relief rally Archives - Page 106 of 143

Econ Data Plus Trade and TWTR Tension

May 28, 2020 by Ed Carter

After a 1% gap higher at the open and an immediate strong selloff, the bulls stepped in at 10:45 am and never looked back. The rest of the day was a steady climb to recover the losses of the morning and close the day at the highs. On the day, the SPY was up 1.48%, the DIA up 2.21%, and the QQQ up 0.55%. VXX fell again to 33.15 and the T2122 rose again to a very overbought 98.11. 10-year bond yields fell slightly to 0.685% and Oil (WTI) fell for a change, closing at $32.08/barrel.

During the day, BA announced they will lay off 7,000 workers this week, part of their plan to cut 10% of their workforce. The cuts come on the same day BA restarts the production of its fiasco 737 Max plane and are major order cancellations the company blames on the virus. In related news, the CEO of AAL told an investor conference they will not declare bankruptcy, because that would mean admitting defeat. However, AAL does plan a 30% reduction in staff.

In tech news, still furious over having his tweets fact-checked for a change, President Trump has lumped TWTR in with everything else he considers “fake news.” So, he is expected to order a review of a law protecting online outlets against liability from any lies spread by users. (I don’t know how that works exactly. It was passed by Congress and signed by a President. So, I’m not sure how a different President can order it changed. Still, he is expected to sign the review order today.) TWTR is obviously on the “enough lies” side of the argument, while FB is on the opposite side because they don’t want to check any of the posts made by their users.

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The other big non-economic story today is likely to be China. After the close, the House sent a China sanctions bill to the White House for signature. This comes on the same day Sec. of State Pompeo told Congress Hong Kong is not autonomous and no longer deserves special trade status. Finally, overnight China ratified the new security law (ahead of schedule to spite the US) that has caused the latest uproar. So, another round of trade war seems quite possible, if not likely.

On the Virus front, the global headline numbers are 5,813,289 confirmed cases and 357,896 deaths. The ECB said they expect the Eurozone economy to contract 8-12% for 2020. At the same time, their just proposed $827 billion stimulus fund has not been ratified (and will not be voted on for months) as it apparently has some opposition from countries fearing the tranfer of wealth from rich to poor countries (although notably not from the richest, Germany or France who had proposed the fund.)

In the US, we have 1,745,911 confirmed cases and 102,114 deaths reported to date. The Healthcare Cost Institute (an independent no-profit) released data Wed. showing that the number of daily deaths in the US between April 1 and now is 10% higher than the same days in previous years (2014-2019). On the legal side, President Trump and other Republicans have attacked and threatened lawsuits over the idea of mail-in ballots. Their claim is that it would increase the threat of voter fraud, while the counter-claim is that mail-in voting has been in-place for centuries in the US for many groups.

Overnight, Asian markets were mixed again as the US-China tension leads to trade war fears. However, Europe stocks are green across the board so far today. As of 7:30 am, US futures are mixed, with the President’s threat keeping the QQQ red while the S&P looks at a half percent gap up and the DIA at almost a percent gap up at the open.

Major economic news on Thursday includes Apr. Durable Goods, Q1 GDP, and Weekly Jobless Claims (all at 8:30 am), Apr. Pending Home Sales (10 am), Oil Inventories (11 am), and a FOMC Speaker (Williams at 11 am). Major earnings reports include ANF, BURL, CSIQ, DG, DLTR, MOMO, SAFM, SHOO, and TECD before the open. COST, CRM, DELL, DXC, JWN, MOD, MRVL, TCOM, ULTA, VMW, and WSM all report after the close.

A lot of economic data comes before the open today. It seems the bulls are in control, but US-China and TWTR-Trump tensions could dampen the mood of traders. Keep in mind that gap and fade (and yesterday re-rally) have been the norm. So, volatility remains the market constant. Keep your eye on the short-term chart and don’t hesitate to lock in profits. Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

Trade ideas for your watchlist and consideration: PLAY, CAKE, PENN, MU, SHAK, VALE, AAP, AG, SLV, OKE, ASML. 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.

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

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Bulls Looking to Gap Again

May 27, 2020 by Ed Carter

Markets gapped higher on hopes that a vaccine will have some sort of preliminary data from a small human safety trial in July. From there markets ground and faded the rest of the day, maybe on news of another ratcheting of tension between the US and China. Although reported over the weekend, Tuesday afternoon news that the White House is considering specific sanctions on China, which preceded the late-day fade. The SPY closed up 1.23%, the DIA up 2.19%, and the QQQ printed an ugly big black candle to close down 0.27% after its almost 2% gap higher to open. The VXX closed down slightly to 33.83 and T2122 rose again to the nose-bleed area at 96.32. 10-year bond yield rose to 0.695% and Oil (WTI) rose to $34.25/barrel.

During the afternoon Senate Majority Leader McConnell said Congress will “probably” need to pass another coronavirus relief bill. This comes after 10 days of declaring the Democrats bill DOA. Among key Republican demands are liability immunity for those businesses whose workers contract coronavirus at work. McConnell’s statement falls in-line with President Trump acknowledging the need for another round of stimulus.

On the Virus front, the global headline numbers are 5,709,551 confirmed cases and 352,753 deaths. In China, the city of Wuhan has completed 6.5 million tests in 9 days as fear of a second wave in the city are being taken seriously. Meanwhile, in Europe, France announced a $9 billion fund to aid its auto industry. Germany also extended their social distancing rules through June, but reduced travel restrictions to many countries at the same time. The EU unveiled the French/German plan to borrow $827 billion for a recovery fund to lend member states. This is in addition to the original bailout program which still has $600 billion of unemployment, loan and investment funds available.

In the US, we have 1,725,808 confirmed cases and have broken the 100k level in deaths with 100,625 reported to date. F was forced to pause production at a Kansas City plant after another employee was diagnosed and a “deep cleaning” of the plant must be done. CA also announced after the close that it will allow barbershops to open in most counties. On the other side of the country NY Governor Cuomo said they will move forward infrastructure projects like subway expansion, Train Station redesign, etc. in an effort to stimulate the economy.

Overnight, Asian markets were mixed, but tended to be closer to flat except for a very green India. Europe also shows a little red, but in general is leaning heavily to the green side, especially in the three major bourses (FTSE, CAC and DAX), which are up 1.5-2%. As of 7:30 am, US futures are also pointing to a mixed gap higher at the open (QQQ 0.7%, SPY 1.4% and DIA 1.65%).

Major economic news on Wednesday is limited to an FOMC Speaker (Bullard at 12:30 pm) and the Fed Beige Book (2 pm). Major earnings reports are also limited to RL and VIPS reporting before the open. Then ADSK, HPQ, NTAP, SPTN, TOL, and WDAY report after the close.

It seems the bulls are very hopeful about the economic recovery. So, we could see them run again today. However, don’t forget yesterday’s gap was met with a selling fade (especially in the QQQ). So, “gap and chop” remains real. Keep your eye on the short-term chart and don’t hesitate to lock in profits. Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

Trade ideas for your watchlist and consideration: M, NIO, UAL, DUST, DXC, UCO, CBOE, BP. 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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US Partiers and More Talk of Vaccines

May 26, 2020 by Ed Carter

Markets were generally listless on Friday as many traders had apparently already left for the long weekend. The major indices opened flat and that’s largely how they stayed all day. The only real take-away from the daily chart is that resistance held again. At the close, the SPY was up 0.19%, the DIA down 0.06%, and the QQQ up 0.35%. VXX was down slightly to 34.35 and the T2122 4-week High-Low Ratio climbed further into overbought territory at 90.98. The 10-year bond yield fell slightly to 0.657% and Oil (WTI) fell slightly to $33.25/barrel.

As had been predicted, HTZ filed for bankruptcy over the weekend. The White House also threatened US sanctions on China and revocation of Hong Kong’s special trade status with the US. This was in reply to a new Chinese security law which impacts Hong Kong. China responded with a statement this means we are entering a new cold war. The latest development has both sides now blocking flights from the air carriers of the other country, including DAL and UAL.

On the Virus front, the global headline numbers are 5,611,540 confirmed cases and 348,328 deaths. Brazil has become the new epicenter of the pandemic with a runaway infection rate and now has the second most number of cases to the US. As a result, over the weekend the US had to impose travel restrictions on people who are from or who have visited Brazil. Elsewhere, an ex-officio member of the ECB said they are likely to add more stimulus on top of the recently announced $817 billion plan. (The next ECB meeting is on June 4.) In Germany, Lufthansa received a $10 billion bailout from the government, which also gives the German government a 20% stake in the airline. Finally, the UK also began easing Monday.

In the US, we have 1,706,226 confirmed cases and 99,805 deaths. All 50 states have reopened at least partially now. On Sunday, data showed that for average daily new case counts, 19 of the states have rising rates, 23 states are holding relatively steady, and 8 states have rates trending downward. Meanwhile, Boston Fed Pres. Rosengren announced the Fed will begin its lending program to mid-sized companies over the next 2 weeks. This is similar to the PPP loan/grant program, but focused on larger companies (15,000 employees or less). This came as a White House Economic Advisor told reporters the US Unemployment rate may still be over 10% in November.

Overnight, Asian markets were strongly green as vaccine hopes overrode fear from China/US tensions. Europe is also green for the most part, but not quite as strongly so far today. As of 7:30 am, US futures are also pointing to a 1.5%-2% gap higher at the open.

Major economic news on Tuesday is limited to conf. Board Consumer Confidence and April New Home Sales (both at 10 am). Major earnings reports are also light with AZO, BNS, BAH, and ESLT reporting before the open. KEYS and VSAT report after the close.

Everybody feels good after a long weekend and that rings true for the markets as well. With hope for a vaccine and seeing crowds shopping and partying again all weekend, Tuesday is looking like a bullish start to the week. However, the “gap and chop” has been real for months. There is also no evidence for any of the vaccines (just hope that we may see some evidence in several months). And while America revels in its freedom, it does so despite the best advice of experts (not because of it). So, the only guarantees are uncertainty and volatility. Watch the short-term chart and don’t hesitate to lock in profits. Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

Trade ideas for your watchlist and consideration: INSG, TWLO, ETSY, RRC, AR, TFX, EBAY, BCRX, GRUB, ILMN, DXCM, KMX, CSX. 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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Memorial Day Weekend Ahead

May 22, 2020 by Ed Carter

The weekly jobless claims came in higher than expected Thursday (yet still slightly trending down from the previous weeks). This caused a flat open and down day as resistance held again. The QQQ faired worst among the major indices, falling 1.09% (and printing a Bearish Engulfing candle). Meanwhile, the SPY was down 0.69%, and the DIA down 0.29% (both on indecisive candles). The VXX rose slightly to 34.68 and T2122 pulled back a bit to 82.79. 10-year bond yields were unchanged at 0.68% while Oil (WTI) climbed again to $33.91/barrel.

On the Virus front, the global headline numbers are 5,218,711 confirmed cases and 335,072 deaths. Latin America has overtaken the US and Europe as the region with the most new cases for each of the last three days. Brazil, Peru and Mexico are the worst-hit countries in that region. In China, researchers are finding that in the new Northern China outbreak, the virus is acting differently. Patients there are carrying the virus for a longer period before showing symptoms (raising the amount of asymptomatic spread threat). In addition, they are taking longer to test negative after the first symptoms appear, which raises the amount of care needed. Patients also have more localized damage (in the lungs) and less damage to heart, kidneys, and stomach. Ominously, this all implies that mutations may be underway. We just don’t know if any mutations would be favorable or unfavorable for humans yet.

In the US, we have 1,621,333 confirmed cases and 96,363 deaths. All 50 states now have at least a partial reopening, and as expected about a third of states are showing an increase in new daily cases. However, about 14 states have also shown decreases. Bear in mind that both of these numbers could be deceiving, because there is a significant lag between infection and diagnosis, as well as between testing and state-reported results. After hours, the President says he expects a second wave of the virus, but regardless of what comes he won’t close the economy back up…”we’ll fight fires” instead.

Overnight, Asian markets were deeply in the red as China plans to impose new security restrictions on Hong Kong and the US continues to escalate tensions with China. Europe is at least partially mixed, but all the major bourses are in well into the red so far today. As of 7:30 am, US futures are also pointing to a half percent gap lower across the board.

There is no major economic news Friday, in front of the Memorial Day weekend. Major earnings reports are also limited to BABA, BKE, CAE, DE, and FL, all before the open.

The bulls refuse to back down, but resistance is proving hard to break at least for the large-caps. With the lack of data and earnings drivers on Friday and with the long weekend ahead, we may see indecision continue or a move on lower volume. Keep in mind that the bears have had no teeth for a couple of months and the bulls no fear. However, the “gap and chop” has been real. So, the only guarantees are uncertainty and volatility. Watch the short-term chart and don’t hesitate to lock in profits. (Put a little money in your pocket for the weekend.) Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

No Trade ideas for today. It’s Friday (payday) and we have a long weekend ahead. Put some money in the bank while you can. 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

Bulls Looking to Gap Up Again

May 20, 2020 by Ed Carter

On Tuesday, the bulls couldn’t find the energy to get past the bad news that the MRNA coronavirus vaccine trial did not actually produce the data required to be pass a Phase 1 trial. So, the Monday enthusiasm seems to have been very premature based on just company good feelings. As a result, all 3 major indices failed their breakout levels and printed bearish candles closing at the lows. The SPY was down 1.03%, the DIA down 1.51%, and the QQQ down just 0.25%. The VXX gained to 36.03 and T2122 fell a bit down to 82.05. 10-year bond yields fell to 0.688% as money bid up bonds. However, Oil (WTI) managed to gain to $32.36/barrel.

The Congressional Budget Office announced that it projects GDP to drop 38% in Q2, which is inline with Wall Street estimates. Fed Chair Powell also testified before Congress, essentially saying they will spend whatever it takes to put the economy right. Treasury Sec. Mnuchin testified as well, saying the Administration is fully prepared to provide more money and take more risks (including losses) on business bailouts.

On the Virus front itself, the global headline numbers are 5,006,675 confirmed cases and 325,322 deaths. The UK said it will need massive participation from Brits in order to get their summer harvest done as they expect only about a third of the foreign workers who normally perform the harvest. In Europe, Germany has agreed with neighboring countries to being slowly easing border restrictions.

In the US, we have 1,571,131 confirmed cases and 93,558 deaths. Johns Hopkins University reported that 17 states have seen at least a 10% increase in new case rates in the last week. However, 16 states have also seen a drop of at least 10% over the period. This comes as every state will be at least partially open as of today.

Overnight, Asian markets were mixed with China down while Japan and South Korea were up. In Europe, we also see a mixed story at this point. France and Belgium are down, but the UK and Germany are just on the green side of flat now. As of 7:30 am, US futures are pointing to more than a 1% gap higher as Lowes reported same-store sales grew over 11% and it beat on both the top and bottom lines.

The major economic news on Wednesday is limited to Oil Inventories (10:30 am) and FOMC Minutes (2 pm). Earnings are limited to ADI, EV, FRO, LOW, MCK, RCL, and TGT before the open. Then CPRT, EXPE, LB, SNPS, and TTWO report after the close.

Based on Tuesday’s candle, we might expect a lower-low today and all 3 major indices do remain near a resistance/breakout point. However, the bulls have a strong tendency to run hard in spite of any bad news and the bears haven’t been able to string together a sustained pullback for two months. As said above, markets are looking to gap higher again. So, all we can do is watch the short-term chart and then trade the chart in front of you. Don’t chase or predict, and remain cautious about longer-term swing trades.

No Trade ideas for 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

Powell Has Spotlight Again Today

May 19, 2020 by Ed Carter

Bulls were large and in-charge Monday as futures came into the morning confident on Fed Chair Powell’s Sunday interview remarks. Then, during pre-market, MRNA announced it had positive results in an early-stage human test of a vaccine. That was all the bulls needed to hear to run full-speed ahead. A 2.5% gap up was followed-up by a morning rally. From about 11:30 am, prices drifted very slightly bullish right up to the last minutes. However, in those last moments of the day profit-takers jumped in to pull price back down to the morning highs. On the day, the SPY closed up 3.05%, DIA up 3.81%, and QQQ up 1.86%. The VXX was down sharply to 34.24 while T2122 closed well into the overbought territory at 93.40. The 10-year bond yield was up strongly to 0.726 as money flowed out of bonds and Oil (WTI) had another sharply higher day closing above $30 for the first time since mid-March at $32.74/barrel.

On the Virus front itself, the global headline numbers are 4,911,720 confirmed cases and 320,454 deaths. In Europe, France and Germany jointly proposed a $550 billion fund, set up on loans secured by all 27 EU-member countries, to pay for grants to sectors and regions most economically impacted by the pandemic. Belgium, France, Poland, and Denmark also introduced legislation to prevent any company with a presence in a “tax haven” from receiving any state aid. Separately, France reiterated that it will proceed with its “3% digital tax” regardless of what the rest of the world does (no delay from virus impacts).

In the US, we have 1,550,539 confirmed cases and 91,985 deaths. WMT earnings were way up on a massive e-commerce increase. MRNA decided to capitalize on the good news cycle from announcing a “positive” vaccine trial by offering $1.34 billion in new stock (at $76/share).

Overnight, Asian markets were strongly green, as they followed the US on MRNA and Powell news from Monday. In Europe, we see a different story, where markets are mixed, but leaning much more heavily to the red side (especially the 3 big indices). As of 7:30 am, US futures are flat, sitting just on either side of break-even for the open.

The major economic news on Tuesday is limited to Apr. Building Permits and Apr. Housing Starts (bot hat 8:30 am), and Fed Chair Powell testifies and Fed Voter Kashkari speaks (both at 10 am). Earnings are also very light with only AAP, HD, KSS, and WMT reporting before the open. Only NTES reports after the close among majors.

Fed Chair Powell will likely call the tune again today. His testimony before Congress is expected to confirm that the Fed has the bulls back. He is also likely to reiterate that he feels Congress and the White House need to provide more stimulus on the fiscal side. However, keep in mind that despite Monday’s strong day, the 3 major indices all sit right at a resistance/breakout point. So, we are not quite free of the sideways range that has controlled markets the last few weeks. Still, the bulls have the momentum now. Watch the short-term chart in front of you. Don’t chase or predict, and remain cautious about longer-term swing trades.

Trade ideas for your consideration and watchlist: SGRY, CREE, WW, CCXI, ST, XPER, EVOP, IMGN, JNUG, GLUU, IMMU, NFLX, TPTX, CHWY. 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

Powell Sees Steady 2nd Half Recovery

May 18, 2020 by Ed Carter

Prices gapped 1% lower at the open again Friday, this time on horrible April Retail Sales. However, the bulls stepped in again and led a day-long rally that closed near the highs. The result was a minimal day with the SPY up 0.46%, the DIA up 0.07%, and QQQ up 0.65%. VXX fell slightly to 36.60 and the T2122 (4-week High =-Low Ratio) rose back to 68.25, still in the mid-range. 10-year bond yields climbed to 0.644% as money sought bond shelter a bit. Oil (WTI) continued its strong rally, up over 7.5% again to $29.65/barrel. For the week all 3 major indices were down.

After the close Friday it was announced that BRKB (Warren Buffett) had reduced its holdings of GS by 84%and JPM (down only 3%), while boosting holdings of PNC. They also exited positions in TRV and PSX. In other business news after the bell, JCP filed for bankruptcy protection as expected and now has 2 months to reorganize.

The House passed the Democrats $3 Trillion Relief/Stimulus bill Friday evening. The White House and Senate Republicans declared it DOA, but the White House also said it would support some new stimulus bill. So, politics as usual. Then on Sunday Fed Chair Powell told CBS that jobless rate could top 30%. However, and assuming there is no second wave of virus, he foresees a steady economic recovery in the second half of 2020, but full recovery won’t happen until there is a vaccine. He also mentioned a need for more fiscal relief/stimulus, that the Fed will not consider negative rates, and that the full-recovery timeline is likely 2021. Treasury yields overnight suggest the market liked what Powell told 60 Minutes and may rally.

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Going into the Week, market sentiment is confused at the moment (unless Powell’s words tipped the scale). The AAII reported over 50% of individual investors who respond to their weekly survey are bearish (their market outlook over the next 6 months) for the third time in fourth weeks. Fund Tracker also reports money flowed out of equity funds last week. However, the Put/Call ratio shows a decline in defensiveness and the survey of Active Investment Money Managers shows a neutral to slightly bullish stance.

On the Virus front itself, the global headline numbers are 4,820,347 confirmed cases and 316,967 deaths. In an interesting move, India has prohibited bankruptcy filings for a year in addition to raising the insolvency threshold 100-fold. Japan reported that it had slipped into a recession, even before COVID-19, posting a 7.3% GDP decline in Q4 of 19 and a 3.4% contraction in Q1 of 20. Finally, later this morning France and Germany will announce a joint initiative covering a wide range of topics, including economic recovery.

In the US, we have 1,527,951 confirmed cases and 90,980 deaths. Texas’ daily new case numbers has started trending higher again as it opens. However, some of the other “early opener” states like Georgia are not reporting a change in trend. AAPL is opening many of its retail stores this week, with visitors required to wear masks and have their temperature checked prior to entry. On the government front, the US is considering changing the PPP loan rules to allow small businesses to use more (all?) of the money for things other than payroll, while still being forgiven and also giving them longer to obtain the money.

Overnight, Asian markets were mixed but leaned toward the green. In Europe, we see green across the board so far today. As of 7:30 am, US futures are following Europe with markets pointing toward a 1%-1.5% gap higher at the open.

There is no major economic news on Monday. Earnings are also very light with only IGT, SE, and SOHU among large premarket reports. After the close only BIDU, FTK, and IQ report among large companies.

Jerome Powell may have come to the Bulls rescue again with his Sunday interview. Futures turned decisively at that point. However, for the last few weeks markets have been chopping sideways and we are still well within that range. So, there is no overall trend, but very short-term the bulls seem to have the ball. High volatility remains in place. Keep watching the short-term chart in front of you. Don’t chase or predict, and remain cautious about longer-term swing trades.

Trade ideas for your consideration and watchlist: CGC, MJ, PINS, OKE, NVAX, CVET, CIEN, TSCO, ILMN, ORLY, LOPE. 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

Markets May Press Pause for Weekend

May 15, 2020 by Ed Carter

Prices gapped 1% lower at the open on the back of a worse-than-expected initial jobless claims number (3mil vs 2.5mil expected). However, after the dust settled for 30 minutes the rest of the data was a strong, steady climb with prices closing near the high. Technically, the SPY and especially DIA seemed to find support off the 50sma and bounced. However, it is hard to say any of the 3 major indices broke their now 3-day downtrend. For the day, SPY gained 1.22%, DIA gained 1.69%, and QQQ gained 1.14%. The VXX was down a bit to 37.67 and 10-year bond yields fell to 0.62%. Oil (WTI) rallied nearly 10% again to close at $27.73/barrel.

The cause of the day-long rally seems to be two-fold. First, even though new initial jobless claims were worse than expected, the continuing jobless claims only rose by less than half a million. This means that although almost 3 million people filed for unemployment this week, over 2.5 million also went back to work. Secondly, in the inverse logic of markets, bad numbers mean it is more likely we will see more stimulus from both the Fed and fiscal sides of government. This was reinforced when Fed voter Kashkari told CBS that Congress will have to send Americans more money as he sees the recovery taking 12-18 months.

On the Virus front itself, the global headline numbers are 4,546,070 confirmed cases and 303,863 deaths. In Germany, the government reported the worst Q1 contraction since the 2008 Financial Crisis and projected a 10% decline in GDP for Q2. The Russian outbreak continues to run wild as they reported another 11,000 cases again. In Asia, the virus worry is limited to a few hotspots. However, India reported another 4,000 new cases and China very recently locked down several cities/provinces again.

In the US, we have 1,457,649 confirmed cases and 86,912 deaths. Among the fallout, JCP is expected to file for bankruptcy today. CNBC reports that the White House would now likely support a new round of stimulus checks as proposed by Democrats, but this is not an official announcement and only based on sources. The House is set to vote on the Democrat’s $3 Trillion bill, but both the Republicans in the Senate and the White House had called it “DOA.” So, again, this all seems to be negotiating tactics in the political theatre.

Overnight, Asian markets were mixed, but the red boards were not that far below break-even. In Europe, the same is true, but leaning even more to the green side as France and Finland are the only red at this point in the day. However, as of 7:30 am, US futures are in the red, now pointing to a 0.70% gap lower at the open.

The major economic news for Friday includes Apr. Retail Sales and NY Fed Mfg. Index (both at 8:30 am), Apr. Industrial Production (9:15 am), Mar. Business Inventories, Mar. JOLTS, Michigan Consumer Sentiment and Mar. Retail Inventories (all at 10 am). The only major earnings on tap for Friday are JD, PBF, and VFC all before the open.

A bounce off of support helped the bulls Thursday. However, they were unable to break the 3-day downtrend that has formed this week. While the bulls are not likely to accept the setback for long, it is Friday and a pause to absorb weekend reopening news might not be a bad thing. Weekend news on the next round of stimulus and some feedback on new cases during reopening may be something traders want in their pocket before making more big bets. So, the short-term pullback continues and high volatility remains in place. Keep watching the short-term chart in front of you. Don’t chase or predict, and remain cautious about longer-term swing trades.

No trade ideas 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.

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Market Waits on Jobless Claims

May 14, 2020 by Ed Carter

Markets were unable to recover from the gloom (reality?) Fed Chair Powell spread early in the day. So, the bears had their second day in charge. The SPY fell 1.77%, the DIA fell 2.21%, and QQQ fell 1.25%. VXX climbed another 10% back to 39.65 and oddly the T2122 4-week high-low ratio climbed back into overbought territory at 85.37. The 10-year bond yield was down slightly to 0.654% and Oil (WTI) rose again to $25.70/barrel.

As mentioned, Chair Powell painted a gloomy picture of the economy and, as was expected, he also knocked the idea of negative rates as an unsettled policy without proven benefits while it is proven that it hurts banks and their ability to lend. GS later made comment on Powell’s testimony saying it fears a second-wave of virus infections and, in that case, they feel the Fed would consider negative rates. However, like Powell, they also don’t think that action would be very helpful to the economy. Later, analysts began saying, based on the gloomy picture the Fed members are painting, they now expect the Fed to announce another large QE program at or before its June meeting (which markets would love).

On the Virus front itself, the global headline numbers are 4,452,777 confirmed cases and 298,737 deaths. In Russia, the runaway spread continues with another day of record new cases (raising it to have the second most cases to the US). The EU also told its member nations to only receive tourists this summer if their situation allows, including current case trends, having enough testing/tracing capacity, etc. This was significant because tourism accounts for 10% of the EU’s GDP. Meanwhile, Japan says a treatment trial using recovered patients’ plasma will begin in July.

In the US, we have 1,430,348 confirmed cases and 85,197 deaths. In business, AMZN said it will rollback wage increases and cut overtime rates on May 30 as it feels the hazards have now passed. (An interesting claim since it also announced separately that it is now designing and will sell face shields for frontline workers.) However, in a good sign, MA announced it is seeing signs of improvement in consumer spending as charges were down 6% from a year ago, but up 16% from a month ago.

Overnight, Asian markets were all significantly in the red. In Europe, the same is true will all major markets even more deeply red so far today. As of 7:30 am, US futures are waiting on the jobless claims number, but are on the red side of flat, now pointing to a 0.20%-0.40% gap higher at the open.

The major economic news for Thursday is limited to Apr. Imports / Exports and Weekly Jobless Claims (both at 8:30 am) and 2 more Fed speakers. Major earnings reports are also very light with JWN and NCLH reporting before the open and AMAT, CVET, and NLOK reporting after the close..

A small dose of reality has hit the bulls in the last couple of days. Those losses make the last month look both choppy and range-bound in retrospect. Don’t expect this setback to last long as every day more businesses and areas of the country reopen. However, the prospect of a second wave caused by poor adherence to guidelines will loom for months, even if it does not materialize. So, the short-term pullback continues and volatility remains high. Continue to focus on the short-term chart in front of you. Don’t chase or predict, and remain cautious about longer-term swing trades.

Trade Ideas for your consideration and watchlist today: No trade ideas 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

Powell to Speak as Congress Haggles

May 13, 2020 by Ed Carter

Markets were rattled as they digested CPI falling in the largest drop since the 2008 financial crisis. (Fear being that the Fed may feel the need to act to curb deflation, thus turning off the faucet.) The SPY also failed at previous high resistance for the third straight day. By day end, all 3 major indices printed large, ugly Bearish Engulfing candles. On the day the SPY fell 2.03%, the DIA fell 1.90%, and the QQQ fell 2.09%. The VXX jumped 10% as you’d expect to close at 35.95. At the same time, 10 10-year bond yield fell to 0.667 and Oil (WTI) climbed to $25.34/barrel.

During the day there was a fair bit of news out of Capitol Hill. St. Louis Fed President Bullard warned of business failures on a grand scale (if the shutdown persists) and Dallas Fed President Kaplan said there will be a need for more fiscal stimulus as jobless rates continue to rise. On cue, House Democrats put forward another $3 trillion relief bill, which includes $1 trillion for state and local governments, $1,200 more per person in family relief, $200 billion for essential worker hazard pay, etc. However, this bill was known to be dead on arrival in the Senate and was primarily meant to force Republicans to put their own ideas on paper to start negotiations. Dr. Fauci (NIH) also testified that he is concerned that if states open too quickly the country risks multiple outbreaks and a setback in the economic recovery.

In business news, BA released word that customers had canceled orders for another 108 of their 737 Max planes in April. The company still has a 4,800-plane backorder list, but cancellations are accelerating and BA said they expect one of the major US Airlines (their customers) to declare bankruptcy before year-end (likely voiding that carrier’s orders). Elsewhere, 13 state Attorneys General have called for AMZN to provide data on employees who have tested positive or died, while asking the company to reinstate its policy of unlimited unpaid time off and sick leave related to the virus.

On the Virus front itself, the global headline numbers are 4,361,654 confirmed cases and 293,287 deaths. In Europe, Italy reported a second straight day of uptick in new cases. Spain announced it will keep borders closed until July. France also extended its state of emergency through July 10, but easing measures remain in place. In the UK, Finance Minister told Parliament that they project the country will fall into a significant recession this year but also reported a contraction that was less than expected last month. Meanwhile, in Asian, India has passed a $266 billion virus relief bill and released 17,000 prisoners to curb prison outbreaks. Finally, China is scrambling to retest the entire city of Wuhan to curb its new outbreak. They said they will test all 11 million residents over the next 10 days. They have also locked down cities in the North (near North Korea) where clusters of new cases have been found.

In the US, we have 1,408,636 confirmed cases and 83,425 deaths. New Orleans announced that face coverings will be mandatory when they start to reopen on Saturday. Meanwhile, Los Angeles announced it expects to remain under lockdown for at least a few more months. Finally, Illinois reported over 4,000 new cases on Tuesday, a record high. However, this may be due to also performing a record number of tests (29,000) on the day.

Overnight, Asian markets were again mixed. The moves were smaller again as well, with the exception of India which was up 2% on their stimulus news. In Europe, markets are strongly red across the board at this point in the day. As of 7:30 am, US futures are on the green side of flat, now pointing to a 0.20%-0.50% gap higher at the open.

Fed Chair Powell speaks today (9 am) and is expected to shut down any talk of negative rates even after the President tweeted again that the US should have negative rates. However, the other major economic news for Wednesday is limited to Apr. PPI (8:30 am) and Oil Inventories (10:30 am). Major earnings reports are also light with SNE and ARCO reporting before the open and CSCO, FLO, STE, and OII reporting after the close.

The trend remains bullish, but ugly candles Tuesday prove that overhead resistance is significant. Markets seem to be pausing as analysts and experts continue to express fear over the strength of the economic recovery and the risks reopening poses. So, a pullback may be in order short-term. Either way, we are likely to keep seeing volatility every day. So, focus on the short-term chart in front of you. Don’t chase and remain cautious about longer-term swing trades, unless you can take some short-term pain.

Trade Ideas for your consideration and watchlist today: No trade ideas 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