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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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 started the day slightly lower on Wednesday with the SPY gapping down 0.25%, DIA down 0.11%, and QQQ down 0.48%.  All three major index ETFs spent the first 45 minutes grinding sideways in a tight range. At that point, the SPY started a rally that recrossed the gap and reached the high of the day at 12:20 pm.  From there, a sharp selloff crossed the gap once again by 1 pm, and then price wobbled sideways until a rally in the last 5 minutes took SPY out above the prior close.  Meanwhile, QQQ was more volatile, rallying sharply from 10:15 to 10:55 am then selling off sharply until 11:30 am, rallying up to the highs of the day at 12:20 pm, selling very hard back down into the gap by 1 pm, and then grinding sideways the rest of the afternoon.  However, DIA had a mid-day bump but ground sideways along the lows almost all day.  This action gave us a white-bodied Spinning top (larger body) candle in the SPY, a white candle with a larger upper wick in the QQQ, and a black-bodied Dragonfly Doji in the DIA.  Both SPY and QQQ held above their T-line (8ema) after a retest while DIA failed to even retest its T-line after gapping down below it.

On the day, five of the 10 sectors were in the red with Utilities (-1.34%%) way out front leading the market lower while Energy (+0.68%) held up better than other sectors.  At the same time, SPY gained 0.05%, DIA lost 0.18%, and QQQ gained 0.20%.  The VXX dropped 3.65% to close at 24.83 and T2122 dropped back to just inside the edge of the overbought territory at 80.10.  10-year bond yields fell to 3.716% while Oil (WTI) gained 2.13% to close at $69.14 per barrel.  So, overall, the day was much ado about nothing.  After a gap lower, the leading index ETFs recovered quickly rethought the rebound, and then drifted.  Meanwhile, the laggard mega-cap DIA spent the day on the South side of the open without really participating in the rebound.  This happened on less-than-average volume in all three major index ETFs but the QQQ was much closer to an average volume day than the other indices.

The major economic news on Wednesday included Preliminary May Trade Goods Balance, which came in a bit better than expected at -$91.13 billion (compared to a forecast of -$92.90 billion and much better than the April reading of -$97.10 billion).  At the same time, Preliminary May Retail Inventories were reported as dead flat at +0.0% (versus the April reading of -0.3%). Later the EIA Weekly Crude Oil Inventories showed a much bigger drawdown than was expected at -9.603-million-barrels (compared to a forecast calling for -1.757-million-barrels and well more than the prior week’s -3.831-million-barrels).  In Fed-speak, FOMC Chair Powell spoke at a Conf. in Portugal on Wednesday saying that “more restriction is coming.”  He went on to say that he would not take “moving at consecutive meetings off the table.”  Later, during questions he said he did not expect a recession, clarifying that “There’s a significant possibility that there will be a downturn … it’s not the most likely case, but it’s certainly possible.”  An interesting aside is that Powell told the conference that the US would not hit the Fed’s 2% inflation target until 2025.  Then, after the close, the Fed announced that all 23 major US banks passed its annual stress test.   Despite $541 billion in projected loan losses across the group, the Fed projects that even during a severe global recession (including a 40% decline in real estate prices) the banks would be able to continue to provide credit and maintain their capital requirements.  Under that severe scenario, the largest banks saw their capital levels drop to 10.1% while large regional banks’ capital levels fell to the 6%-8% level.

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In stock news, in what seemed an odd announcement STLA said it had partnered with an ad agency specifically to reach out to black customers.  (I see nothing odd about targeting any demographic.  However, a press release of doing so just seems weird.)  Later in the day, STLA placed a MI plant on “critical status” which the union contract allows the company to require mandatory overtime.  This move is intended to allow the company to stockpile Jeep/Dodge inventory ahead of a potential strike in September.  Elsewhere, for the second time this week, TRI announced they have reached a deal to buy a company, this time acquiring Imagen (a digital content management company) for an undisclosed price.  At the end of the day, ORCL announced it has modified its database software (primary product) to allow it to run on processors made by startup chip company Ampere (founded by former INTC executives).  This move is intended to allow ORCL to boost cloud computing performance in order to better compete with AMZN and MSFT in that market.  After the close, UPS announced it was working with law enforcement after some of their Canadian shipper customers were hit with cyber phishing attacks disguised as text messages from UPS.  Also after the close, as part of the stress test announcements, Fed Vice Chair for Bank Supervision Barr said banks are expected to announce revisions to their dividend and buyback plans after the close on Friday.

In stock legal and regulatory news, ATVI announced Wednesday that it is adding to its staff in the EU (Spain), following through on one of the promises made to gain EU approval of the MSFT acquisition of the company.  This came after ATVI said it would be reassessing its growth plans in the UK after that country blocked the acquisition and as the CEOs of the two companies testified in the US as part of the FTC lawsuit to block the deal.  Speaking of which, the CEOs of MSFT and ATVI both told a San Francisco Federal court that ever making ATVI games exclusive to MSFT hardware would not make any strategic sense.  ATVI CEO Kotick told the court that if MSFT did ever do that, they would have a revolt on their hands from the 100 million monthly active users.  In other Tech news, NVDA tried to head off rumored additional restrictions on chip sales to China.  The CFO of NVDA said Wednesday that any additional export restriction on sales of chips to China would cause a “permanent loss of opportunities for the US chip industry” (mean NVDA).  Elsewhere, a US district judge dismissed a case against AMZN which had alleged the e-commerce giant had sold “suicide kits” to teenagers.  At the same time, JOBY received FAA approval for flight testing of the company’s “electric air taxi” vehicles.  Meanwhile, SOLVY reached a $393 million settlement with the NJ Dept. of Environmental Protection related to drinking water pollution with “forever chemicals” from the company’s NJ plant.

After the close, MU, WOR, and BB beat on both the revenue and earnings lines.  At the same time, CNXC beat on revenue while missing on earnings.  However, FUL missed on both the top and bottom lines.  It should be noted that MU lowered its forward guidance.  The only major surprise was a 40% upside earnings shock from WOR.  Finally, it is worth noting that MU was upbeat about the current quarter and said that the recent chip glut is beginning to ease.  This came after a crash in computer and phone sales had caused the company’s (and the industry’s) inventories to build.

Overnight, Asian markets were mixed.  Hong Kong (-1.24%) was by far the biggest loser followed by South Korea (-0.55%).  The gainers were led by Thailand (+0.86%), India (+0.82%), and New Zealand (+0.64%).  Meanwhile, in Europe, 13 of the 15 bourses are in the green at midday.  The CAC (+0.81%), DAX (+0.22%), and FTSE (-0.24%) are typical of the performance spread in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a higher start for the day.  The DIA implies a +0.30% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bond yields are back up to 3.745% and Oil (WTI) is up almost six-tenths of a percent to $69.95 per barrel in early trading.

The major economic news events scheduled for Thursday include Q1 GDP, Q1 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am), and May Pending Home Sales (10 am).  We also hear from two Fed speakers, Chair Powell (2:30 am) and Bostic at 3 pm.  The major earnings reports scheduled for Thursday include AYI, GBX, MKC, MSM, PAYX, and RAD before the open.  Then, after the close, NKE reports.        

In economic news later this week, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Friday, STZ reports.

In miscellaneous news, SPCE is set to launch its first commercial space flight via a rocket released from a jet on Thursday.  The flight will take three passengers 50 miles above New Mexico.  Elsewhere, AAPL printed another record high close Wednesday.  This brought the company enticingly near a $3 trillion market cap at $2.98 trillion.  (The company briefly reached the $3 trillion mark intraday on January 3, 2022, but has never closed above that level.)  So, watch that as something traders push for and as a news event today. Finally, Fed Chair Powell again warned that tighter monetary policy was on the way in an overnight (2:30 am) presentation in Europe.  For what it is worth, the CME Fed Watch Tool now shows an 82% probability of a quarter-point hike in July as of now.

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 again, at least early. The DIA is crossing back above its T-line in premarket action and all three are printing strong white-body candles so far this morning. However, it is early and the GDP data coming at 8:30 am could throw a wrench into the works. Remember that we have only two days left until the month and quarter end. So, there could be some window dressing going on. In addition, with the holiday on Tuesday, many money managers plan to take Monday off…which provided extra temptation to sneak out early to stretch the off-time into a real rest. My point is that volumes may die even more and prices may drift into the weekend. In terms of extension, none of the three major index ETFs is far from their T-line and the T2122 indicator has dropped back to just the lower edge of its overbought territory. Therefore, we have room to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday was a Bullish day for markets as the SPY gapped up 0.21%, QQQ gapped up 0.43%, and DIA opened dead flat.  From there, all three major index ETFs gave a slow, steady rally until 2:30 pm.  The last 90 minutes of the day saw the SPY, DIA, and QQQ grind sideways in a tight range and then take profits in the last 10 minutes.  This action gave us large white candles with tiny wicks that crossed back above the T-line (8ema) in all three.  (DIA barely crossed above.)  In the process, you could see the price as having broken a (tight) downtrend line in the SPY, DIA, and QQQ.  This happened on less-than-average volume in the SPY and QQQ and significantly less-than-average volume in the DIA.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (+2.17%) and Technology (+1.98%) leading the way higher while Healthcare (-0.18%) was the laggard on the day. Meanwhile, SPY gained 1.10%, DIA gained 0.60%, and QQQ gained 1.72%.  The VXX lost 2.50% to close at 25.77 and T2122 jumped back up into the overbought territory at 87.88.  10-year bond yields climbed to 3.766% while Oil (WTI) dropped 2.28% to close at $67.80 per barrel.  So, the bulls were in charge all day on Tuesday with only some very late profit-taking keeping us from closing on the highs.  As has been the case all year, once again, DIA was the laggard. 

The only major economic news on Tuesday, Building Permits came in a bit above the expected value at 1.496 million (compared to 1.491 million forecast and well above the previous value of 1.417 million).  That was a month-on-month increase of 5.6% (versus the anticipated +5.2% but far above the prior value of -1.4%).  Later, May Durable Goods Orders were better than anticipated at +1.7% (compared to a forecast of -1.0% and even increased from the April reading of +1.2%).  Then the Conference Board Consumer Confidence indicator came in well above expectation at 109.7 (versus a forecast of 104.0 and well above the May value of 102.5).  At the same time, May New Home Sales were reported well above what was predicted at 763k (compared to a forecasted 675k and the April reading of 680k).  That was a 12.2% increase versus April’s +3.5% month-on-month growth.  Finally, after the close, the API Weekly Crude Oil Stocks report showed a larger-than-expected drawdown of 2.408-million-barrels (compared to an expected draw of 1.467-million-barrels and well more than the prior week’s 1.246-million-barrel drawdown). 

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In stock news, BAC opened new branches in nine markets (across four states) on Tuesday, bringing its coverage to 3,800 branches spread over 39 states.  (Among the major banks, this is second only to JPM which has branches in 49 states.)  Elsewhere, STLA announced they are launching their own electric vehicle charging business unit to provide customers access to “partner’s charging networks.”  At the same time, CIR announced it has accepted a $1.7 billion offer ($51/share plus debt) from KKR to take the company private.  Meanwhile, TRI announced it has agreed to a $650 million all-cash deal to acquire legal startup Casetext (which has an AI assistant for use by legal professionals).  Then, by mid-afternoon, Bloomberg was reporting that UBS plans to cut more than half of the CS workforce bringing the overall reduction of the combined company to 30% (10,000 jobs reduced).  Later, SMNEY, ABBV, and SBGSY (Schneider Electric) were added to the global list of companies hit by the MOVEit hack (perpetrated by Russian state-sponsored hacking group CIOp).  After the close, SPR and its machinist union reached a tentative deal to end a strike at the company’s Wichita, KS plant.  Union members will vote on the deal Thursday.  (SPR is the main supplier of fuselage assemblies for BA.)  At the same time, the Wall Street Journal reported that Adalytics research has found that GOOGL video ads on other websites violated their promised standards (giving the company’s own internally-placed ads preference) 80% of the time.  (This is a key complaint and could well be important to EU efforts to force GOOGL to divest of their ad network while selling ads of their own.)  GOOGL disputed the findings.

In stock legal and regulatory news, the state of Washington announced they will be following other states in mandating that charging stations that participate in state programs must include a TSLA plug.  Later, the Consumer Financial Protection Bureau fined ACIW $25 million for improperly electronically processing $2 billion in payment transactions without customer authorization.  Elsewhere, hearings started Tuesday for JNJ’s second attempt to eliminate liability for talc cancer claims through the bankruptcy of the subsidiary onto which JNJ has transferred all liability.  Cancer victims are fighting the filing as an obvious abuse of bankruptcy law.  However, JNJ claims its recent $8.9 billion settlement offer (spread over decades) has the support of many of the 38,000 lawsuit-filing attorneys.  Meanwhile, a US district judge in CA rejected AAPL’s bid to have a class action lawsuit thrown out.  The suit alleges that AAPL of defrauded its shareholders by concealing the falling demand for iPhones in China (via comments made by CEO Cook shortly before an earnings report showed the demand had, in fact, dropped sharply).  REGN stock plummeted Tuesday after the company received a “Complete Response Letter” from the FDA related to the company’s aflibercept drug.  However, the letter was solely because the FDA is currently reviewing inspections of a third-party filler of prescriptions for the treatment…not due to any investigation into either REGN or the drug itself.  However, late in the day, the FDA did decline to approve a new higher-dose version of REGN’s Eylea blindness treatment.

In partially explanatory news, there were rumors Tuesday and more reports overnight that the Biden Admin is considering adding more restrictions on the sale of chips to China. This led NVDA (which has developed lower-powered chips to circumvent current restrictions) to drop almost 3.5% yesterday. (It is worth noting that NVDA gets 20% of its revenue from sales to China.) AMD, which is the other super-power in creating AI chips was also down more than 3% on the day. The object of the potential restrictions is the artificial intelligence race and protecting the US (and MSFT as well as GOOGL) lead in that new technology. However, we should note that the same computational results can be obtained from a vast array of lower-end processors as opposed to a smaller array of higher-end ones…just in a much less efficient and more electric-intensive way.

In mortgage news, we saw a reversal of recent relationships last week.  For a long time, it had been the norm that rates drove activity, particularly in home sales.  This week, strong home sales drove rates.  (Tuesday’s new home sales report showed May with a 12% increase in sales versus April and a 20% increase compared to May 2022.)  Weekly mortgage applications for the purchase of homes were up 3% for the week as were applications for a refinance loan.  This came despite the rate for a 30-year, fixed-rate, conforming loan increasing from 6.73% to 6.75%.  (Closing points remained at 0.64%.) 

In earnings news, after the close, JEF missed on both the revenue and earnings lines. 

Overnight, Asian markets were mostly in the green, with Japan (+2.02%), Australia (+1.10%), and India (+0.82%) pacing the gains.  Meanwhile, Thailand ( -0.76%), South Korea (-0.67%), and Shenzhen (-0.47%) were the only red in the region.  In Europe, we see an even stronger picture taking shape at midday.  Only Portugal (-0.05%) shows any red while the CAC (+0.86%), DAX (+0.82%), and FTSE (+0.66%) lead the continent higher in early afternoon trade.  In the US, as of 7:30 am, Futures point to a modestly lower start to the day.  The DIA implies a +0.02% open, the SPY is implying a -0.15% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields have fallen again to 3.737% while Oil (WTI) is flat at $67.71 per barrel in early trading.

The major economic news events scheduled for Wednesday include Preliminary May Goods Trade Balance and May Preliminary Retail Inventories (both at 8:30 am), EIA Crude Oil Inventories (10:30 am), and Fed Bank Stress Test Results (4:30 pm).  We also hear from Fed Chair Powell (9:30 am) and President Biden (on the economy) at 1 pm.  The major earnings reports scheduled for Wednesday are limited to GIS and UNF before the open.  Then, after the close, CNXC, FUL, MU, and WOR report.         

In economic news later this week, on Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, a survey published Tuesday by NatWest found that US fund managers are factoring in greenhouse gas emissions and other climate risks into their debt investment decisions just as much as peers in Europe.  This comes despite Republican efforts in many states and in the US House to make such considerations illegal in the US.  In a related story, BLK CEO Fink told a conference he has simply stopped using the politically weaponized term “ESG” (which many on the far right have labeled “woke”). Instead, he talks to businesses his funds may invest in about decarbonization, corporate ethics, and responsibility without the term. In other news, ERCOT reported that electric use in TX reached an all-time high on Tuesday as the heatwave continued.  ERCOT maintained its request for customers to limit usage but said it has enough resources to meet current demand at the moment.  Elsewhere, the US Dept. of Transportation decided that the New York City plan to charge a “vehicle congestion toll” would not have a significant impact on the environment and therefore does not require an environmental study.  Interestingly, it is Democratic lawmakers (from NJ, of course) who are fighting the toll as nothing but a money grab by NYC.  (If/when implemented this would be the first of its kind toll in the US, similar to what is in place in London and Singapore.)

So far this morning, GIS reported a miss on revenue while beating on the earnings line.  (UNF reports later at 8:10 am.)

With that background, it looks like all three major index ETFs are holding onto their T-line (8ema) during retests from above in the premarket. However, it’s still very early and none of the premarket candles are decisive with all of those ETFs printing Spinning Top type candles so far. From a higher-level view, all three seem to be trying to reverse the recent Bull Flag pullback pattern. In terms of extension, obviously (given the premarket retest), none of the three major index ETFs is too far from their T-line. However, the T2122 indicator is back up in the overbought territory with more than half of that range left above. So, both sides have room to run.

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 Monday, markets started just on the red side of flat with SPY gapping down 0.12%, DIA also gapping down 0.12%, and QQQ gapping down 0.14% at the open.  From that point, the large-cap indices ground sideways with the DIA slightly more bullish than SPY until 3:40 pm.  Meanwhile, QQQ had an immediate rally at the open only to sell off strongly from 10:10 am until 12:45 pm.  After that, QQQ ground sideways along the lows in a tight range until 3:40 pm.  However, in the last 20 minutes of the day, all three major index ETFs sold off, taking the SPY and QQQ out very near the lows of the day.  This action gave us a black-bodied Inverted Hammer candle in the SPY (which failed a retest of the T-line at its highs), another white-bodied Doji-type candle in the DIA, and a large, black- candle with significant upper wick (which failed a test of its T-line as well).  This happened on less-than-average volume in the QQQ and significantly less-than-average volume in both the SPY and DIA.

On the day, six of the 10 sectors were in the green with Energy (+1.65%) by far the leading sector while Technology (-0.82%) was the laggard on the day. Meanwhile, SPY lost 0.41%, DIA lost 0.01%, and QQQ lost 1.34%.  The VXX was flat at 26.43 and T2122 climbed back into the center of the mid-range at 55.65.  10-year bond yields fell to 3.715% while Oil (WTI) gained two-thirds of a percent to close at $69.57 per barrel.  So, Monday was an indecisive day for large-cap indices with Bears continuing to drive action in the QQQ.  Overall, nothing is technically broken and all three major index ETFs remain in Bull Flag formations.  However, it is also easy to see that the mega-cap DIA has essentially done nothing since December, chopping sideways for six months.  Therefore, the question remains whether DIA has been a front-runner of a major bearish turn in the market or just the laggard being begrudgingly dragged higher by the more growth-oriented SPY and QQQ. 

The only major economic news on Monday was that President Biden launched the previously-funded (by the 2021 infrastructure law) $42.5 billion program designed to get every home high-speed internet access by 2030.  Each state will get at least $107 million in funding, with Texas getting a massive $3.3 billion, from the program.  Still, the program is extremely likely to go the same way as previous federal telephone and internet programs as a major boon for T, VZ, TMUS, CMCSA, CHTR, SPB, etc. all reaping huge profits from grants and underwritten operations.  In Fed-speak news, NY Fed Pres. Williams argued Sunday (in a panel discussion) that bringing down inflation is of utmost importance and he downplayed the link between central bank monetary policy and financial stability (loss of jobs and/or recession). Williams said, “It’s not clear that monetary policy actions play a central role in affecting the emergence of financial stability vulnerabilities.”  Williams also said, “Restoring price stability is of paramount importance because it is the foundation of sustained economic and financial stability.” 

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In stock news, NVO announced that its late-stage trial of its experimental obesity drug is finding that patients are losing 15% of their body weight under the treatment.  The company hopes for US and European approval later this year.  (PFE discontinued its own obesity drug Monday after liver safety issues were found and LLY’s competing drug, which is still in mid-stage trials, shows similar results with 14.7% of body weight lost over a 36-week treatment.)  The obesity treatment market is expected to reach $100 billion per year by the end of the decade.  Elsewhere, AMED agreed to a $3.3 billion offer ($101/share) to be acquired by UNH.  At the same time, AMZN announced it will invest $7.8 billion in OH and $12.7 billion in India by 2030 to expand its cloud computing division capacity.  Meanwhile, FSR began delivery of its Ocean SUV in the US Monday.  Later in the afternoon, PACW sold a $3.54 billion portfolio of loans to ARES (at an undisclosed discount).  The move strengthened the bank’s balance sheet.  After the close, SLG said it has sold its 50% stake in a New York Office Building for $2 billion.  The sale comes as a slight discount on the 2017 purchase price of the building ($2.21 billion).  So, SLG got rid of 50% of an asset that they acquired when the original buyer defaulted (SLG was one of the 2017 lenders) for slightly less than the whole building was worth in 2017.  (Nice gain is a supposedly bad and weakening commercial real estate market.) Also after the close, Bloomberg reported that BN is close to a deal to purchase AEL.  AEL shares jumped in after-hours trading on the news.  In addition, ILMN announced it has begun job cuts and exiting office space to reduce costs.  In the same vein, the Wall Street Journal reported that HOOD is laying off 150 employees (7% of its workforce).  In addition. CNBC reported Monday night that F had confirmed it will carry out layoffs (mostly Engineering jobs) in both the US and Canada this week.  The number of layoffs was not provided. 

In stock legal and regulatory news, Germany’s highest court ruled that carmakers (such as VLKAF, MBGAF, and others) must pay compensation for having fitted their diesel cars with emissions testing cheating devices and software.  This could cost each company millions of dollars.  Elsewhere, the NHTSA announced that TSLA is recalling 26 different configurations of its Model 3 and Model Y 2023 due to battery defects.  (This fault cannot be resolved via an over-the-air software patch.)  No specific number of vehicles impacted by the recall was given.  Later, the US Supreme Court declined to hear a case brought by AAPL and AVGO challenging the patents owned by Caltech.  This returns the case to a lower court for a re-evaluation of damages after the US Court of Appeals objected to $837.8 million from AAPL and $270.2 million from AVGO as too much.  (Almost all AAPL iPhones, iPads, and MacBook devices use chips based on the infringed patents and AVGO is the major supplier to AAPL of chips that infringe upon those patents.)  Caltech has pending cases against MSFT, SSNLF, DELL, and HPQ over the infringement of the same patents.  After the close, a US judge in Houston signaled that he was ready to auction off the assets of Citgo Petroleum (Venezuelan-owned refiner) with proceeds partially going to COP and SMNEY.  Finally, the US Dept. of Defense said it has chosen GD and RNMBF as the finalists competing for a $45 billion contract (which will begin in 2027) to replace US Bradley fighting vehicles.  OSK and BAESY were among the eliminated bidders.

In geopolitical news, after a day of quiet, Wagner boss Prigozhin verbally struck out again, justifying the Wagner position in the conflict, again calling the Russian Defense Minister and Army Chief of Staff criminals and saying that only a handful of his men would join the Russian military (for half the salary).  There were unconfirmed rumors that Prigozhin is currently in a windowless Minsk, Belarus hotel.  Later, Putin released a short video where he thanked Wagner soldiers who did not attack Moscow and then returned to their bases.  He called the dead pilots (who died attacking Wagner forces) heroes.  However, Putin said the rebellion would have been crushed anyway.  Then, without naming them, he called the leaders of the revolt “criminal and treasonous” while saying they will be “brought to justice.”  Presumably he was referring to Prigozhin and perhaps his fellow Wagner founder, GRU Colonel Dmitry Utkin who led the “little green men” forces who took regions of the Donbas in 2014.  Finally (for the Russian story), a short video of Putin meeting with his cabinet (including Defense Minister Shoigu) also apparently meant to send a signal.  Elsewhere, Bloomberg reported overnight that China’s number 2, Li Qiang, told the World Economic Forum that those governments (with the implication being companies headquartered in those countries) that attempt to de-risk away from China will only fragment the global economy.  His speech boosted optimism about Chinese recovery/growth outlook and was the main driver for Chinese markets’ strong day. 

Overnight, Asian markets leaned to the green side.  Hong Kong (+1.88%), Shanghai (+1.23%), and Shenzhen (+0.97%) led the region higher while Taiwan (-1.00%) was by far the biggest loser on the day.  Meanwhile, in Europe, the opposite picture is taking shape at midday.  Twelve of the 15 European bourses are in the red with an undecided CAC (-0.02%), DAX (-0.02%), and FTSE (-0.11%) leading the continent on volume.  Belgium (-1.01%) and Norway (-0.92%) are by far the biggest losers in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed open.  The DIA implies a -0.06% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.38% open at this hour.  Simultaneously, 10-year bond yields are up to 3.727% and Oil (WTI) is down another 1.80% to $68.14 per barrel in early trading.

The major economic news events scheduled for Tuesday include Building Permits and Durable Goods Orders (both at 8:30 am), Conf. Board Consumer Confidence and May New Home Sales (10 am), and API Weekly Crude Oil Stocks (4:30 pm.  The major earnings reports scheduled for Tuesday are limited to KFY, SCHN, and WBA before the open.  Then, after the close, JEF reports.         

In economic news later this week, on Wednesday, Preliminary May Goods Trade Balance, May Preliminary Retail Inventories, EIA Crude Oil Inventories, and Fed Bank Stress Test Results are reported while Fed Chair Powell also speaks.  On Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Wednesday, GIS, UNF, CNXC, FUL, MU, and WOR report.  On Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, Monday evening SPGI reported that June US auto sales are set to increase, following up on the unexpectedly solid volumes of April and May.  The analyst firm expects to see a 9% increase in sales for 2023 as a whole (compared to 2022).  Elsewhere, a MSFT internal memo from late 2022 came out (during a court hearing over the acquisition of ATVI) Monday night.  The memo has CEO Nadella laying out the goal and expectation for MSFT to double its revenue by 2030 while also delivering in excess of 10% annual returns to shareholders via dividends and share buybacks.  This morning, RIDE filed for Chapter 11 Bankruptcy protection and put the company up for sale.  At the same time, RIDE sued Taiwan-based Foxconn for breaking an agreement to invest $170 million into RIDE.  Meanwhile, DAL said it now expects 2023 earnings to be at the high end of previous forecasts.

So far this morning, KFY reported beats on both the revenue and earnings lines.  At the same time, WBA beat on revenue while missing on earnings.  (SNX and SCHN scheduled to report at 8am.)  It is worth noting that both WBA and KFY lowered their forward guidance. 

With that background, it looks like the bears have shown up in the two large-cap index ETFs during the last 30 minutes. Their premarket candles are now red-bodied. At the same time, QQQ is now printing a gap-up Doji in the premarket. However, from a higher-level view, none of the three is signaling a major move. So, the recent pullback still looks like an orderly move (as opposed to the gappy, huge candle moves we see in a typical major bearish trend reversal. To me at least, this signals that we are still in Bull Flag patterns. (However, I’d be lying if I said I was not starting to get concerned about the Flag’s length.) All three of the major index ETFs are below their T-line (8ema), indicating the short-term trend is bearish while the longer-term trend remains Bullish in all three. In terms of extension, none of the three major index ETFs is far from their T-line and the T2122 indicator is right in the center of its mid-range. So, both sides have room to run if they can muster the energy.

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 sharply Friday (with SPY opening down 0.82%, DIA opened down 0.65%, and QQQ opened down 1.12%).  From that point, all three major index ETFs rode the rollercoaster sideways all day, at their peak retracing about half of the opening gap between 1 pm and 2 pm.  However, all three also closed back down near the opening level.  This action resulted in the SPY and QQQ gapping down through their T-line (8ema) and then failing a retest of those levels.  It also gave us indecisive, white-bodied, Doji-like candles in the SPY, QQQ, and DIA.  This also gave us all three looking like they were in Bull Flag patterns.

On the day, all 10 sectors were in the red with Utilities (-1.46%) and Energy (-1.32%) leading the way lower while Consumer Defensive (-0.67%) and Healthcare (-0.67%) held up better than other sectors.  At the same time, SPY lost 0.76%, DIA lost 0.64%, and QQQ lost 0.99%.  The VXX gained 1.26% to 26.48 and T2122 dropped back to the bottom of the mid-range at 25.65.  10-year bond yields fell to 3.735% while Oil (WTI) was down about a quarter or a percent to close at $69.35 per barrel.  So, Friday was really defined by the opening gap, with volatile sideways action the rest of the day. This all happened on less-than-average volume in the SPY, QQQ, and DIA (although DIA was quite near average volume).

In major economic news on Friday, Preliminary Manufacturing PMI came in below expectations at 46.3 (compared to a forecast of 48.5 and the May reading of 48.4).  At the same time, Preliminary Services PMI came in slightly above expectations at 54.1 (versus the forecast of 54.0 but down from the May value of 54.9).  Meanwhile, the Preliminary S&P Global Composite PMI fell to 53.0 (from a May reading of 54.3).  The biggest impact of these was the falling and underperforming Manufacturing PMI that is showing contraction.  Later, BKR gave its weekly oil and gas rig count report.  The data showed an eighth straight week where drillers are taking rigs offline due to low prices.  The reports specifically cited CHK, SWN, and CRK as shutting down rigs on the week, which brings the total 9% lower than one year prior.  Elsewhere, Atlanta Fed President Bostic told a University of Georgia conference “Getting inflation down is Job One, inflation is too high.”  However, Bostic then went on to explain his dovish approach as “I am trying to minimize the dislocation as we get inflation under control. I am hopeful.”  At about the same time, San Francisco Fed President Daly said two more interest rate hikes this year is a “very reasonable” projection.  However, she went on to say that given how fast rates have risen already and how close they are to where they probably need to be, it’s better to move more slowly and carefully than before.  As is usually the case, Daly said, “I want to make sure that we balance those risks on both sides, of under- or over-tightening” … “Adding another six weeks to our decision space, to me that seems optimal, and prudent.” 

SNAP Case Study | Actual Trade

In stock news, there were fires at NKLA company headquarters Friday.  This caused several of the NKLA electric trucks to be damaged.  The company said, “Foul play is suspected as a vehicle was seen in the area of the affected trucks just prior to the incident and an investigation is underway.”  Elsewhere, Reuters reports that Germany is set to order 60 of the CH-47 Chinook helicopters from BA for $8.71 billion.  At the same time, CGC reported a wider-than-expected loss of nearly $500 million on Friday.  The company cited “systemic regulatory issues and competition from illegal marijuana” in their report, which raised real concerns about the company’s viability.  CGC stock fell almost 14% on the day.  That move took the entire marijuana industry sharply lower.  Meanwhile, after the close, AAPL CEO Cook called India a “huge opportunity” after meeting with Indian PM Modi and President Biden at the White House on Friday.  He told CNBC the company would be expanding operations in India, including opening two retail stores.  At the same time, MU announced it has plans to open a facility in PM Modi’s home Indian state and LRCX said it has plans to train 60,000 Indian engineers.

In stock legal and regulatory news, the US Supreme Court ruled 5-4 in favor of COIN by blocking customer lawsuits while the company appeals lower court rulings and hopes to move the suits out of court and into private arbitration.  Elsewhere, the NHTSA announced that HMC is recalling 1.2 million 2018-2023 vehicles due to a faulty coaxial cable connector that may disable the rearview camera.  (HMC had received 274,000 warranty claims related to the issue prior to the recall.)  Meanwhile, Reuters reported that the state of Washington is set to mandate that electric charging stations that want to be part of state programs (get US grant dollars) must include a TSLA plug.  At the same time, US Sec. of Transportation Buttigieg warned of potential airline delays starting July 1.  The issue is a long-standing delay in the rollout of 5G service near airports by T, VZ, and TMUS, who all had agreed to delay the launch until July 1. Yet airlines claim they still have not been able to get their entire fleets retrofitted and, as a result, up to 20% (DAL) of planes will be grounded to avoid altimeter interference.  No other airline has released figures, but they are expected to be similar.  This means a 20% reduction in airline capacity and presumably revenue starting July 1.  Finally, after the close, GSK announced it had settled the first Zantac cancer lawsuit (which was headed for trial in July) for an undisclosed sum.

In geopolitical news, obviously, the attempted coup d’état in Russia (or the march for justice if you prefer) and its impact on their invasion of Ukraine were the main story worldwide.  On Friday night, the fight between Wagner PMC boss Prigozhin and Russian Defense Minister Shoigu and Army Chief Gerasimov went “hot.”  Putin sided with his minister, Shoigu et. al.  This led Wagner to march on and capture the cities of Rostov-on-Don and then Voronezh (halfway from Rostov and Moscow).  Rostov, a city about the same size as Dallas TX, is the main Russian command, logistics, and resupply center for the Russian forces in South Ukraine (including Crimea).  Voronezh, a city about the size of Jacksonville FL, is the main through point to Rostov and the primary center of both logistics and command for Russian attacks on Eastern and Northern Ukraine (Kharkiv, Sumy, etc.).  There was fighting with losses on both sides Saturday. Then Saturday night, with Wagner forces just 125 miles from Moscow, some deal was struck.  Prigozhin told his forces to turn around, Putin pardoned both him and his Wagner forces, and Prigozhin apparently accepted exile to Belorussia.  What Prigozhin was given or threatened with (or both) are unknown.  The only things that seem universally recognized are that Putin’s grip on power took a major hit and the life insurance rates Prigozhin pays must have gone through the roof.  And, the fact that Prigozhin and his men are not dead but instead are given a choice to leave to Wagner African operations or join the Russian Army makes it more likely that other coup attempts will happen in the not-too-distant future. 

Overnight, Asian markets were nearly red across the board with only South Korea (+0.47%) and India (+0.14%) able to hang onto the green.  Meanwhile, Shenzhen (-1.68%), Shanghai (-1.48%), and Thailand (-0.83%) paced the losses.  In Europe, we see a similar picture taking shape a t midday.  Only the CAC (+0.24%) and Portugal (+0.48%) are in the green. At the same time, The DAX (-0.13%) and FTSE (-0.08%) are following the smaller exchanges lower in early afternoon trade.  In the US, as of 7:30 am, Futures are just on the red side of flat.  The DIA implies a -0.05% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.22% open at this hour.  The 10-year bond yields are down sharply to 3.686% and Oil (WTI) is up a half of a percent to $69.51 per barrel in early trading.

There are no major economic news events scheduled for Monday.  The only major earnings reports scheduled for Monday is CCL before the open.  There are no major reports scheduled for after the close.        

In economic news later this week, on Tuesday we get Building Permits, Durable Goods Orders, Conf. Board Consumer Confidence, May New Home Sales, and API Weekly Crude Oil Stocks.  Then Wednesday, Preliminary May Goods Trade Balance, May Preliminary Retail Inventories, EIA Crude Oil Inventories, and Fed Bank Stress Test Results are reported while Fed Chair Powell also speaks.  On Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Tuesday we hear from KFY, SCHN, WBA, and JEF.  Then Wednesday, GIS, UNF, CNXC, FUL, MU, and WOR report.  On Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, on Friday Refinitiv analysts reported Q1 had delivered (during Q2 reports) earnings growth of 0.1% (year-on-year) from the S&P 500 companies. This was far better than the feared forecast of a 5.1% decline.  However, Refinitiv still has a gloomy outlook, expecting Q2 earnings (reported in Q3) to be down 5.6% from the same quarter in 2022.  Elsewhere, a major drought in Panama has been causing the Panama Canal to dry up (lakes used for the locks).  On Sunday, the operator of the canal reduced the depth of the hull (below the water line) permitted to transit the canal by another 13%.  This reduction will cause shipping delays, impacting both major importers and exporters.  The canal transits about 3.5% of global trade.  Ships could be partially unloaded for canal transit or can be rerouted around South America.  (Either option would cause weeks of delay and added expense.) Finally, Bloomberg reports this morning that GS has begun laying off 125 senior positions (managing directors) globally. This comes as investment banking deal values have fallen 40% so far this year.

With that background, it looks like markets want to start the week with a continuation of at least a Bull Flag pullback. All three of the major index ETFs are below their T-line (8ema), indicating the short-term trend is bearish while the longer-term trend remains Bullish in all three. For what it is worth, the markets are printing small and as yet undecisive candles in the premarket session. However, it is early. In terms of extension, none of the three major index ETFs is far from their T-line. T2122 is not far from the oversold territory but remains in the mid-range. So, both sides have room to run if they can muster the energy. The most notable thing about the market this morning is that there is apparently no reaction to the events in Russia. Maybe this is due to their isolation and greatly diminished economic position in the world. However, I have a sneaking suspicion that the reason it is not being noticed is that it so far has not had an impact on the Russian invasion of Ukraine.

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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