New all-time highs as the indexes continue to extend with the smell of freshly printed money inspiring the bulls. In just 6-trading days, the Dow surged over 1900 points, and the party is not over yet, with the futures pointing to another gap up open. Stay with the trend, but I caution traders to avoid overtrading or becoming complacent. A pullback could begin at any time, and remember, a gap up to new highs brings with it the possibility of a pop and drop price pattern. Until then, enjoy the party!
Asian markets traded mixed but mostly higher overnight, and European markets advance with modest gains this morning. Ahead of an FOMC announcement Wednesday afternoon, expect price volatility to continues as the bulls push for more records at today’s open. Stay focused and flexible as we enter a busy week of earnings and economic data.
Economic Calendar
Earnings Calendar
On the Monday calendar, we have just short of 100 companies stepping up to report quarterly results. However, many of them are small-cap unverified reports. Notable reports include HQY, FENG,& VUZI.
News & Technicals
White House advisor Fauci is warning against lifting U.S. restrictions as Germany declares a 3rd wave of infections, and Italy prepares for an Easter lockdown with the infection rates rise. Ireland, Austria, and the Netherlands are the latest countries to suspend the AstraZeneca vaccine over blood clot concerns. According to the TSA, passenger screenings hit the highest levels in over a year as travel begins to recover. The 10-year treasury yield stubbornly holds above 1.6%, with an FOMC meeting just around the corner.
Indexes finished last week strong as new all-time high records continue on almost a daily basis. How long this bullish frenzy of buying can last is anyone’s guess, but chasing this rally could prove to be very dangerous as we extend. The current SP-500 P/E ratio is 80% above its 10-year average, and the 4-week new high/new low ratio continues to suggest an extremely overbought condition in the short-term. That said, the VIX continues to decline, closing above a 20 handle on Friday. The QQQ remains the problem child, still trading below its 50-day average with significant overhead resistance above. Ahead of the FOMC, treasuries continue to hold above 1.6% as inflation worries persist. Stay with the bullish trend but don’t become complacent because a rest or pullback could begin anytime.
The SPY and QQQ gapped lower, while the DIA gapped up a bit on Friday. After that, all 3 major indices put in a mild lackadaisical rally the rest of the day. This left the QQQ with an indecisive candle (Spinning Top type) while both large-cap indices printed large-body white candles. The DIA ended at another all-time high close and so did the SPY (although to a much smaller extent and still within Thursday’s candle wick). On the day, SPY was up 0.13%, DIA up 0.92%, and QQQ down 0.81%. The VXX fell almost 2% to 13.95 and T2122 is almost pegged at 98.94, deep int the overbought territory. After the premarket jump, 10-year bond yields were stable during the session and ended up at 1.625% (spiked higher versus the Thursday close) and Oil (WTI) fell two-thirds of a percent to $65.60/barrel.
In good news, some Americans reported they had already received their $1,400 direct payment on Friday. This came just 24hr after the bill was signed into law. In other good news, the CDC reported the US has surpassed 101 million vaccinations, is now administering 2.2 million vaccinations per day, and hopes to hit 3 million per day by the end of the month. That blistering pace is sure to help the country get back to normal sooner and may have helped the bulls with their Friday rally, even against the tide of rising bond yields.
On Sunday, Treasury Sec. Yellen made the rounds telling various media that while the relief package stimulus will raise prices in the short-term, that the effect won’t last. She went on to say that true inflation risks remain “small and manageable.” Regardless of the accuracy of those words, this was exactly what markets had been hoping to hear. Still, 10-year bond yield remains above 1.6% in overnight trading, which is sure to temper market comfort with Yellen’s words. This is all prelude to the Fed meeting later in the week.
Related to the virus, US infections are slowly falling from the plateau level. The totals have risen to 30,081,657 confirmed cases and deaths have now passed half a million at 547,234 deaths. However, the number of new cases fell again to an average of 54,373 cases per day. Deaths also fell again to 1,290 per day. Late Friday, MI announced they will open vaccinations to everyone over the age of 16 on April 5. Then Sunday, Dr. Fauci (NIH) said that guidelines will be much more liberal by July Fourth if US cases keep dropping.
Globally, the numbers rose to 120,486,601 confirmed cases and the confirmed deaths are now at 2,666,564 deaths. The trends have been good, but we saw a significant uptick today. The world’s average new cases have up-ticked again to 420,462 per day. Mortality, which lags, continued to tick down slightly, now at 8,443 new deaths per day. Italy went into lockdown again over the weekend in all the major population centers. They also pre-announced that the country will impose a 3-day lockdown for Easter weekend in a couple of weeks. Germany also declared that a third wave was now underway in that country. This came as more European countries have suspended the use of the AZN vaccine due to blood-clotting concerns.
Overnight, Asian markets were mixed in mostly small moves. Shenzhen (-2.71%) and Shanghai (-0.96%) were outliers to the downside while India (+1.33%) was an outlier to the upside. However, more typical was Japan (+0.17%) and South Korea (-0.28%). In Europe, markets are mostly in the green at this point in their day. The FTSE (+0.34%), DAX (+0.17%), and CAC (+0.36%) are typical of the rest of the continent. As of 7:30 am, US futures are pointing to a modestly green open after pulling back from overnight highs. The SIA is implying a +0.31% open, the SPY implying a +0.15% open, and the QQQ implying a +0.23% open at this point in the morning.
The only major economic news on Monday is NY Empire State Fed Mfg. Index (7:30 am). There are no major earnings reports before the open. However, after the close, QFIN, and BEKE report.
With no economic news or earnings on tap, all eyes will be on bond yields and the coming Fed meeting as traders look for reassurance on the inflation front. A bullish trend (at the all-time highs in the large-caps) seems to have the momentum for now. A general good mood as the $1,400 direct payments have started hitting accounts is likely to be a boon for retail names and possibly the market in general as CNBC reports a large percentage of the public intends to put the money to work in the market.
As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. Another trade will be along any minute. Also, keep in mind that you are not a mystic. So, don’t try to predict reversals, just follow the market. Most importantly, keep taking your trade goals (profits) off the table when you can and stick to your discipline. Consistency is the key to long-term trading success.
Ed
Swing Trade Ideas for your consideration and watchlist: MVIS, BB, NOK, JWN, LUV, CPB, FCX, AG, LUMN, F, WMT. 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
In a prime-time address, President Biden says all adults should be able to receive at least one vaccination by the end of May and suggest things might get back to normal by the 4th of July. The market enjoyed a strong bullish run yesterday as investors celebrated the signing of the stimulus bill and the softening bond yields. Though we made the record books in the DIA, SPY, and IWM, the QQQ still has the overhead resistance of its 50-day average to overcome. Though we have a light day of earnings and economic reports, those pesky bond yields are creeping up with the 10-year back at 1.6%.
Overnight Asian markets closed mixed but mostly higher as the NIKKEI surged 1.73%. However, with bond yield climbing again, European indexes trade with modest losses across the board this morning. U.S. futures traded mixed coming off of overnight lows, trying to ignore bond yields and inspire more buying. This week experienced a fantastic bullish party extending the indexes, but one has to wonder if there is a nasty hangover just around the corner as bond yields creep higher. Plan carefully heading into the weekend.
Economic Calendar
Earnings Calendar
We have a lighter day on the Friday earnings calendar with just 31 companies stepping up to report. Notable reports include BKE, KIRK, & NOG.
News & Technicals’
In a prime-time address, President Biden will direct states to make all adults receive at least one vaccination by the end of May. Unfortunately, more countries have suspended the AstraZeneca vaccine due to rising issues of blood clots. The U.S. has not suspended its use so far. Although fear declined with successful 10 and 30-year bond auctions this week, the yeild is again topping 1.6% this morning. After signing the 1.9 Trillion bill, the White House says stimulus checks could start showing up in bank accounts as soon as this weekend assuming you use direct deposit. New York Governor Cuomo’s pressure continues to grow with calls for him to resign and an impeachment probe picking up steam.
Another day and more records highs for the indexes as the DIA, SPY & IWM bulls celebrate the next round of stimulus. The QQQ also enjoyed a nice rally with big tech finding buyers, but it still must deal with its 50-day average that may yet serve as overhead resistance. The VIX continues to weaken though tenaciously holding above a 20 handle. The four-week new high/new low ratio indicator signifies an extremely overbought short-term condition in the indexes, so be careful not to chase this late in the rally. With the bond rates popping back up this morning, it may be a good day to take some profits heading into the weekend.
Markets gapped higher and rallied in the morning before slowly melting a bit lower over the entire afternoon. This left all 3 major indices with white candles the left large upper wicks. However, it also worth noting that the SPY, DIA, and even the small-cap IWM all closed at all-time high closes. The QQQ, while it had the strongest percentage gain, is still about 6% below its own all-time high close. On the day, DIA gained 0.62%, SPY gained 1.00%, and QQQ gained 2.30%. The VXX fell 2.5 percent to 14.22 and the T2122 creeped even higher, deep into overbought territory at 97.12. 10-year bond yields rose slightly again to 1.53% and Oil (WTI) rose over 2.6% to $66.13/barrel.
Better than expected Weekly Jobless Claims and a lack of strong response in bond yields led to the gap-up open. Later in the day, the President signed the Relief Plan into law, but that was largely baked-in and did not drive stocks either way. What may be an economic driver is that the Treasury Dept. says that the first $1,400 direct payments may start hitting bank accounts as soon as this weekend (2.5 weeks faster than had been previously suggested).
Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,925,902 confirmed cases and deaths have now passed half a million at 543,721 deaths. The number of new cases fell again to an average of 56,927 new cases per day. Deaths also fell again to 1,403 per day. In his prime-time speech, President Biden said he is ordering expanded vaccine eligibility, telling states to open up the shots to every American by May 1. He expects this to lead to a more normal summer. Specifically, he said he believes the country is now on track to see widespread small gatherings by July 4th.
Globally, the numbers rose to 119,223,964 confirmed cases and the confirmed deaths are now at 2,643,905 deaths. The trends have been good, but we saw a significant uptick today. The world’s average new cases have up-ticked again to 412,517 per day. Mortality, which lags, continued to tick down slowly, now at 8,456 new deaths per day. After the close Thursday, NVAX announced that its UK Phase-3 trial has found its vaccine is over 96% effective against Covid. The stock spiked 30% in after-hours trading on the news, but no word on phase-3 safety tests yet. Elsewhere, a UK study confirmed what had been suspected, that the UK variant is 64% more deadly than the original strain of Covid.
Overnight, Asian markets were mixed. Japan (+1.73%) and South Korea (+1.35%) led the gainers while Hong Kong (-2.20%) and India (-0.95%) paced the losses. In Europe, markets are mostly red so far on Friday. Losses are widespread, but there are a couple of smaller holdouts and the moves are mostly modest in size. The FTSE (-0.01%) and CAC (-0.12%) are flat, but the DAX (-0.59%) is picking up a little momentum to the downside. As of 7:30 am, US futures are pointing to a mixed, but negative open. The QQQ is implying a -1.41% open while the SPY if looking at an open -0.43%, and the DIA looking at a flat +0.04% open.
The only major economic news on Friday are Feb PPI (8:30 am) and Michigan Consumer Sentiment (10 am). There are no major earnings reports planned for the day.
With no economic news or earnings on tap, all eyes will be on bond yields as an indicator of potential inflation. Thursday’s better-than-expected Jobless Claims number may have looked good yesterday, but this morning traders seem to be wondering if that augers inflation and a change in Fed policy. This is especially true as 10-year yields jumped again overnight to over 1.61%. In addition to this, we are heading into a Friday, extended to the upside. So, the bears have some weapons to work with today.
Follow the trend, respect support and resistance, and remember another trade will be along any minute. You don’t have to chase in either direction. So, do not try to predict reversals or chase moves, just follow the market. Most importantly, keep taking your trade goals (profits) off the table when you can and stick to your discipline. Consistency is the key to long-term trading success. The tortoise beats the hare when it comes to trading.
Ed
Swing Trade Ideas for your consideration and watchlist: AXP, TLRY, WW, TPR, ACB, CROX, MMM, BHC, CGC. 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 bulls lifted the Dow above 32,000 for the first time in history as the market celebrates the passage of one of the biggest spending bills of all time. Treasury yields also softened after a successful 10-bond auction sending industrial and consumer defensive stocks soaring as big tech continued to suffer. With more than 150 earings reports, Jobless Claims, JOLTS, and a 30-year bond auction ahead, the bulls push for another gap up open to keep the party going. Be careful not to chase such an extended rally because a significant pullback could begin at any time but until then, enjoy the ride!
Asian markets advanced overnight, led by the Hong Kong surging 1.65% at the close of the session. European markets traded mixed this morning as they chop cautiously around the flatline waiting for the next move of the ECB. U.S. Futures want the bullish party to continue pointing to a gap up open ahead of earnings and jobs data.
Economic Calendar
Earnings Calendar
As usual, Thursday is the busiest day of the week on the earnings calendar, with more than 150 companies reporting quarterly results. Notable reports include DOCU, LOCO, XONE, GCO, GOGO, GRDX, J.D., PRTY, PBPB, STNE, TTSH, TLYS, ULTA, MTN, WPM, & ZUMZ.
News & Technicals’
The passage of the stimulus bill lit a fire under the bulls pushing Dow above 32,000 for the first time in history. It is one of the biggest spending packages in history and the first legislative win for President Biden. Simultaneously, the President is under heavy pressure with more than 150,000 illegal border crossings in February, setting new records. The 10-year treasury yield softened slightly after a quick and successful auction yesterday afternoon. Today there will be a 30-year auction that to keep an eye on at 1 PM eastern. Denmark suspends using the AstraZeneca Covid vaccine after severe cases of blood clots reported in those vaccinated. President Biden will speak to the nation in a prime-time address on Thursday where he plans to announce the “next phase” of his pandemic response.
When it comes to the chart technicals, there is no question that bulls are large and in charge in the Dow, cementing new records prices. Although the NASDAQ has also enjoyed a nice relief rally, big tech continues to struggle with price resistance levels closing the day well below its 50-day average. Industrial and consumer defensive sectors continue to see substantial rallies as the massive rotation of the pandemic high flyers hits a fevered pitch. Be very cautious not to chase overextended stocks. With such a massive point rally in just a few days as a substantial pullback would not be out of the question and could begin at any time. Until then, enjoy the ride as the market celebrates the creation of deficit spending.
Markets gapped up about two-thirds of a percent higher in the large-caps and above 1.4% in the QQQ. After the gap-up, large caps ground sideways, while the QQQ sold off before starting its sideways grind about 11am. This left us with a Gap-up Doji in the SPY, a large white bullish candle in the DIA (which closed at an all-time high close), and a large ugly black candle in the QQQ. On the day, DIA gained 1.48%, Spy gained 0.58%, and QQQ lost 0.29%. The VXX fell over a percent to 14.60 and T2122 rose deep into the overbought territory at 96.05. 10-year bond yields fell slightly to 1.521% and Oil (WTI) rose a percent and a quarter to $64.80/barrel.
The economic news on the day was that there was enough demand for 10-year bonds at the government auction that yields pulled back slightly (higher bond prices mean lower bond yields). However, the demand was not enough to drive bond yields down strongly. All-in-all, this is an indication the bond market thinks inflation is in check for now. In addition, the House passed the $1.9 trillion relief bill as expected. So, we can expect consumers to have an injection to start spending as soon as the end of the month.
Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,862,124 confirmed cases and deaths have now passed half a million at 542,191 deaths. As mentioned, the number of new cases fell again to an average of 57,621 new cases per day. Deaths, which have always lagged, was flat at 1,477 per day. President Biden directed the DHS to purchase 100 million more doses of the JNJ vaccine on Wednesday. In addition, more states eased restrictions on the day. MD is allowing “high traffic” businesses like restaurants, gyms, and retail to open without restrictions. CA announced they will be opening theme parks and outdoor stadiums as of April 1, although at reduced capacities.
Globally, the numbers rose to 118,739,789 confirmed cases and the confirmed deaths are now at 2,634,166 deaths. The trends have been good, but we saw a significant uptick today. The world’s average new cases have up-ticked again slightly to 408,286 per day. Mortality, which lags continued to tick down slowly, now at 8,517 new deaths per day. In Central and Eastern Europe, the pandemic is picking up steam again. Among the countries seeing a “third wave” are Poland, Czechia, Ukraine, Romania, Serbia, Bulgaria, and Hungary. Meanwhile Denmark has suspended use of the AZN vaccine after reports that a number of patients have developed blood clots after vaccination. In Brazil, for the 2nd straight day, that country reported a new record number of covid deaths, this time almost 2,300.
Overnight, Asian markets were strongly in the green. China led the gainers with Shanghai and Shenzhen both posting +2.36%, Hong Kong up +1.65%, and Taiwan up +1.68%. In Europe, markets are mixed, but leaning to the green side so far today on modest moves. The FTSE (-0.27%) and DAX (-0.08%) are slightly lower, while the CAC (+0.16%) is slightly higher. The smaller exchanges are leading to the upside such as Portugal (+1.44%) and Denmark (+1.20%) at this point in their day. As of 7:30 am, US futures are pointing to a gap higher. The DIA is implying a +0.31% open, the SPY implying a +0.67% open, and the QQQ implying a major gap up of +1.75% open.
The only major economic news on Thursday are Weekly Initial Jobless Claims (8:30 am) and Jan JOLTS (10 am). Major earnings reports before the open include GCO, JB, OPCH, PAE, PRTY, and REV. Then after the close, ULTA and MTN both report.
It looks like traders are reversing the recent rotation into value names this morning. The Tech sector, which has been beaten up in the recent pullback, is looking to roar back on broad pre-market moves. There may also be general market optimism as leaks from the White House suggest President Biden will lay out a “path to normalization” in his speech tonight. Regardless of the reason, it looks like the bulls are chasing back toward new all-time highs across the board.
With that said, don’t blindly chase the gaps you miss. Make sure you are not buying into a volatility move or fade of that gap. Follow the trend, respect support and resistance, and remember another trade will be along any minute. So, control your FOMO. However, also do not try to predict reversals, just follow the market. Most importantly, keep taking your trade goals (profits) off the table when you can and stick to your discipline. Consistency is the key, not occasional home runs.
Ed
Swing Trade Ideas for your consideration and watchlist: HON, VZ, HAL, KR, JPM, ATKR, K. 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 bulls went back to work in the NASDAQ yesterday, lifting the index 3.69%, with the Dow briefly touching a new record high. However, the bulls still have a lot of ground to recover, with the QQQ, SPY, and IWM still challenged by overhead resistance. I think the big question the market has to grapple with is the bullishness of another 1.9 Trillion in stimulus and the possible bearishness that could create in interest rates and inflation. The success of the 10-year bond auction at 1 PM eastern today could be telling.
Asian markets closed mixed after a choppy session that saw selling into the close of the day. European markets seesaw this morning with modest gains and losses as the rally momentum seems to have faded. Ahead of earnings and a reading on the CPI, U.S. futures trade mixed in the premarket as inflation worries linger.
Economic Calendar
Earnings Calendar
On the Wednesday earnings calendar, we have just short of 100 companies fessing up to quarterly results. Notable reports include AMC, ASAN, BLDP, BBW, CPB, CLDR, EXPR, FOSL, FNV, LC, NGMS, SUMO, tup, UNFI, & VRA.
News & Technicals’
The bulls went back to work on Tuesday, pushing the Dow to a new high, but afternoon selling closed short of a record high close. The SPY and QQQ rallied sharply, testing resistance levels of price and downtrend, with big tech leading the gains. The U.S. House plans to pass the Senate revised stimulus bill today, and the President says he will sign it as soon as it hits his desk, adding 1.9 trillion in deficit spending. At 1:00 PM Eastern today, there will be a bond auction of the 10-year Treasuries. The last 10-year auction triggered a sharp rise in rates raising significant concerns of inflation. I may be wise to keep an eye on today’s auction if it energizes the bears for another attack. Representative Suzan DelBene is reintroducing a bill aimed at creating a national standard for digital privacy rights allowing states to build on the protections of the federal standard.
A look at the index charts, and it’s pretty easy to see the DIA is leading the way in printing a new record high before the profit-taking heading into the close. IWM is also in good condition though still challenged by some overhead resistance. Both the SPY and QQQ rallied sharply but still must address the downtrend as well as price resistance levels above. Keep in mind that that the QQQ remains the weakest of the indexes needing to recover more than 10 points to challenge its 50-day average as resistance. Before the bell, we will get the latest reading on CPI, and later today, it may be wise to keep an eye on the 10-year bond auction.
Bond yields pulled back overnight, leading to a gap strong gap higher by markets on Tuesday. After this, markets rallied all morning (strongly in the QQQ and more slowly in the large-caps). The afternoon saw more sideways action across all 3 major indices until a selloff the last 30 minutes of the day. This left us with gains, but large high-side wicks, especially the large-caps. On the day, QQQ +3.94% led the way higher, with SPY +1.40%, and DIA +0.11% flat on the day. The VXX fell 4% to 14.77 and T2122 fell a bit, but remains in over-bought territory at 85.11. 10-year bond yields fell sharply, but remain elevated at 1.537% and Oil (WTI) fell almost 2% to $63.83/barrel. It’s worth noting that after a brutal week or so, TSLA led the way in the Nasdaq at +19.64%.
Bloomberg reported an interesting fact on Tuesday afternoon. Bear in mind, it’s quite possible to drown in a river that is “on average” half an inch deep. In the article and story Bloomberg reported that analysts have looked at the S&P500 during periods of interest rate increases of at least 1.5%. That had happened 13 times since 1962 and 10 of those 13 times the S&P500 also rose. The average across all 13 instances was an S&P gain of 15%. While rates have not currently risen 1.5%, they are headed that direction with many traders eyeing inflation with fear. It’s worth considering.
The OECD released its economic forecast for 2021. They are predicting global economic growth of 5.6% on the year, with +6.5% in the US, +7.8% in China, +12.6% in India, and +3.9% in the EU compared to last year. In other economic news, US mortgage refinancing demand is down 43% from a year ago even as home purchase loan demand rose 75 for the week. This comes as average loan rates rose three basis points on the week. In addition, the $1.9 trillion covid relief bill is expected to pass today and head to the President’s desk for signing.
Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,801,506 confirmed cases and deaths have now passed half a million at 540,574 deaths. As mentioned, the number of new cases fell again to an average of 58,564 new cases per day. Deaths, which have always lagged, was flat at 1,640 per day.
Globally, the numbers rose to 118,257,673 confirmed cases and the confirmed deaths are now at 2,624,252 deaths. The trends have been good, but we saw a significant uptick today. The world’s average new cases have up-ticked again slightly to 404,475 per day. Mortality, which lags continued to tick down slowly, now at 8,649 new deaths per day. Mexico announced it should see results of the NVAX vaccine phase 3 trials in April. Meanwhile, Brazil reported its highest daily death total of almost 2,000.
Overnight, Asian markets were mixed again on more modest moves. Australia (-0.84%) led the losses while smaller country exchanges led the gains. China and Japan were flat on the day. In Europe, so far today markets are mostly green. The FTSE (-0.18%) is down, but the DAX (+0.36%) and CAC (+0.68%) are more typical of the continent as of mid-day. As of 7:45 am, US Futures are mixed and flat. The QQQ is pointing to a -0.13% open, the SPY to a +0.11% open and the DIA to a +0.35% open.
The major economic news on Wednesday includes Feb. CPI (8:30 am), Crude Oil Inventories (10:30 am), and Feb. Federal Budget Balance (2 pm). Major earnings reports before the open include CPB and UNFI. Then after the close, BEST and ORCL both report. However, there is a US bond auction today and given the focus that has been placed on rising bond rates recently, this auction may be a larger driver of markets than a typical auction.
With the relief bill and reopening of the economy now priced into markets, inflation has been a key focus of traders. The handicapping seems to be that if rates rise too fast, even at low levels, markets fear the Fed going to a more hawkish stance. On the contrarian side, as I pointed out above, analysis shows that most of the time, as rates rise the market goes up. Either way, that seems to be the backdrop of market direction now. As always, it’s not the news, but how the market reacts to the news this time that matters.
Follow the trend, respect support and resistance, and don’t chase those moves that you miss. Another trade will come along any minute. Don’t try to predict reversals, just follow the market. Keep taking your trade goals (profits) off the table when you can and stick to your discipline. Consistency is the key, not ocassinoal home runs.
Ed
Swing Trade Ideas for your consideration and watchlist: SNDL, MSFT, MOMO, BCRX, AA, FTNT. 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
Yesterday’s price action was exciting but left behind an uncertain mixed bag of results. While industrials and consumer defensive stocks enjoyed a bullish stampede, the bears had their way in the NASDAQ pushing it into the correction zone. Adding more confusion, we have 1.9 trillion in stimulus on the way, coupled with rising concerns about inflation and a plethora of shooting star patterns left behind at or near resistance levels tossed in for an extra dose of uncertainty. With the Dow up more than 1200 points in just 3-trading days, the futures are once again pumping the fear of missing out and trying to encourage traders to chase. Plan your risk very carefully.
Asian markets closed mixed but mostly higher as SHANGHAI struggled to find buyers. European markets trade green across the board this morning, keeping a close eye on bond rates. U.S. futures once again surge higher with the House planning to pass the massive stimulus bill within the next 48 hours. Be careful chasing already extended stocks and keep an eye on bond rates with a 10-year auction scheduled for Wednesday afternoon.
Economic Calendar
Earnings Calendar
We have about 70 companies reporting quarterly results this Tuesday. Notable reports include AVAV, BNED, PLCE, DQ, DKS, HRB, NAV, & THO.
News & Technicals’
Yesterday was a rather odd day in the market with the bulls stampeding into industrials and consumer defensive sector stocks while the Nasdaq suffered significant losses. The bulls seem focused on the pending 1.9 trillion dollar stimulus bill, with the House planning to complete its work in the next 24 hours. Unfortuntually, the 10-year treasury yields continue to raise inflation concerns with all newly printed money about to enter circulation. It may be wise to watch the 10-year note auction scheduled for Wednesday afternoon, keeping your fingers crossed that it goes much better than the prior. The CDC announced yesterday that people fully vaccinated against Covid could return to meeting indoors without masks, but the government continues to caution about removing mask requirements too soon.
Technically we have an uncertain mixed bag in the indexes. The DIA reached out to a new record high yesterday but lost more than half of its gains, with sellers taking profits into the close. Simultaneously, the QQQ remained under significant selling pressure dipping a full 10% from its recent highs. Toss in the shooting star patterns at or near resistance levels left behind in the SPY and IWM, and the path forward becomes even more uncertain. However, once again, the premarket pump tries to encourage traders to chase, dredging up the fear of missing out emotion. Be very careful remembering that the Dow is already more than 1200 points above its low in just 3-days of trading. With long-bonds holding at higher rates, there is a lot of risk should the bears decide to defend resistance. Plan carefully, avoid over-trading, and chasing already extended stocks.
Markets gapped slightly higher Monday, but then diverged. The DIA surged higher and then pulled back while being able to hold onto a white candle, leaving a high upper wick that could be seen as a shooting star if you squint. This came largely on a pop by DIS on reports that their Disneyland resort is expected to reopen April 1. At the same time, the SPY and especially the QQQ sold off hard to put in ugly black candles. On the day, DIA was up 0.95%, SPY was down 0.50%, and QQQ was down a whopping 2.83% (closing down 11% from the Feb. 12 record high). The VXX rose a little under 2% to 15.39 and T2122 drove higher, well into the overbought territory at 90.44. 10-year bond yields spiked again to 1.601% and oil (WTI) sold off over 2% to $64.74/barrel.
It was announced Monday that over the last week the US has averaged more than 1 million airline passengers per day. This is the first time in a year the US has reached that level of travel. This announcement came the same day that the CDC said it was okay for fully-vaccinated people (at least 2 weeks post-vaccination) to meet indoors without masks. Small steps, but signs of progress as the country is vaccinating more than 2 million people per day.
Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,744,652 confirmed cases and deaths have now passed half a million at 538,628 deaths. The number of new cases fell again to an average of 58,798 new cases per day. Deaths, which have always lagged, also fell again to 1,623 per day. The Houston Health Dept. found a fairly large amount of the UK variant in their wastewater testing. The House now plans to vote (pass) on the Covid Relief Bill on Wednesday since the Senate has not yet delivered the bill as passed in their chamber. In good news, lab studies are hinting that the PFE-BTNX vaccine can give protection against the Brazilian mutation.
Overnight, Asian markets were mixed. China led the losses again as Shenzhen (-2.84%) and Shanghai (-1.82%) were down sharply. However, Japan (+0.99%). Hong Kong (+0.81%), and India (+0.95%) led to the upside. In Europe, markets are mostly green, with a couple smaller exchanges being just on the red side of flat so far today. The FTSE (+0.67%), DAX (+0.32%), and CAC (+0.36%) are all positive, with a few of the smaller exchanges being major outliers to the upside, like Denmark (+2.39%) and Portugal (+2.32%). As of 7:30 am, US Futures are strongly higher across the board as bond yields pulled back (but remains above 1.5%) overnight. The DIA is implying a +0.50% open, the SPY implying a +0.99% open, and the QQQ implying a +2.19% open.
The only major economic news on Tuesday is a Fed speaker (Kaplan at 6:05 pm). Major earnings reports before the open include DKS, NAV, and THO. Then after the close, ABM reports.
Softening bond yields overnight seem to be giving the bulls energy this morning. With no planned economic news and no real major earnings, that may be enough to help them run on the day. However, there is a lot of technical damage to overcome. So, while a “V reversal” could happen, it is more likely we will see some chop as bulls become more sure of the footing before running wild. So, be prepared for volatility and one-day directional moves.
Follow the trend, respect support and resistance, and don’t chase those moves that you miss. Another trade will come along any minute. Don’t try to predict reversals, just follow the market. Keep taking your trade goals (profits) off the table when you can and stick to your discipline. Consistency is the key, not ocassinoal home runs.
Ed
Swing Trade Ideas for your consideration and watchlist: WBA, JETS, PM, JWN, UAL, DIS. 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
