Markets gapped higher on Monday, following the rest of the globe higher early.  SPY gapped up 0.30%, DIA opened 0.23% higher, and QQQ gapped up 0.62%.  From there all three major index ETFs rode a roller-coaster all day, recrossing the morning gap to reach the lows at 11:30 a.m., climbing back to the early highs about 12:30 p.m., and then selling off again, only to begin rebounding at about 2:30 p.m.  This action gave us indecisive candles in all three.  The SPY gave us a black-bodied Spinning Top type candle that did not quite retest its T-line (8ema) from below.  At the same time, DIA printed a black-bodied Hanging Man type candle that did not quite retest its T-line from above and QQQ printed a black-bodied Spinning Top candle.  This happened on well below-average volume in the SPY, DIA, and QQQ.

On the day, six of the 10 sectors were in the red with Energy (-0.87%) out front leading the market lower.  On the other side, Consumer Cyclical (+0.65%) held up significantly better than the other sector.  At the same time, SPY gained 0.06%, DIA fell 0.13%, and QQQ gained 0.20%.  VXX fell 1.47% to close at 46.09.  Meanwhile, T2122 dropped out of its overbought territory to close at the top of its mid-range at 78.40.  On the bond front, 10-year bond yields dropped to close at 416.8% and Oil (WTI) dropped another 1.74% to close at $75.83 per barrel.  So, we saw a gap higher in all three major index ETFs, followed by a volatile day.  The whipsaw was worse in the QQQ and of a lower magnitude in the DIA with SPY in between the other two.

There was no major economic news scheduled for Monday and, obviously, FOMC members could not speak with their July meeting starting Tuesday. 

After the close, AMKR, CNO, CR, CVI, ESI, EQR, FFIV, FLS, HOLX, NEU, SFM, and VIV all reported beats on both the revenue and earnings lines.  Meanwhile, CWK, ST, SBAC, WELL, and WWD missed on revenue while beating on earnings.  On the other side, SYM beat on revenue while missing on earnings.  However, CHK and SANM missed on both the top and bottom lines.

In stock news, on Monday, the CEO of L (James Tisch) announced he will step down on December 31, with his son Benjamin slated to take over as his successor.  At the same time, the Financial Times reported that Swiss pharma company Roche is now accelerating its development of a weight-loss drug after promising data from its early-stage trials.  Roche is reportedly now hoping to be available by 2028, two years earlier than previously planned.  (This would be a direct competitor to NVO’s Wegovy and LLY’s Zepbound weight-loss drugs.)  Later, OXY announced it will sell its Delaware Basis assets (located in TX and NM) to PR for about $818 million.  At the same time, AAPL reached its first labor agreement, striking a tentative deal with retail workers at its Towson, MD store.  (The union members still need to ratify the contract.)

Elsewhere, Reuters reported that EADSY (Airbus) is restructuring its Space Systems unit without waiting on the outcome of consolidation talks with Italy-based DRS and French THLLY (Thales).  At the same time, ESGR announced it had agreed to a $5.1 billion buyout (taking it private) which amounts to $338 per share.  Later, MCD reported its first decline in sales in 13 quarters.  At the same time, Reuters reported that SJM is now exploring the sale of its Voortman Bakery brand for more than $350 million.  After the close, RSNT announced it agreed to buy rival FBMS in an all-stock deal worth $1.2 billion.  (FBMS owners will receive 1 share of RNST for each share of FBMS held.)

In stock legal and governmental news, on Monday, Reuters reported that HPE will get unconditional EU antitrust approval for its $14 billion acquisition of JNPR.  (The deal was originally announced in January.)  The decision is scheduled to be announced on August 1.  Later, a US District Judge ruled that WFC must face a lawsuit alleging the company defrauded shareholders by proclaiming their commitment to hiring diversity at the same time it was conducting “sham job interviews” of women and non-white applicants (with no intention of hiring them).  Later, the FCC announced that CHTR will a pay a $15 million civil penalty to resolve an investigation into the company’s non-compliance with network and 911 outage rules.  After the close, DAL announced it had hired a law firm and will seek compensations from MSFT and CRWD related to the recent global outage.  (No details were provided, but DAL canceled many thousands of flights due to its inability to recover from the IT outage.)

Overnight, Asian markets were mixed but leaned toward the red side. Hong Kong (-1.37%) paced the losses while New Zealand (+0.63%) led the gainers.  In Europe, we see the opposite picture taking shape with four red bourses and 11 in the green at midday.  The CAC (+0.45%), DAX (+0.45%), and FTSE (-0.20%) lead the region higher in early afternoon trade.  In the US, as of 7:15 a.m., Futures are pointing toward a modestly green start to the morning.  The DIA implies a flat +0.02% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.20% open at this hour.  At the same time, 10-Year bond yields are at 4.168% and Oil (WTI) is off slightly to $75.73 per barrel in early trading.

The major economic news scheduled for Tuesday includes the July Conf. Board Consumer Confidence and June JOLTs Job Openings (both at 10 a.m.) as well as API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports before the open include AGCO, AEP, AMT, ADM, ARCC, BGC, BP, CNP, GLW, EXP, ECL, EPD, IT, GPK, HWM, HUBB, ITW, INCY, IGT, JBLU, LDOS, DRS, LGIH, MHO, MRK, ONEW, PYPL, PFE, PSX, PHIN, PG, PEG, SPGI, SOFI, SWK, SYY, UFPI, WSO, XYL, and ZBRA.  Then, after the close, AMD, ACGL, ANET, EQH, AXS, BXP, CZR, CP, EA, EXR, FSLR, FE, HA, HLI, LSTR, LFUS, LYV, MTCH, MCY, MEOH, MSFT, MOD, MDLZ, NGD, NOG, OI, OVV, PINS, PSA, QRVO, QUAD, SWKS, SBUX, SYK, TEX, TX, UNM, WERN, and WU report.

In economic news later this week, on Wednesday, July ADP Nonfarm Employment Change, Q2 Employment Cost Index, July Chicago PMI, June Pending Home Sales, Weekly EIA Crude Oil Inventories, Fed Interest Rate decision, the FOMC Statement, and Fed Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q2 Nonfarm Productivity, Preliminary Q2 Unit Labor Costs, July S&P Global Mfg. PMI, June Construction Spending, July ISM Mfg. Employment, July ISM Mfg. PMI, and July ISM Mfg. Prices.  Finally, on Friday, July Avg. Hourly Earnings, July Nonfarm Payrolls, July Private Nonfarm Payrolls, July Participation Rate, July Unemployment Rate, and Jun Factory Orders are reported.

In terms of earnings reports later this week, on Wednesday, MO, ADP, AN, BBVA, BLCO, BA, BWA, BG, CDW, COR, GIB, CHEF, CLH, CNH, DAN, XRAY, DD, ENTG, FTS, GRMN, GTES, GEHC, GNRC, GGB, GSK, HES, HUM, HCM, JCI, KKR, KHC, LECO, MAR, MA, EDU, NCLH, OMF, OPCH, OSK, PSN, PAG, PNM, RITM, SMG, SLGN, SITE, SCL, SHOO, TMUS, TEF, TEVA, TKR, TT, TTMI, ULS, UMC, UTHR, VRSK, WAT, WEC, ACHC, AFL, AEM, AGI, ALB, ALGT, ALL, AIG, AWK, ANSS, AR, APA, ARM, AVB, BALY, BBSI, BV, CHRW, CWH, CVNA, CAKE, CMPR, CTSH, CODI,  COMP, CRBG, CTVA, DLX, EBAY, ETSY, EG, ES, EXAS, EXPI, FMC, GLF, GT, THG, HLF, HST, IEX, IR, JAZZ, KGC, KD, LRCX, MKL, VAC, META, MET, MGM, MAA, MUSA, MYRG, NFG, NE, PTVE, PGRE, PK, CNXN, PTC, QGEN, QCOM, QDEL, RRX, RUSHA, RHP, SCI, SON, SSRM, SUI, TDOC, TS, TTEK, TWI, RIG, VICI, and WDC report.  On Thursday, we hear from ADT, AER, APD, ALE, ATUS, AME, BUD, HOUS, APG, APO, APTV, MT, ARW, AXTA, BALL, BHC, BCE, BDX, BDC, BIIB, OWL, CNQ, CVE, CI, CIGI, COP, CROX, CMI, D, LPG, DRVN, DNB, ETN, ETR, NVRI, EXC, RACE, AG, FTDR, GIL, HSY, HTZ, DINO, HII, NSIT, NSP, IBP, ICE, IRM, ITRI, ITT, JHG, K, KIM, KEX, KTB, LH, LAUR, LTH, LNC, LAD, MIDD, NBIX, PATK, PBF, BTU, PNW, PWR, REGN, RBLX, SABR, SNDR, SHEL, SIRI, SO, STGW, TRGP, TFX, TRI, TM, TAC, UPBD, VAL, GWW, W, WEN, WCC, XEL, XPO, AES, AL, ALHC, LNT, AMZN, AEE, AAPL, ACA, TEAM, BECN, BZH, BIO, SQ, BKNG, BFAM, CE, CGAU, CC, CIVI, CLX, COIN, ED, CTRA, DASH, DORM, DKNG, EOG, ERO, FND, GEN, GDDY, HUBG, ICFI, INTC, LEG, MTZ, MATX, MELI, MTD, MCHP, MSI, NXT, OTEX, OPEN, OEC, POST, PRU, RGA, RMD, RNG, RKT, ROKU, RYAN, SEM, SNAP, SWN, TROX, TPC, TWLO, X, VTR, VRTX, and WSC.  Finally, on Friday, ARCB, ARES, ABG, BSAC, BERY, BTSG, BEPC, BEP, CBOE, GTLS, CVX, CHD, CNK, ENB, ESAB, XOM, FLR, FYBR, IMO, LIN, LYB, MGA, NMRK, OMI, PRGO, PAA, PAGP, PPL, TIXT, USM, and AMC report.

So far this morning, AEP, AMT, ARCC, CNP, IT, HWM, JBLU, LDOS, LGIH, MRK, NMR, PYPL, PFE, PSX, SOFI, SWK, XYL, and ZBRA all reported beats on both the revenue and earnings lines.  Meanwhile, BP, EXP, GPK, IGT, and PG missed on the revenue line while beating on earnings.  However, ADM and EDP missed on both the top and bottom lines.

In miscellaneous news, in Congress, Democratic Senator Warner (VA) introduced a bill to reform the Fed Discount Window, requiring all but the smallest banks to be prepared (pre-qualified and registered) to borrow from the Fed in the event of a liquidity problem.  This is contrary to the current situation where banks have soften felt is was a stigma and comes as the FOMC has been working hard (top-down) to get banks set up to be able to access those emergency funds.  Meanwhile, in Britian, new Labor Finance Minister announced an immediate cut of more than $7.072 billion in 2024 spending. She told Parliament that the previous Conservative administration had left spending on track to go $28 billion over budget this year. In addition, she announced tentative plans for another $10.4 billion in cuts for 2025.  (The interesting thing about this is that it is a complete 180-degree from public stereotypes that liberals spend and conservatives are fiscally sound, which is often not true.)  The point is that cuts may slow a UK economic rebound as Labor tries to get the budget in order.  Elsewhere, China took another step toward hiding its market situation.  Beijing announced that beginning August 18^th, it will stop publishing daily inflow/outflow data for overseas funds. 

In miscellaneous geopolitical news, it appears Russians continue their attacks on France during the Olympic games.  In addition, to coordinated arson attacks that shut down the rail system the day of the opening ceremonies, on Monday many of the country’s fiber optic broadband services were cut. However, broadband service in Paris were not sabotaged, perhaps due to heightened security in that area. Elsewhere, Bloomberg reported Monday that South Korea has identified who North Korean leader Kim Jong Un has chosen as his eventual successor.  Kim Jun-ae, Un’s preteen daughter (South Korea believes the daughter is 11 years old and his second of three children with his wife) has been tapped as the eventual heir apparent.  Meanwhile, in Venezuela, the Maduro regime appears to have stolen yet another election.  Exit polls had the opposition leader (third in line and the two leading opposition figures were barred from running) had captured more that 65% of votes.  However, Maduro’s hand-picked election commission declared that he had won by 51% to 44%.  At least hundreds of protesters took to the streets of Caracas to protest the “certified election” of Maduro.

With that background, it looks as if traders are waking up both modestly bullish and undecided this morning. All three major index ETFs gapped just a bit higher to start the premarket, but have traded indecisively since then. SPY and QQQ are printing white-bodied candles with wicks while DIA is printing a black-bodied candle (all three of which are small) in the early session. DIA remains above its T-line (8ema) while SPY and QQQ remain below their own T-lines. The very short-term trend is now Bullish. Meanwhile, in the mid-term and longer-term, there is no way to look at markets except to say they remain bullish and still not all that far from their all-time highs. In terms of extension, none of the major index ETFs are too stretched from their T-line. At the same time, the T2122 indicator has dropped to just outside overbought territory at the top-end of its mid-range. So, there is still room to run either direction, but it would seem the Bears have a little more slack with which to work. With regard to those 10 big dog tickers, eight of the 10 are in the green so far in the premarket as NFLX (+0.80%) is the leader (it is unusual that is the case) NVDA (-0.17%) is the laggard. TSLA (+0.41%) is well out in front of the others in terms of dollar volume traded followed by NVDA with a big drop off to the rest.

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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