On Monday, markets gave us a modestly bearish start. SPY opened down 0.14%, DIA opened 0.14% lower, and QQQ opened down 0.18%. From there, all three major index ETFs slowly meandered modestly bullishly the rest of the day. (With that said, DIA was much more volatile with a wave lower before really starting is modest rally.) This action gave us white-bodied candles in all three with SPY that could certainly be seen as Bullish Engulfing signals if you were to squint. DIA retested its T-line (8ema) with the opening gap, but passed the test closing back above. SPY and QQQ both closed at new all-time high closes (although neither of them took out Friday’s all-time intraday high). It is also worth noting that if you draw it right (top across 3/28 and 5/23 candles), you could say SPY is right at the top edge of an ascending wedge. This all took place on well below-average volume in all three major index ETFs.
On the day, seven of the 10 sectors were in the green with Energy (+1.36%) and then Utilities (+1.01%) well out front leading the market higher. Meanwhile, Communication Services (-0.77%) was by far the laggard sector. At the same time, SPY gained 0.31%, DIA gained 0.21%, and QQQ gained 0.40%. VXX was just on the red side of flat, closing at a very low 11.11 and T2122 climbed up out of its oversold territory, to close at 27.01. On the bond front, 10-year bond yields rose to reach 4.467% and Oil (WTI) spiked 3.12% to close at $77.89 per barrel. So, Monday was basically a drifting day, where traders were probably biding time until the CPI and Fed announcements on Wednesday. We opened lower, following Europe (which was perhaps rattled by the gains of far-right parties across the EU and the snap elections called in France). From there, prices really just drifted slowly upward the rest of the day.
The only major economic news scheduled for Monday was the New York Fed 1-Year Consumer Inflation Expectations survey results. This came in a tick lower than the May reading at 3.2% (compared to May’s 3.3% expectation). At the same time, the survey found that the three-year inflation expectation remained flat at 2.8%. However, on a 5-year outlook the survey saw inflation expectations rise to 3% from April’s 2.8% projection.
In stock news, on Monday, VSTO rejected a takeover bid from MNC Capital (the offer was $39.50 per share). The VSTO board said the MNC offer would not be superior to the deal to sell its sporting goods division to a Czechoslovakian group for $1.96 billion. (Separately, VSTO also said it had rejected a $2 billion offer from KNIT.) At the same time, activist investor Elliott Investment Mgmt. announced it had taken a $2 billion position in LUV with intentions of ousting the current CEO and other leadership. Later, MS made analyst news when it lowered AMD to hold while simultaneously starting new coverage of AVGO and saying Broadcom is “the strongest AI play.” (AMD lost 4.49% while AVGO gained 2.41% on the day.) At the same time, the UAW announced a new tentative deal had been reached with “Ultium Cells” (a joint venture between GM and Korean giant LG). Later, ROG signed multi-year content licensing deals with WBD and CMCSA’s NBS Universal unit. At the same time, Elon Musk, in his capacity as CEO of X, announced he would ban AAPL devices from the service if AAPL integrates OpenAI at an OS level. (This came after AAPL announced that OpenAI’s ChatGPT was coming to its Siri.) Later, an Israeli financial news website reported that INTC is halting its $25 billion plant expansion in Israel. After the close, Reuters reported that APOS and KD are in talks to make a joint buyout bid for DXC. The article said they were targeting $22 to $25 per share for the offer. (DXC spiked 11.48% on the day, somebody knew something, closing at $18.45/share.)
In stock legal and governmental news, on Monday, the US Supreme Court agreed to hear an appeal seeking to dismiss a lawsuit against META related to its misleading investors about the Cambridge Analytica data-harvesting scandal. At the same time, the Supreme Court refused to hear KR’s appeal seeking to block GRUB from using the fork and knife logo, claiming it is too similar to a KR house brand logo. Meanwhile, the NHTSA announced that STLA is recalling 212k 2022 model SUV and pickup trucks over a software malfunction that may cause the electronic stability control systems to fail. Later, the CA Attorney General sued the oil major firms (XOM, CVX, SHEL, BP, and COP), seeking to force those firms to give up the profits they made while also simultaneously deceiving the public about their contributing to climate change. (This suit is seeking to be similar to the one that crushed the Tobacco industry decades ago.) After the close, the full 11-judge panel of the US 9th Circuit Court of Appeals ruled against UBER (who lost the original case, but won a 3-judge sub-set of the Appeals Court) on their case seeking to challenge a CA law that may force companies to treat drivers as employees rather than independent contractors. Also after the close, the FDA Advisory Panel voted by 11-0 to recommend that LLY’s Alzheimer drug donanemab to receive full-use approval later this year. (If approved, it would be the second Alzheimer’s drug approved to serve the 6 million US patients, along with BIIB’s Leqembi.
Overnight, Asian markets were mixed but leaned toward the red side with eight of the 12 exchanges in the region below water. Australia (-1.33%) and Hong Kong (-1.04% were by far the biggest movers, leading the region lower. In Europe, we see red across the board at midday. The CAC (-1.09%), DAX (-0.73%), and FTSE (-0.90%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day. The DIA implies a -0.40% open, the SPY is implying a -0.34% open, and the QQQ implies a -0.35% open at this hour. At the same time, 10-year bond yields are down a bit to 4.439% and Oil (WTI) is just on the red side of flat at $77.61 per barrel in early trading.
The major economic news scheduled for Tuesday is limited to EIA Short-Term Energy Outlook (noon) and API Weekly Crude Oil Stocks report (4:30 p.m.). Major earnings reports scheduled for before the open is limited to ASO. Then, after the close, CASY and ORCL report.
In economic news later this week, on Wednesday, May Core CPI, May CPI, EIA Weekly Crude Oil Inventories, NY Fed 1-Year Consumer Inflation Expectations, May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1st Year Interest Rate Projection, Q2 2nd Year Interest Rate Projection, Q2 3rd Year Interest Rate Projection, and Fed Chair Press Conference are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams. Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.
In terms of earnings reports later this week, on Wednesday, we hear from AVGO and PLAY. On Thursday, KFY, SIG, ADBE, and RH report. Finally, on Friday, there are no reports scheduled.
In miscellaneous news, ECB President Lagarde sought to tamp down expectations after last week’s first rate cut since 2019. She told a newspaper interview that the Central Bank may wait several meetings between rate cuts, saying that the downward path may be “non-linear.” Elsewhere, Reuters reported Monday evening that an independent federal monitor has launched an investigation of UAW union President Fain over allegations of retaliation against other union leaders. (Among the allegations is the claim of former UAW Secretary/Treasurer that she faced retaliation for refusing to authorize certain expenditures for Fain’s office.)
In other news, Bloomberg reported the results of their survey of public records of pharmacy chains. The survey found that CVS had three times more safety recalls than either WBA or WMT over the past decade. Among CVS’s incidents were recalling house branded child pain and fever medication for being made with contaminated water, children’s drugs that were made with adult potencies, and baby nasal sprays that were recalled because they were made on machines used to produce pesticides.
With that background, the bears are in control of the premarket at this point. All three major index ETFs opened the early session a bit lower and have followed through with black-body candles up to this point. DIA has recrossed below its T-line (8ema) in the premarket this morning. With that said, again, only the DIA is below its T-line as the other two, broader, index ETFs remain above their own. So, the Bulls have the upper hand in the short-term but certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema) and the T2122 indicator is back in the lower end of its mid-range. The bottom line is that the market has room to run in either direction but the Bulls have just a little more slack to play with here. With regard to those 10 big dog tickers, seven of the 10 are in the red. AMD (+0.24%) leads the few gainers while their rival INTC (-0.58%) leads the more numerous losers. Don’t be surprised if we drift or vacillate ahead of Wednesday’s CPI and Fed news.
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.
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
Comments are closed.