Monday’s price action delivers bearish reversal patterns but fails to follow-though, so on Tuesday, the market is dealt another full price action reversal by the bulls. The VIX continues to remain very elevated, and the Absolute Breadth Index continues to decline as infection rates rise in 39 states. Interestingly so-called safe-haven issues in the consumer defensive sector had a very good day yesterday, and gold and silver values continue to climb. Indeed an interesting dichotomy for traders to navigate.
Asian markets trade mixed but mostly higher overnight, with the NIKKEI closing up 1.59%. European markets are in the full-on bullish mode this morning, reacting to the hopeful vaccine news. US futures are leaping higher this morning on the same vaccine news and in reaction to the GS earnings. At the moment, the Dow futures suggest a gap up open of nearly 450 points.
Economic Calendar
Earnings Calendar
On the hump day earings calendar, we have 27 companies reporting with our second round of big bank reports. Notable reports include AA, BK, GS, INFY, PNC, SNBR, USB, & UNH.
News and Technical’s
The game is on with 3rd quarter earnings with JPM reporting declining earnings results but, they beat the analyst’s estimates, so the stocks rallied. I suspect this will continue today as we progress through several significant bank reports this morning. A strong late-day rally pushed the Dow up 556 points reversing Mondays bearish reversal pattern that failed to follow through. Interestingly, Gold, Silver, and bonds rallied with the market as the Absolute Breadth Index continues to decline. The VIX pulled back below its 50-day average but remained elevated, closing the day above 29 handles and suggesting the wild price volatility is far from over. This morning futures point to a bullish follow-through in anticipation of earnings and a hopeful report from Moderna on a vaccine trial that produced a COVID-19 immune response.
Thirty-nine states now report rising infection rates with more than 65,000 new cases reported yesterday with more than 900 deaths. Adding to the tensions with China, the President yesterday signed a bill sanctioning them and ending Hong Kong’s preferential treatment status. China has, of course, already vowed retaliation but, as of now, has given no details as to what that might entail. Apple has won in EU courts, saying the company doesn’t have to pay nearly 15 billion in Irish taxes. Texas approves tax breaks for Tesla if they build the proposed 1.1 billion car plant near Austin. I suspect other states will soon join the bidding war for the construction. With less than 4-months to the presidential election, Joe Biden seems to be gaining momentum according to the latest poll. We can expect some market volatility as the race heats up, and the political rhetoric reaches a fevered pitch over the months ahead.
On Tuesday, markets saw a small gap down after a JPM earnings beat was offset by increased loan loss provisions. However, after a negative open, the bulls were in control the rest of the day, closing near the highs. Interestingly, it was cyclical stocks like CAT, CVX, XOM, and BA that led the way for the day. DIA put in a Bullish Engulfing candle and the SPY printed a Bullish Piercing candle. At the end of the day, DIA was up 2.13%, SPY up 1.30%, and QQQ up 0.71%. VXX fell almost 6% to 33.20 and T2122 rose back closer to overbought territory at 73.33. 10-year bond yields fell to 0.628% and Oil (WTI) climbed back to $40.28/barrel.
After the close, MRNA reported that their potential vaccine produced “robust immune response” (antibodies) in all 45 subjects in their Phase 1 test. This is not a new test, but a clarification of the report on the same small trial that was first reported in May. The only additional news was a firm date of July 27 (had been in terms of “late July”) for the start of a 30,000 patient Phase 3 trial of the vaccine. MRNA stock was up over 15% in after-hours trading on the report. Travel stocks including both airlines and cruise lines also spiked after-hours on this news.
In the US, the virus numbers show we have 3,546,278 confirmed cases and 139,162 deaths. TX reported 10,745 new cases Tuesday. In FL, Miami-Dade County is now reporting a 31% positive result rate on tests. Meanwhile, the CDC said that if all Americans wore masks, we could have the virus under control in a month or two. However, that is nowhere near the case in the US. As a result, the US 7-day average of new cases is well over 62,000/day.
Globally, the numbers have reached 13,487,894 confirmed cases and 581,978 deaths. In news that is perhaps tangential to the MRNA report, a study published in the UK reported that a 90-patient study has found that immunity from antibodies only lasts two months before waning. (That might mean the sale of many more doses of vaccine.) Further East, India reported over 29,000 new cases yesterday in its biggest 1-day increase. Closer to home, Mexico announced it is extending the border restrictions with the US until at least August (both countries restricted all non-essential crossings back in late March). This comes as Mexico has now become the 4th worst-hit country (in the total number of deaths).
Overnight, Asian markets were mixed, with Chinese indices down on reports of heavy increases in food prices, brought on by virus impacts and massive floods across their country. In Europe, markets are much more broadly green with hopes for a vaccine lifting spirits. The FTSE is up 1.78%, DAX up 1.96% and CAC up 2.35% at this point in their day. In the US, as of 7:30 am futures continue their overnight run on the MRNA news. DIA is up 1.67%, SPY up 1.34%, and QQQ up 0.96% at the moment.
The major economic news for Wednesday includes June Import / Exports and July NY Fed Empire State Mfg. Index (both at 8:30 am), June Industrial Production (9:15 am), Crude Oil Inventories (10:30 am), and a Fed Speaker (Harker at noon). Major earnings reports include ASML, BK, EBAY, GS, INFY, OMC, PGR, PNC, UNH, and USB all before the open. After the close, AA, and SNBR report.
Tuesday’s candles were quite bullish within the recent series of 1-day moves. However, it looks like vaccine hopes will drive markets early today (rather than the recent pattern). So, the consolidation may be coming to an end. The bulls certainly look to be chasing the recovery trade (travel-related for example) overnight. However, don’t get too giddy. Keep an eye on those “canary in the coalmine” FAANG stocks. They’re so big that they will call the tune for markets. Watch those short-term charts and don’t chase, don’t predict, and take profits as you go. Remember we are in earnings season now, so some surprises are likely to happen.
Ed
The Daily Swing Trade Ideas for today: HD, MCD, GE, FTCH, JNJ, SPCE, KO, AMGN, BUD, ABBV, JPM, XLF. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs 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
A sharp rally followed by a nasty reversal selloff leaving behind bearish candle patterns and more questions than answers heading into 3rd quarter earnings. The VIX closed above a 32 handle showing a level of uncertainty not generally associated with new record highs. I suspect the volatility will remain quite high, making the navigation through earnings season quite challenging even for very experienced traders. Stay sharp and plan for just about anything in the days ahead.
Asian markets saw modest losses across the board even as their June trade data beat expectations. European markets are trading lower this morning as concerns of the spiking pandemic infections weigh on investor sentiment. US Futures again find the energy to pump up in the premarket trying to ignore yesterdays selling damage as earnings season begins. Anything is possible, so stay focused and flexible.
Economic Calendar
Earnings Calendar
Today we officially kick-off 3rd Quarter earnings with 14 companies fessing up to quarterly results. Notable reports include JPM, AMX, C, DAL, FAST, & WFC.
News and Technical’s
I’m guessing yesterday turned out to be a bit painful after the significant index gains quickly reversed after the Governor of California announced a sweeping roll-backs due to a 28% increase in infections. Two of the largest California school districts will not reopen favoring distance learning in an attempt to protect students and teachers from the virus. I had mentioned the possibility of a pop and drop pattern, but the way this reversal played out was strickly the sensitivity of the market to the news. Interestingly as the market rallied yesterday, the Absolute Breadth Index continued to decline. However, as soon as the selling began, the Breadth Index rallied with the selloff. I believe that a large portion of that problem is that just 5-companies now command a full 25% of the entire SP-500 weight. An imbalance that could become a significant problem should profit-taking take hold in the five heavyweights. Yesterday may have been a preview of what could happen if that should come to pass.
Technically speaking, the flash selloff yesterday adds a bit of complication to the look of all the index charts as we begin 3rd quarter earnings. The DIA left behind a nasty shooting star pattern that once again failed the 200-day average. It would appear ahead of earnings they bulls are pushing to test the 200 once again as resistance at the open. The SPY left behind a bearish dark cloud cover pattern failing to hold the break of the early June island reversal pattern. The NASDAQ was the first index to have reversed yesterday from a very extended run leaving behind a bearish engulfing pattern on the QQQ. IWM finished the day with a dark cloud cover pattern, and the VIX ended the day printing a reversal that broke above its 50-day average closing above a 32 handle. With the VIX so elevated and facing an uncertain earnings season traders should expect challenging price volatility. Stay focused, and flexible as anything is possible in the days ahead.
Stocks gapped three-quarters of a percent higher and saw a little morning follow-through. However, the afternoon gave us a sharp selloff that left bearish candles on the day. QQQ printed a big Bearish Engulfing candle, SPY printed a Dark Cloud Cover, and the DIA printed what could be seen as an Evening Star type candle that failed the 200sma again. At the close, QQQ was down 2.06%, SPY was down 0.88%, and DIA closed just above flat at +0.08%. The VXX surged almost 10% to 35.25 and T2122 (4-week New High/Low Ratio) fell back to 43.64. The 10-year bond yield fell slightly to 0.625% and Oil (WTI) also fell $39.60/barrel.
The main story of the day was the virus impacts across the US as the number of cases grew by 2% on the day. CA reclosed indoor activities such as restaurants, theatres, bars, and churches as they reported a record number of hospitalizations. In addition, both Los Angeles and San Diego school systems said they will be not be opening in-person schools in the fall, continuing their distance learning plans from the Spring.
The other story on the day was a deteriorating relationship between the US and China. During the afternoon, the US formally rejected almost all Chinese claims on the South China Sea. (This reverses the previous US position of being neutral on Chinese claims in that area.) The Chinese didn’t like that and, in an unrelated story, China barred 2 US Senators in retaliation for the US barring some of their officials.
However, not all the news on the day was bad. AMZN announced they are forcing 3rd-party sellers to reduce their inventories in AMZN warehouses as the company is now starting to ramp-up their own inventories (2 months earlier than normal) as they expect huge sales this coming holiday season. OPEC also announced they are beginning to roll back some production cuts (expanding capacity) as they believe demand has stabilized. In addition, Senate Majority Leader McConnell said that Republicans will pitch their own stimulus plan next week. And last, but not least on the good news front, PFE and BNTX stocks also soared Monday as their vaccine 2 candidates were granted FDA “fast track” status.
In the US, the virus numbers show we have 3,479,650 confirmed cases and 138,247 deaths. This includes over 65,000 new cases Monday as 20 states saw record highs in their 7-day average of new cases and 40 states saw a rise in new cases for the day. Miami’s Mayor reported that the hospitals in the city are at 91%-92% of ICU capacity.
Globally, the number of cases has reached 13,265,782 confirmed cases and 576,249 deaths. In the UK, the government reversed direction and announced masks will be mandatory in shops starting July 24. Singapore reported they have slipped into recession as the major shipping and commerce city-state saw a 41% drop in GDP. In the Philippines, Manila will return to lock-down as of Thursday.
Overnight, Chinese trade data for June beat expectations (expanding when a contraction was forecast). However, Asian markets were still red across the board with the minor exceptions of Indonesia and New Zealand. In Europe, markets are also red across the board as the virus running out of control outweighs recovery hopes. At this point the big 3 bourses are down between just -0.38% (FTSE) and -1.6% (CAC). In the US, as of 7:30am futures are pointing higher, reversing after JPM reported stronger than expected earnings.
The only major economic news for Tuesday is the June Consumer Price Index (8:30 am). However, there are also two Fed speakers (Brainard at 2 pm and Bullard ar 2:30 pm). However, earnings season kicks off again as C, DAL, FAST, FRC, JPM, WFC, and WIT all report before the open.
Monday’s candles were ugly again, with the QQQ being the worst of the lot. However, as we have been saying, that index has been on such a tear it was far overextended and needed some profit-taking. So, the pullback may not be more of a blip than a change in trend. The bulls certainly look like they want to run today with good earnings news this morning. Still, it’s early and virus news will continue to weigh. So, keep an eye on those “canary in the coalmine” FAANG stocks. They are so big that they will call the tune for markets. Watch those short-term charts and don’t chase, don’t predict, and take profits as you go. Remember we are in earnings season now, so some surprises are likely to happen.
Ed
The Daily Swing Trade Ideas for today: CNVA, BYND, TSLA, SBUX, XLK, NKE, DG, FCX, JPM, VXX. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs 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 the bulls push for new record market highs this morning, it seems there is no price too high for some stocks with 3rd quarter earnings set to begin this week. With Covid-19 infections rising, some areas have reported hospitals are at capacity. Still, the market seems confident that no matter the impacts, the Fed and the Congress will cover the costs with more debt to keep the market going up. Expect the wild volatility to continue in the week ahead.
Asian markets rose sharply overnight, with the NIKKEI closing up nearly 2.25%. European markets are full-on bullish across the board this morning up more than 1.3%. US futures opened positive and continue to push higher this morning with a gap up open that will set new NASDAQ record highs at the open. Go bulls!
Economic Calendar
Earnings Calendar
This week we begin the 3rd quarter earnings season with the big bank beginning to report on Tuesday. We start the week with a light day with just 9-companies reporting with only one notable report coming from PEP this morning.
News and Technical s
I’m not sure it makes any difference to write about the impacts of coronavirus as the country continues to soar in new infections. As states require the wearing of masks such as Florida after reporting more than 15,000 new infections, protests broke out from groups saying that infringes on their rights. You can’t make this stuff up! If I were writing a novel, it would be so unbelievable it would not sell. Several areas in the country reporting that hospitals are at capacity treating Covid-19 patients, and the death toll in the US is back on the rise. Approaching earings, the market appears to have little to no concern about the pandemic with the expectation that the Fed and Congress will continue to escalate the deficit to keep the market going higher. With the national debt over 26.5 Trillion, the consequences of such spending are apparently irrelevant in today’s society.
Futures began trading last night seeing only bullishness, and that sentiment has only grown as we near the open of the day. The NASDAQ is poised to set another new all-time high at the open, and the SPY will gap above the island reversal that has recently served as resistance. The DIA, which has struggled with the resistance its 200-day average, will gap above it this morning at the open. Gaping to new record highs always carries with it the risk of a potential pop and drop, but with the bulls relentlessly willing to pay any price for stocks ahead of earnings, I would not rule out a big short squeeze sending indexes even higher. Expect wild price action to continue in the week ahead. Stay focused and flexible.
After a modestly lower open and a half-hour of volatility, the bulls stepped in and rallied the entire rest of the day closing near the highs. This left the SPY ending the week where it began after 5 days of consolidation. However, the QQQ continued its massive rally, with TSLA, NFLX, and GOOG pulling markets higher. On the day DIA was up 1.39%, SPY was up 1.02%, and QQQ was up 0.68% to yet another all-time high close. VXX fell to 32.15 and T2122 remains toward the high side of the mid-range at 73.53. 10-year bond yields rose to 0.641% as it was a risk-on day and Oil (WTI) rose back to $40.52/barrel.
In weekend trade developments, late Friday President Trump said the US-China relationship is severely damaged and as a result phase two of a trade deal is not a priority. In fact, he said “he isn’t even thinking about it.” Then on Saturday, the administration announced new tariffs of 25% on French goods (i.e. wine, cheese, cookware, cosmetics, soap, etc.). These tariffs are in retaliation for France not ending its new 3% tax on revenue earned from online sales to French users as the US had demanded. The tariffs are timed to not take effect until January, with the stated reason of giving time for negotiations. However, this move also comes days after Treasury Sec. Mnuchin canceled negotiations on the tax issue and warned retaliation on any country that imposes taxes on American tech giants (GOOG, AMZN, FB, etc.).
In the US, the virus numbers show we have 3,414,105 confirmed cases and 137,787 deaths. As of the weekend, only 3 states are seeing a reduction in the new case rate, while 14 are holding relatively steady, and 33 are increasing. Friday saw a record of 71,000 new cases. On Saturday, that number was 62,000. Then Sunday we saw a 5th straight day over 60,000 new cases. This includes FL reporting a massive 15,300 (4,000 more than the previous 1-day high). In South Carolina, they reported they are now seeing over 22% of all tests coming back positive.
Globally, the number of cases has reached 13,062,360 confirmed cases and 572,214 deaths. On Sunday, the W.H.O. reported 230,000 new cases. In Brazil, they reported 72,000 cases Sunday (on about two-thirds the US population). India reported a record number of cases 5 days in a row as of today. They also announced their 3rd largest city will lock-down for a week starting Tuesday. Meanwhile, in the UK, the government is now making a major push for economic recovery. Sunday, they encouraged workers to go back to the office (as opposed to working from home) if at all possible in an effort to stir retail activity. The MP (Gove) who announced this also said it should be up to individuals, not the government, as to whether people wear masks in shops, bars, and restaurants.
Overnight, Asian markets were mostly strongly green, with a couple of minor red exceptions being Thailand and Singapore. Shenzhen was up almost 3.5% and the NIKKEI up 2.22%. In Europe, we’re seeing a similar story with only Russia and Greece below flat. The big 3 bourses (FTSE, DAX, CAC) are all up about 1.3% at this point in their day. As of 7:30am, US futures are all pointing to a gap higher of about 0.80% at the open.
The only major economic news for Monday is the June Federal Budget Balance (2 pm). The only major earnings report for the day was PEP before the open and they reported a 3.1% revenue fall for the quarter, but beat on earnings ($1.32 vs 1.25). There was also a deal announced with chipmaker ADI buying MXIM in an all-stock deal.
Friday’s candles were very Bullish, albeit within a consolidation in large-caps (SPY). However, the QQQ continues to rip. Are the QQQs extended? Absolutely. However, that doesn’t mean they must reverse today. And the bulls look like they want to run again this morning with absolutely no fear of the pandemic. Still, keep an eye on those “canary in the coalmine” FAANG stocks. If they were to break, so will the market. If they maintain their rally, there is nothing the rest of the bears can do to fight that momentum. So, watch the short-term chart and don’t chase, don’t predict, and take profits as you go. And also keep in mind that Earnings Season starts again Tuesday.
Ed
The Daily Trade Ideas have been moved back to this space at the request of members. Today’s trade ideas are HD, PBR, XHB, VALE, LULU, CNP, XRT, GLW, CWH, MGA. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs 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 we head into the weekend, the tech giants continue to lead the way setting new records while DIA, SPY, and IWM experience some selling pressure. At the same time, 18 million Americans remain unemployed as more than 1.3 million files for benefits. That nearly doubles the number we experienced in the depths of the 2008 and 2009 depression. The VIX continues to display the uncertainty the market faces as a select few stocks continue to rise to new price highs.
Asian markets closed the day lower across the board as virus infections weigh on recovery hopes. However, European markets are bullish this morning in reaction to hopeful Italian data. US Futures have recovered from overnight lows suggesting modest declines at the open ahead of a very light day of earnings reports and pending PPI data.
Economic Calendar
Earnings Calendar
On Friday’s earnings calendar, we have a light day with just 11 companies stepping up to quarterly results. The report from SJR is the only particularly notable report I see. Remember, the official kick-off to the 3rd quarter earnings season begins next week.
News and Technical’s
Another day of records with the NASDAQ reaching out to new highs while at the same time coronavirus infections in the US topped 63,000 for the first time. More than 1.3 million filed for unemployment last week, and the concern is that the numbers may now start to grow as states struggle in their efforts to recover with the recent surge in the pandemic infections. It’s interesting to note that even at 1.3 million, the number is double the worst numbers we experienced in the depression of 2008 and 2009. A day after the Supreme Court rules against the President, his competitor calls for an end of the era of shareholder capitalism, suggesting higher corporate taxes. Tensions continue to grow as following the impositions of sanctions of three local Chinese officials of China’s ruling Communist party over human rights abuses. China vows to retaliate.
As we head toward the weekend, the imbalance between the tech giants continues with the QQQ holding on to a strong uptrend while the DIA, SPY, and IWM experience selling pressure. I have to wonder what happens to the market if or when profit taking begins in the tech sector. The VIX continues to suggest a considerable uncertainty exists as it seesawed between a low of 26 and a high of 31 handles yesterday. Facing a light day on both the economic and earnings calendar, the market could be sensitive to the news cycle, and price action is likely to remain volatile. Next week begins the 3rd quarter earnings season, which is likely to keep the wild price action going into the near future. Stay focused and flexible, carefully considering the risk you carry into the weekend.
Markets opened modestly higher Thursday on slightly better than expected Initial Jobless Claims. However, this was met with an immediate and strong selloff that took us to the lows by 11:30 am. While bulls rallied up off these lows, they were never able to climb back to flat. The NASDAQ closed at yet another record high close as AMZN, AMD, and NVDA almost single-handedly held markets up. At the close, SPY was down 0.50%, DIA down 1.32%, and, as noted, QQQ up 0.84%. The VXX also climbed a bit to 33.06 and T2122 (4-week New High/Low Ratio) edged closer to overbought territory at 73.75. 10-year bond yields fell sharply to 0.607% as money chased bond safety. And Oil (WTI) also sold off to $39.48/barrel.
Treasury Sec. Mnuchin told CNBC Thursday that the White House will not back the kind of sweeping coronavirus relief they supported before. Instead he said they would only accept a smaller, narrower package. As often happens in the Administration, this seems to be at odds with the President’s own words from a week ago (when he said he wanted to give away more money than the Democrats, but just “to do it right”). However, it does line up with consistent statements out of Senate Republicans. Either way, Congress will return in just under two weeks to resume negotiations and votes.
In other political-market news, Democratic Presidential nominee Biden laid out his “Moderate plans for an economic recovery.” Among other things, he said that “(the wealthy investor class) don’t need me.” The plans he announced include the raising of corporate tax rates to 28% (the mid-point between prior corporate rates and the current 21% rate President Trump pushed through.)
In the US, the virus numbers show we now have 3,220,559 confirmed cases and 135,828 deaths. This includes another record of over 62,000 new cases reported nationally. A dozen states reported a record-high number of new cases Thursday. Among them, CA, FL, and TX all reported record virus-related deaths on the day. In FL, Miami-Dade County recorded a 33% positive result rate on all tests processed Thursday. Meanwhile, Dr. Fauci (NIH) told the Wall Street Journal “any state that is having a serious problem, that state should seriously look at shutting down.”
Globally, the number of cases has reached 12,420,723 confirmed cases and 558,091 deaths. In a huge case of stating the obvious, the W.H.O. reported “the pandemic is getting worse” on a day when the world reported a record number of new cases (227,000). Among the countries reporting record-high new case counts were the US and Mexico, both of which reported a daily record in both cases. However, even though Brazil did not report a record number of new cases, Mexican numbers still pale in comparison to Brazil who reported almost 43,000 new cases and over 1,200 deaths on the day.
Overnight, Asian markets were red across the board with the lone minor exception of Malaysia. In Europe, markets are mixed, but mainly green at this point in the day. The big 3 bourses (FTSE, DAX, CAC) are all up half a percent. As of 7:30am, US futures are all pointing to a modestly lower open.
The only major economic news for Friday is June Producer Price Index (8:30 am). The only major earnings report for the day are GBX before the open and SJR after the close.
Thursday’s candles were fairly ugly, with a Bearish Engulfing signal in SPY and DIA. However, despite this, a consolidation pattern is all we can point to in those two indices, especially since the mega-cap techs continue to pull the entire market higher. Are the QQQ extended? Absolutely. However, that doesn’t mean they must reverse today.
Keep an eye on those “canary in the coalmine” FAANG stocks. If they break, so will the market. If they maintain their rally, there is nothing the rest of the bears can do to fight their momentum. So, keep an eye on the short-term chart and don’t chase, don’t predict, and take profits as you go. Also, remember its payday. Take some profits off the table and/or hedge you positions in front of the weekend.
Ed
Daily trade ideas have been moved to the trading room and the Members-Only Phone App. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs 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 the Nasdaq prints, another record high the US also sets a new national record of Covid-19 infections and health officials as calling for a federal policy to curb the spread. While on the surface, the market appears to have absolutely no concerns, yet the VIX remains quite elevated, and the Absolute Breadth Index continues to decline. An interesting dichotomy that could produce a bullish short squeeze or an attack by the bears as recovery concerns mount. Stay focused and flexible as the market grapples with what comes next.
Asian markets continue their bullish run with week lead by China, which rose 1.39%. European markets have seesawed between gains and loss this morning as they cautiously monitor pandemic numbers and the challenging recovery. Ahead of a light day of earnings and another round of jobless claims US futures point to a slightly lower open.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have just 11 companies reporting quarterly results. Notable reports include WBA, BNED, FC, HELE, PSMT, & WDFC.
News and Technical’s
The bulls refuse to lose continuing to buy up the big tech giants with NASDAQ setting another record high lead by AAPL, which also closed the day at a record high. As the market continues to surge, so does the pandemic infections, hitting a new national record of 60,000 new cases reported in a single day. Health officials are calling for a federal policy action to curb the spread of the virus, suggesting another shutdown may be necessary. A new study warns of a potential wave of brain damage as an aftereffect of Covid-19 infections. The research shows patients suffering from temporary brain dysfunction, strokes, nerve damage, or other serious brain effects. A scary thought considering the US is now dealing with more than 3 million that have already been affected by the virus. According to reports, there is already a noticeable pullback in driving activity as people choose to stay home rather than risking infection. United Airlines warns that half of its workforce may be furloughed, suggesting up to 36,000 people could see their jobs cut as recovery hopes fade in the recent weeks. Bed Bath & Beyond announced they would close 200 stores after reporting a sharp sales decline of nearly 50%, and the Pier One said it would not reopen retail stores in their bankruptcy reorganization moving to online sales only.
Technically speaking, the DIA, SPY, and IWM indicate a possible higher low could be forming after yesterday’s rally, yet at the same time struggling with overhead resistance and potentially bearish candle patterns. Adding to the confusion is the fact that the VIX remains elevated, and the Absolute Breadth Index continues to decline. I see the potential for a bullish short squeeze and, at the same time, see the possibility that the bears could soon attack at any time due to growing recovery concerns. It’s also odd to see indexes setting new records while at the same time precious metals continue rally sharply. Ahead of weekly jobless numbers, the futures currently point to a slightly lower open. Stay focused on price action and remain flexible and prepared for just about anything.
Stocks gave us another volatile day, but the bulls came out on top again. All 3 major indices closed at or near the highs as AMZN, AAPL, FB, and MSFT led markets higher with new all-time high closes. However, the large-caps did not eliminate the lower-high possibility. On the day, SPY was up 0.76%, DIA up 0.65%, and QQQ up 1.32%. The VXX sold off a little to 32.55 and T2122 climbed back into the mid-range at 51.65. 10-year bond yields rose to 0.666% and Oil (WTI) also rose slightly to $40.88/barrel.
In the aviation industry, late in Wednesday’s session BA competitor Airbus reported a third straight month of zero plane sales (new orders). Earlier in the day, UAL had warned 36,000 front-line employees (more than a third of their staff) of potential layoffs and furloughs in 60 days (federal law requires that much notice). It was also reported (rumors, not announcement) that the 5 largest airlines had reached a deal with the Treasury Dept. for massive loans. So, aviation names may be worth watching.
After the close, St. Louis Fed President Bullard said in an interview that he is predicting unemployment will fall back to 7% by year-end. (His previous estimate was over 10%.) This came as part of a mostly optimistic outlook that downplayed the problems facing the economy. (This stands in contrast to 3 of his counterparts who emphasized the risks facing the economy on Tuesday.) He also said he expects another major fiscal stimulus bill, giving the economy “plenty of resources.” So, there are diverging opinions of the economy among Fed members, perhaps as should be expected, but all of them are saying that more stimulus is needed and will likely happen. Stocks will like that.
In the US, the virus numbers show we now have 3,159,514 confirmed cases and 134,873 deaths. For Wednesday, the new case count was 58,000 and 820 deaths. CA Governor Newsom said Wednesday that the state has the capacity to treat 50,000 virus patients. (For reference the state now has a 7-day average of over 8,000 new cases/day, though obviously not all cases require hospitalization.) In partially related news, BBBY reported they will close 200 stores over the next 2 years in an effort to get back toward profitability in the Covid-19 era.
Globally, the number of cases has reached 12,196,923 confirmed cases and 552,771 deaths. In Asia, Tokyo reported a record-high number of new cases and Hong Kong also reported a new outbreak (though still not the highest they’ve seen). Australia’s case surge continues and, alarmingly, only a small percentage of new cases have been traced to a known case or location (implying the virus has spread more widely than previously thought).
Overnight, Asian markets were mixed but mostly green with only smaller markets like New Zealand, Singapore, Malaysia and Indonesia in the red. In Europe, markets are even more broadly mixed, but on smaller moves either direction. Among the major European bourses, FTSE is down, DAX is up, and the CAC is flat at this point. As of 7:30am, US futures are also mixed and closer to flat, likely waiting on the Jobless claims to push one way or the other.
The only major economic news for Thursday is Weekly Initial Jobless Claims (8:30 am). The only major earnings report for the day is WBA before the open.
Wednesday’s candles showed once again that the bulls have strength. However, they did not signal a massive rally surge. Instead, it still seems like the bulls have paused to take a breath after last week’s rally. The short-term consolidation remains in place for the large-caps. However, the mega-cap tech names have been pulling markets (especially the QQQ) higher for quite some time. The “canary in the coal mine” is going to be those FAANG stocks. If they break, so will the market. If they maintain their rally, there is nothing the rest of the market can do but follow. So, keep an eye on those tickers and don’t chase, don’t predict, and take profits as you go.
Ed
Daily trade ideas have been moved to the trading room and the Members-Only Phone App. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs we mention and talk about in the trading room are not recommendations to buy or sell.
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🎯 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.
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|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
