Markets were volatile Thursday, giving us great whiplash moves.  SPY opened flat at +0.02%, DIA opened down 0.03%, and QQQ opened 0.05% higher.  At that point, SPY and QQQ sold off sharply until 10:15 a.m. when they hit the lows of the day.  Then they both reversed and rallied hard back across the open to the highs of the day at 1:15 p.m.  However, then they both reversed again selling off hard again trying to reach the lows again, but coming up just a little short.  Meanwhile, DIA just rallied after its open, also reaching the highs of the day at 1:15 p.m.  Then it too sold off, but not quite as strongly as the other two major index ETFs.  This action gave us a black-bodied, large-bodied Spinning Top candle in QQQ, a black-bodied, large Inverted Hammer in the SPY, and a white-bodied Inverted Hammer in the DIA. 

On the day, six of the 10 sectors were in the green with Industrials (+1.09%) out front leading the gaining sectors higher.  On the other side, Technology (-0.76%) was again the worst-performing sector.  At the same time, SPY fell 0.52%, DIA gained 0.21%, and QQQ fell 1.10%.  VXX climber just a bit to 49.59.  Meanwhile, T2122 spiked back up into the upper half of its mid-range at 59.11.  On the bond front, 10-year bond yields fell to close at 4.246% and Oil (WTI) gained 0.68% to close at $78.12 per barrel.  This happened on above-average volume in the QQQ and average volume in the SPY and DIA.  So, Thursday saw a continuation of the sharp selloff in SPY and QQQ.  However, DIA held its ground after the rough week or so.  If there was any upside for Bulls, it would be that the QQQ closed on its long-term uptrend line dating back to October.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in just below predictions at 235k (compared to a forecast of 237k and the prior week’s 245k).  For the ongoing side, Weekly Continuing Jobless Claims were also better than expected at 1,851k (versus a forecast of 1,860k, which was also the prior week’s value).  At the same time, June Core Durable Goods Orders showed a jump of +0.5% (compared to a forecasted +0.2% and the far better than May’s -0.1%).  On the headline number, June Durable Goods Orders showed a large and unexpected decline of -6.6% (versus a forecast calling for +0.3% and May’s +0.1% reading).  I’ve got no idea how the core and headline numbers on that work together.  In terms of Preliminary Q2 PCE Prices, they were up 2.90% (compared to a +2.70% forecast but down from June version’s +3.70%).  At the same time, Preliminary Q2 GDP was much stronger than anticipated at +2.80% (versus a +2.0% forecast and a June value of +1.4%).  In terms of prices, the Preliminary Q2 GDP Price Index was not as high as was expected at +2.3% (compared to the +2.6% forecast and well down from the June +3.1% reading).  Finally, after the close, the Fed Balance Sheet showed a modest decline of $3 billion for the week, down to $7.205 trillion from the prior week’s $7.208 trillion value.

After the close, ALSN, AJG, ASB, BKR, BYD, CINF, COLB, FIX, DECK, EIX, ENIC, ENSG, ERIE, FIBK, HIG, LHX, LPLA, DOC, SKYW, SSNC, TXRH, UCTT, and VLTO all reported beats on both the revenue and earnings lines.  Meanwhile, ATR, COLM, DXCM, DLR, EMN, EGO, FBIN, MTX, MHK, NSC, and TFII missed on revenue while beating on earnings.  On the other side, TBBK, SAM, and PFG beat on revenue while missing on earnings.  However, BTE, JNPR, OLN, SKX, WY, and WKC missed on both the top and bottom lines.

In stock news, on Thursday, WBD stock fell 5.67% after it failed to renew its NBA broadcast rights contract (on its TNT channel).  (WBD indicated it intended to sue after the league rejected its offer to match the bid from AMZN.)  At the same time, Reuters reported that iPhone sales in China during Q2 fell 6.7% while Chinese rival Huawei saw its China phone sale surge by 10%.  Later, AAL lowered its annual revenue forecast, citing a poor sales strategy.  At the same time, INST announced it had agreed to be acquired by KKR for $23.60 per share or $4.8 billion.  Later, VLO announced it plans to run its refineries at 92% of capacity in Q3.  This is down from the 94% VLO operated at during Q2 and well below its previously-announced plan to operate at more than 95% of capacity. 

Meanwhile, Reuters reported that TSLA CEO Musk intends to ask the board of TSLA to make a $5 billion investment into his xAI startup company.  Later, BAC announced its payments app had handled a record $500 billion in payments by mid-year.  At the same time, in Canada, WMT announced it will invest $53 million to increase the wages of 40,000 Canadian workers.  Later, Bloomberg reported that GM intends to begin charging for Cruise robotaxi rides in early 2025.  At the same time, LUV announced it will end its long-standing “open seating” policy as the airline seeks to improve earnings by instituting seating price tiers.  Later, OpenAI announced it is now testing a direct competitor to GOOGL and to a much lesser extent MSFT (which is a also ran in the market in question) search engines called SearchGPT.

In stock legal and governmental news, on Thursday, Reuters reported multiple sources tell it META will be hit with its first EU antitrust fines within a few weeks.  The fines are for META tying classified advertisements service Marketplace with its Facebook social network.  (The fine could be as much as $13.4 billion, which is 10% of its 2023 global revenue.)  At the same time, in the UK, COIN was fined $4.5 million for breaching the British financial crimes requirements.  Later, the US Dept. of justice announced that it and BA had finalized the company’s guilty plea.  BA will pay at least $243.6 million in fines for breaching its 2021 agreement that allowed it to avoid charges then.  At the same time, Russia reduced the speed of GOOGL’s YouTube service by 40% in order (with a threat to reduce it further to down 70%) next week) to pressure the company to reinstate blocked Russian YouTube channels. 

Elsewhere, the KR $25 billion acquisition of ACI has been halted until after a trial in CO that is scheduled to start in September.  At the same time, the CA Supreme Court rejected a union lawsuit, upholding the recent ballot measure that called for treating UBER and LYFT drivers as independent contractors instead of employees.  Later, BAYRY (Bayer) announced a settlement where it will pay $160 million to resolve Seattle’s PCB contamination lawsuit against the company’s Monsanto unit.  At the same time, a shareholder has filed suit to block the long and troubled merger (acquisition) of PARA by Skydance Media.  The suit alleges the deal would cost non-voting shareholders $1.65 billion.

Overnight, Asian markets were mixed but leaned toward the green.  India (+1.76%), Shenzhen (+1.45%), and Thailand (+1.10%) led the seven gainers. Meanwhile, Taiwan (-3.29%) was an outlier as it resumed trading after being closed due to typhoon for two days.  That outlier was nearly 3% worse than any of the other four red exchanges. In Europe, markets lean heavily toward the green at midday with only two of the 15 bourses in the red.  The CAC (+0.90%), DAX (+0.31%), and FTSE (+0.68%) lead the region higher in early afternoon trade.  In the US, as of 7:00 a.m., Futures are pointing toward a strongly green open early (before PCE data).  The DIA implies a +0.60% open, the SPY is implying a +0.75% open, and the QQQ implies a +0.99% open at this hour.  At the same time, 10-Year bond yields are down to 4.244% and Oil (WTI) is off 0.42% to $77.95 per barrel in early trading.

The major economic news scheduled for Friday, June Core PCE Price Index, June PCE Price Index, and June Personal Spending (all at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 1-Year Inflation Expectations, and Michigan Consumer 5-Year Inflation Expectations (all at 10 a.m.) are reported.  The major earnings reports before the open include MMM, AB, AON, AVTR, BAH, BMY, CNC, CHTR, CL, BEN, GNTX, NWL, POR, SAIA, and TROW.  There are no major earnings reports scheduled for after the close.

In miscellaneous news, on Thursday, the Pentagon announced it had found another $2 billion accounting error that had caused the value of munitions sent to Ukraine to be overvalued.  (They had used replacement cost rather than depreciated value to place a price on the goods.)  This effectively increases the amount the US can send Ukraine by another $2 billion.  Elsewhere, attacks on French railways are causing travel chaos in Paris as the city preps for today’s opening ceremony of the Olympics.  About 250k passengers will be disrupted today and more than 800k disrupted over the weekend.  At the same time, a French-Swiss airport (Basel-Mulhouse) was evacuated and closed for safety reasons.  Finally, in overnight news, Reuters reported that HMC plans to close a factory in China as well as temporarily halting production at another plant.  The halt is part of a retooling to start producing more electric vehicles amidst heavy competition from Chinese EV rivals.

So far this morning, MMM, AFLYY, AB, BASFY, BMY, CHTR, CL, POR, TROW, and VLOWY all reported beats on both the revenue and earnings lines.  Meanwhile, AVTR and CRI missed on revenue while beating on earnings.  On the other side, AON, BAH, and CNC beat on revenue while missing on earnings. 

With that background, it looks as if the Bulls are looking to start Friday with a significant gap higher. All three major index ETFs began the premarket with a gap up and have followed through with white-bodied candles. Only QQQ has wicks on its early session candle, indicating less indecision among the DIA and SPY early. DIS is even retesting its T-line (8ema) from below having crossed above in the premarket. However, with all that said, we are still an hour away from the PCE Inflation data that could rock the boat (which just don’t know in what direction). So, after a rough four days in the market, it appears the Bulls have some momentum very early on a Friday. The short-term trend remains 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 still not all that far from all-time highs. In terms of extension, even considering the premarket move higher, QQQ is stretched below its T-line. At the same time, the T2122 indicator is now in its mid-range. Therefore, overall, this means the market still has room to run in either direction if the market can find momentum. With regard to those 10 big dog tickers, all 10 are solidly or strongly in the green in the early session with AMD (+2.39%) and NVDA (+2.31%) leading the group higher on strong moves and good volume. Meanwhile, GOOGL (+0.41%) is the laggard, having moved less than half as much as the next lowest performer MSFT (+0.87%).

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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