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FAANGs Holding Markets Up

July 10, 2020 by Ed Carter

Markets opened modestly higher Thursday on slightly better than expected Initial Jobless Claims. However, this was met with an immediate and strong selloff that took us to the lows by 11:30 am. While bulls rallied up off these lows, they were never able to climb back to flat. The NASDAQ closed at yet another record high close as AMZN, AMD, and NVDA almost single-handedly held markets up. At the close, SPY was down 0.50%, DIA down 1.32%, and, as noted, QQQ up 0.84%. The VXX also climbed a bit to 33.06 and T2122 (4-week New High/Low Ratio) edged closer to overbought territory at 73.75. 10-year bond yields fell sharply to 0.607% as money chased bond safety. And Oil (WTI) also sold off to $39.48/barrel.

Treasury Sec. Mnuchin told CNBC Thursday that the White House will not back the kind of sweeping coronavirus relief they supported before. Instead he said they would only accept a smaller, narrower package. As often happens in the Administration, this seems to be at odds with the President’s own words from a week ago (when he said he wanted to give away more money than the Democrats, but just “to do it right”). However, it does line up with consistent statements out of Senate Republicans. Either way, Congress will return in just under two weeks to resume negotiations and votes.

In other political-market news, Democratic Presidential nominee Biden laid out his “Moderate plans for an economic recovery.” Among other things, he said that “(the wealthy investor class) don’t need me.” The plans he announced include the raising of corporate tax rates to 28% (the mid-point between prior corporate rates and the current 21% rate President Trump pushed through.)

In the US, the virus numbers show we now have 3,220,559 confirmed cases and 135,828 deaths. This includes another record of over 62,000 new cases reported nationally. A dozen states reported a record-high number of new cases Thursday. Among them, CA, FL, and TX all reported record virus-related deaths on the day. In FL, Miami-Dade County recorded a 33% positive result rate on all tests processed Thursday. Meanwhile, Dr. Fauci (NIH) told the Wall Street Journal “any state that is having a serious problem, that state should seriously look at shutting down.”

Globally, the number of cases has reached 12,420,723 confirmed cases and 558,091 deaths. In a huge case of stating the obvious, the W.H.O. reported “the pandemic is getting worse” on a day when the world reported a record number of new cases (227,000). Among the countries reporting record-high new case counts were the US and Mexico, both of which reported a daily record in both cases. However, even though Brazil did not report a record number of new cases, Mexican numbers still pale in comparison to Brazil who reported almost 43,000 new cases and over 1,200 deaths on the day.

Overnight, Asian markets were red across the board with the lone minor exception of Malaysia. In Europe, markets are mixed, but mainly green at this point in the day. The big 3 bourses (FTSE, DAX, CAC) are all up half a percent. As of 7:30am, US futures are all pointing to a modestly lower open.

The only major economic news for Friday is June Producer Price Index (8:30 am). The only major earnings report for the day are GBX before the open and SJR after the close.

Thursday’s candles were fairly ugly, with a Bearish Engulfing signal in SPY and DIA. However, despite this, a consolidation pattern is all we can point to in those two indices, especially since the mega-cap techs continue to pull the entire market higher. Are the QQQ extended? Absolutely. However, that doesn’t mean they must reverse today.

Keep an eye on those “canary in the coalmine” FAANG stocks. If they break, so will the market. If they maintain their rally, there is nothing the rest of the bears can do to fight their momentum. So, keep an eye on the short-term chart and don’t chase, don’t predict, and take profits as you go. Also, remember its payday. Take some profits off the table and/or hedge you positions in front of the weekend.

Daily trade ideas have been moved to the trading room and the Members-Only Phone App. Trade your plan, take profits along the way, and smart. 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.

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Waiting on Jobless Claims?

July 9, 2020 by Ed Carter

Stocks gave us another volatile day, but the bulls came out on top again. All 3 major indices closed at or near the highs as AMZN, AAPL, FB, and MSFT led markets higher with new all-time high closes. However, the large-caps did not eliminate the lower-high possibility. On the day, SPY was up 0.76%, DIA up 0.65%, and QQQ up 1.32%. The VXX sold off a little to 32.55 and T2122 climbed back into the mid-range at 51.65. 10-year bond yields rose to 0.666% and Oil (WTI) also rose slightly to $40.88/barrel.

In the aviation industry, late in Wednesday’s session BA competitor Airbus reported a third straight month of zero plane sales (new orders). Earlier in the day, UAL had warned 36,000 front-line employees (more than a third of their staff) of potential layoffs and furloughs in 60 days (federal law requires that much notice). It was also reported (rumors, not announcement) that the 5 largest airlines had reached a deal with the Treasury Dept. for massive loans. So, aviation names may be worth watching.

After the close, St. Louis Fed President Bullard said in an interview that he is predicting unemployment will fall back to 7% by year-end. (His previous estimate was over 10%.) This came as part of a mostly optimistic outlook that downplayed the problems facing the economy. (This stands in contrast to 3 of his counterparts who emphasized the risks facing the economy on Tuesday.) He also said he expects another major fiscal stimulus bill, giving the economy “plenty of resources.” So, there are diverging opinions of the economy among Fed members, perhaps as should be expected, but all of them are saying that more stimulus is needed and will likely happen. Stocks will like that.

In the US, the virus numbers show we now have 3,159,514 confirmed cases and 134,873 deaths. For Wednesday, the new case count was 58,000 and 820 deaths. CA Governor Newsom said Wednesday that the state has the capacity to treat 50,000 virus patients. (For reference the state now has a 7-day average of over 8,000 new cases/day, though obviously not all cases require hospitalization.) In partially related news, BBBY reported they will close 200 stores over the next 2 years in an effort to get back toward profitability in the Covid-19 era.

Globally, the number of cases has reached 12,196,923 confirmed cases and 552,771 deaths. In Asia, Tokyo reported a record-high number of new cases and Hong Kong also reported a new outbreak (though still not the highest they’ve seen). Australia’s case surge continues and, alarmingly, only a small percentage of new cases have been traced to a known case or location (implying the virus has spread more widely than previously thought).

Overnight, Asian markets were mixed but mostly green with only smaller markets like New Zealand, Singapore, Malaysia and Indonesia in the red. In Europe, markets are even more broadly mixed, but on smaller moves either direction. Among the major European bourses, FTSE is down, DAX is up, and the CAC is flat at this point. As of 7:30am, US futures are also mixed and closer to flat, likely waiting on the Jobless claims to push one way or the other.

The only major economic news for Thursday is Weekly Initial Jobless Claims (8:30 am). The only major earnings report for the day is WBA before the open.

Wednesday’s candles showed once again that the bulls have strength. However, they did not signal a massive rally surge. Instead, it still seems like the bulls have paused to take a breath after last week’s rally. The short-term consolidation remains in place for the large-caps. However, the mega-cap tech names have been pulling markets (especially the QQQ) higher for quite some time. The “canary in the coal mine” is going to be those FAANG stocks. If they break, so will the market. If they maintain their rally, there is nothing the rest of the market can do but follow. So, keep an eye on those tickers and don’t chase, don’t predict, and take profits as you go.

🎯 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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Futures Flat Early With No Driver

July 8, 2020 by Ed Carter

Stocks gapped down half a percent perhaps following Europe and perhaps in profit-taking after the recent run-up. In either case, there was a morning rally to fade that gap and take markets higher. However, then an all-afternoon selloff took over with prices closing near the lows. This brings the possibility of a new “lower high” in charts of the large-caps, but the QQQ remains solidly bullish in trend. On the day, SPY fell 1.03%, DIA fell 1.51%, and QQQ fell 0.69%. VXX gained 3% to 33.39 and T2122 fell near oversold territory at 22.46. The 10-year bond yield fell to 0.64% as money bought up bonds and Oil (WTI) fell slightly to $40.49/barrel.

During the afternoon, FB reportedly had a bad call with the organizers of the advertising boycott they are suffering. Multiple outlets report the call “didn’t go well” as the company failed to address any of the boycott’s 10 demands. So, no change in the positions of the sides, but FB is apparently unfazed since their top advertisers aren’t participating in the boycott and the stock is trading near all-time highs. This all came as a 2-year audit of FB civil rights record (commissioned by FB and carried out by a former ACLU executive) found shortcomings and a mixed record at best as outlined in a 100-page report released this morning.

Three Fed speakers (Bostic, Mester, Daly) also spoke Tuesday and all said problems remain in the economy. More importantly they see a leveling or even slowing in the recovery over the last week or two. All three said additional fiscal stimulus is needed from Congress and the White House. They also all reiterated that they don’t foresee Fed tightening or any reduction of monetary stimulus until at least 2022-2023.

In the US, the virus numbers show we now have 3,097,538 confirmed cases and 133,991 deaths. This includes 60,000 new cases on Tuesday as 36 states are reporting at least a 5% increase in their 7-day average of new cases. Among them, TX reported more than 10,000 new cases on Tuesday (a record) as their positive test rate sits at 13.5%. FL is also seeing a huge spike in test positivity with 16.3% of tests coming back positive. However, there has seen a little decrease in actual new cases, which was welcome as 78% of the state’s hospital beds and 83% of the state’s ICU beds are filled. In NJ, movie theatre chains AMC and CNK have filed a lawsuit against the state, claiming that keeping theatres closed is unconstitutional. Meanwhile, Dr. Birx (White House Task Force) told Bloomberg she praises those governors who have mandated masks despite the President’s resistance, citing TX Governor Abbott specifically.

Globally, the number of cases has reached 11,980,389 confirmed cases and 547,321 deaths. In Spain, there was a blow to hopes for those who support the idea of “herd immunity.” A study has found that only 5% of the Spanish population has antibodies, despite being one of the countries hit hardest in the percentage of population contracting the disease. (For reference, experts say 70% would need antibodies to provide effective herd immunity). The surge in cases also continues in Latin America, with Mexico, Brazil, and several other countries South of the Border reporting record increases.

Overnight, Asian markets were mixed again. China was up almost 2% and Hong Kong was also solidly green. However, Japan, Australia, and India were all solidly red while South Korea was down a quarter of a percent. In Europe, markets are red across the board, but on smaller moves. The minor exceptions to that rule are Greece and Norway, which are just on the green side of flat at this point of the day. As of 7:30am, US futures are all just on the green side of flat at this point.

The only major economic news for Wednesday is Crude Oil Inventories (10:30 am). The only earnings reports for the day are MSM before the open and BBBY after the close.

Tuesday’s candles were ugly. However, the bears still showed no teeth with no panic or heavy selling pressure coming in. Instead, it just seemed like the bulls paused to take a breath rather than actually showing fear of the virus surge. With that said, we have to respect the lower-high if we get follow-through today by the large-caps. So, take care of getting too bullish, but also remember the only bearish traders that have not been punished in recent months are those that are fast and obey their stops. Keep an eye on the short-term chart. Don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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

Futures Point to Lower Open

July 7, 2020 by Ed Carter

Markets gapped higher Monday, following Europe and Asia in follow-through to the pre-holiday rally. After a volatile session (volatile above the gap), prices closed not too far from the highs. The mega-cap tech names led the way with AMZN up almost 6%, leading to another all-time high close in the QQQ. On the day, SPY closed up 1.53%, DIA up 1.77%, and QQQ up 2.46%. The VXX closed down just slightly to 32.28 and T2122 remains in the mid-range at 63.46. 10-year bond yields closed up to 0.678% and oil was up slightly to $40.65/barrel.

After the close, Fitch reported that commercial mortgages posted the largest increase in delinquencies ever in June, with 3.6% of all commercial mortgages now delinquent. Unsurprisingly, hotels (11.49% delinquent) and retail (7.86% delinquent) lead the list. Retail consultancy ShopperTrak also told CNBC that consumers have begun to retreat again as virus cases surge. The last two weeks of their retail store surveys show a decline in shopper traffic for the first time since the first week of April.

Last night, Secretary of State Pompeo told Fox News that the US is looking at banning TikTok (who cooperates with Chinese authorities) and Chinese social media apps in a clear attempt to ratchet tensions. What is unclear is how the US would legally do that and what benefit the US gains from such action. For that matter, it’s unclear how such a move would negatively impact China. However, what is obvious is that US-companies like FB, TWTR, GOOG and other social platforms will be in the cross-hairs from the Chinese side if any such measures are taken by the US.

In the US, the virus numbers show we’ve now topped 3 million cases at 3,041,129 confirmed cases and 132,993 deaths. We recorded another 50,500 cases Monday with 32 states reporting an increasing rate of new infections. However, the daily death count continues to fall with the 7-day average just over 500/day. In TX, the military deployed medical personnel at the request of FEMA as hospitals around San Antonio are feeling the strain of virus cases. Still, at least at this point, this is a very small deployment compared, for example, to the military support sent to New York in April. In CA, Governor Newsom “asked” more of its counties to close indoor venues and businesses as the stat’s positive result rate has climbed to 6.8%.

Globally, the number of cases has reached 11,770,153 confirmed cases and 541,490 deaths. In Europe, the EU cut its GDP forecast from an already abysmal 7.4% contraction (May forecast) to an 8.3% contraction for 2020. In Brazil, their President has canceled all his events for the week and was taken to hospital for coronavirus testing after “feeling unwell” and showing a high fever. He was released, but was wearing a mask and told people to stay away from him as a safety measure upon release.

Overnight, Asian markets were mixed. China was well into the green, but Japan, Hong Kong, and South Korea were all well into the red. In Europe, their own economic data and fear over the US virus surge has markets red across the board. The big 3 bourses are all down over 1.1% at this point in their day. As of 7:30am, US futures are looking to follow Europe, pointing toward a gap down between half a percent (QQQ) and 1.05% (DIA).

The major economic news for Tuesday is limited to May JOLTS (10 am). However, there are 3 FOMC speakers, Bostic (9 am), Quarles (1 pm), and Daly (2 pm). The only earnings report for the day is PAYX before the open.

The bulls have shown no fear of bad economic or the virus surge. Along those lines, the bears have shown no teeth recently either. With that said, markets may need a rest (especially the QQQ). So, an inside day might not be a bad thing at all. Either way, continue to be careful, but don’t buck the bullish trend unless you are fast. Don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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 Come Back From 4th in Good Mood

July 6, 2020 by Ed Carter

On Thursday, bulls gapped markets up 1.25% on better than expected June Job creation and then got another half percent follow-through. However, at 10 am the floor fell out and the rest of the day was a volatile selloff. The session ended with ugly black candles that closed near the lows. However, keep in mind this was after the gap-up and it was a pre-holiday “virtual Friday.” At the close, SPY was up 0.55%, DIA up 0.43%, and QQQ up 0.68% to a new all-time high close. VXX fell again to 32.32 and the T2122 (4-week High-Low Ratio) remains in the mid-range at 63.89. 10-year bond yields fell to 0.669% and Oil (WTI) climbed back about the magic $40 level to close at $40.29.

On Sunday, BRKB bought the natural gas transmission and storage assets of D for $10 billion (cash and debt assumption). This increases the BRKB share of the US natural gas transmission market to 18%. D says it will use $3 billion of proceeds from the deal to buy-back its own shares toward year-end, but cut its dividend immediately. Later, in another story, D also canceled a joint venture with DUK on an Atlantic coast pipeline.

However, the main storyline remains the conflict between economic recovery and the spread of the virus. Related to this, on Sunday, GS announced a revised the 2020 US GDP forecast downward again. They now expect that new state-level restrictions and changes in behavior by the public will reduce Q3 growth from 33% to 25%, which should also result in a 4.6% contraction in annual GDP. That number is down from their prior 4.2% contraction forecast.

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In the US, the numbers show we’ve now had 2,983,155 confirmed cases and 132,571 deaths. The case count continues to surge unchecked, as the percent of tests that come back positive keeps climbing and we have about 45,000 new cases per day in the US. For example, FL now exceeds 14% positive and TX exceeds 13% positive results on tests. Two TX counties have reached full capacity on hospital beds and ICU beds and are urging residents to shelter-in-place in an attempt to avoid new cases.

Globally, the numbers have reached 11,586,780 confirmed cases and 537,372 deaths. The W.H.O. reports this includes over 200,000 cases in a day globally for the first time on Saturday. In Europe this weekend, ECB President Lagarde said she expects about 2 years of disinflation pressure caused by the virus. As a result of this, she said the ECB will also “keep monetary policy extraordinarily loose.” This comes as Spain locked down two regions again amidst a 20% increase in cases for the week. In Asia, Australia is closing the border between its two largest-population states as outbreaks continue in many areas of those states.

Overnight, Asian markets were strongly green, with China leading the way (and on increased trading volume). The only red came in Australia and Thailand. Europe is following Asia’s lead as every European exchange is up at least 1% at this point in the day. The big 3 bourses are averaging a 1.8% gain at their mid-day. As of 7:30am, US futures are looking to follow the rest of the world to build on last week’s momentum. Right now, all 3 major US indices are pointing to a gap higher of over 1.1% at the open.

The major economic news for Monday is limited to June Services PMI (9:45 am) and June ISM Non-Mfg. PMI (10 am). There are no earnings reports on the day.

As I said earlier, the market is torn between recovery hope and the virus. However, bulls have not shown any real fear in months. A Bloomberg talking head summed the market up nicely last evening. “Good data is great and markets go up. Bad news is great, because it means more stimulus and markets go up. Short of Armageddon, the bears are can’t win this fight.”

That being the case, we can’t take too much away from Thursday’s ugly candles. Regardless of the way the candles looked, price continues to rise. So be careful, but remember trading is a risk business. Follow the trend, but don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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

Vaccine Hope Rallies the Bulls

July 2, 2020 by Ed Carter

A leaked (but not peer-reviewed) study from PFE showed they have a drug that may artificially create virus antibodies. This certainly helped market sentiment. Regardless, the bulls reversed overnight profit-taking and gapped markets up slightly. The rest of the day was rollercoaster ride sideways. At the close, the QQQ did back off of all-time high resistance but still ended at a new all-time high close. Both of the large-cap indices fared worse, leaving high wicks. Still, SPY closed up 0.72%, DIA down 0.20%, and QQQ up 1.17%. The VXX fell to 32.90 and T2122 climbed to 74.60. 10-year bond yields climbed to 0.674% and Oil (WTI) rose to $39.71/barrel.

During the day, the President told Fox News that he supports another round of direct payments to Americans. He went on to say he even wants to give out more money than Democrats (proposed back in May), but he wants it done properly. This reverses his “dead on arrival” statements about the Democratic plan. The move may be a political maneuver or may signal a change in his view of virus impact. Either way, the idea of more money in the hands of Americans can’t help but be bullish for stocks.

The main story is still the virus. More states rolled-back reopening measures such as indoor dining/bars (CA, NY, MI). In PA, Governor Wolf also announced an order to require the wearing of masks state-wide. OR Governor Brown ordered the same thing for her state. However, while President Trump said “he’s all for masks” he doesn’t feel we need a national mandate and still thinks the virus will just disappear someday.

In the US, the numbers show we’ve now had 2,780,152 confirmed cases and 130,798 deaths. This includes another record day nationally, with over 50,200 new cases confirmed across the country. TX and NC were among the states that reported a record increase in cases on the day. In CA, Governor Newsom ordered the reclosure of all indoor activities (including businesses) in the state’s 19 most-affected (and populated) counties. At a national business level, MCD has paused their reopening for at least 21 days and AAPL closed 30 more stores (77 total now) in the hardest-hit areas.

Globally, the number of cases has reached 10,834,159 confirmed cases and 519,582 deaths. The W.H.O. said even some countries who had success controlling the virus may well need to reinstitute lockdowns. In Tokyo, the new outbreak continues as the city reported 100 new cases (still very manageable, but growing and they are considering reinstituting quarantine measures). In Australia, a scandal has hit as they have now traced the source of the new Melbourne outbreak. It seems hotel staff repeated had sex with different guests while the hotel was under quarantine…which if you have to get the disease certainly isn’t the worst way to contract it.

Overnight, the PFE vaccine news buoyed markets across the globe. In Asia, markets were strongly green (with the odd exception of Japan, which just eked out a positive close). In Europe, the same is true, with 1% or more gains across the major bourses. As of 7:30 am, US markets are looking toward the same type of day with futures now pointing to a gap higher of between 0.50% (QQQ) to 1.08% (DIA).

The major economic news for Thursday includes Jun Avg. Hourly Earnings, Import, Exports, Trade Balance, Weekly Jobless Claims, Jun Nonfarm Payrolls, and Jun Unemployment Rate (all at 8:30 am). There are no major earnings reports on the day.

Just in case you missed it, today is virtual Friday ahead of a 3-day weekend. So be sure to pay yourself and lock-in some profits ahead of a long news cycle. The bulls have been running the last 3 days and the downtrend is broken. However, only the QQQ can technically be said to be in an uptrend. So be careful getting too far out on the bullish limb. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go). And have a safe and enjoyable long weekend.

🎯 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

New Quarter Long Weekend Pause?

July 1, 2020 by Ed Carter

I suppose window-dressing was the order of the day Tuesday as a flat open gave way to a more-or-less all-day rally with the exception of profit-taking the last 5 minutes. The results were that the SPY gained 1.47%, the DIA gained 0.75%, and the QQQ gained 1.96%. This capped the best quarter since 1998 as the rally has been strong off the March Lows. The VXX was down to 33.95 and T2122 remains in the mid-range at 65.91. Oil (WTI) fell slightly to $39.35/barrel and the 10-year bond yields gained just a touch to 0.656%.

Last night, the Senate unexpectedly approved an extension of the PPP loan/grant program as Democrats were granted a last-minute pushback on the expiration. Republicans had resisted even discussing additional relief until after recess (“maybe it’s not needed” grounds) until the surprise last-minute “unanimous consent” sought by Democrats was granted. However, this move is largely symbolic, as the program was set to expire with over $130 billion in unrequested loan/grant money available.

The main story remains the virus. In the US, the numbers show we have now had 2,727,996 confirmed cases and 130,123 deaths. There were over 48,000 new cases on the day. During his Senate testimony, Dr. Fauci (HHS) again sounded the alarm. He said states probably opened too early and few followed the Task Force or CDC advice. In particular, he noted that pushback against scientific advice is very concerning (referring to the government as well as public pushback). He said that we now have over 40,000 new cases per day on average and he will not be surprised if we reach 100,000 new cases per day if changes aren’t made fast.

Globally, the number of cases has reached 10,614,353 confirmed cases and 514,622 deaths. In Europe, the last intra-EU border was opened as Spain-Portugal crossings reopened after a 3-month shutdown. In Australia, Melbourne has locked down again after 2 weeks of double-digit percentage increase in new cases. The IMF reported today that Asia’s economy will shrink this year (-1.6% projected decline) for the first time in living memory. This came as both Japan and South Korea evaluate the next steps after new clusters were found in Tokyo and Seoul.

Overnight, Asian markets were mixed, with China and most of the smaller markets higher, but Japan South Korea and New Zealand lower. In Europe, markets are red almost across the board. (Greece being the lone green on the board.) This comes despite better than expected Mfg. PMI data out of Germany. However, it is worth noting that the DAX was also hit by a technical glitch that caused volume data to lag at the start of its session. As of 7:30 am, US futures are all red, down from 0.45% (QQQ) to 1.00% (DIA)

The major economic news for Wednesday includes ADP Nonfarm Payroll (8:15 am), Jun Mfg. PMI (9:45 am), Jun ISM Mfg. PMI (10 am), Crude Oil Inventories (10:30 am), and FOMC Meeting Minutes (2 pm). Major earnings reports include CPRI, GIS, M, SCHN, and STZ all before the open.

As we start the new quarter and ease into the long weekend ahead, it looks like markets may take a pause this morning. We did break the downtrend yesterday but have not started a new short-term uptrend yet. In addition, virus-related news will continue to be widespread, but Bulls have paid no notice so far. Just don’t get too far out on the bullish limb yet. Take some profits before the weekend, especially since it will be a long one. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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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Volatility Likely As Quarter Ends

June 30, 2020 by Ed Carter

Monday saw a half percent gap higher on higher than expected Pending Home Sales, but the gap was met with an immediate selloff back below flat. Then the bulls stepped in to take markets sharply higher into 11am. After that a meandering, volatile grind sideways took over for the next few hours until there was another sharp rally the last 10 minutes of the day, causing all 3 major indices to close very near the highs. At the close, the SPY was up 1.50%, the DIA up 2.29%, and the QQQ up 1.09%. The VXX fell back to 35.68 and T2122 returned to the mid-range at 52.31. 10-year bond yields fell slightly to 0.635% and Oil (WTI) climbed back up to $39.63/barrel.

In the social media boycott story, CAG, CLX, DENN, EPC, F, HP, and MSFT all joined the boycott of FB advertising on Monday. While this list now includes many (most?) major brands, it is worth noting that these were never among the top FB advertisers anyway. So, the actual dollar impact of this boycott is limited.

After-hours it was reported the BAC, C, GS, JPM, and MS will keep their dividends for the quarter at the same level as before last week’s stress test. However, WFC will cut its dividend based on the new Fed requirements. No word yet on COF or USB (the 2 other major banks) dividends.

Last night, Fed Chair Powell’s Tuesday House Testimony test was also leaked. In it, he says the recovery path is “extraordinarily uncertain” and will depend on the success of measures to contain the virus surge. Powell is also expected to again urge Congress to continue Fiscal stimulus measures. In unrelated news, the Fed also announced that its last (9^th) virus lending program is now operational. The Primary Market Corporate Credit Facility will allow corporations to borrow at a much lower rate than the open market.

However, the main story remains the virus. In the US, the count shows we have now had 2,682,011 confirmed cases and 128,788 deaths nationally. This includes 31 states with increasing rates on the 7-day average (10 of those being 50% worse than last week), with only 4 having decreasing averages. 14 states have paused their reopening with some even rolling back the process. Ominously, CDC Deputy Dir. Schuchat told the Journal of the American Medical Assoc. that the US has reached the point where there are way too many cases and spread too widely to control the outbreak (as has been done in other countries who used stricter measures and had more compliant populations).

Globally, the number of cases has topped 10 million, at 10,433,289 confirmed and 508,804 deaths. In the UK, Leicester (330k residents) became the first city in the country to reimpose a lockdown. In addition, the EU left the US off the “safe list” meaning that travelers from the US to Europe will still be required to quarantine for 14 days upon arrival. In China, the Manufacturing PMI came in better than expected (into the expansion area). However, a new strain of flu (a variation of swine flu) was also discovered that is widespread among pork populations. This new virus has the characteristics to become another pandemic if not controlled.

Overnight, Asian markets were volatile, but green across the board, on news out of China. In Europe, markets are mixed and volatile, but leaning toward the red side overall. However, again these are smaller moves as the bourses stay close to flat. As of 7:30 am, US futures are all red, but only slightly on the down side of flat.

The major economic news for Tuesday is limited to June Chicago PMI (9:45 am) and Conf. Board Consumer Confidence (10 am). However, there are 4 Fed speakers, including the previously mentioned Chair Powell House Testimony (12:30 pm). The others are Williams (11 am), Brainard (11 am), and Kashkari (2 pm). The only major earnings reports on the day are AYI and CAG before the open and FDX after the close.

Once again, it looks like a volatile day for markets. We face fear from the coronavirus, Joe Biden saying he would roll-back tax cuts, and even a new potential viral threat from swine. On the plus side, the Fed is likely tell us they stand ready and there are even signs of China’s economy expanding. Today is also quarter-end. So, we may see window-dressing or rotation. Keep your focus on the short-term chart and right now that chart says the trend remains bearish with potential support below. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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

Virus Surging Here But China Recovering

June 29, 2020 by Ed Carter

After a small gap down Friday, TX began to rollback its reopening and FL did the same later in the day. That was all the Bears needed to crush the bulls during the session. All 3 major indices put in large black candles and closed near the lows. At the close, SPY was down 2.38%, DIA down 2.74%, and QQQ down 2.36%. The VXX rose to 37.60 and the T2122 (4-week Avg. High-Low Ratio) fell back deep into oversold territory at 6.31. The 10-year bond yield fell to 0.641% and Oil (WTI) was off to $38.20/barrel.

On Sunday, HHS Sec Azar said “the window is closing” for the US to get virus spread under control and “we have to act.” This comes as many states began rolling-back or postponing their reopening measures. This may be a signal for possible rotation from “reopening stocks” (like travel, restaurant, and retail names) back toward “stay home stocks” (like ecommerce, grocery, online services).

Another major story is advertisers taking a stand by stopping their advertising spend on social media over that channel’s failure to reign in hate speech and disinformation on their platforms. On Friday, UL was the big name. After-hours, KO joined the effort, then DEO and SBUX added their names to 160 other major advertisers that are taking part in the boycott on Saturday. In addition to the 160, other major advertisers such as PG are still reviewing their advertising channels “to ensure content accuracy and respect to all people.” So, FB and TWTR stocks were hammered on Friday and that news did not improve over the weekend.

On Sunday, China announced May Industrial Production numbers. These showed that profits rose 6% year-on-year, to $82 billion for the month. This was the first monthly profit China’s Industrial Sector has seen since November and was a vast improvement over April’s 4% year-on-year decline. This is evidence that China’s economy is now rebounding as cost remains under control and output has reached profitable levels. Analysts still expect Chinese government economic policy to remain supportive for some time. However, the profit is a good sign that the second-largest economy is starting to come out of the trough.

However, the main story remains the virus, especially in the US. The count shows we have now had 2,637,180 confirmed cases and 128,438 deaths nationally. 36 states have daily new case rates that rose more than 10% (12 of those rose more than 50%) from the prior week. Only 2 states had falling new case rates. However, economic activity such as driving/public transport use, hotel occupancy, and restaurant bookings all continue to increase nationally.

Globally, the number of cases topped 10 million, with 10,272,143 confirmed cases and 504,965 deaths. While it is Brazil, Peru, and Chile that are the South American countries with the most rampant outbreaks. However, it was Argentina that reinstituted lockdown in the capital Buenos Aires amidst exponential growth in new cases. In the UK, the city of Leicester (midlands) is publicly debating going back into lockdown due to a spike in cases in the city.

The only major economic news for Monday is May Pending Home Sales (10 am). Major earnings reports for the day are limited to MU after the close. However, also of note is that CHK (the poster boy for Shale Oil producers) filed for bankruptcy Sunday and expects that move to wipe out $7 billion in debt. It is unclear if this reads-through to other shale producers since the price has been back at levels (near $40/barrel) that are purportedly profitable for many of them. One last item is that BA is reportedly starting its 3-days of recertification test flights for the FAA.

It’s looking like a volatile day for markets as the fear of another shutdown looms and bullish views of a recovery fight it out. However, remain wary of the potential for profit-taking or rebalancing as the quarter ends Tuesday and many funds will be making this a short week, if they come into the trading room at all. Keep your focus on the short-term chart and right now that chart says the trend is bearish with potential support in the large-caps now at hand. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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 Trying But Virus Threat Remains

June 26, 2020 by Ed Carter

After a small gap down (on higher than expected Initial Jobless Claims), the bulls stepped in Thursday and rallied for the day. The downtrend remains in place, but it was a nice white candle (closing near the highs) in all 3 major indices. The SPY closed up 1.07%, the DIA up 1.10%, and QQQ up 0.95%. VXX fell back to 35.39and T2122 climbed out of oversold territory to 29.25. 10-year bond yields fell slightly to 0.682% and Oil (WTI) climbed back to $39.08/barrel.

The financials led the market higher on Thursday as traders hoped that another announced decrease in bank regulation would lead to more profits. However, after-hours, the Fed told the big banks that they must suspend buybacks and cap dividends at current levels for at least the 3^rd quarter. This came after the Fed reported that the annual stress test found some banks would be dangerously close to the minimum capital levels needed because of the coronavirus. Banks will also be required to resubmit their loan payout plan every quarter in additional scrutiny caused by Fed concern of potential loan defaults.

The other major story on the day was the virus, especially in the US. The count shows we now have had 2,504,676 confirmed cases and 126,785 deaths. The national 7-day avg. of new cases is the highest it has been at over 31,100 per day (a 34% increase in the average from a week ago). In TX, the outbreak caused Gov. Abbott to announce the halting of the state’s reopening. In FL, Gov. DeSantis also said “the state now has no plans” for continuing its reopening. Out in CA, Gov. Newsom had to declare a budget emergency so that the state could shift more funds into testing, PPE, and medical equipment. Overall, 30 states reported an increase in the number of new cases, 12 had a new high daily case count and 16 states had rising virus hospitalizations.

Globally, the headline numbers are 9,738,374 confirmed cases and 492,390 deaths. Brazil remains the world epicenter as it reported over 39,000 new cases Thursday. Peru also had another record high case count. Further North, Mexico also is seeing a surge in infections, including the Finance Minister who tested positive two days after a video showed him standing right next to their President and the other cabinet members.

Overnight, Asian markets were mostly green. Hong Kong was the only exception as the HSI lost almost a percent. In Europe, markets are also green across the board so far. The 3 major bourses are all up over 1.25% halfway through their day. As of 7:30 am, US futures are mixed, with the big 3 indices just on either side of flat.

The major economic news for Friday includes May Personal Spending (8:30 am) and Michigan Consumer Sentiment (10 am). There are no major earnings reports on the day. However, it was reported early that mortgage bailout requests rose this last week, now accounting for 8.8% of all mortgages in trouble.

It’s still early, but it is looking like markets want to drift higher toward the weekend. However, be wary of the potential for profit-taking as the quarter winds down and of the weekend news cycle (again likely to be dominated by bad virus news). Also remember this is payday, so lock-in some profit if you can. Focus on the short-term chart in front of you and be ready for the whipsaw that has been the rule for some time. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

🎯 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