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GDP Report

October 28, 2021 by Doug Campbell

With a massive day of earnings, Treasury yields are rebounding slightly ahead of the GDP report that economists expect to decline sharply over the prior month. In addition, China’s real estate crisis seems to be getting worse with a 4^th developer default and reports that their economy could slide into stagflation. However, with the palpable anticipation of AAPL and AMZN earnings after the bell, we could easily shrug all that off as the bulls keep running. The party was incredible, but let’s hope theirs not a hangover just around the corner!

Asian markets had a bearish night closing in the red across the board, with the Nikkei leading the way after the Bank of Japan holds steady on monetary policy. European markets trade mixed this morning as they wait on a rate decision from the ECB. However, U.S. futures press for a bullish open ahead of significant tech earnings, GDP, and Jobless data. So prepare for another hectic day of silly season speculation.

Economic Calendar

Earnings Calendar

Thursday is our busiest day of the week, with nearly 225 companies reporting. Notable reports include AMZN, AAPL, FLWS, MO, ABEV, AMT, BUD, BAX, CARR, CAT, CMCSA, DVA, DXCM, EGO, FE, GLPI, GILD, HSY, HTZZ, ITW, ICE, KDP, LH, TREE, LEN, MA, MPW, MRK, MDP, MSTR, TAP, NEM, NOK, NOC, ORI, OSTK, PBR, RLGY, RSG, SNY, SGEN, SHOP, SIRI, STAG, SBUX, TROW, TAK, TXRH, X, VALE, VRSN, WST, WDC, YUM, & ZEN.

New & Technicals’

Ford nearly doubled Wall Street’s earnings expectations and slightly beat revenue projections for the third quarter. The results led the automaker to increase its annual guidance for the second time this year. Ford said increased availability of semiconductor chips and higher vehicle shipments in the third quarter enabled it to post higher-than-expected results. The Anglo-Dutch company posted adjusted earnings of $4.1 billion for the three months through to the end of September. Compared with $955 million over the same period a year earlier and $5.5 billion for the second quarter of 2021. Analysts had expected third-quarter adjusted earnings to come in at almost $6 billion, according to Refinitiv. President Joe Biden has made last-minute plans to attend a House Democratic caucus meeting on Thursday morning, CNBC confirmed late Wednesday. Biden plans to personally appeal to the party’s progressives to vote for the stalled infrastructure bill already passed the Senate. The risk of stagflation is “very real” in China over the next few quarters, said Charlene Chu, senior analyst for China macro-financial at Autonomous Research. A high producer price index and power crunch have made it difficult for Beijing to stimulate the economy aggressively, said Chu. In addition, the slowdown in the real estate sector has “very severely” hit China’s economic growth, but confidence in the primary property market is not yet collapsing, she said.

Treasury yields are edging slightly higher this morning ahead of the GDP report that analysts suggest could decline sharply to 2.7% vs. the 6.7% reading just one month ago. As a result, the 10-year rose to 1.55%, and the 30-year rallied to 1.9527%. The Nasdaq rallied strongly yesterday to briefly touch a new record pulling back to leave the second shooting star pattern behind in as many days. However, we have a massive day of earnings that is likely to keep the bull’s fire burning with the highly anticipated reports from AAPL and AMZN after the bell. That said, we first have to make it through GDP, and Jobless Claims data, but with the wild earnings fervor going on this season, we could just ignore them like the declining Durable Goods from yesterday. Once again, be careful chasing extended stocks and don’t rule out a continued pullback in the DIA and IWM.

Trade Wisely,

Doug

EPS Mostly Good As GDP and Claims Next

October 28, 2021 by Ed Carter

Markets started the day relatively flat on Wednesday. The QQQ rallied into the late afternoon before selling off hard the last hour of the day. However, the large-caps started their selloff early, but again gained steam the last hour of the day. This all left a big ugly black candles in the large-cap indices, which if you squint might be called Evening Star type. Meanwhile, the QQQ printed a white-body Northern Star type candle (just a gap-up short of a Shooting Star). This left the DIA and QQQ failing at all-time high level resistance and SPY pulling back to test that level as support. On the day, SPY lost 0.44%, DIA lost 0.69%, and QQQ gained 0.23%. The VXX gained 2.2% to 21.95 and T2122 fell to the low-end of the mid-range to 27.86. 10-year bond yields fell strongly to 1.545% and Oil (WTI) fell 3% to $82.11/barrel.

After the close, KLAC, EBAY, ALGN, ORLY, XLNX, EXR, MAA, RJF, DRE, and CINF all reported beats on both lines. Meanwhile, EW, F, and AFL beat on earnings but missed on revenue. CTSH, URI, and RE beat on revenue but missed on earnings. And AVB and FLS both missed on both lines. It should be noted that F crushed earnings by almost doubling the street estimate ($0.51 vs. $0.26 estimate).

In earnings so far this morning, MRK, LIN, AMT, MCO, HSY, LH, SIRI, CMCSA, YUM, BAX, TFX, LKQ, ABMD, NLSN, and ADS have all reported beats on both lines. CAT, NOC, WTLW, SWK, TAP, and TXT all beat on earnings but came up short of estimates on the revenue line. At the same time, AEP and XEL beat on revenue but missed on earnings. Finally, TROW, NEM, and MO missed on both revenue and earnings.

In miscellaneous news out of Washington, leaks are reporting that the Budget Bill that is being negotiated between Democrats has been whittled down again. From an original $3.5 trillion, the current size seems to be $2 trillion, but continues to move lower as more of the progressive agenda is abandoned to secure the vote of WV Senator Manchin and to a lesser degree AZ Senator Sinema. With that said, it appears a deal is very near as President Biden is expected to attend the Democratic meeting this morning, which most believe is a signal a deal will be done by then. Simultaneous to the negotiations of the taxes and spending in the bill, CNBC reports that major business groups are already organizing to fight any new business taxes through lobbying and media spending in the states of key Democratic votes. In particular, they want to fight the “Corporate 15% Minimum Tax” that was agreed globally.

Overnight, Asian markets red across the board. India (-1.94%), Shanghai (-1.23%), and Indonesia (-1.18%) led the losses, but the damage was universal in the region. This came as a higher producer price index and continued electricity crunch are raising the possibility of stagflation down the road a couple of quarters. In Europe, the picture is more mixed at mid-day. The FTSE (-0.28%) and DAX (-0.10%) are slightly lower, but the CAC (+0.60%) is among the half of the continent that is in the green in early afternoon trading. As of 7:30 am, US Futures are pointing toward a green opening as earnings continue to come in strong. The DIA is implying a +0.25% open, the SPY implies a +0.33% open, and the QQQ is implying a +0.58% open at this hour (and ahead of major economic news). 10-year bond yields are up just slightly and Oil (WTI) is off 1.5% in early trading.

The major economic news scheduled for release on Thursday is limited to Q3 GDP and Weekly Initial Jobless Claims (both at 8:30 am) and Sept. Pending Home Sales (10 am). Major earnings reports scheduled for the day include AOS, AGCO, ATI, ADS, AB, MO, AEP, AMT, BUD, AMBP, AVNT, BAX, BC, CARR, CAT, CBRE, CHKP, CMS, CMCSA, DQ, DBD, EXP, EME, FCN, GVA, GPI, HSY, HTZZ, HBAN, ITW, ICE, JHG, KBR, KEX, LH, LECO, LKQ, MDC, MA, MD, MDP, TAP, MCO, COOP, NEM, NLSN, NOK, NOC, NVT, ORI, OSK, OSTK, PATK, PBF, BTU, RLGY, RS, RDS.A, SAIA, SNY, SNDR, SHOP, SIRI, SAH, SWK, STM, TROW, TFX, TPX, TXT, VC, WST, WEX, WLTW, XEL and YUM before the open. Then after the close, ACHC, AMZN, AAPL, ATR, AJG, TEAM, AVTR, AVT, CHE, COLM, DVA, DECK, DXCM, EMN, ERIE, FE, FMX, FTV, GILD, HIG, HUBG, LPLA, MHK, RSG, RMD, SKX, SKYW, SSNC, SBUX, SYK, TEX, TXRH, TFII, X, VALE, WERN, WDC, INT, and AUY report.

Again, the flood of earnings is going to be a main driver. However, don’t overlook the Q3 GDP number possibly changing the mood among traders. Again, I would characterize the reports last night and so far this morning as largely positive. However, there were a handful of high visibility misses, such as TROW and MO as well as CAT missing on revenue. So, be prepared, stay nimble and remember that it is the actual market reaction to the news…not the news itself…that is really important to traders.

The trend remains bullish despite yesterday’s candles and all 3 major indices are still sitting very near all-time highs. Remember, the trend is our friend, but also keep in mind that big dogs AAPL and AMZN report tonight. So, focus on your trading process and on managing the things you can control. Remember that it’s discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them and moving your stops. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Swing Trade Ideas for your consideration and watchlist: LC, PLBY, LCID, MRVL, F, MCD, OPEN, LVS. 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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New Records

October 27, 2021 by Doug Campbell

In anticipation of strong big tech earnings, the DIA and SPY set new records yesterday before pulling back as we approached the close. That left behind possible topping candle patterns, but with all the earnings energy coming our way in the next couple of days, anything is possible. That said, a rest or minor profit-taking pullback to test price support seems to grow in probability from this extended condition in the indexes. Traders will also have to grapple with the Durable Good data before the open that analysts suggest may come in negative.

Overnight Asian markets closed the day mostly lower, with Hong Kong leading the way down 1.57%. This morning, European markets trade in the red across the board with modest losses keeping an eye on the UK budget debate. Facing another massive day of earnings and economic data, U.S. futures currently point to modest declines. So buckle up; it could be another wild earnings season adventure.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have a busy day with 194 companies listed. Notable reports include AFL, AEM, ALGT, NLY, ADP, AVB, BA, BOOT, BSX, BMY< BG, CINF, KO, CDE, DB, DRE, EBAY, EXR, FISV, F, GRMN, GD, GM, GSX, HOG, HLT, IP, KHC, LC, MAS, ORLY, PPC, RJF, R, NOW, STX, SF, TDOC, TWLO, VICI, WH, XLNX, YNDX, & YUMC.

News & Technicals’

Alphabet topped analysts’ expectations on the top and bottom lines. However, CFO Ruth Porat said Apple’s privacy changes had a “modest impact on YouTube revenues.” As a result, the company’s shares were little changed after reporting. Microsoft’s Azure revenue growth slowed slightly in the quarter, although it accelerated from the prior quarter on a constant-currency basis. In addition, PC supply constraints cut into sales of Windows to device makers. Third-quarter transaction-based revenue totaled $267 million, with only $51 million coming from cryptocurrency trading. Revenue from crypto trading totaled $233 million in the second quarter. Robinhood said that, barring any change in the market environment, the headwinds that dragged down last quarter would persist into the end of the year. Senate Democrats on Wednesday unveiled a new billionaires’ tax proposal, an entirely new entry in the tax code designed to help pay for President Joe Biden’s sweeping domestic policy package and edge his party closer to a comprehensive agreement. The proposed tax would hit the gains of those with more than $1 billion in assets or incomes of more than $100 million a year, and it could begin to shore up the big social services and climate change plan Biden is racing to finish before departing this week for global summits.

The SPY and DIA found themselves trading at new records yesterday but struggled to hold intraday highs as we moved toward the close and heavily anticipated giant tech reports. The pullback slightly relieved the short-term overbought condition in the T2122 indicator as the VIX rose slightly off intraday lows. Today, we ramp up the number of earnings reports and have the potential market-moving Durable Goods report to digest. Analysts expect a -0.9 reading falling from the prior report of 1.8%. International Trade data will follow that as well as the Petroleum Status. Indexes remain in a very extended condition adding danger to those entering positions, so plan your risk carefully. Remember, healthy price action commonly tests price supports, and the current rally has left little support behind and lots of open gaps in the process.

Trade Wisely,

Doug

Earnings Remain Strong But a Few Miss

October 27, 2021 by Ed Carter

Markets were fairly volatile intraday on Tuesday. All 3 major indices gapped higher and ground sideways for an hour, but then sold off hard, back to the previous close before rallying again and then selling off again the last 15 minutes of the day. After all of that, the 3 major indices ended up little changed. All 3 printed black body candles with at least some higher wick and the two large caps closing near their lows. On the day, SPY gained 0.10% (to another new all-time high close), DIA lost 0.01%, and QQQ gained 0.28% (after having been at a new all-time high intraday). The VXX gained 2% to 21.47 and T2122 fell out of the overbought territory to 70.12. 10-year bond yields fell to 1.612% and Oil (WTI) rose about 1% to $84.58/barrel.

After hours, AMD, MSFT, GOOG, V, CB, CHRW, and FFIV among others all easily beat on both lines. Meanwhile, TXN beat on earnings but missed on the revenue line. TWTR posted misses on both lines, including a terrible miss on earnings.

In premarket earnings reports, TMO, MCD, BMY, ADP, FISV, TEL, KHC, HLT, GRMN, AVY, MAS, HOG, and KO all delivered beats on both lines. Meanwhile, CME, BSX, IP, GD, and WAB beat on earnings while coming up short on revenue. In the opposite camp, DTE and ROL missed on earnings, but beat on revenue. IP was the only report to miss on both lines so far today.

In political news, Senate Democrats unveiled their 15% Corporate Minimum Tax proposal on Tuesday. It is important to note that despite the name, the tax would only apply to companies that book $1 billion in profit for 3 consecutive years AND it includes credits as well as carry-forward of losses to offset the tax. On the health side, the FDA Advisory Panel also recommended that the FDA approve the PFE vaccine for kids aged 5-11 (in low doses). If the FDA does approve this use of the PFE vaccine, then CDC Dir. Walensky is expected to sign off and shots could begin immediately.

Overnight, Asian markets leaned heavily to the downside. Singapore (+0.42%), Taiwan (+0.24%), and Australia (+0.07%) were the only green in the region. At the same time, Hong Kong (-1.57%), Shenzhen (-1.10%), and Shanghai (-0.98%) led the region lower. The same story is taking shape in Europe at mid-day. The FTSE (-0.08%), DAX (-0.26%), and CAC (-0.25%) are typical of the continent with only a flat Greece and Belgium avoiding a red sweep in early afternoon trading. As of 7:30 am, US Futures are still pointing to a flat open. The DIA is implying a +0.05% open, the SPY implies a -0.05% open, and the QQQ is implying a -0.11% open at this hour. At the same time, 10-year Bond yields are down significantly to 1.59% and Oil (WTI) is off 1.25%.

The major economic news scheduled for release on Wednesday is Sept. Durable Goods Orders, Sept. Trade Balance, and Sept. Retail Inventories (all at 8:30 am) and Crude Oil Inventories (10:30 am). Major earnings reports scheduled for the day include APH, AIT, ARES, ADP, AVY, BA, BCO, BMY, BG, CME, KO, CSTM, DTE, EVR, FISV, GRMN, GD, GM, HOG, HES, HLT, IP, KHC, MHO, MAS, MCD, NSC, ODFL, OC, PAG, ROL, R, SLGN, SIX, SPOT, TMHC, TEL, TDY, TEVA, TMO, TNL, UMC, VRT, and WAB before the open. Then after the close, AFL, AEM, ALGN, ALSN, NYL, AR, ACGL, ASGN, AVB, AXS, BHE, BMRN, CACI, CG, CCS, CHX, CNO, CTSH, FIX, CYH, EBAY, EW, ESI, EHC, ENSG, EQT, RE, FLEX, FLS, F, THG, INVH, JBT, KLAC, MTH, MEOH, MKSI, MOH, MUSA, MYRG, ORLY, OII, PPC, PLXS, PPD, RJF, SIGI, SCI, NOW, SNBR, STC, SU, TDOC, TROX, TTMI, TWLO, UCTT, URI, WCN, WFG, XLNX, and YUMC report..

Once again, the flood of earnings is going to be the driver today, at least early on. I would characterize last night’s reports as well as those that are already out this morning as largely positive. However, there were some misses on either earnings or revenue. There were even a couple of companies that missed on both. So, as always, it isn’t necessarily the news (earnings) that matters, but instead what’s most important is how Mr. Market reacts to that news. Be prepared, either way.

The trend remains bullish and the large-caps are still sitting at all-time highs (with the tech-heavy QQQ just below that breakout). Remember, the trend is our friend, but also keep in mind that more of the AAPL and AMZN report tonight. So, focus on your trading process and on managing the things you can control. Remember that it’s discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them and moving your stops. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Swing Trade Ideas for your consideration and watchlist: NNDM, XELA, NIO, CHPT, SLV, FSM, F, GM, MS. 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

Gravity-Defying Winning Streak

October 26, 2021 by Doug Campbell

The gravity-defying winning streak continues as the fear of missing out intensives, so does the real risk to traders trying to enter with indexes so extended in the short term. Fed taper, inflation, energy prices, supply chain impacts, P/E ratios, market internals, and even the chart technicals seem to be of no concern at the moment. However, the more we extend, the greater the risk of a substantial pullback, so be prepared. I challenge you to take off those rose-colored glasses and assess the risks before entering new positions.

Asian markets traded mixed overnight even as the Nikkei surged 1.77% as worries of property taxes pushed Hong Kong lower. However, European markets see nothing but green this morning, fueled by earnings optimism. Ahead of a huge day of earnings, housing, and consumer confidence data U. S. futures point to new record highs in the SPY and DIA at the open.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we step up tech earnings with nearly 100 companies expected to report. Notable reports include AMD, GOOGL, TWTR, MSFT, MMM, AAN, AMP, ADM, ARCC, BYD, CAJ, COF, CNC, CB, CIT, GLW, CLR, ECL, LLY, EQR, ESS, FFIV, GE, HAS, IVZ, JBLU, JNPR, LOGI, NAVI, PNR, PHM, RTX, HOOD, SPGI, SHW, SSTK, TER, TXN, TRU, UBS, UPS, V, WM, & XRX.

News & Technicals’

Facebook shares rose in extended trading Monday after the company reported better-than-expected third-quarter earnings while revenue missed estimates. In addition, the company announced its plans to break out its Facebook Reality Labs into its reporting segment starting in the fourth quarter. As a result, Facebook said it expects fourth-quarter revenue of $31.5 billion to $34 billion. Democrats are making some hard choices about their signature spending plan to satisfy key moderates in the Senate, slashing the topline cost from $3.5 trillion to between $1.5 and $2 trillion. Several of Biden’s campaign promises have been abandoned altogether, such as providing free community college and instituting a clean electricity standard with penalties for utilities that don’t comply. Other programs that were initially permanent will instead be set to expire in a year or two, like the expanded Child Tax Credit and expanded Medicaid. According to economists, shipping backups at big U.S. ports are not likely to resolve themselves until well into 2022. Goldman Sachs said that the problems should lessen after the holidays and Lunar New Year as container traffic backs off. Companies have been left to find ways to keep their products moving amid the supply chain disruptions. Treasury yields dipped slightly in early Tuesday trading, with the 10-year trading at 1.63.17% and the 30-year falling to 2.0783%.

The bulls continue to run higher in a gravity-defying winning streak that at this point shows no signs of stopping. Inflation and supply chain issues seem to be of no concern. A Fed taper and now the prospect of 2 potential interest rate increases next year of no consequence as traders rush to add risk. A rapidly deteriorating China economy and a growing number of foreclosures in the U.S. we ignore. The fear of missing out is so intense that even the charts’ technicals and the internal indicators are rendered essentially useless. What does that mean? Could this be the preamble to the classic blowoff top forming? It is very reminiscent of the last rush into stocks in late 1999, where just like today, P/E ratios were wholly ignored. How long can this last? Your guess is as good as mine but enjoy the ride as long as it lasts because there could be a reckoning at the end of it. At the risk of sounding like a broken record, I will once again caution traders to be cautious chasing already stocks. That said, whatever you trade, make sure you have considered the risk carefully because this kind of rally can produce some painful reversals overnight and big intraday whipsaws.

Trade Wisley,

Doug

Reports A Bit Mixed But Still Positive

October 26, 2021 by Ed Carter

Markets opened higher, immediately traded lower, and then began a steady rally into the mid-afternoon. There was some late-afternoon sag, but all 3 major indices closed as gap-up white candles. The DIA printed another Doji-type candle and the SPY printed a Spinning Top-type candle. On the day, SPY gained 0.54% (a new all-time high close), DIA gained 0.23% (a new all-time high close), and QQQ gained 1.02%. The VXX fell 3% on the day to 21.03 and T2122 remains in the overbought territory at 86.97. 10-year bond yields fell (after being higher in premarket) to 1.634% and T2122 fell slightly (again, after being up a percent during the premarket) to $83.47/barrel.

TSLA was the big winner on the day crossing above $1 trillion market cap on a 12.7% gain. This move came on premarket news that Hertz has ordered 100,000 of TSLA’s electric vehicles by the end of 2022. After the close, FB missed on revenue by close to $600 million but still beat slightly on earnings. (Monthly active users were down a bit, but daily average users were in line with expectations.) UHS reversed the results, beating slightly on revenue but missing on the earnings line. Meanwhile, CDNS and ARE beat on both lines.

After the close, FB missed on revenue by close to $600 million but still beat slightly on earnings. (Monthly active users were down a bit, but daily average users were in line with expectations.) UHS reversed the results, beating slightly on revenue but missing on earnings. Meanwhile, CDNS and ARE beat on both lines.

So far this morning, UPS, MMM, ADM, PNR, SPGI, CNC, and JBLU beat on both lines. RTX, GE, and XRX missed on revenue, but beat on earnings. Meanwhile, SHW, WM, PHM, LLY, and GLW all missed on earnings, but beat on the revenue line. Only LMT has reported a miss on both lines at this point in the day.

Overnight, Asian markets were mixed again but leaned to the green side. Japan (+1.77%) was a strong outlier to the upside, with South Korea (+0.94%) and Taiwan (+0.83%) being the leaders of the pack for those exchanges that were green. Hong Kong (-0.36%) and Shanghai (-0.34%) paced the losers. In Europe, markets are mixed, but the bulls have much more energy at mid-day. The FTSE (+0.60%), DAX (+0.93%), and CAC (+0.71%) are leading the continent higher while smaller exchanges like Norway (-0.52%), Denmark (-0.42%), and Finland (-0.41%) are headed the other way. As of 7:30 am, US Futures are pointing toward another bullish open. The DIA is implying a +0.34% gap higher, the SPY implying a +0.43% gap up, and the QQQ implying a +0.62% open at this hour. 10-year bond yields are down and Oil is flat in early trading.

The major economic news scheduled for release on Tuesday is limited to Conf. Board Consumer Confidence and Sept. New Home Sales (both at 10 am). Major earnings reports scheduled for the day include MMM, AAN, ARCH, ADM, ABG, CNC, GLW, CEQP, DAN, ENTG, FSV, GE, GPK, GBX, HAS, HUBB, IVZ, JBLU, LMT, HZO, MSCI, NVS, PCAR, PNR, PII, PHM, RTX, SPGI, ST, TRU, UBS, UPS, WM, and XRX before the open. Then after the close, ACCO, AMD, GOOGL, AMP, AGR, BXP, BYD, CHRW, COF, CB, CSGP, DLR, WIRE, EQR, FFIV, FBHS, GOOG, HA, IEX, JNPR, LBRT, LFUS, MSFT, NBR, NCR, PFG, RRC, TER, TXN, TWTR, V, and ZWS report.

Earnings are going to be the driver again today. So far today, it has been more of a mixed bag of reports among majors than we have seen early this earnings season. The trend remains bullish and the large-caps are sitting at all-time highs (with the tech-heavy QQQ closing on that blue sky fast). Remember, the trend is our friend, but also keep in mind that many of the FANGMAN big dogs report tonight. So, it’s possible we see some caution in at least the QQQ as traders wait to hear from GOOG, AMD, and MSFT tonight and then AAPL and AMZN on Wednesday. Be prepared, either way.

Focus on your trading process and on managing the things you can control. Remember that it’s discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Swing Trade Ideas for your consideration and watchlist: OPEN, ORCL, MRVL, CHWY, FUBO, FSLY, CHPT, NIO. 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

Typical Protocol of Late

October 25, 2021 by Doug Campbell

Futures markets opened traded decidedly bearish yesterday afternoon but, following the typical protocol of late speculation on earnings, now boasts a bullish open. Nearly a 3^rd of the Dow and SP-500 stock will report this so so get ready for a wild week of emotion-driven price volatility as markets react. With the disappoints delivered by IBM, INTC & SNAP, and the other big tech being bid up into their reports, there is a significant risk should they stumble. So plan your risk carefully and avoid chasing stocks with the fear of missing out.

Asian market traded modestly higher with only the Nikkei seeing red on the day with HSBC earnings beat setting the mood. Across the pond, European markets trade mixed with modest gains and losses with a big day data ahead. Finally, U.S. futures have recovered sharply off of overnight lows to suggest a modestly bullish open ahead of a massive week of earnings data and nothing of consequence on the economic calendar for today.

Economic Calendar

Earnings Calendar

We have a big week of earnings beginning this week with more than 70 companies listed on the calendar. Notable reports include

News & Technicals’

House Speaker Nancy Pelosi said Sunday that Democrats are close to finalizing an agreement on the social safety net plan that would allow the bipartisan infrastructure bill to move forward. “We have 90% of the bill agreed to and written; we just have some of the last decisions to be made,” Pelosi said on CNN’s “State of the Union.” Twitter co-founder and crypto advocate Jack Dorsey weighed in Friday on escalating inflation in the U.S., saying things will get considerably worse. “It will happen in the U.S. soon, and so the world,” he tweeted. More than 47 million Pfizer vaccine recipients who received both shots at least six months ago became eligible for a booster Friday. More than 39.1 million Moderna vaccine recipients who received both shots at least six months ago became eligible for a booster Friday. The CDC adopted a slightly different criterion for J&J’s one-shot Covid vaccine, making almost 13 million recipients immediately eligible. U.S. Treasury yields ticked higher Monday morning, with the 10-year topping the 1.66% mark and the 30-year rising to 2.1084%.

Futures markets opened on the bearish side, but following the typical protocol of late, they have rallied back into the green in anticipation of earnings results. With nearly a 3^rd of the SP-500 and Dow expected to report this week, traders should prepare for a significant dose of volatility. We have experienced a powerful buy the dip rally fueled by tremendous earnings speculation in the last couple of weeks. As a result, the technicals of the charts have vastly improved but so has the risk to the retail traders feeling the fear of missing out. This season we have seen some big winners, and dramatic earnings losers bid up into the report. Consider this rick carefully should you choose to trade high-flying stocks nearing a report. That said, get ready for a wild week of price action that could set new records or start the next correction.

Trade Wisely,

Doug

Bad News For FB and PINS as FANGMAN on Deck

October 25, 2021 by Ed Carter

Markets opened flat in the large caps, but the QQQ gapped down a third of a percent on Friday. After indecision the first hour, all 3 major indices saw a selloff the last hour of the morning. From there was a sideways drift with a slight bullish slope. This left us with indecisive candles in all 3 major indices, a Doji in the SPY, a white Spinning Top in the DIA, and a Black Spinning Top in the QQQ. On the day, SPY lost 0.08%, DIA gained 0.23% (to close at a new all-time high close by a few cents), and the QQQ lost 0.84%. The VXX rose more than 2% to 21.70 and T2122 slipped slightly but remains in the overbought territory at 85.90. 10-year bond yields fell to 1.641% and Oil (WTI) rose almost 2% to $84.09/barrel.

Bloomberg reported Sunday that China is expecting a new Covid outbreak to get worse in the coming days. As a result, they have begun locking down some cities and regions (not to the provincial level yet). If there is any silver lining to this cloud, it is that the current outbreak is mostly in the northern provinces such as Inner Mongolia, which are not the important manufacturing or shipping regions. So, from a global supply chain perspective, this is as good as such a cloud gets.

Over the weekend in Europe, Brexit was back in the news. The British PM Johnson has been threatening to unilaterally suspend the portion of the post-Brexit trade deal related to Northern Ireland. So, on Friday the EU began internal discussions about terminating the entire trade deal in the case that Britain breaks the portion related to Northern Ireland. The two sides also began intense negotiations to avoid the break. The Pound fell half a percent on this news. If the deal were to be scrapped, it would wreak havoc with the UK economy at least for months.

This morning Bloomberg is reporting that FB has been keeping investors in the dark about an alarming new trend that is accelerating. This was part of the basis (if not the media/Congress publicized reason) behind the SEC whistleblower complaint in early October. It seems that researchers inside FB reported to executives in late March that teens (13-17) and young adults (18-29) are spending far less time and sending fewer messages in the last year. In fact, fewer teens are even signing up to the platform. The most troubling fact is that users across all age groups are creating fewer posts at a time when logically they were home more and had very little in the way of other social outlets. Obviously, these trends are a major threat to the company’s advertising business and is the driver behind the recent massive increase in FB marketing efforts.

Overnight, Asian markets were mixed. Shanghai (+0.76%) and Shenzhen (+0.72%) led to the upside. Meanwhile, Japan (-0.71%) and Thailand (-0.56%) paced the losses. In Europe, markets are also mixed as of mid-day. The FTSE (+0.38%) and DAX (+0.19%) are modestly higher, while the CAC (-0.20%) and many of the smaller exchanges are down in early afternoon trading. As of 7:30 am, US Futures are pointing toward an open just on the green side of flat. The DIA is implying a +0.04% open, the SPY implies a +0.12% open, and the QQQ implies a +0.26% open to start the week. 10-year bond yields are up to 1.663% and Oil (WTI) is up a percent in early trading. Finally, contrary to reports last week, PYPL announced that it’s not interested in buying PINS at this point.

There is no major economic news scheduled for release on Monday. Major earnings reports scheduled for the day include ARLP, HSBC, IBA, KMB, LII, OTIS, and QSR before the open. Then after the close, ARE, AXTA, BRO, CDNS, CR, CCK, FB, LOGI, OI, PKG, SSD, SUI, TBI, and UHS report.

As we head into a heavy earnings week, the rest of the world looks to be waiting on more direction. The bullish trend is getting some relief from over-extension and that rest may continue today as the market wants to see another earnings card before placing its next bet. So, the bulls remain in control of the trend, but biding time may be the order of the day. Remember, FB reports tonight, GOOG, AMD, and MSFT report Tuesday, and AAPL and AMZN report Wednesday…just among the FANGMAN leaders. Those reports could make major waves in the market. Be prepared.

Remember that it’s discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them. Focus on your trading process and on managing the things you can control. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Swing Trade Ideas for your consideration and watchlist: APA, CLF, ARKK, EOG, DVN, HAL, BP, KRE, SAM, PFE, JNJ, ORCL, M. 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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SP-500’s Turn to Touch the Sky

October 22, 2021 by Doug Campbell

With tech stocks stretching higher, it was the SP-500’s turn to touch the sky, setting a new record-extending the index into seven straight days of gains. The earnings miss from big blue briefly sent the Dow lower only to recover by the end of the day as the ravenous bulls continue to buy, buy, buy! Although the INTC and SNAP point sharply lower after disappointing earnings, the U.S. futures suggest new records may be set at today’s open. Can we extend the party as we head into the weekend? Your guess is as good as mine, but I would be more of a profit taker today rather than a buyer.

Asian markets closed mixed as Evergreade made a bond payment in the grace period to avert default. European indexes see nothing but green across the board this morning as Chinese property fears temporarily subside. Though somewhat muted, U.S. futures point to a bullish open in the Dow and SP-500, while the QQQ looks slightly lower after rallying off overnight lows.

Economic Calendar

Earnings Calendar

We have a slightly lighter day on the Friday earnings calendar, with 37 companies listed. So let’s call it the calm before the next week’s storm of giant tech reports. Notable reports include AXP, SAM, CLF, HCA, HON, RF, SLB, STX, & VFC.

New & Technicals’

The U.K. is seeing rampant Covid infections and a slowly increasing number of hospitalizations and deaths. The warnings come just as government officials have insisted that more restrictions on public life are not yet necessary. Making matters potentially worse, the U.K. is also monitoring a mutation of the delta variant. Evergrande has remitted the funds for a required interest payment due Sept. 23 — ahead of a 30-day grace period that ends tomorrow, according to the Chinese state media Securities Times. The $83.5 million interest payment on Evergrande’s March 2022 offshore bond had been closely watched by investors ever since the indebted property developer warned twice in September that it may default. Analysts say any easing by the People’s Bank of China may not come in overt moves, significantly as the U.S. tightens monetary policy. In addition, the PBOC needs to support a slowing economy while keeping inflation in check. On Thursday, Snap reported its third-quarter earnings, missing revenue expectations after Apple’s iPhone privacy changes disrupted its advertising business. The company also warned that global supply chain interruptions and labor shortages reduce the “short-term appetite to generate additional customer demand through advertising.” The 10-year Treasury yield traded higher to 1.6846%, and the 30-year fell slightly to 2.1257% in early Friday trading.

It was the SP-500’s turn to touch the sky, setting a new record as the bulls continued to buy up tech in anticipation of earnings. Unfortuntually, disappointing results from INTC and SNAP after the bell yesterday have the stock indicated to open sharply lower this morning. Other digital ad stocks are also taking a hit this morning as a result and adding a bit of uncertainty as we move next week’s big tech earnings bonanza. That said, the ravenous bulls at this point seem undeterred, with U.S. futures pointing toward a new record open in the DIA and SPY. No price seems too high as we extend this bullish run keeping the T2122 indicator pegged in a short-term overbought condition. Today we turn our attention toward PMI with a lighter day of earnings reports. With the tech giants slated to report next week, the anticipation is very high, and it seems to me the risk is even higher with such elevated P/E ratios.

Trade Wisely,

Doug

SPY Pushed to Record On Strong Earnings

October 22, 2021 by Ed Carter

Markets opened slightly lower on Thursday and then waffled around while the bulls found their footing. However, by mid-morning a slow, steady rally was underway that ran all the way into the close. This marked the 7^th straight higher close in the SPY and gave us a new all-time high close. DIA just missed both marks while printing a Hanging Man-type candle. Meanwhile, the QQQ printed a Bullish Engulfing candle. On the day, SPY gained 0.28%, QQQ gained 0.61%, and DIA lost 0.02%. The VXX fell 3% to 21.22 and T2122 backed off just a bit but it remains deep in the overbought territory at 92.8. 10-year bond yields rose again to 1.69% and Oil (WTI) fell almost a percent to $82.66/barrel.

During the day, cryptocurrencies took a hit as an algo ran amuck on one of the major exchanges. Binance reported that one of their institutional traders suffered an error in their algorithm. This caused massive selling which drove the price of Bitcoin from $65,000 down to $8,200 (down 87%) before immediately snapping back. So, it was similar to the stock market flash crash from 2010. At the time of Thursday morning’s crash, $40 million of bitcoin was traded on the Binance exchange.

After the close, INTC and WHR both missed on revenue but handily beat on earnings. INTC in particular decried the chip shortage for hurting its personal computer business. Meanwhile, CMG, SIVB, CE, and RHI all beat on both lines. However, SNAP missed on both lines and got crushed in post-market trading. Analysts are expecting the SNAP miss to read through to other online advertising platforms as the company specifically cited the AAPL opt-in vs opt-out privacy policy as impacting ad revenue.

So far this morning, the strong earnings continue as DHR, MMC, IQV, TSCO, KEY, DGX, IPG, SNA, VLO, LUV, AAL, and ALK have all posted beats on both the top and bottom lines. However, ALLE and T both missed on revenue while beating on earnings.

Overnight, Asian markets were mixed in modest trading. Singapore (+0.52%), Hong Kon (+0.42%), and Thailand (+0.36%) led to the upside. Meanwhile, India (-0.35%) and Shanghai (-0.34%) paced the losers. However, in Europe markets are strongly green across the board at mid-day. The FTSE (+0.54%), DAX (+0.85%), and CAC (+1.11%) are typical of the spread across the continent, but many of the smaller exchanges are following the French lead in early-afternoon trading. As of 7:30 am, US Futures are pointing toward a mixed, modest opening. The DIA is implying a +0.21% open, the SPY implies a +0.12% open, and the QQQ implies a -0.16% open at this hour. 10-year bond yields are down slightly and Oil (WTI) is up two-thirds of a percent in early trading.

The major economic news scheduled for release on Friday is limited to Mfg. PMI and Services PMI (both at 9:45 am), Federal Budget Balance (2 pm), and a couple of Fed speakers (Daly at 10 am and Chair Powell at 11 am). Major earnings reports scheduled for the day include AIMC, AXP, ALV, CLF, DSKE, GNTX, HCA, HON, RF, ROP, SLB, STX, and VFC before the open. There are no reports after the close.

Once again the bulls have refused to yield. So far, it looks like they are going to continue that drive toward blue-sky at the open today. With that said, we certainly appear to be working on borrowed time. It is not very often that you see this many white candles and green closes in a row. So, be careful. In particular, some traders might be looking to take profits after the run and heading into the weekend. So, be prepared for a pullback or at least a rest. As mentioned in recent days, don’t be chasing the rally. Let the market (and trade) come to you and trade carefully.

The weekend is upon us. So, think about how you want your portfolio to be adjusted ahead of the weekend news cycle. Take profits, hedge, and/or move stops as appropriate. You’re not missing anything if you don’t chase new positions. Remember it takes twice as long to recover losses, so the first rule of making big money is not losing big money. It is discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them. Focus on your trading process and on managing the things you can control (while not worrying about things you can’t influence). Finally, watch your current positions before looking to add new trades.

Swing Trade Ideas for your consideration and watchlist: No trade ideas for Friday. 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