Bulls Come Back From 4th in Good Mood

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On Thursday, bulls gapped markets up 1.25% on better than expected June Job creation and then got another half percent follow-through.  However, at 10 am the floor fell out and the rest of the day was a volatile selloff.  The session ended with ugly black candles that closed near the lows.  However, keep in mind this was after the gap-up and it was a pre-holiday “virtual Friday.”  At the close, SPY was up 0.55%, DIA up 0.43%, and QQQ up 0.68% to a new all-time high close.  VXX fell again to 32.32 and the T2122 (4-week High-Low Ratio) remains in the mid-range at 63.89.  10-year bond yields fell to 0.669% and Oil (WTI) climbed back about the magic $40 level to close at $40.29.

On Sunday, BRKB bought the natural gas transmission and storage assets of D for $10 billion (cash and debt assumption).  This increases the BRKB share of the US natural gas transmission market to 18%.  D says it will use $3 billion of proceeds from the deal to buy-back its own shares toward year-end, but cut its dividend immediately.  Later, in another story, D also canceled a joint venture with DUK on an Atlantic coast pipeline.

However, the main storyline remains the conflict between economic recovery and the spread of the virus.  Related to this, on Sunday, GS announced a revised the 2020 US GDP forecast downward again.  They now expect that new state-level restrictions and changes in behavior by the public will reduce Q3 growth from 33% to 25%, which should also result in a 4.6% contraction in annual GDP.  That number is down from their prior 4.2% contraction forecast. 

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In the US, the numbers show we’ve now had 2,983,155 confirmed cases and 132,571 deaths. The case count continues to surge unchecked, as the percent of tests that come back positive keeps climbing and we have about 45,000 new cases per day in the US.  For example, FL now exceeds 14% positive and TX exceeds 13% positive results on tests.  Two TX counties have reached full capacity on hospital beds and ICU beds and are urging residents to shelter-in-place in an attempt to avoid new cases.

Globally, the numbers have reached 11,586,780 confirmed cases and 537,372 deaths.  The W.H.O. reports this includes over 200,000 cases in a day globally for the first time on Saturday.  In Europe this weekend, ECB President Lagarde said she expects about 2 years of disinflation pressure caused by the virus. As a result of this, she said the ECB will also “keep monetary policy extraordinarily loose.”  This comes as Spain locked down two regions again amidst a 20% increase in cases for the week.  In Asia, Australia is closing the border between its two largest-population states as outbreaks continue in many areas of those states.

Overnight, Asian markets were strongly green, with China leading the way (and on increased trading volume).  The only red came in Australia and Thailand.  Europe is following Asia’s lead as every European exchange is up at least 1% at this point in the day.  The big 3 bourses are averaging a 1.8% gain at their mid-day.  As of 7:30am, US futures are looking to follow the rest of the world to build on last week’s momentum. Right now, all 3 major US indices are pointing to a gap higher of over 1.1% at the open.

The major economic news for Monday is limited to June Services PMI (9:45 am) and June ISM Non-Mfg. PMI (10 am).  There are no earnings reports on the day.

As I said earlier, the market is torn between recovery hope and the virus.  However, bulls have not shown any real fear in months.  A Bloomberg talking head summed the market up nicely last evening.  “Good data is great and markets go up.  Bad news is great, because it means more stimulus and markets go up.  Short of Armageddon, the bears are can’t win this fight.”

That being the case, we can’t take too much away from Thursday’s ugly candles.  Regardless of the way the candles looked, price continues to rise.  So be careful, but remember trading is a risk business.  Follow the trend, but 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.

🎯 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

New Records

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The NASDAQ soars to new record highs, as does the number of coronavirus infections across the country.  As business once again close and state rollback reopening plans, the market appears to have no concerns whatsoever, pointing to a substantial gap ahead of the holiday shutdown.  Bad news has become good news, and the good news is now seen as excellent news, and no price is apparently too high for the bulls.  Today is all about the jobs, then expect volume to drop off quickly as we head into an early market close for the holiday.

Asian markets closed higher across the board even as hundreds of protesters were arrested in Hong Kong under the new security laws.  European markets trade sharply higher this morning boosted by vaccine hopes with banks up as much as 4%.  Ahead of employment data and jobless claims, the US Future point a gap open even as virus numbers surge to a new daily record high.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have just seven companies reporting results.  The only somewhat notable report is that from KFY.

News and Technical’s

As we hit a new daily record high of coronavirus infections and states rollback reopening plans, the US Futures point to new record highs.  California has once again closed all indoor operations for about 70% of the States population due to rising numbers.  New York has also announced to rollbacks, and Apple said it would close 30 more stores across the country in response.  Congress extended the paycheck protection program, and it looks as if Congress is moving forward with another round of direct payments to taxpayers that could be as much as $6000 per household.  With MSFT and AMZN leading the way, the QQQ set new record highs yesterday with the DIA and IWM closing the day slightly lower. 

Today we get both the Employment Situation number and the weekly Jobless Claims.  If the consensus estimates are correct, the rehiring last month is likely a new record since the numbers have been tracked all the way back to 1939.  Looking at the market, the millions that remain unemployed and the current round of further state shutdowns don’t seem to matter.  Bad news is good news, and good news is excellent news as there appears to be no price too high as stocks continue this historic rally.  One has to wonder if the upcoming earnings can support current market prices.  Only time will tell.  Keep in mind that we have an early market close today, and volume is likely to fall off quickly after the morning reports as traders head out for the 3-day weekend.  Have a safe and fantastic 4th of July, everyone!

Trade Wisely,

Doug

Vaccine Hope Rallies the Bulls

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A leaked (but not peer-reviewed) study from PFE showed they have a drug that may artificially create virus antibodies.  This certainly helped market sentiment.  Regardless, the bulls reversed overnight profit-taking and gapped markets up slightly.  The rest of the day was rollercoaster ride sideways.  At the close, the QQQ did back off of all-time high resistance but still ended at a new all-time high close.  Both of the large-cap indices fared worse, leaving high wicks.  Still, SPY closed up 0.72%, DIA down 0.20%, and QQQ up 1.17%.  The VXX fell to 32.90 and T2122 climbed to 74.60.  10-year bond yields climbed to 0.674% and Oil (WTI) rose to $39.71/barrel.  

During the day, the President told Fox News that he supports another round of direct payments to Americans.  He went on to say he even wants to give out more money than Democrats (proposed back in May), but he wants it done properly.  This reverses his “dead on arrival” statements about the Democratic plan.  The move may be a political maneuver or may signal a change in his view of virus impact.  Either way, the idea of more money in the hands of Americans can’t help but be bullish for stocks.

The main story is still the virus.  More states rolled-back reopening measures such as indoor dining/bars (CA, NY, MI).  In PA, Governor Wolf also announced an order to require the wearing of masks state-wide. OR Governor Brown ordered the same thing for her state.  However, while President Trump said “he’s all for masks” he doesn’t feel we need a national mandate and still thinks the virus will just disappear someday. 

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In the US, the numbers show we’ve now had 2,780,152 confirmed cases and 130,798 deaths.  This includes another record day nationally, with over 50,200 new cases confirmed across the country.  TX and NC were among the states that reported a record increase in cases on the day.  In CA, Governor Newsom ordered the reclosure of all indoor activities (including businesses) in the state’s 19 most-affected (and populated) counties.  At a national business level, MCD has paused their reopening for at least 21 days and AAPL closed 30 more stores (77 total now) in the hardest-hit areas.

Globally, the number of cases has reached 10,834,159 confirmed cases and 519,582 deaths.  The W.H.O. said even some countries who had success controlling the virus may well need to reinstitute lockdowns.  In Tokyo, the new outbreak continues as the city reported 100 new cases (still very manageable, but growing and they are considering reinstituting quarantine measures).  In Australia, a scandal has hit as they have now traced the source of the new Melbourne outbreak. It seems hotel staff repeated had sex with different guests while the hotel was under quarantine…which if you have to get the disease certainly isn’t the worst way to contract it.

Overnight, the PFE vaccine news buoyed markets across the globe.  In Asia, markets were strongly green (with the odd exception of Japan, which just eked out a positive close).  In Europe, the same is true, with 1% or more gains across the major bourses. As of 7:30 am, US markets are looking toward the same type of day with futures now pointing to a gap higher of between 0.50% (QQQ) to 1.08% (DIA).

The major economic news for Thursday includes Jun Avg. Hourly Earnings, Import, Exports, Trade Balance, Weekly Jobless Claims, Jun Nonfarm Payrolls, and Jun Unemployment Rate (all at 8:30 am).  There are no major earnings reports on the day.

Just in case you missed it, today is virtual Friday ahead of a 3-day weekend.  So be sure to pay yourself and lock-in some profits ahead of a long news cycle.  The bulls have been running the last 3 days and the downtrend is broken.  However, only the QQQ can technically be said to be in an uptrend.  So be careful getting too far out on the bullish limb.  As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).  And have a safe and enjoyable long weekend.

Ed

Daily trade ideas have been moved to the trading room and the Members-Only Phone App. Trade your plan, take profits along the way, and smart. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/ETFs we mention and talk about in the trading room are not recommendations to buy or sell.

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

🎯 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

Biggest rally since 1987

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After a late-day surge, the market closed inking the most robust quarterly rally since 1987 fuled by trillion upon trillion of stimulus and historic central bank operations.  However, immediately after the cash close, the futures began selling off and now point to a substantial gap down at the open, taking back most of yesterday’s rally.  With a long weekend beckoning traders to extend vacations, look for volumes to decline over the next couple days after the morning reaction to earnings and economic news.

Asian markets closed mixed but mostly higher after June manufacturing activity beat expectations.  European markets are decidedly bearish this morning with indexes declining by as much a 1.50%.  US Futures point to a gap down open ahead of a big morning of economic data and worries of rising virus infections weigh on the market.

Economic Calendar

Earnings Calendar

On the 1st day of the 3rd quarter, we have 13 companies stepping up to report quarterly results.  Notable reports include M, STZ, CPRI, & GIS.

News and Technicals

The last day of the 2nd quarter spent most of the morning session chopping in a narrow range, but in the afternoon, the bulls seized control, pushing the index up into the close.  Thanks to the trillion upon trillion in central bank operations and governmental stimulus, we had the most robust quarterly rally since 1987.  Interestingly enough, as the market surged higher into the close, the Absolute Breadth Index declined, and the VIX held above a 30 handle.  Gold and silver also sharply rallied often considered a safe-haven trade.  During testimony to congress, Dr. Fauci, the White-House health advisor, said the coronavirus outbreak is going to be very deturbing and may top 100,000 new cases per day.  Yesterday the US reported just over 46,000 new infections and more than 750 further deaths.  As the death toll approaches 130,000, Goldman Sachs called for a national mask-wearing requirement in public to save the economy.  During the night, the Senate voted to extend the small business coronavirus relief program called the Paycheck Protection Program through August 8th.  Also during the night, Hong Kong makes its first arrests just one day after China’s new so-called national security law.  The law says that any person that acts to undermine national unification faces punishment up to a lifetime in prison.

Yesterday’s rally pushed the DIA up to test its 500-day moving average, but by the close was unable to muster the energy to break above.  The SPY comfortably held above its 200-day while the IWM remained substantially below.  The DIA, SPY, and IWM are still within a short-term downtrend while the QQQ continues to dominate the market with MSFT and AAPL doing the majority of the lifting yesterday.  Immediately after the cash close yesterday, the futures began to selloff and now point to a significant gap down this morning.  With a busy economic calendar, the next 2-days and rising concerns on the impacts of the rising pandemic, anything is possible as we approach the 4th of July market shutdown.  Expect volume to begin to decline as traders take off early to extend their vacation time.

Trade Wisely,

Doug

New Quarter Long Weekend Pause?

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I suppose window-dressing was the order of the day Tuesday as a flat open gave way to a more-or-less all-day rally with the exception of profit-taking the last 5 minutes.  The results were that the SPY gained 1.47%, the DIA gained 0.75%, and the QQQ gained 1.96%.  This capped the best quarter since 1998 as the rally has been strong off the March Lows. The VXX was down to 33.95 and T2122 remains in the mid-range at 65.91.  Oil (WTI) fell slightly to $39.35/barrel and the 10-year bond yields gained just a touch to 0.656%. 

Last night, the Senate unexpectedly approved an extension of the PPP loan/grant program as Democrats were granted a last-minute pushback on the expiration.  Republicans had resisted even discussing additional relief until after recess (“maybe it’s not needed” grounds) until the surprise last-minute “unanimous consent” sought by Democrats was granted.  However, this move is largely symbolic, as the program was set to expire with over $130 billion in unrequested loan/grant money available.

The main story remains the virus.  In the US, the numbers show we have now had 2,727,996 confirmed cases and 130,123 deaths.  There were over 48,000 new cases on the day.  During his Senate testimony, Dr. Fauci (HHS) again sounded the alarm.  He said states probably opened too early and few followed the Task Force or CDC advice.  In particular, he noted that pushback against scientific advice is very concerning (referring to the government as well as public pushback).  He said that we now have over 40,000 new cases per day on average and he will not be surprised if we reach 100,000 new cases per day if changes aren’t made fast.

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Globally, the number of cases has reached 10,614,353 confirmed cases and 514,622 deaths.  In Europe, the last intra-EU border was opened as Spain-Portugal crossings reopened after a 3-month shutdown.  In Australia, Melbourne has locked down again after 2 weeks of double-digit percentage increase in new cases.  The IMF reported today that Asia’s economy will shrink this year (-1.6% projected decline) for the first time in living memory.  This came as both Japan and South Korea evaluate the next steps after new clusters were found in Tokyo and Seoul.

Overnight, Asian markets were mixed, with China and most of the smaller markets higher, but Japan South Korea and New Zealand lower.  In Europe, markets are red almost across the board.  (Greece being the lone green on the board.)  This comes despite better than expected Mfg. PMI data out of Germany.  However, it is worth noting that the DAX was also hit by a technical glitch that caused volume data to lag at the start of its session.  As of 7:30 am, US futures are all red, down from 0.45% (QQQ) to 1.00% (DIA)

The major economic news for Wednesday includes ADP Nonfarm Payroll (8:15 am), Jun Mfg. PMI (9:45 am), Jun ISM Mfg. PMI (10 am), Crude Oil Inventories (10:30 am), and FOMC Meeting Minutes (2 pm).  Major earnings reports include CPRI, GIS, M, SCHN, and STZ all before the open.

As we start the new quarter and ease into the long weekend ahead, it looks like markets may take a pause this morning.  We did break the downtrend yesterday but have not started a new short-term uptrend yet.  In addition, virus-related news will continue to be widespread, but Bulls have paid no notice so far.  Just don’t get too far out on the bullish limb yet.  Take some profits before the weekend, especially since it will be a long one.  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.

🎯 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

Roller-coaster Ride

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Roller-coaster Ride

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.

Trade Wisely,

Doug

Volatility Likely As Quarter Ends

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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.

$97 for the next 100 subscribers, then $147

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.

🎯 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

Crucial Psychological Support

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Crucial Psychological Support

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.

Trade Wisely,

Doug

Virus Surging Here But China Recovering

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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

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Delay Reopening Plans

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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.

Trade Wisely,

Doug