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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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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On Thursday, after an extremely hot ADP report, markets gapped down across the board with SPY opening down 0.84%, DIA opening down 0.79%, and QQQ opening down 1.05%).  However, that was the end of clear direction for the day.  Essentially all three major index ETFs drifted sideways with the QQQ having a slight bullish lean, and the two large-cap index ETFs continuing modestly lower until about 11 am and then trending modestly bullish.  This action gave us gap-down (below the T-line or 8ema), indecisive candles in all three major index ETFs.  Both SPY and QQQ printed white-bodied, Hammer-type candles while the DIA had a black-bodied, Spinning Top-type candle.  The SPY got close, but only the QQQ was able to cross back above its T-line.

On the day, all 10 sectors were in the red with Energy (-2.11%) leading the way lower while Consumer Defensive (-0.75%) held up better than other sectors.  At the same time, SPY lost 0.78%, DIA lost 1.04%, and QQQ lost 0.76%.  The VXX jumped up 5.74% to close at 26.51 and T2122 dropped to the bottom end of the mid-range at 25.87.  10-year bond yields spiked up above four percent to 4.029% while Oil (WTI) ended flat at $71.85 per barrel.  So, Thursday saw a gap lower but then mostly indecision as the rest of the day was a drift sideways with either a slightly bullish or slightly bearish lean.  This all happened on average volume in the DIA and less-than-average volume in both the SPY and QQQ.

In major economic news Thursday, the June ADP Nonfarm Employment Change came in incredibly hot.  The reported +497k was well more than double the forecasted +228k and almost double the May +267k reading.  This was the news that spooked traders during the premarket.  A little later, May Imports were reported lower than expected at $316.10 billion (versus an April reading of $326.60 billion).  At the same time, May Exports also came in just a bit low at $247.10 billion (compared to an April value of $249.20 billion).  Together those two led to a May Trade Balance of -$69.00 billion, which was exactly as forecasted and an improvement over the April -$74.40 balance).  Meanwhile, Weekly Jobless Claims were a bit above anticipated at 248k (versus a forecast of 245k and higher than the prior week’s 236k).  Later, June Service PMI was stronger than predicted at 54.4 (compared to a 54.1 forecast but lower than the May reading of 54.9).  Simultaneously, the June S&P Global Composite PMI also was slightly better than expected at 53.2 (versus a forecast of 53.0 but also down from the April value of 54.3).  Then, the June ISM Non-Mfg. PMI came in much better than expected at 53.9 (compared to a forecast of 51.0 and an April reading of 50.3).  May JOLTs Job Openings were lower than had been forecasted at 9.824 million (versus a 9.935 million forecast and an April value of 10.320 million).  Afterward, the EIA Weekly Crude Oil Inventories showed a 1.508-million-barrel drawdown (compared to a forecast calling for a 0.983-million-barrel draw but far less than the previous week’s 9.603-million-barrel drawdown.  All-in-all, you could try to spin this some other way but the truth is that the economy remains strong, is weakening slowly to fight inflation, and, so far at least, it seems the Fed has threaded the needle and markets should take them at their word. They paused and there will be two more quarter-point hikes in the second half of the year.

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In stock news, FIS agreed to sell a majority stake in its Worldpay merchant credit card processing services business to private equity firm GTCR.  FIS will receive $11.7 billion and retain 45% ownership in Worldpay, which FIS had purchased for more than $30 billion).  Later, F announced its quarterly auto sales rose 10% versus Q2 of 2022, including a 26% increase in truck sales.  At the same time, STLA announced it has reached a preliminary 10-year deal to purchase rare earth minerals from NB, which plans to mine those minerals at its Nebraska mine.  Elsewhere, PFE made a $25 million investment into CRBU, taking a minority stake in the biotech.  In the afternoon, VLKAF (Volkswagen) announced it plans to launch autonomous vehicles for both ride-hailing and deliveries in Austin TX by 2026.  By mid-afternoon, Reuters reported that CRON (which is backed by MO) is exploring options, including the potential sale of the company.   The article mentions CURLF as a potential buyer of the Canadian pot producer.  However, the biggest news of the day was META’s launch of its Twitter competitor Instagram Threads.  The new app had 30 million user sign-ups for the service in the first 18 hours as it became the most-downloaded app in the Apple App Store.  (Twitter does not release data anymore but reported 229 million active users back in May of 2022.)  For its part, Twitter has threatened to sue META for “poaching of former employees” and theft of trade secrets and intellectual property.  After the close, ABBV announced a cut in its full-year forecast. Citing higher R&D costs.

In stock legal and regulatory news, a federal judge ruled that RIVN must face a suit claiming it defrauded IPO investors.  The suit claims RIVN concealed that it chose to underprice its electric vehicles initially, which led to price hikes that were very unpopular with consumers (that led to a 39% fall in stock price over just 10 days).  At the same time, both UBER and DASH (as well as other app-based delivery services) filed suit against New York City over its law requiring companies to pay delivery workers a minimum of $17.96 per hour.  Elsewhere, EU Antitrust Regulators warned that AMZN’s acquisition of IRBT may reduce competition and has opened a full-scale investigation into the deal.  The decision is due by November 15.  Meanwhile, the SEC announced they will vote next week on proposed changes to implement “swing pricing” to discourage hasty withdrawals from the money market and private asset funds during times of market stress.  They will also vote on whether to require more disclosure from private asset managers (to detect a buildup of risk).  Later, the CA state Air Resources Board along with truck and engine manufacturers such as CMI, GM, F, NAV, STLA, and VLVLY (Volvo) announced they had reached a deal.  The agreement gives the manufacturers more flexibility in meeting the state’s emission rules and will give the companies no less than four years lead time before imposing new restrictions.  After the close, the NRLB sued SBUX over the company’s treatment of workers which the company fired after union votes at Seattle-area stores.  (SBUX claimed they were due to store reorganizations but the employees who had supported a union applied at other stores and were not rehired.)  Also after the close, the FDA granted standard approval to BIIB’s new Alzheimer’s drug (which will mean wider insurance coverage for the treatment).

After the close, LEVI reported in line with forecasts on revenue and beat on earnings.  However, it is worth noting that the company lowered its forward guidance.

Overnight, Asian markets leaned to the red side again.  Australia (-1.69%), Japan (-1.17%), and South Korea (-1.16%) led the region lower.  Meanwhile, in Europe, the bourses are mostly green at midday.  The CAC (+0.57%), DAX (+0.55%), and lagging FTSE (-0.23%) are typical with 10 of the 15 exchanges in the green in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.02% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.16% open at this hour.  At the same time, 10-year bond yields are rising again to 4.056% and Oil (WTI) is up a third of a percent to $72.06 per barrel in early trading.

The major economic news events scheduled for Friday include June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate (all at 8:30 am).  There are no major earnings reports scheduled for the day.         

In miscellaneous news, the NY Fed released study data that indicates inflation may have slowed more than traditional headline numbers indicate.  The May “multivariate core trend” said inflation stood at 3.5% (far below the May 4.6% PCE Price Index for the same period).  This new report says there is actually a 68% chance inflation was really at 3% in May with the high-end of the readings being just below 4%.  Fed staffers speculated the cause of the difference between PCE Price Index and the multivariate core trend is that the latter puts more weight on housing where rent increases have been moderating faster than the PCE Index components.  Unfortunately, no word was given on what this might mean in terms of Fed action in July or beyond.  So, it must be assumed this will not impact have a major impact on Fed rate decisions.  In other Fed news, the central bank reported last night that banks again slightly decreased their borrowing from the Fed’s emergency lending programs.  Fed data released Thursday showed borrowing fell to $270.09 billion last week down from $274.58 billion the previous week. 

With that background, it looks like all three major index ETFs are waiting on June Payrolls data before placing any big bets this morning. As of now, we are looking at a slightly lower open and expectations are for a hot number from the June Jobs data. SPY and QQQ are both retesting the T-line (8ema) in the Premarket. At the same time, DIA is working on an inside day candle. It might be worth noting that all three of the major index ETFs are printing white-bodied candles and are currently at their highs of the early session. 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. We are likely to see premarket volatility around 8:30 am, but I have a suspicion this will be another light-volume mostly drifting day as we head into the weekend again. 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 (bottom of) mid-range. So, if one side did find a reason to run today, there is slack (still buyers and sellers available). Beware of volatility and remember that its Payday. Take at least some profits if you have them, move stops, hedge, and prepare for the weekend news cycle.

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 gapped down in all three major index ETFs (down 0.44% in the SPY, down 0.49% in the DIA, and down 0.43% in the QQQ).  However, at that point, the QQQ immediately recrossed the gap on its way to the highs of the day at about 10:40 am.  It then spent the rest of the day wandering around just above the Monday close.  SPY also recrossed the gap, but more slowly, reaching the prior close at 10:40 am and then spending the whole day in the top half of the gap (not far below the Monday close).  For its part, DIA also spent the whole day inside its gap never quite closing it or retouching the open level.  This action gave us gap-down, white-bodied candles with upper wicks in all three major index ETFs. 

On the day, nine of the 10 sectors were in the red with Utilities (+0.61%) leading the way higher while Basic Materials (-2.01%) by far (1.2% worse than any other) the biggest losing sector.  At the same time, SPY lost 0.15%, DIA lost 0.37%, and QQQ was dead flat -0.00%.  The VXX gained 1.33% to close at 25.07 and T2122 dropped back out of the overbought territory into the top end of the mid-range at 73.60.  10-year bond yields spiked up to 3.936% while Oil (WTI) jumped up 3.04% to $71.91 per barrel.  So, Wednesday was another day of consolidation where the bears could not follow through on the opening gap lower but the bulls could not break out to new highs either.  This all happened on well-below-average volume in the SPY and QQQ while DIA volume was not far below-average.

In major economic news Wednesday, May Factory Orders came in well below forecast at +0.3% (compared to a forecast of +0.8% but exactly in line with the April reading of +0.3%).  This was the cause of the big gap lower and I do not know why forecasts had called for the value to increase so dramatically…but it certainly did not.  Nonetheless, Factory Orders did increase, albeit at a slow pace.  However, the big economic news on the day was the FOMC June Meeting Minutes.  Those minutes caused momentary volatility, but in the end, were a nothing burger.  The notes revealed that almost all Fed members were in favor of a pause and also that in their economic projections that they believe (two) additional hikes in the federal funds rate will be needed during 2023. After the close, the API Weekly Crude Oil Stocks report showed a drawdown of 4.382-million-barrels (versus a prior week’s 2.408-million-barrel drawdown).  At the same time, New York Fed President Williams told a moderated panel discussion that the Fed was correct to pause in June, there was still more work to do, and the markets have heard the message that hikes will resume (and there will likely be two quarter-point hikes in the second half of 2023).  He also said that it was a small minority of Fed members who diverge from the more common public FOMC stance. 

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In stock news, shares of KNX (one of the largest US trucking companies) fell 3.29% on Wednesday after a volatile session.  The company warned that Q2 results will be lower than previously expected due to “persistently soft demand.”  However, in Auto news, TM announced their June car sales were up 14.9% from the same month a year ago.  At the same time, STLA unveiled a new “medium” vehicle size platform which will include 26 models across all its brands (Jeep, Chrysler, Ram, Peugeot, Alfa Romeo, Citroen, and Opel).  A bit later, GM announced that their Q2 auto sales had risen 19% from Q2 2022.  Elsewhere, UPS and the Teamster Union both accused the other of walking away from negotiations.  Time remains with the current contract set to expire July 31 but the Teamsters have already voted to authorize a strike if no deal is reached before that date.  (UPS says it is still confident a deal will be reached in time.)  Up in Canada, some Canadian advertisers have begun to pull their advertisements from META in response to the company’s removal of Canadian news from the platform (which itself was in response to a Canadian law passed saying companies must pay Canadian publishers for their content).  There was no word on ads being pulled from GOOGL (which followed META’s lead in solidarity) yet.  After the close, BAC followed suit with its big bank competitors raising its dividend by 9% after passing the Fed stress test last week.

In stock legal and regulatory news, on Wednesday afternoon the FTC ruled that six companies who make cannabis-ingredient products must cease packaging and marketing their foods that are too similar to well-known brands.  Specifically, the FTC ruled “Stoneoes” and “Double Stuff Stoneos” are too similar to Oreos.  Other familiar snacks that had been targeted by pot copycats were Doritos, Cheetos, Jolly Rancher, and Nerds candies.  Elsewhere, the US Interior Dept. approved the construction of DOGEF’s 30-gigawatt wind farm offshore near Atlantic City, NJ.  Then, late in the day, GM announced it could face compliance challenges under the US EPA’s proposed vehicle emissions rules (as well as other state and federal regulations).  It is worth noting that the EPA proposals would not even start to take effect until 2030 and won’t be fully in place until 2032.  At the same time, AMZN, AAPL, GOOGL, META, MSFT, and BKNG said Wednesday that they will fall into the EU’s new criteria making them a “Gatekeeper” and as a result will be forced to comply with tougher rules.  These rules include making messaging platforms interoperable and letting users decide what apps are pre-installed on devices.  Meanwhile, JBLU announced after the close that it will not appeal the US judge’s decision that requires an end to its alliance (defacto merger) with AAL.

In mortgage news, the demand for mortgages dropped last week as interest rates rose.  The average cost of a 30-year, fixed-rate, conforming mortgage rose dramatically from 6.75% to 6.85% (and closing points rose to 0.65 from 0.64) on the week.  This included a brief stay over 7%.  As a result, overall mortgage applications fell by 4.4%.  This was made up of a 5% drop in new-purchase loan requests and a 4% decrease in refinance loan applications.  Interestingly, the average loan size requested fell to the lowest level since January at $423,500.  (The latter fact may say something about home prices and the housing market in general if it becomes a trend.)

Overnight, the nearly unanimous Fed feeling that rates will indeed need to rise twice more in 2023 apparently caught global markets off guard.  Asian markets were all well into the red with the lone exception of India (+0.51%).  Hong Kong (-3.02%), Taiwan (-1.73%), and Japan (-1.70%) led the region lower as Treasury Sec. Yellen arrived in Beijing to work on bilateral policy and trade issues between the two largest economies.  Meanwhile, in Europe, we see the same picture taking shape at midday.  Only Russia (+0.70%) is in the green while the CAC (-1.83%), DAX (-1.16%), and FTSE (-1.38%) lead the region lower.  In the US, as of 7:30 am, Futures are pointing toward a gap down to start the day.  The DIA implies a -0.39% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.38% open at this hour.  At the same time, 10-year bond yields are rising again to 3.975% and Oil (WTI) is positive by four-tenths of a percent at $72.10 per barrel in early trading.

The major economic news events scheduled for Thursday include ADP Nonfarm Employment Change (8:15 am), May Imports/Exports, May Trade Balance, and Weekly Initial Jobless Claims (all at 8:30 am), June Services PMI and June S&P Global Composite PMI (both at 9:45 am), June ISM Non-Mfg. PMI and May JOLTs Job Openings (both at 10 am), and EIA Crude Oil Inventories (11 am).  There are no major earnings reports scheduled for before the open. However, after the close, LEVI reports.        

In economic news later this week, on Friday, June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate are reported.

In terms of earnings reports, there are no major earnings reports scheduled for Friday.

In miscellaneous news, Reuters reported Wednesday that Cyber Insurance premiums dropped 10% in June compared to June 2022.  This dramatically reverses the sharp increase in prior months and comes despite the major global MOVEit hack and ransom attacks.  Elsewhere, the China Daily newspaper quoted a former Vice Commerce Minister (who now heads a state-owned thinktank) as saying that the Chinese rare earth export restrictions were a warning shot and are “just the start” ahead of Treasury Sec. Yellen’s visit, which starts today.  Meanwhile, META launched its competitor for Twitter, called Instagram Threads on Wednesday night.  In a geopolitical tidbit, the President of Belarus Lukashenko told the press that Wagner Group leader Prigozhin had left his country and, interestingly, returned to his home base of St. Petersburg Russia. Finally, after the Fed Minutes, the CME FedWatch Tools shows there is an 88.7% probability of a quarter-point rate hike on July 26.

With that background, it looks like all three major index ETFs are looking to open lower again today. However, only the DIA is back to a retest of its T-line (8ema) so far this morning and all three of the major index ETFs are giving us very small candles. So, either the market is sleeping in today, waiting on the morning data dump, or just unsure of direction at this point. So, the pullback in an uptrend continues, at least as of this point. Again, on a holiday-shortened week at the start of a new quarter, do not expect heavy volume as many traders have taken the week off. We could see reallocation or new money coming into the market. However, I would be surprised if the action was heavy. As far as extension goes, none of the three major index ETFs is too far from their T-line and the T2122 indicator has dropped back outside of its overbought territory. So, there is room to run in either direction if either the bulls or bears can gain momentum. Beware of volatility around the ADP and Weekly Jobless Claims (as well as maybe the JOLTs) reports as traders try to read through to tomorrow’s June Payrolls data.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Markets gapped strongly higher on Friday (opening up 0.75% in the SPY, up 0.61% in the DIA, and up 1.01% in the QQQ).  From that point, all three major index ETFs gave us a slow, modest rally right up until 3:55 pm when we saw profit-taking the last 5 minutes across the board.  This action gave us gap-up, white-bodied candles in all the major index ETFs.  The DIA is candle was a Spinning Top, while the SPY and QQQ candle bodies were larger.  SPY broke out of the mid-June candle bodies while DIA and QQQ have not quite gotten to a retest of those prior highs. 

On the day, Friday, all 10 sectors were in the green with Technology (+1.25%) leading the way higher while Communications Services (+0.44%) lagged behind the other sectors.  At the same time, SPY gained 1.18%, DIA gained 0.79%, and QQQ gained 1.54%.  The VXX fell 1.46% to close at 25.00 and T2122 climbed even further into the overbought territory at 97.03.  10-year bond yields remained flat at 3.841% while Oil (WTI) climbed slightly to $70.64 per barrel.  This all happened on just average volume in the DIA and greater-than-average volume in both QQQ and SPY.

The major economic news on Friday started with the Fed’s preferred inflation measure showing a significant reduction in inflation.  The May PCE Price Index came in at 3.8% year-on-year (compared to a forecast of 4.6% and the April reading of 4.3%).  The month-on-month version of that May PCE Price Index showed a 0.1% increase which was well below the +0.5% expected and even well below the April +0.4% value.  The May Core PCE Price Index also came in below expectation but not by nearly as much at 4.6% (compared to a 4.7% forecast and a 4.7% April value).  So, overall, inflation is coming down more than anticipated and that was what the Bulls latched onto…gapping stocks higher.  At the same time, May Personal Spending also came in well below what was anticipated at +0.1% month-on-month (versus the forecast calling for +0.2% and the April reading of +0.6%).  Later, Chicago PMI was lower than expected at 41.5 (versus a forecast of 44.0 and better than the May reading of 40.4).  Finally, the Michigan Consumer Sentiment Survey reported a better-than-expected feeling of 61.5 (above the forecasted 61.3 and well above the May value of 55.4).

On Monday, the DIA gapped down 0.22%, the QQQ gapped up 0.16%, and SPY opened down 0.06%.  From there, the large-cap index ETFs put in a slow, modest but steady rally only broken by DIA profit-taking the last 10 minutes of the shortened day.  At the same time, QQQ was more like a roller coaster but also ended modestly higher.  This action gave us a gap-up white-bodied Doji in the QQQ, along with white-bodied candles in the SPY and DIA.  On the day, nine of the 10 sectors were in the green with Consumer Cyclical (+0.91%) leading and only Healthcare (-0.96%) in the red.  The SPY gained 0.12%, DIA gained 0.06%, and QQQ gained 0.24%. Meanwhile, the VXX fell 1% to 24.74 and T2122 dropped slightly but remains deep in overbought territory at 95.83.  This all happened on very low volume even for a 3.5-hour market day.

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In major economic news Monday, Jun Mfg. PMI came in exactly as expected at 46.3 (down from the May value of 48.4).  Later, ISM Manufacturing PMI came in a bit low at 46.0 (compared to a forecast of 47.2 and a May reading of 46.9).  However, June Mfg. Price Index also came in lower than expected at 41.8 (versus a forecast of 44.0 and a May reading of 44.2).  So, overall June Manufacturing was reported in line to slightly below expectations. However, probably the biggest Monday news was that Saudi Arabia announced they will extend their voluntary oil production cuts for at least another month, through August, with the potential to continue on indefinitely. Russia was quick to follow suit. The effect of these cut extensions was offset by reduced US Manufacturing activity and the holiday-shortened day when many traders were not around at all. However, it is likely to be reflected Wednesday.

In stock news, on Friday, F announced they have signed an initial agreement to sell its Saarlouis Germany plant to a group including Chinese electric vehicle company BYDDY.  Elsewhere, TSP stock plummeted when the self-driving startup said Friday, they are considering selling the company’s US operations in order to focus on the Asia-Pacific geography.  At the same time, the CEO of SHEL’s renewables business left the company Friday just weeks after the SHEL CEO announced the company will focus on oil and gas (the more profitable units).  Meanwhile, DIS’s ESPN business unit laid off 20 on-air personalities mid-day Friday.  At the final bell Friday, AAPL closed with more than a $3 trillion market cap for the first time ever. After the close, JPM, WFC, GS, MS, and C all announced they have raised the Q3 dividends after sailing through the Fed stress test.  On Saturday, UAL awarded 30,000 frequent flier points to all passengers that suffered delays due to plane shortages.  UAL CEO Kirby also claimed that the airline would need to reduce flight schedules due to the planes that could not fly (since they do not comply with FAA 5G interference protections).  Later Saturday. TLSA announced it had beaten analyst expectations by delivering 466,140 vehicles and producing 479,700 during Q2.  This was a 10% increase compared to Q1 and 83% higher than Q2 of 2022. 

In stock legal and regulatory news, the FTS amended its complaint against WMT on Friday, alleging the giant allowed scam artists to use WMT money transfers to defraud consumers.  Elsewhere, the European Commission has demanded that German ga importer UNPRF divest its Dutch business before it will receive regulatory approval of Germany’s bailout of the company.  On this side of the pond, the US Federal Housing Finance Agency said it was considering limiting the ability of the biggest banks to use Federal Home Loan Banks as a financial backstop.  Meanwhile, BRKB-owned BNSF won an appeal of an earlier $228 million award in a case that found the railroad had unlawfully collected the fingerprints of truck drivers.  The Appeals Court ruled that the company had violated the law but also that the company was entitled to a jury-decided award to the plaintiffs (as opposed to the $5,000 per infraction that was assigned by the lower court).  Later, a Federal Judge ruled Friday afternoon that PPC, SAFM, TSN and several smaller companies must face antitrust litigation which accuses them of price fixing to inflate chicken prices.  On Saturday, Bloomberg reported that the FTC is going to bring an antitrust suit against AMZN for its marketplace and related to that platform giving preference to AMZN products.

Overnight, Asian markets leaned heavily toward the downside with only two of the 12 exchanges managing modest green numbers.  Meanwhile, Hong Kong (-1.57%), Shenzhen (-0.91%), and Shanghai (-0.69%) led the rest of the region lower. In Europe, we see the same picture taking shape with only Portugal (+0.26%) in the green at midday.  The CAC (-0.62%), DAX (-0.51%), and FTSE (-0.54%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward the same type of start to the day.  The DIA implies a -0.46% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.55% open at this hour.  At the same time, 10-year bond yields are up to 3.859% and Oil (WTI) is up 2% to $71.19 in early trading.

The major economic news events scheduled for Wednesday include May Factory Orders (10 am), FOMC June Meeting Minutes (2 pm), API Weekly Crude Stocks Report (4:30 pm) and Fed speaker (Williams at 4 pm).  There are no major earnings reports scheduled for Wednesday either before the open or after the close.        

In economic news later this week, on Thursday we get ADP Nonfarm Employment Change, May Imports/Exports, May Trade Balance, Weekly Initial Jobless Claims, June Services PMI, June S&P Global Composite PMI, June ISM Non-Mfg. PMI, May JOLTs Job Openings, and EIA Crude Oil Inventories.  Finally, on Friday, June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate are reported.

In terms of earnings reports, on Thursday LEVI reports.  Then on Friday, again there are no major earnings reports scheduled.

In miscellaneous news, on Friday, Russian Foreign Minister Lavrov announced the expected, saying “I don’t see what arguments there can be by those who would like to continue the Black Sea initiative.”  However, Lavrov was quick to add, “If the Black Sea Initiative ceases to operate, we will provide grain deliveries of a comparable or larger size to the poorest countries at our own expense, free of charge.” Elsewhere, the WHO (World Health Organization) is widely reported to be very near labeling one of the most widely-used artificial sweeteners (aspartame) to be potentially cancer-causing.  More than 6,000 consumer food products contain aspartame. The most widely cited of these are Diet Coke (KO) and Diet Pepsi (PEP).  On Monday, China imposed restrictions on the export of two metals (germanium and gallium) that are critical to the production of semiconductors. (China is the only major source of gallium, accounting for 94% of global production and also the world’s largest producer of germanium.)  This tit-for-tat move related to semiconductors comes a couple of days prior to the visit of Treasury Sec. Yellen to China for talks.  Finally, Japan announced Monday that they intend to go ahead with plans to dump 1 million tons of radioactive waste water from the Fukushima Daiichi Nuclear Power Plant cleanup (that has now been diluted and filtered to remove “most” radiation) into the ocean. The US has said they are accepting of the move, but all the regional nations (China, both Koreas, Indonesia, Malaysia, and the Philippines are objecting strenuously.

With that background, it looks like all three major index ETFs are looking to open lower today. The SPY and especially the DIA are printing black candle bodies in premarket being near their lows of the early session. QQQ is much more indecisive so far this morning. All three remain above their T-line (8ema) meaning this is at most a pullback in the uptrend, at least as of this point. This is the start of a new quarter. So, do not be surprised if we see funds that were late to the party continue reallocations or see fun inflows as FOMO grips the individual traders who compared their accounts to the major indices over the holiday. Also, remember the old Trader’s Almanac rule of thumb that markets are sad (bearish) when they have to come back to work after extra time off. As far as extension goes, none of the three major index ETFs is too far from their T-line. However, the T2122 indicator remains well up into its overbought territory. So, while there is some room to move higher (and keep in mind that markets can remain extended longer than we can remain solvent betting on mean reversion), the bears do have the benefit of more slack to run. Finally, even though many Fed speakers (including Chair Powell) have spoken multiple times since the June FOMC Meeting, the release of minutes this afternoon may cause some volatility. Just be aware.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, markets opened just on the red side of flat with the SPY gapping down 0.11%, DIA opening 0.05% lower, and QQQ gapping down 0.13%.  However, at that point, there was a modest divergence.  SPY immediately recrossed its gap, ground sideways in a tight range until 11 am, rallied until 1 pm, sold off back to the prior close at 2 pm, and then drifted back to the highs of the day at the close.  At the same time, DIA immediately recrossed its gap, rallied until 12:30 pm, and then drifted just a bit lower in a tight range the rest of the day.  However, QQQ continued lower until 10:50 am, rallied hard back to the prior close by 11:30 pm, and slowly drifted lower the rest of the day.  This action gave us large white-body candles in the large-cap index ETFs and a black-bodied Doji Harami in the QQQ.  The DIA (and maybe the SPY is you squint) could also be seen as a Doji Continuation Signal (Sandwich). 

On the day, all 10 sectors were in the green with Financial Services (+1.34%) leading the way higher (after banks aced the stress test) while Technology (+0.07%) lagged behind the other sectors.  At the same time, SPY gained 0.39%, DIA lost 0.75%, and QQQ lost 0.20%.  The VXX gained 2.17% to close at 25.37 and T2122 climbed back higher into the overbought territory at 94.32.  10-year bond yields fell to 3.842% while Oil (WTI) gained 0.37% to close at $69.82 per barrel.  So, Thursday saw divergence with QQQ (which has led all year) showing weakness and indecision at the same time the large-cap ETFs continued to move higher.  The question is whether this might be a result of quarter-end profit-taking in the leading tech names, simply a result of the big banks acing the Fed stress tests, or the portent of a trend change.  This happened on just less-than-average volume in the DIA and less-than-average volume in both QQQ and SPY.

The major economic news on Thursday, overnight Fed Chair Powell said the US bank sector was “strong and liquidity is very, very high.”  However, he also said, “we are very reluctant to say if the sector’s turmoil was over … (because) our job is to worry about things.”  He went on to maintain a more hawkish stance toward Fed policy.  Powell said, “The committee clearly believes that there’s more work to do, that there are more rate hikes that are likely to be appropriate.”  Later (once the sun came up in the US), Q1 GDP was revised much higher to an unexpectedly strong +2.0% (compared to a preliminary reading of 1.3% and a forecast of +1.4% but still weaker than the Q4 +2.6%).  At the same time, the Q1 GDP Price Index came in lower than expected at 4.1% (versus the forecast of 4.2% but still above the Q4 reading of 3.9%).  So, the economy remained strong and inflation was not rising quite as fast as expected.  The Weekly Initial Jobless Claims came in well below what was anticipated at 239k (compared to a forecast of 266k and the previous week’s value of 265k).  So, the labor market remains very strong.  Later, May Pending Home Sales fell more than projected at -2.7% (versus a forecast of -0.5% and the April value of -0.4%).  Finally, after the close, the Fed Balance Sheet showed to have fallen $21 billion on the week from $8.262 trillion to $8.341 trillion as the Fed continues to reduce its asset holdings.  Overall, the bears could only spin this news negatively in the sense that it means the Fed has more work to do…and that may mean a slow-down later.  On the other hand, the bulls (and realists in my mind) would say that so far, we have seen no recession, the economy remains resilient, and the labor market remains strong. Yet inflation has fallen, even if at a slower pace.  Elsewhere, despite Powell’s comments overnight, later Atlanta Fed President Bostic reiterated his belief that the path of inflation will allow the central bank to not raise rates again this year.  Bostic said, “We have reached a level of the nominal federal funds rate that should be sufficient to move inflation toward the 2% target over an acceptable timeframe.”

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In stock news, CGC completed the sale of its California facility on Thursday for $61.10 million.  This is the company’s fifth such deal since April 1 and is part of the company’s attempt to improve its balance sheet.  Elsewhere, Reuters reported that SNAP has hit 4 million paid subscribers ($3.99/mo.) a milestone since the launching its member service one year ago.  At the same time, Reuters also reported that VLKAF (Volkswagen) is in talks to adopt the TSLA standard for their electric vehicle plugs.  In other auto news, TM announced that their May sales jumped 10% from the same month in 2022.  This was mostly driven by hybrid sales which were up 26%.  Later, SPCE completed its first commercial space flight, which topped out at just under 53 miles altitude.  (SPCE says it has a backlog of 800 customers willing to pay between $250k and $450k to make the flight.)  Meanwhile, OSTK announced that after buying the intellectual property of bankrupt BBBY, it will rebrand itself as Bed Bath and Beyond despite not bidding on the defunct retailer’s store locations.  Late in the day, CVX announced it is offering to sell several oil and gas properties located in NM and TX.  The move comes after the oil giant agreed to buy shale firm PDCE last month (which operates in the same region) and continues the CVX trend of divesting properties in West TX and NM).

In stock legal and regulatory news, the UK Competition Appeal Tribunal rejected the UK Competition and Markets Authority (regulator) bid to delay an appeal of the MSFT purchase of ATVI.  As a result, the appeal will go ahead as originally scheduled at the end of July.  Elsewhere, AAPL will defend itself against EU Antitrust charges based on music streaming as originally alleged by SPOT. The oral hearings will take place today.  At the same time, a US court approved the CNNWQ (Cineworld) to restructure its debt which should allow the company to emerge from bankruptcy in July.  Meanwhile, the US Supreme Court threw out a $96 million award that had been given to MEI in its case against its former European distributor.  Out in San Francisco, arguments were completed Thursday in the FTC bid for a temporary restraining order against MSFT proceeding with its acquisition of ATVI (while FTC litigation continues).  No timeline has been given for a decision.  In related news, the government of Canada weighed in on the deal agreeing with the FTC and UK Competition Authority.  Ottawa sent a letter to the court hearing the FTC request for a restraining order stating they believe the deal will lessen competition and should be halted until the FTC can prove its case.  In military news, the US State Dept. announced the approval of the sale of 24 F-35 fighter jets to the Czech Republic for $5.62 billion.  The contractors for these planes are LMT, RTN, and BA.  Late in the day, the FDA approved BMRN’s gene therapy for hemophilia A.  The company said it expects about 2,500 patients in the US to be eligible to receive the treatment based on the approval.  (However, it is priced at $2.9 million per patient.)

After the close, NKE beat on revenue while missing by a penny on earnings.  It is worth noting that NKE also lowered its forward guidance.

Overnight, Asian markets were mixed again but leaned to the bullish side.  Malaysia (-0.84%) was the only significant loss with four other exchanges being just on the red side of flat.  On the bullish side, Thailand (+1.59%), India (+1.14%), and Shenzhen (+1.02%) were the leaders among the seven gainers with only Australia (+0.12%) moving less than half of a percent.  Meanwhile, in Europe, with the exception of Russia (-0.31%) we see nothing but green at midday.  The CAC (+1.15%), DAX (+1.17%), and FTSE (+0.70%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a strong start to the day at this point.  The DIA implies a +0.31% open, the SPY is implying a +0.39% open, and the QQQ implies a +0.50% open at this hour.  At the same time, 10-year bond yields are surging to 3.876% and Oil (WTI) is just on the red side of flat at $69.81 per barrel in early trading.

The major economic news events scheduled for Friday are limited to May PCE Price Index and May Personal Spending (both at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am).  The only major earnings report scheduled for Friday is STZ before the open.  There are no reports scheduled for after the close.        

Do not forget that US markets are only open for a half-day on Monday and are closed Tuesday for the Independence Day holiday.

In miscellaneous news, the Fed said Thursday that 57 firms (41 banks and 15 service providers) have been certified to use the “FedNow” instant payments system when it launches in late July.  This includes JPM, BK, USB, and WFC among major banks.  Elsewhere, a former PFE employee and his friend were charged with insider trading related to PFE stock and the COVID-19 vaccine.  On the inflation front, preliminary data showed that Eurozone inflation fell more than expected in June to 5.5%.  This news comes just three days after ECB President Lagarde said inflation was too high and is set to remain there for too long as she announced an unexpected rate hike.  In other European news, the Netherlands formally joined President Biden’s export restrictions of semiconductor chipmaking equipment to China.  This primarily affects ASML which is the leader in chip lithography equipment.  (ASML announced Friday that it does not expect the restrictions to have a material impact on its 2023 financial projections.) Finally, union workers at the SPR Witchita KS plant (the primary fuselage supplier to BA) have approved a new deal. This ends the two-week strike with production to resume on July 5.

So far this morning, RAD and GBX reported beats to both the revenue and earnings lines.  Meanwhile, MKC and AYI both reported misses on revenue while beating on earnings.  On the other side, MSM beat on revenue while missing earnings by a penny.  It is worth noting that RAD and GBX both raised forward guidance.  (There were no guidance reductions at least as of yet.)  RAD (+51%) and GBX (+70%) were the only major surprises reported and significantly neither came against reduced forecasts.

With that background, it looks like all three major index ETFs are looking to move higher to start the last day of the quarter. All three of their premarket candles have large, white bodies and tiny wicks at this point. However, it is early and PCE data lays ahead before the open. Remember that this is the end of the quarter, which may mean window dressing and moves like AAPL pushing for a $3 trillion valuation (which it is very near anyway). In addition, with a half-day market on Monday and the holiday on Tuesday, many money managers plan to take Monday off. Again, this gives them extra temptation to sneak out early today to stretch the off-time into a mini vacation. The point is that volumes may die in the afternoon or even all day long with prices drifting higher into the weekend. (Remember the Trader’s Almanac rule of thumb that markets are happy (bullish) the day before long weekends and sad (bearish) when they have to come back to work after extra time off. As far as extension goes, none of the three major index ETFs is too far from their T-line. However, the T2122 indicator has climbed back up well into its overbought territory. So, while there is some room to move higher (and bear in mind that markets can remain extended longer than we can remain solvent betting on mean reversion), the bears do have the benefit of more slack to run. Remember to pay yourself on payday…take the profits you can and prep your account for the weekend (and perhaps 4-day) news cycle.

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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