Hopeful improvements in Europe have the bulls gaping the market up to challenge the highs of last week. The President also issued a statement of hopefulness with the first decline in the daily number of deaths for New York. That’s good news to be sure, but health officials warn the next couple weeks will be worst we have seen to date. With infection numbers nearing 350,000 and the death toll headed to 10,000, expect a lot more news-driven volatility in the week ahead.
Asian markets opened the trading week mostly bullishly, with Japan rallying nearly 4.25% by the close. European markets are celebrating a gradual slowdown of new virus infections with the DAX up more than 4% this morning. The US futures point to a gap up that may regain last week’s market highs at the open ahead of a light day of earnings and economic data.
Earnings Calendar
3-Month Bill Auction 11:30 AM ET
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Earnings Calendar
On the Monday earnings calendar, we have 37 companies fessing up to results. With mostly small, very small-cap and penny stocks today there are no particularly notable reports today.
Top Stories
With some hopeful viral improvements in Europe, the bulls are feeling the desire to run. The British Prime Minister is now in the hospital due to a worsening case of the virus with the euro-zone reporting the cases and deaths are appearing to slow.
The oil price has once again turned lower, with the deal between Russia and Saudi Arabia delayed. However, reports suggest they are close to an agreement to cut production, putting a floor in the price of the commodity.
Although there more than 700 deaths in New York this weekend, the numbers declined for the first time. The President issued a hopeful statement that things are getting better, but health officials warned that this week things would likely get much worse comparing it to Peral Harbor. With infection numbers nearing 350,000 and 9600 deaths and airlines cutting more than 90% of the flights in and out of New York, suggests we still have a long road to recovery in the US.
Technically Speaking
What we hear in the news is the Dow is leaping higher as numbers in Europe improve. While that is true, let’s keep in mind that even with this morning’s rally, the Dow has only recovered to last week’s highs that could serve as price resistance. I welcome any bullishness, but an 800 point opening gap into price resistance is not a reason to get all caught up in fear of missing out and chasing the open. Remember your rules and the patterns that you trade. Plan your trades carefully with careful consideration of your tolerance to risk.
Should the Dow recover and hold the 2018 market low of support and the QQQ recover and hold its 500-day average, we may well have some technicals and price patterns to build a bullish case upon, but let’s assume nothing and wait for the proof. Health officials suggest this could be a dreadful week for the US. Should that prove true, expect news-driven price action that can produce whipsaws and full-on reversals. Long story short, let’s hope for the best but prepare for the possibility that the road ahead is likely to be extremely challenging.
March Payroll numbers far below even much-lowered expectations (and having been measured several weeks ago, in mid-March) offset an incredible oil rally Friday to leave indecisive Bearish Harami Spinning Top candles across all 3 major indices. On the day, the SPY closed down 1.54%, the DIA down 1.57%, and the QQQ down 1.42%. As mentioned, oil (WTI) rallied 14% to close at $28.80/barrel. The 10-year bond yield also closed down to 0.611%. Interestingly, even going into the weekend the VXX was down again to 45.44.
The President’s Friday meeting with US Oil company execs failed to make progress. The companies oppose production cuts and the President took no action on the matter (options discussed previously). US supply cuts were a prerequisite for Russian/Saudi agreement to the deal the President implied he had brokered (a 10-15mil barrels/day cut in Russian/Saudi oil production). So, Friday’s failure led to more name-calling over the weekend. As a result, the planned Monday OPEC+ conference has now been postponed until “maybe Thursday.” After two days of MASSIVE price gains the end of last week (32% overall), oil is likely to fall hard again Monday on the loss of recently renewed hope. This story will continue to develop as Russia and the Saudis are trying to enlist G20 members to pressure the US to cut oil production as well.
Over the weekend, the President also started backing away from his April 30 date for the easing of anti-virus measures. He again floated Easter for some easing as he once more started repeating the business mantra “the cure cannot be worse than the disease.” However, the President also said this week and next will be bad, with a lot of deaths, just one day before he said we are seeing light at the end of the tunnel. There was also a heated argument Sunday in the President’s Task Force with a non-member, non-expert (Navarro) demanding that restrictions be eased and the malaria drug be touted despite no data proving its effectiveness. Dr. Fauci apparently did not back down. So, to say the messaging coming from the White house is mixed is an understatement.
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The world has now surpassed 1.25 million diagnosed cases of COVID-19. The global headline virus numbers have now reached 1,285,261 confirmed cases and 70,356 deaths. In the UK, PM Johnson was admitted to hospital “for tests” after his diagnosis with COVID-19 last week. In Asia, Singapore quarantined 20,000 foreign workers in two dormitories amid a new uptick in cases. Japan announced a massive economic stimulus worth 20% of their normal GDP, while at the same time PM Abe prepares to declare a state of emergency for larger cities. However, the growth rate in Spain and Italy continues to flatten.
Meanwhile, in the US we now have 337,933 confirmed infections and 9,648 deaths. Perhaps just an oddity, but at least one Tiger in a NYC Zoo has tested positive as of Sunday, with other large cats showing symptoms. This raises the specter of either the virus evolving or human-animal transmission also being a risk. However, the news is not all bad as the growth rate in new cases has slowed in New York.
Overnight, Asian markets were green across the board. In Europe, markets are also strongly green across the board at this point in their day. As of 7:30 am, US futures are pointing to a large gap higher at the open (about 4%).
There are no major economic news or earnings reports for Monday.
Markets seem to want to latch on to optimism. A slow in the new case and death rates in Europe and the first signs of the same in some parts of the US may let bulls run again. However, expect economic news cycles to continue to be terrible for a long time to come. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. As we’ve said, a lot of bad news is already “baked in” to markets. Either way, we have to assume there will continue to be a lot of gaps and volatility. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Swing Trade Ideas for your watchlist and consideration: MO, MXIM, MDLZ, BMY, INTC, MSFT, LLY, CAT, CSCO, XOM. 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 hearing that 6.6 million people filed for unemployment as shell shocked chose to ignore the record-making number and rally after Russia and OPEC agree to cut oil production. This morning we get the Employment Situation number that will only show a partial impact from the outbreak as the full measure of the crisis will not occur until the April report. As we approach another weekend of rising infections, deaths, and layoffs, anything is possible, so plan carefully and protect your capital.
Asian markets closed the week mixed after a record surge in oil prices. European markets are currently showing modest declines across the board as the euro-zone report that business activity fell to new record lows. Ahead of the monthly jobs, number futures point to a gap down, taking back about half of yesterday’s gains. However, we should expect that to get better or worse with very volatile price action as soon as they reveal the numbers. Buckle up!
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have we have just 19 companies reporting quarterly results. Looking through the list, the only particularly notable report is STZ.
Top Stories
The President has invoked wartime measures to compel companies to build much-needed ventilators and masks. New York is already desperately short of this critical breathing equipment, and doctors will soon have to make life and death decisions. As of this morning, more than 245,000 Americans have the infection, and more than 6,000 have died.
Those waiting for their stimulus check may have long wait unless you have filed your taxes online and provided a direct deposit to option for the government. According to reports, those receiving paper checks will have to wait up to 5-months.
Technically Speaking
Traders shrugged off the historic unemployment number, with 6.6 million people applying for benefits. Instead, the market chose to focus on news that Russia and OPEC will cut oil production, reducing the intense downward pricing pressure on the commodity. While this will help the demand destruction created by the corona outbreak is far from over, and surplus supplies will continue to weigh heavily on the prices. Today we will get a reading on the Employment Situation in the US. Although the full impact will not appear until the April report estimates still expect a sharp decline, that could be the worst reading in a decade. How the market might react is anyone’s guess.
Ahead of the Jobs report futures look to give back about half of yesterday’s gain. However, that could change instantly for the better or worse once the number is revealed. As we head into another weekend with viral infections expected to rise and more and more people lose their jobs, it should not be a surprise if sellers pile on to avoid the uncertainty. Protect your capital! The day will come when things start to improve, and there will be an incredible opportunity as long as you haven’t lost your money trading within this extreme volatility. Stay safe; my friends and have a wonderful weekend.
Oil prices surged Wednesday night (on word that China was filling its strategic oil reserve, meaning higher demand), which had futures up almost 2.5% in early morning hours. This was then offset by a worse than even worst-case scenario estimate of the unemployment claims number, which came in at 6.65mil. claims. So, markets opened down slightly Thursday. However, after a roller-coaster morning, President Trump claimed (unsubstantiated) that he had brokered a deal between Russia and Saudi Arabia. In that supposed deal, the two had agreed to cut production by 10-15mil barrels/day) helped the bulls run late. As a result, markets closed higher with the SPY up 2.35%, the DIA up 2.22%, and the QQQ up 2.03%. All three major indices printed bullish engulfing signals on the day. The VXX fell to 47.36, while Oil (WTI) shot up to $25.01/barrel and the 10-year bond yield fell to 0.624%.
It is worth noting that a Kremlin Spokesman denied that Russia had agreed to any oil production cuts. Saudi Arabia also told Bloomberg it had not agreed to production cuts unless done in conjunction with cuts by every major oil producer, including the US. In addition, while President Trump plans to meet with US Oil Producer and Refining Execs today, there are ongoing internal White House arguments over ideas like restricting US Oil exports, implementing tariffs on foreign oil, asking US producers to cut output, letting US producers store their oil in the US Strategic Reserve locations and plain old bailouts for US oil companies.
Related to unemployment, it was reported Thursday that the New York, California, Illinois, Ohio, and Texas state unemployment funds are on the verge of insolvency due to the surge in new claims. There has not been time for a federal response to this problem. The White House also adjusted the relief check timelines as Treasury Sec. Mnuchin said the first direct deposit payments to individuals will start in 2 weeks (about 60 million people). However, according to an IRS analysis sent to Congress Thursday, any person needing a paper check (about 100 million), will have to wait. The IRS will begin to cut checks during the week of May 4 and the report said it could take up to 20 weeks to get all the paper checks cut and mailed. Mnuchin disputed this timeline, but that is what was reported to Congress. Obviously these issues could impact the economy as the stimulus will be quick for some, still far out for many and possibly delayed for an unknown amount if state funds did become insolvent.
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Sec. Mnuchin also said the small business lending program (which turns into grants if enough employees are retained) will be up and running Today. However, JPM said publicly Thursday afternoon (and other lenders confirmed to CNBC off the record) that they will not be ready to accept applications Friday as they had not gotten guidance on what the process will be from the Treasury Dept. Regardless, that would only be a delay of a few days, worst case.
During the day Thursday, the world surpassed 1 million diagnosed cases of COVID-19, having doubled the number in one week. The global headline virus numbers have now reached 1,030,1937 confirmed cases and 54,198 deaths. In Asia, a second wave is taking shape. Thailand, Malaysia, and Indonesia also reported new outbreaks. A smaller increase in Singapore caused the response to shut schools and businesses. Meanwhile, South Korea also had a small uptick in cases.
In the US, we now have 245, 280 confirmed infections and 6.095 deaths. (Twice as many cases as any other country, but China’s data is very suspect and India isn’t even testing broadly.) In terms of impact, new states are implementing stay-at-home orders (TN) and others are extending the existing orders for another month (OH). Still, 10 states still have none in place. It’s clear many remain ignorant or are not taking the virus seriously. For example, Georgia’s Governor claimed he only learned Thursday that the virus could be spread by asymptomatic carriers. In addition, in a stunning lack of wisdom, many bible belt states are refusing to issue stay-at-home orders or have exempted church gatherings, including “mega-churches.”
Overnight, Asian markets were mixed, but mostly in the red. In Europe, markets are also red across the board at this point in their day. As of 7:30 am, US futures are pointing to a gap lower at the open, but the March Employment numbers could take that either way at 8:30 am.
Friday’s major economic news includes Mar. Avg. Hourly Earnings, Mar. Non-farm Payrolls, and Mar. Unemployment Rate (all at 8:30 am), Mar. Services PMI (9:45 am), and ISM Non-Mfg. PMI (10 am). The only major earnings on the day will be STZ before the open.
We should expect news cycles about the US and most of the world to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets. Either way, there isn’t a lot of reason to take on new risk ahead of a long weekend news cycle. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
No Trade Ideas for 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 nasty day of selling and ahead of what is likely to be a historic jobless number, US futures are trying to put on a brave face pointing to a substantial overnight gap up. Perhaps its, because the number has been baked into the current prices or maybe, we’re just trying to bury our head in the sand a pretend it doesn’t matter. I could be wrong, but having 4 to 5 million unemployed in a consumer-based economy is an impact that will eventually be impossible to ignore.
Asian markets closed mixed, but mostly higher overnight and European markets indicate modest gains across the board this morning. Ahead of the earnings and economic data oil prices are up 10%, and futures suggest a recovery of about 1/3 of yesterday’s selloff. Think and plan carefully if you decide to risk your hard-earned money in this wild and emotionally irrational market.
Economic Calendar
Earnings Calendar
We have 44 companies reporting earnings today. Notable reports include WBA, CHWY, KMX & PLAY.
Top Stories
US Treasury yields are falling this morning in reaction to the pending jobless claims number that some predict could top 4 million. Sadly economists expect millions more soon as the virus wreaks havoc on business. There are, however, some bright spots on the jobs front with grocery stores and essential supply outlets continuing to hire to keep up with demand.
The President is considering halting domestic flights between coronavirus hot spots in an attempt to slow the spread of the virus.
It could be a very challenging 2nd earnings season with companies delaying reports and analysts withdrawing forecasts amid the virus chaos.
Technically Speaking
After an ugly day of selling on Wednesday, US futures put on a brave face pointing to a considerable gap up as the irrational volatility of this market continues. For some reason, the futures are trying to convince everyone that historic unemployment isn’t a big deal. However, with infection numbers surpassing 215,000 and continuing to rise, economists expect this number to continue to increase dramatically. Attempting to ignore the massive impacts of unemployment in a consumer-based economy shows how dangerously irrational and manipulated the market can be. Think carefully before reacting emotionally and chasing these wild morning reversals.
Sadly the QQQ was unable to hold its 500-day average during yesterday’s selloff, but this morning’s bullishness ahead of the jobless number suggests it could recover it at the open. The DIA daily 50-average has now crossed down both the 200 & 500-day averages as this outbreak continues to create technically damage to the index charts. With a big data dump this morning and the Friday Employment Stiucation number ahead, traders should prepare for just about anything. Big intra-day news-driven reversal and whipsaws are possible to plan your risk carefully should you choose to risk your hard-earned capital amidst such market uncertainty.
The first day of the quarter was an ugly one for markets as a 3.8% gap down open led to a wide-range day with a close toward the low of the candles. The SPY closed down 4.50%, the DIA down 4.49%, and the QQQ down 4.25%. The VXX was up, closing at 50.22 while Oil (WTI) closed up to $21.20/barrel and the 10-year bond yield was down to 0.602%. All three major indices look like Dreaded “h” patterns in progress.
During the day, more states finally woke up to reality as Florida, Georgia, and Pennsylvania all issued stay-at-home orders. On the D.C. front, lawmakers and the President are now starting to talk about another (4th) virus-relief bill. Speaker Pelosi said she wants to move ahead quickly focusing on infrastructure and state government bailout. For his part, the President has also said he wants a $2 Trillion infrastructure spending bill, but also repeatedly mentioned expanding Corporate deductions to stimulate restaurants and entertainment jobs during the daily presser. These efforts may be difficult as Congressional Republicans have recently blocked infrastructure legislation 3 times due to cost concerns and these ideas would add huge cost and also reduce the tax revenue.
In the daily presser, Dr. Fauci (NIH) said social distancing measures won’t be able to be relaxed until we reach the far tail of the infection curve. He specifically said we could look at easing when we have essentially no new cases and deaths and also have robust testing and isolation systems in place. He did not specifically address timelines, but his remarks certainly did not seem to fall in-line with an easing on May 1.
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The global headline virus numbers continue to climb and will top a million today with current numbers at 951,901 confirmed cases and 48,284 deaths. Meanwhile, the US now has 216,722 confirmed infections and 5,137 deaths as we continue to outpace the rest of the world in new cases (undoubtedly to our recently increased testing).
In economic news, BA will reportedly offer early retirement and buyouts as soon as today. The CEO said it will take years to get the BA Balance Sheet back in shape. The President is also scheduled to meet with Oil execs on Friday. At the daily presser, he said repeatedly that Russia and Saudi Arabia ought to easily reach a deal soon (just his hunch because he thinks the deal is obvious). He also said he “thinks he knows how” to save the US Oil industry in the face of mounting bankruptcies and unworkable business models at $20/barrel oil. No specifics were given, but any answer would likely include a lot of government money.
Overnight, Asian markets were mixed, but mostly higher on news of China will start stockpiling oil. In Europe, markets are also green across the board at this point in their day. As of 7:30 am, US futures are pointing to a gap higher at the open, ahead of the Jobless Claims numbers.
Thursday’s major economic news includes Imports/Exports, Feb. Trade Balance, and Initial Jobless Claims (all at 8:30 am), as well as Feb. Factory Orders (10 am). The only major earnings on the day will be KMX and WBA both before the open.
We should expect news cycles about the US and most of the world to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets.
So, while it MIGHT be time to slowly start looking for setups to enter again, it is not time to get aggressive. Expect erratic trading to continue and size any positions you take correctly for the risk being taken. As always, don’t try to predict reversals, don’t chase runners, and wait for the trades to come to you. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Swing Trade Ideas for your watchlist and consideration: TMUS, INCY, VRSK, CHRW, AKAM, NUE, PCAR, CVS, MO. 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
The health officials grim death toll predictions and the President’s warning of difficult days ahead brought out the bears in the overnight futures session. As I write this report, mortgage applications reported a decline of 24% once again, suggesting the FOMC and the Federal government can not buy our way out of a pandemic. The economic data dump over the next several days is likely to create highly volatile price action and produce historically shocking results. Protect your capital!
Asian markets closed mostly lower overnight, but Australia bucked the trend closing in the green. European markets are decidedly bearish this morning with the CAC down more than 4% and the other indexes not far behind. US Futures after a volatile overnight session point to an ugly gap down ahead of the big day of economic data, including the ADP Jobs report. Hold on to your seat; the day ahead is shaping up as wild one.
Economic Calendar
Earnings Calendar
On the Hump Day earings calendar, we have a rather light day of earnings with just 19 companies reporting. Notable earnings include LW & PVH.
Top Stories
The President yesterday said that American needs to get ready for a very painful 2 to 3 weeks. Officials now predict 100,000 to 240,000 US deaths. Currently, we have more than 188,000 infections with the death toll now over the 9/11 attacks crossing over 4000.
With an outbreak happening in prisons, inmates are now confined to their cells for a minimum of 2-weeks in an attempt to stop the spread. One US Naval ship has moved more than 4000 sailors into quartene after several tested positive for the virus.
As the demand for food and supplies comes under pressure, Walmart has implemented daily health screenings of employees and created one-way isles in the store to aid in social distancing.
Technically Speaking
If the pending employment numbers were not enough to spook the market, the President’s grim projections for the next few weeks brought out the bears overnight. Historically low-interest rates seems no match for the virus as applications to buy new homes fell 24% last month. I suspect the economic data dump we will get over the rest of this week will not be favorable to those hoping for a V-bottom recovery. Although we are all hoping for the best, the next couple of weeks will weigh heavily on the minds of traders and investors as the infection expands, and the death toll rises. Directly after, we will begin 2nd quarter earings that could easily add insult to injury.
Protect yourself and your capital as we can expect highly volatile price action. There are no medals for bravery for running into dangerous markets.
In a very up-down day on Tuesday, markets closed on a down, ending the day near the lows. The quarter-end buying (fund rebalancing) that some had predicted never seemed to materialize during the day. As a result, the indices failed recent high resistance to end the worst quarter in market history. For the day the SPY closed down 1.49%, the DIA down 1.73%, and QQQ down 0.85%. Technically speaking, all three major indices printed Bearish Harami signals, but not inside days. As for Oil (WTI) after a large gap higher (on Chinese economic data), traders sold the rip all day with it closing down at $20.16/barrel. The 10-year bond yield was down as well, closing at 0.668%.
After the close, the President told the daily presser ”we’re going to have a hell of a bad two weeks…maybe three weeks” Then Dr. Fauci (NIH) said they still project between 100,000 and 200,000 American deaths (but a slide presented showed the upper number as 240,000). Still, it could be much worse as even simple modeling shows that 330 million people times just a 10% infection rate times a 1% death rate (of infected) would be 330,000 deaths. And, unfortunately, the US doesn’t have the massive per-capita testing, strict quarantines, or strong social compliance of other nations (at least yet) to rely on to keep infection rates below 10%. So, as the President is now acknowledging, the news for at least the next several weeks is going to be very bad. What he can’t tell us is how much of that is already baked-into markets.
In related news, during the day the President tried to get in front of the next bailout bill as he called for $2 Trillion in infrastructure spending. In addition, Democratic Senators began pressuring Treasury Sec. Mnuchin to ensure the proper oversight of the $500 billion bailout fund approved last week. (When he signed the bill, the President wrote a note saying he won’t allow the fund Inspector General to report to Congress on fund decisions without his express permission. Nobody can read minds, but his adding such a note certainly implies there needs to be concern about fund administration.)
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The global headline virus numbers continue to grow exponentially, now at 875,445 confirmed cases and 43,459 deaths. Meanwhile, the US now has 189,633 confirmed infections and 4,081 deaths. One indication of the situation is that the state of CA says it will release 3,500 prisoners early due to the virus.
Overnight, Asian markets were deep in the red, despite private date on China PMI showing a modest expansion (above estimates) in growth, which more or less confirmed yesterday’s official data. In Europe, markets are also strongly on the red side at this point in their day. As of 7:45 am, after another choppy overnight session, the US futures are pointing to a large gap down at the open.
Wednesday’s major economic news includes ADP Nonfarm Employment (8:15 am), Mar. Mfg. PMI (9:45 am), Mar. ISM Mfg. PMI (10 am), and Crude Oil Inventories (10:30 am). The only major earnings on the day will be PVH after the close.
We should expect news cycles about the US and most of the world to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets.
So, while it MIGHT be time to slowly start looking for setups to enter again, it is not time to get aggressive. Expect erratic trading to continue and size any positions you take correctly for the risk being taken. As always, don’t try to predict reversals, don’t chase runners, and wait for the trades to come to you. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Sorry, but no Swing Trade Ideas due to extreme market volatility. 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
News of 5-minute test kits, hopeful vaccine possibilities,
and new clinical trials helped to lift the spirits of the market, keeping the
bullish rally alive another day. However,
traders should guard against getting caught up in Fear of Missing Out, chasing
a rally already up nearly 20%. With
infections, numbers continuing to rise rapidly, and more states going into
lockdown, we still have a long road to recovery. Consider your risk very carefully as we head
in a big week of data that includes jobs’ data.
Asian markets were mixed but mostly modestly higher as China
reported better than expected manufacturing data. European markets are following suit with mixed
but mostly modest increases this morning.
US Futures after a volatile evening currently point to flat open ahead
of earnings and economic reports.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just 33 companies reporting. Notable releases include MKC, BB, CAG, & FLR.
Top Stories
The US Navy ship Comfort arrived in New York Harbor to help their
overwhelmed hospitals. Yesterday the
Major said they would need triple the hospital capacity by May as the outbreak continues
to ravage the city. As the infection
numbers continue to rise, more and more states are ordering lockdowns, and the CDC
is considering a rule that everyone wears a mask when out in public.
There were some bright spots on the virus front yesterday with
testing kits that can provide results in just 5 minutes and news of vaccine tests
and clinical trials beginning for hopeful treatments lifting the spirits of
investors yesterday.
China says manufacturing activity expanded in March. That seems very hard to believe, but the
Asian markets were able to make modest gains on the back of the data.
While the market rallies, investors are bracing for
employment numbers later this week that could reach historic levels as some of
the nation’s cities continue to shutdown.
Some estimates indicate an unemployment rate as high as 32%, with more
than 45% of companies considering layoffs.
Technically Speaking
Investors found hope in the news vaccine tests, clinical trials,
and test kits that can deliver results in just 5-minutes! While encouraging the US infections, top
160,000 with more than 3,100 deaths as the Mayor of New York calls for a tripling
of hospital capacity by May to deal with the sick. The DIA recovered the 2018 lows, the QQQ held
onto its 500-day average as support the SPY recovered and held critical support
at 255. With DIA, SPY, and QQQ nearly 20%
off recent lows and facing a huge week of economic data, one has to wonder if
the rally is getting a bit ahead of itself.
With the likelihood of shocking and historic unemployment numbers just
around the corner, another round of selling is not out of the question. As infection numbers continue to rise, more
and more state is shutting down effecting some of our nations largest cities.
Guard yourself against the Fear of Missing Out and
disregarding the risk, the massive price volatility and fast we are far from
curbing the first wave of the outbreak.
With the 2nd quarter earings beginning in a couple of weeks
and the high probability of recession, a V-bottom recovery seems very unlikely. Stay focused on price action and plan your risk
carefully because the path forward remains very uncertain.
The bulls put in a very nice day’s work Monday, resuming the rebound as they closed markets near the highs after following through on the gap up open. As a result, the SPY closed up 3.21%, the DIA up 3.06%, and the QQQ up 3.64%. JNJ, MSFT, FB, AMZN, and GOOG led the way while BA acted like an anchor. However, Oil (WTI) took another 6% beating as it traded below $20 and closed at $20.20/barrel. The 10-year bond yield also closed down to 0.72%.
During the day, Moody’s cut their outlook on $6.6 Trillion of US Corporate debt from “stable” to “negative” as it predicts the US has entered a recession. Goldman Sachs also gave markets some bad news as it announced a survey that finds that over 25% of planned 2020 stock buybacks have now been scrapped by companies. In addition, V (Visa) lowered its outlook a second time this month, saying consumer spending has declined sharply.
In employment news, St. Louis Fed President James Bullard told CNBC that his economists are now estimating that unemployment could reach 32% as a result of the virus. However, he also said he expects the massive loss of jobs to be short-term (months). An online survey of 250 companies also found that 49% were considering layoffs as March 26. However, NY Governor Cuomo made a nationwide appeal for medical personnel to come to his state as existing personnel are already overworked and the peak in cases is still to come the next couple weeks. CA Governor Newsom made a similar plea, announcing they are trying to hire thousands of new health care workers. Both of the Governors said they would temporarily waive licensing requirements and even offer free malpractice Insurance.
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In virus treatment news, F and GE announced that they plan to produce 50,000 ventilators per month. However, this will not be until after early July. Richard Branson’s rocket company also joined this effort but did not offer details on its own ramp-up plans. In terms of lock-downs, more states issued “stay at home” orders including both Virginia (through June 10) and Maryland. The San Francisco Bay Area also extended its “shelter in place” order through May 1st.
The global headline virus numbers continue to grow exponentially, now at 799,723 confirmed cases and 38,720 deaths. Meanwhile, the US remains the epicenter and now has 164,359 confirmed infections and 3,173 deaths. Still, not all the virus news is bad, as the growth rate of cases in NY has slightly slowed for the first time. China also announced its PMI reading was 52.0 for March, indicating they are starting to see some economic expansion again. For reference, the Feb. PMI was a record low 35.7, so this indicates a V-shape.
Overnight, Asian markets were mixed but mostly green on the China data. In Europe, markets are following Asia, hoping for their own V-shaped recovery. The major European bourses are all green, with the exception of France at least at this point in their day. As of 7:30 am, after another choppy overnight session, the US futures are pointing to a mixed, mostly flat, but slightly red open. However, Oil (WTI) prices did make a major rebound overnight on the China data.
Tuesday’s major economic news includes Mar. Chicago PMI (9:45 am) and Mar. Conf. Bd. Consumer Confidence (10 am). Major earnings are limited to CAG and MKC before the open.
While it looks like the bulls are back in “only see the positive” mode the last week, it is still a very volatile and uneven market. We should expect news cycles about the US (and most of the world) are going to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets.
So, it might be time to slowly start looking for setups to enter again. However, expect erratic trading to continue and size any positions you take correctly for the risk being taken. As always, don’t try to predict reversals, don’t chase runners, and wait for the trades to come to you. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Swing Trade Ideas for your watchlist and consideration: VIAC, FMC, NXPI, AVGO, NLFX, QCOM, V, ALGN, DHR, WDAY, C, HON. 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.
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|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
