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EU Stimulus and Meme Stock Rally

June 1, 2021 by Ed Carter

Despite premarket economic data that was worse than expected (Apr PCE Prices +3.1 vs. +2.9% est.) markets still gapped higher at the open Friday. However, from there we saw a sideways grind the rest of the day, fading the gap in all 3 major indices. Only the QQQ printed a potential candle signal with what could be called a Shooting Star type of candle. On the day, SPY gained 0.21%, DIA gained 0.30%, and QQQ gained 0.32%. The VXX rose 1.5% to 34.70 and T2122 fell back out of the overbought territory to 75 even. 10-year bond yields fell to 1.581% and Oil (WTI) was just shy of flay to $66.61/barrel. All of this happened on very light volume as traders had left early for an extra-long weekend.

The meme stocks had another day of massive volatility Friday as GME had a range of more than 20% to close down almost 13% and AMC had a 52% range to close down 1.6% on the day. For the week, AMC was up over 116% and GME up over 25% on ranges of 202% and 55% respectively. For its part, AMC is taking advantage of the situation by selling more stock ($231 million) and the ride seems primed to continue as AMC is up over 12% in early premarket trading Monday.

Private equity firm KKR took tech data analytics firm CLDR private early today at a cost of $4.7 billion ($16/share). CLDR had closed at $12.86 on Friday, so holders got a 24% premium. (KKR is famous for buying companies, slicing/dicing them, recombining them with complementary companies and the IPOing the new entity.)

Related to the virus, new US infections continue to fall. The totals rose to 34,113,146 confirmed cases and deaths are now at 609,767. However, the number of new cases is falling again and are back down to an average of 17,275 new cases per day (the lowest number since March 2020). Deaths are still plateauing or falling more slowly, but are now down to 460 per day (the lowest number since March 2020). The CDC says that nearly 51% of the population is at least partially vaccinated while 41% is now fully vaccinated. While statistically that is not enough to reach herd immunity, it is a step in that direction with signs of normalcy returning.

Globally, the numbers rose to 171,520,497 confirmed cases and the confirmed deaths are now at 3,566,430 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 485,983 new cases per day. Mortality, which lags, is also falling, but remains at 10,801 new deaths per day.

Overnight, Asian markets were mixed, but leaned strongly to the green side Monday. Indonesia (+1.69%), Thailand (+1.57%), New Zealand (+1.15%), and Hong Kong (+1.08%) were the major movers with much more modest moves by the larger exchanges and small moves among the few red ones. In Europe, markets are green across the board as the EU is finally ready to spend the more than $917 billion in emergency stimulus it raised earlier in the pandemic. This will be new spending, on top of the stimulus already spent by the 27 EU countries. The FTSE (+1.11%), DAX (+1.49%), and QQQ (+0.84%) are typical of the region. As of 7:30 am, US Futures are pointing toward the large-caps testing the all-time highs with the QQQ testing the highs of the recent range. The SPY is implying a +0.59% open, the DIA implying a +0.71% open, and the QQQ implying a 0.50% open at this hour.

The major economic news scheduled for Tuesday is limited to Mfg. PMI (9:45 am) and ISM Mfg. PMI (10 am). Major earnings reports before the open are limited to BNS. Then after the close, HPE and ZM report.

Markets seem to be in a good mood for a virtual Monday. Apparently, the long weekend did the traders some good. Of course, the nearly $1 trillion in new stimulus spending in the EU is helpful. So, we start June on a positive note and challenging the highs again. Even the lagging QQQs are only 2% from their all-time highs. And the outlook for the economy (profits) remains strong with the big names claiming to have pricing power, more government spending (nationally and abroad) on tap. While inflation is a very real concept, the Fed assures us not to worry about it this year. In that vein, one thing to keep in mind is that deficits and inflation are long-term economic problems for investors, not short-term market problems for traders.

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: Rick’s return flight was delayed and his Tuesday is starting late. So 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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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

Reddit Squeezing and Russian Phishing

May 28, 2021 by Ed Carter

Markets started with a little gap (up a quarter percent on SPY, half percent on DIA, and down a tenth of a percent on QQQ). However, that was it for the day as markets traded sideways in a tight rant the rest of the day. This left all 3 major indices as small-body, black-body candles. It should be noted that all week stocks have been trading on very low volumes, as markets look ahead to a long weekend. On the day, SPY (+0.03%) was flat, DIA (+0.36%) gained a tad, and QQQ (-0.38%) lost just a bit. The VXX fell almost 5% again to 34.16, and T2122 sneaked into the overbought territory at 82.93. 10-year bond yields rose to 1.601% and Oil (WTI) was up nine-tenths of a percent to $66.79/barrel.

MSFT said in a blog post that the same Russian hacking group (MSFT has named the group Nobelium) that carried out the SWI attack early last year have launched a new attack. The impacts of last year’s catastrophic attack are still not fully known or at least have not been made public. However, it appears that the new attack has targeted at least 150 organizations globally. MSFT said that at least 25% of the targeted groups in the latest attack are humanitarian or human-rights-related organizations. However, governments, consulting companies, and non-governmental think tanks are also among the targets, which span 24 countries so far.

The Reddit crowd continues to pump the “meme stocks” as AMC shares shot up over 36% on the day and GME gained over 11%. AMC is up 121% on the week and GME up almost 44% over the same time. The so-called “short-squeeze” plays certainly work when the squeezers can collaborate on social media. These moves seem to be continuing in pre-market trading Friday.

Related to the virus, new US infections continue to fall. The totals rose to 33,999,680 confirmed cases and deaths are now at 607,726. However, the number of new cases is falling again and are back down to an average of 23,060 new cases per day (the lowest number since June). Deaths are also still falling and are now down to 526 per day (the lowest number since March 2020).

Globally, the numbers rose to 169,710,788 confirmed cases and the confirmed deaths are now at 3,527,082 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 538,292 new cases per day. Mortality, which lags, is also falling, but remains at 11,280 new deaths per day. SNY and GSK have begun Phase 3 trials of their own joint-venture vaccine.

Overnight, Asian markets were mixed, but leaned to the green side on very uneven trading. Japan (+2.10%), Taiwan (+1.62%), and Australia (+1.19%) stood out among the gainers. Meanwhile, losses were mild, with New Zealand (-0.50%) and Shenzhen (-0.30%) being the most significant. In Europe, markets are nearly all green so far today. The FTSE (+0.31%), DAX (+0.60%), and CAC (+0.69%) are typical of the continent at mid-day. As of 7:30 am, US Futures are pointing to another gap higher. The DIA is implying a +0.50% open, the SPY implying a +0.39% open, and the QQQ implying a +0.36% open…but some significant economic data lies ahead before the open.

The major economic news scheduled for Friday include April PCE Price Index, April Trade Balance, April Personal Spending, and April Retail Inventories (all at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am). Major earnings reports before the open include BIG and CAL. There are no major earnings reports after the close.

Markets are seeking to end the pre-holiday week on a positive note as the bulls look to make the first push of the day. Expect volume to dry up quickly today, but then again the entire week has happened on low volume. The PCE Price Index might have an effect if it touches the inflation nerve of Mr. Market. Beyond that, look for traders to square up their books, place their hedges, and hit the road early today.

As always, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Stick to the trend (appropriate for your trade horizon) and respect support and resistance levels (but don’t just assume they will hold). Consistency is the key to long-term trading success. So, keep hitting singles and doubles rather than swinging for the fence. Don’t forget to pay yourself on Pay Day, or that this is a long weekend. And enjoy the holiday!

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

Stuck near Overhead Resistance

May 27, 2021 by Doug Campbell

Despite all the premarket blustering trying to inspire the bulls the last couple of mornings, the indexes remain stuck near overhead resistance. NVDA reported an 84% increase in sales last quarter, but the stock is nearly unchanged this morning as the market seems to struggle with momentum. How we open today will depend on the reaction to the Durable Goods, GDP, and Jobless Claims numbers. I think it is fair to say anything is possible. However, keep in mind the coming 3-day weekend, and don’t be surprised if trading volumes quickly decline after the morning session as traders head out to extend their time off.

During the night, Asian markets traded mixed in a somewhat choppy session. European markets traded mixed this morning and primarily flat, cautiously waiting on U.S. Economic data. U.S. futures have rallied off of overnight lows as earnings roll out, and we wait on crucial data points to be revealed.

Economic Calendar

Earnings Calendar

We have our most significant day of earnings data this week, with 40 companies listed on the calendar. Notable reports include BBY, CRM, ADSK, BOX, BURL, COST, DELL, DG, DLRT, GPS, GCO, HPQ, MDT, OLLI, SAFM, ULTA, VEEV, & VMW.

News & Technicals’

NVDA crushed 1^st quarter results with sales up 84% compared to last year and sold $155 million in crypto mining chips. Interestingly the stock is basically unchanged this morning. The US and China talked on the phone for the first time under the Biden administration and were stated as candid, pragmatic, and constructive. It is beginning to look more and more likely that the pandemic origin was from a Wuhan lab where game of function activities took place. After ending the Trump investigation immediately after entering office president, Biden has now ordered an investigation. Russia has decided it will not make Covid vaccines compulsory for its citizens, with Putin telling officials on Wednesday that it would be “counterproductive.”

Though there was an effort in the premarket futures to inspire the bulls yesterday morning, the indexes remained stuck near overhead resistance. Overall we chopped in a very narrow range in the DIA, SPY, and QQQ while IWM enjoyed a surge of activity bolstered by oil numbers. This morning futures appear uninspired after the huge beat from NVDA. However, they have significantly improved from overnight lows. That said, with Durable Goods, GDP, and Jobless Claims before the open, anything is possible when trading begins today. As you plan your risk, keep in mind the coming 3-day weekend and the possibility that trading volumes could quickly decline if traders wrap up their week early.

Trade Wisely,

Doug

3 Big Economic Reports Today

May 27, 2021 by Ed Carter

Markets traded in a very tight range all day Wednesday on light volume as it appeared traders decided to get an early start to the long weekend. All 3 major indices printed indecisive Doji candles at the break-even level. On the day SPY gained 0.19%, DIA gained 0.03%, and QQQ gained 0.35%. The VXX fell almost 5% to 35.91 and T2122 remains in the mid-range at 69.66. 10-year bond yields rose slightly to 1.581% and Oil (WTI) gained a fraction to $66.17/barrel.

During the day, the AMZN purchase of MGM Studios for $8.45 billion was agreed. The move puts them in better position to compete in the streaming space versus NFLX and DIS. XOM management also lost a historic proxy battle which allowed environmental activists to gain at least 2 (and possibly 3) of the 13 board seats. The activist group (Engine No. 1) has been pushing the company to move away from fossil fuel and toward a role in a zero-carbon footprint world. Big bank CEOs also took a grilling on Capitol Hill. From the left they were hammered over PPP, diversity and collections policies. From the right, they were hit over “woke capitalism” and what their stance was on budget deficits. After-hour NVDA beat on both lines on an 84% growth in revenue.

US and Chinese trade representatives held their first phone call since President Biden took office. No details have been leaked, other than both sides saying it was a candid and constructive call, with both sides agreeing to further discussions. In what may or may not be separate trade news, Bloomberg reports China has eased its “Offshore Funding Limit” for foreign banks (allowing foreign banks to own larger stakes in Chinese banks), which had been one of the measures imposed during the prior administration’s US-China Trade War. So at least the big banks got somehting out of a day they were grilled by US legislators.

Related to the virus, new US infections continue to fall. The totals rose to 33,971,207 confirmed cases and deaths are now at 606,179. However, the number of new cases is falling again and are back down to an average of 23,917 new cases per day (the lowest number since June). Deaths are still plateauing or falling more slowly, but are now down to 537 per day (the lowest number since March 2020). On Wednesday, 7 major health officials asked Congress to investigate the origin of Covid-19. President Biden also publicly tasked the US intelligence community to an investigate and report on the origin within 90 days. Finally, a study published in the JAMA said that 73% of the “moderate to severe” cases saw patients reporting symptoms at least 2 months after diagnosis.

Globally, the numbers rose to 169,143,484 confirmed cases and the confirmed deaths are now at 3,513,941 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 555,028 new cases per day. Mortality, which lags, is also falling, but remains at 11,487 new deaths per day. Wednesday, the EU asked JNJ to carry out most studies of their vaccine after a Belgian death. In the Australian state of Victoria, another 7-day lockdown has been issued after a new local outbreak.

Overnight, Asian markets were mixed, but leaned to the green side on uneven, but mostly modest moves. Malaysia (+1.02%) and Thailand (+0.92%) led the gains, with New Zealand (-0.84%) pacing the losses as the largest exchanges saw smaller moves. In Europe, markets are mostly modestly green so far today, but the largest exchanges lag. The FTSE (-0.22%), DAX (-0.20%), and CAC (+0.59%) are not taking their typical leadership roles in the move, with several continental exchanges more green and more red than the big boys. As of 7:30 am, US Futures are pointing to a modestly lower open (albeit an hour before major economic news). The DIA is implying a flat +0.02% open, the SPY implying a slightly down -0.18% open, and the QQQ implying a -0.37% fall at the open.

The major economic news scheduled for Thursday includes April Durable Goods Orders, Q1 GDP, and Weekly Initial Jobless Claims (all at 8:30 am), and April Pending home Sales (10 am). The big bank CEOs will also be in for their second day of testimony (public berating?) on Capitol Hill. Major earnings reports before the open include BBY, BURL, CM, DG, DLTR, MDT, RY, SAFM, and TD. Then after the close, ADSK, COST, DELL, GPS, GES, HPQ, YY, CRM, ULTA, and VMW report.

Those 3 major reports coming at 8:30 am are likely to call the tune in early trading. However, the volume has been light enough the last few days that it is possible traders are just taking the week off in order to stretch the long weekend ahead. So, beware of volatility and moves on very light volume. Either way, be wary of a resting or indecisive market we’ve seen the last few days possibly indicating resistance.

Swing Trade Ideas for your consideration and watchlist: VIAC, FSLY, RKT, NKLA, LAC, FUBO, WKHS, GOGO, BFLY, SOLO, TLRY, SKLZ, RUN. 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

Amazon Antitrust Action

May 26, 2021 by Doug Campbell

The Amazon antitrust action by the Washington D.C. attorney general quickly dampened the bullish energy yesterday. Indexes took a little break resting at or near price resistance levels in the charts. The IWM is the only index that suffered some technical damage as it once again failed at its 50-day average. Keep in mind after the Thursday morning economic reports, don’t be surprised if volumes begin to decline as traders escape early to extend Memorial day vacations. Plan carefully as we slide into a 3-day weekend and begin summer trading.

During the night, Asian markets closed with modest gains led by the HIS gaining 0.88%. However, European markets are trading very cautiously this morning near the flatline but mostly lower when writing this report. As earnings roll out this morning, the U.S. futures point to a bullish open ahead of the Petroleum numbers as they test overhead resistance levels.

Economic Calendar

Earnings Calendar

We have just over 30 companies listed on the earnings calendar this morning, but several are unconfirmed reports. Notable reports include NVDA, ANF, AEO, BBW, CPRI, DKS, APPS, ELF, NXGN, PDD, PSTG, SNOW, & WDAY.

News & Technicals’

Washington D.C. attorney general Karl Racine began an Amazon antitrust action claiming the company is unfairly raising consumer prices. The lawsuit alleges the company utilizes monopoly pricing power contracts with third-party sellers. An ad was running in the UK stating, “time to buy,” Bitcoin was banned by the Advertising Standards Authority. Treasury yields traded mixed this morning, with the 10-year rising slightly to 1.567% while the 30-year declined slightly to 2.256%. China is once again failing to live up to its trade commitments in the phase one trade deal. Chinese purchase of U.S. goods through April is 73% of what they should be according to the agreement. China is also in the news for cracking down on cryptocurrency mining activities proposing punishments for companies or individuals involved. Being a central hub of crypto mining activity could create more price volatility in the digital currency.

Technically speaking, the DIA and SPY are in pretty good shape though still challenged by overhead resistance. The QQQ and the IWM have the biggest hurdles to overcome with significant price resistance levels above. That said, the bulls are once again pumping the premarket, trying to inspire buyers as the morning earings rollout. Later this morning, we will get a reading on the Petroleum Status that could be very important for the IWM that once again failed at its 50-day average yesterday. Remember, as we slide into a 3-day weekend, the volumes could become light as traders head out early to extend their vacations. Plan your risk accordingly.

Trade Wisely,

Doug

Fed Speakers Keep Reassuring Markets

May 26, 2021 by Ed Carter

Markets gapped up modestly on Tuesday and the immediately began fading the gap. After the first hour, all three major indices were back down to at least flat and then proceeded to grind sideways in a tight range the rest of the day. This left us with something close to a Dark Cloud Cover candle in the SPY and a Bearish Engulfing in the DIA. On the day, SPY lost 0.20%, DIA lost 0.22%, and QQQ gained 0.15%. The VXX was flat at 37.70 and T2122 fell to 65.43. 10-year bond yields fell again to 1.557% and Oil (WTI) was just South of flat at $65.87/barrel.

After the close San Francisco Fed Pres. Daly told CNBC “the economy is strong, but it’s way too early to tighten policy.” She also described her stance on inflation as “firmly in the transitory camp” (referring to her previously stated position that inflation is not snowballing and will subside on its own starting early in 2022). In an unrelated story, Corn futures fell 6% on the day (a massive move in futures) as markets fear of a larger than expected supply hit commodity speculators hard. This move was based more-or-less solely on a USDA report saying that 90% of intended corn acres have been planted as of Sunday. (While ahead of last year at this time, this is just in-line with a normal planting year.)

The Attorney General of the District of Columbia sued AMZN Tuesday on the basis of anti-trust activity. The suit alleges AMZN maintained a monopoly through pricing contracts (a “price parity clause” in their contracts with third-party sellers) that prevent price competition. The cluses prohibit third-party sellers from selling their products cheaper in any other venue than the AMZN Marketplace, and lets the company penalize any vendors that violate that clause. DC claims this amounts to making AMZN Marketplace a virutal monopoly and reduces price competition that hurts consumers. AMZN responded by saying “the DC Atty. Gen. has the situation exactly backwards” sicne their marketplace helps third-party sellers exists and therefore generally guarantees price competition overall.

Related to the virus, new US infections continue to fall. The totals rose to 33,947,189 confirmed cases and deaths are now at 605,208. However, the number of new cases is falling again and are back down to an average of 24,668 new cases per day (the lowest number since June). Deaths are still plateauing or falling more slowly, but are now down to 550 per day (the lowest number since March 2020).

Globally, the numbers rose to 168,572,477 confirmed cases and the confirmed deaths are now at 3,501,270 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 569,439 new cases per day. Mortality, which lags, is also falling, but remains at 11,609 new deaths per day. India surpassed 27 million total cases, but the daily new case count was below 200,000 for the first time in over a month. Meanwhile, Malaysia now has more covid cases per million people than India (about 33% more) as of Sunday. While Malaysia is a small country, it borders much larger countries and trade routes.

Overnight, Asian markets were mostly in the green on modest moves. Thailand (+1.08%) and Hong Kong (+0.88%) led the gains while Shenzhen (-0.35%) paced the losses. In Europe, markets are lean to the red side so far today. The FTSE (-0.29%) and DAX (-0.18%) are down modesty while the CAC (+0.03%) is flat. The rest of the continent is split on modest moves. As of 7:30 am, US Futures are pointing to a positive open in the markets. The DIA is implying a +0.27% open, the SPY implying +0.35% open, and the QQQ implying +0.42% open.

The major economic news scheduled for Wednesday is limited to Crude Oil Inventories (10:30 am) and a Fed speaker who presdents at two events (Quarles at 10 am and 3 pm). Other new includes the CEOs of the major banks (JPM, C, MS, BAC, WFC, and GS) begin two days of grilling in front of Congress today. Major earnings reports before the open include ANF, CPRI, DKS, LI, and PDD. Then after the close, UHAL, AEO, CHNG, DBI, DXC, MOD, NVDA, WSM, and WDAY report.

Bitcoin has climbed back above $40,000 this morning, 33% above the lows of last week, but still 38% below the April highs. At the same time, Gold rose overnight to over a 4-month high (back above $1,900/oz.). With limited news planned and bond yields in check, perhaps the Fed statements have alleviated the inflation fears for the moment. Whether that is true or not, it appears the bulls will make the opening push at the bell again this morning. However, remember that we still have resistance overhead and the bulls are showing to be tentative after a few strong days.

Stick with the trend and respect support and resistance levels (but don’t just assume they will hold). As always, 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 singles and doubles rather than swinging for the fence.

🎯 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

Inflation Fears Subsided

May 25, 2021 by Doug Campbell

As inflation fears subsided, the index chart technicals continued to improve yesterday. That said, price action remains challenging, and it’s worth noting that this all-or-nothing market environment has swung up and down nearly 2000 points in the last 7-days. Challenging may be an understatement! We still have overhead resistance levels to overcome, so be careful chasing stocks well above support and near resistance. New records may be just around the corner, but we still can’t rule out bear attacks near resistance highs. Stay focused on price action for clues.

Overnight Asian markets rallied strongly, led by SHANGHAI surging 2.40% by the close of trading. Across the pond, the DAX hits an all-time high while the FTSE and CAC trade oddly near the flatline. Ahead of earnings, Case-Shiller, Housing data, and Consumer Confidence numbers, the U.S futures push for another bullish gap up open.

Economic Calendar

Earnings Calendar

We have under 25 companies reporting today, but we have several potential market movers on the list. Notable reports include A, AZO, CBRL, INTU, NAT, JWN, RRGB, SOL, TOL, URBN, & ZS.

New & Technicals’

Elon Musk said he spoke to bitcoin miners, and after doing so, the price surged to near $40,000. Make you wonder how much longer the SEC will allow him to get away with this manipulation and why would anyone want to own something that one person can move the price so dramatically. What’s the next move, Elon? Amazon could announce a deal as early as today to buy MGM Studios. The $9 billion deal would be AMZN’s biggest acquisition since the Whole Foods purchase in 2017. Ahead of Case-Shiller numbers and the New Home Sale figures, Treasuries are drifting lower this morning. The 10-year fell to 1.591%, and the 30-year dipped to 2.283%. After one denial after another, the evidence begins to mount that Covid-19 came from a Wuhan Lab. The WHO has repeatedly said the virus jumped from bast to humans, but there is no evidence that the virus exists in bat populations after extensive testing.

Chart technicals continued to improve yesterday as inflation fears subsided. The tech giants enjoyed substantial rallies pushing indexes toward resistance levels. In this all-or-nothing market environment, I would not rule out the possibility of new record highs in the DIA or SPY by the end of the week. However, with the recent volatility, we should also not rule out the possibility of another bear attack near market highs. Keep in mind the Dow has covered nearly 2000 points in just the last 7-day of trading.

Interestingly the Absolute Market Breadth indicator continues to decline as we surge higher. It is, however, encouraging that the VIX suggests market fear is subsiding. Stay focused and flexible as volatile price action is likely to remain challenging.

Trade Wisely,

Doug

Markets Look to Open Higher Tuesday

May 25, 2021 by Ed Carter

The bulls took charge from the start on Monday as markets gapped higher at the open and followed-through for the first hour. However, that was the end of the movement for the day as stocks ground sideways in a tight range the remainder of the day, but ended on a slight pullback in the range. This left us with gap-up candles in all 3 major indices, with the DIA failing to break out of the highs of the last couple weeks. On the day, SPY gained 1.02%, DIA gained 0.56%, and QQQ gained 1.68%. The VXX fell over 4% to 37.73 and T2122 inched closer to the overbought territory at 76.81. 10-year bond yields fell significantly to 1.603% and Oil (WTI) spiked 3.81% to $66/barrel.

Big tech led the way Monday as AMAT, TSLA, and NVDA each gained over four percent. However, the FATMAG stocks all did well with FB and GOOG both gaining over 2.6%, AMZN and AAPL both gaining over 1.3%, and MSFT gained 2.29% on the day. For its part, Bitcoin had another volatile day after dropping below $32,000 on Sunday night, it rebounded 20% Monday after Elon Must tweeted that he had been talking to Bitcoin miners and that they committed to coming up with planned renewable energy plans which he found potentially promising. Also aiding the surge was a JPM bullish call for the stock of the main crypto exchange COIN.

In business news, CNBC reported late Monday that AMZN is very near a deal to buy MGM for between $8 and $9 billion. The deal would add to the AMZN Video content catalog and increase the company’s ability to compete against NFLX, DIS, and the newly merged WarnerMedia and DISCA. Elsewhere, after hours, Bloomberg reported that SQ will soon offer checking and savings accounts in addition to its current merchant (card processing) services. This will add another competitor to the bank space now dominated by JPM, BAC, WFC, C, and USB.

Related to the virus, new US infections continue to fall. The totals rose to 33,922,937 confirmed cases and deaths are now at 604,416. Still, the number of new cases is falling again and is back down to an average of 25,189 new cases per day (the lowest number since June). Deaths are still falling more slowly, but are now down to 543 per day (the lowest number since July 2020). The TSA reported on Monday that air travel was nearly back to 2019 number last weekend with 1.8 million people flying versus a 2019 number of 2.1 million for the same weekend. PFE announced that the first shots of its proposed booster (which combines the covid vaccine with a streptococcus vaccine) were administered as its trial of 6-month post “full vaccination” has begun.

Globally, the numbers rose to 168,032,095 confirmed cases and the confirmed deaths are now at 3,488,576 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, but remain at 581,560 new cases per day. Mortality, which lags, is also falling but remains at 11,864 new deaths per day. The Summer Olympics took another hit on Monday as the US added Japan to its “Do not travel” travel advisory list. Meanwhile, Taiwan (the world’s largest exporter of microchips, including TSM) has extended it’s national lockdown by at least 3 more weeks. Since these measures prohibit any gatherings of more than 5 people and require masking at all times, it is reportedly impacting business operations.

Overnight, Asian markets were almost exclusively in the green. New Zealand (-0.87%) was the lone red, with Shanghai (+2.40%), Shenzhen (+2.34%), Hong Kong (+1.75%), and Taiwan (+1.58%) leading the bullish surge. In Europe, markets are slightly more mixed, but remain mostly in the green so far today. The 3 major exchanges FTSE (-0.08%), DAX (+0.74%), and CAC (+0.09%) set the tone as usual, with smaller exchanges tending to slightly larger moves. As f 7:30 am, US Futures are pointing to another positive open. The DIA is implying a +0.26% open, the SPY implying a +0.30% open, and the QQQ implying a +0.43% open.

The major economic news scheduled for Tuesday is limited to Conf. Board Consumer Confidence, April New Home Sales, and a Fed speaker (Quarles) (all at 10 am). Major earnings reports before the open include AZO, CBRL, DY, ESLT, and VSAT. Then after the close, A, INTU, JWN, TOL, and URBN report.

CNBC reports that part of the cryptocurrency’s extreme volatility of late has been caused by large traders using 100-to-1 leverage. This has caused 20% to 30% swings in a day. However, so far this morning, the price of Bitcoin has stabilized. In stocks, the bulls seem to have the premarket momentum again today. However, with no new revelations driving the move, it remains a case of reopening expansion enthusiasm versus fear that overheating will cause the Fed to pump the breaks. As we approach the all-time highs again, there is still resistance overhead. Still, the short-term and long-term trends remain bullish although we seem to be later in the cycle.

Stick with the trend and respect support and resistance levels (but don’t just assume they will hold). As always, keep locking in profits when 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 singles and doubles rather than swinging for the fence.

🎯 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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Improved Technical Picture

May 24, 2021 by Doug Campbell

Last week’s bounce substantially improved the technical picture in the DIA and SPY. However, the bulls still have a lot of work to clear overhead resistance levels in the QQQ and IWM. With a busy week of earnings and economic data, anything is possible, but possible traders will have to stay focused and flexible with big price swings. Buying the dip works only if the market moves higher. Remember, the market will top at some point in time, and buying the dip will prove painful. Plan your risk carefully and keep in mind gap up opens near resistance levels can run into entrenched bears. Be careful not to chase.

Asian markets opened the week mixed with modest gains and losses by the close of the session. European markets trade with modest gains this morning, starting the week with a modicum of caution., The U.S. futures point to bullish open with a light day of earnings and economic data as bulls try to inspire enough buying to break through resistance levels. Volatility is likely to remain high and watch for the possible a pop and drop near resistance.

Economic Calendar

Earnings Calendar

We start the week off with 38 companies listed on the earnings calendar with several unconfirmed. Notable reports include API, CRMT, XOG, & NDSN.

News & Technicals’

We have a pretty busy week on the earnings calendar this week, along with housing numbers, durable goods, GDP, and Personal Income to keep traders busy as we wrap up May. As you plan forward, remember that following Monday, the market is closed for Memorial Day. Bitcoin continues its wild fluctuations dropping to 32,000 but trying to start the week positive this morning. Treasury yields are drifting lower this morning, with the 10-year slipping to 1.617% and the 30-year dipping to 2.315%. The Nobel prize-winning economist Robert Shiller believes there is a bubble forming. He says he’s most worried about housing, crypto’s, and stocks calling it a “wild west” mentality among investors.

Last week’s relief rally substantially improved the indexes’ technical picture, but there are still questions to be answered. Rallying to reclaim support levels and break downtrends is the first step, and now we need some proof the bulls can hold them as support. Substantial overhead resistance still exists in the QQQ and IWM. In last week’s bounce, the T2122 indicator moved near overbought levels, and with the futures pointing to a bullish open, we should watch for the potential of a pop and drop pattern. The VIX closed on Friday just above a 20 handle, holding above its 50-day average and price support. So though the technical picture has improved, there are still questions to be answered. I would not rule out the possibility of a rally to end the week that could even make new record highs. However, we can also not rule out the possibility that the bears could defend resistance highs. Stay focused and avoid chasing with the fear of missing out.

Trade Wisely,

Doug

US Wages Rise and China Taps Commodity Break

May 24, 2021 by Ed Carter

Markets gapped higher at the open on Friday, but then traded slowly lower all day, closing near the lows in the SPY and QQQ. The DIA closed as an indecisive Doji candle. On the day, SPY was flat (-0.08%), DIA was just positive (+0.15%), and QQQ was down 0.55%. The VXX fell to 39.48 and T2122 rose up to just outside the overbought territory at 77.19. 10-year bond yields were down slightly to 1.623% and Oil (WTI) shot up 3.13% to $63.88/barrel. Bitcoin ended a tumultuous week on a major down leg, losing 10.26% on the day as China’s State Council concluded they should crack down on bitcoin mining.

After the close Friday, FOMC voter and San Francisco Fed Pres. Daly told Bloomberg that she expects the temporary factors that are leading to inflation “will persist the rest of this year, but will start to roll off at the beginning of next year.” She went on to say that Fed policy is in a good place right now and that policy makers need to be patient and not start tightening too soon. However, on Sunday Bloomberg also reported that the Chinese government is now decreasing infrastructure spending in a bid to reduce the commodity price bubble caused, in-part, by their massive expansion over the last 6-7 months. The report said this did not spell disaster for commodity bulls, since the US expansion is taking up slack with its larger stimulus plans. However, they did say that industrial metals cycles tend to coincide with China’s credit cycle. Which could mean good news in months to come for business input costs (reduced inflation)..

On Saturday, CNBC reported that for the first time in 25 years the ratio of worker pay to corporate profits has started to budge. In other words, the massive layoffs from the global pandemic have caused a situation where companies need to compete for labor in a way not seen since the 1990s. As a result, worker pay grew 3% in the first quarter. However, according to analytics from MCO, the ratio of compensation to profits still remains at the level of the late 1960s. That said, MCD, UA, BAC, and CMG are among the companies saying they will raise wages on average (sometime over the next several years). MCO says this will not impact corporate profitability in the short-term, but if the trend continues it could have an effect in 2023 or 2024.

Related to the virus, new US infections continue to fall. The totals rose to 33,896,660 confirmed cases and deaths are now at 604,087. However, the number of new cases is falling again and are back down to an average of 25,083 new cases per day (the lowest number since June). Deaths are still plateauing or falling more slowly, but are now down to 553 per day (the lowest number since July 2020). The CDC announced that 25 states have now vaccinated at least half of their adult population. This comes as 61% of the adult population has received at least one shot and almost 50% of adults are fully vaccinated.

Globally, the numbers rose to 167,589,687 confirmed cases and the confirmed deaths are now at 3,479,788 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 592,614 new cases per day. Mortality, which lags, is also falling, but remains at 12,088 new deaths per day. The Japanese government is decrying a slow uptake in vaccination, even in the main cities planned to host the summer Olympics. Less than 2% of the population is vaccinated and even Tokyo is seeing less than a third of the number of daily vaccinations the government has deemed necessary.

Asian markets were mixed overnight on modest moves, but leaned slightly to the green side. Shenzhen (+0.62%) led to the upside and South Korea (-0.38%) led to the down side. In Europe we see a similar story taking shape as of mid-day. All 3 of the large exchanges are in the green so far, but most of the smaller exchanges are on the red side. The FTSE (+0.18%), DAX (+0.44%), and CAC (+0.02%) are all slightly green at this point in their day. As of 7:45 am, US Futures are all in the green. The DIA is implying a +0.28% open, the SPY implying a +0.43% open, and the QQQ implying a +0.62% open. Oil is higher in premarket by 1.40%.

The major economic news scheduled for Monday is limited to two Fed speakers (Brainard at 9 am and Bostic at noon). There are no major earnings reports before the open. However, after the close NDSN reports.

Markets look to be opening inside the range of the last few days. The bulls seem to have the premarket momentum, but there are no new revelations driving the move. It remains a case of reopening expansion enthusiasm versus fear that overheating will cause the Fed to pump the breaks. With a very strong quarter of earnings just behind us and high expectations for strong profits in the current quarter, the bulls have the general momentum. However, there is resistance overhead and we are coming off one hell of a bull run. So, this is a “climbing the wall of worry” situation…meaning we seem to be later in the cycle.

As always, keep locking in your profits when you achieve your trade goals and maintain discipline by following your trading rules. Stick with the trend and respect support and resistance levels (but don’t just assume they will hold). Consistency is the key to long-term trading success. So, keep hitting singles and doubles rather than swinging for the fence.

Swing Trade Ideas for your consideration and watchlist: KHC, INSG, MARA, INTC, XHB, INO, SPCE, F, SRPT, DDD, RIOT. 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