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.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
After a dismal round of economic numbers, the bears launched another attack yesterday. Still, the bulls met the challenge holding the selloff above the short-term uptrend and essential price supports. The tech sector remains the strongest as the QQQ holds above the 50-average showing incredible tenacity amid ugly earnings results. Now the focus turns once again the Weekly Jobless claims that so far, the market has been able to shrug off choosing to focus on the FOMC operations. Will the same be true today? Only time will tell!
Asian markets closed mixed overnight, recovering early losses after Australia’s jobs data came in better than expected. With Germany announcing plans to ease the countries lock down European markets cautiously rally this morning. US futures recovered overnight loss and now point to a modestly bullish open ahead of earnings and economic reports. Remember to stay focused on price.
Economic Calendar
Earnings Calendar
On this Thursday Earnings Calendar, we have just over 80 companies reporting results. Notable earnings include ABT, BLK, BK, BX, DHR, DOV, HON, KEY, RAD, SKX, & TSM.
Top Stories
The total number of infections worldwide tops 2 million and over 134,000 people have died. Singapore’s health ministry reported a reemergence of the virus with 447 new infections, while Germany plans to cautiously ease the lockdown.
The IMF warned overnight that it expects Asia to have a zero percent growth rate in 2020 and calling it the worst performance in nearly 60 years as a result of the outbreak.
President Trump stated yesterday that the US has passed the peak of the virus growth, and those lock-down efforts have been successful in slowing the spread. That’s great news, but with the death toll still rising and new hot spots emerging around the country when we can begin ending the lockdown is still unclear.
Technically Speaking
After such a steep rally in the market, yesterday’s selloff amid ugly earnings and shockingly bad economic numbers was not a big surprise. The surprise is how well the market handled the bad news with the bulls working very hard to defend price support levels and even finding the energy to rally by the end of the day. Overnight futures traded lower, but after Australia reported better than expected jobs, numbers markets around the world began to improve. Hopeful news that Germany plans to ease lockdown restrictions and the President saying the US has crested provided additional levity allowing the futures to recover and turn positive.
The DIA, SPY, QQQ, and IWM all held above the short-term uptrend and critical price support levels. The QQQ remains the technically strongest index having recovered its 50-day average with the IWM drags along behind as the weakest. Gold and Bonds were strong yesterday as fears rose early in the day after very disappointing retail sales and housing numbers were released. This morning US Futures point to modestly bullish open ahead Housing Starts, Jobless Claims, and the Philly Fed Survey, including several notable earnings reports. To date, the market has been able to shrug off the historic unemployment numbers perhaps today will be the same with expectations of 5 to 6 million new claims. Anything is possible, so stay focused and stick to your rules.
Wednesday saw economic news dampen markets as Retail Sales came in much lower than expected (largest drop since ’92), more big banks all had huge (oddly very close percentage-wise) misses, and the worst reading in NY Empire State Mfg. Index since 1946 led to a 2% gap down at the open. After a volatile rally most of the day, all the major indices sold off the last hour. As a result, the SPY closed down 2.12%, the DIA down 1.92%, and the tech-buoyed QQQ down just 1.15%. All three posted indecisive candles with the QQQ being a Harami Spinning Top and the others Doji. The VXX closed up 8% to 40.41 while the 10-year bond yield fell to 0.633% as investors chased Treasury safety. Oil (WTI) was below $20 much of the day, but closed at $20.23/barrel on rumors the US government would cap US production by buying more oil for the national strategic reserve.
Meanwhile, in Michigan, there were crowds of unmasked, virus control opponents protesting the state’s stay-at-home order on Wednesday. Two conservative groups had called the protest, but it was apparently adopted by others as a good number were also carrying rifles and protesting gun laws possibly among other things. This follows a much smaller group (dozens) who held the same type of protest in Raleigh, North Carolina for an hour on Tuesday. The point is that some groups are pushing (following the President’s lead, or maybe leading the President?) for an end to virus-control measures that they believe are hurting (the economy) worse than the virus is hurting people. So far, this seems to be a politically-centric phenomenon but certainly bears notice as most still predict months or measures of some kind ahead.
After the close, Bloomberg reported that the small business Payroll Protection loan/grant fund ran out of money on Wednesday night. The Treasury Dept. and the SBA have not announced statistics recently. However, based on the applications processed by just 3 large banks (JPM, WFC, and C) and the SBA saying the average approved loan was $240,000, the math seems right. At his daily rally, the President took the opportunity to blame the lack of replenishment funds (among other things) on Democrats. He also reiterated that it was up to states to do the testing (but the Feds will help if needed) and said he expected states and municipalities to control their own borders to prevent cross-jurisdiction spread. If possible, that too would be a sizable economic obstacle.
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In Germany, PM Merkel announced tentative steps to begin reopening its economy. While most restrictions will stay in place until at least May 3rd, some small shops (less than 8,500sq ft in size) will be allowed to open as soon as next week. The timing of this announcement was a bit odd as coincidentally Germany reported a jump in new cases on the day. In the UK, the cabinet is set to extend its nation-wide lockdown for at least 3 more weeks. In Spain the death toll rose slightly again and the WHO noted that Europe has half the world’s infections (1 million+ cases and 84,000+ deaths) and is not out of the woods. In doing so, it recommended that any EU reopening goes slow to hopefully reduce the chance of more major outbreaks.
On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,096,549 confirmed cases and 135,661 deaths. At the same time, in the US we now have 644,348 confirmed cases and 28,554 deaths.
Overnight, Asian markets were mixed, with Japan, Hong Kong, Australia down, while Chinese markets were up slightly. In Europe, markets are slightly in the green across the board at this point in their day. As of 7:30 am, US futures are pointing toward a small gap higher in front of the big economic news coming in an hour.
Thursday’s major economic news includes Mar. Building Permits, Mar. Housing Starts, Mar. Philly Fed Mfg. Index, and Weekly Initial Jobless Claims (all at 8:30 am). A Fed member (Williams) also speaks at 2pm. Major earnings reports include ABT, BLK, BK, KEY, MS, NUE, and TSM all before the open. ISRG reports after the close.
The uptrend remains in place, but volatility continues to be high and gaps have become the norm. The economic reports at 8:30 am are likely to call the tune for markets today, especially the Initial Jobless Claims that estimates are putting at 5 million. However, the unveiling of general reopening guidelines could lift markets, helping traders again look ahead past the short-term economic news.
Regardless of what happens at the open, in this market, 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.
Ed
No Swing Trade Ideas for your consideration and watchlist 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
