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.
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.
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.
Ed
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.
🎯 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
Futures reverse from overnight lows, but traders should prepare for very volatile price action with the VIX remaining quite elevated. Toss on in earnings, economic reports, and the Reddit community’s uncertainty, and anything is possible. The bears are not likely to give up as easily as they have in the recent past, having broken the long-standing uptrend creating price resistance levels on the index charts. Big gaps, intraday whipsaws, and overnight reversals are possible, so stay focused and flexible.
Asian markets traded very bullishly overnight, closing green across the board. European markets are climbing this morning as the U.S. futures rebounded off overnight lows, pointing to a substantial gap up reversal from Friday’s close. Prepare for another hectic day of price action.
Economic Calendar
Earnings Calendar
As we begin the first trading week of February, we have nearly 40 companies reporting to kickoff the week. Notable reports include ARE, CBT, CRUS, FN, KRC, NTDOY, NXPI, ON, TMO, & VRTX.
News & Technicals’
The Futures point to a bullish open rebounding off of overnight lows as the wild price volatility continues. Although the market is hoping for more stimulus, senators present President Biden with a slimmer version of the 1.9 Trillion dollar plan preposed. While very likely there will be more stimulus on the way, it looks as if this will be Biden’s first major political test and has the potential to create additional market uncertainty. Silver is in the news this morning as the Reddit traders attempt a short squeeze. As long as this activity continues, expect price volatility to remain relatively high due to the uncertainty. An uncertainty that attracts the attention of Congress and the SEC could mean a new flurry of new regulation could be on the way that creates own brand uncertainty for traders and investors to digest.
The long-standing bullish trend broke on the technical front, encouraging the bears to continue the selloff into Friday close creating technical damage to the long-standing bull run. Now with resistance levels above, the bulls may find it more challenging to regain control. With a busy week of earings, the Employment Situation number Friday, and the Reddit community creating uncertainty, anything is possible. The T2122 indicator suggests we are near a short-term oversold condition, but with the VIX elevated, expect a bumpy ride ahead. Big morning gaps, whipsaws, and overnight reversals are likely to test all traders and investors’ metal.
Markets gapped down on Friday and followed-through to the downside all morning. The afternoon saw a sideways grind as the majority of the trading had been done for the day. This action left all 3 major indices with ugly black candles that closed fairly close to the lows. On the day SYP lost 2.00%, DIA lost 2.05%, and QQQ lost 2.10%. The VXX gained 6.5% to 21.08 and T2122 fell well into the oversold territory at 7.04. 10-year bond yields went up to significantly 1.071% and Oil (WTI) lost only a fraction of a percent to $52.14/barrel.
Social Media, shorting funds, brokerage collateral calls from the trade clearinghouse, and politicians trying to make headlines on the subject continued to lead the talk on Friday. Many brokerages partially lifted the restrictions on buying the social-media darling stocks and again the phenomenal rallies continued. GME (+68%), AMC (+53%), etc. are a few examples of related moves on the day. However, other shorted issues have also been the target of the Redditers and this weekend such as SI (silver commodity) and DOGE (Dogecoin cryptocurrency) which both made moves as the social media phenomenon tries to spread its wings.
On the stimulus front, the Democrats have openly said they hope for Republican support, but if not, they intend to use the budget process (reconciliation) to pass the proposed $1.9 trillion relief package with just a simple majority. For their part, on Sunday, 10 GOP Senators tried to short-circuit the Democratic move by offering a $600 billion plan of their own in a letter to President Biden. There was no response yet from the White House and the Republican Senators will meet with the President Monday, but Senate Majority Leader Schumer scoffed at a proposal less than one-third of the existing proposal and Treas. Sec. Yellen reiterated Sunday that the benefits of acting BIG far outweigh the costs in the long run.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,767,229 confirmed cases and 452,279 deaths. January was the deadliest month with just under 100,000 COVID deaths in the US. 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 150,903 new cases per day. Still, deaths remain stubbornly high at 3,255 per day.
Globally, the numbers rose to 103,594,874 confirmed cases and the confirmed deaths are now at 2,239,275 deaths. In good news, the world’s average of new cases is down again to 528,616 per day, but mortality remains high at 13,870 new deaths per day. Portugal reached a critical point Sunday, with only seven open ICU beds in the whole country. As a result, they began flying critical patients to islands and other countries. AZN also ended its conflict with Europe as both sides announced that AZN will ship 30% more vaccine to the EU in Q1 than it had been planning and 75 million more doses in Q2. This avoids EU export restrictions on the AZN vaccine. In the UK, they have reached a milestone, announcing today that all “eligible” nursing home residents have “been offered” vaccine.
Overnight, Asian markets were mostly strongly green. India (+4.54%) and Indonesia (+3.50%) were clearly outliers, but Japan (+1.55%), Hong Kong (+2.15%), South Korea (+2.70%) are good indications of that region. In Europe, markets are green across the board so far today. The FTSE (+1.12%), DAX (+1.40%), and CAC (+1.36%) are typical of the continent. As of 7:30 am, US Futures seem to be following the rest of the world and are pointing to a gap higher at the open. The DIA is implying +0.84%, the SPY implying +1.09%, and the QQQ implying +1.13% at this point.
The major economic news for Monday is limited to Jan Mfg. PMI (9:45 am) and Jan. ISM Mfg. PM (10 am). Major earnings reports for the day include ON and OTIS before the open. Then after the close, CBT, KMPR, NXPI, VRTX, and WMG report.
It looks like the Bulls are off and running worldwide today. Couple this with the “social media-driven short-squeezing” and it may be a strong day for the market. Be very careful if you do anything like follow the short squeezers. Volatility cuts both ways and you don’t want to be left holding a long taken late when the floor drops out of a particular ticker. As tempting as it may be, we are not lottery ticket buyers or fad followers. We’re traders.
Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember to lock in your profits. 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.
Ed
Swing Trade Ideas for your consideration and watchlist: LEVI, XLB, SQ, ADM, LYFT, XLF, BAC, MGM, UAA. 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
Although the bulls rushed in to defend price supports, the pullback late in the day left behind more questions than answers. During the night, futures tested Wednesday lows, and so far, the bulls are defending, but it would be unwise to assume the bears have given up with so many stocks remaining under price resistance levels. Expect the price action to be challenging, with the VIX remaining elevated despite yesterday’s bullishness.
Asian markets closed in the red across the board, lead by the NIKKEI falling 1.89%. European markets trade modestly lower across the board this morning, with worries over the trading mania in GME, AMC, and others continue. U.S futures currently point to a bearish open though well off their overnight lows ahead of earnings and economic data. Expect the wild price action to continue, and the market manipulation gains regulatory attention.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have nearly 70 companies fessing up to quarterly results. Notable reports include CVX, BAH, CAT, CHTR, CHD, CL, LLY, HON, LHX, LYB, PSX, PSXP, ROP, SAP, SYF, TTM, & WY.
News & Technicals’
The bulls charged back yesterday but struggled to hold all the gains reacting to pirce resistance levels by the end of the day. The market manipulation in GME, AMC, and other heavily shorted stocks is now dominating the news cycle and has gained Congress’s attention. It may seem as if the little guy has finally found a way to stick it to “the man,” but this will eventually cost us all. The credibility of the entire market is at stake, and I suspect a new wave of regulation will soon be on the way. Brokers will have to protect themselves with significantly increased margin requirements, and option prices will necessarily increase due to the risk and wild volatility. Gamble if you must but also be willing to accept the consequences.
Yesterday’s rally index’s tested the resistance of price action and the break of the uptrend. While there were stocks all over the market that experienced a surge upward, you will see substantial resistance above. The question to be answered will the bulls have the energy to push through this resistance, or will the bears gain the strength to defend. The VIX remains significantly elevated, so traders should expect the wild volatility to continue. Overnight futures traded bearishly; however, this morning pump has lifted them well off the lows. Stay focused on price action and remain agile as anything is possible.
Markets gapped up a bit on Thursday (large-caps about half of a percent and QQQ about a quarter of a percent). Stocks then put in a rainbow day, slowly rallying all morning and then slowly selling off all afternoon. This left all three major averages printing Harami Inverted Hammer type candles with tiny white bodies. On the Day SPY was up 0.84%, DIA up 0.91%, and QQQ up 0.61%. The VXX fell a little over 3% to 19.79 and T2122 rose a bit, but remains in the lower mid-range at 37.50. 10-year bond yield rose sharply to 1.048% and Oil (WTI) fell over 1% to $52.26/barrel.
The talk of the day was the Reddit group raid on short positions such as GME. Brokers halted all trading on that ticker (as well as a few others), while the SEC, Congress and the Senate all announced investigations of market manipulation on the situation. In an odd bedfellow situation liberal Representative Cortez (AOC) and conservative Senator Cruz both bashed brokers for the GME trading freeze. On top of all this, customers sued some brokers for stopping them from continuing to buy the stock. At any rate, GME fell 40% on the day as a result of the halt on buying.
During the day, Speaker of the House Pelosi said the House will take the next step to pass the Covid Relief package next week, with or without Republicans. This will set up the reconciliation process that would allow Democrats to pass the $1.9 trillion relief package even without a single Republican vote. However, not a single Democrat could break ranks in the Senate for this to work. So, while most people hope for political reconciliation and it is hoped for, politics seems to be going on as usual.
Related to the virus itself, US infections continue to fall from recent extreme highs. The totals have risen to 26,338,607 confirmed cases and 443,769 deaths. However, the number of new cases continues the trend downward as the average of new cases is now down to 162,849 new cases per day. Still, deaths remain stubbornly high at 3,353 per day. In hopefull news, a large scale (30,000+ participants) tests of another new vaccine candidate from NVAX are now underway in the US and Mexico (see below).
Globally, the numbers rose to 102,132,931 confirmed cases and the confirmed deaths are now at 2,202,993 deaths. In good news, the world’s average new cases is down again to 562,866 per day, but deaths remain high at 14,273 new deaths per day. The fight between AZN and the EU continues over when and how much vaccine the EU will get. The European Commission published the contract between the 2 sides in an effort to pressure the company into earlier delivery. In a separate AZN story, the German Vaccine Commission has said that AZN did not test their vaccine on enough elderly patients (65+), and that being the case, there is not enough data to recommend the vaccine for that age group. Despite this, the EU is expected to approve the AZN vaccine for all ages. NVAX stocked soared late Thursday when reports came from the UK that very small-scale test data shows their COVID-19 vaccine is up to 89% effective. It was only 60% effective in a small South African test and only 45% effective in South Africa when patients who also had HIV were counted. Nonetheless, the UK data gives hope for another vaccine in the next few months. Meanwhile, data out of Israel suggests the PFE-BTNX and MRNA vaccines are both more effective than had been thought. Israeli data shows that less than 1% of people who were vaccinated with either vaccine have gotten COVID-19 since vaccination.
Overnight, Asian markets were strongly red across the board again. South Korea (-3.03%) was an outlier, but significant losses were seen in most places such as Japan (-1.89%), India (-1.32%), and Hong Kong (-0.94%). In Europe, we don’t see all red, but markets are definitely leaning to the downside so far today. The FTSE (-1.02%), DAX (-0.73%), and CAC (-0.87%) are typical and lead the way lower. As of 7:30 am, US Futures are also pointing to a gap lower at the open. The DIA is implying -0.45%, the SPY implying -0.58%, and the QQQ implying -0.83% at this point.
The major economic news for Friday includes PCE Price Index, Q4 Employment Cost, and Dec. Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), Michigan Consumer Sentiment and Dec. Pending Home Sales (both at 10 am). There are also a couple of Fed speakers (Kaplan at 4 pm and Daly at 5:25 pm). Major earnings reports on the day include BAH, CAT, CHTR, CVX, CHD, CL, LLY, ERIC, HON, JCI, LHX, LYB, PSX, ROP, SAP, SYF, and WY before the open. There are no major earnings reports after the close.
It looks like Bears are roaring worldwide on Friday. Mr. Market may be taking profits or getting flat ahead of the weekend. Either way, it looks like earnings and the “social media-driven volatility” are the big stories occupying the Market’s mind. So, continue to be cautious. The short-term trend is bearish, but the longer-term trend could hardly be any more bullish.
Follow the trend, respect support, and resistance levels, and don’t chase the moves you missed. Remember to lock in your profits. It’s all about achieving trade goals and sticking to your discipline. Remember, our job as traders is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process.
Ed
Swing Trade Ideas for your consideration and watchlist: ADT, SPWR, WTI, KO, CMCSA, AAPL, TLRY. 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
A disappointing Durable Goods report brought out the bears yesterday, and they continued their attack after the FOMC decided to take no further action on rates or spending programs. The wild volatility continued after the close as sellers drove down AAPL, FB, and TSLA after reporting. With the VIX elevated above 37 handles and a busy day of earnings and economic reports, expect the will prepare for the wild rollercoaster ride to continue today.
Asian markets had a rough session overnight led by the HIS selling off 2.55%. European markets see red across the board this morning in reaction to the Wall Street plunge. That said, U.S. futures are trying to put on a brave face this morning, bouncing off overnight lows ahead of another big day of data. Keep that seatbelt fastened for a bumpy ride.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have our busiest day of the week, with nearly 100 companies reporting. Notable reports include MCD, FLWS, AOS, MO, AAL, CMCSA, DHR, DLB, DOV, DOW, ETH, JBLU, JNPR, MA, MKC, MDLZ, MSCI, MUR, NOC, NUE, PHM, RHI, RCI, SWKS, LUV, SWK, TROW, TSCO, X, VLO, V, WRK, & XEL.
News and Technicals’
The bears went to work yesterday after the disappointing Durable Goods reports and stayed on task into the close after the FOMC decided to stand pat on rates and buying programs. After the bell, Apple reported a blowout quarter but sold off in the post marekt trading. Tech giants FB and TSLA also struggled in the post-market trading but look a bit healthier this morning. Overnight, GME and AMC fluctuated wildly as the speculation short squeeze traders continued to pile into the stocks. President Biden says they are looking into the situation. That kind of market attention usually brings rule changes not favorable to traders.
Yesterday’s selloff spiked the VIX closing at the high of the day above a 37 handle. Unfortuntually, the T2122 indicator suggests there is still more room to the downside before indicating a short-term oversold condition. Options traders may particularly find this morning challenging with wide bid/ask spreads and very high priced options due to the volatility. Facing another big day of earnings and economic data, be prepared for the possibility that the rollercoaster ride is likely to continue.
Markets gapped down Wednesday, on the heels of an ugly BA miss and the social media mob driving stocks in massive swings (like AMC which was up 300% in pre-market). After the open stocks then did some roller-coaster swings the rest of the morning. However, the afternoon saw another strong selloff that the Fed decision, statement, and press conference did nothing to slow down. All 3 major indices put in large, ugly black candles, but at least a rally the last half hour kept us from closing on the lows. On the say SPY lost 2.44%, DIA lost 1.98%, and QQQ lost 2.79%. The VXX gained almost 18% to close at 20.25 and T2122 (4-week New High/Low Ratio) fell down near the oversold territory at 23.76. 10-year bond yields fell sharply as traders chased safety, closing at 1.014% and Oil (WTI) was down slightly to $52.66/barrel.
During the afternoon, the Fed decided to hold rates near zero and Fed Chair Powell said FOMC would not taper bond purchases in the foreseeable future while reiterating that any talk of tapering is premature. He did say there was a potential for “transient inflation” and that what is really driving market (asset) prices isn’t monetary policy…it’s about expectations around vaccines and fiscal policy (stimulus). In that vein, House and Senate Majority Leaders (Democrats) seem to be giving up on President Biden’s desire for a bipartisan stimulus package, instead saying they are preparing to pass the Covid Relief bill without the support of any Republicans. While they say they want to win Republican support, Senator Schumer and Representative Hoyer said they believe they can get it done either way.
After the close, AAPL reported blowout earnings. It booked more than $111 billion in revenue for the 4th Quarter and beat earnings estimates by 19% ($1.68 vs $1.41 est). FB also beat on earnings, but did warn of potential impacts from the AAPL privacy changes impacting FB ad targeting and thus ad sales. TSLA beat on revenue, but missed earnings, but it did still report a profitable quarter for the sixth straight time. However, they did say they expect 50% average annual growth in deliveries going forward.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,166,423 confirmed cases and 439,521 deaths. However, the number of new cases continues the recent trend of falling as the average new cases are now 166,164 new cases per day. Still, deaths remain stubbornly high at 3,370 per day. Dr. Fauci told reporters that current vaccines (PFE and MRNA) can be easily adapted and/or augmented with booster shots for new virus variants as needed. However, even as-is, he expects the vaccines to provide significant protection against current known variants.
Globally, the numbers rose to 101,534,385 confirmed cases and the confirmed deaths are now at 2,186,710 deaths. In good news, the world’s average new cases is down again to 573,783 per day, but deaths remain high at 14,272 new deaths per day. In the UK, the government says the latest lockdown is working and the country has seen positive test rates fall by 45%. However, two regions (London and the East-midlands) still are seeing a rising number of new cases. In Germany, the Health Minister told the public they should expect at least another 10 weeks of vaccine shortages.
Overnight, Asian markets were red and down significantly, across the board. Shenzhen (-2.82%), Hong Kong (-2.55%), and Indonesia (-2.12%) paced the losers, but no Asian exchange lost less than 1%. In Europe, markets are mixed, but lean to the downside so far today. Among the big 3 bourses, the FTSE (-0.76%) and DAX (-0.44%) are lower while the CAC (+0.09%) is just on the green side of flat. As of 7:30 am, US Futures are pointing to a mixed and modest open. The DIA is implying +0.21%, the SPY implying +0.05%, and the QQQ implying -0.42% at this point (ahead of GDP).
The major economic news for Thursday includes Q4 GDP, Dec. Trade Balance, Weekly Initial Jobless Claims, and Dec. Retail Inventories (all at 8:30 am) and Dec. New Home Sales (10 am). Major earnings reports on the day include FLWS, AOS, ATI, ADS, MO, AAL, AIT, BC, CMCSA, DOV, DOW, FLEX, JBLU, MMC, MA, MKC, MCD, NOC, NUE, NVR, ORI, PNR, BPOP, PHM, RCI, SHW, LUV, SWK, STM, TROW, TSCO, VLO, WRK, and XEL before the open. Then after the close, AJG, CE, EMN, JNPR, MDLZ, OLN, PFG, RMD, RHI, SIGI, SWKS, X, V, and WDC all report.
It looks like Mr. Market may be waiting on the Q4 GDP print before reacting this morning. That and a slew of earnings news are likely to be the drivers today. However, “social media-driven massive moves” is not only pushing around individual stocks in unheard of ways, it is also introducing major volatility and fear of systemic reaction from the big boys (who don’t like their short positions being attacked by non- Wall Streeters). So, exercise some caution today until the direction is clear and be wary of volatility.
As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. Lock in your profits when you achieve trade goals and stick to your discipline. Remember, our job as traders is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process.
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.
🎯 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.
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