A big day of earnings and economic reports will give today’s market a lot to digest. With more than 22 million Americans out of work, there is an expectation that more than 4 million more will join them today. Add to that more than 200 companies reporting earnings and wildly fluctuating oil prices; we have the stage set for another day of challenging price volatility.
Asian markets closed mixed but mostly higher overnight as South Korea reports a decline in fist quarter GDP. European markets are hovering around the flat-line this morning, keeping earnings results in focus. US Futures are also relatively flat this morning ahead of a big day of data where anything is possible.
Economic Calendar
Earnings Calendar
We have our biggest day of earnings this week, with more than 200 companies reporting results. Notable reports include AAN, ALK, BX, COF, CTXS, DPZ, EW, LLY, FCX, HSY, ITW, INTC, IVZ, IRM, LOGM, PHM, LUV, TSCO, UNP, UAL, VRSN, GWW & XRX.
Top Stories
Traders will be keeping in an eye on the jobless claims this morning with an expectation of over 4 million additional Americans join the jobless rolls. There is also worry there will be a massive layoff of state and local governments with federal aid channeled elsewhere.
Georgia’s governor has decided to begin reopening the business starting today even though their infection numbers have yet to show a decline. The President said he disagrees with the decision to open os quickly.
Oil made a nice rally yesterday after the President issued a warning to Iran that harassment of tankers in the straight will no longer be tolerated ordering the US Navy to destroy violators.
Technically Speaking
Although we had a nice gap up yesterday as oil prices began to stabilize, price action in the indexes was choppy and displayed considerable uncertainty. On the one hand, we saw the bulls actively defending the support of the current consolidation. On the other, the bears were active enough to prevent prices from filling the entire gap down of the day before. Today the market will have to digest another round of Jobless Claims that may top more than 4 million, a reading on PMI as well as New Home Sales, amidst the biggest day of earnings so far this season. The DIA and SPY continue to struggle with the resistance of a declining 50-day average while the QQQ enjoys the benefit of using its 50-day as support.
Yesterday across the country, there were nearly 28,000 new infections reported, and over 2200 fellow, Americans, lost there lives. As of this morning, the US death toll tops 84,000. A grim reminder that recovery is still a long way off, and businesses face a very challenging environment as the country tries to emerge from lock-down. We should continue to see volatile price action in the days and weeks ahead as we try to navigate uncharted waters. Stay focused on price action and plan your risk carefully as we approach the weekend.
Wednesday was a bullish, but also indecisive day as oil price stabilizing allowed markets to gap higher at the open (perhaps aided by hope for the near $500 billion extra stimulus coming this week). Prices gapped about 2% higher at the open and wavered the rest of the day on the positive side of the gap. However, a late selloff took prices back near the open. The SPY closed up 2.22%, the DIA up 1.98%, and the QQQ up 2.97%. All 3 of the indices printed Doji or Spinning-Top type candles. The VXX fell to 44.19 and the T2122 4-week New High/Low Ratio average climbed back to 71.59 (still in mid-range, but approaching overbought territory). The 10-yr bond yield rose to 0.617% and Oil (WTI) closed 23% higher to $14.23/barrel.
On the stimulus/relief front, negotiations over “bill 4” are underway as bill 3.5 will be approved by the House Thursday, bringing total (non-Fed) relief spending to just under $3 trillion so far. The next bill is initially targeted to focus on infrastructure and state and local government aid. However, Senate Majority Leader McConnell says he favors allowing cities and states to declare bankruptcy to unburden them from high pension costs. He feels this is preferable to giving those governments federal bailout funds. On the opposite side of that argument, states and municipalities are already planning for massive layoffs and wage cuts due to revenue shortfalls caused by the virus. Among these are Los Angeles, Detroit, and a number of states who are planning mass layoffs and forced furloughs.
On the Virus front itself, the global headline numbers are 2,656,627 confirmed cases and 185,166 deaths. In Germany, face masks were made mandatory, following the Czech Republic, Slovakia, and Austria’s lead. At the same time, in the US we now have 849,092 confirmed cases and 47,681 deaths. Even so, more states have announced they plan to reopen at least partially in the next few days.
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The state of Georgia is seeing a lot of controversy over its reopening. For his part, President Trump said he strongly disagrees with Georgia Governor Kemp’s decision to open close-contact businesses (theatres, bars, tattoo parlors, barbers, spas, gyms, etc.) Friday. However, Trump also offered support and praise for the Governor for the move as well. So, apparently he strongly supports the opening (demands it), but also doesn’t want to agree with any early-mover or risky parts of opening. Aside from that, at the nightly presser, Dr. Fauci (NIH) said he would advise the Governor not to do it. He also pleaded with states not to open too early and for people to maintain strict guidelines even after reopening. He said we will have COVID-19 in the fall and that if people don’t adhere to guidelines, we are likely to have a new case rebound and need to close the country again, maybe even before the fall.
Overnight, Asian markets were mixed again, close to the flat line with the exceptions of Japan (+1.5%) and India (+1.4%) as South Korea’s economy contracted 1.4% in Q1. In Europe, markets are also mixed but lean toward the green so far today. As of 7:30 am, US futures are just on the red side of flat as traders wait for the Weekly Jobless Claims (4.3 million new claims expected).
Thursday’s major economic news includes Initial Jobless Claims (8:30 am), Apr Mfg. PMI and Apr. Services PMI (both at 9:45 am), and Mar. New Home Sales (10 am). On the earnings front, APD, ALLE, ADS, CTXS, LLY, HSY, HBAN, IR, IVZ, PHM, TSCO, UNP, AND GWW all report before the open. BMRN, COF, ETFC, EW, FE, INTC, PBCT, RHI, SIVB, VRSN, and VRTX all report after the close. It is worth noting that so far this earnings season, just 17% of the S&P500 have reported. While two-thirds of those have beaten lowered analyst estimates, they’ve still posted an average decline of 14% year-on-year in earnings
The uptrend remains broken, but not by much and Wednesday’s gap-up puts the bulls back in the game short-term. Gaps and volatility remain the norm, with hope based on reopening, relief funds, and Oil price stabilization. However, earnings and those Jobless Claims are likely to drive trading Thursday. In this environment, traders need to continue to be very focused, and either be fast (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist for Thursday. 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 oil prices continue to plunge, the Senate passes the 4th major spending bill lifting the spirits of the US Futures. The US House plans to vote on the $484 package later this week with money for small businesses, hospitals, and testing. With a big day of earnings, reports, prepare for the volatile price action to continue.
Asian markets closed mixed but mostly higher as they monitor the slide in oil prices. European markets are currently trading in the green across the board this morning. After a historic drop in crude, the US Futures point to a bullish open holding onto critical price supports and current trends. However, with nearly 150 companies reporting, traders will have to remain flexible and focused on price as anything is possible.
Economic Calendar
Earnings Calendar
On the Hump day earnings calendar, we have nearly 140 companies fessing up to quarterly results. Notable reports include DAL, AA, T, BKR, BIIB, SAM, CSX, DFX, KMB, KMI, LRCX, LVS, DEE, ORLY, DGX, STX, SAVE,& XLNX.
Top Stories
After the bell yesterday, the Senate Passed a 484 billion relief plan that includes aid for small businesses and hospitals as well as money to expand virus testing. The bill now heads to the House that hopes to pass the legislation by the end of the week.
Netflix saw a considerable subscriber increase when it reported earnings after the bell yesterday. The initial reaction sent the streaming service sharply higher, but after the conference call, prices settled lower, and now the stock looks to open slightly lower than yesterday’s close.
Home sales dropped 8% last month, and there is a worry it could get worse as many people have chosen to delist their homes as virus impacts change consumer habits.
The meltdown in oil continues as Brent falls an additional 5% with crude futures dip below $11.00 per barrel.
Technically Speaking
The last couple of days of price action has the VIX back on the rise closing back above a 45 handle, as oil continues to plunge. Today we get a reading on oil supplies, which may continue to add selling pressure as supplies outpace demand. However, more help is on the way as the Senate passed the 4th major spending bill to help small businesses, hospitals, including massive funds for testing. Later today, the President plans to sign an executive order temporarily halting all immigration to slow the spread of the virus. Legal challenges to the rule are likely.
Although the recent pullback has raised the level of fear in the market overall, there has not been much technical damage to the index charts. The QQQ experienced the most substantial selling on the day, but that’s not a big surprise because it was the most overextended index. This morning even as crude oil continues to slide south, the US Futures point to a substantial gap up choosing to focus on the new 484 billion dollar relief bill that the House hopes to approve by weeks end. We have a big round of earnings today, so expect price action to remain challenging and volatile.
Tuesday was a down day as oil led us lower again. Following the May contract going negative Monday, on Tuesday the June contract fell 46%. As a result, stock prices gapped down 2% at the open, sold off again mid-morning and then just ground sideways the rest of the day. Prices closed near the lows as the SPY lost 2.99%, the DIA lost 2.69%, and the QQQ lost 3.69%. VXX was up again to 46.38 and the T2122 4wk high/low ratio avg. fell to 57.78 (so it remains in mid-range). The 10-year bond yield fell again to 0.563% as money chased bond safety. Oil looked great on a daily percentage basis compared to the smoking crater of Monday, rising 124%. However, it also closed at $9.06/barrel which would be the lowest close since World War II other than Monday.
After the close, the Senate approved the $484 billion addition to the $2.2 billion bailouts and stimulus plan. This includes $320 billion more for the small business payroll loan/grants, $60 billion in small business disaster loan/grants, $75 billion for hospitals, and $25 billion for more COVID-19 testing. The main items pushed off until the next so-called “relief bill 4” is money for state and local governments (which the White House may oppose) as well as infrastructure (which Senate Republicans have opposed). There was no mention of the President’s Tuesday promise to provide bailout money to help the US oil industry. The House is scheduled to vote on the bill Wednesday or Thursday.
On the Virus front, after the close, the director of a key US vaccine agency left his job unexpectedly. Dr. Rick Bright was leading the Biomedical Advanced Research and Development Authority, but was apparently demoted after clashes with HHS Dept. leaders. One of his deputies takes over as the acting director. Meanwhile, the global headline numbers are 2,580,729 confirmed cases and 178,668 deaths. At the same time, in the US we now have 825,306 confirmed cases and 45,343 deaths.
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In terms of restriction easing, Attorney General Barr threatened to sue Governors who keep strong restrictions. He claimed that stay-at-home orders are too close to house arrest, while also saying “he wasn’t saying they weren’t justified.” Meanwhile, many states seem to oppose the AG’s opinion, such as the North Carolina Governor saying “Staying home is saving lives,” Louisiana saying it may issue another stay-at-home order when the current one expires May 1, and New Hampshire saying it has “a ways to go before it reopens.” Beyond reopening, the CDC warned the public that a second wave of the virus next winter could even worse than the current one.
Overnight, Asian markets were mixed but leaned to the green side. In Europe, markets are green across the board so far today. As of 7:30 am, US futures are pointing toward a 1%-1.75% gap higher, perhaps based on hope for the new $484 billion in relief or on oil markets stabilizing.
The major economic news for Wednesday is limited to Crude Oil Inventories (10:30 am), which we already know are massive. However, on the earnings front, T, APH, BKR, BIIB, DAL, ERIC, IPG, KMB, LAD, NDAQ, NEE, NLSN, DGX, STM, and TMO all report before the open. Then WHR, LVS, KMI, DFS, CSX, FTI, AA, LRCX, ORLY, STX, FNF, AMTD, RUSHA, LSTR, and XLNX report after the close.
The uptrend has now been broken, but Tuesday’s ugly candles took all 3 major indices back down near potential support. Gaps and volatility remain the norm, while earnings and nasty economic news continue to drive trading. So, we need to continue to be very focused, and either be fast (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist for Wednesday. 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 yesterday’s nasty whipsaw as oil plunged into negative prices for the first time in history, a shell shocked market braces for what comes next. Can the market hold up as businesses report the full impacts of the virus on company earnings? Only time will tell, but traders should prepare for challenging price action and significant volatility in the weeks ahead. As the country tries to emerge from the lockdown, one has to wonder what the new normal will look like as we wait for a possible vaccine.
Asian markets closed in the red across the board in reaction to the collapse in crude prices. European markets are decidedly bearish this morning with the major indexes sliding south more than 2%. US Futures point to steep losses at the open with bearish pressure seemingly growing as the morning progresses. Hold on tight; the open is shaping up to be a bumpy one!
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have more than 100 companies reporting results. Notable reports include KO, NFLX, CP, CB, CMA, DOV, EMR, FITB, FLR, JBLU, LMT, NAVI, PM, PLD, REV, SNAP, SIX, SYF, TXN & TRV.
Top Stories
Citing the attack of the invisible enemy, the President has decided to suspend all immigration in a move drawing criticism from some and praise from others.
Anti-lockdown protests have sprung up around the country, with many finding themselves confronted by pro-lockdown protesters. Governor’s, say that its understandable everyone wants to bet back to normal but would like to see increased testing available before easing restrictions.
Yesterday oil experienced a historic event with the price dropping into negative territory. The President is now in the market to buy 75 million barrels to top of the strategic reserve, but some analysts that suggest the price may still go lower as supply continues to surpass demand.
Technically Speaking
Yesterday the indexes experienced a nasty intra-day whipsaw with Dow traveling nearly 1000 points throughout the day as oil price plunged into the negative on the short-term contracts. With supplies far outpacing demand, some suggest that oil could still go lower as we wait for the delayed impacts of production cuts. Coca-Cola reported this morning that the pandemic has hut demand for their products with the volume off by 20% so far in April. Today we have a big round of earnings, and the futures point to the nervousness of the market currently suggesting another gap down of more than 300 points. As I’ve mentioned before, this earnings season is likely to be very challenging with extreme volatility as we learn of the real business impacts of the pandemic.
The good news thus far is that the DIA and SPY have built helpful consolidation that may well prove to hold as support in today’s pullback. If it does hold, we could see bulls step up buying the dip, but should it fail the slide south to the next level of support will damage the current trends and shake the confidence of recovery. The QQQ continues as the strongest index, but appearing a bit overextended in the short-term a pullback to test the support of the 50-day average is not out of the question. We should expect and plan our risk with the idea that more intra-day whipsaws and full-on overnight reversals are possible in the days and weeks ahead.
Monday a fairly blah day except for oil. Oil had been pounded again the previous night, led markets to gap down and then was relentlessly pounded all day. For the first time ever, oil (May contract that expires Tuesday 4/21) traded negative, and not just a little negative. At one point, WTI was trading at -$40/barrel and it closed at -$31.37/barrel. This pressure held the bulls down and all the major indices closed near the lows of the day. The SPY lost 1.73%, the DIA lost 2.39% and the QQQ lost 1.18%. The VXX closed up almost 10% to 42.84 and the 10-year bond yield fell slightly to 0.616%. However, it was Oil (WTI) that stole the show, down an incredible 171% on the day.
The story behind oil is that every tanker, tank, dry well, and bucket of available storage has been filled. However, the tankers on their way from Saudi Arabia (yes we still import every day) can’t just stop and all the US shale wells can’t be turned off either. It turns out, that in addition to other short-comings, if you stop pumping a fracked well, it immediately starts degrading, meaning it will take even more fracking to get that well back to normal production later. So, shale producers would rather pump it at a loss than shut down their oil fields. The problem is, with nowhere to put that oil, this drove the front month contract deeply negative. So, those losses per barrel are very steep now. And while the June contract still has another month to find someplace to pour the oil, price is still falling and nothing but a complete stop of supply or massive pick-up in demand will change this, with neither likely happening except very gradually.
On the Virus front, after the close, a study was published that found “much more widespread” antibodies (people who have had or now have the virus) in Los Angeles County than previously estimated. While great (to find the virus less deadly than expected), the study still found only 4% of the adult population had antibodies. This means 96% have not had the virus yet and are still at risk, plus we are unsure of how well or even if people who do have the antibodies are protected from reinfection. So, this is maybe good news, but we don’t know how much.
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The global virus headline numbers are 2,498,999 confirmed cases and 171,334 deaths. At the same time, in the US we now have 792,938 confirmed cases and 42,518 deaths. Several states have started easing restrictions, under pressure from those who feel the who pandemic is overblown. Some opening up in spite of not meeting the guidelines. However, Dr. Fauci (NIH) again warned protesters Monday “Unless we get the virus under control, the real recovery economically is not going to happen.” So, the question remains open as to whether the trillions of dollars spent on the bailout and the month of time lost to lockdown will end up wasted by allowing the virus spread to resume at pace.
On the small business bailout front (bill 3.5), negotiations continue, but no deal has been reached as of Monday evening. The sticking point seems to be that the White House will not accept $25 billion for testing in the bill and Democrats wanting money for state and local governments that the Republicans oppose.
Overnight, Asian markets showed us red across the board as oil prices continued to fall overnight (despite a $55 boost from rolling to the June contract). In Europe, markets are also down about 2% across the board at this point in their day. As of 7:30 am, US futures are pointing toward another 1%-2% gap lower.
The major economic news for Tuesday is limited to Mar. Existing Home Sales (10 am). However, on the earnings front, KO, CMA, DOV, EMR, FITB, HCA, LMT, NTRS, OMC, PCAR, PM, PLD, SNA, SYF, and TRV all report before the open. CMG, CB, NFLX, and TXN report after the close.
The uptrend remains in place, but Monday’s candles were ugly, as well as gaps and volatility are still the norms. Optimism seems to be the rule lately. However, we are in earnings season and there will continue to be a stream of both bad economic news and good virus-hope news. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take in a news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist for Tuesday. 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 remarkable rally off the lows now faces the bulk of earnings, and we will finally see the actual company impacts of the pandemic. It seems everyone and their dog is attempting to predict what comes next when in truth, anything is possible. Expect significant price volatility, stay focused on price, and remember what we want to happen is not important; what current price action indicates is! Predictions are worthless without price action confirmation.
Asian markets closed mixed but mostly lower overnight as China cuts prime loan rates. European markets are modestly lower this morning across the board as Germany begins to reopen its economy. Reacting to plummeting US Crude prices, the futures point to a Dow gap down of more than 400 points ahead of earnings reports.
Economic Calendar
Earnings Calendar
As we begin the new week and a ramp-up of earnings with 77 companies stepping up to report. Notable reports include ALLY, ACC, EFX, HAL, IBM, MTB, NVR, TFC, & ZION.
Top Stories
US crude price dive over 20% due to the coronavirus crushes the demand and pulling the futures lower this morning. Prices on the May contract for West Texas cured tanked 19% to $14.80 per barrel and could remain under pressure for the next month, as reserves continue to grow.
The Senate is nearing a vote on a 370 billion dollar deal for small businesses that had quickly run out of money due to the virus impacts.
As numbers begin to improve in Germany, the country will start to reopen, allowing some shops, car dealerships, etc. while hot spots around the world such as Singapore, Spain, and Russian continue to spike.
Technical Speaking
The remarkable rally that has recovered more than 50% of the virus sell-off now faces a big week of earnings reports and crude oil prices plunging. The DIA remains under its 50- day average, but the SPY managed to close just slightly above the critical psychological level. Sadly at the time of writing this report, US futures point to a gap down that could produce failure patterns at the 50-day average at the open. The QQQ having surged well past its 50-average is not in jeopardy of failing this necessary technical support, but after rising more than 14% in just 9-day appears quite over-bought in the short-term.
There are those predicting that this current rally will continue with all the Federal spending and the unlimited operations of the FOMC seemingly buying up everything in sight. However, there seems to be an equal number of those predicting that as earnings begin to reveal the actual damage of the virus that we will see a retest of market lows and maybe even new market lows! As for me, I will avoid all the predictions, set aside my bias, and simply trade the chart. The fact of the matter is that retail traders have little to no impact on the direction, so the best course of action is to stay focused on price action sticking to your rules and trading plan. As we wade deeply into 2nd quarter earnings, expect volatility to remain high with enough intr-day whipsaws and overnight reversals to keep us on our toes.
Friday was a volatile day for markets when hope for a treatment drug faded slightly as it became clear only partial preliminary data from an uncontrolled test had been reported. A 2.5% gap-up sold off and then markets wavered most of the day until the bulls rallied hard the last hour. The large-caps closed near their highs, but for a change, the Nasdaq lagged. At day end the SPY was up 2.7%, the DIA up 3.01%, and the QQQ up 0.96%. Accordingly, the VXX fell to 39.05 while the 10-year bond yield rose to 0.642%. Oil got crushed again as WTI fell almost 9% to $18.12/barrel.
On the virus headline front, the world now has 2,421,018 confirmed cases and 165,939 deaths. At the same time, in the US we now have 764,265 confirmed cases and 40,683 deaths. On the bright side, New York said it was “past the high point.” The same seems to be true in New Jersey and Connecticut. However, such statements assume the spread does not resume or at least that any future waves will turn out to be less severe than the first.
The pressure to “reopen American” continued to increase, mostly along political lines, over the weekend. Some opening did take place as Florida opened its beaches and parks. Texas said it will follow suit on Monday and that its retail-to-go businesses can reopen Friday. It’s notable that New York, New Jersey and Connecticut (the virus epicenter in the US) all opened their marinas for boating as well. So, at least recreational areas are starting to open.
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On the small business bailout front (bill 3.5), both Sec. of Treasury Mnuchin and House Speaker Pelosi told reporters they were very close to a deal Sunday afternoon. Details are not clear, but it seems to be looking in the $400-$500 billion additional spending range. This would add another $300 billion to the small business bailout fund, provide $50 billion in disaster loans. Both sides hope for approval from both houses by mid-week. This comes as JPM announced that it already has $26 billion in small business relief applications that still need funding.
Overnight, Asian markets were mixed but mostly red on a Chinese Prime Loan rate cut of 20 basis points to 3.85% for a one-year loan. Oil has continued to be pounded all through the overnight session and at 7:30 am sits at $13.03/barrel (up off a low of $12.43, but even so the lowest price in 2-plus decades for WTI). In Europe, markets are in the red, but generally down less than a percent at this point in their day. As of 7:30 am, US futures are pointing toward a 1%-2% gap lower.
There is no major economic news for Monday. However, on the earnings front, HAL, MTB, and TFC report before the open. CDNS, EFX, IBM, and ZION report after the close.
The uptrend remains strong, but gaps and volatility also are still the norm. Optimism seems to be the rule lately, ignoring any bad economic news or earnings. However, we are in earnings season and we know there will continue to be a stream of both bad economic news and good virus-hope news. More immediately, the massive sell-off in Oil surely signals huge fear over economic demand. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take in a news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist for Monday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
A hopeful virus treatment from GILD and the President presenting a 3-phase plan to begin reopening the economy has the futures hopping and popping this morning as we head into the weekend. This morning’s gap will bring the DIA and the SPY up to test their 50-day averages. Good news for sure, but let’s not forget that more than 20 million Americans are unemployed, and states are running out of funds to cover claims. Stimulus checks have been delayed, and the small business loan program is nearly out of funds. I guess what I’m saying is be careful, chasing this huge gap with the fear of missing out!
Asian markets rallied overnight despite a 6.8 quarterly contraction in the economy and a doubling the virus death toll sitting accounting lapses. European markets are decidedly bullish this morning with the DAX and CAC up more than 4%. US Futures point to a massive gap up heading into a very light day on the economic and earnings calendar. Let’s party, but keep in mind next week we jump headlong in earnings next week. Plan your risk carefully!
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have a little lighter day with just 27 companies reporting results. Notable reports include KSU, MUSA, RF, & STT.
Top Stories
China says its economy shrank by 6.8 in the first quarter by 6.8%, which is the first quarterly contraction in over 28 years. They have also more than doubled the death toll from the virus calling it accounting lapses. Hmm?
The President announces a 3-phase plan to reopening the economy. However, 7-eastern states have already announced they will remain shutdown until May 15th. Sadly the yesterday’s daily death toll nearly doubled the all-time daily high, suggesting just how difficult and uncertain when things may get back to normal.
GILD says their treatment trial is showing promising results but also careful to say there is a lot of testing to go before a treatment protocol is approved and available for mass production.
Technically Speaking
The jobless in this country now total more than 20 million, states are out of unemployment money, and the small business loan program is also running out of money. Banks slid sharply south yesterday, but the market does not seem care as the steep rally continues even as recession looms. Due to what the government calls, glitches have delayed stimulus checks to reach the public. I suspect we will soon hear that more stimulus programs needed and further debit spending on the way.
Yesterday saw the daily death toll nearly double the previous daily record, but despite that, the President unveiled a 3-phase reopening plan putting states in charge of the decision. The announcement that GILD has promising results from early-stage trials has the market leaping higher this morning even though an approved treatment is likely still more than a year away. Back in the old days, they called that market manipulation, but today the market wants to grab on to any ray of hope choosing to ignore the longer-term impacts. So be it, but be very careful chasing such a massive gap heading into a weekend. Next week we dive headlong into 2nd quarter earnings so plan your risk carefully.
Thursday was an interesting day in markets. Another 5.25 million jobs lost (22 million in the last 4 weeks), a big drop in housing starts and Mr. Market looked right past those numbers to a rosier future. Regardless, stocks opened with a slight gap up and then vacillated the rest of the day, closing back near where they opened. As has been the case lately, the tech-heavy QQQ fared better than the other indices. On the day, the SPY closed up 0.43%, the DIA flat at up 0.05%, and the QQQ up 1.82%. All three printed indecisive candles, but the QQQ was the best of the three. The VXX gained slightly to 40.74, while the 10-year bond yield fell again to 0.617 as money continued to chase safety in Treasuries. Oil (WTI) fell again, closing below $20 at $19.58/barrel.
During the day, Eastern states decided to extend their shutdowns through May 15 in a coordinated decision among NY, NJ, PA, MA, CT, DE, RI governors. In the Midwest, the governors of MI, OH, WI, MN, IL, IN, and KY announced they formed a regional partnership to coordinate their own regional economic reopening. Out west, CA Governor Newsome promised new unemployment benefits and incentives to cover health workers who stay on the job.
After hours, BA announced it will resume production at its Seattle-area factories as soon as Monday. This will include 27,000 employees (17% of their workforce) and all the returning workers will be required to wear masks, maintain social distancing and will be provided with both periodic wellness checks and contact tracing for anyone who does test positive. This is the first major business reopening to be announced.
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At the nightly event, the 3-phase approach for reopening the economy was announced. The guidelines are short on definitions (for example, what exactly are “downward trajectory,” “robust testing,” or even “vulnerable people”). However, ANY “one size does not fit all” plan would likely be short on clarifications. The strategy basically looks for a non-specified decline in the rate of new cases to lead to the first phase of easing. The plan puts most of the responsibility on states for decisions, testing, border control (to avoid cross-jurisdiction spread), etc.
In an afternoon call to Governors, the President warned that states should also be prepared to handle new flare-ups of the virus after easing. During that call, there was push-back to the plan, saying more testing should be in place before the reopening is launched. Drs. Fauci and Birx have repeatedly said, testing, isolation, and tracing are the key to controlling the virus spread, as well as increasing public confidence. However, the President reportedly replied that more testing will need to come after reopening because a working economy is a priority.
For reference, the US now processes about 140,000 tests each day (more than any other country on a “total tests” basis, but still very low on a per-capita basis). That amounts to testing only 0.08% of the American workforce daily. So, even if just 10% of the workforce returns to “work away from home” AND we double US testing capacity, we would still only be testing about 1.5% of the active workforce per day. Worse yet, these tests are a picture in time. This means each worker may need to be tested many, many times unless or until an effective treatment or vaccine are available. Is that enough? The President, Dr. Fauci, Dr. Birx, and the Task Force seem to think it could be.
Either way, the President made a tough decision that we can’t wait any longer. When the Governors agree, we will start to reopen (probably along regional lines). If that approach works, great! We’ll get back to some sort of new normal in 2-3 months. If the plan causes a relapse, we’ll just lockdown again, and come up with a different approach. Yes, some people may be lost, but we’re all going to die someday and there’s no way to say someone might not have died at home or from a trip to the grocery anyway. Cold? Maybe. However, there is no good answer for recovering without risk of relapse into a run-away spread. So, we were always going to face this decision unless we decided to wait for a proven treatment or vaccine. And that just isn’t in the cards from a political, economic, or general public patience standpoint.
On that treatment front, some VERY preliminary testing of a GILD drug was leaked Thursday night. This leak showed the drug may have real potential benefits. However, remember that this information is based on the results from only 25% of the study’s patients, was an uncontrolled (no placebo group) test, and looked at only one dosing level. Still, it is a welcome ray of hope and should buoy market spirits (at least for GILD, which rose 15% after-hours on the leak).
Overnight, Asian markets were green across the board. In Europe, markets are even more strongly green at this point in their day. This includes the 3 major bourses (FTSE, DAX, CAC) all up about 4%. As of 7:30 am, US futures are pointing toward a 2-3% gap higher on optimism about the new drug and economic opening.
There is no major economic news for Friday. On the earnings front, CFG, KSU, PG, RF, SLB, and STT all report before the open.
The uptrend remains in place, but gaps and volatility also remain the norm. Optimism seems to be the rule of the morning, but we are also headed into another weekend. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take in a news-driven market.
Ed
No Swing Trade Ideas for your consideration and watchlist on Friday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
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🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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
