Markets all gapped higher again on Thursday (up 0.42% in the SPY, up 0.21% in the DIA, and up 0.86% in the QQQ).  However, at that point, we saw a bit of a divergence.  The QQQ again led us higher with a fairly strong and steady rally all day until we saw a little profit-taking in the last 15 minutes.  Meanwhile, the SPY ground sideways in a tight range along its opening level until 11:30, at which point it followed the QQQ with a steady rally that was only broken by profit-taking the last 15 minutes of the day.  On the other hand, DIA lagged again, grinding sideways in a tight range after the open until just after 10:30 am.  Then DIA sold off to retest the opening gap and spend the rest of the day meandering back and forth inside that gap area.  This action gave us gap-up white-bodied candles (more body than wick) in both the QQQ and SPY.  For its part, the DIA gave us a black-bodied Doji-type Harami that never came close to challenging the Wednesday highs.

On the day, all 10 sectors were in the green again with Technology (+2.05%) way out front leading and Industrials (+0.27%) again lagging well behind the other sectors.  At the same time, SPY gained 0.79%, DIA gained 0.08%, and QQQ gained 1.70%.  The VXX gained a half of a percent to 24.21 and T2122 climbed slightly and remains in the high end of the overbought territory at 95.99.  10-year bond yields plummeted again to 3.765% while Oil (WTI) popped another 2.05% to close at $77.30 per barrel.  So, again on Thursday, we saw the big tech names like NVDA (+4.74%) and GOOGL (+4.72%) stretch the market higher.  Meanwhile, the stodgy DIA was held up by MSFT (+1.62%) and CSCO (+1.56%) as the likes of WBA (-1.91%), TRV (-1.69%), and CVX (-1.34%) tried to drag the industrials lower.  This all took place on less-than-average volume in all three major index ETFs.

The major economic news on Thursday, June PPI came in better than expected at +0.1% (compared to a forecast of +0.2% but well above May’s -0.4% reading).  The May PPI data was also revised lower.  In addition, the “Core PPI” fell 0.2% in June.  At the same time, the Weekly Initial Jobless Claims came in below the anticipated level at 237k (versus a forecast of 250k and the prior week’s reading of 249k). Later in the day, The June Federal Budget Balance was reported as worse than expected at -$228.0 billion (compared to a forecast of -$175 billion but better than the May value of -$240 billion).  Overall, this was good economic data showing that inflation is slowly headed in the right direction, and yet the job market is holding up fine.  On the Fed front, San Francisco Fed President Daly reiterated her previous position that two more hikes will be needed this year.  She told a CNBC interview that she wants to start heading toward neutral as inflation gets closer to the 2% Fed goal.  However, she said, “It’s too early to say we have declared victory on inflation.”  Later, St. Louis Fed President (and Uber-hawk) Bullard announced he will be stepping down on August 14 in order to take a dean position at Purdue University.  This will be just under 3 weeks after the July Fed meeting and six weeks prior to the September meeting.  However, Bullard is not a voter this year.  Finally, last night Fed Governor (and voter) Waller said flat out what many Fed members have been implying and hinting at.  He said, “I see two more 25-basis-point hikes in the target (Fed Funds) range over the four remaining meetings this year as necessary to keep inflation moving toward our target.”

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In sundry economic news, Bloomberg reports that in addition to it now looking much more likely that the US will avoid the long-feared recession, the same may be true on a global level.  At least this is one possible conclusion to be drawn from labor markets.  Bloomberg reports that Global job cuts in June were down 25% from May (reaching the lowest level since December) and have been down four of the last five months.  At the same time, the UN and EU are scrambling to save the Black Sea grain deal (allowing Ukrainian grain exports) after Putin has threatened to kill the agreement.  The current deal expires Monday (7/17) and the UN is considering giving in to Russian blackmail by reconnecting a Russian bank to the SWIFT payment network for grain and fertilizer transactions.  In a related story, India (the world’s largest exporter of rice, shipping 41% of global supplies) is currently considering a export ban on most varieties rice.  Bloomberg reports this is due to rising Indian domestic rice prices amidst a disruptive “El Nino” weather pattern.  Finally, after the close, the Fed announced that Bank borrowing from the Fed declined again (very slightly this time) for the week ending July 12.  Total Fed lending from its two backstop programs was $105 billion, down $320 million from the prior week.

In stock news, MITT made a stock-and-cash offer for WMC on Thursday.  The offer will disrupt the all-stock bid made on June 28 by Terra Property Trust.  (The MITT offer is equal to $9.88 per share, which was a 12% premium at the time of the offer and more than a 9% premium on the WMC closing price Thursday).  In other deal news, XOM announced that it has agreed to buy DEN for $4.9 billion in an effort to accelerate the XOM carbon dioxide sequestration (pumping CO2 into wells) program.  Elsewhere, GS announced it has sold off $1 billion in personal loans made by its consumer unit Marcus.  No details were provided, but GS booked $470 million in losses on those loans in Q1.   At the same time, GOOGL announced it is rolling out its “Bard” AI Chatbot to Europe and Brazil.  This news eased market fears over international regulatory hurdles and GOOGL stock soared 4.72% on the day.  In other news, Kelly Blue Book announced that registrations of TSLA Model Y vehicles (TSLA’s least expensive model) surged 103% between January and May.  Meanwhile, NKLA shares skyrocketed 61% on Thursday after the company announced it had entered a strategic partnership with hydrogen producer Bayotech, which has agreed to buy 50 of the NKLA truck produced in the next 5 years.

In stock legal and regulatory news, the NRLB announced Thursday that it received a complaint against AMZN for refusing to bargain with the union elected by workers at the e-commerce giant’s Staten Island, NY distribution center.  (AMZN challenged the election but lost the appeal to the NRLB in January.  However, AMZN spokesmen said this complaint was nothing new and the company will not recognize the union, at least until it has exhausted all legal challenges to the union’s election.)  Elsewhere, a Ninth Circuit Appeals Court opened a docket on the FTC appeal of the lower court ruling against providing an injunction preventing the closing of the MSFT acquisition of ATVI.  No date has yet been set for the hearing of the case.  At mid-morning, a US District Judge ruled blockchain company Ripple Labs did not violate SEC law by selling tokens on public exchanges.  Markets immediately saw this as a huge victory for cryptocurrency (against government regulation of the same). COIN shot 30% higher (ending the day up 24.49%) while MSTR spiked 13% (and ended up 11.69%).  Later, TM and the NHTSA announced that the Japanese car company has recalled 118k 2023 cars (110k in the US) due to a wiring defect in the driver-side airbag.  By mid-afternoon, the EPA announced it has fined CPE $1.3 million for excess emissions (from tanks, flares, and other equipment) at the company’s West Texas Permian Basin operations.  At the end of the market session, Reuters reported that the FTC has opened an investigation into MSFT-backed OpenAI over claims the AI company is putting consumer personal data and reputations at risk through its AI operations.  This is the first potential regulation of artificial intelligence, even if only in terms of potential fines for violating consumer privacy.

Overnight, Asian markets leaned heavily to the green side.  Only Shenzhen (-0.14%) and Japan (-0.09%) were in the read.  Meanwhile, Thailand (+1.60%), South Korea (+1.43%), and Taiwan (+1.30%) led the rest of the region higher.  In Europe, the bourses are mixed at midday with six exchanges in some shade of red and nine in the green to some degree.  The CAC (+0.26%), DAX (-0.22%), and FTSE (+0.25%) are typical and lead the way in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed start near the flat line to the day.  The DIA implies a +0.42% open, the SPY is implying a +0.09% open, and the QQQ implies a -0.04% open at this hour.  At the same time, 10-year bond yields are bouncing back (early), up to 3.787% and Oil (WTI) is just on the red side of flat at $76.79 per barrel in early trading.

The major economic news events scheduled for Friday include June Import Price Index and June Export Price Index (both at 8:30 am), Preliminary July Michigan Consumer Sentiment and Preliminary July Michigan Consumer Expectations (both at 10 am). The major earnings reports scheduled for before the opening bell include BLK, C, ERIC, JPM, STT, UNH, and WFC.  There are no major earnings scheduled for after the close.    

So far this morning, JPM, WFC, BLK, and UNH all reported beats to both the revenue and earnings lines.  These were all “good beats” showing very strong quarter-on-quarter growth in revenue and earnings with the exception of BLK beating while having a 1.4% decline in revenue quarter-on-quarter.  Meanwhile, ERIC missed slightly on revenue at the same time they beat on earnings.  However, that was a “bad beat” on earnings since earnings were down 50% quarter-on-quarter for ERIC.  On the other hand, STT missed significantly on revenue while beating significantly on earnings and both of the numbers reported were quarter-on-quarter increases from Q1.     

In miscellaneous news, Reuters reported that US Small Businesses borrowing has not fallen off much.  In other words, the feared credit crunch does not appear to have materialized (at least yet) despite increasing rates and dire commentator predictions.  According to the National Federation of Independent Business, the average interest rate paid by small firms in June was 9.2% (up 1.4% from May).  However, the lending continues as 28% of surveyed small businesses said they regularly borrowed in June, roughly in line with May but far below the three-year high the survey reported in April.  Meanwhile, part of the strong rally in Oil (and other commodities) is the continuing crash of the US Dollar against major currencies.  The dollar sold off steadily all-day Thursday against the Euro, British Pound, Aussie Dollar, and even Canadian Dollar.  Elsewhere, the Republican focus on social culture wars continues as 13 GOP AGs warned the 100 largest US companies that they will sue those companies over any diversity policies those companies have in place.  The letter sent to the 100 singled out AAPL, GOOGL, MSF, and UBER specifically, but threatened all 100.  Finally, the WHO warned that aspartame (most widely-used artificial sweetener) may cause cancer in high doses.  However, the agency also said the topic needed more research and the sweetener should be safe in normal amounts.  This lessened the blow on companies like KO and PEP which use it in many products.

With that background, it looks like the Bulls are looking to close the week out strong. The DIA candle in particular is large and white after starting the early session down from Thursday’s close. However, note that the DIA is also right at a resistance level while the other two major index ETFs have broken through theirs earlier in the week. SPY is looking to gap up but is more tentative and for its part QQQ is looking to open higher but is a very indecisive premarket candle. Obviously, all three remain above their T-line (8ema) and the bias remains bullish across the market. Regardless, after the open settles out, do not be surprised to see some profit-taking after a strong week in all three major indices. Also, don’t forget that its Friday. So, pay yourself, move your stops, hedge, or do whatever you need to do to prepare for the weekend. All that said, do not be surprised if we drift while we wait. As far as extension goes, the SPY and QQQ are starting to get a bit stretched from the T-line. DIA remains fine in that regard. However, again, the T2122 indicator remains deep into that overbought territory. The old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available…there is just more slack available to the Bears.

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

On Wednesday, better-than-expected CPI numbers led to a gap higher (up 0.88% in the SPY, up 0.66% in the DIA, and up 1.15% in the QQQ).  At this point, the SPY and QQQ started a sideways meander centered on that opening level.  DIA started to grind sideways in a very tight range, which was interrupted by a sharp 45-minute selloff that started at about 11:25 am before continuing sideways inside the opening gap.  All three of the major index ETFs continued that sideways move right into the close.  This action gave us gap-up, indecisive candles, above the T-line (8ema) in all three.  The SPY and QQQ printed Dojis, with the SPY breaking out of June/July highs and QQQ closing right at its breakout level.  Meanwhile, the DIA printed a black-bodied Spinning Top that could be seen as failing the June high retest.

On the day, all 10 sectors were in the green with Basic Materials (+1.94%) way out front leading and Industrials (+0.07%) lagging well behind the other sectors.  At the same time, SPY gained 0.80%, DIA gained 0.27%, and QQQ gained 1.26%.  The VXX fell 5.50% to 24.07 and T2122 pulled back slightly but remains at the high end of the overbought territory at 95.60.  10-year bond yields plummeted to 3.861% while Oil (WTI) popped up 1.42% to close at $75.89 per barrel.  So, Wednesday saw a strong gap-up on the lower-than-expected CPI data.  However, after that, markets simply drifted sideways for the rest of the day.  This took place on above-average volume in the DIA and QQQ with slightly less-than-average volume in the SPY.

The major economic news on Wednesday started with the June month-on-month CPI, which came in below expectations at +0.2% (compared to a forecast of +0.3% but above the May reading of +0.1%).  At the same time, June year-on-year CPI was also below anticipated at +3.0% (versus a forecast of +3.1% and well below the May value of +4.0%).  Later, EIA Crude Oil Inventories showed a much larger build that projected at +5.946-million-barrels (compared to a +0.483-million-barrel forecast and the prior week’s drawdown of 1.508-million-barrels).  It may have nothing to do with what the Fed does in two weeks.  However, that data cannot credibly be spun as not showing progress on inflation.  On the Fed speaker front, Minneapolis Fed President Kashkari published an essay more related to supervision than rates.  He said that Central banks (in general) need to bring inflation back down and create anchored (stable) inflation expectations…adding that interest rates may need to raise further.  The rest of his essay was dedicated to ensuring the banking sector is strong enough to handle the potential additional increase in rates.  Kashkari said, “One way supervisors could ensure banks are prepared is to run new high-inflation stress tests to identify at-risk banks and size individual capital shortfalls.”  Elsewhere, Richmond Fed President Barkin sounded a hawkish note, saying “No matter how you cut it, inflation has been too high.”  Barking added that he agreed that overall demand was beginning to slow, but he wants to be “convinced” by incoming data that it will translate into lower inflation.

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In stock news, Reuters reported midday that NVDA is in talks to become the “anchor investor” in an IPO of Arm.  (Arm is a semiconductor designer whose architecture competes with the x86 platform used by INTC and AMD.  The ARM architecture is mostly used in cloud servers and high-end computing servers like those required for AI applications.) Elsewhere, LCID reported that its Q2 production dropped from Q1 while deliveries stayed flat. The LCID stock fell almost 12% on that news. Later, DPZ announced they have reached a deal allowing customers to buy their pizzas via the UBER and Postmates apps.  (DPZ shot 11.10% higher on that news.)  At the same time, Reuters reported that first-day sales of the AMZN Pride Day 6% (to $6.4 billion) from a year ago on heavy discounting according to Adobe Analytics.  Meanwhile, DIS announced after the close that it has extended the contract of CEO Bob Iger for two more years, through the end of 2026.   Also after the close, VSAT announced that there was a problem with the deployment of its “ViaSat-3 Americas” satellite that may well affect the performance of the satellite.  VSAT stock fell 20% in post-market trading on this news.

In stock legal and regulatory news, the EU antitrust watchdog granted conditional approval for AVGO’s $61 billion acquisition of VMW. The condition was altering the deal to help rival MRVL by ensuring interoperability of future products.  However, the UK competition agency and US FTC are also still reviewing the deal. Elsewhere, TSLA announced the US federal tax credits (now $7,500) for its Model 3 cars “are likely to be reduced on Dec. 31.” It provided no additional information and this could be just a marketing ploy.  Still, the US government is implementing more stringent battery rules in the hope of reducing both carbon emissions and dependence on China.  Meanwhile, it was made public Wednesday that META will appeal EU antitrust charges related to its classified advertisements.  (The appeal was announced in a closed-door meeting Friday, but made public yesterday.)  At the same time, ILMN was hit with a record $476 million fine by the EU for closing its takeover of test maker Grail before getting WU antitrust approval.  In leak news, Reuters reported that the NHTSA is close to reaching a decision on whether or not to allow GM to deploy 2,500 self-driving Cruise vehicles.  (Cruise vehicles are essentially Chevy Bolts without a steering wheel, gas, or brake pedals.)  Finally, on Wednesday evening the FTC filed an appeal to the ruling that denied the agency’s request for an injunction against the MSFT acquisition of ATVI.

After the close, MLKN reported beats on both the revenue and earnings lines.  However, both numbers were down (13% on revenue and 29% on earnings) from the same quarter of 2022. So far this morning, PEP, DAL, and WIT have all reported beats on both the revenue and earnings lines.  (Interestingly, these were not beats against lowered expectations and showed both revenue and earnings growth quarter-on-quarter.  In fact, it was a record amount of earnings for DAL.)  Meanwhile, CAG and FAST both missed on revenue while beating on the earnings line.  (For FAST, even though the Revenue was a miss, both numbers were increases quarter-on-quarter from the previous report.  However, the CAG miss on revenue actually showed Qtr.-on-Qtr. growth but the beat on earnings actually was a decline Qtr.-on-Qtr.)  It should also be noted that PEP raised its forward guidance while CAG lowered its guidance.  Note that PGR and CTAS report closer to the opening bell. 

Overnight, Asian markets were nearly green across the board.  Only Malaysia (-0.13%) showed any red while Hong Kong (+2.60%), Singapore (+1.99%), and Shenzhen (+1.61%) led the region in a broad and strong rally.  Meanwhile, in Europe, the bourses are mostly green at midday with only three spots of red among the 15 exchanges.  The CAC (+0.78%), DAX (+0.57%), and FTSE (+0.37%) are leading the continent higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward another move higher.  The lagging DIA implies at +0.15% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.66% open at this hour.  At the same time, 10-year bond yields continue to fall and are at 3.826% while Oil (WTI) is up three-tenths of a percent to $75.97 per barrel in early trading.

The major economic news events scheduled for Thursday include June PPI and the Weekly Initial Jobless Claims (both at 8:30 am), June Federal Budget Balance (2 pm), and Fed Balance Sheet (4:30 pm).  We also have another Fed speaker (Waller at 6:45 pm).  The major earnings reports scheduled include CTAS, CAG, DAL, FAST, PEP, PGR, and WIT all before the opening bell.  There are no major earnings scheduled for after the close.      

In economic news later this week, on Friday, June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations are reported.      

In terms of earnings reports, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.      

In miscellaneous news, Reuters reported that the one-month moving average of open interest in VIX calls (in other words, the average of the number of existing options bets that the market will fall, driving the VIX up) was at a record high of almost 13.85 million at the end of June.  It fell to 13.71 on Wednesday afternoon.  The interesting thing is that this moving average was at a 3-year low in mid-June before skyrocketing by the end of the month as traders bet the Bulls could not keep running.  However, so far this month the Bulls have defied that logic.  Elsewhere, ocean temperatures (surface) off Florida reached nearly 97 degrees in some areas Monday according to the National Oceanic and Atmospheric Administration buoy data.  This is the highest temperature on record and poses a significant threat to the health of coral reefs, which in turn pose a risk to fishing grounds.  NOAA said that 70% of Florida’s coral reefs have already been bleached or have been eroded (i.e. have been lost) due to climate change impacts. No specific tickers impacted are available yet. Finally, in dollar news, after the CPI data Wednesday, the US Dollar plunged to a 15-month low.  This indicates that money managers now truly believe US interest rates are at or very near a peak.  (The dollar tends to be correlated with US interest rates.) For the record, the dollar is strongly down again Thursday against the Euro, British Pound, and Aussie Dollar.

With that background, it looks like the Bulls are trying to gap up into fresh air again in the SPY and QQQ. DIA is also positive but is only giving a Bullish Harami so far in the premarket session. It should be noted that all three of the major index ETFs are printing indecisive candles in this early session as traders wait on PPI and the rest of the new round of earnings. Obviously, all three remain above their T-line (8ema) with the June PPI data still an hour from being published. So, the bias is still bullish across the market. It looks like the Bulls are trying to add to the week’s nice gains so far. There may be some premarket volatility (and likely volatility near the open) from the PPI data but truthfully that is usually a lot less than the CPI number that always precedes it by a day. Either way, after the open settles out, eyes will turn toward the financials as the big boys report Friday. All that said, do not be surprised if we drift while we wait. Overall, the SPY and QQQ have broken out of recent highs and have some room to run before the next potential resistance level. However, the DIA has yet to get through and is just below the double-top it failed yesterday. As far as extension goes, only the QQQ (in premarket) is starting to get a bit stretched from its T-line. However, again, the T2122 indicator remains deep into that overbought territory. The old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available, just more of it available to the Bears.

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 modestly higher on Tuesday (up 0.19% in the SPY, up 0.36% in the DIA, and up 0.13% in the QQQ).  At that point, both the SPY and QQQ recrossed that opening gap, reaching the lows of the day not long after 10 am.  DIA faded too, but only down into the middle of its opening gap again by shortly after 10 am.  Then Bulls stepped in to lead a rally that took all three major index ETFs to the highs of the day at about noon.  From there DIA ground sideways in a tight range, SPY meandered back and forth between the open and the highs, and QQQ meandered sideways mostly between the prior close and the highs until 3:45 pm.  However, a rally the last minutes of the day took us out very near the highs in all three of those major index ETFs.  This action gave us white-bodied candles with small upper wicks and slightly larger lower wicks.  All three also crossed back up above their T-line (8ema).

On the day, all 10 sectors were in the green with Energy (+1.87%) way out front leading and Healthcare (+0.02%) lagging behind the other sectors. At the same time, SPY gained 0.64%, DIA gained 0.89%, and QQQ gained 0.49%.  The VXX fell three-quarters of a percent to 25.47 and T2122 climbed into the high end of the overbought territory at 96.78.  10-year bond yields fell to 3.976% while Oil (WTI) popped up 2.48% to close at $74.80 per barrel.  So, Tuesday was a Bullish day within a Bullish Pennant formation in the SPY and QQQ as well as within more of a Wedge pattern in the DIA.  This all took place on less-than-average volume in all three major index ETFs.

The major economic news on Tuesday was limited to the energy sector.  The EIA Short-term Energy Outlook now calls for US electric consumption to ease from the 2022 record based on forecasts of slower economic growth and milder weather.  The same report projects the oil market will remain tight, citing the recently announced Saudi and Russian production cuts as well as expected increasing demand in China as well as developing countries.  The EIA also cut its forecast for US oil production by 50,000 barrels per day while still rising to 12.56 million barrels per day.  Elsewhere, after the close, the API Weekly Crude Oil Stocks report showed an unexpected increase of 3.026-million-barrels (compared to a forecasted increase of 0.200-million-barrels and the 4.382-million-barrel inventory drawdown one week prior).  In Fed speak news, oddly enough, I was unable to find a report of St. Louis Fed President Bullard’s remarks. However, New York Fed President Williams told the Financial Times Tuesday exactly what most of the other Fed members have been saying…that rate hikes are likely not done.  Williams also said, “It’s still clearly a very strong labor market with very good jobs growth,” …  “I don’t have a recession in my forecast. (However,) I have pretty slow growth (in my projections).”   Finally, Williams said, “We are not getting the full effects of the restrictive policy that we put in place yet … those are still ahead of us, although we have gotten some of the effects already in certain interest-rate-sensitive sectors.”

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In stock news, CRM announced it will be raising the price of some of its cloud-based products by an average of 9% in August.  (This was the company’s first price increase in seven years and comes even after its recent report showed blowout revenue growth from the cloud-based business.)  Later, BA announced it delivered 60 passenger jets in June, raising the first-half total to 266, up 23% over the first half of 2022.  Elsewhere, the Financial Times reported sourced tell it that the EU is poised to approve the AVGO purchase of VMW as soon as Wednesday.  (VMW was up over 5% on the news.)  At midday, Reuters reported AXAHY (French insurance giant AXA) is actively discussing strategic options for its $2 billion reinsurance business, in what was termed “a bid to cut exposure to natural disasters in light of global warming effects.”  (In May, AIG made the same move, agreeing to sell its reinsurance arm for $3 billion for just 1.4 times book value.)  Meanwhile, Reuters also reported that AMZN is offering deeper discounts than in past years as part of its “Prime Day” 2-day sale.  This included 60% discounts on GPS clothing, 50% off some SONY products, and 40% off PTON bikes.  After the close, Axios reported that META is planning to bring “branded content” to its new Instagram Threads service.  This is a bid to make the platform easier for influencer and advertiser-paid partnerships.  Also after the close, Reuters reported that COTY is in talks with Kim Kardashian to sell back a minority stake in her fragrance and cosmetics brand.  At the same time, the Wall Street Journal reported that DIS is exploring options to sell its Indian joint venture “Star India.”

In stock legal and regulatory news, the NHTSA announced Tuesday it is investigating F related to 346,000 Ford Escape SUVs built in 2020-2021 due to doors opening while the cars are driving.  Later, BAC agreed to pay a $250 million settlement (in fines and compensation) related to the same systematic practice WFC faced a year or two back.  BAC had been opening consumer accounts without authorization, systematically did not pay account-opening bonuses promised, and double-charged fees for insufficient funds.  Elsewhere, AMZN launched the first challenge to the EU Digital Services Act, disputing whether it should be included in the group of companies subjected to online content rules.  At the same time, a US federal judge threw out the FTC’s request for an injunction, telling MSFT it can proceed with the acquisition of ATVI.  (The FTC has until Friday to appeal before MSFT is free to continue.)  In addition, the UK Competition and Markets Authority (which previously blocked the deal) announced it was ready to consider MSFT proposals to resolve antitrust concerns.  (ATVI stock shot up 10% on the good news.)  Meanwhile, Canada’s corporate ethics watchdog announced Tuesday that it has launched an investigation into NKE related to using Uyghur labor in China as part of its operations and supply chain.  At the same time, a US federal appeals court has revived a lawsuit against RCL related to the death of a toddler after a grandfather dropped the child who then fell through an open cruise ship window in the children’s play area of a cruise ship.

In market-related news, NASDAQ announced that a “special rebalance” of the QQQ (NASDAQ 100) will take place later this month.  The idea behind the rebalance is to reduce the concentration of weighting in the top names.  This comes after a blistering rally this year has resulted in AAPL, NVDA, MSFT, AMZN, and TSLA alone accounting for 43.8% of the index weight.  Following the rebalance, those five will “only” account for 38.5% of the QQQ.  The exact changes will be announced Friday and will take effect on Monday, July 24.  Analysts expect SBUX, MDLZ, BKNG, GILD, ISRG, ADI, and ADP to see their index weights increase.

Overnight, Asian markets were mixed with Shenzhen (-0.99%) and Japan (-0.81%) leading the losses while Hong Kong (+1.08%) and South Korea (+0.48%) paced the gains.  However, in Europe, we see green across the board at midday.  The CAC (+0.66%), DAX (+0.81%), and FTSE (+1.14%) lead broad gains across the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modest green start to the day (albeit before the CPI report).  The DIA implies a +0.14% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.23% open at this hour.  At the same time, 10-year bond yields are falling again to 3.956%, and Oil (WTI) is just on the green side of flat at $74.90/barrel in early trading.

The major economic news events scheduled for Wednesday include the June CPI (8:30 am), EIA Crude Oil Inventories (10:30 am), WASDE Ag report (noon), and Fed Beige Book (2 pm).  There are also two more Fed Speakers scheduled (Kashkari at 9:45 am and Mester at 4 pm).  The major earnings reports scheduled for Wednesday are limited to MLKN after the close.  (There are no reports scheduled before the opening bell.)        

In economic news later this week, on Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, Friday June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations.        

In terms of earnings reports, on Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.       

In miscellaneous news, the founder of the “meme stock” sensation lost his lawsuit against Reddit for allegedly wrongly banning him from moderating the community (subReddit) he created and usurping his “WallStreetBets” trademark.  In her decision, the US District Judge ruled that federal law (section 230) gives websites broad immunity for publishing the outside content of others and therefore he lacked standing to sue.  Elsewhere, Canadian regulators followed the Fed’s lead, proposing that lenders and mortgage insurance providers be required to hold more capital in order to better deal with home loan risks as rates increase.  (The rules are open to public comment until September 1.)   At the same time, CNBC reported that (according to TransUnion) the US average credit card balance is $5,733 per person with 35% of people saying their balance is near its highest level ever, while 43% say their balance is actually at the lowest level ever.  At the same time, Bankrate reports that the average US credit card interest rate is now 20.55%.” 

With that background, it looks like the Bulls are trying to follow through on their Tuesday gains. All three major index ETFs are near their premarket highs again today and in positive territory relative to the close yesterday. All three remain above their T-line (8ema) with the June CPI data still an hour from being published. So, the bias is still bullish across the market. It looks like the Bulls are trying to add to the week’s gains. However, we should see some premarket volatility (and likely volatility near the open) on that CPI data. After that settles out, do not be surprised if we drift toward the first earnings reports, which start Thursday with the big banks starting again on Friday. Overall, the SPY is near a retest of a double-top with DIA not too far below a retest of a high as well. Meanwhile, QQQ has a little more ground to cover before it reaches its next test. As far as extension goes, none of the three major index ETFs is stretched from its T-line…but…the T2122 indicator is deep into the overbought territory. Of course, the old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available, just more of it available to the Bears.

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

On Monday, markets opened basically flat, with SPY gapping down just 0.05%, DIA opening dead flat, and QQQ gapping down 0.04%.  At that point, we saw a divergence with the large-cap index ETFs rallying until 10:15 am while the QQQ sold off sharply until 10 am.  After that, the DIA ground sideways not far from the highs, the SPY roamed back and forth around the previous close, and QQQ spent the day bobbing back and forth on the downside of the open.  However, a strong rally during the last 10 minutes of the day took all three major index ETFs out at or near the highs.  This gave us a white-bodied, Bullish Engulfing candle that closed just above its T-line (8ema) in the SPY.  Meanwhile, DIA also printed a large-bodied, white-bodied Bullish Engulfing candle that closed not far below its T-line. Finally, QQQ gave us a Doji-type candle that retested and failed its T-line.

On the day, eight of 10 sectors were in the green with the Industrials (+1.29%) and Healthcare (+1.25%) leading the way higher while Communications Services (-0.82%) being by far the laggard. At the same time, SPY gained 0.25%, DIA gained 0.64%, and QQQ gained 0.03%.  The VXX fell two-thirds of a percent to 25.66 and T2122 climbed into to lower end of the overbought territory at 83.64.  0-year bond yields fell to 3.998% while Oil (WTI) fell 0.64% to close at $73.22 per barrel.  So, Monday was an indecisive day in the tech-heavy QQQ and a Bullish day in the large-cap index ETFs.  With that said, most of the day was a sideways grind in all three major index ETFs.  This all took place on just-less-than-average volume in the QQQ, not too far-below-average volume in the DIA, but far-below-average volume in the SPY.

The only major economic news on Monday came from Fed speakers.  At mid-morning, San Francisco Fed President Daly (not a voter in 2023) repeated that she believes we will see two more Fed rate hikes in 2023. She said, “We’re likely to need a couple more rate hikes over the course of this year to really bring inflation”…“We may end up doing less because we need to do less; … we could end up doing more. The data will tell us.”  Later, Cleveland Fed President Mester (an alternate voter in 2023) told a Univ. of CA forum, “In order to ensure that inflation is on a sustainable and timely path back to 2%, my view is that the funds rate will need to move up somewhat further from its current level and then hold there for a while as we accumulate more information on how the economy is evolving.”  (She also acknowledged that her outlook on the fed funds rate matches or is slightly above the FOMC collective view.)  At noon, Atlanta Fed Pres. Bostic (also an alternate voter in 2023) repeated his position that the FOMC needs to be patient on rates and give previous restrictive policy time to bring down inflation before it raises rates again.  He said there are a “pretty straightforward” set of reasons why inflation could return to the two percent target without further increases.  He went on to say “Spending on goods has stabilized” and “There are a lot of statistics…that suggest it has peaked and it is actually starting to come down in terms of activity.”  Elsewhere, Fed Vice-Chair for Supervision Barr laid out a sweeping plan to increase the capital requirements on the largest banks in the wake of the failures in March.  The plan will impact all banks with more than $100 billion in assets (which will include CFG, FITB, HBAN, and RF among regionals).  Barr rained on the parade of the largest banks who had hoped the plan would ease restrictions on them at the same time as increasing the requirements on somewhat smaller banks.  Barr said the new banks that will be required to increase capital will be able to do so with less than two years’ worth of retained earnings.  (Meaning he thinks they can forego dividends for a couple of years to build up their balance sheets.)

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In stock news, AMZN announced it is partnering with BKNG to offer exclusive travel deals during its Prime Day events July 11-12.  Elsewhere, in another sign of the death of newspapers, NYT announced it has disbanded its sports desk and will rely on The Athletic website it acquired for sports coverage.  At the same time, Carl Icahn said that his company IEP has restructured $3.7 billion in personal loans in order to remove the link between his need to post collateral and the company stock price.  (IEP stock closed up 20.20% on the news.)  Later, MBGAF (Daimler Trucks) raised its revenue and profit guidance, citing an easing of supply chain constraints and strong demand.  By mid-day, the UAW announced it will begin contract negotiation with STLA on Thursday, F on Friday, and GM on July 18 (far ahead of the mid-September expiration of the current contracts).  After the close, it was made public that BRKB has agreed to buy the D stake in a Maryland LNG terminal for $3.3 billion. The move will give BRKB 75% ownership of the terminal (which is one of just seven now operating in the US).

In stock legal and regulatory news, an Indian court rejected an appeal by PEP which has appealed the revocation of its patent for a particular variety of potatoes grown exclusively for the company’s Lay’s potato chips.  (The ruling means that the potato can be grown and used by others, including competing brands of chips.)  Elsewhere, the European Commission announced it reached a new data transfer agreement with the US government on Monday.  (The deal was criticized by privacy advocates in Europe and is likely to be challenged after European courts have struck down the two prior data transfer agreements between the countries.  A lobbying group representing AAPL, AMZN, NOK, GOOGL, and others welcomed the deal.)  After the close, Politico reported that the US Dept. of Justice is near announcing its decision on whether to legally challenge the private equity purchase (and taking private of) FORG. Meanwhile, closing arguments were held in a CA Superior Court in the latest case against JNJ related to its talc baby powder containing carcinogens.  Compensatory damages being sought are only $3.8 million.  However, attorneys urged the jury to award many times that amount in punitive damages for company negligence related to baby products.

In late-breaking news, Monday night, MSFT confirmed that it will be eliminating more jobs now that its new fiscal year has begun (in addition to the 10,000 layoffs the tech giant announced in January and completed in the first half).  This move is starting modestly with 276 people from the corporate office in Washington state.  Elsewhere, this morning HCA announced it has suffered a data breach as hackers stole millions of patient’s data (covering more than 20 states) and has put the information up for sale online.  The data includes email addresses, personal data, and some medical records.  Meanwhile, overnight AAPL launched a store on the Chinese online giant TME’s WeChat messaging platform.  (WeChat has 1.2 billion active users, mostly in China and surrounding areas.) 

Overnight, Asian markets leaned heavily to the green side.  New Zealand (-0.03%) was the only red in the region.  Meanwhile, South Korea (+1.66%), Australia (+1.50%), and Taiwan (+1.48%) led the region higher.  In Europe, a similar picture is taking shape at midday.  Only Norway (-0.08%) and the FTSE (-0.14%) are lagging in the red while the other 13 bourses are in the green.  As usual, the CAC (+0.92%) and DAX (+0.43%) lead the region on volume.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the day at this point.  The DIA implies a +0.06% open, the SPY is implying a +0.14% open, and the QQQ implies a +0.19% open albeit early.  At the same time, 10-year bond yields are moving lower to 3.968% and Oil (WTI) is up a half of a percent to $73.34 per barrel in early trading.

The major economic news events scheduled for Tuesday are limited to EIA Short-term Energy Outlook and API Weekly Crude Oil Stocks Report (4:30 pm).  Fed member Bullard (9 am) also speaks.  There are no major earnings reports scheduled for Tuesday either before the open or after the close.        

In economic news later this week, on Wednesday, the June CPI, EIA Crude Oil Inventories, WASDE Ag report, and Fed Beige Book are reported.  There are also two more Fed Speakers (Kashkari and Mester).  On Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, Friday June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations.        

In terms of earnings reports, on Wednesday, MLKN reports.  On Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.        

In miscellaneous news, Turkey did an about-face on Monday with President Erdogan saying he is satisfied and will ask the Turkish Parliament to approve Sweden’s bid to join NATO.  (This literally came a few hours after Erdogan said that he considered Sweden’s membership a bargaining chip, which he might be willing to trade for Turkish admission to the EU.) Elsewhere, Manheim (a used vehicle auction service) reported Monday that US used-car prices by 4.2% in June and were down 10.3% from June 2022 prices.  (This was the largest monthly drop since prior to the Covid-19 pandemic.)  Meanwhile, in state-run media reports Tuesday, China signaled that more economic stimulus is coming soon.  Specifically noted areas for targeted support include the real estate sector (through banking) and the vague “measures to boost business confidence.” 

With that background, it looks like all three major index ETFs are at their premarket highs again today and are all testing their T-lines (8ema) from below. We should remember that we have Fed uber-hawk Bullard speaking this morning, which is very likely to result in talk of larger and more rate hikes than the market expects. Still, the CPI our Wednesday may be a better read-through to Fed action. And, along with earnings starting again later in the week, it would not be surprising to see a “drift day” in the market as traders tread water ahead of those two sets of news. Overall, the pullback in an uptrend continues and only the DIA (laggard all year) is anywhere near putting in a lower-low. So, the trend remains bullish and that’s where the bias should be put when looking for trades. As far as extension goes, none of the three major index ETFs is away from their T-line and the T2122 indicator is just into the lower end of the overbought territory. So, once again, if either the bulls or the bears did find the energy to run today, there is slack (still buyers and sellers available).

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 started modestly lower on Friday, with SPY gapping down 0.24%, DIA gapped down even stronger (by 0.36%), but QQQ opened just 0.06% lower).  At that point, the Bulls took over, recrossing the open gap and leading a rally that lasted until 1:30 pm. However, then the Bulls checked out for the week and the Bears led a steady selloff that lasted the rest of the day, reaching new lows for the day in the last few minutes of the session.  This action gave us large-upper wick, black-bodied candles in all three major index ETFs.  SPY printed a Gravestone Doji that failed the T-line (8ema).  DIA and QQQ both printed a black-bodied Inverted Hammer that also failed the T-line.

On the day, seven of 10 sectors were in the green with Energy (+2.25%) being by far the leading sector while Consumer Defensive (-0.64%) being the laggard.  At the same time, SPY lost 0.25%, DIA lost 0.53%, and QQQ lost 0.33%.  The VXX fell 2.5% to end at 25.83 and T2122 jumped back up to the top end of the mid-range at 70.69.  10-year bond yields rose to 4.066% while Oil (WTI) popped up 2.60% to close at $73.67 per barrel.  So, Friday saw a gap lower followed by the bulls running the first half of the day and the bears roaring the last 2.5 hours to drive the indices back below the lower opens.  This all happened on less-than-average volume in all three major index ETFs with DIA coming close to making it to average volume.

In major economic news Friday, surprisingly after Thursday’s ADP Payrolls number, June Nonfarm Payrolls came in well below the expected level at +209K (compared to a forecast of +225k and a May reading of +306k).  In addition, June Private Nonfarm Payrolls also came in well below the anticipated level at +149k (versus a forecast of +200k and May’s +259k reading).  Combined, this was the smallest increase in new jobs in 2.5 years.  So, the economy continues to add jobs but has reduced the pace of increases by almost 50%.  At the same time, June Average Hourly Earnings were reported at +4.4% (versus a forecast of +4.2% but in line with the May value of +4.4%).  The June Participation Rate also remained steady at 62.6%.  Finally, the June Unemployment Rate came in as expected at 3.6% (compared to a forecast of 3.6% and a tick lower than the May value of 3.7%).  In Fed Speak news, on Friday Chicago Fed President Goolsbee told CNBC that he expects inflation to be tamed without a recession, even with additional rate hikes.  Goolsbee said, “The Fed’s overriding goal right now is to get inflation down. We’re going to succeed at it and to do that without a recession would be a triumph,” … “That’s the golden path, and I feel like we’re on that golden path.”  He went on to say, “Overall, the jobs market is outstanding and is getting back to a balanced, sustainable level.”  He ended by confirming that “almost all” of the FOMC voters’ projections point to one or two more hikes. “(So,) there are some modest increases to come, but we’ve done a lot of the lifting and now we’re waiting for the impact.”

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In stock news, FSLR announced Friday that it has obtained a $1 billion revolving credit facility.  At the same time, in China, TSLA announced a new program offering a $500 “cash bonus” (discount) to new customers if they are referred by an existing TSLA owner.  Elsewhere, EADSY (Airbus) announced it will be doing inspections and any needed repairs of its A380 superjumbo jets for customer Emirates Air.  This move comes after increased cracking of wing spars on the A380s in the Emirates fleet.  At the same time, MRNA announced it has signed a deal with China to set up plants and produce mRNA-based medicines in Shanghai China.  (The focus of the deal will be treatments for cancer as well as cardiovascular and autoimmune diseases.)  By day end on Friday, META said that it has more than 70 million users of its 24-hour-old Instagram Threads “friendlier” competitor to Twitter.  (Analysts say META only needs 1-in-4 of its Instagram users to use Threads in order to eclipse Twitter as the largest social-networking app.)

In stock legal and regulatory news, CEO Jamie Dimon urged a dismissal (petitioning both the court and plaintiffs) of a shareholder lawsuit related to the JPM relationship with Jeffrey Epstein Friday.  Elsewhere, the CA State Supreme Courted ruled that CA businesses cannot be sued for negligence related to workers who contracted COVID-19 on the job and then spread the disease to family members.  At the same time, TSLA put more pressure on the US EPA to finalize tougher emissions standards (that would essentially mean more vehicles would need to be electric).  Immediately after the TSLA statement, a group representing GM, TM, VLKAF, and other automakers put out their own statement strongly opposing tighter emissions rules.  Meanwhile, the US Postal Service hiked the price of first-class postage from 63 cents to 66 cents (+4.7%) as of Sunday.  Obviously, this impacts any companies mailing paper documents.  At the same time, US Labor Sec. Su said Friday that she sees no need to step into the UPS-Teamsters negotiations at this time.  However, she (obviously) urged the sides to come to an agreement soon.  (The contract between those two parties ends July 31 and UPS delivers goods worth just over six percent of the US GDP.)   In other news, the US Court of Appeals rejected Venezuela’s motion aimed at preventing six companies joined a court-proposed auction of the assets of Citgo Petroleum as a way to settle past expropriation claims against Venezuela.  Among the companies are OI and HII.  Later, a group of 15 Republican State Attorney’s General sent a letter to BLK questioning whether the mutual funds run by BLK were sufficiently independent as part of their crusade against ESG (which BLK supports considering).  After the close, the NTSB said it is investigating an engine fire on a BA 737-900 MAX operated by UAL which happened at the Newark NJ airport last week.  (The engine was built by a firm partially owned by GE.)  Finally, a NY judge sided with UBER and DASH (as well as others) and issued a temporary restraining order prohibiting the enforcement of the New York City $17.96 minimum wage for app delivery drivers.

In geopolitical news, it is worth noting that Russia’s invasion of Ukraine passed the 500-day make over the weekend. Elsewhere, ahead of the NATO meeting this week, NATO has removed the Membership Action Plan (MAP) which was a long process designed to slow and modify prospective member’s militaries to better fit. This is seen as shortening the path for Ukraine to join, without just outright granting membership in the middle of the war inflicted upon them.  (If they were members, all NATO countries would be at war with Russia if Ukraine requested it.) Speaking of Russia, the Kremlin spokesman told reporters today that five days after the coup, Putin met with 35 members of Wagner PMC, including Prigozhin and Wagner unit leaders. The meeting lasted more than three hours.

Overnight, Asian leaned to the green side on modest moves with only 3 exchanges in the red numbers.  Hong Kong (+0.62%), Shenzhen (+0.50%), and Thailand (+0.43%) led the region higher while Japan (-0.61%), Australia (-0.54%) and South Korea (-0.24%) were the only red.  In Europe, we see green across the board at midday.  The CAC (+0.55%), DAX (+0.45%), and FTSE (+0.23%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed open on either side of flat.  The DIA implies a +0.10% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.24% open at this hour.  At the same time, 10-year bond yields are up to 4.054% and Oil (WTI) is down two-thirds of a percent to $73.35 per barrel in early trading.

The major economic news events scheduled for Monday are limited to three Fed speakers (Daly at 10:30 am, Mester at 11 am, and Bostic at noon). The major earnings reports scheduled for the day are limited to HELE before the open.  There are no major earnings reports scheduled for after the close.         

In economic news later this week, on Tuesday we get the API Weekly Crude Oil Stocks Report.  Then Wednesday, the June CPI, EIA Crude Oil Inventories, WASDE Ag report, and Fed Beige Book are reported.  There are also two more Fed Speakers (Kashkari and Mester).  On Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, on Friday, the June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations are reported.        

In terms of earnings reports, on Tuesday there are no major earnings reports scheduled.  Then Wednesday, MLKN reports.  On Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC..        

In miscellaneous news, US natural gas prices fell 8% last week after updates to US weather models showed an easing of the heatwave which has gripped much of the South for three weeks.  Also impacting the price was the Weekly Nat Gas Storage report, which showed an unexpectedly large 72 billion cubic foot build in inventories.  Elsewhere, the credit issued by US commercial banks rose slightly in the prior week, reaching $17.31 trillion (unadjusted) for the week ending June 28.  However, the part of that lending going to small and medium-sized businesses fell slightly from $2.78 trillion to $2.77 trillion.  On the deposit side, commercial bank deposits fell slightly, down $900 million to $17.343 trillion.  Meanwhile, as Treasury Secretary Yellen returns from Beijing, we get word that China’s CPI was dead flat +0.00% year-on-year in June. This brings hope and expectations that Chinese stimulus will come soon and will help bolster global markets, including the US.

With that background, it looks like all three major index ETFs are at their premarket highs at the moment after another gap down to start the early session. With today only having Fed speakers as news drivers and with CPI and the start of earnings again coming later in the week, it would not be surprising to see a “drift day” in the market. Overall, the pullback in an uptrend continues. However, we should note that DIA (laggard all year) is the weakest of the three and most recently printed a lower high. So, it is either acting as the canary in the coal mine or it is just the anchor that the leaders have to drag along with them. As far as extension goes, none of the three major index ETFs is very far from their T-line and the T2122 indicator remains in the mid-range. So, if either the bulls or the bears did find the energy to run today, there is slack (still buyers and sellers available).

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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