Coffee With Greta: Stocks Rally In China
DJIA Futures: -55 (-0.2%) SPX Futures: -1 (-0.01%) NASDAQ Futures: +14 (+0.1%) Good morning friends! Futures are mixed amid hopes China will relax some Covid restrictions as the country vaccinates more elderly and reported a decline in infections. Let’s get right to it! Hong Kong, Chinese Stock Markets Rally The Hang Seng index in Hong Kong rallied 5.2% overnight while mainland China’s Shanghai Composite jumped 2.3%, and the Shenzhen Component rose 2.4%. The gains came after Chinese health authorities reported an increase in senior vaccination rates in the country. Authorities say 65.8% of people “over age 80” have received booster shots, a key step toward lifting restrictions. The government also reported a decline in Covid infections from Sunday to Monday, the first in more than a week. The news prompted hope the government will lift restrictions that caused mass protests over the weekend. Chinese stocks listed in the U.S. are also rallying ahead of the open. Alibaba (BABA) is up 5.1%, JD.com (JD) is rising 6.8%, and Pinduoduo (PDD) is up 5.3%. Oil Prices Jump On Hopes of Easing Restrictions In China Oil prices are rebounding today on those hopes of easing Covid restrictions in China. West Texas Intermediate crude futures are up 2% to just under $79 bbl while Brent crude futures are up 2.5% to over $85 bbl. Expectations for another OPEC+ production cut are also supporting prices. The group meets again December 4 and analysts have suggested weaker demand out of China could prompt another cut. Upcoming Data The September S&P Case-Shiller home price index is set to be released momentarily. That index is expected to show another sharp decline in home prices as mortgage rates surged. Prices dropped 9.8% in August. The Federal Housing Finance Agency also releases its home price index for September at the same time. Then, the University of Michigan’s November consumer confidence index will be out at 10:00 a.m. ET. That index is expected to fall to 100 from 102.5 in October. BlockFi Files for Bankruptcy Crypto firm BlockFi filed for Chapter 11 bankruptcy protection on Monday. This comes after the collapse of crypto firm FTX and BlockFi listed an outstanding $275 million loan to FTX US in the filing. The firm previously halted withdrawals, saying it had “significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US.”
Continue Reading -->Coffee With Greta: Unrest In China Spooks Wall Street
DJIA Futures: -195 (-0.6%) SPX Futures: -30 (-0.7%) NASDAQ Futures: -77 (-0.7%) Good morning friends! Futures are falling as protests against Covid restrictions in China weigh on global markets. Let’s get right to it! Protests Erupt Across China Futures are falling as protests break out in China against the country’s Covid controls. Citizens have taken to the streets of Beijing, Shanghai, Wuhan, and Lanzhou. The unrest reportedly began in Xinjiang after a building fire killed 10 people and residents reportedly blamed Covid restrictions for preventing lives from being saved. Local authorities quickly declared the Covid risk had subsided afterward and lifted restrictions. China operates under a zero-Covid policy and has enacted strict lockdowns during any new outbreaks. Oil Prices Tumble To New 2022 Low Oil prices are tumbling today amid the unrest in China. West Texas Intermediate crude futures are down 2.7% to just over $74 bbl while Brent crude futures are down 3% to just over $81 bbl. WTI hit the lowest level since December 22, 2021 earlier in the session at $73.60 bbl. Both contracts have erased their gains for the year as the protests in China prompt more worries about demand. The falling oil prices are dragging down energy stocks in premarket trade with Exxon Mobil (XOM) dropping 2.2% and Chevron (CVX) falling 1.6%. Apple Faces Production Issues From China Factory Protests Apple (AAPL) shares are slipping 2.2% ahead of the open as reports say the tech giant is facing a production shortfall due to factory protests in China. Bloomberg reported the company may fall short of its iPhone 14 Pro production target by nearly 6 million units worldwide. Workers at the Foxconn manufacturing plant in Zhengzhou are among those protesting against Covid restrictions. But the Bloomberg report said Foxconn may be able to make up for that shortfall. Apple already cut its production target for the iPhone 14 by 3 million units earlier this month due to protests at the facility. Online Black Friday Sales Hit Record Shoppers spent a record $9.12 billion online shopping on Black Friday this year. That’s according to new data from Adobe Analytics which said online sales surged 221% over an average day in October. Toy sales were up 285% compared to normal shopping while exercise equipment sales jumped 218%. Overall Black Friday online sales were up 2.3% year over year. The surge came ahead of Cyber Monday today, which is the biggest online shopping day of the year. Adobe Analytics expects shoppers to spend $11.2 billion online today, which would be up 5.1% year over year.
Continue Reading -->Why Apple $144 Is Key Right Now
We have mostly red arrows around the world to start the week as China protests dominate the narrative. Markets are starting to feel the reality of slower growth. Things might start to turn towards things being too recessionary in the year ahead. Traders want to know if SPX 4033 was the high of this active sequence or if we push into Christmas. We’ll see if SPX holds the 3962-3979 range to make it easier to stay with this active sequence. If not, it can get choppier and some active participants like me will have less risk on. SPY hit a high of $402.93 last week. I do have some SPY left on, but smaller. Today, we’ll see if the $398ish area can hold, or if we have a trend down day to put this active sequence under pressure. $395.82 is the level to watch below. QQQ has lagged for the past two months. Sometimes it participates, and other times it’s a headwind. We’ll see if it can hold the $284 area. Otherwise it can see $280.72 which has to hold to avoid trouble. Watch AAPL because it has the China headline pressure. (more on this below) Now let’s get into some of the other names I’m watching: AAPL has some talk that it will lose 6 million iPhone Pro units due to factory unrest. For today, see if it holds $144 and tries to reclaim $146.93 to take the news in stride. If not, it can become a bit of headwind. TSLA: you gotta love when a Red Dog Reversal gets you this type of upside follow-through. This morning, see if it tries to hold $176 and perhaps reclaim $180.63 to go green for cash flow. If it fails to hold $176, then that oversold broken bounce might be done. MSFT acted better than most tech names in this bounce from the October lows. Some are still long. $244ish needs to hold to keep active participants long. It gets choppier below that. AMZN is green in a sea of red and we’ll see if it can stay that way. It needs to get and stay above $94.58 to get away from the danger zone. NFLX is streaky at times with some tactical things to do. Last Tuesday, it did a Red Dog Reversal around the $282.66 pivot and saw $292+ Wednesday. $277 is key support. GOOGL seems to be acting a little better since the October lows. It hit $100+ and is trying to build a bull flag. It needs to hold the $94-$96 area to stay constructive. META hit a high of $118.72 in the recent rally. Last Tuesday, it did a small Red Dog Reversal around the $109.20 pivot. There is a flag pattern building here. It’s hard to tell if it stays intact. Scott Redler Positions Disclosure as of 2022-11-28 at 8.07.25 AM
Continue Reading -->How a Head & Shoulders Top Works
In this video, Scott Redler shares how he spotted a big head & shoulders top for the S&P 500 in 2022. Link mentioned in video: Scott’s mailing list Scott shares: How the 4 big active sequences played out on the weekly SPX chart Why the head & shoulders pattern can be trickier in real life Why he thinks the market will be range-bound and tricky in 2023 How you can put the head & shoulders to work for you
Continue Reading -->Coffee With Greta: Traders Hope For Dovish Fed Minutes
DJIA Futures: -72 (-0.2%) SPX Futures: -8 (-0.2%) NASDAQ Futures: -11 (-0.1%) Good morning friends! Futures are slipping as traders look ahead to the Fed minutes and wait to find out whether the bank’s last meeting turned dovish. Let’s get right to it! Nordstrom Reports Surprise Q3 Loss Nordstrom (JWN) shares are falling 8% ahead of the open after reporting a surprise Q3 loss and lower revenue. The company blamed the $20 million loss on “supply-chain impairments”. Here’s how the retailer’s results compared to analysts’ expectations: Loss per share: $0.13 vs $0.11 EPS expected Revenue: $3.43 billion vs $3.49 billion expected Nordstrom reaffirmed its 2022 guidance for revenue growth of 5% to 7% and adjusted EPS between $2.30 and $2.60. HP Announces Global Layoffs HP Inc (HPQ) shares are up 2.9% in premarket trade after announcing layoff plans following lower fiscal Q4 sales. Here’s how the computer maker’s results compared to analysts’ expectations: Adjusted EPS: $0.85 vs $0.84 expected Revenue: $14.8 billion vs $14.69 billion expected Revenue dropped 11% year over year and unadjusted net income swung to a $2 million loss from profit of $3.10 billion a year earlier. HP forecast fiscal Q1 adjusted EPS of $0.70 to $0.80 vs analysts’ estimates of $0.86. The company expects full-year adjusted EPS of $3.20 to $3.60 and free cash flow of $3 billion to $3.5 billion. Analysts were expecting EPS of $3.54 and free cash flow around $3.88 billion. HP announced it plans to cut up to 10% of its workforce following those results. The layoffs will impact 4,000 to 6,000 employees globally over the next three years. The company said its “Future Ready Transformation plan” should save it $1.4 billion or more over that three year time period. Weekly Jobless Claims Jump to 3-Month High Weekly jobless claims rose to the highest level since August last week. The Labor Department reported 240,000 Americans filed initial claims for unemployment benefits. That was up 17,000 from the previous week and higher than expectations for 225,000. Continuing claims also rose by 50,000 to 1.55 million in the week ending November 12. Mortgage Demand Jumps As Rates Dip Mortgage demand rose last week as rates declined slightly. The Mortgage Bankers Association reported overall applications rose 2.2% on a weekly basis. Purchase applications rose 3% weekly but were still down 41% year over year. Refinance application rose 2% weekly and were still 86% lower than a year ago. The gains came as rates eased last week. The average 30-year contract rate decreased to 6.67% from 6.90%. Busy Day of Data Traders will get a rush of economic data today ahead of the stock market closure for Thanksgiving on Thursday. S&P Global releases its November manufacturing and services PMIs at 9:45 a.m. ET. The University of Michigan’s final November consumer sentiment index and consumer inflation expectations survey will be released at 10:00 a.m. ET. The Census Bureau reports October new home sales at 10:00 a.m. as well. And then the Fed releases the minutes of its November meeting at 2:00 p.m. ET. Traders are looking for signs of the Central Bank turning dovish as recent data has shown inflation cooling in the wake of the bank’s rate hikes.
Continue Reading -->Coffee With Greta: More Retail Earnings
DJIA Futures: +139 (+0.4%) SPX Futures: +18 (+0.5%) NASDAQ Futures: +45 (+0.4%) Good morning friends! Futures are higher as traders digest more Q3 retail earnings in the light holiday week. Let’s get right to it! Dollar Tree Slips On Weaker Profit Outlook Dollar Tree (DLTR) shares are falling 2.1% ahead of the open despite beating Q3 expectations. Here’s how the discount retailer’s results compared to analysts’ estimates: EPS: $1.20 vs $1.18 expected Revenue: $6.94 billion vs $6.84 billion expected Same-store sales rose 6.5% year over year. Traders soured on the stock as Dollar Tree said it expects full-year profits to be in the lower end of its prior outlook due to inflationary cost pressures. The retailer raised it sales outlook to between $28.14 billion and $28.28 billion and forecast EPS in the lower range of $7.10 to $7.40. Dick’s Sporting Goods Tops Q3 Expectations, Raises Outlook Dick’s Sporting Goods (DKS) shares are up 0.9% in premarket trade after beating Q3 expectations and hiking its outlook. Here’s how the sporting goods retailer’s results compared to analysts’ expectations: Adjusted EPS: $2.60 vs $2.27 expected Revenue: $2.96 billion vs $2.7 billion expected Comparable store sales were up 6.5% year over year. Dick’s raised its full-year earnings outlook and is now expecting a smaller decline in comparable sales. The retailer expects full-year adjusted EPS between $11.50 and $12.10 vs $10 to $12 previously. Comparable sales are expected to fall 1.5% to 3% for the year vs previous guidance for a 2% to 6% drop. Best Buy Rallies On Q3 Earnings Beat Best Buy (BBY) shares are rallying 8.2% ahead of the open after beating Q3 expectations. Here’s how the electronics retailer’s results compared to analysts’ expectations: Adjusted EPS: $1.38 vs $1.03 Revenue: $10.59 billion vs $10.31 billion Comparable sales fell 10.4% year over year vs analysts’ estimates for a 12.9% decline. Best Buy reiterated its outlook for the key holiday quarter and improved its full-year outlook. The retailer expects full-year same-store sales to fall about 10% vs previous guidance for down about 11%. Zoom Drops On Light Forecast Zoom Video Communications (ZM) shares are tumbling 7.5% in premarket trade as disappointing sales guidance overshadows a Q3 earnings beat. Here’s how the company’s results compared to analysts’ expectations: Adjusted EPS: $1.07 vs $0.84 expected Revenue: $1.10 billion, in line with expectations Revenue was up 5% year over year vs 8% growth in Q2. But net income plummeted by $291.9 million. Zoom lowered its full-year revenue guidance, now expecting $4.37 billion to $4.38 billion in sales vs the average $4.4 billion analyst estimate. The company expects full-year adjusted EPS of $3.91 to $3.94, beating analysts’ expectations and up from its previous forecast.
Continue Reading -->Coffee With Greta: Disney Bucks the Downtrend
DJIA Futures: -21 (-0.1%) SPX Futures: -15 (-0.4%) NASDAQ Futures: -62 (-0.5%) Good morning friends! Futures are slipping as the holiday-shortened week begins but Disney shares are bucking the downtrend. Let’s get right to it! Iger Back, Chapek Out At Disney Walt Disney (DIS) shares are rallying 10% ahead of the open following news that former CEO Bob Iger is back in the position. Disney announced late Sunday it had reappointed Iger as CEO effective immediately, replacing Bob Chapek. The company sharply missed Q3 expectations earlier this month as costs swelled. Disney said Iger has signed on to serve as CEO for two years “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.” Chinese Stocks Slip Chinese stocks listed in the U.S. are falling in premarket trade amid the latest surge in Covid cases in China. Alibaba (BABA) shares are down 3.1%, JD.com (JD) is falling 5.2%, Baidu (BIDU) is down 2.1%, and Pinduoduo (PDD) is sliding 2.6%. Three Covid-related deaths were reported in Beijing over the weekend, the first since May. The overall number of cases in the country is also surging. China has implemented strict lockdown measures amid outbreaks as the country operates on a zero-Covid policy. Oil Prices Fall On Chinese Demand Concerns The Covid outbreak in China is also putting pressure on oil prices this morning. West Texas Intermediate crude futures are down 0.7% to under $80 bbl while Brent crude futures are down 0.6% to just over $87 bbl. Both benchmarks closed Friday at the lowest since September 27. A rebound in the strength of the U.S. dollar is also putting more pressure on prices. Thanksgiving Week This will be a shortened week with the Thanksgiving holiday on Thursday. The stock market will be closed Thursday and open until 1:00 p.m. on Friday. Trading volume is typically light during this holiday week as many traders take time off. The bulk of economic data for the week comes out on Wednesday. Those reports include October durable goods and capital goods, weekly jobless claims, S&P manufacturing and services PMI, November consumer sentiment, October new home sales, and the Fed’s November meeting minutes.
Continue Reading -->Would I Buy Disney?
We have mostly red arrows around the world to start this holiday-shortened week. Remember the market is closed Thursday and shuts at 1 pm Friday. Europe is lower with the DAX -0.6%, CAC -0.2%, and FTSE -0.1%. Asia is lower. The Hang Seng is -1.8% but it’s had a huge move off the lows. The Fed’s Bostic said “we may be done within 75bp-100bp” this weekend. SPX futures are -24 to start the week. The question is do we hold the 3906-3935 area to keep this active sequence intact for another move above 4028? Or was that it? The next day or two will be important. DIS is gapping up on Iger’s return but I wouldn’t chase it. $102ish is resistance Now let’s get into some of the other names I’m watching: AAPL isn’t special but gives opportunities. If this market is going to hold up this week, it will need this to be decent. This morning it’s below the $149.97 low from Friday. See if that gets reclaimed. If not, $148.56 is key. I have some calls on, but no stock. I’ll see if it’s buyable today with a signal. TSLA lost special status on 9/21-9/22 when it broke $305. It has been for sale since then. On Friday it toyed with the lows of the year as it hit $176.50. See how it handles that spot today. Elon Musk created his own problems with Twitter. The monthly chart has been super bearish for a while now. NFLX: Ryan Cohen is building an active stake but that isn’t affecting the price this morning. It hit $312 and broke $299. We”ll see if it can go red to green and reclaim Friday’s low of $287 to relieve some pressure. GOOGL hit a high of $100.14 in this oversold rally. Now it’s faltering. See if it tries to reclaim $96.37. Otherwise it can see $94 pretty fast AMZN’s bounce was lethargic. It hit a low of $92.48 That’s your new pivot support to trade against. META hit a high of $118.72 in the recent rally. Now, see if it can hold $109.80. See if it can go red-to-green today for cash flow. Scott Redler Positions Disclosure as of 2022-11-21 at 7.37.58 AM
Continue Reading -->2 Minute Reversals Webinar Replay
Check out our latest webinar with JR Romero of Newsbeat, where he teaches his #1 Day Trading reversal strategy After you watch the video, check out our Black Friday sale!
Continue Reading -->Coffee With Greta: Ending the Week Higher
DJIA Futures: +225 (+0.7%) SPX Futures: +35 (+0.9%) NASDAQ Futures: +109 (+1%) Good morning friends! Futures are higher as traders digest the latest batch of positive retail earnings and assess the Fed’s plan for interest rates. Let’s get right to it! Gap Rallies On Surprise Q3 Profit Gap Inc (GPS) shares are up 8.5% ahead of the open after reporting a surprise profit in the third quarter. Here’s how the clothing retailer’s results compared to analysts’ expectations: Adjusted EPS: $0.71 vs $0.00 expected Revenue: $4.04 billion vs $3.82 billion expected The company did not issue full-year guidance but said it expects overall net sales to be down mid-single digits yera-over-year in Q4. Gap made progress in reducing extra inventory last quarter but the CFO said the company will “continue to take a prudent approach in light of the uncertain consumer and increasingly promotional environment as we look to the remainder of fiscal 2022.” Inventories were up 12% year over year in Q3 vs 37% in Q2 and 34% in Q1. Foot Locker Surges On Profit Beat Foot Locker (FL) shares are surging 14% ahead of the open after beating Q3 expectations and hiking its full-year outlook. Here’s how the shoe retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.27 vs $1.11 expected Revenue: $2.17 billion vs $2.09 billion expected Same-store sales: +0.8% vs -6% expected Foot Locker reduced excess inventory with merchandise inventory up 29.5% year over year in Q3 vs 52.1% in Q2. The company forecast full-year adjusted EPS of $4.42 to $4.50 vs $4.25 to $4.45 previously. Foot Locker expects net sales to fall 4% to 5% vs 6% to 7% previously and same-store sales are expected to be down 4% to 5% vs 8% to 9% previously. Ross Stores Jumps On Upbeat Outlook Ross Stores (ROST) shares are soaring 16.3% ahead of the open after topping Q3 estimates and raising its full-year guidance. Here’s how the discount retailer’s results compared to analysts’ expectations: EPS: $1.00 vs $0.81 expected Revenue: $4.6 billion vs $4.37 billion expected Same-store sales: -3% vs -7.8% expected Ross now expects full-year EPS of $4.21 to $4.34 compared to the prior forecast of $3.84 to $4.12. Same-store sales are expected to be flat to down 2% in Q4 with EPS of $1.13 to $1.26. That topped analysts’ estimates for same-store sales to decline 4.6% and EPS of $1.13. Tesla Recalls 30,000 Vehicles Tesla (TSLA) shares are up 1.1% in premarket trade despite the electric automaker recalling about 30,000 vehicles. That recall was issued due to a problem that may cause the front passenger air bag to deploy incorrectly in nearly 30,000 Model X vehicles. Tesla issued the recall voluntarily and said it is not aware of any crashes, injuries, or deaths related to the problem. The issue will be fixed through an over-the-air software update. Existing Home Sales On Deck The National Association of Realtors reports October existing home sales at 10:00 a.m. ET today. That report is expected to show sales fell to a seasonally adjusted annual rate of 4.37 million units last month from 4.71 million in September. The housing market has seen a steep decline in activity as mortgage rates surge.
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