Beware Gap and Fade but Bulls Running

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Another day, another gap and fade.  Markets opened just under 3% higher on the hope of more stimulus and an unexpected May Retail Sales beat.  However, as usual of late, traders then sold off hard to begin the all-day volatile rollercoaster.  The day ended on a last-minute climb giving us black-bodied candles with long lower wicks across the board.  (You decide whether you want to call them Hanging Men.)  On the day the SPY gained 1.86%, the DIA gained 2.06%, and the QQQ gained 1.72%.  VXX fell back to 36.87 and T2122 climbed back into the overbought territory at 93.75.  Oil (WTI) closed up as energy led markets most of the day, ending at $38.11/barrel and the 10-year bond yield rose to 0.75%.

Fed Chair Powell downplayed the $750 billion corporate bond-buying program when he testified before the Senate Tuesday.  However, he also signaled that the backstop was in place and that when markets weren’t buying up the bonds, the Fed would step in (i.e. let the market determine the pace of Fed purchases).  The part that may scare traders is when he said if the market continues to improve, the Fed would be happy to slow or stop buying.  So, he promised a backstop…not additional buying pressure.

On the Virus front, the global headline numbers are 8,287,295 confirmed cases and 446,667 deaths. The big news is a UK study that found a cheap steroid that improves the survival rate of the worst cases by 30%.  This is great news, but preliminary as another study found that the previously touted hydroxychloroquine may actually reduce the effectiveness of Remdesivir (the only treatment proven to help). In Brazil, the virus rages out of control as they reported over 34,000 cases on the day (an increase of 66% over the Monday).  Meanwhile, China is continuing the fast clamp down on the new outbreak, including more intensive testing of imported meat after it was discovered a majority of the recent cases were people who were processing imported salmon.

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In the US, we now have 2,208,486 confirmed cases and 119,133 deaths reported to date.  TX has seen a 66% increase in virus cases since Memorial Day, including yet another daily high in new cases Tuesday.  FL also saw a 3.6% increase in cases on the day.  However, CA saw only a 1.4% increase, the smallest increase in cases in that state in 3 weeks.

In the US, we now have 2,182,979 confirmed cases and 118,286 deaths reported to date.  23 states have seen an increase in cases over the last week.  TX reported its 6th record-high number of hospitalizations in the last week on Monday, but the increase was lower than the 7-day average increase.  CA saw a decrease in positive test results (to 4.5%) as of last Friday.  Meanwhile, AR Governor Hutchinson issued executive orders protecting businesses in the state from virus liability. 

Overnight, Asian markets were mixed, but mostly in the green.  Japan and India being the 2 that showed red, but South Korea, Taiwan, Singapore, and Shanghai were all barely on the green side.  Europe is showing a similar situation with the big 3 (FTSE, DAX, CAC) up between half and one percent.  However, some of the minor bourses (Greece, Finland, and Sweden) are in the red, while some of the others are not that far into the green at this point in their day.  At 7:30 am, US futures are pointing to another gap higher of between 0.5%-1.0%.

The major economic news for Wednesday includes May Building Permits, and May Housing Starts (both at 8:30 am), Crude Oil Inventories (10:30 am), Fed Chair Powell testifying (12 pm), and FOMC Member Mester speaks (4 pm).  However, there are no major earnings announcements at all on the day.

It’s still early, but as of now, we’re looking at another significant gap this morning.  The gap higher at the open should take us back to challenge Tuesday’s highs.  If we can clear that, we’ll be back in the Island Reversal gap.  Stay focused on the short-term chart.  However, the bulls seem to be calling the tune this morning.  As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

Ed

There are no Trade Ideas for today. However, be aware that the normal distribution of trade ideas has been moved to the trading room and the Members-Only Phone App in the future anyway. 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.

🎯 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

|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.

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

No match for the FOMC

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No match for the FOMC

Fear of the rising virus hospitalizations, debit, bankruptcies, and growing tensions with China & North Korea are apparently no match for an FOMC with an unlimited checkbook.  From Monday open to Tuesday, a swing of 1000 points just in the morning gap after the Fed adds another 750 billion in direct company bond purchases.  This morning the indexes will challenge the huge June 11th gap as the massive price volatility continues.

Asian markets roared back overnight with  Japan rising nearly 5%, and European markets reverse to bullishness with the DAX up over 3% on in reaction to the Fed spending.  Ahead of the Retail Sales numbers and the Chairman’s congressional testimony US Futures are decidedly bullish, suggesting a considerable gap in the indexes. 

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have just over 20 companies reporting their quarterly results.  Notable reports include LEN, ORCL, GRPN, HRB, & MFA.

Technically Speaking

With slow and steady pressure, the bulls recovered from the substantial morning gap down as the incredible price volatility continues.  Yesterday we heard the Planet Fitness declared bankruptcy, but the stock rallied during the day.   Today 24 Hour Fitness joined them in declaring bankruptcy.  United Airlines burrowed 5 billion against its frequent flyer program, and Hertz announced a new stock sale with the suggestion that investors will lose their money.  However, none of that seems to matter these days, including rising coronavirus, unemployment, and the soaring national debt.  That said, the market celebrated the news that the FOMC will add another 750 billion to buy bonds directly from companies.  The President announced a plan to spend Trillion on infrastructure and will sign an executive order on police reform later today. 

This morning ahead of the Jerome Powell’s testimony on the hill and several economic reports, we are once again expecting a 500 point gap at the open.  Yesterday, bearish, today bullish.  Count it up; that’s a 1000 point swing in just the morning gap!  Amazingly that seems to have become the new normal. Today’s gap will test the 200-day average on the DIA and IWM as resistance and move us to back up into the vast gap down created on June 11th.  The SPY quickly recovered its 200-day average yesterday, and the QQQ rally regained the breakout high of last February with the big internet tech companies leading the way.  With the market tossing around 500 point gaps, what happens next is anyone’s guess, so prepare for another wildly volatile day.

Trade Wisely,

Doug

Looking For More Easing and Stimulus

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Markets gapped down 2% Monday as virus fears continued.  However, the bulls then immediately started to fade the gap in a steady climb.  About 2pm the Fed kicked that rebound into high gear, by announcing they will buy individual corporate bonds.  After another 1.3% gain the roller-coaster was on for the rest of the afternoon.  This resulted in Piercing Candle signals on the SPY and DIA.  At the close, SPY was up 0.93%, DIA was up 0.63%, and QQQ was up 1.22%.  VXX was down to 37.72 and T2122 (4-week New High-Low Ratio) climbed back to 67.65 (mid-range).  The 10-year bond yield climbed a bit to 0.72% and Oil (WTI) also climbed back to $37.07/barrel.

In addition to the Fed announcement of actually starting the buying of individual corporate bonds (which had been previously announced, but started Monday), Chair Powell testifies the next two days on Capitol Hill.  So, there seems to be hope this morning that he may say something that would buoy markets.  There is also a rumor recirculating this morning that the White House will announce its previously rumored Infrastructure plan.  This would obviously require Congressional approval and Senate Republicans have blocked several infrastructure packages on cost concerns the last year or so.  Still, markets may well buy the hope of more spending.

In business news, HTZ made news by telling traders that it expects stockholders to lose all their money (as part of their IPO application).  AAPL also said that consumers spent more than $519 billion in 2019 through phone apps in the iTunes store.  (This includes all purchases made through the store, like UBER fares.)

$97 for the next 100 subscribers, then $147

On the Virus front, the global headline numbers are 8,141,521 confirmed cases and 439,713 deaths.  A second vaccine candidate began human trials in the UK as their retail stores opened to lines of shoppers Monday.  However, the new outbreak in Beijing has now increased to 100 cases.  At the same time, Brazil (the current virus epicenter) reported almost 21,000 new cases Monday (more new cases than the US on a population two-thirds the size and much worse testing and medical infrastructure).

In the US, we now have 2,182,979 confirmed cases and 118,286 deaths reported to date.  23 states have seen an increase in cases over the last week.  TX reported its 6th record-high number of hospitalizations in the last week on Monday, but the increase was lower than the 7-day average increase.  CA saw a decrease in positive test results (to 4.5%) as of last Friday.  Meanwhile, AR Governor Hutchinson issued executive orders protecting businesses in the state from virus liability. 

Overnight, Asian markets were strongly in the green, with gains of almost 5% in Japan, over 5% in South Korea, and almost 4% in Australia. Europe is following suit, with the three major bourses up 2.5%-3% at this point in their day.  At 7:30 am, US futures are pointing to a significant gap higher of between 1%-1.5%.

The major economic news for Tuesday includes May Retail Sales (8:30 am), May Industrial Production (9:15 am), April Business Inventories (10 am).  As previously mentioned, Fed Chair Powell also testifies before Congress (10am) and FOMC Member Clarida speaks at 4pm. 

It’s still early, but as of now, we’re looking at a significant gap up as the fear of virus impact is replaced with hope for more money from the Fed and government.  The gap higher at the open should take us back to challenge Friday’s highs.  If we can clear that, we’ll be back in the Island Reversal gap.  Stay focused on the short-term chart.  However, the bulls seem to be calling the tune this morning.  As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

Ed

There are no Trade Ideas for today. However, be aware that the normal distribution of trade ideas has been moved to the trading room and the Members Only App in the future anyway. 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.

🎯 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

|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.

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

Bears on the Prowl

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Bears on the Prowl

News that Beijing is once again instituting coronavirus isolation measures and the resurgence of hospitalizations here in the US have the bears on the prowl this morning.  As of Friday, longer-term trends and major price support areas, as well as 50-day averages, remain bullish.  However, the substantial spike in the VIX could make the days ahead very challenging for traders, and those bullish technical s could quickly turn bearish.  With the Fed step up their operations, will the Congress approve more stimulus, will it be enough to keep the economy afloat if the feared second wave of infections begins to inflate?  Tough questions to answer, making the path forward very uncertain.

 Asian markets closed lower across the board, with the NIKKEI falling nearly 3.5% overnight.  European indexes are decidedly bearish this morning as the threat of virus rebounds.  US futures point to a rather grim gap down with the Dow expected to fall more than 500 at the open.  It would appear the wild ride of 2020 is far from over, and the complexity of the recovery will be far more challenging than the recent rally would suggest. 

Economic Calendar

Earnings Calendar

On the Monday earnings calendar, we have a relatively light day.  Notable reports included JKS & TTM.

Technically Speaking

The Friday’s bounce after the Thursday rout was a nice break in the selling, but the news over the weekend has the bears charging again this morning.  We learned during the night that Beijing as reinstated isolation measures in some areas, established checkpoints and closed some schools due to a resurgence of the Coronavirus.  Here in the US, even as the States try to reopen their economy’s infection rates and hospitalizations are accelerating.  Planet Fitness has filed for bankruptcy and said they would close about 1000 locations as it attempts to reorganize.  I suspect we will begin to hear of many more bankruptcies in the coming months as the full measure of business impacts is realized.  According to reports, protesters have taken over a small area of Capitol Hill in Seattle, forcing a police station to close for the safety of the officers.  The President has theathend to mobilize the national guard to restore order, but the idea does not have support by the governor. 

As bad as the Thursday sell was, the longer-term bullish trends and major price supports have so far held in the DIA, SPY, and QQQ.  They all remain above their respective 50-averages, and the QQQ thus now is merely testing the breakout as support.  Unfortunately, the spike volatility could quickly shift those bullish technicals as the uncertainty about the path ahead with the resurgence of the virus.  There are those once again predicting a market calamity, and those that believe the virus news has blown everything out of proportion, and the recovery will resume.  The fact is no one knows the futures and the best we can do as traders; avoid the prediction and stay focused on price action for our trade queues or stand aside if you fell the risk of uncertainty is too high.  Remember, there is no shame in protecting your trading capital; in fact, that is one of the primary jobs in this wild business of trading.

Trade Wisely,

Doug

Virus Fear Giving the Bears Strength

by

Volatility reigned Friday as markets gapped up 2.5% at the open, then immediately sold off back to the Thursday close and continued the roller coaster the rest of the day. Overall, there was a 3.5% range on the day and we closed with significant black-body candles, but the gap up left us green overall on the day.  The SPY closed up 1.20%, DIA up 1.87%, and QQQ up 0.79%.  The VXX was down almost 7% to 38.71 and T2122 fell dramatically to 30.43.  10-year bond yields rose to 0.707% and Oil (WTI) was flat at $36.48/barrel.

On Saturday the President’s Trade Advisor Navarro said the White House is looking for another $2 trillion stimulus package focusing on aid to manufacturers.  However, at the same time, Chief Economic Advisor Kudlow was saying we are likely seeing a v-shaped recovery, are into the recovery phase, and its time to end individual relief.  Of course, the White House and Senate Republicans declared the House-passed stimulus bill (that focused on unemployment benefits, relief for state/local government, and extending the PPP program) as DOA.  In fact, Senate Majority Leader McConnell said the Senate will not even take up the topic of additional stimulus until at least July 21, after the Congress returns from summer recess.  So, it is very unsure if, when, or what type of additional stimulus we might see anytime soon. That leaves the Fed.

On the Virus front itself, the global headline numbers are 8,017,847 confirmed cases and 436,125 deaths.  On Monday, the EU reopened its internal borders, albeit under a patchwork of rules and exceptions.  On Sunday the UK reported its lowest daily virus death toll since March, opened stores to the public, and PM Johnson said he may well end social distancing rules on July 4.  However, things are not going as swimmingly in other parts of the world.  In China, a district of Beijing has locked down again after tests at a wholesale market found 49 positives out of 517 people tested (9% positive rate) and now there is a race to test 200,000 other workers in that market who have high-touch, public-facing jobs. India is also seeing a significant spike in cases in consecutive weeks even as reopening continues.

$97 for the next 100 subscribers, then $147

In the US, we now have 2,162,261 confirmed cases and 117,858 deaths reported to date. On Friday afternoon, the CDC said states and localities may need to reimpose strict measures if cases rise “dramatically.” At the same time, overall, there is a slowing of growth in the number of cases.  For example, former epicenter NY, which was slowest to reopen, is seeing the lowest rate of new cases, hospitalizations, and deaths since the beginning of the crisis.  However, 22 states are see increasing rates. This includes record jumps in FL, NC, SC, TX, and CA.  Some states and cities have even paused their reopening plans.   

Overnight, Asian markets were deeply into the red, with South Korea losing 4.76% and Japan down 3.47%.  The best performer was Chinese Shenzhen, which was down only 0.29%. Europe is following suit for the most part, with the three major bourses down 1.30% on average.  However, the minor Belgian and Swiss indices are eking out a green chart so far in the European day.  At 7:30 am, US futures are pointing to a significant gap lower of between 1.5% and 2.5% (the exact opposite of Friday morning).

The major economic news for Monday is very limited, with only the NY Empire Mfg. Index (8:30 am) on tap.  However, TTM, JKS, and MPAA report before the open.

It’s early, but as of now, we’re looking another significant gap down as the fear of virus impacts builds.  With the uptrend broken and assuming the gap, we are now 7%-8% off the recent highs, so there is significant technical damage for bulls to overcome. The sky is not falling yet.  We are still 35%-40% above the March lows.  However, this is clearly the toughest test of the rally we’ve seen.  Stay focused on the short-term chart.  As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

Ed

There are no Trade Ideas for today. However, be aware that the normal distribution of trade ideas has been moved to the trading room and the Members Only App in the future anyway. 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.

🎯 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

|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.

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

Respect the bears!

by

Yesterday we were reminded that no matter how much the government spends in stimulus or the trillions injected by the Central Banks, traders must always respect the bears!  In this incredibly emotional feast or famine market, the daily overnight institutional overnight gaps have become very wearisome.  Unfortunitually it appears to be the new normal, and we should expect the wild volatility to continue as we head toward the uncertainty of the weekend.

Asian markets closed the week lower across the board but managed to recover a substantial amount of the early losses.  European markets are bullish across the board this morning but continue to fluctuate as the attempt to recover from another round of pandemic worries.  US Futures have also seen substantial volatility this morning but continue to point to a sizeable overnight gap up as we grapple with a resurgence of coronavirus infections and hospitalizations.  Buckle up, as it could be another wild rise as we slide into a weekend of unknowns.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have 30 companies reporting quarterly results.  Looking through the list, I can only find one particularly notable report, that being PRTY.

Technically Speaking

Yesterday we were reminded that we must never forget that the bears and always have a plan to protect our capital if they launch an attack.  For some time, there have been clues that the market was extraordinarily overextended, but if you are like me, you’ve grown weary of the overnight institutional gaps.  However, it has become the new normal in this all or nothing, feast or famine market.  Today looks to begin similarly, but this time a substantial overnight gap up.  With coronavirus cases continuing to rise, Arizona announced their hospitals are near capacity. Yesterday’s jobless claims added another 1.5 million unemployed, which is a modest improvement of the prior week but indeed demonstrated just how challenging this economic recovery has become.

Considerable technical damage occurred in the DIA and IWM yesterday as the indexes failed their 200-averages.  The Dow is now less than 850 points away from testing its 50-day morning average, and even with today’s big gap up, we should not ignore the possibility that it might see a test in the near future.  The SPY is in a much better technical situation having closed at it’s 200-average with the big tech firms providing the majority of the price support.  Of course, the QQQ is in the best technical, having only suffered a pullback to test its bullish trend.  As we slide into the weekend, expect a considerable amount of price volatility as traders and investors grapple with the uncertainty of the weekend.

Trade Wisely,

Doug

Gap Up to Pressure Any Greedy Bears

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Fear of a second wave of coronavirus helped the bears take the bull to the woodshed Thursday on what turned out to be the worst day for markets since March.  A 2.5% gap down at the open was followed-up with a steady all-day sell-off with the close near the lows.  The SPY is just below its 200sma, while the DIA gapped clear through it and is halfway to its 50sma.  The QQQ continues to hold its uptrend as it is still above even the 20sma.  On the day, the SPY lost 5.74%, the DIA lost 6.80%, and the QQQ lost 4.95%.  The VXX shot higher to 41.60 and T2122 fell sharply, but remains just inside overbought territory at 82.40.  Bond yields fell sharply as money chased safety, closing at 0.669% and Oil (WTI) fell 8% to $36.36/barrel.

The Fed released data Thursday that showed total US debt (household, corporate, and government) grew by almost 12% in Q1.  It had grown by 3.2% in Q4 of 2019.  The total is now just under $56 trillion.  The largest jump was 18.8% by business, followed by a 14.3% increase from government.  Household debt only grew 3.9% for the quarter.

At the same time, new jobless claims fell again this week to 1.5 million (down from 1.9 million last week).  There have been over 44 million new jobless claims made since the virus hit, but the trend has clearly been getting better in recent weeks.  So, with this week’s significant improvement, it is odd to note that 24 states recorded increases in initial claims.  In the larger context, the continuing claims fell but fell less than expected for the week, down to 21 million.

$97 for the next 100 subscribers, then $147

On the Virus front itself, the global headline numbers are 7,622,021 confirmed cases and 424,325 deaths.  The UK, who followed the US lead and delayed lockdown and social distancing, reports its GDP fell 24.5% (year on year) and 20.4% (month to month) in April.  This was significantly worse than the 18.4% month-to-month contraction that was expected.

In the US, we now have 2,089,825 confirmed cases and 116,036 deaths reported to date.  For the sixth time this month, the state of NC has recorded a record number of hospitalizations.  In TX, the city of Houston is close to needing to reverse its recent reopening measures.  Discussion is underway about whether they need to open a temporary hospital at the NRG stadium, which was built in April, but never had to be used. In Nashville TN, the Mayor has decided to delay further opening after a recent rise in cases in the city.  However, in NY state, they have opened up 5 more regions to business with some restrictions such as restaurants only being allowed 50% of normal indoor seating capacity. 

Overnight, Asian markets were mixed, but strongly leaning to the downside with only Shenzhen and India on the positive side.  Europe is mixed, but strongly leaning to the upside, with only Russia and Greece in the red so far today.  At 7:30 am, US futures are looking for a major rebound from Thursday’s pummeling, pointing to a gap higher of between 1.5% and 2.5% (the exact opposite of Thursday morning).

The major economic news for Friday is limited to May Imports/Exports (8:30 am) and Michigan Consumer Expectations (10 am).  There are no major earnings on the day.

The whiplash appears to want to continue.  It’s early, but as of now, we’re looking at a gap up as big as yesterday’s gap down at the open.  So, Mr. Market seems ready to punish the short-sellers who didn’t take profits at the close Thursday.   And while the uptrend was broken in the large-caps, the QQQ held its channel.  The bulls clearly have significant damage to repair, but a pullback had been long overdue.  So, the sky is not falling and the longer-term trend continues to point higher as of now.  Stay focused on the short-term chart.  Above all don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

Ed

No Trade Ideas for Friday. (It’s payday, think about taking some off the table for the weekend.) However, keep an eye on the trading room and the Members Only App for tickers that come up today. 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.

🎯 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

|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.

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

Near-Zero until 2022

by
Near-Zero

Gaping up and running ahead of the FOMC announcement, the NASDAQ set new record highs once again.  The committee suggested interest rates would remain near zero until sometime in 2022. Still, after the Chairman’s press conference, the bears made an appearance moving the index’s lower with only the QQQ closing the day with gains.  Sadly, this morning rug is pulling out with the market suddenly concerned with the rising coronavirus infections and hospitalizations around the country. 

Asian markets closed lower across the board in reaction to the FOMC forecast.  European markets are also tumbling this morning by as much as 2.50%.  US Futures are plunging this morning and have worsened in the pre-market, suggesting a substantial decline at the open with more jobless data on the way.  Expect significant price volatility.

Economic Calendar

Earnings Calendar

On the Thursday economic calendar, we have short of 30 companies stepping up the earnings reporting podium.  Notable reports include LULU, ADBE, PLCE, PLAY, & PVH.

Technically Speaking

After a choppy beginning to the week as we waited for the FOMC committee decision, it pretty much turned out to be a non-event.  The decided that interest rates would likely remain near 0 until sometime in 2022 and that they will continue appropriate operations to support the economy.  The initial market reaction was bullish, but after the Chairman’s press conference, the bears pushed back, closing the index’s modestly lower.  This morning according to reports, the market is once again suddenly concerned about the second wave of coronavirus with infection rates that have risen the last couple weeks.  There are 9- California counties reporting a spike in new coronavirus cases and hospitalizations.  Airlines and cruise lines are sharply lower this morning, and not surprisingly, some retailers also see bear activity. 

This morning US Futures point to an ugly gap down of 500 points or more in the Dow.  The big question will be the activity in the NASDAQ giants that have seen remarkable bullishness of late and supplied most of the index’s levity.  Should stocks like AAPL, AMZN, GOOG, MSFT turn lower, it could a rather harsh pullback could ensue.  However, if the bulls can continue to show their tenacity of last couple weeks, the selling could be quickly absorbed, and price support levels defended.  Hold on tight; it may be a wild morning with a considerable dose of price volatility. 

Trade Wisely,

Doug

The Fed Delivered But A 2nd Wave Feared

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On Wednesday the large-cap pause continued while the techs tried to keep going.  The QQQ gapped up just over 0.75% and ground sideways until the Fed announcements. Meanwhile, the large-caps gapped only slightly, then sold off shortly after the open.  After the FOMC announcements, volatility reigned with large swings in all 3 indices, closing on a down leg.  On the day, the QQQ was up 1.20% (to another all-time high), the SPY was down 0.56%, and the DIA was down 1.07%.  VXX was flat at 31.13 and T2122 gave back a bit, but still remains deep in overbought territory at 90.91.  10-year bond yields fell to 0.736% and Oil (WTI) rose slightly to $39.06/barrel.

The FOMC seemed to give something to everyone.  The statement promised that rates will remain near zero through at least 2022 (3 years total) and committed to keep on buying assets at the rate of $80 billion in Treasuries and $40 billion in mortgage-backed securities per month.  They also forecast a 6.5% decline in GDP this year (2020), but a massive bounce-back to a 5% GDP gain in 2021.  On top of this Treas. Sec. Mnuchin said that he backs another stimulus plan.  So, traders got everything they could have hoped for…a Fed backstop, unlimited continued easing, and likely more fiscal stimulus to boot.

After the close, GRUB agreed to be purchased by European company Just Eat Takeaway (this was a big loss for UBER who had also been bidding on GRUB).  Elsewhere, sources told CNBC that BA expects to make the first 737 Max recertification flight by the end of June. SBUX also said it is closing 400 of its North American stores while adding drive-through and carryout-only operations to many of the remaining locations.  In positive news, F says they will return to normal production levels by July 6

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On the Virus front itself, the global headline numbers are 7,482,740 confirmed cases and 419,494 deaths.  In India, the spread is getting out of control with major cities’ hospitals out of ICU beds even as they continue to open the economy again.  In China, high-end good sales have rebounded.  For example, Jewelry sales increased by 30% in April and 90% in May compared to the same months in 2019.  Other luxury categories report similar results as the Chinese economy is back to normal. 

In the US, we now have 2,066,611 confirmed cases and 115,140 deaths reported to date.  TX had a third straight day of record coronavirus hospitalizations.  In CA, the 9 most populous counties also reported a spike in cases two weeks after Memorial Day.  The latest data model projections are now forecasting 170,000 US deaths before October (the mean of model ranges of 133k to 290k).  Fear of this resurgence seems to be driving futures today and recoloring the Fed announcements and statements from Wednesday.   

Overnight, Asian markets were strongly in the red all across the board.  The same is true in Europe, where there is no green to be seen in any of the bourses at this point in their day.  At 7:30 am, US futures are going to follow the rest of the world, pointing to a gap down of between 1.5% and 2.5%.

The major economic news for Thursday is limited to May Core PPI and Weekly Initial Jobless Claims (both at 8:30 am).  Major earnings reports on the day are limited to ADBE, LULU, PLAY, and PVH all after the close.

It looks like Mr. Market is going to punish those who got too bullish at the open.  However, the bulls have been on a tear for weeks now and as we said, a pullback has been due.  So, the sky is not falling and the trend continues to point higher as of now.  Stay focused on the short-term chart and keep locking in those profits and moving stops as you go.  As always, above all don’t chase or predict.

Ed

Because of the gap down today we will be posting the Trade Ideas in the trading room and on the Members Only 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.

🎯 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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FOMC Announcement

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FOMC Announcement

Today the market has a lot to digest on the economic calendar with the FOMC announcement and the follow Powell press conference.  The bulls and bears seesawed back and forth in the overnight session and seem to be setting up for a cautious open as we wait for the Fed.  Choppy light volume price action is not uncommon ahead of the announcement, but after anything is possible. 

Asian markets closed mixed but mostly modestly lower as inflation data missed expectations.  European markets are slightly smaller across the board this morning as they wait on the US Central Bank decision.  US Futures point to a relatively flat open with Mortgage Applications spiking 13%, earnings reports, and several potential market-moving reports.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have 36 companies reporting quarterly results.  Notable reports include CHS, DAKT, GES, & RRGB.

Technically Speaking

A mixed set of results yesterday as the Dow broke a 7-day winning streak but he NASDAQ reached out to 10,000 for the first time in history.  Big international tech led the way higher with very few other companies finding the energy to move.  With giants such as AMZN, AAPL, GOOG, FB, and MSFT weighted so heavily in three out of the four major indexes, we no longer have an accurate reflection of what the majority of the stocks are doing.  On the virus front, California is reporting hospitalizations are going up again just one day after Texas hit a new record high of COVID-19 admissions.  Dr. Fauci, the White House health advisor, said on Tuesday that the pandemic in the US is not over. Let’s hope this is not a new trend because another round of restrictions could prove devastating to businesses trying to recover. 

Today the market will have plenty of economic data to digest with reports on CPI, Petroleum Status, and of course, the FOMC decision with the Chairman press conference.  Futures seesawed in the overnight session currently pointing to a flat open as we wait for Jerome Powell to deliver the committee insights into the economy.  It’s relatively common to have light choppy, low volume price action ahead of the announcement, and anything is possible after the fact as the market reacts.  The T2122 indicator continues to suggest an enormously extended market condition, but trillions of dollars pumped into the markets the bears seem to have lost their teeth.  However, we should always keep an eye on price action because a profit-taking pullback could begin at any time.

Trade Wisely,

Doug