Markets and Volatility On Pause for Fed

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Following a PPI that came in showing 6.6% annual inflation (the highest since annual records were started in 2010, but still better-than-expected), May Retail Sales coming in lower than expected, and a NY Empire Mfg. Index that came in worse than expected, markets opened flat Tuesday.  Then after a small selloff early, they ground sideways the rest of the day.  Only a late-day mini-rally took us out up off the lows.  This left the SPY and DIA in black Hammer-type candles and the QQQ as a Bearish Harami.  Still, both the SPY and QQQ closed at the second-highest close of all time (second to Monday only).  On the day, SPY lost 0.16%, DIA lost 0.24%, and QQQ lost 0.65%.  The VXX gained 2% to 31.77 and T2122 rose, but remains in the mid-range at 70.97.  10-year bond yields were flat at 1.496% and Oil (WTI) gained almost 2% to $72.29/barrel.

In stock news after hours, LUV canceled 500 flights (15% of schedule) after the second straight day of computer system problems Tuesday.  ORCL beat on both the top and bottom lines, but guided forward at a lower-than-expected level.  The CFO of C also followed JPM’s suite from a day ago, telling a conference that they now expect a larger-than-anticipated drop (30% drop versus a year ago) in trading income this quarter.  He also said that consumers have paid down loan balances and loan income will also fall.  As a result, he expects revenue to drop roughly 15% year-on-year in Q2.  Finally, RCL has postponed its first sailing since the pandemic as 8 crew members tested positive during cruise prep.  So, all of the crew is now quarantined for 14 days and the cruise that had been scheduled to depart July 3 will sail on July 31.   

Bloomberg is reporting a consensus view essentially identical to CNBC reported yesterday on the Fed’s words and actions for today.  It is widely expected they will take no policy actions.  However, it is likely the FOMC will release wording that signals it is thinking about making a change to its policy bond-buying soon.  The dots (interest rate forecasts) are also expected to point toward a first interest rate hike in 2023.  All this would be consistent with what the Fed has said to date.  In other words, no rocking the boat, but an announcement that the dock is just over the horizon. Tone will be the key as markets look to parse words.

Related to the virus, new US infections continue to fall.  The totals rose to 34,352,185 confirmed cases and deaths are now at 615,717. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 13,577 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 3356 per day (again, the lowest number since March 2020).  

Globally, the numbers rose to 177,470,620 confirmed cases and the confirmed deaths are now at 3,839,931 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 377,371 new cases per day.  Mortality, which lags, is also falling, but remains at 8,770 new deaths per day.

Overnight, Asian markets were mostly in the red.  Shenzhen (-2.57%) and Shanghai (-1.07%) led the region lower as Chinese May Retail Sales missed expectations by 1.25%.  (Still, they had 12.4% sales growth.)  In Europe, markets a re mixed on flat trading as the world waits on the Fed.  The FTSE (-0.02%) is flat while the DAX (-0.13%) is down slightly and the CAC (+0.09%) is up slightly.  The rest of the continent is in a similar situation on slightly larger moves.  As of 7:30 am, US Futures are also pointed to a mixed, flat open.  The DIA is implying a -0.11% open, the SPY implying a -0.01% open, and the QQQ implying a +0.15% open at this point.

Wednesday is a heavy day for major economic news, headlined by the Fed. The news includes May Building Permits, May Housing Starts, May Import/Export Price Indices (all at 8:30 am), Crude Oil Inventories (10:30 am), and then Fed Interest Rate Projections (short and long-term), Fed Interest Rate Decision, Fed Statement (all at 2 pm), and the Fed Press Conference (2:30 pm).  The only major earnings report on the day is LEN after the close.   

Today is likely a “wait and see” day until 2 pm. Housing data early is not likely to push the market “off the fence” either way while we wait for Chair Powell and hope he can hit “the perfect note” in his statement. With that said, expect a dull day at least until the Fed announcements. Then expect an over-reaction in one direction to be followed by a whiplash back the other direction shortly after. (That is the typical Fed day pattern.) Finally, it also usually happens that there is a bit of a rethink again overnight the night following the Fed statements. So, after 2 pm, it is likely to be a volatile period into Thursday.

As always, follow the trend and respect support and resistance levels. However, don’t just assume those levels will hold. All trends reverse at some point and every S/R level is breached eventually. Keep moving your stops, locking in profits, and maintaining discipline. Follow those trading rules and stick to the trade plan. Remember that consistency is the key to long-term trading success.

Ed

Swing Trade Ideas for your consideration and watchlist: EMR, SAND, TXN, BR, FB, QD, BNGO. 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

|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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

FOMC Meeting Begins

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FOMC Meeting Begins

Ahead of the FOMC meeting, the tech giants lifted the SPY and QQQ to new record levels almost entirely on their own as the vast majority of the stocks slid sideways or south yesterday.  At the same time, new records were made, the VIX rallied slightly, and the absolute breadth index continued to decline with the lack of momentum.  Hedge fund manager Tudor Jones says go all-in on inflation trades if the Fed stays the course or expect a “taper tantrum,” should they make a course correction.  We will find out Wednesday afternoon what their decision will be, so plan your risk accordingly.

While we slept, Asian markets traded mixed with the Nikkei surging up 0.96% while the Shanghai fell 0.91%.  However, European markets this morning work for modest gains and new records cautiously waiting on the FOMC.  With a significant economic data dump, futures in the U.S. trade mixed, and flat as the Fed beings its 2-day meeting.  Will they or will they not react to inflation?  Market direction may well be determined by the answer at 2 PM Eastern tomorrow. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 18 companies listed, but a large number of them are unconfirmed.  Notable reports include HRB, ORCL, & LZB.

News and Technicals’

New closing records in the QQQ and SPY supported almost entirely by the tech giants, with the rest of the market largely sliping sideways or south.  According to Jamie Dimon, JPMorgan is hoarding cash rather than buying Treasuries or other investments due to the possibility of higher inflation that’s here to say.   He is one of the first investment banks to break ranks with the idea that the spike in inflation is transitory.  Hedge fun manage Paul Tudor Jones suggested to “go all-in on inflation trades” if the Fed stays the course and ignores the spike in inflation.  Tudor says the market will experience a “Taper Tantrum if they do make a course correction.”  Interestingly trade doesn’t seem to share the same inflation concerns, with the 10-year treasury notes falling to 1.484 this morning and the 30-year dipping to 2.176%.  Could it be complacency has raised its ugly head?

Today begins the 2-day FOMC meeting and a substantial economic calendar data dump that could inspire and bring in some early price volatility.  As the QQQ and SPY set new records, the T2122 indicator slid south, and the absolute breadth index declined, with just a select few tech stocks doing the heavy lifting.  That said, the SPY and QQQ index charts hold fast to bullish trends.  IWM remains below overhead resistance while the DIA looks tired and the most at risk if the bears find some inspiration.  As we wait on the FOMC decision, choppy price action would not be a surprise.  However, with PPI, Retail Sales, Industrial Production, Housing, and Manufacturing numbers just around the corner, prepare for some early session volatility.  Who knows, with so much data, the bulls or bears could find some inspiration to end this chop ahead of the Fed.

Trade Wisely,

Doug

Market Waiting on Data or Fed Direction

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Markets opened flat and then the large-caps sold off all morning, before trading sideways in a tight range most of the afternoon.  However, a rally the last hour of the day took stocks out very near their highs.  On the other hand, the QQQ sold off early, but started a rally about 10am that lasted the rest of the day.  This gave us a strong white candle and new all-time high close in the QQQ and the SPY.  Both the DIA and SPY printed Hammer-type candles.  On the day, SPY gained 0.23%, QQQ gained 0.96%, and DIA lost 0.24%.  The VXX gained a percent to 312.12 and T2122 fell back to the mid-range at 55.86.  10-year bond yields rose t o 1.496% and Oil (WTI) gained slightly to $71.03/barrel.

During the afternoon Monday, CEO Jamie Dimon said JPM has been “effectively stockpiling cash” rather than buying bonds or other assets.  He warned that the Covid-era trading boom is coming to an end, expecting less in trading revenue this Q2 as compared to a year ago.  He also said JPM disagrees with the Fed and feels “there is a very good chance inflation will be more than transitory.”  As a result, Dimon says the bank has been hoarding cash and he expects the net interest income for the year to be down from $55 billion to $52.5 billion.   

CNBC is reporting a consensus view on the Fed’s words and actions on Wednesday.  It is widely expected they will take no policy actions.  However, it is likely the FOMC will release wording that signals it is thinking about changing its policy on bond-buying.  The dots (interest rate forecasts) are also likely to point toward a first interest rate hike in 2023.  All this would be consistent with what the Fed has said in the past.  In other words, no rocking the boat, but an announcement that the dock is just over the horizon.

Related to the virus, new US infections continue to fall.  The totals rose to 34,335,239 confirmed cases and deaths are now at 615,232. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 13,189 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 348 per day (again, the lowest number since March 2020).  Related to the virus, new US infections continue to fall.  The totals rose to 34,335,239 confirmed cases and deaths are now at 615,232. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 13,189 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 348 per day (again, the lowest number since March 2020).    

Globally, the numbers rose to 177,086,088 confirmed cases and the confirmed deaths are now at 3,829,038 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 375,190 new cases per day.  Mortality, which lags, is also falling, but remains at 8,899 new deaths per day.    

Overnight, Asian markets were mixed again.  New Zealand (+1.07%), Japan (+0.96%), Taiwan (+0.92%) and Australia (+0.92%) paced gainers.  Meanwhile, Shanghai (-0.92%), Shenzhen (-0.86%), and Hong Kong (-0.71%) led the losses.  In Europe markets are also mixed, but lean green so far today.   The DAX (+0.55%), and CAC (+0.45%), and FTSE (+0.31%) lead the continent, with Norway (-1.01%) a notable exception.  As of 7:30 am, US Futures are pointing to a flat open.  The DIA is implying an unchanged open, the SPY implying a +0.10% open, and the QQQ implying a +0.14% open.  It seems markets are waiting on this morning’s data or perhaps even on more insight from the Fed.

The major economic news scheduled for Tuesday includes May PPI, May Retail Sales, and NY Empire State Mfg. Index (all at 8:30 am), May Industrial Production (9:15 am), Apr Business Inventories and Apr Retail Sales (both at 10 am).  The only major earnings reports on the day are after the close when HRB, LZB, and ORCL report.   

Premarket seems to suggest that traders are waiting on more data. The inflation, sales, and manufacturing information may give us just such a push one way or the other. Just keep in mind that we sit at all-time highs, the QQQ is a little extended from its T-line, and the DIA can’t get going (is diverging from the other major indices). In short, this means markets are undecided, rotating, or at least maybe more volatile.

As always, follow the trend and respect support and resistance levels. However, don’t just assume those levels will hold. All trends reverse at some point and every S/R level is breached eventually. Keep moving your stops, locking in profits, and maintaining discipline. Follow those trading rules and stick to the trade plan. Remember that consistency is the key to long-term trading success.

Ed

Swing Trade Ideas for your consideration and watchlist: LLNW, LAZR, BLNK, AMAT, MP, QCOM, TDOC, SAND. 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

|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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Choppy Uncertain Price Action

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Choppy Uncertain Price Action

Though inflation came in very hot, the bulls and bears stayed evenly matched, producing choppy uncertain price action while clinging to trends yet challenged by overhead resistance. So now we likely hurry up and wait for the FOMC decision on Wednesday afternoon to see if they will be the tiebreaker of this momentum-less consolidation.  Will they or won’t they begin to taper the easy money policies in response to inflation?  That is the question to be answered!

During the night, Asian markets saw bullishness though some were closed due to holidays.  European markets continue to push higher, setting new records this morning.  With a light day of earnings and economic data, the U.S. point to a flat yet slightly bullish open, with the Nasdaq leading the way to test resistance highs.  Watch for the pop the possibility of more pop and drops as we wait on the Fed.

Economic Calendar

Earnings Calendar

We have 12 companies listed on the earnings calendar with many unconfirmed earnings to kick off the week.  The only somewhat notable report I can come up with today is HEXO.

News & Technicals’

Bitcoin is surging again this morning after Musk suggests Tesla may again accept cryptocurrency as payment. However, Sygnia CEO Magda Wierzycka lambasted him saying, “What we have seen with Bitcoin is price manipulation by one very powerful and influential individual.”  Regulators may block Nvidia’s attempt to buy the chip designer Arm, whose energy-efficient chip architectures are used in 95% of the world’s smartphones.  According to reports, Qualcomm is now interested in investing if NVDA is blocked.  The biotech firm Novavas plans to file for authorization with the FDA in the third quarter after testing their Covid vaccine is safe and 90.4% effective overall.  With the FOMC just ahead, the U.S. treasury notes rose slightly this morning, with the 10-year coming in at 1.464% and the 30-year climbing to 21.52%. 

Though the bullish trends continue, the choppy uncertain price action and both the bulls and bears wondering what comes next.  Floating on a river of newly printed money, the bulls want to keep the party going.  However, the high inflation reading in last week’s CPI has the bears concerned, keeping them in play as well. So perhaps the FOMC will be the tiebreaker when they reveal their decision Wednesday afternoon.  Will they begin to taper easy money policies or keep the pedal to the metal, pumping money into the system?  We will know more Wednesday after the statement and the chairman’s press conference.  Until then, the choppy uncertain price action is likely to continue, with various meme stocks surging here and there as they gamify stock trading. So maybe the best description of the first part of this week is, hurry up and wait!

Trade Wisely,

Doug

QQQ Leading Again in Monday Premarket

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Markets started Friday off blah and just waffled sideways the rest of the day.  A last-minute rally left the QQQ and SPY near their highs for the day (SPY closing at another all-time high close).  However, the SPY closed as a Doji and the DIA as a Spinning Top, showing the indecisiveness.  On the day, SPY gained 0.18%, DIA gained 0.04%, and QQQ gained 0.26%.  The VXX fell almost 3% to 30.82 and T2122 shot back up into overbought territory at 89.57.  10-year bond yields was basically flat at 1.454% and Oil (WTI) rose three-fourths of a percent to $70.80/barrel.

During the afternoon Friday, a bipartisan panel of House Members agreed on and introduced 5 bills that would overhaul the 100-year-old antitrust laws in the US.  The group found that AAPL, AMZN, GOOG, and FB all hold monopoly power and the 5 bills would force those companies to exit certain businesses as well as impact the approval hurdles for companies that wish to merge or acquire other companies.  While a huge step, and significant, these bills still face a LONG and rough road to becoming law.  The full Judiciary Committee as well as the full House and then the full Senate would need to pass the legislation and then President Biden would need to sign.  In the meantime, huge lobbying efforts and donations from those richest of companies will be working against the bills.  However, smaller companies like SPOT, ROKU, and those that sell through the AAPL and GOOG stores support the changes. 

Sunday, Elon Musk said that TSLA would again begin accepting bitcoin in payment for its cars.  His tweet (what else would we expect) said “When there’s confirmation about 50% of clean energy usage by miners, TSLA will resume Bitcoin transactions.”  In other stock news, global shipping delays have gotten so bad that HD has now leased its own cargo ship (not containers, a whole ship) to begin operations in July.  This will free them from spot market capacity and rate fluctuations at the cost of large fixed costs.  Each ship will have about 10,000 or so TEU (20 ft Equiv. Units) of capacity, which is about 5,000 of the 40-ft. cargo containers.  RDS.A is also considering the sale of its stake in the largest US oil field, the Permian Basin (mostly in TX).  The sale could generate up to $10 billion. Then early today QCOM offered to buy at least a piece of Arm (computer cpu maker) if Softbank listed the company rather than sell it to NVDA. This comes as regulators appear to be leaning toward blocking the purchase of Arm by NVDA. Finally, RIDE was down hard in premarket as their CEO and CFO have resigned.

Related to the virus, new US infections continue to fall.  The totals rose to 34,275,783 confirmed cases and deaths are now at 614,007. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 13,516 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 383 per day (again, the lowest number since March 2020).  The first US cruise ship to resume operation had an ominous reopening.  After the 7-day cruise in the Caribbean, 2 of the 500 passengers tested positive.  

Globally, the numbers rose to 176,767,238 confirmed cases and the confirmed deaths are now at 3,820,602 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 375,431 new cases per day.  Mortality, which lags, is also falling, but remains at 9,063 new deaths per day.  

Overnight, Asian markets were mixed, but lean slightly green.  Japan (+0.74%) leads gainers while Shenzhen (-0.62%) and Shanghai (-0.58%) pace the losses.  However, the vast majority of Asian exchanges made slight moves either direct, with more on the green side.  In Europe, equities are green across the board.  The FTSE (+0.33%) leads the major exchanges with the DAX and CAC both at +0.17% so far this morning.  As of 7:30 am, US Futures are pointing to very slightly green open.  The DIA is implying a -0.04% open, the SPY is implying +0.06% open, and the QQQ is implying a small gap higher of +0.32% at this hour.

There is no major economic news scheduled for Monday.  There are also no major earnings reports on the day.   

It looks like the bulls are continuing a push in the high-tech names as the QQQ is testing all-time highs in the premarket. However, both large-cap indices are much more muted and still struggling with resistance (the SPY to pull away after breaking through and the DIA to get back to a retest). In the commodity space, dollar strength is going to give a headwind as overnight trading saw Gold down 1.2%, Wheat down 2.7%, but Oil is up 0.60%. Again, folks are looking ahead to the Fed meeting this week (where many are expecting at least more hawkish language, if not actual policy changes).

Follow the trend (the one appropriate for your trading horizon) and respect support and resistance levels. However, don’t just assume those levels will hold…they are all breached eventually. Beyond that, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Remember that consistency is the key to long-term trading success. So, keep hitting those singles and doubles.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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

|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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Consumer Price Jumped 5%

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Consumer Price Jumped 5%

As the consumer prices jumped 5%, the largest gain in nearly 30-years, the market seemed to have little to no concern.  The moral of the story stay with the trend and let’s continue to party like it’s 1999 as long as it lasts.  Although we ended the day respecting overhead resistance levels and leaving behind some uncertain price patterns, the VIX squeaked out a new closing low, suggesting inflation is nothing to worry about, at least for now.  Now we wait to find out if the FOMC will begin to shift policies next week.

Asian markets traded mixed overnight with modest gains and losses.  Across the pond, European markets trade in the green across the board as investors shrug off inflation.  With a light day of earnings and economic reports, U.S. futures once again are pumping the premarket, trying to inspire buyers to break overhead resistance to set new record highs.  Trade wisely, and have a fantastic weekend, everyone.

Economic Calendar

Earnings Calendar

We have a slow day of reports on the Friday earnings calendar with 14 companies listed but only two confirmed.  Though they are not particularly notable, the verified reports are CMCM & NATH.

News & Technicals’

Although the consumer prices jumped 5% in May, the most in nearly 30-years, the overall market seemed to not really care.  Will the FOMC respond to the rising costs?  Some are suggesting Fed will stay the course, at least for now.  Remarkably, to me, Treasury yields are pulling back this morning, with the 10-year trading at 1.443% and the 30-year dipping to 2.14%, shrugging off the surging inflation.  President Biden has endorsed the 15% global minimum corporate tax and a new tax linked to the places where companies make money.  Amazon faces another antitrust probe from the European Union as the country steps up its pressure on the tech giants.  On Friday, the G-7 nations gathering in Cornwall, England, plan to pledge 1 billion doses of the Covid vaccines to low-income nations. 

After the CPI number came in hotter than expected, the futures gapped the market higher buyers seemed to rush in for a brief period, with the Dow surging more than 200 points.  However, as prices ran into overhead resistance, the bears pushed back with a nasty whipsaw that filled the gap.  Buy the close the Dow left behind a shooting star pattern while the QQQ held firmly to gains through the SPY and IWM retreated.  The VIX held a new closing low, suggesting the hot inflation number is of little to no concern though the Absolute Market Breadth Index remained notable weak.  Long story short, stay with the trend and continue to party like it’s 1999 but don’t become complacent because someday I suspect the market will someday suddenly care.

Trade Wisely,

Doug

Anti-Rotation At Play in Divergence?

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Divergence was the word of the day on Thursday following a slightly hotter-than-expected CPI print for May.  The large caps gapped up, while the QQQ and IWM both opened flat.  However, the SPY vacillated all day while the DIA sold back off toward the prior close, the IWM sold off all day and the QQQ rallied in the morning and traded dead flat all afternoon.  This left the QQQ as a big beautiful white breakout candle, the SPY as an indecisive Spinning Top still sitting on the all-time high resistance, and the DIA as an ugly black high-wick candle that might still have held the uptrend.  IWM was also an ugly black candle that held trend.  On the day, SPY gained 0.48% (to a new all-time high close by fractions), DIA “gained” 0.09%, QQQ gained 1.04%, and IWM lost 0.83%.  This may even be a sign of the undoing of recent rotation into value names and back into tech high-flyers. Anti-rotation if you will. AMZN is a prime example from Thursday, The VXX fell almost 6% to 31.70 and T2122 fell further into the midrange at 67.21.  10-year bond yields fell significantly (despite the hot 4.9% CPI) to 1.44% and Oil (WTI) rose a quarter percent to $70.13/barrel.

During the afternoon Thursday, the Fed release statistics that showed US Household Net Worth rose to almost $137 trillion at the end of Q1 (fueled in large part by stock market and real estate price increases).  This was a 3.8% increase since the end of 2020.  During the same period, Household Debt grew 6.5% (fastest growth since 2006), Government Debt grew 6.5% (down from 10.8% the prior quarter), and Business Debt grew at 4.4% (an increase over Q4 2020). 

After a rough week, meme stocks are seeing a small (relatively speaking for meme stocks) relief rally.  GME is up 6%, CLOV is up 6%, AMC is up 6.4% in premarket trading.  For context, all of these stock are still up thousands of percent on the year, even after being more than 50% off the highs of the week.

Related to the virus, new US infections continue to fall.  The totals rose to 34,275,783 confirmed cases and deaths are now at 614,007. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 13,516 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 383 per day (again, the lowest number since March 2020).  The first US cruise ship to resume operation had an ominous reopening.  After the 7-day cruise in the Caribbean, 2 of the 500 passengers tested positive.  

Globally, the numbers rose to 175,677,082 confirmed cases and the confirmed deaths are now at 3,790,320 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 385,051 new cases per day.  Mortality, which lags, is also falling, but remains at 10,127 new deaths per day.  In China, researchers have found a “batch” on new coronaviruses that are similar, but distinct from Covid-19.  One of them was genetically very close to the original strain of SARS-CoV-2.  

Overnight, Asian markets were mixed again and once again in modest trading.  South Korea (+0.77%) and Thailand (+0.69%) led gainers while Shenzhen (-0.62%) and Shanghai (-0.58%) paced the loses.  However, in Europe, markets are green across the board so far Friday.  The FTSE is up 0.63%, the DAX up 0.55%, and the CAC up 0.78%.  This comes as DB reported that they expect “peak inflation” in the UK will be “close to 3%.”  As of 7:30 am, US Futures are tepidly green.  The DIA is implying a +0.19% open, the SPY is implying a +0.14% open, and the QQQ is implying a +0.18% open.  It is worth noting that, like Thursday, 10-year bond yields are down again in premarket to 1.443%.

The major economic news scheduled for Friday is limited to Michigan Consumer Sentiment (10 am).  There are no major earnings reports on the day.  

Thursday, markets seemed to emphatically say that they believe the Fed about inflation being transitory and no reason for quick policy changes. At least the 10-year bond is following through in the same direction early today. With no news (unless you count a potential infrastructure spending deal between 10 moderate Senators, that has no been fleshed out yet) to drive action, it is quite possible we see drift today ahead of a summer weekend. At least at this point, it looks like the QQQ and SPY are trying to follow-up gains from yesterday, while the DIA is trying to reverse an ugly move from Thursday.

Follow the trend (the one appropriate for your trading horizon) and respect support and resistance levels. However, don’t just assume those levels will hold…they are all breached eventually. Beyond that, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules. Remember that consistency is the key to long-term trading success. So, keep hitting those singles and doubles.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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

|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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

CPI Numbers

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CPI Numbers

Perhaps we can break the tight range chop today with all eyes focused on the critical CPI numbers, inflation data revealed before the open.  Some suggest the number could come at its highest level in nearly 30-years!  Will it inspire the bulls pushing the indexes to new record highs?  Or will the number engage the bears, creating some technical issues with the possible topping patterns in the charts?  Your guess is as good as mine, so stay focused and buckle up for some price volatility. 

Overnight markets traded mixed but mostly higher with modest gains and losses.  European markets hover around the flatline as they wait on the U.S. inflation data.  Ahead of the CPI, U.S. futures are trying to put on a brave face, but anything is possible by the open, depending on the market reaction.  A substantial gap is likely, so plan your risk accordingly. 

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 20 companies listed with several unconfirmed.  Notable reports include XAIR, CHWY, PLAY, PLUG, FSLR, & SIG.

News and Technicals’

The owner of the Keystone XL pipeline, TC Energy, has now offically canceled the project after President Biden revoked an essential permit earlier this year.  It would have carried 839,000 barrels per day and employed 1000’s.  India reports more than 6,100 daily Covid death in a single day though infection rates have been in decline.  According to a government announcement on Wednesday, a new 2.3 million stimulus checks for up to $1400 per person were just sent out.  In total, another 4.2 billion in payments.  Treasury yields rise slightly this morning ahead of the CPI number, with the 10-year coming in at 1.498% and the 30-year edging higher to 2.173%.  More pressure is coming to the tech Giants as the Democrats circulate draft antitrust bills aimed at Apple, Amazon, Facebook, and Google.  If passed, it could fundamentally reshape the businesses.

All eyes this morning will be on the CPI numbers revealed an hour before the market open.  Some are suggesting the number will come with the highest reading in nearly 30-years.  The market has traded in the tight range all week, challenged by overhead price resistance levels yet holding above price supports.  What happens next is anyone’s guess, but it will be nice to get enough movement to break the logjam.  With the next FOMC meeting just around the corner, today’s number could play a pivotal role in their decisions on dovish, easy money policies.  Though U.S. futures are trying to pump up the premarket, the actual open could be much better or worse depending on the reaction.  Stay flexible because new market highs could be on the cards or critical technical failures in the index charts if the bears find inspiration.  Buckle up for some volatility. 

Trade Wisely,

Doug

May CPI Print Will Call The Tune Early

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Markets turned in a mostly dull day Wednesday as traders seem to be waiting on the Premarket CPI data today.  However, an afternoon selloff took markets out on the lows and created ugly black candles in all 3 major indices.  The DIA printed a Bearish Doji Continuation pattern to boot.  On the day SPY lost 0.15%, DIA lost 0.45%, and QQQ gained 0.02%.  The VXX rose over 1.5% to 33.68 and T2122 fell just outside the edge of the overbought territory to 79.37.  10-year bond yields fell significantly to 1.492% in spite of near-unanimous expectation of rising inflation and Oil (WWTI) fell half a percent to $69.75/barrel.

Wednesday was a massive profit-taking day for the meme stocks.  AMC fell over 10%, CLOV was down 23%, WEN was down almost 13%, while GME was flat. Part of GME’s ability to hold was the announcement that two AMZN execs have been hired as GME’s CEO and CFO.  GME also reported 25% sales growth when it reported after-hours.  However, the company also declined to provide an outlook and report also included a plan to sell 5 million more shares.  GME fell 12% in after-hours on that earnings report.

Global banking regulators (Basel Committee on Banking Supervision) are proposing “conservative” rules related to Bitcoin.  Under the plan, banks would need to hold cash equal to their cryptocurrency holdings as part of their capital reserves.  This is strict compared to the “fractional reserves” required for other assets such as loans, options, or other leveraged derivatives.  In essence, this is a case of global banking authorities giving the governments of the world cover to use the banks of their countries to partially control cryptocurrency markets.  Oddly enough, bitcoin is up overnight on this news, now just under $38,000.

Related to the virus, new US infections continue to fall.  The totals rose to 34,264,727 confirmed cases and deaths are now at 613,494. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is falling again and are back down to an average of 14,019 new cases per day (the lowest number since March 2020). Deaths are also falling, just more slowly, but are now down to 409 per day (again, the lowest number since March 2020).  

The CDC reported that less than half of the JNJ vaccine doses sent to states have been administered.  This compares to PFE and MRNA, which have seen more than 83% of the doses administered and delivered a much larger number of doses to boot.  The JNJ news is a concern because many of the JNJ doses will expire by month-end.  However, Dr. Fauci (NIH) told reporters Wednesday that the FDA is considering extending the expiration date of the JNJ vaccines to avoid wasting those doses.

Overnight, Asian markets were mixed, but mostly green with Shenzhen (+1.19%) and Taiwan (+1.14%) leading gainers.  In Europe, stocks are mixed and muted as traders wait on the US inflation reading for May.  The FTSE (+0.26%) and DAX (+0.04%) are green while the CAC (-0.21%) is in the red as of mid-morning.  As of 7:30 am, US Futures are also pointing to a modest, mixed open.  The DIA is implying a +0.16% open, the SPY implying a +0.04% open, and the QQQ implying a -0.22% slight gap down an hour in front of the CPI print.

The major economic news scheduled for Thursday includes May CPI and Weekly Initial Jobless Claims (both at 8:30 am), the WASDE Report (World Ag Forecasts, at noon), and May Fed Budget Balance (2 pm).  The only major earnings reports on the day are SIG before the open and CHWY and PLAY after the close.

All eyes are on the May CPI print at 8:30, which is a bit odd since there is a very large consensus that the number will come in showing much higher inflation than April, yet nobody expects it to impact Fed actions in the short-term. Personally, I expect some brief volatility in markets and then a return to normal, no matter what the print. So, if you are not already hedged, there is nothing to do before the open. Even then, I might wait a bit before overreacting the first minutes of the market. Then again, that’s just me.

With the SPY fighting resistance and the DIA and QQQ fighting to hold trend, divergence and volatility are likely. Remember that consistency is the key to long-term trading success. So, keep hitting those singles and doubles. Follow the trend (the one appropriate for your trading horizon) and respect support and resistance levels. However, don’t just assume those levels will hold…they are all breached eventually. Beyond that, keep locking in profits as soon as you achieve your trade goals and maintain discipline by following your trading rules.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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

|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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Range-bound as we wait.

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Range-bound

Choppy range-bound price action continues as the market waits on critical inflation data on Thursday morning.  Indexes continue to hold price supports but remain stuck under overhead resistance levels.  Economists expect a CPI increase of 4.7% over last year, but some worry the number may come in hot.  China’s producer prices soared 9% from last year, and inflation seems to be surging worldwide.  With all eyes on tomorrow’s number and perhaps the market will break the logjam but the question remains, which way?

Asian markets closed mostly lower overnight in reaction to surging producer prices.  European markets are lower across the board this morning though some just modestly lower, waiting on U.S. inflation data.  U.S. futures point to a mixed but essentially flat open as we gear up for the CPI number Thursday before the bell.  Expect choppy price action to continue until the release and then be ready for significant volatility at the market open Thursday.  Plan your risk carefully.

Economic Calendar

Earnings Calendar

We have just 14 companies listed, with a few still unconfirmed.  Notable reports include CPB, GME, LOVE, RH, UNFI, VRA, & VRNT.

News and Technicals’

Yesterday the Senate passed U.S. Innovation and Competition bill to counter China’s technology ambitions.  The vote was nearly unanimous, with one provision providing $52 billion for semiconductor research, design, and manufacturing initiatives.  China’s producer price soared in May up 9% from just one year ago.  The increase is the most on record, and businesses expect the price increases will last until the end of the year as raw material inflation grows.  However, in the U.S., Treasury yields are moving lower, with the 10-year note falling to 1.513% this morning and the 30-year dipping to 2.194%.  Economists forecast the CPI to rise 4.7% from last year.

The indexes remain range-bound, holding price supports, and still challenged by overhead resistance.  I had suggested in the Monday blog of the possibility of a choppy market as we wait for the inflation day Thursday morning.  That guess could be correct with one more day to wait as the market struggles to find direction.  The T2122 indicator indicates we are in a short-term overbought condition, and the Absolute Breadth Index continues to point to a lack of momentum.  The VIX suggests fear continues to subside, but one has to wonder if that could be complacency.  Perhaps at 8:30 AM tomorrow, the logjam clear with the release of the CPI.  The question is, which way?  Plan your risk accordingly.

Trade Wisely,

Doug