Thursday was a crazy roller coaster ride.  SPY gapped up 0.35%, DIA gapped up a whopping 0.73%, and QQQ gapped up 0.39%.  From there, SPY and QQQ slowly and steadily rallied to the high of the day at 12:50 p.m.  Then both gave us 70 minutes of mostly sideways action.  Then the floor fell out as both SPY and QQQ sold off fast to recross their opening gaps and hit the lows about 2:50 p.m.  Then the rest of the day the Bulls and Bears duked it out in chop along the lows.  Meanwhile, after the open, DIA immediately faded its opening gap, bounced up off of Wednesday’s closing price at 10 a.m. and rallied sharply until 12:30 p.m. before trading sideways in a tight range until 2:25 p.m.  At that point, it followed the other major index ETFs and sold off for 15 minutes, back down into the opening gap. From there, just like the broader index ETFs, DIA saw the Bulls and Bears chop along the afternoon lows.  At day end, DIA printed a new all-time high and a new all-time high close.

On the day, eight of the 10 sectors were in the green with Energy (+0.95%) leading the way higher.  On the other side, Communications Services (-0.54%) and Consumer Defensive (-0.47%) were the two losing sectors.  At the same time, SPY eked out a 0.01% gain, DIA gained 0.62%, and QQQ lost 0.15%.  The VXX fell 3.57% to close at a very low 45.88% and T2122 popped back up into the top half of its overbought range at 92.57.  10-year bond yields rose to close at 3.865% while Oil (WTI) dropped 1.85% to close at $75.90 per barrel.  So, Thursday was quite a whiplash with gaps higher, morning rallies, and an afternoon selloff.  All three major index ETFs printed indecisive, black-bodied, Spinning Top candles with SPY retesting and holding above its T-line (8ema) while QQQ retested from below and failed that test.  (Obviously, at its all-time highs, DIA remains well above its T-line.)  This happened on above-average volume in the DIA, average volume in the QQQ, and below-average volume in the SPY.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in slightly below expectations at 231k (compared to a 232k forecast and the prior week 233k).  On the ongoing side, Weekly Continuing Jobless Claims were up to 1,868k (below the forecast of 1,870k, but up from the prior week 1,855k).  At the same time, Preliminary Q2 GDP was stronger than anticipated (revised up) at +3.0% (versus a forecast of +2.8% and far better than Q1’s +1.4%).  On the cost of growth side, the Preliminary Q2 GDP Price Index was two ticks higher than predicted at +2.5% (compared to a +2.3% forecast, but down significantly from Q1’s +3.1%).  At the same time, July Goods Trade Balance was worse than expected at -$102.66 billion (versus a forecasted -$97.70 billion and the prior month’s -$96.56 billion).  In terms of inventories, Preliminary July Retail Inventories were up two ticks to +0.5% (compared to a June +0.3% reading).  Later, July Pending Home Sales came in EXTREMELY LOW at -5.5% (compared to a +0.2% forecast and drastically down from June’s +4.8% value).  Finally, after the close, the Fed Balance Sheet showed a strong decline of $71 billion to $7.123 trillion.

After the close, ADSK, DELL, GAP, and MRVL all reported beats on both the revenue and earnings lines.  Meanwhile, LULU missed on revenue while beating on earnings.  However, AMRK and ULTA missed on both the top and bottom lines.

After the close, AFRM, COO, CRWD, FIVE, NTAP, NTNX, NVDA, OKTA, PSTG, CRM, VEEV, and VSCO all reported beats on both the revenue and earnings lines.  At the same time, GEF, GES, and HPQ all beat on revenue while missing on earnings.

In stock news, on Thursday, UBER announced it will invest in UK startup Wayve to help them work with major automakers to accelerate its self-driving technology.  (The size of the investment was not disclosed.) Later, Bloomberg reported that Samsung is exploring options to acquire at least some of NOK assets.  At the same time, Japan’s Nippon Steel announced it plans to invest and additional $1.3 billion in two of X’s steel mills (assuming their acquisition is approved).  Later, OKE announced it would buy $5.9 billion worth of mid-stream assets, including a 43% stake in ENLC to bolster its Permian Basin and mid-continent competitive position. At the same time, the Teamster union said that AMZN workers across GA, CA, KY, and NY will be joining the 100 AMZN drivers from IL that have been striking since June. 

Meanwhile, MRO shareholders voted in favor of COP’s $16 billion acquisition.  Later, Reuters reported that DELL is attempting to sell its SecureWorks cybersecurity unit again.  (DELL failed to find a buyer for the unit in 2019 and 2020.)  At the same time, Reuters also reported that AAPL and NVDA are both in talks about joining the next round of funding of OpenAI as they seek to gain (AAPL) or improve (NVDA) their AI offerings.  After hours, Reuters reported that bearish leveraged ETFs tied to NVDA saw a +446% surge in buying (net long the levered bearish bet on NVDA) between NVDA’s May 21 earnings and its reported Wednesday evening.  (This could be coincidence or indicate a change in sentiment on the market leader.) 

In stock legal and governmental news, on Thursday, EIX announced it will seek CA Public Utilities Commission approval of a settlement agreement related to 2017 and 2018 natural disasters.  If approved, EIX might be able to recover $1.6 of the $2.7 billion in losses it paid.  Later, a LMT and RTX joint venture was awarded a $1.3 billion contract to produce Javelin missiles for the US Army. Meanwhile, the US 6^th Circuit Court of Appeals ruled against GM, saying the company must face a class-action lawsuit related to selling 800,000 vehicles with faulty transmissions.  After the close, LUNR announced it had won a $117 million contract from NASA. 

Also after the close, Bloomberg reported that the Netherlands plans to limit ASML’s ability to repair and maintain its equipment that had been sold to China, by not renewing the licenses required for ASML to do that business when they expire at year end.  At the same time, Reuters reported that the Pentagon is withholding $5 million per F-35 jet as deliveries of those jets has resumed.  The price per jet is $82.5 million and withholding $5 million is intended to push LMT to solve the problems that had caused a months-long stoppage of F-35 deliveries.  (F-35s account for 27% of LMT sales.)  Later, NDAQ agreed to pay $22 million to settle CFTC charges that its former energy contract unit failed to perks offered to certain traders as well as making false and misleading statements to the regulator. 

In miscellaneous news, on Thursday, two AI startups (OpenAI and Anthropic) signed deals with the US government for “research, testing, and evaluation of AI safety.”  At the same time, Freddie Mac reported that the national average 30-year, fixed-rate, conforming loan rate fell to 6.35%.  This was the lowest average since early May 2023.  Later, rating agency Fitch issued a report saying that US fiscal policy is unlikely to change, regardless of which major candidate wins the Presidential election.  This was released as part of the agency affirming the US credit rating of AA+. 

Overnight, Asian markets were green across the board.  Shenzhen (+2.38%) was way out front leading the region higher, followed by Malaysia (+1.53%), Hong Kong (+1.14%), and Singapore (+1.13%).  In Europe, we see a similar but not clean sweep as three of the smaller bourses (out of 14) show red at midday.  The CAC (+0.34%), DAX (+0.17%), and FTSE (+0.26%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a move higher ahead of PCE data.  The DIA implies a +0.23% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.75% open at this hour.  At the same time, 10-Year bond yields are down slightly to 3.858% and Oil (WTI) is flat at $75.90 per barrel in early trading.

The major economic news scheduled for Friday includes July Core PCE Price Index, July PCE Price Index, and July Personal Spending (all at 8:30 a.m.), Aug Chicago PMI (9:45 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  The major earnings reports scheduled for before the open are limited to JKS and MNSO.  Then, after the close, there are no significant reports scheduled.

So far this morning, JKS and MNSO missed on the revenue line while beating on earnings.  On the other side, FRO beat on revenue while missing on earnings.

With that background, all three major index ETFs gapped higher to start the premarket session. However, all three have also printed small-body, indecisive candles since that point as traders wait on PCE data. The gap took QQQ back above its T-line, so all three are above their respective 8ema at this point. So, the short-term trend is still bullish. At the same time, the mid-term trend is bullish and in the long-term, we are now clearly back in a Bull trend with DIA sitting at all-time highs and SPY less than a percent from its high-water mark. In terms of extension, SPY and QQQ are fine relative to their T-line, but DIA is getting a little stretched above its own. In addition, the T2122 indicator has popped back up into the top half of its overbought territory. So, the market could use a pause or pullback. However, remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, all 10 are in the green this morning with the INTC (+3.18%) out front and AAPL (+0.52%) the laggard. With all of this said, remember its Friday, pay day, and we are at month end as well as sitting in front of a 3-day weekend. So, prepare your account for the holiday weekend news cycles and don’t forget to take profits.

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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