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Virus Spread Draws Market Focus

June 25, 2020 by Ed Carter

The bears roared on Wednesday with virus resurgence fears leading to large Evening Star type patterns after the day’s big black candles. A 0.70% gap down led to a strong selloff that lasted all morning. The afternoon saw a choppy sideways grind the rest of the day. For the day SPY lost 2.51%, DIA lost 2.63%, and even QQQ lost 2.06% after the big tech names finally gave up about 10:30am. If there was any good news for the bulls, it was that all 3 major indices closed up off the lows. However, that isn’t much. The VXX rose to 36.72 and T2122 fell dramatically to 2.37 (far into oversold territory). The 10-year bond yield fell slightly to 0.679% and Oil (WTI) fell almost 6% to $38.01/barrel.

During the day, perhaps in an attempt to buoy markets, it was reported that the Fed had agreed to loan $2.3 Trillion, but so far had only loaned $143 Billion. So, at least in theory, the Fed has 94% of its powder dry on the loan front. In other Washington news, for the second time this week Treasury Sec. Mnuchin told a reporter he may consider extending the 2019 Income Tax filing deadline. This time the potential extension would be to September 15 (from the current deadline of July 15). However, as in the Monday interview, he said “as of now, we’re not intending to do it…but we may consider it.”

However, by far the biggest story on the day was the resurgence of the virus. The global headline numbers are 9,555,804 confirmed cases and 485,573 deaths. The WHO said that the peak has not yet been reached in the Americas with more than a million new cases in the last week. However, Europe (with the exception of Germany) continues its easing and reopening. For example, many tourist attractions opened across France today.

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In the US, we now have had 2,462,713 confirmed cases and 124,282 deaths. The count made Wednesday as the worst number of cases we have seen so far, with 45,557 new confirmed cases in the country. CA (7,149), FL (5,511), TX (5,489) were the worst-hit states, but there were 26 states seeing an increase in new cases on the day and 30 that saw at least a 5% increase in their 7-day average of new cases, while 4 more states with an average rising less than 5%. There was also a rise in virus hospitalizations across 14 states. In related news, the early epicenters (NY, NJ, CT) have now imposed a 14-day quarantine on travelers coming from states with the highest infection rates (AL, AR, AZ, FL, NC, SC, TX, UT, WA).

Overnight, Asian markets were mostly significantly red. However, China stayed just on the green side of flat and Taiwan gained 0.42%. In Europe, markets are mixed so far with Germany and France green, while the UK is in the red. There is a similar mix across the smaller markets. As of 7:30 am, US futures are leaning toward the red side with large-caps pointing toward a gap lower of about 0.4% and the NASDAQ just on the red side of flat.

The major economic news for Thursday includes May Durable Goods, Q1 GDP, May Retail Inventories, May Trade Balance, and Initial Jobless Claims (all at 8:30 am). There are also 3 Fed speakers Kaplan (9:30 am), Bostic (11 am), and Mester (12 pm). Major earning s reports for the day include ACN, DRI, MKC, RAD, and WOR before the open. After the close, NKE and SNX report.

It’s early, but it looks like markets are continuing to fear the virus more than they expect a V-shaped recovery. Remember this is not par for the course as the Bulls have ignored the virus and all bad news for some time. So, a reversal of mood could happen a the drop of a hat. Also, keep in mind that economic news may carry a bigger stick in this environment. Finally, we have Quarter-end rebalancing coming. So, it is possible that fund profit-takers and rebalancers cause a rotation. Keep watching the short-term chart and be ready for the whipsaw that has been the norm. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

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.

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

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

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Fear of Virus Resurgence in the Markets

June 24, 2020 by Ed Carter

Markets gapped up just under a percent on Tuesday and then proceeded to chop sideways until reaching the highs at 2pm. From there we saw a steady selloff into the close. For the day, SPY was up 0.44%, DIA up 0.45%, and QQQ up 0.85%. However, none of the index candles looked particularly bullish at the close. The large-caps both had black bodies and the QQQ put in a Shooting Star type candle. VXX was down again to 34.45 and T2122 fell back to mid-range at 55.32. The 10-year bond yield rose slightly to 0.713% and Oil (WTI) fell to $40.24/barrel. However, the story of the day was that AAPL and AMZN (and FB to a lesser extent) held markets up, particularly the QQQ by themselves for most of the day. All 3 companies printed record-high closes on the day.

During the day, President Trump told reporters Tuesday that he is open to more stimulus, specifically more checks for individuals. Treasury Sec. Mnuchin also said he hoped Congress would pass such a plan by the end of July. Senate Republicans have opposed such plans to this point. However, the Administration backing may change their political calculus on this issue.

On the Virus front, the global headline numbers are 9,381,389 confirmed cases and 480,401 deaths. The German meat-packing plant outbreak has expanded past 1,500 cases and another such plant has found 23 cases so far. The government has been quick to lockdown a second district of the country. However, the UK is headed the other direction, announcing broad reopening and even a reduction of social-distancing distance to 1 meter to help restaurants and pubs increase capacity, all to begin July 4. Ironically, the EU is now debating a measure to ban travelers from the US even as its countries open more. They are citing the haphazard rules and response in the US as the cause for concern. In Asia, Tokyo’s Governor said they found a new workplace cluster and are now expecting “quite a large number” of new cases as test results come back.

In the US, we now have had 2,424,493 confirmed cases and 123,476 deaths. 25 of the states saw an increase in the rate of new cases with a national total of 35,600 new cases on the day. CA, TX, FL, and AZ all saw a record number of new cases. TX Gov. Abbott told state residents “the safest place for you is at home.” Meanwhile, FL saw more areas make masks mandatory. However, it is worth noting that even though both the R-naught (spread rate) and hospitalizations are rising in lock-step with new cases, the national daily death rate trend (which lags) continues to fall. So, as mentioned, reopening continues with examples like NY, which has reopened its beaches ahead of the July 4 holiday.

Overnight, Asian markets were mixed and generally closer to flat. The exceptions were South Korea with a 1.42% gain, New Zealand with a 1.15% gain, and India with a 1.58% loss. In Europe, we see red across the board as virus resurgence has sparked fear. The big 3 bourses (CAC, DAX, and FTSE) are all down about 2% so far today. As of 7:30 am, US futures are pointing to a gap lower of about 0.8% in the large-caps and 0.4% in the QQQ.

The only major economic news for Wednesday is Crude Oil Inventories (10:30 am) and an FOMC Speaker (Bullard at 3 pm). It might be worth noting that Bullard is an opponent of the idea (reported under strong consideration) of the Fed pinning bond interest rates by buying/selling whatever it takes to keep rates at a target. The only major earnings reports on the day are PDCO and WGO before the open and FUL and KBH after the close.

It’s early, but it looks like markets (at least the large-caps) are having trouble getting through resistance at recent highs. This morning we look to be following Europe on the daily gap open. With no major news scheduled today and Quarter-end rebalancing coming, we may see the bears push a little on the drift. Watch the short-term chart and be ready for the whipsaw that has been the norm. 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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After Scare Bulls Look to Rally

June 23, 2020 by Ed Carter

Monday was a blah summer day as markets shook off a small gap-down and trended to the bullish side in a volatile fashion, but in a smaller range, all day. The result gave us a white candle in the short-term downtrend, but no major change in sentiment. On the day SPY closed up 0.66%, DIA up 0.57%, and QQQ up 1.02% as AAPL, MSFT, AMZN, and GOOG led the market. VXX fell to 35.09, the 10-year bond rose very slightly to 0.704%, and Oil (WTI) rose 2% to close at $40.60/barrel.

After hours SoftBank announced it will sell 65% of its stake in TMUS, which represents 198 million shares. TMUS said it would offer 134 million of those shares to the public and give 10 million additional shares to the underwriters of that IPO. That will represent an over 10% dilution of current outstanding shares.

White House Trade Advisor Navarro scared global markets (including US Futures) overnight when he told Fox News that “the China deal is over” (implying the trade deal was dead). However, both he and President Trump walked back the statement to say the deal is fully intact. Navarro’s clarification said the original statement was just supposed to indicate the White House does not trust the Chinese. Markets recovered after the denials and clarification.

Also overnight, the President signed an executive order to freeze H1-B (tech workers), H2-B (low-skill workers), H-4 (worker spouse), L (intracompany transfer), and J (exchange worker/student) visas through the end of the year. The move is aimed at forcing jobs to go to US workers and will prevent 525,000 jobs from going to non-nationals. However, an administration source told CNBC that they actually expect only about 50,000 of those jobs to actually be filled by Americans. The US Chamber of Commerce and major tech companies oppose the rule and have said the move will stifle economic recovery.

On the Virus front, the global headline numbers are 9,215,127 confirmed cases and 474,955 deaths. The WTO said world trade dropped by 18.5% in the second quarter as a result of virus-control measures. In Germany, a district has been locked back down related to the meatpacking plant outbreak as officials attack the problem in a stereotypical organized, and efficient manner. South Korea is also scrambling to clamp down on a second wave of outbreaks. On the opposite side of response, Brazil saw over 21,000 new confirmed cases Monday with a very spotty or non-existent government reaction.

In the US, we now have had 2,388,225 confirmed cases and 122,611 deaths. 12 states reported record high new cases among the 23 with rising rates. TX Governor Abbott told a presser that “additional tough measures are going to be necessary” if cases and hospitalizations continue to climb at current rates. LA said it will push back phase 3 of its reopening, originally scheduled for this week. Meanwhile, the CDC says it has developed a single test for both the coronavirus and the flu. When it is approved from the FDA, this single test will help ease testing infrastructure burden in the fall.

Overnight, Asian markets suffered the jolt of Navarro’s statements but ended mostly in the green. However, gains were uneven with most barely above flat while Hong Kong and India both gained over 1.5%. Malaysia, Indonesia, and New Zealand were the only red on the day. In Europe, we see green across the board (and much stronger green to boot). The DAX is up 2.69%, CAC up 1.66%, and FTSE up 1.26% so far today. As of 7:30 am, US futures are pointing to a gap higher, but they remain volatile and mixed. SPY is looks at +1.33%, DIA at +0.80%, and QQQ at +0.58%. However, as mentioned, these numbers are very volatile as traders wake up and absorb overnight news.

The major economic news for Tuesday includes June Mfg. PMI and June Service PMI (both at 9:45 am), and May New Home Sales (10 am). However, the only major earnings report on the day is INFO before the open.

It’s still early, but it is looking like markets want to rebound this morning, focused on recovery, and not the recent case increases. Be aware of that post-open data that may move markets. Keep your eyes on the short-term chart in front of you, because whipsaw 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).

There are no Trade Ideas for Friday. However, also be aware that the normal distribution of trade ideas has been moved to the trading room and the Members-Only Phone App in the future anyway. 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

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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US Case Increase Scares World Markets

June 22, 2020 by Ed Carter

Markets saw a gap higher and then a volatile all-day selloff that may have been partially driven by quadruple witching on Friday. The result was a large Bearish Engulfing signal in both large-cap indices. The techs faired a bit better and none of the big 3 indices closed on the lows. On the day the SPY closed down 1.04%, DIA closed down 1.06%, and QQQ closed flat down 0.02%. The VXX was up a tad to 36.90 and the T2122 (4-week high-low ratio) fell strongly to 48.86 (mid-range). Oil (WTI) had been above $40 much of the day, but closed back at $39.57/barrel and the 10-year bond yield fell to 0.692%.

It is also worth noting that for the week the market was both volatile and bullish. Still, we do appear to be beginning a daily downtrend with a 6/8 high, 6/15 low, and a 6/16 lower-high. However, there is some potential support (including the 200sma in SPY) before we reach a new lower-low.

Over the weekend, Bloomberg reported that both the Fed and Bank of England are strongly considering following the examples of Japan and Australia. Specifically, they are looking at using bond-buying to pin interest rates (control the yield curve at every maturity). This would be Central Banks actually coming out and saying “we are the buyer of last resort…financial market prices will not be allowed to fall.” It would cap interest rates (hurt savers), devalue the currency (in turn increasing commodity prices), and theoretically cause a surge in borrowing/spending. The same move was scorned for 4 (years since Japan did it) and mocked for decades before that as a recipe for an economic bubble and collapse. However, regardless of opinions or actual merits of the policy, there is no doubt that it would be massively bullish for stock markets. Despite the reports, there has been no public or official word by either Central Bank.

In Virus news, the global headline numbers are 9,072,642 confirmed cases and 471,175 deaths. This includes a record of 180,000 new cases on Sunday. Germany, which has had its outbreak under control, has seen a major new outbreak at the country’s largest meat processing plant. The plant has found over 1,000 new cases among its 6,000 employees (and worse yet, had no address on file for one-third of the 6,000). This highlights the problems faced by meat processors like HRL, TSN, SAFM, and IBA. For example, China has halted imports of TSN meat products after a TSN plant outbreak in AR (693 cases). That said, the easing continues for the most part globally.

In the US, we now have had 2,356,715 confirmed cases and 122,249 deaths. 23 states had increasing rates on the week (10 of those had at least an increase of 50% over the number of new cases the prior week). This trend includes 2 straight days of the US reporting over 30,000 new cases (we had no reports over 29,000 since May 1^st before Friday). However, the President told his Saturday rally that he has asked for the testing to be slowed down (to avoid finding more cases). This all comes as trends are showing a shift to more cases being found in younger populations as a lack of mask or social distancing is becoming more and more common while reopening gains speed.

Overnight, Asian markets were mixed, but mostly red on news of the resurgence of cases in the US. However, the loses were not great and Shenzhen and India were the exceptions that managed to stay above break-even. In Europe, markets are following Asian with red across the board with the exceptions of Belgium, Greece, and Denmark which are just above flat so far today. US Futures were volatile overnight. At 7:30 am, those US futures are pointing to a 0.4% gap down in the DIA, a 0.3% gap down in the SPY, and a 0.2% gap down in the QQQ.

The major economic news for Monday is limited to May Existing Home Sales (10 am) and there are no major earnings reports on the day. It’s still early, but it is looking like markets want to continue the short-term downtrend on virus-impact fear. Keep your eyes on the short-term chart in front of you, because whipsaw 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

Quad-Witching And Fed Speakers on Tap

June 19, 2020 by Ed Carter

Thursday was another rollercoaster day for markets, but within a tight range compared to recent days. And just like a rollercoaster, after the ride, we ended up about where we started. The SPY gained 0.04%, the DIA fell 0.14%, and the QQQ gained 0.27%. The VXX fell just a bit to 36.31 and T2122 fell to 66.15. Oil (WTI) was unchanged and the 10-year bond yield fell to 0.707%.

Initial Jobless Claims came in higher than expected at 1.5 million. However, the market shrugged that off with only a slight gap down. HTZ also called off its controversial secondary offering after the SEC questioned an IPO by a bankrupt company.

On the Virus front, the global headline numbers are 8,607,857 confirmed cases and 456,943 deaths. A new study out of China (journal published Thursday) found that coronavirus antibodies may only last 2-3 months post-infection. However, this was a small study, based on only 37 people. Meanwhile, Brazil saw a 2.4% increase in cases and a 2.7% increase in deaths on Thursday and will cross the million case mark today. In the UK, they have dumped their own contact tracing App (only could identify 4% of iPhones in tests) and have gone with the GOOG/AAPL joint venture App (finds 99% of all phones) instead.

In the US, we now have 2,263,756 confirmed cases and 120,688 deaths reported to date. AZ, FL, CA, SC, and TX all saw record-high single day increases in cases on Thursday. FL saw a 3.9% increase in new cases while TX cases also jumped again by 3.6% along with a seventh straight day of record hospitalizations. Houston was hit particularly hard as its hospitalizations jumped 12% Thursday. Governors in FL and TX have so far tried to brush off the increases as nothing more than the result of more testing and groups of migrant workers. The data does not support those claims.

Overnight, Asian markets were mixed but mostly green. China was the leader and Singapore the only 1% loser. In Europe, the same is true with the big 3 (CAC, DAX, FTSE) all up over 1% at this point in the day. US Futures climbed overnight on reports China will increase its US Ag-product purchases to stay in-line with the trade deal. At 7:30 am, those US futures are pointing to a gap higher of 0.8%-1%.

The major economic news for Friday is limited to a number of FOMC speakers including Rosengren (10:15 am), Chair Powell (12 pm), and Mester (1 pm). Treasury yields did move higher overnight in front of those 3 speeches. However, Friday is also a Quadruple-Witching day and that may well move prices at day end. Major earnings reports are very limited with only JBL and KMX reporting before the open.

It is looking like the bulls want to make a push at week’s end. However, intraday swings are the norm. As mentioned, beware of pinning and other odd moves or volume related to quad-witching in the afternoon. Keep your eyes on the short-term chart in front of you and be prepared for the whipsaw. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go). Plan the trade and trade the plan. And remember that Friday is payday.

🎯 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 Rest in Front of Data

June 18, 2020 by Ed Carter

It was another rollercoaster Wednesday that ended on a pullback. Black-body candles were the norm, but the tech-heavy QQQ was notably more indecisive (wicky) than the others. For the day, SPY fell 0.42%, DIA fell 0.76%, and QQQ was up 0.32%. The VXX was flat at 36.98 and T2122 fell back out of the overbought territory to 77.08. The 10-year bond yield fell slightly to 0.728% while Oil (WTI) also dropped to $37.73/barrel.

During the day the SEC told HTZ they had concerns about the bankrupt company issuing another IPO. In response, HTZ suspended its planned $500 million secondary offering. Fed Chair Powell also told the House they will gradually move from buying bond ETFs to individual corporate bonds. He also urged Congress (and the Administration) not to pull back too early on relief for households and small businesses.

On the Virus front, the global headline numbers are 8,465,631 confirmed cases and 451,933 deaths. Reuters reported that China canceled domestic flights in/out of Beijing in further signs of the lockdown intended to stop the current outbreak, but only 21 more new cases were reported in the city. However, the worst impacts are in South America, where Chile tightened its lockdown on an increase in cases, Chile’s President went into preventative quarantine after staff infections and Brazil reported that new cases topped 31,000 again.

In the US, we now have 2,234,854 confirmed cases and 119,943 deaths reported to date. 10 states saw their highest number of new cases on Wednesday. These ten from among the 21 states that saw increases. TX was perhaps the worst of those, with a new case rate increase of 3.4% and a staggering one-day jump of 11% in virus hospitalizations. Yet in NY, NYC is on track to reopen many businesses on Monday.

Overnight, Asian markets were mixed again, but this time mostly red. China and Taiwan eked out a very small gain, but India had a 2% up day. In Europe, we are seeing red across the board with the lone exception of Portugal being just on the green side of flat at this point. At 7:30 am, US futures are pointing to a mildly lower open.

The major economic news for Thursday includes is limited to Initial Jobless Claims and Jun Philly Fed Mfg. Index (both at 8:30 am) and FOMC Member Mester speaks again (12:15 pm). However, CMC, DBI, KR, RGS, and SWBI all report before the open.

It’s still early, but it is looking like markets want to take a rest, perhaps with a small pullback early in the day. However, Jobless Claims and the Philly Fed Index could well give markets a push one way or the other. Keep your eyes on the short-term chart in front of you as whipsaw 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).

There are no Trade Ideas for today. However, be aware that the normal distribution of trade ideas has been moved to the trading room and the Members-Only Phone App in the future anyway. 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

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

Beware Gap and Fade but Bulls Running

June 17, 2020 by Ed Carter

Another day, another gap and fade. Markets opened just under 3% higher on the hope of more stimulus and an unexpected May Retail Sales beat. However, as usual of late, traders then sold off hard to begin the all-day volatile rollercoaster. The day ended on a last-minute climb giving us black-bodied candles with long lower wicks across the board. (You decide whether you want to call them Hanging Men.) On the day the SPY gained 1.86%, the DIA gained 2.06%, and the QQQ gained 1.72%. VXX fell back to 36.87 and T2122 climbed back into the overbought territory at 93.75. Oil (WTI) closed up as energy led markets most of the day, ending at $38.11/barrel and the 10-year bond yield rose to 0.75%.

Fed Chair Powell downplayed the $750 billion corporate bond-buying program when he testified before the Senate Tuesday. However, he also signaled that the backstop was in place and that when markets weren’t buying up the bonds, the Fed would step in (i.e. let the market determine the pace of Fed purchases). The part that may scare traders is when he said if the market continues to improve, the Fed would be happy to slow or stop buying. So, he promised a backstop…not additional buying pressure.

On the Virus front, the global headline numbers are 8,287,295 confirmed cases and 446,667 deaths. The big news is a UK study that found a cheap steroid that improves the survival rate of the worst cases by 30%. This is great news, but preliminary as another study found that the previously touted hydroxychloroquine may actually reduce the effectiveness of Remdesivir (the only treatment proven to help). In Brazil, the virus rages out of control as they reported over 34,000 cases on the day (an increase of 66% over the Monday). Meanwhile, China is continuing the fast clamp down on the new outbreak, including more intensive testing of imported meat after it was discovered a majority of the recent cases were people who were processing imported salmon.

In the US, we now have 2,208,486 confirmed cases and 119,133 deaths reported to date. TX has seen a 66% increase in virus cases since Memorial Day, including yet another daily high in new cases Tuesday. FL also saw a 3.6% increase in cases on the day. However, CA saw only a 1.4% increase, the smallest increase in cases in that state in 3 weeks.

In the US, we now have 2,182,979 confirmed cases and 118,286 deaths reported to date. 23 states have seen an increase in cases over the last week. TX reported its 6^th record-high number of hospitalizations in the last week on Monday, but the increase was lower than the 7-day average increase. CA saw a decrease in positive test results (to 4.5%) as of last Friday. Meanwhile, AR Governor Hutchinson issued executive orders protecting businesses in the state from virus liability.

Overnight, Asian markets were mixed, but mostly in the green. Japan and India being the 2 that showed red, but South Korea, Taiwan, Singapore, and Shanghai were all barely on the green side. Europe is showing a similar situation with the big 3 (FTSE, DAX, CAC) up between half and one percent. However, some of the minor bourses (Greece, Finland, and Sweden) are in the red, while some of the others are not that far into the green at this point in their day. At 7:30 am, US futures are pointing to another gap higher of between 0.5%-1.0%.

The major economic news for Wednesday includes May Building Permits, and May Housing Starts (both at 8:30 am), Crude Oil Inventories (10:30 am), Fed Chair Powell testifying (12 pm), and FOMC Member Mester speaks (4 pm). However, there are no major earnings announcements at all on the day.

It’s still early, but as of now, we’re looking at another significant gap this morning. The gap higher at the open should take us back to challenge Tuesday’s highs. If we can clear that, we’ll be back in the Island Reversal gap. Stay focused on the short-term chart. However, the bulls seem to be calling the tune this morning. 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

Looking For More Easing and Stimulus

June 16, 2020 by Ed Carter

Markets gapped down 2% Monday as virus fears continued. However, the bulls then immediately started to fade the gap in a steady climb. About 2pm the Fed kicked that rebound into high gear, by announcing they will buy individual corporate bonds. After another 1.3% gain the roller-coaster was on for the rest of the afternoon. This resulted in Piercing Candle signals on the SPY and DIA. At the close, SPY was up 0.93%, DIA was up 0.63%, and QQQ was up 1.22%. VXX was down to 37.72 and T2122 (4-week New High-Low Ratio) climbed back to 67.65 (mid-range). The 10-year bond yield climbed a bit to 0.72% and Oil (WTI) also climbed back to $37.07/barrel.

In addition to the Fed announcement of actually starting the buying of individual corporate bonds (which had been previously announced, but started Monday), Chair Powell testifies the next two days on Capitol Hill. So, there seems to be hope this morning that he may say something that would buoy markets. There is also a rumor recirculating this morning that the White House will announce its previously rumored Infrastructure plan. This would obviously require Congressional approval and Senate Republicans have blocked several infrastructure packages on cost concerns the last year or so. Still, markets may well buy the hope of more spending.

In business news, HTZ made news by telling traders that it expects stockholders to lose all their money (as part of their IPO application). AAPL also said that consumers spent more than $519 billion in 2019 through phone apps in the iTunes store. (This includes all purchases made through the store, like UBER fares.)

On the Virus front, the global headline numbers are 8,141,521 confirmed cases and 439,713 deaths. A second vaccine candidate began human trials in the UK as their retail stores opened to lines of shoppers Monday. However, the new outbreak in Beijing has now increased to 100 cases. At the same time, Brazil (the current virus epicenter) reported almost 21,000 new cases Monday (more new cases than the US on a population two-thirds the size and much worse testing and medical infrastructure).

Overnight, Asian markets were strongly in the green, with gains of almost 5% in Japan, over 5% in South Korea, and almost 4% in Australia. Europe is following suit, with the three major bourses up 2.5%-3% at this point in their day. At 7:30 am, US futures are pointing to a significant gap higher of between 1%-1.5%.

The major economic news for Tuesday includes May Retail Sales (8:30 am), May Industrial Production (9:15 am), April Business Inventories (10 am). As previously mentioned, Fed Chair Powell also testifies before Congress (10am) and FOMC Member Clarida speaks at 4pm.

It’s still early, but as of now, we’re looking at a significant gap up as the fear of virus impact is replaced with hope for more money from the Fed and government. The gap higher at the open should take us back to challenge Friday’s highs. If we can clear that, we’ll be back in the Island Reversal gap. Stay focused on the short-term chart. However, the bulls seem to be calling the tune this morning. As always, don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

There are no Trade Ideas for today. However, be aware that the normal distribution of trade ideas has been moved to the trading room and the Members Only App in the future anyway. 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

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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Virus Fear Giving the Bears Strength

June 15, 2020 by Ed Carter

Volatility reigned Friday as markets gapped up 2.5% at the open, then immediately sold off back to the Thursday close and continued the roller coaster the rest of the day. Overall, there was a 3.5% range on the day and we closed with significant black-body candles, but the gap up left us green overall on the day. The SPY closed up 1.20%, DIA up 1.87%, and QQQ up 0.79%. The VXX was down almost 7% to 38.71 and T2122 fell dramatically to 30.43. 10-year bond yields rose to 0.707% and Oil (WTI) was flat at $36.48/barrel.

On Saturday the President’s Trade Advisor Navarro said the White House is looking for another $2 trillion stimulus package focusing on aid to manufacturers. However, at the same time, Chief Economic Advisor Kudlow was saying we are likely seeing a v-shaped recovery, are into the recovery phase, and its time to end individual relief. Of course, the White House and Senate Republicans declared the House-passed stimulus bill (that focused on unemployment benefits, relief for state/local government, and extending the PPP program) as DOA. In fact, Senate Majority Leader McConnell said the Senate will not even take up the topic of additional stimulus until at least July 21, after the Congress returns from summer recess. So, it is very unsure if, when, or what type of additional stimulus we might see anytime soon. That leaves the Fed.

On the Virus front itself, the global headline numbers are 8,017,847 confirmed cases and 436,125 deaths. On Monday, the EU reopened its internal borders, albeit under a patchwork of rules and exceptions. On Sunday the UK reported its lowest daily virus death toll since March, opened stores to the public, and PM Johnson said he may well end social distancing rules on July 4. However, things are not going as swimmingly in other parts of the world. In China, a district of Beijing has locked down again after tests at a wholesale market found 49 positives out of 517 people tested (9% positive rate) and now there is a race to test 200,000 other workers in that market who have high-touch, public-facing jobs. India is also seeing a significant spike in cases in consecutive weeks even as reopening continues.

In the US, we now have 2,162,261 confirmed cases and 117,858 deaths reported to date. On Friday afternoon, the CDC said states and localities may need to reimpose strict measures if cases rise “dramatically.” At the same time, overall, there is a slowing of growth in the number of cases. For example, former epicenter NY, which was slowest to reopen, is seeing the lowest rate of new cases, hospitalizations, and deaths since the beginning of the crisis. However, 22 states are see increasing rates. This includes record jumps in FL, NC, SC, TX, and CA. Some states and cities have even paused their reopening plans.

Overnight, Asian markets were deeply into the red, with South Korea losing 4.76% and Japan down 3.47%. The best performer was Chinese Shenzhen, which was down only 0.29%. Europe is following suit for the most part, with the three major bourses down 1.30% on average. However, the minor Belgian and Swiss indices are eking out a green chart so far in the European day. At 7:30 am, US futures are pointing to a significant gap lower of between 1.5% and 2.5% (the exact opposite of Friday morning).

The major economic news for Monday is very limited, with only the NY Empire Mfg. Index (8:30 am) on tap. However, TTM, JKS, and MPAA report before the open.

It’s early, but as of now, we’re looking another significant gap down as the fear of virus impacts builds. With the uptrend broken and assuming the gap, we are now 7%-8% off the recent highs, so there is significant technical damage for bulls to overcome. The sky is not falling yet. We are still 35%-40% above the March lows. However, this is clearly the toughest test of the rally we’ve seen. Stay focused on the short-term chart. 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

Gap Up to Pressure Any Greedy Bears

June 12, 2020 by Ed Carter

Fear of a second wave of coronavirus helped the bears take the bull to the woodshed Thursday on what turned out to be the worst day for markets since March. A 2.5% gap down at the open was followed-up with a steady all-day sell-off with the close near the lows. The SPY is just below its 200sma, while the DIA gapped clear through it and is halfway to its 50sma. The QQQ continues to hold its uptrend as it is still above even the 20sma. On the day, the SPY lost 5.74%, the DIA lost 6.80%, and the QQQ lost 4.95%. The VXX shot higher to 41.60 and T2122 fell sharply, but remains just inside overbought territory at 82.40. Bond yields fell sharply as money chased safety, closing at 0.669% and Oil (WTI) fell 8% to $36.36/barrel.

The Fed released data Thursday that showed total US debt (household, corporate, and government) grew by almost 12% in Q1. It had grown by 3.2% in Q4 of 2019. The total is now just under $56 trillion. The largest jump was 18.8% by business, followed by a 14.3% increase from government. Household debt only grew 3.9% for the quarter.

At the same time, new jobless claims fell again this week to 1.5 million (down from 1.9 million last week). There have been over 44 million new jobless claims made since the virus hit, but the trend has clearly been getting better in recent weeks. So, with this week’s significant improvement, it is odd to note that 24 states recorded increases in initial claims. In the larger context, the continuing claims fell but fell less than expected for the week, down to 21 million.

On the Virus front itself, the global headline numbers are 7,622,021 confirmed cases and 424,325 deaths. The UK, who followed the US lead and delayed lockdown and social distancing, reports its GDP fell 24.5% (year on year) and 20.4% (month to month) in April. This was significantly worse than the 18.4% month-to-month contraction that was expected.

In the US, we now have 2,089,825 confirmed cases and 116,036 deaths reported to date. For the sixth time this month, the state of NC has recorded a record number of hospitalizations. In TX, the city of Houston is close to needing to reverse its recent reopening measures. Discussion is underway about whether they need to open a temporary hospital at the NRG stadium, which was built in April, but never had to be used. In Nashville TN, the Mayor has decided to delay further opening after a recent rise in cases in the city. However, in NY state, they have opened up 5 more regions to business with some restrictions such as restaurants only being allowed 50% of normal indoor seating capacity.

Overnight, Asian markets were mixed, but strongly leaning to the downside with only Shenzhen and India on the positive side. Europe is mixed, but strongly leaning to the upside, with only Russia and Greece in the red so far today. At 7:30 am, US futures are looking for a major rebound from Thursday’s pummeling, pointing to a gap higher of between 1.5% and 2.5% (the exact opposite of Thursday morning).

The major economic news for Friday is limited to May Imports/Exports (8:30 am) and Michigan Consumer Expectations (10 am). There are no major earnings on the day.

The whiplash appears to want to continue. It’s early, but as of now, we’re looking at a gap up as big as yesterday’s gap down at the open. So, Mr. Market seems ready to punish the short-sellers who didn’t take profits at the close Thursday. And while the uptrend was broken in the large-caps, the QQQ held its channel. The bulls clearly have significant damage to repair, but a pullback had been long overdue. So, the sky is not falling and the longer-term trend continues to point higher as of now. Stay focused on the short-term chart. Above all don’t chase, don’t predict, and don’t be greedy (take profits and move your stops as you go).

No Trade Ideas for Friday. (It’s payday, think about taking some off the table for the weekend.) However, keep an eye on the trading room and the Members Only App for tickers that come up today. 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

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