Fed Reserve Chaos, $CRM $M $HPQ

Chaos, Confusion, Earnings & Tariffs

Amid all the thick smoke on Fed confusion resulting in futures gains of close to 0.5% earlier this morning, here comes the 10% tariffs on Autos by China causing even more confusion as Larry Kudlow, and Donald Trump insinuated that progress was being made on the trade talks. It is important to note that the September deadline to implement more tariffs on China is still in place.

On a lighter note, it looks like the real tariff man is Xi Jinping.

Watchlist

The stocks that are moving this morning are: $M, $HPQ on downgrades, and $CRM on an upgrade

Salesforce(CRM)

Salesforce posted impressive earnings : 66c on revenue of $4B vs 47c & $3.95B expected.

There is a pretty good chance that Salesforce shares could rally toward $161 - which is the top of the trading channel. 

$M and $HPQ  could drop even more as they are now under their lower channels. 

Wait, but I Thought..$QCOM $SHOP $HD

As expected, the market seesawed from red to green several times as the yield curve inverted. boy oh boy. The fear began to resurface as traders began to raise concerns about a recession in this unique situation that doesn't have that much history to draw upon.

What you care about

What happened to individual stocks was essentially business as usual. (QCOM) Qualcomm held its own as it roared back to highs of the day after going red for a while. We noticed weak volume, so, one needs to monitor it for increasing volume. On the other hand, our second pick from yesterday ($SHOP) Shopify remained in the red all day. This is typical after several days of gains, so there is no cause for alarm.

Home Depot (HD) America's barometer for the consumer economy as it pertains to Homeowners chugged right along as investors remained impressed with their outstanding earnings. This is enough to keep the stock firing higher.

Technically, the confirmation of bullishness occurred today; call it day 2.

Price action like this culminates in an impulsive move - stay tuned!

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Stocks on the verge of a Breakout $QCOM, $SHOP

Today, the market sustained the rally going into the FOMC minutes. We got clarity on the "Midcycle adjustment" comment from the rate cut last month.  Jerome Powell the Fed president said that the July rate cut was just a re calibration, and not part of a preset course for more quantitative easing.

The market's reaction was positive, as market watchers counted it as a vote of confidence in the economy to support the strong macroeconomic data that we have seen over the course of the last year. Jerome Powell made it clear that it was divided with the President of the United States on rate cuts to make up for trade. 

What we learned was that the market has an upward bias in the market reaction is that there are more gains to come. These time, it should be no different as the usual suspects should continue to gain and add to their already impressive gains for the year. 

Stocks to keep an eye on are: 

Qualcomm (QCOM)

LG announced that its phones will use Qualcomm's powered Snapdragon chip

Qualcomm has an average price target of $79

Shopify (SHOP)

Shopify has been on a tear lately, on the back of its stellar earnings

With an average price target of $420

I will update you on these names as their breakouts progress. 

Backlash of Trump's Cockiness - Note of Caution

Quick Catch up

Unless you have been hiding under a rock, you know that President Donald Trump is waging a an economic war against China. This war has been going on for well over a year now, and has taken a toll on U.S farmers. The market has started to react to the trade war again like it did in December 2018. This time, there are more challenges that could pack a punch that is powerful enough to land the market on its back.

Americas losses are adding up

U.S Farmers have been not only seen soy imports slow down over the course of the year since China and the U.S have been at this trade war. In fact, some have not seen any business activity since Trump's reaction on twitter.

The Pain

Since the recent threats by the President to add a 10% tariff on the final items effective September 1st, the market has had more volatile days bringing the total losses since the announcement to about 4%. This has resulted skittishness by the market watchers. Of course, no one wants to be the fool in a game of chicken where the greater fool is the person that buys the breakout that has no follow through. 

Government interference in the Market

The Federal Government , Donald Trump has used his twitter account to wreak havoc on the United States consumer with erratic twitter rants that require psychologists in some cases to decipher. These rants are not limited to calling the Fed President (Jerome Powell) Clueless,

The Fed

The last time we heard from the FED president, he confused the market by saying that he was easing the interest rates by 25 basis in what he termed a "Mid cycle adjustment". This language rattled the market and caused a few volatile days that had the fear index wake up from a protracted lull. We are on Fed watch this week, and are essentially waiting on the Fed president to clarify his justification of the last rate cut. Any explanation that doesn't satisfy the market will be an open invitation to short sellers. 

Inversion of the yield curve & Jitters

The 2 year treasury bonds and the 10 years treasury bonds inverted last Friday. This rare occurrence caused the market to begin worrying about a looming recession. 
The market uses history for the most part to predict the future because of course, we operate under the premise that history repeats itself in the market.

Conclusion

Look before you leap
Technically, the yield curve did not invert, but phew, we escaped it that time. The question is how many more times will be get this close before the 2 year crossed above the 10 year?
Use stops to protect yourself at all times.. you are just a market participant a prawn in an ocean full of sharks and whales. 

The backlash of Trump's cockiness could start to take a toll on the U.S consumer confidence at any whiff of inflation.

Who is @Jamtrades

The blog to follow for current events in the stock market. .....

About me

I go by James Spitzer, and my passion is first and foremost financial markets. I have been trading market instruments for the past 14 years. My interests include individual stocks, and options on liquid stocks. 

Other topics I am interested in are Politics, and to a certain degree entertainment news. More on that later.

Strategy

I employ different strategies to purchase the stocks in my Portfolio using what I call the How did we get here? -sanity test. This strategy forces me to look to buy stocks with strong financial positions and thriving businesses that eek out a growth rate of at least 10% a year. 
My mindset when I purchase these stocks is hinged on the notion that Companies fall victim to headlines by Media entities that drive their stock prices down for various reasons and events thereby making it possible for you and I to buy them at a discounted price.

Investing

I review a Company's viability by looking at their financial position vs their peers. I typically invest in best of breed stocks. 

Trading

I trade stocks using technical analysis to find trending stocks that are being bought impulsively due to marker events including news.