Wednesday saw the Bulls in charge after CPI numbers they liked. SPY gapped 0.44% higher, DIA opened just 0.09% higher, and QQQ gapped up 0.84%. From there, SPY and QQQ began a modest rally that lasted until noon before trading sideways in a tight range the rest of the day. For its part, after the flat open, DIA meandered back and forth across that tiny gap, but ended the day one a very modest two-hour selloff. This action gave us a gap-up Bull Kicker type candle with an upper wick. SPY crossed back above its T-line (8ema) and closed within pennies of another all-time high close. Meanwhile, QQQ did give us a Bull Kicker candle with tiny upper wick and printed a new all-time high and new all-time high close. Finally, DIA, ever the contrarian, gave us a black-bodied candle with upper wick and printed a 5th consecutive black and down candle. This all happened on below-average volume in all three major index ETFs.
On the day, seven of the 10 of the sectors were in the green as Technology (+1.62%) was way out front leading the market higher. On the other side, Healthcare (-0.67%) was the laggard. Meanwhile, SPY gained 0.77%, DIA lost 0.27%, and QQQ gained 1.79%. VXX fell almost another eight-tenths of a percent to close at 42.13 and T2122 climbed out of oversold territory and back into the mid-range to close at 38.62. On the bond side, 10-Year bond yields climbed to 4.269 while Oil (WTI) popped 2.51% closing at $70.30 per barrel. So, Wednesday was mostly about the opening gap as traders at least weren’t disappointed by the CPI print. After that gap up and the modest morning rally, markets just drifted the rest of the day as tech stocks ran higher. TSLA (+5.93%), GOOGL (+5.52%), and NVDA (+3.14) led that charge.
The major economic news scheduled for Wednesday include Month-on-Month Nov. Core CPI which came in flat as expected at +0.3% (compared to a forecast and Oct. reading of +0.3%). On an annualized basis, Year-on-Year November Core CPI was also flat as expected at +3.3% (versus the forecast an October value of +3.3%). On the headline number, Month-on-Month Nov. CPI was up a tick to +0.3% (compared to a forecast of +0.3% and October reading of +0.2%). On the annualized basis, Year-on-Year Nov. CPI was also up a tick to 2.7% (versus a +2.7% forecast and an October value of +2.6%). Later, EIA Weekly Crude Oil Inventories showed a larger than expected drawdown of 1.435 million barrels (compared to a forecasted 1.000-million-barrel drawdown but much less than the prior week’s 5.073-million-barrel draw). Later, the November Federal Budget Balance came in with a larger-than-predicted deficit of $367.0 billion (versus a -$ 349.0 billion forecast and dramatically higher than October’s -$257.0 billion).
In Fed news, we have started the Fed quiet period ahead of next week’s meeting.
After the close, ADBE and NDSN reported beats on both the revenue and earnings lines.
Overnight, Asian markets were mixed but leaned toward the green with eight of the 12 exchanges above break-even. South Korea (+1.62%), Japan (+1.21%), and Hong Kong (+1.20%) paced the gains. Meanwhile, India (-0.38%) led the losses. In Europe, we see a similar picture with nine of the 14 bourses in the green. The CAC (-0.01%), DAX (+0.03%), and FTSE (+0.13%) lead the region modestly higher in early afternoon trade. In the US, as of 7:54 a.m., Futures are pointing toward a modestly down start to the day. The DIA implies a -0.11% open, the SPY is implying a -0.195 open, and the QQQ implies a -0.39% open at this hour. At the same time, 10-Year Bond yields are spiking to 4.302% and Oil (WTI) is up a quarter percent to $70.45 per barrel in early trading.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Nov. Core PPI and Nov. PPI (all at 8:30 p.m.), and the Fed Balance Sheet (4:30 p.m.). The major earnings reports scheduled for before the open are limited to CIEN. Then, after the close, AVGO, COST, and RH report.
In economic news later this week, on Friday, Nov. Export Price Index and Nov. Import Price Index are reported.
In terms of earnings reports later this week, there are no reports scheduled for Friday.
So far this morning, CIEN beat on revenue while missing on earnings.
With that background, it seems stocks are modestly lower in a divergent way ahead of the morning data. All three major index ETFs have gapped a bit lower to start the premarket. However, SPY had been flat since, QQQ is giving us a black-bodied candle with no wicks, and DIA is printing a white-bodied candle with no wicks climbing back toward flat. SPY and QQQ remains above their T-line (8ema) while DIA remains below its own T-line. It bears repeating that SPY, DIA, and QQQ all still sit at or very near their all-time highs. However, with two of the three sitting modestly above their T-line the short-term trend has to be seen as bullish now. Looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs. In terms of extension, none of the three major index ETFs are too stretched from their T-lines. Meanwhile, the T2122 indicator is back in the bottom half of its mid-range. So, while both sides of the market have room to move today if they can find momentum. In terms of the 10 Big Dogs, seven of the 10 are in red numbers at this point of the morning. NVDA (-0.47%) and META (-0.41%) pace the losses while TSLA (+0.38%) is holding up better than the others. TSLA is also the leader in dollar-volume traded sitting at a little more than 4 times as much money traded than NVDA.
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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