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

Upbeat Guidance from MSFT

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Upbeat Guidance from MSFT

Upbeat guidance from MSFT reversed early selling and sparked a substantial rally in overnight futures, but it would be wise to remember it will take a lot of work to repair the technical damage.  Moreover, the significant gap raises the danger level of another punishing whipsaw or pop and drop with so much market-moving data around the corner.  A relief rally is overdue but don’t get caught up in the morning hype and drama it creates.  Instead, stay focused on price action and carefully consider the risk of every position before jumping back into the fire ahead of an FOMC rate decision.

Asian markets traded mixed overnight as investors wait for the Fed decision and how aggressively they intend to fight inflation.   However, European markets trade decidedly bullish this morning with hopes of a relief rally high while bracing for the possible volitility the FOMC can create.  Ahead of market-moving earnings and economic reports, U.S. futures suggest a considerable gap up at the open and a continuation of the wild overnight price volatility.  Watch for the possibility of big point whipsaws or even the dreaded pop and drop as traders react to all the data. 

Economic Calendar

Earnings Calendar

We have a busy day with more than 120 companies listed on the earnings calendar.  Notable reports include INTC, TSLA, ABT, ANTM, AZPN, T, ADP, BA, CACI, GLW, CCI, DRE, EW, FANUY, FCX, GD, HES, HESM, KMB, KNX, LRCX, LVS, LC, LEVI, MTH, NDAQ, NSC, NG, PKG, PLXS, PTC, RJF, STX, NOW, SIMO, SLG, SLM, TER< URI, VRTX, WHR, & XLNX.

News & Technicals’

Microsoft surpassed estimates on the top and bottom lines, but Azure cloud revenue merely matched analysts’ expectations.  In addition, the company’s gaming business is in the spotlight after Microsoft said it would acquire Call of Duty publisher Activision Blizzard for $68.7 billion.  Bentley Motors plans to spend £2.5 billion (about $3.4 billion) over the next decade to become a fully electric luxury brand by 2030.  The investment will include significant upgrades to Bentley’s historic plant manufacturing campus in England.  Bentley’s first all-electric vehicle is scheduled to roll off the production line in 2025.  Agreements from technology companies and betting firms helped the NFL lure a record $1.8 billion in sponsorship revenue, a 12% increase year-over-year from the 2020 season.  Team sponsorship revenue only increased 4%, but the NFL is now allowing teams to sell intellectual property rights overseas.  However, the NFL is still sitting on the sidelines regarding crypto sponsorships.  The US has sent the clearest message yet that Russia, its key personnel and economic sectors, and its leader Vladimir Putin could face the severest sanctions it has ever faced.  US President Joe Biden intimated that President Putin’s Russian counterpart could face personal sanctions on Tuesday.  In addition, the US has outlined new sanctions and targets that it could impose if there is an invasion.  The Kremlin has said any personal sanctions on Putin would be politically destructive.  Treasury yields traded with little movement in early Wednesday trading with the 10- pricing at 1.7851% and the 30-year standing at 2.1309%.

Technically the index charts have a lot of work to repair the damage created by the selling uncertainty this month.  The wild price volitility continued on Tuesday with substantial point swings as we face market-moving earnings reports and economic data that include a rate decision from the FOMC at 2:00 PM Eastern this afternoon.  Upbeat guidance from MSFT reversed early selling and dramatically shifted overnight futures markets in hopes that a relief rally would begin.  However, internal indicators continue to suggest a short-term oversold condition.  Still, the big gap-up suggested this morning could easily create another painful pop and drop with so much data coming your way today.  That said, keep your wits about your today and stay focused on the price action remembering the wild volatility is likely to continue with the FOMC decision and reports from INTC and TSLA this afternoon.  Watch overhead resistance levels as areas where the bears could set up defensive positions. 

Trade Wisely,

Doug

All Eyes on Fed Statement and Presser

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The good news is that Tuesday was a bit less volatile than Monday.  However, we opened with a 1%-2% gap lower.  This led to a roller-coaster in all 3 indices, with the SPY and DIA completely fading the gap before rolling over again.  Meanwhile, the QQQ roller-coaster stayed around the gap-down level before also closing on a downswing.  This left us with long-legged, Spinning Top (indecisive) candles in all 3 major indices.  On the day, SPY lost 1.19%, DIA lost only 0.21%, and QQQ lost 2.32%.  The VXX rose slightly to 23.82 and T2122 climbed just out of the oversold territory to 23.16.  10-year bond yields closed up to 1.781% and Oil (WTI) rose almost 2.5% to $85.38 on continued fear of a Russian invasion of Ukraine.

Click for video

After hours, the Commerce Department released a report that said due to supply chain problems, some US manufacturers are down to less than 5 days’ worth of inventory of computer chips (semiconductors).  The report summarized survey finding from 150 manufacturers, which said on average they had maintained 40 days of supply in 2019, but were down to 5 days of inventory last fall and have not recovered.  While the report did not name any specific companies, it did cite the auto, consumer electronics, and medical device industries.  The report also said the worst-hit businesses are those that use older “legacy” (low margin) chips in their products.

After the close Tuesday, MSFT, COF, FFIV, and TXN all reported beats on both lines.  So far this morning, ADP, T, TEL, NDAQ, and GLW have all reported beats on both lines.  However, ANTM and GD both beat on earnings but came in light on revenue.

Overnight, Asian markets were mixed.  Australia (-2.49%) was an outlier with Japan (-0.44%) and South Korea (-0.41%) pacing losses and India (+0.75%), Shenzhen (+0.70%), and Shanghai (+0.66%) leading the gains.  In Europe, stocks are strongly green across the board at mid-day.  The FTSE (+1.80%) lags, while the DAX (+2.28%) and CAC (+2.26%) are typical of the continent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a strong start to the day.  The DIA implies a +0.94% open, the SPY is implying a +1.28% open, and the QQQ implies a +1.81% open at this hour.  10-year bond yields are up to 1.79% and Oil (WTI) is also up three-quarters of a percent in early trading.

The major economic news scheduled for release Wednesday includes Dec. Trade Goods Balance and Dec. Retail Inventories (both at 8:20 am), Dec. New Home Sales (10 am), Crude Oil Inventories (10:30 am), and then the FOMC Interest Rate Decision and FOMC Statement (both at 2 pm), followed by the FED Chair Press Conf. (2:30 pm).  Major earnings reports scheduled for before the market include ABT, APH, ANTM, ADP, T, BA, NSC, FCX, GD, GLW, HES, KMB, KNX, NDAQ, NSC, PGR, ROL, and TEL.  Then after the close, AMP, AVT, AXS, CACI, CLS, CCI, EW, FLEX, INTC, LRCX, LSTR, LVS, LEVI, MTH, MEOH, MKSI, PKG, PLXS, PTC, RJF, STX, SEIC, NOW, TER, TSLA, URI, VRTX, WHR, and XLNX report.

LTA Scanning Software

While we have other economic data and earnings, the Fed decision (and especially the statement and presser) will call the market tune today. Bull traders seem to be anticipating no shocks, as they’re trying to front-run the announcements. That leaves the real risk exposure to the downside. However, don’t be surprised if markets lose their nerve and decide to drift into the announcement today. Either way, we can expect tremendous volatility right after the announcement as traders reset positions once the outcome is known. So, as I continue to say, markets will not fall forever. Now is the time to be preparing for the rally that will follow (whenever it comes). Get those trading plans and rules tuned up, decide on your watchlists for a potential rotation, and be prepared. However, it is not time to predict a turn or chase moves you have missed. Trade carefully.

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. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Don’t be stubborn. When you’re wrong, just admit it and take your loss. (That’s why we set stops.)

Ed

Swing Trade Ideas for your consideration and watchlist: CF, FANG, APA, USO, WSM. 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

Wild Ride on Wall Street

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wild ride

The wild ride on wall street continues as traders capitulate, dropping the Dow more than 1000 points only to race back in to close all four indexes in the green.  However, with a big day of earnings that includes the tech giant, MSFT traders fear the potential outcome with the VIX closing near a 30 handle.  Add to that a worrisome Consumer Confidence due to inflation impacts and, of course, a pending FOMC decision Wednesday afternoon, and we have all the ingredients for additional volatility today.

Asian markets retreated sharply overnight, closing in the red across the board.  However, European markets see only green this morning, trying to relieve the pressure of the recent selloff.  That said, the price volatility continues this morning, with the Dow futures suggesting a substantial gap down and keeping traders guessing as to what comes next!  So, prepare for another day of wild price action.

Economic Calendar

Earnings Calendar

We have a busier day on the Tuesday earnings calendar with another big tech report to punctuate the day.  Notable reports include MSFT, MMM, AGYS, AXP, ADM, BXP, CNI, COF, GGIV, GE, HA, HYMPY, INVZ, JNJ, LMT, LOGI, NAVI, NEE, NEP, PCAR, PII, RTX, TXN, TRMK, UMC, VZ, WSBC, & XRX.

News & Technicals’

Crisis talks aimed at averting a military confrontation between Russia and Ukraine appear to be faltering, as Western allies prepare for a possible conflict between the neighbors that could be “painful, violent and bloody.”  The U.S. Department of Defense has said that about 8,500 American troops are awaiting orders to deploy to the region if Russia does invade Ukraine.  Europe has been conspicuously absent from last-ditch negotiations to prevent tensions between Russia and Ukraine from spilling into conflict.  Bitcoin, the world’s largest virtual currency, briefly plunged below $33,000 Monday to its lowest level since July.  It’s since recovered above $36,000 but is still down almost 50% from a record high of nearly $69,000 in November.  That’s got some crypto investors talking about the possibility of a “crypto winter.”  IBM shares jump after the company reported a 6% growth in revenue over the fourth quarter.  IBM executives have been telling investors to look for mid-single-digit revenue growth.  The company spun out its managed infrastructure services unit during the quarter into a publicly held company named Kyndryl.  President Joe Biden called Fox News reporter Peter Doocy “a stupid son of a bitch” on a live microphone Monday after Doocy asked Biden if inflation was a political liability to him.  Doocy regularly baits Biden during press events, shouting over other reporters and trying to get the president off guard.  Biden has a long record of swearing on hot microphones.  Treasury yields climbed in the early Tuesday trading, with the 10-year rising to 1.7760% and the 30-year edging up to 2.1133%.

No doubt about it yesterday was a wild ride as traders capitulated with the Dow falling more than 1000 points then surged back up to close the day green across all four indexes.  But, unfortunately, the wild volatility continued in the overnight futures markets, dropping more than 250 Dow points.  Today we have a busy day of earnings, with the MSFT report coming after the bell.  After the NFLX disappointment and the considerable Nasdaq selloff, there is a palpable uncertainty as we wait for the tech giant to report.  During the morning session, we will face Case-Shiller home price numbers and worrisome Consumer Confidence numbers amid rising inflation.  Of course, anything is possible with an FOMC decision just around the corner, so buckle up for the wild ride to continue. 

Trade Wisely,

Doug

Now That Was a Whipsaw And the Ride Isn’t Over Yet

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Monday was quite the roller-coaster ride.  A gap lower of 1%-1.7% across the 3 major indices and started a wild whipsaw ride (each whip being more than 1% in size) to the downside all morning.  The lows of the day were reached about 12:30 pm, when (for no particular reason) sentiment reversed and a wild whipsaw ride to the upside began.  Again, each major wave of movement was over 1% in size.  All 3 major indices closed in the green and near their highs of the day even as we saw a range of more than 5% in those indices on the day.  This left us with white candles with long lower wicks across the board.  On the day SPY gained 0.40%, DIA gained 0.39%, and QQQ gained 0.49%.  The VXX closed up 2.5% to 23.79 and T2122 remains deeply oversold at 2.47.  10-year bond yields ended up slightly after their own wild ride of a day, closing at 1.774% and Oil (WTI) was down 1.44% to $83.91. 

Click for video

As mentioned, we experienced massive intraday swings Monday.  While this has not happened in a long time, huge intraday volatility is not unknown.  Bloomberg looked at the Nasdaq 100 (QQQ) over the last 25 years as a gauge for such volatility.  They found many days that were similar to Monday’s whipsaw action in both 2008 (Financial Crisis) and during 2000-2002 (dot-com bubble burst).  That said, the swing we just saw was the largest since January 8, 2001. This may give us a clue to the potential volatility to come during the shift from massive spending and debt related to pandemic recovery and the shift to the new Fed’s goal of reversing that situation to fight inflation.  The moral of the story is that if you’re trading, be damn sure you can handle real pain and are comfortable with volatility.

After the close on Monday, BRO, CR, IBM, STLD, and ZION all beat on both lines.  IBM spiked in after-hours trading after posting its best revenue growth in 10 years (+6.5%) on strong cloud services sales in Q4.  So far this morning, VZ, AXP, LMT, ADM, IVZ, and MMM have all reported beats on both lines.  Meanwhile, JNJ, NEE, RTX, and GE reported beats on earnings but came in light on revenue.

Overnight, Asian markets were nearly red across the board (with only India +0.75% in the green).  Shenzhen (-2.83%), Shanghai (-2.58%), and South Korea (-2.56%) led the region lower.  In Europe, we see the opposite at mid-day.  Bourses are green across the board on the continent with the FTSE (+0.84%), DAX (+0.54%), and CAC (+0.82%) leading the region higher.  As of 7:30 am, US Futures are pointing toward another major gap lower.  The DIA implies a -0.73% open, the SPY is implying a -1.39% open, and the QQQ implies a -2.00% open at this hour.  10-year bond yields are also up sharply to 1.774% and Oil (WTI) is flat in early trading.

The only major economic news scheduled for release Tuesday is Conf. Board Consumer Confidence (10 am).  However, major earnings reports scheduled for before the market include MMM, AXP, ADM, ERIC, GE, IVZ, JNJ, LMT, NEE, PCAR, PII, RTX, UMC, VZ, and XRX.  Then after the close, BXP, CNI, COF, FFIV, HA, MSFT, RNR, and SLGN report.

LTA Scanning Software

The Fed meeting starts today as markets are clearly spooked. What may have traders worried is any mention of 4 or more rate hikes this year, when the FOMC position to this point has been to expect 3 hikes. The wildcard everyone is waiting to drop will be what is said about the lightening of the Fed’s massive balance sheet of bonds and other mortgage-backed assets. So, as I said yesterday, now is the time to be preparing for the bottom. Not time to be predicting a turn or chasing moves you have missed. Trade carefully.

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. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Don’t be stubborn. When you’re wrong, just admit it and take your loss. (That’s why we set stops.)

Ed

Swing Trade Ideas for your consideration and watchlist: UVXY, SPLK, QID, SDS, TDOC, HAL, FSLY. 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