Hopeful Medical Advances

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Hopeful

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.

Trade Wisely,

Doug

China Recovery Looking V-Shaped

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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.

🎯 Dick Carp: 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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Tough Decisions Lie Ahead

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Tough Decisions

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.

Trade Wisely,

Doug

Shutdown Extended But Stimulus On Way

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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.

🎯 Dick Carp: 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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Unemployment Soars

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Unemployment

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.

Trade Wisley,

Doug

Stimulus Expected as US is Now Epicenter

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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.

🎯 Dick Carp: 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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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

Joblessness

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Joblessness

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. 

Trade Wisely,

Doug

Record Jobless Numbers Today

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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.

🎯 Dick Carp: 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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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 stimulus is on the way.

by
The stimulus is on the way.

Congress finally came to an agreement, and the stimulus is on the way!  The question is, will it bring stability to the market?  In a very wild overnight session, the Dow futures rallied 500 points after the news of the agreement.  Unfortunately, as I write this report, the futures have been unable to hold the news-driven gains.  With unemployment numbers due out tomorrow and New York seeing a doubling of confirmed cases every 3-days one has to wonder if there is any amount of money that can buy our way out of this terrible situation.

Asian markets closed positive across the board last night, with the Nikkei lifting over 8%.  Sadly, European markets are not feeling the love form all the stimulus spending with mixed results and the DAX down 2.25%.  Here in the US, the futures markets have seen a very turbulent evening.  They have been bullish and then swung quickly bearish, where it might be by the open is anyone’s guess!  About the only thing, I think we can count if very volatile price action in the day ahead.

Economic Calendar

Earnings Calendar

On the Wednesday earnings calendar, we have over 50 companies reporting results.  Looking through the list PAYX is only notable I can come with this morning. 

Top Stories

At about 1:30 AM the Congress cane to an agreement on the stimulus plan.  The question now, will the market be able to rally a second day on the news?  Only time will tell.

They are reaching a critical situation in New York City now with more than 25,000 cases, as the cases double every three days overwhelming the healthcare system.  The President said yesterday that he would like the country to get back to work by Easter, which is just three weeks away.  However, health officials and many of the state Governors disagree, saying the risk of spread is too high. 

As business around the country continues to shut down, the next focus may be the unemployment numbers that are due out on Thursday morning.  Consensus estimates suggest more than 700,000 will be out of work, and the numbers are likely to rise in the coming weeks.

Technically Speaking

I was so nice to see a little relief from the selling yesterday, but now the question is, can it follow-though?  In the middle of the night, Congress finally came to an agreement, and the President said he would sign the stimulus bill immediately after its passage.  Futures rally nearly 500 points on the news but have already faded into the red in a very volatile overnight session.  With 2.5 trillion buy us some stability?  One would hope so because the Trillions that FOMC has spent has done nothing to curb the historic market collapse. 

Tomorrow we will get a reading on unemployment, and according to estimates, it will be shocking.  Of course, direct payments will be helpful to those out of work, and the company bailouts with the support of the medical system is much needed.  However, with all this spending translate into stock buying as the virus spreads and the path forward remains uncertain? I’ve said it before, and I will repeat once more that it seems unlikely we can buy our way out of a pandemic that continues to spread across our country.

Trade Wisely,

Doug

$2 Trillion Deal Struck Expect More Later

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Turn-around Tuesday was an amazing job done by bulls, as the rest of the world led the US to a huge gap up on hopes of a massive Federal rescue bill.  Markets followed-through even when news came that there was no agreement and the Senate had adjourned for the day.  On the day the SPY was up 9.26%, the DIA up 11.19% and the QQQ up 7.82%.  This was the best day for bulls since 1933.  As you’d expect, the VXX was down to 46.77.  Oil (WTI) closed up $23.88 and the 10yr bond yield closed up to 0.834%.

Regardless of Tuesday’s optimism, the Senate adjourned in the early afternoon without a deal.  However, overnight the sides agreed on a deal on a $2 Trillion stimulus package. Speaker Pelosi and Minority Leader McCarthy are now trying to get their caucuses to support any Senate deal, as-is.  This would be critical to speed because it must pass by unanimous voice consent.  A single objection from any Congressman will require delay while the House returns to Washington for a roll-call vote.  Futures fell on word of the deal.  Regardless of what happens this time, sources told Bloomberg last night that Congress is expecting two more stimulus bills before this is over.  

In the meantime, following a call with major Investors and Hedge Fund managers, the President told Fox News he wants the US to be “open and just raring to go by Easter.”  Reportedly, he has soured on the ideas of quarantining and social distancing because “many Americans are ignoring the suggestions” (per unnamed aides).  On the other side, doctors, infectious disease experts, and even President Trump’s former head of the FDA are saying that we need at least several weeks of lock-down to stem the virus.  Dr. Fauci (NIH) told the daily presser we would need to be flexible and data-driven and after that, the President agreed, seeming to step back from a firm Easter date.

$50.00 discount with code: Privilege

The global headline virus numbers continue to grow exponentially, now at 434,866 confirmed cases and 19,607 deaths.  In Asia, India locked-down its 1.3 billion people for the next 21 days.  Several South American countries have also begun lockdowns.  In Europe, death tolls are up again in Italy and Spain has had to turn ice rinks into temporary morgue storage. However, in positive news out of China, both Wuhan City and Hubei Province had their quarantine lifted after two months on lock-down. 

In the US, totals are up to 54,963 cases and 784 deaths.  New Orleans is the latest major city to order a lock-down as their number of cases exploded and Governor Edwards declared a state of emergency for Louisiana.  The White House also announced that anyone who has traveled from New York should self-quarantine.  In addition, New York Governor Cuomo and NYC Mayor de Blasio both decried a massive shortfall in ventilators as they expect to need 30,000 more of them in the next one to two weeks. 

Overnight, Asian markets are strongly green again on the second day of expectation a US bailout plan passes and pumps up global economies.  Japan was up 8% to make two straight days of massive NIKKEI gains. In Europe, markets are mixed and more muted, though mostly green so far today.  In the US, futures fell on word the stimulus deal was agreed. As of 7:30 am, the futures are mixed, but mostly red with the S&P and NASDAQ pointing to lower opens and the Dow slightly on the green side. 

Major economic news on Wednesday is limited to Feb Core Durable Goods (8:30 am) and Crude Oil Inventories (10:30 am).  However, an agreement on a virus rescue plan will definitely be announced, if not signed during the day.  Major earnings are limited to PAYX before the open and MU after the close.

Don’t think we are out of the woods and it’s all blue skies ahead. With more “stay a home” orders, company closures, and bad economic data coming, there are a ton of bad headlines we will need to ride out.  In particular, we should be wary of Thursday’s Initial Jobless Claims that are expected to be the largest in history by a wide margin.  However, it is also extremely likely the latest relief bill will be signed, more Fed steps will come and more stimulus bills will too. 

So, markets remain very erratic and there is no reason to think that will stop.  Remember, you don’t have to pick the absolute bottom to make a bundle on the rebound.  So, 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.

🎯 Dick Carp: 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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

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