On Tuesday, stocks gapped modestly lower at the open (down 0.21% in the SPY, down 0.21% in the DIA, and down 0.34% in the QQQ).  At that point, all three major index ETFs followed through to sell off sharply until 10:45 a.m.  However, then we saw some divergence as the two large-cap index ETFs continued in a much slower selloff until 12:50 p.m.  Meanwhile, the QQQ began to rally at 10:45 a.m. and kept it up until 2 p.m.  SPY and QQQ reached their high of the day at 2:45 p.m. while DIA did not quite make it up to the levels of the open.  The last 75 minutes of the day saw all three swing lower and then back higher. This action gave us a black-bodied, long-legged Doji in the SPY, a black-bodied, long-legged Doji in the DIA, and a white-bodied Spinning Top in the QQQ.  All three remain below their T-line (8ema) and 50sma. Perhaps more importantly, all three also dropped just below a potential support level. This all happened on below-average volume in all three major index ETFs.

On the day, nine of the 10 sectors were in the red.  Utilities (-0.59%), Energy (-0.58%), and Industrials (-0.52%) were out in front leading the market lower, as Communication Services (+0.26%) was the only sector to hang onto green territory.   At the same time, the SPY lost 0.21%, DIA lost 0.29%, and QQQ lost 0.21%.  VXX fell 0.49% lower to close at 20.41 and T2122 fell again but remained in the low end of the mid-range at 24.58.  10-year bond yields spiked again to close at 4.365% while Oil (WTI) fell slightly to end the day at $91.66 per barrel.  So, again it was a typical pre-Fed Tuesday where the price whipped back and forth but ended up not changing much.  Everyone is still just waiting on the Fed decision.  However, this time around, the entire market thinks (well 99.0% according to the Fed Futures) they already know the Fed decision.  So, if we are actually waiting on the Fed verbiage and tone of Fed Chair Powell’s statement.

The only major economic news reported Tuesday included Preliminary August Building Permits, which came in above expectations at 1.543 million (compared to a forecast of 1.440 million and a July reading of 1.443 million).  This amounted to a 6.9% increase over the prior month.  At the same time, August Housing Starts were lower than predicted at 1.283 million (versus a forecast of 1.440 million and a previous month 1.447 million).  This was the lowest level since June 2020 and that also amounted to an 11.3% decrease month-on-month.  Finally, after the close, the API Weekly Crude Oil Stocks report showed a larger drawdown than was anticipated at -5.250 million barrels (compared to a forecast of -2.667 million barrels and an increase of 1.174 million barrels last week).

In stock news, MS debuted an AI Investing assistant designed to help investment advisors sift through over 100,000 research reports.  At the same time, NIO announced it plans to sell $1 billion in senior convertible notes.  The market seems to believe most will be converted into shares, diluting existing stockholders.  As a result, NIO dropped more than 17% on the day.  At the other end of the financial strength spectrum, MSFT increased its quarterly dividend by 10% to $0.75/share.  Elsewhere, on Tuesday, HBI announced it was exploring strategic alternatives for the company’s Champion brand.  Later, DIA announced that it expects to make $10 billion in profits from theme park operations up from $2.2 billion a decade ago. At the same time, DIS said it plans to invest $60 billion to expand its theme parks globally as well as to build a DIS brand cruise line.  (That is double what was spent on that business unit in the prior 10 years.)  Later TGT, announced they will hire 100,000 workers for the holiday season and will begin holiday promotions in October.  Reuters reported that the hacking group that breached MGM and before that CZR had also hacked 3 other clients of OKTA.  The article reported that the hackers gained access to MGM’s OKTA identity management account and used it to gain other credentials to further their attacks.  At the same time, INTC held an event where it highlighted that its upcoming new line of CPUs will allow consumers to run their own AI applications rather than buying those as a service from a cloud-computing company.  INTC did not explain what need or application would require on interest consumers in running their own AI models.  However, if they want to, INTC’s line of chips due out in December will be able to do so on the low end of that spectrum.

In stock government, legal, and regulatory news, in Europe, GOOGL made a last-ditch effort to overturn a $2.6 billion EU antitrust fine (imposed for abuses of its shopping service). The company told the 15-judge panel of Europe’s top court that the European Commission had failed to prove GOOGL’s actions were anti-competitive and anyway the fines themselves were abusive and undermined competition by hurting GOOGL.  Later, the IRS approved MULN’s “qualified manufacturer” status, meaning customers who purchase one of two MULN models will qualify for up to $7,500 in tax credits per cargo van bought.  Elsewhere, the SEC and Dept. of Justice have begun investigating whether CS misled investors about its financial health prior to its Swiss-state-backed rescue buyout by UBS.  Reuters reported the two agencies have requested documents from both CS and UBS as well as current and former directors.  At the same time, the CEO of CBOE resigned after a late-August outside investigation found he failed to disclose “personal relationships” with his colleagues.  Later, the Wall Street Journal reported that the Dept. of Justice is investigating perks TSLA CEO Musk has received from the company (including designing a proposed house for him).  The article claims employees were the source of the allegations, including the former CFO.  Meanwhile, LLY announced they are suing 10 medical spas across the US which LLY alleges are selling products claiming to contain the active ingredient in its Mounjaro diabetes drug (which is expected to be approved for weight-loss use later this year).  Later, a federal judge in NY ruled that DASH, GRUB, and UBER can sue New York City over its law capping how much they could charge restaurants for delivering meals.

In Autoworker contract talks and strike news, Reuters reported that UAW workers are bracing for more strikes as talks between the union and Big 3 automakers show no sign of significant progress.  However, in hopeful news, F announced late last night that it had reached a tentative deal with its Unifor Canadian auto workers.  The deal still must be ratified by union members and neither the company or the union released and contract details.  (Although it beggars belief that the Canadian and US unions don’t talk.  So, the reason for the obfuscation is not clear.)

So far this morning, GIS beat on both the revenue and earnings lines.  This was a very modest upside surprise on modest 4% growth.  In other morning news, US mortgage demand increased despite interest rates rising.  The US average for a 30-year, fixed-rate, conforming loan rose from 7.27% to 7.31%.  Despite this, refinancing applications jumped 13% compared to the prior week.  The number of new home purchase loans also increased 2% on the week.  Meanwhile, across the pond, the Bank of England has a rate hike pause back in play as a possibility after the UK reported its August CPI fell from 6.8% to 6.7% defying forecasts that had predicted an increase to 7%.

Overnight, Asian markets leaned heavily to the red side.  Only Singapore (+0.04%) and South Korea (+0.02%) were able to hang onto green while India (-1.15%), Thailand (-0.99%), and Japan (-0.66%) led the rest of the region down.  However, in Europe we are seeing the opposite picture taking shape at midday.  Only Russia (-0.58%) and Greece (-0.34%) are in the red.  Meanwhile, The FTSE (+0.77%), DAX (+0.60%), and CAC (+0.42%) lead the 13 green bourses higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.21% open, the SPY is implying a +0.19% open, and the QQQ implies a +0.12% open at this hour.  At the same time, 10-year bond yields have backed down just a bit to 4.347% and Oil (WTI) is off by two-thirds of a percent to $90.64/barrel in early trading. 

The major economic news scheduled for Wednesday include EIA Weekly Crude Oil Inventories (10:30 a.m.), FOMC Rate Decision, FOMC Statement, FOMC Q3 Interest Rate Projection, Q3 1st Year Interest Rate Projection, Q3 2nd Year Interest Rate Projection, Q3 3rd Year Interest Rate Projection, and Q3 Long-Term Interest Rate Projection (all at 2 p.m.), and the Fed Chair Press Conference (2:30 p.m.).  The major earnings reports scheduled for Wednesday include GIS before the open.  Then, after the close, FDX and KBH report.

In economic news later this week, on Thursday, Q2 Current Account, Weekly Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, August Existing Home Sales, and Fed Balance Sheet.  Finally, on Friday, S&P US Mfg. PMI, S&P U Services PMI, and S&P Global Composite PMI are reported.

In terms of earnings reports later this week, on Thursday, we hear from DRI and FDS.  Finally, on Friday, there are no major earnings reports scheduled.

In miscellaneous news, CART opened Tuesday at $41.38 after pricing its IPO at $30 (a 39% opening gain).  However, the stock sold off the rest of the day to close at $33.70.  In good news, former IN Congressman Buyer was sentenced to 22 months in prison for insider trading.  This trading did not happen while he was in Congress, but his ties to Washington are likely why he was hired by TMUS as a consultant, gained info on their plans to buy Sprint and traded ahead of the news.  Elsewhere, the Institute of International Finance said global debt hit a record $307 trillion in Q2.  This was a $10 trillion increase over year-end 2022 and a $100 trillion increase over the last decade.  The US, Japan, Britain, and France accounted for the largest increases with China, India, and Brazil having the largest increases among emerging markets.  Finally, the in-fighting among the GOP in the House continues.  Speaker McCarthy tried to open debate on revisions to the $886 billion fiscal defense appropriations bill (widely seen as the easiest of the 12 needed funding bills).  However, five of the hardline MAGA GOP members voted against the motion, causing it to fail 214-212.  Those 5 and about 15 of their colleagues are demanding $120 billion (about 12% overall) is guaranteed to be cut out of domestic spending.  However, there are also calls (GOP and Democrat) to increase the $886 billion military spending budget, which would increase the required domestic spending cuts to achieve the same total budget.  With that giant task ahead, there are 7 business days left to resolve all 12 appropriations bills or pass a continuing resolution to avoid a government shutdown.

With that background, markets are little moved again and trading indecisively this morning. All three major index ETFs gapped up to start the early session, but have traded in a very tight range when they traded at all in the premarket. All three remain below their T-line (8ema) but DIA is getting close to a retest from below. So, for now, the trend of the last two weeks continues to be choppy. If you are looking at a very short timeframe, the momentum has switched from bearish to bullish and back several times during that period. In the mid-term the trend is bearish. A longer outlook shows a bullish long-term trend. The premarket session is just up off the obvious potential support levels that were just below the SPY, QQQ, and DIA on the close Friday. In terms of extension, none of the major index ETFs are far from their T-line and the T2122 indicator is now in the lower side of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move.

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

The market was flat on Monday.  Both the SPY and DIA opened flat.  Meanwhile, QQQ gapped down 0.34% at the open.  From there all three did a very modest morning rally and an equally modest afternoon selloff.  This action gave us indecisive candles across all three major index ETFs.  The SPY printed a white-bodied Spinning Top with a larger upper wick than the lower, the DIA printed a black-body Doji, and QQQ printed what might be seen as a white-bodied, Inverted Hammer.  All three closed little changed and stayed below their T-line (8ema) and 50sma.  All three also held onto the support level that they were sitting on at the close of Friday. This all happened on far-below-average volume in all three major index ETFs.

On the day, five of the 10 sectors were in the green (and red) with Energy (+0.41%) out in front leading half of the market higher, while Consumer Cyclical (-0.75%) led half lower than other sectors.  At the same time, the SPY gained 0.06%, DIA was dead flat +0.00%, and QQQ lost 0.04%.  VXX fell 0.82% lower to close at 20.51 and T2122 fell back but remained in the mid-range at 32.69.  10-year bond yields fell again to close at 4.307% while Oil (WTI) rose another 1.82% to end the day at $92.40 per barrel.  So, in a sense, it was a typical pre-Fed Monday where everyone was just waiting on the Fed decision.  This time around, the entire market thinks (well 99.0% according to the Fed Futures) they already know the Fed decision.  So, if we are waiting on the Fed, it would be waiting to see the verbiage and tone of Fed Chair Powell’s statement.

The only major economic news reported Monday was July TIC (Treasury International Capital) Net Long-Term Transactions.  This measures the difference between long-term foreign securities purchased by US citizens and the US long-term securities bought by foreign investors.  “Long-Term” is a bit of a misnomer here in as much as TIC includes all stocks, bonds, derivatives, options, swaps, currency, and even bank transactions.  It also does not measure the length of hold or even the intended length of the hold. So, TIC is really just a measure of the flow of money into and out of the US.  In other words, it is measuring how the world (including the US) views the US as an investment relative to the entire rest of the world. For July, TIC came in at its lowest level since December of 2021 but was still positive at +$8.8 billion (compared to a forecast of +$116.5 billion and a June reading of +$186.0 billion).  Therefore, in July, the world continued to view the US as the best place to invest money.

In stock news, on Monday AAPL announced that it has received a promising number of pre-orders for its iPhone 15 (10%-12% stronger than the iPhone 14).  That’s both good and bad.  It shows demand but has also forced AAPL to push back the first deliveries into November to avoid seeming to trickle out the phones.  At the same time, GEHC has received a $44 million grant from the Gates Foundation to develop AI-assisted ultrasound technology.  Later, CLX reported it has been fighting with operational issues caused by a mid-August cyberattack.  The company said the attack caused significant damage to its IT infrastructure and forced the company’s automated order processing system offline. The company warned investors to expect a substantial impact on quarterly results.  Elsewhere, the Wall Street Journal reported that TSLA and Saudi Arabia are in the early stages of talks over the opening of a TSLA plant in the Kingdom.  (CEO Elon Musk then denied the report.) Later, C announced they are getting into blockchain by launching “Citi Token Services” to offer digital asset solutions to institutional customers.  At the same time, M announced it will be hiring 38,000 full and part-time workers for the holiday season. (This is down from the 41,000 M hired in the 2022 holiday season and far below the 76,000 in 2021.)  After the close, NSC launched a program to compensate homeowners in East Palestine OH who sell their houses and experience a reduction in value after the Feb. 3 train derailment and chemical spill.  Also after the close, SAN announced it would merge divisions and make a significant leadership reorganization, including the reduction of management layers and job cuts.  Monday evening, a regulatory filing showed that the CEO of SQ was stepping down from her post on Oct. 2 and Chairman Jack Dorsey will take over at least temporarily.  Finally, CART priced its IPO at $30 (top of the estimated range) and will begin trading today.

In stock government, legal, and regulatory news, NVO shares dropped Monday after a MarketWire report claiming the company failed an FDA inspection of its NC plant, with quality control lapses cited in the report.  Later, LYFT agreed to pay a $10 million fine as part of a settlement with the SEC.  The case involved the undisclosed pre-IPO sale of $424 million in shares.  Elsewhere, the FDA approved a GSK treatment for adults with myelofibrosis and anemia.  (GSK acquired the treatment by buying SRRA for $1.9 billion in 2022.)  This will make GSK an immediate competitor in one $2.4 billion market as well as treating two other diseases (markets).  At the same time, the Brazilian telephone regulator approved VIV’s capital reduction plan (which now needs the approval of shareholders).  Near the close, it was reported that Taiwan had approved TSMs’ $4.5 billion investment (working capital) into its AZ chip fab.  However, Investing.com reported that TSM is having trouble finding skilled chip plant workers for its new AZ plant.  As a result, TSM is shifting focus toward a $8.6 fab plant it is building in Japan.  Meanwhile, a federal judge ruled SBUX must face a lawsuit claiming the coffee chain’s “fruit beverages” actually do not contain fruit.  After the close, MS was sued for $750 million by private equity lenders that claimed MS defrauded them in an investment in a high-speed rail company.

In Autoworker contract talks and strike news, F is set for more bad news on the labor front.  The company’s 5,600 Canadian union workers contract expired Monday night at midnight.  Unifor (Canadian version of UAW) said they will remain at the table, but the likelihood of a strike increases each hour.  In other tangentially related news, 44k union workers for Hyundai (HYMTF) in South Korea have approved a new contract (by a vote of 58.8% for and 41.1% against).  The contract provides those workers a one-time bonus, a 12% per year pay increase, and new performance-based bonuses.  Back in the US, GM told 2,000 non-striking workers in KS the company expects to lay them off later this week due to a lack of parts.  In MI, a parts supplier to the Big 3, told state officials it expects to close 4 plants for a month, laying off 300 workers.  At the same time, X shut down one of its plants (Granite City) due to the lack of demand from the automakers, laying off 1,000 workers.  Meanwhile, STLA negotiators told the press that Monday’s talks were “constructive.”  Then, early today, Unifor said it has received a substantial offer from F and is extending the strike deadline by 24 hours to give time for more talks.  In the US, the UWA said it will definitely strike additional plants if “serious progress” is not made by Friday.  On the company side, STLA said it could close 18 US facilities (10 Mopar distribution centers among them) under the new contract (although none has been agreed yet).  However, STLA said it could also bring in new investments and repurpose the Illinois plant (closed in February) into a mega-hug for Mopar distribution.

So far this morning, AZO beat on both the revenue and earnings lines.  This included quarter-on-quarter growth of 6.4%.

Overnight, Asian markets were decidedly in the red on modest moves.  Only Hong Kong (+0.37%) was able to stay in the green.  Meanwhile, Japan (-0.87%), Shenzhen (-0.73%), and Singapore (-0.69%) paced the losses.  In Europe, we see a much more mixed picture at midday.  Russia (-1.34%) and Greece (-1.13%) are the only movers of more than one percent while nine of the 15 bourses are in the green.  The CAC (+0.30%), DAX (-0.06%), and FTSE (+0.15%) lead the region on volume.  In the US, as of 7:30 a.m., Futures are pointing toward a start just on the green side of flat.  The DIA implies a +0.07% open, the SPY is implying a +0.09% open, and the QQQ implies a +0.08% open at this hour.  At the same time, 10-year bond yields are back up to 4.319% and Oil (WTI) is up yet another 1.03% to $92.42 per barrel in early trading.

The major economic news scheduled for Tuesday includes Preliminary August Building Permits and August Housing Starts (both at 8:30 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for Tuesday are limited to AZO before the open.  Then, after the close SCS reports.

In economic news later this week, on Wednesday, we get EIA Weekly Crude Oil Inventories, FOMC Rate Decision, FOMC Statement, FOMC Q3 Interest Rate Projection, Q3 1st Year Interest Rate Projection, Q3 2nd Year Interest Rate Projection, Q3 3rd Year Interest Rate Projection, Q3 Long-Term Interest Rate Projection, and the Fed Chair Press Conference.  On Thursday, Q2 Current Account, Weekly Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, August Existing Home Sales, and Fed Balance Sheet.  Finally, on Friday, S&P US Mfg. PMI, S&P U Services PMI, and S&P Global Composite PMI are reported.

In terms of earnings reports later this week, on Wednesday, GIS, FDX, and KBH report.  On Thursday, we hear from DRI and FDS.  Finally, on Friday, there are no major earnings reports scheduled.

In miscellaneous news, the GOP proposal for a continuing resolution that includes an 8% cut in domestic program budgets lasted all of about 18 hours.  On Monday, 10 far-right MAGA Congressmen that Speaker McCarthy needs to pass such a resolution announced they oppose the idea altogether.  McCarthy can only afford to lose 8 votes unless he can get Democratic support.  Elsewhere, the US military is asking for the help of the public to locate a F-35 fighter that crashed in SC after the pilot ejected. (Am I the only one worried that the DoD can’t find it on its own…or they didn’t think to stick an AAPL airtag in the thing while operating in the US?)  Overnight, the debris field was found about two hours Northeast of the Charleston Joint-Service Base.

With that background, markets are little moved again and trading indecisively this morning. All three major index ETFs gapped up to start the early session, but have traded in a very tight range when they traded at all in the premarket. All three remain below their T-line (8ema) but DIA is getting close to a retest from below. So, for now, the trend of the last two weeks continues to be choppy. If you are looking at a very short timeframe, the momentum has switched from bearish to bullish and back several times during that period. In the mid-term the trend is bearish. A longer outlook shows a bullish long-term trend. The premarket session is just up off the obvious potential support levels that were just below the SPY, QQQ, and DIA on the close Friday. In terms of extension, none of the major index ETFs are far from their T-line and the T2122 indicator is now in the lower side of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move.

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, it was all Bears, all the time in the stock market on a triple-witching day.  The SPY gapped down 0.73%, DIA gapped down 0.49%, and QQQ gapped down 0.37%.  However, that was just the start.  All three major index ETFs continued to sell off until 1:35 p.m.  After that, all three ground sideways, along the lows and in a tight range, the rest of the day.  This action gave us gap-down, large, black candles in all three major index ETFs.  The SPY, DIA, and QQQ all crossed down and closed back below their T-line (8ema) and 50sma.  This happened on above-average volume in the SPY and just below-average volume in the DIA and QQQ.

On the day, all 10 sectors were in the red with Technology (-1.60%) out in front leading the rest of the market lower, while Utilities (-0.36%) held up better than other sectors.  At the same time, the SPY lost 1.55%, DIA lost 1.09%, and QQQ lost 1.71%. VXX shot 3.87% higher to close at 20.68 and T2122 fell back to the mid-range at 42.36.  10-year bond yields rose again to close at 4.336% while Oil (WTI) rose another 1.15% to end the day at $91.20 per barrel.  So, the Bears ended the week showing some strength.  At the same time, we should realize just like Thursday closed just below a potential level of resistance, Friday closed just above a level of potential support.

The major economic news reported Friday included the August Export Price Index (covering items sold), which came in much higher than expected at +1.3% (compared to a forecast of +0.4% and a July reading of +0.5%).  Interestingly, the August Import Price Index (covering inputs or products bought) rose only +0.5% (versus a forecast of +0.3% and a July value of +0.1%).  At the same time, the NY Fed Empire State Mfg. Index coming in far above predicted (but still weak), at +1.90 (compared to a forecast of -10.00 and very far above the August reading of -19.00).  Later, August Industrial Production (month-on-month) was reported stronger than anticipated at +0.4% (versus a forecast of +0.1% but well below the July reading of +0.7%).  On an annual basis, the August Industrial Production (year-on-year) was +0.25%, compared to a July value of -0.04%.  At mid-morning, Michigan Consumer Sentiment was reported below expected at 67.7 (versus a forecast of 69.1 and a previous reading of 69.5).  At the same time, Michigan Consumer Expectations came in slightly above predicted at 66.3 (compared to a forecast of 66.0 and a prior value of 65.5).  In addition, the Michigan Consumer 1-year Inflation Expectation was DOWN significantly to 3.1% (versus a forecast and previous reading of 3.5%).  The same was true for the Michigan Consumer 5-year Inflation Expectations, which came in a 2.7% (compared to a forecast and prior reading of 3.0%).

In stock news, on Friday, PLNT shares plunged as the board ousted its CEO.  At the same time, Auto industry analysts reported Friday that for 2023 China’s new car sales are expected to be 25% electric, up from only 4% five years ago.  This has helped TSLA and Chinese EV-makers like BYDDY.  (It is worth noting that Chinese automakers traditionally have a 5% profit margin but that has been compressed to 3% in the last 3 years.  Regardless, the low margins typically make them by far the least expensive options for Chinese buyers.)  However, this large adoption of EVs poses a major issue for F and GM.  With no major existing EV offerings in China, those companies are seeing serious market share erosion.  Elsewhere, a day after it was reported NXST is in talks with DIS about purchasing the Mouse House’s ABC, FX, and Nat. Geographic units, media mogul Byron Allen made his own $10 billion bid to buy those units.  At the same time, the CEO of NSC made the media rounds Friday in continuing attempts to recover public reputation following the February derailment and contamination event in East Palestine OH.  The CEO pledged the railroad is going to enhance safety across its network, implementing recommendations from external consultants the company hired to evaluate its rail operations.  The PR blitz included providing that small Ohio town a $4.3 million new water treatment plant after tests have had residents using bottled water since February.  Later, VLO announced it had authorized a $2.5 billion share repurchase plan with no expiration date.

In stock government, legal, and regulatory news, AAPL moved to soothe the concerns of the French and Belgian governments (who took action against the iPhone Model 12 over excessive radiation levels).  AAPL said it will release a software update that will reduce the radiation to acceptable levels.  Later, EU antitrust regulators announced they had set an October 19 deadline for a decision on allowing or blocking the PFE $43 billion acquisition of SGEN.  Elsewhere, the FBI leaked (and later the hackers confirmed) that “Scattered Spider” (a sub-group of the ALPHV ransomware gang) is responsible for the cyber-attack that has crippled MGM for almost a week.  (ATMs, slot machines, room keys, and many other electronic systems have been paralyzed at MGM hotels and casinos.)  This is the same group suspected to have attacked (and been paid a $15 million ransom) by CZR recently.  However, Scattered Spider has made no claim of responsibility for that attack.  Later, the FAA reduced minimum flight requirements at NYC airports through October 2024 to give airlines another year (after already having been given a six-month grace period).  This grace period will help DAL and JBLU the most as they had been the ones unable to meet the requirements and at risk of losing gates and landing slots.  However, the added leeway may give other airlines additional scheduling flexibility as well.  Later, the state of CA filed suit against XOM, CVX, SHEL, BP, COP, and the industry trade group American Petroleum Institute. The suit accuses the firms of causing tens of billions of dollars in damage to the state (environment and climate-related disasters which cost the state untold sums).  The suit also accuses the defendants of deceiving the public about the dangers of fossil fuels for decades. Reuters reported that the only response from defendants, so far, is that the courtroom, and in particular a state jurisdiction courtroom, is not the right venue to address climate change.

In Autoworker contract talks and strike news, unless you’ve been hiding under a rock, you know the UAW began a “targeted strike” after the previous labor contract expired at midnight Thursday night. As of that time 12,000 of the union’s 146,000 workers (8%) went on strike at one plant each of the Big 3 automakers.  Late Friday, GM increased its offer to a 20% pay increase over 4 years and STLA boosted its offer to a 19.5% over the length of the next contract.  So far, the impacts on F, GM, and STLA have not been heavy.  Still, F laid off 600 of its non-striking workers at one plant because of a parts shortage caused by the strike.  GM told 2,000 workers at a KS plant it will likely shut this week due to a lack of parts from its striking plant.  The good news for the three stocks (and companies) is that they have been preparing for the strike for a year.  All three have huge lots filled with complete or nearly completed vehicles as well as substantial component stockpiles.  (That was a heavy lift for an industry that long ago went to just-in-time and demand-pull inventory models.)  So, the top industry analysts expect GM, F, and STLA to not have large-scale finished product or component shortages as long as the strike does not last months.  Meanwhile, the UAW has about $827 million in its “strike fund.”  Depending on how many of its 146k workers are on strike or laid off, that could be a big enough war chest to last quite a while.  If all 146k were striking, that would be 11 weeks of pay coverage.

Despite the strike, negotiations, never really stopped.  Over the weekend, on Saturday, STLA increased its offer to a 21% wage hike (10% immediate, the rest over four years), some inflation protection, and a partial end to wage tiers.  The UAW immediately rejected that offer saying that the Big 3’s executive pay has increased more than 40% in the last 4 years.  As an aside, the CEO pay of the Big 3 has all increased about 40% over the life of the last UAW contract.  (Other executive pay was not easily found.) All three CEOs now make 360-370 times as much as the most experienced UAW members.  For reference, a starting autoworker (lowest tier) for the Big 3 makes an average of just under $18/hour.  However, “temp workers,” which all three companies use but STLA in particular uses extensively, make just $15/hour.  That “temp worker” rate has not changed in 14 years.  At the experienced end of the spectrum, UAW members make $32.30/hour.  Back to the main topic. On Sunday, the UAW said the obvious that the number of plants under strike may expand.  At about the same time, the White House said it will be sending a team of negotiators to Detroit to help the sides reach a deal to end the strike.

After the close, mixed but leaned toward the red side.  Hong Kong (-1.39%), Taiwan (-1.32%), and South Korea (-1.02%) paced the losses while Japan (+1.10%) was by far the biggest gainer.  However, in Europe, we see red across the board at midday.  The CAC (-1.03%), DAX (-0.61%), and FTSE (-0.35%) are typical of the range and lead the region lower on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.09% open, the SPY is implying a +0.06% open, and the QQQ implies a -0.01% open at this hour.  At the same time, 10-year bond yields are up to 4.343% and Oil (WTI) is up three-quarters of a percent in early trading.

The major economic news scheduled for Monday is limited to July TIC Net Long-Term Transaction (4 p.m.).  There are no major earnings reports scheduled for either before the open or after the close.

In economic news later this week, on Tuesday Preliminary August Building Permits, August Housing Starts, and API Weekly Crude Oil Stocks are reported.  Wednesday, we get EIA Weekly Crude Oil Inventories, FOMC Rate Decision, FOMC Statement, FOMC Q3 Interest Rate Projection, Q3 1st Year Interest Rate Projection, Q3 2nd Year Interest Rate Projection, Q3 3rd Year Interest Rate Projection, Q3 Long-Term Interest Rate Projection, and the Fed Chair Press Conference.  On Thursday, Q2 Current Account, Weekly Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, August Existing Home Sales, and Fed Balance Sheet.  Finally, on Friday, S&P US Mfg. PMI, S&P U Services PMI, and S&P Global Composite PMI are reported.

In terms of earnings reports later this week, on Tuesday we hear from AZO and SCS.  Then Wednesday, GIS, FDX, and KBH report.  On Thursday, we hear from DRI and FDS.  Finally, on Friday, there are no major earnings reports scheduled.

In miscellaneous news, US oil prices hit the high of the year on Friday on what oil analysts say was China recovery optimism and tight supply (mostly from Russian and Saudi extended production cuts).  Elsewhere, Employment industry firm Challenger, Gray & Christmas told Reuters on Friday that their surveys of retailers have led them to predict the industry will high the fewest seasonal workers since 2008.  CG&C estimate the industry will hire 410k seasonal workers, compared to more than 519k in 2022 (and that itself was a 26% decline from 2021).  Finally, late Sunday night, House Republicans announced they have reached a deal on a continuing resolution that would fund the government for another month (through Oct. 31). The deal hammered out by the GOP alone (basically a deal between the small radical-right MAGA group and the rest of the GOP caucus) cuts domestic spending, enforces the MAGA immigration demands, and keeps defense spending as-is. The GOP has the votes to pass this in the House but it is very likely dead on arrival in the Senate. Even if passed and signed, it is still unclear what the implications to existing programs would be of the reduced domestic spending. So, I guess you could see this as progress. However, it is far from a “done deal” and there are 10 days left to avert a government shutdown.

With that background, markets are little moved but trading decidedly bearish this morning. All three major index ETFs gapped up to start the early session, but have traded lower across the whole premarket to give us black-bodied candles with almost no wick at least as of now. All three remain below their T-line (8ema) and seem to be picking up steam in the early session (perhaps in sympathy with Asian and European trading). So, for now, the trend of the last two weeks has been choppy. If you are looking at a very short timeframe, the momentum has switched from bearish to bullish and back several times during that period. A longer outlook shows a bearish mid-term and a bullish long-term trend. The premarket session is also testing the obvious potential support levels that were just below the SPY, QQQ, and DIA on the close Friday. In terms of extension, none of the major index ETFs are far from their T-line and the T2122 indicator is now at the top of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move.

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 Thursday, markets gapped higher, opening up 0.57% in the SPY, up 0.59% in the DIA, and up 0.44% in the QQQ.  However, the Bears said “Not so fast” as all three major index ETFs started immediately selling and didn’t stop until 10:25 a.m. The QQQ even recrossed its opening gap during that move.  Still, that was the last we heard from the Bears as the Bulls stepped in to lead a rally that lasted the rest of the day (although to be fair, most of the afternoon was more of a sideways grind).  This action gave us gap-up, white-bodied, Spinning Top candles in all three major index ETFs.  All three are back above their T-line (8ema) and 50sma.  QQQ even retested its T-line from above and passed the test while DIA did the same with its 50sma.

On the day, all 10 sectors were in the green with Basic Materials (+1.89%) out in front, leading the rest of the market higher, while Healthcare (+0.35%) lagged well behind the other sectors.  At the same time, the SPY gained 0.86%, DIA gained 1.00%, and QQQ gained 0.82%. This all happened on just below-average volume in all three major index ETFs. (A bit better volume than we saw the three earlier days this week.) VXX dropped 2.93% to close at 19.91 and T2122 shot back up to just outside of overbought territory at 79.90. 10-year bond yields rose to close at 4.288% while Oil (WTI) spiked to end the day at $90.53 per barrel.  So, with the exception of some “fade the gap” sentiment just after the open, it was the Bulls’ day and a pretty steady and boring one at that. Still, we closed just below potential resistance levels and that should not be ignored.

The major economic news reported Thursday included August Core PPI (month-on-month), which came in just as expected at +0.2% (right on the forecast but well down from the July +0.4% reading).  However, August PPI (overall, not just core, month-on-month) came in hot at +0.7% (versus a forecast and July value of +0.4%).  At the same time, August Core Retail Sales also came in above the predicted level at +0.6% (compared to a forecast of +0.4% but down from the July reading of +0.7%).  Overall August Retail Sales (month-on-month) also came in well above anticipated at +0.6% (versus a forecast of +0.2% and even above the July +0.5% value).  Later, July Retail Inventories were reported to have fallen, reported at flat +0.0% compared to the June +0.1% reading.  At the same time, July Business Inventories also came in flat at +0.0% (below the forecast of +0.1% but up from the June -0.1% value).  Finally, after the close, the Fed Balance Sheet Weekly report showed a continued decline but a much smaller one this week.  This week it fell just $2 billion from $8.101 trillion to $8.099 trillion.  This was the smallest decrease since March.

In new issue news, the much-hyped ARM IPO went live Thursday, opening at $56.21 after the stock had priced at $51.  It traded as high as $66.25, as low as $55.55, and closed at $63.59.  Elsewhere, a new ETF (QQQY) began trading Thursday that is aimed at taking advantage of the craze of zero and short-dated equity options.  The new ETF aims to achieve a monthly yield for investors by selling 0DTE put options on the Nasdaq-100 index (hoping to capture the premium) in combination with buying Treasuries.

In stock news, UP appointed a member of the DAL board (George Mattson) as its new CEO. This came weeks after UP received a $500 million lifeline loan from a consortium of airlines (including DAL).  Later, NVO announced it still intends to split its stock (ADR) 2-for-1 on September 20, despite its 23% surge since August 4 and 41% gain this year.  Elsewhere, Reuters reported unnamed sources tell it that TSLA is very close to announcing new manufacturing technology that will allow the company to die-cast the entire underbody of its cars.  (As opposed to making or buying and then assembling 400 underbody components now.)  If/when implemented, a large amount of labor and cost would be removed from each car, allowing TSLA to achieve lower prices, higher margins, or more likely both.  The technology would also allow TSLA to launch a new vehicle designed from the ground up in 18-24 months versus the current 3–4-year timeline.  At the same time, TSM announced that it has acquired a 10% stake in the INTC Nanofabrication business unit for $430 million.  This comes after INTC sold a 20% stake in the unit to Bain Capital.  By midday, CZR disclosed that it had also suffered a cyber attack (and paid a $15 million ransom to the attackers) before MGM suffered a very similar attack Sunday.  At the same time, the CFO of T said the company is optimistic it will reach its full-year free cash flow forecast of $16 billion.  After the close, Reuters reported the new CEO of BAYRY plans to cut management jobs as a first step in his plan to overhaul the German industrial/chemical giant.  (No number of jobs or timetable was provided.)  Also after the close, Reuters reported that DIS has had preliminary talks with NXST over the sale of DIS subsidiary ABC.  (NXST operates a regional network of TV stations.) 

In stock government, legal, and regulatory news, the Indian state of Goa told ABT that it plans to suspend the company’s antacid manufacturing license.  This comes after Goa authorities found contamination risks and sanitation issues in the plant.  (ABT has a 7% share of the Indian market in that segment with annual sales of about $11 million.) Later, a day after France halted the sale, Belgium said Thursday it is reviewing the potential health risks of AAPL iPhone 12 models.  However, there does not appear to be an EU-wide ban movement underway yet as the European Commission is waiting on feedback from its member countries before deciding on what, if any, action to take on the matter.  By midday, the US Supreme Court froze an order by a lower court that had curbed the Biden Administration’s ability to engage with social media companies like META, GOOGL, and X (Twitter) in an effort to get them to remove misleading, false, or dangerous content.  In stock legal news, GOOGL hinted at part of its antitrust defense.  The search giant shared data it says shows that users are “happy to stick with Google search when pre-installed on their devices and quickly switch when competing search engines are pre-installed.”  On the other side, the government introduced evidence showing that GOOGL spends $10 billion each year to keep Google as the default search engine in phones, tablets, and browsers.  In the afternoon, a proposed class action lawsuit was filed against several companies, including JNJ, PG, WBA, GSK, and KVUE alleging these companies deceived consumers in advertising of over-the-counter cold medicines that contain an ingredient an FDA panel just recently unanimously ruled was ineffective (no more effective than placebo).  No damage information is available yet, but that segment of products generates about $1.76 billion in annual sales in the US.  After the close, GOOGL agreed to pay the state of CA $93 million to resolve a lawsuit claiming the company’s search engine misled consumers about its location tracking practices.  (GOOGL continues to track and use people’s location data for advertising even after they have turned off the “Location History” setting.)  Also after the close, UBER said it would appeal a $205 million fine from a Brazilian court over a ruling that the company used “irregular labor relations” for treating drivers as contractors and not as employees.

After the close, ADBE, CPRT, and LEN all reported beats on both the revenue and the earnings lines.  (ADBE and CPRT both had actual quarter-on-quarter earnings growth while LEN beat a reduced number.)  It is worth noting that both ADBE and LEN raised their forward guidance. 

Overnight, Asian markets were mostly green again.  Only Shenzhen (-0.52%), Shanghai (-0.28%), and Thailand (-0.20%) were in the red.  The other nine Asian exchanges were led higher by Australia (+1.29%), Japan (+1.10%), and South Korea (+1.10%).  In Europe, with the sole exception of Russia (-0.08%), the bourses are green across the board at midday.  The CAC (+1.66%), DAX (+1.07%), and FTSE (+0.83%) are leading a broad and strong move higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed and modest start to the day.  The DIA implies a +0.22% open, the SPY is implying a +0.09% open, and the QQQ implies a -0.08% open at this hour.  At the same time, 10-year bond yields are popping higher at 4.324% and Oil (WTI) is up slightly to $90.66 per barrel in early trading.

The major economic news scheduled for Friday includes August Export Price Index, August Import Price Index, and NY Empire State Mfg. Index (all at 8:30 a.m.), August Year-on-Year Industrial Production and August Month-on-Month Industrial Production (both at 9:15 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations (all at 10 a.m.).  There are no major earnings reports scheduled for either before the open or after the close. 

In Autoworker contract talks or strike news, GM sweetened its offer to include a 20% pay increase over 4 years as well as an unclear inflation-protection mechanism, and an increase to 5 weeks of vacation.  For their part, F CEO Farley made no new offer but told reporters that the UAW’s 40% wage hike demand would put the company out of business (in bankruptcy).  In addition, Farley said he has not received a counter-offer to the company’s 20% wage increase proposal.  (To be fair, the union did lower its demand to a 36% increase over the new contract.)  With just eight hours left until the current contract expired, the AP reported the sides remained far apart and the union’s targeted individual-plant strikes looked unavoidable.  In the end, no deal was reached and at midnight, autoworkers went on strike at three key plants.  The GM truck and van plant in MO, the F Ranger and Bronco pickup plant in MI, and the STLA Jeep plant in OH are the first plants to see pickets.  The UAW says the 3 strikes so far cover just 12,700 union members (over more than 146,000).  The three plants selected produce high-profit vehicles for the automakers.  (UAW President Fain had previously announced that the strikes will rotate, move to different plants, and increase in number to cause maximum uncertainty and disruption if the strike continues.  The idea is to force the Big 3 to live with the chaos of unpredictable operations and shortages, even as most union workers continue to draw normal paychecks. However, the Big 3 also have the option of locking all union employees out by closing all their plants.  Neither option is good for the three largest automakers.)

In miscellaneous news, China struck back (rhetorically) at the EU Thursday after European Commission President von der Leyen had announced an investigation into China over electric vehicle subsidies that allowed Chinese carmakers to flood the world (Europe) with EVs at artificially low prices.  China, predictably, blasted the European Commission move as protectionist, and anti-competitive and said it would harm economic relations.  This last part caused concern among the German car industry which sells a lot of cars in China.  Meanwhile, in the US, frustrated GOP House Speaker McCarthy provoked and taunted right-wing members of his caucus over their threats and pseudo-extortion.  (The most extreme members of the small right-wing “Freedom Caucus” have publicly threatened to force McCarthy out of his Speakership unless their list of demands is met in recent days.)  McCarthy told Republican Congressmen that if they wanted to remove him, they should file the…motion, but they should get out of the way of “everybody’s work.”  Specifically, he told them nobody wins a government shutdown and he is set on not having that happen.  However, there are only 9 “working days” (16 calendar days) left before a shutdown is forced by the House’s failure to pass the 12 different required appropriation bills.  Elsewhere, China cut the reserve requirements for banks for the second time this year.  However, this intended stimulus was minor to say the least, reducing the cash reserves requirement by a quarter percent to 7.4%.  Still, the move is expected to free up just under $69 billion for loaning and investment into medium and long-term projects.

With that background, it looks like markets are undecided this morning. The three major index ETFs are little moved from the Thursday close and are printing small candles in the premarket session. All three remain above their T-line (8ema) but they are also close to that average and could easily recross it if the Bears find some strength. The SPY, DIA, and QQQ are all also above their 50sma again this morning. So, for now, they market remains in a bullish trend. However, we should also note that there is an obvious potential resistance level just above the SPY, QQQ, and DIA. The short, mid, and long-term trends remain bullish, but action has been choppy within those trends recently. In terms of extension, as mentioned, none of the major index ETFs are far from their T-line and the T2122 indicator is now at the top of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move. Finally, this is Friday. So, pay yourself and prepare your account for the weekend with whatever hedging or lightening up is appropriate for your risk tolerance.

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 flat on Wednesday with “gapping” up 0.04%, DIA gapping up 0.08%, and QQQ gapping up 0.04%.  At that point, the two large-cap index ETFs traded dead sideways while the QQQ made a small rally and then sold off in the first 30 minutes.  All three then sold off until 10:20 a.m., before rallying back up until 11 a.m.  After that, the SPY, DIA, and QQ all traded sideways in a very tight range until 2 p.m.  This led to a selloff that lasted until 3:15 p.m. before the day ended on a modest 45-minute rally.  This led to indecisive Spinning Top candles in all three major index ETFs, white-bodied in the SPY and QQQ as well as a black-bodied on in the DIA.  SPY and DIA both failed a retest and closed tight below their T-line (8ema) and 50sma while QQQ closed tight above its own T-line and 50sma.  This all happened on well-below-average volume in all three major index ETFs. 

On the day, seven of the 10 sectors were in the red with Utilities (+1.02%) way out in front leading the rest of the market higher, while Energy (-0.71%) was by far the biggest laggard sector.  At the same time, the SPY gained 0.12%, DIA lost just 0.19%, and QQQ gained 0.38%.  VXX fell just over two percent to close at 20.51 and T2122 dropped back down to just inside the oversold territory at 19.51.  10-year bond yields fell to close at 4.254% while Oil (WTI) ended the day flat at $88.85 per barrel.  So, on the whole, it was a very indecisive and volatile day (at least within a small range).  

The major economic news reported Wednesday included August Core CPI (month-on-month) which came in a bit hot at +0.3%, compared to a forecast of +0.2% which was also the July value.  However, the August Core CPI (year-on-year) was in line with what was expected at +4.3% (versus a +4.3% forecast and down from the July reading of +4.7%). Meanwhile, the August CPI month-on-month came in as predicted at +0.6% (compared to a +0.6% forecast but far above the July value of +0.2%).  At the same time, August CPI year-on-year was higher than anticipated at +3.7% (versus a forecast of +3.6% and the July reading of +3.2%).  Later the EIA Weekly Crude Oil Inventories showed a significant unexpected build of 3.954 million barrels (compared to a forecast calling for a drawdown of 1.912 million barrels and far above the prior week’s 6.307-million-barrel drawdown). Finally, at 2 p.m., the Federal Budget Balance was massively better than expected at +89.3 billion, yes it was a surplus, (versus a forecasted -$240 billion and the August deficit of $221 billion).  In light of the CPI data, it is worth noting that Wednesday night the CME Fedwatch Tool still shows that markets have priced in a 97% chance that the Fed will leave rates unchanged next week.

In stock news, German jet engine provider MTUAY said Wednesday that it will begin talks with RTX over the $751 million hit MTUAY will suffer due to problems with RTX’s Pratt & Whitney engines.  Elsewhere, DAL is facing a proposed class-action suit in Los Angeles over “Greenwashing” for allegedly false advertising in which DAL claimed to be “carbon-neutral” based on carbon offsets the company had purchased.  Later, XOM disclosed that it’s invested $30 billion into various projects in the Qatar LNG industry.  At the same time, USB was down hard after its three top officers made comments at an industry conference stating that slow loan growth would be a drag in its Q3 performance.  The CEO also said he expected “a little bit more of the effect in Q4.”  In other banking news, C announced a major reorganization Wednesday, cutting entire layers out of the management hierarchy and giving the CEO direct oversight of the five core business units.  Interestingly, while “job cuts” were part of the announcement, no numbers, timing, or specific senior manager exits were mentioned.  Later, EPOW shares jumped after it announced it had received interest from TSLA over its battery component products.  In less promising news, MMM warned that it foresees a “slow growth environment” in 2024, particularly mentioning projected weakness in electronics and consumer segments.  Later SGML announced it is “exploring strategic options” for the whole company after it has received multiple proposals for its Brazilian unit.  After the close, Reuters reported that GS has fired “several” executives in its transaction banking unit after they violated company communications policies (using banned apps like WhatsApp for secret interactions).  Also after the close, SBUX announced that founder and former three-time CEO Schultz will retire from the company board on September 30.  Wednesday evening, the head of US operations for TD said that the US Justice Dept. probe into the bank’s money laundering compliance is “manageable.”  However, he said he expects fines and non-monetary penalties.  Wednesday night, BRKB announced it sold 5.5 million shares of HPQ this week, unraveling a small portion of its $3.27 billion position in the stock.  Finally, The long-anticipated ARM IPO goes live today, after the Wall Street Journal reported Wednesday that it will be priced at $52 per share (top end of its earlier-announced range).

In stock government, and regulatory news, the NASDAQ has formally submitted an application to the SEC, seeking approval to list an ETF the combines the spot and futures contract prices of Ethereum cryptocurrency. The fund, Hashex Nasdaq Ethereum ETF, would be offered by a Brazilian asset management company managed by Toroso Investments.  Elsewhere, the NHTSA announced that TM has issued recalls for nearly 22k 2023 Tundra and Tundra Hybrid vehicles (due to load carrying labeling that can encourage usage at unsafe load capacities).  Overseas, China said that it “has not banned the purchase or use of foreign phones (AAPL).  However, at the same time, the spokesman said they had noticed a lot of recent media exposure over security incidents related to AAPL phones and the Chinese government placed great importance on information security…and will monitor things closely.  (Great house you have there.  It would be a shame is it burned down.  AAPL gets 20% of its revenue from China.)  At the same time, the FBI announced it was investigating the cyber attack at MGM that has kept the hotel and casino operator’s systems paralyzed for three days now.  Meanwhile, AAPL defended its iPhone 12 model after a French watchdog agency halted the sale of that model, claiming the phone breaches EU radiation exposure limits.  AAPL claims the 12 model (2020) phone meets international standards for radiation, but French tests have now found otherwise.  This raises the possibility of European-wide bans on the sale of model 12 iPhones.  After the close, the EEOC filed suit in AR against WMT over allegations it fired hourly workers with disabilities who could not pass a computer-based test which had no relation to their jobs.  (WMT has since discontinued the tests but did not offer to rehire those workers it fired.)  Also after the close, Elon Musk told reporters that while he can’t read lawmaker’s minds, the majority did raise their hand when asked if they felt there was a need from more AI regulation.  (The day-long closed-door session was meant to be a primer for lawmakers on AI technology and issues with speakers including the CEOs from GOOGL, META, NVDA, MSFT, IBM, and TSLA as well as former MSFT CEO Bill Gates.)

In stock legal news, a federal judge in Washington DC ruled that DAL and UAL must face a consumer antitrust class action case that accuses the airlines of conspiring to drive up domestic airfares by reducing the number of seats available.  (AAL and LUV have already settled for $45 million and $15 million respectively over this same claim.)  Elsewhere, in the GOOG antitrust case, Wednesday, a former GOOG executive testified that the company aggressively sought “exclusive” deals with mobile carriers for use of its search engine.  Later, a US Appeals Court questioned why a shareholder lawsuit against PCG officers and directors had been halted since September 2022.  A lower court judge halted the case at company request as PCG pursued bankruptcy.  The three-judge panel called the delay puzzling and questioned what efficiency was being gained by the delay. 

Overnight, Asian markets were mostly in the green.  South Korea (+1.51%), Japan (+1.41%), and Taiwan (+1.36%) paced the gainers while the only three red exchanges were Shenzhen (-0.57%), New Zealand (-0.38%), and Malaysia (-0.27%).  In Europe, the only red at midday comes from Russia (-1.24%).  Meanwhile, The FTSE (+1.24%), CAC (+0.41%), and DAX (+0.24%) lead the region higher.  In the US, as of 7:30 a.m., Futures are pointing toward a higher open.  The DIA implies a +0.30% open, the SPY is implying a +0.44% open, and the QQQ implies a +0.45% open at this hour.  At the same time, 10-year bond yields are up a bit once again to 4.262% and Oil (WTI) is up 1.32% to $89.69 per barrel in early trading.

The major economic news scheduled for Thursday includes August Month-on-Month PPI, Weekly Initial Jobless Claims, and August Retail Sales (all at 8:30 a.m.), July Business Inventories and July Retail Inventories (both at 10 a.m.), and the Fed Balance Sheet (4:30 p.m.).  There are no major earnings reports before the open.  However, after the close, ADBE, CPRT, and LEN report. 

In economic news later this week, on Friday, the August Export Price Index, August Import Price Index, NY Empire State Mfg. Index, August Year-on-Year Industrial Production, August Month-on-Month Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Friday, there are no major earnings reports scheduled again.

In miscellaneous news, Bloomberg reported Wednesday that global central banks are not as down on US Treasuries as the media might have you believe.  In fact, demand is consistent and bond buying is on pace to top last year’s $183 billion as central banks are trying to scoop up beaten-down US bonds.  The article pointed out that currency exchange rate differences accounted for all of the changes in the value of bond sales (not the quantity).  Elsewhere, the EPA issued a surprising report that claimed the US is on track to reduce carbon emissions between 35% and 43% by 2030 (compared to 2005 levels). The agency attributed this to Inflation Reduction Act programs. However, Republicans want to kill those programs in support of industry and would likely dispute those findings as “just made up to take credit.” Meanwhile, on the other side, Environmentalists would likely dispute the findings as pollyannish and overly optimistic, especially given continuing industry pushback and the 6.25 years left between now and 2030.   In other Congressional news, GOP House Majority Whip Emmer introduced a bill aimed at preventing the Fed from creating a Central Bank Digital Currency.  While he claimed this was needed because President Biden “is willing to compromise American’s right to privacy,” he did not mention the idea was first proposed (and studies of the idea began during) the Trump Administration and that the Fed is not actually part of any branch of government.  Meanwhile, on a similar topic, the fifth-largest Australian bank (Macquarie) announced it will begin phasing out cash, check, and phone operations in favor of digital-only transactions.  Finally, the London Metal Exchange reported that Copper stockpiles have reached the highest level in two years, citing a decline in the expected demand from China.

In Autoworker contract talks or strike news, President Biden said Wednesday that he expects the UAW and major automakers to work around-the-clock to avoid a strike.  He also said the White House was engaged with both sides encouraging progress in the negotiations.  For its part, the UAW outlined plans for a series of strikes targeting specific individual auto plants of all three top carmakers.  However, the currently planned strikes would not be company-wide for any of the three.  (This would be the first ever simultaneous strike against the Big 3.)  The current contract expires tonight at midnight and the strikes have already been authorized by workers.  The union said the best offer from the companies was a 20% wage hike spread over 4.5 years offered by F with the other two offering two to 2.5% less than F.  Meanwhile, the UAW lowered its demand from 40% to 36% over the same 4.5-year period.  On Wednesday night, F CEO Farley “rebuffed” comments made by UAW President Fain (who had said F was not taking bargaining seriously).  Instead, Farley blamed Fain for giving “no genuine counteroffer” to the most recent F proposal.  Farley went on to blame Fain for being absent from a Tuesday meeting that he and F Chair Bill Ford expected him.  (Fain later replied he was elsewhere meeting with STLA negotiators.)  As a side note, it does seem odd and unwieldy to hold all three negotiations at the same time, but separately.  Yet the companies do claim to have different issues and situations.  The bottom line of all this is that we seem to be 16 hours from strikes at individual auto plants, which will last varying lengths and rotate between plants for each automaker (a tactic designed to force the companies to either lock all autoworkers out or cause maximum chaos).

With that background, it looks like the Bulls are making at least a modest push this morning. All three major index ETFs are back above their T-line (8ema). The SPY and QQQ are also back above their 50sma while the DIA is just below that average. All three gave us “gap ups” in the early session but the candles are still small and are not showing premarket follow-through (at least yet). The short, mid, and long-term trends remain bullish, but action has been choppy within those trends recently. In terms of extension, none of the major index ETFs are very far from their T-line and the T2122 indicator is now just inside the oversold range. So, there is plenty of slack for either the Bulls or the Bears to make a move. Again, it’s a matter of finding the buyers or sellers to get the move started…one way or the other.

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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