Markets gapped down modestly (a half of a percent in the QQQ and a quarter percent in the large-cap indices) on Wednesday.  Price then proceeded to meander sideways all day on low volume except for the DIA (which is looking like it will achieve average volume).  This action is giving us black-bodied indecisive Doji candles in all three major indices.  The QQQ managed to retest and fail resistance while the SPY and DIA did not get down to the level of testing support again.

On the day, nine of the ten sectors were in the red with Healthcare (+0.55%) by far the strongest and Energy (-0.65%) and Consumer Cyclical (-0.68%) the weakest sectors.  In the meantime, the SPY was down 0.17%, the DIA was up 0.01%, and the QQQ was down 0.42%.  The VXX was up by more than 1.45% to 15.29 and T2122 has climbed back out of the oversold territory to 20.52.  10-year bond yields were down a bit to 3.42% and Oil (WTI) was off 2.55% to $72.36 per barrel. So, Wednesday was an indecisive day that amounted to a fifth straight down day in the SPY and a fourth straight in the DIA.

In economic news, Q3 Unit Labor Costs rose far less than expected at +2.4% (versus a forecast of +3.1% and the Q2 increase of 3.5%).  Q3 Nonfarm Productivity was also up more than expected at +0.8% (compared to a forecast of +0.6% and the Q2 value of +0.3%). This caused a small gap lower as traders interpreted modestly good economic data as not pushing the Fed in either direction.  Later in the morning, we saw EIA Weekly Oil Inventories fall more than expected at -5.187 million barrels (versus the forecast of -3.305 million barrels but still nowhere near as much of a drawdown as the prior week’s 12.580 million barrels).

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In stock news, LUV reinstated its dividend Wednesday after a three-year suspension.  The CEO of the company cited a strong return of travel demand as he announced the company will pay $0.18/share to shareholders of record on January 31.  Later, Reuters reported that AMZN was offline mid-morning.  No details on the cause of the outage were given.  In other AMZN news, Washington DC has sued the company for diverting tips intended for delivery drivers to its own coffers.  Elsewhere, the CEO of C said she expects trading revenue to rise 10% in the current quarter while investment banking fees will fall 60% (in line with industry norms this quarter).  In “you don’t say” news, the CEO of COIN said he expects the revenue of their cryptocurrency trading platform to be down 50% for 2022 compared to 2021.  This comes after their competitor FTX and Celsius Network both filed for bankruptcy as well as the massive crash of crypto prices.  In legal news, CVNA is meeting with lawyers and bankers to discuss ways to restructure its debt load with the risk of bankruptcy rising.

In government news, US lawmakers declined to exempt BA from a looming deadline for a new safety standard related to its “737 Max” jets.  This loss will mean BA will need to rework safety systems on new planes before they can be certified by the FAA.  Meanwhile, after hours, GOOGL, ORCL, AMZN, and MSFT were awarded $9 billion in contracts by the Dept. of Defense related to “Cloud services.”  This comes a year after an AMZN lawsuit killed the previous awarding of these contracts to MSFT (based on bias introduced into the procurement process by former-President Trump).

In energy news, crude oil (WTI) fell again Wednesday in volatile trading, reaching close to the lowest level in a year.  The causes this time were the EIA report that showed an unexpected inventory build of 6.2 million barrels of distillates (like diesel fuel).  This post-refining inventory glut more than outweighed the crude oil inventory drawdown of 5.2 million barrels and the fall came in spite of news that Chinese oil imports reached the highest level in 10 months in November.  In other energy news, PSX announced that was one fatality and another contract employee injured in a crane accident at its Wood River IL refinery.

After the close, GEF and GME reported misses on both the revenue and earnings lines.  So far this morning, GMS, CIEN, KFY, and MOMO all reported beats on both the top and bottom lines. (HOV reports at 9:15 am.)

Overnight, Asian markets were mixed but leaned bearish with Hong Kong (+3.38%) and outlier on the post-Covid China opening news.  Australia (-0.75%), Taiwan (-0.53%), and South Korea (-0.49%) led the region lower.  Meanwhile, in Europe, the exchanges are mostly in the red at midday.  The FTSE (-0.05%), DAX (-0.34%), and CAC (-0.26%)  are typical of the continent with only three smaller exchanges in the green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest green opening ahead of Jobless Claims.  The DIA implies a +0.13% open, the SPY is implying a +0.20%) open, and the DIA implies a +0.20% open at this hour.  10-year bond yields are up to 3.447% and Oil (WTI) is up 2.19% to $73.55/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims (8:30 am).   The major earnings reports scheduled for the day include Thursday, we hear from CIEN, GMS, HOV, and KFY before the open.  Then after the close, AVGO, CHWY, COO, COST, DOCU, LULU, and RH report.

In economic news later this week, on Friday, November PPI and Michigan Consumer Sentiment are reported.  In earnings later this week, on Friday, we hear from LI.

As stated above, Hong Kong skyrocketed overnight on the China opening story. Specifically, local Hong Kong media reported that the city is considering the outdoor mask requirement and reducing the isolation period for those who test positive for Covid-19. In addition, the Hong Kong government is considering replacing the need for two negative PCR tests with one rapid-antigen test for inbound travelers. Elsewhere, the Netherlands (home of ASML) appears to be falling in line with President Biden’s recently expanded chip sanctions for China (which restrict the sale of equipment used in the production of chip Fab facilities and which ASML is one of the world leaders in producing).

With that background, it looks like markets are setting up for a small gap higher, moving against the recent downtrend. Just remember Monday, when a similar gap-up turned into a slow all-day rout by the Bears. Over-extension is not yet a problem either in terms of the T-line (8ema) or the T2122 indicator. The short-term trend remains bearish within the mid-term bullish trend now broken. Only the large-caps indices still have support close below with the QQQ now not far below resistance (broken support). So, if the bulls cannot rally to hold those support levels we could see a bearish run for several percent in the near future.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: CLX, PUMP, BK, PAAS, ANF. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday markets opened flat only for all three major indices to start a long, steady selloff that lasted until 3:30 pm.  However, the shorts took profits the last 30 minutes of the day to take us out up off the lows. The SPY and QQQ both also failed their uptrend lines during the day.  This action gave us big black candles with small wicks at both ends.  All three major indices also retested and failed their T-lines (8ema) on the day.  This action took place on a larger-than-average volume in the DIA with a bit less than average volume in the SPY and QQQ.

On the day, nine of the ten sectors were in the red with only the Utilities (+0.11%) able to stay in the green while Technology (-2.23%) led the way lower. In the meantime, the SPY was down 1.45%, the DIA was down 1.05%, and the QQQ was down 2.07%. The VXX was up by more than 3% to 15.07 and T2122 has dropped into the oversold territory at 15.85.  10-year bond yields were down a bit to 3.531% and Oil (WTI) was off 3.38% to $74.35 per barrel.  So, Tuesday was slow melt which saw the large caps close down a fourth straight day and the QQQ close lower for the third straight session.

In economic news, October Imports were up about $3.5 billion while October Exports fell just under $2.5 billion. This gave us an October Trade Balance deficit that was a bit less than expected at -$78.20 billion (compared to a forecast of -$80 billion) but also above the prior month’s actual of -$74.10 billion.  Then after the close, the API Weekly Crude Oil Stock Report saw a larger-than-expected drawdown at -6.426 million barrels (versus a forecasted drawdown of 3.884 million barrels and last week’s drawdown of 7.850 million barrels).

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In stock news, the EU Privacy Watchdog group ruled that META can no longer run ads based on users’ personal data without the users’ explicit consent.  On this side of the pond, the CEO of BAC told Bloomberg that the company will be slowing hiring as fewer than expected employees are leaving the company, but continues to seek talent.  This stands in contrast to MS, which let 2% of its workforce (1,600 people) go on Tuesday.  In other news, Bloomberg reported AAPL has scaled back and delayed (until 2026) its plans to offer self-driving car software for electric vehicles.  Meanwhile, a US District Judge ruled in favor of GSK, PFE, and SNY throwing out 50 thousand of US lawsuits that had claimed the heartburn drug Zantac caused cancer.  However, about 10,000 similar cases in state and local courts remain intact.  Finally, Reuters reports that MOS says that it is cutting potash production at its Saskatchewan Canada mine citing slower-than-expected demand.

In energy news, Oil (WTI) closed very near a one-year low on Tuesday.  This comes as Fed and recession fears have overcome last month’s OPEC+ production cuts.  Earlier in the day, the EIA released projections that US oil production for the year would rise marginally more than their previous estimates to 11.87 million barrels per day average (compared to the previous estimate of 11.83 million barrels per day).  They also now estimate that 2023 production in the US will reach 12.34 million barrels per day.  Still, they expect US oil consumption to be 20.36 million barrels per day and forecast that will rise to 20.51 million barrels per day in 2023.

After the close, PLAY and TOL reported beats on both the revenue and earnings lines.  Meanwhile, CASY missed on revenue while beating on earnings.  Unfortunately, SFIX missed on both the top and bottom lines.  It is also worth noting that TOL and SFIX have both reduced their forward guidance.

Overnight, Asian markets leaned to the downside.  Hong Kong (-3.22%) was an outlier while Australia (-0.85%), Singapore (-0.83%), and Japan (-0.72%) paced the losses.  Only Shenzhen (+0.17%) managed to stay green.  Meanwhile, in Europe, we see a similar picture taking shape at midday.  Only the FTSE MIB (+0.01%) and Greece (+0.15%) are in the green while the FTSE (-0.05%), DAX (-0.39%), and CAC (-0.41%) lead the way lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a red start to the morning.  The DIA implies a -0.29% open, the SPY is implying a -0.45% open, and the QQQ implies a -0.70% open at this hour.  10-year bond yields are up slightly to 3.54% and Oil (WTI) is on the green side of flat at $74.35/barrel in early trading.

So far this morning, THO and CPB reported beats on the revenue and earnings lines.  Meanwhile, UNFI beat on revenue while missing on earnings.  (ASO, BF.B, and OLLI all report later but before the opening bell.) 

The major economic news events scheduled for Wednesday include Q3 Labor Cost and Q3 Nonfarm Productivity (both at 8:30 am), and EIA Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day include ASO, CPB, WLY, THO, and UNFI before the open.  Then after the close, GME and GEF report.

In economic news later this week, on Thursday we get Weekly Initial Jobless Claims.  Then on Friday, November PPI and Michigan Consumer Sentiment are reported.  In earnings later this week, on Thursday, we hear from CIEN, GMS, HOV, KFY, AVGO, CHWY, COO, COST, DOCU, LULU, and RH.  Finally, on Friday, we hear from LI.

Overnight the Democrats expanded their tiny majority in the US Senate as Senator Warnock won the GA runoff election. Elsewhere, the first electric vehicle maker unionization vote is taking place in Ohio today and Thursday as the UAW seeks to unionize the GM battery plant in Northeastern Ohio. In non-election news, the large banks warned of recession yesterday and are preemptively cutting jobs to preserve profitability. For their part, WMT says the consumer is strong and we actually need a recession to tame inflation. This all came as the demand for mortgages fell again last week, even as mortgage interest rates fell from 6.49% to 6.41% for a 30-year, fixed-rate, conforming loan. The Mortgage Bankers Assn. said demand fell by 1.9% last week (but were 86% lower than the same week of 2021).

With that background, it looks like premarkets are down again as the QQQ test support and the SPY is reaching to do the same. DIA has not gotten there yet, but could do so on a bad day. The short-term trend remains bearish within the mid-term bullish trend no broken. Note that we have no extension from the T-line is only potentially a problem in the QQQ at the moment. However, we did dip into the oversold area of the T2122 indicator yesterday. Of course, we do have Q3 Productivity and Labor Cost data at 8:30 am, but those are not usually huge market movers. So, overall, if the bulls cannot rally to hold support levels we could see a bearish run for several percent in the QQQ and SPY (with the DIA holding up better on the rotation to the safety of the mega-cap names).

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened down on Monday (the large caps gapping down about 0.70% and the QQQ gapping down about 0.80%).   Then, after 90 minutes of waffling, the three major indices sold off until 3 pm.  However, we saw a little profit-taking by the shorts as we made a small bounce up off the lows at the close.  This action gave us large-bodied, black candles with wicks at both ends.  All three indices crossed back below their T-lines (8ema) on below-average volume.  This all happened on lower-than-average volume again.  However, the DIA was at least close to its average volume.

On the day, all ten sectors are in the red with the Energy (-3.03%) sector leading the way lower while the Utilities (-0.85%) sector lagged behind.  In the meantime, the SPY was down 1.80%, the DIA was down 1.37%, and the QQQ is down 1.68%.  The VXX was up by 1.74% to 14.63 and T2122 has dropped out of the overbought territory to 32.80.  10-year bond yields are up to 3.575% and Oil (WTI) was down 3.26% to $77.37 per barrel.  So, Monday started the week off bearishly with price testing the uptrend line (since mid-October) but still having potential support a couple of percent below.

In economic news, the November Services PMI came in above expectations at 46.2 (versus 46.1 which was forecasted, and 47.8 in October). Later, the ISM Non-mfg. PMI came in further above expectations at 56.5 (versus 53.3 forecasted and 54.4 in October).  November ISM Non-Manufacturing Employment Index was up to 51.5 from October’s 49.1 value.  Finally, October Factory Orders also came in above expectation at +1.0% (compared to a forecast of +0.7% and +0.3% in September ).  So, overall we got several pieces of better-than-expected economic data…which traders took as a bad thing, expecting it to potentially give the Fed reason to raise three-quarters of a percent again next week.

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In stock news, on Monday, Reuters reported that the Shanghai TSLA plant output fell 20% in November.  However, TLSA replied by putting out a statement claiming that was “false news.”  Elsewhere, T settled charges with the SEC, agreeing to pay $6.25 million for disclosing nonpublic information to select research analysts.  Later in the day, it was reported that the state of TX has offered a path for “sanctioned firms” to get off the TX boycott list. (TX is boycotting some financial firms as investments because the oil state didn’t like the financial company’s policy of not backing companies that do not limit emissions.)  The only US firm on the current TX boycott list is BLK.  In a twist to last week’s supply chain story, investor groups at NSC and UNP have proposed shareholder resolutions that the companies offer workers a “reasonable amount” of paid sick leave (instead of none, which is now given and was the main issue that the unions had been holding out to get).  After the close, XOM raised the annual base salaries of all the top executives including the CEO effective January 1.  Also, after the close, PEP announced it will be cutting hundreds of headquarters jobs.

In miscellaneous news, overnight GS reported that they are seeing big bets from professional investors that a bad recession can be avoided. This comes in the form of $5 trillion in sector positioning that is typical for a soft landing in a business cycle. Elsewhere, China is reporting that last month’s new wave of Covid cases is starting to tail off. This comes as the Chinese government said a negative test would no longer be required to enter many public venues in Beijing. Finally, Bloomberg reports that there is a major hidden risk in the global finance system. It seems that of the $65 trillion of dollar debt held by foreign financial institutions, $39 trillion is hidden in the form of derivatives that are not held on the balance sheet. This amount is double the debt they do report on balance sheets and 10 times their capital. (You may recall that such swaps and derivatives were the cause of the 2008 financial crisis caused in the US.) So, any shock to the Forex market could potentially crash the major non-US banks, which would likely precipitate governments needing to step in and bail out the system as the US did in 2008, otherwise, the collapse would definitely crash global markets and economies.

So far this morning, FERG, AZO, and SIG all reported beats on both the top and bottom lines.  However, HEPS missed on both the revenue (badly) and earnings lines.

Overnight, Asian markets were mixed but leaned to the red side on modest moves.  Shenzhen (+0.67%), Japan (+0.24%), and Shanghai (+0.02%) were the green exchanges.  Meanwhile, Taiwan (-1.68%), South Korea (-1.08%), and Thailand (-0.53%) led to the downside.  In Europe, we see a similar and perhaps more down picture taking shape at midday.  The FTSE (-0.29%), DAX (-0.13%), and CAC (-0.19%) are leading the way on volume as usual with a couple of the smaller exchanges even more red and only three modestly green exchanges in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.14% open, the SPY is implying a +0.18% open, and the QQQ implies a +0.29% open at this hour.  10-year bond yields are down again to 3.553% and Oil (WTI) is off 1.12% to $76.06/barrel.

The major economic news events scheduled for Tuesday include Oct. Imports/Exports and Oct. Trade Balance (both at 8:30 am), and API Weekly Crude Oil Stocks Report (4:30 pm).  The major earnings reports scheduled for the day include AZO, FERG, HEPS, and SIG before the open.  Then after the close, CASY, PLAY, and TOL report. 

In economic news later this week, on Wednesday, Q3 Labor Cost, Q3 Nonfarm Productivity, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims.  Finally, on Friday, November PPI and Michigan Consumer Sentiment are reported.

In earnings later this week, on Wednesday, ASO, CPB, WLY, THO, UNFI, GME, and GEF report.  On Thursday, we hear from CIEN, GMS, HOV, KFY, AVGO, CHWY, COO, COST, DOCU, LULU, and RH.  Finally, on Friday, we hear from LI.

President Biden is in AZ for a ceremony at the new TSM semiconductor Fab construction site. TSM has upped its investment in the location to $40 billion, which will double the number of Fabs built to two. Last week TSM announced they will build 4nm chips (next-gen state of the art) at those facilities rather than 5nm (current-gen state of the art) at the urging of AAPL, NVDA, and AMD. (Those TSM customers would like the chips made in the US to reduce supply chain shipping risks…let alone the risk of Chinese action against Taiwan. By the same token, the move also reduces TSM risk by no longer having all its eggs in one basket so to speak.)

With that background, it looks like premarkets are up modestly and perhaps looking to retest the T-line (8ema) as resistance. Of course, we have trade data at 8:30 am, but that is not likely to be a huge market mover. The short-term trend remains bearish within a mid-term bullish trend. Remember that the SPY and QQQ are now at (or near) uptrend support lines while the DIA seems to be wandering sideways looking for direction. Also, note that we have no extension problem either direction from either the T-line or in terms of the T2122 indicator.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: INFN, CLX, U, AMD, TLT, VLDR, SBSW. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The strong economic data put fear into the markets before the open causing the SPY to gap down 1.28%, the DIA to gap down 1.03%, and the QQQ to gap down a huge 1.77%.  However, the bulls stepped right in to start a gradual and wavy rally, working their way back up across the gap all day long until there was a little profit taking the last 30 minutes.  On the day, we saw all 3 indices retest and bounce back up off their 8ema (T-line).  There may also have been a bit of rotation toward mega-cap safety today as the DIA was the least hurt of the three major indices.  This action gave us gap-down, large, white-body candles with modest upper wicks.  And just like early in the week, volume was below average in the SPY, DIA, and QQQ.

On the day, five of the ten sectors were in the green again with the Basic Materials sector (+0.76%) leading the market while the Communications Services sector (-0.54%) lagged.  In the meantime, the SPY was down 0.12%, the DIA was up 0.10%, and the QQQ was down 0.40%.  The VXX fell by 1.78% to 14.38 and T2122 remains well into the overbought territory at 89.36.  10-year bond yields fell to 3.492% and Oil (WTI) was down 1.08% to $80.34 per barrel.  So, Friday started with fear over what the Fed might do in the face of better jobs data, but the bulls immediately responded and kept the pressure on the bears all day long.

In economic news, November Nonfarm Payrolls increased by 263k (compared to the 200k that was forecasted and 284k gained in October after revision). At the same time, Nov. Private Nonfarm Payrolls rose 221k (versus the gain of 190k forecasted and the 248k that was gained in October).  Meanwhile, the Participation Rate fell slightly from 62.2% to 62.1% and the November Unemployment Rate held steady at 3.7%.  In terms of the Annualized Average Hourly Earnings, the November value jumped more than expected at +5.1% (versus the +4.6% forecasted and the +4.9% in October).  So, all in all, this was not information the Fed wanted to hear as jobs growth and wage inflation remain stronger than expected.  (As mentioned above, the fear of Fed reaction was the cause of the premarket crash and the opening gap-down.)

SNAP Case Study | Actual Trade

In stock news, the Wall Street Journal reported that UAL is nearing a deal to order as many as 100 of the 787 Dreamliner jets from BA.  Elsewhere, Reuters reported that MRK is working to change the formulation of its $20 billion per year Keytruda cancer treatment to make it injectable. This would prevent the patents on that drug from beginning to expire in 2028 and prevent competition in the US until at least 2040.  In legal news, after the close, ABB agreed to pay $315 million to the US Dept. of Justice, the SEC, and South African authorities in order to resolve a bribery case related to the South African state-owned energy company.

In miscellaneous news, the Financial Times reported Friday that the state of FL is now considering a reversal of the April decision to strip DIS of the ability to self-govern in the area around its theme parks (after DIS opposed a state GOP culture war bill).  This may or may not be related to new CEO Iger recently saying he was “sorry to see us (DIS) get dragged into the battle.”  It is worth noting that Iger also opposed the bill, but was not a part of DIS at that time.  Meanwhile, ecommerce software vendor BIGC reported that holiday sales are off to a blistering pace this year.  They stated that Thanksgiving Day sales were up 23% and Cyber Week sales were up 32% this year among their customers.

In energy news, the EU agreed Friday to a $60 price-cap on Russian oil shipped via sea.  This comes into effect at the same time as the EU ban on seaborne Russian oil (as of today).  In response, Russia said it will not ship any oil that is subject to that price cap. Then on Sunday, OPEC+ met and decided to “pause” for the moment.  In other words, they will not reduce oil production nor will they increase oil production at this time.  They will wait to see how the new oil sanctions on Russia play out. Finally, the Kuwait delegation to OPEC+ said Sunday that (in a nod to global recession) the oil-importing countries do not plan to import more oil in 2023 than they did in 2022.

After the close, ULTA and VEEV both reported beats on the revenue and earnings lines.  However, MRVL reported misses on both the top and bottom lines.  It is worth noting that ULTA raised its forward guidance while MRVL and VEEV both lowered their forward guidance.

Overnight, Asian markets were mixed but mostly green.  Malaysia (-0.69%), South Korea (-0.62%), and Thailand (-0.41%) were the only red.  Meanwhile, Hong Kong (+4.51%) was an outlier as Shanghai (+1.76%) and Shenzhen (+0.92%) led the region higher.  In Europe, we see a similar story taking shape at midday. The FTSE (+0.19%), DAX (-0.60%), and CAC (-0.53%) are typical with only Russia (+1.11%) being an outlier in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a red start to the day.  The DIA implies a -0.42% open, the SPY is implying a -0.46% open, and the QQQ is implying a -0.34% open.  10-year bond yields are back up to 3.521% and Oil (WTI) is up 2.63% to $82.08/barrel in early trading.

The major economic news events scheduled for Monday are limited to the November Services PMI (9:45 am), as well as Oct. Factory Orders and ISM Non-Mfg. PMI (both at 10 am).  The major earnings reports scheduled for the day include SAIC before the open.  There are no major reports scheduled for after the close. 

In economic news later this week, on Tuesday we get Oct. Imports/Exports, Oct. Trade Balance, and API Weekly Crude Oil Stocks Report.  Then Wednesday, Q3 Labor Cost, Q3 Nonfarm Productivity, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims.  Finally, on Friday, November PPI and Michigan Consumer Sentiment are reported.

In earnings later this week, on Tuesday we hear from AZO, FERG, HEPS, SIG, CASY, PLAY, and TOL.  Then Wednesday, ASO, CPB, WLY, THO, UNFI, GME, and GEF report.  On Thursday, we hear from CIEN, GMS, HOV, KFY, AVGO, CHWY, COO, COST, DOCU, LULU, and RH.  Finally, on Friday, we hear from LI.

Overnight news out of China, showed Chinese authorities easing Covid testing requirements and hinting that they may loosen their approach to combatting Covid. This rallied Chinese stocks and combined with a guess that Russia will follow through and cut supply due to the price-caps has Oil traders pushing crude higher. At this point, we have other data coming, but it will all be seen in light of how the market expects the Fed to react to that data. Bulls really want a reduced 0.50% hike next week and every hint that the economy is not falling in recession gives the Bears hope that the FOMC will help them out with a 0.75% hike.

With that background, it looks like premarkets are pulling back about half of a percent from Friday’s close as price continues to wobble around and try to find its next direction after last Wednesday’s huge bullish move. Remember that the SPY and QQQ remain at/near a resistance level from prior highs and lows as well as their longer-term downtrend lines. Also, note that we remain extended in terms of the T2122.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped up modestly in all three major indices Thursday, with follow-through to the upside for 30 minutes. However, at that point, the SPY and QQQ had hit resistance and their long-term downtrend lines.  This led to an even stronger snap-back selloff for 30 minutes, followed by a sideways series of tightening waves with a modest overall bullish trend the rest of the day.  The DIA took the worst hit by having the weakest bullish trend in its recovery ride.  This action is giving us indecisive Doji or Spinning Top candles in the SPY and QQQ as well as just a black candle with a lower wick (it was a Dark Cloud Cover at one point) in the DIA.  Interestingly, of the 3 major indices, DIA is showing the highest volume relative to their average daily volume, while the other two did not reach average volume. 

On the day, five of the ten sectors were in the green with the Technology (+0.50%) and Healthcare (+0.49%) sectors leading the market while the Energy sector (-0.97%) lagged.  In the meantime, the SPY was down 0.08%, the DIA was down 0.52%, and the QQQ is up 0.12%.  The VXX fell by 1.88% to 14.64 and T2122 remains well into the overbought territory at 91.75.  10-year bond yields fell sharply to 3.512% and Oil (WTI) is up 0.89% to $81.26 per barrel.  So, Thursday was an indecisive rest day after Wednesday’s explosive rally and in front of Friday’s November Payrolls data.

In economic news, the Fed’s favorite inflation gauge (PCE Price Index) came in slightly below expectations for October at 0.3% (versus 0.5% forecasted and 0.3% in Sept.).  The year-on-year version of that same PCE Price Index data came in at 6.0% (exactly as forecasted, but down 0.3% from the September reading).  At the same time, Weekly Initial Jobless Claims came in lower than expected at 225k (compared to 235k that was forecasted and 241k the previous week).  Later in the morning, Nov, Mfg. PMI came in slightly above expectation at 47.7 (versus a 47.6 forecast and a prior month’s reading of 47.6).  However, the Nov. ISM Mfg. PMI came in lower at 49.0 (compared to a forecast of 49.8 and the Oct. reading of 50.2).  So, overall, inflation may be coming down a bit and unemployment is still better than expected, but Manufacturing expectations are now coming down.

SNAP Case Study | Actual Trade

In stock news, ATUS announced that it has decided to keep its Suddenlink business unit after it underwent a strategic review.  In addition, Bloomberg reported that TSM will be making advanced 4-nanometer chips in its new AZ plant (when it opens in 2024) at the request of major customers AAPL and NVDA.  Elsewhere, the CEO of MS told a conference that the company would make “modest job cuts” but that this was just normal after years of strong growth and really was not due to recessionary pressures.  At the same time, Reuters reports that META has reached out (and continues to do so) in an attempt to settle multiple EU antitrust regulator investigations.  The uncertainty of a potential fine of 10% of global turnover is apparently uncomfortably large for the META board and management team.  ROIV and PFE launched a joint venture on a new inflammatory disease drug which the companies value as a $15 billion opportunity in the US market.  CVX announced that it has purchased ships of Venezuelan crude oil after the Bide n Administration relaxed restrictions on that last week.  Reuters reports that VLO, PBF, and Citgo Petroleum are all vying to purchase portions of those cargos.

In miscellaneous news, the US Dollar slumped hard against major trading currencies as inflation moderates and Fed Chair Powell’s speech was more dovish Wednesday.  Then late on Thursday, NY Fed President Williams (a modest hawk) said he feels “we have a ways to go in terms of the Fed Funds target.”  When asked about the increase increments, Williams did not commit but did say “slowing the pace would simply mean stepping down one step” (implying a 0.50% hike as is widely expected now). However, he also reiterated his Monday statement that the FOMC may have the space to cut rates sometime in 2024.  Finally, after the close, Fed Vice-Chair of Supervision Barr said he is among the central bankers who will back slowing the pace of rate hikes at the Dec. 13-14 meeting.  He went on to say “now that we’re in restrictive territory…I think that it’s smart (to slow the pace of increases) and that would give us (Fed) space to think about how high it needs to be and how long we need to keep it at that rate to get the job done.”

In supply chains news, following up on the House vote to approve the bill, the Senate voted 80-15 to approve a bill forcing unions to accept the September tentative deal and prohibiting a rail strike. The separate bill that amended the deal to add 7 paid sick days to the deal (instead of 1 per year) failed to pass.  (It had already passed in the House.)  So, the bill to avert the strike will go to the President who has already said he will sign it.  Industry analysts suggest that some of the rail workers will quit after receiving back pay that is due to them under the deal since they will not be getting the paid sick time they had demanded.  If that were to materialize in large numbers, it would have the same impact as a strike, potentially stopping 35%-40% of US freight (this number is higher than the normal 30% because the Mississippi River is too low for barge traffic and much more bulk freight like grains and fuel must travel by rail or truck).

After the close, ULTA and VEEV both reported beats on the revenue and earnings lines.  However, MRVL reported misses on both the top and bottom lines.  It is worth noting that ULTA raised its forward guidance while MRVL and VEEV both lowered their forward guidance.

Overnight, Asian markets are red across the board to end the week.  South Korea (-1.84%), Japan (-1.59%), and Singapore (-1.02%) led the region lower. Meanwhile, in Europe, the bourses are mixed but lean to the red side at midday.  The FTSE (-0.25%), DAX (+0.28%), and CAC (-0.20%) are typical with a couple of the smaller exchanges making larger moves in early afternoon trade.  Finland (+1.17%) and Norway (-1.08%) are examples there.  However, as of 7:30 am, US Futures are pointing toward a very modest redstart to the day.  The DIA implies a -0.14% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.22% open at this hour.  10-year bond yields are flat at 3.512% and Oil (WTI) is up again by 0.71% to $81.80/barrel in early trading.

So far this morning, GCO reported beats on both the revenue and earnings lines. However, it also lowered the forward guidance. (CBRL is scheduled to report at 8 am.)

The major economic news events scheduled for Friday include November Avg. Hourly Earnings, Nov. Nonfarm Payrolls, Nov. Unemployment Rate, and Nov. Participation Rate (all at 8:30 am).  The major earnings reports scheduled for the day include CRBL and GCO before the open.  There are no reports scheduled for after the close. 

As we wait on the November Payrolls data, the consensus forecast is calling for a 200k increase in November as well as for the Unemployment rate to hold steady at 3.7%. If that holds true, it would indicate a reduction in job growth (down from +261k in October). However, the question would then be “Is that enough for the Fed, or do they need to see a negative number before taking their foot off the rate-hike accelerator?” The market reaction will tell us what the average trader thinks the answer to that question will be, but we won’t know for sure for another two weeks.

With that background, it looks like premarkets are just treading water until the data dump at 8:30 am. Beyond this, the SPY and QQQ remain at/near a resistance level from prior highs and lows as well as their longer-term downtrend lines. Also, note that we remain extended both in terms of the T-line (8ema) and T2122. So, keep Warren Buffett’s first rule of making big money in the market “Don’t lose big money in the market.” In other words, caution is the better part of valor…be careful.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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