Markets opened very modestly higher Monday (up 0.14% in the SPY, up 0.09% in the DIA, and up 0.15% in the QQQ).  However, after that open the Bears stepped in to recross the gap and reach the lows of the day at about 10:15 am. From there, the Bulls took the three major indices on a slow, wavy rally that reached the highs of the day at about 1:15 pm.  At that point, we took some profits and then ground sideways in a tight range not too far off the highs.  This action gave us indecisive candles in the SPY, DIA, and QQQ.  The DIA printed a Doji Bullish Harami, the SPY printed a white-bodied Spinning Top Bullish Harami, and the QQQ gave us more of a larger white-bodied Hammer-type candle.  The SPY and QQQ remain above their T-line (8ema) while the DIA remains below its own T-line but also remained above its 50sma.

On the day, nine of the 10 sectors were in the green as Technology (+1.30%) led the way higher while Utilities (-0.79%) lagged behind the other sectors.  At the same time, the SPY gained 0.33%, DIA gained 0.17%, and QQQ gained 0.54%.  VXX was down 2.69% at 36.50 and T2122 climbed back up while remaining in the mid-range at 61.70.  10-year bond yields climbed back to end up to 3.496% while Oil (WTI) gained 1.48% on the day to end at $71.12 per barrel.  So, Monday was an indecisive yet overall bull market that nudged a bit higher.  This came despite very disappointing economic news prior to the open.  And, once again, this happened on well less-than-average volume across all three major indices.    

In economic news, the New York Fed Empire State Manufacturing Index came in far below expectations at -31.80 (compared to a forecast of -3.70 and the April value of +10.80). In Fed speak, Chicago Fed President Goolsbee said Monday that his decision to support a quarter-point hike at two weeks ago was a “close call.”  He went on to say that the thing which gave him pause on a last hike was the potential impact of a hike on credit conditions.  Elsewhere, Atlanta Fed President Bostic told CNBC that if there was a vote Monday, he would vote to hold rates flat.  He went on to say “The appropriate policy is really just to wait and see how much the economy slows from the policy actions that we’ve (already) had.”  However, at the other end of the spectrum was Minneapolis Fed President Kashkari, who told a conference the Fed probably has “more work to do on our end, to try to bring inflation back down.”  He is joined on that side by Richmond Fed President Barkin who told Reuters “You could tell yourself a story where inflation comes down relatively quickly … with only a modest economic slowdown (but) I’m not yet convinced … I do wonder whether we’re not going to need more impact on demand to bring inflation down to where we need to go.”

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In stock news, Reuters reported Monday that WDC and Kioxia (formerly Toshiba’s Memory Business Unit) are speeding up their merger talks in a very tough business environment for computer memory makers.  If agreed, the deal would likely face tough antitrust challenges since the two are the #2 and #4 flash memory makers in the world.  WDC closed up 11.26% on the story Monday. Elsewhere, STLA has stopped the work on construction of a $3.74 billion battery plant in Windsor CA over a disagreement on subsidies. (STLA is now demanding that the CA government give it the same subsidies and grant very recently offered to VWAGY (Volkswagen) in order to get them to commit to building a battery plant in Canada.  STLA made their location decision in 2022 and had already begun plant construction prior to the VWAGY deal.)  In other EV news, FSR announced Monday that it is accelerating production of its Ocean SUV, raising its output goal to between 1,400 and 1,700 by the end of June.  Meanwhile, HEI announced it has reached a deal to buy Wencor (private) for just over $2 billion in order to fill out its portfolio of generic aerospace parts.  In that space, late in the day, Bloomberg reported that DAL is in talks with EADSY (Airbus) for a large wide-body jet order.   At the same time, Reuters reported that CEO Elon Musk has told TSLA management that there can be no hires (including contractors) unless he personally approves the hiring request.  For reference, TSLA has 128k employees at the moment.  Finally, after the close Monday, BRKB said it has begun investing in COF and that it no longer has a position in BK.  This was a somewhat odd information release since regulatory filings back on March 31 had shown this to be the case.

In stock legal and regulatory news, in an interesting twist to a saga that was thought to be dead, the EU gave antitrust approval to the MSFT $69 billion purchase of ATVI.  However, MSFT still faces an uphill battle in overturning the British veto of this acquisition.  MSFT has until May 24 to appeal the denial from the British Competition and Marketed Authority.  In other European legal news, a French prosecutor in Paris has opened a judicial inquiry into “planned obsolescence” and “deceptive marketing” of AAPL products stemming from a December 2022 complaint.  Elsewhere, GS was fined $7.3 million by the ECB for underreporting the risk associated with some corporate loans between 2019 and 2021.  Meanwhile, ABT was sued Monday in a proposed class action suit claiming the company advertising misled consumers into believing its PediaSure product would increase the height of children.  On the docket for Tuesday will be AI regulation as the CEO of OpenAI will appear before a US Senate panel that is considering several different approaches to AI regulation.  MSFT and GOOGL will be the most obviously impacted companies from such regulation.  However, IBM, BABA, BIDU, AMZN, CRM, NVDA, TMPS, TSLA, and dozens of other companies offer or use AI already and could be impacted. Finally, Elon Musk lost his appeal to the US Second Circuit Court of Appeals.  Musk’s appeal was an attempt to overturn his settlement with the SEC which requires the advance review of any tweets Musk puts out containing information about TSLA after Musk’s tweets misled investors in 2018.  (Musk also paid a $20 million fine and was forced to temporarily step down as CEO of TSLA.)

In miscellaneous news, the US Dept. of Energy said after the close that it will purchase 3 million barrels of crude oil to begin filling the Strategic Petroleum Reserve with offers to be submitted by May 31 for delivery in August. Elsewhere, the NY Fed released data showing that the demand for new mortgages had slowed substantially in Q1.  The Fed said this demand fell to the lowest Q1 level since 2014, even after overall mortgage debt rose $121 billion from Q4 to $12.04 trillion.  This came as overall household debt levels rose 0.9% to $17.05 trillion. 

Overnight, Asian markets were mixed.  Taiwan (+1.28%) and Japan (+0.73%) led the gains while Shenzhen (-0.71%), India (-0.61%), and Shanghai (-0.60%) paced the losses.  In Europe, we see a similar picture taking shape at midday.  Belgium (-1.11%) is by far the biggest mover.  However, the CAC (+0.07%), DAX (+0.12%), and FTSE (+0.13%) lead the more plentiful green bourses in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a mixed start to the day.  The DIA implies a -0.23% open, the SPY is implying a -0.07% open, and the QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.478% and Oil (WTI) is off a quarter of a point to $70.95/barrel in early trading.

The major economic news events scheduled for Tuesday include April Retail Sales (8:30 am), April Industrial Production (9:15 am), March Business Inventories and the March Retail Inventories (both at 10 am), and the API Weekly Crude Oil Stocks report (4:30 pm).  We also have Fed speakers (Mester at 8:15 am, Bostic at 8:55 am, Barr testifies at 10 am, Williams at 12:15 pm, and Bostic again at 7 pm).  There will also be another meeting between President Biden and the leaders of both parties from Congress over the debt ceiling (and budget deficit).  The major earnings reports scheduled for the day include BIDU, HD, IQ, SE, and TME before the open.  Then, after the close, CPRT, KEYS, KD, and PTC report.  

In economic news later this week, on Wednesday, April Building Permits, April Housing Starts, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, April Existing Home Sales, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, we hear from two Fed speakers (Chair Powell and Williams).

In terms of earnings reports later this week, Wednesday, we hear from ARCO, TGT, TJX, SQM, CSCO, STNE, SNPS, TTWO, VSAT, and ZTO.  On Thursday, WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, WMT, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report.  Finally, on Friday, we hear from DE and FL.

After the close, NU and XP both reported beats on the revenue and earnings lines.  So far this morning, BIDU, TME, and ONON have reported beats on both the revenue and earnings lines. Meanwhile, HD missed on the top line while beating on earnings.  At the same time, SE and IQ have missed on both the top and bottom lines.  It’s worth noting that ONON has raised guidance while HD lowered its forward guidance.

With that background, it looks like the premarkets are pulling back from earlier highs. However, all three major indices still are hanging inside their recent tight chopping range. The SPY and QQQ remain above their T-lines and the DIA remains below its own 8ema. Only the QQQ has been clearly trending bullishly of late with the SPY grinding sideways and the DIA leaning to the bearish side of trend. With that said, DIA is sitting on a potential support level and the SPY has one just below. All three major indices have a little room above before hitting the next potential resistance level. Over-extension is not a problem yet, either in terms of distance from the T-lines or in terms of the T2122 indicator. So, be careful given the chop and divergence of short-term attitudes of the SPY, DIA, and QQQ.

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 Friday, markets opened very modestly higher (up 0.29% in the SPY, up 0.35% in the DIA, and up 0.17% in the QQQ).  However, then the Bears took over for most of the day as all three major indices sold off slowly and reached the lows of the day at about 2:30 pm.  At that point, the Bulls stepped in to lead a steady rally up off the lows for the last 90 minutes of the day.  This action gave us black-bodied, Hammer-like candles in the SPY, DIA, and QQQ.  With that said, the QQQ bounced up off its T-line (8ema) while printing a Bearish Engulfing signal (that engulfed a white Spinning Top) on what was the largest-bodied Hammer of the three.  At the same time, the SPY retested and managed to hold its T-line.  Meanwhile, the DIA lagged and did not manage to even retest its T-line during the day.

On the day, six of the 10 sectors were in the green (although only two of them were more than just marginally green).  Utilities (+0.59%) and Energy (+0.46%) led the way higher while Consumer Cyclical (-0.77%) lagged behind the other sectors.  At the same time, the SPY lost 0.13%, DIA lost 0.04%, and QQQ lost 0.36%.  VXX was flat at 37.51 and T2122 fell but remains in the mid-range at 27.46.  10-year bond yields spent the day climbing back to end up just positive at 3.453% while Oil (WTI)fell 1.20% on the day to end at $70.09 per barrel.  So, Friday consisted of 5 hours of slow, steady, bearish action followed by 90 minutes of bullish relief.  This all happened on well less-than-average volume across all three major indices.    

In economic news, April Export Price Index came in just as anticipated at +0.2% (right on the forecast but well above the March value of -0.6%).  However, the April Import Price Index came in above expectation at +0.4% (compared to a forecast of +0.3% and also far above the March reading of -0.8%).  Later, Michigan Consumer Sentiment was reported well below expectation at 57.7 (versus a forecast of 63.0 and the April reading of 63.5).  Elsewhere, Fed uber-hawk Bullard told a Hoover Institution conference that “Monetary policy is now at the low end of what is arguably sufficiently restrictive given current macroeconomic conditions.” He went on to say “the prospects for continued disinflation are good but not guaranteed.”  Finally, President Biden nominated sitting Fed Board member Philip Jefferson to become Fed Vice Chair and current World Bank representative from the US Adriana Kugler to take Jefferson’s seat on the Fed if, in fact, Jefferson is confirmed by the Senate.

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In stock news, on Friday, Twitter announced that Elon Musk will be stepping down as CEO in six weeks, to be replaced by a former NBC (owned by CMCSA) Advertising Executive, while Musk remains as Chairman and “Chief Technology Officer.”  This move is aimed at easing the fears of advertisers who have taken away business and expressed serious concerns since Musk took over the company.  In other big tech news, NFLX told the Wall Street Journal on Friday that it’s planning to reduce spending by $300 million in 2023.  However, the company also said it won’t implement a hiring freeze or additional layoffs.  In the afternoon, TSLA announced it had received an endorsement for its “Full Self Driving” program in China by the Shanghai Municipal Commission.  Elsewhere in electric auto news, FSR announced that it is postponing the release of its “Pear” model until 2025.  Meanwhile, solar stocks soared Friday after new guidance from the Treasury Dept. clarified the clean energy tax incentives that are available to customers installing solar panels.  This included FSLR (+26.48%), ARRY (+16.00%), and ENPH (+4.20%) among others.   After the close, the CEO of PFE told Reuters that negotiating with Medicare over drug prices is like “negotiating with a gun to your head.”  While he said he was unaware of plans Friday, he told the outlet that he expects drug companies to sue in order to block the requirement that drug companies must negotiate the prices they charge.  (This might just be relying on a conservative court system and Supreme Court to lean in favor of business since drug companies already negotiate prices with insurance plans as well as other countries.)

In stock legal and regulatory news, EU antitrust regulators postponed the deadline for their decision on the AVGO proposed $61 billion acquisition of VMW until June 26.  At the same time, HSBC agreed to pay $75 million to settle CFTC (US Commodity and Futures Trading Commission) charges of manipulative and deceptive trading as well as record-keeping failures by the firm.  Meanwhile, China announced their equivalent of a recall, saying TSLA had agreed to fix the software on 1.1 million Model S, Model X, and Model 3 TSLA vehicles (nearly every car the company has ever sold in China).  This is intended to fix a brake failure issue and will be done via over-the-air software updates starting May 29.  (The US NHTSA said it is aware of the problem and is still gathering information related to TSLA vehicles in the US.)  Elsewhere, the business lobby Chamber of Commerce has sued the SEC in an effort to get a new rule forcing corporations to disclose more information about their share buyback programs.  Later, GOOGL agreed to pay the state of TX $8 million to settle claims of deceptive advertising related to the Pixel 4 smartphone.  Toward the end of the day, TSLA Model S and Model X owners sued TSLA over software updates that decreased driving range or caused battery failures in their cars.  The case claims TSLA violated both state and federal laws and has been proposed as a class action suit.  In other auto news, after the close Friday, the NHTSA announced that GM is recalling 1 million SUVs in the US due to the possibility of the airbag inflator exploding during deployment.  This includes the 2014-2017 model years of many different GM brands.  This was part of 67 million airbag inflators that were made by Delphi (which is now owned by ALV) that the company is refusing to recall

In miscellaneous news, the Fed reported Friday that the amount of money parked in money-market funds rose to an all-time high for the second straight week.  Despite this, the Fed also reported that US bank deposits rose in early May, ticking up from the lowest level in two years while bank lending did not change appreciably and remains at that low level.  Elsewhere, in potentially ominous news for the tech industry, China’s largest smartphone manufacturer (Oppo) announced that it is closing its chip design business unit as the global smartphone market continues to decline.  Finally, the Wall Street Journal reported Saturday that AMZN has “optimized” its delivery network.  The redesign results in products having 12% fewer touchpoints prior to being delivered.  At the same time, AMZN is offering US customers $10 to pick up a purchase rather than have it delivered to a home address. 

Overnight, Asian markets leaned to the green side.  Hong Kong (+1.75%), Shenzhen (+1.57%), and Shanghai (+1.17%) led the region higher while Thailand (-1.28%) was the main loser.  In Europe, the bourses are green across the board at midday.  The CAC (+0.48%), DAX (+0.25%), and FTSE (+0.47%) lead the region with Russia (+1.54%) oddly being the largest gainer in mid-afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modest gap higher to start the day.  The DIA implies a +0.36% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.26% open at this hour.  At the same time, 10-year bond yields are up to 3.487% and Oil (WTI) is up 0.57% to $70.44/barrel in early trading.

The major economic news events scheduled for Monday is limited to NY Empire State Mfg. Index (8:30 am) and a Fed speaker (Kashkari at 9:15 am).  The major earnings reports scheduled for the day include CTLT, AZUL, CGAU, and GOGL before the open.  Then, after the close, JHX, NU, and XP report. 

In economic news later this week, on Tuesday, we get April Retail Sales, April Industrial Production, March Business Inventories, March Retail Inventories, API Weekly Crude Oil Stocks report and a Fed speaker (Williams).  Then Wednesday, April Building Permits, April Housing Starts, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, April Existing Home Sales, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, we hear from two Fed speakers (Chair Powell and Williams).

In terms of earnings reports later this week, on Tuesday, BIDU, HD, IQ, SE, TME, CPRT, KEYS, KD, and PTC report.  Then Wednesday, we hear from ARCO, TGT, TJX, SQM, CSCO, STNE, SNPS, TTWO, VSAT, and ZTO.  On Thursday, WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, WMT, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report.  Finally, on Friday, we hear from DE and FL.

So far this morning, TIO reported beats on both the top and bottom lines.  (Including a surprise 121% revenue beat.)  Meanwhile, TGP beat on revenue (a 117% surprise) while missing on the earnings line.

With that background, it looks like the bulls are looking to make a modest push to start the week. The DIA is poised to retest its T-line from below, while the SPY and QQQ seem to be making modest gains further above their own 8emas. With that said, both of the large-cap indices remain inside their recent sideways chop range of the last week and a half with only the QQQ trending (higher) over that period. None of the major indices are fighting a resistance level right this moment, but all of them have a resistance level not too far above. Over-extension is not a problem yet, either in terms of distance from the T-lines or in terms of the T2122 indicator.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, the large-cap indices gapped modestly lower (down 0.21% in the SPY and down 0.24% in the DIA) while the QQQ opened flat (down just 0.05%).  The Bears followed through in the SPY and DIA, taking price on a rollercoaster ride down to the lows of the day at about 12:10 pm.  Meanwhile, QQQ also sold off but only until 10:30 am when a choppy sideways wave action lasted the rest of the day and left price up off the lows but still below the open.  SPY and DIA followed the QQQ starting at 12:10 pm.  This action left us with indecisive, black-bodied candles in all three indices.  The QQQ printed a Spinning Top, while the two large-cap indices were just black candles with a larger lower wick than the upper wick.

On the day, nine of the 10 sectors were in the red with Financial Services (-1.55%) leading the way lower on regional bank concerns while Utilities (+0.58%) held up better than the other sectors.  At the same time, the SPY lost 0.71%, DIA lost 0.82%, and QQQ lost 0.35%.  VXX climbed 4.89% to 42.06 and T2122 dropped back down into the oversold territory at 10.02.  10-year bond yields climbed slightly to 3.373% while Oil (WTI) was flat on the day at $68.65 per barrel.  So, Thursday was an undecided day with a modest gap down (follow through on Wednesday’s Fed news) in the large caps. This led to choppy, mildly bearish action the rest of the day across the market.  This all happened on just less than average volume in all three major indices.    

In economic news, April Exports increased to $256.20 billion (compared to a March value of $250.90).  At the same time, April Imports fell to $320.40 billion (versus the March reading of $321.50 billion).  As a result, the April Trade Balance fell to $64.20 billion (from March’s $70.60 billion but still above the forecast of $63.30 billion).  In terms of quarterly data, Q1 Preliminary Nonfarm Productivity fell significantly more than expected at -2.7% (as compared to a forecast of -1.8% and the Q4 final value of +1.6%).  This was in large part caused by a significantly higher than anticipated Q1 Preliminary Unit Labor Costs of +6.3% quarter-on-quarter (versus a forecast of +5.5% and a Q4 final number of +3.3%).  Meanwhile, Weekly Initial Jobless Claims were just about as expected at 242k (compared to a forecast of 240k and a prior week’s value of 229k).  Then after the close, the Fed Balance Sheet was reported lower at $8.504 trillion (versus the previous reading of $8.563 trillion or a $59 billion reduction).  At the same time, Bank Reserves held with the Federal Reserve grew to $3.166 trillion versus a previous value of $3.132 trillion).

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In stock news, JNJ’s spinoff IPO KVUE (the largest IPO in a long time) climbed on Thursday in its first day of trading.  The IPO was launched at $22.00 and closed at $25.53 (+17%) which gives it a market cap of $48 billion.  (JNJ still holds a 91.9% stake in the company.)  Elsewhere, Bloomberg reported that MSFT is working with AMD and helping finance the chipmaker’s expansion into AI processors.  At the same time, a German outlet reports that TSLA is actually using batteries from Chinese firm BYD to build Model Y cars in Berlin.  (This makes BYD the fourth external battery supplier for TSLA.)  Elsewhere in Europe, Reuters reports that UBS is considering an IPO to spin off the former Swiss banking operations of CS.  Meanwhile, AFLYY (Air France – KLM) is in talks with APO seeking a $550 million cash injection.  In Asia, Taiwan announced that LMT had informed the country that deliveries of 66 new F-16V fighters ($8 billion sale) will be delayed due to LMT supply chain issues.  The first deliveries had been scheduled for Q4 of 2023.  Finally, the CEOs and other executives of MSFT and GOOGL met with the President and Vice President Thursday.  The companies were told they have a legal responsibility to ensure their products are safe (related to AI inclusion to their products).  The two-hour meeting offered no specific guidelines, rules, laws, or threatened fines.  However, the White House did announce a $140 million investment into the National Science Foundation allowing it to launch seven AI research institutes focused on different aspects of Artificial Intelligence.

In stock legal and regulatory news, US appeals court judges seemed to take SBUX’s side in the coffee chain’s appeal of its loss of an NRLB case that found the company hurt or sought to hurt union organizing efforts by firing seven leaders of the organizing efforts in Memphis, TN.  The judges seemed to ignore the fact that the company fired those people to kill the union effort, instead focusing on the fact that, even after the firings, the Memphis SBUX store did vote to unionize.  Elsewhere, GM pleaded guilty to failing to take adequate safety precautions and thus causing the death of a worker in Canada.  The company agreed to pay a $325,000 fine over the case.  In France, the country’s antitrust agency told META it has two months to change its rules for ad verification partners to avoid being found to be taking unfair advantage of its dominant online advertising market position.  At the close, it was announced that KR has agreed to pay West Virginia $68 million to settle claims related to lax oversight in the opioid epidemic in the state.  Also after the close, AAPL complained that patent owner Arendi had revealed secrets (about how much AAPL paid to settle a patent infringement case) during a separate patent infringement case against GOOGL, violating a confidentiality agreement.  AAPL has asked a court for unspecified damages over the disclosure.

In regional banking news, it was another bleak day in the market for those regional banks.  PACW fell more than 50% on the Wednesday night news that it is “exploring its strategic options.” This opened the floodgates for the shorts to press the group leading WAL to fall 38% (on denied reports by the Financial Times that WAL is exploring a potential sale), FHN to drop 33% (this largely due to the premarket announcement that TD and FHN had called off their merger), and CMA to fall more than 12% for the day.  Still, there were a few winners, on volume, among those regionals.  SI was up 7% and BBD gained almost 2%.  It should be noted that Reuters reported after the close that US federal and state officials are investigating potential “market manipulation” behind recent huge regional banking share moves. 

After the close, AAPL, CNQ, OPEN, ED, EOG, SQ, RGA, BKNG, MSI, NCR, MCHP, LYV, CTRA, SEM, AMN, MNST, DASH, POST, COIN, MATX, CTNT, MTD, LYFT, CNXN, DBX, TDC, NOG, and KE all reported beats on both the revenue and earnings lines. Meanwhile, AIG, BCC, OTEX, COLD, BIO, and BGS all missed on revenue while beating on earnings.  On the other side, LNT, FND, TXRH, TEAM, and DKNG all beat on revenue but missed on earnings.  Unfortunately, GT, RKT, EXPE, BECN, TSE, TDS, USM, AND ERJ all missed on both the top and bottom lines.  It should be noted that OPEN, TPC, LYFT, BIO, and ATSG all lowered their forward guidance while POST, FTNT, and DKNG raised their guidance.

Overnight, Asian markets were mixed.  India (-1.02%), Shenzhen (-0.82%), and New Zealand (-0.67%) paced the losses.  Meanwhile, Hong Kong (+0.50%), Australia (+0.37%), and Malaysia (+0.35%) led the gainers.  In Europe, the bourses are mostly green at midday.  The CAC (+0.47%), DAX (+0.79%), and FTSE (+0.40%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures point to a gap higher to start the day.  The DIA implies a +0.48% open, the SPY is implying a +0.66% open, and the QQQ implies a +0.65% open at this hour.  At the same time, 10-year bond yields are back up to 3.407% and Oil (WTI) is up 2.65% to $70.38/barrel in early trading.  

The major economic news events scheduled for Friday include April Average Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, and April Unemployment Rate (all at 8:30 am).  The major earnings reports scheduled for the day include AES, AMC, AMCX, AEE, AXL, AMRX, BBU, BEPC, BEP, CLMT, CI, CNK, CNHI, D, ENB, EPAM, EVRG, FLR, FYBR, GLP, GTN, HUN, IEP, JCI, LSXMK, LSXMA, MGA, NMRK, OMI, PBF, PAA, PAGP, QRTEA, WBD before the open.  Then, after the close, BAP reports. 

So far this morning, CI, MGA, PBF, JCI, OMI, EVRG, EPAM, BEPC, BEP, CLMT, CNK, AMRX, PNM, and FSK have all reported beats on both the revenue and earnings lines.  Meanwhile, HUN missed on revenue while beating on earnings.  On the other side, FLR, AES, QRTEA, FYBR, and GTN all beat on revenue while missing on the earnings line.  Unfortunately, WBD and UI missed on both the top and bottom lines.  It is worth noting that OMI raised its forward guidance while EPAM and GTN lowered their guidance.

In miscellaneous news, Bloomberg reported Thursday evening that during April, six of every 10 small businesses reported hiring (or trying to hire) new employees.  Related to earnings, as mentioned above AAPL beat on both lines on stronger-than-expected iPhone sales.  However, this was the company’s second consecutive quarterly revenue decline.  The report also showed a record for services including Apple TV+ and iCloud.  The company also announced a $90 billion share buyback program. 

With that background, it looks like the bulls are headed toward the T-line (8ema) in the large-cap indices while the QQQ has already tested and passed back above that level in premarket. Over-extension from the T-lines is not a problem and while T2122 is well into the oversold territory, it is not extremely extended. Don’t forget that we have preliminary April Payroll data this morning and that is likely to impact premarket and the open at the very least. Also, it’s Friday…payday…so pay yourself and get your account ready for the weekend news cycles.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened just on the green side of flat (up 0.11% in the SPY, up 0.12% in the DIA, and up 0.12% in the QQQ).  At that point, we saw a meander sideways dipping up and down until the Fed report.  However, at 2 pm all three of the major indices got very volatile for an hour.  Then a hard selloff took hold for the last hour of the day across the market.  This action gave us black-bodied candles with an upper wick, that closed very near the lows of the day in the SPY, DIA, and QQQ.  If you had squinted and called the prior three candles Evening Stars in those three, then you’d have to say that today we saw bearish follow-through.  All three of the indices are back below their T-line (8ema) with the SPY and DIA back down within 1.5% of their 50sma. 

On the day, eight of the 10 sectors were in the red with Energy (-1.42%) leading the way lower while Healthcare (+0.63%) held up better than the other sectors.  At the same time, the SPY lost 0.69%, DIA lost 0.83%, and QQQ lost 0.65%.  VXX climbed 1.34% to 39.41 and T2122 climbed to just outside of the oversold territory at 20.13.  10-year bond yields dropped again to 3.362% while Oil (WTI) plunged another 4.77% to $68.22 per barrel.  So, to summarize, Wednesday was an undecided, slightly bullish day until the Fed announcement.  Then it got very volatile and the bears took over for good at 3 pm driving us lower into the close.  This all happened on just less than average volume in the SPY and QQQ and right at average in the DIA.     

In economic news, The April ADP Nonfarm Employment Change came in far larger (double) than expected at +296k (compared to a forecast of +148k and the March value of +142k).  Later in the morning, the April S&P Global Composite PMI came in just shy of the anticipated level at 53.4 (versus a forecast of 53.5 but still better than the March reading of 52.3).  At the same time, US April Service PMI also came in just shy of expectation at 53.6 (compared to the 53.7 forecasted but also better than the March value of 52.6).  Then the April ISM Non-Mfg. PMI came in slightly above the anticipated value at 51.9 (versus a forecast of 51.8 and above the March reading of 51.2).  Next, the EIA Weekly Crude Oil Inventories Report showed a slightly larger than expected drawdown of 1.280-million-barrels (versus a forecasted 1.100-million-barrel drawdown but far less than the prior week’s 5.054-million-barrel draw).  However, this was all prelude to the Fed news.

SNAP Case Study | Actual Trade

In Fed news, the FOMC raised rates one-quarter of one percent to a range of 5.00% to 5.25% as was widely expected.  Also, as they have been signaling for some time (to those who want to pay attention), the FOMC opened the door to at least a pause in rate hikes by dropping the language that said “some additional policy firming may be appropriate” and replacing it with “the extent to which additional policy firming may be required would take into account the cumulative tightening of monetary policy.” Then in his press conference, Fed Chair Powell flat out said, “we were no longer saying that we anticipate [some additional policy firming].”  Everything else about the statement and the press conference was normal, always leaving themselves wiggle room and firmly committing to nothing.  However, there were a couple of notable mentions.  Powell said, “The case of avoiding a recession is in my view more likely than that of having a recession.”  Finally, Powell tried to dissuade markets from expecting rate cuts soon by saying “We on the committee have a view that inflation is going to come down not so quickly.” … “It will take some time [for inflation to react to Fed moves that have already been made], and in that world, if that forecast is broadly right, it would not be appropriate to cut rates and we won’t cut rates.”  (Markets seem to be ignoring Powell on that count with Fed Fund Futures pricing in a 70% probability of a rate cut in September.)

In stock news, LLY announced Wednesday that a late-stage trial of its Alzheimer’s drug showed the drug slowed cognitive decline by 35%.  This was a bit better than similar studies from competitors BIIB and ESAIY, whose study found their drug slowed the decline by 27%.  In the car industry, TSLA resumed taking US orders for its Model 3 car at a price that is 18.5% below the August 2022 price.  However, the Model 3 is also eligible for a $3,750 US government tax credit.  Meanwhile, Reuters reported the F is facing another production issue causing three plant closures and an unspecified number of F-150 trucks to be parked unfinished due to a shortage of the correct door handle.  Elsewhere, DRI announced it is purchasing RUTH in an all-cash deal for $715 million.  At the same time, EADSF (Airbus) said Pratt and Whitney (owned by RTX) is having a hard time supplying enough engines and spare parts needed for Airbus to maintain its fleet.  This came after India’s third-largest airline filed for bankruptcy, citing the failure of RTX engines and lack of supplies as a reason. At the close, U announced it will lay off 8% (600 employees) of its workforce.  Also, after the close, OPCH said it is acquiring AMED in an all-stock deal worth $3.6 billion, which would be a 26% premium on the AMED May 2 closing price.  Finally, Bloomberg reported in the early evening that PACW is now “exploring strategic options” as 80% of the regional bank’s loan book is in the commercial and residential real estate markets.  PACW stock fell 60% in post-market trading on the news.

In stock legal and regulatory news, lawyers for HOOD presented arguments in a MA court on Wednesday.  The case is over whether the MA Sec. of State has the right to impose the fiduciary standard that brokers avoid or disclose conflicts of interest to the customer.  (As opposed to “gamifying” trading and selling customer orders to firms that front-run the trades.)  Elsewhere, Britain’s Competition and Markets Authority said on Wednesday that they are investigating the ADBE $20 billion buyout of cloud-based design platform Figma.  A “phase-1 decision” on how to treat the deal is to be announced by June 30.  At the same time, on the side of the pond, the SEC adopted new rules around the transparency of share buyback plans.  Under the new rules, companies will have to disclose average daily share repurchases on a quarterly or semi-annual basis.  Meanwhile, the FTC accused META of misleading parents about protections for children and proposed tightening an agreement with the company that would ban META from profiting off of data from minors.  At day’s end, GOOGL won a jury trial that had accused them of patent infringement related to the retrieval of information from a database.  The jury found the patent invalid since the same technology had been disclosed by others preceding the patent-holders’ claim to that tech.

After the close, ALL, QCOM, AVT, CTSH, CTVA, ZG, APA, WMB, MELI, MRO, EQIX, REZI, OPAD, IR, QRVO, HST, VAC, PSA, CENT, CENTA, VSTO, FLT, CCRN, SEDG, BHE, QGEN, NUS, TTEC, ETSY, CW, ANSS, HUBS, HCC, FG, MMS, MKSI, PARR, QDEL, Z, and SPNT all reported beats on both the revenue and earnings lines.  Meanwhile, ATUS, ATO, GL, ALB, TWI, ULCC, EQH, CODI, and AMED all missed on revenue while beating on earnings.  On the other side, EADSY, MOS, FNF, SIGI, O, WES, CHRD, RUN, and PDCE all beat on revenue while missing on earnings.  Unfortunately, MET, YELL, CPE, GIL, WERN, WES, NVST, TTMI, UGI, and HOUS all missed on both the top and bottom lines.  It is worth noting that QCOM, QRVO, and TTMI lowered their forward guidance, while IR and HST raised their guidance.

Overnight, Asian markets leaned toward the green side on modest moves.  Shenzhen (-0.57%) was the only appreciable loser Thursday while Hong Kong (+1.27%), India (+0.92%), and Shanghai (+0.82%) led the rest of the region higher.  Meanwhile, in Europe, prices are nearly red across the board at midday.  Only Russia (+0.37%) is in the green while the CAC (-0.97%), DAX (-0.83%), and FTSE (-0.83%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.31% open, the SPY is implying a -0.36% open, and the QQQ implies a flat -0.06% open at this hour.  At the same time, 10-year bond yields continue to fall, now at 3.347% and Oil (WTI) is on the red side of flat at $68.47/barrel in early trading as recession fears weigh on markets.  

The major economic news events scheduled for Thursday include March Imports, March Exports, March Trade Balance, Weekly Initial Jobless Claims, Preliminary Q1 Nonfarm Productivity, and Preliminary Q1 Unit Labor Cost (all at 8:30 am), the Fed Balance Sheet and Bank Reserves with the Federal Reserve (both at 4:30 pm).  The major earnings reports scheduled for the day include GOLF, ATI, AEP, BUD, APG, APTV, ARNC, ARW, BALL, BHC, BCE, BDX, BERY, BWA, BV, BRKR, CAH, CG, COMM, COP, CEG, DLX, DNB, EQNR, ES, RACE, FOCS, GTES, GPRE, DINO, HII, H, IBP, ICE, IRM, ITT, JLL, K, KTB, MMP, MLM, MDU, MRNA, MODV, NFE, NJR, NVO, DNOW, NRG, OPCH, OGN, PZZA, PARA, PH, PTON, PENN, PCG, PNW, PLTK, PPL, PRMW, PRVA, PWR, RCM, REGN, RCL, SABR, SBH, SRE, SHEL, FOUR, SWK, STWD, TRGP, TFX, TU, BLD, UPBD, VNT, W, WLK, WRK, XYL, and ZTS before the open.  Then, after the close, ATSG, LNT, AIG, COLD, AMN, AAPL, TEAM, BGS, BECN, BIO, SQ, BCC, BKNG, CNQ, CVNA, ED, CTRA, CWK, DASH, DKNG, DBX, ERJ, EOG, EXPE, FND, FTNT, GDDY, GT, LYV, LYFT, MTZ, MATX, MTD, MCHP, MNST, MSI, NCR, ZEUS, OTEX, OPEN, OEC, CNXN, PBA, POST, KWR, RRX, RGA, RKT, SEM, SHOP, TDS, TXRH, TSE, TPC, and USM report.  

In economic news later this week, on Friday, April Average Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, and the April Unemployment Rate.

In terms of earnings reports later this week, on Friday, AES, AMC, AMCX, AEE, AXL, AMRX, BBU, BEPC, BEP, CLMT, CI, CNK, CNHI, D, ENB, EPAM, EVRG, FLR, FYBR, GLP, GTN, HUN, IEP, JCI, LSXMK, LSXMA, MGA, NMRK, OMI, PBF, PAA, PAGP, QRTEA, WBD and BAP report.

So far this morning, SHEL, CAH, EQNR, MT, BUD, DINO, NVO, MRNA, PCG, WRK, BDX, WCC, BCE, APTV, PWR, SRE, W, REGN, HII, ES, ARNC, APG, XYL, BLD, SBH, VNT, BV, TFX, GOLF, BRKR, MODV, DLX, DNOW, LAMR, FOUR, DDOG, GCI, GEL, PARAA, and RITM all reported beats on both the revenue and earnings lines.  At the same time, COP, SWK, WLK, ZTS, IRM, KTB, OGE, RCM, STWD, and BALL all missed on revenue while beating on earnings.  On the other side, NRG, CEG, AEP, BWA, CG, PENN, H, OPCH, PTON, and PRMW all beat on revenue while missing on earnings.  Unfortunately, PARA, BHC, and NFE missed on both the top and bottom lines.  It is worth noting that DDOG made the only guidance adjustment, raising its forecasts.

In miscellaneous news, Bloomberg reports that TD and FHN have agreed to terminate their $13 billion previously agreed merger.  JNJ priced its KVUE IPO at $22/share and increased the number of shares to be offered to almost 173 million (JNJ will still own 90% interest in KVUE after the IPO, which is expected to close Monday, May 8.  CNBC reported a rumor that AAPL will announce a new $90 billion share buyback program for the year (equal to the 2022 buyback amount).  In the previous decade, AAPL spent more than $572 billion on share buybacks.

With that background, it looks like the bears are now in control in the premarket, especially in the large-cap indices. All three major indices are trading below their T-lines again at this point. Over-extension from the T-lines is not really a problem, though DIA is getting a touch stretched to the downside, and T2122 is back up just outside the oversold territory. So, the pressure to rebound is not heavy yet. With the Fed having told traders what we expected and wanted to hear, we’ve now had the overnight to rethink whether the FOMC and Powell painted too rosy a picture, whether a banking crisis will tip us into a recession, or whether the Wednesday reaction went too far (or not far enough). Don’t be surprised if the Bulls pull a reversal, but don’t bet on it either. Follow trend, don’t predict.

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