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Shutdown Extended But Stimulus On Way

March 30, 2020 by Ed Carter

With hopes of the stimulus bill in place, markets still gapped down Friday. However, bulls stepped in and rallied back up near the previous close. After the bill was passed, things went fine until 3:30 pm when markets sold off hard across the board as traders seemed to want to get flat for the weekend. As a result, the SPY closed down 3.02%, the DIA down 3.87%, and the QQQ down 3.44%. The VXX was back up to 50.60, while the 10-year bond yield fell again to 0.69% and Oil (WTI) fell to $21.57/barrel). For the week, SPY was up 10.71%, DIA up 12.74%, and QQQ up 8.55%.

Friday evening, the President signed the stimulus bill. At first, he called it a $2.2 Trillion bill as widely publicized. However, he then clarified it was really a $6.2 Trillion plan (expandable based on need apparently). This is in addition to the $4 Trillion the Fed has (so far) pumped into asset purchases. On Saturday, Treasury Sec. Mnuchin said the small-business loans part of the bill will be “up” this week and that stimulus checks will start being direct-deposited within 3 weeks. If these times hold true, both would be unprecedented timetables for government programs. Sec. Mnuchin also told CBS news that the Treasury Dept. was ready to buy warrants and equity stakes in US companies if needed. Others speculated the Fed may also do this, but that would require the approval of Congress to widen the Fed mandate.

On Sunday evening, the President extended the US Social Distancing guidelines through at least April 30. So, the “American ReOpening” will be pushed out at least 3 more weeks beyond his original Easter date. Credit where it’s due, if he sticks to this latest stance, that will be more in-line with the recommendations of contagion-spread experts and what we have seen in other countries so far. Earlier Sunday, the President had also decided not to quarantine virus hot spots. Instead “travel advisories” have been put in place with the hope the public will follow them. This may be problematic as Americans continue to meet in large groups such as the mega-churches where hundreds gathered Sunday.

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More ominously, on Sunday Dr. Fauci (NIH) said that “looking at what we’re seeing now, we’re looking at 100,000 to 200,000 deaths in the US.” However, he was also quick to say that number is a moving target that could easily be wrong either way and he did not want to be held to any estimate. This number of deaths would be 50 times the number of deaths we had at the time of the comment. If correct (and he is the top infectious disease expert), we probably should expect a much slower economic recovery than some had forecast.

The global headline virus numbers continue to grow exponentially, now at 735,200 confirmed cases and 34,808 deaths. On Sunday, the UK told its public to expect their lock-down to last months, not weeks. Meanwhile, the number of US cases has risen 67% since Friday morning. The US now has 142,793 confirmed infections and 2,490 deaths.

Overnight, Asian markets were mixed, but mostly well into the red. In Europe, markets are red across the board, but not down as heavily as they were Friday at least at this point in their day. As of 7:30 am, after another wild overnight session, the futures are pointing to mixed to slightly green open. It’s worth noting that Oil (WTI) dipped below $20/barrel overnight on very weak demand.

The only major economic news on Monday is Feb. Pending Home Sales (10 am). There are no major earnings on the day.

Again, markets remain very volatile and news cycles are going to be generally terrible, punctuated with occasional (probably false) hope. However, bulls may well latch onto even thin hope. So, expect erratic trading to continue. In short, as I’ve said many times, this is not a casual trader’s market. The goal now should be account preservation and preparation for when things have settled down. Don’t try to predict price action. Just wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait. Holding any trades overnight is a risky business in this market.

Sorry, but due to extreme volatility there are no Trade Ideas for today. 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.

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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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Stimulus Expected as US is Now Epicenter

March 27, 2020 by Ed Carter

Armageddon seemed to be already priced into the market as the bulls absorbed a New Jobless Claims number 5-times the all-time record and still gapped higher with follow through the rest of the day. This included a massive rally for the last 10 minutes. As a result, the SPY closed up 5.84%, the DIA up 6.14%, and the QQQ up 5.27%. This was the third consecutive up day for a total gain of 17% in the SPY, almost 21% in the DIA, and 12.5% in the QQQ. Technically, this takes us out of a Bear Market.

Speaker Pelosi said she expects the stimulus bill to pass the House by around noon Friday. Minority Leader McCarthy echoed the same expectation. In the daily briefing, President Trump explained he hadn’t needed to invoke the Defense Production Act due to companies switching production on their own, although some states and cities will disagree that has been enough. He also said that the US has done more testing than any other country. Without knowing the true numbers out of China, this is likely true. However, we did get a very late start and it is also true that as of Thursday, the US had tested 1 of every 780 people, while South Korea has tested 1 of every 150 of their people. So, we still have a way to go to get near where we need to be, but the trend is encouraging.

In business news, after the close GM announced it would be extending North American plant shutdowns, without defining a specific restart date (the previous date was April 1). This fell in line with what Ford had done a few hours earlier. GM also temporarily cut the pay of 69,000 salaried workers by 20%. Toyota also announced it will keep its North American plants close, but issued a tentative restart date of April 20.

The President announced that his folks are working on guidelines and methods for the next phase of the fight (after the re-Opening of America). This system will categorize every county in the US according to their perceived risk. Social Distancing and quarantine guidelines will be different for each category of county. The massive nationwide testing regime was not mentioned, but would almost certainly be needed for such a plan. He did mention that easing and the new guidelines will be accompanied by mass surveillance, but any such system would likely not be wide-spread enough for the entire country. So, this system would depend heavily on public compliance, self-discipline, and self-limiting of domestic (intra-county) travel. No mention was made, but presumably like the rest of the world, some type of enforcement will be required to isolate people in risky counties from the less-risky counties.

The global headline virus numbers continue to grow exponentially, now at 549,300 confirmed cases and 24,871 deaths. China is closing its borders again, as some experts are saying they may be seeing a second wave starting. The UK, PM tests positive and is experiencing mild symptoms. Meanwhile, the US has now become the epicenter of the virus (the most cases), with 85,749 confirmed infections and 1,304 deaths.

Overnight, Asian markets were mixed, but mostly green. In Europe, markets are red across the board, down heavily in the major bourses. As of 7:45 am, the futures are pointing to a 3% gap down.

Major economic news on Friday is limited Feb. Core PCE and Feb. Personal Spending (both at 8:30 am) and Mar. Michigan Consumer Sentiment (10 am). There are no major earnings on the day.

Again, markets remain very volatile. Remember that even three days of massive rally do not make a recovery yet. Don’t try to predict price action here. Wait for trades to come to you. We still have no uptrend on the daily level. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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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Record Jobless Numbers Today

March 26, 2020 by Ed Carter

Wednesday was another roller-coaster for markets. We got a gap higher on the follow-through on Tuesday’s huge rally. However, that was me with a severe selloff and then a big intraday rally on hope of a Senate deal. After some grind sideways, the bottom fell out the last 15 minutes of the day as 4 Republican Senators (Lynsey Graham, Tim Scott, Ben Sasse, and Rick Scott) pushed to cut unemployment funding in the bill and Bernie Sanders threatened to hold it up if they did not drop their demands. On the day, the SPY gained 1.50%, the DIA 2.62%, and the QQQ lost 0.74%. Meanwhile, the VXX rose to 50.90 as 10-year bond yields fell to 0.837% and Oil (WTI) fell to $24.10/barrel.

The Senate passed the stimulus deal late last night after getting all the Senators in line. Beyond that hassle, the House may be an even bigger hurdle. If a single congressman of either party objects, the bill will have to go to debate, potential amendment and a roll-call vote in the House. Unfortunately, some congressmen are threatening just that as this situation gives them a lot of leverage. And even before the bill passes or is signed, many Governors (both parties) are already saying they will need more than this bill will deliver. Gov. Hogan (MD – Rep.) who heads the National Governors Association said: “states and local governments will need to come back for more than this bill provides in the next round of stimulus.” So, once this passes, don’t expect it to be the last dollars out of Washington on this crisis.

In the daily briefing, Sec. Mnuchin said the $2.2 Trillion stimulus package would keep the economy afloat for 3 months. He also said some people could start to see the $1,200/ adult and $500/child payments in as little as 3 weeks (if they have direct deposit info on file with the IRS). However, for others, it could take as long as 3 months if checks need to be cut and mailed. Both those time periods fall in-line with what happened in 2001 and 2008. So, they sound believable.

The global headline virus numbers continue to grow exponentially, now at 487,050 confirmed cases and 22,025 deaths. Meanwhile, in the US, totals are up to 68,581 cases and 1,036 deaths. Hospitals in New York are already beginning to be overwhelmed by patients and supplies of PPE (masks, gloves, and gowns) have been exhausted despite federal help, donations, and large increases in production. In addition, Dr. Fauci (NIH) told Americans to prepare for a second wave after this one is weathered.

Overnight, Asian markets in the red again. Japan gave up 4.5% of its big gains from the prior 2 days. In Europe, markets are also in the red, down about 2% across the board so far today. As of 7:30 am, the futures are down as well, but range between down 1% (DOD and S&P) and half a percent (NASDAQ).

Major economic news on Thursday is headlined by the Initial Jobless Claims (8:30 am), which is expected to be the largest in history by a long shot. Estimates range from 1 million to 4 million new claims, but the consensus is 1.5 million. We also get Q4 GDP and Feb Trade Balance (both at 8:30 am), but these will be after-thoughts to the Jobless Claims. The only major earnings of note is LULU after the close.

Even with over $6 Trillion in stimulus coming from the Fed and now Congress, don’t think we are out of the woods yet. A ton of bad headlines still lie ahead. (For example, don’t think the Jobless Number this week will end up being the worst.) However, it is also likely that when the latest relief bill is, the bulls may latch onto this news and run.

Again, markets remain very volatile. This is not a casual trader’s market. Don’t try to predict price action here. Sit on your hands if you have to in order to keep from trading. Use this downtime to get your list of tickers ready. Get some education, refine your trading plans, and improve your trading process. Then wait for trades to come to you. We still have no uptrend on the daily level. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

$2 Trillion Deal Struck Expect More Later

March 25, 2020 by Ed Carter

Turn-around Tuesday was an amazing job done by bulls, as the rest of the world led the US to a huge gap up on hopes of a massive Federal rescue bill. Markets followed-through even when news came that there was no agreement and the Senate had adjourned for the day. On the day the SPY was up 9.26%, the DIA up 11.19% and the QQQ up 7.82%. This was the best day for bulls since 1933. As you’d expect, the VXX was down to 46.77. Oil (WTI) closed up $23.88 and the 10yr bond yield closed up to 0.834%.

Regardless of Tuesday’s optimism, the Senate adjourned in the early afternoon without a deal. However, overnight the sides agreed on a deal on a $2 Trillion stimulus package. Speaker Pelosi and Minority Leader McCarthy are now trying to get their caucuses to support any Senate deal, as-is. This would be critical to speed because it must pass by unanimous voice consent. A single objection from any Congressman will require delay while the House returns to Washington for a roll-call vote. Futures fell on word of the deal. Regardless of what happens this time, sources told Bloomberg last night that Congress is expecting two more stimulus bills before this is over.

In the meantime, following a call with major Investors and Hedge Fund managers, the President told Fox News he wants the US to be “open and just raring to go by Easter.” Reportedly, he has soured on the ideas of quarantining and social distancing because “many Americans are ignoring the suggestions” (per unnamed aides). On the other side, doctors, infectious disease experts, and even President Trump’s former head of the FDA are saying that we need at least several weeks of lock-down to stem the virus. Dr. Fauci (NIH) told the daily presser we would need to be flexible and data-driven and after that, the President agreed, seeming to step back from a firm Easter date.

The global headline virus numbers continue to grow exponentially, now at 434,866 confirmed cases and 19,607 deaths. In Asia, India locked-down its 1.3 billion people for the next 21 days. Several South American countries have also begun lockdowns. In Europe, death tolls are up again in Italy and Spain has had to turn ice rinks into temporary morgue storage. However, in positive news out of China, both Wuhan City and Hubei Province had their quarantine lifted after two months on lock-down.

In the US, totals are up to 54,963 cases and 784 deaths. New Orleans is the latest major city to order a lock-down as their number of cases exploded and Governor Edwards declared a state of emergency for Louisiana. The White House also announced that anyone who has traveled from New York should self-quarantine. In addition, New York Governor Cuomo and NYC Mayor de Blasio both decried a massive shortfall in ventilators as they expect to need 30,000 more of them in the next one to two weeks.

Overnight, Asian markets are strongly green again on the second day of expectation a US bailout plan passes and pumps up global economies. Japan was up 8% to make two straight days of massive NIKKEI gains. In Europe, markets are mixed and more muted, though mostly green so far today. In the US, futures fell on word the stimulus deal was agreed. As of 7:30 am, the futures are mixed, but mostly red with the S&P and NASDAQ pointing to lower opens and the Dow slightly on the green side.

Major economic news on Wednesday is limited to Feb Core Durable Goods (8:30 am) and Crude Oil Inventories (10:30 am). However, an agreement on a virus rescue plan will definitely be announced, if not signed during the day. Major earnings are limited to PAYX before the open and MU after the close.

Don’t think we are out of the woods and it’s all blue skies ahead. With more “stay a home” orders, company closures, and bad economic data coming, there are a ton of bad headlines we will need to ride out. In particular, we should be wary of Thursday’s Initial Jobless Claims that are expected to be the largest in history by a wide margin. However, it is also extremely likely the latest relief bill will be signed, more Fed steps will come and more stimulus bills will too.

So, markets remain very erratic and there is no reason to think that will stop. Remember, you don’t have to pick the absolute bottom to make a bundle on the rebound. So, use this downtime to get your list of tickers ready. Get some education, refine your trading plans, and improve your trading process. Then wait for trades to come to you. We still have no uptrend on the daily level. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

Reps-Dems Argue As Market Assumes Deal

March 24, 2020 by Ed Carter

Monday was another roller-coaster ride. After a limit-down in futures Sunday night, the Fed pulled out the big guns during premarket hours, saying they would do unlimited purchases of assets (QE including corporate bonds), roll out loans to businesses, and committed to $125 billion/day in Repo operations to give banks tons of liquidity. This immediately took futures positive, but hope soon faded and we gapped down at the open. After a volatile day, punctuated by a second failed vote for a relief bill in the Senate, markets closed down, but off the lows. The SPY ended down 2.67%, the DAI down 3.19% and the QQQ down just 0.14%. For some odd reason, the VXX was also down sharply (-15.56%) to end at 51.13. Oil was up almost 5% to close at $23.76. The 10-year bond yield was also down to 0.759%.

As mentioned, the huge fiscal spending bill ($2 Trillion at last estimate) failed another procedural vote again in the Senate. There were no details on remaining differences, but the two opposing camps were blaming each other. Republicans were blamed for being “too focused on business bailouts” while the Democrats were blamed for being “too focused on social spending.” Either way, there is no Senate deal yet. The House (where any spending bill must originate by law) stopped waiting as House Democrats introduced their own $2.5 Trillion rescue plan. That plan includes $500 billion in grants and interest-free loans for small businesses, expanded paid medical and family leave, $1,500 per individual payments, and increases unemployment insurance for anyone put out of work by the virus.

The President also seems to be leaning back toward his first position of “business as usual,” accept the losses and spin the story. Essentially, he is again more concerned with the economic damage that may be done and the health of businesses than with the potential loss of life and health. In his daily presser, he said the “reopening of American” is coming very soon. He also said he would soon implement a middle-ground approach of quarantining and testing some areas and groups while getting others back to business. There was no mention of the possibility that a “partial cure” may be worse in the long run, with a relapse shutting-down the country again. Regardless of the choice made, some will be unhappy. However, whether you trust health experts or this President, the gap in approach between the two does lead to uncertainty. This is also true to comparisons with other countries that have (or are) locking-down for longer periods.

In other news from the day, there appeared to be no real glitches in the first-ever day of trading with no humans on the trading floor (entirely online). BA also announced it is closing all operations for 2 weeks. The SEC also warned traders on inside trading after last week’s story about senators. Finally, the President also announced measures to prohibit hoarding, price gouging, and blocking some fake remedy sales.

The global headline virus numbers continue to climb fast, now just under 392,148 confirmed cases and 17,138 deaths. In Asia, several countries are reintroducing travel stoppages to head off a second wave of infections. In the UK, Prime Minister Johnson ordered his nation to stay at home for the next three weeks. This measure is in addition to Sunday evening’s 12-week quarantine for anyone at risk. They are also, following Germany in prohibiting any gathering larger than 2 people. Finally, the IOC has now postponed the summer Olympics, although the length of the delay is still being negotiated with Japan.

In the US, totals are up to 46,168 cases and 582 deaths. After the close, the CDC reported that the virus remains alive on the Princess cruise ship after passengers and crew had left the ship. Indiana and West Virginia ordering residents to stay at home, and Rhode Island postponing their Primary election.

Overnight, Asian markets rallied hard on a US bailout plan passing and pumping up global economies. In Europe as every bourse across the region is also up very strongly so far today. In the US, futures went limit up on hope for a rescue plan. As of 7:45 am, the futures were pointing to a huge gap up of between 4.25% and 4.6%.

Major economic news on Tuesday is limited to Mar. Mfg. PMI and Mar. Service PMI (both at 9:45 am) and Feb New Home Sales (10 am). However, influential voting FOMC Member James Bullard also speaks mid-morning (important because over the weekend he told Bloomberg he expected the US to hit 30% unemployment). Major Earnings are limited to INFO before the open and NKE after the close.

With more “stay a home” orders, company closures, and bad economic data coming, there are a ton of bad headlines still ahead. However, it is also extremely likely there will be a plan of some sort passed soon. So, markets remain very gappy and erratic and there is no reason to think that will stop. Remember, you don’t have to pick the absolute bottom to make a bundle on the rebound. So, use this downtime to really learn, refine your trading plans, and improve your processes. Wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

The Elected Fail But Fed to Steps Up Again

March 23, 2020 by Ed Carter

Friday was another head fake day in the downtrend. After a gap up of about 1%, the rollercoaster began. Selloffs led to rallies, which led to ever more selloffs. With a 7% intraday range, we closed very near the lows. As a result, the SPY lost 4.62%, the DIA lost 4.67%, and the QQQ lost 3.92%. Interestingly, the VXX also lost 2.34% on the day to close at 60.55 and the 10-year bond yield also fell to 0.876%. Meanwhile, Oil (WTI) got hammered again, down 8.88% to $23.61/barrel as in addition to the epidemic and price war, money continues to seek safety in dollars (making dollar-denominated items, worth less each day). This concluded the worst week on Wall Street since 2008.

During the day, the Treasury Dept. also pushed the Income Tax filing deadline out to July 15^th. Attorney General Barr also invited ethics probes into Senators (both parties) who sold and/or bought specific heavily-impacted stocks after coronavirus briefings in late January and early February. (Back when this was still a hoax.) The Fed also expanded its operations into buying municipal bonds. NY, IL, and CT also all joined CA in a state-wide in-home quarantine.

On the relief bill front, what started as a $1 Trillion bill, has doubled in size, but even so, it is likely to grow more. For now, the stumbling block seems to be the emphasis of the aid package. Democrats want the bill to concentrate on aid for hospitals and other healthcare as well as money for unemployed workers. For their part, Republicans insist the bill focus on more tax cuts and grants/loans for companies. (So, stereotypes are nicely still intact as Monday dawns.)

Over the weekend, many more countries have banned incoming travelers, more US states have locked-down with “Stay Home” quarantine measures, and the federal government failed to reach an agreement on a relief bill. Meanwhile, the Fed is close to announcing a $4 Trillion infusion via asset purchases as they and Sec. Mnuchin held talks this weekend. The question now is what we will see out of DC? Ether we see some bi-partisan leadership or a new round of the “Blame Game.” It appears markets are depressed at the lack of leadership and fear the Blame Game as both global markets and US futures tanked when the Senate failed to pass a procedural vote on a relief bill.

The global headline virus numbers continue to climb fast, now just under 350,000 confirmed cases and 15,300 deaths. In Asia, the very early stages of a second wave have started in places like Australia, Thailand, Malaysia, and South Korea. In Europe, Germany has now banned any gathering over 2 people. The UK has also quarantined anyone who is at-risk for the next 12 weeks. In addition, Spain has extended its lock-down through Mid-April. Meanwhile, Italy has banned domestic travel and deployed the military to enforce the restrictions.

In the US, cases almost tripled since Friday morning as testing ramped (but then was almost immediately greatly restricted, to rare cases where a positive result would change the treatment plan, in places like Los Angeles and New York City). Regardless, the totals are now 35,070 cases and 458 deaths.

Overnight, Asian markets were down hard again everywhere except Japan, which posted a 2% rebound. There isn’t even that single green shoot in Europe as every bourse across the region is down 3-4% so far today. In the US, futures were volatile again overnight, but went limit-up on the NASDAQ at one point. As of 7:45 am, the futures were pointing to a gap down of between 2.5% and 3.5%.

There is no major economic news on Monday. There are also no major earnings announcements scheduled. However, the Fed announcement will drop some time. Also, some industry/business leaders have started calling for reduced restrictions on workers who are less at risk. Apparently, they do not understand (or care) about lower-risk categories of people being carriers for virus distribution.

Markets remain very gappy and erratic. It is true we are down a very long way and got here historically fast. Some bottom-pickers (who can stand the pain, like funds) are likely to start dipping in here. However, retail traders cannot take the pain that is likely still to come. With more “stay a home” orders coming into effect every day (midnight Monday in Ohio), there are a hell of a lot of bad headlines still ahead. I’ll say it again, this is not a Swing Trading market. You don’t have to pick the absolute bottom to make a bundle on the rebound. So, use this downtime to really learn, refine your trading plans, and improve your processes. Wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

Future Point Up As Impacts Get Worse

March 20, 2020 by Ed Carter

Thursday was a relatively stable day, with a 1% gap down, a sell-off to the lows, and an immediate rally to up 1%. The rest of the day included trading in a relatively tight range…relatively. The actual intraday range was 6.5% with the SPY closing up 0.58%, the DIA up 0.96%, and the QQQ up 0.60%. All three printed long-wick Spinning Top candles showing the indecision. The VXX fell 10% to 62.00. Meanwhile, Oil spiked in its best day ever, up 23% after the prior day carnage, closing at $25.08/barrel (WTI). The 10-year bond yield fell to 1.158%.

During the daily presser, the President said he was “ok with” both future legislation that may prohibit buybacks and is also considering the US government taking equity stakes in those companies that will receive bailouts. In addition, he said he has not exercised the Defense Production Act he invoked Wednesday because there was no need yet. He also ordered the FDA to do “off label” tests on a 1940 malaria drug (hydroxychloroquine) for potential effectiveness as a treatment for COVID-19. It has been shown effective in one study in test tubes and promising in small-scale Chinese studies, but it is poisonous in higher doses. (This drug is more promising than the alternative because of its availability and being off-patent versus say the GILD drug Remdesivir, which has also shown some promise.)

The Senate and House (and both parties) continue to wrangle over competing versions of the next relief bill. After the close, a Republican Senate version was unveiled that ups the ante from $1000/adult to $1200/adult with both proposed plans also kicking in $500/child. However, there are mavericks (and excluded players) on all sides of these negotiations who oppose the announced plans. Expect this story to continue with a target of a deal passing both houses over the weekend, but that may be optimistic.

Afterhours, TSLA closed its Fremont CA factory and NY operations after fighting such measures earlier in the day. In addition, former UN Ambassador Nikki Haley resigned from the Board of BA, because she opposes the idea of government aid. However, BA management says the company will not survive without a bailout and has asked for a $60 billion aid package.

The global headline virus numbers continue to climb fast, now at 252,750 confirmed cases and 10,400 deaths. In Europe, Italy now has 41,100 cases with 3,400 deaths. Spain has 20,000 cases with 1,002 deaths, France has 11,000 cases with 375 deaths (a day behind in reporting), Germany has 16,625 cases and 45 deaths. The number of deaths in both the UK and France jumped 40% in the last 24 hours. Italy and France also extended the duration of the national quarantines they have in-place.

In the US, virus infections are following the same path as in Europe as our testing ramps up. The totals are now 14,366 cases and 217 deaths. More companies and industries continue to say they will fold without immediate government aid. This now includes the hospitability industry, retailers, entertainment venues, airlines, rental car industry and many others. While small and medium-size businesses will have far less political clout, their needs will be just as large. In terms of impact, the Governor of CA issued a statewide “stay at home” order overnight.

Last night, Asian markets were up, except Japan where the NIKKEI lost 1%. Europe is green across the board, up 2-5% so far in their day. In the US, futures were volatile again overnight but went limit-up on the NASDAQ at one point. As of 7:45 am, the futures were pointing to another gap up of between 1.5% and 3.5%.

Friday’s major economic news is limited to Feb. Existing Home Sale (10 am). The only major earnings are from TIF before the open.

Markets remain erratic. However, as said yesterday we are down a very long way, very fast already. Bottom-pickers are likely to step in. Still, regardless of what happens during the session today, holding over the weekend is a very risky prospect. There are a lot of bad headlines yet to come and it will be two long days before traders can adjust. As has been the case for some time, this is not a market to be Swing Trading. Use this downtime to really learn, refine your trading plans, and improve your processes. Wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

More Resue Plan Headlines Ahead

March 19, 2020 by Ed Carter

Wednesday was another brutal, roller-coaster day in the market. After futures went limit-down overnight, US markets opened on a 5% gap down. The volatile intraday moves covered a 9% range and caused a trading halt when the circuit-breaker was tripped mid-morning. However, prices closed up off the lows, with the SPY down 4.94%, the DIA down 6.60%, and the QQQ down 3.04%. The VXX rose almost 18% to 69.00. Oil was crushed during the day, closing down 24% at $20.37/barrel.

The 10-year bond yield spiked sharply to 1.198% by day end, as overall interest rates rose. This seems counter-intuitive with the Fed spending hundreds of billions of dollars to drive yields down. However, Bloomberg reported the likely cause is the fact the federal government is increasing national debt just as fast or faster in order to provide relief, stimulus, and bailouts. In addition, the public is selling everything, including bonds, to raise cash. Regardless of the cause, rising rates are not good news for an economy starting into a big shock. So, we might expect Fed programs to increase pace even further in an effort to over-power the new government spending effect.

Late in the day, stocks did come up off their lows as the Senate finally passed the House-White House relief deal from last week. (This isn’t the major stimulus bill, but rather the one to guarantee paid sick leave, paid family leave and increased funding for food programs and Medicaid.) The larger stimulus bill(s) are still being haggled over between Republicans, Democrats and the White House. Expect that larger stimulus plan to be the lead story for a couple of days as what is finally included is negotiated.

In ominous news, at the daily presser, Dr. Deborah Birx pleaded for Millennials to respect social distancing and quarantine measures. This was prompted by data out of Europe showing that more young people are getting sick from the virus than had been previously believed. In addition, the WHO report that 6% of infected children have had severe or critical symptoms from COVID-19 (as opposed to 19% for adults).

The global headline virus numbers rose to 221,450 confirmed cases and 9,000 deaths. In Europe, Italy now has 35,720 cases with 3,000 deaths. Spain has 15,000 cases with 640 deaths, France has 9,150 cases with 265 deaths, Germany has 13,100 cases and 31 deaths. On this continued spread, Automakers and other industries closed all of their operations across Europe and the US on Wednesday. In the UK, the country prepares for lock-down with closures of transit systems, schools, and businesses. The ECB also announced an $819 billion dollar stimulus package (this caused US futures to jump well over 500 points from negative to positive on this news).

In the US, confirmed infections continue to grow, following the same exponential growth rate seen in Europe. The totals are now 9,425 cases and 150 deaths. Last night, NYC again lobbied the NY Governor to approve a shelter-in-place quarantine order for the city. This came less than a day after the Governor said he wouldn’t allow this measure. The NYSE also announced it will be closing floor operations as of Monday the 23^rd and go to fully-electronic trading due to a pair of infections found among floor traders trying to enter the floor.

Overnight, Asian markets were down, with South Korea hammered 8.4%. Europe is mixed, but the majors (FTSE, DAX, CAC) all down 1-2% so far in their day. In the US, futures were volatile again overnight, swinging up and down repeatedly. As of 7:45 am, the futures were pointing to another gap down of between 1% and 2%.

On Thursday, the major economic news is limited to Weekly Initial Jobless Claims, the Mar. Philly Fed Mfg. Index, and Q4 Current Accounts (all at 8:30 am). In earnings news, ACN and DRI report before the open, while LEN and CTAS both report after the close.

While the worst is yet to come in terms of cases, deaths and economic damage, it is important to keep in mind that we have fallen very far, very fast. We are more than 40% off the mid-February highs in the SPY and almost 50% off those highs in the DIA. So, expect the funds (who can handle pain) to start picking up some deals soon as long-term holds for their portfolio and suggesting the public do the same (maybe to protect their own moves?).

We remain in a very erratic and over-reacting market with a strong bias still to the downside. Again, this is not a market to be Swing Trading. Use this time to really learn the trading setups and vehicles (like option strategies) you will be using. Refine your trading plans, put the time to work…but don’t be chasing trades. Remember the market can stay extremely oversold a lot longer than any retail trader can stay solvent being too early. Wait for trades to come to you. For now, continue to either be very fast (day trade), very slow (long-term holds) or just wait.

🎯 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

Markets Not Happy This Morning

March 18, 2020 by Ed Carter

Tuesday was another roller-coaster ride for markets. A 2% gap higher was met with immediate selling down to the lows of the day. However, from 10 am to noon was a hard rally. The massive waves continued all day until a close near the highs. Once again, we had an 8% intraday range, but the SPY closed up 5.63%, the DIA up 5.42%, and the QQQ up 7.58%. The VXX only lost 1.18% to 58.51, which points to intraday volatility. Oil was down 6% on the day, closing at $26.84/barrel (WTI) on fear of a global recession and even further Saudi supply increases. However, the 10-year bond yield was back up above 1%, closing at 1.064% on the day as Fed bond-buying ramps up.

During the daily press conference, the President kept his tone for a second straight day, announcing desires to have fiscal stimulus. This includes deferring April 15 income tax payments for 90 days and a check sent to every American home. At the time of the presser, the administration hadn’t yet spoken to Congress on the plan specifics, but their hope was to have the checks cut and mailed within two weeks. Note that it took 2 months after signing the bill in 2009. Nonetheless, markets liked something they heard.

The House and Senate Democrats also put forth packages of their own and as said, were in mid-day negotiations with Treasury Sec. Mnuchin (who left the President’s press conf. early to start those negotiations). Subsequently, it leaked that they were talking about a $1.2 trillion relief package including over $250-$500 billion in immediate checks to family homes, $200-$300 billion in small business assistance, $200-$300 billion in tax cuts, and $50-$100 billion in relief for the airline industry. It also came out that during discussions with Congress, Mnuchin said he was worried unemployment could hit 20% due to the virus.

Not to be outdone, Majority Leader McConnell told the press that the Senate would not adjourn again until they had passed a relief package larger than the House passes. (A somewhat odd statement for a “Fiscally Conservative” party leader, but I guess these are different times.) In addition, during the day the Fed extended its $500 billion/day repo operations (to aid banks) through at least the end of the week and announced a new lending facility for US businesses (beyond banks). So, the government is now firing all their guns.

The global headline virus numbers rose to 203,500 confirmed cases and 8,225 deaths. In Europe, Italy now has 31,500 cases with 2,503 deaths. Spain has 13,720 cases with 600 deaths, France has 7,750 cases with 175 deaths, Germany has 9,920 cases and 26 deaths. On this continued spread, the EU closed its exterior borders to all non-EU people for 30 days. In addition, the UK announced a 400-billion-pound relief package. Both the UK and France said they will start fining and may jail anyone infected who is out in public. Italy, France and Belgium all also banned selling short for 3 months in their stock markets.

In the US, all 50 states (plus D.C. and Puerto Rico) have confirmed infections as the virus is following exactly the same exponential growth rate seen in Europe. The totals are now 6,525 cases and 116 deaths. Again, more states have ordered public venues, bars and restaurants closed. Schools were closed across 37 states. NYC also gave warning that they will soon join San Francisco in closing the city and ordering shelter-in-place quarantines.

Overnight, Asian markets were down, with South Korea down 6.5% and Australian down almost 5%. Europe has continued to the downside, with another acceleration today. So far in their day, the major European bourses are all down more than 5%. In the US, futures were volatile again overnight. However, as of 7:30 am, U.S. futures were pointing to another 5% gap down.

On Wednesday, the major economic news is limited to Feb. Building Permits and Feb. Housing Starts (both at 8:30 am) and Crude Oil Inventories (10 am). The only earnings of note for the day are GIS before the open and TCOM after the close

The US numbers will continue to rise exponentially (especially once testing really starts ramping up), more businesses will report the impacts, and the life of the public will halt. So, volatility and gaps are not going anywhere. We are simply in a massively erratic and over-reacting market with a bias still to the downside right now. Again, this is not a market to be Swing Trading. Keep reminding yourself, you do not have to trade every day, week, or month!

Needing action is the worst reason in the world to take trades. So, remember there will be another day. Keep preparing your list of strong companies you will want to own WHEN THE TIME IS RIGHT. Then wait for those trades to come to you. Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when we have a more stable price action, less volatile trend and see proven support below us. Until then, get very fast (day trade), very slow (long-term holds) or stay out.

🎯 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

Markets Remain Erratic as Virus Expands

March 17, 2020 by Ed Carter

Another day, another ride through the meat grinder for traders. After Sunday evening’s Fed move, markets made a massive 12.5% gap down at the open. This triggered an immediate halt. After the 15-minute break, the daily whipsaw continued with more than 8% intra-day range but ended near the lows. The SPY closed down 11.11% (off the lows), the DIA down 12.76% (near the lows), and the QQQ down 11.98% (very near the lows). The VXX spiked 38.87% to close at 59.99. The 10-year bond yield closed down to 0.758% and Oil closed at $28.67/barrel (WTI). This is significant because shale companies cannot stay in business at that oil price.

During the day markets were panicked and manic as news came fast. Toward the end of the market day, the President held another press conference, where he changed his tone again. This time he accepted that the virus is out of control. In fact, he said “if we do a good job,” the COVID-19 outbreak may be under control by July or August. He also said he may implement “lockdowns” (quarantine) for certain areas, is calling for social distancing by all ages, and for all Americans to avoid any gathering of more than 10 people. In addition, he pledged to bailout the airline, cruise, and hospitality industries.

On Monday, the Senate did not take up the relief bill that was passed early Saturday in the House with Presidential support. Majority Leader McConnell reported that Senate Republicans cannot accept the paid sick leave in the House bill (although House GOP members and the President had, and the bill exempts smaller companies). However, Senators on both sides of the aisle have already staked out positions offering various forms of payments to be sent to every American home. The G7 also held a teleconference. While European leaders were hoping it would result in announcement of specific coordinated economic action, all that came from the meeting was a vague promise to do “whatever is necessary to support global trade and economies.”

Last night the global headline virus numbers rose to 185,500 confirmed cases and 7,330 deaths. In Europe, Italy now has 28,000 cases with 2,160 deaths. Spain has 11,200 cases with 491 deaths, France has 6,650 cases with 150 deaths, Germany has 7,640 cases and 20 deaths. Many countries have closed their borders to foreigners and implemented virtual shelter-in-place rules by closing businesses and banning public gatherings. Automakers such as Fiat-Chrysler and Volkswagen have closed all of their operations across Europe.

In the US, 49 states (plus D.C. and Puerto Rico) now have confirmed cases as the virus is following exactly the same exponential growth rate seen in Europe. The totals are now 4,740 cases and 95 deaths. More states have ordered public venues, bars and restaurants closed. San Francisco has also ordered shelter-in-place quarantines across most of the Bay area. Some states have also canceled or postponed primary elections to avoid crowds. However, not all the news was bad. With all the demand from online-shoppers, AMZN announced it is trying to hire 100,000 new employees for distribution centers and delivery operations.

It was reported Monday that MRNA began the first trial of a potential vaccine candidate. However, even if this is the perfect vaccine, it will take 12-18mo before it would be ready to go to manufacturing for wide distribution. It is also worth noting that in the history of the world, only 1 virus (Hepatitis-C) has ever been cured. So, traders should be very careful not to latch-on to every report of a miracle drug as an immediate massive opportunity.

Overnight, Asian markets were mixed. Europe has continued to the downside so far in their day. In the US, futures were all over the place overnight. They went “Limit up” at one point only to turn around and go negative. As of 7:45am, they are pointing to a bounce after the ugly day yesterday.

On Tuesday, the major economic news is limited to Feb Core Retail Sales (8:30 am), Feb. Industrial Production (9:15 am), and Jan. Business Inventories and JOLTS (both at 10 am). The only earnings of note are from FDX, which reports after the close.

Expect volatility and gaps to continue. We are simply in an erratic and over-reacting market with a bias to the downside. Not a good market to Swing Trade. Keep reminding yourself, “I do not have to trade.” Needing action is possibly the worst reason in the world to take a position. So, remember there will be another day. Keep preparing your list of strong companies you will want to own WHEN THE TIME IS RIGHT. Then wait for the trades to come to you. Don’t chase. Don’t trade on emotion. Don’t think you can predict turns. Let price tell you when more stable action, less volatile trend and proven support are in place.

🎯 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