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Buy the dip?

November 30, 2021 by Doug Campbell

The talking heads continue to sing in chorus to buy the dip, but It would seem their wide-eyed speculation will punish them this morning with a significant overnight reversal. Emotions are very high, and the truth is we still don’t know anything about the new variant and if it will have economic impacts! However, we do know that markets hate uncertainty! Uncertainty increases price volatility and, at the same time, removes a trader’s edge. Therefore, I continue to suggest caution. Avoid gambling, watch, wait, protect your capital until your edge returns.

Asian markets struggled for direction overnight mixed results, with the Nikkei down 1.63% followed by Hong Kong down 1.58%. European markets trade decidedly lower across the board this morning as traders grapple with the sharply declining global sentiment. U.S Futures have bounced off of overnight lows but continue to suggest a substantial reversal at the open, with Powell and Yellen headed to the hill to testify. So buckle up for another day of uncertainty.

Economic Calendar

Earnings Calendar

We have a bit more earnings activity today, with 31 companies listed with several unconfirmed. Notable reports include AMBA, BNED, BOX, CHS, CTRN, FRO, GFS, MOMO, HPE, NTAP, CRM, & ZS.

News & Technicals’

Moderna CEO Stephane Bancel told the Financial Times that he expects vaccines to be less effective against the new strain. As a result, Asia and European stocks fell on Tuesday; U.S. futures were also in the red. The moves lower come after European and U.S. stocks attempted a relief rally on Monday. Many unknowns surround the new omicron Covid variant; early signs indicate it’s more transmissible, but we don’t yet know what risks it poses to public health. However, global market sentiment nosedived on Tuesday morning amid fears that the Covid-19 vaccine currently in use could be less effective against the new omicron variant. Fed Chair Jerome Powell believes that the omicron variant of Covid-19 and a recent rise in coronavirus cases pose a threat to the U.S. economy. Worries over the new variant could “reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” he said in prepared remarks. Treasury Secretary Janet Yellen will join Powell on Tuesday in testifying before the Senate Banking Committee on Tuesday. Treasury Yields declined sharply in early morning trading, with the 10-year falling nine basis points to 1.4324%nd the 30-year declining six basis points to 1.8139%.

Although we saw a nice bounce yesterday as the traders tried to shrug off the possible impacts of the new variant. Though there is a chorus of talking heads suggesting buy the dip, I continue to be cautious because we don’t really know anything at this point. Currently, markets are highly speculative and combine that emotional energy with significant uncertainties, and anything is possible. The current price volatility favors intraday traders can prove t be very damaging to swing trading accounts. This morning we look to open with a significant overnight reversal that will be proof positive there is no edge in buying the dip in wide-eyed speculation. Gamble if you must, but as for me, I will stand aside, protect my capital and wait for my edge to return.

Trade Wisely,

Doug

Wild Ride of Uncertainty

November 29, 2021 by Doug Campbell

The typically dull Black Friday session became a wild ride of uncertainty with the WHO going into an emergency meeting on a new virus variant they see as concerning. What was remarkable was that before the market had even opened on Friday, a string of talking heads in the financial news were shouting, buy the dip! Unless you’re a very experienced intraday trader or a buy-and-hold forever investor, that might work. However, for most retail traders, trading without an edge is nothing more than gambling. So let the institutions and gamblers deal with the wild volatility and save your capital until your edge returns. There is nothing healthy about a 1000 point drop in a short session and nearly a 300 point gap the following day!

Asian markets closed the day red across the board. However, European markets are in rally mode after Friday’s rout. Though there is remains incredible uncertainty about what comes next, U.S. Futures point to a gap up open. Watch for the possible hefty price swing intraday whipsaws as we sort out all the emotion.

Economic Calendar

Earnings Calendar

We start this week with just over 20 companies listed on the earnings calendar, with several unconfirmed. Notable reports include ARCE, GBDC, & LI.

News & Technicals’

Stocks head into the week ahead on shaky footing after swooning in the half-day post-Thanksgiving session, and more selling is possible as investors watch developments related to a new coronavirus variant. In addition, traders are watching to see if stocks can hold critical technical levels or whether they break through them, threatening a year-end rally. Moderna’s Chief Medical Officer Paul Burton said Sunday the vaccine maker could roll out a reformulated vaccine against the omicron coronavirus variant early next year. However, it’s not clear whether new formulations will be needed or if current Covid vaccinations will provide protection against the new variant that has begun to pop up around the globe. According to the World Health Organization, the omicron Covid variant is likely to spread further and poses a “very high” global risk. It warned Monday that surges of Covid infections caused by the variant of concern could have “severe consequences” for some areas. The WHO issued a technical brief to its 194 member states on Monday. Treasury Yields climbed in early Monday trading, with the 10-year trading up to 1.5363% and the 30-year rising to 1.8805%.

The fear over a new Covid variant turned the Black Friday short session into a wild ride of uncertainty. Not typical on a day that is usually very boring and lifeless. I watched CNBC in my hotel room before the market opened, and it was amazing to see an endless string of talking heads shouting “buy the dip.” So, okay, the market is bouncing this morning, but I have to ask, do you have an edge trading a collapse of 1000 points and then a gap up of nearly 300? Volatility like this is dangerous and can heavily damage a retail trader’s account. So I plan to stand aside and let the institutions and gamblers deal with the wild price action that is likely to experience significant whipsaws intraday. In truth, we don’t know anything yet, so take a breath and wait until your edge returns. Keep your money safe because swings like this does not a healthy market make!

Trade Wisely,

Doug

Bulls Look to Bounce from Brutal Friday

November 29, 2021 by Ed Carter

Friday was a brutal half-day for the bulls. A new variant of Covid out of South Africa (Omicron) has been labeled a threat by the WHO and world markets are ran for cover. In the US, a 2% gap down, led to follow-through the first two hours. However, a rally from 11:30-12:30 am brought markets back to the gap-down level, only to be met with more hard selling until 12:55 pm. Interestingly, there was a bullish move on MASSIVE volume (probably dark pool volume from the open) the last 5 minutes. This all left us with a gap-down Spinning Top in the DIA, and gap-down big black candles in the SPY and QQQ. On the half-day, SPY lost 2.23%, QQQ lost 1.90%, and DIA lost 2.52%. The VXX spiked to 26.16 and T2122 dropped deep into the oversold territory at 3.88. 10-year bond yields fell off a cliff as traders ran for safety to 1.482% and Oil (WTI) dove an incredible amount of more than 13% to $68.17/barrel.

As mentioned above, the Omicron variant made most of the economic news over the last 4 days. Cases have been found in Europe, Australia and Dr. Fauci (NIH) says it is likely already in the US as well. Travel restrictions are already being imposed globally. So, the market faces uncertainty about what can be done to contain the economic fallout over this new outbreak as we enter Winter and with central banks and fiscal policies already facing heavy inflation. On the other hand, we don’t know the mortality rate of the new variant and it does appear that the pharma response will be faster this time. (MRNA says testing is already underway and an Omicron vaccine could be ready in early 2022.) So, while the market hates uncertainty, don’t be surprised if at least today we see a rebound after what may be perceived as Friday’s overreaction.

In-store retail traffic was down 28% on Black Friday compared to 2019 according to retail industry analysts. This was despite closures having Thanksgiving Day sales down 90% from 2019. However, Black Friday sales were still up 48% from the 2020 levels. In addition, online retailers report sales slightly lower than last year ($8.9 billion vs. $9.0 billion in 2020) on Friday. With all of this said, given the tremendously strong Q3 retail results, analysts are predicting that shoppers have just been buying throughout the season rather than so heavily on the Thanksgiving weekend. One industry analyst (Adobe Analytics) is still predicting Cyber Monday to be the biggest shopping day of the year according to CNBC.

TSLA changed its tune Friday. What had been an all-out push for deliveries at any cost for several quarters was reversed when CEO Elon Musk told employees to focus on “minimizing the cost of deliveries” rather than on hitting end-of-quarter delivery goals. However, the company still expects to meet its broad goal of achieving 50% average growth in deliveries for the year.

Overnight, Asian markets were mostly down. Japan (-1.63%), Singapore (-1.44%), and Thailand (-1.30%) led the way lower. Only Indonesia (+0.71%) was appreciably green, although Shenzhen (+0.22%) and India (+0.16%) both stayed above water. In Europe, however, markets are strongly green across the board at mid-day. The only exception is Denmark (-0.30%). The FTSE (+1.04%), DAX (+0.48%), and CAC (+0.98%) are leading the charge, but some of the smaller exchanges are up considerably more (such as Russia at +2.11%). As of 7:30 am, US Futures are pointing to a rebound. The DIA is implying a +0.52% open, the SPY implies a +0.71% open, and the QQQ is implying a +0.87% open at this hour. Oil is already making a strong comeback (up 4.97% at this time) and 10-year bond rates are also spiking in early trading.

The major economic news scheduled for release Monday includes Oct. Pending Home Sales (10 am) and an onslaught of speakers (Fed Chair Powell testifies at 10 am, Treas. Sec. Yellen speaks at 10 am, Fed member Williams speaks at 10:30 am, Fed member Clarida speaks a 1 pm, Fed member Williams speaks at 3 pm, Chair Powell speaks at 3:05 pm, and Fed member Bowman speaks at 5:05 pm. Major earnings reports scheduled for the day are limited to LI before the open. There are no major earnings reports scheduled for after the close.

The bulls have had 2.5 days to consider the real potential impact of Omicron and get past initial fears. They seem to be trying to mount a rebound charge in Europe and, so far, are looking to follow Europe back higher this morning. A lot of technical damage needs to be fixed but the bulls look ready to try early.

Be leery of chasing into what could turn out to be a pop and drop. However, for the nimble, at least a short-term rebound seems to be in the cards this morning. Focus on your trade rules and on managing the things you can control. That should include consistently taking profits when you have them and moving your stops in your favor. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: PLD, ON, DVN, PFE, HPQ, LCID, KR. 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.

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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Anything is Possible

November 24, 2021 by Doug Campbell

With a slew of potentially market-moving economic reports, I think it’s fair to say anything is possible as we slide into the Thanksgiving shutdown. On a typically declining volume getaway day for holiday travel, traders will have to plan considerable price volatility as the data come in rapid succession. So, will it inspire the bulls, or will the bears gain an edge today? Adding to the worries we have the rising U.S Bonds and a possible German pandemic lockdown, and it’s no wonder the premarket is filled with uncertainty.

Asian markets struggled for direction in a mixed session during the night, with New Zealand’s central bank announcing a rate hike. European markets traded mixed this morning, with more pandemic concerns as infection numbers hit new records. U.S. futures reflect the uncertainty currently suggesting a lower open across the board ahead of the data deluge. So, buckle up; it could be a wild pre-holiday session.

Economic Calendar

Earnings Calendar

We have a very light day on the Wednesday earnings calendar with just 20 companies listed with several unconfirmed. Notable reports include DE, CMCM, BAM, KC, FUTU, & HTHT.

News and Technicals’

Germany will decide on tougher Covid restrictions on Wednesday. Officials have been considering more Covid rules and even a full or partial lockdown. Germany sees a daily record of Covid cases and mounting pressure on hospitals as the delta variant takes hold. Health Minister Jens Spahn has already issued a dire warning to Germans this week. In addition, Samsung plans to build a $17 billion chip plant in Texas. The factory will aim to help boost the production of advanced logic semiconductors used in phones and computers. Samsung said it expects building work to commence in the first half of 2022, and it hopes to have the site in operation by the second half of 2024. The total expected investment of $17 billion will be the most significant investment Samsung has ever made in the U.S. The Turkish lira has collapsed to previously unfathomable record lows this week. The country’s central bank, the TCMB, continues to cut interest rates despite rising double-digit inflation. Since September, the central bank has cut its main policy rate by 300 basis points, sending the already depreciating currency into freefall as investors flee Turkish assets. Treasury declined modestly in early Wednesday trading, with the 10-year slipping to 1.6462% and the 30-year dipping to 1.9946%.

On the eve of the Thanksgiving market shut down, I think it’s fair to say anything is possible. Typically volume declines as traders shut down early, heading out holiday travel. However, with a massive amount of market-moving data coming our way, prepare for some wild volatility this morning as the deluge begins. First, durable goods, GDP, International trade, and Jobless claims all happen before the bell. Then comes New Home Sales, Personal Income & Outlays, Consumer Sentiment, Petroleum Statis, and the FOMC minutes. Add to that a possible announcement of more German pandemic lockdown, rising U.S. bonds, and the collapsing Turkish Lira, and we have more than enough data to digest to give investors preholiday indigestion. The market will be open for a partial day of trading Friday, but it is typically anemic price action to be very careful should you decide to trade. Right Way Options will be closed both Thursday and Friday as a result. I wish you and your families the very best on this long Thanksgiving weekend!

Trade Wisely,

Doug

Rising Rate Fears and A Lot of Data Today

November 24, 2021 by Ed Carter

Tuesday saw a morning selloff, mid-day doldrums, and an afternoon rally in all 3 major indices. This left us with a white-bodied Spinning Top in the SPY, a long-legged Doji in the QQQ, and a decent white candle in the DIA. The SPY and QQQ are testing their T-lines and the DIA is still not far below its own T-line. On the day, SPY gained 0.13%, DIA gained 0.51%, and QQQ lost 0.46%. The VXX fell to 20.85 and T2122 fell to 23.98 (still just outside of the oversold territory). 10-year bond yields rose sharply again to 1.676% and Oil (ETI) defied the major economies tapping their strategic oil reserves to rise 2.63% to $78.77/barrel.

During the afternoon a federal jury found CVS, WBA, and WMT liable for recklessly distributing massive amounts of opioids in Southern Ohio. Two Ohio counties had each claimed $1 billion in damages stemming from the flood of drug overdoses tied to prescriptions filled by the 3 pharmacy chains. Damages will not be determined until Spring and appeals are sure to follow the verdict. WMT stock took little notice of the ruling, but CVS and WBA exhibited massive volatility for 10 minutes before returning to where price had been before the ruling.

After the close, DELL, HPQ, and VMW beat on both lines. In retail GPS missed on both lines and lowered forecasts while citing supply chain issues. Meanwhile, JWN missed badly on earnings at the same time they beat on revenue. JWN stock was down 25% in after-hours trading.

In an interesting statement (which may be seen as a challenge in Beijing), JPM CEO Jamie Dimon told an audience in Boston that JPM is the same age as the Chinese Communist Party, but he’d bet that JPM lasts longer. Earlier this year, JPM won Chinese regulatory approval to fully own its Chinese subsidiary. Dimon later went on to say China is one of the biggest opportunities in the world and reiterated JPM’s commitment to doing business in China.

Overnight, Asian markets were mixed on mostly very modest moves. Japan (-1.58%) was a huge outlier since the second largest moving exchange was Thailand (+0.21%). In Europe, markets are also mixed, but lean red at mid-day. The FTSE (+0.08%), DAX (-0.65%), and CAC (-0.22%) lead the way with a few green holdouts…most notably Belgium (+0.75%) in early afternoon trading. As of 7:30 am, US Futures are pointing to a down open. The DIA is implying a -0.34% open, the SPY implies a -0.31% open, and the QQQ is implying a -0.39% open at this hour. The dramatic rise in 10-year bond rates the first two days of the week seems to be the proximate cause of the fear.

Due to the holiday-shortened week, there is a lot of data today. The major economic news scheduled for release Wednesday includes Oct. Durable Goods Orders, Q3 GDP, Oct. Trade Balance, Weekly Initial Jobless Claims, and Oct. Retail Inventories (all at 8:30 am), Oct. Core PCE Price Index, Oct. New Home Sales, Oct. PCE Price Index, and TSUN Consumer Expectations (all at 10 am), Crude Oil Inventories (10:30 am), and FOMC Meeting Minutes (2 pm). Major earnings reports scheduled for the day include DE and HTHT before the open. There are no major earnings reports scheduled for after the close.

Fast-rising interest rates seem to have spooked traders early today. However, will all that data coming at 8:30 am and 10 am, I am not so sure the opening tune has been called yet. Beware of volatility today, both from the data/news and from volume drying up as big money gets out of town to stretch the holiday weekend. It is worth noting that all 3 of the major indices seem to be giving up their T-lines in premarket trading, but again a lot of data comes within the next hour. The mid-term and long-term trends remain bullish, but in the short-term, the bears have the momentum. Remember. this is virtual Friday for many and at best Thursday is a holiday and we’ll see only half a day of trading Friday.

Watch your current positions before looking to add any new trades. Consider how you want to enter the weekend news cycle (and potential low-volume week ahead) and if there is any profit-taking or hedging to get done. Focus on your trade rules and on managing the things you can control. That should include consistently taking profits when you have them and moving your stops in your favor. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: Rick is still not feeling up to snuff, so no trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Uncertain Candle Patterns

November 23, 2021 by Doug Campbell

After a Monday morning gap followed by a surge of energetic buying setting new records by the end of the day, some uncertain candle patterns emerged. The most uncertain of them are the bearish engulfing patterns on the SPY and QQQ that seemingly rejected the index highs. So the question for today is whether the bears will wake up enough to follow through to the downside or will the bulls defend, making this nothing more than a day of price volatility? One thing for sure is this adds an element of uncertainty with the massive amount of economic data that awaits us Wednesday morning!

During the night, Asian markets mixed as they struggled for direction, with Hong Kong tech selling off strongly. European markets trade primarily lower this morning due to a Covid surge, and increasing restrictions and lockdowns occur. U.S. futures also seem to be struggling for the direction as they try to shrug off yesterday’s selling.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 39 companies listed, but of course, a number of them are unconfirmed. Notable reports include BBY, DLTR, AEO, AMWD, ADI, ADSK, BURL, CBRL, DELL, DKS, ESLT, GPS, HPQ, SJM, JACK, J, MDT, JWN, PSTG, QIWI, TITN, VMW, & XPEV.

News and Technicals’

Zoom exceeded analysts’ estimates for the quarter and issued better-than-expected guidance. In addition, the company called off its planned $14.7 billion Five9 acquisition during the quarter. On Monday, Germany’s health minister issued a stark warning to the country’s public, telling them that vaccination was the key to their survival. Outgoing Chancellor Merkel has called on Germany’s federal states to decide upon stricter measures, and another lockdown is a possibility. Austria’s lockdown began Monday and will last for at most 20 days, with a nationwide vaccine mandate taking effect on Feb. 1. The Netherlands’ launched a partial lockdown on Saturday as well. Inflation in Turkey is now near 20%, meaning basic goods for Turks — a population of roughly 85 million — have soared in price, and their local currency salaries have become severely devalued. “Insane where the lira is, but it’s a reflection of the insane monetary policy settings Turkey is currently operating under,” one analyst said. Treasury Yields fell slightly in early Tuesday trading, with the 10-year slipping to 1.6236% and the 30-year dipping to 1.9699% after digesting the news of the Powell nomination.

Yesterday’s selling left behind some uncertain candle patterns after the extremely extended tech sector sold off quickly as we headed into the close. Both the QQQ and the Spy printed some nasty bearish engulfing patterns after stretching to new records in early trading. However, one candle does not make a trend, and the question on everyone’s mind was it just a one-off event, or is it the first signal of a top? The first test will require a follow-through to the downside, and that may be a tall order considering the wild-eyed speculation we have experienced in the past couple of months. With volume likely to start declining over the next couple of days as traders head out for holiday plans, we will have to stay focused on price action and be ready for just about anything considering the massive amount of data coming your way Wednesday morning.

Trade Wisley,

Doug

Top Nations Tap Oil Reserves and Retail Earnings Stay Hot

November 23, 2021 by Ed Carter

Monday was a “Pop and Drop” day. News that President Biden would renominate Jerome Powell to Chair the Fed led to a gap up and follow-through the first hour of the day. However, all 3 indices spent the rest of the day selling off and grinding sideways, closing out the day with a heavy selloff the last 30 minutes of the day. This left us with ugly black candles with large upper wicks. The SPY and QQQ also printed Bearish Engulfing (of a Doji) type of candle. On the day, SPY lost 0.28%, QQQ lost 1.16%, and DIA gained 0.08%. The VXX rose to 21.22 and T2122 climbed just outside of the oversold territory to 25.25. 10-year bond yields spiked to 1.629% (a +0.095% gain on the day, huge in bonds) and Oil (WTI) rose half of a percent to $76.32/barrel.

Part of the reason for the market selloff and bond yield spike came during the mid-morning press conference. At that presser, both Fed Chair Powell and new Vice-chair Lael Brainard (who had been the other potential nominee for Chair) stressed the need to fight inflation. This was a bit of a surprise coming from Brainard, who has generally been seen as very doveish among Fed members. Interestingly, contrary to their own words at the presser, a White House source told Bloomberg that their priority will be full employment (which has been the Fed priority so far). It is also worth noting that many CNBC reported that many Congressional progressives had expected Brainard to get a top regulatory role, but that will not be the case since she is being nominated as Fed Vice-Chair (assuming approval).

After the close, A, ZM, URBN, CENT, and KEYS all beat on both lines. A clean sweep to the upside among major reports for the evening. Today will be another heavy retail earnings day with the preceding retail earnings reports pointing toward a strong quarter across the board for the industry.

So far this morning, the big news is that the US will tap its strategic oil reserves. China, India, Japan, the UK, and South Korea will all join in this effort to quell energy inflation by tapping their own reserves. The move may be more symbolic than truly supply-shaping. However, President Biden announced the US will release 50 million barrels from the US Reserve. This while US oil consumption is around 18 million barrels per day.

This morning, ADI, ANF, BBY, BURL, DKS, DLTR, DY, ESLT, and SJM have all beat on both lines. Meanwhile, MDT and J have beat on earnings but came up short on revenue. So, another great day of earnings is underway, especially in retail. Some retailers, such as DKS, are even raising guidance after crushing Q3 numbers.

Overnight, Asian markets were mixed, but leaned to the downside. Hong Kong (-1.20%), Taiwan (-0.77%), and Indonesia (-0.68%) paced the losses. On the other side, Australia (+0.78%) and India (+0.50%) led the gains. In Europe, markets are strongly (but not completely) red at mid-day. The FTSE (unchanged), DAX (-0.67%), and CAC (-0.20%) are typical with only Russia (+1.68%) showing green in early afternoon trading. As of 7:30 am, US Futures are pointing toward a mixed, flat open. The DIA implies a +0.05% open, the SPY implies a -0.03% open, and the QQQ is implying a -0.20% open at this hour. 10-year bond yields are rising again and Oil (WTI) is off half of a percent in early trading.

The major economic news scheduled for release Tuesday is limited to Manufacturing PMI (9:45 am) and Services PMI (10 am). Major earnings reports scheduled for the day include ANF, AEO, ADI, BBY, BURL, CBRL, DKS, DLTR, DY, ESLT, SJM, J, MDT, and XPEV before the open. Then after the close, ADSK, DELL, GPS, GES, HPQ, JWN, PSTG, and VMW report.

It looks like markets are recovering from overnight lows and looking to open just on the red side of flat following the terrible close Monday. It is worth noting that the QQQ and SPY are at their T-lines, while the DIA has long since given up that level as support. The mid-term and long-term trends remain bullish, but in the short-term, the bears have the momentum. Remember that it’s a short week for the market. So, don’t be surprised if volume dries up.

🎯 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

Holiday Week

November 22, 2021 by Doug Campbell

Holiday week trading is typically challenging due to the rapid decline in volume as traders shut down for travel. However, this week could be different with all the news hype about the beginning of a Santa Claus rally and an economic calendar full of market-moving data. Then don’t forget the possible market volatility that could happen should Biden change with the Fed Chair! With so much data coming our way, expect significant price volatility even as we pump the tech giants to new records and incredible P/E ratios. Remember to take some profits along the way.

Asian markets traded mixed overnight after the central bank kept loan rates steady. European markets trade mixed and flat this morning due to rising pandemic restrictions and protests that have erupted as a result. We don’t seem to have the same concerns with the U.S. futures, pointing to a bullish open that includes fresh new records as the tech giants continue to surge higher.

Economic Calendar

Earnings Calendar

We have 36 companies listed on the earnings calendar to kick off the shortened holiday week, with several unconfirmed. Notable reports include A, ARWR, IBEX, KEYS, NIU, URBN, & ZM.

News & Technicals’

The People’s Bank of China deleted several phrases in its latest monetary policy report, a move that economists say signals a shift toward easier policy. Despite signs of a growing slowdown in the economy, the phrases had signaled a level of restraint in central bank policy. However, the PBoC maintained a tough stance on the property market, which has struggled in the wake of Beijing’s crackdown on real estate developers’ high debt levels. In addition, Illinois legislators agreed to spend up to $694 million over the next five years to keep a handful of nuclear power plants open. The operator of the plants, Exelon, said they were losing hundreds of millions of dollars and that nuclear can’t compete with cheap natural gas and subsidized wind and solar. Critics say that Exelon had the state over a barrel and that longer-term solutions are necessary to make clean energy cheaper and more accessible. Protests against fresh Covid restrictions have continued to rock Europe over the weekend. There were demonstrations in Vienna, Brussels, and Amsterdam against new Covid rules. In addition, new coronavirus cases continue to surge across the continent. Treasury yields rose in early Monday trading, with the 10-year climbing to 1.5583% and the 30-year advancing to 1.9107% as we wait on the Biden Fed Chair appointment.

Holiday trading is always a hit-and-miss scenario when it comes to volume. That said, the news has laid it on thick over the weekend that we have the perfect setup for the so-called Santa Clause Rally to begin. Now toss in possible uncertainty with a Fed Chair appointment, inflation data, and Durable goods, GDP, and Personal incomes combined with likely declining volume throughout the shortened week, and anything is possible! However, the weekend hype seems to be working with the future, suggesting nothing but blue skies as we continue to extend the tech giants to phenomenal P/E ratios. So stay with the trend, but please remember to take some profits along the way just in case a scare or two comes along that engages the bears and price volatility.

Trade Wisely,

Doug

Short Week Looks to Start Green

November 22, 2021 by Ed Carter

We saw a divergence on Friday. The SPY opened flat and then meandered sideways all day, leaving a black-bodied indecisive candle with a larger upper wick. The DIA gapped down, sold off for half an hour and then meandered sideways the rest of the day, leaving a large black-bodied candle. However, the QQQ gapped higher at the open and rallied for half an hour before doing the same sideways meander the rest of the day. This left it as a white-bodied Spinning Top candle. On the day, QQQ gained 0.56%, SPY lost 0.18%, and DIA lost 0.96%. The VXX rose to 20.96 and T2122 dropped into the oversold territory at 16.43. 10-year bond yields fell significantly to 1.541% and Oil (WTI) was down over 4% before closing down 3.67% at $76.11/barrel (a 6-week low).

After the close Friday, F and RIVN announced they are canceling plans to co-develop an electric vehicle. F still retains a 12% ownership stake in RIVN. The CEO of F (Jim Farley) referenced “growing confidence” that F can “win in the electric space” by itself as part of the reasoning for the announcement.

Protests against Covid rules, lockdowns, and vaccination requirements broke out across Europe over the weekend. As cases have reached all-time highs (by a considerable margin) in places like Germany and Austria and cases are rising in France, Italy, UK, etc. Going into Winter, this could be a very bad situation for that region and its economy…and by extension, the US and Asia.

Overnight, Asian markets were mixed. South Korea (+1.42%) and Shenzhen (+1.41%) led to the upside, while India (-1.96%) paced the losses. However, outside of those 3 exchanges, most moves in the region were modest. In Europe, markets are mostly red at mid-day. The FTSE (flat), DAX (-0.06%), and CAC (-0.12%) are fairly indicative of the region in early afternoon trading with the exception of Russia (-2.75%) which continues to get hammered on the recent fall in oil prices. As of 7:45 am, US Futures are pointing toward a green open. The DIA is implying a +0.25% open, the SPY implies a +0.29% open and the QQQ implies a +0.40% open.

The major economic news scheduled for release Monday is limited to Oct. Existing Home Sales (10 am). Major earnings reports scheduled for the day are limited to AVYA before the open. Then after the close, A, KEYS, URBN, and ZM report.

Sorry for the delay this morning. A lack of sleep the last 3 days has caught up with me. Remember this is a short week for the market. Expect light volume, especially as the week wears on as traders look to extend the holiday or get an early jump on Travel.

So, watch your current positions before looking to add any new trades. Consider how you want to enter the weekend news cycle (and potential low-volume week ahead) and if there is any profit-taking or hedging to get done. Focus on your trade rules and on managing the things you can control. That should include consistently taking profits when you have them and moving your stops in your favor. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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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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A Mighty Shove

November 19, 2021 by Doug Campbell

A mightly shove in the tech giants got the job done for new records in the QQQ and SPY while at the same time, the number of stocks falling below their 50 and 200-day moving averages grew. That’s awesome, but it also begs the question, what happens if big tech buying reaches an exhaustion point? With parts of Europe re-entering pandemic lockdowns, very little earings inspiration, and only Fed speak on the economic calendar, price action could become very choppy if the bears remain lethargic. In addition, next week, heading into the Thanksgiving holiday, may see declining volumes as travel picks up, so plan your risk carefully.

Asian markets close trading mostly higher, with Hong Kong shedding 1.07% after disappointing results from Alibaba. European markets see nothing but red this morning as sentiment declines due to more pandemic lockdowns and restrictions grow. Finally, with a very light day on the earnings and economic calendar, U.S. futures suggest a mixed open industrial’s declining sharply while the tech sector continues to surge.

Economic Calendar

Earnings Calendar

Our Friday earnings calendar is very light, with just nine confirmed reports. Notable reports include BKE & FL.

New & Technicals

Democrats moved toward a vote on President Joe Biden’s social safety net and climate plan. A Congressional Budget Office estimate said the Build Back Better Act would add $367 billion to budget deficits over a decade but did not account in the topline for revenue raised by increased IRS enforcement of tax laws. Five Democratic holdouts wanted to see a CBO score before they voted for the bill. If the House passes the legislation, the Senate will likely approve a different version of it. Thursday evening President Biden suspends enforcement of business vaccine mandate due to court mandate and escalating legal challenges companies and states. Austria announced this morning they would re-enter a total national lockdown while Germany added more restrictions on Thursday. Treasury yields declined in early Friday trading, with the 10-year dipping to 1.5565% and 30-year falling to 1.9405%.

With a mightly shove by the tech giants, the Nasdaq closed at a new record high, and the SP-500 squeaked out a new closing high in the process. Unfortuntually, at the same time, the number of stocks slipping below their 50 and 200-day averages grew. With parts of Europe re-entering Covid lockdowns, futures that were bullish during the night have taken a bearish turn. With little on the earnings calendar to provide inspiration and nothing but Fed speak on the economic calendar, it could be an interesting day if the bears start to show some interest. If the bulls find the energy to defend, I would expect a choppy price action day as we slide into the weekend. Keep in mind as you plan forward that next week, we could see light volumes as traders get some post-Covid restriction family time travel for Thanksgiving.

Trade Wisley,

Doug