Significant Overhead Resistance

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Significant Overhead Resistance

After the bell, a group of positive earnings continue to inspire the bulls but stay focused as the indexes slam into significant overhead resistance and declining 50-day averages.  Next, our attention will turn toward job numbers culminating with the Employment Situation report Friday morning.  Last week, the government began warning that the infection rates likely hurt jobs growth.  So, plan your risk carefully, watching for whipsaw or reversals as we test resistance levels.

The Nikkei rose sharply overnight, with many Asian markets still closed for the Lunar New Year.  European markets see green across the board this morning as the rebound continues.  Fueled by a group of positive earnings, U.S. futures point to a bullish open with jobs data and earnings results to keep price volatility high.

Economic Calendar

Earnings Calendar

We have nearly 130 companies listed on the Wednesday earnings calendar, with a few unconfirmed.  Notable reports include ABBV, ADTN, AFL, ALGN, ATI, ALGT, ABC, AVB, AVY, BSX, EAT, CHRW, CPRI, CTSH, DHI, ELF, EMR, RACE, GHL, HI, HOLX, HUM, IDXX, JCI, KLIC, LNC, MHO, MMP, MPC, MCK, FB, MET, MTG, NYT, NVO, ODFL, OHI, QRVO, QCOM, RYN, SPOT, TMUS, TMO, & WM. 

News & Technicals’

Ukraine’s President Volodymyr Zelenskyy warned any military confrontation with its neighbor Russia would amount to “a full-scale” war in Europe.  Russia has amassed troops along its border with Ukraine and within its ally Belarus.  However, Ukraine has played down confrontation concerns and warned of the possible consequences of a conflict on Europe’s doorstep.  PayPal reported mixed Q4 2021 earnings Tuesday and guided for the next quarter that fell short of analyst estimates.  The company expects Q1 non-GAAP earnings per share of 87 cents, short of the $1.16 analysts anticipated.  It also reported weak full-year revenue growth guidance for 2022.  AMD reported fourth-quarter earnings after the bell on Tuesday.  AMD expected $21.5 billion in sales in 2022, higher than analyst expectations.  Starbucks earnings fell short of Wall Street’s expectations, but the company’s quarterly revenue topped estimates.  The company saw higher-than-expected costs throughout its supply chain, and a resurgence of Covid-19 meant paying more employees sick leave.  China’s same-store sales fell 14% in the quarter as the country reimposed travel restrictions on some areas.  GM said it expects to generate an operating profit this year of between $13 billion and $15 billion as a semiconductor shortage shows signs of improving.  The forecast is in line with many Wall Street analysts’ expectations and the company’s record $14.3 billion pretax adjusted earnings in 2021.  In addition to the guidance, GM reported fourth-quarter earnings Tuesday that beat Wall Street’s expectations despite slightly missing revenue.  LAST YEAR, the U.S. economy grew at its fastest pace since 1984, but that momentum isn’t carrying into 2022.  An inventory build fueled most of the second-half growth that put annualized GDP up 5.7% for the year.  In the first quarter, the economy may not show any gain and possibly show a loss in GDP.  The pandemic, along with declining help from fiscal and monetary policy, will keep growth in check.  Treasury yields declined slightly early Wednesday, with the 10-year dipping to 1.7769% and the 30-year moving down to 2.0988%.

The index charts have dramatically improved, with Dow more than 2200 points off the low just eight days ago.  However, now face the challenge of significant overhead resistance and the declining 50-day moving averages across all indexes.  After the bell, a group of positive earnings should provide the bulls more inspiration to rally, but can they overcome the technical challenges above?  That will be the question to answer with FB, AMZN earnings, and a slew of jobs data coming our way the rest of the week.  In addition, the T2122 indicator is quickly nearly a short-term overbought condition, so a rest or profit-taking pullback cannot be ruled out in the days ahead.  Finally, the significant point rally has relieved a lot of pressure and kept the market emotionally charged, setting the stage for additional price volatility.  So stay focused and remember to take some profits as prices slam headlong into resistance levels.

Trade Wisely,

Doug

Strong Reports, Forecasts Buoy Bulls

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Stocks gapped slightly higher on Tuesday and then ground sideways until about 3 pm, when a couple of Fed members (Bullard and Harker) told the press they DO NOT anticipate a half-point rate hike in March and that it would take another spike in inflation before they would support a half percent move.  As a result, we saw a strong rally in the last hour of the day in all 3 major indices.  This left us with Hammer-type white candles (longer lower wick) in all three.  On the day, SPY gained 0.68%, DIA gained 0.77%, and QQQ gained 0.68%.  The VXX fell another 7% to 19.86 and T2122 rose into the overbought territory at 84.69.  10-year bond yields rose to 1.796% and Oil (ETI) gained a third of a percent to $88.42/barrel.

Click for video

After the close Tuesday, AMD, CB, EQR, OI, PKI, GOOG, and GOOGL all reported beats on both lines.  Meanwhile, PYPL, SBUX, GILD, and AMCR beat on revenue but missed on earnings.  On the other side, GM beat on earnings but missed on revenue.  However, EA and MTCH missed on both lines. 

In other earnings-related news, GM said they expect 2022 profits to be at record levels as the chip shortage ends (or at least eases).  The stock was down slightly after hours. Meanwhile, AMD issued very strong revenue guidance for 2022, well ahead of analyst estimates (and following a 68% growth in sales during 2021).  The stock soared 10% after reporting.  It is also worth noting that GOOGL announced a 20-for-1 stock split effective in July.   GOOGL was up 8% on the news.

So far this morning, TMO, WM, BSX, EMR, ROP, IDXX, ODFL, DHI, AVY, ABC, JCI, and MPC have all reported beats on both lines.  At the same time, HUM and HWM have reported beats on earnings while coming in light on revenue.

Overnight, Asian markets were mostly green, to the extent that they were open (all Chinese markets are closed until Feb. 4th or 5th).  Japan (+1.68%), India (+1.16%), and Australia (+1.17%) led the region higher.  In Europe, stocks are nearly green across the board as of mid-day, with only Switzerland (-0.10%) showing any red.  The FTSE (+0.89%), DAX (+0.40%), and CAC (+0.57%) are typical of the continent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green open…in particular in the tech-heavy NASDAQ.  The QQQ implies a +1.72% open, the SPY is implying a +0.86% open, and the DIA implies a +0.13% open at this hour.  10-year bond yields are trading slightly lower (1.779%) and Oil (WTI) is flat in early trading.

The only major economic news scheduled for release Wednesday are ADP Nonfarm Employment (8:15 am) and Crude Oil Inventories (10:30 am).  Major earnings reports scheduled for before the market include ABBV, ATI, ABC, AVY, BSX, EAT, BIP, CHRW, CPRI, GIB, DHI, EMR, EVR, RACE, HWM, HUM, IDXX, JCI, MHO, MMP, MPC, MPLX, NYT, NVS, ODFL, ROP, SAIA, SBH, SR, SPR, TMO, WNC, and WM.  Then after the close, AFL, ALGN, ALL, AVB, CENT, CCS, CHNG, CTSH, CTVA, DXC, FBHS, THG, HI, HOLX, LNC, MCK, FB, MET, MOD, MUSA, OMF, QRVO, QCOM, RRX, SKY, SPOT, SU, TMUS, TTEK, UGI, YELL report.

LTA Scanning Software

The (relief ?) rally continues and bulls are taking heart from the strong earnings news overnight. In particular, the QQQ is looking for a large gap higher on the strength of GOOG and AMD reports last night and broad-based great reports this morning. While the QQQ is gapping through its downtrend, remember that the large-cap indices have not yet reached that potential resistance. So, while the bulls have all the momentum in the short term, there is still a lot of work to do. Don’t get too “rally crazy” and start chasing.

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. Remember that 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.) Trading is a marathon, not a sprint.

Ed

Swing Trade Ideas for your consideration and watchlist: VALE, BYND, PLUG, WFC, RIDE, HOOD, TSLA. 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

A Sweet Relief Rally

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Sweet Relief Rally

Seven days after the Monday selloff that dropped the Dow more than 1000 points, we finally caught a sweet relief rally following through from the bounce that began Friday.  However, with significant overhead resistance and substantial technical damage to the index charts, the bulls still have a lot of work ahead of them.  With a full plate of earnings and economic data, we can’t rule out the possibility of a whipsaw to test the overnight lows in the futures market.  Remember, we will get the possible market-moving earnings from GOOGL after the bell.

Asian markets rallied overnight, with Shanghai for the Lunar New Year after Australia held steady cash rates.  European markets trade decidedly bullish this morning, seeing green across the board.  U.S. futures rebounded off overnight lows but pointed to muted open ahead of earnings and economic data.

Economic Calendar

Earnings Calendar

We have more than 90 companies listed on the Tuesday earnings calendar though some are not confirmed.  Notable reports include GOOGL, PYPL, AMD, AMCR, ASH, CTLT, CB, EA, EHC, EPD, XOM, BEN, GM, GNW, GILD, HP, IMO, LII, LSXMA, MDC, MTCH, MSTR, NMR, PBI, PHM, SMG, SIRI, SWK, SBUX, SXC, SMCI, UBS, UPS & UNM.

News & Technicals’

The Swiss bank UBS posted a net profit attributable to shareholders of $1.35 billion for the fourth quarter.  This was down from $1.64 billion a year earlier and lower than the $2.28 billion reported the previous quarter.  However, UBS’ bottom line was hit by an increase of $740 million in litigation provisions for a French cross-border tax case.  Danish scientists found the BA.2 subvariant, which has rapidly become dominant in Denmark, spread more easily across all groups regardless of sex, age, household size, and vaccination status.  However, only unvaccinated people demonstrated higher transmissibility of BA.2 compared to the BA.1 omicron strain, which could be due to their higher viral load.  The study found that the probability of spreading within a household was 39% for BA.2 versus 29% for BA.1.  According to internal documents obtained by CNBC, Peloton has slashed 2022 sales projections for its apparel business.  Momentum in the unit, which is run by Chief Executive Officer John Foley’s wife, seems to be fading heading into the following year after apparel revenue more than doubled to over $100 million from 2020 to 2021.  Though the division is a small fraction of the overall business, this internal look at Peloton’s apparel arm gives another glimpse into how the connected fitness company rode a wave of heightened demand amid the Covid-19 pandemic.  But that demand has started to normalize, and Peloton has to reset.  Tensions remain high between Russia and the West, with a possible military confrontation still a concern.  Russia wants to maintain its sphere of influence over former Soviet states, including Ukraine, which aspires to join the EU and NATO.  Western officials await Russia’s response to the U.S.′ refusal to cede to its demands over Ukraine and NATO operations in eastern Europe.  Treasury yields edged higher in early Thursday trading, with the 10-year rising to 1.7893% and the 30-year climbing slightly to 2.1148%. 

A sweet relief rally began rather slowly after an initial selling to begin the day but surged strongly upward headed into the close.  During the last push of the day, the DIA squeaked above its 200-day average to join the SPY that closed solidly above the key average.  However, the QQQ and IWM could not reclaim their 200-day averages, and all the indexes remain under substantial overhead resistance levels.  This morning we will turn our attention to manufacturing data that may give us insight into the impact of inflation.  According to the Econoday consensus, the Mfg. could see a slight decline from the prior month.  We will also get construction spending and job openings data.  Later today, we get the earnings results from the tech giants GOOGL and GOOG along with AMD and others after the bell.  Futures have rallied off of overnight lows, but traders will have to stay on their toes with the high price volatility, watching for the potential whipsaw to test the overnight lows.  It was very nice to get a relief rally, but with so much overhead resistance and technical damage to the index charts, it would be unwise to assume the all-clear has sounded. 

Trade Wisely,

Doug

Omicron Hits FEDX Hard

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Markets opened relatively flat (large-cap indices gapping down slightly and the QQQ gapping up a bit), but then began a face-ripping rally that lasted half an hour.  From that point onward was a slow, steady rally that even picked up steam at the end of the day.  This second strong day in a row left us with large white candles in all 3 major indices.  The move not only took out the T-lines in all 3 major indices, but it also begins a new bullish trend (low on 1/24, high on 1/26, higher-low on 1/28, and higher high on 1/31).  On the day, SPY gained 1.77%, DIA gained 1.13%, and QQQ gained a whopping 3.19%.  The VXX fell almost 7% to 21.41 and T2122 jumped back into the mid-range at 66.67.  10-year bond yields fell slightly to 1.784% and Oil (WTI) rose 1.75% to $88.35/barrel.

Click for video

Despite Monday’s very strong day for the bulls, the close wrapped up a brutal first month of the year.  For January, the SPY was down 5.27%, DIA was down 3.37%, and QQQ was down 8.75%.  However, only the QQQ is below its T-line and uptrend lines on the monthly chart.

After the close Monday, NXPI, SANM, CBT, CRUS, GGG, ARE, and FN all reported beats on both lines.  Meanwhile, KMPR missed on earnings, but beat on revenue.  However, AXTA and WWD missed on both lines. In other business news, FEDX suspended all US express freight services (overnight, 2-day, and 3-day delivery) as the company is reeling from the impact of omicron. Just another example of supply chain woes that are not easy to solve and won’t go away soon.

Overnight, Asian markets were mostly green, to the extent they were open (all Chinese markets are closed until Feb. 4th or 5th).  India (+1.37%), Thailand (+0.78%), and Australia (+0.49%) led the region’s gainers.  In Europe, exchanges are green across the board as a political settlement to the Russian threat to Ukraine seems more likely than recently.  The FTSE (+0.92%), DAX (+1.08%), and CAC (+1.11%) are leading the continent higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a slightly down open.  The DIA implies a -0.19% open, the SPY implies a -0.22% open, and the QQQ implies a -0.05% open at this hour.  10-year bond yields are trading lower (1.741%) and Oil (WTI) is off six-tenths of a percent in early trading.

The only major economic news scheduled for release Tuesday are Mfg. PMI (9:45 am) and ISM Mfg. PMI as well as Dec. JOLTS (both at 10 am).  Major earnings reports scheduled for before the market include ARCB, BR, CTLT, CRVL, ENTG, EPD, XOM, BEN, GFF, IMO, LII, LDI, MDC, MAN, PNR, PBI, PHM, SMG, ST, SIRI, SWK, UBS, UPS and WAT.  Then after the close, AMD, GOOGL, AMCR, DOX, ASH, CB, EA, EHC, EQR, GM, GNW, GILD, GOOG, IEX, LFUS, MTCH, OI, PYPL, PKI, SBUX, and UNM report.

LTA Scanning Software

The bulls have had a great couple of days. However, there remains a lot of overhead resistance to work through. So, while the very short-term trend has flipped bullish, don’t confuse that for sunshine and blue skies ahead. Continue to exercise caution is key until the longer-term downtrend has been broken.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Don’t be stubborn, protect yourself from yourself. When 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: IP, HOOD, AXP, GPS, GPN, RIDE, BYND, XOM. 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

Energetic end-of-day Rally

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Energetic end-of-day Rally

The bulls raised the hope of a relief rally with an energetic end-of-day rally that was likely more short covering to take profits than actual buying.  The question now is, can the bulls follow through to the upside as we complete the last trading day of this challenging January volatility.  With all the indexes still below their 200-day averages, the bulls still have a lot of work to repair the technical damage.  Adding to the challenge, we face a big week of uncertain earnings reports, inflation, and a slew of jobs data to keep us guessing.  That said, traders will have to watch out for whipsaws as well as overnight gaps and reversals as the market reacts.

Overnight Asian markets traded mixed with China closed for the Lunar New Year holiday.  This morning, European markets trade mixed but mostly bullish as they try to relieve the recent selloff.  U.S. futures suggest a mixed open on this last trading day of January as we face a busy week of market-moving earnings and economic data.

Economic Calendar

Earnings Calendar

We have nearly 70 companies listed on the Monday earnings calendar, with several unconfirmed.  Notable reports include  AGNC, AXTA, CBT, CRUS, FN, HLIT, NXPI, PCH, RYAAY, SANM, TTM, TT, & WWD.

News & Technicals’

Defense analysts have said that Russia is willing to risk “real financial harm” and all-out war to achieve its political objectives over Ukraine.  However, Moscow has denied that it plans to invade neighboring Ukraine, a former part of the Soviet Union, despite having assembled around 100,000 troops at the border.  On Sunday, Bob Menendez, chair of the U.S. Senate Committee on Foreign Relations, told CNN lawmakers were devising the “mother of all sanctions” against Russia.  In addition, the White House warned that the spike in Covid-19 cases in early January could skew the data in next week’s jobs report.  Brian Deese, President Joe Biden’s top economic advisor, said the way the Labor Department collects data may have a pronounced effect on next week’s January 2022 jobs report.  A recent report from the Census Bureau showed that more than 14 million Americans did not work at some point between Dec. 29 and Jan. 10 due to Covid-19 or related impacts.  According to the head of shipping at HSBC, China’s zero-Covid restrictions will impact global supply chain recovery as any small disruption in the country will likely lead to “ripple effects” across the world.  The pandemic has revealed “how lean the supply chain has become.  And there is little margin of error,” said Parash Jain, global head of shipping and ports equity research at HSBC.  Monday’s missile launch is the third attack by the Houthis this month.  The first, on Jan. 17, killed three people, while the second attack the following Monday was thwarted.  The Bank fired the starting gun on rate rises in December, hiking its main interest rate to 0.25% from its historic low of 0.1%.  Since then, data has shown U.K. inflation soared to a 30-year high in December as higher energy costs, resurgent demand and supply chain issues continued to drive up consumer prices.  Economists expect the Monetary Policy Committee to announce a 25 basis point hike on Thursday, taking the Bank Rate to 0.5%.  Treasury yields trade in early Monday traded with the 10-year pricing at 1.7802%, and the 30-year struggled for direction at 2.30842%.

An energetic end-of-day rally raised hope of a relief rally Friday afternoon, but the question is can it follow through higher on the last trading day of January.  Although the welcomed relief from the oversold condition was nice to see, it did little to repair the technical damage as the indexes remained under their 200-day averages at the close of the day.  Moreover, geopolitical tension continued to rise over the weekend with another missile attack on the UAE, another Noth Korean missile launch, and Russia threatening an invasion of Ukraine.  Finally, as the number of earnings reports continues to ramp up this week, we also have readings on PMI & ISM inflation, Job openings, ADP, and Employment reports to keep traders and their toes and volatility high.  With so much data coming our way, stay focused on price action watching for whipsaws as well as overnight gaps and reversals.

Trade Wisely,

Doug

Traders Consider Fed Half Percent Hike(s)

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Friday saw a gap higher that was immediately faded and more, but the bulls kicked into rally mode at 10 am and then again at 2:30 pm to take markets out on the highs.  This left us with large white candles with lower wicks in all 3 major indices.  However, we did not break out of the week’s lower trading range, with a lot of resistance overhead.  On the day, SPY gained 2.47%, DIA gained 1.63%, and QQQ gained 3.14%.  Overall, it was the best day for bulls since June of 2020.  The VXX fell 6% to 22.99 and T2122 rose but remains in the oversold territory at 17.82.  10-year bond yields fell to 1.793% and Oil (WTI) rose 0.62% to $87.15/barrel.

Click for video

Over the weekend, Fed member (voter) Raphael Bostic told the Financial Times that the Fed “could” hike rates by half a percent in March, or on every increase this year if needed.  This was news because the Wall Street consensus is that all the rate hikes would be in quarter-point increments.  However, Bostic was quick to point out that, at this point, his vote would still be for 3 quarter-point increases in 2022.  That said, many have called for more aggressive measures and the big Banks (GS, MS, JPM, etc.) are already saying they now expect 4 or more rate hikes this year.  Add to this, Fed Chair Powell refusing to rule out a hike at every meeting this year and markets will need to price in the possibility of both more and more harsh tightening by the Fed that has been generally expected to this point.

In business news, Sunday reports claimed CTXS is very near a buyout at $104/share.  The move was widely rumored Friday as traders drove the price to $105.55.  So, oddly enough, it appears the company has agreed to sell at a discount to the current market price.  In earnings news this morning, TT beat on both lines while LHX and OTIS both beat on earnings and came in short on revenue.

Overnight, Asian markets were mixed, to the extent they were open (all Chinese markets are closed until Feb. 4th or 5th).  South Korea (+1.87%) and Japan (+1.07%) led the gainers while Malaysia (-0.51%) paced the losses.  In Europe, stocks are mostly green as of mid-day.  The FTSE (-0.03%) and CAC (-0.12%) are the only red on the continent with the DAX (+0.22%) being more typical in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down open.  The DIA implies a -0.65% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.12% open at this hour.  10-year bond yields are flat and Oil (WTI) is up half of a percent in early trading.

The only major economic news scheduled for release Monday is Chicago PMI (9:45 am).  Major earnings reports scheduled for before the market include OTIS and TT.  Then after the close, AXTA, CBT, CRUS, FN, GGG, KMPR, NXPI, SANM, and WWD report.

LTA Scanning Software

The bears and bulls remain locked in a struggle that has lasted a week. Resistance remains overhead, even as the major indices struggle with their T-lines. However, the bears have not been able to break the consolidation and resume the downtrend either. So, continued caution is key until either the downtrend resumes or a new bullish trend takes shape. Stay nimble, hedged, and/or out of the way.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Don’t be stubborn, protect yourself from yourself. When 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: UVXY, VMW, ZIM, PTON, RWM, XLE. 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

Where’s the Relief Rally?

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Relief Rally

The Thursday gap up raised the hope that a relief rally may finally begin once again disappointed with a bearish reversal that now threatens a test of Monday’s low.  After the solid earnings performance from APPL, overnight futures rallied, but they have also reversed, suggesting a lower open this morning.  Though internals suggest a short-term oversold condition, a relief rally may be tough to come by with mixed earnings results, a hawkish Fed, and the growing concerns of a Russian invasion as we head toward the weekend.  Moreover, earnings numbers intensify next week so expect the volatility to keep traders on edge as February approaches.

Asian markets ended the trading week with a volatile session as the real estate crisis intensified in China.  This morning, European markets trade decidedly bearish, seeing red across the board lead by the DAX down more than 2%.  Likewise, U.S. futures reversed overnight bullish to suggest a bearish open with Personal Income and Consumer Sentiment data on the horizon. 

Economic Calendar

Earnings Calendar

We get a little break on the number of earnings on Friday with less than 60 companies listed and a good number of them unconfirmed.  Notable reports include CVX, ALV, BAH, CAT, CHTR, CHD, CL, RDY, GNTX, LYB, PSX, SYF, WY, & WETF.

News & Technicals’

Apple reported its largest single quarter in revenue ever, with sales growing over 11% despite supply challenges and the lingering effects of the pandemic.  In addition, Apple beat analyst estimates for sales in every product category except iPads.  Apple CEO Tim Cook said that the company’s supply issues were improving.  Apple CEO Tim Cook said the company is seeing inflationary pressure in an interview with CNBC’s Julia Boorstin on Thursday.  The observation from the Apple CEO comes as the Biden administration and Federal Reserve grapple with questions about how to tame elevated inflation.  Robinhood anticipates first-quarter revenue of less than $340 million, down 35% compared with 2021.  According to FactSet, Wall Street expected $448.2 million in revenue for Q1.  Monthly active users fell to 17.3 million last quarter from 18.9 million in the third quarter.  Robinhood is about to face its toughest comps in the first and second quarters of 2022, following its record year in 2021 from events like the GameStop short squeeze.  According to CB Insights, tech start-ups raised a record $621 billion in venture capital funding globally in 2021.  However, some VC investors worry the boom times may not last much longer as tech stocks fall amid talk of higher interest rates.  VCs say they’re already hearing about deals renegotiated at lower valuations and even withdrawal of term sheets.  Treasury yields rose slightly in early Friday trading, with the 10-year trading at 1.8266% and the 30-year climbing to 2.1126%. 

On Thursday, the wild week continued with another huge point bearish reversal that provided early hope that a relief rally might begin.  Now, rather than a relief rally, the selling poses the possibility that the low on Monday could receive another test.  As we chop around near the recent lows, the index 50-day moving averages have turned lower, technical overhead resistance levels and hinting of a possible death cross in the weeks ahead if the selling pressure continues.  Market internals continue to suggest and shot-term oversold condition, but with a hawkish Fed and the growing concern of a Russian invasion, that’s a big question as we slide toward the weekend.  Although we have a lighter day on the earnings calendar, we have economic reports that could provide early session volatility.  So as you plan for next week, keep in mind that earnings numbers continue to intensify and will likely keep us guessing with overnight reversals and intraday whipsaws.

Trade Wisely,

Doug

Third Bull Trap in a Row and Earnings

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On Thursday, for the third day in a row, markets gapped higher, put in a little follow-through and then sold off to spring the bull trap.  This left us with black candles (a very big one in the QQQ) with upper wicks.  On the day, SPY lost 0.46%, DIA squeaked out a +0.04% gain, and QQQ lost 1.01%.  The VXX rose to 24.49 and T2122 fell deeper into the oversold territory at 2.11.  10-year bond yields fell to 1.808% and Oil (WTI) was down slightly to $86.91/barrel.

Click for video

During the day, Q4 GSP came in as a massive beat (a 40-year high).  The print was +6.9% while the consensus estimate was 5.5%.  So, the Q4 economy was much stronger than expected, but the strongest inflation in 40 years also contributed to this high print.  On the other hand, December Durable Goods Orders and Pending Home Sales both came in much weaker than expected.

After hours Thursday, AAPL, AJG, BZH, V, WDC, WRB, JNPR, RHI, and KLAC all reported beats on both lines.  However, EMN, MDLZ, OLN, RMD, SYK, TEAM, and X beat on revenue but missed on earnings.  On the opposite side, FICO and WAL beat on earnings but missed on revenue.  Meanwhile, BOOT and CE missed on both lines.

Overnight, Asian markets mixed.  Japan (+2.09%), Australia (+2.19%), and South Korea (+1.87%) led the gainers.  However, New Zealand (-1.64%), Hong Kong (-1.08%), and Shanghai (-0.97%) were all lower as the region gets ready for the long Chinese market holiday that begins Monday.  In Europe, stocks are nearly red across the board at mid-day, with the lone exception of Russia (+0.90%).  The FTSE (-1.23%), DAX (-1.97%), and CAC (-2.11%) are typical and lead the region lower on fear of a Russian invasion of Ukraine and the closing of the Nord Stream 2 Gas Pipeline.  As of 7:30 am, US Futures are pointing toward a down open.  The DIA implies a -0.74% open, the SPY is implying a -0.77% open, and the QQQ implies a -0.48% open at this hour.  10-year bond yields are trading higher at 1.841% and Oil (WTI) is up to $87.24/barrel in early trading.

So far this morning, CAT, CHD, CTXS, PSX, SYF, VFC, and WY have all reported beats on both lines.  Meanwhile, ALV, BAH, CHTR, HNNMY, and CL have reported beats on earnings, but came in light on revenue.  At the same time, CVX, LYB, and SEOAY beat on revenue, but missed on earnings.

The major economic news scheduled for release Friday includes Dec. PCE Price Index, Q4 Employment Cost, and Dec. Personal Spending (all at 8:30 am), and Michigan Consumer Sentiment (10 am).  Major earnings reports scheduled for before the market include ALV, BAH, CAT, CHTR, CVX, CHD, CL, LYB, MOG.A, SYF, VFC, and WY.  There are no major reported scheduled for after the close.

LTA Scanning Software

Overhead resistance, the realization of a rough year with no help from the Fed, and fear over a Russian invasion of Ukraine have the bears in control. However, while they have smacked down the bulls’ attempt at a rally the last 3 days in a row, the bears have not been able to drive the market to further depths. So, be careful in an environment of intraday reversals and overall indecision. Also, remember it’s Friday and there is a weekend news cycle to be endured. Consider hedging, getting small, and especially taking profits where you have them.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Don’t be stubborn, protect yourself from yourself. When 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: TZA, SQQQ, SPXU, SDOW, SDS, DXD, DUST, RWM, DOG, JDST, QID. 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

FOMC Turns Hawkish

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FOMC

After the Dow swings more than 800 points from high to low, traders and investors remain on edge after learning the FOMC’s hawkish intentions.  As a result, the wild price action continued in the overnight futures even after the better than expected reports from INTC and TSLA.  Today we have another big day of market-moving economic and earnings reports that could easily inspire more whipsaws and reversals.  The path forward remains very dangerous, so plan your risk carefully as the Fed attempts to fight inflation without slowing the economy.

Asian markets had a rough night reacting to the Fed as the Nikkei fell more than 3%, closing indexes in the red across the board.  European markets gyrate in a volatile session this morning with a mix of gains and losses as they try to find direction.  U.S. futures rallied off of overnight lows, suggesting a tentative open with a slew of market-moving reports ahead to keep traders on high alert.

Economic Calendar

Earnings Calendar

Thursday will be our busiest day on the earnings calendar this week.  Notable reports include AAPL, AOS, ALK, MO, TEAM, BZH, BX, BOOT, CP, CE, CNX, CMCSA, DHR, DB, DOW, EMN, HCA, IP, JBLU, JNPR, KLAC, MMC, MA, MKC, MCD, MDLZ, MSCI, NOC, NUE, OLN, HOOD, ROK, LUV, STM, SYK, TROW, TXT, TSCO, X, VLO, V, & WDC.

News & Technicals’

Tesla beat on the top and bottom lines.  CEO Elon Musk gave a “product road map” update saying the company would not release any new model vehicles in 2022.  Instead, Tesla focuses on developing autonomous vehicle tech and scaling up production at its new factories in Austin, Texas, and outside of Berlin.  Intel reported fourth-quarter earnings on Wednesday.  Intel’s largest business, its Client Computing Group, was down 7% year-over-year to $10.1 billion, though it still beat analysts’ estimates.  Gelsinger said that the company’s next-generation server chip, Sapphire Rapids, remained on schedule to start shipping this quarter and for production to ramp up in the second quarter.  According to investment bank Morgan Stanley, the economic costs of China’s zero-Covid policy are increasingly expected to outweigh its benefits.  As a result, the bank has now cut its forecast for the first-quarter GDP to 4.5%.  “At this point, we think investors are still being too bullish with their expectation about corporate earnings,” said Laura Wang, chief China equity strategist at the firm.  Germany has provoked outrage in some quarters after it offered to supply 5,000 military helmets to Ukraine to help it defend itself against a possible Russian invasion.  The U.S. and U.K. have sent military hardware to Ukraine, as 100,000 Russian troops are believed to be located along the border with Ukraine.  However, Germany has been conspicuously reluctant to send equipment to the country.  Apple hit a record 23% market share in China in the fourth quarter of 2021, with the iPhone maker reclaiming the number one player for the first time in six years, Counterpoint Research said.  That was driven by the “relatively lower starting price” of its iPhone 13, which had a strong camera and 5G features.  Meanwhile, China’s smartphone market declined in 2021 due to component shortages and sluggish consumer spending, Counterpoint Research said.  Treasury yields traded mixed early Thursday, with the 10-year rising to 1.8495% and the 30-year declining to 2.1413%.

I guess it’s no surprise the FOMC decision to raise rates beginning in March created wild price gyrations that first shot the Dow up more than 500 but faded, selling off over 800 points in just over an hour.  The volatility continued in the overnight futures, dropping some 300 additional points to rally back near falt this morning.  Internals still indicate a short-term oversold condition, but another day of market-moving economic and earnings reports includes the behemoth APPL after the bell.  Both INTC and TSLA beat earnings estimates after the bell on Wednesday; however, the stocks are indicated slightly lower at the open today.  We should not rule out the possibility of testing the overnight futures lows, but we should also prepare for a relief rally should the day’s data inspire the bulls.  That said, we will have to keep a close eye on overhead resistance levels and expect price volatility to remain very challenging in the weeks ahead. 

Trade Wisely,

Doug

Market Looks to Reevaluate Fed News

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Once again, the bulls gapped stocks 1%-2% higher at the open Wednesday.  Then we saw a sideways meander until 2 pm.  However, when the Fed announcement and presser came out, all 3 major indices sold off hard to the lows of the day before drifting back upward to close up off the lows.  This left us with gap-up, big black candles with good-sized wicks on both ends across the major indices.  On the day, SPY lost 0.33%, DIA lost 0.44%, and QQQ lost 0.16%.  The VXX rose 2% to 24.32 and T2122 fell back into the oversold territory at 11.27.  10-year bond yields spiked again to 1.867% and Oil (WTI) rose a bit under 2% to $87.07/barrel.

Click for video

The big news of the day was the FOMC decision and Fed Chair Powell’s press conference.  Oddly enough, we learned exactly what we expected to hear.  The Fed signaled it will raise rates in March on an aggressive path to fight inflation, will have stopped buying bonds (completed the taper) by then, and will begin to significantly reduce its $9 trillion bond holdings over the remainder of the year.  Again, none of this was anything we did not already know.  So, perhaps it was Chair Powell’s refusal to rule out a hike at every meeting the remainder of the year (he was asked) that spooked markets.  Regardless of the exact trigger, markets sold hard on the news, but the bears did not have the strength to close us out on the lows or to reach significantly lower levels.

After the close Wednesday, AMP, CCI, INTC, LSTR, RJF, STX, NOW, TER, TSLA, URI, VRTX, and XLNX all reported beats on both lines.  However, EW, LVS, and PGR missed on both lines.  Meanwhile, DRE, LRCX, MKTX, and WHR missed on either the earnings or revenue lines while beating on the other.

Overnight, Asian markets reacted to the Fed news as the region was nearly red across the board.  (Malaysia +0.02% being the exception.)  South Korea (-3.50%), Japan (-3.11%), and Shenzhen (-2.77%) paced the losses.  In Europe, stocks are mixed at mid-day.  The FTSE (+0.49%), DAX (-0.45%), and CAC (-0.34%) are typical of the spread across the region.  However, Russia (+2.37%) is an outlier.  As of 7:30 am, US Futures are pointing toward a slightly green open.  The DIA implies a +0.04% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.50% open at this hour.  10-year bond yields are down to 1.823% and Oil (WTI) is up 1% in early trading.

So far this morning, DHR, MO, MMC, DOW, MSCI, XEL, TROW, ROK, BLL, DOV, TSCO, TDY, AOS, JBLU, CMCSA, VLU, LUV, MKC, and ALK all reported beats on both lines.  However, MCD and TXT reported misses on both lines.  Meanwhile, SHW, NOC, IP, and KEX reported a beat on one line and a miss on the other.

The major economic news scheduled for release Thursday includes Dec. Durable Goods Orders, Q4 GDP, and Weekly Initial Jobless Claims (all at 8:30 am) as well as Dec. Pending Home Sales (10 am).  Major earnings reports scheduled for before the market include FLWS, AOS, ALK, ADS, MO, AIT, BLL, BX, BC, CNX, CMCSA, DHR, DOV, DOW, HCA, IP, JBLU, KEX, MA, MMC, MKC, MCD, MSCI, MUR, NOC, NUE, ORI, ROK, RCI, SAP, SHW, LUV, STM, TROW, TDY, TXT, TSCO, VLO, and XEL.  Then after the close, AAPL, AJG, TEAM, BZH, CP, CE, EMN, JNPR, KLAC, MDLZ, OLN, RMD, RHI, SYK, X, V, WRB, WAL, and WDC report.

LTA Scanning Software

Traders have had a night to reconsider the Fed news. Often this leads to a reversal of the initial reaction from the afternoon of the report. In this case, that may not happen, because the news was widely expected ahead of time. Either way, it looks like markets are tepidly bullish at least before the morning economic news comes out. If we do open higher, just remember that the last two gaps higher were met with a strong selloff later in the day. So, be careful chasing unless you are hedged, small positioned, and/or very nimble.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Don’t be stubborn, protect yourself from yourself. When 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