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Divergence and Morning Internet Outage

June 8, 2021 by Ed Carter

The market opened just South of flat on Monday. After a morning selloff, markets ground sideways most of the day in the large-caps with the SPY and QQQ putting in a small rally the last hour. This left a Doji-Harami in the SPY, a Bearish Engulfing in the DIA and a white candle that broke out of the last week’s range in the QQQ. However, the big divergence was with small-caps (IWM) that rallied most of the day, closing not far from the highs and gaining 1.34%. Meanwhile, on the day the SPY lost 0.08%, DIA lost 0.38%, and QQQ gained 0.30%. The VXX was down almost 2% to 32.77 and T2122 remains in the overbought territory at 84.59. 10-year bond yields fell a bit more to 1.569% and Oil (WTI) was down six-tenths of a percent to $69.20/barrel.

During the day, AAPL announced new operating systems for the Mac, iPad, iPhone, and Apple Watch. Meanwhile GOOG agreed to a $268 million settlement with the EU over antitrust activities. KHC also announced they have begun buying back up to $2.8 billion of their own debt (bonds) with offers that expire June 11. On the other end of the debt scale, MSTR announced that it is selling bonds (borrowing) later in the week in order to fund the purchase of $400 million more of Bitcoin. In addition, after a 9.5% gap up and a 16% additional range, AMC continued its Reddit-fueled climb, closing up 14.8%. However, the big news of Monday was BIIB, which surged 60% before pulling back to close up 38% on the FDA approval of their Alzheimer’s Disease drug.

Commerce Sec. Raimondo told CNBC that the global semiconductor chip shortage will be a daily challenge for the US economy (including the Auto, computer, and consumer goods industries) for the next year. She noted the Senate is close to approving $52 billion in subsidies for chip manufacturers. However, her outlook is far more optimistic than semiconductor industry analysts that expect the shortages to last well into 2023, based on the long time it takes for manufacturers like TSM, INTC, QCOM, AVGO, MU, NVDA, AMAT, HXSCL, and Samsung to bring additional semiconductor capacity online. (Most capacity has long since been booked through at least 2022 at this point.)

There was a major global internet outage reported early today as FSLY (cloud services provider) went down. This impacted a large chunk of the internet traffic and impacted AMZN, TGT, CNN, Bloomberg, Reddit, Hulu, SPOT, and even the UK government were offline. FSLY says the problem is now fixed, but many sites remain out as of 7 am.

Related to the virus, new US infections continue to fall. The totals rose to 34,227,237 confirmed cases and deaths are now at 612,701. However, the number of new cases is falling again and are back down to an average of 14,317 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 400 per day (again, the lowest number since March 2020). CRM CEO Benioff said Monday that he expects at least half of the company’s employees to work from home after the pandemic. (This is up from 20% of the employees that worked from home in 2019.) Globally, the numbers rose to 174,429,426 confirmed cases and the confirmed deaths are now at 3,753,525 deaths. The trends are better again as we have seen a slowing in the rate of increase now that India has passed its peaked. The world’s average new cases are falling quickly now, but remain at 412,986 new cases per day. Mortality, which lags, is also falling, but remains at 9,670 new deaths per day.

Overnight, Asian markets were mostly in the red. Indonesia (-1.16%) and Shenzhen (-0.98%) paced the losses while Malaysia (+0.60%) was the only exchange to remain appreciably green. In Europe, markets are mixed but lean toward the green side at this point in the day. The FTSE (+0.25%) and CAC (+0.21%) are modestly green with the DAX (+0.05%) flat as of mid-morning. At 7:30 am, US Futures are also pointing to a mixed and modest open. The QQQ is implying a gap up of 0.39%, but the DIA is implying a -0.06% open and the SPY is implying a +0.09% open at this point.

Major economic news scheduled for Tuesday is limited to April Trade Balance (8:30 am) and April JOLTS /Job Openings (10 am). Major earnings reports on the day include ASO, MOMO, NAV, and THO before the open. Then, after the close, ABM, BEST, and CASY report.

Markets seem to be looking to continue the divergence seen Monday. The SPY appears to be stuck at all-time high resistance, while the DIA looks to have failed its latest test of that all-time high resistance, and yet the QQQ and IWM appear to be trying to follow-through Monday’s breakout of their recent ranges. With no huge news and no big earnings to push markets, we may see the chop and volatility resume. However, keep an eye on that divergence which might, just possibly, signal a rotation back into the high-flying tech sector that led the rally earlier this year.

Follow the trend (the one appropriate for your trading horizon) and respect support and resistance levels (but don’t just assume they will hold). Beyond that, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Consistency is the key to long-term trading success. So, keep hitting those singles and doubles rather than swinging for the fence.

Swing Trade Ideas for your consideration and watchlist: SPCE, JMIA, PLTR, MSFT, TDOC, FB. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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SPY just below record highs!

June 7, 2021 by Doug Campbell

Jobs creation came in less than expected, easing inflationary worries, and closed the week with the SPY just below record highs. Between now and the next FOMC meeting will be the Thursday CPI number that may come in hot according to consensus estimates. All four indexes still have overhead resistance to deal with, but it seems unlikely getting this close to a new record, the institutions will miss that mark if only for the headline. However, don’t be surprised to see choppy price action amid all the meme-stock frenzy as we wait for the CPI reading.

During the night, Asian markets traded mixed as China’s exports missed forecasts. European markets trade modestly bullish across the board this morning. With a light day of earnings and economic data, U.S. futures point to a flat open after bouncing off overnight lows. Be careful overtrading as we test overhead resistance levels in a market struggling with momentum.

Economic Calendar

Earnings Calendar

As we kick off a new week of trading, we have a light day as 2^nd quarter reports wind down with just companies listed on the calendar. Notable reports include GIII, MRVL, SFIX, & MTN.

News & Technicals’

The French Competition Authority fines Google $267 million for abusing its dominant position in online advertising. Google has agreed to end some of its self-preferencing practices as regulators across Europe clamp down on the tech giants. According to Musk’s tweet on Sunday, Tesla canceled the most expensive Model S Plaid Plus that claimed to deliver 520 miles on a full charge. However, the Buffett-supported BYD electric car maker has shipped to Norway with a price tag of $72,418 each. The city of Guangdong, China, is carrying out mass testing and has locked down areas that have reported more than 100 cases in the fast-spreading Delta strain of Covid. Treasury yields are in a wait-and-see mode this morning, waiting on the Thursday CPI number; some worry may come hot. The 10-year ticked slightly higher to 1.578%, while the 30-year drifted slightly south to 2.258%.

The bulls put in a strong performance on Friday but closed the day with the SPY just below record highs. As a result, we begin a new week with all four indexes challenged by overhead resistance. As the 2^nd quarter earings wind down and a light economic calendar begins the week, traders will have to look elsewhere to find inspiration. The meme-stock frenzy could quickly help or hurt the overall market with its wild volatility reminiscent of the 1999 tech frenzy. Tread lightly where company valuations are pushed well beyond reasonable valuations because when it’s over, prices can fall very fast and be fundamentally different overnight. The big news of the week will be the next reading of the CPI on Thursday. Don’t be surprised if we see choppy price action as we wait to find out if this crucial inflation marker comes in as hot as expected.

Trade Wisely,

Doug

Weekend News Lead by Yellen Deal – Talk

June 7, 2021 by Ed Carter

Markets gapped-up Friday as the May Payroll numbers seemed to hit the sweet spot. After that, stocks did a very slow, but steady climb into the last few minutes of the day. This left us with strong white candles in all 3 major indices. On the day, SPY gained 0.91%, DIA gained 0.54%, and QQQ gained 1.70%. The VXX fell over 5% to 33.39 and T2122 climbed back into the overbought territory at 87.62. 10-year bond yields fell to 1.557% and Oil (WTI) rose eight-tenths of a percent to $69.37/barrel.

The big weekend news was the G-7 (US, Canada, France, Germany, Italy, Japan, and the UK) agreeing to back a proposal for corporations to pay a minimum of “at least 15%” tax rate. In addition, the agreement included rules forcing companies with at least a 10% profit margin to pay taxes on at least 20% of the profits earned, in the country where the sale was made. This is a step toward preventing corporate shell games to avoid taxes by moving profits to low-tax haven countries. While these are major steps in the negotiations around digital economy taxation, these measures are still a long way from implementation, perhaps years. Getting sign-off by the G-20 (which includes China, India, Brazil, and Russia among others) is the next step. Key opponents of such digital tax rules include AAPL, GOOG, FB, etc. as well as countries whose business model is “low tax rates to draw in major companies.”

Sunday, Treasury Sec. Yellen told Bloomberg that the US has been fighting inflation and interest rates that are “too low” for a decade. So, she said that slightly higher interest rates would be a good thing, not a bad thing. She (former Fed Chair) said this is also the Fed’s point of view. So, she concluded that President Biden’s $4 trillion spending proposals (which would increase spending $400 billion per year) would be a positive for the economy and society in general.

Related to the virus, new US infections continue to fall. The totals rose to 34,210,782 confirmed cases and deaths are now at 612,366. However, the number of new cases is falling again and are back down to an average of 13,185 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 375 per day (again, the lowest number since March 2020).

Globally, the numbers rose to 1724,092,834 confirmed cases and the confirmed deaths are now at 3,745,093 deaths. The trends are better again as we have seen a slowing in the rate of increase now that India has passed its peaked. The world’s average new cases are falling quickly now, but remain at 418,913 new cases per day. Mortality, which lags, is also falling, but remains at 9,741 new deaths per day.

Overnight, Asian markets were mixed on very modest moves. Singapore (+0.79%), New Zealand (+0.53%), and India (+0.52%) led the gainers. Meanwhile, Malaysia (-0.76%), Hong Kong (-0.45%), and Taiwan (-0.37%) paced the losers. In Europe, markets are mostly green on modest moves so far today. The FTSE (+0.26%), DAX (+0.15%), and CAC (+0.31%) are typical of most of the continent’s exchanges. As of 7:30 am, US Futures are also pointing to a flat open. The DIA is implying a +0.09% open, the SPY implying a -0.04% open, and the QQQ implying a -0.13% open.

There is no major economic news scheduled for Monday. There are no major earnings reports on the day. The only major earnings reports on the day come after the closing bell when MRVL, REVG, SFIX, and MTN report

It seems that markets want to start the week off slow at the open Monday as the bulls chase the record highs, just points away. A lower than expected May Payrolls number Friday helped alleviate inflation fears, but only time will tell if that feeds over into Monday trading. The global tax news, while impactful on major multi-national tax dodgers, is still months or years away. So that proves Yellen’s chops on deal-making, but should not move markets in the short-term. So, just remember we are at the all-time highs, an area that has proved to be resistant before. However, the mid-term and short-term trends are bullish.

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.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Strong dose of Price Volatility

June 4, 2021 by Doug Campbell

We received a strong dose of price volatility yesterday, but there was very little change technically in the index charts by the end of the day. We are still dealing with overhead resistance and possible topping patterns, and at the same time, the bulls remain vigilant defending price support levels. Today the market may pick a direction depending on how we react to the employment situation numbers. Come in strong, and we could finally get the bulls to challenge resistance levels and perhaps set some record highs. Come in hot, and the bears might act up as they worry about the possible changes to FOMC easy money policies. In short, anything is possible!

Overnight Asian markets traded mixed as the RBI keeps interest rates unchanged. Across the pond, European markets trade flat and slightly lower ahead of the U.S. jobs data. This morning stock futures are taking a wait-and-see stance but prepare for just about anything after the number release an hour ahead of the open. Prepare for more volatility as the market reacts.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have a very light day with only 12 companies listed. The only notable report on the day is that from HOFT.

News & Technicals’

AMC is seeking approval to boots it’s stock authorization by 25 million shares laying out its case on a YouTube program. Facebook ran into another antitrust issue with the U.k.’s Competition and Markets Authority. The regulatory agency will investigate whether Facebook is abusing a dominant position in the social media or digital advertising markets through its individual data collection. Elon Musk is at it again, tweeting a meme about a couple breaking up and adding the hashtag Bitcoin and a broken heart emoji. Bitcoin fell 4%, and other cryptocurrencies also sank. How much longer will the SEC allow him to manipulate market prices! U.S. Treasury yields traded slightly higher this morning, with the 10-year ticking up to 1.6267% and the 30-year rose to 2.3024%.

Although we had a lot of price volatility yesterday, technically, there was very little change in the index charts. The bulls defend support levels, and the bears seemed to stand their ground defending overhead price resistance levels. The VIX made no decision, and the T2122 indicator ended the day back in the upper range after the bounce. All eyes will be on the Employment Situation number this morning that estimates that it will come in strong. The worry from the market is if the number comes in too hot, it could raise the pressure on the FOMC to act reducing some of the easy money policies. So your guess is as good as mine as to what happens next. Futures currently point to a flat to mixed open, but everything could change rather dramatically after the release of the numbers at 8:30 AM eastern. Stay focused and settle in for another bull/bear fight near overhead resistance.

Trade Wisley,

Doug

May Payrolls Will Likely Set Direction

June 4, 2021 by Ed Carter

On Thursday, May ADP Nonfarm Payrolls came in 50% above expectation and the Weekly Jobless Claims came in slightly under estimates. Nonetheless, stock markets gapped down to start the day. The large-caps then immediately began fading the gap, before the sideways grind started at 11am and lasted the rest of the day. So, it was another day of pre-market move, immediate fade, and then just drifting sideways most of the session. This left gap-down indecisive Spinning Top type candles in all 3 major indices. On the day, SPY was down 0.36%, DIA was down 0.10%, and QQQ was down 1.08%. The VXX rose about 2% to 35.24 and T2122 fell just outside the overbought territory at 76.84. 10-year bond yields spiked to 1.627% and Oil (WTI) was flat at $68,84/barrel.

During the day, the Washington Post reported that President Biden is pushing a 15% minimum corporate tax rate (for companies who pay little or no tax now). This was floated as a way to partially fund infrastructure spending. CNBC reported that this would raise tax revenues $140 billion over 10 years on top of the $700 billion that a new 28% normal corporate tax rate would raise. This news hit many major tech stocks hard, who fall into this category, including AMZN, NVDA, QCOM, NFLX, and MU. However, the implications are broader than just tech, as many names like MCD, PFE, and FEDX have all fallen into the group that have paid less than 15% in taxes in the past. In a completely unrelated story, FB was hit with new antitrust probes in the EU and UK overnight.

The AMC roller-coaster continued Thursday as gapped down 7%, suffered an 83% range for the day, halted trading multiple times, and closed down 18%. The company also completed the sale of 12 million new shares (announced during the premarket and completed by lunch) to rake in $587 million of new capital and outraging the Reddit group that had been squeezing the shorts. Then, overnight, the CEO of AMC told an interview that he wants to sell 25 million more new shares (twice as many as were issued Thursday). Unsurprisingly, the in the pre-market AMC is down in very volatile trading.

Related to the virus, new US infections continue to fall. The totals rose to 34,174,752 confirmed cases and deaths are now at 611,611. However, the number of new cases is falling again and are back down to an average of 15,549 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 390 per day (again, the lowest number since March 2020). The NIH has reported that a new oral treatment for Covid-19 (named TEMPOL, from ADMP) has shown promise in a study published in the journal Science. If approved, the drug would join GILD’s drug remdesivir as the only FDA-approved treatments for the disease. ADMP’s stock soared 61% on the news. In not so good news, the average number of vaccinations per day has fallen to about 800,000.

Globally, the numbers rose to 172,963,233 confirmed cases and the confirmed deaths are now at 3,718,849 deaths. The trends are better again as we have seen a slowing in the rate of increase now that India has passed its peaked. The world’s average new cases are falling quickly now, but remain at 458,650 new cases per day. Mortality, which lags, is also falling, but remains at 10,270 new deaths per day.

Overnight, Asian markets were mostly red, on modes moves. Malaysia (-0.76%) and Taiwan (-0.57%) paced the losses while Shenzhen (+0.74%) and New Zealand (+0.53%) led the gainers. However, in Europe markets are mostly green on small moves so far today as the world waits on US data. The FTSE (-0.12%) is down, while the DAX (+0.07%) and CAC (+0.04%) are both just on the green side of break-even. As of 7:30 am, US Futures are also pointing to a mixed, flat open as we wait on the premarket data releases. The DIA is implying a -0.07% open, the SPY implying a +0.05% open, and the QQQ implying a +0.12% open at this hour.

The major economic news scheduled for Friday includes the May Nonfarms Payrolls, May Participation Rate, May Unemployment Rate, and May Avg. Hourly Earnings (all at 8:30 am), Apr. Factory Orders (10 am), and Fed Chair Powell speaks at 7 am. There are no major earnings reports on the day.

All eyes seem to be pointed toward the May Payroll data. The reaction to this number will undoubtedly call the tune at least early in the day. Economists are estimating a +650k report, but remember that the April number came in much lower than expected a month ago. Regardless, the long and mid-term trends remain bullish, while, for the moment markets are in a short-term pullback. Caution is clearly warranted in a market when the moves are made outside of open session hours.

Remember this is Friday, so don’t forget to pay yourself and get any hedging or position-lightening in front of the weekend done. Beyond that, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Stick with the trend (the one appropriate for your trade horizon) and respect support and resistance levels (but don’t just assume they will hold). However, also remember that you don’t have to trade every day. Don’t be afraid to take some time to stop trading and sharpen your axe instead. Consistency is the key to long-term trading success. And a refined process and sharpened skills are the keys to consistency. So, keep hitting those singles and doubles rather than swinging for the fence.

Swing Trade Ideas for your consideration and watchlist: GOEV, AI, SKLZ, QD, KSS, DELL. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Sideways Waiting on Data

June 3, 2021 by Doug Campbell

Index prices drifted sideways in a choppy market session as the market struggles with momentum waiting on jobs data. The big question of the morning is, will the data inspire the bulls, or will it bring out the bears? Anything is possible, and the market has proven it’s not shy about making huge moves, so plan your risk accordingly. Keep in mind we still have the Employment Situation number to deal with before the market open on Friday. Stay focused and flexible!

Asian markets traded mixed overnight, with Hong Kong selling off 1.13%. European markets trade decidedly bearish this morning in reaction to Chinese data. Ahead of a big day of earnings and economic data, the U.S. futures currently point to a bearish open, but in truth, anything is possible as the data rolls out. Buckle up it could be a wild ride!

Economic Calendar

Earnings Calendar

We have our busiest day this week, with 24 companies on the earnings calendar. Notable reports include ASAN, AVGO, CEIN, CRWD, DOCU, DLTH, EXPR, FIVE, SJM, JOAN, LULU, MDB, SCWX, WORK, SUMO, TLYS, & ZUMZ.

News & Technicals’

The frenzy of meme-stock traders nearly doubled the share price of AMC on Wednesday, with more than 70 million shares traded. The stock is up more than 2800% year to date as this dangerous activity continues to draw the attention of regulators. Analysts suggest oil prices continue to rise this summer as economies around the world reopen. Demand in the U.S. has begun to draw down reserves built during the pandemic, with $80 per barrel or higher expected targets. Russia is warning this morning that its economy is showing signs of overheating as consumer inflation accelerated again in May to top the 5.5% reading in April. Treasury yields traded mixed this morning ahead of private payrolls and jobless claims data. The 10-year rose to 1.5926% as the 30-year dipped to 2.2774%.

The price activity in the indexes drifted sideways yesterday in a choppy session as the market continues to struggle with momentum. On the good side, the bearish activity on Tuesday found no followthrough sellers holding as price supports. That said, we still have overhead resistance in all the index charts, and the possible double top pattern in the SPY and weakness in big tech remains a concern. Today, we face our biggest day of earings coupled with several possible market-moving economic reports that could provide inspiration. The question yet to be answered is will that inspiration favor the bulls or the bears? Premaket futures are currently under pressure suggesting a bearish open, but anything is possible as the market reacts to jobs data.

Trade Wisely,

Doug

A Slew of Data and the AMC Circus in Town

June 3, 2021 by Ed Carter

Without a major driver, markets ground sideways all day in the 3 major indices. This left all 3 printing an indecisive Doji-Harami candle Wednesday. On the day, SPY gained 0.17%, DIA gained 0.14%, and QQQ gained 0.20%. The VXX fell 2.5% to 34.61 and T2122 fell a bit, but still remains well into the overbought territory at 87.58. 10-year bond yields fell a bit to 1.591% and Oil (WTI) gained 1.5% to $68.76/barrel. In related news, after the close, the Fed announced that it will soon begin selling the $13.7 billion in corporate debt it purchased in 2020, at some unspecified time in the future. (More details as the sale nears.) While this is a trivial amount (in Fed or Fiscal stimulus terms), this is the first sign whatsoever of Fed tapering its easing policy.

The meme stock AMC continued its wild, perhaps miraculous ride on the “social-media short squeeze” train Wednesday. The stock closed up 100% after a 16% gap-up, several trading halts, and a 105% range day. That leaves the stock up a cumulative 432% in the last 7 trading days and a cool 2,900% for the year. Overnight that wild ride continued with a 20% range, but only up 1% as of 7:30 am (in VERY volatile trading). To top this all off, AMC filed with the SEC early today to sell 11 million new shares. In a related story, it’s interesting to think that Mudrick Capitol (who had bought $230 million of AMC in a new offering on Tuesday, only to flip the stock a few hours later for a purported near $100 million profit) ended up missing out on another potential $300 million, which it could have earned by holding the stock an additional 24 hours.

News leaked near the close that XOM appears to have “lost” a third board seat (out of 13) to the activist group seeking to push the company to move away from fossil fuels and toward becoming a carbon-neutral business. Prior to Wednesday, it had been confirmed that activist group Engine No. 1 had won 2 board seats. However, now the vote counting has been completed and it shows they actually won 3 of the seats. In other corporate news, after the close, FEYE announced it is selling its security products business (and name) to a private equity firm. The remaining cyber forensics unit will continue under the name Mandiant Solutions. No word yet on how this impacts the FEYE ticker or whether Mandiant will list under a different ticker name.

Related to the virus, new US infections continue to fall. The totals rose to 34,154,305 confirmed cases and deaths are now at 611,020. However, the number of new cases continues to fall and is back down to an average of 16,501 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are also now down to March 2020 levels at 405 per day.

Globally, the numbers rose to 172,478,958 confirmed cases and the confirmed deaths are now at 3,708,029 deaths. The trends are better again as we have seen a slowing in the rate of increase now that India has passed its peaked. The world’s average new cases are falling quickly now, but remain at 466,464 new cases per day. Mortality, which lags, is also falling, but remains at 10,408 new deaths per day.

Overnight, Asian markets were mixed yet again, on uneven moves. The regional catalyst seems to be May Chinese PMI number coming in below April and less than expected (although still strongly expansionist at 55.1). Indonesia (+0.99%), India (+0.73%) and South Korea (+0.72%) led gainers, while Hong Kong (-1.13%) and Shenzhen (-0.65%) paced the losses. In Europe, markets are red across the board so far Thursday. The FTSE (-0.98%), DAX (-0.63%), and CAC (-0.48%) are typical of the continent. As of 7:30 am, US Futures point toward a lower open. The DIA is implying a -0.56% open, the SPY implying a -0.67% gap down, and the QQQ implying a -0.95% gap down to start the day.

The major economic news scheduled for Thursday includes May ADP Nonfarm Employment (8:15 am), Weekly Initial Jobless Claims, Q1 Nonfarm Productivity, and Q1 Unit Labor Costs (all at 8:30 am), May Services PMI (9:45 am), ISM Non-Mfg. PMI (10 am), Crude Oil Inventories (11 am), and 2 Fed speakers (Bostic at 12:30 pm and Quarles at 3:05 pm). Major earnings reports before the open are limited to DOOO, CIEN, SJM, and TTC. Then, after the close, AVGO, FIVE, JOAN, LULU, NGL, and SAIC report.

Fear out of the Chinese data (strong expansion, but not blowing the lid off the economic pot) has global markets spooked early this morning. With a slew of US economic data to follow before the open, it’s too early to call the opening market sentiment. However, the sideways grind of the last few days certainly appears more “toppy” than ever. Regardless, the long and mid-term trends remain bullish, while, for the moment the short-term trend is sideways. Caution is clearly warranted.

As always, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Stick with the trend (the one appropriate for your trade horizon) and respect support and resistance levels (but don’t just assume they will hold). However, also remember that you don’t have to trade every day. Don’t be afraid to take some time to stop trading and sharpen your axe instead. Consistency is the key to long-term trading success. And a refined process and sharpened skills are the keys to consistency. So, keep hitting those singles and doubles rather than swinging for the fence.

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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Resistance Won the Day

June 2, 2021 by Doug Campbell

Yesterday’s big morning gap lost buying energy almost immediately as resistance won the day. Though the price action left behind bearish engulfing, dark cloud cover patterns and a possible double top on the SPY price supports also proved to hold. Is there a reason for concern? Yes, but there is also no reason to believe the sky is falling. A follow-through down today could become very concerning but should the bulls find inspiration in the jobs data holding on to price supports, the uncertainty may shift to those holding short positions. Stay focused as anything is possible.

Overnight Asian markets traded mixed but mostly lower as Australia’s GDP came in stronger than expected. European markets trade modestly bullish this morning near record highs. U.S. futures are once again pumping the open ahead of the ADP jobs data. What happens next is anyone’s guess, so keep a sharp focus on price action, support, and resistance levels for clues.

Economic Calendar

Earnings Calendar

The Wednesday earnings calendar lists 19 companies reporting, with several as unconfirmed. Notable reports include AAP, CLDR, LE, NTAP, PVH, & SPLK.

News & Technicals’

According to Fed official William Dudley, the recent spike in U.S. inflation is “likely transitory for now, but could become more persistent in the coming years.” That kind of like saying you’re a bit pregnant but plan for the next few years to be a lot of work! Ahead of the private payroll jobs data, treasuries ticked slightly lower to 1.606% on the 10-year and 2.288% for the 30-year yields. Economists look for private payrolls to improve over the April reading at 266,000 to 674,000 in May. ZOOM reports blowout earnings but now sees a 50% revenue growth for the full fiscal year but warns of a coming slowdown. ZM stock price is little changed this morning. Amazon has set its big summer sales event, Prime Day, for June 21 and 22.

Yesterday proved to be a bit disappointing after the overly rambunctious morning gap that was stopped in its tracks by price resistance. I think you would have to say that resistance won the day leaving behind some concerning bearish candle patterns and a possible double top on the SPY. However, it was not that bad if you consider the overall chart and the fact that price supports held by the close of the day. What will be very important is how price action follows though today! Should price move on lower today, confirming the bearish engulfing and dark cloud cover patterns, that’s a more serious concern. If today the price action holds price support, we may still have a reason for caution, but odds of new record highs improve. A lot will depend on the market reaction to the Private Payroll numbers released before the bell. Buckle up; anything is possible.

Trade Wisely,

Doug

Meat Supplier is Latest Hit By Hackers

June 2, 2021 by Ed Carter

Markets gapped up Tuesday on optimism coming off the long weekend (or perhaps in sympathy with European markets that celebrated EU stimulus spending). However, after the gap, the rest of the day was a fading of the gap and then a sideways grind in a tight range. QQQ printed what could be seen as a bearish engulfing of a Doji while the large-caps both just printed large ugly candles. This leaves us with a potential double-top in the large caps. On the day, SPY lost 0.09%, DIA gained 0.08%, and QQQ lost 0.33%. The VXX rose 2.25% to 35.48 and T2122 shot back up well into the overbought territory at 91.84. 10-year bond yields rose to 1.61% and Oil (WTI) was up about 2.5% to $67.93/barrel (the highest level since 2018).

Brazilian-based meat processor JBSAY suffered a ransomware cyberattack over the weekend. The company accounts for 25% of US beef packing, but also has significant market share in the pork and poultry markets as well. JBSAY will close all US plants today. However, it is likely that much just like the Colonial pipeline impact on gas prices, the impact is likely to be short-term. That said, it will lead to increased profits for their competitors and general meat price inflation throughout the US food industry, for at least for the next few weeks. TSN, SYY, HRL, CAG, PPC, KR, WMT are a few of the tickers that can be affected by this situation.

After another incredibly volatile day with a 20% range, AMC ended Tuesday up almost 23% (which was very close to where it had gapped up to open). It looks to be doing it again today, up 21% at the moment but having been up 40% overnight. In other social-media-driven market news, Elon Musk tweeted support for the Korean publisher (Korean-listed Samsung Publishing) behind the “Baby Shark” video/meme. The stock soared 10% (a huge move for the stock) in Korean trading. In “crypto craze” news, Dogecoin is soaring in (+30%) since COIN (the largest crypto exchange) enabled some of its users to trade that cryptocurrency Tuesday.

Related to the virus, new US infections continue to fall. The totals rose to 34,136,738 confirmed cases and deaths are now at 610,436. However, the number of new cases is falling again and are back down to an average of 17,387 new cases per day (the lowest number since March 2020). Deaths are also falling, and are now down to 416 per day (again, the lowest number since March 2020). The NIH announced that it has begun a small trial (150 patients) of mix-and-match vaccination, where the patient was originally full-vaccinated using PFE, MDNA, or JNJ vaccine, but the receive a booster shot from a different drug company 3-4 months after the original vaccination was complete.

Globally, the numbers rose to 171,993,794 confirmed cases and the confirmed deaths are now at 3,577,436 deaths. The trends are better again as we have seen a slowing in the rate of increase now that India has passed its peaked. The world’s average new cases are falling quickly now, but remain at 476,511 new cases per day. Mortality, which lags, is also falling, but remains at 10,569 new deaths per day. In some great news, the UK recorded no Covid deaths on the day for the first time since the pandemic began.

Overnight, Asian markets were mixed again, but this time more evenly split. Shenzhen (-1.18%), Singapore (-0.82%), and Shanghai (-0.76%) paced the losses. Meanwhile, Indonesia (+1.41%), Australian (+1.05%), and Malaysia (+0.76%) led gainers. This all came on reports that the region’s economy has bounced back to pre-pandemic levels during Q1. In Europe, markets lean more to the green side, but on modest moves. The 3 major indices are basically flat with the FTSE (+0.14%), DAX (-0.02%), and CAC (+0.17%) basically unchanged at this point in their day. This came as the ECB said that core inflation is not high and it would be premature to tighten monetary policy. As of 7:30 am, US Futures are flat. The DIA is implying a +0.09% open, the SPY implying a +0.02% open, and the QQQ implying a -0.01% open.

The major economic news scheduled for Wednesday is limited to Fed Beige Book (2 pm) and 2 Fed speakers (Bostic and Brainard, both at 2 pm). Major earnings reports before the open are limited to AAP and DCI. Then, after the close, EDR, NTAP, PVH, SPTN, and SPLK report.

Markets are looking undecided so far this morning after a volatile, if flat, start to June. With no major economic news or earnings expected on the day, it is possible we see a rest day in front of a bevy of news that is scheduled for Thursday morning. Regardless, the long and mid-term trends remain bullish, while the short-term trend is sideways. Inflation fear remains the main concern for markets, but the Fed and Central Banks around the globe continue to tell us not to worry since they are not changing policy and inflation is transient and not core. At the same time, a screaming economy and blowout profits are still the stories told by the vast majority of important earnings reports.

Remember that you don’t have to trade every day. It’s hard to make money trading a market that “gaps and fades” and generally grinds sideways. So, don’t be afraid to take some time to stop trading and sharpen your axe instead. Consistency is the key to long-term trading success. So, as always, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Stick with the trend (the one appropriate for your trade horizon) and respect support and resistance levels (but don’t just assume they will hold). Keep hitting those singles and doubles rather than swinging for the fence. Welcome back from the holiday…let’s go make some money.

Swing Trade Ideas for your consideration and watchlist: SENS, QD, WKHS, MARA, AI. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Bulls Found Inspiration

June 1, 2021 by Doug Campbell

Though futures opened lower Monday evening, the bulls found inspiration overnight as European markets surged to new records after better than expected economic data. With the SPY in striking distance of a new record at the open, it seems unlikely the institutions will miss the opportunity to grab a new headline to kick off the first trading day of June. That said, keep we still have substantial resistance in the QQQ and IWM to overcome. With bond yields ticking higher this morning with inflation pressures growing, that may still be problematic, particularly for the tech sector. Stay focused and flexible as we test price resistance levels.

Overnight Asian markets traded mixed with Chinese factory activity expanding. However, European markets are decidedly bullish this morning on solid data and rallying oil prices. U.S. futures have sharply recovered off opening lows ahead of manufacturing data to kick-off the first trading day in June. Keep in mind that big gaps can create significant price volatility. Plan according.

Economic Calendar

Earnings Calendar

We have 27 companies listed on the earnings calendar as we begin trading this short trading week. Notable reports include ZM, Kirk, AMBA, CGC, APPS, & HPE.

News and Technicals’

Futures opened trading lower Monday evening, but the bulls found inspiration to surge higher with the SPY in striking distance of new record highs sometime during the night. Oil prices surged overnight, with the benchmark Brent crude futures up 2.15% and U.S. crude advanced 2.8%. The world’s largest meat processors were hit over the weekend by an organized cyberattack. Australian and North American units were affected, but the Australian attack shut down operations across several states with no indication as to how long the stoppage might last. Tesla is raising prices again due to supply chain pressures in raw materials. Treasury yields tick higher this morning, with the 10-year coming in at 1.6130% and the 30-year rising to 2.2924% after April’s Core inflation number rose 3.1%, which was hotter than expected.

When it comes to the technicals, the DIA and SPY bull trends continue to test record levels, and with this morning’s gap up, the SPY could breakout at the open. Strength in the financial, oil, and healthcare sectors allowed the IWM to recover its 50-day average; however, it still has substantial overhead resistance to overcome. The QQQ is also dealing with overhead resistance, and though the bulls are pushing in the premaket to kick off the first trading day in June, rising bond rates may prove problematic for the tech sector. Getting this close to new records, I can’t imagine that the institutions will pass up on the opportunity to gain the headline but remember, the possibility of pop and drop at resistance also exists. That said, try not to chase overextended stocks at the open. Let’s wait and see if there is a follow-through of buying after the gap.

Trade Wisely,

Doug