It was an overall dull trading day until the news that the US Treasury plans to burrow 3 Trillion this quarter. I guess that was music to the ears of the market, creating a sharp rally recovering yesterday’s losses to close in the green. The bullish energy stayed with the futures all evening and now points to substantial gap up open ahead of earnings and economic data.
Asian markets closed mostly higher despite the big hit Hong Kong reported in the first quarter. European markets are in rally mode this morning as more virus restrictions lifted, and the hope of recovery grows. US Futures suggest a Dow bullish gap of nearly 250 points reversing yesterday’s selloff and proving support of the DIA and IWM 50-day average.
Economic Calendar
Earnings Calendar
With new additions, the Tuesday earnings calendar expects more than 375 reports today. Notable reports include NEM, DIS, ATVI, AOS, ALK, AGN, ALL, BYND, BCO, CAKE, CC, DVA, DVN, D, DD, EA, FACU, FLR, ITW, I, J, KGC, LC, TREE, LGIH, MPC, MAT, OXY, PINS, PLNT, PRU, REGN, RCL, STOR, SU, SYY, TRIP, W, WU, & WYNN.
Technically Speaking
It was a pretty bleak day yesterday with light and choppy price action until the report came out that the US Treasury planned to burrow a record 3 Trillion this quarter. After the news, the market rallied strongly, confirming the market has no concern about debit as long as the money keeps flowing to the market. The bullish energy continued overnight with the futures market rising, pointing to a substantial gap up open reversing Monday’s selloff. California, Wahington, joins other states in getting back to business with limitations and new social guidelines. The market seems to have gains some energy on the reopening even though many suggest its too early, worrying about the 2nd round of increasing infections. Even Congress has returned to work wearing masks and indicating no more closures of the government. I’ll let you decide if that’s good news or not!
By the close yesterday, the DIA & IWM proved the 50-day average as support with this morning’s follow-through providing some conformation of the hold. We have a big day of earings with over 375 companies reporting, but I’m not sure that matters. We rally on good earnings reports, and we rally on bad earings reports choosing to focus on the trillions of governmental spending. I guess massive debt negative earnings growth and 30 million unemployed is no match for the apparent unlimited checkbook of the government. One has to wonder about the long-term ramifications of these decisions. That said, the trend is bullish, the hold of support levels provides conformation, and we as traders must focus on the price action of the charts. I don’t need to understand it or agree with the market decisions as long as I set aside my bias and trade the price action.
Monday saw a gap down of about 0.8% in the major indices. However, shortly after this the bulls started a slow climb back into the game. The day ended just on the green side of break-even in the large-caps while the tech-heavy QQQs led the way. For the day, the SPY was up 0.28%, the DIA up 0.06%, and the QQQ was up 1.17%. The QQQ also managed to print a bullish engulfing candle. At the same time, the VXX was down slightly to 40.26 and T2122 (4-week High Low Ratio) fell to exactly the mid-point between overbought and oversold territory at 50. The 10-year bond yield was flat, technically closing down to 0.63 and Oil (WTI) continued its rally up over 7% to $21.18/barrel.
During the day the Treasury Dept. announced it will be borrowing $3 Trillion (bond sales) this quarter. However, except for the exact number, this was expected due to the massive stimulus and relief packages already signed into law. Meanwhile, the FDA said it will start to crack down on COVID-19 antibody tests. In the panic to get tests to the public, over 250 antibody tests were taken to the market. However, it has been reported that many of them give over 50% “false positives” (more than half the people who are told they have antibodies turn out not to have them). This crackdown should start in the next 10 days and may well impact a number of medical sector tickers.
After the close, HTZ announced it has retained an advisor for help with bankruptcy proceedings. LB also announced it had ended its deal to sell the Victoria’s Secret brand to a private equity firm. Meanwhile, in supply chain news, earlier in the day TSN again warned of potential meat shortages despite an Executive Order forcing plants to remain open. They cited US hog processing capacity having been cut in half. After the close, SHAK confirmed by reporting they’ve seen significantly higher beef costs and expect the price hikes to continue.
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On the Virus front itself, the global headline numbers are 3,663,961 confirmed cases and 252,758 deaths. Reopening continues throughout Europe with mixed results. While crowds waited on department stores to open in Austria, many Italian retail businesses said it wasn’t worth the effort to open shop since no customers showed up. Germany reports a similar story as Italy on retail, but its manufacturing sector seems to be well on its way back to capacity.
In the US, we have 1,213,010 confirmed cases and 69,925 deaths. A CDC report (marked with HHS and Homeland Security Dept. seals and dated May 1st) was leaked Monday. The document said it expects to see virus spread and deaths accelerate by June with the mid-point of several forecasts being 200,000 new cases and 2,500 deaths per day. The White House disclaimed the report saying it didn’t reflect any modeling done by the task force itself. (For reference, the US now sees about 25,000 new cases and 1,200 deaths per day.) Meanwhile, SBUX reports 85% of its stores nationwide will be open by Friday. So, US reopening continues and at least we can get coffee while we argue over forecasts.
Asian markets of questionable value today. China, Japan, and South Korea were all off for a market holiday Tuesday. In Europe, markets are in the green across the board at this point in the day. As of 7:30 am, US futures are pointing to a three-quarters to one-percent gap higher at the open.
The major economic news for Tuesday includes Mar. Import/Exports (8:30 am), Apr. Services PMI (9:45 am), and Apr. ISM Non-Mfg. PMI (10 am). Earnings before the open include D, FCAU, NEM, ITW, DD, SYY, INCY, MPC, REGN, SPG, TDG, AME, XYL, MLM, VTR, WRK, HSIC, AOS, IPGP, SEE, ALK, KEX, ACM, WRK, ADNT, USFD, ARMK, LDOS, HSIC, AGCO, W, INGR, TRI, TA, and AME.
The very recent pullback remains in place, but the bulls were in control all day (after the open) yesterday. Volatility and gaps remain the standard. However, it appears the bulls want to take us back up to at least retest resistance above after Monday’s bounce. Focus on the chart in front of you. Continue to be cautious about longer swing trades, unless you can take some short-term pain.
Ed
Trade Ideas for your consideration and watchlist today: VLO, PNR, COP, ADP, TECK, PH, NXPI, GNTX, EMR, SIRI. 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
As the country begins the process of reopening the economy, the bulls and bears are grappling with what the new normal will look like as the battle with the virus continues. So many questions, so much uncertainty, and the realization that the recovery will be very complicated until a vaccine becomes widely available will test investor’s resolve. Add to that massive week of earnings reports, and the stage is set for a week of whipsaws and big morning gaps.
Asian markets closed the day mixed but mostly lower, with Hong Kong dropping more than 4%. European markets are decidedly bearish this morning down more than 3% as US-China tensions rise over coronavirus. US Futures have rallied off of overnight lows but still point to a Dow gap down or 200 to 250 points challenging it’s 50-day moving averages as support. Prepare for another hectic week.
Economic Calendar
Earnings Calendar
We have a hectic week of earnings reports. The Monday calendar indicates more than 250 companies will report today. Notable reports include O, AIG, AWR, CAR, CRUS, DLB, EXPE, HTZ, L, NNN, OHI, PETS, SRE, SHAK, SWKS, TXRH, TSN, WMB, and WH.
Technically Speaking
The question as to whether the market will follow-through to the downside seems answered with futures pointing to a substantial gap down open. Now the question on everyone’s mind, will the 50-day moving averages serve as support? If not, then we will have to rely on some key price supports to stop the selling. The DIA support at about 232 looks the most vulnerable, with SPY having a bit more cushion around 275. As the country begins to process of reopening the market is struggling with what the new normal may look like and will we be able to control the spread of the virus enough to not overwhelm the healthcare system. With social distancing rules still in effect, can businesses even afford to open with lower volumes of consumer traffic?
Airlines are in decline this morning after learning that Berkshire Hathaway sold its entire stake in the industry due to the coronavirus impacts. Not a big surprise when the Oracle of Omaha loses confidence in the industry sector. With a massive week on the earnings calendar with around 1500 companies reporting, we should prepare for another volatile week of price action. Intra-day whipsaws and significant overnight gaps remain likely and will prove challenging to navigate. A week later than usual, the Employment Situation report on Friday could have a substantial influence on this week’s activity. If the consensus estimates are anywhere close to correct, it’s going to be a difficult pill to swallow and harder to ignore than the weekly unemployment numbers.
As we turned the page to a new month, Friday turned a positive week negative. Bad earnings news from AAPL and AMZN, and post-April profit-taking led to a 1.75% gap-down. Then, after a late-morning selloff, markets spent the afternoon just grinding sideways near the lows. For the day the SPY was down 2.74%, the DIA down 2.44%, and the QQQ down 2.82%. The VXX rose on this performance to close at 41.19. The 10-year bond yields fell slightly to 0.618% and Oil (WTI) rose again to get back to $19.69/barrel.
The big weekend news was that Berkshire lost $50 billion (largest ever) in the last quarter. It sold its entire stake in 4 airlines at a big loss to get out of that industry altogether. We also learned they had not bought the recent bottom. In fact, Warren Buffett said “We’ve not bought anything because we don’t see anything that attractive (to buy).” So, BRKB is still amassing cash and now has $137 billion of cash on hand.
In other weekend news, Larry Kudlow (Chair NEC) told reporters on Sunday that the White House hasn’t yet made a decision on a third round of PPP, but said it may be needed. In the meantime, he was promoting the administration’s ideas of a payroll-tax holiday as well as going back to 100%-deductibility for business meals and entertainment.
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On the other side of the easing argument, Bloomberg reports economists are just starting to worry that ultra-loose monetary and fiscal policy may cause inflation. In particular, economists at the Bank of England, International Monetary Fund, and some of the large banks are worried that pressure to keep easing in place will cause runaway inflation. Concerns aren’t major at this point, but it points to the fine line the Fed must walk now that Congress and the Administration are in a “buy our way out of this” mode.
On the Virus front itself, the global headline numbers are 3,584,116 confirmed cases and 248,641 deaths. Russia has recorded 3 consecutive days of a record-high number of new cases (now well over 10,000 new cases per day). However, the biggest international virus story seems to be the rise in the rhetoric of blaming China for the pandemic and “holding them accountable.” Of course, China responded with its own propaganda about the US. In and of itself this is not important, but the war of words does raise the specter of another round in the trade war, particularly in an election year, which the global economy may not be in as good a position to handle as it was last year.
In the US, we have breached the million-case mark, with 1,188,826 confirmed cases and 68,606 deaths. 31 states had some easing or reopening as of the weekend. Of those, only 17 have actually achieved the 14-day new case rate reduction that was recommended by administration guidelines. Activity and hope are increasing. Only time will tell if it was too soon or false hope. However, it’s the course our leaders chose and all the rest of us can do is embrace it as cautiously as possible.
Overnight, Asian markets were mixed after a 3-day weekend. Japan, Hong Kong, South Korea, and India were down sharply. However, China, Australian, and smaller countries like Thailand were well in the green. In Europe, markets are deeply in the red after their own 3-day weekend. The FTSE is only off a third of a percent, but the set seem to be down over 2% at this point in the day. As of 7:30 am, US futures are pointing to a half to one-percent gap lower at the open.
The uptrend was broken Friday on the first consecutive down day in over a week. Still, there is potential support not far below and the Bulls have clearly been focusing on the good (and hope) and ignoring the bad news during the last 5+ weeks. Volatility and gaps remain the norm. We can also expect bad economic news to continue.
So, all traders can do is focus on the chart in front of us. However, in such uncertainty and somewhat unexplained strong rebound, we either need to be fast (day trade) or slow (longer-term holds). Be very cautious about swing trades, unless you can handle significant short-term pain.
Ed
No Trade Ideas for 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
As unemployment topped 30 million, the bears decided to return to work yesterday, and profit-takers took advantage of the best monthly market rally since 1987. Earnings from AMZN & AAPL that disappointed investors keep the bears active in the futures market overnight, which now suggests a substantial gap down at the open. However, at this time, all the indexes indicate they still have their 50-day averages below that could serve as support.
Asian markets closed with Japan falling nearly 3% while other markets were closed for holidays. European markets are decidedly lower this morning with the DAX and CAC down more than 2%. US Futures point to a gap down of more than 400 points ahead of earnings and economic reports. Expect to hear, ‘Sell in May and go away,’ repeated over and over as we head into the weekend.
Economic Calendar
Earnings Calendar
On the first day of May, we have a lighter day on the earnings calendar, with about 100 companies reporting results. Notable reports include CVX, CLX, ABBV, APO, CL, DISH, EL, XOM, HON, PSX, VTR, & WPC.
Technical Speaking
Disappointing unemployment numbers yesterday woke up the bears and brought out some profit-takers. Overall this was the best month for the market since 1987, with the recovering 35% from the March lows. After the bell, we heard for AMZN and AAPL, and both seemed to disappoint investors setting off an overnight selloff in the futures. AMZN looks to open about $120 points lower this morning or about 5% while AAPL is down about 8 points or 2.75%. These to tech bellwethers comprise a significant weight in the QQQ, and it will be interesting to see how that affects the index leadership as we begin May.
With the Dow Futures pointing to more than a 400 gap down on the first day of May expect to hear the old saying, ‘sell in May and stay away,’ repeated over and over by traders and the media. After such a strong rally in the indexes, a pullback is not out of the question, but hope for an economic reopening begins; I’m not sure that old saying will carry much weight. Even with the sizable gap down this morning, all the indexes so far indicate to open above their 50-day averages. Will they hold? Only time will tell, but with another day of earnings and economic reports, anything is possible. Consider your risk carefully as we slide into the weekend.
Markets gapped slightly lower Thursday on the news that we have had over 30 million new unemployment claims in the last 6 weeks (3.84 million this week) and consumer spending had fallen 7.5% year-over-year in March. After that half percent gap down markets ground sideways and then lower to close about twice as far down as the open on indecisive candles. The SPY fell 0.93%, the DIA fell 1.31%, and the QQQ was flat at down 0.04%. The VXX gained a bit to close at 37.87 and the TC2122 4-week High-Low Ratio fell slightly to still overbought 91.09. 10-year bond yield rose to 0.646% and Oil (WTI) jumped almost 27% to get back to $19.09/barrel.
After hours, the Justice Dept. said they are seeing initial indications of fraud in the SBA Payroll Protection Program and that it has begun an investigation. Elsewhere, CA, NY, TX, IL, CT, and MA states have all applied for federal loans as their unemployment trust funds are running out of money. These are among the 21 states that are now below federal recommended solvency guidelines. CA, TX, NY, IL, OH, HI, and PA are all below half of the recommended minimum solvency.
On earnings, AMZN told shareholders they may want to take a seat before reporting a huge miss ($5.01 act. vs. $6.25 est.) on higher than expected revenue. It also said the company expects to spend all operating profits from Q2 on COVID related expenses. However, AAPL reported an earnings beat on flat revenue, but dropped guidance and said it had also burned through some of its massive cash hoard during the quarter. (iPhone revenue was down 7% year over year.)
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On the Virus front itself, the global headline numbers are 3,325,957 confirmed cases and 234,501 deaths. In Russia as numbers climb the PM (theoretically President Putin’s number two) has tested positive. At the same time, UK PM Johnson said his country was “past the peak,” but he did not want to risk a second peak and was thus not ready to announce a roadmap to lift restrictions and he will ask the public to wear masks when they do open.
In the US, we have breached the million-case mark, with 1,095,304 confirmed cases and 63,871 deaths. Despite these numbers, 31 states will be at least partially open by this weekend. However, Dr. Fauci says he is worried that states are moving too fast and large portions of the public are also not following distancing guidelines. At the same time, the White House has not signed off on CDC guidelines that require altered ways of life. Instead, the President said he wants things to be “the way they were” because he doesn’t want half-empty restaurants, stadiums, or other businesses. Time will tell, but that approach does not model well.
Overnight, both Asian and European markets were closed for the May Day worker celebration. However, the US will be open and as of 7:30 am, US futures are pointing to a significant gap lower at the open.
The major economic news for Friday is limited to Apr Mfg. PMI (9:45 am) and ISM Mfg. PMI (10 am). In earnings, ABBV, AON, CBOE, CHTR, CVX, CLX, CL, EL, XOM, HON, HUN, IMO, JCI, LYB, NWL, PCG, PSX, and WY all report before the open. Only BRK.B reports after the close.
The uptrend continues with even down days being nothing but black candles in an uptrend. However, profit-taking after window-dressing April may be in-store today. The bulls clearly continue to focus on the good (and hope) and ignore the bad news. Still, gaps and volatility remain the norm and we should expect bad economic news to continue. All we can do is remain focused and trade the chart in front of us. Just bear in mind we either need to be fast (day trade) or slow (longer-term holds) in a market that does not match the data. Be very cautious about swing trades, unless you can handle significant short-term pain. Finally, it is Friday. So, take some profits and reduce your risk going into the weekend ahead.
Ed
No Trade Ideas for 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
The FOMC reiterated it would do whatever is necessary for as long as it is needed to bolster the struggling economy. Powell also called on Congress to provide some more stimulus as unemployment approached a historic 30 million. A good round of tech earnings after the bell is also encouraging the bulls even though the indexes appear very extended. With a big day of earnings and economic reports, expect the wild price volatility to continue.
Asian markets rallied on the hope of a coronavirus treatment overnight. European markets have chopped between gains and losses this morning as they cautiously monitor economic data. US futures are also very choppy this morning, heading for one of the strongest monthly rallies in decades. Amazing considering the state of the economy and unemployment.
Economic Calendar
Earnings Calendar
The Thursday earnings calendar has more than 400 companies reporting results. Notable reports include AMZN, AAPL, FLWS, MO, AAL, CHD, CI, CMCSA, COP, COR, DOW, DNKN, EXC, EXPE, FSLR, BEN, GILD, GT, HBI, IRM, K, KHC, MCD, MGM, TAP, MNST, PLNT, PSA, SPG, SIX, SO, SWK, TWTR, V, WELL, WDC,& WHR.
Top Stories
Jerome Powell said there is a need for more stimulus if we’re to see a robust recovery from the coronavirus crisis. The FOMC has committed to keeping rates near zero until we see a return to full employment and a return to inflation. The chairman said he expects the virus will affect the economy for another year, and the massive unemployment will be challenging to recover.
The GDP declined for the first time in a decade, falling more than economists had expected as consumer spending declined sharply. The outlook for the 2nd quarter is grim but also very unclear because of the unknown of the economy reopening and the possible resurgence of infections.
Today the nation’s joblessness is expected to rise to nearly 30 million or more. In a matter of a few weeks, America went from record employment to historic unemployment. Thus far, the market has been able to ignore these numbers, but the sharp decline in consumer spending reflected in the GDP number will make it challenging to ignore forever.
Technically Speaking
The bulls can’t seem to buy enough risk despite the disappointing GDP numbers and record unemployment rising more than 500 points yesterday. The T2122 indicator has pegged at the top of the range as the rally continues to extend. Yesterday the FOMC gave the bulls confidence once again reiterating they will do whatever is necessary for as long as they need to support the struggling economy. However, Powell believes Congress will have to help out with additional stimulus spending expecting the historic unemployment situation to impact the marketplace for another year.
A good round of tech earnings after the bell is also helping to bolster the bullish sentiment even though the indexes prices appear very extended. Today we have more than 400 companies reporting, including AAPL and AMZN, after the bell. We also face another disappointing jobless number before the market open that could raise the unemployed number above 30 million. I know its hard to rationalize the horrific economic numbers against what we see as the market rallies. All we can do is stay focused on price action riding this bull rally as long as it lasts because there is no telling how long or high it can go. Just be prepared with a plan if it should suddenly stop and reverse to protect your profits.
Once again, the bulls ignored bad news and latched on to questionable hope. The Q1 GDP shrank by 4.8%, but futures spiked on the news. Markets opened with a 2% gap higher and then rallied on news of encouraging results from a preliminary trial of a treatment drug for COVID-19. On the day, the SPY was up 2.60%, the DIA up 2.22%, and the QQQ up 3.55%. VXX fell to 36.72 (the lowest level it has seen for nearly two months) and the T2122 remains pegged at 99.06. Oil (WTI) rebounded 23% on hope of renewed demand to close at $15.20/barrel and the 10-year bond yield also rose slightly to 0.625%.
During the day, the government jumped on the GILD (remdesvir) news as the FDA isn’t waiting for more proof and announced it will make the drug available to patients just as soon as possible. This is quite the leap considering the trial showed an improvement in only 50% of patients and even then, only at a certain treatment course (not as much with longer length of treatment). However, Dr. Fauci (NIH) said it was “quite good news” that the drug can reduce hospitalization from 15 days to 11 days on average and may (data less certain) reduce the mortality rate (from 11.6% to 8%), even if only effective in half the cases. So, no magic bullet, but a step in the right direction.
The Fed also left rates unchanged and they will continue buying bonds. This was as expected and the more important point was the forward guidance where Fed Chair Powell said the economy will continue to need Fed support for some time and the Fed will act forcefully to do more as needed. He also pledged to keep rates near zero until full employment and inflation come back.
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On earnings, FB soared after-hours on reporting stable ad revenue and a 18% year-on-year revenue growth, this in spite of a 4 cent earnings miss. MSFT also rose on a 15% increase in sales and a beat on both top and bottom lines. The same was true of QCOM, which also beat on both lines, but warned they forecast a 30% drop in phone shipments in Q2. Bear in mind that many major financial news outlets report that the analyst estimates are worthless this quarter and of even less value for next quarter as most companies have completely dropped forward guidance and major Wall Street Industry Analysts have given up with the gaming. So, don’t focus on earnings reports as an indication of anything but a news event. Trade the chart alone and be fast.
On the Virus front itself, the global headline numbers are 3,235,722 confirmed cases and 228,605 deaths. In Italy, 12.4 million workers have asked for emergency funds from their government. In good news, in China, road traffic in Beijing and Shenzhen is heavier now than it was a year ago while Shanghai is almost the same. This implies that s economic activity (and oil demand) has resumed at the same pace as before the virus shutdowns. Meanwhile, in Japan, the government has extended the national emergency for another month (originally to end May 6) as their outbreaks continue.
In the US, we have breached the million-case mark, with 1,064,572 confirmed cases and 61,669 deaths. However, the priority is now no longer the virus, but economic recovery. Toward this, the President said that the federal social distancing guidelines will “fade out” when asked about extending them. The VP said they were “very much incorporated” into the voluntary reopening guidelines (that many states and even more people haven’t adopted as they move to reopen more quickly). Still, the President said he is “very much in favor of what they (Governors who are opening up their states) are doing” as you’d expect him to be with his changed focus.
Overnight, Asian markets were green, with the lone exception of India. However, in Europe, the opposite is true as markets are in the red so far today, with the exceptions of Finland and Denmark. As of 7:30 am, US futures are mixed, pointing to a 1% gap up in the QQQ, but flat opens in the DIA and SPY.
The major economic news for Thursday includes Mar. PCE, Q1 Employment Cost Index, Mar. Personal Spending, and Initial Jobless Claims (all at 8:30 am) and April Chicago PMI (9:45 am). On the earnings front, MO, AAL, ABMD, BAX, CHD, CI, CMCSA, COP, DAN, DOW, ETN, BEN, GPN, HBI, ICE, IDXX, IP, K, KHC, LKQ, MMC, MCD, TAP, MCO, NLSN, PH, PNR, PWR, RMD, SO, SWK, TPR, TFX, TXT, TWTR, VMC, WLTW all report before the open. Meanwhile, AMZN, AMGN, AAPL, AJG, BMRN, COG, CXO, EMN, EIX, FBHS, FTV, GILD, HP, ILMN, MGM, MOH, PRGO, PSA, SGEN, SYK, UAL, V, WDC, WHR, X all report after the close.
The 6-day uptrend remains intact, as Bulls clearly are seeing the good and ignoring the bad news. Gaps and volatility remain the norm and we should expect bad economic news to continue. So, all we can do is remained focused and trade the chart in front of us. Just bear in mind we either need to be fast (day trade) or slow (longer-term holds) in a market that does not match the data. Be very cautious about swing trades, unless you can handle significant short-term pain.
Ed
No Trade Ideas for 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
Yesterday say saw some profit-taking come in immediately after the substantial gap up open. Still, the overall trend trajectory in the indexes remains bullish as we continue to test price resistance levels. Today we face a big round of earnings reports, a GDP reading that consensus suggests will dive into negative territory and an FOMC decision. Anything is possible, so cinch up your big boy pants and prepare for price volatility to continue to challenge your trading skills.
Asian markets closed the day flat, and European markets seem to be doing the same this morning, chopping around with modest gains and losses. However, the US futures seemed filled with confidence this morning, pointing to another gap up ahead of a big day of data.
Economic Calendar
Earnings Calendar
On the hump day earings calendar, we have more than 300 companies reporting. Notable reports include AFL, AMT, ANMT, ADM, AZN, BA, BSX, CCL, CCI, DIN, EBAY, EPD, FB, GRMN, GD, GE, HAS, HUM, LH, MA, MSFT, NSC, NOC, PBI, QCOM, RCL, SBH, SCI, NOW, SHW, SPOT, TDOC, TSLA, RIG, VLO, & YUM.
Top Stories
Today we will hear from the FOMC that’s not expected to hold on current interest rates. However, they could provide more insight into the string of unprecedented actions.
The president invoked war powers to order meat packing companies to remain open as many warn that the supply chain is beginning to breakdown due to closures of many processing facilities. Health officials warn with so many of the industries workers infected, and lack of protective equipment could have serious ramifications.
The hard-hit country of Italy suffered a credit rating downgrade to just one notch above junk status as debts soar due to the pandemic impacts. Fitch warned that a second wave of infections could destabilize their economy due to debit risks with Italy.
Technically Speaking
The bulls stepped back slightly yesterday as if they were in a wait and see mode for the next FOMC decision. The QQQ suffered the most profit-taking of the indexes that began immediately after the significant gap up open. A good reminder not to chase opening gaps that challenge price resistance or price support levels! Even with the modest profit-taking yesterday, the trend trajectory remains bullish, with investors holding on to hope that the economy can restart quickly. However, a business that due resume operations will have to operate in a new normal that will require daily employee health checks, sanitization requirements, and lower capacity rules that provide for social distancing. The concern is, will consumers return and what liabilities will they face if new infections occur as a result.
Today anything is possible with a big round of earnings reports, a GDP that’s likely to dive into negative territory and the FOMC decision.
The bulls gapped markets higher at the open Tuesday, but after that, the bears were in control. The big dogs of tech (GOOG, AMZN, FB, MSFT, AAPL) led markets lower all day, with some of the strongest selling taking place the last 15 minutes. On the day the SPY printed a Dark Cloud Cover and the QQQ an Evening Star. Both signals coming at resistance levels. At the close, the SPY was down 0.47%, the DIA down 0.12%, but the QQQ down a big 1.88%. The VXX was only up slightly to 39.07 while the T2122 4-week High-Low Ratio remains in nose-bleed territory at 97.82. Oil (WTI) closed down only slightly to $12.71/barrel while the 10-year bond yield also fell a bit to 0.611%.
During the day the President issued an executive order to force meat processing plants to remain open using the Defense Production Act. He mentioned TSN in particular after their call for help, but the idea is to force meat supplies to remain intact, while also removing any liability problems from the companies (his words). The move also helps the large livestock producers who were facing massive culls (about 160,000 animals per day) if they had no place to ship market-ready animals.
After the close the Fed reached out to banks to discuss how they should implement their own $600 billion “small business” (up to 10,000 employees and $2.5 billion in revenue) loan program. GOOG/GOOGL also posted a 13% revenue increase and also beat reduced earnings estimates for the quarter. Still, they also said their major cost-cutting efforts will remain in place (due to an expected dramatic reduction in advertising demand in Q2). For its part, AMD posted a miss on both the top and bottom lines. Meanwhile, F warned of a 15% revenue decline and said that it expects to lose $5 billion during the second quarter. However, F also said it thinks it has sufficient cash to make it through the virus/recession without seeking to raise more money.
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On the Virus front itself, the global headline numbers are 3,152,556 confirmed cases and 218,491 deaths. In Europe, Greece, Portugal, Austria, and France all announced plans to begin slow economic reopening in the next week. However, Russia admitted to shortages of protective gear and President Putin said the country faces a new and grueling phase of the pandemic. Ominously, Germany’s “R-nought” (how many people each infected person then infects) is now back up to 1 (from 0.75) after a week of reopening. Any value over 1 means the spread is out of control again.
In the US, we have breached the million-case mark, with 1,035,765 confirmed cases and 59,266 deaths. Dr. Fauci (NIH) told CNN that everyone who needs a test will be able to get one in another 5-6 weeks (early June), but he stressed there is a difference between “needs” and “wants.” Meanwhile, the President indicated he would block federal aid to states unless they take action against “sanctuary cities” in an attempt to use the crisis to get his way on the immigration issue.
Overnight, Asian markets were mixed, but mostly green. In Europe, the same is true as markets are wavering on either side of flat so far today. And as of 7:30 am, US futures are pointing to an uneven gap higher at the open, with DIA up 0.85%, SPY up 1.1%, and QQQ looking at a 1.5% gap up.
The major economic news for Wednesday includes Q1 GDP (8:30 am), Mar. Pending Home Sales (10 am), Crude Oil Inventories (10:30 am), the FOMC Rate Decision and Statement (2 pm) and the FOMC Chair Presser (2:30 pm). On the earnings front, ADP, AMT, ANTM, AVY, BA, BSX, CME, GRMN, GD, GE, HAS, HLT, HUM, LHX, LH, MKTX, MAS, MA, NSC, NOC, R, ROL, SHW, VLO, and YUM all report before the open. Then after the close, AFL, ALGN, ADM, CCI, DRE, FB, HIG, HOLX, MSFT, QCOM, RJF, TSLA, URI, VRTX, and EBAY all report.
The 5-day uptrend remains intact, but resistance may be proving itself in the major indices. Gaps and volatility remain the norm and we can expect bad economic news. However, the Bulls clearly have had the desire to ignore bad news and look toward a rosy future down the road. Remain focused and either trade fast (day trade) or slow (long-term holds). Be very cautious about swing trades, unless you can handle significant short-term pain.
Ed
Trade Ideas for your consideration and watchlist: GIS, CAT, NUE, AMAT, PGR, ZTS, CDNS, CTXS, MSI. 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
