***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
With the election silly season in its final stretch and the President back at work, expect the political spin and uncertainty of what happens next to keep the price action volatile and the overall market on edge. The CDC is warning that the virus can spread through airborne transmission and infect others more than six feet away. Joe Biden is calling for the President to institute a national mask mandate. A tweetstorm is surly to soon follow on the subject.
Asian markets closed mixed but mostly higher as Australia’s central bank held steady on their interest rate policy. European markets are trading with modest gains across the board as the US futures point to flat open ahead of economic data and a speech from Jerome Powell.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just three confirmed earnings reports. Notable reports include PAYX & LEVI.
News and Technicals’
The President is back in the White House medical unit while still recovering and is already receiving negative feedback for returning to work while still infected. Joe Biden says the President bears responsibility for Covid-19 infection and calls for a national mask requirement. With just four weeks until the election, I suspect both candidates will raise the bar on politicalizing the pandemic. The CDC has now acknowledged that the virus spread through airborne transmission that infected others more than 6′ feet from one another. Google has rebranded its office tools as Workspace as it goes head to head with Microsoft Office working to gain market share as more and more people are working from home. A trend I suspect will continue over the coming years. According to reports, teen spending has dropped to a two-decade low as the pandemic pressures have affected their parents and dramatically cut service jobs that teens often hold.
After a surge of buying pressure yesterday, indexes reached out to test price resistance levels in the indexes pushing the T2122 indicator into a short-term overbought condition. IWM experienced the most significant technical improvement on the day with oil and financial sector stocks bouncing up from recent lows. Futures struggled around that flatline most of the evening and continue to this morning, although they well off their overnight lows. After partying hard yesterday, it’s possible, the bulls need a little rest, but let’s hope the bears are not fortified in the price resistance above ready to attack. With a light day on the earnings calendar, economic reports, Jerome Powell’s speech, and the stimulus news spin will likely keep the pice volatility high.
Monday saw a gap higher about seven-tenths of a percent and continued a strong morning rally apparently on less concern over the President’s health and hope for more stimulus. After a mid-day grind sideways, a late day rally took the markets out near the highs. This left us with large white candles across all 3 major indices. On the day, QQQ closed up 2.13%, SPY up 1.77%, and DIA up 1.70%. VXX fell 3% to 24.97 and T2122 rose deep into overbought territory at 92.64. 10-year bond yields rose strongly to 0.778% and Oil (WTI) spiked 6% to $39.35/barrel.
On the stimulus story, House Speaker Pelosi and Treasury Sec. Mnuchin spoke for an hour Monday without reaching a deal. However, the two sides will exchange proposal documents and are scheduled to speak again today. In related news, LUV told its union employees that it can only avoid mass layoffs if they take large pay cuts (unknown amount) and that there was no time for long, complex negotiations over this matter. The company has already cut executive salaries by 20%.
Related to the year-long Tech Giant Anti-trust hearings in Congress, a Republican committee member (Buck, CO) told Politico that the committee report will call for AMZN and AAPL being prevented from owning marketplaces in which they sell their own products as well as those of competitors. Other portions of the Democratic majority recommendations would represent a major update of the Glass-Steagall anti-competition law. The release of the report is being delayed after last-minute new information surfaced related to the FB purchase of Instagram in 2012 and to incorporate GOP comment and objections. Buck also told the reporter that the things proposed by the committee are non-starters for Republicans. In an unrelated story, AAPL stopped the sale of competing speakers and earphones ahead of the launch of their own new products in those areas.
On the virus front, in the US, the numbers show we now have 7,679,908 confirmed cases and 215,039 deaths. The 7-day average daily new case count continues to rise and is now back up to 44,397, while the lagging average of deaths remains relatively flat now at 747. The new case count is rising in 36 states as of Monday (based on 7-day average). The CDC also revised its guidance again Monday, reversing course to acknowledge that the virus can linger in the air up to hours and can be transmitted via airborne particles. The FDA also reported that it now expects at least one “emergency use” vaccine application by year-end. Meanwhile, Dr. Fauci again warned that the US is still lagging behind where it needs to be on Covid-19 testing coming into Winter.
Globally, the numbers rose to 35,740,361 confirmed cases and the confirmed deaths are now at 1,046,633 deaths. In the EU, the European Medicines Agency has begun a rolling review of the BNTX vaccine (Oxford UK study). This does not reduce the approval hurdles, but does speed up the process of evaluation. In good news, India reported the lowest new case total (61, 267) it has seen in 6 weeks. However, in less bright news, several European countries are introducing new restrictions. France, has raised the alert level to maximum in the region around Paris, ordering the closing of bars again for at least 15 days. Germany mandated that Parliament wear masks at all times and the Czech Republic declared a second state of emergency.
Overnight, Asian markets were mixed but leaned to the green side as Australia’s central bank held steady on policy and rates. India (+1.38%) was the only mover of more than 1%. In Europe, markets are also mixed but leaning green. The 3 major European Bourses are all slightly positive, with the FTSE up 0.05%, DAX up 0.17%, and CAC up 0.33%. The losses seen are all in smaller markets like Denmark, Switzerland, and Amsterdam. As of 7:30am, US futures are all just on the red side of flat. The DIA is flat at -0.02%, SPY -0.23%, and QQQ -0.36%.
The major economic news for Tuesday includes August Imports, August Exports, and August Trade Balance (all at 8:30 am), August JOLTS (10 am), and a trio of Fed speakers (Chairman Powell at 10:40 am, Harker at 11:45 am, and Kaplan (6 pm). On the earnings front, PAYX reports before the open and LEVI reports after the close.
After Monday’s strong bullish run, we still have no stimulus, but the President did get released to the White House medical facilities (versus actual hospital). With earnings starting in a few days, it seems the market is both assuming and anticipating another shot of “free money” stimulus. This comes as Piper Jaffray reports teen spending has hit an all-time low. So, while it’s hard to bet against the bulls here, there is no general economic optimism or stimulus underpinning the move…just expectation. In fact, most economists say the recovery is slowing and expect some sort of recession in 2021 regardless. So, be very wary of volatility or, heaven forbid, the government or economy not meeting market expectations.
I was dead wrong yesterday about the gap-and-fade. The bulls never looked back for some unknown reason. I suppose that’s just another reminder to not predict…just follow the chart. So, stick to your rules, follow the trend, and don’t chase moves you have missed. Don’t get too far exposed either direction in this volatile market. Also remember to keep locking-in profits, because a trader’s job is to make consistent gains…not win bragging-rights.
Ed
Swing Trade Ideas for your consideration and watchlist: LB, NIO, NUAN, BLNK, FB, AAPL, BA, INTC. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
After a choppy news-driven choppy week of price action, last week with an ugly GDP, layoffs, and slower than expected job recovery, the bulls did a good job or defending price support. Most notable last Friday was the bounce in the financial and energy sector, giving the IWM the power required to break above its 50-day average. However, with the uncertainty of the presidential election and still no deal on a 5th stimulus package, it may be too early to sound the all-clear just yet. Expect price volatility to remain considerably choppy.
Asian markets closed mixed but mostly higher overnight, reacting to a bounce in oil prices. European markets are higher this morning across the board, and the US Futures point to a substantial gap up at the open as the market tracks the president’s health. With a light economic and earnings calendar, price action may be particularly sensitive to the news cycle, so remain focused and flexible.
Economic Calendar
Earnings Calendar
On the Monday earnings calendar, we have just one unconfirmed possible earnings report today PRED. It’s a penny stock company and not notable as market-moving.
Markets saw a significant gap lower at the open Friday on the news of the President’s positive Covid diagnosis. However, this gap was immediately faded by more than half as a roller coaster day between the prior close the and the gap-down open ensued. By day end, all 3 major averages left large upper wicks and bodies at the lower end of the candle. QQQ was a particularly ugly black-body candle as the FAANGM stocks all got hammered on the day. At the close, QQQ was down 2.81%, SPY down 0.95%, and DIA down 0.48%. The VXX gained 3% to end at 25.78 and T2122 (4-week New High/Low Ratio) jumped back up into overbought territory at 86.40. 10-year bond yields rose to 0.704% and Oil (WTI) fell again to $37.05/barrel. This all said, the action for the week did break the streak of losing candles for the first time in 5 weeks.
Lost in the “Trump positive test” news cycle was a disappointing September Payrolls report. While the Unemployment Rate did fall to 7.9% for the month, this happened mostly on a drop in workforce participation (almost 1.1 million people dropped out of the workforce and stopped looking for work) and there were also fewer than expected jobs created in September (660k new jobs versus 800k+ expected). So, combined with the previously reported drop in Personal Expenditures, the economic recovery appears to be weakening significantly and talk of a continuing V-shaped economic recovery is no longer consistent with the data. However, a weakening economic recovery does not necessarily equate directly to a weakening stock market.
Regarding the stimulus negotiations, White House quarantines, a number of additional positive tests, and staff retesting and isolation protocols (given the incubation periods of the virus) undoubtedly added to the difficulty of negotiations. However, the main stumbling block Friday continued to be that the two sides are far apart on key issues. So, while many specific groups (like the airline industry) and the market in general all continue to anticipate more stimulus is imminent, no deal is yet in sight. However, after the close Friday Senate Majority Leader McConnel said “they were getting closer” and then Saturday the President urged Congress to “GET IT DONE” (as if his negotiators had nothing to do with the process).
On the virus front, in the US, the numbers show we now have 7,637,066 confirmed cases and 214,615 deaths. The 7-day average daily new case count continues to rise and is now back up to 43,804, while the average of deaths remains 736. 33 states have rising case counts, 26 have increasing hospitalizations, and 12 have increasing death counts due to the virus. NYC has had to order another shutdown of businesses and schools in the 9 worst-infected zip codes of the city as test positivity has again reached 18% in some areas. Even worse situations are happening in states across the country, especially the Northern half of the nation, like WI with 24% positive tests, but the South is not spared as MS reached 42% test positivity this weekend (which is noteworthy because their Governor just ended the MS mask mandate).
Globally, the numbers rose to 35,437,479 confirmed cases and the confirmed deaths are now at 1,042,344 deaths. In France, has raised the alert level to maximum in the region around Paris, ordering the closing of bars again in that area as restrictions will last 15 days. Elsewhere in Europe, cases are surging even more in the UK, where PM Johnson warned the British people to prepare for a rough winter ahead. In addition, the British Health Minister prohibited mixing of families in any indoor setting for many cities in the north of the country (including Liverpool). Both Germany and importantly Italy continue to report the highest new case count since April and Poland reported an all-time record number of cases for the third day in a row on Sunday.
Overnight, Asian markets were green almost across the board, with only two Chinese exchanges flat or down. Australia (+2.59%), South Korea (+1.29%), and Japan (+1.23%) led the gainers. In Europe, markets are green across the board so far this morning. The Big 3 bourses are typical, with the FTSE up 0.83%, DAX up 0.74%, and CAC up 0.88%. As of 7:30am, US futures are following Europe and pointing to a gap higher of two-thirds of a percent in the large-caps and eight-tenths in the Nasdaq apparently on reports or assumptions the President Trump’s health is improving.
The major economic news for Monday is limited to Sept. Service PMI (9:45 am) and Sept. Mfg. PMI (10 am). There are no earnings reports scheduled on the day.
We all know that the market hates uncertainty and we already had plenty related to the virus, election, and stimulus. This has been compounded over the weekend by uncertainty about the President’s health, as well as the White House gave us a steady stream political posturing, mixed messages, and outright lies about his treatment and condition. This was punctuated by him pulling a Sunday evening “drive by photo op” stunt for the nightly news cycle. All this is to say, volatility continues as uncertainty reigns now.
Personally, I expect a gap-up and then snap-back reaction this morning as over-reaction has been the norm for markets for some time. Even with a gap-up, the only thing we can do is to trade the chart and right now that shows resistance above with no bullish trend yet in place. So, we can either continue to sit on the sidelines or be very careful and quick in this market. If you do trade, stick to your rules, follow the trend, and don’t chase moves you have missed. Remember to keep locking-in profits, because it’s the singles and doubles that add up to championships, not the occasional home runs.
Ed
Swing Trade Ideas for your consideration and watchlist: INTC, BA, HD, TOL, NIO, BLNK, LB, URI, BIDU, DDOG, PNR Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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
