After a will day of volatility where the Dow whipsawed more than
650 points closed the day lower as fear and uncertainty dominate the price
action. Though indexes appear very
oversold in the short-term futures indicate another substantial gap lower this
morning with the CDC announcing our first community spread incident of the
virus. As much as we all want some selling
relief the conditions suggest this could get much worse before it gets
better. Anticipating a bounce with a buy
the dip mentality could prove very dangerous in the days ahead.
Asian markets closed mixed overnight with Japan sinking 2% with the South Korean central bank holding rates unchanged. European markets are decidedly bearish this morning declining more than 2% with the outbreak continuing to spread. Ahead of our biggest day of earnings reports and a busy economic calendar US Future point to Dow gap down of more than 350 points. Expect fast price action, news-driven reversals and intra-day whipsaws to continue as we head into the weekend.
On the Calendar
On the Thursday earnings calendar is the biggest day of
reports this week with more than 325 companies fessing up. Notable reports include AMC, BUD, ADSK, BIDU,
BBY, BYND, CROX, CRON, DELL, DISCA, EOG, EQT, FLIR, FRO, GCI, GNC, IQ, JCP, JD,
KDP, MAIN, MYL, NLSN, NRG, PRGO, RRC, SRE, SWCH, TTD, TD, VMW, WDAY.
Action Plan
Yesterday’s 650 point whipsaw in the Dow shows the market
stress as it struggles to come to grips with the virus impacts. The CDC announced that a woman in California tested
positive for the virus and is now the first community spread case in the US. The news reports on the spread of the virus
around the world are becoming increasingly grim as health agencies struggle to
inhibit the expansion. Companies continue
to warn of substantial financial impacts and uncertain markets continue to fall. Where this ends is anyone’s guess but for now
price volatility will continue to make trading very challenging and traders
should prepare for the fact this could get a lot worse before it gets better.
Technically speaking indexes are oversold but in this
situation market fears could continue to drive the markets lower. I suspect we could soon experience more drawdowns
with mutual fund redemptions and 401 plan holders shifting to money markets to
protect their capital. The cascading
effect can trap traders trying to buy the dip attempting to anticipate an
oversold bounce or relief rally. It will
take a significant time for the daily charts to recover to the point that bullish
patterns can appear. With the high
volatility this is a Day Traders market.
Swing and position traders will find this to be very challenging and
dangerous. Remember that cash is positon
and just because the market is open you should not be compelled to trade it until
conditions improve. Protect your
Capital!
The bears set another bull trap Wednesday. After another gap higher, markets saw follow-through to the upside. By 11am all the major indices were up close to 2%. However, about 11:30am the trap door opened and a selloff lasting the rest of the day ensued. During this selloff, the 10-year Treasury Bond fell to a record low yield (1.3%) as traders flocked to safety. At the close, the SPY was down 0.37%, the DIA down 0.35%, but the QQQ managed to stay green at up 0.52%. All three printed black candles with large upper wicks. However, at the same time, the VXX fell 2% to 18.93. Overall, the recent downturn has taken the indices down about 9-10% from the recent all-time highs.
Coronavirus continues to be the main story and driver of the markets. The headline numbers have now risen to 82,500 confirmed cases and over 2,800 deaths globally. The W.H.O. reported that Wednesday was the first time there were more new cases reported outside China than inside. However, many governments (including China) are suspected of under-reporting cases and deaths. It could also be that the China/World ratio is just indicative of testing outside China finally beginning to ramp up.
Among the major virus news items was the first US case with no known connection to overseas. (This person had not traveled abroad and does not know anyone who has traveled abroad recently. This likely means they contracted the virus from someone else who contracted the virus from a third person who had some connection with one of the early outbreak countries.) Also of importance, is that in Japan the first patient who had fully recovered and tested negative for many days has now tested positive again. So, either reinfection is possible or the best-known tests will give negative readings while the virus is actually still active.
In contrast to widespread public and market concerns, the President was reportedly upset that US markets were down over this issue. He publicly scolded both the press and a CDC official (who told Americans to prepare for disruption to their daily lives) for needlessly spreading fear. Later at his press conference, he said the risk to Americans is very low, his administration’s precautions have been extremely successful, and the US is number one in the world in terms of preparation for a pandemic. However, he did appoint V.P. Pence to act as Czar for the crisis. In a somewhat contradictory fashion, the health professionals who then spoke went on to say that spread in the US is likely although they “hope” to have a treatment regime ready for distribution “sometime soon.” (That potential treatment regime is currently in a one-patient test.)
In terms of impact, more companies (including MSFT) dropped or lowered guidance again overnight. In addition, schools, sports events, and public gatherings have been canceled or outright banned across many nations. The head of China’s Central Bank also said they are “very worried” about the impact on the global economy. Germany’s Health Minister said his country is headed for an epidemic and that quarantine does not seem to be effective. Meanwhile, several other European and Nordic countries (i.e. Austria, Belgium, Croatia, Finland, Netherlands, Norway, Sweden) all reported their first cases. In South America, Brazil also reported its first case.
In an example of the related contradiction/confusion, biotech company MRNA released a statement saying it has already sent a vaccine to the government seeking approval for a human trial. However, at the evening press conference, the head of the N.I.H. vaccine testing said that no vaccine will be ready for human tests until possibly May (late April if we ere lucky) and then would require 12-18 months of testing before proven safe and at least partially effective enough for release. He added that they expect the virus to return next year and he hopes they will have a vaccine ready by then.
$50.00 discount with code: Privilege
Overnight, Asian markets were in the red again. Europe is also down sharply across the board at this point. As of 7:45 am, U.S. futures are pointing to between a 1.3 to 1.7 percent gap lower. So, it looks like a bumpy open, to say the least.
The major economic news for Thursday includes Jan. Durable Goods Orders, Q4 GDP, and Weekly Initial Jobless Claims (all at 8:30 am), Jan. Pending Home Sales (10 am), and a couple more Fed speakers. On the earnings front, BBY, CBRE, DISCA, DISCK, FLIR, NRG, NLSN, PWR, and SRE all report before the Open. Then ADSK, BIDU, CNP, EOG, EIX, MNST, MYP, NKTR, NI, OXY, PRGO, and WDAY report after the close.
The bears are firmly in control and a gap lower looks to be in the cards. However, volatility is high and we will very likely see intraday swings. So, anyone trading now needs to either be fast, able to endure pain and/or hedged. Remember that cash is a perfectly valid position and sometimes the very best position you can take.
Be careful, keep following the trend, listen to price action and trade consistently. Remember Buffett’s number one rule for making a lot of money in the market: 1) Don’t lose a lot of money in the market! Trading is a job and it requires consistent, careful, and effective work…not a gunslinger, get rich quick mentality.
Ed
Swing Trade ideas for your watchlist and consideration: IOVA, CME, NFLX, FLO, BYND, TDOC, LPX, SGRY, NTNX, SIG. 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 CDC warning of a substantial coronavirus breakout
in the US markets extended its losses with the Dow sinking more than 1900
points in the just 2-days. There was
such a demand for the relative safety of treasury bond the 10-year yield fell
to a record low and oil dropped below $50 a barrel. What happens next is anyone’s guess as markets
around the world grapple with the economic uncertainty of this very contagious
outbreak.
Asian markets closed in the red across the board and European
markets continue to sell off this morning.
US Futures have been all over the map this morning facing a big day of
earnings and economic reports. With
trends and key support levels broken we can expect highly volatile price action
to continue as we sort through the wreckage of the last 2-days.
On the Calendar
On the hump day earnings calendar, we have more than 250
companies reporting quarterly results.
Notable reports include LOW, SQ, TDOC, AMCX, APA, BKNG, BOX, CARS, CNVA,
CHK, DAKT, EV, ETSY, STAY, TWNK, SJM, KW, LB, MAR, MNST, NTES, NDLS, ODP, PZZA,
DOC, SEAS, TJX, TCOM, UPWK, VIPS, WB, WEN & WYND.
Action Plan
After a 2-day selloff that dropped the Dow more than 1900
points triggering more market selloffs around the world. With the CDC now expecting a substantial breakout
to occur in the United States 10-year treasury bonds dropped to their lowest levels
in history while oil fell below $50 a barrel.
Travel stocks such as airlines, cruise lines and travel booking company’s
plummetted as did health insurers and health care related stocks. The South Korea outbreak jumped to nearly
1150 confirmed cases and reported 11 deaths.
With possible vaccine’s still months away it would seem this situation
will get significantly worse before it gets better. The uncertainty of the potential economic impacts
is likely to keep the market on edge and volatile in the weeks ahead.
With trends broken and prices slicing through multiple price
support levels all at once traders will find it very difficult to find there
way back into the market with the high risk of news-driven reversals. During the night US Futures whipsawed from triple
points up to triple points down as shellshocked trader’s emotions continue to vacillate. Normally one would assume we have reached a
short-term oversold condition a relief rally is due to begin but this is not a
normal situation and traders should prepare for just about anything. With a huge day of earnings reports and a
couple of key economic reports on the calendar expect highly volatile price action
to challenge even the most experienced traders.
Remember cash is a position and there is no shame in watching from the
sidelines as the uncertainty continues to unfold.
Markets gave us a head fake at the open Tuesday with a half-percent gap higher followed by a minute of momentum that took markets up an additional half percent. However, this was met by a sharp reversal a couple of minutes into the day that turned into a brutal all-day selloff. There is no mistaking the decisive, large-body black candles printed across all the major indices on the day. The SPY closed down 3.05%, the DIA down 3.15%, and the QQQ down 2.72%. As you’d expect the VXX jumped again and is now at 19.38, a level it has not seen since October.
Coronavirus remains the main story as it seems the possibility of economic impacts has just dawned on many traders in the last few days. That said, governments do continue to downplay this story. For example, both China and South Korea “predict” a turning point in the outbreak in their countries this week. Meanwhile, President Trump and his economic advisor Larry Kudlow said again Tuesday that the virus has been well contained in the US and economic growth will not be significantly impacted.
The headline numbers have now risen to 81,250 confirmed cases and about 2,800 deaths globally. Of course, the vast majority of cases have been inside China. However, looking at major economic centers outside China, South Korea now reports more than 1,260 cases, Japan about 200 cases, Germany 20 cases, France 20 cases, the UK 15 cases, and Italy more than 375 cases.
In terms of impact, many major companies have lowered forecasts. This includes key indicators of consumer activity like MA warned they will miss 2020 revenue forecasts by at least 2-3% (even though those original forecasts were published less than a month ago) as a result of the virus. The European Automaker Groupe PSA warned the entire auto industry worldwide is now working with extremely short supplies of parts. In other indications, the Dept. of Health and Human Services said the virus is “likely to cause a global pandemic” and “it’s just a matter of time before the outbreak starts spreading in the US.” The CDC spokesman agreed with that assessment and went so far as to predict disruption to daily lives in the US.
Overnight, Asian markets were all in the red again. Europe is slightly mixed, but shows losses across most, including the 3 major (FTSE, DAX, CAC), bourses at this point. As of 7:45 am, U.S. futures are pointing to a flat open, but they have been very volatile all night.
The major economic news for Wednesday is limited to Jan. New Home Sales (10 am), Crude Oil Inventories (10:30 am), and a couple more Fed speakers. In terms of major earnings reports, SJM, LOW, NI, PEG, and TJX report before the open. ANSS, APA, BMRN, BNKG, CCI, LB, MAR, NTES, FTI, TCOM, and UHS report after the close.
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The bears are firmly in control, but the drop has moved so far, so fast that it certainly looks like chasing to add shorts here, unless you are a very short-term trader. Yes, Asia and Europe continued to slide, but that doesn’t mean we can’t see an up day in a downtrend. Be careful to not let your emotions get the better of you. No revenge trading. No chasing. No reversal picking. Keep that discipline.
Remember that cash and sitting on your hands is a valid position and sometimes the best move you can make. Be cautious, follow the trend, listen to price action and trade consistently. Keep reminding yourself, trading is a job/business and sometimes, calling in sick for a couple of days is the only way to avoid burnout.
Ed
Sorry, but there are no trade ideas for today. Markets need to settle before we can plan out quality swing trades. 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
In one fell swoop virus fears wiped out 2020 market gains
with the biggest day of price volatility the market has experienced in a very
long time. Though it may have been an
overreaction the growing uncertainty of coming economic impacts is likely to
keep the market on edge and price volatility very challenging for the near
future. We should expect very fast price
action, news-driven intra-day reversals and whipsaws as the market grapples with
not only the virus fall-out but the rising candidacy of Birnie Sanders.
Asian markets closed mixed but mostly lower with Japan plunging
more than 3% overnight. European markets
are once again negative across the board after a turbulent day of selling on
Monday. US Futures have been all over
the map in the last 12 hours as they try to sort out what comes next. However, with some positive earning reports
the bulls have found some inspiration and currently point to bullish open.
On the Calendar
On the Tuesday earnings calendar, we have nearly 200
companies fessing up to quarterly results.
Notable reports include SPCE, ALRM, AMRN, AMT, AGR, BGS, BMO, BNS, BCC,
CZR, CSGP, CBRL, FRPT, GWPH, HD, TREE, LL, M, MNK, MANU, PLNT, PBPB, PSA, RLGY,
RRGB, RHP, CRM, SDC, REAL, TRI, TOL, TUP, WWW & WW.
Action Plan
Yesterday selling wiped out this year’s gains in one fell swoop
in reaction to the potential economic impacts of the spreading virus outbreak which
has now reached 22 countries. As the
number of infections seems to be in decline in China, outbreaks in Italy, Iran
and a rapidly expanding infections in South Korea have investors on edge. Oil prices fell sharply on Monday as world
demand continues to decline with factory closures and massive travel restrictions
extend. Another area hit hard yesterday was
the healthcare and insurance sector with investors reacting negatively as
Birnie Sanders gains traction in his campaign.
A spreading virus and a socialist agenda combined energized the bears spiking
price volatility making a very dangerous trading condition at least for the
short-term.
After the bell the futures market tried to bounce back
sharply but the pressure of the markets around the world continuing to slip south
those early gains eroded during the night.
However, with a big day of earnings reports futures markets are once
again trying to rebound now pointing to modest gains at the open. That said, the pre-market price action is very
volatile and traders should prepare for just about anything with a market
highly emotional and growing uncertainty.
This is not a market for inexperienced traders! Even very experienced traders may find today’s
price action very challenging with very quick reversals and whipsaws as virus news
continues to roll out. If you do decide
to trade it may be wise to consider smaller than normal positions and as always
plan your risk carefully.
US markets followed the rest of the world lower on Monday. The day started with a large gap lower and then volatility reigned as all three indices printed large-wick, indecisive candles. The SPY ended down 3.32%, the DIA down 3.51% (1031 points), and the QQQ down 3.86%. These losses caused the SPY and DIA to give up all their gains since the end of November. In the process, all three indices also gave up some support levels, although the QQQ was able to hold on to its 50sma. As you’d expect, the VXX spiked to 17.67 and the T2122 plummeted into oversold territory at 5.15.
Most voices among analysts and financial journalism are expecting this bearish move to continue. It seems that all the bad news (especially the coronavirus) that the bulls have been ignoring has suddenly caught their attention. As a result, a full flight to safety is on with Gold at levels it has not seen since 2013 and Bonds at all-time highs (extremely low yield). With that said, any continued move lower does not have to happen Tuesday. A dead-cat bounce is possible, if not probable, after a 3-4% single-day drop.
On the coronavirus front, the headline numbers are now 81,000 confirmed cases and more than 2,700 deaths. As of Tuesday, in addition to China and South Korea (1,000 cases), now major portions of Northern Italy (300 cases) are under quarantine. There has also been an expansion in cases in the middle east, with Iran, Kuwait, Egypt, Lebanon, and UAE all reporting cases. In addition, after the close, MA said they are lowering their 2020 revenue forecasts 2-3% from the levels announced on its January 29 conference call. UAL also withdrew its 2020 forecast, again citing the virus impacts.
Overnight, Asian markets were mixed, but Japan taking a major hit as the NIKKEI (-3.34% on Tuesday) was closed Monday for a holiday. For the second straight day, Europe is bright red across the board at this point. As of 7:45 am, U.S. futures are pointing toward a bounce-back Tuesday as all three major indices are looking at an open half to one percent higher.
The major economic news for Tuesday is limited to the Conf. Board Consumer Confidence (10 am) and a couple of FOMC speakers during the day. In terms of major earnings reports, AEE, AMT, HD, and M all report before the open. Meanwhile, CSGP, CRM, MATX, and PSA report after the close.
Once again, the bears had control yesterday. That makes three days in a row, which was a first going all the way back to the end of November. More companies are decrying the impact of the coronavirus on their operations or sales every day. This means the bears are likely to maintain control, in general, at least until markets have repriced to reflect a large drop in earnings. However, we know markets don’t tend to move in straight lines for long. So, expect more volatility, including up days in the downtrend.
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Don’t let your emotions get the better of you. No revenge trading! The market doesn’t owe you a damn thing and chasing to get back to even fast is likely to see you buy just before another reversal lower. Also, bear in mind that volatile markets mean traders need to be quick or hedged if they don’t want to endure serious pain. Believe me, I’ve been there and taken those beatings.
I know it’s boring and you are tired of hearing us say it. However, don’t try to lead the chart. Follow the trend, listen to price action and trade consistently or Mr. Market will punish you. Trading the same pattern over and over, taking profits for base hits and consistently moving your stops is how successful traders work…regardless of how boring you might think that sounds. Keep reminding yourself, trading is a job/business. It is not a lottery ticket.
Ed
Swing Trade ideas for your watchlist and consideration: BMY, TDOC, GDOT, BBY, PETS, DOV, RH, PRVB. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
|607% in just 24 months |
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
The ability to ignore the impacts of the virus impacts shifted
to pure panic over the weekend with world markets selling off dramatically. A
common reaction for traders is to join in the panic or assume its an over-reaction
and rush in to buy the dip. Today we
should expect violent whipsaws in the stock and index prices, creating very dangerous
conditions for even the most experienced traders. The emotional price swings may not respect
price support and resistance levels. Stay
calm, protect your capital and avoid revenge trading.
Asian markets closed down across the board overnight and
European markets are sharply lower with the outbreak spreading across Italy. Although we have a big day of earnings
reports the market has now turned its attention to economic impacts and the
fear of its rapid spread around the world.
Today is a day to exercise discipline, follow your rules, staying calm
and focused on avoiding emotional-charged decisions.
On the Calendar
On the Monday earnings calendar, we have more than 130
companies reporting quarterly results. Notable
earnings include AWR, CTB, DDS, DIN, EPR, HTZ, HPQ, INTU, KTOS, OKE, PANW,
APTS, RCII, SHAK, & THC.
Action Plan
Friday’s price action raised red flags as the bears became
more aggressive, heading into the uncertainty of the weekend. Warning signs continue to grow as safe haven plays
such as GLS, SLV, XLU & defensive sector stocks rallied sharply. With news over the weekend that the virus
outbreak has spread to 22 countries, fear has quickly shifted to panic overnight
as world markets drop dramatically. With
oil demand continuing to fall, there is speculation that per barrel oil prices could
quickly decline sharply lower. During
the night, Dow futures fell more than 800 points but are currently trying to bounce
off of those lows though continue to point to painful losses this morning.
Although I sounded like a broken record with daily warnings
to not over-trade such an extended market. A market that was choosing to ignore
economic impacts turned out to have been the right thing to do. Today will be a very emotional market
reaction and a very dangerous day of violent price action and high volatility. Try not to panic and avoid emotional-based
decisions. Expect substantial intra-day whipsaws
in the market that may not hold at support and resistance levels. This kind of panic environment is dangerous
to trade for even the most experienced traders.
Protecting your capital is the best course of action and don’t get
caught up in the buy the dip crowd or revenge trading because the impact of
this outbreak is likely to be far-reaching.
On Friday, concerns over coronavirus spread led to a rough day on Wall Street. The major indices all gapped lower and saw follow-through as the bears were in control most of the day. At the close, the SPY was down 1.03%, the DIA down 1.04%, and the QQQ down 1.92%. The VXX climbed on the day but closed back below 15 while the T2122 remains in the mid-range. None of the 10 sectors were in the green, but Technology, Consumer Cyclical, and Energy took by far the worst beatings. This all gave us the first Weekly black candle in the QQQ since November.
However, it is worth noting that the bulls did push markets up off the lows during the last half hour. So, the 50sma held in the DIA and potential support levels held in the SPY and QQQ. The point is that we were extended to start and due for some pullback. However, we didn’t see a lot of bulls jumping out of windows and we are still within about three percent of all-time highs.
After the close Friday, it was announced that WFC had agreed to pay $3 billion in a settlement with the Federal government to avoid criminal charges over their decade-long fraudulent sales practices. GOOGL also reached a settlement with all 50 state attorneys general to allow outside consultants to dig into Google business practices (as part of an anti-trust investigation), but force some confidentiality agreements on the consultants. This will pave the way for the antitrust investigation to proceed.
Over the weekend the coronavirus outbreak continued. The count is now at 80,000 confirmed cases and 2,600 deaths attributed to the virus. However, these numbers are suspect as China has revised the methods they use to count cases three times since the original report. In addition, both the Chinese and some other governments are still downplaying the impact. For example, at the G20 Summit, the I.M.F. said the outbreak would only trim 0.1% off their global growth forecast. China went so far as to urge businesses to reopen and ease restrictions on travel in Wuhan. (The easing of travel lasted less than three hours before they had to lock things down again.)
However, the W.H.O. is reporting an alarming jump in cases outside of China. For example, South Korea saw exponential growth in cases this weekend, with a 20-fold increase to over 750 cases and 12 deaths as of Sunday night. Iran and Italy have also seen outbreaks. The Italian outbreak (160 confirmed cases) has seen Austria close its border with Italy…and both are inside the EU. The same is true for Iran (61 cases and 12 deaths) with Turkey closing its Iranian border. Ominously, the W.H.O. says the Iranian cases are a particular concern because their cases come from different areas of Iran and all from people with no direct connections to China.
Overnight, Asian markets were red across the board, with South Korea (-3.87%) and Australia (-2.25%) taking major hits. Europe is also bright red from end to end so far, with all the major bourses down well over 3.5% at this point. As of 7:30 am, U.S. futures are also pointing toward a large gap lower of between one and two percent in the major indices.
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There is no major economic news scheduled for Monday. On the earnings front, there are no major reports before the open. However, HPQ, INTU, KEYS, and OKE all report after the close.
The bears did create some follow-through on Friday, but the bulls didn’t throw in the towel. However, the spread of the virus impacts far beyond Chinese borders may finally be negativity that the bulls cannot ignore. The weekend business and especially virus news are heavily in the bear’s favor. So, we remain not too far from all-time highs, but it looks like a very rocky morning coming up for the bulls.
Unless you are extremely quick, nimble and experienced, this market is not the river you should be trying to swim. Manage the trades you are in and think twice about chasing anything in such a volatile market. Use caution. Take profits and keep moving stops. Remember that sitting on your hands can sometimes be the best move you can make. Whatever you do, DO NOT CHASEand don’t lose your discipline. Our job is to just rack up consistent gains, not find winning lottery tickets.
Ed
Due to market conditions this morning, there will be no trade ideas today. Manage the trades you are in now. 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 an ugly whipsaw in price action, the bears reminded us yesterday
they are still here, and like it or not, this rally will not go up
forever. A rude awakening for traders
overtrading or chasing already extended stocks.
Overnight we learned of outbreaks in China prison populations, South
Korea and Iran, while Japan extended business closures. As we head into the weekend, it will be
interesting to see if the uncertainty will bring out the profit-takers or if
bulls will continue to buy despite the economic warnings. No matter which side wins the day, I suspect
price volatility will add significant complexity to the decisions ahead.
With new outbreaks in both men and women prison populations,
Asian markets closed the week mixed but mostly lower. European markets are improving as the morning
goes on but are modestly in the red across the board. US Futures are also coming off morning lows
ahead of economic and earnings reports but continue to point to a modestly
bearish open. Plan your rick into the uncertainty
of the weekend very carefully as the economic impacts continue to grow.
On the Calendar
On the Friday earnings calendar, we get a little break with less
than 60 companies reporting quarterly results.
Notable reports include B, CNK, DE, ERF, MGA, RY & WPC.
Action Plan
A wild day of price action yesterday gapping lower on after
a warning from Goldman but quickly rallying back up to price resistance. After banging against the resistance several
times, the bears launched a strong attack with the Dow plunging more than 300
points, then reversing once again trimming losses to just 128 Dow points. A guy could get whiplash with that kind of
price action! During the night virus fears
seemed to grow as Japan extended business closures and outbreaks expanded in South
Korea and Iran. Hundreds of new
confirmed cases were reported in China last night with an outbreak in prison
populations of both men and women.
The big recovery yesterday left behind a bunch of Hammer
Candle Patterns at or near price support levels, likely adding hope of a rally
for today. Unfortunately, fears of new
outbreaks have markets around the world under some selling pressure this morning. It will be interesting to see if the uncertainty
of the weekend will inspire the bears to reengage or if the bulls will continue
to have the willingness to ignore the future economic impacts. Although redundant, I will continue to warn about
overtrading and to plan your risk carefully heading into the weekend. Yesterday’s wild price action may have been a
warning shot over the bow that more volatility is close at hand.
After a mild open, there was a sharp and strong selloff in the late morning. Some sellers may have been reacting to a rumor of a spike in coronavirus cases in Beijing (away from Wuhan). Regardless of the cause, this spike downward put the bears in control for the day. However, as usual, the bulls spent the rest of the day slowly and steadily working to recover. That whipping action took its toll on many traders.
At day end, the SPY was down 0.41%, the DIA down 0.45%, and the QQQ down 0.93%. All three major indices printed indecisive candles with large lower wicks. While the VXX remains very low (essentially no market fear), at 14.04, Gold and Bonds were both higher on risk-haven trades.
In coronavirus news, the headline numbers are now 77,000 confirmed cases and 2,250 deaths. (Beware the numbers as there was a third round of debate and change in China’s reporting methods overnight.) While that rumor of a spike in cases in the Chinese Capital was unconfirmed, there definitely has been an outbreak in South Korea, which has now placed two provinces under “special authority” due to health emergencies and also reported its first death. Japan also reported two deaths and growth in the number of new cases. Iran also reports an outbreak with 13 deaths, over 500 confirmed cases, and their national health agency said it is likely the virus now exists in all major Iranian cities. Still, the vast majority of cases remain in China.
However, the W.H.O. held a news Conference Thursday to say that while this is true now, it may not be the case for long. They also called for more global funding to fight the disease. In addition, they cast more doubt on Chinese data by flat-out saying that most of the “new” cases and deaths being reported daily are actually days to weeks old.
Overnight, Asian markets were mixed but mostly in the red. Europe is also mixed, but may be leaning just a little to the green side at this point. As of 7:45 am, U.S. futures are also pointing toward a lower open by three-tenths of a percent in the major indices.
Friday’s major economic news includes Feb. Mfg. PMI and Feb. Services PMI (both at 9:45 am), Jan. Existing Home Sales (10 am), and four Fed speakers throughout the day. The only major earnings on the day are DE and PNW, both before the open.
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While there was a brief pounce by the bears mid-day Thursday, the bulls refused to give ground easily. So, we remain very near all-time highs, but showing some signs of consolidation or even an early glimpse of pullback. However, so far at least, it hasn’t paid for those who bet against the bulls and the trend still remains bullish.
Remember that Friday is payday. So, take profits and keep moving those stops. It pays to plan the trade and trade the plan. Don’t chase or get complacent and let a profitable position head South. Do not forget that as traders, our job is to keep racking up base hits.
Ed
No Trade Ideas for Friday. It’s payday, so take some profits and make sure you are set for weekend headline risk. 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
