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Virus Is More Than the Bulls Can Ignore?

February 24, 2020 by Ed Carter

On Friday, concerns over coronavirus spread led to a rough day on Wall Street. The major indices all gapped lower and saw follow-through as the bears were in control most of the day. At the close, the SPY was down 1.03%, the DIA down 1.04%, and the QQQ down 1.92%. The VXX climbed on the day but closed back below 15 while the T2122 remains in the mid-range. None of the 10 sectors were in the green, but Technology, Consumer Cyclical, and Energy took by far the worst beatings. This all gave us the first Weekly black candle in the QQQ since November.

However, it is worth noting that the bulls did push markets up off the lows during the last half hour. So, the 50sma held in the DIA and potential support levels held in the SPY and QQQ. The point is that we were extended to start and due for some pullback. However, we didn’t see a lot of bulls jumping out of windows and we are still within about three percent of all-time highs.

After the close Friday, it was announced that WFC had agreed to pay $3 billion in a settlement with the Federal government to avoid criminal charges over their decade-long fraudulent sales practices. GOOGL also reached a settlement with all 50 state attorneys general to allow outside consultants to dig into Google business practices (as part of an anti-trust investigation), but force some confidentiality agreements on the consultants. This will pave the way for the antitrust investigation to proceed.

Over the weekend the coronavirus outbreak continued. The count is now at 80,000 confirmed cases and 2,600 deaths attributed to the virus. However, these numbers are suspect as China has revised the methods they use to count cases three times since the original report. In addition, both the Chinese and some other governments are still downplaying the impact. For example, at the G20 Summit, the I.M.F. said the outbreak would only trim 0.1% off their global growth forecast. China went so far as to urge businesses to reopen and ease restrictions on travel in Wuhan. (The easing of travel lasted less than three hours before they had to lock things down again.)

However, the W.H.O. is reporting an alarming jump in cases outside of China. For example, South Korea saw exponential growth in cases this weekend, with a 20-fold increase to over 750 cases and 12 deaths as of Sunday night. Iran and Italy have also seen outbreaks. The Italian outbreak (160 confirmed cases) has seen Austria close its border with Italy…and both are inside the EU. The same is true for Iran (61 cases and 12 deaths) with Turkey closing its Iranian border. Ominously, the W.H.O. says the Iranian cases are a particular concern because their cases come from different areas of Iran and all from people with no direct connections to China.

Overnight, Asian markets were red across the board, with South Korea (-3.87%) and Australia (-2.25%) taking major hits. Europe is also bright red from end to end so far, with all the major bourses down well over 3.5% at this point. As of 7:30 am, U.S. futures are also pointing toward a large gap lower of between one and two percent in the major indices.

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There is no major economic news scheduled for Monday. On the earnings front, there are no major reports before the open. However, HPQ, INTU, KEYS, and OKE all report after the close.

The bears did create some follow-through on Friday, but the bulls didn’t throw in the towel. However, the spread of the virus impacts far beyond Chinese borders may finally be negativity that the bulls cannot ignore. The weekend business and especially virus news are heavily in the bear’s favor. So, we remain not too far from all-time highs, but it looks like a very rocky morning coming up for the bulls.

Unless you are extremely quick, nimble and experienced, this market is not the river you should be trying to swim. Manage the trades you are in and think twice about chasing anything in such a volatile market. Use caution. Take profits and keep moving stops. Remember that sitting on your hands can sometimes be the best move you can make. Whatever you do, DO NOT CHASE and don’t lose your discipline. Our job is to just rack up consistent gains, not find winning lottery tickets.

Due to market conditions this morning, there will be no trade ideas today. Manage the trades you are in now. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Mr. Market Showed His Whip

February 21, 2020 by Ed Carter

After a mild open, there was a sharp and strong selloff in the late morning. Some sellers may have been reacting to a rumor of a spike in coronavirus cases in Beijing (away from Wuhan). Regardless of the cause, this spike downward put the bears in control for the day. However, as usual, the bulls spent the rest of the day slowly and steadily working to recover. That whipping action took its toll on many traders.

At day end, the SPY was down 0.41%, the DIA down 0.45%, and the QQQ down 0.93%. All three major indices printed indecisive candles with large lower wicks. While the VXX remains very low (essentially no market fear), at 14.04, Gold and Bonds were both higher on risk-haven trades.

In coronavirus news, the headline numbers are now 77,000 confirmed cases and 2,250 deaths. (Beware the numbers as there was a third round of debate and change in China’s reporting methods overnight.) While that rumor of a spike in cases in the Chinese Capital was unconfirmed, there definitely has been an outbreak in South Korea, which has now placed two provinces under “special authority” due to health emergencies and also reported its first death. Japan also reported two deaths and growth in the number of new cases. Iran also reports an outbreak with 13 deaths, over 500 confirmed cases, and their national health agency said it is likely the virus now exists in all major Iranian cities. Still, the vast majority of cases remain in China.

However, the W.H.O. held a news Conference Thursday to say that while this is true now, it may not be the case for long. They also called for more global funding to fight the disease. In addition, they cast more doubt on Chinese data by flat-out saying that most of the “new” cases and deaths being reported daily are actually days to weeks old.

Overnight, Asian markets were mixed but mostly in the red. Europe is also mixed, but may be leaning just a little to the green side at this point. As of 7:45 am, U.S. futures are also pointing toward a lower open by three-tenths of a percent in the major indices.

Friday’s major economic news includes Feb. Mfg. PMI and Feb. Services PMI (both at 9:45 am), Jan. Existing Home Sales (10 am), and four Fed speakers throughout the day. The only major earnings on the day are DE and PNW, both before the open.

While there was a brief pounce by the bears mid-day Thursday, the bulls refused to give ground easily. So, we remain very near all-time highs, but showing some signs of consolidation or even an early glimpse of pullback. However, so far at least, it hasn’t paid for those who bet against the bulls and the trend still remains bullish.

Remember that Friday is payday. So, take profits and keep moving those stops. It pays to plan the trade and trade the plan. Don’t chase or get complacent and let a profitable position head South. Do not forget that as traders, our job is to keep racking up base hits.

No Trade Ideas for Friday. It’s payday, so take some profits and make sure you are set for weekend headline risk. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Bulls Just Keep Running

February 20, 2020 by Ed Carter

The bulls are just relentless. A gap higher (strong one in the QQQ) led to a green day in the markets. The DIA was up only 0.39%, the SPY up 0.48%, and the QQQ up a strong 0.96%. The led to another new all-time high close in both the SPY and QQQ. While the SPY and DIA were not decisive, the QQQ put in a strong white-body candle. Again, the VXX shows no fear in the market at 13.56 and the T2122 remains in the mid-range at 61.13. The long and short of it is that nothing has slowed the bulls much in this run. This is the case despite the NASDAQ being well extended and the large-cap indices having consolidated or even looked toppy recently.

On the news front, the Producer Price Index for January came in much higher than expected (highest in 18mo), but Building Permits were also higher than expected. The Fed speakers and FOMC Minutes both confirmed that no rate changes are expected this year. However, it also confirms that the Fed does see coronavirus as a global economic threat. Both Bloomberg and CNBC report that other analysts and firms also think the market is underestimating the virus impact, but so far the bulls could not seem to care less.

On the coronavirus front, the headline numbers are over 76,000 confirmed cases and about 2,150 deaths worldwide. With that said, new cases reported in China continue to show a trend toward slowing growth. However, China has changed the way they report cases again, which dramatically lowered the numbers from yesterday. In terms of impact, there were rumors of the Chinese government either pumping money into or simply buying out their airline industry, which has been decimated by over least six weeks without flights. In addition, 10 days after it was supposed to restart, Foxconn (AAPL main iPhone supplier) said it will cautiously restart production in its larger plants.

Overnight, Asian markets were mixed. On the other hand, Europe is red across the board at this point in their day. As of 7:45 am, U.S. futures are also pointing toward a mildly lower open, looking to open down less than two-tenths of a percent in the major indices.

Thursday’s major economic news includes Weekly Jobless Claims and the Feb. Philly Fed Mfg. Index (both at 8:30 am) and Oil Inventories (11 am). On the earnings front, AEP, CPB, HSIC, HFC, HRL, LKQ, NEM, NCLH, PWR, SO, TFX, VTR, and VIAC all report before the open. LNT, COG, ED, and SBAC report after the close.

The bulls haven’t even hesitated over coronavirus so far. It certainly hasn’t paid for those who bet a pullback must take place. However, more and more analysts are expecting that pullback to come. Meanwhile, the markets just keep climbing that wall of worry. This, of course, leads to a concern about overextension, especially in the QQQ.

So, the trend remains bullish and the major indices are all at or very near their all-time highs. However, we need to keep in mind that the large-caps have been indecisive for a few days now, overextension is real, and Logic would tell us there will eventually be some market impact from a global event (particularly one devastating the second largest economy in the world).

So, remain cautious and continue to be nimble or hedged. Just keep consistently taking profits and moving stops. Plan the trade and trade the plan. Don’t chase or get complacent and let a profitable position (or several) go South. As traders, our job is to keep producing those singles and doubles, hit an occasional home run among a string of strikeouts.

Swing Trade Ideas for your consideration and watchlist: ZTS, MSI, CTSH, ALL, CLX, KO, WRB, ZBH, DHI, EHC, MSFT, ROL, CSX, MS, INFO. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Caution Signs Persist – Bulls Indifferent

February 19, 2020 by Ed Carter

After bad weekend news from PIR and AAPL, WMT missed expectations in the premarket Tuesday. This caused a gap down at the open. However, after a sideways grind in the morning, the bulls slowly climbed back up all afternoon. The SPY closed down 0.26%, the DIS down 0.54%, and the QQQ up 0.04%, which was another all-time high close for the NASDAQ. The SPY and DIA printed indecisive candles, while the QQQ was more bullish. However, all three major indices are looking at least like they are consolidating, if not even a little toppy over the last four candles.

On the news front, CNBC reported that company stock repurchases (buybacks) are down so far this year in the slowest start since 2013. This indicates companies are holding on to their cash, which is usually an indication of their own concern or at least uncertainty over their future performance. As a point of reference, buybacks are down 30% from 2019 levels. However, to be fair, 2019 was a record-breaking year for buybacks.

After hours, GS reported a study that found that almost all of the entire market’s earnings growth for Q4 came from the five mega-cap tech companies (AMZN, AAPL, MSFT, FB, and GOOG). Russell 2000 earnings fell 7%, the S&P 500 earnings grew 2% on average…but those 5 companies (which are included in the S&P) were up 16%. The report went on to say that those 5 stocks now comprise 18% of the S&P500 market cap and the growth has not been this concentrated since the 2000 tech bubble burst.

On the coronavirus front, MDLZ reopened some of its manufacturing plants in China as did GM and FCAU. However, the W.H.O. continues to say it is too early to determine whether the spread is slowing inside China. As another example, Adidas says seen an 85% drop in their business activity (sales and manufacturing) in the last month. The impact numbers themselves continue to grow as now more than 75,000 confirmed cases have been reported and the death toll has risen to over 2,000 globally. Bear in mind that most of those cases are in China.

Overnight, Asian markets were green across the board. In Europe, the bulls are running as well with green in all the major bourses. As of 7:45 am, U.S. futures are also pointing toward a higher open of between a quarter and half a percent in the major indices.

Wednesday’s major economic news includes Jan. Building Permits, Jan Housing Starts, and Jan. PPI (all at 8:30 am), as well as the FOMC Minutes release (2 pm). There are also a number of Fed speakers during the day. On the earnings front, ADI, ETR, GRMN, GPC, and DISH all report before the open. ALB, CAR, XEC, ES, HST, MOS, PXD, O, SNPS, and WMB report after the close.

The bulls have seemed to be running low on energy for the last few days. However, there is has been no evidence that the bears can take advantage of this lack of bullish momentum. This morning it looks like the bulls may try another little push. The trend certainly remains bullish and all the major indices are still very near their all-time highs. However, we need to keep in mind that markets have been indecisive for a few days now.

Swing Trade Ideas for your consideration and watchlist: BYND, HOME, TWTR, CNC, IPG, AKAM, BLL, CTSH. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

WMT Misses – AAPL Warns – PIR Files

February 18, 2020 by Ed Carter

In front of the long weekend, markets put in an indecisive sideways grind all day on Friday. All three major averages printed Doji type candles with the SPY gaining 0.16%, the DIA losing 0.09%, and the QQQ gaining 0.29%. This made for another new all-time high close in the SPY and QQQ. The VXX was down again, closing at 13.52 and the T2122 rose a bit but remains in the mid-range at 71.59.

Among the news stories that may have helped markets in the afternoon was a CNBC report that the White House is considering tax incentives to encourage more investing in the stock market. This may have helped offset slightly worse than expected Industrial Production numbers from before the open. The only Friday news on the coronavirus was that China had “sharply tightened” the already strict quarantine in Wuhan. However, after the close, CNBC reported that 20% of the S&P 500 members had already warned that the virus would have an impact on operations, financial performance or both.

Over the weekend, PIR declared bankruptcy, but also released a statement that they had reached an agreement with lenders to provide it with $256 million to keep it afloat while it tries to find a buyer. This comes six weeks after it reported both a loss and sales that were down over 11% from the prior year. This may or may not provide a read-through to competitors like BBBY. It is also worth noting that WMT missed it’s earnings on both the top and bottom line when it reported this morning.

On the coronavirus front, in some positive news, Macao reopened its casinos on Tuesday following a two-week shutdown. In addition, the W.H.O. reported that the trends outside of China seem promising (whatever that means exactly). However, the numbers continue to grow as more than 72,400 confirmed cases have been reported and the death toll has risen to nearly 1900 globally.

In terms of impacts, the event cancellations (such as annual conventions in Geneva, Switzerland) and new quarantines and travel restrictions (780 million people in China are subject to lock-down or some form of travel restriction related to virus prevention) continue. AAPL also warned that it will not meet its January-released guidance for the second quarter. They blamed iPhone supply chain constraints (China Foxconn operations) and reduced Chinese demand as the reasons.

Overnight, Asian markets were mixed, with Japan, Korea, Australia, and Hong Kong deeply in the red. Meanwhile, Shenzhen was strongly green. However, as of this point in their day, Europe is in the red across the board. As of 7:45 am, U.S. futures are pointing toward a gap lower of half a percent across the major indices.

Tuesday’s major economic news is limited to NY Empire State Fed Mfg. Index (8:30 am). However, there are some earnings, with AAP, ALLE, ECL, EXPD, MDT, VMC, WMT, and WAB all reporting before the open.

As we come back from a long weekend, it’s time to see if the bulls are ready to run again or we might see some pullback. The trend continues to be strongly bullish and all the major indices are very near all-time highs (including even the IWM). It certainly has not paid to fight the trend recently. However, we are still a bit extended from averages and earnings news is not great.

Just maintain your consistency. Keep locking in profits, being cautious and remaining nimble or hedged. Remember, make the trade come to you, plan the trade and trade the plan. Don’t get complacent and let a profitable position (or several) go South on you. Our job is to keep producing singles and doubles, not a string of strikeouts and an occasional home run.

Swing Trade Ideas for your consideration and watchlist: NWL, SPGI, PYPL, FLO, FLDM, VSH, QRVO, BKE, DIOD, VIVE, IRWD. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Back to Bullish or Book Some Profit

February 14, 2020 by Ed Carter

Markets gapped lower Thursday on fear stoked by the huge jump in reported cases and deaths from the coronavirus. (As noted yesterday, this jump was likely largely due to the Chinese changing the way they report cases, which may be prone to cause trends that are less smooth.) At any rate, after the gap down, the bull immediately charged in to fade the gap. From that point onward, the rest of the day was a sideways grind around the break-even line. For the day, the DIA closed down 0.30%, the SPY down 0.11% and the QQQ down 0.13%. So, we recorded a down day, but not by much considering the gap down. The VXX remains low at 13.69 and T2122 fell again, but remains in the mid-range at 69.27.

In the news, the Fed announced it will reduce new Repo market purchases (purchases will continue, just at a lower rate). AMZN also obtained a temporary injunction against MSFT working on the Pentagon cloud contract. WMT also announced it would discontinue its unprofitable high-end personal shopping service called Jetblack and W reported it will cut 500 jobs (3% of its workforce). In other market news, CSCO stock was hammered Thursday after it reported falling revenue and failed to beat earnings expectations on Wednesday evening.

However, once again coronavirus was the top story of the day. As mentioned, China changed its reporting methods and overnight Wed. reported over 15,000 “new” cases and 250 “new” deaths. Obviously, this scared markets and the White House did not help matters by publicly stating it did not have confidence in the information coming from China. (While true, expressing that skepticism after such an increase in the numbers was reported does not help public confidence.)

As of Friday, the counts stand at 64,000 cases and almost 1,400 deaths. The impact is continuing to spread as airlines, cruise lines and other travel-related industries have been hit hard by decreased demand. In addition, KHC and FCAU were among the companies that closed their manufacturing operations in China within the last 24 hours. Many other companies warned of revenue and earnings impacts, perhaps obviously including BABA.

Overnight, Asian markets were mixed. However, as of this point in their day, Once again, Europe has shaken off the fear and is mainly green, As of 7:30 am, U.S. futures are back on the bullish side, pointing toward a gap higher of between a quarter and half a percent across the major indices.

Major economic news today includes Jan. Retail Sales Core and Imports/Exports (both at 8:30 am), Jan. Industrial Production (9:15 am), Michigan Consumer confidence (10 am) and another Fed speaker just before noon. In addition, both China and the US are scheduled to reduce more tariffs on Friday. The only major earnings reports for the day are NWL and PPL, both before the open.

Friday could be a selling day as traders look to lock in gains in front of a 3-day weekend. (Don’t forget this is a long weekend with US markets closed Monday for Washington’s Birthday.) Certainly, there are great headline risks from coronavirus over that period, but also from the follow-on impacts/statements of businesses over the period as well. However, the trend remains strongly and stubbornly bullish and all the major indices are very near all-time highs (including even the IWM).

All I can do is continue to tell you to not fight the trend, but also keep locking in profits, being cautious and remaining nimble or hedged. Remember to make the trade come to you (rather than chasing), plan the trade and trade the plan. Don’t get complacent and let a profitable position (or several) go South on you.

No Swing Trade Ideas for your consideration and watchlist on a Friday in front of a 3-day weekend. Today is payday. So, book some profits. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Another Gap But A Different Direction

February 13, 2020 by Ed Carter

The bulls gapped markets higher Wednesday and then slowly ground higher the rest of the day. All three indices closed near their highs and at new all-time high closes. The QQQ gained 0.97%, DIA gained 0.95%, and SPY lagged at a gain of 0.64%. At the same time VXX fell to 13.40 and T2122 inched closer to overbought territory at 79.81. In short, the bulls continue to run hard and although we are extended from the moving averages, they are only in the mood to hear good news these days.

On the news front, Fed Chair Powell testified in the Senate, largely reprising his Tuesday Congress testimony. Essentially, he said the economy is in a good place, the Fed has a close eye on the impact of the coronavirus and that no more Fed moves are needed in the immediate future. He also said that economists should have a better handle on the virus’ impact on the US economy “soon.” In other economic news, the Federal Deficit has jumped 25% in the last year and now stands at $1.1 trillion per year. Federal revenue (taxes) are up slightly over that period, while spending has increased 9.6%.

In the virus arena, China has changed the way they report new cases going forward. Under the new method, there must be not only a positive test, but also a fever before a patient is counted as a confirmed case. This has the effect of lowering the number of new cases reported on an individual day and may lead to erroneous optimism. On the other hand, it could lead to pooling of reports causing more jumpiness in the trend line. For example, the number of cases jumped 15,000 last night due to this effect. As of now, the confirmed count remains over 60,000 and the death toll 1,369.

As far as virus impact is concerned, more than 85,000 flights to/from China have been canceled so far (with BA claiming this is having a major impact on sales due to reduced travel and cargo activity). A major technology conference in Europe has also been canceled over virus fear (after most major companies had pulled out and forbidden employee attendance). Finally, OPEC has slashed its global oil demand forecast by 19%, citing virus impacts.

Overnight, Asian markets were in the red as the jump in reported virus cases spooked investors. Once again, Europe has followed Asia as we see red across the board. As of 7:45 am, U.S. futures are again pointing to follow the rest of the world with a gap lower of between six and eight-tenths of a percent.

Major economic news on Thursday is limited to Initial Jobless Claims and Core CPI (both at 8:30 am). In terms of earnings, AIG, BWA, DUK, FIS, HII, IPGP, INCY, IRM, KHC, LH, PEP, R, WM, and ZTS all report before the open. Meanwhile, ANET, DLR, EXPE, LBTYA, LBTYK, MHK, NVDA, and RSG report after the close.

What a difference a night makes. Today it seems Mr. Market is saying “on second thought, let’s worry.” Certainly, the signs of risk have been there with OPEC cutting global oil demand forecasts and companies left and right decrying the impact on their expected operations. However, we (or at least I) cannot predict the market’s reaction.

The trend remains strongly bullish and all the major indices are now in blue sky territory (if maybe a bit extended). It sure hasn’t paid to be short lately, despite the risks, All I can do is continue to tell you to keep locking in profits, being cautious and remaining nimble or hedged. Don’t get complacent and let a profitable position (or several) go South on you.

Swing Trade Ideas for your consideration and watchlist: SPGI, TWTR, XPO, AAPL, TGT, APO, SPXS, TZA, THC, SQQQ, VXX. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Another Day Another Gap

February 12, 2020 by Ed Carter

Markets gapped higher on Tuesday, following through on Monday’s rally. However, after the gap and initial rally, markets faded the gap the remainder of the day. At day end, the SPY closed up 0.17%, the DIA closed dead flat and the QQQ up 0.02%. While all three printed new all-time highs during the day, only the SPY and QQQ closed at new high closes, and even then, just barely. The VXX gained very slightly but it remains extremely low at 14.12. Meanwhile, the T2122 has climbed back near, but not in overbought territory at 76.02.

The main news on the day came from the Fed. They announced that US Household Debt is now at the highest level in 12 years. This, along with climate change, severe weather, and the coronavirus are all risk factors impacting economic forecasts. Chairman Powell again rejected the idea of negative rates. However, while he was testifying, President Trump (as is his norm) repeated his demand that the Fed go to negative rates and then blamed Powell for the afternoon selloff in the US markets. Meanwhile, market analysts blamed the tiny intraday pullback on over-extension and possibly too much prior nonchalance about the coronavirus impact as more companies are warning of its impact.

In other news, the Federal Trade Commission announced that in a 5-0 decision, they have chosen to investigate how previous acquisitions of small companies by the largest tech companies were used to amass market power, consumer data, and market monopoly. However, just hours later, President Trump met with the CEOs of the Trillion Dollar Club (MSFT, AMZN, GOOG, and AAPL). He lauded those four companies, calling them MAGA (his campaign slogan).

On the coronavirus front, the count of confirmed cases now stands at 45,000 and the death tolls is over 1,100. In terms of impact, Hilton closed all 150 of their hotels in China, UA estimates a mild $60 million impact in Q1, and AAL extended their cancelation of all flights to/from China. Also making news was a cruise ship stranded at sea (not allowed to dock in several countries), but overnight Cambodia allowed it to dock. In addition, the W.H.O. said that even with governmental fast-tracking, the public should not expect a vaccine until at least next year, let alone wide availability of any such vaccine.

Overnight, Asian markets were in the green. Once again, Europe has followed Asia as we see green across the board. As of 7:30 am, U.S. futures are again pointing to another gap higher of between three-tenths and half a percent.

Major economic news on Wednesday is limited to Fed Chair Powell’s Senate testimony (10 ma) and Crude Oil Inventories (10:30 am). However, there will also be another Fed speaker during pre-market hours. In terms of earnings, CME, CVS, GPN, IPG, IQV, TAP, MCO, and NBL all report before the open. Meanwhile, AMAT, CDNS, CF, CSCO, CTL, EFX, EQIX, IFF, MGM, MRO, NTAP, REG, TRIP, and WELL report after the close.

The DIA sits at potential resistance for a second straight day. However, in general, the bulls continue to see nothing but the upside. The trend remains clearly bullish, and we are a little less extended than yesterday. Don’t get complacent, expecting the bulls to run every day forever. Remember to keep locking in profits. Don’t let a profitable position go South on you.

Swing Trade Ideas for your consideration and watchlist: HCA, SC, MNST, AVY, ZBH, FAST, BLL, YNDX, ALL, ITW. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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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Bulls Liking the Blue Sky

February 11, 2020 by Ed Carter

Markets ran down at the open Monday, but almost immediately the bulls stepped in. After that rebound and run up into the highs at 10:45am, there was a sideways grind in a tight range until 3pm. At that point, the bulls stepped back in again to drive higher right into the close. It seemed to be the big tech names that led the market higher, with beautiful candles from AMZN, MSFT, AMD, NVDA, and GOOG. For the day, the SPY was up 0.75%, the DIA up 0.60%, and the QQQ up 1.21%. Of these, both the SPY and QQQ gave us new all-time high closes. All three printed Bullish Engulfing signals. This all implies new higher-highs Tuesday.

On a light news and earnings day, the coronavirus continued to be the top story. The death toll has now exceeded 1,000 with 43,000 confirmed cases. In terms of impact, CNBC reported that their survey of economists is indicating that the US GDP for the first quarter will likely be reduced to 1.2% due to the impacts of this virus. (That’s down almost an entire percent from Q4.)

It is of note that the number of new cases reported Tuesday in Hubei Province has held relatively stable at about 2,500. This may indicate the spread is slowing, which would be great news. However, both the W.H.O. and the Chinese government are cautious not to show optimism. They say that they are looking for stabilization outside the quarantine regions of China within a few weeks, but inside the quarantine zone, they expect the outbreak may take longer to subside.

In related news, some Chinese plants reopened for the first time in weeks on Tuesday. This was a relief for global supply chains in industries like auto and electronics. Still, the ramp-up time for individual plants or even regions is unknown. Obviously that time will depend on how many employees return and whether virus preventative measures might hinder productivity. Typical ramp-up takes 1.5 weeks to get back to normal productivity. As a possible indication for this instance, Bloomberg reported sources at the Foxconn iPhone plant in Zhengzhou said that only 10% of the workforce returned on their first day back open.

In other news, details from President Trump’s proposed 2021 budget filled the news void. His $4.8 Trillion plan lines up with his campaign priorities but also abandons the pledge to eliminate budget deficits in 10 years. I will skip the details because as is typical of budgets, particularly in election years, this one has no chance of passing the House, who has the final say, as is. This is more of a set of campaign bullet points and negotiation tactics, as will be the responses.

It is also worth noting that S shot higher in after-hours trading last night on rumors that a Federal Court has approved the T-MUS merger.

Overnight, Asian markets were in the green. Europe has followed Asia so far today as we see green across the board. As of 7:30 am, U.S. futures are pointing to another gap higher of between three-tenths and half a percent.

On Tuesday, Fed Chair Powell begins two days of Congressional testimony at the same time as the JOLTS report (10 am). In the afternoon there will be a trio of other Fed speakers. On the earnings front, D, EXC, HAS, HLT, MLM, MAS, OMC, UA, and UAA all report before the open. After the close, AKAM, AMCR, AIZ, PEAK, UDR, and WU will report.

The bulls continue to see only the bright side. While the DIA sits at potential resistance, the other two major indices are in “blue sky.” The trend remains clearly bullish, but we remain extended, especially in the QQQ. As always, stick with the trend and remember that Mr. Market can stay too far on any one side longer than we can be right while early. Just don’t let profitable positions go South on you. Keep taking profits, using prudent hedges, and reducing risk.

Swing Trade Ideas for your consideration and watchlist: TDOC, ZBH, ERI, AAXN, ZEN, LITE, JNJ, SPLK, PEN. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Bear Signals and Virus Fear

February 10, 2020 by Ed Carter

Markets took some profits on Friday as the US followed the pattern of Asia and Europe for the day. The QQQ and SPY ended the day as Doji candles after some volatility, but the DIA printed a large-body black candle to print an Evening Star signal. The SPY was down 0.53%, the DOA down 0.87%, and the QQQ down 0.43%. As a result, the VXX climbed slightly to 14.38 while the T2122 fell again to 33.94 (still not oversold).

The big story on the day seemed to be a complete reversal by the Fed from what was told to the financial press just two days earlier. On Friday, the Fed reported to Congress that the coronavirus presents a new risk to the US economic outlook and they warned of disruptions to global markets. Specifically, the Fed reported, “Because of the size of the Chinese economy, significant distress in China could spill over to U.S. and global markets through a retrenchment of risk appetite, U.S. dollar appreciation, and declines in trade and commodity prices.”

On Tuesday and Wednesday, both Fed speakers and the President’s Chief Economic Advisor Larry Kudlow had said the virus would not have a significant impact on the US economy. This reversal may help explain the profit-taking on Friday.

Over the weekend, the virus has continued to spread and has surpassed the SARS outbreak of 2003 in terms of impact. The number of confirmed cases has now reached over 40,000 and deaths now exceed 900. One of those deaths was in the US. In terms of impacts, there is serious scrambling going on throughout the Auto and Electronics industries as the vast majority of those supply chains run through China. In other words, you can’t make a car in Detroit, Berlin, Japan or Mexico if the parts have not arrived from China.

Overnight, Asian markets were in the red. Europe is mixed at this point, but most of the major bourses are red…the FTSE being the striking exception. As of 7:45 am, U.S. futures are flat, sitting on either side of the break-even line.

There is no major economic news for Monday. However, there are a couple of Fed speakers during the day. Earnings are also light for the day, but AGN, QSR, L, DO, IVC, and AVYA report before the Open. After Monday’s close, CHGG, MELI, RNG, XPO, APPS, ELY, MESA, MOH, IIVI, JCOM, RE, RPD, VRNS, DVA, BLKB, VOYA, FLDM, FRT, ICMB, and PYX all report.

Markets took some profits Friday, but the bulls have been resilient and relentless for a long time now. The trend remains clearly bullish, but we are still a bit extended and there is no new impetus with light earnings and no planned economic news Monday. Perhaps the rumors of President Trump’s election-year budget (apparently going to expand tax cuts) will be the driver today.

Again, the bias is on the long side, but the candle patterns are on the bearish side. I think we need to remain cautious. At the very least take a look at bearish setups or hedges. I know I sound like a broken record on the topic, but nobody ever went broke taking profits and reducing risk. Plan the trade, make the trade come to you and then trade the plan.

Swing Trade Ideas for your consideration and watchlist: PLCE, FTK, SLCA, SLM, KSU,DKS, CROX, KLAC, SWKS, QRVO, ZM. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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