Futures point to another gap up bullish open as the Tokyo Olympics begin under a state of emergency. Infection rates topped 56,000 here in the U.S. yesterday, with the 3rd straight day over 50K. However, though there has been a noticeable decline in volume, the bulls appear undeterred with new record levels within striking distance. If we have the ability to ignore inflationary pressures and rising jobless claims, don’t bother us with all those delta variant stories we have stocks to buy! Stay with the trend but stay focused as we approach overhead resistance just in case the bulls run stumbles.
Asian markets traded mixed overnight, with tech falling due to China’s regulatory fear. European markets advance this morning, keying off earnings results. Though we struggled to gain traction during the day yesterday, the overnight futures are once again pushing for a bullish gap up open to close out this volatile week of price action.
Economic Calendar
Earnings Calendar
We have a little slower day on the Friday earnings calendar with 41 companies listed, but a large number of them are unconfirmed. Notable reports include AXP, HON, KMB, NEE, RF, & SLB.
News & Technicals’
The Tokyo Olympics kick off today under a state of emergency, with spectators banded, resignations from sexist remarks, and a bear near a stadium used for matches. Here in the U.S., the new infections topped 56,000 yesterday, with three days in a row over 50k. According to the CDC, they are considering masking requirements but say at this point, those vaccinated are okay without masks. They went on to say the delta variant is one of the most infectious respiratory diseases seen by experts. In its annual report, the IMF said the Fed must carefully communicate its thinking of the eventual withdrawal of the easy monetary policies. They raised concerns that higher U.S. interest rates will drain capital flows from emerging markets at a critical time. Hmmm, why is IMF worried about interest rates when our Fed says inflation is transitory?
Another bullish day as indexes rallies back toward resistance highs with possible new records just around the corner. Unfortunately, as indexes stretch up, there has been a noticeable decline in volume, and the Absolute Breadth Index continues to show a struggle with momentum. In just three trading days, the Dow up more than 1000 points from the Monday low, increasing the danger if the market should stumble. Inflationary pressures, increasing jobless numbers, and the rapidly rising infection rates are just a few of the possible stumbling blocks placed in the path of this bull run. Stay with the trend but remain focused to avoid complacency. This morning the 10-year Treasury ticked up to 1.281%, and the 30-year rose to 1.917% ahead of PMI.
Thursday was another win for the bulls as we saw a small gap higher in the SPY and QQQ followed by the bulls controlling action. Large-cap indices were more undecided, both closing as Doji-type candles, but the QQQ was strong closing as a Marubozu (shaved head) candle at a new all-time high close. On the day, QQQ gained 0.66%, SPY gained 0.23%, and DIA gained 0.08%. The VXX rose slightly to 30.47 and T2122 fell back to the mid-range at 56.60. 10-year bond yields fell to 1.263% and Oil (WTI) gained almost 2% to $71.69/barrel.
During the day, major Internet outages (caused by AKAM equipment running in the AMZN AWS services) took many brokers and major business websites offline for over an hour. Interestingly, it was the big tech names, led by AMZN, that buoyed markets all day long. This was the third major Internet outage in the last few months.
After the close, INTC, TWTR, COFO, CE, and RHI all posted beats on both lines. VRSN beat on revenue but missed on earnings. And FE beat on earnings but missed on revenue. Overall, another very strong day of earnings reports. However, INTC also guided much lower for Q3 (forecasting 55% margins vs. 59.2% in Q2), citing supply constraints.
So far this morning, AXP, HON, RF, ROP, and SLB all reported beats on both lines. NEE beat on earnings but came up just short on revenue. However, KMB stood out as missing estimates on both lines. The bottom line is that earnings remain very strong this quarter. Despite all the talk of inflation, strong profit margins indicate that most of the major companies retain are able to pass along more than the cost increases they are experiencing.
Overnight, Asian markets were mixed. China paced the losses with Shenzhen down 1.53% and Hong Kong down 1.45%. Gains were modest with Japan (+0.58%) leading the way. In Europe, Markets are green across the board with the lone exception of Russia (-0.29%). The FTSE (+0.74%), DAX (+0.86%), and CAC (+0.95%) are typical for the continent, but a few of the smaller exchanges show gains over 1%. As of 7:30 am, US Futures are pointing to a green open. The DIA is implying a +0.48% open, the SPY implying a +0.42% open, and the QQQ implying a +0.39% open. The dollar is up this morning while 10-year bond yields are unchanged and commodities are generally lower early.
The major economic news scheduled for release on Friday is limited to Mfg. PMI and Services PMI (both at 9:45 am). The major earnings reports scheduled for the day include AIMC, AXP, GNTX, HON, KMB, NEE, RF. ROP, and SLB before the open. Then after the close, there are no scheduled reports.
Even with a brutal day to start the week, the bulls have clearly been in charge for the rest of the week. And it looks like we’ll see yet another green gap at the open today. So the momentum remains to the upside. However, we seem to be feeling undecided at least in the large-caps as the tech-led, lockdown-type market conditions are back in force. Be wary of “gap and fade” volatility. We are at or near all-time highs and there should be no hurry to chase the gap.
Manage your current positions first and take your time early. The first few minutes of the day is very likely not the key to your success, but it is the time of maximum volatility as overnight orders clear and the big boys start putting down their real bets. So, do not chase, stick with your trading rules, and maintain discipline. Success comes from your consistency. This means focusing on the process and repeatedly taking those singles and doubles. Limiting losses and taking profits when we get them is the key. Also, remember this is Friday. Don’t forget to pay yourself and prepare for the 2-day new cycle when markets are closed.
Ed
Swing Trade Ideas for your consideration and watchlist: TBIO, VLRS, AAP, BRKR, LSI, EW, SPLK. 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 fears that triggered Monday’s selloff appear completely forgotten as most earnings beat estimates. Traders and investors alike also seem unconcerned about the lofty valuations as indexes once again push toward record levels. So let’s keep the party going but never forget just how quickly sentiment can shift so avoid complacency and overtrading. As we approach price resistance highs in the indexes, we can’t rule out the possibility of entrenched bears that can create pop and drop patterns or even complete reversals should they see an opportunity. Plan carefully!
Asian markets rebound, led by Hong Kong surging 1.83% as China blocks pandemic origin investigations. European markets trade green across the board this morning, waiting on the ECB decision. Ahead of jobless claims, housing numbers, and a plethora of earnings data, U.S. futures point to bullish open to test price resistance levels. So hang on tight as the rollercoaster ride continues.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have nearly 90 companies listed, with several unconfirmed. Notable reports include ABT, ALK, AAL, T, BIIB, BX, SAM, COF, CLF, CROX, DHI, DHR, TACO, DPZ, DOW, FITB, FCX, INTC, MMC, NEM, NUE, DGX, SNAP, SKX, LUV, TWTR, & UNP.
News & Technicals’
As infection rates rise, local officials across the U.S. are starting to reimpose masking rules. According to reports, the travel industry is looking at uncertainty with infection rates rebounding, threatening summer tourism. In a related report, China has rejected the plan to study the origin of the pandemic with mounting evidence it was a lab leak in Wuhan. Additionally, Indonesia reported the highest number of new cases globally despite emergency measures to curb the spread. Ahead of the latest reading on jobless claims, Treasury yields continue to decline this morning. The 10-year dipped to 1.275%, while the 10-year fell to 1.924%.
As most earnings beat estimates, the bulls continue surging back unconcerned about the lofty valuations. Worries that created Monday’s selloff seem totally forgotten, even as infection rates with indexes recovering. Now the question is can they push right on through the price resistance highs to set new records? The buying frenzy would suggest, yes. However, with price volatility high and prices stretched well off-price supports, the risk is high should the market suddenly care about the pandemic resurgence. Plan your risk with care, keeping in mind just how emotional the market has become. Be prepared with a plan to protect your capital should the sentiment. As we test resistance levels, take some profits or consider hedging positions if the bears happen to mount a defense. The bulls are clearly in control, but price volatility is making for a risky environment.
On Wednesday large caps gapped slightly higher and the QQQ gapped slightly lower. However, in a slow grinding way, it was the bull’s day again after the open. This left all 3 major indices with nice white candles that closed very near the highs. On the day, SPY gained 0.80%, DIA gained 0.84%, and QQQ gained 0.77%. The VXX fell more than 6% to 29.94 and T2122 moved into the overbought territory at 84.00. 10-year bond yields jumped back up to 1.295% and Oil (WTI) gained almost 4.5%, the largest gain in 3 months, back up to $70.20/barrel. The dollar was down on the day and commodities were generally higher.
During the day cryptocurrencies rallied. This came after both Elon Musk (CEO of TSLA) and Jack Dorsey (CEO of TWTR) endorsed cryptocurrencies and talked up a bullish case for them. Musk said that SPCE owns Bitcoin (markets already knew that TSLA still owns some of the cryptocurrency) and Dorsey went so far as to “hope” Bitcoin can bring world peace. On the day Bitcoin closed back above $32,000.
After the close, GM announced that it will halt most of its full-size pickup production in North America due to the ongoing chip shortage. The shortage is expected to cost the company $110 billion in revenue for 2021. On the same issue, TXN pointed to the issue as well when it gave its revenue forecast going forward.
So far this morning, AAL, ABT, DHR, T, MMC, BIIB, DOW, DHI, FTB, DGX, ALLE, and SNA have all reported beats on both the top and bottom lines. NEW and AEP beat on earnings but came up shy on the revenue line. Finally, LUV beat on the revenue line but missed on earnings. So, as of now, it has been another very strong day of earnings reports.
Overnight, Asian markets were green across the board. Hong Kong (+1.83%), Indonesia (+1.78%), and Singapore (+1.29%) paced the gains. This came as the larger exchanges lagged, but still gained half of a percent or more. In Europe, we see a similar story taking shape with green across the board. The DAX (+0.89%) and CAC (+0.82%) are typical of the continent. However, the FTSE (+0.10%) lags. As of 7:30 am, US Futures are pointing to an open just on the green side of flat. The DIA is implying a +0.13% open, the SPY implying a +0.14% open, and the QQQ implying a +0.18% open. The dollar is a bit lower this morning and 10-year bond yields are up slightly to 1.30%.
The major economic news scheduled for release on Thursday is limited to Weekly Initial Jobless Claims (8:30 am) and June Existing Home Sales (10 am). The major earnings reports scheduled for the day include ABB, ABT, ALK, ALLE, AAL, AEP, T, BIIB, BX, BCO, CLF, CROX, DHI, DHR, DPZ, DOW, FITB, FAF, FCX, GPC, HZO, MMC, NEM, NUE, ORI, POOL, BPOP, DGX, RS, SNA, SON, LUV, TPH, UNP, and WSO before the open. Then after the close, SAM, COF, CSL, CE, FE, INTC, RNR, RHI, SKX, SNAP, SIVB, TWTR, and WRB report.
The bulls showed strong follow-through on Wednesday. However, some resistance remains overhead. In addition, fear about the Delta variant and chip shortages are building again. On the other hand, earnings continue very strong and that has to be good news on the bullish side. In other words, the bulls have very short-term control, but the bullish trend has not been reestablished yet after putting in a lower-low. And fears tracing back to the pandemic have not been put completely to rest yet. Just, be cautious. Volatility and uncertainty make uncomfortable companions for traders.
Once again, remember that you don’t have to trade every day. Trading a volatile market is difficult at best. So, manage your current positions first and if you do trade, stay nimble and cautious. Do not chase, stick with your trading rules, and maintain discipline. Trading success is all about consistency and that means taking singles and doubles. Limiting losses and taking profits when we get them is the key. Just keep piling up those trading goals met. Eventually, that will compound to a huge gain and in the meantime, you will sleep better.
Ed
Swing Trade Ideas for your consideration and watchlist: ORCL, PTON, BCRX, T, MSFT, LI DQ. 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 triggered a tremendous short squeeze rally yesterday as this all-or-nothing emotional market flips sentiment as quickly as turning a light on and off! What happens next as we ramp earnings is anyone’s guess while the WHO warns of another global pandemic wave on the way. So be careful as we approach price resistance levels as traders rush back into this high-risk price action environment. Don’t rule out the possibility of a pop and drop from this short-term extended condition.
Overnight Asian markets traded mixed with modest gains and loss in reaction to the U.S. bullishness. European markets are decidedly bullish this morning, citing solid earnings as travel stocks soar 4%. Ahead of earnings data, the bulls are looking to extend yesterday’s gains. So, fasten that seat belt tight as this rollercoaster ride of enormous price swings continues.
Economic Calendar
Earnings Calendar
On the hump day earnings calendar, we have nearly 70 companies listed as the earnings season ramps up. Notable reports include JNJ, ANTM, ASML, KO, CMA, CCI, CSK, DFS, EFX, HOG, KMI, KMX, LVS, NDAQ, STX, FTI, THC, TXN, VZ, & WHR.
News & Technicals’
The WHO is warning this morning that the world is going into the early stages of another wave of Covid while addressing the International Olympic Committee. Benefiting from the pandemic, JNJ expects to sell $2.5 billion doses of their vaccine worldwide this year. As a result of the pandemic, life expectancy in the U.S. declined for the first time since World War 2. Netflix misses on earnings and expects streaming growth to decline in the coming quarter. To combat the decline, the company will, for the first time, offer gaming as part of the streaming service. Debit in China is becoming a concern as the total number of defaulted corporate bonds grew to 62.59 billion yuan in the first half of this year.
The selloff on Monday was blamed on the fear that the delta variant would impact the market recovery. The news on the front didn’t change overnight, but Tuesday sentiment suddenly shifted again, triggering a tremendous short squeeze rally. It’s all but impossible to matain an edge in this highly emotional everything-or-nothing price volatility and wild speculation. That said, the bulls are without question hungry for risk as we zoom back toward price resistance levels in the index charts. Toss earnings volatility into the mix, and anything is possible. So plan your risk carefully and remember just how quickly market sentiment can shift. The VIX remains elevated, and with the huge swings in the last couple of days, the risk is high, so avoid overtrading and guard against complacency.
The bulls turned the tables on the bears Tuesday. Whether it was a short squeeze or a reversal, markets put in a small gap higher, but then kicked into overdrive, following through on the rally that actually started the last half hour of Monday. This wiped out most of the losses from the previous day and left us with strong bullish candles in all 3 major indices. However, just like Monday, markets changed direction the last 30 minutes of the day, this time selling off. On the day, SPY gained 1.43%, DIA gained 1.53%, and QQQ gained 1.16%. The VXX fell almost 9% to 31.97 and T2122 spiked from extremely oversold all the way up near the overbought territory at 76.19. 10-year bond yields jumped back up to 1.215% and Oil (WTI) climbed 1.36% to $67.32.
JNJ made news a couple of times during the day. First, it spiked on leaked news that a settlement will be announced Wednesday between JNJ and 2 drug distributors and most of the plaintiffs in the thousands of opioid lawsuits totaling $26 billion in requested damages. (It is reported that 40 states will agree to the settlement. This includes NY, whose Attorney General tweeted that the state would get over $1 billion from the settlement.) Secondly, late in the day, Bloomberg reported confirmation to a story from the weekend. Apparently, JNJ has hired a law firm to organize the “Texas 2-Step” spinoff of Johnson Baby Powder into a separate company that will then immediately file bankruptcy. This will shift liability for lawsuits related to the product containing carcinogens onto a bankrupt company and save JNJ potentially billions in damages.
After the close NFLX reported a beat on the revenue line, but missed on earnings. It also beat on net subscriber growth but lowered guidance for Q3. Meanwhile, CMG beat on both lines, with a significant beat on earnings ($7.46/share vs. $6.50/share est.). Finally, while UAL lost money, it lost less than expected and therefore, delivered a beat on both lines.
This morning ANTM. KO, HOG, JNJ, VZ and most of the other major earnings reports came in with beats on both the top and bottom line. Many, such as KO, raise full-year guidance as well. For their part, JNJ said it expects over $2.5 billion in Covid-19 vaccine sales in 2021 alone.
Overnight, Asian markets were mixed but leaned to the green side. Shenzhen (+1.34%) and Shanghai (+0.78%) led gainers. Meanwhile, India (-0.76%) paced the losses. In Europe, markets are strongly green across the board so far today. The FTSE (+1.63%), DAX (+0.77%), and CAC (+1.27%) are typical for the continent at this point in the day. As of 7:30 am, US Futures are pointing to a mixed and modest open. The DIA is implying a +0.35% open, the SPY implying a +0.17% open, and the QQQ implying a -0.21% open. 10-year bond yields are up this morning to 1.237% with the dollar slightly stronger and commodities mixed in premarket trading.
The major economic news scheduled for release on Wednesday is limited to Crude Oil Inventories (10:30 am). The major earnings reports scheduled for the day include ANTN, ASML, BKR, KO, CMA, HOG, HCSG, IPG, JNJ, KNX, LAD, MTB, NDAQ, NTRS, NVS, NVR, RCI, SAP, STX, and VZ before the open. Then after the close, CCI, CSX, DFS, EFX, GGG, ICLR, KALU, KMI, LSTR, LVS, OMF, PLXS, SEIC, STC, FTI, THC, TXN, UFPI, and WHR report.
The bulls clearly showed up with strength Tuesday. However, that give back the last 30 minutes of the day certainly made it feel like much of the strength came from short-covering, with the squeezers taking profit at day end after sticking it to the squeezees all day. Technically, we filled the gaps in the QQQ and SPY, but potential resistance remains overhead in the form of prior trend lines and previous highs/lows. So, be careful trading in a still-undecided and volatile market.
Remember that you don’t have to trade every day. Trading a volatile market is difficult at best. So, manage your current positions first and if you do trade, stay nimble and cautious. Do not chase, stick with your trading rules, and maintain discipline. Trading success is all about consistency and that means taking singles and doubles. Unsettled markets is when we should be playing “small ball,” limiting losses and taking profits when we get them. Just keep piling up those trading goals met.
Ed
Swing Trade Ideas for your consideration and watchlist: NOK, MS, XLV, BCRX, CHHWY, ORCL, HD, PTON, UVXY. 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
Yesterday’s selloff was a reminder that bears still exist and how quickly sentiment can shift with these lofty company valuations. Though the SPY and the QQQ experienced substantial selling, there is no significant technical damage. However, that is not the case with DIA, as it joined the IWM below the 50-day average. We now have overhead price resistance in all the index charts, and with the VIX above a 22 handle, expect volatile price action to challenge even the most experienced traders. With valuations so high, inflationary pressures on the rise amid earnings season, the threat of a Covid rebound will be a lot for the market to sort out.
Asian markets closed overnight red across the board as China keeps the benchmark lending rate unchanged. European markets are trying to rebound this morning, but so far, the gains are modest as traders worry about more Covid impacts. As earnings events ramp up, U.S. futures point to a substantial gap up as we bounce back. The question is, will it be a sustained relief rally or a short-lived dead cat bounce. Buckle up the road ahead could be pretty challenging.
Economic Calendar
Earnings Calendar
The number of earnings ramp-up with more than 30 companies listed stepping up to report quarterly results. Notable reports include NFLX, ALLY, CMG, CNI, HCA, CFG, HAL, ISRG, KEY, OMC, PM, UAL, TRV, UBS, & SYF.
New & Technicals’
Bitcoin holders are squealing from the feeling as the popular crypto drops below $30,000, wiping away about $100 billion in valuation. Another billionaire is making a quick trip to space today as Jeff Bezos prepares for launch in a flight expected to take about 11 minutes to complete. The United States is asking folks to avoid travel to the UK due to the rising covid numbers. Warnings from the CDC and the State Department reached Level 4, which is the highest warning level.
Yesterday was a painful reminder that bears still exist and that complacency can damage retail trader’s accounts. The DIA joined the IWM below their 50-day moving average, suffering the brunt of the technical damage. The SPY tested its 50-day but found buyers by the end of the day to hold it as support. Though the selling was painful for big tech, the QQQ remains significantly elevated its 50-day averages maintaining the title of the strongest of the indexes. However, as the market works for a bounce this morning, we have created substantial overhead price resistance levels. With earnings numbers on the rise and the VIX elevated above a 22 handle, expect price action to be challenging and volatile. Significant morning gaps, quick intraday whipsaws, and full-on reversals are likely as the market struggles to balance high valuations and inflationary pressures as Covid increases threaten the recovery. Plan your risk carefully and remain alert and agile as the market tries to sort out the details.
Monday was a brutal day unless you were a bear. A gap down of well in excess of 1% led to follow-through on the large caps and then a sideways grind along the bottom in all 3 major indices. However, a late-day rally across the board did pull us up off the lows. This left us with cap-down Spinning Top (indecisive) candles in all 3 major indices. On the day, SPY lost 1.44%, DIA lost 1.94%, and QQQ lost 0.82%. The VXX gained 14% to 34.89 and T2122 dropped deep into the oversold territory at 1.93. 10-year bond yields were absolutely hammered (as buyers flooded into bonds), falling to 1.194% while Oil (WTI) got crushed by 7.4% to $66.51.
After hours, IBM beat on both the top and bottom lines. The company reported its strongest revenue growth in 3 years. JBHT reported similar beats on both lines. However, PPG missed on earnings while beating on the revenue front.
In other stock news, GM confirmed it will offer a third electric truck. This one will be a full-sized electric pickup and will sell under the “GMC Sierra” line. AMC also announced it is adding to its Los Angeles region market presence by taking over two existing theatre locations (a 14-screen and an 18-screen) in the city. And, of course, AMZN CEO Jeff Bezos heads to space this morning with a launch 9 am eastern launch.
Yesterday Treasury Sec. Yellen told regulators they needed to act quickly to control cryptocurrencies and decide how a “dollar-pegged stablecoin” would be regulated. Then this morning cryptocurrencies took another hit as Bitcoin slipped below $30,000 at 6:30 am. The other major cryptocurrencies also took a hit in sympathy.
Overnight, Asian markets were red again, but with a little less energy today. Taiwan (-1.46%), Singapore (-1.30%), and Thailand (-1.10%) paced the losses. There were no appreciable gains in the region. In Europe, markets are mixed on modest trading so far Tuesday. The FTSE (+0.13%), DAX (-0.13%), and CAC (+0.25%) are typical of indecision across the continent. The only significant move has been by Norway (+1.22%) as of mid-day. At 7:30 am, US Futures are pointing to a modest gap higher. The DIA is implying a +0.57% open, the SPY implying a +0.50% open, and the QQQ implying a + 0.52% open. The dollar is also slightly higher this morning, while 10-year bond yields are down just a bit to 1.184% (but recovering from overnight lows) and commodities are showing modest strength this morning.
The major economic news scheduled for release on Tuesday is limited to June Building Permits and June Housing Starts (both at 8:30 am). The major earnings reports scheduled for the day include VLVLY, ALLY, CFG, DOV, HAL, HCA, KEY, MAN, OMC, PM, SBNY, SYF, SNV, TRV, and UBS before the open. Then, after the close, AIR, AGR, CNI, CMG, IBKR, ISRG, NFLX, RXN, RUSHA, SNBR, and UAL report.
The fear of a Covid resurgence economic downturn, coupled with inflation forcing the Fed’s hand to stop easing remains the nightmare scenario on Wall Street. On the financial networks this morning, the talk is of companies possibly starting to lower or being afraid to give forward guidance due to the Delta variant. However, yesterday’s lower wicks and today’s premarket green indicate the bulls have not fled the market yet. To put it in a broader context, all three major indices have only pulled back about 3% from their all-time high closes. So, as bad as yesterday was for the bulls, it is hardly a “the end is near” situation yet.
The bullish trends are broken in the major indices. However, we do not have a new bearish trend in place yet. So, be vary careful. Trading an undecided market is difficult at best. Manage your current positions first and remember that you don’t have to trade every day. If we do get a Bearish trend, remember that those moves tend to happen fast and be over quick. So, do not chase and remain nimble. Stick with your trading rules, don’t bail on your trade plans, and maintain discipline. Trading success is all about consistency and that means taking singles and doubles as well as cutting your losses short.
Ed
Swing Trade Ideas for your consideration and watchlist: LLY, XSPA, BNGO, PTON, EBAY, CHWY, OEG. 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
Friday was the bears day. A modest gap higher was met by immediate and all-day selling as options prepared to expire. This left us with ugly black candles in all 3 major indices that closed near the lows of the day. The DIA printed a Bearish Engulfing candle, the SPY printed a Bearish Engulfing of a Doji, and the QQQ just printed an ugly black candle. On the day, SPY lost 0.78%, QQQ lost 0.81%, and DIA lost 0.91%. The VXX rose 4% to 30.55 and T2122 remains in the overbought territory at 17.03. The 10-year bond yield was flat at 1.30% and Oil (WTI) fell three-tenths of a percent to $71.45/barrel.
During the day Friday, the Treasury Department announced that Sec. Yellen will meet with the President’s Working Group to discuss “stablecoins.” This meeting will include Fed. Chair Powell, the FDIC, Office of the Comptroller and various US Regulators. The meeting will essentially discuss how a US digital currency can be pegged to the dollar and how other cryptocurrencies can be controlled and made less volatile. Ostensibly, the idea is to mitigate market risks (to companies) caused by volatile cryptocurrencies like Bitcoin, Dogecoin, and Ethereum. V has already announced they will support payments made using a dollar-pegged stablecoin.
On Sunday, Reuters reported that JNJ is considering spinning off its “Johnson’s Baby Powder” business that would then immediately seek bankruptcy. The idea is to offload potentially massive litigation liability related to JNJ talc business (the Supreme Court refused to hear the JNJ appeal to a $2 billion finding in one case already) amid claims the products contained asbestos and other carcinogens. This strategy has been used before to hide from liability, in fact it has been used so often it was given the name “the Texas Two-Step Bankruptcy.”
OPEC+ held a short-notice meeting this weekend amid agreement on increasing the production limits of various members. The deal that passed will end oil production limits by September 2022, while immediately increasing production by 400,000 barrel per day per month. The IEA estimates there will be a 1.5 million barrel per day deficit during the second half of 2021. This would indicate a deficit (and likely elevated prices the rest of 2021.)
Overnight, Asian markets were red almost across the board. However, the results were very mixed. Shanghai (-0.01%) and Malaysia (-0.16%) joined Shenzhen (+0.14%) on the better side of performance. Meanwhile, Hong Kong (-1.84%), Singapore (-1.30%), and Japan (-1.25%) paced the low end of performance. In Europe, markets are down sharply across the board as of mid-day. The FTSE (-2.01%), DAX (-2.15%), and CAC (-2.17%) are typical of the continent but the range is wide from Athens (-3.43%) to Denmark (-1.21%). As of 7:30 am, US Futures are pointing to a gap lower. The DIA is implying a -1.02% open, the SPY is implying a -0.83% open, and the QQQ is implying a -0.62% open.
There is no major economic news scheduled for release on Monday. The major earnings reports scheduled for the day include AN, CALM, PLD, and TSCO before the open. Then, after the close, CCK, IBM, JBHT, PPG, STLD, and ZION report.
There was a rise in Covid cases in every state over the last week (by 50% on average), a reintroduction of masking mandates in some locations, and continued disdain for vaccinations in some populations. (Notably, the contempt toward vaccination is more prevalent in red states, as there is a decided political view of mitigation in the country.) So, markets are looking bleak to start the week, hit with the twin fears of inflation on one side and lower economic activity (driven by Covid) on the other. This looks to be leading to a clear break of trend on a Monday morning.
With the longer-term bullish trend broken in the QQQ and being tested in both large-cap indices, it’s time to press pause and rethink. Manage your current positions first and remember that you don’t have to trade every day. Bearish moves tend to happen fast and be over quick. So, do not chase and remain nimble. Stick to your trading rules, don’t bail on your trade plans, and maintain your discipline. Remember, success is all about consistency and at a time of market direction change that can mean taking smaller lumps to avoid big ones.
Ed
Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 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
Yellen says we should expect several months of rapidly rising inflation. At the same time, Powell defends the FOMC easy money policies, and the bond king, Jeffery Gundlach, says the U.S. Dollar is doomed in the long term due to deficits in budget and trade. That said, the trends in the DIA, SPY, and QQQ remain bullish, while the Absolute Breadth Index bounces along the bottom. Retail sales numbers will be in focus this morning and remember we have an FOMC rate decision next week as earnings ramp up.
Asian markets traded mixed but mostly lower to end their trading week as the Bank of Japan holds a steady monetary policy. European market trade cautiously mixed this morning while U.S. rally off overnight lows suggesting a bullish open across the board ahead of retail sale data. I wish you all a great day of trading profits and a wonderful weekend!
Economic Calendar
Economic Calendar
We have just nine verified reports on the Friday earnings calendar. Notable reports include SCHW, KSU, & STT.
News & Technicals’
Janet Yellen says she expects the U.S. economy will see several more months of rapidly rising inflation. However, she goes on to say it will ultimately fall back to more normal levels. Some analysts now suggest we will enter a longer-term deflationary market cycle after the inflationary surge. That sentiment would seem to support Jeffrey Gundlach’s ideas, the so-called bond king, which yesterday said the U.S. dollar is “doomed” over the long term. The Doubleline Capital CEO went on to say,” the dollar is going to fall pretty substantially” due to increasing U.S. trade and budget deficits. Treasury yields rose Friday morning, with the 10-year up three basis points to 1.329% and the 30-year climbing 3.9 basis points to 1.958%.
Although we saw a little selling in the tech sector pulling back, we experienced no technical damage across the DIA, SPY, and QQQ indexes. Unfortunately, the same can not be said about the IWM creating a lower low after failing at its 50-day average. Futures we slightly lower overnight after Yellen’s comments that she expects several more months of rapid inflation. That being the case, Jerome Powell defended the easy money policies of the FOMC and planned to keep the pedal to the metal pumping $120 Billion per month. As you plan forward, keep in mind an FOMC rate decision is on for next Wednesday. Until then, let the good times roll, staying with the uptrend while avoiding complacency.
