While economic data and Fed members suggest more work on inflation is required, the market has covered its eyes and ears, deciding no news is bad news, at least for now. As a result, the SPY, QQQ, and IWM continue to extend away from their 50-day averages as the DIA chops in a wide multiweek range. Before the bell today, we have another big round of market-moving economic and earnings reports to keep the price action challenging. Expect the big-point whipsaw to continue as fighting the Fed remains in vogue.
Asian markets traded mixed but primarily higher overnight, despite Japan posting its worst-ever trade deficit numbers. European markets continue to extend higher, with the CAC reaching an all-time high despite the Russian spring offensive picking up steam and possible recession. U.S. futures suggest an uncertain open, but with several pending market-moving reports, anything is possible. Expect considerable price volatility as investors digest the data.
Economic Calendar
Earnings Calendar
Notable reports for Thursday include AEM, AMAT, AAWW, BJRI, BLMN, CHUY, COHU, CEG, CROX, ED, DDOG, DLR, DOCN, DASH, DKNG, DBX, ETR, HAS, HSIC HUBS, H, LH, OGN, PARA, POOL, SHAK, SWAV, SO, TXRH, TSEM, USFD, VMC, WE, & ZBRA.
News & Technicals’
The European Union’s embargo on Russian oil products came into effect on Feb. 5, building on the $60 oil price cap implemented by the G-7 (Group of Seven) major economies on Dec. 5. China, India, and Turkey, in particular, have ramped up purchases to partially offset a fall in Russian crude exports to Europe of 400,000 barrels a day in January. According to the IEA’s oil market report, Russian net oil output was down by only 160,000 barrels a day from pre-war levels in January, with 8.2 million barrels of oil shipped to markets worldwide.
Bitcoin surged 11% to $24,655.94 at around 3:36 a.m. ET while ether was up more than 8% at $1,684.59, according to CoinDesk. The value of the entire cryptocurrency market rose more than $84.8 billion in the 24 hours before 3:39 a.m. ET. Crypto markets were on edge earlier this week after a step in regulatory scrutiny from U.S. authorities on stablecoins.
Ford expects production of its electric F-150 Lightning pickup to be down through at least the end of next week to address a potential battery issue that resulted in a vehicle fire. The updated timing comes a day after Ford confirmed production of the highly watched EV had been suspended at the beginning of last week due to a potential battery issue. However, Ford said it believes engineers have found the root cause of the issue.
The market seems to be in a phase where no news is bad news, as economic reports suggest the rate will continue to rise and remain elevated for extended periods. However, fighting the Fed or perhaps ignoring the potential consequences of doing so is now in vogue. Crypo’s also entered the game, surging 11% in the last 24 hours despite the SEC crackdown on the sector. Through all this pushing and shoving, the Dow remains locked in a multiweek consolidation with a price range of nearly 800 points. The tech sector continues to stretch higher even as bond yields and the U.S. dollar strengthens. How much longer this lasts is anyone’s guess but enjoy the ride and keep watch for signs of a reversal that could be substantially punishing once the reality of rate increases and recession returns.
Tuesday’s index prices went wild, generating multiple whipsaws as investors reacted to and tried to sort out the future ramifications of the CPI numbers. Unfrotunitally the big point swings may well continue into Wednesday as the market reacts to market-moving economic reports and a slew of earnings events to keep speculation volatility high. So plan carefully, as the significant point moves make it near impossible to hold onto a trading edge. Remember, cash is a position that protects your capital in these dangerous conditions.
While we slept, Asian markets reacted negatively to the hotter-than-expected CPI numbers seeing red across the board at the close. However, European markets trade mainly higher this morning seemly less concerned about possible inflationary economic impacts. Facing another big day of possible market-moving reports, the U.S. futures point to a lower open but rise from overnight lows waiting for retail sales figures.
A Goldman credit card would’ve been part of a suite of products to help enhance the profit margins and loyalty of its retail efforts, according to people with knowledge of the matter. However, when it scaled back plans to become the primary bank for the masses, the rationale for a Goldman card evaporated, said one of the people. Solomon acknowledged last month that the bank’s ambition in consumer finance outstripped its ability to execute on them.
A costly trading decision sees the annual net profit of Barclays dropping by 19%. The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion throughout 2022.
The Biden administration wants at least 500,000 publicly accessible electric vehicle chargers on US roads by 2030. Now, companies that build and operate charging networks — including Tesla, GM, Ford, ChargePoint, and others — stand to reap the rewards of federal funding if they meet new requirements. For example, white House officials announced that Tesla will open up 7,500 of its charging stations by the end of 2024 to non-Tesla EV drivers. Previously the company’s chargers in the U.S. were used mainly by and made to be compatible with Tesla Evs
In reaction to yesterday’s CPI, the indexes went wild, producing multiple whipsaws as investors grappled with what it means for future rate increases and the possibility of an overall economic slowdown. However, despite the hefty price swings, current support and resistance levels held, leaving more questions than answers as we face another day of likely market-moving reports. Along with impactful economic reports such as retail sales and industrial production, we have a hectic day of earnings to keep prices volatility high and traders making speculative bets on the direction. So, once again, plan for the possibility of big index point moves and continue to watch for those quick, sharp whipsaws.
Markets gapped down modestly after the CPI report. The SPY gapped 0.31% lower, DIA gapped down 0.29%, and QQQ gapped down 0.51%. However, that was just the start of the all-day whipsaw as the bulls immediately stepped in and rallied all three up to more than fade the gap, reaching the highs of the day at 10:15 am. Then the bears reversed the process driving prices back to new lows by noon. At that point, the bulls took us back up in a slower rally until 1:20 pm when we started a sideways grind. This action gave us indecisive candles (Doji or Spinning Top candles) in both of the large-cap indices and a larger body, but still very indecisive candle in the QQQ.
On the day, five of the 10 sectors were in the green as Technology (+0.84%) led the way higher and Consumer Defensive (-0.59%) lagged behind the other sectors. At the same time, the SPY was down 0.05%, the DIA was down 0.41%, and QQQ was up 0.74%. The VXX lost 3.34% to 11.30 and T2122 fell just a bit and remains just outside of the overbought territory at 77.05. 10-year bond yields spiked to 3.751% and Oil (WTI) is down 1.27% to $79.12 per barrel. So, on the day, we’ve seen a massive whipsaw that fizzled into indecision in the market. All 3 major indices held above their T-lines (8ema) and the overall trend is bullish on just under average volume.
In economic news, the big news of the day was the January CPI which came in higher than expected (but also lower than December) at 5.6% (compared to the forecast of 5.5% and the December value of 5.7%). This resulted in a knee-jerk gap lower in the market that was immediately faded and devolved into a volatile and indecisive day. After the close, the API Weekly Crude Oil Stocks report showed a huge, unexpected build in oil inventories. The report showed a 10.507-million-barrel build (versus the forecast of a 0.321-million-barrel build and last week’s 2.184-million-barrel drawdown). In Fed news, Lael Brainard resigned as the Vice-Chair of the Fed after President Biden named her to head his Economic Advisors. Meanwhile, NY Fed President Williams told reporters that ending 2023 with the benchmark rate between 5.00% and 5.50% “seems to be the right kind of framing.” At the same time, Dallas Fed President Logan told a university audience, “We must be prepared to continue rate increases for a longer period than previously anticipated (if warranted).” However, Richmond Fed President Barkin told Bloomberg “It’s about as expected” (referring to the CPI data) and that “Inflation is normalizing but it’s coming down slowly”. Finally, Philly Fed President Harker said the CPI data did not change his view that the policy rate will have to rise over 5%, but that the Fed was “likely close” (to reaching a sufficiently high enough level to pause).
In stock news, KO said Tuesday that it will push ahead with price hikes in 2023 despite the price-increase halt called by poorer-performing arch-rival PEP. Elsewhere, QSR (owner of Burger King among other chains) named current COO Kuboza to take over as CEO on March 1. Later in the morning, F announced that it had halted production and shipping of its electric F-150 Lightning over what the company called “a potential battery issue.” Meanwhile, Air India announced a massive (record) order for 470 new jets (plus another 25 Airbus jets to be leased). The deal includes 220 planes from BA and 250 planes from EADSY (Airbus). The BA portion of the order includes 190 737 MAX, 20 787 Dreamliners, and 10 777X (mini-jumbos). Meanwhile, TSLA employees in upstate NY announced in a letter to management their intention to form a union. After the close, an SEC 13F filing disclosed that BRKA had increased its holdings of AAPL by over $3 billion in Q4 while it significantly cut its holdings of BK (by 60%) and sold off almost half of its ATVI holdings. BRKA also slashed its holdings of TSM in an odd “trader-like” move since Buffett had only held TSM for a few months.
In stock legal and regulatory news, XOM told a judge that a 10-month lockout of 650 union workers from one of their refineries was not intended to target union employees and was, instead, a move taken to reduce costs and improve profits. (The case is an appeal of an NRLB ruling calling for XOM to compensate the employees for the “illegal lockout” last year after finding the lockout happened after the union notified the company of a potential strike later in the year.) Elsewhere, a US Bankruptcy judge has indicated his intention to dismiss the JNJ talc unit bankruptcy that had been filed in an attempt to shield the parent company from nearly 40,000 lawsuits claiming JNJ talc caused cancer. After the close, the National Transportation Safety Board announced it was opening an investigation into the Dec. 18 incident when a BA 777 operated by UAL sharply dropped 2,200 feet to just 775 feet before recovering.
After the close, ANDE, GXO, ABNB, HLF, SCI, AKAM, WIRE, and CRK all reported beats on both the revenue and earnings lines. Meanwhile, MCY, ENLC, and CLW beat on revenue while missing on earnings. On the other side, CNDT and GDDY missed on revenue while beating on earnings. Unfortunately, DVN and WFG missed on both the top and bottom lines. It is worth noting that ABNB raised its forward guidance while CNDT and GDDY both lowered their guidance.
Overnight, Asian markets leaned heavily to the downside with only India (+0.48%) and Malaysia (+0.28%) in the green. Meanwhile, South Korea (-1.53%), Hong Kong (-1.43%), and Taiwan (-1.42%) led the region lower. In Europe, we see the opposite picture taking shape at midday. Russia (-1.35%), Greece (-1.18%), and Finland (-0.53%) are the only appreciable red while the FTSE (+0.15%), DAX (+0.58%), and especially the CAC (+1.42%) lead the rest of the region higher in early afternoon trade. As of 7:30 am, US Futures are pointing to a start to the day just on the red side of flat. The DIA implies a -0.10% open, the SPY is implying a -0.16% open, and the QQQ implies a -0.17% open at this hour. At the same time, 10-year bond yields are down slightly to 3.751% and Oil (WTI) is down two-thirds of a percent to $78.55/barrel in early trading.
The major economic news events scheduled for Wednesday include NY Fed Empire State Mfg. Index and January Retail Sales (both at 8:30 am), January Industrial Production (9:15 am), December Business Inventories and, December Retail Inventories (both at 10 am), and EIA Weekly Crude Oil Inventories (at 10:30 am). The major earnings reports scheduled for the day include ADI, AVNT, GOLD, BIIB, CHEF, FIS, GNRC, ICL, KHC, LAD, MLM, OC, PSN, RPRX, RBLX, R, SABR, SITE, SAH, SUN, TMHC, TTD, WAB, and WAT before the opening bell. Then after the close, ALB, ALSN, AMED, AEE, AIG, AWK, AR, CF, CSCO, SYH, CPA, ET, EQT, EQIX, HST, INVH, KGC, MRO, NEX, NUS, NTR, QDEL, RSG, REZI, RNG, ROKU, ROL, RGLD, RUSHA, SGEN, SHOP, SUM, SPWR, SNPS, TNET, TROX, TWLO, WCN, WELL, and Z report.
In economic news later this week, on Thursday, we get January Building Permits, January PPI, January Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and a couple of Fed speakers (Mester, Bullard, and Mester again). Finally, on Friday, January Import Price Index and January Export Price Index are reported.
In terms of earnings later in the week, on Thursday, we hear from ARCH, BLMN, CVE, CEG, CROX, CNB, ETR, EPAM, FOCS, GGR, GVA, HAS, HSIC, H KBR, KELYA, LH, NSRGY, NGD, NMRK, DNOW, NRG, OGN, PARA, PBF, POOL, POR, RCM, RS, STNG, SO, SCL, SYNH, TOST, USFD, VC, VNT, VMC, WSO, WST, WE, ZBRA, AEM, AL, AEL, COLD, AMN, AMAT, ATR, BIO, BFAM, ED, CLR, DASH, DKNG, DBX, FBIN, GLOB, IAG, TDS, TXRH, USM, and VALE. Finally, on Friday, ASIX, AMCX, AXL, AN, CNP, CRBG, DE, MD, and PPL report.
So far this morning, KHC, BIIB, ADI, TMHC, OC, WAB, ICL, AVNT, WAT, and CHEF have all reported beats to both the revenue and earnings lines. Meanwhile, ADRNY, GOLD, SAH, MLM, GNRC, RPRX, and TTD all missed on revenue while beating on earnings. On the other side, SUN and PSN both beat on revenue while missing on the earnings line. Unfortunately, LAD and SITE reported misses to both the top and bottom lines. (R and RBLX report later this morning.) It’s worth noting that ADI, TMHC, AVNT, and CHEF all raised forward guidance. However, MLM lowered its forward guidance.
In late-breaking news, TSLA has agreed to open 7,500 of its charging stations in the US to electric vehicles from other car makers. This move was necessary for TSLA to continue qualifying for certain government incentives. Elsewhere, GS announced it is dropping plans for a branded credit card as it takes another step further away from consumer banking as part of its strategic reorganization. Finally, US mortgage rates rose to 6.39% (from 6.18%) for a 30-year, fixed-rate, conforming loan. This spike had the expected effect on mortgage applications as overall volume fell 7.7%. (Including a 13% fall in refinance applications and a 6% fall in new home purchase applications.)
With that background, it looks like markets are looking to open very modestly lower (at least before the data dump this morning), while holding above the T-line (8ema) in all three major indices. However, the trend in all three remains bullish with resistance not too far above in the SPY and DIA as well as to a lesser extent in the QQQ. The volatility should not be as bad as yesterday’s CPI-induced whipsaw. However, be cautious regardless.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: 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.
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 bulls produced a Monday reversal on surprisingly low volume as they rushed to buy up risk ahead of the pending CPI report that could produce a substantial price move. Will the bulls get rewarded, or will the report produce a Valentine’s day massacre? We will soon find out and then turn our attention to Wednesday’s market-moving Retail Sales and Industrial production numbers. A slew of earnings will only add to the challenge, so buckle up and prepare for a wild ride over the next few days,
Asian markets mostly gained relatively modest results as Japan nominated their next central bank chief. European look to extend yesterday’s reversal rally, projecting confidence in the pending inflation number. Despite reports that the CPI report could deliver some disappointing sticky inflation reading, the U.S. trade higher in the premarket, hoping to extend yesterday’s big upward push.
Economic Calendar
Earnings Calendar
Notable reports include ABNB, AKAM, ANDE, BTU, CLF, CRK, CNDT, DVN, GDDY, GFS, GXO, HLF, HWM, KO, MAR, QSR, SCI, SU, TRU, TRIP, UPST, WEBR, & ZTS.
News & Technicals’
All market eyes Tuesday will be on the release of the Labor Department’s consumer price index, a widely followed inflation gauge. Economists are expecting that the CPI will show a 0.4% increase in January, which would translate into 6.2% annual growth. However, there’s some indication the number could be even higher. The Federal Reserve is determined to keep fighting inflation so that the report could harden their position.
Inflation in the U.S. is likely to be “far stickier” and could last a decade, according to Bill Smead, chief investment officer at Smead Capital Management. Wall Street is gearing up for news on key inflation data later Tuesday as the Labor Department will release its January consumer price index.
President Joe Biden is expected to name Federal Reserve Vice Chair Lael Brainard to the White House’s top economic policy position as early as Tuesday. Brainard would replace White House National Economic Council (NEC) Director Brian Deese, who has announced his resignation.
We began the week with another reversal as the bulls rushed to buy, pressing resistance levels, seemingly unconcerned about the potential big-point reaction from the pending CPI report. While the VIX registered a reversal of fear, volume was surprising considering the big move in the indexes. Expect a substantial price reaction as the number comes out, and don’t rule out the possibility of a wild whipsaw before the open. Anything is possible, and the market will turn its eyes toward the Retail Sales and Industrial Production numbers on Wednesday morning.
On Monday, stocks gapped very modestly higher (up 0.16% in the SPY, up 0.05% in the DIA, and up 0.45% in the QQQ) at the open. Then a slow, but steady rally took over until 12:45 pm. From that point, all three major indices ground sideways with the QQQ even having a slightly bearish trend to that grind for the rest of the day. This action gave us white-bodied candles with small upper wicks. (QQQ also had a lower wick.) All three major indices have crossed back above their T-line (8ema) and both large-cap indices are also at least retesting a resistance level. Meanwhile, the QQQ is retesting the uptrend level it failed last Thursday. This all happened on a very much lower-than-average volume.
On the day, nine of the 10 sectors were in the green as Consumer Cyclical (+1.51%) led the way higher and Energy (-0.020%) lagged behind the other sectors. At the same time, the SPY was up 1.18%, the DIA was up 1.12%, and QQQ was up 1.60%. The VXX lost almost 4% to 11.69 and T2122 rose but remains just outside of the overbought territory at 77.27. 10-year bond yields fell to 3.705% and Oil (WTI) is a half of a percent to $79.25 per barrel. So, on the day, we saw the bulls in charge all morning and then a dead market most of the afternoon. This just seems like trader’s waiting on the CPI data Tuesday to give a clue about what the Fed may do in March.
In Fed news, Federal Reserve Governor Bowman spoke Monday. She said “I expect we’ll continue to increase the federal funds rate because we have to bring inflation back down to our 2% goal…” Bowman went on to say that a very strong labor market alongside moderating inflation means a “soft landing” remains possible. In other Fed news, the NY Fed announced that a January survey of consumers shows the biggest monthly drop in “wage growth” (income growth) expectations in 10 years. The expected wage growth fell 1.3% to +3.3% for the year as of January.
In stock news, early Monday TWLO announced another round of layoffs, eliminating about 17% of its workforce and closing some offices. In other layoff news, UPS said Monday that it will join rival FDX is looking to reduce headcount in the areas of the US where demand is down. This comes ahead of UPS negotiations with the Teamster union (contract expiring July 31). Meanwhile, Reuters reports that the recent spate of big tech layoffs is a boon for farm equipment makers who are snapping up hundreds of tech workers. Specifically, the article mentioned DE, CAT, and CNHI as hiring hundreds of engineers each from the pool of former employees from the likes of AMZN, MSFT, and META. Elsewhere, ALC agreed to pay JNJ $199 million to settle an intellectual property suit related to laser eye-surgery devices. F announced that they will recognize the UAW at the new $3.5 billion battery plant in Marshall MI (reported here last week). This means that if a majority of workers at that facility just sign a card supporting a union, then the UAW will represent all workers without the need for formal votes. Finally, AMZN announced that it has successfully tested its “Zoox” robotaxis using employees as passengers on public roads between two AMZN facilities in Foster City, CA. The milestone moves the project closer to publicly available self-driving cars as well as competing with GOOGL’s “Waymo” robotaxi project.
In energy news, after hours Monday, the Biden Administration said that the government is planning to sell another 26 million barrels of oil from the Strategic Reserve. The White House says they do not want to do so now that oil prices have stabilized. However, a budget mandate enacted in 2015 (pertaining to the current fiscal year) mandates the sale of 26 million barrels this year. The Energy Dept. has sought to stop these sales in an effort to begin refilling the reserve. However, without new Congressional action, the sale is required by law. After this sale, the US reserve would drop to about 345 million barrels.
After the close, CAR, ACGL, IAC, ANET, CDNS, SEDG, and PLTR all reported beats on both the revenue and earnings lines. Meanwhile, ES, FE, and AMKR beat on revenue while missing on the earnings line. On the other side, MRC missed on the revenue line while beating on earnings. Unfortunately, ASTL missed on both the top and bottom lines. It is worth noting that ANET, CDNS, and SEDG all raised their forward guidance. However, AMKR, JHX, and PLTR lowered their forward guidance.
Overnight, Asian markets were mixed on mostly modest moves. Thailand (-0.73%) paced the losses while India (+0.89%), Japan (+0.64%), and South Korea (+0.50%) led the gainers. Meanwhile, in Europe, the bourses are leaning toward the green side at midday with the notable exception of Russia (-1.27%). The FTSE (+0.40%), DAX (+0.42%), and CAC (+0.50%) are leading the region higher in early afternoon trade. AS of 7:30 am, US Futures are pointing to a modest green start to the day (ahead of CPI data). The DIA implies a +0.13% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.43% open at this hour. At the same time, 10-year bond yields are down to 3.69% and Oil (WTI) is off 1.55% to $78.90/barrel.
The major economic news events scheduled for Tuesday include January CPI (8:30 am) and the API Weekly Crude Oil Stock Report (4:30 pm). We also get a couple of Fed speakers (Harker at 11:30 am and Williams at 2:05 pm). Major earnings reports scheduled for the day include CAE, CLF, KO, ECL, ENTG, EXC, FELE, GTX, GEO, GFS, HRI, HWM, LCII, LDOS, MAR, BTU, PKI, QSR, TRU, WCC, and ZTS before the opening bell. Then after the close, ABNB, AKAM, ANDE, CLW, CRK, CNDT, DVN, WIRE, ENLC, GDDY, GXO, HLF, MCY, NU, SCI, SU, TX, and WFG report.
In economic news later this week, on Wednesday, NY Fed Empire State Mfg. Index, January Retail Sales, January Industrial Production, December Business Inventories, December Retail Inventories, and EIA Weekly Crude Oil Inventories are reported. On Thursday, we get January Building Permits, January PPI, January Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and a couple of Fed speakers (Mester, Bullard, and Mester). Finally, on Friday, January Import Price Index and January Export Price Index are reported.
In terms of earnings later in the week, on Wednesday, ADI, AVNT, GOLD, BIIB, CHEF, FIS, GNRC, ICL, KHC, LAD, MLM, OC, PSN, RPRX, RBLX, R, SABR, SITE, SAH, SUN, TMHC, TTD, WAB, WAT, ALB, ALSN, AMED, AEE, AIG, AWK, AR, CF, CSCO, SYH, CPA, ET, EQT, EQIX, HST, INVH, KGC, MRO, NEX, NUS, NTR, QDEL, RSG, REZI, RNG, ROKU, ROL, RGLD, RUSHA, SGEN, SHOP, SUM, SPWR, SNPS, TNET, TROX, TWLO, WCN, WELL, and Z report. On Thursday, we hear from ARCH, BLMN, CVE, CEG, CROX, CNB, ETR, EPAM, FOCS, GGR, GVA, HAS, HSIC, H KBR, KELYA, LH, NSRGY, NGD, NMRK, DNOW, NRG, OGN, PARA, PBF, POOL, POR, RCM, RS, STNG, SO, SCL, SYNH, TOST, USFD, VC, VNT, VMC, WSO, WST, WE, ZBRA, AEM, AL, AEL, COLD, AMN, AMAT, ATR, BIO, BFAM, ED, CLR, DASH, DKNG, DBX, FBIN, GLOB, IAG, TDS, TXRH, USM, and VALE. Finally, on Friday, ASIX, AMCX, AXL, AN, CNP, CRBG, DE, MD, and PPL report.
So far this morning, EXC, KO, WCC, MAR, LDOS, ZTS, QSR, HWM, GFS, HE, ENTG, and GEO all reported beats to both the revenue and earnings lines. Meanwhile, CLF, TRP, LCII, and HRI all beat on revenue while missing on earnings. On the other side, PKI missed on revenue while beating on earnings. Unfortunately, GTX and TRU both missed on both the top and bottom lines. It is worth noting that ZTS and GFS raised forward guidance. However, PKI, HWM, GTX, and ENTG all lowered their own forward guidance.
With that background, it looks like the bulls are looking to a positive open at this point. However, that is sure to change to either a nasty gap down or to a bigger gap up once the CPI numbers are out. Regardless of how that turns out, be careful wading into the volatility at the open. There is likely to be jerks in both directions before the bell stops ringing. However, the trend remains bullish, at this point, in all three major indices. SPY and DIA are still not quite broken free of their resistance test (they are passing so far) and QQQ is back up against the uptrend line dating back to the first of the year.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: 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.
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
Not only will investors have a full plate of earnings reports to grapple with this week, but they will also have a huge week of economic data such as CPI, PPI, and retail sales, keeping them guessing and uncertain. Although the DIA seems stuck in consolidation, the SPY, QQQ, and IWM remain in bullish patterns. Big point index swings are possible this week, and I would not rule out significant intraday whips or overnight reversals to challenge us in the week ahead. All eyes will be on Tuesday morning’s BLS sessional adjustments to the CPI number, so plan your risk carefully as we wait.
Asian markets started the week mostly lower with a volatile yen as uncertainty increases on the BOJ nomination report. However, European markets trade with modest bullishness this morning, trying to gauge monetary policy ahead of crucial economic data. While off overnight lows, U.S. futures suggest a flat, mixed open as they wait on a market-moving CPI report Tuesday morning.
According to NBC News, the U.S. military shot down a fourth unidentified object Sunday and expects to recover it. The White House on Friday announced a second object had been shot down over Alaska, and Canadian Prime Minister Justin Trudeau said Saturday a U.S. fighter jet shot down a third “unidentified object.” Officials have yet to release details about the objects that were downed on Friday, Saturday, and Sunday.
U.K. semiconductor bosses are pleading with the government for subsidies amid fears that some chip firms will be forced to move overseas. The U.S. and EU have announced multibillion-dollar packages to boost domestic chip production, and industry executives worry that the lack of a similar strategy from the U.K. is harming the country’s competitiveness. Prime Minister Rishi Sunak’s administration is under pressure to publish its planned chip strategy, which has faced delays due to political instability.
Life Insurance Corporation, India’s largest insurer, said it ‘might’ review its stake in the embattled Adani Group after meeting with the management. LIC chairman M.R. Kumar said the state-owned insurer plans to discuss with the Adani management soon to get a better picture of the crisis engulfing the conglomerate. “As an investor, it’s not often that we have this kind of a situation. But then we have reached out to the management of Adani,” Kumar told CNBC’s Tanvir Gill in an interview.
The modest profit-taking of last week underscores the uncertainty investors face this week we readings on CPI, PPI, and Retail Sales numbers. Nevertheless, having relieved much of the overbought condition, the SPY, QQQ, and IWM remain in bullish patterns, with the DIA seminally stuck in consolidation. The seasonal adjustments from the BLS will have all eyes on the Tuesday CPI report setting up a morning of considerable price volatility. However, as we wait, don’t be surprised to see a choppy, low-volume price action today. All the economic data will, of course, be complicated with another big of economic data to keep traders guessing and emotions high. Plan carefully and prepare for some big point index swings with the possibility that the overnight reversals experienced last week may continue as the data rolls out.
Markets opened modestly lower Friday (down 0.31% on the SPY, down 0.09% in the DIA, and down 0.70% in the QQQ) well up off the premarket lows. From that point, we had a bit of divergence as the SPY roller-coastered its way sideways, the DIA had a very modest uptrend, and QQQ put in a volatile bearish trend. However, during the afternoon all three synced up and trended modestly bullish the rest of the day. This action gave us gap-down indecisive Doji candle in the QQQ and gap-down white-bodied candles in the two large-cap indices. All three remain close below their T-line (8ema) and the DIA has held above its 50sma after another retest.
On the day, seven of 10 sectors are in the green as Energy (+3.43%) led the way higher and Consumer Cyclical (-1.27%) lagged behind the other sectors. At the same time, the SPY was up 0.23%, the DIA was up 0.49%, and QQQ was down 0.66%. At the same time, the VXX gained 1.25% to 12.18 and T2122 rose but remains in the midrange at 47.75. 10-year bond yields spiked up to 3.745% and Oil (WTI) is up by 2.23% to $79.80 per barrel. So, on the day, we saw a gap lower and then indecisive action the rest of the day. All of this happened on less-than-average volume again.
In economic news, the Michigan Consumer Sentiment Index came above expectations a bit at 66.4 (compared to a forecast of 65.0 and the January reading of 64.9). Later in the day, the January Federal Budget Balance came in much better than expected at -$39.0 billion (a deficit, versus the forecast of -$63.0 billion and also much better than the December reading of -85.0 billion). After the close, Philly Fed President Harker said that the strong January Payrolls Report has not changed his view that moving to small (quarter percent) rate hikes was the correct strategy for the FOMC. Specifically, Harker (a voting member this year) said, “At this point, we can go at a pace of 25 (basis-point rate hikes) and get inflation under control without doing undue damage to the labor market.” He also added that moving to smaller rate increases is a “risk management” issue for the Fed. Finally, he opened the door to rate cuts in 2024. On that topic, he said, “I don’t think that’ll happen this year,” but in 2024 “we could start to see movement downward in the federal funds rate that is likely to be gradual.”
In stock news, TSLA reversed course in China by raising prices that it just recently cut. Later, the US Army announced Friday that OSK had lost a $7 billion contract for a tactical vehicle. At the same time, MGA warned about profits in 2023 citing margin pressure from US automakers. Along those same lines, WMT publicly warned vendors (companies that sell products through WMT stores) that it can no longer take price hikes and will be pushing their own private-label products more as less-expensive alternatives. This is normal business for WMT, but it is not common for the company to make public proclamations on the topic. This move could impact the likes of PG, UL, KHC, CPB, KMB, CLX, and PEP (who all see billions of dollars of products through WMT). Meanwhile, F announced it had cut its stake in EV company RIVN from 11.4% to 1.15% as part of a predetermined plan. Elsewhere, Florida Governor DeSantis gained effective control over the board which oversees the DIS special district surrounding DIS theme parks. I won’t go into the background, but the move cost Florida taxpayers about $1.2 billion and may cause DIS trouble related to its Florida theme park unit. After the close Friday, F announced a new $3.5 billion battery plant to be built in Michigan as part of a joint venture with a Chinese battery company. Elsewhere, HOOD won a dismissal of an investor lawsuit claiming the company had misled investors ahead of its 2021 IPO. Finally, Reuters reported that FIS is preparing to break up its business, spinning off the payment processing unit it had acquired four years ago for $43 billion.
In miscellaneous news, on Saturday, Indian Finance Minister Sitharaman said that G-20 countries are exploring collective regulation on cryptocurrencies. No timetable or specifics were offered, but Sitharaman said the discussions are active. At the same time, Reuters reported that META is not releasing departmental budgets internally as the company plans another round of layoffs. Meanwhile, major TSLA investor Ross Gerber has launched a campaign to gain a seat on the company board. His agenda is to reign in Elon Musk (addressing spending too much time on other companies, not having succession plans, and his stock sales). Oddly, Gerber launched his bid on a Twitter Spaces call. He said “I’ve kind of had enough…TSLA needs to build its image around Tesla, and not just Elon. I think it’s time for TSLA to grow up.” Finally, the balloon story won’t seem to go away as three more (much smaller and more likely weather-related according to analysts guesses) balloons were shot down Friday, Saturday, and Sunday in the ocean off Alaska, over Canada, and over the US side of Lake Huron respectively). Meanwhile, China says that US balloons crossed its own airspace 10 times during 2022. So, that talk will continue.
In energy news, for the first time in eight weeks, Natural Gas gained ground. The front-month Natty rose 4.3% for the week to close at $2.5140/mmBtu. At the close of the week, US gas storage stood at 2.366 trillion cubic feet, which is up 10.9% from one year ago. Elsewhere, CVX said Friday that it has agreed to sell its assets in Myanmar and will exit that country. Meanwhile, Bloomberg reports that XOM is quietly walking away from a decade-long project intended to create environmentally-friendly biofuels from algae. XOM had already invested $350 million in the project. At the same time, the US Treasury Dept. said that it had warned countries and companies located in Turkey and UAE that the US will start cracking down on the facilitators who are helping Russia avoid Western oil sanctions. Finally, on Saturday, a meeting was held to discuss conditions at the Freeport Texas LNG export facility that was idled by an explosion and fire last June. Area residents are complaining that regulators are not providing enough oversight and control over the facility as it moves toward coming back online. (When fully operational, the facility processes 2 billion cubic feet of natural gas per day and is the largest LNG export facility in the US.)
Overnight, Asian markets were mixed but leaned to the downside. Singapore (-1.07%), Japan (-0.88%), and South Korea (-0.69%) lead the larger number of exchanges lower. Meanwhile, Shenzhen (+1.14%) and Shanghai (+0.72%) were the only appreciable gainers on the day. In Europe, stocks are mostly in the green at midday. The FTSE +0.40%), DAX (+0.43%), and CAC (+0.86%) lead all but two exchanges to the upside in early afternoon trade. As of 7:30 am, US Futures are pointing toward a green start to the week. The DIA implies a +0.15% open, the SPY is implying a +0.35% open, and the QQQ implies a +0.66% open at this hour. At the same time, 10-year bond yields are flat a 3.74%, and Oil (WTI) is also flat at $79.74/barrel in early trade.
There are no major economic news events scheduled for Monday. Major earnings reports scheduled for the day include CX, CHKP, DDL, and THS before the opening bell. Then after the close, ASTL, AMKR, ACGL, ANET, CAR, CDNS, ES, FE, IAC, MKSI, MRC, PLTR, and SEDG report.
In economic news later this week, on Tuesday, we get January CPI and the API Weekly Crude Oil Stock Report and we also get a Fed speaker (Williams). Then on Wednesday, NY Fed Empire State Mfg. Index, January Retail Sales, January Industrial Production, December Business Inventories, December Retail Inventories, and EIA Weekly Crude Oil Inventories are reported. On Thursday, we get January Building Permits, January PPI, January Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and a couple of Fed speakers (Mester, Bullard, and Mester). Finally, on Friday, January Import Price Index and January Export Price Index are reported.
In terms of earnings later in the week, on Tuesday we hear from CAE, CLF, KO, ECL, ENTG, EXC, FELE, GTX, GEO, GFS, HRI, HWM, LCII, LDOS, MAR, BTU, PKI, QSR, TRU, WCC, ZTS, ABNB, AKAM, ANDE, CLW, CRK, CNDT, DVN, WIRE, ENLC, GDDY, GXO, HLF, MCY, NU, SCI, SU, TX, and WFG. Then Wednesday, ADI, AVNT, GOLD, BIIB, CHEF, FIS, GNRC, ICL, KHC, LAD, MLM, OC, PSN, RPRX, RBLX, R, SABR, SITE, SAH, SUN, TMHC, TTD, WAB, WAT, ALB, ALSN, AMED, AEE, AIG, AWK, AR, CF, CSCO, SYH, CPA, ET, EQT, EQIX, HST, INVH, KGC, MRO, NEX, NUS, NTR, QDEL, RSG, REZI, RNG, ROKU, ROL, RGLD, RUSHA, SGEN, SHOP, SUM, SPWR, SNPS, TNET, TROX, TWLO, WCN, WELL, and Z report. On Thursday, we hear from ARCH, BLMN, CVE, CEG, CROX, CNB, ETR, EPAM, FOCS, GGR, GVA, HAS, HSIC, H KBR, KELYA, LH, NSRGY, NGD, NMRK, DNOW, NRG, OGN, PARA, PBF, POOL, POR, RCM, RS, STNG, SO, SCL, SYNH, TOST, USFD, VC, VNT, VMC, WSO, WST, WE, ZBRA, AEM, AL, AEL, COLD, AMN, AMAT, ATR, BIO, BFAM, ED, CLR, DASH, DKNG, DBX, FBIN, GLOB, IAG, TDS, TXRH, USM, and VALE. Finally, on Friday, ASIX, AMCX, AXL, AN, CNP, CRBG, DE, MD, and PPL report.
So far this morning, FIS, CHKP, and TDC have reported beats on the revenue and earnings lines. Meanwhile, THS and DDL both reported a miss on revenue while they beat on the earnings line. (CX has not reported yet.) It is worth noting that FIS and THS both lowered forward guidance. However, TDC raised its forward guidance.
With that background, it looks like the bulls are taking all three major indices back up to retest their T-line (8ema) from below this morning. However, neither the SPY or QQQ is to the point of retesting the Bull Flag downtrend they are in (at least in premarket). bears have the momentum coming off yesterday’s candle and with an overnight assist from the Russians. We do have another big earnings week with KO and KHC headlining that group. However, the big driver is likely to be CPI data on Tuesday. Do not be surprised if we drift today as traders wait on that report before betting big this week. The risk remains to the downside as markets are betting on a pause in hikes by the Fed (not March, but soon), inflation to keep coming down, AND the economy to hold up (no hard landing).
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: 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.
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 daily index swings continued Thursday, but this time produced a big intraday whipsaw leaving behind some possible topping candle patterns. The price action suggests the bears are hungry, but I would not expect the bull to give up easily. The VIX hinted at some fear of returning to the market as it popped through a multi-month downtrend yesterday. The question for the day is, will the bears find the energy to follow through, or will the bulls rush back to defend? With this week’s significant daily reversals, I think anything is possible as we head into the weekend.
Asian markets closed the day mostly lower, with the tech-heavy HSI leading the way, down 2,01%. European markets trade decidedly bearish this morning as investors mull future central bank actions and the possibility of a recession. U.S. futures point to a lower open ahead of earnings, consumer sentiment, and more Fed speakers.
Economic Calendar
Earnings Calendar
We get a little break on the earnings calendar on Friday. Notable reports include AXL, ENB, FTS, IQV, NWL, SPB & WPC.
News & Technicals’
Adidas could lose around 1.2 billion euros ($1.3 billion) in revenue in 2023 if it cannot sell its existing Yeezy stock. Shares of Adidas were down 11% around 9 a.m. London time following the news. “The numbers speak for themselves. But, unfortunately, we are currently not performing as we should,” Adidas CEO Bjørn Gulden said in a press release.
Yahoo will lay off more than 20% of staff, or around 1,600 workers, and the company’s Yahoo for Business unit will be slashed in half. The company said about 1,000 of those cuts would occur by the end of the week.
Dan Schulman became PayPal CEO after the company split from eBay in 2015. He will remain a member of PayPal’s board of directors. “I’m proud of what we have accomplished at PayPal and of the incredibly talented and committed people I work with every day,” Schulman said in a statement.
The wild chop continued on Thursday, tossing traders a big intraday whipsaw and leaving behind bearish engulfing candles with the VIX breaking a multi-month downtrend. That said, one day does not make a trend, and though the bears made an appearance, will they have the energy to follow through? Don’t expect the bulls to give up easily, and with the big point swings we have experienced this week, we can’t rule out another quick swing higher. We have more Fed speakers, consumer sentiment, a treasury statement, and a lighter day of earnings reports to provide inspiration. Keep an eye on price support levels because if they break, some quick selling to occur as traders rush to protect profits.
Markets gapped higher on Thursday (up 0.93% in the SPY, up 0.68% in the SIA, and up 1.51% in the QQQ). However, this was a bull trap as the bear immediately stepped in and sold off the market steadily all day long. Price had completely faded the gap in all three major indices by 12:30 pm and then continued its way South. Only a little bit of profit-taking by the bears during the last 25 minutes prevented us from going out on the lows. This action gave us black-bodied candles that engulfed Wednesday’s candle body. (However, these are not Bearish Engulfing signals because Wednesday’s candle bodies were also black.) All three major indices crossed back below their T-line.
On the day, all 10 sectors are in the red as Communications Services (-1.34%) led the way lower and Consumer Defensive (-0.41%) held up better than other sectors. At the same time, the SPY was down 0.87%, the DIA was down 0.69%, and QQQ was down 0.88%. At the same time, the VXX gained 3.00% to 12.01 and T2122 fell again to the bottom end of the midrange at 26.78. 10-year bond yields jumped up again to 3.667% and Oil (WTI) is down by 1.06% to $77.64 per barrel. So, on the day, we saw a bull trap where the overnight gap was met with an all-day selloff. Still, the bears did not break out of the decisive move. So, the bullish trend remains unbroken. All of this happened on less than average volume.
In economic news, the Weekly Initial Jobless Claims came in just above expectations at 196k (compared to a forecast of 190k but still an increase from the previous week’s reading of 183k). Meanwhile, the Continuing Jobless Claims were also higher than was forecasted at 1,688k (versus a forecast of 1,658k and well up from last week’s value of 1.650k). In Fed speak, Richmond Fed President Barkin said Thursday that tight monetary policy is “unequivocally slowing the US economy” which will allow the Fed to be “more deliberate” in any further interest rate increases. Barkin went further than most Fed speakers by saying that, “We all know what people care about. They care about food, gas, and shelter.” He went on to say that he is watching those three things as his indicator of when inflation is under control. Until they are, he said the FOMC has more work to do (implying more quarter-point hikes ahead).
In stock news, GM and GFS announced a long-term deal to secure US-made chips for GM vehicles. The deal will enable the carmaker to avoid the chip shortages that have plagued the auto industry since the start of the pandemic. In layoff news, GTLB has announced it will reduce its workforce by 7% due to the current economic environment. Meanwhile, pot company CGC announced it will cut 36% of employees and sell assets in Canada in an effort to reduce costs. The company cited black market competition as a significant hurdle. Elsewhere, after the close, BKI announced it will put its loan software business up for sale. The move is part of BKIs attempt to stem antitrust concerns after ICE’s proposed acquisition of BKI. Meanwhile, XOM announced it will be merging some business units as part of a cost-cutting plan (despite blowout record profits in its most recent report). The Wall Street Journal reported that the move was aimed at reducing a layer of management and concentrating the smaller units buying power and decision-making related to raw materials procurement.
In miscellaneous news, Thursday evening the Fed announced its 2023 bank stress test scenarios. This year’s test will include a new “extra market shock” in addition to various recession scenarios. The tests must be passed by the eight largest US banks, namely JPM, BAC, C, WFC, USB, PNC, MS, and GS. Elsewhere, Labor Sec Walsh and President Biden’s Top Economic Advisor Deese have both called executives of CSX, UNP, NSC, and BRKA’s BNSF railroads. The Administration officials pushed the companies to offer paid sick leave to rail workers represented by the 10 unions whose members are currently not offered any. Finally, after the close, technology industry research firm Mercury Research released a report on the state of the processor market. Overall, 2022 saw the worst downturn in the PC chip market since the 1980s. INTC got crushed, losing market share to competitor AMD (which now has nearly one-third of the processor market). AAPL and QCOM (both using chips from ARM) lost market share over the year as well.
In energy news, the front-month March contract for Natural Gas closed down again Thursday, settling at $2.43/mmBtu. This was up off the day’s low of $2.351 after a larger than expected inventory draw was reported by the EIA. A down US Dollar also helped all commodities on the day. Elsewhere, Russia announced plans to cut its oil production by 500,000 barrels per day as of March to Western price caps. This cut amounts to 5% of Russia’s daily oil output. This news has both oil prices spiking 2% and European stock markets lower this morning.
After the close, MSI, G, MTD, VTR, TEX, CBT, LGF.A, and DXCM all reported beats on both the revenue and earnings lines. Meanwhile, PYPL, MHK, NGL, BHF, FLO, and EQR all missed on revenue while beating on earnings. On the other side, CC, LYFT, USX, MODG, and OSCR all beat on revenue while missing on earnings. Unfortunately, NWSA, EXPE, YELL, and CNXN all missed on both the opt and bottom lines. It is worth noting that PYPL, MSI, MTD, and MODG all raised their forward guidance. However, MHK, CC, VTR, and LYFT lowered their forward guidance.
Overnight, Asian markets leaned to the red side. Hong Kong (-2.01%) was an outlier while Australia (-0.76%), Shenzhen (-0.59%), and South Korea (-0.48%) led the losses. Meanwhile, Malaysia (+0.68%), New Zealand (+0.50%), and Japan (+0.31%) paced the gains. In Europe, again with the sole exception of Norway (+0.19%), we see red across the board at midday. The FTSE (-0.71%), DAX (-1.49%), and CAC (-1.28%) are leading the continent 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 -0.47% open, the SPY is implying a -0.73% open, and the QQQ implies a -1.23% open at this hour. At the same time, 10-year bond yields are climbing again to 3.711% and Oil (WTI) is up 2% to $79.64/barrel in early trading.
The major economic news events scheduled for Friday are limited to the Michigan Consumer Sentiment (10 am) and January Federal Budget Balance (2 pm) reports. We also hear from Fed members Waller (12:30 pm) and Harker (4 pm). Major earnings reports scheduled for the day include ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM before the opening bell. There are no major reports scheduled for after the close.
So far this morning, NWL, GPN, TIGO, and FTS have reported beats on the revenue and earnings lines. Meanwhile, ENB and MGA both reported beats on the revenue line while missing on the earnings line. On the other side, IQV and HMC missed on the revenue line while beating on the earnings line. Unfortunately, SLVM and SPB missed on both the top and bottom lines. It is worth noting that MGA raised guidance while IQV and NWL both lowered forward guidance.
With that background, it looks like the bears have the momentum coming off yesterday’s candle and with an overnight assist from the Russians. As markets prepare for the weekend, all three major indices are showing a bearish trend overnight that has flattened out after 6:15 am. This will give us that gap lower at the open unless something changes dramatically in the next two hours. This will break the uptrend line in the QQQ and move us close to retesting that uptrend line in the SPY. DIA is back inside its wedge but still has more ground to cover before retesting its own uptrend line. (When I say uptrend lines, I’m talking about those dating back to the start of the year.) Earnings were generally good last night but are more mixed this morning. So, it may be up to Consumer SEntiment and Fed Speak to turn things around if you’re a bull.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: 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.
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 theme of this week looks to continue as Thursday is shaping up for another overnight reversal of direction as earnings speculation drives the index price swings. While the DIA has chopped in a significant point consolidation, the SPY, QQQ, and IWM remain in an extended condition. Today we have a reading on Jobless Claims and another big day of reports, so expect more volatile price action as we slide toward the end of the week.
Asian markets concerned about future rate increases traded mixed overnight with modest gains and losses. However, European markets see only green this morning as earnings results drive trading, with economic conditions taking a backseat. With earnings and Jobless claims, the U.S. futures point to a bullish open to once again reverse the previous trading day.
Disney said it would reorganize into three divisions: Entertainment, ESPN, and parks and experiences. Disney will slash 7,000 jobs from its workforce and plans to cut $5.5 billion in costs, including $3 billion in content savings. CEO Bob Iger said the company isn’t considering a spinoff of ESPN.
PepsiCo’s fourth-quarter earnings and revenue topped Wall Street’s estimates. The food and beverage giant’s price hikes to mitigate inflation buoyed sales for snacks and drinks, but the strategy has also hurt demand. Nevertheless, looking to 2023, Pepsi is projecting a 6% increase in organic revenue and 8% growth in its core constant currency earnings per share.
The Credit Suisse quarterly result was worse than analyst projections of a net loss attributable to shareholders of 1.32 billion Swiss francs. It took the embattled Swiss lender’s full-year loss to 7.3 billion Swiss francs. Credit Suisse in October announced a plan to simplify and transform its business in an effort to return to stable profitability following chronic underperformance in its investment bank and a litany of risk and compliance failures.
Every day this week has begun with an overnight reversal of direction, and it looks as if Thursday is shaping up to follow the same pattern. SPY, QQQ, and IWM charts remain extended, while the DIA has primarily consolidated in a substantial point range. Both volume levels and the VIX also have flip-flopped daily while earnings speculation and uncertainty drive the volatility. Today we have another big round of earnings reports and the Fed inflation nemesis, the strong jobs sector, as we wait for the weekly claims reading. Expect the whippy price action week to continue, so plan your risk carefully.
