Markets traded dead flat on Wednesday until the Fed statements at 2 p.m.  The SPY opened unchanged, DIA gapped down 0.21%, and gapped up 0.30%.  However, from that open we saw very flat trading in all three major index ETFs until 2 p.m. Then, all three spiked for five minutes, chopped sideways for 25 minutes, sold off another five minutes.  At that point Fed Chair Powell began to speak and the Bulls were off to the races the rest of the day.  All three major index ETFs closed very near their highs of the day.  The action gave us large, white-bodied, candles with small lower wicks and almost no upper wick.  SPY and DIA both closed at new all-time high closes after printing new all-time highs.  QQQ closed within 0.40% of its all-time high close.  All three crossed back above their T-line (8ema) during the session.

On the day, all 10 sectors were green as Basic Materials (+1.93%) was out in front leading the market higher and Healthcare (+0.09%) was by far the laggard sector.  At the same time, SPY gained 0.92%, DIA gained 1.05%, and QQQ gained 1.19%. VXX fell another 2.08% to close at 13.19 and T2122 shot up into the top part of overbought territory at 95.36.  10-year bond yields backed off again to 4.277% and Oil (WTI) fell 1.95% to close at $81.84 per barrel.  So, on the March Fed Day, there was nothing like bad news or at least unexpected news.  That was the only excuse the Bulls needed to run hard again…after waiting for the Fed to make sure.  This all happened less than average volume in the SPY and QQQ and slightly above-average volume in the DIA. 

The major economic news scheduled for Wednesday included EIA Weekly Crude Oil Inventories, which came in with a larger drawdown than expected at -1.952 million barrels (compared to a forecast of -0.900 million barrels and a bit more than the prior week’s 1.536-million-barrel drawdown).  Later, the Fed held the Fed Funds Rate at 5.50%.  Meanwhile, the Fed Q1 Current Interest Rate came in at 4.6%, down half of a percent from the 5.4% in December.  At the same time, the Fed Q1 1^st Year Interest Rate Projection was 3.9%, down sharply from December’s 4.6% projection.  Looking out further, the Fed Q1 2^nd Year Interest Rate Projection also fell a half percent to 3.1% from December’s 3.6%.  Finally, Fed Q1 Longer Term Interest Rate Projection rose a tick to 2.6%, up from 2.5% in December.

In Fed news, as expected the FOMC kept its benchmark Fed Funds Rates steady at 5.25% – 5.50% (a 23-year high).  The Fed indicated that, on average, they still expect three rate cuts in 2024.  (The majority of voters favor three.)  This was a relief for the markets that had started to believe the naysayers who had already begun talking of two or even just one cut this year.  Still, the FOMC is more hawkish than in recent statements and the indication is the half of the board members (voters and non-voters) expect less than three cuts. Interestingly, the dot plots (average interest rate forecasts of FOMC members) found current rates significantly lower than they did in December.  They also expect one year and two years out interest rates also to be significantly lower than they had predicted in December.  However, their forecast for long-term interest rates increased by a tenth of a percent.  All-in-all, some analysts, including CNBC’s Steve Leesman seemed to think nothing major had changed, with the exception that the Fed believes the job market is still strong and not as much moderating as the previous statement.  He said there was greater consensus among FOMC members with closer clustering of dot plot inputs.  This could be seen as just a bit more hawkish in the longer-term, but with a dovish mid-term view (removing one rate cut next year while leaving 2024 alone).

During his presser, Fed Chair Powell said, “The economy is strong, inflation has come way down,” … “and that gives us the ability to approach this question carefully and feel more confident that inflation is moving down sustainably at 2% when we take that step to begin dialing back our restrictive policy.”  “(Right now) we believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”  Also as expected, Powell said “We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.” … “(However) if there were significant weakening in the data, particularly in the labor market, that could also be a reason for us to begin the process of reducing rates.”  While addressing the future, Powell said “My instinct would be that rates will not go back down to the very low levels that prevailed before the onset of the coronavirus pandemic in the spring of 2020.”  (This seemed to indicate that Powell felt rates had been kept too low for too long prior to the pandemic.)  With regard to Fed Balance Sheet reductions (quantitative tightening), the Chair said “It will be appropriate to slow the pace of run-off fairly soon.” 

After the close, CHWY, GES, KBH, LX, and MU all reported beats on both revenue and earnings.  Meanwhile, SCS, and WOR reported misses on revenue while beating on earnings.  However, FIVE missed on both the top and bottom line.  It is worth noting that FIVE lowered its guidance while MU raised its forward guidance.

In stock news, on Wednesday, APA announced it has sold its entire stake of KNTK for $441 million.  Later, Reuters reported that 20,000 LUV flight attendants have reached another tentative deal with the company and the union will vote on the new deal, after rejecting the previous tentative deal.  (The rejected deal offered a 20% raise for 2024 and 3% annual raises after that through 2028.)  At the same time, INTC announced a plant to invest $100 billion in four states between now and 2027 to revitalize US chip manufacturing. Later, Reuters reported APO offered $11 billion for PARA’s Hollywood film studio.  At the same time, SNPS announced it would be seeking a buyer for its Software Integrity business unit.  Later, UNH said it has restored its medical claim processing services (using AMZN cloud services) and will begin working on the month backlog of claims.

In stock legal and governmental news, on Wednesday, VZ announced it will begin complying with a 2022 FCC mandate that requires broadband providers to display a comparison label (similar to food nutrition labels).  VZ is the first company to comply with smaller internet providers having until October to comply.  At the same time, the NHTSA announced that MBGAF (Mercedes Benz) will recall 116k vehicles related to an unsecured 48v cable.  Later, the FDA approved a Phase II clinical trial for PBYI’s breast cancer treatment.  At the same time, the French competition authority hit GOOGL with a $272 million fine for breaches of intellectual property rules related to its dealings with media publishers (stealing content to feed AI).  Later, INTC signed an agreement with the Biden Administration to receive $8.5 billion in grants and up to $11 billion in loans for building plants in AZ, OH, OR, and NM.  Elsewhere, in the EU, META, MSFT, MTCH, and Elon Musk’s X filed amicus briefs supporting Epic Games and claiming that AAPL had failed to honor a court-ordered injunction governing payments from its app store.  Later, the FCC announced it is investigating AMZN for selling illegal electronic products, such as Wifi, GPS, and security camera jammers.  After the close, Bloomberg reported that the Dept. of Justice would sue AAPL for antitrust violations by blocking competitors from accessing hardware and software features on its iPhone.

Overnight, Asian markets leaned heavily to the green side.  South Korea (+2.41%), Japan (+2.03%), and Hong Kong (+1.93%) led the way for the 10 gaining exchanges with only Shenzhen (-0.36%) and Shanghai (-0.08%) in the red.  In Europe, the same picture is taking shape at midday.  Only two of 15 exchanges are showing red as the CAC (-0.20%), DAX (+0.38%), and FTSE (+1.02%) lead the region higher on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher.  The DIA implies a +0.22% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.81% open at this hour.  At the same time, 10-year bond yields are down sharply to 4.233% and Oil (WTI) is off half of a percent to $80.84 per barrel in early trading.

The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, and Philly Fed. Mfg. Employment (all at 8:30 a.m.), S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI (all at 9:45 a.m.), Feb. Existing Home Sales (10 a.m.), and Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to ASO, ACN, BZUN, CMC, DRI, DBI, FDS, LU, TITN, and WGO.  Then, after the close, AIR, FDX, LULU, NKE, and WS report.

In economic news later this week, on Friday the only scheduled news is Fed member Bostic speaking.

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

In government shutdown news, on Wednesday, the House missed its deadline to get out the written language of the six spending bills.  (Reporters were told the bills will be between 1000 to 2000 pages.)  House Republicans have a rule requiring that they are given three full days to read the text prior to a vote on any bill.  This would mean the House could not vote until at least Saturday night (if the written version got out last night) or violate that rule.  House Speaker Johnson told Reporters Wednesday that he hopes to wave that rule because he wants to give allowances for the fact many of the Representatives (of both parties) will be travelling and gone for the weekend.  Some GOP critics (MAGA) called for a shutdown to avoid breaking the GOP rule.  Of course, none of that even considers the time needed in the more procedure-laden Senate.  (The Senate Majority Leader cannot just call a vote as the Speaker can do in the House.)  The short version of this story is that unless another continuing resolution is passed, we are extremely likely to see a partial government shutdown starting one minute after midnight Saturday morning.  For what it is worth, the six spending bills give a budget increase to defense while holding other areas at the 2023 budget level, giving us a $1.66 trillion.

In miscellaneous news, the EPA released revised average production emissions rules for automakers.  The new rules do not take effect until 2027 and are greatly softened from the earlier version of the rules after heavy pressure from TM, GM, F, STLA, etc.  Reportedly, the argument that swayed the softening of restrictions was that hybrid vehicles (internal combustion plus battery-operated) actually cause less long-term CO2 despite higher emissions, because they have smaller batteries and their manufacture causes a smaller carbon footprint than full-electric vehicles after electricity and battery production are considered.  Still, the new rule has the strongest restrictions to date when and if they come into effect.

With that background, it looks like the Bulls are pushing again this morning. All three major index ETFs gapped higher to start the premarket. However, they are putting in small, black-bodied candles so far in the early session with morning news yet to come. All three are above their T-line (8ema) and all three T-lines are rising. So, the short-term trend is now clearly bullish. Meanwhile, the longer-term trend in the three major index ETFs have all recovered and are bullish again. In terms of extension, we are starting to seem a little stretched above the T-line, especially in the QQQ and the T2122 indicator is now in the upper part of its overbought territory. So, we should expect rest (consolidation) or pullback soon but that does not mean today necessarily. This means both sides still have room to run if they can gather the momentum, but the bears have more slack to work with now. Looking at those 10 Big Dog tech names, nine of the 10 are in the green during the premarket with only AAPL and its regulatory issues lagging. (Again, it is the AI names of NVDA, AMD, and INTC leading the way.) This tends to point toward another green day, since it is hard to fight the sheer dollar flows from those 10 tickers.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Markets gapped higher Monday on AI reports.  SPY gapped up 0.84%, DIA lagged gapping up 0.36%, and QQQ gapped up 1.12%.  At that point, all three major index ETFs faded the gap modestly for a few minutes, with SPY and QQQ not even really getting below the open.  Then from 10 a.m. all three rallied to their highs by 10:30 a.m.  From that point, SPY and QQQ sold off until 1 p.m. before chipping sideways the rest of the day.  Meanwhile, DIA chopped sideways around its opening level all day.  This action gave us three gap-up, indecisive, black-bodied candles. The DIA printed a gap-up, black, fat-body, Spinning Top that failed a retest of its T-line (8ema) from below.  At the same time, SPY and QQQ printed gap-up, black-body, Inverted Hammer candles.  The QQQ failed its retest of the T-line, but SPY stayed barely above after its gap above that average.

On the day, nine of the 10 sectors were green as Technology (+0.75%) was out in front leading the market higher.  At the same time, only Healthcare (-0.23%) was in the red. Meanwhile, SPY gained 0.59%, the DIA gained 0.19%, and the QQQ gained 0.82%. VXX fell 2.33% to close at 13.86 and T2122 fell a bit but remains smack in the middle of its mid-range at 47.67.  10-year bond yields climbed again to 4.328% and Oil (WTI) jumped another 2.13% to close at $82.77 per barrel. So, premarket reports about AAPL licensing GOOGL’s AI engine and services for its future iPhones led to an AI frenzy early. This led to a broader rally, but fairly quickly melted into profit-taking.  This all happened on less-than-average volume in the SPY and QQQ as well as extremely low volume in the DIA.

There was no major economic news scheduled for Monday.

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

So far this morning, CAL, CNM, and TME all reported beats on both the revenue and earnings lines.  Meanwhile, XPEV missed on the revenue line while coming in as expected on the earnings line at -$0.21/share. 

In stock news, on Monday the CEO of natural gas developer TELL stepped down and the company announced it is pursuing strategic options that include a possible sale.  At the same time, in a PR move after its recent cyberattack has crippled many healthcare providers, UNH announced it had provided over $2 billion in loans and advances to the impacted medical facilities. In addition, UNH said it is beginning distribute updated software and will gradually resume full services to medical facilities and their end customers (patients).  Later, despite the issues it faces from absorbing CS, the CEO of UBS said his bank will pursue acquisitions in the US.  (No specific targets or timeline was given other than “in coming years.”)  At the same time, STLA announced it had increased its stake in ARCH (electric vertical takeoff and landing aircraft maker).  STLA said it had recently acquired another 8.3 million shares through the open market.  Later, TSLA CEO Musk defended his use of the prescription drug ketamine, saying it was beneficial for shareholders.  At the same time, FSR stock plummeted again after the company announced it would pause production for six weeks effective immediately and that it had secured an additional $150 million of financing from an existing investor.  Later, BRKB announced it is speeding up its stock buyback purchases, buying about $2.3 billion in stock in the quarter as of March 6.  (BRKB bought $2.2 billion of its own stock in Q4 and a total of $9.4 billion for all of 2023.) Finally, the UAW has filed to request a unionization vote at the VLKAF (Volkswagen) plant in TN. This comes after more than 70% of employees signed cards requesting unionization. In something of a US oddity, VLKAF said it welcomes union representation (which is the norm in its European homeland, but an outlier feeling among US Automakers who fight unions tooth and nail.)

Elsewhere, ATMU announced it is officially separated from CMI and is now operating as an independent company.  At the same time, NVDA announced it had partnered with TSM and SNPS to expedite the manufacturing of its AI-focused chips by using a new NVDA-designed lithography platform.  Later, KR announce it had reached a definitive deal to sell its specialty pharmacy business to CarelonRx (a subsidiary of ELV).  Details of the deal were not released.  At the same time, NVDA announced a new GPU architecture designed specifically to enhance computing power and energy efficiency for use in AI applications.  (GOOGL, AMZN, DELL, and TSLA have endorsed the platform and are expected to be large customers through NVDA cloud providers MSFT and ORCL later in the year.)  NVDA also announced a new 800Gb/s ethernet platform for supporting intense AI computing.  (That is between 5- and 9-times faster data transfer than current data transfer speeds.)  Later, DRQ and INVX announced an all-stock deal to merge.  (DRQ shareholders will own 52% of the merged company and INVX the other 48%.)  Later, dozens and dozens of companies announced partnerships with NVDA on some sort of AI product or service (literally too many to mention).

In stock legal and governmental news, on Monday, JOAN filed for Chapter 11 bankruptcy.  Later, trade groups representing hedge funds sued the SEC.  The suit alleges that the new rule requiring funds that routinely buy large lots of US bonds and then sell them in smaller chunks register as broker-dealers exceeds the agency’s authority.  At the same time, a US appeals court revived REGN’s antitrust lawsuit against NVS.  Later, the competition authority in Turkey announced they had imposed interim measures on META and would take other measures to stop the sharing of user data between Instagram and Threads (both platforms owned by META) in order to take advantage of a dominant market position.  After the close, Reuters reported that on Tuesday the US Dept. of Energy is set to announce final rules which significantly soften the originally-announced rules on fuel economy.  The new rules slash (by 72% and only after 2027) electric vehicle mileage ratings to soften their impact on overall carmaker average mileage ratings.  The rule will slowly increase the percentage of EV mileage used for the calculation to a 65% reduction by 2030.  In other words, the new rules mean EVs have very little impact on average mileage of carmaker vehicles.

Overnight, Asian markets were mixed but leaned to the red side.  Eight of the 12 Asian exchanges were down with Hong Kong (-1.24%), South Korea (-1.10%), and India (-1.08%) leading the way lower.  In Europe, the picture is more mixed at midday with eight of the 15 exchanges in the green, six in the red, and one unchanged.  The CAC (+0.19%), DAX (+0.03%), and FTSE (-0.23%) lead the region on volume (as always) in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap lower to start the day.  DIA implies a -0.24% open, the SPY is implying a -0.41% open, and the QQQ implies a -0.58% open at this hour.   At the same time, 10-year bond yields are flat at 4.326% and Oil (WTI) is also flat at $82.71 per barrel in early trading.

The major economic news scheduled for Tuesday includes February Building Permits and February Housing Starts (both at 8:30 a.m.) and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to CAL, CNM, TME, and XPEV.  Then.  Then, after the close, ZTO reports.

In economic news later this week, on Wednesday, EIA Weekly Crude Oil Inventories, Fed Rate Decision, Fed Statement, Fed Chair Press Conf., Q1 Current Interest Rate Projection, Q1 1^st Year Interest Rate Projection, Q1 2^nd Year Interest Rate Projection, and Q1 Longer Term Interest Rate Projection are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, Philly Fed. Mfg. Employment, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Feb. Existing Home Sales, and Fed Balance Sheet.  Finally, on Friday the only scheduled news is Fed member Bostic speaking.

In terms of earnings reports later this week, on Wednesday, BNTX, GIS, HTHT, JKS, OLLI, PDD, SIG, CHWY, FIVE, GES, KBH, MU, SCS, and WOR report.  On Thursday, we hear from ASO, ACN, BZUN, CMC, DRI, DBI, FDS, LU, TITN, WGO, AIR, FDX, LULU, NKE, and WS.  There are no major earnings reports scheduled for Friday.

In miscellaneous news, on Monday NASDAQ said it had resolved a glitch that had affected premarket trading.  No details of the incident were given.  However, the exchange said all systems were operating normally at the open.  Elsewhere, Energy Sec. Granholm said the administration plans to return the US strategic petroleum reserve to pre-drawdown levels by year-end.  (The reserve currently has 362 million barrels and it held 565 million barrels before the first inflation-control sale in March 2022.)  This was at least part of the cause for Oil (WTI) price increases Monday.  At the same time, 47 countries (include the EU, Japan, Canada, and numerous pacific island nations) called for a charge (tax) on global shipping to reflect the sector’s CO2 emissions.  This support has more than doubled from the 20 nations that supported it when France proposed the charge in 2023.  (The proposed charge is $150 per ton of CO2 or about $80 billion per year at current shipping volumes.)  China, Brazil, and Argentina oppose the idea.  Meanwhile, BAC and EPFR Global Data reported Monday that US equity funds saw a significant inflow of money ($56 billion) last week.

In late-breaking news, the Bank of Japan abandoned negative interest rates (for the first time since 2007), raising its short-term rate from -0.1% to a range of 0% to +0.1%.  The BOJ also ended most of its asset purchases and perhaps most importantly said it will abandon the policy of buying/selling short-term bonds to control long-term bond yields. (So, the BOJ introduced the first rate tightening AND quantitative tightening in a generation on Tuesday.)  Even though the move had been widely signaled and expected, the move caused an immediate selloff in the Yen against other currencies.

With that background, it looks like the Bears are pushing back on Monday’s bullish move. All three major index ETFs gapped lower to start the early session. Since that point, they have all printed black body candles and are trading near the premarket lows. However, none of the three have reached the Friday close level yet. All three are back below their T-line (8ema) and all three T-lines are falling. So, the short-term trend is now clearly bearish. Meanwhile, the longer-term trend in the three major index ETFs have now all rolled over. Best case, you might say SPY and DIA are more sideways than truly bearish, but technically they meet the definition of lower highs and lower lows. In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator remains in the center of its mid-range. This means both sides still have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, all 10 are in the red during the premarket. (It seems the blizzard of AI announcements at NVDA’s event Monday only had short-lived power.) This tends to point toward a red market Tuesday, since it is hard to fight the sheer dollar flows from those 10 tickers.

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

On Friday, markets jumped lower and then, for the most part, traded sideways the rest of the day.  SPY gapped down 0.92%, DIA gapped down 0.57%, and QQQ gapped down 0.70%.  After that open, all three major index ETFs chopped sideways around the opening level until 11 a.m.  At that point, all three sold off again before chopping sideways the rest of the day.  The main difference is that the SPY chop had a modest bullish trend.  This action gave us gap-down, black-bodied, Spinning Top candles in all three major index ETFs.  All three gapped down through their T-line (8ema) with QQQ and DIA retesting that level only to fail.  This happened on average volume in the DIA, just less-than-average volume in the SPY, and heavy volume in the QQQ on a triple witching Friday.

On the day, six of the 10 sectors were green as Basic Materials (+0.44%) led the gainers.  At the same time, Technology (-1.25%) was far and away the biggest mover and dragged the whole market down.  (Just 8 tech stocks, NVDA, AAPL, MSFT, AMD, TSLA, META, AMZN, and ADBE, six of which were in the red, traded $164 billion in stock alone on the day.)  Meanwhile, SPY lost 0.99%, the DIA lost 0.79%, and the QQQ lost 1.19%. VXX rose 2.01% to close at 14.19 and T2122 climbed back into the dead center of its mid-range at 52.97.  10-year bond yields climbed again to 4.308% and Oil (WTI) fell a third of a percent to close at $81.00 per barrel.  So, triple witching was kicked off by ADBE -13.67% earnings (sales increase) disappointment.  This was followed up by disappointing Empire State Mfg. and Industrial Production numbers. For the most part, that was the story of the day.  After that rough opening and follow-through on Michigan Expectation numbers, the die was cast.

The major economic news on Friday included the February Export Price Index, which came in down but much hotter than expected at +0.8% (compared to a forecast of +0.2% but lower than the January +0.9% reading).  At the same time, February Import Price Index was down briskly, just as expected, at +0.3% (versus a +0.3% forecast and down from January’s +0.8% value).  Meanwhile, the NY Empire State Mfg. Index was far worse than predicted at -20.90 (compared to the -7.00 forecast and the -2.40 Feb. reading).  Later, February Industrial Production increased at +0.1% (compared to the 0.0% flat forecast and the January -0.5% value).  In terms of consumer thoughts, the Michigan Consumer Sentiment was down and a bit lower than anticipated at 76.5 (versus a forecast of 77.1 and even the previous reading of 76.9).  Michigan Consumer Expectations were even lower at 74.6 (compared to the forecast of 75.1 and the 75.2 prior value).  At the same time, Michigan 1-Year Inflation Expectations remains stable at 3.0% (versus a forecast of 3.1% and the prior reading of 3.0%). Finally, Michigan 5-Year Inflation Expectations also remains flat at 2.9% (compared to a forecast and prior reading of 2.9%).

In stock news, on Friday, Reuters reported that the TSLA Germany workforce will elect a new work council (union leadership) this week.  Later, Reuters also reported the CLF is now considering a much lower bid for X than it had previously made, if the Nippon Steel acquisition of X falls through (is scuttled by the government).  At the same time, AMZN announced it will hold a six-day Spring Sale beginning Wednesday.  This will include, but not be limited to, deals for Prime members only.  Later, INTT announced it is delaying its 2023 annual report due to a need to restate its Q3 financials. Elsewhere, NVDA announced its in-person GPU technology conference (the first in 5 years) will begin Monday.  (The conference will cover AI and GPU, or computer graphics card, technologies.)  At the same time, HTZ announced it had hired Gil West, former COO of DAL as its new CEO.  After the close, X defied political opposition and filed regulatory paperwork saying it expects the $14.9 billion sale to Nippon Steel to close this year.  Later, Reuters reported that TTE will restart its gasoline-producing (238k barrels per day) Port Arthur TX cracker over the weekend.  After the close, in another blow, a BA 737-800 was found to missing an external panel and was forced to return and landed safely in OR Friday.  That flight was operated by UAL.  On Saturday, Reuters reported TSLA will raise the price of its Model Y cars by $1,000 in certain European countries on March 22.  At the same time, Reuters also reported that MCD’s outage on Friday lasted more than 12 hours with some stores, even in the US, unable to accept app orders and even cash as its digital systems were down.

In stock legal and governmental news, on Friday, RBGLY (Reckitt Benckiser) said it would appeal the $60 million jury verdict (announced Thursday) against its Mead Johnson subsidiary.  (The jury found the company negligent for not disclosing risks on its baby formula labelling.)  At the same time, AAPL agreed to pay $490 million to settle a class-action lawsuit from shareholders who alleged CEO Cook defrauded investors by concealing falling iPhone demand in China.  Later, ALTM announced that its operations won’t be affected by an Argentine court ruling halting new environmental permits for mining operations.  At the same time, TSLA settled a racial discrimination lawsuit by a former employee.  (The terms were not disclosed, but both sides dropped their appeals and the original jury award was $137 million.)  Later, an FDA advisory board voted 11-0 to recommend the approval of LEGN’s CARVYKTI multiple myeloma treatment.  (The FDA approval vote is scheduled for April 5.)  At the same time, the FDA approved XHANCE nasal spray from OPTN.  (The same treatment under other names has been available for years.)  Later, a IN jury found TSLA 70% liable for an employee car crash involving a company truck.  The jury awarded the injured motorist $42 million of the $191 million the plaintiff had been seeking.  Elsewhere, RDDT received a letter from the FTC saying that the agency is conducting a non-public inquiry into the company.  (The inquiry is rumored to be in reference to selling user data to AI companies.)  Later, the finance unit of VLKAF (Volkswagen) agreed to pay $48.75 million to settle an SEC lawsuit accusing the company and its former CEO of defrauding investors in a bond offering.  After the close, META won a Brazilian court order overturning a previous ruling that barred the company from using that name in Brazil. Also after the close, the NHTSB said it has begun an investigation into a fatal crash between a F Mach-E electric Mustang (using partial automation or driver assistance) and a HMC CR-V.  On Saturday, the Wall Street Journal reported that the state of VA are investigating META with a grand jury hearing testimony in relation to how the FaceBook platform facilitated and profited from illegal sale of drugs.  (META commented that they cooperate with law enforcement authorities.)

Overnight, Asian markets were mostly green with only three of 12 exchanges in the red.  Japan (+2.67%) Shenzhen (+1.46%), Taiwan (+1.00%), and Shenzhen (0.99%) led the strong rally on better-than-expected Chinese retail and industrial data.  In Europe, the picture is more mixed at midday with six of 15 exchanges in the red.  The CAC (+0.15%), DAX (+0.27%), and FTSE (+0.20%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher with divergence.  The DIA is the laggard, implying a +0.06% open, the SPY implies a +0.61% open, and the QQQ implies a +1.05% open a this hour.  At the same time, 10-year bond yields are flat at 4.304% and Oil (WTI) is up 0.35% to $81.32 per barrel in early trading.

There is no major economic news scheduled for Monday.  The major earnings reports scheduled for before the open are limited to ERJ and SAIC.  Then, after the close, YY and STNE report.    

In economic news later this week, on Tuesday we get Feb. Building Permits, Feb. Housing Starts, and API Weekly Crude Oil Stocks.  Then Wednesday, EIA Weekly Crude Oil Inventories, Fed Rate Decision, Fed Statement, Fed Chair Press Conf., Q1 Current Interest Rate Projection, Q1 1^st Year Interest Rate Projection, Q1 2^nd Year Interest Rate Projection, and Q1 Longer Term Interest Rate Projection are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Philly Fed Mfg. Index, Philly Fed. Mfg. Employment, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Feb. Existing Home Sales, and Fed Balance Sheet.  Finally, on Friday the only scheduled news is Fed member Bostic speaking.

In terms of earnings reports later this week, on Tuesday, we hear from CAL, CNM, TME, and XPEV.  Then Wednesday, BNTX, GIS, HTHT, JKS, OLLI, PDD, SIG, CHWY, FIVE, GES, KBH, MU, SCS, and WOR report.  On Thursday, we hear from ASO, ACN, BZUN, CMC, DRI, DBI, FDS, LU, TITN, WGO, AIR, FDX, LULU, NKE, and WS.  There are no major earnings reports scheduled for Friday.

In miscellaneous news, on Friday, the National Assn. of Realtors agreed to settle antitrust litigation accusing brokerages of inflating sales commissions.  NAR agreed to pay a $418 million settlement as well as eliminate decades long rules that required a 6% sales commission.  This is likely to reduce home prices and allows buyers and sellers to negotiate commissions with their agents.  (The settlement still must be approved by a judge.)  Elsewhere, Japanese media Nikkei reported that the Bank of Japan is set to end negative rates this week.

In late-breaking news, Bloomberg reported that AAPL is in active negotiations to license GOOGL’s Gemini AI tools for use in future iPhones.  GOOGL shares were up 5.14% on the news

So far this morning, ERJ reported beats on bot h the revenue and earnings lines. At the same time, SAIC beat on revenue while missing on earnings.

With that background, it looks like the Bulls are trying to run this morning on the strong economic data out of China and more fuel for the AI fire. All three of the major index ETFs are up, with QQQ leading the way on a strong gap higher in the premarket. The QQQ and SPY are also printing large white-body Marubozu candles in the early session. However, while the SPY has crossed back above its T-line (8ema) in the premarket, the other two remains below that level based off the damage done the last two days of last week. It is worth noting that the QQQ T-line is flat while the SPY T-line is turning up and the QQQ 8ema is flat this morning. So, the short-term trends remain mixed. Meanwhile, the longer-term trend remains bullish in the SPY while the DIA chops sideways and the QQQ has just rolled over bearish. In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is back in the center of its mid-range. This means both sides still have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, nine of the 10 are green this morning with only MSFT (the one left out of the AI news this morning) modestly in the red. This tends to point toward a green market, since it is hard to fight the sheer dollar flows from those 10 tickers.

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

As mentioned in yesterday morning’s blog, Thursday turned out to be a Bull Trap. SPY gapped up 0.19%, DIA gapped up 0.28%, and QQQ gapped up 0.29%.  However, after 10 minutes, all three major index ETFs sold off sharply until 10 a.m.  The rest of the day saw a meander back and forth with the top of the range being Wednesday’s close and a slight bearish trend to the waves.  The lows of the day were reached at 3:40 p.m. but all three also rebounded sharply the last 20 minutes of the day.  This action gave us black-bodied Hanging Man type candles in all three major index ETFs.  They all retested their T-line (8ema) with the SPY and DIA passing the test and remaining above.  However, QQQ stayed below its T-line at the close.  This all happened on average volume in the SPY and DIA as well as slightly better-than-average volume in the QQQ.

On the day, nine of the 10 sectors were red as Financial Services (-1.10%) and Consumer Cyclicals (-1.10%) led the way lower.  At the same time, Energy (+0.39%) held up best and was the only sector that remained in the green.  Meanwhile, SPY lost 0.20%, the DIA lost 0.29%, and the QQQ lost 0.25%. VXX rose 2.58% to close at 13.91 and T2122 dropped all the way down to the lower end of its mid-range at 28.51.  10-year bond yields spiked again to 4.292% and Oil (WTI) popped another 1.78% to close at $81.14 per barrel.  So, the bearish tone was set in the premarket.  The three most-traded stock in the market were down big even before the market opened.  And with NVDA (-3.24%), TSLA (-4.12%), and AMD (-3.97%) down big and accounting for just under $90 billion in stock traded themselves, the rest of the market had very little chance of a green day. 

The only major economic news on Thursday included Weekly Initial Jobless Claims, which came in lower than expected at 209k (compared to a forecast of 218k and just less than the prior week’s 210k).  At the same time, Weekly Continuing Jobless Claims that also came in below the predicted level at 1,811k (versus a forecast of 1,900k but above the prior week’s 1,794k).  Meanwhile, February Core PPI (month-on-month) was a tick higher than anticipated at +0.3% (compared to the +0.2% forecast but well down from January’s +0.5% reading).  On the headline number, February PPI (month-on-month) was extremely hot at +0.6% (versus the +0.3% forecast and the +0.3% value in January).  At the same time, February Retail Sales (month-on-month) came in low at +0.3% (compared to the +0.5% forecast but much better than January’s -0.8%).  Later, Jan. Business Inventories were dead flat at +0.0% (versus a +0.2% forecast and the December +0.3% reading).  On the retail side, Jan. Retail Inventories came in just as expected at +0.3% (compared to the +0.3% forecast and a tick down from December’s +0.4% value).  Finally, after the close, the Fed’s Balance Sheet showed a modest increase to $7.542 trillion (compared to the prior week’s $7.539 trillion).

After the close, ADBE, TLNE, and ULTA all reported beats on both the revenue and earnings lines.  Meanwhile, ALTG beat on revenue while missing on earnings.  It is worth noting that ADBE raised its forward guidance.  Meanwhile, ULTA lowered its guidance.

In stock news, on Thursday, AMKAF (Maersk, the global shipping giant) said the global container rates (freight shipping prices) have fallen to “unsustainable levels.”  The CEO told his shareholder conference that global overcapacity of shipping would hit profits and may take years to work off. (This came after announcing an 83% fall in net profit.) At the same time, NYCB announced that it had sold some loans for a profit (gain) and that total deposits had risen from $81.4 billion to $83 billion as of Feb. 5 (compared to December 31).  However, the banks also confirmed a 7% drop in deposits since then. Later, Bloomberg reported that AAPL has acquired Canadian AI startup DarwinAI.  No specifics on the deal were shared.  At the same time, Reuters reported that AMZN’s self-driving car unit Zoox is working to catch up with GOOGL’s Waymo unit.  AMZN said it is increasing the maximum speed of its Zoox cars from 35mph to 45mph, widen the conditions (to include dark and rain), and also expanding the geographical areas covered in its testing in CA and NV.  Later, ADBE approved a $25 billion share buyback program (for purchases between now and March 2028).  At the same time, a director of FWRG sold $165.5 million of the company’s stock Thursday. 

In stock legal, governmental, and regulatory news, on Thursday, MSFT told antitrust regulators in the EU that GOOGL has a competitive edge in AI.  MSFT said GOOGL’s edge comes from the massive amounts of (training) data it has collected as well as GOOGL’s AI-optimized chips.  MSFT made the case that GOOGL is the only company that is vertically integrated in a way that would allow it to dominate that market.  It said every other company will need to rely on multiple partnerships to achieve the same level of AI breadth.  GOOGL responded by saying that the regulators should focus on companies that don’t offer the same level of openness as GOOGL’s cloud and which have a long history of locking-in customers (implying MSFT).  Later, an FDA committee that advises on drug approvals voted in favor of approving GERN’s imetelstat anemia treatment by 12-2.  (The full FDA is not bound by the vote and will make its own final decision on June 16.)  At the same time, as expected, President Biden came out in opposition to Nippon Steel acquiring X (for $14.9 billion), saying the company must remain US owned and operated.  (No action was immediately announced, but the CFIUS, which regulates foreign investments in US firms will take its lead from the Treasury Dept. as led by Biden-report Sec. Yellen.) 

Later, the Fed announced that JPM has been fined $348.2 million over inadequate monitoring of its own and client trading activities and lack of reporting of trades.  At the same time, the FDA announced it had approved a MDGL treatment for nonalcoholic steatohepatitus.  In addition, the FDA also approved TEVIMBRA, a throat cancer treatment from BGNE.  Later, RBGLY (Reckitt Benckiser, Mead Johnson) was hit with a $60 million jury award as the jury found the company negligent for not warning of the risk of enterocolitis from using the company’s baby formula.  After the close, the US Chamber of Commerce filed suit against the SEC alleging the agency’s new climate-risk reporting rules exceed the agency’s authority.  On the other side, the Sierra Club also sued the SEC over the same rules but in a different jurisdiction, alleging the agency stripped down the rules due to business influence.  After the close, LYFT and UBER announced they will cease operations in Minneapolis after the city’s council voted Thursday to override a Mayoral veto and require the companies to pay the equivalent of the local minimum wage of $15.57 per hour effective May 1.

Overnight, Asian markets were mostly in the red with just three of 12 exchanges in the green.  Shenzhen (+0.60%), Malaysia (+0.59%), and Shanghai (+0.54%) were the gainers while South Korea (-1.91%), Hong Kong (-1.42%), and Taiwan (-1.28%) led the rest of the region lower.  Meanwhile, in Europe, the opposite picture is taking shape with only two of 15 exchanged below break-even at midday.  The CAC (+0.35%), DAX (+0.34%), and FTSE (+0.08% lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.15% open, the SPY is implying a +0.19% open, and the QQQ implies a +0.14% open at this hour.  At the same time, 10-year bond yields are back down slightly to 4.277% and Oil (WTI) is off two-thirds of a percent to $80.73 per barrel in early trade.

The major economic news scheduled for Friday include Feb. Export Price Index, Feb. Import Price Index, and NY Empire State Mfg. Index (all at 8:30 a.m.), Feb. Industrial Production (9:15 a.m.), and Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  The major earnings reports scheduled for before the open are limited to ERJ and JBL.  There are no reports after the close.      

So far this morning, HIBB missed on revenue while reporting as expected on the earnings line.  (ERJ and JBL report closer to the open.)

In miscellaneous news, on Thursday, a US bankruptcy judge ordered the arrest of a Camshaft Capital hedge fund manager for helping an Indian startup hide $533 million from its lenders.  Elsewhere, Freddie Mac reported Thursday that US average 30-year fixed-rate mortgage rates fell from 6.88% to 6.74% in the last week, marking almost a quarter percent drop in the last two weeks. Meanwhile, US Senate Democrats (notably Senator Sanders) introduced a bill calling for a 32-hour work week.  They cited gains in productivity advances, including those from AI, as justification for a shorter workweek.

In late-breaking news, MCD suffered a system outage which shut down both the order app and store operations at 2 a.m. Eastern time.  Another surge of similar issues came from Europe at 5 a.m. Eastern.  The outage is known to have effected at least 5,500 of the company’s 40,000 global locations. MCD announced that the problem is not related to any cybersecurity event.

With that background, it looks like the Bulls are trying to come back from overnight lows with all three major index ETFs printing large, white-body candles after a premarket gap down. All three are back near the break-even line at 7:30 a.m. with the DIA and QQQ both retesting their T-line level from their gap-down and SPY having crossed back up through it’s T-line following a gap down below it. It is worth noting that the QQQ and DIA T-lines are flat while the SPY T-line is still rising modestly. So, the short-term trends remain bullish but are under pressure after Thursday’s down day. Meanwhile, the longer-term trend remains bullish in the SPY and QQQ with DIA definitely chopping sideways. In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is back down in the lower end of its mid-range. This means both sides still have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, all 10 are green this morning with the two biggest names (NVDA and TSLA) leading the way both in volume and percent move. This tends to point toward a green market, since it is hard to fight the sheer dollar flows from those 10 tickers. Finally, remember that today is Friday, payday. So, prepare your account for the weekend by taking profits, hedging, lightening up, or however you manage weekend risk. Also bear in mind that today is option expiration Friday and a triple-witching day to boot. So, be wary of volatility and/or pinning.

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

Wednesday gave us a sideways move within a range.  SPY opened 0.06% higher, DIA gapped up 0.24%, and QQQ gapped down 0.24%. At that point, SPY sold off modestly for 30 minutes before trading sideways in a tight range until 3:30 p.m.   Meanwhile, DIA rallied modestly for an hour before trading sideways in a very tight range until 1:30 p.m.  From 1:30 p.m. until 3:30 p.m. DIA sold off modestly.  As for QQQ, it sold off briskly the first 30 minutes before grinding sideways in a modest range until 3:30 p.m.  However, at 3:30 p.m. all three major index ETFs sold off sharply (biggest 5-minute candle of the day) and then modestly rebounded the last 25 minutes of the day.  This action gave us a gap-up black-body Doji-type candle in the DIA, a gap-up black-bodied Hanging Man-type candle in the SPY, and a gap-down Bearish Harami in the QQQ.  The two large-caps remain above their T-line (8ema) and the QQQ closed the day right at its own.  All three major index ETFs did this on less-than-average volume.

On the day, eight of the 10 sectors were green as Energy (+1.32%) was out in front leading markets higher.  At the same time, Technology (-0.63%) lagged behind the other sectors and was the only sector much in the red on the day.  Meanwhile, SPY lost 0.16%, the DIA gained 0.11%, and the QQQ lost 0.77%. VXX fell 0.51% to close at 13.56 and T2122 climbed but remained just outside of overbought territory to 79.92.  10-year bond yields spiked again to 4.188% and Oil (WTI) popped 2.63% to close at $79.72 per barrel.  So, for the most part, it was a sideways drift day in the markets.  The was a small amount of movement early, but the bulk of the trading was done in a range-bound area, not far from the prior close.

The only major economic news on Wednesday was EIA Weekly Crude Oil Inventories, which surprised (after API numbers Tuesday evening) with a 1.536-million-barrel drawdown (compared to a forecasted 0.900-million-barrel inventory build and much lower than the prior week’s 1.367-million-barrel build).

After the close, LEN missed on revenue while beating on earnings.  LEN also lowered its forward guidance.

In stock news, on Wednesday, BKSY announced it has been awarded a $24 million contract to supply AI services by the US Air Force.  At the same time, Swedish EV maker PSNY announced it is cutting the base price of its Polestar 3 model by more than 12% (down to $73,400).  The company also launched new model variants.  Later, LFWD announced a 1-for-7 reserve split effective at the market open on Friday, March 15.  The move is aimed at maintaining the stock price requirement for NASDAQ listing.  At the same time, MSFT announced it will widen the availability of its AI-powered cyber-security tool on April 1.  Later, VLKAF (Volkswagen) announced it expects only a 3% increase in car sales this year, which is down sharply from 2023’s 12% increase.  At the same time, GEHC announced an increase in the size of its secondary offering from 13 million to 14 million shares a day after announcing the secondary listing.  Later, the GOOGL subsidiary Waymo announced Wednesday that it begin offering free driverless robotaxi services in Los Angeles to select people starting Thursday.  GOOGL said the service will cover 63 square miles ranging from Santa Monica to downtown LA. 

At the same time, X stock fell sharply after the Financial Times reported that President Biden intends to voice concerns about the Nippon Steel acquisition of X.  In unrelated Japanese news, the Japanese media reported the NSANY (Nissan) board of directors is now seeking a partnership with HMC on electric vehicles.  Elsewhere, WS announced it has signed a licensing agreement with MT and will begin using MT’s patented technology to ablate hot-formed blanks, entering a new segment.  After hours, FSR stock crashed 35% when the Wall Street Journal reported the company’s advisors were preparing for a potential bankruptcy.  Also after the close, MO announced it would sell part (35 million shares of its 197 million shares) of its stake in BUD.  This will be accomplished via a secondary offering of BUD.  In addition, BUD has agreed to buy $200 million of its stock back directly from MO.  Meanwhile, UA announced its founder Plank will return as the CEO as of April 1.  At the same time, KNTK announced an 11.4 million share secondary offering.  DLTR announced it plans to close 1,000 stores in the coming years (schedule not specified) after significant setbacks during Q4.

In stock legal, governmental, and regulatory news, on Wednesday the FDA announced it has granted “orphan drug” designation to PRTC’s LYT-200 therapy. (The designation offers tax and other benefits.)  Later, Epic Games asked a US federal judge to hold AAPL in contempt for allegedly violating an injunction governing its App Store.  Epic asked the judge to “end AAPL’s sham compliance” with the court order.  At the same time, the NTSB said Wednesday that BA still refuses to disclose the names of those employees who worked on the 737 MAX 9 door plug or production line.  BA also overwrote video footage of the production.  BA’s CEO’s response was the ridiculous “I’m unable to provide that information…Boeing has no records of the work being performed.”  Later, the FDA also granted PSTX orphaned drug status for its multiple myeloma treatment.  At the same time, PI and NXPI announced they had reached a comprehensive settlement and cross-patent licensing agreement, ending the litigation between the companies.  (NXPI will make a one-time $45 million payment to PI immediately and $15 million per year increasing afterward.)  Elsewhere, Reuters reported the UNH has already been hit with six class action lawsuits of alleged failures related to the loss of personal data.  (It is also expecting suits over financial losses related to its failures to process claims and make payments.)  Separately, the US Dept. of Health announced it has opened an investigation into UNH’s Feb. 21 cyberattack over a breach of protected consumer health (HIPAA) data.  After the close, the FDA approved LIVMARLI (a treatment for a rare liver disease) from MIRM.

Overnight, Asian markets were mixed as South Korea (+0.94%), Singapore (+0.81%), and Thailand (+0.75%) led the seven gainers.  Hong Kong (-0.71%) and Shenzhen (-0.52%) paced the losing 5 exchanges.  In Europe, the bourses lean heavily toward the green at midday.  The CAC (+0.99%), DAX (+0.42%), and FTSE (unchanged) 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 +0.38% open, SPY is implying a +0.34% open, and QQQ implies a +0.42% open at this hour.  Meanwhile, 10-year bond yields are up to 4.194% and Oil (WTI) is up 0.73% to $80.31 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, and Feb. Retail Sales (all at 8:30 a.m.), Jan. Business Inventories and Jan. Retail Inventories (both at 10 a.m.), and the Fed’s Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to AVAH, CSIQ, DKS, DG, GIII, and BEKE.  Then, after the close, AGCO, ADBE, ALTG, TLNE, and ULTA report.    

In economic news later this week, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Friday, we hear from ERJ and JBL.

So far this morning, AVAH, CSIQ, DKS, DG, and BEKE all reported beats on both the revenue and earnings lines.  Meanwhile, GIII missed on revenue while beating on earnings.  It is worth noting that GIII also lowered its forward guidance.

In miscellaneous news, on Wednesday, for the second day in a row, Ukrainian drones struck Russian oil refineries.  This attack caused a fire at Rosneft’s largest oil refinery.  (Tuesday’s attacks significantly damaged Lukoil’s largest refinery.) Elsewhere, Reuters reported that global corporate dividends topped $1.66 trillion in 2023 with banks accounting for more than half of the growth.  Meanwhile, the US CFPB alleged that banking and business groups such as the US Chamber of Commerce have been “judge shopping” in the filing of lawsuits challenging credit fee regulations.  Later Wednesday evening Reuters reported that the probe into Monday mid-air dive by a LTMAY airline BA 787 plane is now centered on the pilot seat coming loose from the cabin floor.  Yet another problem for the troubled aircraft maker.  In Europe, the ECB announced a new framework for how it will implement monetary policy.  The interesting change is that the new framework gives banks much more say in how big their cash reserves on hand need to be. 

In late-breaking news, the International Energy Agency said overnight that it projects oil markets will face a supply deficit throughout 2024.  This comes after OPEC+ agreed to extend their 2+ million barrel per day production restrictions as a means of propping up crude prices.  In addition, in the last week, the three largest Russian oil refineries have been attacked by Ukraine in retaliation for the invasion of their country and Russia’s deliberate targeting of energy and economic infrastructure.  The amount of damage done and the schedule of repairs remain unknown.  However, this is expected to have at least some impact on the net oil and distillates availability globally.

With that background, it looks like the Bulls will start the day by leading a positive move. All three major index ETFs opened the premarket by gapping a bit higher and have printed tiny, but white-body candles since that start. All three remain above their T-line (8ema) and all three of those averages are rising. So, the short-term trends are now bullish in all three while the strong bullish longer-term trend is back in play in SPY (and to a lesser extent QQQ) but remains under significant pressure in the DIA. In terms of extension, none of the three major index ETFs is too far from its T-line, but the T2122 indicator is back just outside the edge of overbought territory. This means both sides still have room to run if they can gather the momentum. However, the Bears have more slack. Looking at those 10 Big Dog tech names, seven are in the green this morning. However, it is worth noting that the leader of the AI pack, NVDA, is down more than 1.5% in the early session and TSLA is down 1.4%. As the two most heavily traded stocks in the market (by far) they carry a bigger stick to the market fight. So, be careful. With those two strongly in the red, it will be much harder for Bulls to have traction. It is possible the gap up is just a Bull trap today.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped higher on Tuesday.  SPY opened 0.42% higher, DIA opened 0.20% higher and QQQ opened 0.55% higher.  At that point, all three major index ETFs sold off for 15 minutes (recrossing the gap) before rallying sharply for 75 minutes. Then all three sold off modestly until 1 p.m. before beginning a more modest but steady rally that lasted the rest of the day, give or take 5 minutes of profit-taking at the very end.  This action gave us strong Bullish Morning Star signals in the QQQ and SPY (closing up all the way above the Friday candle body in SPY).  DIA gave us more of a gap-up, fat-body white Spinning Top.  All three major index ETFs crossed back above their T-line (8ema) on the day.  This happened on average volume in the QQQ, just less than average volume in the DIA, and below-average volume in the SPY.

On the day, eight of the 10 sectors were green as Technology (+1.69%) was way out in front leading markets higher.  At the same time, Utilities (-0.87%) and Communication Services (-0.63%) lagged behind the other sectors on increasing interest rates (very capital-intensive businesses).  Meanwhile, SPY gained 1.08%, the DIA gained 0.61%, and the tech-heavy QQQ gained 1.43%.  VXX plummeted 4.88% to close at 13.63 and T2122 fell back out of overbought territory to 74.29.  10-year bond yields spiked up to 4.153% and Oil (WTI) dropped a modest 0.24% to close at $77.74 per barrel.  So, we saw markets at the very least unphased by the CPI print Tuesday and then we got the same rally we’ve seen for months, led by the high-tech giants (NDVA +7.16%, META +3.34%, MSFT +2.66%, AMD +2.20%, and AMZN +1.99%), which accounted for $100 billion in trades themselves Tuesday.  However, it was not a super thin rally with more than 58% of the SPY components and 65% of the QQQ components in the green.

The major economic news on Tuesday included Feb. Core CPI, which came in at 3.8% (compared to a forecast of 3.7% but down from January’s 3.9%). On a month-to-month basis, Feb. Core CPI stayed steady at +0.4% (versus a forecast calling for a decline to 0.3% but in line with the January +0.4% reading).  On the headline number, Feb. CPI rose to 3.2% (compared to a forecast and January value of 3.1%).  On the month-to-month basis that was up to +0.4% (in line with the +0.4% forecast but a tick higher than January’s +0.3% reading). Later, the February Federal Budget Balance was better than expected at -$296.0 billion (versus a forecast of -$298.5 billion but dramatically higher than the artificially depressed -$22.0 billion in January). After the close, the API Weekly Crude Oil Stocks showed an unexpected inventory drawdown of 5.521 million barrels (compared to a forecasted inventory build of 0.400 million barrels and the prior week’s +0.423 million barrels).

After the close, QFIN reported a beat on both the revenue and earning lines.

In stock news, on Tuesday, MMM announced it had hired outsider Bill Brown, former CEO of LHX, as CEO.  (MMM gapped higher on the news and closed up 4.97%.)  At the same time, BA announced that its plane deliveries slipped to 27 in February (down one from February 2023) bringing the YTD total to 54 (down more than 22% from the first two months of 2023).  Later, Reuters reported that TM is now the most shorted stock in the Asia-Pacific region while SMCI, CMCSA, COF, and WFC are the most shorted large-cap stocks in the US.  Meanwhile, TSLA announced that its Berlin factory has come back online after a week-long closure after arson had caused the plant to be disconnected from the power grid.  At the same time, CPB announced it had finalized its $2.33 billion acquisition of Sovos Brands.  Later, GS announced plans to expand its private credit portfolio by $300 billion over the next five years.  (This is a larger move than competitors MS, which looks to expand by $50 billion in niche, and JPM, which has earmarked $10 billion for its private credit expansion.)  At the same time, ACAD stock plunged after the company reported its Phase 3 trial of a drug to treat schizophrenia had failed to show significant improvement over placebo.  (As a result, the company removed its sales forecast.  ACAD closed down 17.20%.)  Later, GM reported Tuesday that it had produced 20,000 electric vehicles this year that do not qualify for EV Tax Credits before it requalified by changing suppliers.  At the same time, CNBC reported that IBM told its employees it plans to slash an unspecified number of marketing and communications jobs (cutting that staff by 50%) as it replaces workers with AI.  No specific number of jobs were provided.  Later, MINM announced a definitive merger agreement with private e2Companies in an all-stock deal.  Elsewhere, VJET said it intends to delist its stock in the US in a move aimed at reducing the cost of complying with SEC rules.  (The delisting is effective April 1, 2024.)  Later, CRGE filed for chapter 11 bankruptcy after the close.  At the same time, GEHC announced a 13 million share secondary offering.  After the close, the Financial Times reported that CME will apply to begin clearing US Treasury trades later this year.

In stock legal, governmental, and regulatory news, on Tuesday the Canadian and US governments signed a deal to begin a 2-year study into Canadian coal mine pollution that flows into US waters.  This has been a long-standing border dispute and the US Geological Survey had previously concluded that TECK coalmines are the source of the pollution (TECK recently agreed to sell those mining operations to GLNCY).  At the same time, a US District Judge in OR has agreed to hear the FTC suit to block the KR acquisition of ACI, with an initial hearing on Aug. 26. Later, ADM announced that some of its employees had received subpoenas from the US Justice Dept. and the company is correcting the last six years of financial reports after an internal probe.  At the same time, a federal judge ruled that BRKB-owned Geico Insurance will not have to face a class-action lawsuit alleging the company overcharged policyholders during the COVID-19 pandemic.  Later, a federal whistleblower lawsuit against MCK was revived by a unanimous 3-0 appeal ruling of the 2nd Circuit Court of Appeals.  The suit alleges MCK bribed doctors to get them to buy drugs from their company over competitors.  At the same time, INTC has won over an effort to block the sale of its chips to Chinese tech giant Huawei.  (INTC had been issued a license for the deal during the Trump administration for the chips that had not been developed or produced yet.  The Biden admin had been under pressure to revoke the license but decided to let the sale stand because of the deal made under the Trump-issued license. The deal is worth hundreds of millions of dollars, which rival AMD was blocked from when applying for a license during the Biden administration.)  Later, AAPL made a major concession in its changes to comply with the EU Digital Markets Act, saying developers will be free to distribute their apps directly to consumers…but only in Europe.  (This last step could cost AAPL significant revenue as it will lose 30%, nearly no cost, markup on app store sales.)  Elsewhere, PRPL announced a settlement with competitor TPX related to PRPL’s partnership with The Mattress Firm (which TPX has asked the FTC to approve its acquisition of).  The settlement will extend PRPL’s partnership with The Mattress Firm for at least 12 months if the FTC approves the deal.)  At the same time, a former BA employee was found dead of an apparent suicide.  He was in the middle of a deposition for a whistleblower retaliation lawsuit over actions taken against him (after reporting on the company’s quality and production issues).  After the close, AMC announced that a NY federal court had granted preliminary approval of a settlement of a lawsuit alleging certain investors improperly profited from “short swing” profits trading the stock.  Also after the close, the Dept. of Defense announced the F-35 fighter jet program has reached full-rate production.  The announcement will open up more funds released to LMT as part of the contract’s “progress funding” provisions.

Overnight, Asian markets were mixed but leaned toward the red.  India (-1.51%) and Malaysia (-1.06%) were by far the biggest losers of the seven red exchanges.  On the other side, Singapore (+0.61%) and South Korea (+0.44%) led the five gaining exchanges.  In Europe, we see a mostly green picture at midday with 12 of the 15 bourses above the flat line.  The CAC (+0.50%), DAX (+0.08%), and FTSE (+0.06%) lead the region on volume as usual in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a start just on the positive side of flat.  The DIA implies a +0.09% open, the SPY is implying a +0.08% open, and QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields are rising to 4.17% and Oil (WTI) is up 1.38% to $78.63 per barrel in early trading.

The only major economic news scheduled for Wednesday is EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open are limited to ARCO, DLTR, WOOF, ACDC, WSM, and ZIM.  Then, after the close, AE and LEN report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, Feb. Retail Sales, Jan. Business Inventories, Jan. Retail Inventories, and Fed’s Balance Sheet.  Finally, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Thursday, AVAH, CSIQ, DKS, DG, GIII, BEKE, AGCO, ADBE, ALTG, TLNE, and ULTA report.  Finally, on Friday, we hear from ERJ and JBL.

So far this morning, WOOF reported beats on both the revenue and earnings lines.  At the same time, ZIM missed on revenue while beating on earnings.  Unfortunately, DLTR missed on both the top and bottom lines.

In miscellaneous oil news, on Tuesday, Ukraine attacked one of Russia’s largest oil refineries, reportedly taking at least half the facility’s production offline with significant damage. (This refinery processes 6% of Russian crude, 11% of the country’s gasoline, 6.4% of Russia’s diesel fuel, 5.6% of its fuel oil, and 7.4% of Russia’s aviation fuel.  So, while it may not be crippling, it could impact global oil prices as Putin keeps oil inside Russian borders…depending on how long the facilities are offline.)  In other oil news, the US Energy Information Administration raised its 2024 domestic oil output forecast.  EIA now projects an additional 260k barrels per day, reaching 13.19 million barrels per day for 2024.  (This was up 90k barrels per day from the previous forecast.)

In post-CPI market rate expectation news, 99.0% of Fed Funds rate trades are expecting no change in rates next week.  (1% expect a quarter-point rate reduction.)  Meanwhile, 84.4% of traders expect no change on May 1, while 15.5% of trades expect a quarter-point reduction at that meeting.  At the same time, only 33.4% of bets expect no change at the June 12 meeting.  57.1% of trades expect a quarter-point rate cut, while 9.4% expect a half-percent cut by that time.  For the July 31 meeting, only 14.1% expect no change in rates, 43.4% a quarter-point cut, 37.0% expect a half-point cut, and 5.5% anticipate a 0.75% cut by that point.

In late-breaking news, in a landslide vote (523 for, 46 against, 49 abstaining) the EU has passed the world’s first AI regulatory law. The law breaks AI applications into six risk categories, which range from low hazard to unacceptable (which are immediately banned) on the other end. The regulatory body structure, makeup, and processes have not been outlined in reports posted to this point.

With that background, it looks like the Bulls will start the day by leading a very modest move into positive territory. All three major index ETFs opened the premarket slightly higher and have printed tiny white-body candles since that start. All three remain above their T-line (8ema) and all three of those averages are rising. So, the short-term trends are now bullish in all three while the strong bullish longer-term trend is back in play in SPY (and to a lesser extent QQQ) but remains under significant pressure in the DIA. In terms of extension, none of the three major index ETFs is too far from its T-line, and the T2122 indicator is back in its mid-range. This means both sides still have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, six are in the red this morning. Of particular note is that TSLA (-2.04%) and INTC (-1.50%) are by far the biggest movers among those 10 names in the early session. It will be hard for the Bulls to gain traction if those 10 names are not leading the way.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was a reversal day in the market.  SPY opened 0.11% higher, DIA opened just 0.05% higher, and QQQ opened 0.06% higher.  After that open, all three major index ETFs rally significantly higher in the first hour.  However, at that point, all three reversed and sold off until 1:45 p.m.  The next reversal saw a significant bounce up off the lows for an hour in the SPY, DIA, and QQQ.  Then, once again, we reversed and all three sold off the last hour of the day.  This action gave us black-bodied candles in all those major index ETFs.  The QQQ printed a Bearish Engulfing candle that crossed back down through its T-line (8ema).  At the same time, SPY gave us a Bearish Engulfing candle with a large upper wick that remained above its 8ema.  Meanwhile, DIA printed a Gravestone Doji-type candle that retested its T-line from below and closed just back below that level.  This happened on above-average volume in the DIA and especially QQQ.  SPY gave us just below-average volume.

On the day, six of the 10 sectors were red as Technology (-1.24%) was way out in front leading the way lower.  Meanwhile, Communications Services (+0.70%) and Consumer Cyclical (+0.65%) held up better than the other sectors.  At the same time, SPY lost 0.60%, the DIA lost 0.12%, and the tech-heavy QQQ lost 1.44%.  VXX rose 2.62% to close at 14.48 and T2122 fell but remained just inside the overbought territory at 83.14.  10-year bond yields fell to 4.077% and Oil (WTI) dropped a.37% to close at $77.85 per barrel.  So, Friday saw the Bulls open the market very modestly higher and try to follow through for an hour.  However, profit-taking in those mega-cap AI names (such as NVDA -5.55%, INTC – 4.66%, and AMD -1.89%) proved too much to fight.  In fact, of the 10 “Big Dog” names, we saw a role reversal as only beaten-down AAPL (+1.02%) and GOOGL (+0.77%) were in the green.  Those tickers alone decide where the market is going on most days.

The major economic news on Friday included Feb. Avg. Hourly Earnings, which grew at a slowing pace at +4.3% (Year-on-Year) compared to a forecast and January reading of +4.4%.  The slowing growth of wages can be seen better on a Month-on-Month basis where they came in at +0.1% (versus a forecast of +0.2% and a January reading of +0.5%).  At the same time, Feb. Nonfarm Payrolls blew past expectations at +275k (compared to a forecast of +198k and even the January +229k).  On the private side, February Private Nonfarm Payrolls also were hotter than predicted at +223k (versus a forecast of +160k and the January value of +177k).  The Feb. Participation Rate remained steady at 62.5% (the same as in January). Interestingly, even with a much larger than anticipated new job growth, the Feb. Unemployment Rate grew to 3.9% (up from January’s 3.7%).  That marks 25 months of unemployment below 4%, which is the longest streak of “full employment” since the 1960s.

In stock news, on Friday, BP announced that its overall carbon emissions climbed in 2023 for the first time since 2019.  However, the company said it still plans to reduce its emissions by 10-15% by 2025 and 20%-30% by 2030 (both compared to the 2019 baseline).   Later, MMM announced the finalization of its plan to spin off its Healthcare business unit (now going by the name Solventum) at the end of March.  On April 1, Solventum will trade under the SOLV ticker.  (MMM will retain 19% ownership of SOLV.)  At the same time, RIVN announced that it has received 68,000 purchase reservations for its recently announced R2 model in less than 24 hours of accepting reservations.  (The R2 will have a base model MSRP of $45,000.)  Later, Reuters reported the consensus of several IT consultancies that it may take months for UNH to make a full recovery from the ransomware attack that shut down its operations 2.5 weeks ago.  (This has had a crippling effect on healthcare providers and patients, who cannot get preapprovals, submit claims, or submit reimbursement requests.  For scale reference, UNH processes about 50% of all medical claims for 900k doctors, 5,500 hospitals, and 600 labs. Many of those providers have already had to seek emergency loans to prevent operational impacts.)  However, UNH said it thinks it will be able to restore its medical claims and payments systems by March 18.  Elsewhere, Reuters reported that GOOGL’s new facility (dedicated to AI) in Mountain View CA, is state of the art…except it has inoperable or at best spotty Wi-Fi coverage.  At the same time, BTTR announced a 1-for-44 reverse split effective March 20.  The move was taken to maintain compliance with NYSE listing rules.  Later, MSFT announced that hackers tied to Russian intelligence are again trying to break into its systems using data stolen from corporate emails in January.

In stock legal, governmental, and regulatory news, on Friday, a three-judge panel of the US Court of Appeals ruled unanimously (3-0) that cryptocurrency exchange Binance must face a lawsuit from investors alleging the company violated US securities laws by selling unregistered tokens, which resulting in investor losses when the tokens lost most of their value. Later, the FAA and NTSB announced they are investigating a UAL-operated BA 737 MAX jet that rolled off the runway in Houston.  No injuries were reported, but this was the third (of four) such incidents of a UAL-operated BA plane in the last week. (Saturday a UAL-operated jet was diverted to Los Angeles after a hydraulic problem following take off.)  At the same time, Bloomberg reported that TSM will be awarded $5 billion in federal grants (Commerce Dept.) for setting up chip fabs in AZ.  (TSM is on record saying that it will invest $40 billion in those facilities.)  Later, the FDA delayed LLY’s experimental treatment for Alzheimer’s disease.  (The FDA will hold a meeting of outside experts to discuss safety and efficacy based on clinical trial data.  No date for the meeting has been set.)  That decision was both unexpected and a disappointment to LLY, which expected the drug to get full use approval later this month.  At the same time, AAPL backed down (after a day) in its battle with game maker Epic Games, unlocking Epic developer accounts.  (AAPL’s move, under pressure from EU regulators, cleared the way for Epic to open its own game store on iPhone and iPad devices…but only in Europe.  Later, AMPY responded to reports made to CA environmental regulators about an oil sheen off the coast of Huntington Beach CA.  AMPY pre-emptively announced that there is no evidence the oil slick has any connection to its oil drilling operations in the area.  At the same time, the FDA approved NVO’s Wegovy weight-loss drug for use in lowering the risk of stroke and heart attack in non-diabetic patients.  (Wegovy has a list price of $1,349 for a 1-month supply and the move is expected to help broaden usage approval from insurers.) Later Friday night, BA said it believes the required documents detailing the removal of a key part from its 737 MAX 9 jets were never created.  This comes after BA said it was unable to find documentation on the removal of four bolts from the 737 MAX 9 door plugs.  Executive VP Ojakli told the US Senate, “We have looked extensively and have not found any such documentation” and the company’s working hypothesis was “the documents required by our processes were not created when the door plug was opened.”  At the same time, a TX federal judge (sounds right) issued a ruling striking down a US NLRB rule that required companies to treat many workers as employees rather than independent contractors, requiring the companies to bargain with unions representing those workers.  (The rule was set to take effect today.)  The NRLB is expected to appeal.  Finally, the Wall Street Journal reported Saturday that the US Dept. of Justice had opened a criminal investigation into the ALK blowout involving the BA 737 MAX 9 jet door panel in January.  The investigation is about whether BA complied with an earlier consent decree (settlement) related to the two fatal crashes of 737 MAX jets in 2018 and 2019.

Overnight, Asian markets were mostly in the red but the biggest movers (as a group) were in the green.  Shenzhen (+2.27%), Hong Kong (+1.43%), and Shanghai (+0.74%) led portions on the region higher.  Meanwhile, Japan (-2.19%) and Australia (-1.82%) were the main movers of the eight red exchanges.  In Europe, with two minor exceptions, we see red across the board at midday.  The CAC (-0.24%), DAX (-0.52%), and FTSE (-0.38%) are setting the tone and leading the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.19% open, and the QQQ implies a -0.23% open at this hour.  At the same time, 10-year bond yields are at 4.083% and Oil (WTI) is down a half of a percent to $77.64 per barrel in early trading.

The only major economic news scheduled for Monday is the NY Fed 1-Year Consumer Inflation Expectation Survey at 10 a.m.  The major earnings reports scheduled for before the open are limited to FTRE.  Then, after the close, CASY, ORCL, and MTN report. 

In economic news later this week, on Tuesday we get Feb. Core CPI, Feb. CPI, Feb. Federal Budget Balance, and API Weekly Crude Oil Stocks report.  Then Wednesday, EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, Feb. Retail Sales, Jan. Business Inventories, Jan. Retail Inventories, and Fed’s Balance Sheet.  Finally, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Tuesday, ADM, HIS, IGT, KSS, ONON, QFIN, CLOV, and RXT report.  Then Wednesday, we hear from ARCO, DLTR, WOOF, ACDC, WSM, ZIM, and LEN.  On Thursday, AVAH, CSIQ, DKS, DG, GIII, BEKE, AGCO, ADBE, ALTG, TLNE, and ULTA report.  Finally, on Friday, we hear from ERJ and JBL.

So far this morning, FTRE missed on both the top and bottom lines.  FTRE also lowered its forward guidance.

In miscellaneous news, on Friday evening, the US Senate passed the first six funding bills, sending them to President Biden.  The President signed them into law at the last minute, averting the first partial shutdown of government and funding operations through September. The second shutdown cliff comes March 22. Elsewhere, on Saturday, Reuters reported that Australian farmers had ripped out millions of grape vines after 2023 over-production of wine crushed global wine prices.  (In 2023, Australia produced more than two years’ worth of wine and still has two years’ worth of win in storage.)  Australia is the world’s fifth-largest exporter of wine.  Major wine producers like CG announced plans to focus more on top-end wines and cut back lower-end vintages.

Elsewhere overseas, China announced it is in the process of raising $27 billion to fund its next push into home-grown semiconductor manufacturing.  The money was raised from local governments and state agencies into what is known as “the big fund” as China prepares to sharply escalate curbs on technology-related sales to that country.  This also comes amidst China’s own “AI craze” as it too has recognized that as the next area of arms race for the world.  Meanwhile, the European Central Bank said it could begin lowering interest rates in June.  The ECB now forecasts that European inflation will fall back to its 2% target by next year, but that waiting that long to begin rate cuts would cause a recession.  (This came at the same time US Fed Chair Powell told the Senate that the FOMC is “getting close” to the confidence level needed to begin its own cuts.

With that background, it looks like the Bears will start the week in control. All three major index ETFs gapped down a bit and are printing black-body candles in the premarket. SPY is retesting its T-line from above in the early session while DIA and QQQ both started below that level. It is also worth noting that the SPY 8ema is flat while both the QQQ and DIA T-lines have rolled over. So, the short-term trends is now bearish in all three while the strong bullish longer-term trend is under serious test. In terms of extension, none of the three major index ETFs is too far from its T-line. However, T2122, is sitting just inside of overbought territory. Both sides still have room to run if they can gather the energy. Looking at those 10 Big Dog tech names, six are in the red this morning. Of particular note is that the big AI names (NVDA, AMD, and INTC) are toward the bottom of that group in terms of performance in the premarket.

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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