Rate Decision and Big Tech Reports

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Rate Decision and Big Tech Reports

Stock futures hovered near the flatline on Wednesday as investors awaited the first Federal Reserve interest rate decision and big tech reports. On Tuesday, tech stocks led the S&P 500 higher, while the Nasdaq Composite surged by 2%, recovering from sharp losses on Monday triggered by concerns over China’s DeepSeek and its potential impact on the artificial intelligence sector. Investors are particularly focused on Fed Chair Jerome Powell’s comments during his first press conference in President Donald Trump’s second term. Additionally, a series of Big Tech earnings reports, including those from Meta Platforms, Microsoft, and Tesla, are expected on Wednesday afternoon.

European markets saw an uptick on Wednesday as investors closely watched a series of corporate earnings reports. Dutch semiconductor equipment maker ASML reported fourth-quarter net sales and profits that exceeded expectations, with net bookings—a crucial measure of order demand—surging by 169% from the previous quarter. Additionally, LVMH, the world’s largest luxury goods company, surpassed sales forecasts in its earnings report released after the market closed on Tuesday.

On Wednesday, Japan and Australian stocks experienced gains as Wall Street’s overnight rebound provided a positive momentum. Japan’s benchmark Nikkei 225 index rose by 1.02%, while the Topix index increased by 0.68%. The release of minutes from the Bank of Japan’s December meeting revealed discussions on neutral interest rates, highlighting the ongoing debate on adjusting borrowing costs amidst inflation rates exceeding the 2% target. Meanwhile, Australia’s S&P/ASX 200 index climbed by 0.57%, driven by a 0.2% rise in inflation for the December quarter and a 2.4% annual increase. Several Asia-Pacific markets, including China, Hong Kong, South Korea, and India, remained closed in observance of the Lunar New Year holiday.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include AIT, ASML, ADP, AVT, EAT, GLW, DHR, EXP, EXTR, FSV, FLEX, GD, DPI, HES, HESM, LII, MNRO, MSCI, NDAQ, NAVI, NSC, PB, SMG, SLGN, SBSI, TMUS, TEVA, UBS, VFC, & WNC.

After the bell reports include AEM, AMP, AXS, BHC, BHE, CHRW, CALX, CP, CCS, CLB, DLB, ETD, FIBK, IBM, LRCX, LSTR, LEVI, LBRT, META, MXL, MTH, MSFT, NFG, SEIC, SIGI, NOW, TER, TSLA, TTEK, URI, WM, WDC, WHR, & WOLF.

News & Technicals’

Global market attention is focused on the U.S. Federal Reserve’s first-interest rate decision of 2025, scheduled for Wednesday. According to CME Group data, Fed funds futures indicate nearly 100% certainty that the central bank will maintain rates within the target range of 4.25% to 4.50%. Despite this high level of confidence, investors will closely monitor the decision and Fed Chair Jerome Powell’s subsequent press conference for insights into the future trajectory of interest rates this year.

Norway’s massive sovereign wealth fund reported a full-year profit of 2.5 trillion kroner ($222.4 billion) on Wednesday. Managed by Norges Bank Investment Management, the fund’s impressive returns were largely fueled by the AI boom that propelled tech stocks higher in 2024. The fund achieved a return on investment of 13% for the year, reflecting the significant impact of advancements in artificial intelligence on the market.

U.S. Treasury yields fell on Wednesday as investors anticipated the Federal Reserve’s first interest rate decision of 2025. By 5:49 a.m. ET, the 10-year Treasury yield had decreased by 2.5 basis points to 4.524%, and the 2-year Treasury yield had dropped by 1 basis point to 4.191%. Paul Hickey, co-founder of Bespoke Investment Group, remarked on CNBC that minimal action from the Fed would be favorable for the market. Following the rate decision announcement, Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET, which investors will scrutinize for insights into future monetary policy decisions this year.

Apple supplier Qorvo experienced a swift reversal in its stock price after issuing a warning about potential weakness. Initially, Qorvo shares surged over 13% following the announcement of better-than-expected earnings. However, the stock’s momentum reversed after CEO Robert Bruggeworth commented on sales to the company’s largest customer, forecasting flat to modest revenue growth for FY 2026. Although Qorvo did not name the customer, it was revealed that this customer accounted for just over half of the company’s revenue in the December period.

Caution is the word of the day for me with the uncertainty of the interest rate decision and big tech reports extreme price volatility is possible.  Plan your risk carefully, avoid the fear of missing out chase and think about protecting your current profits and account capital.

Trade Wisely,

Doug

Durable Goods and Earnings Lead the News

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Monday was all about Chinese startup DeepSeek calling US tech leader investments into AI into question.  SPY gapped gown 2.16%, DIA gapped down 0.80%, and QQQ gapped down 3.52%.  From that point, SPY and QQQ chopped along the bottom end of the opening gap the rest of the day.  Meanwhile, after its much smaller gap, DIA rallied modestly all day long.  This action gave us a large gap-down, white-bodied, near Marubozu candle in the SPY.  The post-gap rally got SPY back in the area of its T-line (8ema), but did not result in a retest. At the same time, QQQ gave us a huge gap-down Inverted Hammer type candle where price rallied off the lows, but then failed from the highs.  Finally, DIA printed the strongest candle, gapping down (but staying above its T-line), but then rallied all day to give us a large white Bullish Engulfing candle.

On the day, five of the 10 of the sectors were in the green with Consumer Defensive (+2.27%) way out front among the gainers.  On the other side, Technology (-4.05%) took a huge hit and was by far the biggest losing sector.  Meanwhile, SPY lost 1.41%, DIA gained 0.68%, and QQQ lost 2.91%.  At the same time, VXX popped 6.59% to close at 44.49 while T2122 dropped but remained in (the lower part of) its overbought range, closing at 82.47.  On the bond side, 10-Year Bond yields fell back to 4.534% and Oil (WTI) dropped 2.09%, closing at $73.10 per barrel. So, Monday was a market response (overreaction?) to an impressive Chinese startup AI that has been claimed to have been developed fast (two years by a handful of very good guys as a side gig) and trained very cheaply ($6 million) on supposedly lower-end hardware (since embargoes supposedly prevent China from getting the high-end AI cards).  This made the market question the literal hundreds of billions of dollars western tech giants have plowed into AI development and training.  However, this was later tempered by second-thoughts on whether the Chinese government might have secretly footed a hugely larger bill or if the performance was really as good as it appears.  The result was a big gap lower and then a rethink rebound with some rotation into big defensive names thrown in.

The major economic news on Monday was limited to December Building Permits which came in slightly below expectations at 1.482 million (versus to a 1.483 million forecast but down a bit from November’s 1.493 million reading).  Later, December New Home Sales came in higher than expected at 698k (compared to a 669k forecast and Nov. 674k value). 

There was no Fed news Monday as they prepare for Wednesday’s FOMC meeting.  (That meeting is expected to be a hold by most analysts and 99.5% of Fed Futures traders.)

After the close, BRO, CR, NUE, SANM, WRB, and WAL all reported beats on both the revenue and earnings lines.  Meanwhile, ARE missed on revenue while meeting on earnings.  On the other side, AGNC beat on revenue while missing on revenue.  However, GGG missed on both the top and bottom lines.

Overnight, Asian markets were mixed with many exchanges still closed for Lunar New Year.  In Europe, we see green with 12 of the 14 bourses above break-even at midday.  The CAC (+0.26%), DAX (+0.63%), and FTSE (+0.41%) lead the region higher in early afternoon trade.  In the US, as of 7:40 a.m., Futures are pointing toward a flat start to the day.  DIA implies a -0.08% open, the SPY is implying a +0.06% open, and QQQ implies a +0.08% open at this hour.  At the same time, 10-Year Bond yields are up to 4.565% and Oil (WTI) is up 0.72% to $73.70 per barrel in early trading.

The major economic news scheduled for Tuesday includes Preliminary December Durable Goods Orders (8:30 a.m.), January Conf. Board Consumer Confidence (10 a.m.), and the API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports scheduled for before the open include ADNT, BA, GM, IVZ, JBLU, KMB, LMT, PCAR, PII, BPOP, RCL, RTX, SYF, SYY, and XRX.  Then after the close, BXP, CB, FFIV, HLI, LFUS, LOGI, NXT, PKG, QRVO, RNR, SAP, SBUX, LRN, and SYK report. 

In economic news later this week, on Wednesday, Preliminary December Goods Trade Balance, Preliminary December Retail Inventories, EIA Weekly Crude Oil Inventories, FOMC Interest Rates Decision, FOMC Statement, and Fed Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q4 Core PCE Prices, Preliminary Q4 GDP, Preliminary Q4 GDP Price Index, December Pending Home Sales, and Fed Balance Sheet. Finally, on Friday, December PCE Price Index, December PCE Price Index, December Personal Spending, Q4 Employment Cost Index, and Chicago PMI are reported.

In terms of earnings reports later this week, on Wednesday, AIT, ASML, ADP, AVT, EAT, GIB, GLW, DHR, EXP, FLEX, GD, GPI, HES, LII, MHO, MSCI, NDAQ, NSC, OTIS, PGR, SLGN, SF, TMUS, TEVA, VFC, AMP, AXS, CHRW, CP, CLS, CCS, CMPR, IBM, LRCX, LSTR, LVS, LEVI, LBRT, MTH, META, MEOH, MSFT, NFG, RJF, RHI, SEIC, SIGI, NOW, TER, TSLA, TTEK, URI, WDC, WHR, and WM report.  On Thursday, we hear from FLWS, AOS, MO, ABG, AVY, BBVA, BX, BFH, BC, CAH, CRS, CAT, CHKP, CI, CMCSA, CFR, DOV, DOW, IP, KEX, LHX, LAZ, MAN, MMC, MA, MBLY, MUR, NOK, NOC, OSK, PH, PHM, DGX, RCI, ROP, SNY, SCSC, SNDR, SHW, SIRI, LUV, STM, TMO, TSCO, TT, UPS, VLO, AAPL, AJG, TEAM, BKR, BOOT, CNI, CACC, DECK, EMN, GEN, HIG, INTC, KLAC, LPLA, OLN, PFSI, PPG, RMD, SKYW, X, V, and WY.  Finally, on Friday, ABBV, AON, ARCB, ALV, BSAC, BAH, BR, BEPC, BEP, CHTR, CVX, CHD, CL, ETN, XOM, BEN, GNTX, IMO, JHG, LYB, NVS, OMF, PSX, RVTY, VSTS, and GWW report.

So far this morning, GM, IVZ, JBLU, KMB, PII, BPOP, RTX, SAP, and SFY have all reported beats on both the revenue and earnings lines.  Meanwhile, ADNT, and XRX beat on revenue while missing on earnings. On the other side, LMT and RCL missed on revenue while beating on earnings.  However, BA missed on both the top and bottom lines.

With that background, markets look undecided so far this morning.  SPY is retesting its T-line (8ema).  However, both SPY and DIA are giving us Doji candles in premarket. For its part, QQQ gapped higher but has sold off in a black-body candle since then in the early session.  SPY and QQQ remain below their T-line (8ema).  With that said, the short-term trend is on the bearish side of mixed.  The mid-term downtrend is now a mess and can best be described as broad-range chop.  In the long-term all three are bullish.  In terms of extension, only QQQ is now extended below its T-line. Meanwhile, T2122 is back in the lower end of its overbought range.  So, both sides have room to work, but the Bulls have slightly more slack.  In terms of the 10 Big Dogs, six of the 10 are in the green with NVDA (+2.53%) far out in front on a rebound from Monday’s drubbing.  On the other side, AMZN (-0.57%) leads the four losers lower early.  As far as liquidity goes NVDA leads the way, having traded eight times as much dollar-volume as TSLA, which itself has traded twice as much as AAPL. 

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

See you in the trading room.

Ed

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Tech attempting to Recover

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US futures markets traded flat to slightly higher on Tuesday morning, with select tech attempting to recover from the previous day’s steep sell-off in AI-related companies. Nvidia rebounded by over 5% after experiencing a nearly 17% decline on Monday, which resulted in a market cap loss of almost $600 billion — the largest one-day drop for a U.S. company in history. Seema Shah, chief global strategist at Principal Asset Management, noted that while valuations remain extended and vulnerabilities were anticipated this year, developments like DeepSeek underscore the importance of diversifying beyond the “Mag Seven.”

European stocks experienced gains on Tuesday, rebounding from a global sell-off driven by concerns over a potential artificial intelligence breakthrough in China. Leading the charge was biopharmaceutical firm Sartorius, which surged 12% after announcing it had met profitability targets and maintained a “cautiously positive” outlook for 2025 in its preliminary full-year release. Meanwhile, British engineering firm Smiths Group disclosed it was addressing a hacking incident involving unauthorized access to its systems. The company is collaborating with cybersecurity experts to recover the targeted systems and assess any broader business impacts.

Asian markets showed mixed performance on Tuesday, influenced by various regional factors and holiday closures. While Taiwan, South Korean, and Chinese markets remained closed for holidays, Hong Kong’s Hang Seng Index ended the day with a modest gain of 0.14%, despite only trading for half a day due to the New Year holiday. In Japan, the Nikkei 225 fell by 1.39%, marking its second consecutive day in negative territory, while the Topix remained flat at 2,756.90. Conversely, India’s Nifty 50 and BSE Sensex indices saw gains of 0.97% and 1.07%, respectively, buoyed by the Reserve Bank of India’s announcement of plans to inject over $17 billion into the financial system. Meanwhile, Australia’s S&P/ASX 200 closed 0.12% lower, reflecting a cautious market sentiment.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include ADNT, BA, CVLT, GM, IVZ, JBLU, KMB, KNSA, LMT, PCAR, PII, BPOP, PGR, RCL, RTX, SAP, SYF, SYY, & XRX.

After the bell reports includeASH, AX, BXP, CB, FFIV, FCF, HLI, LC, LFUS, MANH, NXT, PKG, PFS, QRVO, RNR, RNST, RUSHA, SBUX, LRN, SYK, TRMK, UMBF, & VBTX.

News & Technicals’

Investors are shifting their focus to the upcoming corporate earnings reports this week. Starbucks and Boeing are set to release their earnings on Tuesday, drawing significant attention. Additionally, several key players from the “Magnificent Seven” group, including Meta Platforms, Microsoft, Tesla, and Apple, are scheduled to report later in the week. These reports are highly anticipated as they could provide crucial insights into the performance and future outlook of these major companies.

The Federal Reserve is set to begin its two-day policy meeting on Tuesday, with market expectations strongly indicating that interest rates will remain unchanged. According to CMEGroup’s FedWatch Tool, there is a 97% probability that the Fed will maintain the current rates. Investors are also eagerly awaiting the release of inflation data on Friday, which will provide further insights into the health of the U.S. economy and potentially influence future monetary policy decisions.

Chinese artificial intelligence startup DeepSeek is facing potential curbs from the U.S. government as it disrupts the U.S. AI ecosystem. Experts note that enforcing restrictions on an open-source technology like DeepSeek could be challenging. The startup’s rapid rise has cast doubt on the effectiveness of Washington’s efforts to limit China’s access to advanced technology due to national security concerns. On Monday, U.S. lawmakers called for measures to slow down DeepSeek, labeling it a “serious threat.” One proposed action is for the Commerce Department to create rules requiring tech giants like Apple and Google to remove DeepSeek’s app from their platforms, thereby restricting its availability in the U.S. market. However, removing the app from other platforms, such as Github, would be more difficult.

Boeing CEO Kelly Ortberg is set to address investors on Tuesday, who are eager for clarity on the company’s strategy to overcome ongoing manufacturing issues following its sixth consecutive annual loss. Preliminary results released by Boeing on Thursday indicate an expected fourth-quarter loss of $4 billion and revenue of $15.2 billion, falling short of analysts’ expectations. The company has reported charges across its commercial aircraft unit and its defense and space business, affecting various aircraft, including the Boeing 767, the KC-46 tanker, and the long-delayed pair of 747s designated to serve as the new Air Force One planes.

This morning, we have tech attempting to recover but be very watchful of price action because yesterday’s Deepseek news may have exposed the very high valuations in this sector.  Uncertainty is likely as we approach the tech giant earnings from MSFT and META on Wednesday directly after the FOMC decision.  Buckle up the next few days could prove to be very challenging.

Trade Wisely,

Doug

AI Stock Bubble Bursting?

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AI Stock Bubble Bursting

Stock futures plummeted on Monday amid fears of an AI stock bubble bursting, triggered by the emergence of Chinese startup DeepSeek, which reportedly developed a competitive AI model at a significantly lower cost. This led to substantial premarket losses for major tech companies: Nvidia fell by 12%, Broadcom by 13%, and AMD by 6%. Microsoft saw a 7% decline, while Palantir dropped 8%. Other tech giants, including Amazon and Meta Platforms, also experienced losses exceeding 4% each. Adding to the market’s anxiety, the Federal Reserve is set to hold its first policy meeting of the year on Wednesday, with Fed funds futures indicating a more than 99% probability that interest rates will remain unchanged, according to CMEGroup’s FedWatch Tool.

European markets started the week on a downbeat note, reflecting investor caution ahead of a busy earnings season and the European Central Bank’s upcoming interest rate decision. This negative sentiment was echoed in Asian markets and Wall Street futures, driven by weak tech performance. The rise of Chinese AI startup DeepSeek has raised concerns about the global leadership of established U.S. tech giants in the AI sector. Consequently, European chipmakers ASML and ASM International saw significant declines in their share prices, dropping 8.4% and 11.6%, respectively.

In January, China’s factory activity unexpectedly contracted, with the official purchasing managers’ index (PMI) falling to 49.1, below Reuters’ estimate of 50.1. Despite an 11% year-over-year increase in industrial profits in December, annual profits declined for the third consecutive year. In response to its struggling stock market, China introduced new initiatives to promote the growth of index investment products. Meanwhile, markets in Australia, Taiwan, and South Korea were closed for holidays. Hong Kong’s Hang Seng index saw a modest rise of 0.51%, while the mainland CSI 300 dipped by 0.41%. In Japan, the Nikkei 225 fell by 0.92%, but the Topix managed a slight gain of 0.26%.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include T, BOH, HOPE, & SOFI. After the bell reports include ARE, BRO, CR, ELS, GGG, NUE, PCH, SANM, SBCF, TRNS, WRB, & WAL.

News & Technicals’

U.S. technology firms experienced significant declines in premarket trading, driven by concerns over the competitive threat posed by Chinese startup DeepSeek. This company recently launched a free, open-source large-language model, developed in just two months for under $6 million, a fraction of the cost incurred by Western counterparts. Adding to the turmoil, DeepSeek’s new reasoning model reportedly outperformed OpenAI’s latest in several third-party tests. These developments have sparked a global sell-off and raised questions about the substantial investments big tech companies have been making in AI models and data centers.

On Sunday, the U.S. and Colombia averted a potential trade war after Colombia agreed to accept military aircraft carrying deported migrants. This decision came after U.S. President Donald Trump threatened tariffs and sanctions against Colombia for initially refusing these flights as part of his broader immigration crackdown. In a late Sunday statement, the White House confirmed that Colombia had accepted all of Trump’s terms, including the unrestricted acceptance of deported migrants on U.S. military aircraft, thus avoiding the imposition of the threatened penalties.

U.S. Treasury yields declined on Monday as investors anticipated the Federal Reserve’s upcoming meeting and awaited key inflation data. This week is expected to be eventful, with the Fed scheduled to announce its monetary policy decision on Wednesday. Newly inaugurated President Donald Trump has added pressure on the Fed, expressing his expectation for lower interest rates during a keynote address at the World Economic Forum in Davos, Switzerland, last week. Despite this, traders are pricing in a more than 99% probability that the Fed will keep interest rates unchanged, according to the CME Group’s FedWatch tool. In its December meeting, the Fed projected only two interest rate cuts for 2025.

Investors are eagerly awaiting the release of the personal consumption expenditures price index for December on Friday, the Federal Reserve’s preferred measure of inflation, which will provide new insights into the health of the U.S. economy. This week is also significant for earnings reports, with four of the “Magnificent Seven” companies—Meta, Apple, Microsoft, and Tesla—set to announce their results. Additionally, major companies like Starbucks, Boeing, General Motors, Visa, and Exxon will be reporting their earnings, making it a crucial period for market watchers.

This morning some big questions emerged about tech US dominance and one of those questions is the AI stock bubble bursting?  Clearly, we don’t know enough yet to answer that question, so the market is filled with uncertainty this morning.  I suspect with will only add to the volatility of the pending beg tech reports bringing a new level of scrutiny to tech stock valuations.  Try not to panic, watch for big point whipsaws that could be bullish or bearish as the market searches for clarity in the days ahead.

Trade Wisely,

Doug

China’s DeepSeek Slams Tech on AI Costs

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The market opened pretty much flat on Friday.  SPY opened dead flat, DIA opened down 0.12%, and QQQ opened up 0.01%.  From that point, all three major index ETFs ground sideways until 12:30 p.m. Then, SPY, DIA, and QQQ sold off slowly until a small bounce the last 10 minutes of the day.  This action gave us black-bodied Spinning Top type candles in all three.  QQQ printed what could be called a Dark Cloud Cover and DIA printed a Bearish Harami.  This happened on below average volume in all three major index ETFs.

On the day, seven of the 10 of the sectors were in the green with Communications Services (+0.81%) leading the way higher.  On the other side, Energy (-0.75%) was the laggard.  At the same time, SPY lost 0.29%, DIA lost 0.28%, and QQQ lost 0.57%.  Meanwhile, VXX fell just slightly to close at 41.74 while T2122 climbed even further into the middle of its overbought range, closing at 90.79.  On the bond side, 10-Year Bond yields fell back to 4.617% and Oil (WTI) was just on the red side of flat, closing at $74.56 per barrel. So, Friday was a nothing day that drifted lower in the afternoon. This is probably a clue that traders are waiting on the Fed decision on Wednesday after Trump demanded that the FOMC immediately lower interest rates.

The major economic news on Friday, included S&P Global Mfg. PMI, which came in higher than expected at 50.1 (compared to a 49.8 forecast and December 49.4 value).  At the same time, the S&P Global Services PMI was lower than expected at 52.8 (versus a 56.4 forecast and December’s 56.8 reading).  Combined, this gave us a S&P Global Composite PMI of 52.4, down from December’s 55.4 number.  Later, December Existing Home Sales were higher than predicted at 4.24 million (compared to the 4.19 million forecast and November’s 4.15 million).  At the same time, Michigan Consumer Sentiment came in down to 71.1 (versus a 73.2 forecast and December’s 74.0 value).  Meanwhile, Michigan Consumer Expectations were at 69.3 (compared to the 70.2 forecast and December’s 73.3 reading).  On the forward-looking survey, Michigan 1-Year Inflation Expectations were 3.3% (right on the 3.3% forecast and up sharply from December’s 2.8% expectations).  Looking out further, Michigan 5-Year Inflation Expectations were up, just not as much as expected at 3.2% (versus a 3.3% forecast and up from December’s 3.0%).

There was no Fed news Friday as they prepare for next week’s FOMC meeting.  (That meeting is expected to be a hold by most analysts and 99.5% of Fed Futures traders.)

Overnight, Asian markets were mixed again as some exchanges remained closed for Lunar New Year holiday.  India (-1.14%), Japan (-0.92%), and Shenzhen (-1.33%) led most of the region lower.  In Europe, markets are mostly red as of midday.  The CAC (-0.73%), DAX (-1.08%), and FTSE (-0.21%) lead the way lower in early afternoon trade.  In the Us, as of 7:30 a.m., Futures are pointing toward a big gap down with the QQQ (-3.92%), SPY (-2.33%), and DIA (-0.96%) after a Chinese startup (DeepSeek) said their open-source AI model had been developed in two months at a cost of just $6 million. (And reportedly outperforms US-based big-dollar models in at least some third-party tests). The report sparked massive concern about the market value of AI leadership into which major tech firms have (and are) poured hundreds of billions of dollars.  On the bond side, 10-Year Bond yields dropped sharply to 4.518% and Oil (WTI) is down three-quarters of a percent to $74.10 per barrel in early trading.

The major economic news scheduled for Monday is limited to December Building Permits (8 a.m.) and December New Home Sales (10 a.m.).  The major earnings reports scheduled for before the open include T, AND SOFI.  Then after the close, ARE, BRO, CR, GGG, NUE, SANM, WRB, and WAL. 

In economic news later this week, on Tuesday, we get Preliminary December Durable Goods Orders, January Conf. Board Consumer Confidence, and the API Weekly Crude Oil Stocks report.  Then Wednesday, Preliminary December Goods Trade Balance, Preliminary December Retail Inventories, EIA Weekly Crude Oil Inventories, FOMC Interest Rates Decision, FOMC Statement, and Fed Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q4 Core PCE Prices, Preliminary Q4 GDP, Preliminary Q4 GDP Price Index, December Pending Home Sales, and Fed Balance Sheet. Finally, on Friday, December PCE Price Index, December PCE Price Index, December Personal Spending, Q4 Employment Cost Index, and Chicago PMI are reported.

In terms of earnings reports later this week, on Tuesday, we hear from ADNT, BA, GM, IVZ, JBLU, KMB, LMT, PCAR, PII, BPOP, RCL, RTX, SYF, SYY, XRX, BXP, CB, FFIV, HLI, LFUS, LOGI, NXT, PKG, QRVO, RNR, SAP, SBUX, LRN, and SYK.  Then Wednesday, AIT, ASML, ADP, AVT, EAT, GIB, GLW, DHR, EXP, FLEX, GD, GPI, HES, LII, MHO, MSCI, NDAQ, NSC, OTIS, PGR, SLGN, SF, TMUS, TEVA, VFC, AMP, AXS, CHRW, CP, CLS, CCS, CMPR, IBM, LRCX, LSTR, LVS, LEVI, LBRT, MTH, META, MEOH, MSFT, NFG, RJF, RHI, SEIC, SIGI, NOW, TER, TSLA, TTEK, URI, WDC, WHR, and WM report.  On Thursday, we hear from FLWS, AOS, MO, ABG, AVY, BBVA, BX, BFH, BC, CAH, CRS, CAT, CHKP, CI, CMCSA, CFR, DOV, DOW, IP, KEX, LHX, LAZ, MAN, MMC, MA, MBLY, MUR, NOK, NOC, OSK, PH, PHM, DGX, RCI, ROP, SNY, SCSC, SNDR, SHW, SIRI, LUV, STM, TMO, TSCO, TT, UPS, VLO, AAPL, AJG, TEAM, BKR, BOOT, CNI, CACC, DECK, EMN, GEN, HIG, INTC, KLAC, LPLA, OLN, PFSI, PPG, RMD, SKYW, X, V, and WY.  Finally, on Friday, ABBV, AON, ARCB, ALV, BSAC, BAH, BR, BEPC, BEP, CHTR, CVX, CHD, CL, ETN, XOM, BEN, GNTX, IMO, JHG, LYB, NVS, OMF, PSX, RVTY, VSTS, and GWW report.

So far this morning, T, RYAAY, and SPFI have all reported beats on both the revenue and earnings lines.

With that background, the market looks mostly decided bearish early today.  All three major index ETFs opened the premarket with a big gap lower.  SPY and QQQ gapped down through to well below their T-line (8ema).  Since then, QQQ and SPY both charged even further down, but have come up well off their lows.  For its part, DIA gapped down to retest its T-line, but has since rallied to show up the only white-body pre-market candle of the three major index ETFs.  With that said, the short-term trend is on the bearish side of mixed.  The mid-term downtrend is now a mess and can best be described as broad-range chop.  In the long-term all three are bullish.  In terms of extension, QQQ is now extended below its T-line while SPY remains below but not stretched and DIA is above and not stretched. For its part, T2122 is back in the middle of its overbought range. So, we need more of a pause or pullback to keep the rally healthy (and it sure looks like we’re getting it).  In terms of the 10 Big Dogs, nine of the 10 are in the red with NVDA (-11.87%) far out in front leading the market lower.  On the other side, INTC (+0.34%) is the only green spot and is holding up much better than the others.  As far as liquidity goes NVDA also leads the way, having traded 5 times as much dollar-volume as TSLA, which itself has traded twice as much as MSFT.  In short, a tech blood-bath seems to be the order of the morning.

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

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

🎯 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

Global PMI and Michigan Surveys Top News

by

The large-cap index ETFs opened flat as QQQ opened down Thursday.  SPY opened 0.09% lower, DIA opened 0.04% higher, and QQQ gapped down 0.47% at the bell.  At that point SPY and QQQ traded sideways with a slight Bullish trend until 1:30 p.m. before trading sideways in a tight range until 3:45 p.m. Meanwhile, after that open, DIA rallied slowly, but steadily until 1:30 p.m. before also grinding sideways until 3:45 p.m. All three major index ETFS rallied hard the last 15 minutes to go out on their highs.  This action gave us large white-bodied, almost Marubozu candles in all three.  DIA even completed a Doji Continuation Pattern (Doji Sandwich).  SPY also printed a new all-time high and all-time high close.  This all happened on well-below-average volume in all three major index ETFs.

On the day, all 10 of the sectors were in the green with Healthcare (+1.21%) way, way out in front leading the way higher.  On the other side, Technology (+0.17%) was the laggard.  At the same time, SPY gained 0.55%, DIA gained 0.93%, and QQQ gained 0.21%.  Meanwhile, VXX fell just shy of two percent to close at 41.93 while T2122 climbed further back into the middle of its overbought range, closing at 88.38.  On the bond side, 10-Year Bond yields rose back to 4.646% and Oil (WTI) dropped another 1.67% to $74.19 per barrel.  So, Thursday saw a mixed open and a fair amount of indecision.  However, the main moves of the day were bullish (especially the strong rally the last 15 minutes). 

The major economic news on Thursday included Weekly Initial Jobless Claims, that came in just a tad above predictions at 223k (compared to a 221k forecast and the prior week’s 217k reading).  On the ongoing side, Weekly Continuing Jobless Claims were higher than expected at 1,899k (versus a 1,860k forecast and the previous week’s 1,853k value).  Later, EIA Weekly Crude Oil Inventories showed a lower-than-expected drawdown of 1.017 million barrels (compared to a 2.100-million-barrel drawdown and the prior week’s 1.962 million barrels).  After the close, the Fed Balance Sheet showed a tiny $2 billion reduction for the week, ending at $6.832 trillion.

There was no Fed news Thursday as they prepare for next week’s FOMC meeting.  (That meeting is expected to be a hold by most analysts and 99.5% of Fed Futures traders.)  However, President Trump spoke virtually to the World Economic Forum in Davos.  In typical Trump fashion, he speech included airing of a number of grievances and threats of tariffs.  He accused JPM and BAC (without evidence as usual) of limiting access to “conservatives” such as gunmakers.  Then in his narcissistic “I’m Emperor” way, he told global leaders, “With oil prices going down, I’ll demand that interest rates drop immediately, and likewise they should be dropping all over the world.” (One might note that despite falling the last few days, oil prices are higher now than they were from October through December.  In addition, the 20 and 50-month SMAs for oil are rising. However, Trump has never been one to let facts get in the way of his narrative.)

After the close, ASB, BANF, COLB, ISRG, SSB, and TXN all reported beats on both the revenue and earnings lines.  Meanwhile, EWBC and SLM beat on revenue while missing on earnings.  However, CSX missed on both the top and bottom lines.

Overnight, Asian markets were mixed with Hong Kong (+1.86%), Shenzhen (+1.14%), and Taiwan (+0.97%) leading the seven gaining exchanges.  Meanwhile, India (-0.49%) paced the fiver losing ones.  In Europe, we see just three spots of red among the 14 bourses are midday.  The CAC (+0.81%), DAX (+0.26%), and again lagging FTSE (-0.34%) lead the market in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing towards a modestly lower start to the morning.  The DIA implies a -0.27% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.02% open at this hour.  At the same time, 10-Year Bond yields are a 4.64% and Oil (WTI) is up 0.62% to $75.08 per barrel.

The major economic news scheduled for Friday, we get S&P Global Mfg. PMI, S&P Global Services PMI, and S&P Global Composite PMI (all at 9:45 a.m.), Dec. Existing Home Sales, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  The major earnings reports scheduled for before the open include AXP, ERIC, HCA, NEE, and VZ.  There are no reported scheduled for after the close Friday.

So far this morning, FCNCA, HCA, and VZ have reported beats on both the revenue and earnings lines.  Meanwhile, AXP missed on revenue while beating on earnings.  However, ERIC missed on both the top and bottom lines.

With that background, the market looks mostly undecided early today.  All three major index ETFs opened the premarket basically flat.  Since then, SPY hand QQQ have printed indecisive Doji candles.  For its part, the DIA has printed a large-body, small-wick, black candle since the start of the early session.  With that said, all three are still well above their T-line (8ema) and thus the short-term trend is bullish.  All three have also broken mid-term downtrend lines (running back to the mid-December all-time highs). However, they haven’t printed higher-highs and higher-lows to confirm an uptrend. So, downtrends are broken, but a new bullish trend hasn’t been established.  In the long-term all three are bullish.  In terms of extension, all three remain stretched above their T-line at this point.  For its part, T2122 is back in the middle of its overbought range. So, we need more of a pause or pullback to keep the rally healthy.  However, the market can remain over-extended longer than any of us can stay solvent betting on a reversal too soon.  In terms of the 10 Big Dogs, eight of the 10 are in the green with AMD (+0.86%) and TSLA (+0.85%) leading the market higher.  On the other side, NVDA (-0.37%) and INTC (-0.35%) are the only big dogs in the red and lag. As far as liquidity goes NVDA also leads the way, but just barely over TSLA.  Finally, remember it is Friday.  So, prepare your account for the weekend news cycle.

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

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

🎯 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

Jobless Claims and Trump Speech Today

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On Wednesday, markets popped at the open again.  SPY gapped up 0.49%, DIA gapped up 0.31%, and QQQ gapped up 0.92%.  From there, SPY and QQQ rallied slowly and steadily until noon while DIA bounced sideway along its open and inside its gap.  At noon, SPY and QQQ followed DIA sideways the rest of the day. This action gave us indecisive candles in all three major index ETFs.  SPY printed a gap-up, white-bodied, Inverted Hammer or possibly a Shooting Star type based on follow-through.  QQQ printed something similar, but with a larger body.  For its part, DIA gave us a gap-up, black-bodied Doji.  This all happened on below-average volume in all three major index ETFs.

On the day, eight of the 10 of the sectors were in the red with Technology (+1.46%) by far the strongest sector while Utilities (-1.87%) and Energy (-1.43%) led the market lower.  It is worth noting that nine of the 10 Big Dogs were in the green, led by NFLX (+9.69%), NVDA (+4.43%), and MSFT (+4.13%).  At the same time, SPY gained 0.55%, DIA gained 0.27%, and QQQ gained 1.28%.  Meanwhile, VXX rose 1.52% to close at 42.75 while T2122 dropped but stayed just inside the overbought range, closing at 80.43.  On the bond side, 10-Year Bond yields rose back to 4.607% and Oil (WTI) dropped another 0.51% to $75.44 per barrel.  So, Tuesday saw a gap higher, then the broader indices rallied through the morning only to follow the Mega-Cap DJIA sideways the rest of the day.  Once again, most of the gain was accomplished at the opening gap. 

The major economic news on Wednesday was limited to the US Leading Economic Index, which came in as expected at -0.1% (compared to a forecast of -0.1% and a November reading of +0.4%).  Then, after the close, the API Weekly Crude Oil Stocks report showed a 1.000-million-barrel inventory build (versus the prior week’s 2.600-million-barrel drawdown).

There was no Fed news Wednesday as they prepare for next week’s FOMC meeting.  (That meeting is expected to be a hold by most analysts and 99.5% of Fed Futures traders.)

After the close, AA, CACI, CADE, and DFS reported beats on both the revenue and earnings lines.  Meanwhile, KNX, PLXS, and STLD missed on revenue while beating on earnings.  However, KMI missed on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned toward the red side.  Thalina (-1.29%) and South Korea (-1.24%) paced the losses while Taiwan (+0.97%) and Japan (+0.79%) led the gainers.  In Europe, the bourses are leaning toward the green side with only three of 14 exchanges in the red at midday.  The CAC (+0.39%), DAX (+0.30%), and lagging FTSE (+0.01%) lead the region higher in early afternoon trade.  In the US., as off 7:45 a.m., Futures are pointing toward a mixed open.  DIA implies a +0.14% open, SPY is implying a -0.13% open, and QQQ implies a -0.50% open at this hour.  At the dame time, 10-Year Bond yields are up to 4.64% and Oil (WTI) is up a third of a percent to $75.71 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims and Weekly Continuing Jobless Claims (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (noon), and the Fed Balance Sheet (4:30 p.m.).  Trump also speaks at 11 a.m.  The major earnings reports scheduled for before the open include ALK, AAL, ELV, FCX, GE, HBAN, MKC, NTRS, ORI, TAL, and UNP. Then, after the close, COLB, CSX, EWBC, ISRG, and TXN report.

In economic news later this week, on Friday, we get S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Dec. Existing Home Sales, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, Friday, we hear from AXP, ERIC, HCA, NEE, and VZ.

So far this morning, AAL, ELV, GE, MKC, NTRS, TAL, and TCBI have all reported beats on both the revenue and earnings lines.  Meanwhile, HZO and ORI missed on revenue while beating on earnings.  On the other side, SDVKY and VLY beat on revenue while missing on earnings. 

With that background, it looks like the market is undecided early today.  All three major index ETFs opened the premarket in one direction and have traded the other direction since that start.  SPY and DIA are giving us white body candles while QQQ is now showing a black-body candle. With that said, all three are well above their T-line (8ema) and thus the short-term trend is bullish.  All three have also broken mid-term downtrend lines (running back to the mid-December all-time highs). However, they haven’t printed higher-highs and higher-lows to confirm an uptrend. So, downtrends are broken, but a new bullish trend hasn’t been established.  In the long-term all three are bullish.  In terms of extension, all three are now stretched above their T-line at this point.  For its part, T2122 has fallen but remains in the bottom of its overbought range. So, we need more of a pause or pullback to keep the rally healthy.  However, the market can remain over-extended longer than any of us can stay solvent betting on a reversal too soon.  In terms of the 10 Big Dogs, six of the 10 are in the red with NVDA (-1.81%) well out in front leading the QQQ lower.  On the other side, META (+0.53%) is holding up better than the others.  Related to volume, NVDA also leads the way, having traded 1.5 times as much dollar-volume as TSLA (-0.44%), which itself has traded 5 times as much as AAPL (+0.16%) and MSFT (-0.66%). 

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

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

🎯 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

Approaching New Record Highs

by
Approaching New Record Highs

Stock futures remained relatively unchanged early Thursday, with Wall Street approaching new record highs. This stability in futures followed a Wednesday session where the S&P 500 reached an intraday record high. The stock market’s positive momentum is being driven by optimism surrounding potential tax cuts and deregulation under President Donald Trump, along with indications of robust economic growth. Investors are also anticipating updated economic data, with initial jobless claims set to be released before the market opens, followed by Kansas City Fed manufacturing data later in the day.

European stocks opened with mixed results on Thursday, following a week of positive momentum. Sportswear brand Puma experienced a significant drop, with shares falling by 19% in early trading after missing full-year 2024 profit expectations and announcing cost-cutting measures. This contrasted sharply with competitor Adidas, which reported 19% growth in fourth-quarter top-line figures earlier in the week.

Asia-Pacific markets showed mixed performance on Thursday. Hong Kong’s Hang Seng index declined by 0.65%, while China’s CSI 300 saw a gain of 1.01%. To support the struggling stock market, Chinese financial regulators urged large state-owned mutual funds and insurers to increase their share purchases. Australia’s S&P/ASX 200 rose by 0.61%, whereas South Korea’s Kospi and Kosdaq fell by 1.24% and 1.13%, respectively. Japan’s Nikkei 225 and Topix indices both experienced gains, with the Nikkei 225 up by 0.79% and the Topix by 0.53%. Meanwhile, the Bank of Japan is holding a policy meeting, where Governor Kazuo Ueda has indicated a potential rate hike.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ALK, AAL, AUB, BANC, ELV, FBP, FSV, FCX, CATX, GE, MCK, NTRS, PPBI, RCI, TECK, TCBI, UNP, VLY, & WNS. After the bell reports include ASB, COLB, CSX, CUBI, EWBC, FFBC, GBCI, ISRG, SLM, SSB, & TXN.

News & Technicals’

Warner Bros. Discovery’s CNN is set to lay off hundreds of employees on Thursday as it shifts its focus towards a global digital audience. This move comes as CNN restructures its linear TV lineup and expands its digital subscription offerings. The layoffs aim to reduce production costs and streamline teams, according to sources who requested anonymity. Similarly, NBC News is also planning job cuts later this week, although the exact number remains unclear. Both organizations delayed these decisions until after the U.S. presidential inauguration. The media landscape is evolving, with fewer viewers tuning into linear TV and more people consuming news via streaming services and social media.

Microsoft’s head of business development, Chris Young, is resigning after approximately four years in the role, as disclosed in a regulatory filing on Wednesday. Young played a key role in orchestrating Microsoft’s acquisition of Activision Blizzard and was a member of the senior leadership team, reporting directly to CEO Satya Nadella. Despite no successor being named yet, Young’s departure marks a significant change in the company’s leadership. In the 2024 fiscal year, he was one of Microsoft’s highest-paid employees, earning total compensation of $12 million.

In the third quarter of 2024, the proportion of active credit card holders making only minimum payments reached a record high of 10.75%, the highest since data collection began in 2012. Additionally, the share of cardholders more than 30 days past due increased to 3.52%, up from 3.21%, marking a rise of over 10%. Despite this uptick in delinquency rates, the current level remains significantly lower than the 6.8% peak observed during the 2008-09 financial crisis, suggesting that the situation has not yet reached critical levels.

The U.K. Competition and Markets Authority (CMA) has announced dual investigations into Apple and Google to determine if they possess “strategic market status” within their mobile ecosystems. These ecosystems encompass the operating systems, app stores, and smartphone-based browsers that form the foundation of the two tech giants’ software. The probes are being conducted under the new Digital Markets, Competition and Consumers Act (DMCC), a U.K. law aimed at curbing anti-competitive practices in digital markets.

Though we are approaching new record highs and market enthusiasm is raging, keep in mind the extension that very high valuations in stock prices. If selling were to begin, we could easily see some quick piling on as traders rush to the door to protect profits.  That said, with record highs so close I would not rule out a strong push to get the new high for the record book before a pull back begins.  Plan your trading risk carefully.

Trade Wisely,

Doug

Strong Earnings and No Tariffs Yet Spur Bulls

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Markets jumped higher on Tuesday.  SPY gapped up 0.52%, DIA gapped up 0.41%, and QQQ gapped up 0.54%.  From there was saw a little divergence.  QQQ sold off and recrossed its gap within the first 30 minutes, reaching the lows by 10:20 a.m. At that point, it rallied until 1 p.m. before drifting lower until 3 p.m. and grinding sideways into the close.  Meanwhile, SPY sold off much more mildly only getting back into the middle of its gap by 10:15 a.m. before starting a long, steady rally until 1:20 p.m.  From there it traded sideways all afternoon.  For its part, unlike the other two, DIA rallied from the open in a slow, steady climb the tempered during the afternoon but continued higher the last 90 minutes.  This action gave us a gap-up, white-bodied Hanging Man type candle.  DIA printed a gap-up, white-bodied large candle (which could be said to be part of a “Trader’s Best Friend” pattern).  However, QQQ printed a gap-up, black-bodied, long-legged Doji. 

On the day, all 10 of the sectors were in the green with Industrials (+2.14%) and Healthcare (+2.03%) leading the charge higher.  On the other side, Energy (+0.03%) was by far the laggard sector.  At the same time, SPY gained 0.92%, DIA gained 1.24%, and QQQ gained 0.59%.  Meanwhile, VXX dropped another 4.21% to close at 42.11 while T2122 climbed even higher into the top half of its overbought range, closing at 95.85.  On the bond side, 10-Year Bond yields plummeted to 4.564% and Oil (WTI) dropped another 2.30% to $76.09 per barrel.  (Much of the last two numbers can be attributed to a HUGE move lower by the US Dollar.)  So, Monday saw the Bulls gap markets higher, show some uncertainty, but then rally most of the day.  It appeared as if traders may have been reassured by the Trump administration holding off on tariffs so far and his initial moves to prop up the already strong oil and gas sectors while bypassing climate and environmental policies/laws.  This all happened on well-below-average volume in all three major index ETFs.   

There was no major economic news on Tuesday.

There was no Fed news on Tuesday either.

After the close, COF, HWC, IBKR, NFLX, STX, UAL, WTFC, and ZION all reported beats on both the revenue and earnings lines.

Overnight, Asian markets were mostly green.  Hong Kong (-.163%) was by far the biggest of the four losing exchanges.  Meanwhile, Japan (+1.58%), South Korea (+1.15%), and Taiwan (+0.97%) led the gainers.  In Europe, with two small exchange exceptions we see green across the board at midday.  The CAC (+1.24%), DAX (+1.32%), and lagging FTSE (+0.29%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  DIA implies a +0.38% open, the SPY is implying a +0.47% open, and QQQ implies a +0.87% open at this hour.  At the same time, 10-Year Bond Yields are at 4.578% and Oil (WTI) is up two-tenths of a percent to $75.99 per barrel in early trading.

The major economic news scheduled for Wednesday is limited to the US Leading Economic Index (10 a.m.) and the API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports scheduled for before the open include ABT, ALLY, APH, CMA, GEV, HAL, HDB, JNJ, PG, TEL, TDY, TXT, and TRV. Then, after the close, AA, CACI, DFS, KMI, KNX, PLXS, and STLD report.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, EIA Weekly Crude Oil Inventories, and the Fed Balance Sheet are reported.  Finally, on Friday, we get S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Dec. Existing Home Sales, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, Thursday, ALK, AAL, ELV, FCX, GE, HBAN, MKC, NTRS, ORI, TAL, UNP, COLB, CSX, EWBC, ISRG, and TXN report.  Finally, on Friday, we hear from AXP, ERIC, HCA, NEE, and VZ.

So far this morning, ALLY, BKU, CBSH, FNB, HDB, PG, and TDY have all reported beats on both the revenue and earnings lines.  Meanwhile, ABT, HAL, JNJ, TEL, TXT and TRV all missed on revenue while beating on earnings.  On the other side, CMA beat on revenue while missing on earnings.  However, GEV missed on both the top and bottom lines.

With that background, it looks like the Bulls want to run this morning.  All three major index ETFs gapped up to start the premarket and all three have given us a white-body candle since that point.  SPY and DIA are printing mostly-body candles while QQQ is giving us a small Spinning Top type candle so far in the early session.  With that said, all three are well above their T-line (8ema) and thus the short-term trend is bullish.  All three have also broken mid-term downtrend lines (running back to the mid-December all-time highs). However, they have not printed the higher-highs and higher-lows to confirm an uptrend (just continually gapping higher).  So, downtrends are broken, but a new bullish trend hasn’t been established.  In the long-term all three are bullish.  In terms of extension, all three are now stretched above their T-line at this point.  For its part, T2122 is also in the top part of its overbought range. So, we are in need of a pause or pullback to keep the rally healthy.  However, the market can remain over-extended longer than any of us can stay solvent betting on a reversal too soon.  In terms of the 10 Big Dogs, seven of the 10 are in the green with NFLX (+14.45%) way, way out in front due to last night’s earnings beat.  Meanwhile, TSLA (-1.16%) is by far the laggard.  Related to volume, NVDA (+3.02%) is leading the way, having traded 1.5  times as much dollar-volume as TSLA, which itself has traded 1.5 times as much as NFLX. 

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

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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🎯 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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Netflix Impressive Results

by
Netflix Impressive Results

S&P 500 and Nasdaq-100 futures rose on Wednesday, driven by Netflix impressive results. The earnings season continues with anticipated reports from Procter & Gamble and Johnson & Johnson, while Halliburton and GE Vernova are also set to release their results. Additionally, former President Trump announced a significant joint venture named “Stargate” with OpenAI, Oracle, and Softbank, aiming to invest at least $500 billion in AI infrastructure in the United States.

European stocks opened higher on Wednesday, reflecting the positive sentiment seen in global markets since the start of the week. The U.K.’s FTSE index edged up by 0.1%, Germany’s DAX increased by 0.7%, and France’s CAC 40 gained 0.1%. The pan-European Stoxx 600 also rose by 0.3%. Notably, Adidas shares surged by 5.96% by 8:51 a.m. London time, following the company’s announcement of a 19% sales growth in its fourth-quarter results on Tuesday. Meanwhile, the U.K. reported borrowing £17.8 billion ($21.9 billion) in December, marking an increase of £10.1 billion compared to December 2023 and the highest budget deficit recorded for December in four years.

Asia-Pacific markets experienced a mixed trading session on Wednesday. Hong Kong’s Hang Seng index saw a significant drop of 1.72%, while mainland China’s CSI 300 fell by 0.93%. In contrast, India’s Nifty 50 managed a slight rebound, gaining 0.28% after hitting its lowest point since last June. Australia’s S&P/ASX 200 rose by 0.33%, and Japan’s Nikkei 225 and Topix indices increased by 1.58% and 0.87%, respectively. South Korea’s Kospi and Kosdaq also performed well, with the Kospi adding 1.15% and the Kosdaq rising by 0.86%. Additionally, Korean companies are contemplating relocating their production plants from Mexico to the U.S. in response to Trump’s protectionist policies.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include ABT, ALLY, APH, BKU, CMA, CBSH, FNB, GEV, HAL, JNJ, OFG, PG, TEL, TXT, TRV & UCB. After the bell reports include AA, CACI, CADE, CP, CATY, CLS, DFS, HXL, KMI, KMX, NBHC, PLXS, RLI, SLG, STLD, WCN, & WSBC.

News & Technicals’

Kevin O’Leary expressed interest in a proposal by Trump for U.S. owners to acquire a 50% stake in a platform, though he noted that current laws make such a deal unlikely. On Tuesday, Trump mentioned he would consider the possibility of Tesla CEO Elon Musk or Oracle Chairman Larry Ellison purchasing TikTok.

The president of the European Central Bank, Christine Lagarde, emphasized the need for Europe to be prepared for potential trade tariffs from newly inaugurated U.S. President Donald Trump. In a statement to CNBC on Wednesday, Lagarde noted that Trump had criticized the EU for being “very, very bad” to the U.S. and warned of impending tariffs. However, she also acknowledged that Trump’s decision not to impose blanket tariffs on his first day in office was a “very smart approach.”

President Donald Trump announced that his team is considering a 10% tariff on China, which could be implemented as early as February 1. Speaking to reporters at the White House on Tuesday evening, Trump cited China’s role in sending fentanyl to Mexico and Canada as the reason for the proposed tariff. He also mentioned that he had a phone conversation with Chinese President Xi Jinping on Friday, discussing fentanyl and trade. According to the Chinese readout, Xi emphasized the importance of cooperation and described the economic relationship between the two countries as mutually beneficial.

Stripe has confirmed the layoff of 300 employees, which accounts for approximately 3.5% of its workforce, primarily affecting the product, engineering, and operations departments. Despite these cuts, the payments company, valued at around $70 billion in private markets, plans to expand its headcount by 10,000 by the end of the year, representing a 17% increase. According to a memo from Chief People Officer Rob McIntosh, Stripe is “not slowing down hiring.” Business Insider initially reported on the layoffs and the memo.

Emotions are high and chase is on with the Netflix impressive results engaging the fear of missing out from traders.  Remember to follow your rules, avoiding already very extended stocks and plan carefully to protect current gains should a pullback begin.  Exuberance is contagious so the rally may continue but also remember it’s the last one in door that gets the worst of the punishment.

Trade Wisely,

Doug