Markets gapped about one percent higher on Friday, but this was a Bull Trap.  Right after the open, the selling started and the selloff continued until about 3 pm.  However, a massive rally (options expiration pinning) took us out well over halfway up those candles.  This gave us a black, Bearish Engulfing candle (barely) in the QQQ and just black indecisive candles with huge lower wicks in the SPY and DIA.  The late-day rally saved the SPY from joining the QQQ in Bear Market territory (down more than 20% from the high).  It also capped off the seventh consecutive week of declines across the market.  So, the bears may want to retest that Bear Market level this week.  And with that said, markets are still well oversold, giving the bulls some ammunition.  So, the Bulls may want to try a little relief rally as well.  On the day, SPY gained 0.04%, DIA lost 0.24%, and QQQ lost 0.31%.  The VXX fell a little over a percent to 25.05 and T2122 “climbed” to 8.28.  10-year bond yields fell to 2.79% as traders bought up bonds during the first 6 hours of the day and Oil (WTI) was up marginally to $112.70/barrel.

Last week, TSLA had a terrible streak losing 14%.  However, you have to bear in mind, that the stock has lost 34% since it was revealed (well after the fact) that Musk had been selling off TSLA stock to raise money for his TWTR bid.  Among the problems facing the company are the lockdowns in China stalling production, the Chinese economic downturn hurting demand, massively increased competition from actual major carmakers, and, of course, the 3-ring circus of notoriety for the sake of itself that Musk feels the need to maintain at any cost.  On the Chinese front, TLSA has said it wants all staff to continue living in its Chinese factory until mid-June to minimize the risks of more shutdowns. In other stock news, Sunday night Bloomberg reported that AVGO is in talks to acquire VMW.

Recently, there has been considerable talk in the trading rooms about whether or not we’ve yet seen a bottom in the selloff.  On Sunday, the WSJ suggested the answer is no for now.  They reported that BAC says that 63% of their private client’s portfolios are still in stocks, much higher than when prior bottoms have been reached.  In addition, the VIX is currently at 29 and has reached a maximum of 34.75 in the last month.  Again, this is well below the 40+ it reached in the 2008, 2011, and March 2020 selloffs.  Finally, while most selloffs end in capitulation (extreme volume on at least one big down day), we have not seen any such action yet.  So, at the moment, both the chart and anecdotal evidence point to the bears still being in control.

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Bloomberg reported over the weekend that Fed members have been telling them that a market selloff is exactly what they need.  The basic idea is that as the market falls, the normally “long-only” public loses money or at least feels worse.  In turn, this will cause the public (on average) to spend less and that lower demand helps to reduce inflation.  So, while the Fed increasing rates works on the supply side (making spending more expensive), a bear market works on the demand side, slowing the consumer’s urge to buy.  For that reason, Bloomberg says several anonymous Fed members have told them that any sort of Fed Put is the last thing they want to see.  Simply stated, any market bullishness would make their “job number one” (taming inflation) twice as hard.  KC Fed President George is expected to confirm this evening.

In climate-related news, the North Americans Electric Reliability Corporation (a non-profit regulatory authority) has warned that the entire Western US, most of the Upper Midwest, and parts of the East Coast are at high risk of blackouts this summer.  This is the result of the long-term drought in the West (now reducing hydroelectric production) and a newly forecast summer heatwave (worse than normal).  This electricity shortage may affect essentially every industry over at least the next 1-2 Quarters.  Climate has also put another hit on the Ag industry as unprecedented rain for months has caused the deterioration (flooding) of Canadian croplands as well as the inability to plant.  The Insurance Journal reports that only 4% of Manitoba croplands are planted, while the 5-year average at this point of the year would be over 50% planted.  Canola and wheat are the crops most impacted, which coincidentally are exactly the crops whose supply is also most impacted by the Russian invasion of Ukraine and the blockading of Odesa. As a result, all companies that use wheat and canola are at great risk of both supply problems and much higher input costs six months down the road.  Of course, consumers will also have to pay much higher prices for staple items like bread, pasta, cereals, battered food, etc.

On the Russian invasion story, Russia cut the flow of natural gas to Finland Saturday (after Finland refused to pay in Rubles).  Lithuania also stopped buying electricity from Russia.  On Sunday, Russian Trans. Minister Savelyev told state media that Western sanctions have effectively broken logistics within Russia.  On the ground, things are looking tough for the Ukrainians in the Luhansk region as Russia made gains around the town of Popasna and blew up the last resupply/retreat bridge for the Ukrainian Army in Severodonetsk / Lysychansk (a large petrochemical industry metroplex).  With no major new Western arms shipments expected until July and Russia getting tens of thousands of additional troops (freed up from Mariupol and returning from their Syrian drawdown), it is looking dire for Ukraine holding onto the Donbass.  Finally, much of the talk at Davos has been about implementing and offsetting Russian Oil sanctions. This included a speech from Ukrainian President Zelensky.

Overnight, Asian markets were mixed on modest moves.  Japan (+0.98%), Thailand (+0.76%), and New Zealand (+0.44%) led the gainers.  Meanwhile, Hong Kong (-1.19%), Singapore (-0.83%), and Malaysia (-0.43%) paced the losses.  This is despite a rally that came when President Biden told the Asian Economic meeting that he was going to revisit the former President’s Chinese tariffs.  (The President also misspoke, saying that the US Military would intervene to defend Taiwan from a Chinese attack.) In Europe, stocks lean heavily to the green side on Biden’s comments as well as more certainty from the ECB as ECB President Lagarde said they are likely to raise rates this summer and be out of negative rates by September.  At mid-day, the FTSE (+1.04%), DAX (+0.75%), and CAC (+0.35%) lead the way and are fairly typical of the continent.  Only Russia (-1.91%) and the FTSE MIB (-0.64%) are in the red in early afternoon trading.  As of 7:30 am, US Futures are pointing to another gap higher to start the day.  The DIA implies a +1.11% open, the SPY is implying a +1.21% open, and the QQQ implies a +1.05% open at this hour.  10-year bond yields are back up to 2.835% and Oil (WTI) is up 1% to $111.36/barrel in early trading.

The only major economic news scheduled for release Monday is a Fed speaker (George at 7 pm).  There are no major earnings reports scheduled before the open. However, AAP, HEI, NDSN, SKY, and ZM report after the close.

The major economic news coming later this week includes Mfg. PMI, Services PMI, and April New Home Sales on Tuesday.  Then on Wednesday, we get April Durable Goods Orders, Crude Oil Inventories, and the May FOMC Minutes.  On Thursday we see Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales.  Finally, on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.

Major earnings reports coming later this week include ANF, AZO, BBY, CSIQ, DOLE, ESLT, NTES, WOOF, and RL on Tuesday.  Then Wednesday we get BMO, BNS, BAX, DKS, DY, UHAL, CHNG, DXC, ENS, GES, NVDA, SPLK, and WSM.  On Thursday, we hear from BABA, AMWD, BIDU, BURL, CM, DG, DLTR, GCO, IQ, M, MDT, AEO, ADSK, COST, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY.  Finally, Friday he see BIG, PDD, and SAFM.

The bulls look to be trying to leverage the late-day rally on Friday into a gap higher this morning. News that the US is reconsidering tariffs on Chinese goods is helping buoy spirits despite the head of the IMF saying they may need to reduce the 2022 global economic growth forecast again. In short, after seven weeks of losses and sitting in a very oversold state, the bulls feel the need to stretch their legs. As traders, we need to keep in mind that despite this fact, the trend is down and the probability of volatility is high. So, continue to be very careful about chasing gaps. Remember that Friday’s gap was a Bull Trap. Either way, that “bear market level” (down 20% from highs) in the area is close below in the S&P. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped down the better part of a percent on Thursday on fears over economic slowdown.  This led to the immediate start of an all-day, roller-coaster ride within a well-constructed range.  The bottom of this range for the SPY was not far from the Bear Market trip line (down 20% from highs).  So, we may be getting some support from traders at that level (about 383) for the broader market.  At any rate, this action left us with indecisive, Spinning Top type candles across all 3 major indices. On the day, SPY lost 0.63%, DIA lost 0.78%, and QQQ lost 0.57%.  The VXX fell almost 3% to 25.36 and T2122 “climbed” but still remains deep in the oversold area at 7.32.  10-year bond yields fell to 2.851% and Oil (WTI) gained 1.6% to $111.30/barrel.

During the day, Weekly Jobless Claims were reported as slightly higher than expected. However, it was the Philly Fed Mfg. Index that drew the most concern as it came in at only +2.6 (+16.0 was forecast).  This means Manufacturing conditions are only slightly improving (anything above zero), less so than expected and far less so than last month (+17.6).  April Existing Home Sales also came in slightly lower than expected, which falls in line with rising interest rates.  KC Fed President George said “the rough week” in the market was not surprising and is just one of the ways tighter financial conditions will emerge as the Fed tightens policy.

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After the close, DECK, FLO and PANW all reported beats on both the revenue and earnings lines.  After-hours, DECK was up as much as 16%, PANW was up as much as 12%, and FLO was up as much as 8% on the earnings news.  Meanwhile, CLZNY missed on revenue while beating on earnings.  However, AMAT, ROST, and VFC all missed on both lines.  After hours, AMAT was down as much as 8%, ROST was down 20%, and traded in a wide range up as much as 7% and down as much as 3% on the earnings news.

On the Russian invasion story, the EU has agreed to $19 billion in guaranteed short-term financing for Ukraine. Meanwhile, the Biden Administration approved another small ($100 mil) military aid package for Ukraine, that another 18 Howitzers.  In Congress, the $40 billion Ukraine aid package passed.  This aid bill includes $9 billion for replenishing US stockpiles of arms and munitions given to Ukraine. The main beneficiaries of that $9 billion will be RTX, LMT, GD, and NOC. Finland will also lose its main natural gas supply as of Saturday when Russia shuts down its supply following Finland’s refusal to pay for gas in Rubles. Finland is one of the few gas users to stand up to Putin as the Ruble hit a 7-year high on demand for that currency from gas buyers. Finally, Qatar has offered to sell LNG from its US-based plant to Germany starting in 2024.

President Biden is in South Korea today at the start of his Asian trip.  Many analysts are expecting North Korea to launch a missile or do a nuclear test in order to upstage the visit to South Korea today.  So, keep an eye out for that potentially market-moving news later today.

Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%).  Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way.  However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points.  In Europe, we also see green across the board with the exception of Russia Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%).  Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way.  However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points.  In Europe, we also see green across the board with the exception of Russia (-1.59%) at mid-day.  The FTSE (+1.95%), DAX (+1.96%), and CAC (+1.40%) lead the way, but gains of more than a percent are seen everywhere except Russia, Greece (+0.83%), and Switzerland (+0.53%) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap up to start the day at the end of a down week.  The DIA implies a +0.77% open, the SPY is implying a +0.95% open, and the QQQ implies a +1.30% open at this hour. 10-year bond yields are up slightly to 2.875% and Oil (WTI) is also fractionally higher to $112.45/barrel in early trading.

There is no major economic news scheduled for release Friday. Major earnings reports scheduled for the day include BAH, DE, and FL before the open. There are no reports scheduled for after the close.

So far this morning BAH and DE have reported beats on both lines.  At the same time, FL missed on revenue while beating on earnings. 

As we appear to be heading for a seventh straight week of losses (which would be the longest market losing streak since the dotcom bubble burst), Mr. Market seems to be trying to gap into a green day. Bear in mind that this is option expiration Friday and GS estimates $460 billion of single-stock options, as well as $855 billion in S&P-tied derivatives, will all expire. The point is, we may well see some volatility and/or pinning related to all those options expiring today. We also have a coming weekend new cycle to consider. So, continue to be very careful. The short and mid-term trends are bearish, the mid-term move is getting a bit long in the tooth. Plus in the short-term (as shown by T2122), we are oversold and have the potential support of a “bear market level” (down 20% from highs) in the area. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

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

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

🎯 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 down over a percent on Wednesday as fear of Fed hawkishness and inconclusive news from major retailers on consumer spending led to uncertainty.  The bad news for any bulls was that this led into a strong selloff that lasted the entire rest of the day in all 3 major indices.  Only a bounce the last 5 minutes of the day prevented us from going out on the lows.  This left us with big, ugly black gap-down candles in all 3 major indices and nearing the breakout of a Dreaded-h pattern in all 3.  On the day, SPY lost 4.03% (worst day since June 2020), DIA lost 3.53%, and QQQ lost a whopping 4.91%.  The VXX rose 5.24% to 26.09 and T2122 dropped back deep into the oversold territory at 5.08.  10-year bond yields dropped back to 2.884% and Oil (WTI) fell 2.8% to $109.25/barrel.

During the day, April Building Permits and Housing starts both came in below forecast.  This falls in line with spiking mortgage rates that have seen declines in mortgage applications in recent weeks and may be a sign of the housing market bidding wars slowing.  However, the big miss of the day was current crude oil inventories, which came in 4.7 million barrels lower than expected (-3.394 mil actual vs +1.383 mil est.).  After hours, the CEO of UAA announced he will be stepping down as of June 1. 

SNAP Case Study | Actual Trade

On the Russian invasion story, China is now in talks with Russia to buy a huge amount of Russian oil to fill their strategic oil reserves.  Even at a steep discount to market price, this would be a huge financial boost to Russian coffers.  However, Russian GDP growth missed expectations during Q1. Russian GDP came in at +3.5% (versus +3.7% that was forecast), down from the +4% during Q4.  Since almost all of this drop-off came during the last month of the quarter, we can see the impacts of sanctions…even with soaring energy prices to boost numbers.

In addition to reporting earnings this morning, KSS also slashed forward guidance on both sales and profits. This came as the company said it expects to have received the last of the expected buyout offers in the next few weeks. There are known bids from FRG, another from SPG (who wants to combine KSS with former JCPenney), as well as a separate private equity group. It is unknown who the additional bidder(s) may be that the company is waiting for in the next few weeks.

Overnight, Asian markets were mostly in the red.  Only Shenzhen (+0.38%) and Shanghai (+0.36%) managed gains while India (-2.65%), Hong Kong (-2.54%), and Japan (-1.89%) paced the losses.  In Europe, we see red across the board at mid-day.  The FTSE (-2.36%), DAX (-2.10%), and CAC (-1.75%) lead the way and are typical of the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a second straight significant gap lower.  The DIA implies a -1.12% open, the SPY is implying a -1.15% open, and the QQQ implies a -1.23% open at this hour.  10-year bond yields are down strongly to 2.839% and Oil (WTI) is off 1.77% to $107.65/barrel in early trading.

The major economic news scheduled for release Thursday includes Weekly Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), and April Existing Home Sales (10 am).  Major earnings reports scheduled for the day include WMS, BJ, KSS, and VIPS before the open.  Then, after the close, AMAT, DECK, FLO, PANW, ROST, and VFC report.

So far this morning SQM, BJ, EXP, and MBT have reported beats on both lines.  At the same time, KSS and WMS both reported beating the estimates on revenue but missing on the bottom line.  On the other side, VIPS missed on revenue while beating on earnings.  Finally, PLCE missed on both revenue and earnings.

After Wednesday’s rout in the market, fear has spread. The signal of this is bond yields dropping as investors stash money n bonds, bidding up their price (and thus push down yields). The bond market has also seen much more volatility in the last few days as skittishness has now infected bond markets as well. The proximate cause most talking heads point to is concern over economic slowdown (not inflation). Whether those analysts are right or not, when you add geopolitical risk to the mix, markets are just plain uncertain and nervous. So, continue to be very careful. The short and mid-term trends are bearish, the mid-term move is getting a bit long in the tooth. Plus in the short-term (as shown by T2122), we are oversold and have the potential support of a “bear market level” (down 20% from highs) in the area. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped strongly higher at the open Tuesday on good sales numbers from WMT and HD.  However, they immediately began fading the gap in all 3 major indices.  The lows were reached just before 11 am only to see a long, slow rally take over. Price had climbed back to the open level about 1 pm only to print another whipsaw between 2 pm and 3 pm before running up to new highs late.  This has left us with indecisive, gap-up, Spinning Top or even Hangman candles in all 3 of those averages.  The good news for bulls is that those 3 were able to pass a retest of their T-lines (8ema).  The bad news is that the downtrend line has not yet been reached and there is still a lot of resistance above.  On the day, SPY gained 2.04%, DIA gained 1.30%, and QQQ gained 2.59%.  The VXX rose slightly to 24.79 and T2122 climbed up above the mid-point to 67.14.  10-year bond yields rose sharply to 2.984% and Oil (WTI) fell 2% to $111.86/barrel.

During the day, April Retail sales came in as expected (+0.9%) but the Core Retail Sales beat expectations (+0.6% vs +0.4% est.).  This was offset by larger than expected builds in March Retail Inventories.  However, April Industrial Production also came in above expectations at +6.4%.  Then in a Wall Street Journal interview, Fed Chair Powell said he’ll continue to back rate increases until “we see inflation coming down in a clear and convincing way,” even if that meant moving past levels broadly seen as “neutral.”  He said that this policy might come at the expense of increasing the unemployment rate past the current 3.6%.  This is the most hawkish Powell we’ve ever heard. However, overall he said he sees the most likely paths to lead to a “softish landing” for the economy.

SNAP Case Study | Actual Trade

In stock news Tuesday, C jumped 7.59% on news of Warren Buffett taking a $3 billion position in the stock. All the semiconductor stocks climbed with AMD spiking 8.73% after catching an upgrade from Piper Sandler.  Meanwhile, MU surged 5.69% and NVDA surged 5.29%, as QCOM ran up 4.31%, and INTC climbed 3.06%.  However, despite the strong Tech gains, the top-performing sectors were Basic Materials and Consumer Cyclicals (both up 3.14% as sectors).  After the close, KEYS reported a beat on both the revenue and earnings lines.  Also, for the second day in a row, a major corporation faced shareholder rejection of its executive compensation plan.  This time, after-hours it was announced that JPM shareholders rejected CEO Jamie Dimon’s bonus ($52.6 million in stock options) by more than a 2-to-1 margin.

On the Russian invasion story, the leaders of Finland and Sweden are submitting their country’s NATO membership applications today in a meeting with NATO Sec. Gen. Stoltenberg.  The leaders of both nations with then visit the White House to meet President Biden on Thursday.  Elsewhere, Bloomberg reported last night that the US State Dept. would not extend the sanctions carve-out that allowed Russia to pay bond debt in dollars when it expires on May 25^th.  This greatly raises the chance of Russian default when the next payments are due May 27^th. Finally, President Biden is preparing a $500 million military aid package (money they can spend on US-made arms) for India.  This is intended to start weaning India off of buying arms from Russia.

Weekly mortgage demand for new home purchases fell 12% week-on-week and was down 15% from one year ago.  Refinancing applications also continue to nose dive, falling another 10% week-on-week.  This came as 30-year, fixed-rate interest levels fell slightly from 5.53% to 5.49%.  Clearly, people still remember the 3% rate from the start of the year and have a hard time swallowing 5.49%.

Overnight, Asian markets mixed but leaned heavily to the green side.  Taiwan (+1.50%), New Zealand (+1.08%), and Australia (+0.99%) led the gains, but increases were widespread.  Only Shanghai (-0.25%), and Shenzhen (-0.20%) had appreciable losses.  In Europe, markets are more evenly mixed at mid-day.  The FTSE (-0.11%), DAX (+0.02%), and CAC (-0.18%) lead the region as always with Russia (+2.03%) as an outlier.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.44% open, the SPY is implying a -0.60% open, and the QQQ implies a -0.83% open at this hour.  10-year bond yields are back up to 3.001% and Oil (WTI) is up 1.1% to $113.64/barrel in early trading.

The major economic news scheduled for release Wednesday are limited to April Building Permits and April Housing Starts (both at 8:30 am), and Crude Oil Inventories (10:30 am).  Major earnings reports scheduled for the day include ADI, ARCO, LOW, TGT, TJX, and ZIM before the open.  Then, after the close, BBWI, SQM, CSCO, CPRT, and SNPS report.

So far this morning ADI and ZIM have reported beats on both lines.  At the same time, TGT reported beating the estimates on revenue but missing on the bottom line.  On the other side, LOW missed on revenue while beating on earnings.  TGT shares were down 23% in premarket trading on the earnings miss, punished the same as WMT (which lost 11.38% Tuesday) for higher-than-expected costs.  LOW was down 3% in premarket on a revenue miss that the company blamed on cooler weather (despite rival HD beating sales estimate just yesterday).

Inflation, how it will be fought, and how that will impact markets is the main topic on trader’s minds today. As Fed Chair sounded quite hawkish Tuesday and the UK printed 9% April inflation overnight, Mr. Market is scared. It could also be traders thinking it’s time to take profits on this relief rally after gaining 4% in the SPY over the last 4 days. Add geopolitical risk to the mix and there is uncertainty in the air. Either way, we need to remember the trend is still bearish and there is a lot of resistance above. We have not made a low, high, higher-low, and higher-high yet. So be very careful chasing long positions. That said, the bearish move is long in the tooth as well and near the potential support of a 20% fall to bear levels. So, remain nimble and hedged. Above all, don’t give in to FOMO -OR- feel the need to predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: SLB, MOS, LLY, KO, PSA, GILD, ZC, JPM, IVR, LYFT DAL, AXP, ABNB, SHOP, MSTR, BBBY. 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

Monday started with a small gap lower as we got bad Chinese economic data and the NY Empire State Mfg. Index missed estimates.  After that, we saw a roller-coaster ride with a slightly bullish trend until 3 pm.  From that point, stocks slid the rest of the day.  This action allowed all 3 major indices to retest their T-Line and fail again.  However, DIA held out to barely print a second straight green day as markets fight with their downtrends.  This left us with indecisive, Doji or Spinning Top candles in all 3 major indices.  On the day, SPY lost 0.37%, DIA gained 0.18%, and QQQ lost 1.16%.  The VXX fell almost 5% to 24.69 and T2122 climbed again, but remains below the mid-point at 35.11.  10-year bond yields fell on the day to 2.886% and Oil (WTI) rose 3.3% to $114.16/barrel.

Monday, Bloomberg reported Elon Musk has floated the idea of buying TWTR at a lower price than approved by the board.  This came the same day that he and TWTR CEO Agrawal went back and forth on whether or not there are many fake accounts on the platform.  The stock took an 8.18% loss on the day and in the process gave back more than all the gains made since Musk’s position purchase was made public.  Then early this morning Musk said that TWTR must prove its claims of 5% or fewer “bot accounts” for the purchase to proceed at all. TWTR was down as much as another 4% in after-hours trading.

Cryptocurrencies continue to have massive issues as another “stablecoin” (DEI) lost its peg to the US Dollar, falling below 70 cents.  The algorithm selling Bitcoin and NFTs in an attempt to maintain the peg simply could not keep up.  As with Luna (which is now of no value), this puts pressure on Bitcoin and cryptocurrencies in general on a reputation basis as well as direct selling to maintain the peg.  However, Bitcoin, rallied late in the day to regain the $30,000 level after falling to $29,000 during the day.  In related news, COIN reported that people holding their crypto wallets at COIN are to be treated as “unsecured creditors” in the event of bankruptcy.  This means if the COIN exchange files for bankruptcy, people holding accounts will be paid last in the disbursement of assets.  COIN plummeted another 9% on the day and is down 53% since May 4^th.

SNAP Case Study | Actual Trade

After the close, TME missed on revenue while beating on earnings.  On the other side, TTWO and AE both beat on revenue while missing on earnings.  In other stock news, after-hours, INTC announced that shareholders have rejected the company’s top executive pay packages by almost a two-to-one margin.  The vote is not binding on the board, but is a clear sign that shareholders are watching company performance.  In other compensation news, MSFT announced it will nearly double its employee compensation budget as well as increase the stock options given to some classes of employees by 25%.  This was all a major effort to retain staff in a very competitive job market.

On the baby formula story, ABT reached a deal with the FDA to restart their Sturgis MI plant (which the FDA shut down in February).  This increases the largest baby formula maker’s capacity by at least one-third.  Elsewhere, Nestle (a global baby formula maker with smaller US presence) is flying large supplies of formula to the US today while Reckitt Benckiser (UK formula maker) is also boosting production by 30% and shipping more to the US in order to capture market share and alleviate the US shortage.

Economic news later this week includes April Building Permits, April Housing Starts, and Crude Oil Inventories on Wednesday.  Then Thursday we see Weekly Jobless Claims, Philly Fed Mfg. Index, and April Existing Home Sales.  There is no major news scheduled for Friday.

Overnight, Asian markets leaned heavily to the green side on encouraging Covid news out of China.  Hong Kong (+3.27%) and India (+2.63%) were outliers, but Shenzhen (+1.23%), Taiwan (+0.98%), and South Korea (+0.92%) led the way higher.  In Europe, we see green across the board at mid-day with Tech stocks leading the way.  The FTSE (+0.96%), DAX (+1.53%), and CAC (+1.38%) lead the way as usual in early afternoon trading.  As of 7:30 am, US Futures are pointing to a large gap higher at the start of the day.  The DIA implies a +1.43% open, the SPY is implying a +1.67% open, and the QQQ implies a +2.01% open at this hour.  10-year bond yields are back up to 2.919% and Oil (WTI) is up another 0.67% to $114.95/barrel in early trading.

The major economic news scheduled for release on Tuesday includes April Retail Sales (8:30 am), April Industrial Production (9:15 am), Mar. Business Inventories and Mar. Retail Inventories (both at 10 am), and a few Fed speakers (Bullard at 8 am, Harker at 9:15 am, Chair Powell at 2 pm, and Mester at 2:30 pm).  Major earnings reports scheduled for the day include AER, HD, JD, SE, and WMT before the open.  Then, after the close, KEYS reports.

So far this morning HD, JD, SE, AER, HUYA, and IMBBY all reported beats on both lines.  At the same time, WMT and VOD reported beating the estimates on revenue but missing on the bottom line.  Finally, MARUY has reported misses on both lines.  It is worth noting that HD raised guidance for the rest of the year after record Q1 sales.  HD was up 3% in premarket trading. The WMT miss was unusual and attributed higher costs which included “overstaffing,” which raises the fear of layoffs in a job market where just yesterday the company announced a new incentive program to increase hiring among college graduates. WMT is down 5% in premarket trading.

Coming off weeks of losses, the bulls seem to be latching on to good Covid news from China (implying some improvement of supply chain issues and increasing Chinese demand) as well as the strong HD earnings and forecast. The fact that WMT also beat on revenue (despite a bad earnings miss) may also give hope that the consumer is not tapped out yet. However, inflation, geopolitical risk, and the cryptocurrency meltdown still also weigh on Mr. Market’s mind. So, be damn careful about chasing into the gap higher. Caution remains the smart play. Remember the trend is still to the downside, despite the last couple of candles. Also bear in mind that those bullish candles failed a test of the T-line twice now. This does not mean they will always fail, it just suggests there remains a lot of resistance overhead. Remain nimble and hedged. Above all, don’t give in to FOMO -OR- feel the need to predict a reversal.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: MMAT, EPAM, WDC, GILD, IBM, MMM, HAL, XLE, DOW. 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