The big morning gap yesterday seemed to be met with a lot of
uncertainty as to what happens next with the Phase 1 trade agreement. The bulls find very few buyers after the gap,
and the bears could not inspire any sellers, so we lingered the rest of the day
in a choppy sideways consolidation waiting for news to break the deadlock. Although the uncertainty remains, the futures
market that had been flat most of the night found some inspiration somewhere to
once again point to a bullish gap up open.
Asian markets closed positive across the board overnight as confusion over the trade continues. European markets are trading mixed but mostly higher this morning ahead of German economic data. US Futures point to a 100 point Dow gap ahead of the biggest day of earnings this week and some potential market-moving economic reports. The market is very news sensitive regarding trade, so remain flexible as sentiment could quickly shift as this political drama continues.
On the Calendar
On the Thursday Earnings Calendar, we have our biggest day
of the week, with 51 companies reporting. Notable reports include ULTA, AOBC, CM, CLDR,
DOCU, DG, DLTH, EXPR, GWRE, JILL, KR, MIK, SIG, PLCE, TIF, & ZM.
Action Plan
After the morning pop yesterday, the price action in the
indexes stagnated in a sideways chop seemly uncertain as to what comes next. However, this morning, futures have found
some inspiration even though the future of the Phase 1 trade deal remains uncertain. With the decline in petroleum reserves and
the expectation that OPEC may make deeper cuts in oil production, there was
some nice movement in the sector yesterday, helping to the overall market.
Today is the biggest day of earnings this week and could provide
the source of inspiration for the bulls or the bears. However, in light of yesterday’s sharp decline
in ADP numbers, the Friday Employment Situation report may create more
consolidation after the morning rush while we wait. With the market sensitivity to any news on
the trade deal and what that might mean for tariffs, traders will have to
remain very flexible and prepared for quick price action surges or reversals. As the indexes move back up toward price
resistance levels, remember to take some profits.
Stocks bounced back Wednesday (at least in terms of gapping) after the previous three down days. An anonymous Bloomberg report claimed progress was being made on how many tariff rollbacks would be part of phase one (partial) trade deal with China. This was enough for the bulls to gap again. However, there was no follow-through in the DIA and QQQ. Meanwhile, the SPY did manage a small bit of post-gap gain. The SPY ended up 0.62%, the DIA up 0.56% and the QQQ up 0.51%. However, it is worth noting that all three remain below their Monday close.
In trade news, we’ve gone from back-and-forth rumor/leaks/reports to the even more bizarre. This morning Bloomberg is reporting positive spin, saying China is in close contact with the US and the US negotiators are confident in a phase-one deal before Dec. 15. Meanwhile, CNBC and others are reporting China is giving little indication of progress and are remaining silent, except to reiterate a weeks-old statement that any phase-one deal must include tariff rollbacks…not just forestalling new tariffs. Regardless of which (or either) may be true, markets seem to be taking this as bullish news.
On the political news front, President Trump abruptly left the NATO meeting after turmoil between himself and other leaders (including being corrected by President Macron during a joint interview and being the butt of jokes between other leaders). Elsewhere, North Korea must have felt it wasn’t getting enough attention. So, it warned the US to prepare for a “Christmas gift” as its self-imposed deadline for progress on a nuclear deal approaches.
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In economic news, ADP Nov. Private Payrolls were a big miss (coming in at 67,000 versus 145,000 expected). ISM Non-Mfg. PMI also was light (53.9 versus 54.5 expected). In addition, US Oil inventories were much, much higher than expected (2.5 times predicted). This last report comes as OPEC says it is considering deeper production cuts (although each OPEC member wants other countries to do the cutting).
Major economic news for Thursday includes Imports, Exports, and Initial Jobless Claims (all at 8:30 am), as well as Oct. Factory Orders (10 am). Major earning reports will include BF.B, COO, DG, KR, TIF, and ULTA.
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Overnight, Asian markets were all in the green. The same is true in Europe, as all the burses (except the FTSE) are green at this point. As of 7:30 am, U.S. futures are all pointing to a gap higher of about 0.3% to half a percent.
So, we may be looking at another gap up this morning. Bulls have definitely looking for any reason to run the last couple months. However, there have been some warning signs (ie. Weak Mfg. data) and reasons to worry (blow-off top action?). That being the case, it would be wise not to chase too far either direction. Stick to your trading plan, keep locking-in profits, and move your stops. Our job is to make consistent gains and reduce risk. We’re not here to hit the lottery.
Ed
Swing Trade Ideas for your watchlist and consideration. LB, CPRI, CXO, CBS, HAL, VIAB, MNST, KO, DXC. 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.
🎯 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.
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 so-called Phase 1 trade deal has become a ridiculous political
football creating a frustratingly news-driven market chopping up trader’s
accounts. The President says maybe we wait
until after the 2020 election, and the Dow drops more than 400 points. Bloomberg puts out a story citing “people
familiar with the talks,” and suggests a deal is edging closer, and the Dow gaps
up. All of the drams over a trade deal
that we no one really knows what it does or does not include. Silly!
The good news is that even though the short-term index trends broke
yesterday the bulls found the energy to defend important price supports and
longer-term trends. However, traders
will have to remain very nimble in this emotional football continues to be kicked
around.
Asian market closed seeing only red across the board overnight
with European markets in reaction to the Bloomberg story reversed early losses and
currently see green across the board. US
Futures ahead of earnings and economic reports are also reacting sharply higher
after the Bloomberg report with the Dow expected to gap up triple digits in
reaction.
On the Calendar
On the hump day Earnings Calendar, we have 31 companies
reporting their results. Notable reports
include RH, WORK, HOME, CPB, FIVE, HRB, RY, TLYS, and VRNT.
Action Plan
Yesterday the President said it might be better to wait
until after the 2020 election to make a deal with China. Commerce secretary came out echoing those
comments and said they have not ruled out imposing tariffs on imported European
Autos. Then at 5 AM this morning,
Bloomberg News reported that the US and China were edging closer to a trade
deal citing “people familiar with the talks.”
The Futures quickly rallied from overnight losses on the report. I don’t know about you, but all this market
manipulation around the so-called Phase 1 deal has become absolutely ridiculous.
Technically speaking, the short-term index trends broke
yesterday, but the longer-term bullish trends remain intact as bulls defended
key price action supports. Although
yesterday’s price action was quite bearish, the pullback may, in fact, open the
door to opportunity, so stay focused on price for clues. As a result of the Bloomberg report, the futures
point to a gap up open in the Dow of more than 100 points ahead of earnings and
economic reports. At 10 AM Eastern today,
impeachment hearings will resume providing a little distraction and drama to
the day.
Stocks suffered large gaps lower across the board Tuesday as President Trump threatened new tariffs (France, Italy, Turkey, Austria) and acknowledged that there may be no China trade deal prior to the 2020 Election. Then mid-day the White House acknowledged that the President plans on moving ahead with more China tariffs on Dec. 15th. However, after some follow-through in the morning, the rest of the day was still spent slowly grinding back to above flat after the gap down. Meanwhile, the VXX ended up 5.80%.
The SPY ended down 0.67%, the DIA down 0.97% and the QQQ down 0.78%. This made for the third straight down day (including the short session Friday). In and of itself, this is causing fear and talk of a repeat of 2018’s December selloff. However, to put this 3-day slide in perspective, we are only 1.5 to 2 percent off the all-time highs. So, we are not exactly seeing the end of the world yet.
After hours, the Co-CEOs of Alphabet (Larry Page and Sergey Brin) stepped down and appointed Google CEO Sundar Pichai as their replacement. Pichai is an Engineer by trade and more of an operations guy than Page or Brin. He was a driving force behind Google moving into non-search projects such as self-driving cars, artificial intelligence, rural internet, and others.
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Despite the President’s Tweets and words yesterday, Bloomberg reports that the US and China are inching closer to an agreement on the number of tariff rollbacks that would be acceptable for a “phase one partial deal.” American sources say they expect the arrangement to be agreed prior to 12/15 (also forestalling another round of tit-for-tat tariffs). However, there is no word on when such an agreement would actually be signed. This story smacks of being another back and forth dueling false rumor around the China Trade War. Nonetheless, stocks are seeming to react very positively to the news.
Overnight, Asian markets were again in the red. In Europe, the major markets are all in the green at this point. As of 7:30 am, U.S. futures are all pointing to a half percent gap higher on the trade deal rumor.
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In other trade news overnight, France and the EU have said they will retaliate over US-threatened tariffs on French goods. In addition, French President Macron, UK PM Johnson and Canadian PM Trudeau were caught on a “hot mic” joking about President Trump. (And we all know how well he can take a joke…so expect more on this front.)
With an apparent attempt at a rebound in the cards this morning, don’t start chasing. Keep in mind that to be successful, a trader must follow their rules…not get caught up in Fear of Missing Out. So, stick to your plan, lock-in profits along the way, move your stops, and maintain your discipline. Remember that your job is to be prepared, 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. TTWO, DXC, ALXN, EA, ECL, WBA, ARMK, KLAC. 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.
🎯 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.
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
A miss on US Manufacturing and concerns of a US/China trade deal delay inspired the bears and triggered a wave of profit-taking yesterday. Threats of a possible 100% tariff against France in response to there new digital tax aimed at American companies as well as possible steel and aluminum tariffs for Argentina and Brazil added more pressure to the selloff. This morning the President raised concerns that the US/China trade agreement may not happen until after the 2020 election has futures pointing to more losses this morning.
Asian markets closed mixed but mostly lower overnight, with
Australia sinking more than 2%. Across
the pond Euro Zone indexes are mostly lower after the President’s comments on the
US/China trade delay. US Futures point
to a gap down open of about 100 Dow points following though after yesterday pop
and drop pattern leaving behind bearish engulfing candle patterns and lifting
the fear level in the VIX substantially.
Keep in mind that a pullback in a bullish trend may ultimately prove to
be a buying opportunity if the bulls prove strong enough to defend. So stay focused on the price for clues.
On the Calendar
On the Tuesday Economic Calendar, we have 20 companies reporting
quarterly results. Notable reports
include AZO, BMO, CONN, LE, MRVL, CRM, WDAY, and ZS.
Action Plan
The President’s trip abroad as proved to be quite eventful. After the passage of a digital tax in France targeting US companies, he has threatened new tariffs as much a 100% in retaliation. He also said steel and aluminum tariffs for Argentina and Brazil might be in play very soon. This morning the President suggested it might be better to wait until after the 2020 election to complete a trade deal with China sending the US Futures market sharply lower. All the while impeachment hearings resume on Wednesday here in the US while the President remains abroad scheduled to meet with the Queen.
Futures that had been modestly bullish most of the night now
appear to threaten a gap down this morning following through after Monday’s selloff. While the selling yesterday was worrisome, leaving
behind bearish engulfing candles, price supports, and overall trade largely
held up to the attack. However, follow-through
selling today may well create some technical damage to the index charts. The VIX closed the day just below a 15 handle
as fear quickly accelerated after the pop and drop day that energized the bears,
triggering a wave of profit-taking as trader scrambled to protect profits.
The bears controlled markets all day Monday (on the back of another Presidential tweet, as well as bad Mfg. PMI data). As a result, we got the biggest down day in almost two months. The SPY lost 0.85%, the DIA was down 0.98% and the QQQ lost 1.02%. As you’d expect, the VXX rose 5.2%, but only to a still-low level of 17. T2122 has fallen back to the edge of the oversold area at 19.38. However, remember the market can remain oversold longer than we can stay solvent predicting a turn.
The big news for markets Tuesday will be Protectionism and Trade Wars. After the close, the US administration threatened to put 100% tariffs on French products in response to French taxes on digital services. (President Trump also attacked French President Macron verbally at the NATO summit.) The administration said it is also exploring doing the same to Austria, Italy, and Turkey for the same reason.
This threatening and tariffs is a theme with the current administration and follows on the heels of the Sunday night tweet-based new tariffs on Argentina and Brazil steel and Aluminum. Then this morning, the President announced that “it may be better” to wait until after the 2020 election to make a trade deal with China. (Partially acknowledging the reality that China is not in a particular hurry, he is not the one holding all the cards, and he is not going to dictate to another major economic power.)
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Futures took this trade war rhetoric badly and markets are likely to react all day. This is because there is no major economic news planned for Tuesday. In addition, there are no major earnings reports before the open. (CRM and WDAY both report after the close.)
Overnight, Asian markets were all in the red (except Shanghai). In Europe, the major markets are mixed at this point. As of 7:30 am, U.S. futures are all pointing to a gap down of about half a percent.
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So, trade/tariff fears are likely to drive markets in the absence of other news. However, early Cyber Monday results may well add momentum one way or the other. Regardless, the bulls have been very resilient for the last couple of months. So, don’t get too carried away if markets are soft again Tuesday.
Just remember that we are swing traders. By definition, we need down-swings to set up an up-swing. So, continue to look for the next opportunity setting up, lock-in profits, and trade your plan. Remember that your job is to be prepared, 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. VXX, FAZ, SPXU, Z, KR, CPB, JBHT, LEN, KLAC. 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.
🎯 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.
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
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.)
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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.
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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.
🎯 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.
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
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.
