U.S. stock futures declined on Wednesday following a rough start to September, with the S&P 500 experiencing its worst day since early August. The downturn on Wall Street was exacerbated by pressure on chip stocks, driven by two reports indicating a slowdown in U.S. manufacturing production. Investors are now turning their attention to upcoming economic data releases, including the U.S. trade deficit, job openings and labor turnover (JOLTS) survey, and factory orders, to gauge the health of the economy.
European stocks faced a significant downturn in morning trading on Wednesday, mirroring the losses seen on Wall Street and in Asia-Pacific markets. The pan-European Stoxx 600 index fell by 0.93% as of 11:08 a.m. in London, with all sectors experiencing declines. Technology stocks were hit the hardest, dropping by 2.68%, while travel stocks also saw a notable decrease of 1.1%.
The Nikkei experienced its worst day since the early August sell-off, with significant declines in Asian markets led by the Taiex. The tech sector was particularly hard hit, as major chip manufacturers Samsung Electronics and SK Hynix, both key suppliers to Nvidia, saw their shares plummet by 3.45% and 8.02%, respectively. Despite the widespread downturn, mainland Chinese and Hong Kong indexes managed to limit their losses, faring better than other markets in the region.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday before the bell include DKS, DLTR, CRMT, CIEN, CNM, HRL, REVG, & CURV. After the bell include AVAV, AI, CASY, CHPT, CPRT, BASE, CRDO, DSGX, HPE, PHR, CXM, VRNT, & YEXT.
News & Technicals’
Global semiconductor and related stocks experienced a significant decline on Wednesday, triggered by a sharp drop in Nvidia’s share price in the U.S. the previous night. On Tuesday, Nvidia saw an unprecedented $279 billion wiped off its market value, marking the largest one-day market capitalization loss for a U.S. stock in history. The downward trend continued in post-market trading, with Nvidia shares falling an additional 2% following reports from Bloomberg that the company had received a subpoena from the Department of Justice as part of an antitrust investigation.
DraftKings and White Hat Gaming were fined a combined $22,500 by the state of Connecticut for operating an online slot machine game, Deal or No Deal Banker’s Bonanza, which failed to pay out any winnings on over 20,600 spins during a week in August 2023. The game was advertised to return nearly 95 cents for every dollar wagered. However, from August 15 to August 21, 2023, 522 players in Connecticut wagered almost $24,000 on the game across 20,659 spins without receiving any payouts, as reported by Connecticut’s Department of Consumer Protection.
SpaceX’s satellite internet service, Starlink, announced it will comply with court orders to block the social network X in Brazil. Both companies are owned by Elon Musk. Brazil’s supreme court mandated the suspension of X due to non-compliance with federal regulations on content moderation and the appointment of a legal representative in the country. Musk has been vocally critical of Brazil’s administration for months, even threatening “reciprocal seizure of government assets” in response to the court’s actions against his businesses.
Management at German automotive giant Volkswagen is preparing for a contentious townhall meeting with workers on Wednesday, where senior business leaders will outline potential job cuts. On Monday, Volkswagen warned that it could no longer rule out the possibility of closing plants in Germany. This announcement has drawn sharp criticism from Volkswagen’s work council and the major German industrial union IG Metall, both of which have vowed to oppose the proposed cuts.
Although we had a rough start to September keep in mind one day does not make a trend. The follow-though of the price action will be critical today. If the bears continue to gain ground, we fear could spike price adding to the volatility. However, if the bulls can defend support levels and 50 day moving average levels it will ease the minds of traders. Keep in mind corporate buybacks could ride to the rescue of the market at least for the short term.
U.S. stock futures declined on Tuesday as traders prepare for a potentially challenging month following a strong yet volatile August. Investors are eagerly awaiting the first major economic report of the month, which will be released on Friday when the U.S. government publishes the August jobs report. Additionally, Wall Street faces seasonal headwinds, as September has historically been the worst month for the S&P 500 over the past decade.
European stocks saw a slight decline on Tuesday, extending a tepid start to September trading. According to data from the British Retail Consortium, total sales in August increased by 1% year-on-year. This growth was driven primarily by food sales, which rose by 2.9% annually over the three months leading up to August. In contrast, non-food sales experienced a 1.7% decline.
Asia-Pacific markets experienced a downturn on Tuesday, with most indices showing declines. Notably, South Korea’s headline inflation for August eased to 2% from 2.6%, marking its lowest year-on-year level since March 2021. Meanwhile, Mainland China’s CSI 300 index hover near a seven-month low, according to futures data.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include MOMO. After the bell include GTLB, PD, & ZS.
News & Technicals’
German carmaker Volkswagen issued a warning that it may no longer be able to avoid plant closures in the country, citing the need for significant cost-cutting measures to “future-proof” the company. Volkswagen announced its decision to terminate its employment protection agreement, a job security program in place since 1994, to facilitate “urgently needed structural adjustments.” VW brand CEO Thomas Schäfer emphasized the gravity of the situation, stating that it is “extremely tense and cannot be resolved through simple cost-cutting measures.”
Russia has signaled potential changes to its official nuclear weapons policy in response to ongoing incursions by Ukraine into the Kursk border region. Deputy Foreign Minister Sergei Ryabkov announced on Sunday that Russia is revising its nuclear doctrine, which outlines the conditions under which nuclear weapons may be deployed. This shift is attributed to what Russia perceives as the West’s escalating involvement in the conflict in Ukraine. The adjustments to the nuclear doctrine reflect the heightened tensions and the evolving dynamics of the war.
Brazil’s telecommunications regulator, Anatel, has threatened sanctions against Elon Musk’s satellite internet firm, Starlink, amid escalating tensions over Brazil’s decision to block Musk’s social media company, X. Artur Coimbra, a commissioner at Anatel, stated that Starlink is the only company refusing to comply with the court order to block X. This public confrontation highlights the growing friction between Brazil and Musk, as regulatory authorities push for adherence to legal decisions while Musk’s companies resist compliance.
Huawei is set to hold a product launch event on September 10 at 2:30 p.m. Beijing time, just hours after Apple’s iPhone 16 unveiling. While the specifics of Huawei’s new product remain unclear, Richard Yu, the company’s consumer and automotive technology executive, has described it as an “epoch-making product.” Huawei’s resurgence in the Chinese market has posed a significant challenge to Apple, which lost its position among the top five smartphone vendors in China during the second quarter.
Although the current bullishness appears unstoppable keep in mind that September is a potentially challenging month historically. Plan on corporate buybacks to dwindle my mid-month with about 50% of companies slipping into their blackout period according to Goldman. Until then continue to ride the bullish wave but consider raising stops and watch carefully for a pullback in this extended condition.
Friday was a volatile, bullish day to end the pre-holiday week and month. SPY gapped 0.45%, DIA opened 0.17% higher, and QQQ gapped up 0.90%. After the open, all three major index ETFs traded sideways until 10:50 a.m. At that point, all three sold off, reaching the lows of the day at 12:40 p.m. From there, all three rallied the rest of the day, spiking to new highs the last 10 minutes. This action gave us white-bodied, Hammer-type candles in all three major index ETFs. All three retested and passed the test of their t-line (8ema) as support and closed at the top end of their candles. This happened on slightly above-average volume in the SPY, slightly below-average volume in the QQQ, and below-average volume in the DIA.
On the day, nine of the 10 sectors were in the green with Consumer Cyclical (+1.07%) and Technology (+1.03%) leading the way higher. On the other side, Energy (-0.03%) lagged and was the only sector in the red. Meanwhile, SPY gained 0.95%, DIA gained 0.56%, and QQQ gained 1.19%. The VXX fell 3.01% to close at a very low 44.50% and T2122 rose slightly to remain in the top half of its overbought territory at 93.18. 10-Year bond yields rose to close at 3.909% while Oil (WTI) fell a bit to close at $75.55 per barrel. So, Friday ended the week (and month) on another strong note. DIA printed yet another new all-time high and all-time high close. For its part, QQQ also crossed back above its 50sma.
For the week, SPY gained 0.28% and DIA gained 1.06% on their fourth consecutive week of gains. Meanwhile, QQQ lost 0.78% on a Bearish Harami that retested and stayed above its T-line while printing the its first down week after three weeks of gains. Looking at the month, SPY was up 2.34% on a white Hammer or Hanging Man that retested and passed the test of the monthly T-line. DIA did the same on a 1.89% monthly gain and QQQ also followed suit on a 1.10% increase.
The major economic news scheduled for Friday included July Year-on-Year Core PCE Price Index, which stayed flat at +2.6% (compared to a forecast of +2.7% and June’s 2.6% value). On a Month-on-Month basis, July Core PCE Price Index, was flat at 0.2% (versus the forecast and June reading which were both +0.2%). On the headline side, the July PCE Price Index (Year-on-Year) also came in flat at +2.5% (lower than the +2.6% forecast but in-line with the June reading of 2.5%). On the monthly basis, the headline July PCE Price Index was just like the Core numbers, flat at 0.2% (versus the forecast and June reading which were both +0.2%). Meanwhile, the July Personal Spending was up, as predicted at +0.5% (compared to a +0.5% forecast and June’s +0.3% reading). Later, the August Chicago PMI was stronger than predicted at 46.1 (versus a 45.0 forecast and July’s 45.3 value). Shortly afterward, Michigan Consumer Sentiment was reported as up and also a tick better than predicted at 67.9 (compared to a 67.8 forecast and July’s 66.4 reading). At the same time, Michigan Consumer Expectations were up and in-line with forecasts at 72.1 (versus a July value of 68.8). On the inflation front, Michigan 1-Year Inflation Expectations were down a tick to 2.8% (compared to a forecast and previous reading of 2.9%). Looking further out, Michigan 5-Year Inflation Expectations stayed flat at 3.0% (compared to a forecast and prior value of 3.0%).
In stock news, on Friday, Bloomberg reported that a large-scale study started during the pandemic found that NVO’s weight loss and diabetes drug Wegovy also reduced both deaths and hospitalizations from Covid-19. At the same time, NSC announced it had reached tentative 5-year labor contracts with five unions covering thousands of its employees. The contracts, which provide a 3.5% average annual wage increase as well as more paid time off and better healthcare must still be ratified by members of the unions. Later, GM and LAC “agreed to delay” an additional investment from GM into the lithium miner until the end of the year. At the same time, Reuters reported that the Chinese state-backed Sinochem is planning to sell its 40% stake in a shale oil joint venture it is part of with XOM. The sale would end an 11-year Sinochem involvement in the shale oil business in the TX Permian Basin.
After the close, GS announced it will lay off “a few hundred” employees as part of its annual performance review process. (In 2023, this process resulted in between 1% and 5% of its staff being let go.) GS said this is normal and it still expects to have more employees at the end of 2024 than it did at the end of 2023. (GS had 44,300 employees as of June 30.) At the same time, BRKB filed with the SEC, saying it had sold another 21.1 million shares of BAC for $845 million between August 28 and August 30. (This makes more than $6 billion of BAC that Buffett’s BRKB has sold during August.) On Sunday, 10k hotel workers went on strike against 24 locations run by MAR, H, and HLT hotels. The union said the strike will be multi-day and will be rolling (on-again, off-again) to cause maximum disruption until a new contract has been reached.
In stock legal and governmental news, on Friday, India approved the $8.5 billion merger between DIS’s Indian unit and Reliance Industries. Later, China announced that TSLA is recalling 870 imported TSLA vehicles. At the same time, RTX agreed to pay a $200 million fine to settle allegations that the company violated US export laws by shipping product and data to prohibited countries (China). (Among other violations, RTX gave China details about an aluminum instrument display component of the F-22 fighter aircraft.) Later, the FDA authorized the use of NVAX’s COVID vaccine, which had been updated to fight the new JN.1 variant of the disease. At the same time, CAH, MCK, and COR (the three largest US drug distributors) agreed to pay $300 million to resolve claims by health insurers that the companies had helped fuel the opioid crisis. (The same companies had agreed to pay $21 billion to states and local governments to settle the same charges.)
Elsewhere, after the close, CTLT reported that it is unable to file its annual report (which was expected on August 29) while it is waiting on the closing of the $16.5 billion takeover by NVO that was announced in February. On Saturday, the NHTSA announced F will recall almost 91k vehicles over engine valve intakes that may break during operation. (F will perform tests on each vehicle and replace engines as required as part of the remedy.) On Monday, HPQ said it would continue its $4 billion lawsuit against now-deceased British billionaire Mike Lynch related to what it alleges was fraudulently-inflated value of a company HPQ acquired from Lynch in 2011.
In miscellaneous news, on Friday Bloomberg reported that the level of conviction in the economy is soaring. It reported that August was the fourth straight month of gains in ETFs tracking for government debt, corporate debt, and equities. That was the longest consecutive stretch of correlated gains across those assets since 2007. At the same time, the S&P 500 is up 25% in the past 12 months…that most it has climbed in the run up to a first rate cut in history. So, the Fed got it right and we got the soft landing we had all hoped would happen. Elsewhere, in a deeper-dive into PCE data, Bloomberg reported that the metric economists say is a more accurate gauge of inflation, the 3-month annualized average, showed a 1.7% increase…the slowest since 2023.
Overnight, Asian markets were mostly red with only four of the 12 regional exchanges in the green. With that said, the big movers were green as Shenzhen (+1.17%) and Thailand (+0.81%) led the gains and Taiwan (-0.64%) and South Korea (-0.61%) paced the losses. In Europe, we nearly see red across the board with just two of the 14 bourses in the green at midday. The CAC (-0.23%), DAX (-0.38%), and FTSE (-0.48%) lead the region lower in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a gap down to start the day. The DIA implies a -0.48% open, the SPY is implying a -0.53% open, and the QQQ implies a -0.76% open at this hour. At the same time, 10-Year bonds are up to 3.911% and Oil (WTI) is down 1.9% to $72.17 per barrel in early trading.
The major economic news scheduled for Tuesday includes August S&P Global US Mfg. PMI (9:45 a.m.), July Construction Spending, August ISM Mfg. Employment, August ISM Mfg. PMI, and August ISM Mfg. PMI Prices (all at 10 a.m.). There are no major earnings reports scheduled for before the open. Then, after the close, the only significant report scheduled is ZS.
In economic news later this week, on Wednesday we get July Exports, July Imports, July Trade Balance, July Factory Orders, July JOLTs Job Openings, Fed Beige Books, and API Weekly Crude Stocks. The Thursday, August ADM Nonfarm Employment Change, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q2 Nonfarm Productivity, Q2 Unit Labor Costs, August S&P Global Composite PMI, August Global Services PMI, August ISM Non-Mfg. Employment, August ISM Non-Mfg. PMI, August ISM Non-Mfg. Prices, Weekly EIA Crude Oil Inventories, and Fed Balance Sheet are reported. Finally, on Friday, we get August Avg. Hourly Earnings, August Nonfarm Payrolls, August Private Nonfarm Payrolls, August Participation Rate, and the August Unemployment Rate. We also hear from Fed members Williams and Waller (twice).
In terms of earnings reports later this week, on Wednesday we hear from CIEN, CNM, DKS, DLTR, HRL, REVG, CASY, CPRT, and HPE. Then Thursday, GIII, KFY, NIO, SAIC, TTC, AVGO, and DOCU report. Finally, on Friday, we hear from ABM, BIG, DOOO, and GCO.
With that background, QQQ gapped lower to start the premarket session and has printed an indecisive, black-body candle since then that did more price back below its T-line (8ema) as that retest begins again. Meanwhile, SPY and DIA opened the early session more or less flat before trading decidedly bearish in larger black-body candles. (To be fair, both are still not down to a retest of their T-line. So the damage is not heavy.) So, the short-term trend is still bullish. At the same time, the mid-term trend is bullish and in the long-term, we are now clearly back in a Bull trend with DIA sitting just below all-time highs on the pre-market pullback and SPY less than a percent from its own high-water mark. In terms of extension, none of the major index ETFs are too far extended from their T-line. However, the T2122 indicator is in the top half of its overbought territory. So, the market could use a pause or pullback. However, remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, nine of the 10 are in the red this morning with the the biggest dog NVDA (-2.03%) out front leading the way lower the second biggest TSLA (+0.76%) holding up by far the best.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Thursday was a crazy roller coaster ride. SPY gapped up 0.35%, DIA gapped up a whopping 0.73%, and QQQ gapped up 0.39%. From there, SPY and QQQ slowly and steadily rallied to the high of the day at 12:50 p.m. Then both gave us 70 minutes of mostly sideways action. Then the floor fell out as both SPY and QQQ sold off fast to recross their opening gaps and hit the lows about 2:50 p.m. Then the rest of the day the Bulls and Bears duked it out in chop along the lows. Meanwhile, after the open, DIA immediately faded its opening gap, bounced up off of Wednesday’s closing price at 10 a.m. and rallied sharply until 12:30 p.m. before trading sideways in a tight range until 2:25 p.m. At that point, it followed the other major index ETFs and sold off for 15 minutes, back down into the opening gap. From there, just like the broader index ETFs, DIA saw the Bulls and Bears chop along the afternoon lows. At day end, DIA printed a new all-time high and a new all-time high close.
On the day, eight of the 10 sectors were in the green with Energy (+0.95%) leading the way higher. On the other side, Communications Services (-0.54%) and Consumer Defensive (-0.47%) were the two losing sectors. At the same time, SPY eked out a 0.01% gain, DIA gained 0.62%, and QQQ lost 0.15%. The VXX fell 3.57% to close at a very low 45.88% and T2122 popped back up into the top half of its overbought range at 92.57. 10-year bond yields rose to close at 3.865% while Oil (WTI) dropped 1.85% to close at $75.90 per barrel. So, Thursday was quite a whiplash with gaps higher, morning rallies, and an afternoon selloff. All three major index ETFs printed indecisive, black-bodied, Spinning Top candles with SPY retesting and holding above its T-line (8ema) while QQQ retested from below and failed that test. (Obviously, at its all-time highs, DIA remains well above its T-line.) This happened on above-average volume in the DIA, average volume in the QQQ, and below-average volume in the SPY.
The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in slightly below expectations at 231k (compared to a 232k forecast and the prior week 233k). On the ongoing side, Weekly Continuing Jobless Claims were up to 1,868k (below the forecast of 1,870k, but up from the prior week 1,855k). At the same time, Preliminary Q2 GDP was stronger than anticipated (revised up) at +3.0% (versus a forecast of +2.8% and far better than Q1’s +1.4%). On the cost of growth side, the Preliminary Q2 GDP Price Index was two ticks higher than predicted at +2.5% (compared to a +2.3% forecast, but down significantly from Q1’s +3.1%). At the same time, July Goods Trade Balance was worse than expected at -$102.66 billion (versus a forecasted -$97.70 billion and the prior month’s -$96.56 billion). In terms of inventories, Preliminary July Retail Inventories were up two ticks to +0.5% (compared to a June +0.3% reading). Later, July Pending Home Sales came in EXTREMELY LOW at -5.5% (compared to a +0.2% forecast and drastically down from June’s +4.8% value). Finally, after the close, the Fed Balance Sheet showed a strong decline of $71 billion to $7.123 trillion.
After the close, ADSK, DELL, GAP, and MRVL all reported beats on both the revenue and earnings lines. Meanwhile, LULU missed on revenue while beating on earnings. However, AMRK and ULTA missed on both the top and bottom lines.
After the close, AFRM, COO, CRWD, FIVE, NTAP, NTNX, NVDA, OKTA, PSTG, CRM, VEEV, and VSCO all reported beats on both the revenue and earnings lines. At the same time, GEF, GES, and HPQ all beat on revenue while missing on earnings.
In stock news, on Thursday, UBER announced it will invest in UK startup Wayve to help them work with major automakers to accelerate its self-driving technology. (The size of the investment was not disclosed.) Later, Bloomberg reported that Samsung is exploring options to acquire at least some of NOK assets. At the same time, Japan’s Nippon Steel announced it plans to invest and additional $1.3 billion in two of X’s steel mills (assuming their acquisition is approved). Later, OKE announced it would buy $5.9 billion worth of mid-stream assets, including a 43% stake in ENLC to bolster its Permian Basin and mid-continent competitive position. At the same time, the Teamster union said that AMZN workers across GA, CA, KY, and NY will be joining the 100 AMZN drivers from IL that have been striking since June.
Meanwhile, MRO shareholders voted in favor of COP’s $16 billion acquisition. Later, Reuters reported that DELL is attempting to sell its SecureWorks cybersecurity unit again. (DELL failed to find a buyer for the unit in 2019 and 2020.) At the same time, Reuters also reported that AAPL and NVDA are both in talks about joining the next round of funding of OpenAI as they seek to gain (AAPL) or improve (NVDA) their AI offerings. After hours, Reuters reported that bearish leveraged ETFs tied to NVDA saw a +446% surge in buying (net long the levered bearish bet on NVDA) between NVDA’s May 21 earnings and its reported Wednesday evening. (This could be coincidence or indicate a change in sentiment on the market leader.)
In stock legal and governmental news, on Thursday, EIX announced it will seek CA Public Utilities Commission approval of a settlement agreement related to 2017 and 2018 natural disasters. If approved, EIX might be able to recover $1.6 of the $2.7 billion in losses it paid. Later, a LMT and RTX joint venture was awarded a $1.3 billion contract to produce Javelin missiles for the US Army. Meanwhile, the US 6th Circuit Court of Appeals ruled against GM, saying the company must face a class-action lawsuit related to selling 800,000 vehicles with faulty transmissions. After the close, LUNR announced it had won a $117 million contract from NASA.
Also after the close, Bloomberg reported that the Netherlands plans to limit ASML’s ability to repair and maintain its equipment that had been sold to China, by not renewing the licenses required for ASML to do that business when they expire at year end. At the same time, Reuters reported that the Pentagon is withholding $5 million per F-35 jet as deliveries of those jets has resumed. The price per jet is $82.5 million and withholding $5 million is intended to push LMT to solve the problems that had caused a months-long stoppage of F-35 deliveries. (F-35s account for 27% of LMT sales.) Later, NDAQ agreed to pay $22 million to settle CFTC charges that its former energy contract unit failed to perks offered to certain traders as well as making false and misleading statements to the regulator.
In miscellaneous news, on Thursday, two AI startups (OpenAI and Anthropic) signed deals with the US government for “research, testing, and evaluation of AI safety.” At the same time, Freddie Mac reported that the national average 30-year, fixed-rate, conforming loan rate fell to 6.35%. This was the lowest average since early May 2023. Later, rating agency Fitch issued a report saying that US fiscal policy is unlikely to change, regardless of which major candidate wins the Presidential election. This was released as part of the agency affirming the US credit rating of AA+.
Overnight, Asian markets were green across the board. Shenzhen (+2.38%) was way out front leading the region higher, followed by Malaysia (+1.53%), Hong Kong (+1.14%), and Singapore (+1.13%). In Europe, we see a similar but not clean sweep as three of the smaller bourses (out of 14) show red at midday. The CAC (+0.34%), DAX (+0.17%), and FTSE (+0.26%) are leading the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a move higher ahead of PCE data. The DIA implies a +0.23% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.75% open at this hour. At the same time, 10-Year bond yields are down slightly to 3.858% and Oil (WTI) is flat at $75.90 per barrel in early trading.
The major economic news scheduled for Friday includes July Core PCE Price Index, July PCE Price Index, and July Personal Spending (all at 8:30 a.m.), Aug Chicago PMI (9:45 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.). The major earnings reports scheduled for before the open are limited to JKS and MNSO. Then, after the close, there are no significant reports scheduled.
So far this morning, JKS and MNSO missed on the revenue line while beating on earnings. On the other side, FRO beat on revenue while missing on earnings.
With that background, all three major index ETFs gapped higher to start the premarket session. However, all three have also printed small-body, indecisive candles since that point as traders wait on PCE data. The gap took QQQ back above its T-line, so all three are above their respective 8ema at this point. So, the short-term trend is still bullish. At the same time, the mid-term trend is bullish and in the long-term, we are now clearly back in a Bull trend with DIA sitting at all-time highs and SPY less than a percent from its high-water mark. In terms of extension, SPY and QQQ are fine relative to their T-line, but DIA is getting a little stretched above its own. In addition, the T2122 indicator has popped back up into the top half of its overbought territory. So, the market could use a pause or pullback. However, remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, all 10 are in the green this morning with the INTC (+3.18%) out front and AAPL (+0.52%) the laggard. With all of this said, remember its Friday, pay day, and we are at month end as well as sitting in front of a 3-day weekend. So, prepare your account for the holiday weekend news cycles and don’t forget to take profits.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Stock futures rose on Thursday as investors aimed to rebound from the previous session’s declines the a GDP in focus. Wall Street seemed to shrug off Nvidia’s post-earnings dip, with attention shifting to upcoming economic reports, including GDP, International Trade, and Jobless Claims data, set to be released before the market opens. Additionally, the market is expected to find direction from earnings reports, particularly those with a retail focus, throughout the day.
European markets traded higher on Thursday as investors focused on economic data from the region. While oil and gas stocks saw a slight pullback, the tech sector experienced a notable rise of 1.87%. Germany’s preliminary consumer price index for August was reported at 2.2%, and economic sentiment improved in both the euro area and the European Union.
Asia-Pacific markets experienced a downturn on Thursday, primarily driven by declines in tech stocks following Nvidia’s second-quarter results. South Korean and Taiwanese indexes were notably impacted, with South Korean chip giant SK Hynix plummeting 5.35% and Samsung Electronics dropping over 3%. These significant losses in tech stocks led to the Kospi falling by 1.02%, closing at 2,662.28, marking the steepest decline in the region.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include FLWS, SEO, BBY, BIRK, BF.B, BURL, DG, GMS, MBUU, MCFT, OLLI, PLAB, RY, & TITN. After the bell include ADSK, DELL, DOMO, ESTC, GAP, HCP, LULU, MRVL, & MDB.
News & Technicals’
Nvidia shares declined in U.S. premarket trading on Thursday, even though the company’s fiscal second-quarter results surpassed estimates. The high expectations for the chipmaker meant that merely beating estimates wasn’t enough to boost the stock significantly. Analysts noted that Nvidia would have needed to exceed all expectations by a substantial margin to see a positive reaction in its stock price. This pullback follows an impressive rally, with Nvidia’s shares having surged over 150% this year. The recent dip highlights the challenges of maintaining momentum after such a significant rise.
Salesforce reported strong fiscal second-quarter results, surpassing estimates and prompting the company to raise its full-year profit outlook. In addition to the positive financial news, Salesforce announced that its Chief Financial Officer, Amy Weaver, will be stepping down. Weaver will remain with the company until a successor is appointed and will continue to serve as an advisor. This transition comes amidst a period of robust performance for Salesforce, highlighting both its financial strength and commitment to smooth leadership transitions.
CrowdStrike reported stronger-than-expected quarterly results but lowered its full-year guidance due to incentives offered in a customer commitment package following a widespread outage on July 19. The cybersecurity software company issued an apology to its customers and partners for the disruption. However, it now faces class action lawsuits and a legal threat from Delta Air Lines. This situation underscores the challenges CrowdStrike is navigating despite its robust performance.
Shares of Super Micro plummeted 19% on Wednesday following the company’s announcement that it would not file its annual report for the fiscal year on time. This decline was further exacerbated by Hindenburg Research’s disclosure of a short position in the company, accompanied by allegations of “fresh evidence of accounting manipulation.” However, analysts at JPMorgan have expressed skepticism about Hindenburg’s claims, describing the report as “largely void of details around alleged wrongdoings from the company.” This situation has created significant uncertainty and volatility for Super Micro’s stock.
Traders should brace for volatility this morning as the market opens higher, influenced by the recent Nvidia report and GDP in focus. The current gap up continues to reflect an overbought condition, so it’s crucial to tighten stops to safeguard gains and be prepared for potential whipsaws. Looking ahead, it’s important to keep in mind that Friday will bring the Fed’s preferred Core PCE inflation report, which could further impact price volatility.
Markets sold off most of the day with the Bulls rallying to recover some ground during the last two hours. SPY opened 0.06% lower, DIA opened 0.08% lower, and QQQ opened 0.10% lower as markets started the day little changed. However, from there, QQQ immediately started to sell off. Meanwhile, SPY and DIA chopped sideways until 11:10 a.m., when they got the message and followed QQQ in a selloff. All three major index ETFs reached their lows of the day at 2 p.m., at which point a market wide rally began that lasted into the close. This action gave us a black-bodied Spinning Top in the DIA which retested and passed the test of its T-line (8ema). At the same time, SPY and QQQ were much larger-body, black, indecisive candles with SPY testing and staying above its T-line while QQQ fell down through its 8ema (and just barely held onto its 17ema).
On the day, all 10 sectors were in the red with Technology (-1.24%) and Consumer Cyclical (-1.23%) leading the way lower ahead of NVDA earnings. On the other side, Financial Services (-0.04%) held up better than the other sectors. At the same time, SPY lost 0.60%, DIA lost 0.41%, and QQQ lost 1.18%. The VXX spiked up 5.62% to close at a still low 47.52% and T2122 fell out of its overbought territory, but remains in the top end of its mid-range at 75.68. 10-year bond yields rose slightly to close at 3.839% while Oil (WTI) dropped 1.03% to close at $74.75 per barrel. So, Wednesday technically saw a selloff followed by a bounce. However, it really was a waiting game as the market anticipated the NVDA earnings. This all happened on less-than-average volume in all three, with QQQ coming the closest to average and SPY coming in the furthest below its average.
The major economic news scheduled for Wednesday were limited to EIA Crude Oil Inventories, which came in with a much lower than expected drawdown of -0.846 million barrels (compared to a forecast of a 2.700-million-barrel drawdown and the prior week’s 4.649-million-barrel drawdown).
In the big news of Wednesday, NVDA beat on both lines. The company reported a 154% surge in data center sales and “robust AI demand” that resulted in $30.04 billion in sales for the quarter (versus a $28.68 billion consensus forecast). On the bottom line, NVDA delivered $0.68of earnings, again beating the $0.64 estimate. NVDA also announced guidance of Q3 revenue of $32.5 billion (plus or minus 2%), which exceeded the $31.9 billion average estimate prior to the announcement. In addition, NVDA said the board had approved an additional $50 billion share buyback program. However, NVDA stock fell 5% in after-hours trading as it seems traders are concerned more about potential problems with NVDA’s next big AI money-printer (Blackwell) than they were elated by the big beats and big new buyback program from the green giant.
In Fed news, after the close Wednesday, Atlanta Fed President Bostic it was “time to move on.” Essentially, Bostic was saying with inflation down farther (than before) and the unemployment rate up more than he anticipated, it was time to get to rate cuts. Still, he then hedged his bets saying, “I don’t want us to be in a situation where we cut, and then we have to raise rates again: that would be a very bad outcome.” He went on to say, “If I’m going to err on one side, it’s going to be waiting longer just to make sure that we don’t have that up and down.” (So, it’s time to get to rate cuts…but I’m not sure…and it may not be time. Very insightful.)
After the close, AFRM, COO, CRWD, FIVE, NTAP, NTNX, NVDA, OKTA, PSTG, CRM, VEEV, and VSCO all reported beats on both the revenue and earnings lines. At the same time, GEF, GES, and HPQ all beat on revenue while missing on earnings.
In stock news, on Wednesday, SMCI delayed the reporting of its quarterly earnings on the heels of Tuesday evening’s report from short-seller Hindenburg, which alleged the company has “glaring accounting red flags.” (SMCI stock was hammered on the news.) At the same time, SEC filing showed that BRKB sold an additional $982 million of BAC over August 23, 26 and 27. Despite the sale, BRKB remains the largest shareholder of BAC, still holding almost 904 million shares. In unrelated news, BRKB also became a member of the “Trillion-dollar market cap” club, becoming the first non-tech company to reach that milestone. At the same time, DKS disclosed that it had found unauthorized third-party access to its IT systems (found a hack) which had exposed “certain confidential data.” Later, GOOGL announced it has updated its AI (Gemini) for image creation to fix inaccuracies such as the wrong number of fingers, etc. The revised version will be made available later this week. At the same time, UAL flight attendants voted to authorize a strike by a 99.99% margin. Later, after the close, Bloomberg reported that BIG is considering filing for bankruptcy due to a persistent decline in sales. (BIG shares fell 20% after hours on the report.)
In stock legal and governmental news, on Wednesday, AVAV announced it had been awarded a $990 million contract from the US Army to build SwitchBlade drones. At the same time, DIS announced it had won approval for the $8.5 billion merger of its Indian media assets with Reliance Industries (large Indian media company). To secure the approval, the two firms had to promise not to raise advertising rates on the cricket matches the merged company will broadcast. Later, the NHTSA announced it closed two separate investigations into now bankrupt Fisker’s Ocean SUVs after the startup issued recalls to fix problems with door malfunctions and a loss of braking. At the same time, KVUE (maker of Tylenol) won a ruling by a US District judge, which preempts a consumer’s lawsuit under NY State law. (The case alleged packages labeled “Extra Strength” and “Rapid Release” had been found to not relieve pain better or faster than the “Regular Strength” version, and in fact took longer to act.)
Elsewhere, META lost a lawsuit in Brazil, which alleged the social media company accepted ads that used the name of a Brazilian department store (without the store’s permission) to fraudulently deceive consumers. META faces a $3.62 million fine as a result of the loss but has the right to appeal. After the close, the Fed announced new capital requirements for US banks (following the recent stress tests). The Fed agreed to reduce GS’s required capital cushion from 6.4%, which the test suggested was needed, to 6.2% after GS lobbying. Later in the evening, YELP sued GOOGL alleging the search giant used its search monopoly (as found by federal ruling) to dominate local search and advertising.
In miscellaneous news, on Wednesday, WFC issued a commodity investor advisory noting that the rapid increase in supply of liquified natural gas poses a substantial risk to natural gas prices through the end of the decade. The report said WFC expects the annual growth of LNG supply to grow 10% per year in 2026 and 2027, while exceeding 8% annually in 2028 and 2029.
Overnight, Asian markets were mostly in the red with just four of the 12 regional exchanges above break-even. Malaysia (-1.29%), South Korea (-1.02%), and New Zealand (-0.94%) paced the losses while Shenzhen (+0.94%) was by far the biggest gainer. In Europe, we see the opposite picture taking shape with just three of 14 bourses in the red. The CAC (+0.72%), DAX (+0.65%), and FTSE (+0.29%) lead the region higher in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a green start to the morning. The DIA implies a +0.53% open, the SPY is implying a +0.18% open, and the QQQ implies a +0.19% open at this hour. At the same time, 10-Year bond yields are down slightly to 3.833% and Oil (WTI) is up a third of a percent to $74.77 per barrel in early trading.
So far this morning, BBY, BURL, and CM have all reported beats on both the revenue and earnings lines. Meanwhile, TITN missed on revenue while beating on earnings. However, BIRK, DG, and GMS missed on both the top and bottom lines.
The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q2 GDP, Preliminary Q2 GDP Price Index, July Goods Trade Balance, Preliminary July Retail Inventories (all at 8:30 a.m.), July Pending Home Sales (10 a.m.), and the Fed Balance Sheet (4:30 p.m.). We also hear from Fed member Bostic (3:30 p.m.). The major earnings reports scheduled for before the open include AEO, BBY, BIRK, BF.B, BURL, CPB, CM, DG, GMS, OLLI, PSNY, and TITN. Then, after the close, AMRK, ADSK, DELL, GAP, LULU, MRVL, and ULTA report.
In economic news later this week, on Friday, we get July Core PCE Price Index, July PCE Price Index, July Personal Spending, Aug Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations.
In terms of earnings reports later this week, on JKS and MNSO report.
With that background, SPY and QQQ gapped down to start the premarket in the NVDA results and fears. QQQ in particular has been volatile in the early session. Meanwhile, DIA made a modest gap higher to start the premarket. Since that start, all three major index ETFs have printed large white-body candles in the early session. DIA is back trading a new all-time highs this morning. SPY retested and is now back above its T-line, At the same time QQQ remains below and DIA remains above their respective 8emas. All three sit on the green side of flat from Wednesday’s close. So, despite Wednesday’s pullback, the short-term trend is still bullish. At the same time, the mid-term trend is bullish and in the long-term, we are now clearly back in a Bull trend. In terms of extension, SPY and QQQ are fine relative to their T-line, but DIA is getting a little stretched above this morning. However, even though it has pulled back some and is out of the overbought territory, the T2122 indicator remains at the top end of its mid-range. So, again the Bears might have a little more slack to play with than the Bulls this morning. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. (In a volatile market, that may mean sitting on your hands.) With regard to those 10 big dog tickers, eight of the 10 are in the green with the biggest dog NVDA (-4.24%) acting as an anchor, apparently on “sell the news” trader thinking.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
S&P 500 futures edged slightly higher on Wednesday with investors eagerly awaiting Nvidia’s quarterly earnings announcement. Wall Street is particularly focused on Nvidia to assess the ongoing viability of the tech and AI sectors. The semiconductor giant’s performance is seen as a key indicator for the broader market trends in these industries. Nvidia is scheduled to release its earnings report after the market closes, making it a pivotal moment for investors tracking the tech and AI trade.
European markets saw an uptick on Wednesday as investors turned their attention to new earnings reports and economic data. While mining stocks dipped by 0.87%, the chemicals sector experienced a gain of 1.02%, and insurance stocks increased by 1.01%. Additionally, data from the French statistics office indicated a slight improvement in household confidence regarding the country’s economic outlook in August.
Asia-Pacific markets experienced a mixed performance recently, with China’s CSI 300 index reaching its lowest point in nearly seven months. In Australia, the Consumer Price Index (CPI) saw a year-on-year increase of 3.5%, slightly surpassing the 3.4% forecasted by economists polled by Reuters, but showing a decrease from the 3.8% recorded in June. The minutes from the latest meeting of the Reserve Bank of Australia (RBA) revealed that the central bank had contemplated raising interest rates as part of its efforts to control inflation.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday before the bell include ANF, BMO, BBWI, CHWY, DCI, FL, SJM, KSS, LI, & PDCO. After the bell include NVDA, CRM, AFRM, COO, CRWD, FIVE, GEF, HPQ, NTAP, NTNX, OKTA, VEEV, & VSCO.
News & Technicals’
China’s state media has sharply criticized Canada for its decision to impose over 100% import tariffs on Chinese electric vehicles, using more forceful language than the official government response. The editor of the Global Times, a Beijing government mouthpiece, accused Canada of “shooting itself in the foot” by adopting U.S. protectionist policies. In contrast, Canada defended the tariffs, stating that they are intended to “level the playing field for Canadian workers” and support domestic producers of electric vehicles, steel, and aluminum in both domestic and international markets.
Cryptocurrencies continued their downward trend from Tuesday, influenced by lower Asia futures, which led to significant liquidations on the Bybit exchange. Data from CoinGlass revealed that the futures market experienced $93.52 million in long ether liquidations and $85.93 million in bitcoin liquidations. This wave of liquidations underscores the volatility in the cryptocurrency market and the impact of broader market trends on digital assets.
Lego reported a 13% increase in revenue for the first half of the year, reaching 31 billion Danish krone (approximately $4.65 billion). The company attributed this growth to strong performance across its product lines, particularly Lego Icons and Lego Creator, as well as its collaboration with Epic Games’ Fortnite. Despite a slowdown in consumer spending on big-ticket items in China, Lego remains optimistic about the long-term potential in the region. This positive outlook reflects Lego’s strategic focus on innovation and partnerships to drive sustained growth.
Nordstrom exceeded Wall Street’s earnings expectations, thanks to its successful cost-cutting measures and efficiency improvements. However, despite this strong performance, the company provided cautious guidance for the full year, citing a decline in demand for luxury goods. To drive growth, Nordstrom has increasingly relied on its off-price division, Nordstrom Rack. This strategy highlights the company’s adaptability in navigating a challenging retail environment while seeking to maintain profitability.
There is palpable anticipation in today’s market condition with traders eagerly awaiting Nvidia and what it might mean for the overall market. However, let’s not forget the big market moving economic reports coming Thursday and Friday before the bell so be careful not to caught up in hype with a fear of missing out. Choppy price action could exist most of today as we wait but I would plan for considerable price volatility after the Nvidia earnings straight though to the Core PCE figures Friday morning. Plan your risk carefully.
Tuesday was a sideways day as it seems the market is waiting on NVDA earnings Wednesday evening. SPY gapped down 0.23%, DIA opened down 0.14%, and QQQ gapped down 0.35%. However, after the opening bell, all three major index ETFs rallied steadily back across the gap and reached the highs shortly after 11 a.m. From there, all three drifted lower and slowly drifted back up toward the highs in a sideways grind. All three closed in the upper part of their candles. This action gave us white-bodied candles with DIA printing a Hammer or Hanging Man type. DIA also eked out a new all-time high close while QQQ retested (and passed the test) of its T-line (8ema). This happened on well below-average volume in all three major index ETFs.
On the day, six of the 10 sectors were in the red with Energy (-0.89%) out front leading the others lower. Meanwhile, Technology (+0.29%) and Financial Services (+0.19%) held up better than the rest of the market. At the same time, SPY gained 0.13%, DIA gained 0.03%, and QQQ gained 0.30%. VXX was down almost 2% to close at 44.99% and T2122 fell but remains in its overbought territory to close at 83.76. 10-year bond yields rose to close at 3.831% while Oil (WTI) dropped 2.23% to close at $75.68 per barrel on the lack of escalation in the Middle East. So, Tuesday was a blah day that felt as if traders were waiting on the NVDA earnings (or maybe Friday’s PCE data) to figure out their next move. On the other hand, it’s possible most of the traders (or at least the big money traders) took the week off ahead of the Labor Day holiday.
The major economic news scheduled for Tuesday was limited to Conference Board Consumer Confidence, which came his stronger than expected at 103.3 (compared to a forecast of 100.9 and a July reading of 101.9). That reading was a six-month high. Then after the close, the API Weekly Crude Oil Stock report showed a slightly larger-than-expected drawdown of 3.400 million barrels (versus a forecasted 3.000-million-barrel drawdown and the prior week’s 0.347-million-barrel inventory build).
In Fed news, Reuters reported Tuesday that both the Chicago and NY Presidents (Goolsbee and Williams respectively) voted in favor of a quarter-point rate cut in the Discount Window rate at the July FOMC meeting. The other 10 voters had voted to hold rates steady. While not exactly tied to the Fed Funds rate, the Discount Window rate (what banks pay to borrow from the Fed overnight) is a good indicator of where monetary policy is headed. This provides additional detail to the Meeting Minutes summary that was recently released.
After the close, JWN and PVH reported beats on both the revenue and earnings lines.
In stock news, on Tuesday, the CEO of RYAAY (Ryanair) told Reuters that the new management of BA “continue to disappoint” and that deliveries are behind schedule. He said, “Things are continuing to slip slightly, it’s been disappointing” as he noted his airline now expects to take delivery of just 20-25 of the 737 MAX planes (rather than the 29 they had ordered) during the summer of 2025 after receiving 5 of 10 jets they had expected in July 2024. At the same time, LLY announced a 50% price cut on the single-dose vials of its blockbuster Zepbound obesity and diabetes drug. The price cut was part of LLY’s announcement of the new single-dose size of the drug. Later, XPEV announced it has priced its first budget EV “MONA” starting at $16,813 (without auto-driving technology). It also launched a $21,866 model uses a self-driving technology very similar to TSLA’s “full self-driving.” At the same time, BUSE announced it has agreed to acquire smaller rival CFB for $916.8 million in cash. (The deal creates a combined regional bank with $20 billion in assets in the Kansas City to Denver to Phoenix to Dallas area.)
Elsewhere, META announced it is closing the augmented reality studio intended to be used by third-party creators so they could make content for the company’s whole “Metaverse” vision. The release said the funds would be rerouted into other priorities, notably AI. After the close, Reuters reported that the options on NVDA imply that its earnings reports Wednesday evening will result in a $300 billion swing (positive or negative) in the company’s market cap. That would be about 9.8% of the company’s $3.11 trillion market cap as of Tuesday’s close. It would also dwarf the entire market cap of 95% of the S&P 500 members. At the same time, the NFL announced it had voted to allow private equity firms to buy up to a 10% stake in NFL teams. The first firms approved include ARES, BX, CG, TSLX, and other unlisted firms. Later, WMT announced new third-party seller services very similar to those offered by AMZN (fulfillment by Amazon). WMT will offer sellers import, warehousing, and shipment services ahead of the holiday selling season. At the same time, the AP reported that two workers were killed and a third seriously injured when a tire exploded at a DAL maintenance facility at the Atlanta airport.
In stock legal and governmental news, on Tuesday, the highest court in DE said it will hear an appeal from GSK, who is seeking to reverse a lower court ruling that allows more than 70,000 lawsuits alleging Zantac caused cancer to proceed. Meanwhile, the US DEA postponed its decision on reclassifying cannabis until December, after the election. (Pot stocks such as CGC, TLRY, and GTBIF all fell sharply on the delay.) At the same time, the Dept. of Agriculture announced that a genetically-modified wheat developed by BIOX is safe to grow and breed in the US. After the close, the CFTC (US commodities market regulator) announced it has ordered TTE to pay $48 million in fines for attempting to manipulate benchmark European gasoline futures. Also after the close, the CFPB (Consumer Financial Protection Bureau) announced that at least three of the eight major retailers it investigated are now charging a fee to process any transaction where the consumer is given cash back from a credit or debit card charge. The three are KR, DLTR, and DG. (Others surveyed, but not charging the fee include ACI (which KR is trying to acquire), CVS, WBA, TGT, and WMT.
Overnight, Asian markets were mostly green with just four of the 12 exchanges in the red. Malaysia (+1.39%) and Taiwan (+0.84%) led the gainers while Hong Kong (-1.02%) was by far the biggest loser. In Europe, 12 of the 14 bourses are in the green at midday. The CAC (+0.35%), DAX (+0.58%), and FTSE (+0.03%) lead the region higher in earlier-than-usual afternoon trade. Meanwhile, in the US, as of 6 a.m., the Futures are just waking up and are pointing to a start just on the green side of flat. The DIA implies a +0.01% open, the SPY is implying a +0.05% open, and the QQQ implies a +0.08% open at this early hour. At the same time, 10-Year bond yields are down a little to 3.82% and Oil (WTI) is off 1.03% to $74.73 per barrel in early trading.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q2 GDP, Preliminary Q2 GDP Price Index, July Goods Trade Balance, Preliminary July Retail Inventories, July Pending Home Sales, and the Fed Balance Sheet. We also hear from Fed member Bostic. Finally, on Friday, we get July Core PCE Price Index, July PCE Price Index, July Personal Spending, Aug Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations.
In terms of earnings reports later this week, on Thursday, we hear from AEO, BBY, BIRK, BF.B, BURL, CPB, CM, DG, GMS, OLLI, PSNY, TITN, AMRK, ADSK, DELL, GAP, LULU, MRVL, and ULTA. Finally, on Friday, JKS and MNSO report.
The major economic news scheduled for Wednesday are limited to EIA Crude Oil Inventories (10:30 a.m.). However, we also hear from Fed Governor Waller (1:15 a.m.) and Fed member Bostic (6 p.m.). The major earnings reports scheduled for before the open is limited to ANF, BBWI, CHWY, DCI, FL, HMY, SJM, KSS, LI, PDCO, and RY. Then, after the close, AFRM, COO, CRWD, FIVE, GEF, GES, HPQ, NTAP, NTNX, NVDA, OKTA, PSTG, CRM, VEEV, and VSCO report.
In miscellaneous news, on Federal Housing Finance Administration said Tuesday that, in June, the average US single-family home price fell by 0.1% on a month-on-month basis. On an annual basis, those prices rose 5.1% through June, which was the smallest year-on-year increase in nearly a year (since July 2023). This annual increase is a significant change from just a month earlier, when the annual increase through May was revised up to +5.9%. Elsewhere, one of the last bright spots in the Chinese economy took a hit Tuesday when PDD (which own deep-discount online retailer Temu) missed analyst estimates. In addition, Bloomberg reported that the CEO of PDD mentioned eight different times during his earnings call that “revenue and profits must inevitably decline” as economic growth slows (referring to the Chinese economy).
Overnight, Fed Governor Waller was in India. He pushed back on the feasibility of interlinking instant payment systems across the globe. (That is a pet idea of India’s central bank Governor Das.) Waller expressed concerns over whether domestic fast payment systems can practically be linked. In addition, he indicated he was not sure it was even something worth attempting. Waller said, “Variation around the world in domestic fast payment network adoption means that the value of globally interlinked systems is not yet clear.” Waller went on to cite the potential costs, operational complications, increased costs to banks, and additional oversight needed to make such a global system feasible as hurdles to such as system. Despite all his concerns, Waller said the US remains committed to researching new technologies and ways to enhance cross-border payment systems.
With that background, and earlier than normal for this report, all three major index ETFs are giving us white-body, indecisive Doji-like candles so far in the premarket. All three major index ETFs sit just on the green side of flat from Tuesday’s close. However, there is also nothing to indicate the wait on NVDA or PCE data or after the holiday has subsided. All three are above their T-line and the short-term trend is still bullish. At the same time, the mid-term trend is bullish and in the long-term, we are now clearly back in a Bull trend. Remember that DIA sits at all-time highs while SPY is less than half a percent from its own. QQQ remains the laggard, sitting 5.4% from its own all-time high. In terms of extension, none of the three are stretched above their T-line. However, even though it has pulled back some, the T2122 indicator is still in its overbought range. So, again the Bulls could use a little more rest or pullback. However, keep in mind that the market can remain overdone longer than you can stay solvent predicting turns. Remember the mantra “follow, don’t lead, but also don’t chase” in mind. (In a volatile market, that may mean sitting on your hands.) With regard to those 10 big dog tickers, all 10 are modestly in the green with the biggest dog NVDA (+0.30%) leading the way higher in percentage and dollar-volume of stock traded. The second-biggest dog, TSLA (+0.04%) lags that group so far this morning.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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On Monday, the Dow diverged from the broader market, achieving both intraday and closing record highs. This movement contrasted with a decline in tech stocks and gains in less favored segments like energy, suggesting a potential shift in investor focus away from one of the market’s key drivers over the past year. Investors are particularly keen to see the upcoming earnings report from Nvidia, a major beneficiary of the artificial intelligence boom, scheduled for Wednesday. Additionally, the market is digesting the latest Case-Shiller House Price Index and Consumer Confidence report results released this morning.
European markets saw a modest increase, driven by gains in mining stocks amid hopes for rate cuts. Copper prices reached a near-six-week high, contributing to a 0.9% rise in mining stocks. The automotive sector also performed well, with a 0.96% gain. However, not all sectors shared in the positive momentum, as retail stocks traded in negative territory. Additionally, the final reading of the second-quarter gross domestic product showed a 0.1% decline from the previous quarter, aligning with preliminary estimates.
Asia-Pacific markets experienced a downturn, mirroring the overnight declines in the S&P 500 and Nasdaq. Despite this, China reported a positive economic indicator with industrial profits rising by 3.6% year-on-year from January to July. Meanwhile, the Middle East tensions contributed to a surge in oil prices. U.S. West Texas Intermediate crude saw a significant increase of 3.5%, closing at $77.42 per barrel, while Brent crude rose by 3.05% to $81.43 per barrel, marking its highest level in approximately two weeks.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include AMWD, BNS, HAIN, & SCSC. After the bell include AMBA, BOX, NCNO, JWN, PVH, SMTC, S, & MDRX.
News & Technicals’
Amazon aggregators Branded and Heyday are set to merge this week, forming a new entity named “Essor,” as confirmed by CNBC. This merger comes at a challenging time for Amazon aggregator space, which has struggled since the flow of venture capital funding diminished. Many companies in this sector have faced difficulties in profitably managing the brands they acquired, making this consolidation a strategic move to potentially stabilize and strengthen their operations.
Big Tech companies such as Microsoft, Alphabet, and Meta are pouring billions into data center infrastructure to bolster generative AI capabilities. However, this rapid expansion has significantly increased energy demands. In response, Sustainable Metal Cloud has introduced an immersion cooling technology that is 28% cheaper to install compared to other liquid-based solutions and can reduce energy consumption by up to 50%. According to Tim Rosenfield, co-founder and co-CEO of Sustainable Metal Cloud, this technology supports high-density GPU hosting, which is essential for platforms like Nvidia’s Grace Blackwell.
Rein believes that the panic surrounding PDD Holdings’ recent performance was exaggerated and sees the current situation as a buying opportunity for investors. This perspective follows a significant drop in PDD Holdings’ shares, which plummeted 28.57% on Monday—their largest single-day loss since the company’s Nasdaq listing. The sharp decline was triggered by the company’s failure to meet expectations in its second-quarter results.
Apple announced on Monday that it will appoint Kevan Parekh, currently the vice president of financial planning and analysis, as the new Chief Financial Officer effective January 1. Luca Maestri, who has served as Apple’s CFO since 2014, will transition to leading teams focused on IT, security, and real estate development. This leadership change marks a significant shift within Apple’s executive team as the company continues to evolve its strategic priorities.
While the Dow reached out and closed at a new record high the price patterns left behind on the charts suggests a little caution may be in order. That said, we could see a market just resting and waiting for the highly anticipated report from NVDA after the bell on Wednesday. Expect just about anything as this tech behemoth reports amid all the AI hype the market continues to generate.
