After a huge bullish party on the first week of 2021 where bad jobs data didn’t matter, may the futures suggest the market may have to deal with a hangover this morning. Surging pandemic numbers with California officials reporting a death every 8-minutes on average weighs on investors. Index trends remain in bullish trends and enjoy price breakout price supports just below. That said, a 200 point Dow reversal at the open with the VIX still hovering above a 20 handle could become painful if the bears begin to show their teeth.
Overnight Asian markets were mixed but mostly higher. European markets currently trade in the red across the board, and U.S futures point to a gap down open ahead of a light economic calendar day. Keep in mind; we officially kick off the 1st quarter earnings season this week so expect some price volatility and wild morning swings as traders and investors react to the data.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 11 companies that have confirmed their quarterly results will release today. Notable reports include CNXC, KRUS & SNX.
News & Technicals’
After a substantial rally on the first week of 2021, the market seems to have turned its attention to pandemic concerns. According to health officials, California is in crisis mode with hospitals over capicty and an average of one death every eight minutes. Refrigerated trucks must now be utilized as temporary storage of bodies, and waiting patients line the hallways as the system strains to provide care. Japan has now identified another variant of the virus, while countries scramble to contain two other contagious variants that have emerged in the U.K. and South Africa. The 10-year treasury is on the rose above 1.1% following Bidens Friday pledge of more economic stimulus that would be, ‘in the trillions of dollars.” If that’s not enough political news to give the market heartburn, Congress is moving forward with President Trump’s impeachment process with just a week to go before President Biden takes office.
Though it seems like there chaos around the world, the U.S. market has had an unbelievable ability to ignore continuing to set records. The jobs data seems to no longer be necessary as long as the government is willing to deficit spend. Although that would seem to have a diminishing return over time, stocks have enjoyed a ravenous bull run. Index’s remain in bullish trends as the VIX continues to hover above a 20 handle. This morning futures point to a gap down open, but with indexes above price supports and tends, it could be nothing more than a short-term pullback. Stay with the trend while keeping in mind there could be a substantial risk if the sentiment suddenly shifts. Don’t overtrade and have a plan should the bears make an appearance.
Heads up: There will be no Tuesday morning blog, my Buckeyes play tonight.
Markets gapped up moderately on Friday and then did a roller-coaster selloff until mid-afternoon. At that point, the bulls stepped in and led a strong rally that lasted right into the close. This left the SPY and DIA with Hanging Man type candles. All 3 major indices closed at yet another new all-time high close. On the day, QQQ (+1.29%) led, while the SPY gained 0.57% and the DIA gained 0.17%. VXX lost another percent to 16.35 and T2122 remains in the overbought territory at 87.06. 10-year bond yields screamed higher again to 1.119% and Oil (WTI) gained 3.74% to $52.73/barrel.
On the heels of Thursday night’s large government fine and charges, in what may be more bad news for BA, an older model of the 737 (a 737-500) crashed a few minutes after takeoff in Indonesia on Saturday. The black boxes were located on Sunday and the Indonesian government hopes to retrieve them from the ocean shortly. In other trading news, Bitcoin is proving as volatile as ever for crypto traders. It has fallen 11% overnight on what analysts are saying is likely profit-taking. This comes as the Dollar rose against global currencies.
In continued fallout from Wednesday’s seditious riots on the US Capitol, AAPL followed GOOGL lead and has removed the radical right alternative to TWTR from its app store. TWTR, FB, YouTube and other social media have also banned the President and most of his leading conspiracy theory spewing followers such as QAnon, Sidney Powell, Rudy Giuliani, Michael Flynn, etc. Other related news includes Congress demanding VP Pence invoke the 25th Amendment and they are also expected to pass another Impeachment this week. For his part, the President apparently intends to try changing the topic and running out the clock by traveling to a section of the border wall in Texas.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 22,917,334 confirmed cases and 383,275 deaths. The post-holiday surge is now starting to hit, as we average 250,368 new cases and 3,306 deaths per day. The US has now seen more than 100,000 COVID-19 hospitalizations for 40 days in a row. Harvard and MIT report that the US is lagging in the speed of genetic sequencing of samples, which helps explain why so few cases of the new UK variant have been found. In the US it takes 85 days on average from sample collection to posting sequences. This is slower than many smaller and poorer countries (such as Bangledesh).
Globally, the numbers rose to 90,769,055 confirmed cases and the confirmed deaths are now at 1,944,726 deaths. As a reference, the world is averaging over 725,000 new cases and almost 13,000 new deaths per day. In the UK, the Chief Medical Officer of the country said Britain was at the worst point of the pandemic. The UK plans to tighten its lockdown in response. However, in France, the government says no new lockdown measures are needed at this point. In China, they have completed the mass testing of over 17 million people in one province…all done in 5 days. In Japan, they have identified (genetically sequenced) yet another COVID-19 variant.
Overnight, Asian markets were mixed. Japan (+2.36%) far outpaced all other gainers, while Shenzhen (-1.80%), Shanghai (-1.08%), and Malaysia (-0.98%) had the worst losses. In Europe, markets are mixed but lean much more heavily to the downside as of mid-day on the continent. Among the 3 major bourses, the FTSE is down 0.51%, the DAX down 0.68%, and the CAC down 0.60%. As of 7:30 am, US Futures are following Europe this morning. The DIA is implying a gap down of 0.77%, the SPY implying a gap down of 0.64%, and the QQQ implying a gap down of 0.63%. This is possibly pre-market profit-taking after a strong week and trying to time exuberance.
There is no major economic news for Monday, but there is a Fed speaker (Bostic at noon). Major earnings reports on the day are limited to CMC before the open and SNX after the close.
Markets have moved on from the seditious Washington riots and seem to be more focused on extension, if not valuations at these all-time highs. With no economic data or earnings to change the narrative, the balance seems to be between how much Mr. Market likes President-elect Biden’s stimulus plans and the vaccine rollout versus how much he fears over-extension and the virus. Keep this in mind as you decide whether to add positions, hedge your bets, or take money off the table.
As always, follow the trend, respect both support and resistance, and don’t chase the moves you have missed. Lock in those profits (base hits are better than long fly-outs) and stick with your discipline. Focus on the market, the chart, and your trading process. Remember, trading is a marathon, not a sprint.
Go Bucks!
Ed
Swing Trade Ideas for your consideration and watchlist: PEIX, BMY, ZEN, CSCO, PTON, PINS, LOW, JD, GE. 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
Bulls continue to run, and no price seems too high, setting new records as traders and investors hope for more federal stimulus. Today we get the latest reading on the Employment Situation, but it may not matter as we saw on Wednesday when private payrolls declined and the market soared. That said, stay focused and prepared because if a bearish move were to begin, price supports are painfully lower so, have a plan. Also, keep in mind, this could be a particularly newsy weekend on the political front.
Overnight Asian markets mostly rose, with the NIKKEI soaring 2.36%. European markets trade higher this morning, and ahead of the Employment Situation report, U.S. futures point to more record highs. Remember to take some profits after such a steep rally as we head into the weekend.
Economic Calendar
Earnings Calendar
We have had a very light day on the Friday earnings calendar with only one verified report coming from the small-cap company LEDS.
News & Technicals’
The market continued to rally after congress certified the Biden presidency. In the final days of the Trump administration, there has been a call to invoke the 25th amendment to remove him from power. Congress is also threatening the 2nd impeachment to remove the president. How these events might impact the market is anyone’s guess. As of now, the bulls seem very confident the Biden administration will put the printing presses into overdrive, adding additional federal stimulus, resulting in new market records with the Dow more than 1100 points above the Monday low. Sadly at the same time, the daily death rate from the pandemic also set a new record, topping 4000 for the first time.
A look at the index charts, and there is not much to say other than the bulls remain in control, and no price seems too high as traders and investors rush into already extended stocks. Today we will get a reading on the Employment Situation. Consensus suggests job growth declined in December due to pandemic restrictions. Still, I’m not sure that matters in this current environment as we saw on Wednesday with private payrolls falling and the Dow rallied sharply. The T2122 indicator is once again signaling a short-term overbought condition, and the VIX remains elevated above 20 handles as we continue to push higher. Stay with the trend and stay focused because a profit-taking pullback has the potential of beginning at any time and could be rather steep with not much for nearby price support.
Markets gapped up a half to nine-tenths of a percent Thursday as markets got past the turmoil of Wednesday and decided they liked the idea of a united government. After the open, drifted higher and then waffled the rest of the day. On the day, all 3 major indices closed at new all-time high closes, with the SPY and QQQ putting in strong white candles that closed near the highs. However, the DIA backed off to form a cap-up Doji type candle. At the close, QQQ was up 2.42%, SPY was up 1.49%, and DIA was up 0.74%. The VXX fell almost 6% to 16.53 and T2122 fell slightly, but remains in the overbought territory at 88.67. 10-year bond yield drove strongly higher again to 1.079% (the high since last March) and Oil (WTI) was up two-thirds of a percent to $50.97/barrel.
Shortly after the close, the DOJ fined BA $2.5 billion and charged the company with conspiracy to defraud over company deception related to the 737 Max crashes in late 2018 and early 2019. The other market news was that Bitcoin broke more records again on Thursday, now trading very close to $40,000. Finally, before the open Thursday, the NYSE again reversed course (again) and decided they will delist the 3 Chinese Telecom giants.
As expected, the other major news on the day was political. Democrats and some Republicans called for the removal of President Trump by invocation of the 25th Amendment and/or Impeachment for his incitement of Wednesday’s insurrection. The larger GOP names attempted to distance themselves from Trump by either denouncing him or resigning like Transportation Sec. Chao. At the other end of the spectrum, Trump attack dogs went into hiding and radio silence in hopes that the furor will blow over by inauguration day. At day end, the President released another desperate video in an attempt to prevent others from removing him. In it, he vaguely conceded that he lost, managed to go 2 minutes without lying about winning and having the election stolen, but then lied about how he acted as soon as he saw the rioters. Either way, if the riots didn’t completely spook Wall Street, the resignations, posturing, and/or silence certainly has not done so. So, it appears Wall Street is well past the episode.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 22,137,009 confirmed cases and 374,197 deaths. The post-holiday surge is still not fully upon us yet, but we again hit national record highs of 279,154 new cases and 4,207 deaths Thursday. However, the 7-day daily average remains at 234,110 new cases and 2,831 deaths per day. The CDC announced that over 21 million doses of the PFE-BTNX vaccine have been “distributed,” but just 5.9 million doses have been administered as of day end Thursday.
Globally, the numbers rose to 88,615,325 confirmed cases and the confirmed deaths are now at 1,908,948 deaths. As a reference, the world is averaging 659,484 new cases and 11,357 new deaths per day. In Europe, the EU has purchased 300 million more doses of the PFE-BNTX vaccine. A trial held in 6 countries (800 patients studied) found that a combination of 2 Arthritis drugs shows an 8.5% decrease in mortality when administered to the sickest patients. Brazil announced that the second of 2 Chinese vaccines they have studied is 78% effective during phase 3 trials. Although quite a bit less effective than the PFE or MRNS vaccines, the Chinese vaccines are much, much easier to ship and distribute because they can be stored at normal refrigerator temperatures. Speaking of China they are tightening restrictions again. In addition to the locked-down province, they have quarantined a city of 11 million residents and now commuters are required to show proof of Beijing residence and a Negative test result before they can travel to the capitol.
Overnight, Asian markets were mostly in the green. South Korea (+3.97%), Singapore (+2.97%), and Japan (+2.36%) led the way. Mainland China was down slightly on fears over new outbreaks. In Europe we see a similar story so far today, but with much smaller gains. The FTSE (+0.02%) is flat with the DAX (+0.79%) and CAC (+0.53%) being more typical again. As of 7:30 am, US Futures are moderately green this morning. The QQQ is again strongest, implying a +0.55% gap up open, while the SPY (+0.38%) and DIA (+0.28%) are implying more modest gains at the open. However, we are likely waiting on data at 8:30 before deciding the open.
The major economic news for Friday includes Dec. Avg. Hourly Earnings, Dec. Nonfarms Payrolls, Dec. Unemployment Rate, and Dec. Participation Rate (all at 8:30 am). There is also a Fed speaker (Clarida at 11 am). There are no major earnings reports on the day Friday.
With any fear from the Washington riots in the rearview mirror, the markets have been running hard. There is a data dump at 8:30 am which may influence short-term sentiment, but the bulls seem to have decided they like a Democratic-run government coming soon. That said, don’t get over-exposed to the upside ahead of the weekend if you can’t stand headline risk. Trump won’t like being sidelined and may do something just to make sure everyone knows he’s still around.
As always, lock in profits (base hits are better than long fly-outs) and stick with your discipline. Follow the trend, respect both support and resistance, and don’t chase the moves you have missed. There will be another opportunity and we don’t need to trade every day. Focus on the chart and your trading process. Remember, trading is a marathon, not a sprint. Finally, remember it’s Friday…don’t forget to pay yourself.
Ed
Swing Trade Ideas for your consideration and watchlist: AAPL, PANW, PINS, CHGG, QCOM, MNST, BLUE, UBER, NIO, MTCH. 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
After a hideous and disgraceful display of politically fueled violence, Congress went back to work to certify the election for our Joe Biden. Let’s hope this country can now begin to heal. The bulls are clearly in control with hopes that more government stimulus is on the way under the new administration. Futures point to a modestly bullish open ahead of our biggest day of earnings this week and an economic calendar that includes a reading on Jobless Claims.
Asian markets closed mixed but mostly higher while China telecom shares plunged after the flip-flopping NYSE delisting decision. European markets are mostly higher this morning, and the U.S. futures indicate new market records at the open. Keep in mind before the bell tomorrow; we will get the latest reading Employment situation number, so plan your risk accordingly.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have our most significant day with 21 confirmed reports. Before the bell, we will hear results from ANGO, AYI, BBBY, CAG, CSVI, HELE, LNN, LW, NTIC, PKE, REVG, SCHN, STZ, WBA, & WEI. After the bell, ACCD, AEHR, DCT, FC, MU, PSMT, & WDFC.
News & Technicals’
In my opinion, yesterday’s attack on the U.S., the capital, was one of the most shocking and disappointing events as our countrymen disgraced our republic. As a former military officer, I will pick up my M16 and defend the people’s right to protest. However, no matter your cause, there is no excuse for violence that puts our fellow countrymen in harm’s way. There is no excuse for this kind of behavior! After a very long night session, Congress certified the election for president-elect Joe Biden. Let’s hope the healing can now begin.
The bulls were out in force yesterday as it became evident that the Senate would flip after the runoff elections in Georgia, with the market celebrating a hopefulness of more government stimulus. The DIA and IWM closed at new record highs while the SPY pullback late in the day, losing its hold on an intraday record high. Trends remain bullish in the DIA, SPY & IWM while the QQQ displays a bit of weakness breaking its short-term uptrend. This morning, futures point to modest gains, ahead of International trade numbers and the weekly Jobless Claims report. As you plan forward, keep in mind that we will get the Employment Situation number before the bell on Friday, which is often a market mover.
As has been the case each day this year, markets gapped one way and then charged the other direction immediately. Wednesday saw the gap down followed by a strong morning rally. About 11:30 markets started to grind sideway, even drifting a bit higher until shortly after 2 pm. Then our deluded President’s conspiracy theory lies believing followers were incited to riot and storm the US Capitol building. Markets sold off as the seat of government was under siege for hours, but still managed to hold on to some of the morning gains. The DIA even closed at another all-time high close. On the day, DIA gained 1.44%, SPY gained 0.60%, and QQQ lost 1.39%. The VXX actually lost half a percent to 17.55 and T2122 jumped up into the overbought territory at 92.48. 10-year bond yield shot higher again to 1.039% and Oil (WTI) gained another percent to $50.52/barrel.
Lost amongst the coverage of insurrection was that the Democrats won both of the GA Senate runoff elections. So, President-elect Biden’s party will also control both Houses of the Congress (through VP Harris’ tie-breaking vote). Some had said an expectation of that outcome was the reason for the gap down. However, then markets immediately rallied, so it is hard to divine what Markets think about that change in governance. Still, it makes the increase to a $2,000/person direct payment much more likely.
The other story lost in the wash was that the riots helped to accelerate the weakness in the dollar. It has now fallen to the levels not seen since 2017. This has helped drive the Euro to a level that currency has not seen since 2014. Obviously, as the dollar falls, dollar-denominated commodity prices rise. This partially explains the gains in Gold and Oil. It also increases the pressure on the Fed and fiscal stimulus, which goes less far as each dollar of stimulus buys less. Overseas, it makes it harder for Central Banks and Governments to repay their own debt and to sell goods to the US. As a result, Bloomberg reports that some analysts are expecting the ECB and China to take action to lower the value of their own currencies to offset dollar weakness.
It’s hard to believe, but on a day with 4,100 virus deaths in the US, COVID-19 took a back seat. Related to the virus itself, US infections continue to rage as the US. The totals have risen to 21,857,616 confirmed cases and 369,990 deaths. As mentioned, we did hit another national record high in deaths, but also in new cases at 260,973 on Wednesday. However, the 7-day daily average remains at 228,891 new cases and 2,742 deaths per day.
Globally, the numbers rose to 87,763,513 confirmed cases and the confirmed deaths are now at 1,893,873 deaths. As a reference, the world is averaging 645,896 new cases and 11,250 new deaths per day. In Japan, the PM has declared a state of emergency in Tokyo and surrounding areas as they also reported a record number of new cases. Travel bans from international travel, especially from the UK and South Africa continue to be added. In Europe, the EU approved the MRNA vaccine, which means it will begin rollout across the EU by next week.
Overnight, Asian markets were mostly in the green. South Korea (+2.14%), Japan (+1.60%), and Australia (+1.59%) led the gainers. The only appreciable loss was in Hong Kong (-0.52%) with a couple other exchanges just on the red side of flat. In Europe we see a similar story so far today. The FTSE (-0.47%) is one of the notable red spots with the DAX (+0.41%) and CAC (+0.31%) being more typical of the continent. As of 7:30 am, despite the deluded riots that left 4 dead and the seat of Government battered, US Futures are moderately green this morning. The QQQ is strongest, implying a +0.74% gap up open, while the SPY (+0.40%) is implying a positive, but not gappy open and the DIA (+0.28%) is implying a modest gain at the open.
The major economic news for Thursday includes Import/Exports, Nov. Trade Balance, and Weekly Initial Jobless Claims (all at 8:30 am.), Dec. ISM Non-Mfg. PMI (10 am), and a pair of Fed speakers (Harker at 9 am and Bullard at Noon). Major earnings reports include AYI, BBBY, CAG, HELE, LW, REVG, STZ, and WBA before the open. Then after the close MU reports.
Volatility continues early in 2021. However, it would be hard to predict anything as volatile as Wednesday’s riots happening again. Even though the Cabinet apparently hasn’t had the courage to invoke Article 25, we can expect impeachment proceedings soon unless the GOP is willing to make massive concessions to buy off Democrats. At any rate, with the immediate threat behind us and President Biden’s election now certified, hopefully, we can return to the virus being the main threat for days to come. It would still be wise to remain cautious and not chase. Be ready for the market switch-backs we’ve seen each of the first several days of the year.
As always, lock in profits (base hits are better than long fly-outs) and stick with your discipline. Follow the trend, respect both support and resistance, and don’t chase the moves you have missed. There will be another opportunity and we don’t need to trade every day. Focus on the chart and your trading process. Remember, trading is a marathon, not a sprint.
Ed
Swing Trade Ideas for your consideration and watchlist: GOLD, KGC, GDX, WPM, NUGT, AGI. 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
Political news out of the Georgia runoff election and the Congressional vote to certify the Biden presidency with efforts to block the process could set off price action fireworks in the market today. The bulls have defended support levels, but they fell just short of clearing the price resistance above at the close yesterday. With the VIX remaining elevated, be prepared for some news related price volatility, and don’t forget the FOMC minutes’ release this afternoon.
Overnight Asian markets closed mixed but mostly higher as energy stocks surged following the OPEC action. European markets see green across the board this morning, while the U.S. Futures offer up a mixed bag of results with the Dow higher and the other indexes modestly lower heading into the open. Stay focused and flexible as anything is possible on this very political new driven day.
Economic Calendar
Earnings Calendar
On the Hump Day earnings calendar, we have nine verified reports. Before the bell, we will hear from GBX, MSM, RPM, SMPL, & UNF. After the bell, LNDC, RELL, RGP, & SAR will report.
News & Technicals’
We face an interesting day in the market with a lot of political news that has the potential to move the market. First, we have the runoff elections that are drawing closer to flip the Senate raising concerns it will clear the deck for higher taxes. We also Congress try to certify the Biden election win, but a group also moves to block the effort, and protests have already begun. The 10-year Treasury yield rose above 1% for the first time since March in reaction to current Georgia runoff results, and Bitcoin surged above $35,000 for the first time. While politics preoccupy the market, the daily death toll hit new records as more than 3800 Americans succumb to the virus. Sadly, a grisly reminder we may have a long way to go to win this pandemic battle.
Yesterday’s bullish price action lifted the index charts just enough to challenge price resistance but failed to clear the level by the close. We should plan for the possibility of price volatility based on the political wrangling in Congress and Georgia. We also have some economic news to keep an eye on, such as releasing the FOMC minutes at 2:00 PM Eastern to create some price action fireworks. The VIX remains elevated as we attempt to rally, and the Absolute Breadth Index continues to show a concerning decline. Stay with the bullish trend but stay on your toes should the sentiment quickly shift.
Markets opened slightly lower on Tuesday. However, after a rollercoaster first hour, the bulls took control and led a sustained rally up until the last hour, which gave back just a touch of the gains. On the day the QQQ gained 0.82%, the SPY gained 0.69%, and the DAI gain 0.50%. VXX fell over 3% to 17.64 and T2122 shot back up to sit just below the overbought territory at 77.17. 10-year bond yields rose sharply to 0.955% and Oil (WTI) shot up over 4.5% buoyed by Saudi Arabia announcing production cuts, leaving it at $49.80/barrel after trading above $50 for the first time since last February.
Politics takes center stage again today without much real short-term impact. One of the two GA Senate races is projected to go to the Democrat challenger while the other election is too close to call, with the Democrat currently in the lead. If both Democrats win, the Senate becomes a stalemate for 2 years with Democratic VP Harris then being the deciding vote. If either seat remains Republican, current Majority Leader McConnell retains the power to obstruct all Democratic plans for 2 years. Meanwhile, the delusion of conspiracy theories comes to a crescendo as the President and some of his supporters will hold political theatre before accepting the Nov. election results.
Mortgage demand pulled back 0.80% in the last 2 weeks of December, despite record low interest rates (2.68% for 30-year conforming loans, which was way down from 2.90% in the previous reporting period). The volume of applications was up 3% above the same period a year prior, but the volume had been running at 20% or more higher than the previous year since the beginning of the pandemic. So, this may be signaling an end to the home buying surge.
Related to the virus itself, US infections continue to rage as the US. The totals have risen to 21,579,641 confirmed cases and 365,664 deaths. The post-holiday surge is still not fully upon us yet, but we did hit a national record of 3,775 deaths Tuesday. However, the 7-day daily average remains at 222,771 new cases and 2,678 deaths per day. As mentioned yesterday, the hospital capacity in the Los Angeles area is critical. Ambulance crews have told to perform 15 minutes of life-saving at any scene and then only transport patients that do not have a low likelihood of survival. Beyond that, each ambulance may experience an hour or more of wait time at the hospital before a patient can be seen and they freed up for another call. In addition, all non-essential (beyond just elective) surgeries have been canceled in the region.
Globally, the numbers rose to 86,959,936 confirmed cases and the confirmed deaths are now at 1,878,706 deaths. As a reference, the world is averaging about 637,000 new cases and 11,250 new deaths per day. As in the US, in Europe, delays in vaccinations are a major storyline. The Netherlands just gave its first vaccination on Wednesday as their National Health Ministry had bet on the wrong vaccine to be ready first. In France the pace is also far, far behind with just a few thousands of doses given. Italy also received 100,000 fewer doses than they expected. Meanwhile, for comparison the UK has vaccinated 1.3 million people and Germany almost 400,000. In China, over 100 cases were reported in one province and that region is being locked down with a negative test required to enter or leave the province as of today.
Overnight, Asian markets were mixed, but mostly red. Indonesia (-1.17%), Australia (-1.12%) and Malaysia (-1.02%) led the losses. Shanghai (+0.63%) was the only appreciable green exchange. In Europe, markets are mostly green so far today. Among the big 3 bourses, the FTSE (+2.75%) leads as an outlier, with the DAX (+1.02%) and CAC (+0.80%) more typical. As of 7:45 am, US Futures are mixed. The QQQ is implying a large -1.44% gap down while the DIA (+0.15%) is slightly green and the SPY is implying a -0.27% open at this point.
The major economic news for Wednesday includes Dec. ADP Nonfarm Employment (87:15 am), Dec. Services PMI (9:45 am), Nov. Factory Orders (10 am), Crude Oil Inventories (10:30 am), and Dec. FOMC Meeting Minutes (2 pm). Major earnings reports are limited to MSM and RPM before the open. There are no major earnings reports after the close.
Volatility continues early in 2021, with each day so far starting with markets going one direction only to slam back hard the other direction. Some pundits claim this is related to fear over the Senate, others that is it virus-related. Regardless of the cause, be cautious not to chase and be ready for market switch-backs. Safe is better than fast and nimble is better than slow…if that makes sense.
As always, lock in profits (base hits are better than long fly-outs) and stick with your discipline. Follow the trend, respect both support and resistance, and don’t chase the moves you have missed. There will be another opportunity and we don’t need to trade every day. Focus on the chart and your trading process. Remember, trading is a marathon, not a sprint.
Ed
Swing Trade Ideas for your consideration and watchlist: CX, X, GE, LTHM, TLRY, AMAT, REGI, XRT. 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
