Road to Wealth Archives - Page 97 of 127

Volatility and Virus News Galore

February 28, 2020 by Ed Carter

Volatility reigned Thursday as markets gapped lower, rallied hard and then fell again even harder. It is a sure bet that a slew of reversal-pickers had their heads handed to them during those intraday swings. On the day the SPY closed down 4.49%, the DIA down 4.54%, and the QQQ down a whopping 5.01%. All three closed on their lows and printed big black candles with large upper wicks. As you’d expect, the VXX spiked to 22.00 and bond yields fell to new all-time lows for a second straight day.

It’s impossible to overstate the dominance of coronavirus in markets, media, and public discussion. The headline numbers are now 84,000 confirmed cases and about 2,900 deaths globally. However, these numbers are questionable with anomalies like Iran, where 26 are reported dead against only 245 cases has led to skepticism. (An 11% mortality rate would be extremely alarming compared to the 3% death rate in China.) Among other headlines that jerked markets around were GS saying that it has lowered its 2020 forecast for the growth of US company earnings to zero. This is a dramatic break from the Wall Street consensus of 7% earnings growth for 2020.

The related resource concern in the US has also escalated. The Dept. of HHS announced Thursday that 40 labs nationally can now test for the virus, but 93 more labs could also be equipped next week. However, shortly after the CDC increased the pool of people who should be tested to include not just those who have been to China, but also travelers from South Korea, Japan, Italy, and anyone with major respiratory issues. Meanwhile, the Gov. of California said his state has 8,400 people under observation because they traveled from China. However, they have less than 200 test kits in the entire state. So, they simply cannot test even a fraction of those 8,400, let alone those who have been to Japan, South Korea or Italy…or the people they have contacted since returning.

Then overnight, a new angle was reported by the government of Hong Kong, who found the first case of suspected human to animal transmission. In this instance, the pet dog of a previously confirmed coronavirus case has now tested as “weakly positive” for coronavirus. This raises the specter of another means of community transmission.

Asian markets took another beating and were deeply in the red again Friday. Europe is also once again down sharply across the board at this point (more than 3%). As of 7:45 am, U.S. futures are pointing to a one to one-and-a-quarter percent gap lower.

Friday’s major economic news includes Jan. Core PCE, Jan. Trade Balance, Jan. Personal Spending, and Retail Inventories (all at 8:30 am), Feb. Chicago PMI (9:45 am), Michigan Consumer Sentiment (10 am), and another Fed speaker. On the earnings front, AES, BAX, and FL all report before the open.

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The bears continue to pile on. While some people have made a quick buck in this market, a ton of traders have been sliced and diced by the whiplash. Markets are quite oversold but can remain that way longer than most of us can take the pain of being too early. As we head into a weekend of headline risk, we all need to consider how much risk we want to carry through that period.

Remember that today is a completely new and different day. If you let your emotions lead you into trying to get back to even (or get rich) quickly, you are likely to get punished. Keep repeating the mantra: no chasing….no reversal picking…no bottom/top picking. Trading is a business, cash is a valid position, and consistent, effective trading is the goal.

Friday is payday. Sorry but in front of the weekend and especially with current headline risk, there are no trade ideas 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

🎯 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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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service

First US Virus Case of Unknown Origin

February 27, 2020 by Ed Carter

The bears set another bull trap Wednesday. After another gap higher, markets saw follow-through to the upside. By 11am all the major indices were up close to 2%. However, about 11:30am the trap door opened and a selloff lasting the rest of the day ensued. During this selloff, the 10-year Treasury Bond fell to a record low yield (1.3%) as traders flocked to safety. At the close, the SPY was down 0.37%, the DIA down 0.35%, but the QQQ managed to stay green at up 0.52%. All three printed black candles with large upper wicks. However, at the same time, the VXX fell 2% to 18.93. Overall, the recent downturn has taken the indices down about 9-10% from the recent all-time highs.

Coronavirus continues to be the main story and driver of the markets. The headline numbers have now risen to 82,500 confirmed cases and over 2,800 deaths globally. The W.H.O. reported that Wednesday was the first time there were more new cases reported outside China than inside. However, many governments (including China) are suspected of under-reporting cases and deaths. It could also be that the China/World ratio is just indicative of testing outside China finally beginning to ramp up.

Among the major virus news items was the first US case with no known connection to overseas. (This person had not traveled abroad and does not know anyone who has traveled abroad recently. This likely means they contracted the virus from someone else who contracted the virus from a third person who had some connection with one of the early outbreak countries.) Also of importance, is that in Japan the first patient who had fully recovered and tested negative for many days has now tested positive again. So, either reinfection is possible or the best-known tests will give negative readings while the virus is actually still active.

In contrast to widespread public and market concerns, the President was reportedly upset that US markets were down over this issue. He publicly scolded both the press and a CDC official (who told Americans to prepare for disruption to their daily lives) for needlessly spreading fear. Later at his press conference, he said the risk to Americans is very low, his administration’s precautions have been extremely successful, and the US is number one in the world in terms of preparation for a pandemic. However, he did appoint V.P. Pence to act as Czar for the crisis. In a somewhat contradictory fashion, the health professionals who then spoke went on to say that spread in the US is likely although they “hope” to have a treatment regime ready for distribution “sometime soon.” (That potential treatment regime is currently in a one-patient test.)

In terms of impact, more companies (including MSFT) dropped or lowered guidance again overnight. In addition, schools, sports events, and public gatherings have been canceled or outright banned across many nations. The head of China’s Central Bank also said they are “very worried” about the impact on the global economy. Germany’s Health Minister said his country is headed for an epidemic and that quarantine does not seem to be effective. Meanwhile, several other European and Nordic countries (i.e. Austria, Belgium, Croatia, Finland, Netherlands, Norway, Sweden) all reported their first cases. In South America, Brazil also reported its first case.

In an example of the related contradiction/confusion, biotech company MRNA released a statement saying it has already sent a vaccine to the government seeking approval for a human trial. However, at the evening press conference, the head of the N.I.H. vaccine testing said that no vaccine will be ready for human tests until possibly May (late April if we ere lucky) and then would require 12-18 months of testing before proven safe and at least partially effective enough for release. He added that they expect the virus to return next year and he hopes they will have a vaccine ready by then.

Overnight, Asian markets were in the red again. Europe is also down sharply across the board at this point. As of 7:45 am, U.S. futures are pointing to between a 1.3 to 1.7 percent gap lower. So, it looks like a bumpy open, to say the least.

The major economic news for Thursday includes Jan. Durable Goods Orders, Q4 GDP, and Weekly Initial Jobless Claims (all at 8:30 am), Jan. Pending Home Sales (10 am), and a couple more Fed speakers. On the earnings front, BBY, CBRE, DISCA, DISCK, FLIR, NRG, NLSN, PWR, and SRE all report before the Open. Then ADSK, BIDU, CNP, EOG, EIX, MNST, MYP, NKTR, NI, OXY, PRGO, and WDAY report after the close.

The bears are firmly in control and a gap lower looks to be in the cards. However, volatility is high and we will very likely see intraday swings. So, anyone trading now needs to either be fast, able to endure pain and/or hedged. Remember that cash is a perfectly valid position and sometimes the very best position you can take.

Be careful, keep following the trend, listen to price action and trade consistently. Remember Buffett’s number one rule for making a lot of money in the market: 1) Don’t lose a lot of money in the market! Trading is a job and it requires consistent, careful, and effective work…not a gunslinger, get rich quick mentality.

Swing Trade ideas for your watchlist and consideration: IOVA, CME, NFLX, FLO, BYND, TDOC, LPX, SGRY, NTNX, SIG. 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

Virus Fear Still Calling the Market’s Tune

February 26, 2020 by Ed Carter

Markets gave us a head fake at the open Tuesday with a half-percent gap higher followed by a minute of momentum that took markets up an additional half percent. However, this was met by a sharp reversal a couple of minutes into the day that turned into a brutal all-day selloff. There is no mistaking the decisive, large-body black candles printed across all the major indices on the day. The SPY closed down 3.05%, the DIA down 3.15%, and the QQQ down 2.72%. As you’d expect the VXX jumped again and is now at 19.38, a level it has not seen since October.

Coronavirus remains the main story as it seems the possibility of economic impacts has just dawned on many traders in the last few days. That said, governments do continue to downplay this story. For example, both China and South Korea “predict” a turning point in the outbreak in their countries this week. Meanwhile, President Trump and his economic advisor Larry Kudlow said again Tuesday that the virus has been well contained in the US and economic growth will not be significantly impacted.

The headline numbers have now risen to 81,250 confirmed cases and about 2,800 deaths globally. Of course, the vast majority of cases have been inside China. However, looking at major economic centers outside China, South Korea now reports more than 1,260 cases, Japan about 200 cases, Germany 20 cases, France 20 cases, the UK 15 cases, and Italy more than 375 cases.

In terms of impact, many major companies have lowered forecasts. This includes key indicators of consumer activity like MA warned they will miss 2020 revenue forecasts by at least 2-3% (even though those original forecasts were published less than a month ago) as a result of the virus. The European Automaker Groupe PSA warned the entire auto industry worldwide is now working with extremely short supplies of parts. In other indications, the Dept. of Health and Human Services said the virus is “likely to cause a global pandemic” and “it’s just a matter of time before the outbreak starts spreading in the US.” The CDC spokesman agreed with that assessment and went so far as to predict disruption to daily lives in the US.

Overnight, Asian markets were all in the red again. Europe is slightly mixed, but shows losses across most, including the 3 major (FTSE, DAX, CAC), bourses at this point. As of 7:45 am, U.S. futures are pointing to a flat open, but they have been very volatile all night.

The major economic news for Wednesday is limited to Jan. New Home Sales (10 am), Crude Oil Inventories (10:30 am), and a couple more Fed speakers. In terms of major earnings reports, SJM, LOW, NI, PEG, and TJX report before the open. ANSS, APA, BMRN, BNKG, CCI, LB, MAR, NTES, FTI, TCOM, and UHS report after the close.

The bears are firmly in control, but the drop has moved so far, so fast that it certainly looks like chasing to add shorts here, unless you are a very short-term trader. Yes, Asia and Europe continued to slide, but that doesn’t mean we can’t see an up day in a downtrend. Be careful to not let your emotions get the better of you. No revenge trading. No chasing. No reversal picking. Keep that discipline.

Remember that cash and sitting on your hands is a valid position and sometimes the best move you can make. Be cautious, follow the trend, listen to price action and trade consistently. Keep reminding yourself, trading is a job/business and sometimes, calling in sick for a couple of days is the only way to avoid burnout.

Sorry, but there are no trade ideas for today. Markets need to settle before we can plan out quality swing trades. 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

Bounce-Back Open Bull Trap?

February 25, 2020 by Ed Carter

US markets followed the rest of the world lower on Monday. The day started with a large gap lower and then volatility reigned as all three indices printed large-wick, indecisive candles. The SPY ended down 3.32%, the DIA down 3.51% (1031 points), and the QQQ down 3.86%. These losses caused the SPY and DIA to give up all their gains since the end of November. In the process, all three indices also gave up some support levels, although the QQQ was able to hold on to its 50sma. As you’d expect, the VXX spiked to 17.67 and the T2122 plummeted into oversold territory at 5.15.

Most voices among analysts and financial journalism are expecting this bearish move to continue. It seems that all the bad news (especially the coronavirus) that the bulls have been ignoring has suddenly caught their attention. As a result, a full flight to safety is on with Gold at levels it has not seen since 2013 and Bonds at all-time highs (extremely low yield). With that said, any continued move lower does not have to happen Tuesday. A dead-cat bounce is possible, if not probable, after a 3-4% single-day drop.

On the coronavirus front, the headline numbers are now 81,000 confirmed cases and more than 2,700 deaths. As of Tuesday, in addition to China and South Korea (1,000 cases), now major portions of Northern Italy (300 cases) are under quarantine. There has also been an expansion in cases in the middle east, with Iran, Kuwait, Egypt, Lebanon, and UAE all reporting cases. In addition, after the close, MA said they are lowering their 2020 revenue forecasts 2-3% from the levels announced on its January 29 conference call. UAL also withdrew its 2020 forecast, again citing the virus impacts.

Overnight, Asian markets were mixed, but Japan taking a major hit as the NIKKEI (-3.34% on Tuesday) was closed Monday for a holiday. For the second straight day, Europe is bright red across the board at this point. As of 7:45 am, U.S. futures are pointing toward a bounce-back Tuesday as all three major indices are looking at an open half to one percent higher.

The major economic news for Tuesday is limited to the Conf. Board Consumer Confidence (10 am) and a couple of FOMC speakers during the day. In terms of major earnings reports, AEE, AMT, HD, and M all report before the open. Meanwhile, CSGP, CRM, MATX, and PSA report after the close.

Once again, the bears had control yesterday. That makes three days in a row, which was a first going all the way back to the end of November. More companies are decrying the impact of the coronavirus on their operations or sales every day. This means the bears are likely to maintain control, in general, at least until markets have repriced to reflect a large drop in earnings. However, we know markets don’t tend to move in straight lines for long. So, expect more volatility, including up days in the downtrend.

Don’t let your emotions get the better of you. No revenge trading! The market doesn’t owe you a damn thing and chasing to get back to even fast is likely to see you buy just before another reversal lower. Also, bear in mind that volatile markets mean traders need to be quick or hedged if they don’t want to endure serious pain. Believe me, I’ve been there and taken those beatings.

I know it’s boring and you are tired of hearing us say it. However, don’t try to lead the chart. Follow the trend, listen to price action and trade consistently or Mr. Market will punish you. Trading the same pattern over and over, taking profits for base hits and consistently moving your stops is how successful traders work…regardless of how boring you might think that sounds. Keep reminding yourself, trading is a job/business. It is not a lottery ticket.

Swing Trade ideas for your watchlist and consideration: BMY, TDOC, GDOT, BBY, PETS, DOV, RH, PRVB. 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

Virus Is More Than the Bulls Can Ignore?

February 24, 2020 by Ed Carter

On Friday, concerns over coronavirus spread led to a rough day on Wall Street. The major indices all gapped lower and saw follow-through as the bears were in control most of the day. At the close, the SPY was down 1.03%, the DIA down 1.04%, and the QQQ down 1.92%. The VXX climbed on the day but closed back below 15 while the T2122 remains in the mid-range. None of the 10 sectors were in the green, but Technology, Consumer Cyclical, and Energy took by far the worst beatings. This all gave us the first Weekly black candle in the QQQ since November.

However, it is worth noting that the bulls did push markets up off the lows during the last half hour. So, the 50sma held in the DIA and potential support levels held in the SPY and QQQ. The point is that we were extended to start and due for some pullback. However, we didn’t see a lot of bulls jumping out of windows and we are still within about three percent of all-time highs.

After the close Friday, it was announced that WFC had agreed to pay $3 billion in a settlement with the Federal government to avoid criminal charges over their decade-long fraudulent sales practices. GOOGL also reached a settlement with all 50 state attorneys general to allow outside consultants to dig into Google business practices (as part of an anti-trust investigation), but force some confidentiality agreements on the consultants. This will pave the way for the antitrust investigation to proceed.

Over the weekend the coronavirus outbreak continued. The count is now at 80,000 confirmed cases and 2,600 deaths attributed to the virus. However, these numbers are suspect as China has revised the methods they use to count cases three times since the original report. In addition, both the Chinese and some other governments are still downplaying the impact. For example, at the G20 Summit, the I.M.F. said the outbreak would only trim 0.1% off their global growth forecast. China went so far as to urge businesses to reopen and ease restrictions on travel in Wuhan. (The easing of travel lasted less than three hours before they had to lock things down again.)

However, the W.H.O. is reporting an alarming jump in cases outside of China. For example, South Korea saw exponential growth in cases this weekend, with a 20-fold increase to over 750 cases and 12 deaths as of Sunday night. Iran and Italy have also seen outbreaks. The Italian outbreak (160 confirmed cases) has seen Austria close its border with Italy…and both are inside the EU. The same is true for Iran (61 cases and 12 deaths) with Turkey closing its Iranian border. Ominously, the W.H.O. says the Iranian cases are a particular concern because their cases come from different areas of Iran and all from people with no direct connections to China.

Overnight, Asian markets were red across the board, with South Korea (-3.87%) and Australia (-2.25%) taking major hits. Europe is also bright red from end to end so far, with all the major bourses down well over 3.5% at this point. As of 7:30 am, U.S. futures are also pointing toward a large gap lower of between one and two percent in the major indices.

There is no major economic news scheduled for Monday. On the earnings front, there are no major reports before the open. However, HPQ, INTU, KEYS, and OKE all report after the close.

The bears did create some follow-through on Friday, but the bulls didn’t throw in the towel. However, the spread of the virus impacts far beyond Chinese borders may finally be negativity that the bulls cannot ignore. The weekend business and especially virus news are heavily in the bear’s favor. So, we remain not too far from all-time highs, but it looks like a very rocky morning coming up for the bulls.

Unless you are extremely quick, nimble and experienced, this market is not the river you should be trying to swim. Manage the trades you are in and think twice about chasing anything in such a volatile market. Use caution. Take profits and keep moving stops. Remember that sitting on your hands can sometimes be the best move you can make. Whatever you do, DO NOT CHASE and don’t lose your discipline. Our job is to just rack up consistent gains, not find winning lottery tickets.

Due to market conditions this morning, there will be no trade ideas today. Manage the trades you are in now. 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

Mr. Market Showed His Whip

February 21, 2020 by Ed Carter

After a mild open, there was a sharp and strong selloff in the late morning. Some sellers may have been reacting to a rumor of a spike in coronavirus cases in Beijing (away from Wuhan). Regardless of the cause, this spike downward put the bears in control for the day. However, as usual, the bulls spent the rest of the day slowly and steadily working to recover. That whipping action took its toll on many traders.

At day end, the SPY was down 0.41%, the DIA down 0.45%, and the QQQ down 0.93%. All three major indices printed indecisive candles with large lower wicks. While the VXX remains very low (essentially no market fear), at 14.04, Gold and Bonds were both higher on risk-haven trades.

In coronavirus news, the headline numbers are now 77,000 confirmed cases and 2,250 deaths. (Beware the numbers as there was a third round of debate and change in China’s reporting methods overnight.) While that rumor of a spike in cases in the Chinese Capital was unconfirmed, there definitely has been an outbreak in South Korea, which has now placed two provinces under “special authority” due to health emergencies and also reported its first death. Japan also reported two deaths and growth in the number of new cases. Iran also reports an outbreak with 13 deaths, over 500 confirmed cases, and their national health agency said it is likely the virus now exists in all major Iranian cities. Still, the vast majority of cases remain in China.

However, the W.H.O. held a news Conference Thursday to say that while this is true now, it may not be the case for long. They also called for more global funding to fight the disease. In addition, they cast more doubt on Chinese data by flat-out saying that most of the “new” cases and deaths being reported daily are actually days to weeks old.

Overnight, Asian markets were mixed but mostly in the red. Europe is also mixed, but may be leaning just a little to the green side at this point. As of 7:45 am, U.S. futures are also pointing toward a lower open by three-tenths of a percent in the major indices.

Friday’s major economic news includes Feb. Mfg. PMI and Feb. Services PMI (both at 9:45 am), Jan. Existing Home Sales (10 am), and four Fed speakers throughout the day. The only major earnings on the day are DE and PNW, both before the open.

While there was a brief pounce by the bears mid-day Thursday, the bulls refused to give ground easily. So, we remain very near all-time highs, but showing some signs of consolidation or even an early glimpse of pullback. However, so far at least, it hasn’t paid for those who bet against the bulls and the trend still remains bullish.

Remember that Friday is payday. So, take profits and keep moving those stops. It pays to plan the trade and trade the plan. Don’t chase or get complacent and let a profitable position head South. Do not forget that as traders, our job is to keep racking up base hits.

No Trade Ideas for Friday. It’s payday, so take some profits and make sure you are set for weekend headline risk. 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 Just Keep Running

February 20, 2020 by Ed Carter

The bulls are just relentless. A gap higher (strong one in the QQQ) led to a green day in the markets. The DIA was up only 0.39%, the SPY up 0.48%, and the QQQ up a strong 0.96%. The led to another new all-time high close in both the SPY and QQQ. While the SPY and DIA were not decisive, the QQQ put in a strong white-body candle. Again, the VXX shows no fear in the market at 13.56 and the T2122 remains in the mid-range at 61.13. The long and short of it is that nothing has slowed the bulls much in this run. This is the case despite the NASDAQ being well extended and the large-cap indices having consolidated or even looked toppy recently.

On the news front, the Producer Price Index for January came in much higher than expected (highest in 18mo), but Building Permits were also higher than expected. The Fed speakers and FOMC Minutes both confirmed that no rate changes are expected this year. However, it also confirms that the Fed does see coronavirus as a global economic threat. Both Bloomberg and CNBC report that other analysts and firms also think the market is underestimating the virus impact, but so far the bulls could not seem to care less.

On the coronavirus front, the headline numbers are over 76,000 confirmed cases and about 2,150 deaths worldwide. With that said, new cases reported in China continue to show a trend toward slowing growth. However, China has changed the way they report cases again, which dramatically lowered the numbers from yesterday. In terms of impact, there were rumors of the Chinese government either pumping money into or simply buying out their airline industry, which has been decimated by over least six weeks without flights. In addition, 10 days after it was supposed to restart, Foxconn (AAPL main iPhone supplier) said it will cautiously restart production in its larger plants.

Overnight, Asian markets were mixed. On the other hand, Europe is red across the board at this point in their day. As of 7:45 am, U.S. futures are also pointing toward a mildly lower open, looking to open down less than two-tenths of a percent in the major indices.

Thursday’s major economic news includes Weekly Jobless Claims and the Feb. Philly Fed Mfg. Index (both at 8:30 am) and Oil Inventories (11 am). On the earnings front, AEP, CPB, HSIC, HFC, HRL, LKQ, NEM, NCLH, PWR, SO, TFX, VTR, and VIAC all report before the open. LNT, COG, ED, and SBAC report after the close.

The bulls haven’t even hesitated over coronavirus so far. It certainly hasn’t paid for those who bet a pullback must take place. However, more and more analysts are expecting that pullback to come. Meanwhile, the markets just keep climbing that wall of worry. This, of course, leads to a concern about overextension, especially in the QQQ.

So, the trend remains bullish and the major indices are all at or very near their all-time highs. However, we need to keep in mind that the large-caps have been indecisive for a few days now, overextension is real, and Logic would tell us there will eventually be some market impact from a global event (particularly one devastating the second largest economy in the world).

So, remain cautious and continue to be nimble or hedged. Just keep consistently taking profits and moving stops. Plan the trade and trade the plan. Don’t chase or get complacent and let a profitable position (or several) go South. As traders, our job is to keep producing those singles and doubles, hit an occasional home run among a string of strikeouts.

Swing Trade Ideas for your consideration and watchlist: ZTS, MSI, CTSH, ALL, CLX, KO, WRB, ZBH, DHI, EHC, MSFT, ROL, CSX, MS, INFO. 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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Caution Signs Persist – Bulls Indifferent

February 19, 2020 by Ed Carter

After bad weekend news from PIR and AAPL, WMT missed expectations in the premarket Tuesday. This caused a gap down at the open. However, after a sideways grind in the morning, the bulls slowly climbed back up all afternoon. The SPY closed down 0.26%, the DIS down 0.54%, and the QQQ up 0.04%, which was another all-time high close for the NASDAQ. The SPY and DIA printed indecisive candles, while the QQQ was more bullish. However, all three major indices are looking at least like they are consolidating, if not even a little toppy over the last four candles.

On the news front, CNBC reported that company stock repurchases (buybacks) are down so far this year in the slowest start since 2013. This indicates companies are holding on to their cash, which is usually an indication of their own concern or at least uncertainty over their future performance. As a point of reference, buybacks are down 30% from 2019 levels. However, to be fair, 2019 was a record-breaking year for buybacks.

After hours, GS reported a study that found that almost all of the entire market’s earnings growth for Q4 came from the five mega-cap tech companies (AMZN, AAPL, MSFT, FB, and GOOG). Russell 2000 earnings fell 7%, the S&P 500 earnings grew 2% on average…but those 5 companies (which are included in the S&P) were up 16%. The report went on to say that those 5 stocks now comprise 18% of the S&P500 market cap and the growth has not been this concentrated since the 2000 tech bubble burst.

On the coronavirus front, MDLZ reopened some of its manufacturing plants in China as did GM and FCAU. However, the W.H.O. continues to say it is too early to determine whether the spread is slowing inside China. As another example, Adidas says seen an 85% drop in their business activity (sales and manufacturing) in the last month. The impact numbers themselves continue to grow as now more than 75,000 confirmed cases have been reported and the death toll has risen to over 2,000 globally. Bear in mind that most of those cases are in China.

Overnight, Asian markets were green across the board. In Europe, the bulls are running as well with green in all the major bourses. As of 7:45 am, U.S. futures are also pointing toward a higher open of between a quarter and half a percent in the major indices.

Wednesday’s major economic news includes Jan. Building Permits, Jan Housing Starts, and Jan. PPI (all at 8:30 am), as well as the FOMC Minutes release (2 pm). There are also a number of Fed speakers during the day. On the earnings front, ADI, ETR, GRMN, GPC, and DISH all report before the open. ALB, CAR, XEC, ES, HST, MOS, PXD, O, SNPS, and WMB report after the close.

The bulls have seemed to be running low on energy for the last few days. However, there is has been no evidence that the bears can take advantage of this lack of bullish momentum. This morning it looks like the bulls may try another little push. The trend certainly remains bullish and all the major indices are still very near their all-time highs. However, we need to keep in mind that markets have been indecisive for a few days now.

Swing Trade Ideas for your consideration and watchlist: BYND, HOME, TWTR, CNC, IPG, AKAM, BLL, CTSH. 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

WMT Misses – AAPL Warns – PIR Files

February 18, 2020 by Ed Carter

In front of the long weekend, markets put in an indecisive sideways grind all day on Friday. All three major averages printed Doji type candles with the SPY gaining 0.16%, the DIA losing 0.09%, and the QQQ gaining 0.29%. This made for another new all-time high close in the SPY and QQQ. The VXX was down again, closing at 13.52 and the T2122 rose a bit but remains in the mid-range at 71.59.

Among the news stories that may have helped markets in the afternoon was a CNBC report that the White House is considering tax incentives to encourage more investing in the stock market. This may have helped offset slightly worse than expected Industrial Production numbers from before the open. The only Friday news on the coronavirus was that China had “sharply tightened” the already strict quarantine in Wuhan. However, after the close, CNBC reported that 20% of the S&P 500 members had already warned that the virus would have an impact on operations, financial performance or both.

Over the weekend, PIR declared bankruptcy, but also released a statement that they had reached an agreement with lenders to provide it with $256 million to keep it afloat while it tries to find a buyer. This comes six weeks after it reported both a loss and sales that were down over 11% from the prior year. This may or may not provide a read-through to competitors like BBBY. It is also worth noting that WMT missed it’s earnings on both the top and bottom line when it reported this morning.

On the coronavirus front, in some positive news, Macao reopened its casinos on Tuesday following a two-week shutdown. In addition, the W.H.O. reported that the trends outside of China seem promising (whatever that means exactly). However, the numbers continue to grow as more than 72,400 confirmed cases have been reported and the death toll has risen to nearly 1900 globally.

In terms of impacts, the event cancellations (such as annual conventions in Geneva, Switzerland) and new quarantines and travel restrictions (780 million people in China are subject to lock-down or some form of travel restriction related to virus prevention) continue. AAPL also warned that it will not meet its January-released guidance for the second quarter. They blamed iPhone supply chain constraints (China Foxconn operations) and reduced Chinese demand as the reasons.

Overnight, Asian markets were mixed, with Japan, Korea, Australia, and Hong Kong deeply in the red. Meanwhile, Shenzhen was strongly green. However, as of this point in their day, Europe is in the red across the board. As of 7:45 am, U.S. futures are pointing toward a gap lower of half a percent across the major indices.

Tuesday’s major economic news is limited to NY Empire State Fed Mfg. Index (8:30 am). However, there are some earnings, with AAP, ALLE, ECL, EXPD, MDT, VMC, WMT, and WAB all reporting before the open.

As we come back from a long weekend, it’s time to see if the bulls are ready to run again or we might see some pullback. The trend continues to be strongly bullish and all the major indices are very near all-time highs (including even the IWM). It certainly has not paid to fight the trend recently. However, we are still a bit extended from averages and earnings news is not great.

Just maintain your consistency. Keep locking in profits, being cautious and remaining nimble or hedged. Remember, make the trade come to you, plan the trade and trade the plan. Don’t get complacent and let a profitable position (or several) go South on you. Our job is to keep producing singles and doubles, not a string of strikeouts and an occasional home run.

Swing Trade Ideas for your consideration and watchlist: NWL, SPGI, PYPL, FLO, FLDM, VSH, QRVO, BKE, DIOD, VIVE, IRWD. 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

Back to Bullish or Book Some Profit

February 14, 2020 by Ed Carter

Markets gapped lower Thursday on fear stoked by the huge jump in reported cases and deaths from the coronavirus. (As noted yesterday, this jump was likely largely due to the Chinese changing the way they report cases, which may be prone to cause trends that are less smooth.) At any rate, after the gap down, the bull immediately charged in to fade the gap. From that point onward, the rest of the day was a sideways grind around the break-even line. For the day, the DIA closed down 0.30%, the SPY down 0.11% and the QQQ down 0.13%. So, we recorded a down day, but not by much considering the gap down. The VXX remains low at 13.69 and T2122 fell again, but remains in the mid-range at 69.27.

In the news, the Fed announced it will reduce new Repo market purchases (purchases will continue, just at a lower rate). AMZN also obtained a temporary injunction against MSFT working on the Pentagon cloud contract. WMT also announced it would discontinue its unprofitable high-end personal shopping service called Jetblack and W reported it will cut 500 jobs (3% of its workforce). In other market news, CSCO stock was hammered Thursday after it reported falling revenue and failed to beat earnings expectations on Wednesday evening.

However, once again coronavirus was the top story of the day. As mentioned, China changed its reporting methods and overnight Wed. reported over 15,000 “new” cases and 250 “new” deaths. Obviously, this scared markets and the White House did not help matters by publicly stating it did not have confidence in the information coming from China. (While true, expressing that skepticism after such an increase in the numbers was reported does not help public confidence.)

As of Friday, the counts stand at 64,000 cases and almost 1,400 deaths. The impact is continuing to spread as airlines, cruise lines and other travel-related industries have been hit hard by decreased demand. In addition, KHC and FCAU were among the companies that closed their manufacturing operations in China within the last 24 hours. Many other companies warned of revenue and earnings impacts, perhaps obviously including BABA.

Overnight, Asian markets were mixed. However, as of this point in their day, Once again, Europe has shaken off the fear and is mainly green, As of 7:30 am, U.S. futures are back on the bullish side, pointing toward a gap higher of between a quarter and half a percent across the major indices.

Major economic news today includes Jan. Retail Sales Core and Imports/Exports (both at 8:30 am), Jan. Industrial Production (9:15 am), Michigan Consumer confidence (10 am) and another Fed speaker just before noon. In addition, both China and the US are scheduled to reduce more tariffs on Friday. The only major earnings reports for the day are NWL and PPL, both before the open.

Friday could be a selling day as traders look to lock in gains in front of a 3-day weekend. (Don’t forget this is a long weekend with US markets closed Monday for Washington’s Birthday.) Certainly, there are great headline risks from coronavirus over that period, but also from the follow-on impacts/statements of businesses over the period as well. However, the trend remains strongly and stubbornly bullish and all the major indices are very near all-time highs (including even the IWM).

All I can do is continue to tell you to not fight the trend, but also keep locking in profits, being cautious and remaining nimble or hedged. Remember to make the trade come to you (rather than chasing), plan the trade and trade the plan. Don’t get complacent and let a profitable position (or several) go South on you.

No Swing Trade Ideas for your consideration and watchlist on a Friday in front of a 3-day weekend. Today is payday. So, book some profits. 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