Morning Star Archives - Page 113 of 141

Bulls Seem Ready to Run Again

January 22, 2020 by Ed Carter

Markets held their ground Tuesday, off the absolute highs but not falling far. The SPY closed down 0.20%, the DIA down 0.49%, and the QQQ down only 0.04%. T2122 has fallen back to the mid-range at 57.57 and the VXX gained only a fraction to close at a still historically-low 13.43.

On the news front, the CDC confirmed the first case of coronavirus had made its way from China to the US in the short time it has even had a name (about a week). In other news, BA took another beating as it said it does not expect regulators to allow the 737 Max to fly again until at least mid-2020. Finally, the impeachment trial began with wrangling over trial rules. It seems the Republicans are still leaning toward just a summary presentation of House findings and then a vote to acquit. They blocked a Democrat call to subpoena documents the White House refused to give the House and both sides are arguing over witnesses.

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The interesting news out of Davos was almost all made by President Trump, as is his want. While the need to adapt to Climate Change and the need to work together globally was the theme (and near-universal opinion of attendees), President Trump remains vocally opposed on both counts. Once again, he pooh-poohed climate change as not proven and unneeded drag on the economy. He also urged all countries to employ trade policies that are in their own countries’ internal best interests. He also attacked the Fed again (saying the economy would be at a 4% growth rate except for the Fed dragging it down). And Finally, he announced an attempt to reform the WTO (which he neutered last year by removing a quorum among the Trade Dispute Judges).

Wednesday’s major economic news is limited to Dec. Home Sales (10 am). However, there will be a number of earnings reports, with APH, GD, JNJ, NSC, NTRS, TEL, and TXT all reporting before the open. After the close ASML, CCI, DFS, FFIV, KMI, RFJ, SLG, and VAR report.

Overnight, Asian markets were green across the board. In Europe, markets are mixed, but mostly higher at this point in the day. As of 7:45 am, once again U.S. futures are pointing to a hefty gap higher of between four-tenths and a two-thirds of a percent.

It appears the bulls are back for more this morning. The generally good earnings and lack of major bearish news seems to have them ready for another leg up this morning. Just remember that we are still extended. For example, the Put-Call Ratio is at it’s lowest mark in years. So, caution is warranted, but don’t fight the trend. Look for long opportunities near support but don’t chase. Keep taking profits on a regular basis, moving your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideratoin and watchlist: LW, GRMN, EYE, OSTK, TUP, VG, URI, MHK, MGM, MYL, MU. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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Extension Caution or Impeachment Fear?

January 21, 2020 by Ed Carter

The bulls refused to back off on Friday. Once again all three major indices gapped higher. It was an indecisive day after the gap, but still, the SPY gained 0.37%, the DIA gained 0.12% and the QQQ gained 0.49%. All three closes were at the all-time high. The VXX remains historically low at 13.32 and the T2122 remains in overbought territory but did back off slightly to 82.99.

In economic news Friday, the Treasury Department had to bring back the 20year bond (last issued in 1986) to help cover the ballooning budget deficit costs. This had the short-term effect of steepening the yield curve. In addition, Bloomberg reported that Larry Kudlow reports that the Trump Administration will seek to scrap a 1977 law that prohibits US companies from bribing foreign governments. This issue was reported to have been a point of contention between the President and his previous Secretary of State.

Among stocks, BA took a hit when a new software problem for the 737 Max was announced. In addition, JBHT took a major hit on their earnings miss.

There is no major economic news Tuesday following the holiday, but the President is in Davos and is telling other countries to follow his protectionist path of “Insert Country Here First” approach. That itself is a first, coming from the leader of the country that led the free-trade and global market movements. In non-economic news, the Presidential impeachment trial begins today. In the market, there will be a number of earnings reports. Among those reporting before the open are CMA, HAL, HBI, NUE, PGR, and ROL. After Tuesday’s close IBM, ITW, NFLX, UAL, and VFC will report.

Overnight, Asian markets were strongly red across the board. In Europe, the same is true red across the board. As of 7:45 am, U.S. futures are pointing to third or a percent gap lower.

The bulls have been relentless for a long time. The long weekend, amount of extension and upcoming impeachment trial may have changed the tune to one that is a little more cautious. However, the trend is still the trend (until it is broken), so don’t overreact. Look for long opportunities near support but don’t chase. Keep taking profits on a regular basis, moving your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideratoin and watchlist: ANGI, LOW, WYND, ENPH, LW, MU, M, TUP, SNDL, YNDX. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bulls Run, But 3-day Weekend Ahead

January 17, 2020 by Ed Carter

The bulls gapped markets higher perhaps on a huge earnings beat by MS. Regardless of the reason, after that gap markets traded sideways in a tight range until late afternoon. Sometime after 3pm the bulls took over again and drove prices higher right into the close. The SPY closed up 0.81%, the DIA up 0.89%, and the QQQ up 0.96%. As you’d expect, the VXX fell 2.42% again to 13.29. T2122 jumped higher well into overbought territory at 93.97.

Among the market news for the day was Bloomberg report a panel that seems to contradict the reports from Wednesday’s signing coverage of Phase One of the China Trade Deal. The consensus from the Chief Economists from all the major US banks is that the trade deal would not have a strong impact on the US economy, at least in 2020. They’ve concluded that growth will slow to 1.8%-1.9% this year (well below the 2.5% touted during the signing ceremony and in the Administration’s post-signing interviews Wed.). Time will tell, but economists seem skeptical.

On the cheerier side, DataTrek Research reported that US pickup truck sales (an indicator of small business activity) ended 2019 on a high note. Those sales ended the year 2.3% higher than in 2018. The other news was that GOOG has now joined AAPL and MSFT in the “More Than $1 Trillion Market Cap” club. The Fed keeps saying their mass Repo purchases are not stimulus, but the market sure keeps treating them that way.

Friday’s major economic news includes Dec. Building Permits and Dec. Housing Starts (both at 8:30 am), Dec. Industrial Production (9:15 am), JOLTS and Univ. of Michigan Consumer Sentiment (both at 10 am) and a few Fed speakers throughout the day. Major earnings before the open include CFG, FAST, KSU, MTB, RF, SLB, and STT. There were also CNBC reports that BA will need to take another massive charge related to their 737 Max debacle. So watch that one for gapping as well.

Overnight, Asian markets were green across the board. In Europe, the same is true as the rest of the world follows our lead from Thursday. As of 7:45 am, once again U.S. futures are pointing to a gap higher of between a quarter and a third of a percent.

The bulls continue their incredible run with new all-time highs seeming to come daily. Over-extension, earnings and headline risk over a 3-day weekend are all very real issues at this point. However, markets can remain overbought longer than bears can hold out while being too early. So, consider caution and/or hedges on Friday, but don’t bet against the trend. Look for long opportunities near support but don’t chase. Keep taking profits on a regular basis, moving your stops to protect yourself, and wait for the trade to come to you.

Sorry, but no Swing Trade Ideas on a Friday before a 3-day weekend. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bulls Still in Control

January 16, 2020 by Ed Carter

On a bullish day, some afternoon volatility left the SPY (up 0.20%) and DIA (up 0.39%) closing at all-time highs. The QQQ had a more indecisive day closing up 0.04%. The VXX closed down again at 13.62, while the T2122 stepped back just below overbought to 75.07. It seemed that markets generally took the second day of earnings and the Phase-One Trade Deal with China in stride.

Speaking of the trade deal, details released Wed. point to China apparently committing to purchase an additional $200bil of good/services over the next two years, meaning roughly an additional $100bil in 2020. That would be a massive increase over the past where the 2017 base against these gains was about $130bil/yr. total exports to China. China also pledged to crack down on intellectual property theft.

Time will tell if these materialize, or how this shakes out globally (purchases from the US, mean less from elsewhere and both have ripple effects), but it certainly appears to be a big win for the US on a headline level. Of course, on the downside, tariffs on Chinese goods will remain in place for at least another 10 months before review again.

Beyond follow-up on trade deal details, earnings are now front and center for markets. Already this morning, MS posted a massive beat and had pre-markets soaring.

Thursday’s major economic news includes Dec. Retail Sales, Philly Fed Mfg. Index, and new Jobless Claims (all at 8:30 am), Business Inventories (10 am) as well as another Fed speaker. Beyond MS, other major earnings reports include BK, BLK, CSX, KMI, SWKS, SYF, and TFC.

Overnight, Asian markets were mixed but mostly green. In Europe, markets are also mixed, but mostly red, especially the FTSE, DAX, and CAC, so far in their day. As of 7:30 am, once again U.S. futures are pointing to an open higher of between one-tenth and one-third of a percent at this point.

Despite some push-back by the bears, the bulls maintained control on signing day for Phase-One of a China Trade deal. This leaves at or very near of all-time highs across all major indices. Over-extension and earnings remain the obvious risks. However, the moves, while relentless, are not over-exuberant. So, continue to trade with the trend, while employing some caution. Always look for opportunities, but don’t chase. Most importantly, remember to plan your trades, and trade your plans. Take profits on a very regular basis, move your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: ANGI, BLDR, VRTX, OTEX, LDOS, ALLE, ANET, ZAYO, TRIP, AMCX, OSTK, LYFT. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about 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

Earnings and Deal Day Part 1

January 15, 2020 by Ed Carter

Markets had a somewhat volatile day that ended little changed. The SPY ended the day down 0.15%, the DIA up 0.07% and the QQQ down 0.39%. It seems that despite great beats by the big banks (C and JPM) and DAL in the pre-market, traders were leery of earnings season at the current market all-time highs. There was also a fear that the phase one of the China trade agreement may disappoint markets as details come front and center Wednesday during the signing.

The latter fear stemmed from Bloomberg reports that the existing tariffs are remaining in place and all provisions of the deal are already known by the public. CNBC also reported that both sides understand that the US will not review the existing tariffs any sooner than 10 months after the phase one signing (i.e. after the election). In addition, there is no agreed path toward eventual reduction of existing tariffs or even for new “phase two” talks. So, the economic drag of the trade war on both economies is here for at least another year. (Side note: Reports say the existing tariffs are costing the average American $800/year although details were not provided.)

In more cheery news, Amazon has lifted the prohibition on its Marketplace sellers using FedEx ground transport. In addition, retail sales are coming in at 5% greater than 2018…which may read through to expectations of upcoming earnings reports.

Wednesday’s major economic news includes Dec. Core PPI and Jan. NY Empire Mfg. Index (both at 8:30 am), Oil Inventories (10:30 am) as well as two more Fed speakers. Earnings reports before the open include BAC, GS, PNC, USB, CSX, TGT, and UNH. (GS beat and TGT missed so far this morning.)

Overnight, Asian markets were red across the board. In Europe, markets are mixed, but mostly red so far in their day. As of 7:30 am, once again U.S. futures are pointing to a flat open, just on either side of break-even at this point.

Even on a rest day, the bulls have maintained control of the trend and we are within spitting distance of new highs. However, over-extension and disappointment (over earnings or the partial trade deal) risks remain real. Continue to use caution while still trading with the trend. Look for opportunities, but don’t chase. Most importantly, remember to plan your trades, and trade your plans. Take profits on a very regular basis, move your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: PCG, NKE, BMRN, MPLX, NXPI, DAR, HZNP, RS, OSTK, BLUE, CNQ. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about 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

Banks Kick-Off Earnings Again

January 14, 2020 by Ed Carter

Once again, the markets gapped higher on Monday. There was also follow-through as news came that the US is removing China from the “Currency Manipulators” list and this helped the bulls continue to run all day. At the end of the day SPY was up 0.69% and QQQ up 1.16%, while the DIA was up only 0.27% (held down by UNH). As you’d expect, the VXX fell to the extremely low value of 13.78 while T2122 climbed back just barely into the overbought region at 81.71.

In addition to the China news, two other stories made news on financial outlets Monday. The first of these was that the US Budget Deficit topped $1 trillion in 2019. This was a 17% increase from 2018 and led the National Debt to climb to $23.2 trillion. The second story was that the Impeachment trial of President Trump is likely to start Tuesday, January 21.

However, today (the current Tuesday) another earnings season kicks off as the big banks report before the open today. As this process starts, FactSet is reporting that earnings are expected to have fallen 2% in the fourth quarter. This would be the fourth straight quarter of reduced earnings. Still, as always, the companies have sand-bagged their numbers by guiding down forecasts during last quarter’s reports. So, it’s anyone’s guess as to whether Mr. Market “goes with the flow” or “registers protest over the trend.”

Tuesday’s major economic news includes Dec. Core CPI (8:30 am) and Dec. Federal Budget Balance (2 pm) as well as another Fed speaker. As mentioned above, C, JPM, WFC, DAL, and INFO all report before the open.

Overnight, Asian markets were mixed. Europe is mixed but mostly red so far in their day. As of 7:30 am, U.S. futures are pointing to a flat open, just on either side of break-even at this point.

Markets remain at their all-time highs, with the bulls in control of the trend. However, over-extension remains a risk and earnings kick-off again today. So, continue to use some caution while trading with the trend. Look for opportunities, but don’t chase. Most importantly, remember to plan your trades, and trade your plans. Take profits on a very regular basis, move your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: LHX, DAR, AMD, VRNT, INTC, MYL, UMPQ, KSU, TEL, AMCX, GRUB, BURL. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about 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

New Week – New Highs?

January 13, 2020 by Ed Carter

Markets gapped higher again Friday. However, they sold off steadily the remainder of the day (perhaps to avoid weekend headline risk). While we closed up off the lows (and frankly still very near all-time highs), the SPY lost 0.29%, the DIA lost 0.46% and the QQQ lost 0.26%. All three of the major indices printed Bearish Engulfing signals but did not fall back into the recent trading range that we broke out of Thursday. Interestingly, the VXX fell again as well, to 14.12. The T2122 also fell but remains in the mid-range at 44.62.

In a follow-up to last week’s main story, Iranians (mostly students) are protesting their own government after Iran publicly accepted the blame for shooting down the Ukrainian Passenger Jet. Those protests turned violent overnight. President Trump made statements in support of the protesters and veiled threats against Iran cracking down on the protests. He also threatened Iraq, saying they would lose their account at the New York Fed Bank if US troops are forced to leave Iraq. (That account is used for processing Iraqi oil sales and to pay their government salaries and contracts.)

This coming week we will see the signing of Phase One of the China trade deal Wednesday (only Vice Premier Li will attend from China, so President Trump may not take that victory lap yet). The impeachment “trial” is also likely to start, if not finish this week.

There is no major economic data or earnings reports on Monday. We’ll also see some more economic data starting Tuesday. Finally, earnings season kicks back into gear again Tuesday with the big banks reporting.

Overnight, Asian markets were mixed, but mostly in all the green. Europe is even more mixed with a split between red and green on their boards so far today. As of 7:45 am, U.S. futures are pointing to a quarter to a third of a percent gap higher at this point.

Overall, markets remain at unprecedented heights and the bulls still control the trend. However, over-extension remains a risk and we are just a day from truly starting a new earnings season. So, all we can do is trade with the trend, look for opportunities, and use hedges. Most importantly, remember to plan your trades, and trade your plans. (Don’t let emotions jerk you around.) Take profits along the way, move your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: ZS, ETSY, GRUB, PFE, BMRN, LHX, NIO, FTCH, ANGI, CGC. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bulls Keep On Running

January 10, 2020 by Ed Carter

The bulls followed up on Wednesday’s rally with a gap up on Thursday. However, the rest of the day was indecisive. Still, the SPY (+0.66%), DIA (+0.75%), and QQQ (+0.85%) each closed at a new all-time high close. Among the drivers of the move was more relief from de-escalation of the US-Iran conflict and big moves by tech heavyweights AAPL (+2.1%) and AMD (+2.4%). The VXX fell again to 14.19 and market breadth remains in the mid-range with the T2122 sitting at 66.67.

An important, under-reported story Wed. was significant changes the Trump Administration unveiled to the Environmental Protection Act. If enacted, these may have significant economic (and/or other) impact. The first change is that there would no longer be any Federal review of construction projects that do not involve substantial federal funding. Second, it would be much easier for all Federal agencies to approve infrastructure projects without studying or considering environmental or wildlife (endangered species) impacts. While this technically covers a wide range of construction, the most impacted types would be road, bridge, tunnel, pipelines and telecom construction (including cell tower and 5G build-out). There will be a 60-day comment period on the new policy proposals before they are made law by the administration. So, expect a political fight on this one.

Economic data continues to be strong as Weekly Jobless Claims again came in under expectation yesterday. (214,000 versus 220,000 expected.) However, the big news story of the day was not economic, but instead the crash (shootdown?) of the Ukrainian 737 in Tehran.

Overnight, Asian markets were in all the green. We also see green across the board in European markets so far. As of 7:45 am, U.S. futures are pointing to a quarter to half a percent gap up again at this point.

Friday’s major economic news includes Dec. Average Hourly Earnings, Dec. Non-farm Payrolls, and Dec. Unemployment Rate (all at 8:30 am). There are no earnings reports on the day.

Once again, it appears the only thing the bulls fear is over-extension. They’ve only wanted to hear good news for a long time now. However, while very bullish “in the now,” this is also a risk factor, because it’s the unexpected shock that really moves markets dramatically. So, all we can do is continue to be cautious, use hedges and follow the trend. As always, you know my mantra, keep planning your trades, and trading your plans. Taking profits along the way, move your stops to protect yourself, and wait for the trade to come to you.

Sorry, but no Swing Trade Ideas for your consideration and watchlist on Friday (Pay Day). Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about 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

A Measured Response – No, Really It’s True

January 9, 2020 by Ed Carter

After a massive overnight recovery from the fear generated by Iranian retaliatory rocket attacks, markets rallied early Wednesday. However, there was also a selloff when it was announced that President Trump would address the nation late morning. Completely unexpectedly, the President adopted a relatively de-escalatory tone. Markets rallied hard the rest of the morning on that surprisingly measured and responsible stance.

However, after lunch, markets chopped sideways the rest of the day. The day ended off the highs, but the SPY gained 0.52%, the DIA gained 0.58% and the QQQ (which did close at a new all-time high close) gained 0.75%. As you’d expect, the VXX was down again to a very low 14.80. While this was a great day for bulls, there are still some concerns about this situation that should be kept in mind.

Remember, in addition to claiming victory, the President did add more new sanctions and did threaten Iran again. Second, Iran has not truly backed down and their replacement for the killed General Soleimani is essentially a clone, with the same geopolitical outlook, resources and international networks in place. Third, after the President’s recent new deployments, the US has 60,000 troops in the Gulf. This makes for a lot of chances on both sides for mistakes, rogue actions or local events to spiral larger. Then, of course, we also have the fact that President Trump isn’t known for consistency, especially when it comes to being consistent with positions contrary to his own previous threats or bluster.

Finally, President Trump said he’d ask NATO to both: 1) pull out of the 2015 JCPOA deal (which he already pulled the US out of) and 2) get involved in military deterrence of Iran in the Persian Gulf. However, as late as Tuesday both Germany and France had made statements in support of keeping the deal alive and on Wednesday (prior to Trump’s address) the UK’s PM told UK Parliament that the 2015 deal was the best and only way to create lasting peace in the middle east without a nuclear Iran. So, NATO support of the President’s request or position seems quite unlikely.

The point is, while the situation seems better than was expected and all is well now, we are not out of the woods on this story yet. More importantly, the ease at which the market has brushed off potential negatives such as the threat of war should give us pause…a reason to be cautious.

Thursday’s major economic news is limited to Weekly Jobless Claims (8:30 am) and three Fed speakers over the course of the morning. There are no earnings reports on the day.

Overnight, Asian markets were in the green on hopes of middle-east de-escalation. In Europe, markets are mostly green on the perceived ramp down in tensions. As of 7:45 am, U.S. futures are pointing to a significant gap higher of between 0.4% and 0.6% across the major indices.

Once again, with any path to de-escalation open, it’s hard to bet against the bulls. They’ve only wanted to hear good news for a long time now. However, this is also a risk factor, because it is things Mr. Market doesn’t expect that causes big shocks. So, all we can do is continue to be nimble, use hedges and/or limit exposure. As always, you know my mantra, keep planning your trades, and trading your plans. Taking profits along the way, move your stops to protect yourself, and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: INXN, NFLX, CL, LPX, CNC, BIDU, IGT, ZS, MIC, ULTA. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about are not recommendations to buy or sell.

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🎯 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

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

A Path To De-Escalation?

January 8, 2020 by Ed Carter

A pause took hold Tuesday as markets gapped a bit lower at the open and then indecisive trading reigned the rest of the day. At day end, the SPY was down 0.28%, DIA down 0.43%, and the QQQ was flat at -0.01%. T2122 fell back into its mid-range at 58.16 and even the VXX fell slightly to 15.01.

However, more important than the Tuesday session was the overnight story of the Iranian response to the US assassination of Iran’s top General. Iranian state television report that they had fired tens of rockets/missiles at least two US bases in Iraq. This response came hours after the funeral for that Iranian General, where 50 people were killed by a stampede among the hundreds of thousands of mourners chanting for revenge.

Dow Jones Industrial Average Futures immediately fell over 400 points (1.5%), Oil prices spiked 4%, and Gold rose 2.1% upon news of the Iranian attack. However, this seems to have been a very measured Iranian response, intended to open the door to de-escalation. The reason I say this is that these rockets were fired at very large, sprawling bases that had already been under local rocket attacks. The attacks were also forewarned, allowing the US to prepare. Therefore, US casualties were less likely…and that is what happened, no US casualties.

Taking that cue, so far President Trump has backed away from his threats, made no speech to the Nation and has not retaliated. Perhaps as a result of this “de-escalation so far,” markets have fully recovered overnight. While this story will likely continue to drive news and keep unfolding, for now, US markets have stabilized.

Wednesday’s major economic news is limited to Dec. ADP Nonfarm Payroll (8:15 am) and Crude Oil Inventories (10:30 am). However, earnings season is starting again with reports from STZ, LEN and WBA before the open.

Overnight, Asian markets were in the red on the aftermath of the Iranian strike. In Europe, markets are mixed, but mostly green on the perceived limited response from Iran. As of 8:00 am, U.S. futures are pointing to flat to slightly higher open.

With a path to de-escalation open, it’s hard to bet against the bulls again. For months they have seen the good in every event and ignored the bad. However, anything can happen short-term. So, all we can do is be nimble and/or use hedges or reduce exposure. As was pointed out in last night’s e-learning session, even stops can’t protect you from gaps. However, when you do trade, keep planning your trades, and trading your plans. As always, keep taking profits along the way, move your stops to protect yourself and wait for the trade to come to you.

Swing Trade Ideas for your consideration and watchlist: BYND, TWTR, FTCH, ETSY, ANET, BIDU, T, ACHC, GE. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. The stocks/etfs we mention and talk about are not recommendations to buy or sell.

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