A massive week of earnings and a jam-packed economic calendar that includes an FOMC meeting will give traders and investors an awful lot to digest this week. This morning US futures are ignoring the 16% decline in West Texas crude pointing to a gap up open that looks to challenge the current consolidation resistance in the DIA, SPY, and QQQ. With so much data coming our way expect substantial price volatility to challenge even the most experienced traders.
Asian markets rallied overnight as the Bank of Japan continues to ease monetary policy. European markets hoping for further lock-down easing are bullish across the board this morning. US Futures that opened in the red yesterday now suggest a gap up open of more than 200 down points. This week the market may be a lot of things, but boring is not likely to be one of the descriptions.
Economic Calendar
Earnings Calendar
We have a hectic earnings calendar this week, and we kick it off with more than 160 companies reporting results. Notable reports today include BRO, CE, CINF, CLR, CRSP, FFIV, KDP, NXPI, OMF, PKG, and PPG.
Top Stories
Oil is once in again in decline this morning with West Texas crude futures down more than 16% at just over $14 a barrel. However, US Futures are choosing to ignore the slide in oil prices this morning, pointing to a higher open.
Adidas reported a 19.5 decline in sales in the first quarter and projected a 40% decline for the second quarter. Although their online sales have increased consumer habits, have changed as people are staying home due to the virus.
This week several states will try to reopen some business with imitations that continue to promote social distancing. Many health officials suggest it’s too early, and with a shortage of testing, the possibility of higher infection rates may occur. What they found in Europe that even as stores reopened, consumers continued to stay away, fearing contamination, suggesting recovery will be a complicated process.
Technically Speaking
The DIA, SPY, and QQQ have traded sideways in a broad consolidation range that covers about 1700 Dow points between support and resistance. With futures choosing to ignore the 16% slide in West Texas crude, it looks as if we will test the resistance levels with a gap up open this morning. The T2122 indicator at the open is likely to warn of an over-extended condition, so be careful rushing in with a fear of missing out. With funding for small business restored last Friday with another stimulus bill loans will begin later today. However, they are already saying the money will be gone quickly, and additional funding will be required. Back to work, congress!
We have not only a jam-packed earnings calendar for the market to digest but also a busy week on the economic calendar that includes and FOMC meeting. As US infections approach 1 million, the death toll tops 55,000, and unemployment numbers head toward great depression levels expect price action to remain very challenging with possible intra-day reversals and significant overnight gaps. With the SPY opening, this morning 30% above the market lows I wonder how much longer the bulls can maintain the upward pressure.
Friday saw a half percent gap higher at the open, fading back down to the previous close and then from 11am into the close a strong rally that saw us close near the highs. For the day, the SPY was up 1.39%, the DIA up 1.17%, and the QQQ up 1.58%. The VXX closed down to 41.52 and the T2122 4-week High-Low Ratio slid back down to the edge of overbought territory at 79.82. The 10-yr bond yield fell slightly to 0.606% and Oil (WTI) kept its rally going, closing at $17.18/barrel. However, for the week, we saw large Doji candles that were down for the first time in 3 weeks across all three major averages.
Over the weekend several major analysts and fund managers commented that they feel the market is over-valued and due for a drop. These include people like Mohamed El-Erian, Carl Icahn, David Tepper, and others. They point to four premises for their stance. First, they feel the market simply has not and cannot grasp how much damage has been done to the economy. Second, they believe a major debt default crisis is still in the offing. Third, they feel outbreaks are inevitable during “reopening” and, even if contained, these will cause market fire sales. Finally, they point to the wrong groups leading the market for a “real” recovery. (According to them, it should be financials, durable goods, and retail leading the way, not healthcare, technology, and utilities as we’ve actually seen.) For those reasons, they expect more downdrafts in the short-term and, in the longer-term, feel it will take 3 years to return to “peak earnings” again. Whether these “experts” are right, wrong, or just trying to talk themselves into a better position is irrelevant. However, the ideas are worth considering when deciding how much of your account to have invested in this market.
On the Virus front itself, the global headline numbers are 3,017,776 confirmed cases and 207,722 deaths. In Europe, food prices are a concern as Russia has halted wheat exports for now and drought is impacting the current growing season. However, in Spain there was a ray of hope as they began to allow limited outdoor exercise and say, if the number of new cases keeps falling, it will ease further on May 1. In Asia, Japan now has the largest number of new daily cases as some of its cities and prefectures have now reinstated lockdowns. However, India has eased a bit, opening residential-area shops under certain restrictions.
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In the US, we are approaching the million-case mark, with 987,322 confirmed cases and 55,415 deaths. It’s worth noting that Friday saw the largest number of new cases reported so far in the US. However, the epicenters of New York and New Jersey continue to show a decline in their new case rate. Over the weekend, Dr. Fauci (NIH) said that the US needs to double testing before wide-spread reopening happens, but also that he hopes we can do this doubling in the next couple weeks. In the supply chain, 2 more major meat processing facility closed. So, now about 25% of US meat production is shut due to the virus. On the other hand, a number of states (mostly along political lines) like Georgia, Mississippi, Oklahoma, and Texas that have started reopening many businesses and up to 20 will have a partial opening by the end of the coming week.
Overnight, Asian markets were mostly green with the exception of India which was just on the red side of flat (-0.25%). In Europe, markets are strongly green across the board so far today. And as of 7:30 am, US futures are pointing to a one percent gap higher at the open.
There is no major economic news scheduled for Monday. However, on the earnings front, AMG, AWI, CMS, CHKP, CNX, DORM, LECO, IR, report before the open. Then AVT, AMAT, AMKR, CE, CINF, CNI, FFIV, KDP, NOV, NXPI, PFG, PPG, PKG, SANM, and UHS report after the close.
The uptrend remains intact. So far, earnings have been “good” against dramatically lowered expectations, but companies continue to cancel guidance and report lower year-on-year earnings. However, with over 140 of the S&P reporting and the Fed meeting again this week, we may see a holding pattern Monday and Tuesday as traders wait to see which direction the wind is blowing.
All this is to say we still have a bullish market, at or near resistance, and facing volatile news-driven intraday swings and overnight gaps. In this environment, traders need to continue to remain focused and either quick (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this market unless you can handle significant short-term pain.
Ed
Trade Ideas for your consideration and watchlist: HII, ABT, ROP, SCHW, DOMO, NLOK, EXPD, CSCO, INTC, HD, TSN. 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
Thursday was a bit of a roller coaster ride. Markets gapped higher half a percent, despite the new unemployment claims. It then rallied until about 10:45 am when the leak was reported by the UK publication Financial Times that said the GILD drug Remdesivir has failed its first random clinical trial. The bears sold that news the rest of the day to close near Wednesday’s close. This produced ugly candles in all 3 major indices, with high wicks and closes near the lows. For the day the market was flat with the SPY down 0.01%, the DIA up 0.13%, and the QQQ down 0.21%. The VXX also lost slightly to 44.06 while the 10-yr bond yield fell to 0.603% and Oil (WTI) rallied again, up 22.5% to $16.87/barrel.
Jobless claims came in at 4.4 million (4.3 estimated). That takes the 5-week total to over 26 million claims, which corresponds to a 23% unemployment rate. However, after the close, the House passed the $484 billion “Relief Bill 3.5.” This came after a largely party-line vote to create a new panel with the authority to investigate the federal response to the pandemic. (Republicans seem to prefer to just trust the Administration, while Democrats have no such trust.)
On the Virus front itself, the global headline numbers are 2,745,786 confirmed cases and 191,806 deaths. In Germany, shoppers did not come out in numbers even though PM Merkel lifted their restrictions. The number of new cases in Europe continues to reduce in rate. However, in Asia, a second wave seems to be picking up steam in places as Indonesia reported its largest jump in new cases as did Singapore (mainly foreign workers the keep in dormitories).
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In the US we now have 886,709 confirmed cases and 50,243 deaths. During the day, Dr. Fauci said he is not overly confident at the moment that we have what it takes (in terms of the testing capacity to support a successful reopening) and that we need to continue significantly ramping up testing and tracing capability. However, at the daily presser, President Trump said he disagrees with Dr. Fauci (his chief infectious disease expert) and that we’re doing great on testing. Still, he also said he may extend the social distancing guidelines into early summer and possibly beyond. This all comes as the first major openings start today in the state of Georgia.
Overnight, Asian markets were re across the board with the exception of Australia (+0.49%). In Europe, markets are also in the red so far today, with odd exceptions like the Swiss and Greeks). However, as of 7:30 am, US futures are pointing to an open a half percent on the green side of flat.
Friday’s major economic news is limited to Mar. Durable Goods (8:30 am) and Mich. Consumer Sentiment (10 am). However, on the earnings front, AXP, FCX, PSG, SNY, VTR, and VZ report before the open.
The uptrend of the last couple days continues begrudgingly. Maybe this means we are climbing a wall of worry. However, oil has stabilized nicely, gaining back quite a bit from its Tuesday massacre (strongly negative price) and this is a calming factor for markets. Earnings continue to be “good” against dramatically lowered expectations, but companies continue to cancel guidance and cut budgets. For example, GOOGL cut their advertising budget in half after the close and instituted a hiring freeze for both permanent and contract workers.
All this is to say we still have an uncertain and volatile market, filled with gaps and news-driven intraday swings. 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. Also remember it’s Friday, which is a great time to lock-in some profits and reduce risk going into 2 days of news cycle that cannot be addressed before Monday.
Ed
No Swing Trade Ideas for your consideration and watchlist 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
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.
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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.
