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Waiting on an Elusive Deal

October 10, 2019 by Rick Saddler

Markets gapped higher Wednesday on anonymous reports the Chinese are open to a partial trade deal – grain purchases for tariff suspension. While the gap was impressive, the day ended as nothing but a Doji (indecisive), if up almost 1% on the S&P and QQQ. So, the downtrend remains in place and taken together, the last two days are just more of the sideways chop at the level of the large gap down Open Tuesday.

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On today’s economic calendar we see Consumer Inflation at 8:30am. However, the big news is the resumption of US-China Trade talks. Unfortunately, overnight the Chinese media was reporting “trade talks have made no progress” and “high-level talks will only last one day” (instead of two as was planned).

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Overnight, Asian and European markets were all mixed (on dueling rumors and expectations about the now-shortened trade meeting). And as of 7:30 am, U.S. futures were all pointing to a small open lower (about 0.2 – 0.3%) on the overnight news of trade deal failings.

The bottom line remains that it is very hard to swing trade in the recent markets successfully. Day or Position trading look much better in this sort of volatile and choppy market. Until we start getting less “gaps and whiplash” and more “trend and follow-through” be very cautious. Do not confuse one candle as trading wisdom…or a new trend. That all said, downtrend remains in control for now.

For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Short – FSLR, WES, LSCC, LDOS, RDUS, KLAC, EL Long – DOCU, CX, EQR, SYY, AMH, ES, COST, CYH Trade smart, and trade your trade. Stocks we mention and talk about are not recommendations to buy or sell.

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🎯 Dick Carp: the scanner paid for the year with HES-thank you

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🎯 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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Single Candle Signals

October 9, 2019 by Ed Carter

Tough Talk

October 9, 2019 by Doug Campbell

The markets gap down and run south as tough talk between US and China dims the chances of a trade deal Tuesday. However, Wednesday morning, an unnamed official says China is willing to make a partial deal, but unwilling budge on any of the core issues and, the market gaps up as this ridiculous price whip continues to chop trader’s account to pieces. Before you jump into this morning’s gap keep in mind the indexes continue to show current downtrend with 50-day averages in decline. Fool me twice, shame on me!

Asian markets closed mixed and mostly lower on the uncertainty of trade talks that begin on Thursday. Responding to the Bloomberg report and hopefulness of a partial trade deal European markets are higher across the board this morning. US Futures rose sharply after the 6 AM news story and indicate the Dow will gap up between 150 and 200 points at the open as we wait for the release of the FOMC minutes later today.

On the Calendar

On the hump day Earnings Calendar, we have just eight companies reporting their results today, but none are market-moving or particularly notable.

Action Plan

At 6 AM, Bloomberg reported that an unnamed official close to trade negotiations that China is willing to make a partial deal. The news quickly spiked the Dow Futures higher at one point, suggesting a 200 point gain at the open. Apparently, China is willing to commit to purchasing of farm products if the US stops tariff increases. However, they are unwilling to budge on any of the major sticking points. The President, in the past, said tariffs are to increase on OCT.15^th if no progress is made on a bilateral deal. I guess the good news is that at least today’s gap is to the upside! Trade negotiations begin this Thursday, stay tuned for future gaps and whips in price.

According to reports, Turkey is about ready to invade Syria, as US troops pull back as the President attempts to fulfill a campaign promise to bring our troops home. The UN has reported they are in a desperate financial situation and may not be able to pay staff by November because so many countries have failed to pay their dues, making their peacekeeping operations impossible. Technically, speaking the indexes are in a current downtrend with declining 50-day averages amidst so much swirling uncertainty. Be careful not to chase this morning’s gap, and remember we have the FOMC minutes release at 2:00 PM Eastern this afternoon.

Trade Wisely,

Doug

Dueling Rumors and Spin

October 9, 2019 by Rick Saddler

Markets gapped lower again Tuesday, attempted to rally again (on Fed Chair Powell’s afternoon statement that he sees the Fed balance sheet expanding again soon), but then sold off hard the last hour of the day, closing near the lows. So, the Dreaded-h pattern is now near breakout in all major indices.

Overnight, Asian markets were on the red side of flat, but European markets are all strongly in the green. As of 7:30 am, U.S. futures were pointing to a large gap up (about 1%) on overnight reports that China is open to a partial trade deal. (Just bear in mind the market whip on these same rumors the last few days that were always countered with a rumor in the opposite direction…and China has promised a counter move to the most recent U.S. blacklist / Visa sanctions.)

On today’s economic calendar we see JOLTS at 10am, Oil Inventories at 10:30, Chair Powell speaks again at 11am and the Sept. FOMC minutes come out at 2pm. Also, the Impeachment news cycle will surely keep churning and beware of that Chinese retaliation for the blacklist and putting restrictions on Chinese officials and executive’s travel visas. Finally, Turkey continues to move troops right to the border of Syria. So, news of that situation may also drive markets.

The bottom line remains to be cautious, very quick in your trading time horizon or both. Gaps and whiplash are not good conditions for swing trading. So, be careful chasing one nice (or ugly) candle. However, the downtrend remains in control for now.

For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Short – TSN, LSCC, SYF, LDOS, KLAC, MDT, EL Long – DOCU, UDR, EQR, CYH, KBH, AMH, CX, DHI Trade smart, and trade your trade. 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.

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A Good Trading Process

October 8, 2019 by Ed Carter

RBB Pattern – Using 100sma

October 8, 2019 by Ed Carter

RBB Pattern – Ed’s Thoughts

October 8, 2019 by Ed Carter

Shooting star candle patterns.

October 8, 2019 by Doug Campbell

With the indexes leaving behind shooting star candle patterns at price resistance levels yesterday seems to suggest that trader’s hopes of progress in the coming trade talks have diminished. Reports that Brexit talks could be failing is not helping as currencies fluctuate, and Oct. 31 deadline quickly approaches. Growing unrest between Turkey and Syria due to the Presidents decision to withdraw US Troops and increasing tensions between Iraq and Ecuador rising oil prices, it’s no wonder market prices continue to so volatile and extremely challenging to trade. It’s truly a day-traders market with all the unrest and news sensitivity and changes market direction in half a heartbeat.

Asian market rallied to close green across the board last night as China television banned NBA broadcasts over Hong Kong protest comments. European market are however decidedly bearish this morning as trade hopes sink and a no-deal Brexit grows. US Future points to a substantial gap down this morning as it faces so much uncertainty in the coming days.

On the Calendar

On the Earnings Calendar, we have 11 companies reporting quarterly results today. Notable reports include HELE, LEVI, and DPZ.

Action Plan

Reports this morning suggest Brexit talks are breaking down quickly hit the currency markets as the sterling fell in reaction. The President’s decision to bring US Troops home from Syria has drawn rebuke from his most staunch supports in Congress and increasing the likelihood that Turkey will invade Syria further destabilizing the region. Oil prices are on the rise this morning, with increasing tensions between Iraq and Ecuador escalate. Ahead of trade negotiations, the US dollar is pulling back, and gold is on the rise this morning, and the Chinese media suspends NBA broadcasts over comments supporting Hong Kong protests.

Top off all this unrest with tough talk from China and hopes of a productive outcome of this week’s talks seems to have greatly dimmed this morning. With the index charts testing price resistance levels yesterday and leaving behind bearish shooting star patterns, a pullback to is not a big surprise. However, the futures seem to be painting a grim picture this morning with a substantial gap down expected amidst all the swirling uncertainty. I continue to expect unruly and price action driven by the news reports that can chop a trader’s account to pieces.

Trade Wisely,

Doug

Bull Trap Being Sprung?

October 8, 2019 by Rick Saddler

Markets gapped lower Monday but rallied to close the gap and retest the 50sma and downtrend. The bad news for bulls is that all three major indices failed that test (or at least failed to pass it Monday). This leaves all four (SPY, DIA, QQQ, and IWM) in a potential Dreaded-h pattern in the making. So, the downtrend remains in effect and the key technical indicator for Tuesday. In spite of this, Defensive sectors were out of favor all day. Does this put us in a bull trap in progress?

Overnight, Asian and European markets were all in the red. This is probably due to the U.S. blacklisting 28 entities in China (prohibiting them from buying anything made in America). This move was ostensibly made over Human Rights violations, but market analysts suspect it has more to do with adding Trade War pressure (or at least believe that is how China will interpret the move). Adding to the market fears are reports that the UK PM had a testy call with German Chancellor Merkel, making any new Brexit deal “overwhelmingly unlikely.” This, of course, raises the risk of a No Deal Brexit. As of 7:30 am, U.S. futures were also pointing to a significant (0.7%) gap down on the overnight news.

On Tuesday PPI data (8:30 am) may impact markets, as inflation data may help inform FOMC action. Fed Chair Powell will also speak again in the afternoon. It’s worth noting that market expectations of an Oct. Fed rate cut have fallen slightly from >90% last week to 70% Monday.

The bottom line remains to be cautious. It is very hard to swing trade the recent markets successfully until we start getting less “gaps and whiplash” and more “trend and follow-through.” Be careful chasing after one nice (or ugly) candle. However, the downtrend remains in control for now.

For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Short – DD, TSN, QSR, LDOS, HEI, FSLR, WES, LSCC, RDUS Long – DOCU, VZ, EQR, PNW, SO, DUK, ES Trade smart, and trade your trade. 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.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Knocking on the door

October 7, 2019 by Doug Campbell

After a big short squeeze rally in reaction to the jobs number that suggested a 2020 recession is less likely but left the door open for more rate cuts, the US indexes are once again knocking on the door of price resistance. With trade talks set to resume this week and threatened tariff increases scheduled next week, traders should prepare for a news-sensitive market. As protests continue to disrupt Hong Kong and amidst impeachment proceedings, perhaps an interim agreement could be reached to at least delay future tariff increases by both countries, but I wouldn’t hold my breath in anticipation.

Last night Asian markets closed down across the board with all eye on the forthcoming trade talks. European markets are, however, cautiously bullish this morning ahead of trade talks and a rapidly approaching Brexit deadline. US Futures have rallied substantially off of overnight lows but continue to suggest a slightly lower open as uncertainty swirls and with significant technical resistance levels just above. With little on either the earnings and economic calendar for the market to react to, I would not be surprised to see a choppy price action today.

On the Calendar

On the Earnings Calendar we have just eight companies expected to report today, but none of them are particularly notable.

Action Plan

The Employment Situation report Friday was strong enough to ease concerns of a US recession in 2020 but not so strong that the market still believes in another rate cut is on the way. Combine that with a short-term oversold condition, and short squeeze trigger huge rally right back into price resistance levels. As the US and China prepare to resume trade talks this week, the news spin cycle it running at full speed likely to create will price swings as they speculate on the outcome. Many are hoping for at least an interim agreement to stop that would stop the possible tariff increases set to increase next week.

With the ongoing Hong Kong protests and impeachment proceedings, both countries have good reason to get this frustration behind them, but I would not expect either side to give in easily. Futures have rallied this morning off the overnight lows that had suggested a substantial gap down. With no notable earnings to react to and a very light economic calendar, expect the market to be very new sensitive with choppy price action. The indexes have substantial price resistance levels above to deal with, and after a 2-day rally of more than 800 Dow points, a little rest or consolidation would not be a big surprise as we wait for trade talks to resume.

Trade Wisley,

Doug.