has realized a profit of some $1 billion on the Occidental investment, citing sources “familiar with the matter.”  U.S. Secretary of State Antony Blinken told NBC on Sunday that Washington is in “very active discussions” with European governments about banning imports of Russian crude.  Russia has continued to ramp up its assault on neighboring Ukraine in recent days, with forces attempting to advance and isolate the capital city of Kyiv and other major cities while being met with fierce Ukrainian resistance.  Treasury yields fell slightly in early Monday trading, with the 10-year declining to 1.7171% and the 30-year slipping to 2.1407%.

Oil prices surged over the weekend, hitting $130 a barrel, up 65% just this year, threatening recession in many countries worldwide.  The oil prices hit a 13-year high as the United States considers a total embargo of Russian oil products.  Some analysts project brent crude could reach 200 a barrel if the trend continues massively complicating the already soaring inflation.  Inflation will be front and center Thursday morning, with the CPI report before the bell.  However, we have a lighter day of earnings and economic data to kick off the new trading week.  Look for the markets to be susceptible to the Ukrainian invasion news cycle and oil prices as investors search for direction amidst the massive uncertainty.  We can no longer rule out a retest of February lows, and the huge point intraday whipsaws are likely to continue in the week ahead. 

Trade Wisely,

Doug