On Tuesday, markets gapped down at the open.  SPY gapped down 0.44%, DIA gapped down 0.47%, and QQQ gapped down 0.56%. From there, all three major index ETFs slowly rallied to recross their gaps, reaching the highs of the day about 2:05 p.m.  From there, all three pulled back modestly before rallying back toward the highs, only to take profits the last 5 minutes.  This action gave us white-bodied, Spinning Top type candles in all three major index ETFs.  All three retested their T-line (8ema), SPY and QQQ from above and DIA from below…and all three passed that test, closing above.  This happened on below average volume in all three major index ETFs yet again.

On the day, eight of the 10 sectors were in the red with Industrials (-0.91%) out in front, leading the market lower.  On the other side, Consumer Defensive (+0.43%) was well out in front, holding up better than other sectors.  Meanwhile, SPY lost 0.05%, DIA lost 0.01%, and QQQ gained 0.11%.  VXX was just on the red side of flat to close at 51.15 and T2122 dropped again but remains just outside of oversold territory at the bottom of its mid-range at 22.96.  At the same time, 10-Year bond yields rose to close at 4.206% while Oil (WTI) popped 2.38% to close at $72.24 per barrel. So, the Bears gapped the whole market lower, but the Bulls immediately stepped in to buy the dip and slowly bring all three major index ETFs back to flat.

The major economic news scheduled for Tuesday was limited to the API Weekly Crude Oil Stocks report, which showed a larger inventory build than was expected at +1.643 million barrels (compared to a forecasted +0.700 million barrels and the prior week draw down of 1.580 million barrels).

After the close, AGR, EWBC, ENVA, MTDR, PKG, RHI, STX, LRN, TXN, VLRS, and VMI all reported beats on both revenue and earnings. Meanwhile, BKR, CSGP, RRC, PFSI, and WFRD missed on revenue while beating on earnings. However, CNI and NBR missed on both the top and bottom lines.

In stock news, on Tuesday, TGT announced it was lowering the price of 2,000 items ranging from snacks to cold medicine ahead of the holiday season. (The bet is that by lowering the cost of essentials, shoppers will also buy higher-ticket gift items while they are in-store.)  At the same time, Reuters reported that AMZN has imposed severe price caps on what merchants can charge for items in its new low-cost storefront aimed at competing with Temu.  (These include $20 for sofas, but go on to prescribe max prices for 700 items.)  Later Reuters also reported that FIVN is under pressure by a second activist investor (Legion Partners) who is pushing for cost cutting and board seats. At the same time, CG announced it has dropped out of the bidding for the warship unit of German shipbuilder TYEKY (Thyssenkrupp).  Later, AMZN said they were ending same-day delivery service from brick-and-mortar retailers. This ends the program that was touted as “Amazon Today.” The bulk of the deliveries will end by December 2.

Elsewhere, STLA’s Ram brand CEO Feuell told a Reuters event that the company was expanding its Mexican truck plant as a “relief valve” for US factories reaching capacity soon.  (She avoided answering why the company was expanding capacity in Mexico rather than the US, but said the measure “was not a cost-cutting move.”)  At the same time, Reuters also reported that ALTR is exploring a potential sale with potential bidders being competitors PTC and CDNS. Later, WMT announced it will begin delivering prescriptions along with groceries as a single order as quickly as 30 minutes.  (Members of WMT’s $98 membership will get the service for free while non-members will pay $9.95 per delivery.) SJM announced the sale of its Voortman cookie brand to Second Name Brands for $305 million in cash.  After the close, SBUX suspended its annual forecast while the new CEO prepares a turnaround plan.

In AI news, on Tuesday, BLK announced it is tapping into the AI frenzy with two new AI-focused ETFs BAI (iShares AI Innovation and Tech Active) and TEK (iShares Technology Opportunities Active ETF).  Later, Reuters reported that QCOM and GOOGL had signed a partnership to offer chips and software to allow automakers to develop their own AI voice assistants for drivers. At the same time, AMZN-backed AI startup Anthropic announced “AI agents” built to enhance productivity by automating complex tasks.  This is a direct competitor to MSFT’s Co-Pilot-based Agents and yet to be announced offerings from GOOGL and META.

In stock legal and governmental news, on the NHTSA announced HMC 780k vehicles in the US over fuel pump crack concerns.  At the same time, RBLX announced it would open an office in Turkey and hire local-language moderators if the country restores access to its platform.  (A Turkish court blocked RBLX from the country to “ensure protection of our children” in August.)  Later, US Energy Sec. Granholm said the dept. was working as fast as it can to finalize $1.7 billion in EV conversion grants, including $500 million for GM and $585 (two grants for two projects) million for STLA.  At the same time, the FAA finalized comprehensive pilot training and certification rules for flying air taxis such as those from JOBY and ACHR. Later, the SEC approved options listings for three Bitcoin ETFs (not 11 as previously reported).

Elsewhere, the SEC settled fraud charges with shortseller Citron Research associate Left for $1.8 million.  Later, TSM notified the US Commerce Dept. that one of its chips had been found in Huawei’s top-end (widely seen as the most advanced AI smartphone) phone.  This is a violation of US export restrictions, likely through strawman firms who acted as the original buyer of the TSM chips.  After the close, the CDC announced an E, coli outbreak had been linked to MCD quarter pounder burgers that have resulted in one death, 10 hospitalizations, and dozens of illnesses.  (MCD fell 9% in after-hours trading.)  At the same time, a US District Judge ruled in favor of META in a lawsuit over child safety claims due to inadequate disclosures.  Later, WMT agreed to pay $7.5 million to resolve charges of illegally disposing of hazardous medial waste into CA landfills.

In miscellaneous news, on Tuesday, the New York City Comptroller announced a plan to divest NYC pension funds from fossil fuel mid-stream and downstream companies.  Meanwhile, the New York Times reported that JPM CEO Dimon would consider a role in government if Vice President Harris wins the election, but is not making his position known publicly for fear of retribution by her disgraced opponent. Elsewhere, oil-industry analysts pointed out a unique risk factor for CA. The US is by far the world’s largest oil producer (by more than 3 million barrels per day). However, CA has no pipeline access oil from Texas, mid-western, or Ohio Valley oil fields. So, about 60% of CA oil demand is served by oil imports from the Middle East. As a potential Middle East war (and oil flow disruption) lurks ahead of Israeli attacks on Iran, that raises the specter of major cost increases or shortages in CA.  (Even the US Strategic Petroleum Reserve oil if far from CA, located along the TX and LA Gulf Coasts.)  Finally, the IMF said Tuesday that the global battle on post-pandemic inflation is “largely won.”  In an upbeat assessment, the IMF World Economic Outlook said, “In most countries, inflation is now hovering close to central bank targets… The decline in inflation without a global recession is a major achievement.”

In Middle East news, on Tuesday, Israeli attacks in Gaza and Lebanon continued. The IDF seems to be targeting healthcare facilities and homes more. The water supply at the Jabalya refugee camp in Northern Gaza ran out entirely, leaving thousands with no water at all. At the same time, a major Palestinian hospital (the Kamal Adwan Hospital) reported it was completely out of blood and medical supplies as an IDF siege of the facility continues.  Further North, Lebanon reported the most deaths in a single day since the most recent Israeli bombing and invasion campaign began (63 deaths and several hundred wounded).  This included bombing strikes on four Beirut hospital and medic facilities. In addition, several individual ambulances were also blown up.  (All medical facility attacks are war crimes.)  Meanwhile, US Sec. of State Blinken met with Israeli PM Netanyahu for two hours as Blinken tried to get the Israelis to agree to a ceasefire. Sourced, but un attributed, post-meeting reports indicate Israel has rejected the idea of ceasefire again, but will allow more humanitarian aid into Gaza and Lebanon, though not as much as the US and world have demanded. (With Israel completely in control on the battlefield with superior firepower and resources, they want to press their advantage and kill as many of their enemies as possible while they can, regardless of civilian casualties.)

In mortgage news, rates have spiked in recent weeks but remain at 6.52% on average nationally for a 30-year, fixed-rate, conforming loan. Demand for refinance mortgages dropped 8% last week compared to the prior week. Applications for a new home purchase mortgage fell 5%.  Together this meant that total mortgage demand was down 6.7% on the week versus the week prior. 

Overnight, Asian markets were mixed with five of the 12 exchanges in the green.  Thailand (-1.24%) was by far the biggest loser while Hong Kong (+1.27%) was by far the biggest winner.  Meanwhile, in Europe, the bourses are heavily in the red with just two of 14 exchanges showing green at midday.  The CAC (-0.64%), DAX (-0.22%), and FTSE (-0.41%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.47% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.30% open at this hour.  At the same time 10-Year bond yields are up again to 4.228% and Oil (WTI) have dropped 2.15% to $70.20 per barrel in early trading.

The major economic news scheduled Wednesday includes September Existing Home Sales (10 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), and the Fed Beige Book (2 p.m.).  We also hear from Fed Governor Bowman (9 a.m.).  Major earnings reports scheduled for before the open include APH, T, AVY, BA, BSX, CME, KO, CSTM, DB, EVR, GEV, GD, HLT, KBR, LII, LAD, COOP, EDU, NEE, NTRS, ODFL, BPOP, PRG, ROP, TMHC, TDY, TMO, TRU, TNL, UNF, VRT, WAB, WSO, and WGO.  Then, after the close, ALGN, AMP, ASGN, CACI, CP, CLS, CCS, CHDN, CYH, FAF, GL, GGG, ICLR, IBM, KALU, KNX, LRCX, LVS, MAT, MOH, NEM, ORLY, OII, PTEN, PLXS, RJF, ROL, SEIC, NOW, TMUS, TER, TSLA, TYL, URI, VLTO, WCN, WFG, WU, and WHR report.

In economic news later this week, on Thursday, we get September Building Permits, Weekly initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Oct. S&P Global Mfg. PMI, Preliminary Oct. S&P Services PMI, Preliminary Oct. Composite PMI, Sept. New Home Sales, and the Fed Balance Sheet.  Finally, on Friday, Preliminary Sept. Core Durable Goods Orders, Preliminary Sept. Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Sentiment, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Thursday, we hear from ADT, ALLE, AAL, AIT, AMBP, BFH, BC, CRS, CARR, CBRE, DAR, COV, DOW, DTE, EQNR, EEFT, FCFS, FSV, FCN, GTX, HOG, HAS, HON, KDP, KKR, LH, LEA, LTH, LKQ, MSM, NDAQ, NOC, ORI, POOL, RDUS, RS, RCI, R, SPGI, SAH, LUV, TAL, FTI, TECK, TXT, TSCO, TPH, UNP, UPS, VLO, VC, WST, WEX, ATR, AJG, SAM, BYD, COF, CSL, CINF, FIX, DECK, DXCM, DLR, EW, HIG, LHX, MTX, MHK, NOV, OLN, DOC, PFG, RMD, SKX, SSNC, TXRH, TROX, UHS, VALE, WDC, WY, and WKC. Finally, on Friday, AON, AN, AVTR, BAH, CNC, CL, GNTX, HCA, NYCB, NWL, POR, SAIA, and SNY report.

So far this morning, ATLKY, BSX, CME, KO, DB, EVR, HLT, LII, EDU, NTRS, ROP, TMHC, TDY, TRU, VRT, and WAB all reported beats on both the revenue and earnings lines.  Meanwhile, T, AVY, KBR, LAD, LYG, COOP, ODFL, TMO, and TNL missed on revenue while beating on earnings.  On the other side, GEV, NEE, BPOP, and SF beat on revenue while missing on earnings.  However, BA, CSTM, GD, and WGO missed on both the top and bottom lines.

With that background, it looks like the Bears are in charge again early in all three major index ETFs. All three opened the premarket lower and have traded down since then. SPY is retesting its T-line (8ema) from above while DIA is moving away from its own T-line to the downside. With that said, two of the three remain above (barely) their T-line again. So, the broader market short-term trend remains tepidly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator is now back in the lower end of its mid-range. So, markets do have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, eight of the 10 are in the red this morning. MSFT (+0.50%) is holding up best. However, the biggest dog, NVDA (-0.64%) is leading the majority lower in price move on three times as much dollar-volume as the next closest ticker so far this morning.

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 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 gains are 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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Markets opened lower on Monday prior to DIA diverging to the downside.  SPY opened down 0.11%, DIA opened 0.05% lower, and QQQ gapped down 0.22%.  At that point, QQQ rallied sharply to recross the opening gap and reach the high of the day at 10:20 a.m. before selling off sharply again, finding the low of the day at 11:30 a.m.  From there, QQQ slowly rallied slowly back up across the gap before meandering sideways around Friday’s closing level and closing on the plus side.  Meanwhile, after its open, SPY slowly meandered back up across the opening gap to find its high of the day at 10:20 a.m. Then it traded in-sync with QQQ, selling off hard to reach the low of the day at 11:35 a.m. and then slowly drifting higher but never quite getting back to its opening level.  For its part, after the open, DIA immediately sold off sharply until 11:30 a.m. and then traded sideways along the lows the rest of the day. This action gave us divergent daily candles. SPY printed a black-body Doji that retested its T-line (8ema) and passed that test.  DIA gave us a large, black-bodied candle that also retested its T-line and closed just barely above.  Finally, QQQ printed a white-bodied candle (that retested and passed the test of its T-line) that was about half lower wick.  This happened on below average volume in all three major index ETFs.

On the day, nine of the 10 sectors were in the red with Communication Services (-1.25%) out in front, leading the market lower.  On the other side, Technology (+0.16%) was the only sector in the green.  Meanwhile, SPY lost 0.16%, DIA lost 0.76%, and QQQ gained 0.19%.  VXX was just on the plus-side of flat to close at 51.35 and T2122 dropped all the way back into the bottom third of its mid-range to close at 33.14.  At the same time, 10-Year bond yields fell to close at 4.192% while Oil (WTI) climbed 1.68% to close at $70.38 per barrel. So, the Bulls were in-charge pretty much all day on what was also an indecisive day.  NFLX (+11.09%) was among the leaders of this charge after its blowout earnings Thursday evening.  (For the week, SPY gained 0.86%, DIA gain 0.91%, and QQQ gained 0.22%.  This was the sixth-straight week of gains for all three major index ETFs.)

The major economic news scheduled for Monday was limited to the September US Leading Economic Indicators Index, which came in lower than expected at -0.5% (compared to a -0.3% forecast and a -0.3% August reading).

In Fed news, on Monday, Dallas Fed President Logan indicated she sees both more rate cuts and Balance Sheet shrinkage ahead. She said, “The economy is strong and stable, but, meaningful uncertainties remain in the outlook.” Logan continued, “If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our goals.” Regarding Quantitative Tightening, she said, “At present, liquidity appears to be more than ample” … “one sign liquidity remains in abundant supply, and not merely ample, is that money market rates continue to generally run well below the Fed’s interest on reserve balances rate.”  She went on to say that the FOMC should be able to tolerate normal, temporary volatility in the money markets. However, she went on to say that, “reducing the (reverse repo) interest rate could incentivize participants to return funds to private markets.”  However, Logan concluded by saying that getting mortgage bonds off the Fed Balance Sheet is “not a near-term issue in my view.” (i.e. not a massive priority).

Later, Minneapolis Fed President Kashkari said he also expects modest rate cuts ahead.  Kashkari said, “Right now I see modest cuts over the next several quarters.”  However, he also indicated that a weakening of the labor market might need to be met with stronger cuts.  He said, “If we saw a weakening, like real evidence that the labor market is weakening quickly, then that would tell me, as one policymaker, ‘Hey, maybe we ought to bring down our interest rate more quickly than I currently expect,’” Kashkari continued, “We want to keep the labor market strong and we want to get inflation back down to our 2% target.”  He then concluded with the normal Fed boiler plate statement that “interest rates will depend on the data.”  Elsewhere, Kansas City Fed President Schmid said that he supports “a cautious and deliberate” approach to rate cuts.  Schmid said, “While I support dialing back the restrictiveness of policy, my preference would be to avoid outsized moves, especially given uncertainty over the eventual destination of policy and my desire to avoid contributing to financial market volatility.” He continued, “Lowering rates in a gradual fashion would provide time to observe the economy’s reaction to our interest rate adjustments and give us the space to assess at what level interest rates are neither restricting nor boosting the economy.”  Finally, San Francisco Fed President Daly said Monday that she has not seen anything to suggest the FOMC would stop cutting interest rates.  She said interest rates are “absolutely still high enough that they are restraining the economy.”

After the close, BOKF, CADE, NUE, SAP, and ZION all reported beats on both the revenue and earnings lines. Meanwhile, AGNC, ARE, SIGI, and WTFC beat on the revenue line while missing on earnings.  On the other side, MEDP and WRB missed on revenue while beating on earnings.  However, TFII missed on both the top and bottom lines.

In stock news, on Monday, RCDOF announced it plans to divest its Defense business in order to focus on Environmental Consulting.  (No details were announced, but they recently got a $385 million US Army contract extension that runs through 2027.) Later, XLMDF announced it has a conditional agreement to sell its North American business to SRAD for $30 million in cash ($20 million up front and up to $10 million based on unit performance). At the same time, SNY said it has entered exclusive talks to sell a 50% controlling stake in its consumer health unit to private equity firm Clayton Dubilier & Rice. (The unit had been valued at $17 billion earlier this year.)

Meanwhile, UBS announced it agreed to a deal to sell a 50% stake in the Swisscard business acquired in the CS acquisition to AXP.  (The terms of the deal were not disclosed.) At the same time, DIS announced it will appoint former MS CEO Gorman as the new DIS Chairman in as of January. Later, SAN announced it has launched a digital bank in the US to help it fund over $30 billion in auto lending and broaden its retail banking reach in the US market.  At the same time, shipping giant AMKAF (Maersk Moeller) raised its profit outlook on what it called a “strong shipping market.”  Later, according to the Wall Street Journal, activist investor JCP Investment Mgmt., which has a 2% stake in the company, has issued a letter urging CAKE to spinoff three of its smaller brands (North Italia, Flower Child, and Culinary Dropouts).

In AI news, LUMN announced a strategic partnership with META aimed at increasing network capacity to support the META AI infrastructure. Later, HON announce it had signed a deal with GOOGL to bring the latter’s AI technology to the industrial data market.  At the same time, IBM announced it launched a new AI model called Granite 3.0. (The model is open source, but IBM sells a paid version to be run on enterprise data centers.) Later, MSFT announced they will allow customers to build autonomous artificial intelligence agents using its Copilot Studio application starting in November.  (This is a move to compete with CRM, which is already offering such AI agents for particular business tasks.) At the same time, QCOM announced that it is bringing chips designed for laptop CPUs to its mobile phone offerings. (The idea is to make phone processing more powerful to support AI.)  Meanwhile, MEAT announced a batch of AI models, including one specifically created to check the quality of other AI models.

In stock legal and governmental news, on Monday, Nigeria blocked the SHEL sale of its entire Nigerian onshore and shallow-water operations for $2.4 billion.  However, at the same time, Nigeria approved a similar deal for the sale of XOM’s operations for $1.28 billion.  At the same time, the High Court of London ruled that BHP is “cynically trying to avoid responsibility” for Brazil’s worst environmental disaster (which came after a dam holding BHP mining waste collapsed).  This came as the $47 billion lawsuit began its final phase with 600k Brazilians, 46 local governments, and about 2k Brazilian companies as the plaintiffs. (BHP had argued the case should be thrown out because it had paid almost $8 billion to everyone effected in Brazil.) 

Elsewhere, LLY filed suit against three more medical spas (online vendors) of products that claim to contain the main ingredient of its popular Zepbound weight-loss medicine.  At the same time, investment advisor WisdomTree Asset Mgmt. agreed to pay $4 million to settle SEC charges of misleading marketing of three funds (greenwashing).  Later, movie studio Alcon Entertainment sued TSLA and WBD, alleging the defendants used images from the file “Blade Runner 2049” in the promotion of TSLA’s new cycbercab. Meanwhile, a bipartisan group of dozens of Congressmen (52 in total) urged the White house to toughen the sanctions on Russia and specifically questioned sanction exceptions for oilfield services firm SLB.

In miscellaneous news, on Monday, South Korea and Ukrainian intelligence services confirmed North Korea has sent 10k troops to fight on behalf of Russia.  This includes some North Korean special forces troops.  Elsewhere, the disgraced ex-President continued to spread lies and long-debunked conspiracy claims about FEMA hurricane relief efforts at campaign events in NC on Monday.  (Once again, FEMA and NC officials had to try to correct the serial-liar’s spew in hope people will not forgo (and as was recently seen) even hinder the recovery.)  Meanwhile, his opponent, Vice President Harris, called for an unspecified increase to federal minimum wage levels in campaign events in PA, MI, and WI.  The events held alongside several Republican supporters (like former Congresswoman Liz Cheney), who support Harris but did not comment on Harris’ minimum wage call. At the same time, the FTC rule banning fake online reviews went into effect Monday. (The rules allow the agency to issue penalties of up to $51,744 per violation for knowing violations of the rule.)  Finally, Germany’s six-month trial with a four-day workweek has ended.  However, Bloomberg reports that many of the 45 businesses that participated in the experiment will not go back.  (73% of the participating companies said they were prepared to either extend the experiment or make the change permanent.)

In Middle East news, on Monday, Israel continued its attacks on both Gaza and Lebanon.  In the latter, Israel said it had bombed 32 targets ranging from the North of the country to the South.  However, the largest batch of Israeli bombing strikes was in Beirut where numerous buildings were collapsed.  This included the headquarters of what Israel (and the US) called Hezbollah’s bank (Al-Qard Al-Hassan, which translates to “benevolent loan”) which Israel also designated as a “terrorist organization.”  (It is worth noting that while the bank has links to Hezbollah, it also is involved in Lebanese government, NGO/charity, and civilian banking.)  Meanwhile, US intelligence services said they were investigating online leaks of US surveillance data showing preparations for Israel’s retaliatory strike on Iran.  (The leaked information included satellite images and written materials showing Israel is preparing long-range missiles and drone attacks.  The information also said Israel would not use a nuclear weapon.  The latter had not even been part of public discussion given there were no casualties and limited damage from Iran’s missiles and those were in response for Israeli bombings in Iran.)

Overnight, Asian markets were mostly in the red with just the three Chinese exchanges in the green.  Japan (-1.39%), India (-1.25%), and Thailand (-1.24%) paced the losses.  In Europe, with the lone exception of Oslo (+0.37%) we see red across the board at midday.  The CAC (-0.76%), DAX (-0.35%), and FTSE (-0.75%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a second straight down open.  The DIA implies a -0.44% open, the SPY is implying a -0.45% open, and the QQQ implies a -0.51% open at this hour.  At the same time, 10-Year bond yields have hit 4.20% while Oil (WTI) popped another 0.94% to $71.22 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to the API Weekly Crude Oil Stocks report (4:30 p.m.).  We also hear from Fed member Harker (10 a.m.).  Major earnings reports scheduled for before the open include MMM, AOS, DHR, FI, FCX, GE, GM, GPC, HRI, IPG, IVZ, KMB, LMT, MCO, NSC, PCAR, PNR, PM, PII, PHM, DGX, RTX, SHW, and VZ.  Then, after the close, AGR, BKR, CNI, CSGP, EWBC, ENVA, MTDR, NBR, PKG, PFSI, RRC, RHI, STX, LRN, TXN, VMI, VLRS, and WFRD report.

In economic news later this week, on Wednesday, September Existing Home Sales, EIA Weekly Crude Oil Inventories, and the Fed Beige Book.  We also hear from Fed Governor Bowman.  On Thursday, we get September Building Permits, Weekly initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Oct. S&P Global Mfg. PMI, Preliminary Oct. S&P Services PMI, Preliminary Oct. Composite PMI, Sept. New Home Sales, and the Fed Balance Sheet.  Finally, on Friday, Preliminary Sept. Core Durable Goods Orders, Preliminary Sept. Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Sentiment, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Wednesday, APH, T, AVY, BA, BSX, CME, KO, CSTM, DB, EVR, GEV, GD, HLT, KBR, LII, LAD, COOP, EDU, NEE, NTRS, ODFL, BPOP, PRG, ROP, TMHC, TDY, TMO, TRU, TNL, UNF, VRT, WAB, WSO, WGO, ALGN, AMP, ASGN, CACI, CP, CLS, CCS, CHDN, CYH, FAF, GL, GGG, ICLR, IBM, KALU, KNX, LRCX, LVS, MAT, MOH, NEM, ORLY, OII, PTEN, PLXS, RJF, ROL, SEIC, NOW, TMUS, TER, TSLA, TYL, URI, VLTO, WCN, WFG, WU, and WHR report.  On Thursday, we hear from ADT, ALLE, AAL, AIT, AMBP, BFH, BC, CRS, CARR, CBRE, DAR, COV, DOW, DTE, EQNR, EEFT, FCFS, FSV, FCN, GTX, HOG, HAS, HON, KDP, KKR, LH, LEA, LTH, LKQ, MSM, NDAQ, NOC, ORI, POOL, RDUS, RS, RCI, R, SPGI, SAH, LUV, TAL, FTI, TECK, TXT, TSCO, TPH, UNP, UPS, VLO, VC, WST, WEX, ATR, AJG, SAM, BYD, COF, CSL, CINF, FIX, DECK, DXCM, DLR, EW, HIG, LHX, MTX, MHK, NOV, OLN, DOC, PFG, RMD, SKX, SSNC, TXRH, TROX, UHS, VALE, WDC, WY, and WKC. Finally, on Friday, AON, AN, AVTR, BAH, CNC, CL, GNTX, HCA, NYCB, NWL, POR, SAIA, and SNY report.

So far this morning, MMM, BKU, DHR, FI, GE, GM, IPG, IVZ, MCO, PNR, PHM, DGX, and RTX all reported beats on both the revenue and earnings lines.  At the same time, AOS, KMB, PM, and VZ all missed on revenue while beating on earnings.  On the other side, HRI beat on revenue while missing on earnings.  However, GPC, PII, and SHW missed on both the top and bottom lines.

With that background, it looks like the Bears are in charge again early in all three major index ETFs. SPY and QQQ are again retesting their T-line (8ema) while DIA gapped down through its 8ema. All three are also mostly black body with a lower wick at this point. With that said, two of the three remain above their T-line with the third gapping below. So, the short-term trend remains modestly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator is now back in the lower half of its mid-range. So, markets have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, nine of the 10 are in the red this morning. TSLA (-0.70%) leads on price move lower. The biggest dog, NVDA (+0.19%) is the only green member of the big dogs and has treaded 4.5 times as much dollar-volume as the next closest ticker so far this morning. (For what its worth, this has been typical of bullish days this year.)

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 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 gains are 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 Friday, markets again diverged at the open, but then got back in-sync. SPY gapped up 0.30%, DIA opened 0.02% lower, and QQQ gapped up 0.52%. After that open, SPY and QQQ chopped along sideways above that opening level and closed in the green. Meanwhile, after the flat open, DIA immediately traded sharply lower for 25 minutes. At that point, it started a steady bullish trend that brought it back above the prior close by 12:30 p.m. before joining SPY and QQQ in a sideways chop just into positive territory. This action gave us indecisive, white-bodied, Doji or small-body Spinning Top candle in all three major index ETFs.  SPY and QQQ were both Bullish Harami candles.  DIA also printed a new all-time high and both SPY and DIA closed at new all-time high closes.  This all happened on below-average volume in all three major index ETFs.

On the day, nine of the 10 sectors were in the green with Basic Materials (+0.84%) and Consumer Cyclical (+0.82%) out in front, leading the market higher.  On the other side, Energy (-0.40%) was the only sector in the red.  Meanwhile, SPY gained 0.38%, DIA gained 0.04%, and QQQ gained 0.66%.  VXX fell 2.36% to close at 51.21 and T2122 climbed a bit further, but remains in the bottom half of its overbought territory to close at 83.90.  At the same time, 10-Year bond yields fell to close at 4.079% while Oil (WTI) dropped 1.87% to close at $69.34 per barrel. So, the Bulls were in-charge pretty much all day on what was also an indecisive day.  NFLX (+11.09%) was among the leaders of this charge after its blowout earnings Thursday evening.  (For the week, SPY gained 0.86%, DIA gain 0.91%, and QQQ gained 0.22%.  This was the sixth-straight week of gains for all three major index ETFs.)

The major economic news scheduled for Friday was limited to Preliminary September Building Permits came in lower than expected at 1.428 million (compared to a forecast of 1.450 million and the August 1.470 million value). At the same time, Preliminary September Housing Starts were a little better than predicted at 1.354 million (versus a forecast of 1.350 million but down from August’s 1.361 million reading).  This was a decrease of 0.5% month-on-month. 

In Fed news, on Friday, Atlanta Fed President Bostic made the case for the FOMC being patient in its rate reductions.  Bostic said, “I’m not in a rush to get to neutral.” He continued, “I don’t want us to get to a place where inflation stalls out because we haven’t been restrictive for long enough, so I’m going to be patient.”  Bostic went on to say, “If the economy continues to evolve as it does — if inflation continues to fall, labor markets remain robust, and we still see positive production — we will be able to continue on the path back to neutral.”  He also said that he is expecting inflation (which is currently at 2.2% according to the Fed’s preferred measure) to get back to 2% by the end of 2025.  That being his belief, he said “that should be sort of the timetable for when we should get to neutral.” All this said, Bostic said he expects the Fed to deliver two quarter point cuts in the last two FOMC meetings of the year.  For what it’s worth, Bostic also said he has never expected a US recession, saying “I’ve always felt that there was enough momentum in this economy to absorb the restrictiveness of our policy and drive inflation back down to its 2% target. I’m grateful that that’s been playing out so well.”

In stock news, on Friday, the Wall Street Journal reported that activist investor Jana Partners (which has a 5% stake) is planning to pressure LW to explore a potential sale of the $10 billion French fry maker.  At the same time, USM announced it has agreed to sell some specific spectrum licenses to VZ for $1 billion.  Later, Reuters reported that the board of Japan’s Fuji Soft had agreed to continue to support a $3.72 billion buyout by KKR (despite having received a higher offer from BCSF).  At the same time, CNBC reported that STLA will close and sell its large vehicle testing facility in AZ by the end of the year. (The 4,000-acre facility was bought from F for $35 million in 2007.)  There are only 41 employees at the facility.  At the same time, SPR announced it was furloughing 700 workers for 21 days due to the ongoing strike at BA, which has eaten up their cash reserves and space for storing inventory ready for delivery to BA. 

Elsewhere, Reuters reported that SAVE reached an agreement with its credit card processor to extend its debt refinancing deadline two months to December 23.  At the same time, Bloomberg reported that CI has resumed merger talks with rival HUM. (The companies had abandoned those discussions in late 2023.) Meanwhile, Reuters reported that the union representing striking BA workers said it is again engaged negotiations with the company, with Acting Labor Sec. Su performing as the intermediary.  This is the first resumption of discussions since BA withdrew its last proposal and walked away from negotiations 10 days prior. Later, Reuters reported that T ratified agreements with the CWA union.  The contracts cover 23k employees across the Southeast and West of the US.  On Saturday, BA and the Machinists Union announced they had reached a tentative deal and the 33k striking union workers will vote on a package including a 35% raise over four years, a $7k signing bonus, and higher 401k company contributions.

In stock legal and governmental news, on Friday, Reuters reported that “Big Tobacco” (PM, BTI, and JAPAF) are close to a $23.6 billion settlement of a long-running lawsuit in Canada.  (The suit, which the companies lost, alleged they had known of the cancer caused by smoking since the 1950s, but had hidden that fact and continued to market their products as safe.)   If approved by the court, the mediator proposed settlement would be the largest of its kind outside the US.  Later, the FDA placed a “partial hold” on a Phase 3 clinical trial of a BNTX lung cancer drug.  (The hold was due to “varying results” between different populations in the trial.)  At the same time, after consultation with the FDA, GILD announced it was voluntarily withdrawing its bladder cancer drug Trodelvy after the drug failed to meet the main goal of a trial. Later, the NHTSA verified news reports from Thursday, announcing it was investigating 2.4 million TSLA vehicles equipped with “Full Self-Driving” after four more reported collisions, including another fatality. 

Elsewhere, the FAA announced it will open a new safety review into BA as the result of an in-flight emergency in January.  (The probe is expected to take three months to complete.)  Later, the US State Dept. approved the sale of $360 million of RTX-made tactical missiles to Japan.  At the same time, a MA judge rejected a motion by META.  He ruled that META must face a lawsuit alleging the company purposefully deployed features designed to addict children and deceived the public about the mental health dangers of its social media platform to teenagers.  Later, a federal judge in CA granted GOOGL’s request to temporarily pause his order directing the company to overhaul its Android app store (Google Play Store) to give consumers more choice over how they download and pay for apps. The delay will allow time for the 9^th US Circuit Court of Appeals to consider GOOGL’s request for appeal.  At the same time, the SEC granted “accelerated approval” to 11 ETFs to list and trade options tied to the spot price of Bitcoin.  The ETFs will trade on the NYSE.  Meanwhile, a federal jury in Ca ruled WDC must pay $315.7 million for patent infringement to private company SPEX Technologies.

In miscellaneous news, on Friday, GS released a report indicating that last week saw hedge funds buying tech stocks (chips and chipmaking equipment) at the fastest pace in five months. (GS is privy to this data since its Prime brokerage service is a primary services provider to hedge funds.) GS said this was the third straight week hedge funds were net buyers of these stocks.  Elsewhere, Chinese dronemaker DJI filed suit against the US Dept. of Defense, challenging its listing as a company working with the Chinese military (subject to import restrictions).  Meanwhile, CNBC reported Friday that Port of Los Angeles (the country’s fifth-largest port) is now experiencing the largest rail delays in more than two years. (Rail delays means the railroads are unable to keep up with the volume of inbound containers.  So, they containers stack up at the port.) The primary causes cited were increased volumes from shipping that was rerouted to LA when East Coast and Gulf Coast ports were expected to be striking, increased traffic from ships that had to avoid the Red Sea and Suez Canal, and increased volumes from holiday merchandise.  As of now, containers are waiting an average of nine days to leave the port via rail after unloading from ships.

In Middle East news, on Friday, following an investigation, the UN accused Israeli settlers from killing civilians and cutting down Palestinian olive groves in the occupied West Bank.  The Humanitarian Office of the UN called the 32 attacks “war-like” tactics. (Israel said it has suspended the officer in charge of the IDF in that area, pending its own internal investigation into allowing illegal settlers to commit violence under the protection of IDF forces.) On Saturday, Hezbollah fired 20 more rocket salvos into the north of Israel with IDF saying they were intercepted. Hezbollah also launched a single drone attack on PM Netanyahu’s “holiday home” (although the PM was not at that location). In retaliation, Israel pounded Beirut and Southern Lebanon as well as the Bekaa Valley (50 miles north of Beirut).  This included bombings of the Lebanese Christian-majority town of Jounieh. Meanwhile, Israeli attacks in Gaza killed at least another 35 people and IDF forces laid siege to three Gaza hospitals.  Israel also dropped leaflets saying Hamas would no longer be allowed to rule Gaza. On Sunday, Israel bombed a refugee building in Northern Gaza, kill another 100.  Then Sunday night and early Monday, Israeli PM Netanyahu called a meeting of his top aides to discuss their next strike on Iran. For now, the oil markets still seem as much concerned with Chinese demand concerns more than disruption to Middle Eastern oil supplies. However, the preparations for Israel’s strike on Iran may change that balance.

Overnight, Asian markets were mixed with six green and six red exchanges. Shenzhen (+1.09%) led the gainers while Hong Kong (-1.57%) paced the losses.  In Europe, the picture is much more or a red hue with 13 of the 14 bourses below break-even at midday.  The CAC (-0.95%), DAX (-0.95%), and FTSE (-0.25%) lead the region lower in early afternoon trade.  In the US, as of 7:40 a.m., Futures are pointing toward a down start to the week.  The DIA implies a -0.22% open, the SPY is implying a -0.34% open, and the QQQ implies a -0.60% open at this hour.  At the same time, 10-Year bond yields have spiked to 4.136% and Oil (WTI) is up 2.17% to $70.72 per barrel in early trading.

The major economic news scheduled for Monday is limited to September US Leading Economic Indicators Index (10 a.m.).  We also hear from Fed members Kashkari (1 p.m.) and Daly (5:40 p.m.). The major earnings reports scheduled for before the open are limited to KSPI and LU. Then, after the close, ARE, BOKF, LOGI, MEDP, NUE, SAP, SIGI, TFII, WRB, WTFC, and ZION report.

In economic news later this week, on Tuesday we get API Weekly Cride Oil Stocks. We also hear from Fed member Harker.  Then Wednesday, September Existing Home Sales, EIA Weekly Crude Oil Inventories, and the Fed Beige Book.  We also hear from Fed Governor Bowman.  On Thursday, we get September Building Permits, Weekly initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Oct. S&P Global Mfg. PMI, Preliminary Oct. S&P Services PMI, Preliminary Oct. Composite PMI, Sept. New Home Sales, and the Fed Balance Sheet.  Finally, on Friday, Preliminary Sept. Core Durable Goods Orders, Preliminary Sept. Durable Goods, Michigan Consumer Sentiment, Michigan Consumer Sentiment, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Tuesday, we hear from MMM, AOS, DHR, FI, FCX, GE, GM, GPC, HRI, IPG, IVZ, KMB, LMT, MCO, NSC, PCAR, PNR, PM, PII, PHM, DGX, RTX, SHW, VZ, AGR, BKR, CNI, CSGP, EWBC, ENVA, MTDR, NBR, PKG, PFSI, RRC, RHI, STX, LRN, TXN, VMI, VLRS, and WFRD.  Then Wednesday, APH, T, AVY, BA, BSX, CME, KO, CSTM, DB, EVR, GEV, GD, HLT, KBR, LII, LAD, COOP, EDU, NEE, NTRS, ODFL, BPOP, PRG, ROP, TMHC, TDY, TMO, TRU, TNL, UNF, VRT, WAB, WSO, WGO, ALGN, AMP, ASGN, CACI, CP, CLS, CCS, CHDN, CYH, FAF, GL, GGG, ICLR, IBM, KALU, KNX, LRCX, LVS, MAT, MOH, NEM, ORLY, OII, PTEN, PLXS, RJF, ROL, SEIC, NOW, TMUS, TER, TSLA, TYL, URI, VLTO, WCN, WFG, WU, and WHR report.  On Thursday, we hear from ADT, ALLE, AAL, AIT, AMBP, BFH, BC, CRS, CARR, CBRE, DAR, COV, DOW, DTE, EQNR, EEFT, FCFS, FSV, FCN, GTX, HOG, HAS, HON, KDP, KKR, LH, LEA, LTH, LKQ, MSM, NDAQ, NOC, ORI, POOL, RDUS, RS, RCI, R, SPGI, SAH, LUV, TAL, FTI, TECK, TXT, TSCO, TPH, UNP, UPS, VLO, VC, WST, WEX, ATR, AJG, SAM, BYD, COF, CSL, CINF, FIX, DECK, DXCM, DLR, EW, HIG, LHX, MTX, MHK, NOV, OLN, DOC, PFG, RMD, SKX, SSNC, TXRH, TROX, UHS, VALE, WDC, WY, and WKC. Finally, on Friday, AON, AN, AVTR, BAH, CNC, CL, GNTX, HCA, NYCB, NWL, POR, SAIA, and SNY report.

So far this morning, SDVKY beat on both the revenue and earnings lines. Meanwhile, LU missed on revenue while coming in in-line on earnings.

With that background, it looks like the Bears are in charge early in all three major index ETFs. QQQ gapped a bit lower while SPY and DIA opened roughly flat in the premarket. However, all three have sold off since that point and are printing larger black-body candles in the early session. QQQ is retesting its T-line (8ema) from above. Two of the three remain above their T-line (8ema) with the third testing a rising 8ema. So, the short-term trend remains modestly bullish. The mid-term and longer-term trends are also strongly Bullish in all three. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). However, the T2122 indicator is still inside the lower edge of its overbought territory. So, markets have room to run either direction, but the Bears have more slack to work with again today. With regard to those 10 big dog tickers, all 10 are in the red this morning. TSLA (-1.23%) leads on price move lower. The biggest dog, NVDA (-0.64%) has traded a bit more than twice the next closest ticker in terms of dollar-volume traded.

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 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 gains are 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 and then ground on Thursday.  SPY gapped 0.64% higher, DIA gapped up 0.41%, and QQQ gapped up 1.11% at the open.  From there, SPY and QQQ sold off until just after 11 a.m., recross the opening gap in SPY and recrossing 85% of its gap by then.  At that point, those two major index ETFs ground sideways inside the gap.  For its part, DIA chopped sideways along its open all day.  This action gave us gap-up, black-bodied candles in all three major index ETFs.  The SPY and QQQ printed large, black, Marubozu candles that ended the day little-changed from Wednesday.  Meanwhile, DIA gave us a gap-up, black-bodied, Doji type candle that also printed a new all-time high and closed at a new all-time high close. This all happened on below-average volume in the SPY and QQQ as well as slightly above-average volume in DIA.

On the day, five of the 10 sectors were in the green and the other half in the red with Utilities (-0.90%) well out in front leading the losers lower.  At the same time, on the other side, Financial Services (+0.40%) led a more tightly-grouped pack of gainers. Meanwhile, SPY gained 0.01%, DIA gained 0.40%, and QQQ gained 0.07%. VXX fell 1.65% to close at 52.45 and T2122 dropped back to just inside the bottom edge of its overbought territory to close at 80.72.  At the same time, 10-Year bond yields spiked again to close at 4.098% while Oil (WTI) gained 0.45% to close at $70.71 per barrel.   So, the Bulls gapped markets higher on strong earnings and raised guidance from the world’s largest chipmaker, TSM (+9.77%), which had countered the previous day’s fear over that crucial sector sewn by ASML (+2.50%).

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which were down as expected at 241k (compared to a 241k forecast and the prior week’s 260k number).  In terms of on-going claims, Weekly Continuing Jobless Claims were up, but not as much as feared at 1,867k (versus a 1,870k forecast and the prior week’s 1,858k reading).  At the same time, September Core Retail Sales were much stronger than expected at +0.5% (compared to a +0.1% forecast and August’s +0.2% value).  On the manufacturing front, the Philly Fed Mfg. Index was also much stronger than predicted at 10.3 (versus a 4.2 forecast and well up from September’s 1.7 reading).  This was done with less labor as the Philly Fed Mfg. Employment Index was down to -2.2 (compared to a September value of 10.7).  At the same time, the September Retail Sales (month-on-month) were up to +0.4% (versus the +0.3% forecast and well above August’s +0.1% value). Later, September Industrial Production fell 0.3% (compared to a projected fall of 0.1% and well below August’s 0.3% climb).  Later, August Business Inventories remained steady at 0.3% (versus a forecast and July reading of 0.3%).  However, August Retail Inventories climbed a tick to 0.5% (compared to a forecast and July value of 0.4%).  Later, the Weekly EIA Crude Oil Inventories showed a drawdown of 2.191 million barrels (versus a forecasted inventory build of 1.800 million barrels and the previous week’s 5.810-million-barrel build).  At the close, the TIC Net Long-Term Transactions for August showed a decline to $111.40 billion (compared to the July $137.90 billion value).  Then, after the close, the Fed Balance Sheet showed another reduction for the week at $7.039 trillion (versus last week’s $7.047 trillion).

In other news, on Thursday the Treasury Dept. released data that showed foreign holdings of US Treasury bonds surged to an all-time high in August after four straight months of increases.  The Treasury reported that foreigners owned $8.503 trillion US bonds in August, up 11.5% from one year earlier.  Japan remained the largest foreign holder of bonds at $1.129 trillion while China’s holdings fell to $774.6 billion.

After the close, OZK, CCK, ISRG, and NFLX all reported beats on both the revenue and earnings lines.  Meanwhile, WAL beat on revenue while missing on earnings.  However, WDFC missed on both the top and bottom lines. 

In stock news, on Thursday SBGSY announced it had acquired controlling interest in private firm Motivair for $850 million. (Motivair makes liquid cooling technologies for data centers.)  At the same time, the Financial Time reported that UBER has explored the idea of making a $20 billion offer to acquire EXPE.  Later, NBRNF was acquired by private firm Bidco for $248.5 million.  At the same time, META announced it partnered with private studio Blumhouse Productions to test its generative AI for video creation. At the same time, AMZN announced it was dipping a toe into the news market for Prime Video as it has hired NBC anchor Brian Williams to lead its coverage of the US election day.  (This is noteworthy because Prime already offers a number of news channels such as CMCSA’s NBC, DIS’s ABC, and CNN.)   Later, Reuters reported that BP is considering selling a minority stake in its offshore wind business. (This is reportedly another move by CEO Auchincloss to reduce the company’s renewables exposure as he was brought in to refocus on fossil fuels.) 

Elsewhere, TSLA tried to rebound from the embarrassment of last week’s Optimus robot prototype show (which was later acknowledged to just be radio-controlled robots).  Thursday, TSLA released a less than 90 second video (with numerous jump cuts) purporting to show an Optimus prototype navigating by itself on a simulated simplistic factory environment. Later, ZUO announced it had agreed to be acquired by the Singapore Wealth Fund and buyout form Silver Lake in a deal valued at $1.7 billion ($10/share).  At the same time, PPG announced it will lay off 1,800 employees across the US and Europe as well as close some plants.  PPG said this was part of reducing structural costs in Europe.  Meanwhile, the Financial Times reported that META has fired around two dozen employees from its Los Angeles office for misusing their company meal allowances for items like laundry detergent and acne treatment pads.

In stock legal and governmental news, on Thursday the Federal Energy Regulatory Commission (FERC) issued an order allowing LNG to move liquified natural gas from its Corpus Christi storage facilities onto tankers. (Having cleared this key hurdle, LNG expects to have the plant producing export gas by year end.)  Later, and somewhat oddly, GM announced it “fully supports” the Mexican government’s plans to strengthen supply chains by bringing production to Mexico rather than importing components.  GM did not comment when asked to comment on speculation about its future plans in Mexico.  At the same time, the FCC proposed a $147k fine for DIS’s ESPN network for violating broadcast rules by broadcasting emergency alert tones during promotional segments in the 2023-2024 NBA basketball season.  Later, two consumer groups and two labor unions urged the FCC to block the acquisition of CTLC by NVO in a $16.5 billion deal.  (The groups claim that deal would threaten competition in the weight loss drugs and cutting-edge gene therapies markets.) 

Elsewhere, the US Dept. of Energy approved a total of nearly $3 billion in conditional loan guarantees for two sustainable aviation fuel projects from CLMT and GEVO.  Later, Reuters reported exclusively that President Biden had directed the Commerce Dept., Dept. of Defense, and State Dept. will ease export restrictions on some satellite and spacecraft-related products to US allies.  This includes technologies made by LMT, LHX, and BA.  At the same time, a suit has been filed against ADM alleging the company failed to maintain and test safety systems on grain equipment for years, resulting in an explosion and the immolation of a worker last year.  Later, the FTC has opened an investigation into DE over the company’s repair policies and restrictions the company puts on hardware and software to prevent customers from repairing their purchased products.  (DE already faces antitrust lawsuits over the same issue in multiple states.)

In miscellaneous news, NOAA released an updated forecast calling for a warmer and drier-than-normal winter in the south and central Great Plains.  This effect of La Nina is expected to worsen the drought across the plains, hitting the US’s top wheat-producing area and impacting wheat yields.  (52% of US wheat-producing areas are currently in a drought condition, compared to 44% just two weeks ago.)  However, a wetter than normal condition is forecast for the Great Lakes and Ohio River Valley regions this winter.  Elsewhere, the CA state Dept. of Food and Ag reported that cattle are dying from bird flu as they are being stressed by heat (at least six days of 95-plus-degree temperatures so far in October).  CA reported that herds are now seeing 15%-20% mortality rates (compared to 2% in other states).

In Middle East news, on Thursday, Israeli attacks in Gaza and Lebanon continued. The Israeli government also confirmed that it had, in fact, killed the Hamas military leader Yahya Sinwar on Wednesday.  (An IDF unit was operating in Gaza when it stumbled into a 3-man Hamas ground unit. In the firefight that resulted, Israel killed the other two Hamas militants and seeing the severely injured Sinwar was still alive, fired another tank shell, which killed him. After the attack, they recognized Sinwar and collected his body for identification.  He was identified by dental records, which Israel had because he had previously spent 23 years in Israeli prison before being released in a prisoner exchange in 2011.) Sinwar had been the subject or a ton of intelligence work and targeted attacks for over a year and had always been thought to be in tunnels hiding with hostages.  However, it turns out he had actually been fighting as a regular Hamas fighter all along.  While many hope this offers an opportunity to end the Israeli bombing and invasion of Gaza, Israeli PM Netanyahu said the fighting will continue. In addition, Hamas has already named a replacement for Sinwar. Elsewhere, the US confirmed B2 bombing of five weapon storage targets in areas controlled by Houthi rebels in Yemen.

Overnight, Asian markets were mostly green with just three of 12 exchanges below break-even.  Shenzhen (+4.71%), Hong Kong (+3.61%), Shanghai (+2.91%), and Taiwan (+1.88%) paced the gains.  Australian (-0.87%) and South Korea (-0.59%) led the losses.  In Europe, we see a more mixed picture with five of 14 bourses in the red at midday.  The CAC (+0.58%), DAX (+0.29%), and FTSE (-0.27%) lead the region and are typical of the early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed but generally green start to the day.  The DIA implies a -0.05% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.49% open at this hour.  At the same time, 10-Year bond yields are up to 4.108% and Oil (WTI) is down four-tenths of a percent to $70.40 per barrel in early trading.

The major economic news scheduled for Friday is limited to Preliminary September Building Permits and Preliminary September Housing Starts (both at 8:30 a.m.).  We also hear from Fed member Bostic (9:30 a.m.), Fed member Kashkari (10 a.m.), Fed Governor Waller (12:10 p.m.), and Fed member Bostic again (12:30 p.m.).  The major earnings reports scheduled for before the open include ALLY, AXP, ALV, CMA, FITB, PG, RF, and SLB.  Then, after the close, there are not reports scheduled.

So far this morning, VLVLY (Volvo), ALLY, CMA, FITB, and RF all reported beats on both the revenue and earnings lines.  Meanwhile, AXP, PG, and SLB missed on revenue while beating on earnings. However, ALV missed on both the top and bottom lines.

In late-breaking news, GOOGL announced they had replaced the head of their search and ads unit leader (Raghaven) with longtime Google employee Nick Fox.  GOOGL’s statement said that Raghaven will move to the role of Chief Technologist.  (It was unclear if this was a new position or if he was replacing someone else.)  Elsewhere, CVS replaced their CEO Lynch with longtime executive David Joyner, effective immediately.  Meanwhile, the Chinese rally may be explained by its release of “better-than-expected” GDP growth of 4.6% year-on-year for Q3, where the consensus analyst estimate had been 4.5%. (Still, this was still the slowest growth in six quarters.) The tell may be that Beijing almost immediately announced new stimulus that propped up the Chinese markets.

With that background, it looks like the Bulls are in charge again in the SPY and QQQ as they both gapped higher to start the premarket and have followed-through with white-body candles. For its part, DIA is down a bit after opening the early session higher and then trading indecisively but lower. All three remain above their T-line (8ema). So, the short-term trend remains bullish. The mid-term and longer-term trends are also strongly Bullish in all three. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). However, the T2122 indicator is still at the lower edge of its overbought territory. So, markets have room to run either direction, but the Bears have more slack to work with again today. With regard to those 10 big dog tickers, nine of the 10 are in the green this morning. NFLX (+6.74%) leads on price move after blow-out earnings last night. The biggest dog, NVDA (+0.93%) has traded a bit more than twice the next closest ticker in terms of dollar-volume traded. Finally, remember its Friday and options expiration Friday at that. So prepare your account for the day and 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 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 gains are 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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