On Tuesday, stocks opened the day basically flat and then oscillated up and down around the small gap all day long.  The DIA had a slightly more bearish trend to the oscillation, but all 3 major indices gave us indecisive Spinning Top or Doji type of candles.  This also sets up a potential Morning Star type of pattern in all 3.  The QQQ held its 34ema as support on the day.  Six of the 10 sectors were green on the day.  However, Energy (+3.12%) was by far the biggest mover to the upside and Communication Services (-1.01%) was the big loser on the day.

On the day, SPY lost 0.25%, DIA lost 0.50%, and QQQ lost 0.08%.  The VXX fell more than 5% to 20.14 and T2122 climbed back out of the oversold territory to 34.76.  10-year bond yields rose to 3.065% and Oil (WTI) spiked upward 3.55% to $93.57/barrel.  All-in-all, it was an indecisive day on very low volume. It sure seems like Mr. Market was waiting on more clues.

In economic news, the Mfg. PMI came in a bit below estimates Tuesday.  However, the Services PMI came in 10.5% below forecasts.  July New Home Sales also came in down 12.6%, indicating a significant pullback by potential homebuyers.  All this bad news actually buoyed markets mid-morning as traders seemed to project that this is the kind of news that would give the Fed cover to reduce the rate hike expected in September.  After the close, API reported Weekly Crude Oil stock fell 5.6 million barrels as US exports were dramatically higher.

SNAP Case Study | Actual Trade

TWTR had a rough day Tuesday, closing down 7.32% on heavier than normal volume.  This came after it was reported that the company’s former head of cybersecurity became a whistleblower and reported to the SEC that TWTR “engaged in extreme, egregious deficiencies in privacy, security, spam, and content modernization.”  The report also alleged TWTR made misrepresentations to Elon Musk, which may impact TWTR’s lawsuit to force Musk to either buy TWTR or pay a $1 billion back-out fee.  In the complaint filed with the SEC, the whistleblower alleges he witnessed senior TWTR executives engage in deceitful and misleading communications with the company board, shareholders, and the public.  This included the CEO asking the whistleblower to provide false and misleading documents.  The complaint alleges that after refusing to comply, he was terminated.

In auto industry news, at the close, TM announced they are recognizing California’s authority to set vehicle emissions standards and dropping out of the action by fellow automakers and the former Trump administration to sue in order to block the state’s regulations.  This makes TM eligible for California state fleet purchases and follows in the footsteps of GM, F, HMC, BMW, and Volkswagen who did the same earlier this year.

Six months after Russia’s invasion, the fighting continues in Ukraine, just at a less frantic pace.  On Tuesday, the US State Dept. urged US citizens to leave Ukraine as it expects heavy attacks by Russian missiles, rockets, and artillery on civilian targets in the next few days.  This is because today is Ukrainian flag day and Thursday is Ukrainian National Independence Day.  Russia also resumed shelling very near the Zaporizhzhia nuclear power plant (the largest in Europe).  On Tuesday, that shelling killed one plant worker.  In the US, Congress is set to approve an additional $3 billion in weapons including HiMARs (made by LM), Howitzers and ammunition (made by GD), etc.

In earnings news, after the close Tuesday, JWN, INTU, TOL, CAL, and LZB all reported beats on both the top and bottom lines.  Meanwhile, AAP missed on the revenue line while reporting in-line earnings. On the other side, SCSC beat on revenue while missing on earnings.  However, URBN missed on both the revenue and earnings lines.  It is also worth noting that JWN, AAP, and TOL all lowered forward guidance while SCSC raised their 2022 guidance.  So far this morning, RY, IIVI, and DY have all reported beats on both lines.  Meanwhile, EAT reported a beat on revenue while missing on earnings.  However, WOOF missed on both lines.  Of those, EAT has lowered forward guidance.

Overnight, Asian markets leaned heavily to the downside.  Shenzhen (-2.88%), Shanghai (-1.86%), and Hong Kong (-1.20%) led the region lower.  In Europe, stocks are mixed on modest moves at mid-day.  The FTSE (-0.50%), DAX (-0.10%), and CAC (+0.09%) are leading the mixed bag in that region in early afternoon trade.  As of 7:30 am, US Futures are pointing to a flat open (before data).  The DIA implies a -0.02% open, the SPY is implying an unchanged open, and the QQQ implies a -0.03% open at this hour.  10-year bond yields are flat and Oil (WTI) is up another 1% in early trading.

The major economic news events scheduled for Wednesday include July Durable Goods Orders (8:30 am), July Pending Home Sales (10 am), Weekly EIA Crude Oil Inventories (10:30 am), and a 5-year Bond Auction (1 pm).  The major earnings reports scheduled for the day include Wednesday we get reports from EAT, DY, IIVI, WOOF, and RY before the open.  Then, after the close, ADSK, GES, NTAP, NVDA, CRM, SPLK, VSCO, and WSM report.

In economic news later this week, on Thursday, we get a Q2 GDP Revision, Weekly Jobless Claims, and the Jackson Hole Central Banker Symposium begins.  Finally, on Friday, we get July PCE Price Index, July Personal Spending, July Trade Goods Balance, July Retail Inventories, Michigan Consumer Sentiment, and the Jackson Hole Central Banker Symposium continues with Fed Chair Powell Speaking.

In earnings later this week, on Thursday we hear from ANF, BURL, CM, COTY, DG, DLTR, GFI, GOGL, HAIN, PTON, TD, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY.  Finally, on Friday, JKS reports.

Markets are seemingly pausing to wait on more clues. Many talking-heads believe that news would be Fed Chair Powell’s speech at Jackson Hole on Friday morning. Regardless of whether that is the shoe Mr. Market is waiting on to drop, all we can do is trade the chart in front of us. Premarkets have recovered from earlier lows. However, there is no denying that the short-term trend is down with potential support levels below, the broken mid-term trend was bullish, and the broken longer-term trend was bearish. So, caution is in order, and volatility (both intraday and weekly) is to be expected.

Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

🎯 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.

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

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service