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Markets continued to rest Wednesday, after a mid-day scare as it was announced that the supposed November signing of a phase-one partial trade deal with China has slipped until December (maybe) and would be signed some (undetermined) place in Europe. (This follows on the previous day’s reports that China is pushing for tariff roll-backs, not just the lack of new tariffs, before they sign a phase-one deal.) That revelation caused a temporary drop in markets at 11:45 am, but we recovered by day end.

After-hours, ANSS, ATO, DVN, FISV, FLT, FOXA, HOLX, MRO, NKTR, and QCOM all reported beats. Meanwhile, ALB, CTL, EOG, EVRG, EXPE, TRIP, and WYNN reported misses. However, last night’s big news was an Official Chinese announcement that they have agreed with the US to simultaneously remove existing tariffs in phases and that this had been a stumbling block to the phase-one partial deal. Futures soared on this official report.

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Thursday’s economic calendar is limited to Jobless Claims (8:30 am) and a couple more Fed speakers. However, again earnings will likely have the most sway again as APD, ABC, CAH, CNP, DISCA, HII, JCI, NRG, NLCN, NBL, NCLH, PNW, RL, WRK, and ZTS are among those reporting before the bell.

Overnight, Asian markets were all in the green. In Europe, markets are mostly green at this point. As of 7:30 am, U.S. futures were green, looking for about 0.40%-0.50%. Again, trade deal optimism has spread fast.

While we’ve rested after the break to new highs, China trade deal optimism is likely to put new energy into the bulls. Just bear in mind that earnings have been mixed the last couple days and reports say that on average future earnings forecasts have reached the lowest level of growth in years with an expected increase of +1% for next quarter. In addition, there may well be more twists in the Trade Deal story and we still have some earnings left that may dampen moods. So, remember to be cautious and continue to take profits and move stops.

Swing-Trade Trade ideas for your consideration. Long – GPC, IPG, SNA, K, MHK, CMI, PCAR, STX, VLO, ALK, ROL, KSU, KEY, OLLI. Short – EFX, MLM, LMT, NOC, VMC. 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.

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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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A Trader’s Job

November 6, 2019 by Ed Carter

A bit winded?

November 6, 2019 by Doug Campbell

Though the indexes have inked new records, the price action indicates the bull may be a bit winded after such a big bullish run. A little consolidation or slight pullback to test new supports and allowing time for the key averages to catch up could be just what it needs to set up the next leg higher. There may be some concern as well; the Phase 1 trade deal is already priced into the market before we even know what it does or does not include. Between Wednesday and Friday, we have more than 1000 earnings reports for the market to digest as well, so traders should remain flexible and focused on price action clues.

Asian markets traded cautiously as they closely watch the Phase 1 trade developments. European markets are also timid this morning trading flat to slightly bullish this morning. US Futures were flat to slightly bearish most are again getting the morning pump up ahead of a big round of earnings that are now pointing to a modest gap up open. Let’s hope today we can see some follow-through rather than the sideways chop after the institutional gap we’ve experienced in the last 2-days.

On the Calendar

On the hump day earnings calendar, we have over 430 companies’ results. Notable reports include UPWK, ALB, UHAL, ANGI, BIDU, GOLD, BLMN, CRCM, CARS, CVNA, FUN, CTL, COTY, CVS, ELF, ET, EOG, EXPE, STAY, FISV, FIT, FLO, FOSL, GLUU, GDDY, TWNK, HUM, IAC, IQ, KGC, LL, MRO, NYT, ODP, PAAS, PZZA, PRGO, QCOM, RCII, SMG, SQ, TRIP, VVV, VER, WEN, & WLH.

Action Plan

Ahead of a very big day of earnings, futures are taking a wait and see approach. Most of the evening, they were flat to slightly lower have been slowly creeping up as we wait for results. After inking new record highs in the Dow yesterday, perhaps the futures are indicating we need a rest to confirm new levels of support and allow the key averages time to close the distance with the price. Pensiveness could also be due to the Phase 1 trade deal and concerns that it’s already completely priced into the market.

Technically speaking, the bulls remain in control, but the averages do appear to be a little too far ahead of their 50-day averages. Should a slight pullback or consolidation occur, I think that could be very bullish for the market as long as the new support levels prove strong enough to hold. With more than 1000 earnings reports between today and the end of the week, anything is possible, but so far this earnings session, the results favor the bulls.

Trade Wisely,

Doug

Taking a Rest at the Highs?

November 6, 2019 by Rick Saddler

Traders seemed to love the trade news ahead of Tuesday’s market hours. President Xi Jinping had said China will work to lower tariffs and stabilize international trade. As a result, markets gapped mildly higher at the Open. However, from there it was an indecisive day ending in some form of Doji across all major US indices. The trading at the all-time highs is not a bad sign. Markets are extended and need a rest or pullback. At this point, we are seeing more indecision then signs of a sell-off.

During the day Tuesday WBA soared again (as it had the prior 2 days), but then crashed back at day end. This on news of the company investigating taking itself private. (Based on the prior two days of gains, it makes you wonder if someone perhaps leaked that news to friends/family who tried to cash-in.) After-hours, AIZ, DVA, DVN and ES all reported beats. Meanwhile, FANG, HST, and MCHP reported misses.

Wednesday’s economic calendar is limited to Crude Oil Inventories (10:30 am) and a couple more Fed speakers in the afternoon. However, again earnings will likely have the most sway again as BR, CBRE, CVS, CPRI, COTY, HUM, SEE, AES, VMC, and WEC are among those reporting before the bell. Also, of note is that homebuilder TMHC has reached an agreement to buy its smaller competitor WLH and CNBC is reporting XRX will make an offer to buy HPQ.

Tuesday’s economic calendar includes Sept. Trade Balance (8:30 am), Service PMI (9:45 am), ISM Non-Mfg. PMI and JOLTS (both at 10 am) and a couple of FOMC speakers in the afternoon. However, earnings are likely to drive markets again as AGN, ARNC, BDX, EMR, EXPD, FIS, HSIC, MYL, NEM, PPL, REGN, TPR, and ZBH all report before the Open.

Overnight, Asian markets were green. In Europe, markets are mixed, but mostly green at this point. As of 7:30 am, U.S. futures were just on the green side of flat.

Again, markets are a bit extended at this point and showing signs of indecision at the all-time highs. However, this is constructive (as compared to a raging bull run that often leads to a collapse). Don’t be too surprised if we drift sideways a bit or even pullback to retest the breakout level before any climb resumes.

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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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Only 2 Patterns I Trade

November 5, 2019 by Ed Carter

High Hopes

November 5, 2019 by Doug Campbell

Asian markets closed bullish across the board following the lead of US markets after setting new records. European markets are modestly bullish across the board as the monitor US/China trade developments closely. US Futures currently point to a Dow gap up of nearly 75 points ahead of a huge day of earnings reports.

New record after new record on a rally very few expected, but it looks as if the bulls want to stretch even further this morning on high hopes of the Phase 1 deal. Yesterday was rather frustrating, technically producing a pop and drop pattern that chopped in a very small range after the big gap up. Ahead of a big day of earnings and economic reports futures markets once again point to a gap open that we will have to again watch for proof of follow-through buying. Guard yourself against chasing into the gap as profit-taking could begin at any time.

On the Calendar

On the Tuesday earnings calendar, we have over 360 companies reporting results. Notable reports include PTON, AGN, AINV, ARNC, BDX, CZR, CWH, CNK, DVA, DVN, EMR, HST, HUBS, LAMR, LC, LPX, MNK, MTCH, MYL, NEM, PBI, PAA, PPL, RRGB, REGN, SSTK, TPR, TRVG, TRUP, VOYA, & WW.

Action Plan

Yesterday was a bit frustrating with a big institutional gap that found no follow-through chopping in a very small range the entire day. Of course, we set new records in the DIA, SPY, and QQQ, and it looks as if we could do the same today with another gap up open indicated in the futures. The T2122 indicator settled after the morning gap, which gives a bit more up-side room if the bulls continue to find inspiration.

With a big day of earnings reports and the International Trade in goods report at 8:30 AM, anything is possible, but with high hopes of a Phase 1 trade deal the bulls appear relentless in their run higher. As the melt-up continues, stay focused on price watching for clues of profit-taking beginning. It’s very easy in such a bullish environment to get caught up in the euphoria and over-trade so late in the rally. Remember, gap up opens can be a great time to take some profits and be careful not to chase stocks that have already run multiple days higher.

Trade Wisely,

Doug

All-Time High Nerves

November 5, 2019 by Rick Saddler

The bulls continued to run causing a gap-up at the Open Monday. However, after the gap higher, there was a lot of volatility with all major indices ending with black candles and either indecisive or having faded the gap to some extent. Still, this leaves the SPY, DIA, and QQQ at new all-time high closes and IWM higher in its trend. Just beware that gap-up Doji (DIA and QQQ) are not ideal and can presage a pullback. So nerves are a real thing up here at the all-time highs.

Earnings after-hours on Monday were mixed but leaned to the bad side. XEC, ED, IFF, MAR, MOS, and OXY all reported misses. However, HIG, JKHY, PXD, and PRU reported beats, although 3 of these also reported revenue misses.

Meanwhile, on the China Trade War front, news outlets are now reporting that China is pressing the White House to not only forego the threatened December tariffs, but also reduce the existing tariffs on Chinese goods as part of any Phase One deal. My take-away is that the “Phase One” partial agreement is not a done deal yet (as had been suggested). However, President Xi Jinping also made a speech promising that China will continue to lower tariffs and work to stabilize international trade.

In other International News, OPEC announced that it forecasts demand for oil to fall 7% over the next four years. This is based on their assumption that there will be a flood of US Shale Oil on the market as environmental concern regulation continues to be eased in America.

Overnight, Asian markets were green. In Europe, markets are also mostly bullish at this point. As of 7:30 am, U.S. futures were green across the board, looking for gap-ups of between 0.2% and 0.5%.

It certainly appears the bulls want to continue their run. However, the tepid post-gap candles Monday suggest it is not a run-away stampede for the bulls. With more China Trade War twists, as well as more earnings ahead, remember to be cautious and continue to take profits and move stops.

Swing-Trade Trade ideas for your consideration. Long – GPC, IPG, MPC, XRX, VLO, LUV, ROL, JPM, KSU, PPG, AA, OLLI. Short – MLM, CINF, LMT, NOC. 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

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.