Thursday gave us another bullish day with much less whiplash than Wednesday. SPY opened 0.11% higher, DIA opened up 0.12%, and QQQ opened up just 0.07% higher.  From there, all three major index ETFs meandered sideways for the morning before starting a midday rally that took us to the highs of the day at about 2 p.m.  At that point, SPY and DIA ground sideways in a tight range and QQQ had a 15-minute selloff at 2:45 p.m. before following the others sideways in the same tight range. This action gave us white-bodied candles with lower wicks in all three.  SPY and DIA both retested their T-line (8ema) and 17ema before rebounding to close at the top of the candle. For its part, QQQ crossed back above its 50sma.  This all happened on below-average volume for all three major index ETFs.

On the day, all 10 sectors were in the green, with Basic Materials (+1.82%) well out in front leading the market higher. On the other side, Healthcare (+0.30%) lagged behind the other sectors. Meanwhile, SPY gained 0.84%, DIA gained 0.66%, and QQQ gained 0.98%.  VXX fell slightly to close at 48.94% and T2122 jumped back up into the middle of its over-bought range at 88.54.  At the same time, 10-Year bond yields rose to close at 3.685% while Oil (WTI) jumped up another 2.79% to close at $69.19 per barrel.  So, on Thursday saw the fourth-straight day of gained in SPY and QQQ (also a second-straight for DIA).  It was big tech names NVDA (+1.91%), TSLA (+0.74%), AVGO (+3.97%), and META (+2.69%) that drove the SPY and QQQ on dollar-volume.   

The major economic news scheduled for Thursday included the Weekly Initial Jobless Claims, which came in a bit higher at 230k (compared to a forecast of 227k and prior week value of 228k).  On the ongoing front, Weekly Continuing Jobless Claims were up a bit as anticipated at 1,850k (in-line with the 1,850k forecast and up from the prior week 1,845k reading).  At the same time, August Month-on-Month Core PPI was up to +0.3% (versus the +0.2% forecast but well up from July’s -0.2%).  On the headline number, August Month-on-Month PPI was also up to +0.2% (compared to a +0.1% forecast and July’s 0.0% value).  On the budget front, the August Federal Budget Balance showed a much higher than expected deficit at -$380.0 billion (measured against a forecast of -$285.7 billion and July’s -$244.0 billion reading).  Then, after the close, the Fed Balance Sheet was up $2 billion for the week to $7.115 trillion from last week’s $7.113 trillion.

The WASDE Ag report also came out Thursday.  It reported an increased 2024 corn crop forecast, up 39 million bushels from last month to 15.2 billion bushels.  The silver lining for farmers is that the 55-million-bushel reduction in the beginning inventory number (due to increased usage in ethanol production).  Meanwhile, the Soybean forecast was left unchanged at 4.586 billion bushels. 

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

In stock news, on Thursday, LLY announced it will invest $1.8 billion to expand its Irish manufacturing operations.  This doubles the company’s investment in those two plants in Ireland.  At the same time, GILD reported the results of a Phase 3 trial showing that its injectable HIV prevention drug reduced infections by 96%. (This is far superior to the existing oral pill prevention treatment.)  Later, GIS announced it has agreed to sell its North American yogurt business to a French company for $2.1 billion.  At the same time, MSFT reported it recovered after an outage of its cloud-based Office365 suite. Later, cable provider CHTR said Thursday that it is adding WBD’s Max and Discovery+ streaming services to its cable packages at no additional charge. 

Meanwhile, Reuters reported that GM is in talks to buy electric vehicle batteries (built in the US but made using Chinese company CATL’s technology).  The proposed source would be a TTDKY (Japanese company TDK) plant to be located somewhere in the Southeastern US.  Later, AAL flight attendants voted to ratify the new 5-year contract with the airline. At the same time, AMZN announced plans to invest $2.1 billion in its Delivery Service Partners program over the next six years.  This includes an increase in DSP partner compensation of $660 million over the next year.  Later, MA announced it is buying threat intelligence company “Recorded Future” from a private equity firm for $2.65 billion.  At the same time, an SEC filing showed that Berkshire Hathaway’s Insurance unit leader (Ajit Jain) sold more than half of his BRKA stock on September 9th.

In stock legal and governmental news, on Thursday, the NHTSA announced it has opened a preliminary investigation into VFS (Vietnam’s VinFast electric car maker) on reports of the company’s “Lane Assist” system malfunctioning.  At the same time, a Philly Court jury ruled in favor of BAYRY (Bayer) in a lawsuit alleging the company’s Roundup weed killer caused a plaintiff’s cancer.  Later, the FDA approved the first over-the-counter hearing aid software that is intended to be used with AAPL’s AirPod Pro headphones.  At the same time, NAVI accepted a CFPB-imposed ban on servicing federal student loans, as well as the $120 million settlement ($100 million in restitution and a $20 million fine).  This action was taken over NAVI steering borrowers to delay repayment rather than taking the lower-profit repayment plans those borrowers were qualified to get.  Later, Reuters reported that Indian antitrust regulators have found that AMZN and WMT (Flipkart unit) have violated India’s local competition laws by giving preference to selected sellers on their websites.  Specifically, the report said that each of the antitrust charges brought against the companies were found to be true. 

Elsewhere, the Office of the Comptroller of Currency announced it had entered into a formal agreement prohibiting WFC from expanding its product offerings and requiring the bank to submit action plans to fix its anti-money-laundering compliance programs.  (WFC stock was down more than 4% on the news.)  Later, the FAA reported that an ALK jet had to abort takeoff to avoid collision with a LUV jet at Nashville’s airport on Thursday.  An investigation is underway.  At the same time, the Treasury Dept. announced proposed corporate alternative minimum tax rules that would impact 100 large corporations that currently pay an average of 2.6% in taxes (60 of them paying less than 1%).  The proposals will generate about $250 billion over 10 years according to Treasury.  Later, a US Appeals Court threw out a $564 million jury verdict against BMO over its role in a $3.65 billion Ponzi scheme.  At the same time, a federal judge overruled a CFTC decision that had prohibited betting on US elections.  So, there will be betting on various election outcomes.  After the close, Reuters reported that OXY will receive up to $500 million in support for its carbon capture facility in south TX.

In miscellaneous news, on Thursday, Reuters reported that more than 340k customers were without power in LA following Hurricane Francine.  Meanwhile, the CDC reported it still has not identified the origin of a human case of bird flu in MO.  (The patient had no known exposure to poultry flocks or dairy herds.)  This was the 14^th human case so far this year requiring hospitalization and the first with unknown origin.  Elsewhere, the SEC announced it is set to vote on new “tick size” rules at a public meeting at 10 a.m. on September 18.  The proposed changes would allow stock pricing in increments of less than a penny.  (The confusing rule would have four different buckets, with some stocks pricing in penny increments, while others trade in half penny, fifth of a penny, of tenth of a penny increments.)

In what is widely seen as a precursor to Fed action next week, the ECB cut rates by a quarter point again (for the second time this year), lowering its deposit rate to 3.50%.  Elsewhere, the Fedwatch tool showed that Feds Fund Futures trades are indicating a increase in the probability of a half percent cut next following the PPI data release.  On Wednesday, there was only a 14% probability of a 50-basis-point cut (the other 86% being on a quarter-point cut).  However, one day later, that percentage more than doubled to 31% probability of a half percent and 69% expecting a quarter percent cut.  In tangentially-related news, mortgage finance agency Freddie Mac said on Thursday that the US average 30-year fixed-rate mortgage fell to 6.20%. That is the lowest rate since February 2023.

Overnight, Asian markets were mixed but mostly green with just four of the region’s 12 exchanges showing red.  Malaysia (+0.84%), and Hong Kong (+0.75%) led the gainers while Shenzhen (-0.88%) and Japan (-0.68%) paced the losses.  However, in Europe, we see green across the board at midday.  The CAC (+0.28%), DAX (+0.52%), and FTSE (+0.30%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.13% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.03% open at this hour.  At the same time, 10-Year bond yields are down to 3.648% and Oil (WTI) is up another 1.13% to $69.75 per barrel in early trading.

The major economic news scheduled for Friday includes August Export Price Index, and August Import Price Index (both at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  There are no major earnings reports scheduled for either before the open or after the close.

In overnight news, aerospace giant BA’s problems increased even more as workers in the Pacific Northwest (more than 30k workers) rejected the company’s contract offer by a massive 96% vote against and promptly went on strike.  This was the first BA strike since 2008 and it completely halts production of the company’s best-selling 737 line of jets.  Elsewhere, President Biden proposed a rule change that would prevent low-value shipments (largely made up of Temu and Shein retail packages) from getting special custom exemptions and avoid tariffs on Chinese goods.  (The White House estimates that those type of shipment have increased from 140 million per year to more than a billion over the last 10 years.)

With that background, all three major index ETFs opened the premarket just on the green side of flat and have been largely indecisive since that point. All three remain above their T-line (8ema). So, the short-term trend is bullish. At the same time, the mid-term trend remains mixed with the QQQ bearish. In the longer-term we still have a Bull trend in the DIA, SPY, and QQQ. In terms of extension, none of the three major index ETFs are extended above their T-lines. However, at the same time, the T2122 indicator is back in the center of its overbought range. So, markets have room to run either direction (if one side or the other can find momentum), but the Bears has a little more slack to work with today. With regard to those 10 big dog tickers, six of the 10 are in the green this morning, led higher by AMD (+0.68%) and GOOGL (+0.65%). On the other side, TSLA (-0.34%) is the laggard. Normalcy has returned to the pre-market dollar-volume with NVDA having traded about five times as much dollar-volume of stock as the next closest 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.

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 gave us major whiplash on Wednesday. SPY opened a small 0.01% lower, DIA gapped down 0.27%, and QQQ gapped up 0.23%.  However, at the point, all three major index ETFs sold off sharply and steadily for about 60-75 minutes. Then we saw momentum switch flipped and all three rallied sharply and steadily for the rest of the day. Only profit-taking the last five minutes kept us from closing at the highs in all three major index ETFs.  This action gave up large white-bodied candles with large lower wicks.  SPY and DIA were white Hammer type candles while QQQ had a larger body.  All three crossed above their T-line, although DIA closed only slightly above its 8ema.  This happened on average volume in the SPY and DIA as well as well-above average volume in the QQQ.

On the day, seven of the 10 sectors were in the green, with Technology (+2.43%) way, way (more than 1.25%) out front leading the Bulls higher. On the other side, Consumer Defensive (-0.60%) lagged well behind the other sectors.  Meanwhile, SPY gained 1.03%, DIA gained just 0.25%, and QQQ popped 2.17% higher.  VXX dropped another 4.25% to close at 49.33% and T2122 rose up into the center of its mid-range at 47.68.  At the same time, 10-Year bond yields rose to close at 3.655% while Oil (WTI) jumped up another 2.37% to close at $67.31 per barrel on potential hurricane impact.  So, on Wednesday saw the Bears trying to make hay on flat CPI numbers until a major mid-morning reversal ripped their faces off and did not let up the rest of the day.  As usual, NVDA led the market on the dollar-volume of stock traded, but this time also chipped in with a strong 8.15% gain.  

The major economic news scheduled for Wednesday included August Core CPI (month-on-month), which rose a tick to +0.3% (compared to the +0.2% forecast and July reading).  However, on the annual basis August Core CPI was flat at +3.2% (versus a forecast and July value of +3.2%).  On the headline front, the month-on-month August CPI was flat at +0.2% (compared to a forecast and July reading of +0.2%).  On the year-on-year basis, August CPI was down sharply to +2.5% (right on the +2.5% forecast but down sharply from July’2 +2.9% value).  Later, EIA Weekly Crude Oil Inventories were down, about as expected, at +0.833 million barrels (versus a +0.900 million barrels forecast but up sharply from the prior week’s -6.873 million barrels number). 

In “here we go again” news, we are facing another potential government shutdown at the end of September.  Yet again, the GOP has put off either a budget or a continuing resolution to the last minute.  And just as in so many times before, GOP in-fighting has stopped progress as the deadline looms.  This time, a previously-scheduled vote on a Republican-dictated bill was canceled for Wednesday because the House Speaker did not want to go through the embarrassment of previous vote failures.  So, the Speaker told reporters that the Republican caucus will “work through the weekend” to try to get enough votes for their partisan bill, which he hopes to put up for a vote next Tuesday.  In the meantime, we wait for the next act in this play as the calendar ticks down with less than three weeks left.

In Fed news, on Wednesday the Fed Office of the Inspector General released a report saying its investigation had found that Atlanta Fed President Bostic had created the appearance he had traded on confidential Fed information 154 times between March 2018 and March 2023.  The report said there was no evidence Bostic actually traded on inside information.  However, his investment managers (who traded his personal account) had made trades 154 times during Fed “blackout periods” just ahead of FOMC announcements.  In addition, the investigation found that Bostic filed inaccurate financial disclosure forms, held more Treasuries than the Fed permits, and twice made trades that were different than what he had gotten pre-approval from the Fed to make.  The Fed Board of Governors will now review the report and decide appropriate action.

In stock news, on Wednesday STLA announce it will invest $406 million to retool three MI facilities to build components that can be shares between hybrid and all-electric vehicles.  At the same time, GME announced it would be issuing up to 20 million more shares of stock to raise cash for “general corporate purposes.”  (GME closed down almost 12% on the news.)  Later, ADBE announced it will release a new AI-powered video creation and editing tool later this year.  At the same time, SEC filings showed that BRKB had sold another 5.8 million shares of BAC between September 6 and September 10.  (That takes the BRKB offloading of BAC to almost 175 million since mid-July.)    Later, RHHBY (Roche) reported disappointing early-stage trial results or its weight-loss pill. 

Elsewhere, the CEO of RTX told an investor conference that he does not see any available “transformative M&A deals” in the aerospace industry and he is open to paring down the RTX business by pruning (selling) certain units.  Later, Reuters reported that BA is facing a possible strike Friday in the Pacific Northwest.  It seems that despite a tentative deal, which workers vote on ratifying on Thursday, many of the workers are enraged by the deal because it offers a much lower pay increase and other benefits that had been sought.  At the same time, AMZN announced it will invest $1.8 billion, this time in Brazil and by 2034, to add to its AWS cloud computing capacity. Later, NSC officially terminated its CEO (for an inappropriate relationship with the company’s top legal officer) and replaced him with the CFO.

In stock legal and governmental news, on Wednesday, a number of business trade and lobbying groups came out in favor of Nippon Steel’s acquisition of X while trying to also not criticize their target (politicians).  The letter said the signers were “concerned the decision is being unduly influenced by political pressure.”  (However, both sides of the political aisle are strongly and publicly against allowing the acquisition.)  Later, a US District judge ruled in favor of an industry group (whose members include META, GOOGL, and SNAP) and against a UT state law requiring social media platforms to verify user age and restrict the accounts of minors. At the same time, Semaphore reported that the US Dept. of Commerce is close to approving the export of advanced NVDA AI chips to Saudi Arabia. 

Elsewhere, after the close, the CFPB ordered TD to pay $28 million for repeatedly sharing inaccurate, negative information about its customers with credit reporting agencies, hurting customer credit scores.  At the same time, the EU’s top privacy regulator announced it has opened an investigation of GOOGL over its AI use of European consumer personal data.  Later, EA, MSFT (Activision division), and TCEHY (Tencent) were among the companies hit with an EU consumer complaint over “tricking” children game players into spending more money via in-game currencies. At the same time, evidence was presented at GOOGL’s ad network antitrust trial that an ex-executive told company employees that the goal was to crush rival ad networks. 

In miscellaneous news, on Wednesday Reuters reported that Korean-listed electronics giant Samsung will cut up to 30% of its “overseas staff” across the Americas, Europe, Asia, and Africa.  Samsung is the world’s leading producer of smartphones, memory chips, and TVs and has more than 147,000 employees outside of South Korea.  The report said the cuts had already begun in India.  Reuters reported that the story had been confirmed by six Samsung sources.  Elsewhere, about 39% of US Gulf of Mexico oil production and 49% of US natural gas production in the area were shut down on Wednesday due to Hurricane Francine.  Meanwhile, Rho Motion reported that global electric vehicle sales were up 20% in August, despite a 33% decrease (which caused a 19-month low) in Europe. The increase was driven by record sales in China, which were up 42%.  

Overnight, Asian markets were mostly green with nine of the 12 exchanges closing above break-even.  Japan (+3.41%), Taiwan (+2.96%), and South Korea (+2.34%) led the region higher.  In Europe, we see green across the board at midday.  The CAC (+0.78%), DAX (+1.09%), and FTSE (+0.73%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.14% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.06% open at this hour.  At the same time, 10-Year bond yields are up to 3.668% and Oil (WTI) is up 1.75% to $68.49 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, and August PPI (all at 8:30 a.m.), WASDE Ag report (noon), August Federal Budget Balance (2 p.m.), and the Fed Balance Sheet (4:30 p.m.)  The major earnings reports scheduled for before the open include Thursday, we hear from BIG, CAL, KR, and SIG.  Then, after the close, ABDE and RH report.

In economic news later this week, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, on Friday, there are no reports scheduled.

So far this morning, SIG beat on both the revenue and earnings lines.  However, CAL missed on both the top and bottom lines.  (KR reports at 8 a.m.)

In overnight news, MRNA announced plans to cut $1.1 billion in costs by 2027 on expectation of a rapid decline in its COVID vaccine business.  However, the company also said it expects to have 10 new biotech products approved over that same period.  Meanwhile, MCD announced it will extend its “$5 value meal” program through the end of the year in most US markets.  (Approximately 80% of MCD franchisees have chosen to do this program extension.)  Elsewhere, Bloomberg reports that both JPM and BAC are rolling out programs to reduce junior staff workloads.  JPM will limit MOST junior staffers to only 80 hours per week.  At the same time, BAC is rolling out a so-called “Banker Diary” system to track individual employee workloads.  (I’m sure that in no way will be used for analyzing and ranking employee productivity.)

With that background, all three major index ETFs opened the premarket higher, but have printed small and indecisive (mostly wick) candles since that point. All three are above their T-line (8ema). So, the short-term trend is bullish. At the same time, the mid-term trend is mixed at best with the QQQ now bearish. In the longer-term we still have a Bull trend with the DIA, SPY, and QQQ. In terms of extension, none of the three major index ETFs are extended, having just re-crossed their T-lines. At the same time, the T2122 indicator is back in the center of its mid-range. So, markets have room to run either direction if one side or the other can find momentum. With regard to those 10 big dog tickers, eight of the 10 are in the green this morning, led higher by GOOGL (+1.15%). On the other side, TSLA (-0.54%) is the laggard. Interestingly, normalcy has returned to the pre-market dollar-volume with NVDA having traded more than six times as much stock as the next closest ticker.

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

Tuesday was a down then up day.  SPY gapped up 0.35%, DIA gapped up 0.26%, and QQQ gapped up 0.41%.  At that point, all three major index ETFs did some form of morning selloff that re-crossed the opening gap and reached the lows of the day about noon.  This was followed by a long, steady rally into the end of the day.  This action gave us gap-up candles with long lower wicks.  The SPY printed a white-bodied, small-body, long-handle Hammer, while DIA gave us a larger, black-bodied Hammer that retested and failed its T-line (8ema) from below.  For its part, QQQ made the most gain with a gap-up, larger white-body Hammer candle.  However, this all happened on much lower-than-average volume in all three major index ETFs.

On the day, six of the 10 sectors were in the green and, while it may be a data issue, TC200 showed Consumer Cyclical (+10.89%) way, way out front leading the market higher.  On the other side Energy (-1.60%) was by far the worst-performing sector. At the same time, SPY gained 0.44%, DIA lost 0.20%, and QQQ gained 0.92%.  VXX fell another 1.77% to close at 51.52% and T2122 was just shy of being flat to stay in the bottom portion of its mid-range at 34.25.  At the same time, 10-Year bond yields fell to close at 3.644% while Oil (WTI) dropped another 3.54% to close at $66.28 per barrel.  So, Tuesday did see some movement with a gap up, significant selloff and then steady rebound rally all afternoon.    

The major economic news scheduled for Tuesday are limited to EIA Short-Term Energy Outlook that showed power consumption was still on track to rise to new records in 2024 and 2025.  The EIA projects growing data center demand will increase electric usage to 4,101 billion kilowatt-hours in 2024 and then 4,185 billion kilowatt-hours in 2025.  (That compares to a 4,000 billion kilowatt-hours in 2023.)  Interestingly, solar accounted for 60% of all electric-generating capacity added in the first half of 2024 with TX leading the way by adding 16 billion kilowatt-hours in the first six months.  Later, Weekly API Crude Oil Stocks, which showed a bigger than expected drawdown of 2.790 million barrels (compared to the +0.700-million-barrel inventory build that was forecasted, but much less than the prior week’s 7.400-million-barrel drawdown) were reported.

After the close, PLAY, GME, and WOOF all missed on the revenue line while beating on the earnings line. 

In stock news, on Tuesday, TSM reported August sales that point toward a Q3 beat.  At the same time, BMWYY (BMW) cut its 2024 financial outlook, citing weaker sales, in particular in China, as well as supply issues. The cut was for EBIT range mid-point to 6.5%, down from 9.0%.  Later, VLKAF (Volkswagen) announced it is scrapping a range of labor agreements, including one that guaranteed a minimum number of jobs at six German plants through 2029.  The company is in serious negotiations with unions and this may be a negotiating tactic, but it raises the unheard-of prospect of job cuts or plant closures at VLKAF’s flagship German factories for the first time in 87 years. At the same time, NBTB announced it had agreed to buy EVBN for $236 million.  The deal will create a bank with $16 billion in assets.  Later, BA announced it delivered 40 jets in August, up five from August 2023 and up eight month-on-month.  In other BA news, Reuters exclusively reported BA had delayed supplier production milestones by six months for its 737 MAX.  (This is a sign BA is now struggling to get production back on schedule for its top-selling 737 MAX planes.)  Later, UPS announced it would acquire German healthcare logistics (temperature-control warehousing and shipping) firm Frigo-Trans and its sister company BPL for an undisclosed sum.

Elsewhere, NKE shareholders rejected (for the second straight year) a proposal that the firm enter into binding agreements to address the human rights of workers at its suppliers (where thousands of NKE garment makers are allegedly unpaid, forced labor).  At the same time, LUV Chairman Kelly announced he is stepping down amidst a board fight by activist investors and CEO Jordan.  Later, CPB announced it is dropping the word “Soup” from its name and will be known as “The Campbell Company” as it shifts into other packaged foods. At the same time, Reuters reported that GS is close to a deal to sell its GM credit card unit to BCS for an undisclosed sum.  (The GM card unit has about $2 billion of card balances outstanding.)  After the close, the CEO of RTX told a conference that the alarms are going off for it with massive problems like its supply chain having never recovered from COVID-19, being unable to find qualified labor for its production lines, and more.  Specifically, RTX CEO Hayes said that 2,000 of the company’s 14,000 suppliers are located in China.  He refused to define it, but said that if “if” ever happens, he doesn’t know what the company will deal with the situation.  After the close, AMZN announced it will invest $10.45 billion in UK Data Centers over the next five years as it builds out its Web Services offerings.

In stock legal and governmental news, on Tuesday, DE agreed to pay $9.93 million to settle SEC charges that its Thailand subsidiary offered massage parlor and other improper gifts to the government of that country from 2017 to 2020 as well as other commercial bribery to win contracts.  At the same time, the SEC fined KDP $1.5 million to settle charges of inaccurate statements regarding the recyclability of its K-cup coffee pods.  Later, the NHTSA announced that VLKAF (Volkswagen) is recalling 99k electric SUVs to fix door handles which allow water to seep into circuit boards and can lead to lock malfunctions. At the same time, a new lawsuit was filed against CHD that alleges the company’s Trojan Condoms are not safe because they contain “forever chemicals.”  Later, Fed Vice-Chair Barr announced revised capital requirement rules for banks in what is widely seen as a big win for major banks and their lobbyists.  (The increase in capital requirements will be roughly half of the increase initially proposed.) 

Meanwhile, the FTC told ANCTF (operator of Circle-K convenience stores) and SVNDF (operator of 7-eleven convenience stores) that it may probe any acquisition deal.  (If the two strike a deal, it would combine the two largest convenience chains in the world.)  Later, a former executive of NWSA testified in the GOOGL antitrust lawsuit, saying that NWSA would have lost $9 billion in 2017 if it had switched away from the GOOGL ad buying platform.  This, he said, kept NWSA captive to GOOGL and feeling like hostages.  After the close WBA and TEVA announced they had settled with the city of Baltimore MD over opioid crisis liability ahead of the trial which was to begin next week.  The two companies will pay $402.5 million to settle the case.  Also after the close, a TPR executive testified that if the company merges with CPRI, they will have room to raise prices and lower discounts, just as the FTC had charged.  However, while those things were also shown in a slide deck from TPR’s CEO, the executive said that did not necessarily mean the company would do those things.

In miscellaneous news, on Tuesday, OPEC+ revised its global oil demand forecast downward for both 2024 and 2025.  This was the second consecutive month OPEC+ has lowered its estimate of worldwide oil usage.  Still, the forecast calls for an increase of 2.03 million barrels per day on average for all of 2024 (down a bit from last month’s 2024 forecast of a 2.11 million barrels per day increase).  For 2025, OPEC+ is calling for an additional increase of 1.74 million barrels per day (versus last month’s estimate of a 1.78 million barrels per day increase).  Meanwhile, FDX warned that some areas of Louisiana may see pickup and delivery delays later in the week as storm Francine is expected to make landfall in the state Wednesday.   Elsewhere, the Census Bureau reported that the median US 2023 INFLATION-ADJUSTED Household income had recovered to pre-pandemic (2019) levels, even considering the inflation spikes of 2022 and 2023. Finally, Bloomberg reported that online grocery prices fell by 3.7% in August which was the largest monthly decline since 2014. 

Overnight, Asian markets were mostly red with just three of the 12 exchanges above break-even.  Japan (-1.49%), Malaysia (-1.24%), and Shanghai (-0.82%) led the region lower.  In Europe, we see the opposite picture taking shape at midday with 11 of the 14 exchanges in the green.  The CAC (+0.29%), DAX (+0.39%), and FTSE (+0.07%) lead the region higher in early afternoon trade.  Meanwhile, in the US, at 7:15 a.m., Futures point toward a down start to the morning.  The DIA implies a -0.40% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.35% open at this hour.  At the same time, 10-Year bond yields are down to 3.627% and Oil (WTI) is up 2.16% to $67.17 per barrel in early trading.

The major economic news scheduled for Wednesday is limited to August Core CPI and August CPI (both at 8:30 a.m.), and EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open include DBI, HEPS, and TEN.  Then, after the close, there are no major reports scheduled.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported.  Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, on Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH.  Finally, on Friday, there are no reports scheduled.

So far this morning, DBA reported misses on both the top and bottom lines.  This included a significant (48%) downside earnings surprise.

With that background, all three major index ETFs opened modestly lower in the premarket. Since that point, all three have printed indecisive (largely wick) candles that are back to little-changed from their early session open. All three remain below their T-line (8ema). So, the short-term trend is bearish. At the same time, the mid-term trend is mixed at best with the QQQ now bearish. In the longer-term we still have a Bull trend with the DIA, SPY, and QQQ. In terms of extension, the 8ema has caught up and none of the three major index ETFs are too stretched below it. At the same time, the T2122 indicator is back in the lower half of its mid-range. So, markets have room to run either direction if one side or the other can find momentum. However, the Bulls have a bit more slack to play with. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, six of the 10 are in the red this morning, led again by TSLA (-0.45%). On the other side, AMZN (+0.25%) is holding up best. Oddly enough, TSLA has traded more in the premarket in terms of dollar-volume than NVDA (-0.21%), which normally has 2-5 times as much dollar-volume as the next closest ticker. So, there may be changes afoot or perhaps traders are just waiting on the CPI numbers.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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

Monday saw a gap higher and then a run up and selloff that results in not much move.  SPY gapped up 0.79%, DIA gapped up 0.70%, and gapped up 0.92%.  After that open, all three major index ETFs rallied until 10:15 a.m.  At that point, the resulting pullbacks all lasted about an hour and varied, with DIA not even pulling back to the opening level, SPY pulling back a little less than half way aback across its opening gap, and QQQ pulling back about two-thirds of its opening gap.  All three then rallied back to the highs of the day as of shortly after 1 p.m. only to pullback with DIA and SPY staying above their opening level and the more volatile QQQ dipping back into its gap.  Then all three made a modest rally the last 75 minutes of the day.  This action gave us gap-up, white-bodied, Spinning Top candles in all three major index ETFs.  SPY and QQQ were also Bullish Harami candles while DIA closed 5 cents too high to qualify as a Harami.  This happened on below-average volume in all three.

On the day, all 10 sectors were in the green with Industrials (+1.35%) and Financial Services (+1.20%) leading the way higher as Energy (+0.23% lagged behind the other sectors. At the same time, SPY gained 1.12%, DIA gained 1.13%, and QQQ gained 1.29%. VXX plummeted 6.52% to close at 52.45% and T2122 climbed out of its oversold area to the bottom part of its mid-range at 34.73.  At the same time, 10-Year bond yields fell slightly to close at 3.70% while Oil (WTI) gained 1.49% to close at $68.68 per barrel.  So, Monday was a gap-up and then undecided day that stayed on the Bullish side (with all three major index ETFs closing above their gap-up opens). On the Tech front, GOOGL (-1.46%) was the lone loser among the big dogs, but AAPL’s “Glow Day” product announcement did not help it with the stock only closing up 0.04%.  However, NVDA (+3.54%) and NVDA (+2.83%) did gain…maybe on the AI focus of AAPL’s new product offerings. 

The major economic news scheduled for Monday were limited to August NY Fed 1-Year Consumer Inflation Expectations, which stayed flat at 3.0%, and July Consumer Credit, which showed a massive jump.  July Consumer Credit came in at $25.45 billion (compared to a forecast of $12.30 billion and a June reading of 5.23 billion). 

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

In stock news, on Monday, prior to AAPL’s big iPhone refresh (this time featuring AI) a key competitor racked up a big win.  Chinese phone maker Huawei announced they had received 3 million pre-orders for their own upcoming phone refresh (this one a tri-fold, Z-shape design).  This was significant because Huawei is charging $2,800 for the new tri-fold phone and it didn’t even tell consumers when the phones would be available. Huawei just wanted to front-run AAPL by locking in orders.  At the same time, KEY announced it had sold $7 billion of low-yield assets for a loss and that they would take about a $700 million hit on the assets in Q3. Later, the CFO of C told an investor conference he expects banking fees from its Investment Banking unit to rise 20% in Q3 compared to Q3 in 2023. 

Elsewhere, SIEGY (Siemens) announced it’s spending $60 million on a new US factory (in NY?) to build high-speed trains for the Los Angeles to Las Vegas passenger route.  The plant is expected to come online in 2026 with the rail line expected to begin operation in 2028.  After the close, GS CEO Soloman told an investor conference that the bank’s trading business is performing weakly (down 10%) in Q3, especially the bond trading unit.  Also after the close, the Wall Street Journal reported that the CEO of NSC will step down amidst the internal probe into misconduct (an inappropriate relationship with employee).  Finally, as part of its earnings report, ORCL announced it had signed a deal for web services with AMZN.

In stock legal and governmental news, on Monday, BIG filed for Chapter 11 bankruptcy as expected. BIG also announced it had received $707.5 million from Nexus Capital, which will give it the money to operate while it negotiates a sale to private equity as part of the bankruptcy.  Later, the SEC announced that seven public companies had agreed to pay a combined fine of $3 million for violating whistleblower regulations.  The offending companies were TRU, ACHC, APPF, IEX, LXU, SMFL, and AKA.  At the same time, the US State Dept. approved a $133 million sale of RTX air-to-air missiles to Singapore. 

Elsewhere, the FTC trial to block the TPR acquisition of CPRI got underway Monday.   The FTC presented emails from the CPRI CEO related to several TPR products and urged the judge to block the merger on anti-trust grounds.  At the same time, X and Nippon Steel replied to the Committee on Foreign Investment in the US letter sent last week that opposed the acquisition. X and Nippon Steel claim the CFIUS letter did not seriously consider how the merger might positively impact the national security of both countries and ignores a trade agreement that indicates Japanese steel does not present a risk to the US market.  (How that relates to whether Japan owns the US competitor is unclear.) 

In miscellaneous news, the SEC approved (along party lines, over GOP-appointed board member votes) new accounting standards (actually auditing standards) that were proposed by the US Public Company Accounting Oversight Board (which was created by Congress after Enron and other accounting scandals).  The new standards were written by the PCAOB following its study found that 46% of public company audits done in 2023 did not review sufficient or appropriate evidence to provide a valid audit opinion.  (The new standards take effect in December.  However, if the disgraced GOP candidate wins, they would likely be reversed in 2025 as being too burdensome on businesses.)  Elsewhere, the FBI reported Monday that in 2023, Americans lost $5.6 billion to cryptocurrency fraud schemes (mostly crypto investment schemes).  This was a 45% increase from the amount lost to the same source in 2022. Finally oil (WTI) prices rebounded Monday as a new tropical storm entered the Gulf of Mexico. The forecast expects it to become a hurricane on Wednesday (named Francine) and oil traders are betting on at least temporary production and refining shutdowns in the US Gulf Coast area.

Overnight, Asian markets were mostly green on modest moves with just four of the 12 exchanges below break-even.  Malaysia (+0.54%), Singapore (+0.46%), and India (+0.42%) led the gains while South Korea (-0.49%) was the biggest loser.  Meanwhile, in Europe, the opposite picture is taking shape on modest moves at midday.  Just four of the 14 bourses are green with the CAC (+0.13%), DAX (-0.44%), and FTSE (-0.54%) pacing the region in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat.  The DIA implies a -0.07% open, the SPY is implying a -0.01% open, and the QQQ implies a -0.13% open at this hour.  At the same time, 10-Year bond yields are up to 3.719% and Oil (WTI) is down 1.06% to $67.98 per barrel in early trading.

The major economic news scheduled for Tuesday are limited to EIA Short-Term Energy Outlook (noon) and Weekly API Crude Oil Stocks (4:30 p.m.)  However, Fed Vice Chair for Supervision Barr does speak at 10 a.m.  The major earnings reports scheduled for before the open include ASO and CMA.  Then, after the close, PLAY, GME, and WOOF reports.

In economic news later this week, on Wednesday, we get August Core CPI, August CPI, and EIA Crude Oil Inventories.  On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported.  Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, on Wednesday, DBI, HEPS, and TEN report. On Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH.  Finally, on Friday, there are no reports scheduled.

In overnight news, the EU’s top court ruled that AAPL must pay $14.4 billion in back taxes in a case the company has dragged out since 2016.  (The case stems from AAPL using Ireland to hide revenue (taking advantage of the bribe tax rate Ireland used to lure AAPL and avoid paying taxes throughout the EU).  At the same time, the same top EU Court upheld GOOGL’s $2.4 billion fine for abusing its dominant search market position to favor its ads over competitor ad offerings.  Meanwhile, GS said it will take a $400 million pretax hit in Q3 as part of the unwinding of its consumer unit (which included the GM-brand credit card business and other loans).  Elsewhere, AZN reported disappointing lung cancer drug trial results.

With that background, all three major index ETFs opened slightly higher but have been indecisive since that point. DIA is retesting its T-line (8ema) from below while QQQ pulled back below Monday’s candle body before rebounding back up into a Butterfly Doji and SPU did something similar with a smaller move down. After these machinations, all three major index ETFs remain near the Monday close. So, the short-term trend is bearish. At the same time, the mid-term trend is mixed at best with the QQQ now bearish. In the long-term we still have a Bull trend with DIA and SPY. In terms of extension, the 8ema has caught up and none of the three major index ETFs are too stretched below it. At the same time, the T2122 indicator is back in the lower half of its mid-range. So, the market has room to run either direction if one side or the other can find momentum. However, the Bulls have a bit more slack to play with. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, 8 of the 10 are in the green this morning, led again by TSLA (+1.33%). However, AAPL (-1.02%) is by far the biggest drag on the group. So, the Bulls have control in the Tech sector again, early this morning.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 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 saw the Bears in control early and then a drift sideways all afternoon.  SPY opened 0.05% higher, DIA opened up 0.13%, and QQQ gapped down 0.20%.  At that point, QQQ led the way by selling off sharply until 11 a.m. and then more modestly for another 60 minutes.  SPY followed through to the upside for 5 minutes before following QQQ in a sharp selloff until 11 a.m. and then more modestly for an hour.  Meanwhile, after the open, DIA rallied for 20 minutes before it too followed QQQ by sharply selling until 11 a.m. and then more modestly until noon. At that point, all the air went out of the market, with all three trading sideways in a very tight range the rest of the day.  On the day, SPY and DIA retested their T-line (8ema) and failed that test.  SPY also tested and crossed below its 50sma.  This action gave us large black-body candles dropping well below the consolidations in SPY and QQQ.  This action took place on average volume in the SPY and QQQ as well as slightly below-average volume in DIA.

On the day, all 10 sectors were in the red with Technology (-2.56%) way out in front of the other sectors, leading the way lower.  On the other side, Consumer Defensive (-0.46%) and Communication Services (-0.48%) held up better than the other sectors. At the same time, SPY dropped 1.68%, DIA fell 0.98%, and QQQ dropped 2.68%. VXX popped 7.41% to close at 56.11% and T2122 dropped into the middle of its oversold territory at 10.65.  At the same time, 10-Year bond yields fell again to close at 3.716% while Oil (WTI) dropped 1.43% to close at $68.16 per barrel on demand concerns.  So, Friday a big drop, led by the TSLA (-8.45%), NVDA (-4.09%), GOOGL (-4.02%), AMZN (-3.65%), and AMD (-3.65%).  (AVGO also lost 10.35% on very heavy volume after its beat on both lines and modest forecast increase did not meet market expectations.) 

The major economic news scheduled for Friday included August Avg. Hourly Earnings, which were better than expected at +0.4% (compared to a forecast of +0.3% and July’s -0.1%).  On an annual basis, August Avg. Hourly Earnings were up 3.8% (versus a 3.7% forecast and up from July’s 3.6% reading).  At the same time, August Nonfarm Payrolls were up 142k (compared to a +164k forecast but much stronger than July’s +89k).  On the private side, August Private Nonfarm Payrolls were up 118k (versus a forecast of +139k but up strongly from July’s +74k value).  The August Participation Rate remained steady at 62.7% (with July’s reading also being 62.7%).  This led to a August Unemployment Rate of 4.2% (compared to a 4.2% forecast and down a tick from July’s 4.3% reading). 

In Fed news, on Friday, New York Fed President Williams indicated that the time has come for rate cuts.  Williams said, “With the economy now in equipoise and inflation on a path to 2%, it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate.”  However, he did hedge his bets, saying “The stance of monetary policy can be moved to a more neutral setting over time depending on the evolution of the data, the outlook, and the risks to achieving our objectives.”  He concluded, “It’s pretty clear we’re going to need over time to get interest rates back to a more normal level. The problem with that statement is I’m not sure what that more normal level is and I’m not sure at all about how long that should take.”  Later, Fed Governor Waller agreed with Williams, saying “The time has come (for the Fed to begin rate cuts).”  He continued, “If the data supports cuts at consecutive meetings, then I believe it will be appropriate to cut at consecutive meetings.”  Waller also opened the door to larger cuts, saying “If the data suggests the need for larger cuts, then I will support that as well. I was a big advocate of front-loading rate hikes when inflation accelerated in 2022, and I will be an advocate of front-loading rate cuts if that is appropriate.”

In stock news, on Friday, BAC analysts reported research showing that GOOGL’s share of the internet search market increased in August, helped by its integration of AI.  The report said, GGOL has 90.5% of the search market globally, but “only” 87.9% in the US.  At the same time, Reuters reported (and the French company confirmed) that French fir Elis had made an acquisition offer to VSTS.  Later, Reuters exclusively reported that QCOM has explored the possibility of acquiring portions of INTC’s chip design business.  At the same time, activist investor hedge fund Starboard Value filed a shareholder resolution to end NWSA’s “dual-class shares” in a bid to oust Rupert Murdoch from his control of the company.  After the close, S&P announced that DELL, PLTR, and ERIE will join the S&P500 before the open on September 23.  (These will replace AAL, ETSY, and BIO, which will be dropped from the index at the same time.)  Later, TSM announced they have achieved production yields on par with Taiwanese plants at their AZ plant. This likely means that 4nm plant is on track to achieving output goals after the initial startup in April.

Meanwhile, on Saturday, the Financial Times reported that AAPL’s new iPhone (to be announced on Monday) will use ARM chips for AI technologies.  Later, STLA recalled 1.46 million vehicles worldwide, including 1.23 million in the US, due to software malfunction in the anti-lock brake system that can increase the risk of crashes.  At the same time BA’s Starliner capsule was able to make it back to earth, parachuting into the NM desert.  (It will now be shipped to FL, where it will be examined to discover what parts failed.)  In other BA news, Sunday BA announced a it has a tentative deal with a union covering 32,000 of its workers in the US Pacific Northwest. (The deal calls for a 25% wage increase over four years, a commitment to build its next commercial aircraft in that area, 12 weeks paid parental leave, and improved retirement benefits among other things.)  At the same time, ANCTF (owner of the Circle-K convenience stores) plans to make a second offer to SVNDF (owner of the 7-eleven convenience stores) according to Bloomberg. (The first offer, of $38.6 billion, was rejected at the end of last week.) Later, CNBC reported that the CEO of NSC is being investigated by the company board over engaging in an inappropriate workplace relationship.

In stock legal and governmental news, on Friday, a federal judge rejected a COIN motion to dismiss a shareholder class action suit alleging the company had played down the risk of being sued by the SEC (for buying/selling crypto being securities).  So, the shareholder suit will continue.  At the same time, the SEC fined Esmark and its Chairman for making a “false tender offer” to acquire X at $35 per share.  (The suit alleges the tender offer was made even though Esmark had no financing in place to execute on the offer, which would have required $7.8 billion in cash.)  Later, MA state security regulators fined MS $2 million for failing to monitor insider trading by FRCB prior to the bank failing.  (MS managed the stock sales of FRCB and the small bank’s Chair was allowed to execute stock sales prior to material nonpublic information being released to the market.)  At the same time, the US State Dept. approved the sale of $691 million of RTX Sidewinder missiles to the Netherlands. 

Elsewhere, a bi-partisan group of Congressman and Senators launched an inquiry into six US retailers (including AZO and AAP) over whether they bought Chinese auto parts and evaded tariffs by trans-shipping the cargoes through Thailand.  After the close Friday, Bloomberg reported that BIG is preparing to file for bankruptcy under chapter 11.  (This comes after the company postponed earnings from Sept. 6 to Sept. 12.) Friday evening, the US Federal Energy Regulatory Commission (FERC) approved BLK’s $12.5 billion (cash and stock) deal to acquire Global Infrastructure Partners (which owns many assets in the utility space).  Then, on Saturday, as part of a money laundering case, WYNN agreed to pay $130 million to the SEC and admit that it let unlicensed money transfers from around the world funnel gambler money to its flagship Las Vegas casino. This was part of a Dept. of Justice “Non-prosecution settlement.”  Finally, on Sunday, DirecTV filed an FCC complaint against DIS for anti-competitive practices and failing to negotiate in good faith.  DIS was requiring DirecTV to take an pay for less popular channels in order to distribute ESPN, while DIS offers “skinnier” bundles direct to the public.

Overnight, Asian markets were mixed but leaned toward the red side.  Singapore (+1.22%) was the outlier of four gaining exchanges.  Meanwhile, Hong Kong (-1.42%), Taiwan (-1.36%), and Shanghai (-1.06%) paced the losses.  In Europe, we see nearly green across the board at midday with only Greece (-0.26%) in the red among the 14 bourses.  The CAC (+0.84%), DAX (+0.75%), and FTSE (+0.75%) lead the region higher in early afternoon trade.  In the US, as of 7:45 a.m., Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.68% open, the SPY is implying a +0.70% open, and the QQQ implies a +0.81% open at this hour.  At the same time, 10-Year bond yields are back up to 3.746% and Oil (WTI) is up 0.78% to $68.20 per barrel in early trading.

The major economic news scheduled for Monday are limited to August NY Fed 1-Year Consumer Inflation Expectations (11 a.m.) and July Consumer Credit (3 p.m.).  There are no major earnings reports scheduled for before the open. However, after the close, ORCL reports.

In economic news later this week, on Tuesday the Weekly API Crude Oil Stocks are reported.  Then Wednesday, we get August Core CPI, August CPI, and EIA Crude Oil Inventories.  On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core PPI, August PPI, WASDE Ag report, August Federal Budget Balance, and the Fed Balance Sheet are reported.  Finally, on Friday, we get August Export Price Index, August Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, on Tuesday, we hear from ASO, CMA, PLAY, GME, and WOOF. Then Wednesday, DBI, HEPS, and TEN report. On Thursday, we hear from BIG, CAL, KR, SIG, ABDE, and RH.  Finally, on Friday, there are no reports scheduled.

So far this morning, there are no significant earnings reports.

With that background, it looks as if the Bulls are indecisively in control this morning. All three major index ETFs gapped higher to start the premarket. Since then, all three have given us indecisive, small-body and plenty of wick candles. Despite the gap higher, all three remain below their 8ema. So, the short-term trend is bearish. At the same time, the mid-term trend is mixed with the QQQ now bearish and in the long-term we still have a Bull trend with DIA and SPY. In terms of extension, QQQ remains a bit stretched below its T-line and SPY pushed toward joining it Friday. However DIA remains close enough to the 8ema. On the other hand, the T2122 indicator is back in the middle of its oversold range. So, the market is not “crazy extended” but at least the QQQ will need a pause, bounce, or reversal soon to avoid becoming out of whack in its decline. Just remember the mantra “follow, don’t lead, but also don’t chase” in mind. With regard to those 10 big dog tickers, all 10 are in the green this morning, led by TSLA (+1.94%). However, five of the 10 are up more than a percent and the laggard is AAPL (+0.29%). So the Bulls are in control in the Tech sector this morning.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 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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