Wednesday was an up-and-down day in the market.  SPY gapped down 0.35%, DIA opened just 0.05% lower, and QQQ gapped down 0.69%.  At that point, all three major index ETFs rallied steadily until shortly after 11 a.m. when they hit the high of the day.  However, then we reversed again and all three sold off, reaching the lows of the day at about 3:15 p.m. only to bounce again the final 45 minutes.  This gave us white-bodied, Inverted Hammer type candles in all three major index ETFs.  DIA retested (and failed) its T-line (8ema) from below while SPY retested (and passed) its 50sma from above.  This happened on below-average volume in the SPY, DIA, and QQQ.

On the day, seven of the 10 sectors were in the red with Energy (-1.10%) way out front leading the market lower.  Meanwhile, Utilities (+1.00%) held up far better than any of the other sectors.  At the same time, SPY fell 0.23%, DIA gained 0.02%, and QQQ fell 0.26%. The VXX gained another 2.67% to close at 54.97% and T2122 pulled back a bit more into the mid-range at 56.19.  10-Year bond yields fell again to close at 3.759% while Oil (WTI) dropped again by 2.12% to close at $68.85 per barrel.  So, Wednesday was a volatile, but ultimately nothing day with traders waiting on Thursday’s Weekly Unemployment Claims or maybe even on Friday’s August Payrolls numbers. 

The major economic news scheduled for Wednesday included July Exports, which came in a bit higher than expected at $266.60 billion (compared to a June $265.30 billion value).  At the same time, July Imports also exceeded predictions at $345.40 billion (versus June’s $338.00 billion).  Together, those gave us a July Trade Balance that was exactly as expected at -$78.80 billion (compared to a -$78.80 billion forecast but up slightly from June’s -$73.00 billion reading).  Later, July Factory Orders were strong er than anticipated at +5.0% (versus a +4.7% forecast and vastly better than June’s -3.3% number).  At the same time, July JOLTs Job Openings were lower than predicted at 7.673 million openings (compared to a forecast calling for 8.090 million and a June reading of 7.910 million).  It is worth noting this is the lowest number of job openings since early 2021.  Finally, after the close, the API Weekly Crude Stocks report showed a MASSIVE drawdown of 7.400 million barrels (versus forecasts calling for 0.900-million-barrel drawdown and even relative to the prior week’s 3.400- million-barrel draw).

In Fed news, on Wednesday, Atlanta Fed President Bostic warned against holding rates too high for too long.  Bostic posted an essay on the Atlanta Fed website saying, “We must not maintain a restrictive policy stance for too long.”  He continued, saying that waiting on inflation to reach the 2% goal (before cutting) “would risk labor market disruptions that could inflict unnecessary pain and suffering.”  Bostic concluded by saying, “I do not sense a looming crash or panic among business contacts. However, the data and our grassroots feedback describe an economy and labor market losing momentum.”  Later, the Fed Beige Book showed that the economy expanded more slowly from the middle of July through August 26.  It stated, “Economic activity grew slightly in three districts, while the number of districts that reported flat or declining activity rose from five in the prior period to nine in the current period.”  The report continued, “Employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook.”  Again, the report supports the idea of a rate cut in September.

After the close, HPE reported beats on both the revenue and earnings lines. At the same time, CASY missed on revenue while beating on earnings.  However, CPRT missed on both the top and bottom lines.

In stock news, on Wednesday, the Nordstrom family made an offer to take JWN private for $23 per share in cash.  (This offer was practically no premium compared to the Tuesday close, and JWN stock ended the day down 0.18%.)  At the same time, VLVLY (Volvo) announced plans to update its hybrid line as the company shifted away from its previously-stated “pure electric by 2030” strategy.  Later, X warned of thousands of job cuts if its acquisition by Nippon Steel is blocked. This came after reports the (President Biden is prepared to block the deal and with both Presidential candidates also vowing to block it.)  At the same time, NSC announced it had reached a tentative agreement with another union, this time the one representing conductors.  (This brings the total tentative union agreements in place to cover 65% of the NSC workforce.)  

Elsewhere, later, a GM joint venture (with Korean LG Energy) agreed to recognize the UAW union at its battery plant in TN.  At the same time, the founder of LOGI lost a proxy battle in which he had tried to oust current board chairman Becker.  (Becker was re-elected with 86% of the shareholder votes.)  Later, the Wall Street Journal reported that VZ is in “advanced talks” to acquire FYBR.  (FYBR closed up almost 38% on the report.)  At the same time, LYFT announced it will stop offering standalone dockless bikes and scooters and eliminate one percent of it jobs as part of a restructuring. Later, BX announced it will buy Aussie data center company AirTrunk for $16.10 billion.

In stock legal and governmental news, on Wednesday, tow of the Consumer Products Safety Commission Commissioners called for the agency to investigate two Chinese e-tailers (Temo, owned by PDD, and Shein) after products the agency has labeled “deadly baby and toddle products” were sold from the site to US customers. At the same time, the NHTSA announced it has closed an investigation into 1.3 million GM vehicles over seatbelt issues.  Later, EU antitrust regulators announced they are seeking comment on GOOGL’s proposed resolution to comply with EU fair competition rules. (The GOOGL proposal is to create a separate “product box” for competitors to be located below the GOOGL “featured products” box on its various pages.  The idea is expected to face stiff opposition from competitors.) 

Elsewhere, at the same time, a DE judge ruled JNJ owes Auris Health shareholders $1 billion in damages for breaching a 2019 agreement to acquire the private robotics developer.  Later, Reuters reported that JNJ plans to add another $1.1 billion to its settlement proposal over talc damage claims. (The previously announced settlement was $8 billion over 25 years.)  After the close, Reuters reported that ASML CEO Fouquet is pushing back against restrictions.  He told the news outlet that the US-led campaign (which the Dutch government supports) to restrict technology exports to China is “economically motivated” and that making a case for the sanctions based on national security “is getting harder and harder.” Later, HOOD agreed to pay $3.9 million to settle allegations brought by the CA Attorney General for failing to allow customers to withdraw cryptocurrency from their accounts from 2018 to 2022.

In miscellaneous news, C reported the results of its survey of 500 brokers and other firms that are involved in trade settlement.  The survey found that the shift to “T+1 settlement” had a bigger impact than expected for 44% of firms on both the buy and sell side.  Both sides also cited “stock lending” (shorting) as the most impacted and challenging.  52% reported they needed to add staff, which interestingly showed they had a preference for adding headcount rather than using automation and indicated a risk (according to C) because hiring was not scalable in short timeframes.  Meanwhile, the job openings data on Wednesday caused a shift in the Fedwatch September rate cut outlook.  On Tuesday 38% of Fed Fund Futures contracts predicted a half point cut while 62% were betting on a quarter point cut. (Zero current contracts expect no cut or a raise.)  However, as of Wednesday’s close that had shifted to 45% expecting a 50-basis point cut on the 18^th while 55% expect only the quarter-point reduction.

Overnight, Asian markets were mixed but leaned toward the green with seven of the 12 exchanges in the region posting gains.  Thailand (+2.94%) was by far the biggest gainer while Japan (-1.05%) was by far the big loser.  In Europe, we also see a mixed picture taking place at midday with six of the 14 exchanges above water.  The CAC (-0.28%), DAX (+0.30%), and FTSE (-0.10%) leading the region in early afternoon trade.  In the US, as of 7:45 a.m., Futures are pointing toward a mixed and flat start.  The DIA implies a +0.08% open, the SPY is implying a +0.03% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-Year bond yields are at 3.77% and Oil (WTI) is up 0.33% to $69.42 per barrel in early trading.

The major economic news scheduled for Thursday include August ADM Nonfarm Employment Change (8:15 a.m.), Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q2 Nonfarm Productivity, and Q2 Unit Labor Costs (all at 8:30 a.m.), August S&P Global Composite PMI and August Global Services PMI (both at 9:45 a.m.), August ISM Non-Mfg. Employment, August ISM Non-Mfg. PMI, and August ISM Non-Mfg. Prices (all at 10 a.m.), Weekly EIA Crude Oil Inventories (11 a.m.), and Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open include GIII, KFY, NIO, SAIC, and TTC.  Then, after the close, AVGO and DOCU report.

In economic news later this week, 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 Friday, we hear from ABM, BIG, DOOO, and GCO.

So far this morning, KFY, NIO, and SAIC reported beats on both the revenue and earnings lines.  Meanwhile, GIII missed on revenue while beating on earnings.

With that background, it looks as if markets are undecided. All three major index ETFs gapped modestly higher to start the premarket. However, all three have also printed small black-body candles since then to get back to either side of flat in the early session. DIA retested its T-line, but all three remains below their 8ema. So, the short-term trend is bearish. At the same time, the mid-term trend is still bullish (although it is being pressed hard in the QQQ) and in the long-term, remains in a Bull trend with DIA and SPY still close to all-time highs. In terms of extension, QQQ remains 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 middle of its mid-range. So, the market is not “too extended” but 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, seven of the 10 are in the red this morning. However, TSLA (+3.03%) is by far the biggest mover both in terms of price and not far from leading in volume. (TSLA has traded nearly the same amount as that biggest dog NVDA (-0.10%) and both are about 10 times as much dollar volume traded as the next most traded ticker 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.

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

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

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

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

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

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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.

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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

The Bears were in control Tuesday as a traditionally weak September kicked off.  SPY gapped down 0.54%, DIA gapped down 0.50%, and QQQ gapped down 0.65%.  After that open, DIA sold off sharply for 45 minutes, SPY did the same for 80 minutes, and QQQ sold off sharply until 11 a.m.  From there, all three ground mostly sideways until 1:30 p.m. when the next leg down started and ran until the last 5 minutes.  This action gave us large, black candles with lower wicks.  All three major index ETFs crossed below their T-line (8ema), with SPY and QQQ also crossing below their 17ema while DIA bounced up off its own 17ema.  This all happened on average volume in the SPY, QQQ, and DIA. 

On the day, eight of the 10 sectors were in the red with Technology (-3.92%) and Basic Materials (-3.67%) down hard and leading the way lower. Meanwhile, Communications Services (+0.66%) and Consumer Defensive (+0.30%) holding up better than others and being the only green sectors. At the same time, SPY dropped 2.06%, DIA dropped 1.43%, and QQQ dropped 3.04%.  The VXX spiked more than 20% to close at 53.54% and T2122 dropped out of its overbought territory and into the mid-range at 59.06. 10-Year bond yields fell to close at 3.833% while Oil (WTI) plummeted 4.28% to close at $70.40 per barrel.  So, Monday was “all Bears, all the time” as the post-holiday blues started in tech and spread everywhere.  NVDA (-9.53%) gapped down almost three percent but was down 4.67% by 9:35 a.m.  That one ticker also traded more than three times as much dollar-volume than the next biggest ticker (TSLA, -1.64%).  This meant technology created a tide the rest of the market could not swim against.

The major economic news scheduled for Tuesday includes August S&P Global US Mfg. PMI came in a tick lower than expected at 47.9 (compared to a 48.0 forecast and 49.6 July reading).  Later, July Construction Spending remained the same, but that was not as good as anticipated at -0.3% (versus a forecast of +0.1% and June’s -0.3% value).  At the same time, August ISM Mfg. Employment was up to 46.0 (compared to July’s 43.4 number).  Meanwhile, the headline August ISM Mfg. PMI was up but still a few ticks below predictions at 47.2 (versus a 47.5 forecast but also above July’s 46.8 value).  Finally, August ISM Mfg. PMI Prices were up to 54.0 (versus a 52.1 forecast and a July reading of 52.9).

In Fed news, the San Francisco Fed released a report Tuesday that said it expects housing inflation to fall over the next year based on a study of supply and demand.  The paper indicated that this will likely add to downward pressure on overall inflation.  The report stated, “In recent months housing inflation has come down, but it remains well-above pre-pandemic levels and continues to account for a large share of overall inflation.”  The study found that by year’s end shelter inflation may drop to as low as 2%, before reverting next year to its 3.3% pre-pandemic average.  This led the report to conclude, “This will contribute downward pressure to inflation overall, although the extent and speed of this adjustment in shelter inflation is highly uncertain.”

After the close, ZS reported beats on both the revenue and earnings lines.

In stock news, on Tuesday, CPCAY (Cathay Pacific Airways) announced it has conducted an inspection of its entire EADSY (Airbus) A350 fleet after an in-flight failure of an engine part.  The inspection found 15 jets where the part needed to be replaced.  Later, STZ announced it will write down the value of its wine and spirits unit and take up to a $2.5 billion charge in the current quarter due to several weak quarters of US demand.  It also trimmed its revenue growth forecast from 6%-7% down to 4%-6%.  (STZ reports the current quarter results on 10/3.)  At the same time, CG announced it is picking banks to underwrite its $4.7 billion IPO of its Acrotec Zurich unit.  Later, Reuters reported that multiple analysts tell it INTC is likely to be dropped from the DIA after the chipmaker stock has fallen 60% this year.  (This would trigger further sales as funds that own all DIA components would be forced to sell their INTC positions.)  No timeline was given.  However, the underlying DJIA does rebalance weights at the end of each quarter.  So, September 30 would seem a logical candidate date. 

Elsewhere, at the same time, the Unite Here union announced its strike at MAR, HLT, and H hotels in Seattle and Baltimore has concluded after three days.  However, the strike at hotels from the same chains in seven other cities will continue.  In other union news, the CWA union (Communications Workers of America) withdrew from mediation with T, saying the process was just a delaying tactic by the company.  17,000 of T’s workers have been on strike for more than two weeks.  After the close, CRM announced it had agreed to acquire Tenyx (an AI-powered voice agent technology startup) for an undisclosed sum.  Also after the close, Reuters reported the US gasoline futures fell 6% Tuesday (the biggest one-day loss since July 2022) to their lowest level since December 2021.

In stock legal and governmental news, on Tuesday, Reuters reported that the US (Medicare) will still pay at least twice as much for the prescription drugs where it has negotiated prices for the first time compared to what other high-income countries pay.  The lower prices will save the US $6 billion in 2026 but are still far higher than many countries with national health systems pay.  At the same time, NFE announced it has received US Dept. of Energy authorization to export liquified Natural Gas to “Non-FTA” countries (i.e. countries that do not have a free trade agreement with the US).  NFE said it is expecting incremental revenue growth from its sales to Latin America, Brazil, and Jamaica for example.  Later, ABNB asked New York City to reconsider regulations for short-term rentals that went into effect a year ago.  The company said the rules had caused it major issues (an 83% decline in ABNB rental postings for stays of less than 30 days in NYC) while having virtually no impact on the apartment vacancy rate (at least according to the data ABNB cited).  After the close, the SEC announced that six credit rating agencies have agreed to pay $49 million in civil penalties over failures in recordkeeping and reporting. This includes the three major agencies MCO, SPGI, and Fitch.

In mortgage news, this morning the Mortgage Bankes Assn. released its weekly look at the mortgage market. This week, they report mortgage refinance demand is up 94% as compared to one year ago as interest rates (modestly) continued to fall.  (However, this was down three-tenths of a percent from the week before.)  The national average 30-year, fixed-rate, conforming loan mortgage was a 6.43% last week, down one tick from the week before.  New home purchase loan mortgage applications were also up 3% for the week, but that was still 4% lower than one year prior.  Overall, this led to a 1.6% increase in mortgage applications from the previous week.

Overnight, NVDA (as well as other companies) was subpoenaed by the US Justice Dept.  This is part of a DOJ investigation into NVDA violating antitrust laws by making it harder for companies to switch suppliers of AI-accelerator processing units.  The investigation also is looking into NVDA sales practices that financially penalize buyers that don’t exclusively use NVDA chips.  (NVDA is far and away to market leader in this space with AMD the only competitor of significance although INTC has just recently announced a chip to compete in that space.)  Previously, DOJ had sent questionnaires to many companies in the AI space, but these are legally-binding information requests.

Also overnight, Asian markets were heavily in the red with only two of the 12 regional exchanges hanging onto green territory.  Taiwan (-4.52%), Japan (-4.24%), and South Korea (-3.15%) all suffered badly on the big chip losses in reaction to the US Tuesday leading the region lower.  In Europe, we also see a red picture with just two of the 14 bourses in the green at midday. The CAC (-0.89%), DAX (-0.77%), and FTSE (-0.57%) are leading the region down in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward some follow-through on Tuesday’s losses.  The DIA implies a -0.19% open, the SPY is implying a -0.45% open, and the QQQ implies a -0.81% open at this hour.  At the same time, 10-Year Bond yields are down to 3.81% and Oil (ETI) has popped back 1.09% to $71.14 per barrel in early trading.

The major economic news scheduled for Wednesday includes July Exports, July Imports, and July Trade Balance (all at 8:30 a.m.), July Factory Orders and July JOLTs Job Openings (both at 10 a.m.), Fed Beige Books (2 p.m.), and API Weekly Crude Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include, CIEN, CNM, DKS, DLTR, HRL, and REVG.  Then, after the close, CASY, CPRT, and HPE report.

In economic news later this week, on 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 Thursday, GIII, KFY, NIO, SAIC, TTC, AVGO, and DOCU report.  Finally, on Friday, we hear from ABM, BIG, DOOO, and GCO.

So far this morning, CIEN and DKS reported beats on both the revenue and earnings lines.  Meanwhile, HRL and REVG missed on revenue while beating on earnings.  However, DLTR missed on both the top and bottom lines.

With that background, it looks as if the Bears continue to have control in the premarket. All three major index ETFs gapped down to start the early session. However, since that point SPY and QQQ have printed very indecisive (wick heavy) premarket candles while DIA is more decisive, but still a small candle. All three are now well below their T-line (8ema). So, the short-term trend is bearish. At the same time, the mid-term trend is still bullish (although it is being pressed hard in the QQQ) and in the long-term, remains in a Bull trend with DIA and SPY still close to all-time highs. In terms of extension, QQQ is 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 middle of its mid-range. So, the market is not “too extended” but 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, nine of the 10 are in the red this morning with only AMD (+1.76%) in the green. However, the the biggest dog NVDA (-1.59%) is out front leading the way lower on heavy volume (6.5 times the volume of the second heaviest dollar-volume so far today). Part of this is the news that yesterday’s drubbing took $300 billion off NVDA’s market cap and the weak hands are still abandoning ship.

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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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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 6^th 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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets 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.

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

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

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

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

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

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