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).

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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.

🎯 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 gapped modestly lower on Wednesday (down 0.48% in the SPY, down 0.33% in the DIA, and down 0.47% in the QQQ).  All three major indices took the first hour to find their footing and then a selloff began at about 10:30 am and lasted until about 11:45 am.  However, at that point, the bears took a rest and all three indices just meandered sideways along the bottom of their range the rest of the day.  This action gave us black-bodied Bearish Harami candles in the QQQ, SPY, and DIA with the latter two being more indecisive (Spinning Top type candles).  All three indices have held their T-lines (8ema) as support so far.

On the day, all 10 sectors are in the red as Technology (-1.79%) led the way lower and Communication Services (-0.20%) held up better than other sectors.  At the same time, the SPY was down 1.10%, the DIA was down 0.61%, and QQQ was down 1.78%.  At the same time, the VXX has shot up 3.74% to 11.66 and T2122 fell back out of the overbought territory and into the midrange at 66.30.  10-year bond yields are down to 3.625% and Oil (WTI) is up by 1.63% to $78.40 per barrel.  So, on the day, we saw an indecisive bearish leaning inside day, but support may be holding and there was not a ton of strength shown by the bears. 

In economic news, EIA Weekly Crude Oil Inventories came in just a bit below expected at 2.423 million barrels (compared to a forecast of 2.457 million barrels and last week’s +4.140 million barrels).  That was the only data.  However, there were several Fed speakers.  For example, Fed Governor Cook told an audience that the strong January Jobs Report coupled with moderating Wage Growth has increased the chances of a soft landing.  Elsewhere, NY Fed President Williams told a Wall Street Journal event that financial conditions are roughly in line with what the FOMC wants to see, but “we still have work to do (on raising rates).”  He went on to say “Moving to a federal funds rate of between 5.00% and 5.25% “seems a very reasonable view of what we’ll need to do this year in order to get the supply and demand imbalances down.”   At the same time, Minneapolis Fed President Kashkari told a Boston group that “there are some hopeful signs” but also “in my judgment…we need to bring the labor market into balance so that tells me we need to do more.”  Meanwhile, Fed Governor Waller told Arkansas State University that “There are signs that food, energy, and shelter prices will moderate this year….and the Fed’s rapid increases in interest rates have begun to pay off.”  However, he went on to say he is not seeing signs of a quick decline and he is “prepared for a longer fight.”  Finally, he said, “Though we have made progress reducing inflation, I want to be clear today that the job is not done.”

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In stock news, bucking trend among big banks, JPM said Wednesday that it will be HIRING 500 new small business bankers between now and the end of 2024.   Later, a US federal judge dismissed a lawsuit against WMT that had claimed the company had deceived customers by selling their Walmart brand “Fudge Mint Cookies” which contain neither fudge nor mint.  Meanwhile, the California New Car Dealers Association said that the TSLA Model Y and Model 3 were the two top-selling cars in that state for 2022.   However, TM retained its top spot for overall vehicle sales in the state, selling 17.3% of all cars sold in 2022 across all its various models.  At the same time, CNC has reached a $215.4 million settlement with the state of CA to resolve accusations of overcharging a state program in 2017-2018.  After hours, AFRM announced it is cutting 19% of its workforce after the CEO said the company deliberately over-hired the last few years to avoid missing product opportunities that were too compelling to miss.  In similar news, DIS said it will cut 7,000 jobs (3.6% of the workforce) as it reorganizes after the recent leadership change.  Finally, GOOGL and GOOG shares took a nosedive on the day as its new AI Chatbot Bard shared wrong information replies during a live-streamed company event to promote the new tool.  The company also failed to provide details on how and when it will incorporate Bard with existing offerings.

In energy news, the front-month March Natural Gas contract fell 7.3% Wednesday.  This erased gains from the prior two days and took the commodity to a level not seen since September 2020, closing at $2.3960/mmBtu.  This was up off the session low of $2.3690.  Meanwhile, Oil (WTI) closed up for the third day in a row as a weakening dollar helped offset what the EIA Weekly report said was a seventh consecutive week of US crude inventory builds, reaching a 20-month high of more than 37 million barrels.  At the same time, the EIA report said Gasoline inventories grew by 5 million barrels to almost 16 million barrels. That same report said distillate (diesel and heating oil) stocks grew by 2.932 million barrels, which was an increase of 2.8 million barrels more than expected.

After the close, DIS, MOH, DCP, ORLY, RE, MGM, DBOEY, AB, EFX, MMS, ASGN, FLT, SONO, NVST, WTS, CXW, NLY, AEIS, and UVV all reported beats on both the revenue and earnings lines.  Meanwhile, GT, PPC, TSE, WYNN, and APP all beat on revenue while missing on earnings.  On the other side, XPO IFF, SON, STC, ENS, ULCC, AVB, TTMI, and MPWR all missed on revenue while beating on earnings.  Unfortunately, PAA, LNC, EQH, MAT, STE, HI, FWRD, and UHAL all missed on both the top and bottom lines.  It is worth noting that IFF, MAT, EFX, STE, TTMI, CXW, and FWRD all lowered their forward guidance.  However, MMS, ENS, and APP raised their forward guidance.

Overnight, Asian markets were mixed with China in the green and the rest of the region in the red.  Shenzhen (+1.64%), Hong Kong (+1.60%), Shanghai (+1.18%), and India (+0.12%) posted the only green.  Meanwhile, Singapore (-0.86%), Australia (-0.53%), and Malaysia (-0.42%) paced the losses.  In Europe, with the lone exception of Norway (-0.08%), the entire region is well into the green at midday.  The FTSE (+0.73%), DAX (+1.29%), and CAC (+1.28%) are leading that region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.60% open, the SPY is implying a +0.73% open, and the QQQ implies a +1.11% open at this hour.  At the same time, 10-year bond yields are down to 3.599% and Oil (WTI) is off fractionally to $78.31/barrel in early trading.

The major economic news events scheduled for Thursday is limited to Weekly Jobless Claims (8:30 am).   The major earnings reports scheduled for the day include ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, and WTW before the opening bell.  Then, after the close, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL report.  

Later this week, in economic news Friday, we get the Michigan Consumer Sentiment and Jan. Federal Budget Balance reports and we hear from Fed members Waller and Harker.  In terms of earnings on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

So far this morning, TM, PEP, PM, MT, CRARY, DUK, THC, BWA, IPG, WTW, HLT, TRI, VWDRY, ITT, BRKR, MSGE, PTEN, and WEX all beat on both the revenue and earnings lines.  Meanwhile, AZN, ASX, TPR, SEE, TPX, ARES, DBD, TIXT, and BN all missed on revenue while beating on earnings.  On the other side, CS, BAX, HII, and KIM all beat on revenue while missing on earnings.  Unfortunately, SIEGY, FAF, MAS, and CIGI missed on both the top and bottom lines.  It is worth noting that PM, WTW, TPR, and CIGI all raised their forward guidance.  However, BAX and MAS lowered their forward guidance.

In late-breaking news, in addition to its earnings miss, CS reported massive and unprecedented client outflows (customers withdrawing their money) while warning there may be more losses in 2023.  Elsewhere, Bloomberg reports that funds have closed more than $300 billion in short positions (according to data from JPM and DB).  This move brought the market closer to its 10-year average neutral position.  While this may seem bullish on its face, it could also mean that there are fewer shorts to squeeze and markets may have a harder time climbing unless the funds get outright bullish and start buying.

With that background, it looks like all three major indices are looking to gap higher while remaining inside the recent trading range (no breakouts). DIA’s gap will take it right back up to a potential resistance level. The trend remains bullish with even the DIA having slipped out of its Wedge formation modestly to the upside. With only the Weekly Jobless Claims scheduled today, look for generally strong earnings (better than had been expected), LUV being grilled by the Senate, and oddball news like yesterday’s GOOG AI demonstration failure to drive markets.

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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The SPY and QQQ opened essentially flat on Tuesday while the DIA gapped down a half of a percent at the opening bell.  All three major indices then meandered sideways until Fed Chair Powell began to speak at 12:40 pm.  At that point, the bulls spiked the market higher for 15 minutes, only to see the bears sell off all three indices hard for 35 minutes.  However, the bulls stepped back in at 1:40 pm to lead nearly as strong of a rebound rally lasted the rest of the day.  This action gave us large white candles with small upper and lower wicks.  The SPY and QQQ both held support at their T-line and DIA climbed back above its own T-line.  This took place on greater than average volume.

On the day, seven of the 10 sectors are green as Energy (+2.42%) led the way higher and Consumer Defensive (-0.42%) lagged the other sectors.  At the same time, the SPY was up 1.31%, the DIA was up 0.90%, and QQQ was up 2.07%.  Meanwhile, the VXX was down 3.10% to 11.24 and T2122 climbed back up inside of the overbought territory at 84.67.  10-year bond yields were higher again to 3.681% and Oil (WTI) just spiked higher by 4.53% to $77.47 per barrel.  So, on the day, we saw a blah day that got very volatile and eventually bullish after Fed Chair Powell gave his speech to the Washington Economic Club. 

The main news of the day was Fed Chair Powell’s Speech and Question-and-Answer Session at the Economic Club of Washington DC.  During his remarks, Powell said that “disinflation has begun…but it’s going to take a long time.”  He specifically cited the good sector as where the disinflation is showing itself strongest.  Later Powell said, “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in (to markets).”  He was short on specifics.  However, he did say that “we need to be patient” and that rates will need to be held higher for a long time.  Finally, he said he expects inflation to fall all year in 2023, but it was likely to take into 2024 before the Fed target of 2% inflation is hit.  On the topic of the Fed Balance Sheet, Powell said he expects it will take a couple more years before the Fed is ready to end the shrinking of its balance sheet (selling bonds).  Overall, the Dollar, Bonds, and the Stock Market all took Powell’s comments as less hawkish than expected.

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In other economic news, December Exports came in a $250.20 billion (down from $252.40 billion in November).  Meanwhile, December Imports were up slightly, coming in at $317.60 billion (up from $313.40 billion in November).  This also increased the Trade Deficit with a December balance of $67.40 billion (which was less than the forecast of $68.50 billion but also above the November value of $61.00 billion).  Still, this was a record for the “trade gap.”  Then, after the close, the API Weekly Crude Oil Stock Report showed an inventory drawdown of 2.184 million barrels (compared to an expected inventory build of 2.150 million barrels and last week’s 6.330-million-barrel build).  Finally, during his “State of the Union” address, President Biden called for an unspecified additional tax on Billionaires and corporate stock buybacks.  He also asked for more antitrust legislation, called for the passing of an act to stop companies from preventing workers from organizing unions, and lastly the broadening legislation to cap the cost of insulin, saying it needed to not be limited only to Medicare recipients.

In stock news, ZM announced it will lay off 15% of its employees (1,300 jobs).  Later, EBAY said it would lay off 4% (400 employees) of its own workforce.  ZM stock closed up almost 10% on the news.  In quasi-related news, Bloomberg reported that META is poised to ask its Managers to become individual contributors (in addition to managing their teams) or leave the company.  Meanwhile, DAL announced it was giving employees a 5% increase in pay across the board effective April 1.  DAL cited strong travel demand and industry labor shortages as factors in the decision.  Meanwhile, WFC agreed to pay $300 million to settle a shareholder lawsuit claiming the bank had hidden the fact it pushed unnecessary insurance on auto loan customers.  Elsewhere, HTZGC made a regulatory filing Tuesday that showed it actually owns less than half of the TSLA cars it had planned to buy in 2022 (and TSLA releases had announced).   Finally, after hours, BBBY said it has completed its last-ditch stock offering, saying that it had received $225 million and is expecting to receive another $800 million in future installments as HUD (lead investor in this offering) resells or keeps the new shares.

In airline industry news, a bankrupt South African airline (Comair) has filed suit against BA for fraud related to its agreement to buy eight 737 Max planes.  The suit claimed BA failed to disclose problems within its flight control system that caused the two plane crashes in 2018 and 2019 leading to airline losses.  BA refused to return the airline’s deposit on 737 Max planes after the crashes and 20-month groundings.  This is nearly identical to a suit filed by a Polish airline PLL LOT in 2021, which is still pending.  At the same time, BA competitor EADSY (Airbus) reported plane deliveries for January were down by a third, to 20 planes, according to Reuters.  In other labor-related news, SPR announced Tuesday that it is experiencing disruptions in supplying parts for the BA 787 and the EADSY A350 due to labor shortages. 

After the close, SNEX, LUMN, KD, OMC, AMCR, AIZ, VRTX, VOYA, FMC, EHC, CNO, ITUB, SSNC, WERN, QGEN, PLUS, PEAK, and ENPH all reported beats to the revenue and earnings lines.  Meanwhile, VFC, CCK, CSL, and FTNT all missed on the revenue line while beating on the earnings line. On the other side, NCR, WU, ILMN, ATO, RXO, and NBR all beat on the revenue line while missing on the earnings line.  Unfortunately, PRU, YUMC, CMG, VSAT, and JKHY all missed on both the top and bottom lines.  It is worth noting that KD, VRTX, FTNT, QGEN, and ENPH all raised their forward guidance.  However, CCK, EHC, SSNC, BKH, JKHY, and PEAK all lowered their own forward guidance.

Overnight, Asian markets were mixed again.  Taiwan (+1.41%), South Korea (+1.30%), and India (+0.85%) led the gainers.  Meanwhile, Shenzhen (-0.62%), Thailand (-0.60%), and Shanghai (-0.49%) paced the losses.  In Europe, the picture is much greener at midday with only Russia (-0.55%) in the red.  The FTSE (+0.72%), DAX (+0.76%), and CAC (+0.45%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly lower start to the day after Tuesday’s rally.  The DIA implies a -0.30% open, the SPY is implying a -0.32% open, and the QQQ implies a -0.18% open at this hour.  At the same time, 10-year bond yields are back down to 3.64% and Oil (WTI) is up 1.22% to $78.09/barrel in early trading.

The major economic news events scheduled for Wednesday is limited to EIA Crude Oil Inventories (10:30 am) and WASDE Report (noon).  However, we also have three Fed speakers (Williams at 9:15 am, Vice Chair for Bank Supervision Barr at 10 am, and Waller at 1:45 pm).  The major earnings reports scheduled for the day include FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, and YUM before the opening bell.  Then, after the close, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.   

In economic news later in the week, on Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

So far this morning, CVS, PFGC, PAG, UBER, ETN, D, YUM, UAA, WFRD, BDC, COHR, RITM, UA, SCGLY, and FUJIY all reported beats on both the revenue and earnings lines.  Meanwhile, TTE, EQNR, BAM, BG, CDW, TEVA, INGR, COTY, CME, TRMB, and EEFT all missed on revenue while beating on earnings.  On the other side, CRTO beat on revenue while missing on earnings.  Unfortunately, EMR, CPRI, REYN, and VSH missed on both the top and bottom lines.  It is worth noting that COTY, UAA, and BDC all raised their forward guidance.  However, INGR, CPRI, REYN, TRMB, VSH, and CRTO all lowered their own forward guidance.

In late-breaking news, interest rates dropped for a fifth consecutive week causing an 18% spike in refinance mortgage demand while new home purchase loan applications rose by 3%.  However, demand was still much lower than one year ago.  The average rate for a 30-year, fixed-rate, conforming mortgage fell to 6.18% with points also falling slightly.  Meanwhile, in addition to their earnings, CVS announced it has agreed to buy OSH for $39/share in cash ($10.8 billion overall).  This is CVS’s second acquisition in the healthcare provider space in a year.  Elsewhere, there were 4 big dividend moves of note.  DD hiked its dividend by 9.1% (to 2% annualized), VF cut its dividend by 41% to $0.30/share, MCRI declared a special dividend of $5.00/share, and MSBI hiked its dividend by 3.4% to 4.6% annualized.

With that background, it looks like all three major indices are looking to open as inside candles after yesterday’s strong move up. None of them appear to be retesting their T-lines (8ema) during premarket. However, DIA is not that far above its own T-line. The trend remains bullish (strongly bullish in the QQQ) in all three, but the DIA also remains in and upswing within its wedge. DIA and QQQ both have potential resistance just overhead with SPY dealing with a lesser level (from June ’22 highs and March ’22 lows). With only the EIA and Ag reports today, look for Fed speak as a potential volatility driver. However, in general, this should be a pure market sentiment day.

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.

🎯 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 lower on Monday (down 0.61% in the SPY, down 0.39% in the DIA, and down 0.90% in the QQQ).  From there, all three major indices rode the roller-coaster sideways all day long.  This action gave us gap-down, indecisive Doji or Spinning Top type candles in the three major indices. The SPY held its T-line as support. Meanwhile, the DIA gapped down through and rallied up to retest its own T-line from below, not quite getting back above it while at the same time finding support off its own 50sma.  This all happening on a much lower-than-average volume.

On the day, nine of the 10 sectors are red as Technology (-1.53%) led the way lower and Utilities (+0.46%) held up better than other sectors. At the same time, the SPY was down 0.61%, the DIA was down 0.10%, and QQQ is down 0.86%.  Meanwhile, the VXX was up 2.39% to 11.59 and T2122 dropped back down into the midrange at 54.39.  10-year bond yields have spiked higher again to 3.655% and Oil (WTI) is up 1.38% to $74.40 per barrel.  So, on the day, we saw a gap lower, but then indecision, perhaps meaning the bears are uncertain whether they really want to push the bulls.  Basically, both sides need a little energy from some catalyst. 

In stock news, DELL announced it is laying off 6,650 employees (5% of staff).  At the same time, PSA made an $11 billion hostile takeover bid for LSI.  This amounts to a bid of $129.30/share, but not in cash, in PSA stock instead.  LSI was at $110.58/share at the time of offer, but it closed up 11.28% to $123.05 on the day.  Elsewhere, after it reported beats on both lines, ON announced a $3 billion stock buyback program, which was double the size of the previous program.  This is significant in the chip sector that had been weak with the exceptions of AMD.  In other tech news, GOOGL announced it is planning to launch an AI Chatbot service called Bard (powered by GOOGL’s LaMDA which is a competitor to ChatGPT, which MSFT recently announced will be built into their products).  The service has already been released to beta testers.  Meanwhile, in the gold sector, NEM has made a $17 billion takeover bid for NCMGF.  Bloomberg reports the offer is not likely to be challenged by NEM rival GOLD.  Meanwhile, AMC announced a new ticket pricing structure where the ticket price will be based on seat location in tiers.

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In airline industry news, on Monday, the FAA said it is proposing a $1.1 million fine on UAL for conducting Boeing 777 flights without conducting the required preflight fire system warning checks.  UAL has 30 days to respond to the charges.  Elsewhere, the IATA (largest airline trade organization) said that many airlines will fail to meet the FAA deadline to retrofit altimeters to avoid 5G wireless interference.  (Last summer, VZ and T voluntarily agreed to delay their use of some 5G spectrum to give airlines more time.  However, now the FAA, VZ and T are negotiating again for another extension.)  This is expected to have some small impact on the telecom companies’ expansion of 5G their networks.  Meanwhile, the EU version of the FAA ruled Monday that it will not permit single pilot flights by 2030 as airlines had been seeking (to help with labor shortages).

In commodity news, the US Dollar rose to a 4-week high against the Euro Monday as the reverberations from last week’s January Payroll numbers continued.  This caused a dampening effect on all commodity prices.  Meanwhile, Bloomberg reports that the US will impose a 200% tariff on Russian Aluminum as soon as this week.  (Reportedly, the final decision has not been made as the Biden administration talks to US Aerospace and Auto industry leaders, the main importers of Russian Aluminum, about the damage that might cause to their businesses.)  Elsewhere, Reuters reports that US farmers are planning to boost corn acreage in 2023.  This comes after a late-season drought crushed the 2022 harvest and has brought US corn supplies to near decade-low levels.  This modest 2.5% shift in acreage use is likely to cause dramatic swings in everything from seeds and fertilizer to herbicides, and eventually to food prices.

In miscellaneous news, on Monday Atlanta Fed President Bostic told Bloomberg that unless last week’s Payrolls report turns out to be an anomaly, it would mean the Fed still has more work to do.  Specifically, he said the FOMC would need to push the peak interest rate higher than he now projects (which is 5%-5.25% as a terminal rate).  At the same time, late in the day Monday, GS cuts its odds of a recession in the next 12 months to 25% (down from 35%).  GS cited a rapid reduction in inflation and wage growth as well as improving business sentiment as supporting a “soft landing” and the Fed stopping its tightening regime sooner.  In an unrelated story, after hours Monday, Bloomberg reported that hedge funds tracked by GS trimmed their long positions at the fasted rate in two years over the last several market days.  However, they are also not taking huge short positions either.  Bloomberg also reported the JPM data on the matter concurred.  They called this “de-grossing” move the largest move to cash and lower-risk trades since the day after the first Reddit-driven squeeze in January 2021.  Then this morning, Minneapolis Fed President Kashkari told CNBC that the Fed has not done enough yet based on January’s explosive job growth and he is raising his terminal rate expectation to 5.4% (which is higher than what most of his peers have publicly announced). He also went further in saying “we need to raise rates aggressively to put a ceiling on inflation” (which the market will not like to hear.

After the close, ACM, NOV, SPG, SAVE, FN, SKY, DIOD, KMT, SSD, and GNW all reported beats on both the revenue and earnings lines.  Meanwhile, CINF and SWKS both beat on revenue while missing on earnings.  On the other side, PINS missed on revenue while beating on earnings. Unfortunately, ATVI, TFII, AMRK, LEG, and TTWO all reported misses on both the top and bottom lines.  It is worth noting that SWKS, LEG, SPG, TTWO, and PINS all lowered their forward guidance.  However, FN raised its own forward guidance.

Overnight, Asian markets were mixed on mostly modest moves.  South Korea (+0.55%), Hong Kong (+0.36%), and Shanghai (+0.29%) led the gainers.  Meanwhile, Malaysia (-0.95%), Australia (-0.46%), and India (-0.24%) paced the losses. In Europe, we see a similar picture taking shape at midday.  The FTSE (+0.49%), DAX (-0.17%), and CAC (unchanged) are typical of the spread in the region.  None of the European bourses have moved as much as one percent in either direction yet in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed and mostly flat start to the day.  The DIA implies a -0.09% open, the SPY is implying a +0.09% open, and the QQQ implies a +0.32% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.63% and Oil (WTI) is up more than 1.5% to $75.24/barrel in early trading.

The major economic news events scheduled for Tuesday December Imports/Exports, and Dec. Trade Balance (both at 8:30 am), and API Crude Oil Stocks (4:30 pm) are reported and Fed Chair Powell speaks at 12:40 pm.  The major earnings reports scheduled for the day include ADNT, AGCO, ARMK, ARCC, BP, BV, CG, CARR, CTLT, CNC, CEIX, DD, FSV, IT, GPK, HAIN, HTZ, INCY, J, KKR, LIN, NTDOY, NVT, OMF, RCL, SCSC, SPR, TDG, and XYL before the opening bell.  Then, after the close, AMCR, AIZ, ATO, CSL, CMG, CNO, CCK, EHC, ENPH, PLUS, FMC, FTNT, PEAK, ILMN, ITUB, JKHY, KD, NBR, NCR, OMC, PRU, RXO, SSNC, SNEX, VRTX, VFC, VSAT, WERN, WU, and YUMC report.   

In economic news later in the week, on Wednesday EIA Crude Oil Inventories are reported and Fed member Williams speaks.  On Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Wednesday, FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, YUM, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.  On Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

In overnight news, BBBY announced last night that it will try a list-minute (last ditch) stock sale to raise the cash to avoid bankruptcy. They are hoping the new shares will raise just over $1 billion. Elsewhere, CS announced that it is canceling (at least for now) the company “Compensation Day” where employees were told their bonus amounts (and given the money) for 2022. The company had previously announced they were slashing the bonus pool in half this year due to the financial condition of the company.

So far this morning, CARR, DD, J, GPK, XYL, IT, OMF, INCY, NVT, BV, ARCC, FISV, and CEIX all reported beats on both the revenue and earnings lines.  Meanwhile, BP, CNC, ARMK, ADNT, CTLT, FISV, and VVV all reported beats on revenue while missing on earnings.  On the other side, LIN, CG, and HAIN reported a miss on revenue while beating on earnings.  Unfortunately, NTDOY (Nintendo) missed on both the top and bottom lines.  It is worth noting that FISV raised its forward guidance while BV lowered its own forward guidance.

With that background, it looks like the SPY and DIA are going to test their T-lines (8ema) again this morning. Meanwhile, QQQ looks to be trying to put a bottom into its two-day pullback (at least in premarket trade). The wedge pattern in the DIA and the bullish trends in the SPY and QQQ remain the main technical features of the market at this point. Do not be surprised if we wander around until Fed Chair Powell’s remarks this afternoon. I think that Bostic and Kashkari were presignalling his sentiments (preparing the market for his words today) and that Powell is likely to make sure the market realizes there will be no “March pause” (as several talking heads had predicted in the recent past). However, he is also likely to say the jobs numbers were a good sign that the Fed is walking a “Goldilocks path” where inflation is coming down and at the same time jobs are being created. In short, he’s likely to imply that we just need to “stay the course” with modest hikes for a while to definitely get inflation under control at the same time we stay on the soft-landing trajectory.

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.

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped down on Friday (SPY gapped 1.24%, DIA gapped down 0.51%, and QQQ gapped down 2.29%) after January Payrolls crushed expectations.  However, the bulls stepped in immediately to rally back to the Thursday close level in the first 60-75 minutes.  All three major indices reached the highs of the day at 11:40 am.  Then the bears over again to start a selloff that lasted into the close.  This action gave us gap-down, Inverted-Hammer-type candles in the three major indices.  The DIA also fell back below its T-line (8ema).

On the day, all 10 sectors are red as Utilities (-1.99%) lead the way lower and Energy (-0.27%) held up better than the other sectors.  At the same time, the SPY is down 1.06%, the DIA is down 0.41%, and QQQ is down 1.78%.  Meanwhile, the VXX is up 0.98% to 11.32 and T2122 is dropping but remains just inside the overbought territory at 82.24.  10-year bond yields have spiked higher to 3.526% and Oil (WTI) is down 3.56% to $73.19 per barrel.  So, on the day, we saw a significant gap lower that the bulls tried to fade, only to be pushed back down by the bears.  This all happened on heavier-than-average volume.

In economic news, the January Jobs Reports were the headline makers.  January Nonfarm Payrolls increased a whopping +517k (compared to an estimate of +185k and the December value of +260k).  January Private Nonfarm Payrolls also far exceeded the estimates at +443k (versus the forecast of +190k and a December reading of +269k).  Both numbers crushed estimates as the leisure and hospitality sector showed a huge gain, followed by professional/business services, government, and healthcare.  The increases happened despite the Jan. Participation Rate also increasing to 62.4% (from the December value of 62.3%).  This surge in employment drove the January Unemployment Rate to a 53-year low (since 1969) of 3.4% (versus a forecast of 3.6% and a Dec. reading of 3.5%).  So, despite over 100,000 job cuts announced in January by various firms, the economy is still producing jobs at a massive rate, far faster than expected.  Markets were skeptical, but this could be a sign of the Fed threading the needle as inflation is falling while huge numbers of jobs are being created.  In other economic news, the Jan. Services PMI beat expectations at 46.8 (versus the forecast of 46.6 and the Dec. value of 44.7).  Finally, ISM Non-Mfg. PMI came in much hotter than expected at 55.2 (compared to the forecast of 50.4 and the Dec. value of 49.2).  So, judging by payrolls and purchasing managers’ outlooks, the economy is much stronger than the news headlines had led us to believe.

In energy news, the front-month March contract for Natural Gas fell another 21% last week, closing at $2.41/mmBtu. This is the lowest wholesale natural gas price in the US for over two years.  As a result, energy firms cut the number of active natural gas rigs to the lowest level since June 2020.  Meanwhile, Oil (WTI) closed down 3.56% on the day, resulting in an 8% drop for the week.  This may or may not be related to another cut in the number of oil rigs producing in the US.  Regardless, the number of oil rigs fell by almost 2% over the week.

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In stock news, the US Treasury Dept expanded eligibility for up to $7,500 tax credit to cover more expensive (SUVs).  This includes newly eligible models from F, GM, TSLA, and VLKAF.  In response to this news, TSLA raised the price of its Model Y by $1,000.  Elsewhere, late Friday Bloomberg reported that DIS is in talks to sell more of its movies and TV series to rival networks. (No specific rivals were mentioned.)  Meanwhile, HMC issued a “Do Not Drive” warning covering 8,200 of its vehicles over defective and unrepaired airbags.  After the close, LUV confirmed that its CEO will be testifying in front of a US Senate hearing on Thursday related to the company’s holiday travel mess.  Late Friday night, a train from NSC derailed near the border of Ohio and Pennsylvania.  On Saturday, 32,000 DIS theme park workers voted to reject a DIS contract proposal by a margin of 96% rejecting to 4% in favor.  The negotiations have been ongoing since August, but no date for the resumption of talks has been set yet.

In stock legal and regulatory news, on Friday, current and former US military members asked a federal judge to throw out the Chapter 11 bankruptcy filed by MMM subsidiary Aearo Technologies (as a means of protecting MMM against 230k lawsuits claiming the company’s defective earplugs had caused hearing loss for US military members).  At the same time, FDX lost its bid to have a judge throw out a $366 million jury award over a racial discrimination lawsuit that FDX lost.  Later, the Wall Street Journal reports that the US FTC is preparing to file an antitrust lawsuit against AMZN.  Also after the close, a jury found that TSLA and its CEO Elon Musk were not liable in a securities fraud case stemming from Musk’s tweets saying he had secured financing and was going to take TSLA private at a price 23% above the then-current market price.  In other court action, a US district judge denied the FTC request to stop META from buying virtual reality content maker Within Unlimited.

In miscellaneous news, the UN Food and Agriculture Organization (FAO) announced after the close Friday that world food prices fell again in January.  This was the 10^th consecutive drop in that food price index, with global food prices reaching the lowest level since September 2021.  They specifically cited drops in vegetable oils, dairy, and sugar prices while noting that cereals and meat prices remained stable for the month.  As an example, FAO said vegetable oil prices fell 2.9% in January while dairy prices fell 1.4%, and sugar declined 1.1%.

So far this morning, CAN, TKR, and IDXX reported beats on both the revenue and earnings lines.  Meanwhile, AMG and IX missed on revenue while beating on earnings.  On the other side, TSN beat on revenue while missing on earnings. Unfortunately, ENR missed on both the top and bottom lines.  (CMI and ON report closer to the open.)

Overnight, Asian markets were mixed but mostly red.  Hong Kong (-2.02%), Taiwan (-1.34%), and Shenzhen (-1.18%) led the region lower.  Japan (+0.67%) was an outlier to the upside.  In Europe, with the sold exception of Russia (+0.85%), bourses are red across the board at midday.  The FTSE (-0.77%), DAX (-1.03%), and CAC (-1.40%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -0.54% open, the SPY is implying a -0.71% open, and the QQQ implies a -0.91% open at this hour.  At the same time, 10-year bond yields are spiking again to 3.604% and Oil (WTI) is up a quarter of a percent to $73.56/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include AMG, CNA, CMI, ENR, IDXX, ON, IX, TKR, and TSN before the opening bell.  Then, after the close, AMKR, ATVI, ACM, CINF, DIOD, FN, KMT, LEG, NOV, PINS, SPG, SSD, SKY, SWKS, SAVE, TTWO, and TFII, report.  

In economic news later in the week, on Tuesday, December Imports/Exports, Dec. Trade Balance, and API Crude Oil Stocks are reported and Fed Chair Powell speaks.  Then Wednesday EIA Crude Oil Inventories are reported and Fed member Williams speaks.  On Thursday we get Weekly Jobless Claims.  Finally, on Friday, Michigan Consumer Sentiment and Jan. Federal Budget Balance are reported and we hear from Fed members Waller and Harker.

In terms of earnings later this week, on Tuesday, we hear from ADNT, AGCO, ARMK, ARCC, BP, BV, CG, CARR, CTLT, CNC, CEIX, DD, FSV, IT, GPK, HAIN, HTZ, INCY, J, KKR, LIN, NTDOY, NVT, OMF, RCL, SCSC, SPR, TDG, XYL, AMCR, AIZ, ATO, CSL, CMG, CNO, CCK, EHC, ENPH, PLUS, FMC, FTNT, PEAK, ILMN, ITUB, JKHY, KD, NBR, NCR, OMC, PRU, RXO, SSNC, SNEX, VRTX, VFC, VSAT, WERN, WU, and YUMC.  On Wednesday, FOX, BDC, BAM, BG, CPRI, CDW, CME, COTY, CVS, D, ETN, EMR, EEFT, FOXA, GPRE, INGR, NYT, PAG, PFGC, REYN, RITM, TEVA, TRMB, UBER, UA, UAA, VSH, WFRD, WEN, YUM, AB, UHAL, NLY, APP, ASGN, AVB, EQH, ENS, NVST, EFX, RE, FLT, FWRD, ULCC, GT, HI, IFF, LNC, MAT, MMS, MGM, MOH, ORLY, PPC, PAA, SON, SONO, STE, STC, SLF, TSE, TTMI, DIS, and XPO report.  On Thursday, we hear from ABBV, APO, MT, ARES, AZN, BN, BAX, BWA, BRKR, CIGI, DBD, DUK, FAF, GTES, HLT, HII, NSIT, NSP, IPG, ITT, K, LITE, MSGE, MAS, MDU, PATK, PTEN, PEP, PM, RL, SPGI, SEE, TPR, TU, TIXT, TPX, THC, TRI, TM, WMG, WEX, WTW, BHF, CBT, CC, BAP, DXCM, EQR, EXPE, FLO, G, LYFT, MTD, MHK, MSI, NGL, OSCR, PYPL. CNXN, TEX, MODG, USX, VTR, and YELL.  Finally, on Friday, ENB, FTS, GPN, HMC, IQV, MGA, NWL, SPB, and SLVM report.

Other late-breaking (and less market-related) news includes the “over-hyped” story of the Chinese spy balloon that the US shot down this weekend. Navy divers continue their work to recover the wreckage from the 7-mile-wide debris field. This story was over-hyped because it is the fourth recent such Chinese balloon overflight of the US (dating back to three during the Trump Administration) and is certainly not the only Chinese surveillance of the US that goes on constantly (satellites, perimeter flights, hacking, human assets, etc.). Nonetheless, the news cycle and political opportunity conspired to make this one a story. The only thing that matters here is if and how a US response might impact US-Chinese trade relations. The other story was a pair (7.7 and a 7.5 on the Rictor scale) of earthquakes in Southern Turkey. These should have minimal international market and business impacts but do have the potential to roil oil markets because they technically were located in the Middle-East and not extremely far from Syrian oil fields.

With that background, it looks like the SPY is going down to retest its T-line as support during pre-market trade. At the same time, DIA is failing its T-line as support and retesting its 50sma as support, all while QQQ pulls back but has not reached its T-line yet. DIA remains in its wedge, while the trend remains strongly bullish in the SPY and QQQ (trends have not even been retested by the pullback this morning). So, be careful and nimble on any short positions you might take and remember the bias is still bullish.

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.

🎯 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 Thursday (the SPY gapping up 1%, the QQQ gapping up 2.21%, and DIA gapping up just 0.17%).  At that point, the DIA sold off hard for 15 min. while the SPY and QQQ just chopped for the first 45 minutes.  Then SPY and QQQ both rallied hard for 40 minutes before joining DIA in a sideways grind with a slightly bullish trend that lasted until 2 pm.  However, at that point, markets sold off hard for a little over an hour.  Finally, the last 60 minutes saw a bounce.  This action gave us an indecisive gap-up, Spinning Top candle in the SPY, a black-bodied hammer in the DIA, and a gap-up white-bodied candle with upper and lower wicks in the QQQ.  SPY also completed a Golden Cross (50sma crossed above 200sma).

On the day, six of the 10 sectors were in the green as Technology (+3.58%) leads the way higher, and Energy (-1.99%) lagged behind the other sectors.  Meanwhile, the SPY was up 1.44%, the DIA was down 0.16%, and QQQ was up 3.59%.  At the same time, the VXX was up 2.19% to 11.22 and T2122 fell but remains deep in the overbought territory to 96.39.  10-year bond yields plunged down to 3.395% and Oil (WTI) was down 0.85% to $75.76 per barrel.  So, on the day, we saw very divergent markets as the massive technology big dogs pulled the QQQ and SPY higher while the DIA languished.  However, at the end of the day, we saw indecision across the board.  This all happened on heavier-than-average volume.

In economic news, Weekly Jobless Claims came in better than expected at 183k (compared to the forecast of 200k and the prior week’s reported 186k).  Q4 Nonfarm Productivity also came in much better than expected at +3.0% (versus the forecast of +2.4% and the Q3 reading of +1.4%).  In addition, Q4 Unit Labor Costs were also far better than expected at +1.1% (compared to a forecast of +1.5% and the Q3 reading of +2.0%).  However, December Factory Orders came in lower than expected at +1.8% (versus the forecast of +2.3%, but far better than the November number of -1.9%).  On the whole, I think the Fed liked those numbers as productivity was stronger than expected while labor costs rose less than expected and while factory activity remained positive (growing) it was not as hot as the average economist had predicted.

SNAP Case Study | Actual Trade

In stock news, Medicare Advantage released its proposal to DECREASE rates by 2.27% in 2024.  This was both unexpected and far below the 5% increase in 2023 (when it had proposed increasing 4.48%).  As a result, UNH, HUM, CNC, ELV, CVS, and CI all took a hammering Thursday.  Elsewhere, KKR made a bid to buy the controlling interest in Italy’s largest phone company for somewhere north of $22 billion.  (VIVHY owns the largest block of shares now at 24%.)  Meanwhile, the FTC has rejected a petition from META to have FTC Chair Lina Khan recused from participating in any review or decision on META’s proposed acquisition of (virtual reality app maker) Within Unlimited.  Finally, EU lawmakers agreed to tougher rules related to political ads that are targeted at limiting the power of GOOGL and META in the name of countering misinformation.

In energy news, the front month March Natural Gas contract closed lower to $2.456 per mmBtu.  This closing price came after trading at a 22-month low earlier in the session.  The continued fall in natty prices happened despite a larger-than-expected drawdown for US storage in the weekly inventory report.  (The EIA reported a draw of 151 billion cubic feet, compared to the expected drawdown of 142 billion cubic feet.)  Meanwhile, Oil dipped mainly on the back of a rebound by the dollar from its lows on Wednesday.  A Reuters report also said that Chinese oil imports were lower in January than in either December or November at 10.98 million barrel per day versus 11.37mbpd and 11.42mbpd respectively.  Elsewhere, US Gasoline inventories have gone up almost 13 million barrels since January 1 and even distillates (Diesel and Heating Oil) stocks rose last week, for the first time in five weeks.

In miscellaneous news, corporate stock buyback programs tripled in January (versus a year ago) to $132 billion.  It is worth noting that this is significant because 2022 saw a record $1.26 trillion in stock buybacks and analysts (such as GS and MS senior market analysts) had been expecting buybacks to fall 40% due to recession fear.  This tends to indicate that so far, corporations are not nearly as concerned about recession impacts as analysts expected (or are just in better financial shape than analysts knew).  On another hopeful note, in their report, CLX not only beat expectations but also raised guidance and said there would be no further layoffs in 2023. 

After the close, AMZN, GILD, HIG, X, CTSH, LPLA, MCHP, CLX, SKX, POST, MEOH, DECK, COLM, BYD, OTEX, SIGI, ENSG, TEAM, GEN, and CRUS all beat on the revenue and earnings lines.  Meanwhile, F and RGA beat on revenue while missing on earnings.  On the other side, QCOM, KMPR, HUBG, BZH, and CVCO all missed on revenue while beating on earnings.  Unfortunately, AAPL, GOOGL, GOOG, SBUX, SKYW, and MTX missed on both the top and bottom lines.  It is worth noting that MCHP, POST, and TEAM all raised their forward guidance.  However, CTSH, SKX, and COLM lowered their forward guidance.

Overnight, Asian markets leaned to the green side with the exception of China.  Hong Kong (-1.36%), Shanghai (-0.68%), and Shenzhen (-0.63%) were the only red in the region.  Meanwhile, India (+1.38%), Australia (+0.62%), and Singapore (+0.61%) led the region higher. In Europe, the picture is much redder in color at midday.  The FTSE (+0.25%) is among the minority of bourses in the green while the DAX (-0.55%) and CAC (-0.15%) are more typical in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.26% open, the SPY is implying a -0.72% open, and the QQQ implies a -1.29% open at this hour.  At the same time, 10-year bond yields are flat at 3.396% and Oil (WTI) is off just pennies to $75.69/barrel in early trading.

The major economic news events scheduled for Friday include Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, and Jan. Unemployment Rate (all at 8:30 am), Services PMI (9:45 am), and ISM Non-Mfg. PMI (10 am).  Major earnings reports scheduled for the day include AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH before the opening bell.  Then, after the close, there are no scheduled reports.  

So far this morning, SAN, BBU, REGN, AON, ZBH, CHD, NFG, and UI have all reported beats to both the revenue and earnings lines.  Meanwhile, CI, LYB, ASAZY, CBOE, and AVTR missed on revenue while beating on earnings.  On the other side, BEP beat on revenue while missing on earnings.  Unfortunately, SNY, ARCB, and SAIA missed on both the top and bottom lines.  No major changes to guidance have been announced yet this morning.

So, the big news overnight was the disappointing misses by the big dog tech names, AAPL and GOOGL and GOOG (which both complained of low interest from advertisers). F also missed on earnings, and probably more importantly, had a dismal report compared to arch-rival GM’s information from earlier in the week. Combined with this morning’s bad reports from trucking companies (ARCB and SAIA), the mix is likely to have Mr. Market in a worried mood (in terms of the economy) ahead of the January Payrolls report. Regardless of mood, we have to realize that it is going to be hard for the SPY or QQQ to go up when AAPL, GOOG, and GOOGL go down. Even with the beats by AMZN to help, that will be a tough lift given how much volume those three tickers trade each day. With that said, it is worth noting that all three have made significant recoveries from their pre-market lows. As a result, the major indices (SPY and QQQ) are hanging in too ahead of the data.

With that background, it looks like the recent leaders (QQQ and SPY) are going to gap down. However, neither is even close to retesting its up-trending T-line (8ema). DIA is retesting its T-line from above again. However, it has been chopping sideways in its wedge for some time now. So, this is nothing to be too worried about. SPY did complete its Golden Cross yesterday (50sma crossing up the 200sma). However, QQQ also ran into a resistance level. So, technically, markets still have a bullish bias. However, remember that it’s Friday… payday. So, pay yourself, lock in profits, and prepare your account for the weekend.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is 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.

🎯 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