Markets gapped lower at the open Friday and followed through to the downside until 11 am.  From that point, all 3 major indices ground sideways the rest of the day.  This left us with gap-down black candles with modest wicks on both ends.  The SPY and the QQQ have failed their T-lines (8ema).  However, the DIA managed right at the T-line. All 10 sectors were red with Technology, Basic Materials, and Consumer Cyclicals leading us lower.

On the day, SPY lost 1.34%, DIA lost 1.05%, and QQQ lost 1.95%.  The VXX was flat at 21.16 and T2122 (4-week New High/Low Ratio) dropped like a stone, falling out of the overbought territory to the low mid-range at 35.71.  10-year bond yields rose sharply to 2.972% and Oil (WTI) was off a little less than a half of a percent to $90.09/barrel.  This resulted in the first down week following the last 4 weeks being up.

In stock news, on Friday, BRKB was also granted permission to buy up to 50% of OXY (BRKB already owns just over 20% of the stock) and OXY shares closed up 8.48% on the news.  Then on Saturday, it was reported that a jury ordered F to pay $1.7 billion in a Georgia rollover accident case from 2014.  US Sec. of Transportation Buttigieg urged the 10 largest US airlines to do more to help stranded or delayed passengers following a large uptick in cancellations and delays this summer.  AAL, DAL, UAL, LUV, JBLU, ALK, and SAVE were among the companies warned to do more or face stiff fines from the DOT. Elsewhere, a federal judge found SBUX guilty of firing 7 Memphis employees for seeking to form a union and has ordered SBUX to reinstate them.  This is one of at least 3 federal cases brought by the National Labor Relations Board against SBUX (for the same illegal practice), which is desperately trying to stop unionization after 200 of its stores have recently unionized.  Finally, Elon Musk was back on TWTR Sunday, saying that TSLA will hike the price of their “full self-driving” service by 25% on Sept. 5.

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In personal computer tech news, AMD, NVDA, both now have a glut of current version graphics cards that they and their distributors need to unload very soon in order to make room for new models.  The recent tremendous drop in Ethereum prices (which discouraged miners from buying as many cards on which to mine as they had in the past) is in part responsible. In addition, Ethereum will move to “proof of stake” (for the purpose of this blog just means you will no longer be able to mine Ethereum on a PC graphics card) by September 15.  Regardless of the cause, AMD and NVDA are in a bind and clashing pricing on their current stock in order to unload it.  AMD will announce its new line sometime 9/15-9/27 and will release the first 1-2 models of that lineup in October.  At the same announcement, AMD will introduce its new 7000-series CPU lineup and the first of these will be for sale in November.  INTC (which tried and failed to break into the graphics card business over the last year is also expected to announce new CPUs on 9/27, with the first of those models released for sale in December.  The point is that all 3 companies are currently under tremendous pressure to discount graphics cards, more glut pressures are coming, and newer/faster models are on the horizon.  In terms of CPUs, it appears AMD will beat Intel to market with their newest models by about 1-2 months, likely resulting in an increase in market share.

In China news, the PBOC made another surprise, but small, rate cut on Monday.  The Chinese Central Bank lowered 1-year rates by 5 basis points and the 5-year by 15 basis points.  Reuters reports leading analysts saying they expect China to continue cutting (10 basis points at a time) the remainder of the year. By themselves, rate cuts will have a supportive impact on China’s troubled real estate developers.  However, the Beijing government is also planning a $29.2 billion package of “special loans” for the construction sector to help developers deliver unfinished projects and ease its national mortgage payment boycott movement (according to Bloomberg).

In technical analysis news, both the SPY and QQQ have gapped back down to test their 20sma as support in premarket.  At this point, the SPY is holding that level and it looks like the QQQ is failing.  The DIA has a way to go, but is headed that direction.  Of course, the 20sma, 34ema, and 50sma are rising for all 3 major indices after weeks of rally.  Markets seem focused on anticipating the Fed’s September action and as of this moment, Futures are pricing in a 61-basis-point hike.  Unfortunately for traders, we will not hear from Fed Chair Powell until Saturday in Jackson Hole.

Overnight, Asian markets were mixed, even as China issued another surprise rate cut on Monday.  Shenzhen (+1.19%), New Zealand (+0.68%), and Shanghai (+0.61%) led the gains.  Meanwhile, India (-1.51%), South Korea (-1.21%), and Taiwan (-1.06%) paced the losses.  In Europe, stocks are mostly in the red at mid-day.  The FTSE (-0.24%) lags while the DAX (-1.71%) and CAC (-1.19%) lead the region lower.  There are only two exchanges (Russia +1.19% and Norway +0.49%) showing green in that region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap lower at the bell.  The DIA implies a -0.85% open, the SPY is implying a -1.09% open, and the QQQ implies a -1.47% open at this hour.  10-year bond yields are just very slightly up to 2.975% and Oil (WTI) is starting the week up a half of a percent to $91.22/barrel.

There are no major economic news events scheduled for Monday.  There are no major earnings reports scheduled for before the open.  However, after the close, NDSN, PANW, and ZM report.

In economic news later this week, Tuesday we get Mfg. PMI, Services PMI, July New Home Sales, and the API Weekly Crude Oil Stocks Report.  Then Wednesday, July Durable Goods Orders, July Pending Home Sales, Weekly EIA Crude Oil Inventories, and 5-year Bond Auction are reported.  Thursday, we get a Q2 GDP Revision, Weekly Jobless Claims, and the Jackson Hole Central Banker Symposium begins.  Finally, on Friday, we get July PCE Price Index, July Personal Spending, July Trade Goods Balance, , July Retail Inventories, Michigan Consumer Sentiment, and the Jackson Hole Central Banker Symposium continues with Fed Chair Powell Speaking.

In earnings later this week, on Tuesday we hear from BNS, DKS, DOLE, SJM, JD, BEKE, M, MDT, XPEV, AAP, CAL, INTU, LZB, JWN, SCSC, TOL, and URBN.  Then Wednesday we get reports from EAT, CY, IIVI, WOOF, RY, ADSK, GES, NTAP, NVCA, CRM, SPLK, VSCO, and WSM.  On Thursday we hear from ANF, BURL, CM, COTY, DG, DLTR, GFI, GOGL, HAIN, PTON, TD, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY.  Finally, on Friday JKS reports.

Traders took profits Friday and seem in the same mood this morning. The main focus seems to be on being in front of what the Fed will do in September as the probability of a 75-basis-point hike is growing again after a brief period of 50bp expectation. In addition, Europe was spooked by Russia’s saber-rattling again when they announced a the end of last week that they “need” to shut off gas flow to Europe for 3 days of maintenance at the end of this month. This comes as Europe (and especially Germany) are desperately trying to fill storage tanks ahead of Winter. That announcement played a large part in Europe’s down start on Monday. With all of that said, the short-term trend is bearish, but the mid-term trend remains bullish and we are fast approaching a level of support from the June and Early August highs.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ETSY, NET, JNPR, FUTU, OXY, KMI, KHC, XOM, MRO, DVN, SDS, DXD, QID. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened flat Thursday and then then proceeded to waffle back and forth above and below the open price (positive and negative) all day long.  This left all 3 major indices above their T-lines (8ema) even though the QQQ did retest (and held) that level earlier in the day.  All 3 of those indices are giving us indecisive, Doji / Spinning Top type candles again on the day.  However, the 200sma remains an issue (overhead for SPY and QQQ, just below for DIA).  Seven of the ten sectors were green.  Energy was far and away the biggest moving sector, up more than 2.66% while Healthcare and Communications Services paced the laggards, down about a half of a percent. 

On the day, SPY gained 0.29%, DIA gained 0.11%, and QQQ gained 0.24%.  The VXX was flat at 21.14, but stocks came back into overbought territory according to T2122 at a reading of 91.15.  10-year bond yields are off just slightly to 2.886%, but oil (WTI) was up 2.58% to $90.38/barrel again.  Overall, another positive rest day in a bull trend on below-average volume.

In economic news, Weekly Initial Jobless Claims came in a bit better than expected with 250,000 new claims (versus 265k forecast and 252k last week).  At the same time, Philly Fed Mfg. Index also came in much better than expected at +6.2 versus a -5.0 forecast and a -12.3 last month.  Taken together, this led some traders to conclude the Fed may still hike rates by 0.75% again in September (assuming the trends hold) as opposed to yesterday’s mainstream view that the hike will only be 50 basis points. FOMC voters Bullard (extreme hawk) and George (slight Hawk) both said as much during the day, indicating they were leaning toward voting for a 0.75% increase at the next meeting.  However, there was also some weaker economic news as July Existing Home Sales came in lower than expected at 4.81 million (versus 4.89 million forecast and 5.11 million in June).

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In economic outlook news, consulting company PwC released the results of a survey of more than 700 US corporate top executives.  The results showed that 52% have also implemented hiring freezes and 44% are rescinding job offers.  However, the headline was that half (50%) of US companies are either currently or planning layoffs in the near future.  In the same survey, 70% say they have implemented permanent remote-work options, but 60% also said they will be requiring employees to be in the office more often starting in September.

In stock news, BBBY closed down 19.63% and traded in a 28% range on the day.  This came as near the close, GME CEO Cohen filed a revised Form 144 with the SEC confirming he has sold his entire 9.5 million share stake (including options) in BBBY for a tidy $68 million profit.  (Not bad for a trade he was in for 5 months.)  His own company, GME (another meme stock), closed down 6.39%. After the close, US safety regulators asked TSLA to provide information about their in-car cameras that are intended to monitor self-driving mode driver awareness.  Elsewhere, SBUX’s COO stepped down as the company eliminated that position in a restructuring. Finally, overnight, RIVN announced they are canceling its lowest-cost electric pickup truck.

In earnings news, after the close, AMAT, STNE, and SHG reported beating on both the revenue and earnings lines. Meanwhile, ROST and TKC both missed on revenue while beating on earnings.  So far this morning, VIPS beat on both lines.  Meanwhile, FL and BKE missed on revenue while beating on earnings.  DE was on the opposite side, posting a beat on revenue while substantially missing on earnings.

Overnight, Asian markets leaned heavily to the red side, with 3 exchanges managing to stay green by only a few hundredths of a percent.  Shenzhen (-1.27%), India (-1.10%) and New Zealand (-1.10%) led the region lower.  In Europe, stocks are mixed, but leaning heavily toward the downside at mid-day.  The FTSE (unchanged), DAX (-0.93%), and CAC (-0.53%) are leading the way lower.  However, a few smaller exchanges have managed to stay green (most notably Denmark +1.17%) in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.74% open, the SPY is implying a -0.97% open, and the QQQ implies a -1.09% open at this hour.  In addition, bond yields are up briskly to 2.95% and Oil (WTI) is down more than 2% in early trading.

There are no major economic news events scheduled for Friday.  The major earnings reports scheduled for the day include DE, FL, and VIPS before the open.  There are no major earnings reports scheduled for after the close.  However, also be aware that today is options expiration Friday.

Despite generally strong earnings, the combination of better than expected Weekly Jobless Claims numbers (which means fear of a larger than futures currently are expecting Fed rate hike) and fear over economic outlook have stocks poised to break a 4-week winning streak in all 3 major indices. We also are facing expirations day for over $2 trillion in options at the close today. So, beware some pinning in the afternoon. With that said, the trend remains bullish, but it appears SPY has failed a test (and DIA may be failing today) of its 200sma. The gist is that the bears have the wind at their backs this morning.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ACAD, AMKR, CIEN, CPB, DOV, FISV, KTOS, OKE, STLD, WTRG, XME, JNPR. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped lower between 0.60% and 1.00% in the major indices Wednesday.  Then after about an hour of sideways grind, they followed through to the downside to reach the lows of the day shortly after 11:45 am.  However, once again the dip buyers stepped in and the bulls began a rally that took us back to the highs of the day closing the morning gap in the large-caps) by 2:40 pm.  The Whipsaw took effect there and all 3 major indices started back down the rest of the day.  This action left all 3 major indices giving us gap-down, Doji / Spinning Top candles which indicate indecision in the current pullback.

On the day, SPY lost 0.71%, DIA lost 0.45%, and QQQ lost 1.14%.  Nine of the ten sectors were in the red with the Energy Sector managing green while Basic Materials, Technology, and Consumer Cyclicals led the way lower.  The VXX fell just under 1% to 21.10 and T2122 fell out of the overbought territory to 71.31.  10-year bond yields were significantly higher to 2.889%, while Oil (WTI) was up 1.36% to $87.71/barrel on the day.  Overall, a modestly red, indecisive day where all 3 major indices stayed above their respective T-lines (8ema).

In economic news, July Retail Sales came in dead flat, which was slightly below the +0.1% forecast and well below June’s +0.8%.  Meanwhile, June Business inventories came in as forecast at 1.4% (down from May’s 1.6%) and June Retail Inventories came in better than expected a 1.5% (versus 1.6% forecast).  The big surprise was EIA Oil inventories, which came in down 7.056mil barrels (versus -0.275mil forecast).  With this said, the big news was the July FOMC Minutes, which indicated meeting participants are in favor of sustained action to bring down inflation and stated that they saw a “neutral rate” (neither supportive nor restrictive of growth) to be around 2.25% – 2.50%.  Futures markets have now priced in a 50-basis-point hike for September (versus the last two meeting’s 0.75% hikes).

SNAP Case Study | Actual Trade

In earnings news, after the close, AMCR, BBWI, CSCO, KEYS, and SNPS all reported beating on both the revenue and earnings lines.  Meanwhile, ZTO missed on revenue while beating on earnings.  So far this morning, CLPBY, BJ, KSS, EL, NTES, SPTN, CSIQ, NICE, and FORTY all reported beats on both lines.  Meanwhile, TPR missed on revenue while beating on earnings.  However, it is worth noting that KSS, EL, and TPR all lowered forward guidance while reporting.

In stock news, HOG and union employees voted to ratify a 5-year contract that averts a potential strike.  The BBY meme stock fell sharply when Ryan Cohen (CEO of GME) filed with the SEC that he is beginning to sell his 9.5 million shares (total holdings) which is roughly 10% of the outstanding shares. Then, after the close, Investing.com reported that DEN is exploring a potential sale after it escaped bankruptcy in 2020. 

In Energy news, as mentioned above, US Oil Inventories fell sharply and unexpectedly this week.  The EIA went on to report that the cause was not domestic consumption nor a lack of supply.  The cause was a record amount of US oil exports of over 5 million barrels per day in the last week while WTI was selling at a steep discount to Brent.  Earlier in the day, a US Appeals Court overruled a lower court ruling that had halted the Biden Administrations’ effort to pause and reevaluate oil and gas leasing on Federal land and waters

Bloomberg reports that following the visit of Speaker of the House Pelosi and a second Congressional delegation the following week, formal trade talks between the US and Taiwan will now start in a long-promised effort to deepen ties. This comes amidst strenuous opposition from China. Elsewhere abroad, UK inflation came in at over 10% yesterday, giving them the highest inflation rate among the G-10. Then early this morning (US time), Turkey cut its interest rates to spur growth…even as the country faces an 80% inflation rate.

Overnight, Asian markets were nearly red across the board.  Only Singapore (+0.33%) showed any appreciable gains.  Meanwhile, Japan (-0.96%), Hong Kong (-0.80%), and Shenzhen (-0.62%) led the rest of the region lower.  In Europe, stocks are mixed at mid-day.  The FTSE (-0.04%), DAX (+0.67%), and CAC (+0.45%) are leading a slight lean to the upside.  However, 7 exchanges are showing red while 8 are showing green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a flat start to the day.  The DIA implies a +0.08% open, the SPY is implying a +0.08% open, and the QQQ implies a +0.03% open at this hour.  10-year bond yields are a bit lower to 2.868% and Oil (WTI) is up 1% to $88.98/barrel in early trading.

The major economic news events scheduled for Thursday include Weekly Initial Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), and July Existing Home Sales (10 am).  There are also two Fed speakers (George at 1:20 pm and Kashari at 1:45 pm).  The major earnings reports scheduled for the day include BJ, CSIQ, EL, KSS, NICE, SPTN, and TPR before the open.  Then, after the close, AMAT and ROST report.

In economic news later this week, on Friday there is no major economic news.  However, in earnings later this week, on Friday we get reports from DE, FL, and VIPS.

Earnings were surprisingly good (although some retail forward guidance was lowered) overnight and this morning. We still have Jobless Claims ahead, but at the moment it is looking like a modest (tentative?) bullish start to the day. That would make yesterday’s pullback exactly what the doctor ordered for a sustained rally. We can probably expect another low-volume, perhaps dead morning, as the rest continues. However, you can’t measure a river’s depth on average, meaning there will be pockets of extreme volatility in places like the meme stocks where BBBY is one to watch. The trend remains bullish, but remember the SPY and QQQ still have their 200sma overhead to deal with, and for that matter, DIA has not pulled away from its 200sma after breaking through.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: FUBO, VRM, C, GM, TOST, TTWO, GE, BAC, DM, WFC, WMT, UNP, TGT, RKT. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, markets gapped very modestly lower at the open and continued to follow through to the downside for the first hour. The exception to this was the DIA which was held up by WMT and HD and recovered the gap in the first 5 minutes.  From 10:30 am the bulls stepped into rally strongly at least refilling the gap and reaching the highs of the day at about 2:20 pm. However, at that point, we sold off hard for half of an hour, then waffled for 30 minutes before starting back up.  This is left us with modest gap-down indecisive (Spinning Top) type candles in the SPY and QQQ, as well as a breakout white candle with a significant upper wick in the DIA.

Seven of the ten sectors were in the green, with Consumer Defensive, Basic Materials, and Consumer Cyclicals out in front on strength of those WMT and HD earnings pops.  Healthcare and Technology were the biggest losing sectors Tuesday. SPY and DIA are testing their 200 smas and all 3 major indices are extended from their T-line.  The VXX is down one percent again to 21.29 and T2122 is telling us we remain well overbought at 96.97.  10-year bond yields are up into the 2.817% area and Oil (WTI) is down more than 3.27% to the $86.49/barrel area.

In economic news, we got mixed housing data.  July Building Permits came in a bit above forecast (1.674mil vs. 1.650mil estimated), but still below the June number (1.696mil).  However, July Housing Starts came in below forecast (1.446mil vs. 1.540mil average estimate).  Elsewhere, July Industrial Production came in significantly stronger than was expected (+0.6% vs +0.3% forecast and -0.2% in June).  Finally, at the close, President Biden signed the Inflation Reduction Act, setting a minimum 15% corporate tax rate, allowing Medicare to negotiate prices on 10 specific drugs, and setting up roughly $400 billion in money for automakers who produce “clean vehicles” while removing tax credits for consumers who buy such cars.

SNAP Case Study | Actual Trade

In earnings news, after the close, A and JKHY both reported beating on the revenue and earnings lines.  So far this morning, TECHY, ADI, and PFGC all reported beats on both the top and bottom lines.  Meanwhile, LOW and TJX missed on revenue while beating on earnings.  On the other side, CABGY beat revenue while missing on the earnings line.  However, TGT and ZIM both missed on both lines.

In stock news, on Tuesday AAPL started positioning for the recession by laying off 100 contract recruiters, thus signaling they will do far less hiring in the next six months.  For the second day in a row, BBBY traded in a massive range (an 87% range Tuesday) as retail, and especially meme stock traders, got excited by CME Chairman Ryan Cohen placed another bet on the retailer by buying deep OTM January 2023 call options (with an exercise price at least 3-4 times the stock’s current $20 price).  This wild action also caused BBBY stock trading to be halted several times Tuesday.

In supply chain news, President Biden’s Rail Emergency Board delivered its rail contract recommendations Tuesday. The board’s creation put a stop to potential national rail strikes and the delivery of their advice now starts a 30-day clock before any strikes can legally happen.  The White House expressed hope that these new recommendations will break the stalemate between CSX, UNP, BRKB’s BNSF, and over 115,000 rail workers.  In related news, UNP reported that Q3 freight volumes are up 2% from one year ago.  The rail company also reported less congestion at freight terminals (fewer delays) and improved staffing levels compared to earlier in 2022.

In mortgage news, the average 30-year fixed-rate, conforming loan interest rate fell slightly from 5.47% to 5.45%.  Nonetheless, applications for home purchase loans fell 1% for the week (18% lower than the same week in 2021). Refinance applications also fell 5% for the week (82% lower than a year ago).  This meant an overall 2% lower loan application volume for the week.

Overnight, Asian markets were mostly green.  Only South Korea (-0.67%) printed any significant red.  Meanwhile, Japan (+1.23%), Shenzhen (+1.00%), and India (+0.67%) led the region higher.  In Europe, stocks are leaning heavily to the red side at mid-day.  The FTSE (-0.40%), DAX (-1.39%), and CAC (-0.57%) are leading the region lower with only Denmark (+1.43%) showing any appreciable green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the morning.  The DIA implies a -0.55% open, the SPY is implying a -0.73% open, and the QQQ implies a -0.82% open at this hour.  However, 10-year bond yields are up sharply to 2.88% and Oil (WTI) is on the red side of flat in early trading this morning.

The major economic news events scheduled for Wednesday we get July Retail Sales (8:30 am), June Business Inventories and June Retail Inventories (10 am), EIA Crude Oil Inventories (10:30 am), a 20-year Bond Auction (1 pm), and July FOMC Minutes (2 pm).  Fed Member Bowman also speaks twice (9:30 am and 2:20 pm).  The major earnings reports scheduled for the day include ADI, LOW, PFGC, TGT, TCEHY, TJX, and ZIM, before the open.  Then, after the close, AMCR, BBWI, SQM, CSCO, KEYS, SNPS, and ZTO report.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and July Existing Home Sales are announced and Fed Member George speaks.  Finally, on Friday there is no major economic news.

In earnings later this week, on Thursday, we hear from BJ, CSIQ, EL, KSS, NICE, SPTN, TPR, AMAT, and ROST.  Finally, on Friday we get reports from DE, FL, and VIPS.

This morning, it looks like Mr. Market is looking to correct the bullish over-extended condition we find ourselves facing. A modest pullback would be very healthy for the rally, so don’t panic. However, it may also be a slow day until mid-afternoon as it seems like there is a lot of desire to read the minutes of the FOMC July meeting for clues on what will happen in September. The other story will be the bad report from TGT from its one-time hit taken from discounting to unload inventory. With that backdrop, we can expect another low-volume, perhaps dead morning, potentially followed by a volatile afternoon. Either way, the trend remains bullish, but remember those stocks are extended/overbought…so they need a pause/pullback.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: QID, SDS, GE, WFC, GM, C, FUBO. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped lower between a third and a half of a percent on Monday.  However, all 3 major indices had filled the gap by 10 am.   From there we saw a grind sideways most of the morning, followed by a mid-day rally and then a sideways grind most of the afternoon.  Only a slight selloff the last 30 minutes of the day kept all3 major indices from closing near their highs of the day.  This action has left us with gap-down strong white candles with a small upper wick.

Eight of the ten sectors are green, with Energy (-1.99%) by far the biggest loser and a virtual dead heat for the biggest gainer between Consumer Defensive and Utilities.  The VXX has fallen over 2.5% to 21.49 and markets remain overbought with T2122 being very high in its range at 97.37.  10-year bond yields are back down a bit to 2.799% as traders buy bonds and Oil (WTI) is off more than 3.42% to $88.95, which is actually a recovery from early losses of more than 5%.

In economic news, on Monday the NY Empire State Mfg. Index came in far below expectations Monday.  The reading was -31.30 while +5.5 was forecast and July’s reading was +11.10.  That 42-point fall was the second largest on record.  Elsewhere, US Egg commodity prices have fallen 37% since the end of July (after a 47% increase in July).  This will be seen by consumers over the next 30 days.  Overseas, Chinese July Industrial Output grew 3.8%, well below the +4.6% analysts expected and even slightly slower than June’s +3.9%.  Meanwhile, Chinese July Retail Sales rose 2.7% year-on-year, far below the +5.0% forecast and June’s +3.1% number.  For that reason, China’s Central Bank cut both the 7-year and 10-year lending rates by 10 basis points

SNAP Case Study | Actual Trade

After the close, TME, GSM, NU, and FN reported beating on both the top and bottom lines.  However, COMP missed on both the revenue and earnings lines.  FN was up as much as 16% in post-market trading after their beat and an increase in guidance.  Meanwhile, NU was up 11% and GSM was up 9% in post-market trade.

In stock news, after the close, BRKB reported that it has tripled its stake in ALLY while also shedding its VZ holdings.  Elsewhere, AAL announced that it is cutting 16% of its November flight schedule (31,000 flights) well above the 2% of flights they are canceling for September and October.  Meanwhile, TWTR was ordered by the judge to give Elon Musk access to a former TWTR executive’s documents related to the court case over closing Musk’s acquisition of TWTR.  However, the same judge ruled that TWTR only needs to give Musk the data from one “bot checker.”  Lastly, Bloomberg reports that WFC plans to retreat from the home mortgage business.  WFC has dominated that business (issuing one-third of all US mortgages) since other banks backed off of that business during the 2008 financial crisis.  WFC issued $205 billion in new home loans in 2021.

In Energy news, on Monday, crude oil settled at a 6.5-month low on weak demand out of China, Saudi Aramco saying it was ready to ramp up production, and fear that Iran will comply with the 3 remaining stumbling blocks (which would allow Iran to start exporting oil again) Monday night.  Elsewhere, after the close, Reuters reported that energy companies are gearing up to capture some of the $430 billion in US Tax Credits from the Inflation Reduction Act by implementing carbon capture projects (pumping carbon captured from operations into wells).  CVX, XOM, SLB, ET, and TALO are all listed by Reuters as companies planning such projects.  Finally, Bloomberg reports that BP will sell off all of its Mexican oil assets as it refocuses on renewable energy.

President Biden will sign into law today a bill that eliminates the tax credit for electric and hybrid vehicles.  An automotive trade group told Bloomberg that this will eliminate customer tax credits for the purchase of 70% of electric and hybrid vehicles.  However, the same law will give tens of billions of dollars in grants, loans, and tax credits to automakers who build cleaner vehicles.  Obviously, major auto companies like GM, F, TM, HMC, and STLA are in the best position to gain from the incentives, even as the industry customers lose a reason to buy cleaner vehicles.

Overnight, Asian markets were mostly green on modest moves.  The only significant loss was in Hong Kong (-1.05%).  On the other side, Malaysia (+0.98%), India (+0.72%), and Australia (+0.58%) led the gains.  In Europe, stocks are leaning heavily to the upside at mid-day.  The FTSE (+0.64%), DAX (+0.67%), and CAC (+0.40%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.06% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.12% open at this hour.  10-year bond yields are up slightly to 2.81% and Oil (WTI) is flat in early afternoon trading.

The major economic news events scheduled for Tuesday include July Building Permits and July Housing Starts (both at 8:30 am), July Industrial Production (9:15 am), and API Weekly Crude Oil Stock (4:30 pm).  The major earnings reports scheduled for the day include ESLT, HD, SE, and WMT before the open.  Then, after the close, A and JKHY report.

So far this morning, WMT and HD have both reported beats on both lines.  Meanwhile, SE beat on revenue while missing on earnings.  However, ESLT missed on both the top and bottom lines. Both WMT and HD stood by their previous forward guidance during their reports.

In economic news later this week, on Wednesday we get July Retail Sales, June Business Inventories, June Retail Inventories, EIA Crude Oil Inventories, a 20-year Bond Auction, and Fed Member Bowman speaks twice.  Then Thursday Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and July Existing Home Sales are announced and Fed Member George speaks.  Finally, on Friday there is no major economic news.

In earnings later this week, on Wednesday, ADI, LOW, PFGC, TGT, TJX, ZIM, AMCR, BBWI, SQM, CSCO, KEYS, SNPS, and ZTO report.  Then Thursday, we hear from BJ, CSIQ, EL, KSS, NICE, SPTN, TPR, AMAT, and ROST.  Finally, on Friday we get reports from DE, FL, and VIPS.

Coming off Monday’s nice showing, markets seem to be pausing this morning. Or, perhaps, traders are just waiting for more clues as to future Fed rate hike sizes. Regardless, we get housing data later today and that industry’s trade group is already making the morning show rounds fretting about a “housing recession” caused by increasing loan rates and consumer fears over the future. (They conveniently forget about the long run of boon years when rates were historically low.) At any rate, the bulls could certainly use a little pause to rest following the strong moves made in the last week. With that backdrop, we can expect another low-volume day. Overall the trend remains bullish, but remember those stocks are extended/overbought…do not chase.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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