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Bulls See Only Blue Skies Ahead

April 28, 2020 by Ed Carter

The bulls were in charge again Monday, apparently on optimism as various states are now reopening parts of their economies. Markets gapped about 0.75% at the open and meandered upward slowly most of the rest of the day. Interestingly, the tech-heavy Nasdaq lagged on the day as it traded sideways and down from its gap slightly. On the day, the SPY gained 1.46%, the DIA gained 1.43%, and the QQQ gained 0.80%. The VXX fell back to 38.44, but the T2122 4-wk. High/Low Ratio is now very high into overbought territory at 97.32. The 10-year bond yield rose slightly to 0.664%. All this occurred while Oil (WTI) got crushed again, losing 24% to close at $12.88/barrel.

After the close, the Fed announced it is expanding its municipal bond-buying program to include states, counties, and smaller municipality community bonds. This is seen as a necessary stop-gap since there is at least some opposition (notably Sen. Majority Leader McConnell) on Capitol Hill to relief for states and then Monday the President publicly asked why the federal government should bail out the “poorly-run Democratic states.”

In business news, TSLA reversed itself from early in the day and cancelled their plans to request workers to resume work at their California plant this week. On the food front a third of American pork processing capacity is closed and 20% of beef and chicken capacity is shit as well. One major plant was forced to kill 2 million birds earlier this month due to a lack of workers to process them. TSN CEO had said Sunday that he feels the US food supply chain is close to breaking as millions of pounds of meat will simply disappear from stores as a result of closures.

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On the Virus front itself, the global headline numbers are 3,081,502 confirmed cases and 212,337 deaths. The WHO reminded the public that the pandemic is far from over. They said they were specifically concerned about new case trends in Eastern Europe, Latin America, and Africa. Meanwhile, Russia said that any call for a reopening date would be nothing but a “shot in the dark” at this point. In the UK, PM Johnson said it is still too risky to relax their COVID-19 lockdown.

In the US, we have breached the million-case mark, with 1,010,507 confirmed cases and 56,803 deaths. The administration announced guidelines where it hopes to see tests reach just 2% of the public. These guidelines require states to provide the vast majority of tests while the federal government acts as the “supplier of last resort” for testing that 2% of people. At the same time, the President claimed the federal parts of the plan are mostly done, since they will just be a back-stop.

Overnight, Asian markets were mixed, but lean to the green side. In Europe, markets are strongly green across the board so far today. And as of 7:30 am, US futures are pointing to another one percent gap higher at the open.

The major economic news for Tuesday is limited to Mar. Trade Balance and Mar. Retail Inventories (both at 8:30 am) and Conf. Board Consumer Confidence (10 am). However, on the earnings front, MMM, CAT, CNC, GLW, CMI, DHI, DTE, ECL, HOG, IQV, MRK, MSCI, NUE, OMC, PEP, PFE, ROK, ROP, SPGI, SIRI, LUV, TROW, TEL, UPS, WAT, and XRX report before the open. Then after the close, AKAM, AMD, GOOG, GOOGL, BXP, CHRW, CERN, CSGP, DXCM, F, JNPR, MXIM, MDLZ, OKE, and SBUX all report.

The uptrend remains intact. However, resistance remains just above and gaps remain the norm. Bulls clearly want to run and are in ignore bad news more again. Still, there are just as many bad economic reports, dividend and guidance cancellations, and potential for another new wave of infections than ever. In this environment, traders need to continue to remain focused and either quick (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this market, unless you can handle significant short-term pain.

Trade Ideas for your consideration and watchlist: KSS, GL, WYNN, DLTR, FIVE, SNAP, SCHW, GS, FDX, STZ, MKC, HAL Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

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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Cases Rising But ReOpening Begins

April 27, 2020 by Ed Carter

Friday saw a half percent gap higher at the open, fading back down to the previous close and then from 11am into the close a strong rally that saw us close near the highs. For the day, the SPY was up 1.39%, the DIA up 1.17%, and the QQQ up 1.58%. The VXX closed down to 41.52 and the T2122 4-week High-Low Ratio slid back down to the edge of overbought territory at 79.82. The 10-yr bond yield fell slightly to 0.606% and Oil (WTI) kept its rally going, closing at $17.18/barrel. However, for the week, we saw large Doji candles that were down for the first time in 3 weeks across all three major averages.

Over the weekend several major analysts and fund managers commented that they feel the market is over-valued and due for a drop. These include people like Mohamed El-Erian, Carl Icahn, David Tepper, and others. They point to four premises for their stance. First, they feel the market simply has not and cannot grasp how much damage has been done to the economy. Second, they believe a major debt default crisis is still in the offing. Third, they feel outbreaks are inevitable during “reopening” and, even if contained, these will cause market fire sales. Finally, they point to the wrong groups leading the market for a “real” recovery. (According to them, it should be financials, durable goods, and retail leading the way, not healthcare, technology, and utilities as we’ve actually seen.) For those reasons, they expect more downdrafts in the short-term and, in the longer-term, feel it will take 3 years to return to “peak earnings” again. Whether these “experts” are right, wrong, or just trying to talk themselves into a better position is irrelevant. However, the ideas are worth considering when deciding how much of your account to have invested in this market.

On the Virus front itself, the global headline numbers are 3,017,776 confirmed cases and 207,722 deaths. In Europe, food prices are a concern as Russia has halted wheat exports for now and drought is impacting the current growing season. However, in Spain there was a ray of hope as they began to allow limited outdoor exercise and say, if the number of new cases keeps falling, it will ease further on May 1. In Asia, Japan now has the largest number of new daily cases as some of its cities and prefectures have now reinstated lockdowns. However, India has eased a bit, opening residential-area shops under certain restrictions.

In the US, we are approaching the million-case mark, with 987,322 confirmed cases and 55,415 deaths. It’s worth noting that Friday saw the largest number of new cases reported so far in the US. However, the epicenters of New York and New Jersey continue to show a decline in their new case rate. Over the weekend, Dr. Fauci (NIH) said that the US needs to double testing before wide-spread reopening happens, but also that he hopes we can do this doubling in the next couple weeks. In the supply chain, 2 more major meat processing facility closed. So, now about 25% of US meat production is shut due to the virus. On the other hand, a number of states (mostly along political lines) like Georgia, Mississippi, Oklahoma, and Texas that have started reopening many businesses and up to 20 will have a partial opening by the end of the coming week.

Overnight, Asian markets were mostly green with the exception of India which was just on the red side of flat (-0.25%). In Europe, markets are strongly green across the board so far today. And as of 7:30 am, US futures are pointing to a one percent gap higher at the open.

There is no major economic news scheduled for Monday. However, on the earnings front, AMG, AWI, CMS, CHKP, CNX, DORM, LECO, IR, report before the open. Then AVT, AMAT, AMKR, CE, CINF, CNI, FFIV, KDP, NOV, NXPI, PFG, PPG, PKG, SANM, and UHS report after the close.

The uptrend remains intact. So far, earnings have been “good” against dramatically lowered expectations, but companies continue to cancel guidance and report lower year-on-year earnings. However, with over 140 of the S&P reporting and the Fed meeting again this week, we may see a holding pattern Monday and Tuesday as traders wait to see which direction the wind is blowing.

All this is to say we still have a bullish market, at or near resistance, and facing volatile news-driven intraday swings and overnight gaps. In this environment, traders need to continue to remain focused and either quick (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this market unless you can handle significant short-term pain.

Trade Ideas for your consideration and watchlist: HII, ABT, ROP, SCHW, DOMO, NLOK, EXPD, CSCO, INTC, HD, TSN. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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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Georgia Goes First On Significant Opening

April 24, 2020 by Ed Carter

Thursday was a bit of a roller coaster ride. Markets gapped higher half a percent, despite the new unemployment claims. It then rallied until about 10:45 am when the leak was reported by the UK publication Financial Times that said the GILD drug Remdesivir has failed its first random clinical trial. The bears sold that news the rest of the day to close near Wednesday’s close. This produced ugly candles in all 3 major indices, with high wicks and closes near the lows. For the day the market was flat with the SPY down 0.01%, the DIA up 0.13%, and the QQQ down 0.21%. The VXX also lost slightly to 44.06 while the 10-yr bond yield fell to 0.603% and Oil (WTI) rallied again, up 22.5% to $16.87/barrel.

Jobless claims came in at 4.4 million (4.3 estimated). That takes the 5-week total to over 26 million claims, which corresponds to a 23% unemployment rate. However, after the close, the House passed the $484 billion “Relief Bill 3.5.” This came after a largely party-line vote to create a new panel with the authority to investigate the federal response to the pandemic. (Republicans seem to prefer to just trust the Administration, while Democrats have no such trust.)

On the Virus front itself, the global headline numbers are 2,745,786 confirmed cases and 191,806 deaths. In Germany, shoppers did not come out in numbers even though PM Merkel lifted their restrictions. The number of new cases in Europe continues to reduce in rate. However, in Asia, a second wave seems to be picking up steam in places as Indonesia reported its largest jump in new cases as did Singapore (mainly foreign workers the keep in dormitories).

In the US we now have 886,709 confirmed cases and 50,243 deaths. During the day, Dr. Fauci said he is not overly confident at the moment that we have what it takes (in terms of the testing capacity to support a successful reopening) and that we need to continue significantly ramping up testing and tracing capability. However, at the daily presser, President Trump said he disagrees with Dr. Fauci (his chief infectious disease expert) and that we’re doing great on testing. Still, he also said he may extend the social distancing guidelines into early summer and possibly beyond. This all comes as the first major openings start today in the state of Georgia.

Overnight, Asian markets were re across the board with the exception of Australia (+0.49%). In Europe, markets are also in the red so far today, with odd exceptions like the Swiss and Greeks). However, as of 7:30 am, US futures are pointing to an open a half percent on the green side of flat.

Friday’s major economic news is limited to Mar. Durable Goods (8:30 am) and Mich. Consumer Sentiment (10 am). However, on the earnings front, AXP, FCX, PSG, SNY, VTR, and VZ report before the open.

The uptrend of the last couple days continues begrudgingly. Maybe this means we are climbing a wall of worry. However, oil has stabilized nicely, gaining back quite a bit from its Tuesday massacre (strongly negative price) and this is a calming factor for markets. Earnings continue to be “good” against dramatically lowered expectations, but companies continue to cancel guidance and cut budgets. For example, GOOGL cut their advertising budget in half after the close and instituted a hiring freeze for both permanent and contract workers.

All this is to say we still have an uncertain and volatile market, filled with gaps and news-driven intraday swings. In this environment, traders need to continue to be very focused, and either be fast (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this news-driven market. Also remember it’s Friday, which is a great time to lock-in some profits and reduce risk going into 2 days of news cycle that cannot be addressed before Monday.

No Swing Trade Ideas for your consideration and watchlist for Friday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Jobless Claims and Oil Price Key Today

April 23, 2020 by Ed Carter

Wednesday was a bullish, but also indecisive day as oil price stabilizing allowed markets to gap higher at the open (perhaps aided by hope for the near $500 billion extra stimulus coming this week). Prices gapped about 2% higher at the open and wavered the rest of the day on the positive side of the gap. However, a late selloff took prices back near the open. The SPY closed up 2.22%, the DIA up 1.98%, and the QQQ up 2.97%. All 3 of the indices printed Doji or Spinning-Top type candles. The VXX fell to 44.19 and the T2122 4-week New High/Low Ratio average climbed back to 71.59 (still in mid-range, but approaching overbought territory). The 10-yr bond yield rose to 0.617% and Oil (WTI) closed 23% higher to $14.23/barrel.

On the stimulus/relief front, negotiations over “bill 4” are underway as bill 3.5 will be approved by the House Thursday, bringing total (non-Fed) relief spending to just under $3 trillion so far. The next bill is initially targeted to focus on infrastructure and state and local government aid. However, Senate Majority Leader McConnell says he favors allowing cities and states to declare bankruptcy to unburden them from high pension costs. He feels this is preferable to giving those governments federal bailout funds. On the opposite side of that argument, states and municipalities are already planning for massive layoffs and wage cuts due to revenue shortfalls caused by the virus. Among these are Los Angeles, Detroit, and a number of states who are planning mass layoffs and forced furloughs.

On the Virus front itself, the global headline numbers are 2,656,627 confirmed cases and 185,166 deaths. In Germany, face masks were made mandatory, following the Czech Republic, Slovakia, and Austria’s lead. At the same time, in the US we now have 849,092 confirmed cases and 47,681 deaths. Even so, more states have announced they plan to reopen at least partially in the next few days.

The state of Georgia is seeing a lot of controversy over its reopening. For his part, President Trump said he strongly disagrees with Georgia Governor Kemp’s decision to open close-contact businesses (theatres, bars, tattoo parlors, barbers, spas, gyms, etc.) Friday. However, Trump also offered support and praise for the Governor for the move as well. So, apparently he strongly supports the opening (demands it), but also doesn’t want to agree with any early-mover or risky parts of opening. Aside from that, at the nightly presser, Dr. Fauci (NIH) said he would advise the Governor not to do it. He also pleaded with states not to open too early and for people to maintain strict guidelines even after reopening. He said we will have COVID-19 in the fall and that if people don’t adhere to guidelines, we are likely to have a new case rebound and need to close the country again, maybe even before the fall.

Overnight, Asian markets were mixed again, close to the flat line with the exceptions of Japan (+1.5%) and India (+1.4%) as South Korea’s economy contracted 1.4% in Q1. In Europe, markets are also mixed but lean toward the green so far today. As of 7:30 am, US futures are just on the red side of flat as traders wait for the Weekly Jobless Claims (4.3 million new claims expected).

Thursday’s major economic news includes Initial Jobless Claims (8:30 am), Apr Mfg. PMI and Apr. Services PMI (both at 9:45 am), and Mar. New Home Sales (10 am). On the earnings front, APD, ALLE, ADS, CTXS, LLY, HSY, HBAN, IR, IVZ, PHM, TSCO, UNP, AND GWW all report before the open. BMRN, COF, ETFC, EW, FE, INTC, PBCT, RHI, SIVB, VRSN, and VRTX all report after the close. It is worth noting that so far this earnings season, just 17% of the S&P500 have reported. While two-thirds of those have beaten lowered analyst estimates, they’ve still posted an average decline of 14% year-on-year in earnings

The uptrend remains broken, but not by much and Wednesday’s gap-up puts the bulls back in the game short-term. Gaps and volatility remain the norm, with hope based on reopening, relief funds, and Oil price stabilization. However, earnings and those Jobless Claims are likely to drive trading Thursday. In this environment, traders need to continue to be very focused, and either be fast (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this news-driven market.

No Swing Trade Ideas for your consideration and watchlist for Thursday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

$484 Billion More Relief Leads Futures Up

April 22, 2020 by Ed Carter

Tuesday was a down day as oil led us lower again. Following the May contract going negative Monday, on Tuesday the June contract fell 46%. As a result, stock prices gapped down 2% at the open, sold off again mid-morning and then just ground sideways the rest of the day. Prices closed near the lows as the SPY lost 2.99%, the DIA lost 2.69%, and the QQQ lost 3.69%. VXX was up again to 46.38 and the T2122 4wk high/low ratio avg. fell to 57.78 (so it remains in mid-range). The 10-year bond yield fell again to 0.563% as money chased bond safety. Oil looked great on a daily percentage basis compared to the smoking crater of Monday, rising 124%. However, it also closed at $9.06/barrel which would be the lowest close since World War II other than Monday.

After the close, the Senate approved the $484 billion addition to the $2.2 billion bailouts and stimulus plan. This includes $320 billion more for the small business payroll loan/grants, $60 billion in small business disaster loan/grants, $75 billion for hospitals, and $25 billion for more COVID-19 testing. The main items pushed off until the next so-called “relief bill 4” is money for state and local governments (which the White House may oppose) as well as infrastructure (which Senate Republicans have opposed). There was no mention of the President’s Tuesday promise to provide bailout money to help the US oil industry. The House is scheduled to vote on the bill Wednesday or Thursday.

On the Virus front, after the close, the director of a key US vaccine agency left his job unexpectedly. Dr. Rick Bright was leading the Biomedical Advanced Research and Development Authority, but was apparently demoted after clashes with HHS Dept. leaders. One of his deputies takes over as the acting director. Meanwhile, the global headline numbers are 2,580,729 confirmed cases and 178,668 deaths. At the same time, in the US we now have 825,306 confirmed cases and 45,343 deaths.

In terms of restriction easing, Attorney General Barr threatened to sue Governors who keep strong restrictions. He claimed that stay-at-home orders are too close to house arrest, while also saying “he wasn’t saying they weren’t justified.” Meanwhile, many states seem to oppose the AG’s opinion, such as the North Carolina Governor saying “Staying home is saving lives,” Louisiana saying it may issue another stay-at-home order when the current one expires May 1, and New Hampshire saying it has “a ways to go before it reopens.” Beyond reopening, the CDC warned the public that a second wave of the virus next winter could even worse than the current one.

Overnight, Asian markets were mixed but leaned to the green side. In Europe, markets are green across the board so far today. As of 7:30 am, US futures are pointing toward a 1%-1.75% gap higher, perhaps based on hope for the new $484 billion in relief or on oil markets stabilizing.

The major economic news for Wednesday is limited to Crude Oil Inventories (10:30 am), which we already know are massive. However, on the earnings front, T, APH, BKR, BIIB, DAL, ERIC, IPG, KMB, LAD, NDAQ, NEE, NLSN, DGX, STM, and TMO all report before the open. Then WHR, LVS, KMI, DFS, CSX, FTI, AA, LRCX, ORLY, STX, FNF, AMTD, RUSHA, LSTR, and XLNX report after the close.

The uptrend has now been broken, but Tuesday’s ugly candles took all 3 major indices back down near potential support. Gaps and volatility remain the norm, while earnings and nasty economic news continue to drive trading. So, we need to continue to be very focused, and either be fast (day trade) or slow (long-term holds). Be very cautious about any swing trades you take in this news-driven market.

No Swing Trade Ideas for your consideration and watchlist for Wednesday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Oil Continues to Lead Markets Lower

April 21, 2020 by Ed Carter

Monday a fairly blah day except for oil. Oil had been pounded again the previous night, led markets to gap down and then was relentlessly pounded all day. For the first time ever, oil (May contract that expires Tuesday 4/21) traded negative, and not just a little negative. At one point, WTI was trading at -$40/barrel and it closed at -$31.37/barrel. This pressure held the bulls down and all the major indices closed near the lows of the day. The SPY lost 1.73%, the DIA lost 2.39% and the QQQ lost 1.18%. The VXX closed up almost 10% to 42.84 and the 10-year bond yield fell slightly to 0.616%. However, it was Oil (WTI) that stole the show, down an incredible 171% on the day.

The story behind oil is that every tanker, tank, dry well, and bucket of available storage has been filled. However, the tankers on their way from Saudi Arabia (yes we still import every day) can’t just stop and all the US shale wells can’t be turned off either. It turns out, that in addition to other short-comings, if you stop pumping a fracked well, it immediately starts degrading, meaning it will take even more fracking to get that well back to normal production later. So, shale producers would rather pump it at a loss than shut down their oil fields. The problem is, with nowhere to put that oil, this drove the front month contract deeply negative. So, those losses per barrel are very steep now. And while the June contract still has another month to find someplace to pour the oil, price is still falling and nothing but a complete stop of supply or massive pick-up in demand will change this, with neither likely happening except very gradually.

On the Virus front, after the close, a study was published that found “much more widespread” antibodies (people who have had or now have the virus) in Los Angeles County than previously estimated. While great (to find the virus less deadly than expected), the study still found only 4% of the adult population had antibodies. This means 96% have not had the virus yet and are still at risk, plus we are unsure of how well or even if people who do have the antibodies are protected from reinfection. So, this is maybe good news, but we don’t know how much.

The global virus headline numbers are 2,498,999 confirmed cases and 171,334 deaths. At the same time, in the US we now have 792,938 confirmed cases and 42,518 deaths. Several states have started easing restrictions, under pressure from those who feel the who pandemic is overblown. Some opening up in spite of not meeting the guidelines. However, Dr. Fauci (NIH) again warned protesters Monday “Unless we get the virus under control, the real recovery economically is not going to happen.” So, the question remains open as to whether the trillions of dollars spent on the bailout and the month of time lost to lockdown will end up wasted by allowing the virus spread to resume at pace.

On the small business bailout front (bill 3.5), negotiations continue, but no deal has been reached as of Monday evening. The sticking point seems to be that the White House will not accept $25 billion for testing in the bill and Democrats wanting money for state and local governments that the Republicans oppose.

Overnight, Asian markets showed us red across the board as oil prices continued to fall overnight (despite a $55 boost from rolling to the June contract). In Europe, markets are also down about 2% across the board at this point in their day. As of 7:30 am, US futures are pointing toward another 1%-2% gap lower.

The major economic news for Tuesday is limited to Mar. Existing Home Sales (10 am). However, on the earnings front, KO, CMA, DOV, EMR, FITB, HCA, LMT, NTRS, OMC, PCAR, PM, PLD, SNA, SYF, and TRV all report before the open. CMG, CB, NFLX, and TXN report after the close.

The uptrend remains in place, but Monday’s candles were ugly, as well as gaps and volatility are still the norms. Optimism seems to be the rule lately. However, we are in earnings season and there will continue to be a stream of both bad economic news and good virus-hope news. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take in a news-driven market.

No Swing Trade Ideas for your consideration and watchlist for Tuesday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Oil Absolutely Hammered Again

April 20, 2020 by Ed Carter

Friday was a volatile day for markets when hope for a treatment drug faded slightly as it became clear only partial preliminary data from an uncontrolled test had been reported. A 2.5% gap-up sold off and then markets wavered most of the day until the bulls rallied hard the last hour. The large-caps closed near their highs, but for a change, the Nasdaq lagged. At day end the SPY was up 2.7%, the DIA up 3.01%, and the QQQ up 0.96%. Accordingly, the VXX fell to 39.05 while the 10-year bond yield rose to 0.642%. Oil got crushed again as WTI fell almost 9% to $18.12/barrel.

On the virus headline front, the world now has 2,421,018 confirmed cases and 165,939 deaths. At the same time, in the US we now have 764,265 confirmed cases and 40,683 deaths. On the bright side, New York said it was “past the high point.” The same seems to be true in New Jersey and Connecticut. However, such statements assume the spread does not resume or at least that any future waves will turn out to be less severe than the first.

The pressure to “reopen American” continued to increase, mostly along political lines, over the weekend. Some opening did take place as Florida opened its beaches and parks. Texas said it will follow suit on Monday and that its retail-to-go businesses can reopen Friday. It’s notable that New York, New Jersey and Connecticut (the virus epicenter in the US) all opened their marinas for boating as well. So, at least recreational areas are starting to open.

On the small business bailout front (bill 3.5), both Sec. of Treasury Mnuchin and House Speaker Pelosi told reporters they were very close to a deal Sunday afternoon. Details are not clear, but it seems to be looking in the $400-$500 billion additional spending range. This would add another $300 billion to the small business bailout fund, provide $50 billion in disaster loans. Both sides hope for approval from both houses by mid-week. This comes as JPM announced that it already has $26 billion in small business relief applications that still need funding.

Overnight, Asian markets were mixed but mostly red on a Chinese Prime Loan rate cut of 20 basis points to 3.85% for a one-year loan. Oil has continued to be pounded all through the overnight session and at 7:30 am sits at $13.03/barrel (up off a low of $12.43, but even so the lowest price in 2-plus decades for WTI). In Europe, markets are in the red, but generally down less than a percent at this point in their day. As of 7:30 am, US futures are pointing toward a 1%-2% gap lower.

There is no major economic news for Monday. However, on the earnings front, HAL, MTB, and TFC report before the open. CDNS, EFX, IBM, and ZION report after the close.

The uptrend remains strong, but gaps and volatility also are still the norm. Optimism seems to be the rule lately, ignoring any bad economic news or earnings. However, we are in earnings season and we know there will continue to be a stream of both bad economic news and good virus-hope news. More immediately, the massive sell-off in Oil surely signals huge fear over economic demand. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious about any swing trades you take in a news-driven market.

No Swing Trade Ideas for your consideration and watchlist for Monday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Market All About ReOpening Optimism Now

April 17, 2020 by Ed Carter

Thursday was an interesting day in markets. Another 5.25 million jobs lost (22 million in the last 4 weeks), a big drop in housing starts and Mr. Market looked right past those numbers to a rosier future. Regardless, stocks opened with a slight gap up and then vacillated the rest of the day, closing back near where they opened. As has been the case lately, the tech-heavy QQQ fared better than the other indices. On the day, the SPY closed up 0.43%, the DIA flat at up 0.05%, and the QQQ up 1.82%. All three printed indecisive candles, but the QQQ was the best of the three. The VXX gained slightly to 40.74, while the 10-year bond yield fell again to 0.617 as money continued to chase safety in Treasuries. Oil (WTI) fell again, closing below $20 at $19.58/barrel.

During the day, Eastern states decided to extend their shutdowns through May 15 in a coordinated decision among NY, NJ, PA, MA, CT, DE, RI governors. In the Midwest, the governors of MI, OH, WI, MN, IL, IN, and KY announced they formed a regional partnership to coordinate their own regional economic reopening. Out west, CA Governor Newsome promised new unemployment benefits and incentives to cover health workers who stay on the job.

After hours, BA announced it will resume production at its Seattle-area factories as soon as Monday. This will include 27,000 employees (17% of their workforce) and all the returning workers will be required to wear masks, maintain social distancing and will be provided with both periodic wellness checks and contact tracing for anyone who does test positive. This is the first major business reopening to be announced.

At the nightly event, the 3-phase approach for reopening the economy was announced. The guidelines are short on definitions (for example, what exactly are “downward trajectory,” “robust testing,” or even “vulnerable people”). However, ANY “one size does not fit all” plan would likely be short on clarifications. The strategy basically looks for a non-specified decline in the rate of new cases to lead to the first phase of easing. The plan puts most of the responsibility on states for decisions, testing, border control (to avoid cross-jurisdiction spread), etc.

In an afternoon call to Governors, the President warned that states should also be prepared to handle new flare-ups of the virus after easing. During that call, there was push-back to the plan, saying more testing should be in place before the reopening is launched. Drs. Fauci and Birx have repeatedly said, testing, isolation, and tracing are the key to controlling the virus spread, as well as increasing public confidence. However, the President reportedly replied that more testing will need to come after reopening because a working economy is a priority.

For reference, the US now processes about 140,000 tests each day (more than any other country on a “total tests” basis, but still very low on a per-capita basis). That amounts to testing only 0.08% of the American workforce daily. So, even if just 10% of the workforce returns to “work away from home” AND we double US testing capacity, we would still only be testing about 1.5% of the active workforce per day. Worse yet, these tests are a picture in time. This means each worker may need to be tested many, many times unless or until an effective treatment or vaccine are available. Is that enough? The President, Dr. Fauci, Dr. Birx, and the Task Force seem to think it could be.

Either way, the President made a tough decision that we can’t wait any longer. When the Governors agree, we will start to reopen (probably along regional lines). If that approach works, great! We’ll get back to some sort of new normal in 2-3 months. If the plan causes a relapse, we’ll just lockdown again, and come up with a different approach. Yes, some people may be lost, but we’re all going to die someday and there’s no way to say someone might not have died at home or from a trip to the grocery anyway. Cold? Maybe. However, there is no good answer for recovering without risk of relapse into a run-away spread. So, we were always going to face this decision unless we decided to wait for a proven treatment or vaccine. And that just isn’t in the cards from a political, economic, or general public patience standpoint.

On that treatment front, some VERY preliminary testing of a GILD drug was leaked Thursday night. This leak showed the drug may have real potential benefits. However, remember that this information is based on the results from only 25% of the study’s patients, was an uncontrolled (no placebo group) test, and looked at only one dosing level. Still, it is a welcome ray of hope and should buoy market spirits (at least for GILD, which rose 15% after-hours on the leak).

Overnight, Asian markets were green across the board. In Europe, markets are even more strongly green at this point in their day. This includes the 3 major bourses (FTSE, DAX, CAC) all up about 4%. As of 7:30 am, US futures are pointing toward a 2-3% gap higher on optimism about the new drug and economic opening.

There is no major economic news for Friday. On the earnings front, CFG, KSU, PG, RF, SLB, and STT all report before the open.

The uptrend remains in place, but gaps and volatility also remain the norm. Optimism seems to be the rule of the morning, but we are also headed into another weekend. So, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take in a news-driven market.

No Swing Trade Ideas for your consideration and watchlist on Friday. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Next Big Jobless Claims Number on Tap

April 16, 2020 by Ed Carter

Wednesday saw economic news dampen markets as Retail Sales came in much lower than expected (largest drop since ’92), more big banks all had huge (oddly very close percentage-wise) misses, and the worst reading in NY Empire State Mfg. Index since 1946 led to a 2% gap down at the open. After a volatile rally most of the day, all the major indices sold off the last hour. As a result, the SPY closed down 2.12%, the DIA down 1.92%, and the tech-buoyed QQQ down just 1.15%. All three posted indecisive candles with the QQQ being a Harami Spinning Top and the others Doji. The VXX closed up 8% to 40.41 while the 10-year bond yield fell to 0.633% as investors chased Treasury safety. Oil (WTI) was below $20 much of the day, but closed at $20.23/barrel on rumors the US government would cap US production by buying more oil for the national strategic reserve.

Meanwhile, in Michigan, there were crowds of unmasked, virus control opponents protesting the state’s stay-at-home order on Wednesday. Two conservative groups had called the protest, but it was apparently adopted by others as a good number were also carrying rifles and protesting gun laws possibly among other things. This follows a much smaller group (dozens) who held the same type of protest in Raleigh, North Carolina for an hour on Tuesday. The point is that some groups are pushing (following the President’s lead, or maybe leading the President?) for an end to virus-control measures that they believe are hurting (the economy) worse than the virus is hurting people. So far, this seems to be a politically-centric phenomenon but certainly bears notice as most still predict months or measures of some kind ahead.

After the close, Bloomberg reported that the small business Payroll Protection loan/grant fund ran out of money on Wednesday night. The Treasury Dept. and the SBA have not announced statistics recently. However, based on the applications processed by just 3 large banks (JPM, WFC, and C) and the SBA saying the average approved loan was $240,000, the math seems right. At his daily rally, the President took the opportunity to blame the lack of replenishment funds (among other things) on Democrats. He also reiterated that it was up to states to do the testing (but the Feds will help if needed) and said he expected states and municipalities to control their own borders to prevent cross-jurisdiction spread. If possible, that too would be a sizable economic obstacle.

In Germany, PM Merkel announced tentative steps to begin reopening its economy. While most restrictions will stay in place until at least May 3^rd, some small shops (less than 8,500sq ft in size) will be allowed to open as soon as next week. The timing of this announcement was a bit odd as coincidentally Germany reported a jump in new cases on the day. In the UK, the cabinet is set to extend its nation-wide lockdown for at least 3 more weeks. In Spain the death toll rose slightly again and the WHO noted that Europe has half the world’s infections (1 million+ cases and 84,000+ deaths) and is not out of the woods. In doing so, it recommended that any EU reopening goes slow to hopefully reduce the chance of more major outbreaks.

On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,096,549 confirmed cases and 135,661 deaths. At the same time, in the US we now have 644,348 confirmed cases and 28,554 deaths.

Overnight, Asian markets were mixed, with Japan, Hong Kong, Australia down, while Chinese markets were up slightly. In Europe, markets are slightly in the green across the board at this point in their day. As of 7:30 am, US futures are pointing toward a small gap higher in front of the big economic news coming in an hour.

Thursday’s major economic news includes Mar. Building Permits, Mar. Housing Starts, Mar. Philly Fed Mfg. Index, and Weekly Initial Jobless Claims (all at 8:30 am). A Fed member (Williams) also speaks at 2pm. Major earnings reports include ABT, BLK, BK, KEY, MS, NUE, and TSM all before the open. ISRG reports after the close.

The uptrend remains in place, but volatility continues to be high and gaps have become the norm. The economic reports at 8:30 am are likely to call the tune for markets today, especially the Initial Jobless Claims that estimates are putting at 5 million. However, the unveiling of general reopening guidelines could lift markets, helping traders again look ahead past the short-term economic news.

Regardless of what happens at the open, in this market, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take.

No Swing Trade Ideas for your consideration and watchlist today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

Big Banks Missing Big

April 15, 2020 by Ed Carter

Tuesday was another crazy day for markets as the strong rebound rally continued in the face of major bank earnings misses, companies dropping forward guidance, and mostly “not as bad as expected” news. The major indices gapped 2% higher and while the large-caps had some volatility, the techs continued to rampage higher. As a result, the SPY closed up 2.95%, the DIA up 2.39%, and the QQQ up 4.35%. As expected, the VXX was down again to 37.40. The 10-year bond yield also fell slightly to 0.747%. However, Oil (WTI), a major barometer of the economy, got hammered again, down 7.5% to $20.74/barrel.

In terms of virus treatments, a French study (84 patients) released Tuesday evening found that the malaria drug hydroxychloroquine does not help COVID-19 patients (at least statistically-significantly). Worse yet, the drug does cause serious side effects. As a result, the study recommended it should be discontinued as a COVID therapy. This “should” have a negative impact as markets can cross off another miracle.

In relation to economic recovery, a Harvard paper published in the Journal of Science Tuesday suggested that in the absence of a new treatment or a faster-than-expected vaccine, social distancing, school closures and stay-at-home orders will be needed until 2022, at least on an intermittent basis. Meanwhile, Dr. Fauci (NIH) said Tuesday afternoon that a May 1 easing target is “a bit overly optimistic.” In addition, he said any easing will be on a rolling basis, not all at once (due to a lack of testing capacity).

On that “Opening” front, another regional group of Governors (this one in the Mid-West) has set up a state-level committee to coordinate when and how to ease their lockdowns. The Governors of California and Connecticut Governors said to ask them again in mid-May what the timeline will be for easing restrictions. However, the President said some will open even before the end of April. He also acknowledged reality, saying it is up to the states to make their own timing decisions and to do their own testing. He also said they (states) can come to the Federal government for help, regardless, they (states) will open very soon, very powerfully, and he will hold the Governors accountable very strongly.

In business news, BA announced that customers canceled orders for 150 of the 737 Max planes last month. AMZN also announced it is slashing affiliate commissions (as much as 63%). The reason behind this move us unclear, but this is another big revenue hit for publishers, social marketers, and other businesses. However, on a positive note, AAPL announced it had shipped 2.5 million iPhones in China during March, a sharp rebound after the worst month ever in February.

In follow-up to Easter’s OPEC+ production cuts, a little clarity may be coming to how President Trump plans to cut US production by 300,000 barrel/day. On Tuesday, the Texas Railroad Commission began discussing production caps for the first time in 50 years. However, there was immediate fierce pushback from companies such as FANG, which said it would halt all drilling in Texas if the state instituted any caps.

On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,016,840 confirmed cases and 126,568 deaths. At the same time, in the US we now have 614,246 confirmed cases and 26,064 deaths.

Overnight, Asian markets were down across the board, South Korea being the exception. In Europe, markets are heavily in the red (about 2% on average) at this point in their day. As of 7:45 am, US futures are pointing toward a 1.5% gap lower on heavy earnings misses from major banks. Oddly all the banks seemed to miss estimates by 45-46%, yet run completely different businesses with different focuses and estimates…funny how that happened.

On Wednesday, major economic news includes Mar Core Retail Sales and Apr. NY Empire Mfg. Index (both at 8:30 am), Mar. Industrial Production (9:15 am), Business Inventories (10 am), and Crude Oil Inventories (10:30 am). Major earning s reports include ASML, BAC, C, GS, PNC, SCHW, UNH, and USB all before the open.

It appears traders have been smoking that hopium, “pricing markets for perfection” amidst what certainly appears to be massive economic uncertainty. Meanwhile, the major analysts and economists are saying the downturn will likely be the worst seen since the Great Depression, with literally millions of small businesses at risk of closing and tens of millions of loans at risk of default. Something has to give…both can’t be right.

While the uptrend continues, we are now in a very uncertain earnings season and the economic news will continue to be bad for some time. Remember, while it may be time to start dipping your toe in again according to the chart, we need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds). Be very cautious on any swing trades you take.

🎯 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