Looking at the daily index charts, one could quickly think the relief rally looks underway but look deeper, and you will see another challenging day of price action. The bears have gained some confidence, much more willing to fight for dominance than we have seen recently. With a light day of earnings and economic data to provide inspiration and markets around the world experiencing selling pressure, the bulls have a challenging task ahead to defend price support heading into the weekend. Plan your risk carefully!
With more Chinese regulatory scrutiny in tech and now real estate, Asian markets sold off strongly led by Hong Kong, with the HSI dipping into bear territory. European markets currently see red across the board, and the weekend nears. Finally, with a light day of earnings and economic data, U.S. futures point to a bearish open that may test the bull’s willingness to defend yesterday’s low in the Dow. Expect volatility as the bulls and bears fight for dominance.
Economic Calendar
Earnings Calendar
We have a light day on the earnings calendar to round out the trading week with only 7-verified reports. Notable reports include BKE, DE, and FL.
News & Technicals’
Another challenging day of price action with buying in big tech, health care, and defensive stocks proving some safe-haven spots for traders. However, the divide between winners and losers continues to grow as more and more stocks fall below their 200-day averages. The VIX pulled back from its intraday high but ended the day above a 20 handle, suggesting more price volatility in the days ahead. Although the DIA, SPY, and QQQ experienced a bit of a relief rally, the 4-week new high/new low ratio surprisingly remained in a short-term oversold condition. China passed new tech regulations and looked to expand its crackdown to real estate. As a result, Hong Kong markets fall into bear territory to close out the week.
Yesterday’s rally was nice, but it was not nearly enough to recover broken support levels. Moreover, with the premarket action threatening a bearish open, the risk of severe technical damage is growing. Should the bears find the energy to push prices below yesterday’s lows, we could experience a very rough day of a pile on selling into the weekend. With a very light day of earnings and economic data, the bulls will have to work hard to find enough inspiration to encourage buy the dip traders to take the weekend risk. That’s a big ask, with Asian markets closing decidedly bearish and European markets seeing red across the board in the worst week of trading since February. As the bulls and bears battle for dominance, expect the price action to remain challenging with the VIX elevated.
Despite better-than-expected Initial Jobless Claims, markets gapped down hard at the open Thursday. This took us to or near the 50sma in all 3 major indices. However, the bulls stepped in immediately and rallied stocks into the highs just lunch. From there we saw another down wave and rally as the volatility took us on a final down leg at the close. This all left us with large-body, white candles with upper wicks amid small overall moves. On the day, SPY gained 0.17%, DIA lost 0.18%, and QQQ gained 0.48%. The VXX gained 3.2% to 30.00 and T2122 dropped deeper into the oversold territory at 5.71. 10-year bond yields fell again to 1.242% and Oil (WTI) dropped 2.15% to $64.05/barrel.
Thursday night, TSLA CEO Elon Musk announced plans to build a “Humanoid Robot” he dubbed the “Tesla Bot.” The stated goal of the robots will be to eliminate the need for humans to do “dangerous, repetitive, and boring tasks.” As with most of Musk’s “inventions,” robots have been a widely-known concept for centuries and an actual product for decades. However, I’m sure the TSLA robot will be “world changing.” In either case, the news and related tweets are giving TSLA stock a little boost in premarket trading.
China has passed a major “personal information protection law,” somewhat similar to the laws in place in the EU since 2018 and the recent AAPL vs FB “consent changes” for iPhone users. This set of regulations lays out strict guidelines related to the collection, storage, and use of personal information by companies. While the law has passed on Friday and goes into effect on November 1, the final draft has not been made public yet. This is all part of the recent sweeping regulation of the technology sector, in particular, focused on phone apps and websites.
Japan’s massive auto companies were all down sharply following the Thursday evening announcement by Toyota that it is slashing global production for September by 40%. The reason for the cuts is a lack of chips and no more room to store partially completed vehicles. Toyota did stress that it still believes it can hit its annuals production and sales targets. Toyota was down 4.09%, Nissan dropped 7.25%, and Honda fell 4.84% on the day. This news may have hurt US automakers Thursday and is not likely to give them any help today. So, keep an eye on F, GM, STLA, and major parts suppliers.
Overnight, Asian markets were mostly in the red again. Hong Kong (-1.84%), Shenzhen (-1.61%), and Shanghai (-1.10%) led the region lower. In fact, the Hong Kong Hang Seng moved into the Bear territory, down more than 20% from the February highs. In Europe, markets are red nearly across the board in the early afternoon. The FTSE (-0.24%), DAX (-0.48%), and CAC (-0.52%) are typical of the continent mid-day. As of 7:30 am, US Futures are pointing to another gap lower. The DIA is implying a -0.47% open, the SPY implying a -0.47% open, and the QQQ implying a -0.30% open at this hour. 10-year bond yields are also lower to 1.233% and Oil (WTI) off eight-tenths of a percent in early trading with the dollar showing a little early strength.
The only major economic news scheduled for release on Friday is a Fed speaker (Kaplan at 11 am) and Options Expiration (after the close). The major earnings reports scheduled for the day include DE and FL before the open. There are no earnings reports scheduled for after the close.
With markets looking at the first appreciable weekly loss in a month, the bears are continuing to draw strength from the fear of Fed bond tapering and the Covid-19 resurgence. As mentioned above, today is also options expiration Friday. So, expect a little volatility and perhaps some pinning in the afternoon. Just remember that we are sitting at or near the 50sma (potential support) and are only 2% off the all-time highs. So, don’t go all-in either direction just yet, especially in front of the weekend news cycle. Trade carefully.
As always, manage your existing trades before you go chasing any new ones. Focus on the process and on managing what you can control. It is good trading rules and discipline that separates long-term success from failure in trading. So, trade with the trend. If you miss a move, just admit it and move on to the next chart. Never chase price on an entry and remember to keep your losses small by using stops or hedges. And always consistently take profits when you have them. Lastly, remember it’s Friday…and Friday is payday.
Ed
Swing Trade Ideas for your consideration and watchlist: GTBC, EBAY, CHRS, HUT, X, NUE. 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 thought that the Fed is considering tapering easy money policies brought out the bears yesterday afternoon. The selling is starting to create some technical damage in the DIA, SPY, and QQQ and likely shake the uber bulls’ confidence. With Jobless Claims and Philly Fed numbers before the bell, we could have a challenging price action open depending on the results. However, with the overall market, so helplessly addicted to money printing, I would not be too surprised if the taper tantrum withdrawal symptoms create more challenges on the path forward.
Asian markets traded in the red across the board last night, with Hong Kong leading the way as it plunged 2.13%. European markets also see nothing but red across the board due to the taper talk and falling oil prices. U.S. Futures continue to fall as earnings roll out with potential market-moving data before the bell that worsen or significantly improve the open depending on the results. So, buckle up; it could be a wild ride this morning.
Economic Calendar
Earnings Calendar
The Thursday earnings calendar has indicates 46 companies expected to report, with about half of them unconfirmed. Notable reports include AMAT, BZUN, BILI, BJ, EL, GFI, KSS, M, MSGS, NCMYGY, WOFF, QIWI, ROST, SDRLF, TPR,& VSCO.
News & Technicals’
We learned from the FOMC minutes that the committee is talking about tapering easy money policies this year. But, with the market so incredibly addicted to money printing, the bearish reaction pushed all the indexes lower with selling into the close. Treasury yields, surprisingly, traded lower this morning despite the taper talk. The 10-year fell four basis points to 1.233%, with the 30-year also dropping four basis points to 1.87%. Tesla is apparently struggling with vehicle delivery as customers are told they will have to wait for weeks or even months as delivery dates keep slipping. According to sales staff, they are not being told what is causing the delays and cannot answer customer’s questions. However, Toyota says it will cut global production by 40% due to the pandemic impacts of semiconductors and other parts shortages.
After the late afternoon selloff yesterday, some technical damage is beginning to show in the index charts. The DIA, SPY, and QQQ closed below support levels. With the premarket activity currently pushing lower, the damage could worsen this morning unless the bulls go to work and defend. Nevertheless, a little ray of sunshine with the 4-week new low/ new high ratio suggests we are near a short-term oversold condition and could bounce soon. However, that will likely depend on the Jobless claims results, which will come out before today’s open. Economists estimate 365,000 claims filed, which would be a modest improvement over last week’s reading. Please keep your fingers crossed because should it miss, the bears could keep going selling pressure.
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.
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
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.
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.
Ed
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.
🎯 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 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.
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.
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.
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
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.
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.
Ed
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.
🎯 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
