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Fed Day But Retail Sales and Empire First

December 15, 2021 by Ed Carter

Markets gapped down Tuesday on higher-than-expected PPI numbers and then put in an indecisive, wide-range day that both retested the T-line (and failed) and the lows from a week ago. All 3 major indices printed Doji or Spinning Top candles, meaning Wednesday’s action is more important than Tuesday’s wavering candle. On the day, SPY lost 0.69%, DIA lost 0.24%, and QQQ lost 1.04%. The VXX rose to 21.93 and T2122 dropped into the oversold territory at 9.96. 10-year bond yields rose slightly to 1.443% and Oil (WTI) fell over a percent to $70.44/barrel.

On Tuesday, the Senate passed a National Debt Ceiling increase of $2.5 trillion (to $31.4 trillion) along party lines, with one Republican absent. This is the level they estimate will cover government spending into 2023. The bill them moved to the House, who took up and passed the measure late last night. The bill then headed to the President for signature before a government exceeded the debt limit today.

Analysts seem to be moving ahead of the Fed as a wave of downgrades hit Tech stocks. This signals that they are now focusing less on growth and more on value as the Fed has now said Inflation is priority number one. Among the names taking a hit after the close were ADBE, DDOG, NET, and ZS. Those stocks all moved significantly lower in premarket trading today.

Mortgage refinancing applications fell 6% for the week, while new home purchase loan applications rose just 1%. This happened as 30-year fixed-rate loan interest rates remained at 3.30%.

Overnight, Asian markets mixed but leaned toward the red side on modest moves. Hong Kong (-0.91%), Shenzhen (-0.73%), and Australia (-0.70%) paced the losses. Meanwhile, Taiwan (+0.35%), led the 5 gainers. In Europe, stocks are mixed, but mostly green at mid-day. The FTSE (-0.24%), DAX (+0.28%), and CAC (+0.67%) are typical of the spread. However, there are a couple of outliers like Denmark (+1.07%) and Russia (+1.05%) in early afternoon trading. As of 7:30 am, US Futures are pointing to an open just on the red side of flat. The DIA is implying a -0.01% open, the SPY implies a -0.04% open, and the QQQ is implying a -0.22% ahead of morning data. 10-year bond yields are up to 1.45% and Oil (WTI) is down 1.2% in early trading.

The major economic news scheduled for release Wednesday includes Nov. Retail Sales, Nov. Import/Export index, and NY Empire State Mfg. Index (all at 8:30 am), Crude Oil Inventories (10 am), Fed Interest Rate Projections, Fed Economic Projections, Fed Interest Rate Decision, and Fed Statement (all at 2 pm), and FED Press Conference (2:30 pm). The major earnings reports scheduled for the day are limited to ABM, TTC, and REVG before the open. Then after the close, LEN, TCOM, NDSN, and HEI report.

All eyes (and most wagging tongues) will be focused on the Fed today, with widespread expectations that they double the pace of bond-buying taper. However, for my money, the $64,000 question is what they say about how soon we could see a rate hike. Many pundits now expect the statement or press conference to reveal they will end taper in Q1 and might do the first rate hike in March. (This would be at least a quarter ahead of current projections.)

Expect volatility and whipsaw action after the Fed. So, don’t rush into trades before the afternoon Fed news. Stick to your trade rules and on managing the things you can control. Just keep consistently taking profits when you have them and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Swing Trade Ideas for your consideration and watchlist: TZA, NEE, AKAM, PFE, TSCO, TSN, MDLZ, BAC, TMSU. 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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Bears Returned to Work

December 14, 2021 by Doug Campbell

The SPY could not hold onto Friday’s record as the bears returned to work, creating minor technical damage in the QQQ and raising uncertainty with bearish candle patterns left behind. In addition, concerns of economic impacts from the rapidly spreading variant dinted investor sentiment. Today we will turn our attention to the pending PPI report and the beginning of the FOMC meeting. If the inflation numbers come in hot will, we again choose to ignore? If we don’t get a significant reaction from the PPI, then look for choppy market conditions as we wait on the FOMC decision Wednesday afternoon.

Overnight Asian markets worried about potential impacts of the new variant closed in the red across the board with led by Hong Kong falling 1.33%. This morning, European markets trade mixed and muted, keeping an eye on rising pandemic infection rates and central bank decisions. With a light day of earnings and key inflation data just around the corner, U.S. futures point to mixed open with a notable gap down forming in tech before the data.

Economic Calendar

Earnings Calendar

We have just 15 companies listed on the Tuesday earnings calendar, with several unconfirmed. Notable reports include ASPU & CLSK.

News & Technicals’

The report said that the recovery to be affected by a new surge in Covid-19 cases, with jet fuel getting hit hard. In addition, its authors noted that the emergence of the new omicron variant had already brought about new restrictions on international travel. Toyota, one of the world’s largest automakers, is planning to invest 4 trillion yen ($35 billion) to build a full lineup of 30 battery-powered electric vehicles by 2030. It aims to increase global sales of battery electric vehicles by 3.5 million units a year by 2030. Most of Toyota’s current electric vehicle sales are hybrid EVs powered by an internal combustion engine and battery-operated electric motors. ACCORDING TO FINANCIAL FILINGS OUT LATE MONDAY, Tesla CEO Elon Musk sold another 934,091 shares of his electric car company, which are worth around $906.49 million. Musk also exercised options to buy 2.134 million shares of Tesla at the strike price of $6.24 per share granted to him via a 2012 compensation package. Musk, the wealthiest person globally and was just named Time Magazine’s 2021 Person of the Year, still has millions of stock options that he needs to exercise by August 2022. Treasury yields tick higher in early Tuesday trading, with the 10-year trading up to 1.4326% and the 30-year inching higher to 1.8145%.

The bears returned to work on Monday; the rapidly spreading variant fears of economic impacts grow. Adding to the uncertainty, another key inflation PPI report and the beginning of the FOMC meeting may double the amount of taper and signal rate increases possible in 2022. The DIA left behind an evening star pattern at price resistance but managed to hold current support levels. The SPY could not hold onto Friday’s record falling back into a consolidation zone holding just above support. Finally, the QQQ suffered technical damage in the Monday selling, breaking support and falling into the huge gap left behind on December 7^th. IWM remains the weakest of the indexes nearing a retest of the December 1^st low. The question for today is, will the bulls find the energy or inspiration to defend, or will the bears gain the edge? Last Friday, the market chose to ignore the surging inflation. Can they do the same today if the PPI number comes in hot? We will soon find out. So, buckle up and prepare for another dose of price volatility.

Trade Wisely,

Doug

Fed Meeting Starts and New EU Online Rules

December 14, 2021 by Ed Carter

Markets opened flat to just slightly lower on Monday. However, stocks then proceeded to sell off until 11:30 am before bouncing along the bottom the rest of the day. This took us back down into the range of the recent week in the large caps, but the QQQ gave up last week’s range. All 3 major indices printed ugly black candles. On the day, SPY lost 0.89%, DIA lost 0.89%, and QQQ lost 1.44%. The VXX rose 4% to 21.64 and T2122 (4-week New High/Low Ratio) dropped to 32.51. T2108 (Percent of stocks above their 40sma) fell to 28%, indicating there are relatively few stocks holding the market up. 10-year bond yields dropped to 1.414% and Oil (WTI) fell to $71.13/barrel.

The so-called “meme stocks” took another beating Monday. AMC lost over 15% and GME lost almost 14%. BBBY lost “only” 6.5% on the day. This brings AMC and GME’s total loss for the month to over 30% each. BBBY is faring a bit better for December, down only 9.7%.

Bloomberg reports that the EU Parliament passed new rules, limiting online content and advertising on Monday evening. These rules would make significant changes to the way online behemoths operate. Among the new rules are one that would put major limitations on advertising to minors, prohibit companies from requiring users to submit to online tracking, and would require content providers to take down any posts or materials the EU deems illegal. Sources told Bloomberg that the entire Parliament must now ratify the rules in January, but that the entire EU Parliament is expected to go for even more restrictions that would prohibit all online targeted advertising. GOOG, AAPL, and FB could see major changes if this happens and every major advertiser might be impacted if this altered marketing effectiveness.

Last night, on the eve of the Fed meeting, the CEO of MS called for the FOMC to raise rates soon. He also said, “the Fed is 10 rate increases behind normal (where they should be)”. It is widely expected that the FOMC will double the speed of their bond-buying taper. If they do, this will conclude during Q1. The MS CEO seemed to be calling for a rate increase by March, which would be months sooner than the market currently has priced in and quarters ahead of previous Fed guidance. (A CNBC survey is predicting the first rate hike in June.)

Overnight, Asian markets leaned heavily to the red side, with only two exceptions, but on mostly modest moves. Hong Kong (-1.33%), Taiwan (-0.95%), and Malaysia (-0.93%) paced the losses. In Europe, stocks are more mixed at mid-day, again on modest moves. The FTSE (+0.46%), DAX +0.07%), and CAC (+0.05%) are fairly typical in the region, with only Denmark (-1.17%) as an outlier. As of 7:30 am US Futures point toward a slightly lower open. The DIA implies a +0.08% open, the SPY implies a -0.11% open, and the QQQ is implying a -0.42% open at this hour. 10-year bond yields and Oil is flat in early trading.

The major economic news scheduled for release Tuesday is limited to Nov. PPI (8:30 am). There are no major earnings reports scheduled for the day. However, as mentioned above, today is the beginning of the December Fed meeting.

Global markets seem to be trying to hold ground waiting to see just what FOMC says on Wednesday afternoon. This “wait and see” stance is likely to make for a dead market today and Wednesday morning. However, it also can magnify the impacts of other news like omicron, politics, etc. So, just be prepared for a market similar to how Naval pilots describe night patrol flights…hours of boredom punctuated with moments (landings) of high anxiety.

Take your time. Don’t rush into trades the first minutes of the day. Stick to your trade rules and on managing the things you can control. Just keep consistently taking profits when you have them and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Swing Trade Ideas for your consideration and watchlist: CNC, TMUS, COST, XLRE, TSLA, TSN, PFE, AMC, ZION, TZA, SQQQ, PTON. 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

Squeaked Out a New Record

December 13, 2021 by Doug Campbell

In defiance of surging inflation, the bulls took it as a buying battle cry and squeaked out a new record high close on the SPY Friday. Although the premarket is pushing for more with a gap open, it would be wise to remember the Fed may double the taper rate on Wednesday as the committee appears to learn more hawkish going forward. That said, we can’t rule out price volatility, so watch for the possibility of a pop and drop, whipsaws, and overnight reversals as we wait.

Asian markets began the week trading mixed, pondering the outcome of central bank meetings. This morning, European markets trade mixed but mostly green with monetary policy decisions in focus. With a light day of earnings and economic data, the U.S. tries to follow through on Friday’s record, pushing for a bullish gap up open.

Economic Calendar

Earnings Calendar

Kicking off a new week, we have a very light day with 15 companies listed, but several are unconfirmed. Notable reports include JILL, PHX & REPX.

News & Technicals’

A new study says that the commercial real estate industry faces an intensifying threat from flooding, likely leading to billions of dollars in increased costs. Approximately 730,000 retail, office, and multi-unit residential properties face an annualized risk of flood damage in the United States. The structural damage from flooding is projected to cost $13.5 billion in 2022, according to First Street Foundation, a nonprofit group, and global commercial engineering firm Arup. The research incorporated sea-level rise but focused more on flash floods, also known as pluvial flooding. Chinese President Xi Jinping is set to meet virtually with Russian President Vladimir Putin on Wednesday, China’s Ministry of Foreign Affairs said Monday. The U.S. and other G-7 leaders issued a statement Sunday condemning “Russia’s military build-up and aggressive rhetoric towards Ukraine.” The lira was trading at 14.33 to the dollar at 1:25 p.m. in Istanbul, a slight recovery from the record low of 14.99 earlier in the day. Turkey’s central bank has subsequently announced it will intervene directly in the foreign exchange market, selling dollars to prop up the lira. MotorTrend named the all-electric Rivian R1T the publication’s 2022 truck of the year, beating out other pickups from Ford, General Motors, and Hyundai. MotorTrend called the R1T “the most remarkable pickup truck we’ve ever driven” in a release announcing the award. Treasury yields trade slightly lower in early Monday trading, with the 10-year dipping to 1.4735% and the 30-year sliding to 1.8627%.

With the SPY squeaking out a new record high close on Friday, it could do the job of attracting more money to the market as we move toward the end of the year. The SP-500 PE ratio is 96% above the historical average, and the Buffet Indicator puts the composite market values to GDP 213% above the historical trend. That said, the bulls are in control, and bad jobs data, soaring inflation, low productivity numbers will not stand in the way of more buying! U.S futures point to more records at the open but be careful chasing until you see some follow-through buying. We can not rule out the possibility of pop and drop with the investors eyeing a Fed taper on Wednesday.

Trade Wisely,

Doug

Fed Watch Begins

December 13, 2021 by Ed Carter

Markets gapped higher on Friday, apparently pleased with the 6.8% CPI number (the highest since 1982). After the open wandered sideways most of the day before a rally the last hour took markets out near the highs. This left us with gap-up, white, Hammer or Hanging Man candles in all 3 major indices. It is worth noting that the SPY closed at a new all-time high in the SPY. On the day, SPY gained 0.94%, DIA gained 0.59%, and QQQ gained 1.09%. The VXX fell to 20.78 and T2122 rose to mid-range at 45.89. The 10-year bond yields fell to 1.487% and Oil (WTI) rose to $71.98/barrel.

On Monday, British PM Boris Johnson reported that at least one person has died of the omicron variant in his country. He went on to cite an Oxford University study that has found the omicron can infect those that have had the full initial vaccination (one or two jabs depending on the vaccine requirements). Johnson said it appears omicron is a somewhat milder version of the virus, but that needs to be set aside to focus on what his experts are telling him will be a tidal wave of omicron cases in the UK. The FTSE reacted to this news and pulled back after his comments.

Regulatory filings this morning show that PFE is acquiring ARNA in a $6.7 billion deal. PFE will pay $100 per share for ARNA, which is a 100% premium to the companies Friday close. The move bolsters PFE’s portfolio of treatments in the gastric, dermatology, and cardiology arenas. In other stock-related news, a RIVN

Over the weekend, technology industry news gave some interesting perspectives on the global “ship shortage.” It seems that despite all the talk of chip shortages (from automakers, electronics, etc.), semiconductor manufacturers have sold more chips in 2021 than ever before. As an example, computer graphics card sales are at a significant new high despite being “out of stock” for long periods in commercial outlets. The main reason for this seems to be sales to crypto miners, many of which buy in bulk. This is sometimes hidden because NVDA (the largest GPU manufacturer) began selling directly to mining operations last year and does not report those sales separately. (Miners often pay a premium and buy in lots of 1,000 or more cards at a time.)

Overnight, Asian markets were mixed but leaned to the green side in modest trading. Japan (+0.71%), Shenzhen (+0.67%), and outlier New Zealand (+1.13%) led to the upside. Meanwhile, India (-0.82%), Singapore (-0.50%), and Taiwan (-0.33%) paced the losses. In Europe, markets are mostly green at mid-day. Only Russia (-1.52%) shows significant losses while the FTSE (-0.19%) is the only other red. However, the DAX (+0.94%), and CAC (+0.02%) are more typical of the range seen across Europe in early afternoon trading. As of 7:30 am, US Futures are pointing to a modest green open. The DIA is implying a +0.06% open, the SPY implies a +0.22% open, and the QQQ implies a +0.38% open at this hour. 10-year bond yields are moving lower (1.47%) and Oil (WTI) is off three-quarters of a percent in early trading.

There is no major economic news scheduled for release Monday. There are also no major earnings reports scheduled for the day either. However, remember this is Fed meeting week.

With the Fed meeting coming this week, global markets seem to be waiting to see what the fallout is from the FOMC discussing speeding up the taper. (And whether there is any news or wording implication of faster rate hikes in 2022.) This “wait and see” stance is likely to carry over into the US and might make for a dead market over the next 2-3 days. However, it also can magnify the impacts of other news like omicron, politics, etc. So, just be prepared for a market similar to how Naval pilots describe night patrol flights…hours of boredom punctuated with moments (landings) of high anxiety.

Stick to your trade rules and on managing the things you can control. (Not trying to force the market to obey your desires.) Consistently take profits when you have them and move your stops in your favor. Don’t be in a hurry to chase, trade carefully, and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: BBIG, RIVN, ON, MSFT, ORCL, F, HIMX. 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

Hurry and Wait

December 10, 2021 by Doug Campbell

By the end of Thursday, we had an interesting mix with tech shares sliding south and the defensive names holding their ground. So the question is that a sign of trouble or just another choppy session as we hurry up and wait on the CPI number? If estimates are correct, we could see an inflation rate at nearly a 40 year high! If true, will it inspire the bears, or will the market choose to ignore as it did with the big miss on job data last week? Expect some volatility price action as we react and follow up with a reading on consumer sentiment.

Asian markets finished the week with selling across the board during the night. Likewise, European markets are taking a wait-and-see approach with muted price action and modest gains and losses as they wait. Here in the U.S., however, the morning pump has begun pointing to a gap up open ahead of the CPI. So the wait is about over, but will it inspire the bulls or the bears?

Economic Calendar

Earnings Calendar

We have a very light day on the Friday earnings calendar with 14 companies listed, but only two confirmed. Notable reports include ASO and JOUT.

News and Technicals’

Elon Musk sold 934,091 Tesla shares, according to filings with the Securities and Exchange Commission published Thursday. Musk sold a total of $9.85 billion in Tesla stock last month. Some of the shares were sold in part to satisfy tax obligations related to an exercise of stock options. Last week, Chinese ride-hailing app Didi announced that it would delist from the New York Stock Exchange and pursue a listing in Hong Kong. Delisting means a Chinese company traded on an exchange — like the Nasdaq or New York Stork Exchange — would lose access to a broad pool of buyers, sellers, and intermediaries. In addition, rising political pressure in the U.S. and China is increasing the chance that Chinese stocks listed in New York might be forced off exchanges there. While the Chinese government has yet to ban foreign listings outright, new rules announced this summer have discouraged what was once a rush of Chinese IPOs in the U.S. Late Thursday; Fitch Ratings said Evergrande had not confirmed payment of its latest debt obligation, triggering a default. As of Friday afternoon, S&P Global Ratings did not have a statement and referred CNBC to its report Tuesday that said: “default looks inevitable for Evergrande.” Moody’s, another rating agency, did not respond to a request for comment. “We should have been calling this a technical default for a long time already, but nobody dared,” Alicia Garcia-Herrero, Natixis’ chief economist for Asia-Pacific, said Friday. Treasury yields moved slightly higher in early Friday trading, with the 10-year rising to 1.5145% and the 30-year moving up slightly to 1.8811%.

Yesterday we had another choppy morning session, but tech shares began to slide later in the day while defensive names held their ground. However, it was nothing more than a hurry up and wait for the CPI number coming out before the bell today. Economists expect the index to climb 0.7% from the previous month bringing the number up to a 6.7% inflation rate. To put that in perspective, if estimates are correct, it will be the highest reading in nearly 40 years! We will then check the temperature of the consumer with a reading on the sentiment, which estimates suggest declined slightly. The numbers, of course, are important, but to traders, the only thing that matters is how the market reacts to the data. On that measure, your guess is a good as mine. Of course, we have been able to ignore bad data lately, so who knows, we could set new records as we head into the weekend.

Trade Wisely,

Doug

ORCL Post Great Report and CPI On Tap

December 10, 2021 by Ed Carter

The bulls had a tough day Thursday as all 3 major indices made a modest gap lower at the open. From there the SPY and QQQ went on a gradual all-day selloff. However, the DIA went on a gradual rally until afternoon profit-taking took it down off the highs. This action left us with Bearish Evening Star-type candles in the SPY and (especially) the QQQ. However, at least as of the close, all 3 major indices were able to stay above their T-lines. On the day, SPY lost 0.68%, DIA gained 0.03%, and QQQ lost 1.47%. The VXX gained 3% to 22.20 and T2122 fell to 29.55. 10-year bond yields were little-moved at 1.497% and Oil (WTI) fell 2.5% to $70.55/barrel.

After the close, GOOG told its employees that they would not be giving raises to match inflation. Executives told a company-wide meeting that it was already had high labor costs and said they have no plans for any “inflation adjustment” on a companywide basis. The move came in response to more than 400 employee requests for the company to address the impact of high inflation (especially in the Silicon Valley area). Clearly, an issue that companies will need to address, and the pressure may get worse with today’s CPI number.

Also, after the close, ORCL beat strongly on both lines. They also announced an additional $10 billion buyback program and raised their forward guidance. However, the company also said they swung to a loss for the quarter when considering the payment of a court judgment over the compensation of former CEO Mark Hurd. Elsewhere, AVGO, COST, and LULU all beat on both lines. CHWY missed on earnings, but beat on revenue.

In government news, the Senate voted to allow them to raise the debt ceiling with a simple majority vote in a 59-35 vote. This signaled a change in stance by Minority Leader McConnell (return to bipartisan debt ceiling increases as was typical in the past) and immediately led to dissent from Republicans who oppose the idea. This eases the path to avoiding a shutdown by the December 15 deadline. They are expected to raise the limit by about $2 trillion early next week. As an aside, Senate Majority Leader Schumer said the debt ceiling vote as well as votes on the Budget and Climate packages before the Christmas break.

Overnight, Asian markets were broadly in the red, with only two green exchanges on modest moves. Hong Kong (-1.07%) and Japan (-1.00%) were outliers to the downside with most moves in the one-quarter to one-half of a percent range. In Europe, stocks are also mostly in the red on modest moves, with the big exchanges flat. The FTSE is flat (+0.01%), DAX is flat (+0.05%), and CAC (-0.01%) at mid-day. As of 7:30 am, US Futures are pointing toward a gap higher at this early hour. The DIA is implying a +0.28% open, the SPY implies a +0.35% open, and the QQQ implies a +0.29% open an hour ahead of CPI data. 10-year bond yields are up to 1.511% and Oil (WTI) is up a percent to $71.71/barrel in early trading.

The major economic news scheduled for release Friday includes Nov. CPI (8:30 am and analysts expect the highest CPI number in 40 years), Michigan Consumer Sentiment (10 am), and Nov. Federal Budget Balance (2 pm). The major earnings reports scheduled for the day are also limited to ASO before the open. There are no reports scheduled for after the close.

We got the expected rest Thursday after a few very strong days in all the major indices. However, the candles indicated there may be more of a pullback to come. Remember, not to get too tied up in the “hard right edge” of the chart and that a pullback was needed at some point to give us a higher high and higher low of a trend. Regardless, it is hard to predict the open today since the CPI number will call the tune at least early. We are expecting a terrible number, but just as a thought experiment, what would markets do if it came in even worse than is being expected? Also, remember the Fed meets next week and that is a risk because they are expected to accelerate the Taper and POSSIBLY change their long-standing position that rates will not rise in 2022.

Also, bear in mind that it is Friday. So, don’t forget to pay yourself and prepare for the weekend news cycle. Don’t be in a hurry to chase. Stick to your trade rules and on managing the things you can control. (Not trying to force the market to obey your desires.) Consistently taking profits when you have them and moving your stops in your favor should be part of your plan. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: ADVM, FANG, ERX, MRO, BP, VALE, CVS, CAT, TSN, BEKE. 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

Choppy Consolidating Price Action

December 9, 2021 by Doug Campbell

Although yesterday mainly saw choppy consolidating price action, it was a win for the bulls allowing volatility and fear to contract as if the market paused to catch its breath. Though the SPY is within striking distance of new records, the DIA, QQQ, and IWM still have substantial overhead resistance overcome. This morning we will turn our attention to the Jobless Claims but don’t be too surprised if price action remains a bit choppy as we wait on inflation details in the Friday CPI report.

During the night, Asian markets traded mixed with talk of U.S. delisting and pandemic risks. European markets trade primarily in the red this morning, with U.K. officials concerned about infection rates that appear to be doubling every 2 to 3 days. U.S. futures point to a lower open as investors monitor Chinese delisting risks and the new variant potential impacts ahead of jobs data.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 24 companies listed with a few unconfirmed reports. Notable reports include COST, AVGO, CHWY, CIEN, HRL, FIZZ, KSPN, LAKE, LESL, LULU, MESA, & MTN.

News & Technicals’

The Fed expects to say it will double the pace of its bond purchase taper next week while also likely hinting at more aggressive rate hikes in 2022. If it meets those expectations, it will mark at least the fourth significant policy change under Chairman Jerome Powell’s leadership. However, with their policy so unpredictable and forecasts proving often unreliable, the Fed could be facing a substantial credibility challenge. As regulatory risks rise in China, investors should reduce their exposure to Chinese stocks listed in the U.S., according to Jack Siu, chief investment officer for Greater China at Credit Suisse. “We think it’s prudent for holders of these stocks to … diversify, hedge their exposure, maybe switching to some of the Hong Kong-listed stocks where there’s a dual listing to hedge against this delisting risk,” Siu said. Many companies targeted by Chinese regulators have ADR listings in the U.S. At the same time, the Securities and Exchange Commission finalized rules that allow it to delist foreign stocks if they don’t meet audit requirements. The increase in omicron cases in the U.K. is on such a steep trajectory that the country’s health security agency has issued a stark warning. Omicron cases are doubling every 2-3 days in the country. “The omicron data is enormously worrying,” immunologist Danny Altmann told CNBC, pointing to the U.K’s 2.5-day doubling time of cases. Italy’s antitrust regulators fined Amazon $1.28 billion, saying the company harmed competing operators in the eCommerce logistics service. Regulators around the world are clamping down on Big Tech platforms. Treasury yields dipped in early Thursday trading, with the 10-year edging down to 1.5024% and the 30-year slipping slightly to 1.8722%.

Wednesday’s mostly choppy consolidating price action helped the VIX pullback as market fears diminished. That said, the bulls maintained control throughout the day while still challenged by overhead resistance levels in the index charts. The SPY is easily within striking distance of a new record, but the DIA and QQQ continue to lag, with more substantial resistance levels yet to recover. IWM remains the weakest indexes, still struggling to reclaim its 50-day average. Yesterday we learned that job openings topped 11 million, and this morning we will get the latest reading on the jobless claims. Unfortunately, we will have to wait until after the bell for the most consequential earnings of the day. As you plan forward, remember we will get a reading on inflation with the CPI report before the bell on Friday. It will not be a big surprise if the market continues in light choppy price action as we wait.

Trade Wisely,

Doug

All-or-Nothing Market

December 8, 2021 by Doug Campbell

It would appear the all-or-nothing market is back as investors chose the ignore the lowest productivity reading since 1960 as they rushed to buy something. The Dow has recovered nearly 1800 points since the low of December 1^st as we turn our attention to the JOLTS and petroleum data coming out later this morning. Evergrande has now officially defaulted missing payment within the grace period. Still, the question remains if the impacts will spread to the U.S. Plan your risk carefully with the indexes in such an extended short-term condition.

During the night, they continued to bounce lead by the Nikkei up 1.42% shaking off variant worries and ignoring the Evergrande default. European markets trade mixed this morning after two days of solid recovery. U.S. trade in a volatile premaket session reacting to the news from Phizer claiming the new variant can be neutralized with three vaccine doses. Buckle up for another gap higher.

Economic Calendar

Earnings Calendar

We have 27 companies on the hump day earnings calendar, with several unconfirmed reports included in that number. Notable reports include GME, A LOT, CPB, DTC, KFY, PLAB, RENT, RH, SPWH, THO, UNFI, VRA, & WEBR.

News and Technicals’

Facebook is again deferring their return to the office for three to five months. Janelle Gale, Meta’s vice president of human resources, said that Meta recognizes some staff isn’t ready to come back. In addition, Google said last week that it has indefinitely delayed its January return-to-office plan globally. It’s been two weeks since South Africa reported the omicron Covid variant to the World Health Organization. The variant is now spreading around the globe and is now in more than 50 countries. Experts have scrabbled to gain more of an understanding about the new variant, which is a heavily mutated strain of the coronavirus. Day by day, more information and early data have emerged regarding the spread of the variant. President Joe Biden’s nominee for comptroller of the currency, Saule Omarova, has withdrawn her name from Senate consideration for the post. Omarova’s withdrawal came after concerns from Republican senators about her writings as a legal scholar and her background of being raised in the former Soviet Union. Biden condemned what he called the “inappropriate personal attacks” on Omarova, “that was far beyond the pale.” Tesla CEO Elon Musk said he’s against President Joe Biden’s social and climate spending bill, pointing to his concerns with the “insane” federal deficit. “Honestly, I would just can this whole bill,” Musk said late Monday during The Wall Street Journal’s CEO Council Summit. “Don’t pass it; that’s my recommendation.” The bill would provide subsidies for electric vehicles built by union workers and funding for vehicle-charging stations. Treasury yields are slightly lower in early Wednesday trading, with the 10-year falling to 1.4614% and the 30-year drifting lower to 1.7857%.

The all-or-nothing market continues as traders and investors rush back in, shaking off the new variant concerns. In fact, the miss on the trade deficit numbers and lowest productivity since 1960 was ingnored in the rush to buy something. Evergrande has now officially defaulted, failing to make the payment before the lapse of the grace period. Other developers could soon follow as Chinese real estate values decline sharply. The question yet to be answered is, will this contagion spread to the U.S. housing market? One thing for sure is that a 300 billion default will have substantial ramifications. With indexes stretched and testing price resistance levels, we will turn our attention to the JOLTS number this morning. With the Dow having risen nearly 1800 points off the Dec 1^st low, a rest or pullback is not out of the question.

Trade Wisely,

Doug

Good News from PFE-BNTX

December 8, 2021 by Ed Carter

US Markets followed the rest of the world Tuesday (largely on omicron relief after a couple of good news stories), gapping strongly higher and following through for about an hour and a half. At that point, we saw a sideways grind the rest of the day. This left us with strong white candles that closed near the highs in all 3 major indices. On the day, SPY gained 2.07%, DIA gained 1.39%, and QQQ gained 3.01%. The VXX fell over 11% to 22.90 and T2122 jumped higher and made it just into the overbought territory at 80.22. 10-year bond yields rose to 1.48% and Oil spiked another 3% to $71.72/barrel.

Mid-day Tuesday AMZN experienced a major outage of their AWS (cloud computing) operations. For AMZN, the problem caused operational issues as deliveries had to be halted across the US for a time. (AMZN delivers two-thirds of their own packages in the US.) They went so far as to tell drivers to “go somewhere safe and wait.” More broadly, NFLX, DIS, HOOD, COIN, and other major online businesses were taken offline for a while, because they use the AWS platform to host their IT operations.

Overnight, the PFE-BNTX partnership announced that a third (booster) dose of their vaccine neutralizes the omicron variant of Covid-19. Their internal study found that after having a booster shot, patients’ antibody protection was increased 25-fold. European markets moved higher on the news.

In earnings news, after the close last night, TOL and SFIX beat on both lines, but SFIX did lower guidance. So far this morning, UNFI, THO, and KFY have beat on both lines. However, CPB beat on earnings but missed on revenue while BF.A and BF.B missed on earnings and posted in-line revenue.

Overnight, Asian markets were mostly green again. Shenzhen (+1.82%), India (+1.71%), and Japan (+1.42%) led the way higher. Only Malaysia (-0.26%) and Singapore (-0.16%) showed any red in that region. In Europe, markets are volatile today but mostly red as of mid-day. The FTSE (+0.27%), DAX (-0.38%), and CAC (-0.06%) lead the way and are typical. However, Switzerland (+1.06%) and Denmark (+1.16%) are outliers to the upside. As of 7:30 am, US Futures are pointing toward a modestly green open. The DIA is implying a +0.27% open, the SPY implies a +0.26% open and the QQQ implies a +0.23% open at this hour. 10-year bond yields are down (1.468%) and Oil (WTI) is slightly higher ($72.01/barrel) in early trading.

The major economic news scheduled for release Wednesday includes Oct. JOLTS (10 am), Crude Oil Inventories (10:30 am), and 10-year Bond Auction (1 pm). The major earnings reports scheduled for the day are also limited to BF.A, BF.B, CPB, KFY, THO, and UNFI before the open. Then, after the close, GME, GEF, and RH report.

The SPY has shot back near the all-time highs again after Tuesday’s action, with the QQQs a percent behind and the DIA about 2% behind. However, it’s been a big rise in a short time and markets may seek some rest soon. Plus, there is still resistance overhead that may prove to be an obstacle. Remember, we still have not established a new bull short-term trend…just a nice run. So continue to be careful.

Don’t be in a hurry to chase. Stick to your trade rules and on managing the things you can control. (Not trying to force the market to obey your desires.) Consistently taking profits when you have them and moving your stops in your favor should be part of your plan. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: ANET, TSCO, MRO, FANG, CVX, NOK, ON. 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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