We continue to set index records with stock, with P/E ratios burgeoning as the bulls continue their ravenous appetite for risk. The chart technical’s and the price action show no clues that the trend is ready to stop. However, it would be unwise to assume we will never pull back and chase already extended stocks so late in the rally. So today, expect choppy action ahead of the FOMC decision on taper and prepare for the typically wild volatility directly after the announcement.
Asian markets traded mixed but mostly lower overnight with modest gains and losses. European markets also trade flat this morning as they wait on the Fed and the news that the Bank of England may soon raise rates. With a massive day of earnings data, ADP, and the Fed decision later this afternoon, the U.S. futures point to a mixed open with modest gains and losses as we wait.
Economic Calendar
Earnings Calendar
On the hump day earnings calendar, we have more than 300 expected to report today. Notable reports include ALG, ALB, AMRN, APA, AAWW, BKNG, BWA, CPRI, CF, CAKE, CLH, CVS, DISCA, ELF, EA, EMR, ET, ETR, ETSY, EXC, FSLY, FSR, FOXA, FDP, GDDY, HR, HFC, HST, TWNK, HUBS, HUM, H, IAG, INFN, IR, KTOS, LCI, LBTYA, LL, MRO, MAR, MAR, MBI, MET, MGM, NCLH, NVO, NUS, OMP, PETQ, PXD, PBI PBPB, QRVO, QCOM, QLYS, RYN, RCII, ROKU, SMG, SBGI, SWN, RGR, SPWR, TTWO, TRUE, WING, & XP.
New & Technicals’
The Regional Comprehensive Economic Partnership or RCEP will come into force in January 2022. Australia and New Zealand were the latest to ratify the world’s largest trade agreement. Other countries that have ratified RCEP include Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, and Japan, according to Australia’s Department of Foreign Affairs and Trade. Policymakers have intimated that a hike is imminent, but the nine-member MPC will need to determine whether to tighten policy this week or wait until its mid-December meeting. Markets are uncertain about the timing, with analysts suggesting the vote is likely to be split. However, at Monday’s close, market data showed that derivatives traders were pricing in a 64% probability of a 15 basis point rate hike this week, Berenberg highlighted in a note Tuesday. Zillow said it’s winding down its homebuying unit, called Offers, which competes with Opendoor. The company said it’s cutting 25% of its workforce in eliminating the unit after reporting disappointing earnings results. Ahead of the FOMC decision, U.S. Treasurys pulled back in early morning trading, with the 10-year dipping to 1.5243% and the 30-year sliding to 1.9335%.
Another day and more records set in the DIA, SPY, and QQQ as the ravenous appetite for risk appears to have no bounds. Though the extension in the indexes seems extreme, there is no sign that it’s ready to stop. The current SP-500 P/E Ratio is more than 96% above the historical average, suggesting a strongly overvalued condition. The only time this level was higher in history was the 1999 internet bubble when it reached 132%. So, that would suggest the party may still have plenty of life but let’s not forget the ramifications of such an extension when the party’s over. Today we will be in wait and see mode until the FOMC decision and the question is answered on a taper. At the risk of sounding like a broken record, be careful chasing already extended stocks and be ready for the typical Fed volatility whip after the announcement.
Markets opened basically flat on Tuesday and then very slowly crept higher over the course of the day. This left us with white candles that closed near the highs of their candles, with all 3 major indices closing at new all-time high closes again. On the day, SPY gained 0.39%, DIA gained 0.40%, and QQQ gained 0.42%. The VXX fell to 20.54 and T2122 fell just outside the overbought territory at 78.72. 10-year bond yields fell to 1.545% and Oil (WTI) fell two-thirds of a percent to $83.51/barrel.
After hours, AKAM, AMGN, MDLZ, ATVI, VRTX, PRU, VRSK, OKE, DVN, PKI, and AMCR all beat on both lines. TMUS beat significantly on earnings but missed on revenue. On the opposite side, EIX missed on revenue but beat significantly on revenue. However, WU missed on both lines.
In other after-hours news, BBY spiked hard as they announced they are launching a digital marketplace to sell third-party products. They also announced a collaboration between BBY and KR. Finally, they said their stock buyback program was ahead of schedule. Elsewhere, the CDC gave final approval for immediate distribution of the PFE vaccine for children ages 5–11. MDLZ also announced they will raise the prices of their main product lines (Oreo, Ritz Crackers, and Sour Patch candy) by 7% in 2022 after saying they are expecting costs to rise 6%.
So far this morning, MAR, ETR, EVRG, NI, CPRI, HFC, CVS, EXC, BR, and BWA have all reported beats on both lines. HUM, EMR, CTRA, and CDW beat on earnings but missed on revenue. DISCA, DISCK, and NCLH beat on revenue but missed on earnings. There were no reported misses on both lines.
Overnight, Asian markets were mostly red in modest trading. Australia (+0.93%) and Taiwan (+0.33%) were the only bullish exceptions. South Korea (-1.25%) was also an outlier to the downside. However, Japan (-0.43%), Shanghai (-0.20%), and Shenzhen (-0.07%) were typical of the spread in the region. In Europe, markets are mixed as of mid-day, also on mostly modest trading. Portugal (-1.96%) is a huge outlier, but the FTSE (-0.27%), DAX (-0.03%), and CAC (+0.08%) are more typical of the continent. As of 7:30 am, US Futures are pointing toward a flat open in the US as well as we wait on the Fed announcements. The DIA implies a -0.13% open, the SPY is implying a -0.10% open, and the QQQ implies a +0.06% open at this hour.
The major economic news scheduled to release on Wednesday includes Oct. ADP Nonfarm Payrolls (8:15 am), Sept. Trade Balance (8:30 am), Oct. Services PMI (9:45 am), Sept. Factory Orders and Oct. ISM Non-Mfg. PMI (both at 10 am), Crude Oil Inventories (10:30 am), FOMC Interest Rate Decision and Statement (2 pm), and the Fed Chair Press Conf. (at 3:30 pm, a non-normal time). Major earnings reports scheduled for the day include AMRX, ATH, AAWW, BDC, BGCP, BWA, EAT, BR, BIP, CWH, CPRI, CDW, FUN, CRL, CLH, SID, CTRA, CVS, DISCA, EMR, ETR, EVRG, EXC, EXPI, HFC, HZNP, HUM, JLL, MKL, MAR, NYT, NI, ODP, OMI, PSN, PBI, PLTK, PRG, RRD, SMG, SBGI, SITE, SPR, SHOO, SUN, SYNH, TT, TUP, VNTR, VRTV, and VSH before the open. Then after the close, ALB, ALL, UHAL, APA, ACA, EQH, BKNG, CENX, CF, CHNG, CAKE, CLR, CTVA, CW, DXC, EA, ET, NVST, EQIX, ETSY, FLT, FOXA, GFL, GDDY, H, ICLR, IR, ITT, KL, LHCG, LBTYA, LNC, LUMN, MATX, MET, MGM, NUS, PTVE, PARR, PXD, QRVO, REGI, ROKU, RYI, SWN, SUM, TTWO, TRMB, TPC, VVV, XP, and YELL report.
Earnings continue to be very strong for the most part. However, it seems markets around the world are waiting on today’s big dump of data and in particular the Fed announcements. The Fed moves have been widely telegraphed for quite some time, but Mr. Market seems to want to hear the words to remove all doubt. In the meantime, the bulls have been running wild, with the major indices at all-time highs after a very strong 3-week streak. So, the trend is strongly bullish, the Fed news is believed to already be known (bond-buying taper starting and inflation is going to last longer than the FOMC originally thought). That puts the risk on the downside (unexpected bad news could hurt twice as bad). Be prepared.
Keep in mind that while we are extended, the market can remain very extended longer than you can stay solvent being right early. Long-term trading success has never come from betting on reversals. Remember, the trend is our friend. Focus on your trade rules and on managing the things you can control. And that should include 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.
Ed
Swing Trade Ideas for your consideration and watchlist: BGFV, BIG, BTBT, CHWY, BX, X, MU, ORCL, 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.
🎯 DickCarp: 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
|607% in just 24 months |
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.
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
The bulls continue higher with a mighty shove, setting new records despite declining ISM and Construction Spending numbers. I guess the message is don’t bother me with the details of the economy because I want to buy, buy, buy no matter what! Now the market will have to grapple with the FOMC and the possibility of a taper in the easy money policies and jobs data the rest of the week. With emotional speculation running very high, expect challenging volatility, particularly if this bull run stumbles. So plan your risk carefully as we continue to stretch the indexes.
Asian markets traded mostly lower as real estate stocks retreated with growing default fears and China slipping into stagflation. European markets trade mainly higher as they wait on the decision from the FOMC. The U.S. futures indicate an uncharacteristically flat open this morning, facing a big day of earnings events and the beginning of the central bank meeting.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have a busy day with 190 companies listed, but a large number are unconfirmed. Notable reports include PFE, ATVI, AKAM, AFG, AWK, AMGN, APO, ARNC, BHC, BLMN, BP, CZR, CRK, COP, COUR, CMI, DVN, APPS, DD, ETN, EIX, EL, EXAS, EXPD, RACE, GRNC, GNW, GRBK, HSIC, HLF, IEP, IDDXX, KKR, LEA, LPSN, LPX, LYFY, MMP, MPC, MLM, MTCH, MDLZ, PACB, RL, SEE, SEDG, SRC, SMCI, TMUS, UAA, UNM, WU, XPO, & Z.
News & Technicals’
ON MONDAY NIGHT, Tesla CEO Elon Musk said that his electric vehicle company has yet to sign a contract with rental car company Hertz. Tesla hit a $1 trillion market cap for the first time a week ago after Hertz announced it would grow its fleet of battery-electric vehicles with “an initial order of 100,000 Tesla’s by the end of 2022.” In addition, the EPA will propose rules to plug methane gas leaks at hundreds of thousands of oil and gas wells in the U.S. The agency’s measures will strengthen current regulations on new oil and gas wells and impose new requirements for existing wells that previously escaped methane regulations. According to senior Biden administration officials, President Joe Biden will formally announce the proposals during the second day of the COP26 climate summit in Glasgow, Scotland. According to its amended prospectus filed Monday, electric vehicle start-up Rivian Automotive is seeking a market valuation of as much as $54.6 billion in its upcoming initial public offering. Rivian said it is offering 135 million shares priced between $57 and $62, with an option for underwriters to purchase up to 20.25 million additional shares. Amazon and Ford back Rivian. Treasury yield trade mixed this morning before the beginning of the FOMC meeting, with the 10-year falling to 1.5611% and the 30-year up slightly to 1.9770% in early trading.
The bulls continue higher, setting records in the DIA, SPY, and QQQ, with the IWM surging but finishing just short of a breakout. The T2122 indicator was nearly pegged at the top of the range heading into the close on Monday, suggesting a short-term extreme overbought condition. The VIX ended the day slightly higher, which is odd considering the wild-eyed bullishness displayed in the indexes despite the decline in the ISM and construction spending numbers. The market will now turn its attention to the beginning of the FOMC meeting and the possibility of easy money policies tapering at the announcement Wednesday afternoon. The market will also begin digesting a slew of jobs data with the ADP Wednesday morning, Jobless Claims Thursday, and the Employment Situation number Friday. Combined with a considerable number of earnings reports, expect price volatility in this highly emotional and speculative bull run.
Stocks opened up slightly higher Monday and then drifted sideways in waves all day that closed on an up-wave. This left us with gap-up Hanging Men-type candles in the SPY and QQQ as well as a Doji in the DIA. On the day, SPY gained 0.17%, DIA gained 0.25%, and QQQ gained 0.33%. This left all 3 major indices at all-time high closes again. The VXX fell 1.5% and T2122 jumped up deep into the overbought territory at 94.431. 10-year bond yields were flat at 1.559% and Oil (WTI) gained half of a percent to $83.95/barrel.
Related to Federal spending, the Treasury Department announced late Monday that it is increasing the expected amount of borrowing to $1.02 trillion during Q4, which is up about $314 billion from the August estimate of $703 billion. In a related story, the Federal Budget, Debt Ceiling Increase, and Infrastructure bills are back in doubt as WV Senator Manchin announced he “may not” support the $1.75 trillion budget plan because he wants “greater clarity” on the impact on the national debt. Sources told Bloomberg his main concerns are climate-related initiatives and to a lesser degree social spending initiatives as might be expected. On the opposite side, Progressive Democrats won’t support the bills at lower costs or fewer social and climate initiatives. This may be as expected since there is still a month left until the deadline created by budget and debt limit extensions.
After hours, PSA, WMB, MCK, ANET, CLX, FANG, and HOLX all beat on both lines. Meanwhile, NXPI, SBAC, O, VNO, and LEG beat on revenue but missed on earnings. On the other side of the coin, MOS missed on both lines and reported that they expect the massive input price surge they have been seeing to continue in Q4.
In earnings this morning, BP, MPC, PFE, DD, ETN, COP, EL, LDOS, HSIC, MPLX, GPN, WLK, KKR, WEC, ROK, TRI, UAA, SEE, XYL, ZBRA, AMEIT, CTLT, LCII, LPX, IDXX, WAT, and TMX all beat on both lines. LEA, MLM, NXST, GNRC, BLD, SRCL, and HSC missed on earnings but came in at least in line on revenue. Only ARNC has missed on both lines so far
Overnight, Asian markets were mixed, but leaned to the red side as Chinese fears over the real estate market flare again and Beijing has halted flights again to combat Covid-19. South Korea (+1.16%) was the leader to the upside. Meanwhile, Shanghai (-1.10%), Indonesia (-0.91%), and Shenzhen (-0.69%) paced the losses. In Europe, markets are also mixed at mid-day. The FTSE (-0.42%), DAX (+0.52%), and CAC (+0.32%) are typical of the spread across the continent as talk of climate initiatives lead all news in Europe the last couple of days. As of 7:30 am, US Futures are pointing toward a flat open. The DIA is implying a +0.02% open, the SPY implies a -0.02% open, and the QQQ is implying a -0.18% open at this hour. 10-year bond yields are down slightly and Oil (WTI) is off by half of a percent in early trading.
There is no major economic news scheduled for release on Tuesday. Major earnings reports scheduled for the day include PFE, CRSR, RACE, UAA, CTLT, BP, EL, COP, GPN, GNRC, LPX, RL, ARCB, EPD, ROK, MPC, ZBRA, CMI, BHC, BLMN, MPLX, DD, LGIH, IDXX, KKR, LEA, AME, IT, MLM, ETN, LDOS, SEE, ARNC, INCY, WLK, HSIC, LCII, APO, PEG, BLD, MMP, WAT, NXST, WEC, HSC, XYL, CIGI, TRI, INGR, SRCL, and TMX before the open. Then after the close, ATVI, AKAM, AMCR, DOX, AMED, AFG, AWK, AMGN, ANDE, ARGO, AIZ, BTG, BFAM, CZR, CHK, DCP, DVN, EIX, ENLC, FMC, FNF, FRG, HLF, KAR, LYFT, MANT, MTCH, MCY, MOD, MDLZ, OKE, OVV, PKI, PAA, PRU, SKY, SEDG, STE, SGRY, TMUS, TX, UNM, VRSK, VRTX, VOYA, WU, XPO, ZG, and Z report.
Markets seem to be taking a wait-and-see attitude this morning with the FOMC meeting beginning. Even though the outcome is widely expected and has been signaled by the Fed for some time (bond-buying taper begins), traders appear to want to see another card before they place more bets. Despite the fear of a slowing economic recovery and inflation, earnings continue to be mostly strong among the larger companies. Stay nimble, and don’t be surprised if we see a blase day while we wait on the Fed and Congress and COP26 speeches.
The trend remains bullish, with all 3 major indices sitting at all-time highs. Keep in mind that while we are extended, long-term trading success has never come from betting on reversals. So, remember, the trend is our friend. Focus on your trade rules and on managing the things you can control. And that should include 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.
Ed
Swing Trade Ideas for your consideration and watchlist: STX, CAN, BTBT, CAT, AMD, CSCO, LVS, CHWY, BB, ARKK, NIO, WFC, HPQ. 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.
🎯 DickCarp: 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
|607% in just 24 months |
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.
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
The bulls powered through to set more new records to end October after disappointing tech earnings results due to supply chain disruptions. Not to be outdone, the bulls are pushing for yet another gap up open November trading on a high note. Index charts remain quite extended, but at this point, nothing seems to dissuade this relentless bull. However, when gapping to new records, we can not rule out the possibility of a pop and dorp pattern, so be careful chasing in at the open, making sure we see some follow-through buying.
Overnight with the threat of stagflation, Asian markets traded mixed as the Nikkei soared 2.61%. Across the pond, European markets kick off the month decidedly bullish across the board. Ahead of earnings and manufacturing data, the bulls seem unstoppable this morning, pointing to a substantial gap and new records at the open.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 87 companies listed with several unconfirmed reports. Notable reports include ADTN, ALX, ANET, CAR, BCC, CRUS, CLX, CVI, FANG, FN, BEN, GAIA, GXO, IPI, L, MCK, MOS, NXPI, ON, OTTR, PCG, PSA< O, RYAAY, SBAC, SPG, SKT, TTM, RIG, VNO, WFRD, & WMB.
News & Technicals’
Barclays CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein. C.S. Venkatakrishnan (known as Venkat), currently head of global markets at Barclays, is set to take over as chief executive immediately. The bank said the investigation had not found that Staley “saw, or was aware of, any of Mr. Epstein’s alleged crimes.” In October, China’s factory activity contracted more than expected, shrinking for a second month, an official survey released on Sunday showed. The latest October manufacturing data shows low production and high price inflation, economists say. “A worrying sign is the passthrough of inflation from input prices to output prices. The input price inflation has been high for many months by now, driven by the rising commodity prices,” Zhang Zhiwei, chief economist at Pinpoint Asset Management, wrote. Treasury yields begin November higher, with the 10-year trading at 1.5938% and the 30-year rising to 1.9638% in early trading Monday morning.
Although the DIA, SPY, and QQQ continue to appear extended, the disappointing tech earnings only fanned the flames of buying, setting new record highs on Friday. With another busy of earnings and the whispers of FOMC taper in the air, can we expect more of the same? Futures this morning suggest yes with a gap up to more records! That said, we can’t rule out the possibility of a pop and drop coming into play. According to analyst’s estimates, ISM may decline slightly with the report at 10 AM Eastern. However, with the decline in durable goods, GDP, and personal incomes not slowing the buying frenzy, a manufacturing decline might just easily get shrugged off. We can be sure that the price action will likely remain challenging with lots of earnings-fueled gaps and whipsaws.
Markets gapped down at the open Friday after AMZN’s terrible report the night before. However, the bulls stepped in and gave us a gradual and wavy rally most of the day. Then a strong surge the last 30 minutes took us out near the highs. This meant that all 3 major indices managed to squeak out a new all-time high close on strong white candles. On the day, SPY gained 0.20%, QQQ gained 0.49%, and DIA gained 0.28%. The VXX rose slightly to 21.44 and T2122 fell slightly to 68.05. 10-year bond yields also fell slightly to 1.557% and Oil (WTI) rose half a percent to $83.30/barrel.
AAL had to cancel 1,500 flights over the Halloween weekend, citing weather (high winds in Dallas), but also Pilot and Flight Attendant shortages. As of Sunday, about 1% of AAL’s Monday flights had been canceled. In other labor-related news, on Sunday Bloomberg reported that a tentative deal has been reached between DE and their striking labor union. The agreement calls for a 10% across-the-board wage increase.
Also over the weekend, the G20 approved the 15% minimum corporate tax agreement. The President also tried to get an agreement on the group working together to solve global supply chain issues. (It’s uncertain what they could do to solve those issues, but they did discuss the topic.) The same G20 group failed to reach an agreement on how to fight global warming ahead of the upcoming “COP26” climate summit this week. This is critical since 80% of global emissions are produced by G20 countries. In addition, several more leaders have decided to skip the COP26 meeting. So, no matter where anyone stands on the topic, without a united G20 font, it seems unlikely businesses will face major new carbon costs or forced technology changes coming out of this climate meeting.
As the week starts, markets are looking ahead to both a ton of earnings (175 of the SPY report) and other major data. On Wednesday, the FOMC is expected to announce the beginning of its bond-buying taper (with the betting now forecasting the first rate hike in July 2022). Toward the end of the week, we will get Jobless Claims, Q3 Productivity, and then October Payrolls on Friday. So, earnings optimism may continue to energize the bulls, but waiting on more direction may also be the move for many traders.
Overnight, Asian markets were mixed on widely varying trading. Japan (+2.61%) was a huge outlier to the upside and Malaysia (-2.01%) a huge outlier to the downside. Hong Kong (-0.88%) was down and Taiwan (+0.48%) as mainland China was flat in front of Chinese productivity numbers coming later. In Europe, markets are green across the board at mid-day on earnings optimism. The FTSE (+0.51%), DAX (+0.84%), and CAC (+0.88%) are typical of the continent, with some smaller exchanges moving up over 1% in early afternoon trading. As of 7:30 am, US Futures are pointing toward a gap higher as confidence about earnings grows. The DIA is implying a +0.48% open, the SPY implies a +0.45% open, and the QQQ is implying a +0.42% open at this hour. 10-year bond yields are up briskly to 1.582% and Oil (WTI) is up half of a percent in early trading.
The major economic news scheduled for release on Monday is limited to Mfg. PMI (9:45 am) and ISM Mfg. PMI (11 am). Major earnings reports scheduled for the day include AMG, CNA, ENBL, BEN, JELD, LDI, L, ON, PCG, and TKR before the open. Then after the close, ANET, CAR, BRKR, BWXT, CLX, CVI, FANG, FN, HOLX, NSP, KMT, LEG, MOS, NTR, NXPI, PSA, RRX, SBAC, SPG, RIG, TA, UNVR, and WMB report.
Earnings optimism continues in premarket this morning, as to date more than 80% of reports have been beats. However, there is plenty of news that could move markets ahead this week. Stay nimble, and don’t forget that you don’t have to chase at the open. The market will present a good opportunity later…you’re not missing anything that can’t be made up. So, manage your risk.
The trend remains bullish, with all 3 major indices sitting at all-time highs. Keep in mind that long-term trading success has never come from betting on a reversal. So, remember, the trend is our friend. Focus on your trade rules and on managing the things you can control. And that should include 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.
Ed
Swing Trade Ideas for your consideration and watchlist: FCEL, M, QS, BTBT, BB, BMY, NKE, TDOC, XLV, CHWY. 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.
🎯 DickCarp: 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
|607% in just 24 months |
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.
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
AMZN and APPL disappoint, Eurozone inflation spikes to a 13 year high, and U.S. Treasury yield surged in early Friday trading, providing the first twinge of uncertainty in this robust earnings fueled rally. Though signs are emerging of a global economic slowdown, I would not expect the bulls to give up easily. I would not be surprised to see some end of window dressing to close the October strong. Next week could bring uncertainty as we wait for the FOMC taper decision and find out if they will begin fighting inflation. Should the bears gain control today, look for a test of price support levels that are unfortunately painfully lower.
Asian markets close the day mixed as Apple supplier stocks suffered losses after earnings. European markets trade red across the board this morning, with inflation hitting the highest level since 2008. U.S. futures point to modest declines this morning ahead of earnings data and a reading on Personal incomes and Consumer Sentiment.
Economic Calendar
Earnings Calendar
We get a little break in the rapid pace of earnings this week with 100 companies listed on the calendar. Notable reports include ABBV, AON, B, BAH, CHTR, CVX, FTS, LHX, LYB, NWL, PSX, RCL, SJR, WPC, GWW, WY, & WETF.
News and Technicals’
Treasury Secretary Janet Yellen told CNBC on Friday that the administration’s infrastructure spending proposal will lower inflation when it is increasing rapidly. Speaking from Rome, she insisted that “what this package will do is lower some of the most important costs, what they pay for health care, for child care. So it’s anti-inflationary in that sense as well.” Her remarks come with growth slowing and inflation rising, mainly due to major supply chain issues that she expects to be resolved. However, President Joe Biden unveiled a $1.75 trillion framework for his signature climate and social spending bill. Initial signs indicate that neither progressives in the House nor three key senators are ready to commit to backing the plan in its current form. Initial signs indicate that neither progressives in the House nor three key senators are ready to commit to backing the plan in its current form. The name change, which was announced at the Facebook Connect augmented and virtual reality conference, reflects the company’s growing ambitions beyond social media. The name change, which was announced at the Facebook Connect augmented and virtual reality conference, reflects the company’s growing ambitions beyond social media. Headline inflation on Friday came in at 4.1% for this month, according to preliminary data from Europe’s statistics office Eurostat. This was the highest level since July 2008, according to Reuters data, and was ahead of a consensus forecast of 3.7%. September’s figure had come in at 3.4%.
The 10-year Treasury yield surged three basis points to 1.6049%, and the 30-year jumped more than four basis points to 2.0076% in early Friday trading. Disappointing results from AMZN and APPL seem to have dampened the earnings session euphoria slightly, but with today being the last trading day of October, I would not expect the bulls to give up this bull run easily. I would not be surprised to see a little end-of-month window dressing to close the month strong. However, should the bears gain the upper hand, selling could come in strong with price support levels painfully lower. Next week we will turn our attention to inflation and what the FOMC plans to combat the impacts. To taper or not to taper is the question and how the market might react to that news. With the Eurozone facing its highest inflationary rate since 2008 and the Chinese economy struggling, clues are developing a global market slowdown. Again, I’m not predicting a selloff is coming, but we should prepare for the possibility after the extreme rally.
Earnings continue to be the market driver as a strong group of reports overcame very disappointing Q3 GDP numbers. As a result, markets gapped higher at the open and then had some follow-through the first hour of the day. This died into a sideways grind in all 3 major indices and then a late-day rally took all 3 out near the highs of the day. The DIA printed a beautiful Bullish Harami that bounced up off the 8ema, but all 3 of the major indices had strong, white bullish candles. The SPY and QQQ both closed at new all-time high closes. On the day, SPY gain 0.98%, DIA gained 0.65%, and QQQ gained 1.09%. The VXX fell 3% to 21.27 and T2122 spiked to the top of the mid-range at 73.68. 10-year bond yields rose to 1.575% and Oil (WTI) rebounded hard after being down 1.5% in the premarket to close up 0.62% at $83.17/barrel.
During the day, FB announced the name it has chosen for the name change that they announced during their Q3 earnings report Monday. The name will be “Meta” and the company will begin trading under the ticker MVRS on December 1. The name change is similar to Google, who became Alphabet years ago. The move reflects a FB shift in emphasis away from social media and toward what it believes is the next major trend, “virtual reality.” This is the reason the name was announced at a VR event.
After hours, AMZN posted terrible numbers, missing badly on both earnings and also coming in $1 billion light on revenue. The company also lowered guidance for Q4. The other big dog name reporting after the close was AAPL, which beat on earnings but missed on revenue. Elsewhere, TEAM, GILD, DXCM, RSG, AJG, WDC, and DVA all beat on both lines. SBUX and FTV missed on revenue, but beat on earnings. SGEN missed on earnings, but beat on revenue. SYK followed AMZN’s lead and missed on both lines.
This morning Treasury Sec. Yellen is touting the Democratic $1.75 trillion spending agreement as being “anti-inflationary.” However, moments after the agreement had been “reached,” House Progressive Democrats said they would not vote for it unless other bills are voted upon at the same time. Elsewhere, the final earnings of the week continue to roll in. CHTR, AON, CL, CERN, CBOE, NWL, XOM, PSX, and CHD all beat on both lines. It is worth noting that both XOM and PSX absolutely crushed earnings estimates. So far today, only LYB (missing on earnings, but beating on revenue) and WY and LHX (both beating on earnings, but missing on revenue) have any red on the report cards art all.
Overnight, Asian markets mixed, but leaned to the red side. Shenzhen (+1.45%), Indonesia (+1.03%), and Shanghai (+0.82%) led the gainers. Meanwhile, Australia (-1.44%), South Korea (-1.29%), and India (-1.05%) paced the losses. In Europe, stocks are almost exclusively down at mid-day. Only a slightly green Belgium and Norway are preventing a red sweep. The FTSE (-0.18%), DAX (-0.79%), and DAD (-0.35%) are typical of the continent in early afternoon trading. As of 7:30 am, US Futures are pointing to a red open, led by Tech. The DIA is implying a -0.10% open, the SPY implies a -0.48% open, and the QQQ is implying a -0.87% open after AMZN missed badly and AAPL missed on revenue. 10-year bond yields are up in early trading and Oil is off slightly.
The major economic news scheduled for release on Friday is limited to Sept. PCE Price Index, Sept. Personal Spending, and Q3 Employment Cost Index (all at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am). Major earnings reports scheduled for the day include ABBV, AON, BAH, CRI, CERN, CHTR, CVX, CHD, CL, XOM, FTS, FMCC, HUN, IMO, LHX, LAZ, LYB, NWL, PSX, PNM, POR, RCL, SJR, GWW, and WY before the open. There are no reports scheduled for after the close.
The bad AMZN miss (and AAPL miss on revenue) is going to color the action in the tech sector this morning. However, overall, the vast majority of earnings have been coming in strong and most of the major earnings reports are behind us after this morning. So, be prepared for some rotation as fear may drive traders away from FANGMAN names and toward later-cycle plays. Stay nimble and remember that it’s Friday…payday…and time to prepare your portfolio for the weekend (and end of the month).
The trend remains bullish in all 3 major indices, with the two broader indices sitting at all-time highs and the Dow just inches away. Keep in mind that long-term trading success has never come from betting on a reversal. So, remember, the trend is our friend. So, focus on your trade rules and on managing the things you can control. And that should include 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.
Ed
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.
🎯 DickCarp: 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
|607% in just 24 months |
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.
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
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 4th 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.
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.
Ed
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.
🎯 DickCarp: 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
|607% in just 24 months |
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.
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
