Thursday saw mixed to start the day.  The SPY gapped up 0.09%, DIA opened 0.16% higher, and QQQ gapped down 0.47%.  At that point, all three major index ETFs put in a morning rally that hit the highs of the day at about 11:30 a.m. This was followed by a modest selloff that lasted right into the close.  That action gave all three a large high wick on a small black body.  This could be seen as Gravestone Doji in the DIA and QQQ as well as an Inverted Hammer in the SPY.  The DIA also retested and failed its T-line (8ema).  This all happened on average volume in the DIA and below-average volume in the SPY and QQQ.

On the day, seven of the 10 sectors were in the red with Energy (-1.35%) far out front leading the market lower while Healthcare (+0.67%) was by far the strongest sector.  At the same time, the SPY lost 0.31%, DIA gained 0.11%, and QQQ lost 0.51%.  The VXX was just on the red side of flat to close at 16.08 and T2122 fell a bit but remains in its midrange at 36.52. 10-year bond yields rose again to 3.999% and Oil (WTI) dropped 0.43% to close at $72.39 per barrel.  So, on the day, we saw a divergence at the open with the high-tech QQQ gapping down while the two large-cap index ETFs opened on the green side of flat.  However, after that, the three acted in lock-step the rest of the day.  So, the bullish trendlines remain broken in the DIA, SPY, and QQQ.  However, the DIA is still basically consolidating while the SPY and especially QQQ continue their pullback.

The economic news on Thursday included the December ADP Nonfarm Employment Change which came in much stronger than expected at +164k (compared to a forecast of +115k and the revised November number of +101k).  This was the largest gain since August.  Later, Weekly Initial Jobless Claims were lower than predicted at 202k (versus a forecast of 216k and the previous week’s 220k).  At the same time, Weekly Continuing Jobless Claims were also down to 1,855k (compared to a forecast of 1,883k and the prior week’s 1,886k reading).  Later, Dec. S&P Global Services PMI came in better than anticipated at 51.4 (versus a 51.3 forecast and the prior 50.8 value).  At the same time, Dec. S&P Global Composite PMI was slightly lower than expected at 50.9 (compared to a 51.0 forecast but still stronger than the November 50.7 value).  Later, EIA Weekly Crude Oil Inventories showed a larger than predicted drawdown of 5.503 million barrels (versus a forecast calling for a 3.200-million-barrel drawdown but still not as much as last week’s 7.114-million-barrel drawdown).  Finally, after the close, the Fed Balance Sheet came in $32 billion lower than the prior week at $7.681 trillion (compared to the prior week’s $7.713 trillion.

In stock news, MBLY (who sells semiconductors into the auto industry) said Thursday that it has seen a pullback in orders from customers who are clearing excess inventory.  This sent both MBLY and competitors (NXPI, TXN, and WOLF) crashing lower as well as raising concerns about auto sales.  At the same time, F posted its best US sales numbers since 2020, saying that sales rose 7.1% to 1.99 million units in 2023.  Sales of F electric vehicles also rose 18% and now makeup 17% of total sales.  Later, retail analysts reported that AMZN shored up absolute market dominance for the Christmas season.  The data shows AMZN had 21% of global order volume for the Thanksgiving through Black Friday period, but jacked that up to an amazing 29% of global orders for all of Xmas season.  Consumer Intelligence Research noted that AMZN’s ability to hit two-day delivery deadlines seemed to be a critical factor in winning the huge order volumes.  Later, major European retailer Carrefour halted the sale of PEP products as the two companies fight over price hikes.  Elsewhere, DIS subsidiary ESPN signed a $920 million, eight-year deal for an extension of the network’s exclusive media rights to 40 NCAA championships (including the lucrative college basketball postseason).  This was triple the average annual amount ESPN had paid for the same rights in the past.  Later, the CEO of PSX told an energy industry conference that the company would sell $3 billion worth of “non-core” assets in 2024.  He gave no timelines but said discussions were ongoing.  After the close, XOM signaled it will take a big hit in Q4 as it books a $2.5 billion write-down related to wells abandoned in CA as well as a hit from lower energy prices.  (XOM reports February 2nd.) 

In stock government, legal, and regulatory news, on Thursday the US Department of Commerce announced it will award MCHP $162 million in grants to increase the US production of microcontroller chips which are key components in both consumer and defense industries.  Later, Consumer Reports issued a public letter to the FDA calling for strongly increased regulation and inspection.  The consumer rights group said that 84 of 85 supermarkets and fast food restaurants it has recently tested had foods that contain plastics and in fact, 79% of the food tested contained these phthalates or BPA chemicals.  (These chemicals are known to disrupt hormone production and regulation as well as pose a wide range of health risks.)  At the same time, the SEC ruled that AAPL and DIS cannot avoid shareholder votes about the company’s use of AI tech.  These board proposals were made by labor groups with the measures, if passed, asking for an accounting of the company’s use of AI technologies.  (Both companies had argued the votes could be left off board agendas because they related to “normal business operations.”  The SEC disagreed.)  The EEOC filed a motion asking a federal judge to reject TSLA’s motion to pause a lawsuit alleging widespread racial bias at the company’s Fremont CA plant.  (TSLA had filed a motion asking that the suit be indefinitely paused until after two other lawsuits are settled.)  After the close, the NRLB ruled that GOOGL must bargain with a union representing contract workers at its YouTube Music unit.

Overnight, Asian markets were mostly in the red.  Shenzhen (-1.07%), Shanghai (-0.85%), and Hong Kong (-0.66%) led the region lower.  Meanwhile, in Europe, we see red across the board at midday.  The CAC (-1.08%), DAX (-0.79%), and FTSE (-0.85%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., the Futures are pointing toward a modestly down start to the day (ahead of data).  The DIA implies a -0.18% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.29% open at this hour.  At the same time, 10-year bond yields are back above four percent at 4.036% and Oil (WTI) is up 0.82% to $72.81 per barrel in early trading.

The major economic news scheduled for Friday includes Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Private Nonfarm Payrolls, Dec. Participation Rate, and Dec. Unemployment Rate (all at 8:30 a.m.), Nov. Factory Orders, Dec. ISM Non-Mfg. Employment, and Dec. ISM Non-Mfg. PMI (all at 10 a.m.).  The major earnings reports scheduled for the day are limited to GBX and STZ before the open.  There are no major reports scheduled for after the close. 

In miscellaneous news, Reuters reported that short-sellers lost $195 billion in 2023 according to research by S3 Partners research.  The report specifically noted huge losses in TLSA, NVDA, AAPL, META, MSFT, and AMZN as the largest sources of pain for the shorts.  Elsewhere, Reuters reported that the Biden Administration has bought 13.82 million barrels of domestic oil to refill the strategic petroleum reserve.  They have also accelerated the return of 4 million barrels that had been loaned to oil companies.  (The SPR holds 354 million barrels and 180 million were released by the administration in 2022 at an average price of $95/barrel.  So far, the buybacks are below the target price of $79/barrel and the buyback fund has enough to purchase another 46.5 million barrels even at that price which is higher than market.)  The latest bid, put out Wed., was for another 3 million barrels for April delivery.  Meanwhile, ADBE Analytics (retail analysts) issued a report Thursday saying that US shopper spending rose 4.9% for the holiday season.  The report cited an increase in “Buy Now Pay Later” options and deep discounts on electronics and apparel as key factors in the increase.

So far this morning, STZ reported beats on both the revenue and earnings lines.  GBX had be scheduled to report at 6 a.m. but has not done so yet.

With that background, it looks like the Bears are anticipating disappointing December Jobs Numbers this morning (or perhaps anticipating strong jobs numbers which they think will cause the Fed to hold off on the start of rate cuts). Either way, the major index premarkets all opened with a modest gap lower. Since then, all three major index ETFs have given us smaller but black-bodied candles in the early session. So, the Bears remain in control of the short-term trend and the longer-term daily uptrend lines remain broken. However, no new lower-high has presented itself in any of the three major index ETFs. (We are technically not yet in a downtrend.) In terms of extension, the two large-cap index ETFs are not too far from their T-line (8ema), but the QQQ is getting stretched below its T-line. At the same time, the T2122 indicator remains in its mid-range. So, both the Bulls and Bears do both have room to run if they can gather the momentum to do it. Continue to keep an eye on the Tech Big Dogs. If we are seeing a rotation out of those names (which have dragged markets along for a year or more), it will be hard for markets to do anything except retreat. Finally, remember this is Friday…payday. So, prepare your account for the weekend news cycles and don’t forget to pay yourself.

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 made most of their movement at the open Wednesday.  SPY gapped down 0.44%, DIA gapped down 0.41%, and QQQ gapped down 0.65%.  After that, all three major index ETFs traded in a tight range around the open the rest of the day.  The biggest move was a selloff the last hour that took all three out near their lows.  This action gave us what I would call large-body, black-body, Spinning Top candles with small upper and lower wicks.  DIA also crossed below its T-line (8ema) following the SPY and QQQ in that pullback.  This happened on greater-than-average volume in the DIA and a bit less-than-average in the SPY and QQQ.

On the day, eight of the 10 sectors were in the red with Consumer Cyclical (-1.85%) and Industrials (-1.80%) out front leading the way lower while Energy (+1.35%) was by far the strongest sector.  At the same time, the SPY lost 0.82%, DIA lost 0.76%, and QQQ lost 1.06%.  The VXX rose 3.74% to close at 16.10 and T2122 dropped but still remained in its midrange at 38.24.  10-year bond yields rose again to 3.922% and Oil (WTI) spiked 3.38% to close at $72.79 per barrel.  So, on the day, most of the move was made at the open with the Bears gapping all the major indices lower.  However, from there it was a sideways wobble in a tight range with a selloff the last hour taking us out near the lows.  The Bullish trendlines have now been breached but SPY sits at a potential support level and QQQ has the furthest to fall before hitting potential support at about 1.35%.

The economic news on Wednesday included December ISM Mfg. Employment, which came in significantly better than expected at 48.1 (compared to a forecast of 46.5 and the November reading of 45.8).  At the same time, December ISM Mfg. PMI also came in better than anticipated at 47.4 (versus a 47.1 forecast and November’s 46.7 value).  Meanwhile, December ISM Manufacturing Prices came in much lower than predicted at 45.2 (compared to a forecast of 47.5 and far better than November’s 49.9 value).  On the job opening front, November JOLTS Job Openings were down at 8.790 million (versus a forecast of 8.850 million and the October reading of 8.852 million).  That was the lowest number of job openings since early 2021, not at a level of 1.4 openings per unemployed person.  (The high was a 2:1 ratio in 2022.)  Then, after the close, the API Weekly Crude Oil Stocks report showed a bigger-than-expected drawdown of 7.418 million barrels (compared to a forecasted drawdown of 2.967 million barrels and the prior week’s inventory build of 1.837 million barrels).

However, probably the most notable economic news was the release of the FOMC December Meeting Minutes.  Those minutes showed that Fed members cited lower inflation risks and foresaw coming rate cuts.  However, the start of and the path those cuts will take was very mixed and uncertain among members.  Among the notable sections were “Participants pointed to the decline in inflation seen during 2023, noting the recent shift down in six-month inflation readings in particular.”  For the first time since mid-2022, the minutes DID NOT describe inflation as “highly unacceptable” and, in fact, said the risk of renewed inflation was “diminished.”  The minutes said “a few” participants saw the potential need for the Fed to switch in its tradeoff between the goal of controlling inflation and maintaining high rates of employment.  Finally, the minutes noted “an unusually elevated degree of uncertainty” about the economic outlook saying that additional rate hikes are possible as are the beginning of rate cuts.  This included some meeting participants floating the idea of slowing Fed balance sheet reductions, as the minutes said “several participants remarked that the Committee’s balance sheet plans indicated that it would slow and then stop the decline in the size of the balance sheet.”

In stock news, XRX announced it will cut 15% of its workforce as part of its attempt to move to a new business model and organizational structure.  At the same time, TM announced its vehicle sales rose 6.6% during 2023 with strong demand for affordable sedans and SUVs.  Drilling down, TM said electric vehicle sales rose 31% from the prior year, now making up 29.2% of all sales.  Later, Bloomberg reported rumors that CI is close to selling its Medicare Advantage business for between $3 billion and $4 billion (that unit generated $7.9 billion in revenue in 2022).  Elsewhere, INTC said it would be spinning off its AI-related business into a separate company with the help of DBRG and other investors.  At the same time, Reuters reported that AIG is the lead insurer on a $130 million “all risks” policy for the A350 plane that crashed in Tokyo on Tuesday.  Later, GM announced it would offer $7,500 in incentives for its electric vehicles after the company lost $7,500 in government tax incentives because the company sources batteries and other parts from China.  Meanwhile, F said it would increase the price of its lowest-priced electric vehicles while cutting the price of its premium EV models by as much as $7,000.  At the same time, EQNR and BP announced they have terminated an agreement to sell electricity to NY state from their proposed offshore wind farm.  The companies cited higher borrowing costs and supply chain issues.  Later, Bloomberg reported that GOLD has been speaking to the major investors of FQVLF to determine if there is interest in a takeover.

In stock government, legal, and regulatory news, the Dept. of Transportation reported that US airline flight cancellations fell to the lowest rate in more than a decade.  Less than 1.3% of 16.3 million flights were canceled in 2023.  At the same time, AAL, DAL, LUV, and UAL achieved a December on-time arrival rate between 83.7% and 99.6%.  Later, Reuters reported that GOOGL and META appear to have settled their fines with the Russian government.  Previous fines are no longer listed by the Russian government but the companies did not confirm or deny settlement.  At the same time, the NHTSA announced that F had agreed to recall just under 113k F-150 trucks over safety concerns related to a rear axle hub bolt.  Elsewhere, AAPL agreed to settle a lawsuit alleging the company knowingly let scammers use its gift cards while keeping 30% of the proceeds of the fraud.  The settlement terms were not released and must still be approved by a federal judge.

After the close, the only major earnings report was from CALM, which missed on both the revenue and earnings lines.

Overnight, Asian markets leaned to the downside with seven of the 12 exchanges in the red.  Shenzhen (-1.24%), Singapore (-0.79%), and South Korea (-0.78%) led the losses while Malaysia (+1.02%) and India (+0.66%) paced the gainers.  In Europe, the bourses are leaning to the green side at midday.  Eleven of the 15 exchanges in that region are in the green with the CAC (+0.04%), DAX (-0.04%), and FTSE (+0.06%) leading on volume.  However, many of the smaller European exchanges are up more than a percent in early afternoon trade.  In the US, as of 7:30 a.m., Futures are mixed and basically flat.  The DIA implies a +0.11% open, the SPY is implying a -0.04% open, and the QQQ implies a -0.16% open at this hour.  At the same time, 10-year bond yields are up to 3.963% again and Oil (WTI) is up 1.00% to $73.43 per barrel in early trading.

The major economic news scheduled for Thursday includes the Dec. ADP Nonfarm Employment Change (8:15 a.m.), Weekly Initial Jobless Claims and Weekly Continuing Jobless Claims (both at 8:30 a.m.), Dec. S&P Global Services PMI and Dec. S&P Global Composite PMI (both at 9:45 a.m.), EIA Weekly Crude Oil Inventories (11 a.m.), and the Fed Balance Sheet (4:30 p.m.)  The major earnings reports scheduled for the day are limited to CAG, LW, RDUS, RPM, and WBA before the open.  There are no major reports scheduled for after the close. 

In economic news later this week, on Friday we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Private Nonfarm Payrolls, Dec. Participation Rate, Dec. Unemployment Rate, Nov. Factory Orders, Dec. ISM Non-Mfg. Employment, and Dec. ISM Non-Mfg. PMI.

In terms of earnings reports later this week, on Friday, GBX and STZ report.

In shipping news, Reuters reported that ocean freight rates are surging after weekend attacks and US Navy retaliation in the Red Sea.  The Asia-to-North America rate has more than doubled to $4,000 per 40-foot container and Asia-to-Mediterranean prices have risen to $5,175 per container.  (Some carriers announced $6,000 per container Asia-to-Mediterranean rates as of mid-month.)  However, it should be noted that these rates are still well below the pandemic-era rates. In addition, shipment time has risen from 7 to 20 days as ships have to reroute around Africa rather than using the shorter “Suez Canal and Red Sea” route.  WMT and AMZN have already reported product delays and inventory issues at the distribution center level.  (30% of East Coast import freight normally travels the Suez Canal route.) 

In miscellaneous news, oil prices rose Wednesday after supply concerns surfaced following the closure of Libya’s largest oilfield.  (This oil does not serve North America, but its removal impacted global oil prices, which rippled through to US oil prices.)  Elsewhere, Reuters reported that US bankruptcy filings rose 18% in 2023 on the back of higher interest rates.  However, it should be noted that bankruptcies are still far, far below the level seen PRIOR to the pandemic.  (For example, in 2019 there were 757,816 bankruptcies.  The 2023 number was 445,186 bankruptcies.)  So, despite the political rhetoric and protestations of the banking industry, the number of insolvencies is DOWN more than 41% from 2019.

So far this morning, CAG and WBA have reported beats on both the revenue and earnings lines.  At the same time, RPM reported misses on both the top and bottom lines.

With that background, it looks like markets are undecided so far this morning. The premarkets opened with a modest gap higher in all three major index ETFs. However, since then the trading has been indecisive with both large-cap index ETFs maintaining white-bodied candles while the QQQ and leans indecisively toward a black-bodied candle. The DIA is attempting a retest of its T-line (8ema) from below in the early session. So, while the Bulls hold on to the longer-term daily trend, we see the Bears in control of the shorter-term trend and so far today markets are undecided or waiting on news. In terms of extension, none of the three major index ETFs are truly extended but QQQ is the most extended of the group, all below their T-lines. At the same time, the T2122 indicator remains in its mid-range. So, both the Bulls and Bears continue to have room to run if they gather the momentum to do it, but the Bears should continue to be hungry given that the Bulls were firmly in control the entire two months of 2023. Lastly, continue to keep an eye on the Tech Big Dogs. If we are seeing a rotation out of those names (which have dragged markets along for a year or more), it will be hard for markets to do anything except retreat.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday saw markets start the year off with a gap lower following Iran’s sending a ship into the Red Sea and AAPL caught a downgrade.  The SPY gapped down 0.66%, DIA gapped down 0.55%, and QQQ gapped down 0.90%.  At that point we had divergence.  The DIA immediately rallied to recross the gap and slowly drifted higher until 1 p.m.  Meanwhile, SPY ground sideways for an hour and then drifted higher to the highs of the day at 12:45 p.m.  At the same time, QQQ sold off sharply after the open until 1:55 a.m. before recovering a portion of the selloff until 12:10 p.m.  However, all three major index ETFs sold off most of the afternoon, reaching the lows at about 3:15 p.m.  This culminated in a sharp rally in the last 20 minutes of the day.  This resulted in a white-bodied Bullish Engulfing candle in the DIA.  SPY printed a gap-down, white-bodied Doji, and the QQQ gave us a gap-down, black-bodied candle with a lower wick.

On the day, five of the 10 sectors were in the red with Technology (-2.46%) far out in front leading the losers while Healthcare (+1.04%) led the five gaining sectors.  At the same time, the SPY lost 0.56%, DIA gained 0.06%, and QQQ lost 1.69%.  The VXX was dead flat at 15.52 and T2122 rose but remained in its midrange at 74.59.  10-year bond yields rose slightly to 3.866% and Oil (WTI) fell to close at $71.65 per barrel.  So, the Bears started off the year with a gap lower.  However, the follow-through seemed to be based more on rotation out of the big dog tech names than a major change in market sentiment.  It is worth noting that both the DIA (strongest index) and QQQ (by far the weakest index) had well-above-average volume while SPY came in just shy of average volume.

The economic news on Tuesday was limited to S&P Dec. Global Manufacturing PMI, which came in just shy of expectation at 47.9 (compared to a forecast of 48.2 and a Nov. value of 49.4).  And November Construction Spending grew, but less than had been anticipated at +0.4% (versus a forecast of +0.5% and the October reading of +1.2%).

There have been no earnings reports yet this morning. UNF reports at 8 a.m.

In stock news, CVX announced it would take a “non-cash writedown” of between $3.5 billion and $4 billion on its oil and gas production in Q4.  (This primarily covers wells in CA and the Gulf of Mexico, which were abandoned.)  Later, RIVN announced that its Q4 deliveries were lower than forecasted or analyst expectations with 13,972 vehicles delivered.  (This was down 10% from the prior quarter and below the average analyst estimate of 14,430.)  Elsewhere, in a new year flood, companies rushed to issue new bond debt Tuesday.  The $29 billion in bonds issued included TM, F, UBS, BNPQY, and others.

In stock government, legal, and regulatory news, it was a very, very slow day. However, Reuters reported that the FDA approved 50% more new drugs in 2023 than in 2022.  This puts the agency back on par with historical levels. 

In unusual activity news, Bloomberg reports that a Z trader picked up a pile of calls in late October, betting on the real estate rally to continue the rest of the year. They made a tidy $39 million in profit on that bet and have turned around to buy 51,000 more of the Z calls at the $65 strike expiring in May. 

Overnight, Asian markets were mostly in the red.  South Korea (-2.34%), Taiwan (-1.65%), and Australia (-1.37%) led the region lower with only Malaysia (+0.65%) and Shanghai (+0.17%) staying the int green.  In Europe, we see a similar pattern taking shape at midday.  The CAC (-1.35%), DAX (-0.94%), and FTSE (-0.85%) lead the region lower with only two minor exchanges in the green in early afternoon trade.  In the US, as of 7:30 a.m., Futures point toward another gap lower to start the day.  The DIA implies a -0.25% open, the SPY is implying a -0.35% open, and the QQQ implies a -0.54% open at this hour.  At the same time, 10-year bonds are up to 3.978% and Oil (WTI) is just on the red side of flat at $70.36 per barrel in early trading.

The major economic news scheduled for Wednesday includes December ISM Mfg. Employment, Dec. ISM Mfg. PMI, Dec. ISM Mfg. Price Index, and Nov. JOLTs Job Openings (all at 10 a.m.), FOMC December Meeting Minutes (2 p.m.) and API Weekly Crude Stocks (4:30 p.m.).  The major earnings reports scheduled for the day are limited to UNF before the open and then after the close, CALM reports. 

In economic news later this week, on Thursday, Dec. ADP Nonfarm Employment Change, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Dec. S&P Global Services PMI, Dec. S&P Global Composite PMI, EIA Weekly Crude Oil Inventories, and the Fed Balance Sheet report.  Finally, on Friday we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Private Nonfarm Payrolls, Dec. Participation Rate, Dec. Unemployment Rate, Nov. Factory Orders, Dec. ISM Non-Mfg. Employment, and Dec. ISM Non-Mfg. PMI.

In terms of earnings reports later this week, on Thursday, we hear from CAG, LW, RDUS, RPM, and WBA.  On Friday, GBX and STZ report.

In miscellaneous oil and gas news, the US was the world’s top LNG exporter in 2023, leapfrogging Qatar and Australia after the Freeport LNG terminal came back online.  (The US had dropped out of the number one spot after Freeport in 2022.)  US exports of LNG rose a whopping 14.7% on record gas production.  Elsewhere, Bloomberg also reports that China has front-loaded its oil import quotas for 2024.  Beijing has already granted permission for imports up to amounts that nearly equal all of 2023.  This could lead to heavier than normal oil demand as traders try to take advantage of current lower oil prices…thereby also driving oil prices higher.  (China has never issued a full year’s worth of import quotas in the past in one go.  So, this may be a signal of certainty for the eyes of the Chinese economy.)

In US fiscal news, the Treasury Dept. reported that the gross national debt hit another record high, surpassing $34 trillion.  (As a sidenote, a January 2020 estimate from the Congressional Budget Office had forecast that the US would reach this level of debt in 2029.  So, we reached that level six and change years faster than expected.  It is also interesting to note that total federal tax receipts as a percentage of GDP are down at about 16%.  Of this, 67% comes from individuals, only 27% from corporations, and the rest from customs duties and excise taxes.) 

With that background, it looks like Mr. Market favors the bears as the premarket session gapped a bit lower and has put in black-bodied candles in all three major index ETFs so far. DIA is just giving us a Bearish Harami and remains above its T-line (8ema) in the early session. However, both the QQQ and SPY are moving lower and threatening to take out the Tuesday low during the premarket. So, while the Bulls hold on to the longer-term daily trend, we are seeing a pullback in the SPY and QQQ as well as a consolidation in the DIA. With that said, the rally was in dire need of that rest or pullback to remain healthy as we sit very near all-time highs. In terms of extension, none of the three major index ETFs are extended at all from their T-lines. At the same time, the T2122 indicator remains in its mid-range. So, both the Bulls and Bears have room to run if they gather the momentum to do it, but the Bears should continue to be hungry given that the Bulls kept them from making any moves at all the last two months of 2023. Lastly, keep an eye on the Tech Big Dogs. If we are seeing a rotation out of those names (which have dragged markets along for a year or more), it will be hard for markets to do anything except retreat.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The last trading day of the year opened up flat on Friday.  SPY opened 0.05% lower, DIA opened 0.04% lower, and QQQ opened dead flat.  At that point, all three major index ETFs ground sideways in a very, very tight range the first hour before starting to sell off.  SPY and DIA both reached their low of the day at 12:25 p.m. while did it faster by 11:35 a.m. Then all three traded sideways with a slightly bullish trend the entire rest of the day.  This action gave us indecisive candles in all three.  The SPY printed a black-bodied Spinning Top candle that retested and held above its T-line (8ema).  DIA gave us a Doji that also retested its T-line and held above.  Meanwhile, QQQ printed a large body, black-bodied Spinning Top that, again, also retested and held above its T-line.

On the day, eight of the 10 sectors were in the red with Technology (-0.66%) and Basic Materials (-0.62%) leading the way lower while Communications Services (+0.09%) and Consumer Defensive (+0.03%) being the only6 ones to hold above flat.  At the same time, the SPY lost 0.29%, DIA lost 0.04%, and QQQ lost 0.43%.  The VXX rose 0.26% to close at 15.52 and T2122 fell back into the midrange at 69.44.  10-year bond yields rose slightly to 3.866% and Oil (WTI) fell to close at $71.65 per barrel.  So, the Bulls took the last day of the year off and the only move was some late-morning profit-taking and then drifting back toward flat.

That ended a very strong year for the stock markets.  QQQ led the way higher with a huge gain of 53.79%.  The SPY gained 24.29% on the year and DIA lagged the vast majority of the year, gaining 13.74%.  All three major index ETFs remain very near all-time highs with QQQ and DIA having been at new all-time highs in the last few days and SPY just within a half of a percent.  The US Dollar (UUP) fell 2.59% on the year, while Oil (USO) fell almost 5%.  At the same time, 10-year bond yields (TNX—X) fell just 0.34% over the year.

The only economic news on Friday was December Chicago PMI, which came in lower than expected at 46.9 (compared to a forecast of 51.0 and the November reading of 55.8).

In stock news, NVDA launched a modified version of its advanced gaming 4090 chip specifically for the Chinese market.  The new chip is five percent slower than the one that is banned for sale to China.  Later, BA announced that all 737 MAX jets operated in China are back in service.  This comes less than a week after BA announced it had made the first delivery of a 787 Dreamliner to a Chinese customer.  At the same time, FSR announced it had delivered 4,700 electric vehicles (priced at $69,000) in 2023.  Later, UNH announced it had agreed to sell its Brazilian operations for $515.24 million.  Elsewhere, PFE, SNY, and TAK announced they plan to raise prices on 500 drugs in the US in what industry analysts say is a bargaining move aimed at stymying the Biden Administration negotiation of 10 high-cost drugs for Medicare.  Later, CALM said it had agreed to buy a TSN chicken processing plant in Dexter, MO.  CALM said it plans to convert the plant into an egg-grading facility. Finally, Bloomberg reports that X (formerly Twitter) is now worth less than one-third of what Elon Musk paid for the platform as advertising sales continue to plummet as right-wing Musk cannot manage to stop offending and then insulting large parts of society and advertisers in particular.

In stock government, legal, and regulatory news, GOOGL agreed to settle a $5 billion lawsuit that alleged the company secretly tracked the internet use of millions of people.  The terms of the settlement were not made public but may be disclosed on the previously scheduled trial date of Feb. 24.  (The lawsuit originally sought $5,000 per tracked user.)  At the same time, the US Chemical Safety Board announced the findings of its long investigation of a 2020 CHK oil well explosion.  The investigation found that CHK and its contractors failed to use adequate safety and control measures leading to the blast that killed three people.  Elsewhere, a federal judge certified a shareholder class action lawsuit against JNJ Friday, saying the shareholders may pursue damages for JNJ allegedly fraudulently concealing how its talc products had been contaminated with cancer-causing asbestos for five years.  Later, HSY was sued by an FL woman for their candies allegedly lacking the holiday details depicted in the candy’s artistic wrapper representations.  At the same time, a federal judge ruled in favor of TEVA in its patent infringement lawsuit brought by CORT.  Meanwhile, a US District Court upheld an FTC order preventing IQV from acquiring healthcare advertising firm DeepIntent. Later, JERT filed for Chapter 11 bankruptcy.  At the same time, MCD sued a group promoting a boycott of Israeli interests in Muslim-majority Malaysia for $1.31 million, alleging the group had issued false and defamatory statements that hurt MCD operations in that country.  Later, the FDA reported that RBGLY (Reckitt Mead Johnson) is voluntarily recalling batches of baby formula powder due to the possibility of contamination with bacteria.  At the same time, BNPQY signed an agreement to pay $662.3 million in compensation for the misleading practices of its consumer lending unit in France. Finally, the Biden Administration is pressuring ASML to halt shipments of state-of-the-art deep ultraviolet chip lithography equipment to China. ASML agreed to be part of the sanctions set to take effect this month but had rushed to ship orders before the deadline. Now the Biden Administration is pressing hard to stop the last-minute shipments. (It is worth noting that China accounted for 75% of ASML’s Q3 sales.)

Overnight, Asian markets were mixed but leaned toward the downside.  Thailand (+1.24%) was the big exception with South Korea (+0.55%) and Australia (+0.49%) rounding out the gainers.  On the red side, Hong Kong (-1.52%), Shenzhen (-1.29%), and Taiwan and Shanghai (both -0.43%) led the region lower.  In Europe, we see a much more evenly split leaderboard at midday.  The CAC (-0.36%), DAX (-0.17%), and FTSE (-0.27%) lead nine bourses lower with six larger-moving bourses in the green in early afternoon trading.  In the US, as of 7:30 a.m., Futures are pointing toward a red start to the year.  The DIA implies a -0.46% open, the SPY is implying a -0.64% open, and the QQQ implies a -0.93% open at this hour.  At the same time, 10-year bond yields have spiked back up to 3.959% and Oil (WTI) is surging up 2.36% to $73.34 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to December S&P Global Manufacturing PMI (9:45 a.m.).  There are no major earnings reports scheduled for either before the open or after the close.

In economic news later this week, on Wednesday, we get December ISM Mfg. Employment, Dec. ISM Mfg. PMI, Dec. ISM Mfg. Price Index, and Nov. JOLTs Job Openings and API Weekly Crude Stocks.  Then Thursday, Dec. ADP Nonfarm Employment Change, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Dec. S&P Global Services PMI, Dec. S&P Global Composite PMI, EIA Weekly Crude Oil Inventories, and the Fed Balance Sheet report.  Finally, on Friday we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Private Nonfarm Payrolls, Dec. Participation Rate, Dec. Unemployment Rate, Nov. Factory Orders, Dec. ISM Non-Mfg. Employment, and Dec. ISM Non-Mfg. PMI.

In terms of earnings reports later this week, on Wednesday, UNF and CALM report.  Then Thursday, we hear from CAG, LW, RDUS, RPM, and WBA.  On Friday, GBX and STZ report.

In geopolitical news, in the Red Sea, US Navy shot down two anti-ship missiles fired by Yemeni Houthi rebels, which had been fired at an AMKAF (Maersk) ship Sunday. The Houthi then launched four small patrol boats to fire on the ship with small arms, but US Navy helicopters sank those boats, killing several rebels in that process. (Maersk paused Red Sea shipping after the attack despite no damage being suffered.)  This Navy action is part of the US maintaining the safety of Suez-Red Sea shipping lanes while the Houthi try to stop any shipping that might aid Israel and draw attention to the Israeli war on Gaza. In a late-breaking development that has impacted oil prices, Iran has sent a destroyer to the Red Sea after the US action against its Yemeni allies.   

In miscellaneous news, Supreme Court Chief Justice Roberts ignored the court’s ethics problems as well as all the massive legal decisions it faces ahead related to the ex-president.  Instead, in his Sunday year-end note, Roberts focused on the pros and cons of AI technology.  (Probably unrelated, this came just days after it was found that the ex-president’s legal team had used many fake AI-generated legal citations in their motions filed on his behalf in the last couple of months.  Elsewhere, Chinese electric vehicle maker BYD announced it has produced more than 3 million new EVs in 2023.  That very likely means it has again topped TSLA (which had produced 1.35 million in the first three quarters of 2023) as the global EV leader.  In 2022, BYD outproduced TSLA by about half a million cars.  BYD sold 3.02 million vehicles in 2023.  Finally, in terms of starting the year off right, here are 1,000 good news stories you may have missed in 2023.

With that background, it looks like the news out of the Red Sea has markets scared that there could be further escalation of the Israeli-Hama war. All three major indes ETFs opened the premarket flat to modestly higher, but have sold off to form black-body candles that have crossed below the T-line in the SPY and QQQ and are retesting that level in the DIA. So, while the Bulls have held onto the daily trend for quite some time, this looks like a shock were the Bears will make a bid to take back control over the short-term trend. Sitting very near all-time highs, the Bulls retain control over the medium and longer-term trends. In terms of extension, none of the three major index ETFs were extended at all from their T-lines. At the same time, the T2122 indicator is now in its mid-range. So, both the Bulls and Bears have room to run if they gather the momentum to do it, but the Bears should be hungrier given that the Bulls have kept them from making any moves at all for two months.

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

Stocks started the day modestly higher as SPY opened 0.09% higher, DIA opened 0.05% higher, and QQQ opened 0.10% higher.  From that point, all three major index ETFs rallied until 11:30 a.m. and then spent the rest of the day grinding sideways in a fairly tight range.  All three then rallied the last 10 minutes of the day, going out very near the highs.  This action gave us large-body, white candles with very small upper wicks.  As a result, DIA and QQQ closed at another new all-time high close while SPY closed less than half of a percent shy of an all-time high close.  All three remain well above their T-line (8ema) with at least QQQ getting stretched.  This all happened on slightly below-average volume in DIA, below-average volume in the QQQ, and well below-average volume in the SPY.

On the day, all 10 sectors were in the green with Healthcare (+1.70%) and Basic Materials (+1.67%) out front leading the way higher while Communication Services (+0.58%) lagging behind the other sectors.  At the same time, the SPY gained 0.61%, DIA gained 0.68%, and QQQ gained 0.51%. The VXX gained 1.48% to close at 16.42 and T2122 spiked up to the top of its overbought territory to close at 96.25.  10-year bond yields fell slightly 3.933% and Oil (WTI) gained 1.53% to close at $73.58 per barrel.  So, the Bulls said “not so fast” to the chorus that had observed how far the rally had run and concluded the market had to pull back. 

There was no major economic news reported Tuesday including November Building Permits, which came in below expectations at 1.460 million (compared to a forecast of 1.470 million and the October 1.498 million).  This was a 2.5% decrease month-on-month.  At the same time, November Housing Starts came in significantly higher than predicted at 1.560 million (versus a forecast of just 1.360 million and an October value of 1.359 million).  This amounted to a 14.8% increase month-on-month.  Later the Oct. TIC Net Long-Term Transactions were reported as dramatically lower than anticipated at +$3.3 billion (compared to a forecast of +$45.8 billion and a September reading of +0.9 billion).  Finally, after the close, the API Weekly Crude Oil Stocks report showed oil inventories surprisingly increased by +0.939 million barrels (versus a forecast calling for a 2.233-million-barrel drawdown and the prior week’s 2.349-million-barrel drawdown).  This must mean oil production is higher than ever since oil exports are also at all-time highs (5+ million barrels per day).

After the close, SCS reported a miss on revenue while beating on earnings.  At the same time, WOR beat on revenue while missing on earnings.  However, FDX missed on both the top and bottom lines. (FDX, in particular, sold off hard in post-market trade and influenced the entire market lower.)

In stock news, MBGAF (Mercedes), STLA, and VLKAF (Volkswagen) have increased their own subsidy programs (lowered prices) following the termination of the German subsidies for EV purchases.  (The program was ended due to drastic budget cuts when a court ruled the German government could not use unused COVID funding for other purposes.)  The move will cost the car-makers about $5k per electric vehicle sold in 2024.  At the same time, BA announced Lufthansa had ordered 40 BA 737 MAX 8 planes with the option to buy 60 more later.  (EADSY also announced the airline ordered 40 Airbus A220-300 planes with Lufthansa having the option to buy 20 more later.)  Later, XPEV announced that it would cut prices on its electric SUV by 5%.  (The move follows competitor BYD cutting prices by 8% on December 1.)  At the same time, ADM announced a second acquisition in two days, purchasing UK-based flavor and ingredient firm FDL for an undisclosed amount.  (FDL is set to book about $120 million in sales for 2023.)  Reuters reported AFRM has begun offering “buy now, pay later” loans at WMT self-checkout kiosks in 4,500 WMT stores.  The loans only apply to purchases of more than $144 and up to $4,000 and exclude grocery purchases.  The term of the loans is three payments over 24 months.  Elsewhere, MULN announced a 1-for-100 reverse split effective at 12:01 a.m. on December 21.  (The move is intended to help the company come back into compliance with NASDAQ rules requiring a price above $1.00.)  Late in the day, China auto industry analysts said that TSLA saw an impressive 18.83% increase in car registrations last week in China.  This amounted to 18,000 new vehicle registrations.  At the close, LUV announced it reached an agreement in principle with its Pilot’s union.  The new 5-year contract would be worth $12 billion under the terms of the tentative deal.  (The union board still needs to accept and send the contract to union members for approval.) After the close, GOOGL said it would restrict the types of election-related queries to its Bard AI chatbot.  On Tuesday evening, TSLA canceled its annual merit-based stock awards according to Bloomberg.  However, the automaker did give modest cost-of-living increases as an adjustment to base salary. Finally, Tuesday night, CNBC reported that TGT has been lying and making excuses. The financial outlet reported that when the retailer closed nine stores in NY, Portland, and San Francisco it had claimed that theft and violence were driving factors in the decision. However, CNBC reporting found that theft and violence were higher at stores in those areas that were not closed. So, the company was just latching onto a political (GOP) narrative as reasoning to hide otherwise poor performance (in merchandising, marketing, and service).

In stock government, legal, and regulatory news, a US district judge granted a motion from KVUE to exclude expert testimony on whether the active ingredient in Tylenol causes Autism or ADHD in a class-action suit against KVUE.  At the same time, Reuters reported that TSLA prevailed in a lawsuit from a woman who alleged TSLA continued to give her abusive husband access to vehicle location data despite a court order of protection.  The court ruled that TSLA was not liable despite prior knowledge of the threat and the protective order since his name was listed as a co-owner on the vehicle title.  Later, TSLA asked a US judge to halt a trial brought by the EEOC alleging the company severely harassed black workers at a CA plant.  TSLA said that two similar cases should “play out” before the EEOC suit goes forward. Elsewhere, Reuters reported that the FAA has no “specific timetable” in mind for the certification of the BA 737 MAX 7 in an article citing the FAA’s top official.  (BA previously said it expects the certification to come this year.  However, the public comment period on a proposed exemption for certification for engine inlet and anti-icing system does not end until December 26.  The largest BA 737 MAX 7 customer, LUV, says it expects FAA to certify the plan by April.  At the same time, USB agreed to pay $36 million to settle allegations the bank illegally blocked unemployed consumers from accessing their unemployment benefits during the COVID-19 pandemic.  (USB has contracts with 19 states and the District of Columbia to deliver unemployment benefits.)  Tuesday night, major automakers GM, TM, and VOLKAF (Volkswagen) opposed a bid by the NHTSA to force a recall of all 52 million airbag inflators produced by ARC Automotive (as opposed to just the millions already recalled).

Overnight, Asian markets were mixed.  Shenzhen (-1.41%), India (-1.41%), and Shanghai (-1.03%) paced the losses.  Meanwhile, South Korea (+1.78%), Japan (+1.37%), Hong Kong (+0.66%), and Australia (+0.65%) led the gainers.  In Europe, we see a similar picture taking shape at midday with seven of 15 bourses in the red, seven in the green, and one unchanged.  The CAC (+0.08%), DAX (-0.07%), and FTSE (+0.56%) lead the region on volume as usual.  In the US, as of 7:30 a.m., Futures are pointing toward a red start to the day.  DIA implies a -0.18% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.26% open at this hour.  At the same time, 10-year bond yields are down to 3.879% and Oil (WTI) is up 1.37% to $74.94 per barrel in early trading.

The major economic news scheduled for Wednesday includes Q3 Current Account (8:30 a.m.), Conf. Board Consumer Confidence and Nov. Existing Home Sales (both at 10 a.m.), and EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open include GIS, TTC, and WGO.  Then, after the close, MU and MLKN report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q3 GDP, Q3 GDP Price Index, Philly Fed Mfg. Index, and the Fed Balance Sheet.  Finally, on Friday, Nov. PCE Price Index, Nov. Core PCE Price Index, Nov. Durable Goods, Nov. Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and Nov. New Home Sales are reported.

In terms of earnings reports later this week, on Thursday, KMX, CCL, CTAS, PAYX, AIR, NKE and WS report.  There are no earnings reports on Friday.

In miscellaneous news, the Fed’s Bank Term Funding Program (BTFP) has become increasingly popular in the last week.  The program which loans to banks against their Treasury and agency debt for up to one year at a rate slightly above Fed Funds swaps price has increased nearly 25% in size since the Fed meeting last week.  The reason is that Fed swaps are now pricing in (indicating) that the market expects 1.40% of rate cuts in 2024.  This means the BFTP loan rate is 4.96%, which is more than half a percent lower than the Fed discount window rate of 5.5%. So now $124 billion of BTFP loans are on the Fed balance sheet compared to $100 billion prior to the last Fed meeting.  In essence, the market has cut the Fed rates by half a percent already, even as the FOMC stands pat.

In China news, Reuters reported the Chinese economic analysts have noted disturbing strategy shifts by that country’s retailers, that risk entrenching deflation in the economy.  The shift by retailers is toward carrying only or primarily lower-priced goods and services.  This is seen in a proliferation of bargain stores and major companies offering primarily (or only) cheaper scaled-down versions of their products and services.  This move en masse is drawing comparisons to Japan, which suffered “lost decades” due to deflationary trends.  (As company revenues fall, they cut costs by reducing payrolls and offer cheaper price.  This lowers consumer price expectations and makes it ever harder to sell premium products or raise prices.)  The Reuters report cited many examples and quoted several analysts all predicting a painful economic spiral unless there is massive stimulus or other unforeseen economic good news.

In late-breaking news, inflation in the UK came in softer than expected at 3.9%, which boosted British trader’s hopes for a rate cut soon.  Before that, Richmond Fed President Barkin suggested the Fed would cut rates if progress on inflation continued.  (That was what markets wanted to hear as opposed to other Fed members who have pushed back on speculation that the FOMC will cut rates soon.)  Elsewhere, demand for mortgages in the US fell slightly, despite another decrease in loan rates. This may be due to homebuyers (as well as traders) anticipating better rates in the new year.  The rate for a 30-year, fixed-rate, conforming loan fell from 7.07% to 6.83% last week.  Despite this, demand for refinance loans fell 2% and applications for new home purchase loans were down 1% versus the prior week.

With that background, it looks like the Bears are in control of all three major index ETFs so far in the premarket action. All three opened the early session flat to slightly lower and are giving us larger, black-bodied candles so far in the early session. All three remain well above their T-line (8ema) this morning. So, overall, the Bulls remain well in control of both the longer-term trend and the short-term trends. However, the Bears seem in control of premarket trading. In terms of extension, the three major index ETFs were too far extended above their T-lines last night. However, the early morning move (possibly in reaction to FDX) is taking them back into a less extended state. At the same time, the T2122 indicator is now in the upper part of its overbought range. So, strictly speaking, both the Bulls and Bears have some room to run if they gather the momentum to do it, but the Bears have much more slack to work with if they get going.

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.

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

Markets opened higher on Monday as SPY gapped up 0.33%, DIA gapped up 0.20%, and QQQ actually opened just on the red side of flat at -0.03%.  At that point, SPY and QQQ traded sideways the rest of the day with a very modest bullish trend to the action.  Meanwhile, DIA wobbled sideways along the open level with a very slight bearish trend after 11 a.m. to end up in the gap.  This action gave us three different candles among the three major index ETFs.  DIA printed a gap-up black-bodied Doji. At the same time, SPY printed a gap-up small, white-bodied candle with a significant upper wick.  And to round things out, QQQ opened just shy of flat and printed a larger-body white candle with a small upper wick.  This happened on well-below-average volume in the SPY and QQQ as well as modestly-below-average volume in DIA.

On the day, nine of the 10 sectors were in the green with Energy (+1.13%) way out front leading the way higher while Utilities (-0.24%) lagged behind the other sectors and was the only sector in the red.  At the same time, the SPY gained 0.56%, DIA gained 0.09%, and QQQ gained 0.43%. The VXX gained slightly to close at 16.18 and T2122 climbed back up out of the mid-range and into its overbought territory to close at 86.13.  10-year bond yields rose to 3.945% and Oil (WTI) gained 1.68% to close at $72.63 per barrel.  So, QQQ kept up the rally, closing at another all-time-high-close again.  DIA did the same but in a much more indecisive way.  Meanwhile, SPY made up all the ground it lost last Friday, closing at exactly the same price as Thursday. 

There was no major economic news reported Monday.  Elsewhere, Chicago Fed President Goolsbee said Monday he was confused by the stock market’s reaction after last week’s FOMC meeting.  Goolsbee told CNBC, “It’s not what you say or what the (Fed) Chair says, it’s what do they hear and what do they want to hear?”  He continued saying, “I was confused a bit … was the market just imputing ‘Here’s what we want them to be saying.’ I thought there seemed to be some confusion about how the FOMC even works. We don’t debate specific policies speculatively about the future.”  Earlier in the day, Cleveland Fed President Mester told the Financial Times, “The next phase is not when to reduce rates, even though that’s where the markets are at. It’s about how long do we need monetary policy to remain restrictive in order to be assured that inflation is on that sustainable and timely path back to 2%.”   Later, San Francisco Fed President Daly told the Wall Street Journal that the FOMC must make sure “we don’t give people price stability but take away jobs.”  She went on to say that rate cuts are likely to be appropriate in 2024.  (She did not get more specific on timing.)

After the close, HEI reported beats on both the revenue and earnings lines.  This included 54% earnings growth quarter over quarter.

In stock news, Reuters reported Monday that GS is facing a painful and costly exit from its credit card partnership with AAPL.  Other lenders find the program too risky and expensive, which is driving down what GS can get from selling the partnership.  In fact, key potential buyers of GS’s position include SYF, whose CEO said “You’ve got to have a really good risk-return (for credit card deals)” at a conference early this month. At the same time, UL announced it will sell its Elida Beauty (which includes the Q-top brand) to private equity firm Yellow Wood.  Terms of the deal were not disclosed, but the unit generated $1.02 billion in 2022.  Later, Reuters reported that JPM, YUM, AAL, LOW, KTB, and BLK had all changed their Diversity, Equity, and Inclusion policies after intimidation from right-wing groups who threatened lawsuits to stop any affirmative action.  Elsewhere, IBM announced the purchase of SWDAF’s integration platform for $2.33 billion.  The deal will increase IBM’s capabilities in cloud and AI markets.  Later the Wall Street Journal reported that AMZN is in talks to invest in Diamond Sports Group (a broadcasting network owned by SBGI).  At the same time, WH asked its shareholders to reject a hostile acquisition bid from CHH.  WH management cited that the deal would tie the company up for up to 24 months in regulatory review of the deal, which they claimed would hurt the company’s valuation.  Late in the day, ENPH said it would cut 10% of its workforce (total including employees and contractors).  After the close, CMCSA announced it had found a four-day unauthorized access to its internal systems in October.  The breach likely exposed usernames, passwords, contact details, and partial social security numbers of customers among other data.  Also after the close, ADM announced it had agreed to buy Revela Foods for an undisclosed sum.  Finally, late Monday evening TSLA announced it will increase the pay of workers at its NV plant by 10% starting in early January.  The company did not say so but this was likely a bid to hold off a bid by the UAW union to organize the plant.

In stock government, legal, and regulatory news, the FDA approved the use of ARTQ’s treatment for a skin condition Monday (for patients 9 years and older).  The disease impacts 10 million Americans and this is the first approved treatment.  Later, ADBE announced formally that it is scrapping its $20 billion deal to buy cloud-based designer platform Figma after receiving pushback from EU and UK antitrust regulators.  ADBE will pay a $1 billion termination fee to end the deal. At the same time, AAPL announced it is halting the sale of some (higher end) of its Apple Watches in the US after the ITC ruled against the company in a patent dispute over included medical sensors.  Later, SPWR made an SEC filing that raised doubts about the company’s ability to stay in business.  The filing said lenders made a demand for immediate repayment of $65.3 million in debt after the company failed to report Q3 earnings on time.  (SPWR stock fell 31% on the day of this revelation.)  At the same time, the SEC launched a major lawsuit against TIO, alleging the fintech company fabricated billions of dollars worth of transactions through Nigerian subsidiaries and falsely reported hundreds of millions of fake revenues and assets.  Later, COIN petitioned a federal appeals court to review and overturn the SEC’s denial of the company’s request for new rules covering the digital asset sector.  (The SEC contends no new rules are needed.)  Elsewhere, 21 members of the US House (including at least one Democrat) wrote a letter to President Biden, urging him to launch an investigation of the EU, alleging that the EU Digital Markets Act harms the competitive ability of GOOGL, AMZN, AAPL, META, and MSFT.  Separately, another bipartisan group of lawmakers asked the Dept. of Justice to launch an investigation into whether AAPL violated antitrust laws when it disabled third-party Apps that allowed Android devices to message with the AAPL iMessage application. Later, the state of TN (GOP-run) sued BLK alleging the company breached consumer protection laws by making “misleading” statements about its environmental, social, and corporate governance investment strategies.  A utility subsidiary of BRKB has agreed to pay a $250 million settlement to timber companies in Oregon over wildfires.  After the close, a WA state jury ordered BAYRY (Bayer) to pay $857 million to seven former students and volunteers of a Seattle school district after the company’s PCB chemicals leaked from light fixtures making the plaintiffs sick.

Overnight, Asian markets leaned heavily to the green side with only two exchanges in the red.  Japan (+1.41%) and Australia (+0.84%) led the gainers with most other stock exchanges close to flat.  In Europe, only four of 15 bourses are in the red as the Bulls lead the way at midday.  The CAC (-0.06%), DAX (+0.38%), and FTSE (-0.11%) lead the region on volume as Scandinavian exchanges lead the price moves in early afternoon trade.  In the US, as of 7:30 a.m., Futures point toward a modestly green start to the day.  The DIA implies a +0.16% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.12% open at this hour.  At the same time, 10-year bond yields are down a touch to 3.905% and Oil (WTI) is off by three-tenths of a percent to $72.26 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to Nov. Building Permits and Nov. Housing Starts (both at 8:30 a.m.), TIC Net Long-Term Transactions (4 p.m.), and the API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include ACN and FDS.  Then, after the close, FDX, SCS, and WOR report.

In economic news later this week, on Wednesday, Q3 Current Account, Conf. Board Consumer Confidence, Nov. Existing Home Sales, and EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q3 GDP, Q3 GDP Price Index, Philly Fed Mfg. Index, and the Fed Balance Sheet.  Finally, on Friday, Nov. PCE Price Index, Nov. Core PCE Price Index, Nov. Durable Goods, Nov. Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and Nov. New Home Sales are reported.

In terms of earnings reports later this week, on Wednesday we hear from GIS, TTC, WGO, MU, and MLKN.  On Thursday, KMX, CCL, CTAS, PAYX, AIR, NKE and WS report.  There are no earnings reports on Friday.

In miscellaneous news, US antitrust regulators (US Dept. of Justice and FTC) released their finalized new guidelines for tougher merger and acquisition scrutiny.  The 51-page set of guidelines expanded the definition of “highly concentrated markets” (which had last been updated in 2010).  The new standards lay the groundwork for challenging big tech mergers by companies like AMZN, GOOGL, AAPL, MSFT, NVDA, etc. among other industries and companies.  Elsewhere, BAC said Monday that they expect the Fed to cut rates four times in 2024 (March, June, September, and December).  As a result, BAC now predicts faster growth and lower inflation in the economy next year.  In supply chain news, the US Dept. of Defense launched an operation to safeguard the Red Sea for commercial traffic in conjunction with the UK Navy and eight other minor contributing countries.

In oil news, Reuters reports that US oil exports hit another record last week and will continue that way the rest of the year.  The driving reason for this increase is oil companies trying to drive down inventories to avoid year-end tax liability.  (This is especially true for storage in the state of TX.)  So far in 2023, US oil exports have averaged 4 million barrels per day (about 500k barrels per day more than 2022’s record exports).  However, exports from the Gulf Coast have averaged more than 5 million barrels per day in the last two weeks.

In late-breaking news, GOOGL agreed to pay $700 million and allow more competition in its Google Play app store.  $630 million will go into a settlement fund for consumers and $70 million to be used by states.  The settlement still requires approval of the court.  (Eligible consumers would get at least $2 and may get more depending on their spending in the GOOGL app store between August 2016 and September 2023.)  All 50 states, Washington DC, Puerto Rico, and the Virgin Islands are part of the settlement.

With that background, it looks like all three major index ETFs are looking to move modestly higher again this morning in premarket action. All three opened the early session higher and are giving us small white-bodied candles so far. All three remain well above their T-line (8ema) this morning. So, overall, the Bulls remain well in control of both the longer-term trend and the short-term trends. In terms of extension, none of the three major index ETFs are too far extended above their T-lines. However, QQQ is starting to get close to extended once again and the T2122 indicator is now in the lower half of its overbought range. So, strictly speaking, both the Bulls and Bears have some room to run if they gather the momentum to do it. The Bears obviously have much more slack to work with if they get going.

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.

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