On Tuesday, markets opened slightly lower.  The SPY opened 0.09% lower, the DIA opened 0.04% lower, and the QQQ gapped down 0.21%.  At that point, all three major index ETFs rallied in the morning, recrossing the gap and reaching their highs of the day about noon.  However, all three also retraced that same distance by 1:30 p.m. and then bobbed along the lows until 3:25 p.m.  Then we saw a small rally the rest of the day in the SPY, DIA, and QQQ. This action gave us Bull Engulfing candles in the QQQ and SPY with all three major index ETFs printing white-bodied candles.  However, both the large-cap index ETFs were more indecisive Spinning Top-type candles.  All three remained above their T-line (8ema) and the day’s action took place on anemic volume yet again.

On the day, seven of the 10 sectors were in the green as Consumer Cyclical (+0.44%) and Utilities (+0.39%) led the way higher while Healthcare (-0.61%) and Industrials (-0.57%) lagged behind the other sectors.  At the same time, the SPY gained 0.10%, DIA gained 0.22%, and QQQ gained 0.26%.  The VXX fell 1.31% to close at 17.31 and T2122 fell back out of the overbought territory to the very top-end of its mid-range at 79.87.  10-year bond yields plummeted again to 4.323% and Oil (WTI) popped 2.23% to close at $76.52 per barrel.  So, Tuesday was another indecisive day of consolidation that has allowed the T-line to make up ground and catch up to the November rally. 

The major economic news reported Tuesday included Conference Board Consumer Confidence, which came in slightly better than expected at 102.0 (compared to a 101.0 forecast and also better than the October value of 99.1).  Later, after he close, the API Weekly Crude Oil Stocks Report showed a lower than anticipated at -0.817 million barrels (versus a forecast of -2.000 million barrels and far below the previous week’s 9.047-million-barrel inventory build). 

In Fed Speak news, Fed Governor Bowman told a banking association Tuesday, “My baseline economic outlook continues to expect that we will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2% target in a timely way.”  However, shortly afterward, Fed Governor Waller told the American Enterprise Institute “I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%.”  He also said he was “reasonably confident” of doing so without a sharp rise in the unemployment rate, now at 3.9%.  Later, NY Fed President Williams said, “The recent news about the long-run anchoring of inflation expectations in the United States is mostly reassuring: available measures of longer-run inflation expectations in the United States have remained remarkably stable.”   After that, Chicago Fed President told a Marketplace interview, “Anybody who cooks a turkey knows that you’ve got to pull it out of the oven before it’s to the point where you want it to be, because it’s going to have residual heat.”  (Going on to indicate that right now there is a significant risk of doing too much.)

In Black Friday news, AMZN reported Tuesday that it had record sales on Black Friday and Cyber Monday with the company saying customers bought more than one billion items during its annual event (that actually ran from, Nov. 17 – 27).  However, AMZN did not disclose the dollar sales on either Black Friday or Cyber Monday.  Elsewhere, the National Retail Federation said that more than 200 million customers shopped over the five-day (Thanksgiving through Cyber Monday) shopping holiday.  This was up from 196.7 million for the same period in 2022.  However, the NFR said that average spending was also down slightly from $325.44/customer in 2022 to $321.41 in 2023.  Later, Adobe Digital Analytics updated its “Cyber Week” (Thanksgiving through Cyber Monday) online selling data to show a record $38 billion was spent online by US shoppers over those five days.  This was a record for that period and up 7.8% from 2022.  (Adobe’s previously reported initial estimate had been +5.4%.)

In stock news, TSLA reported that Chinese insurance registration showed a 2.45% increase for the week ending November 26.  TSLA vehicle registration that week hit 16,300.  (This amounted to 56,000 from November 1-26.)  Later, AMZN announced a new artificial intelligence chip, which it claims is four times faster than its predecessor, for its cloud computing service.  This comes just weeks after MSFT announced its own AI chip for use with its AMZN-competing Azure cloud service.  At the same time, British newspaper Telegraph reported that FTCH founder Neves is in talks to get funding in order to take the company private.  (Neves owns 15% of the stock but has 77% of the voting rights in FTCH.  Among the funding providers is BABA.)  Later, C issued a recall for 300,000 2023-2024 Honda Accord and HR-V vehicles due to a missing critical component from the seatbelt systems. Later, LVS fell as much as 6% after hours when the company announced a $2 billion secondary offering due to the widow of former CEO Adelson needing to raise money in order to buy a professional sports team (the Dallas Mavericks NBA team).  Also after hours, TXT announced it would cut 725 jobs as part of a restructuring plan and it expects to save $75 million per year on the move.  Later, the Wall Street Journal reported that AAPL has officially decided to end its partnership (dating to 2019) with GS for credit cards.

In stock government, legal, and regulatory news, the US Supreme Court hears a case today challenging the SEC’s power to protect investors from fraud by enforcing securities regulations through the SEC’s tribunal system. (The case involves a fund manager which the SEC found had committed securities fraud and then barred from the industry.)  Elsewhere, META announced it would appeal Monday’s ruling by a US District Judge that had denied the company’s motion appealing the FTC’s ability to reduce the amount of money the company can make from selling the data of children.  At the same time, BAC agreed to pay a $12 million fine to the CFPB to settle charges it routinely submitted “inaccurate” information about mortgage applicants to the US government for decades to avoid potential discrimination oversight (instead it forged the information that was submitted).  Later, a French court convicted BNPQY (BNP Paribas) of deceptive marketing practices.  The court fined the company $206k for the offense.  Across the channel, BCS announced it will eliminate 900 jobs from its London operations.  At the same time, the NHTSA announced that RIVN had issued a recall for 1,463 R1T and R1S vehicles due to a software update that disabled defroster and defogger system controls. 

After the close, CRWD, FLNC, INTU, NTAP, SPLK, and WDAY all reported beats on both the revenue and earnings lines.  Meanwhile, HPE missed on the revenue line while beating on earnings.  It is worth noting that CRWD, WDAY, and NTAP raised their forward guidance.

Overnight, Asian markets were mixed but leaned toward the red side.  Hong Kong (-2.08%) was far and away the biggest loser followed by Thailand (-0.98%), and Shenzhen (-0.91%).  India (+1.04%) was by far the biggest gainer.  Meanwhile, in Europe, the bourses are mostly in the green at midday with only three spots of red showing on the board.  The CAC (+0.44%), DAX (+0.94%), and FTSE (-0.12%) lead the region on volume as usual.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher.  The DIA implies a +0.27% open, the SPY is implying a +0.37% open, and the QQQ implies a +0.49% open at this hour. At the same time, 10-year bond yields are dropping again now to 4.28% and Oil (WTI) is up 1.75% to $77.75 per barrel in early trading.

The major economic news scheduled for Wednesday includes Q3 GDP, Q3 GDP Price Index, Oct. Goods Trade Balance, and Oct. Retail Inventories (all at 8:30 a.m.), Weekly EIA Crude Oil Inventories (10:30 a.m.), and the Fed Beige Book (2 p.m.).  We also hear from Fed member Mester at 1:45 p.m. The major earnings reports set for before the open include BILI, DLTR, DCI, FTCH, FL, HRL, PDCO, WOOF, and VSTS.  Then, after the close, CG, FIVE, YY, LZB, NOAH, NTNX, OKTA, PSTG, PVH, CRM, SNOW, SNPS, and VSCO report. 

In economic news later this week, on Thursday, we get the October Core PCE Price Index, Oct. PCE Price Index, Weekly Initial Jobless Claims, Oct. Personal Spending, Nov. Chicago PMI, and Oct. Pending Home Sales.  We also hear from Fed member Williams (9:05 a.m.).  Finally, on Friday, we get Nov. S&P Global Mfg. PMI, Nov. ISM Mfg. Employment, Nov. ISM Mfg. PMI, and Nov. ISM Mfg. Price Index.  We also hear from Fed Chair Powell at 11 a.m.

In terms of earnings reports later this week, on Thursday, we hear from ASO, BIG, DOOO, CM, CBRL, EXPR, KR, RY, TD, TITN, AMWD, DELL, MRVL, and ULTA.  Finally, on Friday, GCO and BMO report.

In miscellaneous news, BAC told its clients Tuesday that large hedge funds have been selling healthcare stocks, reducing their exposure to that sector and buying small-cap stocks with the proceeds.  BAC said this trend has been in place for two weeks now.  In sadder news, BRKB announced Tuesday that its famous Vice-Chair Charlie Munger had died at age 99.  (Munger is Warren Buffett’s right-hand man.)  Among Munger’s popular quotes are “If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation” and (speaking on the formula for success) “It’s so simple. You spend less than you earn. Invest shrewdly, and avoid toxic people and toxic activities, and try and keep learning all your life…”

In China news, overnight the Chinese government announced that the country’s local governments had issued $21 billion in “special bonds” this year to inject capital into smaller banks which have been struggling due to the country’s real estate crisis. 

So far this morning, FL reported beats on both the revenue and earnings lines.  At the same time, DCI missed on revenue while beating on earnings.  Unfortunately, DLTR, HRL, PDCO, and WOOF all missed on both the top and bottom lines.  It is worth noting that HRL and WOOF both also lowered their forward guidance.  

With that background, it looks like the Bulls may be ready to attempt another leg-up in their November rally. All three major index ETFs opened the premarket session with a gap up and have printed white body candles, indicating follow-through on that very early jump. All three remain above their T-line (8ema) and 50smas. So, the Bulls are definitely still in control of both the shorter and the longer-term trends. In terms of extension, the major index ETFs all relieved the stretch above their T-lines (8emas) which they had been feeling last week. At the same time, the T2122 indicator has now dropped to just outside its overbought territory. So, the Bulls do have some slack to work with if they are intent on continuing the really. Of course, the Bears have tons of room to run if they could mount a charge.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 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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