Markets started off flat Thursday with DIA having the biggest move at the open.  SPY and QQQ both opened less than 0.01% lower while DIA “gapped” down 0.10%. From there, both SPY and QQQ meandered sideways, re-crossing their opening level several times.  Then about 1 p.m. both started a slide to the downside that lasted the rest of the day.  For its part, DIA rallied after the open, reaching the high if the say at 10 a.m., and then starting a long, slow selloff that lasted the entire day.  This action gave us black-bodied candles with upper wicks in all three major index ETFs.  SPY and QQQ printed Bearish Harami candles, while DIA just gave us a big black candle.  All three remain above their T-line (and did not ever retest that average on the day).  This all happened on well below-average volume.

On the day, five of the 10 of the sectors were in the red and the other five in the green as Healthcare (-1.03%) was the biggest mover and led the way lower.  On the other side, Consumer Defensive (+0.56%) led a far more tightly-packed group of positive sectors.  At the same time, SPY lost 0.16%, DIA lost 0.50%, and QQQ lost 0.28%. VXX rose just a tad to close at 42.42 and T2122 dropped back right into the center of its mid-range to close at 53.44.  Meanwhile, 10-Year bond yields fell just slightly to 4.18% while Oil (WTI) was just on the red side of flat, closing at $68.52 per barrel. So, Thursday was basically a day of consolidation.  That was the first such day in a while for SPY and QQQ, but a continuation of a consolidation process that has lasted 1.5 weeks in DIA. 

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 224k (compared to a forecast and previous week’s value of 215k). In terms of ongoing claims, Weekly Continuing Jobless Claims were well down at 1,871k (versus a forecast of 1,910k and the prior week’s reading of 1,896k).  At the same time, Oct. Imports were down to $339.60 billion (compared to the September $352.30 billion number).  Meanwhile, Oct. Exports were only down a touch to $265.70 billion (versus September’s $267.90 billion).  Together, this gave us an Oct. Trade Balance that was down to $73.80 billion (compared to a forecasted $75.70 billion and September’s $83.80 billion reading).  Later, after the close, the Fed Balance Sheet showed a $9 billion decrease for the week, falling from $6.905 trillion to $6.896 trillion.

In Fed news, on Thursday, there were no Fed speakers of note. However, the New York Fed released a study that shows tariffs during Trump’s first term hurt stock values and reduced business sales, profits, and employment.  The report said, “most firms suffered large valuation losses on tariff-announcement days. We also document that these financial losses translated into future reductions in profits, employment, sales, and labor productivity.”  The report continued, “because global supply chains are complex and foreign countries retaliate … Our results show that firms experienced large losses in expected cash flows and real outcomes. These losses were broad-based, with firms exposed to China experiencing the largest losses.”  (The report makes no comment on Trump’s newly threatened 25% tariffs on Mexico and Canada or 10% tariff on Chinese goods.  It also makes no mention of the tariffs in the last four years of the Biden Administration.)

After the close, DOCU, HPE, LULU, WOOF, ULTA, VEEV, and VSCO all reported beats on both the revenue and earnings lines.  Meanwhile, COO missed on revenue while beating on earnings.

Overnight, Asian markets leaned toward the red side with eight of the 12 exchanges below break-even.  That said, China had a good day with Hong Kong (+1.56%), Shenzhen (+1.48%) and Shanghai (+1.05%) making the biggest moves in the region.  Japan (-0.77%), Singapore (-0.69%) and New Zealand (-0.68%) paced the losses.  In Europe, we see a mixed picture taking shape at midday with seven of the 14 bourses above break-even.  The CAC (+1.32%), DAX (+0.16%), and FTSE (-0.12%) lead the region in mixed early afternoon trade.  In the US, as of 7:15 a.m., Futures are pointing toward an open just on the red side of flat again.  The DIA implies a -0.08% open, the SPY is implying a =0.09% open, and the QQQ implies a -0.03% open at this hour.  At the same time, 10-Year Bond yields are down slightly to 4.178% and Oil (WTI) is off 1.04% to $67.59 per barrel in early trading.

The major economic news scheduled for Friday we get Nov. Average Hourly Earnings, Nov. Nonfarm Payrolls, Nov. Private Nonfarm Payrolls, Nov. Participation Rate, Nov. Unemployment Rate, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, October Consumer Credit.  We also hear from Fed members Bowman and Daily.  The major earnings reports scheduled for before the open are limited to DOOO and GCO.  Then, after the close, there are no major reports scheduled.

With that background, market is again undecided early in the premarket session.  All three major index ETFs opened close to flat and have printed very small candles with wicks on both ends up to this point of the early session. Keep in mind that the SPY, DIA, and QQQ all sit very near all-time highs.  All three are also still above their T-line (8ema).  So, the short-term trend is now bullish.  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, yesterday’s consolidation gave the T-line a chance to make up ground on the QQQ.  So, none of the big three are too far stretched from their 8ema.  The T2122 indicator ais also back in the very center of its mid-range. So, both sides of the market have room to move today if they can find momentum.  In terms of the 10 Big Dogs, five of the 10 are in green numbers at this point of the morning while the other five show red.  GOOGL (-0.16%) is leading a tightly packed group in modest losses.  On the other side, TSLA (+1.34%) is way, way out front (by a full percent) pacing the gainers.  TLSA is also leading in terms of dollar-volume traded, sitting at a about 2.5 times as much traded than NVDA (-0.12%), which itself has traded almost 4 times as much as the next one of the big dogs.  Finally, remember its Friday.  Prepare your account for the weekend news cycles and don’t forget to take profits.  (It is payday after all.) 

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

Wednesday was pretty much all about the open.  SPY gapped up 0.30%, DIA gapped up 0.45%, and QQQ gapped up 0.66%.  From there, all three major index ETFs did some form of grinding sideways until 2 p.m.  At that point, all three started a steady, but modest, rally that ran into the close.  This action gave us gap-up, large-body, white body candles in all three major index ETFs.  All three printed new all-time highs and closed at new all-time high closes.  This happened on below-average volume in SPY and QQQ as well as average volume in the DIA.

On the day, six of the 10 of the sectors were in the red again and the other four in the green as Energy (-1.90%) was way, way out in front leading the majority of sectors to the downside.  On the other side, Technology (+1.67%) far ahead of any other sector.   Meanwhile, SPY gained 0.62%, DIA lost 0.68%, and QQQ gained 1.24%. VXX gained half a percent to close at 42.33 and T2122 dropped back a little more, but remains in the top part of the mid-range to close at 64.03. At the same time, 10-Year bond yields fell to 4.184% while Oil (WTI) dropped 1.73%, closing at $68.73 per barrel. What we saw Wednesday saw gaps higher across the market.  That was followed by a sideways grind most of the day and then a modest rally into the close. All three major index ETFs printed new all-time highs and closed at new all-time high closes. So, the Bulls were clearly in control…even if most of the gain came on the opening gap higher.

The major economic news scheduled Wednesday included November ADP Nonfarm Employment Change, which came in with lower growth than expected at +146k (versus a +166k forecast and October’s +184k reading).  Later, Nov. S&P Global Services PMI also came in light at 56.1 (compared to a 57.0 forecast, but up from October’s 55.0 value).  When combined with Tuesday’s Nov. S&P Global Mfg. PMI this gave us a Nov. S&P Global Composite PMI of 54.9 (versus a 55.3 forecast, but up from October’s 54.1 number).  Later, Oct. Factory Orders were lighter than predicted at +0.2% (compared to a +0.3% forecast but up significantly from September’s -0.2% reading).  At the same time, Nov. ISM Non-Mfg. Employment Index was down to 51.5 (versus a 53.0 forecast and October value).  Meanwhile, the Nov. ISM Non-Mfg. PMI itself was also low at 52.1 (compared to a 55.5 forecast and October’s 56.0 number).  Later, EIA Weekly Crude Oil Inventories showed a much bigger drawdown than anticipated at -5.073 million barrels (versus a forecasted draw of 1.600 million barrels and the previous week’s -1.844 million barrels).

In Fed news, on Wednesday, St. Louis Fed President Musalem told Bloomberg that he expected “additional easing of moderately restrictive policy toward neutral will be appropriate over time.” However, he hedged his bets on how much or how fast, saying, “Along this baseline path, it seems important to maintain policy optionality, and the time may be approaching to consider slowing the pace of interest rate reductions, or pausing, to carefully assess the current economic environment, incoming information and evolving outlook.”  Later, Fed Chair Powell told an interview, “We can afford to be a little more cautious as we as we try to find neutral rate.”  Powell continued, “The economy is stronger than we thought it was going to be in September … the labor market is is better, and inflation is coming a little higher.”  After his speech, Powell was asked about being undermined by a “Shadow Fed Chairman” (an idea broached by Trump’s nominated Treasury Sec.).  Powell said, “I don’t think that’s on the table at all … There’s a set of institutional relationships between the Fed and every administration … I fully expect that we’ll have the same general kinds of relationships (with Trump Admin. officials).  There’s got to be trust and mutual respect and acknowledgement of the different authorities and boundaries that we have.”

After the close, FIVE, PVH, and SNPS reported beats on both revenue and earnings lines.  Meanwhile, AEO missed on revenue while beating on earnings.  On the other side, GEF beat on revenue while missing on earnings.

Overnight, Asian markets were mostly green with just three of the 12 exchanges below the break-even level.  India (+0.98%) paced the gains while Hong Kong (-0.92%) and South Korea (-0.90%) were by far the biggest losers.  In Europe, we see a similar picture taking shape at midday with just four of 14 bourses in the red.  The CAC (+0.12%), DAX (+0.31%), and FTSE (-0.08%) lead the region modestly higher in early afternoon trade.  In the US, as of 7:40 a.m., Futures are pointing toward a start just on the red side of flat.  The DIA implies a -0.02% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.06% open at this hour.  At the same time, 10-Year Bond yields are back up a touch to 4.217% and Oil (WTI) is back up a quarter-percent to $68.67 (after an overnight slump) in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Oct. Imports, Oct. Exports, Oct. Trade Balance (all at 8:30 a.m.), and Fed Balance Sheet (4:30 p.m.). The major earnings reports scheduled for before the open are limited to BMO, BF.A, CAL, CM, CSIQ, DG, GMS, KFY, KR, PDCO, SAIC, SIG, and TD.  Then, after the close, COO, DOCU, HPE, LULU, WOOF, ULTA, VEEV, and VSCO report.

In economic news later this week, on Friday, we get, Nov. Average Hourly Earnings, Nov. Nonfarm Payrolls, Nov. Private Nonfarm Payrolls, Nov. Participation Rate, Nov. Unemployment Rate, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, October Consumer Credit.  We also hear from Fed members Bowman and Daily.

In terms of earnings reports later this week, on Friday, we hear from DOOO and GCO.

So far this morning, CM, KFY, and SAIC reported beats on both the revenue and earnings lines.  Meanwhile, CSIQ missed on revenue while beating on earnings. On the other side, BMO, DG, GMS, PDCO, and TD all beat on revenue while missing on the earnings line.  However, CAL and SIG missed on both the top and bottom lines.

With that background, markets seem undecided early in the premarket.  All three major index ETFs are just on the red side of flat.  QQQ started the early session with a gap down, but has rallied to print a white-bodied candle to get nearly back to even. Keep in mind that the SPY, DIA, and QQQ sit at all-time highs.  All three are above their T-line (8ema).  So, the short-term trend is now bullish.  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, only QQQ is now stretched above its T-line, but SPY and DIA are still not extended. The T2122 indicator remains in the top half of its mid-range. So, both sides of the market have room to move, but the Bears may have more slack to work with today. In terms of the 10 Big Dogs, nine of the 10 are in green numbers at this point of the morning again, albeit on modest moves. GOOGL (+0.44%) is leading the way higher while AMD (-0.22%) is the only big dog in the red.  In a return to post-election norm, TLSA (+0.39%) is leading in terms of dollar-volume traded, sitting at a little less than 1.5 times as much traded than NVDA (+0.10%), which itself has traded almost 9 times as much as the next one of the big dogs.  

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

Tuesday saw a modest divergence at the opening bell.  SPY opened 0.04% lower, DIA opened 0.10% higher, and QQQ gapped down 0.27%.  From there, SPY and QQQ just meandered sideways in a tight channel before making a modest and slow afternoon rally.  QQQ printed a new all-time high and new all-time high close.  SPY printed a new all-time high close.  At the same time, after its lower open, DIA followed-through to the downside until 11:45 a.m.  Then it rallied almost back to the prior close level before meandering sideways the rest of the day. This action gave us Spinning Top candles in the SPY and DIA as well as a large-body white candle.  SPY was a white-body Spinning Top and DIA was a black-body Spinning Top. This all happened on well below-average volume in all three major index ETFs.

On the day, six of the 10 of the sectors were in the red again and the other four in the green as Utilities (-0.78%) was out in front pacing the losses and leading the market to the downside.  On the other side, Communications Services (+0.60%) led the gainers.   Meanwhile, SPY gained 0.05%, DIA lost 0.19%, and QQQ gained 0.31%. VXX fell half a percent to close at 42.07 and T2122 dropped back a little more, but remains in the top part of the mid-range to close at 69.79. At the same time, 10-Year bond yields rose a bit to 4.226% while Oil (WTI) popped 2.76%, closing at $69.98 per barrel. So, what we saw Tuesday was basically consolidation by the SPY and DIA (even though SPY did print a new all-time high close).  However, QQQ continued its rally despite a gap down to start the day.  META (+3.51%), AMZN (+1.30%), AAPL (+1.28%), and NVDA (+1.18%) led that rally in the QQQ.

The major economic news scheduled for Tuesday was limited to October JOLTs which came in higher than expected at 7.744 million (compared to a 7.510 million forecast and a September 7.372 million reading).  Then, after the close, the API Weekly Crude Oil Stock Report showed an unexpected inventory build of 1.232 million barrels (versus a forecasted 2.060-million-barrel drawdown and the prior week’s 5.935-million-barrel drawdown).

In Fed news, on Tuesday, FOMC members steered away from providing rate guidance ahead of December’s meeting.  San Francisco Fed President Daly told Fox Business “I think we need to have an open mind here.”  Later, Chicago Fed President Goolsbee said, “Over the next year it feels to me like rates come down a fair amount from where they are now, but we meet every six weeks because the conditions change.”  For her part, Fed Governor Kugler simply gave backward-looking comments to a Detroit event, saying, “I view the economy as being in a good position after making significant progress in recent years toward our dual-mandate goals of maximum employment and stable prices.” 

After the close, PSTG, OKTA, and MRVL reported beats on both the revenue and earnings lines.  Meanwhile, CRM beat on revenue while missing on earnings.

Overnight, Asian markets were mixed with six exchanges in the red, five in the green, and one unchanged.  South Korea (-1.44%) paced the losses, as expected given the political turmoil of the last 24 hours in that country.  Meanwhile, Taiwan (+0.99%) led the gainers.  In Europe, the bourses are mostly green at midday with four in the red and 10 in the green.  The CAC (+0.52%), DAX (+1.05%, and FTSE (-0.23%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.42% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.64% open at this hour.  At the same time, 10-Year Bond yields are up to 4.261% and Oil (WTI) is just on the green side of flat at $70.00 per barrel in early trading.

The major economic news scheduled for Wednesday includes Nov. ADP Nonfarm Employment Change, Nov. S&P Global Services PMI, Nov. S&P Global Composite PMI, Oct. Factory Orders, Nov. ISM Non-Mfg. Employment, Nov. ISM Non-Mfg. PMI, EIA Crude Oil Inventories, and Fed Beige Book.  We also hear from Fed Chair Powell. The major earnings reports scheduled for before the open are limited to CPB, CHWY, CBRL, DLTR, FL, HRL, RY, and THO.  Then, after the close, AEO, FIVE, GEF, PVH, and SNPS.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Oct. Imports, Oct. Exports, Oct. Trade Balance, and Fed Balance Sheet.  Finally, on Friday, we get, Nov. Average Hourly Earnings, Nov. Nonfarm Payrolls, Nov. Private Nonfarm Payrolls, Nov. Participation Rate, Nov. Unemployment Rate, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, October Consumer Credit.  We also hear from Fed members Bowman and Daily.

In terms of earnings reports later this week, on Thursday, BMO, BF.A, CAL, CM, CSIQ, DG, GMS, KFY, KR, PDCO, SAIC, SIG, TD, COO, DOCU, HPE, LULU, WOOF, ULTA, VEEV, and VSCO report.  Finally, on Friday, we hear from DOOO and GCO.

So far this morning, CPB, DLTR, and RY reported beats on both the revenue and earnings lines. Meanwhile, CHWY beat on revenue while missing on earnings. However, FL, HRL, and THO missed on both the top and bottom lines.

With that background, markets seem bullish early in the day.  All three major index ETFs gapped up a bit to start the premarket and all three have printed small white-bodied candles since that point.  However, it is worth noting all three have backed off just slightly from their absolute high of the early session.  In addition, keep in mind that the SPY and QQQ sit at all-time highs while DIA is less than half a percent below its own all-time high.  All three are above their T-line (8ema).  So, the short-term trend is now bullish.  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, QQQ is now stretched above its T-line, but SPY and DIA are still not too far extended. The T2122 indicator is now back in the top half of its mid-range. So, either side has room to move, but the Bears may have more slack to work with today. In terms of the 10 Big Dogs, nine of the 10 are in green numbers at this point of the early morning session. NVDA (+1.16%) is leading the way higher while META (-0.27%) is the only big dog in the red and by far the laggard of the group.  In a return to pre-election norm, NVDA is leading in terms of dollar-volume traded, sitting at a little less than 1.5 times as much traded than TSLA, which itself has traded almost 4 times as much as the next one of the big dogs.  

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

Markets diverged again at the start of the day on Monday.  SPY opened 0.09% higher, DIA opened 0.11% higher, and QQQ gapped up 0.26%.  From there, SPY wandered to the side with a very slight bullish trend the rest of the day.  At the same time, after the open, QQQ sold off sharply for an hour before meandering sideways the rest of the day.  Finally, QQQ rallied sharply for and hour and the less strongly until 12:25 p.m.  Then it drifted modestly lower until 2:30 p.m. when it began a modest rally that lasted into the close.  This action gave us divergent candles among those big three major index ETFs as well.  QQQ printed a dap up big white candle that printed a new all-time high and new all-time high close.  It is also at the breakout of a J-hook pattern.  For its part, SPY printed a gap-up, white-bodied Spinning Top candle that was also printed a new all-time high and new all-time high close.  However, DIA printed a large-body, black candle that only missed being a Dark Cloud Cover by virtue of Friday’s upper wick. 

On the day, six of the 10 of the sectors were in the red and the other four in the green as Technology (+1.21%) was far out in front leading the market higher while Utilities (-1.55%) was lagging far behind.  Meanwhile, SPY gained 0.18%, DIA lost 0.30%, and QQQ gained 1.09%. VXX fell slightly again to close at 42.30 and T2122 dropped back a little further out of its overbought territory into the top part of the mid-range to close at 71.03.  At the same time, 10-Year bond yields fell a bit to 4.192% while Oil (WTI) was flat, closing at $68.08 per barrel. So, Tuesday was a day where SPY and QQQ gapped up, but then diverged with SPY melting higher.  At the same time, DIA gapped down and sold off before reversing to rally more strongly the rest of the day.  This happened on well below-average volume in all three major index ETFs.

The major economic news scheduled for Monday was limited to November S&P Global Mfg. PMI, which came in a bit higher than expected at 49.7 (compared to a 48.8 forecast and an October 48.5 reading).  Later, Oct. Construction Spending was much higher than expected at +0.4% (versus a +0.2% forecast and a September value of +0.1%).  At the same time, Nov. ISM Mfg. Employment was up at 48.1 (compared to the October 44.4 reading).  Meanwhile, Nov. ISM Mfg. PMI was up at 48.4 (versus a 47.7 forecast and a previous reading of 46.5).  At the same time, Nov. ISM Mfg. Prices were down sharply to 50.3 (compared to a 55.2 forecast and October’s 54.8 number).

In Fed news, on Monday, Atlanta Fed President Bostic said he has an open mind on whether the FOMC should cut rates at the December meeting.  Bostic said, “There is a lot of uncertainty. … I am not going into this meeting with a sense that it (a rate cut) is preordained. We have important data points that are coming in, including information to be released Friday on November job growth.”  However, he went on to indicate that his starting point is leaning toward another cut when he said, “My base case on inflation remains that we are on track to reach the 2% objective…weighing the totality of the data, I do not view the recent bumpiness as a sign that progress toward price stability has completely stalled.” (And if inflation is still falling, his previous statements favor a move to solve the other mandate of full employment.) 

Later, Fed Governor Waller said he was leaning toward another cut in December.  Waller said, “At present I lean toward supporting a cut to the policy rate at our December meeting. But that decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation.”  Finally, later on, New York Fed President Williams said that the FOMC is likely to cut rates, without giving a timeline.  Williams said, “Monetary policy remains in restrictive territory to support the sustainable return of inflation to our 2 percent goal,” and “I expect it will be appropriate to continue to move to a more neutral policy setting over time.”  Williams went on to say the economy is in “a good place” and he sees inflation continuing to ebb toward 2% and the labor market remaining “strong.”

After the close, ZS reported significant beats on both the revenue and earnings lines.

Overnight, Asian markets were nearly green across the board with the lone exception of Shenzhen (-0.40%).  Japan (+1.91%), South Korea (+1.86%), and Taiwan (+1.28%) paced the broad and strong gains in the region.  In Europe, we see the same picture taking shape with only Portugal (-0.14%) in the red with 13 green bourses at midday.  The CAC (+0.29%), DAX (+0.14%), and FTSE (+0.74%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a flat start to the day.  The DIA implies a -0.02% open, the SPY is implying a +0.02% open, and QQQ implies a -0.05% open at this hour.  At the same time, 10-Year bond yields are back up to 4.213% and Oil (WTI) is up 1.37% to $69.03 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to October JOLTs (10 a.m.) and API Weekly Crude Oil Stock Report (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to BNS, CNM, and DCI.  Then, after the close, MRVL, OKTA, PSTG, and CRM.

In economic news later this week, on Wednesday, we get Nov. ADP Nonfarm Employment Change, Nov. S&P Global Services PMI, Nov. S&P Global Composite PMI, Oct. Factory Orders, Nov. ISM Non-Mfg. Employment, Nov. ISM Non-Mfg. PMI, EIA Crude Oil Inventories, and Fed Beige Book.  We also hear from Fed Chair Powell. Then Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Oct. Imports, Oct. Exports, Oct. Trade Balance, and Fed Balance Sheet.  Finally, on Friday, we get, Nov. Average Hourly Earnings, Nov. Nonfarm Payrolls, Nov. Private Nonfarm Payrolls, Nov. Participation Rate, Nov. Unemployment Rate, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, October Consumer Credit.  We also hear from Fed members Bowman and Daily.

In terms of earnings reports later this week, on Wednesday, we hear from CPB, CHWY, CBRL, DLTR, FL, HRL, RY, THO, AEO, FIVE, GEF, PVH, and SNPS.  Then Thursday, BMO, BF.A, CAL, CM, CSIQ, DG, GMS, KFY, KR, PDCO, SAIC, SIG, TD, COO, DOCU, HPE, LULU, WOOF, ULTA, VEEV, and VSCO report.  Finally, on Friday, we hear from DOOO and GCO.

So far this morning, DCI reported beats on both the revenue and earnings lines.  At the same time, BNS beat on revenue while missing on earnings.

With that background, markets seem basically flat early.  All three major index ETFs opened the premarket about where they closed Monday and have printed indecisive, tiny candles since that point.  It is worth noting that SPY and QQQ sit at all-time highs while DIA is less than half a percent below its own all-time high.  All three are above their T-line (8ema).  So, the short-term trend is now bullish.  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, QQQ is the furthest above its T-line, but none of the three are too far extended. The T2122 indicator is now back in the top end of its mid-range. So, either side has room to move, but the Bears may have a little more slack to work with today. In terms of the 10 Big Dogs, six of the 10 are in green numbers at this point of the early morning session. AMD (+1.18%) is leading the way higher while TSLA (-0.74%) is by far the main laggard of the group.  In a post-election norm, TSLA is leading in terms of dollar-volume traded, sitting at 2 times as much traded than NVDA, which itself has traded almost 10 times as much as the next one of the big dogs.  

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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