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July Jobs Report Tops The Agenda Today

August 6, 2021 by Ed Carter

Markets gapped higher fractionally on Thursday and then ground sideways until the last half hour. The day ended with a rally the last 30-minutes causing prices to go out on the highs in all 3 major indices. This left strong bullish candles (on light volume) across the major markets. On the day SPY gained 0.63% (to a new all-time high), DIA gained 0.75%, and QQQ gained 0.63% (to a new all-time high). It is worth noting that breadth continued to decline. The VXX fell 2% to 29.05 and T2122 rose to 64.58. 10-year bond yields rose to 1.225% and Oil (WTI) climbed 1.4% to $69.10/barrel.

During the day, in a sign of a very competitive labor market, TGT joined WMT, SBUX, and CMG in offering a program to pay for 100% of employee undergraduate college and book fees. After the close, F told CNBC that it is offering a buyout package intended to reduce its workforce by 1,000 employees. In separate car industry news, President Biden set a national goal of having 50% of all cars sold to be electric by 2030. The announcement was made while flanked by the executives of F, GM, and STLA (formerly Fiat-Chrysler), but noticeably absent from the event were representatives of TSLA, NKLA, HMC, TM, etc.

In virus-related news Thursday, AMZN, BLK, and WFC joined the growing ranks of companies that have postponed their workforce’s return to the office. This came as the daily average of new cases has climbed back to about 95,000, up 50% from one week ago. UAL also announced it will be among the companies requiring employees to be vaccinated before returning to work. Meanwhile, after the close, NVAX announced it will delay the submission of its request for FDA authorization of its Covid Vaccine until the fourth quarter. Oddly enough, the company says it is still on track to be making 100 million doses of the vaccine by the end of Q3, despite not having requested or gotten permission to ship.

In crypto news, JPM (whose CEO Jamie Dimon has been an outspoken critic of cryptocurrencies) had begun offering six crypto funds to its institutional and high-end wealth management customers. Ethereum (the second-largest cryptocurrency behind Bitcoin) also announced they are moving up the event which will force “miners” to already have Ethereum in order to create new coins from mid-2022 to December 2021. This will make mining that currency essentially impossible at a profit, while still not completely centralizing the crypto coin. Finally, overnight President Biden joined with the group of Senators that are pushing for stricter tax reporting on cryptocurrency transactions as an amendment to the infrastructure bill, which is headed for a vote this weekend.

Overnight, Asian markets were mixed, leaned to the downside on modest trading. Australia (+0.36%) and Japan (+0.33%) were the only significant gainers, while Taiwan (-0.44%), Malaysia (-0.40%), and Thailand (-0.39%) led the wider-spread losses. In Europe, markets are also mixed on very modest moves so far today. The FTSE (+0.05%), DAX (+0.17%), and CAC (+0.22%) are probably the strongest bourses at this hour, with many of the smaller exchanges showing more significant losses. As of 7:30 am, US Futures are pointing to a flat and mixed open ahead of Jobs data. The DIA is implying a +0.10% open, the QQQ implying a -0.10% open, and the SPY implying a +0.07% open. The dollar is up a bit with 10-year bond yields up notably to 1.257% and Oil (WTI) up 1.5% in early morning trading.

The major economic news scheduled for release on Friday includes July Nonfarm Payrolls, July Avg. Hourly Earnings, July Participation Rate, and July Unemployment Rate (all at 8:30 am). The major earnings reports scheduled for the day include AMCX, BBU, CLMT, D, SSP, FLR, GCI, GLP, GT, LEA, MGA, MODV, NMRK, NCLH, QRTEA, SPB, SRCL, VTR, and VNT before the open. There are no scheduled reports for after the close.

The world seems to be waiting on this morning’s July Jobs Report. With stocks at their highs, quarterly earnings having been very strong so far, and signs of a peaked recovery, I’m not sure what Mr. Market hopes to see from the report. However, the risk is to the downside. Regardless of the initial reaction, beware of potential whipsaw action as volatility will spike around the binary news event.

Remember, you don’t have to trade every day or even week. Trading success is about consistently winning more than you lose by following the trend and then keeping your losses small while consistently taking profits when you have them. You don’t need to call the turn or have all triple-digit gain trades. So, don’t try to predict the market. Neither should you chase price and, above all, stick to your trading rules. Focus on the process and managing what you can control. Discipline will see you through. Also, remember it’s Friday. Don’t forget to pay yourself and be ready for the weekend news cycle.

Swing Trade Ideas for your consideration and watchlist: MT, DVN, DHI, UPRO, CLF, NYCB, NOK. Rick is out but the RWO Room is open. 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.

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

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Slowing Recovery?

August 5, 2021 by Doug Campbell

With a huge miss on the private payrolls number, worries of a slowing recovery added more price volatility and once again raised the bar of uncertainty. Though the DIA and IWM show a bit of strain looking at the SPY and QQQ, one could assume jobs no longer holding within striking distance of new records. So is this constant push of bullishness warranted, or do we see a dangerous level of complacency starting to develop? Expect the challenging price action to continue with a massive day of earnings data and jobless claims before the open.

During the night, Asian markets traded mixed but mostly lower as the Chinese online gaming stocks continued to experience selling pressure. European market trade with modest gains and losses this morning as they wait on the Bank of England. As earnings roll out, U.S. futures point to a modestly bullish open with the recently problematic jobless claims number just around the corner. As you plan forward, remember the Employment Situation number before the bell on Friday.

Economic Calendar

Earnings Calendar

We have our busiest earnings calendar of the week with more the 375 companies reporting. Notable reports include AMRN, AIG, BYND, CAH, CVNA, LNG, ED, CTVA, DIN, DBX, DUK, LOCO, EVRG, EXPD, FEYE, FSR, FNKO, GPRO, GRPN, HBI, ILMN, IFF, K, MRNA, NVO, PZZA, PRTY, PENN, SEAS, SHAK, SFM, STWD, STOR, SWCH, TRIP, OLED, VIAB, SPCE, W, WOW, YELP, YETI, ZG, & ZNGA.

News & Technicals’

Today the President will announce a new national target for electric vehicles to make up 40% to 50% of all new vehicle sales by 2020. However, some EV manufactures suggest such rapid adoption faces significant hurdles such as charging infrastructure, vehicle costs, and consumer adoption. According to Sean Yokota of the SEB, stocks are headed into a correction and says Japanese markets could be among the hardest hit as the country strains to contain the spread of the delta variant. In an attempt to attract workers, Target will offer 100% of college tuition and textbooks for associate and undergraduate degrees in business-related subjects. Walmart, Chipotle, and Starbucks offer similar education programs. Treasury yields edged higher this morning, with the 10-year trading up to 1.194% and the 30-year advancing to 1.845%.

The wild volatility continued yesterday as slowing recovery worries grew after the huge miss in the number of private payrolls. That said, the SPY and QQQ remain remarkably resilient as if to say jobs no longer matter with the indexes within striking distance of new record highs. However, the consistent bullish pressure could also point to a dangerous complacency building in the market. So please don’t bother me with details and get out of my way because I want to buy something! Today is the busiest day of earnings report this season, and with jobless claims before the bell, traders should plan for the price volatility to continue. Remember to plan your risk carefully with the market-moving Employment Situation number before the market opens on Friday. Hang on tight as this data-driven rollercoaster ride continues.

Trade Wisely,

Doug

Earnings Remain Strong and Guidance Key

August 5, 2021 by Ed Carter

ADP July Nonfarm Employment came in far below (less than half of) expectations early Wednesday. Still markets shrugged off the news and only gapped down fractionally. After that initial move, trading ground sideways in the large-caps and slowly rallied in the QQQ. The exception was a significant across-the-board selloff the last 5 minutes. This left us with indecisive candles, a Doji on the SPY and Spinning Top type candles in the DIA and QQQ. On the day SPY lost 0.48%, DIA lost 0.89%, and QQQ gained 0.14%. However, this left us still in the sideways consolidation in all 3 major indices. The VXX was flat a 29.77 and T2122 fell to 32.05. 10-year bond yields remained flat at 1.174% and Oil (WTI) fell over 3.5% to $68.04/barrel.

Just before the close, Treasury Sec. Yellen said that she expects monthly inflation to be running at a level consistent with the Fed’s goal (2% per year or 0.1 – 0.2%/ month) by the end of 2021. However, she believes annual inflation readings will remain “uncomfortably high for some time.” She also reiterated the administration’s position that an eviction moratorium is needed because state and local governments have only managed to disperse 10% of the $47 billion in rental assistance that the Federal government has allocated. This is due to the program being brand new and multiple levels of government being involved.

After the close, the torrid earnings pace continued, with the only reported misses being ALB on revenue and BKNG on earnings (loss). MET, ALL, MCK, WDC, MRO, and APA were among those reporting strong beats. However, forward guidance continues to be potty as many companies do not believe they can continue to match Q2 performance.

In stock news early today, the strong earnings season continues. CI, BDX, HBI, XRAY, BLL, and IRM were among those reporting beats, without a single report missing on either line so far among major companies this morning. MRNA reported that its vaccine booster shot has produced a “robust” immune response against the Delta variant (which now makes up 95% of new cases) in Phase 2 trials. The company also beat on both lines of their earnings report. HOOD continues to be extremely volatile in its first week of trading as the company amended its filing to say that insiders and pre-IPO investors will sell almost 98 million shares. This comes after the price soared more than 50% on Wednesday while trading in a 60%-wide range.

Overnight, Asian markets were mixed but leaned to the red side on modest moves. Thailand (-1.18%) was the biggest mover as their currency fell. However, outside that anomaly, Hong Kong (-0.84%) and Shenzhen (-0.79%) led the losses. Indonesia (+0.75%) and Japan (+0.52%) paced the gainers. In Europe, markets are mostly green on modest moves at mid-day. The FTSE (-0.25%) and DAX (+0.01%) lag, but the CAC (+0.23%) is fairly typical of the rest of the continent. As of 7:30 am, US Futures are pointing to green start to the session. The DIA is implying a +0.13% open, the SPY is implying a +0.19% open, and the QQQ is implying a +0.22% open. 10-year bond yields are flat at 1.172% and commodities are mixed as the dollar is down slightly in early trading.

The major economic news scheduled for release on Thursday includes June Trade Balance and Initial Jobless Claims (both at 8:30 am) and a Fed speaker (Waller at 10 am). The major earnings reports scheduled for the day include GOLF, AHCO, ADNT, WMS, AES, APTV, ARW, ATH, AAWW. BLL, BCE, BDX, BERY, BV, BEP, BLDR, CAH, CNP, CQP, LNG, CI, XEC, COMM, XRAY, DUK, EPC, EPAM, EVRG, GIL, GTN, HBI, HII, IBP, IRM, ITRI, K, MMS, MRNA, NOMD, NRG, OGE, PAE, PZZA, PH, PRTY, PENN, PPL, PRMW, PWR, REGN, REV, SRE, SRLP, TRGP, TEN, TMX, TRI, VGR, VIAC, VSAT, W, WCC, and ZTS before the open. Then after the close, IHRT, AL, LNT, AEL, AIG, COLD, AMN, BECN, BHF, BKD, CVNA, CNDT, ED, CTVA, CVET, CWK, DBX, ENDP, EXPE, FND, FLS, G, ILMN, ITT, MTZ, MNST, MSI, NFG, NWSA, ZEUS, OTEX, CNXN, PFSI, POST, PRI, REZI, RMD, SEM, SWX, SFM, TDS, TDC, USM, VOYA, ZG, and ZNGA report.

Weekly Initial Jobless Claims are likely to decide the direction of markets early today as traders look for clues to what Friday’s July Jobs data might be (or mean). Jitters over a potential “already peaked” recovery with the Fed policy change down the road has the bulls being hesitant. Yet, the bears have made no headway either as markets just consolidated for two weeks at the all-time highs. With that said, we have drifted close to the longer-term bullish trendlines in all 3 major indices. So, a decision point for the next move may be near.

Remember, trading success is about winning more than you lose by following trend and price action and then keeping your losses small while consistently taking profits when you have them. You don’t need to call the turn or have all triple-digit gain trades. So, don’t try to predict the market. Nobody ever made a consistent living calling the top (or bottom). Neither should you chase price and above all, stick to your trading rules. Discipline will see you through. Focus on the process and managing what you can control.

Swing Trade Ideas for your consideration and watchlist: No tickers today. Rick is out but the RWO Room is open. 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

Wild Price Action

August 4, 2021 by Doug Campbell

The wild price action continued yesterday with a massive whipsaw the managed to squeak out the 42^nd record high for the year in the SP-500. With a massive number of earnings reports in the pipeline for the end of the week and jobs data, we should prepare for the price volatility to continue. With the blessing of the President, the CDC added two more months to the eviction moratorium even though the courts have ruled they do not wield power to do so. So hold on tight; the wild ride is likely to continue the rest of the week.

Asian markets traded mixed but mostly higher as a private survey showed growth in Chinese service activity though there is another infection concern in the Wuhan province. European indexes trade modestly higher this morning as they cautiously trade earnings results. However, with an earnings deluge and a pending ADP report, U.S. futures currently trade mixed to slightly lower. Still, the truth is anything is possible by the open, so buckle up the wild ride is about to take another lap.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have a big day with nearly 290 companies reporting. Notable reports include ETSY, ALB, ALL, ABC, APO, BKNG, BOOT, BWA, CVS, EA, ETR, EXC, FSLY, TWNK, HUBS, IAC, JACK, KHC, LMND, LL, MRO, MBI, MCK, MTOR, MET, MGM, NUS, PBR, DOC, QRVO, RYN, ROKU, RCL, RGR, TM, UBER, VMC, WDC, & WU.

News & Technicals’

Though the courts say the CDC does not have the authority, they went ahead with a new eviction ban with the blessing of the President through October 3^rd. The President said the legal challenge would allow time to distribute funds. In other news, Biden called on Cuomo to resign after the state Attorney confirmed multiple accounts of sexual harassment. However, Cuomo refuses to resign, so it will now be up to the state assembly to impeach or remove him from office. Yellen to support the next multi-trillion-dollar spending plan, saying she believe its necessary to remain as the world’s pre-eminent economic power. Hmm, piling on more debt helps us to remain a superpower? Treasury yields rise slightly this morning, with the 10-year trading at 1.182% and the 30-year advancing to 1.854% as we wait on the private payroll number.

With a last-minute surge, the SP-500 squeaked out its 42^nd new record to close another wild day of price action. After gapping up, sellers pushed the Dow down, breaking the consolidation support only to reverse in a volatile whipsaw that not only recovered the loss but tacked on another 200 points to boot. Such price volatility is excellent for intraday traders but very frustrating for swing and position traders who cannot matain an edge with huge price reversals of the last couple of days. For the rest of the week, markets will have jobs data to digest, along with a deluge of earnings reports. We begin with the ADP private payrolls number before the bell today, followed by Jobless Claims on Thursday and the Employment Situation on Friday morning. I suspect the wild price action is likely to stay with us through the rest of the week. So fasten your seatbelt tightly and plan your risk carefully.

Trade Wisely,

Doug

Nasty Whipsaw

August 3, 2021 by Doug Campbell

Gapping up to kickoff the typically volatile August market, the nasty whipsaw that followed may have woke the mean monster of uncertainty. Of course, with the VIX rising and the Absolute Breadth Index falling with more than 700 earnings reports and lots of jobs data yet to digest, a little uncertainty is understandable. Plan your risk carefully because these big price swings can chop an account to pieces as the market searches for direction from this consolidation.

Overnight Asian markets tumbled with the Chinese government saying online gaming was opium for the mind. However, European markets sport modest gains across the board fueled by positive earnings results. With jobs data just around the corner and a slew of earnings reports rolling out U.S. futures, attempt to reverse yesterday’s selling, pointing to a substantial bullish gap-up. Hold on tight as the wild ride continues.

Economic Calendar

Earnings Calendar

We have a busy day on the Tuesday earnings calendar with more than 200 companies stepping up to reports quarterly results. Notable reports include ATVI, AKAM, BABA, AMGN, ARNC, CAR, BHC, APRN, BP, CLX, CZR, COP, DISCA, DD, ETN, EXPD, BEN, HSIC, HLF, HST, H, KTOS, LYV, LYFT, MAR, MTCH, MCHP, NKLA, PSX, RL, SEE, SEDG, SRC, SPWR, VVNT, WLTW, & UAA.

New & Technicals’

Western and China’s Henan province, which is significant transport hubs grapple with the aftermath of a devastating flood likely to trigger another shipping crisis. Supply chain software firm E@open said there would probably be fewer smaller discounts during the peak Black Friday sales. CNBC’s Jim Carmer says it is the height of irresponsibility to invest in Chinese stock right now and urged investors to stay away. Europe’s recovery could be derailed due to pandemic fears. According to reports, 40% of U.K. consumers are not comfortable taking vacations abroad or going to large public gathers such as sports or music events. The White House and the Congress are engaged in a game of hot potato over who’s responsible for allowing the federal eviction moratorium to expire after the CDC director could not find legal authority to extend. Let the finger-pointing and blame game begin!

Yesterday’s nasty whipsaw and rising VIX likely planted some seeds of uncertainty yesterday, but once again, the overnight session has found reason to bounce. The bearish engulfing candles left behind in the DIA, SPY, and IWM will only be valid if they follow through to the downside, and the overnight push is trying to ensure that is not going to happen. As I mentioned yesterday, August is typically volatile but toss in supply chain challenges, fears of slowing growth, and the rising infection rates and uncertainty begins to raise its ugly head. Markets hate uncertainty! With possible market-moving jobs data later this week and over 700 earnings reports to digest, expect the wild price action to continue.

Trade Wisely,

Doug

Consolidation Continues Amidst Earnings

August 3, 2021 by Ed Carter

Monday was a “fade the gap” kind of day with a modest gap higher at the open met with all-day selling, closing near the lows. The SPY printed a Bearish Engulfing candle and the DIA printed a Bear Engulfing of a Doji. However, all 3 major indices stayed in their recent consolidation ranges. On the day, the SPY lost 0.20%, the DIA lost 0.32%, and QQQ gained 0.01% after having gapped up a bit more than the large-cap indices. The VXX gained almost 4% t o31.34 and T2122 remains in the mid-range at 52.07. 10-year bond yields fell to 1.174% and Oil (WTI) dropped 3.45% to $71.40/barrel.

During the day there was a bit of news on the virus front. The 7-day average of new cases in the US has reached almost 73,000 again (surpassing last summer’s peak). While hospital space is an issue in some areas (for example, only 7 available ICU beds for 3 million people in Austin TX and the state of LA report they’ve reached the highest level of hospitalization since the start of the pandemic), fortunately, death rates have not spiked with cases (7-day average is at 317/day). The White House announced the country had reached the goal of 70% of adults being at least partially vaccinated, albeit about a month later than the goal.

After the close, Fed (voting) member Waller told CNBC that he could see the possibility of a reduction in bond-buying activity starting as soon as October. However, he would need to see strong jobs reports in August and September before he agreed to any such tightening. As with other members of the FOMC, he said that the data the Fed is seeing continues to indicate that inflation is transitory, but that there is some evidence this might not be the case.

It has started off as another good day on the earnings front. However, it is notable that there are more misses today than any day so far this earnings season. Chief among those misses were LLY (came in short on the bottom line) and CLX (missed on both lines and guided lower as it says the pandemic surge has passed. However, there are still plenty of beats, including COP and PSX in the oil space, UAA and RL in clothing, and DISCA in finance. In non-earnings news, PEP announced it will sell its juice brands, including Tropicana to a French private equity firm for $3.3 billion.

Overnight, Asian markets were mixed on modest moves. Japan (-0.50%), Shanghai (-0.47%), and Shenzhen (-0.41%) paced the losses. Meanwhile, India (+1.55%), Thailand (+1.01%), and Indonesia (+0.56%) led the gainers. However, in Europe, markets are green across this board so far today. The FTSE (+0.30%) and DAX (+0.20%) are typical of the continent, with the CAC (+0.98%) being an outlier to the upside. As of 7:30 am, US Futures are pointing to a mixed, but modestly green open. The DIA is implying a +0.46% open, the SPY implying a +0.34% open, and the QQQ implying a +0.09% open. 10-year bond prices are also up and the dollar down in early trading Tuesday.

The major economic news scheduled for release on Tuesday is limited to June Factory Orders (10 am) and a Fed speaker (Bowman at 2 pm). The major earnings reports scheduled for the day include BABA, ATI, AME, ARNC, BHC, BCC, BP, BHG, CWH, CLX, COP, CRSR, DISCA, DD, DNB, ETN, SATS, LLY, EXPD, FNMA, FIS, FCNCA, BEN, IT, HSC, HSIC, INCY, INGR, IGT, J, KKR, LHX, LCII, LGIH, LDI, LPX, MAR, NVT, OMI, PSX, PBI, PEG, RL, SEE, SUN, BLD, UAA, VNTR, WMG, WAT, WEC, WLK, WLTW, XYL, ZBRA, and ZBH before the open. Then after the close, ATVI, AKAM, AFG, AMGN, ANDE, AIZ, CAR, CZR, CNR, CW, DK, DVN, ET, ENLC, NVST, FMC, FNF, FRG, HLF, HST, H, JAZZ, KAR, LYV, LYFT, MCY, OI, OXY, OKE, PAA, PRIM, PRU, PSA, RGA, TX, UNM, and XP report.

Jitters over the resurgence of Covid at the same time the economy may have already reached peak recovery mode and stimulus is fading has markets concerned. However, it would be quite a stretch to say we are seeing any panic. Markets seem to want to open Tuesday inside of yesterday’s candle…just in the consolidation area. So, again the trend remains bullish and all 3 major indices remain very near their all-time highs. This is letting the moving averages catch up and is a healthy thing for a trend.

Don’t get caught trying to predict the market. Nobody ever made a consistent living calling the top (or bottom). Remember, trading success is about winning more than you lose by following trend and price action and then keeping your losses small while consistently taking profits when you have them. You don’t need to call the turn or have all triple-digit gain trades. So, don’t chase price, predict turns, and above all, stick to your trading rules. Discipline will see you through. Focus on the process and managing what you can control.

Swing Trade Ideas for your consideration and watchlist: TEVA, PSTG, JETS, LEVI, QID, RIOT, GLW. Rick is out but the RWO Room is open. 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

Resting Consolidation

August 2, 2021 by Doug Campbell

Though we had a little pushing and shoving in the price action last week, the resting consolidation in the DIA, SPY, and QQQ was technically healthy after such a wild selloff and recovery. With three indexes within striking distance of new records, traders and investors will focus on jobs data this week, and we may experience some choppy price action as we wait. First, however, we begin the week with some key inflation data with the PMI report this morning. With about 2/3rds of the SP-500 reporting this week, there will be a lot of data for the market digest. So plan carefully and be ready for just about anything.

Asian markets began the month green across the board, with the SHANGHAI leading the way up 1.97% at the close. European markets are trade mixed with modest gains and losses this morning. As earnings roll out and facing PMI and ISM numbers, U.S. futures point to bullish open to kick off this busy week of earnings and jobs data.

Economic Calendar

Earnings Calendar

To begin the first trading week in August, we have nearly 100 companies stepping up to report. Notable reports include ALX, ANET, CVI, FANG, EMN, RACE, GAIA, GPN, GPRE, HSBC, IPI, L, MOS, NXPI, OHI, ON, OTTR, PXD, O, SPG, TTWO. TSEM, RIG, & WMB.

News & Technicals’

Federal unemployment programs that have paid jobless benefits since March 2020 end September 6^th. At this point, Congress does not appear willing to extend them again. The U. S. Senate on Sunday finalized the text for its 2700 page $1 trillion infrastructure bill. Treasury yields rise this morning ahead of PMI data, with the 10-year trading at 1.242% and the 30-year advancing to 1.916%. The reopening of hospitality services using vaccine passes has drawn criticism due to the rising infection rates. Though the steel demand is on the rise, the Chinese government is likely to lower the production in the second half of the year, dropping it below 2020 levels.

The resting consolidation over the last week in the DIA, SPY, and QQQ held above support levels, though we did have some modest pushing and shoving by the bears. As we begin the typically choppy August, all but the IWM are within striking distance of new record highs. However, the Friday Employment Situation number will be critical if the market is to continue its advance. Though the premarket activity suggests a bullish open, keep a close eye on the consolidation resistance because we may experience choppy price action as we wait on all the jobs data later this week. Stay with the bullish trend but once again avoid overtrading and remain flexible should the bears find a reason to attack.

Trade Wisely,

Doug

Treasury to Conserve Cash

August 2, 2021 by Ed Carter

Friday saw a gap down across the board for stocks. However, the bulls stepped in and immediately began rallying. This early rally held up in the QQQ, while the DIA faded and then all the major indices ground sideways. This left us with a black-bodied Doji in the DIA, a white Inverted Hammer in the SPY, and a nice white-bodied candle in the QQQ. On the day, SPY lost 0.48%, SIA lost 0.38%, and QQQ lost 0.52%. The VXX gained 2.5% to 30.21 and T2122 fell back to mid-range at 60.69. 10-year bond yields fell to 1.224% and Oil gained a fraction to $73.76/barrel.

During the day, WMT joined the chorus of companies that will require employees to be vaccinated. In this case, WMT mandated vaccination only for corporate office workers, regional managerial staff, and anyone who works in multiple stores. Single location workers, such as hourly store and warehouse workers will not yet be required to comply.

The Treasury Department announced that it will begin implementing “emergency cash conservation steps” immediately. These efforts are needed to avoid breaking the federal borrowing limit after a two-year suspension of that limit expired Saturday. The steps will allow Treasury to shift money in order to keep paying federal bills for two to three months. Over that time, Congress can either suspend the limit again, drastically cut spending or decide to allow the country to default on debts. Additional suspension is by far the most likely outcome.

The pandemic ban on evictions also ended Saturday. Analysts expect a historic wave of evictions to be coming along with a major increase in foreclosure activity. This will have impacts on REIT, banking, and even homebuilding industries. However, there is not a good indication as to how these impacts will be distributed amongst those industries.

Overnight, Asian markets were mostly strongly green, with a couple of minor and modest exceptions. Shenzhen (+2.24%), Shanghai (+1.97%), and Japan (+1.82%) led the gains. However, significant gains were widespread. Europe is following Asia’s lead so far Monday. Only Denmark is in the red, while the FTSE (+0.69%) and CAC (+0.62%) are typical of the continent. The DAX (+0.03%) is the laggard at mid-day. As of 7:30 am, US Futures are pointing to a green open. The DIA is implying a +0.30% open, the SPY implying a +0.41% open, and the QQQ implying a +0.41% open. The dollar is down this morning and 10-year bond rates are up modestly as Oil is down well over one percent in early trading.

The major economic news scheduled for release on Monday is limited to Mfg. PMI (9:45 am) and ISM Mfg. PMI (10 am). The major earnings reports scheduled for the day include ARCB, CAN, RACE, GPN, GPRE, HSBC, JELD, ON, and TKR before the open. Then after the close, ACHC, AWK, ARGO, ANET, BRKR, BWXT, COLM, CLR, CVI, FANG, EMN, NSP, ITUB, KMT, LEG, MOS, NXPI, PXD, O, REYN, SBAC, SPG, SEDG, TTWO, RIG, TA, UCTT, UNVR, WMB, and WWD report.

The Senate finished the text of a bipartisan infrastructure compromise. The trillion-dollar bill will include $550 billion in new spending on roads, bridges, water distribution infrastructure, etc. This should see votes coming later week in the Senate. However, the big news of the week will be the July Jobs report and more earnings reports. The good news should be that so far earnings have been outstanding this quarter. Forward guidance and whether companies can repeat the feat in the fall is another question. Finally, Covid cases are continuing the recent increase. However, coming off very low levels means that the medical system has more capacity available and while hospitalizations are also up, outcomes are better with deaths not rising again too much at least as of yet.

As the new month begins, traders are hopeful (coming off 6 winning months). Just as I cautioned against letting down days sway you, don’t let giddy days hurt your discipline either. Trading success is not made in one trade, one day, or one week. Success is all about batting average and adding up those singles and doubles. So, always manage your current positions first. Don’t chase price, predict turns, and above all, stick to your trading rules. Discipline will see you through. Focus on the process and managing what you can control.

Swing Trade Ideas for your consideration and watchlist: PSTG, UNG, TEVA, AAPL, MRVL, BSX, PACB. Rick is out but the RWO Room is open. 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

Briefly touched the sky.

July 30, 2021 by Doug Campbell

Shrugging off the GDP and jobless claims, miss the DIA and SPY briefly touched the sky, printing new records but was unable to hold there into the close. Amazon reported another $100 billion quarter but missed expectations and guided lower slipping more than 200 points after the bell. Though the futures suggest a little selling pressure, this morning, anything is possible as we digest more than 125 earnings reports and react to Employment cost and Personal income data before the open.

Asian markets had a rough night closing in the red across the board, led by the NIKKEI falling 1.80%. European markets are also retreating this morning, seeing red across the board as earnings roll out. Ahead of another big day of data, the U.S. futures point to a lower open, with the NASDAQ leading the way down 1% after the AMZN miss.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we finish the week with more than 125 companies reporting. Notable reports include ABBV, BLMN, BAH, COG, CPRI, CAT, CBOE, CERN, CVX, CL, XOM, HUN, ITW, JCI, LIN, LYB, NWL, PG, QSR, VFC, WPC, GWW & WY.

News & Technicals’

Amazon gave a weaker-than-expected outlook for the third quarter. Sales topped $100 billion for the 3^rd quarter in a row but missed expectations and look to open more than 200 points lower this morning. Tesla has agreed to pay $1.5 million to settle claims that one of the company’s updates temporarily limited maximum battery charging, paying owners $625 each. The company also suffered a setback after a Tesla Megapack battery ignited in Australia’s Victoria State. The 19-member Eurozone economy grew by 2% in the three months ending in June, reporting an annual inflation projection to reach 2.2%. Treasury yields are pulling back again this morning, with the 10-year falling to 1.247% and the 30-year dipping to 1.904% ahead of the June personal consumption index and employment cost index numbers.

Both the DIA and SPY briefly touched the sky, printing new record highs before slipping back before the close. Though there appears to be a little selling pressure in the futures this morning, the DIA, SPY, and QQQ remain in bullish patterns. A substantial miss on yesterdays GDP and jobless numbers topping expectations didn’t seem to bother the bulls at all as they continued to charge higher. The China tech crackdown is also not slowing down the bullish activity, with CNBC reporting $3.6 billion flowing into the stocks in a week ending Wednesday. The buy the dip crowd is still working hard. The only index suffering technical damage is the IWM, still lingering below its 50-day average though well-off recent lows. As we wind down the week, I will once again repeat; stay with the trend, avoid overtrading, and have a plan to protect your capital should the market stumble from these lofty valuations.

Trade Wisely,

Doug

AMZN Partial Miss Reinforced Econ Data

July 30, 2021 by Ed Carter

Markets opened basically flat on Thursday before putting in a slow morning rally and a slow afternoon fade. So, generally, it was a sideways nothing day that continued the consolidation in all 3 major indices. All 3 indices put in upper wicks and small bodies, but you would NOT call any of them Shooting Star candles. On the day, SPY gained 0.40%, DIA gained 0.42%, and QQQ gained 0.18%. All 3 indices are very near all-time highs again. The VXX fell to 29.49 and T2122 rose just into the edge of the overbought territory at 81.99. 10-year bond yields rose back to 1.266% and Oil (WTI) was up 1.5% to $73.53/barrel.

During the day Q2 GDP came in far below expectation. While we still saw 6.5% GDP growth for the quarter, analysts had estimated the growth would be 8.5%. Weekly Jobless claims also came in a bit above expectation (400k vs. 380k est.). Then mid-morning June Pending Home Sales shrank 2%. However, markets shrugged off this news and traded as if everything was fine.

After hours, AMZN reported a massive beat on earnings and over $113 billion in sales for Q2, but still missed on revenue by over $2 billion. This comes as the pandemic “stay at home shopping” boost fades. The stock was hammered hard in post-market trading, down 6.5%. Almost all the other after-hours earnings reports were beats on both lines. PINS beat on both lines, but obliterated in post-market trading, down 21% as of 4:30 pm after reporting that it lost users during the quarter.

This morning the incredibly strong earnings season continued. Almost all reports came in as beats on both lines. The only misses reported were NWL missing on revenue and JCI barely missing (by 4/100 of a cent) on earnings. CHTR, AON, LYB, VFC, CPRI, PG, and CVX in particular reported significant beats. A few buyback plans, such as CVX were announced. Another great day on reports of the quarter past.

Overnight, Asian markets were red across the board. Japan (-1.80%) and Hong Kong (-1.35%) led the region lower. In Europe, there are a few minor exchange exceptions, but in general the continent is also in the red as of mid-day. The FTSE (-0.82%), DAX (-0.74%), and CAC (-0.09%) are pretty typical of the spread among European bourses. As of 7:30 am, US Futures are also pointing to a gap lower at the open. The DIA is implying a -0.33% open, the SPY implying a -0.66% open, and the QQQ implying a 1.04% open following the AMZN disappointment. 10-year bond yields and commodity prices are also down, perhaps unrelated to the dollar which is showing only tepid strength this morning.

The major economic news scheduled for release on Friday is limited to June PCE Price Index, Q2 Employment Cost, and June Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am). Fed member Brainard also speaks long after the close (8:30 pm). The major earnings reports scheduled for the day include ABBV, AXL, AON, AVNT, BBVA, BLMN, BAH, COG, CPRI, CRI, CAT, CERN, CVX, CHD, CNHI, CL, DAN, XOM, HRC, HUN, ITW, IMO, JCI, LAZ, LIN, LYB, NWL, PBR, POR, PG, QSR, TU, TIXT, VFC, GWW, and WY all before the open. Then after the close, there are no major reports scheduled.

It looks like AMZN reporting just their third-ever $100 billion quarter of revenue, but missing by over $2 billion, was the tipping point for fear. Earlier missed economic reports had not moved markets. Still, after a night of reflection, world markets are moving lower so far today. Remember that we are still very near all-time highs and the bullish trend remains in place. So, don’t get too far out on a bearish limb over a pullback. Also, keep in mind that it is Friday and month-end. So, be ready for the weekend new cycle, lightening up, evening up, and hedging as appropriate.

Don’t let a gap or loss get you down. It happens. Remember, trading success is not made in one trade, one day, or one week. Success is all about batting average and adding up those singles and doubles. So, manage your current positions first. Don’t chase, predict turns on one candle, and stick to your trading rules. Discipline will see you through. Focus on the process and managing what you can control. Finally, Friday is payday. So don’t forget to pay yourself.

Swing Trade Ideas for your consideration and watchlist: No Tickers Today. Rick is out but the RWO Room is open. 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