Whipsaw Reigns as EV Stocks Take Beating

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Markets gapped down well over a percent and then followed through the first hour of the day. However, this led to a sideways waffle the rest of the session but ended on an up wave that had the 3 major indices closing near their highs of the day.  This volatility left us with gap-down, white Hammer-type candles across the major indices.  On the day, SPY lost 1.06%, DIA lost 1.23%, and QQQ lost 1.10%.  The VXX rose almost 4% to 22.78 and T2122 dove deep into the oversold territory at 4.44.  10-year bond yields rose to 1.426% and Oil (WTI) fell 3.1% to $68.66/barrel.  

In a follow-up to the weekend story of Senator Manchin essentially killing President Biden’s domestic spending and climate agenda, markets reacted to the news during the day.  In particular, electric vehicle (EV) stocks plummeted as the prospect of EV tax incentives, more widely available charging stations, etc. were killed as part of the package.  RIDE lost 8.15%, FFIE lost 9.45%, NKLA lost 7.31%, and recent IPO RIVN lost 7.90%.  TSLA and GM (which no longer qualify for federal tax credits) fared relatively better.  TSLA lost 3.50% and GM lost 2.03% on the day.

After the close NKE and MU both easily beat estimates on both revenue and earnings.   MU spiked 7% in after-hours trading on this news.  Meanwhile, NKE was up almost 3% in the post-market session.  However, this morning GIS easily beat on revenue but missed on earnings.  At the same time, RAD handily beat on earnings but missed on revenue. 

Overnight, Asian markets leaned heavily to the green side on varying moves.  Only Malaysia (-0.09%) showed any red while Japan (+2.08%), Hong Kong (+1.00%), and Shanghai (+0.88%) led the gains.  In Europe, stocks are green across the board at mid-day.  The FTSE (+1.00%), DAX (+1.10%), and CAC (+1.03%) are typical of the continent, with outliers like Russia (+0.35%) and Norway (+1.60%).  As of 7:30 am, US Futures are pointing to a gap higher at the open.  The DIA implies a +0.89% open, the SPY is implying a +0.95% open, and the QQQ implies a +1.08% open at this hour.  10-year bond yields are up strongly to 1.451% and Oil (WTI) is up 1.5% in early trading.

The major economic news scheduled for release Tuesday is limited to Q3 Current Accounts (8:30 am).  The major earnings reports scheduled for the day are limited to GIS and RAD before the open.  Then after the close, AIR reports. 

LTA Scanning Software

Once again markets made most of their eventual move in the overnight gap. However, there was just enough intraday whipsaw to put a hurt on chasers. Only the mega-cap DIA has not tested its December lows, as the SPY and QQQ passed their test Monday. It looks like we may be headed back to retest the T-line next. So, consider whether there is a trend at the moment and whether you have an edge. Either way, keep a close eye on volatility and don’t forget that volume is likely to dry up as the week goes on.

When you’re wrong, admit it and take your loss. (That’s why we set stops.) Remember the first rule of making a lot of money in the market is to not lose a lot of money in the market. So, stick to your trade rules and on managing the things you can control. Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor.

Ed

Swing Trade Ideas for your consideration and watchlist: MCK, JNPR, ABUS, NEM, LSI, CSCO, PGR, CVS, AVGO, VZ, CERN, GILD. 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

More Technical Damage

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The selling on Friday created more technical damage as the DIA and QQQ joined the IWM below their 50-day averages.  However, the DIA and SPY still hope they can avoid dipping below the Dec. 1st low.  Unfortunately, follow-through selling this morning will officially create lower lows in the QQQ and IWM and likely dampen the spirit of the buy-the-dip buyers who will feel the pain of another gap down today.  The highly hyped and hoped-for Santa rally looks to have been stolen by the Grinchy new variant and its possible economic impacts.  Expect volume to drop quickly this week as traders head out for holiday plans.

Asian market closed red across the board as pandemic worries intensified.  European markets are also decidedly bearish, with the FTSE leading the bears down 1.96% this morning as restrictions expand.  Ahead of a light day of earnings and economic data, U.S. futures point to a nasty gap down to begin this holiday-shortened week.  So, buckle up and get ready for a dose of volatility in the open.

Economic Calendar

Earnings Calendar

Kicking off a holiday-shortened week, we have 14 companies listed with a few unconfirmed.  Notable reports include CCL, MU, NIKE, & BLDE.

News & Technicals’

The Netherlands entered full lockdown from Sunday until mid-January, leaving only supermarkets and essential shops open.  In the U.K., government ministers are also refusing to rule out further restrictions over Christmas as cases skyrocket.  President Joe Biden’s Chief Medical Officer Anthony Fauci said on Sunday that it was clear omicron was already “raging through the world.” However, modern said that its currently authorized booster could “boost neutralizing antibody levels 37-fold higher than pre-boost levels,” which it described as reassuring.  However, it also said that a double dose of the booster shot — 100 micrograms, rather than the approved 50 micrograms — was significantly more effective.  Sen. Joe Manchin, a conservative Democrat, said Sunday he won’t support the Biden administration’s “Build Back Better” plan.  Manchin’s decision will likely kill the $1.75 trillion social spendings and climate policy bill as it is now.  Democrats need Manchin’s vote in the 50-50 Senate, plus a tie-breaker from Vice President Kamala Harris.  Treasury Yields traded lower in early Monday trading, with the 10-year slipping to 1.3716% and the 30-year falling to 1.7897%.

The selling on Friday added more technical damage to the index charts, with the QQQ, IWM, and now the DIA trading below their 50-day averages.  Central bank changes and the rapidly spreading pandemic variant may have ended the hope of a Santa Clause rally this year.  Heavy selling in Asia and Europe suggests the short holiday weeks ahead could see challenging price action.  Once again, the buy-the-dip buyers will feel the sting of disappointment with futures pointing to a substantial gap lower.  The QQQ and the IWM look to open lower than the December 1st lows, but the DIA and SPY still cling to hope a lower low can be avoided.  Keep in mind volume will likely decline throughout the week as traders head out for holiday plans.  Moring price volatility could easily slip quickly into low volume choppy price action unless otherwise inspired by news events. 

Trade Wisely,

Doug

Short Week Met By Lowered GDP Forecast

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Markets gapped down about a percent on Friday morning.  Then with the quadruple witching, volatility reigned.  After the gap down, the large-caps put in a whipsaw day along the opening price before closing near the lows.  However, the QQQ rallied, more than closing the gap before it started its volatile ride.  Again, the tech stocks ended up closer to the lows than the highs of the day.  The SPY and QQQ indices both printed indecisive candles with large upper wicks, but the DIA printed a large-body black candle.  On the day, SPY lost 1.41%, DIA lost 1.62%, and QQQ lost 0.50%.  The VXX rose 3% to 21.97 and T2122 rose just outside the oversold territory to 21.05.  10-year bond yields fell to 1.404% and Oil (WTI) lost almost 3% to $70.34/barrel.  

Covid has come back as a major business issue again. In the UK, the Mayor of London said that more Covid restrictions are inevitable after declaring a major incident as both cases and hospitalizations spiked in the city. The UK government is debating another lockdown. However, in the Netherlands, the debate is over as they went back into lockdown until mid-January.  France and Italy have begun discussing their own options in this regard. If there is a silver lining, it is that the corporate world now has a lot of experience dealing with remote work, mask requirements, and the loss of manpower due to illness/quarantine.

GS cut their US economic forecasts significantly this morning as a result of the last week’s political drama.  They have lowered Q1 by 1% (to +2%), Q2 by half of a percent (to +3%), and Q3 by 0.25% (to +2.75%).  This comes amidst the backdrop of 7% inflation and is the result of new expectations that President Biden’s domestic economic spending is now dead.  (Following Dem. Senator Manchin’s declaration, that he would not vote for that spending.)  

Overnight, Asian markets were red across the board.  India (-2.18%), Japan (-2.13%), and Shenzhen (-2.01%) led the losses as omicron fears and the divergence of Chinese easing from Western tightening took root.  In Europe, we also see red across the board at mid-day.  The FTSE (-1.07%), DAX (-1.69%), and CAC (-0.99%) pace the continent as usual, but losses are widespread and strong as of early afternoon.  As of 7:30 am, US Futures are pointing to the US following the rest of the world lower.  The DIA is implying a -1.02% open, the SPY implies a -1.14% open, and the QQQ is implying a -1.33% open at this hour.  10-year bond yields are lower (1.385%) and Oil (WTI) is down over 3% in early trading.

There is no major economic news scheduled for release Monday.  The major earnings reports scheduled for the day are limited to CLL before the open.  Then after the close, NKE and MU report. 

LTA Scanning Software

Welcome back to a short, likely low volume, and potentially whippy pre-Xmas week. US markets look like they want to test the early December low this morning. Keep an eye on volatility and don’t forget that volume is likely to dry up as the week goes on.

Stick to your trade rules and on managing the things you can control. Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Ed

Swing Trade Ideas for your consideration and watchlist: VZ, NEM, IBM, DRI, LEG, SBUX, BBIG, CRSP, BAC. 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

Quadruple Witching

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Quadruple Witching

Thursday morning’s early bullishness turned to the bear’s favor with yesterday’s pop and drop, leaving behind concerning price patterns on the SPY, QQQ, and IWM.  Today with little inspiration available on the earnings and economic calendars, the quadruple witching could add to the wild price gyrations as we slide into the weekend.  That could make it challenging for the bulls to defend price supports if traders and investors reduce or avoid weekend risk.  Remember, cash is a position!

During the night, Asian markets closed red across the board, with tech stocks sliding south.  This morning, European market trade is mainly in the red market, and infection rates, surges, and tech fall 1.7%.  This morning, U.S. futures point lower across the board as uncertainty raises its ugly head heading into the weekend.  Plan your risk carefully with price gyrations expected due to options expiration.

Economic Calendar

Earnings Calendar

We have a very light day on the Friday earnings calendar with just 12 companies listed but only three confirmed.  Those listed but not particularly notable are DRI, WGO & YCBD.

News & Technicals’

The Consumer Financial Protection Bureau is seeking information from Affirm, Afterpay, Klarna, PayPal, and Zip on the risks and benefits of their products. For example, “Buy now, pay later” services let shoppers defer payment for items, typically throughout monthly installments and with no interest attached.  Affirm’s shares closed down by 11% Thursday, while Australian companies Afterpay, Zip, and Sezzle on Friday dropped 8%, 6%, and 10%, respectively.  Rivian said it expects to fall “a few hundred vehicles short” of its 2021 production target of 1,200 vehicles.  The company said it faced supply chain issues and challenges ramping up production of the complex batteries that power the vehicles.  The updates come alongside Rivian’s first quarterly report as a public company and confirmation of plans for a new $5 billion plant in Georgia that’s expected to come online in 2024.  Adobe’s guidance for its fiscal first-quarter badly missed analysts’ estimates.  The stock plummeted 10%, its second-worst day in the past decade.  In December, it’s the third time that Adobe shares have plunged, putting the stock on pace for its steepest monthly drop since June 2010.  Treasury yields dip slightly in early Friday trading, with the 10-year sliding down to 1.4208% and the 30-year declining to 1.8538%.

Yesterday’s pop and drop increased uncertainty, with the QQQ leaving behind a bearish engulfing candle and opening the door for a possible reversal.  Today is a quadruple witching day, so the market may experience odd price gyrations as the institutions and investors adjust positions.  Unfortunately, we have little to nothing on earnings and economic calendars to inspire direction.  That said, with the uncertainty displayed in the charts heading into the weekend, the bulls may have a tough time defending price support levels.  Sadly, the hoped-for Santa rally may well succumb to the Grinch’s shenanigans.  I wish you all a safe and restful weekend!

Trade Wisley,

Doug

Bears Take Back Control

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Maybe it was a reaction to the premarket rate hike by the UK or maybe it was just an “on second thought” reaction to Wednesday’s Fed announcements.  Whatever it was, after a gap higher at the open, the bears were in control all day long.  This left us with a Dark Cloud Cover signal in the SPY and a Bearish Engulfing signal in the QQQ.  On the day, SPY lost 0.83%, QQQ lost 2.51%, and the DIA went relatively unscathed at -010%.  The VXX rose over 4% to 21.28 and T2122 dropped back down a bit to 44.64.  10-year bond yields fell to 1.428% and Oil (WTI) still gained 1.67% to $72.05/barrel.   

ADBE (-10.22%) got crushed on Thursday after announcing weak forward guidance while reporting a beat on revenue and reporting in-line earnings all before the open.  Their guidance was 2.5% below analyst estimates on earnings and 1.5% low on revenue for the next quarter.  However, Mr. Market felt that punishment was required.  Then after the bell, RIVN share fell 10% as well when the company reported in-line earnings and revenue, but gave poor production guidance in its first-ever quarterly report.

New York City is experiencing what it calls an “alarming increase” in covid numbers.  The city has seen a 135% increase in reported cases and a 21% increase in hospitalizations over the last two weeks.  As a result, many Wall Street companies are moving back to remote work.  Among the major brokerage/fund firms making those decisions are BLK, JPM, and JEF.  However, the resurgence is having an impact nationwide as companies as varied as AAPL, FB, F, and GOOG have postponed their “return to office” and/or closed particular offices again.  (AAPL closed 3 stores.)  

Meta announced that 50,000 FB users had been spied on by seven “surveillance for hire” companies.  (Side note: FB is absolutely not the only platform these companies surveil.) Most of these companies are located in Israel, which has particular expertise in spyware and data mining.  Most of the people targeted were journalists, activists, and either government or corporate officials.  It is widely believed these companies were hired by governments who either lack the capabilities in-house or, like the US, are sometimes forbidden by law from spying on their own citizens…but are allowed to hire someone else to do it.

Overnight, Asian markets were mostly in the red.  Japan (-1.79%), Shenzhen (-1.62%), and India (-1.53%) led the way lower.  However, there were 5 exchanges that gained, mostly on very modest moves, with an outlier in Malaysia (+1.17%).  In Europe, stocks are nearly red across the board.  The FTSE (+0.19%) is the only green as the DAX (-0.74%) and CAC (-1.08%) are much more typical of the region at mid-day.  As of 7:30 am, US Futures are pointing to a red open.  The DIA implies a -0.13% open, the SPY is implying a -0.35% open, and the QQQ implies a -0.85% open at this hour.  10-year bond yields are down sharply to 1.397% and Oil (WTI) is down almost 2% in early trading.

The major economic news scheduled for release Friday is limited to a Fed speaker (Waller at 1 pm). The major earnings reports scheduled for the day are limited to DRI and WGO before the open.  There are no reports scheduled for after the close. 

LTA Scanning Software

The market looks to be giving a little follow-through to Thursday’s move. With no news today, the apparent stoppage of the President’s economic agenda (major political news), and quadruple witching happening today, don’t be surprised by a lackluster market. Keep an eye out for pinning or even volatility as the afternoon hits. And don’t forget it’s Friday or that next week is Christmas week, which is likely to be low-volume and dull as traders take time off. So, pay yourself, get ready for the weekend news cycle, and consider whether you will be trading next week.

Stick to your trade rules and on managing the things you can control. Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Ed

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

Aggressive Taper

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Aggressive Taper

With the Fed announcing an aggressive taper and three possible rate increases next year, the market surged, triggering a short squeeze that is now looking to gap setting new record highs in the SPY!  Go figure?  I guess it tells us just how problematic inflation had become! Of course, with a big gap up comes the risk of a pop and drop, so watch carefully for follow-through buying before diving into risk.  We have a quadruple witching this Friday so expect price gyrations to remain challenging.

Asian traded chiefly higher led by Japan surging 2.13%, seemingly celebrating the more hawkish Fed.  European markets are also surging higher after digesting the FOMC decision to taper aggressively.  Ahead of earnings and a slew of possible market-moving reports, Dow futures point to a gap up open or nearly 300 points, and the SP-500 is set for new record highs at the bell.  Remember, big moves like this increase trading risk dramatically, so plan carefully and trade wisely.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 15 companies listed with several unconfirmed.  Notable reports include ADBE, FDX, CAN, GTIM, JBL, SCS, & WOR.

News & Technicals’

As Sen. Joe Manchin withholds his support, Democrats are unlikely to meet their goal of passing President Joe Biden’s Build Back Better Act this year.  The delay will have immediate implications, as the enhanced child tax credit is set to expire, and Democrats could instead turn their focus to voting-rights legislation. However, failure to pass the plan could have broader long-term implications, not only on the country’s social and climate policy but also in next year’s midterm elections.  According to the Statens Serum Institut in Copenhagen, omicron cases are doubling every two days in Denmark, with variant expected to overtake delta in the next week.  The rapid spread of omicron in Denmark, where 80% of the population is vaccinated, is an ominous sign for the U.S.  Dr. James Lawler, an infectious disease expert at the University of Nebraska, said the U.S. has just weeks to take action to stem omicron.  House Speaker Nancy Pelosi scoffed at the idea of banning congressional lawmakers and their spouses from owning stock shares of individual companies.  “We’re a free-market economy,” Pelosi said. “They should be able to participate in that.”  Since the beginning of the Covid pandemic, stock purchases by some senators have sparked investigations.  Treasury yields traded mixed in early Thursday trading, with the 10-year dipping slightly to 1.4582% and the 30-year rising to 1.8627%.

The market surged, triggering a short squeeze after the Fed begins an aggressive taper and sees three rate increases next year.  Though this is the opposite of how the market would generally react to a hawkish Fed but may suggest the impacts of inflation is the greatest evil.  Yesterday’s rally didn’t break price resistance levels, but this morning, ahead of potential market-moving reports, the futures point to a considerable gap up that will set new record highs in the SPY and put the QQQ within striking distance.  That said, a big gap sets up a possible pop and drop at the open, so be careful.  Wait until you see some follow-through before diving in headlong.  Expect price volatility to remain challenging as we head into the quadruple witching Friday.

Trade Wisely,

Doug

Bulls Loved Fed But More Data Ahead

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Wednesday was quite a ride.  Markets opened flat, sold off a little the first half-hour, and then bobbed along the lows until 2 pm.  However, the Fed announcement led to a sharp rally and pullback that left stocks flat going into Fed Chair Powell’s press conference.  It was at that point that the bulls ignited a tremendous rally for the last 1.5 hours of the day, going out very near the highs.  This left us with strong, white candles with small lower wicks.  In addition, all 3 major indices printed Morning Star patterns.  On the day, SPY gained 1.51% (closing within cents of a new all-time high close), DIA gained 1.02%, and QQQ gained 2.24%.  The VXX fell almost 7% to 20.40 and T2122 shot back up to the mid-range at 51.62.  10-year bond yields rose to 1.455% and Oil (WTI) closed up over 1% to $71.55/barrel.   

As mentioned, the market loved the data the Fed released and what the group and especially what Fed Chair Powell had to say.   For one thing, as expected, the Fed is doubling the speed of their bond-buying taper ($15 billion in Nov., $30 billion in Dec., and now $60 billion/month in Jan.).  In addition, they announced that they expect 3 interest rate hikes in 2022, followed by 2 more in 2024.  Lastly, the Fed reduced its 2022 GDP forecast to 5.5% (versus 5.9% as of September), which is still 2% above consensus economist forecasts.  On a side note, the Chief Economist of the Conference Board told Bloomberg that they are forecasting 3.5% but would add another half of a percent if the President’s “Build Back Better” budget and spending passes.

The Bank of England saw the Fed’s shift to focusing on inflation and said “hold my beer” as it announced an unexpected rate hike.  The move increased the UK interest rate from 0.1% to 0.25%.  The most shocking thing about the move was that it came the same day the country announced a new record number of covid cases as the omicron variant sweeps across the UK.  

In earnings news, ACN and JBL beat on both lines.  Meanwhile, WOR beat on earnings but came in light on revenue.  DAL also announced that it expects to post a pretax quarterly profit as both travel and airfares have increased. 

Overnight, Asian markets were mostly green with Japan (+2.13%) a massive upside outlier.  Thailand (+1.33%), Shanghai (+0.75%), and Taiwan (+0.71%) led the main pack higher.  Only Australia (-0.43%) and Indonesia (-0.47%) were in the red.  In Europe, we see strongly green markets across the region at mid-day.  The FTSE (+1.01%), DAX (+1.74%), and CAC (+1.55%) lead the way, but many of the smaller exchanges are up even further.  Russia (+3.20%) is an outlier.  As of 7:30 am, US Futures are pointing solid gap-up follow-through to the Wednesday Fed rally.  The DIA is implying a +0.64% open, the SPY implies a +0.74% open, and the QQQ is implying a +0.76% open at this hour.  10-year bond rates are flat and Oil (WTI) is up just a third of a percent in early trading.

The major economic news scheduled for release Thursday includes Nov. Building Permits, Nov. Housing Starts, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am), Nov. Industrial Production (9:15 am), and Mfg. PMI and Services PMI (both at 9:45 am).  The major earnings reports scheduled for the day are limited to ACN, JBL, ADBE, and WOR before the open.  Then after the close, SCS reports. 

LTA Scanning Software

The market loved the Fed’s announcement and the bulls charged higher yesterday afternoon. It looks like they are going to follow through this morning, but be aware there is a lot of economic data coming before the open. Being back near the all-time highs is great if you are in the Long camp, but markets have not digested the UK rate hike yet. So, be careful.

Stick to your trade rules and on managing the things you can control. Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Ed

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

Highest PPI on Record

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Highest PPI on Record

The highest PPI on record kept the bear engaged yesterday, but surprisingly, the bull worked pretty hard, trying to convince us that inflation doesn’t matter.  Today we turn out attention to retail sales figures and the FOMC decision. Finally, we will learn how big the Taper will be and when the U.S. could expect interest rate increases as the Fed finally moves to fight inflation.  Expect price volatility!  Keep in mind we have several potentially market-moving events Thursday and a quadruple witching on Friday to keep us guessing.

Asian markets traded mixed overnight as investors digested a slew of economic data.  European markets trade mostly bullish this morning as they monitor the Fed decision with modest gains and losses.  Facing a big day of market-moving data U.S. Futures trade flat to mixed as we wait. So let’s get ready to rumble.

Economic Calendar

Earnings Calendar

This Wednesday, we have a bit more activity on the earnings calendar, with 20 companies listed through several remaining unconfirmed.  Notable reports include ABM, BLBD, HEI, LEN, NDSN, REVG, & TTC.

News & Technicals’

Congressional Democrats voted to raise the debt ceiling just before the deadline to mark the first U.S. default.  The Senate passed a borrowing cap increase late Tuesday afternoon, and then the House followed suit early Wednesday.  The bill headed to President Joe Biden’s desk when the Treasury Department estimated the U.S. could run out of tools to pay its bills.  The Biden infrastructure bill included $65 billion to build broadband internet access.  Commerce Secretary Gina Raimondo told CNBC she is confident that every household will have a connection by the end of the decade – if not sooner.  But some experts believe it will cost much more to close the broadband gap. In addition, Chinese companies listed on Wall Street will likely be cut off from U.S. capital markets in the next three years as tensions between Beijing and Washington persist, according to David Loevinger from the TCW Group.  He predicted that by 2024, most Chinese companies listed on U.S. exchanges would no longer be listed in the United States.  Many of China’s top internet companies listed in the U.S. have already undertaken dual listings in Hong Kong. Some high-profile names include e-commerce giant Alibaba, its rival JD.com, search engine giant Baidu, gaming firm NetEase and social media giant Weibo.  Treasury yields rose slightly in early morning trading, with the 10-year climbing to 1.4445% and the 30-year moving up to 1.8301%.

The highest PPI on record kept the bears active yesterday, raising the stakes for the big day of data today.  Before the bell, we have a significant economic data dump, including the highly watched holiday retail sales figures.  Will, the Santa Clause rally make an appearance this year, or will the Grinch sneak in to steal all the goodies?  We will soon find out.  After that, everyone will brace for the uncertainty of the FOMC decision on Taper, future rate decisions, and the chairman’s press conference.  I think it’s fair to say anything is possible, so prepare for more price volatility.  With the VIX elevated and index chart price patterns showing uncertainty, there is a reason for caution as traders and investors digest the data.  As you plan forward, notice several potential market moving reports Thursday morning and a Quadruple Witching this Friday that typically creates unusual price gyrations. 

Trade Wisely,

Doug

Fed Day But Retail Sales and Empire First

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

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

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

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

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

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

LTA Scanning Software

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

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

Ed

Swing Trade Ideas for your consideration and watchlist: TZA, NEE, AKAM, PFE, TSCO, TSN, MDLZ, BAC, TMSU. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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.

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Bears Returned to Work

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Bears Returned to Work

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

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

Economic Calendar

Earnings Calendar

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

News & Technicals’

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

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

Trade Wisely,

Doug