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Oil Surge, GDP Forecast Cut Start Week

October 11, 2021 by Ed Carter

Markets gapped slightly higher at the open, in a counter-intuitive move to the Sept. Payroll Additions coming in less than half of expected (+194k vs +500k estimate). At the same time, the Unemployment rate fell much further than expected (to 4.8%) as participation also dropped. Regardless, despite the gap higher of about four-tenths of a percent, all 3 major indices immediately gave back that gap. The large-cap indices spent the rest of the day in a roller-coaster ride to nowhere as markets chopped sideways. However, the QQQ kept selling of until it started its own sideways chop in the early afternoon. This left us with Bearish Engulfing candles of various sizes in all 3 major indices. On the day, SPY lose 0.18%, DIA lost 0.03%, and QQQ lost 0.50%. The VXX fell just under 2% to 24.79 and T2122 fell outside the overbought territory to 70.85. 10-year bond yields jumped up to 1.614% and Oil (WTI) gained 1.5% to $79.48/barrel.

After the close, the Organization for Economic Cooperation and Development (OECD) announced a major breakthrough. The 136 countries agreed to a global minimum corporate tax rate of 15%. This includes the agreement of smaller “tax haven” countries like Ireland. The breakthrough came after the countries agreed that the 15% rate will not be increased at a later date. The deal will ensure that companies pay tax in the countries in which they operate rather than shifting money to a tax haven to avoid taxes by creative accounting. The new deal is scheduled to start in 2023, but some countries have work to do inside their own laws to implement the agreement.

On Sunday, GS cut their forecast for US economic growth for 2021. Although it was a small cut (to 5.6% for the year versus the previous 5.7%), they also reduced the 2022 forecast substantially, from 4.4% to 4.0%. The stated reason for the move was a delay in the recovery of consumer spending. This may well be reflected in earnings reports that start again this week. They also cited their current assumption is that chip supplies will not recover until at least the second half of 2022. The potential good news from this report was that they increased out-year growth forecasts based on a later recovery in consumer spending and removal of semiconductor shortage restraints from the economy.

LUV had a rough weekend. The airline had to cancel more than 1,800 flights, well over 27% of its schedule. The company blamed the disruptions on air traffic controllers and bad weather. While LUV would not comment on whether staff shortages contributed to the outages, but the company has stated in the past that they have had trouble hiring enough new staff since the pandemic. Oddly, in the same region of the country where LUV reported its outages, AAL only had to cancel 2% of their flights and SAVE only canceled 4% of its schedule.

Overnight, Asian markets were mixed, with the majority of exchanges in the red, but the big movers on the green side. Hong Kong (+1.96%) and Japan (+1.60%) were the winners on the day. The odd part of the Hong Kong rally was that Chinese Tech stocks surged higher even after a Chinese regulator slapped a $534 million fine on a giant food delivery app. BABA jumped nearly 8% on the Hong Kong exchange. In Europe, stocks are also mixed, but lean to the red side at mid-day. The FTSE (+0.32%), DAX (-0.36%), and CAC (-0.26%) are typical of the continent in early afternoon trading. As of 7:30 am, US Futures are pointing toward an open lower. The DIA is implying a -0.21% open, the SPY is implying a -0.38% open, and the QQQ is implying a -0.61% open at this hour. However, the major overnight news is another huge rally in Oil. The WTI is up almost 3.5% in early trading to $81.97.

There is no major economic news scheduled for release on Monday. There are also no major earnings reports scheduled for the day.

The bears are starting the week with follow-through to Friday’s Bearish Engulfing signals, especially in the tech-heavy Nasdaq. Add to that the huge jump in Oil prices and we can expect a lot of fear in the markets at least early today. We also have earning season kicking off again, new inflation data, and a slew of Fed speakers later in the week. So, a bumpy ride is likely to continue. Be prepared for intraday volatility, gaps, and remember that the trend remains bearish.

Once again, bear in mind that you don’t have to trade every day or week. Either way, watch your current positions before looking to add trades. Remember that it is discipline and good trading rules that protect you from your own worst mistakes. So, focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed get the better of you. Finally, remember that we have monthly options expiring at the end of the week. So, it’s time to think about closing, rolling, or riding into expiration with very little time value left.

Swing Trade Ideas for your consideration and watchlist: HUT, SOFI, BTU, GOTU, BEKE, SQQQ, ORCL, MRVL. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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Sept Payrolls Data Leads The News Today

October 8, 2021 by Ed Carter

Stocks gapped higher and followed through the first half-hour Thursday on relief over a deal to temporarily raise the debt limit. However, from 10 am until 1:30 pm we saw a sideways grind in a very tight range and then a selloff all the way into the close. This left all 3 major indices pretty much where they started the day in something resembling a Shooting Star candled after a 2-day relief rally. On the day, SPY gained 0.86%, DIA gained 1.03%, and QQQ gained 0.92%. The VXX fell to 25.26 and T2122 shot all the way up deep into the overbought territory at 89.95. 10-year bond yields spiked again to 1.569% and Oil (WTI) gained 1.78% to $78.81/barrel.

Overnight the Senate passed a short-term minimal increase in the US debt limit. The House will take up the bill in the next couple of days, but the Senate was the hurdle, due to Senate rules requiring 60 votes. The $480 billion increase basically kicks the can down the road to December 3, when the country will face exactly the same problem again. That is also the date the temporary budget extension expires. So, December 3 becomes critical for both a government shutdown and default on US debt.

Overnight, the Chinese Central Bank (PBOC) withdrew over $2 trillion dollars in liquidity from their banking system. Not only was the move massive, but it broke the trend whereby they had added about $16 billion in liquidity each day of the previous week (that preceded the Chinese 5-day holiday). The big reduction was seen as a signal that the Chinese government now feels that the Evergrande default situation is under control and the system no longer needs emergency liquidity. Chinese 10-year bond prices fell 0.4% in reaction (a massive move), but have started to creep back up as their day went on.

In other business news, TSLA announced Thursday that it is moving its corporate headquarters to Austin Texas (from Palo Alto CA). This comes 17 months after CEO Elon Musk had first threatened the move while he fought with local CA government officials over Covid restrictions. In the announcement of the move, Musk took another swipe at CA, saying TSLA workers can’t afford the cost of living in CA. However, that does not seem to be the real concern. At the same event, it was announced that while corporate jobs are moving to Texas, the CA production plant will remain in place and is still planned to expand by 50%. So, it seems the company is not concerned about their production workers’ ability to afford the cost of living in that area.

Overnight, Asian markets leaned heavily to the green side. Japan (+1.34%), Indonesia (+1.02%), and Australia (+0.87%) led the way. On their first day of trading in over a week, Shanghai (+0.67%) and Shenzhen (+0.74%) both closed higher. In Europe, markets are more mixed at mid-day. The FTSE (+0.05%) and DAX (-0.09%) are flat, while the CAC (-0.35%) is down a bit. Part of the indecision on the continent comes from Poland, where judges have ruled that Polish law is supreme over EU law, which raises the specter of a potential exit from the EU by Poland. As of 7:30 am, US Futures are pointing toward an open just on the green side of flat. The DIA and SPY are both implying a +0.12% open, and the QQQ is implying a +0.10% open. 10-year bond yields reached above 1.6% overnight, but have retreated to a still higher 1.58% in early morning trading. Meanwhile, Oil continues its rally, up almost another percent in early trading.

The major economic news scheduled for release on Friday includes Sept. Nonfarm Payrolls, Sept. Participation Rate, Sept. Unemployment Rate, Sept. Building Permits, and Sept. Avg. Hourly Earnings (all at 8:30 am). There are no major earnings reports scheduled for the day.

Yesterday’s late-day fade, leaving us with large high wicks does not breed a lot of confidence that the relief rally has legs. However, so far this morning, markets seem to be waiting on the Payrolls data before making up its mind. Also bear in mind that earnings season kicks off in earnest again next week. So, with the weekend ahead and a lot of positioning to do, expect the volatility of intraday swings to continue.

Watch your current positions before looking to add trades. Remember that it is discipline and good trading rules that protect you from your own worst mistakes. So, focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed get the better of you. A good trader refuses to let winners turn into losers.

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas for Friday. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Debt Default Avoidance Cheers The Bulls

October 7, 2021 by Ed Carter

Markets gapped down strongly Wednesday and then went on an all-day roller coaster ride as volatility reigned. However, the mid-afternoon bullish wave coming from good news on a possible debt ceiling deal and then strong buying the last 20 minutes left us near the highs. This gave us gap-down, big white candles that have managed to close above the T-line (8ema) in the large-cap indices and is just below it in the QQQ. On the day, SPY gained 0.42%, DIA gained 0.29%, and QQQ gained 0.64%. However, it is worth noting that the downtrend still remains unbroken. The VXX fell slightly to 26.21 and T2122 fell back to the lower end of the mid-range at 38.96. 10-year bond yields fell, but only a bit, to 1.528%, and Oil (WTI) fell 2.5% to $76.94/barrel.

During the afternoon, GOP Senate Minority Leader McConnell offered Democrats a short-term suspension (until December) of the debt ceiling and said Republicans would not block the Democrats from using the reconciliation process (which only requires a majority vote in the Senate, not 60 votes) to raise the debt limit permanently. Markets loved this news and rallied hard shortly afterward. Essentially, this move is the GOP saying they want the debt ceiling raised (to avoid default), but they also want the Democrats to do it on their own. After the close, Democrats signaled that they will accept the short-term suspension. This takes the pressure off (kicks the can) and bond markets are likely to be happy with this development.

K announced it is planning to restart operations at 4 plants that have been closed this week by a strike among 1,400 workers who are seeking wage increases. The company said that it plans to use salaried employees as well as “third-party resources” to operate the plants. This is the latest in a string of strikes this fall among various food manufacturers such as PM (Nabisco), PEP (Frito Lay), and MDLZ (Oreo).

In other business news, GM said Wednesday that they expect to double sales by 2030. They expect their new emphasis on electric vehicles to be aided by regulations around the globe, forcing more vehicle owners to upgrade sooner. Bitcoin also soared 10%, back above $55,000 on a Bloomberg report that George Soros both owns cryptocurrencies now and has plans to expand his fund’s holdings in this area because he sees crypto as more than just an inflation hedge.

Overnight, Asian markets were strongly green for the most part, but mainland China remains closed another day. Hong Kong (+3.07%), Taiwan (+1.96%), and South Korea (+1.76%) led the charge. In Europe, markets are also thrilled about the avoidance of a US default. At mid-day, the FTSE (+1.20%), DAX (+1.32%), and CAC (+1.63%) are typical of the continent. As of 7:30 am, US Futures are pointing a gap higher. The DIA is implying a +0.83% open, the SPY implying a +0.94% open, and the QQQ implying a +1.19% open. 10-year bond yields are also down and Oil (WTI) is off 1.50% in early morning trading.

The major economic news scheduled for release on Thursday is limited to Weekly Jobless Claims (8:30 am) and a Fed speaker (Williams at 8:40 am). The major earnings report scheduled for the day includes CAG, HELE, and LW before the open. There are no major reports scheduled for after the close.

Relief on the assumption the US will not default on its debt gave the bulls strong afternoon energy and it appears overnight confirmations are giving them strength again early today. We should still remain leery of volatility and resistance. However, as of this moment, it looks like we will challenge the downtrend in all 3 major indices at the open. Just bear in mind that a challenge does not guarantee success and a break of the downtrend does not mean a bullish trend immediately replaces the bearish one. So, be careful getting carried away by FOMO.

Swing Trade Ideas for your consideration and watchlist: CDAY, DLPN, SPWR, RSG, APPS, DDOG, WFC, AIG, C, MSFT, MRVL, UBER. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Bears Looking to Roar As Bond Rates Rise

October 6, 2021 by Ed Carter

Markets gapped higher and the bulls followed through all morning. However, this turned into a sideways grind in a tight range followed by a hard selloff in the last 45 minutes of the day. This left us with a Bullish Harami in the QQQ and gap-up white candles with larger upper wicks in all 3 major indices. Leading this charge were the FANGMAN stocks that led us lower Monday. However, none of the indices were able to take out their T-line. On the day, SPY gained 1.04%, DIA gained 0.92%, and QQQ gained 1.35%. The VXX fell almost 4% to 26.55 and T2122 remains in the mid-range at 60.68. 10-year bond yields shot higher to 1.531% and Oil (WTI) gained almost 2% to $79.15/barrel.

FB can’t catch a break on the news front. After a 6-hour outage on Monday, the US Senate spent most of Tuesday hearing testimony from a FB whistleblower (Frances Haugen) and making their own attacks on FB and CEO Mark Zuckerberg. The 4 main takeaways from Haugen’s testimony are that: 1) FB mechanics are designed to aid in the spread of misinformation (because the controversial or salacious draws eyes and clicks); 2) FB knows this and has decided to take the minimum possible steps to curb such posts; 3) FB has research showing the negative impacts of the platform on children and teens (especially young girls), and has decided to mislead the public about the topic rather than admit the problems; 4) FB knows its platform enables exploitation but has prioritized profits over those issues in every case, even when the impact to profit had been deemed tiny by management. During the day, FB responded with a statement essentially saying that Haugen wasn’t knowledgeable about the things she was claiming and they totally disagree with her characterizations. Despite the all-day beating in the press, FB stock rebounded to close up 2% from the terrible day it suffered Monday. Then overnight, Zuckerberg responded saying the testimony was not true and the company does not prioritize profits over user safety.

Mortgage rates jumped to an average of 3.14% for a 30-year fixed-rate, conforming loan for the week. This led to a 2% decline in new purchase mortgage applications while refinance applications plummeted 10%. This came to an overall fall of 7% for loan applications for the week.

STZ reported a miss on earnings but did beat on revenue. However, AYI beat on both lines in this morning’s report. News also broke this morning that PLTR has received an Army contract overnight. STX got a downgrade from Morgan Stanley. Finally, SWX announced a deal to a pipeline from D for just under $2 billion in cash and assumed debt.

Overnight, Asian markets are mostly in the red. South Korea (-1.82%), Japan (-1.05%), and India (-0.99%) led the losses. However, Indonesia (+2.06%), and Malaysia (+1.89%) bucked the trend. Mainland Chinese markets remain closed. In Europe, markets are deeply in the red across the board as of mid-day. Analysts claim another overnight spike in the US 10-year bond rate led to the European selloff. The FTSE (-1.79%), DAX (-2.28%), and CAC (-2.17%) lead and are typical of the continent in early afternoon trading. As of 7:30 am, US Futures are pointing toward a nasty gap down on our side of the pond as well. The DIA is implying a -0.96% open, the SPY implying a -1.11% open, and the QQQ implying a -1.27% open. 10-year bond yields are up strongly to 1.55% and Oil is mildly lower as the Dollar is up sharply in early trading.

The major economic news scheduled for release on Wednesday includes ADP Nonfarm Employment (8:25 am), Crude Oil Inventories (10:30 am) and Fed member Bostic speaks twice (9 am and 11:30 am). The major earnings reports scheduled for the day include AYI, RPM, and STZ before the open. Then after the close LEVI reports.

As mentioned yesterday, calling a bottom can be a very risky business. It looks like the bears are looking to punish anyone who jumped on the rally train Tuesday. With the 3 major indices all near their premarket lows, this could be an ugly open. The trend remains bearish and the resistance overhead remains plentiful. So, be careful, and regardless of the direction you trade, be prepared for heavy volatility and intra-day swings.

Once again, remember that you do not need to trade every day or even week. Cash is a position. So think about waiting, if you want to go long in this market, or at the very least hedging your portfolio. Watch your current positions before looking to add more trades. Focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed (or FOMO) get the better of you. A good trader refuses to let winners turn into losers.

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Tech Pain, FB Outage, and the Debt Ceiling

October 5, 2021 by Ed Carter

Markets gapped lower and the bear piled on with a very strong sell-off that lasted until noon. Then we saw a short relief rally leading into a sideways grind until the end of the day. However, a heavy buying pressure the last 5 minutes brought us up off the lows. This left us with large black candles that have good-sized lower wicks and there was no confirmation for Friday’s Bullish Harami signals. In particular, the tech giants (like TWTR, FB, AMZN, AAPL, MSFT, GOOG) that have led the long rally got hammered hard again. On the day, SPY lost 1.27%, DIA lost 0.92%, and QQQ lost 2.07%. The VXX was up 3% to 25.57 and T2122 is at the lower side of the mid-range at 44.61. 10-year bond yields backed off of premarket highs to end up at 1.482% and Oil (WTI) jumped another 2.20% to $77.55/barrel.

During the day, FB (as well as their subsidiaries Instagram and WhatsApp) suffered a global outage for more than 4 hours. The problem was caused by human error in the configuration of a server backbone (network between servers). This was the service’s worst outage since 2008 when FB had only 80 million monthly users instead of the current number of almost 3 billion. In other FB news, the company filed a motion requesting that the FTC’s legal case against the company (for monopolistic behavior) be thrown out and that FTC Chair Khan recuse herself from all future regulatory matters pertaining to FB.

PEP beat on both lines this morning. In addition, the company raised 2021 guidance. It did this despite higher costs from its supply chain (transportation, ingredients, labor, etc.). On the downside, North American sales growth moderated to 7%, and the Quaker Foods unit saw only 1% growth for the quarter. In other business news, SPWR announced a restructuring this morning. The move will shift the company’s focus to the booming residential solar market and sell off its commercial and industrial business units.

Also during the day yesterday, President Biden called on Congress to raise the debt limit in the next 2 weeks to avoid a first-ever default on US debt. This did nothing to change the facts but did raise fears in the bond markets. The President blamed Republicans for blocking efforts to raise the limit while claiming they are responsible for over $8 trillion of debt from the previous administration. He did not mention that this $8 trillion amounts to only 27% of the almost $29 trillion in our current national debt (or who he blames the other 73% on). Regardless, the GOP will not vote for any increase before the 2022 elections. So, the Democrats will be forced to do it unilaterally to avoid a default. (Then Republicans will persecute them for doing so in the mid-term election. This is exactly the opposite of both party’s positions in 2004 and 2006. So, it is a tried-and-true political game plan.) Treasury Sec. Yellen doubled down on the message this morning, by saying the nation faces a significant recession if we default.

Overnight, Asian markets leaned to the red side as mainland China remains closed. Japan (-2.19%) led the losses with South Korea (-1.89%) and New Zealand (-1.03%) following. India (+0.74%), Thailand (+0.60%), and Malaysia (+0.52%) led gainers. In Europe, outside of Norway (-0.36%), the region is green across the board at mid-day. The FTSE (+0.62%), DAX (+0.40%), and CAC (+0.95%) are typical of the spread we see in early afternoon trading. As of 7:30 am, US Futures are pointing toward a positive open. The DIA is implying a +0.50% open, the SPY implying a +0.45% open, and the QQQ implying a 0.40% open. 10-year bond yields are also up to 1.496% and Oil is at $78.41/barrel in early trading.

The major economic news scheduled for release on Tuesday includes August Import/Exports, and August Trade Balance (both at 8:30 am), September Services PMI (9:45 am), September ISM Non-Mfg. PMI (10 am), and a Fed speaker (Quarles at 1:15 pm). The only major earnings report scheduled for the day is PEP before the open.

The FAANG stocks started the week by taking a beating, but look to be trying to rebound at the open Tuesday. It looks as if “recovery stocks” such as banks, retail, and transports are also looking to move higher at the open. With that said, there is a lot of resistance above and the short-term trend has been strongly bearish the last few weeks. So, be very careful about calling a bottom. Knife-catchers usually lose fingers. At the very least, expect volatility to continue.

Remember that you do not need to trade every day or even week. Think about waiting, if you want to go long in this market, or at the very least hedging your portfolio. Focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed (or FOMO) get the better of you. A good trader refuses to let winners turn into losers.

Swing Trade Ideas for your consideration and watchlist: HUT, AMN, OMC, CLDX, QS, AIG, XLU, LOW, DOG, SQQQ, UVXY. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Bears Still In Control And China Trade

October 4, 2021 by Ed Carter

Markets gave us another gap higher at the open on Friday and then proceeded to sell off the first couple of hours. However, then the bulls stepped in for a rally that lasted until 3 pm when traders took some profits at day end. This left us with bullish Harami candles with plenty of wicks in all 3 major indices. On the day, SPY gained 1.19%, DIA gained 1.45%, and QQQ gained 0.62%. The VXX fell to 26.82 and T2122 jumped back up to mid-range at 66.12. 10-year bond yields fell sharply to 1.465% and Oil (WTI) rose almost 1% to $75.74/barrel.

On Sunday, TSLA announced they had shipped 241,300 vehicles in Q3, well above the 220,900 predicted by analysts. The company also produced 237,823 cars in Q3. Both figures were well above the 201,250 shipped and 206,421 produced in Q2. As a comparison, GM delivered 446,997 vehicles in Q3, which itself was a 33% drop from the prior year due to the chip shortage.

In other weekend news, an oil spill of roughly 3,000 barrels is washing up on beaches in CA. The spill currently covers 13 square miles of ocean. The rig from which the spill originated is operated by a subsidiary of AMPY. GOOG also announced it will abandon the idea of offering bank accounts to users via Google Pay. In the announcement of this move, GOOG said it has decided that competing with banks was not as good of an idea as focusing on a digital ecosystem to be used by banks and financial services firms with existing customers.

US Trade Rep. Tai will be outlining the Biden Administration’s trade strategy for China today. She will speak to a Washington think tank at 10 am. In the speech, she is expected to announce targeted tariffs after saying that China has failed to live up to their “Phase 1 commitments” from the Trump administration trade deal. She is also expected to address “serious concerns” over China’s “state-centered and non-market practices” that were not addressed in the previous administration’s trade deal. Analysts expect China to again retaliate with their own “targeted tariffs.”

Overnight, Asian markets were mixed, but leaned to the green in uneven trade. Hong Kong (-2.19%), South Korea (-1.62%), and Japan (-1.13%) were all sharply lower. On the other side, Indonesia (+1.83%), Singapore (+1.26%), and India (+0.91%) were higher. (Mainland Chinese markets were closed.) In Europe, markets are mixed at mid-day. The FTSE (+0.15%), DAX (-0.02%), and CAC (-0.21%) lead as usual. However, smaller exchanges are split between strong gains in Russia (+0.90%) and strong losses such as Finland (-1.19%). As of 7:30 am, US Futures are pointing toward a down open. The DIA is implying a -0.30% open, the SPY implying a -0.36% open, and the QQQ implying a -0.49% open at this hour. 10-year bond yields are up sharply to 1.496% and Oil is flat as the Dollar is weaker in early trading.

The only major economic news scheduled for release on Monday is August Factory Order s (10 am). However, the regular monthly OPEC+ meeting is also scheduled to begin. There are no major earnings reports scheduled for the day.

As we start the first full week of October, it looks like the mega-cap tech names are starting the week lower, and dragging the rest of the market with them. All 3 of the major indices have now backed down from their premarket highs. In addition, markets still face that bearish trend and resistance levels overhead. So, be careful taking too much constructive from Friday’s white candle or Harami signal. Candle signals are not real until they have confirmation. So for now, the bears are still in overall control.

Consider waiting, if you want to go long in this market, and even if you trade to the short side, stay nimble because you know bear moves end faster than bull moves. Focus on your trading process and managing the things you can control. It is discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

Swing Trade Ideas for your consideration and watchlist: DISH, RJF, FITB, RHI, SABR, SAVE You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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Futures Up But Chart Bearish to Start Q4

October 1, 2021 by Ed Carter

Markets gave us another bull trap Thursday with about a four-tenths of a percent gap higher met with immediate and all-day selling. This took us out very near the lows and gave us big, ugly, black candles for the session in all 3 major indices. On the day, SPY lost 1.22%, DIA lost 1.59%, and QQQ lost a comparatively small 0.37%. The VXX was flat at 27.83 and T2122 fell back into the oversold territory at 18.51. 10-year bond yields fell to 1.496% and Oil (WTI) rose slightly to $75.02/barrel.

During the day Thursday, both the Senate and House passed a government funding bill. This will keep the federal government operating until early December as well as providing for some hurricane and Afghan Refugee Resettlement aid. However, it just kicks the can down the road on the $3.5 trillion budget and avoids altogether the Debt Ceiling issue, which could result in a US default on debt if not raised in the next 18 days. On the other agenda item, the bipartisan Infrastructure Bill, House Speaker Pelosi failed to push through a vote Thursday night as the progressives of her party balked. She now “hopes” for a vote on the bill today.

MRK and Ridgeback Biotherapeutics announced they are seeking FDA emergency authorization for an oral antiviral treatment (not vaccine) that phase 3 trial results have now shown to reduce the risk of hospitalization or death by 50%. If approved, the drug, molnupiravar, would be the first oral treatment for Covid-19. As long as we’re on the subject, as of yesterday, the US has seen 44.3 million total cases and 716,847 total deaths in the country. Meanwhile, the averages have fallen back to 109,464 new cases and 1,626 new deaths per day across America.

Auto industry forecasters are now predicting that car sales plummeted in Q3. The consensus among the 3 main industry analyst groups say that sales between July and September were down 13%-14% from Q3 2020. The primary driver of this lack of sales is the global ship shortage that caused production cuts across all major manufacturers. September alone is expected to come in 25% below the 2020 sales number. While Japanese manufacturers have faired a bit better (due to keeping larger inventories of components as a normal course of business), all regions of the globe are now feeling the pain.

Overnight, Asian markets were mixed but mostly red on Friday. Japan (-2.31%), Taiwan (-2.15%), and Australia (-2.00%) paced the losers. Meanwhile, Shenzhen (+1.63%) and Shanghai (+0.90%) led the gainers as Evergrande contagion fears waned. In Europe, markets are also mostly red at mid-day. The FTSE (-1.02%), DAX (-0.65%), and CAC (-0.37%) represent a typical spread across the continent in early afternoon with only Greece and Portugal barely holding on to the green side of flat. As of 7:30 am, US Futures are pointing toward a slightly lower open ahead of data. The DIA is implying a -0.21% open, the SPY implying a -0.15% open, and the QQQ implying a flat -0.04% open at this hour. However, 10-year bond yields, the Dollar, and petroleum commodities are all down in early trading.

The major economic news scheduled for release on Friday is limited to August PCE Price Index and August Personal Spending (both at 8:30 am), Mfg. PMI (9:45 am), and ISM Mfg. PMI and Michigan Consumer Sentiment (both at 10 am). There are no major earnings reports scheduled for the day.

Welcome to October and Q4. Mr. Market seems to be greeting us with more of the same as overnight markets were down significantly, but are recovering strongly so far this morning. So, volatility remains the watchword. Overall, having broken out of their “dreaded h” patterns, the major indices are going to be seeking support below. However, it is Friday. So, many traders will be looking to reposition for the weekend.

Again, remember you don’t have to trade every day. Cash is a perfectly valid position. Consider waiting, if you want to go long in this market, and even if you trade short, stay nimble because you know bear moves end faster than bull moves. Focus on the process and on managing the things you can control. It’s discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

🎯 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

Senate Kicks Budget Can to Christmas

September 30, 2021 by Ed Carter

Markets made a modest gap higher after the previous brutal day. However, this turned into a “Dead Cat” bounce as waves of price action followed the volatility all day. At the end of the day, we went out near the lows, leaving us with indecisive candles with larger upper wicks in all 3 major indices. On the day, SPY gained 0.15%, DIA gained 0.25%, and QQQ lost 0.16%. The VXX rose to 27.81 and T2122 popped out of the oversold territory at 34.25. 10-year bond yields fell slightly to 1.529% and Oil (WTI) dropped nine-tenths of a percent to $74.62/barrel. Natural Gas plummeted 7.24% on the day (from a 7-year high) after having been down over 8% in the early afternoon.

During the day, Fed Chair Powell told a conference hosted by the ECB that inflation was “frustrating” and that he sees it continuing into next year. He also expressed frustration that not enough people are getting vaccinated to stop the spread of the Covid Delta variant and that is having “important economic policy impacts.” He is scheduled to testify before the House on Thursday.

Early this morning, the Senate reached a deal to avoid a government shutdown. The deal would fund the government through December as well as provide funds for hurricane relief and Afghan refugee resettlement. It seems Democrats were the ones that blinked in these negotiations because the bill does not address the debt ceiling (that now will require a separate bill and fight), which previously had been included in all Democratic proposals. The House still needs to pass this bill, as -is before midnight to avoid the shutdown.

Z released a report saying that the national average rent skyrocketed by 11.5% (year-on-year) in August. States like FL and GA saw much higher 25% average increases over the same time. Another firm (Yardi) reported a “more reasonable” increase of 10.3% in August (again, year-on-year). The Dallas Federal Reserve estimates over the next two years rents will continue to rise at the highest rate in more than 30 years. These increases help underscore the dramatic real estate market price increases but also are likely to lead to dramatic housing problems with wages simply being unable to keep pace.

Overnight, Asian markets were mixed. Indonesia (+2.02%), Australia (+1.88%), and Shenzhen (+1.64%) led the gainers. Meanwhile, Malaysia (-0.64%), India (-0.53%), and Hong Kong (-0.36%) were among the losers. In Europe, markets are mostly green at mid-day in modest trading. The FTSE (+0.21%), DAX (-0.20%), and CAC (+0.06%) are typical of the region. As of 7:30 am, US Futures are pointing toward a green open. The DIA is implying a +0.44% open, the SPY implying a +0.45% open, and the QQQ implying a +0.51% open at this hour. Natural Gas continues its tear, up another 2+% in early trading.

The major economic news scheduled for release on Thursday is limited to Q2 GDP and Initial Jobless Claims (both at 8:30 am), Chicago PMI (9:45 am), and 4 Fed speakers (Chair Powell testifies at tbd, Williams at 10 am, Bostic at 11 am, and Harker at 11:30 am). The major earnings reports scheduled for the day include BBBY, KMX, MKC, PAYX, and HNNMY before the open. Then after the close, JEF reports. The month and Q3 also come to an end today.

As Q3 comes to an end today, beware of rotation as funds window-dress their portfolios prior to reporting. Also, keep in mind that we have 4 Fed speakers again today, including Fed Chair Powell for the third straight day. There is no reason to think the volatility will lesson today as stocks attempt to retest resistance above in the bearish trend.

Remember you don’t have to trade every day. Cash is a perfectly valid position. Nobody has ever consistently predicted reversals. So, don’t think you can either. Consider waiting if you want to be long this market and stay nimble if you trade short as bear moves end faster than bull moves. Focus on the process and on managing the things you can control. It’s discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

Swing Trade Ideas for your consideration and watchlist: MRK, FCEL, XLK, TSLA, NFLX, SPXU, SPY, SDS, LUMN, SQQQ, UVXY. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Premarket Bounce and More Fed Speakers

September 29, 2021 by Ed Carter

Markets gapped down significantly Tuesday and the bears piled on to follow-through into the early afternoon. Then after a short, mid-afternoon rally, we sold off again the last hour to end the day near the lows. This left us with big, ugly black candles in all 3 major indices that printed an Evening Star failing the 50sma in the DIA and a Dreaded-h pattern in the SPY and QQQ. Tech stocks took the worst of the beating with TWTR down 4.47%, GOOG down 3.76%, FB down 3.66%, and MSFT down 3.62%. On the day SPY lost 1.97%, DIA lost 1.63%, and QQQ lost 2.77%. The VXX rose 10% to 27.37 and T2122 fell hard to just inside the oversold territory at 17.25. The 10-year bond yields rose sharply, closing a 1544% and Oil (WTI) fell 0.85% to $74.81/barrel.

During the day, it was reported that the progressive faction of the House Democrats will defy Speaker Pelosi and oppose the $1 trillion bipartisan Infrastructure bill deal unless they get a vote at the same time on the more liberal portions of President Biden’s economic agenda. Meanwhile, in the Senate, Republican members blocked another Democratic attempt to raise the debt ceiling (the second time in two days). This comes after the Treasury Dept. announced the actual date the government will no longer be able to avoid a default on US debt (without a prior debt ceiling increase) is October 18. While many pundits claimed these impasses were the cause of Tuesday’s selloff and even with no deal is in sight, it still seems unlikely the US will default. A temporary shutdown of the government is quite possible, but default really serves no party’s interests, and certainly not the country’s interest, in the long run. However, analysts say that is what the market is fearing most and could be the proximate cause of a deeper pullback.

Interest rates rose last week, with a 30-year fixed-rate mortgage averaging 3.10% (up from 3.03% the week prior). This led total mortgage applications to fall 1.1% week on week. Interestingly, the rate-sensitive refinance application number was also only 1% lower than the prior week.

In miscellaneous news, last night TSLA CEO Elon Musk told an industry conference that the US Government should avoid regulating crypto. Cryptocurrency markets took heart from this, but it is quite unlikely even a billionaire like Musk has much sway with the Feds. Bloomberg reported this morning that the FDA will approve booster shots of the MRNA vaccine (in the same way it recently approved PFE booster shots). The huge tech names that led the beating are all showing a bounce (dead cat?) in premarket action. TWTR, TSLA, NFLX, MSFT, FB, and AAPL all up over three-quarters of a percent at 7:30 am.

Overnight, Asian markets were mostly in the red. Japan (-2.12%), Taiwan (-1.90%), Shanghai (-1.83%), and Shenzhen (-1.64%) led the region lower. Hong Kong (+0.67%) and Indonesia (+0.81%) bucked the trend. In Europe, markets are strongly in the green so far today. The FTSE (+0.85%), DAX (+0.95%), and CAC (+1.21%) are typical and leading the region higher at mid-day. As of 7:30 am, US Futures are pointing to a modest gap higher. The DIA is implying a +0.46% open, the SPY implying a +0.54% open, and the QQQ implying a +0.65% open at this hour. 10-year bond yields are down to 1.51% and Oil (WTI) is trading two-thirds of a percent lower in early trading.

The major economic news scheduled for release on Wednesday is limited to August Home Sales (10 am), Crude Oil Inventories (10:30 am), and a trio of Fed speakers (Chair Powell at 11:45 am), Bostic at 1 pm, and Williams at 5 pm. The major earnings reports scheduled for the day include CTAS, JBL, and WOR before the open. Then after the close, MLHR reports.

After such an ugly Tuesday, traditionally we would see a rebound (at least early) as traders anticipate that the prior day’s candle was an overreaction. This seems to be taking shape in premarkets. However, whether this modest gap-up is a true reversal is a completely different question. Beware massive volatility as the fear factors, whether they be a government shutdown, US debt default (as JPM CEO Dimon started to warn yesterday), the Delta variant, or just markets in need of a correction after such a long time without one all remain in place.

Remember you don’t have to trade every day. Cash is a perfectly valid position. Nobody has ever consistently predicted reversals. So, don’t think you can either. Consider waiting if you want to be long and stay nimble if you trade short as bear moves end faster than bull moves. Focus on the process and on managing the things you can control. It’s discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

Swing Trade Ideas for your consideration and watchlist: MMAT, FLR, WRK, PLUG, TSN, DOG, SPXU, SQQQ, UVXY. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education • Subscription Plans • Private 2-Hour Coaching

Energy Crisis and Powell Testimony Lead

September 28, 2021 by Ed Carter

Markets gapped down again Monday but rallied again to test the 50sma resistance in all 3 major averages. Unfortunately for bulls, all 3 indices failed that test. This left us with Doji candles in the SPY and QQQ as well as a Shooting Star type candle in the DIA. On the day, SPY lost 0.29%, DIA gained 0.21%, and QQQ lost 0.80%. The VXX rose just a tad to 24.82 and T2122 remains in the mid-range at 69.67. 10-year bond yields spiked up to 1.491% and Oil (WTI) rose to $75.40/barrel.

During the day, two members of the FOMC announced their own early retirement. Boston Fed President Rosengren claimed his premature departure was due to a kidney illness, but Dallas Fed President Kaplan came out and acknowledged the trading disclosure issue. Those two were the Fed members recently identified as having owned millions of dollars of stock in companies which the Fed then purchased bonds. These announcements also came a day before Fed Chair Powell testifies before the Senate. In other Fed news, 3 FOMC members said they are ready to pull back on stimulus, but that they don’t feel any pressure from inflation. Fed members Brainard, Williams, and Evans all said they expect to see inflation lessening in 2022, but also feel comfortable removing stimulus now if the economy continues its current trajectory. This is another signal of the likely announcement of tapering of bond buying at the October Fed meeting. However, all 3 also stressed that their desire to begin tapering now in no way signals a change in the interest rate policy.

The global energy crisis continues and has caused Oil to spike as Brent prices soared above $80 on supply concerns. Part of the cause is supply disruptions in the US resulting from hurricanes Ida and Nicholas that shut down production in the Gulf of Mexico and destroyed rig, refinery, and pipeline infrastructure. In addition, in Africa, Nigeria and Angola have struggled to achieve their OPEC allotted production quotas due to mismanagement and underinvestment. In China, the problem is on the demand side as their government has implemented painful electric usage limits in order to meet climate emissions goals. This could be the backdrop for Elon Musk’s recent praise of the Chinese government. Bloomberg reports AAPL phone manufacturing plants are being given special treatment under the new restrictions because AAPL has “played ball” with Chinese officials. It could be that Musk is simply trying to curry special treatment for TSLA’s Chinese plants as well.

Last night F and South Korean firm SK Innovations announced a joint project that includes $11.4 billion in investment to build electric vehicles and batteries. This is the largest investment in production plants in F history. The project calls for 4 plants in the states of KY and TN, which should result in 11,000 new jobs.

Overnight, Asian markets leaned heavily to the red. Australia (-1.47%), South Korea (-1.14%), and Taiwan (-0.76%) led the way lower. Hong Kong (+1.20%), Malaysia (+0.90%), and Shanghai (+0.54%) were the only green in the region. In Europe, markets are also showing red across the board with the lone exception of Russia (+0.44%) who is green on the strength of being a major oil producer. The FTSE (-0.51%), DAX (-1.34%), and CAC (-1.74%) are leading the continent lower as of mid-day. The German fall could be partially due to smaller parties (Greens and FDP) being the coalition “king maker” for the next ruling party after a tight election Sunday. As of 7:30 am, US Futures are pointing toward a significant gap lower. The DIA is implying a -0.43% open, the SPY implying a -0.95% open, and the QQQ implying a -1.73% open. This comes as the Dollar has popped higher and 10-year bond yields are soaring to 1.537% in early trading.

The major economic news scheduled for release on Tuesday includes August Trade Balance and August Retail Inventories (both at 8:30 am), Conf. Board Consumer Confidence (10 am), Fed Chair Powell testifies (10 am), and two other FOMC speakers (Bowman at 1:40 pm and Bostic at 3 pm). The major earnings reports scheduled for Tuesday include FERG, INFO, SNX, THO, and UNFI before the open. Then after the close, CALM and MU report.

The week started with indecision and failure at resistance. It appears the bears are trying to follow through this morning. Beware of more volatility, especially in the QQQ names, as traders flee from the tech-led recovery trade. Also, remember we are just days from the month and Q3 end. So, the potential for rotation and window-dressing comes into effect. Lastly, Fed Chair Powell testifies before the Senate today and other Fed speakers have their say in public. These words may well stir markets.

Don’t worry about the things you can’t control. Manage your existing trades before you chase any new ones. Focus on the process and on managing the things you can control. Remember that it’s discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

🎯 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