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Data, Earnings & Economic
Between the earnings and economic calendar, traders and investors will have a lot of data to digest this week. Plan for the considerable price volatility and be prepared for the possibility of overnight reversals with the after the bell giant tech reports with substantial gaps at the open. With P/E ratios already extended, can companies produce earnings results to support these prices? We’re about to find out, so stay focused, flexible, and ready for just about anything.
Asian markets traded very bullishly overnight, with the HSI leading the way up a whopping 2.41%. However, European markets trade in the red across the board, and the U.S. futures that were quite bullish overnight now point to a mixed open. With so much data coming our way, be prepared for considerable price volatility in reaction earnings and economic news.
Economic Calendar
Earnings Calendar
We have a busy week of earnings that will include market-moving giant tech reports. Notable reports include AGNC, BRO, CR, ELS, KMB, & STLD.
News & Technicals’
Traders and investors will have a lot of data to digest this week with a busy economic calendar and an earings calendar brimming will market-moving reports. The futures were quite bullish during the night but have moderated considerably this morning, pointing to flat open. However, with so much data coming our way, anything is possible. Treasury yields are falling this morning as investors keep watch on the Biden 1.9 Trillion stimulus plan. The President restricted travel from the U.K., Brazil, and South Africa to mitigate risk from new virus strains that may be vaccine-resistant. In another executive action, Biden extended the student loan freeze for another eight months, and new data shows loans in forbearance are risings, adding pressure to the banking sector.
Although we saw a little selling last week, trends remain bullish, though mainly in a choppy consolidation. The week ahead could prove rather challenging as the market processes a big round of earnings. With P/E ratios already very extended, can companies produce earnings results that support these elevated prices? We will soon see, but traders should expect substantial volatility with the possibility of overnight market reversals and opening gaps as a result. Before making any new trade decision, make sure you’re checking the company’s earnings date as big price moves are possible. Focused, flexible, and agile traders with well-planned trades that carefully manage risk can do well in this environment. Buckle up!
Trade Wisely,
Doug
Stimulus Wrangling As Virus a Bit Better
Markets gapped down on Friday, but then printed an indecisive Doji-like candle. On the day, SPY lost 0.35%, DIA lost 0.61%, and QQQ lost 0.29%. While all 3 major indices closed down, they are just off their all-time highs. The VXX gained a little over a percent to 16.40 and T2122 fell just outside of the overbought territory at 77.85. 10-year bond yields fell to 1.086% and Oil (WTI) load over 2% to close at $51.98/barrel. For the week, large-caps were up about 2% and the QQQ up 4.35%.
GOP opposition to the price of President Biden’s $1.9 trillion stimulus plan has started to gel. With Republicans saying that more stimulus may well not be needed and that they oppose any more government borrowing unless the expense is proven to be absolutely necessary. However, the head of the National Economic Council, Brian Deese, held a call with a bi-partisan group of moderate Senators (8 Democrat and 8 GOP) on Sunday to make the case for the bill. This comes as Bloomberg reports that rate traders are also very anxious to hear Fed Chair Powell forcefully reiterate that FOMC bond purchases will continue through 2021 without easing. (In other words, that stimulus will not let up for at least the coming year.)
In a stunning admission, new CDC Director Walensky told Fox News that the government does not know how many of doses the two Covid-19 vaccines the US has in hand. And if she doesn’t know, she can’t tell Governors, state health systems or individual hospitals how much they will get or when. This is part of what has led thus far to a hap-hazard and slow push for vaccinations. In a shot (pun intended) at the Trump Administration, she said this was the situation they were handed.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 25,702,125 confirmed cases and 429,490 deaths. The number of new cases fell in 47 states again as the average new cases has fallen to 173,753 new cases, but deaths remain high at 3,182 per day. MRK shut down its vaccine program after trial data showed poor efficacy. Elsewhere, President Biden has banned all incoming travelers who were recently in South Africa (to stop the new variant from that country). It also formalized the rescinding former-President Trump’s last-minute lifting of bans on travelers from Ireland, the UK, much of Europe, and Brazil.
Globally, the numbers rose to 99,839,954 confirmed cases and the confirmed deaths are now at 2,140,489 deaths. In good news, the world’s average new cases is down to 588,519 per day (the first time below 600k this year), but deaths remain high at just under 14,000 new deaths per day. Over the weekend, the US CDC and UK Health Ministry discussed new data that suggests that the “UK Variant” of the virus is not only 50% more contagious, but also could have a higher mortality rate. On Sunday, Israel banned international flighted (in/out) for at least a week. Austria also made N95-grade masks mandatory in public and a German hospital in Berlin has been quarantined after finding 14 patients and 6 staff members infected with the newer UK variant of the virus.
Overnight, Asian markets were mixed, but leaned slightly to the bullish side. Hong Kong (+2.41%) and South Korea (+2.18%) far outpaced all other exchanges. To the downside, Malaysia (-1.26%), India (-0.93%) and Indonesia (-0.77%) paced the losses. In Europe, markets are mixed, but lean heavily to the red side so far today. Among the big 3 bourses, the FTSE (-0.71%), DAX (-0.97%), and CAC (-0.90%) are all well down at mid-day. As of 7:30 am, US Futures are also mixed. The DIA is implying a down open of 0.29%, the SPY on the green side of flat implying +0.13%, and the QQQ implies a pop higher of 0.93%.
There is no major economic news for Monday. Major earnings reports include ALLY, FHN, HBAN, KSU, RF, and SLB before the open. Major earnings reports on the day include KMB before the open. Then after the close, AUY, FUL, STLD, and XLNX report.
We have a full week of economic data and heavy earnings highlighted by the Fed statement and press conference on Wednesday. On top of this, the wrangling over another relief package continues and markets may wait until they are sure they’ll get another hit of stimulus before taking major decisions. It looks like the bulls want to run in the high-tech space this morning, but large-caps seem undecided as of now. So, bear in mind we’re at all-time highs with an indecisive market.
As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. There will be another trade. Lock in your profits when you achieve trade goals and stick to your discipline. Focus on the overall market, the specific chart, and your own trading process. Remember, trading is a long-term game. We don’t have to try to get rich every day.
Ed
Swing Trade Ideas for your consideration and watchlist: CLX, WOR, SYX, BYND, APPS, BE, AG. You can find Rick’s review of those 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.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
The Week Ahead – 1/24/21
Insipid Price Action
Yesterday’s insipid price action and declining volume suggested the market needed a rest after the hard bullish partying earlier this week. With the futures currently suggesting an overnight gap down at the open today, we are reminded that bears still exist. Now the question to be answered, do the bears have teeth, or will the dip crowd have the energy to defend trends and price supports as we slide into the weekend? Recent evidence and hope for another 1.9 trillion stimulus seem to give the bulls the upper hand.
Asian markets closed in the red across the board, with the HIS leading the way, dropping 1.60%. European markets retreat as well this morning as the virus spread and economic data damper recovery enthusiasm. Ahead of earnings and several possible market-morning economic reports, U.S. futures point to a gap down open within bullish index trends. Prepare for an extra dose of volatility as we head into the weekend.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have 22 companies fessing up to quarterly results. Notable reports include ALLY, HBAN, KSU, RF, & SLB.
News & Technicals’
While mostly bullish, the market’s price action seemed a bit insipid while still squeaking out new records in the SPY and QQQ. The energy and financial sectors experienced a notable weakness, while the big tech growth names garnered most the bullish attention. Whitehouse adviser Dr. Fauci says new data shows vaccines appear to be less effective against some newly identified strains. President Biden plans to sign more executive orders today but has reportedly come under pressure to scale back his 1.9 Trillion stimulus package. INTC stock surged just minutes before the close yesterday when an infographic related to the coming earnings report was leaked. The stock sold off after the bell and the release of the earnings. The company says it’s investigating the situation. Have I mentioned, I’m not too fond of earnings and the price manipulation it creates.
Technically speaking, trends remain bullish all-be-it quite stretched with volume declining even as new record highs occurred. However, this morning futures point to a gap down open, reminding us that bears still exist. We have a lighter day on the earnings calendar but several possible market-moving economic reports to keep us busy. As long as overall trends and support hold in this morning’s pullback, this is healthy market price action. However, it might be a bit painful from this elevated position for those overtrading. Plan your risk carefully as we head into the weekend.
Trade Wisely,
Doug
Earnings and Virus Jitters Lead News
Once again markets opened higher and after a day of indecisive trading, all 3 major indices closed an another all-time high close. As mentioned, all 3 put in indecisive Doji-like candles on the session. For the day, DIA was flat at +0.03%, SPY gained just 0.09%, but QQQ made a nice gain of 0.80%. The VXX lost eight-tenths of a percent to 16.18 and T2122 fell slightly, but remains in the overbought territory at 84.30. 10-year bonds rose to 1.109% and Oil (WTI) fell half a percent to $53.05/barrel.
On the report front after the close, IBM revenue missed on a continued slide for the fourth consecutive quarter. However, INTC reported a beat on top and bottom lines on a massive 33% surge in PC sales in the quarter. On the downside, INTC’s incoming CEO committed to the company continuing to do their own chip manufacturing. This is problematic because Intel have suffered years of manufacturing delays and operate at a higher cost than other chipmakers (like TSM).
In International trade news, the data shows that China purchased only 58% of the US goods they agreed to buy as part of former-President Trump’s “Phase One” settlement to the trade war. Meanwhile, in the UK, more post-Brexit trade news came out. This time a report finds that UK–EU freight traffic has dropped by 30% (both directions) since the first of the year. At the same time, logistics costs have risen 50% versus one year ago. Among the major issues is the new red tape. For example, the number of truck shipments rejected by the UK at the border has risen 168% versus January 2020. In addition, there are constant virus testing procedures on both sides of the border which cause delays.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 25,196,086 confirmed cases and 420,285 deaths. The number of new cases fell in 46 states Thursday as the average new cases has fallen to 191,652 new cases, but deaths remain high (4,363 on Thursday) at 3,176 per day. However, this must be taken with a grain of sale as states are suspect. MO was found to have not been reporting the results of rapid tests. This would have raised that state’s numbers by 644 just in January. Elsewhere, new CDC director Walensky contradicted the prediction of her predecessor who had said every pharmacy would have at least one of the vaccines available by the end of February. However, in good news, LLY announced that the phase 3 trial of their monoclonal antibody combination treatment was found to lower risk of contracting COVID-19 by up to 80%. While good news, the treatment is likely too expensive and scarce to use as a replacement for vaccinations.
Globally, the numbers rose to 98,188,110 confirmed cases and the confirmed deaths are now at 2,102,744 deaths. As a reference, the world average new cases is down to 631,396 per day, but deaths remain high at 13,732 new deaths per day. The UK says it is considering total border closure to contain the spread of new variants of the virus. France will now require a negative PCR test from any travelers entering from other EU countries.
Overnight, Asian markets were mixed but mostly bearish. Hong Kong (-1.60%), Indonesia (-1.66%), and Thailand (-1.03%) led, but losses were widespread. The only green was in India (+1.69%) and Shenzhen (+0.28%). Meanwhile, in Europe, so far today markets are red across the board on reports that EU economic activity has fallen to a two-month low in January, coupled with potential border closures in the UK. Among the big 3 bourses, the FTSE (-0.78%), the DAX (-0.86%), and CAC (-1.12%) are all down at mid-day. However, the biggest moves are in the smaller countries/exchanges such as Athens (-2.44%). As of 7:30 am, US futures are following Europe and pointing toward a negative open. The DIA is implying a -0.83% open, while the SPY implies a -0.75% open, and the QQQ is implying a -0.62% open.
The major economic news for Friday includes Jan. Mfg. PMI and Jan. Services PMI (both at 9:45 am), Dec. Existing Home Sales (10 am), and Crude Oil Inventories (11 am). Major earnings reports include ALLY, FHN, HBAN, KSU, RF, and SLB before the open. There are no earnings reports after the close.
The markets look bearish this morning, perhaps pointing to some profit-taking at the highs or following Europe’s lead-based on virus-reduced economic activity. However, we do have a little more US data to come this morning, so don’t panic. Still, do bear in mind we are at all-time highs across the board and a bit extended to boot. The bottom line is that we need to be cautious at the highs, going into the weekend.
Lock in those profits when you achieve trade goals and stick with your discipline. As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. There will be another trade. So, focus on the overall market, the specific chart, and your own trading process. Remember, trading is a long-term game. We don’t have to try to get rich every day.
Ed
Swing Trade Ideas for your consideration and watchlist: VIAC, KSS, JMIA, OSTK, SOLO, MRNA, FUBO. You can find Rick’s review of those 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.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Market Celebrated
With record highs across the board, the market celebrated strong earning and the administration change in the Whitehouse with the promise of more stimulus on the way. Though there is a chorus of investment banks suggesting higher market highs are on the way, some are suggesting a euphoric market bubble has formed. Who’s right? Your guess is as good as mine. The best we can do is plan carefully, avoid overtrading and stay with the trend as long as it lasts, but always remembering it will one day end.
Overnight Asian markets traded mostly higher, and European markets edge higher, keeping an eye on earnings data. U.S. futures point to a positive open with a busy day of earnings, economic and political news setting the stage for possible volatile price action.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have the biggest day of the week, with 43 companies on the list and 33 confirmed reports. Notable reports include INTC, BKR, CTXS, CSX, FITB, IBM, ISRG, KEY, MTB, PPG, STX, SIVB, TAL, TRV, & UNP.
News and Technicals’
The market celebrated the strong earnings and President Biden’s inauguration, setting new record highs set in all four indexes. He signed 17 executive orders yesterday and plans another 10 today addressing pandemic issues. Dr. Fauci says the U.S. will remain a WHO member and join the global Covid vaccine plan. Stock futures are once again edging higher this morning, with Godman, Morgan Stanley, and JPMorgan singing in chorus for higher valuation to come. However, not everyone feels that way, with Jeremy Grantham saying the market is in a bubble with very seldom seen euphoria levels. As a technical trader, all I can do is stay with the bullish trend until as long as it lasts, carefully planning risk, making sure to follow my trading plan rules, and avoiding overtrading with the existing extending market condition.
Setting new record highs across the board makes it easy to see that the bulls are large and in charge of the market trends. However, it is also easy to see a very extended market condition that poses a significant risk of a steep selloff that should cause the market to stumble. Take caution in trading stocks that extend from price supports. We have a big day earnings and economic data and a boatload of political news that has the potential to create significant price volatility. Plan carefully.
Trade Wisley,
Doug
Earnings and Jobless Claims Lead
Markets gapped higher Wednesday on inauguration hopefulness. After the open, the bulls continued a steady sally the rest of the day. All 3 major indices closed at new all-time high closes and toward the top of their candles. On the day, the QQQ was up 2.33%, SPY was up 1.38%, and DIA closed up 0.79%. The VXX lost almost 2% to 16.31 and T2122 climbed deeper in the overbought territory at 92.82. 10-year bond yields fell to 1.077% and Oil (WTI) was up slightly to $53.24/barrel.
The Biden inauguration filled most of the day’s news cycle. However, the Democrats also took control of the Senate on the government front. Among the executive orders President Biden signed were the rejoining of the Paris Climate Agreement, rejoining the W.H.O., and a mask mandate covering all federal property and federally-regulated public transport. New White House Chief of Staff Klain also issued a memo freezing all last-minute changes former-President Trump tried to enact (such as dropping travel restrictions for Brazil and Europe).
A report from CINNO Research says that QCOM’s market share in China shrank over 48% year-on-year, due in large part to US sanctions on Huawei as well as Chinese smartphone makers looking to domestic sources as US-based companies were seen as unreliable due to the US Government intervention. QCOM’s Taiwanese competitor MediaTek was the big winner from this portion of the trade war.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 24,998,975 confirmed cases and 415,894 deaths. This comes as the average new cases has fallen to 197,041 new cases, but deaths remain high (Wed. had the 2nd highest daily total at 4,374) at 3,140 per day. New CDC Director Walensky called for more testing and vaccinations on her first day. This came as NYC had to cancel 23,000 vaccination appointments due to a lack of vaccine.
Globally, the numbers rose to 97,403,475 confirmed cases and the confirmed deaths are now at 2,085,744 deaths. As a reference, the world average new cases is down to 645,184 per day, but deaths remain high at 13,600 new deaths per day. In some great news for those who had worries, two new studies just published show that while the UK and South African mutations of Covid do evade some of the immunity provided by the PFE and MRNA vaccines, they do not evade all of the protection from the vaccine. In fact, enough of the immunity remains that the studies claim the vaccines do provide protection from those variants.
Overnight, Asian markets were mixed, but leaned bullish. Shenzhen (+1.53%), South Korea (+1.49%), and Shanghai (+1.07%) led the gainers. On the downside, India (-0.37%) and Malaysia (-0.42%) were the most notable losses. Meanwhile, in Europe, so far today markets are also mixed, but mostly higher. Among the big 3 bourses, the FTSE +0.11% is flat, the DAX (+0.45%) is up, and the CAC (-0.17%) is down slightly. The biggest moves are in smaller exchanges such as Russia (-1.33%) and Belgium (+1.12%) at this point in the day. As of 7:30 am, US futures are pointing to a modestly higher open. The DIA is implying a +0.21% open, while the SPY implies a +0.26% open, and the QQQ is implying a +0.46% open.
The only major economic news for Thursday is Dec. Building Permits, Dec. Housing Starts, Weekly Initial Jobless Claims, and the Jan. Philly Fed Mfg. Index (all at 8:30 am). Major earnings reports include BKR, FITB, KEY, MTB, TAL, TRV, TFC, and UNP before the open. Then after the close, CSX, INTC, IBM, PPG, STX, and SIVB report.
The markets look slightly bullish this morning and that is certainly where the trend points. However, we need to bear in mind we are at all-time highs across the board and extended to boot. President Biden is expected to invoke the Defense Production Act to ramp up vaccine production and distribution today. While this won’t likely have a major market impact, it may affect specific tickers. The bottom line is that we need to be cautious getting too far out on the bull limb since the indices may need rest after yesterday’s pop.
As always, follow the trend, respect both support and resistance, and don’t chase the moves you have missed. Lock in those profits when you achieve trade goals and stick with your discipline. Focus on the overall market, the specific chart, and your own trading process. Remember, trading is a long-term game. We don’t have to try to get rich every day.
Ed
Swing Trade Ideas for your consideration and watchlist: CSIQ, TJX, SIX, UAA, JBHT, STNE, ADT, KIRK, WING, NET, AQN. You can find Rick’s review of those 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.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Inauguration Day
Markets are bullish this Inauguration day as we swear in Joe Biden as the 46th president of the United States. Though security is high in Washington D.C., most expect an uneventful transition of power. However, a light and choppy day of price action is possible after the morning rush of earnings fueled trading with traders distracted by the political festivities. As your plan your risk forward, keep in mind we have a busy economic calendar Thursday and Friday, not to mention the ramp-up in earnings reports.
Overnight Asian markets traded mixed but mostly higher as shares of Alibaba soar. European markets cautiously edge higher this morning earnings and inauguration in focus. U.S. futures point to a bullish open, with NASDAQ leading the pack on the back of the strong NFLX earings. Stay frosty as the price volatility is likely to ramp with earnings.
Economic Calendar
Earnings Calendar
On the Hump Day earings calendar, we have 25 verified reports fessing up to quarterly results. Notable reports include AA, ASML, BK, CFG, DFS, FAST, KMI, MS, PG, USB, UAL, & UNH.
News & Technicals’
Coming back from the MLK holiday, the bulls went back to work with energy from earnings reports and hopefulness we will soon get another big round of stimulus. During confirmation hearings yesterday, Treasury secretary nominee Yellen stated that the country should act big in the next virus package to bolster the economy. After the bell, Netflix reported a solid quarter surprising and that it is not shrinking away from the challenge that the Disney streaming service provides. Today we have the inauguration of President Biden and transition of power. Biden plans to issue executive orders to rejoin the Paris climate accord and revoke the Muslim travel ban on his first day in office. It will not be a surprise if we see some light and choppy price action after the open with the inauguration ceremony’s political distraction.
Although the bulls came to work yesterday, they seemed to struggle a bit will overhead resistance. Perhaps a result of traders extending their holiday. With the big overnight move in NFLX, the QQQ will be the leader this morning and may well ink a new record high at the open as a result. The energy and financial sectors continue to fule the IWM higher yesterday, closing the day just short of a new record. Trends remain bullish, although the T2122 Indicator continues to warn of a short-term overextended condition. Stay with the trend but don’t become complacent as we stretch out to the upside.
Trade Wisely,
Doug
Inauguration and Earnings
Markets gapped up Tuesday after coming back from a long weekend and getting good pre-market earnings from the major banks, including a blow-out quarter from GS. After the gap up, the major indices traded indecisively with the QQQ being the strongest of the group. On the day, QQQ was up 1.46%, SPY up 0.79%, and DIA up 0.39%. VXX lost more than 2.75%, down to 16.63 and T2122 jumped back into the overbought territory at 85.41. 10-year bond yields were off slightly to 1.092% and Oil (WTI) gained 1.32% to close at $53.05/barrel.
During her confirmation hearings Tuesday afternoon, Treasury Sec. Nominee Yellen told Senators that the US can afford higher corporate taxes, but only after coming out of the Coronavirus slump and only in coordination with other countries. Specifically, she said tax rate action should be coordinated with other OECD to avoid “a destructive global race to the bottom on corporate taxation of multinationals.” She also defended the $1.9 trillion stimulus proposal by saying it offers the “most bang for the buck” in terms of relief for struggling households and businesses. Finally, she said the Biden Administration would support a strong and stable dollar (in direct contrast to the Trump who liked the idea of a weak dollar). The market did not respond to her testimony in any meaningful way.
Interest rates rose again in the last week (to a still-low 2.92% for a 30-year fixed mortgage), but remains almost a percent lower than it was one year ago. This came as new mortgage applications dropped almost 2% and refinance demand fell 5% on the week. It is worth noting that President Biden has proposed a $15,000 tax credit for first time home buyers to help bolster the home construction industry.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 24809,841 confirmed cases and 411,520 deaths. This comes as the average new cases have fallen to 204,228 new cases and deaths have flattened at 3,098 per day. The CDC reports that 13.6 million Americans have received at least one shot of the two required to date. This includes 2 million people who have received both doses. At the same time, distribution problems continue to plague the rollout. Several states are a few days from being out of the vaccine while more than 12 million doses are still in Federal hands, but not at the locations needed.
Globally, the numbers rose to 96,727,446 confirmed cases and the confirmed deaths are now at 2,068,303 deaths. As a reference, the world average new cases is down to 656,402 per day, but deaths remain high at over 13,460 new deaths per day. In Europe, a third cabinet member of the Portuguese government has tested positive in just this week. Germany tightened restrictions (now mandating N95 mask-wearing in public) and extended the national lockdown until at least mid-February. UK Home Sec. Patel told reporters its far too early to think about easing lockdown measures. In China, a new outbreak has the country scrambling, including building a 4,000-bed isolation camp in just a week. This happens as China is seeing its worst outbreak in months and tens of millions of Chinese people have been put on strict lockdown in the North of the country.
Overnight, Asian markets were mixed, but mostly higher. Shenzhen (+1.42%), Hong Kong (+1.08%), and Indonesia (+1.71%) led the gainers. Notable losses include Japan (-0.38%) and Taiwan (-0.45%). Meanwhile, in Europe, so far today markets are also mostly higher on modest moves. Among the big 3 bourses, the FTSE -0.03% is flat, the SAD (+0.47%) is up, and the CAC (+0.24%) is also positive. As of 7:30 am, US futures are pointing to a higher open. The DIA is implying a +0.15% open, while the SPY implies a +0.38% open, and the QQQ is implying a +0.82% open.
The only major economic news for Wednesday is President Biden’s Inauguration and Speech (Crude Oil Inventories Report moved to Friday). Major earnings reports on the day include ASML, BK, CFG, FAST, MS, PG, USB and UNH all before the open. Then, after the close, AA, DFS, KMI, PLXS, and UAL report.
Markets seem to like the new administration and continue to aim toward record highs. With 25,000 troops plus thousands of Federal Law Enforcement on hand, protests, riots, or attacks at inauguration events seem unlikely. So, the bulls continue to have the edge as we look to the open. (It doesn’t hurt that Tres. Sec. Nominee Yellen was not given much pushback when she called to big action on the stimulus plan that Mr. Market loves.)
So, look for a bullish start to the day. As always, follow trend, respect both support and resistance, and don’t chase the moves you have missed. Lock in those profits when you achieve trade goals and stick with your discipline. Focus on the overall market, the specific chart, and your own trading process. Remember, trading is a long-term game. We don’t have to try to get rich every day.
Ed
Swing Trade Ideas for your consideration and watchlist: A technical snafu means no Trade Ideas for Wednesday, but they are in the video 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.
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