The market continued its roller-coaster ride of wild volatility, rising sharply in hopes of more government stimulus on the way as the coronavirus spread to more than 44,000 people yesterday. Several states have once again closed bars and fitness facilities as the WHO warns that the worst is yet to come in the world war against the pandemic. Overnight China defiantly passes the so-called national security law for Hong Kong and threatened retaliation for any actions brought against them. What that means in the weeks and months ahead is anyone’s guess.
Asian markets rallied overnight as their June PMI beat expectations. European markets trade mixed in a whipsaw session as they react to Chinese data and the WHO pandemic warning. US Futures appear to be struggling for the inspiration to follow-through yesterday’s bullishness pointing to a flat open ahead of a big day of Fed speak that includes Jerome Powell.
Economic Calendar
Earnings Calendar
On the Tuesday Earnings Calendar, we have just 15 companies stepping up to report on this last day of the 2nd quarter. Notable reports include FDX, AYI, CAG & SCS.
Technically Speaking
The market overlooked rising coronavirus and rallied sharply, mainly on the hope there will be more governmental stimulus on the way. Yesterday, we saw an increase of 44,734 new cases of the virus reported in the US. According to the reports, China has discovered a new strain of the coronavirus, and the WHO warns the worst is yet to come. Shell has announced that it will take a massive write-down up to 22 billion as a result of COVID impacts on the industry. Wells Fargo said it would cut dividends after the Fed stress tests, but JPMorgan, Citi, and Goldman stated they would matain dividends in the coming quarter. During the night, China passed what they called a Hong Kong national security law for Hong Kong that has drawn criticism from around the world. When asked about possible repercussions, Chinese officials defiantly stated they would retaliate against any actions or sanctions brought against them. Boeing had its first successful test flight of the 737 Max yesterday as they pursue recertification of the aircraft after the deadly crashes that grounded them more than a year ago.
Although the Dow rose 580 points by the close yesterday holding on to its 50-day average, the index continues to remain in a short-term downtrend. The SPY printed and Piercing Candle Pattern holding its 200-day average while the IWM did much better breaking the high of Friday’s big selloff. As wonderful as that may seem on the surface, the SPY and IWM technically remain in short-term downtrends with the Absolute Breadth Index pulling back yesterday. A big part of yesterday’s rally likely was nothing more than short-covering. On the last trading day of the quarter, anything is possible, but as of now, the futures seem to be struggling for the inspiration to follow-through on the bullishness for a second day, suggesting a flat open.
Monday saw a half percent gap higher on higher than expected Pending Home Sales, but the gap was met with an immediate selloff back below flat. Then the bulls stepped in to take markets sharply higher into 11am. After that a meandering, volatile grind sideways took over for the next few hours until there was another sharp rally the last 10 minutes of the day, causing all 3 major indices to close very near the highs. At the close, the SPY was up 1.50%, the DIA up 2.29%, and the QQQ up 1.09%. The VXX fell back to 35.68 and T2122 returned to the mid-range at 52.31. 10-year bond yields fell slightly to 0.635% and Oil (WTI) climbed back up to $39.63/barrel.
In the social media boycott story, CAG, CLX, DENN, EPC, F, HP, and MSFT all joined the boycott of FB advertising on Monday. While this list now includes many (most?) major brands, it is worth noting that these were never among the top FB advertisers anyway. So, the actual dollar impact of this boycott is limited.
After-hours it was reported the BAC, C, GS, JPM, and MS will keep their dividends for the quarter at the same level as before last week’s stress test. However, WFC will cut its dividend based on the new Fed requirements. No word yet on COF or USB (the 2 other major banks) dividends.
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Last night, Fed Chair Powell’s Tuesday House Testimony test was also leaked. In it, he says the recovery path is “extraordinarily uncertain” and will depend on the success of measures to contain the virus surge. Powell is also expected to again urge Congress to continue Fiscal stimulus measures. In unrelated news, the Fed also announced that its last (9th) virus lending program is now operational. The Primary Market Corporate Credit Facility will allow corporations to borrow at a much lower rate than the open market.
However, the main story remains the virus. In the US, the count shows we have now had 2,682,011 confirmed cases and 128,788 deaths nationally. This includes 31 states with increasing rates on the 7-day average (10 of those being 50% worse than last week), with only 4 having decreasing averages. 14 states have paused their reopening with some even rolling back the process. Ominously, CDC Deputy Dir. Schuchat told the Journal of the American Medical Assoc. that the US has reached the point where there are way too many cases and spread too widely to control the outbreak (as has been done in other countries who used stricter measures and had more compliant populations).
Globally, the number of cases has topped 10 million, at 10,433,289 confirmed and 508,804 deaths. In the UK, Leicester (330k residents) became the first city in the country to reimpose a lockdown. In addition, the EU left the US off the “safe list” meaning that travelers from the US to Europe will still be required to quarantine for 14 days upon arrival. In China, the Manufacturing PMI came in better than expected (into the expansion area). However, a new strain of flu (a variation of swine flu) was also discovered that is widespread among pork populations. This new virus has the characteristics to become another pandemic if not controlled.
Overnight, Asian markets were volatile, but green across the board, on news out of China. In Europe, markets are mixed and volatile, but leaning toward the red side overall. However, again these are smaller moves as the bourses stay close to flat. As of 7:30 am, US futures are all red, but only slightly on the down side of flat.
The major economic news for Tuesday is limited to June Chicago PMI (9:45 am) and Conf. Board Consumer Confidence (10 am). However, there are 4 Fed speakers, including the previously mentioned Chair Powell House Testimony (12:30 pm). The others are Williams (11 am), Brainard (11 am), and Kashkari (2 pm). The only major earnings reports on the day are AYI and CAG before the open and FDX after the close.
Once again, it looks like a volatile day for markets. We face fear from the coronavirus, Joe Biden saying he would roll-back tax cuts, and even a new potential viral threat from swine. On the plus side, the Fed is likely tell us they stand ready and there are even signs of China’s economy expanding. Today is also quarter-end. So, we may see window-dressing or rotation. Keep your focus on the short-term chart and right now that chart says the trend remains bearish with potential support below. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops 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.
🎯 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 strong selling on Friday, the DIA tested and held its 50-day moving average by the close of the day with the SPY, IWM, and QQQ remaining safely above this crucial psychological support. As we head into a short week of trading, the VIX remains quite elevated, so expect the wild price volatility to continue, and the pandemic surge raises reopening uncertainty.
Asian markets closed down overnight with the NIKKEI dropping more than 2 % as the coronavirus death toll tops 500,000 worldwide. However, the European markets are cautiously bullish this morning seeing modest gains this morning. US futures opened trading lower but have recovered and pointed to a mixed but modestly optimistic open amid all the economic uncertainty.
Economic Calendar
Earnings Calendar
With just 2-days to the end of the 2nd quarter according to the earnings calendar, we have about 50 companies reporting, but only the report from MU is particularly notable today.
Technically Speaking
As the summer temperatures rise, so does the spread of the coronavirus hitting new record highs. Several states are rolling back reopening plans and closing large gathering places such as many of the beaches in Florida. Although testing has only gone up by 7 to 10 percent, Arizona has seen an infection surge of 260% in June. Chesapeake Energy has filed for bankruptcy, and Boeing is laying off 12,000 people as the virus continues to impact the airline industry. Health and Human Services Secretary Alex Azar warned on Sunday that the time is running our for the US to curb the surge of the pandemic across the country. Speaker of the House, Nancy Pelosi, asked health officials to make it mandate the wearing of masks across the country.
The heavy selling on Friday tested the daily 50-moving average of the DIA as support, and by the close, the bull managed to hold onto this crucial psychological support. Financial stocks suffered as well on Friday after the Fed required the backs to freeze buyback programs and cap dividends. Futures opened Sunday evening gapping down but have recovered to pointing to a modest gap up open, Although putting on a brave face for today’s open remember the DIA, SPY, and IWM remain in a short-term downtrend and with the VIX elevated expect very volatile price action for the short trading week ahead.
After a small gap down Friday, TX began to rollback its reopening and FL did the same later in the day. That was all the Bears needed to crush the bulls during the session. All 3 major indices put in large black candles and closed near the lows. At the close, SPY was down 2.38%, DIA down 2.74%, and QQQ down 2.36%. The VXX rose to 37.60 and the T2122 (4-week Avg. High-Low Ratio) fell back deep into oversold territory at 6.31. The 10-year bond yield fell to 0.641% and Oil (WTI) was off to $38.20/barrel.
On Sunday, HHS Sec Azar said “the window is closing” for the US to get virus spread under control and “we have to act.” This comes as many states began rolling-back or postponing their reopening measures. This may be a signal for possible rotation from “reopening stocks” (like travel, restaurant, and retail names) back toward “stay home stocks” (like ecommerce, grocery, online services).
Another major story is advertisers taking a stand by stopping their advertising spend on social media over that channel’s failure to reign in hate speech and disinformation on their platforms. On Friday, UL was the big name. After-hours, KO joined the effort, then DEO and SBUX added their names to 160 other major advertisers that are taking part in the boycott on Saturday. In addition to the 160, other major advertisers such as PG are still reviewing their advertising channels “to ensure content accuracy and respect to all people.” So, FB and TWTR stocks were hammered on Friday and that news did not improve over the weekend.
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On Sunday, China announced May Industrial Production numbers. These showed that profits rose 6% year-on-year, to $82 billion for the month. This was the first monthly profit China’s Industrial Sector has seen since November and was a vast improvement over April’s 4% year-on-year decline. This is evidence that China’s economy is now rebounding as cost remains under control and output has reached profitable levels. Analysts still expect Chinese government economic policy to remain supportive for some time. However, the profit is a good sign that the second-largest economy is starting to come out of the trough.
However, the main story remains the virus, especially in the US. The count shows we have now had 2,637,180 confirmed cases and 128,438 deaths nationally. 36 states have daily new case rates that rose more than 10% (12 of those rose more than 50%) from the prior week. Only 2 states had falling new case rates. However, economic activity such as driving/public transport use, hotel occupancy, and restaurant bookings all continue to increase nationally.
Globally, the number of cases topped 10 million, with 10,272,143 confirmed cases and 504,965 deaths. While it is Brazil, Peru, and Chile that are the South American countries with the most rampant outbreaks. However, it was Argentina that reinstituted lockdown in the capital Buenos Aires amidst exponential growth in new cases. In the UK, the city of Leicester (midlands) is publicly debating going back into lockdown due to a spike in cases in the city.
The only major economic news for Monday is May Pending Home Sales (10 am). Major earnings reports for the day are limited to MU after the close. However, also of note is that CHK (the poster boy for Shale Oil producers) filed for bankruptcy Sunday and expects that move to wipe out $7 billion in debt. It is unclear if this reads-through to other shale producers since the price has been back at levels (near $40/barrel) that are purportedly profitable for many of them. One last item is that BA is reportedly starting its 3-days of recertification test flights for the FAA.
It’s looking like a volatile day for markets as the fear of another shutdown looms and bullish views of a recovery fight it out. However, remain wary of the potential for profit-taking or rebalancing as the quarter ends Tuesday and many funds will be making this a short week, if they come into the trading room at all. Keep your focus on the short-term chart and right now that chart says the trend is bearish with potential support in the large-caps now at hand. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops 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.
🎯 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
Texas and Florida delay reopening plans, and the number of COVID cases surge to new records. Banks had a good day yesterday with a discussion of suspending provisions of Volker Rule, but after the close, the Fed put restrictions on banks after conducting stress tests. Disney announced an indefinite closure of its theme parks, and Apple said it will close more stores in response to the rising infection rates. As we slide into the weekend, the continued uncertainty is very visible in the elevated VIX.
Asian markets closed the week mixed but mostly higher with only Hong Kong closing in the red. This morning European markets are bullish with their indexes up more than 1.50%. After a choppy overnight session, US Futures point to a flat to open, heading into the uncertainty of the weekend.
Economic Calendar
Earnings Calendar
As we wind down 2nd quarter earnings, we have just 14 companies reporting on this Friday. Notable reports include JRJC and FIZZ.
Technically Speaking
Another choppy day as the market dealt with virus concerns and unemployment coming in stronger than expected. During the day, both Texas and Florida suspended their reopening plans after hitting new record-high infection rates. Across the nation, new cases topped 40,000 yesterday with the death toll reaching 125,000. Disney announced they would suspend the reopening of their amusement parks indefinitely, and Apple will close more stores in response to the rising infection rates. Banks rose sharply yesterday on the news that the government may ease or remove some of the provisions of the Volker Rule. After stress testing, the banks are now required to cap dividend payments as well as end all stock repurchase programs until September. Nike reported that sales declined 38% last quarter, and the stock is indicated to open only slightly lower this morning.
We had a volatile overnight future as the market responded to the bank stress test results, but in the standard fashion of late, they have rebounded this morning pointing to flat to slightly bullish open. It seems that any and all negative economic news only inspires the bulls to buy. Perhaps, we are experiencing the end of quarter window dressing, but with the QQQ having rallied 50% from the March lows, I wonder how much longer this ravenous bull run can continue. The DIA, SPY, and IWM continue to cling to their longer-term up-trends, but the current short-term downtrend and the elevated VIX indicates and underlying stress that could bring the bears out of hiding next quarter. Of course, all of this could change if the Fed puts their printing pressed into overdrive, and Congress offers up more stimulus. Consider your risk carefully as we head into the weekend.
After a small gap down (on higher than expected Initial Jobless Claims), the bulls stepped in Thursday and rallied for the day. The downtrend remains in place, but it was a nice white candle (closing near the highs) in all 3 major indices. The SPY closed up 1.07%, the DIA up 1.10%, and QQQ up 0.95%. VXX fell back to 35.39and T2122 climbed out of oversold territory to 29.25. 10-year bond yields fell slightly to 0.682% and Oil (WTI) climbed back to $39.08/barrel.
The financials led the market higher on Thursday as traders hoped that another announced decrease in bank regulation would lead to more profits. However, after-hours, the Fed told the big banks that they must suspend buybacks and cap dividends at current levels for at least the 3rd quarter. This came after the Fed reported that the annual stress test found some banks would be dangerously close to the minimum capital levels needed because of the coronavirus. Banks will also be required to resubmit their loan payout plan every quarter in additional scrutiny caused by Fed concern of potential loan defaults.
The other major story on the day was the virus, especially in the US. The count shows we now have had 2,504,676 confirmed cases and 126,785 deaths. The national 7-day avg. of new cases is the highest it has been at over 31,100 per day (a 34% increase in the average from a week ago). In TX, the outbreak caused Gov. Abbott to announce the halting of the state’s reopening. In FL, Gov. DeSantis also said “the state now has no plans” for continuing its reopening. Out in CA, Gov. Newsom had to declare a budget emergency so that the state could shift more funds into testing, PPE, and medical equipment. Overall, 30 states reported an increase in the number of new cases, 12 had a new high daily case count and 16 states had rising virus hospitalizations.
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Globally, the headline numbers are 9,738,374 confirmed cases and 492,390 deaths. Brazil remains the world epicenter as it reported over 39,000 new cases Thursday. Peru also had another record high case count. Further North, Mexico also is seeing a surge in infections, including the Finance Minister who tested positive two days after a video showed him standing right next to their President and the other cabinet members.
Overnight, Asian markets were mostly green. Hong Kong was the only exception as the HSI lost almost a percent. In Europe, markets are also green across the board so far. The 3 major bourses are all up over 1.25% halfway through their day. As of 7:30 am, US futures are mixed, with the big 3 indices just on either side of flat.
The major economic news for Friday includes May Personal Spending (8:30 am) and Michigan Consumer Sentiment (10 am). There are no major earnings reports on the day. However, it was reported early that mortgage bailout requests rose this last week, now accounting for 8.8% of all mortgages in trouble.
It’s still early, but it is looking like markets want to drift higher toward the weekend. However, be wary of the potential for profit-taking as the quarter winds down and of the weekend news cycle (again likely to be dominated by bad virus news). Also remember this is payday, so lock-in some profit if you can. Focus on the short-term chart in front of you and be ready for the whipsaw that has been the rule for some time. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops 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.
🎯 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 spike in COVID-19 numbers and the prospect of a Biden presidency brought out the bears yesterday as we wind down what has proved to be a remarkable 2nd quarter. Some huge uncertainties lye ahead as several southern states reports new record infection levels. AAPL announced it is closing several more stores in response as Texas nears COVID related ICU capacity. Facing a big day of economic data, the futures point to a modestly lower open as the VIX looks to another day of significant volatility.
Asian markets closed mixed but mostly lower overnight as the IMF slashes economic forecasts. European markets trade mixed but lean slightly bullish this morning as Wirecard files for bankruptcy. Here in the US, with a big data dump, futures point to declines, but I would not expect the bulls to give up easily. Prepare for the considerable price volatility to continue.
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have the largest day this week, with 26 companies stepping up to report. Notable reports include DRI, FDS, MKC, RAD & NKE.
Technically Speaking
The bears made a big appearance yesterday with the Dow selling-off 710 points in reaction to rising coronavirus cases. Yesterday they reported more than 35,000, but this morning CNBC is reporting the daily spike above 45,000, which would be a new single-day record. According to reports, infection rates have increased by 30%, while testing has only increased by 7%. New York and several other states are requiring travelers from hot spot states to quarantine for 14 days, and Europe is considering restricting travel from the US. AAPL announce it is closing more stores in Texas as the state nears ICU capacity. New polls indicate that Joe Biden has taken a big lead in the Presidential race, and some are suggesting that the market could see more weakness ahead as a result. A resurgence of the pandemic, widespread public unrest, and a presidential election is likely to keep the market on edge and volatility high for the next several months making 2020 one for the record books.
The DIA, SPY, and IWM created a lower high on Tuesday and lower low yesterday, leaving behind bearish evening star patterns. The QQQ also printed and evening star pattern but closed the day above recent support and continues to remain above its trend. I don’t expect the bulls to give up easily, and unless we see enough selling in the QQQ to break the uptrend, the big five tech giants can continue to hold up the indexes. If significant profit-taking begins in AAPL, MSFT, GOOG, FB & AMZN as the 2nd quarter winds down, we could face a very different market in the weeks and months ahead. Facing a big day of economic data and rising pandemic uncertainty, anything is possible, and we should plan for substantial volatility as we head toward the weekend.
The bears roared on Wednesday with virus resurgence fears leading to large Evening Star type patterns after the day’s big black candles. A 0.70% gap down led to a strong selloff that lasted all morning. The afternoon saw a choppy sideways grind the rest of the day. For the day SPY lost 2.51%, DIA lost 2.63%, and even QQQ lost 2.06% after the big tech names finally gave up about 10:30am. If there was any good news for the bulls, it was that all 3 major indices closed up off the lows. However, that isn’t much. The VXX rose to 36.72 and T2122 fell dramatically to 2.37 (far into oversold territory). The 10-year bond yield fell slightly to 0.679% and Oil (WTI) fell almost 6% to $38.01/barrel.
During the day, perhaps in an attempt to buoy markets, it was reported that the Fed had agreed to loan $2.3 Trillion, but so far had only loaned $143 Billion. So, at least in theory, the Fed has 94% of its powder dry on the loan front. In other Washington news, for the second time this week Treasury Sec. Mnuchin told a reporter he may consider extending the 2019 Income Tax filing deadline. This time the potential extension would be to September 15 (from the current deadline of July 15). However, as in the Monday interview, he said “as of now, we’re not intending to do it…but we may consider it.”
However, by far the biggest story on the day was the resurgence of the virus. The global headline numbers are 9,555,804 confirmed cases and 485,573 deaths. The WHO said that the peak has not yet been reached in the Americas with more than a million new cases in the last week. However, Europe (with the exception of Germany) continues its easing and reopening. For example, many tourist attractions opened across France today.
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In the US, we now have had 2,462,713 confirmed cases and 124,282 deaths. The count made Wednesday as the worst number of cases we have seen so far, with 45,557 new confirmed cases in the country. CA (7,149), FL (5,511), TX (5,489) were the worst-hit states, but there were 26 states seeing an increase in new cases on the day and 30 that saw at least a 5% increase in their 7-day average of new cases, while 4 more states with an average rising less than 5%. There was also a rise in virus hospitalizations across 14 states. In related news, the early epicenters (NY, NJ, CT) have now imposed a 14-day quarantine on travelers coming from states with the highest infection rates (AL, AR, AZ, FL, NC, SC, TX, UT, WA).
Overnight, Asian markets were mostly significantly red. However, China stayed just on the green side of flat and Taiwan gained 0.42%. In Europe, markets are mixed so far with Germany and France green, while the UK is in the red. There is a similar mix across the smaller markets. As of 7:30 am, US futures are leaning toward the red side with large-caps pointing toward a gap lower of about 0.4% and the NASDAQ just on the red side of flat.
The major economic news for Thursday includes May Durable Goods, Q1 GDP, May Retail Inventories, May Trade Balance, and Initial Jobless Claims (all at 8:30 am). There are also 3 Fed speakers Kaplan (9:30 am), Bostic (11 am), and Mester (12 pm). Major earning s reports for the day include ACN, DRI, MKC, RAD, and WOR before the open. After the close, NKE and SNX report.
It’s early, but it looks like markets are continuing to fear the virus more than they expect a V-shaped recovery. Remember this is not par for the course as the Bulls have ignored the virus and all bad news for some time. So, a reversal of mood could happen a the drop of a hat. Also, keep in mind that economic news may carry a bigger stick in this environment. Finally, we have Quarter-end rebalancing coming. So, it is possible that fund profit-takers and rebalancers cause a rotation. Keep watching the short-term chart and be ready for the whipsaw that has been the norm. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops 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.
🎯 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 new record in the QQQ on the morning gap, but all the indexes struggled to find follow-through buyers with declining breadth as prices failed to break above the bearish engulfing candles left behind last Friday. As the tech sector led rally prints, all-time highs coronavirus infections have spiked 30% over the previous seven days, according to reports. The Whitehouse health advisor warned yesterday day afternoon if this trend continues, a full shutdown of infected states to combat the spread may be required. A disturbing thought considering the fragile condition of businesses and historic unemployment.
Asian market closed mixed but mostly modestly lower overnight. European markets spooked by the rapidly rising virus infections around the world are decidedly bearish this morning seeing red across the board. Ahead of alight day on the earnings and economic calendar, US Futures point to a bearish open and more price volatility ahead.
Economic Calendar
Earnings Calendar
On the Hump Day earnings calendar, we have just 11 companies reporting quarterly results. Somewhat notable reports include BB and WGO.
Technically Speaking
A day after the Nasdaq gapped up to notch a new record high, the market struggled to find willing buyers to follow through. By the close, the DIA and IWM failed to rise above the Friday selloff candle while remaining under their 200-day average. While well above its 200-day average, the SPY tried hard to break above Friday’s bearish engulfing candle, but by the end of trading Tuesday, the bulls failed to breakthrough. The QQQ left behind a possible reversal pattern with a shooting star that could become an abandoned baby reversal if the index gaps lower at the open. The Absolute Breadth Index continued to show that yesterday’s rally lacked buyer’s momentum with the big internet techs garnering the vast majority of the attention. While the market has chosen to ignore pandemic numbers according to reports, the number of infections has risen 30% in the last 7-days. The Whitehouse public health adviser suggested yesterday if this trend continues, a total shutdown of an effected state may be required to combat the spread. Let’s hope that does not occur!
Ahead of a light day of earnings and economic reports, the market may be more sensitive to the news cycle that this morning seems to be heavily laden with COVID related stories. Weekly homebuyer mortgage demand slipped slightly in today’s reading but remained 18% higher than last year. As the 2nd quarter winds down after achieving a history-making rally, we can expect considerable volatility in the days ahead. A rotation into income securities and safety plays may be underway with a noticeable increase in precious metals. Although it sold off on yesterday’s gap up, the price action in the VIX-X continues to suggest considerable uncertainty closing above 31 as the Tech Sector hit new records. A small but noticeable clue that price action could remain very challenging in the day ahead.
Markets gapped up just under a percent on Tuesday and then proceeded to chop sideways until reaching the highs at 2pm. From there we saw a steady selloff into the close. For the day, SPY was up 0.44%, DIA up 0.45%, and QQQ up 0.85%. However, none of the index candles looked particularly bullish at the close. The large-caps both had black bodies and the QQQ put in a Shooting Star type candle. VXX was down again to 34.45 and T2122 fell back to mid-range at 55.32. The 10-year bond yield rose slightly to 0.713% and Oil (WTI) fell to $40.24/barrel. However, the story of the day was that AAPL and AMZN (and FB to a lesser extent) held markets up, particularly the QQQ by themselves for most of the day. All 3 companies printed record-high closes on the day.
During the day, President Trump told reporters Tuesday that he is open to more stimulus, specifically more checks for individuals. Treasury Sec. Mnuchin also said he hoped Congress would pass such a plan by the end of July. Senate Republicans have opposed such plans to this point. However, the Administration backing may change their political calculus on this issue.
On the Virus front, the global headline numbers are 9,381,389 confirmed cases and 480,401 deaths. The German meat-packing plant outbreak has expanded past 1,500 cases and another such plant has found 23 cases so far. The government has been quick to lockdown a second district of the country. However, the UK is headed the other direction, announcing broad reopening and even a reduction of social-distancing distance to 1 meter to help restaurants and pubs increase capacity, all to begin July 4. Ironically, the EU is now debating a measure to ban travelers from the US even as its countries open more. They are citing the haphazard rules and response in the US as the cause for concern. In Asia, Tokyo’s Governor said they found a new workplace cluster and are now expecting “quite a large number” of new cases as test results come back.
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In the US, we now have had 2,424,493 confirmed cases and 123,476 deaths. 25 of the states saw an increase in the rate of new cases with a national total of 35,600 new cases on the day. CA, TX, FL, and AZ all saw a record number of new cases. TX Gov. Abbott told state residents “the safest place for you is at home.” Meanwhile, FL saw more areas make masks mandatory. However, it is worth noting that even though both the R-naught (spread rate) and hospitalizations are rising in lock-step with new cases, the national daily death rate trend (which lags) continues to fall. So, as mentioned, reopening continues with examples like NY, which has reopened its beaches ahead of the July 4 holiday.
Overnight, Asian markets were mixed and generally closer to flat. The exceptions were South Korea with a 1.42% gain, New Zealand with a 1.15% gain, and India with a 1.58% loss. In Europe, we see red across the board as virus resurgence has sparked fear. The big 3 bourses (CAC, DAX, and FTSE) are all down about 2% so far today. As of 7:30 am, US futures are pointing to a gap lower of about 0.8% in the large-caps and 0.4% in the QQQ.
The only major economic news for Wednesday is Crude Oil Inventories (10:30 am) and an FOMC Speaker (Bullard at 3 pm). It might be worth noting that Bullard is an opponent of the idea (reported under strong consideration) of the Fed pinning bond interest rates by buying/selling whatever it takes to keep rates at a target. The only major earnings reports on the day are PDCO and WGO before the open and FUL and KBH after the close.
It’s early, but it looks like markets (at least the large-caps) are having trouble getting through resistance at recent highs. This morning we look to be following Europe on the daily gap open. With no major news scheduled today and Quarter-end rebalancing coming, we may see the bears push a little on the drift. Watch the short-term chart and be ready for the whipsaw that has been the norm. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).
Ed
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