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Bears Find Strength in 2021 Taper Fears

August 19, 2021 by Ed Carter

Markets just ground sideways Wednesday…right up until the July FOMC minutes came out. From that point onward the bears just hammered the bulls as stocks went out on the lows. This left us with nasty black candles with upper wicks and short-term downtrends in all 3 major indices. On the day, SPY lost 1.07%, DIA lost 1.04%, and QQQ lost 0.96%. The VXX gained almost 7% to 29.05 and T2122 dropped well into the oversold territory at 8.47. 10-year bond yields held steady at 1.265% and Oil (WTI) dropped over 2.6% to $64.83/barrel.

The cause of that sharp afternoon selloff was the July Fed Minutes. As had been signaled by recent Fed member statements (but apparently not believed), the FOMC has had discussions about tapering its bond-buying program this year. In fact, most of the participants noted that if the economy continues to evolve as expected, they’d support tapering bond purchases before year-end. Not today, but perhaps announcing a timetable at the September meeting and then slowly beginning the taper in October.

Strong Retail earnings continue to be the theme of the week. So far this morning, M absolutely crushed their report (beating by $668 million dollars on revenue and coming in 11 times higher than the average estimate on earnings, $1.29 vs $0.18 expected). KSS also more than doubled the average analyst estimate on earnings and raised guidance for the full year. Finally, while TPR beat, it was a pedestrian beat by comparison to the other two retail names reporting this morning.

In other retail-related news, CNBC reports that AMZN is planning to open large retail locations, starting in CA and OH. The stores will be similar to department stores but on the small side of size, similar to a KSS store. Meanwhile, in addition to their earnings, M also reported that they have partnered with “Toys R Us” and will offer that brand via “shop within a shop” areas in 400 of the M stores starting in 2022.

Overnight, Asian markets were strongly in the red again as even more Chinese regulations were announced. Taiwan (-2.68%), Hong Kong (-2.13%), and South Korea (-1.93%) led the parade, but losses were widespread and significant. Only New Zealand (+1.87%) bucked the trend as its national 3-day lockdown continues. In Europe, markets are down sharply across the board at this hour. The FTSE (-1.98%), DAX (-1.75%), and CAC (-2.44%) are typical for the continent at mid-day. As of 7:30 am, US Futures are pointing to gap-down follow-through of yesterday afternoon’s selloff. The DIA is implying a -0.91% open, the SPY implying a -0.83% open, and the QQQ implying a -0.69% open at this hour. 10-year bond yields are also falling, now at 1.23% and Oil (WTI) is off almost 4% to $62.98/barrel in early morning trading.

The major economic news scheduled for release on Thursday is limited to Weekly Initial Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am). The major earnings reports scheduled for the day include BILI, BJ, EL, KSS, M, PFGC, and TPR before the open. Then after the close, AMAT, FTCH, and ROST report.

Fear of Fed tapering, combined with slowing economic data and the Covid-19 resurgence are giving the bears plenty of ammunition. This might not have been helped when HOOD warned of a slowdown in trading volume. So, the long-awaited pullback is underway with the 50sma as the destination (possible support?) this morning. Beware of volatility, remember that the longer-term trend is still bullish, and remember that we are only 2.5% off the all-time highs as well as bear moves tend to happen faster than bull moves. So, trade carefully.

Today is the kind of day where it pays to remember two things. Cash is a position. And you don’t HAVE to trade every day. Always manage your existing trades before chasing new ones. Focus on the process and on managing what you can control. Trading rules and discipline are what separates long-term success and failure in trading. So, trade with the trend until the trend is broken. If you miss a move, just admit it and move on to the next trade. Never chase price on an entry and remember to keep your losses small by managing stops. And always consistently take profits when you have them.

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

🎯 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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Bears Woke Up

August 18, 2021 by Doug Campbell

After a disappointing retail sales number, the bears woke from their summer hibernation to reverse the previous rally that set new records. Though the whippy price action likely shook trader confidence at the end of the day, the bullish trends in the DIA, SPY, and QQQ remain. However, with housing number before the open and the FOMC minutes later this afternoon, prepare for another day of volatile price action that likely favors quick intraday traders.

Asian markets mostly rallied overnight after the reserve bank of New Zealand keeps rates unchanged. However, European markets trade mixed but mostly lower as they monitor inflation data. The U.S. futures point to mixed open ahead of economic and earnings data, but that could quickly change depending on the housing numbers. So hang on tight; the ride is about to take another lap.

Economic Calendar

Earnings Calendar

We have 35 companies listed to report on the Wednesday earnings calendar, with many of them as unconfirmed. Notable reports include CSCO, ADI, BBWI, EAT, PLCE, NVDA, LITE, LOW, KEYS, RRGB, SNPS, TGT, TJX, VIPX, & ZTO.

News & Technicals’

Lowe’s beat on the top and bottom line this morning, and the stock is priced higher this morning, trying to recover some of yesterday’s losses. Target also topped earnings targets and raised forecasts, but the retailer is trading lower in the premarket. After the bell, CSCO, NVDA, and HOOD will report their results. Treasury yields rose this morning as we wait on the FOCM minutes later this afternoon. The 10-year gain nearly two basis points to 1.275%, and the 30-year rose to 1.933%. Europe is scrambling to formulate an Afghanistan refugee plan, trying to avoid repeating the 2015 crisis. An emergency meeting of the most affected countries did not invite the United States after the Taliban seized control of the country.

The bears woke from their summer hibernation yesterday after the very disappointing retail sales number. The pullback included some violent intraday whipsaws that ended the day printing bullish hammer patterns with the afternoon rally. Please remember that hammer patterns required a bullish follow-through to be valid, so be careful rushing in to buy the dip. Before the bell, we have another potential market-moving report with the Housing Starts and Permits, expecting a minor pullback in the consensus. Finally, after some moring price volatility, we could see price action become light and choppy as we wait for the release of the last FOMC minutes. I think it’s unlikely that we will learn anything more about the possibility of a Fed taper, but if we do, there could be another shot of wild price swings in reaction. That said, after yesterday’s selloff, the DIA, SPY, and QQQ bullish trend suffered little to no damage though I can’t say the same for trader confidence.

Trade Wisely,

Doug

July Fed Minutes and Housing Data Today

August 18, 2021 by Ed Carter

US markets gapped down two-thirds to three-fourths of a percent at the open Tuesday and then ground sideways until late morning. The bears took us a leg further down into the speech of Fed Chair Powell, but then the bulls stepped in and gave us a slow rally back up into the close. This left us will indecisive Doji-type candles in all 3 major indices, none of which fell outside the recent trading range. So, we have an indecisive pullback on greater than average volume. The VXX rose 3% to 27.20 and T2122 dropped down just outside the oversold territory at 21.86. 10-year bond yields held steady at 1.263% and Oil (WTI) fell three-quarters of a percent to $66.78/barrel.

In economic news, July Retail Sales came in far below expectations before the open yesterday. This was the proximate cause for the gap down open. That said, WMT and HD beat on revenue Tuesday while TGT and LOW both beat on revenue already today. So, the slowdown appears to be happening at “Mom and Pop stores” rather than at the big-box chains. Beyond Retail, July Industrial Production almost doubled forecasts, and June Business Inventories came in just as expected.

As mentioned, markets were relieved when Fed Chair Powell spoke Tuesday. In his speech, he did not touch on either the economy or Fed monetary policy. Instead, he focused on Covid-19 and its impact on US students, saying the challenges will mold them into an “extraordinary generation.” During the Q-A portion of the event, he did decry the impact of Covid on economic activity and the pace of vaccinations slowing, as well as talking about how digital currencies are interesting and becoming a more important question that the Fed is considering.

Following up on the Retail theme from yesterday, it appears that big beats on both lines by TGT and LOW are resulting in both premarket volatility and punishment. TGT in particular reported blow-out numbers but was down well over 5% in premarket trading. (The cause of this divergence is reportedly fear of slowing sales growth and Covid resurgence hurting next quarter’s numbers.) Meanwhile, after HD’s post-beat smackdown (losing over 4% yesterday), this morning GS has raised their target for the company above the rest of the analysts covering the name.

Overnight, Asian markets were mostly green as the region rebounded a bit from the Tuesday news of Chinese Internet Antitrust regulations. Shanghai (+1.11), Taiwan (+0.99%), and Shenzhen (+0.72%) led the gainers, with typical gains more like half of a percent. In Europe, markets are mixed on modest trading. The “Big 3” exchanges are all modestly red, but the bulk of the rest of the region are in the green. The FTSE is down 0.29%, DAX down 0.11%, and CAC down 0.34% at mid-day. As of 7:30 am, US Futures are mixed and flat. The DIA is implying a -0.20% open, the SPY implying a -0.08% open, and the QQQ implying a +0.10% open. 10-year bond yields are up slightly to 1.275% and Oil is up almost a percent to $67.23/barrel in early trading on a flat US dollar.

The major economic news scheduled for release on Wednesday includes July Building Permits and July Housing Starts (both at 8:30 am), Crude Oil Inventories (10:30 am), and FOMC Minutes (2 pm). The major earnings reports scheduled for the day include ADI, EAT, LOW, TGT, TJX, VIPS, WB, and ZIM before the open. Then after the close, BBWI, CSCO, YY, KEYS, NVDA, SPTN, and SNPS report.

Covid continues to make news as GS reinstituted mask mandates in the office, FB pushed out their return to the office date again, and the TSA extended travel mask mandates through mid-January. This is adding to market fears at the highs. However, we are not yet seeing any panic as we did in March 2020. Earnings continue to be stellar, but mortgage rates hit their highest level in a month (3.06% for a 30-year fixed) as both refinance and new mortgage demand dropped this week. All that said, despite the fear, yesterday’s candles in the major indices show that the bulls are simply not ready to roll over. All 3 major indices closed in the top third of their range, having driven price up off the lows following the gap-down. So, don’t mistake volatility for a changed trend just yet.

Trading rules and discipline are what separates long-term success and failure in trading. Focus on the process and on managing what you can control. Always manage your existing trades before chasing new ones. Trade with the trend until the trend is broken. If you miss a move, just admit it and move on to the next trade. Never chase price on an entry and remember to keep your losses small by managing stops. And always consistently take profits when you have them.

Swing Trade Ideas for your consideration and watchlist: ALKS, LSI, FOLD, FAS, WBA, NAVI, NVAX, AMRN. 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

Massive Intraday Whipsaw

August 17, 2021 by Doug Campbell

The early selloff triggered a massive intraday whipsaw that set new records in the DIA and SPY as buy the dip buyers rushed back in with a fear of missing out. Unfortunately, this morning, many may feel pain with an overnight gap down, threatening to take all or yesterday’s gains back in one fell swoop. Keep your fingers crossed that the Retail Sale numbers come in better than expected, or this could prove to be a rough day.

The seeing began overnight as Asian markets sold off across the board on fears of more Chinese internet regulations. European markets trade primarily lower this morning, keeping an eye on the economic data and the Afghanistan crisis. In addition, as earnings roll out U.S. futures, currently suggest an overnight reversal gap down ahead of a vital retail sales number that could improve or worsen the market open. So, tighten your seatbelt and get ready for a bumpy ride!

Economic Calendar

Earnings Calendar

The number of earnings events drop off today with just 37 companies listed, and nearly half are unconfirmed. Notable reports include HD, WMT, A, AMCR, CRMT, CREE, DNUT, LZB, PANDY, QUIK, & SE.

News & Technicals’

Home Depot shares decline this morning after a sold beat on estimates after the company reported that the do-it-yourself trends have weakened. The U.S. sets new records as pandemic infections rise, but less than 11% of hospital beds are used nationwide. Oregon has 56.8% of its residents fully vaccinated but has seen an increase of 11.4% in infections. Hawaii is 54.3% vaccinated with infections up 12.3%, Florida 50.3% vs. 28.2 and Missippi 35.8% vs. 18.7% increase. Flights have resumed from the Kabul Airport as people scramble to leave Afghanistan, with the U.K. foreign secretary see’s the situation stabilizing. Treasury yields moved slightly lower this morning, with the 10-year trading at 1.23% and the 30-year falling to 1.898%.

So what is a trader to do with a market producing a massive intraday whipsaw that set new record highs with traders rushing in near the close? Well, if you’re anything like me, you either stand aside, seeing no edge as a swing trader or chose to do a little day trading to take advantage of the wild price volatility. Traders that bought up stocks yesterday could experience a little pain this morning with an overnight whipsaw down. The selling began overnight as with China internet shares falling as regulatory fears rise. Traders now face a retail sales number before the open that consensus suggests may decline, and that sentiment seems to have been confirmed in the Home Depot guiding sales lower in their earnings report. I said yesterday to prepare for price volatility, but holy cow, this is ridiculous! Unless you’re an experienced day-trader, you may find it nearly impossible to matain a trading edge. The song’s lyrics, The Gambler says it best, Know when to hold em’, know when to fold em,’ know when to walk away, and know when to run! So buckle up it could be another wild ride today.

Trade Wisely,

Doug

Retail News and Earnings On Tap Today

August 17, 2021 by Ed Carter

US markets followed the rest of the world by gapping down at the open Monday. After a half-hour of getting their footing, bulls then stepped in to rally stocks the rest of the day, closing near the highs. This left us with a Bullish Engulfing candle in the DIA and a long-wick Hammer / Hanging Man candle in the QQQ. On the say, SPY gained 0.25% (to another all-time high close), DIA gained 0.33% (to another all-time high close), and QQQ gained 0.04%. The VXX was flat at 26.36 and T2122 fell but remained in mid-range at 44.65. 10-year bond yields fell sharply to 1.268% and Oil (WTI) dropped 1.5% to $67.40/barrel.

As we sit at all-time highs, it is worth noting that the S&P500 has now doubled since March of 2020. That makes the last (just under) 17 months the strongest bull rally since World War II…and not just by a little bit. The current market reached that “doubling” milestone in 35% less time than the next-fastest bull market. In fact, this rally has been three times faster than the average post-WWII rally.

In miscellaneous business news Monday, TSLA is under investigation again by Federal safety regulators after 11 accidents where TSLA cars using autopilot crashed into emergency vehicles, resulting in 17 injuries and one death. The stock fell more than 4% on that news. Meanwhile, TMUS confirmed Monday afternoon that it had been hit by a data breach that has exposed the full customer information of many T-Mobile users. Late Sunday night, hackers had boasted that they had taken the personal information of over 100 million people from the breach. The stock fell almost 3% on the confirmation.

Earnings season continues in retail today, as WMT and HD have both posted beats on both lines this morning. WMT cited strong grocery and back-to-school sales. As for HD, although they beat on revenue, they did report an almost 6% drop in transactions for the quarter. Markets seem to fear that this means an end to the stay-at-home DIY home improvement trend of the last 15 months.

Overnight, Asian markets were mixed but leaned to the downside as China drafted new regulations aimed at anti-competitive activities in the Internet sector. Shenzhen (-2.34%), and Shanghai (-2.00%) saw the worst of the losses, but the losses were widespread. On the upside, only Malaysia (+1.38%) managed to gain more than a percent. In Europe, markets are far more mixed, but still lean to the red side as of mid-day. The FTSE (+0.17%), DAX (-0.19%), and CAC (+0.56%) are typical of the spread with only Denmark (+0.80%) and Russia (+0.58%) managing significant gains at this point in the day. As of 7:30 am, US Futures are pointing to a gap-down open. The DIA is implying a -0.59% open, the SPY implying a -0.47% open, and the QQQ implying a -0.37% open. 10-year bond yields are also down sharply to 1.223% and Oil is 0.83% lower in early morning trading.

The major economic news scheduled for release on Tuesday includes July Retail Sales (8:30 am), July Industrial Production (9:15 am), Jun Business Inventories (10 am), and Fed Chair Powell speaks (1:30 pm). The major earnings reports scheduled for the day include AIT, HD, GRUB, SE, and WMT before the open. Then after the close, A, AMCR, BEST, JKHY, and LZB report.

Profit-taking is natural at all-time highs. This is especially true in the face of fear over covid resurgence (Monday a CCL cruise out of Texas reported 27 new cases found during its voyage), news of pressure on the Fed to at least begin tapering bond-buying, and economic news that shows the recovery weakening. However, trends remain bullish or consolidating at worst. In fact, just yesterday there was a report that funds are sitting on a trillion dollars of cash, hoping to buy into a 5% pullback. So, while we should look for short-term opportunities to the downside of that is what the market brings, don’t go “all in” on a bear trend taking shape…especially in the longer term.

🎯 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

Talk Fed Tapering

August 16, 2021 by Doug Campbell

The images of fleeing diplomats and the hints of Fed tapering seem to have a few bears milling about this morning pondering the uncertainty. Could their summer hibernation come to an end as we wind down the bulk of earnings season inspiration? Perhaps but with new records in the DIA and SPY, trends remain very bullish. Only the IWM has a hint of bearishness as it continues to languish below its 50-day average. So prepare for the possibility of price turbulence as the markets work through the details of the uncertainty.

Asian markets closed mostly lower overnight, lead by the Nikkei falling 1.62% after China’s economic data disappoints. Geopolitical concerns have European markets seeing red across the board this morning as investors monitor the fast-changing events. Ahead of earnings and a light day of market-moving economic news, U.S. futures suggest a modestly bearish open within bullish trends amid tapering uncertainty.

Economic Calendar

Earnings Calendar

To kick off the new trading week, we have around 190 companies listed, but a large number of them are small-cap unconfirmed events. Notable reports include PLNT, DDD, APD, AMC, GOLD, BNTX, CBT, ELY, CF, CHGG, CXW, APPS, DISH, ELAN, ENR, GLNG, KNDI, QLYS, SGMS, SDC, TTD, TSN, & WKHS.

News & Technicals’

President Biden experiences his Saigon moment as the Taliban seize Kabul as diplomats flee. After taking over the presidential palace, the Taliban has taken over the entire country in about 30 days. Reports suggest that there is growing support to announce tapering its debit asset purchase program in September. It will be interesting to see how a market addicted to money flowing from the Fed will react when and if it does come to an end. This morning Treasury yields decline with the 10-year falling to 1.263% and the 30-year dipping to 1.921%, with the Fed minutes expected Wednesday afternoon. With turmoil in Haiti, Afganistan, and Malaysia, markets worldwide are experiencing a little bearish pressure due to the uncertainty.

Coming off a week of fresh record highs in the DIA and SPY, the images of fleeing diplomats and the talk of Fed tapering have the bears stirring about this morning. Earnings season provided a good deal of bullish energy, but as the season winds down, the bulls will have to begin looking elsewhere for inspiration. Trends is in the DIA, SPY, and QQQ are very bullish, but they also appear somewhat overextended. The big question is, do the bears have any teeth, and will the geopolitical along with the taper talk wake them from the summer hibernation. Only time will tell but be ready for some price turbulence as the market grapples with the uncertainty.

Trade Wisely,

Doug

Focus Turns to Retail With Big China Miss

August 16, 2021 by Ed Carter

Markets opened slightly higher on Friday and then ground sideways is a tight range the rest of the day. This left us with small-body, indecisive candles across the 3 major indices. However, both large-cap indices did this at a new all-time high close and the QQQ only missed a new all-time high close by a fraction of a percent. On the day, SPY gained 0.18%, DIA gained 0.05% (which accounts for it having a small black body candle), and QQQ gained 0.35%. The VXX was flat at 26.28 and T2122 remained in the mid-range at 58.26. 10-year bond yields closed down slightly at 1.359% and Oil (WTI) was flat at $68.90/barrel.

During the day Friday, the Michigan Consumer Sentiment reading came out at a pandemic-era low of 70.2. This was the lowest reading since 2011 and accounted for one of the largest one-month drops of the metric on record. This dramatic decline comes as covid (Delta variant) is out of control again, communities and businesses are reintroducing mask mandates and the bulk of major corporations are delaying “return to the office” and issuing company vaccination mandates.

With 10-year bond yields stuck in the 1.3% range and plunging consumer sentiment, the stock market continues its perpetual rally. It seems odd to be sitting at all-time highs on low and declining breadth. This weekend, Bloomberg said it believes the reason is the market-wide, record corporate profits that have been reported so far this quarter. It seems that despite inflation complaints, the pandemic recovery works in Wall Street’s favor. It does so by lowering inventories, reducing absolute payrolls/expenses, and giving pricing power to industries across the gamut. This week the focus turns to Retail as WMT, HD, LOW, TGT, KSS, M, FL, and ROST all report.

In miscellaneous stock news, CNBC reports Saudi Aramco is close to a deal that would give it a 20% stake in Indian Chemical (oil to chemical processing) for $25 billion. A deal for the same ownership stake fell through a couple years ago when oil prices crashed. Meanwhile, BHP is in talks to sell its petroleum business to Australian producer Woodside. SONO is also surging in premarket after the ITC rules that GOOGL had infringed on the Sonos audio technology patents.

Overnight, Asian markets were mostly in the read as Chinese Retail data showed only an 8.5% year-on-year gain in July (well below the 11.5% forecast). Japan (-1.62%) and South Korea (-1.16%) led the region to the downside. Meanwhile, India (+0.21%) and Thailand (+0.19%) were the only real green in the area. In Europe, we see a similar pattern so far today. The FTSE (-0.95%), DAX (-0.40%), and CAC (-0.76%) are typical of the continent with only Russia (+0.49%) in the green at mid-day. As of 7:30 am, US Futures are pointing to a quarter of a percent gap down at the open. The DIA is implying a -0.25% open, the SPY implying a -0.24% open and the QQQ implying a -0.24% open at this hour. 10-year bond yields are also significantly lower (1.278%) with Oil (WTI) also 1.5% lower in early trading.

The major economic news scheduled for release on Monday is limited to NY Empire State Mfg. Index (8:30 am). The major earnings reports scheduled for the day are limited to UWMC before the open. The major earnings reports scheduled for after the close include EDR, FN, RBLX, and TME.

With no major earnings news this morning and only the NY Fed Mfg. Index in economic data, markets are very likely to follow the rest of the world. Fear over retail growth numbers indicating a slowing recovery at the same time the Fed is seeing pressure to begin bond-buying tapering will give markets a shiver. This is only going to be exasperated by growing concern over Delta variant impacts. However, there has been no stopping the bulls so far. At most, the bears have just given bulls a rest once in a while. So, caution is required. However, calling reversals is not a strategy for long-term success.

Stick with the trend until the trend is broken. However, if you missed a move, admit it and move on to the next trade. Never chase price on an entry. Remember to keep your losses small by managing stops and then consistently take profits when you have them. Above all, we have to maintain our discipline to trading rules. Focus on the process and on managing what you can control.

Swing Trade Ideas for your consideration and watchlist: AAPL, BAC, AMRN, WEN, KBH. 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

Producer Prices Surge

August 13, 2021 by Doug Campbell

After hearing that the producer prices surged well past inflation expectations, the bulls ignored the news and pushed the SP-500 to its 47^th record high for the year, with Dow leading the charge. I suspect there will be a time when we will suddenly care about inflation, but for now, stick with the bullish trends and enjoy the party as long as it lasts. With volume below average and a very week, Absolute Breadth Index may suggest market complacency is growing, so guard against overtrading and avoid chasing already extend stocks.

Asian markets struggled overnight, closing the session mostly lower with only ASX squeaking out a positive close. However, the Europiean markets see nothing but green this morning fueled on solid earnings data. With earnings numbers dwindling and U.S. futures trade mixed ahead import/export numbers and consumer sentiment.

Economic Calendar

Earnings Calendar

We have a lighter day on the Friday earnings calendar with just 71 companies listed, but a significant number are unconfirmed. Notable reports include ARHVF, DSEY, FUJIY, SDPI, & VSTA.

New & Technicals’

The pandemic numbers back on the rise; the FDA recommends booster shots for people with compromised immune systems hoping to shield the most vulnerable. According to Fauci, everyone will likely need booster shots in the near future. In addition, pandemic restrictions are again on the rise, with indoor masking requirements and vaccine passports entering public buildings. A new black market business has emerged producing fake vaccination cards. As the U.S. withdraws troops, Al-Qaeda quickly regains power as they march across the country, taking city after city. The expectation is that Kabul will soon be recaptured, and the U.S. is now deploying 3000 American troops to help with the evacuation of Americans at the U.S. Embassy.

After hearing that Producer Prices came in much hotter than expected, the bulls quickly decided they don’t care, setting the 47^th new record high in the SP-500 this year. The Dow also surged to new records while the QQQ recovered from early selling as the tech giants lifted the index. The VIX continues to march lower, nearing the June lows. It is, however, a bit concerning that volume remains below average as the market surges higher and the Absolute Breadth Index remains shocking low. That said, the bullish trends in the DIA, SPY, and QQQ are unmistakable, and the technicals show no signs the direction is about to change. Stay with the trends as long as this bullish party continues, but plan to protect your capital should the sentiment suddenly change.

Trade Wisely,

Doug

DIS and Delta Variant Lead News Today

August 13, 2021 by Ed Carter

July PPI came in much hotter than expected, but as expected Jobless claims kept falling. Markets shrugged off this news to open flat. Then after a fade the first hour, the bulls started a long, slow rally that lasted the rest of the day. This gave us strong candles in all 3 major indices, including a Dragonfly Doji in the DAI (to a new all-time high close), a strong bullish candle in the SPY (to another all-time high close), and a strong bullish candle in the QQQ. On the day, SPY gained 0.30%, DIA gained 0.08%, and QQQ gained 0.36%. The VXX fell another 2% to 26.24 and T2122 fell out of the overbought territory to 70.83. 10-year bond yields climbed to 1.361% and Oil (WTI) fell half a percent to $68.91/barrel.

After the close, DIS beat on both lines in its report. Despite its theme parks remaining unprofitable, the company managed to handily top estimates, delivering $17.02 billion in revenue and $0.80/share earnings for the quarter. One stand-out from the report was that the Disney+ streaming service added 1.5 million more subscribers than had been expected.

The delta variant is raising concerns in the logistics world. Which may have major follow-through impacts on the retail and manufacturing sectors in the fall. Chinese restrictions have caused the partial closure of the world’s third-largest port already. The Port of Los Angeles is already prepping for another dramatic decline in container volume. With container pricing up 220% already this year, the logjams that result from another set of port slowdown/shutdowns could have drastic impacts on shipping costs.

Early today the FDA authorized a vaccination booster shot for immunocompromised people. While the FDA said that fully-vaccinated healthy people are adequately protected, the debate continues on whether to expand booster shots or continue to apply the doses that would be required toward getting the unvaccinated population their first rounds of vaccine. However, Thursday afternoon Dr. Fauci (NIH) told a press briefing that it is likely that everyone will need a booster shot at some point.

Overnight, Asian markets were mostly in the red. Taiwan (-1.38%) was an outlier, but Shenzhen (-0.69%) and Singapore (-0.54%) paced the losses on global logistics concerns. However, India (+1.01%) and Australia (+0.54%) were among the few green exchanges in the region. In Europe, markets are mixed but lean to the green side so far on Friday. The FTSE (+0.33%), DAX (+0.43%), and CAC (+0.38%) are leading the continent higher at mid-day. As of 7:30 am, US Futures are pointing toward a flat open. The DIA is implying a +0.13% open, the SPY implying a +0.04% open, and the QQQ is implying a -0.02% open at this hour. 10-year bond yields are down a bit as the dollar is down so far today.

The major economic news scheduled for release on Friday is limited to July Imports and July Exports (both at 8:30 am) and Michigan Consumer Sentiment (10 am). The major earnings reports scheduled for the day are limited to DSEY and ERJ before the open. There are no earnings reports scheduled for after the close.

With no major news planned this morning and the twin fears of covid impacts and inflation-caused Fed tightening, the bears have the wind at their back this morning. However, the bulls have been impossible to deny regardless of news for months. It seems like a classic case of “climbing the wall of worry” in recent days. Gaps, fades, and long periods of tight-range sideways grind have been a spot-on description of market action this summer. However, trends remain bullish (if flattened in the QQQ). So, while caution is required, predicting trend change is not a strategy for long-term success.

Keep your losses small by managing stops and consistently take profits when you have them. Never chase price on an entry. If you missed a move, admit it and move on to the next trade. Above all, maintain your discipline to your trading rules. Stick with the trend until the trend is broken. As mentioned, reversal predictors don’t tend to last long in the trading business. Focus on the process and managing what you can control. Discipline will see you through.

Swing Trade Ideas for your consideration and watchlist: AAPL, MSFT, SOLO, MIME, ORCL, ASAN, PSA, CROX, TRGP, HUBS, EBON. 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

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

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Shrugged off Inflation

August 12, 2021 by Doug Campbell

Traders shrugged off inflation numbers as they once again pushed the Dow and SP-500 to new records. When good news is a reason to buy, and bad news is a reason to keep buying, it makes me concerned about the damaging effects of complacency in the longer term. There is no doubt the DIA, SPY, and QQQ trends are bullish. So stay with them as long as they last, but never forget this wild bullishness will not last forever. Avoid chasing already extended stocks and guard against overtrading as this bull party continues.

Overnight Asian markets traded lower as currencies due to the weaker dollar. European markets trade mixed with modest gains or losses as pandemic concerns weighs on investors. Ahead of a dwindling number of earnings reports and the latest reading on Jobless Claims and PPI U.S. currently point to modest gains but new records at the open.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have a busy day with more than 260 companies listed, but a significant number of them have not confirmed. Notable reports include DIS, ABNB, BIDU, BAM, CSIQ, TAST, BAP, CYBR, DASH, FRGI, GDRX, IQ< LZ, LAZR, MDP, MIDD, PLTR, PTE, & WPM.

News & Technicals’

The Competition and Markets Authority said it the purchase of Giphy by Facebook will harm competition. They warned the deal would remove a potential challenger in the display advertising market. In addition, a U.S. bipartisan bill aims to shake up how Apple and Google run their mobile app stores in similar news. App developers have claimed unfair practices from the tech giants, and the bill hopes to allow more competition into the app markets. According to Professor Sir Andrew Pollard, the head of the Oxford Vaccine Group said with the highly infectious delta variant achieving herd immunity is not possible.

Traders and investors shrugged off inflation numbers yesterday, pushing the Dow and SP-500 up, setting more new records. When bad news becomes a reason to buy up the market, and good news inflates it, even more, we must become concerned about market complacency. That said, the trends are very bullish in the DIA, SPY, and QQQ, and the premarket pump suggests more records at the open. We have one potential stumbling block with the weekly jobless claims, but we have seen missing on that number can also be ignored. So stay with the trend and party like its 1999 as long as it lasts but, please guard yourself against complacency and the desire to overtrade these very lofty valuations.

Trade Wisely,

Doug