Sunday Look Ahead 11-10-19
Using the T-Line
Bears Claw Back Gains
Closing at new record highs on Friday, the bears have decided they have something to say this morning trying to claw back a good portion of the move. The good news is with the banks closed in honor of Veterans Day, the bears may find it difficult to find enough energy to create much technical damage. Although it’s always disappointing to see a weekend reverse a strong close of the previous week, the volume is likely to be light and price action choppy due to the holiday.
Asian markets closed the day seeing only red with trade tensions growing over the weekend, and Hong Kong protests flare up once again. European markets are also bearish this morning as they watch trade developments, and the US Futures are following the same path the Dow pointing to a triple point gap down this morning.
On the Calendar
There are no events on the Economic Calendar with the banks closed due to Veterans Day.
We have over 140 companies reporting earnings results today. Notable reports include FOLD, FNV, TME, and TERP.
Action Plan
Having taken a few days off, I feel a bit out of the sorts this morning trying to catch up, so this blog post will well be short. Although the DIA, SPY, and QQQ closed at a new record high on Friday it was interesting to note that T2122 slightly declined. That often suggests the rally was not broad-based with just key stocks rising to finish the week strong.
This morning futures are decidedly bearish looking to take back a sizeable portion of Friday’s rally at the open. However, with the banks closed for Veterans Day, this pullback may not create any serious technical damage. In fact, after the morning rush expect price action to become light and choppy.
Trade Wisely,
Doug
Trade War and Recession
More China Trade War news drove markets Friday as pre-market stories indicated that there was “fierce opposition” in the White House to rolling back tariffs as part of any phase one deal. This caused a gap lower in the SPY, QQQ and IWM. However, this gap was quickly faded…until President Trump told reporters he had not agreed to rollback tariffs (as his Senior Economic Advisor Larry Kudlow had told Bloomberg on Thursday was agreed with China).
The President’s comments sparked another mid-morning selloff. However, the rest of the day the bulls slowly regained momentum, driving prices higher right into the close. The day finished with another new all-time high close in the SPY, DIA, and QQQ. Even the IWM closed with a nice white candle back in its recent range.
There is no US economic news on tap for Monday (or Tuesday) due to the Veterans Day holiday. In addition, the only earnings report of note Monday is HPE. However, there is some International news. The UK (5th largest economy in the world), reported a shrinking GDP and Germany (4th largest) is expected to do the same on Thursday. This would put two of the largest economies in the world (and the two largest in Europe) into recession.
Meanwhile, in China, the BABA “Singles Day” sale has sold over $31bil in merchandise (and climbing) in its one-day sale. At the same time, the unrest in Hong Kong has escalated again with Police shooting at least two people, causing a flash mob that shut down downtown traffic. Another man (who apparently opposed the mob) was set on fire and those three are among 60 casualties today.
Overnight, Asian markets were all in the red, on Hong Kong unrest and US-China Trade fears. In Europe, markets are also in the red on the UK recession and Global trade fear. As of 7:30 am, U.S. futures were on-track for a half percent gap lower across the board.
With the vast majority of earnings behind us, fear of global recession, twists in the China Trade War and (Impeachment-related or meant to distract from the Impeachment) political news are likely to drive news cycles and markets again this week. Remember to be cautious and continue to take profits and move stops.
Ed
Swing-Trade Trade ideas for your consideration. Long – KHC, GPC, PSX, K, MAS, PCAR, AMD, VLO, AMP, IR, CE, ROL, UTX, STI, MS, OLLI. Short – EFX, ETR, KO, MLM, HSY, SBUX, DG. 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
Putting It All Together
The China Story Two-Step
China deal optimism led Markets to gap higher Thursday. However, there was no follow-through as the sideways grind set in for the rest of the morning. Then about 2:30 pm, rumors had the White House pushing back against tariff reductions. Markets sold off on this report. The selloff subsided at the end of the day as markets ended in the green, but printing Shooting Star type candles in the SPY, DIA and QQQ, while the IWM had sold off all day printing an ugly black candle.
After-hours, ATVI, BIDU, BKNG, MTD, MNST, NLOK, DIS reported beats. Meanwhile, AMCR, MATX, NWS, and TTWO reported misses. However, after-hours Larry Kudlow (Dir. of the Council of Economic Advisors to the President) told Bloomberg that afternoon rumors were false and that if a first-phase trade deal is signed with China, it will indeed include the tariff reductions China was insisting upon. Unfortunately, later more reports of opposition to tariff rollbacks came. Obviously, the administration has two splinter groups at odds over this issue.
Friday’s economic calendar is limited to Michigan Consumer Sentiment (10 am). In addition, earnings will hold little sway as only AEE and DUK report before the bell.
Overnight, Asian markets were mixed, but mostly in the red. In Europe, markets are also mixed at this point, with the FTSE and DAX red and the CAC and others in the green. As of 7:30 am, U.S. futures were on the green side of flat.
With the bulk of earnings and the Fed direction out of the way, it seems the China Trade War is the big story driving market moves. However, it sure seems that two competing groups inside the Trump Administration are using leaks (and stock Market gyrations) to gain points in their fight. So, beware of chasing any such news. It may well be countered in short order. Remember to be cautious and continue to take profits and move stops. We have a long weekend news cycle ahead and no chance to trade against that news before the Open Monday.
Ed
Normally, we don’t put out trade ideas on Friday. However, with two groups in the trading room, I’ll make an exception. Swing-Trade Trade ideas for your consideration. Long – AIZ, MAS, K, CMI, AMD, PCAR, STX, SYY, CELG, VLO, ROL, CTXS, OLLI. Short – EFX, KO, CF, MLM, F, SBUX, STZ, WEC. 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
Using the V-Stop Indicator
New China Hopes
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.
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.
Ed
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.
✅ 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
A Trader’s Job
A bit winded?
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
