Markets opened lower on Tuesday.  SPY gapped down 0.39%, DIA gapped down 0.31%, and QQQ gapped down 0.62%.  From there, all three major index ETFs rallied to recross their opening gap shortly before 11 a.m.  At that point, DIA ground sideways above the gap, SPY bobbed sideways along its opening level, and QQQ sold off back into the gap and then meandered sideways in that area.  All three kept those trends up the rest of the day.  This action gave us white-bodied candles in all three major index ETFs.  SPY gapped below and then crossed back above its T-line (8ema) during the day on a white candle with only a tiny upper wick.  DIA also gapped down and the printed a Bull Engulfing candle that crossed above its T-line as well.  Finally, QQQ printed a white Inverted Hammer type candle that retested its T-line (and passed) from above.  This happened on well-below-average volume in SPY, DIA, and QQQ.

On the day, five of the 10 of the sectors were in the green, led by Communications Service (+1.00%).  On the other side, the five red sectors were led lower by Consumer Cyclicals (-0.61).  At the same time, SPY gained 0.08%, DIA gained 0.32%, and QQQ lost 0.24%.  Meanwhile VXX was just on the green side of flat, closing at 42.90 while T2122 dropped slightly, but remains in the top half of its mid-range, closing at 57.30.  On the bond side, 10-Year Bond yields rose to close at 4.501% and Oil (WTI) popped 2.07%, closing at $72.47 per barrel.  So, Tuesday Saw markets essentially undecided. They major index ETFs all gapped down and then gained that ground back before doing some version of a wobble sideways around the prior close level.   was a gap-up and then diverging sentiment day on low volume.  This may indicate traders waiting on Powell’s testimony, Trump Tariff details, or other news.     

The only major economic news on Tuesday was limited to the API Weekly Crude Stocks report, which showed a MUCH larger-than-expected inventory increase of +9.043 million barrels (compared to a +2.800-million-barrel forecast and the prior week’s +5.025-million-barrel build).

In Fed news, on Tuesday, Cleveland Fed President Hammack told a KY audience that the FOMC needs to hold rates flat.  She said, “Given current economic conditions, it will likely be appropriate to hold the funds rate steady for some time.” Hammack went on to say, “A patient approach will allow us to assess the health of the labor market, whether inflation is returning to 2% on a sustained basis, and how the economy is performing in the current rate environment.”  Later, NY Fed President Williams said, “Monetary policy is well positioned to achieve maximum employment and price stability.”  He continued, “The modestly restrictive stance of policy should support the return to 2 percent inflation while sustaining solid economic growth and labor market conditions.”   Finally, he added, “it’s important to note that the economic outlook remains highly uncertain, particularly around potential fiscal, trade (tariffs), immigration, and regulatory policies.” 

In other Fed news, during his semi-annual testimony before the Senate, Fed Chair Powell noted that the economy is “strong overall and has made significant progress toward the Fed’s dual goals over the past two years.”  He said “We are attentive to the risks on both sides of our mandate.”  During questioning. Powell said he did not think unelected, vetted, or cleared Elon Musk (or his “DOGE” team) have tried to access any Fed systems.  However, if this happens, Powell said he would report it to Congress. In other questions, Powell indicated there is no hurry to reduce interest rates fast given the strong economy, saying, “We know that reducing policy restraint too fast or too much could hinder progress on inflation.”  When asked, Powell said, “The standard case for free trade logically still makes sense … (But) it’s not the Fed’s job to make or comment on tariff policy…Our (job) is to try to react to it in a thoughtful, sensible way.”  Trying not to insult the new administration, he indicated there was uncertainty and said “tariffs, immigration, fiscal and regulatory policy…Those will all go into a mix and we (FOMC) will try to make sense of it.”

After the close, ALSN, AIG, AIZ, EW, ES, EXEL, GILD, LYFT, PBI, PRI, ST, and WELL all reported beats on both the revenue and earnings lines.  Meanwhile, CAR, BHF, MCY, and ZG all missed on revenue while beating on earnings. On the other side, DASH, ECG, IAC, and Z beat on revenue while missing on earnings.  However, ET missed on both the top and bottom line.

Overnight, Asian markets were mostly green with just two of the 12 exchanges below break-even.  Hong Kong (+2.64%), Shenzhen (+1.43%) and Thailand (+1.06%) led the region higher.  In Europe, we see a similar situation with just three of 14 bourses in the red as of midday.  The CAC (+0.06%), DAX (+0.32%), and FTSE (+0.01%) lead the region on volume in early afternoon trading. Meanwhile, in the US, Futures are pointing toward a mixed, basically flat start to the morning (ahead of CPI data).  DIA implies a a-0.16% open, the SPY is implying a -0.07% open, and QQQ implies a +0.10% open at this hour.  At the same time, 10-Year Bond Yields are up to 4.547% and Oil (WTI) is down 1.23% to $72.43 per barrel in early trading.

The major economic news scheduled for Wednesday includes January Core CPI and January CPI (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.) and the January Federal Budget Balance (4:30 p.m.)  Fed Chair Powell also testifies again at 10 a.m. and Fed members Bostic (noon) and Waller (5:05 p.m.) speak.  The major earnings reports scheduled for before the open include Wednesday, GOLD, BIIB, BAM, CHEF, CME, CNDT, CVS, DBD, D, EXC, GNRC, IPG, KHC, LAD, MLM, COOP, NI, QSR, R, SITE, SW, SAH, SPTN, TMHC, THC, VRT, WAB, and WAT.  Then after the close, ALB, AR, APP, CSCO, CPA, CRBG, CW, EIX, EQIX, FAF, GXO, HUBS, KGC, MTW, MGM, MKSI, MSA, NBR, PPC, QDEL, HOOD, ROL, RGLD, SCI, SLF, TTD, TSE, TROX, TYL, VTR, WCN, WFG, and WMB report. 

In economic news later this week, on Thursday, we get Weekly Initial jobless Claims, Weekly Continuing Jobless Claims, January Core PPI, January PPI, and the Fed’s Balance Sheet. Finally, on Friday, Jan. Core Retail Sales, Jan. Retail Sales, Jan. Export Price Index, Jan. Import Price Index, Jan. Industrial Production, Dec. Business Inventories, and Dec. Retail Inventories are reported.

In terms of earnings reports later this week, on Thursday, we hear from ALNY, ATUS, AEP, HOUS, AVNT, CBRE, CROX, DDOG, DE, DTE, DUK, GEHC, GPN, HBI, HRI, HTZ, HMC, HWM, H, IRM, KNF, LECO, TAP, MCO, DNOW, OGN, PBF, PAG, PCG, PHIN, PPL, SBH, SN, SONY, TU, TIXT, TRU, USFD, WEN, YETI, ZBRA, ZTS, AEM, AL, ABNB, AMAT, BIO, BFAM, CAE, COIN, DVA, DXCM, DLR, DKNG, GDDY, IR, LEG, MSI, PANW, RSG, ROKU, TWLO, and WYNN.  Finally, on Friday, AMCX, AEE, AXL, BGC, ENB, FTS, MGA, MRNA, NMRK, POR, TRP, and THS report.

So far this morning, BIIB, CHEF, CME, CVS, D, EXC, GNRC, LAD, COOP, NI, QSR, SAH, SPTN, SLVM, TMHC, VRT, and WAT have all reported beats on both the revenue and earnings lines.  Meanwhile, GOLD, KHC, MLM, R, and THC missed on revenue while beating on earnings.  On the other side, IPG and SITE beat on revenue while missing on earnings.  However, SW and WAB missed on both the top and bottom lines.

With that background, it looks like the market is undecided and basically flat early in the premarket.  All three major index ETFs have printed small-body candles with significant wicks and all three have retested their T-line (8ema) from above in the early session.  With that said, at the moment, all three remains above their T-line, meaning the short-term trend is slightly bullish this morning.  The mid-term downtrend (if you want to call it a trend) remains a choppy mess. At the same time, the long-term trend remains bullish.  In terms of extension, as mentioned, all three are back close to their T-line.  Meanwhile, T2122 sits in the upper half of its mid-range.  So, both sides have room to work today if they can find momentum. In terms of the Big Dogs, six of the 10 are in the green with INTC (+5.58%) far out in front leading the gainers higher.  On the other side, AMZN (-0.24%) is pacing the four laggards.  As far as liquidity goes, TSLA (+2.12%) is far out in front with NVDA (+0.38%) having traded only a tenth as much as TSLA.  (This is an extreme oddity for NVDA since TSLA volume is strong, but not abnormal.)

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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