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Improving Virus News, Earnings, and Powell

February 10, 2021 by Ed Carter

Markets gapped down and had a tiny follow-through the first few minutes of the day. However, bulls were having none of it and after a tiny rally markets ground sideways to close dead flat. This broke the string of 6 straight higher closes, but only barely and the DIA did eke out a 3-cent gain on the day (whee!). Despite this flat close, the bulls did show some weakness, with higher wicks (QQQ) and Spinning Top candles (SPY and DIA). On the day, SPY fell 0.07%, QQQ fell 0.02%, and DIA rose 0.01%.

However, small-caps diverged as the IWM closed up 0.40% at another all-time high close. The VXX was flat at 16.40 and T2122 fell slightly by remains deep in the overbought territory at 94.65. The dollar fell to a two-week low, which helped boost commodities Tuesday. It didn’t hurt bitcoin either, which traded near $50,000 before backing off to $47,000 at day end. 10-year bond yields fell slightly to 1.16% and Oil (WTI) rose again to $58.30/barrel.

AMZN workers at a warehouse in Alabama are voting (by mail) on whether to form a union. Tensions remain high as the company is staunchly against the move, sending texts, mail, and verbal messages warning workers against the idea. The 6,000 workers have nearly 2 months to cast their votes. Elsewhere, mortgage demand fell again as interest rates rose to a 3-month high. Refinancing fell 4% for the week and new home loan applications were down 5% on the week.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,799,946 confirmed cases and 479,772 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 108,254 new cases per day. Still, deaths remain stubbornly high at 2,905 per day. JNJ’s CEO told CNBC that he thinks people may need an annual Covid-19 booster shot similar to how annual flu shots are recommended…at least for the next few years. In the meantime, the LLY antibody combination treatment received emergency use authorization from the FDA Tuesday night.

Globally, the numbers rose to 107,490,485 confirmed cases and the confirmed deaths are now at 2,353,256 deaths. In good news, the world’s average of new cases is down again to 430,323 per day, but mortality remains high at 12,139 new deaths per day. France has now extended their state of emergency until June. Germany is also set to extend their own lockdown amid fear over the UK and South African variants. In the UK, Transport Minister Shapps said it is far from clear whether UK tourists will be able to travel this summer. Yet in good news, the WHO says that global new case numbers fell 17% last week and a back below 500,000 per day for the first time in many months.

Overnight, Asian markets were mostly green. Hong Kong (+1.91%), Shenzhen (+1.75%), and Shanghai (+1.43%) led the bullish charge. Singapore (-0.32%) was the only appreciable loser on the day. In Europe, markets are mixed, but mostly green so far today on very modest moves. The FTSE (+0.27%), CAC (+0.01%), and DAX (-0.01%) are fairly typical of the modest trading. As of 7:30 am, US Futures are pointing toward a flat to modestly higher open. The DIA is implying a +0.29% open, the SPY implying a +0.33% open, and the QQQ implying a +0.34% open at this point.

The major economic news for Wednesday includes Jan Core CPI (8:30 am), Crude Oil Inventories (10:30 am), the Federal Budget (12:30 pm), Jan. Federal Budget Balance (2 pm) and a Fed speaker (Chair Powell at 1 pm). Major earnings reports on the day include BG, CDW, CME, KO, DBD, EEFT, GM, IPG, IQV, PAG, TMHC, TEVA, TM, and UAA before the open. Then after the close, ATUS, ASGN, BHF, CERN, CINF, DCP, EFX, EQIX, IFF, LUMN, MGM, MOH, ORLY, SSNC, TRMB, UBER, WU, XPO, ZG, Z, and ZNGA report.

As the Impeachment Trial continues to grab headlines, earnings and a speech by Fed Chair Powell are likely the strongest market drivers on the day. So far, KO beat on earnings and fell short on sales, UAA reported an unexpected profit, and PAG reported a blowout quarter this morning. However, GM warned that the current global chip shortage could reduce its 2021 earnings by $2 billion. It appears bonds and the dollar are waiting to hear from Chair Powell before they take a direction today.

The market looks toppy here. However, nobody ever built a career by picking reversals…so don’t do it. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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Bulls Keep Running and TSLA Bets Bitcoin

February 9, 2021 by Ed Carter

Markets gapped higher for the sixth day in a row and after a little volatility, the bulls took over to close us near the high in all 3 major indices. The large-dap indices printed large-body, white bullish candles and the QQ printed a white Hanging Man type. On the day, the SPY gained 0.72%, the DIA gained 0.75%, and the QQQ gained 0.67%. As a result, all 3 major indices closed at yet another all-time high close, which also marked the strongest run since August. The VXX lost about a percent to 16.33 and T2122 climbed even further into the overbought territory at 97.34. 10-year bond yields rose again to 1.176% and Oil (WTI) jumped 2.2% to $58.10/barrel.

In an interesting twist, TSLA disclosed in a filing that it has purchased $1.5 billion in bitcoin, in order to provide it with the liquidity to begin accepting bitcoin as a payment method. TSLA CEO Elon Musk also added the hashtag #bitcoin to his TWTR bio. These moves helped drive bitcoin to an all-time high of $44,000 on Monday.

Airline stocks also got a boost as documents revealed the Democratic relief plans should include $14 billion in aid for the industry. This comes a day after CNN reported that despite demanding relief, the airline industry had over $31.5 billion of cash on their balance sheets to end Q4. Another piece of the Democratic package is a $3,000/child ($3,600/child under 6) child credit to be paid to families by the IRS in monthly installments. It’s worth noting that votes on the various pieces of the Biden package begin in Committees on Tuesday.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,700,629 confirmed cases and 476,405 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 110,694 new cases per day. Still, deaths remain stubbornly high at 2,954 per day. New Sec. of Transportation Buttigieg says that the US is considering testing requirements for domestic air travel. CDC Director Walensky said that would be helpful, but stopped short of calling for such a plan. At the opposite end of the political spectrum Iowa’s Governor lifted the state’s mask mandate without even consulting her own health officials. Finally, as of now, just under 10% of the US populations has received at least one vaccine shot.

Globally, the numbers rose to 107,079,812 confirmed cases and the confirmed deaths are now at 2,338,319 deaths. In good news, the world’s average of new cases is down again to 438,996 per day, but mortality remains high at 12,322 new deaths per day. WHO researchers that have now toured and analyzed Chinese sites say COVID-19 is very likely to have come to humans through an intermediary species, but could not be sure what kind of animal. They also reported that the first cases at the Wuhan Seafood market very likely took place in early December, but were first identified as a non-flu virus at the end of December. This coincides with what was believed before and with the Chinese narrative.

Overnight, Asian markets were mixed but mostly green. Shenzhen (+2.43%) and Shanghai (+2.01%) were positive outliers, buoyed by both economic data and the release of WHO findings not being shocking. Australia (-0.86%) was an outlier to the downside. In Europe, markets are mostly red so far today on tepid trading. The FTSE (+0.04%) and CAC (+0.03%) are just on the green side of flat while the DAX (-0.40%) is modestly lower and more indicative of the rest of the continent. As of 7:30 am, US Futures are pointing toward a flat to modestly lower open. The DIA is implying a -0.17% open, the SPY implying a -0.12% open, and the QQQ implying a -0.07% open at this point.

The major economic news for Tuesday is limited to Dec. JOLTS (10 am) and a Fed speaker (Bullard at noon). Major earnings reports on the day include ARMK, AVYA, CARR, CNC, COTY, DD, FIS, FSV, FOXA, IT, GT, HBI, IIVI, INCY, JLL, LCII, MLM, MAS, SPGI, TDG, VSH, WCC, and WLTW all before the open. Then after the close, AMRK, AKAM, AIZ, CSCO, CCK, FISV, FMC, GPRE, MAT, NCR, NGL, OI, PAA, PAGP, REYN, THC, TWTR, and WELL report.

After the recent strong bullish run, markets are extended and need some rest. So far this morning, it looks like they may get it with a flat to mildly lower open. With very little economic or stimulus news expected and focus shifted to the Trump Impeachment Trial, it will be up to earnings to push. However, a lack of reason has never stopped the bulls before. So, don’t just expect a pullback. Wait to see it actually happening. The trend still favors those bulls.

Remember, nobody ever sustained a career by picking reversals…so don’t do it. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Stimulus a Done Deal but Min Wage Iffy

February 8, 2021 by Ed Carter

Markets gapped up about half a percent Friday to new all-time highs, but then put in indecisive action, undulating sideways the rest of the day. This left the QQQ with a gap-up Doji and both large-cap indices with gap-up, black-body spinning tops. As a result, the SPY and QQQ closed at all-time high closes and the DIA just missed. On the day, SPY gained 0.39%, QQQ gained 0.34%, and DIA gained 0.28%. This made for a big week and the longest winning streak since late August. The VXX was flat at 16.47 and T2122 (4-week now high/low ratio) rose further into the overbought territory at 93.33. 10-year bond yields rose significantly to 1.169% and Oil (WTI) rose about half a dollar to $56.85/barrel.

On the relief plan front, over the weekend President Biden said he believed the increase to a $15/hour minimum wage would not survive the reconciliation process. In related news, Senator Sanders said he opposes the tightening of eligibility for a $1,400 stimulus check (opposes tightening the income cap). Sunday Treasury Sec. Yellen told CNN that passage of the $1.9 trillion relief package could return the US to full employment in 2022. This came in response to former Treasury Sec. Summers raised questions over whether additional stimulus in that amount might cause a stock market bubble and bring inflation faster.

In regulatory filings Monday, Hyundai and Kia said they are not in talks with AAPL to make the autonomous “Apple Car.” The companies said they have gotten requests from multiple companies to partner on autonomous, electric vehicles, but no partnerships have been decided this early. Those South Korean stocks fell sharply on the news, but the announcement may have a follow-through effect even on AAPL. This may also be fallout from AAPL not being pleased that their secrecy was breached by earlier reports that AAPL was working with those two companies on the project.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,611,403 confirmed cases and 474,933 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 116,256 new cases per day. Still, deaths remain stubbornly high at 3,020 per day. A study published Sunday found that the number of UK variant cases is doubling in the US every 10 days. This coincides with the CDC model predicting it will be the most prevalent Covid-19 mutation in the US by March. Later in the day, President Biden answered CBS a reporter by saying that it will be very difficult to reach herd immunity by the end of summer.

Globally, the numbers rose to 106,751,887 confirmed cases and the confirmed deaths are now at 2,328,753 deaths. In good news, the world’s average of new cases is down again to 446,334 per day, but mortality remains high at 12,394 new deaths per day. Early data suggests the AZN vaccine offers only minimal protection against the South African variant (after 2 doses), even among young healthy adults, according to a study co-authored by Oxford University. The good news is that Oxford also said a new vaccine to tackle the South African variant should be in the autumn. In the meantime, South Africa has suspended AZN vaccinations.

Overnight, Asian markets were mostly green. The only significant loss was in South Korea (-0.94%). Meanwhile, Japan (+2.12%), India (+1.28%), Shenzhen (+1.21%), and Shanghai (+1.03%) led the gainers. In Europe, we see a similar story taking shape as only Denmark is in the red at this point. The FTSE (+1.01%), CAC (+0.71%), and DAX (0.26%) are typical of the bullish movement on the continent so far today. As of 7:30 am, US Futures are pointing toward a modestly green open. The DIA is implying a +0.40% open, the SPY implying a +0.32% open, and the QQQ implying a +0.28% open at this point.

There is no major economic news scheduled for Monday. Major earnings reports on the day include CNS, ENR, GTES, GPN, and HAS before the open. Then after the close, ACM, AMKR, BECN, BAP, KKR, LEG, OMF, RGA, SPG, TTWO, and TFII report.

With Stimulus now a done deal, the focus turns to whether any horse-trading can bring any Republicans onboard. However, that story really only has the day to play out as eyes will turn to the Impeachment Trial of ex-President Trump on Tuesday. Just more political theatre as GOP Senators have already voiced that they will not convict him. Earnings will be the other driver this week, but today is a relatively light day. At any rate, coming off the best week since November and with Futures pointing up this morning, the bulls have the upper hand.

Swing Trade Ideas for your consideration and watchlist: ABT, STX, CLF, GILD, NKE, ORCL, BOOT, KO, OSTK, SNAP, ZM, TGTX, MO, BCLI, SCHW, CAT. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Stimulus Heads to Reconciliation

February 5, 2021 by Ed Carter

Markets gapped modestly higher at the open Thursday. Then the bulls stepped in for a morning rally. Most of the day saw a grind sideways and then bulls made a push at the end of the day. As a result, the DIA printed a White Marubozu (Shaved Head) candle and the other two major indices printed large white candles themselves. All 3 closed at the highs of the day. So, on the day SPY gained 1.14% (closing at an all-time high), DIA gained 1.11%, and QQQ gained 1.18% (also closing at a new all-time high close). The VXX lost over 4% to 16.50 and T2122 rose deeper into overbought territory to 89.58. 10-year bond yields remains essentially flat at 1.136% and Oil (WTI) rose again to $56.23/barrel (over a 12mo. high).

After the close, Senate Republicans are announcing dozens (hundreds?) of amendments to the budget bill (relief package). These seem to be being offered as amendments as a way to force the process to vote on the amendments in hopes that it will fracture Democratic solidarity and/or force an item-by-item vote that can be used in later campaigning. However, the Senate plowed ahead along party lines to pass the budget bill. So, now reconciliation between the House and Senate versions begins and the package is still on track for signing before the current relief bill expires March 15.

After a meeting with Treasury Sec. Yellen on Thursday, the SEC and CFTC agreed to a timely study of the situation, including trading practices and the actions by brokers that temporarily prevented buying and forced selling of some tickers. However, they also made a boilerplate statement that “the infrastructure of the stock and commodities markets remains resilient, even during periods of extreme volatility.” In related news, it was revealed that the CEO of Robinhood is not licensed by FINRA. In other related news, the high-frequency trading firm Citadel sued the SEC to get the D-Limit method used by the IEX exchange (intended to discourage predatory front-running) prohibited. (In other words, they don’t want anything to prevent them front-running orders.) This is related because Citadel accounts for 40% of Robinhood’s revenue.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,273,890 confirmed cases and 466,988 deaths. However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 129,894 new cases per day. Still, deaths remain stubbornly high at 3,100 per day. JNJ asked the FDA for emergency approval for their COVID-19 vaccine (66% effective, but requires only one shot). Then Thursday night, one of the Biden COVID advisors told CNBC that the 3 main mutations (UK, South Africa, and Brazil) may evade the immune response created after vaccinations with at least the two existing US vaccines (PFE and MRNA). White House Chief of Staff Klain said they hope to revive a Trump Administration idea that never got off the ground. That being the mailing of masks to all Americans. The original idea was scrapped because of the previous Admin’s fear it might cause “concern or panic.”

Globally, the numbers rose to 105,506,871 confirmed cases and the confirmed deaths are now at 2,296,567 deaths. In good news, the world’s average of new cases is down again to 485,014 per day, but mortality remains high at 12,969 new deaths per day. Countries are beginning to work on “Vaccine Passports” in many countries. Sweden is the latest of the EU nations who announced they are working on such a plan with hope of implementing it in the summer. The UK has announced it will implement mandatory hotel quarantine for incoming travelers from 33 “red list” countries as of mid-February. (The US is not on the list as of now.)

Overnight, Asian markets were mixed, but mostly green. The only loses were in Shanghai (-0.16%), Shenzhen (-0.88%), and Malaysia (-0.40%). The rest of the region was strongly in the green with Japan (+1.51%), Australia (+1.11%), and South Korea (+1.07%) leading the way. In Europe, a similar story is taking shape as the bulls are in charge in all but 3 exchanges. The FTSE (+0.09%) is flat, DAX (+0.29%) up modestly, and CAC (+1.11%) leading the charge. As of 7:30 am, US Futures are implying a moderate gap higher at the open. DIA is implying +0.47%, SPY implying +0.49%, and QQQ implying +0.37%.

The major economic news for Friday includes Jan. Avg. Hourly Earnings, Jan Nonfarm Payrolls, Jan Participation Rate, Dec. Trade Balance, and Jan Unemployment Rate (all at 8:30 am). Major earnings reports on the day include ADNT, AON, BERY, CAH, EL, HRC, ITW, LAZ, LIN, REGN, SNY, SPB, TT, and ZBH all before the open. There are no earnings reports after the close.

With Stimulus now a done deal, the focus turns back to earnings, and the recent so-called social-media volatility. It is worht noting that CNBC is reporting that the recent short-squeezes may not have been as much due to retail traders as had been thought. No exact numbers were given, but insitutional volume in those names apears to be significant. That said, we know it was likely the retail player who bore the brunt of being left holding the bag during this week’s 80% selloff in GME. At any rate, earnings have been better than expected so far this cycle (on average) and with vaccinations now gathering steam, there is a hope for returning to normal again by the summer. That optimism has spilled into markets as the bulls have the momentum again.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember, nobody ever sustained a career by picking reversals…so don’t do it. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Earnings, Stimulus and Yellen Top News

February 4, 2021 by Ed Carter

The large-caps opened more or less flat and the QQQ gapped higher on the AMZN and GOOGL earnings from Tuesday night. After the open, the large-caps ground sideways most of the day and the QQQ sold off. This left the QQQ printing a Dark Cloud Cover candle while the SPY and DIA both printed indecisive Spinning Top or Doji candles. On the day, SPY was up 0.08%, DIA was up 0.12% and QQQ fell 0.40%. VXX fell over 5% to 17.25 and T2122 stayed in the overbought territory at 88.66. 10-year bond yields were strongly higher, closing at 1.139% and Oil (WTI) rose almost 2% to $55.82/barrel.

On the stimulus front, President Biden stuck to his guns on the need for a $1,400 additional relief check. However, he also said he was open to narrowing the number of people who qualify for a check. For their part, Congressional Democrats continue to move forward with the House passing its version of the plan (budget) Wednesday and the Senate voting on it Thursday. That is expected to pass on party lines and then reconciliation will proceed. Related to market volatility, the President has instructed Treasury Sec. Yellen to call all the regulators together to make sure consumers (retail traders) are not being abused by the brokerages limiting trading and forcibly selling margin-bought shares of the Reddit-push short-squeeze tickers.

In business news, AAPL is close to finalizing a deal with Hyundai-Kia to manufacture the future (2024, though it may well be pushed back) “Apple Car.” This has been a surprising potential partnership as Hyundai-Kia has always been at best a mid-market brand while AAPL has always positioned their brand as luxury and high-end. Elsewhere, MRK CEO announced he will retire effective June 30. In the airline industry, AAL has now warned 13,000 employees and UAL warned 14,000 that they may be furloughed again if federal aid ends on March 31 as is now planned. The airline industry is seeking $15 billion in additional aid to ensure jobs through September.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,150,457 confirmed cases and 461,930 deaths. However, the number of new cases continues the recent trend of falling and is back down to the pre-election level as the average new cases are now 136,003 new cases per day. Deaths are falling too, but still semain stubbornly high at 3,151 per day.

Globally, the numbers rose to 104,993,331 confirmed cases and the confirmed deaths are now at 2,280,652 deaths. In good news, the world’s average of new cases is down again to 496,969 per day (first time below 500k since October), but mortality remains high at 13,288 new deaths per day. In the UK, a trial is underway to mix the first and second doses of vaccine (for example PFE first shot, MRNA second shot) in an effort to see if more flexibility is possible, which would aid supply chain problems.

Overnight, Asian markets were mixed, but mostly red. South Korea (-1.35%), Shenzhen (-1.16%), and Japan (-1.06%) led the losses. However, India (+0.71%) and a few of the smaller markets were in the green. In Europe, markets are mixed on modest moves at midday. The FTSE (-0.39%) is down, while the DAX (+0.27%) and CAC (+0.20%) are modestly up at this point. As of 7:30 am, US Futures are pointing toward a modestly up open. The DIA (+0.04%) and SPY (+0.12%) are just on the green side of flat, while the QQQ (+0.43%) is implying a modest gain on the open.

The major economic news for Thursday includes Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 am), Dec. Factory Orders (10 am) and a Fed Speaker (Daly at 2 pm). Major earnings reports on the day include ABB, AGCO, APD, ALXN, ABC, AME, ARW, BLL, BSAC, BAX, BCE, BDX, BMY, CI, CLX, CMS, CMI, GPI, HSY, ICE, IP LEA, MRK, NOK, ODFL, PH, BTU, PENN, PM, DGX, RL, SNA, TPR, TKR, WEC, XYL, and YUM before the open. Then after the close, ATVI, CSL, CCS, COLM, DECK, DXC, F, FTNT, FTV, GILD, HIG, HUBG, LPLA, MTD, MCHP, MSI, NOV, OTEX, PTON, PFSI, POST, PRU, SKX, SNAP, TMUS, UNM, and YRCW all report.

Once again, earnings and business news are back to leading the news. That’s a good feeling. However, stimulus and vaccine news still can have some sway. With surprisingly good earnings reports so far this cycle, there is a lot of optimism for the future in the market. We’re not out of the woods, so beware of volatility. However, things look a lot more constructive than they have in a long time from an economic standpoint.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember, nobody ever sustained a career by picking reversals…so don’t do it. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline. Our job is to produce consistent gains…not catch lightening in a bottle. So, stick with your plan, maintain discipline and work your process.

Swing Trade Ideas for your consideration and watchlist: OSTK, BABA, WK, FOXF, FFIC, XES, VIAC, RIG, COMM You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Earnings and Bezos Plans to Step Down

February 3, 2021 by Ed Carter

Markets gapped up Tuesday and then put in a little morning rally as the bulls got on a run. However, the afternoon was a sideways grind and a selloff the last hour left us with upper wicks. The SPY put in a Spinning Top candle while the others printed large body with good sized upper wick candles. On the day, SPY gained 1.33%, DIA gained 1.59%, and QQQ gained 1.63%. The VXX fell 8.5% to 18.19 and T2122 rose well into the overbought territory at 89.77. 10-year bond yields rose significantly as money moved out of bonds ending at 1.096% and Oil (WTI) gained about 2.5% to $54.87/ barrel (the highest level since early March of 2020).

The social media short squeeze seemed to fall apart Tuesday as GME gapped down and the sellers piled in causing in a 60% loss on the day (after losing 31% on Monday). AMC saw similar action, losing over 41% after a big black candle of its own from the prior day. Silver suffered a similar reversal. So, the crusaders that were not quick and had not taken profits likely got hammered by the gaps and then also learned the lesson of discipline if they held hoping for a recovery.

After the close, major tech earnings announcements set the table for tomorrow. Among these are the Jeff Bezos is stepping down as CEO of AMZN, with his replacement taking over during Q3. This came after AMZN reported its first $125 billion revenue quarter and doubled earnings estimates ($14.09/hare vs. $7.16/share est.). GOOG also beat on the top and bottom lines In non-tech earnings, XOM more than tripled the analyst’s estimates, coming in a 3 cents per share with an average estimate of 0.9 cents expected.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 27,027,430 confirmed cases and 457,868 deaths. However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 142,524 new cases per day. Still, deaths remain stubbornly high at 3,179 per day. The White House COVID Response team announced they will begin shipping vaccines directly to 6,500 retail pharmacies (CVS and WBA) on Feb. 11. Coupled with the rapidly declining trend of new cases this offers considerable hope for Spring.

Globally, the numbers rose to 104,485,479 confirmed cases and the confirmed deaths are now at 2,265,049 deaths. In good news, the world’s average of new cases is down again to 512,467 per day, but mortality remains high at 13,716 new deaths per day. The WHO reported that there has been a 13% decline in new cases globally from last week. Mexico has approved the use of the Russian Sputnik vaccine. In India, a survey has found that over 56% of the city’s population has had COVID-19, based on estimates from 28,000 samples. That is a lot of cases considering the city 30 million residents and the Indian national case count is reported at only 10 million.

Overnight, Asian markets were mixed but mostly green. South Korea (+1.06%), Japan (+1.00%), and India (+0.97%) led the way. Meanwhile, China saw losses with Shenzhen (-0.87%) and Shanghai (-0.46%) paces the fall. In Europe, markets are mostly green so far this morning. The FTSE (-0.02%) is flat, while the DAX (+0.51%) and CAC (+0.25%) are modestly higher. As of 7:45 am, US Futures are pointing to a modestly green (and varied) open. The DIA is flat at +0.01%, the SPY implying +0.32%, and the QQQ implying +0.60% at this point.

The major economic news for Wednesday includes Jan. ADP Nonfarm Employment (8:15 am), Jan. Services PMI (9:45 am), Jan. ISM Non-Mfg. PMI (10 am), Weekly Crude Oil Inventories (10:30 am) and 4 Fed speakers (Bullard at 1 pm, Harker at 2 pm, Mester at 5 pm, and Kaplan at 6:05 pm). Major earnings on the day include ABBV, APTV, AVY, BIIB, BSX, CPRI, CNHI, EDP, HWM, HUM, LAD, MKL, PFGC, SC, SNDR, SMG, SNE, and SPOT all before the open. Then after the close, AFL, ALGN, ALL, UHAL, AFG, AVTR, CHNG, CTSH, CTVA, EBAY, ECHO, ENSG, THG, HI, IAC, KLAC, LNC, MET, MUSA, PYPL, QRVO, QCOM, VVV, and YUMC report.

Earnings will again lead markets today with the digestion of Jeff Bezos stepping down at AMZN and strong earnings from GOOG and AMZN also still being digested. The volatility caused by the social media short squeeze may have run out of steam. However, earnings offer their own kind of volatility. So, continue to be careful.

Remember to keep locking in your profits. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. It’s all about achieving trade goals and sticking to your discipline. Remember, our job is to produce consistent gains…not catch record-breaking one-day moves. So, stick with your plan, maintain discipline and work your process.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Stocks to Gap Up As Short-Squeeze Fades

February 2, 2021 by Ed Carter

US markets followed the world’s lead Monday gapping higher about a percent, but after the open the major indices mostly ground sideways amidst volatility. This ended with the large-caps printing indecisive candles (DIA a Harami Doji and the SPY a Spinning Top) to start the new month. While also having significant wicks, the QQQ was much more decisively bullish, putting in the best gain in 10 weeks. On the day, DIA was up 0.74%, SPY up 1.62%, and QQQ up 2.50%. The VXX fell over 5% to 19.88 and T2122 shot back up into the mid-range at 67.07. 10-year bond yields were flat at 1.071% after a volatile day and Oil (WTI) rose almost 3% to $53.68/barrel.

The social media pushed price action continued Monday as many brokerages reported outages at the open. Silver jumped 8.2% (11% intraday) as the massive volume and volatility continued in names like GME (-30% on a 52% range day) and AMC (flat on a 33% range for the day). In response, the CME raised the margin requirements for silver purchases. However, some brokers continue to slightly loosen restrictions on those tickers with fallout including that Robinhood was forced to raise another $2.4 billion in capital to use as collateral for trades in the high-volatility names and may need to raise another billion Monday night. However, overnight these moves may have lost steam as GME is down another 30% and Silver and AMC are also both down big.

On the stimulus front, Democrats took the first step toward a passage of the $1.9 trillion relief bill that would not require Republican support by introducing a budget resolution. This came ahead of the two-hour evening meeting between the President and the 10 Republican Senators who had sent him a $600 billion alternative to his plan. Both sides said the meeting was productive and talks would continue.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,911,375 confirmed cases and 454,213 deaths. However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 147,839 new cases per day. Still, deaths remain stubbornly high at 3,256 per day. Dr. Fauci told reporters Monday that even if you had the original strain of COVID-19, there is a high rate of reinfection from the new (UK, Brazilian and South African) variants now circulating. In addition, Democratic lawmakers from both Houses of Congress called on President Biden to increase the supply of N95 masks for the public and to distribute them at no cost via USPS and the local pick-up centers.

Globally, the numbers rose to 104,011,252 confirmed cases and the confirmed deaths are now at 2,249,880 deaths. In good news, the world’s average of new cases is down again to 522,508 per day, but mortality remains high at 13,869 new deaths per day. In the UK, the government has begun a door-to-door testing program in 3 of the hardest-hit regions of the country in an attempt to slow the surge from new variants. Meanwhile, in Asia, Japan has extended its state of emergency while simultaneously holding a press conference to say the Summer Olympics will be held as planned.

Overnight, Asian markets were strongly green again. India (+2.57%) led again, with Taiwan (+2.27%) not far behind, but strong gains were seen throughout the region. The same is true in Europe so far today. The CAC (+1.66%) and DAX (1.15%) are typical, but the FTSE (+0.42%) lags a bit. As of 7:30 am, US Futures seem to be following the rest of the world again and are pointing to a gap higher at the open. The DIA is implying +0.82%, the SPY implying +0.86%, and the QQQ implying +0.87% in an unusually consistent move at this point.

There is no major economic news for Tuesday, but there are 2 Fed speakers (Mester and Williams both at 2 pm). Major earnings reports for the day include BABA, ARCB, ABG, BP, BR, CTLT, COP, ETN, EMR, XOM, RACE, BEN, GPK, HOG, HCA, HUBB, IDXX, IMO, LII, MDC, MMP, MAN, MPC, MCK, MPLX, PFE, ST, SIRI, SYY, UPS, GWW, and WAT before the open. Then after the close, GOOGL, AMZN, AMCR, DOX, AMGN, ATO, CMG, CB, EA, FBHS, GOOG, LU, MHO, MTCH, PKI, SCSC, STE, SMCI, and VIAV all report.

It looks like the Bulls are off and running again this morning. It also appears the shine has come off the recent social-media short squeeze as GME, AMC, and Silver are all don big overnight. However, be very careful of volatility. Even with a strong day Monday, the market daily candles showed a lot of wick. In addition, heavy earnings reports before the open can still rock the boat. So, as tempting as it may be, we are not lottery ticket buyers or fad followers. We’re traders.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

US Markets Set to Follow Globe Higher

February 1, 2021 by Ed Carter

Markets gapped down on Friday and followed-through to the downside all morning. The afternoon saw a sideways grind as the majority of the trading had been done for the day. This action left all 3 major indices with ugly black candles that closed fairly close to the lows. On the day SYP lost 2.00%, DIA lost 2.05%, and QQQ lost 2.10%. The VXX gained 6.5% to 21.08 and T2122 fell well into the oversold territory at 7.04. 10-year bond yields went up to significantly 1.071% and Oil (WTI) lost only a fraction of a percent to $52.14/barrel.

Social Media, shorting funds, brokerage collateral calls from the trade clearinghouse, and politicians trying to make headlines on the subject continued to lead the talk on Friday. Many brokerages partially lifted the restrictions on buying the social-media darling stocks and again the phenomenal rallies continued. GME (+68%), AMC (+53%), etc. are a few examples of related moves on the day. However, other shorted issues have also been the target of the Redditers and this weekend such as SI (silver commodity) and DOGE (Dogecoin cryptocurrency) which both made moves as the social media phenomenon tries to spread its wings.

On the stimulus front, the Democrats have openly said they hope for Republican support, but if not, they intend to use the budget process (reconciliation) to pass the proposed $1.9 trillion relief package with just a simple majority. For their part, on Sunday, 10 GOP Senators tried to short-circuit the Democratic move by offering a $600 billion plan of their own in a letter to President Biden. There was no response yet from the White House and the Republican Senators will meet with the President Monday, but Senate Majority Leader Schumer scoffed at a proposal less than one-third of the existing proposal and Treas. Sec. Yellen reiterated Sunday that the benefits of acting BIG far outweigh the costs in the long run.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,767,229 confirmed cases and 452,279 deaths. January was the deadliest month with just under 100,000 COVID deaths in the US. However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 150,903 new cases per day. Still, deaths remain stubbornly high at 3,255 per day.

Globally, the numbers rose to 103,594,874 confirmed cases and the confirmed deaths are now at 2,239,275 deaths. In good news, the world’s average of new cases is down again to 528,616 per day, but mortality remains high at 13,870 new deaths per day. Portugal reached a critical point Sunday, with only seven open ICU beds in the whole country. As a result, they began flying critical patients to islands and other countries. AZN also ended its conflict with Europe as both sides announced that AZN will ship 30% more vaccine to the EU in Q1 than it had been planning and 75 million more doses in Q2. This avoids EU export restrictions on the AZN vaccine. In the UK, they have reached a milestone, announcing today that all “eligible” nursing home residents have “been offered” vaccine.

Overnight, Asian markets were mostly strongly green. India (+4.54%) and Indonesia (+3.50%) were clearly outliers, but Japan (+1.55%), Hong Kong (+2.15%), South Korea (+2.70%) are good indications of that region. In Europe, markets are green across the board so far today. The FTSE (+1.12%), DAX (+1.40%), and CAC (+1.36%) are typical of the continent. As of 7:30 am, US Futures seem to be following the rest of the world and are pointing to a gap higher at the open. The DIA is implying +0.84%, the SPY implying +1.09%, and the QQQ implying +1.13% at this point.

The major economic news for Monday is limited to Jan Mfg. PMI (9:45 am) and Jan. ISM Mfg. PM (10 am). Major earnings reports for the day include ON and OTIS before the open. Then after the close, CBT, KMPR, NXPI, VRTX, and WMG report.

It looks like the Bulls are off and running worldwide today. Couple this with the “social media-driven short-squeezing” and it may be a strong day for the market. Be very careful if you do anything like follow the short squeezers. Volatility cuts both ways and you don’t want to be left holding a long taken late when the floor drops out of a particular ticker. As tempting as it may be, we are not lottery ticket buyers or fad followers. We’re traders.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Remember to lock in your profits. It’s all about achieving trade goals and sticking to your discipline. Remember, our job is to produce consistent gains…not catch record-breaking one-day moves. So, stick with your plan, maintain discipline and work your process.

Swing Trade Ideas for your consideration and watchlist: LEVI, XLB, SQ, ADM, LYFT, XLF, BAC, MGM, UAA. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Redditers vs Shorts and Vaccine News

January 29, 2021 by Ed Carter

Markets gapped up a bit on Thursday (large-caps about half of a percent and QQQ about a quarter of a percent). Stocks then put in a rainbow day, slowly rallying all morning and then slowly selling off all afternoon. This left all three major averages printing Harami Inverted Hammer type candles with tiny white bodies. On the Day SPY was up 0.84%, DIA up 0.91%, and QQQ up 0.61%. The VXX fell a little over 3% to 19.79 and T2122 rose a bit, but remains in the lower mid-range at 37.50. 10-year bond yield rose sharply to 1.048% and Oil (WTI) fell over 1% to $52.26/barrel.

The talk of the day was the Reddit group raid on short positions such as GME. Brokers halted all trading on that ticker (as well as a few others), while the SEC, Congress and the Senate all announced investigations of market manipulation on the situation. In an odd bedfellow situation liberal Representative Cortez (AOC) and conservative Senator Cruz both bashed brokers for the GME trading freeze. On top of all this, customers sued some brokers for stopping them from continuing to buy the stock. At any rate, GME fell 40% on the day as a result of the halt on buying.

During the day, Speaker of the House Pelosi said the House will take the next step to pass the Covid Relief package next week, with or without Republicans. This will set up the reconciliation process that would allow Democrats to pass the $1.9 trillion relief package even without a single Republican vote. However, not a single Democrat could break ranks in the Senate for this to work. So, while most people hope for political reconciliation and it is hoped for, politics seems to be going on as usual.

Related to the virus itself, US infections continue to fall from recent extreme highs. The totals have risen to 26,338,607 confirmed cases and 443,769 deaths. However, the number of new cases continues the trend downward as the average of new cases is now down to 162,849 new cases per day. Still, deaths remain stubbornly high at 3,353 per day. In hopefull news, a large scale (30,000+ participants) tests of another new vaccine candidate from NVAX are now underway in the US and Mexico (see below).

Globally, the numbers rose to 102,132,931 confirmed cases and the confirmed deaths are now at 2,202,993 deaths. In good news, the world’s average new cases is down again to 562,866 per day, but deaths remain high at 14,273 new deaths per day. The fight between AZN and the EU continues over when and how much vaccine the EU will get. The European Commission published the contract between the 2 sides in an effort to pressure the company into earlier delivery. In a separate AZN story, the German Vaccine Commission has said that AZN did not test their vaccine on enough elderly patients (65+), and that being the case, there is not enough data to recommend the vaccine for that age group. Despite this, the EU is expected to approve the AZN vaccine for all ages. NVAX stocked soared late Thursday when reports came from the UK that very small-scale test data shows their COVID-19 vaccine is up to 89% effective. It was only 60% effective in a small South African test and only 45% effective in South Africa when patients who also had HIV were counted. Nonetheless, the UK data gives hope for another vaccine in the next few months. Meanwhile, data out of Israel suggests the PFE-BTNX and MRNA vaccines are both more effective than had been thought. Israeli data shows that less than 1% of people who were vaccinated with either vaccine have gotten COVID-19 since vaccination.

Overnight, Asian markets were strongly red across the board again. South Korea (-3.03%) was an outlier, but significant losses were seen in most places such as Japan (-1.89%), India (-1.32%), and Hong Kong (-0.94%). In Europe, we don’t see all red, but markets are definitely leaning to the downside so far today. The FTSE (-1.02%), DAX (-0.73%), and CAC (-0.87%) are typical and lead the way lower. As of 7:30 am, US Futures are also pointing to a gap lower at the open. The DIA is implying -0.45%, the SPY implying -0.58%, and the QQQ implying -0.83% at this point.

The major economic news for Friday includes PCE Price Index, Q4 Employment Cost, and Dec. Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), Michigan Consumer Sentiment and Dec. Pending Home Sales (both at 10 am). There are also a couple of Fed speakers (Kaplan at 4 pm and Daly at 5:25 pm). Major earnings reports on the day include BAH, CAT, CHTR, CVX, CHD, CL, LLY, ERIC, HON, JCI, LHX, LYB, PSX, ROP, SAP, SYF, and WY before the open. There are no major earnings reports after the close.

It looks like Bears are roaring worldwide on Friday. Mr. Market may be taking profits or getting flat ahead of the weekend. Either way, it looks like earnings and the “social media-driven volatility” are the big stories occupying the Market’s mind. So, continue to be cautious. The short-term trend is bearish, but the longer-term trend could hardly be any more bullish.

Follow the trend, respect support, and resistance levels, and don’t chase the moves you missed. Remember to lock in your profits. It’s all about achieving trade goals and sticking to your discipline. Remember, our job as traders is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Q4 GDP and Earnings On Tap

January 28, 2021 by Ed Carter

Markets gapped down Wednesday, on the heels of an ugly BA miss and the social media mob driving stocks in massive swings (like AMC which was up 300% in pre-market). After the open stocks then did some roller-coaster swings the rest of the morning. However, the afternoon saw another strong selloff that the Fed decision, statement, and press conference did nothing to slow down. All 3 major indices put in large, ugly black candles, but at least a rally the last half hour kept us from closing on the lows. On the say SPY lost 2.44%, DIA lost 1.98%, and QQQ lost 2.79%. The VXX gained almost 18% to close at 20.25 and T2122 (4-week New High/Low Ratio) fell down near the oversold territory at 23.76. 10-year bond yields fell sharply as traders chased safety, closing at 1.014% and Oil (WTI) was down slightly to $52.66/barrel.

During the afternoon, the Fed decided to hold rates near zero and Fed Chair Powell said FOMC would not taper bond purchases in the foreseeable future while reiterating that any talk of tapering is premature. He did say there was a potential for “transient inflation” and that what is really driving market (asset) prices isn’t monetary policy…it’s about expectations around vaccines and fiscal policy (stimulus). In that vein, House and Senate Majority Leaders (Democrats) seem to be giving up on President Biden’s desire for a bipartisan stimulus package, instead saying they are preparing to pass the Covid Relief bill without the support of any Republicans. While they say they want to win Republican support, Senator Schumer and Representative Hoyer said they believe they can get it done either way.

After the close, AAPL reported blowout earnings. It booked more than $111 billion in revenue for the 4^th Quarter and beat earnings estimates by 19% ($1.68 vs $1.41 est). FB also beat on earnings, but did warn of potential impacts from the AAPL privacy changes impacting FB ad targeting and thus ad sales. TSLA beat on revenue, but missed earnings, but it did still report a profitable quarter for the sixth straight time. However, they did say they expect 50% average annual growth in deliveries going forward.

Related to the virus itself, US infections continue to rage as the US. The totals have risen to 26,166,423 confirmed cases and 439,521 deaths. However, the number of new cases continues the recent trend of falling as the average new cases are now 166,164 new cases per day. Still, deaths remain stubbornly high at 3,370 per day. Dr. Fauci told reporters that current vaccines (PFE and MRNA) can be easily adapted and/or augmented with booster shots for new virus variants as needed. However, even as-is, he expects the vaccines to provide significant protection against current known variants.

Globally, the numbers rose to 101,534,385 confirmed cases and the confirmed deaths are now at 2,186,710 deaths. In good news, the world’s average new cases is down again to 573,783 per day, but deaths remain high at 14,272 new deaths per day. In the UK, the government says the latest lockdown is working and the country has seen positive test rates fall by 45%. However, two regions (London and the East-midlands) still are seeing a rising number of new cases. In Germany, the Health Minister told the public they should expect at least another 10 weeks of vaccine shortages.

Overnight, Asian markets were red and down significantly, across the board. Shenzhen (-2.82%), Hong Kong (-2.55%), and Indonesia (-2.12%) paced the losers, but no Asian exchange lost less than 1%. In Europe, markets are mixed, but lean to the downside so far today. Among the big 3 bourses, the FTSE (-0.76%) and DAX (-0.44%) are lower while the CAC (+0.09%) is just on the green side of flat. As of 7:30 am, US Futures are pointing to a mixed and modest open. The DIA is implying +0.21%, the SPY implying +0.05%, and the QQQ implying -0.42% at this point (ahead of GDP).

The major economic news for Thursday includes Q4 GDP, Dec. Trade Balance, Weekly Initial Jobless Claims, and Dec. Retail Inventories (all at 8:30 am) and Dec. New Home Sales (10 am). Major earnings reports on the day include FLWS, AOS, ATI, ADS, MO, AAL, AIT, BC, CMCSA, DOV, DOW, FLEX, JBLU, MMC, MA, MKC, MCD, NOC, NUE, NVR, ORI, PNR, BPOP, PHM, RCI, SHW, LUV, SWK, STM, TROW, TSCO, VLO, WRK, and XEL before the open. Then after the close, AJG, CE, EMN, JNPR, MDLZ, OLN, PFG, RMD, RHI, SIGI, SWKS, X, V, and WDC all report.

It looks like Mr. Market may be waiting on the Q4 GDP print before reacting this morning. That and a slew of earnings news are likely to be the drivers today. However, “social media-driven massive moves” is not only pushing around individual stocks in unheard of ways, it is also introducing major volatility and fear of systemic reaction from the big boys (who don’t like their short positions being attacked by non- Wall Streeters). So, exercise some caution today until the direction is clear and be wary of volatility.

As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. Lock in your profits when you achieve trade goals and stick to your discipline. Remember, our job as traders is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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