The bulls had a good day on Wednesday, reliving selling pressure despite the Durable Goods miss and the hawkish Fed minutes confirming more rate hikes are on the way. This morning we face a big round of retail earnings results and a reading on GDP and Jobless Claims. The NVDA miss could slightly dampen the bullish spirits in the Nasdaq but remember to respect overhead resistance levels in a market downtrend as the location of potential bear attacks. With a 3-day weekend approaching, it would not be odd to see traders reducing risk due to the prolonged weekend uncertainty.
While we slept, Asian markets closed mostly lower after the Bank of Korea announced its second straight rate hike. However, European markets hold modest gains across the board in a cautious morning session. With potential market-moving economic reports and a busy day of retail earnings, U.S. futures work to extend the relief rally pointing to a bullish open.
Economic Calendar
Earnings Calendar
We have about 50 companies listed on the Thursday earnings calendar, with less than 30 confirmed. Notable reports include DG, BABA, AEO, AMWD, ADSK, BIDU, BZUN, BRC, BKE, BURL, DLTR, FTCH, GPS, GCO, GLNG, IQ, JACK, M, MDT, RRGB, RY, TITN, TD, UTLA, VMW, WDAY & ZS.
News & Technicals’
Fed minutes released Wednesday indicated that officials are prepared to move ahead with multiple 50 basis points interest rate increases. In addition, the Federal Open Market Committee said the policy might have to move past “neutral” and into “restrictive” territory. Nevertheless, the minutes indicate that members are hopeful they can bring down inflation and are concerned about financial stability risks. In addition, global health concerns loomed over the World Economic Forum once again this year, but business leaders say they are not worried about a recent monkeypox outbreak. “Is it a Covid-style risk? No, I don’t believe it is,” Jeremy Farrar, director of global health charity Wellcome, told CNBC. As of Wednesday, at least 237 confirmed and suspected cases of the disease have been reported globally — double the number recorded at the start of the conference Monday. In a filing Wednesday, Elon Musk noted that his personal financial commitment to the Twitter deal is now $33.5 billion. Musk reiterated his commitment to completing the $44 billion deal and is working on additional financing. Apple is raising pay for corporate and retail workers in response to market conditions, the company said Wednesday. Apple will increase the starting wage for its retail employees in the U.S. to $22 an hour. Premier Li Keqiang said during a nationwide videoconference Wednesday, according to a CNBC translation of a Chinese-language state media report. On Wednesday, a state media news broadcast showed large conference rooms of people from different provinces tuning into the meeting. There hasn’t been such a meeting of this scale for years, and it’s unprecedented for one meeting to address so many levels of government at once, said Zong Liang, chief researcher at the Bank of China. Treasury yields trade primarily flat early Thursday, with the 10-year dipping to 2.74% and the 30-year rising slightly to 2.97%.
Although Durable goods orders fell more than expected and the FOMC minutes confirmed more rate hikes are on the way, the bulls had a good day reliving selling pressure as indexes lifted toward resistance levels. An NVDA earnings miss may take some of the wind out of the Nasdaq sails, but futures are putting on a brave face ahead of the GDP, and Jobless Claims reports. Traders will also have to deal with our biggest day of earnings reports this week, dominated by struggling retail as consumers curtail spending. Yesterday’s rally pushed the T2122 indicator near the bearish reversal zone, so keep an eye on and respect overhead resistance levels for possible entrenched bears. With a 3-day weekend approaching, watch for the possibility of traders reducing risk heading into the uncertainty of the long weekend.
Markets gapped modestly lower on Wednesday and then road the roller coaster sideways the rest of the day. A bullish lean the last 90 minutes took stocks out toward the high end of the range. This left us with white candles with small lower wicks and larger upper wicks. However, the SPY and DIA both managed to close above their T-lines. On the day, SPY gained 0.90%, DIA gained 0.58%, and QQQ gained 1.40%. The VXX fell 1.6% to 23.65 and T2122 spiked into the overbought territory at 90.79. 10-year bond yields were flat on the day at 2.756% and Oil (WTI) gained almost 1% to $110.84/barrel.
In economic news, April Durable Goods Orders came in at half what was expected (+0.3% vs. +0.6% est.). Crude Oil Inventories came in lower than expected (down 1.019mil barrels vs. down 737,000 barrels expected). The non-partisan Congressional Budget Office raised its 2022 economic output (GDP) forecast to +3.1% and also said that it believes inflation has topped out and will have fallen to 2% by 2024. This good news was unexpected. However, it was the Fed Meeting Minutes that made the biggest splash.
The Fed minutes released in the afternoon indicated the Fed is ready to move ahead with multiple half-percent rate hikes in the coming meetings. In fact, they said it was likely that we will see 50-basis-point moves at each of the next few meetings. The thing that was perhaps unexpected was the minutes showed they are ready to keep raising into “neutral” or even “restrictive rate” territory in order to get inflation under control. Ominously, several of the members said they were concerned about financial stability risks (in both the bond and commodities markets) of them getting to restrictive rates, but generally agreed they would do whatever was needed.
After the close, NVDA, WSM, ENS, MOD, SPLK, and PLUS all reported beats on both the revenue and earnings lines. Meanwhile, UHAL, GES, and CHNG beat on revenue while missing on earnings. However, DXC missed on both revenue and earnings lines. It is worth noting the NVDA fell, despite beating, on light forward guidance.
In other stock news, an SEC filing on Wednesday showed that Musk has increased his personal financial commitment to the TWTR buyout deal to $33.5 billion, with the remaining $10 billion coming from outside investors. TWTR was up on that news. However, in perhaps unrelated news, after-hours TWTR shareholders voted to oust longtime Elon Musk associate and backer Egon Durban from his TWTR board seat. Finally, Reuters reported that there are multiple bidders competing the acquire KSS, and the stock spiked on the news (up as much as 17% and closing up almost 12%).
In AAPL news, yesterday the company released a statement saying that it was raising compensation by 10% or more. It also released an internal video urging workers at its retail stores not to join a union. This morning Bloomberg reports that the company has asked suppliers to build 221 million iPhones, which is in line with 2021 but far below analyst expectations of 240 million units for this year.
Overnight, Asian markets were mixed on modest moves. Singapore (+0.93%), India (+0.90%), and Shenzhen (+0.57%) led the gainers. Meanwhile, Taiwan (-0.84%), Australia (-0.69%), and New Zealand (-0.63%) paced the losses. In Europe, stocks are nearly green across the board (with the sole exception of Sweden (-0.96%) at mid-day. The FTSE (+0.04%) lags while the DAX (+0.77%) and CAC (+0.74%) are more typical of the region in early afternoon trading. As of 7:30 am, US Futures are pointing toward a modest gap higher at the start of the day. The DIA implies a +0.76% open, the SPY is implying a +0.77% open, and the QQQ implies a +0.57% open at this hour. 10-year bond yields are slightly higher at 2.761% and Oil (WTI) is three-quarters of a percent higher at $111.15/barrel in early trading.
The major economic news scheduled for release Thursday is limited to Q1 GDP and Weekly Initial Jobless Claims (both at 8:30 am), and April Pending Home Sales (10 am). The major earnings reports scheduled for release include BABA, AMWD, BIDU, BURL, CM, DG, DLTR, GCO, IQ, M, and MDT before the open. Then after the close, AEO, ADSK, COST, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY report.
So far this morning BABA, TD, BIDU, IQ, DG, DLTR, TITN, and M have reported beats on both lines. At the same time, BKE and GCO missed on revenue while beating on earnings. However, MDT and BURL reported misses on both the revenue and earnings lines.
The major economic news coming Friday includes a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.
Back and forth we go as the chop looks to be heading toward a modest gap higher today. Regardless, the bears still have the trend and the bulls have not capitulated in a crescendo of volume yet. So, uncertainty and stubbornness remain. That means volatility and intraday whipsaw are also likely to continue. If we do break lower, keep an eye on that bear market line (about 384 in the SPY) for the S&P. The bulls have defended that line before, so a bounce there is possible. Be very careful about chasing and remain nimble or hedged. There is no need to predict reversals or fear of missing out. The market will still be here after it has given confirmation.
Trading is a job, not a lottery ticket. So, work the process. 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. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.
Ed
Swing Trade Ideas for your consideration and watchlist: BMBL, MNKD, DKNG, KRE, WFC, FITB, ZION, XLE, ZIM, FIS, BTU. 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.
🎯 DickCarp: 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.
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
Another day and another big whipsaw as the Dow bounced back from more than a 500-point loss to squeak out a second day of gains. Unfortunately, the SPY, QQQ, and IWM did not enjoy the same bullish result closing lower on the day though well off intraday lows. Today we have Durable Goods, Petroleum Status, the FOMC minutes, and the potentially market-moving report from NVDA after the bell. Remember Thursday; we have another nail bitter with a reading on GDP to keep traders on edge and price action volatile.
Asian markets traded mixed overnight after the New Zealand central bank raised interest rates again to curb inflation. Across the pond, European markets show modest gains this morning, trying to recover slightly from Tuesday’s selling. As we wait on the Durable goods, report Mortgage applications continue to decline with futures retreat from overnight highs currently suggesting a lower open. That could suddenly get better or worse as soon as the number comes out. Buckle up for another day where anything is possible!
Economic Calendar
Earnings Calendar
We have just over 30 companies listed on the Wednesday earnings calendar with only about 20 confirmed reports. Notable reports include NVDA, BOX, DKS, DY, ENS, EXPR, MOD, NTNX, PLAB, SPLK, VSAT, WSM & ZTO.
News & Technicals’
Russia may now create a historic debt default. Up until Wednesday, the U.S. Treasury Department had granted a key exemption to sanctions on Russia’s central bank that allowed it to process payments to bondholders in dollars through the U.S. and international banks on a case-by-case basis. However, the Treasury Department’s Office of Foreign Assets Control has allowed the exemption to expire as of 12:01 a.m. ET on Wednesday, it was announced in a bulletin Tuesday. Adam Solowsky, a partner in the Financial Industry Group at global law firm Reed Smith, told CNBC on Friday that Moscow will likely argue that it is not in default since payment was made impossible, despite having the funds available. According to a filing, Trian Partners, the largest shareholder of Wendy’s, is exploring a potential deal with the company. Along with its partners, Trian owns a 19.4% stake in the burger chain. According to the filing, the hedge fund said it was seeking a deal to “enhance shareholder value” that could include an acquisition or merger. In addition, Georgia’s Republican Gov. Brian Kemp was projected to win his party’s nomination for reelection. Kemp is projected to defeat ex-President Donald Trump’s preferred candidate, former Sen. David Perdue. Kemp will face Democrat Stacey Abrams in a rematch of the gubernatorial contest she narrowly lost to him in 2018, NBC News projected. Treasury yields little changed in early Wednesday trading, with the 10-year traded flat at 2.75% and the 30-year dipped slightly to 2.96%.
The Dow managed to squeak out a second day of gains whipsawing up from an early 500-point loss. However, the SPY, QQQ, and IWM remained lower on the day despite the significant late-day rally. Before the bell today, we get a reading on Durable Goods Orders that consensus estimates suggest a decline. That should not be a surprise given the overall market condition, but the market seems to be holding its breath this morning, hoping the decline is not enough to inspire more selling! After that, we will deal with petroleum numbers, more Fed speaks, the FOMC minutes, and a potential market-moving report from NVDA. If that’s not enough drama to deal with, remember we have a GDP reading before the bell on Thursday. Anything is possible, so stay focused on price action and avoid overtrading in a likely day of uncertainty and volatility.
Markets gapped more than a percent lower at the open Tuesday after a bad earnings report by BBY and a major guidance warning by SNAP, which hurt the big tech names in sympathy. The selloff continued for the first hour and a half of the day. However, then the whipsaw took over as we rallied and then sold multiple times the rest of the day. By day end we had indecisive Spinning Top candles in all 3 major indices with only the DIA managing to get back into positive territory. On the day, SPY lost 0.76%, DIA gained 0.17%, and QQQ fell 2.13%. The VXX ended flat at 24.03 and T2122 fell from over 70 down to 27.04, still in the mid-range, but now toward the bottom end. 10-year bond yields fell sharply to 2.754% as investors bought up those bonds in search of safety. Meanwhile, Oil (WTI) was only fractionally lower to $109.93/barrel.
As mentioned, Thursday evening’s pre-announcement by SNAP hammered big tech on the day. FB (-7.62%), TWTR (-5.55%), and GOOG (-5.14%) proved just too much of a drag for the rest of the QQQ to hold up. In terms of sectors, Consumer Cyclical (-3.12%) was not far behind Technology (-3.33%). The big consumer cyclical losers on the day were TSLA (-6.93%), AMZN (-3.21%), BABA (-5.46%), and DIS (-4.01%).
During the day Tuesday, Manufacturing PMI came in exactly in line with forecasts (but down a bit from April) while Services PMI came in slightly below forecast at 53.5. However, the big economic news was that April New Home Sales were down 16.6%. This is clear evidence that spiking rates have killed demand while people still remember 3.3% interest rates earlier this year.
After the close, A, INTU, JWN, CAL, and TOL all reported beats on both the revenue and earnings lines. However, URBN reported earnings that missed on both lines. JWN also raised its full-year forecast on the strength of momentum from Q1. In other stock news, WEN spiked over 20% after-hours as its biggest shareholder (hedge fund Trian, which owns 19.4% of the stock) announced it was looking at potential deals to acquire the company.
On the global food story, at the World Economic Forum (Davos) there were several calls for European countries to send warships into the Black Sea in order to break the Russian blockade of Odesa and protect freighters carrying Ukrainian grain. This came the same day a Russian freighter was spotted loading (stealing) grain at the occupied port of Berdyansk. Elsewhere, India is preparing to ban the export of Sugar (on top of last week’s ban on Wheat exports). India is the second-largest sugar exporter globally.
In economic news, Economists have downgraded the forecast for Chinese growth again. At this point, they are expecting China to expand at a 4.5% clip for the year. This is a full percent below the official Chinese growth target. Meanwhile, in the US, mortgage demand fell again in spite of interest rates falling slightly from 5.49% to 5.46% and origination points also being lowered (from 0.74 to 0.60). Loan applications for refinancing a home dropped 2% for the week and were 75% lower year on year. Applications for new home purchase loans were flat on the week, but down 16% year-over-year.
Overnight, Asian markets were mixed again on modest moves. Shanghai (+1.19%), Taiwan (+0.88%), and Shenzhen (+0.70%) were the biggest gainers. Meanwhile, New Zealand (-0.66%), India (-0.62%), and Singapore (-0.48%) paced the gainers. In Europe, stocks are leaning to the upside at mid-day (also on modest moves). The FTSE (+0.60%), DAX (+0.25%), and CAC (-0.01%) lead the way as usual, with only Norway (+1.23%) moving more than a percent in early afternoon trading. As of 7:30 am, US Futures are pointing toward a modestly lower start to the day. The DIA implies a -0.34% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.28% open at this hour. However, those futures are all steadily weakening since earlier in the morning. 10-year bond yields are down slightly at 2.734% and Oil (WTI) is up another 1.4% to $111.26/barrel in early trading.
The major economic news scheduled for release Wednesday is limited to April Durable Goods Orders (8:30 am), Crude Oil Inventories (10:30 am), and the May Fed Minutes (2 pm). There is also a Fed speaker (Brainard at 12:15 pm). The major earnings reports scheduled for release include BMO, BNS, BAX, DKS, and DY before the open. Then after the close, UHAL, CHNG, DXC, ENS, GES, NVDA, SPLK, and WSM report.
So far this morning BNS, BMO, and DY have all reported beats on both lines.
The major economic news coming later this week includes Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales on Thursday. Then on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.
It looks like we are headed toward a relatively flat open, (down, but only modestly so at this hour) not gapping one direction or the other for a change. This may be a signal that traders are waiting to sift through the tea leaves of the Fed Minutes this afternoon or simply that markets have been so choppy lately that traders need to take a breath. Regardless, the bears still have the trend and the bulls have not capitulated in a crescendo of volume yet. So, uncertainty and stubbornness remain. That means volatility and intraday whipsaw is also likely to continue. If we do break lower, keep an eye on that bear market line (about 384 in the SPY) for the S&P. The bulls have defended that line before, so a bounce there is possible. Be very careful about chasing and remain nimble or hedged. There is no need to predict reversals or fear missing out. The market will still be here after it has given confirmation.
Trading is a job, not a lottery ticket. So, work the process. 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. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.
Ed
Swing Trade Ideas for your consideration and watchlist: Not 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.
🎯 DickCarp: 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.
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
Although the Dow enjoyed a steady relief rally, the SPY, QQQ, and IWM struggled to maintain bullish momentum. Facing potentially market-moving economic data the rest of the week, the bulls may have missed their chance to improve the index chart technicals. This morning traders will turn their attention to PMI and Housing data along with another round of retail earnings reports and more comments from Jerome Powell at 12:20 PM Eastern. As you plan forward, keep in mind the Durable Goods report before the bell that’s expected to decline and the FOMC minutes to keep things interesting.
Asian markets had a rough night of selling, seeing red across the board with possible tariff cuts on Chinese goods. This morning, European markets also have a bearish look showing red selling across all indexes. Ahead of earnings and economic data, U.S. futures point to a bearish open as the bear look to claw back some of Monday’s rally. Get ready for another wild day of price action!
Economic Calendar
Earnings Calendar
The Tuesday earnings calendar has about 50 companies listed with the heavy retail focus continuing though many are unconfirmed. Notable reports include BBY, ANF, A, CAL, CSIQ, CTRN, DSX, ESLT, INTU, NTES, JWN, WOOF, RL, SBLK, TOL, URBN, & ZEPP.
News & Technicals’
A growing number of economists and money managers sound the alarm over a possible return to1970s style stagflation as the Federal Reserve moves to tame Sky-high inflation. According to a recent survey from BOA Global Research, about 77% of investment fund managers now say they see “ below-trend growth and above-trend inflation” as the most likely outcome for the economy over the next year. Walmart is expanding drone deliveries across six states with the operator DroneUp, bringing its total network to 37 sites by year-end. The big-box retailer said it would be able to deliver items like batteries and Hamburger Helper to 4 million households in parts of Arizona, Arkansas, Florida, Texas, Utah, and Virginia. Walmart has been testing how drone deliveries could drive e-commerce growth and turn stores into a way to outmatch Amazon on speed. A survey by PwC of more than 52,000 workers in 44 countries indicates the Great Resignation is set to continue. Some 35% say they plan to ask their employers for a pay raise, with the pressure highest in the tech sector. More money is the biggest motivator for a job change, yet finding fulfillment at work is “just as important,” according to PwC. Snap will miss its revenue and adjusted earnings targets in the current quarter, CEO Evan Speigel warned on Monday in a note to employees. The social media company will also slow hiring through the end of the year as it looks to manage expenses. Zoom narrowly beat on the top line but sailed past estimates for earnings while also giving a better-than-expected outlook for the second quarter. Before Monday’s earnings report, Zoom shares had lost about 85% of their value since October 2020. The company reported five straight quarters of triple-digit revenue growth during the pandemic, but expansion is now much more challenging. Treasury yields declined in early Tuesday trading, with the 10-year dipping to 2.81% and the 30-year trading lower to 3.02%.
Monday saw a steady rally in the Dow while the SPY, QQQ, and IWM rallied but struggled to maintain bullish momentum to squeeze out short traders. However, with potential market-moving economic the rest of the week, the bulls may have missed their chance to improve the chart technicals as the data points ahead may favor the bears. Consensus expects the PMI and New Home Sales to weaken, and then we have more comments coming from Jerome Powell at 12:30 PM to keep traders guessing the price volatility likely high. Ahead of the data with more disappointing retail news from SNAP, futures look to take back a significant portion of Monday’s relief at the open.
Stocks gapped higher the better part of a percent on Monday after news that President Biden said he is now reconsidering the previous administration’s tariffs on Chinese goods. After some waffling the first hour, the bulls then stepped in to take us to the highs at mid-day. The afternoon was spent seesawing sideways not too far from the highs of the day. The SPY and DIA both tested their T-lines (and are still testing at the moment) with the QQQ still having work to do to get to that test. This action gave us gap-up, white candles with wicks on both ends, but larger wicks on the bottom of the SPY and QQQ. On the day, SPY gained 1.87%, DIA gained 2.05%, and QQQ gained 1.66%. All of this happened on low trading volume. The VXX fell to 24.06 and T2122 climbed to not far outside of the overbought territory (70.09) even though we entered the day well oversold. So, to the extent this was a relief rally, Mr. Market has now gotten at least some relief. 10-year bond yields rose to 2.866% and Oil (WTI) fell to $110.62/barrel.
As mentioned, President Biden’s statement that he is revisiting Chinese tariffs helped stocks. In particular, big bank stocks across the board shot higher on the news. It is worth noting that JPM CEO Dimon told World Economic Forum (Davos) attendees that he only sees inflation and recession as “big storm clouds in the distance” at this point, continuing to say they may dissipate as the Fed gives more clarity on when the hikes will reach a neutral point. The banks leading the charge Monday included JPM, C, BAC, and WFC who led the way for the DIA and SPY.
After the close, ZM, HEI, and SKY all reported beats on both the revenue and earnings lines. At the same time, NDSN missed on revenue while beating earnings estimates. However, AAP reported missing on both lines. ZM was up as much as 21% after-hours after issuing strong guidance on top of their earnings beat.
In other stock news, at the end of the day, the National Labor Relations Board ruled there was merit in the claim that ATVI illegally threatened union organizers using the guise of a broad company social media policy that conflicted with employee rights. This comes hours before the union vote begins for ATVI subsidiary Raven Software. All of this is happening while the ATVI buyout by MSFT remains not yet closed. Elsewhere, the CEO of SNAP send an email to all employees after the close telling them that the company will miss its own targets for both revenue and earnings in the current quarter. SNAP stock plummeted 31% in after-hours trading following that email. The company also filed a K-8 form reporting the same to the market.
Monday evening, Bloomberg reported that for the third week in a row, insiders have increased the buying of their own company’s stock. Last week, 897 insiders across 381 companies, bought over $324 million of their company’s stock. The week prior, we saw 584 insiders across 288 companies buying $188 million of stock. Insider buys are often part of a scheduled buying plan. However, last week’s numbers compare to only 190 insiders across 107 companies buying $43 million one year ago. So, this may be an indication that insiders think markets are oversold, regardless of whether they fall in the short-term or not.
On the Russian invasion story, a Russian diplomat in Switzerland resigned over his country’s 3-month invasion and occupation of Ukraine. In Ukraine, the first Russian soldier convicted of war crimes was sentenced to life in prison for murdering a civilian. The European Economic Commission President von der Leyen told World Economic Forum (Davos) participants that Russia was waging war with food as the UK told Sky News UK that it was exploring all options to get 25 million tons of wheat out of Ukraine. She went on to say that sanctions are hurting Russia and she hopes for agreement on Russian oil sanctions within days. On the other side of the world, the leaders of the US, Japan, India, and Australia are in 4-way talks over security and sanctions against Russia. The 3 more western nations are pressuring India to pivot more toward the West and further isolate Russia. This includes military purchases (where tens of billions is now spent in Russia that might go to western firms like RTX, GD, NOC, LMT, BA, etc.
Overnight, Asian markets were red across the board with China leading the way lower. Shenzhen (-3.34%), Shanghai (-2.41%), and Hong Kong (-1.75%) paced the losses. In Europe, stocks are mixed, with the larger exchanges following Asia lower at mid-day. The FTSE (-0.13%) lags, but the DAX (-0.63%) and CAC (-0.71%) are more typical of the losses across the major exchanges in early afternoon trading. As of 7:30 am, US Futures are pointing toward a gap down to start the day. The DIA implies a -0.54% open, the SPY is implying a -0.91% open, and the QQQ implies a -1.47% open at this hour. 10-year bond yields are off slightly to 2.821% and Oil (WTI) is up fractionally to $110.65/barrel in early trading.
The major economic news scheduled for release Tuesday is limited to Mfg. PMI and Services PMI (both at 9:45 am), and April New Home Sales (10 am). However, Fed Chair Powell also is scheduled to speak at 12:20 pm. The major earnings reports scheduled for release include ANF, AZO, BBY, CSIQ, DOLE, ESLT, NTES, WOOF, and RL before the open. Then after the close, QFIN, A, CAL, INTU, JWN, TOL, and URBN report.
So far this morning NTES and AZO have reported beats on both lines. At the same time, BBY and ESLT beat on revenue while missing on earnings. On the other side, CSIQ and DOLE missed on revenue while beating on earnings.
The major economic news coming later this week includes April Durable Goods Orders, Crude Oil Inventories, and the May FOMC Minutes on Wednesday. On Thursday we see Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales. Finally, on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.
The bears are not taking the bulls’ Monday move lightly and are looking to open markets lower today. With a chunk of over-extension taken off the board by yesterday’s action, those bears may have more strength than the bulls at least early. However, volatility and intraday whipsaw is likely to continue. The bulls have not capitulated in a crescendo of volume yet…so uncertainty and stubbornness remain. Remember that the trend is still to the downside, but the bulls seem to want to defend that bear market line for the S&P. So, be very careful about chasing gaps and remain nimble or hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.
Trading is a job, not a lottery ticket. So, work the process. 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. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.
Ed
Swing Trade Ideas for your consideration and watchlist: SHEL, DRE, COP, C, JPM, ZIM, XLE, ARKK, DVN, OXY, UPST. 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.
🎯 DickCarp: 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.
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
Although the bears controlled the majority of Friday’s trading, the sharp end-of-day short-covering surge gave rise to some relief rally hope. Unfortunately, the window for the bulls to relieve selling pressure could be short-lived, considering the market moving economic reports throughout the week that may favor the bears. So, plan your risk carefully and expect price volatility to remain challenging as the possibility of recession looms.
Asian markets mostly rallied during the night, with the tech-laden Hong Kong exchange declining. European markets traded bullishly this morning, with the FTSE up more than 1%. U.S. futures also point to a bullish open with a light day of economic data with AAP and CRMT reporting after the bell today.
Economic Calendar
Earnings Calendar
We have almost 50 companies listed on the Monday earnings calendar, but most are unconfirmed. Notable reports include AAP, CRMT, NLS, NDSN, TRANS & XPEV.
News and Technicals’
The U.S. announced the Indo-Pacific Economic Framework with Asian partners, including Australia, Japan, and the Republic of Korea. It’s a comprehensive plan to help expand the U.S.′ “economic leadership” in the Indo-Pacific region. Notably, the IPEF is not a free trade agreement. Biden faces political pressure from both the left and right in the United States to avoid free trade deals. When asked at a joint press conference with Japanese Prime Minister Fumio Kishida whether the U.S. would be prepared to defend Taiwan if attacked, Biden replied: “Yes.” Taiwan’s foreign ministry thanked Biden for reaffirming U.S. support if Beijing invaded the island. However, Reuters reported that China’s foreign ministry said the U.S. should not defend Taiwan’s independence. According to federal data, an estimated 42,915 people died in motor vehicle traffic crashes in 2021, a 10.5% increase from 2020 and the highest rate since 2005. Experts say the increase stems from a combination of factors, including reckless or distracted driving and record levels of vehicle performance and weight. Compared to 2019, fatality rates have risen by 18%. On Monday, U.S. Commerce Secretary Gina Raimondo and Japan Trade Minister Koichi Hagiuda discussed “cooperation in semiconductors and export control.” Chips are integral to just about every piece of advanced electronics made, with industries from automobiles to home appliances dependent on them. The war in Ukraine is being fought both online and offline, with hackers on each side targeting the enemy’s national infrastructure. Over the last few weeks, major tech stocks have plummeted amid concerns of a global recession, but Sorrell believes Russia’s invasion of Ukraine could boost their revenues. Treasury yields rose in early Monday trading, with the 10-year climbing to 2.82% and the 30-year rising to 3.02%.
Friday’s trading completed the down-trending pattern by creating lower lows in the DIA, Spy, and QQQ but surged sharply upward in the last 30 minutes of trading, raising relief rally hope for the week ahead. Although the futures have pulled back from overnight highs, they indicate a bullish open this morning. With the economic calendar giving us a little break from the gloomy reports of late, the bulls may have a chance to push back, relieving at least some of the selling pressure. But, of course, the retail earnings reports could easily change the bullish mood if AAP and CRMT disappoint after the bell. However, the window for a rally could be short-lived with the likely market-moving data for New Home Sales, Durable Goods, FOMC minutes, GDP, and Personal Income & Outlay reports throughout the week. Traders should expect volatility to remain challengingly high. Continue to respect overhead resistance levels, whipsaws, and pop and drop patterns if the bulls find the energy to test them.
Markets gapped about one percent higher on Friday, but this was a Bull Trap. Right after the open, the selling started and the selloff continued until about 3 pm. However, a massive rally (options expiration pinning) took us out well over halfway up those candles. This gave us a black, Bearish Engulfing candle (barely) in the QQQ and just black indecisive candles with huge lower wicks in the SPY and DIA. The late-day rally saved the SPY from joining the QQQ in Bear Market territory (down more than 20% from the high). It also capped off the seventh consecutive week of declines across the market. So, the bears may want to retest that Bear Market level this week. And with that said, markets are still well oversold, giving the bulls some ammunition. So, the Bulls may want to try a little relief rally as well. On the day, SPY gained 0.04%, DIA lost 0.24%, and QQQ lost 0.31%. The VXX fell a little over a percent to 25.05 and T2122 “climbed” to 8.28. 10-year bond yields fell to 2.79% as traders bought up bonds during the first 6 hours of the day and Oil (WTI) was up marginally to $112.70/barrel.
Last week, TSLA had a terrible streak losing 14%. However, you have to bear in mind, that the stock has lost 34% since it was revealed (well after the fact) that Musk had been selling off TSLA stock to raise money for his TWTR bid. Among the problems facing the company are the lockdowns in China stalling production, the Chinese economic downturn hurting demand, massively increased competition from actual major carmakers, and, of course, the 3-ring circus of notoriety for the sake of itself that Musk feels the need to maintain at any cost. On the Chinese front, TLSA has said it wants all staff to continue living in its Chinese factory until mid-June to minimize the risks of more shutdowns. In other stock news, Sunday night Bloomberg reported that AVGO is in talks to acquire VMW.
Recently, there has been considerable talk in the trading rooms about whether or not we’ve yet seen a bottom in the selloff. On Sunday, the WSJ suggested the answer is no for now. They reported that BAC says that 63% of their private client’s portfolios are still in stocks, much higher than when prior bottoms have been reached. In addition, the VIX is currently at 29 and has reached a maximum of 34.75 in the last month. Again, this is well below the 40+ it reached in the 2008, 2011, and March 2020 selloffs. Finally, while most selloffs end in capitulation (extreme volume on at least one big down day), we have not seen any such action yet. So, at the moment, both the chart and anecdotal evidence point to the bears still being in control.
Bloomberg reported over the weekend that Fed members have been telling them that a market selloff is exactly what they need. The basic idea is that as the market falls, the normally “long-only” public loses money or at least feels worse. In turn, this will cause the public (on average) to spend less and that lower demand helps to reduce inflation. So, while the Fed increasing rates works on the supply side (making spending more expensive), a bear market works on the demand side, slowing the consumer’s urge to buy. For that reason, Bloomberg says several anonymous Fed members have told them that any sort of Fed Put is the last thing they want to see. Simply stated, any market bullishness would make their “job number one” (taming inflation) twice as hard. KC Fed President George is expected to confirm this evening.
In climate-related news, the North Americans Electric Reliability Corporation (a non-profit regulatory authority) has warned that the entire Western US, most of the Upper Midwest, and parts of the East Coast are at high risk of blackouts this summer. This is the result of the long-term drought in the West (now reducing hydroelectric production) and a newly forecast summer heatwave (worse than normal). This electricity shortage may affect essentially every industry over at least the next 1-2 Quarters. Climate has also put another hit on the Ag industry as unprecedented rain for months has caused the deterioration (flooding) of Canadian croplands as well as the inability to plant. The Insurance Journal reports that only 4% of Manitoba croplands are planted, while the 5-year average at this point of the year would be over 50% planted. Canola and wheat are the crops most impacted, which coincidentally are exactly the crops whose supply is also most impacted by the Russian invasion of Ukraine and the blockading of Odesa. As a result, all companies that use wheat and canola are at great risk of both supply problems and much higher input costs six months down the road. Of course, consumers will also have to pay much higher prices for staple items like bread, pasta, cereals, battered food, etc.
On the Russian invasion story, Russia cut the flow of natural gas to Finland Saturday (after Finland refused to pay in Rubles). Lithuania also stopped buying electricity from Russia. On Sunday, Russian Trans. Minister Savelyev told state media that Western sanctions have effectively broken logistics within Russia. On the ground, things are looking tough for the Ukrainians in the Luhansk region as Russia made gains around the town of Popasna and blew up the last resupply/retreat bridge for the Ukrainian Army in Severodonetsk / Lysychansk (a large petrochemical industry metroplex). With no major new Western arms shipments expected until July and Russia getting tens of thousands of additional troops (freed up from Mariupol and returning from their Syrian drawdown), it is looking dire for Ukraine holding onto the Donbass. Finally, much of the talk at Davos has been about implementing and offsetting Russian Oil sanctions. This included a speech from Ukrainian President Zelensky.
Overnight, Asian markets were mixed on modest moves. Japan (+0.98%), Thailand (+0.76%), and New Zealand (+0.44%) led the gainers. Meanwhile, Hong Kong (-1.19%), Singapore (-0.83%), and Malaysia (-0.43%) paced the losses. This is despite a rally that came when President Biden told the Asian Economic meeting that he was going to revisit the former President’s Chinese tariffs. (The President also misspoke, saying that the US Military would intervene to defend Taiwan from a Chinese attack.) In Europe, stocks lean heavily to the green side on Biden’s comments as well as more certainty from the ECB as ECB President Lagarde said they are likely to raise rates this summer and be out of negative rates by September. At mid-day, the FTSE (+1.04%), DAX (+0.75%), and CAC (+0.35%) lead the way and are fairly typical of the continent. Only Russia (-1.91%) and the FTSE MIB (-0.64%) are in the red in early afternoon trading. As of 7:30 am, US Futures are pointing to another gap higher to start the day. The DIA implies a +1.11% open, the SPY is implying a +1.21% open, and the QQQ implies a +1.05% open at this hour. 10-year bond yields are back up to 2.835% and Oil (WTI) is up 1% to $111.36/barrel in early trading.
The only major economic news scheduled for release Monday is a Fed speaker (George at 7 pm). There are no major earnings reports scheduled before the open. However, AAP, HEI, NDSN, SKY, and ZM report after the close.
The major economic news coming later this week includes Mfg. PMI, Services PMI, and April New Home Sales on Tuesday. Then on Wednesday, we get April Durable Goods Orders, Crude Oil Inventories, and the May FOMC Minutes. On Thursday we see Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales. Finally, on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.
Major earnings reports coming later this week include ANF, AZO, BBY, CSIQ, DOLE, ESLT, NTES, WOOF, and RL on Tuesday. Then Wednesday we get BMO, BNS, BAX, DKS, DY, UHAL, CHNG, DXC, ENS, GES, NVDA, SPLK, and WSM. On Thursday, we hear from BABA, AMWD, BIDU, BURL, CM, DG, DLTR, GCO, IQ, M, MDT, AEO, ADSK, COST, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY. Finally, Friday he see BIG, PDD, and SAFM.
The bulls look to be trying to leverage the late-day rally on Friday into a gap higher this morning. News that the US is reconsidering tariffs on Chinese goods is helping buoy spirits despite the head of the IMF saying they may need to reduce the 2022 global economic growth forecast again. In short, after seven weeks of losses and sitting in a very oversold state, the bulls feel the need to stretch their legs. As traders, we need to keep in mind that despite this fact, the trend is down and the probability of volatility is high. So, continue to be very careful about chasing gaps. Remember that Friday’s gap was a Bull Trap. Either way, that “bear market level” (down 20% from highs) in the area is close below in the S&P. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.
Trading is a job, not a lottery ticket. So, work the process. 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. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.
Ed
Swing Trade Ideas for your consideration and watchlist: No Trade Ideas Yet (Rick has Internet issues). 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.
🎯 DickCarp: 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.
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
Prices struggled for direction on Thursday as the indexes seesawed, trying to overcome the shellshock of the punishing Wednesday reversal. Today we get a break on the earnings and economic calendar, perhaps giving the bulls some breathing room to relieve some of the selling pressure, but traders will have to stay focused on overhead resistance. With food, housing & energy prices continuing to rise, consumers have some tough choices ahead as the Fed works to slow the economy.
Asian market rebounded sharply overnight, with Hong Kong leading the way, up 2.96% to close the trading week. European markets are taking that lead, trading decidedly bullish and green across the board. The U.S. is also looking for some selling relief, with futures pointing to a substantial gap up getting a break from earnings and economic data. Respect overhead resistance levels and watch for whipsaws and, of course, the possible pop and drop.
Economic Calendar
Earnings Calendar
We have a very light day with less than ten confirmed reports on the Friday earnings calendar. Notable reports include BAH, DE & FL.
News & Technicals’
After a three-day visit to South Korea beginning on Friday, Biden will travel to Tokyo on Sunday to attend a summit of the leaders of the four-nation Quadrilateral Security Dialogue, being hosted by Japan. North Korea conducted two ICBM tests earlier this year, and an expert says tunneling activity indicates preparation for a nuclear test. Consumers are grappling with record-high gas prices, but the surge also hurts businesses. The national average for a gallon of gas hit a new high Thursday. California’s statewide average is now above $6. Russia’s invasion of Ukraine sent an already tight energy market reeling. “We did not anticipate that transportation and freight costs would soar the way they have as fuel prices have risen to all-time highs,” Target CEO Brian Cornell said Wednesday. According to the National Association of Realtors, sales of previously owned homes in April fell to the lowest pace since the Covid pandemic started. We are moving back to pre-pandemic sales activity, but I expect further declines,” said Lawrence Yun, chief economist for the group. Tight supply kept home prices higher, despite rising interest rates. The median price of an existing home sold in April was $391,200, the highest on record and an increase of 14.8% from a year ago. Treasury yields moved slightly higher in early Friday trading, with the 10-year rising to 2.86% and the 30-year slightly higher at 3.07%.
The Thursday price action left more questions than answers as the indexes seesawed in a choppy range, as shell-shocked investors rested after the punishing selloff on Wednesday. However, the T2122 indicator suggests, and short-term oversold condition that a relief rally could be near, and the VIX registered a slight decline in fear. Thankfully we have muted earnings and economic calendars today, providing some calm in what has been a week filled with bearish data. Though we hit another national gas price record, the light news day can provide the bulls breathing room to relive some of the selling pressure as we wrap up another challenging week.
Markets gapped down the better part of a percent on Thursday on fears over economic slowdown. This led to the immediate start of an all-day, roller-coaster ride within a well-constructed range. The bottom of this range for the SPY was not far from the Bear Market trip line (down 20% from highs). So, we may be getting some support from traders at that level (about 383) for the broader market. At any rate, this action left us with indecisive, Spinning Top type candles across all 3 major indices. On the day, SPY lost 0.63%, DIA lost 0.78%, and QQQ lost 0.57%. The VXX fell almost 3% to 25.36 and T2122 “climbed” but still remains deep in the oversold area at 7.32. 10-year bond yields fell to 2.851% and Oil (WTI) gained 1.6% to $111.30/barrel.
During the day, Weekly Jobless Claims were reported as slightly higher than expected. However, it was the Philly Fed Mfg. Index that drew the most concern as it came in at only +2.6 (+16.0 was forecast). This means Manufacturing conditions are only slightly improving (anything above zero), less so than expected and far less so than last month (+17.6). April Existing Home Sales also came in slightly lower than expected, which falls in line with rising interest rates. KC Fed President George said “the rough week” in the market was not surprising and is just one of the ways tighter financial conditions will emerge as the Fed tightens policy.
After the close, DECK, FLO and PANW all reported beats on both the revenue and earnings lines. After-hours, DECK was up as much as 16%, PANW was up as much as 12%, and FLO was up as much as 8% on the earnings news. Meanwhile, CLZNY missed on revenue while beating on earnings. However, AMAT, ROST, and VFC all missed on both lines. After hours, AMAT was down as much as 8%, ROST was down 20%, and traded in a wide range up as much as 7% and down as much as 3% on the earnings news.
On the Russian invasion story, the EU has agreed to $19 billion in guaranteed short-term financing for Ukraine. Meanwhile, the Biden Administration approved another small ($100 mil) military aid package for Ukraine, that another 18 Howitzers. In Congress, the $40 billion Ukraine aid package passed. This aid bill includes $9 billion for replenishing US stockpiles of arms and munitions given to Ukraine. The main beneficiaries of that $9 billion will be RTX, LMT, GD, and NOC. Finland will also lose its main natural gas supply as of Saturday when Russia shuts down its supply following Finland’s refusal to pay for gas in Rubles. Finland is one of the few gas users to stand up to Putin as the Ruble hit a 7-year high on demand for that currency from gas buyers. Finally, Qatar has offered to sell LNG from its US-based plant to Germany starting in 2024.
President Biden is in South Korea today at the start of his Asian trip. Many analysts are expecting North Korea to launch a missile or do a nuclear test in order to upstage the visit to South Korea today. So, keep an eye out for that potentially market-moving news later today.
Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%). Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way. However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points. In Europe, we also see green across the board with the exception of Russia Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%). Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way. However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points. In Europe, we also see green across the board with the exception of Russia (-1.59%) at mid-day. The FTSE (+1.95%), DAX (+1.96%), and CAC (+1.40%) lead the way, but gains of more than a percent are seen everywhere except Russia, Greece (+0.83%), and Switzerland (+0.53%) in early afternoon trading. As of 7:30 am, US Futures are pointing toward a gap up to start the day at the end of a down week. The DIA implies a +0.77% open, the SPY is implying a +0.95% open, and the QQQ implies a +1.30% open at this hour. 10-year bond yields are up slightly to 2.875% and Oil (WTI) is also fractionally higher to $112.45/barrel in early trading.
There is no major economic news scheduled for release Friday. Major earnings reports scheduled for the day include BAH, DE, and FL before the open. There are no reports scheduled for after the close.
So far this morning BAH and DE have reported beats on both lines. At the same time, FL missed on revenue while beating on earnings.
As we appear to be heading for a seventh straight week of losses (which would be the longest market losing streak since the dotcom bubble burst), Mr. Market seems to be trying to gap into a green day. Bear in mind that this is option expiration Friday and GS estimates $460 billion of single-stock options, as well as $855 billion in S&P-tied derivatives, will all expire. The point is, we may well see some volatility and/or pinning related to all those options expiring today. We also have a coming weekend new cycle to consider. So, continue to be very careful. The short and mid-term trends are bearish, the mid-term move is getting a bit long in the tooth. Plus in the short-term (as shown by T2122), we are oversold and have the potential support of a “bear market level” (down 20% from highs) in the area. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.
Trading is a job, not a lottery ticket. So, work the process. 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. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.
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.
🎯 DickCarp: 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.
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
