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Q3 Earnings Strong As Big Banks Crush It

October 14, 2021 by Ed Carter

On Wednesday, markets gapped and ran higher the first 10 minutes, then sold off hard the rest of the first hour. However, whipsaw rules remain in effect and that led to a long, slow rally that ran higher the rest of the day. This took us out near the highs in indecisive Doji-like candles in all 3 major indices. It’s worth noting that the T-line (8ema) held as resistance again today. On the day, SPY gained 0.37%, DIA gained 0.06%, and QQQ gained 0.80%. The VXX fell 2% to 24.14 and T2122 rose to 76.34, just outside the overbought territory. 10-year bond yields fell a bit to 1.542% and Oil (WTI) was flat at $80.57/barrel.

September CPI came in hotter than expected. The Social Security cost of living increase was also announced at +5.9%, the largest in 40 years. A couple of Fed members also admitted in speeches that inflation is going to hang around longer than they had foreseen. Then at 2 pm, the FOMC minutes also indicated that (as was widely expected) the Fed has discussed and broadly agree that they should begin a gradual taper of buying bonds in mid-November (still buying, but buying less).

In the morning earnings releases, among the major banks, BAC, MS USB, WFC all easily topped estimates on both lines. (C is not scheduled to release until 8 am.) It is worth noting that like JPM yesterday, BAC’s report benefitted from better-than-expected loan losses that allowed them to reduce loan loss reserves significantly. In healthcare, UNH also reported a beat on both lines. In the retail/pharmacy area, WBA reported a very strong quarter, also handily topping estimates for both lines, saying they had administered twice as many Covid vaccine shots as had been expected. Interestingly, in the semiconductor space, TSM beat on revenue but came in a bit light on revenue (likely due to substrate shortages).

FB faces more bad headlines (and by extension so does TWTR). It was announced today that a whistleblower (not the same one from the US last week) is set to testify before the UK Parliament. This time, the testimony will be about FB knowing and not acting to combat election interference by “bot accounts” (controlled by government agencies in countries like Russia) in various country’s national elections. This hearing will be part of the debate for a UK law that would impose hefty fines if social media giants knowingly fail to take action against illegal or harmful content.

Overnight, Asian markets were mixed but leaned higher. South Korea (+1.50%), Japan (+1.46%), and Indonesia (+1.36%) led the gainers. Malaysia (-0.49%) was the only appreciable loser as the rest of the region was flat on the day. In Europe, we see even more green as only Denmark (-0.35%) shows any real red at mid-day. The FTSE (+0.73%), DAX (+0.88%), and CAC (+0.90%) are all trading strong in early afternoon action. As of 7:30 am, US Futures are pointing toward a gap higher. The DIA is implying a +0.67% open, the SPY implying a +0.77% open, and the QQQ implying a +0.86% open at this hour. In early morning trading, the Dollar is higher, while 10-year bond yields are down a bit and Oil (WTI) is up 1.35% again.

The major economic news scheduled for release on Thursday includes Sept. PPI and Weekly Initial Jobless Claims (both at 8:30 am), Crude Oil Inventories (11 am), and a couple of Fed speakers (Bostic at 10 am and Williams at 1 pm). Major earnings reports scheduled for the day include BAC, C, CMC, DPZ, MS, PGR, TSM, USB, UNH, WBA, and WFC before the open. Then after the close, AA reports.

The bulls are looking to run on a second straight day of great earnings reports to start the season. Premarket prices are pointing to a gap higher. In addition, it looks like the “opening trade” stocks, such as travel and leisure are surging in the premarket. However, remember that the downtrend remains intact and the 8ema has held as resistance the last couple of days. So, trade carefully, because the whipsaw has been in effect especially early recently.

Don’t jump to any reversal conclusions or get caught up in the need for action or FOMO. Focus on your trading process and on managing those things you can control (while not worrying about things you can’t influence). Watch your current positions before looking to add new trades. Remember, it’s discipline and good trading rules that protect us from ourselves. Consistently take profits when you have them. Don’t let greed get the better of you. Finally, remember that we have monthly options expiring at the end of the week. So, it’s time to think about closing, rolling, or riding into expiration with very little time value left.

Swing Trade Ideas for your consideration and watchlist: BTBT, FCX, AG, AMD, SNOW, MSFT, GOTU, BIDU, LI. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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First Q3 Earnings Reports Are Strong

October 13, 2021 by Ed Carter

Markets gapped up a bit at the open on Tuesday, but it was another bull trap. Stocks immediately sold off before doing an all-day roller-coaster that ended just up off the lows. So, all 3 major indices have now taken out their 8ema, but are sitting at a recent potential support. On the day, SPY lost 0.24%, DIA lost 0.35%, and QQQ lost 0.35%. The VXX fell almost 2% to 24.63 and T2122 remains in the mid-range at 58.25. 10-year bond yields fell to 1.572% and Oil (WTI) was unchanged at $80.52.

The JOLTs report on Tuesday showed what appears to be serious wage pressure. 4.3 million workers quit their job in August, the highest amount since December 2000. A number of analysts say this is a clear indication that workers were unhappy with their current wages (and past raises) and see the huge number of job openings as a rare opportunity to improve their situations. The only way to address this would be for employers to significantly raise wages to retain as well as draw in new employees. In addition, this first month of data seems to point to “extended unemployment benefits” not being a primary driver for the problem of finding workers. Together, these will mean real earnings pressure for companies without pricing power.

At the close on Tuesday, Bloomberg reported that AAPL is likely to slash iPhone 13 production orders by as many as 10 million units. The company was expected to make 90 million iPhone 13s during Q4, but is now telling partners the number could be as much as 10 million units less. The cited reason is the TXN and AVGO are not able to meet chip demand. For its part, AVGO does not produce the chips they sell, they purchase production capacity from TSM, which may be a read-through to TSM and by extension TSM’s other major customers (AMD, NVDA, QCOM, and INTL).

In market news this morning, JPM posted a significant beat on earnings ($3.74 vs $3.00 per share estimated) but missed on revenue. BLK reported significant beats on both lines while FRC posted more modest beats on both lines. DAL also reported significant beats on both lines on growing travel demand. Weekly mortgage demand continued to stall last week as rates rose. 30-year fixed-rate conforming loan rats rose from 3.14% to 3.18% on average. As a result, refinance loan applications fell 1% while new home purchase loan applications rose 2% versus the week prior.

Overnight, Asian markets were mostly in the green. Taiwan (-0.70%) and Japan (-0.32%) showed the only real red in the region. Meanwhile, Shenzhen (+1.54%), Singapore (+1.43%), and South Korea (+0.96%) led the region higher. In Europe, a similar story is taking shape. Russia (-1.05%) is the only significant red. Meanwhile, the FTSE (-0.09%), DAX (+0.74%), and CAC (+0.24%) are typical of the spread we see across the continent at mid-day. As of 7:30 am, US Futures are pointing toward a mildly positive open. The DIA is implying a +0.11% open, the SPY implying a +0.15% open, and the QQQ implying a +0.34% open at this hour. The Dollar is trading lower, while 10-year bond yields and Oils are both slightly lower in early trading today.

The major economic news scheduled for release on Wednesday includes Sept. CPI (8:30 am), Fed. Budget Balance and Sept. FOMC Minutes (both at 2 pm), and a couple of more Fed speakers (Brainard at 4:30 pm and Bowman at 8 pm). Earnings season kicks off again today with reports scheduled from BLK, SDAL, FRC, INFY, JPM, and WIT before the open. There are no major reports scheduled for after the close.

Premarket prices seem to be modestly bullish this morning as the first indications from earnings are that corporations are doing just fine, despite the fear over inflation, chip shortages, supply chain woes, and Covid. However, remember that the downtrend remains intact and the 8ema seems to be acting as resistance in early action. Trade carefully, today is only the first salvo of earnings data. Don’t jump to conclusions or get caught up in the need for action or FOMO.

Focus on your trading process and on managing those things you can control (while not worrying about things you can’t influence). Watch your current positions before looking to add new trades. Remember, it’s discipline and good trading rules that protect us from ourselves. Consistently take profits when you have them. Don’t let greed get the better of you. Finally, remember that we have monthly options expiring at the end of the week. So, it’s time to think about closing, rolling, or riding into expiration with very little time value left.

Swing Trade Ideas for your consideration and watchlist: RLX, ANY, GOTU, AG, FSM, NKLA, COST, MO, AOS. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Supply Chains and Energy Lead News

October 12, 2021 by Ed Carter

Markets mostly recovered in the premarket Monday, to give a tiny gap down in the large-cap indices and a four-tenths of a percent gap down in the QQQ. However, the whipsaw was in effect and we got an immediate strong rally into the highs of the day during the first hour. At that point, markets ground sideways for a couple of hours before beginning a strong and protracted selloff that took us out on the lows. This left us with ugly black candles with large upper wicks in all 3 major indices. The SPY and QQQ both gave up the 8ema, while the DIA closed while testing that level. On the day, SPY lost 0.72%, DIA lost 0.73%, and QQQ lost 0.77%. The VXX rose to 25.12 and T2122 fell back to 43.40 (mid-range). 10-year bond yields were just below flat at 1.612% and Oil (WTI) rose 1.5% to $80.51.

During the day, MRK submitted its request to have FDA approve its new anti-viral treatment (not vaccine) pill for emergency use. The company says the data shows it improves survival and hospitalization rates by 50% for mild to moderate cases of Covid. This comes as the 7-day average of new cases in the US falls below 85,000 and a few days before the FDA is scheduled to debate and vote on approval of the MRNA and JNJ vaccines for booster use. The independent panel is expected to approve the booster shots of those two vaccines, since it previously said the panel was frustrated that only the PFE vaccine was available for boosters.

Bitcoin surged back above $57,000 on the day. The primary drivers appear to be that the head of the SEC and Fed Chair Powell said they have no intention of banning Bitcoin. In addition, several Bitcoin or other cryptocurrency EFTs are the works that are expected to be approved and launched soon, thereby allowing many new buyers into that market.

For the first time in perhaps decades, coal is center stage on the economic front. The shortage of coal is causing major problems for several countries, including China and India. Global logistics issues and massively increasing demand seem to be the main causes. However, in China the country is also trying to achieve global climate emissions standards. One might think this could help the shortage, but in order not to shut down one region’s businesses entirely they have instituted rolling brownouts and scheduled power cuts nationwide to help achieve their goals. This means that coal needs to be everywhere in the country at the point the local power plant is allowed to go back online, which prohibits the centralization of coal inventories. As of now, India’s power plants are down to an 8-day supply of coal on average, with some as few as 2 days of supply. Coal accounts for 70% of India’s electricity. In China, coal prices have hit a record as both supply shortages coming into the country and massive logistics challenges are hampering the situation. This includes mass flooding in China’s main coal production region, which has 60 coal mines offline due to floods. Coal accounts for 60% of China’s power production.

Overnight, Asian markets leaned heavily to the red side. Some of the smaller exchanges, like Malaysia (+0.83%) and Thailand (+0.62%) managed gains. However, most followed Shenzhen (-1.62%) Hong Kong (-1.43%), and South Korea (-1.35%). In Europe, stocks are also mostly in the red on smaller moves as of mid-day. Denmark (+1.36%) is the clear exception to the rule, but the FTSE (-0.35%), DAX (-0.30%), and CAC (-0.46%) are more typical of the region in early afternoon trading. As of 7:30 am, US Futures are pointing to a start to the day just on the green side of flat. The DIA is implying a +0.05% open, the SPY implying a +0.10% open, and the QQQ implying a +0.28% open at this hour. 10-year bond yields are down to 1.596% and Oil (WTI) is up another half of a percent as the Dollar is dead flat in early trading.

The only major economic news scheduled for release on Tuesday is the August JOLTs (10 am), and the WASDE world Ag report (noon). However, there are a couple of Fed speakers (Clarida at 11:15 am and Bostic at 12:30 pm). There are also no earnings reports scheduled for the day as the market prepares for earnings season to begin on Wednesday.

Premarket prices are recovering from the overnight lows at this point and seem headed toward a slightly green open. However, a downtrend remains intact and the bears have the momentum both from overseas and Monday’s US price action. That said, don’t be surprised if Tuesday is a quiet day as markets get ready for earnings season, which kicks off again before the open tomorrow. Trade carefully and don’t get caught up in the need for action or FOMO.

Watch your current positions before looking to add trades. Remember that it’s discipline and good trading rules that protect us from our own worst mistakes. So, focus on your trading process and on managing the things you can control. Consistently take profits when you have them. Don’t let greed get the better of you. Finally, remember that we have monthly options expiring at the end of the week. So, it’s time to think about closing, rolling, or riding into expiration with very little time value left.

Swing Trade Ideas for your consideration and watchlist: FCEL, MGM, APRE, NKE, AMD, BX, GOTU, CRM, MSFT, FCX, OPEN. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Oil Surge, GDP Forecast Cut Start Week

October 11, 2021 by Ed Carter

Markets gapped slightly higher at the open, in a counter-intuitive move to the Sept. Payroll Additions coming in less than half of expected (+194k vs +500k estimate). At the same time, the Unemployment rate fell much further than expected (to 4.8%) as participation also dropped. Regardless, despite the gap higher of about four-tenths of a percent, all 3 major indices immediately gave back that gap. The large-cap indices spent the rest of the day in a roller-coaster ride to nowhere as markets chopped sideways. However, the QQQ kept selling of until it started its own sideways chop in the early afternoon. This left us with Bearish Engulfing candles of various sizes in all 3 major indices. On the day, SPY lose 0.18%, DIA lost 0.03%, and QQQ lost 0.50%. The VXX fell just under 2% to 24.79 and T2122 fell outside the overbought territory to 70.85. 10-year bond yields jumped up to 1.614% and Oil (WTI) gained 1.5% to $79.48/barrel.

After the close, the Organization for Economic Cooperation and Development (OECD) announced a major breakthrough. The 136 countries agreed to a global minimum corporate tax rate of 15%. This includes the agreement of smaller “tax haven” countries like Ireland. The breakthrough came after the countries agreed that the 15% rate will not be increased at a later date. The deal will ensure that companies pay tax in the countries in which they operate rather than shifting money to a tax haven to avoid taxes by creative accounting. The new deal is scheduled to start in 2023, but some countries have work to do inside their own laws to implement the agreement.

On Sunday, GS cut their forecast for US economic growth for 2021. Although it was a small cut (to 5.6% for the year versus the previous 5.7%), they also reduced the 2022 forecast substantially, from 4.4% to 4.0%. The stated reason for the move was a delay in the recovery of consumer spending. This may well be reflected in earnings reports that start again this week. They also cited their current assumption is that chip supplies will not recover until at least the second half of 2022. The potential good news from this report was that they increased out-year growth forecasts based on a later recovery in consumer spending and removal of semiconductor shortage restraints from the economy.

LUV had a rough weekend. The airline had to cancel more than 1,800 flights, well over 27% of its schedule. The company blamed the disruptions on air traffic controllers and bad weather. While LUV would not comment on whether staff shortages contributed to the outages, but the company has stated in the past that they have had trouble hiring enough new staff since the pandemic. Oddly, in the same region of the country where LUV reported its outages, AAL only had to cancel 2% of their flights and SAVE only canceled 4% of its schedule.

Overnight, Asian markets were mixed, with the majority of exchanges in the red, but the big movers on the green side. Hong Kong (+1.96%) and Japan (+1.60%) were the winners on the day. The odd part of the Hong Kong rally was that Chinese Tech stocks surged higher even after a Chinese regulator slapped a $534 million fine on a giant food delivery app. BABA jumped nearly 8% on the Hong Kong exchange. In Europe, stocks are also mixed, but lean to the red side at mid-day. The FTSE (+0.32%), DAX (-0.36%), and CAC (-0.26%) are typical of the continent in early afternoon trading. As of 7:30 am, US Futures are pointing toward an open lower. The DIA is implying a -0.21% open, the SPY is implying a -0.38% open, and the QQQ is implying a -0.61% open at this hour. However, the major overnight news is another huge rally in Oil. The WTI is up almost 3.5% in early trading to $81.97.

There is no major economic news scheduled for release on Monday. There are also no major earnings reports scheduled for the day.

The bears are starting the week with follow-through to Friday’s Bearish Engulfing signals, especially in the tech-heavy Nasdaq. Add to that the huge jump in Oil prices and we can expect a lot of fear in the markets at least early today. We also have earning season kicking off again, new inflation data, and a slew of Fed speakers later in the week. So, a bumpy ride is likely to continue. Be prepared for intraday volatility, gaps, and remember that the trend remains bearish.

Once again, bear in mind that you don’t have to trade every day or week. Either way, watch your current positions before looking to add trades. Remember that it is discipline and good trading rules that protect you from your own worst mistakes. So, focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed get the better of you. Finally, remember that we have monthly options expiring at the end of the week. So, it’s time to think about closing, rolling, or riding into expiration with very little time value left.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Sept Payrolls Data Leads The News Today

October 8, 2021 by Ed Carter

Stocks gapped higher and followed through the first half-hour Thursday on relief over a deal to temporarily raise the debt limit. However, from 10 am until 1:30 pm we saw a sideways grind in a very tight range and then a selloff all the way into the close. This left all 3 major indices pretty much where they started the day in something resembling a Shooting Star candled after a 2-day relief rally. On the day, SPY gained 0.86%, DIA gained 1.03%, and QQQ gained 0.92%. The VXX fell to 25.26 and T2122 shot all the way up deep into the overbought territory at 89.95. 10-year bond yields spiked again to 1.569% and Oil (WTI) gained 1.78% to $78.81/barrel.

Overnight the Senate passed a short-term minimal increase in the US debt limit. The House will take up the bill in the next couple of days, but the Senate was the hurdle, due to Senate rules requiring 60 votes. The $480 billion increase basically kicks the can down the road to December 3, when the country will face exactly the same problem again. That is also the date the temporary budget extension expires. So, December 3 becomes critical for both a government shutdown and default on US debt.

Overnight, the Chinese Central Bank (PBOC) withdrew over $2 trillion dollars in liquidity from their banking system. Not only was the move massive, but it broke the trend whereby they had added about $16 billion in liquidity each day of the previous week (that preceded the Chinese 5-day holiday). The big reduction was seen as a signal that the Chinese government now feels that the Evergrande default situation is under control and the system no longer needs emergency liquidity. Chinese 10-year bond prices fell 0.4% in reaction (a massive move), but have started to creep back up as their day went on.

In other business news, TSLA announced Thursday that it is moving its corporate headquarters to Austin Texas (from Palo Alto CA). This comes 17 months after CEO Elon Musk had first threatened the move while he fought with local CA government officials over Covid restrictions. In the announcement of the move, Musk took another swipe at CA, saying TSLA workers can’t afford the cost of living in CA. However, that does not seem to be the real concern. At the same event, it was announced that while corporate jobs are moving to Texas, the CA production plant will remain in place and is still planned to expand by 50%. So, it seems the company is not concerned about their production workers’ ability to afford the cost of living in that area.

Overnight, Asian markets leaned heavily to the green side. Japan (+1.34%), Indonesia (+1.02%), and Australia (+0.87%) led the way. On their first day of trading in over a week, Shanghai (+0.67%) and Shenzhen (+0.74%) both closed higher. In Europe, markets are more mixed at mid-day. The FTSE (+0.05%) and DAX (-0.09%) are flat, while the CAC (-0.35%) is down a bit. Part of the indecision on the continent comes from Poland, where judges have ruled that Polish law is supreme over EU law, which raises the specter of a potential exit from the EU by Poland. As of 7:30 am, US Futures are pointing toward an open just on the green side of flat. The DIA and SPY are both implying a +0.12% open, and the QQQ is implying a +0.10% open. 10-year bond yields reached above 1.6% overnight, but have retreated to a still higher 1.58% in early morning trading. Meanwhile, Oil continues its rally, up almost another percent in early trading.

The major economic news scheduled for release on Friday includes Sept. Nonfarm Payrolls, Sept. Participation Rate, Sept. Unemployment Rate, Sept. Building Permits, and Sept. Avg. Hourly Earnings (all at 8:30 am). There are no major earnings reports scheduled for the day.

Yesterday’s late-day fade, leaving us with large high wicks does not breed a lot of confidence that the relief rally has legs. However, so far this morning, markets seem to be waiting on the Payrolls data before making up its mind. Also bear in mind that earnings season kicks off in earnest again next week. So, with the weekend ahead and a lot of positioning to do, expect the volatility of intraday swings to continue.

Watch your current positions before looking to add trades. Remember that it is discipline and good trading rules that protect you from your own worst mistakes. So, focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed get the better of you. A good trader refuses to let winners turn into losers.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Debt Default Avoidance Cheers The Bulls

October 7, 2021 by Ed Carter

Markets gapped down strongly Wednesday and then went on an all-day roller coaster ride as volatility reigned. However, the mid-afternoon bullish wave coming from good news on a possible debt ceiling deal and then strong buying the last 20 minutes left us near the highs. This gave us gap-down, big white candles that have managed to close above the T-line (8ema) in the large-cap indices and is just below it in the QQQ. On the day, SPY gained 0.42%, DIA gained 0.29%, and QQQ gained 0.64%. However, it is worth noting that the downtrend still remains unbroken. The VXX fell slightly to 26.21 and T2122 fell back to the lower end of the mid-range at 38.96. 10-year bond yields fell, but only a bit, to 1.528%, and Oil (WTI) fell 2.5% to $76.94/barrel.

During the afternoon, GOP Senate Minority Leader McConnell offered Democrats a short-term suspension (until December) of the debt ceiling and said Republicans would not block the Democrats from using the reconciliation process (which only requires a majority vote in the Senate, not 60 votes) to raise the debt limit permanently. Markets loved this news and rallied hard shortly afterward. Essentially, this move is the GOP saying they want the debt ceiling raised (to avoid default), but they also want the Democrats to do it on their own. After the close, Democrats signaled that they will accept the short-term suspension. This takes the pressure off (kicks the can) and bond markets are likely to be happy with this development.

K announced it is planning to restart operations at 4 plants that have been closed this week by a strike among 1,400 workers who are seeking wage increases. The company said that it plans to use salaried employees as well as “third-party resources” to operate the plants. This is the latest in a string of strikes this fall among various food manufacturers such as PM (Nabisco), PEP (Frito Lay), and MDLZ (Oreo).

In other business news, GM said Wednesday that they expect to double sales by 2030. They expect their new emphasis on electric vehicles to be aided by regulations around the globe, forcing more vehicle owners to upgrade sooner. Bitcoin also soared 10%, back above $55,000 on a Bloomberg report that George Soros both owns cryptocurrencies now and has plans to expand his fund’s holdings in this area because he sees crypto as more than just an inflation hedge.

Overnight, Asian markets were strongly green for the most part, but mainland China remains closed another day. Hong Kong (+3.07%), Taiwan (+1.96%), and South Korea (+1.76%) led the charge. In Europe, markets are also thrilled about the avoidance of a US default. At mid-day, the FTSE (+1.20%), DAX (+1.32%), and CAC (+1.63%) are typical of the continent. As of 7:30 am, US Futures are pointing a gap higher. The DIA is implying a +0.83% open, the SPY implying a +0.94% open, and the QQQ implying a +1.19% open. 10-year bond yields are also down and Oil (WTI) is off 1.50% in early morning trading.

The major economic news scheduled for release on Thursday is limited to Weekly Jobless Claims (8:30 am) and a Fed speaker (Williams at 8:40 am). The major earnings report scheduled for the day includes CAG, HELE, and LW before the open. There are no major reports scheduled for after the close.

Relief on the assumption the US will not default on its debt gave the bulls strong afternoon energy and it appears overnight confirmations are giving them strength again early today. We should still remain leery of volatility and resistance. However, as of this moment, it looks like we will challenge the downtrend in all 3 major indices at the open. Just bear in mind that a challenge does not guarantee success and a break of the downtrend does not mean a bullish trend immediately replaces the bearish one. So, be careful getting carried away by FOMO.

Swing Trade Ideas for your consideration and watchlist: CDAY, DLPN, SPWR, RSG, APPS, DDOG, WFC, AIG, C, MSFT, MRVL, UBER. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bears Looking to Roar As Bond Rates Rise

October 6, 2021 by Ed Carter

Markets gapped higher and the bulls followed through all morning. However, this turned into a sideways grind in a tight range followed by a hard selloff in the last 45 minutes of the day. This left us with a Bullish Harami in the QQQ and gap-up white candles with larger upper wicks in all 3 major indices. Leading this charge were the FANGMAN stocks that led us lower Monday. However, none of the indices were able to take out their T-line. On the day, SPY gained 1.04%, DIA gained 0.92%, and QQQ gained 1.35%. The VXX fell almost 4% to 26.55 and T2122 remains in the mid-range at 60.68. 10-year bond yields shot higher to 1.531% and Oil (WTI) gained almost 2% to $79.15/barrel.

FB can’t catch a break on the news front. After a 6-hour outage on Monday, the US Senate spent most of Tuesday hearing testimony from a FB whistleblower (Frances Haugen) and making their own attacks on FB and CEO Mark Zuckerberg. The 4 main takeaways from Haugen’s testimony are that: 1) FB mechanics are designed to aid in the spread of misinformation (because the controversial or salacious draws eyes and clicks); 2) FB knows this and has decided to take the minimum possible steps to curb such posts; 3) FB has research showing the negative impacts of the platform on children and teens (especially young girls), and has decided to mislead the public about the topic rather than admit the problems; 4) FB knows its platform enables exploitation but has prioritized profits over those issues in every case, even when the impact to profit had been deemed tiny by management. During the day, FB responded with a statement essentially saying that Haugen wasn’t knowledgeable about the things she was claiming and they totally disagree with her characterizations. Despite the all-day beating in the press, FB stock rebounded to close up 2% from the terrible day it suffered Monday. Then overnight, Zuckerberg responded saying the testimony was not true and the company does not prioritize profits over user safety.

Mortgage rates jumped to an average of 3.14% for a 30-year fixed-rate, conforming loan for the week. This led to a 2% decline in new purchase mortgage applications while refinance applications plummeted 10%. This came to an overall fall of 7% for loan applications for the week.

STZ reported a miss on earnings but did beat on revenue. However, AYI beat on both lines in this morning’s report. News also broke this morning that PLTR has received an Army contract overnight. STX got a downgrade from Morgan Stanley. Finally, SWX announced a deal to a pipeline from D for just under $2 billion in cash and assumed debt.

Overnight, Asian markets are mostly in the red. South Korea (-1.82%), Japan (-1.05%), and India (-0.99%) led the losses. However, Indonesia (+2.06%), and Malaysia (+1.89%) bucked the trend. Mainland Chinese markets remain closed. In Europe, markets are deeply in the red across the board as of mid-day. Analysts claim another overnight spike in the US 10-year bond rate led to the European selloff. The FTSE (-1.79%), DAX (-2.28%), and CAC (-2.17%) lead and are typical of the continent in early afternoon trading. As of 7:30 am, US Futures are pointing toward a nasty gap down on our side of the pond as well. The DIA is implying a -0.96% open, the SPY implying a -1.11% open, and the QQQ implying a -1.27% open. 10-year bond yields are up strongly to 1.55% and Oil is mildly lower as the Dollar is up sharply in early trading.

The major economic news scheduled for release on Wednesday includes ADP Nonfarm Employment (8:25 am), Crude Oil Inventories (10:30 am) and Fed member Bostic speaks twice (9 am and 11:30 am). The major earnings reports scheduled for the day include AYI, RPM, and STZ before the open. Then after the close LEVI reports.

As mentioned yesterday, calling a bottom can be a very risky business. It looks like the bears are looking to punish anyone who jumped on the rally train Tuesday. With the 3 major indices all near their premarket lows, this could be an ugly open. The trend remains bearish and the resistance overhead remains plentiful. So, be careful, and regardless of the direction you trade, be prepared for heavy volatility and intra-day swings.

Once again, remember that you do not need to trade every day or even week. Cash is a position. So think about waiting, if you want to go long in this market, or at the very least hedging your portfolio. Watch your current positions before looking to add more trades. Focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed (or FOMO) get the better of you. A good trader refuses to let winners turn into losers.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Tech Pain, FB Outage, and the Debt Ceiling

October 5, 2021 by Ed Carter

Markets gapped lower and the bear piled on with a very strong sell-off that lasted until noon. Then we saw a short relief rally leading into a sideways grind until the end of the day. However, a heavy buying pressure the last 5 minutes brought us up off the lows. This left us with large black candles that have good-sized lower wicks and there was no confirmation for Friday’s Bullish Harami signals. In particular, the tech giants (like TWTR, FB, AMZN, AAPL, MSFT, GOOG) that have led the long rally got hammered hard again. On the day, SPY lost 1.27%, DIA lost 0.92%, and QQQ lost 2.07%. The VXX was up 3% to 25.57 and T2122 is at the lower side of the mid-range at 44.61. 10-year bond yields backed off of premarket highs to end up at 1.482% and Oil (WTI) jumped another 2.20% to $77.55/barrel.

During the day, FB (as well as their subsidiaries Instagram and WhatsApp) suffered a global outage for more than 4 hours. The problem was caused by human error in the configuration of a server backbone (network between servers). This was the service’s worst outage since 2008 when FB had only 80 million monthly users instead of the current number of almost 3 billion. In other FB news, the company filed a motion requesting that the FTC’s legal case against the company (for monopolistic behavior) be thrown out and that FTC Chair Khan recuse herself from all future regulatory matters pertaining to FB.

PEP beat on both lines this morning. In addition, the company raised 2021 guidance. It did this despite higher costs from its supply chain (transportation, ingredients, labor, etc.). On the downside, North American sales growth moderated to 7%, and the Quaker Foods unit saw only 1% growth for the quarter. In other business news, SPWR announced a restructuring this morning. The move will shift the company’s focus to the booming residential solar market and sell off its commercial and industrial business units.

Also during the day yesterday, President Biden called on Congress to raise the debt limit in the next 2 weeks to avoid a first-ever default on US debt. This did nothing to change the facts but did raise fears in the bond markets. The President blamed Republicans for blocking efforts to raise the limit while claiming they are responsible for over $8 trillion of debt from the previous administration. He did not mention that this $8 trillion amounts to only 27% of the almost $29 trillion in our current national debt (or who he blames the other 73% on). Regardless, the GOP will not vote for any increase before the 2022 elections. So, the Democrats will be forced to do it unilaterally to avoid a default. (Then Republicans will persecute them for doing so in the mid-term election. This is exactly the opposite of both party’s positions in 2004 and 2006. So, it is a tried-and-true political game plan.) Treasury Sec. Yellen doubled down on the message this morning, by saying the nation faces a significant recession if we default.

Overnight, Asian markets leaned to the red side as mainland China remains closed. Japan (-2.19%) led the losses with South Korea (-1.89%) and New Zealand (-1.03%) following. India (+0.74%), Thailand (+0.60%), and Malaysia (+0.52%) led gainers. In Europe, outside of Norway (-0.36%), the region is green across the board at mid-day. The FTSE (+0.62%), DAX (+0.40%), and CAC (+0.95%) are typical of the spread we see in early afternoon trading. As of 7:30 am, US Futures are pointing toward a positive open. The DIA is implying a +0.50% open, the SPY implying a +0.45% open, and the QQQ implying a 0.40% open. 10-year bond yields are also up to 1.496% and Oil is at $78.41/barrel in early trading.

The major economic news scheduled for release on Tuesday includes August Import/Exports, and August Trade Balance (both at 8:30 am), September Services PMI (9:45 am), September ISM Non-Mfg. PMI (10 am), and a Fed speaker (Quarles at 1:15 pm). The only major earnings report scheduled for the day is PEP before the open.

The FAANG stocks started the week by taking a beating, but look to be trying to rebound at the open Tuesday. It looks as if “recovery stocks” such as banks, retail, and transports are also looking to move higher at the open. With that said, there is a lot of resistance above and the short-term trend has been strongly bearish the last few weeks. So, be very careful about calling a bottom. Knife-catchers usually lose fingers. At the very least, expect volatility to continue.

Remember that you do not need to trade every day or even week. Think about waiting, if you want to go long in this market, or at the very least hedging your portfolio. Focus on your trading process and managing the things you can control. Most importantly, consistently take profits when you have them. Don’t let greed (or FOMO) get the better of you. A good trader refuses to let winners turn into losers.

Swing Trade Ideas for your consideration and watchlist: HUT, AMN, OMC, CLDX, QS, AIG, XLU, LOW, DOG, SQQQ, UVXY. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Bears Still In Control And China Trade

October 4, 2021 by Ed Carter

Markets gave us another gap higher at the open on Friday and then proceeded to sell off the first couple of hours. However, then the bulls stepped in for a rally that lasted until 3 pm when traders took some profits at day end. This left us with bullish Harami candles with plenty of wicks in all 3 major indices. On the day, SPY gained 1.19%, DIA gained 1.45%, and QQQ gained 0.62%. The VXX fell to 26.82 and T2122 jumped back up to mid-range at 66.12. 10-year bond yields fell sharply to 1.465% and Oil (WTI) rose almost 1% to $75.74/barrel.

On Sunday, TSLA announced they had shipped 241,300 vehicles in Q3, well above the 220,900 predicted by analysts. The company also produced 237,823 cars in Q3. Both figures were well above the 201,250 shipped and 206,421 produced in Q2. As a comparison, GM delivered 446,997 vehicles in Q3, which itself was a 33% drop from the prior year due to the chip shortage.

In other weekend news, an oil spill of roughly 3,000 barrels is washing up on beaches in CA. The spill currently covers 13 square miles of ocean. The rig from which the spill originated is operated by a subsidiary of AMPY. GOOG also announced it will abandon the idea of offering bank accounts to users via Google Pay. In the announcement of this move, GOOG said it has decided that competing with banks was not as good of an idea as focusing on a digital ecosystem to be used by banks and financial services firms with existing customers.

US Trade Rep. Tai will be outlining the Biden Administration’s trade strategy for China today. She will speak to a Washington think tank at 10 am. In the speech, she is expected to announce targeted tariffs after saying that China has failed to live up to their “Phase 1 commitments” from the Trump administration trade deal. She is also expected to address “serious concerns” over China’s “state-centered and non-market practices” that were not addressed in the previous administration’s trade deal. Analysts expect China to again retaliate with their own “targeted tariffs.”

Overnight, Asian markets were mixed, but leaned to the green in uneven trade. Hong Kong (-2.19%), South Korea (-1.62%), and Japan (-1.13%) were all sharply lower. On the other side, Indonesia (+1.83%), Singapore (+1.26%), and India (+0.91%) were higher. (Mainland Chinese markets were closed.) In Europe, markets are mixed at mid-day. The FTSE (+0.15%), DAX (-0.02%), and CAC (-0.21%) lead as usual. However, smaller exchanges are split between strong gains in Russia (+0.90%) and strong losses such as Finland (-1.19%). As of 7:30 am, US Futures are pointing toward a down open. The DIA is implying a -0.30% open, the SPY implying a -0.36% open, and the QQQ implying a -0.49% open at this hour. 10-year bond yields are up sharply to 1.496% and Oil is flat as the Dollar is weaker in early trading.

The only major economic news scheduled for release on Monday is August Factory Order s (10 am). However, the regular monthly OPEC+ meeting is also scheduled to begin. There are no major earnings reports scheduled for the day.

As we start the first full week of October, it looks like the mega-cap tech names are starting the week lower, and dragging the rest of the market with them. All 3 of the major indices have now backed down from their premarket highs. In addition, markets still face that bearish trend and resistance levels overhead. So, be careful taking too much constructive from Friday’s white candle or Harami signal. Candle signals are not real until they have confirmation. So for now, the bears are still in overall control.

Consider waiting, if you want to go long in this market, and even if you trade to the short side, stay nimble because you know bear moves end faster than bull moves. Focus on your trading process and managing the things you can control. It is discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Futures Up But Chart Bearish to Start Q4

October 1, 2021 by Ed Carter

Markets gave us another bull trap Thursday with about a four-tenths of a percent gap higher met with immediate and all-day selling. This took us out very near the lows and gave us big, ugly, black candles for the session in all 3 major indices. On the day, SPY lost 1.22%, DIA lost 1.59%, and QQQ lost a comparatively small 0.37%. The VXX was flat at 27.83 and T2122 fell back into the oversold territory at 18.51. 10-year bond yields fell to 1.496% and Oil (WTI) rose slightly to $75.02/barrel.

During the day Thursday, both the Senate and House passed a government funding bill. This will keep the federal government operating until early December as well as providing for some hurricane and Afghan Refugee Resettlement aid. However, it just kicks the can down the road on the $3.5 trillion budget and avoids altogether the Debt Ceiling issue, which could result in a US default on debt if not raised in the next 18 days. On the other agenda item, the bipartisan Infrastructure Bill, House Speaker Pelosi failed to push through a vote Thursday night as the progressives of her party balked. She now “hopes” for a vote on the bill today.

MRK and Ridgeback Biotherapeutics announced they are seeking FDA emergency authorization for an oral antiviral treatment (not vaccine) that phase 3 trial results have now shown to reduce the risk of hospitalization or death by 50%. If approved, the drug, molnupiravar, would be the first oral treatment for Covid-19. As long as we’re on the subject, as of yesterday, the US has seen 44.3 million total cases and 716,847 total deaths in the country. Meanwhile, the averages have fallen back to 109,464 new cases and 1,626 new deaths per day across America.

Auto industry forecasters are now predicting that car sales plummeted in Q3. The consensus among the 3 main industry analyst groups say that sales between July and September were down 13%-14% from Q3 2020. The primary driver of this lack of sales is the global ship shortage that caused production cuts across all major manufacturers. September alone is expected to come in 25% below the 2020 sales number. While Japanese manufacturers have faired a bit better (due to keeping larger inventories of components as a normal course of business), all regions of the globe are now feeling the pain.

Overnight, Asian markets were mixed but mostly red on Friday. Japan (-2.31%), Taiwan (-2.15%), and Australia (-2.00%) paced the losers. Meanwhile, Shenzhen (+1.63%) and Shanghai (+0.90%) led the gainers as Evergrande contagion fears waned. In Europe, markets are also mostly red at mid-day. The FTSE (-1.02%), DAX (-0.65%), and CAC (-0.37%) represent a typical spread across the continent in early afternoon with only Greece and Portugal barely holding on to the green side of flat. As of 7:30 am, US Futures are pointing toward a slightly lower open ahead of data. The DIA is implying a -0.21% open, the SPY implying a -0.15% open, and the QQQ implying a flat -0.04% open at this hour. However, 10-year bond yields, the Dollar, and petroleum commodities are all down in early trading.

The major economic news scheduled for release on Friday is limited to August PCE Price Index and August Personal Spending (both at 8:30 am), Mfg. PMI (9:45 am), and ISM Mfg. PMI and Michigan Consumer Sentiment (both at 10 am). There are no major earnings reports scheduled for the day.

Welcome to October and Q4. Mr. Market seems to be greeting us with more of the same as overnight markets were down significantly, but are recovering strongly so far this morning. So, volatility remains the watchword. Overall, having broken out of their “dreaded h” patterns, the major indices are going to be seeking support below. However, it is Friday. So, many traders will be looking to reposition for the weekend.

Again, remember you don’t have to trade every day. Cash is a perfectly valid position. Consider waiting, if you want to go long in this market, and even if you trade short, stay nimble because you know bear moves end faster than bull moves. Focus on the process and on managing the things you can control. It’s discipline and good trading rules that separate trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

🎯 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