The bulls had a tough day Thursday as all 3 major indices made a modest gap lower at the open.  From there the SPY and QQQ went on a gradual all-day selloff.  However, the DIA went on a gradual rally until afternoon profit-taking took it down off the highs.  This action left us with Bearish Evening Star-type candles in the SPY and (especially) the QQQ.  However, at least as of the close, all 3 major indices were able to stay above their T-lines.  On the day, SPY lost 0.68%, DIA gained 0.03%, and QQQ lost 1.47%.  The VXX gained 3% to 22.20 and T2122 fell to 29.55.  10-year bond yields were little-moved at 1.497% and Oil (WTI) fell 2.5% to $70.55/barrel.

After the close, GOOG told its employees that they would not be giving raises to match inflation.  Executives told a company-wide meeting that it was already had high labor costs and said they have no plans for any “inflation adjustment” on a companywide basis.  The move came in response to more than 400 employee requests for the company to address the impact of high inflation (especially in the Silicon Valley area). Clearly, an issue that companies will need to address, and the pressure may get worse with today’s CPI number.

Also, after the close, ORCL beat strongly on both lines.  They also announced an additional $10 billion buyback program and raised their forward guidance. However, the company also said they swung to a loss for the quarter when considering the payment of a court judgment over the compensation of former CEO Mark Hurd.  Elsewhere, AVGO, COST, and LULU all beat on both lines.  CHWY missed on earnings, but beat on revenue.

In government news, the Senate voted to allow them to raise the debt ceiling with a simple majority vote in a 59-35 vote.  This signaled a change in stance by Minority Leader McConnell (return to bipartisan debt ceiling increases as was typical in the past) and immediately led to dissent from Republicans who oppose the idea.  This eases the path to avoiding a shutdown by the December 15 deadline.  They are expected to raise the limit by about $2 trillion early next week.  As an aside, Senate Majority Leader Schumer said the debt ceiling vote as well as votes on the Budget and Climate packages before the Christmas break.

Overnight, Asian markets were broadly in the red, with only two green exchanges on modest moves.  Hong Kong (-1.07%) and Japan (-1.00%) were outliers to the downside with most moves in the one-quarter to one-half of a percent range.  In Europe, stocks are also mostly in the red on modest moves, with the big exchanges flat.  The FTSE is flat (+0.01%), DAX is flat (+0.05%), and CAC (-0.01%) at mid-day.  As of 7:30 am, US Futures are pointing toward a gap higher at this early hour.  The DIA is implying a +0.28% open, the SPY implies a +0.35% open, and the QQQ implies a +0.29% open an hour ahead of CPI data.  10-year bond yields are up to 1.511% and Oil (WTI) is up a percent to $71.71/barrel in early trading.

The major economic news scheduled for release Friday includes Nov. CPI (8:30 am and analysts expect the highest CPI number in 40 years), Michigan Consumer Sentiment (10 am), and Nov. Federal Budget Balance (2 pm).  The major earnings reports scheduled for the day are also limited to ASO before the open.  There are no reports scheduled for after the close.

We got the expected rest Thursday after a few very strong days in all the major indices. However, the candles indicated there may be more of a pullback to come. Remember, not to get too tied up in the “hard right edge” of the chart and that a pullback was needed at some point to give us a higher high and higher low of a trend. Regardless, it is hard to predict the open today since the CPI number will call the tune at least early. We are expecting a terrible number, but just as a thought experiment, what would markets do if it came in even worse than is being expected? Also, remember the Fed meets next week and that is a risk because they are expected to accelerate the Taper and POSSIBLY change their long-standing position that rates will not rise in 2022.

Also, bear in mind that it is Friday. So, don’t forget to pay yourself and prepare for the weekend news cycle. Don’t be in a hurry to chase. Stick to your trade rules and on managing the things you can control. (Not trying to force the market to obey your desires.) Consistently taking profits when you have them and moving your stops in your favor should be part of your plan. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Ed

Swing Trade Ideas for your consideration and watchlist: ADVM, FANG, ERX, MRO, BP, VALE, CVS, CAT, TSN, BEKE. 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.

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