On Friday, markets opened higher to start the day.  The SPY gapped up 0.28%, DIA gapped up 0.34%, and QQQ gapped up 0.20%.  All three major index ETFs then took 30 minutes to figure out their direction.  At that point, the Bears stepped in as all three sold off until shortly after 1:30 p.m.  From there, the SPY, DIA, and QQQ all bobbed their way sideways the rest of the day.  This action gave us black-bodied candles in all three. The DIA printed a Spinning Top that retested and closed above its T-line (8ema) while also retesting and failing to break up through its 200sma.  Meanwhile, the SPY and QQQ both printed larger-body black candles with wicks at both ends.  Both closed back below their T-line (8ema) and the QQQ also retested and crossed below its 50sma.  This happened on average volume in the SPY and QQQ as well as well-above-average volume in the DIA.

On the day, six of the 10 sectors were in the red with Technology (-1.73%) far out in front leading the way lower.  Meanwhile, Energy (+1.83%) and Healthcare (+1.50%) were way out front on the bullish side.  At the same time, the SPY lost 0.50%, the QQQ lost 1.26% and DIA gained 0.12%.  VXX popped more than 12% to close at 25.32 and T2122 jumped back up out of the oversold territory (barely) into the very low end of its mid-range at 21.99.  10-year bond yields dropped again, falling to 4.617% while Oil (WTI) spiked sharply again (on the apparent Israeli ground invasion of Gaza) to close at $87.72 per barrel.  So, it was a bearish day on Friday, but not a decisive one.  Markets may be headed South again but it is not a sure bet.

The economic news reported Friday included the September Export Price Index came above expected at +0.7% (compared to a forecast of +0.5% but much better than August’s +1.1%.  At the same time, the September Import Price Index came in well below anticipated at +0.1% (versus a forecast of +0.5% and far better than August’s +0.6%).  Later, Michigan Consumer Sentiment came in well below predicted at 63.0 (compared to a forecast of 67.2 and well down from the prior reading of 68.1).  At the same time, Michigan Consumer Expectations also were reported lower than anticipated at 60.7 (versus a forecast calling for 65.5 and a prior reading of 66.0).  The Michigan 1-year Inflation Expectations made a huge jump coming in at 3.8% (compared to a forecast and prior value of 3.2%).  However, the Michigan 5-year Inflation Expectations rose more slightly to 3.0% (up from a forecast and prior reading of 2.8%). 

In Fed Speak news, Philly Fed President Harker told a virtual Delaware Chamber of Commerce group that he thinks rate hikes are done for this cycle. Harker said, “Absent a stark turn in what I see in the data and hear from contacts … I believe that we are at the point where we can hold rates where they are.”  When asked for details, Harker said that by doing nothing (on rates), the Fed is really doing quite a lot (by continuing to shrink its balance sheet).  He said that he sees “steady disinflation” which he believes will take inflation below 3% this year and back to the Fed’s 2% target in 2024.  On the other side, St. Louis Fed President Bullard (perma-Hawk) told an IMF seminar to watch out for “underappreciated inflation risks.”  He also hinted that he would like to see the Fed Funds Rate immediately hiked 1.25% (to 6.5%) if inflation spikes again.

In Autoworker contract talks and strike news, the UAW did not expand its strike against the Big 3 automakers on Friday. However, the strike anti had already been significantly upped earlier when F’s largest and most profitable plant was struck.  (The companies laid off about 1,000 employees in response, blaming the move on disruptions caused by the strike.)  However, UAW President Fain did say Friday morning that the union is shifting its strike strategy.  From here forward, the union may call for walkouts at any time and without notice.  Later, STLA laid off another 700 workers.  Then, after the close Friday, F announced it was cutting one of three shifts at its MI F-150 EV plant, resulting in 700 layoffs as well.  After the close Friday, Bloomberg reported that the 10 individuals who have been CEOs of GM, F, and STLA had earned more than a cumulative $1 billion in compensation since 2010.  Over that same period, autoworker (union and non-union) pay has declined 17%.  Then on Sunday, Canadian Unifor autoworkers ratified the GM contract agreed after a 12-hour strike last week.

In stock news, QCOM announced layoffs of approximately 2.5% of its workforce on Friday.  The 1,258 job cuts will take effect on December 13.  Later, BA and SPR stocks both slumped Friday when the companies announced they are expanding their plane inspections into production defects on the 737 Max 8 jet.  After the close, PFE slashed its 2023 full-year revenue forecast by 13% and announced it was introducing a $3.5 billion cost-cutting program.  (The reduction was attributed to lower-than-predicted sales of its COVID-19 vaccine.)  At the same time, BLK announced that its investors pulled $13 billion out of long-term investment funds in favor of cash.  Bloomberg reported that analysts had expected $50 billion in inflows and that this was the first reduction from these funds since the beginning of the Covid pandemic in 2020.

In stock government, legal, and regulatory news, in case you missed it, on Thursday, the US ratcheted up the pressure on Russia by imposing sanctions on the owners of oil tankers that carry crude that is sold for more than the $60 sanction cap price.  That new level of sanction hit XOM on Friday as a ship they chartered was fined by the US Treasury.  At the same time, MSFT said it closed its $69 billion acquisition of ATVI early Friday after getting the approval of the UK’s Competition and Markets Authority.  Despite this news, the FTC said it was pressing ahead with its lawsuit to block the deal.  Later, TSLA asked a Delaware judge to cut the fees requested by the attorneys that defeated TSLA (after a 3-year legal battle) and won a shareholder case which then forced TSLA Board members to return $919 million they had paid themselves.  The attorneys say they intend to sue TSLA over the refusal to pay while the company calls the fees outrageous at over $10k per hour.  Later, the NY State Public Utilities Commission denied Canadian-listed Windfarm ORSTED the ability to raise electricity prices.  This may impact BP and EQNR which are in the same field but are US-listed.  In mid-afternoon, the FDA ordered BTI (RJ Reynolds) to cease the sale of menthol vaping e-cigarettes.  BTI is expected to file a court challenge to the order, even though it complied with previous bans on “berry flavored” vape products. After the close, the SEC said it would not appeal a court decision saying it was wrong to deny Grayscale Investment’s application to create an ETF for the spot price of bitcoin.

Overnight, Asian markets were red across the board as China held short and medium-term rates steady and injected just under $15 billion in liquidity (less than the market wanted).  Japan (-2.03%), Thailand (-1.63%), and Shenzhen (-1.42%) led the region lower.  However, in Europe, we see a much brighter outlook with all but three of the 15 bourses in the green at midday.  The CAC (+0.15%), DAX (+0.04%), and FTSE (+0.39%) lead the region higher on admittedly modest moves in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.43% open, the SPY is implying a +0.29% open, and the QQQ implies a +0.07% open at this hour. 10-year bond yields have spiked back up to 4.702% and Oil (WTI) is just on the reed side of flat at $87.64 per barrel in early trading.

The major economic news scheduled for Monday is limited to NY Fed Empire State Mfg. Index (8:30 a.m.) and US Federal Budget Balance (2 p.m.).  However, Fed member Harker speaks twice (10:30 a.m. and 4:40 p.m.).  The major earnings reports scheduled for before the open Monday are limited to SCHW (8:45 a.m.).  There are no major earnings reports scheduled for after the close.

In economic news later this week, on Tuesday we get September Retail Sales, Sept. Industrial Production, August Business Inventories, August Retail Inventories, TIC Net Long-Term Transactions, and API Weekly Crude Oil Stocks Report.  We also get two Fed speakers (Williams at 8 a.m. and Bowman at 9:20 a.m.).  Then Wednesday, Sept. Building Permits, Sept. Housing Starts, EIA Weekly Crude Oil Inventories, and the Fed Beige Book are reported.  We also hear from Fed members Waller (noon), Williams (12:30 p.m.), Bowman (1 p.m.) and Harker (3:15 p.m.).  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Sept. Existing Home Sales, and the Fed Balance Sheet.  We also hear from Fed Chair Powell (noon), Bostic (4 p.m.), and member Harker 5:30 p.m.).  Finally, on Friday, there is no scheduled news.  However, again we hear from Fed member Harker (9 a.m.) and Mester (12:15 p.m.).

In terms of earnings reports later this week, on Tuesday, ACI, BAC, BK, ERIC, GS, JNJ, LMT, PLD, IBKR, JBHT, OMC, UAL, and WTFC.  Then Wednesday, ABT, ALLY, ASML, CFG, ELV, FHN, MTB, MS, NDAQ, NTRS, PG, STT, TRV, USB, WGO, AA, COLB, CCI, DFS, EFX, KMI, LRCX, LVS, LBRT, NFLX, PPG, SAP, STLD, TSLA, and ZION report.  On Thursday, ALK, AAL, T, BX, EWBC, FITB, FCX, GPC, KEY, MAN, MMC, NOK, PM, POOL, SNA, SNV, TSM, TFC, UNP, WSO, WBS, CSX, ISRG, KNX, and WAL.  Finally, on Friday, AXP, ALV, CMA, EEFT, HBAN, IPG, RF, and SLB report.

In US Congressional news, the dysfunctional GOP House members voted to nominate right-wing Rep. Jordan as House speaker, 124-81 (16 either not present or abstaining) over last-minute candidate Rep. Scott.  However, a second vote asked, “Would vote for Jordan in the full house as a fellow Republican?” On that measure, Jordan got 152 votes but 55 still voted “no, they won’t support Jordan.”  Obviously, that means the extremist candidate will find it hard to get to the 217 votes needed (given 2 vacant seats in the House) since their caucus only had 221 members to start.  So, as the House GOP broke for the weekend, they were no closer to a viable Speaker candidate that could actually be confirmed than they had been when they ousted McCarthy two weeks prior.  On Sunday, it was announced that the House will vote on Jim Jordan’s House Speaker nomination at noon Tuesday.  However, at the same time (midday Sunday), CNN reported a top Republican told it there are still 40 “hard no” votes against Jordan on the GOP side.  As a reminder, there are 32 calendar days left (Nov. 17 is the last day) as of today until the existing CR ends and we get a government shutdown.  Meanwhile, Ukraine has urgent military needs now and Israel (which has no real military need) has US political reasons that it will require House support action even before Nov. 17. (National Security Advisor Sullivan said Sunday that President Biden will push for an aid package for Ukraine and Israel of “significantly more than $2 billion” this week.

In miscellaneous news, on Friday, the SEC adopted new rules requiring transparency on short-selling.  These rules require institutional investors to report short positions and brokers who lend shares for short sales to report then activity to FINRA.  (S3 Partners analysts report that US market institutional short interest is about $927 billion at the moment.)  Elsewhere, RAD filed for bankruptcy late Sunday night in the face of opioid lawsuits and weakening sales.  Finally, AMC reports that the Taylor Swift concert movie raked in $96 million in US sales and $32 million abroad.  This makes the Era Tour the highest-grossing concert movie in history…much to AMC’s delight.

With that background, it looks like the Bulls are very modestly leading the way in the premarket. The two large-cap index ETFs are up above their T-line while the QQQ is retesting that 8ema level from below. All three are now printing white-bodied candles and are at their highs of the early session. DIA is also retesting its 200sma from below again. With heavier news coming later in the week, including earnings, don’t be caught off guard if today is a drifting day in the market. However, there is potential for new in the House Speaker debacle or from the geopolitical front. In terms of extension, none of the three major index ETFs are too far from their T-line (8ema). The T2122 indicator is back at the bottom of its mid-range (but is not oversold yet). So, again we have room to run in either direction.

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 were essentially dead money the first half of the day Thursday.  The SPY gapped up 0.16%, DIA gapped up 0.22%, and QQQ gapped up 0.15%.  After that the markets traded sideways until just before 1 p.m.  Then we saw a sharp selloff that took us to the lows of the day at 2:20 p.m.  From there, the rest of the day was a steady but modest rally into the close.  That action gave us black-bodied candles in all three major index ETFs.  The QQQ printed a Spinning Top type candle which was also a Bearish Engulfing.  SPY and DIA also printed Bearish Engulfing candles.  However, all three held above their T-line (8ema), after a retest in the SPY and DIA. 

On the day, nine of the 10 sectors were in the red with Basic Materials (-2.05%) far out in front leading the way lower.  Meanwhile, Energy (+0.01%) was the “big winner” by just barely hanging onto the green territory (doing almost 0.80% better than any other sectors).  At the same time, the SPY lost 0.61%, DIA lost 0.52%, and the tech-heavy QQQ lost 0.35%.  VXX increased 1.64% to close at 22.98 and T2122 fell back down into the oversold territory at 13.25.  10-year bond yields fell again, falling to 4.558% while Oil (WTI) closed up slighlty to $83.49 per barrel.  So, if you are a day trader, you’d say the strongest and most significant move of the day was that midday Bearish push. Still, the Bulls ended up recapturing half of the ground they lost in that push.  From a high-level view, Thursday was just a pause or modest pullback in the recent Bull run. There were no major changes with the short-term daily trend remaining bullish.

The economic news reported Thursday was limited to September year-on-year CPI which was a mixed bag.  It came in higher than expected at +3.7% (compared to a forecast of +3.6%, but was in-line with the August reading of +3.7%).  On a month-to-month basis the September CPI was also higher than anticipated at +0.4% (versus the forecast of +0.3% but also significantly better than the August +0.6% value).  At the same time, Weekly Initial Jobless Claims cane in just below expected at 209k (compared to a forecast of 210k and in-line with the revised prior week of 209k).  The most shocking news was EIA Weekly Crude Oil Inventories which shot higher by 10.176 million barrels.  Compare that to a forecast of just a 0.492-million-barrel build and the prior week’s 2.224-million-barrel drawdown).  Finally, after the close, the Fed’s balance sheet continued to shrink, but only slightly ($4 billion) from $7.956 trillion to $7.952 trillion).

Overnight, Asian markets were nearly red across the board.  Only Malaysia (+0.02%) managed to hang onto green territory.  Hong Kong (-2.33%) was by far (by more than 1.25%) the biggest loser followed by Singapore (-1.02%) and Shenzhen (-0.99%).  In Europe, we see a similar picture taking shape at midday.  Only two of the bourses are in the green, led by Russia (+0.27%) while the CAC (-0.75%), DAX (-0.77%), and FTSE (-0.32%) lead the region lower 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 +0.07% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.36% open at this hour.  At the same time, 10-year bond yields are climbing to 4.614% and Oil (WTI) is up a massive 3.81% to $86.09 per barrel in early trading.

The major economic news scheduled for Friday includes September Export Price Index and Sept. Import Price Index (both 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.).  We also hear from Fed member Harker at 9 a.m.  The major earnings reports scheduled for Friday include BLK, C, JPM, PNC, PGR, UNH, and WFC all before the open.  There are no major reports scheduled for after the close.

In US Congressional news, what was reported midday Thursday by a right-wing media outlet was confirmed.  Rep. Scalise abandoned his bid to be Speaker of the House after failing in the same way McCarthy failed before him (the handful of most extreme GOP members refused to support him and that was untenable with such a small majority over the Democrats). This leaves right-winger Jordan as the leading candidate but reportedly many of the more Centrist GOP Reps. have been pushing Emmert or Cole.  There are also reportedly 1 or 2 GOP members that have approached the Dems to say they may support Jeffries. (I am not sure if that is a practical move of people who actually want to govern or a Machiavellian move to make everything the Dem’s problem, which can then be blamed on Dem’s in 2024?)  Regardless, we look to be heading into another weekend with a House of Representatives that is dysfunctional, divided (in many ways), and unable to convene for business.

So far this morning, JPM, PNC, UNH, and WFC all reported blow-out earnings with beats on both the revenue and earnings lines.  These all represented major growth in revenue and earnings.  Meanwhile, BLK missed on revenue while beating on earnings including delivering 4.9% growth on earnings.  (C reports at 8 a.m.)  It is worth noting that UNH raised its forward guidance.

In US Congressional news, Rep. Scalise won a GOP caucus nod and was nominated to be House Speaker. This came on a 113 to 99 vote between Scalise and Rep. Jordan.  It is worth noting that three of Scalise’s 113 votes came from GOP delegates who have no vote where it really counts, in the House.  (An interesting side note is that multiple GOP sources indicated the first ballot actually had ex-Speaker McCarthy leading with 60 votes, Jordan with 47, and Scalise with 31 plus a ton of abstentions.  However, when McCarthy said “no way” all of his support, and more, shifted to Scalise.)  The problem for the GOP is that they need 217 votes to elect a speaker and somewhere between five and 20 the 221 GOP members have said publicly that they won’t vote for Scalise.   So, we may see another fiasco like the record 15 rounds of votes needed to select a crippled-from-the-start McCarthy. As a reminder, beyond the GOP caucus, there are 38 calendar days left until the existing CR ends (Nov. 17 is the last day) and a government shutdown.  There are some, both in government and outside analysts, who say even beyond Americans who would be hurt by a shutdown, Ukraine and Israel may also need House action (money appropriations) even before Nov. 17.

In miscellaneous news, Israel seems to be ready for its ground invasion of Gaza.  After hitting close to 7,000 targets in that 25-mile by 5-mile strip in the last few days, Israel has ordered 1.1 million Palestinians to evacuate Southward from the Northern half of Gaza.  Israel also broadened their targets shutting down two airports in Syria.  (It is being speculated that this was to prevent an Iranian official from reaching Syria for a potential “war council.”) 

With that background, it looks like the large-cap index ETFs are little changed in the premarket. However, the QQQ is showing some weakness with the largest candle of the three. However, QQQ was the furthest above its T-line and none of the three are sitting on that 8ema in the premarket. So, the change is nominal. DIA is back below its 200sma and QQQ looks like it will test its 50sma from above today. In terms of extension, none of the three major index ETFs are far from their T-line (8ema) but the T2122 indicator has dropped back down into the oversold territory at 13.25. So, again we still have room to run in either direction. However, this latest Bull run is getting some rest at the very minimum. Remember that it’s Friday, payday, and we have a weekend news cycle ahead before markets reopen. Be prepared. Lighten up, hedge your account, or be prepared to deal with the volatility that might happen.

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

Wednesday was an indecisive day in the market.  Despite a hot PPI, all three major index ETFs opened higher as the SPY gapped up 0.25%, DIA gapped up 0.22%, and QQQ gapped up 0.38%.  From there, all three slowly sold off, recrossing the gap and reaching the lows of the day just before 2 p.m.  However, the Bulls stepped in at that point and led a steeper rally that took the SPY and DIA out very near their highs.  DIA lagged, but still managed to almost close back at its open.  This action gave us white-bodied, Hammer candles in the SPY and QQQ as well as a black-bodied Doji in the DIA.  (DIA is right at its retest of the 200sma from below, QQQ pulled slightly away from its 50sma, and all three sit comfortably above their T-line (8ema).  This happened on less-than-average volume in the SPY and DIA and well-below-average volume in the QQQ.

On the day, seven of the 10 sectors were in the green again with Utilities (+1.33%) way out front again leading the way higher.  Meanwhile, Healthcare (-0.62%) lagged the other sectors.  At the same time, the SPY gained 0.41%, DIA gained 0.17%, and the tech-heavy QQQ gained 0.71%.  VXX fell 1.82% to close at 22.12 and T2122 fell back further into the mid-range at 598.52.  10-year bond yields plummeted again, falling to 4.558% while Oil (WTI) closed down sharply to $83.20 per barrel.  So, if you missed the market Wednesday, you probably thought it was a nothing day.  Those of us who did trade it saw an undulating move that ended with modest gains for the Bulls. Mr. Market may be waiting on CPI or earnings to resume, but clearly, there was no massive fear or greed driving the market.  It was more of a “what else do you have to show me?” kind of day.  

The only economic news reported Wednesday was limited to September PPI, which came in hotter than expected at +0.5% month-on-month (compared to a forecast of +0.3% but still better than August’s +0.7%).  The September Core PPI as also higher than anticipated (but better than the headline number) at +0.3%, versus a forecast and August reading of +0.2%.  Then, after the close, the API Weekly Crude Oil Stocks report showed a MASSIVE inventory build of 12.940 million barrels (versus a forecast that called for a 1.300-million-barrel build and dramatically different than the prior week’s 4.210-million-barrel drawdown.

In Fed Speak news, Fed Governor Waller said higher market rates may help the FOMC slow inflation, letting the central bank “watch and see” (as opposed to hiking rates again).  “The financial markets are tightening up and they are going to do some of the work for us.”  Later, the September FOMC Minutes came out.  Those meeting minutes showed that, at that time, “most” Fed members agreed that one more rate hike would be appropriate at some future meeting while “some” judged that no more hikes would be needed.  However, the thing that everyone seemed to agree on is that rates would need to be kept higher for longer.  Several of the members suggested that the focus of decisions and communications needs to shift away from how high toward how long to hold rates where they are now.  Finally, several participants noted that even after the Fed starts easing again, Quantitative Tightening (reducing the Fed balance sheet) will likely continue for a long time.  Later, Boston Fed President Collins said it is possible the FOMC is not done hiking rates.  “…And while we are likely near, and could be at, the peak for policy rates, further tightening could be warranted depending on incoming information,” she said.  Collins continued, “Patience will give us time to better separate ‘signal’ from ‘noise’ in the data and to balance risks,”.

In Autoworker contract talks and strike news, Reuters reported midday Wednesday that talks between the UAW and the Big 3 have edged closer to a deal.  The report, citing “sources,” noted that there are two main remaining obstacles.  These are first, a union demand to restore defined-benefit retirement plans to pre-2007 levels, which the UAW gave up to save the companies when the industry struggled during the Financial Crisis.  This would force the automakers to take billions of dollars of liabilities onto their books.  Secondly, the UAW wants to include all present and future electric vehicle joint ventures under the union’s contracts.  (Right now, the automakers avoid paying union wages and benefits by organizing those ventures as separate legal entities.)  In a surprise move, union workers began a strike at F’s largest (truck plant in KY) with 8,700 UAW members walking off the job Wednesday evening. This is a sharp increase in pressure since this is F’s most profitable plant (generating $25 billion in annual revenue).

In stock news, speaking of automakers, STLA announced it and its partner Samsung have chosen Kokomo, IN as the site of a second joint-venture EV battery plant.  (This may be a coincidence, but Kokomo is the hometown of UAW President Fain.)  Later, DIS announced it was raising prices at its theme parks by 8.9% on average.  At the same time, AXP announced it is hiking annual fees on a broad range of its cards with the increase going into effect February 28, 2024. In the afternoon, Reuters reported that ERIC has booked a $3 billion impairment charge related to its purchase of Vonage last year.  The company also said, “Core profit fell 39% in Q3.”  (ERIC stock was down more than 3% on the day.)  By mid-afternoon, GS announced it had agreed to sell its Greensky home improvement lender to a consortium of private equity firms.  GS will take a $0.19/share charge in Q3 over the deal.  Elsewhere, the BIRK IPO opened for trade on Wednesday.  Priced at $46/share, the stock opened at $41 and closed down to $40.20 after trading in a $2.50 range.  After the close, VSCO reaffirmed its guidance for the full year 2023.  Also after the close, Australian firm Liontown Resources said it has extended its exclusive due diligence period by a week for its proposed $4.23 billion purchase of ALB.

In stock government, legal, and regulatory news, the NYSE began a delisting process for SSU on Wednesday morning.  Later, the FDA announced it would review MRK’s immunotherapy drug Keytruda on October 16.  This comes after the drugmaker said the drug met both of its primary goals in its recent study.  (The review is over expanded use of the drug which already earned MRK $12.06 billion in the first half of 2023.)  The biggest news in this area came at the close Wednesday when the IRS claimed its audit found that MSFT owes $28.9 billion in back taxes (plus interest and penalties) related to tax periods from 2004 to 2013. (MSFT restructured and changed practices related to profit allocation across regions in 2013.)  MSFT immediately disputed the claim and said it plans to appeal through the IRS system.  After the close, GOOGL, AMZN, and NET jointly reported the largest-ever denial of service (DoS) attack. The attack began in late August using a new technique and was three times larger than any DoS attack seen in the past.

Overnight, Asian markets were mostly green with only three of the 12 exchanges in the region showing even modest red.  Hong Kong (+1.93%), Japan (+1.75%), and South Korea (+1.21%) led the region higher.  In Europe, with the lone exception of Russia (-1.07%) we see green across the board at midday.  The CAC (+0.47%), DAX (+0.57%), and FTSE (+0.77%) are leading the region upward 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 +0.34% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.24% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.571% and Oil (WTI) is up more than 1% to $84.37 per barrel in early trading.

The major economic news scheduled for Thursday include September CPI and Weekly Initial Jobless Claims (both at 8:30 a.m.), EIA Crude Oil Inventories (11 a.m.), WASDE Ag Report (noon), Federal Budget Balance (2 p.m.), and the Fed’s Balance Sheet (4:30 p.m.).  We also get a Fed speaker (Bostic at 1 p.m.).  The major earnings reports scheduled for Thursday include CMC, DAL, DPZ, FAST, INFY, SVNDY, and WBA all before the open.  There are no major reports scheduled for after the close.

In economic news later this week, on Friday, we get the September Export Price Index, Sept. Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations.  Fed member Harker also speaks at 9 a.m.

In terms of earnings reports later this week, on Friday, we hear from BLK, C, JPM, PNC, PGR, UNH, and WFC all report as earnings season kicks off again.

In US Congressional news, Rep. Scalise won a GOP caucus nod and was nominated to be House Speaker. This came on a 113 to 99 vote between Scalise and Rep. Jordan.  It is worth noting that three of Scalise’s 113 votes came from GOP delegates who have no vote where it really counts, in the House.  (An interesting side note is that multiple GOP sources indicated the first ballot actually had ex-Speaker McCarthy leading with 60 votes, Jordan with 47, and Scalise with 31 plus a ton of abstentions.  However, when McCarthy said “no way” all of his support, and more, shifted to Scalise.)  The problem for the GOP is that they need 217 votes to elect a speaker and somewhere between five and 20 the 221 GOP members have said publicly that they won’t vote for Scalise.   So, we may see another fiasco like the record 15 rounds of votes needed to select a crippled-from-the-start McCarthy. As a reminder, beyond the GOP caucus, there are 38 calendar days left until the existing CR ends (Nov. 17 is the last day) and a government shutdown.  There are some, both in government and outside analysts, who say even beyond Americans who would be hurt by a shutdown, Ukraine and Israel may also need House action (money appropriations) even before Nov. 17.

So far this morning, DAL, FRCOY, and INFY reported beats on both the revenue and earnings lines.  Meanwhile, CMC and WBA beat on the revenue line while missing on earnings.  On the other side, DPZ, FAST, and SVNDY all missed on revenue while beating on earnings.  It is worth noting that WBA lowered its forward guidance.

With that background, and ahead of data, the Bulls seem to be making another move this morning. The three major index ETFs all gapped up to start the premarket and have moved slightly higher, printing white-bodied candles in the early session. During this premarket, the DIA is testing its 200sma from below again and SPY is just under a retest of its 50sma. However, remember the news at 8:30 a.m. may cause volatility and that may carry through at the actual open. Also, remember it is possible we start seeing voting for the latest Speaker of the House today. That could either be non-news or a cause for volatility, depending on how the drama plays out. In terms of extension, none of the three major index ETFs are too far above their T-line (8ema) yet, but QQQ is starting to get just a bit stretched. The T2122 indicator is now back in the center of its mid-range. So, again we have room to run in either direction. However, this latest Bull run is starting to get just a little long in the tooth and in need of a rest.

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

Markets opened just on the green side of flat Tuesday with the SPY opening up 0.16%, DIA opening up 0.34%, and QQQ opening up 0.12%.  However, at that point, the Bulls took over to drive a steady rally that took all three major index ETFs to the highs of the day at noon. Then we drifted sideways until a sharp 15-minute selloff hit at 1 p.m. From there, all three of the major index ETFs traded sideways in a tight range the rest of the day.  This action gave us something like white-bodied, Inverted Hammer candles in the SPY and QQQ.  Meanwhile, the DIA printed a gap-up, white-bodied Doji.  At the same time, QQQ retested and just managed to close above its 50sma while DIA retested but failed to cross up through its 200sma.  This happened on average volume in the DIA and a little less-than-average volume in the SPY and QQQ.

On the day, all 10 sectors were in the green again with Utilities (+1.59%) leading the way higher.  Meanwhile, Energy (+0.48%) lagged the other sectors.  At the same time, the SPY gained 0.52%, DIA gained 0.40%, and the tech-heavy QQQ gained 0.55%.  VXX fell 3.35% to close at 22.53 and T2122 climbed again to the top of the mid-range and near the overbought territory at 78.48.  10-year bond yields plummeted back down to 4.657% while Oil (WTI) closed down at $85.97 per barrel (essentially where it had opened the day after an overnight move down).  So, Tuesday the Bulls were in control overall. However, the early-afternoon pullback and then the drift sideways leaves not-so-bullish candles (indecisive) in all three major index ETFS.  It just feels like the Bulls have not fully committed (or maybe the Bears have not given up yet).

The only economic news reported Tuesday was Fed speak.  On that front, the day started when Atlanta Fed President Bostic said flat out that the FOMC does not need to raise rates any further and he sees no recession ahead.  Later, Fed Governor Waller reiterated that the Fed is committed to bringing inflation down to its 2% target.  He told a George Mason conference, “Price stability is a primary responsibility of the Federal Reserve.”  He continued, “This is why we have taken forceful steps aimed at reducing inflation – and why we will stay on the job to achieve our objective.”  However, Minneapolis Fed President Kashkari seemed to imply that recently-spiked 10-year bond yields might do some of the lifting, allowing the Fed to ease up.  Kashkari said, “It’s certainly possible that higher long-term yields may do some of the work for us in terms of bringing inflation back down.”  Later asked about a soft landing, Kashkari answered that the chances for a soft landing scenario are looking “favorable.” 

In Autoworker contract talks and strike news, Canadian autoworkers began their strike against GM Tuesday after no new deal was reached by the Monday midnight deadline.  However, Unifor (Canadian version of UAW) and GM reached a tentative deal by midday Tuesday, ending the strike.  The GM deal includes a 25% wage hike (significantly more than GM has offered the UAW in the US).

In stock news, reports emerged Tuesday that TFC is in serious talks to sell its insurance brokerage unit to a private equity firm for $10 billion.  (Semafor reported Stone Point bought 20% of that unit earlier this year and is now looking to buy the remaining 80%.)  Meanwhile, WMT announced it is expanding online healthcare benefits to workers in 28 states following recent acquisitions in that space.  At the same time, TSLA spokesmen denied union claims that health and safety provisions at its German gigafactory were inadequate.  Later, ADBE announced it is rolling out a new AI product that makes new images from uploaded samples.  At midday, an article from “The Information” claimed NFLX was having serious problems with ad sales and ad-supported subscriber acquisition.  NFLX stock closed down 3.27% on the news.  Elsewhere, BA reported 27 jet deliveries in September (a day after their main competitor EADSY reported 55 for the same period).  Later, PWFL stock surged, closing up more than 28% following the announcement of a merger between the company and MIXT.  (MIXT closed up 1.52% after both stocks had a hugely volatile day.)   At the same time, AKRO stock crashed after the company’s main drug failed to meet its goals in a drug trial.  After the close, the Wall Street Journal reported that BIRK has priced its IPO at $46/share.

In stock government, legal, and regulatory news, the CA Public Utilities Commission proposed a $45 million penalty against PCG related to the 2021 Dixie wildfire.  PCG replied by saying they do not contest the violations or conclusions of the investigation (and will pay).  At the same time, Reuters reported that the EU has agreed to undertake anti-subsidy investigations into Chinese steelmakers in a deal with the Biden Administration.  This will be part of ending Trump-era steel tariffs between the EU and US.   Elsewhere, the SEC shortened the deadline for reporting any stock purchase that results in an investor acquiring 5% or greater ownership of a listed company.  The deadline is now 5 business days, down from the previous 10 calendar days.  Later a US Bankruptcy judge approved the reorganization of MNKKQ, in a plan that cuts $1 billion for the settlement the drugmaker must pay victims as part of opioid-related settlements.  The deal also cancels $2 billion in company debt and wipes out existing equity shares.  (This is noteworthy because the bankruptcy was only filed on August 28 and comes just 14 months after the company’s previous bankruptcy.)  JPM is among the lenders that are taking a serious haircut from this bankruptcy plan.  At the same time, the US Supreme Court is hearing an important “whistleblower” case involving UBS, in which a former employee alleged had fired him over his reporting of company violations of investor-protection laws.  Lower courts had found this to be true and a jury has awarded the employee $900k over his wrongful dismissal.  However, company appeals caused the award to be set aside by a district appeals court and SCOTUS is now considering reinstating the award. (This case will have a much wider impact by setting a precedent on what companies can get away with in retaliating against whistleblowers.)

Overnight, Asian markets were heavily on the green side again.  Singapore (-0.19%) was the only exchange in the red.  Meanwhile, South Korea (+1.98%), Thailand (+1.50%), and Hong Kong (+1.29%) led the other 11 exchanges in the region higher.  In Europe, we see a similar picture taking shape with only the CAC (-0.34%) on the red side while the other 14 exchanges are in the green at midday.  The DAX (+0.11%) and FTSE (+0.19%) lead the region higher on volume while a couple of the smaller bourses are up well over 1% in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing to a solidly green open at this point.  The DIA implies a +0.31% open, the SPY is implying a +0.32% open, and the QQQ implies a +0.40% open.  At the same time, 10-year bond yields are plummeting again, now down to 4.56%, and Oil (WTI) is off another 0.38% to $85.64 per barrel in early trading.

The major economic news scheduled for Wednesday includes Sept. PPI (8:30 a.m.), EIA Short-Term Energy Outlook (noon), FOMC Meeting Minutes (2 p.m.), and API Weekly Crude Oil Stocks report (4:30 p.m.).  We also hear from Fed members Bowman at 4:15 a.m., Waller at 10:15 a.m., and Bostic at 12:15 p.m.  There are no significant earnings reports scheduled for Wednesday (it’s the rest day before earnings season begins again on Thursday).

In economic news later this week, on Thursday, Sept. CPI, Weekly Initial Jobless Claims, EIA Crude Oil Inventories, Federal Budget Balance, and the Fed’s Balance Sheet are reported.  Finally, on Friday, we get the September Export Price Index, Sept. Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations.  Fed member Harker also speaks at 9 a.m.

In terms of earnings reports later this week, on Wednesday, again there are no reports.  However, earnings season starts again on Thursday, as CMC, DAL, DPZ, FAST, INFY, SVNDY, and WBA report.  Finally, on Friday, we hear from BLK, C, JPM, PNC, PGR, UNH, and WFC all report as earnings season kicks off again.

In miscellaneous news, in what some analysts believe to be a probable Russian action both a undersea gas pipeline and an undersea telecommunication cable between Finland and Estonia were damaged by an explosion Sunday.  The Finnish government said on Tuesday that this was likely done by a deliberate act, not an accident.  Meanwhile, Bloomberg reported that the Chinese government is looking at another round of stimulus by selling $137 billion in bonds and investing money in infrastructure projects (a traditional CCP stimulus approach). 

In late-breaking news, mortgage rates climbed again last week with the national average 30-year, fixed-rate, conforming loan rising from 7.53% the week prior to 7.67%.  Applications for refinance loans were flat (up 0.3%) while new home purchase loan applications rose 1% on the week.  However, both numbers were down significantly from a year earlier.  Elsewhere, XOM did reach an agreement to buy PXD for $59.5 billion (which is $253 per share) in an all-stock deal.  (This will greatly expand XOM’s footprint in the Permian Basin Shale area and comes on interesting timing since XOM’s executive leading its Shale Oil and Gas unit was arraigned for Sexual Assault in Texas yesterday.)  Finally, early this morning, the Biden Administration (led by the FTC and CFPB) announced major steps toward banning “junk fees” (read nickel and diming us to death) from banks.  The rules will not become effective until after a 60-day comment and review period.

With that background, it looks like the Bulls are making another modest move this morning, opening the premarket higher and, so far at least, printing white-body candles with tiny wicks in the early session. During this premarket, the DIA is testing its 200sma from below and QQQ is moving just a bit away from its 50sma after Tuesday’s recross to the upside. We do have modest news today including FOMC Minutes and 3 Fed speakers that could lead to a little market reaction. (There could also be some modest reaction to Congress if the GOP is able to become a little less dysfuntional and choose a replacement House Speaker. Though that may be tough since they need a nearly unanimous choice given their tiny majority.) However, it feels like Mr. Market is waiting on something (CPI, Jobless Claims, and/or the start of earnings season). So, don’t be surprised if today is yet another drift-like day. In terms of extension, none of the three major index ETFs are too far above their T-line (8ema) yet and the T2122 indicator is now at the top of its mid-range and just about to enter into the overbought territory. So, we still have room to run in either direction. However, this short Bull run of the last 4 days is starting to get just a little long in the tooth.

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

Monday saw a knee-jerk gap lower at the open in fears generated by the Israel vs Hamas “war.”  This caused a 0.46% gap down in the SPY, a 0.35% gap down in the DIA, and a 0.67% gap down in the QQQ.  At that point, all three major index ETFs chopped sideways until about 11:00 a.m., when the Bulls started a strong rally that lasted until about 2:45 p.m.  The rest of the day saw a very modest drift lower with a slight rally back the last 15 minutes of the day.  This action gave us gap-down, strong white candles with small wicks on both ends across the SPY, DIA, and QQQ.  All three also retested their T-line (8ema) and passed that test (held support) on the day.  (It is worth noting that QQQ is now back up to and about to test its 50sma).  This happened on above-average volume in the DIA and just below-average volume in both the QQQ and SPY.

On the day, nine of the 10 sectors were in the green again with Energy (+3.54%) way out front (by 2.25%) leading the way higher.  Meanwhile, Healthcare (-0.01%) was the only sector in the red (barely), lagging behind the other sectors.  At the same time, the SPY gained 0.64%, DIA gained 0.60%, and the tech-heavy QQQ gained 0.51%.  VXX fell 1.52% to close at 23.28 and T2122 climbed to the center of its mid-range to close at 52.27.  Bond markets were closed for Columbus Day, so 10-year bond yields remain at 4.795% while Oil (WTI) spiked a massive 4.28% on the day on Israel-Hamas news to close at $86.32 per barrel. So, the knee-jerk reaction at the open was met with some re-evaluation and then the Bulls took over.  Most of the day was spent confirming the Friday move, which now looks a little less like “just short-covering.”  However, Absolute Breadth diverged from other market breadth indicators like McClellan, Zweig, and Adv/Decline. 

There was no major economic news reported Monday, in part because it was a holiday for the Fed and Federal government.

In Autoworker contract talks and strike news, on Monday UAW workers began striking Mack Truck plants after its 4,000 employees rejected (by 73% to 27%) a five-year contract proposal from Mack owned by VLVLY (Volvo).  The rejected deal called for a 19% pay increase over the next five years.  On the company side, STLA laid off 570 more workers, GM laid off 200 additional workers, and F added 70 employees to its layoffs (all blamed on the impacts of the UAW strike).

In stock news, BMY announced Sunday night that it is acquiring MRTX for $5.8 billion.  BMY was volatile but closed little changed on Monday after this news.  On Monday morning, GOOGL announced that it is significantly reducing the size of its recruiting team after 12,000 layoffs back in January.   At the same time, the Wall Street Journal reported that MSFT is losing an average of $20/user/month on one of its first AI products.  In retail news, AMZN is holding its second “Prime Deal Days” of the year today and tomorrow.  AMZN is obviously hoping to get a jump on Black Friday and “steal” sales from brick-and-mortar stores ahead of that day.  However, retail industry analysts are suggesting consumers wait until the traditional Black Friday and Cyber Monday for better deals.  Elsewhere, in a blow to non-union TSLA, Reuters reports that a significant number of its German workers have joined the IG Metall union.  The move seems to be over health, safety, and required overtime concerns at the German TSLA “giga factory”.  At the same time, Investing.com reports that a 2-year holding period on a significant portion of QSR stock ends today.  Later, Reuters reported the NWLI has agreed to buy AEL for $1.9 billion (a 20% premium over Friday’s close).  In banking news, C has sold its Chinese consumer wealth portfolio to HSBC for $3.6 billion in a deal that is expected to close in the first half of 2024.  (There was no word on C’s cost basis in that unit.)  Meanwhile, in the midst of XOM’s late-stage negotiations to buy PXD, it was reported that the head of XOM’s shale oil and gas unit (which is what PXD is) was arrested on charges of sexual assault.  Late in the day, HYMTF (Hyundai) cut the asking price of its Chinese manufacturing plant (300k cars/year capacity) by a whopping 30%, down to $353 million.  At the same time, EADSY (Airbus) confirmed it delivered 55 jets in September.  This brought their 9-month total to 488 jets delivered.

In stock government, legal, and regulatory news, EU antitrust regulators asked users (specifically MSFT and AAPL users) whether tough new rules should apply to MSFT Bing and Edge as well as AAPL’s iMessage.  This was done via a survey those users had 5 days to complete.  A decision on the matter is due within five months.  Later, the Financial Times reported that EU competition regulators had ordered ILMN to sell its Grail unit after the company closed the $8 billion deal without EU approval in 2021.  (The EU has already fined ILMN $445 million over closing the deal without approval.)  ILMN plans to appeal.  At the same time, the US Supreme Court has postponed the GOOGL antitrust case (brought by Indian competition regulators) hearing until January.  In Chip news, two South Korean companies were given indefinite waivers on supplying chip-making equipment to their Chinese factories.  Samsung and SK Hynix will be allowed to continue sending such equipment without individual waivers for each shipment.  (Samsung makes 40% of its NAND memory in China and Hynix makes 40% of its DRAM memory in that country too.  Together those companies control 70% of the DRAM market and 50% of the NAND market globally.)

So far this morning, PEP beat on both the revenue and earnings lines.  Those numbers were also a 6.7% quarter-on-quarter increase and resulted in a modest 3.7% upside surprise.  PEP also raised its earnings guidance for the full year 2023.

Overnight, Asian markets were mostly green on strong moves.  Japan (+2.43%), Malaysia (+1.26%), Singapore (+1.03%), and Australia (+1.01%) led a broad-based rally.  More trouble in the Chinese real estate sector (Country Garden warned it may not be able to repay its debt) and analyst warnings about Korea’s Samsung, caused Shanghai (-0.70%), Shenzhen (-0.56%), and South Korea (-0.26%) to be the only red in the region, far under-performing the other nine exchanges.  In Europe, we see green across the board at midday, like Asia, on strong moves.  The CAC (+1.57%), DAX (+1.71%), and FTSE (+1.58%) lead the region higher.  However, a few of the smaller bourses are up 2% – 4% in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a very modest green start to the day, just on the green side of flat.  The DIA implies a +0.16% open, the SPY is implying a +0.10% open, and the QQQ implies a +0.07% open at this hour.  At the same time 10-year bond yields are down sharply to 4.705% and Oil (WTI) is off half a percent to $85.97 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to three Fed speakers (Bostic at 9:30 a.m., Waller at 1 p.m., and Kashkari at 3 p.m.). The only major earnings report scheduled for the day is PEP before the open.  There are no major earnings reports set for after the close.

In economic news later this week, on Wednesday, we get Sept. PPI, EIA Short-Term Energy Outlook, FOMC Meeting Minutes, API Weekly Crude Oil Stocks report.  We also hear from Fed members Bowman at 4:15 a.m. and Waller at 10:15 a.m.  On Thursday, Sept. CPI, Weekly Initial Jobless Claims, EIA Crude Oil Inventories, Federal Budget Balance, and the Fed’s Balance Sheet are reported.  Finally, on Friday, we get Sept. Export Price Index, Sept. Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations are reported.  Fed member Harker also speaks at 9 a.m.

In terms of earnings reports later this week, on Wednesday, again there are no reports.  However, earnings season starts again on Thursday, as CMC, DAL, DPZ, FAST, INFY, SVNDY, and WBA report.  Finally, on Friday, we hear from BLK, C, JPM, PNC, PGR, UNH, and WFC all report as earnings season kicks off again.

In miscellaneous news, at mid-afternoon on Monday Reuters reported that Venezuela and the US are in talks to provide sanctions relief to the Central American heavy oil producer.  The Biden Administration is encouraging Maduro to negotiate with political opposition over elections since his 2018 election was widely seen as a sham.  At the same time, such a move would add more “heavy, sour” crude to world markets AND help Venezuela repay its foreign debt.  (As an aside, US refineries are geared toward refining “heavy, sour” like that produced in Canada and Venezuela rather than the light, sweet crude produced in the US.  As a result, regardless of record oil production in the US, gasoline prices are held high in the US by the oil companies.  The talks are aimed at increasing the global “heavy, sour” supply and possibly reducing US gas prices.) Meanwhile, on Monday, Fed Vice Chair Jefferson and Dallas Fed President Logan both noted that higher bond yields are likely to give the FOMC reason to pause any further rate hikes.

In Israeli-Hamas news, the “war” has been over for a day or two.  By this I mean Hamas has been shoved back into Gaza.  The current phase is the Israeli punishment of Hamas phase (more than 1,000 targets bombed) with it widely expected a ground invasion will follow, again aimed at retribution.  The unknown number of hostages Hamas took is at least publicly irrelevant to Israeli action decisions.  Meanwhile, US airlines have suspended flights to Israel over security concerns.  Fertilizer stocks shot higher Monday as the main export port for Israeli potash is just north of Gaza and well within Hamas rocket range.  (Israel accounts for just less than 3% of global potash production.)

With that background, it looks like markets are very tepid this morning. The Bears don’t seem to have strength, but the Bulls have no conviction either despite the big bullish moves in Asia and Europe. All three major index ETFs are printing small, white-bodied, but indecisive candles so far in the premarket. We do have a trio of Fed speakers on tap to potentially change the narrative during the day. However, with no major news or earnings scheduled, it would not be out of the question that markets are drifting while they wait on CPI and/or the resumption of earnings season at week’s end. In terms of extension, none of the three major index ETFs are far above their T-line (8ema) yet and the T2122 indicator is now smack-dab in the middle of its range. So, again we have room to run if either the Bulls or Bears can find energy. Expect potential volatility as Israel almost certainly will invade Gaza soon (which is likely to cause another short-term knee-jerk). However, geopolitical concern will soon return to the much more important Russian invasion of Ukraine.

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

Friday gave us the gap lower at the opening bell on what most attributed to fear over a strong payroll report (fear it will lead the Fed to more hikes).  We opened down 0.57% in the SPY, down 0.30% in the DIA, and down 0.81% in the QQQ.  After an hour of grinding along the lows (and a little lower in the DIA), the Bulls ripped the face off of the Bear chasers.  This resulted in a strong rally in all three major index ETFs until just after noon and then a slow further rally to the highs at about 2:45 p.m.  At that point, all three just ground sideways and a bit lower into the close.  This action gave us strong white-bodied Bullish Engulfing candles in the SPY, DIA, and QQQ.  All three crossed back above their T-line (8ema), barely in the DIA, strongly in the QQQ, and somewhere in between those two on the SPY.

On the day, nine of the 10 sectors were in the green with Technology (+2.03%) far out ahead (by three-quarters of a percent) leading the way higher.  Meanwhile, Consumer Defensive (-0.31%) lagged behind the other sectors. At the same time, the SPY gained 1.19%, DIA gained 0.88%, and the tech-heavy QQQ gained 1.68%.  VXX fell 1.25% to close at 23.64 and T2122 climbed up out of the oversold territory into the lower end of the mid-range at 29.94.  10-year bond yields spiked to close at 4.797% while Oil (WTI) gained a bit more than half of a percent to end the day at $82.79 per barrel.  So, we saw a Bullish whipsaw after a significant open lower.  Some analysts believe this was just largely a short covering rally.  While I tend to be in this camp, short covering does not necessarily count out a bottom.  For example, all three major index ETFs put in above-average volume (far above average in the QQQ) on Friday.  Absolute Breadth also increased slightly.  

The major economic news reported Friday included the September Avg. Hourly Earnings (month-on-month) which came in the same as the August increase at +0.2%.  This is a bit better than expected compared to a forecast of +0.3%.  The September year-on-year Avg. Hourly Earnings also came in just a touch better (from a Fed standpoint) than forecast at +4.2% (versus the +4.3% forecast and +4.3% August reading).  At the same time, September Nonfarm Payrolls came in extremely hot a +336k (compared to a forecast of +170k and the August value of +227k).  There were also big upward revisions to both the July and August job creation numbers.  Likewise, September Private Nonfarm Payrolls were also extremely hot at +263k (versus the +160k forecast and the +177k August reading).  The Sept. Participation Rate remained steady at 62.8%.  Still, even with the massive number of jobs created, the Sept. Unemployment Rate remained steady at 3.8% (compared to a 3.7% forecast and the 3.8% August reading).  As always, interpretation is everything.  The bears (and largely out of the White House party) thought these numbers were a dire warning to the Fed that they MUST hike rates massively and relentlessly to avoid Armageddon.  On the other hand, the bulls (and the party in the White House) see the data as validation that the economy is creating a huge number of jobs while inflation keeps slowly ticking lower.  In short, everything is rosy.  I will leave it to you to decide how you see the data.  For myself, I am between the two extremes but lean toward the latter interpretation.  Either way, I fully expect the Fed to do what they have been saying and signaling for months…hike once more this year and then hold steady, most likely through Q3 of next year.

Speaking of the Fed, Cleveland Fed President Mester (typically a hawk) commented on the Payrolls report Friday in an interview with CNN.  Mester said, “With this one report, [the data] continues to say it’s a strong labor market, but it is getting a little bit less tight than we saw before … We also in that report saw that wage growth is tempering a bit.”  She went on to characterize the overall economy as “economic growth has been strikingly strong and yet we’re still making progress on inflation.”  She continued “We are basically at or near” the peak of the tightening campaign and the main question is how long the Fed should keep rates high to bring inflation back to 2% by the end of 2025.”

In Autoworker contract talks and strike news, the UAW did not widen its strike on Friday.  The UAW reported that the last-minute counter-offer from GM made a major concession as the automaker agreed to include EV battery plants in their UAW offer.  In addition, GM raised their wage increase offer to 23% (surpassing the F and STLA offers).  North of the border, Unifor (UAW equivalent in Canada) says that GM is fighting key elements of the recent F contract agreed and approved by the union to avoid a strike.  The key issues are GM’s classification of full-time employees as temporary contract workers (avoiding higher wages and benefits), health allowances for retirees, and product investment commitments.  The Unifor strike deadline for GM is Monday night at midnight.

In stock news, MGM clarified its report of “significant” impacts on Q3 profits from the cyber-attack back in September.  On Friday, the company said that they estimate the revenue lost is $110 million (which was less than some analysts had feared).  Elsewhere, to add insult to injury, a day after a Commerce Dept. investigation was announced (into the percentage of staff that comes from the US) TSM now faces a labor cost threat from a coalition of 14 unions who say the company is stalling negotiations.  Elsewhere, AMZN announced that its first two Kuiper satellite internet network satellites were launched Friday at 2 p.m.  (Kuiper will compete with Elon Musk’s SpaceX.)  At the same time, AMGN announced it had completed the $27.8 billion acquisition of HZNP.  Late in the day, Reuters reiterated what was reported here before the open Friday, saying that XOM is now in advanced talks to purchase PXD in a deal that could be over $60 billion.  At the same time, T faced rumors Friday late that it is considering divesting its 70% ownership of DirecTV (purchased for $16 billion in 2021).

In stock government, legal, and regulatory news, the UK said the SNAP AI Chatbot may pose a privacy risk for children.  However, the UK Information Commissioner’s Office said it will consider a company reply before deciding whether or not to ban the service in UK.  Later, the US Treasury Dept. issued new EV tax credit guidance on Friday.  The change will allow consumers (as of January) to transfer their $7,500 (new EV) or $4,000 (used) tax credit directly to the dealership.  This will mean a de facto price reduction for electric vehicles. At the same time, the USDA announced that bird flu was detected in a commercial flock of turkeys, the first infection discovered since April.  This comes just as CALM announced that egg prices are down 48% from a year ago (as of September).  Elsewhere, a recall of nearly 10k 2023 electric vehicles by NSANY (Nissan) was announced by the NHTSA.  The recall is related to defective inverter software that could lead to vehicle shutdowns.  After the close, a US District Judge ruled that SBUX must disclose its anti-union spending in efforts to quash a union in Buffalo, NY.  The US Labor Dept. NLRB had demanded the data during its investigation and SBUX had refused.  Also after the close, HEINY (Heineken) had its Brazilian brewery added to the government’s list of companies it says are responsible for labor practices analogous to slavery.  Friday evening, the Mexican government said that WMT will face an anti-trust investigation from the country’s anti-trust panel (related to wholesale distribution of consumer goods).

Overnight, Asian markets were mixed but leaned to the downside on modest moves.  Taiwan (+0.41%) paced the five gaining exchanges while New Zealand (-0.73%) and India (-0.72%) led the seven exchanges in the red.  In Europe, we see a similar mixed picture with a bit more amplitude at midday.  Norway (+1.49%) and Russia (+1.17%) are way out-front pacing the gains while Greece (-1.54%) is by far the biggest loser.  However, the CAC (-0.49%), DAX (-0.73%), and FTSE (+0.22%) lead the region (as usual) on volume in early afternoon trade. In the US, as of 7:30 a.m., Futures point toward a gap down to start the day.  The DIA implies a -0.51% open, the SPY is implying a -0.64% open, and the QQQ implies a -0.83% open at this hour.  At the same time, the 10-year bond yield has spiked to 4.795% and Oil (WTI) spiked 2.64% to $85.80/barrel.

There is no major economic news scheduled for Monday.  There are also no major earnings reports scheduled for either before the open or after the close.

In economic news later this week, on Tuesday we have two Fed speakers (Waller at 1 p.m. and Kashkari at 3 p.m.).  Then Wednesday, we get Sept. PPI, EIA Short-Term Energy Outlook, FOMC Meeting Minutes, API Weekly Crude Oil Stocks report.  We also hear from Fed members Bowman at 4:15 a.m. and Waller at 10:15 a.m.  On Thursday, Sept. CPI, Weekly Initial Jobless Claims, EIA Crude Oil Inventories, Federal Budget Balance, and the Fed’s Balance Sheet are reported.  Finally, on Friday, we get the September Export Price Index, Sept. Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations.  Fed member Harker also speaks at 9 a.m.

In terms of earnings reports later this week, on Tuesday, PEP reports.  Then Wednesday, again there are no reports.  However, earnings season starts again on Thursday, as CMC, SAL, DPZ, FAST, INFY, SVNDY, and WBA report.  Finally, on Friday, we hear from BLK, C, JPM, PNC, PGR, UNH, and WFC all report as earnings season kicks off again.

In miscellaneous news, JPM released a market forecast on Friday which predicts a bearish scenario for global equities.  The report cited a very strong dollar, weakening service sector, and interest rates expected to peak in Q4.  JPM suggested that their clients rebalance portfolios to go overweight on technology, consumer staples, and utilities as those sectors get beaten down by currently rising bond yields.  Elsewhere, Bloomberg reported that a bi-partisan group of US Senators (including Majority Leader Schumer) will be in China this week, hoping to get a meeting with Chinese President Xi.  Their hope is to discuss escalating tensions. At the same time, Taiwan is probing four of their companies (at US urging) for helping China’s Huawei set up a network of chip manufacturing plants in Southern China.  (As reported here last week, President Biden is looking likely to meet Xi in mid-November on the sidelines of an Asia Pacific Economic Conference in San Francisco.

In late-breaking news, given the attacks in Israel and Palestine, oil is sure to knee-jerk higher (despite neither place having any real oil production or transit), and oil-levered stocks may take a hit.  The most recent news out of Israel has the IDF placing Gaza under siege (no food, water, fuel, or electricity allowed to enter) and are continuing their pounding of targets in that 141 sq. mile strip.  (The IDF says 500 targets were hit last night alone.)  Elsewhere, CNBC reports that China’s key economic ministries announced Monday that they are targeting a 50% increase in the country’s computing power by 2025.  The six main technology-related ministries jointly announced a goal of 300 exaflops by that date.  (For reference, that would be a computer equivalent to 600 million mainstream laptop computers tied together.)  Just for comparison, the US now has three of the top five supercomputers in the world.  China’s current best (known) is not even among the top 500 of the world’s most powerful computers.

With that background, it appears the Bears are gapping all three major index ETFs lower. However, premarket candles in all three are white-bodied and indecisive. In other words, the Bears are not getting follow-through after the initial knee-jerk gap. We have scheduled news, speakers, or earnings to change the narrative. So, expect the Israel-Palestine war to drive the news cycle all day. In terms of extension, none of the three major index ETFs are far below their T-line (8ema) and the T2122 indicator is now back in its mid-range. So, again we have room to run if either the Bulls or Bears can find energy. Expect more volatility at the open as traders who do not trade the premarket session get their first chance to over-react. It could be a bumpy day. (Mondays like this are the reason for hedging, lightening up, and/or buying option insurance on Friday can be a good idea.)

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