Coronavirus Is Still The Lead Story

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Coronavirus really put it on the markets Friday.  A brutal all-day selloff was only slowed by bulls rallying the last 15min of the day in a futile effort to make January end as a net gain.  Unfortunately, markets still closed lower for the month.  On the day the SPY lost 1.81%, the DIA lost 2.12%, and even the QQQ (buoyed by a massive AMZN earnings beat) lost 1.59%.  In the process, the SPY held support, but the DIA gave up the 50sma and a potential support level.  Obviously, the VXX spiked to a still-low 16.27

Over the weekend, the death toll from the virus topped 360, with well over 17,000 confirmed cases in China alone.  In response, China has extended the Lunar New Year shutdown (holiday) across at least 24 provinces (which account for 80% of the Chinese GDP) until at least Feb. 10 (some until Feb. 14).  They also said the holiday may be extended again if deemed appropriate. 

In potentially good news, Thailand reported good results using a mixture of two antiviral drugs.  The success saw a significant improvement in the condition within 48hr after treatment.  However, this success was on a single patient.  So, it is way too early to claim a solid treatment has been found.  Still, this is promising news.

For now, China has announced a range of measures to help businesses hit hard by the virus.  In addition, the People’s Bank of China said the equivalent of a $173 billion (including $21 billion today alone) extra liquidity will be injected into their markets using the same repo mechanism the Fed uses to pump money into US Markets.  This was intended as an emergency backstop as the Chinese stock market reopened for the first time since January 23.  Nonetheless, Chinese markets still gapped down almost 9% at its open.  (Bear in mind that in addition to virus fears, Chinese markets have been closed for 10 days and have not had a chance to adjust.  So, gap moves on the first day back from the Lunar New Year holiday are typical…just not this severe.)

Overnight, Asian markets took the weekend virus news hard with red across the board.  The only possible bright spot is that Hong Kong got back to the green side of flat.  However, China’s first day back to trading ended down 8%.  In Europe, markets are mixed, but mostly green at this point.  As of 7:45 am, U.S. futures are pointing to a half percent gap higher after Friday’s beating. 

Monday’s major economic news is limited to Jan. Mfg. PMI (9:45 am) and ISM Mfg. PMI (10 am).  And while earnings do resume this week, today is a light day.  Among the major names reporting before the bell are AMG, CHKP, and SYY.  After the close ARE, GOOG, GOOGL, HIG, LEG, and NXPI all report.

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The bulls seem to be trying to find support this morning.  However, the bears have the momentum and nothing has changed for the better on the coronavirus story.  Be careful trading either direction as it’s likely to be a volatile day.

Keep in mind that nobody ever went broke taking profits (small or not) and reducing risk. Above all, wait for the trade to come to you…plan your trade and trade your plan.

Ed

Swing Trade Ideas for your consideration and watchlist: VXX, SDOW, TZA, KKR, LABD, GDOT, SHAK, GWRE, CTXS, PRGO. 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

Emotional Price Fluctuations

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Emotional Price Fluctuations

The coronavirus is a flu virus, but the market’s emotional price fluctuations due to the uncertainty is instead making feel seasick.  Rallying strongly after the WHO declared a global health emergency, the US Futures appears ready to strip all back as the confirmed cases near 10K.  With the Shanghai market scheduled to reopen Sunday night, traders must carefully consider the risk they carry into the weekend.  Later tonight, the UK will leave the EU and begin a year-long trade negotiation.  Just another thing to weigh as the weekend approaches.

Asian markets closed mixed overnight as manufacturing numbers met expectations, but virus impacts continue to grow.  European markets are modestly red across the board ahead of the UK exit and the virus uncertainty continues to weigh on investor’s minds.  Here in the US, futures point to a gap down reversing yesterday’s end of day rally, ahead of earnings & economic reports. 

On the Calendar

On the Friday earnings calendar, we have just 60 companies reporting but there is no time to relax as we will hear from several potential market-moving companies.  Notable reports include BAH, CAT, CVX, CHD, CL, XOM, HON, ITW, KKR, LYB, PSX & WY.

Action Plan

If your beginning to get a little seasick with the wild price action of the index as the uncertainty of the virus outbreak continues to effect the emotions of the market.  At the end of the day, we had an incredibly bullish rally after the WHO declared a world health emergency.  However, the news of the death toll rising to 213 and the confirmed cases climbing above 9800 the futures market appears ready to take it all back with a nasty gap down.  It will be very interesting to see the impact when China begins resumes trading Sunday night.  Consider your risk carefully as we head into the weekend.

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On the impeachment front, the left wants to call more witnesses extending the trial another week but the right is pushing to wrap it and put it behind them today.  Extending another week could have a minor market affect to keep us on our toes.  Later tonight the UK is signing the divorce papers with the EU but will begin and year-long transition period where they will attempt to work out a trade agreement.  Though there could be some currency fluctuations, how this decision will impact the overall market is anyone’s guess.  One thing for sure is there is a lot to consider heading into the weekend.

Trade Wisely,

Doug

Earnings vs. Coronavirus

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Markets gapped lower Thursday as coronavirus fear resumed.  However, the bulls were having none of that as they rallied most of the day with the close coming near the highs.  For example, the Dow erased a 244 gap down to end the day 124 points higher.  The SPY gained 0.32%, the DIA gained 0.44%, and the QQQ gained 0.36%.  The VXX fell to 14.60 while the T2122 remains in mid-range at 39.69.

During the day, the World Health Organization reversed its decision from last week and declared coronavirus a global health emergency.  Oddly, at the same time, they did not recommend travel to China to be restricted.  In other coronavirus news, the Centers for Disease Control confirmed the first person to person transmission inside the US. Globally the death count continues to rise and the confirmed cases is now about 10,000.

After the close, AMZN absolutely crushed their earnings report.  Prices soared in after-hours trading on that report that was 60% higher than expected.  It remains to be seen whether this will “lift all boats” on Friday.  Again, other earnings reports were too numerous to mention. 

Overnight, Asian markets were mixed, with only the NIKKEI green as virus fear grows.  In Europe, markets are red across the board at this point in the day.  As of 7:45 am, U.S. futures are mixed with the SPY and DIA pointed to gap down, while the QQQ (bolstered by AMZN) pointing to a half percent gap higher. 

Friday’s major economic news includes Dec. Personal Consumption-Expenditures (8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am).  The earnings list is somewhat smaller since it is Friday.  Among those reporting before the bell are AON, BR, CAT, CHTR, CL, CVX, CHD, XOM, HON, IDXX, ITW, JCI, LYB, PSX, and WY.

In impeachment news, the vote on whether or not to call witnesses is scheduled for Friday afternoon.  It appears the White House now has the votes to block witnesses.  If so, Senate Majority Leader McConnell is expected to call the votes to acquit (as has always been expected) as soon as Friday evening.  Speculation is that this might move markets even just on the expectation of an acquittal.  However, the way markets react to news, especially in advance, is never a sure thing.  So, as with other news, be careful betting on such an outcome.

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As mentioned, the bulls closed markets higher, but this also happened to be near resistance.  The US futures are mixed at this point and there are a number of major earnings reports this morning.  In addition to this, we have a weekend full of virus news coming.  So be careful relying on whatever happens today to be an indicator beyond today’s close.

Be cautious when considering any new positions.  And remember, nobody ever went broke taking profits and reducing risk. Above all, wait for the trade to come to you…plan your trade and trade your plan.

Ed

No Swing Trade Ideas for your consideration and watchlist for Friday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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

Viral Economic Impacts Grow

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Viral Economic Impacts

We have our biggest day of earnings reports this week, but the market’s attention seems to have shifted this morning the viral economic impacts that continue to grow.  As more and more companies close their doors, food shortages have spiked prices, and supply chains are breaking down.  The numbers of infected continue to grow and markets around the world are reacting to the potential impacts of the outbreak.  Volatility and uncertainty make for a challenging trading environment so plan your risk carefully.

Overnight Asian markets not closed due the extended lunar holiday fell sharply during the night with Taiwan dropping nearly 4%.  This morning European are decidedly bearish across the board in reaction to the rising death toll from the virus.  Ahead of the huge round of earning reports and GDP numbers, US Futures point to a nasty gap down at the open. 

On the Calendar

On the Thursday earnings calendar, we have our biggest day of reports this week with over 190 companies reporting.  Notable earnings include but are not limited to AMZN, MO, AMGN, ABC, BIIB, BX, KO, DHR, DOV, DD, EA, LLY, EPD, BEN, GWW, HSY, LEVI, NOC, DGX, RTN, SHW, UPS, X, VLO, VZ, V, WDC, & WYNN.

Action Plan

After gaping up into price resistance, the bears eventually won the day, producing a pop and drop pattern and raising concerns of a possible lower high in the indexes.   The FOMC made no changes to the interest rates and said that business investment is declining.  Of course, the President continues to say the rates should be zero as continues to berate them on in the press.  MSFT extended its gains after the bell, producing solid earnings and growth in its cloud business.  TSLA beat analysts estimate also rising even though the company lost 861 million last year but better than the more than 900 million loss the year before.

New virus fears are creeping back into the market this morning as deaths rise to 170, and the confirmed cases continue to expand.  Food shortages in China are causing prices to spike with producers closed as more and more businesses close.  Asian markets that are open fell sharply overnight, adding pressure to markets around the world.  With a big day of earnings that includes an after the bell report from AMZN, anything is possible and traders should expect volatile price action to continue.  As of the time of writing this report, the Dow Futures point to a substantial gap down of nearly 200 points but that could change substantially as morning earning roll out.  Remember, Price is King, remain focused on that set-aside bias and trade the chart.

Trade Wisely,

Doug

Bears Finding Strength?

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Stocks gapped higher Wednesday, as markets looked to good earnings and tried to ignore coronavirus for a second straight day.  However, this gap woke up the bears and the rest of the day was a selloff back down to Tuesday’s closing levels.  The DIA ended the day dead flat, the SPY closed down 0.09%, and the QQQ gained 0.16% (after coming back after a morning swoon).  The VXX gained slightly to 14.85 and the T2122 fell back to 33.90, so it remains in the mid-range.

AAPL helped markets after their Tuesday evening beats resulted in them printing another all-time high on Wednesday.  Oddly, BA rallied 2% on the day even though it reported its first loss in decades before the open.  Other earnings reports were too numerous to mention. 

Another story during the day was the Fed leaving rates unchanged and saying it plans to continue adding liquidity via REPO operations through at least April.  Chairman Powell also stressed the need to reach a 2% inflation target, meaning the Fed will be slow to raise rates in the foreseeable future.

Despite the earnings and Fed news, the coronavirus story remains at the top of mind.  The death toll has now topped 170 with 7,700 confirmed cases globally. (There are also tens of thousands of potential cases/patients being tracked.)  Business shutdowns, flight cancellations, city quarantines and major companies telling employees to work from home (for example Google and Microsoft) continue to pile up, especially focused on China.

Thursday’s major economic news is limited to Final Q4 GDP and Weekly Jobless Claims (both at 8:30 am).  However, once again there will be way too many earnings reports to list the tickers all here.

Overnight, Asian markets were heavily in the red as virus fear grow and traders returned from their holiday.  In Europe, markets are also red across the board at this point in their day.  As of 7:45 am, U.S. futures are pointing to a gap lower of three-quarters of a percent.

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Wednesday’s close near the lows implies that we will see a lower-low Thursday.  The US futures seem to be confirming this signal.  So, virus fear may be coming back into the forefront.   However, a large number of earnings have the power to jerk us around. 

Be cautious when considering any new positions.  Look for opportunities, but hedge your risks, keep taking profits and move your stops to protect yourself. Above all, wait for the trade to come to you…plan your trade and trade your plan. Remember, it’s the consistent base hits, not the occasional home run, that wins the pennant.

Ed

Swing Trade Ideas for your consideration and watchlist today: ERI, MU, STX, CVS, LULU, MUSA, AGN, KLAC. 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

Big day of Earnings and Economic Reports.

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Big Day

Today brings another big day of earnings and economic reports punctuated by the FOMC rate decision at 2:00 PM Eastern.  AAPL reported strong earnings results yesterday, but by in large the yesterday’s round of earnings was rather disappointing with PFE, MMM, SBUX, AMD, & EBAY moving lower after reporting.  Even with the virus outbreak cases rising above 6000, futures markets are still pushing for a bullish open on the back of the AAPL result and in hopeful anticipation of better reports today.  Anything is possible, so plan your risk carefully.

With the extended lunar holiday, China’s market remains closed but Hong Kong fell as much as 3% overnight in reaction to the virus economic impacts.  European markets are cautiously shaking off the coronavirus concerns sporting modest gains across the board this morning.  US Futures opened trading positive last night and has managed to maintain the bullishness all night.  Futures point to a gap up open ahead of earnings reports and economic news and the FOMC.

On the Calendar

On the hump day earnings calendar, we have 150 companies fessing up to quarterly results.  Notable reports today include but not limited to TSLA, ANTM, ADM, ADP, AVY, APRN, BA, EAT, CP, CRUS, GLW, DOW, DRE, ESS, FB, GD, GE, ILMN, LRCX, LVS, MPC, MKTX, MA, MCD, MSFT, MAA, MDLZ, NSC, NVS, PYPL, PGR, ROK, RCL, NOW, SWK, & TROW.

Action Plan

Although yesterday’s round of earnings was a bit disappointing, AAPL’s beat seems to be enough to inspire the bulls in the future markets higher.  There also seems to be a lot of bullish anticipation for the huge round of earnings today.  The coronavirus outbreak has now surpassed the 2003 SARS outbreak, with now more than 6000 confirmed cases with 132 deaths as this health crisis continues.  The President has now stopped all flights between the US and China, and SBUX was the first company to admit the outbreak will negatively affect future earnings.  Interestingly enough, the market appears unconcerned with the futures currently pointing to modest gap up open.

The market will also have plenty to digest on the economic calendar with International Trade in Goods, Pending Home Sales, Petroleum Status, and of course, the FOMC rate decision at 2:00 PM eastern.  With yesterday’s rally, the indexes are testing or near price resistance levels.  As I looked through my watchlists yesterday, the majority of the stocks were also pushing up into resistance levels providing relatively high-risk trades.  Traders should guard themselves against overtrading at price resistance and avoid chasing with the fear of missing out guiding your decision making.

Trade Wisely,

Doug

Earnings Overshadowing Virus Story

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Coronavirus remains the lead, but bulls around the world decided two consecutive days of fear was enough.  Likewise, the US major indices gapped higher and found a little follow-through on Tuesday.  The SPY closed up 1.05%, the DIA up 0.68%, and the QQQ up 1.54%.  None of these were new all-time highs, but the relief was palpable.  All 10 major sectors were up on the day and the VXX fell to 14.83.

Despite the market action on the day, the coronavirus remained the lead story overall. During the day there were many reports of new government travel advisories, airline flight cancellations and companies closing Chinese operations and/or evacuating staff.  In addition, there have now been confirmed human-to-human transmissions outside of China.  Meanwhile, the US has “fast tracked” a vaccine, but it will be at least three months before the early-stage clinical trials can even begin.

In other news, the defense completed their presentation in the Impeachment trial of President Trump and the Senate Majority Leader said he did not have the votes to block witnesses at this point. However, he has two more days to wrangle enough votes while Senators ask their questions. We should find out Friday whether the trial will continue.

On the earnings front, the most noteworthy was the AAPL report after the close.  It posted large beats on both top and bottom lines.  However, it did not skyrocket in after-hours reaction. Meanwhile, SBUX (which also beat expectations), became the first company to warn that the coronavirus may materially impact their fiscal 2020 results. So far this morning, BA reported a loss on the 737 Max debacle while MCD and GE posted beats.

Overnight, Asian markets are mixed, but mostly red.  In Europe, markets are green across the board at this point in the day.  As of 7:45 am, U.S. futures to a half percent gap higher on earnings news.

Wednesday’s major economic news is limited to the Dec. Pending Home Sales (10 am), Crude Oil Inventories (10:30 am), the FOMC Rate Decision (2 pm), and the FOMC Press Conference (2:30 pm).  There are too many major earnings, both before the open and after the close, to list here.  Needless to say, it will be a heavy earnings day.

$50.00 discount with code: Privilege

As mentioned yesterday, it’s going to be a long time before the coronavirus story is over.  However, in the grander scheme, and as SBUX proved last night, it’s really just an excuse for markets.  We have been rallying for months without breaking trend or even closing below the T-line until last Friday.  In short, the bears were long past due a little time in the sun.

Tuesday may just have been Mr. Market reminding the bears not to get too cocky about their new momentum.  It could also be that the bulls had just needed rest and earnings has now given them the new energy to take back control.  Since we don’t know which it was, use some caution before getting too far into either camp.

Look for opportunities, but hedge your risks, keep taking profits and move your stops to protect yourself. As always, above all, wait for the trade to come to you…plan your trade and trade your plan. Remember, it’s the consistent base hits, not the occasional home run, that wins the pennant.

Ed

Swing Trade Ideas for your consideration and watchlist today: SHOP, PLAN, GE, CIEN, YNDX, CDAY, PLNT, VG, UTHR, NWL. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. 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

Outbreak Fears

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The virus outbreak fears sent investors running for cover yesterday wiping out this year gains in the biggest point decline since October last year.  A parade of talking heads hit the financial news yesterday, trying to convince the reaction was overblown and some even talked up the idea of buying the pullback.   Although very self-serving as they talked up their book, the most certainly could be right even though the confirmed cases more than doubled to 4500 overnight.  Set that aside, and we still have to deal with broken trends and price supports, which now place some resistance above.  Stay focused on price for clues.

Asian markets not closed for the holiday struggled last night with South Korea stocks falling 3% as the virus deaths climbed over 100.  European markets are modestly green across the board as cautious investors monitor earnings and virus news.  US Futures, on the other hand, point to a gap up open with Dow suggesting about a 100 point gain ahead of several market-moving earnings and economic reports.  Be careful chasing the gap and consider your risk carefully when we reach up to test price resistance.

On the Calendar

On the Tuesday earnings calendar, we have a big day with nearly 100 companies reporting their profit or loss results.  Notable reports include AAPL, MMM, AMD, ALK, AOS, BXP, CNI, CIT, EBAY, EQR, HOG, HCA, LEA, LMT, MKC, NUE, NVR, PNR, PFE, PII, PHM, SBUX, UTX, XRX, & XLNX.

Action Plan

Fears around the coronavirus outbreak put substantial pressure on the major averages wiping out the year’s gains in one fell swoop.  The question is it justified or has virus fear lept over common sense?  That’s hard to tell with the number of individuals with the illness more than doubling overnight to 4515 confirmed cases.  With just five confirmed cases in the US and the CDC monitoring possibilities in 26 states, it seems to pretty contained at least at the moment.  The industry sent a string of talking heads out yesterday trying to convince the investors there is no need to panic with several trying to convince folks this is a buying opportunity.  While appearing very self-serving talking up their book of business, they most certainly could be current.

Although the drama of the Trump impeachment trial continues to grow, the market itself seems to have very little concern about the proceedings at this point.  Focus today will be on the big round of earnings reports punctuated by the APPL results coming after the bell today.   Durable Good’s, Case-Shiller, and Consumer Confidence numbers will also have some influence on the sentiment of the day as the FOMC meeting begins.  Technically speaking, index trends and price support levels broke with yesterday’s selloff.  That means as the buy the dip crowd rushes back in, it would be wise to remember, we now have price resistance levels above that must be recovered before moving higher.  Certainly doable but never forget that is also the place to watch for potential failures if virus fears remerge or key earnings reports happen to disappoint.

Trade Wisely,

Doug

Markets Calming For The Moment?

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Coronavirus racked up another win Monday, taking down US markets just as they had Asian and European markets before the US opening bell.  After the gap-down of over 1.5%, the rest of the day was a grind as the bulls tried to fade the gap and the bears said not so fast.  At the end of the day, we were left with indecisive candles with large upper wicks with the SPY down 1.60%, the DIA down 1.57%, and the QQQ down 2.07%.  The VXX gapped higher and after volatility ended near the highs, up 10.39% to a still low 15.72.  However, the T2122 has now fallen well into oversold territory at 8.26.

The economic impacts of coronavirus led the news all day Monday.  It is now reported that many US companies are suspending retail as well as production operations as a result of the threat.  (Bear in mind that the production part of this is not yet a real impact as pretty much all operations in China are normally shut down for many weeks at this time of year.)  Other news included reports that over 100 deaths and 4500 diagnosed cases have been reported worldwide.  In the US, the CDC has confirmed at least five cases, while 110 patients across 26 states are being monitored as possible cases.

In other news, Huawei has been officially allowed to be part of the UK’s 5G infrastructure, defying US pressure to exclude the company on security grounds.  BA was able to secure $12 billion in financing to get it through the 737 Max crisis.  Finally, President Trump’s impeachment defense will rest today. The rumors are that the Sunday bombshell about John Bolton may have changed the math in favor of the demand for witnesses. If true, this would very likely drag the trial on past the date of State of the Union speech.

Tuesday’s major economic news is limited to the Dec. Durable Goods Orders (8:30 am) and Conf. Board Consumer Confidence (10 am).  Major earnings on the day include MMM, AOS, HCA, HOG, LMT MKC, NUE, PCAR, PNR, PFE, PHM, UTX, and XRX before the open.  After Tuesday’s close the market hears from ALK, MXIM, SBUX, EBAY, AMD, AAPL, BXP, CHRW, EQR, PFG, SYK, XLNX.

Overnight, Asian markets are mostly closed (Lunar New Year), but the NIKKEI was green as it shook off virus fear.  In Europe, markets are also green across the board at this point, as fear seems to have subsided for now.  As of 7:30 am, U.S. futures are pointing to a significant gap higher of between half and eight-tenths of a percent.

$50.00 discount with code: Privilege

It looks like market fears may be calming a bit after a rough couple days. However, nothing has improved on the coronavirus front and that story is very likely to get worst before it gets better. So, be careful and don’t assume the market has moved on from the story once and for all. Still, the bulls have remained very resilient for months. 

Regardless of what happens, all we can do is stick with the trends.  In this case, that may well mean stepping aside, hedging more or getting small until markets settle. If you do look for trades, hedge your risks, keep taking profits and move your stops to protect yourself. Above all, wait for any new trade to come to you…plan your trade and trade your plan.  

Ed

Sorry, but 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. 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.

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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.

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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 perfect storm for Price Volatility

by

A spreading virus threat, a big week of earnings, economic data including an FOMC rate decision as well as an ongoing impeachment trial, could prove to be the perfect storm for price volatility.  Markets around the world are reacting to the quickly spreading threat of the coronavirus that’s injecting a huge economic uncertainty to its potential impacts.  Markets hate uncertainty and not much that creates more fear than a spreading contagion with no cure. Plan your risk very carefully as quick news-driven reversals and large morning gaps are possible during this uncertainty.

Japan traded lower in response to the virus, while most Asian markets remain closed for the lunar holiday.  European markets are falling sharply this morning as virus fears grow, and US Futures are reacting sharply lower this morning as well.  At one point, Dow futures fell 500 points but have recovered slightly this morning now suggesting a gap down around 400 points at the open.  Hold on for a bumpy ride!

On the Calendar

On the Monday earnings calendar, we have over 70 companies reporting.  Notable earnings include ARNC, CR, DHI, GGG, HMST, JNPR, & WHR.

Action Plan

We all knew there was an overextended condition in the market, but who could have guessed it would be a microscopic virus that would bring out the bears.  With now five confirmed cases here in the US, nearly 2900 cases worldwide and over 450 people now listed as critical worries of severe economic impacts rose dramatically over the weekend.  Oil prices dropped into the low 50’s as travelers are choosing to reduce their movements.  In China, more than 25 million people are locked down in cities where public travel has stopped operating and many businesses have closed during their biggest holiday session.  During the evening, the Dow futures dropped 500 points as markets around the world react to the quickly spreading virus.

We have a huge week of earnings with some of the biggest companies reporting this week along with and FOMC rate decision and a big week of economic reports.  Combine all of that with virus jitters and ongoing impeachment trial, we have the conditions for the perfect storm of price volatility.  Plan your risk very carefully!  Inexperienced traders might want to consider sitting this out and protecting your capital until this uncertainty passes.  Expect quick news generated price reversals and large morning gaps that could be up or down, and the market reacts to the unknown.

Trade Wisely,

Doug