Markets gapped down slightly Friday, but after bobbing around for an hour the bulls rallied the entire rest of the day.  This gave us “Morning Star Like” candle signals in all 3 of the major indices.  On the day SPY was up 1.62%, DIA was up 1.34%, and QQQ was up 2.32%.  However, none of the three have broken their downtrend as we saw a fourth straight week of lower closes in the SPY and DIA.  The VXX fell 2.48% to 25.54 and T2122 rose to 18.84, but remains just inside the oversold territory.  10-year bond yields fell slightly to 0.656% and Oil (WTI) fell back to $40.04/barrel.

Sunday Speaker of the House Pelosi said she is making another offer to Treasury Sec. Mnuchin in their negotiations while House Democrats move ahead with plans for a new $2.4 Trillion stimulus bill.  She told reporters that the new offer will be revealed shortly and that there is still a chance for a deal.  However, this seems like quite a mountain to climb with the Senate and White House focused on confirming ACB to the Supreme court and both parties heavily into campaign mode (doing their best to appease the extremes of their 2 bases).

In the ongoing TikTok saga, a Federal Judge blocked President Trump’s ban on TikTok and WeChat as unconstitutional Sunday evening.  However, the judge did not block a broader set of restriction set to go into place November 12 that might effectively make TikTok unusable in the US anyway.  Beyond the legal finding, the two sides to the deal (ORCL – WMT) and Byte Dance continue to argue over the terms of the deal, including ORCL claiming Byte Dance will retain no ownership of the new company, while all along it has been reported Byte Dance would retain 80% ownership.   

On the virus front, in the US, the numbers show we now have 7,321,465 confirmed cases and 209,454 deaths.  As usual, the weekend new case counts were down after seeing 55,000 on Friday.  The 7-day average daily new case count is now at 41,461. Deaths came back atypically low at 276 while the 7-day average number is now 759.  All this comes as FL Gov. Desantis did his Florida Man impression by completely opening the state and dropping restrictions.

Globally, the numbers rose to 33,342,965 confirmed cases and the confirmed deaths passed a grim milestone, now at 1,002,985 deaths.  In the UK, one of the government science advisors has told the press he supports a repeated “mini-lockdown” (14-day) approach as a way to reduce case growth as the UK saw a 60% increase in cases in the last week.  In France, intensive care admissions have more than tripled in the Southern region of the country.  Down under in Australia, an inquiry has found that a “quarantine hotel” failed to do the isolation demanded in May (visitors, including sex workers, having been allowed into the hostel), which led to over 18,000 infections and over 750 deaths in the state of Victoria.

Overnight, Asian markets were mixed, but leaned to the green side.  Japan (+1.32%), South Korea (+1.29%), and Taiwan (+1.88%) paced the gainers. China, Indonesia, and Australia led the losers.  However, in Europe stocks are strongly in the green across the board so far today.  The DAX is up 2.61%, CAC up 1.94%, and FTSE up 1.32%.  At 7:30am, US futures are also pointing to a gap higher at the open.  The QQQ is pointing to a 1.70% gap up, and both large cap indices are implying a 1.31% gap up as markets look to rebound after four straight down weeks and Quarter-end coming in a few days.

The only economic news of note for Monday is a Fed speaker (Mester at 2 pm). The only major earnings reports on the day are THO before the open and UNFI after the close.

The bulls are looking to rally at the open. This could be a response to the oversold conditions after 4 down weeks. Or it might be an attempt at quarter-end window-dressing. In either case, be wary of chasing gaps against the trend. All we can do is either 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.  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: SRNE, PINS, FSLY, GAME. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets gapped down about a half percent Thursday after a worse than expected Weekly Jobless Claims number.  However, the bulls stepped in and rallied markets much of the day.  Then about 2pm markets sold off again taking us back near Wednesdays close before a last-minute rally.  On the day, QQQ was up 0.47%, SPY up 0.28%, and DIA up 0.19% with all 3 leaving large upper wicks.  The VXX fell about 2% to 26.19 and T2122 stayed deeply oversold at 1.50.  10-year bond yields fell to 0.664% and Oil (WTI) rose three-quarters of a percent to $40.22/barrel.

Regardless of your political or economic philosophy, we know markets love “free money” coming from Washington. So, in a follow-up story to the Fed requests for more fiscal stimulus this week, House Speaker Pelosi has instructed her committee chairs to draft another relief package (which will undoubtedly look very similar to the previous package the House passed).  It will include additional enhanced unemployment, direct payments to Americans, small business loans, and aid to the airline industry. The House may vote on this new bill as soon as early next week and the new price tag is said to be $2.4 trillion (which is essentially exactly where the Democrats were when the talks collapsed, but $1 trillion below the last bill the House passed in May).  Last week White House Chief of Staff (and negotiator) Meadows had said the Administration would okay $1.5 trillion.  So, the hope is that this new bill will restart negotiations. However, it remains a longshot as the sides (and even factions on the Republican side) remain far apart.

Following-up to the “TikTok Deal” story (involving ORCL and WMT), things are still unclear.  The Chinese government has not approved the deal, but Byte Dance has applied for a Chinese export license which would allow a partial transfer.  In the US, a Federal Judge has asked the Administration whether it will defer the ban on TikTok and WeChat again or defend their policy in hearings over the weekend.  (No reply yet.)  Meanwhile the President’s claims that ORCL would get full access to all TikTok source code conflicts with Byte Dance’s statements that the new company would buy use of the algorithms, etc. from the Chinese-located parent company, which is where actual processing would occur. And, of course, the President’s claim that Byte Dance would pay $5 billion for an educational project have been denied by Byte Dance.  However, it is known the claim that the board of the new company would all be Americans is false.  The board would include 4 undetermined American Citizens and Chaired by Byte Dance founder Zhang Yiming (with Byte Dance holding 80% of the ownership).   

On the virus front, in the US, the numbers show we now have 7,185,915 confirmed cases and 207,540 deaths.  The daily new case count grew to 45,355, well above the 7-day average of new cases.  Deaths came back to typical numbers at 942 for Thursday, well above the average of 761 per day.

Globally, the numbers rose to 32,454,833 confirmed cases and 988,497 deaths.  As witnessed by the lockdown in Israel, there appears to be a surge in the middle east with Lebanon, UAE, Bahrain.  Oddly, Saudi Arabia, Egypt, and Qatar have all reported dramatic drops in the number of new cases over the last month.  In Europe, the spread continues with Poland, Russia, and the Czech Republic all seeing the highest increase in cases in several months.

Overnight, Asian markets were mixed with India, Australia, and Japan pacing the winners.  China, Taiwan, and Hong Kong paced the losers, though most losses were moderate.  However, stocks are decidedly bearish so far today in Europe.  The DAX is down 1.67%, CAC down 1.76%, and FTSE down 0.57%.  The rest of the bourses are all well into the red as well. At 7:30am, US futures are pointing to another gap down open.  The QQQ is pointing to a modest open 0.30% lower, but the large-cap SPY (-0.63%) and DIA (-0.78%) are implying a bigger gap down as markets are staring into a fourth straight losing week.

The major economic news for Friday is limited to August Durable Goods (8:30 am). There are also no major earnings reports for the day.

The bulls tried to come back on Thursday, but rolled over and gave back ground in the afternoon.  This left us with nothing but an indecisive day in a downtrend.  While this relative pause was expected after a brutal Wednesday, it does nothing to buoy spirits coming into Friday.  The bears continue to smell blood and volatility remains high.  All we can do is either 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.  Keep locking-in profits, because it’s the singles and doubles that add up to championships, not the occasional home runs.  Finally, remember it’s Friday.  So make a conscious decision about what positions and/or hedges you want to carry over the weekend news cycle.

Ed

Swing Trade Ideas for your Consideration and Watchlist: TZA, SDS, SQQQ. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets opened mixed on small gaps, but then the bears took over for an all-day selloff with prices closing near the lows.  The SPY and DIA printed large Bearish Engulfing candles and the QQQ missed only due to a small gap-down open.  In particular, TSLA was hammered (-10.34%) over poor “Battery Day” announcements, but to be fair, all the FAANGM stocks were hit hard.  On the day, DIA was down 1.92%, SPY down 2.32%, and QQQ down 3.05%. The VXX gained over 5% and T2122 fell dramatically deep into the oversold territory at 1.11.  10-year bond yields were flat at 0.674% and Oil (WTI) was only down slightly to $39.55/barrel.

JPM agreed to pay a $1 billion penalty for manipulations (spoofing) of the metals and treasuries markets to end the ongoing investigations by the Commodities Futures Trading Commission and the SEC.  However, the settlement is not expected to result in any business restrictions against JPM.  (Spoofing is the practice of floor traders submitting orders to force prices one direction or the other and then canceling the orders before they are executed.) In either an odd coincidence or a case of PR, within an hour of that announcement, JPM also announced they are spending $1 billion to for a workplace diversity program.

A couple of quick tidbits:

• Fed Chair Powell again urged the Senate to provide more fiscal stimulus. This was more of a case of pleading than the prior day’s testimony before the House.

• In an interesting twist to the trade war, TSLA has sued the US government.  They are demanding an end to tariffs on parts they import from China as well as a refund of the tariffs they have paid since 2019 (plus interest).  They may have a point when companies like AAPL got exemptions after appeals directly to the President.

• IBKR signaled that they expect a big account default risk around the election.  In a message to account holders, they said they are raising Margin Requirements to 67.5% (from 50%) and the Maintenance Requirement to 33.75% (from 25%).  They specifically noted the options prices indicate huge volatility around the election, especially the increased probability of a contested election.

On the virus front, in the US, the numbers show we now have 7,140,137 confirmed cases and 206,598 deaths.  The daily new case count was at 41,616 Wednesday, just above the 7-day average of new cases, which is 41,293 per day (about double where they were when easing began).  Deaths came back to typical numbers at 1,112 for Wednesday, well above the average of 751 per day.  CDC Chief Redfield told the Senate that over 90% of Americans are still susceptible to the virus based on a preliminary study by the CDC.  Meanwhile, 22 states reported rising new case counts.  For his part, President Trump told reporters that he has the right to overrule the FDA and their guidelines for approving the use of any vaccine.  As reported in past weeks, the JNJ vaccine just now starting Phase 3 trials could be a game-changer.  Instead of needed 2-3 doses, it requires only 1 dose, and most importantly it does not need to be stored at 50 degrees below zero like the other candidates in Phase 3.  However, the JNJ Phase 3 trial is just starting and they need 60,000 participants (when it has taken 1-2 months for others to find 30,000-40,000).

Globally, the numbers rose to 32,134,999 confirmed cases and 982,698 deaths.  Israel has significantly tightened its second national lockdown as cases continue to rise.  The new measures call for total lockdown (closed non-essential business and government offices as well as all public spaces) for 2 weeks followed by 2 more weeks of “closure.”  In the UK, the government is mulling a plan to accelerate vaccine trials by deliberately exposing participants to the virus (which would greatly decrease the time it takes to reach statistically significant numbers for the trial).  Oddly, the UK also said that at the peak of the first wave they were seeing 100,000 new cases per day, but are now only seeing 10,000/day.  This is odd because they have reported only 412,000 total cases

Overnight, Asian markets were strongly red across the board.  Japan, China, and South Korea all lost 1.5% – 2.5%.  A similar story is shaping up in Europe, but so far the red is much more modest as of mid-day.   At 7:30 am, US futures are pointing to a flat to a slightly lower open.  Only the QQQ is pointing to more than a 0.15% gap down (at -0.40%) with markets possibly waiting on jobless data for a guide.

The major economic news for Thursday is limited to Initial Jobless Claims (8:30 am), August New Home Sales (10 am) and 3 speakers (Fed Chair Powell at 10 am, Tres. Sec. Mnuchin at 10 am, and FOMC member Williams at 2 pm).  However, there are several earnings reports with CAN, DRI, JBL, KMX, and RAD reporting before the open.  Then after the close COST reports.

The major economic news for Wednesday is limited to September PMI (9:45 am), Oil Inventories (10:30 am), and 3 Fed Speakers (Chair Powell testifies again at 10 am, Mester at 9 am, and Quarles at 2 pm).  However, there are major earnings reports with CTAS, GIS, and JKS before the open. Then FUL reports after the close.

Given Wednesday’s heavy selloff, the fact we are near potential short-term support, and the extreme oversold T2122, it is possible we see a rest day today.  However, the bears do smell blood and the high-flying FAANGM stocks that have dragged markets up for months are showing no signs of life.  Be careful of volatility and remember that you do not have to trade every day.  You won’t miss anything.  There will be another train coming into the station tomorrow.  If you do trade, as always, stick to your plans, follow the trend, and don’t chase moves you have missed.  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: BBBY, SQQQ, SQ, MAS, XRT, URI, NVR. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Tuesday saw just under a one percent gap higher in the QQQ and a half percent gap up in the SPY.  This was followed by intraday fading of the gap followed by the normal volatility up to mid-day. At that point, a rally lasting all afternoon ran all 3 major indices to close near their highs.  This gave us white hammer type candles in all those indices.  On the day, DIA closed up 0.50%, SPY up 1.02%, and QQQ up 1.86%.  VXX also gained slightly to 25.36 and T2122 rose, but still remains in the oversold territory at 14.47.  10-year bond yields were flat at 0.672% and Oil (WTI) rose slightly to $39.55/barrel. All-in-all, not a bad day given the September selloff we have seen so far.

As expected, Fed Chair Powell told Congress more fiscal stimulus is needed in his testimony.  Treasury Sec. Mnuchin agreed, but put in a qualifier on the statement, saying “I believe a targeted package is still needed”  However, Chief Economic Advisor Kudlow told reporters that more stimulus was not needed, but a targeted package could be a great help to a V-shaped recovery.  In an unrelated story, a deal was reached overnight to keep the government open and was passed by the House last night and sent to Senate. The deal includes more funds for school meals and more funds for farm aid.

Bloomberg reported interesting news in the vaccine race.  PFE has said they will do a results analysis as soon as they reach 32 vaccinated but also infected patients (vaccine failures) and expect this to be next week. They will consider any participant who both tests positive and has any symptom to be one of their cases. So, I guess a positive test alone does not count as a vaccine failure.  (32 seems like an awfully small number to draw any conclusions from in a test planned to use 44,000 subjects, but they are looking at failures.)  This will also be the first of four attempts (an unprecedented number apparently) with the last being when they reach 164 cases, to find a good enough ratio to prove efficacy.  This approach gives PFE a leg up on finding a “first proven vaccine” over rivals like MRNA (which won’t take a first peek until they find 53 failure cases on their way to 151 cases) and AZN (which will take its first look at 75 cases on the way to 150 cases).

In addition, apparently none of the current Phase 3 trials will know if their vaccine candidate actually lowers the number of hospitalizations until February.  Yet PFE is said to expect to have reached a conclusion on their candidate sometime in October, based on an extrapolation from a much smaller dataset than the actual whole trial.  This multi-look approach gives PFE an edge on being first to find a “viable vaccine,” which is all the market likely cares about at least initially.  In an unrelated story, the FDA said Tuesday it is tightening the approval standards, which may well slow vaccine emergency use approval.  This seems contrary to the Bloomberg article, but the FDA “tightening” may just be a vaccine acceptance PR tactic.  Additionally, JNJ has said this morning they are also entering Phase 3 trials of their own candidate vaccine with hopes of enrolling 60,000 participants in the weeks and months to come.

On the virus front itself, in the US, the numbers show we now have 7,098,291 confirmed cases and 205,491 deaths.  The daily new case count was down at less than 36,000, but the 7-day average of new cases remains over 41,000 per day.  Deaths came back to a more typical number of 969 after the unexpected drop on Monday.  However, that drop did pull down the average deaths to 735/day.  The President said Tuesday that the US will remain open regardless of the new measures underway in Europe or the UK. 

Globally, the numbers rose to 31,824,908 confirmed cases and 976,155 deaths.  So, the globe is seeing about 300,000 newly reported cases and 6,000 reported deaths per day.  As expected, the UK re-entered a partial national lockdown Tuesday.  UK PM Johnson urged workers to work from home if at all possible, reduced pub/restaurant hours, reduced permissible gathering sizes, etc. However, he stopped short of an actual 14-day national lockdown that some advisors were urging.

Overnight, Asian markets were mixed on moderate moves with the obvious exception of Australia which was up almost 2.5%.  Japan, South Korea, and Shanghai were just on the green side of break-even while Japan was on the red side of flat.  Taiwan was down half a percent.  However, in Europe we are seeing green across the board so far today on significant moves.  The FTSE is up 2.3%, DAX up 1.65%, and CAC up 1.9% at midday.  As of 7:30am, US futures are pointing higher.  The QQQ is lagging with an implied open up 0.2%, but the SPY is looking toward a 0.4% gap up and the DIA 0.8% higher open. 

The major economic news for Wednesday is limited to September PMI (9:45 am), Oil Inventories (10:30 am), and 3 Fed Speakers (Chair Powell testifies again at 10 am, Mester at 9 am, and Quarles at 2 pm).  However, there are major earnings reports with CTAS, GIS, and JKS before the open. Then FUL reports after the close.

The strong close Tuesday and apparent gap coming this morning certainly look like the rebound is in play. Remember that we still have a number of potential resistance levels above, but price gets the only vote that counts (especially in the short term). Continue to be wary of volatility and keep in mind that the trend still remains bearish. So, be careful chasing unless you are fast or can take the heat. However, it looks like a bulish morning. Stick to your rules, keep locking-in profits, and remember trading is a job for the long-haul…not a get rich quick scheme. 

Ed

Swing Trade Ideas for your Consideration and Watchlist: DG, PENN, DHI, CZR, FSLY. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Monday saw a brutal gap down on virus concerns, another big bank scandal, and the political news related to the replacement (or not) of Justice Bader-Ginsberg.  Volatility continued all day with a later afternoon rally driving price back up into the gap.  The result as a strong white candle (if you look past the gap down) in the QQQ, but big indecision in the DIA and a white Hammer in the SPY.  On the day, QQQ gained 0.24%, SPY lost 1.04%, and DIA lost 1.84%.  Oddly, VXX did not shoot higher, rising only to 25.16, but T2122 sank clear to the bottom of the oversold range at 2.28.  10-year bond yields fell to 0.672% and Oil (WTI) also fell 3.5% to $39.65/barrel.

During the day House Speaker Pelosi proposed the Democratic bill for additional stopgap funding to keep the government running past the September 30 deadline.  However, Senate Majority Leader McConnell immediately criticized the bill because it did not contain the additional money for farm aid that the President wanted added.  To be fair, many things were not in the bill, including extra funding for the Democrat favorite food assistance program.  It was not mentioned, but another fundamental difference between the sides is that Republicans want the bill to include funding through January 2021 (when the next Congress is seated) while Democrats want funding only through the election.  In this case, the Democratic bill offered a compromise of funding through December 20.

In the pre-release of Fed Chair Powell’s testimony for today he says “Many economic indicators show economic indicators show marked improvement…Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain,”  He goes on to push for more virus control and stimulus as he also says “The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government.”  Both he and Treasury Sec. Mnuchin are likely to face questions on the massively unused Fed Main Street Loan program (which stimulus legislation cannot be forgiven) as opposed to the PPP loan program many expect to be forgiven.

On the virus front, in the US, the numbers show we now have 7,046,444 confirmed cases and 204,515 deaths.  The 7-day average of new cases is rising again, now over 41,000 per day.  However, deaths dropped dramatically for some unknown reason to just 388 on Monday.  This dropped the average to just under 800/day.  Republicans in the Senate proposed $28 billion in aid for the airline industry ($3 billion more than asked) in an attempt to stave off 30,000 job cuts now planned in two weeks.  This is likely a DOA proposal since the two parties have not agreed to an overall stimulus plan.

Globally, the numbers rose to 31,517,736 confirmed cases and 970,077 deaths.  In the UK, there were ominous signs Monday.  The country’s 2 top scientists addressed a presser where they said the UK is back to 10,000 new cases per day in a growth rate that may send them to 50,000/day by mid-October unless the spread is arrested (implied as a new national lock-down).  The government then raised the alert level to 4 (transmission if high or rising exponentially).  Level 5 is another national lockdown.  PM Johnson is set to address an emergency meeting, Parliament, and the Public Tuesday where many expect additional measures to be announced.  (JPM says that if another 2-week lockdown were to happen, it would knock another 2% off the UK’s 2020 GDP.)  Elsewhere in Europe, Spain has reentered partial national lockdown (and full lockdown in Madrid) and France cases continue to spike in various cities

Overnight, Asian markets were mostly in the red again.  Japan eked out a small gain while New Zealand and Malaysia managed slightly better, but still modest gains.  However, China, Taiwan, and Hong Kong were all down over 1% and South Korea lost 2.4% on the day.  In Europe, the picture is brighter as we find modest green numbers across the board as of mid-day. Again today, the DAX leads the way, up just under 1% so far.  As of 7:30 am, US futures are mixed.  The Large-Caps are on either side of flat, but the NASDAQ is pointing to a half-percent gap higher at the open.

The major economic news for Tuesday is limited to August Existing Home Sales (10 am) and, as mentioned, Fed Chair Powell testifies (10:30 am).  On the earnings front, the only major announcements scheduled are AZO before the open and KBH and NKE after the close.

Markets may be looking to bounce back from Monday’s ugly start to the week. Possibly Fed Chair Powell’s soothing talk of “more stimulus as long as it’s needed” will do the trick. However, no more progress on the fiscal stimulus side and political rancor will not help. News of the expansion of virus-fighting measures in the UK (and the rest of Europe) is also going to be a damper.

Remember that we’ve seen “gap and fade” or “gap and indecision” for some time. So, be careful chasing unless you are fast or can take the heat. Follow the trend, which is clearly bearish now, don’t think you can pick bottoms, but also don’t chase moves that have gotten away. Stick to your rules, keep locking-in profits, and remember trading is a job for the long-haul…not a get rich quick scheme. 

Ed

Swing Trade Ideas for your Consideration and Watchlist: PENN, NVTA, DDOG, FDX, PGR, LH, TGT, CZR, WHR, DGX, FSLY. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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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.

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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