Nasdaq-100 futures climbed, as the one stock to rule them all inspired optimism after Nvidia’s latest report. The tech-heavy index saw futures leap higher by 0.9%. Concurrently, S&P 500 futures also experienced a notable increase, adding 0.5% to the board. Meanwhile, the Dow Jones Industrial Average futures experienced a modest uptick this morning.
European markets trade bullishly Thursday morning, as traders processed the insights from the latest U.S. Federal Reserve meeting. The pan-European Stoxx 600 index saw a slight increase of 0.2% by 11:18 a.m. in London. Sector performance was mixed, with technology stocks leading the gains by 1.2%, bolstered by Nvidia’s announcement. On the other hand, utilities faced a downturn, falling by 2.25%.
Asia-Pacific stock markets displayed a mixed performance following the release of the U.S. Federal Reserve meeting minutes. The Hang Seng index in Hong Kong felt the brunt of the unease, dropping 1.77% and leading the losses across the region. Similarly, China’s CSI 300 index fell by 1.16% In contrast, Japan’s Nikkei 225 bucked the trend with a 1.26% rise, finishing at 39,103.22, while the broader Topix index also saw gains, up 0.64% to 2,754.75. South Korea’s central bank maintained its benchmark policy rate steady at 3.5%.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include BJ, DAVA, HLNE, BEKE, MDT, MNRO, NTES, RL, SCVL, TITN, TGI, & WB. After the bell include INTU, LGF.A, ROST, STEP, & WDAY.
News & Technicals’
Jamie Dimon, the Chairman and CEO of JPMorgan Chase, has expressed concerns over the economic trajectory of the U.S., suggesting that a “hard landing” is a possibility that cannot be dismissed. Addressing attendees at the JPMorgan Global China Summit in Shanghai, Dimon conveyed to CNBC the potential for a “stagflation” scenario in the U.S. economy. This situation, characterized by sustained high inflation coupled with stagnant growth and elevated unemployment rates, represents a challenging economic condition. Furthermore, Dimon indicated that despite these concerns, there is still room for interest rates to increase marginally. His insights underscore the complex economic landscape and the delicate balance policymakers must maintain to navigate through such uncertainties.
E.l.f. Beauty has achieved a significant milestone, marking its first fiscal year with over $1 billion in sales, an impressive 77% growth. This remarkable performance has surpassed Wall Street’s expectations, setting a high bar for the company. However, E.l.f. Beauty is tempering expectations for the current fiscal year, projecting a moderation in its growth trajectory that is anticipated to fall short of analysts’ predictions. This cautious outlook follows a warning from Ulta Beauty’s CEO, Dave Kimbell, about a deceleration in the beauty sector. E.l.f.’s results reflect both the company’s resilience and the broader industry’s challenges in maintaining growth momentum.
Pfizer, the pharmaceutical behemoth, is embarking on a strategic initiative to streamline costs over the coming years, aiming to mitigate the sharp downturn in its Covid-related business segments. This new cost-reduction program is set to complement an existing $4 billion austerity measure, which was put in place in response to the waning demand for Pfizer’s Covid vaccine and the oral antiviral medication, Paxlovid. According to a recent securities filing, the company has outlined that the initial phase of this program will concentrate on enhancing operational efficiencies. Pfizer anticipates that these efforts will culminate in substantial savings, projecting around $1.5 billion in cost reductions by the conclusion of 2027.
The higher for longer theme of the FOMC roused the bears, however, NVDA quickly changed the sentiment becoming the one stock that that rules them all! That said, caution is advised as the market’s initial exuberance this morning could face volatility in response to reactions to the economic reports.
On Tuesday, markets started off flat and mixed. SPY opened down 0.13%, DIA started up 0.03%, while QQQ gapped down 0.44%. At that point, all three major index ETFs drifted higher, slowly until 11:25 a.m. From there, all three meandered sideways in a tight range until 1:25 p.m. when all three started a very slight uptrend that lasted the rest of the day. This gave us white body candles in all three major index ETFs. The QQQ was a Marubozu (Shaved Head) while SPY nearly did the same but ended up wit small wicks at both ends. However, DIA ended up a white-bodied Spinning Top Bull Harami candle. Both SPY and QQQ gave us new all-time high closes, but only QQQ printed an actual new all-time high. Of course, that means all three major index ETFs also remain well above their T-line (8ema).
On the day, seven of the 10 sectors were in the red with Communications Services (-0.52%) leading the majority lower. At the same time, Utilities (+0.75%) was out in front leading the green sectors higher. Meanwhile, SPY gained 0.25%, DIA gained 0.17%, and QQQ gained 0.20%. VXX fell 1.67% to close at very low 11.19 and T2122 fell back further into its mid-range at 68.42. In other markets, 10-year bond yields fell to 4.414% and Oil (WTI) fell 0.93% to close at $79.06 per barrel. So, overall, Tuesday was another day of consolidation. While SPY and QQQ did print new all-time high closes, most of the day was spent inside the prior candle body. All of the gains were also a quarter percent or less. This consolidation can also be seen in the pullback of T2122. The bottom line is that despite the green on the board, markets were basically resting. Once again, this all happened on well below-average volume across all three major index ETFs.
The major economic news scheduled for Tuesday was limited to API Weekly Crude Oil Stocks, which showed an unexpected increase of 2.480 million barrels. This should be compared to a forecast calling for a 3.100-million-barrel drawdown, which was also the prior week’s reading.)
In Fed news, on Fed Governor Waller indicated he didn’t see a rate hike in the cards and believes inflation has begun slowing again. However, he also said the economy is far from ready to support a rate cut. Waller said, “Central bankers should never say never, but the data suggests that inflation isn’t accelerating, and I believe that further increases in the policy rate are probably unnecessary.” He continued, “The economy now seems to be evolving closer to what the Committee expected. Nevertheless, in the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing.” At the same time, Atlanta Fed President Bostic made a similar point, saying it’s better to wait than bounce around with rate hikes and cuts. Bostic said, “It is in our interest to not start bouncing around … For me, I’d rather wait longer to make sure that doesn’t happen.” He continued, “We need to make sure that when we start on that path (rate cuts), it’s unambiguous that inflation is going to get to 2% … and it may mean that it has to happen later.” Later, Fed Vice Chair Barr reiterated Bostic’s point, saying “For me at least, that means we need to sit tight where we are for longer than we had previously thought … we need to see more evidence of continued progress on inflation for us to be in a position where we could think about adjusting the policy rate.” After the close, Cleveland Fed President Mester said she is expecting to see “above trend” economic growth in 2024. That being the case, she said, “Keeping rates restrictive is not a big risk, especially given the strength of the jobs market.” She also said that the current Fed rate “policy is well positioned, we’ll need to monitor data.”
After the close, URBN reported a beat on both revenue and earnings. Meanwhile, MOD, TOL, VSAT, and XP all beat on revenue while missing on earnings. However, SKY missed on both the top and bottom lines.
In stock news, on Tuesday, Bloomberg reported that both TSM and ASML have tools built into the chip-making technology they have sold China over the years that would allow the companies to remotely disable that equipment if China ever invaded Taiwan. At the same time, despite Reuters reports, SPT announced it has no plans to sell or take the company private. (SPT was down almost 9% on the news, but rebounded to close the day down 2.39%.) Later, HOOD announced it is lowering the interest rate it charges on margin loans. The new rates will be from 5.70% to 6.75% (depending on the amount borrowed) which is down sharply from the previous 8% (for its premium subscribers) to 12% HOOD had been charging. At the same time, AMZN announced it had NOT halted any orders of NVDA’s AI chips. However, it has decided to convert some of the unfilled orders to NVDA’s newer units announced in March. This statement was released in response to a Financial Times report claiming that AMZN had halted orders for NVDA gpus. Later, NSANY announced that is has paused development of two EV sedans, while expanding its EV lineup to five vehicles by adding a crossover SUV. At the same time, DIS announced it will lay off 175 people from its Pixar Studios subsidiary (14% of that unit’s workforce) as it scales back development of original streaming series.
Elsewhere, PEP announced it will expand its CA fleet of electric vehicles by deploying 50 new with TSLA semi-trucks. In addition, PEP will also deploy 75 F E-Transit electric vans at its CA plants over the next few months. At the same time, CMCSA announced it will price a bundle including its Peacock service, NFLX, and AAPL’s TV+ services for $15 per month. Later, GE announced it will hire 900 new engineers for its Aerospace unit to support current and new aircraft engine programs. At the same time, GOOGL announced it will start testing the addition of ads to its AI answers. This comes just days after GOOGL announced the AI Overview service. Later, MSFT touted new tools aimed at helping programmers build AI-focused systems at its developer conference. At the same time, SNY announced it has partnered with OpenAI to boost development of drugs using AI technologies.
In stock legal and governmental news, Tuesday the SEC began an “informal inquiry” into GL after recent allegations by short sellers. (GL fell 3.12% on the day on that news.) Later, TM asked TX for tax relief prior to deciding whether to invest $531.7 million in expansion of its San Antonio plant. At the same time, CA’s top state court announced Tuesday that it will hear a case brought by a labor union challenging a CA ballot measure allowing all “App-based services” to treat their drivers as contractors. Later, HES said on Tuesday that it is facing three shareholder lawsuits alleging it made inadequate disclosures related to its proposed sale to CVX. At the same time, a federal appeals court unanimously ruled AAL must face a lawsuit brought by its pilots over the airline’s failure to pay them for short-term military leave. Later, AAPL filed a motion asking a US judge to dismiss the antitrust lawsuit filed by the US Dept. of Justice and 15 states.
Elsewhere, the US Labor Dept. announced that CAT agreed to pay $800k to resolve allegations of hiring discrimination against black applicants at an IL plant. In addition, CAT will offer jobs to 34 applicants previously not hired due to the discriminatory system the company had in place. At the same time, a whistleblower (former Vice President) has sued BLK over his firing after he objected to a colleagues self-dealing. The suit also alleges the whistleblower was forced to shut down a system he had developed for monitoring discussions with clients about illegal investments in China. At the same time, BASFY (BASF Chemicals) announced it has agreed to pay $316.5 million in a settlement with some US public water systems over PFAS (forever chemicals) contained in the company’s firefighting foam that polluted water supplies.
Overnight, Asian markets were mixed but leaned toward the red side. Japan (-0.85%) was by far the biggest loser (of the seven red exchanges) while Taiwan (+1.48%) was by far the biggest gainer of the five green exchanges. In Europe, the picture is even more red at midday with only two green bourses (out of 15). The CAC (-0.62%), DAX (-0.29%), and FTSE (-0.38%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed and modest start to the day. The DIA implies a -0.17% open, the SPY is implying a -0.11% open, but the QQQ implies a +0.05% open at this hour. At the same time, 10-year bond yields are up to 4.457% and Oil (WTI) is off three-fourths of a percent to $78.06 per barrel in early trading.
The major economic news scheduled for Wednesday includes April Existing Home Sales (10 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), and FOMC Meeting Minutes (2 p.m.). The major earnings reports scheduled for before the open is limited to ADI, DY, GOGL, HOV, WOOF, PDD, TGT, VIPS, and WSM. Then, after the close, BBAR, SQM, ENS, PLUS, SUPV, NVDA, SNOW, SNPS, TBBB, and VFC report.
In economic news later this week, on Thursday, we get Building Permits, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, April New Home Sales, Fed Balance Sheet. Fed member Bostic also speaks again. Finally, on Friday, April Core Durable Goods, April Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations are reported and Fed member Waller speaks.
In terms of earnings reports later this week, on Thursday, we hear from ATAT, BILI, BJ, BEKE, MDT, NTES, PSNY, RL, TD, TITN, CVCO, DECK, INTU, ROST, and WDAY. Finally, on Friday, BAH reports.
So far this morning, ADI, DY, WOOF, PDD, and TJX reported beats on both revenue and earnings. Meanwhile, GOGL and VIPS missed on revenue while beating on earnings. On the other side, TGT beat on revenue while missing on earnings. It is worth noting that ADI, DY, and WOOF raised forward guidance. However, VIPS cut its guidance.
In miscellaneous news, the Dept. of Energy announced it will sell 1 million barrels of gasoline (not oil) from strategic reserves in the Northeast. The sale will happen between Memorial Day and July 4. Energy Sec. Granholm said the move was times to maximize the impact on gasoline prices. However, the underlying reason or excuse is the closing of a Portland ME storage facility. Elsewhere, the Fed released a report Tuesday summarizing its October 2023 annual survey results. The survey found that inflation was pinching Americans in 2023. 72% of respondents said they were doing “okay or good” financially in October 2023. This was down from 78% in October 2021. Meanwhile, Germany reversed course and said that it now agrees with the US plan to use frozen Russian assets to fund an additional $50 billion aid package for Ukraine. (A considerable chunk of that money will likely go to US defense manufacturers such as LMT, RTX, LHX, GD, NOC, and HII.
As a reminder, remember that Monday is a holiday and markets will be closed. Finally, also make note the US securities market will begin its 1-day trade settlement (called “T+1”) down from the current 3-day settlement next week. This change begins Tuesday, May 28. (Also note that some analysts are nervous over the stress on the system of clearinghouses and brokerages.)
With that background, it looks as if markets are giving us a mixed but mostly indecisive start to the day. The DIA is the most decisive (and most bearish) of the three major index ETFs in premarket. However, it remains above its T-line (8ema). Meanwhile, QQQ is giving us a Harami Doji candle at the top of yesterday’s candle body while SPY prints a small bearish Harami in the early session. Again, both of the latter two are also well above their T-line. All three also remain at new or very near the all-time highs. So, the short-term trend remains very bullish. Meanwhile, the mid-term is also bullish and the longer-term market remains very Bullish as all three major index ETFs have returned to “fresh air” with no overhead resistance. In terms of extension, only QQQ is clos eto what can be called over-extended above the T-line. However, more rest is probably needed in all three. The T2122 indicator pulled further into its mid-range. So, both sides have at least a little room to run if they can find the momentum. With that said, very low volumes recently tend to indicate that traders are waiting on the NVDA report before pressing any bets. With regard to those 10 big dog tickers, six of the 10 are in the red at this point this morning with that biggest dog NVDA (-0.04%) just on the red side of flat and not really giving a clue. TSLA (-1.98%), the second biggest dog, is leading the losses this morning.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
U.S. stock futures retreat slightly on Wednesday, with investors’ attention focused on Nvidia. The Dow Jones Industrial Average futures saw a modest decrease, dipping by 36 points, which translates to a 0.1% drop. The S&P 500 and Nasdaq 100 similarly edged down by 0.1%.
European markets experienced a bearish start on Wednesday. The pan-European Stoxx 600 index declined by 0.36% as of 10:18 a.m. London time, mirroring a broader trend of apprehension as most major bourses and sectors saw red. The automotive sector was particularly hard hit, dropping by 1.83%, while oil and gas stocks also saw a significant decrease of 1.04%.
Asia-Pacific stocks were mostly lower on Wednesday. Mainland China emerged as the outlier, with its stocks climbing against the regional downtrend. This divergence came on the heels of fresh economic data from Japan. Japan’s Nikkei 225 index fell by 0.85% to 38,617.1. South Korea’s Kospi index barely moved, edging down by 0.03% to 2,723.46, and Hong Kong’s Hang Seng index dipped by 0.2% as trading wrapped up.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include ADI, BRC, LPG, DY, GDS, KC, TGT, WOOF, PLAB, TJX, VIPS, & WSM. After the bell include NVDA, ENS, RAMP, SNOW, SQM, SNPS, VFC, & ZUO.
News & Technicals’
The Biden administration announced a significant step towards alleviating the financial strain of education debt on Wednesday, committing to the forgiveness of $7.7 billion in student loans. This sweeping measure will benefit over 160,000 borrowers, marking a substantial move in the government’s ongoing efforts to address the student debt crisis. The decision stems from the U.S. Department of Education’s recent enhancements to its income-driven repayment schemes and the Public Service Loan Forgiveness program. These improvements are designed to provide much-needed relief to borrowers, ensuring a more manageable repayment process and a clearer path towards financial freedom for those weighed down by educational loans.
The U.S. Department of Energy is strategically timing the release of gasoline reserves to coincide with the summer season, aiming to optimize the effect on fuel prices during a period of high demand. This initiative will see gasoline being distributed via a competitive bidding process, targeting retailers and terminals as the primary recipients. The backdrop to this move is a significant 19% rally in gasoline futures over the current year, propelled by escalating crude oil prices. This surge is largely attributed to OPEC’s production cuts and the looming anxiety over potential conflict escalation in the Middle East, factors that have injected volatility into the energy markets and heightened concerns over energy security and pricing stability.
In the United Kingdom, the inflation rate took a downward turn in April, settling at 2.3%, as reported by the Office for National Statistics on Wednesday. This figure inches closer to the Bank of England’s target rate, signaling a potential easing of the cost-of-living pressures. Despite this, the actual inflation rate fell short of the anticipated forecasts. Meanwhile, the core inflation rate, which strips out volatile components such as energy, food, alcohol, and tobacco, also saw a reduction, dropping to 3.9% from March’s 4.2%. This decline in core inflation suggests a softening in the underlying inflationary trends, providing a glimmer of hope for a more stable economic environment in the coming months.
The current discourse on inflation in the U.S. is marked by a sense of uncertainty among Federal Reserve officials, according to Julian Howard of GAM, as reported by CNBC. Despite recent data, policymakers continue to express concerns that inflation rates are persistently high and have not decreased as much as anticipated. This has led to a cautious stance on adjusting interest rates, with officials advocating for patience. Howard’s remarks underscore the inherent challenges in forecasting inflation, suggesting that even those at the helm of monetary policy are grappling with understanding the full scope and trajectory of inflationary trends.
Although Target numbers disappointed this morning the market will be heavily focused on Nvidia hoping the tech giant can keep the tech rally going. With a few more notable earnings and economic reports that include the FOMC minutes plan for an extra dose of price volatility.
On Tuesday, U.S. stock futures displayed a muted response as the Feds higher for longer theme continued in Monday speeches. The futures tied to the Nasdaq-100 saw a slight dip, decreasing by approximately 0.1%. In a similar vein, the futures for the Dow Jones Industrial Average exhibited a fractional decline, a sentiment echoed by the S&P 500 futures.
The bears made in entrance as Hong Kong’s Hang Seng index emerged as the biggest loser among Asia-Pacific markets on Tuesday, with a sharp decline of more than 2%. The drop was primarily driven by a slump in the basic materials and industrials sectors. Concurrently, the CSI300 index in mainland China experienced a modest fall of 0.4%, closing at 3,676.16.
European markets experienced a modest downturn on Tuesday morning. The Stoxx 600 index, a key benchmark for European equities, was down by 0.36% as of 10 a.m. London time, indicating a broad-based decline across sectors. Initially, all sectors were bathed in red, signaling a market-wide retreat. However, a glimmer of resilience was observed in the health-care sector, which managed a modest uptick of 0.1%.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include AZO, EXP, JHX, LOW, & M. After the bell include MOD, SKY, TOL, URBN, & VSAT.
News & Technicals’
In the first quarter, Lowe’s Companies Inc. surpassed Wall Street forecasts for both earnings and revenue, signaling a robust start to the fiscal year despite a downturn in sales compared to the previous year. The company noted a shift in consumer behavior, with do-it-yourself (DIY) customers showing a reluctance to spend on high-ticket items, a trend that may reflect broader economic sentiments. This performance comes in stark contrast to Lowe’s main competitor, Home Depot, which recently reported a shortfall in revenue, highlighting the competitive dynamics within the home improvement retail sector. Lowe’s ability to exceed expectations amidst a challenging market environment underscores its strategic focus and operational resilience.
A significant incident occurred at Tesla’s vehicle assembly plant in Fremont, California, where a two-alarm fire erupted late Monday afternoon. The Fremont Fire Department swiftly responded to the emergency, and fortunately, there were no injuries reported. The fire, which demanded an intense response from the firefighters, was successfully subdued within three hours, allowing the emergency teams to be released from the scene. Investigations are currently underway to determine the cause of the fire. Meanwhile, local air quality regulators have acknowledged the incident and are actively evaluating the potential impact on the environment. This event underscores the importance of stringent safety measures and rapid emergency response protocols in industrial settings.
Scarlett Johansson has leveled a serious accusation against OpenAI, claiming that her distinctive voice was duplicated without her consent for the ChatGPT AI’s new voice feature, “Sky.” Johansson expressed her astonishment and frustration, stating that the similarity was so profound that even those closest to her and various media outlets were deceived. Despite being contacted by OpenAI’s CEO, Sam Altman, in the previous year and shortly before the recent launch of ChatGPT4.O, Johansson maintains that her voice was used without her permission. Altman, however, has categorically denied these claims, emphasizing that “Sky’s” voice was not modeled after Johansson’s and any resemblance was unintentional.
Peloton, the connected fitness company, has initiated a strategic maneuver termed “global refinancing” to restructure its financial obligations. This move is aimed at repurchasing its existing debt and prolonging the maturity dates of its loans, providing the company with a more manageable timeline to stabilize its finances. As part of this effort, Peloton is venturing into the private capital market with an offering of $275 million in convertible senior notes. This financial reshuffling comes at a critical time when Peloton is grappling with a deceleration in sales and a balance sheet that reflects significant losses. The refinancing is a pivotal step for Peloton as it seeks to regain its footing and chart a path towards long-term profitability.
Today with higher for longer speeches are likely to continue with eight Fed member speeches scheduled just the day before the FOMC minutes on Wednesday. Of course anything is possible with the highly anticipated NVDA earnings after the bell on Thursday.
Markets opened mixed and flat on Monday. SPY and QQQ both opened 0.02% higher while DIA opened down 0.08%. At that point, SPY and QQQ followed through rallying for 30 minutes. From there QQQ traded sideways the rest of the day. SPY traded the same way until 11:45 a.m., sold off slowly until 2 p.m. and then traded sideways just above the open the rest of the day. Meanwhile, DIA did not begin its rally until 10 a.m. reaching the highs of the day about 11:40 a.m. and the it too sold off until 2 p.m. more than recrossing the open gap and then trading sideways at the lows from 2 p.m. into the close. This action gave us a large, white-bodied candle in the QQQ that gave us both a new all-time high and a new all-time high close. At the same time, SPY printed a white-body Inverted Hammer candle that could easily be seen as a Tweezer Double Top along with Thursday’s candle. However, DIA gave us a black-bodied, high wick candle that did not quite make it to the all-time high (Thursday) and closed below Friday’s low. All three major index ETFs also remain well above their T-line (8ema).
On the day, five of the 10 sectors were in the green with Technology (+0.89%) leading the green half higher. At the same time, Financial Services (-0.70%) and Consumer Defensive (-0.69%) were way out front leading the red sectors lower. Meanwhile, SPY gained 0.12%, DIA lost 0.46%, and QQQ gained 0.70%. VXX gained very slightly to close at 11.38 and T2122 dropped a bit, falling just outside of its overbought territory to close at 79.01. At the same time, 10-year bond yields rose to 4.445% and Oil (WTI) fell half of a percent to close at $79.67 per barrel. So, Monday was a day of divergence with the Dow 30 moving lower, QQQ driving higher, and SPY in the middle just on the green side of flat. This all happened on well below-average volume across all three major index ETFs.
There was no major economic news scheduled for Monday.
In Fed news, on Monday, Atlanta Fed President Bostic told Bloomberg that interest rates are likely to stay above the levels of the past decade. Bostic said he expects inflation to fall throughout the rest of 2024 and 2025. However, the labor market (while weaker than it was a year ago) “is not soft” and will force the Fed to keep rates higher for longer. Later, Vice Chair Barr said, “Inflation readings in the first quarter of this year were disappointing. These results did not provide me with the increased confidence that I was hoping to find to support easing monetary policy.” He continued, “We will need to allow our restrictive policy some further time to continue its work.” At the same time, Fed Vice Chair Jefferson told a NY audience that it is too early to tell if the slowdown in the disinflationary process will be long lasting. He went on to say the Fed viewed determining whether it will be long lasting or if inflation will resume its decline as a necessary precondition for the Fed to start cutting rates. Meanwhile, Cleveland Fed President Mester told Bloomberg that she also believes inflation will continue to fall the rest of this year, although more slowly than she had been expecting. In an article published Monday afternoon, San Francisco Fed President Daly reiterated that she sees no evidence of the need for rate hikes. However, Daly was also quoted as saying that at the same time she is “not confident” is falling to 2%. So, she also sees no need to cut rates yet.
On another topic, Vice Chair Barr said the Fed was reconsidering how much liquidity banks should be made to keep on hand. He was quick to point out that these “adjustments” were targeted at larger banks and that by increasing he amount they must hold at the Fed Discount Window it would increase the capital available for the Fed to act as “the buyer of last resort” for smaller banks that may fail. (No timetable or specifics on the “adjustments” was mentioned.)
After the close, KEYS, PANW, TCOM, and ZM all reported beats on both the revenue and the earnings line. Meanwhile, NDSN and JHX missed on revenue while beating on earnings. It is also worth noting that KEYS and NDSN lowered forward guidance while ZM raised its guidance.
In stock news, on Monday, GOOGL announced it has invested $1.1 billion into the expansion of its Finnish data center, aimed at driving growth of its AI business unit in Europe. At the same time, AAPL slashed its iPhone prices in China (offering up to $318 in discounts on some models) amidst fierce competition from Huawei. Later, MSFT introduced a new category of personal computer with AI features. It calls this new line of PCs “CoPilot+” and the initial launch came from OEM computer makers Acer and Asustek. At the same time, Reuters reported that Soroban Capital Partner has taken a $500 million position in JCI. This news came after Sunday’s revelation that Elliott Investment Mgmt. had taken more than a $1 billion position in JCI. (The motives and timing behind the moves are not known.) Later, SSB announced it will buy smaller rival bank IBTX for roughly $2 billion, creating a combined bank with $65 billion in total assets. At the same time, TGT announced it has cut prices on 5,000 items in an attempt to lure back inflation-drained shoppers. The reductions will take place over the course of the summer. Meanwhile, Bloomberg reported that HIMS is taking on the Big Pharma giants by offering a generic version of the same active ingredient in the how weight loss drugs from LLY and NVO. This $199/month product undercuts the pharma giants by as much as 85%.
In stock legal and governmental news, on Monday the NHTSA announced it opened an investigation into 51,500 electric vehicles from VLKAF (Volkswagen) over concerns of the door opening while the cars were driving. At the same time, NHTSA also closed its probe into more than 100k TSLA Model X after the company issued a recall to fix a front seat belt problem (failure due to faulty bolt installation). Later, the US Senate Finance Committee issued a report alleging that BMWYY (BMW) imported at least 8,000 Mini Cooper cars which contained parts from a banned Chinese supplier. BMWYY said it had halted import and will conduct service action to remove and replace the electronic components in question. At the same time, an independent lab from CT sued GSK, alleging the drugmaker had defrauded the US government and taxpayers by concealing the cancer risks of Zantac for nearly four decades. (The lab found during testing in 2019 the Zantac forms a cancer-causing compound and is unfit for human consumption. The lawsuit alleges GSK found the same thing in 1983 and has suppressed that finding from the FDA, Medicare, Medicaid, and other agencies.
Elsewhere, the NHTSA announced Monday it is investigate a VFS electric vehicle crash in late April which killed a family of four. Meanwhile, DJT disclosed that it had been cooperating with a FINRA investigation related to the company’s “blank check merger.” After the close, a trade group representing nearly all automakers filed its support of two key parts of the recent EPA emissions rules. The group said automakers support the EPA plan to include electric vehicles in fleetwide average emissions calculations and also in excluding upstream emissions, such as emissions from manufacturing plants, from those calculations. (The new rules have been challenged by a lawsuit from 25 GOP-led states while 22 states and five major cities support the new rules. The rules call for a 49% cut in fleetwide average emissions between 2026 and 2032. This was watered down from the originally proposed 56% cut over that period after carmaker pushback.) Also after the close, the same conservative legal activist group behind myriad DEI lawsuits, filed another suit, this time suing LUV over a two-decade old program that awarded free round-trip flights to certain Hispanic college students.
Overnight, Asian markets were nearly red across the board. Only India (+0.12%) was able to hang onto green territory. Meanwhile, Hong Kong (-2.12%) was BY FAR (by 1.5%) the biggest loser as Chinese Real Estate support measures disappointed. In Europe, we see a similar picture taking shape with only one of 15 bourses in the green while the CAC (-0.99%), DAX (-0.40%), and FTSE (-0.37%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed and flat start to the day. The DIA implies a +0.02% open, the SPY is implying a +0.03% open, and the QQQ implies a -0.06% open at this hour. At the same time, 10-year bond yields are down to 4.428% and Oil (WTI) is off 1.57% to $78.55 per barrel in early trading.
The major economic news scheduled for Tuesday is limited to API Weekly Crude Oil Stocks (4:30 p.m.). However, we also get another raft of speakers including Treasury Sec. Yellen (4 a.m.), Fed Governor Kroszner (4:20 a.m.), Fed member Waller (9 a.m.), Williams (9:05 a.m.), Bostic (9:10 a.m.), Vice Chair Barr (11:45 a.m.), Bostic again (7 p.m.), and Mester (7 p.m.). The major earnings reports scheduled for before the open is limited to AS, AZO, EXP, LOW, M, OCFT, XPEV, and ZIM. Then, after the close, MOD, SKY, TOL, URBN, VSAT, and XP report.
In economic news later this week, on Wednesday, April Existing Home Sales, EIA Weekly Crude Oil Inventories, and FOMC Meeting Minutes are reported. On Thursday, we get Building Permits, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, April New Home Sales, Fed Balance Sheet. Fed member Bostic also speaks again. Finally, on Friday, April Core Durable Goods, April Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations are reported and Fed member Waller speaks.
In terms of earnings reports later this week, on Wednesday, ADI, DY, GOGL, HOV, WOOF, PDD, TGT, VIPS, WSM, BBAR, SQM, ENS, PLUS, SUPV, NVDA, SNOW, SNPS, TBBB, and VFC report. On Thursday, we hear from ATAT, BILI, BJ, BEKE, MDT, NTES, PSNY, RL, TD, TITN, CVCO, DECK, INTU, ROST, and WDAY. Finally, on Friday, BAH reports.
So far this morning, AS, LOW, and M have reported beats on both the revenue and earnings lines. Meanwhile, AZO and XPEV missed on the revenue line while beating on earnings. On the other side, ZIM beat on revenue while missing on earnings. However, EXP missed on both the top and bottom lines. It is worth noting that XPEV lowered guidance while ZIM raised its forward guidance.
In miscellaneous news, the embattled Chair of the FDIC, Gruenberg, said he will step down as soon as a successor is confirmed. Gruenberg and the FDIC have been under a months-long scandal over allowing an environment of sexual misconduct and other misogyny at the agency. (Gruenberg has been on the FDIC board since 2005 and is in his second term as board Chair.) Elsewhere, BA shareholders voted to keep departing CEO Calhoun on its board, even after stepping down. Meanwhile, Bloomberg reported that JPM is putting every new employee through AI training. This is being done to better prepare for what CEO Dimon says will be a revolution similar to the printing press of steam engine. On a separate note, Dimon told the JPM annual meeting that his retirement is “less than five years away.” (This is of note because Dimon has given the same “retirement is always five years away” answer for several years before this change.)
Finally, as a reminder, make note the US securities market will soon begin its new 1-day settlement of trades, called “T+1”, which is down from the current 3-day settlement. This change begins Tuesday, May 28. (Also note that some analysts are nervous over the stress on the systems of clearinghouses and brokerages. They fear the “all or nothing” rollout is a high-risk event. However, officials at the exchanges, clearing houses, and brokers say they expect the transition to be smooth.)
With that background, it looks as if markets are flat and indecisive so far in the premarket. All three major index ETFs opened flat and have printed small, indecisive (more with than body) candles so far in the early session. All three remain at new or very near the all-time highs from last week and are obviously well above their T-lines (8emas). So, the short-term trend remains very bullish. Meanwhile, the mid-term is also bullish and the longer-term market remains very Bullish as all three major index ETFs have returned to “fresh air” with no overhead resistance. In terms of extension, yesterday’s candle allowed the T-line to “catch up” some in the large-cap index ETFs (especially DIA on its black candle). So, only the QQQ could be considered stretched too far above its T-line. However, more rest is probably needed in all three. The T2122 indicator pulled to the very top end of its mid-range, just outside the overbought area. So, while the market has room to run (if either side can find momentum), more pause or pullback are probably needed for a healthy rally to continue or for a trend break to happen. With that said, we have to remember that markets can, and sometimes do, remain overextended longer than we can stay solvent betting on a turn. In short, don’t predict, follow. With regard to those 10 big dog tickers, six of the 10 are in the green at this point this morning with NVDA (+0.65%), the biggest dog of all, leading the gains while TSLA (-0.62%) is the biggest drag on the market.
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
On Friday, markets opened flat. SPY opened up 0.02%, DIA opened down 0.01%, and QQQ opened up 0.04%. From that point, the SPY and DIA meandered sideways until about 1:50 p.m. At that point, both sold off for half an hour before rallying the rest of the day, closing on their highest 5-minute candle of the day. Meanwhile, after the open, QQQ ground sideways until noon. Then the high-tech index ETF sold off, reaching the lows of the day at 2:25 p.m. From that point, QQQ also rallied into the close, but from a much lower starting point and not quite reaching the opening level again. This gave us a white-bodied Hammer Harami in the SPY, a white-bodied Bullish Engulfing candle in the DIA, and a black-bodied long-legged Doji type candle in the QQQ. This led DIA to close and another all-time high close. All three major index ETFs also remain well above their T-line (8ema).
On the day, six of the 10 sectors were in the green with Basic Materials (+1.32%) well out front leading the majority of sectors higher. Meanwhile, the Consumer Defensive (-0.23%) and Healthcare (-0.22%) sectors led the laggards lower. At the same time, SPY gained 0.14%, DIA gained 0.18%, and QQQ lost just 0.05%. VXX fell 1.30% to close at 11.36 and T2122 dropped but again remains in its overbought territory to close at 84.86. At the same time, 10-year bond yields rose to 4.42% and Oil (WTI) gained just under one percent to close at $79.97 per barrel. So, Friday did not see any significant moves but the larger-cap index ETFs (especially the DIA) continued its march North while QQQ did really just pause indecisively. This all happened on below-average volume across all three major index ETFs.
The major economic news scheduled for Friday was limited to the April US Leading Economic Indicators Index, which fell more than expected at -0.6% (compared to a forecast and March reading of -0.3%).
In Fed news, on Friday, Fed Chair Powell tested positive for COVID-19 Thursday and said he will be working from home and isolating for the next week or so. (He delivered his Sunday Georgetown Law School commencement address via prerecorded video.)
In stock news, on Friday, MSFT asked hundreds of employees in China (working on both machine learning and cloud computing) to relocate outside China amid increases in China-US trade tensions. Later, BA delayed the launch of its first-crewed Starliner rocket. This is the third delay of the launch due to a helium leak and will now take place no sooner than May 25.
In stock legal and governmental news, on Friday, the NLRB announced that the AL plant of MBGAF (Mercedes Benz) voted against unionizing by 56%-44%. At the same time, C was sued for racial discrimination over its policy of waiving its ATM fees for the customers of minority-owned banks at C ATMs in the state of FL. (This suit was filed by the same right-wing group which has legally challenged DEI programs at companies across the country.)
Overnight, Asian markets were nearly green across the board. Only Thailand (-0.29%) was in the red. Meanwhile, Japan (+0.73%), Malaysia (+0.67%), and South Korea (+0.64%) led the region higher on broad, but modest gains. In Europe, we see a similar picture taking shape at midday with only three of the 15 exchanges in the red. The CAC (+0.54%), DAX (+0.45%), and FTSE (+0.27%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a very modest green start to the day. The DIA implies a +0.07% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.27% open at this hour. At the same time, 10-year bond yields are down to 4.416% and Oil (WTI) is off a third of a percent to $79.77 per barrel in early trading.
The major economic news scheduled for Monday is limited to a number of fed speakers. First, Fed Chair Powell speaks Sunday afternoon. Then Monday, Fed members Bostic (8:45 a.m.), Vice Chair Barr and member Waller (both at 9 a.m.), and Bostic again (7 p.m.) speak. The major earnings reports scheduled for before the open is limited to QFIN, LI, and RYAAY. Then, after the close, JHX, KEYS, NDSN, PANW, TCOM, and ZM report.
In economic news later this week, on Tuesday, we get API Weekly Crude Oil Stocks and many Fed speakers (Kroszner, Williams, Bostic, Vice Chair Barr, Bostic, and Mester). Treasury Sec. Yellen also speaks. Then Wednesday, April Existing Home Sales, EIA Weekly Crude Oil Inventories, and FOMC Meeting Minutes are reported. On Thursday, we get Building Permits, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, April New Home Sales, Fed Balance Sheet. Fed member Bostic also speaks again. Finally, on Friday, April Core Durable Goods, April Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations are reported and Fed member Waller speaks.
In terms of earnings reports later this week, on Tuesday, we hear from AS, AZO, EXP, LOW, M, OCFT, XPEV, ZIM, MOD, SKY, TOL, URBN, VSAT, and XP. Then, Wednesday, ADI, DY, GOGL, HOV, WOOF, PDD, TGT, VIPS, WSM, BBAR, SQM, ENS, PLUS, SUPV, NVDA, SNOW, SNPS, TBBB, and VFC report. On Thursday, we hear from ATAT, BILI, BJ, BEKE, MDT, NTES, PSNY, RL, TD, TITN, CVCO, DECK, INTU, ROST, and WDAY. Finally, on Friday, BAH reports.
So far this morning, ULS beat on both the revenue and earnings lines. Meanwhile, RERE beat on revenue while missing on earnings. On the other side, LI missed on revenue while beating on earnings. However, QFIN missed on both the top and bottom lines.
In miscellaneous news, the US military pier in Gaza is completed and began operation on Friday. Humanitarian aid will travel through Cypress, then a mid-Mediterranean trans-shipment point and the smaller ships will deliver to the pier. The pier will deliver 90 truckloads of aid per day initially with plans to reach a maximum of 150 trucks per day within months. (At maximum, this would be nearly as much as a open border crossing.) Meanwhile, AI industry leader OpenAI, eliminated its “AI Safety” (officially called the Superalignment Team) less than a year after creating the team to study and ensure AI risks/threats are controlled. In addition, OpenAI’s cofounder and chief research scientist, who said “safety culture and processes have taken a backseat to profits” on his way out. Elsewhere, Bloomberg reported Friday that childcare for two children now exceeds the average rent by 25% IN EVERY STATE.
On Saturday, Bloomberg reported that the US beef cattle supply is at its lowest level since 1961. The report said Dairy farmers are not just breeding for herd replacement, but are now cross-breeding Dairy cows with beef cattle (artificially). This allows Dairy farmers to ship calves off to feed-out and slaughter. (A big windfall for an industry that just last summer had to dump milk due to a surplus of supply.) Elsewhere on Saturday, China announced $42 billion to help fix its property crisis. In addition, it will prop up its Real Estate Sector by relaxing mortgage rules and providing guidance to local and provincial governments to buy up unsold homes to be turned into affordable housing. In geopolitical news, the US military announced that Yemeni Houthi rebels hit a Greek-owned oil tanker with a missile early Saturday. (Interestingly, the ship was recently docked in Russia and was headed to China with its cargo.) The ship lost propulsion and has some flooding, but no casualties were suffered and the ship was later able to get back underway under its own power. The attack came hours after the Houthi claimed to have shot down a US MQ-9 Reaper drone. Elsewhere, a helicopter that was carrying the hard-liner Iranian President Raisi as well as Iranian Foreign Minister Amirabdollahain made what was called a “unexpected and hard landing” (crashed) near the mountainous border of Iran, Armenia and Azerbaijan. Heavy fog and cold slowed the search effort. However, two people from the helicopter have been in contact with rescuers. On Monday, Iran announced that both men died in the crash. This will unsettle oil markets and put many eyes on the Middle East, the succession election in 50 days (a caretaker government is already in place), and the impact on Israeli and Saudi relations.
With that background, it looks as if the Bulls are trying to cautiously edge higher in the premarket. All three major index ETFs opened up slightly and have printed small, white-bodied candles so far in the early session. All three remain at or very near the all-time highs from last week and are obviously well above their T-lines (8emas). So, the short-term trend remains very bullish. Meanwhile, the mid-term is also bullish. And the longer-term market remains very Bullish as all three major index ETFs have returned to “fresh air” with no overhead resistance. In terms of extension, as mentioned, the SPY, DIA, and QQQ are all well above their T-lines and probably need more rest. The T2122 indicator pulled back a bit Friday but still remains in the overbought area. So, again, more pause or pullback are probably needed for a healthy rally if for nothing else. With that said, we have to remember that markets can, and sometimes do, remain overextended longer than we can stay solvent betting on a turn. In short, don’t predict, follow. With regard to those 10 big dog tickers, nine of the 10 are in the green at this point this morning with only APPL (-0.45%) dragging on the QQQ. Meanwhile, the biggest dog of them all, NVDA (+1.41%) is out front pulling the market higher during the early session.
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
With heavy corporate buybacks pushing U.S. markets, Asia-Pacific markets respond to that bullish energy and experienced a positive start to the week. China’s central bank preserved the one- and five-year loan prime rates at 3.45% and 3.95%, respectively. Hong Kong’s Hang Seng index saw a modest increase of 0.18%. Chinese CSI300 index advanced 0.35%, closing at 3,690.96.
European markets experienced a modest uptick on Monday. The Stoxx 600 index was up 0.17% at 11 a.m. London time. Sector-wise, mining stocks outperformed, registering a 0.8% increase, which could be attributed to rising commodity prices or favorable industry forecasts. On the other hand, banking stocks saw a minor decline of 0.2%, possibly reflecting market adjustments or sector-specific news.
U.S. stock futures saw a slight increase on Monday, after the Dow Jones Industrial Average surpassed the 40,000 milestone for the first time. The Dow futures up 11 points. Meanwhile, S&P 500 futures climbed by 0.1%, and the tech-heavy Nasdaq 100 futures advanced by 0.2%.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include GLBE, LI, & WIX. After the bell include KEYS, NDSN, PANW, & ZM.
News & Technicals’
The untimely demise of Iranian President Ebrahim Raisi in a helicopter crash has plunged Iran into a period of uncertainty. The nation, grappling with a severe economic downturn, widespread public dissatisfaction, and escalating geopolitical strains, now faces a pivotal moment. As the world watches, questions arise about the future of this influential Middle Eastern nation, which boasts a population of nearly 90 million and wields considerable clout through its support of various regional proxy factions. Analysts are predicting a likely continuation of the current political trajectory, yet they also highlight the potential for the IRGC, Iran’s formidable revolutionary guard, to tighten its grip on the nation’s governance. This event could mark a significant shift in Iran’s political landscape, with the IRGC poised to steer the country through its complex and challenging circumstances.
The United States’ national debt has soared to a staggering $34.5 trillion, marking an increase of approximately $11 trillion since March 2020. This significant rise has sparked widespread discussion among policymakers and financial experts, with a notable Wall Street firm raising concerns about the potential impact of debt-related expenses on the ongoing stock market rally. The Congressional Budget Office (CBO) projects that the ratio of public debt to GDP will reach unprecedented levels, surpassing any previously recorded in the country’s history. Echoing the urgency of the situation, Federal Reserve Chair Jerome Powell has emphasized the need for prompt action by elected officials to address the burgeoning debt, underscoring the critical nature of the fiscal challenge ahead.
The recent escalations along the Russia-Ukraine border have intensified the conflict, with both nations engaging in military strikes against each other’s border regions. On Sunday, the northeastern Ukrainian region of Kharkiv and the adjacent Russian region of Belgorod experienced significant attacks. In the aftermath, Kharkiv declared Monday a day of mourning to honor the victims of the shelling, which targeted a frequented leisure area and several villages. The assault resulted in the tragic loss of at least 11 civilian lives and left numerous others injured. This surge in violence underscores the deepening humanitarian crisis and the urgent need for de-escalation in the region.
Microsoft’s Build developer conference, set to commence this Tuesday in Seattle, is poised to be a pivotal event for the tech community. The conference is anticipated to unveil Microsoft’s vision for integrating AI capabilities into the Windows operating system, potentially transforming the user experience of personal computing. Furthermore, there is speculation that Qualcomm’s advanced chips will be at the heart of several upcoming Windows-powered devices. This collaboration could herald a new era of computing, combining Qualcomm’s prowess in chip design with Microsoft’s software expertise to create powerful, AI-enhanced PCs for the next generation of technology users.
The United States’ national debt has soared to a staggering $34.5 trillion, marking an increase of approximately $11 trillion since March 2020. This significant rise has sparked widespread discussion among policymakers and financial experts, with a notable Wall Street firm raising concerns about the potential impact of debt-related expenses on the ongoing stock market rally. The Congressional Budget Office (CBO) projects that the ratio of public debt to GDP will reach unprecedented levels, surpassing any previously recorded in the country’s history. Echoing the urgency of the situation, Federal Reserve Chair Jerome Powell has emphasized the need for prompt action by elected officials to address the burgeoning debt, underscoring the critical nature of the fiscal challenge ahead.
Though the Friday market trade was lethargic it remains bullish due to the massive corporate buybacks exceeding all other buy volume. With a light day on the both the earnings and economic calendars another choppy day is likely unless the Fed speakers add to the their hawkish stance.
Markets opened flat on Thursday. SPY opened 0.02% higher, DIA opened up 0.11%, and QQQ opened down 0.02%. From there, all three major index ETFs rallied steadily, reaching the highs of the day at 11:10 a.m. At that point, all three sold off more slowly, recrossing the open and reaching a low at 2:20 p.m. Then SPY and QQQ bounced modestly for 30 minutes before selling off again. Meanwhile, DIA bounced with more strength but then also sold off harder. In all three major index ETFs, the biggest candle of the day was a sharp drop the last 5 minutes. This action gave us black, inverted Hammer type candles (not Shooting Stars because there was no gap higher) in all three of those ETFs. This gave us new all-time highs, but not new all-time high closes in the SPY, DIA, and QQQ. This happened on less than average volume in all three.
On the day, eight of the 10 sectors were in the red with Basic Materials (-0.59%) and Industrials (-0.57%) out front leading the majority of sectors lower. Meanwhile, the Consumer Defensive (+1.12%) sector was the biggest mover and held up far better than any other sector. At the same time, SPY lost 0.21%, DIA lost 0.02%, and QQQ lost 0.20%. VXX was flat to close at 11.51 and T2122 dropped but remains well into its overbought territory to close at 88.64. At the same time, 10-year bond yields rose to 4.379% and Oil (WTI) gained 0.84% to close at $79.29 per barrel. So, Thursday was a mostly “dead money” day with a modest morning move higher followed the a slightly stronger selloff in the afternoon.
The major economic news scheduled for Thursday included April Building Permits, which came in lower than expected at 1.440 million (compared to a forecast of 1.480 million and the March 1.485 million reading). On the start side, April Housing Starts were up but lower than predicted at 1.360 million (versus the forecast of 1.420 million but up from March’s 1.287 million value). At the same time, the April Import Price Index was up sharply to +0.9% (compared to a +0.2% forecast but up less from the March +0.6% reading). The other side of trade, the April Export Price Index, was also higher than anticipated at +0.5% (versus a +0.4% forecast and well up from March’s +0.1% value). On the Unemployment front, Weekly Initial Jobless Claims were a bit higher than predicted at 222k (compared to a 219k forecast but also down from last week’s 232k reading). As far as ongoing claims are concerned, Weekly Continuing Jobless Claims were higher than expected at 1,794k (versus a 1,780k forecast and 1,781k number the prior week). Meanwhile, the Philly Fed Mfg. Index came in lower than anticipated at 4.5 (compared to a +7.7 forecast and down significantly from April’s +15.5 number). Later, April Industrial Production (month-on-month) was lower than predicted at 0.0% (versus a +0.1% forecast and March reading). After the close, the Fed Balance Sheet was down $49 billion from $7.353 trillion to $7.304 trillion.
In Fed speak news, on Thursday, NY Fed President Williams acknowledged and said that he welcomes the CPI data. He also discounted the idea of any rate hike. However, he also said wants to see more before any cut in rates. Williams said, “I don’t see any need to tighten monetary policy today … Monetary policy is restrictive and is in a good place.” Later, Cleveland Fed President Mester echoed other FOMC comments saying, “I now believe that it will take longer to reach our 2% goal than I previously thought.” She added, “We will need to accumulate further data over the coming months to have a clearer picture of the inflation outlook (before cutting rates).” Later, Atlanta Fed President Bostic said he sees the ongoing disinflation leading to a potential rate cut. However, he said nothing was locked in, there was no timetable, and many things could happen. Bostic said, “one data point is not a trend, and said there are a number of different scenarios that could yet play out on the inflation front.”
After the close, AMAT, CPRT, DXC, GLOB and TTWO all reported beats on both the revenue and earnings lines. Meanwhile, FLO missed on both the top and bottom lines.
In stock news, on Thursday, SPR (a primary supplier to BA) announced it is laying off 450 employees in the next few weeks. (This is about 3.6% of the company’s workforce as of year-end 2023.) Later, after the close, RDDT announced a partnership deal with OpenAI. The deal will allow OpenAI to train its AI models (like ChatGPT) on content from the Reddit platform.
In stock legal and governmental news, on Thursday, the US Dept. of Justice took the next step in easing restrictions on marijuana by proposing the rule that would reclassify that drug as a “class III” (as opposed to its current “class I” category). The statement said that the FDA had found credible evidence marijuana can be beneficially medically uses and had no safety concerns that should prohibit medical use. However, class I drugs (like heroin and LSD), pose major safety risks and have no proven medical uses. Marijuana stocks soared on the news, even though it has been expected since April. The announcement (rule proposal) begins 60 days of public comment. Later, the US Supreme Court ruled 7-2 that the CFPB is not funded unconstitutionally. This kills one attack on federal agencies by an extreme conservative group, famous for challenging agencies, federal regulations, and private diversity programs. (This is a very significant ruling because the Fed, FDIC, Social Security, and Medicare/Medicaid could have all potentially been unfunded had the decision gone the other way.) At the close, the FDA approved AMGN’s treatment for the most-deadly form of lung cancer.
Overnight, Asian markets were mixed but leaned toward the green side again as eight of the 12 exchanges in the region were positive. Shenzhen (+1.10%) and Shanghai (+1.01%) were by far the biggest gainers while South Korea (-1.03%) was by far the biggest loser on the day. Meanwhile, in Europe, markets were mostly in the red. The CAC (-0.34%), DAX (-0.38%), and FTSE (-0.37%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a second-straight flat open. The DIA implies a dead flat unchanged open, the SPY is implying a +0.01% open, and the QQQ implies a +0.08% open at this hour. At the same time, 10-year bond yields are up a bit to 4.398% and Oil (WTI) is on the red side of flat at $79.09 per barrel in early trading.
The major economic news scheduled for Friday is limited to the April US Leading Economic Indicators Index (10 a.m.). We also hear from Fed member Waller (10:15 a.m.) and Daly (12:15 p.m.). Major earnings reports scheduled for before the open is limited to HTHT. There are no reports scheduled after the close.
So far this morning, HTHT beat on revenue while missing on earnings.
In miscellaneous news, the SEC (in a hat-tip to the efficiency of government) voted unanimously to update data breach rules for brokers, investment advisors, and other investment companies. In vote, approved rule changes first proposed under the Clinton administration in 2000. The new rules will require the regulated firms to have and maintain data breach programs to detect, respond to, and recover from cybercrime that accesses their customer’s personal information. The rule also creates mechanism for companies to share attack data. However, rather than be hasty, regulated firms now have between 18 and 24 months to come into compliance. (So, it only took 27 years to get this done…unless the 2025 administration reverses the decision.)
In late-breaking news, the UK Competition and Markets Authority announced the MSFT and Mistral AI partnership “does not qualify” for investigation under British antitrust law. This avoids a widely-speculated hurdle for the deal. Elsewhere, after antitrust regulators nixed the acquisition of Figma (cloud-based design software) by ADBE, Figma has told employees they can sell their Figma shares at a company valuation of $12.5 billion. (That is up 25% from the valuation Figma used in fundraising in 2021.) Finally, online retailer W announced it will open a 150k-square-foot brick-and-mortar store in the Chicago area.
With that background, it looks as if the market is continuing Thursday’s indecisive action, at least early. All three major index ETFs opened the premarket near flat and have strayed little since then in the early session. It is worth noting that all three are printing a white-body candle in the early session, but none of those bodies are significant enough to show any real strength. With that said, all three remains very near the all-time highs from early Thursday and are obviously well above their T-line (8ema). So, the short-term trend remains very bullish. Meanwhile, the mid-term is also bullish. And the longer-term market remains very Bullish as all three major index ETFs have returned to “fresh air” with no overhead resistance. In terms of extension, as mentioned, the SPY, DIA, and QQQ are all well above their T-lines, but only QQQ might be considered too extended. The T2122 indicator pulled back a bit Thursday but remains well into the overbought area. So, more pause or pullback are probably needed, if for nothing else than just to take profits and gather a new group of Bulls (FOMO money?) for a next wave higher (if that is the direction). With that said, we have to remember that markets can, and sometimes do, remain overextended longer than we can stay solvent betting on a turn. In short, don’t predict, follow. With regard to those 10 big dog tickers, seven of the 10 are in the green at this point this morning with only META (-0.41%) and NVDA (-0.30%), which is the biggest dog of all, really dragging on the QQQ. Keep in mind that its Friday, pay day, and time to prepare your account for the weekend news cycle.
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
