Traders enter a new week with more election uncertainty as Biden is pushed out and Harris gets the nod with just four months to make her case. Although markets hate uncertainty S&P 500 futures saw a modest increase of 0.5%, following a challenging week where the index experienced its steepest losses since April. The shift came as investors moved away from Mega-cap technology stocks, opting instead for smaller-cap names. Meanwhile, futures for the Dow Jones Industrial Average and Nasdaq-100 also showed gains, rising by 0.2% and 0.7%, respectively. This movement indicates a cautious optimism among investors, despite recent market volatility.
On Monday, European stocks experienced an upward trend, with the pan-European Stoxx 600 index rising by 1.06% as of 11:29 a.m. London time. This positive movement was broad-based, with most sectors showing gains. However, the travel and leisure sectors were an exception, declining by 1.73%, making it the only sector in negative territory. This divergence highlights the varying performance across different industries within the European market.
Asia-Pacific markets experienced a downturn, influenced by unexpected monetary policy changes from China’s central bank. The People’s Bank of China reduced the short-term 7-day reverse repurchase rate from 1.8% to 1.7%. Additionally, the one-year and five-year loan prime rates were both lowered by 10 basis points, now standing at 3.35% and 3.85%, respectively. These rate cuts, aimed at stimulating economic activity, reflect ongoing concerns about China’s economic growth, which in turn impacted market sentiment across the region.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include BOH, IQV, TFC, & VZ. After the bell include AGYS, AGNC, ARE, BOKF, BRO, CADE, CDNS, CALX, CATY, CLF, CCK, ELS, HSTM, MEDP, NUE, NXPI, RLI, SSD, WRB, & ZION.
News & Technicals’
On Sunday, the Atlanta-based airline faced significant operational challenges, canceling over 600 mainline flights, which accounted for approximately 17% of its schedule. This disruption was more extensive than any other U.S. airline. While most other carriers have managed to recover from similar issues, Delta continues to experience persistent disruptions, highlighting ongoing challenges within its operations.
On Monday, Ryanair shares plummeted by 12.2% as of 8:57 a.m. London time, following the company’s announcement of a 46% drop in quarterly profit after tax for the three months ending in June. The budget airline also projected lower-than-expected fares in the upcoming months, contributing to the negative market reaction. This downturn in Ryanair’s shares had a ripple effect on other European airlines, with EasyJet losing over 6%, Jet2 falling by 4%, and Hungarian airline Wizz Air sliding by more than 6%. The widespread decline underscores the broader concerns within the airline industry.
Bank of Japan officials are facing a challenging decision regarding potential interest rate hikes at their upcoming policy meeting, due to observed weaknesses in consumer spending. According to sources familiar with the matter, some officials believe that raising rates could send an overly hawkish signal, which they are keen to avoid. This internal debate highlights the delicate balance the BOJ must strike between supporting economic growth and managing inflation expectations.
In a seven-day period we had an attempted presidential candidate assassination attempt and the sitting president bow out of the run highlighting the extreme election uncertainty we face this November. Toss in the earnings season and we have the makings for very turbulent price action. GOOG will kick of the big tech reports on Tuesday with a looking GDP Thursday followed by the CORE PCE numbers Friday. Fasten your seatbelt it may prove to be a bumpy ride.
Markets gave us divergent gaps to start the day. However, by mid-morning the three major index ETFs had gotten their direction synchronized again. SPY gapped up 0.29%, DIA gapped down 0.26%, and QQQ gapped up 0.77%. However, after the gap up and bobbing around for 45 minutes, SPY sold off sharply until 12:30, bounced for an hour, and then started another leg lower. It ended the day on a modest bounce. At the same time, after its open, DIA followed-through to the upside for an hour. Then, it too also sold off sharply until 12:30, ground sideways for 75 minutes, and then started its own second leg lower, ending the day on a small 30-minute bounce. Meanwhile, after the large gap higher, QQQ immediately sold off sharply until noon, bounced significantly for 75 minutes, and then started another leg back toward the noon lows. Still, QQQ bounced more sharply than its peer EFTs over the final 40-minutes. This action gave us large-body, black candles in all three major index ETFs. SPY had wicks at both ends, failing a retest of the T-line (8ema) from below. QQQ had a wick only at the lower end and it was a larger wick than the other two had. However, DIA printed a new all-time high, leaving a large upper wick but did not even approach its own T-line from above.
On the day, all 10 sectors were in the red with Healthcare (-2.22%) way out front (by almost 0.75%) leading the market lower. On the other side, Energy (-0.06%) held up much better than the other sectors. At the same time, SPY fell 0.77%, DIA fell 1.26%, and QQQ fell 0.47%. VXX gained another 2.88% to close above 11 at a still very low at 11.06. T2122 dropped out of its overbought territory, all the way down to the center of its mid-range at 46.34. On the bond front, 10-year bond yields popped to 4.197% and Oil (WTI) fell 0.78% to close at $82.20 per barrel. This happened on heavy volume in DIA, above-average volume in QQQ, and average volume in the SPY. So, again on Thursday we saw a head fake move higher at the open. However, the Bears were in command all day after the open.
The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 243k (compared to a forecast of 229k and the prior week’s 223k). On the ongoing side, Weekly Continuing Jobless Claims were also up and above predictions at 1,867k (versus the 1,860k forecast and the prior week’s 1,847k reading). At the same time, the Philly Fed Mfg. Index was up to 15.2 (compared to the June -2.5 value). Later, the June US Leading Economic Indicators Index was up and a tick better than anticipate at -0.2% (compared to a -0.3% forecast and May’s -0.4%). Then, after the close, the Fed’s Weekly Balance Sheet showed a $16 billion reduction, from $7.224 trillion to $7.208 trillion.
In economic speak news, on Thursday, Dallas Fed President Logan lauded progress made by the Fed in making sure that banks can tap Fed emergency liquidity if needed. Logan said, “(The Fed Discount Window) has been effective in supporting the stability of the banking and financial systems and, in turn, the flow of credit to households and businesses.” She continued, “A critical element of ensuring the safety of the banking system is making sure banks are prepared to use the discount window if circumstances call for it.” Logan said more than 5,000 deposit-taking banks have completed the paperwork to be able to access the Discount Window in a crisis. In addition, those banks have increased the pool of collateral available to back loans through the window from $1 trillion in 2023 to $3 trillion now.
After the close, DIT, ISRG, NFLX, and WAL all reported beats on both the revenue and earnings lines. Meanwhile, AIR and PPG reported misses on revenue while beating on earnings. However, SCHL missed on both the top and bottom lines.
In stock news, on Thursday, the Financial Times reported that WBD is discussing the potential to break up the company to boost stock valuations. At the same time, F laid out plans to rework a Canadian plant that had been intended to build a future electric vehicle (starting in 2025) to instead build larger, gasoline-powered F-series pickup trucks. Later, the Financial Times reported that META is in talks to purchase a 5% stake in eyewear maker ESLOF (EssilorLuxottica, which makes Ray-Ban). At the same time, Adobe Analytics said that AMZN Prime Day boosted US online retail shopping to a record $14.2 billion. This was up 11% from the event in 2023. Later, Bloomberg reported that AAPL is in talks to license more Hollywood films, in order to boost its streaming content portfolio. Elsewhere, NFLX announced it is discontinuing its cheapest “$11.99 Basic Plan” (the lowest ad-free plan). NFLX had stopped taking new Basic Plan subscriptions in January.
Meanwhile, SPWR plummeted 40% after it informed clients that it was pausing some operations. The cessations include ending some leases and power purchase agreements as well as halting new product shipping. Elsewhere, SMAR share spiked (but ended only 5.45% higher) after Reuters reported the company is considering buyout offers from private equity firms. After the close, Reuters reported that OpenAI has begun talks with AVGO over the development of a new AI chip, in an effort to overcome shortages of AI chips from NVDA and AMD. (Earlier this year, OpenAI CEO Altman made news when he announced plans to raise billions to be used to set up AI chip manufacturing plants in partnership with TSM, INTC, and Korean Samsung.)
In stock legal and governmental news, on Thursday, the NHTSA announces that HYMTF (Hyundai) will recall 67k vehicles over fuel pump issues that can cause a loss of power during operation. Later, C announced it had reached a settlement with a Montreal exchange to resolve claims the bank had failed to report options trades over the exchange’s reporting threshold. The amount of the settlement was about $150k. At the same time, the highest court in Trinidad and Tobago reaffirmed a decision that recognizes COP’s $1.33 billion arbitration claim against the country of Venezuela. The decision will enable COP to begin legal action to seize Venezuelan assets in that country to satisfy the claim. Later, the NHTSA announced that STLA will recall 24k Chrysler hybrid minivans over fire risk.
Overnight, Asian markets were mostly down with only three of the 12 exchanges hanging onto green territory. Taiwan (-2.26%) and Hong Kong (-2.03%) were the worst performers (by a percent), but losses were widespread. In Europe, we see a similar picture taking shape as only three of 15 bourses are in the green at midday. Russia (+1.39%) is a notable outlier. However, the CAC (-0.56%), DAX (-0.70%), and FTSE (-0.54%) lead the region lower in early afternoon trade. In the US, as of 7:15 a.m., Futures are pointing toward a modestly lower start to the day. The DIA implies a -0.16% open, the SPY is implying a -0.06% open, and the QQQ implies a -0.15% open at this hour. At the same time, 10-Year bond yields are rising again to 4.203% and Oil WTI) is off 0.39% to $82.50 per barrel in early trading.
There is no major economic news scheduled for Friday. However, Fed members Williams (10:40 a.m.) and Bostic (12:45 p.m.) speak. The major earnings reports before the open include AXP, ALV, CMA, EEFT, FITB, HAL, HBAN, RF, SDVKY, SLB, TRV, and WIT. There are no major reports scheduled for after the close.
So far this morning, CMA, FITB, HBAN, RF, and SLB all reported beats on both the revenue and earnings lines. (Apparently, the hand-wringing over regional banks and loans is misplaced so far.) Meanwhile, AXP, EEFT, HAL, SDVKY, and TRV all missed on revenue while beating on earnings. However, ALV missed on both the top and bottom lines.
In miscellaneous news, after the close Thursday, a federal appeals court blocked the Biden Administration from continuing to implement a new student debt relief plan at the request of seven GOP-led states. (The Dept. of Education said it had already granted $5.5 billion in debt relief to 414k borrowers under that “SAVE” plan.) At the same time, the IMF said the US should raise taxes to reduce the US federal debt and put off any rate cut until at least late 2024. Meanwhile, mortgage finance agency Freddie Mac told Reuters Thursday that the US 30-year fixed-rate mortgages fell to the lowest rate since mid-March, with the national average down to 6.77% from the prior week’s 6.89%. Finally, Reuters reported that the state of CA reported that TSLA car registrations fell in Q2. TSLA’s 52,211 new registrations for Q2 was down and a third consecutive quarter of falling new registrations.
In overnight news, computer systems around the world failed Friday. This took firms from banking, to stock exchanges, to airlines offline. So far, there seem to be two unrelated causes. The first was a MSFT Windows crashing due to a conflict between that system and CRWD’s security software. Separately, MSFT reported outages of its Azure and Office 365 cloud systems. Combined, this caused an unprecedented and widespread computer outage globally. The exact causes are unknown, but it is likely to be related to a software update, possibly by MSFT since it had two separate set of issues.
With that background, it looks as if the markets are indecisive again this morning. SPY and QQQ gapped higher while DIA gapped a bit lower to start the premarket. All three major index ETFs have put in mostly wick since that point as the Bulls and Bears remain uncertain who has the strength in the early session. Overall, the short-term trend is Bearish. The rotation out of tech and into small-caps and the traditional mega-cap names also took a break (or stopped) on Thursday. However, for the mid-term and longer-term, there is no way to look at markets except to say they remain very bullish. In terms of extension, none of the three major index ETFs are stretched away from their T-line (8ema). Meanwhile, the T2122 indicator is back down into the center of its mid-range. Therefore, the market has room to run in either direction if the Bulls or Bears can find momentum. With regard to those 10 big dog tickers, eight of the 10 are in the green this morning. AAPL (+0.83%) and GOOGL (+0.74%) lead the way. Obviously, due to the overnight issues, MSFT (-1.38%) lags far behind and leads the morning dollar-volume traded. Lastly, don’t forget that it is Friday, Pay Day, and there is a weekend news cycle ahead. So, prepare your account for that situation.
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
Wednesday saw divergence in the market again. SPY gapped down 1.05%, QQQ gapped down 1.63%, and DIA gapped up 0.24%. Those opens were an indication of the day ahead for all three major index ETFs. DIA spent the day slowly and steadily rallying after the gap up. Meanwhile, QQQ and SPY followed their gaps down with bearish follow-through. However, all three did bob along their extremes the last couple hours (DIA along the highs and SPY/QQQ along the lows). This action gave us a large body white candle with a small upper wick in the DIA, a gap-down black-bodied Inverted Hammer type candle that crossed below its T-line (8ema) in the SPY, and a very large gap-down, very-large, black-bodied candle that crossed far below its T-line in the QQQ. (This was the QQQ’s worst day since 2022, hit by a double whammy of isolationist comments from Trump and a Bloomberg report that the Biden Administration may again tighten export restrictions on tech products being sold to China.)
On the day, six of the 10 sectors were in the red with Technology (-3.48%) way, way out front (by almost 2%) leading the market lower. On the other side, the Consumer Defensive (+1.14%) sector held up better than the others. At the same time, SPY fell 1.40%, DIA gained a 0.55%, and QQQ plummeted 2.94%. VXX gained 3.27% to close at a still extremely low at 10.75. T2122 fell again but remains in the top half of its overbought territory at 91.48. On the bond front, 10-year bond yields dropped again to 4.157% and Oil (WTI) spiked 2.67% to close at $82.92 per barrel. This happened on very heavy volume in QQQ, greater-than-average volume in DIA, and below-average volume in SPY. So, again Wednesday we saw a divergent day. DIA powered its way higher, meanwhile Trump’s comments helped crush the big tech stocks that tend to lead the SPY and QQQ.
The major economic news scheduled for Wednesday included June Building Permits, which were about as expected at 1.446 million (compared to a 1.400 million forecast and the May 1.399 million reading). At the same time, the June Housing Starts were stronger than expected at 1.353 million (versus the 1.300 million forecast and the May 1.314 million reading). Later, June Industrial Production (Month-on-Month) was down but higher than predicted at +0.6% (compared to a +0.3% forecast but lower than the May +0.9%). On an annual basis, June Industrial Production was up sharply at +1.58% versus May’s +0.34%. Later, EIA Crude Oil Inventories showed a much larger drawdown than anticipated at -4.870 million barrels (compared to a forecasted -0.900 million barrels and the previous week’s -3.443 million barrels).
In economic speak news, on Wednesday Fed Governor Waller indicated that a rate cut “is drawing closer.” However, he also indicates that likely means September or later by saying, “I believe current data are consistent with achieving a ‘soft landing,’ and I will be looking for data over the next couple months to buttress this view.” Waller went on, “While I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted.” He continued, saying that under the most optimistic scenario, “I could envision a rate cut in the not-too-distant future.”
After the close, AA, OZK, CCI, DFS, EFX, STLD, and SNV all reported beats on both the revenue and earnings lines. Meanwhile, KMI, LBRT, and UAL missed on revenue while beating on earnings. On the other side, FNB and WTFC beat on the revenue line but missed on earnings.
In stock news, on Wednesday, Information (Technology trade publication) reported that both GOOGL and MSFT are offering Chinese companies access to NVDA’s high-end chips (illegal to export to China due to sanctions) via cloud services. At the same time, LLY (-3.82%) and NVO (-03.87%) stocks fell after private Swiss competitor Roche announced positive Phase 1 study results of its oral GLP-1 drug. Later, DFS said it will sell its student loan portfolio to CG and KKR for up to $10.8 billion. (This is a premium over the $10.1 billion principal owed on the loans but far below expected total payback if the loans are repaid with interest. Meanwhile, the Wall Street Journal reported that BYND has initiated debt restructuring discussions with bondholders due to declining liquidity that has resulted from revenue declines. After the close, DRI announced it has struck a deal to acquire CHUY for $605 million ($37.50 per share). (CHUY closed at $25.27 per share.)
In stock legal and governmental news, on Wednesday, COF announced it will commit $265 billion over 5 years to “lending, philanthropy and investment” (read 99.9% to lending operations and investment). This was done in an attempt to gain approval of its acquisition of DFS and included a promise to maintain lending operations to low- and-moderate-income communities. Later, the NHTSA announced BMWYY will recall 1,145 US vehicles over air bag concerns. At the same time, EU antitrust regulators are soliciting rivals’ opinions on a deal between GOOGL and Korean-based Samsung on AI chatbots. Later, the NTSB announce it has scheduled 20 hours of hearings related to the BA 737 MAX 9 in-flight door plug blowout on an ALK flight in January. Hearings will take place August 6-7, with 10 hours each day.
Overnight, Asian markets were mixed but leaned slightly to the green on breadth but with the biggest movers still reeling from Trump’s comments. Japan (-2.36%) and Tiawan (-1.56%) remain scared of being left to the wolf (China) by a transactional and isolationist MAGA administration. Meanwhile, India (+0.76%) was by far the biggest gainer in the region. In Europe, the bourses are mostly in the green with only three of 15 exchanges showing red at midday. The CAC (+0.48%), DAX (+0.19%), and FTSE (+0.58%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed start to the session. The DIA implies a -0.16% open, the SPY is implying a +0.10% open, and the QQQ implies a +0.35% open at this hour. At the same time, 10-Year bond yields are back up to 4.186% and Oil (WTI) is just on the red side of flat at $82.78 per barrel in early trading.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 a.m.), June US Leading Economic Indicators Index (10 a.m.), and the Fed’s Balance Sheet (4:30 p.m.). We also hear from Fed member Daly (6:05 p.m.) and Fed Governor Bowman (7:45 p.m.). The major earnings reports before the open include ABT, ALK, BX, CTAS, CHI, DPZ, HXL, INFY, KEY, MTB, MAN, MMC, NOK, NVS, SNA, TSM, and TXT. Then, after the close, AIR, ISRG, NFLX, PPG, and SCHL report.
In economic news later this week, on Friday, Fed members Williams and Bostic speak.
In terms of earnings reports later this week, Friday, AXP, ALV, CMA, EEFT, FITB, HAL, HBAN, RF, SDVKY, SLB, TRV, and WIT report.
So far this morning, ABT, BKU, CBSH, CHI, HXL, INFY, KEY, MTB, MAN, NVS, TSM, TELNY, TLSNY, and VIRT all reported beats on both the revenue and earnings lines. Meanwhile, DPZ, MMC, NOK, and TXT missed on revenue while beating on earnings. On the other side, BX and TCBI beat on revenue while missing on earnings. However, SNA missed on both the top and bottom line.
In miscellaneous news, Bloomberg reported Wednesday that US is suffering from a massive natural gas glut. Projections now expect that by October, inventories are expected to reach the highest level since at least 2016. This is the reason cited for the collapse of the October-January Futures spread. Elsewhere, President Biden was diagnosed with COVID-19. Later, the US Dept. of Education announced adjustments to a prior plan which will forgive another $1.2 billion in student debt (covering 35k public service workers). Finally, at the RNC Convention, the newly appointed VP candidate Vance blamed US wage losses on China. Felon Navarro also went directly from prison to the stage. Rather than his previous anti-China talking points, this time (probably understandably) he continued his GOP victimhood agenda, lying about the 2020 election, his plan to steal it, the January 6 attack on the capital, and his conviction for defying a Congressional subpoena.
With that background, it looks as if the markets are indecisive this morning with none of the three major index ETFs showing a premarket candles that is more body than wick. Overall, the short-term trend is mixed (QQQ and SPY down while DIA is up). We are seeing continued rotation out of tech and into small-caps and the traditional mega-cap names. However, for the mid-term and longer-term, there is no way to look at markets except to say they are extremely bullish. In terms of extension, only DIA is stretched (to the upside). Meanwhile, the T2122 indicator remains well overbought. Therefore, the market may still be in need of more rest or a pullback. (Just remember, the market can stay over-extended longer than we can stay solvent predicting a turn too early.) With regard to those 10 big dog tickers, all 10 are in the green this morning. NVDA (+2.17%) and AMD (+1.88%) trying to mount a comeback by the AI chip leaders.
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
The rotation trade persisted on Wednesday, leading to a significant decline in the tech-heavy Nasdaq, which tumbled 2.8% in its worst day since December 2022. Despite this, stock futures remained relatively unchanged on Thursday following the Nasdaq Composite’s sharp drop, as investors continued to move away from high-flying big tech stocks. In contrast, the blue-chip Dow, which has less exposure to the tech sector compared to the other major indexes, managed to outperform.
European markets saw an uptick on Thursday as investors anticipated the European Central Bank’s interest rate decision, with widespread expectations that rates would remain unchanged. The automotive sector led the gains, rising by 1.66%, followed by media stocks, which increased by 0.98%. Despite opening higher, tech stocks continued their downward trend for the week, ending the day down by 0.32%.
On Thursday, most Asia-Pacific markets experienced declines, primarily driven by a drop in chip-related stocks following reports of stricter export restrictions from the U.S. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip maker, saw its shares fall by over 2.43%, which contributed to the Taiwan Weighted Index closing 1.56% lower. In contrast, Japan’s trade balance showed a significant improvement, reversing from a 1.2 trillion-yen deficit in May (approximately $7.7 billion) to a 224-billion-yen surplus.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include, ABT, AHLB, CTAS, CBSH, DPZ, HXL, IIIN, KEY, MTB, MAN, MMC, OFG, SNA, TCBI, TXT, VIRT, & WNS. After the bell include NFLX, AAR, GBCI, PPG, RGP & WAL.
News & Technicals’
The Biden administration has announced the cancellation of $1.2 billion in student debt for 35,000 workers. This relief comes because of the U.S. Department of Education’s improvements to the Public Service Loan Forgiveness program. These changes aim to better support public service workers by addressing previous issues within the program, ultimately providing significant financial relief to those who qualify.
On Thursday morning, Houston-based tech company Lancium and Denver-based Crusoe Energy Systems announced a multibillion-dollar deal to construct a 200-megawatt data center just outside Abilene, specifically designed to cater to the unique needs of AI companies. This project marks the first phase of a larger 1.2-gigawatt buildout. According to Lancium President Ali Fenn, once fully operational, this will be one of the largest AI data center campuses globally. This development highlights the accelerating shift towards powering AI and moving away from bitcoin mining.
Shares of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip supplier, dropped by as much as 4.3% during the trading day. Despite this decline, Ayako Yoshioka, a senior portfolio manager at Wealth Enhancement Group, suggested that there are still buying opportunities for long-term investors. This market movement follows a Bloomberg report on Wednesday indicating that the Biden administration may consider imposing restrictions on firms exporting critical chipmaking equipment to China, potentially escalating tensions between the two superpowers.
Bilahari Kausikan, Singapore’s former permanent representative to the United Nations, emphasizes the importance of maintaining a calm, clinical, and agile approach for both countries and companies navigating the current geopolitical landscape. His advice underscores the need for strategic thinking and adaptability in an increasingly complex and dynamic global environment, where swift and calculated responses are crucial for success.
Although the tech sector experienced the worst day of selling since 2022 the rotation trade persisted extending the DIA and IWM into an extreme parabolic pattern. The bullish extension could continue but traders should be prepared to protect profits and watch for whipsaws should the profiting begin.
Markets jumped higher again on Tuesday. SPY gapped up 0.25%, DIA gapped up 0.37%, and QQQ gapped up 0.29% to start the day. From there, was saw divergence. SPY chopped its way sideways until 2:15 p.m. before rallying into the close. At the same time, DIA rallied sharply from the open until 11:15 a.m. Then it meandered sideways until 1:30 p.m. before rallying more modestly but steadily the rest of the day. For its part, after the gap higher, QQQ immediately faded the gap and sold off to reach the lows of the day at 12:30 p.m. The rest of the say saw a modest QQQ rally that got it back just above the prior close by the end of the session. This action gave us a huge, gap-up, white candle in the DIA (with tiny upper wick), a gap-up white-bodied candle in the SPY, and a black-bodied long-legged Spinning Top in the QQQ. DIA and SPY both printed new all-time highs and new all-time high closes. Meanwhile, QQQ retested its T-line (8ema) from above and passed the test again.
On the day, all 10 sectors were in the green with Industrials (+2.72%) leading the market, but the gains were wide-spread with five sectors up more than 1.70%. On the other side, Energy (+0.14%) was by far the laggard sector. At the same time, SPY gained 0.58%, DIA gained a whopping 1.81%, and QQQ gained 0.04%. (It is worth noting that for the fourth consecutive day we have seen a rotation into small-caps with IWM (+3.76%) way out in front of the three major index ETFs. VXX gained 0.97% to close at a still extremely low at 10.41. T2122 spiked to the extreme top end of its overbought territory at 99.20. On the bond front, 10-year bond yields dropped sharply to 4.161% and Oil (WTI) fell 1.31% to close at $80.84 per barrel. This happened on very heavy volume (twice the average volume) in DIA, but less than average volume in SPY and QQQ. So, Tuesday was a divergent day with a modest selloff in most of the tech names that have led markets for ages. NVDA (-1.62%), GOOGL (-1.40%), and META (-1.28%) fell. However, among the DIA names, UNH (+6.47%), CAT (+4.31%), BA (+3.91%), and HD (+2.97%) spiked. (It is worth noting that 19 of the 30 were up more than 1.00%.)
The major economic news scheduled for Tuesday included the June Import Price Index, which was flat and lower than expected at 0.0% (compared to a forecast of +0.2% but higher than the May -0.2% reading). On the other side, the June Export Price Index was also lower than expected at -0.5% (versus a -0.1% forecast but not as far down as in May when the value was -0.7%). At the same time, June Core Retail Sales were much stronger than predicted at +0.9% (compared to a forecasted +0.2% and a May reading of +0.4%). For the headline number, June Retail Sales were flat at 0.0% (versus the forecast of -0.3% and the May value of +0.3%). Later, May Business Inventories grew 0.5% (compared to a +0.4% forecast and April’s +0.3%). At the same time, May Retail Inventories were flat at 0.0% (versus a 0.0% forecast and down from April’s +0.3%). Then, after the close, the API Weekly Crude Oil Stocks report showed a significant drawdown of 4.440 million barrels (compared to the prior week’s -1.923-million-barrel drawdown).
In economic speak news, on Tuesday, Fed Governor Kugler expressed cautious optimism that inflation is falling back to the FOMC’s 2% target. She said, “We’re seeing more progress on all three categories now.” (She was referring to inflation on goods, services, and housing.) Kugler continued, “I’m cautiously optimistic that we’re seeing progress and the type of progress that we need to get back to 2%.” She indicated that the job market is rebalancing, saying, “This continued rebalancing suggests that inflation will continue to move down toward our 2% target.” She also said that if current trends continue, “I anticipate that it will be appropriate to begin easing monetary policy later this year.”
After the close, HWC, IBKR, and OMC all reported beats on both the revenue and earnings lines. Meanwhile, JBHT missed on both the top and bottom lines.
In stock news, on Tuesday, PM announced it would be expanding the production of its nicotine pouches (Zyn), investing $600 million to build a new CO plant to expand their production. Later, Russian tech firm YNDX spun off a portion of its business called Nebius Group, located in Amsterdam, for $5.4 billion. (EU sanctions against the founder of YNDX were lifted in March, allowing the deal to proceed.) At the same time, Bloomberg reported that VZ is in talks over the possibly of selling 5,000-6,000 cell service towers across the US. VZ is reportedly looking for $3 billion. (In 2015, VZ sold 11,000 towers to AMT for $5 billion.) Meanwhile, TCRT announced a 1-for-10 reverse split to take effect July 17 at 5 p.m. At the same time, 28k flight attendants will vote on whether to authorize a strike as their AFA union will begin negotiating a new contract with UAL. After the close, Bloomberg reported that TSLA is hiring hundreds of new employees for its yet to be approved robotaxi program. (Each robotaxi must constantly be monitored by a human supervisor due to deficiencies in the long claimed “full self-driving” system.)
In stock legal and governmental news, on Tuesday, Reuters reported that the FTC has requested details on its deal to hire the top executives and researchers from AI startup Adept. (Similar investigations are also ongoing related to MSFT and GOOGL hiring away the main talent from AI startups.) At the same time, SKX filed suit against private brand LL Bean, alleging the latter infringe on two of SKX’s patents. Later, Reuters reported that the European Commission has told VLKAF (Volkswagen) and BMWYY (BMW) that they may consider lowering the tariffs on those two carmakers’ imports from China of electric vehicles. (The article said the EC is willing to classify the two automakers as “cooperating companies,” which would make them eligible for 20.8% tariffs compared to the general China EV tariff of 37.6%.) Meanwhile, TRP said that an arbitration tribunal has thrown out its claim seeking to recover $15 billion from the US government related to the cancellation of the Keystone XL pipeline. At the same time, a group of restaurants in the Houston area filed a $100 million lawsuit against CNP alleging the utility has displayed incompetence and negligence in efforts to restore power quickly following Hurricane Beryl.
Overnight, Asian markets were evenly mixed. Taiwan (-0.95%) and South Korea (-0.80%) paced the losses while New Zealand (+0.88%) and Australia (+0.73%) led the gainers. In Europe, with the notable exception of Russia (+1.39%) we see red across the board at midday. The CAC (-0.57%), DAX (-0.81%), and FTSE (-0.33%) lead the region lower in early afternoon trade. Meanwhile, in the US, markets are looking to gap lower on Trump’s statements that foreign nations (Taiwan and South Korea…and by implication Europe) should pay for US military facilities and expenditures). The DIA implies a -0.34% open, the SPY is implying a -1.01% open, and the QQQ implies a -1.55% open at this hour. At the same time, 10-Year bond yields are down to 4.172% and Oil (WTI) is up half a percent to $81.15 per barrel in early trading.
The major economic news scheduled for Wednesday includes June Building Permits and June Housing Starts (both at 8:30 a.m.), June Industrial Production (9:15 a.m.), EIA Crude Oil Inventories (10:30 a.m.), and Fed Beige Book (2 p.m.). Fed Governor Waller also speaks at 9:35 a.m. The major earnings reports before the open include ALLY, ASML, CFG, ELV, FHN, JNJ, NTRS, PLD, SYF, and USB. Then, after the close, AA, CCI, DFS, EFX, KMI, LBRT, STLD, SNV, UAL, and WTFC report.
In economic news later this week, on Thursday, we get Weekly, Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, US Leading Economic Indicators Index, Fed’s Balance Sheet. We also hear from Fed member Daly and Fed Governor Bowman. Finally, on Friday, Fed members Williams and Bostic speak.
In terms of earnings reports later this week, Thursday, ABT, ALK, BX, CTAS, CHI, DPZ, HXL, INFY, KEY, MTB, MAN, MMC, NOK, NVS, SNA, TSM, TXT, AIR, ISRG, NFLX, PPG, and SCHL report. Finally, on Friday, AXP, ALV, CMA, EEFT, FITB, HAL, HBAN, RF, SDVKY, SLB, TRV, and WIT report.
So far this morning, ASML, ELV, JNJ, NTRS, SYF, and USB all reported beats on both the revenue and earnings lines. Meanwhile, ALLY and ASAZY missed on revenue while beating on earnings. On the other side, CFG and FHN beat on revenue while missing on earnings. ASML and ALLY posted significant earnings beats. However, ASML lowered forward guidance.
In miscellaneous news, BAC released the results of its survey of fund managers. This time, the survey finds that fund managers are still bullish on stocks. However, growth expectations are the lowest since March of 2022. 27% now expect a softening global economy over the next 12 months (up sharply from just 6% feeling that way in June). Nonetheless, 68% still expect a soft landing in the US, with another 18% expecting no landing at all. Only 11% are expecting a hard landing. In addition, 67% of the surveyed expect no recession in the next 12 months. Meanwhile, Bloomberg reported that Wall Street’s biggest banks have pulled off a clean sweep this quarter, all reporting higher-than-expected gains. They have averaged an 18% increase in revenue during Q2. Finally, after the close, Cox Automotive reported car repossessions were up 23% in the first half of 2024 compared to the first half of 2023.
With that background, it looks as if the market is dropping and will be seeking shelter after the disgraced ex-President’s remarks. QQQ gapped down through its T-line (8ema), SPY gapped lower and is now retesting its T-line from above, but DIA is just giving a modest lower candle in the early session after a massive gain Tuesday. All three major index ETFs have printed a black-body candle since the start of the early session. Overall, the short-term trend remains bullish but perhaps under pressure. We are seeing rotation out of tech and into small-caps and the traditional mega-cap names. However, for the mid-term and longer-term, there is no way to look at markets except to say they are extremely bullish. In terms of extension, only DIA is stretched (to the upside). Meanwhile, the T2122 indicator remains extremely overbought. Therefore, the market may be in need of some rest or a pullback. (Just remember, the market can stay over-extended longer than we can stay solvent predicting a turn too early.) With regard to those 10 big dog tickers, nine of the 10 are in the red this morning. AMD (-4.51%), NVDA (-4.05%) and any other name that depends on Taiwan is down hard on Trump’s isolationist comments. Only INTC (+0.58%) has managed to stay on the green side of flat among those market leaders.
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
DIA futures rose by 36 points, or approximately 0.1%, while S&P 500 and Nasdaq 100 futures also saw gains of 0.1% as the small cap rotation continues. This follows a strong performance on Monday, where the Dow advanced to record levels, and both the S&P 500 and Nasdaq posted gains. However, the rally has quickly become very extended with the T20 indicators suggesting the odds of a little rest or pullback have grown.
By 11:17 a.m. London time, the pan-European Stoxx 600 had declined by 0.39%, with all sectors and major bourses experiencing losses. Mining stocks were the hardest hit, dropping 1.89%, followed by the insurance sector, which fell by 1.12%.
Asia-Pacific markets exhibited mixed performance on Tuesday, influenced by a series of political and economic updates from the United States. Investors are also keenly observing China’s Third Plenum, where discussions are expected to focus on addressing high local government debt and promoting advanced manufacturing.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include BAC, MS, PNC, PGR, STT, & UNH. After the bell include FULT, HWC, IBKR, JBHT, OMC, & PNFP.
News & Technicals’
President Biden expressed regret over his use of the phrase “put Trump in the bulls-eye,” which he mentioned to donors in a private call shortly before an attempted assassination of Donald Trump. Several Republican lawmakers have criticized Democratic campaign rhetoric, including Biden’s comment, for potentially inciting the incident. Biden clarified that he has never intended to incite political violence, emphasizing what he perceives as a stark contrast to Trump’s approach.
Apple has unveiled a preview version of its upcoming iPhone update, iOS 18. This beta version, available ahead of the official fall release, allows Apple enthusiasts and developers to explore and test the latest features. Notably, this year’s most significant new service, Apple Intelligence, is not included in the public beta. Apple has announced that users will have the opportunity to try out Apple Intelligence later this summer, adding to the anticipation surrounding the new update.
Federal Reserve Chair Jerome Powell highlighted that central bank policy operates with “long and variable lags,” explaining why the Fed would not wait for its inflation target to be fully achieved before taking action. Powell emphasized that the central bank seeks “greater confidence” that inflation will return to the 2% level. The Fed’s next policy meeting is scheduled for the end of July, where further decisions on monetary policy will be discussed.
As tech tensions between the U.S. and China escalate, vast networks of underwater cables have emerged as a new point of contention in international relations. These subsea cables, which carry 99% of the world’s data traffic, are crucial to the global internet infrastructure. The U.S. government has reportedly cautioned tech giants like Google and Meta about the potential vulnerability of undersea cables in the Pacific to Chinese espionage. This development underscores the growing complexities and security concerns in the digital age.
As we ramp up in earnings expect price volatility to continue to expand and the small cap rotation to continue. Keep in mind we have a major distraction over the next two days due to Prime day shopping events across many retailers. This at times create choppy market conditions so plan accordingly.
Markets jumped higher to start the week. SPY gapped up 0.37%, DIA gapped up 0.57%, and QQQ gapped up 0.40% to start the day. From there, SPY and QQQ rallied steadily to follow-through and reach the highs of the day at about 11:25 a.m. After that, both sold back off steadily into the gap again at 2:15 p.m. At that point, both SPY and QQQ made a modest rally back above the opening level before selling sharply the last 30 minutes of the day. Meanwhile, after its gap higher, DIA sold off for 30 minutes before following the two broader major market index ETFs higher until noon. Then it followed the others, selling back into the gap and reaching the lows at 1:40 p.m. before rallying back above the open. DIA finally got in-sync with its broader brothers selling off hard the last 30 minutes of the day. This back-and-forth action gave us indecisive, black-bodied Doji candles in all three major index ETFs. SPY and DIA both printed new all-time highs and new all-time high closes. QQQ retested its T-line (8ema) from above and passed the test.
On the day, the 10 sectors were split evenly Monday with five in the green and five in the red. Financial Services (+1.35%), Energy (+1.19%), and Industrials (+1.12%) led the gainers while Utilities (-1.99%) was by far (by more than 1.20%) paced the losers. At the same time, SPY gained 0.28%, DIA gained 0.51%, and QQQ gained 0.27%. (It is worth noting that for the third day in a row, IWM (+1.90%) was well out in front of the three major index ETFs. VXX gained 1.48% to close at a still extremely low at 10.31. T2122 fell just a bit again, but remains in the top end of its overbought territory at 95.61. On the bond front, 10-year bond yields popped to 4.23% and Oil (WTI) fell just a bit to close at $81.92 per barrel. So, Monday was the volatile day where markets all gapped higher, rallied to the highs in the morning, sold off to the lows in the afternoon only to bounce the last few minutes. This happened on above-average volume in DIA, average volume in the QQQ, and below-average volume in the SPY.
The major economic news scheduled for Monday was limited to NY Empire State Mfg. Index, which came in slightly lower than expected at -6.60. Compare this to a forecast of -5.50 and the June reading of -6.00.
In economic speak news, on Monday, Fed Chair Powell indicated that the recent CPI data had boosted FOMC confidence that inflation is falling. When asked about Fed confidence, Powell said, “What increases that confidence in that is more good inflation data, and lately here we have been getting some of that.” Powell went on to say that he does not expect the Fed to wait until inflation reaches the 2% target before cutting rates, because that could undercut economic expansion. He said, “The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long.” Powell was also questioned about whether he will serve out his term, given the questioning of FOMC policies during his tenure. Powell bluntly answered “Yes” (indicating he will serve his entire term). Later, San Francisco Fed President Daly echoed Powell’s remarks on confidence. She said, “Confidence is growing that we are getting nearer a sustainable pace of getting inflation back down to 2%.” She continued, “I’m not going to tell you when the rate cut is, how many rate cuts might come,” … “Over time, as inflation comes down and the labor market slows, we have to make sure that we’re holding rates high enough that we don’t lose that inflation fight, but not hold them too long and risk worsening the labor market to a point where it’s challenging for people to get jobs.”
In stock news, on Monday, CLF announced it is acquiring Canadian steel company Stelco for $2.5 billion. At the same time, SEDG announced it would lay off 400 (7% of workforce) employees in Israel as it tries to improve profitability. Later, M announced it had ended acquisition talks with two private equity firms. (The talks had been ongoing for months.) After the close, the Wall Street Journal reported that a “hacktivist” group (Nullbulge) has obtained and leaked data from DIS’s internal communication system. The released data included everything from computer code, to excerpts from financial reports, to assessments of job candidates, to photos of employee dogs. At the same time, GM declined to reiterate its 2025 forecast of producing 1 million electric vehicles.
In stock legal and governmental news, on Monday, the French competition authority confirmed that it is investigating NVDA related to “anti-competitive practices.” At the same time, UBER lost an appeal of its lower court victory (which had ruled UBER rival taxi operators would be charged a 20% tax on profits). Later, PYPL was fined $27.3 million by the Polish antitrust agency for failing to spell out which activities may cause consumers to be fined (ambiguous contract fine print). At the same time, VRTX sued the US Dept. of HHS, seeking a court declaration that the company’s financial support for some patients does not violate US anti-kickback laws.
Overnight, Asian markets had seven of 12 exchanges in the green. However, Hong Kong (-1.60%) was the biggest mover while Shenzhen (+0.86%) led the gainers. In Europe, the bourses lean heavily to the red side at midday with 12 of 15 exchanges in the red. The CAC (-0.79%), DAX (-0.48%), and FTSE (-0.29%) are leading the region lower in early afternoon trade. Russia (+1.39%) is again an outlier. Meanwhile, in the US, as of 7:15 a.m., Futures are pointing to a modestly green start to the day. The DIA implies a -0.10% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.21% open at this hour. At the same time, 10-Year bond yields are down sharply to 4.18% and Oil (WTI) is off just over one percent to $80.94 per barrel in early trading.
The major economic news scheduled for Tuesday includes June Import Price Index, June Export Price Index, June Core Retail Sales, and June Retail Sales (all at 8:30 a.m.), May Business Inventories and May Retail Inventories (both at 10 a.m.), and API Weekly Crude Oil Stocks report (4:30 p.m.). The major earnings reports before the open include BAC, SCHW, MS, PNC, PGR, STT, and UNH. Then, after the close, IBKR, JBHT, and OMC report.
In economic news later this week, on Wednesday, June Building Permits, June Housing Starts, June Industrial Production, EIA Crude Oil Inventories, and Fed Beige Book are reported. Fed Governor Waller also speaks. Then Thursday, we get Weekly, Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, US Leading Economic Indicators Index, Fed’s Balance Sheet. We also hear from Fed member Daly and Fed Governor Bowman. Finally, on Friday, Fed members Williams and Bostic speak.
In terms of earnings reports later this week, on Wednesday, ALLY, ASML, CFG, ELV, FHN, JNJ, NTRS, PLD, SYF, USB, AA, CCI, DFS, EFX, KMI, LBRT, STLD, SNV, UAL, and WTFC report. On Thursday, ABT, ALK, BX, CTAS, CHI, DPZ, HXL, INFY, KEY, MTB, MAN, MMC, NOK, NVS, SNA, TSM, TXT, AIR, ISRG, NFLX, PPG, and SCHL report. Finally, on Friday, AXP, ALV, CMA, EEFT, FITB, HAL, HBAN, RF, SDVKY, SLB, TRV, and WIT report.
So far this morning, BAC and UNH have reported beats on both their revenue and earnings lines. Meanwhile, PNC missed on revenue while beating significantly on the earnings line. (SCHW, MS, PGR, and STT report closer to the opening bell.)
In miscellaneous news, Reuters reported Monday that the cost to transport a standard 40-foot shipping container from Shanghai to New York is pushing $10k ($9,387). This is more than double the rate in February but still well below the early pandemic high of almost $16k. The increase in costs is mostly attributed to attacks from Yemeni Houthi rebels (which have caused longer routes around the horn of Africa). This increase in shipping costs will either pressure company margins, contribute to inflation, or both as the Israeli invasion of Gaza shows no signs of an Israeli withdrawal yet. Elsewhere, the CDC sent a field team to CO to help the state deal with an outbreak of bird flu after four confirmed cases and a fifth suspected case were reported. (Based on current information, the CDC said it believes the risk to people in the public are low. However, farm workers and livestock herds are at significant risk.) Meanwhile, Bolivia announced the discovery of the largest natural gas field found since 2005. The single 1.7 trillion cubic feet field (located in northern Bolivia) is about 17.5% the size of the total US natural gas reserves. (However, bear in mind that it will take years to develop the field and build the infrastructure to transport the natural gas to global markets from the land-locked nation.)
With that background, it looks as if the SPY and QQQ are bullish again this morning while DIA is much more undecided. SPY and QQQ both opened the premarket slightly lower, but have put in white-bodied candles with only lower wick since that point. Meanwhile, DIA also opened slightly lower and also ran higher before backing down again to have a high-wick, Doji candle at this point. All three major index ETFs remain above their T-line (8ema). So, regardless of your timeframe, the market trend (short-term, mid-term, or longer-term) remains very bullish. In terms of extension, DIA remains the only one of the three that can be said to be stretched above its T-line. However, the T2122 indicator still remains in the top end of its overbought range. Therefore, the market may be in need of some rest or a pullback. With regard to those 10 big dog tickers, nine of the 10 are in the green this morning. TSLA (+1.29%) is again the biggest mover and also leading the market in premarket dollar volume traded. Only MSFT (-0.02%) is below break-even among those market-moving stocks.
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 gap higher as the bulls continue to run after investors assessed the implications of the assassination attempt on former President Donald Trump and prepared for a significant week of corporate earnings reports. The Dow Jones Industrial Average futures increased by 204 points, or 0.51%, while S&P 500 futures rose by 0.43%, and Nasdaq 100 futures gained 0.5%. This uptick reflects cautious optimism in the market despite the political turmoil.
European declined to begin the week by 0.12%, with all major indexes and most sectors experiencing losses. Utilities were the hardest hit, dropping 0.91%, while basic resources followed closely with a 0.83% decrease. This broad-based downturn reflects widespread market challenges across Europe.
China’s economy experienced a growth rate of 4.7% in the second quarter, falling short of the 5.1% expansion forecast by Reuters and marking a decline from the 5.3% growth recorded in the first quarter. Meanwhile, Australia’s S&P/ASX 200 index achieved a historic milestone by surpassing the 8,000 mark for the first time, closing at 8,017.6 with a 0.73% increase.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include BLK, & GS. After the bell include CFB, FBK, & SFBS.
News & Technicals’
Goldman Sachs is set to release its second-quarter earnings before the market opens on Monday. Analysts surveyed by LSEG anticipate earnings per share of $8.34 and revenue of $12.46 billion. Following the earnings release, company executives will hold a call with analysts at 9:30 a.m. ET to discuss the results and provide further insights into the financial performance and outlook.
Google is reportedly in advanced negotiations to acquire the cybersecurity firm Wiz for $23 billion, according to sources cited by The Wall Street Journal. If finalized, this acquisition would mark Google’s largest ever, underscoring its strategic push into the cybersecurity sector. The deal is expected to be completed soon, reflecting Google’s commitment to enhancing its security capabilities amid growing digital threats.
Burberry announced that if the current trading slowdown persists, it anticipates an operating loss for the first half of the year and a full-year operating profit below the current consensus. As a result, shares of the 168-year-old British luxury brand plummeted by 15.4% as of 9:54 a.m. London time. In response to these challenges, the company suspended its dividend and appointed Joshua Schulman, formerly of Michael Kors and Coach, as the new CEO, with Jonathan Akeroyd stepping down immediately.
Swatch Group reported a significant decline in first-half sales and earnings on Monday, attributing the downturn to weaker demand for luxury goods in China, including Hong Kong and Macau. Despite the overall slump, the Swatch brand managed to defy the trend, achieving a 10% increase in sales in China. This performance highlights the brand’s resilience amid challenging market conditions, even as the broader company faces headwinds in one of its key markets.
As we look ahead to a busy week as the earnings season ramps up the bulls continue to run pointing to a substantial gap up open. Gapping to new record highs can create some big point whipsaws so plan your risk accordingly. Expect volatility to increase over the next several weeks as the market reacts to all the earnings data coming our way.
The Bears just couldn’t stand their success from the day prior and let the Bulls run on Friday. SPY gapped up 0.23%, DIA gapped up 0.30%, and QQQ opened up by 0.12%. From there, all three major index ETFs rallied sharply until 11:30, took a one-hour rest and then rallied again to the highs of the day at 1:55 p.m. At that point, we saw very modest profit-taking and a sideways grind until 3:30 p.m. However, traders took profits hard the last 30 minutes, giving back half or more of the day’s gains. This action gave us gap-up, white-bodied candles in all three with large upper wicks. SPY and QQQ printed Bullish Harami candles with QQQ crossing back above its T-line (8ema). SPY also printed another new all-time high. Meanwhile, DIA also printed a new all-time high and new all-time high close. This happened on well above-average volume in DIA, as well as just below-average volume in the SPY and QQQ.
On the day, all 10 sectors were in the green with Consumer Cyclical (+1.17%) out in front leading the rest of the sectors higher. Meanwhile, Energy (+0.31%) was the laggard sector. At the same time, SPY gained 0.61%, DIA gained 0.68%, and QQQ gained 0.59%. VXX fell 1.74% to close at an extremely low at 10.16. T2122 fell just a bit to remain in the top end of its overbought territory at 96.34. On the bond front, 10-year bond yields dropped to 4.181% and Oil (WTI) was down almost half a percent to close at $82.24 per barrel. So, Friday was the Bull’s day all day with significant profit-taking the last 30 minutes giving back a fair amount of the daily gains. It is worth noting that INTC (+2.96%), IBM (+2.55%), and AMGN (+1.77%) led the DIA to its new all-time highs…but it was a broad-based move with 22 of the 30 DIA tickers in the green. Meanwhile, 401 of 501 of the SPY were green and 81 of 101 of the QQQ were above break-even.
The major economic news scheduled for Friday included June Core PPI, which came in hotter than expected at +0.4% (compared to a +0.2% forecast and May’s +0.3%). This led to a June PPI of +0.2% (versus a forecasted +0.1% and May’s 0.0% value). Later, Preliminary July Michigan Consumer Sentiment was lower than predicted at 66.0 (compared to the 68.5 forecasted and June’s 68.2 reading). At the same time, the July Preliminary Michigan Consumer Expectations were also lower than anticipated at 67.2 (versus the 69.8 forecast and June’s 69.6 value). On the forward-outlook side, the July Michigan 1-Year Inflation Expectations were 2.9% (in-line with the forecast and a tick better than June’s 3.0% number). In the longer term, July’s Michigan 5-Year Inflation Expectations were better than predicted, also at 2.9% (versus a 3.0% estimate and June reading).
The US Dept. of Agriculture WASDE report also came out Friday. It raised estimates for US corn production and reduced the soybean production estimate. (Forecasts of large US crops in both have pushed both commodity prices down since the Spring. The USDA also lowered its US national corn inventory (not growing, in storage) estimate by 8.4% from June. (This could mean short-term prices may increase, which is what Friday’s market saw.)
In stock news, on Friday, LUV and ACHR announced they have agreed to mutually develop operational plans for electric air taxis in CA and TX airports. At the same time, Reuters reported exclusively that EADSY (Airbus) has launched a cost cutting program that includes a headcount freeze aimed tackling a problem with increased per jet cost of production. (No layoff plans were reported, but “all costs” were on the table per the article.) Meanwhile, the Financial Times reported that UL is planning massive layoffs in Europe, with layoffs of a third of officer workers (roughly 3,200) taking place between now and the end of 2025. Later, T announced (after an SEC filing revealed) that it had suffered a massive hack, losing data from 109 million customer accounts (nearly all of its cellular or landline customers) text and calls from six months in 2022. (The FBI is investigating and at least on person has been arrested so far.) After the close, Reuters reported that BHP and LUNMF are in talks about making a joint bid for copper miner FLMMF. Then, on Sunday, the Wall Street Journal reported that GOOGL is near to striking a deal to acquire cybersecurity firm Wiz for roughly $23 billion. (If completed, it would be GOOGL’s largest acquisition ever.)
In stock legal and governmental news, on Friday, India’s antitrust regulator said AAPL exploited its position in the app market. Later, Reuters reported that BG and GLNCY (Glencore)-backed Viterra have offered to sell off their assets in two EU countries in order to get European Commission approval of their $34 billion merger. At the same time, a US District Court of Appeals rejected appeals made by DISH and an amateur astronomer group, upholding the lower-court decision in favor for FCC approval for SpaceX to deploy thousands (up to 7,500) of Starlink satellites. Later, C asked a judge to dismiss a conservative racial discrimination lawsuit that alleged the bank violated civil rights law by waiving ATM fees for customers of minority-owned banks. At the same time, Bloomberg reported that federal prosecutors are investigating ABR over allegations (that were made by short sellers) of lending practices and financial disclosures. Later, a US Appeals Court has temporarily put the FCC’s reinstatement of net neutrality rules on hold until August 5. The court will consider appeals by the telco companies. (The rule which was set to go back into effect July 22 requires internet service providers to treat all network traffic equally, rather than throttling some and charging higher rates for certain types of traffic.) At the same time, a NY Federal Judge ruled AMZN must comply with an EEOC subpoena related to its investigation into allegations that company discriminated against pregnant workers.
Overnight, Asian markets were evenly mixed, but the biggest movers were to the red side. Japan (-2.45%) and Hong Kong (-1.52%) led half of the region lower. In Europe, the bourses are much more bearish with only four of 15 exchanges in the green at midday. Russia (+1.39%) is a notable outlier. The CAC (-.044%), DAX (-0.21%), and FTSE (-0.23%) are leading the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a gap higher. The DIA implies a +0.56% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.49% open at this hour. At the same time, 10-Year bond yields are up to 4.221% and Oil (WTI) is off slightly to $82.13 per barrel in early trading.
The major economic news scheduled for Monday is limited to NY Empire State Mfg. Index (8:30 a.m.). However, Fed Chair Powell speaks at noon and Fed member Daly speaks at 4:35 p.m. The major earnings reports before the open include BLK and GS. Then, after the close, there are no major reports scheduled.
In economic news later this week, on Tuesday we get June Import Price Index, June Export Price Index, June Core Retail Sales, June Retail Sales, May Business Inventories, May Retail Inventories, and API Weekly Crude Oil Stocks report. On Wednesday, June Building Permits, June Housing Starts, June Industrial Production, EIA Crude Oil Inventories, and Fed Beige Book are reported. Fed Governor Waller also speaks. Then Thursday, we get Weekly, Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, US Leading Economic Indicators Index, Fed’s Balance Sheet. We also hear from Fed member Daly and Fed Governor Bowman. Finally, on Friday, Fed members Williams and Bostic speak.
In terms of earnings reports later this week, on Tuesday we hear from BAC, SCHW, MS, PNC, PGR, STT, UNH, IBKR, JBHT, and OMC. Then Wednesday, ALLY, ASML, CFG, ELV, FHN, JNJ, NTRS, PLD, SYF, USB, AA, CCI, DFS, EFX, KMI, LBRT, STLD, SNV, UAL, and WTFC report. On Thursday, ABT, ALK, BX, CTAS, CHI, DPZ, HXL, INFY, KEY, MTB, MAN, MMC, NOK, NVS, SNA, TSM, TXT, AIR, ISRG, NFLX, PPG, and SCHL report. Finally, on Friday, AXP, ALV, CMA, EEFT, FITB, HAL, HBAN, RF, SDVKY, SLB, TRV, and WIT report.
So far this morning, GS reported beats on both the revenue and earnings lines. BLK missed on revenue while beating handily on earnings.
In miscellaneous news, Reuters reported that rating agencies (MCO and Fitch) said Friday that office and other commercial real estate loan delinquencies ticked up in June. The report said that overall commercial mortgage-backed loans delinquency rate rose to 2.45% (from 2.42% in May). (This is the rate of loans with payments at least 30-days in arrears.) Elsewhere, Israeli PM Netanyahu reversed (reneged) on a previous major point in ceasefire negotiations with Hamas. Israel now says it demands to control the flow of Palestinians back to the North during any ceasefire versus a prior concession of “free Palestinian movement” during a ceasefire. This essentially ended the talks for now as Netanyahu tries to shore up his extreme right-wing alliances. On Sunday, CNP (the main electric provider in the Houston area) said half a million residences and businesses remain without power going into the new week.
In way too early earnings season news, Friday saw the early reporting big bank stocks punished, despite all of them reporting beats versus consensus estimate. For example, WFC closed down 6.02%, C down 1.81%, and JPM down 1.21%. Some analysts attributed this to the constituent details of the reports. (For instance, WFC reported less interest income than expected although it did beat over overall revenue estimates by $440 million.) Other analysts said they believed it had to do with forward outlook such as JPM’s Jamie Dimon warning that inflation and interest rates may stay higher than the market expects and may hurt the overall economy. However, still others said it was pure profit-taking. Whatever the reason, it was worth noting that only Energy underperformed the Financial Services sector on Friday, despite reports that were good at first glance.
With that background, it looks as if the Bulls want to run this morning. All three major index ETFs gapped higher to start the premarket and have printed white-body candles with no wicks since that start. DIA is testing Friday’s all-time high again in the early session. All three remain above their T-line (8ema). So, regardless of your timeframe, the market trend (short-term, mid-term, or longer-term) remains very bullish. In terms of extension, DIA is now the only one of the three major index ETFs stretched above its T-line. However, the T2122 indicator is in the top end of its overbought range. Therefore, the market may be in need of some rest or a pullback. With regard to those 10 big dog tickers, eight of the 10 are in the green this morning. TSLA (+4.07%) is the biggest mover and also leading the market in premarket volume. Only MSFT (-0.12%) and META (-0.21%) are below break-even among those market-moving stocks.
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.
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🎯 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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