Conflicting Trade Deal News

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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.

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🎯 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.

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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

Ridiculous Political Football

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Political Football
Phase 1 Trade Deal

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.

Trade Wisely,

Doug

More Trade War Give & Take

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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.

✅ 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

Miss on US Manufacturing

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Manufacturing

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.

Trade Wisely,

Doug

More Trade Wars and Fear

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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.

✅ 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

President: More Tariffs, Need Neg. Rates and Weak Dollar

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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.

✅ 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

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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

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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