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.
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.
Ed
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.
🎯 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
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 6th. 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.
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.
Ed
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.
🎯 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
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 3rd 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.
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.
Ed
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.
🎯 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 Fed stands pat, the Senate advanced the $550 billion infrastructure plan, and Facebook posts blowout earnings but looks ahead for growth to slow. As a result, the SPY and QQQ are within striking distance of new records, and though the DIA left behind a bearish engulfing candle, the overall price pattern remains bullish. With a huge round of earnings, GDP, and Jobless claims coming our way, there is a lot of data to digest, and the potential for volatile prices continues. Plan your risk carefully as the bull run continues to extend.
Overnight Asian markets rebounded, led by Hong Kong, surging 3.30% after China backs off on the tech crackdown. European market advance seeing green across the board after the Fed decision. U.S. futures reverse overnight lows pointing to a Dow gap up more than 100 points as we wade through earnings data waiting on the GDP and claims.
Economic Calendar
Earnings Calendar
We have the highest number of earnings reports this week on the Thursday calendar, with more than 225 fessing up to results. Notable reports include MO, AER, AMZN, bud, MT, AZN, CC, CNX, DECK, FSLR, GILD, HSY, HBAN, KDP, LH, LBTYA, MMP, MLM, MA, MPW, MRK, MSTR, TAP, NOK, NOC, OPK, OSTK, PINS, SPGI, SWKS, SO, STM, SU, TMUS, TWLO, X, VLO, WWW & YUM.
News & Technicals’
The Senate has advanced the $550 billion infrastructure plan targeted into transportation, utilities, and broadband. The highly anticipated Robinhood IPO kicks off today, with some saying there’s considerable upside potential. The FOMC moved slightly toward reversing its easy-money policies on Tuesday while keeping the interest rate near zero. However, Jerome Powell said the committee wants to see more data and may now wait until November to begin tapering. Facebook tops earnings expectations but warned it expects a significant growth slowdown. Treasury yields are slightly lower this morning ahead in reaction to the Fed decision, with the 10-year falling to 1.249% and the 30-year dipping to 1.898%.
We saw some choppy price action yesterday, as the DIA, SPY, and QQQ hold very bullish price patterns. The SPY is easily in striking distance of new record highs, and the QQQ is not far behind despite the lackluster price reactions in the big tech blowout earnings. The DIA finished the day leaving behind a bearish engulfing candle, but that will only matter if it follows through to the downside today. That said, Dow futures point to a gap up open of more than 100 points with the premarket pump underway. First, of course, we still have to get past a huge wave of earnings reports, the latest reading on GDP, and Jobless claims. The GDP has the potential of coming in hot signaling inflation, and of course, jobless numbers missed last week though eventually ignored as the bulls charge forward. So expect the volatile price action to continue as the market digests all the data.
Wednesday brought us a blah day with a flat open. That led to a sideways grind as traders waited on guidance from the Fed. However, the Fed held course and markets just kept drifting sideways into the close. This left us with Doji-type candles in the SPY and QQQ as well as a small Bearish Engulfing candle in the DIA. However, in general, you could say the consolidation just continued. On the day the QQQ gained 0.38%, SPY lost 0.04%, and DIA lost 0.36%. The VXX fell almost 3% to 29.99 and T2122 rose but remained in the mid-range at 68.46. 10-year bond yields were flat at 1.238% and Oil (WTI) rose one percent to $&2.37/barrel as the dollar fell on the day.
As mentioned, the Fed kept its easy policy (not changing its rates or bond-buying programs). However, they did say the economy continues to improve, despite concern over the Delta variant. Some analysts say this is an admission that tightening is coming soon, but Fed Chair Powell went on to say “the Fed is nowhere near considering a rate hike” and “we see ourselves having some ground to cover to get there” in reference to tapering. In either case, markets stayed the course as that news was digested in the afternoon.
Virus impacts were the other story of the day, as both GOOG and FB said that they will require employees to be vaccinated before they return to the office. The White House also announced that President Biden will (as had been rumored) require that federal employees be vaccinated as well. In addition to vaccination requirements, GOOG also postponed its “return to office” deadline until at least October. On the mask front, AAPL said it will adhere to CDC guidelines by requiring masks in many US stores, regardless of vaccination status. These are all signs the virus may still be a threat to the economy and business performance, but markets have largely moved on for now.
After hours, the vast majority or earnings reports continued to be strong. FB posted a 19% beat on earnings, but then warned of a significant growth slowdown. However, it then warned of “significantly decelerating growth” over the second half of the year. URI missed on the bottom line and PYPL missed on revenue. The pattern is holding this morning with the vast majority of companies reporting beats on the top and bottom lines. Many of those were strong beats of 20% or more (including VLO, which beat by 250%). The only exceptions seems to be MRK and MLM, who both missed on earnings, as well as HLT and CTXS who both missed on revenue.
Overnight, Asian markets were green across the board, with the lone exception of a minor loss in Malaysia (-0.16%). Shenzhen (+3.05%) and Hong Kong (+3.30%) led the bounce back after their recent “China Regulatory Crackdown” losses, but gains were widespread with Taiwan (+1.56%), Shanghai (+1.49%), and Singapore (+1.24%) also making significant moves. In Europe, as of mid-day markets are following Asia and leaning strongly to the green. The FTSE (+0.90%), DAX (+0.39%), and CAC (+0.77%) are typical of the continent so far today. As of 7:45 am, US Futures are mixed. The DIA is implying a +0.32% open, the SPY implying a flat +0.09% open, and the QQQ implying a -0.22% open. The dollar is down this morning, meaning most commodities are strong and 10-year bond yields are unchanged.
The major economic news scheduled for release on Thursday is limited to Q2 GDP and Weekly Initial Jobless Claims (both at 8:30 am) and June Pending Home Sales (10 am). The major earnings reports scheduled for the day include AER, AGCO, ACI, ADS, AB, MO, AMT, BUD, MT, ARES, AZN, BAX, BC, CARR, CBRE, CX, CTXS, CCO, CMS, CMCSA, DBD, ERJ, EME, FLEX, FTS, FCN, GTX, GVA, GPI, HSY, HLT, HBAN, ICE, IP, JHG, KBR, KDP, KEX, LH, LKQ, MDC, MMP, MLM, MAS, MA, MRK, TIGO, TAP, COOP, NLSN, NOK, NOC, ONEW, OSK, PATK, PBF, BTU, PCG, PPC, PRG, RLGY, RDS.A, SPGI, SAIA, SBH, SNY, SNDR, SAH, SO, STM, TROW, TMHC, TFX, TPX, TXT, VLO, VSTO, VC, WAB, WFRD, WST, WWW, XEL, and YUM all before the open. Then after the close, AMZN, ATR, AJG, TEAM, AVTR, BZH, CC, DXCM, DLR, EIX, EW, ERIE, FSLR, FTNT, FTV, GILD, GFF, HUBG, KMPR, KLAC, LBTYA, LPLA, MATX, MTD, MHK, MRC, OPK, PINS, QGEN, RSG, SKYW, SWKS, SWN, TMUS, TXRH, TWLO, VRTX, WELL, WERN, and INT report.
Remember that we are very near all-time highs and the bullish trend remains in place. However, the week-long consolidation is still the short-term market direction, possibly indicating resistance above, but more likely just indicating a pause for bulls to gather direction. In this environment, the steady drumbeat of earnings beats, announcements of buyback programs, and rosy guidance give the bulls the decided edge, but certainly no guarantees on a very short-term basis.
Remember, trading success is not made in one trade, one day, or one week. It’s about batting your average and adding up those singles and doubles. So, manage your current positions first. Don’t chase, stick to your trading rules, and maintain discipline. Success comes from your consistency. This means focusing on the process and managing what you control. Limiting your losses and taking profits when we get them is the key.
Ed
Swing Trade Ideas for your consideration and watchlist: OXY, SLV, IAG, NEM, XOP, DKNG, BAC, WFC, PSTG, DISCA, KR. 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
With yesterday’s mild selling, there was no technical damage created by the DIA, SPY, and QQQ. However, the rising VIX, weak Absolute Market Breadth Index, and the bearish engulfing candle left behind on the QQQ may perhaps warrant a little caution should it follow through to the downside today. That said, with the estimate smashing earnings from AAPL, MSFT & GOOGL, there is no reason to believe at this point that the bulls are willing to give up this tremendous bull run. So stay focused if should the market stumble and remember that anything is possible with all the data coming our way today.
Overnight Asian markets traded mixed with Hong Kong bouncing after a nasty two-day tech selloff. European market trade cautiously higher this morning reacting to earnings and waiting on the Fed decision. With a massive number of earnings events, trade data, oil supply numbers, and the FOMC this afternoon, buckle up for another hectic day of price action.
Economic Calendar
Earnings Calendar
Another busy day on the Hump Day earnings calendar with nearly 200 companies listed, but there are several unconfirmed. Notable reports include FB, ALGN, ADP, BA, BMY, CN, CAJ, CRUS, CME, DB, F, GRNC, GD, GSK, HES, HUM, IRBT, LRCX, LPL, MCD, MTH, NSC, ORLY, OC, PYPL, PFE, PPC, QCOM, NOW, SHOP, SAVE, SPOT, TOM, VALE, WING, XLNX, XPO, YNDX, & YUMC.
News & Technicals’
AAPL, MSFT & GOOGL smashed earnings estimates after the bell yesterday, but the response in the stocks was relatively muted. So perhaps everyone is now in the wait-and-see mode for the FOMC decision and the Powell press conference later this afternoon. Treasury yields ticked a little higher this morning waiting on the FOMC, with the 10-year trading up to 1.254% and the 30-year advancing to 1.911%. According to reports, the Fed may begin talking about tightening their easy money policies and will also express concerns about the rapid spread of the delta variant. Kelvin Tay of UBS Global Wealth is warning this morning about bottom-fishing Chinese tech stocks. He says Chinese markets could see further losses from here, with funds likely swaying toward the liquidation side.
Though we saw some selling pressure yesterday, the DIA, SPY, and QQQ suffered no technical damage. However, with the QQQ leaving behind a bearish engulfing candle, it may be wise to exercise little caution should that happen to follow-through this morning. As the bulls worked to shrug off the substantial, durable goods miss, it’s interesting to note that the VIX closed the day higher. Also noteworthy is a rotation into consumer staples seems to be underway. With another massive day of earnings data and the FOMC decision this afternoon, anything is possible. So stay flexible and focused because of all this emotion and create some swift and challenging price action. That may be good for experienced day traders but can prove highly frustrating for swing traders as price wildly whips.
Tuesday saw markets gap down at the open and then follow through as traders took profits in front of the after-hours big tech reports to come. However, the bulls could not be kept down all day as they came back in the last couple of hours of the day. This led us to close well up off the lows, creating Hammer-type candles in the large caps with the DIA even closing as a white body hammer. Still, on the day SPY closed down 0.46%, DIA down 0.22%, and QQQ down 1.09%. The VXX gained 3.4% to 30.86 and T2122 remains in mid-range at 53.33. 10-year bond yields fell sharply to 1.238% and Oil (WTI) was down a fraction to $71.78/barrel. Most other commodities were down as well, even as the dollar was lower on the day.
During the day, the virus made more headlines as Delta variant infections are spiking, although thankfully without a corresponding spike in deaths. The CDC reported that the new studies indicate that previous infected/recovered or vaccinated people can spread the Delta variant. As a result, they are now calling for people to again wear masks indoors, regardless of vaccination status in areas where the infection rate is up (essentially the entire South of the country). Bloomberg also reported several instances of major employers telling employees to “get vaccinated or get a new job.” This comes as the White House reported it is considering a vaccination mandate for Federal employees.
After hours, AAPL, MSFT, and GOOG all reported massive beats on both lines. AAPL reported the iPhone sales increased 50% year-over-year and GOOG gave us a 41% beat on earnings as examples. Beyond those “big 3,” the rest of the after-close reports also all came in positive. There was not a single miss on earnings among the 20 majors reporting, with only 2 missing on revenue. So, the strong earnings story continues, although it is not the earnings, but the reaction that matters. That being the case, all the major tech names and futures fell on the reports.
So far this morning, the strong earnings season continues. Every report includes a beat on earnings and only GD has missed on revenue. MCD, BA, PFE, BMY, HUM, TMO, and others all reported very strong quarters, in most cases handily beating the expectations of analysts. In other morning news, mortgage rates dropped to a 6-month low of 3.01%. This caused refinance home loans to jump 9% week-over-week. However, new home loan applications fell 2% for the week.
Overnight, Asian markets were mixed but mostly lower on the day. Hong Kong (+1.54%) led the comeback after successive days of beatings. On the other hand, Japan (-1.39%) paced the losses after acting as a safe haven the prior couple of days. In Europe, stocks are mostly green with only Greece and Norway bucking the trend. The FTSE (+0.19%), DAX (+0.20%), and CAC (+0.69%) were fairly typical of the modestly green trading at mid-day. As of 7:30 am, US Futures are pointing to a mixed and modest open. The DIA is implying a -0.14% open, the SPY implying a +0.07% open, and the QQQ implying a +0.28% open. The dollar is up so far this morning and so are 10-year bond yields, now at 1.261%.
The major economic news scheduled for release on Wednesday includes June Trade Balance and June Retail Inventories (both at 8:30 am), Crude Oil Inventories (10:30 am), Fed Rate Decision and Fed Statement (both at 2 pm), and Fed Chair Press Conf. (2:30 pm). The major earnings reports scheduled for the day include AMG, APH, ADP, AVY, BA, BMY, BG, GIB, CME, CSTM, EXP, EEFT, EVR, FMX, GRMN, GNRC, GD, GSK, HES, HUM, LFUS, MHO, MCD, MCO, NSC, ODFL, OC, PAG, PFE, ROL, R, SC, SHOP, SLGN, SPOT, SCL, TEL, TDY, TEVA, TMO, TNL, UMC, VRT, and WNC all before the open. Then after the close, ACCO, AFL, AEM, ALGN, ALGT, ATUS, NLY, AR, ASGN, AVB, BHE, CP, CG, CHDN, CMPR, CINF, CNO, CTSH, FIX, CYH, ECHO, ESI, ENSG, EQT, EQIX, RE, FB, F, FBHS, GFL, HIG, HOLX, IR, INVH, KGC, KL, LRCX, MTH, MEOH, MAA, MKSI, MOH, MUSA, MYRG, ORLY, OII, PYPL, PTC, QCOM, RJF, RBC, SIGI, SCI, NOW, SAVE, SSNC, SU, TTEK, TROX, TTMI, URI, WH, XPO, and YUMC report.
With the Fed announcements and the presser coming this afternoon, we are likely to see a wait-and-see game most of the morning. Still, earnings continue to be red hot. In fact, they are so hot that Mr. Market is feeling like the companies may not be able to repeat the performance next quarter, despite raised guidance in most cases. This is the likely cause, at least in part, of the selloffs on the great news.
Remember that you don’t have to trade every day. Trading pre-Fed is like trading through earnings. It tends to be more of a bet as volatility around the Fed meetings is higher and often comes in multiple moves. This is especially true when there is no heavy consensus on what kind of language change might be coming (as today).
If you are taking positions today, be nimble or hedged. So, be sure to manage your current positions first. Don’t chase, stick to your trading rules, and maintain discipline. Success comes from your consistency. This means focusing on the process and managing what you control. Limiting your losses and taking profits when we get them is the key. Remember, trading success is not made in one trade, one day, or one week. It’s about batting your average and adding up those singles and doubles.
Ed
Swing Trade Ideas for your consideration and watchlist: BTBT, REI, BCRX, UAL, XLI, FAS, KR, XHB. 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
