Futures pointing higher.
Now that the US has officially left the Iran nuclear agreement markets around the world are responding higher. Perhaps not the catastrophic event the media spin was alluding to, at least for now. With Futures pointing higher the Dow and SP-500 poised to break the above their 50-day averages at the open. A very welcome site if you happen to be bullish. Getting above this important level is one thing, now it’s up to the bulls to prove they can hold it as support. Something they have been unable to do since early February.
Although inflationary pressures continue to creep up economic data continues to show remarkable strength in the economy. With the majority of earnings reports continuing to come in strong perhaps the bulls will find the energy to hold on this time. As we head into summer, I would not expect the market to reclaim the glory of the 2017 rally, but it would be nice to see it stabilize and settle in above this key support. There is still a lot of resistance above that will have to be dealt with but holding above the 50-day average would be a good start.
On the Calendar
The Economic Calendar on this hump day has two potential market-moving reports. At 8:30 AM Eastern the PPI report expects a 0.3 percent in April for the headline number. Excluding food and energy forecasters see a 0.2 percent increase and 0.3 percent increase if you also exclude trade services. The EIA Petroleum status report has seen a short-term trend of declining supplies which in turn has helped support rising oil prices. There is no forward forecast of oil supplies, so it’s always a true market surprise. The remaining events on the calendar include 7:00 AM Mortgage Applications, 10:00 AM Wholesale Trade, and two 1:00 PM Bond auctions, none of which is expected to move the market.
On the Earnings Calendar, I show 371 companies stepping up to report quarterly results.
Action Plan
Yesterday the market traded in a tight range as it seemingly waited for the Presidents decision on the Iran Nuclear deal. Oddly enough after we learned the US would be pulling out of the deal, there was still a very little reaction as the market seemed content to rest another day. The DIA and SPY both closed the day just below their 50-day averages while the QQQ’s and the IWM found the energy to hold above as the market seemed to be struggling to make a directional decision.
This morning the Dow Futures are suggesting a substantial gap up of more than 100 points with both Asian and European markets trading bullishly. It would seem the US leaving Iran agreement is of little concern to the markets at this point with the bulls pushing for higher prints. If the futures remain strong through the rest of the morning, the DIA and SPY look to break the resistance of their 50-day averages. The question now is can the bulls hold this important support which they have not been able to do since early February. Here to hoping they can! Remember with so many earnings reports still to come that fast price and volatility are still possible.
Trade Wisely,
Doug
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AAOI Up 31%
The AAOI trade has worked well, currently, up 31%, I will close it later today because of earnings tonight, and it’s hitting one of our major sell indicators in a Rounded Bottom Breakout chart pattern. Our GE trade is looking better, The bottom construction as paid off for the chart so far. Still, a few bumps to get over before it pays the big bucks. We bought some GPRO this morning with a 15.5% profit so far. GPRO may have its eye on the 200-SMA
The SPY still challenged by the 50-SMA on the daily chart. Price continues to trade in a narrowing range (looking at a daily chart for the past three-plus months).
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Testimonial
I have been a member of HRC for five years, RWO for three years. I applaud the efforts of all coaches Rick, Doug, Ed and Steve (also fellow members) in helping me become a better trader than I was starting out and I am still learning. Doug reinforces the “Price is King” mantra every day since we traders tend to forget it in the midst of finding the next ‘sure thing’ indicator. Rick, will make us sometimes answer our questions to foster the thinking and quicken the learning process. Over the years, I have been in many trading rooms. I am here to stay. This room and its members are the best. Period!
Fred Narielvala
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advice to anyone except for the trading desk of Hit and Run Candlesticks Inc.
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Considerable uncertainty.
Overall yesterday was a win for the bulls following though from the big rally last Friday. However, with the DIA and SPY leaving behind doji patterns just below the 50-day average, they left us considerable uncertainty as well. Although the Tech’s and small caps closed strong the question on everyone’s mind, will that be enough to fend off a bear attack?
Currently, the futures are pointing to a lower open, but with political news pending and a huge number of earnings reports, anything is possible. I think traders should exercise a little caution this morning until some better price action clues appear.
On the Calendar
There is only one market-moving report on today’s Economic Calendar. There was a Fed Speaker at 3:15 AM, the NFIB Small Business Optimism at 6:00 AM, Redbook at 8:55 AM and two bond events at 11:30 AM & 1:00 PM. The potential market-moving JOLTS (job openings) expects to see a slight increase in March to 6.100 million vs. February’s 6.052.
We have another big day on the Earnings Calendar with 420 companies stepping up to report today. Make sure you’re checking your holdings against expected earnings reports.
Action Plan
We begin Tuesday with a little uncertainty, after printing doji patterns below the 50-day average on the DIA and SPY. To make it a bit more confusing the QQQ and IWM managed close bullish and above their respective 50-day averages. Struggling at this important resistance is not that big of a surprise, but we certainly but it now becomes imperative for the bulls to step up and fend off a possible bear attack. A day of rest would be perfectly acceptable, but we don’t want to see failure patterns on the DIA and SPY at the end of the day.
Currently, the futures are pointing to a lower open of more than 50 Dow points however with so many earnings reports this morning anything is possible. I would suggest a little caution this morning as the bulls and bears battle for control. If holding some unrealized gains make sure you have a plans to protect them because failure here could easily embolden the bears to seek new market lows. Let’s go bulls it’s time to step up!
Trade wisely,
Doug
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Not out of the woods just yet.
The bulls went to work on Friday providing very nice relief rally, but the markets are not out of the woods just yet. The big move in AAPL fueled by the huge share purchase by Waren Buffett helped the QQQ’s break above it’s 50-day moving average. However, all four of the major indexes are still in technical downtrends with significant price resistance levels above. Although the Futures are pointing to a bullish open, keep in mind that after such a big 2-day rally some profit taking would not be out of the question.
The market has a lot to chew on this week with trade negotiations, nuclear deals, North Korea and about 1400 earnings reports. Price volatility is likely to remain high, and big whipsaws or reversals are not out of the realm of possibility amidst the new spin cycle. I’m rooting for the bulls to win this battle but I will also have a plan if bears regain control and everything starts moving south.
On the Calendar
A quiet day on Economic Calendar for a change. There are three bond events, the TD Ameritrade IMX, Consumer Credit and three Fed speakers none of which are typically market-moving.
On the Earnings Calendar, there are 219 companies reporting quarterly results. Today begins the last big week of this earnings season with around 1400 companies reporting.
Action Plan
Friday’s big beautiful bullish follow through was a very welcome site and was quite broad-based. The tech sector turned out the be the biggest winner after the news that Warren Buffett when on another spending spree in AAPL shares. That boost propelled the stock price to new record highs and due to its heavy weighting in QQQ pushed the ETF’s price above the 50-day average.
Unfortunately, the DIA and SPY remain under the 50-day average which means the bulls have a lot more work ahead of them. Keep in mind the indexes still have a lot of overhead price resistance to deal with, and all four indexes are still in down trending patterns. I wouldn’t expect the bears to give up easily and with the Dow, over 700 points off the low printed on Thursday, some profit taking is not out of the question. The good news is that currently, the Dow Futures are suggesting a positive open. The bad news is that the Dow will have to rally more than 230 points to test the 50-day averages and more than 550 points to break the lower high resistance. Possible yes, but a tall order when you consider China Trade negotiations, a North Korean talks, and the Iranian Nuclear deal that could easily present stumbling blocks.
Trade Wisely,
Doug
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THS Printed A Weekly Cradle Pattern
THS printed a weekly cradle pattern and closed over the daily 50-SMA making THS an (RBB) Rounded Bottom Breakout. Friday THS ran to the Dotted Duce indicator and rested. I would expect more rest then a trade to the $50.15 area followed by a challenge of the 200-SMA. With a test and success of the 200-SMA, $62.70 would be the next trade.
We will cover more details about stops and entries in the HRC trading room. Live Members Morning Prep starting at 8:45 AM Est. With Steve Risner and Rick Saddler at 9:10 am this morning.
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SPY • Bullish Engulf
Well, it looks like the Bulls were feeling pretty good about themselves, big Bullish Engulf after a Hammer and off the 200-SMA. I hope they know the work is not over yet. The 50-SMA and $271.30 will require more bulls and more strength. If the buyers can capture $272.30 successfully, they would be above the 23.6 Fib line, a good place to be if you a bull. QQQ’s, DIA’s and IWM all acted very well Friday and the QQQ’s and IWM both closed over the 50-SMA
The VXX chark lost the 50-SMA and looks to be testing the 200-SMA once again.
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Testimonial
I have been a member of HRC for five years, RWO for three years. I applaud the efforts of all coaches Rick, Doug, Ed and Steve (also fellow members) in helping me become a better trader than I was starting out and I am still learning. Doug reinforces the “Price is King” mantra every day since we traders tend to forget it in the midst of finding the next ‘sure thing’ indicator. Rick, will make us sometimes answer our questions to foster the thinking and quicken the learning process. Over the years, I have been in many trading rooms. I am here to stay. This room and its members are the best. Period!
Fred Narielvala
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advice to anyone except for the trading desk of Hit and Run Candlesticks Inc.
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Insipid
If you listen to the financial news, they blame yesterdays 300 point Dow selloff on Trade War jitters. Okay, if that’s the case what changed midday to cause the rally that recovered the entire selloff to close the day up 5 points? If I were to define the price action in a single word, it would be Insipid, (no vigor). The bulls are certainly lacking vigor unable to find buyers even on strong earnings reports. And although we are in a current downtrend, the bears also seem lacking conviction allowing intraday whipsaws and reversals to occur almost daily.
The fact is after the unprecedented run up last year that overpriced the market this is a very normal process of trying to renegotiate prices. Admittedly it’s extremely frustrating and very challenging to trade. With the DIA and the SPY holding on to their 200-day averages yesterday I would love to say it now over but honestly I don’t think that true. Although we may get a relief rally, I think the chances of difficult price action through the summer months is a high probability. The good news is money can still be made with good technical analysis and selective stock picking. The big intraday swings will eventually diminish, and the technical analysts will rule supreme. There may be fewer trending stocks to choose from, but the quality of a trade is always more important than quantity.
On the Calendar
Only one market-moving report and a parade of Fed Speakers for this Friday’s Economic Calendar. Before the bell at 8:30 AM Eastern we will get the very important Employment Situation report. Consensus expects the April nonfarm payrolls grew by 191,000 in April with the unemployment rate slipping 1-tenth to 4.0 percent. Average hourly earnings will tick up by only 0.2 percent with the yearly rate holding steady at 2.7 percent. The forecast also expects manufacturing payrolls to post solid growth of 15,000. The workweek is seen unchanged at 34.5 hours with the labor participation rate coming in flat at 62.9. The oil rig count is at 1:00 PM and there are 7 Fed member speaking engagements throughout the day to close the calendar week.
On the Earnings Calendar, there are 95 companies expected to fess up to their results today. Next will is another huge week of earnings with around 1400 expected reports to keep us on our toes.
Action Plan
No matter how if you were a bull or bear yesterday was frustrating because the market does not seem capable of holding on to a direction for an entire day. The Dow dropped 300 points in the morning and then rallied about the same in the afternoon. After all that movement it ended the day flat. A frustrating whipsaw to be certain.
The good news – The DIA and the SPY ultimately held the 200-day-average and printed a Hammer Candle Pattern. The bad news – A Hammer Candle Pattern requires follow-through, and currently, the futures are pointing to gap down open. Couple that with the fact the bulls have not been able to find buyers even on great earnings reports it tough to believe in them enough at this point to toss caution to the wind and buy this low. With the weekend coming and the news whipping up trade war fears it might be wise to exercise some caution.
Trade Wisely,
Doug
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Now that the US has officially left the Iran nuclear agreement markets around the world are responding higher. Perhaps not the catastrophic event the media spin was alluding to, at least for now. With Futures pointing higher the Dow and SP-500 poised to break the above their 50-day averages at the open. A very welcome site if you happen to be bullish. Getting above this important level is one thing, now it’s up to the bulls to prove they can hold it as support. Something they have been unable to do since early February.
