The stock market presented a contrasting performance last week, with the Dow Jones Industrial Average facing a downturn for the third time in four weeks. In contrast, both the S&P 500 and the Nasdaq Composite soared, achieving record highs and marking their seventh week of gains in the recent eight. The upcoming week, however, will see a truncated trading schedule as markets close on Wednesday in observance of the Juneteenth holiday. This pause in trading may offer a moment for investors to reflect on the market’s recent volatility and prepare for the second half of the month.
European markets experienced a downturn on Monday, retracting from initial advances as a wave of pessimism swept through the trading floors. Investors’ focus was largely drawn towards the impending interest rate verdict from the Bank of England, which cast a shadow of uncertainty. By mid-morning, at 11:15 a.m. London time, the Stoxx 600 index had declined by 0.33. The French CAC 40 also succumbed to the negative trend, edging down by 0.14%.
In a recent economic update, the People’s Bank of China maintained its medium-term lending facility rate steady at 2.5% on a substantial 182 billion yuan, aligning with market predictions. Meanwhile, China’s retail sector outperformed analyst forecasts, registering a 3.7% year-on-year increase in May, surpassing the anticipated 3% rise based on a Reuters survey. However, Asian markets closed red across the board.
Economic Calendar
Earnings Calendar
Notable reports for Monday there are no reports before the bell. After the bell include LEN, & LZB.
News & Technicals’
In an effort to de-escalate mounting tensions along the Lebanon border, a senior U.S. adviser is set to visit Israel. The region has seen an uptick in hostilities, with a recent barrage of missiles intensifying concerns over the possibility of a larger conflict. The Israeli military has cited Hezbollah’s increasing aggression as a critical factor pushing the situation toward a potential escalation. Amos Hochstein, serving as a senior diplomatic adviser to U.S. President Joe Biden’s administration, is scheduled to arrive in Israel on Monday. This visit, reported by an Israeli official to NBC News, is a strategic move to mediate and hopefully reduce the strains that have been building in the volatile border area.
TDK, the renowned Japanese electronic parts manufacturer, announced a significant breakthrough on Monday with the development of a new material designed for solid-state batteries. This Tokyo-based company, also known for supplying components to Apple, highlighted the potential of this innovation to revolutionize personal electronics. The material is particularly suited for devices that are worn close to the body, such as wireless earphones, hearing aids, and smartwatches. A key aspect of TDK’s solid-state battery technology is the incorporation of oxide-based solid electrolytes. This choice of material is not just a technical decision; it’s a commitment to safety, as the company asserts these batteries are “extremely safe.” This advancement could pave the way for more reliable and durable consumer electronics that integrate seamlessly into our daily lives.
In a landmark decision, a judge has sanctioned a $4.5 billion settlement involving Do Kwon, Terraform Labs, and the U.S. Securities and Exchange Commission (SEC). This settlement comes in the wake of Binance’s earlier agreement with the U.S. authorities in November, which amounted to $4.3 billion. These legal resolutions are part of a broader crackdown on illicit activities that shook the foundations of the cryptocurrency sector in 2022. The recent series of criminal convictions and financial penalties signify a turning point, bringing closure to the tumultuous events and holding accountable the individuals whose actions significantly disrupted the crypto industry. This marks a concerted effort by regulatory bodies to restore integrity and stability in the digital asset space.
The future of Social Security benefits hangs in the balance, with projections suggesting a potential across-the-board cut for beneficiaries within the next decade unless Congress intervenes. The legislative body currently appears immobilized, unable to reach a consensus on the path forward. Amidst this deadlock, the proposal of a bipartisan commission has emerged as a possible solution, garnering a polarized response. Advocates argue that such a commission could bridge political divides and forge a sustainable future for Social Security. Conversely, critics fear that it may lead to compromises that could undermine the program’s integrity. This dichotomy of views underscores the complexity of reforming a system that millions of Americans rely on for financial security in retirement.
The contrasting performance with new record highs in the SPY and QQQ with the DIA and IWM show bearish trend makes for considerable uncertainty in this holiday shortened week. Keep an eye on the dollar breaking recent highs but showing considerable volatility in the overnight session. With retail sales figures in focus before the bell Tuesday after Friday’s disappointing Consumer Sentiment, plan your risk carefully.
TSLA and AVGO led broader market ETFs to open higher (again) Thursday while DIA started lower. SPY gapped up 0.34%, QQQ gapped up 0.74%, and DIA gapped down 0.20%. From that opening level, SPY and QQQ slowly sold off, reaching the lows at 12:35 p.m. At that point, both of the broader index ETFs reversed course and slowly rallied the rest of the day. Meanwhile, after the open, DIA sold off a bit more sharply, reaching its lows at 10:40 a.m. Then it ground sideways until 12:35 p.m. when it started its own slow, steady rally lasting 3 p.m. when it had recrossed the opening gap. From there, DIA slowly sold back down toward the opening level by day end. This action gave us a gap-up, black-bodied, Hanging Man type candle in the SPY. The QQQ gave us a gap-up, black-bodied, Spinning Top candle. Finally, DIA printed a gap-down Doji candle that did not quite retest its T-line (8ema) from below. It is worth noting that this was the fourth-straight new record high close in both the SPY and QQQ.
On the day, all 10 sectors were in the red with Energy (-1.27%) way out in front (by half a percent) leading the rest of the market lower. Meanwhile, Technology (-0.06%) and Utilities (-0.06%) holding up better than other sectors. At the same time, SPY gained 0.20%, DIA lost 0.21%, and QQQ gained 0.54%. VXX was down 0.28%, closing at a very low 10.86 and T2122 dropped back down into its oversold territory at 12.70. On the bond front, 10-year bond yields fell sharply again to 4.246% and Oil (WTI) fell 0.49% to close at $78.01 per barrel. So, on Thursday we saw divergence in the market as NVDA, TSLA, AAPL, and AVGO nearly alone dragging the broader index ETFs higher (perhaps with the help of good PPI data), while 70% of the market was down. It is also worth noting that SPY had only half of its average volume while DIA and QQQ had less-than-average volume.
The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 242k (compared to a forecast of 225k and the prior week’s 229k value). On the ongoing front, Weekly Continuing Jobless Claims, were also above expectations at 1,820k (versus a forecast of 1,800k, and the prior week’s 1,790k reading). At the same time, May Core PPI (month-on-month) was down at +/-0.0% (compared to a forecast of +0.3% and well below the April +0.5% value). On the headline side, May PPI (month-on-month) was also down significantly at -0.2% (versus the +0.1% forecast and far below April’s +0.5% reading). Then, after the close, the Fed Balance Sheet actually grew slightly on the week, now standing at $7.259 trillion (compared to last week’s $7.256 trillion) for a $3 billion increase.
In economic speak news, Treasury Sec. Yellen told the Economics Club of NY that US public sector investments are crucial to sustainable growth because it attracts private capital investments. However, she warned that China’s model of huge state subsidies of industrial projects was unacceptable to the world. (Expanding on this, in more of an economic or economic-political philosophy clarification, Yellen said that supply-side economics relies too heavily on tax cuts and has been proven to fail to benefit workers, causing disparity.) She said “We have learned through experience that heavy-handed central planning through government dictates is not a sustainable economic strategy … But neither is traditional supply-side economics, which ignores the importance of public infrastructure, education and workforce training and government-supported basic research.” She concluded, by saying tax cuts for the wealthy and deregulation have not fueled “growth and prosperity for the nation at large.” Elsewhere, NY Fed Pres. Williams pushed back against the idea of rate cuts anytime soon in his noon speech. Williams said, “we aren’t really talking about rate cuts right now (at the Fed) … and it’s premature to speculate about them.”
After the close, ADBE reported beats on both the revenue and earnings lines. At the same time, RH beat on revenue while missing on earnings. It is worth noting that ADBE also raised forward guidance. (ADBE was up 17% in post-market trading.)
In stock news, on Thursday, Reuters reported that BA is investigating new quality issues with 787 Dreamliner jets that have not been delivered yet. This comes after the company discovered hundreds of fasteners were incorrectly installed in fuselages. (It was found than many were incorrectly torqued, or tightened, while some were in the wrong place altogether.) At the same time, INSM announced that its negotiations with AZN over commercialization of its brewnsocatib drug have ended with no deal. Later, Bloomberg reported that WFC had fired more than a dozen employees from its wealth mgmt. and investment unit for faking work by using simulation of keyboard activity. At the same time, WMT announced it will re-launch a private label fashion line focused on attracting Gen Z customers.
Elsewhere, TSN suspended its CFO (the great-grandson of company founder) after his second arrest for driving under the influence in two years. At the same time, F announced it will soon reverse its decision and allow all of its dealerships to sell electric vehicles. (Previously, F had required dealers to spend between $500k and $1 million on equipment, training, and “programs” before they were allowed to sell F electric vehicles.) Later, GME stock prices were boosted on the day after Keith Gill (Roaring Kitty) exercised 40,000 call options, taking possession of 4 million new shares and making him the fourth-largest shareholder with over 9 million shares. (Gill also took profits on 80,000 call options, meaning he liquidated all 120k call options he held going into the day.) GME was up 14.28% on the day. At the same time, Elon Musk claimed victory early Thursday, but the shareholder vote did not begin until after the close. By 7 p.m. Eastern, it was announced that shareholders had in fact approved Musk’s $56 billion pay package. The package had originally been based on the value of TSLA rising to more than $650 billion between 2018 and 2028. (As of now, TSLA has a $582 billion market cap, but in 2021 it was worth $1.2 trillion at its peak.)
In stock legal and governmental news, on Thursday, the largest oil industry trade group (representing the likes of XOM and CVX) sued the EPA, seeking to block the Biden Administration’s efforts to reduce car emissions. (The EPA tightened, slightly…by 2% per year after 2026, to encouraging electric vehicle adoption.) The suit alleges the EPA exceeded it authority in setting emissions standards that would require a change in fuel type for the auto industry to meet. Later, the state of FL and DIS ended the long feud (based on the Gov. retaliating against the Mouse House for its opinion on his “Don’t Say Gay” law), by signing a 15-year deal allowing DIS to develop additional portions of the oversight district. (The board of that district was the method the Gov. used to attack DIS for its criticism.) At the same time, the FAA Administrator Whitaker admitted the agency had been “too hands off” with BA by focusing on analysis of the faked or wrong paperwork BA submitted rather than in-person audits of production line work (prior to the paperwork being created). Whitaker said that approach had been corrected and will not revert (in what was an unstated claim that BA could not be trusted).
Meanwhile, JPM won a court battle with a Greek fintech firm who created an app called Viva Wallet. The court ruled JPM had no incentive to depress Viva Wallets value because the bank owned 48.5% of the app-creating company. Under the ruling, the Greek firm loses the right to refuse JPM’s offer to buy them out and valued the company at $5.4 billion. At the same time, a lawsuit was filed against AAPL in CA, accusing the company of 12,000 female employees less than men for comparable jobs. Later, the US Supreme Court ruled in favor of SBUX, throwing out a lower court ruling that the company had to abide by an NRLB injunction requiring the company to rehire employees fired when they sought to unionize. (The ruling was actually that the lower court had used the wrong legal standard for siding with the NLRB and the case must be reheard at the lower court level.) At the same time, GOOGL was hit with a complaint to the EU antitrust regulators over alleged user tracking by its Chrome web browser.
Overnight, Asian markets were evenly split with six exchanges in the green and six in the red. Taiwan (+0.86%) led the gainers while Hong Kong (-0.94%) paced the losses. In Europe, the picture is much weaker with 14 of the 15 bourses in the red and only Russia (+0.43%) in the green. The CAC (-2.58%), DAX (-1.51%), and FTSE (-0.53%) are a good representation of the spread and lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a gap lower to start the day. The DIA implies a -0.88% open, the SPY is implying a -0.60% open, and QQQ is implying a -0.33% open at this hour. At the same time, 10-year bond yields are down to 4.207% and Oil (WTI) is just on the green side of flat at $78.67 per barrel in early trading.
The major economic news scheduled for Friday include May Import Price Index and May Export 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.), and the Fed Monetary Policy Report (11 a.m.). There are no major earnings reports scheduled for either before the open or after the close.
In miscellaneous news, on Thursday, cocoa traded back above $10k per ton as the supply outlook worsens. (The world’s top producer Ivory Coast halted exports for June and forward sales of next season’s crop on Thursday.) Elsewhere, twice-impeached, convicted felon ex-President Trump said Thursday that, if elected, he would reduce corporate tax rates again, as well as considering cuts to other income tax rates (in addition to extending the tax cuts from his administration scheduled to sunset in 2025). This was part of his campaign to buy corporate donors and PAC support. (The statement was made to a group of CEOs including JPM’s Dimon and AAPL’s Cook.) Meanwhile, Bloomberg reported some surprising data out of NY. The report said average Manhattan apartment rents unexpectedly slipped in May, with new leases showing a 3.5% decline in price from a year earlier.
In geopolitical news, Russian “President” Putin made a propaganda announcement of his preconditions that Ukraine would need to meet before he would even begin peace negotiations (following 2.5 years of his unprovoked invasion and genocidal war against Ukraine). Those preconditions include Ukraine ceding their provinces of Donetsk, Lugansk, Zaporizhzhia, and Kherson to Russia. (Russia illegally annexed those four oblasts after its invasion. In addition, he demanded that Ukraine denounce and give up its long-standing ambition to join NATO. (The latter would leave Ukraine as a target he can invade again without NATO retaliation, should they ever do anything he does not like or he just feels more prepared.) These are all obvious non-starter conditions, but are intended as PR ahead of the global peace conference to be attended by 80-90 countries (Russia not invited).
In other news, interestingly, Elon Musk’s big $56 billion pay package win in the shareholder vote Thursday DOES NOT override the court ruling from five months ago, when Musk’s pay package was thrown out as egregious as part of a shareholder lawsuit. However, the post-verdict vote could help his (technically TSLA’s) appeals of the verdict in the future. Not one to let things alone, Musk told the board that “his Optimus humanoid robots” could make TSLA worth $25 trillion (which would be 55% the S&P 500’s combined value at today’s prices). That figure should be weighed against TSLA’s current $580 billion value.
With that background, the Bears have control in the premarket this morning. The SPY and QQQ opened a bit higher but have put in large black-body candles since then. (However we should note they are both well up off the early session lows.) Meanwhile, DIA gapped lower to start the premarket and has also sold off since then. but again us up off the early session lows.) Again, SPY and QQQ sit at all-time highs as they wait for the open while DIA is 4.3% below its all-time high. So, Bears are in control this morning, but are coming from different starting places. Again, the short-term is mixed with DIA definitely bearish and SPY and QQQ clearly bullish. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, QQQ is now extended far above its T-line and is badly in need of rest or pullback. Neither of the others are extended from their T-line. However, the T2122 indicator is back in the center of its oversold range. So, the bottom line is that outside of the QQQ, the market has room to run in either direction. With regard to those 10 big dog tickers, eight of the 10 are in the red this morning. However, it is again the two biggest TSLA (+1.35%) and NVDA (+0.03%) that are the ones holding onto green territory. Remember, its Friday, Pay Day, and that next Wednesday is a market holiday.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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The S&P 500 futures Thursday, with PPI in focus with a side order of jobs data before the bell. This followed closely on the heels of the Federal Reserve’s latest interest rate decision, which, along with a May consumer inflation report that was more subdued than anticipated. Broadcom stood out with its shares leaping 14% in premarket trading, announcing an enticing 10-for-1 stock split.
European markets faced a downturn on Thursday, with the Stoxx 600 index falling 0.6% by 9:45 a.m. in London, a stark contrast to the robust gains it had secured the previous day. The volatility was particularly pronounced in the case of the French IT giant Atos, whose shares experienced a dramatic 14% drop following the announcement of the divestiture of its consultancy arm, Worldgrid.
Asian markets traded mixed but mostly higher. Leading the charge was South Korea’s Kospi, increased of 0.98%, closing at 2,754.89. Over in Hong Kong, the Hang Seng index also participated in the rally, climbing 0.87%.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include KFY, SIG, MDRX, & WLY. After the bell includes ADBE.
News & Technicals’
Elon Musk, CEO of Tesla, has indicated that the company’s shareholders are poised to endorse his contentious $56 billion pay package, alongside a resolution to relocate Tesla’s corporate domicile to Texas. This substantial compensation plan, which was initially ratified in 2018, set forth ambitious benchmarks for Tesla’s financial metrics and valuation. While some detractors have voiced concerns over the enormity of the package and Musk’s potential diversion of focus due to his involvement with other ventures, including a social media platform, proponents maintain that Musk’s leadership and innovative drive are indispensable for Tesla’s continued prosperity and pioneering role in the electric vehicle industry. The debate encapsulates the broader discourse on executive remuneration and the impact of dynamic leadership on corporate success.
The trading landscape for GameStop shares took a dramatic turn on Wednesday afternoon as a significant sell-off ensued. Amidst this market activity, attention was drawn to “Roaring Kitty,” also known as Keith Gill, a prominent figure in the GameStop trading frenzy. The latest disclosure of his investment portfolio revealed on Monday night that he retained ownership of 120,000 call options contracts. These contracts are characterized by a strike price of $20 and are set to expire on June 21. In a remarkable display of market movement, GameStop call options matching Gill’s strike price and expiration date saw a staggering 93,266 contracts being traded on Wednesday, highlighting the volatile nature of the stock and the keen interest of traders in these specific options.
Digital wallets have become a cornerstone in the global payment landscape, as evidenced by their substantial share in both e-commerce and brick-and-mortar transactions. In 2023, digital wallets were responsible for 50% of all e-commerce purchases and 30% of in-store purchases, amassing a staggering $14 trillion in transaction value. This trend is expected to continue its upward trajectory, with projections estimating that digital wallet transactions will reach an impressive $25 trillion by 2027. The Asia-Pacific region, in particular, has embraced this payment method with open arms; 70% of online payments and 50% of in-store payments were conducted through digital wallets last year, the highest adoption rate globally. China is at the forefront of this digital revolution, leading the world with 82% of e-commerce and 66% of in-store purchases made via digital cards, contributing to approximately $7.6 trillion in transactions. This data not only highlights the growing consumer preference for digital wallets but also underscores the significant role they play in shaping the future of financial transactions worldwide.
The wild price volatility and whipsaws could continue this morning with the PPI in focus along with Initial Claims to keep traders guessing. However, big tech continues to surge after the Broadcom reports expecting another new record high in the Nasdaq at the open.
Wednesday started with a strong bullish gap and then the rest of the day was really a sideways grind punctuated by small rallies and selloffs. The SPY gapped up 0.87%, DIA gapped up 0.92%, and QQQ gapped up 0.86%. However, from there we saw a major divergence with SPY and QQQ continuing to follow through with a rally the first hour before slowly grinding sideways with a slight bearish trend. After the 5-minute reaction to the Fed decision/statement at 2 p.m., SPY was back to its opening level and QQQ was half way back down to that point. The rest of the day was a roller coaster ride for those two leading index ETFs that left them little changed from the 2 p.m. level. Meanwhile, after the gap higher, DIA sold off slowly and steadily all day, recrossing the gap on the Fed 5-minute selloff and then riding waves sideways the rest of the day. DIA retested and failed its T-line (8ema) from below while SPY and QQQ both printed new all-time highs and new all-time high closes.This action gave us Shooting Star type candles in the SPY and QQQ (more body on QQQ’s star) and a gap-up Bearish Engulfing of a Doji in the DIA.
On the day, six of the 10 sectors were in the green with Technology (+1.97%) way out in front (by almost a percent) leading the rest of the market higher. Meanwhile, it was Communications Services (-0.97%) that was lagging well behind the other sectors. At the same time, SPY gained 0.82%, DIA lost 0.07%, and QQQ gained 1.31%. VXX was down almost 2%, closing at a very low 10.89 and T2122 spiked higher but settled back to close in the center of its mid-range at 51.68. On the bond front, 10-year bond yields fell sharply to 4.318% and Oil (WTI) was 0.56% to close at $78.33 per barrel. So, what we saw Wednesday premarket joy at good CPI data and then a drift lower until the Fed data wasn’t terrible. The remainder of the day was a roller coaster ride on every word Powell uttered and the tea leaf reading of dot plots and statement parsing.
The major economic news scheduled for Wednesday included May Core CPI (month-on-month), which came in down and a tick lower than expected at +0.2% (compared to a +0.3% forecast and April reading). On a year-on-year basis, May Core CPI was also a tick lower than expected and two-tenths down from April at +3.4% (versus the +3.5% forecast and +3.6% April value). At the same time, the headline May CPI (month-on-month) was flat at +/-0.0%, lower than the forecasted +0.1% and well down from April’s +0.3% number. On a year-on-year basis, May CPI was down a tick to +3.3% (versus the +3.4% forecast and April reading). Later, EIA Weekly Crude Oil Inventories gave us an unexpected inventory build of 3.730 million barrels (compared to a forecasted draw down of 1.200 million barrels and the prior week’s 1.233-million-barrel build). Later, the May Federal Budget Balance was far higher than predicted at -$347.0 billion (versus a -$279.6 billion forecast and far worse than April’s +$201.0 billion surplus).
However, the big afternoon news was from the Fed, which left Interest Rates unchanged at 5.25%-5.50%. At the same time, the FOMC Economic Projections (dot plots) showed a dramatically higher Q2 Current Year Interest Rate Projection of 5.1% (compared to a Q1 forecast of 4.6% this year and even well above the expected 4.9% value). Meanwhile, the Q2 1st Year Interest Rate Projection was 4.1% (which was dead on the predictions but two ticks higher than Q1’s forecast of 3.9% for 2025). The Q2 2nd Year Interest Rate Projection remained unchanged at 3.1% (in line with the forecast and Q1 estimate for 2026). Finally, the Q2 3rd Year Interest Rate Projection was up, but in line with predictions at 2.8% (compared to a 2.8% forecast of the forecast and up from Q1’s 2.6% average projection for long-term).
In terms of words, the Fed Statement said there has been “modest further progress toward the committee’s 2 percent inflation objective.” It also removed the entire section about reducing the Fed’s pace of decline in reducing its balance sheet. During his press conference, Fed Chair Powell said “Our economy has made considerable progress toward both goals over the past few years.” He continued, “We’ll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%.” … “We see today’s report as progress and as, you know, building confidence … But we don’t see ourselves as having the confidence that would warrant beginning to loosen policy at this time.” Finally, during questioning, he seemed to indicate that jobs data may be overstated. Still, he said the jobs market remains strong and the cooling is gradual (which is a good thing).
After the close, AVGO reported beats on both revenue and earnings. Meanwhile, PLAY reported misses on both the top and bottom lines. It is worth noting that AVGO also raised its forward guidance.
In stock news, on Wednesday FDX announced it is cutting 2,000 “back office” jobs in Europe amid weak freight demand. Later, CAT hiked its dividend by 8% to $1.30/share and announced an additional $20 billion in stock buybacks. At the same time, LUV CEO Jordan announced that he will not resign in the face of calls for him to do so from activist investor Elliott Investment Mgmt. (Elliott recently announced they’d taken a $1.9 billion position in LUV and openly called for leadership change.) Later, SPCE announced a 1-for-20 reverse stock split to take effect on June 14. After the close, JPM raised its guidance, saying it expects investment banking revenue to jump 25%-30% in Q2.
Elsewhere, just a reminder that the TSLA shareholder meeting and vote on CEO Musk’s $56 billion pay package will be held today.
In stock legal and governmental news, on Wednesday, the NHTSA announced that FSRN (Fisker electric vehicles) will recall 18,000 cars due to faulty software that cause the cars to act “in non-compliance with safety standards.” Later, a US appeals court threw out a lower court order that had agreed with the NRLB ruling prohibiting AMZN from firing union supporters. The ruling essentially allows AMZN to fire employees it thinks support unions or unionization of AMZN facilities. At the same time, thousands of AMZN “flex drivers” (who work like UBER drivers) classified as contractors have filed arbitration claims. The 15,800 drivers submitted claims, seeking to be treated as full-time employees, paid overtime, and reimbursed for work-related expenses like mileage and cell phone use. (453 similar cases are being litigated in courts.)
Meanwhile, a lawsuit was filed against CAG alleging the company has been deceiving consumers by both “short weighting” its packages and shipping frozen fish products that were not 100% fish. At the same time, Reuters reported that the NHTSA is seeking information from GOOGL related to a series of incidents involving the Waymo (the company’s self-driving vehicles unit). The investigation stems from 22 reports the NHTSA received in May related to 17 collisions.) Later, after the close, the FAA Administrator (head) Whitaker told the Senate that it will maintain increased in-person oversight of BA and SPR for the foreseeable future.
Overnight, Asian markets were mixed again but leaned to the green side with eight of the 12 exchanges above break-even. Taiwan (+1.19%), New Zealand (+1.11%), South Korea (+0.98%), and Hong Kong (+0.97%) paced the gains. However, in Europe, we see red across the board at midday. The CAC (-1.23%), DAX (-1.05%), and FTSE (-0.45%) lead the region lower in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a mixed to green open. The DIA implies a -0.29% open. However, SPY implies a +0.13% open and QQQ implies a +0.66% open at this hour. At the same time, 10-year bond yields are at 4.316% and Oil (WTI) is off by 0.65% to $77.99 per barrel in early trading.
The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, and May PPI (all at 8:30 a.m., and Fed Balance Sheet (4:30 p.m.). We also hear from Fed member Williams (noon) and Treasury Sec. Yellen (noon). There major earnings reports scheduled for before the open include Thursday, KFY and SIG. Then, after the close, ADBE and RH report.
In economic news later this week, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.
In terms of earnings reports later this week, on Friday, there are no reports scheduled.
So far this morning, SIG and KFY reported beats on both the revenue and earnings lines.
In miscellaneous news, AAPL’s two-day rally Tuesday and Wednesday (following its “AI-heavy” developer’s conference) has taken it back to the top spot as most valuable (largest market cap) in the world. AAPL was worth $3.29 trillion at the close mid-week. Elsewhere, the US Treasury expanded sanctions on Russia Wednesday. The new sanctions forced Russia to halt all Dollar-based and Euro-based trading on its main stock exchange. Meanwhile, the head of the Consumer Financial Protection Bureau testified before Congress that it has reported that JPM and PYPL intend to use their customer’s payment data to allow targeted advertising. Chopra called on Congress to pass laws preventing this financial transaction data from being sold for marketing purposes. Finally, an EPA study found the air in southeast Louisiana (Chemical alley) is toxic, containing a thousand times higher levels of ethylene oxide than is considered safe. Long-term exposure to this chemical is known to cause cancer. (Dangerous levels start at 11 parts per trillion, but measured levels reached 40 parts per billion.)
In Fedwatch news, following Wednesday’s announcements and statements, the Fed Funds futures show 91.7% of traders expect no cut in July. The probabilities also show a 61.5% chance of a September cut, a 74.3% probability of a cut by the meeting in November, and a 93.5% likelihood of a cut by the December meeting. With that said, the average of the Fed dot plots now expects one rate cut this year.
With that background, the Bulls gapped QQQ and to a lesser extent SPY higher to start the premarket. (Mostly on an Elon Musk tweet that he is confident he has the votes to get his $56 billion pay package approved later today.) Meanwhile, DIA gapped lower to start the early session. All three of the major index ETFs have printed indecisive black-bodied candles since that start to the morning. Again, SPY and QQQ sit at all-time highs as they wait for the open. So, we have a mixed picture in the short-term, but on numbers, the Bulls have the upper hand, just certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, QQQ is now extended far above its T-line and is badly in need of rest or pullback. Neither of the others are extended from their T-line. However, the T2122 indicator is back in the the center of its mid-range. So, the bottom line is that outside of the QQQ, the market has room to run in either direction. With regard to those 10 big dog tickers, six of the 10 are in the red this morning. However, TSLA (+6.86%) and NVDA (+2.08%) are two of the four in the green (and remember those two trade much more stock than any others on average…many times more in fact). Remember, that we do get PPI numbers and Jobless Claims this morning and that has the potential to move markets (although usually not as much as yesterday’s CPI numbers). So, beware of volatility early.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
The wait is over, and the big data day begins with stock futures putting on a brave face ahead of May’s CPI report and the Federal Reserve’s decision. Meanwhile, Oracle saw its shares surge by 9%, who were more enthused by the company’s announcement of new cloud computing agreements with tech giants Google and OpenAI than concerned by the earnings shortfall reported in Oracle’s most recent quarterly results.
European markets also moved higher ahead of the decision from the U.S. Federal Reserve and the release of the latest inflation data. This positive sentiment comes despite the economic stagnation in the U.K., where growth remained static in April, due to a persistent decline in construction.
China’s inflation rate was recorded at 0.3%, falling short of the anticipated 0.4% forecasted by a Reuters poll. This discrepancy points to a slower-than-expected rise in prices, which could signal a variety of economic factors at play, including subdued consumer demand or government policies aimed at controlling inflation. Meanwhile, Japan experienced a notable uptick in its corporate goods inflation rate, which climbed to 2.4% in May. This increase exceeded market expectations and represented the most rapid escalation since August, indicating heightened cost pressures within the corporate sector.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday there are no notable reports before the bell today. After the bell include AVGO, PLAY, OXM, & CURV.
News & Technicals’
The European Union announced on Wednesday a significant policy shift, deciding to levy increased tariffs on Chinese electric vehicles. According to the EU’s statement, a substantial 38.1% tariff will be applied to battery electric vehicle (BEV) manufacturers from China who failed to participate in the EU’s investigation. Conversely, for those Chinese carmakers who did cooperate with the inquiry but were not selected for “sampling,” a reduced tariff rate of 21% will be imposed. This move underscores the EU’s stringent stance on trade compliance and reflects the growing scrutiny over the competitive practices of the electric vehicle industry, which is central to the global shift towards sustainable transportation.
The upcoming launch of a new headset in China is poised to make a notable entry into the market with a premium pricing strategy. This device will feature applications from local developers, harnessing the technological prowess of Chinese powerhouses such as Tencent and ByteDance. The strategic decision to host apps from these tech giants could enhance the headset’s appeal within the domestic market. Furthermore, the headset’s accelerated entry into international markets, sooner than initially anticipated, may be indicative of a strategic pivot. An analyst suggests that this move could be a response to a tepid demand within the U.S. market, prompting the company to seek growth opportunities elsewhere. This development reflects the dynamic nature of the global tech industry, where consumer interest and market demand can significantly influence product rollouts and pricing decisions.
Amazon Web Services (AWS) is set to expand its global infrastructure footprint by establishing a new region in Taiwan by early 2025. This strategic move is aimed at catering to the high demand for cloud services in the Asia-Pacific region, a testament to the area’s burgeoning digital economy. AWS’s commitment to Taiwan is further underscored by its plan to invest billions of dollars over the next 15 years, signifying a long-term investment in the technological advancement and digital transformation of the region. This announcement follows closely on the heels of AWS’s recent declaration to infuse an additional $9 billion into Singapore, reinforcing its dedication to enhancing cloud infrastructure and services across the Asia-Pacific. These investments reflect AWS’s confidence in the region’s potential and its role as a pivotal hub in the global cloud services landscape.
Wednesday presents a significant day for economic news, beginning with the crucial consumer price index (CPI) reading for May in the morning. This indicator is a key measure of inflation, reflecting changes in the cost of living by tracking the prices paid by consumers for goods and services. The outcome of this reading could have substantial implications for market expectations and economic forecasting. The day concludes with the Federal Reserve’s policy meeting in the afternoon, an event that holds the financial world’s attention. Decisions made during this meeting, particularly regarding interest rates, are pivotal for the economy and can influence everything from consumer spending to business investment. Together, these events form a potent combination that could set the tone for financial markets and economic policies in the coming months.
Anything is possible as traders and investors react to the big data day with a lot at stake. Keep a close eye on the reaction in bond yields and be prepared for sharp price reactions in the indexes. I would not rule significant point whipsaws as the market reacts so take caution in those quick fear of missing out trades.
Stocks gapped lower to start the day Tuesday. SPY gapped down 0.29%, DIA gapped down 0.43%, and QQQ gapped down 0.28%. All three major index ETFs then saw 30 minutes of follow through to the downside. However, this was a Bear trap as price reversed and whiplashed higher. QQQ had recrossed it opening gap by 10:45 a.m., at which time SPY was just crossing up into its gap. Then after a sideways grind along the opening level, SPY started to rally again at 1:30 p.m. and broke above its prior close at 2:20 p.m. From there, SPY and QQQ ground sideways until a day-end rally the last 10 minutes took them out on their highs. Meanwhile, a 75-minute morning rally DIA was slower and did not even cross into its opening gap until 2:25 p.m. and from there ground sideways the rest of the day. This action gave us large, white-body candles with lower wicks in the SPY and QQQ while DIA printed a gap-down large-handle white Hammer. DIA crossed back below its T-line (8ema) while SPY printed a new all-time high close, and QQQ printed both a new intraday high and all-time high close.
On the day, nine of the 10 sectors were in the red with Technology (+0.69%) was way out front as the only green sector while Financial Services (-1.07%) was by far the worst performing sector. At the same time, SPY gained 0.24%, DIA lost 0.34%, and QQQ gained 0.68%. VXX was just on the green side of flat, closing at a very low 11.11 again and T2122 fell back into the oversold territory, to close at 15.45. On the bond front, 10-year bond yields fell to 4.400% and Oil (WTI) was just on the green side of flat at $77.83 per barrel. So, Tuesday was a Bear trap with a significant gap lower and then some follow-through. However, then we reversed and give-or-take some periods of consolidation, the rest of the day was a bullish rally. It is worth noting that AAPL (+7.26%) was the major driver behind the performance of QQQ and SPY. (AAPL also traded more than $35 billion of stock on the day, which is more than three times its average. Meanwhile, SPY traded less than half of its average volume and QQQ traded about one-third of its average volume. For its part, DIA traded a little more than half of its average volume.)
The only major economic news scheduled for Tuesday was limited to EIA Short-Term Energy Outlook, which raised its forecast to even higher records of US oil production. The agency now expects the US output to grow by 310k barrels-per-day to 13.24 million bpd. (About a 40k bpd increase in forecast since May’s version.) For reference, EIA expects global average oil production to be 102.6 million bpd. (So, we produce about 13% of the world’s oil.) At the same time, EIA expects US natural gas production to decrease by 1% in 2024 due to low natural gas prices. Then, after the close, the API Weekly Crude Oil Stocks report showed a larger-than-expected drawdown of 2.428 million bpd (compared to a forecasted 1.750 million bpd draw and far lower than the prior week’s 4.052 million bpd inventory build.
After the close, ADSK and CASY both reported beats on both the revenue and earnings lines. Meanwhile, ORCL missed on both lines. (However, ORCL rallied on new deals with GOOGL and OpenAI. CEO Ellison also told the call that he is open to a deal similar to the GOOGL deal with AMZN.)
In stock news, on Tuesday, GM announced its board had approved a new $6 billion stock buyback program. (Later, GM reduced its forecast for 2024 electric vehicle sales from 200k-300k down to 200k-250k.) As mentioned earlier, AAPL had a huge day on optimism that its “AI” projects announced Monday will drive profits. However, Elon Musk criticized AAPL both Monday and the Tuesday morning, threatening to ban AAPL devices from his X (Twitter) platform if they integrate OpenAI ChatGPT into its OS. At the same time, Bloomberg reported SPOT is planning a new, more expensive tier of subscription. Later, Reuters reported that UBS and CS may complete their merger by July 1 according to multiple company executives. At the same time, BA reported plane deliveries that less than half of its May 2023 deliveries (BA delivered 24 in May, down from 50 in May 2023). Later, AFRM announced that its buy-now-pay-later service will be integrated into AAPL’s Apple Pay later this year. Meanwhile, NTIOF announced it is buying CBWBF for $3.6 billion in what will become one of the largest Canadian regional banks.
Elsewhere, Reuters reported that Taiwan-listed chipmaker MediaTek is developing new ARM-based chips which will run MSFT Windows. This will be a direct response to AAPL using ARM-based chips in their computers the last couple of years. (It could threaten INTC and AMD, which are the major x86 platform chipmakers for Windows.) Later, the Wall Street Journal reported that Shari Redstone (inheritor of PARA control) has halted negotiations with Skydance Media after months and is now focusing on deals with companies interested in her company National Amusements, which owns 77% of PARA voting stock. After the close, BA (and NASA) announced a rescheduling of the return of BA’s Starliner space capsule from the Intl. Space Station. The announcement said reasons for the delay are fixing of faulty Starliner components, weather conditions, and ISS schedule issues (such as spacewalks). On Monday evening, NASA had posted that another helium leak was found in the Starliner propulsion system.
In stock legal and governmental news, on Tuesday, ALK lost its appeal of an $160 million trademark dispute with Virgin Group in the UK. At the same time, LVMUY had its Italian unit placed under court administration over labor exploitation after a probe of how its Chinese-owned subcontractors treated employees. Later, JNJ agreed to pay a $700 million settlement to resolve lawsuits by 42 states and Washington DC. (This has no impact on the 61k remaining lawsuits over the same “talc causing cancer” issue, but is a major step forward.) Later, carmakers are facing 1.5 million lawsuits, totaling $7.6 billion dollars, in the UK for allegedly cheating on diesel emissions tests. This includes F, VLKAF, and MBGAF companies as named defendants. At the same time, in Mexico, the Mexican government announced that VLKAF (Volkswagen) is formally under investigation for labor rights violations. Later, a class action lawsuit was filed against RTX, alleging the company discriminates against job seekers who are older than 40 years old. The suit was filed by AARP and two law firms.
Meanwhile, four FOX board members were subpoenaed in the company’s $2.7 billion defamation lawsuit filed by Smartmatic Voting Systems. At the same time, four more states have joined the original 15 states plus the District of Columbia and the US Dept. of Justice in the antitrust lawsuit against AAPL related to the smartphone app market. At the same time, the Federal Energy Regulatory Commission (FERC) ordered an LNG plant joint venture between BP, SHEL and others to provide customers documents about the mechanical problems that are plaguing the startup of the joint venture LNG plant in Louisiana. The delays have deprived customers (such as BP, ED, REPYY, and others) of billions of dollars in business because they cannot get the LNG to sell. Later, US chemical manufacturing industry groups filed suit against the EPA seeking to block the first-ever rule intended to reduce exposure of drinking water to 15,000 PFAS (so-called forever chemicals). The chemical manufacturers allege that the EPA rule is “arbitrary and beyond the agency’s authority to regulate.” After the close, Elon Musk ask a CA state court to dismiss his lawsuit against OpenAI and its CEO.
Overnight, Asian markets were evenly mixed with six exchanges in the red and six in the green. Taiwan (+1.18%) and South Korea (+0.84%) led gainers while Hong Kong (-1.31%) and Japan (-0.66%) paced the losses. In Europe, the picture is much greener at midday with only two of 15 bourses in the red. The CAC (+0.35%), DAX (+0.53%), and FTSE (+0.58%) lead the region higher in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a start that is modestly on the green side of flat. (Remember this is ahead of CPI data.) The DIA implies a +0.10% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.16% open at this hour. At the same time, 10-year bond yields are down to 4.39% and Oil (WTI) is up 1.16% to $78.81 per barrel in early trading.
The major economic news scheduled for Wednesday includes May Core CPI and May CPI (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1st Year Interest Rate Projection, Q2 2nd Year Interest Rate Projection, and Q2 3rd Year Interest Rate Projection (all at 2 p.m.), and Fed Chair Press Conference (2:30 p.m.). There are no major earnings reports scheduled for before the open. Then, after the close, AVGO and PLAY report.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams. Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.
In terms of earnings reports later this week, on Thursday, KFY, SIG, ADBE, and RH report. Finally, on Friday, there are no reports scheduled.
In miscellaneous news, news reports said Tuesday that Hamas responded positively to the US-backed cease-fire proposal. However, Hamas is seeking some “amendments” to the terms of the deal. Speculation on the potential impacts of a cease-fire on Red Sea shipping and oil markets began immediately. Elsewhere, the EU announced new tariffs on Chinese electric vehicles. These range from 38.1% for SAIC to 20% for Geely, and 17.4% for BYD. The announcement said that TSLA (which also has a plant in China) will get an “individually calculated” tariff rate at a later stage.
In mortgage news, the US national average for a 30-year fixed-rate conforming loan fell from 7.07% to 7.02% last week. This caused a 16% surge in mortgage applications versus the prior week (and also one year prior). This included a 28% pop in home refinance applications and a 9% increase in new home purchase applications.
With that background, the Bull appear to be in control early in the premarket. Both the SPY and QQQ opened the early session higher and have traded up a bit from there. This puts both of them at new all-time highs (if the market were to open at this price). For its part, DIA is also higher, but on more indecisive action as it retests its T-line (8ema) from below. So, the Bulls have the upper hand in the short-term but certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, QQQ is the only major index ETF far from its T-line and that is on the edge of being called too stretched. Meanwhile, the T2122 indicator is back in the top end of its oversold range. The bottom line is that the market has room to run in either direction but the Bulls have more slack to play with here. With regard to those 10 big dog tickers, seven of the 10 are in the green. NVDA (+0.51%), and MSFT (+0.44%) lead the gainers AAPL (-0.39%), fresh off its huge day Tuesday, is the laggard. Remember, this will all change when traders digest the CPI numbers at 8:30 a.m. Don’t be surprised if we see morning volatility, then drift into 2 p.m. and more volatility (even on no change by the Fed) after the FOMC statement as traders start gaming out the July meeting almost immediately from the tea leaves they get today.
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
Traders become cautious as they turn their gaze towards the beginning of the Federal Reserve’s policy meeting in June, and the pending CPI report before the bell Wednesday. This tentative atmosphere follows a day, where both the S&P 500 and Nasdaq Composite managed to eke out modest gains, achieving new record highs, while the Dow Jones index also advanced, albeit marginally, by nearly 0.2%.
European markets faced a downturn on Tuesday, with impending release of U.S. inflation figures. Despite a brief respite from Monday’s bearish mood, the Stoxx 600 index succumbed to selling pressure, dipping 0.7% by 11 a.m. in London. The downward trend was pervasive across all sectors. Meanwhile, the UK’s wage growth remained steadfast at 6%, inflationary trend worries investors.
Asia-Pacific activities were somewhat subdued due to the closure of key Asian markets, including those in Australia, mainland China, Hong Kong, and Taiwan, in observance of local holidays. As the week unfolds, investor attention is set to pivot towards Japan, with the nation’s first-quarter Gross Domestic Product (GDP) figures slated for release on Monday. Additionally, anticipation is building for the Bank of Japan’s interest rate decision on Friday, which could signal shifts in monetary.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include ASO. After the bell include ORCL & CASY.
News & Technicals’
In a surprising turn of events, the U.K. witnessed a slight increase in unemployment rates during the period from February to April, reaching the highest point recorded since September 2021. This unexpected shift has brought the issue of wage growth into sharp focus, particularly as it pertains to earnings excluding bonuses, which have maintained a steady rate of 6%. This persistent wage inflation is seen as a “lingering concern” for the Bank of England, which is currently deliberating the appropriate timing for a reduction in interest rates. Economists are closely monitoring this situation, as the interplay between unemployment and wage growth is critical in shaping the bank’s monetary policy decisions. The central bank’s challenge lies in balancing the need to support economic growth while also containing inflationary pressures, a task made even more complex by the current labor market dynamics.
The European Union is poised to announce interim tariff rates for Chinese electric vehicles, a move that could significantly alter the competitive landscape. Analysts from Citi have projected that the tariff could escalate to approximately 25-30%, a substantial increase from the current rate of 10%. Moreover, there’s a 40% chance that the rates could soar even higher, to between 30-50%. This potential hike reflects the EU’s strategic adjustments in response to the growing presence of Chinese automakers within its borders, many of which are establishing manufacturing plants in Europe. According to Anthony Sassine, a senior investment strategist at KraneShares, the establishment of these factories offers alternative pathways for Chinese automakers, likely accompanied by behind-the-scenes negotiations. His comments, made on CNBC’s “Squawk Box Asia,” underscore the dynamic interplay between trade policies and the automotive industry’s evolving global footprint.
The United Auto Workers (UAW) finds itself under scrutiny as its President, Shawn Fain, becomes the subject of an investigation led by a federal court-appointed monitor. The inquiry, spearheaded by Neil Barofsky, delves into allegations that Fain may have overstepped the bounds of his authority as union president. This probe is set against the backdrop of a 2020 consent decree that was established between the UAW and the U.S. Department of Justice, aiming to ensure proper conduct within the union’s leadership. The timing of this investigation coincides with a critical juncture for the UAW, as it is currently engaged in a significant national campaign to organize workers at nonunion automaker facilities. The outcome of this investigation could have far-reaching implications for the union’s future endeavors and its leadership’s credibility.
With the uncertainty of the pending data traders become cautious as the overnight price action tries to erase most if not all of yesterday’s bullish efforts. Implied volatility hints of possible big point moves in the indexes after the data is revealed so beware of overtrading and have a plan to protect your capital before the days end.
On Monday, markets gave us a modestly bearish start. SPY opened down 0.14%, DIA opened 0.14% lower, and QQQ opened down 0.18%. From there, all three major index ETFs slowly meandered modestly bullishly the rest of the day. (With that said, DIA was much more volatile with a wave lower before really starting is modest rally.) This action gave us white-bodied candles in all three with SPY that could certainly be seen as Bullish Engulfing signals if you were to squint. DIA retested its T-line (8ema) with the opening gap, but passed the test closing back above. SPY and QQQ both closed at new all-time high closes (although neither of them took out Friday’s all-time intraday high). It is also worth noting that if you draw it right (top across 3/28 and 5/23 candles), you could say SPY is right at the top edge of an ascending wedge. This all took place on well below-average volume in all three major index ETFs.
On the day, seven of the 10 sectors were in the green with Energy (+1.36%) and then Utilities (+1.01%) well out front leading the market higher. Meanwhile, Communication Services (-0.77%) was by far the laggard sector. At the same time, SPY gained 0.31%, DIA gained 0.21%, and QQQ gained 0.40%. VXX was just on the red side of flat, closing at a very low 11.11 and T2122 climbed up out of its oversold territory, to close at 27.01. On the bond front, 10-year bond yields rose to reach 4.467% and Oil (WTI) spiked 3.12% to close at $77.89 per barrel. So, Monday was basically a drifting day, where traders were probably biding time until the CPI and Fed announcements on Wednesday. We opened lower, following Europe (which was perhaps rattled by the gains of far-right parties across the EU and the snap elections called in France). From there, prices really just drifted slowly upward the rest of the day.
The only major economic news scheduled for Monday was the New York Fed 1-Year Consumer Inflation Expectations survey results. This came in a tick lower than the May reading at 3.2% (compared to May’s 3.3% expectation). At the same time, the survey found that the three-year inflation expectation remained flat at 2.8%. However, on a 5-year outlook the survey saw inflation expectations rise to 3% from April’s 2.8% projection.
In stock news, on Monday, VSTO rejected a takeover bid from MNC Capital (the offer was $39.50 per share). The VSTO board said the MNC offer would not be superior to the deal to sell its sporting goods division to a Czechoslovakian group for $1.96 billion. (Separately, VSTO also said it had rejected a $2 billion offer from KNIT.) At the same time, activist investor Elliott Investment Mgmt. announced it had taken a $2 billion position in LUV with intentions of ousting the current CEO and other leadership. Later, MS made analyst news when it lowered AMD to hold while simultaneously starting new coverage of AVGO and saying Broadcom is “the strongest AI play.” (AMD lost 4.49% while AVGO gained 2.41% on the day.) At the same time, the UAW announced a new tentative deal had been reached with “Ultium Cells” (a joint venture between GM and Korean giant LG). Later, ROG signed multi-year content licensing deals with WBD and CMCSA’s NBS Universal unit. At the same time, Elon Musk, in his capacity as CEO of X, announced he would ban AAPL devices from the service if AAPL integrates OpenAI at an OS level. (This came after AAPL announced that OpenAI’s ChatGPT was coming to its Siri.) Later, an Israeli financial news website reported that INTC is halting its $25 billion plant expansion in Israel. After the close, Reuters reported that APOS and KD are in talks to make a joint buyout bid for DXC. The article said they were targeting $22 to $25 per share for the offer. (DXC spiked 11.48% on the day, somebody knew something, closing at $18.45/share.)
In stock legal and governmental news, on Monday, the US Supreme Court agreed to hear an appeal seeking to dismiss a lawsuit against META related to its misleading investors about the Cambridge Analytica data-harvesting scandal. At the same time, the Supreme Court refused to hear KR’s appeal seeking to block GRUB from using the fork and knife logo, claiming it is too similar to a KR house brand logo. Meanwhile, the NHTSA announced that STLA is recalling 212k 2022 model SUV and pickup trucks over a software malfunction that may cause the electronic stability control systems to fail. Later, the CA Attorney General sued the oil major firms (XOM, CVX, SHEL, BP, and COP), seeking to force those firms to give up the profits they made while also simultaneously deceiving the public about their contributing to climate change. (This suit is seeking to be similar to the one that crushed the Tobacco industry decades ago.) After the close, the full 11-judge panel of the US 9th Circuit Court of Appeals ruled against UBER (who lost the original case, but won a 3-judge sub-set of the Appeals Court) on their case seeking to challenge a CA law that may force companies to treat drivers as employees rather than independent contractors. Also after the close, the FDA Advisory Panel voted by 11-0 to recommend that LLY’s Alzheimer drug donanemab to receive full-use approval later this year. (If approved, it would be the second Alzheimer’s drug approved to serve the 6 million US patients, along with BIIB’s Leqembi.
Overnight, Asian markets were mixed but leaned toward the red side with eight of the 12 exchanges in the region below water. Australia (-1.33%) and Hong Kong (-1.04% were by far the biggest movers, leading the region lower. In Europe, we see red across the board at midday. The CAC (-1.09%), DAX (-0.73%), and FTSE (-0.90%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day. The DIA implies a -0.40% open, the SPY is implying a -0.34% open, and the QQQ implies a -0.35% open at this hour. At the same time, 10-year bond yields are down a bit to 4.439% and Oil (WTI) is just on the red side of flat at $77.61 per barrel in early trading.
The major economic news scheduled for Tuesday is limited to EIA Short-Term Energy Outlook (noon) and API Weekly Crude Oil Stocks report (4:30 p.m.). Major earnings reports scheduled for before the open is limited to ASO. Then, after the close, CASY and ORCL report.
In economic news later this week, on Wednesday, May Core CPI, May CPI, EIA Weekly Crude Oil Inventories, NY Fed 1-Year Consumer Inflation Expectations, May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1st Year Interest Rate Projection, Q2 2nd Year Interest Rate Projection, Q2 3rd Year Interest Rate Projection, and Fed Chair Press Conference are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams. Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.
In terms of earnings reports later this week, on Wednesday, we hear from AVGO and PLAY. On Thursday, KFY, SIG, ADBE, and RH report. Finally, on Friday, there are no reports scheduled.
In miscellaneous news, ECB President Lagarde sought to tamp down expectations after last week’s first rate cut since 2019. She told a newspaper interview that the Central Bank may wait several meetings between rate cuts, saying that the downward path may be “non-linear.” Elsewhere, Reuters reported Monday evening that an independent federal monitor has launched an investigation of UAW union President Fain over allegations of retaliation against other union leaders. (Among the allegations is the claim of former UAW Secretary/Treasurer that she faced retaliation for refusing to authorize certain expenditures for Fain’s office.)
In other news, Bloomberg reported the results of their survey of public records of pharmacy chains. The survey found that CVS had three times more safety recalls than either WBA or WMT over the past decade. Among CVS’s incidents were recalling house branded child pain and fever medication for being made with contaminated water, children’s drugs that were made with adult potencies, and baby nasal sprays that were recalled because they were made on machines used to produce pesticides.
With that background, the bears are in control of the premarket at this point. All three major index ETFs opened the early session a bit lower and have followed through with black-body candles up to this point. DIA has recrossed below its T-line (8ema) in the premarket this morning. With that said, again, only the DIA is below its T-line as the other two, broader, index ETFs remain above their own. So, the Bulls have the upper hand in the short-term but certainly not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema) and the T2122 indicator is back in the lower end of its mid-range. The bottom line is that the market has room to run in either direction but the Bulls have just a little more slack to play with here. With regard to those 10 big dog tickers, seven of the 10 are in the red. AMD (+0.24%) leads the few gainers while their rival INTC (-0.58%) leads the more numerous losers. Don’t be surprised if we drift or vacillate ahead of Wednesday’s CPI and Fed news.
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 edged lower on Monday with pending inflation figures and FOMC, following a week of gains. The market’s attention is now turning towards the Federal Reserve’s upcoming interest rate decision and the release of May’s inflation figures. Nvidia’s shares dipped by 0.2% as the company’s 10-for-1 stock split came into effect, setting the new trading price at approximately $120 per share after the split
The Asia-Pacific stock markets exhibited a mixed performance at the start of the week, reflecting a cautious sentiment after the U.S. jobs report surpassed expectations. The trading landscape was quieter than usual due to public holidays shuttering markets across Australia, mainland China, Hong Kong, and Taiwan. As the week unfolds, investor focus will pivot to Japan, with the nation’s first-quarter GDP figures slated for release on Monday, setting the stage for the Bank of Japan’s pivotal interest rate decision on Friday.
European equity markets experienced a downturn as investors digested the preliminary outcomes of the EU elections and the unexpected announcement by French President Emmanuel Macron for a snap parliamentary vote. The pan-European Stoxx 600 index declined by 0.6% as of 9:50 a.m. London time, while the euro weakened, falling 0.4% against the U.S. dollar and 0.3% versus the British pound. In France, the CAC 40 index saw a significant drop of 2% during the morning session, with financial sector stocks particularly hard-hit.
Economic Calendar
Earnings Calendar
Notable reports for Monday before the bell include FCEL & LOVE. After the bell include CVGW & YEXT.
News & Technicals’
Toyota’s stock has experienced a significant downturn, dropping over 5% since May 31, which was the final trading session before a scandal emerged on June 3. Mazda’s shares have faced an even steeper decline, plummeting 7.7% since the same date. The turmoil extends beyond these two companies, as a comprehensive audit conducted by the transport ministry uncovered discrepancies in the certification applications of several other major automakers, including Honda, Suzuki, and Yamaha Motor. This revelation has cast a shadow over the automotive sector, raising concerns about regulatory compliance and operational integrity within these well-established brands.
In a bold political maneuver, French President Emmanuel Macron has initiated a snap national election, a move seen as a high-stakes gamble in response to the rising momentum of his adversaries. This decision follows the right-wing National Rally (RN) party’s significant electoral gain, securing around 31% of the votes in the recent European Parliament election, a figure that starkly eclipses the 14.6% garnered by Macron’s pro-European and centrist Renaissance Party and its affiliates. The financial markets reacted swiftly to the political upheaval, with France’s CAC 40 index falling 1.8% in early trading on Monday, and shares of French banks suffering a sharp decline. This confluence of political uncertainty and market volatility underscores the risks inherent in Macron’s strategic choice, which could redefine France’s political landscape.
The postponement of New York City’s congestion pricing initiative, as declared by Governor Kathy Hochul, has brought to light contrasting perspectives on the city’s economic trajectory. The suspension of the proposed $15 fee for daytime drivers entering the city south of 60th Street in Manhattan is a decision grounded in apprehensions about the city’s economic resurgence in the aftermath of Covid-19. While the move aims to alleviate immediate financial strains, critics argue that this short-term fiscal strategy overlooks the long-term economic implications, potentially forfeiting billions in revenue. This debate underscores the delicate balance between fostering economic recovery and implementing sustainable urban policies.
The gold mining sector is facing a challenging period, with the World Gold Council highlighting the industry’s difficulty in maintaining growth in production. The scarcity of new deposits is becoming increasingly apparent, as reflected in the marginal 0.5% increase in mine production in 2023 compared to the previous year. John Reade of the World Gold Council encapsulates the situation succinctly, noting the escalating challenges in discovering, licensing, funding, and managing gold mining operations. This trend signals a critical juncture for the industry, which must now navigate the complexities of resource depletion and the intensifying pursuit of the precious metal.
Uncertainty for the pending inflation figures and FOMC could make for a choppy beginning to the week as investors hurry up and wait. Corporate buybacks are also running out of time as companies will begin entering their blackout periods so don’t be to surprised if we see market breadth a bit lacking as summer trading begins.
Friday saw stocks open modestly lower on stronger-than-expected May Payroll data. SPY opened down 0.18%, DIA started down 0.10%, and QQQ opened 0.11% lower. At that point, all three major index ETFs rallied, recrossing that modest gap and getting to highs at 10:50 a.m. Then all three sold off for 20 minutes part way back to the lows before meandering sideways with a slight bullish trend reaching highs at about 1:25 p.m. From there, all three had another sharp 20-minute move back lower and then bounced before selling off again the last hour. This action gave us indecisive, Doji-like candles in all three major index ETFs. The SPY and QQQ printed white-body, high-wick Doji while the DIA printed a black-body, high-wick Doji. All three remained above their T-line (8ema) with only DIA retesting. However, SPY and QQQ also gave us new all-time highs.
On the day, all 10 sectors were in the red with Basic Materials (-1.92%) way out in front leading the market lower. At the same time, Financial Services (-0.32%) held up better than the other sectors. Meanwhile, SPY lost 0.12%, DIA lost 0.23%, and QQQ lost 0.09%. VXX fell 1.24% to close at a very low 11.11 and T2122 dropped into oversold territory, closing at 13.54. On the bond front, 10-year bond yields surged higher to reach 4.434% and Oil (WTI) dropped 0.37% to close at $75.27 per barrel. So, Friday was a non-committal day that essentially was flat, near the all-time highs in SPY and QQQ. At the same time, DIA continued its begrudging uptrend with its own flat day. On the week, SPY gained 1.25%, DIA gained just 0.26%, and QQQ gained 2.72%.
In other market news, Gold fell by the most in two years on Friday, closing down 3.34%. However, that was nothing compared to Copper which fell 4.94% and Silver which was down 6.69% on the day.
The major economic news scheduled for Friday include May Avg. Hourly Earnings (Month-on-Month) came in a tick hotter than expected at +0.4% (compared to a +0.3% forecast and April’s +0.2% value). On a Year-on-Year basis, May Avg. Hourly Earnings were also up to 4.1% (versus the +3.9% forecast and the April +4.0% reading). At the same time, May Nonfarm Payrolls showed much stronger job growth than predicted at +272k (compared to the +182k forecast and the April +165k number). On the private side, May Private Nonfarm Payrolls were also stronger than anticipated at +229k (versus a forecast of +170k and the April +158k reading). Meanwhile, we saw the May Participation Rate fall to 62.5% (compared to the previous value of 62.7%). This all led to a May Unemployment Rate that ticked higher to 4.0% (versus the forecast and April number of 3.9%). For context, that breaks an all-time record of 27 straight months with Unemployment under 4.0%. Despite conspiracy theorists mistaken beliefs, this sure seems to check out since the recent JOLTs data also showed job openings at a 3-year low. Later, April Consumer Credit came in much lower than predicted at $6.40 billion (compared to a $9.30 billion forecast but far above the March -$1.10 billion value).
In stock news, on Friday, TSLA released a software update for Chinese customers giving them detailed navigation information, including lane-level guidance. (It was reported that BIDU was the supplier of the detailed map data TSLA used.) At the same time, Korean giant Samsung Electronics suffered its first ever strike walk-out by employees. 28k employees rallied on the day, but it was nothing but a PR event since it was held on a public holiday in order to not impact the operations. Later, SAVE said, perhaps ominously, Friday that it is not considering Chapter 11 bankruptcy and is encouraged by its own plan following the JBLU deal being killed. At the same time, Bloomberg reported that WBA had shelved its plans to IPO the Boots portion of its business. However, WBA is still in talks to sell that Boots unit. After the close, it was announced that KKR, CRWD, and GDDY will join the S&P 500 before the market open on June 24. At the same time, RHI, CMA, and ILMN will be dropped by the S&P 500.
In stock legal and governmental news, on Friday, the NHTSA issued a warning to owners of 463k KIA 2020-2024 Telluride SUVs, warning the customers to park outside and away from structures until KIA can complete recall repairs. (The NHTSA said there are reports of under seat fires and melting engines as well as many reports of smoke.) At the same time, a UK Court ruled that V and MA must face a set of lawsuits over the fees it charges British retailers. Later, TSLA filed court documents seeking to pay only a tiny fraction of the legal fees of the lawyers who sued (first in 2018 with the case running until 2023) to reduce CEO Musk’s pay. Those lawyers won, throwing out Musk’s $56 billion pay package. The lawyers billed for $5.6 billion but TSLA is fighting the fees, seeking to pay only $13.6 million. TSLA claims there was no value to the company since Musk has re-submitted his $56 billion pay package and seems to have the votes to get it past by shareholders. (In other words, we are too stupid to take advantage of the court decision, so we should not need to pay the lawyers who won it.) At the same time, a federal court ruled GOOGL will pay a paltry $2.3 million (which will be tripled per law) to cover damages and, as a result, won’t have to stand jury trial in its digital advertising antitrust case. Instead, the antitrust trial over GOOGL dominance of the digital ad market will be heard by the judge (not jury) on Sept. 9.
Meanwhile, a federal judge ruled YELP may sue (for trademark infringement and unfair competition) a business review website that claimed businesses could pay Yelp to get artificially higher star ratings. Later, after months of lobbying by automakers, the NHTSA said on Friday that it will increase federal truck and SUV fuel economy requirements only to 50.4 mpg (fleet average for each carmaker) for 2031. This is BARELY above the previous 49mpg that was requirement for 2026. (The NHTSA original proposal was to hike it to 58 mpg by 2031.) It should be noted that cars will have to average 38 mpg by 2031, which is a 2% per year increase (not starting until 2027) from the current standard. At the same time, the FCC requested a change of venue for the case challenging its reinstitution of net neutrality. (The case was filed by the major telecom companies in Cincinnati, OH with the 6th Circuit and the FCC has now requested moving the case back to Washington DC.) After the close, the FDA approved GSK’s treatment for RSV for patients 50-to-59-years in age. This expands the market which was previously limited to patients 60 and older.
Overnight, Asian markets were mostly in the red with only three of 12 exchanges holding onto green territory. Thailand (-1.06%), Shenzhen (-0.90%), and South Korea (-0.79%) led the region lower. In Europe, the picture is even more bearish with all 15 bourses in the red at midday. The CAC (-1.76%), on EU election results and PM Macron dissolving Parliament to call for snap elections, DAX (-0.66%), and FTSE (-0.34$) lead the region lower 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 -0.17% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.04% open at this hour. At the same time, 10-year bond yields are popping higher to 4.465% and Oil (WTI) is up 0.26% to $75.75 per barrel in early trading.
There is no major economic news scheduled for Monday. There are no major earnings reports scheduled for before the open or after the close Monday.
In economic news later this week, on Tuesday, we get the EIA Short-Term Energy Outlook and API Weekly Crude Oil Stocks report. Then Wednesday, May Core CPI, May CPI, EIA Weekly Crude Oil Inventories, NY Fed 1-Year Consumer Inflation Expectations, May Federal Budget Balance, FOMC Interest Rate Decision, Fed Statement, FOMC Economic Projections, Q2 Current Interest Rate Projection, Q2 1st Year Interest Rate Projection, Q2 2nd Year Interest Rate Projection, Q2 3rd Year Interest Rate Projection, and Fed Chair Press Conference are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, May Core PPI, May PPI, Fed Balance Sheet, and we hear from Fed member Williams. Finally, on Friday, May Import Price Index, May Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and the Fed Monetary Policy Report are reported.
In terms of earnings reports later this week, on Tuesday ASO, CSAY, and ORCL report. Then Wednesday, we hear from AVGO and PLAY. On Thursday, KFY, SIG, ADBE, and RH report. Finally, on Friday, there are no reports scheduled.
In miscellaneous news, C changed its Fed rate cut forecast on Friday. Previously, C had expected a first cut in July, but after the May Payrolls Report, C moved that date to the September meeting. Meanwhile, the Fedwatch tool showed that traders are pricing in only a 49% chance of a September rate cut with November having a 65% probability and December showing an 84.5% chance of a rate cut. Elsewhere, Federal Reserve data released Friday showed that US Household Wealth hit a record $160 trillion in Q1 2024. This was a 3.2% (or $3.8 trillion) increase over Q4’s record value. Most of the gain came from the stock market rally. Separately, CNBC reported that the US created 600,000 new millionaires in 2023, a 7.3% increase in the total to 7.5 million people. (This was using the definition of millionaire as those with $1 million in investible assets, excluding primary residence, collectibles like art, or consumer durables.)
In other news, the Dept. of Energy announced Friday that it has sped up the purchase of oil to replenish the Strategic Petroleum Reserve to take advantage of current lower oil prices. The DoE issued two solicitations to buy 6 million barrels for September – December delivery. This is a massive money-maker by the Biden administration which sold oil in 2022 for an average of $95 per barrel and is replenishing at an average of $77 per barrel. (Current prices are well below that, so the new solicitations should lower the average even more.) This is one of the few times the government ever made money. Furthermore, it makes perfect sense since the US is the world’s largest oil producer, meaning we have much less reason to have a strategic reserve than when we were importing most of our oil in the 1970s. Finally, the Port of Baltimore fully reopened on Saturday for the first time since the Francis Scott Key bridge was struck and collapsed, closing the main channels in the process.
With that background, it looks as if the market is tepidly bearish but largely undecided in the premarket. QQQ made the biggest move, gapping down a bit to start the early session but has rallied the most on a white-body candle. Meanwhile, SPY and DIA are printing Doji-type candles not too far below Friday’s close. The DIA has given back its T-line (8ema) at this point, but not by much. With that said, only the DIA is below its T-line as the other two, broader, index ETFs remain above theirs. So, the Bulls have the upper hand in the short-term but not decisively. At the same time, the mid-term remains bullish in all three major index ETFs and the longer-term market remains very Bullish in trend. In terms of extension, none of the three are too stretched from their T-line (8ema). However, the T2122 indicator is in oversold territory. The bottom line is that the market has room to run in either direction but the Bulls have a little more slack to play with here. With regard to those 10 big dog tickers, they are evenly split. AMD (-2.33%) is the biggest mover of that group. Also, don’t forget that today is NVDA’s first day of trading at the new 10-for-1 split price. (TC2000 still is not reflecting it correctly. It has the correct price, but is indicating a 90% move lower rather than this was a split.)
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
