Markets started the day flat, rallied into noon, and then traded sideways before rallying again the last 30 minutes.  SPY opened up 0.02%, DIA opened dead flat, and QQQ opened down 0.06%.  From there SPY and DIA began their rally into noon.  QQQ pulled back for 20 minutes after the open, but then got in line and followed the other major index ETFs higher.  At noon, all three took a 3.5-hour break before rallying into new highs near the close.  They all would have closed on their highs except for profit taking the last 5 minutes.  This action gave us large, white-bodied candles with tiny upper wicks in all three major index ETF.  SPY printed a new all-time high and closed at a new all-time high close.  DIA gave us a new all-time high close.  QQQ didn’t make it as far, only printing its highest close since July 16. (QQQ is just less than 2% away from its all-time high close.)  This all took place on below-average volume in SPY and QQQ and above-average volume in DIA. 

On the day, nine of the 10 sectors were in the green with Technology (+0.79%) leading but not way out ahead of other sectors.  Only Utilities (-0.62%) was in the red and lagged far behind all other sectors.  Meanwhile, SPY gained 0.69%, DIA gained 1.01%, and QQQ gained 0.79%. VXX fell almost 2.5% to close at 54.03 and T2122 climbed a bit, but remains in its mid-range, at 68.36.  At the same time, 10-Year bond yields rose to close at 4.073% while Oil (WTI) fell 0.38% to close at $73.28 per barrel. In summary, it was the Bull’s market from the open of the session.  A flat start across the board led to a strong morning rally.  This was followed by an afternoon pause, but the Bulls came back for the last 30 minutes to drive us back to new highs.  It is worth noting that the September Fed Meeting Minutes were a nothing burger.

The major economic news scheduled for Wednesday was limited to Weekly EIA Crude Oil Inventories came in with a larger inventory build than expected at +5.810 million barrels (compared to a +2.000-million-barrel forecast and ever versus the prior week’s +3.889 million barrels). 

As mentioned, we also got the September FOMC Meeting Minutes in the afternoon on Wednesday.  They really revealed nothing that was not know from Fed Chair Powell’s post-decision press conference and other Fed member statements since.  It said that Fed members “were divided” on whether the rat cut should have been a half percent.  (That said, the most hawkish FOMC member, Fed Governor Bowman, was the only voter to vote against the half-percent cut.  She said she preferred a quarter-point cut instead.  In fact, the minutes said “a substantial majority” of Fed members backed the half-percent cut.)  The minutes said, “Some participants observed that they would’ve preferred a 25-basis-point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision.” Later, the minutes said, “Participants emphasized that it was important to communicate that the recalibration of the stance of policy at this meeting should not be interpreted as evidence of a less favorable economic outlook or as a signal that the pace of policy easing would be more rapid than participants’ assessments of the appropriate path.”  The bottom line is that FOMC members believed the economy remains in good shape and are confident inflation is falling toward the 2% target.  The minutes showed the division was not over any data in-hand, but rather about their forecast of the future economy. 

In other Fed news, on Wednesday, Dallas Fed President Logan said she supported last month’s half-point rate cut.  However, she said she also wants smaller cuts in the meetings ahead given remaining upside risks on inflation and “meaningful uncertainty” over the economic outlook.  She said, “Following last month’s half-percentage-point cut in the fed funds rate, a more gradual path back to a normal policy stance will likely be appropriate from here to best balance the risks to our dual-mandate goals.”

In stock news, on Wednesday, TSLA announced that its sales of China-made vehicles were up 19.2% in September (year-on-year) in China.  (For reference, the Chinese EV maker BYD, which is TSLA’s main competitor reported a 45.56% increase year-on-year in September.)  At the same time, Bloomberg reported that TSLA’s robotaxi will have two front seats and gull-wing doors.  The report also said TSLA CEO Musk is expected to “discuss “Full Self-Driving” software assistance from TSLA semis soon. Later, META announced it is expanding the availability of its AI chatbot (META AI) to 21 new markets, including the UK and Brazil in efforts to compete with OpenAI’s ChatGPT.  At the same time, EADSY (Airbus) reported that its plane deliveries fell 9% in September to 50 compared to the same month in 2023.  (This comes a day after BA reported just 33 planes delivered last month.)  Later, Bloomberg reported that the CEO of STLA is planning on making major management changes as he faces heavy pressure.  The report said, CEO Tavares’ plan (offered to the board to save his job at a two-day meeting this week) could affect finance teams, regional heads and brand executives among others.  After the close, CNBC reported that AMZN is now testing full-automated mini-warehouses for Whole Foods stores.  The move is intended to let customers pick up orders at the checkout and reduce shopping time.

In stock legal and governmental news, on Wednesday, NVAX received European Commission approval for its latest version of COVID-19 vaccine which targets the currently predominant JN.1 strain of the virus.  The authorization was for individuals 12 years and older throughout the EU.  At the same time, BIIB’s flezartamab antibody treatment received the FDA’s “breakthrough therapy” designation.  BIIB said the drug will now begin late-stage trials. Later, the NHTSA announced that HMC is recalling 2 million cars and SUVs over a steering issue that can increase the risk of crashes.  (!.7 million of the vehicles are in the US with the remainder in Canada and Mexico.) 

Elsewhere, the FTC announced that MAR and its subsidiary HOT have agreed to put in place an information security program to settle charges related to several data breaches (affecting 344 million customers) between 2014 and 2020.  Separately, MAR agreed to pay a $52 million penalty to 49 states and the District of Columbia over the same issue.  Later, GSK has settled 80,000 Zantac cancer-related lawsuits for $2.2 billion.  The settlement, reached with 10 class-action law firms represent 93% of the company’s pending Zantac suits.  GSK also announced it would pay $70 million to settle a related whistleblower lawsuit.  At the same time, SMNEY (Siemens Energy) filed a lawsuit against Venezuela-owned Citgo Petroleum trying to recover about $200 million from a promissory note that is in default.

In miscellaneous news, on Wednesday evening Hurricane Milton came ashore as a Category 3 storm, making landfall just south of Tampa Bay in Bradenton to Sarasota, FL. As of this morning, millions of residents and an unknown number of businesses are without power.  However, the worst is past as the storm crossed the peninsula and headed back out to sea after crossing Florida.  Ahead of the storm, the disgraced ex-President and MAGA minions continue to spread lies, distortions, and misinformation related to FEMA, responses, conspiracy theory-based motives, available money, and everything else.  It got so bad that even some GOP members have broken ranks to try to correct the lies and limit the damage. Elsewhere, in China, President Xi Jinping seems to have gotten the message after two days of fierce selling in Chinese markets. The stimulus package announced Monday fell flat as it came in 1/15^th of what had been expected.  So, the Chinese government announced it will hold a briefing Saturday on fiscal policy that is intended to buttress growth.

In Middle East news, Israeli campaigns in Lebanon and Gaza continued Wednesday.  Israel sent thousands of additional ground troops into Lebanon during the day. In addition, Israeli air strikes in a Gaza refugee camp killed dozens. At the same time, the first Israeli civilian deaths (two of them) were reported in Northern Israel after 90+ (per BBC, I’ve seen other numbers) retaliatory Hezbollah rockets were fired into that area.  At the political level, Israeli PM Netanyahu got the phone call he had demanded with President Biden (before allowing his rival to travel to the US), who told him to limit civilian casualties.  This call will likely clear the way for Netanyahu’s (rival and) Defense Minister Gallant to travel to the US to discuss the Israeli retaliation for last week’s 180-missile Iran strike.  Meanwhile, Israel again warned Lebanon they will “fall into the abyss of a long war that will bring destruction and suffering similar to what we see in Gaza,” implying they could avoid this fate by getting rid of Hezbollah.  (Presumably, this PR stunt would mean he wants the Christian, Druze, and Sunni Lebanese to start a Lebanese civil war and take over from Israel…in the middle of the Israeli invasion and bombing campaign. That seems a lot like demanding a unicorn. It also sounds like “Don’t make me hurt you…see what you made me do.”)

Overnight, Asian markets were mostly green as the Chinese promise of a Saturday meeting to explain fiscal policy and how it will prop up their economy stopped the bleeding in Chinese markets.  Shenzhen (-0.82%) was the only significant loser in the region while Hong Kong (+2.98%) and Shanghai (+1.32%) led the gains.  In Europe, the bourses lean toward the red side at midday with 11 of 14 exchanges below break-even.  The CAC (-0.22%), DAX (-0.06%), and FTSE (-0.25%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a slightly red star to the day.  The DIA implies a -0.11% open, the SPY is implying a -0.18% open, and the QQQ implies a -0.22% open at this hour.  At the same time, 10-Year bond yields are up to 4.092% and Oil (WTI) has popped 1.3% to $74.18 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September Core CPI, and September CPI, (all at 8:30 a.m.), September Federal Budget Balance (2 p.m.), and Fed Balance Sheet (4:30 p.m.). We also hear from Fed member Williams (11 a.m.). The no major earnings reports scheduled for before the open are limited to DAL and DPZ. Then, after the close, there are no major reports scheduled.

In economic news later this week, on Friday, September Core PPI, September 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, on Friday, earnings season kicks off again in earnest as BK, BLK, FAST, JPM, and WFC report.

So far this morning, SVNDY reported beats on both the revenue and earnings lines.  At the same time, DPZ missed on revenue while beating on earnings.  However, DAL reported missed on both the top and bottom lines.

With that background, markets are just on the red side of flat at this point of the premarket. SPY opened the early session flat and has traded slightly lower. QQQ opened premarket lower and traded down before recovering. Meanwhile, DIA gapped a bit lower and has put in a white candle in the early session to also recover. All three major index ETFs are above their T-line (8ema). So, the short-term trend remains modestly bullish. The mid-term trend remains bullish. In the longer-term we still have a strong Bull trend in all three major index ETFs. (SPY and DIA both printed new all-time high closes again Wednesday.) With regard to extension, none of the major index ETFs are extended from its T-line (8ema). In addition, the T2122 indicator remains in the mid-range. So, markets have room to run either direction, if either the Bulls or Bears can find momentum. With regard to those 10 big dog tickers, seven of the 10 are in the red this morning. TSLA (+1.15%) leads the three gainers while AAPL (-0.33%) is at the head of those headed lower. The biggest dog, NVDA (-0.14%) is barely ahead of TSLA in terms of the dollar-volume traded. This is abnormal (at least for the last year or so) and not the common state of recent bullish moves by the market.

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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