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.

🎯 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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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 opened lower on Thursday but then proceeded to put in a nothing day.  The SPY “gapped” down 0.10%, the DIA opened 0.18% lower, and the QQQ gapped down 0.21%.  However, as mentioned, the rest of the day was a sideways meander in all three major index ETFs, crossing and recrossing the gap and never straying too far away from it at either the peaks or valleys.  This action gave us indecisive, white-body, Spinning Top candles in the SPY, DIA, and QQQ.  (The QQQ had the largest of the bodies.)   The SPY could also be seen as a Bullish Engulfing candle if you squint.  All three remain well above their T-line (8ema) and 50sma.  This happened on average volume in the DIA, and below-average volume in the SPY and QQQ.

On the day, eight of the 10 sectors were in the red with Energy (-2.00%) way out front leading the way lower while Utilities (+0.44%) held up far better than any other sector.  At the same time, the SPY gained 0.12%, DIA lost 0.07%, and QQQ gained 0.09%.  The VXX fell more than 1.5% to close at 18.85 and T2122 dropped back down into its mid-range at 66.67.  10-year bond yields dropped to 4.443% and Oil (WTI) plummeted 4.87% to close at $72.93 per barrel.  So, Thursday was a holding pattern with markets waffling sideways all day.  We were able to relieve some 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 Thursday included the October Month-on-Month Export Price Index, which came in far below expectation at -1.1% (compared to a forecast of -0.5% and far below the September value of +0.5%).  At the same time, the October Month-on-Month Import Price Index also came in far below anticipated at -0.8% (versus a forecast of -0.3% and far below the September reading of +0.4%).  Both of these show that inflationary pressures are falling, despite the narrative of some.  Meanwhile, Weekly Initial Jobless Claims were greater than predicted at 231k (which was a three-month high, compared to a forecast of 220k and far above the prior week’s 218k).  At the same time, The Philly Fed Mfg. Index was reported better than expected but still showing deteriorating conditions at -5.9 (versus a -9.0 forecast and a -9.0 previous reading).  Later, October Month-on-Month Industrial Production came in lower than predicted at -0.6% (compared to a forecast of -0.3% and far below the Sept. value of +0.1%).  On a year-on-year basis, Oct. Industrial Production was down 0.68% well below the Sept. reading of -0.16%.  (It should be noted, that the UAW strikes had a not insignificant impact on the October Industrial Production.)  Then, at the close, Sept. TIC Net Long-Term Transactions fell by $1.7 billion (massively below the forecast of +$89.4 billion and the Aug. value of +$62.2 billion).  Finally, after the close, the Fed Balance Sheet continued to fall with a current value of $7.815 trillion (down $46 billion from the prior week’s $7.861 trillion).

In stock news, RWT announced Thursday that it had signed a long-term contract from TM to supply the Japanese carmaker’s new NC plant with EV battery materials.  RWT expects to provide enough battery materials to supply 1 million EVs per year with a long-term goal of multiplying that by five (5 million vehicles per year). At the same time, Reuters reported that LLY had agreed to invest $2.19 billion to build a German plant to produce products, addressing a supply chain weakness identified by the COVID pandemic.  Later, after a long and harrowing vote, UAW members ratified the union’s deal with GM.  Attention shifts to F, whose vote ends Friday, and then STLA where the vote ends on Tuesday.  Speaking of GM, the company suspended its Cruise robo-taxi unit employee equity program.  Elsewhere, NTRS announced that it has been chosen to manage COST’s $29 billion retirement plan.  At the same time, TW announced it had acquired algo trading firm r8fin for an undisclosed amount in a deal that will close in 2024.  Later, AMZN announced it would sell HYMTF (Hyundai) cars online starting in 2024.  At the same time, employees at hundreds of SBUX stores walked off their jobs during a store promotional event Thursday, demanding improved staffing and better schedules.  Later, FUJHY (Subaru) is the latest carmaker to raise the wages of its employees and improve healthcare and other benefits following the UAW deals with the big 3 automakers.  After the close, Bloomberg reported that after already delaying its attempt to replace QCOM modem chips with “internally designed” (read “stolen and reverse engineered”) for a year, AAPL now appears likely to miss its latest revised goal of Q2 2025 for the project.  At this point, Bloomberg reported late Q4 2025 looks more likely.  In addition, in a reversal of company tradition going back to its inception, AAPL has again agreed to use industry standards.  This time, it will adopt the industry standard messaging protocol after stubbornly refusing for years.  This will make AAPL to Android messaging much easier and smoother.

In stock government, legal, and regulatory news, FMC was hit with a class-action lawsuit on behalf of investors.  The suit alleges the company failed to disclose critical information about legal defeats and weakening patent protections.  Across the pond, CRSP and VRTX have both achieved milestones in the UK, gaining conditional approval for their gene-edited treatment for sickle cell anemia. At the same time, the Portuguese sister subsidiary of ATUS announced it has found violations during its internal probe after a summer corruption scandal.  Later, the Wall Street Journal reported that regulators are pushing WFC to improve its internal monitoring to detect financial crime at the banks as the company faces a lawsuit alleging it allowed a Las Vegas attorney to operate a Ponzi scheme.  Elsewhere, perhaps in response to political pressure (or perhaps in response to sexual misconduct charges against the FDIC Chair), the FDIC unexpectedly and abruptly canceled a planned meeting on Thursday where the topic was to be a special bank fee on large banks to cover the costs of the March bank failures.  (The cancellation came 15 minutes after the start of the meeting.)  At the deadline, AMZN and TikTok both said they would appeal the EU designation as “gatekeeper” platforms.  (MSFT, AAPL, and GOOGL did not challenge the designation, which brings additional regulatory compliance requirements.)  Later, MS agreed to pay a settlement of $6.5 million to a group of states over negligence that led to a data breach covering millions of customers.  After the close, Reuters reported that according to three sources, AMAT is under US criminal investigation for evading export restrictions on shipments to China via South Korea.  At the same time, bankrupt RAD filed suit against the US Dept. of Justice in the hope of ending a lawsuit against the company for its responsibility in opioid abuse.  Meanwhile, the US ended the evidence phase of its antitrust lawsuit against GOOGL.  At the same time, a US judge rejected bids to dismiss several hundred cases, saying that Kia and HYMTF must face suits claiming they are responsible for auto thefts due to negligence and refusal to change software widely seen as easy to hack (YouTube how-to videos describe it in-depth.)

After the close, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, POST, ROST, and WWD all reported beats on both the revenue and earnings lines.  Meanwhile, MATW, UGI, and ZTO all missed on revenue while beating on earnings.  It is worth noting that GPS and UGI lowered their forward guidance.

Overnight, Asian markets were mixed again but leaned toward the down side.  Hong Kong (-2.12%) was by far (by 1.50%) the biggest loser while Japan (+0.48%) led the five (of 12) gaining exchanges.  In Europe, things are much more bullish as only Russia (-0.21%) is in the red at midday.  The CAC (+0.79%), DAX (+0.78%), and FTSE (+0.82%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed start to the day.  The DIA implies a +0.23% open, the SPY is implying a +0.17% open, but the QQQ implies a -0.06% open at this hour.  At the same time, 10-year bond yields are down again to 4.408% and Oil (WTI) is up 1.37% to $73.88 per barrel in early trading.

The major economic news scheduled for Friday includes Oct. Building Permits and Oct. Housing Starts (both at 8:30 a.m.).  Friday is also options expiration day in the market.  The major earnings reports scheduled for before the open include ATKR, BJ, and SPB.  There are no major earnings reports scheduled for after the close. 

In geopolitical news, China and the US continued to “make nice” on Thursday.  Both sides expressed that there does not need to be conflict with China saying it is not trying to supplant the US as the world’s leading economic power.  Both also said that the two can be both cooperative and competitive.  However, the relations are and will remain an “uneasy coopetition” as President Biden said he stood by previous comments that Xi is a dictator and China stood by claims the US is the aggressor in the relationship.  Meanwhile, in the Middle East, the Israeli offensive in Gaza continues.  On Thursday, the IDF invaded the largest hospital in Gaza, claiming to have found weapons caches and the entrance to a “Hamas tunnel.”  It was reported overnight that the release of 50 more hostages held by Hamas (a deal brokered by Qatar) is being held up.  The point causing the delay is that Israel only wants to provide enough of a cease-fire for the 50 civilians to be transferred out of Gaza, while Hamas wants a 3-day truce in return for that exchange.  In related news, Ukraine is suffering from a severe reduction in the amount of ammunition being supplied to it.  Ukraine’s Western supporters have fallen victim to political theatre in their own countries (meaning politicians feeling the need to express support for Israel by making Israeli military aid the priority).  While the IDF will gladly accept all this largess, the truth is they had more than enough weapons and ammunition to wipe Gaza off the map in their stockpile prior to the Hamas atrocity back in October.  So, Russia is the beneficiary of the Western response to the Hamas terror attack.

In encouraging miscellaneous news, Freddie Mac reported that the average 30-year fixed-rate mortgage loan rate fell to a two-month low this week at 7.44%.  The agency noted a decrease in inflation leading to the decline.  (The 15-year fixed-rate mortgage also fell to 6.76%, down from 6.81% the prior week.)  Elsewhere, the American Farm Bureau reported that the cost to prepare Thanksgiving dinner will be 4.5% LOWER this year than in 2022.  The group’s survey found that seven of the 11 ingredients of their “standard Thanksgiving meal” are lower priced than they were in 2022, including a 5.6% decrease in Turkey prices. Overall, it is looking like the naysayers of Fed actions were wrong, both prices and inflation are falling, and a soft landing may well still be in the cards at this point.

So far this morning, SPB reported a beat on both the revenue and earnings lines.  At the same time, BJ missed on revenue while beating on earnings.  Unfortunately, ATKR missed on both the top and bottom lines.  It is worth noting that SPB has lowered its forward guidance.

With that background, it looks like all three major index ETFs are looking to make a small gap higher to start off Friday. All three are trading higher at this point with SPY and QQQ printing white-bodied candles during the early session while DIA gapped more but is printing a black premarket candle. All three candles are small at this point, indicating not a lot of conviction. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. The downtrend going back to summer has also been well-broken in all three charts. So, the Bulls are in control of both the short-term and 4-5-month trend. This is all on the strength of a dramatic rally over two weeks. In terms of extension, all three major index ETFs remain a bit stretched above their T-line (8ema). At the same time, the T2122 indicator has now dropped back into its mid-range. So, we may still have room to run in either direction, but more of a pause of pullback would definitely be healthy for the rally. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon. Finally, remember this is Friday, payday, and time to prepare your account for the weekend news cycle. On top of that, this is an Options Expiration Friday, so don’t be surprised by some volatility.

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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The market gapped higher and then was divergently indecisive on Wednesday.  The SPY opened 0.28% higher, the DIA gapped up 0.24%, and the QQQ opened 0.52% higher.  At that point, the QQQ wandered around below and returned to its opening level.  Meanwhile, SPY meandered back and forth around its opening level and DIA meandered above its open.  All that changed at about 11:30 a.m. when DIA began a slow, steady rally that lasted the rest of the day.  At the same time, QQQ sold off until 1:20 p.m. (recrossing its gap and prior close in the process) before rallying back into the gap and bobbing along the prior close the rest of the day.  And for its part, SPY traded sideways, briefly retested the opening gap, and returned to a sideways grind along the open before dropping back into the gap the last 20 minutes.  This action gave us a gap-up, black-bodied. Spinning Top in the SPY, a gap-up, black-bodied large-body Spinning Top in the QQQ, and a gap-up, white-bodied Spinning Top in the DIA.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (0.89%) out front leading the way higher while Energy (-0.42%) lagged well behind the other sectors.  At the same time, the SPY gained 0.16%, DIA gained 0.49%, and QQQ gained 0.08%.  The VXX fell more than 2% to close at 19.15 and T2122 backed off just a bit but remains deep in overbought territory at 96.43.  10-year bond yields climbed to 4.543% and Oil (WTI) dropped 2.2% to close at $76.53 per barrel. So, Wednesday was another in the two-week string of bullish says.  This one is more indecisive than most as we get extended from the T-line (8ema).  This was the least we could expect after such a strong bullish showing on Tuesday.  It is also worth noting that all three major index ETFs had lower-than-average volume, with SPY having significantly lower volume.

The major economic news reported Wednesday included Oct. Month-on-Month Core PPI, which came in much better than expected at 0.0% (versus a forecast of +0.3% and a Sept. reading of +0.2%).  At the same time, the headline Oct. Month-on-Month PPI was dramatically lower than expected at -0.5% (compared to a forecast of +0.1% and a September value of +0.4%).  In addition, Oct. Month-on-Month Core Retail Sales came in stronger than predicted at +0.1% (versus the -0.2% forecast but still well below the Sept. +0.8%). The headline Oct. Month-on-Month Retail Sales fell 0.1% (compared to a forecasted fall of 0.3% and down a full percent from September’s +0.9%).  At the same time, the NY Empire State Mfg. Index was much stronger than anticipated at 9.10 (versus a -2.80 forecast and a -4.60 September value).   Later, September Business Inventories held steady at 0.4% (the same as the forecast and prior reading).  However, September Retail Inventories were a bit higher than expected at +0.4% (versus the +0.3% forecast but still better than the August +0.5% value).  Later, the EIA Weekly Crude Oil Inventories showed a larger-than-predicted inventory build of 3.600 million barrels (compared to a forecast of +1.793 million barrels but still far lower than the prior week’s +13.869 million barrels).

In stock news, MFC said Wednesday it will buy London-based alternative credit manager CQS for an unspecified amount.  (CQS had $13.5 billion in assets under management as of Oct. 31.)  At the same time, regulatory filings showed that BRKB has liquidated its entire GM (22 million shares) and ATVI positions.  BRKB also began a SIRI position by purchasing 10 million shares.  All this was during Q3.  Elsewhere, TM announced that its Camry (best-selling car in the US) will go all-hybrid in the 2025 model year.  Later, MSFT announced it is releasing its own AI chips (MSFT designed but made by other companies).  The new chip (Maia) will be used to power MSFT’s subscription for $30/mo. “Copilot” AI service.  MSFT said the chip will become available in 2024.  At the same time, CZNS (the 28th largest mortgage lender in the US) announced the closure of its wholesale mortgage lending channel.  CZNS cited declining mortgage volumes and intense competition in the announcement.  Later, SNES announced a reverse stock split, effective at the close on Nov. 16.  The board has not yet decided on the specifics but it will be between 1-for-2 and 1-for-12 shares. 

In stock government, legal, and regulatory news, NATO announced Wednesday that it will replace its aging fleet of 14 AWACS planes with a military version of the BA 737.  The deal of an unspecified value (billions) will be signed in 2024.  Later, AWKFN was given UK approval for a second phase of clinical trial on its severe alcohol Use Disorder treatment.  Later, a bipartisan group of US Senators asked META for documentation related to senior executives’ knowledge of mental and physical health harm associated with its platform before Nov. 30.  Meanwhile, NY state sued PEP, accusing the company of polluting the environment through its single-use plastic wrappers and containers.  At the same time, the FDA (which declined to approve the drug in January of 2022) noted concerns about the data MRK provided on its chronic cough drug.  The FDA said the data might not be enough to prove meaningful benefit.  Overseas, the French Supreme Court upheld serious charges but revised the previous $2 billion penalties against UBS for money laundering and illegal customer solicitation.  The move mandates a new trial at the Paris Court of Appeals to determine the correct damages.  In Greece, both JNJ and CL were fined for violating that country’s profit-cap law prior to the end of 2021 (COVID period).  This follows the same type of fines levied on UL on Nov. 2.  After the close, Reuters reported that ADBE will open remedy discussions with the EU in order to get its acquisition of Figma approved.

After the close, CSCO, CPA, JJSF, PANW, SNEX, and TTEK all reported beats on both the revenue and earnings lines.  However, MMS missed on both the top and bottom lines.  It is worth noting that CSCO lowered and PANW raised forward guidance.

Overnight, Asian markets were mixed but leaned toward the red side on the strength of moves.  Hong Kong (-1.36%), Shenzhen (-1.23%), and Shanghai (-0.71%) led the region lower while India (+0.46% paced the gainers.  In Europe, only two of the 15 bourses are in the green at midday.  The CAC (-0.46%), DAX (+0.31%), and FTSE (-0.49%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a lower start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.19% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields are down to 4.504% and Oil (WTI) is off another percent to $75.86 per barrel in early trading.

The major economic news scheduled for Thursday includes the Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 a.m.), Oct. Industrial Production (9:15 a.m.), and the Fed’s Balance Sheet (4:30 p.m.).  We also hear from Fed member Williams (9:25 a.m.), Fed Governor Kroszner (10 a.m.), Waller (10:30 a.m.), and Mester (noon).  The major earnings reports scheduled before the open include BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, and WSM.  Then, after the close, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO report. 

In economic news later this week, on Friday we get Oct. Building Permits and Oct. Housing Starts.  Friday is also options expiration day.

In terms of earnings reports later this week, on Friday we hear from ATKR, BJ, and SPB.

In miscellaneous news, Chinese President Xi Jinping met with President Biden on Wednesday.  The meeting was mostly symbolic although the two countries agreed to high-level military-to-military contacts.  (However, the top Chinese military posts, Minister of Defense and Head of the Chinese Army are both vacant at the moment.)  China also agreed to take action to curb fentanyl chemical export in exchange for sanctions relief on a Chinese state security agency.  Later, Xi was schmoozed at dinner by the CEOs of BLK, BX, MSFT, C, V, XOM, TSLA, PFE, QCOM, AVGO, and others hoping to curry favor at a $40,000/plate dinner.  Elsewhere, the Senate was scheduled to vote on the stop-gap CR to avert a government shutdown Wednesday night.  Leaders of both parties support the House bill. However, a single Senator could cause a shutdown by requiring procedural moves that would prevent a vote before Saturday. (In late-breaking news, the Senate did overwhelmingly approve the bill and has now sent it to President Bibden’s desk for signature to avert the government shutdown until at least January.)

In UAW news, oh what a difference a day makes. Just a day after it seemed on the brink of failure, the union’s contract with GM is now on the verge of approval.  More than 60% of GM’s huge Arlington TX plant approved the contract.  This increased the approval margin to 54% vs 46% opposed, giving approval a 2,500 vote lead with only nine facilities left to vote.  (GM voting ends Thursday at 4 p.m. Eastern, but the majority of votes have already been cast.)   Approval of the F contract is ahead with 66% in favor of approval (the F vote ends Friday, but again, most votes have already been cast) and STLA approval is essentially a lock with 72% voting in favor with that vote scheduled to end next Tuesday.

So far this morning, BABA, ARCO, BBWI, M, NICE, WMT, and WMG have all reported beats on both the revenue and earnings lines.  Meanwhile, BERY, DDL, DOLE, and NTES all missed on revenue while beating on earnings.  On the other side, PLCE, ONEW, and SIEGY all beat on revenue while missing on earnings.  Unfortunately, BV missed on both the top and bottom lines.  It is worth noting that BBWI and BERY both lowered their forward guidance.  However, M and NICE both raised their guidance.  

With that background, all three major index ETFs are trading lower in the premarket session and have printed black-bodied candles that are now at or near the early session lows. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend, and the bullish breakout of consolidation is still in play. All three also remain significantly above the downtrend line going back to summer. In other words, the longer-term downtrend remains broken. So, the Bulls are back in control of the longer-term trend on the strength of a hard rally of the last two weeks. In terms of extension, all three major index ETFs are still stretched far above their T-line (8ema). At the same time, the T2122 indicator is at the top end of its overbought territory. So, we are definitely still in need of at least a rest, if not a pullback soon. With that said, remember 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.

🎯 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

Tuesday saw the Bulls run after a better-than-expected CPI report. SPY gapped 1.37% higher, DIA opened 1.16% higher, and QQQ gapped up 1.72%.  All three major index ETFs followed through for the first hour or two.  At that point, all three began to slowly take profits, melting back toward the opening levels until 2 p.m.  Then we saw a strong and steady rally that took all three to the highs of the day at about 3:20 p.m. in the SPY, DIA, and QQQ.  From there, we saw more profit-taking the rest of the day.  This action gave us huge gap-up, white-bodied candles in all three major index ETFs.  The DIA printed a Spinning Top, the QQQ gave us sort of a large-body Spinning Top, and the SPY printed a large-body white candle with an upper wick.  (QQQ also gave us the highest close since mid-July.)  This all happened on average volume in all three major index ETFs.

On the day, all 10 sectors were in the green with Utilities (+4.19%) out in front leading the way higher while Energy (+1.20%) lagged behind the other sectors.  At the same time, the SPY gained 1.94%, DIA gained 1.41%, and QQQ gained 2.15%.  (It’s worth noting that IWM was up a massive 5.45%.)  The VXX fell 0.76% (not as much as many would have thought) to close at 19.56 and T2122 shot up to the top of its overbought territory at 97.11.  10-year bond yields climbed dropped hard to 4.451% and Oil (WTI) was flat at +0.08% to close at $78.34 per barrel.  So, Tuesday wasn’t even a fight.  The major index ETFs gapped strongly higher, followed through (never testing the gap), and even after a little profit-taking put in the strongest day since April.   

The major economic news reported Tuesday included October Core CPI, which came in lower than expected at +0.2% month-on-month (compared to a forecast and Sept. values of +0.3%).  On a year-on-year basis, October Core CPI was also lower than was anticipated at +4.0% (versus a forecast and September reading of +4.1%).  At the same time, the headline year-on-year October CPI came in below predictions at +3.2% (compared to a forecast of +3.3% and much better than the Sept. value of +3.7%).  On a month-to-month basis, the October CPI was dead flat at 0.0% (versus the forecast of +0.1% and much better than September’s +0.4% reading).  On top of all of this, note that the Bureau of Labor Statistics changed the way it estimates the cost of healthcare.  So, these readings are about 0.1% higher than they would have been if they were calculated using last month’s method.  In other words, inflation fell more than the decrease indicated above. Finally, after the close, the API Weekly Crude Oil Stocks report came in at +1.355 million barrels (compared to a forecasted build of 1.400 million barrels but far lower than the prior week’s +11.900 million barrels).

In Fed Speak news, early Tuesday, FOMC Vice-Chair Jefferson (a hawk) told a European conference that “monetary policymakers may need to take more forceful action to keep inflation expectations anchored.”  (However, he was speaking to European central bankers and did not specify that his remarks were related to the US.)  At the same conference, St. Louis Fed President Bullard (an ultra-hawk) warned that despite a period of “nice disinflation” the battle against inflation is not yet won.  He pointed out that in the US, the PCE Inflation number has only fallen to 3.7%, which is still well above the Fed’s 2% target number.  (To be clear, both presentations were made hours before the CPI data was released.  However, both may well have had the numbers prior to release.)

In stock news, RENB and GEDiCube Intl. have agreed to a merger and will now be called Renovaro.AI.  (This is the first merger of an AI company with a biotech firm.) At the same time, BXD announced it had agreed to sell its 45% interest in two MA properties for $1.66 billion.  (The properties are in a biotech hotspot populated by MRNA among others and one of the properties has been pre-leased by AZN although still under construction.)  Later, PFE announced it will cut 500 jobs in the UK as part of a $3.5 billion cost-cutting plan.  At the same time, JAZZ struck a deal with a spinoff from GSK (Autifony Therapeutics).  Under the deal, JAZZ will pay up to $770.5 million if Autifony develops two drugs according to schedule.  JAZZ would then take over the clinical testing, manufacturing, regulatory approvals, and commercialization of the drugs.  Elsewhere, RIVN revealed Tuesday that it will borrow $15 billion under a kind of “phantom bond” issued by its joint-development partner in order to pay for the construction of its GA production plant.  Later, ABNB announced plans to acquire GamePlanner.AI (and AI startup) for an undisclosed sum.  At the same time, Reuters reports that five sources tell it GS is strongly considering paying higher bonuses to top traders and dealmakers in order to prevent poaching by competitors.

In stock government, legal, and regulatory news, CTLT reported to the SEC that it is delaying its quarterly report due to taking an “impairment charge” of around $700 million related to acquisitions by its consumer health business.  (CTLT delayed its annual results several times earlier in the year, blaming production problems.)  The company told the SEC it would report on Wednesday instead of Tuesday.  Later, a NY judge narrowed the scope of WBD’s lawsuit against PARA over the streaming rights to the adult cartoon “South Park.”  At the same time, Reuters reported that ADBE will be given an EU antitrust warning in the next few days (related to its $20 bid to buy cloud-based platform Figma).  The move is reportedly intended to pressure ADBE to offer divestment remedies to appease European competitors.  Elsewhere, in a move that is contrary to what GOP-run states are doing, the ECB issued a stern warning to banks that operate in the Eurozone.  The warning, issued by the central bank’s vice-chair, told of significant penalties if the banks do not improve their Climate and Environment risk management.  At the same time, the US Dept. of Justice asked a judge to dismiss its suit brought against affiliates of UNH which had alleged the firms violated antitrust law by prohibiting employees from moving from one company to another.  In a side note to a case, investment bank BCS (Barclays) has begun telling clients it believes GOOGL will lose its antitrust case brought by the US Dept. of Justice related to their browser market practices, which the US alleges breach antitrust law.  Later, ACHR was hit with an investor lawsuit claiming the company misrepresented its electric VTOL aircraft.  In the same vein, investors filed suit against BCLI alleging the biotech company issued misleading statements about the prospects for its ALS drug.  Later, a US district judge in CA ruled against GOOGL, META, SNAP, and TikTok attempts to have a lawsuit dismissed.  The judge ruled the suit, which alleges the companies illegally enticed and addicted millions of teens to their platform causing the users mental health damage, can proceed.  (This ruling covers hundreds of suits that are likely to become a large single class action suit at some point.)  After the close, the FDA warned AMZN about the sale of seven unapproved eyedrops on the company’s platform, citing both unproven claims (false advertising) and health risks in the letter.  Also after the close, CHTR agreed to pay the SEC $25 million related to unauthorized stock buybacks between 2017 and 2021.

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

Overnight, Asian markets were green across the board (following Tuesday’s US rally).  Hong Kong (+3.92%), Japan (+2.52%), and South Korea (+2.20%) led that region higher but large gains were widespread with China being the laggard.  Meanwhile, in Europe, the bourses lean toward the green side but four of the 15 are still in the red at midday.  The CAC (+0.60%), DAX (+0.73%), and FTSE (+0.97%) lead the continent higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward another green start to the day.  The DIA implies a +0.24% open, the SPY is implying a +0.31% open, and the QQQ implies a +0.50% open at this hour.  At the same time, 10-year bond yields are back up a bit to 4.473% and Oil (WTI) is down 0.45% to $77.91 per barrel.

The major economic news scheduled for Wednesday includes Oct. Core PPI, Oct. PPI, and Oct. Retail Sales (all at 8:30 a.m.), Sept. Business Inventories and Sept. Retail Inventories (10 a.m.), and Weekly EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled before the open include AAP, CTLT, FI, GFF, JD, TGT, TCEHY, TJX, XPEV, and ZIM.  Then, after the close, SQM, CPA, MMS, PANW, and TTEK report. 

In economic news later this week, on Thursday, Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Oct. Industrial Production, and the Fed’s Balance Sheet are reported.  Finally, on Friday we get Oct. Building Permits and Oct. Housing Starts.  Friday is also options expiration day.

In terms of earnings reports later this week, on Thursday, we hear from BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, WSM, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO. Finally, on Friday we hear from ATKR, BJ, and SPB.

In government news, the US Postal Service reported a $6.5 billion net loss for the year ending September 30.  USPS revenue was down 0.4% as first-class mail volume fell to the lowest level since 1968.  Meanwhile, the US Dept. of Energy announced it plans to buy 1.2 million barrels of oil at an average price of $77.57/barrel to help replenish the Strategic Petroleum Reserve.  However, the bid government news is that the House passed Speaker Johnson’s phased “2 cliff” approach in a bipartisan 336-95 vote (with 209 of those votes coming from Democrats).  93 Republicans voted against the stop-gap bill.  (In October, the Speaker’s predecessor was ousted for working with the other side of the aisle.  However, the embarrassing three-week show of ineptitude following McCarthy’s ouster has given Johnson more leeway as the GOP is hesitant to go back through that Speaker selection process again.)  Johnson’s bill approach calls for no up-front cuts, extending current funding levels for military construction, veteran benefits, HUD, Agriculture, FDA, and Environmental programs until January 19. All other federal operations, including Defense, would have their current levels of funding expire on February 2.  President Biden announced that he would sign the bill if it is approved by the Senate.  That signal undoubtedly means Senate Democrats will likely pass the bill. Finally, it is worth noting that President Biden will meet with Chinese President Xi on the sidelines of an Asia-Pacific Economic Conference in San Francisco today. There are no planned outcomes from the meeting as both sides have downplayed expectations. However, anything is possible when the leaders of the two largest economies meet.

In miscellaneous news, while the overall vote count is still in favor of approving the deal, another plant (this one a GM facility in TN) narrowly voted against ratifying the UAW-Big3 tentative agreement.  Overall, approval is leading with 82% support at STLA, 65% support at F, but only 52% at GM (with just over 30% of total GM votes now cast).  Elsewhere, a study published by Boston Consulting covering 554 public companies across 20 sectors found that firms that allow remote work have had four times as much revenue growth as their counterparts with more stringent “work from the office” policies.  Finally, Bloomberg reports that Beijing is planning to offer at least $137 billion of low-cost financing for village renovation and affordable housing programs.  The idea appears to be both to stabilize the real estate sector and stimulate China’s economy through housing-sector construction projects.

So far this morning, TGT, TJX, and XPEV all reported beats on both the revenue and earnings lines.  TGT is particular is noteworthy with a massive earnings beat on only slightly increased sales.  (TGT comparable store sales declined for the second straight quarter.)  Meanwhile, AAP and CTLT beat on revenue while missing on earnings.  On the other side, JD missed on revenue while beating on earnings.  Unfortunately, ZIM missed on both the top and bottom lines.

With that background, all three major index ETFs gapped up to start the premarket session and have printed white-bodied candles that are now at or near the early session highs. The SPY, DIA, and QQQ all remain above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend and the bullish breakout of consolidation is still in play. All three have also significantly reduced (or erased) the distance to their summer highs. So, the Bulls are back in control of the longer-term trend on the strength of a hard rally the last two weeks. In terms of extension, all three major index ETFs are now stretched far above their T-line (8ema). At the same time, the T2122 indicator is in the top of its overbought territory. So, we are definitely in need of at least a rest, if not a pullback soon. With that said, remember 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.

🎯 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