Friday saw markets open down to varying degrees.  SPY opened 0.06% lower, DIA gapped down 0.31%, and QQQ opened 0.08% lower.  At that point, all three major index ETFs chopped sideways for 30 minutes.  However, from there, all three sold off until 2:45 p.m. and then meandered along the bottom the rest of the day.  This action gave us black-bodied, large-ish candles with wicks on both ends in all three major index ETFs.  DIA crossed back below its T-line (8ema) while QQQ pulled fairly far below its own T-line.  SPY sits in about midway between DIA and QQQ in terms of its distance below its T-line. 

On the day, eight of the 10 sectors were in the red with Technology (-0.97%) out front leading the market lower.  On the other side, Healthcare (+0.24%) held up much better than the other sectors.  At the same time, SPY fell 0.68%, DIA fell 0.93%, and QQQ fell 0.89%. VXX shot up 4.25% to close at a still low at 11.53.  T2122 fell a bit, but remains in the center of its mid-range at 40.26.  On the bond front, 10-year bond yields popped again to 4.24% and Oil (WTI) plummeted 3.08% to close at $80.29 per barrel.  This all happened on average volume in the SPY, DIA and QQQ.  So, again on Friday saw a continuation of the pullback from all-time highs with QQQ leading, SPY in the middle, and DIA following (just as it did on the way up). 

There was no major economic news scheduled for Friday.

In economic speak news, on NY Fed President Williams said Friday that the FOMC is “getting closer” to the point where it can start cutting rates.  Williams said, “I feel like the past three months—and I would include in June, based on what we’ve seen — seems to be getting us closer to a disinflationary trend that we’re looking for.”  He continued, “I would like to see more data to gain further confidence inflation is moving sustainably towards our 2% goal. We’ve got a few good months now.”  Later, Atlanta Fed President Bostic said that he now only expects one rate cut this year.  Bostic told reporters, “The economy continues to deliver surprises and it continues to be more resilient and more energized than I had forecast, … And as a consequence, I’ve sort of re-calibrated when I think it’s appropriate to move.”  Bostic continued, “We will have to see how the data comes in over the next several weeks.” 

In stock news, on Friday, SERV shares spiked and closed up 187% (after being up more than 241% during the day) after NVDA disclosed it had taken a 10% stake in the company.  Later, Reuters reported that OXY is in talks with Columbia’s Ecopetrol over the sale of a 30% stake in shale oil producer CrownRock by OXY for $3.6 billion.  At the same time, AAL announced it had reached a tentative contract deal with the union representing 28k flight attendants after three years of negotiations.  Later, Bloomberg reported that UL has begun discussions with buyout firms about the possible sale of its ice cream unit, which includes the “Ben & Jerry’s” brand.  (BX is among to top firms on the potential buyer side.)

In stock legal and governmental news, on Friday, LLY announced that it had received approval for its weight loss drug tirzepatide from Chinese regulators. (NVO’s Wegovy, a competing GLP-1 weight loss drug had already been approved.)  At the same time, a US District Court ruled that BKNG violated the Computer Fraud and Abuse Act by scraping data from the RYAAY website. Later, Bloomberg reported HE had reached a tentative settlement of more than $4 billion, which would resolve hundreds of lawsuits stemming from the 2023 wildfires on Maui.  At the same time, Reuters reported that the EU is set to impose provisional tariffs on Chinese biodiesel due to unfairly low pricing (government subsidized). Meanwhile, ORCL agreed to pay $115 million to settle a suit alleging the company violated CA consumer privacy by collecting and selling personal data without permission.

Elsewhere on Friday, a court filing by class action law firms accused BRKB of colluding with three other law firms to convince fire victims to reach lowball settlements on suits filed against BRKB’s PacifiCorp.  At the same time, the NHTSA disclosed that STLA paid $190.7 million in US fuel economy penalties for the years 2019 and 2020.  In addition. STLA still owes another $459.7 million in outstanding penalties for the same infractions prior to 2021.  (In 2023, STLA paid $235.5 million for the same thing covering 2018 and $156.6 million covering 2016-2017.)  Later, the Fed fined GDOT $44 million for “unfair and deceptive” practices in its “prepaid debit card” services.  At the close, Bloomberg reported that the FTC has opened an investigations into OXY, HES, and FANG over their communications with OPEC officials. 

Overnight, Asian markets were red across the board wit the lone exception of Hong Kong (+1.25%).  Taiwan (-2.68%), Japan (-1.16%), and South Korea (-1.14%) seem to have reacted poorly to Biden dropping out of the US Presidential race just hours before the Asian opens.  This idea was bolstered as China made a surprise interest rate cuts in both short-term and long-term rates.  (Unlike the US, China cut 7-day, one-year, and 5-year PBOC (China’s Central Bank) rates by a tenth of a percent each.  However, in Europe, we see very strong green across the board at midday.  The CAC (+1.33%), DAX (+1.35%), and FTSE (+0.73%) lead very broad gains of more than a percent on an initial positive reaction to Biden’s Sunday move.  In the US, as of 7:30 a.m., Futures are pointing toward a strong start to the morning.  The DIA implies just a +0.16% open, but the SPY implies a +0.50% open, and the QQQ implies a +0.82% open at this hour.  At the same time, 10-Year bond yields are down to 4.22% and Oil (WTI) is off by half a percent to $79.72 per barrel.

There is no major economic news scheduled for Monday.  The major earnings reports before the open include are limited to IQV, KSPI, TFC, and VZ.  Then, after the close, ARE, BOKF, BRO, CDNS, CLF, CCK, LOGI, MEDP, NUE, NXPI, SAP, VLRS, WRB, and ZION report.

In economic news later this week, on Tuesday, we get June Existing Home Sales and API Weekly Crude Oil Stocks report.  Then Wednesday, Building Permits, June Goods Trade Balance, June Retail Inventories, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, June New Home Sales, and EIA Weekly Crude Inventories are reported.  Fed Governor Bowman also speaks.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, June Core Durable Goods Orders, June Durable Goods Orders, Preliminary Q2 PCE Prices, Preliminary Q2 GDP, Preliminary Q2 GDP Price Index, Preliminary Goods Trade Balance, Preliminary Retail Inventories, and the Fed Balance Sheet.  Finally, on Friday, June Core PCE Price Index, June PCE Price Index, June Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 1-Year Inflation Expectations, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Tuesday, AOS, ACI, ALFVY, AVY, KO, CMCSA, CSTM, DHR, FELE, FCX, GE, GM, GPC, HCA, HRI, IVZ, KMB, LMT, MCO, MSCI, PCAR, PNR, PM, PII, PHM, DGX, SHW, SPOT, UPS, WBS, GOOGL, ABR, CNI, COF, CB, CSGP, EWBC, ENVA, EQT, GOOG, MTDR, MAT, NBR, PKG, RRC, STX, TSLA, TXN, V, and WFRD report.  Then Wednesday, we hear from, ALLE, APH, T, BSX, CHKP, CME, EQNR, EVR, FI, FLEX, FMX, FTV, GEV, GD, GPI, IP, IPG, KBR, LW, LII, NEE, ODFL, ORAN, OTIS, BPOP, PRG, RCI, ROP, TMHC, TEL, TECK, TDY, THC, TMO, TNL, VRT, WAB, ALGN, AMP, ASGN, CSL, CLS, CCS, CHE, CMG, CHDN, CYH, EW, FAF, F, GL, GGG, ICLR, IBM, INVH, KALU, KLAC, KNX, LVS, MTH, MOH, NEM, ORLY, OII, PTEN, PLXS, RJF, RNR, RSG, ROL, NOW, TER, TYL, URI, UHS, VMI, WCN, WFG, WHR, WM, and WH.  On Thursday, ABBV, AAL, ARCH, AMBP, AZN, BFH, BC, CRS, CARR, CBRE, CX, CMS, CFR, DAR, DOV, DOW, DTE, FCNCA, FCFS, FSV, FCN, GTX, HOG, HAS, HP, HNI, HON, KDP, LAZ, LEA, LKQ, MAS, NDAQ, NYCB, NOC, ORI, PCG, POOL, RS, RCL, RPM, RTX, R, SNY, LUV, STLA, STM, FTI, TSCO, TRU, TPH, UNP, VLO, VC, WST, WEX, WTW, XRX, ALSN, ATR, AJG, BKR, SAM, BYD, CINF, COLM, DECK, DXCM, DLR, EMN, EIX, EGO, FBIN, HIG, JNPR, LHX, LPLA, MTX, MHK, NSC, NOV, OLN, DOC, PFG, SKX, SKYW, SSNC, TXRH, TFII, VLTO, WY, and WKC report.  Finally, on Friday, we hear from MMM, AB, AON, AVTR, BAH, BMY, CNC, CHTR, CL, BEN, GNTX, NWL, POR, SAIA, and TROW.

So far this morning, IQV and TFC reported beats on both the revenue and earnings lines.  Meanwhile, VZ missed on revenue while beating on earnings.

In miscellaneous news, after the close Thursday, a federal appeals court blocked the Biden Administration from continuing to implement a new student debt relief plan at the request of seven GOP-led states.  (The Dept. of Education said it had already granted $5.5 billion in debt relief to 414k borrowers under that “SAVE” plan.)  At the same time, the IMF said the US should raise taxes to reduce the US federal debt and put off any rate cut until at least late 2024.  Meanwhile, mortgage finance agency Freddie Mac told Reuters Thursday that the US 30-year fixed-rate mortgages fell to the lowest rate since mid-March, with the national average down to 6.77% from the prior week’s 6.89%.  Finally, Reuters reported that the state of CA reported that TSLA car registrations fell in Q2.  TSLA’s 52,211 new registrations for Q2 was down and a third consecutive quarter of falling new registrations. 

With that background, it looks as if the markets are enjoying the Sunday and overnight news. All three major index ETFs gapped up to start the premarket session. Since that point, SPY and QQQ have followed through with good-sized white-body candles showing no wick at this point. For its part, DIA gapped less and has given a smaller white-body candle as it retests its T-line (8ema) from below. So, the premarket looks strongly Bullish, but the short-term trend is Bearish. Meanwhile, in the mid-term and longer-term, there is no way to look at markets except to say they remain very bullish and not far from all-time highs. In terms of extension, QQQ is the most extended to the downside, but the early session action has relieve the worst of its over-done issue. At the same time, the T2122 indicator remains in the center of its mid-range. Therefore, the market has room to run in either direction if the Bulls or Bears can find momentum. With regard to those 10 big dog tickers, all 10 are strongly green in the early session with the biggest dog (NVDA, +2.06%) leading that way again both in terms of move and volume. However, the least of the big dog movers is NFLX (+0.40%).

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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