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Bulls Look To Follow-Up Big Week

June 8, 2020 by Ed Carter

The May Unemployment Report came in much better than expected and the bulls were off to the races Friday. After an almost 2% gap higher, a morning rally drove us to the highs by late morning. A grind sideways in a tight range took over for several hours, then profit-taking the last hour of the day pulled markets back into what the Bears might call a Shooting Star candle in the SPY and DIA. On the Day, DIA gained 3.12%, SPY gained 2.59%, and QQQ gained 1.98% (closing at an all-time high). The VXX fell below 30 for the first time in 3 months to 29.17 while the T2122 4-week High-Low Ratio proved it could go higher to close at 99.26. At the same time, 10-year bond yields rose to 0.893% while Oil (WTI) gained over 4% to close at $38.97/barrel. The Dow was up almost 7% on the week and the S&P up almost 5%.

On Saturday OPEC+ agreed to extend their production cuts for one more month even as oil prices have more than doubled in the 7 weeks since the start of the cuts. The one fly in the ointment is compliance to cut promises (some countries having only cut one-third as much as promised). Regardless, the cut extensions are good news for US shale producers who need prices where they are now or higher to make a profit.

Bloomberg reported on Sunday that sources tell them AAPL is looking to get further into the finance business. No word, on whether this is due to a demand slump. Either way, AAPL is reportedly preparing to sell their products and services via installments with either “6mo. no interest” or “12mo. no interest” payment plans. The move would have the additional benefit of forcing more adoption of the Apple Card as that is how payments would be managed.

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Elsewhere on Sunday, in China, it was reported that May exports fell 3.3% year-on-year, after a surprising gain in April. However, May imports were down almost 5 times more than exports. As a result, China had a record trade surplus overall for the month, shipping almost $63 billion more than it imported. While the May numbers were bad, both the imports and exports handily beat average economist expectations reported by Reuters. It’s also worth noting that the US trade deficit with China widened by another $28 billion during the month.

On the Virus front itself, the global headline numbers are 7,110,306 confirmed cases and 406,474 deaths. New case rates keep falling in the countries hit early. However, South American, the Middle East, and Africa all have exploding rates. The global daily new case number has grown to 100,000 per day for over a week, that is the highest daily average seen so far. Responses continue to vary, for example Brazil decided to simply stop reporting the number of new cases or related deaths as of the end of last week.

In the US, we crossed the 2 million case mark this weekend and now have 2,007,531 confirmed cases and 112,471 deaths reported to date. NYC has finally met the CDC guidelines and will begin the first phase of reopening today. At the federal level, an HHS Dept. official told CNBC the govt. supply of GILD’s Remdesivir (the only proven coronavirus treatment, which cuts hospital stay just over 25%) will run out at month-end. Speaking of GILD, over the weekend AZN approached GILD about a potential merger but were told there was no interest.

Overnight, Asian markets green across the board again, but still very mixed. India was up over 3% and Japan 1.4%, but at the same time China, Hong Kong, South Korea, and Australia were dead flat. In Europe, stocks are mixed on either side of break-even at this point in their day. At 7:30 am, US futures are also mixed, with the NASDAQ just on the red side of flat, the S&P up 0.4%, and the Dow looking to gap up 0.7%. There are no major economic news or earnings reports on Monday.

The bulls have been running rampant, but Friday’s high wick may show some over-extension concern at this point. However, peaceful protests and no major economic stories did nothing to do dampen spirits over the weekend. So, Monday could see some follow-through to last week’s run. Don’t bet against the trend unless you’re doing it to hedge, but remember a pause or pullback is normal in uptrends. So, stay focused on the short-term chart and lock in profits as you go. Above all, don’t chase or predict.

Trade ideas for your watchlist and consideration: FNGU, SNAP, UNH, SQ, HD, ORCL, PYPL, DRI, CRWD, ZS. 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

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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Relentlessly Bullish

June 5, 2020 by Doug Campbell

With the Employment Situation pending with an expectation one of the worst reports in history, the bulls remain relentlessly bullish. Futures suggest yet another overnight gap after a day sluggish price action that struggled to find buyers until the last minutes of the day. Don’t fight the bull party be have a plan when the music stops because it could bring out a wave of profit-takers at any time. The bears are nowhere to be seen, as they have been lulled to sleep with piles and piles of Central Bank spending government stimulus.

Asian markets closed the week higher across the board, and European markets are all green this morning. Ahead of job numbers, the US Futures can see only bullishness expecting another big gap before the release.

Economic Calendar

Earnings Calendar

On the Friday earnings calendar, we have just nine companies reporting today, with the only particularly notable being TIF.

Technically Speaking

What is there to say about this market except for relentless bullishness that occurs mostly in the overnight futures session. After a day of very lethargic and slightly bearish price action, another surge in minutes of the day the Dow rose more than 80 points to close day green. This heading into the Employment Situation report, we have yet another institutional overnight gap suggesting the Dow will open up more than 300 points.

There is nothing left to but hold on tight and enjoy the ride and stay vigilant because it could end with the same extreme price action. Have a wonderful weekend everyone!

Trade Wisely,

Doug

Bulls Set to Ignore Economic News Again

June 5, 2020 by Ed Carter

As mentioned yesterday, the bulls paused Thursday. Bears might try to argue that resistance held, but the candles don’t exactly scream “failure” since all 3 major indices printed indecisive candles (Doji or Spinning Top). More to the point, there was no power behind any bearish move to this point. On the day, SPY closed down 0.25%, DIA closed up 0.05%, and QQQ closed down 0.71%. VXX was also flat, down slightly to 30.85 while the T2122 4-week High-Low Ratio climbed again to 98.84 (extremely overbought). 10-year bond yield rose to 0.823% as money left bonds, while Oil (WTI) rose just a bit to $37.32/barrel.

Before the open, initial jobless claims were worst than expected (1.877 million vs 1.7 million estimated) and continuing claims have reached 21.5 million. This has led to expectations that the May Unemployment rate will exceed 20%. However, the Fed also increased (initially $500 billion) and extended the length of its bond-buying program through at least June 2021. Elsewhere, the White House said they expect the next stimulus bill to be about $1 trillion, despite Senate Republican objections to any more stimulus for now.

In business news, after the close, AVGO warned of weak demand for smartphone components in their conference call. F also decided to postpone the return to work of salaried workers until September. In addition, JCP announced it will close 154 more stores as part of its bankruptcy exit plan and the largest mall operator in the US (SPG) is suing GPS over skipped rent payments the last couple months.

On the Virus front itself, the global headline numbers are 6,726,982 confirmed cases and 393,616 deaths. In Spain, a new study found that 5.2% of the population has virus antibodies (has had coronavirus). Meanwhile, France reported that its outbreak is now “under control” largely because the public has accepted and worn masks. In the UK it was announced that public transport operations will resume on June 15, but all riders will be required to wear masks.

However, in the US, where the spread has been the worst, we have 1,924,189 confirmed cases and 110,179 deaths reported to date. The Director of the CDC told reporters he is seeing far too many people not following CDC guidelines for reopening, including not wearing masks or maintaining any social distance. At the same time, the 4 largest air carriers are increasing their number of flights 27% in June, albeit at a reduced capacity per plane.

Overnight, Asian markets green across the board again. European stocks are looking to follow suit, up 1%-1.5% as of midday. At 7:30 am, US futures seem to be falling in-line with the other regions, as they are pointing to a significant gap higher of between 0.8% and 1.2% with just the NASDAQ futures lagging (only pointing to a 0.4% gap up).

Friday’s major economic news includes May Hourly Earnings, May Non-farm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 am). The only earnings reports of note is TIF before the open.

The bulls remain in control, even as Thursday saw a pause. It looks like they want to take markets higher, at least at the open. Expected bad economic news seems no problem again and while protests continue, they are peaceful in a vast majority of locations. Continue to stay focused on the short-term chart and don’t hesitate to lock in profits. Remember its Friday. So, don’t hesitate to put some jingle in the bank ahead of the weekend news cycles. However, don’t bet against the trend unless you’re doing it to hedge. Above all, don’t chase or predict.

No Trade ideas for your watchlist and consideration on Friday. 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Bullish Optimism

June 4, 2020 by Doug Campbell

The bullish optimism was on display yesterday as the Dow surged more than 500 points to challenge its 200-day moving average, and the NASDAQ reached out to test all-time highs. After several days of the strong rally, it is, however, not a big surprise to see the future gaping slightly lower as under the pressure of some profit-taking. Unemployment will be the theme for the next couple days in the economic calendar, but as of late, no matter how grim the numbers, it has only served to inspire the bulls higher. Who knows, perhaps, that trend will continue today.

Asian markets closed mixed but mostly higher overnight fueled on hopes of economic recovery. European markets are currently trading modestly lower this morning as the ECB mulls more stimulus. The US Futures point to a lower open but have pared overnight lows as we head toward earnings and economic reports. As you plan, remember the Employment Situation report Friday morning.

Economic Calendar

Earnings Calendar

On the Thursday earnings calendar, we have our biggest day of quarterly reports this week, with 68 companies stepping forward. Notable reports include DOCU, AVGO, CIEN, DXLG, DLTH, GIII, GPS, HOV, SJM, MIK, SAIC, TTC, MTN, & ZUMZ.

Technically Speaking

Hold on to your seat, everyone I know this will be a surprise, but this morning we have another market gap today! However, rather than gaping up, we see a little profit-taking pressure after a huge bullish day where the Dow rallied more than 500 points. That said, I would not expect the pullback to last long with both the US and the ECB talking about another round of government stimulus. With the NASDAQ testing all-time highs, I’m not sure why they feel the need to stimulate as if debit no longer matters. Health care workers are under pressure as cases in several southern states surge as the US death toll nears 110,000. As protests continue across the country, the officer directly involved now faces 2^nd-degree murder charges. Although the protests have become less violent, Las Vegas has pulled an ad campaign encouraging tourism due to the dangerous unrest.

The four major indexes continue in robust bullish trends that I must admit were much stronger than I would have imagined given the protesting disruption that closed and damaged so many businesses across the country. The NASDAQ challenged all-time highs yesterday just before succumbing to some end of day profit-taking. Today, we have our biggest day of earnings reports this week, and we face another Jobless Claims number where consensus suggests more 1.5 million more Americans applied for unemployment. The good news is the number continues to decline, but the total number of unemplyed is staggering. Thus far, no matter how bad the employment news, the market has rallied, hoping things will be sharply better soon. Perhaps that optimism will overcome the bearish gap down this morning after the report. As you plan forward to remember, the Employment Situation number will be out Friday morning before the market opens and is expected to show numbers this country has not seen since the world war.

Trade Wisely,

Doug

A Pause for Bulls to Catch Their Breath?

June 4, 2020 by Ed Carter

ADP Job Loss Numbers for May came in better than expected and that was all the bulls needed to control the market on the day. We saw a 0.70% gap higher at the open and steady follow-through until the last 10 minutes of the day, when minor profit-taking caused us to close off the high. On the day the SPY gained 1.30%, the DIA gained 2.06%, and the QQQ gained a mild 0.45%. In all 3 cases, the bears could at least make a case that resistance is temporarily holding (all-time highs in the case of the QQQ), but there is no doubting who is in-charge in the marketplace. VXX closed down to 31.11 and T2122 is even higher than the prior close at 97.98. 10-yr. bond yields rose to 0.751% and shockingly Oil (WTI) closed basically flat at $36.72/barrel.

During the day the next step in US-China tensions (trade war fear) took place as the US banned Chinese passenger airlines from flying to US destinations. This is a tit-for-tat response to China’s ban of US airlines (DAL and UAL), which was itself a response to US moves in reaction to the Hong Kong Security Law situation.

In business news, the CEO of PPC and executives of a smaller chicken producer (Claxton Poultry) were indicted for poultry price-fixing on Wednesday afternoon. PPC stock was hammered as a result and the impact spilled over into TSN, which had no executives named in the indictments.

On the Virus front itself, the global headline numbers are 6,596,713 confirmed cases and 388,424 deaths. In Europe, the ECB is set to increase stimulus (buying Euro country bonds) as and when the economic impact numbers dictate according to the ECB President. Mexico has overtaken the US in terms of new daily cases of the virus, which is worrying for a country with far less than half the population and much less medical infrastructure.

In the US, we have 1,902,101 confirmed cases and 109,146 deaths reported to date. New cases in the state of TX were reported to be rising, now at +2.6% for the week. In fact, new case numbers are rising again across the South (with Louisiana being an interesting exception). DAL also announced it will cap plan capacity at 60% of pre-virus levels through September. However, on the positive side, GM announced they will be at pre-virus vehicle production rates by the end of June. Las Vegas has also opened its casinos and hotels at 50% capacity again as of today.

Overnight, Asian markets were mixed, but mostly green again. However, European stocks are red across the board as of midday. (The FTSE rebalanced the members of its indexes, which may have some impact in the UK.) It is also worth noting that both Saudi Arabia and Russia are not backing away from production cuts previously announced now that oil demand has risen again. At 7:30 am, US futures are also pointing to a gap lower of 0.3%-0.5%.

Thursday’s major economic news includes Apr. Imports/Exports, Initial Jobless Claims, Q1 Nonfarm Productivity, Apr. Trade Balance, and Q1 Unit Labor Cost (all at 8:30 am). Major earnings reports are limited to CIEN, GIII, MIK, NAV, SJM, and TTC before the open. Then after the close AVGO, CAL, COO, GPS, RH, and SAIC all report.

The bulls are still in control, but resistance and extension are very real at this point. After an impressive 4-day run-up, a pause may be in the cards. However, the trend and momentum are both in the bull’s favor. Even protest tensions have eased as the non-peaceful episodes have died out. Continue to stay focused on the short-term chart and don’t hesitate to lock in profits. However, don’t bet against the trend unless you’re doing it to hedge. Above all, don’t chase or predict.

Trade ideas for your watchlist and consideration. BA, MGM, WYNN, DRI, ERI, JPM, OIH, ORCL. 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

New Normal?

June 3, 2020 by Doug Campbell

Bullish overnight gaps and low volume chop through the day seem to have become the new normal in the recovery. The rest of this week, we face a significant economic data dump that is likely to reveal historically ugly numbers, but of late, that has only served to bulls to buy. With the NASDAQ easily within striking range of new record highs, I suspect no matter the numbers; we see the tech sector breakthrough this week.

Asian markets closed the day green across the board as optimism of reopening brings out the bulls. European markets also advance as they keep an eye on rising US/China tensions. Ahead of earnings and economic reports, the US Futures see nothing but green pointing to yet another gap up at the open.

Economic Calendar

Earnings Calendar

On the Hump Day calendar, we have less than 40 companies reporting their quarterly results. Notable reports include CPB, AEO, CNK, & GWRE.

Technically Speaking

The new norm for the market seems to be a big overnight gap and grind sideways throughout the day with choppy price action with low volume. Today the futures are pointing to the same bullish gap up open as the bulls near new record highs in the Nasdaq. There was widespread protesting across the nation yesterday afternoon and during the night, but thankfully the majority of the demonstrations were peaceful. Sadly the Pentagon has moved troops into DC to protect the public and defend businesses from looting. In California, the police have taken over Jackie Robinson Stadium to using it as a temporary field jail. Oil price continued to rise yesterday, hitting 3-month highs on expectations OPEC plans to extend the deepest production cuts in history in response to record low demand due to COVID-19 restrictions. Considering we still have a Presidental election to deal with and a possible resurgence of the virus this fall 2020 may continue to provide challenging price volatility and uncertainty for the foreseeable future.

The bulls are clearly in control, and the trillions of stimulus and central bank operations have sent the bears into summer hibernation. With the NASDAQ so close to making new record highs, it would be shocked if the institutions didn’t continue to drive forward if only to get the headline to inspire investors that all is okay. Trends of all the major indexes remain bullish, and as of now, no price action in the charts suggest that bulls are ready to stop buying. The T2122 indicator has pegged at the top of the range, indicating an extremely extended condition as we head into a big day of economic data. That said, it seems no matter how negative the financial numbers reflect on the economy and unemployment; it only inspires the bulls to buy, buy, buy.

Trade Wisely,

Doug

The Rally Remains Strong

June 3, 2020 by Ed Carter

Once again, the bullish run continued Tuesday led by Energy as bulls have their eyes focused out on the future post-recovery. After a small gap higher at the open markets ground sideways most of the day. However, a strong late-day rally closed the market very near its highs. On the day, the SPY was up 0.83%, the DIA up 1.02%, and the QQQ up 0.67%. The VXX fell to 32.49 and T2122 remains very high at 96.59. Oil (WTI) closed up over 4% to $36.90/barrel and 10-year bond yields climbed a bit to 0.684%.

In business news, WFC is worried about loan defaults. As a result, they have stopped making loans to and through independent car dealerships, who they perceive to be servicing riskier customers than major brand dealerships. In the process, WFC has had to drop hundreds of independent dealership customers.

The SBA announced that over $120 billion of PPP funds remain untapped. After an initial rush in the second round, demand for the loans/grants dried up. Small business organizations cited a fear of potential audits if a company takes the loans. Meanwhile, IL became the first state to tap the Fed loan fund, requesting $1.2 billion for a one-year loan after their bond yields rose.

On the Virus front itself, the global headline numbers are 6,474,784 confirmed cases and 382,922 deaths. In Japan, the government issued another “stay home” alert for Tokyo after a “jump” in cases. (They had lifted restrictions on May 25.) Italy proved that the US isn’t the only place with conspiracy theorists as hundreds of protesters gathered in Rome to shout “Liberty” (calling for complete opening and dropping of restrictions) while their leaders claimed the pandemic never existed and is some global conspiracy.

In the US, we have 1,881,256 confirmed cases and 108,062 deaths reported to date. CNBC reported an industry group that cited a survey of restaurants found the number of transactions was only down 18% (year on year) as of the end of May. Of course, carryout and fast food in particular are bouncing back fast, with full-service still down just over 40%. Meanwhile, Amazon has announced plans for a major sale date (similar to Black Friday) for June 22 with the goal of “jumpstarting sales.” It is likely that other retailers will join the movement rather than yield all the sales to AMZN.

Overnight, Asian markets were in the green across the board yet again. European stocks are following suit with the major bourses each up 1-2% as of midday. At 7:30 am, US futures are also pointing to gap higher of 0.3%-0.6%.

Wednesday’s major economic news includes May ADP Non-farm Employment (8:15 am), May Service PMI (9:45 am), Apr. Factory Orders and May ISM Non-Mfg. Employment (both at 10 am), and Crude Oil Inventories (10:30 am). The only earnings reports of note are AEO, CNK, EXPR, GOOS, CPB and VRA before the open. Then after the close CLDR, FOSL and GEF report.

The bulls still see nothing but blue skies and optimism as they look past protests and pandemic damage. The trend, momentum, and a bit of room up to next resistance in the charts should give the bulls the edge again Wednesday. Even intraday swings have lessened very recently. Continue to stay focused on the short-term chart and don’t hesitate to lock in profits. However, don’t bet against the trend unless you’re doing it to hedge. Above all, don’t chase or predict.

Trade ideas for your watchlist and consideration. M, EOG, HAL, CF, MGM, HD, CB, AJG, NCLH, INO. 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Bullish Gap

June 2, 2020 by Doug Campbell

Death, destruction, unemployment, disease, and social unrest is not enough to dissuade the bulls from pushing higher this morning as futures recover overnight losses and point to a bullish gap up open. The index trends and price patterns remain bullish as investors hold on to hopes of a fast economic recovery. As you plan your risk, keep in mind the busy economic calendar in the last half of the week that will have a high focus on unemployment.

Asian markets closed higher as US/China tensions continue to simmer. European markets are also bullish this morning on reopening hopes, and the US Futures point to a Dow gap up of nearly 150 points despite the social unrest and business closures. We have a light day of earnings and economic data, so markets may be a bit more sensitive to the political news cycle today.

Economic Calendar

Earnings Calendar

On the Tuesday earnings calendar, we have about just over 30 companies reporting quarterly results. Notable reports include AMBA, CBRL, CRWD, LE, HQY, SDRL, ZM, BBW, DKS, & ZM.

Technically Speaking

A night after violent protests, looting, and police officers injured, the futures continue to push higher. The President has called the demonstrations acts of domestic violence and stated he would call out the national guard to regain order. Let’s hope it does not come to that. As tensions continue to grow between the US and China, there is news that China may not live up to the Phase 1 trade agreement after the Whitehouse stripped Hong Kong of its special status. Amidst all everything else, the economy has to deal with the threat of a new trade war; it would make a recovery exceptionally challenging. That said, death, destruction, and disease have done nothing to dissuade the bulls from buying up stock despite the ugly economic numbers.

The T2122 indicator continues to signal an overbought condition, but the price action and price patterns of the index charts remain very bullish. Economic metrics, historic unemployment, and soaring consumer, as well as governmental debit, are apparently of no consequence these days. Through this new normal is confusing as technical traders, we must stay focused on the price action. With high volatility and the market’s predilection of significant morning gaps, that can be a dangerous endeavor. Watch for clues of profit-taking lues as we head into a busy economic calendar through the remainder of the week, but until then, trade stick with the market direction as the bulls drive upward.

Trade Wisely,

Doug

Bulls See Good Things Ahead

June 2, 2020 by Ed Carter

The bulls just kept on chugging Monday. A slight red open was met with steady, but slow buying until 2 pm. From there, stocks ground sideways to slightly down into the close. On the day, the SPY gained 0.41%, the DIA gained 0.39%, and the QQQ gained 0.30%. VXX was essentially flat at 33.42 and T2122 climbed further into the overbought territory at 93.18. The 10-year bond yield climbed a bit to 0.667% and Oil (WTI) also gained slightly to $33.56/barrel.

Markets seem to be focusing on the impending (and further out) economic recovery, regardless of current civil unrest and government reactions. UBER, LYFT, and SBUX are the latest to say the unrest is impacting their operations, as they are city-focused companies. In Silicon Valley, CEO Zuckerberg will address a company “town hall” for FB after several hundred employees staged a “virtual walkout” partially related to this on Monday.

On the trade war front, China has apparently ordered state-controlled companies to stop ordering US farm products (particularly soybeans). This seems to come in retaliation for the US response to a new security law covering Hong Kong. However, it is likely just the renaming of an actual lack of need that will reverse once China’s economy has fully recovered and their Pork producers have herds re-established. (China has been fighting African Swine Fever for close to a year and soybeans are a primary hog feed.)

On the Virus front, the global headline numbers are 6,394,415 confirmed cases and 377,971 deaths. While Brazil remains the epicenter of the current wave, Rio de Janeiro will begin opening its economy today. Meanwhile in Europe, Spain, Italy, and the UK all reported their lowest number of new cases or deaths since early in the outbreak.

In the US, we have 1,859,693 confirmed cases and 106,927 deaths reported to date. In a worrying sign, CA reported that their number of new cases has risen 11% in the last 5 days. On the other side of the country, the NY and NJ numbers continue to improve as they are opening further. The Congressional Budget Office released estimates Mondays that coronavirus will cost the US 3% of its economic growth (over the course of 10 years).

Overnight, Asian markets were in the green across the board again. So far Tuesday, European stocks are following suit with the major bourses each up 1-4% at midday. As of 7:30 am, US futures are pointing to gap higher of 0.6%-0.7%.

There is no major economic news on Tuesday. Earnings reports are also very light with only a few that could be considered major companies. On tap for the day are DBRL, DCI, and DKS before the open as well as CRWD and ZM after the close.

Once again, the bulls see nothing but blue skies and optimism. They certainly continue to have the momentum and trend. However, we still see big intraday swings remain on most days. Keep your eye on the short-term chart and don’t hesitate to lock in profits. However, don’t bet against the trend unless you’re doing it to hedge. Above all, don’t chase or predict.

Trade ideas for your watchlist and consideration. MAR, RCL, FAS, GRUB, DISH, ALGN, TLRY, HLF, JD, ADP. 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Twilight Zone

June 1, 2020 by Doug Campbell

With protests growing violent over the weekend and many businesses closing such as WMT, TGT, & AAPL, I feel like we have entered the Twilight Zone seeing the US Futures pointing to a gap up open. Tensions continue to rise between the US/China, a historic unemployment rate, and negative earnings growth, but the indexes charts currently suggest a bullish V-shaped bottom.

Asian markets closed in the green across the board overnight after reporting better than expected factory activity. European markets are mixed but mostly higher this morning, and the US Futures currently point to a bullish open ahead of earnings and economic reports. Expect another wild and crazy week capped off by the Employment Situation report.

Economic Calendar

Earnings Calendar

On the Morning Earnings Calendar, we have just over 30 companies reporting quarterly results. Notable reports include ERJ and ENS.

Technically Speaking

Stocks finished the week on a mixed day of trading after the President announced that Hong Kong no longer enjoys the US special trade status. He also mentioned that Chinese companies traded in the US would come under scrutiny for there accounting practices to protect US investors. During the same press conference, we learned that the US has withdrawn from the World Health Organization. Hundreds of WMT, TGT, AAPL, and other stores have once again closed, but this time it’s self-inflicted due to rioting and violent protests. According to a new survey, global CFO’s have grown more negative on the economy, giving its worst rating in history. They see companies taking another coronavirus big hit in 2020. Virus blamed deaths in the US now top 106,000.

With tensions between China and the US rising, widespread protesting closing down businesses, and lingering virus impacts, US Futures seem to be ignoring the situation pointing to a modest gap up at the open. Analysts are beginning to suggest investors are dangerously downplaying the possible impacts as the US and China once again lock horns. Today we will get the latest readings on PMI Manufacturing, ISM Mfg Index, and construction spending as if there was not enough for traders to digest this morning. On Friday is the Employment Situation number that may well show 20% of American workers are unemployed, which would be a post WW2 high. Hold on tight a stay focused on price action that could be as volatile as this weekend’s protests.

Trade Wisely,

Doug