The major indices gapped down at the open Thursday (about 1% in the SPY and QQQ and about two-thirds of a percent in the DIA).  At that point, the large-cap indices started a sideways rollercoaster action with a slightly bullish trend.  Meanwhile, the QQQ gave us a move dead sideways and a more volatile rollercoaster ride.  The DIA had managed to fade the morning gap by 12:20 pm and continued to bob around the level of that previous close the rest of the way.  However, the SPY remained in the gap and the QQQ bobbed around its opening level, not even attempting to fill the gap until the final 30 minutes.  This all ended with a strong selloff in the last 20 minutes of the day across all 3 major indices. This action gave us indecisive, gap-down, Spinning Top candles in the SPY and DIA with the QQQ tending more toward a gap-down, black Inverted Hammer candle.  It is worth noting that the QQQ is now VERY extended from its T-line.

On the day, six of the ten sectors were in the red with Technology (-2.05%) leading the way lower and Energy (+1.53%) lagging the move.  Meanwhile, SPY fell 1.02%, DIA fell 0.45%, and QQQ fell 1.95%.  It’s worth noting that the SPY and QQQ did this on average volume while the SPY did not quite reach average.  Elsewhere, the VXX was down 2.23% to 17.54 and T2122 remained in the mid-range at 43.83.  10-year bond yields rose to 4.149% and Oil (WTI) was down 2.14% to $88.06/barrel.  So, the market was still scared of the Fed at the open but quickly became undecided.  Meanwhile, the heavier volume (relative to average) in the DIA indicates money continues to flee to the safety of mega-caps.

In economic news, September Exports came in a little over a $1 billion less than the prior month while Sept. Imports came in $4.8 billion above the prior month.  The net September Trade Balance was larger than expected at -$73.30 billion (compared to the forecast $72.20 billion).  Weekly Initial Jobless Claims were lower than expected at 217k (versus the forecast of 220k and last week’s 218k number).  Q3 Nonfarm Productivity was up, but up less than expected at +0.3% (compared to the forecast of +0.6% but at least far better than Q2’s number of -4.1%).  Q3 Unit Labor Costs were up less than expected at +3.5% (versus +4.1% forecast and Q2’s reading of +8.9%).  October PMI came in better than expected at 47.8 (versus the 46.6 forecast but worse than the Sept. reading of 49.3).  However, September Factory Orders came in as expected at +0.3%, which was slightly better than the prior month’s +0.2%.  Finally, October ISM Non-Mfg. PMI came in below expectation at 54.4 (versus a forecast of 55.5 and the September reading of 56.7).

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In stock news, TEVA agreed to pay $523 million to the state of NY to settle opioid lawsuits.  Elsewhere, LYFT confirmed it is cutting its staff by 13% (6883 employees). In addition, BA announced the launch of its first crewed Starliner capsule to carry humans has slipped to 2023.  Meanwhile, AMZN announced they are pausing all new corporate hiring.  At the same time, STLA is urging owners of 286,000 2005-2010 Chrysler cars after airbag deployment deaths.  ERIC subsidiary Vonage has agreed to pay $100 million to the FTC to settle a lawsuit over failing to provide a simple method for customers to cancel and imposing “junk” fees.  After the close, GIS announced they are following suit with GM and pausing advertising on Twitter.  Finally, Bloomberg reports AXL has drawn takeover interest from BWA and DANA as well as British firm Melrose Industries.

In miscellaneous news, early Thursday, the Bank of England raised interest rates by the most since 1989 by following the US in doing a 0.75% rate hike.  Back on this side of the pond, the SEC and DOJ announced they are launching probes into company executives gaming the “pre-arranged stock sales” system to do insider trading.  SIEN acknowledged it has been subpoenaed related to CEO trading and in September CMCM CEO and Former President were both charged with insider trading using the 10b5-1 prearranged sale trading plans. The government is expanding the investigation to other companies.  In Canada, the government cut its 2023 GDP forecast to +0.7%, but also cut its deficit forecast by 30% and said that the Canadian economy would narrowly avoid recession.

After the close, AMGN, PYPL, RGA, DXC, SQ, ED, LYV, CTVA, MSI, BECN, MELI, AEE, MCHP, SWKS, ILMN, TKC, VTR, MTD, IHRT, FND, OTEX, TWLO, DBX, EXAS, CTRA, SVC, ED, ATSG, AMN, TS, and CVCO all reported beats on the top and bottom lines.  Meanwhile, SBUX, HVRRY, MNST, GDDY, CNXN, COLD, ZEUS, AL, MTZ, KWR, TDS, and WBD all reported misses on revenue while beating on earnings.  On the other side, EOG, RKT, EXPE, CWK, OPEN, DASH, USM, CE, LFG.A, FRG, TEAM, AGL, SEM, and USX all reported beats on revenue while missing on earnings.  Unfortunately, CVNA, COIN, AVB, and NVST all missed on both the revenue and earnings lines.

So far this morning, CAH, AES, ADNT, HSY, LAMR, ASIX, and CNK have all reported beats on the revenue and earnings lines.  Meanwhile, ITOCY, PBR, TEF, HUN, EVRG, AMCX, and TIXT all missed on revenue while beating on earnings.  On the other side, DUK, QRTEA, IEP, and NFG all beat on revenue while missing on earnings.  Unfortunately, MGA, FLR, SYNH, GTN, and AMRX all missed on both the top and bottom lines.  It is worth noting that SYNH and GTN both lowered their forward guidance.  However, PNM raised its forward guidance.

Overnight, Asian markets were very strongly green, with the sole exception of Japan (-1.68%).  Hong Kong (+5.36%), Shenzhen (+3.20%), and Shanghai (+2.43%) led the region higher again on rumors the Chinese government would move away from its “Zero Covid” lockdown strategy.  (Oddly, these rumors come as China reported its highest number of new cases in more than six months.)  In Europe, we see a similar picture at midday with only Portugal (-0.41%) in the red.  The FTSE (+1.38%), DAX (+1.76%), and CAC (+2.26%) are all strongly green on a very broad-based rally that sees none of the other exchanges up less than one-half of one percent in early afternoon trading.  As of 7:30, Futures are pointing toward a green start to the day in the US as well.  The DIA implies a +0.62% open, the SPY is implying a +0.80% open, and the QQQ implies a +0.85% open ahead of data.  10-year bond yields are up again at 4.163% and Oil (WTI) is surging up 3.5% to $91.28/barrel in early trading.

The major economic news events scheduled for Friday include Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate (all at 8:30 am).  We also have a Fed speaker (Rosengren at 10 am).  The major earnings reports scheduled for the day include ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST before the open.  There are no major reported scheduled for after the close. 

As markets wait on the October Employment data this morning, the rest of the world seems to be buoyed by the hope that the second-largest economy (China) may open up by loosening covid restrictions and lockdowns. That may be the case, but so far there is no official word of such a policy shift and that country is at a six-month high in terms of new covid cases. (Moreover, the Chinese vaccine is ineffective against the now dominant Omicron variants meaning the only tools that government has available are lockdowns or “let it go and hope unrest over mass deaths does not get bad before you reach herd immunity.” The point is, despite market hopes, and rumors, I would not bet money based on just hopium. On this side of the world, all the news seems to revolve around the now-private TWTR. It seems Musk has begun laying off up to half of the company staff and has already been sued for doing so without providing advanced notice.

With that background and as we wait on the employment data, it is clear the bullish trend is broken and the premarket bounce would still have a long way to go to print a Morning Star-type signal in any of the 3 major indices. Extention from the T-line (8ema) is only a factor in the beleaguered QQQ at this point. However, T2122 says we have room to run since we are still in the mid-range. Once again, be very careful about chasing these morning gaps. This is not only a very bearish market, but also very volatile. Any move higher could “rip your face off” by reversing hard. So, strongly consider letting the panic settle out before taking any new trades. Emotions will kill a trader! Control your FOMO and your fear in general. I promise you, there will be plenty of money to make after the knee-jerks ease up. Also, remember that this is Friday…with a long weekend news cycle to get through before we can adjust or close any trades.

This morning, I am reminded of Warren Buffet’s first rule of making a lot of money in the market: “Do not lose a lot of money in the market” (and his second rule is “remember rule #1”). So, be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

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.

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

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

Markets opened flat to down just a touch on Wednesday.  We then traded sideways in a rollercoaster wave pattern until the Fed announcement at 2 pm.  At that point, we saw a huge spike over 5 minutes in all 3 major indices.  This was followed by a half-hour of sideways chop at the highs and then a massive selloff taking us down 2.5% to 4.5% over the last 90 minutes of the day. This action gave us large black-body candles with large upper wicks.  This also took us far below the T-line (8ema) in the SPY and QQQ while the DIA is just pulling back to the T-line.

On the day, all ten sectors were in the red as Technology (-3.87%) and Basic Materials (-3.60%) led us lower while Communications (-0.75%) lagged behind. Meanwhile, SPY fell 2.53%, DIA fell 1.55%, and QQQ fell 3.43%.  The VXX was up 2.57% to 17.94 and T2122 plunged into the mid-range at 42.33.  10-year bond yields rose to 4.09% and Oil (WTI) is up 0.89% to $89.16/barrel. So, apparently, traders loved the Fed statement and then were scared to death by Chair Powell’s press conference performance.

In economic news, the October ADP Nonfarm Employment Change came in hotter than expected at +239k (compared to a forecast of +195k and September’s +192k number).  EIA Crude Oil inventories showed a larger-than-expected drawdown of 3.115 million barrels (versus the forecast of +0.367 million barrels and last week’s reading of +2.588 million barrels).  However, the big news of the day was from the Fed.  As was expected, the FOMC hiked rates by 0.75% (to a 3.75% – 4% rate).  However, the Bulls took heart from the statement which hinted at softening when it added that in the future they would take “the cumulative tightening” effect into account “which lags monetary policy.”  Those statement additions did seem to be hinting at slowing the rate hikes soon.  However, in his press conference, Fed Chair Powell largely dismissed the idea of pausing soon again reiterating that it will be data-driven and may be soon or further out depending on the data the Fed gets.  This is not what the Bulls wanted to hear and was exactly what the Bears wanted.  Hence, the very strong selloff on this news.

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In stock news, early in the day, the mains iPhone supplier to AAPL “locked in” 200,000 employees for a 7-day Covid quarantine.  This came after employees had been scaling fences and eluding police to escape the plant to avoid Covid.  Early on, OPEN posted a notice that it has cut 18% of its workforce (550 people) due to the poor housing market.  Elsewhere in that arena, CNBC reported the WFC is preparing for major layoffs in their mortgage processing departments as mortgage volume drops.   At mid-morning, CVS, WBA, and WMT agreed to pay $13.8 billion to resolve several thousand state, local, and tribal lawsuits accusing them of mishandling opioid drugs.  This includes $5 billion over 10 years from CVS and $5.7 billion over 15 years for WBA.  WMT will pay $3.1 billion (mostly up front).  In the afternoon, AAL pilots joined peers at UAL and DAL in rejecting the latest contract proposal from their company.  Then, late in the day DD announced it was scrapping its deal to buy ROG due to the failure to get past Chinese Regulatory hurdles.  In other M&A deal news, three state Attorneys General have filed suit to block the KR buyout of ACI (for $25 billion).

In miscellaneous news, French fuel supplies will begin to improve over the next 1-3 weeks.  The strike which had taken 45% of the country’s refining capacity offline for most of October has been resolved and major refineries will slowly come back online starting this week.  XOM and TTE are the main oil companies impacted by shutdowns.  Back in the US, the SEC has implemented new rules for mutual funds.  The rules will require funds to maintain more liquidity (10% of net assets to be highly liquid like cash) as the agency expects the market downturn to cause a flood of redemptions.  The idea is that by requiring the extra cash to be accumulated slowly now, this will avoid market gyrations as funds have to sell in a hurry to meet redemption requests.

After the close, ALL, BKNG, EBAY, ZG, Z, EQIX, APA, WCN, MRO, QRVO, FTNT, FLT, ACA, TTMI, ETSY, QDEL, O, WSC, PTC, WTS, ANSS, RUN, GFL, IR, MKSI, PK, SLF, AFG, VSTO, and CCRN all reported beats on the revenue and earnings lines.  Meanwhile, QCOM, LNC, MGM, HST, WERN, CPE, ES, HHC, MET, OPAD, PDCE, SIGI, SUM, KMPR, TSE, TPC, and ALGT all reported beats on revenue while missing on earnings.  On the other side, CTSH, ALB, EQH, CW, ICLR, PAA, RCII, RIG, WES, and ROKU reported misses on revenue while also beating on earnings.  Unfortunately, LUMN, ATUS, CF, CLR, YELL, NUS, and LHCG all missed on both the revenue and earnings lines.  It is worth noting that CCRN was the only major company to raise guidance.  However, QCOM, TSE, VSTO, MKSI, SUM, ROKU, and ANSS all lowered their forward guidance.

So far this morning, ABC, AER, CI, LNVGY, COP, MAR, TEVA, APTV, REGN, W, SRE, APD, BHC, COMM, INGR, MDU, UAA, PENN, QSR, AER, ADT, APG, EPAM, OGE, H, GIL, ALIT, SRCL, MUR, CROX, BRKR, VIRT, GOLF, MODV, BALL, DLX, ESAB, and UA all reported beats on both the top and bottom lines.  Meanwhile, EXC, JCI, WCC, GOLD, TPX, IRM, ITT, KTB, and WLKP all missed on revenue while beating on earnings.  On the other side, MRNA, TX, and PWR beat on revenue while also missing on earnings.  Unfortunately, FIS, WLK, HII, ZTS, PTON, VNT, WMS, PZZA, MD, and FOCS all missed on both the top and bottom lines.  It is worth noting that CI, INGR, AER, MODV, and ESAB all raised their forward guidance.  However, HII, TPX, PTON, VNT, WMS, and MD all lowered their guidance.

Overnight, Asian markets were very nearly red across the board in reaction to the US Fed.  Only Thailand (+0.04%) managed to hold onto the green.  Meanwhile, Hong Kong (-3.08%), which halted trading midday due to a typhoon warning, Malaysia (-2.15%), and Australia (-1.84%) led the region lower.  In Europe, we do see red across the board at midday.  The FTSE (-0.58%), DAX (-1.09%), and CAC (-0.76%) lead the region lower with many of the smaller exchanges even further down in early afternoon trade.  As of 7:30 am, US Futures are pointing to a down start to the day in follow-up to the second Fed reaction yesterday.  The DIA implies a -0.45% open, the SPY is implying a -0.66% open, and the QQQ implies a -0.90% open at this hour. 10-year bond yields are spiking to 4.193% and Oil (WTI) is down 1.66% to $88.50/barrel in early trading.

The major economic news events scheduled for Thursday include September Imports / Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Unit Labor Cost, and Q3 Nonfarm Productivity (all at 8:30 am), Oct. Services PMI (9:45 am), Sept. Factory Orders and Oct. ISM Non-Mfg. PMI (all at 10 am).  The major earnings reports scheduled for the day include GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, and ZTS before the open.  Then after the close, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report. 

In economic news later this week, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This huge earnings week comes to an end on Friday, as ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

Now that the Fed has disappointed dreamers (who expected to hear the worst is over, the Fed is done with big tightening moves, and we’re off to the races) it looks like markets may be headed back down to retest the mid-October lows. The DIA is giving up its T-line in premarket (and was the last major index to do so). China also reiterated that, despite rumors, they are committed to the “Zero Covid” policy of lockdowns. The next shoe to drop may well be the Bank of England rate decision at 8 am Eastern. So, buckle in for a potentially bumpy ride.

The bullish trend is now broken in the QQQ, SPY, and as of premarket the DIA. Extention from the T-line (8ema) is likely not a factor, although the QQQ is very extended below it at this point. However, T2122 says we are have room to run since we are still in the mid-range. Once again, be very careful about chasing. This is not only a very bearish market, but very volatile. And a relief rally might “rip your face off.” So, strongly consider letting the panic settle out before taking any new trades. Emotions will kill a trader! Control your FOMO and your fear in general. I promise you, there will be plenty of money to make after the knee-jerks ease up.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SQQQ, QID, RIG, BITO, AMD, XLK, AAPL, GM, TDOC, QCOM. 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

A huge Bull Trap was in effect at the open Tuesday as markets gapped strongly higher (up 1% in the SPY, up 0.6% in the DIA, and up a massive 1.4% in the QQQ). However, the bears immediately stepped in and sold off all three major indices hard for the first hour, filling the gap in 30 minutes and then continuing South that amount or more in the second 30 minutes.  Once that trap was sprung, the large caps traded sideways near the lows for the rest of the day.  Meanwhile, the QQQ continued a modest selloff over the afternoon as well.  This action gave us Bearish Engulfing candles in the SPY and DIA as well as a large, black, outside day candle in the QQQ.  The action also took the QQQ back below its T-line (8ema).

On the day, eight of the ten sectors were in the green with the red coming from the Technology (-0.52%) and Consumer Cyclical (-0.17%) sectors while Basic Materials (+1.07%) led the pack higher.  At the same time, SPY fell 0.43%, DIA fell 0.31%, and QQQ fell 1.02%.  The VXX is off 0.96% to 17.49 and T2122 remains in the overbought territory at 88.92.  10-year bond yields have recovered from early losses to be at 4.05% and Oil (WTI) is up more than 2% to $88.30/barrel.  So, this was just a “Bull Trap” day that then faded into a ”wait for the fed” mood all afternoon.

In economic news, the October Mfg. PMI came in a bit above forecast at 50.4 (versus 49.9 expected and 49.9 in September).  The same was true for October ISM Mfg. PMI which came in a 50.2 compared to a forecast of 50.0 and the September value of 50.9.  The oddity was October ISM Mfg. Employment came in a 50.0 compared to the forecast of 53.0 and the September reading of 48.7.  The September JOLTs came in well above expectation at 10.717 million (versus the forecast of 10.000 million and the August number of 10.280 million).  This jump may give cause the Fed to act even more aggressively (or at least give cover for the expected 0.75% hike).  Finally, after the close, API Weekly Crude Oil Stocks fell far more than expected.  The actual number was -6.530 million barrels compared to a forecast of +0.267 million barrels and last week’s build of 4.520 million barrels.

SNAP Case Study | Actual Trade

In stock news, TRQ has postponed a shareholder meeting intended to approve the company’s acquisition by RIO.  The delay comes at the request of RIO.  Elsewhere, UAL pilots have voted to reject a new contract offer from the company.  This throws out the tentative deal reached in June and the unions said pilots would immediately begin to picket the airline.  Meanwhile, INTU has halted hiring at its Credit Karma unit per a report from Bloomberg. Bloomberg also reported that TSLA will be bringing 200 engineers from its Chinese factory to its Fremont CA factory in order to increase US production.  This move may face opposition since the Fremont plant has recently laid off staff.  In legal action, the SEC fined KOP $1.3 million for misleading statements and failing to disclose material information. In addition, the state of Ohio sued DG for shelf prices that were substantially lower than what was charged at the register for 16%-88% of its products.  In layoff news, UPST laid off approximately 10% of their staff due to a “challenging economy.”

In miscellaneous news, Reuters reports that the Treasury Dept. repelled cyber attacks from a pro-Russian hacker group (the same one that attacked banks and airports) in early October.  AMZN sold off 5.52% on Tuesday, causing its valuation to fall below $1 trillion for the first time since April 2020.  BP announced an additional $2.5 billion for its stock buyback plan (to be used this year).  This brings the BP total 2022 buyback to $18.5 billion.

After the close, AIG, MDLZ, EIX, DVN, ANDE, CZR, ABNB, VOYA, CLX, PARR, FMC, LFUS, CNDT, SCI, SMCI, BXC, PSA, CHK, CRK, PEAK, CACC, CRUS, EXR, AEIS, UNVR, BFAM, and COKE all reported beats on the revenue and earnings lines.  Meanwhile, MCK, MTCH, PRU, AMCR, CWH, RNR, TA, and EA reported beats on revenue while missing on earnings.  On the other side, OKE, UNM, AIZ, OI, WU, THG, YUMC, and MCY all missed on revenue while beating on earnings.  Unfortunately, ET, AMD, REZI, CAKE, and VRSK missed on both the top and bottom lines.  It is worth noting that MCK, and SMCI both raised their forward guidance.  However, AMD, ABNB, REZI, and EXR all lowered their forward guidance.

So far this morning, CVS, HUM, GSK, CVE, NVO, CDW, TEL, TT, ETR, OMI, ZBH, ROK, ODP, VMC, HZNP, SITE, VSH, FUN, SHOO, NYT, UTHR, DNOW, FDP, and RITM all reported beats on the revenue and earnings lines.  Meanwhile, DISH, EL, FYBR, GNRC, and BLCO all missed on revenue while beating on earnings.  On the other side, MKL, YUM, MLM, BR, PSN, and SMG all missed on revenue while beating on earnings.  Unfortunately, VWCRY, CEQP, AVNT, EXPI, TRMB, ENTG, and PARA all missed on both the top and bottom lines.  It si worth noting that CVS, TT, ZBH, HZNP, SITE, and CRL all raised their forward guidance.  However, EL, TEL, MLM, AVNT, TRMB, ENTG, SHOO, and BLCO all lowered their forward guidance.

Overnight, Asian markets were mostly green as China continued to lead the region higher on speculation that Xi will reopen the country from covid lockdowns.  Hong Kong (+2.41%), Shenzhen (+1.34%), and Shanghai (+1.15%) led the gains while India (-0.34%) and New Zealand (-0.30%) were the only appreciable red in the region.  In Europe, the exchanges are mixed with the majors leaning red at midday.  The FTSE (-0.39%), DAX (-0.14%), and CAC (-0.08%) seem to be waiting on the Fed in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed, flat start to the day.  The DIA implies a -0.08% open, the SPY is implying a +0.01% open, and the QQQ implies a +0.15% open at this hour.  10-year bond yields are flat (at least by recent volatile standards) at 4.042% and Oil (WTI) is unchanged at $88.36/barrel in early trading.  Again, it feels like we are all waiting on the Fed announcement, wording, and Q/A session.

The major economic news events scheduled for Wednesday, we get ADP Nonfarm Employment (8:15 am), EIA Crude Oil Inventories (10:30 am), FOMC Statement and Fed Rate Decision (both at 2 pm), and FOMC Press Conference (at 2:30 pm).  The major earnings reports scheduled for the day include ATI, APO, AVNT, BLCO, BDC, EAT, BR, CHRW, CDW, FUN, CVE, CRL, CLH, CEQP, CVS, EMR, ENTG, ETR, EL, EXPI, RACE, FYBR, GNRC, GSK, HZNP, HUM, JLL, MKL, MLM, NYT, NMR, DNOW, ODP, OMI, PARA, PSN, PGR, RITM, ROK, SABR, SMG, SBGI, SITE, SHOO, TT, TRMB, UTHR, VSH, VMC, YUM, ZBH before the open.  Then after the close, ALB, ALGT, ALL, ATUS, AFG, APA, ACA, EQH, BBSI, BKNG, CPE, CF, CHRD, CTSH, CLR, CCRN, CW, EBAY, EQIX, EQX, ETSY, ES, FLT, FTNT, GFL, HST, HHC, ICLR, IR, KMPR, KD, LHCG, LNC, LUMN, MRO, MATX, MET, MGM, MKSI, MOD, NUS, NTR, OPAD, PK, PDCE, PAA, PAGP, PTC, QRVO, QCOM, QDEL, O, RCII, ROKU, RYI, SIGI, SUM, SLF, SU, RUN, RIG, TSE, TTMI, TPC, VSTO, WCN, WTS, WERN, WES, WSC, YELL, and Z report.

In economic news later this week, on Thursday, Imports/Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, Q3 Unit Labor Costs, Services PMI, Sept. Factory Orders, Oct. ISM Non-Mfg. PMI report. Finally, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This is a huge earnings week as on Thursday, GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, ZTS, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report.  Finally, on Friday, ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

So, as Fed day starts, it seems the market is expecting a 0.75% rate hike but is hoping to hear a softening of tone and perhaps even a hopeful word that the pace of rate hikes will decrease and end during Q1. Until we hear from the Fed, I would expect a mostly dead market with all the early bets placed and the rest of us waiting to see how things shake out before making new trades.

The bullish trend is not broken and today’s premarket action is very small and indecisive so far. Extention from the T-line (8ema) is not a factor although the DIA remains a bit extended. However, T2122 says we are still in the overbought area. Unfortunately, markets only “tend to react” to overbought or oversold conditions. They can stay extended for quite some time (longer than we can stay solvent as the saying goes). Once again, expect a knee-jerk reaction at 2 pm and perhaps another at 2:30 pm (or shortly thereafter) at a minimum. Do not feel like you have to get your trades on immediately on the Fed news. Let the crazy volatility level out instead of chasing. Control your FOMO I promise you, there will be plenty of money to make after things the crazy volatility settles.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

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

Stocks gapped down at the open Monday (down 0.63% in the SPY, 0.53% in the DIA, and 0.77% in the QQQ).  From that point, the SPY and QQQ rode the rollercoaster sideways around that opening price.  The DIA did something similar, just at a higher-level floating back and forth inside the morning gap.  This action is giving us inside day, Spinning Top (DIA and QQQ) or Doji (SPY) candles in the major indices (or Bearish Harami in the QQQ).  The QQQ also bounced up off its T-line (8ema) and 200sma while the two large-cap indices did not get low enough to retest the T-line level or any other major averages.  All of this happened on much lower-than-average volume, except in the DIA where money was going to seek shelter.

On the day, eight of the ten sectors are in the red with Energy (+0.65%) way out front in leading the gains while Technology (-1.11%) lagged far behind.  Meanwhile, SPY lost 0.70%, DIA lost 0.33%, and QQQ lost 1.16%.  The VXX was down 1.5% to 17.66 and T2122 fell but remains deep in the overbought territory at 91.75.  10-year bond yields spiked up to 4.054% and Oil (WTI) is down 1.99% to $86.16/barrel.  So, overall, it was an indecisive day as markets get ready to take in heavy earnings and wait on the Fed hike/verbiage on Wednesday.

For the month, DIA led the comeback, posting a huge 13.96% gain (the largest gain in 45 years).  SPY came in second, giving us an 8.13% gain.  However, the beleaguered high-tech QQQ lagged behind, posting only a 4% gain.  It is worth noting that SPY showed significant lower wick for October, printing a Bullish Harami candle.  However, QQQ showed major indecision, printing a white-bodied, Spinning Top Bullish Harami candle for the month.  While the DIA closed above the September candle, none of the 3 major indices has challenged the monthly downtrend yet.

SNAP Case Study | Actual Trade

In economic news, Chicago PMI came in below expectations at 45.2 (compared to a forecast of 47.0 and a September reading of 45.7).  In the afternoon, Bloomberg reported that 37% of US small businesses could not pay their rent in October. Still, this is questionable data from a mailed survey of 4,789 businesses.  (The same survey more than half of MA and 49% of NJ businesses could not make rent.)  During the evening, President Biden said he would ask Congress to implement a tax on “windfall profits” that oil and gas companies have been raking in since the war in Ukraine began.

In stock news, RIVN notified people who have reservations to buy one of their vehicles that R1T “Max Pack” trucks will not start until 2024.  This is far after the original “summer 2023” promised delivery.  In China, China Southern Airlines has canceled the planned return to the use of BA’s 737 Max planes.  This would have been the plane’s first flight in China since 2019.  In other China news, Reuters reports that fearing Covid-19 (after a previous worker lock-in), scores of workers at AAPL’s primary iPhone supplier (Foxconn) climbed fences and fled the main iPhone plant in Zhengzhou.  Meanwhile, AMZN announced it will stop listing products from its largest Indian sellers (Appario).  Recent data is not available, but in 2019 Appario accounted for 35% of AMZN sales in India.  Elsewhere, DAL pilots have voted to authorize a strike if union negotiators can’t reach a deal with the airline.  However, due to the Federal “cooling off period” law, there is not expected to be any impact on Thanksgiving travel.

After the close, AFL, CAR, NXPI, WMB, CVI, BCC, AMKR, LEG, HOLX, AWK, VAC, CNO, ANET, SBAC, STRL, and VNO all reported beats on the revenue and earnings lines.  Meanwhile, TEN, SYK, ACHC, KMT, and CIVI all beat on revenue while missing on earnings.  On the opposite side, CINF, HLF, CHE, and CLW all missed on revenue while beating on the earnings line.  However, GT and FLS both missed on the top and bottom line.

So far this morning, MPC, PSX, EPD, LLY, LEA, LDOS, MPLX, CNP, WEC, AME, SON, XYL, LPX, IT, ARCB, BLD, IDXX, WAT, and CHT have all reported beats to the top and bottom lines.  Meanwhile, TM, UBER, KKR, TAP, HSC, NEM, AIRI, and ARNC reported beating on revenue while missing on earnings.  On the other side, BP, PFE, SONY, ETN, HSIC, WAB, TRI, and SEE all missed on revenue while beating on the earnings line.  Unfortunately, ZBRA, LCII, CTLT, and LGIH missed on both the top and bottom lines.   Note that PFE, AME, XYL, IT, BLD, and SOFI all raised forward guidance.  However, LLY, ZBRA, CTLT, LGIH, WAT, and USAC all lowered their forward guidance.

Overnight, Asian markets leaned heavily to the green side.  Only Malaysia (-0.99%) and New Zealand (-0.19%) were in the red.  Meanwhile, Hong Kong (+5.23%), Shenzhen (+3.24%), and Shanghai (+2.62%) roared higher to lead the region to gains.  (The apparent cause for Chinese stocks exploding higher were rumors of talks aimed at reopening the country from Covid restrictions.  However, Chinese PMI also came in slightly better than expected at 49.2.)  In Europe, the exchanges are also nearly (and strongly) green across the board at midday.  Only Greece (-0.24%) is in the red, while the FTSE (+1.63%), DAX (+1.28%), and CAC (+1.74%) are leading a broad-based and strong rally in early afternoon trade. As of 7:30 am, US Futures are pointing toward a gap higher to start November.  The DIA implies a +0.60% open, the SPY is implying a +0.90% open, and the QQQ implies a +1.15% open at this hour.  Meanwhile, 10-year bond yields have plummeted again to 3.949% while Oil (WTI) is up 1.5% to $87.82/barrel in early trade.

The major economic news events scheduled for Tuesday include Mfg. PMI (9:45 am), October ISM Mfg. PMI (10 am), September JOLTs Job Openings (10 am), and API Weekly Crude Oil Stocks (4:30 pm) are reported.  The major earnings reports scheduled for the day include AJRD, AGCO, AME, ARCB, ARNC, BP, CTLT, CNP, CIGI, ETN, ECL, LLY, EPD, FOXA, BEN, IT, HSIC, IDXX, INCY, KKR, LCII, LEA, LDOS, LGIH, LPX, MPC, TAP, MPLX, NEM, PFE, PSX, SEE, SPG, SIRI, SON, SONY, SUN, SYY, TRI, BLD, TM, UBER, WAB, WAT, WEC, XYL, and ZBRA before the open.  Then after the close, AMD, ABNB, AMCR, AIG, ANDE, AIZ, BXC, BFAM, CZR, CWH, CAKE, CHK, CRUS, CLX, CRK, DVN, EIX, EA, ET, ENLC, EXR, FMC, THG, PEAK, LBTYA, LFUS, MTCH, MCK, MDLZ, OI, OKE, PARR, PRU, PSA, RNR, REZI, SCI, SKY, SMCI, TA, UNVR, UNM, VRSK, VOYA, WU, and YUMC report. 

In economic news later this week, on Wednesday, we get ADP Nonfarm Employment, EIA Crude Oil Inventories, FOMC Statement, Fed Rate Decision, and FOMC Press Conference.  Then on Thursday, Imports/Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, Q3 Unit Labor Costs, Services PMI, Sept. Factory Orders, Oct. ISM Non-Mfg. PMI report. Finally, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This is a huge earnings week as on Wednesday, ATI, APO, AVNT, BLCO, BDC, EAT, BR, CHRW, CDW, FUN, CVE, CRL, CLH, CEQP, CVS, EMR, ENTG, ETR, EL, EXPI, RACE, FYBR, GNRC, GSK, HZNP, HUM, JLL, MKL, MLM, NYT, NMR, DNOW, ODP, OMI, PARA, PSN, PGR, RITM, ROK, SABR, SMG, SBGI, SITE, SHOO, TT, TRMB, UTHR, VSH, VMC, YUM, ZBH, ALB, ALGT, ALL, ATUS, AFG, APA, ACA, EQH, BBSI, BKNG, CPE, CF, CHRD, CTSH, CLR, CCRN, CW, EBAY, EQIX, EQX, ETSY, ES, FLT, FTNT, GFL, HST, HHC, ICLR, IR, KMPR, KD, LHCG, LNC, LUMN, MRO, MATX, MET, MGM, MKSI, MOD, NUS, NTR, OPAD, PK, PDCE, PAA, PAGP, PTC, QRVO, QCOM, QDEL, O, RCII, ROKU, RYI, SIGI, SUM, SLF, SU, RUN, RIG, TSE, TTMI, TPC, VSTO, WCN, WTS, WERN, WES, WSC, YELL, and Z report.  On Thursday, GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, ZTS, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report.  Finally, on Friday, ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

In late-breaking news, JNJ announced they will buy ABMD at $380/share (a 50% premium to Monday’s closing price of $252.08). The $16.6 billion deal will strengthen JNJ’s cardiovascular business. The other news is the big lift China has given to global markets overnight. Just be careful, because at this point it seems to be based on rumor or opening which could evaporate like mist. Beyond those, the main news continues to be the flood of earnings data. Results are shown above, but in general, I would characterize them as pretty good (especially when you consider the constant mantra of “inflation and recession” we have heard for months). With that said, continue to be cautious, and don’t be in a hurry to chase a gap this morning. Wait until the market open has settled. Remember that rotation continues to be in play among sectors and asset classes (capitalization). You need look no further than the massive DIA performance in October to show that rotation. (When was the last time the stodgy, mega-cap, DIA components led a rally this way? I’ll tell you, it’s been 45 years.)

The trend remains bullish across the market indices and today’s premarket action is looking for a gap back up to retest Friday’s highs (so far). Extention from the T-line (8ema) is not really a factor although the DIA is just a bit extended. However, T2122 says we are still overbought. Unfortunately, markets only tend to react to overbought or oversold conditions. They can stay extended for quite some time (longer than we can stay solvent as the saying goes). Finally, don’t forget the Fed announces Wednesday and this is likely another time where the wording of the statement and exactly how Powell answers questions will be at least as important as the rate hike size. So, a pause until the Fed announcement may well be in the cards.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: FCX, GDX, MARA, AI, TSLA, AMAT, LTHM, QCOM, AAPL, JNK. 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 diverged at the open again Friday with the QQQ gapping down a quarter of a percent, the SPY opening flat, and the DIA gapping up by four-tenths of a percent. Still, at that point, all 3 major indices got in lock-step as the short squeeze was on.  We saw a strong rally until 11:15 am and then a slower rally continuing the rest of the day, closing near the highs, in all three of those indices.  This action gave us large, white, Bullish Engulfing candles in both the SPY and QQQ as well as a gap-up, white near Marubozu candle in the DIA.  It’s worth noting that the DIA is getting quite extended from its T-line (8ema) and had also broken up through its 200sma by the close.  Meanwhile, SPY broke its 50sma while the QQQ has not quite made it to that test. 

On the day, nine of the 10 sectors are in the green.  Technology (+2.78%) and Comm.  Services (+2.62%) led the market higher while Basic Materials (-0.27%) was the down sector.  The SPY gained 2.35%, DIA gained 2.51%, and QQQ gained 3.06%.  At the same time, VXX fell 2.34% to 17.93 while T2122 is very much overbought at 95.99.  10-year bond yields remain up slightly to 4.016% and Oil (WTI) was down 0.99% to $88.19/barrel.  Overall, it was a strong bull day (short squeeze?) in the recent uptrend.  It also led to a second straight week of gains in the DIA, SPY, and QQQ.

In economic news, September PCE Price Index (a favorite Fed indicator) remained steady versus the August readings at +0.3% month-on-month and +6.2% year-on-year.  However, September Personal Spending came in higher than expected at +0.6% (as compared to +0.4% forecast but in line with the August reading of +0.6%).  Meanwhile, the Michigan Consumer Sentiment came in slightly improved at 59.9 (versus the 59.8 forecasted and the previous reading of 59.8).  This would all seem to indicate that while inflation remains high, it may have stopped rising, and in either case, the consumer has not slowed down buying and at least has not had a decline in mood.  Finally, the Sept. Pending Home Sales fell much more than forecast at -10.2% (compared to a -5.0% forecast and the August reading of -1.9%).  This obviously corresponds to the interest rate sensitivity of home buyers that would be locking in 30-year debts.

SNAP Case Study | Actual Trade

In stock news, Bloomberg reported Friday that APO, BX, and KKR are now under investigation for antitrust activities through their influence on the boards of various companies in which they hold major stakes.  Across the pond, an Italian court has decided to suspend making a decision on an AMZN request to annul the $1.12 billion fine imposed by Italy’s antitrust watchdog agency.  This suspension will last until an EU Court rules on the case.  Elsewhere, the EU antitrust regulators ordered ILMN to keep Grail a separate entity pending the handing down of an order to prohibit the merger.  (The EU ordered the deal blocked on Sept. 6.)  Back in the US, BBBY said Friday it is reviewing a data breach to determine what data had been accessed by hackers earlier this month. GM paused its advertising on TWTR as Musk has loosened restrictions on speech and trolls are testing the new limits during the weekend with posts that would have previously drawn a ban.

In miscellaneous news, on Friday Canada implemented restrictions on foreign entities with at least partial state ownership participating in Canadian “strategic minerals” projects. (The rules were clearly aimed at blocking Chinese companies from taking on positions in mining operations related to rare earths, lithium, cobalt, nickel, and even copper.)  The mega-cap, safety play stalwarts have been killing it recently. XOM, UNH, PEP, MRK, MCD, LLY, TMUS, AMGN, CI, and HUM are just some of the big boys that all closed at all-time highs Friday. Finally, Bloomberg reported Sunday that economists at GS now expect the Fed interest rates to peak at 5% (25 basis points higher than their previous predictions), but that the peak will come in March 2023 (earlier than previous predictions).  GS said they expect Fed hikes to end with 75 basis points this week, 50 basis points in December, and then 25 basis point hikes in both February and March.

In late-breaking news, RTX paid a former employee (whistleblower) $1 million on Sunday after he reported the company for submitting false GPS data to the Air Force and the company punished him for the revelation.  Abroad, Luiz Inácio Lula da Silva (known as Lula of the Social Democrat “Worker’s Party”) won the hard-fought runoff election for President of Brazil Sunday.  At the same time, wheat prices jumped 6% as Russia continues to stop Ukrainian grain exports on false “need more inspection” pretexts and over the weekend said it will end the deal to allow those exports as of Nov. 1.  Finally, the European Statistics Office announced overnight that Eurozone inflation has hit a record 10.7% in October.

So far this morning CNA, GPN, JELD, SXC, and L have all reported beats on both the top and bottom lines.  Meanwhile, XPO reported a miss on revenue while also beating on earnings.

Overnight, Asian markets were strongly green with the exception of China.  Hong Kong (-1.18%), Shanghai (-0.77%), and Shenzhen (-0.05%) were the only red in the region.  At the same time, New Zealand (+1.88%), Japan (+1.78%), and India (+1.27%) led the region higher.  In Europe, exchanges are mixed at midday.  The FTSE (+0.11%), DAX (+0.17%), and CAC (-0.03%) lead on volume while most smaller exchanges are showing slightly more significant, yet still modest moves in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the week.  The DIA implies a -0.50% open, the SPY is implying a -0.58% open, and the QQQ implies a -0.79% open at this hour.  10-year bond yields are back up to 4.046% and Oil (WTI) is down 1.67% to $86.43/barrel in early trade.

The major economic news events scheduled for Monday is limited to Chicago PMI (9:45 am).  The major earnings reports scheduled for the day include ARLP, CAN, GPN, HWM, NSP, JELD, ON, PEG, SAIA, and XPO before the open.  Then after the close, ACHC, AFL, AWK, ANET, CAR, BCC, CHE, CINF, CIVI, CLW, CNO, CVI, FLS, GT, HLF, HOLX, KMT, LEG, VAC, NXPI, RRX, SBAC, STRL, SYK, and WMB report. 

In economic news later this week, on Tuesday, Mfg. PMI, ISM Mfg. PMI, September JOLTs Job Openings, and API Weekly Crude Oil Stocks are reported. On Wednesday, we get ADP Nonfarm Employment, EIA Crude Oil Inventories, FOMC Statement, Fed Rate Decision, and FOMC Press Conference.  Then on Thursday, Imports/Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, Q3 Unit Labor Costs, Services PMI, Sept. Factory Orders, Oct. ISM Non-Mfg. PMI report. Finally, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This is a huge earnings week as on Tuesday, AJRD, AGCO, AME, ARCB, ARNC, BP, CTLT, CNP, CIGI, ETN, ECL, LLY, EPD, FOXA, BEN, IT, HSIC, IDXX, INCY, KKR, LCII, LEA, LDOS, LGIH, LPX, MPC, TAP, MPLX, NEM, PFE, PSX, SEE, SPG, SIRI, SON, SONY, SUN, SYY, TRI, BLD, TM, UBER, WAB, WAT, WEC, XYL, ZBRA, AMD, ABNB, AMCR, AIG, ANDE, AIZ, BXC, BFAM, CZR, CWH, CAKE, CHK, CRUS, CLX, CRK, DVN, EIX, EA, ET, ENLC, EXR, FMC, THG, PEAK, LBTYA, LFUS, MTCH, MCK, MDLZ, OI, OKE, PARR, PRU, PSA, RNR, REZI, SCI, SKY, SMCI, TA, UNVR, UNM, VRSK, VOYA, WU, and YUMC report.  Then Wednesday, ATI, APO, AVNT, BLCO, BDC, EAT, BR, CHRW, CDW, FUN, CVE, CRL, CLH, CEQP, CVS, EMR, ENTG, ETR, EL, EXPI, RACE, FYBR, GNRC, GSK, HZNP, HUM, JLL, MKL, MLM, NYT, NMR, DNOW, ODP, OMI, PARA, PSN, PGR, RITM, ROK, SABR, SMG, SBGI, SITE, SHOO, TT, TRMB, UTHR, VSH, VMC, YUM, ZBH, ALB, ALGT, ALL, ATUS, AFG, APA, ACA, EQH, BBSI, BKNG, CPE, CF, CHRD, CTSH, CLR, CCRN, CW, EBAY, EQIX, EQX, ETSY, ES, FLT, FTNT, GFL, HST, HHC, ICLR, IR, KMPR, KD, LHCG, LNC, LUMN, MRO, MATX, MET, MGM, MKSI, MOD, NUS, NTR, OPAD, PK, PDCE, PAA, PAGP, PTC, QRVO, QCOM, QDEL, O, RCII, ROKU, RYI, SIGI, SUM, SLF, SU, RUN, RIG, TSE, TTMI, TPC, VSTO, WCN, WTS, WERN, WES, WSC, YELL, and Z report.  On Thursday, GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, ZTS, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report.  Finally, on Friday, ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

Again this week, the flood of earnings reported continues. Even so, traders remain very nervous after AMZN’s forecast of a grim holiday season coming and AAPL’s poor iPhone sales (although the company beat on both lines). With that said, don’t expect prices to gap and run the same way. You have to look no further than Friday to see the gap down, reversal, and strong bull move shown in the SPY and QQQ. So, be cautious, and don’t be in a hurry to get your positions on until the market settles. Remember that rotation continues to be in play among sectors and asset classes (capitalization). With the Fed meeting again this week (futures say we will definitely get another 0.75% hike, but whispers hope for softer language from Chair Powell), we may see some “wait and see” in the market the next 2.5 days.

The trend remains bullish across the market indices and today’s premarket action is looking for a gap back inside of Friday’s candle. Extention from the T-line (8ema) is not a factor in any of the major indices at this point. However, T2122 says we are still deeply overbought. With that said, it does look like the DIA could use some rest. High volatility and intraday reversals seem to be the norm. So, if you can’t handle the short-term pain of a whipsaw, it may be time to pursue more cautious trading strategies (options spreads for example), including remaining hedged, quick, and/or small.

Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And when price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Also, keep in mind that trading is not a hobby. It’s a job. 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. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ETHE, GDX, GOOG, FCX, AMAT, CHWY, AAPL, AI, AMZN. 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.

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

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