U.S. stock futures edged higher on Thursday as investors prepared for upcoming PPI inflation data following a turbulent session triggered by the release of the August consumer price index. Wall Street is keenly awaiting the August producer price index, with economists surveyed by Dow Jones predicting a 0.2% increase in both the headline and core readings, up from the previous month’s 0.1% and 0.0%, respectively. Additionally, initial jobless claims data for the week ending September 7 is expected to show a slight decrease to 225,000 from 227,000 the previous week.
On Thursday, European stocks surged, with tech and mining stocks leading the charge, rising by 2.69% and 2.87%, respectively. Investors are anticipating a 25-basis point rate cut from the European Central Bank (ECB), which would be the first reduction since June. Additionally, European markets are reacting to the latest U.S. consumer price index (CPI) report, which showed a 0.2% increase in consumer prices for August, bringing the annual inflation rate down to 2.5%, the lowest since February 2021
On Thursday, Asia-Pacific markets experienced an upswing, mirroring the positive momentum from Wall Street, which was driven by a rally in the tech sector. In Japan, the producer price index (PPI) for August increased by 2.5% year-on-year, falling short of the anticipated 2.8% and the 3% rise observed in July. Meanwhile, India is set to release its consumer price index (CPI) for August later today.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include CAL, KR, LOVE, & SIG After the bell include ADBE, & RH.
News & Technicals’
Norfolk Southern has announced the immediate departure of CEO Alan Shaw, who will be replaced by the company’s finance chief, Mark George. Shaw’s exit follows an investigation by the railroad’s board into an allegedly inappropriate relationship with the company’s chief legal officer, Nabanita Nag. Mark George, who has been with Norfolk Southern as CFO for nearly five years, will step into the role of CEO.
Moderna has announced plans to reduce its expenses by $1.1 billion by 2027 as it navigates the downturn in its Covid-related business. The biotech company aims to secure approvals for 10 new products by 2027, signaling a strategic shift towards diversifying its portfolio. However, this transition involves deprioritizing certain parts of its pipeline, leading to the suspension or discontinuation of some projects.
China has issued a stern warning of retaliation in response to a U.S. bill that could lead to the closure of Hong Kong’s trade offices. The proposed legislation mandates the U.S. secretary of state to conduct annual reviews of the “privileges, exemptions, and immunities” granted to Hong Kong’s Economic and Trade Offices. Beijing has urged the U.S. to halt the progression of this act to avoid further straining China-U.S. relations and has vowed to take “strong and resolute countermeasures” if the bill is enacted.
Eli Lilly has announced a significant investment of $1.8 billion to enhance its manufacturing capabilities in Ireland, focusing on its newly approved Alzheimer’s drug and popular weight loss and diabetes treatments. The pharmaceutical giant plans to allocate $1 billion to expand its existing site in Limerick, aiming to boost the production of active ingredients, including those used in its Alzheimer’s treatment, Kisunla. Additionally, Eli Lilly will invest $800 million in expanding its facility in Kinsale, which began producing drugs last year to meet the growing demand for its diabetes and weight loss medications.
After the massive reversal yesterday can the bulls follow though with the upcoming PPI inflation data and Jobless claims report? One thing for sure is with the tremendous volatility traders should be prepared for just about anything remembering about 50% of the companies will be in their blackout period by the end of this week, ending corporate buyback activity.
U.S. stock futures declined on Wednesday as investors anticipated the release of the August CPI report. According to economists surveyed by Dow Jones, the headline Consumer Price Index (CPI) is expected to have increased by 0.2% from the previous month and 2.6% year-over-year. Kristina Hooper, chief global market strategist at Invesco, suggested that the Federal Reserve is likely to implement a 25-basis-point rate cut next week. She noted that a larger 50-basis-point cut could trigger alarm and be perceived as an admission of economic concerns.
European stocks saw an uptick as global markets awaited the latest U.S. inflation data. The tech sector experienced a 1.1% rise, while health care stocks dipped by 0.5%. Retail stocks performed notably well, climbing 1.77%, driven by a 4.2% increase in Spanish fashion house Inditex’s shares following a sales rebound. However, the U.K.’s FTSE 100 slightly declined by 0.02%, as new data revealed the economy remained stagnant in July, missing analysts’ forecast of a 0.2% growth.
Asia-Pacific markets experienced a downturn on Wednesday, with Japan’s Nikkei index suffering the most significant losses in the region. In contrast, South Korea reported a positive economic indicator, with August unemployment dropping to 2.4%, the lowest level since the data series began in 1999, as per Statistics Korea. Meanwhile, Bank of Japan board member Junko Nakagawa announced that the central bank would persist in raising interest rates, provided that the economy and inflation align with their projections.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday before the bell include OXM. After the bell include CAL, KR, LOVE, & SIG.
News & Technicals’
Shares of GameStop fell by 10% in premarket trading after the video game retailer amended an open market sale agreement with the U.S. Securities and Exchange Commission. This amendment permits GameStop to sell up to 20 million additional shares of its Class A common stock. The move likely raised concerns among investors about the potential dilution of existing shares, contributing to the drop in stock price. This development highlights the market’s sensitivity to changes in corporate financing strategies.
Chinese artificial intelligence models might currently lag behind their U.S. counterparts by at least six months, according to Kai-Fu Lee, founder of the startup 01.AI and former head of Google China. However, Lee predicts that Chinese AI applications will likely see rapid growth, potentially outpacing those in the U.S. by early next year. He attributes this anticipated surge to the significantly reduced costs of training effective AI models. This suggests a dynamic shift in the AI landscape, where the speed of application development could become a critical factor in technological leadership.
The U.K. economy remained stagnant in July, with no month-on-month growth, according to preliminary data from the Office for National Statistics. This performance fell short of the 0.2% growth forecasted by economists polled by Reuters. The services sector, which is a major component of the U.K. economy, saw a modest increase of 0.1%. However, this was offset by declines in production and construction output, which fell by 0.8% and 0.4%, respectively. These figures highlight the ongoing challenges facing the U.K. economy, particularly in its production and construction sectors.
JPMorgan Chase shares dropped by 5% on Tuesday following comments from the bank’s president, Daniel Pinto, who indicated that analysts’ expectations for net interest income and expenses in 2025 were overly optimistic. Pinto stated that the current estimate of approximately $90 billion for 2025 is unrealistic due to the Federal Reserve’s interest rate cuts. Additionally, he noted that the expense forecast of around $94 billion for next year is also too optimistic, citing ongoing inflation and new investments. This decline marked JPMorgan’s worst stock performance since June 2020, according to FactSet.
Today all eyes around the world are focused on the August CPI report that will be out before bell. Although futures currently point to a bearish open anything is possible as the market reacts to this inflation data and what it might mean for next Wednesday’s FOMC rate decision. Big moves are possible, and I would not rule out big point whipsaws after the open. Keep in mind that Thursday brings us the Producer Prices report as you plan forward.
Tuesday was a down then up day. SPY gapped up 0.35%, DIA gapped up 0.26%, and QQQ gapped up 0.41%. At that point, all three major index ETFs did some form of morning selloff that re-crossed the opening gap and reached the lows of the day about noon. This was followed by a long, steady rally into the end of the day. This action gave us gap-up candles with long lower wicks. The SPY printed a white-bodied, small-body, long-handle Hammer, while DIA gave us a larger, black-bodied Hammer that retested and failed its T-line (8ema) from below. For its part, QQQ made the most gain with a gap-up, larger white-body Hammer candle. However, this all happened on much lower-than-average volume in all three major index ETFs.
On the day, six of the 10 sectors were in the green and, while it may be a data issue, TC200 showed Consumer Cyclical (+10.89%) way, way out front leading the market higher. On the other side Energy (-1.60%) was by far the worst-performing sector. At the same time, SPY gained 0.44%, DIA lost 0.20%, and QQQ gained 0.92%. VXX fell another 1.77% to close at 51.52% and T2122 was just shy of being flat to stay in the bottom portion of its mid-range at 34.25. At the same time, 10-Year bond yields fell to close at 3.644% while Oil (WTI) dropped another 3.54% to close at $66.28 per barrel. So, Tuesday did see some movement with a gap up, significant selloff and then steady rebound rally all afternoon.
The major economic news scheduled for Tuesday are limited to EIA Short-Term Energy Outlook that showed power consumption was still on track to rise to new records in 2024 and 2025. The EIA projects growing data center demand will increase electric usage to 4,101 billion kilowatt-hours in 2024 and then 4,185 billion kilowatt-hours in 2025. (That compares to a 4,000 billion kilowatt-hours in 2023.) Interestingly, solar accounted for 60% of all electric-generating capacity added in the first half of 2024 with TX leading the way by adding 16 billion kilowatt-hours in the first six months. Later, Weekly API Crude Oil Stocks, which showed a bigger than expected drawdown of 2.790 million barrels (compared to the +0.700-million-barrel inventory build that was forecasted, but much less than the prior week’s 7.400-million-barrel drawdown) were reported.
After the close, PLAY, GME, and WOOF all missed on the revenue line while beating on the earnings line.
In stock news, on Tuesday, TSM reported August sales that point toward a Q3 beat. At the same time, BMWYY (BMW) cut its 2024 financial outlook, citing weaker sales, in particular in China, as well as supply issues. The cut was for EBIT range mid-point to 6.5%, down from 9.0%. Later, VLKAF (Volkswagen) announced it is scrapping a range of labor agreements, including one that guaranteed a minimum number of jobs at six German plants through 2029. The company is in serious negotiations with unions and this may be a negotiating tactic, but it raises the unheard-of prospect of job cuts or plant closures at VLKAF’s flagship German factories for the first time in 87 years. At the same time, NBTB announced it had agreed to buy EVBN for $236 million. The deal will create a bank with $16 billion in assets. Later, BA announced it delivered 40 jets in August, up five from August 2023 and up eight month-on-month. In other BA news, Reuters exclusively reported BA had delayed supplier production milestones by six months for its 737 MAX. (This is a sign BA is now struggling to get production back on schedule for its top-selling 737 MAX planes.) Later, UPS announced it would acquire German healthcare logistics (temperature-control warehousing and shipping) firm Frigo-Trans and its sister company BPL for an undisclosed sum.
Elsewhere, NKE shareholders rejected (for the second straight year) a proposal that the firm enter into binding agreements to address the human rights of workers at its suppliers (where thousands of NKE garment makers are allegedly unpaid, forced labor). At the same time, LUV Chairman Kelly announced he is stepping down amidst a board fight by activist investors and CEO Jordan. Later, CPB announced it is dropping the word “Soup” from its name and will be known as “The Campbell Company” as it shifts into other packaged foods. At the same time, Reuters reported that GS is close to a deal to sell its GM credit card unit to BCS for an undisclosed sum. (The GM card unit has about $2 billion of card balances outstanding.) After the close, the CEO of RTX told a conference that the alarms are going off for it with massive problems like its supply chain having never recovered from COVID-19, being unable to find qualified labor for its production lines, and more. Specifically, RTX CEO Hayes said that 2,000 of the company’s 14,000 suppliers are located in China. He refused to define it, but said that if “if” ever happens, he doesn’t know what the company will deal with the situation. After the close, AMZN announced it will invest $10.45 billion in UK Data Centers over the next five years as it builds out its Web Services offerings.
In stock legal and governmental news, on Tuesday, DE agreed to pay $9.93 million to settle SEC charges that its Thailand subsidiary offered massage parlor and other improper gifts to the government of that country from 2017 to 2020 as well as other commercial bribery to win contracts. At the same time, the SEC fined KDP $1.5 million to settle charges of inaccurate statements regarding the recyclability of its K-cup coffee pods. Later, the NHTSA announced that VLKAF (Volkswagen) is recalling 99k electric SUVs to fix door handles which allow water to seep into circuit boards and can lead to lock malfunctions. At the same time, a new lawsuit was filed against CHD that alleges the company’s Trojan Condoms are not safe because they contain “forever chemicals.” Later, Fed Vice-Chair Barr announced revised capital requirement rules for banks in what is widely seen as a big win for major banks and their lobbyists. (The increase in capital requirements will be roughly half of the increase initially proposed.)
Meanwhile, the FTC told ANCTF (operator of Circle-K convenience stores) and SVNDF (operator of 7-eleven convenience stores) that it may probe any acquisition deal. (If the two strike a deal, it would combine the two largest convenience chains in the world.) Later, a former executive of NWSA testified in the GOOGL antitrust lawsuit, saying that NWSA would have lost $9 billion in 2017 if it had switched away from the GOOGL ad buying platform. This, he said, kept NWSA captive to GOOGL and feeling like hostages. After the close WBA and TEVA announced they had settled with the city of Baltimore MD over opioid crisis liability ahead of the trial which was to begin next week. The two companies will pay $402.5 million to settle the case. Also after the close, a TPR executive testified that if the company merges with CPRI, they will have room to raise prices and lower discounts, just as the FTC had charged. However, while those things were also shown in a slide deck from TPR’s CEO, the executive said that did not necessarily mean the company would do those things.
In miscellaneous news, on Tuesday, OPEC+ revised its global oil demand forecast downward for both 2024 and 2025. This was the second consecutive month OPEC+ has lowered its estimate of worldwide oil usage. Still, the forecast calls for an increase of 2.03 million barrels per day on average for all of 2024 (down a bit from last month’s 2024 forecast of a 2.11 million barrels per day increase). For 2025, OPEC+ is calling for an additional increase of 1.74 million barrels per day (versus last month’s estimate of a 1.78 million barrels per day increase). Meanwhile, FDX warned that some areas of Louisiana may see pickup and delivery delays later in the week as storm Francine is expected to make landfall in the state Wednesday. Elsewhere, the Census Bureau reported that the median US 2023 INFLATION-ADJUSTED Household income had recovered to pre-pandemic (2019) levels, even considering the inflation spikes of 2022 and 2023. Finally, Bloomberg reported that online grocery prices fell by 3.7% in August which was the largest monthly decline since 2014.
Overnight, Asian markets were mostly red with just three of the 12 exchanges above break-even. Japan (-1.49%), Malaysia (-1.24%), and Shanghai (-0.82%) led the region lower. In Europe, we see the opposite picture taking shape at midday with 11 of the 14 exchanges in the green. The CAC (+0.29%), DAX (+0.39%), and FTSE (+0.07%) lead the region higher in early afternoon trade. Meanwhile, in the US, at 7:15 a.m., Futures point toward a down start to the morning. The DIA implies a -0.40% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.35% open at this hour. At the same time, 10-Year bond yields are down to 3.627% and Oil (WTI) is up 2.16% to $67.17 per barrel in early trading.
The major economic news scheduled for Wednesday is limited to August Core CPI and August CPI (both at 8:30 a.m.), and EIA Crude Oil Inventories (10:30 a.m.). The major earnings reports scheduled for before the open include DBI, HEPS, and TEN. Then, after the close, there are no major reports scheduled.
In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported. Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.
In terms of earnings reports later this week, on Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH. Finally, on Friday, there are no reports scheduled.
So far this morning, DBA reported misses on both the top and bottom lines. This included a significant (48%) downside earnings surprise.
With that background, all three major index ETFs opened modestly lower in the premarket. Since that point, all three have printed indecisive (largely wick) candles that are back to little-changed from their early session open. All three remain below their T-line (8ema). So, the short-term trend is bearish. At the same time, the mid-term trend is mixed at best with the QQQ now bearish. In the longer-term we still have a Bull trend with the DIA, SPY, and QQQ. In terms of extension, the 8ema has caught up and none of the three major index ETFs are too stretched below it. At the same time, the T2122 indicator is back in the lower half of its mid-range. So, markets have room to run either direction if one side or the other can find momentum. However, the Bulls have a bit more slack to play with. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, six of the 10 are in the red this morning, led again by TSLA (-0.45%). On the other side, AMZN (+0.25%) is holding up best. Oddly enough, TSLA has traded more in the premarket in terms of dollar-volume than NVDA (-0.21%), which normally has 2-5 times as much dollar-volume as the next closest ticker. So, there may be changes afoot or perhaps traders are just waiting on the CPI numbers.
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
Monday saw a gap higher and then a run up and selloff that results in not much move. SPY gapped up 0.79%, DIA gapped up 0.70%, and gapped up 0.92%. After that open, all three major index ETFs rallied until 10:15 a.m. At that point, the resulting pullbacks all lasted about an hour and varied, with DIA not even pulling back to the opening level, SPY pulling back a little less than half way aback across its opening gap, and QQQ pulling back about two-thirds of its opening gap. All three then rallied back to the highs of the day as of shortly after 1 p.m. only to pullback with DIA and SPY staying above their opening level and the more volatile QQQ dipping back into its gap. Then all three made a modest rally the last 75 minutes of the day. This action gave us gap-up, white-bodied, Spinning Top candles in all three major index ETFs. SPY and QQQ were also Bullish Harami candles while DIA closed 5 cents too high to qualify as a Harami. This happened on below-average volume in all three.
On the day, all 10 sectors were in the green with Industrials (+1.35%) and Financial Services (+1.20%) leading the way higher as Energy (+0.23% lagged behind the other sectors. At the same time, SPY gained 1.12%, DIA gained 1.13%, and QQQ gained 1.29%. VXX plummeted 6.52% to close at 52.45% and T2122 climbed out of its oversold area to the bottom part of its mid-range at 34.73. At the same time, 10-Year bond yields fell slightly to close at 3.70% while Oil (WTI) gained 1.49% to close at $68.68 per barrel. So, Monday was a gap-up and then undecided day that stayed on the Bullish side (with all three major index ETFs closing above their gap-up opens). On the Tech front, GOOGL (-1.46%) was the lone loser among the big dogs, but AAPL’s “Glow Day” product announcement did not help it with the stock only closing up 0.04%. However, NVDA (+3.54%) and NVDA (+2.83%) did gain…maybe on the AI focus of AAPL’s new product offerings.
The major economic news scheduled for Monday were limited to August NY Fed 1-Year Consumer Inflation Expectations, which stayed flat at 3.0%, and July Consumer Credit, which showed a massive jump. July Consumer Credit came in at $25.45 billion (compared to a forecast of $12.30 billion and a June reading of 5.23 billion).
After the close, ORCL reported beats on both the revenue and earnings lines.
In stock news, on Monday, prior to AAPL’s big iPhone refresh (this time featuring AI) a key competitor racked up a big win. Chinese phone maker Huawei announced they had received 3 million pre-orders for their own upcoming phone refresh (this one a tri-fold, Z-shape design). This was significant because Huawei is charging $2,800 for the new tri-fold phone and it didn’t even tell consumers when the phones would be available. Huawei just wanted to front-run AAPL by locking in orders. At the same time, KEY announced it had sold $7 billion of low-yield assets for a loss and that they would take about a $700 million hit on the assets in Q3. Later, the CFO of C told an investor conference he expects banking fees from its Investment Banking unit to rise 20% in Q3 compared to Q3 in 2023.
Elsewhere, SIEGY (Siemens) announced it’s spending $60 million on a new US factory (in NY?) to build high-speed trains for the Los Angeles to Las Vegas passenger route. The plant is expected to come online in 2026 with the rail line expected to begin operation in 2028. After the close, GS CEO Soloman told an investor conference that the bank’s trading business is performing weakly (down 10%) in Q3, especially the bond trading unit. Also after the close, the Wall Street Journal reported that the CEO of NSC will step down amidst the internal probe into misconduct (an inappropriate relationship with employee). Finally, as part of its earnings report, ORCL announced it had signed a deal for web services with AMZN.
In stock legal and governmental news, on Monday, BIG filed for Chapter 11 bankruptcy as expected. BIG also announced it had received $707.5 million from Nexus Capital, which will give it the money to operate while it negotiates a sale to private equity as part of the bankruptcy. Later, the SEC announced that seven public companies had agreed to pay a combined fine of $3 million for violating whistleblower regulations. The offending companies were TRU, ACHC, APPF, IEX, LXU, SMFL, and AKA. At the same time, the US State Dept. approved a $133 million sale of RTX air-to-air missiles to Singapore.
Elsewhere, the FTC trial to block the TPR acquisition of CPRI got underway Monday. The FTC presented emails from the CPRI CEO related to several TPR products and urged the judge to block the merger on anti-trust grounds. At the same time, X and Nippon Steel replied to the Committee on Foreign Investment in the US letter sent last week that opposed the acquisition. X and Nippon Steel claim the CFIUS letter did not seriously consider how the merger might positively impact the national security of both countries and ignores a trade agreement that indicates Japanese steel does not present a risk to the US market. (How that relates to whether Japan owns the US competitor is unclear.)
In miscellaneous news, the SEC approved (along party lines, over GOP-appointed board member votes) new accounting standards (actually auditing standards) that were proposed by the US Public Company Accounting Oversight Board (which was created by Congress after Enron and other accounting scandals). The new standards were written by the PCAOB following its study found that 46% of public company audits done in 2023 did not review sufficient or appropriate evidence to provide a valid audit opinion. (The new standards take effect in December. However, if the disgraced GOP candidate wins, they would likely be reversed in 2025 as being too burdensome on businesses.) Elsewhere, the FBI reported Monday that in 2023, Americans lost $5.6 billion to cryptocurrency fraud schemes (mostly crypto investment schemes). This was a 45% increase from the amount lost to the same source in 2022. Finally oil (WTI) prices rebounded Monday as a new tropical storm entered the Gulf of Mexico. The forecast expects it to become a hurricane on Wednesday (named Francine) and oil traders are betting on at least temporary production and refining shutdowns in the US Gulf Coast area.
Overnight, Asian markets were mostly green on modest moves with just four of the 12 exchanges below break-even. Malaysia (+0.54%), Singapore (+0.46%), and India (+0.42%) led the gains while South Korea (-0.49%) was the biggest loser. Meanwhile, in Europe, the opposite picture is taking shape on modest moves at midday. Just four of the 14 bourses are green with the CAC (+0.13%), DAX (-0.44%), and FTSE (-0.54%) pacing the region in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat. The DIA implies a -0.07% open, the SPY is implying a -0.01% open, and the QQQ implies a -0.13% open at this hour. At the same time, 10-Year bond yields are up to 3.719% and Oil (WTI) is down 1.06% to $67.98 per barrel in early trading.
The major economic news scheduled for Tuesday are limited to EIA Short-Term Energy Outlook (noon) and Weekly API Crude Oil Stocks (4:30 p.m.) However, Fed Vice Chair for Supervision Barr does speak at 10 a.m. The major earnings reports scheduled for before the open include ASO and CMA. Then, after the close, PLAY, GME, and WOOF reports.
In economic news later this week, on Wednesday, we get August Core CPI, August CPI, and EIA Crude Oil Inventories. On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported. Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.
In terms of earnings reports later this week, on Wednesday, DBI, HEPS, and TEN report. On Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH. Finally, on Friday, there are no reports scheduled.
In overnight news, the EU’s top court ruled that AAPL must pay $14.4 billion in back taxes in a case the company has dragged out since 2016. (The case stems from AAPL using Ireland to hide revenue (taking advantage of the bribe tax rate Ireland used to lure AAPL and avoid paying taxes throughout the EU). At the same time, the same top EU Court upheld GOOGL’s $2.4 billion fine for abusing its dominant search market position to favor its ads over competitor ad offerings. Meanwhile, GS said it will take a $400 million pretax hit in Q3 as part of the unwinding of its consumer unit (which included the GM-brand credit card business and other loans). Elsewhere, AZN reported disappointing lung cancer drug trial results.
With that background, all three major index ETFs opened slightly higher but have been indecisive since that point. DIA is retesting its T-line (8ema) from below while QQQ pulled back below Monday’s candle body before rebounding back up into a Butterfly Doji and SPU did something similar with a smaller move down. After these machinations, all three major index ETFs remain near the Monday close. So, the short-term trend is bearish. At the same time, the mid-term trend is mixed at best with the QQQ now bearish. In the long-term we still have a Bull trend with DIA and SPY. In terms of extension, the 8ema has caught up and none of the three major index ETFs are too stretched below it. At the same time, the T2122 indicator is back in the lower half of its mid-range. So, the market has room to run either direction if one side or the other can find momentum. However, the Bulls have a bit more slack to play with. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, 8 of the 10 are in the green this morning, led again by TSLA (+1.33%). However, AAPL (-1.02%) is by far the biggest drag on the group. So, the Bulls have control in the Tech sector again, early 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.
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 remained mostly flat on Tuesday, following a rebound from the worst week of 2024 for major averages. Traders are closely monitoring two significant economic reports expected to influence stock movements: the consumer price index (CPI) report for August, due on Wednesday, and the producer price index (PPI) report, set for release on Thursday. Historically, September tends to be a weak month for equities, adding to investor caution. Additionally, the looming U.S. presidential election on November 5th contributes to the prevailing uncertainty in the market.
European stocks showed a mixed performance on Tuesday, following a more optimistic start to the week. The U.K. saw a slight improvement in its unemployment rate, which eased to 4.1% from May to July 2024. However, annual growth in regular employee earnings declined to 5.1% during the same period. Tech stocks experienced a modest gain of 0.63%, while the healthcare sector dropped by 0.87%, largely due to AstraZeneca’s significant 4.33% fall. The British pharmaceutical giant’s shares plummeted to the bottom of the FTSE 100 after it reported disappointing results from a lung cancer drug trial.
Asia-Pacific markets displayed a mixed performance on Tuesday. China’s exports surged by 8.7% year-on-year in August, surpassing the forecast of 6.5%, while imports saw a modest increase of 0.5%, falling short of the expected 2%. Japan’s Nikkei 225, after initial gains, closed 0.16% lower at 36,159.16, primarily due to a downturn in the health-care sector. Meanwhile, Hong Kong’s Hang Seng index rose by 0.37% in the final hour of trading, and mainland China’s CSI 300 remained relatively stable at 3,195.76.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include ASO, & CGNT. After the bell include GME, PLAY, & WOOF.
News & Technicals’
Oracle reported strong fiscal first-quarter results on Monday, surpassing expectations on both the top and bottom lines. This positive performance led to a rise in the company’s stock during extended trading. Additionally, Oracle announced plans to offer its database services on Amazon Web Services (AWS), the leading cloud infrastructure platform. This strategic move is expected to enhance Oracle’s cloud capabilities and expand its market reach.
Goldman Sachs is set to incur a pretax hit of approximately $400 million in its third-quarter results as it continues to dismantle its troubled consumer business. CEO David Solomon announced at a conference on Monday that the bank’s decision to offload its GM Card business and a separate loan portfolio would negatively impact revenues next month. Additionally, Solomon noted that trading revenue for the quarter is expected to decline by 10%, attributed to challenging year-over-year comparisons and difficult trading conditions in the fixed-income markets during August.
Europe’s top court ruled against Apple on Tuesday in a decade-long legal battle concerning its tax practices in Ireland. The case originated in 2016 when the European Commission mandated that Ireland recover up to 13 billion euros ($14.4 billion) in back taxes from Apple. The Commission had determined that Apple received “illegal” tax benefits from Ireland over a span of two decades. This ruling marks a significant development in the ongoing scrutiny of multinational corporations’ tax arrangements in Europe.
Europe’s also upheld a 2.4-billion-euro ($2.65 billion) fine against Google on Tuesday for abusing its dominant market position by favoring its own shopping comparison service. This fine results from a 2017 antitrust investigation by the European Commission, the EU’s executive arm, which concluded that Google had unfairly prioritized its own service over those of its competitors. This ruling reinforces the EU’s stance on maintaining competitive fairness in the digital marketplace.
As the market waits for the Wednesday CPI report the futures trade mostly Flat this morning. A hurry up and wait choppy Tuesday is not out of the question with very little inspiration coming for either earnings or economic today. Try to avoid trading out of boredom keeping mind the potential market moving report before the bell tomorrow that could create significant gaps both up or down.
U.S. stock futures indicate a significant gap up on Monday as Wall Street attempts to recover from last week’s steep losses. According to Adam Crisafulli of Vital Knowledge, the rally isn’t driven by any specific news since Friday’s close but rather by modest dip buying, largely due to oversold conditions and anticipation of monetary support. Investors are also looking ahead to the release of August’s consumer and producer price reports, scheduled for Wednesday and Thursday mornings, respectively.
European stocks saw an uptick on Monday, managing to rise despite the negative sentiment from Wall Street and Asia-Pacific markets. Most sectors and all major bourses were trading positively. Technology stocks led the gains with a 1.32% increase, closely followed by travel and leisure stocks, which were up by 1.30%. However, Burberry shares fell by 5.19%, dragging down the luxury sector due to declining fortunes in that market segment.
Asia-Pacific markets experienced a downturn on Monday, with Hong Kong’s Hang Seng Index (HSI) leading the losses. The HSI dropped by 1.77% in the final hour of trading, driven by China’s inflation rate, which grew by only 0.6% year-on-year, falling short of the 0.7% expected by economists polled by Reuters. Mainland China’s CSI 300 also saw a decline, falling 1.19% to 3,192.95, marking a seven-month low. Additionally, Japan’s second-quarter GDP growth was reported at 2.9% on an annualized basis, below the anticipated 3.2%.
Economic Calendar
Earnings Calendar
Notable reports for Monday have no reports before the bell but after the bell include CVGW, AVO, ORCL, & RBRK.
News & Technicals’
The unwinding of the yen carry trade is anticipated to persist in September, posing a risk of another substantial sell-off, according to Kathy Lien, managing director of forex strategy at BK Asset Management. Yen traders are expected to closely monitor equity prices and take cues from them, as September is typically a volatile month for stocks. Lien suggests that the unwind could be more aggressive, like what was observed in August, if there is a significant sell-off in stocks. She also notes that the yen remains significantly undervalued, which could impact valuations over the next one to two years.
Huawei has garnered significant attention with over 2.7 million pre-orders for its new tri-fold smartphone, the Mate XT, as revealed on its website on Monday. The Chinese tech giant began accepting pre-orders at midday on Saturday, strategically positioning the launch more than two days ahead of Apple’s anticipated iPhone 16 release, scheduled for early Tuesday morning Beijing time. This early interest highlights the competitive landscape in the smartphone market, with Huawei aiming to capture consumer interest before Apple’s latest offering hits the shelves.
The European Union needs radical reforms through a new industrial strategy to maintain its competitiveness, enhance social equality, and achieve climate targets, according to a highly anticipated report by economist and politician Mario Draghi. The report outlines proposals that would necessitate an additional annual investment of 750 billion to 800 billion euros, as estimated by the European Commission. It also highlights other critical areas, such as supply chain security and defense spending, underscoring the comprehensive approach required to address these multifaceted challenges.
Norfolk Southern’s board is investigating allegations that CEO Alan Shaw engaged in an inappropriate workplace relationship, according to sources familiar with the situation. Shaw, who has been CEO since 2022, has already navigated significant challenges, including a toxic rail derailment and a contentious proxy fight. The company has enlisted outside legal advisors to assist with the probe, which is still in its early stages and may not reveal any misconduct.
With a big overnight buy the dip gap up open as the market attempts to recover watch for the potential of whipsaws after the open. Keeping in mind that we face a CPI reading on Wednesday and a PPI report on Thursday, it is also possible we could chop sideways with considerable volatility as we wait. That said be very careful with the fear of missing out and chasing this morning big gap remembering that SPY, QQQ, and IWM are under their 50-day averages.
Friday saw the Bears in control early and then a drift sideways all afternoon. SPY opened 0.05% higher, DIA opened up 0.13%, and QQQ gapped down 0.20%. At that point, QQQ led the way by selling off sharply until 11 a.m. and then more modestly for another 60 minutes. SPY followed through to the upside for 5 minutes before following QQQ in a sharp selloff until 11 a.m. and then more modestly for an hour. Meanwhile, after the open, DIA rallied for 20 minutes before it too followed QQQ by sharply selling until 11 a.m. and then more modestly until noon. At that point, all the air went out of the market, with all three trading sideways in a very tight range the rest of the day. On the day, SPY and DIA retested their T-line (8ema) and failed that test. SPY also tested and crossed below its 50sma. This action gave us large black-body candles dropping well below the consolidations in SPY and QQQ. This action took place on average volume in the SPY and QQQ as well as slightly below-average volume in DIA.
On the day, all 10 sectors were in the red with Technology (-2.56%) way out in front of the other sectors, leading the way lower. On the other side, Consumer Defensive (-0.46%) and Communication Services (-0.48%) held up better than the other sectors. At the same time, SPY dropped 1.68%, DIA fell 0.98%, and QQQ dropped 2.68%. VXX popped 7.41% to close at 56.11% and T2122 dropped into the middle of its oversold territory at 10.65. At the same time, 10-Year bond yields fell again to close at 3.716% while Oil (WTI) dropped 1.43% to close at $68.16 per barrel on demand concerns. So, Friday a big drop, led by the TSLA (-8.45%), NVDA (-4.09%), GOOGL (-4.02%), AMZN (-3.65%), and AMD (-3.65%). (AVGO also lost 10.35% on very heavy volume after its beat on both lines and modest forecast increase did not meet market expectations.)
The major economic news scheduled for Friday included August Avg. Hourly Earnings, which were better than expected at +0.4% (compared to a forecast of +0.3% and July’s -0.1%). On an annual basis, August Avg. Hourly Earnings were up 3.8% (versus a 3.7% forecast and up from July’s 3.6% reading). At the same time, August Nonfarm Payrolls were up 142k (compared to a +164k forecast but much stronger than July’s +89k). On the private side, August Private Nonfarm Payrolls were up 118k (versus a forecast of +139k but up strongly from July’s +74k value). The August Participation Rate remained steady at 62.7% (with July’s reading also being 62.7%). This led to a August Unemployment Rate of 4.2% (compared to a 4.2% forecast and down a tick from July’s 4.3% reading).
In Fed news, on Friday, New York Fed President Williams indicated that the time has come for rate cuts. Williams said, “With the economy now in equipoise and inflation on a path to 2%, it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate.” However, he did hedge his bets, saying “The stance of monetary policy can be moved to a more neutral setting over time depending on the evolution of the data, the outlook, and the risks to achieving our objectives.” He concluded, “It’s pretty clear we’re going to need over time to get interest rates back to a more normal level. The problem with that statement is I’m not sure what that more normal level is and I’m not sure at all about how long that should take.” Later, Fed Governor Waller agreed with Williams, saying “The time has come (for the Fed to begin rate cuts).” He continued, “If the data supports cuts at consecutive meetings, then I believe it will be appropriate to cut at consecutive meetings.” Waller also opened the door to larger cuts, saying “If the data suggests the need for larger cuts, then I will support that as well. I was a big advocate of front-loading rate hikes when inflation accelerated in 2022, and I will be an advocate of front-loading rate cuts if that is appropriate.”
In stock news, on Friday, BAC analysts reported research showing that GOOGL’s share of the internet search market increased in August, helped by its integration of AI. The report said, GGOL has 90.5% of the search market globally, but “only” 87.9% in the US. At the same time, Reuters reported (and the French company confirmed) that French fir Elis had made an acquisition offer to VSTS. Later, Reuters exclusively reported that QCOM has explored the possibility of acquiring portions of INTC’s chip design business. At the same time, activist investor hedge fund Starboard Value filed a shareholder resolution to end NWSA’s “dual-class shares” in a bid to oust Rupert Murdoch from his control of the company. After the close, S&P announced that DELL, PLTR, and ERIE will join the S&P500 before the open on September 23. (These will replace AAL, ETSY, and BIO, which will be dropped from the index at the same time.) Later, TSM announced they have achieved production yields on par with Taiwanese plants at their AZ plant. This likely means that 4nm plant is on track to achieving output goals after the initial startup in April.
Meanwhile, on Saturday, the Financial Times reported that AAPL’s new iPhone (to be announced on Monday) will use ARM chips for AI technologies. Later, STLA recalled 1.46 million vehicles worldwide, including 1.23 million in the US, due to software malfunction in the anti-lock brake system that can increase the risk of crashes. At the same time BA’s Starliner capsule was able to make it back to earth, parachuting into the NM desert. (It will now be shipped to FL, where it will be examined to discover what parts failed.) In other BA news, Sunday BA announced a it has a tentative deal with a union covering 32,000 of its workers in the US Pacific Northwest. (The deal calls for a 25% wage increase over four years, a commitment to build its next commercial aircraft in that area, 12 weeks paid parental leave, and improved retirement benefits among other things.) At the same time, ANCTF (owner of the Circle-K convenience stores) plans to make a second offer to SVNDF (owner of the 7-eleven convenience stores) according to Bloomberg. (The first offer, of $38.6 billion, was rejected at the end of last week.) Later, CNBC reported that the CEO of NSC is being investigated by the company board over engaging in an inappropriate workplace relationship.
In stock legal and governmental news, on Friday, a federal judge rejected a COIN motion to dismiss a shareholder class action suit alleging the company had played down the risk of being sued by the SEC (for buying/selling crypto being securities). So, the shareholder suit will continue. At the same time, the SEC fined Esmark and its Chairman for making a “false tender offer” to acquire X at $35 per share. (The suit alleges the tender offer was made even though Esmark had no financing in place to execute on the offer, which would have required $7.8 billion in cash.) Later, MA state security regulators fined MS $2 million for failing to monitor insider trading by FRCB prior to the bank failing. (MS managed the stock sales of FRCB and the small bank’s Chair was allowed to execute stock sales prior to material nonpublic information being released to the market.) At the same time, the US State Dept. approved the sale of $691 million of RTX Sidewinder missiles to the Netherlands.
Elsewhere, a bi-partisan group of Congressman and Senators launched an inquiry into six US retailers (including AZO and AAP) over whether they bought Chinese auto parts and evaded tariffs by trans-shipping the cargoes through Thailand. After the close Friday, Bloomberg reported that BIG is preparing to file for bankruptcy under chapter 11. (This comes after the company postponed earnings from Sept. 6 to Sept. 12.) Friday evening, the US Federal Energy Regulatory Commission (FERC) approved BLK’s $12.5 billion (cash and stock) deal to acquire Global Infrastructure Partners (which owns many assets in the utility space). Then, on Saturday, as part of a money laundering case, WYNN agreed to pay $130 million to the SEC and admit that it let unlicensed money transfers from around the world funnel gambler money to its flagship Las Vegas casino. This was part of a Dept. of Justice “Non-prosecution settlement.” Finally, on Sunday, DirecTV filed an FCC complaint against DIS for anti-competitive practices and failing to negotiate in good faith. DIS was requiring DirecTV to take an pay for less popular channels in order to distribute ESPN, while DIS offers “skinnier” bundles direct to the public.
Overnight, Asian markets were mixed but leaned toward the red side. Singapore (+1.22%) was the outlier of four gaining exchanges. Meanwhile, Hong Kong (-1.42%), Taiwan (-1.36%), and Shanghai (-1.06%) paced the losses. In Europe, we see nearly green across the board at midday with only Greece (-0.26%) in the red among the 14 bourses. The CAC (+0.84%), DAX (+0.75%), and FTSE (+0.75%) lead the region higher in early afternoon trade. In the US, as of 7:45 a.m., Futures are pointing toward a gap higher to start the day. The DIA implies a +0.68% open, the SPY is implying a +0.70% open, and the QQQ implies a +0.81% open at this hour. At the same time, 10-Year bond yields are back up to 3.746% and Oil (WTI) is up 0.78% to $68.20 per barrel in early trading.
The major economic news scheduled for Monday are limited to August NY Fed 1-Year Consumer Inflation Expectations (11 a.m.) and July Consumer Credit (3 p.m.). There are no major earnings reports scheduled for before the open. However, after the close, ORCL reports.
In economic news later this week, on Tuesday the Weekly API Crude Oil Stocks are reported. Then Wednesday, we get August Core CPI, August CPI, and EIA Crude Oil Inventories. On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported. Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.
In terms of earnings reports later this week, on Tuesday, we hear from ASO, CMA, PLAY, GME, and WOOF. Then Wednesday, DBI, HEPS, and TEN report. On Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH. Finally, on Friday, there are no reports scheduled.
So far this morning, there are no significant earnings reports.
With that background, it looks as if the Bulls are indecisively in control this morning. All three major index ETFs gapped higher to start the premarket. Since then, all three have given us indecisive, small-body and plenty of wick candles. Despite the gap higher, all three remain below their 8ema. So, the short-term trend is bearish. At the same time, the mid-term trend is mixed with the QQQ now bearish and in the long-term we still have a Bull trend with DIA and SPY. In terms of extension, QQQ remains a bit stretched below its T-line and SPY pushed toward joining it Friday. However DIA remains close enough to the 8ema. On the other hand, the T2122 indicator is back in the middle of its oversold range. So, the market is not “crazy extended” but at least the QQQ will need a pause, bounce, or reversal soon to avoid becoming out of whack in its decline. Just 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, led by TSLA (+1.94%). However, five of the 10 are up more than a percent and the laggard is AAPL (+0.29%). So the Bulls are in control in the Tech sector 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
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🎯 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Markets diverged on indecision (at least momentarily) at the open. SPY opened flat, DIA gapped up 0.21%, and QQQ gapped down 0.35%. However, then they all three ran modestly higher for the first hour, sold off sharply until 11:30 a.m. in the QQQ, and 12:20 p.m. in the SPY and DIA. From that point, all three made a slow, steady rally part of the way back up before starting to sell modestly at 2:55 p.m. before chopping sideways the last 15 minutes (ending on an up-tick). This action gave us indecisive, white-bodied Spinning Top type candles in the SPY and QQQ as well as a Bearish Engulfing candle in the DIA. SPY retested and failed its 17ema while DIA retested and failed its T-line (8ema). This happened on less-than-average volume in all three major index ETFs.
On the day, eight of the 10 sectors were in the red with Industrials (-1.15%) and Healthcare (-1.04%) way out front leading markets lower. Meanwhile, Communication Services (+0.53%) held up better than the others and led the two gaining sectors higher. At the same time, SPY fell 0.24%, DIA fell 0.48%, and QQQ gained 0.09%. The VXX fell almost 5% to close at 52.24% and T2122 dropped again, this time into the lower half of its mid-range at 37.30. 10-Year bond yields fell again to close at 3.731% while Oil (WTI) was just on the red side of flat to close at $69.12 per barrel. So, Thursday saw the rollover continue (albeit slowly) in the SPY and DIA while the QQQ tried to hold us up in a consolidation. It is worth noting that the big dogs tried to hold the rest of the market up with NVDA (+0.94%), TSLA (+4.90%), AAPL (+0.69%), and AMZN (+2.63%) being the four most traded (dollar-volume) in the market. Still, this may have been a waiting day as traders wait on Friday’s August Payrolls numbers.
The major economic news scheduled for Thursday included August ADM Nonfarm Employment Change, which came in significantly lower than expected at +99k (versus a +144k forecast and July’s +111k reading). Later, Weekly Initial Jobless Claims were a bit lower than predicted at 227k (compared to a 231k forecast and the prior week’s 232k). On the ongoing side, Weekly Continuing Jobless Claims were down to 1,838k (versus a 1,870k forecast and the prior week’s 1,860k value). At the same time, Q2 Nonfarm Productivity was up BIG to +2.5% (versus a +2.3% forecast and especially versus Q1’s +0.2% reading). Meanwhile, Q2 Unit Labor Costs were much lower than anticipated at +0.4% (compared to a +0.9% forecast and down sharply from Q1’s 4.0% value). Later, August Global Services PMI was stronger than expected at 55.7 (versus a forecast of 55.2 and July’s 55.0 number). At the same time, August S&P Global Composite PMI that was also stronger than predicted at 54.6 (compared to 54.1 that was forecast and the prior month’s 54.3). Later, August ISM Non-Mfg. Employment was lower than anticipated at 50.2 (versus a 50.5 forecast and July’s 51.1 reading). At the same time, August ISM Non-Mfg. PMI was a couple ticks better than expected at 51.5 (compared to a 51.3 forecast and July’s 51.4 number). On the cost side, August ISM Non-Mfg. Prices were up three ticks to 57.3 (versus a 56.0 forecast and a 57.0 July reading). Later, Weekly EIA Crude Oil Inventories showed a large drawdown of 6.873 million barrels (compared to a 0.600-million-barrel drawdown forecast and the prior week’s -0.668 million barrels value). Finally, after the close, the Fed Balance Sheet showed a $10 billion reduction from $7.123 trillion to $7.113 trillion.
After the close, AVGO and DOCU reported beats on both the revenue and earnings lines. In addition, both companies raised forward guidance.
In stock news, on Thursday, BNY announced it had agreed to acquire Archer (a private technology and operations service for banks). Details were not disclosed. At the same time, the Wall Street Journal reported on data leaked by DIS that disclosed customer and staff personal information as well as company financial and strategy information. Later, F announced that US vehicle sales increased 13.4% in August on strong SUV and pickup demand. (In addition, in a much smaller segment, F all electric sales rose 29% while hybrid sales grew almost 50%.) At the same time, TSLA announced plans to launch “Full Self-Driving” in China and Europe (pending regulatory approval) in early 2025. TSLA CEO Musk said they were “likely” to get approval from both regulators by the end of the year. (TSLA closed up 4.90% on the news.) Later, APLD (which runs data centers) announced it will receive $160 million in funding from investors including NVDA. (APLD closed up more than 65% on the news.) At the same time, ABT said it will be launching a continuous glucose monitoring system, a multi-billion-dollar market.
Meanwhile, CNOB agreed to buy smaller banking competitor FLIC for $284 million. The combined banks will have $114 billion in assets. At the same time, FDX announce it has invested in private AI robotics company Nimble to help scale up automation in the FDX fulfillment unit. Later, Reuters reported that BX and Vista Equity Partners are in talks to acquire SMAR in a deal valued around $7 billion. At the same time, T said it has made its “final offer” to the striking CWA union (which has 17,000 members on strike against T). The union told Reuters “The offer did not meet expectations.” Later, SLTA announced it will invest $385 million in a new plant in Argentina. After the close, the Teamsters union threatened to expand its strike from just the Detroit MPC refinery to other refineries as the company has been unwilling to negotiate with the union. (The Detroit refinery is one of 13 MPC refineries.) At the same time, Bloomberg reported that after the deal with Skydance Media, ORCL co-founder Larry Ellison will control PARA and his son will serve as CEO. Also after the close, CRM announced it would buy private firm “Own Company” for $1.9 billion to accelerate the growth of its data security and privacy products.
In stock legal and governmental news, on Thursday, the SEC announced it will no longer conduct misconduct proceedings against accountants who allegedly perform malpractice or submit fraudulent audit reports for public companies. The move comes after the pro-business, ultra-conservative SCOTUS recently rules to curtail the agency enforcement powers. Later, the EU’s highest court rejected an appeal against antitrust fines imposed by the EU antitrust regulator on AFLYY, SINGY, and British Airways. At the same time, TX energy regulators denied a funding request for a new power plant project that would be a joint-venture of NEE and private Aegle Power. (This is worthy of mention because TX had named the project a finalist for award of state grants to increasing state electric generation, but NEE denied being involved or consenting to be listed as an applicant for the program.) Later, HSY filed a motion seeking the dismissal of a lawsuit which alleges the company misled consumers with holiday-themed candy packaging (when the actual product did not contain the same festive designs and/or colors).
Elsewhere, After the close, SNAP was sued by the state of NM, which alleged the platform failed to protect children from sexual exploitation. At the same time, Nikkei reported that TM (Toyota) and NSANY (Nissan) will invest nearly $7 billion with Japanese government support to expand battery production by 50%. Later, the Dept. of Trans. announced it is opening an inquiry into AAL, DAL, LUV, and UAL rewards and frequent flyer programs over potential unfair, anticompetitive, and deceptive practices. At the same time, AMZN sued the NRLB, challenging the agency which had ruled AMZN must negotiate with a union after an election at the company’s New York City warehouse. AMZN’s suit followed the conservative playbook, saying the agency’s structure is unconstitutional and had no right to rule the election results were fair. Later, China arrested five AZN oncology division employees in Shenzhen, possibly related to the collection of patient data that infringed China’s data-privacy laws.
In miscellaneous news, OPEC+ announced they had agreed to delay a previously planned October and November oil production increase after oil prices hit their lowest levels in nine months. Meanwhile, the Committee on Foreign Investment in the US (made up of cabinet-level members of many departments and chaired by Treasury Sec. Yellen) sent a letter to both X and Nippon Steel. The letter said the acquisition could create US national security risks and could lead to a reduction in domestic steel production. (This letter reflects the feelings of the vast majority of politicians on both sides of the aisle.) However, in Japan, the Japanese PM hopeful and current Digital Minister Kono told reporters that “Governments should not intervene in deals in an arbitrary manner.” He went on to say, “Perhaps it is the presidential election and everyone wants the labor vote, but I would hope that the market will not be distorted by such a situation.”
Overnight, Asian markets were mostly red with just three of the 12 regional exchanges in the green. Shenzhen (-1.44%) and South Korea (-1.21%) paced the more numerous losers while Thailand (+1.66%) and Taiwan (+1.17%) led the gainers. In Europe, with the sold exception of Belgium (+0.16%) we see red across the board at midday. The CAC (-0.25%), DAX (-0.54%), and FTSE (-0.24%) lead the region lower in afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a gap lower to start the day. The DIA implies a -0.36% open, the SPY is implying a -0.61% open, and the QQQ implies a -1.06% open at this hour (ahead of PCE data). At the same time, 10-Yead bond yields have dropped to 3.699% and Oil (WTI) is on the green side of flat at $69.27 per barrel in early trading.
The major economic news scheduled for Friday includes August Avg. Hourly Earnings, August Nonfarm Payrolls, August Private Nonfarm Payrolls, August Participation Rate, and the August Unemployment Rate (all at 8:30 a.m.). We also hear from Fed member Williams (8:45 a.m.) and Fed Governor Waller (11 a.m. and 11 p.m.). The major earnings reports scheduled for before the open include ABM, BIG, DOOO, and GCO. Then, after the close, there are no earnings reports scheduled.
In late-breaking news, AAPL has approved a version of the TCEHY (Tencent) WeChat app for its phones ahead of next Monday’s iPhone 16 launch. (WeChat is China’s most used social media platform.) This move is a nod to the fact Chinese phone makers have been taking market share from AAPL. There was no word on the financial terms, but there had been a pushback from TCEHY about the cut AAPL was taking from app store apps. Elsewhere, in another sign of corporate power, PriceWaterhouseCoopers (one of the “big four” accounting firms globally) has told 26,000 UK employees it will begin to use location data to track employees in order to ensure they spend at least 60% of their time each week in the office or at a client location. Meanwhile, the US announced new export controls on advanced technology (particularly quantum computers and the chip-making tools needed to build them). This brings the US in-line with allies such as the Netherlands (basically limiting ASML tech exports to China) and the UK.
So far this morning, ABM and GCO reported beats on both the revenue and earnings lines. Meanwhile, DOOO missed on revenue while posting a MASSIVE (+104.5%) beat on earnings.
With that background, it looks as if the Bears are in control ahead of data. All three major index ETFs gapped lower to start the premarket. Since then, all three have given us plenty of wick, but SPY does have a black-body candle in the early session, indicating some bearish follow-through. All three remain below their 8ema. So, the short-term trend is bearish. At the same time, the mid-term trend is mixed with the QQQ now bearish and in the long-term we still have a Bull trend with DIA and SPY. In terms of extension, QQQ remains a bit stretched below its T-line but the other two are not far from that average. At the same time, the T2122 indicator is back in the lower half of its mid-range. So, the market is not “too extended” but the QQQ will need more pause, bounce, or reversal soon to avoid becoming out of whack in its decline. Just 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. Only INTC (+0.10%) holds on to green territory. However, NVDA (-1.30%) and TSLA (-0.66%), which are by far the biggest dogs in terms of dollar-volume traded, are pulling tech and the whole market lower early. Finally, don’t forget this is Friday, payday, and time to ready your account for the weekend.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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