On Wednesday CPI came in hotter than expected (but still better than last month) and as a result premarkets pulled back, giving us a small gap down at the open.  From there, the QQQ led the other indices into an all-day selloff that closed near the lows in all 3 major indices.  This gave us big, ugly black candles and new 52-week lows in all three.  On the day, SPY lost 1.61%, DIA lost 1.02%, and QQQ lost 2.99%.  The VXX diverged from expectations by only rising a fraction to 27.28 and T2122 fell even more deeply into the oversold territory at 0.81.  10-year bond yields fell to 2.93% and Oil (WTI) spiked 5.4% to $105.18/barrel after having lost 10% in the prior couple of sessions.

As mentioned, the April Consumer Price Index showed an 8.3% increase (year on year), which was higher than the 8.1% expected, but still less than March’s 8.5%.  Analysts say this indicates we are at peak inflation and could see it slacking off later this year.  However, the Core CPI number (which strips out volatile food and energy impacts) was up 0.6% in April which was much higher than the 0.4% expected. While markets are still pricing in “just” a half-percent hike in June, the potential for a three-quarter percent hike seems back in the cards as the Fed’s favorite inflation measure (Core CPI) came in well above expectations.

After the close, FUJIY, STE, and DOX reported beats on both revenue and earnings.  Meanwhile, CPNG missed on revenue while beating on earnings.  Finally, DIS, VIV, and OPHLY reported misses on both lines.  With that said, DIS did beat significantly on Disney+ subscription estimates.

SNAP Case Study | Actual Trade

Cryptocurrency volatility is off the charts again, even by crypto standards.  Bitcoin was down almost 11% this morning before recovering some 8% of that loss.  This comes as COIN had to explain the risk of bankruptcy to their users after $200 billion of wealth has been wiped out by selloffs over just the last 24 hours.  At the same time Project Terra (Luna and UST stablecoins) continue to decouple from their supposed peg to the US Dollar.  At one point Wednesday, UST was trading at less than 30 cents while Luna has lost 97% of its value in the last day.

On the Russian invasion story, the Russian Foreign Ministry told the US Ambassador in Moscow that Russian-controlled portions of Ukraine will be requesting annexation by Russia.  Meanwhile, Italian PM Draghi said that Italy European companies can pay for their gas in Rubles without breaching sanctions, in direct conflict with EU guidance on the matter.  The other developments were diplomatic, with Russia warning of nuclear war if the West continues to send arms to Ukraine and train their military, Finland moving very close to requesting NATO membership, and the UK signing a security guarantee with/for Sweden.

Overnight, Asian markets were red across the board.  Taiwan (-2.43%), Hong Kong (-2.24%), and India (-2.22%) led the way lower.  However, the only exchanges to avoid a 1% loss were Shanghai (-0.12%) and Shenzhen (-0.13%).  In Europe we see the same picture taking shape at mid-day.  The FTSE (-2.04%), DAX (-1.97%), and CAC (-2.13%) are leading the way lower as disruption to natural gas supplies, disagreement over caving to Russian demands for Rubles, and inflation are the main fears of the day.  As of 7:30 am, US Futures are pointing toward a down start to the day ahead of the morning data.  The DIA implies a -0.36% open, the SPY implies a -0.50% open, and the QQQ implies a -0.95% open at this hour.  10-year bond yields are down again to 2.841% and Oil (WTI) is off 1.3% to $104.35/barrel in early trading.

The major economic news scheduled for release on Thursday include Apr. PPI and Weekly Initial Jobless Claims (both at 8:30 am), the WASDE Report (noon), and a Fed speaker (Daly at 3 pm).  Major earnings reports scheduled for the day include BAM, DDS, KELYA, NICE, PRMW, TPR, USFD, and WE before the open.  Then after the close, AQN, COMP, EDR, MSI, TOST, and VZIO report.

So far this morning BAM, TOELY, SFTBF, SOMLY, UTZ, TPR, WE, and CIXX have reported beats on both revenue and earnings.  Meanwhile, SFTBY, NSANY, CSIOY, YPF, and HIMX all missed on revenue while beating on earnings.  On the other side, NTTYY, SSMXY, and ALIZY have reported beating the estimates on revenue but missed on the bottom line.  Finally, SIEGY, TEF, KUBTY, SSDOY, KNBWY, BOUYY, FUJHY, STBFY, TAST, TINLY, and GHG have reported misses on both lines.

Premarkets continue to be red this morning with PPI and Jobless Claims coming before the bell. Geopolitical and cryptocurrency risks are also on Mr. Market’s mind. However, we have another few weeks before the next Fed hike and the betting has not changed in the last week. Most futures traders expect a half-point hike. So, we have time to adjust and no major changes are expected. Again, no need to panic or experience FOMO. If you want to trade this market, unless you are a daytrader, the smart move is to stick with the downtrend. The bears still have all the momentum.

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. 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. You also don’t need to be in the market all the time. If this isn’t a market condition you thrive in, then get out of the way. It will settle out at some point and it’s far better to wait and have money the market condition you prefer than to force trades now and be busted when things do turn. Keep in mind that nobody is right all the time. If you’re wrong, just admit it and take your loss. Focus on your process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: BTU, VET, SWN, TECK, TCOM, MOS, ABC, HAL, APA, SLB, KWEB, AIZ, L, ANTM, KR. 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 up 1.5% Tuesday in what appeared to be a relief rally in the making.  However, it was a Bull Trap that the Bears sprung immediately leading to a steady selloff that lasted all morning, more than filling the gap before flattening out near the lows by lunchtime. Still, the whipsaw was not done. So, stocks reversed and a strong rally kicked in about 12:30 pm, followed by another selloff, and then another rally, etc.  This action gave us indecisive, big wick, black candles that both printed new 52-week lows and look to be ending in the green in the QQQ and SPY.  The technology and healthcare sectors led on the day with Utilities lagging. On the day, SPY was up 0.23%, DIA closed down 0.26%, and QQQ rose 1.21%.  The VXX fell 3.4% to 27.05 and T2122 remained deeply oversold at 1.33.  10-year bond yields fell but then rebounded to close just below 3% at 2.993% and Oil (WTI) fell 3.45% to $99.56/barrel. 

After the close, OXY, GFS, FNF, HRB, RXT, GO, ALC, SCSC, DAR, and ADV all reported beats on both revenue and earnings.  Meanwhile, ELY missed on revenue while beating on earnings.  On the other side, WELL reported beating the estimates on revenue but missed on the bottom line.  Finally, EA, COIN, RBLX, WYNN, YELL, RKT, OSCR, GSM and DBD reported misses on both lines.

Cryptocurrency markets are in turmoil as twice in the last 2 days a major “stablecoin” has decoupled from its supposed dollar pegging.  The idea behind a stablecoin is that a computer algorithm maintains a 1:1 peg to the dollar by buying/destroying digital assets.  (This would be like the dollar under the gold standard, but with a computer printing/burning dollars in an attempt to maintain the dollar-gold exchange rate.)  The first to decouple was Luna, which dove more than 80% in value.  Then UST dropped as far as to 31 cents and is now trading at 50 cents on the dollar.  Both stablecoin are part of the same project Terra.  Terra creator Do Kwon (who has also amassed billions of dollars’ worth of bitcoin) said Tuesday he is close to announcing a plan to recover and return to a 1:1 dollar peg. The moral of the story is that stablecoins aren’t.

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On the Russian invasion story, Finland’s Foreign Minister Haavisto said his country is now just days away from applying for NATO membership.  Meanwhile, the war may be expanding as Belarus moved their special forces to the border of Ukraine claiming that the US and its allies are increasing their presence on that country’s border.  Ukraine said that it will turn off natural gap pipelines from Russia to Europe as Russia’s forces have disrupted operations at several facilities.  This pipeline accounts for a third of Russian gas exports to Europe and this may well reduce supplies for EU countries.

The economic news coming later this week includes Apr. PPI, Weekly Initial Jobless Claims, the WASDE Report, and a Fed speaker on Thursday.  Then on Friday, we see Apr. Imports/Exports, Michigan Consumer Sentiment, and a couple more Fed speakers.

The talk in financial markets seems to be all expecting a Fed “overshoot.” In other words, they are assuming that inflation has now peaked and the Fed is behind the curve, tightening into a slowing economy. That would lead to a so-called hard landing. This is all just US-focused, but there are and will be impacts on global markets from the Russian aggression and Western responses with the CIA reporting Putin is preparing for a very long-term conflict. For example, food prices will be raised when the supply of grain is reduced a significant amount. And oil prices cannot help but be impacted as the West is at least nominally banning Russian oil while Saudi Arabia and the UAE are warning about a lack of capacity to expand production to offset those reductions. My point is that markets tend to front-run the economy by 3-9 months and it is impossible to forecast something when the future environment is not known. So, watching the chart is much better than predicting the market in months-long positions.

Overnight, Asian markets were mixed again but on more muted moves than earlier this week.  Shenzhen (+1.80%), Hong Kong (+0.97%), and Shanghai (+0.75%) led the gains while Thailand (-0.58%), India (-0.45%), and Taiwan (-0.35%) paced the losses.  This came as Chinese Consumer Prices rose by 2.1% in April, the fastest increase since November.  Meanwhile, in Europe, markets are mostly in the green despite a spike in natural gas prices on the Russian pipeline news.  The FTSE (+1.11%), DAX (+1.29%), and CAC (+1.94%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap up to start the day once again.  The DIA implies a +0.86% open, the SPY is implying a +1.13% open, and the QQQ implies a +1.48% open ahead of key inflation data.  10-year bond yields are down again to 2.93% and Oil (WTI) is up almost 3.5% to $103.22/barrel in early trading.

The major economic news scheduled for release on Wednesday includes Apr. CPI (8:30 am), Crude Oil Inventories (10:30 am), 10-year Bond Auction (1 pm), and Apr. Fed. Budget Balance (2 pm).  There is also another Fed speaker (Bostic at noon).  Major earnings reports scheduled for the day include ICL, NOMD, PFGC, PRGO, SLVM, TM, WEN, and WWW before the open.  Then after the close, DOX, APP, CPA, CPNG, PAAS, STE, and DIS report.

So far this morning WWW, OCPNY, and ICL have reported beats on both revenue and earnings.  Meanwhile, NOMD, ADRNY, PCRFY, BRTHY, and EC all missed on revenue while beating on earnings.  On the other side, BRDCY, SGIOY, AJINY, MNBEY, and PRGO have reported beating the estimates on revenue but missed on the bottom line.  Finally, TM, TAK, FUJIY, AGESY, SMTOY, ATC, and WEN have reported misses on both lines.

Premarkets are up significantly and most analysts are saying that they expect the April CPI to show that inflation has now peaked (expecting an +8.1% print versus last month’s +8.5% number). This means that the risk this morning is on the downside as an unexpectedly hot print could reverse overnight gains and shock markets. Either way, there is no reason to panic and chase the open Futures are backing off earlier highs. Regardless of the number, the Fed is still very likely to raise rates by half a percent in June and it would take a significant shock one way or the other to move them off that amount of hike. This means that markets will still have several weeks to adjust before the Fed regardless of today’s number. Again, no need to panic or experience FOMO. So, once again the question is whether the implied gap up is a “dead cat” bounce or the beginnings of a reversal. The smart money remains in the “relief rally at best, bull trap at worst” camp given the strong bear trend and current over-extension. So, if you are bound to go long in this move, be very cautious and extremely nimble. The bears still have all the momentum.

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. 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. You also don’t need to be in the market all the time. If this isn’t a market condition you thrive in, then get out of the way. It will settle out at some point and it’s far better to wait and have money the market condition you prefer than to force trades now and be busted when things do turn. Keep in mind that nobody is right all the time. If you’re wrong, just admit it and take your loss. Focus on your process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: VMD, NXPI, OXY, MCK, WDC, HPQ, ABC, EPAM, JPM, MRK, VLO, VZ, CHRW, GSK, EXPD, PVH. 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 more than 1.5% today and then followed through until the SPY managed to find some support at the 500sma around 11:30 am.  Despite an hour-long mid-day attempt to bounce, the bears stepped back in to take all 3 major indices back to their lows by 2 pm and continue sliding toward the lows of the day.  The QQQ was clearly the ugliest of the major indices, with the SPY not far behind while the DIA benefitting from the safety trade printing a gap-down black Spinning Top that bounced up off the February low (probably on safety trades).  Every sector was in the red, with Energy leading the charge lower.  This left us at new 52-week lows in all 3 of the major indices.  On the day, SPY lost 3.16%, DIA lost 1.89%, and QQQ lost 3.86%.  The VXX rose 3.5% to 28.01 and the only possible silver lining for the Bulls is that the market is now very oversold with the T2122 falling to 1.33.  10-year bond yields fluctuated wildly during that day, reaching the high since 2009 (3.185%) but fell back to 3.04% by day end.  Oil (WTI) fell a whopping 6.4% to $102.75/barrel.

After the close, SPG, IFF, EQH, AMC, XPO, CLOV, HI, MRC, VRM, UNVR, and MCHP all reported beats on both revenue and earnings.  Meanwhile, ICUI, DNB, missed on revenue while beating on earnings.  On the other side, IAC, CAPL, SWX, VVV, and RNG reported beating the estimates on revenue but missed on the bottom line.  Finally, NVAX, ZNGA, and PRIM reported misses on both lines.

Realtor.com reports that the supply vs. demand balance of the real estate market has started to improve.  April home for sale inventory was down just 3%-12% from the same time in 2021 and this was the smallest year-over-year drop since 2019.  The data suggest that the rapid rise in interest rates, which has made housing bubble prices even more expensive for buyers is slowing the pace of sales, despite listings being down 67% from pre-pandemic levels.

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On the Russian invasion story, MSCI research said they are now expecting Russia to default on bond payments on May 27.  Since late February, the US Treasury Dept. has been approving (on a case-by-case basis) Russian payment on bond debt.  The exemption to sanctions that allowed that flexibility expires May 25 and the firm does not believe the US will renew the exemption.  Elsewhere, NBC reports that more than 1 million Ukrainians have been forcibly relocated to Russia. Meanwhile, the European Bank for Reconstruction and Development estimates the Russian economy will only shrink 10% in 2022 (mostly due to the huge increases in exported energy prices largely offsetting the loss of domestic activity), while the Ukrainian economy will shrink by 30%.  To me, a contraction of only 30% is nearly miraculous.  With an active war ongoing, many of the major centers of industry in ruins, all ports closed, one-third of the population now being refugees, and only half of the crops able to be planted, it is hard to see how the country’s output could be down only 30%. Finally, the US has suspended the 25% tariff on Ukrainian steel for a year. (That said, it is unclear how much steel can make it from Ukraine to the US given most steel production is in the South-Eastern parts of the country and would normally ship through the closed ports.

The Fed warned of tightening financial market liquidity overnight. Meanwhile, the market waits on more inflation data tomorrow as well as President Biden speaking on the subject at 11:30 am today…and inflation has been the key market driver for a while now. Oil markets have slumped the last two days as traders see the EU softening its sanctions on Russian oil in the face of Pro-Putin Hungary’s veto power on the ban. (The problem with the EU is that it requires unanimity to act.)

The economic news coming later this week includes Apr. CPI, Crude Oil Inventories, 10-year Bond Auction, and Apr. Fed. Budget Balance on Wednesday.  Then on Thursday, we get Apr. PPI, Weekly Initial Jobless Claims, the WASDE Report, and a Fed speaker.  Finally, Friday we see Apr. Imports/Exports, Michigan Consumer Sentiment, and a couple of Fed speakers.

Overnight, Asian markets were mixed.  Shenzhen (+1.37%), Thailand (+1.14%), and Shanghai (+1.06%) led the gainers.  Meanwhile, Hong Kong (-1.84%), New Zealand (-1.34%), and Singapore (-1.25%) paced the losses.  (Hong Kong’s bad day may in part be the result of a new “pro-reintegration-to-China” leader who has taken over.  In Europe, stocks are rebounding from Monday’s terrible day as of mid-day.  The FTSE (+0.67%) lags as the “Queen’s Speech” was delivered in absentia and focuses on the high cost of living.  However, the DAX (+1.44%) and CAC (+0.96%) are typical of the region in early afternoon trading. As of 7:30 am, US Futures are pointing toward a gap higher to start the day as stocks try to recover some of Monday’s losses.  The DIA implies a +0.77% open, the SPY is implying a +0.87% open, and the QQQ implies a +1.32% open at this hour.  10-year bond yields have dropped sharply but remain above 3% at 3.024% and Oil (WTI) is off another 1.7% to $101.41/barrel in early trading.

Once again, there is no major economic news scheduled for release on Tuesday.  However, there are 5 Fed speakers scheduled (Williams at 7:40 am, Bostic at 8:30 am, Waller and Kashkari, both at 1 pm, Mester at 3 pm, and Bostic again at 7 pm).  Major earnings reports scheduled for the day include FOX, AHCO, ARMK, AVYA, BHC, BCO, BLDR, CCO, XRAY, DBD, DSEY, EPC, FOXA, H, IAA, IIVI, IGT, LCII, LI, LDI, MIDD, EYE, NXST, NCLH, PTON, PLTK, REYN, SONY, SYY, TDG, UWMC, and WMG before the open.  Then after the close, ADV, ALC, ELY, COIN, DAR, EA, GSM, FNF, GFS, GO, HRB, JXN, LBTYA, LNW, OXY, OSCR, RXT, RBLX, RKT, SCSC, WELL, WYNN, and YELL report.

So far this morning BAYRY, DKILY, ITOCY, BLDR, MIDD, IIVI, IAA, IGT, LCII, ARMK, and NXST have all reported beats on both revenue and earnings.  Meanwhile, SONY, NTDOY, SSUMY, TYOYY, EYE, AZUL, and SU all missed on revenue while beating on earnings.  On the other side, HGV has reported beating the estimates on revenue but missed on the bottom line.  Finally, NPSCY, XRAY, NCLH, PTON, RICOY, AVYA, DBD, BHC, and KWHIY have reported misses on both lines.

Futures are backing off earlier highs. However, it appears we will still see a bounce at the open. The question is whether that is a “dead cat” bounce or the beginnings of a reversal. The smart money remains in the “relief rally only” camp given the strong bear trend and current over-extention. So, if you are bound to go long in this move, be very cautious and extremely nimble. The bears still have all the momentum and this would be an excellent place for a Bull trap. As always, don’t get caught chasing moves, and be quick to take profits when you have them.

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. 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. You also don’t need to be in the market all the time. If this isn’t a market condition you thrive in, then get out of the way. It will settle out at some point and it’s far better to wait and have money the market condition you prefer than to force trades now and be busted when things do turn. Keep in mind that nobody is right all the time. If you’re wrong, just admit it and take your loss. Focus on your process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: SHW, TSLA, NVDA, MSFT, AMZN, NFLX, JPM, FB, AAPL, BBIG, ADM, PEP, C, WFC, GILD, SPXS, UVXY, SQQQ . 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 Thursday markets gapped down roughly a percent after traders had rethought their opinion of the Fed Markets opened Friday with a gap down of roughly two-thirds of a percent.  They then went on a wild up-and-down whipsaw ride that lasted the rest of the day in all 3 major indices.  This left us with large-legged, indecisive candles in all three with a Doji in the SPY and Spinning Top candles in the DIA and QQQ.  On the day, SPY lost 0.59%, DIA lost 0.38%, and QQQ lost 1.20%.  The VXX was flat at 27.07 and T2122 fell deeper into the oversold territory to 7.48.  10-year bond yields spiked to 3.132% and Oil (WTI) rose almost 2% to $110.42/barrel.  This also capped the first 5-week losing streak that was the longest since 2011 in the SPY and since 2012 for the QQQ.

With essentially no economic news until Wednesday, two topics are likely to dominate the start of the week.  The first of these are various opinions about what the Fed has done (or will do) wrong and what that will mean for the economy and by extension the market.  The second topic is the market selloff that has been underway all year and just how much further it will fall before the bottom is reached.  On the latter subject, BAC put out a report this weekend saying that the average of the 19 last bear markets saw the average stock decline 37.3% from their 52-week high and lasted 289 days.  According to their analysis, 49% of Nasdaq stocks are already 50% below their 52-week high, 58% of them are down more than that 37.3% bear market average decline benchmark, and 77% of them are down at least 20%.

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CNBC reported that F is selling more than 8 million shares of RIVN (through GS) as the lock-up ended Sunday.  JPM also plans to sell between 13 million and 15 million shares on behalf of an unknown seller.  Elsewhere, Reuters reported Sunday that Shanghai has tightened and extended its lockdowns in hope of reaching a “zero Covid” goal by late May.  This is causing supply chain chaos for companies like AAPL, which has multiple major suppliers in the city.  One of those (Quanta) saw riots Thursday when rumors circulated around the factory of cases on the factory floor of that facility which houses 40,000 employees with as many as 12 people per room.  Hundreds of Quanta employees overpowered security and broke through containment fences in an attempt to escape the factory living conditions.

On the Russian invasion story, related to food prices/availability, the UN called for an end to the Russian blockade of the port of Odesa.  The stated reason is the need for Ukraine to be able to ship 25 million tons of grain, which has been waiting to be shipped since the start of the war.  At the other end of the Ag cycle, Ukraine announced this weekend that it was only able to plant about 48% of its crops this spring.  Roughly 25% of the Ukrainian grain crops normally stay in the country to feed that nation.  This means that best case, Ukraine expects to be able to export only one-third of the country’s normal grain exports…if it can ship any at all.  On the EU oil sanctions, pro-Putin Hungary continues to block bans on Russian oil despite being offered exemptions.  However, Saudi Arabia dropped prices for Asian and European customers by about $5/barrel for the month of June.  This is seen as a concession to Western pressure and a way to capture market share while offering an alternative to Russian crude. Reuters reported Sunday that LMT and RTX are now planning to nearly double (4000/year vs 2100 prior plan) the production of Javelin missiles.  The US has already sent many of those $176,000 units to Ukraine and this move is in anticipation of orders to replenish US stockpiles.

The economic news coming later this week includes 5 Fed speakers on Tuesday.  Then on Wednesday, we see Apr. CPI, Crude Oil Inventories, 10-year Bond Auction, and Apr. Fed. Budget Balance.  On Thursday we get Apr. PPI, Weekly Initial Jobless Claims, the WASDE Report, and a Fed speaker.  Finally, Friday we see Apr. Imports/Exports, Michigan Consumer Sentiment, and a couple of Fed speakers.

Overnight, Asian markets were nearly all in the red, with only Shanghai (+0.09%) managing any green at all.  Hong Kong (-03.81%), Japan (-2.53%), and Taiwan (-2.19%) led the region lower.  In Europe, we see red across the board at mid-day.  The FTSE (-1.87%), DAX (-1.78%), and CAC (-2.09%) are typical with some of the smaller exchanges down more in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a nasty gap lower at the open.  The DIA implies a -1.65% open, the SPY is implying a -1.98% open, and the QQQ implies a -2.49% open at this hour.  10-year bond yields are spiking again to 3.177% and Oil (WTI) is down 2.3% to $107.21 in early trading.

There is no major economic news scheduled for release on Monday.  However, FOMC member Bostic does speak at 8:45 am. Major earnings reports scheduled for the day include ACM, ALIT, AZUL, BNTX, CANO, CLVT, COTY, CINO, DUK, ELAN, ENR, WTRG, EXC, HGV, JLL, SPTN, TGNA, THS, TSN, and VRTV before the open.  Then after the close, AMC, EQH, BHF, BWXT, CLOV, CAPL, DNB, HI, IAC, ICUI, IFF, MCHP, MRC, NVAX, OVV, PRIM, RNG, SPG, SWX, SU, UNVR, VVV, VRM, XPO, and ZNGA report.

So far this morning WTRG, ELAN, ACM, DINO, COTY, BRPHF, KOS, and ENR have all reported beats on both revenue and earnings.  Meanwhile, CLVT missed on revenue while beating on earnings.  On the other side, DUK, PLTR, and THS have reported beating the estimates on revenue but missed on the bottom line.  Finally, IFNNY, PRTY, and VRTS reported misses on both lines.

Inflation and the fear of Central Bank and government actions to tame it seems to be the proximate cause of the hard selloff that started in Asia overnight and has spread worldwide as of premarket Eastern time. The bears have all the momentum and this feels like the market might be building towards a selling crescendo that might signal a bottom is near. We are oversold, so a bounce is possible. However, this morning feels a little like capitulation. So, smart money is not expecting that bounce. Either way, caution is still the smart play since intraday chop and volatility have been the norm recently. Don’t get caught chasing moves and be nimble enough to change your positioning quickly as needed.

Staying hedged, nimble, and measured are good things…not bad. 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. You also don’t need to be in the market all the time. If this isn’t a market condition you thrive in, then get out of the way. It will settle out at some point and it’s far better to wait and have money for your market than to force yourself to trade now and be busted when things do turn. Keep in mind that nobody is right all the time. If you’re wrong, just admit it and take your loss. Just focus on your process and enjoy yourself. 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.

Ed

Swing Trade Ideas for your consideration and watchlist: UVXY, SQQQ, SPXS, QID, MDLZ, KHC, MDT, PRU, JPM, GE, FAS, CCJ. 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 Thursday markets gapped down roughly a percent after traders had rethought their opinion of the Fed decision, statement, and the resulting short squeeze.  After the open, it was “look out below” as the bears sold the market off hard until about 3:50 pm when the bulls stepped back in hard for the last 10 minutes of the day.  This left us with large, ugly, black candles with a bit of wick at the bottom in all 3 major indices.  On the day, SPY lost 3.55%, DIA lost 3.05%, and QQQ lost a whopping 5.04%.  This made for the worst day since early 2020.  The VXX gained 8.65% to 27.00 and T2122 dropped all the way back into the oversold area at 13.01.  10-year bond yields spiked to close over 3% for the first time since 2018, closing at 3.037% and Oil (WTI) rose just under half a percent to $108.32/barrel.

During the day, Weekly Initial Jobless Claims came in higher than expected (200k vs 180k est.) and Q1 Nonfarm Productivity fell 7.5% (the largest drop in 75 years).  This drop was over 2% worse than an already bleak estimate of -5.4%.  Elsewhere, BA announced it will be moving its corporate headquarters from Chicago to Arlington VA, where it will also build a major research facility.  Having headquarters so close to Washington DC would be in line with BA being a major military contractor. However, BA said it will maintain a significant presence in Chicago and the major production facilities will remain in the Seattle and Charleston SC areas.

SNAP Case Study | Actual Trade

After the close, RSG, Z, DBX, TXRH, OPEN, FRG, CNXN, RYI, RDFN, MELI, and MTD all reported beats on both revenue and earnings.  Meanwhile, LYV, BMW, and UNM missed on revenue while beating on earnings.  On the other side, VRTX, MNST, MCK, DASH, and FOCS reported beating the estimates on revenue but missed on the bottom line.  Finally, SQ, DVA, and SHOP reported misses on both lines.

On the Russian invasion story, reports say that Russia has stolen half a million tons of grain so far and are accelerating the theft in recent days.  The same is taking place with ag equipment like combines (harvesters) and tractors.  Much of this has so far been destined for Chechnya.  The fear is that the theft will continue since Ukraine had 5 million tons of wheat and 15 million tons of corn in storage (ready for shipment by sea) in now-occupied Southern Ukraine at the start of the invasion.  This raises fears as many in Ukraine remember the Holodomor (Terror Famine) imposed on Ukraine by the Soviet Union in the 1930s as part of Stalin’s attempts to purge the region of any even potential opposition.  This could also simply be a strategy, where Russia has accumulated enough of the world grain supply to be in a stronger position to negotiate with the West when parts of the world are starving.  At any rate, this news could well influence grain commodities and input inflation for companies like ADM, BG, MGPI, GIS, ANDE, INGR, and others.

Overnight, with the lone exception of Japan (+0.69%) the Asian markets were strongly in the red.  Hong Kong (-3.81%), Shanghai (-2.16%), and Shenzhen (-2.14%) led the selloff but significant losses were seen all across the region.  In Europe, there are a couple of minor exchanges barely hanging onto the green, but again losses are widespread at mid-day.  The FTSE (-0.85%), DAX (-1.17%), and CAC (-1.47%) lead the way as usual in early afternoon trading.  As of 7:30 am, US Futures point toward a modestly down start to the day.  The DIA implies a -0.32%, the SPY implies a -0.49%, and the QQQ implies a -0.68% at this hour.  10-year bond yields are also up a bit to 3.093% and Oil (WTI) is spiking more than 2% to $110.55/barrel in early trading.

The major economic news scheduled for release on Friday includes Apr. Avg. Hourly Earnings, Apr. Nonfarm Payrolls, Apr. Participation Rate, and Apr. Unemployment Rate (all at 8:30 am).  We also get a gaggle of Fed speakers (Williams at 9:15 am, Bostic at 3:20 pm, Waller at 7:15 pm, Bullard at 7:15 pm, and Daly at 8 pm.  Major earnings reports scheduled for the day include ASIX, AES, AEE, AXL, BEP, CLMT, CI, CNK, DISH, SSP, ENB, EOG, FLR, FYBR, GLP, GT, GTN, IEP, NRG, QRTEA, SPB, SR, TU, TIXT, and VST before the open.  There are no major reports scheduled for after the close.

So far this morning CI, BCC, SPB, SR, GTN, GHLD, and TIXT have all reported beats on both revenue and earnings.  Meanwhile, ASIX, TU, FYBR, and VST all missed on revenue while beating on earnings.  On the other side, ENB, MARUY, BEP, SCRYY, FOCS, and CLMT have reported beating the estimates on revenue but missed on the bottom line.  Finally, HOCPY, ING, AHEXY, FLR, CNK, QRTEA, DISH, EGIEY, and USM reported misses on both lines.

After Thursday’s ugly session, the question is whether the market can manage to hold ground or will it give up the lows of the last week (also the last year). The bears certainly have the momentum and with the weekend ahead, risk appetite may be low on a Friday. We are oversold, so beware of an “oversold bounce.” Either way, caution is still the smart play since intraday chop and daily reversals have been the norm recently. Don’t get caught chasing moves only to be stuck in a reversal that you are not prepared to weather.

Remember that the first rule of making big money in the market is to not lose big money in the market. Staying hedged, nimble, and measured are good things…not bad. So, don’t be stubborn, and protect yourself from yourself. Nobody is right all the time. If you’re wrong, just admit it and take your loss. Just focus on your process and enjoy yourself. 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.

Ed

Swing Trade Ideas for your consideration and watchlist: No Trade Idea 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