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Market Mulls A Lot of Gov’t News Today

September 17, 2020 by Ed Carter

Wednesday saw another gap higher (about 3 or 4 tenths of a percent) in spite of an August Retail Sales number that missed estimates by 40%. The roller coaster ride followed with the climax being a strong rally at 2pm (after the Fed said interest rates will remains near zero for at least 3 years) and an even stronger selloff at 3pm. On the day SPY was down 0.38%, DIA up 0.16%, and QQQ down 1.59% as the techs continued to get hammered. This gave us big bearish candles in the QQQ and SPY as well as an ugly high wick in the DIA. Oddly enough VXX also fell on the day, ending at 24.96 and T2122 climbed to 71.71. 10-year bond yield rose slightly to 0.697% and Oil (WTI) was up over 5% to $40.24/barrel.

As mentioned, the big news on the day was the Fed confirming what individual Fed voters have been saying for quite some time. The FOMC will hold rates essentially at zero percent for years to come, specifically at least through 2023. Nonetheless, they also improved their GDP forecast to a 3.7% contraction (when the last forecast was for a 6% contraction as recently as June). However, on the other side, they also reduced the 2021 GDP forecast from 5% growth to 4% growth. Chair Powell also said the Fed is working on changes to the Main Street Lending Program (which has been a flop with less than one-quarter of one percent of available funds being requested as loans as of now) to make it more widely accessed.

President Trump took a step back from his former position and called on the GOP to support a much larger stimulus package than either the Administration or the Senate Republicans had previously said they would accept. He didn’t mention a specific amount, but White House Chief of Staff Meadows later told the press that $1.5 trillion could be acceptable. (This number is halfway between the Republicans original $1 trillion and the Democrats most recent offer of $2 trillion. However, it’s a full trillion dollars over what Senate Republicans had wanted in their “Skinny Bill” as late as last week.) Both Meadows and House Speaker Pelosi said they are more hopeful of a deal now than they have been in 3 months. Senate Majority Leader McConnell refused to comment. For his part Fed Chair Powell reiterated that he still feels more fiscal support is likely needed with 11 million people out of work, small businesses struggling and local government revenues having dropped. In an unrelated story, House Republicans are moving to force a vote to re-issue the $138 billion of PPP program funds that went unrequested from the last stimulus bill. It’s unclear if there would be more demand now than earlier, but it is a sound political move and the market loves stimulus whether real or paper.

As for the ORCL- Byte Dance partnership deal for TikTok US operations, both Sec. of State Pompeo and President Trump said they don’t like what they have heard. While not an outright disapproval of the deal, it cannot be seen as a positive thing with just 3 days remaining until the White House-imposed deadline. On the positive side, the President did admit that he has given up on the government “getting a lot of money” for forcing the deal (government lawyers have explained to him that is not legal). Still, that was never a real obstacle to a deal. The crux of the issue is that the White House insists on a sale of the business and its technology assets while China has said it will not allow the sale of the technology (search and user interest tracking algorithms, etc.). On top of that, apparently no suitor has offered what Byte Dance feels is fair compensation for the entire business (the Oracle deal would leave Byte Dance with majority ownership in the new shell company).

On the virus front, in the US, the numbers show we now have 6,828,698 confirmed cases and 201,366 deaths. We saw another uptick to 40,154 new cases and 1,151 deaths. On Wednesday CDC Director Redfield told a Senate committee that masks are the most important tool we have and may well be more effective than a vaccine. In the same testimony, he said most people will not be able to access a vaccine until mid-2021 and the process would take 6-9 months to get enough people vaccinated twice to provide community herd immunity. (Beyond the supply issues, another hurdle will be the public. Two days ago, a non-partisan 1,200 respondent Kaiser Foundation poll found that only 42% of Americans will get vaccinated even when it is available.) In a different hearing, Dr. Fauci (NIH) told House lawmakers that while October data is theoretically possible, he expects data about the efficacy and safety of the early vaccine candidates to become available in November or December. (Oddly, he also said that US phase 3 trials are still only about two-thirds enrolled with approved healthy participants at this point.) However, as he often does, President Trump told reporters that the experts were wrong, large-scale vaccine distribution will begin about mid-October and 100 million vaccine doses will have already been distributed in the US by year-end.

Globally, the numbers rose to 30,073,744 confirmed cases and 945,817 deaths. The WHO came out against “Covid-19 passports” (passports that would allow test-free and quarantine-free travel for people with antibodies), because there are no studies on how universal immunity would be or how long immunity lasts. The renewed spread in Europe continues, but that is dwarfed by India, which reported a record high of 97,800 new cases today.

Overnight, Asian markets were red across the board, with the lone exception of Shenzhen which managed +0.08%. The biggest losers were Hong Kong, South Korea, and Australia which were all down over 1.2%. Europe has followed Asia so far today with red across the board. However, only the Netherlands is down more than a percent as of 7:30am. Speaking of that time, as of then the US futures are pointing to a gap lower. The Nasdaq implies a gap down of 1.63%, the SPY a dap down of 1.13%, and the DIA a gap down of 0.81%.

The major economic news for Thursday includes August Building Permits, August Housing Starts, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am). However, once again there are no major earnings reports on the day.

Be careful of volatility with gap and reverse being the norm recently in the mornings. Stick to your plans. Follow the trend and don’t chase moves you have missed…there will be another one soon. Hang in there with your rules and keep locking-in profits. Remember, trading is a job, not a lottery ticket.

Swing Trade ideas for your Consideration and Watchlist: TRUE, COF, MDB, MKC, HLT, ADSK, MMM, WFC, PYPL, AXP. 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.

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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.

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Big Day of Economic Data

September 16, 2020 by Doug Campbell

Yesterday ended with a mixed bag on index results heading into a big day of economic data that includes an FOMC statement and the chairman’s press conference. With the indexes closing at or very near price resistance levels, today’s data may well inspire the bulls higher or bring bears out of hiding depending on how investors digest the results. With an elevated VIX and futures pointing to gap up open, it seems an understatement to say anything is possible. Stay focused, and flexible.

Asian markets closed mixed in a rather falt session after Japan reported a disappointing plunge in exports. European markets trade mixed, cautiously awaiting the central bank decision. Overnight futures struggled to gain ground, but as the open near the pre-market pump up has begun suggesting another bullish morning gap. Buckle up.

Economic Calendar

Earnings Calendar

On the Hump Day earnings calendar, we have just 16 companies reporting quarterly results. Notable reports include BRC & MlHR.

News & Technicals’

Though there was a lot fo bullish energy at the open yesterday, we ended with a mixed bag of results. The SPY and IWM mostly chopped in a narrow range, with the DIA giving up early gains to close essentially flat. The QQQ and big tech struggled to hold the morning gap in the morning session, but the bulls fought back, closing the index with solid gains near price resistance levels. After the bell, FEX and ADBE produced strong earnings, with both stocks indicating substantial gains at the open today. However, during the night, US Futures seemed to struggle, often dipping into negative territory until early morning pump up began, which seems to have become the standard operating procedure for this year. Blackstone’s Tony James is warning this morning of a possible lost decade where market returns become anemic in a low-interest-rate environment but facing significant headwinds moving forward. During the night, Hurricane Sally strengthened to a Category 2 storm that made landfall at high tide, shutting down power and threatening widespread flooding. What a year! To much water in the south while the Pacific coast burns, suffering from drought.

The FOMC will be in focus today as we wait for there interest rate decision, and of course, all eyes will be on the Jerome Powell at the press conference that follows. If that’s not enough, we keep investors guessing we also have Retail Sales, Business Inventories, Housing Market Index, and a Petroleum Statis report to digest before the 2 PM eastern statement release. Add to that index charts testing price resistance levels and an elevated VIX, and I think it’s safe to say anything is possible. As I write this report, futures point to a gap up open; however, I would not be at all surprised to see very anemic and choppy price action ahead of the FOMC decision. Becare not to chase with a fear of missing out if the morning gap does unfold.

Trade Wisely,

Doug

Waiting on the Fed

September 16, 2020 by Ed Carter

Tuesday saw another significant gap higher followed by an afternoon selloff that left us with indecisive black candles. None of the 3 major indices were able to break out of their consolidation range of the last week. However, 8 of the 10 major sectors were up on the day, with Financial Services and Energies being the outliers. On the day SPY gained 0.49%, DIA was flat at +0.02%, and QQQ gained 1.42%. The VXX was also flat at 25.02 and T2122 (4-week New High/Low Ratio) fell back to mid-point at 51.83. 10-year bond yields rose slightly to 0.682% and Oil (WTI) was up almost 3% to $38.32/barrel.

During the day AAPL announced a slew of product refreshes but added a long-awaited bundle of AAPL services (subscription to music, TV, arcade and cloud storage) for $15/mo. Wall Street had been pushing the company to offer a subscription bundle revenue stream. AAPL also announced a fitness line aimed to compete with PTON. On the day AAPL was flat and PTON initially dropped but recovered for a 4.19% gain.

Hurricane Sally made landfall in AL overnight. As a Category 2 storm, the fear appears to be more about torrential rain and wind damage than major storm surge or large-scale inundation. However, AL, and FL businesses could see disruptions from the storm. It appears that in most measures, the West Coast fires and smoke are still the worst natural disasters impacting the country.

On the virus front, in the US, the numbers show we now have 6,788,471 confirmed cases and we have now had over 200k deaths at 200,197. This comes after a small uptick yesterday in a still (by US standards) “mild day” of 38,286 cases and 1,197 deaths. In a related story, the political operator placed as head of communications of HHS (the one who has changed reported numbers to fit Admin. narrative) publicly apologized for his most recent “deep state,” “sedition,” and related unfounded conspiracy theories that he has used to justify massaging the numbers provided by career scientists. Meanwhile, FDX reported a continued demand surge in the last quarter from pandemic-related orders. And SBUX reports same-store sales were down only 11% in August versus 2019 as the recovery continues.

Globally, the numbers rose to 29,764,825 confirmed cases and 939,962 deaths. The OECD now estimates the global economic contraction to be just 4.5% for the year. While this is still an unparalleled drop in global GDP, that is much better than their mid-year forecast of -6%. In Ireland, the entire cabinet is self-isolating and Parliament has been suspended following infections and a recent test. Meanwhile, Germany’s Education and Research Minister told a news briefing that she does not expect a vaccine to be widely available until mid-2021. At the same presser, the Health Minister said between 55% and 65% of the population would need to have already been vaccinated for it to control the virus in the population. In the neighboring Czech Republic they saw a record number of new cases and in France, dozens of schools have been closed in the last week as their own cases are increasing again. Spain has also brought on new restrictions to fight its own increase.

Overnight, Asian markets were mixed again, but leaned a touch more to the red side Wednesday. The NIKKEI and Hong Kong were flat with China and South Korea down. The remainder (smaller markets) were mostly green. Europe is also mixed this morning with the big 3 bourses all just on the red side of flat as traders wait on hints about the Fed statement (which comes after the European closes). In the US, at 7:45 am, the futures are pointing to another green open. The large-caps are implying an open up 0.40% with the NASDAQ implying a green but flat open.

Wednesday is a big day for major economic news with August Retail Sales (8:30 am), July Business Inventories (10 am), Crude Oil Inventories (10:30 am), FOMC Interest Rate Decision and Q3 Interest Rate Projection (both at 2 pm), and FOMC Press Conf. (2:30 pm). However, there are no major earnings reports on Wednesday.

We remain range-bound with gaps being the main move of the day. There is not a bullish trend yet, but the bearish trend has been broken. So be careful of volatility with gaps and indecisive swings controlling the market. That said, the market seems to be waiting on the Fed today. This is a bit odd since nobody expects a rate change and Fed officials (including the chair) have already often and repeatedly said rates will remain at essentially zero for years to come. So, I do not know what markets want or expect to hear…let alone what they might hear this afternoon.

Regardless, beware of the volatility. Stick to your plans. Follow the trend and don’t chase moves you have missed…there will be another one soon. Hang in there with your rules and keep locking-in profits. Remember, trading is a job, not a lottery ticket.

Swing Trade ideas for your Consideration and Watchlist: CWH, DRI, PYPL, TSM, LYV, FSM, BBY, ALLY, KSS, ETFC. 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

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

Relief Rally

September 15, 2020 by Doug Campbell

It looks as if yesterday’s nice relief rally will enjoy a flow-through gap up this morning. The question is, will the bears be lying in wait to attack as we approach resistance in the index charts? The lackluster performance of big tech and the new daily record of COVID-19 cases reported by the WHO adds some uncertainty. Remember, the FOMC meeting begins today, and the market will often become choppy as it waits for there direction.

Asian markets closed mostly up overnight as China reported its first positive retail sales report since the beginning of the pandemic. European markets are cautiously bullish this morning as they await the central bank decision. Us Futures point to another substantial gap up open ahead of economic and earnings news and kick off the of the 2-day FOMC meeting.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have 17 companies reporting quarterly results. Notable reports include ADBE, FDX, and CBRL.

News & Technical

The nice relief rally fell short of breaking price resistance in the index charts as big tech produced a lackluster performance. The VIX pulled back but remained relatively elevated, closing well above 25 handles. The WHO reported a record one-day spike in coronavirus cases and warned that the pandemic shows few signs of slowing. In a somewhat confirming story of the epidemic, the IEA cut 2020 oil demand seeing a ‘treacherous’ path ahead due to the rising cases heading into the fall. The President seems to have walk back his requirement of a TicTok sale approving of the deal with Oracle. Apparently, in the partnership of the social media app, Oracle will be responsible for the privacy concerns that caused potential banning. However, make no mistake the apps fundamental purpose to data-mine users as all social media will continue.

Technically speaking, yesterday’s bounce quickly moved the T2122 indicator from short-term oversold but may near a short-term overbought condition as soon as the open today as the all or nothing knee-jerk reaction volatility continues. The FOMC meeting begins today, and traders should keep in mind that it’s pretty standard for the market to become quite and the price action choppy as we wait for the statement and Powell’s presser. As we approach resistance in the index charts, observe to see if the bears will line up in defense. Yesterday week performance in the big techs is a bit concerning should those bears decide to attack. With the election on the horizon and coronavirus cases rising, the uncertainty of the path ahead is likely to keep traders on edge and volatility high. Plan your risk accordingly.

Trade Wisely,

Doug

Wait for President, Congress, And-Or Fed

September 15, 2020 by Ed Carter

Monday was another indecisive day with at gap up and then no follow-through. This left all 3 major indices stuck in what could certainly be a bottom, but could also be consolidation before another leg down. On the day the SPY was up 1.31%, DIA up 1.26%, and QQQ up 1.74%, but all closed well off their highs. The VXX fell again to 25.10 and T2122 rose sharply (out of oversold territory) to 70.49. 10-year bond yields rose slightly to 0.674% and Oil (WTI) was flat at $37.29/barrel.

During the day, ORCL confirmed that they had reached a deal with Byte Dance to partner with TikTok for US operations. However, the parties are counting on President Trump to back off his original demands, because there would be no outright sale to ORCL in the agreed deal. This leaves an open question because of the political points to be made, as well as the ties of ORCL Execs to the President. All this is on top of the President’s demand that the US government get “a lot of money” out of the deal. So, several headlines Monday, but nothing definitive yet

The House is working on a Continuing Resolution to keep the government funded past the end of the fiscal year on Oct. 1st. Treasury Sec. Mnuchin (negotiating for Republicans) has agreed with Speaker of the House Pelosi that the only topic for this bill will be the CR (no stimulus). Republicans want the new funding to only last until just past the election, while the Democrats want it to last through the swearing-in of the next Congress. Negotiations are still underway about the funding levels of the CR (and probably pork) and no vote is expected until next week, giving the Senate just enough time for an up/down vote on keeping the government open.

On the virus front, in the US, the numbers show we now have 6,749,406 confirmed cases and 199,018 deaths. This comes after a “mild day” of 37,000 cases and 480 deaths. While AZN has restarted its UK trial on its vaccine, the US trial remains halted until at least mid-week after while the FDA investigates a severe neurological problem in one of the trial participants. In FL there has been a 26% increase in cases among children in the month since school began again. In MI, MSU has ordered the quarantine of all fraternities and sororities after hundreds of cases have been found in those groups.

Globally, the numbers rose to 29,474,968 confirmed cases and 933,423 deaths. In the UK, there is a test shortage causing people to travel hundreds of miles or (as had been the case in the US a month ago) wait weeks for results or both. This comes as the UK is only processing 200,000 tests per day. In Austria, cases are rising as their government warns of a second wave starting.

Overnight, Asian markets were mixed again, but leaned toward the green on moderate moves to either side. Thailand and Malaysian were the only countries to move more than a percent positive and Indonesia the only one to move more than a percent negative. The major bourses moved about a half percent to the green except Japan which did the opposite. However, in Europe we are seeing green across the board so far today. The FTSE leads the big 3, up 1% with the DAX and CAC seeing much more moderate moves as of mid-day. In the US, at 7:30 am, the futures are pointing to another gap higher at the open. The NASDAQ is leading, implying a gap of nearly 1% while both large-cap indices imply a gap up of 0.70% as of now.

The major economic news for Tuesday includes August Import/Export price Index and NY Empire State Mfg. Index (both at 8:30 am), and August Industrial Production (9:15 am). The only major earnings reports on the day are ADBE and FDX after the close.

The lack of follow-through after Monday’s gap has not dampened bull spirits. It seems another gap higher is in the cards this morning. However, remember we don’t have a bullish trend yet (on the daily at least) and we are still inside that bottoming area that could go either way. Perhaps the markets are waiting on more news from the Fed or Congress, but we have the 50sma below and the top of the bottoming congestion above acting as at least temporary limiters.

Be careful of volatility. Stick to your plans. Follow the trend and don’t chase moves you have missed…there will be another one soon. Hang in there with your rules and keep locking-in profits. Remember, trading is a job, not a lottery ticket.

Swing Trade ideas for your Consideration and Watchlist: SYF, HWM, CFG, JCI, AUY, JETS, LYV, DRI, WKHS, KSS, FSM. 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

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

Butterfly Spreads E-learning

September 14, 2020 by Doug Campbell

In this member E-learning session we cover the ins and outs of Butterfly Spreads.

Butterfly Spreads E-learning Replay Video

Buyout News

September 14, 2020 by Doug Campbell

A big weekend of buyout news combined Friday afternoon bounce that left the DIA and SPY hovering above there 50-day averages has the overnight futures pointing toward a substantial gap up this morning. However, keep a close on the overhead resistance above as new cases of COVID-19 begin to rise, and the presidential election that adds significant uncertainty to the path forward.

Asian markets rallied overnight as Japan’s Softbank lept by 9% after the announcement that Nvidia will buy Arm Holdings from them in a 40 Billion dollar deal. However, European indexes are flat and mostly lower this morning, giving up early gains as Brexit challenges persist. US Futures suggest a gap up of 250 points in the DOW ahead of a light day of earnings and economic reports. Traders should expect challenging price volatility to continue.

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have a light day with just 14 companies stepping up to report. Looking through the list, there is only one, LEN, that stands out as a notable report.

News & Technical’s

As more than 100 wildfires continue to burn, across California, Oregon, and Washington, the search for missing people has begun. Millions of acres have burned with some entire communities decimated as high winds continue to challenge firefighter efforts. With college in full swing around the country, cases of COVID-19 are starting to tick higher once again. The Whitehouse medical advisor warned this weekend to brace for a problematic fall with the likely spread of the virus picking up pace. As of now, nearly 200,000 Americans have fallen victim to the pandemic. Nvidia is spending 40 billion to buy Arm Holdings from SoftBank in a busy weekend news cycle of buyouts. Innunmedics shares doubled after news that Gilead agreed to by the cancer drug maker in a 21 million dollar deal. In the battle for TikTok, it looks like Oracle may have emerged the winner to partner with the popular social media app only days before the ban deadline. According to reports, Chinese owners reject Microsoft’s offer in favor of Oracle this weekend.

The DIA & SPY continue to hover above their 50-day moving averages bouncing Friday afternoon. The QQQ also bounced but lacked the energy to recover its 50-day average by the close. All the buyout news seems to have inspired the bulls this morning, with Futures pointing to a gap up open in the DOW of nearly 250 points. The bullish price action could trigger a bit of a short squeeze this morning but let’s not forget the resistance above the selloff as created. The historically low rates favor the bulls, but the uncertainty of rising COVID-19 cases and the upcoming presidential election could also inspire considerable price volatility.

Trade Wisely,

Doug

GILD – NVDA – ORCL Deals Leads News

September 14, 2020 by Ed Carter

Friday was a volatile day, opening with a half-to-three-quarters of a percent gap higher, riding the roller-coaster within a 2-3% range and closing with indecisive black candles. On the day, DIA was up 0.47%, SPY flat at up 0.05%, and QQQ down 0.69%. The dreaded-h pattern remains in place for all three indices with potential support at the breakdown level. Oddly, the VXX was down hard (almost 6%) to 25.52 and T2122 remains well into the oversold area at 9.03. 10-year bond yields fell to 0.669% and Oil (WTI) was up slightly to $37.33/barrel.

On Sunday it was announced GILD will buy IMMU for $21 billion in order to add the IMMU breast-cancer treatments to their catalog. In other takeover news, overnight NVDA bought British chipmaker ARM (from Japan’s Softbank). The co-founder of ARM immediately attacked the deal as a disaster because inevitably NVDA would move the company to the US. The deal is most noteworthy because AAPL recently announced they are dropping the INTC architecture in favor of the ARM architecture (rebranded as “Apple Silicon” as if AAPL had somehow designed or built the chips).

In trade war news, ORCL seems to be the winner in the TikTok forced-buyout deal as Byte Dance has rejected the joint MSFT / WMT bid. However, over the weekend the Chinese government, which must approve the sale, said the TikTok algorithm would not be part of any sale and no official deal announcement has yet been made. Still, this should be looked on favorably by US administration officials given ties to both the CEO and Chairman of ORCL. If announced this week, the deal would beat the White House-imposed September 20 deal deadline.

On the virus front, in the US, the numbers show we now have 6,710,031 confirmed cases and 198,533 deaths. As of Sunday, cases are growing by more than 5% on the weekly average in only 11 states, which is a big improvement over a couple weeks ago. However, troublingly over the weekend is was reported that political appointees at HHS have been given the ability to review and demand changes to case and mortality data from the CDC. In brighter news, on Sunday, PFE said they may have up to hundreds of thousands of doses (2 doses required per patient) of their vaccine by year-end…if it passes Phase 3 trials and if it is immediately approved by the FDA for emergency use. Of course, in the same interview, PFE’s CEO also said “there was a good chance they would know IF their vaccine works, and how well, by the end of October. Until then, all that can be done is to plan using the best-case scenario.”

Globally, the numbers rose to 29,216,069 confirmed cases, and 929,056 deaths. On Saturday AZN resumed its Phase 3 trial (oddly just days after saying it would resume by year-end). Meanwhile, the case surge in France continues as their Health Minister said there was a “clear deterioration of the virus situation (especially hospitalizations),” although there was a slight dip in new cases on Sunday. In the middle-east, Israel has approved a second general lockdown of their country. And in Asia, South Korea is stockpiling PPE for Winter, while China announced there was no need to vaccinate the country’s entire population at this stage, (instead just focusing on frontline workers and other select groups).

Overnight, Asian markets were mixed but generally positive with Indonesia (+2.89%) far outpacing everyone, followed by South Korea (+1.3%) and Shenzhen (+1.15%). All other Asian markets were either modest winners of modest losers. In Europe, markets are also mixed but split more evenly at this point in their day. The big 3 European indices are mixed with 2 modest losers and the CAC up 0.21% as of now. In the US, at 7:30 am, the futures are pointing to a strong gap higher at the open. The DIA is the laggard, showing an implied gap higher of 0.87%, but SPY is looking at +1.21% and QQQ at + 1.64% as of now.

There is no major economic news scheduled for Monday release. And the only major earnings reports on the day is LEN after the close.

After a bull trap on Thursday and a less than stellar Friday, markets look to be charging into the new week. The trend remains to the downside, but the 50sma area may have given support for all 3 major indices. It certainly looks as though we will gap up through the downtrend. However, remember this is not the same thing as starting an uptrend. In recent months it has been the mega-tech FAANG names that have led markets higher. It is possible the TikTok and/or NVDA-ARM deal is helping them find their legs again. Regardless, gaps are gifts, but otherwise, nothing we can take advantage of…and they are a signal of more volatility.

So, regardless of the open, stick with your plan. Follow the trend and don’t chase moves you have missed…there will be another one soon. Stick to your rules and work to consistently lock-in profits and reduce risk.

Trade ideas for Monday: XYL, IP, SYF, NIO, LYV, JCI, LYFT, DOW, FCX. 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

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

Wild Price Action

September 11, 2020 by Doug Campbell

Another day of wild price action as the market whipsawed early gains into substantial afternoon declines that left behind a bearish candle pattern and likely damage some investor confidence. Adding to the selling pressure was the failed attempt of the Senate to gain the votes needed to advance another COVID stimulus package. Although US Futures point to a bullish open today, keep in mind a test of the 50-day average in the Dow and SP-500 is not out of the question in the days ahead.

Asian markets finished the week on a high note bouncing to close green across the board. However, European markets trade mixed and mostly flat with Brexit issues in focus. US Futures point to a bullish overnight reversal, a welcome relief from the selling ahead of the latest reading on the CPI. Expect price volatility to continue as we slide into the weekend.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just 14 companies reporting quarterly results. About the only notable report I can come up with today is the report from KR.

News & Technical’s

Yesterday was another wild ride with the Dow rallying more than 200 points at the open with an intra-day reversal that sent the index plunging more than 500 points, leaving behind an ugly bearish engulfing candle. The SP-500 closed the day less than 25 points above its 50-day average with the Dow just 230 points away. Testing this key technical average seems quite likely in the days ahead even though the Friday morning futures point to an overnight bounce. The Senate tried but failed to move forward another federal stimulus package disappointing a market that had become absolutely addicted to the massive deficit spending. According to reports hacking attacks attempting to influence the outcome of the Presidental election are coming from all over the place. Both campaigns have suffered attacks.

Although there is no technical damage to the index moving averages yesterday, create some price action damage making lower highs and falling below some price support levels. Yesterday’s price action also left behind bearish candlestick patterns and likely damaged the overall investor confidence. The VIX closed above a 29 handle, but it’s interesting to note it didn’t register a sharp increase in fear as the selling accelerated in the afternoon session. I suspect we are at or very near a short-term oversold condition that warrants a bit of a relief rally; however, I would be very wary of the idea that the full market pullback is over.

Trade Wisely,

Doug

Challenging to Navigate

September 10, 2020 by Doug Campbell

Traders should fasten their seat-belts tightly because it looks as if the road ahead may continue to be challenging to navigate. With the radical price swings, trading risks are extraordinarily high so consider your decision carefully should you choose to risk your hard-earned money in a market where it is near to impossible to maintain an edge. Very experienced day-traders have the upper hand, while swing and position traders have a substantial risk of intra-day whipsaws and complete overnight rehearsals.

Asian markets closed the day mixed but mostly lower overnight. European markets are modestly bearish this morning ahead of an ECB meeting, and the US futures currently point to a bearish open ahead of earnings and economic reports.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have 22 companies reporting quarterly results. Notable reports include CHWY, PTON, PLAY, ORCL, & ZUMZ.

News & Technical’s

The wild price action volitility continued yesterday will a big relief rally, but the big question is can it hold. After rising more than 680 points, the Dow dropped more than 200 points in just 30 minutes, heading into the close. The VIX pulled back nicely but ended the day holding at its 200-day average and remaining elevated at the finish, pointing to the significant danger these big price swings create. What comes next is anyone’s guess, so use caution avoiding overtrading because retail traders have little to no edge with such an uncertain condition.

In the index charts, there continues to be no significant technical damage; however, the threat that DIA and SPY may yet test their 50-day moving averages does still exist. Although a light day on the earnings calendar, we do have several notable reports as well as an economic calendar that includes Jobless Claims, PPI before the bell for the market to digest before the open. Currently, futures point to a bearish open, but a lot could change over the next 2 hours with volatility so high. Buckle up the road ahead is likely to remain bumpy and very challenging to navigate.

Trade Wisely,

Doug