Thursday was a divergent day with the Bears in control in the SPY and QQQ and the Bulls hanging on in DIA.  This started with a 0.21% gap down in the SPY, a 0.74% gap down in the QQQ, and a 0.23% gap up in the DIA.  Then the Bulls led a 20-minute modest rally.  However, from there SPY and QQQ sold off the rest of the day ending the day just up off the lows.  Meanwhile, the DIA continued to rally until 12:20 pm only to sell off modestly the rest of the day, ending up about 0.27% above the open.  This action gave us an Evening Star in the SPY and QQQ (with the QQQ even closing back below its T-line) as well as a white-bodied, high-wick candle in the DIA.  It is also notable that QQQ saw significantly higher-than-average volume, with above-average volume in the DIA, but well less-than-average volume in the SPY. 

On the day, seven of the 10 sectors were in the green with Utilities (+1.34%) way out front leading the way higher and Technology (-02.48%) and Consumer Cyclical (-1.79%) dragging the rest of the market lower.  At the same time, the SPY lost 0.66%, DIA gained 0.50, and QQQ lost 2.31%.  The VXX climbed 0.38% to 23.99 and T2122 fell but remains well into the overbought territory to 88.11.  10-year bond yields spiked up to 3.856% while Oil (WTI) was up 0.37% to close at $75.63 per barrel. So, Thursday looked like a reversal day in the QQQ (which has led markets all year) and to a lesser extent in the SPY.  However, neither of them has broken its uptrend yet.  On the other hand, the DIA (which has lagged all year) held up relatively well, gaining on the day. 

The major economic news on Thursday included Weekly Initial Jobless Claims coming in lower than expected at 228k (compared to a forecast of 242k and the prior week’s 237k).  At the same time, Philly Fed Manufacturing Index also came in lower than predicted at -13.5 (versus a forecast of -10.0 but slightly better than the June reading of -13.7).  The Philly Fed Mfg. Employment Index came in better than anticipated at -1.0 (compared to a forecast of -4.5 but still worse than June’s -0.4).  Later the June Existing home sales were reported as less than expected at 4.16 million (versus a forecast of 4.20 million and the May value of 4.30 million).  This was a month-on-month 3.3% decline as compared to the May value of +0.2%.  Elsewhere, US mortgage rates fell significantly in the week ending July 20.  30-year, fixed-rate mortgages averaged 6.78% (the lowest level in four weeks) for the week down from 6.96% the week prior.  Then, after the close, the Fed said that Bank borrowing from the two emergency lending programs increased in the week ending July 19 going from $105 billion to $105.56 billion. 

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In stock news, GOOGL announced that, for the first time ever, YouTube has hiked prices for premium subscribers of multiple YouTube services.  Elsewhere, the CEO of UAL confirmed previous reports that the airline is having trouble getting pilots to take promotions to the captain role.  (50% of UAL’s 978 captain job openings have gone unfilled in the past year.)  The reason has been reported to be that Captain pilots have a much less predictable schedule in addition to a bigger paycheck.  Meanwhile, in its earnings call, TSLA confirmed that it is in preliminary discussions about licensing its “Full Self Driving” software to a major automaker.  Speculation is that the automaker involved would be STLA since F and GM already have their own self-driving programs well underway.  At the same time, AMC announced it has dropped its previous plan to charge tiered ticket prices based on the seat location within the theatre. 

In stock legal and regulatory news, the bill which increases the mandatory retirement age of pilots from 65 to 67 passed the US House in a large-majority bipartisan vote.  Elsewhere, the NHTSA said that TSLA has recalled 15,000 Model S and Model X cars due to a potential front seatbelt issue.  At the same time, an executive from STLA has pleaded guilty to Dept. of Justice charges of conspiracy to breach the Clean Air Act (by cheating on emissions testing).  Later, a US Appeals Court ruled that PZZA cannot force its delivery drivers to arbitrate claims that the company violated federal law by not reimbursing for vehicle expenses (mileage) after it was revealed the lead driver in the class-action suit had never even seen the arbitration agreement the company was trying to invoke to get the case dismissed.  Meanwhile, Bloomberg reported that the FTC is poised to pause its internal trial against MSFT over the ATVI acquisition.  At the same time, the US Dept. of Transportation has opened an investigation into DAL after a loaded plane sat on the tarmac without air conditioning for four hours Monday in 111-degree heat in Las Vegas.  (Multiple passengers had to be treated by medics.)

After the close, COF, BANF, ISRG, PPG, and SCHL all reported beats on both the revenue and earnings lines.  Meanwhile, ASB and OZK beat on revenue while missing on earnings.  On the other side, CSX and WRB both missed on revenue while beating on earnings.  Unfortunately, KNX missed on both the top and bottom lines.

Overnight, Asian markets were mixed with Hong Kong (+0.78%), Thailand (+0.53%), and Malaysia (+0.49%) leading the gainers while India (-1.17%), Taiwan (-0.78%), and Japan (-0.57%) pacing the losses.  In Europe, we see a similar picture taking shape with a lean slightly more to the green side at midday.  The CAC (+0.29%), DAX (-0.41%), and FTSE (+0.11%) lead on volume and are fairly typical of the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.04% open, the SPY is implying a +0.26% open, and the QQQ implies a +0.53% open at this hour.  At the same time, 10-year bond yields are down 3.837% and Oil (WTI) is rallying now up 1.10% to $76.46 per barrel in early trading.

On Friday, there are no major economics news scheduled.  The major earnings reports scheduled for before the opening bell include AXP, ALV, AN, CMA, HBAN, IPG, RF, ROP, and SLB.  However, after the close, there are no reports scheduled.    

So far this morning, ALV, AN, DNKEY, HBAN, IPG, NHYDY, and ROP all reported beats on both the revenue and earnings lines.  Meanwhile, AXP and SLB missed on the revenue line while beating on earnings.  On the other side, RF beat on revenue while missing on earnings.  Unfortunately, SEOAY missed on both the top and bottom lines.  It is worth noting that ROP raised its forward guidance. 

In miscellaneous news, the Director of the Consumer Financial Protection Bureau Chopra told Reuters that the days of easy approvals for bank mergers are over. He went on to say, “There is no question past adjudications of mergers did not meet the level of analytical rigor that they ought to have.” He also said, “Banks can expect a more rigorous review of applications. The ink on the rubber stamp has dried up and … my hope is to see a shift from the regulators of moving from cheerleader to umpire.”  For what it’s worth, Chopra does also sit on the Board of the FDIC.  Elsewhere, the Fed launched its long-awaited “FedNow” instant settlement service covering 41 banks and 15 service providers.  While touted as a boon for everyday consumers, the move just means fund settlement for electronic payments should happen within seconds rather than hours to days later.

In other news, overnight the White House announced that it has secured “voluntary pledges” from OpenAI, MSFT, and GOOGL related to artificial intelligence.  The group will meet with President Biden at the White House today.  The commitment is that the group will create ways the consumers will be able to identify AI-generated information (like watermarks) as well as standards for how the companies and third parties test AI tools for security before they are released. The overall goal is to ensure AI safeguards without hindering innovation. With that said, like everything else in the world, intentions and platitudes are fine, but the devil is in the details when it comes to controlling a new technology that offers significant advantages to any individual, group, company, or country. Notably absent from the list of attendees are META, AAPL, and any Chinese or European representatives.

With that background, it looks like markets are working on inside candles in the premarket. The QQQ is now retesting its T-line (8ema) from below while the DIA has reversed and is giving us a black candle before the opening bell. With no major news planned for the day and earnings out of the way before the open, today may be more of a drift. The bears have the chart pattern in the market-leading QQQ and SPY. However, the Bulls have been in control all year and are not going to roll over on the back of a single candle. So, at this point, it is still looking like a pullback in an uptrend, with no strong indication a reversal has or is happening. As far as extension goes, none of the major index ETFs are far away from their T-line, but the T2122 indicator remains well into the overbought region. So, there is room to run in either direction. Just remember that markets can stay extended longer than we can stay solvent predicting the reversion to the mean, especially using an indicator like T2122. Finally, remember that it’s Friday. Pay yourself, hedge, move stops, and do whatever you need to do to get your account ready for the weekend news cycle. (Also, bear in mind there will be a slight weighting rebalance in the QQQ as of Monday. This is likely not a big deal, but it is happening.)

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Markets were indecisive on Wednesday after gapping higher (opening up 0.18% in SPY, up 0.24% in the DIA, and up 0.27% in the QQQ).  At that point, all three major index ETFs did some version of just moving sideways until 12:15 pm.  Then we saw a selloff that lasted until 2 pm, modest in the SPY and DIA and more pronounced in the QQQ (which recrossed its morning gap).  However, the bulls righted the ship, rallying until 3:30 pm when we saw modest selling in the last 30 minutes.  This action gave us indecisive candles in all three major index ETFs.  The DIA printed what could easily be seen as a Shooting Star of Gravestone Doji-type candle.  At the same time, the SPY printed a gap-up Doji of its own and the QQQ printed a black-bodied Spinning Top candle.  All three remain comfortably above their T-line (8ema).

On the day, eight of the 10 sectors were in the green with Communications Services (+1.90%) leading the way higher and both Technology (-0.34%) and Basic Materials (-0.33%) lagging behind the other sectors.  At the same time, the SPY gained 0.22%, DIA gained 0.32, and QQQ lost 0.02%.  The VXX climbed 1.79% to 23.90 and T2122 climbed even higher into the overbought territory to 96.79.  10-year bond yields fell to 3.746% while Oil (WTI)was down 0.63% to close at $75.27 per barrel.  So, Wednesday was an indecisive day after the earnings-driven modest gap higher.  It seems traders are getting wary of whether the Bulls can keep up the momentum of the last 7 days of action and are thinking better of chasing at the current highs.  This happened on less-than-average volume in the SPY and QQQ, and above-average volume in the DIA. 

The major economic news on Wednesday included Preliminary June Building Permits, which came in below expectations at 1.440 million (compared to a forecast of 1.490 million and a May reading of 1.496 million).  At the same time, June Housing Starts also came in light at 1.434 million (versus a forecast of 1.480 million and a May value of 1.559 million, which was admittedly a blowout high number).  Later in the morning, the EIA Crude Oil Inventories showed a smaller-than-anticipated drawdown of 0.708 million barrels (compared to a forecast of -2.440 million barrels but well down from the prior week’s number which showed a 5.946-million-barrel increase in inventories.

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In stock news, Bloomberg reported Wednesday that AAPL is working on artificial intelligence tools to rival OpenAI, GOOGL, META and others.  However, reportedly, AAPL has not yet developed a clear strategy for AI offerings. Elsewhere, after criticism related to the recent allegedly Chinese hacks, MSFT is expanding the suite of free security tools it offers customers.  At the same time, NFLX announced it will scrap its cheapest ad-free plan in order to boost the number of ad-supported members it has on the books.  Meanwhile, AAL and its pilots have resumed negotiations to improve their previously agreed tentative contract (after the UAL offer to its own pilots was sweeter).  AAL pilot voting is set to begin on Monday.  After the close, HCCI announced it has agreed to be bought by private equity firm J.F. Lehman for $1.2 billion in case ($45.50 per share).

In stock legal and regulatory news, on Wednesday, ATVI announced that it agreed to extend the deadline for closing the purchase by MSFT to October 18.  (Previously the deadline was August 29 and if the deal was not completed by that date MSFT owed ATVI $3 billion.  Along with the extension, the walk-away fee increases to $3.5 billion.) This extension was done to help secure UK approval for the acquisition.  Elsewhere, a federal judge in NY ordered TSLA to turn over emails from CEO Musk to JPM as part of a lawsuit over a bond contract (related to Musk saying “he had secured funding to take TLSA private in 2018”).  In other bank news, the Fed fined DB $186 million for failing to address previously identified money laundering.  At the same time, 200 US lawmakers said that they will not intervene if Teamsters go on strike against UPS.  (Although, truthfully, Congress has no power to intervene anyway other than to ask the President to invoke a cooling-off period prior to the strike.)   In related news, after-hours UPS said it would return to the negotiating table and sweeten its offer to the Teamsters.  Meanwhile, in Delaware, the Governor has signed a new law that will enable NKLA to double the number of shares from 800 million to 1.6 billion.  NKLA will resume its shareholder meeting on August 3 and with the new law will have the votes to offer new shares despite non-insider shareholder objections.  After the close, the SEC reported that it has accepted six ETF applications for the spot price of Bitcoin.  There was no schedule announced for any approval decisions.

After the close, TSLA, UAL, LVS, CCI, WTFC, and FNB all reported beats on both the revenue and earnings lines.  Meanwhile, AA, EFX, IBM, KMI, and NFLX all missed on revenue while beating on earnings.  On the other side, COLB, DFS, and ZION all beat on revenue while missing on earnings.  Unfortunately, LBRT and STLD missed on both the top and bottom line.  It should be noted that CCI and EFX lowered their forward guidance.  However, UAL raised its forward guidance.

Overnight, Asian markets mostly in the red.  Japan (-1.23%), Shenzhen (-1.06%), and Thailand (-1.01%) paced the losses.  On the green side, India (+0.74%) was by far the biggest gainer.  Meanwhile, in Europe, the bourses are mostly green at midday.  The CAC (+0.40%), DAX (+0.25%) and FTSE (+0.64%) lead the region mostly higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed start to the day.  The DIA implies a +0.10% open, the SPY is implying a -0.17% open, and the QQQ implies a -0.74% open at this hour.  At the same time, 10-year bond yields are up sharply to 3.787% and Oil (WTI) is on the green side of flat at $75.46 per barrel in early trading. 

The major economic news events scheduled for Thursday include the Weekly Initial Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), June Existing Home Sales (10 am), and the Fed’s Balance Sheet (4:30 pm).  The major earnings reports scheduled for before the opening bell include ABT, ALFVY, AAL, BX, DHI, EWBC, FITB, FCX, GPC, INFY, JNJ, KVUE, KEY, MAN, MMC, NEM, NOK, PM, POOL, SAP, SNA, SNV, TSM, TRV, TFC, and WBS. Then, after the close, COF, CSX, ISRG, KNX, PPG, and WRB report.    

In economic news later this week, on Friday, there are no major economic news scheduled.

In terms of earnings reports, on Friday, AXP, ALV, AN, CMA, HBAN, IPG, RF, ROP, and SLB report.

In miscellaneous news, Russia announced that starting today it is setting up a shipping lane in an attempt to continue its own grain exports.  However, at the same time, it said any ships traveling to Ukrainian ports will be assumed to be carrying military cargo.  (The obviously implied threat being the ships would be captured or sunk.)  Elsewhere, Elon Musk may have put a scare into TSLA investors, hinting that more price cuts may be coming and seeming much less concerned about profits now than self-driving as a potential profit engine in the future.  Musk said “The short-term variances in gross margin and profitability really are minor relative to the long-term picture. Autonomy will make all of these numbers look silly.”  Meanwhile, overnight, TSM beat but also made less revenue than a year prior (for the first time in 4 years).  It also revised its forecast, now expecting a 10% drop in revenue for the year. The world’s largest chipmaker cited weak global demand for everything from cars to cell phones.  (Oddly, carmakers have been saying sales continue to be very strong.)  However, TSM also cited high demand for high-end chips to support artificial intelligence as offsetting some of the weakness.

So far this morning, AAL, ABT, BX, DHI, FITB, JNJ, KVUE, MMC, PM, SNA, TSM, and TCBI all reported beats on both the revenue and earnings lines. Meanwhile, ALFVY and GPC missed on revenue while beating on earnings.  On the other side, INFY, KEY, TRV, and TFC all beat on revenue while missing on earnings.  Unfortunately, ELUXY, NEM, NOK, and POOL all missed on both the top and bottom lines.

With that background, markets are looking to diverge in the premarket (ahead of data and more earnings). All three major index ETFs are looking at very small premarket candles at this point. However, the QQQ is gapping down strongly on last night’s NFLX report and TSLA. Nonetheless, all three remain above their T-line. So, at this point, it is looking a pause or pullback with no indication trend has changed. As far as extension goes, with the morning pullback in QQQ, none of the major index ETFs are too far away from their T-line, but the T2122 indicator is again deep into the overbought region. Just remember that markets can stay extended longer than we can stay solvent predicting the reversion to the mean.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday was the Bull’s day.  After strong earnings from the big banks, we saw a very modest gap lower (down 0.06% in the SPY, down 0.05% in the DIA, and down 0.16% in the QQQ).  However, the two large-cap index ETFs immediately started to rally steadily.  The SPY kept up a 45-degree rally all day long.  Meanwhile, the DIA rallied more sharply until noon and then traded sideways the rest of the way.  For its part, QQQ continued lower for 10 minutes after the open and then ground sideways for an hour, but then it rallied strongly all the way into the close.  There was a small amount of profit-taking in the last 15 minutes of the day in all three major index ETFs.  This action gave us large, white-bodied candles in all three with the QQQ having more wick on both ends than the other two.  It is worth noting that DIA finally broke through the resistance level that had held it down all year while the SPY and QQQ were already at new highs for the year.

On the day, eight of the 10 sectors were in the green with Financial Services (+1.41%) leading the way higher and Utilities (-0.42%) lagging behind the other sectors.  At the same time, the SPY gained 0.73%, DIA gained 1.07%, and QQQ gained 0.82%. The VXX fell 1.63% to 23.48 and T2122 climbed higher into the overbought territory to 94.01.  10-year bond yields fell to 3.783% while Oil (WTI) spiked 2.06% to close at $75.68 per barrel. So, Tuesday saw markets drive higher all day following the strong morning earnings.  This happened on less-than-average volume in the SPY, average volume in the QQQ, and higher-than-average volume in the DIA. 

The major economic news on Tuesday, June Retail Sales (month-on-month) came in below expectation at +0.2% (compared to a forecast of +0.5% and a May reading of +0.5%).  At the same time, June Industrial Production (month-on-month) also came in below what was anticipated at -0.5% (versus a forecast calling for dead flat +0.0% but in line with May’s -0.5%).  This resulted in a very low June Industrial Production (year-on-year) growth of -0.43% (compared to a forecast of +1.10% and the May value of +0.03%). Later, May Business Inventories were reported as expected at +0.2% (versus a forecast of +0.2% and the April reading of +0.1%).  May Retail Inventories came in lower than predicted at -0.1% (compared to a forecast of +0.0% but did not fall as much in April’s -0.2% number).  Then after the close, API Weekly Crude Oil Stocks did not show as big of a drawdown as expected at -0.797 million barrels (versus a forecast of -2.250 million barrels but still far below the prior week’s inventory build of 3.026 million barrels.

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In stock news, the US announced another $1.3 billion in defense aid for Ukraine.  This included significant orders for LHX and AVAV products.  At the same time, WMG has announced it has partnered with TikTok in a broad deal that was the first of its kind, to license WMG music.  Elsewhere, PFE announced it has partnered with venture capital firm Flagship Pioneering to invest $100 million to develop 10 new drugs.  At the same time, META released a commercial version of its artificial intelligence model Llama 2.  Later, MSFT announced a 50% premium for its Office suite with access to a new AI Co-Pilot.  The charge will be $30 per month, per user for the Office 365 Co-Pilot.   In the Auto space, carmaker STLA announced it has secured long-term semiconductor supply contracts with IFNNY, NXPI, ON, and QCOM worth $11.2 billion and running through 2030.  Meanwhile, TDOC told Reuters it is expanding its partnership with MSFT with plans to use the tech giant’s artificial intelligence to automate clinical documentation on its telehealth platform.  In the defense space, LMT raised its full-year guidance on strong sales and profit outlooks from weapons contracts.  After hours, AUR announced it plans to sell $600 million of Class A stock in a private placement to raise capital.  (AUR shares fell 10% in post-market trading on the news.)  Also after hours, Reuters reported that the AAL pilots union has warned that the ratification of the recently agreed contract deal is now in jeopardy after the UAL pilots union got a better deal.  (The AAL deal raises pilot pay 42.5% over four years while the UAL pilot deal offers cumulative pay increases of 34.5% – 40%. The ratification vote is scheduled to start next week.)

In stock legal and regulatory news, the NHTSA announced it has opened another investigation of TSLA following another deadly crash in CA, this time of a 2018 TSLA Model 3 which was operating under “Full Self Driving” mode.  In other TSLA news, in Germany, TSLA faced a grilling from the public in a q-and-a session meant to ease citizens’ minds about the impact of the electric carmaker’s plant expansion to become the largest TSLA factory in the world.  (The plant now makes 5,000 cars per week and is expecting to double capacity and then double again to 1 million cars per year.  The current largest car plant in Germany is VLKAF’s Wolfsburg plant which has the capacity to make 800k cars per year, but now produces 400k a year.)   Back in the US, 22 Republican Congressmen (mostly from the MAGA caucus) wrote and published an open letter to the FTC urging the agency to drop its objections to the MSFT purchase of ATVI, calling the opposition an egregious example of rejecting sound antitrust policy.  (Sound policy would apparently mean not opposing mergers.)  At the same time, YUM’s Taco Bell brand won its bid to bust the trademark on the term “Taco Tuesday” (which had been held by the much smaller and private Taco John’s chain).  Meanwhile, the FTC spearheaded 101 federal and state law enforcement agencies on a crackdown on telemarketing robocalls with one of the main targets being FLNT.  (FLNT previously agreed to pay a $2.5 million fine while three other firms agreed to a total of $15.7 million in fines.)  In lawsuits going the other way news, JNJ added its name to the list of pharmaceutical companies suing the US government in a bid to prevent the US from negotiating drug prices for Medicare.  (All of those cases may have a steep hill to climb since in every instance the companies sell the drugs in question in smaller quantities at lower prices to other countries than what is charged to Medicare.)  After the close, T made a court filing saying that it no longer intends to immediately remove lead cable in the ground in Lake Tahoe that it had previously agreed to remove.  The telecom company says it will now do further analysis before deciding.  (This move mentioned and pushed back against the recent Wall Street Journal article discussing the risks of lead cables to groundwater.)

After the close, AIR, PNFP, and HWC all reported beats on both the revenue and earnings lines.  Meanwhile, OMC reported a miss on revenue while beating on earnings.  On the other side, IBKR and WAL both beat on revenue while missing on earnings.  Unfortunately, JBHT missed on both the top and bottom lines.  The biggest surprises were huge upside revenue shocks from the financials (76% upside from IBKR, 71% upside from WAL, and 80% upside from PNFP). 

Overnight, Asian markets leaned to the green side.  Japan (+1.24%) was by far the leader to the upside while Singapore (+0.64%) and Australia (+0.55%) followed.  On the downside, Taiwan (-0.65%) led the four red exchanges lower.  Meanwhile, in Europe, stocks are in the green as only two of the 15 bourses are in the red at midday.  The FTSE (+1.50%) is far-and-away the leader after a massive reduction in inflation. Thile the CAC (+0.27%) and DAX (-0.04%) lag behind.  In the US, as of 7:30 am, Futures are pointing toward the day starting just on the green side of flat.  The DIA implies a +0.09% open, the SPY is implying a -0.02% open, and the QQQ implies a +0.11% open at this hour.  At the same time, 10-year bond yields are down to 3.764% and Oil (WTI) is just on the green side of flat at $75.87 per barrel in early trading.    

The major economic news events scheduled for Wednesday include Preliminary June Building Permits and Preliminary June Housing Starts (both at 8:30 am), and EIA Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for before the opening bell include ALLY, ASML, BKR, CFG, ELV, FHN, GS, HAL, MTB, NDAQ, NTRS, and USB.  Then, after the close, AA, COLB, CCI, DFS, EFX, IBM, KMI, LVS, LBRT, NFLX, STLD, TSLA, UAL, WTFC, and ZION report.   

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, June Existing Home Sales, and the Fed’s Balance Sheet.  Then Friday, there are no major economics news scheduled. 

In terms of earnings reports, on Thursday, we hear from ABT, ALFVY, AAL, BX, DHI, EWBC, FITB, FCX, GPC, INFY, JNJ, KVUE, KEY, MAN, MMC, NEM, NOK, PM, POOL, SAP, SNA, SNV, TSM, TRV, TFC, WBS, COF, CSX, ISRG, KNX, PPG, and WRB.  Finally, on Friday, AXP, ALV, AN, CMA, HBAN, IPG, RF, ROP, and SLB report. 

In miscellaneous news, the UK reported 7.9% annual inflation as of June, which is the worst among major economies.  However, that number is down sharply from 8.7% on an annual basis in May.  As a result, UK government borrowing costs also dropped abruptly today and the UK market now sees it less likely that the BoE will deliver another half-percent hike in August as had been expected.  Elsewhere, in the US, YELL (the country’s third-largest less-than-truckload freight carrier) faces a strike by 22,000 teamsters as soon as next week.  This comes after the company failed to make $50 million in contractually-required benefits contributions.  (YELL is on the edge of bankruptcy again, for the fifth time since 2009, after getting lenders to agree to a waiver in June.  YELL had proposed operational changes that were rejected a few weeks ago by the union, which had previously already made concessions on wages, hours, and some benefits.  As an aside, YELL was formed by consolidating large and small trucking companies and has never (dating back to the 1980s) been good at the process of combining.  In recent years, the company has bought non-union firms with the apparent goal of continuing to get more Teamster concessions.  Now 8,000 of the company’s 30,000 employees are non-union.

So far this morning, ASML, ELV, USB, BKR, MTB, FHN, SDVKY, CBSH, NDAQ, and CVNA have all reported beats on both the revenue and earnings lines.  Meanwhile, VLVLY beat on revenue while missing on earnings.  On the other side, HAL, CFG, and WDS all missed on revenue while beating on earnings.  It is worth noting that ASML and ELV both raised their forward guidance.

With that background, it looks like markets are again pausing ahead of economic data and earnings, even after receiving a number of good earnings reports this morning. All three major index ETFs are looking at very small, inside-day, candles at this point. As has been the case all year, DIA looks the weakest of the three while SPY and QQQ are seemingly pausing at the top of their year-long rallies. However, SPY was the laggard Tuesday. All three remain above their T-line and are, so far at least, just giving us a strong uptrend. As far as extension goes, we have been up a very long number of consecutive candles in the QQQ and it is getting a little stretched from its T-line (8ema). However, the two large-cap indices are fine in that regard and have had recent pullback days. The T2122 indicator is again well up into the overbought region. Just remember that markets can stay extended longer than we can stay solvent predicting the reversion to the mean.

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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