The SPY and QQQ opened essentially flat on Tuesday while the DIA gapped down a half of a percent at the opening bell.  All three major indices then meandered sideways until Fed Chair Powell began to speak at 12:40 pm.  At that point, the bulls spiked the market higher for 15 minutes, only to see the bears sell off all three indices hard for 35 minutes.  However, the bulls stepped back in at 1:40 pm to lead nearly as strong of a rebound rally lasted the rest of the day.  This action gave us large white candles with small upper and lower wicks.  The SPY and QQQ both held support at their T-line and DIA climbed back above its own T-line.  This took place on greater than average volume.

On the day, seven of the 10 sectors are green as Energy (+2.42%) led the way higher and Consumer Defensive (-0.42%) lagged the other sectors.  At the same time, the SPY was up 1.31%, the DIA was up 0.90%, and QQQ was up 2.07%.  Meanwhile, the VXX was down 3.10% to 11.24 and T2122 climbed back up inside of the overbought territory at 84.67.  10-year bond yields were higher again to 3.681% and Oil (WTI) just spiked higher by 4.53% to $77.47 per barrel.  So, on the day, we saw a blah day that got very volatile and eventually bullish after Fed Chair Powell gave his speech to the Washington Economic Club. 

The main news of the day was Fed Chair Powell’s Speech and Question-and-Answer Session at the Economic Club of Washington DC.  During his remarks, Powell said that “disinflation has begun…but it’s going to take a long time.”  He specifically cited the good sector as where the disinflation is showing itself strongest.  Later Powell said, “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in (to markets).”  He was short on specifics.  However, he did say that “we need to be patient” and that rates will need to be held higher for a long time.  Finally, he said he expects inflation to fall all year in 2023, but it was likely to take into 2024 before the Fed target of 2% inflation is hit.  On the topic of the Fed Balance Sheet, Powell said he expects it will take a couple more years before the Fed is ready to end the shrinking of its balance sheet (selling bonds).  Overall, the Dollar, Bonds, and the Stock Market all took Powell’s comments as less hawkish than expected.

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In other economic news, December Exports came in a $250.20 billion (down from $252.40 billion in November).  Meanwhile, December Imports were up slightly, coming in at $317.60 billion (up from $313.40 billion in November).  This also increased the Trade Deficit with a December balance of $67.40 billion (which was less than the forecast of $68.50 billion but also above the November value of $61.00 billion).  Still, this was a record for the “trade gap.”  Then, after the close, the API Weekly Crude Oil Stock Report showed an inventory drawdown of 2.184 million barrels (compared to an expected inventory build of 2.150 million barrels and last week’s 6.330-million-barrel build).  Finally, during his “State of the Union” address, President Biden called for an unspecified additional tax on Billionaires and corporate stock buybacks.  He also asked for more antitrust legislation, called for the passing of an act to stop companies from preventing workers from organizing unions, and lastly the broadening legislation to cap the cost of insulin, saying it needed to not be limited only to Medicare recipients.

In stock news, ZM announced it will lay off 15% of its employees (1,300 jobs).  Later, EBAY said it would lay off 4% (400 employees) of its own workforce.  ZM stock closed up almost 10% on the news.  In quasi-related news, Bloomberg reported that META is poised to ask its Managers to become individual contributors (in addition to managing their teams) or leave the company.  Meanwhile, DAL announced it was giving employees a 5% increase in pay across the board effective April 1.  DAL cited strong travel demand and industry labor shortages as factors in the decision.  Meanwhile, WFC agreed to pay $300 million to settle a shareholder lawsuit claiming the bank had hidden the fact it pushed unnecessary insurance on auto loan customers.  Elsewhere, HTZGC made a regulatory filing Tuesday that showed it actually owns less than half of the TSLA cars it had planned to buy in 2022 (and TSLA releases had announced).   Finally, after hours, BBBY said it has completed its last-ditch stock offering, saying that it had received $225 million and is expecting to receive another $800 million in future installments as HUD (lead investor in this offering) resells or keeps the new shares.

In airline industry news, a bankrupt South African airline (Comair) has filed suit against BA for fraud related to its agreement to buy eight 737 Max planes.  The suit claimed BA failed to disclose problems within its flight control system that caused the two plane crashes in 2018 and 2019 leading to airline losses.  BA refused to return the airline’s deposit on 737 Max planes after the crashes and 20-month groundings.  This is nearly identical to a suit filed by a Polish airline PLL LOT in 2021, which is still pending.  At the same time, BA competitor EADSY (Airbus) reported plane deliveries for January were down by a third, to 20 planes, according to Reuters.  In other labor-related news, SPR announced Tuesday that it is experiencing disruptions in supplying parts for the BA 787 and the EADSY A350 due to labor shortages. 

After the close, SNEX, LUMN, KD, OMC, AMCR, AIZ, VRTX, VOYA, FMC, EHC, CNO, ITUB, SSNC, WERN, QGEN, PLUS, PEAK, and ENPH all reported beats to the revenue and earnings lines.  Meanwhile, VFC, CCK, CSL, and FTNT all missed on the revenue line while beating on the earnings line. On the other side, NCR, WU, ILMN, ATO, RXO, and NBR all beat on the revenue line while missing on the earnings line.  Unfortunately, PRU, YUMC, CMG, VSAT, and JKHY all missed on both the top and bottom lines.  It is worth noting that KD, VRTX, FTNT, QGEN, and ENPH all raised their forward guidance.  However, CCK, EHC, SSNC, BKH, JKHY, and PEAK all lowered their own forward guidance.

Overnight, Asian markets were mixed again.  Taiwan (+1.41%), South Korea (+1.30%), and India (+0.85%) led the gainers.  Meanwhile, Shenzhen (-0.62%), Thailand (-0.60%), and Shanghai (-0.49%) paced the losses.  In Europe, the picture is much greener at midday with only Russia (-0.55%) in the red.  The FTSE (+0.72%), DAX (+0.76%), and CAC (+0.45%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly lower start to the day after Tuesday’s rally.  The DIA implies a -0.30% open, the SPY is implying a -0.32% open, and the QQQ implies a -0.18% open at this hour.  At the same time, 10-year bond yields are back down to 3.64% and Oil (WTI) is up 1.22% to $78.09/barrel in early trading.

The major economic news events scheduled for Wednesday is limited to EIA Crude Oil Inventories (10:30 am) and WASDE Report (noon).  However, we also have three Fed speakers (Williams at 9:15 am, Vice Chair for Bank Supervision Barr at 10 am, and Waller at 1:45 pm).  The major earnings reports scheduled for the day include FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, and YUM before the opening bell.  Then, after the close, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.   

In economic news later in the week, on Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

So far this morning, CVS, PFGC, PAG, UBER, ETN, D, YUM, UAA, WFRD, BDC, COHR, RITM, UA, SCGLY, and FUJIY all reported beats on both the revenue and earnings lines.  Meanwhile, TTE, EQNR, BAM, BG, CDW, TEVA, INGR, COTY, CME, TRMB, and EEFT all missed on revenue while beating on earnings.  On the other side, CRTO beat on revenue while missing on earnings.  Unfortunately, EMR, CPRI, REYN, and VSH missed on both the top and bottom lines.  It is worth noting that COTY, UAA, and BDC all raised their forward guidance.  However, INGR, CPRI, REYN, TRMB, VSH, and CRTO all lowered their own forward guidance.

In late-breaking news, interest rates dropped for a fifth consecutive week causing an 18% spike in refinance mortgage demand while new home purchase loan applications rose by 3%.  However, demand was still much lower than one year ago.  The average rate for a 30-year, fixed-rate, conforming mortgage fell to 6.18% with points also falling slightly.  Meanwhile, in addition to their earnings, CVS announced it has agreed to buy OSH for $39/share in cash ($10.8 billion overall).  This is CVS’s second acquisition in the healthcare provider space in a year.  Elsewhere, there were 4 big dividend moves of note.  DD hiked its dividend by 9.1% (to 2% annualized), VF cut its dividend by 41% to $0.30/share, MCRI declared a special dividend of $5.00/share, and MSBI hiked its dividend by 3.4% to 4.6% annualized.

With that background, it looks like all three major indices are looking to open as inside candles after yesterday’s strong move up. None of them appear to be retesting their T-lines (8ema) during premarket. However, DIA is not that far above its own T-line. The trend remains bullish (strongly bullish in the QQQ) in all three, but the DIA also remains in and upswing within its wedge. DIA and QQQ both have potential resistance just overhead with SPY dealing with a lesser level (from June ’22 highs and March ’22 lows). With only the EIA and Ag reports today, look for Fed speak as a potential volatility driver. However, in general, this should be a pure market sentiment day.

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

Stocks gapped lower on Monday (down 0.61% in the SPY, down 0.39% in the DIA, and down 0.90% in the QQQ).  From there, all three major indices rode the roller-coaster sideways all day long.  This action gave us gap-down, indecisive Doji or Spinning Top type candles in the three major indices. The SPY held its T-line as support. Meanwhile, the DIA gapped down through and rallied up to retest its own T-line from below, not quite getting back above it while at the same time finding support off its own 50sma.  This all happening on a much lower-than-average volume.

On the day, nine of the 10 sectors are red as Technology (-1.53%) led the way lower and Utilities (+0.46%) held up better than other sectors. At the same time, the SPY was down 0.61%, the DIA was down 0.10%, and QQQ is down 0.86%.  Meanwhile, the VXX was up 2.39% to 11.59 and T2122 dropped back down into the midrange at 54.39.  10-year bond yields have spiked higher again to 3.655% and Oil (WTI) is up 1.38% to $74.40 per barrel.  So, on the day, we saw a gap lower, but then indecision, perhaps meaning the bears are uncertain whether they really want to push the bulls.  Basically, both sides need a little energy from some catalyst. 

In stock news, DELL announced it is laying off 6,650 employees (5% of staff).  At the same time, PSA made an $11 billion hostile takeover bid for LSI.  This amounts to a bid of $129.30/share, but not in cash, in PSA stock instead.  LSI was at $110.58/share at the time of offer, but it closed up 11.28% to $123.05 on the day.  Elsewhere, after it reported beats on both lines, ON announced a $3 billion stock buyback program, which was double the size of the previous program.  This is significant in the chip sector that had been weak with the exceptions of AMD.  In other tech news, GOOGL announced it is planning to launch an AI Chatbot service called Bard (powered by GOOGL’s LaMDA which is a competitor to ChatGPT, which MSFT recently announced will be built into their products).  The service has already been released to beta testers.  Meanwhile, in the gold sector, NEM has made a $17 billion takeover bid for NCMGF.  Bloomberg reports the offer is not likely to be challenged by NEM rival GOLD.  Meanwhile, AMC announced a new ticket pricing structure where the ticket price will be based on seat location in tiers.

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In airline industry news, on Monday, the FAA said it is proposing a $1.1 million fine on UAL for conducting Boeing 777 flights without conducting the required preflight fire system warning checks.  UAL has 30 days to respond to the charges.  Elsewhere, the IATA (largest airline trade organization) said that many airlines will fail to meet the FAA deadline to retrofit altimeters to avoid 5G wireless interference.  (Last summer, VZ and T voluntarily agreed to delay their use of some 5G spectrum to give airlines more time.  However, now the FAA, VZ and T are negotiating again for another extension.)  This is expected to have some small impact on the telecom companies’ expansion of 5G their networks.  Meanwhile, the EU version of the FAA ruled Monday that it will not permit single pilot flights by 2030 as airlines had been seeking (to help with labor shortages).

In commodity news, the US Dollar rose to a 4-week high against the Euro Monday as the reverberations from last week’s January Payroll numbers continued.  This caused a dampening effect on all commodity prices.  Meanwhile, Bloomberg reports that the US will impose a 200% tariff on Russian Aluminum as soon as this week.  (Reportedly, the final decision has not been made as the Biden administration talks to US Aerospace and Auto industry leaders, the main importers of Russian Aluminum, about the damage that might cause to their businesses.)  Elsewhere, Reuters reports that US farmers are planning to boost corn acreage in 2023.  This comes after a late-season drought crushed the 2022 harvest and has brought US corn supplies to near decade-low levels.  This modest 2.5% shift in acreage use is likely to cause dramatic swings in everything from seeds and fertilizer to herbicides, and eventually to food prices.

In miscellaneous news, on Monday Atlanta Fed President Bostic told Bloomberg that unless last week’s Payrolls report turns out to be an anomaly, it would mean the Fed still has more work to do.  Specifically, he said the FOMC would need to push the peak interest rate higher than he now projects (which is 5%-5.25% as a terminal rate).  At the same time, late in the day Monday, GS cuts its odds of a recession in the next 12 months to 25% (down from 35%).  GS cited a rapid reduction in inflation and wage growth as well as improving business sentiment as supporting a “soft landing” and the Fed stopping its tightening regime sooner.  In an unrelated story, after hours Monday, Bloomberg reported that hedge funds tracked by GS trimmed their long positions at the fasted rate in two years over the last several market days.  However, they are also not taking huge short positions either.  Bloomberg also reported the JPM data on the matter concurred.  They called this “de-grossing” move the largest move to cash and lower-risk trades since the day after the first Reddit-driven squeeze in January 2021.  Then this morning, Minneapolis Fed President Kashkari told CNBC that the Fed has not done enough yet based on January’s explosive job growth and he is raising his terminal rate expectation to 5.4% (which is higher than what most of his peers have publicly announced). He also went further in saying “we need to raise rates aggressively to put a ceiling on inflation” (which the market will not like to hear.

After the close, ACM, NOV, SPG, SAVE, FN, SKY, DIOD, KMT, SSD, and GNW all reported beats on both the revenue and earnings lines.  Meanwhile, CINF and SWKS both beat on revenue while missing on earnings.  On the other side, PINS missed on revenue while beating on earnings. Unfortunately, ATVI, TFII, AMRK, LEG, and TTWO all reported misses on both the top and bottom lines.  It is worth noting that SWKS, LEG, SPG, TTWO, and PINS all lowered their forward guidance.  However, FN raised its own forward guidance.

Overnight, Asian markets were mixed on mostly modest moves.  South Korea (+0.55%), Hong Kong (+0.36%), and Shanghai (+0.29%) led the gainers.  Meanwhile, Malaysia (-0.95%), Australia (-0.46%), and India (-0.24%) paced the losses. In Europe, we see a similar picture taking shape at midday.  The FTSE (+0.49%), DAX (-0.17%), and CAC (unchanged) are typical of the spread in the region.  None of the European bourses have moved as much as one percent in either direction yet in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed and mostly flat start to the day.  The DIA implies a -0.09% open, the SPY is implying a +0.09% open, and the QQQ implies a +0.32% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.63% and Oil (WTI) is up more than 1.5% to $75.24/barrel in early trading.

The major economic news events scheduled for Tuesday December Imports/Exports, and Dec. Trade Balance (both at 8:30 am), and API Crude Oil Stocks (4:30 pm) are reported and Fed Chair Powell speaks at 12:40 pm.  The major earnings reports scheduled for the day include ADNT, AGCO, ARMK, ARCC, BP, BV, CG, CARR, CTLT, CNC, CEIX, DD, FSV, IT, GPK, HAIN, HTZ, INCY, J, KKR, LIN, NTDOY, NVT, OMF, RCL, SCSC, SPR, TDG, and XYL before the opening bell.  Then, after the close, AMCR, AIZ, ATO, CSL, CMG, CNO, CCK, EHC, ENPH, PLUS, FMC, FTNT, PEAK, ILMN, ITUB, JKHY, KD, NBR, NCR, OMC, PRU, RXO, SSNC, SNEX, VRTX, VFC, VSAT, WERN, WU, and YUMC report.   

In economic news later in the week, on Wednesday EIA Crude Oil Inventories are reported and Fed member Williams speaks.  On Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Wednesday, FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, YUM, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.  On Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

In overnight news, BBBY announced last night that it will try a list-minute (last ditch) stock sale to raise the cash to avoid bankruptcy. They are hoping the new shares will raise just over $1 billion. Elsewhere, CS announced that it is canceling (at least for now) the company “Compensation Day” where employees were told their bonus amounts (and given the money) for 2022. The company had previously announced they were slashing the bonus pool in half this year due to the financial condition of the company.

So far this morning, CARR, DD, J, GPK, XYL, IT, OMF, INCY, NVT, BV, ARCC, FISV, and CEIX all reported beats on both the revenue and earnings lines.  Meanwhile, BP, CNC, ARMK, ADNT, CTLT, FISV, and VVV all reported beats on revenue while missing on earnings.  On the other side, LIN, CG, and HAIN reported a miss on revenue while beating on earnings.  Unfortunately, NTDOY (Nintendo) missed on both the top and bottom lines.  It is worth noting that FISV raised its forward guidance while BV lowered its own forward guidance.

With that background, it looks like the SPY and DIA are going to test their T-lines (8ema) again this morning. Meanwhile, QQQ looks to be trying to put a bottom into its two-day pullback (at least in premarket trade). The wedge pattern in the DIA and the bullish trends in the SPY and QQQ remain the main technical features of the market at this point. Do not be surprised if we wander around until Fed Chair Powell’s remarks this afternoon. I think that Bostic and Kashkari were presignalling his sentiments (preparing the market for his words today) and that Powell is likely to make sure the market realizes there will be no “March pause” (as several talking heads had predicted in the recent past). However, he is also likely to say the jobs numbers were a good sign that the Fed is walking a “Goldilocks path” where inflation is coming down and at the same time jobs are being created. In short, he’s likely to imply that we just need to “stay the course” with modest hikes for a while to definitely get inflation under control at the same time we stay on the soft-landing trajectory.

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 on Friday (SPY gapped 1.24%, DIA gapped down 0.51%, and QQQ gapped down 2.29%) after January Payrolls crushed expectations.  However, the bulls stepped in immediately to rally back to the Thursday close level in the first 60-75 minutes.  All three major indices reached the highs of the day at 11:40 am.  Then the bears over again to start a selloff that lasted into the close.  This action gave us gap-down, Inverted-Hammer-type candles in the three major indices.  The DIA also fell back below its T-line (8ema).

On the day, all 10 sectors are red as Utilities (-1.99%) lead the way lower and Energy (-0.27%) held up better than the other sectors.  At the same time, the SPY is down 1.06%, the DIA is down 0.41%, and QQQ is down 1.78%.  Meanwhile, the VXX is up 0.98% to 11.32 and T2122 is dropping but remains just inside the overbought territory at 82.24.  10-year bond yields have spiked higher to 3.526% and Oil (WTI) is down 3.56% to $73.19 per barrel.  So, on the day, we saw a significant gap lower that the bulls tried to fade, only to be pushed back down by the bears.  This all happened on heavier-than-average volume.

In economic news, the January Jobs Reports were the headline makers.  January Nonfarm Payrolls increased a whopping +517k (compared to an estimate of +185k and the December value of +260k).  January Private Nonfarm Payrolls also far exceeded the estimates at +443k (versus the forecast of +190k and a December reading of +269k).  Both numbers crushed estimates as the leisure and hospitality sector showed a huge gain, followed by professional/business services, government, and healthcare.  The increases happened despite the Jan. Participation Rate also increasing to 62.4% (from the December value of 62.3%).  This surge in employment drove the January Unemployment Rate to a 53-year low (since 1969) of 3.4% (versus a forecast of 3.6% and a Dec. reading of 3.5%).  So, despite over 100,000 job cuts announced in January by various firms, the economy is still producing jobs at a massive rate, far faster than expected.  Markets were skeptical, but this could be a sign of the Fed threading the needle as inflation is falling while huge numbers of jobs are being created.  In other economic news, the Jan. Services PMI beat expectations at 46.8 (versus the forecast of 46.6 and the Dec. value of 44.7).  Finally, ISM Non-Mfg. PMI came in much hotter than expected at 55.2 (compared to the forecast of 50.4 and the Dec. value of 49.2).  So, judging by payrolls and purchasing managers’ outlooks, the economy is much stronger than the news headlines had led us to believe.

In energy news, the front-month March contract for Natural Gas fell another 21% last week, closing at $2.41/mmBtu. This is the lowest wholesale natural gas price in the US for over two years.  As a result, energy firms cut the number of active natural gas rigs to the lowest level since June 2020.  Meanwhile, Oil (WTI) closed down 3.56% on the day, resulting in an 8% drop for the week.  This may or may not be related to another cut in the number of oil rigs producing in the US.  Regardless, the number of oil rigs fell by almost 2% over the week.

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In stock news, the US Treasury Dept expanded eligibility for up to $7,500 tax credit to cover more expensive (SUVs).  This includes newly eligible models from F, GM, TSLA, and VLKAF.  In response to this news, TSLA raised the price of its Model Y by $1,000.  Elsewhere, late Friday Bloomberg reported that DIS is in talks to sell more of its movies and TV series to rival networks. (No specific rivals were mentioned.)  Meanwhile, HMC issued a “Do Not Drive” warning covering 8,200 of its vehicles over defective and unrepaired airbags.  After the close, LUV confirmed that its CEO will be testifying in front of a US Senate hearing on Thursday related to the company’s holiday travel mess.  Late Friday night, a train from NSC derailed near the border of Ohio and Pennsylvania.  On Saturday, 32,000 DIS theme park workers voted to reject a DIS contract proposal by a margin of 96% rejecting to 4% in favor.  The negotiations have been ongoing since August, but no date for the resumption of talks has been set yet.

In stock legal and regulatory news, on Friday, current and former US military members asked a federal judge to throw out the Chapter 11 bankruptcy filed by MMM subsidiary Aearo Technologies (as a means of protecting MMM against 230k lawsuits claiming the company’s defective earplugs had caused hearing loss for US military members).  At the same time, FDX lost its bid to have a judge throw out a $366 million jury award over a racial discrimination lawsuit that FDX lost.  Later, the Wall Street Journal reports that the US FTC is preparing to file an antitrust lawsuit against AMZN.  Also after the close, a jury found that TSLA and its CEO Elon Musk were not liable in a securities fraud case stemming from Musk’s tweets saying he had secured financing and was going to take TSLA private at a price 23% above the then-current market price.  In other court action, a US district judge denied the FTC request to stop META from buying virtual reality content maker Within Unlimited.

In miscellaneous news, the UN Food and Agriculture Organization (FAO) announced after the close Friday that world food prices fell again in January.  This was the 10^th consecutive drop in that food price index, with global food prices reaching the lowest level since September 2021.  They specifically cited drops in vegetable oils, dairy, and sugar prices while noting that cereals and meat prices remained stable for the month.  As an example, FAO said vegetable oil prices fell 2.9% in January while dairy prices fell 1.4%, and sugar declined 1.1%.

So far this morning, CAN, TKR, and IDXX reported beats on both the revenue and earnings lines.  Meanwhile, AMG and IX missed on revenue while beating on earnings.  On the other side, TSN beat on revenue while missing on earnings. Unfortunately, ENR missed on both the top and bottom lines.  (CMI and ON report closer to the open.)

Overnight, Asian markets were mixed but mostly red.  Hong Kong (-2.02%), Taiwan (-1.34%), and Shenzhen (-1.18%) led the region lower.  Japan (+0.67%) was an outlier to the upside.  In Europe, with the sold exception of Russia (+0.85%), bourses are red across the board at midday.  The FTSE (-0.77%), DAX (-1.03%), and CAC (-1.40%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -0.54% open, the SPY is implying a -0.71% open, and the QQQ implies a -0.91% open at this hour.  At the same time, 10-year bond yields are spiking again to 3.604% and Oil (WTI) is up a quarter of a percent to $73.56/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include AMG, CNA, CMI, ENR, IDXX, ON, IX, TKR, and TSN before the opening bell.  Then, after the close, AMKR, ATVI, ACM, CINF, DIOD, FN, KMT, LEG, NOV, PINS, SPG, SSD, SKY, SWKS, SAVE, TTWO, and TFII, report.  

In economic news later in the week, on Tuesday, December Imports/Exports, Dec. Trade Balance, and API Crude Oil Stocks are reported and Fed Chair Powell speaks.  Then Wednesday EIA Crude Oil Inventories are reported and Fed member Williams speaks.  On Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Tuesday, we hear from ADNT, AGCO, ARMK, ARCC, BP, BV, CG, CARR, CTLT, CNC, CEIX, DD, FSV, IT, GPK, HAIN, HTZ, INCY, J, KKR, LIN, NTDOY, NVT, OMF, RCL, SCSC, SPR, TDG, XYL, AMCR, AIZ, ATO, CSL, CMG, CNO, CCK, EHC, ENPH, PLUS, FMC, FTNT, PEAK, ILMN, ITUB, JKHY, KD, NBR, NCR, OMC, PRU, RXO, SSNC, SNEX, VRTX, VFC, VSAT, WERN, WU, and YUMC.  On Wednesday, FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, YUM, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.  On Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

Other late-breaking (and less market-related) news includes the “over-hyped” story of the Chinese spy balloon that the US shot down this weekend. Navy divers continue their work to recover the wreckage from the 7-mile-wide debris field. This story was over-hyped because it is the fourth recent such Chinese balloon overflight of the US (dating back to three during the Trump Administration) and is certainly not the only Chinese surveillance of the US that goes on constantly (satellites, perimeter flights, hacking, human assets, etc.). Nonetheless, the news cycle and political opportunity conspired to make this one a story. The only thing that matters here is if and how a US response might impact US-Chinese trade relations. The other story was a pair (7.7 and a 7.5 on the Rictor scale) of earthquakes in Southern Turkey. These should have minimal international market and business impacts but do have the potential to roil oil markets because they technically were located in the Middle-East and not extremely far from Syrian oil fields.

With that background, it looks like the SPY is going down to retest its T-line as support during pre-market trade. At the same time, DIA is failing its T-line as support and retesting its 50sma as support, all while QQQ pulls back but has not reached its T-line yet. DIA remains in its wedge, while the trend remains strongly bullish in the SPY and QQQ (trends have not even been retested by the pullback this morning). So, be careful and nimble on any short positions you might take and remember the bias is still bullish.

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 diverged at the open Thursday (the SPY gapping up 1%, the QQQ gapping up 2.21%, and DIA gapping up just 0.17%).  At that point, the DIA sold off hard for 15 min. while the SPY and QQQ just chopped for the first 45 minutes.  Then SPY and QQQ both rallied hard for 40 minutes before joining DIA in a sideways grind with a slightly bullish trend that lasted until 2 pm.  However, at that point, markets sold off hard for a little over an hour.  Finally, the last 60 minutes saw a bounce.  This action gave us an indecisive gap-up, Spinning Top candle in the SPY, a black-bodied hammer in the DIA, and a gap-up white-bodied candle with upper and lower wicks in the QQQ.  SPY also completed a Golden Cross (50sma crossed above 200sma).

On the day, six of the 10 sectors were in the green as Technology (+3.58%) leads the way higher, and Energy (-1.99%) lagged behind the other sectors.  Meanwhile, the SPY was up 1.44%, the DIA was down 0.16%, and QQQ was up 3.59%.  At the same time, the VXX was up 2.19% to 11.22 and T2122 fell but remains deep in the overbought territory to 96.39.  10-year bond yields plunged down to 3.395% and Oil (WTI) was down 0.85% to $75.76 per barrel.  So, on the day, we saw very divergent markets as the massive technology big dogs pulled the QQQ and SPY higher while the DIA languished.  However, at the end of the day, we saw indecision across the board.  This all happened on heavier-than-average volume.

In economic news, Weekly Jobless Claims came in better than expected at 183k (compared to the forecast of 200k and the prior week’s reported 186k).  Q4 Nonfarm Productivity also came in much better than expected at +3.0% (versus the forecast of +2.4% and the Q3 reading of +1.4%).  In addition, Q4 Unit Labor Costs were also far better than expected at +1.1% (compared to a forecast of +1.5% and the Q3 reading of +2.0%).  However, December Factory Orders came in lower than expected at +1.8% (versus the forecast of +2.3%, but far better than the November number of -1.9%).  On the whole, I think the Fed liked those numbers as productivity was stronger than expected while labor costs rose less than expected and while factory activity remained positive (growing) it was not as hot as the average economist had predicted.

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In stock news, Medicare Advantage released its proposal to DECREASE rates by 2.27% in 2024.  This was both unexpected and far below the 5% increase in 2023 (when it had proposed increasing 4.48%).  As a result, UNH, HUM, CNC, ELV, CVS, and CI all took a hammering Thursday.  Elsewhere, KKR made a bid to buy the controlling interest in Italy’s largest phone company for somewhere north of $22 billion.  (VIVHY owns the largest block of shares now at 24%.)  Meanwhile, the FTC has rejected a petition from META to have FTC Chair Lina Khan recused from participating in any review or decision on META’s proposed acquisition of (virtual reality app maker) Within Unlimited.  Finally, EU lawmakers agreed to tougher rules related to political ads that are targeted at limiting the power of GOOGL and META in the name of countering misinformation.

In energy news, the front month March Natural Gas contract closed lower to $2.456 per mmBtu.  This closing price came after trading at a 22-month low earlier in the session.  The continued fall in natty prices happened despite a larger-than-expected drawdown for US storage in the weekly inventory report.  (The EIA reported a draw of 151 billion cubic feet, compared to the expected drawdown of 142 billion cubic feet.)  Meanwhile, Oil dipped mainly on the back of a rebound by the dollar from its lows on Wednesday.  A Reuters report also said that Chinese oil imports were lower in January than in either December or November at 10.98 million barrel per day versus 11.37mbpd and 11.42mbpd respectively.  Elsewhere, US Gasoline inventories have gone up almost 13 million barrels since January 1 and even distillates (Diesel and Heating Oil) stocks rose last week, for the first time in five weeks.

In miscellaneous news, corporate stock buyback programs tripled in January (versus a year ago) to $132 billion.  It is worth noting that this is significant because 2022 saw a record $1.26 trillion in stock buybacks and analysts (such as GS and MS senior market analysts) had been expecting buybacks to fall 40% due to recession fear.  This tends to indicate that so far, corporations are not nearly as concerned about recession impacts as analysts expected (or are just in better financial shape than analysts knew).  On another hopeful note, in their report, CLX not only beat expectations but also raised guidance and said there would be no further layoffs in 2023. 

After the close, AMZN, GILD, HIG, X, CTSH, LPLA, MCHP, CLX, SKX, POST, MEOH, DECK, COLM, BYD, OTEX, SIGI, ENSG, TEAM, GEN, and CRUS all beat on the revenue and earnings lines.  Meanwhile, F and RGA beat on revenue while missing on earnings.  On the other side, QCOM, KMPR, HUBG, BZH, and CVCO all missed on revenue while beating on earnings.  Unfortunately, AAPL, GOOGL, GOOG, SBUX, SKYW, and MTX missed on both the top and bottom lines.  It is worth noting that MCHP, POST, and TEAM all raised their forward guidance.  However, CTSH, SKX, and COLM lowered their forward guidance.

Overnight, Asian markets leaned to the green side with the exception of China.  Hong Kong (-1.36%), Shanghai (-0.68%), and Shenzhen (-0.63%) were the only red in the region.  Meanwhile, India (+1.38%), Australia (+0.62%), and Singapore (+0.61%) led the region higher. In Europe, the picture is much redder in color at midday.  The FTSE (+0.25%) is among the minority of bourses in the green while the DAX (-0.55%) and CAC (-0.15%) are more typical in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.26% open, the SPY is implying a -0.72% open, and the QQQ implies a -1.29% open at this hour.  At the same time, 10-year bond yields are flat at 3.396% and Oil (WTI) is off just pennies to $75.69/barrel in early trading.

The major economic news events scheduled for Friday include Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, and Jan. Unemployment Rate (all at 8:30 am), Services PMI (9:45 am), and ISM Non-Mfg. PMI (10 am).  Major earnings reports scheduled for the day include AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH before the opening bell.  Then, after the close, there are no scheduled reports.  

So far this morning, SAN, BBU, REGN, AON, ZBH, CHD, NFG, and UI have all reported beats to both the revenue and earnings lines.  Meanwhile, CI, LYB, ASAZY, CBOE, and AVTR missed on revenue while beating on earnings.  On the other side, BEP beat on revenue while missing on earnings.  Unfortunately, SNY, ARCB, and SAIA missed on both the top and bottom lines.  No major changes to guidance have been announced yet this morning.

So, the big news overnight was the disappointing misses by the big dog tech names, AAPL and GOOGL and GOOG (which both complained of low interest from advertisers). F also missed on earnings, and probably more importantly, had a dismal report compared to arch-rival GM’s information from earlier in the week. Combined with this morning’s bad reports from trucking companies (ARCB and SAIA), the mix is likely to have Mr. Market in a worried mood (in terms of the economy) ahead of the January Payrolls report. Regardless of mood, we have to realize that it is going to be hard for the SPY or QQQ to go up when AAPL, GOOG, and GOOGL go down. Even with the beats by AMZN to help, that will be a tough lift given how much volume those three tickers trade each day. With that said, it is worth noting that all three have made significant recoveries from their pre-market lows. As a result, the major indices (SPY and QQQ) are hanging in too ahead of the data.

With that background, it looks like the recent leaders (QQQ and SPY) are going to gap down. However, neither is even close to retesting its up-trending T-line (8ema). DIA is retesting its T-line from above again. However, it has been chopping sideways in its wedge for some time now. So, this is nothing to be too worried about. SPY did complete its Golden Cross yesterday (50sma crossing up the 200sma). However, QQQ also ran into a resistance level. So, technically, markets still have a bullish bias. However, remember that it’s Friday… payday. So, pay yourself, lock in profits, and prepare your account for the weekend.

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 modestly on Wednesday (down 0.31% in SPY, down 0.50% in DIA, and down 0.16% in QQQ).  The large-cap indices then wandered sideways with a slightly bearish trend and the QQQ just flat meandered sideways until 2 pm. However, when the Fed announced, we saw volatility to the upside and then to the downside over the next 30 minutes. Yet, as soon as Fed Chair Powell began speaking, we got a strong bullish rally for 75 minutes.  Finally, we saw profit-taking in the last 15 minutes of the day.  This action gave us white-bodied candles with wicks on both ends.  Only the DIA would be seen as a candle signal as it printed an indecisive Spinning Top candle.  IT is worth noting that SPY closed right up against a resistance level.

On the day, nine of the 10 sectors were in the green as Technology (+2.72%) lead the way higher and Energy (-1.52%) lagged behind the other sectors.  At the same time, the SPY was up 1.06%, the DIA was up 0.01%, and QQQ was up 2.14%.  Meanwhile, the VXX was down 3% to 10.98 and T2122 is even higher, deep in the overbought territory to 98.74.  10-year bond yields plunged down to 3.417% and Oil (WTI) was off 2.75% to $76.70 per barrel.  So, on the day, we saw a drift sideways until the Fed Chair began speaking.  At that point, the bulls rallied very hard only to take profits the last 15 minutes of the day.  This all happened on heavier-than-average volume.

In economic news, the January ADP Nonfarm Employment Change came in well below forecast at +106k (compared to an expected +178k and a Dec. reading of +253k). Later, January Mfg. PMI came in slightly above expectation at 46.9 (versus a forecast of 46.8 and the Dec. value of 46.8).  Then the January ISM Mfg. PMI came in below what was expected at 47.4 (compared to the forecast of 48.0 and December’s reading of 48.4).  At the same time, the December JOLTs Job Openings report showed a much higher reading than expected at 11.012 million (versus the forecast of 10.250 million and the Nov. value of 10.440 million).  All of these tend to indicate the Fed policies are having the impacts they had hoped.

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However, the main event of the day was the Fed and in Fed news, the FOMC hiked rate 0.25% to 4.50% – 4.75%, which is the highest since October 2007.  During his press conference, Fed Chair Powell repeatedly referred to the “disinflationary process that has started.”  However, he also said “we’re going to be careful about declaring victory” and “we’ve got a long way to go.”  Powell said the labor market is still out of balance and the Unemployment Rate will need to rise from its low 3.5% level to complete the journey back to 2% inflation.  Finally, in a side note to one question, Powell said “a couple more” (rate hikes were likely to come).  That last note was exactly the music the bulls wanted to hear.

In stock news, FDX announced it was cutting more than 10% of management as part of the overall 2% workforce reduction. The company said it had already reduced staff by 12,000 since June.  Elsewhere, AMGN launched a direct competitor drug to ABBV’s blockbuster arthritis offering (Humira).  Competition is expected to lower customer prices, but analysts are expecting the savings to be limited (~ 5%) since it is in the interest of both companies to keep margins as high as possible.  Meanwhile, Reuters reports that RIVN is laying off 6% of its workforce in an effort to cut costs.  At the same time, the Polish competition watchdog (Office of Consumer Protection) has accused AMZN of misleading consumers via its sales and delivery practices on its website.  In other news, Reuters reports that RPD is considering strategic options after attracting acquisition interest.  (RPD spiked 23% Wednesday afternoon on this report.)  Finally, AMC has requested stockholder approval to increase its shares outstanding by 10 times.  However, it has coupled that proposal with a second very popular one that would convert deeply discounted preferred shares into common stock and the two ideas will be decided on a single vote.  The vote is scheduled for March 14.

In energy news, natural gas continued its relentless march downward, closing down 8% to $2.46/mmBtu on Wednesday.  The front-month natty has lost more than 20% so far this week alone.  This appears to be a consumption-led decline since natural gas inventories are only 4% higher than they were a year ago.  Elsewhere, the midday EIA Crude Oil Inventories showed a much larger-than-expected build in oil stocks.  US Inventories went up 4.140 million barrels (compared to a forecast of +0.376 million barrels and following last week’s build of +0.533 million barrels).  This was the sixth straight week of oil inventory builds in the US.  As mentioned above, WTI closed down 2.75% at $76.70/barrel (which was actually after recovering from an afternoon low of $76.08/barrel).

After the close, ALGN, ALGT, ALL, AFG, AVT, CCS, CTVA, ENVA, THG, HOLX, MCK, MTH, META, MAA, QRVO, TTEK, and UGI all reported beats on both the revenue and earnings lines.  Meanwhile, AFL, BHE, CHX, DXC, GL, LFUS, MOD, and RRX missed on revenue while beating on earnings.  On the other side, PTC and SLM both beat on the revenue line while missing on earnings.  However, CHRW, HTHIY, LSTR, MET, and MUSA missed on both the top and bottom lines.  It is worth noting that ALGN, AVT, GL, HOLX, MCK, PTC, SLM, and TTEK all raised their forward guidance.  Unfortunately, BHE, CCS, CHX, CTVA, DXC, LSTR, LFUS, and QRVO all lowered their own forward guidance.

Overnight, Asian markets were mixed on modest moves.  Taiwan (+1.14%), South Korea (+0.70%), and Malaysia (+0.29%) led the gainers.  Meanwhile, Hong Kong (-0.52%), Singapore (-0.41%), and Shenzhen (0.22%) paced the losses.  In Europe, the bourses lean heavily to the green side at midday.  The FTSE (+0.57%), DAX (+1.29%), and CAC (+0.22%) lead the way higher while only a couple smaller exchanges show any red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a very mixed open.  The DIA implies a -0.42% open, the SPY implies a +0.38% open, and the QQQ implies a +1.32% gap higher at the open.  At the same time, 10-year bond yields continue to fall at 3.389% and Oil (WTI) is down six-tenths of a percent to $75.98/barrel in early trading.

The major economic news events scheduled for Thursday include Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 am), and December Factory Orders (10 am).   Major earnings reports scheduled for the day include FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, and WEC before the opening bell.  Then, after the close, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  

In economic news later in the week, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.  In terms of earnings later this week, on Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

So far this morning, CAH, MRK, BMY, CNHI, ABB, BBVA, EL, BDX, BCE, LEA, APTV, AWK, PH, TT, BIP, RCI, DGX, MKL, HSY, WEC, CMS, AME, RACE, DNA, HOG, SBH, FLWS, VSTO, JHG, NJR, FCFS, SXC, DLX, and IMKTA all beat on both the revenue and earnings lines.  Meanwhile, SHEL, SONY, HON, TAK, LLY, IFNNY, BERY, APD, ABG, SIRI, DASTY, BC, ALFVY, BR, ATI, and WNC all missed on revenue while beating on earnings.  On the other side, COP, ICE, HBI, LAZ, and GOOS beat on revenue while missing on earnings.  Unfortunately, APDSKFRY, AVY, PENN, WMS, and BALL missed on both the top and bottom lines.  It is worth noting that BMY, LLY, BDX, PH, TT, HSY, RACE, NJR, and WNC all raised their forward guidance.  However, MRK, EL, LEA, APTV, SWK, SIRI, AVY, HBI, WMS, and GOOS all lowered their own forward guidance.

With that background and more data ahead, it looks like the recent leaders (QQQ and SPY) are going to gap up and try to take markets higher this morning. However, the mega-cap DIA is looking to gap down and is languishing inside its recent wedge, just above its T-line. The SPY is completing its golden cross (50sma cross above 200sma) this morning. A certain group of traders will see that as a great sign and will get long. So, the trend, gaps, technical signs, and two broader market indices are all bullish this morning. Perhaps it is a rotation out of the safety mega-cap names that is weighing the DIA down. Regardless, the bias is bullish, but a lot of economic data is still showing a slowing economy. So, there will continue to be some headwinds.

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 just on the green side of flat Tuesday.  All three major indices then chopped sideways for the first 40 minutes of the day.  At that point, the bulls led a modest rally for about 45 minutes.  Then another sideways move (within a very tight range this time) took over until 12:20 pm when the bulls started another modest move higher most of the afternoon.  However, at about 3:10 pm, the bears stepped back in to start some end-of-day profit-taking.  This action gave us large, white-bodied candles, with modest upper wicks and with only the DIA having a lower wick. All three major indices are back above their T-line, the QQQ is back above its 200sma, and the DIA is back above its 50sma.

On the day, all 10 of the sectors are in the green as Basic Materials (+1.50%) leading the way higher and Communications Services (+0.15%) lagging behind the other sectors.  At the same time, the SPY was up 0.81%, the DIA was up 0.53%, and QQQ was up 0.86%.  Meanwhile, the VXX was down almost 2% to 11.36 and T2122 is right back up deep in the overbought territory to 97.61.  10-year bond yields are down to 3.523% and Oil (WTI) was up 1.20% to $79.08 per barrel.  So, on the day, we saw some support from the T-lines as the bulls took control for the day. This all happened on light volume as the markets wait on big-name earnings and especially the Fed news on Wednesday.

In economic news, the Q4 Employment Cost Index came in lower than expected at +1.0% (compared to a forecast of +1.1% and a Q3 value of +1.2%).  This was the smallest increase in labor costs in a year and is more evidence that inflation is heading in the right direction.  Later, the Chicago PMI came in worse than expected at 44.3 (versus the forecast of 45.0 and the December value of 45.1).  This shows that businesses (purchasing managers), at least those in the Midwest, have a declining outlook for the economy.  Then at 10 am, the Conference Board Consumer Confidence Index also came in a bit below expectation at 107.1 (compared to a forecast of 109.0 and the December reading of 109.0).  This too shows a declining outlook for the economy, this one from consumers.  Finally, after the close, the API Weekly Crude Oil Stocks Report came in with a huge, surprise inventory build.  The report showed an inventory increase of 6.330 million barrels (versus an expected drawdown of -1.000 million barrels and following last week’s 3.378 million barrel crude oil stock build).  This is just another in a string of huge inventory builds in recent weeks in the US.

SNAP Case Study | Actual Trade

In miscellaneous news, as we start a new month, we look back at a nice January in the stock market.  SPY gained 6.29%, DIA gained 2.87%, and QQQ led the rally, up 10.64%.  Even small-caps participated as the IWM was up 9.82% for January.  In terms of sectors, Consumer Cyclical was up a whopping 15.80% with several other areas up 12-13%.  Lowly Energy (+0.25% for the month) lagged the other sectors.  However, all was not rosy in January as an NYSE computer system glitch prevented 250 major stocks from opening on time on January 24.  This resulted in unknown losses, but the NYSE has said the claims made already are likely to exceed the pool of funds set aside to cover such losses.

In stock news, TSLA filed updated 10-K risk assessments with the SEC which now includes the risk of Elon Musk needing to sell more stock (to satisfy his other financial commitments).  Elsewhere, PYPL announced it will lay off 7% of its workforce (2,000 employees) as it braces for an economic slowdown.  BA delivered the last of its 747 jets to AAWW on Tuesday afternoon.  The company’s replacement (the 777X) will not be ready to ship until 2025.  After the close, the EU said it is now studying whether the major tech companies (GOOGL, AMZN, AAPL, META, NFLX, and MSFT) should be charged to subsidize telecom network costs.  (Currently, those costs are government subsidized and implemented by Eu-based Telcos like TEF.)  The reasoning is that the six major tech firms account for well more than 50% of Internet traffic.  The tech giants say the idea amounts to an internet traffic tax and would violate the EU “net neutrality” rules requiring all users to be treated equally.

In stock legal and regulatory news, TSLA disclosed Tuesday that the US Dept. of Justice has sought all its internal documents related to the “Full Self-Driving” and “Autopilot” driver-assist systems.  This seems to be related to a criminal investigation over claims the company made about the vehicle driving itself and deaths that resulted from drivers relying on those systems.  Meanwhile, the National Labor Relations Board is issuing a complaint after its investigation found that AAPL workplace rules violate US labor law.  This would just be another among several complaints pending against AAPL for anti-union actions.  Further down the action chain, a US judge found AMZN guilty of illegally threatening New York warehouse workers if they voted to unionize.

After the close, AMD, DOX, AMGN, CENT, CENTA, MDLZ, OI, RNR, SYK, and SMCI all reported beats on both the revenue and earnings lines.  Meanwhile, CB and UNM both beat on revenue while missing on earnings.  On the other side, CP, EW, JNPR, SNAP, ASH, and HA all missed on revenue while beating on earnings.  However, WDC, EA, and MTCH missed on both the top and bottom lines.  It is worth noting that OI raised its forward guidance.  At the same time, WDC, EA, and SNAP lowered their forward guidance.

Overnight, Asian markets leaned heavily to the upside.  Shenzhen (+1.31%), Hong Kong (+1.05%), South Korea (+1.02%), and Taiwan (+1.01%) led the gains but the increases were widespread.  Only Malaysia (-0.93%) and India (-0.26%) showed any red in that region.  In Europe, we see a similar story taking shape at midday.  The FTSE (+0.20%), DAX (+0.23%), and CAC (+0.25%) lead the way in early afternoon trade.  However, the only red on the continent is Switzerland (-0.46%).  As of 7:30 am, US Futures are pointing toward a modestly down start to the day.  The DIA implies a -0.36% open, the SPY is implying a -0.22% open, and the QQQ implies a flat -0.04% open at this hour.  At the same time, volatile 10-year bond yields are down to 3.488% while Oil (WTI) is up 0.71% to $79.43/barrel in early trading.

The major economic news events scheduled for Wednesday include ADP January Nonfarm Employment Change (8:15 am), Jan. Mfg. PMI (9:45 am), ISM Mfg. PMI and Dec. JOLTs (both at 10 am), EIA Crude Oil Inventories (10:30 am), the FOMC Rate Decision and FOMC Statement (both at 2 pm), and FED Chair Press Conference (2:30 pm).  Major earnings reports scheduled for the day include MO, ABC, ATKR, BSX, EAT, GIB, EPD, EVR, FTV, GSK, HUM, IEX, JCI, MHO, NVS, ODFL, OTIS, PTON, SMG, SR, TMUS, TMO, WRK, and WM before the opening bell.  Then, after the close, AFL, ALGN, ALGT, ALL, AFG, AVT, BHE, CHRW, CCS, CTVA, DXC, ENVA, GL, THG, HOLX, LSTR, LFUS, MCK, MTH, META, MET, MAA, MOD, MUSA, QRVO, RRX, TTEK, and VSTO report. 

In economic news later in the week, on Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In economic news later in the week, on Wednesday, ADP January Nonfarm Employment Change, Jan. Mfg. PMI, ISM Mfg. PMI, Dec. JOLTs, EIA Crude Oil Inventories, the FOMC Rate Decision, FOMC Statement, and FED Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later this week, on Thursday, FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, WEC, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  Finally, Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

So far this morning, ABC, GSK, TMO, MO, OTIS, GIB, EVR, EAT, ATKR, SMG, and SR have all reported beats on both the revenue and earnings lines.  Meanwhile, HUM, NVS, EPD, NVO, JCI, and ODFL all missed on revenue while beating on earnings.  On the other side, BSX, PTON, WM, and IEX beat on revenue while missing on earnings. However, HTHIY (Hitachi) and WRK missed on both the top and bottom lines.  It is worth noting that HUM, PTON, and EAT all raised their forward guidance while none of the reporting companies lowered guidance at this point.

With that background and a heavy day of data (especially the afternoon) ahead, it looks like all three major indices are moving back toward flat in the premarket. All three remain above their T-line (8ema), although the DIA is close above. Once again the SPY is right at the point of a golden cross, with its 50sma kissing up against its 200sma. The QQQ and DIA have resistance levels just above. However, the trend remains bullish in the QQQ, SPY, and to a lesser “inside a wedge” extent in the DIA. Again, remember that 99% of futures bets are expecting a 0.25% rate hike (i.e. the market is certain it knows what the FOMC will do). That means the risk is that the Fed does something unexpected (like a 0.50% rate hike). If that were to happen, I’d expect the bears to roar into action. However, the more likely scenario is that we drift into the report and then look to continue the trend on the comfort of having known what the Fed had been signaling. Another quite possible scenario would have the FOMC do a 0.25% hike, but the statement and Fed Chair Powell both sound very hawkish to dissuade talk of a “March pause” which has been in the financial news the last couple of days. Personally, I won’t try to predict what will happen by trading one way or the other ahead of the Fed.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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