Wednesday was a bullish freight train and the Bears were tied to the track.  The SPY gapped up 0.23%, DIA opened flat, and QQQ gapped up 0.42%.  From there, all three major index ETFs ground sideways in a very tight range for 90 minutes.  However, then the fuse was lit and all three rallied steadily for the rest of the day.  They all went parabolic the last half hour with only five minutes of profit taking at the end keeping all three from ending on their highs.  This action gave us large white-bodied candles with smaller wicks on both ends across the board.  SPY and QQQ once again printed new all-time highs and gave us new all-time high closes (the 37^th of the year).  Meanwhile, after a successful retest of its T-line (8ema) the DIA rallied to break out of its trading range dating back to May and closed less than a percent from its own all-time high.  This happened on below average volume in SPY and QQQ as well as above-average volume in DIA.

On the day, all 10 sectors were in the green with Basic Materials (+1.51%) way out front leading the rest of the market higher.  Even the laggards, Consumer Cyclicals (+0.61%), Energy (+0.62%), and Consumer Defensive (+0.64%) were up significantly.  At the same time, SPY gained 0.99%, DIA gained 1.08%, and QQQ gained 1.04%.  VXX fell just a tad and remains extremely low at 10.27.  Meanwhile, T2122 spiked up to the top half of its mid-range at 69.68.  On the bond front, 10-year bond yields were down a bit to 4.281% and Oil (WTI) gained 1.24% to close at $82.42 per barrel.  So, Wednesday was a bullish day in a strong bullish trend.  SPY and QQQ have closed at a new all-time high close each of the last five sessions, led by the Tech Big Dogs like NVDA (+2.70%), AMD (+3.87%), and AAPL (+1.88%).  In fact, the only one of the 10 Tech Big Dogs that was down was NFLX (-1.18%) and it only traded $1.8 billion in stock on the day.  So, if traders were waiting on CPI data…they have a funny way of showing it.

The major economic news scheduled for Wednesday were limited to EIA Weekly Crude Oil Inventories, which showed a much larger drawdown than expected at -3.443 million barrels (compared to a forecasted build of 0.700-million-barrels but far less than the prior week’s -12.157 million barrels).

In economic speak news, on Wednesday, Fed Chair Powell testified again, this time in front of the House.  Powell said the Fed does not need to reach the 2% target figure prior to cutting rates. In addition, he said the Fed will cut rates “when and as needed,” regardless of the election.  Powell said, “Our undertaking is to make decisions when and as they need to be made, based on the data, the incoming data, the evolving outlook and the balance of risks, and not in consideration of other factors, and that would include political factors.”  (For the second day in a row, GOP lawmakers pressed (begged?) Powell not to announce any rate cuts until after the November 5 election.)  When asked about the path of inflation, Powell indicated he did have some confidence that inflation is headed back below 2%.  However, when asked if the bar for a rate cut had been cleared, Powell said “”I am not ready to say that yet.”  He continued, “There is a path to getting back to full price stability while keeping the unemployment rate low, … We’re on it. We’re very focused on staying on that path.”

After the close, PSMT and WDFC reported beats on both the revenue and earnings lines. 

In stock news, on Wednesday, WBD announced its CNN unit will cut 100 jobs (2.8% of its workforce) and also launch a new CNN.com subscription service later this year.  At the same time, INTU announced plans to layoff 1,800 employees (10% of workforce) in cost-cutting moves, citing that AI is transforming the company.  Later, HON announced they have signed a deal to buy APD’s LNG pretreatment unit for $1.81 billion.  At the same time, AMD announced they have agreed to buy Silo AI (private) for $665 million.  Later, TLSA raised the prices of its Model 3 in Europe by about $1.622 after the EU imposed tariffs on EVs made in China.  (The Model 3 is made in China.)  Meanwhile, Bloomberg reported that GOOGL has walked away from its pursuit of purchasing HUBS.  Later, Bloomberg reported that AAPL is expecting 10% growth in iPhone sales compared to 2023 according to internal sources it cited.  (However, 2023 was a down year for iPhone shipments.)   At the same time, the Athletic reported that AMZN. CMCSA, and DIS have finalized a $76 billion deal to broadcast NBA basketball games for 11 seasons.  (However, the report said current NBA partner WBD still has the option to match the deal.)  After the close, COST announced it will hike membership fees starting in the fall.  Elsewhere, MSFT announced it will drop its “observer seat” on the OpenAI board to head off antitrust inquiries in the US and UK. AAPL followed MSFT’s lead giving up its own newly-acquired “board observer” seat.

In stock legal and governmental news, on Wednesday the NHTSA announced that STLA is recalling 332k 2017-2025 Alfa Romeo, Jeep, and Fiat vehicles in the US over faulty seatbelt sensors. At the same time, the same agency announced BMWYY was recalling 394k vehicles in the US due to faulty airbag inflators.  Later, HE stock spiked on a report saying that a “massive settlement” related to the Maui wildfires could be unveiled as soon as next week.  No other details were released, but 451 lawsuits (covering 1,800 individual plaintiffs as well as 425 business entity plaintiffs) related to those wildfires are in the courts now.  At the same time, MSFT completed a $21.7 million deal to settle cloud licensing practices to avoid EU antitrust action.  (The deal was with the main complainant to the EU about those practices.)  GOOGL announced it will explore other options to fight MSFT cloud licensing practices after the settlement.  Later, JBLU asked the Dept. of Transportation to disqualify the UAL proposal from winning one of the five new round-trip flight slots up for bid from Washington Reagan airport. 

Elsewhere, a federal judge in CA dismissed most of the FCBN $1 billion lawsuit against HSBC for “poaching” 40 employees after the collapse of Silicon Valley Bank in March of 2023.  Later, the CEO of BA was hauled before the NTSB and forced to apologize for violating its NTSB rules.  After the apology, the BA CEO refused other comment.  At the same time, NSC agreed to implement the series of safety recommendations made by the NTSB following the February 2023 train derailment in East Palestine OH.  Later, the FTC announced plans to sue UNH, ESRX, and CVS over their negotiating practices (collusion) on drugs including insulin following a two-year investigation.  After the close, the former CEO of WORX was convicted of securities fraud related to statements about the company becoming the major supplier of rapid COVID-19 tests, despite knowing the claims were untrue.  At the same time, the Fed and Office of the Comptroller fined C $136 million after the bank was found to have made insufficient progress addressing data management issues.  (The bank was fined $400 million in 2020 for the same deficiencies.) 

Overnight, Asian markets were nearly green across the board.  Only India (-0.03%) was below break-even.  Meanwhile Hong Kong (+2.06%), Shenzhen (+1.99%), and Taiwan (+1.60%) led broad and strong gains in the region.  In Europe, we see the same picture taking shape at midday with only Denmark (-0.03%) on the red side of flat.  However, the CAC (+0.32%), DAX (+0.19%), and FTSE (+0.22%) lead modest gains ahead of US data.  In the US, as of 7:30 a.m., Futures are pointing toward a start just below Wednesday’s close.  The DIA implies a -0.17% open, SPY is implying a -0.11% open, and QQQ implies a -0.08% open at this hour.  At the same time, 10-Year bond yields are up slightly to 4.281% and Oil (WTI) is up three-tenths of a percent to $82.35 per barrel in early trading.

The major economic news scheduled for Thursday include June Core CPI, June CPI, Weekly Initial Jobless Claims, and Weekly Continuing Jobless Claims (all at 8:30 a.m.), June Federal Budget Balance (2 p.m.) and Weekly Fed Balance Sheet (4:30 p.m.).  Fed member Bostic also speaks at 11:30 a.m. Earnings season begins again Thursday as Thursday, CAG, DAL, and PEP report before the open.  However, there are no major reports scheduled for after the close.

In economic news later this week, on Friday, June Core PPI, June PPI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the WASDE Ag report are delivered.

In terms of earnings reports later this week, Friday, BK, C, ERIC, FAST, JPM, and WFC report.

So far this morning, DAL beat on revenue while missing on earnings by a penny.  On the other side, PEP missed on revenue while beating on earnings.

With that background, it looks as if markets are slightly, but undecidedly bearish in the premarket. All three major index ETFs started the early session flat, but have put in small, black-bodied candles since then. Still, regardless of your timeframe, the market trend (short-term, mid-term, or longer-term) remains very bullish. In terms of extension, QQQ is stretched above its T-line and SPY is also pushing its extension. The T2122 indicator is back up above the center of its mid-range. Therefore, the market still has room to run in either direction, but the Bears still have more slack to work with today. (We are in need of rest or pullback in the QQQ and SPY.) With regard to those 10 big dog tickers, eight of the 10 are in the red early this morning on modest moves. However, the biggest dog, NVDA (+0.36%) is also the best performer of that group on price move and volume.

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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