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Stimulus a Done Deal but Min Wage Iffy

February 8, 2021 by Ed Carter

Markets gapped up about half a percent Friday to new all-time highs, but then put in indecisive action, undulating sideways the rest of the day. This left the QQQ with a gap-up Doji and both large-cap indices with gap-up, black-body spinning tops. As a result, the SPY and QQQ closed at all-time high closes and the DIA just missed. On the day, SPY gained 0.39%, QQQ gained 0.34%, and DIA gained 0.28%. This made for a big week and the longest winning streak since late August. The VXX was flat at 16.47 and T2122 (4-week now high/low ratio) rose further into the overbought territory at 93.33. 10-year bond yields rose significantly to 1.169% and Oil (WTI) rose about half a dollar to $56.85/barrel.

On the relief plan front, over the weekend President Biden said he believed the increase to a $15/hour minimum wage would not survive the reconciliation process. In related news, Senator Sanders said he opposes the tightening of eligibility for a $1,400 stimulus check (opposes tightening the income cap). Sunday Treasury Sec. Yellen told CNN that passage of the $1.9 trillion relief package could return the US to full employment in 2022. This came in response to former Treasury Sec. Summers raised questions over whether additional stimulus in that amount might cause a stock market bubble and bring inflation faster.

In regulatory filings Monday, Hyundai and Kia said they are not in talks with AAPL to make the autonomous “Apple Car.” The companies said they have gotten requests from multiple companies to partner on autonomous, electric vehicles, but no partnerships have been decided this early. Those South Korean stocks fell sharply on the news, but the announcement may have a follow-through effect even on AAPL. This may also be fallout from AAPL not being pleased that their secrecy was breached by earlier reports that AAPL was working with those two companies on the project.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,611,403 confirmed cases and 474,933 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 116,256 new cases per day. Still, deaths remain stubbornly high at 3,020 per day. A study published Sunday found that the number of UK variant cases is doubling in the US every 10 days. This coincides with the CDC model predicting it will be the most prevalent Covid-19 mutation in the US by March. Later in the day, President Biden answered CBS a reporter by saying that it will be very difficult to reach herd immunity by the end of summer.

Globally, the numbers rose to 106,751,887 confirmed cases and the confirmed deaths are now at 2,328,753 deaths. In good news, the world’s average of new cases is down again to 446,334 per day, but mortality remains high at 12,394 new deaths per day. Early data suggests the AZN vaccine offers only minimal protection against the South African variant (after 2 doses), even among young healthy adults, according to a study co-authored by Oxford University. The good news is that Oxford also said a new vaccine to tackle the South African variant should be in the autumn. In the meantime, South Africa has suspended AZN vaccinations.

Overnight, Asian markets were mostly green. The only significant loss was in South Korea (-0.94%). Meanwhile, Japan (+2.12%), India (+1.28%), Shenzhen (+1.21%), and Shanghai (+1.03%) led the gainers. In Europe, we see a similar story taking shape as only Denmark is in the red at this point. The FTSE (+1.01%), CAC (+0.71%), and DAX (0.26%) are typical of the bullish movement on the continent so far today. As of 7:30 am, US Futures are pointing toward a modestly green open. The DIA is implying a +0.40% open, the SPY implying a +0.32% open, and the QQQ implying a +0.28% open at this point.

There is no major economic news scheduled for Monday. Major earnings reports on the day include CNS, ENR, GTES, GPN, and HAS before the open. Then after the close, ACM, AMKR, BECN, BAP, KKR, LEG, OMF, RGA, SPG, TTWO, and TFII report.

With Stimulus now a done deal, the focus turns to whether any horse-trading can bring any Republicans onboard. However, that story really only has the day to play out as eyes will turn to the Impeachment Trial of ex-President Trump on Tuesday. Just more political theatre as GOP Senators have already voiced that they will not convict him. Earnings will be the other driver this week, but today is a relatively light day. At any rate, coming off the best week since November and with Futures pointing up this morning, the bulls have the upper hand.

Remember, nobody ever sustained a career by picking reversals…so don’t do it. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

Swing Trade Ideas for your consideration and watchlist: ABT, STX, CLF, GILD, NKE, ORCL, BOOT, KO, OSTK, SNAP, ZM, TGTX, MO, BCLI, SCHW, CAT. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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The Week Ahead – 2/7/21

February 7, 2021 by Ed Carter

New Records

February 5, 2021 by Doug Campbell

New records across the board in the index ETF’s as the bull regain control of the trend. In an all-night session that included a blizzard of amendments, the Senate passed a budget resolution necessary to move forward with a $1.9 Trillion stimulus package. That has futures popping to new highs this morning as we wait for the Employment Situation numbers before the bell. The bulls are back in control of the trends, having cleared resistance levels, but after such a strong rally, it may be wise to take some profits heading into the weekend.

Asian markets closed mixed but mostly higher overnight, and European markets trade with modest gains this morning. As global stocks near record highs, the U.S. futures point to a bullish open ahead of the monthly Employment Situation report. How the market opens will depend on that report’s results, so traders should plan for a dose of price volatility heading into the open. Have a wonderful weekend, everyone!

Economic Calendar

Earnings Calendar

We get a little break today with about 40 companies reporting quarterly results. Notable reports include CAH, EL, ITW, JOUT, LIN, REGN, SNY, & SPB.

News & Technicals’

The bulls kept up the pressure yesterday, lifting the SPY, QQQ, and IWM to new record highs, with the DIA squeaking out a new high in a last-minute buying surge. After an all-night session, the Senate approved a budget resolution as with a slew of resolutions necessary to clear the path as Democrats rush to pass the hoped-for 1.9 Trillion Covid relief bill. Johnson & Johnson is attempting to move forward with its Covid vaccine asking the FED for emergency authorization. After Robinhood removed trading restrictions on GameStop and all other stocks, GME shares climbed 15% in the premarket. Perhaps the short-selling frenzy still has legs after all.

Yesterday’s rally cleared the index charts’ price resistance levels, and the VIX again saw a calming as the bulls regained control of the trend. Today before the bell, we will get the latest reading on the Employment Situation. Still, the futures point to a bullish open as Senate moves forward with a procedural vote as they hurry to pass the next stimulus bill. It would seem to hope more deficit spending means jobs data no longer matters to this market. That said, it would be wise to avoid overtrading and take some profits heading into the weekend with the T2122 indicator hinting at a short-term overbought condition.

Trade Wisely,

Doug

Stimulus Heads to Reconciliation

February 5, 2021 by Ed Carter

Markets gapped modestly higher at the open Thursday. Then the bulls stepped in for a morning rally. Most of the day saw a grind sideways and then bulls made a push at the end of the day. As a result, the DIA printed a White Marubozu (Shaved Head) candle and the other two major indices printed large white candles themselves. All 3 closed at the highs of the day. So, on the day SPY gained 1.14% (closing at an all-time high), DIA gained 1.11%, and QQQ gained 1.18% (also closing at a new all-time high close). The VXX lost over 4% to 16.50 and T2122 rose deeper into overbought territory to 89.58. 10-year bond yields remains essentially flat at 1.136% and Oil (WTI) rose again to $56.23/barrel (over a 12mo. high).

After the close, Senate Republicans are announcing dozens (hundreds?) of amendments to the budget bill (relief package). These seem to be being offered as amendments as a way to force the process to vote on the amendments in hopes that it will fracture Democratic solidarity and/or force an item-by-item vote that can be used in later campaigning. However, the Senate plowed ahead along party lines to pass the budget bill. So, now reconciliation between the House and Senate versions begins and the package is still on track for signing before the current relief bill expires March 15.

After a meeting with Treasury Sec. Yellen on Thursday, the SEC and CFTC agreed to a timely study of the situation, including trading practices and the actions by brokers that temporarily prevented buying and forced selling of some tickers. However, they also made a boilerplate statement that “the infrastructure of the stock and commodities markets remains resilient, even during periods of extreme volatility.” In related news, it was revealed that the CEO of Robinhood is not licensed by FINRA. In other related news, the high-frequency trading firm Citadel sued the SEC to get the D-Limit method used by the IEX exchange (intended to discourage predatory front-running) prohibited. (In other words, they don’t want anything to prevent them front-running orders.) This is related because Citadel accounts for 40% of Robinhood’s revenue.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,273,890 confirmed cases and 466,988 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 129,894 new cases per day. Still, deaths remain stubbornly high at 3,100 per day. JNJ asked the FDA for emergency approval for their COVID-19 vaccine (66% effective, but requires only one shot). Then Thursday night, one of the Biden COVID advisors told CNBC that the 3 main mutations (UK, South Africa, and Brazil) may evade the immune response created after vaccinations with at least the two existing US vaccines (PFE and MRNA). White House Chief of Staff Klain said they hope to revive a Trump Administration idea that never got off the ground. That being the mailing of masks to all Americans. The original idea was scrapped because of the previous Admin’s fear it might cause “concern or panic.”

Globally, the numbers rose to 105,506,871 confirmed cases and the confirmed deaths are now at 2,296,567 deaths. In good news, the world’s average of new cases is down again to 485,014 per day, but mortality remains high at 12,969 new deaths per day. Countries are beginning to work on “Vaccine Passports” in many countries. Sweden is the latest of the EU nations who announced they are working on such a plan with hope of implementing it in the summer. The UK has announced it will implement mandatory hotel quarantine for incoming travelers from 33 “red list” countries as of mid-February. (The US is not on the list as of now.)

Overnight, Asian markets were mixed, but mostly green. The only loses were in Shanghai (-0.16%), Shenzhen (-0.88%), and Malaysia (-0.40%). The rest of the region was strongly in the green with Japan (+1.51%), Australia (+1.11%), and South Korea (+1.07%) leading the way. In Europe, a similar story is taking shape as the bulls are in charge in all but 3 exchanges. The FTSE (+0.09%) is flat, DAX (+0.29%) up modestly, and CAC (+1.11%) leading the charge. As of 7:30 am, US Futures are implying a moderate gap higher at the open. DIA is implying +0.47%, SPY implying +0.49%, and QQQ implying +0.37%.

The major economic news for Friday includes Jan. Avg. Hourly Earnings, Jan Nonfarm Payrolls, Jan Participation Rate, Dec. Trade Balance, and Jan Unemployment Rate (all at 8:30 am). Major earnings reports on the day include ADNT, AON, BERY, CAH, EL, HRC, ITW, LAZ, LIN, REGN, SNY, SPB, TT, and ZBH all before the open. There are no earnings reports after the close.

With Stimulus now a done deal, the focus turns back to earnings, and the recent so-called social-media volatility. It is worht noting that CNBC is reporting that the recent short-squeezes may not have been as much due to retail traders as had been thought. No exact numbers were given, but insitutional volume in those names apears to be significant. That said, we know it was likely the retail player who bore the brunt of being left holding the bag during this week’s 80% selloff in GME. At any rate, earnings have been better than expected so far this cycle (on average) and with vaccinations now gathering steam, there is a hope for returning to normal again by the summer. That optimism has spilled into markets as the bulls have the momentum again.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember, nobody ever sustained a career by picking reversals…so don’t do it. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

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

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bulls Won the day.

February 4, 2021 by Doug Campbell

The bears made some halfhearted attempts in yesterday’s early session, but the bulls won the day with modest gains still seemingly challenged by overhead price resistance. With a big day of earnings data to digest and jobless numbers on the way, U.S. futures point to mixed and flat open at the time of writing this report. Traders will need to remain nimble as we head into the Friday Employment Situation number, although government deficit spending appears more critical to the market nowadays.

Asian markets closed in the red across the board even as Hyundai shares rose with an Apple Car deal drawing closer. European markets trade mixed and cautiously as the Bank of England stands frim on interest rates. As morning earing roll out, the U.S futures trade mixed and mostly flat but prepare for price volatility as traders and investors digest all the data.

Economic Calendar

Earnings Calendar

Today is our busiest day on the earnings calendar this week, with nearly 120 companies fessing up to results. Notable reports include PTON, ABB, ATVI, APD, ALL, ABC, AINV, BLL, BDX, BMY, BEP, CG, CI, CLX, COR, CMI, DECK, DB, F, FTNT, GILD, GPRO, MRK, MCHP, MSGN, NWSA, NOLK, OIH, PENN, PM, PINS, POST, DGX, RL, SKK, SNAP, SNA, SU, TMUS, TPR, TDC, U, XYL, YUM & ZEN.

New & Technicals’

Although we had a modest day of price action, the bulls remain in control while still challenged by overhead price resistance levels. With a big day of earnings and economic news, traders will have to say on their toes, ready for just about anything. Apple and Hyundai-Kia said they are moving toward a deal to begin the development of the Apple Car. American Airlines is once again warning that 13,000 employees could be furloughed next month without additional federal aid. Senator Amy Klobuchar has unveiled a sweeping antitrust reform bill that could draw more risk and scrutiny to large tech firms if enacted. Google and Facebook already face federal and state lawsuits, with enforcers eyeing anticompetitive conduct accusations against Amazon and Apple as well.

The bulls-maintained control yesterday amidst some halfhearted attempts by the bears during the morning session. Overall the indexes are still challenged by overhead price resistance, and with a big day of data coming our way its anyone’s guess which side gains the upper hand, bull or bears. That said, the sharp decline in the VIX-X the last few days is a welcome sight even though it’s still remarkable to see markets poised to make new highs with the VIX over 20 handles. Stay focused and flexible with jobs data in focus for the rest of the week.

Trade Wisely,

Doug

Earnings, Stimulus and Yellen Top News

February 4, 2021 by Ed Carter

The large-caps opened more or less flat and the QQQ gapped higher on the AMZN and GOOGL earnings from Tuesday night. After the open, the large-caps ground sideways most of the day and the QQQ sold off. This left the QQQ printing a Dark Cloud Cover candle while the SPY and DIA both printed indecisive Spinning Top or Doji candles. On the day, SPY was up 0.08%, DIA was up 0.12% and QQQ fell 0.40%. VXX fell over 5% to 17.25 and T2122 stayed in the overbought territory at 88.66. 10-year bond yields were strongly higher, closing at 1.139% and Oil (WTI) rose almost 2% to $55.82/barrel.

On the stimulus front, President Biden stuck to his guns on the need for a $1,400 additional relief check. However, he also said he was open to narrowing the number of people who qualify for a check. For their part, Congressional Democrats continue to move forward with the House passing its version of the plan (budget) Wednesday and the Senate voting on it Thursday. That is expected to pass on party lines and then reconciliation will proceed. Related to market volatility, the President has instructed Treasury Sec. Yellen to call all the regulators together to make sure consumers (retail traders) are not being abused by the brokerages limiting trading and forcibly selling margin-bought shares of the Reddit-push short-squeeze tickers.

In business news, AAPL is close to finalizing a deal with Hyundai-Kia to manufacture the future (2024, though it may well be pushed back) “Apple Car.” This has been a surprising potential partnership as Hyundai-Kia has always been at best a mid-market brand while AAPL has always positioned their brand as luxury and high-end. Elsewhere, MRK CEO announced he will retire effective June 30. In the airline industry, AAL has now warned 13,000 employees and UAL warned 14,000 that they may be furloughed again if federal aid ends on March 31 as is now planned. The airline industry is seeking $15 billion in additional aid to ensure jobs through September.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,150,457 confirmed cases and 461,930 deaths. However, the number of new cases continues the recent trend of falling and is back down to the pre-election level as the average new cases are now 136,003 new cases per day. Deaths are falling too, but still semain stubbornly high at 3,151 per day.

Globally, the numbers rose to 104,993,331 confirmed cases and the confirmed deaths are now at 2,280,652 deaths. In good news, the world’s average of new cases is down again to 496,969 per day (first time below 500k since October), but mortality remains high at 13,288 new deaths per day. In the UK, a trial is underway to mix the first and second doses of vaccine (for example PFE first shot, MRNA second shot) in an effort to see if more flexibility is possible, which would aid supply chain problems.

Overnight, Asian markets were mixed, but mostly red. South Korea (-1.35%), Shenzhen (-1.16%), and Japan (-1.06%) led the losses. However, India (+0.71%) and a few of the smaller markets were in the green. In Europe, markets are mixed on modest moves at midday. The FTSE (-0.39%) is down, while the DAX (+0.27%) and CAC (+0.20%) are modestly up at this point. As of 7:30 am, US Futures are pointing toward a modestly up open. The DIA (+0.04%) and SPY (+0.12%) are just on the green side of flat, while the QQQ (+0.43%) is implying a modest gain on the open.

The major economic news for Thursday includes Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 am), Dec. Factory Orders (10 am) and a Fed Speaker (Daly at 2 pm). Major earnings reports on the day include ABB, AGCO, APD, ALXN, ABC, AME, ARW, BLL, BSAC, BAX, BCE, BDX, BMY, CI, CLX, CMS, CMI, GPI, HSY, ICE, IP LEA, MRK, NOK, ODFL, PH, BTU, PENN, PM, DGX, RL, SNA, TPR, TKR, WEC, XYL, and YUM before the open. Then after the close, ATVI, CSL, CCS, COLM, DECK, DXC, F, FTNT, FTV, GILD, HIG, HUBG, LPLA, MTD, MCHP, MSI, NOV, OTEX, PTON, PFSI, POST, PRU, SKX, SNAP, TMUS, UNM, and YRCW all report.

Once again, earnings and business news are back to leading the news. That’s a good feeling. However, stimulus and vaccine news still can have some sway. With surprisingly good earnings reports so far this cycle, there is a lot of optimism for the future in the market. We’re not out of the woods, so beware of volatility. However, things look a lot more constructive than they have in a long time from an economic standpoint.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember, nobody ever sustained a career by picking reversals…so don’t do it. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightening in a bottle. So, stick with your plan, maintain discipline and work your process.

Swing Trade Ideas for your consideration and watchlist: OSTK, BABA, WK, FOXF, FFIC, XES, VIAC, RIG, COMM You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

QQQ Poised for Record

February 3, 2021 by Doug Campbell

Google and Amazon earnings beat expectations, and this morning the QQQ is poised to reach out to new record highs. However, the DIA and SPY lag slightly behind, challenged with overhead price resistance. Facing a big round of earnings and jobs data in focus the rest of the week, expect price action to remain volatile. Should any jobs data disappoint, it would be unwise to rule out another attack from the bears.

Overnight Asian markets closed mixed but modestly bullish. European indexes show mixed but modest gains this morning as the focus remains on earnings results. U.S. futures indicate a mixed open as traders react to morning earnings reports and wait on the ADP private jobs report.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have nearly 90 companies reporting today. Notable reports include ABBV, AFL, ALGN, ALGT, AFG, APO, AVB, AVY, BIIB, BSX, BIP, CTSH, ELF, EBAY, GSK, GRUB, HUM, IAC, MET, MUSA, NTGR, NVO, PYPL, QCOM, RGLD, SMG, SPOT, VVV, GWW, & YUMC.

News & Technicals’

Markets surged yesterday, with the retail short squeeze frenzy calming as GME fell over 60% on the day. Google surprised the market with better than expected earnings, and Amazon reported its first 100 Billion dollar quarter benefiting from the pandemic restricted holiday shoppers. However, in a surprise move, Jeff Bezos is stepping down as the company CEO in the 3^rd quarter of this year to focus his attention on new products. A bit of a big tech battle has emerged between Microsoft and Google. Australia proposed a new law that would force the tech giant to pay news publishers for the right to link to their content. As a result, Google threatened to remove assess to its search engine if the proposal became law.

Interestingly, Microsoft said it would never threaten to leave Australia. I suspect we will hear much more on this subject in the coming months as Google comes under scrutiny for antitrust concerns. Perhaps the next move for Google is stepping up to the Double Dog Dare, LOL.

Yesterday’s substantial rally pushed many stocks up to test resistance levels and elevated the T2122 indicator back into a short-term overbought condition. The test for the bulls now is to prove they have the wherewithal to push through. The QQQ is poised to set new record highs today, with the DIA and SPY still battling price resistance levels. With a slew of earnings reports and jobs data in focus for the remainder of the week, expect the price to remain quite volatile.

Trade Wisely,

Doug

Earnings and Bezos Plans to Step Down

February 3, 2021 by Ed Carter

Markets gapped up Tuesday and then put in a little morning rally as the bulls got on a run. However, the afternoon was a sideways grind and a selloff the last hour left us with upper wicks. The SPY put in a Spinning Top candle while the others printed large body with good sized upper wick candles. On the day, SPY gained 1.33%, DIA gained 1.59%, and QQQ gained 1.63%. The VXX fell 8.5% to 18.19 and T2122 rose well into the overbought territory at 89.77. 10-year bond yields rose significantly as money moved out of bonds ending at 1.096% and Oil (WTI) gained about 2.5% to $54.87/ barrel (the highest level since early March of 2020).

The social media short squeeze seemed to fall apart Tuesday as GME gapped down and the sellers piled in causing in a 60% loss on the day (after losing 31% on Monday). AMC saw similar action, losing over 41% after a big black candle of its own from the prior day. Silver suffered a similar reversal. So, the crusaders that were not quick and had not taken profits likely got hammered by the gaps and then also learned the lesson of discipline if they held hoping for a recovery.

After the close, major tech earnings announcements set the table for tomorrow. Among these are the Jeff Bezos is stepping down as CEO of AMZN, with his replacement taking over during Q3. This came after AMZN reported its first $125 billion revenue quarter and doubled earnings estimates ($14.09/hare vs. $7.16/share est.). GOOG also beat on the top and bottom lines In non-tech earnings, XOM more than tripled the analyst’s estimates, coming in a 3 cents per share with an average estimate of 0.9 cents expected.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,027,430 confirmed cases and 457,868 deaths. However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 142,524 new cases per day. Still, deaths remain stubbornly high at 3,179 per day. The White House COVID Response team announced they will begin shipping vaccines directly to 6,500 retail pharmacies (CVS and WBA) on Feb. 11. Coupled with the rapidly declining trend of new cases this offers considerable hope for Spring.

Globally, the numbers rose to 104,485,479 confirmed cases and the confirmed deaths are now at 2,265,049 deaths. In good news, the world’s average of new cases is down again to 512,467 per day, but mortality remains high at 13,716 new deaths per day. The WHO reported that there has been a 13% decline in new cases globally from last week. Mexico has approved the use of the Russian Sputnik vaccine. In India, a survey has found that over 56% of the city’s population has had COVID-19, based on estimates from 28,000 samples. That is a lot of cases considering the city 30 million residents and the Indian national case count is reported at only 10 million.

Overnight, Asian markets were mixed but mostly green. South Korea (+1.06%), Japan (+1.00%), and India (+0.97%) led the way. Meanwhile, China saw losses with Shenzhen (-0.87%) and Shanghai (-0.46%) paces the fall. In Europe, markets are mostly green so far this morning. The FTSE (-0.02%) is flat, while the DAX (+0.51%) and CAC (+0.25%) are modestly higher. As of 7:45 am, US Futures are pointing to a modestly green (and varied) open. The DIA is flat at +0.01%, the SPY implying +0.32%, and the QQQ implying +0.60% at this point.

The major economic news for Wednesday includes Jan. ADP Nonfarm Employment (8:15 am), Jan. Services PMI (9:45 am), Jan. ISM Non-Mfg. PMI (10 am), Weekly Crude Oil Inventories (10:30 am) and 4 Fed speakers (Bullard at 1 pm, Harker at 2 pm, Mester at 5 pm, and Kaplan at 6:05 pm). Major earnings on the day include ABBV, APTV, AVY, BIIB, BSX, CPRI, CNHI, EDP, HWM, HUM, LAD, MKL, PFGC, SC, SNDR, SMG, SNE, and SPOT all before the open. Then after the close, AFL, ALGN, ALL, UHAL, AFG, AVTR, CHNG, CTSH, CTVA, EBAY, ECHO, ENSG, THG, HI, IAC, KLAC, LNC, MET, MUSA, PYPL, QRVO, QCOM, VVV, and YUMC report.

Earnings will again lead markets today with the digestion of Jeff Bezos stepping down at AMZN and strong earnings from GOOG and AMZN also still being digested. The volatility caused by the social media short squeeze may have run out of steam. However, earnings offer their own kind of volatility. So, continue to be careful.

Remember to keep locking in your profits. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. It’s all about achieving trade goals and sticking to your discipline. Remember, our job is to produce consistent gains…not catch record-breaking one-day moves. So, stick with your plan, maintain discipline and work your process.

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

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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Bulls defend Friday’s low.

February 2, 2021 by Doug Campbell

The bulls showed up for work yesterday defending the Friday low, and this morning, ahead of a big round of market-moving earnings reports, they are trying to follow through with another bullish open. Please pay close attention as we approach overhead resistance and expect wild price action to continue with the VIX remaining elevated above a 30 handle. Wednesday’s open will depend heavily on how AMZN & GOOGL perform reporting after today’s close, so carefully consider your risk. Anything is possible!

Asian markets rebounded strongly overnight, with the HSI up 1.23%. A positive global market sentiment reading also has European markets trading in the green across the board this morning. Ahead of a big day of potential market-moving earnings reports, the U.S. Futures point to another bullish open to test overhead price resistance levels.

Economic Calendar

Earnings Calendar

We have another big day of potential market-moving reports with more than 50 companies stepping up with results. Notable reports include BABA, GOOGL, AMZN, EA, AMCR, AMGN, ATHM, BP, CMG, CB, COP, TCS, ETN, EMR, COM, RACE, FEYE, BEN, GAIN, GL, HOG, HCA, MHO, MPC, MTCH, MCK, MPLX, PFE, PBI, POWI, SIRI, SYY, & UPS.

News & Technicals’

The bulls did a good job defending last Friday’s low but spent a considerable amount of time consolidating in choppy ranges on intraday charts. Perhaps the major snowstorm on the east coast affected the overall volume. We still have price resistance levels above to deal will, and with GOOGL & AMZN reporting after the bell today, anything is possible Wednesday morning. Currently, futures point to a nice bullish open trying to follow through ahead of a big round of morning earnings reports. GameStop shares fall another 30%, losing more than half of their value in just two days as the Reddit short squeeze begins to fizzle. However, Robinhood had to raise another $2.4 billion to cover the retail trading frenzy. What comes next is anyone’s guess, but with the VIX still above a 30 handle, traders will have to remain focused and flexible as the wild ride in price action continues.

It will be interesting to see how the indexes will deal with the price resistance above as market-moving earings roll out. With the Tech Giants, GOOGL, and AMZN reporting after the bell, the Wednesday open carries the risk of a substantial gap at the open. The question to be answered is which way, up or down? Consider your risk carefully as we head into today close. Keep in mind beginning Job’s data will be in focus the rest of the week, beginning with the ADP on Wednesday, Jobless Claims Thursday, and the Employment Situation number Friday morning.

Trade Wisely,

Doug

Stocks to Gap Up As Short-Squeeze Fades

February 2, 2021 by Ed Carter

US markets followed the world’s lead Monday gapping higher about a percent, but after the open the major indices mostly ground sideways amidst volatility. This ended with the large-caps printing indecisive candles (DIA a Harami Doji and the SPY a Spinning Top) to start the new month. While also having significant wicks, the QQQ was much more decisively bullish, putting in the best gain in 10 weeks. On the day, DIA was up 0.74%, SPY up 1.62%, and QQQ up 2.50%. The VXX fell over 5% to 19.88 and T2122 shot back up into the mid-range at 67.07. 10-year bond yields were flat at 1.071% after a volatile day and Oil (WTI) rose almost 3% to $53.68/barrel.

The social media pushed price action continued Monday as many brokerages reported outages at the open. Silver jumped 8.2% (11% intraday) as the massive volume and volatility continued in names like GME (-30% on a 52% range day) and AMC (flat on a 33% range for the day). In response, the CME raised the margin requirements for silver purchases. However, some brokers continue to slightly loosen restrictions on those tickers with fallout including that Robinhood was forced to raise another $2.4 billion in capital to use as collateral for trades in the high-volatility names and may need to raise another billion Monday night. However, overnight these moves may have lost steam as GME is down another 30% and Silver and AMC are also both down big.

On the stimulus front, Democrats took the first step toward a passage of the $1.9 trillion relief bill that would not require Republican support by introducing a budget resolution. This came ahead of the two-hour evening meeting between the President and the 10 Republican Senators who had sent him a $600 billion alternative to his plan. Both sides said the meeting was productive and talks would continue.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,911,375 confirmed cases and 454,213 deaths. However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 147,839 new cases per day. Still, deaths remain stubbornly high at 3,256 per day. Dr. Fauci told reporters Monday that even if you had the original strain of COVID-19, there is a high rate of reinfection from the new (UK, Brazilian and South African) variants now circulating. In addition, Democratic lawmakers from both Houses of Congress called on President Biden to increase the supply of N95 masks for the public and to distribute them at no cost via USPS and the local pick-up centers.

Globally, the numbers rose to 104,011,252 confirmed cases and the confirmed deaths are now at 2,249,880 deaths. In good news, the world’s average of new cases is down again to 522,508 per day, but mortality remains high at 13,869 new deaths per day. In the UK, the government has begun a door-to-door testing program in 3 of the hardest-hit regions of the country in an attempt to slow the surge from new variants. Meanwhile, in Asia, Japan has extended its state of emergency while simultaneously holding a press conference to say the Summer Olympics will be held as planned.

Overnight, Asian markets were strongly green again. India (+2.57%) led again, with Taiwan (+2.27%) not far behind, but strong gains were seen throughout the region. The same is true in Europe so far today. The CAC (+1.66%) and DAX (1.15%) are typical, but the FTSE (+0.42%) lags a bit. As of 7:30 am, US Futures seem to be following the rest of the world again and are pointing to a gap higher at the open. The DIA is implying +0.82%, the SPY implying +0.86%, and the QQQ implying +0.87% in an unusually consistent move at this point.

There is no major economic news for Tuesday, but there are 2 Fed speakers (Mester and Williams both at 2 pm). Major earnings reports for the day include BABA, ARCB, ABG, BP, BR, CTLT, COP, ETN, EMR, XOM, RACE, BEN, GPK, HOG, HCA, HUBB, IDXX, IMO, LII, MDC, MMP, MAN, MPC, MCK, MPLX, PFE, ST, SIRI, SYY, UPS, GWW, and WAT before the open. Then after the close, GOOGL, AMZN, AMCR, DOX, AMGN, ATO, CMG, CB, EA, FBHS, GOOG, LU, MHO, MTCH, PKI, SCSC, STE, SMCI, and VIAV all report.

It looks like the Bulls are off and running again this morning. It also appears the shine has come off the recent social-media short squeeze as GME, AMC, and Silver are all don big overnight. However, be very careful of volatility. Even with a strong day Monday, the market daily candles showed a lot of wick. In addition, heavy earnings reports before the open can still rock the boat. So, as tempting as it may be, we are not lottery ticket buyers or fad followers. We’re traders.

Swing Trade Ideas for your consideration and watchlist: UPWK, JMIA, XBI, VIAC, DQ, FUBO, ALT. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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