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Markets May Press Pause for Weekend

May 15, 2020 by Ed Carter

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Market Waits on Jobless Claims

May 14, 2020 by Ed Carter

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

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

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

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

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

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Powell to Speak as Congress Haggles

May 13, 2020 by Ed Carter

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

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

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

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

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

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

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

CPI and FOMC Speakers Today

May 12, 2020 by Ed Carter

The week started with a small gap lower, but the bulls stepped in quickly to lead a slow and steady recovery to the highs by mid-afternoon. However, the last 2 hours were a bit of a roller coaster ride that ended the day near where we closed Friday. That said, the tech names helped the NASDAQ outperform Monday. On the day the SPY was up 0.06%, the DIA down 0.44%, and the QQQ up 0.89%. VXX fell more than expected to 32.70 and the T2122 also fell sharply to 72.11, once again outside of the overbought area. The 10-year bond yield rose to 0.71% while Oil (WTI) was flat at $24.73/barrel.

In relief/political news, it was announced Monday that there is now a Republican co-sponsor and 2-3 Republican Senators “almost willing” to support a bill sending $500 billion in money to state and local governments. Meanwhile, on the House side, they have pushed off any vote for another relief bill until at least Friday (perhaps waiting on the Senate). Finally, Dr. Fauci (NIH) will be testifying to the Senate as Congress begins their oversight hearings of virus and relief programs. On top of that, the Fed will also start its corporate bond-buying program today by buying specific ETFs (that hold bonds downgraded during virus). There was no word on which ETFs they will buy.

On the Virus front itself, the global headline numbers are 4,274,648 confirmed cases and 287,670 deaths. In Asia, the uptick continues with clusters of new cases found in China (including Wuhan), South Korea, Japan, and Singapore. The good news there is that the clusters are small-enough and testing/tracing capability large enough in those places that the “uptick” at least has the strong potential to be stopped before it becomes widespread.

In the US, we have 1,385,893 confirmed cases and 81,796 deaths. New York state announced that 3 of its rural regions are ready to open on Friday. In the oil patch, pipeline company ETP said about 25% of US shale fields that had been shut down have now been turned back on at least in the Permian Basin. Meanwhile, in CA, TSLA reopened its Fremont plant in spite of County Health Department orders. The Governor of CA said he was unaware but will look into the matter, but city and county law enforcement did not intervene.

Overnight, Asian markets were mixed, but mostly red for Tuesday. Again, this was mostly on small moves (closer to flat), with the exceptions of Hong Kong and Australia, which were both down over a percent. In Europe, markets are mixed so far, but on the green side, with only the FTSE (+0.96%) near a 1% move. As of 7:30 am, US futures are on the green side of flat, now pointing to a 0.20% gap higher at the open.

The major economic news for Tuesday includes Apr. CPI (8:30 am), FOMC Speakers (Harker and Quarles both at 10 am), 10-yr Bond Auction (1 pm), Apr. Budget Bal (2 pm), and FOMC Speaker (Mester at 5 pm). However, among major companies, AGN, DUK, HMC, IR, MAC, and VSH also all report before the open.

The bulls still have control of the momentum. However, resistance is close overhead and it seems like markets are showing some caution, perhaps due to fear about the speed or strength of the reopening. Keep in mind that we are seeing volatility every day, with a lot of gaps and reversal action. So, focus on the short-term chart in front of you. Don’t chase and remain cautious about longer-term swing trades, unless you can take some short-term pain. However, the trend is clearly bullish.

Trade Ideas for your consideration and watchlist today: MGNX, LXRX, MYGN, BECN, TLRY, JAZZ, FRPT, DISH, MUR, AMLP. 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

Futures Jittery Before New Week

May 11, 2020 by Ed Carter

The bulls ran hard on Friday, gapping up over a percent and then, after brief “fade the gap” profit-taking, ran steadily all day. The “reopen stocks” such as MGM, DIS, and airlines like DAL and AAL led the way. Prices also closed very near the highs. On the day the SPY gained 1.65%, the DIA gained 1.97%, and the QQQ gained 1.37%. The VXX was down briskly to 34.95 while the 4-week High Low Ratio T2122 spiked up into overbought territory again at 91.02. The 10-year bond yield was up to 0.685% and Oil (WTI) also gained to $24.63/barrel.

As expected, the April jobs number showed heavy job losses (-20.5 million) to raise the unemployment rate to 14.7%. However, this is less than half of the 30% predictions of some unhappy with a shutdown had predicted. Even if the worse lies ahead, at the very least, the market now seems to have moved well past concern for the economy as all the major indices are up 35% off the lows at the end of March (and QQQ is within 5.5% of all-time highs again).

For their part, the Fed is comfortable enough with the economic situation (or at least the market) that they will reduce bond-buying to $7 billion per day this week. Yet, at the same time, on Sunday Fed voter Kashkari said the true unemployment rate is 23-24%. He said while the Fed will do everything it can, but he still urged the fiscal side (Congress and President) to do more to help the public as he expects a gradual (not rapid) recovery. Treasury Sec. Mnuchin seemed to agree, saying unemployment is likely higher than reported Friday and he expects things to get worse before they get better.

However, President Trump and Republicans seem to disagree. Both say now that businesses have the stimulus needed (to survive), they are in no hurry to do additional relief. The idea is that financial hardship for individuals might help force the high unemployment numbers back down. In addition, by rejecting CDC guidelines the administration has already removed potential roadblocks to rapid rehiring (at the risk of potential relapse). Of course, this may just be posturing ahead of more negotiations with Democrats. The Republicans want more tax cuts and the Democrats want both more relief (for State/local governments and another round of payments for the public) as well as an infrastructure bill.

On the Virus front itself, the global headline numbers are 4,200,957 confirmed cases and 284,150 deaths. In Asian, South Korea reported a new outbreak (nightclub related) and Japan also saw a cluster of cases in Tokyo. However, the good news continues in Western Europe with steady declines in new case rates in most countries. The outliers are the UK (just now plateauing as the last European country to lock-down), and Russia (which is still in epidemic mode, seeing a new record high number of cases each day). However, the UK did begin its reopening by “actively encouraging” people to return to work (while also avoiding public transport) as of today. Likewise, France also began its reopening on Monday.

In the US, we have 1,367,963 confirmed cases and 80,787 deaths. The impact of reopening remains unclear at this point. Some states that have at least partially reopened, such as CA, TX, OH, CO, and NC are seeing significant increases in new case rates again. However, other states doing the same, such as FL and GA, are not seeing increases. It’s unknown if this anomaly is due to differences in testing or some other variable. On the other hand, there is no hard data yet, but there have been significant anecdotal reports that both public participation in reopening and adherence to guidelines is sporadic nationwide. So, we have not seen the hoped-for economic impact, nor have we seen a universal strong increase in spread either.

Overnight, Asian markets were mixed on Monday, but with smaller moves. The exceptions were Japan (+1.05%) and Hong Kong (+1.53%). In Europe, markets are decidedly in the red so far today. However, like Asia, more European moves have been smaller as of now, with the exception of France (-1.41%). As of 7:30 am, US futures are pointing to a half of a percent gap lower at the open.

There is no major economic news for Monday. However, AEE, AN, CAH, COTY, ET, ETR, MAR, MGLN, MYL, ON, UA, UAA, UNVR, and ZBH all before the open.

The bulls remained in rally mode last week. However, resistance is close overhead. Remember that volatility is a constant now for traders, with a lot of “gap and fade” action. So, focus on the short-term chart in front of us. Remain cautious about longer-term swing trades, unless you can take some short-term pain.

Trade Ideas for your consideration and watchlist today: GPOR, QRTEA, ITCI, AQST, SHAK, VLO, CRUS, X, LOPE, ARNA, TWTR, BSX. 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 Not Worried Pre-Payrolls

May 8, 2020 by Ed Carter

Another gap higher Thursday was met with a roller coaster that ended up selling back down in to the gap. This gave us high-wick indecisive candles. The SPY closed up 1.21%, the DIA up 0.87%, and the QQQ up 1.29%. VXX was down correspondingly to 37.47 while T2122 remains in the mid-range at 64.84. The 10-year bond yield was up to close at 0.643% and Oil (WTI) held ground, closing at $23.79/barrel.

Like watching a car wreck that’s about to happen, markets have seemed to be waiting on this morning’s jobs report. At the same time, we know it’s going to be terrible and the bulls have long ago decided that the worst is past us.

On the Virus front itself, the global headline numbers are 3,936,270 confirmed cases and 271,180 deaths. Opening continues to be the lead story around the world in spite of concerning signs like a 6^th straight day of record-high cases in Russia, a record death toll in Mexico, a death toll uptick in Spain, and new outbreaks in places like South Korean nightclubs. Among the openings were school openings in France and Norway, travel restriction easing in Hong Kong, Indonesia and Singapore.

In the US, we have 1,292,879 confirmed cases and 76, 429 deaths. The important US virus-related news seems to be public’s less than stellar adherence to guidelines (or even of showing civility). Several incidents of shootings and physical attacks on people trying to enforce guidelines have made news and there has been a mass disregard for distancing or mask usage in many parts of the country. This comes as more crowded venues (like factories, malls, etc.) open every day. This just points to how hard it will be to control spread or lock down again if needed to contain the spread.

Overnight, Asian markets were all in the green. In Europe, the same is true with the exception of Russia so far today. As of 7:45 am, US futures are pointing to a one percent gap higher at the open as traders seems to be expecting no bad shock from the jobs number.

The major economic news for Friday includes Apr Avg. Hourly Earnings, Apr Nonfarm Payrolls, Apr Participation Rate, and Apr Unemployment Rate (all at 8:30 am). The earnings are limited to ATH, AXL, BLMN, BR, EXC, GLP, IEP, KIM, LEA, NBL, PBF, PNW, PPL, SABR, TEN, VTR, and XRAY all before the open.

The bulls seem to have decided the worst is behind us. However, they are running low on follow-through steam lately. Fortunately for them, the bears have no energy either. The payroll report and more importantly market reaction will call the tune today. Just remember that volatility remains a constant companion for traders. So, all we can do is focus on the short-term chart in front of us. Remain cautious about longer-term swing trades, unless you can take some short-term pain. Finally, remember it’s payday..take profits where and when you can.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Market Seems To Be Waiting

May 7, 2020 by Ed Carter

After another gap-up open, there was a struggle for control as markets rode the rollercoaster for an hour. However, after 11am the bears were firmly in control the rest of the day. Another late-afternoon selloff led to closing on the lows as the SPY lost 0.68% on a Bearish Engulfing candle, the DIA lost 0.81% on a big black candle, and the QQQ managed to gain 0.62% on a Doji-like candle. The VXX gained slightly to close at 39.21 and T2122 remains in the mid-range. The 10-year bond yield rose to 0.708% and Oil (WTI) finished slightly down at $24.15/barrel.

The big story pre-market was ADP Payrolls reported down over 20 million jobs for April. However, this number still was not as bad as estimates or even just the total of the most recent 4 weeks of new Unemployment Claims. So, I don’t know how much read-through this might give for Friday’s official April number. During the day, Oil reflected the recent rally with some profit-taking and at the same time, US production cuts showed as oil inventories came in much lower than expected.

On the Virus front itself, the global headline numbers are 3,843,204 confirmed cases and 265,657 deaths. In Europe, Russia continues to report record daily new cases. At the same time, the Mayor of Moscow took his life in his hands when he said he believes the true number of cases in his city is at least 3 times the official number. In the UK, the Bank of England said the UK economy may shrink 14% in 2020. Germany also reported an uptick in cases as PM Merkel announced “Emergency Brake” plans in case the spread grows too much post easing.

In the US, we have 1,263,243 confirmed cases and 74,809 deaths. Wednesday the President reversed himself again, saying the coronavirus task force will remain in place indefinitely, but again said they now are focused on vaccine development. At the same time, Trump’s rhetoric on China continues to escalate and the trade leaders of the two countries will be meeting again.

Overnight, China reported April Exports rose 3.5% (expectation was a 15.7% decline). Still, Asian markets were mixed and did not show as many big moves as typical of the last few months. In Europe, markets are green across the board so far today. However, they too are not giving huge moves, but instead steady climb so far. As of 7:30 am, US futures are pointing to a one percent gap higher at the open.

The major economic news for Thursday is limited to Weekly Initial Jobless Claims and Q1 Nonfarm Productivity (both at 8:30 am) and a Fed speaker (4 pm). However, on the earnings front, AAN, AAWW, ABC, AES, AMRK, BCE, BDX, BGG, BHC, BLL, BMY, BUD, CBRE, CFX, CLMT, CNP, CNQ, CRL, CTB, CTVA, DHR, DISH, ENB, ES, FIS, FOLD, GCI, HES, HFC, HII, HLT, IRM, IT, JBLU, MT, NRG, PENN, PWR, RLGY, RTX, TEVA, VIAC, and XEL all report before the open.

The bulls ran out of steam yesterday. However, the bears are not exactly “killing it” either. It’s as if the market were waiting on Friday’s payroll report, expecting it to be some sort of surprise. Regardless, we may see a new lower-low Thursday as that is the direction of drift now. Volatility remains a constant companion for traders. So, all we can do is focus on the chart in front of us. Continue to be cautious about longer swing trades, unless you can take some short-term pain.

Trade Ideas for your consideration and watchlist today: CGBD, RYAM, ALGN, NKE, FFIV, FMC, BWA, JAZZ. 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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Oil Keeps Racing Higher on Demand Hope

May 6, 2020 by Ed Carter

Tuesday was a struggle between the bulls and bears. Markets gapped a bit over 1% higher at the open. After a morning follow-through for another percent, the bulls ran out of steam. Markets ground sideways until 3pm, when a strong selloff drove us back down to the gap at day-end. As a result, all 3 major indices printed high-wick candles that are at best indecisive. The QQQ and DIA look more bearish in flavor. On the day the DIA gains 0.58%, the SPY 0.92%, and the QQQ 1.13%. VXX fell back to 38.67, while the 10-year bond yield rose to 0.662%. Oil (WTI) continued its recent tear rising another 23% (5 consecutive days of strong gains) to close at $25.12/barrel.

During the day, US Household Debt was reported at $14.3 trillion. This was another record high, up 1.1% in Q1 on a 23^rd straight quarter of increased borrowing. The debt remains just shy of the 2007 record (inflation-adjusted) $15 trillion. This increase came in-spite of creditors tightening standards in Q1 and most of the quarter coming before virus economic damage was significant. Fed Vice Chair Clarida also said more help may be needed, but his baseline forecast is that economic growth will begin again in Q3. However, he also said he expects the downturn to continue through Q2. It is possible that this view of Q2 (CNBC interview) helped spark the selloff at 3pm Tuesday.

After the close, the President confirmed he’ll disband the coronavirus task force, maybe as soon as month-end. He said the US economy must open, even if more Americans get sick or die, which he also said was inevitable. So, he’ll be replacing the virus task force with one focused on economic growth. Clearly, he assumes the infection increases will not be economically crippling and losses will be acceptable.

In an unrelated story, a Los Alamos National Lab report raised concerns over future treatment and vaccines. The report said there are now 14 strains of COVID-19. The primary strain in the US (and world) came from a mutation in Europe. Two parts of this are concerning. First, the now dominant strain seems more contagious than the two strains that China sequenced and reported in late January. Second, any mutations are likely to impact the efficacy of treatments or vaccines that were based on the original genetic sequence.

On the Virus front itself, the global headline numbers are 3,747,400 confirmed cases and 258,973 deaths. In Europe, only 5 countries are still not reporting declines in the new case rate and of those, only Bulgaria is reporting an increasing rate. This lends more credence to European reopening timelines. Still, the EU reported that it expects its economy to shrink 7.5% for the year (down from a February forecast of +1.4%).

In the US, we have 1,238,083 confirmed cases and 72,285 deaths. Signs show that the economy is picking back up again as Weekly mortgage applications rose for the third straight week, up 7% week-on-week. WEN made a couple of stories. It reported same-store sales rebounded hard as customers come back in droves. However, they also reported that 18% of their stores have run out of beef. It is worth noting that COST and KR both implemented meat rationing for their customers in the last few days.

Overnight, Asian markets were mixed. In Europe, markets are mixed, but leaning more to the green side so far today. As of 7:45 am, US futures are pointing to a three-quarters of a percent gap higher at the open.

The major economic news for Wednesday is limited to ADP Nonfarm Employment (8:15 am) and Oil Inventories (10:30 am). However, AEP, ALXN, AXTA, BG, BWA, CDW, CVS, CNHI, DISCA, DISCK, FLIR, FMS, FTS, GM, GOLD, GPC, KKR, MEET, MFC, NI, ODP, OMI, PAG, SMG, SPR, TMUS, VMC, WM, and ZTS are among those who report before the open.

As said yesterday, the bulls and bears are still struggling. So, volatility and gaps will remain the standard. However, in the short-term it appears the bulls want to take us back up to at least retest resistance above. All we can do is focus on the chart in front of us. Continue to be cautious about longer swing trades, unless you can take some short-term pain.

Trade Ideas for your consideration and watchlist today: CVE, ABBV, PAGS, ABT, LMT, SNAP, EBAY. 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

Some Firms on Rocks But Bulls See Light

May 5, 2020 by Ed Carter

Monday saw a gap down of about 0.8% in the major indices. However, shortly after this the bulls started a slow climb back into the game. The day ended just on the green side of break-even in the large-caps while the tech-heavy QQQs led the way. For the day, the SPY was up 0.28%, the DIA up 0.06%, and the QQQ was up 1.17%. The QQQ also managed to print a bullish engulfing candle. At the same time, the VXX was down slightly to 40.26 and T2122 (4-week High Low Ratio) fell to exactly the mid-point between overbought and oversold territory at 50. The 10-year bond yield was flat, technically closing down to 0.63 and Oil (WTI) continued its rally up over 7% to $21.18/barrel.

During the day the Treasury Dept. announced it will be borrowing $3 Trillion (bond sales) this quarter. However, except for the exact number, this was expected due to the massive stimulus and relief packages already signed into law. Meanwhile, the FDA said it will start to crack down on COVID-19 antibody tests. In the panic to get tests to the public, over 250 antibody tests were taken to the market. However, it has been reported that many of them give over 50% “false positives” (more than half the people who are told they have antibodies turn out not to have them). This crackdown should start in the next 10 days and may well impact a number of medical sector tickers.

After the close, HTZ announced it has retained an advisor for help with bankruptcy proceedings. LB also announced it had ended its deal to sell the Victoria’s Secret brand to a private equity firm. Meanwhile, in supply chain news, earlier in the day TSN again warned of potential meat shortages despite an Executive Order forcing plants to remain open. They cited US hog processing capacity having been cut in half. After the close, SHAK confirmed by reporting they’ve seen significantly higher beef costs and expect the price hikes to continue.

On the Virus front itself, the global headline numbers are 3,663,961 confirmed cases and 252,758 deaths. Reopening continues throughout Europe with mixed results. While crowds waited on department stores to open in Austria, many Italian retail businesses said it wasn’t worth the effort to open shop since no customers showed up. Germany reports a similar story as Italy on retail, but its manufacturing sector seems to be well on its way back to capacity.

In the US, we have 1,213,010 confirmed cases and 69,925 deaths. A CDC report (marked with HHS and Homeland Security Dept. seals and dated May 1st) was leaked Monday. The document said it expects to see virus spread and deaths accelerate by June with the mid-point of several forecasts being 200,000 new cases and 2,500 deaths per day. The White House disclaimed the report saying it didn’t reflect any modeling done by the task force itself. (For reference, the US now sees about 25,000 new cases and 1,200 deaths per day.) Meanwhile, SBUX reports 85% of its stores nationwide will be open by Friday. So, US reopening continues and at least we can get coffee while we argue over forecasts.

Asian markets of questionable value today. China, Japan, and South Korea were all off for a market holiday Tuesday. In Europe, markets are in the green across the board at this point in the day. As of 7:30 am, US futures are pointing to a three-quarters to one-percent gap higher at the open.

The major economic news for Tuesday includes Mar. Import/Exports (8:30 am), Apr. Services PMI (9:45 am), and Apr. ISM Non-Mfg. PMI (10 am). Earnings before the open include D, FCAU, NEM, ITW, DD, SYY, INCY, MPC, REGN, SPG, TDG, AME, XYL, MLM, VTR, WRK, HSIC, AOS, IPGP, SEE, ALK, KEX, ACM, WRK, ADNT, USFD, ARMK, LDOS, HSIC, AGCO, W, INGR, TRI, TA, and AME.

The very recent pullback remains in place, but the bulls were in control all day (after the open) yesterday. Volatility and gaps remain the standard. However, it appears the bulls want to take us back up to at least retest resistance above after Monday’s bounce. Focus on the chart in front of you. Continue to be cautious about longer swing trades, unless you can take some short-term pain.

Trade Ideas for your consideration and watchlist today: VLO, PNR, COP, ADP, TECK, PH, NXPI, GNTX, EMR, SIRI. 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

Bad BRKB Report and a Lower Open

May 4, 2020 by Ed Carter

As we turned the page to a new month, Friday turned a positive week negative. Bad earnings news from AAPL and AMZN, and post-April profit-taking led to a 1.75% gap-down. Then, after a late-morning selloff, markets spent the afternoon just grinding sideways near the lows. For the day the SPY was down 2.74%, the DIA down 2.44%, and the QQQ down 2.82%. The VXX rose on this performance to close at 41.19. The 10-year bond yields fell slightly to 0.618% and Oil (WTI) rose again to get back to $19.69/barrel.

The big weekend news was that Berkshire lost $50 billion (largest ever) in the last quarter. It sold its entire stake in 4 airlines at a big loss to get out of that industry altogether. We also learned they had not bought the recent bottom. In fact, Warren Buffett said “We’ve not bought anything because we don’t see anything that attractive (to buy).” So, BRKB is still amassing cash and now has $137 billion of cash on hand.

In other weekend news, Larry Kudlow (Chair NEC) told reporters on Sunday that the White House hasn’t yet made a decision on a third round of PPP, but said it may be needed. In the meantime, he was promoting the administration’s ideas of a payroll-tax holiday as well as going back to 100%-deductibility for business meals and entertainment.

On the other side of the easing argument, Bloomberg reports economists are just starting to worry that ultra-loose monetary and fiscal policy may cause inflation. In particular, economists at the Bank of England, International Monetary Fund, and some of the large banks are worried that pressure to keep easing in place will cause runaway inflation. Concerns aren’t major at this point, but it points to the fine line the Fed must walk now that Congress and the Administration are in a “buy our way out of this” mode.

On the Virus front itself, the global headline numbers are 3,584,116 confirmed cases and 248,641 deaths. Russia has recorded 3 consecutive days of a record-high number of new cases (now well over 10,000 new cases per day). However, the biggest international virus story seems to be the rise in the rhetoric of blaming China for the pandemic and “holding them accountable.” Of course, China responded with its own propaganda about the US. In and of itself this is not important, but the war of words does raise the specter of another round in the trade war, particularly in an election year, which the global economy may not be in as good a position to handle as it was last year.

In the US, we have breached the million-case mark, with 1,188,826 confirmed cases and 68,606 deaths. 31 states had some easing or reopening as of the weekend. Of those, only 17 have actually achieved the 14-day new case rate reduction that was recommended by administration guidelines. Activity and hope are increasing. Only time will tell if it was too soon or false hope. However, it’s the course our leaders chose and all the rest of us can do is embrace it as cautiously as possible.

Overnight, Asian markets were mixed after a 3-day weekend. Japan, Hong Kong, South Korea, and India were down sharply. However, China, Australian, and smaller countries like Thailand were well in the green. In Europe, markets are deeply in the red after their own 3-day weekend. The FTSE is only off a third of a percent, but the set seem to be down over 2% at this point in the day. As of 7:30 am, US futures are pointing to a half to one-percent gap lower at the open.

The uptrend was broken Friday on the first consecutive down day in over a week. Still, there is potential support not far below and the Bulls have clearly been focusing on the good (and hope) and ignoring the bad news during the last 5+ weeks. Volatility and gaps remain the norm. We can also expect bad economic news to continue.

So, all traders can do is focus on the chart in front of us. However, in such uncertainty and somewhat unexplained strong rebound, we either need to be fast (day trade) or slow (longer-term holds). Be very cautious about swing trades, unless you can handle significant short-term pain.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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