Markets were indecisive on Thursday.  SPY opened up 0.06%, DIA opened +0.04% higher, and opened up 0.16%.  From that point, all three major index ETFs meandered sideways the rest of the day.  This action gave us indecisive, Spinning Top candles in all three.  The SPY printed a small-body, black-body, Spinning Top that stayed well above its T-line (8ema).  SPY also printed a new all-time high.  DIA printed a white-body Spinning Top that retested but stayed above its T-line.  Meanwhile, QQQ gave us a bit larger-body, black-body Spinning Top that stayed well above its T-line.  QQQ also printed a new all-time high.  This all happened on well-below average volume in all three major index ETFs.

On the day, six of the 10 sectors were in the green with Energy (+0.41%) and Basic Materials (+0.40%) leading the market higher.  At the same time, Utilities (-0.98%) was by far the laggard sector.  Meanwhile, SPY lost 0.03%, DIA gained 0.20%, and QQQ lost 0.06%.  VXX fell 0.53% to close at a low 11.25 and T2122 fell but remains in the center of its mid-range, closing at 43.61.  On the bond front, 10-year bond yields fell from the premarket highs to gain only slightly 4.283% and Oil (WTI) gained 2.01% to close at $75.57 per barrel.  So, Thursday was very much a wait-and-see day. Traders seem to have been waiting on the May Payrolls reports…or maybe the Fed meeting next week. 

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 229k (compared to a 220k forecast and the prior week’s 221k).  This resulted in Weekly Continuing Jobless Claims that were also higher than anticipated at 1,792k (versus a forecast and prior week reading of 1,790k).  At the same time, April Imports were up to $338.20 billion (compared to the March value of $327.00 billion).  Meanwhile, April Exports were also up to $263.70 billion (versus a previous reading of $257.60 billion).  Together, that gave us an April Trade Balance with an increased but lower than expected deficit of $74.60 billion (compared to forecast of -$76.20 billion but up from the March -$68.60 billion).  In terms of productivity, the Q1 Nonfarm Productivity was up but a tick lower than was predicted at +0.2% (versus a +0.3% forecast and far less than March’s MASSIVE +3.2% value).  We also saw a Q1 Unit Labor Cost that came in significantly below the estimates at +4.0% (compared to at +4.7% forecast but far above Q4’s +0.4%).  Then, after the close, the Fed’s Balance Sheet showed a $28 billion decrease from $7.284 trillion to $7.256 trillion. 

After the close, DOCU reported beats on both the revenue and earnings lines.  At the same time, MTN and NGL missed on both the top and bottom lines.  It is worth noting that MTN also lowered its forward guidance.

In stock news, on Thursday, NIO (Chinese electric vehicle maker) announced it now expects Q2 vehicle deliveries to more than double from the same quarter in 2023. (NIO said sales revenue will also more than double to about $2.3 billion.)  Later, stock analysts at JPM reported that AVGO has won a chip design contract for GOOGL’s next generation AI chips.  Those JPM analysts expect this to result in a 125% increase in revenue for AVGO’s TPU program in 2024 (to $8 billion).  At the same time, BA’s Starliner capsule safely docked with the International Space Station.  However, the event did not exactly go flawlessly as several of the capsule’s guidance thrusters failed during the docking.  Later, Swiss giant Nestle (NSRGY) announced it will buy the rights to MRCB’s first-ever “fecal transplant pill” (yeah, you read that right) for an undisclosed sum.  (The pills are an alternative to invasive surgery to transplant biotic fecal materials.)  After the close, Bloomberg reported HTZ is close to closing a deal to get $700 million in secured debt to offset the company’s electric vehicle debacle.  Later, META’s WhatsApp unit announced AI tools for businesses as it tries to monetize the popular encrypted chat service.  At the same time, PIPR announced it has agreed to buy a smaller competitor (Aviditi) for an unspecified sum.  Elsewhere, EMR announced it has agreed to sell its remaining 40% stake in a Copeland joint-venture with BX for $3.5 billion. Later, EADSY (Airbus) announced its May plane deliveries fell 16% from the same month in 2023, down to 53 aircraft. 

In stock legal and governmental news, on Thursday, AMZN was hit with a $1.3 billion lawsuit by an organization representing small British retailers.  The suit alleges AMZN misused data from small retailer sales on its online marketplace to boost AMZN market share and profits from its own competing products.  Later, the FDA rescinded its June 2022 ban on Juul Lab’s e-cigarettes.  The move does not approve the products (final approval is still pending) but the move does place the Juul products back under scientific review.  At the same time, the NFL, and by relationship GOOGL, was hit with a multi-billion-dollar antitrust lawsuit over the legality of “NFL Sunday Ticket.”  The case started Thursday.  The basis is that NFL sold the rights to the package (out of market game viewing) to GOOGL for $2 billion and GOOGL’s YouTube unit sells the package to viewers for $449/year.  The plaintiffs claim the low cost of streaming, each team selling the package separately would offer a fairer market rather than the NFL having and giving a monopoly on the broadcasts to GOOGL. 

Elsewhere, the FTC and US Dept. of Justice reached a deal on Thursday that clears the way for antitrust investigations into MSFT, NVDA, and OpenAI related to artificial intelligence.  (NVDA has about 80% market share in the very lucrative AI chip market, allowing margins of 70%-80%.  Meanwhile, MSFT owns about 49% of OpenAI, which is the undisputed leader in the AI services space.)  Later, the US 6^th District Court of Appeals announced it will hear a series of telecom industry legal challenges to the FCC reinstatement of net neutrality, which is set to take effect on July 22.  At the same time, a federal jury acquitted British tech billionaire Mike Lynch who was accused of fraud related to his selling of his Autonomy company to HPQ for $11 billion in 2011.  After the close, the NTSB cited “incorrect assumptions” by an air traffic controller was the cause of a near-collision between jets owned by FDX and LUV in Austin TX in February 2023.  (The planes came within 170 feet of each other with the FDX jet forced to fly over the LUV jet on the runway.)

Overnight, Asian markets were mixed but leaned toward the green side.  Five of the 12 exchanges in the region were in the red, most notably New Zealand (-0.97%) and Shenzhen (-0.90%).  However, India, (+2.05%) and South Korea (+1.23%) led gainers and the region higher.  In Europe, we see a much weaker picture at midday.  Russia (+1.73%) stands out as the leading gainer (by 1.5%), while the CAC (-1.00%), DAX (-0.95%), and FTSE (-0.63%) lead 11 of the 15 bourses lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed, flat start.  The DIA implies a -0.04% open, the SPY is implying a -0.08% open, and the QQQ implies a +0.02% open at this hour.  At the same time, 10-year bond yields are up a touch to 4.301% and Oil (WTI) is up 0.58% to $75.99 per barrel in early trading.

The major economic news scheduled for Friday include May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 a.m.), and April Consumer Credit (3 p.m.).  There are no major earnings reports scheduled for either before the open or after the close on Friday.

In miscellaneous news, the US Dept. Of Agriculture announced that cattle infected with avian flu (N5H1) have died in five states.  Bird flu has infected cattle in 80 herds in the US, across 10 states, since late March.  The worst of these seems to be MI, where 10% of infected herds did not recover and died.  Elsewhere, the leader of the “Meme stock” short-squeeze craze (who goes by the moniker “Roaring Kitty”) scheduled a YouTube livestream event for noon on Friday.  Keith Gill (Roaring Kitty’s real name) recently announced a $116 million investment in GME.  GME shares popped 47% on the day and another 17% in afterhours trading on this news.

So far this morning, GME did report misses on both the top and bottom lines.  This led to a huge move lower in the premarket, even after the massive gains on anticipation of the Roaring Kitty livestream today. (As of this report, GME is down 9.26% from Thursday’s close, but that is 30% off the afterhours highs.)

In other news, the Israeli invasion of Gaza (and Rafeh) continues as it appears Israeli PM Netanyahu is doing his best to kill the cease-fire / peace deal.  Thursday, Israel bombed another UN school (the 108^th UN facility Israel has bombed since the October 7 attacks by Hamas).  The IDF claimed to have killed three Hamas leaders and as many as “20 or 30” Hamas militants.  However, reporters only saw 14 children and a dozen women among the dead with a similar number of women and children among the injured arriving at the hospital afterward.  (For what it is worth, those arriving at the hospital for aid reported that only refugees were in the school which was converted into a shelter.)  Israel also stopped more than 1,000 aid trucks (food, medical supplies, tents and diapers, and fuel type cargos) at the border as they use food as a weapon.  Predictably, Palestinian supporters, including the Houthi who have disrupted Red Sea and Suez Canal trade routes with attacks on commercial shipping, vowed to meet the Israeli escalations with their own escalation.  Needless to say, it does not look like the shipping problems (and skyrocketing container rates that result) will abate anytime in the near future.

With that background, it looks as if the market is undecided ahead of the May Payrolls and Unemployment data. All three major index ETFs have wobbled around the break-even area. All three are just on the green side of flat at the moment but not by a substantial amount. All three are also sporting indecisive candle types. With that said, all three are above their T-line (8ema). So, the Bulls are in control of the market in the short-term. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema). The T2122 indicator also remains in the center of its mid-range. The bottom line is that the market has room to run in either direction. With regard to those 10 big dog tickers, eight of the 10 are green, led by META and INTC (both +0.36%). However, the two biggest dogs NVDA (-24%) and TSLA (-0.42%) are the red names on that list. Also, keep in mind that this is Friday and next week will have another Fed meeting. So, prepare your account for the weekend news cycle and don’t be surprised if markets give us a “Wait on the Fed” look after the May data report.

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 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 gains are 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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