Markets opened higher on Monday, gapping up 0.52% in the SPY, gapping up 0.62% in the DIA, and gapping up 0.42% in the QQQ.  Then the Bulls followed through in all three major index ETFs, reaching the highs at about 10:30 a.m. in the QQQ and about 11 a.m. in both large-cap ETFs.  From there, SPY and QQQ traded sideways the rest of the day while DIA traded sideways with a slight bearish trend.  This action gave us gap-up, white-bodied candles in all three major index ETFs.  The DIA could maybe be seen as a Morning Star-type signal that crossed back up through its 200sma.  At the same time, QQQ printed a Bullish Harami candle that crossed back up through its 50sma.  The SPY and QQQ also crossed back up through their T-line (8ema).  This all happened on above-average volume in the DIA and below-average volume in both the SPY and QQQ.

On the day, all 10 sectors were in the green with Consumer Cyclical (+1.63%) out front leading the way higher.  Meanwhile, Energy (+0.63%) lagged behind the other sectors.  At the same time, the SPY lost 1.05%, the QQQ gained 1.13% and DIA gained 0.94%.  VXX plummeted 9.36% to close at 22.95 and T2122 jumped back up to the top half if its mid-range at 22.95.  10-year bond yields rose again to 4.71% while Oil (WTI) fell almost nine-tenths of a percent to close at $86.92 per barrel.  So, it was the Bull’s day.  Talking heads and market analysts seemed to think the reason was optimism over earnings given the big bank blowout results last Friday.  I don’t know if that is true, it could be optimism from a lack of Israeli ground invasion as of Monday or it could have just been a fluke.  Regardless of the cause, the DIA printed a higher high to go with its recent higher low, and the other two major index ETFs seem to be considering doing the same.  That is the start of a bullish trend.

The only economic news reported Monday was the NY Fed Empire State Mfg. Index which came in better than expected but still low at -4.60 (compared to a forecast calling for -7.00 and a September reading of 1.90).  So, according to that value, manufacturing conditions in the NY Fed area aren’t improving (anything above zero means improving conditions) but a higher-than-expected value is seen as bullish.  In Fed Speak news, we did hear from Philly Fed President Harker twice on Monday.  He told a Mortgage Bankers Assn event that the current level of interest rates has killed off access to the housing market for first-time buyers.  He went on to say the housing market could be summed up in seven words: “There are no first-time time buyers.”  Later, Harker made a point to reiterate his stance that (outside of a dramatic change in data) the current Fed Funds rate should be maintained to give markets time to adapt to the higher rates and give the ongoing disinflation process time to work.

In Autoworker contract talks and strike news, the Executive Chair of F, Bill Ford, appealed to UAW workers to end their 32-day strike.  Ford said, “I call on UAW colleagues…We need to come together to bring an end to this acrimonious round of talks.” Ford went on to say competitors TM, HMC, and TSLA “are loving this strike because the longer it goes on, the better it is for them.”  No new offer came with the public plea and it comes after F negotiators said they were at the limit of what they can afford to spend on wages and benefits. (If I were really speaking to blue-collar factory workers, I’m not sure “acrimonious” is a term I’d use but then again what do I know.) In response to Ford’s statement, UAW President Fain pointed out a 1,500% increase in the money spent on share buybacks by the Big 3 over just the last four years.  For example, GM has put a $5 billion buyback plan in place in August 2022 (up from $3.3 billion prior to that point). 

In stock news, on Monday, TRU warned an industry conference of both increased cost of mortgages as well as many applicants being disqualified with Fannie Mae and Freddie Mac policy change reducing the number of credit reports needed from three to two.  (TRU said it may disqualify nearly two million loan applicants, even though TRU hasn’t tested to verify their claims.  I’m also not sure they realize that they are claiming their product isn’t trustworthy.)  At the same time, NVO announced it is set to acquire a new blood pressure drug from KBP Biosciences for $1.3 billion. Later, MRNA reiterated its guidance despite rival PFE drastically reducing its COVID-19 vaccine forecast last week.  MRNA still anticipates $6 billion – $8 billion from its own vaccine sales this fall.  Later, Bloomberg reported that PRTA is exploring a potential sale prior to the release of key data on its Alzheimer’s disease clinical trials in the coming months. Elsewhere, PCTI spiked on the announcement it is being acquired by APH in an all-cash $139.7 million deal.  At the same time, SNAP popped Monday after leaked internal user number targets exceeded industry analyst estimates.  In layoff news, MSFT’s LinkedIn division said it will lay off 668 employees (3% of its workforce) Monday.  At the same time, Sky News reported that RYCEY (Rolls-Royce) will lay off 2,500 employees as soon as today as part of a cost-cutting drive.  After the close, TM suspended production in at least five Japanese factories after a fire at a major supplier.  Also after the close, Bloomberg reported that analyst surveys show AAPL iPhone 15 sales in China are down almost 5% from the same time after the iPhone 14 release.

In stock government, legal, and regulatory news, the Washington Post reported that the Biden Administration has agreed to terms to ease sanctions on Venezuela’s oil industry. This comes after Venezuela agreed to a competitive, internationally-monitored presidential election in 2024.  At the same time, ESTA was given FDA approval for its “tissue expander” product.  Later, the NHTSA announced that F is recalling 238,364 2020-2022 Ford Explorers due to parking brakes not engaging and risking them rolling away.  Elsewhere, Reuters reports BTI, PM, and IMBBY are working on “heat sticks” infused with nicotine (inhalable) as a way to get around an incoming EU ban on flavored burning tobacco products.  The sticks “heat but don’t burn” to get around the new regulations.  At mid-afternoon, the NHTSA announced that CAR had agreed to pay a $150k fine after an investigation found the Zipcar subsidiary was allowing customers to rent vehicles with uncompleted recall notices.  Meanwhile, GM, TM, F, STLA, and nearly all other major automakers sharply criticized the Biden Administration CAFÉ standards increasing significantly.  The automakers claim the higher NHTSA CAFÉ standards will result in a boost in average vehicle prices by $3,000 by 2032.  (For reference, that is about the normal average ANNUAL price increase of the average US vehicle and the automakers are claiming that over 10 years.)  After the close, Reuters reported that the Biden Administration is working on additional sanctions to eliminate loopholes allowing AI chips to make their way to China.  NVDA and AMD will be the most impacted by changes that might stop sales to third parties who reship the products to China now.

So far this morning, BAC, BK, GS, JNJ, and LMT all beat on both the revenue and earnings lines.  Meanwhile, ERIC missed on revenue while reporting in line with earnings.  (PLD and ACI report closer to the opening bell.)  It is worth noting that JNJ raised its forward guidance.  It is also worth noting that banks continue to show very strong (50%+) quarter-over-quarter earnings growth on the impacts of rising interest rates.

Overnight, Asian markets were green across the board.  Japan (+1.20%), South Korea (+0.98%), and Hong Kong (+0.75%) led the region higher.  Meanwhile, in Europe, the bourses are mixed but lean to the red side at midday with just five of 15 exchanges in the green.  The CAC (-0.26%), DAX (-0.45%), and FTSE (+0.33%) lead the region on volume as usual.  In the US, as of 7:30 a.m., Futures are pointing to a modestly lower start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.36% open at this point.  At the same time, 10-year bond yields are up strongly again to 4.769% and Oil (WTI) is up a third of a percent to $86.98 per barrel in early trading.

The major economic news scheduled for Tuesday includes September Retail Sales (8:30 a.m.), Sept. Industrial Production (9:15 a.m.), August Business Inventories and August Retail Inventories (10 a.m.), Sept. Federal Budget Balance (2 p.m.), and API Weekly Crude Oil Stocks Report (4:30 p.m.).  We also get two Fed speakers (Williams at 8 a.m. and Bowman at 9:20 a.m.).  The major earnings reports scheduled for before the open include ACI, BAC, BK, ERIC, GS, JNJ, LMT, and PLD.  Then, after the close, IBKR, JBHT, OMC, UAL, and WTFC report.

In economic news later this week, on Wednesday, Sept. Building Permits, Sept. Housing Starts, EIA Weekly Crude Oil Inventories, and the Fed Beige Book are reported.  We also hear from Fed members Waller (noon), Williams (12:30 p.m.), Bowman (1 p.m.) and Harker (3:15 p.m.).  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Sept. Existing Home Sales, and the Fed Balance Sheet.  We also hear from Fed Chair Powell (noon), Bostic (4 p.m.), and member Harker 5:30 p.m.).  Finally, on Friday, there is no scheduled news.  However, again we hear from Fed member Harker (9 a.m.) and Mester (12:15 p.m.).

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

In US Congressional news, it appears Rep. Jordan has made progress in reversing some of the “no” votes among Republicans over his candidacy for House Speaker.  Two key GOP opponents publicly announced they will vote for him on Monday, bringing down GOP opposition by some unknown number.  Jordan can afford to lose eight GOP votes at most…and even then, only if he convinces those eight to vote “present” instead of “no.” The measure will go to the House floor for a vote at noon today. If he fails on the first vote, the most likely scenario is another round-after-round of votes trying to get the extremist candidate over the line and into office. There are two other scenarios being discussed: giving temporary increases in the power to the unelected Speaker Pro Tempore McHenry, and moderate Republicans breaking with the MAGA-wing of the GOP to form a coalition with moderate Democrats in order to elect a compromise Speaker and actually govern. However, those moderate Republicans don’t seem to have the spine to do that, many already caving to MAGA pressure and always fearing retaliation by the vindictive ex-President and his minions.

In miscellaneous news, Reuters reported after hours that dozens of Chinese-listed companies announced plans to buy back shares and/or scrap plans to sell more shares late Monday.  This is widely seen as a “government-encouraged” measure to prop up Chinese markets.  Elsewhere, it is worth noting that today is the 600^th day of the Russian invasion of Ukraine.   Finally, the White House announced that President Biden will visit Israel tomorrow after a second visit by Sec. of State Blinken.  Sec. of Defense Austin deployed 2,000 medical and logistics troops as of Sunday evening and then another 2,000-man Marine rapid response force to be held close offshore among the flotilla of ships accompanying two aircraft carriers sent to the area “just in case.”

With that background, it looks like the Bears are modestly in control in the premarket despite more strong earnings reports. All three major index ETFs opened the early session flat but have printed small black candles with very little wick so far. However, all three remain above their T-line (8ema) and the QQQ remains just above its 50sma while the DIA remains just above its 200sma. There is economic news today, but the more likely volatility factor would be news from the House Speaker debacle or from the geopolitical front. In terms of extension, none of the three major index ETFs are too far from their T-line (8ema). The T2122 indicator is back in its mid-range. So, again we have plenty of slack to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

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

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

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

Overnight, Asian markets were nearly red across the board.  Only Malaysia (+0.02%) managed to hang onto green territory.  Hong Kong (-2.33%) was by far (by more than 1.25%) the biggest loser followed by Singapore (-1.02%) and Shenzhen (-0.99%).  In Europe, we see a similar picture taking shape at midday.  Only two of the bourses are in the green, led by Russia (+0.27%) while the CAC (-0.75%), DAX (-0.77%), and FTSE (-0.32%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed start to the day.  The DIA implies a +0.07% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.36% open at this hour.  At the same time, 10-year bond yields are climbing to 4.614% and Oil (WTI) is up a massive 3.81% to $86.09 per barrel in early trading.

The major economic news scheduled for Friday includes September Export Price Index and Sept. Import Price Index (both at 8:30 a.m.)  Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations (all at 10 a.m.).  We also hear from Fed member Harker at 9 a.m.  The major earnings reports scheduled for Friday include BLK, C, JPM, PNC, PGR, UNH, and WFC all before the open.  There are no major reports scheduled for after the close.

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

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

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

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

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

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

Overnight, Asian markets were mostly green with only three of the 12 exchanges in the region showing even modest red.  Hong Kong (+1.93%), Japan (+1.75%), and South Korea (+1.21%) led the region higher.  In Europe, with the lone exception of Russia (-1.07%) we see green across the board at midday.  The CAC (+0.47%), DAX (+0.57%), and FTSE (+0.77%) are leading the region upward in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward another green start to the day. The DIA implies a +0.34% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.24% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.571% and Oil (WTI) is up more than 1% to $84.37 per barrel in early trading.

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

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

See you in the trading room.

Ed

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

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

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

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

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

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

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