The major averages emerging from a losing session, with rising Middle East tensions dampening risk appetite and investor enthusiasm for the new trading period. Stock futures declined on Wednesday morning as traders prepared for potential further losses at the start of October. Technology stocks were the worst performers on Tuesday. Investors are looking forward to gaining insights into private payrolls through ADP’s Employment Survey. Additionally, Friday’s nonfarm payrolls report is anticipated to significantly influence market direction and the Federal Reserve’s upcoming rate decisions as it begins its rate-cutting cycle.
European stocks edged slightly higher as investors tried to overlook the escalating tensions in the Middle East. The oil and gas sector saw a notable increase of 2.42%, while travel and leisure stocks dipped by 0.25% due to airlines diverting flights away from the conflict zone. Defense companies experienced gains amid rising conflict risks. Despite reporting revenues and profits that exceeded expectations for the first half, shares of British sports retailer JD Sports fell by 3.5%.
Hong Kong’s Hang Seng index surged over 6%, reaching a 22-month high and marking its sixth consecutive day of gains, driven by recent stimulus policies. Meanwhile, markets in mainland China were closed for the Golden Week holiday and will remain so for the rest of the week. In contrast, Australia’s S&P/ASX 200 dipped slightly by 0.13% to close at 8,198.2. South Korea’s Kospi experienced a more significant decline of 1.22%, ending at 2,561.69, while the small-cap Kosdaq slipped 0.23% to 762.13. Japan’s Nikkei 225 also saw a notable drop of 2.18%.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include CAG & RPM. After the bell reports include LEVI.
News & Technicals’
Stephen Roach, a senior fellow at Yale Law School’s Paul Tsai China Center, warns that markets are at risk of being “whipsawed” due to the combination of regional conflict in the Middle East and rising unemployment in the United States. The situation in the Middle East intensified on Tuesday when Iran launched a ballistic missile attack on Israel following the killing of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon. Roach noted that the markets are likely to be uncertain about their direction, as the conflicts in the Middle East contribute to inflationary pressures just as global central banks are beginning to ease monetary policy.
The strike affecting ports along the East and Gulf coast could drive up prices for food, automobiles, and various other consumer goods, though the overall economic impact is expected to be modest. Key industries are likely to face significant challenges including coal, energy, and agricultural products. However, there are potential mitigations to the strike’s impact. West Coast ports are expected to absorb some of the freight that would typically be handled by the eastern ports. Additionally, some companies had foreseen the disruption and stockpiled goods in advance.
Nike has withdrawn its full-year guidance and announced the postponement of its investor day, originally scheduled for November. Despite beating earnings expectations by 18 cents, the company fell short on revenue as it focuses on refining its product assortment and revamping its innovation strategy. Additionally, Nike is preparing for a leadership transition with a new CEO set to take the helm.
In a Tuesday interview with CNBC’s Jim Cramer, Chipotle CSO Jack Hartung discussed the company’s business in California following a price increase in April. Hartung noted that there is “macro resistance” from consumers to inflation across the industry. He emphasized that the situation in California is more about broader economic impacts rather than specific resistance to Chipotle’s price hike. Hartung pointed out that restaurant transactions are down across the board, indicating a wider trend affecting the entire restaurant industry.
Clearly the rising Middle East tensions have added a dose of uncertainty and volatility to the price action but so far, the bullish patterns in the DIA, SPY and QQQ remain intact. In truth, yesterday pullback relieved a lot of overbought pressure and may well prove to have been a healthy relief. Remember, it’s the follow-though that matters and with the sharply declining market breadth that could be tough to achieve. Stick with the trend but be ready with a plan to protect your capital if or when Israel retaliates.
On the first trading day of October aa the fourth quarter begins, stock futures showed mixed results following a surprisingly strong performance in September. The S&P 500 and the Dow both reached closing records in the previous session, buoyed by Federal Reserve Chair Jerome Powell’s statement that the central bank is “not on any preset course” regarding future rate policy decisions. Investors are also keeping an eye on upcoming economic data, with the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey for August set to be released on Tuesday morning, along with the S&P Global U.S. Manufacturing Purchasing Managers’ Index and the ISM Manufacturing PMI readings.
European stocks began October on a positive note, buoyed by the news that euro zone inflation has fallen below 2% for the first time since mid-2021, according to preliminary data released on Tuesday. Despite this overall positive trend, Renault shares dropped by 3.6%, placing them at the bottom of France’s CAC 40 index. This decline extends the losses seen in the auto sector from the previous session, reflecting ongoing industry pressures. Additionally, German inflation data released on Monday indicated a decrease in the consumer price index to 1.8% in September.
The financial markets in South Korea, Hong Kong, and mainland China are closed due to a public holiday. Mainland China will remain closed for the rest of the week in observance of the Golden Week holiday. Meanwhile, in Japan, business optimism among large manufacturers has remained steady, showing no change. However, sentiment among large non-manufacturers has seen a slight improvement, rising to +34 from +33 in the third quarter.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include AYI, MKC, PAYX, & UNFI. After the bell reports include CLAM, LW, NKE, & RGP.
News & Technicals’
Federal Reserve Chair Jerome Powell stated on Monday that the recent half percentage point interest rate cut should not be seen as an indication that future rate adjustments will be equally aggressive. Speaking to the National Association for Business Economics, Powell emphasized that the Fed is “not on any preset course” regarding monetary policy. He expressed confidence in the strength of the economy and anticipated that inflation would continue to decrease.
Between 2014 and 2015, the Chinese stock market experienced a dramatic surge, doubling in value over six months as leverage increased significantly, noted Aaron Costello, regional head for Asia at Cambridge Associates. However, he pointed out on Monday that the current market conditions are different, with less dramatic gains and lower leverage levels. Costello reassured that “we’re not in the danger zone yet,” but he also highlighted the uncertainty surrounding whether economic growth will be robust enough to sustain a long-term market rally.
CVS Health’s board has enlisted advisors to conduct a strategic review of its business amidst potential activist pressure and a significantly depressed stock price, according to sources familiar with the situation. This review has been in progress for some time, though it remains uncertain what actions, if any, will be taken. Following the news, CVS shares saw a rise of approximately 2.5% in after-hours trading on Monday.
Starting at 12:01 a.m. ET on October 1, approximately 50,000 longshoremen from the International Longshoremen’s Association (ILA) began a strike at East Coast and Gulf Coast ports, stretching from New England to Texas. This marks the union’s first strike since 1977, following unsuccessful contract negotiations with port ownership. The strike affects a significant portion of U.S. trade, as 43%-49% of all U.S. imports and billions of dollars in monthly trade pass through these ports. The ILA, the largest maritime union in North America, rejected a proposal from the port management group USMX on Monday, which included a nearly 50% wage increase over six years.
As the fourth quarter begins traders will be hoping for a follow-through to the sharp afternoon rally that occurred yesterday that squeaked out new records in Dow and SP-500. Market breadth, however, continued to decline with the indexes remaining in a choppy consolidating condition. Keep in mind that the big bank reports don’t begin until Oct. 11th so as we wait, don’t be surprised to see choppy light volume conditions persist. Middle eastern tensions continue to grow the longshoreman strike adds another layer of uncertainty for the traders to digest.
Markets were flat most of the day with mid-afternoon volatility and a strong rally into the close. SPY opened 0.16% lower, DIA opened down 0.10%, and QQQ gapped down 0.21%. From there, all three major index ETFs meandered sideways in a tight range until 2 p.m. At that point, all three sold off for 20 minutes, rallied back for 25 minutes, and then paused for 35 minutes. Finally, the last 25 minutes of the day was a sharp rally into the close. This action gave us white-bodied candles with significant lower wicks. SPY printed a Bullish Engulfing signal and closed at another all-time high close after retesting (and passing the test of) its T-line (8ema) earlier in the day. DIA gave us a white-bodied Hammer that also retested its T-line and closed at another all-time high close. Meanwhile, QQQ also retested (and passed the test of) its T-line while printing a white-bodied big-bodied Hammer type. The happened on well-below-average volume in the QQQ, slightly below-average volume in SPY, and just above-average volume in the DIA.
On the day, seven of the 10 sectors were green again with Healthcare (+0.42%) out in front, leading the rest of the market higher. On the other side, Basic Materials (-0.57%) and Consumer Cyclical (-0.53%) were the laggard sectors. Meanwhile, SPY gained 0.42%, DIA gained a slim 0.04%, and QQQ gained 0.27%. VXX dropped 2.35% to end at 49.54 and T2122 fell back to the bottom half of its overbought territory at 83.21. At the same time, 10-Year bond yields rose to close at 3.785% while Oil (WTI) remained unchanged to close at $68.19 per barrel. So, for the most part, the first 4.5 hours of the day were a boring market. Then Fed Chair Powell spoke. Initially, the market sold on Powell telling us that more, smaller cuts lay ahead. (Coming into Powell’s speech, 53% of Fed Fund Futures bets expected a half-percent cut in November. Afterward, only 36% expect the half-point cut.) However, the Bulls stepped in to buy that dip. This may have been a reaction to Powell saying the economy was fine, or it may have been a month-end or quarter-end push. Regardless of the cause, stocks rallied sharply the last 20 minutes with two of three major index ETFs closing at new all-time high closes.
The major economic news scheduled for Monday is limited to September Chicago PMI. This came in better than expected at 46.6 (compared to a forecast and August value of 46.1).
In Fed news, Atlanta Fed President Bostic told Reuters he was open to another half-percent cut in November if upcoming data shows job growth slowing. Bostic said, “A surprise to the weak side …. would pull me much further into really needing another dramatic move.” He continued, “If the story is that inflation is continuing its drop and the labor market is staying strong, I think we have the luxury of being a bit more patient with rate cuts.” … “If, on the other hand, the labor market comes in much weaker, I think that would add urgency to this (rate cutting cycle).” Later, Chicago Fed President Goolsbee (in an interview with Fox Business) was even more definite in saying he feels quarter-point cuts are the way to go. Goolsbee said, (With regard to monetary policy) “This is a process, over a year or more, that we’re trying to get the rates down to normal.” He continued regarding the pace of cuts, saying, “(The Fed Funds rate) has got to come down a lot more than 25 basis points over the next 12 months. It’s going to be a lot of cuts.”
However, the headline speaker Monday was Fed Chair Powell, who spoke to the National Assn. for Business Economics. Powell said, “Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance.” He continued, “The path of future interest rates isn’t on any preset course. … It will continue to make our decisions meeting by meeting.” Related to current inflation, he said, “Disinflation has been broad based, and recent data indicate further progress toward a sustained return to 2 percent.” Regarding the strength of the economy in terms of Gross Domestic Income versus GDP, Powell said, “That’s been a downside risk that we’ve been monitoring … but there’s now no gap between the two. … That, I would say, removes a downside risk to the economy.” Powell’s most widely reported remarks were “This is not a committee that feels like it is in a hurry to cut rates quickly. … We will do what it takes in terms of the speed with which we move.” In discussion, Powell indicated that the FOMC’s base case is for two additional quarter-point cuts for the remainder of 2024.
In stock news, on Monday, STLA cut its 2024 profit forecast and warned it would burn through more cash that previously expected. The company cited poor US sales and offering bigger discounts to revive US marketshare. STLA said it now expects a negative cash flow of between $5.58 billion and $11.17 billion instead of positive cash flow. At the same time, TPG announced it had acquired a minority stake in investment advisory Creative Planning for $2 billion. Later, MMC announced it agreed to acquire private insurance brokerage McGriff Insurance Services for $7.75 billion. At the same time, Reuters reported that PFE will sell 640 million shares in UK consumer healthcare company Haleon for about $3.25 billion.
Elsewhere, Reuters reported that VZ had sold the right to lease, operate, and manage 6.339 mobile phone towers covering 50 states and Washington DC to Vertical Bridge. The deal includes $2.8 billion in cash up front. The company is expected to lease the towers back to VZ for 10 years with an option to extend up to 50 years. At the same time, the Wall Street Journal reported that PEP is in advanced talks to buy private Siete Foods for more than $1 billion. Later, the Teamster Union announced it had signed a tentative agreement with HTZ covering nearly 3k members. (Union members had voted to strike if a deal was not reached Monday.) At the same time, Reuters exclusively reported that CVS is considering strategic options including the break-up of the company.
In stock legal and governmental news, on Monday, Russia fined GOOGL $38k (which I have a feeling will cost GOOGL more than that just to pay that paltry amount) for not removing content Russia deems illegal. Later, a trial against ABT, RBGPF (Reckitt Benckiser), and St. Louis Children’s Hospital began Monday with jury selection. The companies are being sued over severe intestinal illness that the suit alleges a baby got from premature infant formula he was given after birth. (There are nearly 1,000 similar cases pending nationwide.) At the same time, Epic Games filed suit against AAPL and Korea’s Samsung, alleging the pair conspired to protect the Google Play Store from competition. Later, the US Dept. of Commerce unveiled a new rule that could make it easier to ship AI chips to data centers in the Middle East. NVDA is the primary winner from the new rule, but AMD and to a lesser extent INTC could receive some benefit as well. At the same time, the NHTSA announced GM will pay a $1.5 million fine for failing to disclose details of an October 2023 crash involving one of its Cruise self-driving taxis.
Elsewhere, BMY won the dismissal of a $6.4 billion lawsuit brought by CELG shareholders who had claimed that by delaying federal approval of the cancer drug Breyanzi, BMY had been able to acquire CELG at an artificially low price. At the same time, the FCC reached a $31.5 million settlement with TMUS over issued related to significant data breaches of TMUS systems over 3 years. Later, SEC filings showed that XOM, CVX, and COP paid $42 billion to foreign governments last year for oil and gas extraction rights. This was about eight times what they paid the US government in 2023. At the same time, the NHTSA announced that STLA is recalling 194k Jeep plug-in hybrids over fire risk following 13 fire reports. Later, CA Governor Newsom vetoed an AI safety bill after strong opposition from GOOGL, META, MSFT and others. (TSLA had been a proponent for the bill.) At the same time, EBAY won the dismissal of a suit brought by the US Dept. of Justice. The suit alleged EBAY violated environmental laws by allowing hundreds of thousands of polluting and toxic products to be shipped to the US. The judge ruled Section 230 of the Communications Decency Act protects EBAY from any liability over user content and the company had not materially contributed to the products.
Meanwhile, the FCC announced it is investigating VZ for a service outage that affected thousands of user and left some in “SOS mode.” (There were over 105k new outage reports at the peak and 30k new outage reports at of 5 p.m. Eastern.) At the same time, the US Dept. of Justice and SEC announced TD will pay more than $20 million to settle charges of US Treasury market manipulations using “Spoof” orders. Later a federal judge ruled AMGN must face a class-action suit trial for waiting too long to tell shareholders it may owe $10.7 billion in unpaid taxes due to underreporting income for six years. At the same time, a federal just dismissed a suit against TSLA and its CEO Musk, that alleged the company defrauded then by overstating the effectiveness and safety of the company’s self-driving technology. (Even though he and the company had clearly lied about that for years, the judge ruled the plaintiffs had not proven they had directly said this would boost the stock price.) Later, WMT announced that Mexico’s antitrust regulator will rule on the company’s liability for antitrust pricing and terms imposed on distributors and suppliers in the next few days.
In miscellaneous news, on Monday, the Dept. of Energy bought 6 million barrels of oil for the Strategic Petroleum Reserve for $68.50/barrel. The oil will be delivered at a rate of 1.5 million barrels per month from February – May 2025. Elsewhere, analysts now estimate the financial cost of Hurricane Helene may be $160 billion (well above the $95 billion to $110 billion estimated prior to the storm). Meanwhile, Libyan oil production is set to resume in days after a political deal approved the appointment of an interim Libyan Central Bank Governor. (This comes after a month-long shutdown of Libyan oil production.) Finally, the East Coast and Gulf Coast port strike began at midnight. (For reference, it typically takes three days to recover for each day of shutdown.)
In Middle East news, Israel began what it says is a “limited ground operation” invasion of Lebanon Monday evening. The IDF said it has no plans for long-term occupation of Lebanon, but (as makes operational sense) gave no indication of goals or timeline. At the same time, Israel also began bombing the southern side of Beirut. This all comes after more than a million Lebanese have become refugees, 1,700 have been killed, and multiple thousands of casualties have been reported in the last two weeks.
Overnight, Asian markets were mixed but leaned toward the green even as Chinese markets are closed the rest of the week for their national holiday. Japan (+1.93%) and Thailand (+1.09%) led the gainers while Australia (-0.74%) paced the losses. In Europe, we see mostly green with only three of 14 bourses in the red at midday. The CAC (+0.02%), DAX (+0.45%), and FTSE (+0.46%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed open. DIA implies a -0.20% open, the SPY is implying a +0.01% open, and QQQ implies a +0.17% open at this hour. At the same time, 10-Year bond yields are down to 3.743% and Oil (WTI) is oddly (given the Israeli invasion of Lebanon) down 0.75% to $67.69 per barrel in early trading.
The major economic news scheduled for Tuesday includes September S&P Global Mfg. PMI (9:45 a.m.), August Construction Spending, September ISM Mfg. PMI, Sept. ISM Mfg. Employment, September ISM Mfg. PMI Price Index, and August JOLTs Job Openings (all at 10 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.). We also hear from Fed Member Bostic twice (11 a.m. and 6:15 p.m.). The major earnings reports scheduled for before the open are limited to AYI, MKC, PAYX, and UNFI. However, after the close, CALM, LW, and NKE report.
In economic news later this week, on Wednesday, September ADP Nonfarm Employment Change, and EIA Weekly Crude Oil Inventories are reported. We also hear from Fed Governor Bowman at 11 a.m. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September S&P Global Services PMI, September S&P Global Composite PMI, August Factory Orders, September ISM Non-Mfg. Employment, September ISM Non-Mfg. PMI, September ISM Non-Mfg. PMI Price Index, and Fed Balance Sheet. We also hear from Fed member Bostic at 10:40 a.m. Finally, on Friday, September Avg. Hourly Earnings, September Nonfarm Payrolls, September Participation Rate, September Private Nonfarm Payrolls, and September Unemployment Rate. We also hear from Fed member Williams.
In terms of earnings reports later this week, on Wednesday, CAG, RPM, and LEVI report. On Thursday, we hear from STZ. However, on Friday, there are no earnings reports scheduled.
So far this morning, AYI, MKC, and UNFI all reported beats on both the revenue and earnings lines.
With that background, markets look indecisive so fat in the premarket. All three major index ETFs opened the early session flat and have printed mostly wick since that point. All three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the major index ETFs are extended above its T-line (8ema). However, the T2122 indicator is still in the bottom of its overbought range. So, markets have room to run either direction, but the Bears have just a bit more slack to work with today if they can find momentum. With regard to those 10 big dog tickers, six of the 10 are in the green. GOOGL (+1.32%) leads the gainers while AAPL (-1.26%) paces the losses. It is worth noting that the biggest dog, NVDA (+0.24%) has traded only a little more than 1.5 times the dollar-volume as TSLA (+0.37%). This is typically a factor of at least two to three.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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.
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Friday saw some modest divergence in the markets. SPY opened 0.20% higher, DIA gapped up 0.25%, and QQQ opened up 0.21%. However, from that open, QQQ sold off in a very slow manner the rest of the day. It could almost have been called sideway the last couple of hours. Meanwhile, DIA rallied significantly until 11:30 a.m. before reversing and selling off slowly the rest of the day. For its part, after the open, SPY ground sideway until 11 a.m. and then sold off very slowly the rest of the day. This action gave us a white-bodied Shooting Star type candle in the DIA, a black-bodied, fat-body, Spinning Top in the SPY, and a black-bodied candle in the QQQ. This happened on average volume in the DIA and well-below-average volume in the SPY and QQQ.
On the day, eight of the 10 sectors were green again with Energy (+1.60%) far out in front, leading the rest of the market higher. On the other side, Technology (-0.56%) and Basic Materials (-0.28%) were the laggard sectors. At the same time, SPY lost 0.16%, DIA gained 0.31%, and QQQ lost 0.55%. VXX popped higher to close at 50.73 and T2122 climbed to the middle of its overbought territory at 90.32. At the same time, 10-Year bond yields fell to close at 3.754% while Oil (WTI) climbed 1.34% to close at $68.58 per barrel. So, taken as a whole, the three major index ETFs held their serve, staying in the existing trend, which are all bullish. DIA did fail a consolidation breakout attempt while QQQ printed a second gap-up, black-body candle. Meanwhile, SPY continued its melt higher ending not far above where it opened Monday.
The major economic news scheduled for Friday included the August Core PCE Price Index (month-on-month), which came in lower than expected at 0.1% (compared to a forecast and July reading of 0.2%). On an annual basis, August Core PCE Price Index (year-on-year), was up a tick as expected at 2.7% (versus a 2.7% forecast and a tick above July’s 2.6% reading). At the same time, the August PCE Price Index (month-on-month) was down and lower than predicted at 0.1% (compared to a forecast and July value of 0.2%). On the annual basis, the August PCE Price Index (year-on-year) was down significantly to 2.2% (from 2.3% forecast and down sharply from July’s 2.5%). At the same time, August Personal Spending (month-on-month) was also down sharply to 0.2% (versus a forecast of 0.3% and down sharply from July’s 0.5%). Meanwhile, the Preliminary August Goods Trade Balance was better than anticipated at -$94.26 billion (compared to a forecast of $100.60 billion and the July reading of -$102.84 billion). At the same time, Preliminary August Retail Inventories were up less than expected at +0.4% (versus the July +0.5% value). Later, Michigan Consumer Sentiment was a bit higher at 70.1 (compared to a 69.0 forecast and August reading). At the same time, Michigan Consumer Expectations were also higher at 74.4 (versus the 73.0 forecast and August value). In terms of future view, the Michigan 1-Year Inflation Expectations were flat at 2.7% (measured against a 2.7% forecast and August reading). In addition, Michigan 5-Year Inflation Expectations were also flat at 3.1% (compared to the 3.1% forecast and August value).
In stock news, on Friday, VLKAF (Volkswagen) cut its 2024 outlook for the second time in less than three months. The company also lowered its profit margin forecast to around 5.6% (down from a 6.5%-7.0% range set three months prior). Later, C warned employees and contractors about tighter scrutiny as it suspect fraud and unethical behavior by both groups in terms of what the company is billed. At the same time, Reuters reported that MS’s private equity unit is considering the sale of its HVAC firm Sila for about $1.5 billion. Later, Reuters reported growing backlogs of rail shipments to Mexico, just as US East Coast and Gulf Coast ports may shutter. At this point, UNP and BRKB-owned BNSF railways have stopped issuing new permits (orders) for railcar grain shipments to Mexico due to congestion in the Mexican rail system.
Elsewhere, after the close, CNBC reported that SATS is very near a deal to sell its Dish Network to DirecTV (which is owned by T and TPG). This comes as SATS will face a $1.98 billion debt payment in November and had just $521 million in cash on-hand as of June 30. The deal value is rumored to be in the $9 billion neighborhood. Later, Bloomberg reported that 16 European banks and payment processors are launching an alternative to V and MA called Wero.
In stock legal and governmental news, on Friday, the SEC announced that SAVA had agreed to pay a $40 million settlement over negligence-based non-disclosures. Later, the UK anti-trust regulator approved AMZN’s AI partnership with Anthropic and said it will not refer the matter for more investigation. At the same time, a federal judge ruled AAPL must face a lawsuit over its devices violating user privacy. The judge did throw out claims made based on the “Allow Apps to Request to Track” setting, but let claims related to the “Share Analytics” setting to proceed to trial. Later, NHTSA announced that TM will recall over 42k vehicles over the loss of power brake assist the extended the braking distance of the vehicles. At the same time, the NHTSA also announced that MBGAF (Mercedes Benz) is recalling 27k vehicles due to the risk of the engine control software causing the engine to overheat.
Elsewhere, the NHTSA announced that MZDAF (Mazda) is recalling 77k SUVs over a software error that could cause front airbags to deploy with excessive force. At the same time, Chinese authorities discouraged companies from buying NVDA AI chips as Beijing tried to boost its own Chinese chipmakers. (However, this is mostly a PR move at this point since there are no known Chinese-made AI chips anywhere near as powerful as the limited ones NVDA is allowed to sell China.) Later, the Dept. of Trans. fined ACDVF (Air Canada) $250k for operating flights in 2022 and 2023 over prohibited Iraqi airspace. At the same time, the EU fined META $101.5 million for storing user passwords with no protection or encryption. Later, a US District judge announced he will hold a hearing on Oct. 11 to receive the objections of crash victim’s families to the BA plea deal. At the same time, the FDA approved a GEHC diagnostic drug used for the detection of heart disease. On Saturday, TKO agreed to pay $375 million to settle a class-action lawsuit alleging the company had colluded with other martial arts groups to tamp-down the compensation of fighters.
In miscellaneous news, on Friday, there were 4.6 million customers without power in the Southeast US following Hurricane Helene. (At least 64 people were also killed.) Meanwhile, the UD Dept. of Commerce said US car sales could fall about 26k per year under proposed rules barring Chinese vehicles over software internet connection (sending data to China). For reference, US auto sales were 15.5 million in 2023 and were up about 3.5% in the first half of 2024.
In Middle East news, Israel continued its attacks on Lebanon Friday with airstrikes that leveled six hi-rise apartment buildings. The IDF said the target of the attack was the leader of Hezbollah. However, they also destroyed a very densely-populated Beirut neighborhood. In addition, many hundreds of thousands of Lebanese have fled as refugees to other cities and countries as well as 250k that are now living on the streets to avoid being near buildings. Meanwhile, Israeli PM Netanyahu told the UN General Assembly that the Lebanese people were to blame for forcing Israel to attack and kill them. He went on to say that their attacks will continue. Meanwhile, the IDF also called up reserves to the Lebanese border and is currently practicing for another ground invasion of Lebanon.
On Saturday, Hezbollah confirmed their leader Nasrallah had, in fact, been killed. (It is worth noting Israel also assassinated his predecessor in 1992.) In addition, Lebanon reported nearly 1000 people have been killed and several thousand others wounded by Israeli strikes in the last week. Various EU countries condemned the Israeli attacks and called for an end to hostilities by both sides. Meanwhile, Israel rejected a cease-fire deal put forth by the US in the same way it rejected a Gaza cease-fire. On Sunday, Israel increased its bombing (terror?) campaign with more strikes in Lebanon, the West Bank (Palestinian), and also expanded with strikes on Houthi Rebels in Yemen. Israel also ramped up its rhetoric threatening Iran over the weekend. The overall point, is that Israel seems to be intent on all-out regional war (with US arms and support in its back pocket). So, the region as well as Middle Eastern oil, gas, and shipping routes are under greater threat as a broader regional conflict seems much more likely than it was a week ago.
Overnight, Asian markets were very mixed with five of the 12 exchanges in the region showing green. However, massive Chinese moves of Shenzhen (+10.67%), Shanghai (+8.06%), and Hong Kong (+2.43%) led the region higher as that country reacts to more stimulus. On the other side, Japan (-4.80%), Taiwan (-2.62%), and South Korea (-2.13%) paced the losses. In Europe, with the sole exception of Norway (+0.07%) we see red across the board at midday. The CAC (-1.62%), DAX(-0.63%), and FTSE (-0.76%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward modestly red start to the day. The DIA implies a -0.14% open, the SPY is implying a -0.21% open, and the QQQ implies a -0.29% open at this hour. At the same time, 10-Year bond yields are up to 3.768% and Oil (WTI) is down 0.78% to $67.66 per barrel in early trading.
The major economic news scheduled for Monday is limited to September Chicago PMI. However, we also hear from Fed Governor Bowman (8:50 a.m.) and Fed Chair Powell (1:55 p.m.). The major earnings reports scheduled for before the open Monday are limited to CCL. However, after the close, there are no major reports scheduled.
In geopolitical news, Reuters reported Thursday that a senior Pentagon official said that China’s newest nuclear-powered submarine sank earlier this year. Apparently, the first-in-class Chinese nuclear attack sub sank alongside its pier sometime between May and June.
In economic news later this week, on Tuesday we get September S&P Global Mfg. PMI, August Construction Spending, September ISM Mfg. Employment, September ISM Mfg. PMI, September ISM Mfg. PMI Price Index, August JOLTs Job Openings, and API Weekly Crude Oil Stocks. We also hear from Fed Member Bostic twice (11 a.m. and 6:15 p.m.). Then Wednesday, September ADP Nonfarm Employment Change, and EIA Weekly Crude Oil Inventories are reported. We also hear from Fed Governor Bowman at 11 a.m. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September S&P Global Services PMI, September S&P Global Composite PMI, August Factory Orders, September ISM Non-Mfg. Employment, September ISM Non-Mfg. PMI, September ISM Non-Mfg. PMI Price Index, and Fed Balance Sheet. We also hear from Fed member Bostic at 10:40 a.m. Finally, on Friday, September Avg. Hourly Earnings, September Nonfarm Payrolls, September Participation Rate, September Private Nonfarm Payrolls, and September Unemployment Rate. We also hear from Fed member Williams.
In terms of earnings reports later this week, on Tuesday, we hear from AYI, MKC, PAYX, UNFI, CALM, LW, and NKE. Then Wednesday, CAG, RPM, and LEVI report. On Thursday, we hear from STZ. However, on Friday, there are no earnings reports scheduled.
In overnight news, DirecTV (owned by T and TPG) finally agreed to acquire Dish Network (owned by SATS). The move creates a network with 20 million subscribers. As part of the deal, DirecTV will assume $9.75 billion in debt. However, Dish shareholders will need to agree to a $1.57 billion haircut on that debt. As part of the deal, T will sell its 70% stake in DirecTV to TPG for $7.6 billion. (T originally bought its share of DirecTV for a little over $14 billion.) Elsewhere, more stimulus in China spiked global iron ore by 11% as Chinese cities agreed to ease home-buying restrictions.
With that background, it looks like the Bears are pushing this morning. All three major index ETFs opened the premarket flat, but have traded lower, printing black-body candles with little wick. DIA has the smallest candle in the early session. All three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the major index ETFs are extended above its T-line (8ema). Still, the T2122 indicator is back up in the middle of its overbought range. So, markets have room to run either direction, but the Bears have more slack to work with today if they can find momentum. With regard to those 10 big dog tickers, nine of the 10 are in the red. It is worth noting that the biggest dog, NVDA (-2.87%) leads the losses and has more than twice the dollar-volume of the next closest, which is TSLA (-0.61%).
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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
U.S. stock futures remained flat as the last day of September began, following three consecutive weeks of gains for the major averages. Despite a challenging start to September, historically the weakest month for the stock market, markets rebounded as the month progressed, buoyed by the Federal Reserve’s interest rate cuts. Investors are now looking ahead to a significant test later in the week with the release of September’s jobs report on Friday. Additionally, Carnival is set to announce its quarterly earnings on Monday morning, adding to the week’s financial highlights.
European markets began the week and the final trading session of September on a negative note, with auto stocks leading the decline, down 3.8%. Stellantis, listed in Milan, saw its shares plummet by 13.5% after the automaker revised its 2024 annual guidance downward due to worsening global industry conditions. Similarly, France’s Renault experienced a drop of over 6% on Monday, while German automakers Porsche and Volkswagen both fell by around 3%.
China’s CSI 300 index experienced a significant surge, rallying by 8.48% to close at 4,017.85. This impressive performance was driven by strong gains in healthcare and tech stocks, marking a nine-day winning streak. It was the index’s best day since September 2008 and its highest level since August 2023. In contrast, Japan’s Nikkei 225 index faced a sharp decline, tumbling nearly 5% on Monday. This drop, coupled with a weakening yen against the dollar.
Economic Calendar
Earnings Calendar
Notable reports for Monday before the bell include CCL. After the bell there are no notable reports.
News & Technicals’
U.S. East and Gulf Coast port workers are poised to go on strike at midnight on Monday, with no negotiations currently scheduled to prevent the stoppage. This strike threatens to halt container traffic from Maine to Texas, potentially costing the economy up to $5 billion a day. The disruption could affect the flow of essential goods, from food to automobiles, at major ports, risking job losses and increasing inflation just weeks before the U.S. presidential election. With no talks planned before the Monday deadline, the situation remains critical.
Oil markets have not priced in an ‘all-out war’ despite the recent escalation in tensions following the killing of a Hezbollah leader by an Israeli airstrike in Beirut. The confirmation of the leader’s death by Hezbollah did not lead to a sharp reaction in oil prices. Instead, the global benchmark Brent crude saw a modest increase of 1.56%, reaching $73.10 per barrel, while U.S. West Texas Intermediate futures rose by 1.09%, trading at $68.19 per barrel.
The French-Italian conglomerate Stellantis, which owns brands like Chrysler, Dodge, Jeep, and Maserati, has issued a warning about lower-than-expected sales across most regions for the second half of the year. As a result, Stellantis has revised its adjusted operating income (AOI) margin for the full-year 2024 to a range of 5.5% to 7.0%, down from its previous “double digit” outlook. Similarly, Aston Martin, famous for its iconic models featured in James Bond films, has also announced reductions in its profit margin and production targets for the year.
With the corporate buyback blackout in full effect the indexes could easily experience choppy market conditions as we wait for the official kickoff to 4th quarter earnings on OCT. 11. I continue to suggest raising your stoploss levels to protect your positions with the T2122 staying very elevated in the short-term. That said, I would not rule out the possibility of a little volatility today due to end of quarter window dressing.
Markets gapped higher on Thursday, supposedly in response to MU’s beat and raise from Wednesday night. SPY gapped 0.79%, DIA gapped up 0.50%, and QQQ gapped up 1.58%. However, that was about it for the Bulls as the SPY and QQQ sold off until about 1:30 p.m. At that point those two major index ETFs bounce about half way back to their open by 2 p.m. and ground sideways the rest of the day. Meanwhile, after its own gap higher, DIA just meandered sideways around that opening level all day. This action gave us gap-up, black-bodied candles with significant lower wicks in the SPY and QQQ. It is worth noting that SPT also printed a new all-time high and a new all-time high close. As for DIA, it printed a gap-up, white-bodied, Spinning Top Bull Harami inside its recent consolidation. This all happened on below-average volume in the DIA and QQQ as well as well-below-average volume in SPY.
On the day, eight of the 10 sectors were in the green with Basic Materials (+2.33%) far out in front, leading the rest of the market higher. On the other side, Energy (-1.97%) lagged far, far behind the other sectors. At the same time, SPY gained 0.40%, DIA gained 0.60%, and QQQ gained 0.75%. VXX closed flat at 48.48 and T2122 spiked back up into the lower half of its overbought territory at 85.90. At the same time, 10-Year bond yields rose to close at 3.796% while Oil (WTI) dropped another 3.21% to close at $67.45 per barrel. (The drop in oil came on a combination of factors. Even mor China stimulus, a modest de-escalation in Israeli-Hezbollah attacks, and OPEC+ publishing a highly bullish long-term oil demand forecast.) So, the three major index ETFs opened divergently, but on small moves. From there the move happened in the morning with the afternoon being just a dead-money grind sideways.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, which came in a bit lighter than expected at 218k (compared to a forecast of 224k and a previous week value of 222k). At the same time, the Weekly Continuing Jobless Claims were a bit higher than predicted at 1,834k (versus a 1,828k forecast and the prior week’s 1,821k number). Meanwhile, Preliminary August Core Durable Goods Orders (month-on-month) came in stronger than anticipated at +0.5% (versus a +0.1% forecast and July’s -0.1% reading). On the headline side, Preliminary August Durable Goods Orders (month-on-month) were flat at 0.0% (compared to a forecast of -2.8% and well down from July’s blowout +9.9% value). At the same time, Q2 Core PCE Prices were exactly as expected at +2.80% (compared to a forecast and prior quarter reading of +2.80%). In terms of Gross Domestic Product, Q2 GDP was +3.0% (versus a +3.0% forecast and well up from Q1’s +1.6%). On the price side, the Q2 GDP Price Index was down as expected at +2.5% (compared to the +2.5% forecast and Q1’s +3.0% value). Later, August Pending Home Sales were up, but below the anticipated numbers at +0.6% (versus a +0.9% forecast but much better than July’s -5.5% reading). Finally, after the close, the Fed Balance Sheet showed a $29 billion contraction for the week, from $7.109 trillion to $7.080 trillion.
In Fed news, Fed Governor Bowman was contrary to what other Fed governors and FOMC members have been touting for months. She told a Mid-size Bank Coalition of America workshop that “use of the Fed’s discount window is for emergencies, rather than for more usual liquidity needs.” This is a start contrast to the Chair and her peers who have been trying to get more banks to use the facility more. Bowman went on to say that she fears “unintended consequences” of banks posting collateral at the Fed Discount Window. Later, in a pre-recorded opening remarks video for the Annual US Treasury Market Conference, Fed Chair Powell recalled the “flash crash” in 2014 and praised inter-agency cooperation that got us through that as well as the pandemic crisis. A few minutes later, NY Fed President Williams announced the creation of a new committee at the NY Fed, the Reference Rate Use Committee, to study the use of interest rate benchmarks across various financial markets. (How the use of reference rates is changing and the underlying markets are changing due to electronic trading and globalization of markets for example.)
Later, Fed Vice Chair for Supervision Barr told the Treasury Market Conference that the Fed is considering new requirements for banks to improve their liquidity. He said, smaller (community) banks would be excluded but that big banks would be required to keep a minimum level of liquid reserves as well as pre-positioned collateral at the Fed Discount Window. Bass said this would be on a “tiered basis” with larger cash reserve requirements for larger banks. Shortly afterward, Treasury Sec. Yellen said that labor market and inflation data suggest the US economy is on a “soft landing path” as the “last mile” in taming inflation is bringing housing costs down. She said, “I always believed that there was a path to a soft landing, that it was possible to bring inflation down while maintaining a strong labor market, and to me, that’s what the data suggests has happened.” She went on to say that U.S. deficit reduction was necessary to keep interest costs manageable over time, but added that the Biden administration thought it important to continue to invest in parts of the economy that would fuel future growth. She continued by saying that banks are well capitalized but stressed the importance of the Fed Discount Window in ensuring stability during times of stress.
In other Fed news, Fed Governor Cook told an Ohio State University event that she whole-heartedly supported at 50-basis-point rate cut by the FOMC last week. Cook said, “That decision reflected growing confidence that, with an appropriate recalibration of our policy stance, the solid labor market can be maintained in a context of moderate economic growth and inflation continuing to move sustainably down to our target.” She continued, “The return to balance in the labor market between supply and demand, as well as the ongoing return toward our inflation target, reflects the normalization of the economy after the dislocations of the pandemic.” Cook went on, “This normalization, particularly of inflation, is quite welcome, as a balance between supply and demand is essential for sustaining a prolonged period of labor-market strength.”
After the close, BB, COST, and SCHL all missed on revenue while beating on earnings. It is worth noting that BB and SCHL both had massive misses on revenue.
In stock news, on Thursday, the UAW announced that it had reached a tentative deal with F related to the River Rouge tool and die unit. At the same time, MSFT announced it plans to invest $2.7 billion in Brazil over the next three years to enhance its cloud computing infrastructure. Later, V agreed to buy British IP Group’s Featurespace unit (which uses AI to provide “payment protection”) for $935 million according to the UK’s Sky News. At the same time, the CEO of STLA told Reuters that he wants to follow the Chinese “low-cost mindset” in its EV production. This came even as he attacked the EU tariffs on Chinese EVs, such as those in which STLA has an ownership stake. Later, Reuters also reported that C and APOS have formed a joint-venture $25 billion private credit and direct lending program. At the same time, GOOGL announced it will invest $3.3 billion to build two data centers in SC.
Elsewhere, IT trade news outlet The Information reported AMZN has already amassed its goal of $1.8 billion in ad-spending pledges for 2025 for its video-streaming service. In marginally noteworthy news, a major insider and top-three shareholders of DJT has sold almost all of his company stock holdings. Andrew Litinsky sold 7.5 million shares (5.5% of DJT stock), leaving him with 100 shares. At the same time, LUV, AAL, and DAL canceled over 1,200 flights and delayed more than 4,100 due to Hurricane Helene. Later, Bloomberg reported that LVMHF founder Arnault had lost $24 billion of his personal fortune this year. However, on Thursday, China gave the greenlight to massive stimulus, causing traders to bet on sales gains by his LVMHF luxury goods. The 9.9% stock price increase netted the tycoon a +17 billion day, increasing his net worth to $201 billion. After the close, MTN announced it will cut 14% of its “corporate workforce” and less than 1% of operational employees, as it seeks to cut $100 million in costs annually by 2026.
In stock legal and governmental news, on Thursday, WFC announced it had sent the Fed a third-party review of its risk and control overhauls. This is a critical step toward getting the Fed to lift the bank’s $1.95 trillion asset cap, which was imposed because of WFC’s lax controls and fraudulent back-dating of accounts. Later, the Wall Street Journal reported that SMCI is being investigated by the US Dept. of Justice related to its accounting practices. (The report said the investigation is just in its early, data-gathering stage.) At the same time, the NHTSA announced that GM will recall over 18k vehicles over brake line problems. Later, East Coast port employers filed a NRLB complaint against the Intl. Longshoreman Assn. for unfair labor practices. The filing alleges the union refuses to resume talks prior to its scheduled strike on October 1.
Elsewhere, the FTC issued the previously-rumored consent decree which approves the CVX $53 billion acquisition of HES. However, as a condition of the approval, the HES CEO is barred from taking a board seat on CVS. Later, the NTSB issued an urgent safety recommendation on rudder control systems for some BA 737 airplanes after an investigation of a February incident involving a jammed rudder on a UAL 737 MAX 8. At the same time, the SEC announced that DKNG has agreed to pay a $200k penalty to settle charges of selectively disclosing of material non-public information via social media. After the close, the TX Public Utility Commission unanimously approved an expansion of its ERCOT electric grid to improve access for COP, XOM, FANG, CVX, and DVN. (This is of note because the TX electric grid is already stretched and the pre-approval report said it expects the oil and gas drillers could account for almost one-third of the state’s summer electric usage by 2038.
In miscellaneous news, on Thursday, BAC analysts released a report claiming that certain sectors outperform in a steepening yield curve environment such as should be created by a Fed rate-cutting cycle. BAC said, Healthcare and rising momentum lead sector performance during a Bull Market steepening. On the other side, BAC said Basic Resources and High Risk stocks tend to outperform during Bear Market yield curve steepening. Elsewhere, Reuters reported OPEC+ plans to go ahead with oil production increases (180k barrels per day) in December. Saudi Arabia was committed to the increase and Russia strongly opposed. In addition, OPEC+ will drop its unofficial $100/barrel price target in order to win back market share (from the US, Canada, China and Brazil). Meanwhile, silver closed at its highest level since 2012 and gold hit a record level on Thursday.
In geopolitical news, Reuters reported Thursday that a senior Pentagon official said that China’s newest nuclear-powered submarine sank earlier this year. Apparently, the first-in-class Chinese nuclear attack sub sank alongside its pier sometime between May and June.
Overnight, Asian markets were mixed but leaned toward the red with seven of the 12 regional exchanges under break-even. Even so, the big moves were all on the plus side as Shenzhen (+6.71%) was WAY OUT FRONT followed by Hong Kong (+3.55%), Shanghai (+2.88%), and Japan (+2.32%). In Europe, the picture is mostly green with only three of 14 bourses in the red. The CAC (+0.29%), DAX (+0.84%), and FTSE (+0.54%) lead the region higher in early afternoon trade. In the US, as of 7:40 a.m., Futures are pointing toward a start just on the red side of break-even. The DIA implies a -0.01% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.14% open at this hour. At the same time, 10-Year bond yields are down a bit to 3.789% and Oil (WTI) is just on the green side of flat at $67.79 per barrel in early trading.
The major economic news scheduled for Friday includes the August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, and August Retail Inventories (all at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.). There are no major earnings reports scheduled for either before the open or after the close.
With that background, it looks like the Bulls are pushing back after a gap down to start the premarket. All three major index ETFs gapped lower to start the early session, but all three have also put in decisive white-body candles since that open to get back to even. Obviously, all three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the major index ETFs are extended above its T-line (8ema) after Thursday’s gap and then black-body candle. However, the T2122 indicator is back up in the lower half of its overbought range. So, markets have room to run either direction, but the Bulls still clearly have momentum and the Bears have more slack to work with today if they can reverse sentiment. With regard to those 10 big dog tickers, they are evenly split with five in the red and five in green. It is worth noting that the biggest dog, NVDA (-0.56%) leads the losses and has twice the dollar-volume of the next closest, which is TSLA (+0.83%) and that second dog is leading the gainers. Finally, remember it is Friday and the next to last trading day of the month. So, prepare your account for the weekend news cycle and don’t forget to pay yourself…lock-in profits where you can.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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
On Wednesday, stocks opened up undecided. SPY opened down 0.01%, DIA opened 0.10% higher, and QQQ opened 0.09% lower. From that point, DIA immediately began to sell off, reaching the lows of the day at 1:40 p.m. Meanwhile, SPY and QQQ rallied modestly after the open, reversing and beginning to selloff at 10:20 a.m. They both reached their lows between 1 p.m. and 2 p.m. After that, all three major index ETFs traded sideways in a tight range along the lows. This action gave us a large black-bodied Bearish Engulfing candle that retested and stayed above its T-line (8ema). At the same time, SPY printed a black-bodied, indecisive Spinning Top. Finally, QQQ gave us a white-bodied Inverted Hammer type candle (not a Shooting Star due to a gap lower not up). This happened on well-below-average volume in all three major index ETFs.
On the day, nine of the 10 sectors were in the red with Energy (-1.79%) far out in front leading the rest of the market lower. On the other side, Utilities (+0.26%) held up much better than the other sectors and was the only green on the sector board. At the same time, SPY fell 0.22%, DIA dropped 0.71%, and QQQ gained 0.09%. VXX closed up 1.36% to 48.41 and T2122 plummeted down to the center of its mid-range at 59.68. At the same time, 10-Year bond yields jumped to close at 3.791% while Oil (WTI) dropped 2.40% to close at $69.84 per barrel. (The drop in oil came on a combination of factors. Even mor China stimulus, a modest de-escalation in Israeli-Hezbollah attacks, and OPEC+ publishing a highly bullish long-term oil demand forecast.) So, the three major index ETFs opened divergently, but on small moves. From there the move happened in the morning with the afternoon being just a dead-money grind sideways.
The major economic news scheduled for Wednesday included August Building Permits which came in up but slightly lighter than expected at 1.470 million (compared to forecast of 1.475 million and the July reading of 1.406 million). Meanwhile, August New Home Sales were down but better than predicted at 716k (versus a forecast of 699k and the July value of 751k). This was a 4.7% decline on a month-on-month basis. Later, Weekly EIA Crude Oil Inventories showed a much bigger decline than expected at -4.471 million barrels (compared to a forecast calling for a 1.300-million-barrel draw and prior week reading of 1.630 million barrels.
In Fed news, Fed Governor Kugler said Wednesday that she “strongly supported” the half percent rate cut at last week’s FOMC meeting. Kugler said, “The labor market remains resilient, but the FOMC now needs to balance its focus so we can continue making progress on disinflation while avoiding unnecessary pain and weakness in the economy.” She continued, “I strongly supported last week’s decision and, if progress on inflation continues as I expect, I will support additional cuts.”
After the close, MU and WS reported beats on both the revenue and earnings lines. At the same time, CNXC bear on revenue while missing on earnings. However, FUL and JEF missed on both the top and bottom lines.
In stock news, on Wednesday, the union that represents striking BA workers in the Pacific Northwest told Reuters that the workers are not interested in the latest offer from the company. (BA called that offer their “best and final” offer.) At the same time, unions for LUV workers announced company plans to reduce service to and from Atlanta in 2025 as part of cost cutting plans. This will lead to the loss of an unspecified number of jobs. Later, VLKAF (Volkswagen) flatly rejected union calls for more talks as the unions threaten strikes following a bitter first round of negotiations over potential German plant closures. At the same time, META unveiled new Augmented Reality glasses and AI updates. Later, STLA and French nuclear fuel firm Orano announced they are dropping a previously planned joint venture to recycle electric car batteries. Meanwhile, MRK announced bad results from a late-stage trial for its experimental colorectal cancer drug. (441 trial participants who took the drug did not show significant improvement in survival compared to existing treatments.)
Later, PYPL announced it will allow merchants to buy, hold, and sell cryptocurrency from their business accounts. After the close, PFE withdrew its sickle cell disease treatment Oxbryta from all markets worldwide and discontinued all studies and programs related to the treatment. (This decision was “based on the totality of clinical data, which indicates the benefits of the drug o not outweigh the risks” according to a PFE statement.) PFE reported $92 million in revenue from Oxbryta in Q2. At the same time, SPR announced it will begin employee furloughs in three weeks unless the BA strike in the Pacific Northwest ends before that time. Later, BX confirmed previous rumors that it has invested $13.3 billion in an AI data center in the Northeast England. At the same time, Bloomberg reported that SDXOF (France’s Sodexo) is strongly considering a big to takeover rival ARMK. (ARMK share spiked in after-hours trading.)
In stock legal and governmental news, on Wednesday, BAC (Merrill lynch subsidiary) agreed to pay $3.8 million to settle two SEC charges related to investment limits and fees. At the same time, Australia’s securities regulator fined fund giant Vanguard $9 million for misleading claims about its ethical and green investment funds. Later, the NHTSA announced that STLA will recall 15,000 Fiat vehicles in the US due to software errors that may cause airbags to deploy with excessive force. At the same time, GOOGL filed a complaint with the European Commission against what it alleges are anti-competitive practiced by MSFT to lock their customers into the MSFT Azure cloud computing platform. Later, X announced that an arbitration board has ruled in favor of Nippon Steel’s $14.9 billion buyout of the company. However, the United Steelworkers which represents the vast majority of X employees said it disagreed with the decision and this did not change its opposition to the deal.
Meanwhile, Transportation Sec. Buttigieg and Acting Labor Sec. Su wrote a letter to the CEOs of CSX, CNR, and CP urging the companies to guarantee paid sick leave for all workers. (The letter said 10k of their workers do not have paid sick leave. A rail trade group responded by saying that 60% of rail workers do have paid sick leave…as if that was something to exclaim.) Later, GOOGL, GS, BCSF, BNS, LEGH, and CELH agreed to pay a combined $3.8 million in penalties to the SEC to settle charges over late filings and disclosures. At the same time, CSLLY received a $121 million contract from the HHS Dept. to increase the US stockpile of bird flu vaccine to 40 million doses. After the close, AEO sued AMZN alleging the ecommerce giant infringed on its Aerie trademarks on clothing and accessories.
In miscellaneous news, on Wednesday, US ports along the East Coast and Gulf Coast extended their delivery hours for importers as companies rush to clear cargo through the ports ahead of a potential and looming strike on October 1. (The strike could cover five of the top 10 busiest ports in the US.) Elsewhere, a global banking trade group (Inst. Of Intl. Finance) reported Wednesday that global debt rose to a record $312 trillion at the end on Q2. This resulted in a global debt-to-GDP ratio of 327%. Oddly, the “developed countries” ratio fell to its lowest level since 2018, driven by declines in household and non-financial corporate sector borrowing. Later, a group of House GOP members, led by the Chair of the Select Committee on China, said Wednesday that the panel’s top priority is legislation to prevent US investment in China. The group painted the issue as needing to stop US investors from funding our own country’s demise (by funding the enemy China). Many Democrats are more than willing to go along with such initiatives as Populism and Nationalism has apparently completely replaced free trade and “the invisible hand of the market” philosophies.
In government funding news, after the close, the House passed a stop-gap spending continuing resolution to fund government operations through December 20. The move comes after MAGA extremists lost their bid to tie a voter suppression amendment to the bill. The bill passed 341-82 with all “no votes” being cast by Republicans. (As a side note, this leaves House Speaker Johnson in the same predicament as his ousted predecessor, having had to go against the MAGA wing of his party in order to actually govern. There is no word on whether a move will be made to oust Johnson, but it is doubtful prior to the election since Republicans don’t want to refresh the view of their party as wholly dysfunctional, having passed no legislation of any meaning and caused potential shutdowns seven different times since January 2023. Number eight comes on December 20.) Senate Majority Leader Schumer had prepared for the last-minute wrangling by putting a placeholder on the Senate schedule. So, the Senate voted on the bill from the House and passed it 78-18. The bill now goes to the President, where it will be signed.
Overnight, global markets have been given a leg up by MU’s beat and forecast raise last night. MU raised Q3 guidance a half billion higher than estimates to $8.7 billion for the quarter. As a result, all tech-related and chip names in particular soared higher. Asian markets were mostly green with just three of the 12 exchanges in the red. Shenzhen (+4.44%), Hong Kong (+4.16%), and Shanghai (+3.61%) led broad and strong gains across the region. In Europe, we see a similar picture taking shape as 12 of the 14 bourses are well into the green. The CAC (+1.50%), DAX (+1.14%), and lagging FTSE (+0.16%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m.), Futures are pointing toward a gap higher to start the day. The DIA implies a +0.42% open, the SPY is implying a +0.76% open, and the QQQ implies a +1.42% open at this hour. At the same time, 10-Year bond yields are down to 3.77% and Oil (WTI) has dropped another 2.73% to $67.77 per barrel in early trading.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core Durable Goods Orders, August Durable Goods Orders, Q2 Core PCE Prices, Q2 GDP, and Q2 GDP Price Index (all at 8:30 a.m.), August Pending Home Sales (10 a.m.), and the Fed Balance Sheet (4:30 p.m.). We also hear from Fed Governor Bowman (9:15 a.m.), Fed Chair Powell (9:20 a.m.), Fed member Williams (9:25 a.m.), Fed Vice Chair Barr (10:30 a.m.), Treasury Sec. Yellen (11:15 a.m.), Fed Vice Chair Barr (1 p.m.), and Fed member Kashkari (1 p.m.). The major earnings reports scheduled for before the open are limited to ACN, KMX, JBL, and SNX. Then, after the close, BB, COST, and SCHL report.
In economic news later this week, on Friday, August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, August Retail Inventories, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.
In terms of earnings reports later this week, on Friday, there are no earnings reports scheduled.
So far this morning, ACN and JBL reported beats on both the revenue and earnings lines. Meanwhile, KMX beat on revenue while missing by a penny on earnings.
With that background, it looks like the Bulls are charging this morning on that MU forecast optimism. All three major index ETFs gapped up significantly to start the premarket. However, SPY and DIA have printed tiny Doji candles since while QQQ has followed-through with a decent-size white-body candle that is now within 2% of its all-time highs. It is worth noting that SPY sits at a new all-time high by three-quarters of a percent in the early session. Obviously, all three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, QQQ is extended far above its T-line (8ema) after the premarket gap up. However, the other two major index ETFs are not yet too far extended above their T-lines. However, the T2122 indicator is back down in the middle of its mid-range. So, markets may have room to run either direction, but the Bulls clearly have momentum early and the Bears have much more slack to work with today if they can reverse sentiment. With regard to those 10 big dog tickers, all 10 are in the green with INTC (+2.89%), AMD (+2.54%), and NVDA (+2.27%) leading the gains. As usual, However, that biggest dog, NVDA, is leading the dollar-volume traded this morning by a factor of three compared to any other ticker.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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
Wall Street is working to stabilize after a mixed session on Wednesday, with Nasdaq 100 futures rising by 1.3%. This boost was largely driven by Micron Technology, whose shares surged 14% in extended trading following the release of strong guidance for the current quarter. Traders are now looking ahead to the weekly jobless claims report, expected on Thursday, with economists surveyed by Dow Jones predicting 223,000 initial unemployment claims for the week ending September 21.
European stocks saw an uptick on Thursday morning, driven primarily by a strong performance in the mining sector, which surged over 3.6%. Technology and household goods stocks also contributed to the positive momentum, each rising around 3%. Conversely, oil and gas stocks declined by more than 2.8% following a Financial Times report indicating that Saudi Arabia is considering abandoning its unofficial oil price target of $100 per barrel. Among the notable gainers, shares of the French luxury group Kering climbed significantly.
Chinese stocks continued their upward trajectory as state media reported that the nation’s top leaders had endorsed the government’s recent economic support measures. The CSI 300 index in Mainland China extended its winning streak to seven consecutive days, reaching its highest point in approximately four months following a pivotal meeting that reaffirmed the government’s commitment to stimulus efforts. Meanwhile, South Korea’s Kospi surged by 1.9%, driven by significant gains in SK Hynix. The chip maker announced the commencement of mass production of the world’s first 12-layer HBM3E chip, designed for AI memory applications.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include CAN, KMX, JBL, & SNX. After the bell reports include COST, BB, & MTN.
News & Technicals’
Global chip stocks experienced a significant rally on Thursday following U.S. memory semiconductor maker Micron’s announcement of revenue guidance that exceeded expectations, propelling its share price upward. This positive sentiment extended to South Korea, where shares of Samsung Electronics and SK Hynix also saw gains. In Europe, Dutch semiconductor equipment maker ASML surged over 4% in early trading. Other semiconductor companies, including ASMI, BE Semiconductor, and STMicroelectronics, also posted sharp increases.
Russian President Vladimir Putin announced that Russia is making several clarifications to its nuclear doctrine, specifically defining the conditions under which nuclear weapons may be used. He mentioned that the draft amendments to the doctrine will broaden the scope of states and military alliances subject to nuclear deterrence. In a stern warning to Western nations, Putin declared that any attack on Russia by a non-nuclear state, if supported by a nuclear-armed nation, would be treated as a “joint attack,” signaling a significant shift in Russia’s strategic defense policy.
The Federal Trade Commission (FTC) is intensifying its efforts against “automation” companies that promise to launch and manage online businesses for customers in return for an upfront investment. The latest target of this crackdown is Ascend Ecom, which operated an e-commerce scheme primarily on Amazon. The FTC has accused Ascend and similar companies of misrepresentation and making deceptive earnings claims, highlighting the need for greater scrutiny and regulation in this sector to protect consumers from fraudulent business practices.
OpenAI’s board is currently deliberating plans to restructure the organization into a for-profit business. This news follows the announcement by Chief Technology Officer Mira Murati that she will be leaving the company after six and a half years. Later the same day, CEO Sam Altman revealed that Chief Research Officer Bob McGrew and Vice President of Research Barret Zoph are also set to depart. These significant leadership changes come at a pivotal moment for OpenAI as it considers a major shift in its business model.
With the earnings results out of MU the market is once again all excited about AI as the institutions work to stabilize the sector pushing new record highs in the SPY at the open. However, it would be wise to be careful chasing at the open and watch for potential whipsaws as the market reacts to huge day of economic data and Fed speakers including the Chairman himself.
Stock futures dipped on Wednesday, following record-high closes for the S&P 500 and Dow, which rose by 0.25% and 0.20%, respectively. The Nasdaq Composite also saw gains, increasing by 0.56% and nearing its record high, now less than 4% away. Despite these positive movements, concerns about a slowing economy persist, especially after the Federal Reserve’s rate cut last week. Investors are now looking ahead to upcoming economic data, including new home sales for August, set to be released on Wednesday morning, and weekly jobless claims on Thursday.
European stocks edged lower on Wednesday, trimming gains from the previous session that were driven by Chinese stimulus measures. The banking sector was notably affected, with the banking index falling by approximately 0.4% as investors closely watched UniCredit’s potential acquisition of Commerzbank, Germany’s second-largest lender. Additionally, German software giant SAP saw a significant drop, landing at the bottom of the Stoxx 600, following reports from Bloomberg that the company is under investigation in the U.S. for alleged price-fixing.
China’s stock market led the Asia-Pacific region on Wednesday, driven by new stimulus measures announced by Beijing the previous day. This positive sentiment also saw the offshore yuan briefly strengthen to 6.995 against the U.S. dollar, marking the first time it broke the 7.00 level since May 2023. Hong Kong’s Hang Seng index reflected this optimism, rising by 0.63% in its final trading hour. Meanwhile, investors turned their attention to Australia’s inflation data, which showed a 2.7% year-on-year increase in the consumer price index for August.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday before the bell notable report includes CTAS. After the bell includes MU, CNXC, FUL, JEF, & WS.
News & Technicals’
Caroline Ellison, the key witness in the case against FTX founder Sam Bankman-Fried, was sentenced to two years in prison by a New York federal court in Manhattan. She was also ordered to forfeit $11 billion. Ellison, who managed the Alameda Research hedge fund linked to FTX, had agreed to a plea deal in December 2022, shortly after the cryptocurrency exchange declared bankruptcy. During sentencing, Judge Lewis Kaplan acknowledged her significant cooperation but stated he could not grant her a “literal get-out-of-jail-free card.”
The Biden administration has endorsed the latest government funding proposal, reducing the likelihood of a shutdown before the November 5 presidential election. House Speaker Mike Johnson, R-La., introduced a new three-month funding bill on Sunday after his initial proposal failed in the GOP-controlled House. This appropriations bill aims to fund the government through December 20, instead of March 2025, and notably excludes the SAVE Act, a contentious voter ID bill.
Italy’s UniCredit has surprised German authorities with a potential multibillion-euro merger involving Frankfurt-based Commerzbank. Market observers indicated to CNBC on Tuesday that this move might have caused a sense of national embarrassment for Germany’s government. Some argue that the outcome of this takeover attempt could challenge the essence of the European project. On Monday, Milan-based UniCredit announced it had increased its stake in Commerzbank to approximately 21% and has requested to raise this holding to up to 29.9%.
Japan has been facing a rice shortage in recent months, driven by a combination of adverse weather conditions and a surge in tourism. This situation has been exacerbated by Japan’s restrictive rice policies. In August, many supermarkets frequently ran out of white rice, prompting stores to limit purchases to one bag per person.
After another round of record-high closes futures suggest a bit softer open for Wednesday. Uncertainty of 4th quarter earnings and the pending GDP and core PCE numbers are a natural reason for choppy price action and weaker than average volume. With the T2122 indicator continuing to register a short-term overbought condition avoid overtrading and have a plan to protect positions if a profit-taking wave begins.
Markets were mostly undecided and treading water again Tuesday. To the extent there was any directionality, it was slightly bullish. SPY opened 0.15% higher, DIA opened 0.12% higher, and QQQ gapped up 0.30%. From there, all three major index ETFs sold off the first hour, rallied the second hour, and then ground sideways the rest of the day popping back up to the highs the last five minutes of the day. All three major index ETFs remain above their T-line (8ema). This action gave us a white-bodied Spinning Top in the DIA. At the same time, SPY printed a white-bodied Hanging Man. Finally, QQQ printed a white-bodied candle somewhere in between a Hanging Man and a Spinning Top, that sits right at a resistance level from the August highs. This happened on below-average volume in all three of the major index ETFs.
On the day, seven of the 10 sectors were in the green, with Basic Materials (+1.97%) well out in front leading the rest of the market higher. On the other side, Financial Services (-0.39%) and Utilities (-0.37%) lagged well behind the other sectors. At the same time, SPY gained 0.29%, DIA gained 0.24%, and QQQ gained 0.48%. VXX was flat, ending up to 47.76 and T2122 climbed a bit into the middle of its over-bought range to close at 90.96. At the same time, 10-Year bond yields fell a bit to close at 3.732% while Oil (WTI) gained 1.66% to close at $71.54 per barrel on supply fears led by Israeli escalation of attacks on Lebanon. So, markets were slightly bullish on what was largely a non-committal, undecided day with traders making few bets as markets drifted sideways much of the day. SPY and DIA both closed at new all-time high closes.
The major economic news scheduled for Tuesday was limited to Conference Board Consumer Confidence, which came in lower at 98.7 (compared to a forecast of 103.9 and well down from August’s 105.6 reading). Later, after the close, Weekly API Crude Oil Stocks had a much larger drawdown than expected at -4.339 million barrels (compared to a forecasted 1.100-million-barrel drawdown and far different than the previous week’s 1.960-million-barrel inventory build).
In Fed news, Fed Governor Bowman (probably the most hawkish permanent member of the FOMC board) explained her lone dissent to the FOMC’s half percent rate cut last week. She told a KY Banker’s Assn. that inflation gauges “remain uncomfortably above” the Fed’s 2% target. Therefore, she opposed a half-percent cut and instead supported a quarter percent reduction. Bowman said, “The U.S. economy remains strong and core inflation remains uncomfortably above our 2% target.” She continued, “I preferred a smaller initial cut in the policy rate while the U.S. economy remains strong and inflation remains a concern.” Bowman explained, “I continue to see greater risks to price stability, especially while the labor market continues to be near estimates of full employment (4.2%).” She also said that she feared a rate cut would “unleash a considerable amount of pent-up demand and cash on the sidelines” (thus, possibly reigniting inflation).
After the close, KBH reported beats on both the revenue and earnings lines.
In stock news, on Tuesday, oil and gas operators in the Gulf of Mexico scaled back or shut down operations ahead of a storm predicted to become a hurricane Wednesday. SHEL, CVX, and BP were the headline names that evacuated rigs in the gulf. At the same time, as previously revealed, SMAR announced it will be acquired by BX and Vista Equity Partners in a $8.4 billion all-cash deal ($56.50/share). Later, BIIB released results promising from a Phase 3 study of its lupus treatment. At the same time, the Chairman of Nippon Steel publicly asked the United Steelworkers union to “come to the table” to find a resolution allowing Nippon Steel to acquire X. Later, about 2,000 hotel workers walked off the job in a strike at the largest HLT hotel in the world in HI. (Overall, 4,000 hotel workers struck HLT in Honolulu, Sandiego, and San Francisco.) At the same time, KO announced that it is pulling its “Spiced Coke” flavor and said it was discontinuing the flavor. This comes less than six months after KO announced the new “permanent flavor” was intended to target younger drinkers.
Elsewhere, Elliott Management announced it would request a special meeting of the board of LUV as soon as next week as the activist investor seeks to push out the CEO. Later, AMCI Testing announced that TSLA Full Self-Driving software is still “suspect” and requires improvement to ensure robotaxi safety. (The testing company said that a 1,000-mile evaluation found that the software required human intervention 75 times and the time between required human interventions decreased as the test went on.) At the same time, the Teamsters Unions announced it had reached a four-year deal with BWA, covering 700 workers. (This ends a two-week strike at BWA.) Later, MSFT announced it will spend $1.3 billion in Mexico over the next three years to build out cloud computing infrastructure. After the close, Reuters reported that negotiations remain at a standstill between MPC and the Teamsters Union as the strike at MPC refineries enters its third week. At the same time, regulatory filings showed that BRKB sold another $863 million of BAC stock between September 20 and September 24.
In stock legal and governmental news, on Tuesday the Dept. of Justice sued V for allegedly conducting an illegal monopoly over debit cards. The suit accuses V of using “exclusionary agreements” with partners to prevent and smother potential rivals in that space. Later, BVNRY received a $63 million order from the US government to produce bulk and freeze-dried smallpox and Mpox vaccines. At the same time, the UK anti-trust watchdog agency said that “concerns remain” over GOOGL ad-privacy plans. (This is GOOGL’s plans to retain third-party cookies in the Chrome browser for better targeting ads.) Later, the FTC announced that INVH agreed to pay a $48 million fine for deceiving renters about their lease costs.
Meanwhile, the US State Dept. approved the sale of $740 million of Stinger missiles (made by RTX) to Egypt. At the same time, a Brazilian state announced they had signed a $180 million deal with AMZN and five other companies, selling the companies carbon credits and the money to purportedly be used for conservation of the Amazon region. After the close, META announced it will not immediately join the EU’s AI Pact ahead of bloc’s new AI law comes into effect. At the same time, a federal judge ruled a NY City law requiring DASH, GRUB, and UBER to share the end customer data with restaurants. The judge ruled the law violated the First Amendment by regulating commercial speech.
In geopolitical news, on Tuesday, Israel continued its new campaign of attacks on Lebanon (Hezbollah). After 1,300+ Israeli attacks Monday killed more than 500 and wounded thousands, on Tuesday they launched several dozen additional attacks, killing at least dozens more. In response, Hezbollah fired 300 rockets into Israel. As the rest of the world called for de-escalation and the stop of illegal bombings, Israeli PM Netanyahu said the attacks will not end. He urged the Lebanese people to change governments and throw out Hezbollah “before that group leads them into the abyss” (i.e. gets them bombed to rubble by Israel). Meanwhile, the IDF spokesman called on the people of Southern Lebanon to move away from buildings and gatherings “for their own safety.” Oil prices initially spiked on Monday, but retreated as the attacks cooled Monday night. However, another spike took place Tuesday as the attacks resumed.
In overnight news, Asia was buoyed Wednesday by more stimulus from Beijing. The People’s Bank of China (central bank) lowered the rate charged on one-year loans by more than it has ever been lowered before. This comes on top of the broad package of stimulus announced Tuesday. As a result, the Chinese yuan rose to more the seven per US dollar for the first time in 16 months. Elsewhere, SAP stock took a hit on news that the US is investigating the German software giant for over-charging US agencies over the course of a decade.
Overnight, Asian markets were evenly mixed with six exchanges in the red and six in the green. Taiwan (+1.47%), Shenzhen (+1.21%), and Shanghai (+1.16%) led the gainers while South Korea (-1.34%) and Singapore (-1.09%) were by far the biggest losers. In Europe, markets are mostly green at midday with four of 14 bourses in the red. The CAC (-0.33%), DAX (-0.43%), and FTSE (+0.27%) lead the region on volume as usual in early afternoon trade. In the US, as of 7:15 a.m., Futures are pointing toward a mixed, flat start to the day. The DIA implies a +0.07% open, the SPY is implying a -0.01% open, and the QQQ implies a -0.15% open at this hour. At the same time, 10-Year bond yields are up to 3.76% and Oil (WTI) is down 0.63% to $71.10 per barrel in early trading.
The major economic news scheduled for Wednesday includes August Building Permits (8:30 a.m.), August New Home Sales (10 a.m.), and Weekly EIA Crude Oil Inventories (10:30 a.m.). The major earnings reports scheduled for before the open are limited to CTAS. Then, after the close, CNXC, FUL, JEF, MU, and WS report.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core Durable Goods Orders, August Durable Goods Orders, Q2 Core PCE Prices, Q2 GDP, Q2 GDP Price Index, August Pending Home Sales, and the Fed Balance Sheet. We also hear from Fed Chair Powell, Fed member Williams, Fed Vice Chair Barr, Treasury Sec. Yellen, Fed Vice Chair Barr, and Fed member Kashkari. Finally, on Friday, August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, August Retail Inventories, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.
In terms of earnings reports later this week, on Thursday, we hear from CAN, KMX, JBL, SNX, BB, COST, and SCHL. Finally, on Friday, there are no earnings reports scheduled.
In last minute news mortgage news, the Mortgage Bankers Assn. reports a surge in demand for loans last week. This was led by a 20% increase in refinance loan applications on the week (week-on-week). (This was a massive 175% increase over the same week one year earlier.) Meanwhile, the loan applications for the purchase of a new home rose 1% week-on-week, but were also 2% higher than the same week of 2023. The national average 30-year, fixed-rate, conforming-loan interest rate was 6.13% down from 6.15% the week prior., APO (Apollo Global Mgmt.) offered to make a $5 billion “equity-like” investment into INTC. This is both a vote of confidence in INTC, but depending on the board mindset may also offer an alternative to the friendly take-over offer from QCOM. Either way, INTC shares spiked in premarket on the news.
With that background, it looks like the SPY is flat and undecided in the premarket. At the same time, QQQ gapped down a bit but is also undecided at that point. Meanwhile, DIA gapped down the most in the early session, but also has a strong white-bodied candle so far that had climbed back up to positive territory early. All three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the three major index ETFs are too far extended above their T-lines. However, the T2122 indicator has climbed back into the top half of its overbought range. So, markets may have room to run either direction, but the Bears still have more slack to work with today. With regard to those 10 big dog tickers, seven of the 10 are in the red with AAPL (-0.99%) well out in front leading the losses. However, that biggest dog, NVDA (+0.26%) is among the leader among the gainers and has traded 3x the dollar-volume of any other ticker so far today (normal for NVDA).
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 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
