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Uncertainty Reigns Supreme

March 4, 2022 by Doug Campbell

Uncertainty reigns supreme as the unhinged Russian invasion attacks and then seizes the largest Ukrainian nuclear power plant. Thursday proved to be another day of wild whipsaws as the market reacted to the chaotic developments pushing higher energy, food, and commodity prices. After the morning reaction, the Employment Situation numbers the market will face another uncertain weekend that may prove difficult for the bulls working to defend recent index lows. So, hold on tight it could be another rough day of price action.

Asian markets tumbled overnight, with the Nikkei and the HSI falling more than 2%. This morning, European markets trade decidedly bearish due to the dangerous Ukrainian power plant developments. Ahead of potentially market-moving economic data, U.S. futures point to a bearish open facing another weekend of uncertainty.

Economic Calendar

Earnings Calendar

We have a much lighter day on the Friday earnings calendar, with less than 25 companies listed and most unconfirmed. Notable reports include HIBB, INTT, & RPID.

News & Technicals’

The Biden administration announced a new round of sanctions targeting Russian oligarchs and their family members supporting President Vladimir Putin as he wages war in Ukraine. Asked at the White House about the expanded sanctions, press secretary Jen Psaki said that the U.S. was confident that these measures were an effective approach. President Joe Biden said later Thursday afternoon that the sanctions already imposed on Putin and those around him have “had a profound impact.” Ukraine issues a dire warning after Russia attacks the nation’s largest nuclear power plant, eventually seizing control of the facility. The assault was met with widespread condemnation as many in Europe woke to the attack on the continent’s largest nuclear facility, in Zaporizhzhya, Ukraine. Russian military forces on Friday seized control of Europe’s largest nuclear power plant, according to Ukraine’s nuclear agency, shortly after a night of Russian shelling set a building ablaze at the complex. However, authorities say emergency services have now extinguished the fire at the site, and radiation levels are normal. “Dear stock market, you were close to us, you were interesting, rest in peace, dear comrade,” financial analyst Alexander Butmanov said during an interview on Russian channel RBC. Russia’s stock market has been closed for five straight days following heavy Western sanctions over its invasion of Ukraine. Elon Musk challenged the United Auto Workers to try and organize his company’s assembly plant in Fremont, California. His comments followed President Biden’s praise of Ford and GM in his State of the Union address. Musk has been a vocal critic of the UAW for years. CNBC’s Jim Cramer on Thursday cautioned investors that buying the dip on high-growth tech stocks is a losing strategy in today’s turbulent market. “There’s still plenty of other stocks out there, but if you’re still betting on these bouncing back … I don’t think it’s going to work,” the “Mad Money” host said.

After another day, huge point whipsaws with the VIX holding a 30 handle as uncertainty reigns supreme. Dip buyers have faced one disapointment after another as the wild price swings chop up accounts. This morning we got the latest reading on the Employment Situation. Estimates suggest a very strong number that, if correct, could hurt prices, clearing another hurdle for the FOMC to act aggressively. Energy, food, and commodities continue to rise dramatically due to the geopolitical pressures fanning the flames of inflation, forcing Fed action at what could prove the worst possible time. Finally, as the chaotic and unhinged Russian invasion intensifies, another weekend of uncertainty could make it tough on the bulls working to defend recent market lows. With the violence of the moves, day traders continue to have the upper hand, while swing and position traders find it nearly impossible to matain an edge. Remember, cash is a position often underutilized in times of extreme market conditions.

Trade Wisely,

Doug

Nuclear Plant Hit – Markets Not Happy

March 4, 2022 by Ed Carter

The back-and-forth volatility continued Thursday with a gap higher at the open in all 4 major indices, which was met immediately by a whipsaw-filled all-day selloff. All 4 ended up closer to their lows than highs. The SPY and IWM both printed Dark Cloud Cover signals, the QQQ printed a Bearish Engulfing, and the DIA nearly printed a Dark Cloud Cover. On the day, SPY lost 0.48%, DIA lost 0.23%, QQQ lost 1.43%, and IWM lost 1.17%. The VXX rose 1% to 25.15 and T2122 dropped back into the mid-range at 69.66. 10-year bond yields fell to 1.854% and Oil (WTI) dropped 2.23% (after having been up 2% early) to $108.28/barrel.

Again, the Russian invasion and sanctions remain the dominant story. Overnight, Russia attacked (setting fire to) and seized the largest nuclear power plant in Europe. Thankfully, Ukrainians safely shut down the plant after Russian attacks had caused fires (which are now under control). Elsewhere, JPM says they expect the Russian economy to contract 35% in Q2 due to sanctions that are already in place. However, the EU is now seriously considering energy sanctions (in the wake of the nuclear plant attack) and analysts say it’s only a matter of time before Oil and Gas sanctions are added (those account for 60% of Russian exports). So, let’s take a closer look at the state of the global oil market.

Russia exports about 5 million barrels of oil per day plus 3 million barrels of other petroleum products (a total of about 13-15% of global petroleum exports). If those were shut down, in terms of available replacements, the US has already added just under 1 million barrels/day since the beginning of the invasion. (Whether the US sees a longer-term capacity increase is another question.) In addition, Saudi Arabia could easily increase output by 2-2.5 million barrels per day and UAE can add another million very quickly…if they could be persuaded to do so. If a deal were reached with Iran, they could also add another 1.5 million barrels of export capacity. However, even under that rosy scenario, that still leaves world markets about 3 million barrels/day short.

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Still, the US only imports 5% of its daily requirement of oil. So, a complete stoppage of Russian output would have a relatively minor impact on the US (gas prices). Europe and Asia would be the places hit worst. However, it’s possible that things would not get all that much worse than they are now. The Financial Times reported that 70% of Russian Oil exports are already unable to find buyers as companies are trying to avoid connection to Russia right now. If true, the world is already down about 5.6 million barrels/day and a maximum increase by the Saudis, UAE, and/or Iran would actually make things better than they are now in terms of oil supply…even if the other 3 million barrels of Russian exports are stopped. (And they won’t be completely stopped as China will not play ball.)

The point of all this is that things are not as bad as they seem. However, oil markets are running rampant on fear of what might happen and chasing the non-Russian supplies for appearance’s sake even though no oil sanctions have been placed on Russia yet. So, oil prices could continue to climb, but at the moment there is a path to something closer to pre-invasion pricing…if the world will play ball. If not, we could easily see $150 oil at a point where Russian supply is shut down completely. However, we are nowhere near that place yet and at the moment, we are artificially inflating oil by avoiding Russian supply so that refiners don’t look bad.

After the close, COST, AVGO, GPS, MRVL, COO, and TWI all reported beats on both lines. Meanwhile, SQM, and AGL beat on revenue but missed on earnings. However, VZIO and SWBI reported missed on both earnings and revenue.

Overnight, the Asian markets were red across the board. Hong Kong (-2.50%), Japan (-2.23%), and India (-1.53%) led the region lower, but strong losses were widespread. In Europe, we see an even worse picture at mid-day. The FTSE (-3.40%), DAX (-3.60%), and CAC (-3.72%) are leading the continent lower in a dramatic fashion. AS of 7:30 am, US Futures look to be leaning toward following the rest of the world lower. The DIA implies a -0.99% open, the SPY is implying a -0.99% open, and the QQQ implies a -0.94% open at this hour. 10-year bond yields are back down to 1.782% and Oil (WTI) is spiking another 2.5% ($110.33/barrel) in early trading.

The major economic news scheduled for Friday includes Feb. Nonfarm Payrolls, Feb. Avg. Hourly Earnings, Feb. Unemployment Rate, and Feb. Participation Rate (all at 8:30 am). There are no major earnings reports scheduled for the day.

Markets seem to be taking a beating this morning in the face of Russia’s reckless attack on the largest nuclear power plant in Europe. However, we do have the February Payrolls data yet to come in the premarket. So, there is a chance for a rebound, but I would not hold my breath. It appears Mr. Market is deciding that Friday in the face of current news and with a weekend news cycle in front of us should be a risk-off kind of day. You might do well to consider following his lead and get light, flat, or in cash for the weekend. Also remember it’s payday. So, do not forget to pay yourself. As they say, the best time to take profits is “when you have them”…not “someday if they grow bigger.”

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.)

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.

🎯 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.

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Jerome Powell Calms Markets

March 3, 2022 by Doug Campbell

Jerome Powell’s comments helped provide a nice relief rally to the market suggesting a modest increase of just 25 basis points. However, the big question is yet to be answered can the bullishness follow through with Brent Crude pricing above $115 a barrel this morning? Indexes remain in downtrends with substantial overhead price and technical resistance that the bulls will require tremendous effort to overcome. With inflation rising and the massive geopolitical concerns impacting the economy, that’s a big ask. So, expect the extreme price volatility to continue.

Overnight Asian markets mostly rallied overnight as they tried to ignore the impacts of rising energy prices. However, European markets find it difficult to rally as Russia seizes another major city tightening its grip on Ukraine. U.S. futures indicate modest declines ahead of earnings and economic data at the open. Stay focused on price action and don’t rule out continued whipsaws or overnight reversals in the days ahead.

Economic Calendar

Earnings Calendar

We have nearly 200 companies listed today on the Thursday earnings calendar, with a few that are unconfirmed. Notable reports include AVGO, AVAV, BBY, BIG, BJ, BURL, CNQ, COST, EGLE, FNKO, GPS, GOGO, KR, PBYI, SWBI, TWI, TTC, TD, UTZ, VERI, & WB.

News & Technicals’

Fed Chairman Jerome Powell said Wednesday he still sees interest rate hikes ahead though he noted the “implications for the U.S. economy are highly uncertain” from the Ukraine war. Powell called the labor market “extremely tight” and said inflation has risen well above the Fed’s 2% target. His remarks are part of mandatory appearances this week before House and Senate committees in Congress. The G-7 (Group of Seven) major economies have imposed unprecedented punitive sanctions against the Central Bank of Russia along with widespread measures by the west against the country’s oligarchs and officials. On Tuesday, French Finance Minister Bruno Le Maire told a French radio station that the latest round of sanctions aimed to “cause the collapse of the Russian economy.” There are fears that high oil prices will be highly recessionary, destroy oil demand and slow down a lot of economies, said Paul Sankey of Sankey Research. According to a research note, the firm sees oil trading in a range of $100 per barrel to $150 per barrel until the situation in Ukraine is resolved. “There’s a major, physical, immediate outage that caught an already tight market with very low inventories,” he said. The Turkish lira has lost roughly 47% of its value in the last full year, in a rout driven by Erdogan’s refusal to raise rates as inflation consistently climbed. The currency’s turbulence has hit Turks hard, as the value of their salaries dropped and living costs dramatically increased. Since September, Turkey’s central bank has cut interest rates by 500 basis points to 14%. Shipping giants including Switzerland-based MSC, Denmark’s Maersk, and France’s CMA CGM all announced on Tuesday that they would halt cargo bookings to and from Russia until further notice. The move exempted deliveries of essential supplies, such as food, medical equipment, and humanitarian goods. The confluence of Russia’s invasion of Ukraine and the barrage of punitive Western sanctions has triggered a mass corporate exodus from Moscow. Treasury yields edged slightly higher in early Thursday trading, with the 10-year pricing at 1.8784% and the 30-year rising to 2.25%.

Wednesday saw a nice relief rally after Jerome Powell suggested a more modest rate increase of 25 basis points. However, he suggested that the uncertainty of the war in Ukraine could substantially impact the economy. With Brent Crude pricing over $115 a barrel this morning, the Fed will have a substantial change ahead of them due to the inflationary impacts and puts the credibility of the FOMC in question. Today the market will turn its attention to the Jobless claims, Productivity, Factory Orders, and the possible market-moving report from COST. Yesterday’s rally, though encouraging, still has a tremendous amount of work to do if it is to break downtrends and push through the substantial overhead resistance. With the VIX closing, the day above 30 handles, traders will have to stay on their toes, watching for whipsaws and overnight reversals. As you plan forward into Friday, keep in mind the Employment Situation number coming out before the open.

Trade Wisely,

Doug

Q4 Productivity and Weekly Claims On Tap

March 3, 2022 by Ed Carter

Keeping with the recent trend of volatility, today was the bulls’ day. Markets gapped up and, after some whipsaw the first hour, then rallied all day before backing off the last hour in all 3 major indices. This left us with large white candles with decent-sized wicks on both ends, which closed back up above the T-line in all 3. On the day, SPY gained 1.83%, DIA gained 1.75%, and QQQ gained 1.68%. The VXX fell almost 6.5% to 24.96 and T2122 jumped to the edge of overbought territory at 89.43. 10-year bond yields spiked again to 1.903% as markets rushed back into risk assets and Oil (WTI) continues to scream higher, up another 7.8% to $111.52/barrel (a level not seen since 2008).

We may have gotten a “State of the Union address” pop or maybe it was a “Ukraine is not as bad as we thought” rebound at the open Wednesday. Either way, the market also got boosts from Fed speakers. James Bullard, a hawk, said the US economy is humming (“more than fully recovered”) and is unlikely to see a large impact from the invasion of Ukraine. However, he also again called on the Fed to follow through on rate hikes and remove accommodation (rapidly sell off the balance sheet assets) said the Fed may have to get more aggressive if initial hikes do not curb inflation. Fed Chair Powell also did not throw any curveballs. He told Congress the labor market is extremely tight and still sees rate hikes coming in spite of the uncertainty that the War in Ukraine has injected into economic forecasts. Reassuringly, he told Congress the likely path of increases will be in quarter-percent increments (alleviating market fears over the shock of half-percent moves).

The Russian invasion continues to be the story driving markets. On the ground, the Russian bombardment of the major cities has intensified and the Russian fleet is now approaching the major port city of Odessa. The Pentagon says the Russian offensive is moving faster in the South of Ukraine compared to the North or East. On the sanction front, the US and EU agreed to expand the list of Russian oligarchs being targeted by sanctions. In addition, for the first time, EU Parliament discussion has now begun on whether sanctions need to be placed on Russian Oil and Gas imports, which has been totally off-limits up to this point. However, energy makes up 60% of all Russian exports. So, if you want to cause pain, that is what needs to be hit. In other related news, two of the Bank of England policymakers told reporters that the war in Ukraine will upend the economic outlook in the UK and should therefore impact policy moving forward.

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After the close, GEF, SPLK, PSTG, VEEV, VSCO, and NTNX all reported beats on both lines. Meanwhile, JXN beat on earnings but missed on revenue. On the other side, EC missed on earnings but beat on revenue. However, CPNG and AEO missed on both earnings and revenue.

So far this morning, TD, SAFM, GMS, KRA, SRLP, and THNPY have reported beats on both lines. CRH and BJ both beat on revenue but missed on earnings. On the other side, WB and UTZ beat on earnings but missed on revenue. However, BBY, BURL, and BIG all missed on both lines.

Overnight, the Asian markets were mostly green. Shenzhen (-1.09%) and India (-0.65%) saw the only significant losses. Meanwhile, South Korea (+1.61%), Malaysia (+1.28%), and Japan (+0.70%) led the rest of the region higher. In Europe, with the minor exception of Denmark (+0.27%), the entire continent is in the red at mid-day. The FTSE (-0.72%), DAX (-0.86%), and CAC (-0.08%) are typical of the spread across the region in early afternoon trading. (The Russian exchange remains closed.) As of 7:30 am, US Futures are pointing toward an open just on the red side of flat. The DIA is implying a -0.09% open, the SPY implies a -0.18% open and the QQQ implies a -0.30% open at this hour. 10-year bond yields are trading lower to 1.854% and Oil (WTI) is up another 2% in early trading. However, a lot of economic news is still to come.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 am), Feb. Services PMI (9:45 am), Feb. ISM Non-Mfg. PMI and Jan. Factory Orders (both at 10 am). There are also 2 Fed speakers (Chair Powell testifies at 10 am, and Williams speaks at 6 pm). The major earnings reports scheduled for before the open include BBY, BIG, BILI, BJ, BURL, CNQ, CPG, GMS, KR, REV, SRLP, TD, TTC, and WB. Then after the close, AQN, AVGO, COST, GPS, MRVL, and VZIO report.

Markets seem to be waiting on economic data in the premarket. The worst of the fear from the invasion of Ukraine has subsided, the Fed speakers (especially Powell) have given us word that the rate increase pace will be slow and steady, and earnings are mostly behind us. Perhaps volatility will start to subside. However, do not just assume it has not gone away. Be prepared for whipsaw action when some news story drops (for example, what would be the impact if the EU did sanction Russian Oil and Gas?). Again we need to remain nimble (small), move cautiously, and keep a hedge (or exit plan) in place. So, don’t get giddy and start chasing.

Swing Trade Ideas for your consideration and watchlist: ITUB, FFIV, TDOC, PINS, CHGG, CAR, PENN, PAAS, ZIM, PFE, SPCE, CVS, AAPL, CSCO, F, KHC, MSFT, PLUG, MARA, AG, FB. 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.

🎯 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

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.

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Dangerous Market Condition

March 2, 2022 by Doug Campbell

With significant daily gaps and multiple big point, intraday whipsaws make for a dangerous market condition. Moreover, the sharply rising oil prices add inflationary pressures to an already struggling consumer. So today, Powel will have to tiptoe through a minefield wearing magnetic shoes as he testifies in Congress. Plan for more price volatility and prepare for just about anything with the market sensitive to the news cycle as Russia tightens its grip on Ukraine.

During the night, Asian markets traded decidedly bearish after stating they would not join the sanctions against Russia. But, across the pond, European markets rally, seeing green across the board as they monitor developments of the Russian advance. Ahead of Powell’s testimony in Congress, U.S. futures point to a gap up open, choosing to ignore the surging oil prices now topping $111 a barrel.

Economic Calendar

Earnings Calendar

We have a slightly lighter day with just under 150 companies listed on the midweek earnings calendar. Notable reports include DLTR, ANF, AEO, BILI, BOX, DIN, DCI, GSL, GEF, NTNX, PDCO, PBPB, PSTG, RSI, SGFY, SPLK, HEAR, VEEV, VSCO, & WMC.

News & Technicals’

Netflix has offered to buy mobile game maker Next Games as the streaming giant pushes further into gaming. Netflix plans to pay 2.10 euros ($2.33) in cash per share of Next Games, for a total value of approximately 65 million euros ($72 million). Next Games is the Finnish studio behind a mobile game based on Netflix’s hit show “Stranger Things.” When Russian President Vladimir Putin launched his first invasion of Ukraine in 2014, Crimea was annexed, his popularity ratings soared in Russia. However, massive sanctions imposed on Russia that have prompted the Russian ruble to slump against the dollar, causing living costs to rise for many Russians, could mean that he doesn’t see a boost this time. On Wednesday, China’s banking and insurance regulator said that the country opposes and will not join financial sanctions against Russia. “China’s position has been stated clearly by the Ministry of Foreign Affairs. According to a CNBC translation, our international policies are consistent,” said Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission. Guo, who is also the Chinese Communist Party secretary of the People’s Bank of China, added that he hopes all sides will maintain normal economic exchanges and that the sanctions have had no apparent impact on China so far. “Nobody is watching the State of the Union,” Musk said in an email to CNBC. Biden’s lack of a mention leading into Musk’s latest comments comes after CNBC reported on the ongoing battle between a billionaire and a commander in chief. In its fiscal fourth-quarter earnings report, Salesforce beat on the top and bottom lines. The company appointed Bret Taylor as co-CEO alongside Marc Benioff in the quarter. Treasury yields trade slightly higher in early Wednesday trading, with the 10-year trading at 1.7292% and the 30-year ticking higher to 2.115%.

The violent large point whipsaws continue to make a challenging and dangerous market condition. Oil prices surged Tuesday, rising above $105 a barrel, and this morning the futures seem to be ignoring prices jumping again to $110. As the energy rises, so does the prospect of higher inflation pinching the consumer wallet on just about everything we buy, sell, or do. Fear remains high with the Vix closing the day above a 33 handle, but the wild price action in the market suggests anything is possible, and the investors sort through the uncertainty of what comes next. Today we will turn our attention to ADP numbers and the beginning of the Powel 2-day testimony in Congress. The Chairman has a complicated task navigating the minefield of inflation during high geopolitical pressures weighing heavily on the market. Expect the volatile whipsaws to continue, and the high sensitivity to the news cycle as Russia continues to gain ground in Ukraine. Respect overhead resistance levels, and as you plan forward, remember the Friday Employment Situation before the open.

Trade Wisely,

Doug

Russia News Leads – F Splitting EV, ICE Units

March 2, 2022 by Ed Carter

Tuesday saw the bears in control all day. After a modest gap-down open, stocks sold off all morning and then whipsawed along the bottom all afternoon. The day ended near the lows. This left us with large black candles in all 3 major indices and all 3 closing on an upswing, but well back below their T-lines and apparently working on a “Dreaded h” pattern. On the day SPY lost 1.53%, DIA lost 1.80%, and QQQ lost 1.52%. The VXX gained 11% to 26.67 and T2122 fell back to the mid-range at 50.94. 10-year bond yields fell dramatically (mostly in premarket) to 1.731% and Oil (WTI) shot over 9% higher to $104.49/barrel.

The Russian invasion continues to drive markets with Financials down hard Tuesday (XLF was down 3.66%) over fear about what sanctions might do to US credit markets. (Fear of US Bank exposure to loans made to Russian entities or companies that depend on Russian markets or components.) Russia also instituted “capital controls” that prevent foreign companies from selling Russian assets in an effort to stop companies like BP and RDSA from exiting their energy sector projects. The measures also prevent hard currencies (essentially anything except Rubles) from being sent abroad. After the close, F reported that it is suspending all operations in Russia and AAPL has halted all product sales to that country. Overnight, the EU extended sanctions to Belarus, which sent troops to help the Russians on Tuesday.

Perhaps the biggest news out of the Russian invasion is the fact that Putin has managed to unite Europe (including Switzerland) and the US. He even managed to bring the Democrats and Republicans in Congress together as both sides repeatedly applauded President Biden in a very rare show of bipartisan support for sanctioning Russia and supporting Ukraine.

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This morning F announced it will split its Electric Vehicle (EV) and Internal Combustion Ending (ICE) businesses into separate divisions. This will free up the divisions to focus instead of trying to build both ICE and EV vehicles. The company said is has no plans to spinoff either division. However, in the past all the major automakers have said they expect to have all new vehicles be EV sometime in the next 10-15 years.

In a story that broke over the weekend, but only noticed by financial press Tuesday, NVDA reported that discovered it had been hacked on Feb. 23. The hack allowed the bad guys to steal over one terabyte of NVDA intellectual property. Contrary to initial fears of it being tied to Russian cyber-attacks, it appears the hack came from a South American extortion group, which demanded ransom. Interestingly, NVDA has in turn hacked the group (named LAPSU$) and encrypted the hacked data. However, LAPSU$ claims it has backups of the data and will release it unless NVDA pays the ransom. Some of the data has been released online by LAPSU$ as a show they still have the information.

After the close, AMC, CRM, ROST, JWN, JAZZ, CNR, MCFE, and KRA all reported beats on both lines. Meanwhile, HPE beat on earnings while missing on revenue. On the other side, NFE and URBN beat on revenue but missed on earnings.

Overnight, the Asian markets leaned heavily to the red side. Hong Kong (-1.84%), Japan (-1.68%), and Shenzhen (-1.05%) led the region lower. In Europe, markets are mixed but lean to the upside at mid-day. The FTSE (+0.96%), DAX (+0.70%), and CAC (+0.76%) lead the region higher as Athens (-2.10%) and Denmark (-1.39%) lead the smaller exchanges swimming against that rising tide. Russian markets remain closed. As of 7:30 am, US Futures are pointing toward a green open. The DIA implies a +0.80% open, the SPY is implying a +0.78% open, and the QQQ implies a +0.82% open at this hour. 10-year bond yields are up a bit to 1.758% and Oil (WTI) is spiking another 6% to $109.54/barrel in early trading.

The major economic news scheduled for Wednesday includes an OPEC meeting (5 am), Feb. ADP Nonfarm Payrolls (8:15 am), Crude Oil Inventories (10:30 am), and the Fed Beige Book (2 pm). There are also multiple Fed speakers (Hawkish Member Bullard at 9:30 am and Fed Chair Powell testifies at 10 am). The major earnings reports scheduled for before the open include ANF, AMRX, BHG, CLTR, DCI, DY, and PDCO. Then after the close, AEO, SQM, GEF, JXN, PSTG, SPLK, and VSCO report.

Volatility has not gone away, but it looks like the bulls will have the momentum at the open. This may prevent the bears from following through on yesterday’s bearish move. Again we need to resist the temptation to think “the bottom is in” regardless of what happens in the market today. Russia surrounded two more major cities overnight and the downside news from sanction impacts on the West has yet to really make news. In short, the bears (both Russian and market) still have plenty of ammo they have not yet put into action. So continue to be careful, nimble, hedged, and aware.

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.)

Swing Trade Ideas for your consideration and watchlist: SPCE, PLUG, XOM, PINS, QS, TECK, PENN, TWTR, ADM, BITO, INTC. 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.

🎯 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

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

RollerCoaster Ride of Uncertainty

March 1, 2022 by Doug Campbell

We finished February with a very volatile rollercoaster ride, with price action gyrating within yesterday’s big gap to benefit experienced day traders. Sadly all the price movement did not improve the technical damage in the index charts. As Russia closes in on the capital of Ukraine, expect volatility to remain very high with overnight reversals and intraday whipsaws the uncertainty unfolds. In addition, the big day of earnings reports, PMI, ISM, and construction spending numbers will add to the day’s volatility, so plan your risk carefully.

Asian markets rallied overnight, seeing green across the board, with China mainly supporting the Russian aggression. However, European markets continue to see red across the board as a Russian convoy headed for Kyiv. U.S. futures point to bearish open with a big day of data ahead, but all eyes are on the geopolitical events as Russia bears down the Ukrainian capital city.

Economic Calendar

Earnings Calendar

We have nearly 200 companies listed on the earnings calendar today, some not confirmed. Notable reports include CRM, ADT, AMRN, AMC, AZO, AVID, BIDU, BGFV, BLDR, CELH, CHS, DPZ, EHTH, FSLR, HPE, HZNP, HRL, TWNK, IGT, IQ, SJM, JAZZ, KSS, MANU, MLCO, JWN, PLBY, REGI, ROST, SRPT, SGMS, SE, SOFI, TGT, URBN, VGR, WEN, WKHS, & WW.

News & Technicals’

Russia appears to have upped the ante in its invasion of Ukraine overnight with satellite imagery indicating that a long convoy — some 40 miles or 65 kilometers long — of Russian military vehicles is heading toward Ukraine’s capital Kyiv. However, official sources have not yet confirmed the existence of the convoy. Teneo analysts said Monday that “the movement of Russian military forces suggests preparations for new, likely heavier, military action against the capital Kyiv and other key cities in the coming days.” Following Russia’s invasion of Ukraine, a Twitter post from an account named “Anonymous” summoned hackers worldwide to target Russia. Subsequent posts claimed the group was responsible for pulling down the Russian oil giant Gazprom websites, the state-controlled Russian news agency RT, and numerous Russian and Belarusian government agencies. Attracting the ire of online hackers is yet another example of how global players — from NATO powers to international businesses and everyday consumers — are protesting Russia’s invasion of Ukraine. “The world will judge them accordingly. And history will judge them accordingly,” Ukraine Foreign Minister Dmytro Kuleba told CNBC’s Hadley Gamble in an interview Monday. Moscow saw a swathe of new sanctions imposed on it over the weekend for its invasion of Ukraine. The Russian ruble tanked to an all-time low Monday, and the central bank hiked interest rates to an unprecedented 20%. Lucid Group is cutting its car production forecast for this year by as much as 40%, sending shares of the electric vehicle start-up tumbling 14% during after-hours trading. The company cited supply chain constraints for slashing production expectations to between 12,000 and 14,000 vehicles, down from 20,000 units. Lucid’s CEO said the problems are more to do with commodity parts such as glass and carpet than an ongoing global shortage of semiconductor chips. Treasury yields fall slightly in early Tuesday trading, with the 10-year dipping to 1.8044% and the 30-year moving lower to 2.1435%.

On Monday, the end-of-month trading turned out to be a rollercoaster ride as the price action seesawed in the huge point range of the morning gap. Although indexes prices moved substantially to the benefit of day traders, the result did little to nothing to repair the technical damage in the charts. As Russia pushes toward the capital city of Ukraine, attention will shift temporarily to PMI, ISM, and construction spending economic reports. We also have a huge day of earnings reports, but unfortunately, none of them will likely move the market substantially or reverse the overall bearish trends. While in a downtrend, always respect overhead resistance as uncertainty plagues the world’s markets. Large intraday whipsaws are likely here to stay for the near future as the market reacts to geopolitical events and the news cycle. Inflation is raging, and I suspect it will play a central role in today’s State of the Union Address and the Powell testimony on the hill Wednesday and Thursday. Plan carefully as overnight price reversals remain highly probable with so much uncertainty in the path ahead.

Trade Wisely,

Doug

Russian Attack Remains Focus – PMI on Tap

March 1, 2022 by Ed Carter

Monday was another day of incredible volatility with a 1% – 1.5% gap-down open, a late morning rally that filled the gap, an afternoon selloff that took us to the lows of the day, and then a late-day rally to take us out not far off the highs. This left us with gap-down large-body white candles with wicks on both ends and the SPY and QQQ able to climb back above their T-lines. On the day, SPY lost 0.25%, DIA lost 0.40%, and QQQ gained 0.38%. The VXX rose to 24.00 and T2122 was relatively flat, still inside the edge of the overbought territory at 83.17. 10-year bond yields dropped dramatically to 1.83% and Oil (WTI) spiked almost 4.6% to $95.78/barrel.

Of course, the big story was and continues to be the Russian invasion of Ukraine and the sanctions placed on Russia in return. On the ground, a 40-mile-long Russian armored column has reached the outskirts of Kyiv and bombing continues in the second largest city Kharkiv. However, Ukrainian resistance remains stiff. After the close Monday, CA announced they will be banning the import of Russian Oil (symbolic since CA only imports about $560 million per year). In the US, the national average gas price has reached $4/gallon for the first time since 2008. Two weeks ahead of the Fed meeting, talk has begun about whether and how the FOMC will adjust its timeline in the face of an uncertain impact of this war on the US (and) global economy. Fed member Waller said normally a half percent hike would be in order, but in the wake of Ukraine, a more modest approach may be required.

SNAP Case Study | Actual Trade

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After the close, HPQ, WDAY, ZM, ENDP, ACHC, and PDCE all reported beats on both lines. Meanwhile, SBAC, DAR, VRM, HY, and OKE all missed one earnings but beat on revenue. On the other side, SGRY and PRIM beat on earnings but missed on revenue. It is worth noting that HPQ said they expect Russian sanctions to cut their profits by 3 cents per share for the current quarter. Elsewhere, ZM issued revenue guidance for the year that disappointed by coming in below analyst estimates.

So far this morning, APG, BNS, BMO, BAYRY, BIDU, AZO, HRL, OPYGY, and BLDR have all reported beats on both lines. SE, IQ, and GOLF all missed on earnings but beat on revenue. Meanwhile, KTB beat on revenue but missed on earnings.

Overnight, the Asian markets were almost green across the board, with only Malaysia (-0.74%) printing any red. However, Taiwan (+1.39%), Japan (+1.20%), and Singapore (+1.12%) led a broad-based rally. In Europe, we see the mirror image at mid-day. Only Norway (+1.58%) shows any green with the FTSE (-1.25%), DAX (-2.70%), and CAC (-2.90%) leading the continent lower in early afternoon trading. As of 7:30 am, US Futures are pointing toward another red open. The DIA implies a -0.74% open, the SPY is implying a -0.81% open, and the QQQ implies a -0.87% open at this hour. 10-year bond yields are dropping sharply (-1.738%) and Oil (WTI) is up another 4.41% in early trading.

The major economic news scheduled for Tuesday includes Feb. Mfg. PMI (9:45 am), ISM Feb. Mfg. PMI (10 am), and President Biden’s State of the Union Address (8pm-ish). The major earnings reports scheduled for before the open include ADT, AZO, BIDU, BMO, BNS, BLDR, CHS, CLVT, DPZ, HGV, HZNP, HRL, IGT, IQ, SJM, KSS, KTB, PRGO, REGI, SE, TGT, TMX, and UWMC. Then after the close, ADV, AMC, BGS, CNR, FSLR, GO, HPE, JAZZ, JWN, ROST, CRM, SGMS, SWX, TTEC, URBN, and VGR report.

With no major new developments on the Russian invasion or sanctions fronts overnight, this might be a day for markets to reconsider. However, uncertainty reigns, and volatility will most likely continue to be the order of the day. So, continue to be cautious and continue to only take trades if you are willing to suffer the pain of reversals and volatility. With that said, if this is like similar past events, expect the fear to wear off over time as the impacts have had a chance to settle in. Try to ride out the shocks and take a little longer-term view. The situation does not fundamentally change global economics, but it produces uncertainty and markets hate uncertainty.

Remember that you don’t have to trade every day and you definitely don’t need to chase the premarket moves by trading early. 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. 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.)

Swing Trade Ideas for your consideration and watchlist: Rick is out sick today, so no trade ideas. 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.

🎯 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

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.

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Relived Selling Pressure

February 28, 2022 by Doug Campbell

Although the 2-day short squeeze rally relieved selling pressure to end the week, it did little to improve the technical picture of the index charts, with substantial overhead resistance and downtrends still in force. The QQQ looks to join the IWM with the 50-day average ready to cross its 200-day to the downside. With Ukrainian and Russian officials meeting in hopes of finding some common ground and a hectic week of market-moving, economic reports expect the wild price gyrations to continue. Intraday whipsaws and complete overnight reversals are likely as the drama of this week unfolds.

Overnight, Asia began their trading week mixed but mostly bullish in a muted session as oil prices surged 4%. However, this morning, European markets are decidedly bearish, with red across the board as new sanctions against Russia impact investor sentiment. Ahead of International Trade figures and a slew of earnings reports, U.S. futures point to a substantial gap down at the open. Keep in mind overnight futures lows could easily receive a test during the day.

Economic Calendar

Earnings Calendar

We have about 200 companies listed on the earnings calendar to kick off the new trading week. Notable reports include DDD, AAON, ACAD, AMBA, BLNK, BRMK, CIVI, CWEN, DNMR, DVAX, ENDP, FRPT, GDPN, HPQ, KD, RIDE, LCID, LAZR, MBI, NVAX, OKE, PRTY, PDCE, PUBM, SBAC, SDC, & WDAY.

News & Technicals’

The ruble was trading as low as 119 per dollar as offshore trading started on Monday morning during Asia hours, from nearly 84 per dollar the previous day, according to Factset data. Russian President Vladimir Putin put his country’s nuclear deterrence forces on high alert Sunday. Last week, President Joe Biden responded to Russia’s unprovoked attack on Ukraine by announcing several rounds of sanctions on Russian banks, on the country’s sovereign debt, and Putin and Foreign Minister Sergey Lavrov. Ukraine’s President Volodymyr Zelenskyy believes the next 24 hours will be a “crucial period” for his country. Ukrainian troops, and citizens that have taken up arms, continue to fight to invade Russian forces. As a result, Russia has been hit with a massive round of sanctions isolating its economy and financial system. In addition, the start-up announced Monday that U.S.-listed Chinese electric car company Nio is set to offer its shares for trading in Hong Kong on March 10. The move comes as regulatory risks grow in the U.S. and China for Chinese companies listed in New York, adding compliance challenges for businesses and investors. “Based on the foregoing and as advised by our PRC Legal Adviser [Han Kun Law Offices], we are of the view that the Cybersecurity Review Measures will not have a material adverse effect on our business, financial condition, operating results, and prospects,” the electric car company said in a filing with the Hong Kong stock exchange. Treasury yields fell sharply in early Monday trading, with the 10-year sliding to 1.9004% and the 30-year declining to 2.2270%.

The massive 2-day rally to wrap up last week’s volatility relived selling pressure as it tested some overhead resistance levels but unfortunately did little to improve the price and technical damage in the index charts. Increasing sanctions against Russia created currency fluctuations, with the ruble sharply declining to cause their central bank to impose 20% interest rates. According to reports, the next 24 hours will be critical as the Russian and Ukrainian officials meet to find common ground and begin a cease-fire. However, Putin put his nuclear facilities on high alert, heading into talks. Expect the uncertainty to matain the wild price volatility and respect overhead resistance levels with overall market downtrends holding despite the big 2-day rally. We have more inflation reports coming out on Tuesday, with Powell testifying in congress Wednesday and Thursday to add market stress, then ending the week with the Employment situation numbers. So buckle up for another uncertain week where volatile is likely to remain high and where daytraders have the upper hand.

Trade Wisely,

Doug

Russian Attack and Penalties Remain Lead

February 28, 2022 by Ed Carter

Friday brought us a modest gap higher in all 3 major indices. This let into initial selling the first 30 minutes and then a significant rally that lasted the rest of the morning. The afternoon gave us a sideways chop that ended on an upswing the last half hour and saw all 3 major indices closing very near the highs of the day. As a result, we printed shite candles and broke through the T-line in all 3. However, the downtrend from the last couple of weeks has not yet been broken. On the day, SPY gained 2.21%, DIA gained 2.47%, and QQQ gained 1.55%. VXX fell 4% to 22.95 and T2122 spiked up into the overbought territory at 85.08. 10-year bond yields were up slightly to 1.97% and Oil (WTI) fell nine-tenths of a percent to $92.00/barrel.

The main story continues to be the Russian invasion of Ukraine and the Western sanctions that have resulted. Over the weekend, some Russian banks were kicked out of the SWIFT payment system. (Some credit cards just won’t work in Russia now as well as hitting foreign trade.) This is a way to target all non-energy and non-ag exports by Russia (which while significant are still minor relative to their Energy and Ag exports). The EU also closed its airspace to Russian planes. Much more importantly, the EU banned all transactions with the Russian Central Bank, which will prevent Russia from accessing a little over half of their country’s bank reserves. This forced the Russian Central Bank to raise rates 20% (to discourage borrowing from their depleted reserves). On Monday emerging market currencies were slumping and the Ruble is down 30%. As a safe haven, the dollar is climbing versus all currencies. In non-economic fallout, on Sunday, BP announced it will be selling (presumably at a loss) its nearly 20% state in the Russian state-owned energy company Rosneft.

SNAP Case Study | Actual Trade

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In other news, during the day Friday, the SEC proposed new Short Selling rules. The rules focus on larger traders, defined as those with at least $10 million or 2.5% of the float short for any stock. The regulation would require the shorts to submit monthly data to the SEC and also require brokerages or funds that lend shares for shorting to submit data on the transaction within 15 minutes of loaning the stock. However, these proposals are still far from certain as the agency has extended the public comment period on these proposed regulations and we know large funds and brokerages oppose them.

This week also includes a broad range of economic data. Monday and Tuesday see Mfg. PMI data. Meanwhile, Wednesday brings both an OPEC meeting and US Oil Inventories (which may be important depending on the Russian invasion impacts on oil markets) as well as Fed Chair Powell beginning 2 days of Congressional testimony. Then Thursday gives us Jobless Claims, Q4 Productivity, and Services PMI. Finally, on Friday we get February Payrolls, Unemployment, and Participation data. In addition to all of this, there will be several Fed speakers during the week.

Overnight, the Asian markets were mostly green. Singapore (-1.59%) was an extreme outlier and one of only two exchanges in the red, but Shanghai (+0.32%), Japan (+0.19%), and South Korea (+0.84%) are representative of the region. In Europe, markets remain in the red, with a few smaller exchange outliers. For some reason, Denmark (+2.25%) is an extreme outlier to the green side. The FTSE (-1.24%), DAX (-2.35%), and CAC (-2.95%) are typical of the region as Europe anticipates the pain of sanctions on their own economies. As of 7:30 am, US Futures are pointing toward another significant gap down. The DIA implies a -0.84% open, the SPY is implying a -0.87% open, and the QQQ implies a -0.81% open at this hour. 10-year bond yields have dropped sharply to 1.918% as money flees to bonds and Oil (WTI) shot up about 5% to 96.12 in early trading.

The major economic news scheduled for Monday includes Jan. Goods Trade Balance and Jan. Retail Inventories (both at 8:30 am) and Chicago PMI (9:45 am). The major earnings reports scheduled for before the open include BRK.B, CANO, DQ, XRAY, FMX, GLP, ITRI, JLL, KOS, NLSN, PRTY, TGNA, VEON, and VTRS. Then after the close, ACHC, CAPL, DAR, ENDP, HPQ, OKE, PDCE, PRIM, SBAC, SGRY, VRM, WDAY, and ZM report.

Once again today we face another wave of shock from the Russian invasion (and sanctions) and yet again this is a situation where the market will likely over-react and then whipsaw. If you were not hedged or in cash going into the weekend, it is very likely too late to avoid some pain. However, you can avoid the panic and mistake of selling into the initial over-reaction this morning. Expect massive volatility today, but try to remain calm. If this is like similar past events, expect the fear to wear off as the impacts have had time to settle in. Try to ride out the initial shock this morning and be very, very, leery of chasing any new trades (either direction) until things settle down. Once again, today would be a good day to turn off the TV and go fishing or sit on your hands if you were not prepared ahead of time.

Swing Trade Ideas for your consideration and watchlist: RUN, SQQQ, ZEN, RWM, SNAP, SPCE, TMUS, TECK. 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.

🎯 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

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