The health officials grim death toll predictions and the President’s warning of difficult days ahead brought out the bears in the overnight futures session. As I write this report, mortgage applications reported a decline of 24% once again, suggesting the FOMC and the Federal government can not buy our way out of a pandemic. The economic data dump over the next several days is likely to create highly volatile price action and produce historically shocking results. Protect your capital!
Asian markets closed mostly lower overnight, but Australia bucked the trend closing in the green. European markets are decidedly bearish this morning with the CAC down more than 4% and the other indexes not far behind. US Futures after a volatile overnight session point to an ugly gap down ahead of the big day of economic data, including the ADP Jobs report. Hold on to your seat; the day ahead is shaping up as wild one.
Economic Calendar
Earnings Calendar
On the Hump Day earings calendar, we have a rather light day of earnings with just 19 companies reporting. Notable earnings include LW & PVH.
Top Stories
The President yesterday said that American needs to get ready for a very painful 2 to 3 weeks. Officials now predict 100,000 to 240,000 US deaths. Currently, we have more than 188,000 infections with the death toll now over the 9/11 attacks crossing over 4000.
With an outbreak happening in prisons, inmates are now confined to their cells for a minimum of 2-weeks in an attempt to stop the spread. One US Naval ship has moved more than 4000 sailors into quartene after several tested positive for the virus.
As the demand for food and supplies comes under pressure, Walmart has implemented daily health screenings of employees and created one-way isles in the store to aid in social distancing.
Technically Speaking
If the pending employment numbers were not enough to spook the market, the President’s grim projections for the next few weeks brought out the bears overnight. Historically low-interest rates seems no match for the virus as applications to buy new homes fell 24% last month. I suspect the economic data dump we will get over the rest of this week will not be favorable to those hoping for a V-bottom recovery. Although we are all hoping for the best, the next couple of weeks will weigh heavily on the minds of traders and investors as the infection expands, and the death toll rises. Directly after, we will begin 2nd quarter earings that could easily add insult to injury.
Protect yourself and your capital as we can expect highly volatile price action. There are no medals for bravery for running into dangerous markets.
In a very up-down day on Tuesday, markets closed on a down, ending the day near the lows. The quarter-end buying (fund rebalancing) that some had predicted never seemed to materialize during the day. As a result, the indices failed recent high resistance to end the worst quarter in market history. For the day the SPY closed down 1.49%, the DIA down 1.73%, and QQQ down 0.85%. Technically speaking, all three major indices printed Bearish Harami signals, but not inside days. As for Oil (WTI) after a large gap higher (on Chinese economic data), traders sold the rip all day with it closing down at $20.16/barrel. The 10-year bond yield was down as well, closing at 0.668%.
After the close, the President told the daily presser ”we’re going to have a hell of a bad two weeks…maybe three weeks” Then Dr. Fauci (NIH) said they still project between 100,000 and 200,000 American deaths (but a slide presented showed the upper number as 240,000). Still, it could be much worse as even simple modeling shows that 330 million people times just a 10% infection rate times a 1% death rate (of infected) would be 330,000 deaths. And, unfortunately, the US doesn’t have the massive per-capita testing, strict quarantines, or strong social compliance of other nations (at least yet) to rely on to keep infection rates below 10%. So, as the President is now acknowledging, the news for at least the next several weeks is going to be very bad. What he can’t tell us is how much of that is already baked-into markets.
In related news, during the day the President tried to get in front of the next bailout bill as he called for $2 Trillion in infrastructure spending. In addition, Democratic Senators began pressuring Treasury Sec. Mnuchin to ensure the proper oversight of the $500 billion bailout fund approved last week. (When he signed the bill, the President wrote a note saying he won’t allow the fund Inspector General to report to Congress on fund decisions without his express permission. Nobody can read minds, but his adding such a note certainly implies there needs to be concern about fund administration.)
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The global headline virus numbers continue to grow exponentially, now at 875,445 confirmed cases and 43,459 deaths. Meanwhile, the US now has 189,633 confirmed infections and 4,081 deaths. One indication of the situation is that the state of CA says it will release 3,500 prisoners early due to the virus.
Overnight, Asian markets were deep in the red, despite private date on China PMI showing a modest expansion (above estimates) in growth, which more or less confirmed yesterday’s official data. In Europe, markets are also strongly on the red side at this point in their day. As of 7:45 am, after another choppy overnight session, the US futures are pointing to a large gap down at the open.
Wednesday’s major economic news includes ADP Nonfarm Employment (8:15 am), Mar. Mfg. PMI (9:45 am), Mar. ISM Mfg. PMI (10 am), and Crude Oil Inventories (10:30 am). The only major earnings on the day will be PVH after the close.
We should expect news cycles about the US and most of the world to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets.
So, while it MIGHT be time to slowly start looking for setups to enter again, it is not time to get aggressive. Expect erratic trading to continue and size any positions you take correctly for the risk being taken. As always, don’t try to predict reversals, don’t chase runners, and wait for the trades to come to you. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Sorry, but no Swing Trade Ideas due to extreme market volatility. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
News of 5-minute test kits, hopeful vaccine possibilities,
and new clinical trials helped to lift the spirits of the market, keeping the
bullish rally alive another day. However,
traders should guard against getting caught up in Fear of Missing Out, chasing
a rally already up nearly 20%. With
infections, numbers continuing to rise rapidly, and more states going into
lockdown, we still have a long road to recovery. Consider your risk very carefully as we head
in a big week of data that includes jobs’ data.
Asian markets were mixed but mostly modestly higher as China
reported better than expected manufacturing data. European markets are following suit with mixed
but mostly modest increases this morning.
US Futures after a volatile evening currently point to flat open ahead
of earnings and economic reports.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have just 33 companies reporting. Notable releases include MKC, BB, CAG, & FLR.
Top Stories
The US Navy ship Comfort arrived in New York Harbor to help their
overwhelmed hospitals. Yesterday the
Major said they would need triple the hospital capacity by May as the outbreak continues
to ravage the city. As the infection
numbers continue to rise, more and more states are ordering lockdowns, and the CDC
is considering a rule that everyone wears a mask when out in public.
There were some bright spots on the virus front yesterday with
testing kits that can provide results in just 5 minutes and news of vaccine tests
and clinical trials beginning for hopeful treatments lifting the spirits of
investors yesterday.
China says manufacturing activity expanded in March. That seems very hard to believe, but the
Asian markets were able to make modest gains on the back of the data.
While the market rallies, investors are bracing for
employment numbers later this week that could reach historic levels as some of
the nation’s cities continue to shutdown.
Some estimates indicate an unemployment rate as high as 32%, with more
than 45% of companies considering layoffs.
Technically Speaking
Investors found hope in the news vaccine tests, clinical trials,
and test kits that can deliver results in just 5-minutes! While encouraging the US infections, top
160,000 with more than 3,100 deaths as the Mayor of New York calls for a tripling
of hospital capacity by May to deal with the sick. The DIA recovered the 2018 lows, the QQQ held
onto its 500-day average as support the SPY recovered and held critical support
at 255. With DIA, SPY, and QQQ nearly 20%
off recent lows and facing a huge week of economic data, one has to wonder if
the rally is getting a bit ahead of itself.
With the likelihood of shocking and historic unemployment numbers just
around the corner, another round of selling is not out of the question. As infection numbers continue to rise, more
and more state is shutting down effecting some of our nations largest cities.
Guard yourself against the Fear of Missing Out and
disregarding the risk, the massive price volatility and fast we are far from
curbing the first wave of the outbreak.
With the 2nd quarter earings beginning in a couple of weeks
and the high probability of recession, a V-bottom recovery seems very unlikely. Stay focused on price action and plan your risk
carefully because the path forward remains very uncertain.
The bulls put in a very nice day’s work Monday, resuming the rebound as they closed markets near the highs after following through on the gap up open. As a result, the SPY closed up 3.21%, the DIA up 3.06%, and the QQQ up 3.64%. JNJ, MSFT, FB, AMZN, and GOOG led the way while BA acted like an anchor. However, Oil (WTI) took another 6% beating as it traded below $20 and closed at $20.20/barrel. The 10-year bond yield also closed down to 0.72%.
During the day, Moody’s cut their outlook on $6.6 Trillion of US Corporate debt from “stable” to “negative” as it predicts the US has entered a recession. Goldman Sachs also gave markets some bad news as it announced a survey that finds that over 25% of planned 2020 stock buybacks have now been scrapped by companies. In addition, V (Visa) lowered its outlook a second time this month, saying consumer spending has declined sharply.
In employment news, St. Louis Fed President James Bullard told CNBC that his economists are now estimating that unemployment could reach 32% as a result of the virus. However, he also said he expects the massive loss of jobs to be short-term (months). An online survey of 250 companies also found that 49% were considering layoffs as March 26. However, NY Governor Cuomo made a nationwide appeal for medical personnel to come to his state as existing personnel are already overworked and the peak in cases is still to come the next couple weeks. CA Governor Newsom made a similar plea, announcing they are trying to hire thousands of new health care workers. Both of the Governors said they would temporarily waive licensing requirements and even offer free malpractice Insurance.
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In virus treatment news, F and GE announced that they plan to produce 50,000 ventilators per month. However, this will not be until after early July. Richard Branson’s rocket company also joined this effort but did not offer details on its own ramp-up plans. In terms of lock-downs, more states issued “stay at home” orders including both Virginia (through June 10) and Maryland. The San Francisco Bay Area also extended its “shelter in place” order through May 1st.
The global headline virus numbers continue to grow exponentially, now at 799,723 confirmed cases and 38,720 deaths. Meanwhile, the US remains the epicenter and now has 164,359 confirmed infections and 3,173 deaths. Still, not all the virus news is bad, as the growth rate of cases in NY has slightly slowed for the first time. China also announced its PMI reading was 52.0 for March, indicating they are starting to see some economic expansion again. For reference, the Feb. PMI was a record low 35.7, so this indicates a V-shape.
Overnight, Asian markets were mixed but mostly green on the China data. In Europe, markets are following Asia, hoping for their own V-shaped recovery. The major European bourses are all green, with the exception of France at least at this point in their day. As of 7:30 am, after another choppy overnight session, the US futures are pointing to a mixed, mostly flat, but slightly red open. However, Oil (WTI) prices did make a major rebound overnight on the China data.
Tuesday’s major economic news includes Mar. Chicago PMI (9:45 am) and Mar. Conf. Bd. Consumer Confidence (10 am). Major earnings are limited to CAG and MKC before the open.
While it looks like the bulls are back in “only see the positive” mode the last week, it is still a very volatile and uneven market. We should expect news cycles about the US (and most of the world) are going to continue to be terrible for at least another 30 days. The impact on quarterly numbers is also likely to drag on for two more reporting cycles. However, as we’ve said, a lot of bad news is already “baked in” to markets.
So, it might be time to slowly start looking for setups to enter again. However, expect erratic trading to continue and size any positions you take correctly for the risk being taken. As always, don’t try to predict reversals, don’t chase runners, and wait for the trades to come to you. We need to continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Swing Trade Ideas for your watchlist and consideration: VIAC, FMC, NXPI, AVGO, NLFX, QCOM, V, ALGN, DHR, WDAY, C, HON. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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 we wind down the worst March in stock market history, tough decisions lie ahead ahead for investors with the national lock-down extended to April 30th with rapidly increasing infection counts. Although April has proven to be a bullish month for the market since 2005, this year, we face a very volatile and uncertain path forward. With the VIX holding above a 65 handle even as the market found the willingness to rally, traders should prepare for very challenging price action to continue.
Asian markets closed modestly lower on Monday while Australia broke ranks to surge 7% higher. European markets are trading cautiously around the flat-line in a choppy session. US Futures having recovered from sharp declines overnight currently point to flat to ever so slightly bullish open ahead of a big week of uncertain economic data.
Economic Calendar
Earnings Calendar
Although we have a big day a earnings reports, I can only
find RH and CALM as notable because most are tiny companies.
Top Stories
This weekend the President extended the country lockdown
until April 30th as the spread of the virus continues to spread
rapidly. As of this morning, infections
top 142,000, with 2,489 deaths.
According to Traders Alminic, the market has not experienced
a bearish April since 2005, but Goldman is predicting that the market will turn
lower as oil continues to fall due to lack of demand with the growing expectation
of a worldwide recession.
The FOMC has said that nothing is out of the question as far
as their possible operation. Some are now
beginning to speculate that the Fed might consider direct stock purchases to stabilize
the market. Such an extreme course of
action would require Congressional approval adding to the already historically aggressive
use of its fiscal powers.
Technically Speaking
Although the Dow closed Friday down more than 900 points, I have
to admit it was much better than I would have expected heading into a weekend
of sharply rising infections. Though leaving
behind a rather bearish candle pattern, there was a small silver-lining as QQQ
managed to hold onto its 500-day moving average by the close. Unforutunitally, that’s about all the technical
positives in the daily index charts as we come to the end of the worst March in
market history. Historically April has
proved to be a bullish month since 2005. Still, with an extended lockdown and
health officials talking about more than 100,000 possible deaths, April 2020 is
likely going to be very challenging.
As oil demand continues to decline, with OPEC and Russia
continuing to lock horns, many are now suggesting that prices could fall below
$20 per barrel. Even as the market
rallied last week, the VIX defiantly held up closing the week at a 65 handle,
indicating the extreme fear still felt by investors trying to sort out what
comes next. While many say its time to
begin buying up value stocks, Goldman is now suggesting they expect prices to turn
lower. One thing for sure is that traders
and investors have tough decisions ahead amidst such volatility and
uncertainty.
With hopes of the stimulus bill in place, markets still gapped down Friday. However, bulls stepped in and rallied back up near the previous close. After the bill was passed, things went fine until 3:30 pm when markets sold off hard across the board as traders seemed to want to get flat for the weekend. As a result, the SPY closed down 3.02%, the DIA down 3.87%, and the QQQ down 3.44%. The VXX was back up to 50.60, while the 10-year bond yield fell again to 0.69% and Oil (WTI) fell to $21.57/barrel). For the week, SPY was up 10.71%, DIA up 12.74%, and QQQ up 8.55%.
Friday evening, the President signed the stimulus bill. At first, he called it a $2.2 Trillion bill as widely publicized. However, he then clarified it was really a $6.2 Trillion plan (expandable based on need apparently). This is in addition to the $4 Trillion the Fed has (so far) pumped into asset purchases. On Saturday, Treasury Sec. Mnuchin said the small-business loans part of the bill will be “up” this week and that stimulus checks will start being direct-deposited within 3 weeks. If these times hold true, both would be unprecedented timetables for government programs. Sec. Mnuchin also told CBS news that the Treasury Dept. was ready to buy warrants and equity stakes in US companies if needed. Others speculated the Fed may also do this, but that would require the approval of Congress to widen the Fed mandate.
On Sunday evening, the President extended the US Social Distancing guidelines through at least April 30. So, the “American ReOpening” will be pushed out at least 3 more weeks beyond his original Easter date. Credit where it’s due, if he sticks to this latest stance, that will be more in-line with the recommendations of contagion-spread experts and what we have seen in other countries so far. Earlier Sunday, the President had also decided not to quarantine virus hot spots. Instead “travel advisories” have been put in place with the hope the public will follow them. This may be problematic as Americans continue to meet in large groups such as the mega-churches where hundreds gathered Sunday.
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More ominously, on Sunday Dr. Fauci (NIH) said that “looking at what we’re seeing now, we’re looking at 100,000 to 200,000 deaths in the US.” However, he was also quick to say that number is a moving target that could easily be wrong either way and he did not want to be held to any estimate. This number of deaths would be 50 times the number of deaths we had at the time of the comment. If correct (and he is the top infectious disease expert), we probably should expect a much slower economic recovery than some had forecast.
The global headline virus numbers continue to grow exponentially, now at 735,200 confirmed cases and 34,808 deaths. On Sunday, the UK told its public to expect their lock-down to last months, not weeks. Meanwhile, the number of US cases has risen 67% since Friday morning. The US now has 142,793 confirmed infections and 2,490 deaths.
Overnight, Asian markets were mixed, but mostly well into the red. In Europe, markets are red across the board, but not down as heavily as they were Friday at least at this point in their day. As of 7:30 am, after another wild overnight session, the futures are pointing to mixed to slightly green open. It’s worth noting that Oil (WTI) dipped below $20/barrel overnight on very weak demand.
The only major economic news on Monday is Feb. Pending Home Sales (10 am). There are no major earnings on the day.
Again, markets remain very volatile and news cycles are going to be generally terrible, punctuated with occasional (probably false) hope. However, bulls may well latch onto even thin hope. So, expect erratic trading to continue. In short, as I’ve said many times, this is not a casual trader’s market. The goal now should be account preservation and preparation for when things have settled down. Don’t try to predict price action. Just wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait. Holding any trades overnight is a risky business in this market.
Ed
Sorry, but due to extreme volatility there are no Trade Ideas for today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
After receiving the worst unemployment number in history, the
market chose to focus on the coming 2-trillion stimulus bill extending the bullishness
for a 3rd day. The rally
recovered some important price levels of support, but not the question is, will
they hold heading into an uncertain weekend.
With the US now with the highest number of confirmed infections and the
2nd quarter earnings season just around the corner, there is still a
lot of fear in the market.
Asian markets follow the lead of the US rallying to close out
the week in the green. European indexes,
however, are red across the board this morning but only down about 2% at the time
of this report. US Futures point to an
overnight gap down at the open ahead of personal income and consumer sentiment
reports. Consider your risk carefully as
we head into the weekend because anything is possible by Monday morning.
Economic Calendar
Earnings Calendar
We have a light day on the economic calendar with just over
40 companies reporting. However, the
majority are small-cap companies, and I can find no particularly notable reports
today.
Top Stories
Hopes are high that the House will move forward with a vote
today on the 2-trillion stimulus bill.
There is, however, still a chance that one or more representatives reaching
for the spotlight could delay the vote into the weekend.
The US now has the grim title as the highest number of
infections that will, too, continue to rise exponentially through the
weekend. As of this morning, 85,625 American
infections and more than 1300 have died.
The market shrugged off the record-breaking 3.2 million
unemployment number to record the biggest bounce 3-day bounce off in
history. To put this into perspective, unemployment
topped out around 780,000 during the 2008 banking crisis.
Technically Speaking
Although the third day of the rally was fantastic, it did
little to improve the technicals of the index charts. The QQQ had the best response once again,
recovering its 500-day average. The SPY
broke through resistance at 255, and the Dow recovered it 2018 low. The question now is, can they hold these
important price supports heading into the uncertainty of the weekend. Hope that passage of the stimulus bill will undoubtedly
provide a little help, but the unrelenting bad news of the virus spread will
continue to weigh heavily on the minds of investors. Keep in mind it will be at least another
3-weeks before the relief checks start to reach American bank accounts. In this market, a lot can happen over the
course of just one hour; 3-weeks will feel like a lifetime!
Those that rushed to by at the end of the day yesterday will
be punished this morning with a nasty overnight gap down. As for me, I plan to go into the weekend, essentially
flat. I won’t rule out the possibility
of some quick intra-day trades, but for me holding into the weekend is a
straight-up gamble that I will avoid. Be
safe, my friends and have a wonderful weekend.
Armageddon seemed to be already priced into the market as the bulls absorbed a New Jobless Claims number 5-times the all-time record and still gapped higher with follow through the rest of the day. This included a massive rally for the last 10 minutes. As a result, the SPY closed up 5.84%, the DIA up 6.14%, and the QQQ up 5.27%. This was the third consecutive up day for a total gain of 17% in the SPY, almost 21% in the DIA, and 12.5% in the QQQ. Technically, this takes us out of a Bear Market.
Speaker Pelosi said she expects the stimulus bill to pass the House by around noon Friday. Minority Leader McCarthy echoed the same expectation. In the daily briefing, President Trump explained he hadn’t needed to invoke the Defense Production Act due to companies switching production on their own, although some states and cities will disagree that has been enough. He also said that the US has done more testing than any other country. Without knowing the true numbers out of China, this is likely true. However, we did get a very late start and it is also true that as of Thursday, the US had tested 1 of every 780 people, while South Korea has tested 1 of every 150 of their people. So, we still have a way to go to get near where we need to be, but the trend is encouraging.
In business news, after the close GM announced it would be extending North American plant shutdowns, without defining a specific restart date (the previous date was April 1). This fell in line with what Ford had done a few hours earlier. GM also temporarily cut the pay of 69,000 salaried workers by 20%. Toyota also announced it will keep its North American plants close, but issued a tentative restart date of April 20.
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The President announced that his folks are working on guidelines and methods for the next phase of the fight (after the re-Opening of America). This system will categorize every county in the US according to their perceived risk. Social Distancing and quarantine guidelines will be different for each category of county. The massive nationwide testing regime was not mentioned, but would almost certainly be needed for such a plan. He did mention that easing and the new guidelines will be accompanied by mass surveillance, but any such system would likely not be wide-spread enough for the entire country. So, this system would depend heavily on public compliance, self-discipline, and self-limiting of domestic (intra-county) travel. No mention was made, but presumably like the rest of the world, some type of enforcement will be required to isolate people in risky counties from the less-risky counties.
The global headline virus numbers continue to grow exponentially, now at 549,300 confirmed cases and 24,871 deaths. China is closing its borders again, as some experts are saying they may be seeing a second wave starting. The UK, PM tests positive and is experiencing mild symptoms. Meanwhile, the US has now become the epicenter of the virus (the most cases), with 85,749 confirmed infections and 1,304 deaths.
Overnight, Asian markets were mixed, but mostly green. In Europe, markets are red across the board, down heavily in the major bourses. As of 7:45 am, the futures are pointing to a 3% gap down.
Major economic news on Friday is limited Feb. Core PCE and Feb. Personal Spending (both at 8:30 am) and Mar. Michigan Consumer Sentiment (10 am). There are no major earnings on the day.
Again, markets remain very volatile. Remember that even three days of massive rally do not make a recovery yet. Don’t try to predict price action here. Wait for trades to come to you. We still have no uptrend on the daily level. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Sorry, but due to extreme volatility there are no Trade Ideas for today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Our first 2-day rally in weeks was a sweet relief, but today
we face a possible history-making increase in joblessness. Can the hope of the 2 Trillion dollar stimulus
bill keep the bulls engaged in the wake of high virus-related
unemployment? We will soon find out at
8:30 AM Eastern this morning. With the death
toll and infections, rising holding positions into the uncertainty weekend will
likely be difficult.
Asian markets closed lower across the board, with the NIKKEI
falling 4.50%. European indexes are
seeing modest losses this morning, and the US Futures point to a Dow gap down
of more than 150 points ahead of readings on GDP and Jobless Claims. Expect considerable volatility as the market
reacts to the first economic data to include the outbreak impacts on business. It could be a wild day, so buckle up.
Economic Calendar
Earnings Calendar
We have nearly 110 companies fessing up to quarterly results
on Thursday. Notable reports include
CSIQ, FDS, GME, JEF, KBH, LULU, MOV, SIG & RH.
Top Stories
Now the Senate has passed the stimulus bill it’s now time
for the House to get the political spotlight.
According to reports, they plan to begin their work on Friday, and the
political rhetoric is already raising concerns about how long they might delay
getting the bill to the President.
The coronavirus death toll jumped over 1000 during the night
with confirmed cases quickly approaching 70,000. The New York health care system is already in
a crisis and seems to be on the same escalation curve as Italy.
The entire market is sitting on the edge of its seat this
morning, waiting for a reading on the jobless numbers at 8:30 AM eastern. Consensus Estimates expects more than 700,000,
but some are suggesting the number could be as high as 3.5 million. Needless to say, the outbreak impacts on
employment are significant, and it will be interesting to see if the warm and
fuzzy glow of the stimulus bill will keep the bulls engaged.
Technically Speaking
Yesterday we witnessed the first day of bullish
follow-through in several weeks. At the
close of trading, the DIW, SPT, and IWM managed to hold on to some gains as traders
took profits ahead of the Jobless numbers.
Sadly the QQQ closed lower on the day and failed to hold it’s 500-day
average. The DIA managed to test the
2018 lows, but the resistance proved too strong backing way sharply after the test.
Having taken some very nice gains yesterday, I now think the
risks are just way too high ahead of the jobless numbers and heading into the
week. The outbreak numbers have begun to
rise exponentially, and I suspect it will weigh heavily on the minds of
investors. If anything, the path forward
appears even more uncertain with such a long road ahead in a battle with an
enemy we can’t see.
Wednesday was another roller-coaster for markets. We got a gap higher on the follow-through on Tuesday’s huge rally. However, that was me with a severe selloff and then a big intraday rally on hope of a Senate deal. After some grind sideways, the bottom fell out the last 15 minutes of the day as 4 Republican Senators (Lynsey Graham, Tim Scott, Ben Sasse, and Rick Scott) pushed to cut unemployment funding in the bill and Bernie Sanders threatened to hold it up if they did not drop their demands. On the day, the SPY gained 1.50%, the DIA 2.62%, and the QQQ lost 0.74%. Meanwhile, the VXX rose to 50.90 as 10-year bond yields fell to 0.837% and Oil (WTI) fell to $24.10/barrel.
The Senate passed the stimulus deal late last night after getting all the Senators in line. Beyond that hassle, the House may be an even bigger hurdle. If a single congressman of either party objects, the bill will have to go to debate, potential amendment and a roll-call vote in the House. Unfortunately, some congressmen are threatening just that as this situation gives them a lot of leverage. And even before the bill passes or is signed, many Governors (both parties) are already saying they will need more than this bill will deliver. Gov. Hogan (MD – Rep.) who heads the National Governors Association said: “states and local governments will need to come back for more than this bill provides in the next round of stimulus.” So, once this passes, don’t expect it to be the last dollars out of Washington on this crisis.
In the daily briefing, Sec. Mnuchin said the $2.2 Trillion stimulus package would keep the economy afloat for 3 months. He also said some people could start to see the $1,200/ adult and $500/child payments in as little as 3 weeks (if they have direct deposit info on file with the IRS). However, for others, it could take as long as 3 months if checks need to be cut and mailed. Both those time periods fall in-line with what happened in 2001 and 2008. So, they sound believable.
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The global headline virus numbers continue to grow exponentially, now at 487,050 confirmed cases and 22,025 deaths. Meanwhile, in the US, totals are up to 68,581 cases and 1,036 deaths. Hospitals in New York are already beginning to be overwhelmed by patients and supplies of PPE (masks, gloves, and gowns) have been exhausted despite federal help, donations, and large increases in production. In addition, Dr. Fauci (NIH) told Americans to prepare for a second wave after this one is weathered.
Overnight, Asian markets in the red again. Japan gave up 4.5% of its big gains from the prior 2 days. In Europe, markets are also in the red, down about 2% across the board so far today. As of 7:30 am, the futures are down as well, but range between down 1% (DOD and S&P) and half a percent (NASDAQ).
Major economic news on Thursday is headlined by the Initial Jobless Claims (8:30 am), which is expected to be the largest in history by a long shot. Estimates range from 1 million to 4 million new claims, but the consensus is 1.5 million. We also get Q4 GDP and Feb Trade Balance (both at 8:30 am), but these will be after-thoughts to the Jobless Claims. The only major earnings of note is LULU after the close.
Even with over $6 Trillion in stimulus coming from the Fed and now Congress, don’t think we are out of the woods yet. A ton of bad headlines still lie ahead. (For example, don’t think the Jobless Number this week will end up being the worst.) However, it is also likely that when the latest relief bill is, the bulls may latch onto this news and run.
Again, markets remain very volatile. This is not a casual trader’s market. Don’t try to predict price action here. Sit on your hands if you have to in order to keep from trading. Use this downtime to get your list of tickers ready. Get some education, refine your trading plans, and improve your trading process. Then wait for trades to come to you. We still have no uptrend on the daily level. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.
Ed
Sorry, but due to extreme volatility there are no Trade Ideas for today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
