Setting and Moving Stops
President: More Tariffs, Need Neg. Rates and Weak Dollar
After the Thanksgiving holiday, stocks spent the half-day Friday grinding a bit lower. The SPY and DIA closed down about 0.35%, while the QQQ closed just under half a percent in the red. This leaves markets very near the all-time highs and still a bit extended from both the T-line and 50sma. However, T2122 has fallen back into its mid-range. So, we are at these highs on less participation recently. Meanwhile, the VXX continues to show very little fear in the market.
In economic news, “Black Friday” was a rousing success as US shoppers spent a record amount for that day ($7.4 billion). Top Retail analysts are also predicting an even bigger “Cyber Monday” (with sales of $9.4 billion forecast). However, even though these are record sales in the US, we should keep this in perspective. Earlier in the month, BABA alone pulled in $38 billion of sales on “Singles Day” (their self-invented Anti-Valentine’s Day)…and that’s just one Chinese online retailer.
Related to the Trade War, the official paper of the Chinese Communist Party posted a tweet on Saturday. The tweet said that a US Pledge to scrap new tariffs (12/15) is not an acceptable replacement for rolling back existing tariffs. In addition, China has suspended US military “Port Visits” to Hong Kong and placed sanctions on US-based NGOs. (Over American Pro-Hong Kong Freedom legislation.) Not to be outdone, President Trump took to twitter again late-night placing tariffs on South American Steel and Aluminum, as well as criticizing the US Fed again and demanding that they abandon decades of pro-trade strategy to lower rates and devalue the dollar. (The King of Debt loves him some negative rates and cheap dollars.)
In other political news, CNBC reported over the weekend that President Trump is again working with Capitol Hill Republicans toward another Tax Cut bill. The aim of this new tax cut would be reducing the 22% top individual rate down to 15%. There was no mention at all, not a peep, about any corresponding spending cuts. Apparently, deficits aren’t a real thing in an election year. In addition, other tax brackets were not being addressed at this point. Even so, analysts say this would result in roughly $800 billion in tax reductions by 2025.
Major economic news for Monday is limited to Nov. ISM Mfg. PMI (10 am). In fact, this will be a light week for economic news until Friday. The same is true of earnings, with no earnings of note Monday and only a handful the rest of the week.
Overnight, Asian markets were mixed, but mostly in the green. In Europe, the major markets are mostly in the red at this point. As of 7:30 am, U.S. futures are all pointing to a small gap higher of between a quarter and a third of a percent.
Traders should all be back after an extended weekend break. Typically, coming back off a holiday leads to some selling. However, the bulls have been running hard in November, Black Friday had record sales and there is no scheduled Earnings or Economic News to bring things down. So, the bulls may well be ready to resume their run.
Either way, remember we are swing traders. So, continue to lock-in profits, move stops, and trade your plan. Remember that your job is to make consistent gains and reduce risk, not to hit home runs every once in a while.
Ed
Swing Trade Ideas for your watchlist and consideration. Long – NRG, APH, WFC, GILD, AES, DHI, CNC, KLAC, ENTG, MTZ. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 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.
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
Manufacturing focus
After a bearish short session on Friday, the bulls are trying to spark a rally this morning ahead of the PMI and ISM manufacturing reports. According to reports, the US consumer showed their confidence with an increase of 20% in Black Friday sales and an expectation that Cyber Monday could hit new record spending levels. That’s good for the economy but may prove to problematic for the market today with low volume as distracted traders search for online deals.
Asian markets were green across the board overnight fueled on better than expected Chinese manufacturing numbers. Unfortunately, the European markets are flat with mixed results as their manufacturing once again shrink. US Futures have pulled back from overnight highs as we wait on US Mfg reports at 9:45 and 10:00 AM Eastern. With Dec. 15th tariffs quickly approaching and China threatening retaliation for the bill supporting a Democratic Hong Kong, the path forward may have some new obstacles to overcome. As always, stay focused on price action for clues.
On the Calendar
On the Monday Earnings Calendar, we have a light day with just 15 companies reporting as trading resumes after the Holiday. There are no particularly notable reports today.
Action Plan
The market reacted negatively in the low volume, short session, Friday after the President signed the bill supporting the Hong Kong protesters. The December 15th tariffs now come into focus as trade negotiations stall, and China threatens retaliation. On a positive note, holiday deal shoppers were out in force with Black Friday sales up 20% according to reports. Retail is expecting today, Cyber Monday, to set new sales records as consumers show signs of ramping up their holiday online shopping.
Positive Chinese manufacturing data helped to boost overnight markets, but Euro Zone manufacturing activity once again declined tempering this morning’s bullishness. This morning at 9:45 and 10:00, we will hear find out how US Manufacturing measures up with the PMI & ISM reports. Consensus estimates look favorable. Don’t be surprised if volume quickly declines after the morning rush with traders extending holiday vacations and distractions from Cyber Monday shopping.
Trade Wisely,
Doug
Positive Comments on Trade
The President’s positive comments on the Phase 1 trade agreement has once again inspired the bulls to continue to reach out for new highs. The earnings miss by DE has dampened the overnight bullishness, but with a big morning of market-moving economic reports that are expected to be positive according to consensus, all signs point higher. Typically, after the morning rush of activity, the volume will quickly diminish as traders set-out to begin their holiday celebrations. Plan accordingly.
Asian markets closed mixed but mostly higher with high hopes news of a completed trade deal will be forthcoming. European are green across the board this morning in response to the favorable trade comments by President Trump. US Futures point to modest gains at the open after setting new records for the 10th time this month.
On the Calendar
On the pre-holiday Earnings Calendar, we have 21 companies reporting quarterly results. Notable reports include DE & DAKT, both reporting before the bell today.
Action Plan
President Trump has once again inspired the market this morning suggesting they are very close to completing the Phase 1 trade deal. However, he also said they want to see a democratic outcome in Hong Kong, which many see as a major obstacle to Chinese support. Yesterday, we saw record highs for the 10th time in the last 30 days. Clearly, the bulls are in control, and the trend remains very strong.
Although we have a rather light day on the earnings calendar we have a very busy morning on the economic calendar with several potential market-moving reports. The consensus estimates of these reports are all positive, so only a major surprise seems capable of derailing this relentless bull. Keep in mind that volume is likely to decline very quickly after the morning rush as traders head out for their holiday plans. Although the market is open for short a session on Friday, the HRC and RWO trading rooms will remain closed until Monday Dec. 2nd. I wish you all a very Happy Thanksgiving!
Trade Wisely,
Doug
Assumed Deal – No Fear
Markets drifted mildly higher all day on Tuesday on relatively low volume. This allowed the SPY, DIA, and QQQ all to close at another all-time high. So all-in-all it was a very blah day in the market. That said, we remain extended and the VXX continues to be in “dangerously complacent” territory.
In economic news, the President said Tuesday that trade talks “are in the final throes of a very important (Phase One) deal.” This came after the Chinese had announced the previous night that a phone call had been held between chief negotiators. Markets did not react to President Trump’s statement. (Perhaps this was because of the prior overnight announcement or maybe just fatigue of posturing around such a deal.)
On other fronts, the FAA has said again that the BA 737 Max is not ready for recertification (and that it will take all the time needed to reevaluate the plane). This statement completely contradicts BA claims that it will resume deliveries of the 737 Max in December. In fact, the FAA said the Max won’t even make its recertification flight until mid-December and recertification may well take through the end of January. (I’m not sure how BA plans to deliver planes if they cannot fly them to the customers.) This news might have an impact on BA stock.
Major economic news for Wednesday includes Oct. Durable Goods, Q3 GDP, and Weekly Jobless Claims (all at 8:30am). This is followed by Oct. Pending Home sales and Crude Oil Inventories (both at 10 am). The only earnings of note are DE, who report before the Open.
Overnight, Asian markets were in the green. In Europe, the major markets are also in the green at this point. As of 7:30 am, U.S. futures are all pointing to a gap higher of between a quarter and a third of a percent.
While there is a fair amount of economic news today, it’s quite possible that many traders have already called it a week going into the holiday. Even if this is not the case in the morning, expect light volumes in the afternoon. The point is that it is quite possible we see another low-volume blah day in the markets.
Even so, the bulls have really been relishing their all-time highs. So, we may move higher, even on lower volume. As always, continue to lock-in profits, move stops, and trade your plan. Remember that your job is to make consistent gains and reduce risk, not to hit home runs every once in a while.
Ed
Sorry, no Swing Trade Ideas for your watchlist today as trading should be light before Thanksgiving. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 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.
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
Bulls Inspired
With the bulls inspired by Hong Kong election results, renewed trade hopes, and a huge day merger news made setting new record highs in the DIA, SPY,and QQQ look easy as they quickly recovered last week’s pullback. Today, the attention will likely shift to earnings and economic reports to find inspiration. After such a big move yesterday and heading toward a major holiday. It will be interesting to see if bulls can find the energy to continue their relentless march higher.
Asian markets closed mixed but modestly higher with Alibaba making a huge splash in Hong Kong markets. European markets are treading cautiously with mixed results as they continue to monitor US/China trade news. US Futures are rather subdued this morning ahead of earnings reports and several potential market-moving economic reports. With markets at new record highs consider your risk carefully as the holiday shutdown approaches.
On the Calendar
On the Tuesday Earnings Calendar nearly 50 companies reporting results. Notable reports include BBY, ADSK, BNS, BOX, CHS, CBRL, DELL, DKS, DLTR, EV, GES, HRL, HPQ, MOV, VEEV, and VMW.
Action Plan
Monday became on the biggest merger days in history, providing additional energy to an already bullish sentiment setting new records in the DIA, SPY, and QQQ in the process. T2122 suggests this bull run still has some upside potential but could soon reach a short-term overbought condition if the bulls continue to find inspiration to rally. Earnings reports could provide that inspiration, or perhaps it will be the New Home Sales and Consumer Confidence reports at 10:00 AM Eastern. One thing for sure is that the bulls remain firmly in control of a trend that shows no price action clues of ending at this point.
Futures markets seem much more subdued this morning, perhaps needed a little rest after such a big effort yesterday. It is also possible with the Holiday looming and the nasty weather conditions moving across the country that traders will try and escape early. Don’t be too surprised if volumes begin to decline quickly with price action becoming very light and choppy after the morning rush Wednesday. As we push new market highs, plan your risk carefully heading into the holiday.
Trade Wisely,
Doug
Phone Call Rally?
The bulls ran hard the first hour of the day Monday (on optimism stemming from hope on the trade war front and merger news). After 10:30 am, markets drifted sideways the rest of the day. The indices closed near their highs for the day. The end result was another all-time high close in the SPY, DIA, and QQQ. Even the IWM had a very strong day, breaking out of its range going all the way back to March and (unlike the other indices) it did so on heavy volume.
If there was anything bad on the day, it was that the bullish surge took the T2122 indicator back up well into the overbought area at 88. (T2122 is a 4-week New High to New Low Ratio that has a 0-100 range with over 80 meaning over-bought.) Likewise, all the indices remain extended from their 50-day SMA.
On the news front, overnight China’s top trade negotiator had a phone call with Sec. of Treasury Mnuchin to “address the core issues” last night. This is another signal of progress toward a trade deal and the market is quite likely to take this as bullish. However, in reality, this proves nothing as far as an actual deal goes.
In other news, Congressional Democrats say they expect to deliver their Impeachment report shortly after the Thanksgiving break. However, the door was left open for more hearings and last night a Federal Judge ruled that former White House Counsel McGahn must testify (a decision sure to be appealed). This all could lead to a House Impeachment vote (essentially indictment) before the Christmas break. The process (actual trial) would then be in the hands of the Senate and presided over by Chief Justice Roberts at that point.
Major economic news for Tuesday is limited to Conf. Board Consumer Confidence and Oct. New Home Sales (both at 10 am). In terms of earnings, ADI, BBY, DLTR, and HRL all report before the bell. (BBY reported a beat and raised forecasts.) After the close, ADSK, HPQ, and KEYS all report.
Overnight, Asian markets were mixed but mostly green. In contrast, European markets are mixed but mostly red at this point. As of 7:30 am, U.S. futures are all just on the green side of flat.
With the holiday coming and the most important economic news coming later in the week, it is quite possible Tuesday is a low-volume blah day in markets. Still, bulls have been hearing only what they want to hear lately. So, that phone call report may set off another rally. Regardless, be careful, as low volume is likely to magnify market over-reactions. Just remember that in the longer-term the market trend is bullish. Continue to take profits, move stops, and trade your plan. Keep in mind that a Trader’s job is to consistently make gains, not to hit home runs every once in a while.
Ed
Swing Trade Ideas for your watchlist and consideration. Long – DXC, AMG, NTAP, CXO, HAL, CBS, ARNC, DVA, CDW, ANTM, CTL. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 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.
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
Short Trading Week
Friday was a low-volume, indecisive, green day across the markets. Expectations for a low-volume holiday week ahead and the desire to avoid weekend headline risk may well have led to this blah day. In any case, the SPY, DIA, and QQQ all appeared to be curling up after a three-day pullback. Likewise, T2122 rose back to mid-range. So, on a small green day, we started to see broader participation in the rally of the last nearly two months.
On the Trade War front, over the weekend the two Presidents continued to “talk past each other” as reported by Bloomberg. However, China did announce guidelines that it will increase penalties for violations of Intellectual Property rights, as part of an effort to “reduce frequent IP violations by 2022.” However, no details were released nor any mention made of state-sponsored or owned organizations (which are by far the biggest concerns in the IP theft arena). This was seen as an olive branch toward the Trump Administration who will be able to claim it as a trade war win.
In Hong Kong, the pro-Democracy Party has won a huge victory in the “District Council” elections on the heaviest voter turnout ever. Results showed the Pro-Democracy party winning nearly 10 times the number of seats that the Pro-Beijing Party won. However, this will have no impact on actual governance in Hong Kong, as both the “Legislative Council” and Government Offices (who actually make and enforce laws) are essentially Beijing-controlled. Nonetheless, this result may send a message to the Mainland and might cause a rethinking of their approach.
There is no major economic news for Monday. The only earnings report of note before the bell is from JEC. However, in merger news, Swiss pharmaceutical giant Novartis agreed to buy MDCO. Meanwhile, overnight, Asian markets were mixed but mostly green. In Europe, all markets are almost all in the green as well at this point. As of 7:30 am, U.S. futures are pointing to a small gap higher.
We have the holiday coming this week and very little scheduled market-moving news. It is quite possible that we just drift, at least until next week when the initial Black Friday and Cyber Monday sales reports will be available. If we do get unexpected news this week, be careful, as low volume is likely to magnify the typical market over-reaction.
So, remember that in the longer-term the market is bullish. Continue to take profits, move stops, and trade your plan. Keep in mind that a Trader’s job is to consistently make gains, not to hit home runs every once in a while.
Ed
Swing Trade Ideas for your watchlist and consideration. Long – X, ADT, STT, BAC, DIS, NTAP, CTL, DXC, BIDU, PWR, FEYE. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 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.
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
The Trade War Pendulum
The pendulum of the Phase 1 deal that has swing somewhat bearish heading into the weekend has this morning swing back to the bullish side, helping to inspire a Monday morning gap. The bulls got an early start after news that pro-democracy candidates won big in Hong Kong. The pullback last week that held trading sets up a great opportunity if the bulls can remain inspired to attack all-time market highs as we head into the Thanksgiving Holiday.
Asian markets rallied substantially overnight in reaction to Hong Kong election results. European markets are also green across the board this morning on renewed US-China trade hopes. US Futures opened bullishly and remained strong throughout the night, currently pointing to gap up opens across all indexes. Perhaps Santa can begin his run early this year fueled by strong consumer sentiment.
On the Calendar
On the Monday earnings calendar we have 31 companies stepping up to report. Notable reports include PANW, A, AMBA, HPE, NTNX, & PVH.
Action Plan
Trade uncertainty dimmed Friday bullishness, but they have spun the story once again, and this morning, the bulls are pushing for a higher open. Pro-democracy candidates won big in the elections on Sunday in Hong Kong with a record voter turnout. A major step for the people of Hong Kong but they still have an uphill fight with the Beijing control of top leadership.
With the short holiday week, we still have several notable earnings reports Monday & Tuesday and a busy economic calendar through Wednesday. However, expect volumes to decline quickly by mid-week and remain relatively low until Dec. 3rd as traders extend their Thanksgiving vacations. That being said the market indexes appear setup to attack new record highs as long as sentiment on the Phase 1 agreement remains positive. Last week’s strong consumer reading suggests Santa could have a nice run this year.
Trade Wisley,
Doug
The Week Ahead – 11-24-19
