The bull trend continues despite the rate of uncertainty fueled by earnings results and a remarkable willingness to chase the very extended tech titians higher. I think we can expect more of the same as we roll out a huge number of earnings reports through the end of the week. That said, manage your positions closely because the bears are beginning to act a bit more aggressively, and if the bulls stumble or run out of energy an attack could begin quickly. Plan for considerable price volatility as the market reacts to all the pending reports.
While we slept Asian markets closed mixed but mostly higher as China pushed hard to stimulate buying confidence as manufacturing and real-estate woes continue. European markets trade modestly lower across the board this morning as the rate uncertainty continues. Although U.S. futures traded lower overnight once again they are working hard in the premarket to recover losses as earnings results roll out.
Snap, the maker of the popular social media app Snapchat, reported a modest increase in its fourth-quarter revenue, while its net loss shrank from a year ago. However, the company’s revenue and forecast fell short of the market expectations, sending its shares lower. Snap blamed the Middle East conflict for slowing down its growth, as it said in a letter to investors on Tuesday that the geopolitical turmoil hurt its advertising business.
Chipotle, the fast-casual Mexican restaurant chain, reported strong earnings and revenue for the fourth quarter, exceeding the market forecasts. The chain’s same-store sales, which measure the performance of its existing locations, also surpassed expectations, showing healthy growth. Chipotle attributed its success to the increase in its customer traffic, which defied the general decline in the restaurant industry. Chipotle said that its digital and delivery initiatives, as well as its menu innovations, helped attract more customers and boost its sales.
Ford, one of the leading car manufacturers in the world, is revising its plans for investing in electric vehicles (EVs). According to its CEO Jim Farley, the company is facing challenges in making EVs affordable and profitable for the average customer. While Ford remains optimistic about the future of EVs, it has decided to reduce its spending on this segment by $12 billion. This move reflects the uncertainty and complexity of the EV market, which is still evolving and developing.
Despite beating analysts’ estimates for its fourth-quarter performance, CVS Health delivered a disappointing outlook for 2024. The healthcare giant blamed rising medical expenses for its lower earnings guidance, which reflects the challenges faced by the insurance sector amid the pandemic. CVS Health, which operates pharmacies, clinics, and health plans, said it expects to earn at least $8.30 per share in 2024, down from its previous projection of at least $8.50 per share.
Earnings results continue to help the indexes push higher to close mostly in the green on Tuesday. The S&P 500 and the NASDAQ, edged up by about 0.2% and 0.1%, respectively. However, after the morning pop, the market largely chopped sideways on relatively low volume. The best-performing sectors in the S&P 500 were real estate and materials, each gaining about 1.5%. After dropping by about 2% in the previous two days, U.S. small-cap stocks bounced back by about 0.6%. Today traders will look for inspiration in the huge number of earnings reports as well as Mortgage Apps, International Trade, Petroleum Status, several Fed speakers, and bond auctions. The trend remains bullish but the hint of uncertainty could bring the bears in quickly so continue to manage your positions carefully to protect profit if the bull begins to stumble.
Tuesday saw stocks open slightly higher and then diverge with large-caps chopping sideways and QQQ selling off before starting its own chop to the side. SPY gapped up 0.19%, DIA opened 0.09% higher, and QQQ gapped up 0.27%. At that point, SPY meandered sideways, recrossing its gap several times. Meanwhile, DIA chopped to the side above its open and QQQ immediately recrossed the gap up and sold off until 12:30 p.m. before meandering along the lows. Then, during the last 30 minutes of the day, all three major index ETFs rallied. This action gave us a white-bodied Spinning Top in the SPY, a large-bodied, white-bodied Bullish Harami in the DIA (that bounced up off its T-line), and a black-bodied Spinning Top in the QQQ (which also bounced up off its 8ema).
On the day, nine of the 10 sectors were in the green as Healthcare (+1.30%) and Consumer Cyclical (+1.20%) led the way higher. Meanwhile, on the other end of the spectrum, Communications Services (-0.22%) was the only sector that stayed in the red. At the same time, the SPY gained 0.29%, the DIA gained 0.39%, and QQQ lost 0.20%. VXX fell another 2.43% to close at 14.05 and T2122 spiked back up into the center of its mid-range to 55.74. 10-year bond yields dropped back down to 4.09% and Oil (WTI) rose 0.92% and close at $73.45 per barrel. So, good premarket earnings led to a nice start to the day. However, from that point forward we mostly saw drift and indecision as traders wait for a more broad-based read on earnings season (or more news and/or Fed opinions).
The major economic news released Tuesday was limited to Weekly API Crude Oil Stocks, which showed a smaller-than-expected increase of 0.674 million barrels (compared to a forecasted build of 2.133 million barrels but better than the prior week’s 2.500-million-barrel drawdown). Elsewhere, the EIA released its short-term Energy Outlook. The report says it expects US electricity use to rise to records in both 2024 and 2025. (The US used 3,994 billion kWh in 2023 with 2024 demand projected at 4,112 billion kWh and 2025 at 4,123 billion kWh).
In Fed news, Cleveland Fed President Mester said Tuesday that she is open to rate cuts if it is clear inflation is still slowing. Mester said, “Monetary policy is in a good place from which to assess and respond” … “I don’t want to put a particular calendar date on it (rate cuts) – it really is dependent on the state of the economy.” She added, “There’s no rush.” Later, Philly Fed President Harker said that a soft landing was in sight for the US economy. Harker said, “The data point to continued disinflation, to labor markets coming into better balance, and to resilient consumer spending — three elements necessary for us to stick to the soft landing we remain optimistic to achieve.” He went on to say “real progress” is being made toward (getting back to) the Fed’s 2% target.
After the close, AB, AFG, AMGN, AIZ, CSL, CMG, CINF, CRUS, CNO, EW, F, FTNT, IEX, JKHY, LUMN, OI, OMC, OXBC, SONO, SNEX, VLTO, VOYA, WFRD, WU, and YUMC all reported beats on both the revenue and earnings lines. At the same time, ASTL, AMCR, EQH, CTSH, EXEL, and SNAP all missed on revenue while beating on the earnings lines. On the other side, GILD, KD, PRU, QGEN, VSAT, and WERN all beat on revenue while missing on earnings. Unfortunately, AMRK, DOX, ATO, PLUS, NBR, and VFC missed on both the top and bottom lines. It is worth noting that PLUS and GILD lowered guidance. However, JKHY, KD, and VLTO raised their forward guidance.
In stock news, USB announced it will resume share buybacks and plans to find $3 billion more in cost savings related to integrating its acquisition of CS. (UBS says it now expects to save $13 billion total by the end of 2026 from the CS purchase.) Later, the UAW announced that more than 50% of the workers at VLKAF (Volkswagen) TN plant have signed requests to join the union. (UAW previously announced it will seek recognition once that number reaches 70%.) At the same time, DD announced a new $1 billion stock buyback program and hiked its dividend by 6%. Later, KSS stock jumped as hedge funds (major shareholders) urged the company to sell itself. (KSS rejected a $64/share offer in 2022, holding out for a $70/share offer that never arrived. KSS closed at $26.80 on Tuesday.) At the same time, AMZN announced it will cut 115 jobs from its healthcare services unit (which has 400 employees). Elsewhere, DIS (ESPN and ABC), FOX, and WBD announced a revolutionary sports-centric subscription streaming service to be launched in the fall of 2024. This will target non-cable, sports fan subscribers.
In stock legal, governmental, and regulatory news, the NHTSA announced Tuesday that HMC will recall 750k 2020-2021 vehicles related to airbags that could deploy unintentionally during a minor collision. (This is not related to the widely-known Takata airbag recalls across many car makers. Instead, this is related to a natural disaster at an HMC subcontractor causing it to change the materials used.) Later, the NHTSA announced that GM is recalling more than 323k trucks for issues that may cause the tailgate to open while driving. At the same time, the FAA said it would post inspectors at BA, saying BA’s current quality system “is not working.” Elsewhere, the NTSB released its preliminary report into the mid-air loss of the BA 737 MAX 9 body panel. The report says bolts were removed to repair a damaged door plug and the bolts were not reinstalled. Similar missing bolts were found on numerous other 737 MAX 9s. It also cited that the system allowing BA to certify the safety of their own planes when the company’s primary goal was increasing production rates was untenable. At the same time, the US, UK, and France along with MSFT, GOOGL, and META signed a joint statement calling for more efforts to tackle cyber spying tools. Elsewhere, the FDA said after the close Tuesday that it has found quality control lapses at CTLT, including “pest control” issues. (NVO announced Monday it is buying CTLT for $16.5 billion in order to expand production capacity for obesity drugs.) Later, GOOGL agreed to pay $350 million to settle a shareholder lawsuit related to a security bug in the company’s now-defunct Google+ social media platform. (The bug exposed users personal data.) At the same time, a CA judge grilled GM Cruise unit officials over the coverup and then disclosure of the company’s pedestrian-dragging crash in October. (Afterward, GM raised its offer to end the investigation by CA regulators, raising it to just $112,500.) Later, AAPL won a dismissal of a lawsuit by a Silicon Valley startup accusing AAPL of monopolizing the US heart-rate monitoring apps market via its app store.
Overnight, Asian markets were mostly green, again led by China. Shenzhen (+2.93%), Shanghai (+1.44%), and South Korea (+1.30%) led the gainers with only two of the 12 exchanges in the red. Meanwhile, in Europe, the bourses lean toward the red side with only four of 15 bourses in the green at midday. The CAC (-0.25%), DAX (-0.32%), and FTSE (-0.41%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures point toward a mixed and flat start to the day. The DIA implies a -0.15% open, the SPY is implying a -0.04% open, and the QQQ implies a +0.07% open at this hour. At the same time, 10-year bond yields are back up to 4.1333% and Oil (WTI) is up another 0.71% to $73.85 per barrel in early trading.
The major economic news scheduled for Wednesday includes Dec. Exports, Dec. Imports, and Dec. Trade Balance (all at 8:30 a.m.), Weekly EIA Crude Oil Inventories (10:30 a.m.), Dec. Consumer Credit (3 p.m.), and Fed member Bowman speaks (2 p.m.). The major earnings reports scheduled for before the open include ADNT, BABA, ATS, ARCC, BERY, BAM, BG, CDW, CVS, EPC, EMR, EQNR, EEFT, FOXA, GPRE, GFF, HAIN, HLT, KMT, NBIX, NYT, OMF, PAG, PFGC, REYN, RBLX, SEE, TTMI, UBER, VSTS, VSH, XPO, and YUM. Then, after the close, ALL, ARM, ASGN, BKH, CENTA, CENT, CPA, CXW, COTY, EHC, ENS, NVST, EFX, EG, FAF, FLT, GL, MAT, MMS, MCK, MAA, MKSI, MOH, MUSA, NWSA, ORLY, OSCR, PYPL, RRX, STE, SLF, SU, UHAL, DIS, and WYNN report.
In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported. Then Friday there is no major news planned.
In terms of earnings reports later this week, on Thursday, we hear from WMS, APO, MT, ARES, ARW, ABG, AXTA, BAX, BCE, BDC, BWA, CCJ, CX, CIGI, COP, DTE, DUK, GTES, HOG, HSY, HMC, NSP, ICE, IPG, ITT, K, KVUE, LNC, MAS, MDU, NFG, PATK, BTU, PM, RL, RXO, SPGI, SNA, SPB, SAVE, TROW, TPR, TPX, THC, TRI, TDG, UA, UAA, WMG, WEX, ZBH, AFRM, ATR, BYD, CPRI, BAP, DXCM, EXPE, FE, FLO, G, PEAK, ILMN, LEG, MTD, MHK, MSI, NGL, PINS, TTWO, TEX, and TFII. Finally, on Friday, AMCX, CTLT, ENB, FTS, MGA, NWL, PEP, PAA, PAGP, and TIXT report.
So far this morning, ARCC, BAM, CG, CMRE, CVS, EPC, EMR, EEFT, HLT, OMF, RITM, UBER, VSH, and XPO all reported beats on both the revenue and earnings lines. At the same time, ATS, ASAZY, BERY, EQNR, PAG, and PFGC all beat on the revenue line while missing on earnings. On the other side, BG, CDW, HAIN, KMT, NBIX, NYT, and REYN missed on revenue while beating on earnings. Unfortunately, ADNT, BABA, GPRE, and YUM missed on both the top and bottom lines. It is worth noting that BG, CVS, HAIN, HLT, KMT, and VSH lowered forward guidance. However, EMR raised its guidance. Finally, it is also well worth noting that even though BABA missed on both lines, the company increased its share buyback program by $25 billion.
In miscellaneous news, Reuters reported US stock buyback programs are speeding up, now well above the average of the past 12 earnings seasons. Companies have announced an average of $6.9 billion of stock buybacks PER DAY in the first three weeks of the Q4 earnings season. This is the highest level at this point since the record $8.2 billion per day at this point of the Q1 2023 reporting period. Elsewhere, surprisingly strong demand resulted in $54 billion in 3-year treasury bonds sold, just ahead of the record-setting $42 billion 10-year bond sale. At the same time, in a big move in foreign markets, both GS and MS endorsed having their clients move their higher-risk emerging markets money from China into India, designating it as a prime investment destination for the next decade.
With that background, it looks like all three major index ETFs are looking to open little changed from Tuesday’s close. DIA is giving us the largest (black) body in the premarket but remains above its T-line (8ema). QQQ is giving us the largest (white) body candle in the early session. And, for its part, SPY is giving us a white-bodied, indecisive candle so far this morning. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the long and short term. However, you would be hard-pressed to call the action of the last several days anything other than consolidation in the rally. In terms of extension, none of the three is far from their 8ema and the T2122 indicator is now back down in the center of its midrange. This means the market has plenty of slack to work with if either side of the market gains traction. As I have been saying for a long time, keep an eye on those 10 huge tech stocks. Whatever direction they decide to go is very likely to call the tune for the rest of the market.
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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The markets began the new week with a bearish tone but it could have been much worse if not for the tech titans as the parabolic rise in NVDA continues to find willing buyers. With Fed members disappointing the market expectations for a first-quarter rate cut bond yields rose rather sharply adding to uncertainty. Today investors will focus on the slew of reports and, we will hear from several Fed members out from under the blackout restrictions. With so much data coming our way plan for challenging price action with whipsaws and big point moves possible.
While we slept Asian markets closed mixed with China and Hong Kong surging as CCP steps up stimulus activities hoping to stem selling triggered by the real estate and manufacturing declines. European markets, unclear about the interest rate outlook, trade mostly higher with modest gains amid the uncertainty. U.S. futures point to a modestly lower open with the Nasdaq fluctuating between gains and losses in the pre-market with a busy day of earnings and Fed speeches ahead.
BP, the oil and gas giant, reported a sharp decline in its underlying replacement cost profit, which is used to measure its net profit, for 2023. The profit dropped to $13.8 billion, almost half of the record $27.7 billion it made in the previous year. The company attributed the fall to the lower oil prices and the impact of the pandemic on the energy demand. To boost its shareholder returns, BP accelerated its share buyback program, announcing that it would repurchase $1.75 billion worth of shares before releasing its first-quarter results. BP also reaffirmed its commitment to buy back $3.5 billion worth of shares in the first half of the year.
Central Huijin, the investment arm of China’s sovereign wealth fund, announced that it has increased its buying of exchange-traded funds (ETFs) that track the performance of China’s domestic stock markets. The move is intended to support the market stability amid the recent turmoil and volatility. China’s securities regulator has also intervened to calm the market nerves, issuing several statements to discourage “malicious” short-selling and other illegal activities. The market turbulence has hit the small- and medium-cap stocks the hardest, with the CSI1000 index, which measures their performance, plunging more than 25% this year.
Palantir, the data analytics and software company, announced its fourth-quarter earnings on Monday after the market closed. The company’s revenue for the quarter rose by 20% from a year ago to $608.4 million, beating the market expectations. Palantir CEO Alex Karp said in a letter to shareholders that the company’s large language models, which use artificial intelligence to process and generate natural language, were in high demand in the U.S. market. He said that the company’s products were helping its customers solve complex problems and achieve their missions.
Yellow, the troubled trucking company, announced on Monday that it had paid back the full amount of a disputed $700 million loan that it received from the U.S. Treasury Department during the Covid-19 pandemic, along with more than $151 million in interest. The company was able to repay the loan after it sold most of its assets, including its shipping centers and real estate, for almost $1.9 billion, with the approval of a bankruptcy judge in Delaware. The loan, which was granted by the Trump administration despite the opposition of the Defense Department, was meant to help Yellow survive the crisis and preserve its role as a critical supplier for the U.S. military.
The stock market started the week with a bearish tone, with the S&P 500 falling 0.3% and the Dow losing 275 points. However, the technical damage would have been much worse if not for the tech giants that continue in the thinnest group of market leaders in my more than 30 years of trading experience. Bonds also suffered on the day, driving yields higher, as markets delayed their expectations for the first Fed rate cut due to better-than-expected economic data. Treasury yields have adjusted to this expectation quickly, with 10-year rates going from 3.82% to nearly 4.15% in just a few trading days. Today a huge number of earnings will drive the bullish or bearish inspiration with little more than Fed member speeches on the economic calendar. That said, the plan for price action remains challenging and volatile.
Markets opened the week a bit lower. The SPY and DIA both opened 0.13% lower, and QQQ opened just on the red side of flat. All three major index ETFs then followed through to the downside, reaching the lows of the day at 10:50 a.m. At that point, all three reversed and rallied in divergent strengths. QQQ seeing the strongest rally, made it back into the opening gap by 12:40 p.m. SPY made it back into its own gap at 2:35 p.m. However, DIA’s shallow rally never got it back to the opening level. All three of them had a modest selloff during the last hour of the day. This action gave us black-bodied, Spinning Top Bear Harami candles in the SYP and QQQ. Meanwhile, DIA printed a black-bodied candle with a good-sized lower wick. DIA also retested its T-line (8ema) while closing back above while the other two major index ETFs did not even retest their own T-lines.
On the day, nine of the 10 sectors were in the red as Basic Materials (-2.12%) and Utilities (-1.96%) were way out in front leading the market lower. On the other end of the performance spectrum, Healthcare (+0.27%) was the only sector that managed to stay in the green. At the same time, the SPY lost 0.36%, the DIA lost 0.73%, and QQQ lost 0.13%. VXX fell almost 4% to close at 14.40 and T2122 plummeted back down into its oversold area to 12.25. 10-year bond yields spiked to 4.164% and Oil (WTI) also recovered to gain 0.77% and close at $72.85 per barrel. So, great news, especially from META (+20.32%) and strong January Jobs data led to uncertainty and fear in the premarket and at the open. However, at that point, the Bulls decided good news is good news and rallied all day until they took profits are the end of the session.
The major economic news released Monday included Jan. S&P Global Services PMI, which came in up but a bit below expectation at 52.5 (compared to a forecast of 52.9 and the December 51.4 reading. At the same time, the S&P Global Composite PMI was also up but a bit below the expected value at 52.0 (versus a 52.3 forecast and a December reading of 50.9). Later January ISM Non-Mfg. Employment was stronger than was predicted at 50.5 (compared to a 49.4 forecast and strongly higher from the Dec. value of 43.8). The January ISM Non-Mfg. PMI was stronger than anticipated at 53.4 (versus a forecast of 52.0 and the December 50.5 reading). The ISM Non-Mfg. Price Index was very hot at 64.0 (compared to the 56.5 forecast and even the 57.4 Dec. value).
In Fed news, Fed Chair Powell sounded the same notes during his Sunday night 60 Minutes interview that he had the prior Wednesday. Powell said it was unlikely the Fed would see enough evidence to begin rate cuts at its March meeting. While not tying the Fed’s hands, this was a rare instance of the Fed specifically saying what is likely to happen (or not happen) at a meeting that is still six months away. Later, Minneapolis Fed President Kashkari said that inflation is making “rapid progress” toward the Fed’s 2% target. However, he also said that a resilient economy means the Fed has more time to study data before acting. Kashkari said, “The implication of this is that…it gives the (Fed) time to assess upcoming economic data before starting to lower the federal funds rate, with less risk that too-tight policy is going to derail the economic recovery.”
After the close, ACM, AMKR, CBT, COHR, FN, ITUB, NXPI, PLTR, SPG, and SKY all reported beats on both the revenue and earnings lines. At the same time, CHX and HI reported misses on revenue while beating on earnings. On the other side, SSD beat on revenue while missing on earnings. However, CCK, FMC, and VRTX missed on both the top and bottom lines. It is worth noting that AMKR, CCK, and SPG lowered their forward guidance. Meanwhile, COHR, and VTRX both raised their guidance.
In stock news, EL said it would cut 3% to 5% of its workforce (meaning 1,850 – 3,100 jobs) due to Chinese buyers backing off from higher-priced luxury goods in favor of low-margin alternatives. At the same time, YNDX (widely known as Russia’s Google) announced a $5.21 billion deal to exit Russia by selling its Russian operation to a group of Kremlin-approved investors. Later, politics reared its head in the Nippon Steel purchase of X for $15 billion as the ex-President said that, if elected, he would immediately block the deal. This, theoretically could lead to a revival of a lesser offer from US-based (and Trump ally-backed) CLF. At the same time, STLA CEO Elkmann denied that the company has any plans for a merger with any other car manufacturers (or specifically French-led PUGOY or Renault). This denial came after an Italian newspaper said on Sunday was studying a merger between the companies. Later, BA announced they had found “mis-drilled holes” in the fuselages of 50 of its 737 MAX planes that have not been delivered yet. This is the latest quality issue for both the company and that product line. Elsewhere, DOCU shares fell on Monday after reports indicated that acquisition talks with multiple hedge funds have stalled as the sides disagree on price. At the same time, META’s internal Oversight Board has determined that an AI deep-fake video suggesting the President is a pedophile does not violate the company’s current content rules (and can remain online). The group went on to say the company’s current rules are too narrow and incoherent related to AI-generated content. Later, SNAP said it would cut 528 employees (10% of staff) as part of a cost-cutting measure. At the same time, SAP said that it would stop buying TSLA vehicles. Later, NSC said Monday that it completed a $1 billion improvement in its infrastructure during 2023. At the same time, CMS announced it has reached a “definitive agreement” to sell its appliance service plan business to a private firm for an undisclosed amount. After hours, PINC announced a $1 billion share buyback program and a $400 million accelerated share repurchase transaction with BAC. At the same time NTCO said it is considering splitting into two companies. Later, NVS announced it will acquire MOR for $2.9 billion.
In stock legal, governmental, and regulatory news, a bill being floated in the US House targets Chinese biotech firm Wuxi Apptec by forbidding federally-funded drugmakers from dealing with the company (among others). The mere anticipation of a potential bill has caused a major selloff of the chares of that company. However, that company is also partners with several western pharma companies, such as PFE, AZN, and GSK. These western companies have not yet taken a hit but are at risk. Later, Reuters reported that the US Dept. of Justice has opened a probe into the ADM accounting practices based on an SEC inquiry. At the same time, the US Dept. of Transportation has begun investigations after videos emerged over the weekend showing human drivers wearing AAPL Vision Pro headsets (and gesturing with both hands) while also driving their TSLA vehicles. Later, a US federal judge set a date of September 9 date for a jury trial in the US DoJ (and a coalition of states) antitrust suit against GOOGL. At the same time, FNB agreed to pay a $13.5 million settlement with the US Dept. of Justice and the state of NC over charges of redline discrimination. Elsewhere, RIO is facing criminal worker safety charges after an employee was seriously injured at a Canadian mine. The charges allege RIO failed to implement and maintain reasonable safety practices and procedures. At the same time, the FAA urged Congress NOT to increase the airline pilot mandatory retirement age prior to the agency conducting more research. (DAL, AAL, and LUV are among the airlines pushing for this increase.) In other FAA news, the agency said that 94% of the BA 737 MAX 9 planes have now been inspected and returned to service following the January mid-air emergency. After the close, the European Medicines Agency granted RARE’s GTX-102 therapy the PRIME (Priority Medicine) status. At the same time, WBD won a dismissal of a class action brought by the OH Attorney General claiming concealed negative financial information prior to the company’s 2022 merger with T. Meanwhile, a US appeals court found that BAYRY (Bayer) is not shielded from lawsuits claiming the company’s Roundup weedkiller caused cancer. (BAYRY had claimed federal regulator approval of the product shielded it from lawsuits over product safety.) At the same time, Reuters reported that RTX was served subpoenas by the SEC related to 2023 disclosures over the use of powdered metals in engines made by its Pratt and Whitney subsidiary.
Overnight, Asian markets were mixed but leaned toward the green side led by a huge Chinese rebound. Shenzhen (+6.22%) Hong Kong (+4.04%), and Shanghai (+3.23%) led the region higher with only four of the 12 exchanges in the red. In Europe, things are even more green at midday with only four of 15 bourses in the red. The CAC (+0.26%), DAX (-0.07%), and FTSE (+0.54%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat. The DIA implies a -0.14% open, the SPY is implying a -0.08% open, and the QQQ implies a -0.05% open at this hour. At the same time, 10-year bonds are unchanged at 4.164% and Oil (WTI) is up six-tenths of a percent to $73.22 per barrel in early trading.
The major economic news scheduled for Tuesday is limited to member Weekly API Crude Oil Stocks (4:30 p.m.) and Fed Mester speaks (noon). The major earnings reports scheduled for before the open are include AGCO, ALFVY, AME, ARMK, ARCB, BP, CARR, CNC, CHKP, CEIX, CMI, DD, LLY, ENR, FSV, FI, ULCC, IT, GRHC, HTZ, INGR, J, KKR, LEA, LIN, NJR, NVT, PNM, SCSC, ST, SPR, SPOT, TM, WAT, WTW, and XYL. Then, after the close, AMRK, ASTL, AB, AMCR, DOX, AFG, AMGN, AIZ, ATO, EQH, CSL, CMG, CINF, CRUS, CNO, CTSH, EW, PLUS, EXEL, F, FTNT, GILD, IEX, JKHY, KD, LUMN, MASI, NBR, OI, OMC, PRU, QGEN, SNAP, SONO, SNEX, VLTO, VFC, VSAT, WFRD, WERN, WU, and YUMC report.
In economic news later this week, on Wednesday we get Dec. Exports, Dec. Imports, Dec. Trade Balance, Weekly EIA Crude Oil Inventories, Dec. Consumer Credit, and Fed member Bowman speaks. On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported. Then Friday there is no major news planned.
So far this morning, ARMK, CNC, CHKP, CEIX, LLY, ENR, FI, GEHC, J, KKR, LIN, MLI, WAT, WTW, and XYL all reported beats on both the revenue and earnings lines. At the same time, AME, ARCB, CARR, DD, ULCC, IT, INGR, NVT, and PNM missed on revenue while beating on earnings. On the other side, LEA and ST beat on revenue while missing on earnings. Unfortunately, ALFVY, BP, NJR, and SPOT missed on both the top and bottom lines. It is worth noting that DD, ST, and SPOT lowered their forward guidance. However, NJR raised its forward guidance.
In Global news, on Monday, China’s securities regulator said it would tighten scrutiny of margin financing and short selling to stabilize their stock markets. The group also said it would be providing new guidelines to brokers, giving investors more time to answer margin calls. At the same time, Chinese brokers who buy mainland shares for their offshore units were forbidden from reducing their positions. Some hedge funds were banned from placing sell orders completely while others were just barred from cutting stock positions in their leveraged market-neutral funds. These were the primary reasons behind Tuesday’s massive rebound rally. At the same time, in Germany, the government unveiled a $17 billion plan to subsidize the conversion of natural gas power plants to hydrogen fuel to supplement the country’s intermittent renewable power generation program. Over the longer term, this could impact both US LNG exports to Europe and the leverage Russia holds over European energy demands. Finally, despite missing on both the top and bottom lines, BP helped UK stocks rally when it announced it will buy back $3.5 billion of its stock during the first half of 2024.
With that background, it looks like all three major index ETFs are looking to open little changed from Monday’s close. DIA is giving us the smallest body (true Doji) but is retesting its T-line in the early session. Meanwhile, SPY is printing another inside-day type Spinning Top in the premarket. QQQ is giving us the largest (black) candle body in the early session but again is little changed from Monday’s closing price. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the long and short term. However, we are also in a consolidation of the rally at the very least. In terms of extension, none of the three is far from their 8ema. However, T2122 is now back down in it oversold region. This means the market has slack to work with to run in either direction, but the bulls may have a little more room to work. With that said, it is worth noting that the market can stay oversold longer than we can stay solvent predicting reversals too early. So, be careful and follow the trend.
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
Markets surged and more records were made as the investors celebrated the big tech profits. However, the Employment Situation rained on the tech party coming in much hotter than expected causing bond yields to rally as rate worries grew. We have an overall lite week on the economic calendar, however, there will be Fed speeches a plenty as they come out from under their blackout period. The focus will be on the busy earnings calendar so plan on some challenging price volatility.
Overnight Asian markets closed mostly lower with the Nikkei the only index posting gains, up 0.54% with Shanghai leading the selling down 1.02%. European markets trade green across the board this morning kicking off the week on a positive note. U.S. futures have rallied sharply off the overnight lows fueled by earnings results, however, continue to suggest a flat to negative open concerned about Powell’s rate comments and rising bond yields.
Economic Calendar
Earnings Calendar
Notable reports for Monday include AMG, APD, ALGT, AMKR, DRBR, CBT, CAT, CHGG, COHR, CCK, EL, FN, GBDC, HI, IDXX, JJSF, KFRC, KRC, MCD, NXPI, ON, PLTR, RMBS, SPG, SSD, SKY, TSN, VRNS, & VRTX.
News & Technicals’
In an interview with “60 Minutes” on Sunday, Federal Reserve Chair Jerome Powell said that the central bank will be cautious about lowering interest rates this year. He said that the Fed needs more evidence of a strong economic recovery before it starts to reduce the cost of borrowing. Powell also acknowledged that the Fed’s previous interest rate hikes had some negative effects on the economy. However, he said that the impact was not as severe as some had feared.
A bipartisan group of senators unveiled the details of their long-awaited bill to provide financial assistance to Ukraine, Israel, and the U.S. southern border. The bill, which was first proposed by President Joe Biden in October, aims to support the security and stability of these regions amid rising threats and challenges. The bill has faced months of delays and disagreements in the Senate, where some lawmakers wanted to prioritize different aspects of the aid package. The bill will also face a tough battle in the House, where Republicans have introduced their bill that would only fund Israel.
Turkey’s inflation soared to its highest level in decades in January, as prices of food, drinks, tobacco, transportation, and housing surged. The inflation rate rose by 6.7% from December, the biggest monthly increase since August, and by nearly 65% from a year ago. The inflation figures were released two days after Turkey named a new central bank governor, Fatih Karahan, who faces the daunting task of restoring confidence in the Turkish lira and stabilizing the economy.
The stock market ended the week on a high note as it celebrated big tech profits with the Mag7 totaling a full 33% of the SP-500. The U.S. economy added more jobs than expected in January with the nonfarm payroll increasing by 353,000, far exceeding the forecast of 185,000 new jobs. This boosted the U.S. Treasury yields, with the 10-year yield rising by 0.14% to 4.02%. The 2-year yield, which is seen as an indicator of the future fed funds rate, also increased by 0.16% to about 4.36%. Stocks managed to rise despite the higher yields on Friday. Today we have a busy day on the earnings calendar with PMI, ISM bond auctions, and Fed speakers to provide bullish or bearish inspiration.
The Bulls were in charge all day Friday with the exception of some profit-taking at the end of the session. SPY opened up just 0.09%, DIA gapped down 0.31%, and QQQ gapped up 0.41% after great big tech earnings (AMZN and META) and strong January Payrolls data. Then from the open, markets rallied steadily all day long until a selloff in the last 45 minutes, especially the last 5 minutes of the day on the dark pool data. This action gave us large white-bodied candles in all three major index ETFs, with an upper wick. All three printed new all-time highs and new all-time high closes. Obviously, all three are above their T-line (8ema). This happened on slightly above-average volume in the QQQ, SPY was just a tad less-than-average volume, and DIA had less-than-average volume.
On the day, six of the 10 sectors were in the red as Technology (+1.51%) was by far the leading sector dragging the market higher. On the other end of performance, Communications Services (-2.44%) was by far the lagging sector in the rally. At the same time, the SPY gained 1.02%, the DIA gained 0.33%, and QQQ gained 1.73%. VXX was just on the red side of flat to close at 14.99 and T2122 dropped back further toward the center of its mid-range to 56.95. 10-year bond yields climbed to 4.026% and Oil (WTI) fell 2.30% to close at $72.12 per barrel. So, great news, especially from META (+20.32%) and strong January Jobs data led to uncertainty and fear in the premarket and at the open. However, at that point, the Bulls decided good news is good news and rallied all day until they took profits are the end of the session.
The major economic news released Friday included Jan. Avg. Hourly Earnings, which came in twice as strong as expected at +0.6% on a month-on-month basis (compared to a forecast of +0.3% and December’s +0.4%). On a year-on-year basis that was +4.5% (versus a forecast of +4.1% and a December value of +4.3%). So, given inflation is down, Americans saw real wage growth again in January. At the same time, January Nonfarm Payrolls nearly doubled what was predicted at +353k (compared to the forecast of +187k and even stronger than the December +333k reading). This was true of the Jan. Private Nonfarm Payrolls as well which were up 317k (versus a +155k forecast and a December reading of +278k). So, the economy continues to create jobs at a massive rate, laughing in the face of the recession predictors. The January Participation Rate remained steady at 62.5% (a tick lower than the forecast of 62.6% but in line with December’s 62.5%). This all led to a slightly better than anticipated Jan. Unemployment Rate of 3.7% (versus a forecast of 3.8% but in line with the Dec. 3.7% value). It is worth noting that this is two consecutive years that the unemployment rate has been less than 4%. (This is something the US has not seen in more than 50 years.)
Later, December Factory Orders rose but were a tick lower than expected at +0.2% (compared to the +0.3% forecast and far lower than the massive December +2.6% reading). At the same time, Michigan Consumer Sentiment was also stronger than expected at 79.0 (versus a 78.8 forecast and much higher than December’s 69.7). Michigan Consumer Expectations also was stronger than predicted at 77.1 (above the forecast of 75.9 and far above the Dec. 69.7). Michigan 1-year Inflation Expectations were flat at 2.9% (compared to a 2.9% forecast but down from the previous 3.1% expectation). Finally, Michigan 5-year Inflation Expectations also stayed flat at 2.9% (which was a tick higher than the 2.8% forecast but in line with the prior month’s 2.9%). Overall, the only possible way to spin that data as not good would be to say that this may, in theory, give the Fed pause about a March rate cut. (However, the Fed already told us that on Wednesday.) So, job growth is still incredible, real wages are growing, and consumers have strong current sentiments and expectations.
In Fed news, Fed Governor Bowman said Friday that inflation is falling and she expects it to decline further. However, she also said there are some worries about upward price pressures. She warned against cutting rates too soon. Specifically, Bowman said, “My baseline outlook is that inflation will decline further with the policy rate held at the current level.” She noted the declines in inflation are “encouraging.” However, she said, “I will remain cautious in my approach to considering future changes in the stance of policy.” Later, Chicago Fed President Goolsbee told PBS “The economy still feels strong…the headline numbers (today) were almost breath-taking…and this is in the context that inflation has been coming in better than expected as well…so it is quite positive on both sides.”
In stock news, Reuters reported that Jeff Bezos will be selling 50 million shares of AMZN by January 31, 2025. At the same time, the UAW announced that more than 30% of HYMTF (Hyundai Motors) AL plant employees have signed cards seeking to join the union. (At 70%, the UAW would seek recognition and the plant would become a union shop.) Later, AAPL’s $3,500 Vision Pro “mixed reality” headset hit Apple stores on Friday. This was the company’s first new product in seven years. However, it will be a tough sell at its high price, plus weighing 1.4 pounds (without battery) and is being marketed like a computer you wear on your head all day. Friday marked a milestone with META’s great report leading to the largest single-day gain in market cap ever as it gained more than $205 billion. (The prior record holders were AAPL and AMZN both at +$190 billion in a single day in 2022.)
In stock legal, governmental, and regulatory news, on Friday, the NHTSA upgraded their probe of power steering problems on 2023 TSLA cars. This is another step toward a potential recall. At the same time, BLKB agreed to a settlement with the FTC related to a data breach, agreeing to internal policy and procedure changes. No fine was levied. Meanwhile, the UK antitrust agency launched an investigation into the $14 billion VOD acquisition of CKHUF. Later, in other TSLA news, the company agreed to pay a $1.5 million fine to settle a lawsuit brought by 25 CA counties for mishandling, purposefully mislabeling, and disposing of hazardous waste in landfills in those counties. At the same time, a US appeals court announced it would hear arguments in June related to the JBLU and SAVE appeal hoping to overturn a lower court (and FTC) blocking their $3.8 billion merger. Elsewhere, a federal judge certified a class action lawsuit against AAPL as customers allege the company has monopolized the iPhone app market by banning purchases of apps from anywhere other than the Apple app store. The suit will cover anyone who has spent $10 or more in the AAPL app store. (This follows after AAPL agreed to stop this policy in Europe due to EU legal requirements.)
Overnight, Asian markets were strongly in the red. Singapore (-1.43%), Shenzhen (-1.13%), and Shanghai (-1.02%) led that region lower. Only Japan (+0.54%) and Taiwan (+0.20%) were able to hold onto green territory. Meanwhile, in Europe, 12 of the 15 bourses are in the green at midday. The CAC (+0.13%), DAX (+0.28%), and FTSE (+0.53%) are leading the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a modestly down start to the day. The DIA implies a -0.16% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.15% open at this hour. At the same time, 10-year bond yields are up to 4.092% and Oil (WTI) is down 0.94% to $71.60 per barrel in early trading.
The major economic news scheduled for Monday includes Jan. S&P Global Services PMI and S&P Global Composite PMI (both at 9:45 a.m.), Jan. ISM Mfg. Employment and Fed member Bostic speaks at 2 p.m. The major earnings reports scheduled for before the open include AMG, APD, ALGT, CAT, CNA, EL, IDXX, MCD, ON, TKR, and TSN. Then, after the close, ACM, AMKR, CBT, CHX, COHR, CCK, FN, FMC, HI, ITUB, NXPI, PLTR, SPG, SSD, SKY, and VRTX report.
In economic news later this week, on Tuesday Fed member Mester speaks and Weekly API Crude Oil Stocks are reported. Then Wednesday we get Dec. Exports, Dec. Imports, Dec. Trade Balance, Weekly EIA Crude Oil Inventories, Dec. Consumer Credit, and Fed member Bowman speaks. On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported. Then Friday there is no major news planned.
In miscellaneous news, Reuters reported Friday that so far, about 80% of Q4 earnings reports have beat analyst expectations. (For reference, 76% of S&P 500 companies have beat analyst expectations on average in the last four quarters.) Overall, S&P 500 earnings are now expected to increase 7.8% in Q4 relative to the same quarter in 2022. (This is up from a +6.4% estimate as of Thursday and the +4.7% estimate at the beginning of January.) Elsewhere, even as Congress is deadlocked and unable to pass any of the budget proposed early in 2023, the White House announced President Biden will release his proposed budget for 2024 on March 11. (Assuming there are no more continuing resolutions to push things down the road, this will be 3 days after the current CRs from 2023 expire.)
In global news, the UN Food and Agriculture Organization said food prices fell to near a 3-year low in January. The report noted, “Global wheat export prices declined in January driven by strong competition among exporters and the arrival of recently harvested supplies in the southern hemisphere countries.” Elsewhere, the US began a series of airstrikes against Iranian-backed militias in Syria and Iraq on Friday. These strikes went beyond just the militias and also targeted Iranian Quds Force personnel and facilities. (Quds force is part of the Iranian Revolutionary Guard.) The Pentagon said it conducted 125 strikes (both missile and aircraft-launched bombings) on 85 command and control targets across 7 unique locations. The Pentagon spokesman made a point of telling the media this was just the beginning of the reprisals and would continue at the times and places of the US’s choosing. On Saturday, a second day of strikes were launched at additional targets in both Iraq and Syria as well as 30 Houthi targets in Yemen. 40 militants were reported killed on Saturday. On Sunday the airstrikes on the Houthi continued.
So far this morning, CAN, EL, IDXX, L, and TKR reported beats on both the revenue and earnings lines. Meanwhile, AMG, CAT, and MCD all missed on revenue while at the same time beating on earnings. Unfortunately, APD missed on both the top and bottom lines. It is worth noting that both APD and TKR lowered their forward guidance. For what it is worth, MCD claimed the Israel – Hamas war was a key to their revenue miss, citing boycotts in Arab countries (who feel MCD supporting attacks on Palestine) as a cause of its revenue miss.
With that background, it looks like all three major index ETFs are giving us indecisive (Doji-like), white-bodied, inside-day-type candles not far below the Friday close. QQQ looks the strongest so far. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the longer term and short-term. In terms of extension, none of the three is too far stretched from the 8ema. T2122 is also still in the center of its mid-range. This means the market has slack to work with to run in either direction if either the Bulls or Bear can gain enough momentum to do it.
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
Thursday was a bit of a roller coaster ride with the Bulls getting the best of the deal. SPY gapped up 0.35%, DIA opened flat at +0.01%, and QQQ gapped up 0.44%. At that point, all three major index ETFs ran that roller coaster up and then back down, bottoming out at about 11:15 a.m. (DIA had crossed below the prior close by then, but SPY and QQQ were still in the top part of their opening gap.) From there, all three began a steady and at times briefly volatile rally the entire rest of the day. SPY and DIA both closed on their highs, while QQQ closed just 31 cents short of its high. SPY and QQQ joined DIA by crossing back above their T-line (8ema). This action left all three as large, white-bodied candles. The DIA printed a Bullish Harami after bouncing up off its T-line. This happened on just less-than-average volume in the three index ETFs.
On the day, all 10 sectors were in the green as Consumer Defensive (+2.05%), Basic Materials (+2.05%) and Utilities (+1.96%) led the way higher. On the other end of performance, Financial Services (+0.03%) barely participated in the rally. At the same time, the SPY gained 1.31%, the DIA gained 0.98%, and QQQ gained 1.18%. VXX lost just 0.79% to close at 15.01 and T2122 climbed into the top half of its mid-range to 68.72. 10-year bond yields dropped again to 3.88% and Oil (WTI) fell 2.45% to close at $73.99 per barrel. So, mostly good earnings and good economic data led us to a gap higher. After some volatility, the Bulls stepped in to lead a rally most of the day with traders taking prices out on the highs.
The major economic news released Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 224k (compared to a forecast of 213k and the prior week’s 215k reading). At the same time, Weekly Continuing Jobless Claims also came in a bit hot at 1,898k (versus the forecast of 1,840k and the previous week’s 1,828k value). Meanwhile, Q4 Unit Labor Costs grew far less than predicted at +0.5% (compared to a forecast of +1.3% but still higher than Q3’s decline of 1.1%). This led to a Q4 Nonfarm Productivity gain much higher than anticipated at +3.2% (versus a forecast of +2.4% but again far less than Q3’s +4.9% increase). Later, the January S&P Global Mfg. PMI was stronger than expected at 50.7 (compared to the 50.3 forecast and the prior month’s downwardly revised 47.9 reading). Then at 10 a.m., Dec. Construction Spending also came in much stronger than predicted at +0.9% (versus a forecast of +0.5% but in line with November’s +0.9%). At the same time, ISM reported January Mfg. Employment was slightly above expectations at 47.1 (versus a 47.0 forecast and down from the previous month’s 47.5 reading). January ISM Mfg. PMI came in well above predictions at 49.1 (compared to the 47.2 forecast and 47.1 prior month). However, the January ISM Mfg. Price Index came in very hot at 52.9 (versus a 46.0 forecast and a 45.2 prior month index). Finally, after the close, the Fed Balance Sheet came down significantly to $7.630 trillion versus the prior week’s $7.677 trillion (which was a $47 billion decline).
After the close, AMZN, AAPL, TEAM, CLX, DECK, DXC, EMN, ENSG, HIG, HOLX, HLI, KMPR, LPLA, META, MTX, NOV, OTEX, POST, RGA, and X all reported beat on both the revenue and earnings lines. Meanwhile, HUBG, MCHP, SKX, and SKYW missed on revenue while beating on earnings. Unfortunately, COLM and GEN missed on both the top and bottom lines. It is worth noting that TEAM, CLX, DECK, ENSG, META, and POST all raised their forward guidance. However, COLM, DXC, MCHP, and SKX lowered guidance.
In stock news, BLBD announced a $60 million stock buyback program. Later, during its conference call, MRK said it is in the market for acquisitions of up to $15 billion to prepare for the revenue decline of its Keytruda (the top-selling prescription drug, with $25 billion in sales in 2023). Keytruda goes off-patent at the end of the decade and is expected to top out at $30 billion per year by 2026. At the same time, META announced it will be deploying an in-house designed custom chip in its data centers (to reduce META’s dependence on NVDA chips) to support its push into AI. For reference, recently CEO Zuckerberg said it will have 350,000 of NVDA’s “H100” GPUs in place by the end of the year. H100’s sell for $29,000. Later, BECN announced it had acquired private Roofer’s Supply for an unspecified sum to greatly expand its presence in the Southeast US. Meanwhile, JPM, BAC, JEF, and DB are in talks to provide $8 billion in financing for DOCU to take itself private through a leveraged buyout. At the same time, one day after a Delaware judge threw out Elon Musk’s $56 billion pay package, Musk said he would hold a shareholder vote on moving TSLA’s state of incorporation from DE to much more compliant TX. Elsewhere, CSX announced it reached an agreement with four more groups of workers and will extend paid sick leave to employees represented by those unions. Later, WCN announced they had completed the acquisition of Canadian firm Secure Energy Services for roughly $1.4 billion. At the same time, INGR announced it had sold its South Korean unit for $294 million. Later, the Wall Street Journal reported that INTC will delay its $20 billion fab project in OH, citing a slowdown in chip orders. The OH facilities are now not expected to finish construction until late 2026.
In stock legal, governmental, and regulatory news, the EU said Thursday that it has begun looking into how big tech companies (GOOGL, AMZN, META, BABA, VOD, TSLA, and AAPL) have moved into the financial services sector. This is a joint look by the EU’s banking, insurance, and securities regulators and is based on concern that big tech will increase instability in those sectors across Europe. Later, a Federal Appeals Court dismissed an appeal by investors which accused the world’s 10 largest banks (BAC, BCS, BNPQY, C, GS, JPM, MS, NWG, and UBS…CS was also a defendant but was acquired by UBS) of antitrust violations for rigging prices in the US Treasury market. Later, the White House said it had sent out opening offers in the first-ever price negotiations to the manufacturers of 10 high-cost drugs (including BMY, PFE, JNJ, and MRK). At the same time, a coalition of labor groups filed a lawsuit seeking to block an MA state ballot initiative saying that ride-share and delivery drivers would be treated as contractors instead of employees in the state. UBER, LYFT, DASH, and CART all were part of the drive to get the initiative on the ballot, but the suit alleges that the petitions gathered by the industry groups covered several different and vaguely worded proposals (such as limiting a company’s liability for accidents) that were worded to confuse petition signers. Elsewhere, the FDA granted CABA “orphan drug status” for its investigational therapy for myositis. This status grants them tax credits waived fees, and 7-years of exclusive marketing rights for the drug. At the same time, the FDA gave clearance to HOLX for its AI-based cervical cancer screening system. After the close, a federal appeals court threw out a $366.2 million verdict against FDX for racial bias. (In an odd ruling, the appeals court said it found sufficient evidence to support the plaintiff’s claims but reduced the pain and suffering award by 75% to 248k and said she was not entitled to any of the $365 million in punitive damages. In essence, saying FDX was indeed guilty but the company should not be forced to pay for firing an employee that reported racial discrimination. The basis of the ruling was that the plaintiff had not proven the company did it with malice toward her specifically as opposed to anybody that reports racial discrimination.)
So far this morning, ABBV, BSAC, BMY, BBU, BEP, CBOE, CHD, CI, REGN, and SAIA have all reported beats to both the revenue and earnings lines. At the same time, AON, CHTR, and LYB beat on revenue while missing on earnings. On the other side, CVX and XOM missed on revenue while beating on earnings. There were no reported misses on both the top and bottom lines. It is worth noting that BMY also raised its forward guidance.
Overnight, Asian markets leaned toward the green side with only the three Chinese exchanges in the red while the other nine were green. Shenzhen (-2.24%) and Shanghai (-1.46%) were the only significant losers while South Korea (+2.87%) Australia (+1.47%), Thailand (+1.18%), and Singapore (+1.17%) paced the gainers. In Europe, only Russia (-0.01%) is very marginally red while the other 14 exchanges are well into the green at midday. The CAC (+0.68%), DAX (+0.85%), and FTSE (+0.50%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed but green start to the day. The DIA implies a +0.11% open, the SPY is implying a +0.67% open, and the QQQ implies a +1.13% open at this hour. At the same time, 10-year bond yields are up very slightly to 3.884% and Oil (WTI) is just on the red side of flat at $73.74 per gallon in early trading.
The major economic news scheduled for Friday include Jan. Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, and Jan. Unemployment Rate (all at 8:30 a.m.), Dec. Factory Orders, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations (all at 10 a.m.). The major earnings reports scheduled for before the open are include ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW. There are no earnings scheduled for after the close.
It is worth noting that the huge beats by AMZN and META are leading to the global rally we are seeing this morning. Despite the company’s job cuts in 2023, the company delivered better-than-expected profits, its first-ever quarterly dividend, and it announced a $50 billion stock buyback program. However, this is tempered somewhat by AAPL, which beat but is worrying markets because it reported slowing iPhone sales in China (which represents 20% of company sales). There is also renewed angst over regional banks after NYCB was down another 11% Thursday on top of Wednesday’s record 38% plunge.
In miscellaneous news, JPM said Thursday that January saw a record for the US issuance of institutional leveraged loans. This happened as falling borrowing costs enticed many companies to borrow. $140.1 billion net was borrowed for the month, including $51.4 billion in refinancing with the rest made up of new debt. Elsewhere, IBKR reported an increase in trading activity in January, up 11% from 2023 and up 12% from December. Margin loan balances also increased 12% over January 2023 to $44.3 billion. Meanwhile, the US House of Representatives has scheduled a vote on a bill aimed at overturning the Biden Administration pause in LNG project approvals until a climate impact study is completed. However, this is a political stunt by the GOP since the bill stands virtually no chance of approval in the Senate.
In geopolitical news, the EU agreed on a deal to provide Ukraine with $54 billion in financial aid after Hungarian Putin-puppet Orban finally agreed. In the announcement, the EU shamed the US saying they hope their example encourages the US to do its fair share of supporting democracy by backing Ukraine.
With that background, it looks like we are headed to a strong start to the day (ahead of January Jobs data). Both SPY and DIA gapped up in the premarket and are at new all-time highs. putting in white body candles after the start of the early session. QQQ made the biggest premarket gap up but has not reached its all-time high yet (although it is not far away) and it has put in an indecisive Doji candle since then in the early session. All three major index ETFs are above their T-line (8ema). So, the Bulls remain in control of the trend in the longer term and short-term. In terms of extension, none of the three is too far stretched from the 8ema. T2122 is also still in its mid-range. This means the market has room to run in either direction if the Bulls or Bear can gain enough momentum to do it. Also, continue to keep an eye on those Tech Big Dogs. If those 7-10 stocks lead in one direction, it’s nearly impossible for the rest of the market to do anything but follow given their trading volumes. Finally, remember that its Friday. So, pay yourself and prepare your account for the weekend.
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
Wednesday was a bearish day with gaps lower after GOOGL, MSFT, and AMD all beat but disappointed the market. SPY gapped down 0.44%, QQQ gapped down 1.05% and DIA was the exception that proves the rule opening 0.17% higher. At that point, SPY and QQQ sold off for an hour before trading sideways until 2 p.m. Meanwhile, DIA just meandered sideways after the open crossing and recrossing the opening gap until 2 p.m. When the Fed announced no rate cut we saw a modest knee-jerk lower in all three major index ETFs. However, this more than recovered by 2:30 p.m. Then when Chair Powell said the FOMC is not ready to cut rates yet and implied doubt about a March start to cuts, all three sold off hard until 3 p.m. and then drifted lower into the close. This action gave us an Evening Star that crossed down the T-line (8ema) in the SPY. At the same time, DIA gave us a Bearish Engulfing candle but did not cross below its T-line. QQQ moved the most, gapping down through its T-line and giving us a large black candle with only an upper wick.
On the day, all 10 sectors were in the red as Technology (-2.42%) was way out in front leading the way lower. At the same time, the defensive plays Healthcare (-0.34%) and Utilities (-0.43%) holding up better than the other sectors. Meanwhile, the SPY lost 1.63%, DIA lost 0.81%, and QQQ lost 1.96%. Meanwhile, VXX popped up 5.07% to close at 15.13 and T2122 dropped all the way down through its mid-range to end just above oversold territory at 22.05. 10-year bond yields plummeted to 3.912% and Oil (WTI) dropped 2.61% to close at $75.79 per barrel. So, markets started lower on future (not current) earnings worries among the big tech names. Then we trod water for most of the day. Even the Fed announcement was basically a non-event since it was very widely anticipated. However, Fed Chair Powell’s words shocked traders with fear we won’t get a March rate cut, and that flushed the market the rest of the day. This all happened on above-average volume in the SPY and DIA as well as well-above-average volume in the QQQ.
The major economic news released Wednesday included January ADP Nonfarm Employment Change, which came in well below expectations at +107k (compares to a forecast of +145k and well below the prior reading of +158k). Later, Q4 Employment Cost Index also came in below predictions at +0.9% (versus a forecast of +1.0% and the Q3 reading of +1.1%). Later on, January Chicago PMI also came in a bit light at 46.0 (compared to the 48.0 forecast and the prior 47.2 value). Then EIA Weekly Crude Oil Inventories showed an inventory build of 1.234 million barrels (versus a forecasted drawdown of 0.217 million barrels and far higher than the previous week’s 9.233-million-barrel drawdown.
In Fed news, the FOMC held the Fed Funds target rate steady at 5.25% – 5.50%. It also removed language saying it was willing to keep increasing rates but also language that indicated inflation was headed back toward its 2% inflation goal. In addition, the statement added language indicating it is not yet ready to cut rates. The statement said, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” More importantly, Fed Chair Powell commented on this, saying, “I don’t think it’s likely that the committee will reach a level of confidence by the March meeting (to lower rates…but that’s to be seen.” Powell also said, “Inflation has eased over the past year, but remains elevated.” He went on, “The Fed’s interest rate target is likely at its peak for this tightening cycle” …and “the Fed will likely cut rates at some point this year.” Finally, Powell said, “we are not declaring victory, we think we still have a way to go.”
After the close, ALGN, AVB, AXS, CCS, CMPR, CTVA, CACC, FLEX, MTH, MEOH, NXT, PTC, QRVO, QCOM, SEIC, SIGI, and TTEK all reported beats on both the revenue and earnings lines. At the same time, BHE, BOOT, THG, and UGI all missed on revenue while beating on earnings. On the other side, MET beat on revenue while missing on earnings. Unfortunately, AFL, BV, CHRW, LSTR, and VSTO all missed on both the top and bottom lines. It is worth noting that BOOT, CTVA, FLEX, and LSTR lowered forward guidance. However, CCS, NXT, QRVO, and TTEK raised their own guidance.
In stock news, NVAX announced it will lay off 12% of its workforce (about 240 people) in a cost-cutting move for the cash-strapped biotech. At the same time, Reuters side that Byron Allen had submitted a $30 billion offer to buy PARA, including both debt and equity. (This came hours after Bloomberg had reported the offer was $14.3 billion for the outstanding shares.) Later, META CEO Zuckerberg apologized to parents (for the damage social media has done) after Senators of both parties dragged the CEOs of META, SNAP, AAPL, X (Twitter), TikTok, GOOGL, and others over the coals for a lack of monitoring, age restriction, and parental reporting of inappropriate social media content and targeting of children. (Coincidentally, I’m sure, many of the companies subpoenaed instituted new policies covering overuse by children as well as various content age restrictions within the last week.) At the same time, financial stocks took a hit Wednesday as NYCB cut its dividend after posting a surprise loss. (NYCB closed down 37.67% on the news.) Later, CI announced it had sold its Medicare business unit to HCSG for $3.3 billion. Elsewhere, ADM closed its acquisition of flavor company Fuerst Day Lawson. Later, TSLA announced it will buy equipment to expand its NV factory to produce Lithium batteries from its Chinese supplier CATL (a controversial partner that has F under attack for partnering with in MI). TSLA says the move will reduce its costs for batteries.
In stock legal, governmental, and regulatory news, EBAY agreed to pay $59 million and upgrade its compliance measure to settle US Dept. of Justice charges that the company sold pill-making equipment to criminals making counterfeit drugs. Later, BA was sued by shareholders alleging the company prioritized short-term profit over safety, and misled them about the company’s commitment to making safe aircraft. At the same time, a group of 25 CA counties sued TSLA alleging the company mishandled hazardous waste at its facilities in that state. (The core allegation is that TSLA regularly mislabel hazardous waste and sends it to landfills in those 25 counties.) The law being cited calls for civil penalties of $70k per day per violation. Later, the US Dept. of Health and Human Services announced 2025 reimbursement rates for Medicare Advantage programs that show a total increase of 3.7%. At the same time, a US District Judge dismissed DIS’s lawsuit against FL Governor DeSantis and members of his appointed state board. In the dismissal, the judge ruled DIA lacked standing to sue the governor or state Sec. of Commerce. Elsewhere, the FAA said its previously announced comprehensive audit of BA production will include all elements of production at fuselage supplier SPR.
Overnight, Asian markets were evenly mixed with five exchanges in the red, six in the green, and one remains unchanged. Australia (-1.20%) was by far the biggest loser (by half of a percent) while South Korea (+1.82%) was by far the biggest gainer (by more than one percent). Meanwhile, in Europe, we also see a mixed board at midday. The CAC (-0.69%), DAX (-0.09%), and FTSE (+0.45%) lead the mixed region in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day. The DIA implies a +0.11% open, the SPY is implying a +0.40% open, and QQQ implies a +0.57% open at this hour. At the same time, 10-year bond yields are up a bit to 3.944% and Oil (WTI) is up nine-tenths of a percent to $76.52 per barrel in early trading.
The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 a.m.), S&P Global Mfg. PMI (9:45 a.m.), Dec. Construction Spending, Jan. ISM Mfg. Employment, Jan. ISM Mfg. PMI, Jan. ISM Mfg. Price Index (all at 10 a.m.), and Fed Balance Sheet (4:30 p.m.). The major earnings reports scheduled for before the open are include FLWS, ATI, MO, ATKR, BALL, BDX, BR, BIP, BC, CAH, CMS, DLX, DOV, ETN, EPD, RACE, HON, HII, ITW, IP, JHG, KEX, LANC, LAZ, MKL, MRK, PH, PTON, PBI, DGX, RVTY, RCI, RCL, SBH, SNY, SNDR, SIRI, SR, SWK, TSCO, TT, WNC, WEC, and WRK. Then, after the close, AMZN, AAPL, TEAM, CLX, COLM, DECK, DXC, EMN, GEN, HIG, HOLX, HLI, HUBG, KMPR, LPLA, META, MCHP, MTX, NOV, OTEX, POST, RGA, SKX, SKYW, and X report.
In economic news later this week, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Dec. Factory Orders, 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, ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW report.
So far this morning, MO, ATKR, BR, BIP, CAH, ETN, EPD, RACE, HII, KEX, LAZ, MRK, PTON, PBI, DGX, RVTY, SBH, SHEL, SKFRY, and SR all reported beats to both the revenue and earnings lines. At the same time, FLWS, BALL, BDX, CMS, DLX, DOV, FCFS, HON, IP, RCL, SIRI, SWK, TAK, TT, WNC, and WEC all missed on revenue while beating on earnings. On the other side, GOOS beat on revenue while missing on earnings. Unfortunately, BC, ING, SNY, and WRK missed on both the top and bottom lines. It is worth noting that BC, DOV, and DGX lowered forward guidance. However, CAH, MRK, and RCL raised their guidance.
In miscellaneous news, CENTCOM announced Wednesday that the US had destroyed a Houthi surface-to-air missile that presented an imminent threat to US aircraft. Later, a US Destroyer intercepted a Houthi anti-ship missing in the Gulf of Aden. Meanwhile, the US carried out airstrikes against “a number of Houthi drone sites.” So, the Red Sea and Suez Canal remain to be hotspots as the Israeli invasion of Gaza continues. At the same time, the US House of Representatives is set to vote on a bipartisan package of tax breaks for businesses (making R&D and capital expenses and capital investments deductible through at least 2025). However, the measure would require a two-thirds majority to pass. The bill also modestly increases Child Tax Credits for low-income taxpayers.
In China news, FBI Director Wray warned a House Select Committee Wednesday that “China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike.” Wray said that Chinese government-backed hackers are targeting things like water treatment plants, transportation, electrical infrastructure, as well as oil/natural gas pipelines. Elsewhere, Bloomberg reported Wednesday evening that China is now openly engaged in a massive banking system overhaul. Reportedly, Beijing is merging hundreds of rural lenders into giant regional banks. This process has been slowly and quietly going on in the background since 2022. However, the process has greatly accelerated in the last month as the country seeks to tackle the $7 trillion credit risk amidst a Chinese real estate collapse. (For reference on scope, China is said to have between 1.5 and 3 BILLION unoccupied housing units nationally. This is because the government has a strong record of seizing bank deposits. So, for years or decades, ordinary Chinese people have banded together to invest their savings in investment properties as a way to save with less risk of confiscation. This resulted in a huge glut of unused, non-producing, and unsaleable housing…leading to massive numbers of loan defaults.)
With that background, it looks like (at least ahead of the economic data dump) we are getting a modestly bullish rethink of the Fed. All three major index ETFs opened the premarket higher and are putting in small, white-bodied candles so far in the early session. SPY is retesting its T-line (8ema) and all three are showing inside candles (Bullish Harami type) for the premarket. DIA remains above its T-line and QQQ is still below and not yet retesting. None of the three have broken their uptrend lines, but all three are close to the trend. So, the Bulls remain in control of the trend in the longer term but after yesterday’s candle, the very short-term trend has to be bearish. In terms of extension, none of the three is too far stretched from the 8ema. T2122 has also fallen but remains outside of its oversold range. This means the market has room to run in either direction if the Bulls or Bear can gain enough momentum to do it. Also, continue to keep an eye on those Tech Big Dogs. Once again yesterday it was those stocks that led markets lower. If those 7-10 stocks lead in one direction, it’s nearly impossible for the rest of the market to do anything but follow given their trading volumes.
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
Tuesday turned out about as one would expect with a healthy dose of hesitation and caution ahead of big tech reports and an FOMC decision scheduled for 2 PM Eastern this afternoon. Earnings reports from MSFT, GOOG, and AMD produced mixed results but all creating a bearish opening in the Nasdaq this morning. With a busy day of earning and market-moving economic reports expect challenging price volatility as we wait for Jerome Powell and his merry band of academic’s interest rate decision and press conference.
Overnight Asian market traded mixed but mostly lower as Australia hit a new record high while at the same time China closed at a 5-year low after weak manufacturing data. European markets trade mostly higher with modest gains and losses as they cautiously wait on the U.S. rate decision. U.S. futures also point to mixed open with the industrials suggesting bullishness with the tech sector is challenged by bearishness as traders react to big tech results.
Alphabet, the parent company of Google, beat the market expectations on both revenue and profit for the fourth quarter, but its ad revenue fell short of the estimates. The company attributed the lower ad revenue to the impact of the pandemic and the regulatory pressures on its online advertising business. Alphabet also reported a $2.1 billion charge for 2023, related to the layoffs it made last year to cut costs and streamline its operations. Despite the challenges, Alphabet shares have risen 56% in the past year, excluding the decline in the after-hours trading.
Microsoft delivered better-than-expected results for the fourth quarter, as its Azure cloud business grew faster than the market anticipated. The tech giant also announced its biggest acquisition ever, buying Activision Blizzard, the maker of popular video games such as Call of Duty and World of Warcraft, for $68.7 billion. However, Microsoft gave a cautious outlook for the current quarter, as it faces supply chain challenges and increased competition in the cloud market.
AMD, the chipmaker that produces graphics processing units, or GPUs, reported a strong quarter, driven by the demand for its products in the field of generative artificial intelligence. GPUs are essential for creating and running AI models that can generate realistic images, sounds, and texts. AMD faces stiff competition from Nvidia, the leader in the GPU market, but it claims that its new AI chips, launched last year, can rival Nvidia’s H100 GPUs in some use cases. AMD said that its server GPU sales, which cater to the cloud and data center customers, grew significantly during the quarter.
Walmart, the world’s largest retailer, declared a three-for-one stock split on Tuesday, meaning that each shareholder will receive two additional shares for every share they own. The company said that the new shares will be distributed on Feb. 23, after the market closes, to the shareholders who owned the stock as of Feb. 22. The stock split will lower the price of each share, making it more affordable for investors. Walmart’s stock closed Tuesday at $165.59, close to its record high of $169.94 that it reached in November.
The stock market ended the day mixed with some hesitation and caution as we waited for big tech reports and the pending FOMC decision. The JOLT’s report exceeded expectations adding a touch of uncertainty because the Fed continues to be concerned with getting some balance in the jobs market. Short-term yields rose after the encouraging consumer confidence and labor-market reports. The 2-year Treasury yield increased to 4.36%, while the 10-year yield stayed around 4.05%. Today we have a busy day of earnings with Mortgage Apps, ADP, Treasury Refunding, Employment Costs, Chicago PMI, Petroleum Status, with an FOMC rate decision and press conference to inspire the bulls and bear. Expect considerable price volatility and watch for the potential of some big point moves in the indexes as we wrap up the month.
