Trump Ends Talks But Now Wants Pieces

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Tuesday was, shall we say, interesting.  After a small gap down in the QQQ (and up open in the large-caps), markets ground sideways for most of the morning, until Fed Chair Powell told us the economy needed more stimulus once again.  This was seen as just the push negotiations needed and markets rallied hard on the news.  Unfortunately, at 3 pm the President tweeted that he has ordered a halt to any negotiations on more stimulus until after the election (so much for “GET IT DONE”).  Stocks immediately fell off the cliff (down 2.50%) and closed near their lows.  The DIA and SPY printed large Bearish Engulfing signals, but all 3 major indices printed big, ugly black candles.  On the day, DIA was down 1.35%, SPY down 1.42%, and QQQ down 1.78%.  The VXX was relatively flat, climbing to 25.26 and T2122 fell, but remains inside over-bought territory at 84.25.  10-year bond yields spiked on the President’s tweet to 0.749% and oil rose to $40.18/barrel.

While the halt to stimulus talks hammered the airline industry, BA had some additional news.  On the down side, BA slashed plane production forecasts by 11% and went on to say they do not expect the industry to recover for 10 years.  However, on the plus side the FAA proposed a pilot training program (for training and certifying pilots to fly the fixed 737 Max) and said they are finalizing the physical changes requirements list that will allow the 737 Max to be recertified.  This is a very positive milestone to getting that plane back on the market.

To top or yesterday’s episode of Political Theatre, our President has again reversed course overnight and is now again urging Congress to approve stand-alone portions of the stimulus program (no negotiation, just give him the parts he wants). Markets seem to taking this as hope for pieces of the stimulus package. However, this may well be just another of his negotiating tactics. No word on if anyone will take his pleading serious or what the Democratic reaction might be this time.

As mentioned yesterday, House Democrats released the Committee Report on the 16-month investigation into anti-trust activities by the tech giants.  The report says that AAPL, AMZN, FB, and GOOG all have monopoly power over their respective industries and should be treated that way.  Specifically, the report calls for prohibiting dominant companies from entering adjacent business lines (such as Google owning YouTube).  It also would increase enforcement agency budgets and tell them to presume a merger is anti-competitive until the merging companies show the merger would not impact competition.   Finally, it calls for prohibiting dominant firms from preferring their own products over competitors (making it hard, impossible, or much more expensive to use competitor products or services).  Republicans have said the broader measures are “non-starters” for the GOP. However, with bi-partisan cooperation on that committee, some changes are expected to be made as a result of the investigation.

On the virus front itself, in the US, the numbers show we now have 7,724,207 confirmed cases and 215,849 deaths.  The 7-day average daily new case count continues to rise and is now back up to 44,310, while the lagging average of deaths remains relatively flat now at 719 after Tuesday’s 790 deaths.  New case counts continue to grow, but the rate increase only rose in half the states overnight (which is actually a decrease in the number of states showing increasing rates, if that makes sense).  Wisconsin continues to experience a very bad situation with record new cases, new hospitalizations and new deaths.  As a result, Governor Evers instituted more emergency orders Tuesday to limit gatherings as well as building and room occupancies.

Globally, the numbers rose to 36,097,083 confirmed cases and the confirmed deaths are now at 1,055,639 deaths.  The broadening spread in Paris has the city’s Intensive Care beds filling fast as the patient load jumped overnight from about 420 ICU patients per day a month ago to 1,426 overnight.  Germany also reported the highest new case count since April overnight.  In fact, only 4 of the 27 countries in the EU do not report case counts at what the EU determined to be the “critical” level.

Overnight, Asian markets were slightly mixed, but leaned to the positive side.  Japan was flat, Shanghai down 0.20% and Malaysia down 1.32%.  However, Australian was up 1.25%, Hong Kong up 1.09% and Thailand up 1.08%.  The rest of the region saw more modest gains.  In Europe, markets are also mixed but leaning red with no substantial winners at mid-day.  Among the 3 major European Bourses, the FTSE is flat at +0.06%, the DAX down 0.40%, and the CAC down 0.23%.  The rest of the markets are showing modest losses (except Russia which is down 1.55%) at this point.  As of 7:30am, US futures are pointing to a significant gap higher.  The DIA is implying a 0.63% gain, SPY a 0.58% gain, and QQQ a 0.53% gains at the open.

The major economic news for Wednesday is limited to Oil Inventories (10:30 am), September FOMC Minutes (2 pm), FOMC Statement (2 pm), and 3 Fed speakers (Kashkari at 1 pm, Williams at 2 pm, and Williams again at 3 pm).  Major earnings reports are limited to LW and RPM both before the open 

Volatility continues its reign. With uncertainty high around the virus, the election, the President’s health (and unpredictable behavior), markets are in a knee-jerk cycle of concerns. If you feel you have to be trading in this environment, be light, be nimble, and be short-term. In any case, stick to your rules, follow the trend, and don’t chase moves you have missed.  Keep locking-in those profits, because a trader’s job is to make consistent gains…not win bragging-rights about out-guessing some reversal.

Ed

Swing Trade Ideas for your consideration and watchlist: NLS, SQ, W, DHI, WHR, LB, AAPL, PINS. 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

|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.

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

Silly Season

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Silly Season

With the election silly season in its final stretch and the President back at work, expect the political spin and uncertainty of what happens next to keep the price action volatile and the overall market on edge.  The CDC is warning that the virus can spread through airborne transmission and infect others more than six feet away.  Joe Biden is calling for the President to institute a national mask mandate.  A tweetstorm is surly to soon follow on the subject. 

Asian markets closed mixed but mostly higher as Australia’s central bank held steady on their interest rate policy.  European markets are trading with modest gains across the board as the US futures point to flat open ahead of economic data and a speech from Jerome Powell.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have just three confirmed earnings reports.  Notable reports include PAYX & LEVI.

News and Technicals’

The President is back in the White House medical unit while still recovering and is already receiving negative feedback for returning to work while still infected.  Joe Biden says the President bears responsibility for Covid-19 infection and calls for a national mask requirement.  With just four weeks until the election, I suspect both candidates will raise the bar on politicalizing the pandemic.  The CDC has now acknowledged that the virus spread through airborne transmission that infected others more than 6′ feet from one another.  Google has rebranded its office tools as Workspace as it goes head to head with Microsoft Office working to gain market share as more and more people are working from home.  A trend I suspect will continue over the coming years.  According to reports, teen spending has dropped to a two-decade low as the pandemic pressures have affected their parents and dramatically cut service jobs that teens often hold. 

After a surge of buying pressure yesterday, indexes reached out to test price resistance levels in the indexes pushing the T2122 indicator into a short-term overbought condition.  IWM experienced the most significant technical improvement on the day with oil and financial sector stocks bouncing up from recent lows.  Futures struggled around that flatline most of the evening and continue to this morning, although they well off their overnight lows.  After partying hard yesterday, it’s possible, the bulls need a little rest, but let’s hope the bears are not fortified in the price resistance above ready to attack.  With a light day on the earnings calendar, economic reports, Jerome Powell’s speech, and the stimulus news spin will likely keep the pice volatility high.

Trade Wisely,

Doug

Futures Flat as Stimulus Talks Continue

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Monday saw a gap higher about seven-tenths of a percent and continued a strong morning rally apparently on less concern over the President’s health and hope for more stimulus.  After a mid-day grind sideways, a late day rally took the markets out near the highs.  This left us with large white candles across all 3 major indices.  On the day, QQQ closed up 2.13%, SPY up 1.77%, and DIA up 1.70%.  VXX fell 3% to 24.97 and T2122 rose deep into overbought territory at 92.64.  10-year bond yields rose strongly to 0.778% and Oil (WTI) spiked 6% to $39.35/barrel.

On the stimulus story, House Speaker Pelosi and Treasury Sec. Mnuchin spoke for an hour Monday without reaching a deal.  However, the two sides will exchange proposal documents and are scheduled to speak again today.  In related news, LUV told its union employees that it can only avoid mass layoffs if they take large pay cuts (unknown amount) and that there was no time for long, complex negotiations over this matter. The company has already cut executive salaries by 20%.

Related to the year-long Tech Giant Anti-trust hearings in Congress, a Republican committee member (Buck, CO) told Politico that the committee report will call for AMZN and AAPL being prevented from owning marketplaces in which they sell their own products as well as those of competitors.  Other portions of the Democratic majority recommendations would represent a major update of the Glass-Steagall anti-competition law.  The release of the report is being delayed after last-minute new information surfaced related to the FB purchase of Instagram in 2012 and to incorporate GOP comment and objections.  Buck also told the reporter that the things proposed by the committee are non-starters for Republicans.  In an unrelated story, AAPL stopped the sale of competing speakers and earphones ahead of the launch of their own new products in those areas.

On the virus front, in the US, the numbers show we now have 7,679,908 confirmed cases and 215,039 deaths.  The 7-day average daily new case count continues to rise and is now back up to 44,397, while the lagging average of deaths remains relatively flat now at 747.  The new case count is rising in 36 states as of Monday (based on 7-day average). The CDC also revised its guidance again Monday, reversing course to acknowledge that the virus can linger in the air up to hours and can be transmitted via airborne particles.  The FDA also reported that it now expects at least one “emergency use” vaccine application by year-end. Meanwhile, Dr. Fauci again warned that the US is still lagging behind where it needs to be on Covid-19 testing coming into Winter.

Globally, the numbers rose to 35,740,361 confirmed cases and the confirmed deaths are now at 1,046,633 deaths.  In the EU, the European Medicines Agency has begun a rolling review of the BNTX vaccine (Oxford UK study).  This does not reduce the approval hurdles, but does speed up the process of evaluation.  In good news, India reported the lowest new case total (61, 267) it has seen in 6 weeks.  However, in less bright news, several European countries are introducing new restrictions.  France, has raised the alert level to maximum in the region around Paris, ordering the closing of bars again for at least 15 days.  Germany mandated that Parliament wear masks at all times and the Czech Republic declared a second state of emergency.

Overnight, Asian markets were mixed but leaned to the green side as Australia’s central bank held steady on policy and rates.  India (+1.38%) was the only mover of more than 1%.  In Europe, markets are also mixed but leaning green.  The 3 major European Bourses are all slightly positive, with the FTSE up 0.05%, DAX up 0.17%, and CAC up 0.33%.  The losses seen are all in smaller markets like Denmark, Switzerland, and Amsterdam.  As of 7:30am, US futures are all just on the red side of flat.  The DIA is flat at -0.02%, SPY -0.23%, and QQQ -0.36%.

The major economic news for Tuesday includes August Imports, August Exports, and August Trade Balance (all at 8:30 am), August JOLTS (10 am), and a trio of Fed speakers (Chairman Powell at 10:40 am, Harker at 11:45 am, and Kaplan (6 pm). On the earnings front, PAYX reports before the open and LEVI reports after the close.

After Monday’s strong bullish run, we still have no stimulus, but the President did get released to the White House medical facilities (versus actual hospital).  With earnings starting in a few days, it seems the market is both assuming and anticipating another shot of “free money” stimulus.  This comes as Piper Jaffray reports teen spending has hit an all-time low.  So, while it’s hard to bet against the bulls here, there is no general economic optimism or stimulus underpinning the move…just expectation.  In fact, most economists say the recovery is slowing and expect some sort of recession in 2021 regardless. So, be very wary of volatility or, heaven forbid, the government or economy not meeting market expectations.  

I was dead wrong yesterday about the gap-and-fade. The bulls never looked back for some unknown reason.  I suppose that’s just another reminder to not predict…just follow the chart. So, stick to your rules, follow the trend, and don’t chase moves you have missed.  Don’t get too far exposed either direction in this volatile market. Also remember to keep locking-in profits, because a trader’s job is to make consistent gains…not win bragging-rights.

Ed

Swing Trade Ideas for your consideration and watchlist: LB, NIO, NUAN, BLNK, FB, AAPL, BA, INTC. 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

|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.

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

Bulls Defend Price Support

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Defend

After a choppy news-driven choppy week of price action, last week with an ugly GDP, layoffs, and slower than expected job recovery, the bulls did a good job or defending price support.  Most notable last Friday was the bounce in the financial and energy sector, giving the IWM the power required to break above its 50-day average.  However, with the uncertainty of the presidential election and still no deal on a 5th stimulus package, it may be too early to sound the all-clear just yet.  Expect price volatility to remain considerably choppy.

Asian markets closed mixed but mostly higher overnight, reacting to a bounce in oil prices.  European markets are higher this morning across the board, and the US Futures point to a substantial gap up at the open as the market tracks the president’s health.  With a light economic and earnings calendar, price action may be particularly sensitive to the news cycle, so remain focused and flexible.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have just one unconfirmed possible earnings report today PRED. It’s a penny stock company and not notable as market-moving.

Trade Wisely,

Doug

Markets Looking to Gap Up to Open Week

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Markets saw a significant gap lower at the open Friday on the news of the President’s positive Covid diagnosis.  However, this gap was immediately faded by more than half as a roller coaster day between the prior close the and the gap-down open ensued.  By day end, all 3 major averages left large upper wicks and bodies at the lower end of the candle.  QQQ was a particularly ugly black-body candle as the FAANGM stocks all got hammered on the day.  At the close, QQQ was down 2.81%, SPY down 0.95%, and DIA down 0.48%.  The VXX gained 3% to end at 25.78 and T2122 (4-week New High/Low Ratio) jumped back up into overbought territory at 86.40. 10-year bond yields rose to 0.704% and Oil (WTI) fell again to $37.05/barrel.  This all said, the action for the week did break the streak of losing candles for the first time in 5 weeks.

Lost in the “Trump positive test” news cycle was a disappointing September Payrolls report.  While the Unemployment Rate did fall to 7.9% for the month, this happened mostly on a drop in workforce participation (almost 1.1 million people dropped out of the workforce and stopped looking for work) and there were also fewer than expected jobs created in September (660k new jobs versus 800k+ expected). So, combined with the previously reported drop in Personal Expenditures, the economic recovery appears to be weakening significantly and talk of a continuing V-shaped economic recovery is no longer consistent with the data.  However, a weakening economic recovery does not necessarily equate directly to a weakening stock market.

Regarding the stimulus negotiations, White House quarantines, a number of additional positive tests, and staff retesting and isolation protocols (given the incubation periods of the virus) undoubtedly added to the difficulty of negotiations.  However, the main stumbling block Friday continued to be that the two sides are far apart on key issues.  So, while many specific groups (like the airline industry) and the market in general all continue to anticipate more stimulus is imminent, no deal is yet in sight.  However, after the close Friday Senate Majority Leader McConnel said “they were getting closer” and then Saturday the President urged Congress to “GET IT DONE” (as if his negotiators had nothing to do with the process).

On the virus front, in the US, the numbers show we now have 7,637,066 confirmed cases and 214,615 deaths.  The 7-day average daily new case count continues to rise and is now back up to 43,804, while the average of deaths remains 736.  33 states have rising case counts, 26 have increasing hospitalizations, and 12 have increasing death counts due to the virus.  NYC has had to order another shutdown of businesses and schools in the 9 worst-infected zip codes of the city as test positivity has again reached 18% in some areas.   Even worse situations are happening in states across the country, especially the Northern half of the nation, like WI with 24% positive tests, but the South is not spared as MS reached 42% test positivity this weekend (which is noteworthy because their Governor just ended the MS mask mandate).

Globally, the numbers rose to 35,437,479 confirmed cases and the confirmed deaths are now at 1,042,344 deaths.  In France, has raised the alert level to maximum in the region around Paris, ordering the closing of bars again in that area as restrictions will last 15 days.  Elsewhere in Europe, cases are surging even more in the UK, where PM Johnson warned the British people to prepare for a rough winter ahead.  In addition, the British Health Minister prohibited mixing of families in any indoor setting for many cities in the north of the country (including Liverpool).  Both Germany and importantly Italy continue to report the highest new case count since April and Poland reported an all-time record number of cases for the third day in a row on Sunday.

Overnight, Asian markets were green almost across the board, with only two Chinese exchanges flat or down.  Australia (+2.59%), South Korea (+1.29%), and Japan (+1.23%) led the gainers.  In Europe, markets are green across the board so far this morning.  The Big 3 bourses are typical, with the FTSE up 0.83%, DAX up 0.74%, and CAC up 0.88%.  As of 7:30am, US futures are following Europe and pointing to a gap higher of two-thirds of a percent in the large-caps and eight-tenths in the Nasdaq apparently on reports or assumptions the President Trump’s health is improving.

The major economic news for Monday is limited to Sept. Service PMI (9:45 am) and Sept. Mfg. PMI (10 am).  There are no earnings reports scheduled on the day.

We all know that the market hates uncertainty and we already had plenty related to the virus, election, and stimulus.  This has been compounded over the weekend by uncertainty about the President’s health, as well as the White House gave us a steady stream political posturing, mixed messages, and outright lies about his treatment and condition. This was punctuated by him pulling a Sunday evening “drive by photo op” stunt for the nightly news cycle.  All this is to say, volatility continues as uncertainty reigns now. 

Personally, I expect a gap-up and then snap-back reaction this morning as over-reaction has been the norm for markets for some time.  Even with a gap-up, the only thing we can do is to trade the chart and right now that shows resistance above with no bullish trend yet in place.  So, we can either continue to sit on the sidelines or be very careful and quick in this market.  If you do trade, stick to your rules, follow the trend, and don’t chase moves you have missed.  Remember to keep locking-in profits, because it’s the singles and doubles that add up to championships, not the occasional home runs.

Ed

Swing Trade Ideas for your consideration and watchlist: INTC, BA, HD, TOL, NIO, BLNK, LB, URI, BIDU, DDOG, PNR 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

|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.

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

Stimulus, Deal, or No Deal?

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Stimulus

Unable to agree on a stimulus deal, the futures were already pointing to a bearish open.  The news that the President and the First Lady tested positive for COVID-19 added another layer of uncertainty for the path forward.  Will the bull show the strength to defend the 50-day moving averages on the DIA, SPY, and QQQ or will the bear regain control of market direction?  As we slide into the weekend, there seem to be more questions than answers for traders to grapple with, suggesting a volatile day of price action awaits.

Asian markets in a choppy session closed mixed but mostly lower overnight.  European markets are lower across the board, with the DAX down 1% in reaction to the uncertainty ahead.  Ahead of the Employment Situation number, US Futures point to a nasty gap down of more than 300 Dow points.  With the path forward clouded in uncertainty, weigh your risk carefully as head into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have eight companies on the list, but apparently, all of them are unconfirmed.  Consequently, we have no notable reports today.

News & Technicals’

A choppy Thursday market session as we waited to hear deal or no deal on a fifth stimulus package.  Failing to come to an agreement, the House moved forward, passing their 2.2 Trillion plan that has little to chance of getting past the Senate.  According to reports, the two sides will continue to talk, but with congress about to recess, hopes that a deal has diminished.  US Futures slipped into the red during the evening as a result.  Then we heard the news the President and the First Lady tested positive for Covid-19, and futures quickly plunged 500 points.  They have recovered from early morning lows, but the uncertainty about what comes next has the market facing a nasty gap down this morning.

Having recovered their 50-day averages, it will now be a critical test for the bulls to defend the level as support.  A fall back below this crucial psychological level will damage the index chart technicals and could threaten the overall market confidence.  Today we get a reading on the Employment Situation numbers before the bell, so get ready for a volatile morning of price action and carefully consider your risk as we head into an uncertain weekend.

Trade Wisely,

Doug

Trump Positive Test Leads Market News

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Markets saw a significant gap higher at the open Thursday on renewed hopes for a new stimulus deal.  However, we then faded that gap and started a roller-coaster day bouncing between the prior close and that cap-up open.  In the end, this gave us indecisive Doji or Spinning Top candles in all 3 major indices.  On the day, QQQ (led by those huge FAANGM stocks) closed up 1.59%, SPY up 0.64%, and DIA up 0.23%.  VXX was basically flat at 25.01 and the T2122 (4-week New High/Low Ratio) remains in the mid-range at 53.55.  10-year bond yields were also flat at 0.679% and Oil (WTI) fell 4% to $38.58/barrel.

Despite the pre-market optimism Thursday, House Speaker Pelosi and Treasury Sec. Mnuchin were unable to reach a deal on more stimulus.  This as the airline industry laid off 45,000 workers (more than the 32,000 threatened), but said they would rehire them if aa new $25 billion relief program is passed.  In addition, reports surfaced saying the expiration of the $600 Enhanced Unemployment Payments has already begun causing a drag on the economy in terms of reduced personal expenditures.  And more Fed speakers also echoed prior FOMC comments that more stimulus is needed.  While no deal was reached Thursday, the House did pass another $2.2 Trillion stimulus bill, but again Senate Republicans are likely to not even consider the bill (2nd since May). Nonetheless, Speaker Pelosi told reporters that talks would continue today.

The (strangely) bi-partisan House Antitrust Committee completed its seventh and final hearing on antitrust actions by AAPL, AMZN, GOOG, and FB.  A report will now be written and reviewed by committee members for at least several days.  The themes seem to be increased staffing and funding for enforcement agencies, reversing court decisions that have over-ridden Congressional anti-trust intentions, shifting the burden to companies to prove that mergers were not anti-competitive, and prohibiting “anti-discriminatory” behaviors by companies.  No specifics have yet been leaked on potential legislative remedies.

On the virus front, in the US, the numbers show we now have 7,497,256 confirmed cases and 212,694 deaths.  The 7-day average daily new case count is back up to 42,952, while the 7-day average of deaths remains 731.  This includes 30 states with increasing new case counts.  Of course, the big US virus news today is that the President, First Lady, and close Trump Aide Hicks all tested positive and are now in quarantine.  Their health is not an issue since they have the best healthcare possible for treating them.  However, the image is important. In other virus news, AMZN reports that just under 20,000 of their employees have contracted Covid-19 so far (but for reference they have 1.37 million employees.  So, compared to the general public, that 20,000 number is a bit over 40% less than expected.) CNBC also reported that vaccine trial participants (for PFE and MRNA candidates) have reported intense side-effects (fever, head/body aches, and exhaustion), but that those symptoms have only lasted a day on average.  However, this was based on a minuscule sample of only 5 test subjects.

Globally, the numbers rose to 34,529,418 confirmed cases and the confirmed deaths are now at 1,028,517 deaths. (An increase of about 328,000 cases and 8,934 deaths.)  Italy reported the highest increase in new cases since April on Thursday.  However, following the President’s test results, no more international virus headlines were reported.

Overnight, Asian markets were mixed.  Australia (-1.39%), Japan (-0.67%), Thailand (-0.81%) and Indonesia (-0.87%) paced the losers.  Meanwhile, South Korea (+0.86%), Hong Kong (+0.79%), and India (+1.51%) paced gainers.  In Europe, markets are red across the board, perhaps in reaction to the positive tests at the White House.  Among the big 3 bourses, the DAX is down 0.96%, CAC down 0.87%, and FTSE off 0.67%.  These are typical for other European markets although some of the smaller markets like Russia, Sweden and Portugal are down significantly more due to their own outbreaks.   As of 7:30am, US futures are following Europe.  We are looking at implied gap downs of about 1.4% in the large-cap indices and 2% in the tech-heavy Nasdaq.

The major economic news for Friday includes Sept. Nonfarm Payrolls, Sept. Avg. Hourly Earnings, and Sept. Unemployment Rate (all at 8:30 am), Michigan Consumer Sentiment (10 am), and a Fed speaker (Harker at 9 am).  There are no earnings reports scheduled for Friday.

Prior to the President’s diagnosis, the last Jobs Report before the November election was anticipated to drive markets this morning.  Pre-report consensus expects the report to show a slowing, but continuing recovery of the jobs lost since March.  However, now that there has been a Covid-19 positive, the news cycles and market mindshare are likely to be dominated by that and whether the White House adheres to CDC guidelines on the quarantine and post-positive precautions. That said, the market is prone to over-reaction followed by snap-backs, has a short attention span, and historically-speaking no person (including the President) has tended to have long-term impacts on the market.

After Thursday’s “gap and indecision,” we would normally like to see which way the market breaks. Today’s situation makes that less of a chart-based follow-up. So, be cautious, small, and quick in your trading until we get a read on the trend. Stick to your discipline. Don’t try to predict, chase moves that got away, or abandon your trade plans. Follow the trend and keep locking in profits and reducing risk. Also, regardless of theWhite House situation, today is Friday. So consider whether you want to lighten up over the long news cycle. Among the things we don’t know are what will happen on last-ditch stimulus talks (even though the Senate already left town for a long weekend) and how the situation may impact the President’s tweeting. He may have more time for it now, which is just to say it is an unknown and potential for more market-moving “news.”

Ed

There are no trade ideas today. Members can come to the trading room to see what we look at once things settle, but its too volatile to plan trades in front of the initial over reaction and snap back. 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

|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.

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

Stimulus Hopes

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Stimulus Hopes

Stimulus hopes created a big short squeeze rally, but the uncertainty yesterday afternoon made tremendous price volatility as market sentiment swung violently.  Renewed hopes once again have US Futures pointing to a big emotional morning gap, but traders will have to be on guard for more wild price swings driven by political news sensitivity.  Adding to the potential volatility is a big day of economic reports that can potentially move the market substantially.

Asian markets had a rough overnight session with the NIKKEI closed due to an electronic system failure.  European markets are cautiously bullish this morning as they track developments on the US stimulus package.  Ahead of a busy economic calendar, US Futures point to Dow gap up as traders speculate on a stimulus agreement.  It could be a wild ride today so stay focused and flexible.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have another light day with just 9-confirmed reports.  Notable reports include CAG, PEP, STZ & BBBY.

News and Technicals’

Hopes of a new stimulus bill and some end of quarter window dressing fueled a substantial short squeeze yesterday.  Unfortunately, the day ended with tremendous price volatility when the House delayed the vote on the 2.4 trillion dollar plan.  The President has extended an offer for 1.2 trillion, so the standoff continues today.  Airlines are moving forward to Furlow around 38,000 employees today, saying they will reverse the decision if another 20 billion in bailout funds, that’s part of the stimulus plan, is approved.   The Senate passed, and the President signed a spending bill after funding briefly lapsed, avoiding a government shutdown.  Asian markets had a tough night with trading suspended for a full session due to a failure in the Tokyo fully electronic system.  Apparently, the backup system all failed as well. 

With some hope renewed on a stimulus bill, US Futures point to another big gap-up open this morning.  Traders will have to stay on their toes as any news coming out the Washington spin cycle could crate quick price reversals should congress fail.  The big move yesterday improved the technicals of the index charts pushing the DIA and SPY above their 50-day averages and increased the risk due to the substantial political uncertainty.  Facing another big day of economic reports, prepare for anything as this wild rollercoaster ride continues.

Trade Wisely,

Doug

Stimulus Hope, Layoffs and Good Earnings

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After the severe disappointment of the Presidential debate and in the face of a bad GDP number, the bulls stood strong, gapping prices slightly higher on hope for a new stimulus deal.  However, later reports of more failure on that front led to a selloff, only to again bounce as the bulls refused to give up.  At the end of the day the 3 major indices were left with large upper wicks with the SPY having failed another test of the 50sma.  On the day the DIA gained 1.20%, SPY gained 0.83%, and QQQ gained 0.68%.  Given the debate fiasco, that was not too bad at all.  The VXX was flat at 24.86 and T2122 remained in mid-range at 54.74.  10-year bond yields rose to 0.686% and Oil (WTI) rose to $39.90/barrel.  This all closed out a down month for September and brought the quarter to an end.

Prior to the open, both Speaker of the House Pelosi and Treasury Sec. Mnuchin had said they were hopeful for a deal on another round of stimulus.  However, then mid-day Senate Majority Leader McConnell came out to say the two sides were far apart.  At day end Mnuchin said “they had made a lot of progress, but have no agreement” and that they would try again on Thursday.  For their part, House Democrats gave more time for progress, delaying a vote on their latest $2.2 Trillion stimulus bill.  It is notable that once again another trio of FOMC speakers called for more fiscal stimulus to get the economy out of a ditch.  In addition, Dallas Fed President Kaplan said interest rates near zero will be needed for as much as 3 more years until we have weathered this crisis.

After the close, ALL announced they are cutting 3,800 jobs.  JPM also said they will now resume job cuts, after pausing during earlier stimulus rounds, but only announced 400 cuts for now.  In addition, the Fed announced they are extending the limits on big bank dividends and stock buybacks through at least Q4 as new stress tests are kicking off.  UAL and AAL moved ahead with plans cut more than 32,000 jobs as the federal bailout funding ended Wednesday night and no new money has been approved.  Still, in other air industry news the FAA Chief was upbeat after flying in the BA 737 Max during the day, although he said more fixes are needed and gave no timeline for any recertification.

On the virus front, in the US, the numbers show we now have 7,450,637 confirmed cases and 211,778 deaths.  The 7-day average daily new case count is back up to 42,686, while the 7-day average of deaths is now 731.  MRNA said Wednesday that they do not expect to apply for an emergency use authorization for their vaccine candidate prior to the election.  They said the soonest they would have enough safety data would be November 25.  Meanwhile the AZN trial in the US is still on hold with FDA Chief Hahn refusing to say why, noting the reason is confidential.  However, in better news New York City, indoor dining is being allowed to resume at 25% capacity today.

Globally, the numbers rose to 34,201,965 confirmed cases and the confirmed deaths are now at 1,019,580 deaths. (An increase of about 315,000 cases and 6,200 deaths.)  Israel reported a record number of new cases, despite its recently-invoked second lockdown.  Spain announced new restrictions, reducing retail business capacities and outlawing gatherings of more than 6 people.  A large study in India (3 million subjects) has found that super-spreaders are a serious problem with 8% of the infected responsible for 60% of new cases.  The study also found that while children are spreaders, it is primarily among their age group and the much bigger threat of spread comes from people in their late teens and 20s.

Overnight, Asian markets were mostly green on mixed moves.  Australia (+0.98%) and South Korea (+0.86%) led the major markets, while only Shanghai (-0.20%) and Malaysia (-0.53%) showed in the red.  In Europe, we see a very similar story so far today with a lot of green, but uneven moves.  The FTSE (+0.82%) and CAC (+0.84%) are up nicely, but the DAX (+0.29%) has more modest gains.   As of 7:30am, US futures are following Europe and are pointing to significant gaps higher.  The QQQ is leading the way (implied +1.29% open), with both large-cap indices pointing toward a 0.80% gap up. 

The major economic news for Thursday includes August PCE Index, August Personal Spending, and Weekly Jobless Claims (all at 8:30 am), Sept. Mfg. PMI (9:45 am), Sept. ISM Mfg. PMI and Sept. ISM Mfg. Employment (both at 10 am) and another trio of Fed speakers (Harker at 9:30 am, Williams at 11 am), and Bowman at 3 pm).  Major earnings reports on the day include BBBY, CAG, STZ, and PEP before the open.  There are no major reports after the close.

Hope for a stimulus deal and good earnings reports from BBBY and PEP have the bulls charged up again this morning. However, considerable resistance levels remain overhead…and there is no deal in hand yet. So, be careful expecting politicians to do as you want or as they should. Again, we still do not have a bullish trend, but the bearish trend has been broken. All we know for sure is that volatility and a lack of deliberate tradings remains the norm.

As we start a new month and quarter, markets may be trying to turn the page after a down September by getting off to a fast start. Just don’t let market enthusiasm overtake your discipline or rational thought. Don’t try to predict, chase moves that got away, or break your trading rules. Follow the trend and keep locking in profits and reducing risk. Say it with me…singles and doubles are the keys to success not swinging for the fence. Welcome to October.

Ed

Swing Trade Ideas for your Consideration and Watchlist: DHI, SPCE, ETSY, QCOM, AAPL, INTC, LEN. 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

|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.

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

Big Data Deluge

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Big Data Deluge

Heading into a big data deluge for the next 3-days the last thing we need was to hear was 28,000 job losses at Disney, 9000 from Shell that will add to the 10’s of thousands of airline workers that could lose their jobs tomorrow if billions in bail money is not approved in the next 24 hours.  Expect the considerable price volatility and investor uncertainty to remain with us for the rest of the week if not through the election.  As far as the debate goes, all we confirmed is the embarrassing behavior of our leaders.

Asian markets closed mixed but mostly lower overnight, and European markets trade cautiously bearish this morning with modest losses across the board.  US Futures have bounced off overnight lows ahead of economic data and a very light day of earnings reports.  Stay focused as we test resistance in the indexes as downtrends remain intact.

Economic Calendar

Earnings Calendar

On the hump day earnings calendar, we have a light day with just six companies expected to report.  The only notable report is the gold miner NG.

News & Technicals’

As we head into October, the market focus will turn toward job numbers over the next 3-days.  After the bell yesterday, Disney announced a layoff of 28,000 employees. Unless airlines receive billions in bailout money in the next 24 hours, 10’s of thousands of airline employees join the unemployment line.  Adding insult to injury, Shell also announced 9000 job cuts as the oil sector continues to suffer impacts from coronavirus.  US Futures remained bullish during most fo the Presidential debate, but after it ended, they began to sell-off. I’m not sure we learned anything in the argument that the market didn’t already know but rather sold off merely from the embarrassment of it all.  Today before the bell, we will get a jobs reading from the ADP, a GDP report that’s likely to remain to be quite ugly, PMI, Pending Home Sales, and the Petroleum Status numbers.  That said, expect more volatility and uncertainty heading into the close with another busy economic calander of market-moving reports on Thursday.

Yesterday’s price action seemed to reflect the uncertainty of the debate and the data deluge ahead, chopping in a rage with equally matched bulls and bears.  The DIA, SPY, and IWM remain in downtrends while the QQQ tries to lead the market higher, holding on to its 50-day average by the close.  However, with so much data coming our way, anything is possible, so stay focused and flexible.

Trade Wisely,

Doug