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

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

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

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

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

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

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

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, markets gapped up a half of a percent.  After an hour of finding their footing, the bulls began a slow, steady, all-day rally that ran right into the close.  This left all 3 major indices printing large white candles with small lower wicks.  On the day, SPY gained 1.69%, DIA gained 1.23%, and QQQ gained 1.95%.  All 10 sectors were in the green with Technology leading the charge again.  The VXX also gained 1.66% to 22.05 and T2122 drove even higher into overbought territory at 97.41.  10-year bond yields fell to 2.842% and Oil (WTI) dropped back to $91.88/barrel.  Clearly it was a risk on day. 

This all capped the fourth straight week of gains, with SPY gaining 3.30%, DIA gaining 3.01%, and QQQ gaining 2.69% for the week.  It also cut the losses of the longer-term pullback in half, which may be a key indicator.  (No bear market rally since 1950 has halved its losses from the highs and then returned to new lows.  In other words, if the past is a good indicator, the bottom is now in and the bulls have history on their side.)  With that said, the Fed is still expected to continue raising rates (in smaller increments) for at least another six months.  This means it may still be too early for the broader market to pivot into a “Fed Bull” mode of chasing growth again (at least according to GS as reported by CNBC).

In economic news, both Imports and Exports were down more than expected in July (possibly indicating a global economic slowdown).  However, it was Exports that were much lower than expected (-3.3% vs -1.1% forecast).  The market took this to mean the Fed will have less reason to continue big rate hikes as we move forward.  On the plus side, Michigan Consumer Sentiment and Expectations both came in well above the consensus estimate as well as the June numbers.  This indicates that the public is now more comfortable with the economy and that policies are working as inflation falls and no huge recessionary impacts (mass layoffs) have started in this cycle.  And, as always, a relatively happy consumer is good for corporate profits.

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In stock news, on Friday, PTON announced it will cut 800 jobs, shut stores, and raise prices as the “High-End Bike/Treadmill as a subscription” business struggles to remake its business.  After the close Friday, BA announced it has patched a vulnerability that could have allowed hackers to take control of on-board flight system (air speed, gauge readings, etc.) of some BA manufactured aircraft.  On Saturday, activist hedge fund Starboard Value announced it has slashed its KSS holdings by 80% in Q2 after the fund’s proposed acquisition of KSS was rejected.

In Energy news, Germany has taken measure to cut natural gas consumption by at least 2%.  The new law requires strict cutbacks by both public and private entities.  These include only heating public buildings to 66 degrees, not allowing pools to be heated, as well as building and monument illumination turned off.  Illuminated advertising will also be prohibited between 10 pm and 6 am.  Elsewhere, in a surprise move, Mexico (which now imports 100% of the natural gas it uses) announced plans to become the world’s largest exporter of nat. gas.  This includes 8 new exploration projects not far South of the US border that are expected to have a combined output of more than 50 million tons annually and are expected to come online as soon as 2023.  (Those 8 projects alone would make Mexico the #3 global producer of LNG and produce 55% of the US total production.)  Notable current LNG producers include CQP, LNG, SHEL, and TTE.

President Biden will sign the Inflation Reduction Act this week.  Among the provisions is giving the HHS Dept. the authority to negotiate drug prices for the first time.  (This was a huge loss for big pharma, which spent over $144 million lobbying and made more than $16 million in campaign contributions to defeat this measure.)  Among the companies potentially impacted by negotiations are BMY ($11.5 billion in drugs now likely negotiated), MRK ($7.3 billion in drug sales impacted), JNJ ($5 billion in drug sales now to be negotiated), and ABBV ($3 billion in drug sales impacted) among others.  **Note that these are not the sales amounts to be lost, but which are likely to be reduced by actual negotiated prices.

Overnight, Asian markets were mixed but leaned to the green side on mostly modest moves. Japan (+1.14%) and Taiwan (+0.84%) led the gains while Hong Kong (-0.67%) and Singapore (-0.38%) paced the losses.  In Europe, a similar picture is taking shape at mid-day.  The FTSE (-018%), DAX (-0.01%), and CAC (+0.01%) show a mixed, modest-move atmosphere while smaller exchanges show slightly stronger moves.  For example, Denmark (+1.36%) leads the gains and Norway (-1.00%) paces the losses in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.45% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.26% open at this hour.  However, 10-year bond yields are down to 2.828% and Oil (WTI) is off over 5% to $87.48/barrel in early trading.

The major economic news events scheduled for Monday include NY Empire State Mfg. Index (8:30 am) and June TIC Net Long-Term Transactions (4 pm).  The major earnings reports scheduled for the day include LI, NUI, WEBR, and WES before the open.  Then, after the close, COMP, FN, GSM, NU, and TME report.

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

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

After the last 4 strong weeks and Friday’s strong move by the bulls, major indices look extended from their T-lines and according to T2122. In addition, China’s Central Bank surprised markets overnight with a rate cut last night. However, it was a small cut of 10 basis points on the 7 and 10-year lending rates. (Indicating they are concerned the Chinese and global markets are cooling too fast.) With that backdrop, we can expect another low volume, yet volatile, day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, but remember those stocks are extended/overbought…do not chase.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: TWTR, MCD, ARKK, AMD, GRWG, NVDA, X You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, July CPI numbers came in much better than expected and this led to the bulls gapping markets higher.  The DIA gapped up 1.42%, the SPY gapped up 1.79%, and the QQQ gapped up a massive 2.39% at the open.  This broke the market out of its pullback from the last couple of days. However, after the open, all the heavy partying was over, as the bulls failed to give us follow-through with prices chopping sideways with a slightly bullish trend most of the day.  With that said, a rally at the end of the day took us out near the highs.  This left us with gap-up, indecisive, Spinning Top or Hangman type candles in all 3 major indices.

All ten sectors were green with Technology and Consumer Cyclical up more than two and three-quarters percent.  So, we definitely saw a risk-on day.  With that said, all 3 major indices are also now fairly extended from their T-line (8ema).  On the day, SPY closed up 2.04%, DIA was up 1.57%, and QQQ was up 2.79%.  The VXX fell to 21.44 and T2122 (4-week New High/Low Ratio) is back up deep into the overbought territory at 95.18.  Interestingly, 10-year bond yields were flat on the day at 2.785% and Oil (WTI) is back up 1.13% to $91.51/barrel on the session.

In economic news, as mentioned, July CPI came in a +8.5% annually.  This was much better than the +8.7% expected and a lot better than June’s +9.1% annual reading. EIA Crude Oil Inventories followed Tuesday night’s API data came in dramatically higher than expected.  The reading was +5.458 million barrels compared to a flat +0.073 mil barrels expected.  The 10-year note auction came in at a lower than current 10-year yields (2.775% versus 2.785% open market) and significantly lower than the last auction (2.960%).  Finally, the July Federal Budget Balance came in at 211 billion, which is down 30% from the same period in 2021.

SNAP Case Study | Actual Trade

In energy news, Russian oil deliveries to Hungary. Slovakia, and the Czech Republic after a Hungarian group agreed to pay Ukraine in dollars for the pipeline transit fees.  This is a solution only for the month of August. Elsewhere, on Wednesday, LNT, WEC, NI, and PNM all announced that they are delaying the closure of coal-fired power plants in the US.  This is seen as a political gesture in response to the climate provisions of the recently passed Inflation Reduction Act.  All the companies cited delays or potential delays in the rollout of renewable energy projects when announcing the decision.  In a follow-up to the EIA Crude report, they also announced a drawdown of 4.978 million barrels for the week.  This indicates an increase in travel for the week.   

After the close, DIS, AVT, and STN all reported beating on both the top and bottom lines.  Meanwhile, CPNG, CACI, ENS, MFC, and VZIO all missed on revenue while beating on earnings.  However, APP missed on both the revenue and earnings lines.

In stock news, APP made an all-cash offer to acquire U.  This came the same day that U announced it has won a US government contract in partnership with CACI to provide simulation software.  ACHR has received a $10 million pre-delivery payment from UAL in relation to UAL’s order for 100 of the ACHR electric vertical takeoff and landing aircraft.  During its earnings reports, DIS announced that Disney+ subscriber growth was much higher than expected.  Analysts had forecast 147 million, but DIS reported 152.1 million subscribers.  Finally, JPM gold traders were found guilty of manipulating gold commodity prices by issuing bogus orders (canceled just before execution).  They join traders from DB and BAC who were previously convicted for the same “order spoofing” crimes.

Overnight, Asian markets were almost green across the board.  Only Japan (-0.65%) showed any red.  Meanwhile, Hong Kong (+2.40%), Shenzhen (+2.05%), Taiwan (+1.73%), and South Korea (+1.73%) led the region higher.  In Europe, most exchanges are on the green side, with the exception of the majors, at mid-day.  The FTSE (-0.33%), DAX (-0.07%), and CAC (-0.19%) lag the rest of the region in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.42% open, the SPY is implying a +0.31% open, and the QQQ implies a +0.21% open at this hour.  10-year bond yields are back down to 2.772% and Oil (WTI) is up three-quarters of a percent in early trading this morning.

The major economic news events scheduled for Thursday include July PPI and Weekly Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for the day include AER, AIT, AZUL, BAM, CAH, DDS, HBI, KELYA, EYE, PRMW, SIX, and USFD before the open.  Then, after the close, AQN, BAP, EDR, FLO, ILMN, OSCR, PFHC, RMD, RYAN, TOST, and VET report.

So far this morning, DTEGY, BAM, BFRS, USFD, DDS, AER, AIT, DDL, EYE, PRMW, and SLVM have all reported beats on both lines.  Meanwhile, CAH, KELYA, and TAST all missed on earnings while beating on revenue. However, AEG, HBI, and SIX missed on both the top and bottom lines.

In economic news, later this week, on Friday the July Import/Export Price Index, Michigan Consumer Sentiment, and WASDE Ag Report are released.

After yesterday’s happy CPI news (if 8.5% inflation can be called happy news), traders are hoping for a similar story from PPI. (We know inflation is high, but we want to see Producer Prices coming in a bit to indicate that inflation has already peaked.) That sets up a binary even (similar to earnings, but in this case covering the entire market). If PPI comes in lower than expected, look for traders to gap stocks higher again. However, if PPI does not show the improvement we saw in CPI, I’d expect traders to believe they were overly optimistic yesterday and sell the market in a knee-jerk reaction. With that backdrop look for another low volume, volatile day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, but stocks are extended again relative to their T-lines and T2122.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: UAA, DIS, CVX, Z, BA, AMD, BAC, COF, GRWG, SBUX. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, the large-cap indices opened flat while the QQQ gapped down about six-tenths of a percent.  From the open, both the SPY and QQQ sold off for about an hour.  Then the entire market ground sideways in a tight range the rest of the day.  This gave us indecisive, black-bodied (Spinning Top type) candles that are testing whether they can stay above their T-line (8ema).  With that said, we are just seeing a pullback in an otherwise in-tact uptrend. 

On the day, SPY fell 0.40%, DIA fell 0.16%, and QQQ dropped 1.13%.  In terms of extension, VXX fell slightly to 21.94 and T2122 is back in the mid-range at 68.60.  10-year bond yields are up slightly by remaining at 2.779% and Oil (WTI) is also up very slightly to $90.50/barrel.  So, overall, it was just another roller-coaster, “much ado about nothing” day on Wall Street.

In economic news, Q2 Nonfarm Productivity fell 4.6%, but that was better than the consensus forecast of -4.7% and far better than Q1’s -7.4%.  As is normal when productivity falls, Q2 Unit Labor Costs rose 10.8% which was worse than the forecast rise of 9.5%, but still better than Q1’s +12.7%.  After the close, API reported Weekly Crude Oil Inventories rose far more than expected.  The estimate was a flat +0.073 million barrels.  However, the actual build for the week was +2.156 million barrels.

SNAP Case Study | Actual Trade

After the close, WELL, SMCI, HRB, AKAM, GO, TTEC, and ANGI all reported beating on both the top and bottom lines.  Meanwhile, WYNN, ADV, and MAXR all missed on revenue while beating on earnings.  On the other side, DAR, SWX, and LNW beat on revenue while missing on earnings.  However, COIN and RBLX missed on both the revenue and earnings lines.   

In stock news, META raised $10 billion from its first-ever bond offering, with the proceeds slated to be used for share buybacks and investments in revamping the business.  (This follows recent AAPL and INTC bond offerings.)   NCLH pre-announced a loss for the current quarter with revenue below previous estimates.  The cruise line said they expect occupancy rates will not reach pre-pandemic levels for another year, not at 65% of the 2019 levels.  In contrast, rivals RCL and CCL are both saying they expect to be over 100% occupancy this year.

In energy news, Russian oil shipments to Central Europe (Slovakia, Hungary, Czech Republic) via pipeline by Transneft were halted Tuesday by Ukraine.  The reason is that due to sanctions, Russia is unable to pay the transit fees to Ukraine.  This has shut down 250,000 barrels per day of oil flow.  Elsewhere, Bloomberg reports that the UK has a plan in place for at least several days of organized rolling blackouts next winter.  The British government forecasts that electricity capacity will fall short by one-sixth of peak demand on cold days due to natural gas shortages (even after coal-fired generation plants are brought back online).  Finally, the National Avg. Gasoline price has fallen below $4/gallon for the first time since March.  Gas prices have fallen more than $0.18 in the last week and $0.72 in the last month. In somewhat related news, the Rhine river (a massive logistics thoroughfare for Europe, including oil, natural gas, coal, etc.) has become unpassable as a changing climate has dropped the water level too low for barge traffic over much of the major river.

Overnight, Asian markets were nearly red across the board.  Only Singapore (+0.47%) and India (+0.06%) managed to stay in the green.  Meanwhile, Hong Kong (-1.96%), Shenzhen (-0.87%), and Taiwan (-0.74%) led the region lower.  In Europe, stocks are mixed but lean slightly to the green side at mid-day.  The FTSE (+0.05%), DAX (+0.16%), and CAC (-0.12%) are typical of the region with only Norway (-1.14) and Denmark (+0.80%) showing significant moves in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day (before data).  The DIA implies a +0.20% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.29% open at this hour.  10-year bond yields are up slightly to 2.799% and Oil (WTI) is off almost 2% to $88.83/barrel in early trading.

The major economic news events scheduled for Wednesday include July CPI (8:30 am), EIA Weekly Crude Oil Inventories (10:30 am), 10-year Bond Auction (1 pm), and July Federal Budget Balance (2 pm).  The major earnings reports scheduled for the day include ARCO, BHG, CAE, FOXA, HMC, LTH, NOMD, WEN, and WWW before the open.  Then, after the close, APP, AVAH, AVT, BRFS, CACI, CPNG, ENS, MFC, STN, VZIO, and ZIMV report

So far this morning, WEN and LTH have reported beats on both lines.  Meanwhile, WWW, ADRNY, RKUNY, DNPLY, and BHG all missed on revenue while beating on earnings.  On the other side, HMC and NOMD beat on revenue while missing on the earnings line.  However, VWDRY missed on both the top and bottom lines.

In economic news later this week, on Thursday we get July PPI and Weekly Jobless Claims.  Then on Friday the July Import/Export Price Index, Michigan Consumer Sentiment, and WASDE Ag Report are released.

With CPI data on the docket this morning, expect pre-market trading to get volatile at about 8:30 am. (The consensus estimate is that we will see 8.7% annual inflation.) On a related note, BAC told clients they expect the yield curve to invert more deeply (more than any time since the 1980s) on the Fed’s inflation-fighting actions. Elsewhere, Elon Mush has sold almost $7 billion worth of TSLA stock. (This brings his total sale of TSLA stock to $32 billion since November.) He claims this most recent sale was a preventative move, to avoid a massive sale of the stock if the court rules against him in the TWTR court case. However, he also said he would buy more shares of TSLA in the event he wins the case. With that backdrop look for another low volume, volatile day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, even if we are pausing or pulling back a tick to ease over-extension.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: CVNA, X, IGT, WFC, UBER, BAC, NTR, AA, NVAX, QNST, AR. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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