CRM Crushes and TSLA Underwhelms

The large-cap indices opened the day flat and then whipsawed their way sideways, having made no real progress by 12:45 pm.  However, the QQQ opened flat and then whipsawed its way South, reaching the lows of the day by 11:45 am before swinging back to reclaim most of the lost ground by 12:15 pm.  All three of the major indices then got into lock-step at 12:45 pm and sold off until 3 pm only to bob along not far up off the lows the rest of the day.  This action gave us Spinning Top type candles in the SPY, DIA, and QQQ, with the QQQ having the largest (black) body candle.  The SPY and QQQ had above-average volume while the DIA had a lower-than-average number of shares traded.

On the day, six of the 10 sectors were in the red with Utilities (-1.34%) leading the way lower and Energy (+1.63%) holding up better than the other sectors.  At the same time, the SPY was down 0.37%, the DIA was up 0.13%, and QQQ was down 0.80%.  The VXX rose almost 1% to 11.65 and T2122 climbed slightly to just outside the edge of the oversold territory to 20.78.  10-year bond yields spiked to 3.996% and Oil (WTI) was up 0.82% to $77.68 per barrel.  So, overall, Wednesday was an indecisive day filled with whipsaws.

In economic news, February Manufacturing PMI came in a bit below expectation at 47.3 (compared to a forecast of 47.8 but better than the January value of 46.9).  Just a few minutes later, the Feb. ISM Manufacturing PMI also came in below expectation at 47.7 (versus a forecast of 48.0 but slightly better than the January reading of 47.4).  At the same time, Feb. ISM Mfg. Prices came in significantly hotter than expected at 51.3 (compared to a forecast of 45.1 and a January value of 44.5).  Although these were not earth-moving indicators, they did show a modest slowdown in the economy while the inflation indication is not good.  Then the EIA Weekly Crude Oil Inventories came in with a larger build than forecast to +1.165 million barrels (versus a forecast of +0.457 million barrels but far, far better than the prior week’s build of 7.648 million barrels and even much better than Tuesday night’s API report of +6.203 million barrels).  This build in inventories offset record oil exports of 5.629 million barrels for the week.  Finally, the Fed speak was mixed on Wednesday.  Minneapolis Fed President Kashkari (voter) said he is leaning toward increasing his policy path (adding more rate hikes) but also that he had not made a final decision prior to the March meeting.  However, Atlanta Fed President Bostic released an essay later in the day that said he still feels the 5%-5.25% range would be adequate despite the recent high inflation readings.  The news from Bostic was that he now feels the Fed Funds Rate will need to be kept at that level into 2024.

SNAP Case Study | Actual Trade

Click for video

In stock news, Reuters reported Wednesday afternoon that US electric vehicle makers are seeing a drop in demand across the board.  The company cited sources at TSLA, RIVN, NKLA, FSR, and LCID as well as noting very public price cuts by TSLA.  It was quite interesting that the article did not mention the big auto brands GM, F, and STLA although the implication was that the slowdown was industry-wide.  In unrelated EV auto news, TSLA CEO Musk announced part 3 of his “TSLA Master Plan.”  He said the plan is to eventually cut the cost of vehicle production in half.  However, the focus of the plan was on “sustainable energy” and working with Musk’s other companies to replace the existing power grid with renewables and TSLA batteries.  Elsewhere, GOOGL’s Waymo self-driving unit laid off 137 employees in its second round of job cuts for 2023.  Meanwhile, LLY announced it will cut list prices for its most commonly prescribed insulin products by 70% and will begin offering $25/mo. insulin as of Q4 this year.  (They currently sell at around $275.)   In labor news, DAL pilots have ratified a new contract offering them a cumulative 34% pay increase.  AAL and UAL pilots have been conducting “informational pickets” amidst claims the companies are dragging out negotiations after publicly promising “industry-leading contracts” at the same time they have offered less than the DAL deal.  This is all part of a war for talent as the major airlines plan to hire over 8,000 new pilots in 2023 alone.

In stock legal and regulatory news, UBS lost its bid to have a lawsuit thrown out of court in London.  The suit will now proceed and claims UBS is liable for $500 million lost by two exiled Chinese businessmen when UBS forced them to sell Hong Kong shares at the height of a market rout in 2015.  Elsewhere, for the second time in two days, the FDA Advisory Board recommended that the FDA approve a respiratory virus vaccine.  This time the recommendation was for GSK’s competitor to the PFE vaccine recommended Tuesday and this time by a stronger 10-2 vote.  In other health-related news, BMY won a dismissal of a $6.4 billion lawsuit that had claimed the company had defrauded investors by delaying the submission of information to the FDA (and which delay allowed BMY to avoid paying shareholders in CELG the $6.4 billion as part of a contingency clause in the company purchase).  Meanwhile, OSHA announced it has opened an investigation into a death that occurred Tuesday at the MPC refinery in Texas City, TX. Elsewhere, a Delaware judge has thrown out a shareholder lawsuit against the MCD board claiming it was wrong to let former CEO Easterbrook keep $125 million in severance when he was fired for having a relationship with one of his employees.

After the close, CRM, SPLK, VEEV, SNOW, ADV, AEO, and OKTA all reported beats to both the revenue and earnings lines.  Meanwhile, PSTG and AAN both missed on revenue while beating on earnings.  On the other side, AIMC, AGL, CANO, LNW, and ERIE all beat on revenue while missing on earnings.  Unfortunately, GEF, JAZZ, and CODI missed on both the top and bottom lines.  It is worth noting that CRM, AGL, and OKTA raised their forward guidance. However, SPLK, PSTG, VEEV, and AAN lowered their forward guidance. (CRM is also notable for its big beats despite the fact they laid off more than 8,000 employees early this year, claiming they were unprofitable and fearing the economic climate.)

Overnight, Asian markets were mixed but leaned to the red side on mostly modest moves. Hong Kong (-0.92%), India (-0.74%), and Singapore (-0.62%) paced the losses while South Korea (+0.62%) and Malaysia (+0.36%) were the only appreciable gainers.  In Europe, we see a similar picture taking shape at midday.  The FTSE (-0.15%), DAX (-0.47%), and CAC (-0.04%) are typical of the region with 4-5 smaller exchanges in just into the green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed start to the day. The DIA implies a +0.18% open, the SPY is implying a -0.39% open, and the QQQ implies a -0.57% open at this hour.  At the same time, 10-year bond yields have crossed above the key 4% level to 4.038% and Oil (WTI) is up 0.37% to $77.99/barrel in early trading.

The major economic news events scheduled for Thursday include Q4 Unit Labor Cost,  Q4 Nonfarm Productivity, and Weekly Initial Jobless Claims (all at 8:30 am).  We also hear from Fed members Waller (4 pm) and Kashkari (6 pm).  Major earnings reports scheduled for the day include AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, and TD before the opening bell.  Then after the close, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO report. 

In economic news later this week, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.  In terms of earnings later in the week, on Friday, HIBB reports.

So far this morning, BBY, M, BURL, TD, PDYPY, SQM, CNQ, AER, and AMRX have reported beats on both the revenue and earnings lines.  Meanwhile, BUD, BIG, PDCO, and BILI missed on revenue while also beating on earnings.  On the other side, GMS and CPG beat on revenue while missing on earnings.  Unfortunately, HRL and STGW missed on both the top and bottom lines.  It is worth noting that BBY, HRL, BILI, and AMRX have all lowered their forward guidance.

LTA Scanning Software

In late-breaking news, TSLA took a beating overnight after Elon Musk’s “Master Plan Part 3” was long on platitudes, vagueries, and promises while being short on details, timing, and concrete steps. For example, he did not mention the long-promised (more than 2 years) $25k TSLA model. However, he did say the company has agreed to build a new plant in Mexico to build “the next generation of TSLA vehicles” (which implies the CA and TX plants have less of a role in the company’s future).

With that background, it looks like the bears want to keep pushing in the leading SPY and QQQ indices while the lagging DIA is looking to consolidate. The trend remains bearish and extension is not a problem yet in terms of T-line (8ema) or the T2122 indicator. As I see it, the SPY and especially QQQ have a little way to fall into their next support, but the DIA has minor support just below the premarket price. Respect the trend (the trend is the trend until it ends) and be aware of the potential for intraday whipsaw like we saw yesterday. Also remember the data dump at 8:30am if you are playing in the premarket.

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

TC2000 Discount

🎯 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 PlansPrivate 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

Rollercoaster Ride of Whipsaws

As investors reacted to earnings and economic reports piling up, evidence of a slowing economy, the indexes produced a rollercoaster ride of whipsaws, leaving more questions than answers by the close of day.  On the positive side, the indexes held near technical and price support levels but did so with substantial uncertainty as the 10-year bond topped 4%.  Expect more volatility this morning with jobs and productivity numbers before the bell to set the stage for the day.  We could be setting up for a significant market move soon, but it could go in either direction, so plan carefully.

Asian markets struggled with direction overnight, closing mixed as investors grappled with the impacts of pending rate increases.  European markets trade with modest losses this morning after posting an 8.5% inflation number suggesting the ECB has a lot of work ahead to curb the rising costs.  At the time of writing this report, U.S. futures suggest a mixed open with potential market-moving economic data capable of changing everything by the open. 

Economic Calendar

Earnings Calendar

Notable reports for Thursday include AER, AVGO, BUD, BBY, BIG, BILI, AI, CHPT, COST, DELL, HPE, HRL, KR, M, MRVL, JWN, PTLO, SIX, SWBI, SFM, SSYS, TD, UTZ, VSCO, VVNT, VMW, AUY, & ZS.

News & Technicals’

Tesla CEO Elon Musk took the stage to present his “Master Plan Part 3” for the company at its 2023 Investor Day in Austin.  The company’s manufacturing leader, Tom Zhu, revealed that as of Wednesday, Tesla had produced 4 million cars.  The presentation was long on vision and a review of prior achievements but short on specifics about new Tesla products or services. 

Inflation in the eurozone eased slightly to 8.5% in February, even as the ECB signaled that the interest rate hiking cycle might not end.  Core inflation rose to an estimated 5.6% in February from 5.3% in January.  Goldman Sachs said earlier this week that they were raising rate hike expectations for the ECB.

Salesforce beat expectations across the board.  In addition, the company is expanding its share buyback program after introducing it last year.  Salesforce announced layoffs during the quarter as activists pushed it to become more profitable.

Wednesday’s price action was a rollercoaster ride of whipsaws that marked a new low for the week, but in the indexes, while technically resolving nothing.  Though the economic data continues to signal a slowing economy, the VIX shows investors have little fear as the recession evidence grows.  The good news is that index price support levels held by the end of the day, with Dow making the most effort to rally as the first day of March trading came to a close.  I believe the indexes are setting up for a significant market move, but the question is in which direction?  Plan carefully with Jobless Claims and Productivity & Costs report before the bell setting the stage for another day likely to produce challenging volatility. 

Trade Wisely,

Doug

Analysts Push GS CEO and March Starts

Markets opened basically flat on Tuesday.  The DIA sold off for 5 minutes while the other two major indices stayed held ground during that time.  Then all three of the major indices wandered up and down in a tight range until noon.  From noon until 2 pm, all three made a modest rally and this was matched by a two-hour selloff from 2 pm into the last 5 minutes of the day.  That last 5 minutes saw the strongest selling of the day.  This action gave us Inverted Hamer candles in the SPY and QQQ, with the QQQ failing a retest of its T-line (8ema).  However, DIA gave us a black-bodied, Marubozu (shaved head) candle with no wicks and closing on the lows. The QQQ had average volume, the SPY a little greater than average volume, and the DIA less-than-average volume for the session.

On the day, seven of the 10 sectors were in the red with Utilities (-1.63%) leading the way lower and Basic Materials (+0.55%) holding up better than the other sectors.  At the same time, the SPY was down 0.37%, the DIA was down 0.76%, and QQQ was down 0.13%.  The VXX fell 2.04% to 11.54 and T2122 dropped back down to the edge of the oversold territory to 19.92.  10-year bond yields were flat at 3.924% and Oil (WTI) was up almost 1.5% to $76.81 per barrel.  So, overall, Monday was an indecisive day in the SPY and QQQ with the last leg being a bearish move.  However, the DIA was decisively bearish all day.

In economic news, the January Goods Trade Balance grew as it came in at -$91.50 billion (up from -$89.67 billion in December).  January Retail Inventories also grew, coming in at +0.2% (compared to +0.1% in December).  Later in the morning, the Feb. Chicago PMI came in worse than expected at 43.6 (versus a forecast of 45.0 and the January reading of 44.3).  Shortly thereafter, the Conference Board Consumer Confidence also came in low at 102.9 (compared to a forecast of 108.5 as well as the January value of 106.0).  For those traders reading between the tea leaves, the increase in Retail Inventories, contraction value in the Chicago PMI, and decrease in Consumer Confidence (leading indicator) could be signs of a slowing economy…which a bull could read as an excuse for the Fed to not hike as much in March.  Then, after the close, the API Weekly Crude Oil Stocks were reported much higher than expected yet again at +6.203 million barrels (versus a forecast of +0.440 million barrels but improved over the prior week’s +9.895 million barrels).

SNAP Case Study | Actual Trade

Click for video

In stock news, AMAT unveiled a new semiconductor chip manufacturing tool Tuesday.  AMAT stock jumped on the news and main competitor ASML gapped lower. During the afternoon, GS told an investor conference that it is considering “strategic alternatives” for its consumer business.  (GS CEO Soloman and President Waldron both signaled the company is backing away from Main Street after the company had previously halted its unsecured lending and folded consumer business units into other divisions.)  Analysts really pressed GS execs hard at the event and the CEO seemed flustered. At the same time (but at a different event), CVX CEO Wirth said we could see consolidation among the 5 huge oil major players (CVX, XOM, BP, SHEL, and TTE).  However, he expects severe antitrust hurdles before it happens.  Meanwhile, the Wall Street Journal reports that APO is in talks to buy ARNC.  Later, Reuters reported that V and MA have both pushed back projects and slammed the breaks on partnerships with crypto firms after the bankruptcies of FTX and BlockFi in 2022. Then, after the close, the US Postal Service announced that it plans to buy 9,250 electric Transit vans from F starting later this year.  Their main competitor, GM, also announced after the close that it will lay off 500 salaried workers. Finally, also after the close, NVAX announced it is slashing spending and raised doubts about the ability of the company to remain solvent.

In stock legal and regulatory news, a US Federal District Judge sentenced GLNCY to pay just over $700 million ($428.5 million fine and $272 million forfeiture) after the company’s guilty plea in a decade-long scheme of bribing foreign officials.  While the fine met the plea agreement the company made with prosecutors, it was 15% below the US sentencing guidelines.  Later, the US Labor Dept. threw out exemptions put in place by the Trump Administration which had allowed Federal Contractors to be exempt from anti-discrimination laws.  Elsewhere, the Biden Administration announced on Tuesday that it will require companies winning funds from the $52 billion CHIPS Act to share “excess profits” in exchange for the tax credits and subsidies.  The Commerce Dept. plans to begin accepting applications for the funds in March and the main beneficiaries are expected to be INTC, AMD, NVDA, TSM, TXN, ADI, SWKS, MCHP, and MU.  Meanwhile, the FDA Advisory Board voted 7-4 to recommend a respiratory virus drug from PFE be authorized for older adults in the US. 

After the close, ROST, A, URBN, FRG, FSLR, GO, BGS, ICFI, IHRT, MASI, VZIO and VRSK all reported beats to both the revenue and earnings lines.  Meanwhile, HPQ, AMC, RKT, JXN, EXPI, RIVN, and CPNG missed on revenue while beating on the earnings line.  On the other side, SWX beat on revenue while missing on the earnings line.  Unfortunately, MNST, COMP, and EDR missed on both the top and bottom lines.  It’s worth noting that EDR raised its forward guidance while IHRT and GO both lowered their forward guidance.

Overnight, Asian markets were mixed but leaned heavily to the green side on very uneven moves.  Hong Kong (+4.21%), Shenzhen (+1.11%), and Shanghai (+1.00%) led the gainers.  Hong Kong’s jump came after a bunch of economic data indicated that China was reopening much faster than expected.  For example, the official PMI hit the highest level since 2012.  Meanwhile, in Europe, we see green across the board at midday with the sole exception of Portugal (-0.58%).  The FTSE (+0.88%), DAX (+0.58%), and CAC (+0.69%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing to a modestly green start to the day.  The DIA implies a +0.16% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.36% open at this hour.  At the same time, 10-year bond yields are up to 3.94% and Oil (WTI) is down 0.70% to $76.53/barrel in early trade.  (That’s odd that oil did not get the memo indicating China demand is roaring back.) 

The major economic news events scheduled for Wednesday, include Mfg. PMI (9:45 am), ISM Mfg. PMI (10 am), and EIA Crude Oil Inventory (10:30 am).  Major earnings reports scheduled for the day include ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, and WEN before the opening bell.  Then after the close, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report. 

In economic news later this week, on Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

LTA Scanning Software

So far this morning, RY, DY, CLVT, WEN, ACIW, HZNP, and GOLF have all reported beats to both the revenue and earnings lines.  Meanwhile, LOW, ODP, NIO, BHG, DCI, WB, and EYE have all missed on the revenue line while beating on earnings.  On the other side, KSS, QRTEA, ANF, HGV, and QRTEB beat on revenue while missing on the earnings line.  (There were no misses on both lines reported so far today.) It is worth noting that KSS, NIO, and EYE lowered their forward guidance.  However, ODP raised its forward guidance.

In mortgage news, interest rates increased for the third straight week.  As a result, mortgage demand also dropped for the third straight week after spiking earlier this year as rates had dropped.  Last week saw the slowest mortgage demand in 28 years.  The national average rate for a 30-year, fixed-rate, conforming loan hit 6.71% with an increase in points to 0.77 (up from 0.75).  This caused refinance applications to fall 6% and new home purchase applications to also fall the same 6% on the week.

With that background, it looks like the bulls want to make another modest move back up toward the T-line (8ema) in all three major indices again this morning. However, over-extension is not a problem in terms of the T-line and the T2122 indicator is just at the edge of oversold territory. So this is not the result of being stretched to the downside. Regardless, all three major indices remain in a downtrend. In addition, all three indices have minor potential support below as well as resistance above. Respect the trend (the trend is the trend until it ends) and be aware of the potential support and resistance.

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

TC2000 Discount

🎯 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 PlansPrivate 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

Disappointing Economic Numbers

Tuesday’s early bullish hopes faded before the open, with disappointing economic numbers inspiring the bears as slowing economic conditions raise recession worries among investors.  Though we have primarily tried to ignore the clues of a stressed consumer, the compounding impacts are becoming more evident as LOW adds to the chorus of retail companies uncertain about the path ahead.  With the majority of 1st quarter earnings in the rearview poor economic numbers will be harder to ignore as we face another rate increase later this month.  Plan for overnight reversal and significant intraday whipsaws to continue as the uncertainty grows.

While we slept, China reported a pickup in factory activity, with the tech-heavy HSI surging 4% while the ASX declined slightly.  However, the European market’s trade decided bullish this morning, hoping to relieve the recent selling.  With several pending and potentially market-moving economic reports and a bevy of retail earnings, U.S. futures push for a positive open, hoping to relieve the recent downturn and hold technical index supports.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include ANF, ACIW, BLUE, BOX, CLH, DLTR, DIN, DCI, FNKO, HGV, HZNP, INO, JACK, JAZZ, KSS, LL, LOW, NIO, OKTA, PLUG, PSTG, RY, CRM, SGFY, SNOW, SPLK, STWD, TUP, WB, & WEN.

News & Technicals’

Lowe’s sales in its fiscal fourth quarter fell short of Wall Street’s expectations.  The home improvement retailer issued a conservative outlook as the sector comes under pressure from a shift in consumer spending. 

General Motors is cutting hundreds of salaried positions as it follows other major companies, including competitors, in downsizing headcounts to preserve cash and boost profits.  The cuts affect about 500 positions, according to a person familiar with the plans, announced Tuesday internally. 

In November, Rivian reaffirmed its full-year guidance of an adjusted loss before income, taxes, depreciation, and amortization of $5.4 billion.  For 2023, Rivian forecast vehicle production of 50,000 vehicles.  That would be roughly double last year’s amount but below analysts’ expectations of around 60,000.  Rivian is focusing on ramping up its R1 truck and SUV production and an electric delivery van it builds for Amazon, its largest individual shareholder.

The Tuesday pre-market pump faded before the beginning of trading as disappointing economic numbers that point to a slowing economy and an inflation-stressed consumer change their spending habits.  As we kick April trading, worries of a pending recession continue to grow amongst traders and investors, breaking recent index uptrends.  Still, I would not expect the bulls to give up easily, and after testing technical support, now would be the time to step up and defend.  Unfortunately, they face another round of economic reports with PMI Mfg., ISM Mfg, Construction Spending, and mortgage and petroleum data.  Once again, they are working to pump up the pre-market, so expect the wild intraday whipsaws to continue as the bulls and bears battle for directional control of the indexes. 

Trade Wisley,

Doug

Considerable Intraday Whipsaw

After mainly ignoring the terrible durable goods report, the bulls surged higher by more than 350 Dow points, only the quick reverse taking most of it back in a considerable intraday whipsaw.  The good news is last Friday’s index lows held as support, but facing another big day of earnings and economic data on this last trading day of February, expect more of the same wild volatility.  A recession seems inevitable, with slowing economic reports stacking up evidence of changing consumer habits and record credit card debt with more rate increases on the way.  So, plan your risk carefully as we slide into March and the market comes to grips with the challenging path forward.

Asian markets closed mostly higher but with modest gains and losses after Japan’s factory output fell.  European markets edge slightly higher this morning despite the accelerating inflation in France and Spain.  U.S. futures, once again, pump higher, the premaket facing a big day of earnings and economic data, but anything is possible by the open on this last trading day of February. 

Economic Calendar

Earnings Calendar

Notable reports for Tuesday include DDD, ADT, AAP, A, AMBA, AMC, AZO, AXON, BLNK, BLDR, CARG, CBRL, CELH, CLNE, COMP, CPGN, CRON, DUOL, FSLR, FRO, GDRX, GOGO, GO, HP, IGT, SJM, MANU, MLCO, MNST, MYGN, NXST, NCLH, PRGO, PUBM, RIVN, RKT, ROST, SEAS, TGT, URBN, SPCE, & WRBY.

News & Technicals’

A bill to revise legal protections that have shielded TikTok from U.S. sanctions is expected to pass a key House committee on Tuesday, paving the way for a broader ban on the popular short video app.  Sponsored by House Foreign Affairs Committee Chairman Mike McCaul, the bill would strip longstanding protections from companies that transfer Americans’ “sensitive personal data” to entities or individuals based in, or controlled by, China.  The bill would likely pass the Republican-controlled House easily.  However, its fate in the Democratic majority Senate is unclear. 

After the U.S. shot down an alleged Chinese spy balloon this month, China’s defense ministry declined a call with its U.S. counterpart, according to statements from both sides.  Chinese culture is why, said Shen Yamei, deputy director and associate research fellow at state-backed think tank China Institute of International Studies’ department for American studies.  The default U.S. view is quite different. 

Ukraine President Volodymyr Zelenskyy acknowledged Monday that the situation is deteriorating around Bakhmut.  Russian forces and private military contractors belonging to the Wagner Group have been trying to capture Bakhmut for months as they look to cut Ukraine’s supply lines in Donetsk.  On Monday, one Russian official claimed Russian forces now controlled all roads into Bakhmut, stopping Ukrainian supplies of ammunition and forces into the city.

We kicked off the week with a considerable intraday whipsaw, but despite the bearish reversal, the bulls defended last Friday’s index lows as support.  TGT squeaked out an earnings beat this morning but appeared to have the same slowing consumer concerns as HD and WMT.  We not only have a big day of earnings reports but also face several economic reports, including trade, PMI, Housing prices, and Consumer Confidence.  Reversal and intraday whipsaws seem likely to continue to stay focused on support and resistance levels as the big point range of price swings on the last trading day of the month.

Trade Wisely,

Doug

TGT Beats and Lowers This AM

On Monday, markets gapped higher at the open (up 0.89% in the SPY, up 0.78% in the DIA and up 1.11% in the QQQ).  All three major indices then shopped sideways for just over an hour.  However, at that point, a slow selloff took hold for the rest of the day with price closing not far up off the bottom in all three.  This action left us with gap-up, black-bodied, indecisive Spinning Top candles in the SPY, DIA, and QQQ.  All three very nearly touched their T-line (8ema) at the high of the day.  In addition, the SPY closed up above its 50sma…but just barely above.  This all happened on less-than-average volume in all the major indices.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (+0.79%) and Basic Materials (+0.77%) leading the way higher and Utilities (-0.50%) lagging behind the other sectors.  At the same time, the SPY was up 0.34%, the DIA was up 0.29%, and QQQ was up 0.72%.  The VXX fell 3.59% to 11.81 and T2122 climbed up out of the oversold territory to 39.22.  10-year bond yields fell back a bit to 3.928% and Oil (WTI) fell three-quarters of a percent to $76.75 per barrel.  So, overall, Monday was a gap-up, indecisive day where the bears seemed to have more strength than the bulls after the first hour.

In economic news, January Durable Goods Orders came in below expectation at -4.5% (compared to a forecast of -4.0% and far below the December reading of +5.1%).  The bulls took this as good news, probably under the theory that bad economic data may give the Fed a reason not to raise rates as much in March.  However, later in the morning, January Pending Home Sales came in extremely hot at +8.1% (versus a forecast of +1.0% and a December value of +1.1%).  This news may have helped the bears during the mid-morning start to the selloff.  However, the staying power was not long-lived and seemed to dissipate quickly.  Meanwhile, Treasury Sec. Yellen made a surprise trip to Ukraine.  She called for a “fully funded and appropriately conditioned” (meaning funded by Russian asset seizures and conditioned to avoid/limit corruption) IMF bailout plan for Ukraine by the end of March.  However, she did acknowledge a significant set of legal hurdles to accessing those assets being held in the US and Europe.  Yellen also called for sanctions on the Russian uranium commodity, which had escaped sanctions thus far.

SNAP Case Study | Actual Trade

Click for video

In stock news, PLTR announced they are cutting 2% of their workforce.  (However, this only amounts to 75 jobs.)  Elsewhere, car maker STLA announced it has purchased a 14.2% stake in MUX (a copper mine located in Argentina, whose largest shareholder is RIO).  In other auto news, FSR told Reuters on Monday that it has increased orders for its “Ocean” sport utility EV and was on track to produce 42,400 vehicles in 2023.  (The Ocean EV starts at $37,500 compared to TSLA Model Y which starts at $54,990.)  At the same time, the Wall Street Journal reported PFE is in talks to buy cancer drugmaker SGEN.  However, there are many hurdles for the deal to clear including a potential major antitrust review.  Meanwhile, WMT, TGT, BABA, HD, LOW, COST, DLTR, IP, DOLE, and NKE are benefitting from plummeting ocean shipping prices (as the largest importers or exporters of containers).  At its peak, the cost was $20,000 per TEU and now the price is $1,150.  However, shipping firms (pink sheet listed) are now canceling voyages and storing containers in a frantic effort to prop up prices.

In stock legal and regulatory news, TD has agreed to pay $1.205 billion to a court-appointed receiver (who will pay back victims) related to an infamous Ponzi scheme 10 years ago.  The bank avoided admitting to doing any wrong, but paid since it repeatedly ignored red flags and funneled all of Allen Stanford’s ill-gotten gains to his offshore accounts in Antigua.  Elsewhere, Politico reported late Monday that the FTC is going to challenge the ICE (owner of NYSE) $13 billion deal to buy BKI.  This move comes after many months of investigation of the pricing power ICE would gain in the mortgage data market.  In Ohio, residents have asked a judge to block NSC from doing cleanup (destroying potential lawsuit evidence) related to the February 3 train derailment and chemical spill.  This came after NSC had only allowed 2 days for the inspection of dozens of rail cars.  However, NSC is also under a tight deadline due to a March 10 deadline from the EPA to clean up residues.  Elsewhere, a Delaware court ruled that it will hold a hearing on April 27 regarding the conversion of APE (AMC Preferred shares) into AMC common shares.  AMC soared on the news, which implies the stock may not be diluted 10-1 on March 14.  (This extends the time for a long APE / Short AMC trade by 1.5 months.)  Meanwhile, LYV has asked a US federal judge in CA to throw out a class action lawsuit related to the sale of Taylor Swift concert tickets.  LYV claims that the ticket buyers (plaintiffs) had all repeatedly agreed to the terms of service which call for confidential arbitration.  After the close, DDD agreed to pay $27 million to the US government to settle its violations of export restrictions to China.

After the close, UHS, RRC, WDAY, CAPL, ZM, HHC, MKSI, TTEC, HEI, HY, and WMK all reported beats on both the revenue and earnings lines.  Meanwhile, OKE, ARKO, PRGO, TWI, PRIM, and ICUI all missed on revenue while beating on earnings.  On the other side, DAR, ACHC, BMRN, and OVV all beat on revenue while also missing on the earnings line.  Unfortunately, OXY and ARGO missed on both the top and bottom lines.  It is worth noting that OKE and ALC both raised forward guidance.  However, MKSI, TTEC, and BMRN all lowered their own forward guidance.

Overnight, Asian markets were mixed and leaned to the downside.  Hong Kong (-0.79%), Taiwan (-0.71%), and India (-0.51%) paced the losses.  Meanwhile, Shenzhen (+0.70%), Shanghai (+0.66%), and Australia (+0.47%) led the gainers.  In Europe, we see the opposite picture at midday with most of the bourses in the green.  The FTSE (-0.43%), DAX (+0.17%), and CAC (+0.13%) lead the way with all but three of the other exchanges modestly green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the morning.  The DIA implies a +0.32% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.43% open at this hour.   

The major economic news events scheduled for Tuesday include January Trade Goods Balance and Jan. Retail Inventories (both at 8:30 am), Chicago PMI (9:45 am), Conf. Board Consumer Confidence (10 am) and API Crude Oil Stocks Report (4:30 pm).  Major earnings reports scheduled for the day include AHCO, ADT, AAP, AMWD, APG, AZO, BMO, BNS, BLDR, CHS, CCO, CLOV, CBRL, DQ, DK, XRAY, IGT, SJM, JLL, KTB, NFE, NXST, NCLH, OMI, PLTK, PRVA, SRE, FOUR, TGT, VRTV, and VTNR before the opening bell.  Then after the close, A, AMC, BGS, COMP, CPNG, EDR, EXPI, FSLR, FRG, GO, HPQ, ICFI, IHRT, JXN, MASI, MNST, RIVN, RKT, ROST, SKWD, SWX, URBN, VRSK, and VZIO report.

In economic news later this week, on Wednesday, Mfg. PMI, ISM Mfg. PMI, and EIA Crude Oil Inventory are reported.  On Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Wednesday, ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, WEN, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report.  On Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

LTA Scanning Software

So far this morning, TGT, BMO, AZO, AAP, APG, XRAY, IGT, KTB, PLTK, BLDR, CCO, FOUR, VTNR, and CLOV have all reported beats on both the revenue and earnings lines.  Meanwhile, SRE, SJM, and NFE missed on revenue while beating on earnings.  On the other side, BNS, OMI, ADT, NCLH, DORM, and FRO all beat on revenue while missing on earnings.  Unfortunately, AHCO, AMWD, CHS, and DQ missed on both the top and bottom lines.  It is worth noting that TGT, ADT, CHS, NCLH, and CLOV all lowered their forward guidance.  However, CCO and KTB both raised their own forward guidance.

With that background, it looks like the bulls want to gap markets back up toward their T-lines (8ema) again this morning. This time, it is looking to be a less dramatic inside candle gap up. So, over-extension is not a problem either in terms of the T-line or T2122 indicator. Still, this leaves all three major indices in a downtrend. However, if they can reach yesterday’s highs again (and hold them) they will be testing that downtrend line. I see support just below (bouncing up off it in premarket) in the QQQ and SPY. However, I also see resistance just above in the DIA and probably in the SPY too. So, continue to respect trend and support and resistance. And beware of the recent tendency toward intraday reversals which might point toward a shorter/faster trade, longer/slower trade, and/or the ability to withstand the pressure (sized small enough).

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

TC2000 Discount

🎯 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 PlansPrivate 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

Mixed Technical and Price Patterns

Although it was good to see the bulls defend critical moving average supports in the SPY, QQQ, and IWM, the lower highs followed by, the lower lows add some uncertainty with the mixed technical and price patterns.  On the earnings calendar, we have a retail theme this week that may have been complicated by the weakening looked forward provided by HD and WMT last week.  The first thing today is a potential market moving Durable Goods, with consensus estimates suggesting a substantial decline.  Plan for the whipsaws and overnight reversal continues as the bulls fight to defend supports and bears line up to defend resistance levels. 

Asian markets moved modestly lower during the night as they grappled with higher rates and slowing consumer activity.  However, European markets want to shake off last weeks selling with a decidedly bullish bounce this morning.  U.S. futures also want to bounce this morning, pushing upward in the morning pump but with the Durable Goods report pending, anything is possible by the open.  Watch for whipsaws this morning.

Economic Calendar

Earnings Calendar

The earnings calendar this week has a heavy retail theme.   Notable reports for Monday include AAON, ACAD, AES, DAR, FSR, FRPT, GRPN, JRVR, TREE, LI, RIDE, OSH, OXY, PNW, RRC, TTEC, UHS, WDAY, & ZM.

News & Technicals’

The two top retailers issued cautious U.S. consumer outlooks for 2023 last week.  Walmart said consumer spending would start the year strong but fade.  Home Depot expects revenue to be flat this year but bolstered by home equity.  The retail sector had its worst week since July 2022, yet the latest inflation and retail sales data show consumer spending to be stronger than economists forecast. 

Several big economies are gearing up for the mass rollout of electric vehicles.  As the number of EVs on the road increases, a workforce with the knowledge to fix and properly maintain them will be needed.  There are concerns, however, that a skills gap may emerge in the near future, creating a big headache for both the automotive sector and drivers. 

In a joint statement Sunday, Sunak and von der Leyen said they had “agreed to continue their work in person towards shared, practical solutions for the range of complex challenges around the Protocol on Ireland and Northern Ireland.”  The U.K. may have left the EU on Jan 31, 2020, but the Northern Ireland Protocol has caused persistent disagreement ever since.

Mixed technical and price patterns could make for some uncertainty as the indexes try to bounce back from last weeks selling.  Though the SPY and QQQ held above critical technical supports, they also confirmed downtrends inking lower highs and lower lows in price action.  We will start the week with possible market-moving Durable Goods, then begin a big week of retail earnings data.  Will they also foresee the same weakening in the consumer and a slowing economy in the last half of this year, like HD and WMT?  If so, it would be wise to watch downtrends, and overhead resistance levels as the bulls work to defend the bears and may entrench themselves to fight for the downtrend.  So stay sharp and expect the big price swings of late to continue.

Trade Wisely,

Doug

Premarket Up – Durable Goods This AM

Markets gapped lower at the open Friday (down 1.29% in the SPY, down 1.14% in the DIA, and down 1.76% in the QQQ).  However, at that point, Mr. Momentum seemed to take off for the weekend.  After that open, all three major indices traded the rest of the day in a tight range bobbing around above and below the open.  This action gave us gap-down, indecisive Doji or Spinning Top candles in all three major indices.  The SPY crossed below its 50sma and then both the SPY and QQQ retested their 200sma from above…and held (at least for the day).  DIA is not far above (and looks headed toward) its own 200sma.

On the day, nine of the 10 sectors were in the red as Technology (-1.89%) led the way lower and Energy (+0.13%) held up better than the other sectors.  At the same time, the SPY was down 1.07%, the DIA was down 1.07%, and QQQ was down 1.67%.  The VXX climbed 3.90% to 12.25 and T2122 has dropped back down just into the oversold territory at 19.66.  10-year bond yields are back up to 3.947% and Oil (WTI) rose 1.50% higher to $76.52 per barrel.  So, overall, on Friday we saw a strong gap lower at the open, but then indecision the rest of the day.  All this took place on a greater-than-average volume.

In economic news, the January PCE Price Index (the Fed’s favorite inflation indicator) came in hotter than expected at 5.4% (compared to a forecast of 5.0% and the Dec. reading of 5.3%).  At the same time, January Personal Spending also came in much hotter than expected at +1.8% (versus a forecast of +1.3% and the December value of -0.1%).  This was the biggest monthly gain since March 2021.  Together these two readings were seen as indications that inflation may still be increasing (or at least is not falling) and the consumer is spending like crazy.  Both of those are more likely to lead the Fed to tighten more and faster, raising the probability of a half percent hike in March.  Hence, our gap down to start the day.  Later in the morning, the Michigan Consumer Sentiment came in slightly better than forecast at 67.0 (compared to an expectation of 66.4 and decently improved from the January value of 64.9).  At the same time, January New Home Sales came in significantly better than expected at 670k (versus a forecast of 620k and a December value of 625k)

SNAP Case Study | Actual Trade

Click for video

In stock news, on Friday META announced its own AI named LLaMA (short for Large Language Model Meta AI).  The new AI is aimed at researchers and academia and is the first step in META figuring out how it can use AI in its products.  Meanwhile, Reuters reported that several more companies are cutting dividend sizes in an effort to save cash.  As of Friday, these include HBI and VFC.  Elsewhere, Reuters also reported on food companies culling slow-selling product lines as another way to cut expenses.  These companies include KHC, CAG, UL, K, and MDLZ and will affect product selection and especially different sizes (smaller and larger quantities) of the same products available at WMT (Sam’s Club) and COST.  The food companies claim it will save them billions of dollars over the year.  At the same time, sources have told Bloomberg that GM has cut the production of pickup trucks due to growing inventories at dealerships and despite a continued increase in car sales this month.  This implies that, while sales are good now, GM is expecting a downturn.  Finally, hedge fund mgr. and major TSLA investor Ross Gerber told Reuters he was ending his bid for a TSLA board seat two weeks after his very public announcement of running for a seat in order to “reign in” Elon Musk.

In stock legal and regulatory news, the 2nd US Circuit Court rules that a tiny ($11,000) fine, which OSHA had levied on WMT for requiring pallets of boxes to be improperly stored, causing serious injury to an employee.  (The multiple appeals over a minuscule fine have been an attempt by WMT to avoid liability in a lawsuit filed by the employee.)   Elsewhere, WBD filed a lawsuit against PARA over the streaming rights to the animated comedy show South Park.  At the same time, the US CDC hit PFE, BNTX, and MRNA when it said Friday afternoon that there isn’t enough evidence to recommend multiple annual (ongoing) COVID-19 booster shots.  This comes as the government funding for such shots has or is expiring and the companies had announced major increases in the price of those vaccines.  Meanwhile, GS announced Friday that it expects to incur $2.3 billion more in losses from legal proceedings during the remainder of the year.  However, a CA Judge dismissed an antitrust suit that had been filed against CSGP by a rival real estate firm.  After the close, MS told Reuters that it was cooperating with investigations by the US District Attorney for the Southern District of NY into block trading practices.  At the same time, BLK told reporters it was cooperating in SEC investigations into electronic communications among its investment advisors (i.e. using encrypted communications to collude).

In miscellaneous news, US equity funds suffered massive outflows in the seven days ending last Wednesday.  Lipper data shows investors withdrew almost $7 billion during that week.  Meanwhile, Lipper data shows that investors exited US bond funds as well as they withdrew $1.67 billion during the week. Elsewhere, the US Dollar closed Friday at a seven-week high after hotter-than-expected inflation data.  This came as we saw the largest weekly gain (0.6%) by the Dollar since September.  On Saturday, Warren Buffett sent out his annual BRKB shareholder letter.  In it, he said the company will continue to hold “a boatload of cash and treasury bonds.”  He went on to report BRKB earnings were down 54% year-on-year for Q4 and down 125% year-on-year for all of 2022 (to a net loss of $22.819 billion).  So, if you think you had a rough trading year in 2022, consider that BRKB reported a $53.6 billion loss from investments and derivative trades.  BRKB share repurchases were down from $27 billion in 2021 to $8 billion in 2022.  No new plan for 2023 was announced, but BRKB is sitting on $130 billion in cash.

Overnight, Asian markets were red across the board.  Australia (-1.12%), South Korea (-0.87%), Shenzhen (-0.73%), and Taiwan (-0.71%) led the region lower.  Meanwhile, in Europe, with the lone exception of Greece (-0.53%), the entire region is strongly green at midday.  The FTSE (+0.77%), DAX (+1.52%), and CAC (+1.57%) are typical and lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest gap higher.  The DIA implies a +0.43% open, the SPY is implying a +0.50% open, and the QQQ implies a +0.61% open at this hour.  At the same time, 10-year bond yields have climbed to 3.959% and Oil (WTI) is down by a fraction of a percent to $76.18/barrel in early trading.

The major economic news events scheduled for Monday are limited to Jan. Durable Goods Orders (8:30 am) and January Pending Home Sales (10 am).  Major earnings reports scheduled for the day include AES, BRKB, WTRG, GLP, HSC, KOP, KOS, LI, PNW, and VTRS before the opening bell.  Then after the close, ACHC, ARGO, BMRN, CAPL, DAR, HEI, ICUI, MKSI, OXY, OKE, OVV, PRGO, PRIM, RRC, TWI, TTEC, UHS, WDAY, and ZM report.

In economic news later this week, on Tuesday we get Jan. Durable Goods, Jan. Retail Inventories, Chicago PMI, Conference Board Consumer Confidence and API Crude Oil Stocks Report.  The Wednesday, Mfg. PMI, ISM Mfg. PMI, and EIA Crude Oil Inventory are reported.  On Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Tuesday, we hear from AHCO, ADT, AAP, AMWD, APG, AZO, BMO, BNS, BLDR, CHS, CCO, CLOV, CBRL, DQ, DK, XRAY, IGT, SJM, JLL, KTB, NFE, NXST, NCLH, OMI, PLTK, PRVA, SRE, FOUR, TGT, VRTV, VTNR, A, AMC, BGS, COMP, CPNG, EDR, EXPI, FSLR, FRG, GO, HPQ, ICFI, IHRT, JXN, MASI, MNST, RIVN, RKT, ROST, SKWD, SWX, URBN, VRSK, and VZIO.  Then Wednesday, ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, WEN, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report.  On Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

LTA Scanning Software

So far this morning, AES, KOS, HSC, and NE all reported beats on both the revenue and earnings lines.  At the same time, VTRS missed on revenue while beating on the earnings line.  On the other side, WTRG beat on the revenue line while missing on earnings.  Unfortunately, LI missed on both the top and bottom lines.  It is worth noting that HSC has also lowered forward guidance.

With that background, it looks like the bulls want to gap markets back up toward their T-lines (8ema) this morning. (At least prior to the durable good number.) Still, this leaves all three major indices basically in a downtrend although the premarket price is getting close to challenging the downtrend line (but certainly not starting a new uptrend at this point). Extension is not a problem either in terms of T2122 or the T-line. It looks like the bulls are trying to get back above a potential support level that was tested and appeared to fail Friday. Also, keep in mind that the norm recently has been to see large intraday swings. So, be prepared to weather such a whipsaw or look to shorter or longer trade horizons to handle that problem.

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

TC2000 Discount

🎯 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 PlansPrivate 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

Another Whipsaw Day

Thursday left more questions than answers with another whipsaw day, some hopeful hammer patterns just ahead of the Fed’s favored inflation number expected to rise according to consensus.  To keep traders guessing, we will follow that up with New Home Sales, Consumer Sentiment, and more Fed jaw-wagging.  Buckle up today’s data could encourage the bulls to defend support or inspire the bear to keep attacking as we head into the uncertainty of the weekend.  Big price moves are possible, so plan carefully with critical technical and price levels in the index charts at stake. 

Asian markets traded mixed during the night even as Japan’s inflation reached a 41-year high.  European markets mixed, though cautiously waiting for market-moving economic reports.  The hope hammer patterns of Thursday look to reverse with a gap down, showing ahead of the Personal Incomes and Outlay number that could change everything by the opening bell.  Plan for big point moves as the reaction may determine who wins the battle to hold or break critical support levels.

Economic Calendar

Earnings Calendar

We have a much lighter day on the Friday earnings calendar.  Notable reports include BRC, CRI, GTLS, CNK, LAMR, SSSP, TBLA, & SLCA.

News & Technicals’

Block stock rose in extended trading after the payments company reported fourth-quarter revenue and gross profit that beat Wall Street’s expectations.  The company posted a (non-adjusted) net loss of $114 million, or 19 cents per share, for the quarter. 

According to Fidelity’s analysis, retirement account balances in 401(k) plans lost nearly one-quarter of their value in 2022.  In addition, amid ongoing high inflation and economic uncertainty, nearly half of the retirees expect to outlive their savings. 

Warner Bros. Discovery reported fourth-quarter revenue that missed analysts’ estimates as the media industry contends with a soft advertising market.  However, the company, which owns HBO Max and Discovery+ streaming services, said its global direct-to-consumer streaming subscriber base increased by 1.1 million during the quarter.  In addition, more “Lord of the Rings” movies are on the way, CEO David Zaslav said. 

Fueled by NVDA earnings, the bulls tried to resume the upside rally in the day, but the attempt quickly faded into another whipsaw day that left behind some hopeful hammer patterns and yet more questions than answers.  Interestingly yesterday’s volume spike was huge, and VIX registered a substantial decline in fear despite the big ship in price.  This morning it’s all about the Personal Incomes and Outlays report, the Fed’s favored reading on inflation.  The result is likely to set the direction for the day and determine if the bulls will resume directional control of the market or if the bears will gain the upper hand heading into the weekend.  Plan for a bumpy ride with New Home Sales, Consumer Sentiment, and more Fed speak to keep traders on edge.

Trade Wisely,

Doug

1 Year Of Ukraine War and PCE Price Index

Whipsaw was the word of the day on Wednesday as we gapped higher at the open (up 0.68% in the SPY, up 0.46% in the DIA, and up 1.26% in the QQQ).  Then, after 25 minutes of finding their feet, the bears stepped in to drive a strong selloff that took all three major indices to the lows of the day (which was down 0.6% from the prior close) at noon.  From there, the bulls stepped in to lead a long, slow, steady rally that got us back to the opening level by 3:30 pm.  Finally, the last 30 minutes saw more selling in all three indices of note.  This action gave us black-bodied, indecisive, Spinning Top candles in the SPY and DIA as well as a black-bodied Hammer candle in the QQQ.  All three major indices remain below their T-line (8ema), but are close enough now that there is no question of over-extension at this point.

On the day, six of the 10 sectors were in the green as Energy (+1.78%) led the way higher (by eight-tenths of a percent) and Communication Services (-0.71%) lagged the other sectors.  At the same time, the SPY was up 0.53%, the DIA was up 0.35%, and QQQ was up 0.87%.  The VXX fell 3.52% to 11.79 and T2122 has climbed back into the mid-range at 45.40.  10-year bond yields fell again, this time to 3.888% and Oil (WTI) jumped 2.27% higher to $75.63 per barrel.  So, overall, we saw a back-and-forth day where we gapped up, faded the gap and continued the same distance lower, and then reversed course again to end up just below where we opened.  If that doesn’t say “INDECISION,” then I don’t know what does.  All this took place on a greater-than-average volume, in fact, much larger-than-average in the DIA.

In economic news, the second estimate of Q4 Gross Domestic Product came in lower than expected at +2.7% (compared to a forecast of +2.9% and the Q3 final reading of +3.2%).  This gave bulls the energy to gap higher at the open on the theory that slower Q4 growth will tell the Fed their measures are working and they can go with a smaller hike during their March meeting.  At the same time, the second estimate of the Q4 GDP Price Index came in above expectation at +3.9% (versus the forecast of +3.5% but still improved from the Q3 value of +4.4%).  Meanwhile, Weekly Initial Jobless Claims came in lower than expected at 192k (compared to a forecast of 200k and even slightly down from the prior week’s 195k number). Again, this all pointed to a goldilocks scenario in the bulls’ eyes.  GDP was falling, but still growing, inflation was trending in the right direction, and yet fewer than expected jobs are being lost.  To bulls, this suggests an economy that is not in serious trouble and a Fed policy that is still doing the job.

SNAP Case Study | Actual Trade

Click for video

In stock news, BA announced it will stop production of its F/A-18 fighter jet in 2025.  BA said this will free up resources to focus on winning the race to build the pentagon’s 6th generation fighter contract and building the MQ-25 autonomous refueling tanker.  (LMT and NOC are also competing for the sixth-generation fighter contract.)  Meanwhile, HUM announced it will exit the employer-based insurance business entirely to focus on government-backed programs such as Medicare and direct-to-individual insurance like medicare supplement insurance.  Later, NEM said it sees significant value created for its shareholders in a deal and is in talks to buy NCMGF.  Several of NEM’s competitors have said they are not interested in NCMGF, but the company still rejected NEM’s initial bid (which NEM said it is open to sweetening).  Elsewhere, NFLX said Thursday that it has cut the prices of its subscription plans in some countries in order to boost the number of subscribers.  The Wall Street Journal reported those cuts were in countries in sub-Saharan Africa, Latin America, the Middle East, and Asia.

In stock legal and regulatory news, NVS agreed to pay $30 million to healthcare plans and consumers to settle claims that it schemed to delay the US launch of generic drugs that would compete with its name-brand Exforge hypertension drug.  This was part of a broader $245 million settlement.  Meanwhile, a federal judge in Detroit moved more toward SBUX and dealt a blow to the NRLB ruling against the company.  The judge narrowed his previous “cease and desist” order barring the company from firing pro-union employees.  Originally, the order applied nationwide, but the just has now narrowed this to only cover a single store (in essence allowing SBUX to fire any pro-union employees elsewhere).  This is critical since 280 SBUX stores have unionized in the last two years out of 9,000 US locations.  Elsewhere, after the close, the FAA reported that BA has halted the delivery of 787 Dreamliner jets while it investigates a fuselage component.  (BA has not delivered a 787 since January 26 and there is no timeline available for the resumption.)  Finally, the US Dept. of Justice has asked a federal judge to sanction GOOGL after it claimed the company destroyed evidence by deleting internal corporate communications that had been subpoenaed as part of its antitrust case against GOOGL (related to internet search business).

In energy news, the EIA Weekly Crude oil Inventories saw stockpiles grow for the ninth-straight week.  The report showed an inventory build of 7.648-million-barrels (compared to a forecast of a 2.083-million-barrel build).  Crude inventories have grown by over 60 million barrels so far in 2023.  In addition, refineries operated at 85.9% capacity over the week, down slightly from the prior week and well below the 90% average capacity for this time of year.  Meanwhile, due to the reduced refining, the week saw a drawdown of gasoline inventories by 1.856-million-barrels (versus the forecast of a 0.108-million-barrel build and far less than the prior week’s 2.317-million-barrel build).  However, distillate (diesel and heating oil) inventories rose by 2.698 million barrels (compared to a forecast of a drawdown of 1.126 million barrels and the prior week’s drawdown of 1.285 million barrels).

In miscellaneous news, the USDA released its forecast calling for a 26.8% fall in egg prices during 2023.  The primary factor was that the agency is not seeing a rebound in bird flu after massive culling efforts in 2022.  Meanwhile, a group of Republican states has filed suit against the SEC, challenging the SEC requirements that investment funds reveal how they vote on shareholder ballots (like pay packages).  In the crypto space, the SEC and NY State’s top financial regulator both opposed Binance buying bankrupt crypto lender Voyager.  Both announced the grounds for their opposition is the ”unregistered offer and sale of securities,” which essentially declares crypto to be a security and is just another step in government opposition to cryptocurrencies.  Finally, the Biden Administration announced it will nominate former MA exec Ajay Banga to head the World Bank.

After the close, INTU, BKNG, MELI, ADSK, VICI, LYV, CHE, SWN, RHP, CWK, KWR, LUNMF, ACA, FTCH, SATS, EIX, and OPEN all reported beats on both the revenue and earnings lines.  Meanwhile, FND, PRI, BWXT, INT, CENX, and ZEUS all missed on the revenue line while beating on earnings. On the other side, SQ, PBA, ASR, SEM, ATSG, and SPNT all beat on revenue while missing on earnings.  Unfortunately, WBD, CE, BECN, OII, CVNA, and ACCO missed on both the top and bottom lines.  It is worth noting that CE, FND, ACCO, and ATSG lowered their forward guidance.  However, CHE and OII both raised their forward guidance.

Overnight, Asian markets were mostly in the red.  Japan (+1.29%) and South Korea (+0.53%) were the only appreciable green in the region.  Meanwhile, Hong Kong (-1.68%), Thailand (-1.12%), and Shenzhen (-0.81%) led the rest of the region lower.  In Europe, we see a similar picture taking shape at midday.  The FTSE (+0.21%) is among the handful of green bourses while the DAX (-0.60%) and CAC (-0.57%) are more typical and lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.57% open, the SPY is implying a -0.63% open, and the QQQ implies a -0.90% open at this hour.  At the same time, 10-year bond yields are up to 3.912% again and Oil (WTI) is up a half of a percent to $75.80/barrel in early trading.

The major economic news events scheduled for Friday include the January PCE Price Index and January Personal Spending (both at 8:30 am), Michigan Consumer Sentiment and January New Home Sales (both at 10 am).  Fed member (non-voting, hawk) Mester also speaks at 10:15 am.  The major earnings reports scheduled for the day include CM, GTLS, CNK, EOG, EVRG, FMX, FYBR, GTN, DINO, IEP, and LAMR before the opening bell.  Then after the close, CRC reports.

So far this morning, FYBR, EVRG, CRI, GTN, and PNM have all reported beats on both the revenue and earnings lines.  Meanwhile, CM, LAMR, and GTLS have missed on revenue while beating on earnings.  On the other side, CNK and DINO both beat on revenue while missing on earnings.  There are no major reports that have reported misses on both lines.  (FMX, IEP, and SSP report closer to the open.)  It is worth noting that CRI has lowered its forward guidance.

LTA Scanning Software

One year into the Russian War of Expansion against Ukraine, the war drags.  The Russians continue to be willing to take hundreds of thousands of casualties (by most estimates more than 100,000 dead).  On the other side, the West (and the US in particular) seems only willing Ukraine enough military aid to check the Russians.  (As opposed to decisively throwing them out such that they will not come back after regrouping.)  In terms of the business impacts go, according to US News and World Reports, these are the biggest losses.  PM generated 8% of its revenue from Russia and Ukraine prior to the war and that has taken a hefty hit.  PEP was generating 4.4% of total revenue from those two countries prior to the 2022 invasion.  MCD lost 4.2% of its revenue and also took a significant haircut on the assets it sold at fire sale prices to exit Russia.  Less obvious losers are MHK (which lost 4.3% of its revenue which came from Russia and Ukraine), EPAM (which used to generate 4% of revenue from the two countries, CCL (which previously got 3.5% of its revenue from Russia and Ukraine), PVH (lost 3.6% of its revenue), and WAB (which lost 3.5% of its revenue from those two countries).  The biggest corporate winners from the war are LMT, RTX, NOC, and GD, all of which have received new multi-billion dollar orders for everything from Javelin missiles (LMT), to HIMARS rocket systems (LMT), to Stinger missiles (RTX), to Stryker fighting vehicles (GD), to Abrams tanks (GD), to heavy-caliber ammunition (GD), to drones (AVAV).

With that background, it looks like the bears want to gap markets back lower in all three major indices. Still, this leaves all three major indices basically in a consolidation area of the recent downtrend. (At least at the current premarket prices.) Extension is not a problem either in terms of T2122 or the T-line. We’re sitting at a potential support level at the moment. However, all three major indices also face resistance just above after the last few days. The trend remains bearish in the short term while the basic character of the market has been “chop and thrash back-and-forth” in recent weeks. Yesterday, in particular, was a whipsaw day on the intraday chart. So, continue to show some caution and remember that it’s Friday (payday). So, lock in some profits where you can and prepare your account for the weekend news cycle.

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

See you in the trading room.

Ed

TC2000 Discount

🎯 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 PlansPrivate 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