The Bears were in control all day Tuesday.  Premarket was already pointing to a big gap lower and then CPI came in hot causing a double-down on the selling.  SPY gapped down 1.27%, DIA opened 0.80% lower, and QQQ gapped down a whopping 1.84%.  At that point, we saw a divergence with SPY and DIA following through to the downside until about 10:10 a.m. From there, SPY and DIA bounced with a modest but steady rally until 11:35 a.m.  Meanwhile, QQQ rallied back about halfway up its gap by 10:45 a.m.  Then, from those respective points, all three major index ETFs sold off steadily until 3:30 p.m.  However, all three also rallied the last 30 minutes of the day popping into the close.  This action gave us a black-body, long-legged Doji in the SPY, a white-body Spinning Top in the QQQ, and a black-bodied, large Hammer-type candle in the DIA.

On the day, all 10 sectors were in the red as Basic Materials (-2.78%) was out in front leading the way lower while Consumer Defensive (-1.30%) and Energy (-1.36%) held up better than the rest.  Meanwhile, the SPY lost 1.38%, the DIA lost 1.36%, and QQQ lost 1.56%.  VXX spiked 7.05% to close at 15.33 and T2122 plummeted all the way back into oversold territory at 11.76. 10-year bond yields spiked massively to 4.324% and Oil (WTI) gained 1.18% to close at $77.82 per barrel.  So, Tuesday was the most bearish day since the last day of January. With that said, both SPY and QQQ did close back up above their trendlines dating back to late-October lows.  All this happened on a little higher-than-normal volume in all three.

The major economic news released Tuesday was limited but included Jan. Core CPI, which came in hot at +0.4% (compared to a +0.3% forecast and the December +0.3% reading).  This amounted to +3.9% on a Year-on-Year basis (versus a +3.7% forecast and the December +3.9% value).  These led to a January CPI of +0.3% (compared to a +0.2% forecast and a +0.2% December reading).  Annualized, that meant a +3.1% CPI reading (versus a +2.9% forecast but still down from December’s +3.4% value).  Then, after the close, Weekly API Crude Oil Stocks showed a huge (much higher-than-expected) inventory build of 8.520 million barrels (compared to a forecast of +2.600 million barrels and the prior week’s +0.674 million barrels).

In Fed Futures news, after the CPI data, Fed Fund Futures showed a 91.5% probability of no rate change in March (3-20-24).  Meanwhile, 8.5% of rate bets are looking for a quarter-point cut at the March FOMC meeting.  However, for the May 1 meeting, only 28.6% expect rates to remain where they are now.  At the same time, 65.5% expect rates to fall a quarter-point and 5.8% expect rates to fall a full half percent by then.  For the mid-June FOMC meeting, 24.4% of futures traders expect Fed Funds Rates to remain at 5.25-5.50%.  However, 60.1% expect that rate to have fallen a quarter of a percent, 14.6% see rates down a half percent by that point, and just less than 1% expect that rates will have fallen three-quarters of a percent by June 12.  Finally, by the July 31 meeting, there are NO futures bets expecting rates to still be where they are now.  13.8% expect rates to have fallen a quarter percent, 44.6% predict a 0.50% reduction, 34.5% foresee three-quarters of a percent reduction at that point, 6.8% of the futures see a full percent reduction then, and 0.4% actually expect the Fed Funds rate to be down 1.25% by that point.

After the close, ABNB, ALSN, BFAM, DVA, WIRE, ENTG, EQT, GDDY, GXO, HE, IOSP, INVH, LYFT, MCY, MGM, REZI, HOOD, RUSHA, SEB, SSNC, MODG, WCN, and ZG all reported beats on both the revenue and earnings lines.  At the same time, AKAM, AIG, CART, MRC, and WELL all missed on revenue while beating on earnings.   On the other side, PRI beat on revenue but missed on earnings.  Unfortunately, QDEL and IAC missed on both the top and bottom lines.  It is worth noting that ALAM, ALSN, DVA, and WCN raised their forward guidance.  However, ENTG, QDEL, and MODG lowered their guidance.

In stock news, just two days after they broadcasted the most widely-watched Super Bowl of all time, (and the company announced record ad revenue) PARA announced it was laying off 800 employees (3% of workforce).  At the same time, ACN announced an agreement to acquire Insight Sourcing (supply chain consultancy) for an undisclosed sum.  Later, BA said its January delivery was only 27 jets (down 29% from January 2023).  BA also said orders were down, booking just three orders (the least since 2019) and they had order cancellations.  This comes amidst the company’s massive quality/production problems.  At the same time, the Wall Street Journal reported Tuesday that MSFT’s AI copilot is getting mixed reviews from users.  Some of the complaints included mistaken of completely fabricated results in Excel and Word.  Later, flight attendants at ALK authorized a strike with union members already picketing at airports in the US, UK, and Guam.  Elsewhere, DIS subsidiary ESPN reportedly has agreed to a six-year extension of their College Football Playoff exclusive broadcast rights valued at $7.8 billion ($1.3 bill per year).  At the same time, AMZN filed a report with the SEC announcing that founder Bezos had concluded another $2.08 billion sale of AMZN stock.  After the close, WELL said it had entered into a definitive agreement to acquire 25 properties for a total of $969 million.  (The projects total 3,900 housing units.)  At the same time, TSLA’s Chinese competitor BYD announced it is opening a factory in Mexico to better serve US markets with lower-priced electric vehicles compared to TSLA and US competitors.  Also after the close, the Wall Street Journal reported that WMT is in talks to buy VZIO (display screen and TV maker).  Reportedly, WMT would use the acquisition to greatly expand in-store display screens to bolster its ad sales to brands like KHC, PG, and many, many others.  Reportedly, WMT’s offer is 30% higher than VZIO’s Monday close.

In stock legal, governmental, and regulatory news, a German court found that TSLA violated German union leadership election rules.  The only immediate sanction is that TSLA can’t hold an election for “work council” leadership immediately (when mostly just management employees have been hired).  Later, the FDA warned of two online vendors selling unapproved and misbranded versions of the active ingredients in NVO’s and LLY’s blockbuster weight loss drugs.  (LLY recently sued medical spas and clinics for selling drugs purported to be the same as the prescription versions.)  At the same time, AAPL (iMessage) and MSFT (Bing search engine) won exclusion from EU Tech rules covering “gatekeeper” platforms.  This gives those products cost and distribution advantages over competing products from GOOGL, META, and others.  Later, Mexican antitrust regulators said an investigation has preliminarily determined that AMZN and MELI (which together control more than 85% of online transactions in the country) are violating antitrust regulations.  The report said the two present “practically insurmountable barriers” to competitors.  At the same time, CPB moved closer to approval of its acquisition of SOVO by certifying FTC compliance requests for the deal.  This leads to a 30-day waiting period (ending March 11), after which the deal can be finalized.  Later, Reuters reported that the CA Air Resources Board had rejected an STLA bid to have rival’s emissions deals with the state voided.  (The rivals involved, whose emissions deals with the state will stand are HMC, VLKAF, VLVLY, and F.)  At the same time, Reuters reported that a US federal judge set an October 2026 trial date for the FTC (and 17 states) antitrust lawsuit against AMZN.

Note that the Chinese markets were closed for Lunar New Year and will stay closed all week as well.  The rest of Asia was mixed but leaned to the red side,  South Korea (-1.10%), Australia (-0.74%), and Japan (-0.69%) led the region lower.  In Europe, we see a completely different story with green across the board at midday.  (This was likely helped by the release of UK inflation data showing prices holding in place in January.)  The CAC (+0.63%), DAX (+0.40%), and FTSE (+0.93%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher to start the day.  DIA implies a +0.25% open, the SPY is implying a +0.49% open, and the QQQ implies a +0.65% open as of this hour.  At the same time, 10-year bond yields are down to 4.304% and Oil (WTI) is up a quarter percent to $78.07 per barrel in early trading.

The major economic news scheduled for Wednesday is limited to EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open include AVTR, AVNT, GOLD, BGC, CAE, CRL, CHEF, CME, CNHI, DBD, ES, GNRC, GPN, IQV, KHC, LAD, LPX, MLM, NHYDY, OC, PSN, R, SITE, SAH, SUN, TMHC, WAB, and WMB.  Then, after the close, ALB, ATUS, AWK, AR, APP, ACGL, CF, CC, CSCO, CW, ET, EQIX, HLF, HUBS, KGC, MTW, MFC, OXY, PTEN, CNXN, ROL, SON, SUM, TWLO, TYL, VTR, and WFG report.

In economic news later this week, on Wednesday EIA Crude Oil Inventories are reported.  On Thursday, we get Initial Weekly Jobless Claims, Weekly Continuing Jobless Claims, Jan. Core Retail Sales, Jan. Retail Sales, Jan. Import Price Index, Jan. Export Price Index, NY Empire State Mfg. Index, Jan. Industrial Production, Dec. Business Inventories, Dec. Retail Inventories, the Fed Balance Sheet, and Fed member Bostic speaks.  Finally, on Friday, Jan. Building Permits, Jan. Housing Starts, Jan. Core PPI, Jan. PPI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and Fed member Daly speaks.

In terms of earnings reports later this week, Thursday, HOUS, ARCH, CBRE, CVE, CRBG, CROX, DE, DNB, EPAM, GTX, GPC, GEO, HBI, H, NSIT, KELYA, KNF, LH, LECO, DNOW, OGN, PBF, PENN, RS, RPRX, SABR, SN, SO, SPTN, STLA, SLVM, TRGP, USFD, VNT, WEN, WST, YETI, ZBRA, AEM, AL, LNT, AMN, AMAT, BIO, BE, ED, DLR, DASH, DKNG, DBX, GLOB, IR, LBTYA, MERC, OPEN, ROKU, TXRH, TOST, TTD, and TROX report.  Finally, on Friday, we hear from ACDVF, AXL, CNK, POR, PPL, TRP, THS, and VMC.

In political news, the Senate passed the $95.3 billion foreign aid package (giving support to Ukraine, Israel, and Taiwan) after having removed the border/immigration provisions the GOP wanted and then decided needed to be removed to preserve the political issue. The bill passed in the Senate by a super-majority of 70-29.  However, Speaker of the House Johnson immediately said he won’t bring the measure to a vote (saying this is because it does not include the border provisions that he and his caucus refused just last week).  Analysts do say there are enough votes in the House to overrule the Speaker’s refusal to bring the bill to a vote, meant to preserve the US position in the world. However, timing will be an issue. Meanwhile, the House did vote to charge (impeach) DHS Sec. Mayorkas by a 214-213 vote. (Four members were out for medical reasons and the rest of the seats were vacant…one flipping toward Dems later Tuesday night.) This political stunt is very likely to be dismissed by a simple majority vote in the Senate.  (Even if a Senate trial were to take place, there is zero chance of the MAGA types gaining a two-thirds vote to actually impeach. However, again, that was never the idea (getting something done).  Instead, the GOP idea is just to have this impeachment as an issue to talk about for three weeks while the Senate is adjourned.)  Meanwhile, we have March 1 and March 8 deadlines for a government shutdown because the House has not found time to do their work from last September.

In stock wild ride news, LYFT had an incredible wild ride Tuesday. It reported after the bell and was up almost 64% in post-market trading on the news. It did settle back down to end up only gaining 13.39%. So, that was definitely a roller coaster. So far in pre-market, LYFT is up another 6.5%.

So far this morning, AVTR, AVNT, CRL, CME, CNHI, GPN, IQV, LPX, NATL, OC, PSN, R, SITE, SONY, TMHC, and WMB all reported beats on both the revenue and earnings lines.  At the same time, GOLD, KHC, LAD, and MLM missed on revenue while beating on earnings.  On the other side, SAH, SUN, and WAB all beat on revenue while missing on earnings. There are no reports of missed on both lines yet today.  It is worth noting that GPN, MLM, SONY, and WMB lowered guidance. However, PSN, raised its forward guidance.

With that background, it looks like the Bulls are trying to reclaim some ground at least in the premarket. All three major index ETFs opened the early session higher and are putting in white body and decisive (still inside day) candles compared to Tuesday’s action. The SPY and QQQ also have both climbed back above their respective T-lines (8ema) this morning. The trend still remains Bullish with only DIA have broken its uptrend (and that break was not yesterday). In terms of extension, none of the three is too far from their 8ema yet. However, T2122 is now well into the oversold area. So, at least a bounce is in order soon, but that does not have to mean today. In addition, there is enough slack for either the Bulls or Bears to push today of they find the energy. Once again, as I’ve been saying for months, keep an eye on those 10 huge tech stocks. If they walk in lock-step, whatever direction they decide to go is very likely to call the tune for the rest of the market. (On Tuesday they walked down and set the tone for everything else.) So far in this early session, they are green across the board.

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

See you in the trading room.

Ed

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

The markets opened flat on Monday.  SPY opened dead flat, DIA opened down 0.08%, and QQQ opened down 0.03%.  From there, all three major index ETFs ground to the side in a tight range for an hour.  Then all three rallied modestly for 60 minutes before grinding sideways again for two hours.  At that point, all three sold off for 90 minutes (with QQQ giving the steepest selling) only to end the day with another hour of sideways drift in a tight range.  This action gave us new all-time highs in all three with DIA also giving us a new all-time high close.  However, all three had large upper wicks.  The DIA printed a Bullish Engulfing, QQQ printed a Bearish Harami, and SPY gave us a Shooting Star without the gap up.  With that said, to me, the biggest thing to take note of were those large upper wicks and far less than average volume in all three of the major index ETFs.

On the day, nine of the 10 sectors were in the green as Energy (+1.16%) and Utilities (+1.14%) led the way higher while Technology (-0.19%) was the only sector lagging in the red.  Meanwhile, the SPY lost 0.04%, the DIA gained 0.36%, and QQQ lost 0.39%.  VXX gained 2.14% to close at 14.32 and T2122 spiked into the top end of overbought territory at 96.60.  10-year bond yields rose a bit to 4.179% and Oil (WTI) was flat at +0.13% to close at $76.94 per barrel.  So, Monday was a dead day in the market with long periods of flat trading and offsetting rises and declines.  There were warning signs of exhaustion in the rally with very low volumes and those high wicks.  However, an argument can be made that traders were just waiting on the CPI data.

The major economic news released Monday was limited to NY Fed 1-Year Consumer Inflation Expectations, which came in flat from January at 3.00%.  Later, the January Federal Budget Balance came in much better than expected at -$22 billion (compared to a -$39.3 billion forecast and December’s massive -$129.0 billion). 

In Fed news, Atlanta Fed President Bostic said Monday afternoon that he anticipates that inflation will be near “the low twos” by the end of 2024.  Bostic continued, “With that outlook, I really see the first move (rate cut) coming sometime in the summer.”

After the close, ANET, SCI, WTS, and WM all reported beats on both the revenue and earnings lines.  Meanwhile, CAR, CDNS, GT, JHX, MEDP, and PFG all missed on revenue while beating on earnings.  Unfortunately, BHF and TSE missed on both the top and bottom lines.  It is worth noting that MEDP raised its forward guidance while PFG lowered guidance.

In stock news, GILD announced that it had reached an agreement to acquire CBAY for $32.50 per share.  (GILD expects the deal to close this quarter.)  Later, FANG said it had agreed to buy Endeavor Energy (private) for $26 billion in cash and stock.  The deal would make FANG the third-largest oil and gas producer in the Permian Basin (behind XOM and CVX).  At the same time, VINO announced it is starting a “strategic asset liquidation” plan.  The move is intended to head off what it says is a plan by other companies to drive down their stock price ahead of a takeover bid.   Later, MLM said it had agreed to acquire 20 operations in the Southeast US from Blue Water Industries for $2.05 billion.  Elsewhere, drivers from UBER, LYFT, DASH, and others announced Monday that they will go on strike on Valentine’s Day to demand fair pay.  Later, BB announced it had concluded 200 job cuts in Q4 and is targeting $100 million in added profit from cost savings (from unspecified means) in 2024.  At the same time, JBLU shares jumped 15% when reports stated that Carl Icahn had taken a 10% stake in the airline, saying that the stock was “undervalued.”

In stock legal, governmental, and regulatory news, on Monday a federal judge ordered Elon Musk to testify in the SEC probe of his takeover of Twitter (now X).  Later, KTOS was awarded a $877 million contract with the “Space Systems Command” (Space Force). At the same time, a federal judge ruled that WMT and ENR must face a lawsuit alleging they violated antitrust laws by conspiring to raise the prices of disposable batteries.  Later, the NHTSA said it had closed an investigation into F 2010 Fusion cars related to power steering issues.  At the same time, AWK filed an appeal contesting a December ruling.  The decision could change the management of water in CA’s Monterey County.  Later, in Germany, a ban went into effect against importing, making, or selling INTC server chips which had been found to violate the patent rights of R2 Semiconductors.  (This impacts INTC, DELL, HPQ, HPE, etc. who sell INTC server chips in Germany.)   At the same time, BRKB-owned Jazwares filed suit against BBW alleging that BBW based its new line of plush animals are knockoffs that infringe on its intellectual property rights.  Later, a federal judge blocked an OH law that prevented the access of children 16 and under to META’s Facebook, TikTok, GOOGL’s YouTube, and X without prior parental consent.  After the close, the Attorney General of KY filed suit against KR, claiming the company’s pharmacies contributed to the state’s opioid addiction crisis with more than 11% of all opioid pills in the state prescribed by the retailer. 

Note that the Chinese markets were closed for Lunar New Year and will stay closed all week as well.  Meanwhile, Japan (+2.89%), Malaysia (+1.26%), and South Korea (+1.12%) led the rest of the region higher.  In Europe, we see the opposite picture taking shape with all but two of the 15 bourses in the red.  The CAC (-0.46%), DAX (-0.57%), and FTSE (-0.30%) 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 (ahead of CPI).  The DIA implies a -0.20% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.86% open at this hour.  At the same time, 10-year bond yields are back to 4.16% and Oil (WTI) is up 0.73% to $77.47 per barrel in early trading.

The major economic news scheduled for Tuesday is limited, but important with Jan. Core CPI and Jan. CPI (both at 8:30 a.m.), and Weekly API Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include AN, BIIB, BRKR, KO, DDOG, ECL, FELE, GFS, HAS, HRI, HWM, INCY, JHX, LCII, LDOS, MAR, TAP, MCO, QSR, SHOP, TRU, WSO, WCC, KLG, and ZTS.  Then, after the close, ABNB, AKAM, ALSN, AMX, AIG, BFAM, DVA, ENTG, EQT, GDDY, GXO, IAC, IOSP, CART, INVH, LYFT, MCY, MGM, MRC, NGD, PRI, QDEL, REZI, SSNC, MODG, WCN, WELL, and ZG report.

In economic news later this week, on Wednesday EIA Crude Oil Inventories are reported.  On Thursday, we get Initial Weekly Jobless Claims, Weekly Continuing Jobless Claims, Jan. Core Retail Sales, Jan. Retail Sales, Jan. Import Price Index, Jan. Export Price Index, NY Empire State Mfg. Index, Jan. Industrial Production, Dec. Business Inventories, Dec. Retail Inventories, the Fed Balance Sheet, and Fed member Bostic speaks.  Finally, on Friday, Jan. Building Permits, Jan. Housing Starts, Jan. Core PPI, Jan. PPI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and Fed member Daly speaks.

In terms of earnings reports later this week, on Wednesday, we hear from AVTR, AVNT, GOLD, BGC, CAE, CRL, CHEF, CME, CNHI, DBD, ES, GNRC, GPN, IQV, KHC, LAD, LPX, MLM, NHYDY, OC, PSN, R, SITE, SAH, SUN, TMHC, WAB, WMB, ALB, ATUS, AWK, AR, APP, ACGL, CF, CC, CSCO, CW, ET, EQIX, HLF, HUBS, KGC, MTW, MFC, OXY, PTEN, CNXN, ROL, SON, SUM, TWLO, TYL, VTR, and WFG.  On Thursday, HOUS, ARCH, CBRE, CVE, CRBG, CROX, DE, DNB, EPAM, GTX, GPC, GEO, HBI, H, NSIT, KELYA, KNF, LH, LECO, DNOW, OGN, PBF, PENN, RS, RPRX, SABR, SN, SO, SPTN, STLA, SLVM, TRGP, USFD, VNT, WEN, WST, YETI, ZBRA, AEM, AL, LNT, AMN, AMAT, BIO, BE, ED, DLR, DASH, DKNG, DBX, GLOB, IR, LBTYA, MERC, OPEN, ROKU, TXRH, TOST, TTD, and TROX report.  Finally, on Friday, we hear from ACDVF, AXL, CNK, POR, PPL, TRP, THS, and VMC.

In miscellaneous news, C told its bond trading customers to be cautious in their bets on the Fed’s rate easing.  The bank recommended trades take a hedged approach to such investments, warning we could see something akin to 1998 when the FOMC did a quick succession of cuts.  However, they warn traders to not be surprised if there is a rate hike in the mix. Elsewhere, Bitcoin closed above $50,000 for the first time in two years on Monday.  At the same time, a survey by BNPQY (BNP Paribas) found that hedge funds (in particular multi-strategy funds) are now returning just $0.41 to their clients for every $1.00 the fund makes.  This is reflecting a new trend where popular funds now have a blank check for expenses. Finally, the US Senate approved a $95 billion bill to provide aid to Ukraine, Israel, and Taiwan. (This is the same bill as a week ago but stripped of the border policy and appropriates that the GOP wants but that the MAGA types don’t want to pass so they can preserve the issue to run on in 2024.) The bill passed 70-29 with strong bipartisan support. However, the House GOP caucus is such a mess that passage in the House remains in serious doubt. (The MAGA types there have said they won’t pass aid without the border components, but killed the earlier bill that gave them what they wanted because their boss wants the issue more than a solution. So, they are in a “damned if you do and damned if you don’t” situation of their own making related to passage of the needed bill.)

So far this morning, AN, BRKR, KO, DDOG, GFS, HWM, LDOS, TAP, QSR, SHOP, and TRU all reported beats on both the revenue and earnings lines.  Meanwhile, MAR missed on revenue while beating on earnings.  On the other side, INCY, MCO, and ZTS beat on revenue while missing on earnings.  Unfortunately, BIIB, HAS, HRI, LCII, WSO, and WCC missed on both the top and bottom lines.  It is worth noting that DDOG, GFS, MAR, and MCO lowered their forward guidance.  (ECL, FELE, JHX, and KLG report at 8 a.m.)

With that background, it looks like the Bears are in control this morning, energized by those high wicks from Monday. Ahead of the CPI print, the Bears are pressing especially hard in the QQQ giving a gap lower to start the premarket and a large red-body candle that is now near a retest of its T-line (8ema) from above. Still, all three major index ETFs remain above their T-line (8ema). So, the Bulls still have control of the trend in both the long and short term. In terms of extension, none of the three is too far from their 8ema yet. However, T2122 is deep into that indicator’s overbought territory. This means the market still has slack to work with if either side of the market gains traction, but the Bears have more room to work with. As I have been saying for months, keep an eye on those 10 huge tech stocks. If they walk in lock-step, whatever direction they decide to go is very likely to call the tune for the rest of the market. And so far in this early session, they are all flashing bright red.

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

See you in the trading room.

Ed

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

The Bulls were in charge again on Friday.  SPY opened up 0.06%, DIA opened down 0.05%, and QQQ gapped up 0.27%.  At that point, the SPY and QQQ continued on slow, steady rally until 3 p.m. with some very modest profit-taking the last hour.  At the same time, DIA sold off slowly until noon, rallied slowly until 3 p.m. (just reaching the open level) and then took profits more strongly than the other indexes the last hour.  This action gave us large white-bodied candles with small upper wicks in the SPY and QQQ.  Meanwhile, DIA printed a black-bodied Doji candle.  SPY and QQQ printed yet another new all-time high and new all-time high close.  (SPY closed above 5000 for the first time.)  Again, this happened on very low volume in all three major index ETFs.

On the day, eight of the 10 sectors were in the green as Technology (+1.38%) again was well out in front leading the market higher. At the same time, Energy (-0.73%) and Consumer Defensive (-0.61%) were the only sectors in the red.  Meanwhile, the SPY gained 0.57%, the DIA lost 0.16%, and QQQ gained 0.98%.  VXX gained 0.72% to close at 14.02 and T2122 climbed again but remained in the mid-range (just outside of the overbought area) at 78.12.  10-year bond yields rose a bit to 4.173% and Oil (WTI) gained 0.42% to close at $76.54 per barrel.  So, the bulls ended the week again on its fourth higher close in the SPY.  However, that’s the least of the streaks. SPY, DIA, and QQQ are all on a five-week winning streak…and 14 out of 15 weeks closing higher.

There was no major economic news released on Friday.  However, the Bureau of Labor Statistics did revise downward the CPI data for December.  The new CPI data showed a +0.2% increase for December, down from the earlier +0.3% estimate.  However, at the same time, BLS revised the November number up from 0.1% to 0.2%.

In Fed news, Dallas Fed President Logan said Friday that risks are more balanced now and this gives the FOMC room to be patient on rate cuts.  Logan said that there had been “tremendous progress” on bringing down inflation, but she still wants to see more evidence before starting rate cuts.  She said, “The risks that I’m seeing in the economy are becoming more in balance, but I do think we need to take time here to continue to look at the data…I’m really not seeing any urgency to make any additional adjustments at this time.”

In stock news, ASTL (Canadian steelmaker) reported a significant “incident” at its north Casthouse blast furnace complex.  The incident affected 12 workers with at least five requiring medical treatment.  At the same time, STLA’s Chrysler brand announced it will unveil a new concept car on Tuesday that will be a “sustainable design” and be the basis for a fully electrified Chrysler future.  Later, BTTR announced it had acquired AIMFF in a move that positions it well for developing a weight-loss supplement for pets.  (This will compete with PFE who made a similar acquisition to move into the same segment.)  At the same time, ATR and BIIB announced a partnership to build digital health solutions for neurological diseases.  Later, DIS announced a new AI tool designed to match advertiser commercial messages to the mood created by specific program scenes.  At midday, ASML announced they are gearing up the production line for a new $350 million “High NA EUV” chipmaking machine.  The product will enable TSM, NVDA, INTC, and AMD to make new high-end, higher-density chips. At the same time, Reuters reported an exclusive the CSCO will announce a restructuring plan that will include laying off thousands of employees.  The report said a public announcement is likely to come at CSCO’s earnings call on Feb. 14.  Later, AXP announced that its 2023 restructuring-related costs amounted to $277 million.  Elsewhere, HUBB finalized its divestiture of its residential lighting unit to KWAC for an undisclosed sum.  At the same time, APLD announced it will take a revenue hit from the loss of revenue due to an ongoing power outage (since January 18) data center.  Then, on Saturday, Reuters reported that AMZN founder Bezos sold $2 billion worth of AMZN stock last week per regulatory filings.  (Bezos said a week ago that he would sell roughly 50 million shares by the end of January 2025.)  Later Saturday, TSLA announced temporary 2% – 2.3% price cuts on Model Y cars in the US (valid until Feb. 29).

In stock legal, governmental, and regulatory news, on Friday, the FDA granted “orphan drug” status to IRON’s DISC-3405 investigational therapy.  This grants the company development assistance, tax credits, fee waivers, and 7 years of market exclusivity. At the same time, the FAA accepted the propulsion system certification plan from JOBY.  This sets a clear path to commercial passenger use of JOBY’s electric air taxi vehicles.  Later, the FDA approved Phase 2 clinical trials of OKYO’s ocular investigational drug.  At the same time, a proposed class-action suit was filed against AMZN for allegedly violating consumer protection laws by steering consumers to higher-priced products by hiding lower-price options.  Later, the SEC announced Wall Street firms have agreed to pay $81 million in fines for record-keeping failure.  The violators include USB and OPY.  After the close, AAPL made a court filing indicating it plans to settle a lawsuit that alleged it had stolen trade secrets from startup Rivos.  (Just another in a long line of firms that AAPL has “allegedly” stolen technology from.)  Also after the close, Reuters reported that FAA Chief Whitaker and other top administrators of the agency will be in Seattle to meet with BA executives early this week.

Note that most Asian markets were closed for the Lunar New Year and will stay closed all week as well.  In Europe, the bourses are mostly green at midday with just four of the 15 in the red.  The CAC (+0.32%), DAX (+0.32%), and FTSE (-0.14%) lead the region on volume as usual in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start to the week just on the red side of flat.  The DIA implies a -0.08% open, the SPY is implying a -0.02% open, and the QQQ implies a -0.01% open at this hour.  At the same time, 10-year bond yields are down a touch to 4.16% and Oil (WTI) is off 1.16% to $75.94 per barrel in early trading.

The major economic news scheduled for Monday is limited to NY Fed 1-Year Consumer Inflation Expectations (11 a.m.) and Jan. Federal Budget Balance.  However, we also hear from Fed member Kashkari (1 p.m.).  The major earnings reports scheduled for before the open are limited to TRMB. Then, after the close, ANET, CAR, BHF, CDNS, GT, MEDP, PFG, SCI, TSE, WTS, and WM report.

In economic news later this week, on Tuesday we get Jan. Core CPI, Jan. CPI, and Weekly API Crude Oil Stocks.  Then, Wednesday EIA Crude Oil Inventories are reported.  On Thursday, we get Initial Weekly Jobless Claims, Weekly Continuing Jobless Claims, Jan. Core Retail Sales, Jan. Retail Sales, Jan. Import Price Index, Jan. Export Price Index, NY Empire State Mfg. Index, Jan. Industrial Production, Dec. Business Inventories, Dec. Retail Inventories, the Fed Balance Sheet, and Fed member Bostic speaks.  Finally, on Friday, Jan. Building Permits, Jan. Housing Starts, Jan. Core PPI, Jan. PPI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and Fed member Daly speaks.

In terms of earnings reports later this week, on Tuesday, AN, BIIB, BRKR, KO, DDOG, ECL, FELE, GFS, HAS, HRI, HWM, INCY, JHX, LCII, LDOS, MAR, TAP, MCO, QSR, SHOP, TRU, WSO, WCC, KLG, ZTS, ABNB, AKAM, ALSN, AMX, AIG, BFAM, DVA, ENTG, EQT, GDDY, GXO, IAC, IOSP, CART, INVH, LYFT, MCY, MGM, MRC, NGD, PRI, QDEL, REZI, SSNC, MODG, WCN, WELL, and ZG report.   Then Wednesday, we hear from AVTR, AVNT, GOLD, BGC, CAE, CRL, CHEF, CME, CNHI, DBD, ES, GNRC, GPN, IQV, KHC, LAD, LPX, MLM, NHYDY, OC, PSN, R, SITE, SAH, SUN, TMHC, WAB, WMB, ALB, ATUS, AWK, AR, APP, ACGL, CF, CC, CSCO, CW, ET, EQIX, HLF, HUBS, KGC, MTW, MFC, OXY, PTEN, CNXN, ROL, SON, SUM, TWLO, TYL, VTR, and WFG.  On Thursday, HOUS, ARCH, CBRE, CVE, CRBG, CROX, DE, DNB, EPAM, GTX, GPC, GEO, HBI, H, NSIT, KELYA, KNF, LH, LECO, DNOW, OGN, PBF, PENN, RS, RPRX, SABR, SN, SO, SPTN, STLA, SLVM, TRGP, USFD, VNT, WEN, WST, YETI, ZBRA, AEM, AL, LNT, AMN, AMAT, BIO, BE, ED, DLR, DASH, DKNG, DBX, GLOB, IR, LBTYA, MERC, OPEN, ROKU, TXRH, TOST, TTD, and TROX report.  Finally, on Friday, we hear from ACDVF, AXL, CNK, POR, PPL, TRP, THS, and VMC.

In miscellaneous news, climate researcher Michael Mann (University of PA) was awarded $1 million for libel and defamation by two right-wing, climate-denying writers.  It took Mann 12 years of legal work, but just like the defamation suit that FOX settled last year, it is another small step in favor of truth.  Elsewhere, Reuters reported Friday that Chinese banks issued a new all-time high record ($683.7 billion) in loans during January.  This was more than four times the amount loaned in December and came as the Chinese central bank provided more support measures to banks.  Meanwhile, in the US, the Washington Post reported that OpenAI CEO Altman is seeking $7 trillion in funding (yes, trillion) to begin creating and supplying the company’s own AI semiconductor chips.  This is a massive effort.  (For reference, “only” $527 billion worth of chips were sold globally in 2023, in total.)  In addition, this would create a direct competitor to the two main suppliers of chips to all AI users (NVDA and AMD).  Nonetheless, Altman is meeting with various Silicon Valley venture capitalists and had meetings with the UAE and Saudi Arabian sovereign funds last week.  He has also met with SoftBank (majority owners of ARM) and the world’s largest chipmaker TSM.  (It is worth keeping in mind that Altman has the backing of MSFT.)  The Washington Post reported Friday he was also in contact with the US government related to where to build semiconductor Fabs (factories). Finally, Bloomberg reports that the National Assn. for Business Economics survey released today found that 21% of economists feel the Fed policy is “too restrictive.” (It is worth noting that the survey was conducted just before the last FOMC meeting.) This is the most disagreement with the Fed policy from those economists since 2011.

In geopolitical news, on Friday Israeli PM Netanyahu ordered his military to prepare a plan to evacuate Rafah.  (Rafah is the Southernmost and largest city in the Gaza Strip that has not yet been occupied by Israeli ground troops.  It is also the main border crossing into Egypt through which the vast majority of humanitarian aid flows.)  The media speculates this is a precursor to seizing what is left of that city.  (Rafah is already under air and artillery attacks.)  This led to more Oil market fear of an expanded conflict. Then, on Saturday, Reuters reported that a US-led coalition) air defenses (including Kurdish forces, who suffered six dead in the incident) stopped a six-drone attack on a COP oil field in Syria.  The report claimed the attack came from an Iranian-backed militia in Syria. On Sunday, the Israeli PM told US morning news shows that his military was being very careful and that the ratio of dead civilians to dead Hamas fighters was 1-to-1. If that were somehow true (very, very unlikely) Hamas had a much larger militia than anyone had ever realized since a little over 28,000 Palestinians are confirmed dead and almost 68,000 injured.

With that background, it looks like the Bulls are rebounding slightly after the Bears started the premarket with a modest lead in their race. All three major index ETFs are printing small, white-body candles in the early session and are little changed from Friday’s close. All three also remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the long and short term. In terms of extension, none of the three is too far from their 8ema yet and the T2122 indicator remains just outside of overbought territory at the top of its midrange. This means the market still has slack to work with if either side of the market gains traction. As I have been saying for months, keep an eye on those 10 huge tech stocks. If they walk in lock-step, whatever direction they decide to go is very likely to call the tune for the rest of the market.

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

See you in the trading room.

Ed

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

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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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