Stimulus, what the market wants the most, continues to languish deadlocked and mired in political gamesmanship. Toss in the kickoff of 4th quarter earnings season, a supreme court hearing, and the uncertainty of the coming elections, and we have the makings for extreme price volatility. Stimulus hopes pushed the indexes into a hyper-extended condition yesterday, so there will be a significant amount of pressure for companies to perform at these levels. Stay focused as anything is possible.
Asian markets struggled overnight but finally managed modest gains after reporting rising exports. European markets are lackluster this morning, currently showing modest losses across the board. US Futures have rallied off overnight lows as earnings roll-out, indicating a possible gap down in the Dow while the NASDAQ points higher lead by APPL and the new iPhone anticipation. Keep an eye on the latest reading on the GDP this morning that consensus suggests will decline.
Economic Calendar
Earnings Calendar
Today begins the kickoff of the 4th quarter earnings season with 14 companies reporting. Notable reports include JPM, JNJ, BLK, C, DAL, FAST, EDU, & WIT.
News and Technicals’
The bulls continued to the rally yesterday even with what they want is still mired in politics with no apparent progress. The President is back on the campaign trail after testing negative for the virus and no longer contagious. He has a lot of catching up to do having been ill with Biden leading significantly in the polls. Senators will begin questioning the new supreme court nominee in a marathon session that will take up the entire day. What that means for the progress of a stimulus bill before the election remains uncertain. Today, Apple CEO Tim Cook will put on his best song and dance act as he unveils the iPhone’s next iteration. There has been a discussion of a significant redesign and the introduction of 5G devices that they hope will trigger a substantial wave of upgrades by the end of the year. Another major distraction will be the Amazon Price sales event that begins on Wednesday.
With JPM firs out of the gate with their earnings this morning, the Futures currently point toa gap down open. However, with several more potential market-moving reports this morning and the latest reading on the GDP before the market opens, anything is possible. Technically speaking, index charts are in a hyper-extended condition, so today’s events will be very critical to inspire the bulls to defend this massive anticipatory rally. Expect price volitility to remain high with an extreme sensitivity to political news surrounding stimulus negotiations. Buckle up for another wild earnings season with a presidential election tossed in for good measure.
On Monday, markets gapped up three-quarters of a percent and then continue to rally most of the day for no particular reason. Then we saw a half-percent selloff the last 90 minutes of the day, again with no news explanation. That said, profit-taking makes sense after such a run of gap-ups and white candles. On the day, QQQ was up a gaudy 3.09%, its best day since April with AAPL and AMZN leading the charge in front of their big events on Tuesday. However, the large-caps were also quite positive with the SPY up 1.58% and the DIA up 0.86%. VXX dropped to 21.85 and the T2122 remains deep in the overbought territory at 97.55 (but notice it did pull back just a bit). Bond markets were closed, but Oil (WTI) fell almost 3% again to $39.52/barrel.
While I said there was no particular explanation for Monday’s market move, it is possible “hope for more stimulus” was the cause. However, there were no headlines on the negotiations, the last word from both sides was an impasse, and the political focus has moved to the confirmation of ACB. However, after-hours Bloomberg reported that their analysts are again seeing patterns in the CBOE NDX Volatility index as they saw during the summer. Specifically, they claim to again see signs of day-trading options traders from the new, stay-at-home economy (read Robinhood traders) pushing moves in both directions during the day. This new group of traders is driving marginal demand for contracts (particularly in the big-name FAANGM tickers) that, in turn, leads to increased volatility and outsized moves as they pile in and out both during premarket and during the day.
After the close, DIS announced they are reorganizing their various divisions to make their primary focus the video streaming business. Technology research company Gartner also announced that the US personal computer industry had the best in 10 years on Q3. PC shipments were up almost 11.5% for Q3 and they are expecting blow-out quarterly reports by HP, DELL, AAPL, MSFT along with various foreign PC makers. However, overnight JNJ halted Phase 3 vaccine testing due to an unexplained illness.
On the virus front, in the US we have now gone over 8 million cases, with the numbers showing we now have 8,038,037 confirmed cases and 220,018 deaths. The 7-day average daily new case count rose again to 50,612/day. Dr. Fauci (NIH) told reporters that “the US is on a trajectory of getting worse” with 31 states are trending upward in daily cases compared to one week ago. (Not good as we are just now entering Winter and flu season.) One example of the problem is the small population state of ND, which has less than 20 ICU beds available for the entire state, recorded nearly 500 new cases on Monday, and is already shipping patients to other nearby states. The main model used by the White House Task Force (Univ. of Washington) is predicting 180,000 more deaths in the US by the end of January unless major improvements in mask usage and social distancing are implemented.
Globally, the numbers rose to 38,097,303 confirmed cases and the confirmed deaths are now at 1,086,400 deaths. This comes as the world is adding 1 million new cases every 3 days. In the UK, PM Johnson is under fire from all sides for continuing with his “half a loaf” approach. He increased restrictions Monday, but did not institute a second two-week national lockdown that the scientific advisory committee has been urging for 3 weeks. In the meantime, the daily case count in the UK is 3 times that of their worst pre-summer lockdown week. France also continues to have major issues as their national testing positivity rate reached 12.8% Monday. Spain, Italy and Germany also all continue to struggle with new measures as their second wave surges continue.
Overnight, Asian markets started strong (following the US), but fizzled. However, they did close modestly positive. Australia led the gainers up 1.04%, but most of the Asian exchanges ended flat to modestly green such as Shanghai +0.04%, Japan +0.18%, South Korea -0.02%, and Hong Kong was closed due to a typhoon. In Europe we see a mixed, but much redder scoreboard so far today. All 3 of the major bourses are negative, with FTSE down 0.41%, DAX down 0.42%, and CAC down 0.33% as of mid-day. As of 7:30am, US futures are mixed with the QQQ implying a gap up of 0.96%, but the large-caps are both projecting a red open with the DIA down 0.38% and SPY down 0.08%.
The major economic news for Tuesday is limited to Sept. Core CPI (8:30 am) and Sept. Fed Budget Balance (2 pm). and no earnings reports scheduled for Monday. However, earnings season kicks off again with BLK, C, SAL, FAST, FRC, JNJ, JPM, and WIT all reporting before the open. Other major events include the AAPL iPhone product refresh and AMZN Prime Day.
Both earnings season, as well as AMZN Prime days (and competitor sales), kick-off in an attempt to jumpstart Xmas sales early, AAPL is holding its iPhone launch event today. Those are likely to be the drivers today, although the JNJ Trial stoppage will also likely have an impact. However, there is always room for political or stimulus news causing volatility in this triple-silly season.
So, with the pandemic, political, and earnings risk hanging overhead, be careful, nimble, and potentially light in your trades. Lock-in profits whenever you can and maintain your discipline. Stick to your rules, follow the trend, and don’t chase moves you have missed. Our job as traders is to reduce risk and create consistent gains, not knock the cover off the ball every time we swing.
Ed
Swing Trade Ideas for your consideration and watchlist: CSX, FITB, MCD, DVAX, F, TLRY, ET. 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
With bond markets closed, no earnings or economic events, the start fo the supreme court hearings, and Stimulus talks at an impasse, futures point to a flat open. That’s something we’ve not seen in quite a long time. The bulls remain in control, but that control depends heavily on the hopes of the stimulus deal. The President raised his offer to 1.8 Trillion, and now both sides of the aisle are unhappy with the proposal. Traders should prepare for significant news-driven volatility amidst a week of substantial distractions.
Asian markets closed the day mixed with the HIS leaping higher by 2.2%. European markets hold modest gains across the board this morning while U.S. Futures remain flat and choppy with the bond markets closed for Columbus Day.
Economic Calendar
Earnings Calendar
We have no confirmed earnings reports on this Columbus day Monday.
News & Technicals’
The President has upped his offer for Stimulus to 1.8 Trillion and now has opposition on both sides of the aisle. The D’s say it’s not enough, and the R’s are upset because the cost is much higher than they are willing to pass. With the beginning of the Amy Coney Barrett’s supreme court confirmation hearings, I suspect the distraction will take the focus off getting a stimulus bill completed. Although the markets are open today, the bond markets are closed today due to Columbus Day’s banking holiday. We will have a few more distractions this week with the Tuesday launch event of this year’s iPhone lineup. A Morgan Stanley analyst wrote this fall’s launch would be the most significant iPhone event in years. We will also have a massive focus on online shopping events with Amazon’s Prime 2-day sales event may other online competitors tagging along with sales events of their own.
Last week was all about the bulls pushing the markets up in hopes of more Stimulus. That created tremendous price volatility as the Congress and the President waged a political battle making headlines that would swing market emotions violently. Unfortunately, with no progress over the weekend and Speaker Pelosi quoted saying that talks “remain at an Impasse,” we should plan for the market emotion to continue spilling out with the news cycle out of D.C. With banks closed today, and the beginning of the supreme court hearings, it would not be a surprise to see a day of algo-driven choppiness. Futures suggest a flat open with nothing on the earnings or economic calendar to inspire the bulls or the bears; we could have the quietest market open in weeks.
Markets gapped up Friday on more hope for stimulus. After that the large-caps ground sideways in a slight downtrend. This left them in indecisive candles. However, the QQQ continued an uptrend and closed near its highs. For the day, QQQ was up 1.53%, SPY up 0.89%, and DIA up 0.58%. The VXX fell over 5% to 22.29 and T2122 remains deep in the overbought territory at 98.89. 10-year bond yields were essentially flat at 0.779% and Oil (WTI) fell 1.63% to $40.52/barrel.
On the stimulus front, over the weekend the White House raised their offer and Chief Economic Advisor Kudlow said they may go well above the Democrat-proposed $2.2 trillion. The White House also sent another letter to Congress pleading to separate another portion of the package (PPP loans/grants this time) as a stand-alone bill. Still, House Speaker Pelosi seems to be holding her ground that no piece-meal one-off bills will be passed and any bill must be part of a larger agreement. So, both of the main negotiators say the sides remain at an impasse. Worse yet, Republican Senators have also attacked the White House’s attempt to reach a deal by raising the offer, and now say there is virtually no chance of passing any deal before the election. However, market optimism for a deal soon remains alive as negotiations continue.
The Chinese Central Bank made it easier to short the yuan over the weekend. Sunday night the Chinese currency traded down 0.6% (a significant move for forex). Of course, a weaker yuan makes non-Chinese products and commodities more expensive in China and also makes Chinese products and commodities cheaper throughout the rest of the world. In addition, the Chinese government announced a market-based reform that will give local authorities more power to regulate local businesses. These moves could be related to US-China trade relations, but were definitely seen as positives by the Asian markets.
On the virus front, in the US, the numbers show we now have 7,992,810 confirmed cases and 219,702 deaths. After 56,652000 cases Thursday, the 7-day average daily new case count rose again to just over 50,000/day, while the lagging average of deaths remains flat at 725/day. 31 states are trending upward in daily cases, with only 3 states trending downward compared to one week ago. At the same time, the US government has struck a $486 billion deal with AZN for 100,000 doses of an antibody cocktail treatment similar to the one President Trump received. Delivery should begin by the end of 2020 with the US having the option to buy up to another 1 million doses by the end of 2021.
Globally, the numbers rose to 37,795,463 confirmed cases and the confirmed deaths are now at 1,081,934 deaths. This comes as the world is adding 1 million new cases every 3 days. In Europe, things are getting bleak again. Germany confirmed the most daily virus-related deaths since May on Saturday. Meanwhile, Russia, the Czech Republic and Hungary all reported records for new cases on both Saturday and Sunday. Italy’s new cases climbed for a sixth straight day, reaching the highest daily level since March. In the UK, on Sunday a government Minister announced new restrictions, and one of the chief scientific advisors told the BBC a second national lockdown was quite possible unless they can curb the sharp rise in cases and hospitalizations.
Overnight, Asian markets were mostly higher, with outsized gains in China. Shenzhen (+3.31%) led that way, followed by Shanghai (+2.64%), and Hong Kong (+2.20%). The only appreciable loser on the day was Malaysia (-0.78%). In Europe, markets are also mostly higher Monday. The FTSE (-0.08%) is flat while the DAX (+0.28%), and CAC (+0.52%) are positive. As of midday the only significant loss is in Greece (-1.54%). As of 7:30am, US futures are implying a mixed open with the Dow flat (+0.01%), S&P500 up (+0.45%), and the Nasdaq gapping (+1.37%).
There are no major economic news and no earnings reports scheduled for Monday.
With earnings season (as well as AMZN Prime days and the AAPL iPhone launch event) not starting until Tuesday and no economic news scheduled for today, Monday may be a “wait and see” day for the markets. However, there is always room for political or stimulus news causing volatility. This is especially true given the market’s love for more stimulus and apparent willingness to assume it will come sooner or later, and if later then bigger. Also, don’t forget today is a federal holiday, and bond markets are closed.
So, with the political, economic, and earnings risk hanging overhead, be careful, nimble, and potentially light in your trades. Lock-in profits whenever you can and maintain your discipline. Stick to your rules, follow the trend, and don’t chase moves you have missed. Welcome back and I hope it was a great weekend.
Ed
Swing Trade Ideas for your consideration and watchlist: DOMO, WKHS, AAPL, FVRR, INTC, KO, GNUS. 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
***Notice due to a Windows Update I’m currently unable to record the Morning Prep Video. I will work on the problem but if I can get it fixed the video will be late. Sorry for the inconvenience.
Speculation that elected officials will eventually get their act together and agree on a stimulus package continues to elevate the indexes pointing to another gap up open. Pelosi and Munchin continue to talk, but it’s unclear if the President will reverse his thinking and support a big package deal. One thing for sure is that this creates a dangerously volatile market condition that’s more akin to gambling as traders bet on the possible outcome. Consider your risk carefully as we head into a weekend with incredible uncertainty as to what happens next.
Asian markets wrapped up their week with mixed but mostly lower results by the close. European markets are also cautiously mixed as they monitor US stimulus efforts. However, US Futures point to another gap up open as hope of a deal continues to inspire bullish speculation despite the dangerous consequences of news-driven extreme volatility.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have no confirmed reports; thus, there are no notable reports.
News and Technicals’
Markets held up yesterday after Speaker Pelosi made it clear there will be no stimulus bull that does not include a broader response, including aid for cities and states. However, Munchin and Pelosi spoke on Thursday to resume negotiations, but at this time, it’s unclear if the White House will accept a broader proposal. With the upcoming Supreme Court appointment hearings, there is little time to hammer out a deal before the election. Still, the market itself is holding on to hope, and lifting the indexes higher speculation an agreement is forthcoming, setting the stage for incredible volatility and sensitivity to the Washington spin cycle. Betting a deal will come together could prove profitable but could prove very painful should they fail, and traders wake up to gap down overnight reversal. Consider your risk carefully heading into the uncertainty of the weekend.
Technically speaking, the index charts are bullish as they work to break recent price resistance levels. That said, volatility remains very high, making the path forward quite dangerous as we wait on politicians to get their act together. A big ask this close to a presidential election. Anything it possible, and trading in this environment is more than gambling. If you do trade, measure the risks carefully, avoid overtrading, and be willing to pivot on a moment’s notice.
Markets gapped a half percent higher at the open on Thursday on continued hope for stimulus, despite a worse than expected Weekly Jobless Claims number. However, they then proceeded to grind sideways in a tight range for the rest of the day. The DIA and QQQ both printed indecisive black-bodied Hanging Man type candles, while the SPY printed a white-bodies version closing near the highs. On the day SPY was up 0.89%, QQQ up 0.53%, and the DIA up 0.48%. The VXX fell 4% to 23.51 and T2122 rose very high into the overbought territory at 98.87. 10-year bond yields fell slightly to 0.779% and Oil (WTI) gained 3.3% to $41.27/barrel.
During the day, there were news stories around whether or not a 2nd Presidential debate will happen and House Speaker Pelosi saying there will be no airline industry bailout without the broader stimulus bill (calling the President’s bluff from Tuesday on no further stimulus negotiations). After that, President Trump told reporters that despite his order to stop 2 days ago, negotiations are on-going and have now become productive. The market largely shrugged off all 3 stories without blinking. Finally, after hours, it was reported that the President does want a broader stimulus deal and despite his (and White House staff’s conflicting statements…even during time of the most recent negotiation call) Treasury Sec. Mnuchin is negotiating on behalf of the President.
The US Census Bureau reports that nearly 60 million US households expect a member of their family to lose their job or take a pay cut in the next 4 weeks. They went on to report that 23% of Americans are finding it “somewhat” or “very” difficult to cover typical household expenses. However, at the same time, MS released a report saying that US households have saved an extra $1.1 trillion in “savings buffer” so far this year (as compared to pre-covid household savings). I take this to mean the high-end of the income scale has socked away considerably more than usual while the low-end of the scale are barely getting by.
On the virus front, in the US, the numbers show we now have 7,834,289 confirmed cases and 217,750 deaths. After 56,652 cases Thursday, the 7-day average daily new case count rose again to just under 47,000, while the lagging average of deaths rose only slightly to 725 after another 957 died. On Thursday, TX reported a 4-week high in hospitalizations and WI began building field hospitals to offset its own surge in hospitalizations. NY and NJ also both saw the largest number of new cases since mid-May. Meanwhile, several other (mainly Northern) states also saw a record number of new cases. However, in relatively good news, HHS Sec. Azar said that IF the vaccines in phase 3 now are approved and IF production goes as planned by the companies involved, then the US may have enough vaccine doses for the whole country by the end of March.
Globally, the numbers rose to 36,802,540 confirmed cases and the confirmed deaths are now at 1,067,551 deaths. This comes after almost 350,000 new cases and almost 6,500 new deaths were recorded globally on Thursday. In Europe, France logged another record high on the 7-day average of new cases and expanded restrictions in response as did Russia. Italy saw the largest number of new cases in a day since early April. In addition, Spain’s President ordered for a 15-day state of emergency in the capitol Madrid, but a judge later blocked his order leaving confusion. Meanwhile the UK reported that their economy expanded 2.1% in August (but that growth was less than a third of July’s growth).
Overnight, Asian markets were mixed, with China (back from a holiday) catching up with a 3% gain in Shenzhen and a 1.68% gain in Shanghai. However, Japan, South Korea, and Hong Kong were flat to red. The remaining Asian exchanges were mixed on modest moves. exchanges. In Europe, markets are also mixed. The FTSE (+0.42%) and CAC (+0.31%) are positive while the DAX (-0.10%) is flat to down. This is typical with outliers like Portugal (-1%) and Finland (+0.71%) at this point in the day. As of 7:30am, US futures are pointing toward another modest gap higher. The DIA and SPY are implying a 0.47% gap up, while the QQQ is implying a 0.32% gap higher.
There is no major economic news and no earnings reports scheduled for Friday.
After a grinding, sideways day Thursday, it seems like the bulls were waiting on follow-up news on stimulus after the gap. With turmoil in the White House position and the 2 sides of the negotiation still not giving way or making nice (Pelosi and Trump both questioned the other’s mental faculties Thursday), that may not be in the cards. That said, there are a lot of politicians on both sides of the aisle and branch of government that are up for election. You can bet most of them would like to deliver another package this month, regardless of whether any stimulus/relief reaches anyone before the election.
And while this goes on, remember there is no other scheduled news today or Monday (Federal holiday) with Earnings season kicking off on Tuesday. So, with the political, economic, and earnings risk hanging overhead, be careful about the risk you want to carry into the weekend. It’s payday, so don’t forget to take some money off the table and lock-in profits where you can. If you are trading, be light, quick and disciplined. Stick to your rules, follow the trend, and don’t chase moves you have missed. Have a great day and weekend.
Ed
Swing Trade Ideas for your consideration and watchlist: No trade ideas for Friday. 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
Stimulus hopes once again fueled the bulls to surge right back into price resistance levels after the President stated he would support $1200 direct payments to taxpayers and another 25 billion for airlines. However, it’s unclear at this time if Congress can come to an agreement before the election. Should they fail, it could quickly produce another whipsaw down, so plan your risk carefully because price support levels are now quite a long way away.
Asian markets closed mixed but mostly lower overnight. However, European markets show some relief trading green across the board as they monitor US stimulus hopes. Ahead of the latest reading on Jobless Claims, US Futures look to extend yesterday’s significant reversal pointing to another gap up open with $1200 stimulus checks hopes dangling before them.
Economic Calendar
Earnings Calendar
We have our biggest day of earnings this week, but still, only 9 confirmed quarterly reports. Notable reports include AYI, CCL, DPZ, & HELE.
News & Technicals’
With the hopefulness of more stimulus, the market surged back into price resistance, pushing the T2122 indicator back into a possible overbought condition. The President stated he is willing to sign a stand-alone bill that would send $1200 check to taxpayers and will support a 25 billion package for airlines. As of now, it’s unclear if or when Congress will proceed with the requested spending bills, but the anticipation has the bulls running. Regeneron has asked for emergency approval for the coronavirus treatment taken by the President. In a statement, the President said he intends to make the virus vaccine free to US Citizens and, in the same breath, blamed China for the pandemic.
Closing at or near price resistance levels yesterday, the US Futures look to extend that rally this morning, pointing to yet another gap up open. Yesterday’s rally significantly improved the technical picture in the index charts with the SPY and QQQ recovering their 50-averages as support. That said, the huge reversal also adds significant risk for those chasing the rally with price support so far away. The market has proven its sensitivity to the news report on the subject of the stimulus. Stay focused, and remember we are only one tweet or one news story away from another possible whipsaw back down. Plan your risk carefully! The stimulus is not a done deal and there is concern that Congress may not agree before the election. The market will be focused on the Jobless numbers calendar this morning and could change how the market opens this Thursday so, prepare for more volatility.
Markets gapped up Wednesday on hope that President Trump’s flip to tweeting for “one piece at a time” of the stimulus he wants would result in another relief package happening. Stocks then ground sideways until the early afternoon. At that point, the bulls stepped in to lead an afternoon rally. Most of Tuesday’s post-tweet losses were regained by the close Wednesday. On the day, DIA was up 1.84%, SPY up 1.74%, and QQQ up 1.73%. The VXX was down 3% to 24.50 and T2122 climbed further into overbought territory to 91.51. 10-year bond yields rose again to 0.783%, but Oil (WTI) fell about 2% to $39.98/barrel.
In stock news, IBM is surging in premarket after it announced plans to spin off an IPO of its Managed Infrastructure unit. Following the Presidential treatment / endorsement, REGN has asked the FDA for emergency use authorization of the cocktail given to President Trump. REGN shares were also up in premarket. Optimism also continues over stimulus, despite the President’s unilateral stoppage of negotiations, as markets seem to think pieces will get done soon as long as the President gets his way.
For a change of pace, the Vice-Presidential debate is leading all non-stock news (instead of the pandemic). While both sides spin the talking points and claim victory in the event, it seems the biggest take-away for markets may be a calming effect of seeing much more adult behavior. There were still clashes, but both debaters were allowed to finish a sentence without being talked over and badgered while speaking. This is likely reassuring to investors.
On the virus front, in the US, the numbers show we now have 7,776,796 confirmed cases and 216,788 deaths. After almost 49,000 cases Wednesday, the 7-day average daily new case count rose again and is now back up to 45,565, while the lagging average of deaths remains relatively flat now at 721 after another 932 deaths.
Globally, the numbers rose to 36,439,437 confirmed cases and the confirmed deaths are now at 1,061,239 deaths. In the UK, Scotland has ordered all bars closed as of Friday for at least 16 days. At the same time, the UK released a study saying that the mass hospitalizations and deaths are only coming from 14% of patients, because 86% of cases are asymptomatic (which of course makes it harder to stop the spread). This comes as the Czech Republic reports the highest new case count since the start of the pandemic and Central Europe has surpassed Southern Europe (Spain, Italy, and France) as the epicenter in Europe. In North American, Canada has reached a new high in its weekly average of new cases, with 80% of the cases coming from Ontario and Quebec.
Overnight, Asian markets were mostly higher on modest gains with Japan (+0.96%) leading the gainers among the major exchanges. In Europe, so far today we see green across the board, again on modest gains. Among the major European Bourses, the FTSE is at +0.45%, the DAX at +0.65%, and the CAC at +0.50% as of mid-day. As of 7:30am, US futures following Europe and pointing to roughly half percent gap higher at the open. The DIA is implying a 0.49% gain, SPY a 0.44% gain, and QQQ a 0.58% gain at the open.
The major economic news for Thursday is limited to Initial Jobless Claims (8:30 am) and a Fed speaker (Kaplan at 6 pm). Major earnings reports on the day are limited to AYI and DPZ before the open.
The bulls put in an impressive day Wednesday on the rebound from the Tuesday late-day tweet drubbing. We are close to being back where we were just prior to that tweet on what had looked like a positive Tuesday. If the gap higher stays in place for the next couple hours, that move will put markets at (or even just above) the closest resistance level, giving the bulls that chance to deliver a higher-high to make a bullish trend.
Volatility still reigns. The market is simply assuming stimulus without a truly clear path to it taking place. So, continue to be careful. However, if you can be light, nimble, and short-term, this could be a tradable move. In any case, stick to those rules and don’t chase moves you have missed. Lock-in those profits every chance you get. Remember that a trader’s job is to consistently take gains and reduce risk, not win bragging-rights.
Ed
Swing Trade Ideas for your consideration and watchlist: KNDI, BIDU, TXMD, GNUS, LB, OKE, ABUS, AAPL, SRNE. 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
It’s off, no, it’s back on! Yesterday’s nasty whipsaw demonstrated just how sensitive, emotionally charged, and dangerous the Presidential election’s path forward has become. I want to say I believe the worst is behind us, but I don’t think that’s right, and traders could be caught in the crossfire. With so much wild volatility, it is nearly impossible for swing traders to maintain an edge, and sadly that may be the case through the election. The path forward is clouded in uncertainty, so plan your risk carefully or choose to stand aside until the clouds lift.
Asian markets closed mixed but mostly lower overnight in reaction to US Stimulus news. European markets trade in the red across the board this morning as stimulus fears weigh on the investors. Ahead of a big day of Fed speak, and the FOMC minutes, US Futures once again point to a significant gap in hopes that at some stimulus may still be on the horizon.
Economic Calendar
Earnings Calendar
On the Wednesday earnings calendar, we have just seven verified quarterly reports. Notable reports include LW, RPM, & SAR.
News & Technicals’
Yesterday I titled the blog “Silly Season” but had no idea just how correct that sentiment would become. As I’m sure you all know, the President pulled out of stimulus negations suggesting the other side was not working in good faith. However, this morning, the President asks Congress to move forward on a bailout deal for airlines and direct $1200 payments to the citizens removing money for what he calls mismanaged states. Nonetheless, the action created a nasty whipsaw yesterday with the market having already priced in a stimulus deal. I wish I could be confident the market turmoil and uncertainty is over. Sadly, I think there is a genuine possibility the political uncertainty and market sensitivity to the news cycle will continue through the election. After the bell yesterday, House Democrats accused Facebook, Amazon, Apple & Alphabet of having monopoly power, recommending significant changes and challenges could be on the way for the tech giants. With these companies holding huge index weight, market growth may become problematic if the political pressure grows.
As a result of yesterday’s whipsaw, the SPY and QQQ closed back below their 50-day moving averages. However, with the hope of some stimulus still on the horizon, US Futures are poised for a bullish open that could recover these critical psychological levels today. That said, be prepaid for move wild price volatility ahead. We still have price resistance above in the index charts to deal with and a path forward fraught with high volatility danger as the political silly season come into full bloom.
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.
🎯 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
