On Thursday stocks gapped strongly higher at the open on positive earnings news.  However, they immediately faded that gap, retesting the previous close, only to reverse again at 10:30 am to start a strong rally that lasted until 3:30 pm when they sold back off a bit the last 30 minutes.  This left us with large white candles with large wicks at the bottom and smaller wicks at the top of the candle across all 3 major indices.  (Too much wick to call any of the 3 a Morning Star pattern.) On the day, SPY gained 2.52%, DIA gained 1.88%, and QQQ gained 3.55%.  However, that late-day selloff into the close gave back the T-line (8ema) in all three.  The VXX lost 4.26% to 26.04 and T2122 climbed back out of the oversold territory to 31.79.  10-year bond yields were off to 2.83% and Oil (WTI) spiked 3.24% to $105.32/barrel.

Prior to the open Thursday, Q1 GDP came in much worse than expected.  The number reported annualizes to a -1.4% GDP growth rate.  This compares to 2021 final GDP number (+6.9%) and the analysts consensus forecast for Q1 of +1.1% (annualized).  Of course, that bad number will be revised in the future.  Economists also said that this print was exaggerated by temporary problems such as the Q1 supply chain bottlenecks at West Coast ports. However, despite the “don’t panic” spin, it was clearly a bad print.  Nonetheless, markets ignored the bad news and gapped higher.  In other economic news, the Weekly Initial Jobless Claims came in just as forecast at 180k for the week.

SNAP Case Study | Actual Trade

After the close, AAPL, INTC, GILD, WDC, SYK, MHK, AJG, OLN, KLAC, CE, AVTR, FBHS, COOP, DLR, SWN, CSL, AEM, HUBG, TEX, ATR, BIO, ENSG, TEAM, BZH, SKYW, WIRE, CENX, SM, ACA, MERC, and MATW all reported beating estimates on both revenue and earnings.  Meanwhile, HIG, PFG, ATUS, CINF, LPLA, and WU missed on revenue while beating on earnings.  On the other side, AMZN, EMN, SSNC, TKC, ROKU, DXCM, and ULCC beat on revenue while missing on earnings.  However, RMD, DNZOY, LHX, HOOD, X, and CG missed on both lines. 

In other after-hours earnings-related news, AAPL significantly beat on both lines and increased its buyback program to $90 billion for 2022.  However, the company also warned of supply chain troubles (China Covid lockdowns) that could hurt Q2 numbers by between $4 billion and $8 billion.  Elsewhere, AMZN lowered guidance which raises the fear that consumers are starting to be tapped out by inflated prices. They also took a $7.6 billion loss on their RIVN stake.  In addition, INTC offered lower than expected guidance for Q2.  Finally, HOOD reported it has fewer active users and shrinking revenue due to smaller order flow that they could sell.  This is evidence that the meme stock craze and “day trading while working from home” have both decreased significantly over the last few months.

Bloomberg reported early this morning that Elon Musk sold another $4 Billion of TSLA stock in order to diversify and raise cash for his TWTR bid.  Most of that selling was done on Tuesday, the day TSLA stock fell 12%.  Bloomberg also say his pitch to bankers for funding for the TWTR takeover included job cuts, other cost-cutting, and implementing new ways to monetize the platform (recoup investment).  However, in a bid to prevent TSLA from sliding further, Musk has added a comment to the SEC filing, saying that no more sales of TSLA stock are planned.

Overnight, the Asian markets were mostly very strongly green.  Hong Kong (+4.01%), Shenzhen (+3.69%), and Shanghai (+2.41%) led the way higher. However, there were positive moves of over 1% in most exchanges.  Only India (-0.83%) showed a significant loss. In Europe, stocks are mostly modestly green at mid-day. The FTSE (+0.07%) and CAC (+0.09%) lag, but the DAX (+0.68%) is typical of the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap down and red start to the day.  The DIA implies a -0.44% open, the SPY is implying a -0.89% open, and the QQQ implies a -1.18% open at this hour.  10-year bond yields are trading up at 2.871% and Oil (WTI) is up over 1% to $106.61/barrel in early trading.

The major economic news scheduled for release on Friday includes Mar. PCE Price Index, Q1 Employment Cost, and Mar. Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), and Mich. Consumer Sentiment (10 am).  Major earnings reports scheduled for the day include ABBV, AB, AON, ARCB, AZN, BLMN, BMY, CRI, CBOE, CHTR, CVX, CL, XOM, HE, HON, IMO, LHX, LYB, MGA, NWL, NMRK, NVT, PSX, SYNH, TRP, and WY before the open.  There are no major earnings reports scheduled for after the close.

So far this morning, AZN, BMY, HON, LYB, PSX, WY, CX, and CRI have all reported beats on both revenue and earnings.  Meanwhile, CHTR, AON, SXT, and TAL all missed on revenue while beating on earnings.  On the other side, XOM, CVX, CL, and CNX have reported beating the estimates on revenue but missed on the bottom line.  Finally, CG, TIGO, and UOVEY reported misses on both lines.

The final flurry of earnings reports (in an earnings blizzard week) came last night and this morning. Again, the numbers were mostly positive, but not all were good and the devil is in the details. Also, the forward guidance (which has struck fear in many traders) has disappointed. With that said, remember that the trend is still very clearly bearish in the mid-term, despite a strong day Thursday. And whipsaw continues to be the norm recently. So, beware of a potential gap-and-reverse move after the open. Caution is still the smart play, especially with the weekend news cycle ahead. Don’t get caught chasing a gap only to be caught in a whipsaw you are not prepared to weather.

Remember that it’s Friday. So pay yourself. Also bear in mind that the first rule of making big money in the market is to not lose big money in the market. Staying hedged, nimble, and measured are good things…not bad. Also, don’t be stubborn, and protect yourself from yourself. Nobody is right all the time. So, if you’re wrong, just admit it and take your loss. Trading is not a sprint, it’s a marathon. Just focus on your process and enjoy yourself. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service