The remarkable rally off the lows now faces the bulk of earnings, and we will finally see the actual company impacts of the pandemic. It seems everyone and their dog is attempting to predict what comes next when in truth, anything is possible. Expect significant price volatility, stay focused on price, and remember what we want to happen is not important; what current price action indicates is! Predictions are worthless without price action confirmation.
Asian markets closed mixed but mostly lower overnight as China cuts prime loan rates. European markets are modestly lower this morning across the board as Germany begins to reopen its economy. Reacting to plummeting US Crude prices, the futures point to a Dow gap down of more than 400 points ahead of earnings reports.
Economic Calendar
Earnings Calendar
As we begin the new week and a ramp-up of earnings with 77 companies stepping up to report. Notable reports include ALLY, ACC, EFX, HAL, IBM, MTB, NVR, TFC, & ZION.
Top Stories
US crude price dive over 20% due to the coronavirus crushes the demand and pulling the futures lower this morning. Prices on the May contract for West Texas cured tanked 19% to $14.80 per barrel and could remain under pressure for the next month, as reserves continue to grow.
The Senate is nearing a vote on a 370 billion dollar deal for small businesses that had quickly run out of money due to the virus impacts.
As numbers begin to improve in Germany, the country will start to reopen, allowing some shops, car dealerships, etc. while hot spots around the world such as Singapore, Spain, and Russian continue to spike.
Technical Speaking
The remarkable rally that has recovered more than 50% of the virus sell-off now faces a big week of earnings reports and crude oil prices plunging. The DIA remains under its 50- day average, but the SPY managed to close just slightly above the critical psychological level. Sadly at the time of writing this report, US futures point to a gap down that could produce failure patterns at the 50-day average at the open. The QQQ having surged well past its 50-average is not in jeopardy of failing this necessary technical support, but after rising more than 14% in just 9-day appears quite over-bought in the short-term.
There are those predicting that this current rally will continue with all the Federal spending and the unlimited operations of the FOMC seemingly buying up everything in sight. However, there seems to be an equal number of those predicting that as earnings begin to reveal the actual damage of the virus that we will see a retest of market lows and maybe even new market lows! As for me, I will avoid all the predictions, set aside my bias, and simply trade the chart. The fact of the matter is that retail traders have little to no impact on the direction, so the best course of action is to stay focused on price action sticking to your rules and trading plan. As we wade deeply into 2nd quarter earnings, expect volatility to remain high with enough intr-day whipsaws and overnight reversals to keep us on our toes.
Friday was a volatile day for markets when hope for a treatment drug faded slightly as it became clear only partial preliminary data from an uncontrolled test had been reported. A 2.5% gap-up sold off and then markets wavered most of the day until the bulls rallied hard the last hour. The large-caps closed near their highs, but for a change, the Nasdaq lagged. At day end the SPY was up 2.7%, the DIA up 3.01%, and the QQQ up 0.96%. Accordingly, the VXX fell to 39.05 while the 10-year bond yield rose to 0.642%. Oil got crushed again as WTI fell almost 9% to $18.12/barrel.
On the virus headline front, the world now has 2,421,018 confirmed cases and 165,939 deaths. At the same time, in the US we now have 764,265 confirmed cases and 40,683 deaths. On the bright side, New York said it was “past the high point.” The same seems to be true in New Jersey and Connecticut. However, such statements assume the spread does not resume or at least that any future waves will turn out to be less severe than the first.
The pressure to “reopen American” continued to increase, mostly along political lines, over the weekend. Some opening did take place as Florida opened its beaches and parks. Texas said it will follow suit on Monday and that its retail-to-go businesses can reopen Friday. It’s notable that New York, New Jersey and Connecticut (the virus epicenter in the US) all opened their marinas for boating as well. So, at least recreational areas are starting to open.
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On the small business bailout front (bill 3.5), both Sec. of Treasury Mnuchin and House Speaker Pelosi told reporters they were very close to a deal Sunday afternoon. Details are not clear, but it seems to be looking in the $400-$500 billion additional spending range. This would add another $300 billion to the small business bailout fund, provide $50 billion in disaster loans. Both sides hope for approval from both houses by mid-week. This comes as JPM announced that it already has $26 billion in small business relief applications that still need funding.
Overnight, Asian markets were mixed but mostly red on a Chinese Prime Loan rate cut of 20 basis points to 3.85% for a one-year loan. Oil has continued to be pounded all through the overnight session and at 7:30 am sits at $13.03/barrel (up off a low of $12.43, but even so the lowest price in 2-plus decades for WTI). In Europe, markets are in the red, but generally down less than a percent at this point in their day. As of 7:30 am, US futures are pointing toward a 1%-2% gap lower.
There is no major economic news for Monday. However, on the earnings front, HAL, MTB, and TFC report before the open. CDNS, EFX, IBM, and ZION report after the close.
The uptrend remains strong, but gaps and volatility also are still the norm. Optimism seems to be the rule lately, ignoring any bad economic news or earnings. However, we are in earnings season and we know there will continue to be a stream of both bad economic news and good virus-hope news. More immediately, the massive sell-off in Oil surely signals huge fear over economic demand. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take in a news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist for Monday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
A hopeful virus treatment from GILD and the President presenting a 3-phase plan to begin reopening the economy has the futures hopping and popping this morning as we head into the weekend. This morning’s gap will bring the DIA and the SPY up to test their 50-day averages. Good news for sure, but let’s not forget that more than 20 million Americans are unemployed, and states are running out of funds to cover claims. Stimulus checks have been delayed, and the small business loan program is nearly out of funds. I guess what I’m saying is be careful, chasing this huge gap with the fear of missing out!
Asian markets rallied overnight despite a 6.8 quarterly contraction in the economy and a doubling the virus death toll sitting accounting lapses. European markets are decidedly bullish this morning with the DAX and CAC up more than 4%. US Futures point to a massive gap up heading into a very light day on the economic and earnings calendar. Let’s party, but keep in mind next week we jump headlong in earnings next week. Plan your risk carefully!
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have a little lighter day with just 27 companies reporting results. Notable reports include KSU, MUSA, RF, & STT.
Top Stories
China says its economy shrank by 6.8 in the first quarter by 6.8%, which is the first quarterly contraction in over 28 years. They have also more than doubled the death toll from the virus calling it accounting lapses. Hmm?
The President announces a 3-phase plan to reopening the economy. However, 7-eastern states have already announced they will remain shutdown until May 15th. Sadly the yesterday’s daily death toll nearly doubled the all-time daily high, suggesting just how difficult and uncertain when things may get back to normal.
GILD says their treatment trial is showing promising results but also careful to say there is a lot of testing to go before a treatment protocol is approved and available for mass production.
Technically Speaking
The jobless in this country now total more than 20 million, states are out of unemployment money, and the small business loan program is also running out of money. Banks slid sharply south yesterday, but the market does not seem care as the steep rally continues even as recession looms. Due to what the government calls, glitches have delayed stimulus checks to reach the public. I suspect we will soon hear that more stimulus programs needed and further debit spending on the way.
Yesterday saw the daily death toll nearly double the previous daily record, but despite that, the President unveiled a 3-phase reopening plan putting states in charge of the decision. The announcement that GILD has promising results from early-stage trials has the market leaping higher this morning even though an approved treatment is likely still more than a year away. Back in the old days, they called that market manipulation, but today the market wants to grab on to any ray of hope choosing to ignore the longer-term impacts. So be it, but be very careful chasing such a massive gap heading into a weekend. Next week we dive headlong into 2nd quarter earnings so plan your risk carefully.
Thursday was an interesting day in markets. Another 5.25 million jobs lost (22 million in the last 4 weeks), a big drop in housing starts and Mr. Market looked right past those numbers to a rosier future. Regardless, stocks opened with a slight gap up and then vacillated the rest of the day, closing back near where they opened. As has been the case lately, the tech-heavy QQQ fared better than the other indices. On the day, the SPY closed up 0.43%, the DIA flat at up 0.05%, and the QQQ up 1.82%. All three printed indecisive candles, but the QQQ was the best of the three. The VXX gained slightly to 40.74, while the 10-year bond yield fell again to 0.617 as money continued to chase safety in Treasuries. Oil (WTI) fell again, closing below $20 at $19.58/barrel.
During the day, Eastern states decided to extend their shutdowns through May 15 in a coordinated decision among NY, NJ, PA, MA, CT, DE, RI governors. In the Midwest, the governors of MI, OH, WI, MN, IL, IN, and KY announced they formed a regional partnership to coordinate their own regional economic reopening. Out west, CA Governor Newsome promised new unemployment benefits and incentives to cover health workers who stay on the job.
After hours, BA announced it will resume production at its Seattle-area factories as soon as Monday. This will include 27,000 employees (17% of their workforce) and all the returning workers will be required to wear masks, maintain social distancing and will be provided with both periodic wellness checks and contact tracing for anyone who does test positive. This is the first major business reopening to be announced.
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At the nightly event, the 3-phase approach for reopening the economy was announced. The guidelines are short on definitions (for example, what exactly are “downward trajectory,” “robust testing,” or even “vulnerable people”). However, ANY “one size does not fit all” plan would likely be short on clarifications. The strategy basically looks for a non-specified decline in the rate of new cases to lead to the first phase of easing. The plan puts most of the responsibility on states for decisions, testing, border control (to avoid cross-jurisdiction spread), etc.
In an afternoon call to Governors, the President warned that states should also be prepared to handle new flare-ups of the virus after easing. During that call, there was push-back to the plan, saying more testing should be in place before the reopening is launched. Drs. Fauci and Birx have repeatedly said, testing, isolation, and tracing are the key to controlling the virus spread, as well as increasing public confidence. However, the President reportedly replied that more testing will need to come after reopening because a working economy is a priority.
For reference, the US now processes about 140,000 tests each day (more than any other country on a “total tests” basis, but still very low on a per-capita basis). That amounts to testing only 0.08% of the American workforce daily. So, even if just 10% of the workforce returns to “work away from home” AND we double US testing capacity, we would still only be testing about 1.5% of the active workforce per day. Worse yet, these tests are a picture in time. This means each worker may need to be tested many, many times unless or until an effective treatment or vaccine are available. Is that enough? The President, Dr. Fauci, Dr. Birx, and the Task Force seem to think it could be.
Either way, the President made a tough decision that we can’t wait any longer. When the Governors agree, we will start to reopen (probably along regional lines). If that approach works, great! We’ll get back to some sort of new normal in 2-3 months. If the plan causes a relapse, we’ll just lockdown again, and come up with a different approach. Yes, some people may be lost, but we’re all going to die someday and there’s no way to say someone might not have died at home or from a trip to the grocery anyway. Cold? Maybe. However, there is no good answer for recovering without risk of relapse into a run-away spread. So, we were always going to face this decision unless we decided to wait for a proven treatment or vaccine. And that just isn’t in the cards from a political, economic, or general public patience standpoint.
On that treatment front, some VERY preliminary testing of a GILD drug was leaked Thursday night. This leak showed the drug may have real potential benefits. However, remember that this information is based on the results from only 25% of the study’s patients, was an uncontrolled (no placebo group) test, and looked at only one dosing level. Still, it is a welcome ray of hope and should buoy market spirits (at least for GILD, which rose 15% after-hours on the leak).
Overnight, Asian markets were green across the board. In Europe, markets are even more strongly green at this point in their day. This includes the 3 major bourses (FTSE, DAX, CAC) all up about 4%. As of 7:30 am, US futures are pointing toward a 2-3% gap higher on optimism about the new drug and economic opening.
There is no major economic news for Friday. On the earnings front, CFG, KSU, PG, RF, SLB, and STT all report before the open.
The uptrend remains in place, but gaps and volatility also remain the norm. Optimism seems to be the rule of the morning, but we are also headed into another weekend. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take in a news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist on Friday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
After a dismal round of economic numbers, the bears launched another attack yesterday. Still, the bulls met the challenge holding the selloff above the short-term uptrend and essential price supports. The tech sector remains the strongest as the QQQ holds above the 50-average showing incredible tenacity amid ugly earnings results. Now the focus turns once again the Weekly Jobless claims that so far, the market has been able to shrug off choosing to focus on the FOMC operations. Will the same be true today? Only time will tell!
Asian markets closed mixed overnight, recovering early losses after Australia’s jobs data came in better than expected. With Germany announcing plans to ease the countries lock down European markets cautiously rally this morning. US futures recovered overnight loss and now point to a modestly bullish open ahead of earnings and economic reports. Remember to stay focused on price.
Economic Calendar
Earnings Calendar
On this Thursday Earnings Calendar, we have just over 80 companies reporting results. Notable earnings include ABT, BLK, BK, BX, DHR, DOV, HON, KEY, RAD, SKX, & TSM.
Top Stories
The total number of infections worldwide tops 2 million and over 134,000 people have died. Singapore’s health ministry reported a reemergence of the virus with 447 new infections, while Germany plans to cautiously ease the lockdown.
The IMF warned overnight that it expects Asia to have a zero percent growth rate in 2020 and calling it the worst performance in nearly 60 years as a result of the outbreak.
President Trump stated yesterday that the US has passed the peak of the virus growth, and those lock-down efforts have been successful in slowing the spread. That’s great news, but with the death toll still rising and new hot spots emerging around the country when we can begin ending the lockdown is still unclear.
Technically Speaking
After such a steep rally in the market, yesterday’s selloff amid ugly earnings and shockingly bad economic numbers was not a big surprise. The surprise is how well the market handled the bad news with the bulls working very hard to defend price support levels and even finding the energy to rally by the end of the day. Overnight futures traded lower, but after Australia reported better than expected jobs, numbers markets around the world began to improve. Hopeful news that Germany plans to ease lockdown restrictions and the President saying the US has crested provided additional levity allowing the futures to recover and turn positive.
The DIA, SPY, QQQ, and IWM all held above the short-term uptrend and critical price support levels. The QQQ remains the technically strongest index having recovered its 50-day average with the IWM drags along behind as the weakest. Gold and Bonds were strong yesterday as fears rose early in the day after very disappointing retail sales and housing numbers were released. This morning US Futures point to modestly bullish open ahead Housing Starts, Jobless Claims, and the Philly Fed Survey, including several notable earnings reports. To date, the market has been able to shrug off the historic unemployment numbers perhaps today will be the same with expectations of 5 to 6 million new claims. Anything is possible, so stay focused and stick to your rules.
Wednesday saw economic news dampen markets as Retail Sales came in much lower than expected (largest drop since ’92), more big banks all had huge (oddly very close percentage-wise) misses, and the worst reading in NY Empire State Mfg. Index since 1946 led to a 2% gap down at the open. After a volatile rally most of the day, all the major indices sold off the last hour. As a result, the SPY closed down 2.12%, the DIA down 1.92%, and the tech-buoyed QQQ down just 1.15%. All three posted indecisive candles with the QQQ being a Harami Spinning Top and the others Doji. The VXX closed up 8% to 40.41 while the 10-year bond yield fell to 0.633% as investors chased Treasury safety. Oil (WTI) was below $20 much of the day, but closed at $20.23/barrel on rumors the US government would cap US production by buying more oil for the national strategic reserve.
Meanwhile, in Michigan, there were crowds of unmasked, virus control opponents protesting the state’s stay-at-home order on Wednesday. Two conservative groups had called the protest, but it was apparently adopted by others as a good number were also carrying rifles and protesting gun laws possibly among other things. This follows a much smaller group (dozens) who held the same type of protest in Raleigh, North Carolina for an hour on Tuesday. The point is that some groups are pushing (following the President’s lead, or maybe leading the President?) for an end to virus-control measures that they believe are hurting (the economy) worse than the virus is hurting people. So far, this seems to be a politically-centric phenomenon but certainly bears notice as most still predict months or measures of some kind ahead.
After the close, Bloomberg reported that the small business Payroll Protection loan/grant fund ran out of money on Wednesday night. The Treasury Dept. and the SBA have not announced statistics recently. However, based on the applications processed by just 3 large banks (JPM, WFC, and C) and the SBA saying the average approved loan was $240,000, the math seems right. At his daily rally, the President took the opportunity to blame the lack of replenishment funds (among other things) on Democrats. He also reiterated that it was up to states to do the testing (but the Feds will help if needed) and said he expected states and municipalities to control their own borders to prevent cross-jurisdiction spread. If possible, that too would be a sizable economic obstacle.
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In Germany, PM Merkel announced tentative steps to begin reopening its economy. While most restrictions will stay in place until at least May 3rd, some small shops (less than 8,500sq ft in size) will be allowed to open as soon as next week. The timing of this announcement was a bit odd as coincidentally Germany reported a jump in new cases on the day. In the UK, the cabinet is set to extend its nation-wide lockdown for at least 3 more weeks. In Spain the death toll rose slightly again and the WHO noted that Europe has half the world’s infections (1 million+ cases and 84,000+ deaths) and is not out of the woods. In doing so, it recommended that any EU reopening goes slow to hopefully reduce the chance of more major outbreaks.
On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,096,549 confirmed cases and 135,661 deaths. At the same time, in the US we now have 644,348 confirmed cases and 28,554 deaths.
Overnight, Asian markets were mixed, with Japan, Hong Kong, Australia down, while Chinese markets were up slightly. In Europe, markets are slightly in the green across the board at this point in their day. As of 7:30 am, US futures are pointing toward a small gap higher in front of the big economic news coming in an hour.
Thursday’s major economic news includes Mar. Building Permits, Mar. Housing Starts, Mar. Philly Fed Mfg. Index, and Weekly Initial Jobless Claims (all at 8:30 am). A Fed member (Williams) also speaks at 2pm. Major earnings reports include ABT, BLK, BK, KEY, MS, NUE, and TSM all before the open. ISRG reports after the close.
The uptrend remains in place, but volatility continues to be high and gaps have become the norm. The economic reports at 8:30 am are likely to call the tune for markets today, especially the Initial Jobless Claims that estimates are putting at 5 million. However, the unveiling of general reopening guidelines could lift markets, helping traders again look ahead past the short-term economic news.
Regardless of what happens at the open, in this market, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take.
Ed
No Swing Trade Ideas for your consideration and watchlist today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Tuesday was another crazy day for markets as the strong rebound rally continued in the face of major bank earnings misses, companies dropping forward guidance, and mostly “not as bad as expected” news. The major indices gapped 2% higher and while the large-caps had some volatility, the techs continued to rampage higher. As a result, the SPY closed up 2.95%, the DIA up 2.39%, and the QQQ up 4.35%. As expected, the VXX was down again to 37.40. The 10-year bond yield also fell slightly to 0.747%. However, Oil (WTI), a major barometer of the economy, got hammered again, down 7.5% to $20.74/barrel.
In terms of virus treatments, a French study (84 patients) released Tuesday evening found that the malaria drug hydroxychloroquine does not help COVID-19 patients (at least statistically-significantly). Worse yet, the drug does cause serious side effects. As a result, the study recommended it should be discontinued as a COVID therapy. This “should” have a negative impact as markets can cross off another miracle.
In relation to economic recovery, a Harvard paper published in the Journal of Science Tuesday suggested that in the absence of a new treatment or a faster-than-expected vaccine, social distancing, school closures and stay-at-home orders will be needed until 2022, at least on an intermittent basis. Meanwhile, Dr. Fauci (NIH) said Tuesday afternoon that a May 1 easing target is “a bit overly optimistic.” In addition, he said any easing will be on a rolling basis, not all at once (due to a lack of testing capacity).
On that “Opening” front, another regional group of Governors (this one in the Mid-West) has set up a state-level committee to coordinate when and how to ease their lockdowns. The Governors of California and Connecticut Governors said to ask them again in mid-May what the timeline will be for easing restrictions. However, the President said some will open even before the end of April. He also acknowledged reality, saying it is up to the states to make their own timing decisions and to do their own testing. He also said they (states) can come to the Federal government for help, regardless, they (states) will open very soon, very powerfully, and he will hold the Governors accountable very strongly.
$50.00 discount with code: Privilege
In business news, BA announced that customers canceled orders for 150 of the 737 Max planes last month. AMZN also announced it is slashing affiliate commissions (as much as 63%). The reason behind this move us unclear, but this is another big revenue hit for publishers, social marketers, and other businesses. However, on a positive note, AAPL announced it had shipped 2.5 million iPhones in China during March, a sharp rebound after the worst month ever in February.
In follow-up to Easter’s OPEC+ production cuts, a little clarity may be coming to how President Trump plans to cut US production by 300,000 barrel/day. On Tuesday, the Texas Railroad Commission began discussing production caps for the first time in 50 years. However, there was immediate fierce pushback from companies such as FANG, which said it would halt all drilling in Texas if the state instituted any caps.
On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,016,840 confirmed cases and 126,568 deaths. At the same time, in the US we now have 614,246 confirmed cases and 26,064 deaths.
Overnight, Asian markets were down across the board, South Korea being the exception. In Europe, markets are heavily in the red (about 2% on average) at this point in their day. As of 7:45 am, US futures are pointing toward a 1.5% gap lower on heavy earnings misses from major banks. Oddly all the banks seemed to miss estimates by 45-46%, yet run completely different businesses with different focuses and estimates…funny how that happened.
On Wednesday, major economic news includes Mar Core Retail Sales and Apr. NY Empire Mfg. Index (both at 8:30 am), Mar. Industrial Production (9:15 am), Business Inventories (10 am), and Crude Oil Inventories (10:30 am). Major earning s reports include ASML, BAC, C, GS, PNC, SCHW, UNH, and USB all before the open.
It appears traders have been smoking that hopium, “pricing markets for perfection” amidst what certainly appears to be massive economic uncertainty. Meanwhile, the major analysts and economists are saying the downturn will likely be the worst seen since the Great Depression, with literally millions of small businesses at risk of closing and tens of millions of loans at risk of default. Something has to give…both can’t be right.
While the uptrend continues, we are now in a very uncertain earnings season and the economic news will continue to be bad for some time. Remember, while it may be time to start dipping your toe in again according to the chart, we need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take.
Ed
No Swing Trade Ideas for your consideration and watchlist today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
With the US economy mostly shutdown and no certainty as to when it may begin to reopen, the indexes have displayed the power of the Fed and its multi-trillion dollar operations. The Dow has retraced 50% of the selloff while the AMZN led QQQ has recovered more than 60% off the March lows. The question now is, can this remarkable rally hold-up as we begin earnings and see the full impacts of the virus in the economic data? After such a strong rally, a pullback or a lengthier consolidation would not be out of the question. Be careful, the fear of missing out is a strong emotion that causes traders to chase and over-trade extended rallies.
Asian markets closed modestly lower across the board after the IMF warns a severe global recession on the horizon. European markets are pulling back this morning as they weight the massive economic impacts after the IMF warning. US Futures point to a substantial overnight reversal ahead of big bank earnings and several economic reports that may prove to be market-moving.
Trade Wisely,
Doug
Due to a computer issue the rest of the blog will not appear today. Sorry for the inconvenience.
All the uncertainty about the pandemic business impacts will begin to come to light with the kickoff of 2nd quarter earnings. With there will be companies that have benefited from the pandemic, most will likely suffer profound impacts. Expect significant volatility, stick to your rules, and stay focused on price action. Trying to predict and biased trading with so much uncertainty will be very dangerous.
Asian markets closed in the green across the board last night as Chinese exports fall less than expected. European markets are flat to slightly positive this morning as they mull a lock-down exit strategy. US Futures put on a brave face ahead of the earnings kickoff, pointing to a substantial gap up open. Tighten your seat-belt; this could be a wild ride!
Economic Calendar
Earnings Calendar
Today we begin the 2nd quarter earnings calendar with more than 70 companies reporting. Notable reports include JNJ, JPM, FAST, INFY, JBHT, and WFC.
Top Stories
While US officials talk about reopening the country, the UK is likely to extend the lockdown. Cases in Germany jump by more than 2000, Singapore reported 386 new cases. India continued its lockdown until May 3rd, with Russia hitting a new record in daily infections of 2774. There are now nearly 2 million cases worldwide with the virus as the US quickly approaches 600,000 infections.
JPM reports this morning, but one has to wonder with such uncertainty looking forward, how the numbers can be meaningful. The SEC has told companies not to be too concerned if their guidance changes rapidly, and some have suggested that may companies will suspend guidance altogether.
Technically Speaking
After an uncertain and choppy day of price action, the overnight futures market surges upward ahead of the 2nd quarter earnings season kickoff. With the Fed seemingly buying up everything in sight, including junk bonds to bolster the market, it would appear they are worried about the earnings season. While fighting the Fed is a bad idea, it’s hard to imagine that company earnings could be anything other than dismal. With there will be companies such as AMZN, WMT, KR & COST that may well benefit from the lockdown, the vast majority have suffered devastating impacts. Expect this earnings season to be extremely volatile. One thing for sure it won’t be boring!
The current bullish short-trends are holding support levels, but the potential for big price moves add significant risk to an already very challenging market condition. While there is tremendous hope we have seen the worst of this crisis, we can not rule out the possibility of another test lower as the real business impacts are finally revealed. What we want to happen or what we might think will happen doesn’t matter. What matters is that we set aside our bias, focus on the price action remaining disciplined to our trading plan and rules to ride out this earnings season with success.
Monday started with a small gap down and then a selloff that more than faded all the progress the bulls had made since Wed. morning among large-caps. However, the tech-heavy QQQs bucked the trend by rallying all day after the gap down. At the end of the day the bulls had pushed back up toward the open to where the SPY was down 0.92%, the DIA down 1.25%, but the QQQ up 1.08%. The VXX fell again to 40.68 and 10-year bond yield rose to 0.762%. Oil (WTI) fell despite Sunday’s OPEC+ production cut deal as it closed at $22.60/barrel. From a technical standpoint, the QQQ printed a bullish engulfing candle and SPY printed a black hammer with both of the large-caps avoiding printing Evening Star signals.
During the day the President felt the need to assert his belief that he had sole power (total power) to ReOpen America Businesses. Contrary to his assertion, the Governors of six Northeast states (NY, NJ, RI, DE, CN, and PA), which actually issued lock-down orders, formed their own state-level working group to coordinate their own decisions on the matter. Meanwhile, out west, the states of CA, WA, and OR also formed a similar regional working group. The key take-away is not the President’s belief or even the political struggle.
The key point is that the President is obviously feeling a lot of pressure from economic advisors and business interests to get the economy up and running again. However, at the same time, the NY Fed announced Monday that it is starting to scale back its recent emergency interventions (repo operations) “in light of the more stable markets.” So, it seems the Fed is less jittery about market conditions than the White House (and others) seem to be about the economic situation. Since markets are said to be a discounting machine that front-runs the economy by 3-6 months, maybe this is an indication we are only looking to turn the corner by next year.
However, on the topic of economic pain, Ginnie Mae (FHA and VA loans) reported that its mortgage bailout requests had risen 78% in the last week and are currently at just under 6% of the loans they are servicing. So far, Fannie Mae and Freddie Mac forbearance requests are still at a much lower 2% level. So, even at this early point in the economic fallout, mortgage repayments are already showing stress.
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On the longer-term outlook, a non-partisan watchdog (Committee for a Responsible Federal Budget) released estimates that the US federal deficit for the year will top $3.8 trillion for 2020…even if Congress does not approve any more stimulus/relief (which they almost certainly will). That represents almost 19% of the economy and is the highest deficit as a percentage of GDP since 1945. The same group estimates this will lead to total public debt equaling total GDP by the end of October (roughly $20+ Trillion). They also warned their numbers may well be on the low side due to using conservative estimates.
On the virus front itself, the global headline virus numbers have now reached 1,936,700 confirmed cases and 120,568 deaths. In Asia, the number of cases is picking up again, with relatively large increases in places like Singapore. However, new Chinese cases fell back below 100 again. In Europe, the UK said it is likely to extend its lockdown as far as late May. Meanwhile, in Germany, the country’s Health Minister said they have begun plans to implement a gradual recovery in a step-by-step fashion. As in the US, no timelines have been announced yet and they will be seeking a balance between preventing new outbreaks and economic recovery.
Meanwhile, in the US we now have 587,173 confirmed cases and 23,644 deaths. The pace of increase in new cases continues to slow in the worst-hit areas like NY, NJ, and MA, which reported a lower number of new cases. The rate of new deaths is also starting to decline but that statistic continues to lag the reduction in new case rates.
Overnight, Asian markets were green across the board, as China’s March Trade Data came in down, but much better than expected. (Down 6.6% vs. a 14% drop expected.) In Europe, markets are mixed, but mostly green at this point in their day. As of 7:45 am, US futures are pointing toward a 1.5% gap higher on early mixed earnings news (JPM earnings way down, but explained it as stockpiling reserves for the virus impact, JNJ cuts outlook but beat on revenue and raises dividend, etc.).
On Tuesday, major economic news is limited to Mar. Imports/Exports (8:30 am). On the earnings front, DAL, FAST, FRC, JNJ, JPM, and WFC all report before the open. JBHT will report after the close.
While the uptrend continues, we are now entering a very uncertain earnings season. Do not be surprised if reports come in spotty (good in some cases, bad in others) as supply and demand pressures hit different industries at different times and some companies spin the story one way while others spin it another. Remember, while it may be time to start dipping your toe in again, we need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take.
Ed
Swing Trade Ideas for your consideration and watchlist: AMD, ATVI, INTC, NVDA, ANSS, BABA, JD, AMGN, BMY. Trade smart, take profits along the way and trade your plan. 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.
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🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
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🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
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
