The indexes struggled to find momentum on Monday suffering from post-holiday anemic volume which is pretty typical as traders extend vacations and travel home. With a GDP reading on Wednesday and the Core PCE numbers on Thursday, it is possible the light volume chop could continue today. However, we have some earnings and economic reports today that may well inspire the bulls or bears so be prepared for just about anything in this short-term very extended condition.
Asian markets closed mixed overnight with modest gains and losses trying to shake off the growing real estate crisis in China. However, European markets trade in the red across the board this morning with modest losses as momentum stalls. Ahead of earnings and economic data, the U.S. futures suggest a flat to slightly bearish lean but that could quickly improve or get worse depending on the reaction to pending data.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday include AZEK, BMO, CRWD, HPE, INTU, LESL, NTAP, PDD, SPLK, & WDAY.
News & Technicals’
Some regional banks in the U.S. are facing the risk of being acquired by their more profitable rivals, according to a report by KBW, a financial services research firm. KBW analysts said that Comerica, Zions, and First Horizon are among the banks that might be targeted for takeover, as they have lower returns and weaker growth prospects than their peers. On the other hand, larger banks with strong returns, such as Huntington, Fifth Third, M&T, and Regions Financial, are well-positioned to expand their market share and scale by buying smaller banks. KBW analysts also said that two other banks, Western Alliance and Webster Financial, could also consider selling themselves, as they have attractive franchises and valuations. The report said that the consolidation in the regional banking sector is likely to continue, as the banks face competitive pressures, regulatory challenges, and technological changes.
Wells Fargo Securities has released its 2024 stock market forecast, and it is not very optimistic. The firm’s head of equity strategy, Chris Harvey, predicts that the S&P 500 will end 2024 at 4,575, which is only 75 points higher than its closing level on Monday. Harvey expects the stock market to face a lot of volatility and uncertainty in the first half of 2024, as the economic growth and the Federal Reserve’s policy will be in a dilemma. He said that if the economy grows faster, the Fed will not ease its monetary policy, and if the economy slows down, the earnings will be lower, and the Fed will eventually cut its interest rate. He said that the second half of 2024 will be better, but the first half will be “really, really sloppy.” Harvey’s forecast is based on his analysis of the economic, earnings, valuation, sentiment, and technical factors that affect the stock market. He also shared his views on the sector and style preferences, as well as the risks and opportunities for investors.
The European tech sector has faced a significant drop in funding in 2023, according to a report by Atomico, a venture capital firm. The report, titled “State of European Tech”, showed that the total funding for European tech companies backed by venture capital is expected to decline by 45% in 2023, compared to 2022. The report attributed the decline to the reduced inflow of institutional capital from the U.S. and Asia, which had boosted the European tech market in 2020 and 2021, but retreated in the last year due to the macroeconomic uncertainties. The report also highlighted the bright spot of artificial intelligence, which attracted 11 mega funding rounds of $100 million or more in 2023, showing the strong potential and innovation of the European AI sector. The report also covered other aspects of the European tech ecosystem, such as talent, diversity, regulation, and social impact. You can read the full report here.
The indexes ended the day with modest losses on Monday, suffering from anemic volume which is pretty normal after a holiday shutdown. Today we have a bit more inspiration for the bulls and bears on the economic calendar and several notable earnings that have the potential to be market-moving as they are in the tech sector. However, the T2122 indicator continues to signal a short-term over-bought condition so guard yourself from getting caught up in the fear of missing out and chasing already extended stocks. That said the bulls remain in control and the so-called magnificent seven seem to have the ability to lift three of the indexes without the help of other stocks so it would be unwise to ignore the bullish enthusiasm.
Markets were dead on Monday opening a bit lower and then meandering around that “gap” the rest of the day. SPY and QQQ both “gapped” down 0.13% while DIA opened 0.05% lower. After that, none of the three major index ETFs moved more than half of a percent, and when they did move, did so in a slow, methodical, meander. This action gave us indecisive Doji candles in all three major index ETFs. This consolidation also helped the T-line (8ema) to catch up, relieving some of the overbought condition. This all happened on well-below-average volume in all three major index ETFs.
On the day, nine of the 10 sectors were in the red with Healthcare (-0.58%) and Energy (-0.55%) out front leading the way lower as Utilities (+0.05%) was the only sector in the green. At the same time, the SPY lost 0.18%, DIA lost 0.14%, and QQQ lost 0.09%. The VXX gained slightly to close at 17.54 and T2122 fell back a bit but remained in its overbought range at 89.51. 10-year bond yields plummeted to 4.39% and Oil (WTI) fell 0.69% to close at $75.02 per barrel.
The major economic news reported Monday included Building Permits, which came in above expectation at 1.498 million (compared to a forecast of 1.487 million and a prior reading of 1.471 million). Thie was a 1.8% month-on-month increase (versus a +1.1% forecast and the prior month’s -4.5%). Later, October New Home Sales came in lower than anticipated at 679k (compared to a forecast of 721k and the previous month’s value of 719k). That amounted to a 5.6% month-on-month decline (versus a forecast expecting a 4.5% decline and September’s huge 8.6% increase). Later, Bloomberg reported that the national average gasoline price has fallen for 60 straight days, the longest streak in more than a year. (14 states report average prices below $3 per gallon.)
In Fed news, the St. Louis Fed issued a report after the close that said losses caused by the FOMC’s rate hike cycle had caused historic operating losses. The report also says that these losses may cause the Fed to wait another four years to recoup its loss and begin returning profits to the US Treasury. The other mitigating factor is that the Fed is also reducing its balance sheet over this same time. The Fed sat at a -$120.4 billion income as of November 22. However, the report repeatedly stressed that the current situation and long period of recouping losses in no way impacts its ability to operate and conduct monetary policy.
In Black Friday news, updated data now shows that the big shopping day brought in $9.8 billion in the US, a 7.5% increase over Black Friday 2022. Meanwhile, Adobe Digital Insights says Cyber Monday sales are on track to reach a record $12.4 billion, which is a 5.4% increase over 2022. At midday, Adobe pointed out AMZN, WMT, and AAPL as big winners according to preliminary data.
In stock news, Reuters reported Monday that VLKAF (Volkswagen) will begin cutting staff at its “no longer competitive” namesake VW brand. The number of job cuts was not specified and it is part of the company’s current $11 billion savings program. In the US, KHC launched a $3 billion share buyback program (set to run through Dec. 26, 2026) on Monday. At the same time, Reuters reported that AMZN reached a deal with 20,000 Spanish warehouse and delivery workers who had been striking. The deal avoided one-hour shutdowns in that country on Cyber Monday. Later, PNC Bank announced it is closing 19 branches by mid-February 2024, joining the likes of JPM in consolidating to reduce costs compared to previous growth strategies. Elsewhere, RIVN announced that it had begun leasing its R1T electric pickup trucks in CA, NY, FL, and TX. Later, the Wall Street Journal reported that AMZN is now the biggest delivery company in the US, surpassing both UPS and FDX in the volume of parcels. (Prior to Thanksgiving, AMZN had already delivered 4.8 billion packages, and it expects to deliver 5.9 billion by year-end 2023.) At the same time, Chinese online retailer Shein has filed (confidentially) for a US IPO. Later, SHEL, XOM, and TTE have all been delaying the return of 5 million barrels of oil they “borrowed” from the US Strategic Petroleum Reserve. On Monday the three were granted another extension, letting them put off returning the oil until 2024-2025.
In stock government, legal, and regulatory news, labor trouble with unions in Sweden forced TSLA to sue Sweden’s Transport Agency and state-run postal service after union strikes had halted the distribution of license plates for new TSLA cars. However, the state of Sweden stands behind labor unions and collective agreements. So, TSLA’s policy of not engaging in collective bargaining at all will cause it to have a steep hill to climb to continue operations there. However, a Swedish Court ruled that the agencies need to find a way to begin delivering TSLA vehicle license plates within a week (or face a $93k fine). Later, the EU antitrust regulator issued a statement of objections to the AMZN acquisition of IRBT for $1.4 billion. Elsewhere, Reuters reported that a new policy was put in place in China, preventing major shareholders from selling stocks. The rule defines a “major shareholder” as anyone who owns 5% of a given stock. At the same time, in the US, a federal District judge ruled against META in its suit filed against the FTC, ruling that the FTC can limit the amount of money social media companies make from data collected about children. After the close, an NRLB board dismissed claims that TSLA had illegally fired employees for attempting to organize a union. However, the board found merit in two claims that TSLA maintained unlawful rules against the acceptable use of technology by employees. Also after the close, FMC was hit with a class-action lawsuit alleging the company misled investors about its business prospects following patent protection losses in China, India, and Brazil (key FMC markets). Also after the close, SWTX was given FDA approval for adult use of its noncancerous tumor treatment. (The company expects the treatment to be available to patients in 10 days.) Finally, a US Appeals court handed a massive win to MMM, CTVA, and DD by rejecting a lower court ruling that would have allowed 11.8 million Ohioans to sue the companies as a group over toxic “forever chemicals.” The ruling will force the companies to be sued by each individual (instead of as a class action). The ruling found that the lead claimant had not proven the forever chemicals found in his body had originated from those three dumpers of those chemicals and not some other unknown source. (Which in essence is a hurdle far too high for any claimant to prove.)
After the close, ZS reported beats on both the revenue and earnings lines. ZS also raised its forward guidance.
Overnight, Asian markets were mixed but leaned to the green side with seven of 12 exchanges in the green, one unchanged, and four in the red. Taiwan (+1.19%) and South Korea (+1.05%) were by far the largest gainers while Hong Kong (-0.98%) was by far the biggest loser. Meanwhile, in Europe, a different picture is taking shape with only Portugal (+0.53%) in the green as the continent is nearly red across the board. The CAC (-0.56%), DAX (-0.14%), and FTSE (-0.34%) lead the way on volume in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward an open just on the red side of flat. The DIA implies a -0.02% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.08% open at this hour. At the same time, 10-year bond yields are up to 4.408% and Oil (WTI) is up 1.10% to $75.68 per barrel in early trading.
The major economic news scheduled for Tuesday includes November Conf. Board Consumer Confidence (10 a.m.) and API Weekly Crude Oil Stocks (4:30 p.m.). We also hear from Fed members Waller (10:05 a.m.) and Bowman (10:45 a.m.). The major earnings reports set for before the open include BNS, ESLT, and PDD. Then, after the close, CRWD, FLNC, HPE, INTU, NTAP, SPLK, and WDAY report.
In economic news later this week, on Wednesday, Q3 GDP, Q3 GDP Price Index, Oct. Trade Goods Balance, Oct. Retail Inventories, Weekly EIA Crude Oil Inventories, and Fed Beige Book are reported. On Thursday, we get Oct. Core PCE Price Index, Oct. PCE Price Index, Weekly Initial Jobless Claims, Oct. Personal Spending, Nov. Chicago PMI, and Oct. Pending Home Sales. We also hear from Fed member Williams (9:05 a.m.). Finally, on Friday, we get Nov. S&P Global Mfg. PMI, Nov. ISM Mfg. Employment, Nov. ISM Mfg. PMI, and Nov. ISM Mfg. Price Index. We also hear from Fed Chair Powell at 11 a.m.
In terms of earnings reports later this week, on Wednesday, BILI, DLTR, DCI, FTCH, FL, HRL, PDCO, WOOF, VSTS, CG, FIVE, YY, LZB, NOAH, NTNX, OKTA, PSTG, PVH, CRM, SNOW, SNPS, and VSCO report. On Thursday, we hear from ASO, BIG, DOOO, CM, CBRL, EXPR, KR, RY, TD, TITN, AMWD, DELL, MRVL, and ULTA. Finally, on Friday, GCO and BMO report.
In miscellaneous news, the SEC adopted a long-blocked Dodd-Frank rule prohibiting traders in asset-backed securities from betting against the same assets that they are selling to other investors. However, in a nod to the power of US financial companies, the adopted rule exempts “risk hedging” and “market-making” from coverage under the rule. Elsewhere, Reuters reported that both the NYSE and NASDAQ are very close to enforcing its rule that companies must clawback executive incentives in the event of financial statement amendments due to material noncompliance. The rule would require listed companies to have a clawback policy in place by Dec. 1, 2023.
In European Economic News, the German ruling coalition unveiled a new budget that temporarily lifts the country’s self-imposed ban on borrowing. This comes after the top German Court threw out the government’s budget by forbidding the use of unused COVID funds. The new plan calls for Germany to borrow $49 billion as well as cutting $16.5 billion from the budget to balance the books. Meanwhile, in the UK, the British Retail Consortium reported Monday night that British shops saw the slowest increase in prices (lowest inflation) since June 2022, at 4.3% annually.
So far this morning, PDD reported beats on both the revenue and earnings lines. Meanwhile, BNS and ESLT both reported beats on revenue while missing on the earnings lines.
With that background, it looks like markets are doing the same thing this morning that they did during the premarket on Monday. All three major index ETFS opened the early session slightly lower and have put in very small and indecisive candles since that time. All three remain well above their T-line (8ema) and 50smas. So, the Bulls are still well in control of both shorter and longer-term trends. In terms of extension, the major index ETFs are a bit closer to their T-lines (8emas) as those averages have had another day to catch up during yesterday’s dead market. Meanwhile, the T2122 indicator is now in the middle of its overbought territory. So, we do have some slack if the Bulls want to make another move but, of course, the Bears have the most room to run. With that all said, remember that the market can remain extended longer than we can stay solvent being right too early.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely 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 money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Markets largely unchanged after the Thanksgiving holiday and its possible it could be a light and choppy Monday as many traders likely traveling home or extending their vacation time with family. The T2122 indicator continues to display a short-term overbought condition but there is no clue in the price action that the bulls are ready to stop buying just yet. Today we will look for inspiration in the New Home Sales and Dallas Fed MFG numbers with a very light day of earnings. However, with pending GDP and PCE numbers mid-week we can expect substantial volatility as the market reacts.
Asian markets sold off across the board while we slept with Chinese real estate decline and a Japanese surge of 2.3% in service inflation bringing out the bears. European markets are also starting the week lower across the board modestly giving up some of last week’s gains. U.S. futures point to a slightly lower open with eyes on the market moving GDP and PCE numbers pending mid-week.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday include CRNC,& ZS.
News & Technicals’
Nuclear power is one of the most controversial topics in the global efforts to reduce greenhouse gas emissions and fight climate change. Nuclear power is a low-carbon source of energy, but it also poses significant risks and challenges, such as safety, waste management, proliferation, and cost. Nuclear power is expected to be a key issue at the COP28 conference in Dubai, where world leaders and experts will discuss how to achieve net-zero emissions by 2050. One of the events that will focus on nuclear power is the “Atoms4NetZero” ministerial event on Dec. 5, where representatives from countries that use or plan to use nuclear power will share their views and experiences. The event will also address the role of nuclear innovation and technology in the energy transition. The event is organized by the International Atomic Energy Agency (IAEA), the United Nations agency that promotes the peaceful use of nuclear energy. The event aims to highlight the potential benefits and challenges of nuclear power, and to foster dialogue and cooperation among stakeholders.
The stock markets in the Asia-Pacific region fell on Monday, as the Chinese market was dragged down by the slump in the property sector, while the Japanese market faced the pressure of rising service inflation. The Chinese property firms suffered from the ongoing debt crisis of Evergrande, the largest real estate developer in China, which missed another bond payment deadline last week. The property sector accounts for a large share of the Chinese economy, and its troubles have dampened the investor sentiment and the consumer confidence. The Chinese industrial profits also declined for the third consecutive month in November, but at a slower pace than before, indicating some signs of recovery. The Chinese market will be closely watching the official and the Caixin manufacturing data for November, which will be released later this week. The Japanese market was also under stress, as the service producer price index, which measures the changes in the prices of services, rose to 2.3% in October, the highest level since January 2020. This was higher than the 2% increase in September, and reflected the impact of higher energy and transportation costs. The service inflation added to the worries of the Bank of Japan, which has been struggling to achieve its 2% inflation target for years.
U.S. consumers spent $9.8 billion online on Black Friday, the biggest shopping day of the year, according to Adobe Analytics. This was a 7.5% increase from last year, and showed that consumers were eager to take advantage of the big discounts offered by retailers. Consumers also found it easier to compare prices and deals online, rather than going to physical stores. However, the online spending spree is expected to slow down after Cyber Monday, the next big deal day, as retailers will reduce their discounts for the rest of the holiday season.
The stock market was almost unchanged on Friday, after the Thanksgiving holiday. The S&P 500 had a small 1% increase for the week, extending its positive streak for the fourth week in a row. There was not much news to move the market today, from the economic or the earnings front. The market seems to be waiting for the PCE inflation report next week, which is the Fed’s preferred measure of inflation. The interest rates on Treasury bonds rose slightly, with the 10-year yield ending at around 4.45%. The Asian markets struggled do to the sharp declines in real estate price while Japanese service inflation surged 2.3% bring out the bears. We have a light day on the earnings calendar but we have New Home Sales and the Dallas Fed numbers for the bulls or bears to find inspiration. Keep in mind many traders will be traveling home from the holiday so don’t be surprised if the volume is light.
Friday was another nothing day in the market. SPY opened dead flat, DIA gapped up 0.14%, and QQQ opened 0.09% lower. At that point, all three major index ETFs traded sideways in a tight range for the rest of the day. This left the SPY and QQQ printing indecisive Doji candles while the DIA printed a small white-bodied candle with just a tiny wick on top. Of course, all three remain well above their T-line (8ema). In fact, the SPY and DIA sit very near their highs for the year (actually two-year highs) while QQQ has already broken out and sits at its two-year highs. This all happened on very low volume, even considering it was only a 3.5-hour trading day.
On the day, nine of the 10 sectors were in the green with Healthcare (+0.83%), Energy (+0.77%), and Communications Services (+0.75%) out front leading the way higher as Technology (-0.05%) was the only sector in the red (largely on the drag of NVDA, that was down 1.93%). At the same time, the SPY gained 0.06%, DIA gained 0.35%, and QQQ lost 0.14%. The VXX dropped 4.29% to close at 17.42 and T2122 jumped back up into the top end of its overbought range at 97/18. 10-year bond yields jumped up to 4.472% and Oil (WTI) dropped 2.49% to close at $75.18 per barrel. So, all three major index ETFs closed out a fourth-straight week of gains.
The major economic news reported Friday was limited to Nov. S&P Global Mfg. PMI came in a bit light at 49.4 (compared to a forecast of 49.8 and an October value of 50.0). At the same time, November S&P Global Services PMI came in better than was predicted at 50.8 (versus a forecast of 50.4 and the October reading of 50.6). We also got the November S&P Global Composite PMI came in stable at 50.7 (compared to the October value of 50.7). Later, after the close, the Fed Balance Sheet dropped modestly for the shortened week, falling from $7.815 trillion to $7.811 trillion.
In Black Friday news, MA reported Saturday that retail sales rose 2.5% year-on-year (excluding Automotive sales). That number is not inflation-adjusted. The Mastercard SpendingPulse service said they are still expecting a 3.7% increase in holiday (11/-12/24) spending this year. Online sales also grew 8.5% year-over-year while in-store sales increased by 1.1%.
In stock news, Reuters reported HSBC customers throughout the UK reported mobile banking outages Friday with thousands of reports per hour for 10 hours. Across the channel, VLKAF (Volkswagen) announced it will launch a new entry-level priced line of electric vehicles in China by 2026. At the same time, AMZN was hit with strikes by more than 1,000 workers and even more protesters at distribution centers in Spain, UK, and Germany. Later, back in the US, NVDA announced it is delaying the release of its new H20 high-end chip. (The chip was designed to circumvent US sanctions on sales and exports to China.) The postponement was attributed to server makers having trouble integrating the chip design into their architectures with sources saying the planned November launch possibly come in February or March instead. Elsewhere, in Sweden, TSLA suffered a major setback. The company refused to negotiate with 130 union mechanics at its repair facilities. As a result, other unions are now refusing to load or unload TSLA vehicles from ships and trains. Other unions have now joined the cause including office cleaners, postal workers, and others. This has essentially shut down TSLA Swedish operations, one of which feeds the company’s Berlin plant with parts. On Saturday, it was reported that BRKA had unloaded its entire holdings of PG in Q3. This was notable (curious) because Berkshire Hathaway is always touting its love for “Dividend Kings” with a competitive advantage and PG has a 67-year record of continual dividends, has strong cash flow and margins, and maintains an “economic moat” created by its (by far) category-leading brands like Tide, Crest, Dawn, Gillette, etc.
In stock government, legal, and regulatory news, the NASDAQ reported on Friday that NVOS has now met the exchanges minimum bid price for 10 consecutive days requirement, ensuring it will be listed. Later, the FAA gave BA “type inspection authorization” for its 737 MAX 10 jet. This allows BA to begin the final series of its 400 certification test flights (including at least 1,000+ flight hours) needed for certification.
Overnight, Asian markets were red across the board. Taiwan (-0.87%), Australia (-0.76%), Shenzhen (-0.55%), and Japan (-0.53%) led the region lower. Meanwhile, in Europe, we see a similar picture, with 12 of the 15 exchanges in the red at midday. The CAC (-0.05%), DAX (-0.16%), and FTSE (-0.27%) lead the region on volume in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a start to the day just on the red side of even. The DIA implies a -0.12%) open, the SPY is implying a -0.11% open, and the QQQ implies a -0.06% open at this hour. At the same time, 10-year bond yields are down to 4.47% and Oil (WTI) is off 1.13% to $74.68 per barrel in early trading.
The major economic news scheduled for Monday is limited to Building Permits (8 a.m.) and Oct. New Home Sales (10 a.m.). The are no major earnings reports set for before the open. However, after the close, ZS reports.
In economic news later this week, on Tuesday we get the Nov. CB Consumer Confidence and API Weekly Crude Oil Stocks Report. We also hear from Fed members Waller (10:05 a.m.) and Bowman (10:45 a.m.). Then Wednesday, Q3 GDP, Q3 GDP Price Index, Oct. Trade Goods Balance, Oct. Retail Inventories, Weekly EIA Crude Oil Inventories, and Fed Beige Book are reported. On Thursday, we get Oct. Core PCE Price Index, Oct. PCE Price Index, Weekly Initial Jobless Claims, Oct. Personal Spending, Nov. Chicago PMI, and Oct. Pending Home Sales. We also hear from Fed member Williams (9:05 a.m.). Finally, on Friday, we get Nov. S&P Global Mfg. PMI, Nov. ISM Mfg. Employment, Nov. ISM Mfg. PMI, and Nov. ISM Mfg. Price Index. We also hear from Fed Chair Powell at 11 a.m.
In terms of earnings reports later this week, on Tuesday we hear from BNS, ESLT, PDD, CRWD, FLNC, HPE, INTU, NTAP, SPLK, and WDAY. Then Wednesday, BILI, DLTR, DCI, FTCH, FL, HRL, PDCO, WOOF, VSTS, CG, FIVE, YY, LZB, NOAH, NTNX, OKTA, PSTG, PVH, CRM, SNOW, SNPS, and VSCO report. On Thursday, we hear from ASO, BIG, DOOO, CM, CBRL, EXPR, KR, RY, TD, TITN, AMWD, DELL, MRVL, and ULTA. Finally, on Friday, GCO and BMO report.
In China news, Bloomberg reported Friday that there is another widespread health issue in that country. There is a wave of pneumonia cases across China which has already stretched the Chinese hospital system. The interesting thing about this wave of infections is that it seems to be disproportionally attacking children. The surge in cases has prompted the World Health Organization to ask for more details (to allay global fears about the sudden spike in respiratory illnesses potentially being due to another novel pathogen). Elsewhere, on Saturday, Chinese police said they have opened an investigation into Zhongzhi Enterprise Group (which is a major player in China’s real estate sector as well as the country’s $3 trillion “Shadow Banking” industry. Zhongzhi told investors last week that it was insolvent with $64 billion in liabilities and $28 billion in assets.
In miscellaneous news, Crude Oil (WTI) settled lower Friday but was slightly higher (essentially flat) on the week as traders wait on the delayed OPEC+ meeting. (The meeting was delayed to Nov. 30, with the claim being that the delay was due to the Israel vs. Hamas war in Gaza. However, there are reports that the real cause was differences among OPEC+ members over production levels.) Analysts are still saying the most likely outcome is that the previous production cuts are extended. Elsewhere, a four-day truce took effect Friday in Gaza. Hamas released 24 of its hostages while Israel released 39 women and children it has detained for years. According to the agreement, Israel will also allow 200 trucks of humanitarian aid into Gaza each of the four days. On Sunday, Hamas released 17 more hostages (including a 4-year-old American girl) while Israel released another 39 women and children it had held in jail.
With that background, it looks like markets are undecided so far in the premarket session with all three major index ETFs just on the red side of flat. In addition, all three are printing indecisive candles so far in the early session. All three major index ETFs remain well above their T-line (8ema) and 50smas. So, the Bulls are in still well in control of both the trends. In terms of extension, the major index ETFs are at the edge of being too far extended above their T-lines (8emas). Meanwhile, the T2122 indicator is back deep inside of its overbought territory. So, we don’t have a lot of slack for Bulls to work with and the market is in need of some rest or a pullback to remain a healthy rally. With that all said, remember that the market can remain extended longer than we can stay solvent being right too early.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely 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 money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Tuesday was essentially a nothing day with all the moves made at the open. The SPY gapped down 0.23%, the DIA opened down 0.13%, and QQQ gapped down 0.44%. From there, all three major index ETFs ground sideways in a tight range for the rest of the day. This action gave us inside day Doji-type candles in the SPY, DIA, and QQQ. All three remain well above their T-line (8ema). This all happened on extremely low volumes in the large-cap index ETFs and below-average volume in the QQQ.
On the day, seven of the 10 sectors were in the red with Technology (-0.87%) out front leading the way lower while Basic Materials (+0.28%) was by far the strongest sector. At the same time, the SPY lost 0.22%, DIA lost 0.20%, and QQQ lost 0.58%. The VXX fell almost 2% to close at 18.06 and T2122 fell just outside its overbought territory to the very top of the mid-range at 79.02. 10-year bond yields dropped again to 4.396% and Oil (WTI) was flat to close at $77.81 per barrel. So, after a big bullish day on Monday, Tuesday saw some profit-taking and indecision. Perhaps most of the traders have already taken off for the holiday. Either way, it really was a treading water day after the open. However, it is worth noting we are still just a bit stretched.
The major economic news reported Tuesday included October Existing Home Sales, which came in lower than expected at 3.79 million (compared to a forecast of 3.90 million and a September value of 3.95 million). That was a 4.1% decline from the Sept. reading, which itself was a 2.2% decline over August. Then after the close, the Weekly API Crude Oil Stocks Report showed a much bigger inventory build than predicted at +9.047 million barrels (versus a +1.467-million-barrel forecast and a prior week value of 1.335 million barrels).
However, the main news of the day was the release of November Fed Minutes. The main headline of that release was exactly what the Fed has been saying for months, conditions seem to warrant keeping rates higher for longer (restrictive). Specifically, the minutes said, “All participants judged that it would be appropriate for policy to remain at a restrictive stance for some time until inflation is clearly moving down sustainably toward the Committee’s objective.” In addition, the committee said a period of “below-potential growth in real GDP and some further softening in labor market conditions” (will be needed to reduce inflation enough to return to 2 percent inflation). The minutes also said that ALL PARTICIPANTS agreed to proceed carefully (meaning they recognize we are near the end of tightening and risks are now becoming two-sided and implying there is less interest in more hikes) and “all judged it appropriate” to hold rates steady (meaning there were no hawks fighting for a hike).
In stock news, WH rejected a revised offer of $86 per share from CHH. (The revised offer was $7.8 billion lower than the October 17 original offer.) Later, AVGO said it would be closing its $69 billion purchase of VMW today (Wednesday). At the same time, PLTR announced it had won a $414 million contract from the UK’s NHS. Elsewhere, OMF entered into an agreement to acquire a subsidiary of JEF in a $115 million deal. At the same time, CNBC reported that Jeff Bezos is expected to sell $1 billion of his AMZN stock after selling $240 million of it last week. Later, Reuters reported that WMT plans to add parcel stations to its stores in a bid to cash in on the demand for quick deliveries during the holidays. At the same time, GM announced it would provide a new “business update” on Nov. 29 after the ratification of the UAW contract. At the same time, F announced it is scaling back its planned EV battery plant in Michigan after US lawmakers chided the company for using Chinese company CATL as a partner in the plant. After the close, a coalition of labor unions announced it is seeking three board seats at SBUX. Also after the close, T announced it will spin off its cybersecurity unit into a new venture in partnership with venture capital firm WillJam Ventures. T will retain majority ownership of the spinoff.
In stock government, legal, and regulatory news, the State of TX sued PFE alleging the company manipulated its quality control testing for an ADHD drug. Later, a NY District judge ruled against a group of US pension funds who had sued to block Denmark’s tax authority from pursuing millions of dollars in tax fraud cases. At the same time, a US jury ordered BAYRY (Bayer) to pay Seattle school employees $165 million after finding that PCB chemicals leaked from light fixtures and made them sick. This adds to $870 million in verdict awards in other cases for the same reason. Later, PAYC was hit with a second lawsuit by prominent law firms. The suits claim the company did not fully disclose the negative impact its “Beti” product had on performance, thus defrauding investors. At the same time, the FCC Chair proposed a rule barring cable and satellite TV providers from charging consumers exit fees or early termination fees. The initial vote on the proposed rule will take place on Dec. 13. Meanwhile, after the close, Canada introduced tax rules aimed at easing its housing shortage by reducing ABNB and VRBO’s ability to deduct certain expenses from taxes. Also after the close, the FTC announced it is streamlining investigations into cases where AI is used to break regulations. In the evening, a Florida court announced that the judge has found very “reasonable evidence” that TSLA and CEO Musk knew about defects in its Autopilot system but still allowed cars to use the feature unsafely. This could be devastating to the company but the case will surely (for that reason) be appealed until the end of time. Later, Bloomberg reported that AAPL is facing NLRB allegations that it excluded union retail workers in MD from benefits in 2022.
After the close, ADSK, HPQ, NVDA, and URBN all reported beats on both the revenue and earning s lines. It is worth noting that NVDA had an absolute blowout quarter with revenue increasing 206% (more than tripling year-on-year) and beating its own raised estimates from a quarter ago by 12%. At the same time, NVDA beat its estimates for earnings from Q2 by a whopping 26%. Meanwhile, JWN missed on revenue while beating on earnings. Unfortunately, GES missed on both the top and bottom lines. Also note that ADSK and GES lowered guidance while NVDA raised forward guidance again.
Overnight, Asian markets were mixed but leaned toward the downside. Shenzhen (-1.41%), Shanghai (-0.79%), and Taiwan (-0.61%) led the region lower. Meanwhile, in Europe, the exact opposite picture is taking shape at midday with only four of the 15 bourses even modestly in the red. The CAC (+0.36%), DAX (+0.40%), and FTSE (-0.21%) lead the region higher on volume in early afternoon trade. In the US, as of 7:30 a.m., Futures are now pointing toward a modest green start to the day. The DIA implies a +0.04% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.38% open at this hour. At the same time, 10-year bond yields are falling again to 4.365% and Oil (WTI) is down 2.30% to $75.97 per barrel in early trading.
The major economic news scheduled for Wednesday includes Oct. Core Durable Goods Orders, Oct. Durable Goods Orders, and Weekly Initial Jobless Claims (all at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations (all at 10 a.m.), and EIA Weekly Crude Oil Inventories (at 10:30 a.m.). The major earnings reports scheduled for before the open include DE. There are no major earnings reports after the close.
In economic news later this week, there is no major economic news scheduled for Thursday with markets and Federal agencies closed for Thanksgiving. Finally, on Friday, we get S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI.
In terms of earnings reports later this week, there are no reports on Thursday. Finally, on Friday we hear from HTHT.
In miscellaneous news, mortgage demand jumped to a new six-week high as rates continue to drop quickly. The national average 30-year, fixed-rate loan rate was 7.41% (down 0.20% from the prior week’s 7.61%). As a result, applications for new home purchase loans rose 4% and applications for refinance loans climbed 2%. This gave us an average increase of 3% in mortgage application volumes. Elsewhere, Sam Altman agreed to return as CEO of OpenAI after a board member joined the 700 employees (out of 770) signed the letter to the board threatening to resign if Altman was not brought back. The OpenAI board will also undergo a massive overhaul as a former co-CEO of CRM Taylor and former US Treasury Sec. Summers joining the board. (Taylor takes over as the new board Chairman.) There has been no word on which board members were fired (or taken out back and shot), but the entire high-tech industry seems to be comparing this to the board coup that ousted Steve Jobs from AAPL way back in 1985. Finally, in geopolitical news, Israel agreed to a deal creating a four-day pause to their onslaught in Gaza in exchange for the release of 50 hostages. In addition to the time, Israel will allow an unknown increase in humanitarian aid during the four days. At the same time, the IDF has said it is making plans to turn the focus of its invasion of Gaza toward the South, saying that many of the Hamas terrorists they are trying to destroy had escaped South during the IDF pincer movement on Northern Gaza. The point the IDF wanted to make is that the war is definitely not done and this was strictly a “hostages for time” pause deal.
So far this morning, DE beat on both the revenue and earnings lines. Both numbers were blowout beats with revenue beating estimates by almost 20% and earnings coming in over 10% above expectation. However, DE did lower its forward guidance. Coupled with last night’s massive blowout by NVDA and the market is going into the holiday on an earnings high.
With that background, it looks like the Bulls are in control of the premarket session in the SPY and QQQ. The DIA is positive, but printing a much more indecisive Doji-type candle in the early session while both the SPY and QQQ are printing large-body white candles. All three major index ETFs remain well above their T-line (8ema) and 50smas. So, the Bulls are in still well in control of both the short-term and 4-5-month trend. In terms of extension, the major index ETFs are on the edge of getting back to being too far extended from their T-lines (8emas) but for now are okay after Tuesday’s inside day. Meanwhile, the T2122 indicator has fallen back but down to the top of its mid-range. So, we have some slack to work with but we are still leaning toward the need of pause or pullback. With that all said, this is traditionally the heaviest holiday travel day. So, don’t be surprised if volumes are low and volatility increases as many traders either leave early or don’t show up at all 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 absolutely 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 money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Monday was another big day for the Bulls. All three major index ETFs opened flat with DIA “gapping” the most by opening down 0.09%. However, that was the last we saw of the Bears. The SPY, DIA, and QQQ then gave us a long steady rally until the last 15 minutes of the day when we saw very modest profit-taking. This action gave us large, white-bodied candles with small upper wicks (and no lower wicks) in all three major index ETFs. All three remain well above their T-line (8ema). This happened on a bit lower-than-average volume in the QQQ as well as a well-below-average volume in the SPY and DIA.
On the day, nine of the 10 sectors were in the green with Communications Services (+1.42%) out front leading the way higher while Utilities (-0.06%) was the only sector in the red. At the same time, the SPY gained 0.77%, DIA gained 0.60%, and QQQ gained 1.22%. The VXX fell 0.75% to close at 18.42 and T2122 fell but remained in the middle of its overbought territory at 90.79. 10-year bond yields dropped again to 4.426% and Oil (WTI) spiked 2.12% to close at $75.50 per barrel. So, after a few days of consolidation, Monday was another move in the three-week-long strong rally. We are not extremely stretched but are overbought.
There was no major economic news reported Monday. However, the NY Fed released the results of its survey of US credit demand. The report said there was a “notable decline” in credit over the last year with applications down. (Down from 44.8% of those surveys in 2022 to 41.2% of those surveyed in 2023. The pre-pandemic level was a high of 45.8% in 2019.) However, the survey also found an increase in “interest in applying for more credit.” (This hit 29% in October versus the year-to-date average of 26%. The 2019 number for interest in applying was another high 27.2%.) Interestingly, this may fly in the face of the narrative that “things were great pre-pandemic” since more people were applying for credit and more people were interested in applying then versus now. However, I suppose it is also possible to argue that fewer people apply now because rates are higher and fewer are interested in applying because they may think they would be turned down.
In Fed speak news, Fed Presidents Goolsbee (Chicago) and Collins (Boston) sparked investor enthusiasm Monday. Both hinted at the possibility of rate cuts by May. In a speech, Goolsbee gave a sense of hope, suggesting the economy is on what he has called “the golden path” (lowering inflation without a crashing economy). Goolsbee did not provide specific forecasts or discuss a specific schedule for future interest rates. He did, however, acknowledge the market’s anticipation of rate cuts with a 28% chance priced into futures for March and a 58% probability by May. In the same vein, Boston Fed President Collins noted the encouraging pattern of inflation control from last Friday’s data. Collins also noted that while future hikes are still possible, they are not her primary expectation.
In stock news, MS announced a major reshuffle of their top executives in preparation for Ted Pick rising to the CEO role. At the same time, not to be outdone, C announced its own reshuffle as part of CEO Fraser eliminating an entire layer of management (300 senior management roles, which is just under 10% of the staff at that level of the company) as a part of “Project Bora Bora” restructuring. Later, Bloomberg reported NVDA is working with a spinoff from GOOGL (SandboxAQ) to use its high-end chips for drug and battery development by simulating chemical reactions. At the same time, MGM union workers rejected the tentative contract the union had negotiated (which included an immediate 18% pay increase). At the same time, Reuters reported that employees at two WFC branches have filed to have elections on whether or not to unionize. Elsewhere, AAPL announced it will delay the release of its $3,500 VR/MR Headset until March (the prior date was January) as the company is still having design issues. Meanwhile, NSANY (Nissan) announced it is following all other non-union automakers in hiking US worker wages. NSANY said it will increase US plant (9,000 employees) wages by 10% in January. After the close, FSR announced that its Chief Accounting Officer had quit, less than two weeks after joining the company. Also after the close, TSLA announced it will RAISE prices on its Model Y in China starting today, by an odd 0.6%. This may signal a slowing of the EV price war.
In OpenAI news, a few days after the company founder and CEO was ousted by the board (and immediately hired by MSFT), almost 700 of the 770 company employees threatened to resign, unless the company’s board resigns, in a formal letter. The list of signers of that letter includes every significant employee other than three C-suite executives. (The ousted CEO Altman was given authority to hire them all for MSFT by MSFT CEO Nadella.) If 90% of the staff did leave, OpenAI loses most (or all) of its value overnight. Not to be left behind, CRM CEO Benioff gave an open invitation to those OpenAI employees to join CRM instead of MSFT. Shortly afterward, significant VC investors in OpenAI told Reuters they are considering suing the board. For his part, MSFT CEO Nadella (MSFT is the largest shareholder of OpenAI) said that the governance (read board) of OpenAI needs to change immediately, regardless of whether or not Altman returns to that company.
In stock government, legal, and regulatory news, Reuters reported that employees at two WFC branches have filed with the NLRB to have elections on whether or not to unionize. The government of Canada announced Monday that it will put forward legislation to provide $20 billion in subsidies (over five years) for “carbon capture and net-zero energy” projects. At the same time, BAYRY (Bayer) was ordered to pay $1.56 billion to four plaintiffs by a MO jury over claims the company’s Roundup weedkiller had caused diseases including cancer. Later, Reuters reported that the SEC has been telling lobbyists and corporate executives that it may consider “scaling back” its long-anticipated environmental emissions and greenhouse gas reporting rules. (Back in March 2022, the SEC announced rules requiring public companies to report climate risks and material emissions. However, with only a one-vote majority over GOP SEC Commissioners, it seems corporate interests have won the fight and will take the sting out of the rules allowing corporations to mostly go on as usual. Elsewhere, a German court ruling (saying the government cannot reallocate unused Covid pandemic funds) has wiped $66 billion off the books and put many projects at risk. Those funds had been slated for subsidies for two chip plants (TSM, INTC, and IFNNY plants), a decarbonized steel capacity increase, and multiple EV battery supply chain projects (impacting TSLA). The next step is undoubtedly companies threatening to cancel projects, which had been pegged at creating 500k jobs. Later, a division of ASGN was named the primary contractor for a $61 billion (over 10 years) Dept. of Veteran Affairs IT overhaul project. At the same time, the NHTSA said it has opened an investigation into HYMTF and KIA over 16 separate recalls the companies have had to issue over 6.4 million vehicles relating to brake fluid leaks that could cause fires. Meanwhile, TM agreed to pay $60 million in a settlement with the CFPB (of which $12 million was fines) related to illegally bundling unwanted products into car loans that increased loan payments and hurt consumer credit ratings. At the same time, the US Senate has informed AAL, DAL, SAVE, and other airlines that it will hold a hearing investigating baggage, flight change, and seat selection fees. Later, the FDA warned healthcare providers not to use Monoject syringes from CAH (patient-controlled pain management devices) after the company initiated a recall.
After the close, A, BRBR, CENT, CENTA, KEYS, TCOM, and ZM…all…reported beats on both the revenue and earnings lines. It is worth noting that A, CENT, and KEYS have lowered their forward guidance. However, ZM raised its own guidance.
Overnight, Asian markets were mixed but leaned toward the green side on numbers and strength of move. Taiwan (+1.20%) and South Korea (+0.77%) paced the gainers while Singapore (-0.49%), Shenzhen (-0.26%), and Hong Kong (-0.25%) led the losses. In Europe, the bourses lean heavily toward the red at midday. The CAC (-0.23%) and FTSE (-0.47%) lead the way lower while the DAX (+0.23%) is one of only three exchanges in the green 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 -0.15% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.13% open at this hour. At the same time, 10-year bond yields are down to 4.41% and Oil (WTI) is off slightly to $77.70 per barrel in early trading.
The major economic news scheduled for Tuesday is limited to October Existing Home Sales (10 a.m.), FOMC Meeting Minutes (2 p.m.), and the API Weekly Crude Oil Stock Report (4:30 p.m.). The major earnings reports scheduled before the open include ANF, AEO, ADI, BIDU, BBY, BURL, CAL, DKS, DY, IQ, J, KSS, LOW, MDT, NJR, and YSG. Then, after the close, ADSK, GES, HPQ, JWN, NVDA, and URBN report.
In economic news later this week, on Wednesday, Oct. Core Durable Goods Orders, Oct. Durable Goods Orders, Weekly Initial Jobless Claims, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and EIA Weekly Crude Oil Inventories are reported. There is no major economic news scheduled for Thursday with markets and Federal agencies closed for Thanksgiving. Finally, on Friday, we get S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI.
In terms of earnings reports later this week, on Wednesday, DE reports. There are no reports on Thursday. Finally, on Friday we hear from HTHT.
In miscellaneous news, MCO said Monday that “structural demand” for US bonds remains very strong, despite the increased volatility of recent months. Specifically, Moody’s said not to worry about bond demand because, “As the Fed reduces its Treasury holdings, foreign central banks, pension funds, insurance companies and households will be stabilizing factors in the market.” (This seems to be a bit at odds with the rating agency’s recent change of US debt outlook to negative. However, it may be informed by the just-passed CR which eliminates the immediate prospect of a US government closure.) Elsewhere, the US Dollar dropped to its lowest level in two months Monday as expectations of interest rate increases are now past. Meanwhile, in Germany, producer prices fell a whopping 11.0% year-on-year in October. Finally, CNBC reported that gas prices have fallen to their lowest Thanksgiving week price since 2020 after nine consecutive weeks of drops in the national average gasoline price.
So far this morning, ANF, ADI, DKS, DY, IQ, KSS, and MDT all reported beats on both the revenue and earnings lines. Meanwhile, BIDU, BBY, CAL, and LOW all missed on revenue while beating on earnings. On the other side, J beat on revenue while missing on earnings. Unfortunately, BURL missed on both the top and bottom lines. It is worth noting that ADI, J, and LOW lowered their forward guidance. However, ANF, DKS, HIBB, and MDT raised their guidance.
With that background, all three major index ETFs opened the premarket just inside the large white candle from Monday. So far in the early session, they have printed small, indecisive, black-bodied candles. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls are in control of both the short-term and 4-5-month trend. In terms of extension, the T-lines (8emas) are not too far extended but Monday’s candle did put all three major index ETFs at the edge of being stretched again. Meanwhile, the T2122 indicator has fallen back but remains in the middle of its overbought range. So, we have some slack to work with but we are still leaning toward the need of pause or pullback. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon.
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 absolutely 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 money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
The parabolic bull run continued on Monday as the magnificent seven surged to a new high for the year with the composite up % in 15 trading days. Though the T2122 indicator continues to display an overbought condition corporate buybacks and fear of missing out continue to fuel bullish momentum. Today with will get Existing Home Sales figures and the FOMC minutes along with a busy day of earnings highlighted by the highly anticipated report from NVDA after the bell. Plan carefully as volumes are likely to start declining as traders escape early to beat the travel rush for the holiday.
While we slept Asian markets closed mixed but mostly lower with modest gains and losses as China’s real estate crisis deepened requiring more government intervention. European markets trade mostly lower this morning with modest declines in a cautious session. U.S. futures point to a slightly bearish open ahead of earnings and economic reports with the holiday shutdown just around the corner.
Microsoft, the tech giant and the major investor of OpenAI, has expressed its continued support for the artificial intelligence research company and its former CEO Sam Altman, who was removed from his position on Friday. Microsoft’s CEO Satya Nadella said in an interview with CNBC on Monday that he still believes in OpenAI’s vision and mission and that he respects Altman’s contributions to the company. Nadella also said that he understands that OpenAI needs to change its governance structure, after facing a backlash from its employees and investors over Altman’s ouster. He said that he hopes that OpenAI can resolve its internal issues and continue to pursue its ambitious goals of creating artificial general intelligence and benefiting humanity.
OpenAI, the artificial intelligence research company that aims to create artificial general intelligence and benefit humanity, is facing a crisis of leadership and trust, as hundreds of its employees have signed a letter demanding the resignation of its board. The letter, which was leaked to the media, accuses the board of mismanaging the company, violating its values and principles, and ousting its former CEO Sam Altman without a proper explanation. The letter also warns that if the board does not step down, many employees will leave the company and join Altman’s new venture at Microsoft, where he and another co-founder and board member of OpenAI, Greg Brockman, have been hired to lead a new AI division. The letter claims that the employee exodus will happen “imminently.” Among the signatories of the letter are some of the top executives and researchers of OpenAI, such as Mira Murati, who served as the interim CEO after Altman’s departure, Brad Lightcap, the chief operating officer, and Ilya Sutskever, a co-founder and board member of OpenAI. The letter reflects the deep dissatisfaction and frustration of the employees with the board’s decisions and actions, and the loss of confidence in the company’s direction and vision.
Lowe’s, the home improvement retailer, has reduced its sales forecast for the year, as it faced lower demand from customers for do-it-yourself projects in the third quarter. Lowe’s reported that its sales fell by nearly 13% compared to the same quarter last year and that its comparable sales, which measure sales at stores open at least a year, declined by 7.5%. Lowe’s said that customers spent less on home improvement projects, as they shifted their spending to other categories, such as travel, entertainment, and dining out. Lowe’s also faced supply chain challenges, labor shortages, and higher costs, which affected its margins and profitability. Lowe’s now expects its comparable sales to drop by about 5% for the fiscal year, which is worse than its previous estimate of a 2% to 4% decline. Lowe’s shares slid by more than 8% on Tuesday, after the disappointing results.
The stock market continued its parabolic bull run driven mostly by the so-called magnificent seven as the QQQ stretched to a new year high ahead of the Thanksgiving holiday. Treasury bonds went down slightly with the 10-year U.S. Treasury bond yield, trading around 4.42%, which is good for both stocks and bonds. The Bloomberg U.S. Aggregate bond index, which represents the overall U.S. bond market, is up more than 3.0% in November but is still slightly negative for the year 2023. Today we have a busy earnings calendar with the higher anticipated report from NVDA after the bell. Investors will also look for inspiration in the Existing Home Sales and FOMC minutes coming at 2 PM Eastern. As you plan forward please keep in mind the U.S. markets will be closed on Thursday and will have a half-day on Friday, ending at 1 PM.
Friday was another indecisive day in markets as SPY and DIA opened flat while QQQ opened 0.18% lower. At that point, SPY spent the entire day in a very slow, gradual rally. Meanwhile, DIA sold off modestly the first 10 minutes and then traded sideways the rest of the day not far below the open level. At the same time, QQQ followed the SPY lead with a long, slow rally that lasted all day. However, since it started lower on a larger gap the move closed it just above the prior close. This action gave us white-bodied Spinning Tops in the SPY and QQQ and a black-bodied Spinning Top in the DIA. All three major index ETFs remain well above their T-line (8ema) despite the 3–4-day consolidation. This all happened on far-below-average volume in all three major index ETFs.
On the day, all 10 sectors were in the green with Energy (+2.18%) way out front and leading the way higher while Consumer Defensive (+0.05%) lagged behind the other sectors. At the same time, the SPY gained 0.12%, DIA lost 0.17%, and QQQ gained 0.02%. The VXX fell more than 1.54% to close at 18.56 and T2122 spiked up again to the overbought territory at 94.94. 10-year bond yields dropped again to 4.439% and Oil (WTI) spiked 4.03% to close at $75.84 per barrel. So, Friday was another holding pattern day with markets waffling sideways all day. We were able to relieve over-extension by marking time (giving the T-line time to make up ground), which was greatly needed. However, for the most part, it was just an indecisive pause day in a Bullish rally.
The major economic news reported Friday was limited to October Building Permits, which came in above expectations at 1.487 million (compared to a forecast of 1.450 million and even above the September value of 1.471 million). This was a 1.1% month-on-month increase after September had given us a 4.5% decrease over August. At the same time, October Housing Starts also came in above predicted at 1.372 million (versus a forecast of 1.345 million and the September reading of 1.346 million). This amounted to a 1.9% increase from September which itself had seen a 3.1% increase over August.
In Fed Speak news, Boston Fed President Collins stated the FOMC may need to worry less about inflation and let the benefits of strong employment spread to workers. She said, “The labor force participation rate for prime-aged workers is higher today than it was just before the pandemic … If labor supply expands to meet demand in tight labor markets, then higher levels of economic activity in such times may not generate added price pressures requiring tighter monetary policy.” “Unemployment rates that are persistently higher by race, or by place, as they have been for a long time, reflect underutilization of our country’s labor resources, and that adversely affects national productivity and prosperity.” Elsewhere, Chicago Fed President Goolsbee pointed to housing prices as the key to sealing the country’s path to 2% inflation. Goolsbee said, “If we hit the targets that we expect to hit, then we would be on path to get to 2%, and that’s what I call the golden path — no recession, and inflation gets down — but that housing inflation is the thing we should really keep an eye on.” Later, Fed Vice-Chair Barr told Bloomberg that current economic readings align with the Fed’s goal of getting to a 2% inflation target. Even later, Collins spoke again, echoing Barr’s sentiments by saying there has been “promising news” lately on the economic data front but also said she would not take additional tightening off the table yet. Finally, San Francisco Fed President Daly indicated patience was in order, with no need to hike or cut rates at the moment. She said, “We can take our time to do it right.” However, at the same time, Daly wanted to communicate the Fed’s “resolve” to get to the 2% target.
In stock news, union members at both STLA and F voted to ratify the UAW contracts that had been tentatively agreed in October. This brings the UAW vs Big-3 saga to an end for another four years. Elsewhere, DCI announced a 12 million share buyback program on Friday. Later, Reuters reported that C employees now expect major layoffs and a management change announcement on Monday. Meanwhile, the CEO of AI leader OpenAI (ChatGPT) announced he is stepping down Friday after the company board lost confidence in his direction. (It is worth noting that MSFT is the largest shareholder of OpenAI and controls multiple board seats.) Later, the CFO of NKLA resigned after less than a year on the job, saying he “wished to pursue other interests.” After the close, Reuters reported that GM is continuing its on-street testing of Cruise robotaxis in Dubai and Japan, despite parking its entire fleet in the US. Also after the close, AMZN announced it would be cutting “several hundred” jobs from its Alexa voice assistant unit, citing a greater focus on AI (which presumably can provide the same service).
In stock government, legal, and regulatory news, the CFPB handed Wall Street banks a rare win from the consumer protection agency. The CFPB proposed cracking down on Big Tech firms by regulating electronic payment and “digital wallet” providers such as AAPL, GOOGL, and PYPL. This is a boon for V, MA, JPM, C, BAC, WFC, and other more traditional payment processors. At the same time, DRMA received FDA approval on the protocols to be used for a phase III study of their acne treatment. Later, the Financial Times reported that NOC is pulling out of a competition to supply the UK military with narrowband military satellite communications. Meanwhile, PAYC was hit with a class action lawsuit. The suit alleges that the company and its executives made misleading statements about one of its products leading to be surprised by a significant miss on its Q3 report. Later, the NASDAQ announced that MDRX is under investigation due to its failure to submit financial documents, including its FY2022 Annual and Quarterly reports as well as Quarterly reports in 2023. After the close, the FDA flagged insufficient data in voting 12-1 against an MRK late-stage drug for chronic cough.
Overnight, Asian markets were mixed but leaned toward the green side. Hong Kong (+1.86%) was way out front with South Korea (0.86%) a distant second leading the way higher. Meanwhile, Japan (-0.59%), Singapore (-0.42%), Malaysia (-0.26%), and India (-0.19%) were the only losing exchanges. In Europe, we see a similar picture taking shape at midday. The CAC (+0.15%) leads the more plentiful green list while the DAX (-0.28%) and FTSE (-0.29%) pace five losing exchanges in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed, flat start to the day. The DIA implies a -0.03% open, the SPY is implying a +0.02% open, and the QQQ implies a +0.12% open at this hour. At the same time, 10-year bond yields are back up to 4.482% and Oil (WTI) is up 1.5% to $77.05 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 NIU. Then, after the close, A, BRBR, CENT, CENTA, KEYS, TCOM, and ZM report.
In economic news later this week, on Tuesday we get October Existing Home Sales, FOMC Meeting Minutes, and the API Weekly Crude Oil Stock Reports. Wednesday, Oct. Core Durable Goods Orders, Oct. Durable Goods Orders, Weekly Initial Jobless Claims, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and EIA Weekly Crude Oil Inventories are reported. There is no major economic news scheduled for Thursday with markets and Federal agencies closed for Thanksgiving. Finally, on Friday, we get S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI.
In terms of earnings reports later this week, on Tuesday we hear from ANF, AEO, ADI, BIDU, BBY, BURL, CAL, DKS, DY, IQ, J, KSS, LOW, MDT, NJR, YSG, ADSK, GES, HPQ, JWN, NVDA, and URBN. On Wednesday, DE reports. There are no reports on Thursday. Finally, on Friday we hear from HTHT.
In miscellaneous news, Elon Musk’s mouth has him in trouble again. Last week he made a comment widely seen as antisemitic. This has caused another mass exodus (see what I did there?) of major advertisers from his renamed Twitter platform. This includes AAPL, DIA, IBM, WBD, LGF.A, ORCL, CMCSA, PARA, etc. One analyst told Bloomberg Friday that this hit has likely taken that company down to about one-third the value it had when he bought it just over a year ago. Then, on Saturday, a major investor in TSLA called for the board to place Musk on leave “for a month or two.” Elsewhere, in bad news for climate change deniers, the USDA has been forced to revise the national Plant Hardness Map (map indicating what plants can be grown in each area). The entire country shifted a bit more toward tropical with half the country shifting an entire zone since 2012. This is a result of the climate being 2.5 degrees warmer on average than it was a decade ago.
With that background, it looks like all three major index ETFs are looking to continue their consolidation…at least based on their premarket candles. All three are flat and have printed small, indecisive candles at this point of the early session. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls are in control of both the short-term and 4-5-month trend. In terms of extension, the T-lines (8emas) are now catching up with all three major index ETFs. However, the T2122 indicator has now back up in the upper end of its overbought range. So, we have some slack to work with but we are still leaning toward the need of pause or pullback. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon.
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 absolutely 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 money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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Although Friday proved to be a light choppy day the bulls held the bullish parabolic run for the third week in a row. The Bears after working so hard this year seem to have entered hibernation heading into the holidays. However, with a shortened week with light earnings and economic calendars can the corporate buybacks keep the party going this week? Perhaps, but keep in mind volume could quickly decline this week with record travel expected over the Thanksgiving holiday. Plan your risk accordingly.
Asian markets closed mostly higher overnight with China holding benchmark lending rates unchanged. European markets trade mixed but mostly lower this morning with modest gains and losses in a cautious session. U.S. futures bounced around the flatline this morning but will look for inspiration in a light earnings and economic day to begin this holiday-shortened week.
Economic Calendar
Earnings Calendar
Notable reports for Monday include A, BRBR, KEYS, & ZM.
News & Technicals’
Disney, the entertainment giant, has been struggling to produce high-quality films since the pandemic ended, according to its CEO Bob Iger. He admitted last week that he was not satisfied with the quality of Disney’s films in the past two years. Disney’s film business has been losing money, as it has not reported positive operating income in its “Content Sales/Licensing and Other” segment, which includes theatrical releases, since the quarter that ended in April 2022. However, Disney hopes to turn things around in 2024, with some highly anticipated films, such as Marvel’s “Deadpool 3,” Pixar’s “Inside Out 2,” and “Mufasa: The Lion King,” a prequel to the classic animated film.
Cruise, the self-driving car company owned by General Motors, has announced a major leadership change, as its co-founder and CEO Kyle Vogt has stepped down from his role. Vogt, who founded Cruise in 2013 and sold it to GM in 2016, said he was leaving the company to spend time with his family and explore new ideas. He did not explain the reason for his departure, which comes after a series of setbacks for Cruise, such as delays in launching its robotaxi service, lawsuits from competitors, and regulatory hurdles. Cruise has appointed Mo Elshenawy, its former executive vice president of engineering, as its new president and CTO. Elshenawy, who joined Cruise in 2018, will lead the company’s efforts to develop and deploy its autonomous vehicles.
OpenAI, the artificial intelligence research company co-founded by Elon Musk, has undergone a dramatic leadership shake-up in the past few days. On Friday, the board of OpenAI announced that it was removing Sam Altman, the former president of Y Combinator, as its CEO and replacing him temporarily with Mira Murati, the chief technology officer of OpenAI. Then on Sunday night, OpenAI revealed that it had hired Emmett Shear, the former CEO of Twitch, the live streaming platform, to be its new CEO. However, the story did not end there, as on Monday morning, Satya Nadella, the CEO of Microsoft, announced that Altman and Greg Brockman, the co-founder and chairman of OpenAI, would be joining Microsoft as part of a new AI division. Microsoft is a major investor and partner of OpenAI and has provided it with cloud computing and technical support. The reasons for the sudden changes in OpenAI’s leadership are unclear, but they could signal a shift in the company’s vision and direction.
Stocks ended the week with little change on Friday but extended the third week in a row and it seems the bears went into hibernation heading into the holidays. The S&P 500 and QQQ are very near 2023 highs and though this rally has gone parabolic the fear of missing out could keep the chaise going this week. However, other than corporate buybacks there is very little to earnings and economic calendar to garner a lot of enthusiasm in this holiday-shortened week. With the expectation of a record holiday, travel volumes could begin dropping sharply by Tuesday afternoon so plan your trading carefully.
