As violent price gyrations continue, so does the extreme
danger for retail traders. Although we
have had several big one day rallies, we have yet to see the bulls able to
follow-through the next day. Instead was
we see is overnight reversal ripping the heart out of traders that tried to
hold positions just one more day. This morning
is a repeating that pattern once again with US Futures limit down wiping out
most if not all of yesterday’s hopefulness.
Asian markets seesawed back and forth overnight, finally
closing the day lower across the board.
European markets are sharply lower this morning with the DAX, FTSE,
& CAC, all showing losses fo more than 5%.
Ahead of a Housing Starts number and 60 earings report Dow futures to point
to an overnight reversal of more than 800 points, and fear and uncertainty continue
to drive extreme price volatility.
Prepare for another wild day.
Economic Calendar
Earnings Calendar
On the hump day earings calendar, we have about 60 companies
reporting results. Notable reports
include GIS, FIVE, GES, HABT, TLRD, TCOM, & WSM.
Top Stories
Biden swept three primary elections last night as he doubles
the delegate lead over Sanders can drawing closer to clinching the Democratic
nomination. President Trump has now won
enough delegates to lead the Republican party in the 2020 election.
After a day of rally closing the Dow up more than 1000
points, futures now point to an overnight reversal wiping out the gains waiting
on yet another government bailout proposal to be passed. Munchin reportedly warns senators the impacts
of the virus could lead to a 20% US unemployment rate as a business shutdown
responding to CDC recommendations.
The Vegas strip is quiet for the first time since the
Kennedy assassination as all gaming in the state was ordered to shut down. Kansas schools have closed public schools for
the rest of the year! The first such state
to make such a drastic decision.
Technically Speaking
Yesterday’s relief rally was a nice change to the extreme
selling pressure, but sadly it looks as if a second day of follow-through is too
much to ask for amid such wild volatility.
After another wild night of price, action futures reached another limit
down trading halt. The QQQ rally moved
up to test the resistance of its 500-day average, but sadly the overnight
reversal will wipe out almost all of yesterday’s hopeful gains at the open.
With the VIX closing, the day above a 75 handle, and a likely
sharp move higher this morning options, prices will remain very dangerous and
virtually untradeable. While there are
some tempting values in stock prices, the volatility requires a tremendous tolerance
for risk that few retail traders are willing to ride out. The best course of action for most is to
continue to remain disciplined to your trading plan and protect your capital while
market prices continue to gyrate violently.
Tuesday was another roller-coaster ride for markets. A 2% gap higher was met with immediate selling down to the lows of the day. However, from 10 am to noon was a hard rally. The massive waves continued all day until a close near the highs. Once again, we had an 8% intraday range, but the SPY closed up 5.63%, the DIA up 5.42%, and the QQQ up 7.58%. The VXX only lost 1.18% to 58.51, which points to intraday volatility. Oil was down 6% on the day, closing at $26.84/barrel (WTI) on fear of a global recession and even further Saudi supply increases. However, the 10-year bond yield was back up above 1%, closing at 1.064% on the day as Fed bond-buying ramps up.
During the daily press conference, the President kept his tone for a second straight day, announcing desires to have fiscal stimulus. This includes deferring April 15 income tax payments for 90 days and a check sent to every American home. At the time of the presser, the administration hadn’t yet spoken to Congress on the plan specifics, but their hope was to have the checks cut and mailed within two weeks. Note that it took 2 months after signing the bill in 2009. Nonetheless, markets liked something they heard.
The House and Senate Democrats also put forth packages of their own and as said, were in mid-day negotiations with Treasury Sec. Mnuchin (who left the President’s press conf. early to start those negotiations). Subsequently, it leaked that they were talking about a $1.2 trillion relief package including over $250-$500 billion in immediate checks to family homes, $200-$300 billion in small business assistance, $200-$300 billion in tax cuts, and $50-$100 billion in relief for the airline industry. It also came out that during discussions with Congress, Mnuchin said he was worried unemployment could hit 20% due to the virus.
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Not to be outdone, Majority Leader McConnell told the press that the Senate would not adjourn again until they had passed a relief package larger than the House passes. (A somewhat odd statement for a “Fiscally Conservative” party leader, but I guess these are different times.) In addition, during the day the Fed extended its $500 billion/day repo operations (to aid banks) through at least the end of the week and announced a new lending facility for US businesses (beyond banks). So, the government is now firing all their guns.
The global headline virus numbers rose to 203,500 confirmed cases and 8,225 deaths. In Europe, Italy now has 31,500 cases with 2,503 deaths. Spain has 13,720 cases with 600 deaths, France has 7,750 cases with 175 deaths, Germany has 9,920 cases and 26 deaths. On this continued spread, the EU closed its exterior borders to all non-EU people for 30 days. In addition, the UK announced a 400-billion-pound relief package. Both the UK and France said they will start fining and may jail anyone infected who is out in public. Italy, France and Belgium all also banned selling short for 3 months in their stock markets.
In the US, all 50 states (plus D.C. and Puerto Rico) have confirmed infections as the virus is following exactly the same exponential growth rate seen in Europe. The totals are now 6,525 cases and 116 deaths. Again, more states have ordered public venues, bars and restaurants closed. Schools were closed across 37 states. NYC also gave warning that they will soon join San Francisco in closing the city and ordering shelter-in-place quarantines.
Overnight, Asian markets were down, with South Korea down 6.5% and Australian down almost 5%. Europe has continued to the downside, with another acceleration today. So far in their day, the major European bourses are all down more than 5%. In the US, futures were volatile again overnight. However, as of 7:30 am, U.S. futures were pointing to another 5% gap down.
On Wednesday, the major economic news is limited to Feb. Building Permits and Feb. Housing Starts (both at 8:30 am) and Crude Oil Inventories (10 am). The only earnings of note for the day are GIS before the open and TCOM after the close
The US numbers will continue to rise exponentially (especially once testing really starts ramping up), more businesses will report the impacts, and the life of the public will halt. So, volatility and gaps are not going anywhere. We are simply in a massively erratic and over-reacting market with a bias still to the downside right now. Again, this is not a market to be Swing Trading. Keep reminding yourself, you do not have to trade every day, week, or month!
Needing action is the worst reason in the world to take trades. So, remember there will be another day. Keep preparing your list of strong companies you will want to own WHEN THE TIME IS RIGHT. Then wait for those trades to come to you. Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when we have a more stable price action, less volatile trend and see proven support below us. Until then, get very fast (day trade), very slow (long-term holds) or stay out.
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
It would appear attempting to buy our way out of this
current crisis is not going to work after the massive move of the FOMC did
little to dissuade the bears in the face of such uncertainty. I would like to assume the worst is over, but
with the US just now beginning the process of a shutdown, the path forward is
more uncertain than ever. Long and short
trader getting involved in this will volatility with have to have considerable
tolerance for risk with the VIX now above the 2008 high. It would seem the best course of action for
most retail traders is to remain on the sidelines protecting their capital
until we begin to see some improvement.
Asian markets closed mixed with Australia surging nearly 6% overnight. Unfortunately, European markets are still
feeling some selling pressure this morning as they are modestly lower across the
board. After a wild night of volatility
in the futures markets, point to a little bullishness at the open. With a big day of earnings, economic data, and
uncertainty, anything remains possible.
Economic Calendar
Earnings Calendar
On the Tuesday earnings calendar, we have 60 companies reporting
quarterly results. Notable reports
include FDX, FLR, HDS, LE, & MIK.
Top Stories
With more than 4200 confirmed cases and over 70 deaths, the
CDC has recommended restricting gatherings to less than ten people in an attempt
to slow the spread. Many states have now
recommended closing bars, restaurants, night clubs, fitness facilities, and
schools until further notice. Small
business impacts are tremendous.
The Feds surprise rate cut and massive cash injection increased
the fear of the unknown lifting the VIX-X above the 2008 highs and creating the
worst one-day selloff since 1987. All 11
sectors of the S&P were down on the day, but there were some bright spots amongst
the carnage, such as KR and CLX.
Airlines have already asked the government for a 50 billion
dollar bailout, and I’m guessing there will be many more industries to follow
as the impacts on business grows. The
virus is now impacting the Presidential election, with Ohio closing its primary
polls.
Overnight futures came close to a limit up rally, but during
the night gave back most of the move in another display of incredibly dangerous
price volatility.
Technically Speaking
When looking at the charts, there is very little to see but tremendous
technical damage. One would hope that
yesterday was the final capitulation, but with much of the country right at the
beginning of its shutdown, the path forward seems more uncertain than ever. With such incredible price volatility, stock
traders attempting to pick up the deeply discounted stocks will have a
substantial tolerance to risk and willing to hold through the huge overnight reversal
and steep intra-day swings. With implied
volatility so high option traders face incredibly inflated contract prices, as
well as punishing bid/, ask spreads making it extremely dangerous to trade. Until there is some improvement, it is hazardous
to consider being long or short. Staying
in cash on the sidelines, protecting your capital continues to be the most reasonable
course of action the majority of traders consider.
Another day, another ride through the meat grinder for traders. After Sunday evening’s Fed move, markets made a massive 12.5% gap down at the open. This triggered an immediate halt. After the 15-minute break, the daily whipsaw continued with more than 8% intra-day range but ended near the lows. The SPY closed down 11.11% (off the lows), the DIA down 12.76% (near the lows), and the QQQ down 11.98% (very near the lows). The VXX spiked 38.87% to close at 59.99. The 10-year bond yield closed down to 0.758% and Oil closed at $28.67/barrel (WTI). This is significant because shale companies cannot stay in business at that oil price.
During the day markets were panicked and manic as news came fast. Toward the end of the market day, the President held another press conference, where he changed his tone again. This time he accepted that the virus is out of control. In fact, he said “if we do a good job,” the COVID-19 outbreak may be under control by July or August. He also said he may implement “lockdowns” (quarantine) for certain areas, is calling for social distancing by all ages, and for all Americans to avoid any gathering of more than 10 people. In addition, he pledged to bailout the airline, cruise, and hospitality industries.
On Monday, the Senate did not take up the relief bill that was passed early Saturday in the House with Presidential support. Majority Leader McConnell reported that Senate Republicans cannot accept the paid sick leave in the House bill (although House GOP members and the President had, and the bill exempts smaller companies). However, Senators on both sides of the aisle have already staked out positions offering various forms of payments to be sent to every American home. The G7 also held a teleconference. While European leaders were hoping it would result in announcement of specific coordinated economic action, all that came from the meeting was a vague promise to do “whatever is necessary to support global trade and economies.”
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Last night the global headline virus numbers rose to 185,500 confirmed cases and 7,330 deaths. In Europe, Italy now has 28,000 cases with 2,160 deaths. Spain has 11,200 cases with 491 deaths, France has 6,650 cases with 150 deaths, Germany has 7,640 cases and 20 deaths. Many countries have closed their borders to foreigners and implemented virtual shelter-in-place rules by closing businesses and banning public gatherings. Automakers such as Fiat-Chrysler and Volkswagen have closed all of their operations across Europe.
In the US, 49 states (plus D.C. and Puerto Rico) now have confirmed cases as the virus is following exactly the same exponential growth rate seen in Europe. The totals are now 4,740 cases and 95 deaths. More states have ordered public venues, bars and restaurants closed. San Francisco has also ordered shelter-in-place quarantines across most of the Bay area. Some states have also canceled or postponed primary elections to avoid crowds. However, not all the news was bad. With all the demand from online-shoppers, AMZN announced it is trying to hire 100,000 new employees for distribution centers and delivery operations.
It was reported Monday that MRNA began the first trial of a potential vaccine candidate. However, even if this is the perfect vaccine, it will take 12-18mo before it would be ready to go to manufacturing for wide distribution. It is also worth noting that in the history of the world, only 1 virus (Hepatitis-C) has ever been cured. So, traders should be very careful not to latch-on to every report of a miracle drug as an immediate massive opportunity.
Overnight, Asian markets were mixed. Europe has continued to the downside so far in their day. In the US, futures were all over the place overnight. They went “Limit up” at one point only to turn around and go negative. As of 7:45am, they are pointing to a bounce after the ugly day yesterday.
On Tuesday, the major economic news is limited to Feb Core Retail Sales (8:30 am), Feb. Industrial Production (9:15 am), and Jan. Business Inventories and JOLTS (both at 10 am). The only earnings of note are from FDX, which reports after the close.
Expect volatility and gaps to continue. We are simply in an erratic and over-reacting market with a bias to the downside. Not a good market to Swing Trade. Keep reminding yourself, “I do not have to trade.” Needing action is possibly the worst reason in the world to take a position. So, remember there will be another day. Keep preparing your list of strong companies you will want to own WHEN THE TIME IS RIGHT. Then wait for the trades to come to you. Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when more stable action, less volatile trend and proven support are in place.
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
Sunday afternoon, the FOMC made a surprise mid-meeting decision
to cut interest rates to zero and aggressively inject another 700 billion. An action that would typically bring the bulls
charging back had an opposite effect scaring the market and pushing the futures
limit down just minutes after opening Sunday evening. It appears the Friday gains disappeared in
one fell swoop on the weekend reversal.
Price volatility will be extreme at the market open and don’t be
surprised it we trip another circuit breaker halting trading for 15 minutes shortly
after the open.
Asian markets closed down across the board, and European markets
are falling as much as 8% this morning. Downside
pressure could easily create new market lows this morning as panic grips the market
unable to come to grips with the outbreak impacts. Protect your capital as extreme price
volatility is likely to continue for the near future.
Economic Calendar
Earnings Calendar
We have a big week of earnings reports starting Monday with
more than 160 companies reporting results.
Notable reports include COUP, HQY, REV, & TME.
Top Stories
The Government is pulling out all the stops trying to stop
the market from bleeding out. Friday,
the President declared a National Emergency, freeing up 50 billion dollars for
stimulus setting of a strong buying rally into the Friday close. Late afternoon on Sunday, the FOMC made a second
mid-meeting decision to cut the interest rates to 0% and stepping up aggressive
operations to the tune of 700 Billion. The
action was not received well by the market, with the Futures dropping limit down
in about 15 minutes after opening Sunday evening, and treasury yields fell
sharply.
The CDC is asking to cancel or postpone all group activities
of 50 people or more. California and New
York have ordered closures of bars, night clubs, restaurants, and other states
are soon to follow. New York is also
closing its schools. Las Vegas has
started to shut down as well, with all the MGM and Wynn resorts closing its
doors this week.
Piling on to the bad news, Apple has been fined 1.2 Billion
Dollars by French antitrust authorities early this morning.
Technically Speaking
The Friday afternoon rally allowed the QQQ to recover its
500-day average closing the week with a little hopefulness of a relief rally. Sadly that hopefulness faded quickly after
the shocking FOMC action scaring the market that things but be much worse than anticipated. With the market in full-on panic mode, there’s
not much to hang our hat on technically with such wild emotional swings. With the futures, limit-down expect an open
that wipes out the entirety of Friday’s gains and the possibility of new market
lows. Don’t be surprised if a circuit
breaker trips shortly after the open halting trading for 15 minutes for the 3rd
time in under a week.
It goes without saying this is a very dangerous market with
no relevant metrics to guide traders as to what comes next. We know the impacts are going to be huge but
were trying to shoot at a target in total darkness with no idea how long the night
will last. Anything is possible, and the
best traders can do is protect their capital by standing aside while the
violent price action continues.
The roller coaster continued Friday with a gap higher at the open, a run back down near the Thursday lows and then a strong rally into the close. In contrast to the Wednesday night speech, the bulls loved what they heard from the President’s press conference at day end. As a result, the SPY closed up 9.20%, the DIA up 9.43%, and the QQQ up 8.47%. Interestingly, the VXX was only down 8.78% to 43.20. Oil (WTI) also closed higher at $32.93/barrel and the 10-year bond yield also climbed to 0.983%.
In the presser, the President declared a national emergency as well as steps that will soon be taken to triage potential cases and direct people to a nearby testing center. Later, Dr. Fauci (NIH) clarified that it’s more complicated some stated at that event. He told BBC that temporary facilities need to be built, supplied, and tens of thousands of testers will need to be trained. In addition, newly added labs need to be set up to process the samples as well as supplied with reagents. So, millions of tests will not be available (let alone done) this week. That said, he noted the US was on a much better testing trajectory Friday evening than it had been on Thursday.
The event was serious, but also oddly congratulatory. The President, VP, Task Force members, and a parade of CEOs were all praised, thanked and asked to speak. While I personally didn’t like that tone, this seemed to be exactly what traders wanted to hear. It had a very lifting effect on markets, which perhaps sensed the government finally recognizes the scope of the problem, is now serious about it, and that major testing efforts are being planned to begin.
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Over the weekend, the global headline virus numbers rose to 173,000 confirmed cases and 6,665 deaths. In Europe, Italy now has 24,750 cases with 1,810 deaths. Spain has 8,800 cases with 300 deaths, France has 5,500 cases with 130 deaths (but they have not reported number updates in over a day), Germany has 6,220 cases and 13 deaths. France, Spain, and Germany also all followed Italy in closing all public venues, closing non-essential businesses, as well as stopping non-critical travel.
In the US, 49 states (plus D.C. and Puerto Rico) have confirmed infections as the virus is following exactly the same exponential growth rate seen in Europe. The totals are now 3,800 cases and 69 deaths. As far as impact, things got ugly this weekend as groceries were stripped bare many places, major retail chains closed (or were ordered closed), hospitals began canceling elective surgeries, and unpaid employee furloughs escalated. Food and household goods makers also warned of supply chain disruptions caused by hoarding and loss of workers. In addition, a number of states banned large gatherings. Ominously, NY state reported that it is nearly out of ICU beds and may authorize hospitals to take over hotels.
Still, on Saturday Sec. Mnuchin echoed the President when said he still did not expect a recession. Nonetheless, on Sunday, in the 2nd emergency move in just days, the Fed cut the Fed Funds rates a full percent to 0.25% (while extending the repayment period to 90 days), cut bank reserve requirements to zero, launched $700 billion in additional QE (for a total of $2.25 trillion) and said “they were prepared to use its full range of tools” as needed.
In a separate event, the President reverted to his form telling the daily press briefing the virus is “something we have tremendous control of.” Another flatly false statement. Fortunately, real experts were also on stage to give us the real sitrep. After Trump left, Dr. Fauci told the press “the worst is yet to come…we are at a critical point now.” Earlier in the day, the CDC had recommended that for at least the next 8 weeks, people cancel or postpone any gathering of 50 people or more.
Overnight, Asian markets were down hard again across the board despite moves by the Fed and other Central Banks. Europe has continued the slaughter down 6%-9% across every bourse at this point in their day. In the US, futures went limit-down shortly after the Fed moves and were halted overnight. As of 7:45 am, U.S. futures are pointing to a huge gap down, which will very likely cause a circuit-breaker at the open.
On Monday, the scheduled major economic news is limited to the NY Empire Mfg. Index (8:30 am). Once again, there are no major earnings reports on the day. However, there are very likely to be economic news from the Fed, President, Congress, etc.
Heavy volatility and gaps are likely to continue. Remember, that there is no rule saying you must be trading. In fact, avoiding heavy volatility environments is a great idea for most traders. So, remember there will be another day. Prepare a list of tickers you will look to buy when the time is right. Then wait for the trades to come to you. Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when a less-unstable trend and proven support are in place.
Ed
Swing Trade Ideas for your watchlist: AAPL, KR, UNH, CPB, EVBG, ZM, CHTR, PYPL, MSFT, DPZ, REGN, ATVI, ABBV, GOLD, INTC, WMT. 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
From record market highs to bailout conditions in less than
a month! Oh, how the tables have turned by
a microscopic virus wreaking havoc around the world. A punishing day that saw heaving selling in
every sector of the market, and a barrage of bad news that points massive economic
impacts in the weeks and months to come.
With so much uncertainty facing the market, anything is possible, and it
seems government money can’t buy back investor confidence facing a pandemic.
Asian markets finished the week in the red, with Japan closing
more than 6% lower on the day. European markets
are in bounce mode this morning, rallying more than 5%. After a very turbulent night, US Future now
points to a Dow gap up of more than 1000 points as this will price action rollercoaster
ride heads into the uncertainty of the weekend.
Plan your risk carefully because anythings possible by Monday morning!
Economic Calendar
Earnings Calendar
On the Friday earnings calendar, we have just short of 70
companies reporting quarterly results.
Notable reports include BKE & GOGO.
Top Stories
Another rough market day triggering circuit breakers with
the Dow suffering the worst one day plunge since 1987 even as the Fed stepped
up with half a trillion dollars. A barrage
of virus news with professional sporting teams suspending seasons and large
venue closures in an attempt to control the virus spread.
Although its Friday the 13th, there is a favorable
breeze blowing in the pre-market after a wild night of price volatility in the
futures markets. Japan sold off sharply
last night, dropping as much as 10% at one point, pushing Dow futures down as
much at 700 points. However, the bulls
have come roaring back with a substantial gap up in prices at the open
today. Cross your fingers that it can
hold heading into a weekend that’s not likely to provide better news on the
virus front.
Technically Speaking
Index charts, as well as most stock charts, are in an ugly
technical condition. The Dow dropped
like a hot knife through butter closing well below the 2018 low nearly 19% below
its 500-day average. The SP-500 finished
the day just short of 14% below its 500-day with the Nasdaq composite 8.5%
below. The failure in the Russel is epic,
closing more than 28% below its 500-day average. What happens next is anyone’s guess, as the
economic impacts of the outbreak continue to compound. Some analysts are suggesting the market could
lose half of its value by the time this is over, and the full measure of
damages totaled. Congress is working on some
kind of relief package, but according to reports, it will be next week before a
vote occurs. The silver lining to all of
this is that great stocks are reaching bargain prices for those willing to hold
through what is likely going a very turbulent market for weeks or even months
to come. As we head into an uncertain
weekend, plan your risk carefully because anything is possible by Monday
morning.
In another roller-coaster day, the bears roared and the bulls got slaughtered. Futures plummeted after the 9 pm speech and we woke to a 7% gap down. Shortly after the open, this led to a halt. After the restart, markets got a roller-coaster ride. This lasted until shortly after 1 pm. From there, the rest of the day was a jagged slide lower. Just before the close, markets fell off a cliff, closing near the lows. This left the SPY down 9.57%, the DIA down 10.06%, and the QQQ down 9.17% on the day, which was the worst performance since Black Monday in 1987. As you’d expect, the VXX flew higher to end at 47.36, while Oil (WTI) closed down again to $30.90/barrel. The 10-year bond yield also sold off near the close after being up in the afternoon. It closed at 0.809%. Interestingly, banks raised mortgage rates in an effort to curb refinancing.
The most shocking event of the day was that the Fed threw their full weight into the fight, but came up short. Fed Chair Jerome Powell announced $1 trillion in additional easing through repo operations ($500 billion in 1-month and $500 billion in 3-month). That raises total Fed QE efforts to $1.5 trillion overall. However, that additional $1 trillion only bought markets a 6% mid-day gain that lasted 15 minutes. As soon as the euphoria wore off, markets sold off hard again for the rest of the day.
Meanwhile, the global headline virus numbers have risen to 137,700 confirmed cases and 5,080 deaths. In Europe, Italy now has 15,100 cases with 1,020 deaths. Spain has 3,900 cases with 90 deaths, France has 2,900 cases with 61 deaths, Germany has 3,060 cases and 6 deaths. In the middle east, Iran has 11,400 cases with 520 deaths. In Asia, South Korea has 7,980 cases with 71 deaths and Japan has 700 cases with 19 deaths. Perhaps the worst virus news of the day went under-reported. A study that was published in the Journal Lancet (191 patients), found that people remained contagious a median of 20 days after diagnosis with the longest being 37 days. This means that long after symptoms are gone and a 14-day quarantine expires, people can still spread the virus
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In the US, 47 states (plus D.C.) have confirmed infections of the virus for a total of 1,762 cases and 41 deaths. All major sporting events, concerts, conventions, etc. have been canceled and many states have banned any gathering of over 250-1,000 people (varies by locale). Many more companies also laid-off workers without pay due to a loss of business. Shortages and hoarding have begun, although those instances are not completely out of hand now.
However, not all the virus news was bad. In China, only 18 new cases (7 of which were travelers from abroad) and 11 new deaths were reported Thursday. So, with as much as 80% of their workforce back to work, they are now reporting the peak of the epidemic is behind them. While this is a very hopeful sign, we do have to remember that they had a good testing regime, had strictly-enforced quarantines, and a socially compliant population, which the US lacks (as of now). Still, it is a positive sign.
Overnight, Asian markets were down again across the board. (Down hard in the case of Japan, which lost over 6%.) However, Europe has gone the other direction with every bourse up strongly, including the 3 majors being up over 6% at this point in their day. As of 7:30 am, U.S. futures are pointing to a large gap higher (4-5%), after having reached the 5% “limit up” circuit-breaker overnight. So, instead of Mr. Hyde, the markets may give us Dr. Jeckyl today.
On Friday, the major economic news is limited to Feb. Import/Export Price Index (8:30 am) and Michigan Consumer Sentiment (10 am). Once again, there are no major earnings reports on the day.
With the incredible volatility and heavy selling that has gone on this week, it will take a braver man than me to take positions into the weekend. (And that’s true regardless of what happens Friday.) The headline risk is on both sides, with the possibility of a stimulus package and/or more Fed actions on one side. On the other side, there is a likelihood of large increases in the numbers of cases and deaths, as well as more weekend announcements from businesses. There are also too many wildcards to count. So, my advice is to get flat or at least delta-neutral going into the weekend.
If you have to trade, trade small (nimble), fast, and lock in profits every chance you get. Remember, this won’t last forever and there will be another day. Prepare for the eventual bottoming, but don’t expect a V-shape. Have a list of tickers you will look to buy and a price pattern where you’d be interested in buying. Then wait on the trades to come to you. Say it with me… Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when a trend and support are in place.
Ed
Sorry, but due to market volatility there will be no Swing Trade Ideas 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
With the longest bull run in market history officially over and unprecedented travel restrictions going into place, investors continue to run for the doors. As the markets continue to tumble, expect more forced selling as mutual fund, 401K redemption’s and margin calls grow. We are in uncharted waters as the now official pandemic personal, business, and economic impacts create an uncertain path forward. Protect your capital!
Asian markets closed lower across the board as Japan falls into bear a bear market. European markets just one day after a central bank rate cut sees losses of more than 5% this morning. Ahead of a huge day of earnings and economic reports, the US Futures have to trigger their second circuit breaker in a week. Halting trading but pointing to a morning gap down of more than 1200 points. Hold on tight; this will be a bumpy ride today!
Economic Calendar
Earnings Calendar
On the Thursday earnings calendar, we have our biggest day
this week, with more than 250 companies reporting. Notable reports include DG, AVGO, WORK, ADBE,
CRON, GPS, JBL, ORCL, TLYS, TUP, ULTA, & ZUMZ.
Top Stories
Yesterday the WHO declared a global pandemic as the virus continues to spread around the world. The White House bans travel from most European countries for 30 days in an attempt a slow the spread of the virus.
The NBA suspends the season, and March Madness will happen
with no spectators allowed.
The longest bull run in market history is now officially
over as US markets slump into bear market territory and continuing to slide south.
Technically
What’s there to say other than the charts are a mess and
continue to worsen as virus panic grips the market. Although it seemed nearly implausible just a
few days ago that the market would test the 2018 lows this morning that looks
very likely with the Dow pointing to more than 1000 points lower at the
open. While the virus situation could get
much worse, there is a silver lining if we can get past the emotion of the selloff. Eventually, this will be over, and great stocks
will be at bargain-basement prices. The
massive price volatility is currently very dangerous, but given time it will
get better, so protect your capital and be patient.
Well, that stimulus rally didn’t last long. Wednesday started off with a 2.7% gap down and then we saw volatile follow-through the rest of the day. However, at the end of the day we did see some short-covering or bulls stepping in to reduce the damage. Either way, the buyers came up short as at the close, the SPY was down 4.87%, the DIA down 5.84%, and the QQQ down 4.36%. The VXX closed up over 13% to 38.66. However, oddly the 10-year bond yield closed up to 0.85%. Oil also closed down to $33.12/barrel (WTI) on the day. As mentioned yesterday, we are now into a bear market, well more than 20% off the highs in all the major indices.
During the day, the WHO finally declared coronavirus to be a global pandemic. (Insert Captain Obvious joke here.) The President also met with Wall Street executives while his staff met with Oil lobbyists to discuss the crisis. However, in a sign of what really gets things done, shortly after we hit bear territory in all three major indices, the Fed announced it will pump an additional $25 billion/day ($175 billion/day total) into banks through the repo program. There was also then an announcement the President would be giving a national speech Wednesday evening.
In his speech, the President banned all travel from Europe for 30 days. Of course, he did so after blaming those countries for some outbreaks in the US. He also seemed to finally embrace the tone of the medical experts as he advised the elderly not to travel, Nursing Homes to stop all non-medical visits, and all people to adopt measures like social distancing, staying home when sick, and increasing hygiene practices. He then asked Congress for $50 billion in economic relief and to consider giving unspecified payroll tax relief. In addition, he ordered the SBA to give low-interest loans to SMEs. He concluded in his typical style (and I’ll leave it at that). Whatever his style and the content, markets apparently expected more as both futures and Asian markets plunged immediately after the speech.
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Meanwhile, the headline virus numbers have risen to 127,750 confirmed cases and 4,720 deaths globally. In Italy, on top of a national travel quarantine and ban on public gatherings, their government has now closed all retail businesses except for groceries and pharmacies. This comes as the number of Italian cases rose to 12,500 with 830 deaths. Germany’s Chancellor warned that up to 70% of all Germans (2,080 cases now) could contract the virus. France saw a jump up to 2,300 cases, with Spain (2,280 cases) right behind. Iran is in dire straits as well as they reached 10,100 known cases and 430 deaths. South Korea is up to over 7,870 cases, but relatively few deaths at 66. However, it is worth noting that GS also is now estimating that 80% of Chinese workers have returned to work, albeit with masks and taking extra precautions. This came as China reported only 15 new cases.
Overnight, Asian markets were down hard again across the board. Europe has followed suit with the major bourses down over 6% so far today. As of 7:45 am, U.S. futures are pointing to a 5% gap lower, after having halted trade due to circuit breakers following the President’s speech.
On Thursday, the major economic news is limited to Feb. Core PPI and Weekly Initial Jobless Claims (both at 8:30 am). However, on the earnings front, DG reports before the open and ADBE, AVGO, GPS, ORCL, and ULTA report after the close.
Markets around the world are plunging and being halted Thursday. The President has had his say and that appears to not have been enough. With this said, expect heavy volatility to continue. It is likely something will happen that will jerk the market the other way on at least fleeting hope. That is simply our human emotions in an uncertain environment.
I’ve been saying for a long time now, ask yourself if you really need to be trying to swim this river of volatility? I am not and I remind you that cash is a perfectly valid position. You don’t need to trade every day to have a great year. If you are trading now, get small (nimble), be very fast and stay focused. This is not an easy market to trade. As always, remember, you do not have to pick the bottom to make incredible returns on a market recovery. Say it with me…Don’t chase. Don’t trade on emotions. Don’t think you can predict turns.
Ed
Sorry, but due to market volatility there will be no Swing Trade Ideas 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
