As coronavirus numbers surge, wild-eyed speculation of stimulus continues to drive indexes toward record territory. With Speaker Pelosi issuing a 48-hour deadline to get a deal passed before the election, expect extreme price sensitivity on the stimulus news cycle. Substantial whipsaws and full intraday reversals are possible as both sides of the aisle battle for position through the news. There is a lot at stake as we push company valuations to perfection and beyond, even as our economy faces rising joblessness and new business impacts due to the rising infection rates.
Asian markets surged during the night as China reports their economy grew by 4.9%. European markets are flat cautiously monitoring US Stimulus talks and Brexit uncertainty. US Futures point to a Dow gap of nearly 200 points ahead of earnings, Jerome Powell comments, and the latest reading on the Housing Market Index. Buckle up for another week of challenging price volatility.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have 20 verified reports as the 4th quarter earnings volatility begins to ramp up. Notable reports include ADC, FNB, HAL, IBM, LLI, PPG, STLD, & ZION.
News & Technicals’
Speaker Pelosi drew a line in the sand this weekend, giving the White House just 48 hours to reach an agreement on a stimulus package so that it can be passed before the election. Reports suggest the Pelosi and Munchin will continue negotiations today, but it’s still unclear if the Senate has the willingness to give the deficit spending bill nearing a 2 trillion dollars. China released numbers saying its economy grew 4.9% in the third quarter lifting Asian markets overnight. Unfortunately, as coronavirus infections accelerate, new restrictions and lockdown measures increase the economic uncertainty looking forward. Worldwide cases of the virus topped 40 million, with more than 90K new cases reported in the US over the weekend. The IMF downgraded the outlook for the Middle East and Central Asian economic recovery, with oil prices expected to suffer next year due to virus-driven demand impacts.
That said, US Futures are surging this morning as hopefulness of a stimulus deal outweighs virus concerns. The T2122 is once again suggesting that we are in an extremely overbought condition as wild-eyed speculation pushes the indexes toward record territory. As we gap up once again in anticipation, remember to watch for the possibility of a pop and drop pattern. Traders will have to stay on their toes as news sensitivity around stimulus could be extreme should negotiations fail. With the VIX continuing to hold above 25 handles, anything is possible, so plan your risk carefully.
Markets gapped higher at the open and ran higher the first hour Friday on better than expected Sept. Retail Sales. However, a mid-morning selloff led to a sideways grind that lasted until 3pm, when the floor fell out from underneath the indices. That late-day selling left all 3 major indices with higher wicks and ugly black candles (although the DIA managed to remain a Gravestone Doji). On the day, SPY ended down 0.06%, QQQ down 0.55%, and DIA up 0.33%. The VXX was flat at 22.27 and T2122 remains just inside the overbought territory at 81.48. 10-year bond yields rose to 0.749% and Oil (WTI) fell slightly to $40.78/barrel.
On the stimulus front, on Friday House Speaker Pelosi told other Democratic leaders that the 2 sides remain far apart on several issues. These are funding for state/local governments, tax breaks for working families, child care funding, and the liability waiver that Republicans want for businesses. Meanwhile, Senate Majority Leader McConnell insists the two sides are negotiating at 4 times the level the Senate GOP will accept and on Saturday said he’s proceeding with votes on a $500 billion PPP Small Business loan/grant bill on Tuesday and Wednesday. In response, on Sunday, Speaker Pelosi set a Tuesday deadline for a deal prior to the election.
On Sunday AAL said they intend to return to the use of the BA 737 Max in December. Then, early Monday, COP said it will acquire driller CXO for $9.7 billion. In economic news, China also announced that its economy grew 4.9% in Q3, which brings YTD growth up to +0.7% versus 2019. However, in the Middle East, the IMF is forecasting a 4.1% economic contraction and oil prices to remain in the $40-$50/barrel range through 2021
On the virus front, in the US we have now gone over 8 million cases, with the numbers showing we now have 8,388,013 confirmed cases and 224,732 deaths. The 7-day average daily new case count rose again to 56,322/day, while the lagging average of deaths remains relatively flat at 718/day. 21 states reported a record number of new cases at least once in the last week. At the moment, 38 states are reporting new case numbers growing by more than 5% with only 2 states trending down and the country as a whole has seen a 16% increase in cases in the last week.
Globally, the numbers rose to 40,348,289 confirmed cases and the confirmed deaths are now at 1,119,305 deaths. Europe has overtaken the US to become the area with the highest average daily new case count (to be fair, Europe including Russia does have nearly 2.5 times the US population). This comes as the WHO is warning that many major cities across Europe may reach ICU bed capacity in the next couple of weeks based on the current new case and hospitalization rates. On cue, Poland began converting a soccer stadium into a field hospital, Italy announced new restrictions and the UK is in negotiations to lockdown its Northern city of Manchester.
Overnight, Asian markets were mixed, but overall, modestly higher. Taiwan (+1.24%) and Japan (+1.11%) led the gainers, while Thailand (-2.02% on political unrest) and China (-0.70%) led the losers. In Europe, markets are also mixed by generally higher so far today. Among the big 3 bourses, the FTSE is down (-0.22%), the DAX flat (-0.03%), and the CAC up (+0.32%). The other European bourses show a modest move in either direction, but lean to the green side. As of 7:30am, US futures are pointing to a gap higher at the open. The DIA implying +0.70%, the SPY suggesting +0.83%, and the QQQ indicating +1.00% at this point.
The major economic news for Monday is limited to Sept. Federal Budget Balance and 3 Fed speakers (Chair Powell at 8 am, Clarida at 11:45 am, and Harker at 3 pm. Major Earnings Reports include HAL before the open and CCK, IBM, LOGI, PPG, STLD, and ZION after the close.
The surging virus, lack of a stimulus deal, and earnings reports are likely to remain the big drivers of the market Monday. However, any potential news on the political front remains an overhang for at least another couple of weeks. And of course, the M&A world seems to still be in vogue as we head into the stretch run of the year. The one thing that is sure is that posturing is sure to add to volatility. So, continue to be careful in this market.
Lock-in your profits whenever you can and stick to your rules. Don’t get too greedy, chase the moves you have missed, and don’t predict. Be sure you respect potential support and resistance. Follow the trend and stick wiht your trade plans. Friday’s candles were ugly, but the market seems to want to shrug that off this morning.
Ed
Swing Trade Ideas for your consideration and watchlist: GLW, URI, HAS, NIO, CGC, GPS, MCRB, SPCE. 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
Gap it down, whip it hard, chopping up traders accounts in the process as politicians continue to kick around the stimulus football. Almost lost in the background noise of this political silliness, joblessness is rising, and new virus infections top 60k in a single day. Toss in earnings season, and we have the perfect climate for continued wild price volatility as an emotional market awaits the next news report to fuel the next whipsaw.
Asian markets closed mixed but mostly higher amid rising virus fears. European markets are currently rebounding from early losses now green across the board. Recovering from overnight lows, the US Futures point to modest opening gains ahead of earnings and economic reports that include Retail Sales numbers. What comes next is anyone’s guess.
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have 20 companies reporting quarterly results. Notable reports include ALLY, BK, CFG, JBHT, KSU, SLB, STT, & VFC.
News & Technicals’
Stimulus uncertainty and rising infection concerns brought out the bears Thursday morning, punishing those holding long positions. With news reports, the President was willing to increase his 1.8 Trillion offer spurred a rally to punish any short traders. This morning, we hear that even though the White House is ready to support a bigger package, the Senate may not be willing to pass such a massive spending package. Can we get off this political merry-go-round? Please! While stimulus wrangling continues to whip the market around jobless claims, increased substantially, and new coronavirus infections topped 60,000 yesterday. Stimulus or not, the economic damage to the economy is real and makes me wonder how much longer we can ignore its impacts.
Though the rally back yesterday was substantial, it will only look like a knee jerk reaction unless the price action can follow-though breaking the short term downtrends and recovering lost price supports. Continue to expect extreme market sensitivity to the Washington spin cycle and the growing headwinds of rising infection rates heading into this weekend.
Markets gapped down 1.25% on Thursday on decreased expectations for stimulus and a much higher than expected Initial Jobless Claims. However, the bulls spent most of the day working their way back toward the Wednesday close before taking a step back in the final 15 minutes. On the day, the large-caps both ended flat and the NASDAQ closed down, but all 3 remain in a Bull Flag type pattern. At the close, QQQ was down 0.67%, SPY down 0.11%, and DIA down 0.03%. The VXX was up only slightly to 22.10 and T2122 climbed back into overbought territory at 86.39. 10-year bond yields rose to 0.734% and Oil (WTI) was flat at $41.01/barrel.
On the stimulus front, Treasury Sec. Mnuchin told reporters that the White House will no longer let funding targets over Covid-19 testing hold back a stimulus deal. Later the president said he would raise his offer above the Administration’s current $1.8 trillion, but gave no specifics. These two developments raised hopes in the market that a deal may still get done soon. However, after hours, Senate Majority Leader McConnell rejected the idea of any large stimulus bill passing the Senate, regardless of whether the White House backs the bill or not. He told reporters that the $500 billion PPC bill Senate Republicans will propose and vote for next week is the right level of stimulus.
In an interesting follow-up to a story earlier this week, Robinhood confirmed that almost 2,000 of their trader’s accounts were hacked from a data leak that had been sold on the dark web. CNBC reported that E*Trade, Schwab, TDA, and others have also been hacked and the Treasury Dept. reports that the total theft through these leaks has been about $1 billion since February. However, Robinhood is the latest and most high profile due to their notoriety on social media during the pandemic.
European Aviation regulators have declared the BA 737 Max plane fit to fly in European air space again, even before the company makes the final changes demanded by the US FAA. This is very good news for BA, which has struggled with a Public Relations nightmare over this problem plane. In other European news, UK’s PM Johnson told the country to prepare for a “No Deal Brexit” (breaking of an international treaty, using WTO tarrif rates, and turmoil around a hard border in Ireland) as no progress has been made in trade negotiations.
On the virus front, in the US we now have 8,219,123 confirmed cases and 222,754 deaths. After 66,219 new cases Thursday, the 7-day average daily new case count rose again to 54,413/day, while the lagging average of deaths remains relatively flat at 711/day. 36 states are reporting increasing new case numbers and the country as a whole has seen a 14% increase in cases in the last week. In good news, MRNA said it may have efficacy data on the first 53 patients in its Phase 3 trial sometime in November, but will not have safety data on even those 53 until some unspecified time beyond then.
Globally, the numbers rose to 39,250,410 confirmed cases and the confirmed deaths are now at 1,104,131 deaths. ECB President Lagarde said that economic stimulus in the form of interest rate cuts, forward guidance, and asset purchases is ready and waiting as 80% of European countries are seeing a surge in cases. In the UK, another region of the UK moved into the highest alert level with a surge of cases, binging a lockdown to that region. France, the Netherlands, Czech Republic, Poland, Belgium, Spain, and Russia are all sitting at a record level of new cases as the rate of spread seems to be even worse than in the US. Analysts speculate this is because Europe is farther North than the US and may well be further into their seasonal shift indoors.
Overnight, Asian markets were mixed and saw modest moves in both directions. Hong Kong was the biggest winner at +0.94, while South Korea was the biggest loser at -0.83%. In Europe, markets are nearly green across the board, with the lone outlier of a red Russia. The big 3 bourses are showing the FTSE +1.31%, DAX +0.87%, and CAC +1.49%. Other European bourses show a more moderate positive move so far Friday. As of 7:30am, US futures are also pointing to a modestly higher open. The DIA and SPY are both implying about a 0.25% gap up, while the QQQ is showing a 0.36% gap up at this point.
The major economic news for Friday includes Sept. Retail Sales (8:30 am), Sept. Industrial Production (9:15 am), as well as Aug. Business Inventories and Univ. of Michigan Consumer Sentiment (both at 10 am). Major Earnings Reports include ALLY, BK, CFG, JBHT, SLB, STT, and VFC before the open. There are no earnings reports after the close.
Just like yesterday, the surging virus, lack of a stimulus deal, and earnings reports are likely to be the main drivers of the market today. However, news on stimulus (good, bad, and/or conflicting) may also be likely in front of the weekend news cycle. Regardless, the one thing that is sure is that political overhang and posturing are sure to add to volatility. So, continue to be careful in this market.
As always, lock-in profits whenever you can and stick to your rules. Don’t chase moves you have missed, don’t predict, and respect potential support and resistance. Follow the trend and the short-term trend remains to the downside. However, the market is in a longer Bull trend and doing a Flag pattern type move despite yesterday’s strong white candle. Just stick to those trading plans and they will serve you well.
Ed
Swing Trade Ideas for your consideration and watchlist: FITB, GLW, CGC, TSLA, SPCE, X, OKE, FCX, GPS, INTC. Also, the public is invited to join Rick in the trading room starting at 9 am using this link: https://bit.ly/Hrcopenroom 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
As stimulus hope fades and a coronavirus resurgence here in the U.S. and Europe, overnight futures markets point to a nasty gap down ahead of market-moving earnings and economic reports. The swirling uncertainty continues to make price action very volatile and dangerous, likely chopping up accounts of the inexperienced. Today’s news could quickly improve or worsen this morning open, so plan your risk carefully and work to avoid emotionally charged decisions.
Asian markets slip south across the board overnight, and European markets are decidedly bearish this morning after France declares a public health emergency. Ahead of earnings and economic data that included jobless numbers futures suggest a nasty gap and more price volatility for the traders to navigate.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have 13 verified reports rolling out today. Notable reports include UAL, DAL, SCHW, TACO, ISRG, MS, TFC, & WBA.
News & Technicals’
The bears made some headway yesterday, pushing the indexes lower after a report suggesting the hoped-for stimulus before election day fades. Additional reports reviled the speaker Pelosi spoke to Munchin yesterday and plans to continue the stimulus conversation later today but noted there remains a vast divide in viewpoints. Coronavirus is once again front and center in this morning’s news, with France declaring a public health emergency and Europe scrambling to control the reemergence with new lockdown procedures. Here in the U.S., the infection rates are also surging again, topping more than 50,000 for the second day in a row. Sadly the death toll is also rising, weighing the market sentiment heading into today’s open and piling on to the bad news coronavirus clinical trails are pausing over safety concerns. As the election season politics shifts into high gear, the second presidential debate is being replaced with dueling town hall meetings. What could go wrong with that?
All this uncertainty seems to have energized the bears this morning, with the futures pointing to a substantial gap down this morning. However, with several notable earnings and economic reports headed our way before the open, we could easily see an improvement or a worsening of this volatile overnight swing. Buckle up; it could be a wild ride today.
Markets opened flat Wednesday and after a slight rally, sold off all morning before a range-bound roller-coaster near the lows all afternoon. The result is a Bull Flag pattern in all the major averages. On the day, QQQ was down 0.84%, SPY down 0.63%, and DIA down 0.56%. The VXX fell a percent to 21.92 and T2122 fell outside the overbought territory to 72.50. 10-year bond yields were unchanged at 0.727% and Oil (WTI) rallied over 2% to $41.11/barrel.
On the stimulus front, Treasury Sec. Mnuchin and House Speaker Pelosi spoke again Wednesday but did not reach a deal. Mnuchin threw cold water on the market with comments after the meeting to the effect that getting a deal done before the election will be very difficult. However, they will meet again Thursday.
After the close, WFC announced they have fired more than 100 employees for abuse of the relief fund programs. However, they stressed a lower than expected loan loss for the quarter. UAL also posted a larger than expected loss on the quarter and again stressed the need for relief from the US government.
France said Wednesday that they intend to proceed with a tax on digital transactions with customers located in their country. The French Finance Minister also said the EU should press ahead with its own plans for an EU-wide digital tax (to prohibit the big tech companies from shifting profits to low-tax Ireland in order to avoid taxation). US sanctions and tariffs on France are scheduled to take place in retaliation as of January.
On the virus front, in the US the numbers showing we now have 8,153,740 confirmed cases and 221,872 deaths. After almost 60,000 new cases Wednesday, the 7-day average daily new case count rose again to 53,151/day, while the lagging average of deaths remains relatively flat at 723/day. 36 states are reporting increasing new case numbers and the country as a whole has seen a 14% increase in cases in the last week.
Globally, the numbers rose to 38,814,533 confirmed cases and the confirmed deaths are now at 1,098,012 deaths. In France, new restrictions (including 9pm curfews) were announced as both new cases and hospitalization reached the highest level since June and exceeded their preset threshold for additional measures. Both Germany and Italy recorded their highest number of new cases since the start of the pandemic and Russia recorded a record number of deaths Wednesday. Meanwhile, in Spain, all bars and restaurants in the Catalonia region have been closed again for at least 2 weeks. Across the Channel, in a controversial move, Wales has banned incoming travelers from high-risk areas of the UK, including Scotland, Northern England, and Northern Ireland.
Overnight, Asian markets were red across the board (with the lone exception of a modestly positive Australia). Hong Kong and India were the only losses of more than 2%. In Europe, markets are following Asia with major losses at this point in the day. The big 3 bourses are showing the FTSE -1.88%, DAX -2.72%, and CAC -2.15% on renewed virus and shutdown fears. There is a similar scorecard across the rest of the continent’s exchanges. As of 7:30am, US futures are also pointing to a significant gap down. The DIA and SPY are both implying about a 1% gap lower, while the QQQ is showing a 1.40% gap down at this point.
The major economic news for Thursday includes Sept. Import/Exports, Weekly Initial Jobless Claims, NY Empire Mfg. Index, and Philly Fed Mfg. Index (all at 8:30 am), Crude Oil Inventories (11 am) and 3 Fed speakers (Kaplan at 11 am, Quarles at 11 am, and Kashkari at 5 pm). Major Earnings Reports include CMC, MS, SCHW, TFC, TSM, and WBA before the open as well as ISRG after the close.
The surging virus, lack of a stimulus deal, and earnings reports are likely to be the main drivers of the market. However, the flurry of economic news at 8:30 am may have something to say about the open. Regardless of the open, political overhang and stimulus posturing are sure to add to volatility during the day. So, be careful if you are going to wade into this market anew.
Be nimble and make sure you lock-in profits whenever you can. As always, maintain your discipline. Stick to those rules and don’t chase moves you have missed. Follow the trend (and the short-term trend is down in a longer Bull trend doing a Flag pattern move now). Just stick to those trading plans and they will serve you well.
Ed
Swing Trade Ideas for your consideration and watchlist: No trade ideas today. However, the public is invited to join Rick in the trading room starting at 9 am (where many trade ideas will be discussed) using this link: https://bit.ly/Hrcopenroom 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 the indexes in a short-term overextended condition and a mixed bag of earnings results, the bears began probing for weaknesses breaking the 4-day rally. BAC disappointed this morning, reversing early futures bullishness, but with several more potential market-moving reports this morning, we could easily flip-flop several more times before the open. Anything is possible, and keep in mind how quickly market emotion can shift on any stimulus news.
Asian markets, in reaction the Xi’s speech, closed with mixed but modestly higher results. European markets are chopping around the flatline this morning as virus worries weigh on investor sentiments. US Futures seem uncertain this morning, but asf earings roll out, anything is possible, so prepare for another day of price volatility as a hopeful market awaits more government deficit spending.
Economic Calendar
Earnings Calendar
On the hump day earrings calendar, we have 12 verified reports, and several are considered market-moving. Notable reports include AA, ASML, BAC, GS, INFY, PNC, SNBR, USB, UNH, & WFC.
News & Technicals’
With a mixed bag of earnings results yesterday and the indexes significantly extended, the bears made a half-hearted appearance breaking a 4-day winning streak. However, after spending considerable time reviewing charts last night, I feel like I saw this kind of price action before in 1999. Instead of wild speculation on dot.com companies, this time, there seems to be a willingness to throw money at the market, betting on government stimulus. Let’s face it the actual economy is struggling, and with coronavirus cases rising again, the economic challenges business face this winter could be substantial. Like in 1999, the markets could continue to zoom higher, ignoring the massive national debt, but the consequences of doing also increase the risk. Long story short, follow the price action higher but don’t drink the kool-aid. This wild-eyed bullishness party will eventually end, and I suspect the hangover it has the potential to produce will be very painful and destroy a lot of accounts as it did in 1999. Stay frosty and focused.
Technically speaking, the bulls remain in substantial control of the indexes, but they are short-term overextended, and the bears are beginning to probe for weaknesses in their defenses. BAC reported disappointing results this morning, reversing futures that at one point suggested a gap up open but now indicate a slightly bearish open. However, many more notable reports for the market to react to before the open anything is possible. Remain flexible and remember the market is sensitive to stimulus news and could become increasingly sensitive to virus numbers once again.
Markets opened mixed and flat Tuesday as Earnings season kicked off. However, the large-caps saw a slow selloff lasting all the way to the lows about 3 pm. Then a rally the last hour closed the DIA and SPY up off their lows, both printing Bearish Harami candles. Meanwhile, the QQQ gapped up almost two-thirds of a percent but immediately sold off below Monday’s close. Then an all-day roller coaster ride ended up with price closing almost exactly where it closed Monday. On the day, QQQ was flat -0.00%, DIA down 0.60%, and SPY down 0.65%. The VXX rose slightly to 22.15 while T2122 fell back to the edge of the overbought territory at 80.17. Bonds began trading Tuesday after the holiday and fell to 0.729% as Oil (WTI) rose to $40.17/barrel.
On the stimulus front, Senate Majority Leader McConnell has had enough negotiations (he is not a primary negotiator anyway) and has said the Senate will vote on a small plan that essentially covers just the PPP business loan/grant program. However, any bill the Senate passes is very likely DOA in the House. Meanwhile, President Trump sent out another nebulous tweet urging Congress to “go big or go home” on stimulus (no amount or specifics mentioned). And House Speaker Pelosi has again told reporters the White House proposal falls significantly short of what is needed to address the crisis.
During the day, the big banks got hammered with C and JPM both printing big, ugly Bearish Engulfing candles. This came as both reported beats on both the top and bottom lines. BAC and WFC (which report Wednesday) also got caught in that selling. The other major stock news on the day was the AAPL iPhone announcement which includes a $100 price increase and adds 5G capability while also not providing a charging cable or earpiece. Finally, overnight, PPC agreed to pay a $110 million fine for Chicken price-fixing.
On the virus front, in the US we have now gone over 8 million cases, with the numbers showing we now have 8,093,600 confirmed cases and 220,900 deaths. The 7-day average daily new case count rose (about 1,000 increase) again to 51,691/day, while the lagging average of deaths remains relatively flat at 712/day. Prior to the open Tuesday, JNJ became the second to pause their Phase 3 Trial over another unexplained illness of a study participant. Then in the afternoon, LLY was forced to pause the trial of their antibody treatment (the one President Trump received) by US regulators over potential safety concerns.
Globally, the numbers rose to 38,426,539 confirmed cases and the confirmed deaths are now at 1,091,759 deaths. This comes as the world is adding 1 million new cases every 3 days. In the UK, despite the worsening situation, Cabinet Member Coffey said there is unlikely to be a national lockdown in the next 2 weeks, instead insisting the PM had decided to go with regional measures and local lockdowns in hope that will be enough to stop the spread. Meanwhile, in Germany, Chancellor Merkel is scheduled to release more restrictions later today.
Overnight, Asian markets were mixed, but mostly lower as the region reacted to a speech by Chinese President Xi Jingping. Japan and Hong Kong ended flat, with Shanghai, Shenzhen, and South Korea lower. The other Asian markets were mixed with only India (+0.72%) showing any appreciable gain. In Europe, markets are also mixed, but again mostly lower so far today. The big 3 bourses are all on the red side of flat with the only markets showing noticeable moves being the smaller countries as of mid-day. As of 7:30 am, US futures are mixed and flat with the DIA and QQQ just on the green side of even and the SPY just on the red side.
The major economic news for Wednesday is limited to Sept. Core PPI (8:30 am) and 4 Fed speakers (Clarida at 9 am, Quarles at 9:30 am, Quarles again at 3 pm, and Kaplan at 6 pm). Major Earnings Reports include ASML, BAC, GS, INFY, PGR, PNC, USB, UNH, and WFC before the open. Then after the close, AA, and UAL report.
Earnings are ramping up, the tea leaf reading of those numbers and statements follow, and stimulus talks (or lack thereof with Treas. Sec. Mnuchin out of the country), as well as political wrangling and the ACB confirmation hearings, will dominate the news. So, there is a lot of volatility risk overhanging the market. It looks like we are starting out looking at a consolidation day. However, that volatility can see us run either direction.
Continue to be careful, nimble, and potentially light in your trades. Make sure you lock-in profits whenever you can and maintain your discipline. Stick to those rules, follow the trend, and don’t chase moves you have missed. Just stick to those plans and they will serve you well.
Ed
Swing Trade Ideas for your consideration and watchlist: ABUS, OKE, XRT, KODK, XSPA, MRNA, SPCE, AMD. 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, 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
