Thursday saw a little divergence at the opening bell.  SPY gapped up 0.36%, DIA opened 0.14% lower, and QQQ gapped up 0.57%. From that point, SPY and QQQ bounced back-and-forth across their gaps all day while DIS spent the day copping sideways above its opening gap.  The most notable move was a 15-minute hard selloff at 3:30 p.m., which was met by a lesser 15-minute rebound rally to end the day.  (That was a market-wide reaction to President Trump again threatening tariffs on Canada and Mexico.)  This action gave us long-legged Doji-type candles in SPY and QQQ as well as a Bullish Engulfing candle with upper wick in the DIA.  Once again, this all happened on less-than-average volume in all three major index ETFs.

On the day, nine of the 10 of the sectors were in the green with Utilities (+2.41%) way out front leading the gainers.  On the other side, Communications Services (-2.02%) was the only red sector and lagged all other sectors by 2.87%.  At the same time, SPY gained 0.54%, DIA gained 0.37%, and QQQ gained 0.43%. Meanwhile VXX fell slightly again to close at 42.68 while T2122 popped back up into its overbought territory to close at 89.47.  On the bond side, 10-Year Bond yields fell to 4.524% and Oil (WTI) gained seven-tenths of a percent to t $73.14 per barrel.  So, Thursday saw markets shake off lower-than-expected Q4 GDP (perhaps because Q4 GDP Price Index was also lower than expected). 

The major economic news on Thursday included Weekly Initial Jobless Claims, which came in below expectations at 207k (compared to a 224k forecast and the prior week’s 223k reading).  For the ongoing side, Weekly Continuing Jobless Claims were also down to 1,858k (versus a 1,890k forecast and the prior week’s 1,900k value).  At the same time, Preliminary Q4 Core PCE Prices were reported as predicted at 2.50% (compared toa 2.50% forecast and up sharply from Q3’s 2.20% reading).  Meanwhile, Preliminary Q4 GDP was down sharply to 2.3% (versus a 2.7% forecast and the 3.1% Q3 reading).  On the price side, the Preliminary Q4 GDP Price Index was also lower than anticipated at 2.2% (versus a 2.5% forecast but up from Q3’s 1.9% value).  Later, December Pending Home Sales were down SHARPLY at -5.5% (compared to a forecast of being flat and November’s +1.6%).  Then, after the close, the Fed Balance Sheet showed a decline of $14 billion for the week, falling to $6.818 trillion.

After the close, AAPL, AJG, TEAM, BKR, TBBK, BOOT, CACC, DECK, GEN, HIG, INTC, KLAC, LPLA, OLN, RMD, SKYW, X, and V all reported beats on both the revenue and earnings lines.  Meanwhile, EMN and WY missed on revenue while beating on earnings.  However, CNI, PFSI, and PPG missed on both the top and bottom lines.

Overnight, Asian markets were mostly green, although China remained closed for Lunar New Year.  India (+1.11%) led the gainers while South Korea (-0.77%) paced the losses.  In Europe, we see a similar story taking shape with 12 of the 14 bourses in the green at midday.  The CAC (+0.68%), DAX (+0.29%), and FTSE (+0.35%) lead the region higher in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a move higher to start the morning (ahead of data).  The DIA implies a +0.34% open, the SPY is implying a +0.47% open, and the QQQ implies a +0.79% open at this hour.  At the same time, 110-Year Bond Yields are back up to 4.527% and Oil (WTI) is just on the red side of flat at $72.63 per barrel in early trading.

The major economic news scheduled for Friday includes December PCE Price Index, December PCE Price Index, and December Personal Spending, and Q4 Employment Cost Index (all at 8:30 a.m.), and Chicago PMI (9:45 a.m.).  The major earnings reports scheduled for before the open include ABBV, AON, ARCB, ALV, BSAC, BAH, BR, BEPC, BEP, CHTR, CVX, CHD, CL, ETN, XOM, BEN, GNTX, IMO, JHG, LYB, NVS, OMF, PSX, RVTY, VSTS, and GWW.  Then after the close, there are no reports scheduled. 

So far this morning, ABBV, ARCB, BSAC, BAH, BR, BEP, CHTR, CHD, NVS, OMF, and PSX all reported beats on both the revenue and earnings lines.  Meanwhile, AON, ALV, CL, ETN, XOM, LYB, RVTY, and VSTS missed on revenue while beating on earnings. On the other side, CVX beat on revenue but missed on earnings.    

With that background, markets look bullish ahead of the PCE data.  All three major index ETFs gapped higher to open the premarket and all three have printed white-body candles since that point.  With that said, all three are above their T-line (8ema).  So, the short-term trend is bullish.  The mid-term downtrend remains a mess with only DIA showing a definitive trend (bullish).  In terms of extension, none of the major index ETFs are extended but DIA is starting to get to that point.  Meanwhile, T2122 is back in the middle of its overbought territory.  So, both sides have room to work today if they can find momentum.  However, the Bears have a little more material to work with Friday.  In terms of the 10 Big Dogs, nine of the 10 are in the green again with AAPL (+4.05%) way out in front leading the gains.  On the other side, NVDA (-1.31%) lags far behind the other big dogs.  As far as liquidity goes NVDA leads the way, having traded almost 1.5 times more than AAPL on a VERY low dollar-volume premarket session.  Do not forget it is Friday and month-end.  So, prepare your account for the weekend and remember to pay yourself.

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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