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.
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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
Markets were indecisive on Thursday. SPY opened up 0.06%, DIA opened +0.04% higher, and opened up 0.16%. From that point, all three major index ETFs meandered sideways the rest of the day. This action gave us indecisive, Spinning Top candles in all three. The SPY printed a small-body, black-body, Spinning Top that stayed well above its T-line (8ema). SPY also printed a new all-time high. DIA printed a white-body Spinning Top that retested but stayed above its T-line. Meanwhile, QQQ gave us a bit larger-body, black-body Spinning Top that stayed well above its T-line. QQQ also printed a new all-time high. This all happened on well-below average volume in all three major index ETFs.
On the day, six of the 10 sectors were in the green with Energy (+0.41%) and Basic Materials (+0.40%) leading the market higher. At the same time, Utilities (-0.98%) was by far the laggard sector. Meanwhile, SPY lost 0.03%, DIA gained 0.20%, and QQQ lost 0.06%. VXX fell 0.53% to close at a low 11.25 and T2122 fell but remains in the center of its mid-range, closing at 43.61. On the bond front, 10-year bond yields fell from the premarket highs to gain only slightly 4.283% and Oil (WTI) gained 2.01% to close at $75.57 per barrel. So, Thursday was very much a wait-and-see day. Traders seem to have been waiting on the May Payrolls reports…or maybe the Fed meeting next week.
The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 229k (compared to a 220k forecast and the prior week’s 221k). This resulted in Weekly Continuing Jobless Claims that were also higher than anticipated at 1,792k (versus a forecast and prior week reading of 1,790k). At the same time, April Imports were up to $338.20 billion (compared to the March value of $327.00 billion). Meanwhile, April Exports were also up to $263.70 billion (versus a previous reading of $257.60 billion). Together, that gave us an April Trade Balance with an increased but lower than expected deficit of $74.60 billion (compared to forecast of -$76.20 billion but up from the March -$68.60 billion). In terms of productivity, the Q1 Nonfarm Productivity was up but a tick lower than was predicted at +0.2% (versus a +0.3% forecast and far less than March’s MASSIVE +3.2% value). We also saw a Q1 Unit Labor Cost that came in significantly below the estimates at +4.0% (compared to at +4.7% forecast but far above Q4’s +0.4%). Then, after the close, the Fed’s Balance Sheet showed a $28 billion decrease from $7.284 trillion to $7.256 trillion.
After the close, DOCU reported beats on both the revenue and earnings lines. At the same time, MTN and NGL missed on both the top and bottom lines. It is worth noting that MTN also lowered its forward guidance.
In stock news, on Thursday, NIO (Chinese electric vehicle maker) announced it now expects Q2 vehicle deliveries to more than double from the same quarter in 2023. (NIO said sales revenue will also more than double to about $2.3 billion.) Later, stock analysts at JPM reported that AVGO has won a chip design contract for GOOGL’s next generation AI chips. Those JPM analysts expect this to result in a 125% increase in revenue for AVGO’s TPU program in 2024 (to $8 billion). At the same time, BA’s Starliner capsule safely docked with the International Space Station. However, the event did not exactly go flawlessly as several of the capsule’s guidance thrusters failed during the docking. Later, Swiss giant Nestle (NSRGY) announced it will buy the rights to MRCB’s first-ever “fecal transplant pill” (yeah, you read that right) for an undisclosed sum. (The pills are an alternative to invasive surgery to transplant biotic fecal materials.) After the close, Bloomberg reported HTZ is close to closing a deal to get $700 million in secured debt to offset the company’s electric vehicle debacle. Later, META’s WhatsApp unit announced AI tools for businesses as it tries to monetize the popular encrypted chat service. At the same time, PIPR announced it has agreed to buy a smaller competitor (Aviditi) for an unspecified sum. Elsewhere, EMR announced it has agreed to sell its remaining 40% stake in a Copeland joint-venture with BX for $3.5 billion. Later, EADSY (Airbus) announced its May plane deliveries fell 16% from the same month in 2023, down to 53 aircraft.
In stock legal and governmental news, on Thursday, AMZN was hit with a $1.3 billion lawsuit by an organization representing small British retailers. The suit alleges AMZN misused data from small retailer sales on its online marketplace to boost AMZN market share and profits from its own competing products. Later, the FDA rescinded its June 2022 ban on Juul Lab’s e-cigarettes. The move does not approve the products (final approval is still pending) but the move does place the Juul products back under scientific review. At the same time, the NFL, and by relationship GOOGL, was hit with a multi-billion-dollar antitrust lawsuit over the legality of “NFL Sunday Ticket.” The case started Thursday. The basis is that NFL sold the rights to the package (out of market game viewing) to GOOGL for $2 billion and GOOGL’s YouTube unit sells the package to viewers for $449/year. The plaintiffs claim the low cost of streaming, each team selling the package separately would offer a fairer market rather than the NFL having and giving a monopoly on the broadcasts to GOOGL.
Elsewhere, the FTC and US Dept. of Justice reached a deal on Thursday that clears the way for antitrust investigations into MSFT, NVDA, and OpenAI related to artificial intelligence. (NVDA has about 80% market share in the very lucrative AI chip market, allowing margins of 70%-80%. Meanwhile, MSFT owns about 49% of OpenAI, which is the undisputed leader in the AI services space.) Later, the US 6th District Court of Appeals announced it will hear a series of telecom industry legal challenges to the FCC reinstatement of net neutrality, which is set to take effect on July 22. At the same time, a federal jury acquitted British tech billionaire Mike Lynch who was accused of fraud related to his selling of his Autonomy company to HPQ for $11 billion in 2011. After the close, the NTSB cited “incorrect assumptions” by an air traffic controller was the cause of a near-collision between jets owned by FDX and LUV in Austin TX in February 2023. (The planes came within 170 feet of each other with the FDX jet forced to fly over the LUV jet on the runway.)
Overnight, Asian markets were mixed but leaned toward the green side. Five of the 12 exchanges in the region were in the red, most notably New Zealand (-0.97%) and Shenzhen (-0.90%). However, India, (+2.05%) and South Korea (+1.23%) led gainers and the region higher. In Europe, we see a much weaker picture at midday. Russia (+1.73%) stands out as the leading gainer (by 1.5%), while the CAC (-1.00%), DAX (-0.95%), and FTSE (-0.63%) lead 11 of the 15 bourses lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed, flat start. The DIA implies a -0.04% open, the SPY is implying a -0.08% open, and the QQQ implies a +0.02% open at this hour. At the same time, 10-year bond yields are up a touch to 4.301% and Oil (WTI) is up 0.58% to $75.99 per barrel in early trading.
The major economic news scheduled for Friday include May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 a.m.), and April Consumer Credit (3 p.m.). There are no major earnings reports scheduled for either before the open or after the close on Friday.
In miscellaneous news, the US Dept. Of Agriculture announced that cattle infected with avian flu (N5H1) have died in five states. Bird flu has infected cattle in 80 herds in the US, across 10 states, since late March. The worst of these seems to be MI, where 10% of infected herds did not recover and died. Elsewhere, the leader of the “Meme stock” short-squeeze craze (who goes by the moniker “Roaring Kitty”) scheduled a YouTube livestream event for noon on Friday. Keith Gill (Roaring Kitty’s real name) recently announced a $116 million investment in GME. GME shares popped 47% on the day and another 17% in afterhours trading on this news.
So far this morning, GME did report misses on both the top and bottom lines. This led to a huge move lower in the premarket, even after the massive gains on anticipation of the Roaring Kitty livestream today. (As of this report, GME is down 9.26% from Thursday’s close, but that is 30% off the afterhours highs.)
In other news, the Israeli invasion of Gaza (and Rafeh) continues as it appears Israeli PM Netanyahu is doing his best to kill the cease-fire / peace deal. Thursday, Israel bombed another UN school (the 108th UN facility Israel has bombed since the October 7 attacks by Hamas). The IDF claimed to have killed three Hamas leaders and as many as “20 or 30” Hamas militants. However, reporters only saw 14 children and a dozen women among the dead with a similar number of women and children among the injured arriving at the hospital afterward. (For what it is worth, those arriving at the hospital for aid reported that only refugees were in the school which was converted into a shelter.) Israel also stopped more than 1,000 aid trucks (food, medical supplies, tents and diapers, and fuel type cargos) at the border as they use food as a weapon. Predictably, Palestinian supporters, including the Houthi who have disrupted Red Sea and Suez Canal trade routes with attacks on commercial shipping, vowed to meet the Israeli escalations with their own escalation. Needless to say, it does not look like the shipping problems (and skyrocketing container rates that result) will abate anytime in the near future.
With that background, it looks as if the market is undecided ahead of the May Payrolls and Unemployment data. All three major index ETFs have wobbled around the break-even area. All three are just on the green side of flat at the moment but not by a substantial amount. All three are also sporting indecisive candle types. With that said, all three are above their T-line (8ema). So, the Bulls are in control of the market in the short-term. 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). The T2122 indicator also remains in the center of its mid-range. The bottom line is that the market has room to run in either direction. With regard to those 10 big dog tickers, eight of the 10 are green, led by META and INTC (both +0.36%). However, the two biggest dogs NVDA (-24%) and TSLA (-0.42%) are the red names on that list. Also, keep in mind that this is Friday and next week will have another Fed meeting. So, prepare your account for the weekend news cycle and don’t be surprised if markets give us a “Wait on the Fed” look after the May data report.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Wednesday gave us a gap higher as traders liked the weaker-than-expected May ADP Employment report. (Presumably, this was because they interpret that as a slowing economy and that moves us closer to a Fed rate cut.) SPY gapped up 0.45%, DIA gapped up 0.28%, and QQQ gapped up 0.81%. From there, SPY and QQQ ground to the side with a modest bearish bent for 45 minutes before starting a steady rally that lasted until all day and accelerated the last 10 minutes, closing at the highs. This action took SPY and QQQ to well above their T-line (8ema) and new all-time highs and new all-time high closes. Meanwhile, DIA sold off from the open for the same 45 minutes, but recrossed its gap and more before starting its own weaker rally that lasted until 2:30 p.m. with a very modest selloff the last 90 minutes of the day. This action gave us significant gap-up, large-body white candles with small lower wicks in the SPY and QQQ. At the same time, DIA printed a gap-up, long-legged Doji that also closed back up above its T-line.
On the day, eight of the 10 sectors were in the green with Technology (+2.59%) way out in front leading the rest of the market higher. At the same time, Utilities (-0.32%) was the laggard and only appreciable down sector. Meanwhile, SPY gained 1.18%, DIA gained 0.26%, and QQQ gained 2.02%. VXX fell 1.82% to close at a low 11.31 and T2122 rose but remains in the center of its mid-range, closing at 59.57. On the bond front, 10-year bond yields dropped sharply again to 4.281% and Oil (WTI) gained 1.23% to close at $74.15 per barrel. So, Wednesday was a strong day for the Bulls with markets appearing to embrace a lower ADP number (possibly believing that brings a Fed rate cut closer). Then other data seemed more positive and that too was met with buying. However, the other driver was NVDA (+5.16%), which surpassed $3 trillion in market cap, passing AAPL to become the second most valuable company behind MSFT (+1.91%). This happened on just below-average volume in the SPY and QQQ but well below-average volume in the DIA.
The major economic news scheduled for Wednesday included May ADP Nonfarm Employment Change, which came in lower than expected at +152k, a four-month low (compared to a forecast of +173k and April’s +188k). Later, the May S&P Global Services PMI was up and as expected at 54.8 (versus a 54.8 forecast and an April reading of 51.3). At the same time, the May S&P Global Composite PMI was a tick higher than anticipated at 54.5 (compared to the 54.4 forecast and up from April’s 51.3 value). Later, the May ISM Non-Mfg. Employment Index was a tick lower than predicted at 47.1 (versus the 47.2 forecast but up from April’s 45.9 reading). The headline May ISM Non-Mfg. PMI was stronger than anticipated at 53.8 (compared to a 51.0 forecast and April’s 49.4 value). At the same time, the May ISM Non-Mfg. Price Index was lower than expected at 58.1 (versus the 59.0 forecast and also versus the April 59.2 reading). Later, the Weekly EIA Crude Oil Inventories showed an unexpected inventory build of 1.233 million barrels (compared to a forecasted drawdown of 2.100 million barrels and the prior week’s 4.156-million-barrel drawdown).
After the close, GEF and LULU reported beats on both the revenue and earnings line. Meanwhile, VSCO missed on revenue while beating on earnings. However, FIVE missed on both the top and bottom lines. It is worth noting that LULU raised its forward guidance while FIVE lowered guidance.
In stock news, on Wednesday, HBI announced a deal to sell its Champion unit to AHRO in a deal worth up to $1.5 billion. (HBI shares spiked 10%, but closed up 4.95% on the news.) At the same time, the CFO of ASML suggested he is positive on orders coming from their top customer TSM (world’s largest chipmaker). This could suggest a strong market in coming quarters for chipmakers and that might mean they expect their customers to buy chips. (ASML shares closed up 9.52% on the day.) Meanwhile, CPB raised its annual forecast, citing expectations for growth in the eat-at-home market. Later, the Wall Street Journal reported that the NBA is nearing a $76 billion broadcast rights deal with AMZN, DIS’s ESPN, and CMCSA’s NBC. At the same time, Reuters reported that DLTR is exploring the sale or spinoff of its Family Dollar unit. (DLTR is trying to sell at a premium while economic conditions are helping discounters.) Later, Reuters reported that LMT has signed a deal to buy 25 space launches by 2029 from private firm Firefly Aerospace for an undisclosed amount.
Elsewhere, At the same time, reports indicated that an WM acquisition of GFL may be just a matter of time after WM bought SRCL for $7.2 billion Monday. Later, WMT announced it will pay bonuses of up to $1,000/year to 700k hourly store workers. The bonuses will cover both full and part-time employees. In addition, WMT store managers will be eligible to earn bonuses of up to 200% of their annual salary. At the same time, AAL offered its flight attendants an immediate 17% raise and an improved profit-sharing plan as part of long-running negotiations. (AAL flight attendants have not had any raise for 5 years and the union was seeking an immediate 33% increase.) After the close, AMZN announced its Zoox unit will begin testing robotaxis in Austin TX and Miami FL. (The announcement comes as an NHTSA investigation into crashes by Zoox robotaxis.) Later, BA finally launched its Starliner spacecraft with a manned crew and reached orbit Wednesday. Finally, note that NVDA will split 10-for-1 on June 7 for owners as of June 6 (due to the T+1 settlement, a buyer must buy Thursday to be an owner prior to the split, which happens at the close Friday and will begin trading at the split price Monday).
In stock legal and governmental news, on Wednesday, the FAA granted a certificate to begin commercial operations to ACHR (electric air taxi company). (ACHR, which is now backed by BA, UAL, and STLA, is the second electric air taxi firm to be approved, behind JOBY which received the approval in 2022.) At the same time, META was sued by a former engineer who alleges he was fired for fixing bugs that exposed company bias because it suppressed Palestinian Instagram posts. Later, MCD lost exclusive rights to the term “Big Mac” for poultry-based products in the EU. Judges ruled against MCD and in favor of an Irish food chain which has long used the term “Supermac” in relation to their poultry products.
Elsewhere, after the close, the FDA Adviser panel unanimously voted to recommend that the 2024-2025 COVID-19 vaccines should target the JN.1 variant (currently the dominant strain). This was good news for NVAX, which could not have sold a vaccine this year if the decision went the other way. However, the final decision will be made by the full FDA in early August (the FDA rules the same way as their advisory panel 88% of the time). At the same time, telecom industry groups filed suit against the FCC seeking to overturn the agency’s recent ruling to reinstate net neutrality (which prevents the telcos like T, VZ, CMCSA, etc.) from charging different rates for and slowing bandwidth of certain classes of internet traffic compared to other classes of traffic. Later, the FAA extended its “minimum NYC flight requirements” at NYC airports through October 2025. The reduction benefits AAL, DAL, and LUV, which have cited a shortage of air traffic controllers and airline staff as the reason they are not using at least 80% of their allotted takeoff/landing slots. At the same time, BRKB’s NetJets luxury plane unit sued its 3,400-member pilot union, alleging defamation related to comments about safety and pilot training.
Overnight, Asian markets were mixed but leaned toward the green side with eight of the 12 regional exchanges above break-even. Taiwan (+1.94%), South Korea (+1.03%), and India (+0.89%) led the region higher. In Europe, we see a heavily green picture at midday with only two of 15 bourses in the red (and only Russia’s -0.65% showing any appreciable loss). The CAC (+0.45%), DAX (+0.72%), and FTSE (+0.34%) lead the region higher in early afternoon trade on this D-day. Meanwhile, in the US, as of 7:30 a.m., Futures are flat and mixed early. The DIA implies a -0.04% open, the SPY is unchanged, and the QQQ implies a +0.08% open at this hour. At the same time, 10-year bonds are up to 4.297% and Oil (WTI) is up six-tenths of a percent to $74.50 per barrel in early trading.
The major economic news scheduled for on Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, April Imports, April Exports, April Trade Balance, Q1 Nonfarm Productivity, and Q1 Unit Labor Cost (all at 8:30 a.m.), and Fed’s Balance Sheet (4:30 p.m.). The major earnings reports scheduled for before the open are limited to ABM, BIG, CIEN, GIII, SJM, NIO, and TTC. Then, after the close, DOCU, NGL, and MTN report.
In economic news later this week, on Friday, May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, May Unemployment Rate, and April Consumer Credit.
In terms of earnings reports later this week, on Friday, there are no major reports.
So far this morning, ABM and CIEN reported beats on both the revenue and earnings lines. Meanwhile, GIII and SJM missed on revenue while beating on earnings. However, BIG and NIO missed on both the top and bottom lines. It is worth noting that ABM, GIII, and NIO raised their forward guidance. (TTC reports at 8:30 a.m.)
In miscellaneous news, BLK and major short-seller Citadel Securities announced they are backing an effort to launch a new stock exchange in TX. The completely online exchange would be based on the idea that corporations are too regulated on NYSE and NASDAQ. The actual term used was “more CEO-friendly.” (Yeah, what the market needs is less oversight of company reporting and transparency.) At the same time, Canada became the first G7 nation to cut interest rates as the Bank of Canada cut rates a quarter percent to 4.75%. Meanwhile, a US appeals court struck down an SEC rule intended to give investors more transparency into hedge funds. Elsewhere, Dec. of Energy Granholm told an interview that the US could revive some recently-retired nuclear power plants to help meet demands for electricity. (About a dozen reactors have closed since 2013, but some have been offline too long to be restarted. Still, some are in a state where restart could quickly be accomplished.)
In other news, GS told clients Wednesday that a “flood of passive equity allocations” will pile into the stock market in early July. The GS trading desk said this will tend to cause a market rally. In addition, GS said they believe seasonal trends and increasing retail investor interest in the market will also buoy stock prices this summer. Elsewhere, the CDC reported that the JN.1 strain of COVID-19 is spreading fast across the US and is now killing hundreds of people each week. Meanwhile, the World Health Organization reported that bird flu (H5N1) has killed one and hospitalized another man in Mexico.
With that background, it looks as if the market is undecided ahead of the ECB Rate decision (almost universally expected to be a cut) at 8:15 a.m. Eastern and US Weekly Jobless numbers at 8:30 a.m. SPY and QQQ gapped up just a bit and DIA gapped down just a bit to start the premarket. However, since then, all three have printed small indecisive Doji-type candles. All three are above their T-line (8ema). So, the Bulls are back in control of the market in the short-term. 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). The T2122 indicator is also back in the center of its mid-range. So, the bottom line is that the market, has room to run. With regard to those 10 big dog tickers, seven of the 10 are red, but none more than a half percent down, in premarket. However, that biggest dog of all, NVDA (+1.89%), is pulling the rest higher as the huge Computex event continues in Taiwan.
Don’t forget to give the Army and Navy their due as we observe the 80th anniversary of D-day. The President is in Normandy paying our respects today along with other leaders and dignitaries from around the world. Cherish any WWII vet you meet, because they won’t be with us long.
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
Markets opened higher to start the day Monday. SPY gapped up 0.31%, DIA opened 0.10% higher, and QQQ gapped up 0.63%. However, these were Bull traps on a volatile day. DIA immediately sold off after the open, recrossing its open gap in the first 5 minutes and continuing South to the lows of the day at 1:15 p.m. Meanwhile, SPY and QQQ held onto their open gaps for 15 minutes before following DIA. They too reached the low of the day at 1:15 p.m. At that point, the volatility switched and the Bulls rallied all three major index ETFs the rest of the day (including a strong push the last 5 minutes). This action gave us black-bodied Hammers in the SPY and DIA with a similar candle in the QQQ (only with a small upper wick). The SPY retested the T-line (8ema) from above and passed the test on the day. QQQ gapped above its T-line then retested that level from above…nearly, but not quite, pushing back above at day end. At the same time, DIA moved toward its T-line but didn’t really test the level Monday.
On the day, seven of the 10 sectors were in the red with Energy (-2.43%) way out in front leading the rest of the market lower (on OPEC+ economic pessimism). At the same time, Healthcare (+0.59%) held up better than the other sectors. Meanwhile, SPY gained 0.08%, DIA lost 0.33%, and QQQ gained 0.154%. VXX fell 0.61% to close at a low 11.46 and T2122 dropped back to the center of its mid-range to close at 46.92. On the bond front, 10-year bond yields dropped sharply to 4.392% and Oil (WTI) plummeted 3.70% to close at $74.14 per barrel. So, Monday was a V-shaped whipsaw day that bounced up off a support level from the March/April highs after the morning post-gap selloff. This happened on well below-average volume all three major index ETFs.
The major economic news scheduled for Monday included May S&P Global Mfg. PMI, which came in a bit stronger than expected at 51.3 (compared to a 50.9 forecast and a 50.0 April reading). Later, April Construction Spending was lower than predicted at -0.1% (versus a +0.2% forecast but better than March’s -0.2% value). At the same time, May ISM Mfg. Employment was stronger than anticipated at 51.1 (compared to the 48.5 forecast a 48.6 April reading). However, the May ISM Mfg. PMI was down at 48.7 (versus the 49.8 forecast and 49.2 April value). The May ISM Mfg. Prices Index was also down at 57.0 (compared to the 60.0 forecast and 60.9 April reading).
In significant market news, the NYSE (owned by ICE) found and resolved a major “technical issue” Monday. This was found to be due to a software update at a data center of the Consolidated Tape Assoc. (which is responsible for distributing real-time price data). The problem included at least 40 tickers, including the major names BRKB and GOLD (which were both shown to be down more than 99% at one point. (While NYSE reimbursed traders for losses due to a glitch in February 2023, there was no word on that for this case yet.)
After the close, LVRO reported misses on both the revenue and earnings lines.
In stock news, on Monday, the trade association representing the major airlines said industry revenue forecasts had risen to just under $1 trillion, with profits on target to reach $30.5 billion for 2024. (This is up from $27.4 billion in 2023 and up dramatically from the group’s $25.7 billion profit forecast released in December.) At the same time, Saudi Aramco sold $12 billion in stock within hours as it raised funds. Later, SAM fell Monday after Japanese Brewer Suntory denied it was in talks to acquire SAM. (SAM was down 10% at one point, but closed down 3.48%.) At the same time, ADSK said it has concluded its audit / internal investigation that led to restatement of prior financial reports. (ADSK popped and was up 10% at one point, closing up 4.57%.) Later, SPOT announced it will raise prices in the US for its premium plans as part of a program to increase profit margins. At the same time, trade publication Beverage Digest reported Monday that the Dr. Pepper (owned by KDP) passed Pepsi (PEP) to become the second most popular soda in the US. Both have about 8% of market share while Coke (KO) has more than 19% share. Diet Coke (7.8%) and Sprite (8.1%) are in fourth and fifth pace and are also owned by KO.
Elsewhere, HZO shares popped Monday on reports that ONEW is in talks to acquire the company. Later, AMKAF (Maersk, the world’s second largest shipping company) said that significant congestion in Singapore and Dubai ports are causing delays. As a result, the company will skip two westbound sailings from China and South Korea that had been scheduled to depart in early July. (This congestion is due to a surge in cargo shipments as well as diversions to avoid the Red Sea because of Houthi attacks.) Still, AMKAF raised its 2024 guidance on the strong shipping demand. After the close, MSFT announced it is cutting hundreds of jobs (as many as 1,500 possible) from its Azure cloud computing and augmented reality divisions. PARA agreed to merger (read acquisition) terms with Skydance. Shareholders will receive $15/share (PARA closed at $12.80) while PARAA voting shares receive $23/share (closed at $22.14). Finally, GOOGL laid off 100 employees from its cloud computing division.
In stock legal and governmental news, on Monday the New York Times reported that MSTR and its founder (Michael Sayler) agreed to a $40 million settlement with the District of Columbia. The settlement ends the largest income tax fraud case in D.C. history. Later, the FDA announced it will vote on whether or not COVID-19 vaccines for 2024-2025 should target the JN.1 variant (currently the most dominant strain). The news was greeted by a rally in NVAX (which had said last month it would only be able offer its vaccine in the US if the FDA accepted the one it is now manufacturing that is based on JN.1. (MRNA, PFE, and BNTX are able to more quickly respond due to a different vaccine type.) At the same time, the Chairman of TM apologized to the government of Japan for years of cheating (manipulating data) on collision safety tests. (At the same time, TM announced they have halted production of Corolla Fielder, Corolla Axio, and Taris Cross models, which were three of the models that TM fudged data to get certified.) TM competitor MZDAF (Mazda) acknowledged the same type of cheating and also halted production on two of its models.
Elsewhere, the US Dept. of Transportation fined four foreign airlines $2.5 million in civil penalties for delays in refunds for flights disrupted by COVID-19. (Thousands of US passengers were forced to wait months for refunds for flight cancellations.) At the same time, Bloomberg reported that a former TD bank employee in FL is under inquiry by the US Dept. of Justice. The report says the employee took $200 bribes to open accounts in order to help move millions of dollars to Columbia while skirting money laundering laws. (This probe is part of a $653 million drug money laundering probe by the DOJ of TD and other banks.) Later, AAL told a US Appeals Court that it will consider a new partnership venture with JBLU if it wins its appeal of the case that ended the alliance of the two in the Northeast corridor. At the same time, PacifiCorp (owned by BRKB) agreed to pay $178 million to resolve 403 claims arising from two 2020 fires (caused by the utility’s equipment). The NHTSA announced an investigation into 75,000 NSANY (Nissan) 2015 Rogue Select vehicles over unintended deployments of side airbags.
Overnight, Asian markets were mixed with five exchanges in the green and seven in the red. India (-5.93%) was the massive mover while Malaysia (+1.17%) and Shenzhen (+1.05%) were the only other moves of more than a percent. (Indian markets were spooked by early returns from their long national election process. So far, it is looking as if PM Modi will win again, as he should given the way he stacked the deck, but his party’s margins are looking to be lower than expected.) In Europe, we see red across the board at midday. The CAC (-0.80%), DAX (-1.05%), and FTSE (-0.49%) 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 -0.39% open, the SPY is implying a -0.45% open, and the QQQ implies a -0.41% open. On the bond front, 10-year bond yields are down to 4.383% and oil (WTI) is down nearly 2% to $72.78 per barrel in early trading.
The major economic news scheduled for on Tuesday includes April Factory Orders and April JOLTs Job Openings (both at 10 a.m.), and Weekly API Crude Oil Stocks (4:30 p.m.). The major earnings reports scheduled for before the open are limited to BBWI, CNM, DBI, DCI, and FERG. Then, after the close, CRWD, HPE, and PVH report.
In economic news later this week, on Wednesday, May ADP Nonfarm Employment Change, May S&P Global Services PMI, May S&P Global Composite PMI, May ISM Non-Mfg. Employment, May ISM Non-Mfg. PMI, and May ISM Non-Mfg. Prices, and Weekly EIA Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, April Imports, April Exports, April Trade Balance, Q1 Nonfarm Productivity, Q1 Unit Labor Cost, and Fed’s Balance Sheet. Finally, on Friday, May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, May Unemployment Rate, and April Consumer Credit.
In terms of earnings reports later this week, on Wednesday we hear from BF.A, CPB, DLTR, DOYU, HIBB, OLLI, REVG, THO, UNFI, FIVE, GEF, LULU, and VSCO. On Thursday, ABM, BIG, CIEN, GIII, SJM, NIO, TTC, DOCU, NGL, and MTN report. Finally, Friday, there are no major reports.
So far this morning, BBWI, DCI, and FERG have all reported beats on the revenue and earnings lines. Meanwhile, DBI missed on both the top and bottom lines. IT is worth noting that DCI raised its forward guidance.
In miscellaneous news, President Biden is expected to announce an Executive Order that will effectively close the US Southern border immediately. The order would halt taking asylum requests at the US-Mexico border once the average daily “encounters” at ports of entry hits 2,500. Taking of the requests would not resume until the average drops to 1,500. Since encounters are well above 2,500 (hitting 4,300 in April) the move would end asylum now. It is worth noting that the last time encounters fell to 1,500 was at the height of the COVID-19 pandemic during the previous administration.) At the same time, the Associated Press reported that CEO pay increased 12.6% on average in 2023. (This compares to a 4.1% increase for the average worker.) This moves the average CEO pay to almost 200 times that of the average employee. (That data is based on a survey of 382 CEOs from S&P 500 companies.)
With that background, it looks as if the large cap index ETFs gapped down to start the premarket while QQQ opened the early session flat. All three have traded lower since that start, printing black-bodied candles so far this morning. (QQQ is retesting and so far failing its T-line from above in Premarket.) With that said, the Bears are still in control of the market in the short-term. 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). The T2122 indicator is also back in the center of its mid-range. So, the bottom line is that the market, has room to run. With regard to those 10 big dog tickers, eight of the 10 are red in premarket with only INTC (+1.58%) making an appreciable move on new AI chip announcements at Computex. (The new Intel Xeon chips are better than their predecessors in performance and power use and will be priced lower than NVDA and AMD competitors. This makes sense since the Xeon chips still are not in the same performance or power efficiency categories as those competing chips.)
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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