Fed Day with More Than 95% Expecting A Cut

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Markets gapped lower on Tuesday.  SPY gapped down 0.42%, DIA gapped down 0.49%, and QQQ gapped down 0.33%.  From there, all three major index ETFs meandered around their opening level, but DIA was the weakest, never quite getting back to the open in the afternoon.  (It is worth noting this was DIA’s nineth-consecutive black, candle and down day…its worst streak since 1978.)  This action gave us Doji-like, indecisive candles in all three.  QQQ was the best-looking candle, printing a black, Spinning Top of Doji-like candle that was also a Bearish Harami (inside day).  At the same time, SPY gapped down below its T-line (8ema) and retested and failed that level on the way to printing a Doji.  Finally, DIA made a big gap-down, black-bodied Spinning Top candle that retested its 50sma and closed above.

On the day, eight of the 10 of the sectors were in the red as Communications Services (-1.13%) and Financial Services (-1.07%) leading the way lower.  On the other side, Healthcare (+0.16%) held up better than any of the other sectors.  Meanwhile, SPY lost 0.41%, DIA lost 0.65%, and QQQ lost 0.44%.  VXX climbed 2.48% to close at 44.29 and T2122 dropped back into the bottom of its oversold territory to close at 6.09.  On the bond side, 10-Year bond yields reversed after an overnight move higher to close down to 4.397% while Oil (WTI) dropped 0.74% to close at $70.19 per barrel.  So, on Tuesday, the market was all about the open. After that start, all three major index ETFs just meandered in waves back-and-forth across the opening level.  This all happened on not far below-average volume in SPY, DIA, and QQQ.

The major economic news scheduled for Tuesday included Nov. Month-on-Month Core Retail Sales, which came in flat at +0.2% (compared to a +0.4% forecast but in-line with October’s +0.2% reading). On the headline side, Nov. Month-on-Month Retail Sales were up +0.7% (higher than the +0.6% forecast and October’s +0.5% number).  Later, the Nov. Month-on-Month Industrial Production was up but still down at -0.1% (versus the +0.3% forecast but better than October’s -0.4% value).  On an annualized basis, Nov. Year-on-Year Industrial Production were down at -0.90% (compared to a forecasted +0.10% and worse than October’s -0.45% reading).  Later, Oct. Business Inventories were up +0.1% (versus the forecasted +0.2% and September’s flat 0.0%).  At the same time, Oct. Retail Inventories were steady at +0.1% (compared to the forecast and prior month value of +0.1%).  Then, after the close, the API Weekly Crude Oil Stocks report showed an unexpectedly large 4.700-million-barrel drawdown (versus a forecasted 1.850-million-barrel drawdown and the previous week’s 0.499-million-barrel inventory build).

In Fed news, the Fed quiet period ends Wednesday with the rate decision, statement, and Fed Chair Press Conference.  So, no Fed news Tuesday.

After the close, HEI reported a miss on revenue while beating on earnings.

Overnight, Asian markets were mixed, but leaned toward the green side with seven of the 12 exchanges above break-even while another was unchanged.  South Korea (+1.12%) was by far the biggest mover and gainer.  On the other side, Japan (-0.72%) paced the losses.  In Europe, the market outlook is brighter with 12 of the 14 bourses in the green at midday.  The CAC (+0.27%), DAX (+0.29%), and FTSE (+0.15%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are now pointing to a moderate gap up to start the morning.  The DIA implies a +0.30% open, the SPY is implying a +0.31% open, and the QQQ implies a +0.29% open at this hour.  At the same time, 10-Year Bond yields are back up to 4.413% and Oil (WTI) is up 0.86% to $70.68 per barrel in early trading. 

The major economic news scheduled for Wednesday include Preliminary Nov. Building Permits, Q3 Current Account, and Nov. Housing Starts (all at 8:30 a.m.), EIA Weekly Crude Inventories (10:30 a.m.), Fed Interest Rate Decision, FOMC Statement, Q4 Current Year Interest Rate Projection, Q4 1st Year Interest Rate Projection, Q4 2nd Year Interest Rate Projection, Q4 3rd Year Interest Rate Projection, Q4 Longer-Term Interest Rate Projection (all at 2 p.m.), and the FOMC Chair Press Conference (2:30 p.m.).  However, the major earnings reports scheduled for before the open include ABM, BIRK, GIS, JBL, and TTC.   Then, after the market, LEN, MU, MLKN, SCS, and WS report.

In economic news later this week, on Thursday we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q3 Core PCE Price Index, Q3 GDP, Q3 GDP Price Index, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, Nov. Existing Home Sales, Nov. US Leading Economic Indicator Index, Oct. TIC Net Long-Term Transactions, and the Fed’s Balance Sheet.  Finally, on Friday, November Core PCE Price Index, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Thursday, we hear from ACN, KMX, CTAS, CAG, DRI, FDS, LW, PAYX, BB, FDX, AVO, NKE, and SCHL.  Finally, on Friday, CCL and WGO report.

So far this morning, AMTM beat on both the top and bottom lines.

With that background, the market seems bullish so far in the premarket early session as more than 95% of Fed Fund Futures trades are expecting a quarter-point cut this afternoon.  All three major index ETFs gapped up to open the premarket and have followed through with white-bodied candles to this point.  SPY has crossed back above its T-line (8ema) and QQQ is headed back toward its all-time high.  With two of the three above their T-line and one below its 8ema, the short-term trend has to be seen as weakly bullish.  However, further out, obviously the mid-term and longer-term trends also remain bullish with index ETFs sitting near those all-time highs.  In terms of extension, yesterday’s pullback helped the T-line make up some ground on the QQQ and this morning’s premarket move higher is helping DIA relieve some of its stretch to the downside.  So, none of them are overly extended from the 8ema.  Meanwhile, the T2122 indicator is deep in its oversold territory.  So, the Bulls have more room to run today. In terms of the 10 Big Dogs, seven of the 10 are in green numbers at this point of the morning. NVDA (+2.76%) is far and away the leader of the group.  On the other end, TSLA (-1.94%) is the biggest loser by 1.80%.  Once again, TSLA is the leader in terms of dollar-volume traded by about 1.75 times over NVDA (with the next closest 15 times less in dollar-volume than NVDA). 

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription 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

DIA Losing Streak

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DIA Losing Streak

Stock futures declined following the longest DIA losing streak since 2018. Traders are eagerly awaiting the Federal Reserve’s next rate decision, which will be announced at the end of the central bank’s final two-day policy meeting of 2024, starting Tuesday. According to CME Group’s Fed Watch tool, there is a 95% probability of a quarter-point rate cut on Wednesday. Wall Street is particularly focused on insights into future policy moves that will be discussed during the meeting and in Chair Jerome Powell’s press conference afterward.

Early Tuesday, European markets were mostly in negative territory as investors focused on upcoming central bank meetings. The Bank of England is set to meet on Thursday, with markets currently anticipating only a slim chance of a final rate cut for the year. Despite the overall negative trend, Germany’s DAX index was up by 0.2%, following Chancellor Olaf Scholz’s loss in a confidence vote in the German parliament on Monday, which has triggered a snap election scheduled for February 23. Key data releases in Europe on Tuesday include U.K. unemployment figures and Germany’s Ifo business climate and economic sentiment index.

Asia-Pacific markets showed mixed performance, reflecting the varied gains seen on Wall Street. In a significant move, Chinese leaders announced plans to increase the country’s budget deficit to 4% of GDP in 2025, aiming to sustain economic growth at around 5% next year, according to a Reuters report. The CSI 300 in China fell by 0.26%, and Hong Kong’s Hang Seng Index decreased by 0.16%. Conversely, Australia’s S&P/ASX 200 rose by 0.78%. Japan’s Nikkei 225 and Topix both declined by 0.24%, while South Korea’s Kospi and Kosdaq dropped by 1.29% and 0.58%, respectively.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include HEI, & WOR. After the bell reports include CALM, & NEOG

News & Technicals’

Respondents to the CNBC Fed Survey for December are confident that the Federal Reserve will cut rates on Wednesday, with 93% predicting a quarter-point reduction. However, only 63% believe this is the appropriate action for the Fed to take. The survey, which included 27 respondents such as economists, strategists, and fund managers, also highlighted concerns about the impact of President-elect Donald Trump’s tariffs and threatened deportations on the economic outlook. These factors have tempered optimism among some forecasters. Economist Robert Fry expressed his uncertainty, stating, “I can’t remember being this uncertain about the inflation outlook.”

U.S. Treasury yields edged slightly higher as investors awaited key economic data ahead of the Federal Reserve’s upcoming interest rate decision. By 5:51 a.m. ET, the yield on the 10-year Treasury had risen by over 2 basis points to 4.418%, while the 2-year Treasury yield increased by more than 2 basis points to 4.272%. The U.S. retail sales figures for November, set to be released on Tuesday, are expected to provide new insights into consumer behavior and spending. This will be followed by the latest building permit and housing starts on Wednesday, just before the Fed announces its interest rate decision later that day.

An index of Asian currencies dropped to its lowest level in over two years due to growing pessimism about China’s economic outlook and expectations that Trump’s second administration will strengthen the U.S. dollar. The yen, which had weakened beyond the 154 level against the dollar overnight, ended a six-day losing streak. The yen’s sharp decline over the past week has led strategists to caution that further weakening could prompt verbal intervention from authorities and increase pressure on the Bank of Japan to raise interest rates. However, traders are currently pricing in less than a 20% chance of a rate hike in December, according to swaps market data.

Volkswagen, Mercedes-Benz Group, and BMW have recently issued profit warnings, attributing their concerns to economic weakness and sluggish demand in China, the world’s largest car market. This challenging situation is further exacerbated by the potential imposition of U.S. tariffs on European autos, which could significantly impact Germany’s economy. Germany, being Europe’s largest exporter of passenger cars to the U.S., exported 23 billion euros ($24.2 billion) worth of cars last year, representing 15% of its total exports to the U.S., according to Eurostat and ING Research. The introduction of tariffs would therefore worsen the already difficult circumstances for Germany’s top original equipment manufacturers (OEMs).

The DIA losing streak looks to continue today despite the T2122 indicator signaling a short-term oversold condition.  Market breath continues to be extremely concerning as the tech giants soar to record highs seemingly sucking all the energy out DOW and Russell indexes.  If a pullback begins be prepared for a possible quick substantial decline.

Trade Wisely,

Doug

The Wait on The Expected Cut Begins

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DIA diverged from the broader index ETFs Monday.  SPY gapped up 0.25%, DIA opened 0.08% higher, and QQQ gapped up 0.47%. At that point, SPY and QQQ both followed through with a long, slow, but steady rally.  This went on until 3:30 p.m. when both SPY and QQQ sold off the last half hour.  For its part, after opening flat, DIA just chopped sideways for 90 minutes and then sold off for an hour before grinding to the side until 3:30 p.m.  During that last 30 minutes, it too sold off sharply. This action gave us three divergent candles in the major index ETFs.  The QQQ was clearly the bullish leader, gapping higher and then printing a large white-body candle with a small upper wick.  Some would even call it a Trader’s Best Friend signal.  Meanwhile, SPY gave us a gap-up, white-bodied, Spinning Top that retested, and passed the test of, its T-line (8ema).  Finally, DIA printed a black-body candle with a significant upper wick.

On the day, six of the 10 of the sectors were in the red again as Energy (-2.10%) and Communications Services (-1.78%) were far and away the worst-performing sectors. On the other side, Technology (+1.11%) was way, way out front of the other gaining sectors (by 0.90%).  Meanwhile, SPY gained 0.42%, DIA lost 0.23%, and QQQ gained 1.44%.  (In the process, QQQ printed yet another new all-time high and new all-time high close.)  VXX was up 1.69% to close at 43.22 and T2122 climbed, but remained in the top half of its oversold territory to close at 13.11.  On the bond side, 10-Year bond yields climbed yet again to 4.405% while Oil (WTI) dropped 1.00% to close at $70.58 per barrel.  So, Monday gave us gaps higher with follow-through from the SPY and especially the QQQ.  Meanwhile, DIA continued its selloff, printing an eighth-straight black-bodied candle and lower close.  This all happened on below-average volume in all three major index ETFs.

The major economic news scheduled for Monday included the NY Empire State Mfg. Index, which came in sharply lower at +0.20 (compared to a forecast of 6.40 and far below November’s 31.20 reading).  Later, Preliminary December S&P Global Mfg. PMI was down slightly to 48.3 (versus a 49.4 forecast and a November value of 49.7).  At the same time, Preliminary December S&P Services PMI was up at 58.5 (compared to a 55.7 forecast and November’s 56.1 number).  Together, these gave us a Preliminary December S&P Global Composite PMI, which was higher at 56.6 (versus a 55.1 forecast and a November’s 54.9 reading).

In Fed news, we are in the Fed quiet period as the FOMC meeting begins Tuesday. 

Overnight, Asian markets leaned heavily toward the red side with just one of the 12 exchanges in positive territory.  Thailand (-1.70%), India (-1.35%), and South Korea (-1.29%) led the region lower.  In Europe, the story is shaping up to be very similar.  Only three of the 14 bourses are in the green (barely) at midday.  The CAC (+0.15%), DAX (+0.01%), and FTSE (-0.80%) are leading the region lower in early afternoon trade.  In the US, as of 7:15 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.35% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.18% open at this hour.  At the same time, 10-Year Bond yields are running higher to 4.436% and Oil (WTI) is down one percent to $70.00 per barrel in early trading.

The major economic news scheduled for Tuesday includes Nov. Core Retail Sales and Nov. Retail Sales (both at 8:30 a.m.), Nov. Industrial Production (9:15 a.m.), Oct. Business Inventories and Oct. Retail Inventories (both at 10 a.m.), and the API Weekly Crude Oil Stocks report (4:30 p.m.).  However, the major earnings reports scheduled for before the open are limited to AMTM. Then, after the market, HEI and WOR report.

In economic news later this week, on Wednesday, Preliminary No. Building Permits, Q3 Current Account, Nov. Housing Starts, EIA Weekly Crude Inventories, Fed Interest Rate Decision, FOMC Statement, Q4 Current Year Interest Rate Projection, Q4 1st Year Interest Rate Projection, Q4 2nd Year Interest Rate Projection, Q4 3rd Year Interest Rate Projection, Q4 Longer-Term Interest Rate Projection, and FOMC Chair Press Conference are reported.  On Thursday we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q3 Core PCE Price Index, Q3 GDP, Q3 GDP Price Index, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, Nov. Existing Home Sales, Nov. US Leading Economic Indicator Index, Oct. TIC Net Long-Term Transactions, and the Fed’s Balance Sheet.  Finally, on Friday, November Core PCE Price Index, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Wednesday, ABM, BIRK, GIS, JBL, TTC, LEN, MU, MLKN, SCS, and WS report.  On Thursday, we hear from ACN, KMX, CTAS, CAG, DRI, FDS, LW, PAYX, BB, FDX, AVO, NKE, and SCHL.  Finally, on Friday, CCL and WGO report.

So far this morning, AMTM beat on both the top and bottom lines.

With that background, the market seems bearish so far in the early session.  All three major index ETFs gapped down to open the premarket, although DIA clearly was most bearish while the others gave up ground grudgingly.  Since that start, all three have printed Doji-type, indecisive candles in the early session.  SPY is retesting its T-line (8ema) from above. Once again, at the moment, SPY and QQQ are above their T-line while DIA remains below its own T-line.  It is worth remembering that SPY and QQQ still sit at or near all-time highs, but DIA has given back 2%-3% since its highs.  With one of the three above its T-line, one right at that 8ema, and one below its T-line again, the short-term trend has to be seen as undecided.  However, further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, as of last night, QQQ was getting stretched above and as of this morning DIA is getting a little stretched below its T-line.  Meanwhile, the T2122 indicator remains well into its oversold territory.  So, both sides of the market have room to move and its hard to say whether the cliff-diving DIA or the spiking QQQ is more of an indicator.  In terms of the 10 Big Dogs, nine of the 10 are in red numbers at this point of the morning. NVDA (-1.80%) and AMD (-1.67%) lead the pack lower, while TSLA (+2.60%) sits 2.70% better off than any of the others.  Once again, TSLA is the leader in terms of dollar-volume traded by about 2.25 times over NVDA (with the next closest 12 times less in dollar-volume than NVDA). 

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription 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

Breaking a Seven-day Losing Streak?

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On Monday, stock futures saw a slight rise to potentially breaking a seven-day losing streak, for the Dow Jones Industrial Average. Following a broad rally after President-elect Donald Trump’s November victory, the market has recently shifted to a narrower, tech-led movement. Joe Mazzola, head of trading and derivatives at Charles Schwab, noted that the market’s breadth is diminishing, with the rally becoming more concentrated in a few names. He expressed uncertainty about the sustainability of this trend but suggested it might continue through the end of the year. Investors are also looking ahead to the Federal Open Market Committee’s meeting on Tuesday and Wednesday, where officials are expected to lower the benchmark interest rate again.

European markets saw a decline as traders prepared for the final week of central bank actions for the year and the listing of three French media companies in Europe. France’s CAC 40 index fell by 0.58%, influenced by Moody’s unexpected decision to downgrade the country’s credit rating from Aa2 to Aa3, citing concerns over weakened public finances due to ongoing political instability. Investors were also focused on Berlin, where a vote of confidence in Chancellor Olaf Scholz was scheduled, potentially paving the way for snap elections in February.

Asia-Pacific markets experienced a downturn, reversing earlier gains as investors anticipated key decisions from major central banks, including the Bank of Japan and the People’s Bank of China. Despite a 3% year-over-year increase in China’s retail sales, the figure fell short of the 5% growth forecasted by economists. This underperformance contributed to declines across various indices: mainland China’s CSI 300 dropped by 0.54%, Hong Kong’s Hang Seng index fell by 1%, South Korea’s Kospi decreased by 0.22%, Japan’s Nikkei 225 saw a marginal decline, the Topix index experienced a larger loss of 0.3%, and Australia’s S&P/ASX 200 fell by 0.56%.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell no notable reports. After the bell reports include CMP, & MITK.

News & Technicals’

Monday, U.S. Treasury yields remained relatively stable as investors anticipated the Federal Reserve’s final meeting of the year. The 10-year Treasury yield decreased slightly by over 1 basis point to 4.381%, after surpassing 4.4% on Friday. Similarly, the 2-year Treasury yield dipped by less than 1 basis point to 4.234%. Investors were largely expecting a 25-basis-point interest rate cut from the FOMC on Wednesday, with a 97% probability according to the CME FedWatch tool. Market participants are keenly awaiting the Fed’s updated policy statement and Fed Chair Jerome Powell’s press conference for insights into future interest rate decisions. During this blackout period, Fed officials are restricted from making public comments ahead of the meeting.

Softbank CEO Masayoshi Son is set to announce a $100 billion investment in the U.S. over the next four years during a visit to President-elect Donald Trump’s Mar-a-Lago residence in Palm Beach, Florida. This substantial investment could be sourced from various Softbank-controlled entities, including the Vision Fund, capital projects, and Arm Holdings, where Softbank holds a majority stake. Not all of the funds will be newly raised; some will include previously announced investments, such as Softbank’s recent $1.5 billion investment in OpenAI, the company behind ChatGPT. This move underscores Softbank’s commitment to expanding its footprint in the U.S. tech sector.

The Bank of Japan (BOJ) is expected to maintain its benchmark interest rate at 0.25% during its upcoming two-day meeting this week, as it seeks more clarity on domestic wage and spending trends. According to a survey conducted between December 9-13, a slim majority of 13 out of 24 economists (54%) predict that the BOJ will keep rates unchanged, while the same number anticipate a rate hike in January. The BOJ, which last raised rates in July, has indicated its willingness to tighten monetary policy further if wage growth and prices meet its projections. BOJ Governor Kazuo Ueda recently suggested that another rate hike is approaching, contingent on economic data aligning with expectations, but he also highlighted potential risks, such as wage trends next year and changes in U.S. economic policy.

Russia’s central bank is anticipated to implement a significant rate hike later this week as inflation continues to escalate in its war-impacted economy. Despite multiple rate increases aimed at curbing inflation, the consumer price index rose to 8.9% in November, up from 8.5% in October, primarily due to rising food prices. The inflationary pressure has been exacerbated by a weaker ruble, following new U.S. sanctions in November, which has increased the cost of imports. As a result, economists expect the Central Bank of Russia (CBR) to raise interest rates by 200 basis points at its meeting on December 20, bringing the key interest rate to 23%. This move reflects the ongoing economic challenges Russia faces since its invasion of Ukraine in 2022.

Although the Dow is breaking a seven-day losing streak the tech sector stocks continue to reign supreme.  However, there is concern about how much longer that can continue unless market breath picks up.  This week investors will be focused on the FOMC decision on Wednesday, GDP on Thursday and the Core PCE numbers coming on Friday. Also keep in mind that the current CR will run out on Friday at midnight and the government could shut down unless Congress acts.

Trade Wisely,

Doug

NY Empire State Mfg. and S&P Global PMIs

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On Friday, we saw a bit of a Bull trap.  SPY gapped up 0.29%, DIA opened 0.13% higher, and QQQ gapped up 0.74%.  At that point, all three major index ETFs took 20 minutes to get ready before selling off.  SPY sold off recrossing the gap and continuing South self to the lows at 11:15 a.m., and then drifted sideways with a very slight bullish trend, ending up very near the previous close.  DIA recrossed its gap more quickly but did not sell off as far, reaching its lows at 12:25 p.m. and spending most of the day meandering along the lows, never getting that afternoon modest rally.  Meanwhile, QQQ sold off most sharply but stopped at about 11:10 a.m. before starting a long slow rally back up above the open.  This action gave us a black-bodied, large-body Spinning Top candle in the SPY that crossed just back below its T-line (8ema) after having gapped above it.  DIA printed the same black-body, large-body, Spinning Top candle but with a smaller gap up.  It also printed a seventh-consecutive black and down-close candle.  Finally, QQQ gave us a long-legged, technically black-body, Doji that printed a new all-time high and new all-time high close.

On the day, nine of the 10 of the sectors were in the red again as Basic Materials (-1.41%) was far and away the worst-performing sector. On the other side, Technology (+0.15%) held up better than the other sectors and was the only one in the green. Meanwhile, SPY lost 0.01%, DIA lost 0.20%, and QQQ gained 0.77%. VXX was just on the green side of flat to close at 42.50 and T2122 dropped deeper into the oversold territory to close at 7.06.  On the bond side, 10-Year bond yields climbed yet again to 4.395% while Oil (WTI) climbed 1.51% to close at $71.08 per barrel.  So, once again Friday we saw most of the move happen at the open.  After that there was some reversal, but the afternoon was essentially some form of a sideways grind. This all took place on below-average volume in all three major index ETFs.

The major economic news scheduled for Friday were limited to November Export Price Index, which came in flat at 0.0% (compared to a -0.2% but far better than October’s +1.0% reading).  On the other side, the November Import Price Index was unchanged at +0.1% (versus a forecasted -0.2% but in-line with October’s +0.1% value).

In Fed news, we have started the quiet period ahead of this week’s FOMC meeting. 

Overnight, Asian markets were mixed, but leaned toward the red side.  Shenzhen (-1.30%), Hong Kong (-0.88%), and Thailand (-0.83%) paced the nine losers while New Zealand (+0.34%) and Singapore (+0.28%) led the three gainers.  In Europe, 13 of the 14 bourses are in the red at midday.  The CAC (-0.68%), DAX (-0.27%), and FTSE (-0.29%) are leading the region lower in early afternoon trade.  In the US, as of 6 a.m., Futures are pointing toward a modest green start to the day.  The DIA implies a +0.08% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.29% open at this hour.  At the same time, 10-Year Bond yields are down slightly to 4.381% and Oil (WTI) is off 1.08% to $70.52 per barrel in very early trading.

The major economic news scheduled for Monday includes NY Empire State Mfg. Index (8:30 a.m.), Preliminary December S&P Global Mfg. PMI, Preliminary December S&P Services PMI, and Preliminary December S&P Global Composite PMI (all at 9:45 a.m.).  However, there are no major earnings reports scheduled either before or after the market.

In economic news later this week, on Tuesday we get Nov. Core Retail Sales, Nov. Retail Sales, Nov. Industrial Production, Oct. Business Inventories, Oct. Retail Inventories, and the API Weekly Crude Oil Stocks report.  Then Wednesday, Preliminary No. Building Permits, Q3 Current Account, Nov. Housing Starts, EIA Weekly Crude Inventories, Fed Interest Rate Decision, FOMC Statement, Q4 Current Year Interest Rate Projection, Q4 1st Year Interest Rate Projection, Q4 2nd Year Interest Rate Projection, Q4 3rd Year Interest Rate Projection, Q4 Longer-Term Interest Rate Projection, and FOMC Chair Press Conference are reported.  On Thursday we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q3 Core PCE Price Index, Q3 GDP, Q3 GDP Price Index, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, Nov. Existing Home Sales, Nov. US Leading Economic Indicator Index, Oct. TIC Net Long-Term Transactions, and the Fed’s Balance Sheet.  Finally, on Friday, November Core PCE Price Index, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Tuesday we hear from AMTM, HEI, and WOR. Then Wednesday, ABM, BIRK, GIS, JBL, TTC, LEN, MU, MLKN, SCS, and WS report.  On Thursday, we hear from ACN, KMX, CTAS, CAG, DRI, FDS, LW, PAYX, BB, FDX, AVO, NKE, and SCHL.  Finally, on Friday, CCL and WGO report.

With that background, the market seems bullish although divergently so.  All three major index ETFs opened the premarket with a modest gap higher. However, they have diverged in action since that point.  SPY has printed a small, white-bodied candle with no wick or Marubozu. At the same time, DIA has printed an uncertain Doji candle inside Thursday’s candle.  Finally, QQQ has given us a larger Marubozu candle and now sits at all-time highs in the early session.  Once again, SPY and QQQ are above their T-line (8ema) while DIA remains below its own T-line.  It is worth remembering that SPY and QQQ still sit at or near all-time highs, but DIA has given back 2%-3% since its highs.  With one of the three above its T-line, one right at that 8ema, and one below its T-line, the short-term trend has to be seen as undecided.  However, looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, none of the three major index ETFs are too stretched from their T-lines.  Meanwhile, the T2122 indicator is back deep into its oversold territory.  So, while both sides of the market have room to move if they can find momentum, the Bulls have more rope to work with today.  In terms of the 10 Big Dogs, early, seven of the 10 are in green numbers at this point of the morning. GOOGL (+0.77%) and AMD (+0.57%) pace the winners while NVDA (-0.49%) and NFLX (-0.44%) are the laggards. Once again, TSLA (+0.43%) is leading the dollar-volume traded by about 2.5 times over NVDA with the next closest 8 times less dollar-volume than NVDA. 

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription 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

Premarket Up on Slow News, No Earnings Day

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Markets were mostly in a sideways meander on Thursday.  SPY opened down 0.14%, DIA opened dead flat, and QQQ gapped down 0.41%. From there all three major index ETFs ground sideways until 12:20 p.m.  At that point, SPY and QQQ continued in their sideways wobble until 1:30 p.m.  Then they started a slow, steady selloff.  However, at 12:20 p.m. DIA led by beginning its slow steady selloff 70 minutes early.  This action gave us black-bodied candles in all three major index ETFs.  SPY tested and crossed down, barely, its T-line (8ema).  DIA printed its sixth-straight black candle with a lower close. Finally, QQQ printed the smallest-bodied candle that was also a Bearish Harami but remains comfortably above its T-line.  This happened on below-average volume in all three.

On the day, nine of the 10 of the sectors were in the red as Basic Materials (-1.40%) and Healthcare (-1.30%) were out front leading the way lower. On the other side, Consumer Defensive (+0.07%) held up better than the other sectors and was the only one in the green.  Meanwhile, SPY lost 0.52%, DIA lost 0.51%, and QQQ lost 0.65%.  VXX gained 0.81% to close at 42.47 and T2122 dropped back down into its oversold territory to close at 13.95. On the bond side, 10-Year bond yields jumped up to 4.336% while Oil (WTI) fell a third of a percent to close at $70.05 per barrel.  So, Thursday was punctuated by a gap lower in DPY and QQQ and then a modest, but steady, afternoon selloff in all three major index ETFs.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 242k (compared to a forecast of 221k and the prior week’s 225k reading).  On the ongoing side, Weekly Continuing Jobless Claims were also slightly higher than anticipated at 1,836k (versus the 1,880k forecast and up from the previous week’s 1,871k).  At the same time, Month-on-Month Nov. Core PPI was down as predicted to +0.2% (compared to a 0.2% forecast and down a tick from October’s +0.3% value).  On the headline number, Month-on-Month Nov. PPI was unexpectedly up to +0.4% (versus a +0.2% forecast and the +0.3% October reading). Later, after the close, the Fed Balance Sheet showed a very modest increase of $1 billion on the week, climbing to $6.897 trillion.

In Fed news, we have started the Fed quiet period ahead of next week’s meeting. 

After the close, AVGO and COST reported misses on revenue while beating on earnings.  On the other side, RH beat on revenue while missing on earnings.

Overnight, Asian markets were mixed with five exchanges in green and seven, including the biggest movers, in red.  Shenzhen (-2.23%) Hong Kong (-2.09%), and Shanghai (-2.01%) led the region lower.  In Europe, we see the opposite picture with four of the 14 bourses in red while 10 sit in the green at midday.  The CAC (+0.25%), DAX (+0.24%), and FTSE (+0.11%) lead the region modestly higher in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a green start.  The DIA implies a +0.12% open, the SPY is implying a +0.35% open, and the QQQ implies a +0.79% open at this hour.  At the same time, 10-Year Bond yields are up to 4.351% and Oil (WTI) is up 0.71% to $70.53 per barrel in early trading.

The major economic news scheduled for Friday are limited to November Export Price Index and November Import Price Index (both at 8:30 a.m.).  There are no major earnings reports scheduled either before or after the market.

With that background, the market seems bullish although divergently so.  All three major index ETFs opened the premarket with a modest gap higher. However, they have diverged in action since that point.  SPY has printed a small, white-bodied candle with no wick or Marubozu. At the same time, DIA has printed an uncertain Doji candle inside Thursday’s candle.  Finally, QQQ has given us a larger Marubozu candle and now sits at all-time highs in the early session.  Once again, SPY and QQQ are above their T-line (8ema) while DIA remains below its own T-line.  It is worth remembering that all three sit at or near all-time highs. However, with only two of the three sitting above their T-line the short-term trend has to be seen as modestly bullish.  Looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, none of the three major index ETFs are too stretched from their T-lines.  Meanwhile, the T2122 indicator is back in its oversold territory.  So, while both sides of the market have room to move today if they can find momentum, the Bulls have a bite more rope to work with.  In terms of the 10 Big Dogs, six of the 10 are in red numbers at this point of the morning. NVDA (+1.38%) and AMD (+1.23%) pace the winners while META (-0.58%) is the laggard. Once again, TSLA (+1.08%) is leading the dollar-volume traded by about 1.5 times over NVDA with the next closest 3.5 times behind NVDA.  Lastly, remember its Friday and time to get your account ready 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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription 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

Jobless Claims and PPI on Tap This Morning

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Wednesday saw the Bulls in charge after CPI numbers they liked.  SPY gapped 0.44% higher, DIA opened just 0.09% higher, and QQQ gapped up 0.84%.  From there, SPY and QQQ began a modest rally that lasted until noon before trading sideways in a tight range the rest of the day. For its part, after the flat open, DIA meandered back and forth across that tiny gap, but ended the day one a very modest two-hour selloff.  This action gave us a gap-up Bull Kicker type candle with an upper wick.  SPY crossed back above its T-line (8ema) and closed within pennies of another all-time high close.  Meanwhile, QQQ did give us a Bull Kicker candle with tiny upper wick and printed a new all-time high and new all-time high close.  Finally, DIA, ever the contrarian, gave us a black-bodied candle with upper wick and printed a 5th consecutive black and down candle.  This all happened on below-average volume in all three major index ETFs.

On the day, seven of the 10 of the sectors were in the green as Technology (+1.62%) was way out front leading the market higher. On the other side, Healthcare (-0.67%) was the laggard.  Meanwhile, SPY gained 0.77%, DIA lost 0.27%, and QQQ gained 1.79%.  VXX fell almost another eight-tenths of a percent to close at 42.13 and T2122 climbed out of oversold territory and back into the mid-range to close at 38.62.  On the bond side, 10-Year bond yields climbed to 4.269 while Oil (WTI) popped 2.51% closing at $70.30 per barrel.  So, Wednesday was mostly about the opening gap as traders at least weren’t disappointed by the CPI print.  After that gap up and the modest morning rally, markets just drifted the rest of the day as tech stocks ran higher. TSLA (+5.93%), GOOGL (+5.52%), and NVDA (+3.14) led that charge.

The major economic news scheduled for Wednesday include Month-on-Month Nov. Core CPI which came in flat as expected at +0.3% (compared to a forecast and Oct. reading of +0.3%).  On an annualized basis, Year-on-Year November Core CPI was also flat as expected at +3.3% (versus the forecast an October value of +3.3%).  On the headline number, Month-on-Month Nov. CPI was up a tick to +0.3% (compared to a forecast of +0.3% and October reading of +0.2%).  On the annualized basis, Year-on-Year Nov. CPI was also up a tick to 2.7% (versus a +2.7% forecast and an October value of +2.6%).  Later, EIA Weekly Crude Oil Inventories showed a larger than expected drawdown of 1.435 million barrels (compared to a forecasted 1.000-million-barrel drawdown but much less than the prior week’s 5.073-million-barrel draw).  Later, the November Federal Budget Balance came in with a larger-than-predicted deficit of $367.0 billion (versus a -$ 349.0 billion forecast and dramatically higher than October’s -$257.0 billion).

In Fed news, we have started the Fed quiet period ahead of next week’s meeting. 

After the close, ADBE and NDSN reported beats on both the revenue and earnings lines.

Overnight, Asian markets were mixed but leaned toward the green with eight of the 12 exchanges above break-even.  South Korea (+1.62%), Japan (+1.21%), and Hong Kong (+1.20%) paced the gains.  Meanwhile, India (-0.38%) led the losses.  In Europe, we see a similar picture with nine of the 14 bourses in the green.  The CAC (-0.01%), DAX (+0.03%), and FTSE (+0.13%) lead the region modestly higher in early afternoon trade.  In the US, as of 7:54 a.m., Futures are pointing toward a modestly down start to the day.  The DIA implies a -0.11% open, the SPY is implying a -0.195 open, and the QQQ implies a -0.39% open at this hour.  At the same time, 10-Year Bond yields are spiking to 4.302% and Oil (WTI) is up a quarter percent to $70.45 per barrel in early trading.

The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Nov. Core PPI and Nov. PPI (all at 8:30 p.m.), and the Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to CIEN.  Then, after the close, AVGO, COST, and RH report. 

In economic news later this week, on Friday, Nov. Export Price Index and Nov. Import Price Index are reported.

In terms of earnings reports later this week, there are no reports scheduled for Friday.

So far this morning, CIEN beat on revenue while missing on earnings.

With that background, it seems stocks are modestly lower in a divergent way ahead of the morning data.  All three major index ETFs have gapped a bit lower to start the premarket.  However, SPY had been flat since, QQQ is giving us a black-bodied candle with no wicks, and DIA is printing a white-bodied candle with no wicks climbing back toward flat.  SPY and QQQ remains above their T-line (8ema) while DIA remains below its own T-line.  It bears repeating that SPY, DIA, and QQQ all still sit at or very near their all-time highs.  However, with two of the three sitting modestly above their T-line the short-term trend has to be seen as bullish now.  Looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, none of the three major index ETFs are too stretched from their T-lines.  Meanwhile, the T2122 indicator is back in the bottom half of its mid-range.  So, while both sides of the market have room to move today if they can find momentum.  In terms of the 10 Big Dogs, seven of the 10 are in red numbers at this point of the morning.  NVDA (-0.47%) and META (-0.41%) pace the losses while TSLA (+0.38%) is holding up better than the others.  TSLA is also the leader in dollar-volume traded sitting at a little more than 4 times as much money traded than NVDA.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription 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

Nasdaq Composite’s Milestone

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Nasdaq Composite's Milestone

U.S. stock futures declined on Thursday, following the Nasdaq Composite’s milestone of closing above the 20,000 mark for the first time. The S&P 500 saw a gain of 0.8%, while the Dow Jones Industrial Average lagged, dropping by approximately 99 points, or 0.2%. Hackett noted that current market expectations are high, with valuations at their peak since the tech bubble. Despite supportive seasonal and technical factors through year-end, investors are expected to be more selective next year, carefully weighing risks and rewards. On the economic front, the producer price index report for November anticipated to show a 0.2% monthly increase, and weekly jobless claims are set to be released on Thursday morning.

European markets experienced a slight dip on Thursday morning as investors awaited the European Central Bank’s (ECB) final monetary policy decision of the year. The Stoxx Europe 600 index edged down by less than 0.1%, while the euro saw a notable increase of 0.7% against the Swiss franc following an unexpected 50-basis-point rate cut by the Swiss National Bank. Analysts surveyed by Bloomberg anticipate that the ECB will reduce its policy rate by 25 basis points for the fourth time this year. Additionally, the ECB is expected to release its quarterly macroeconomic projections, providing insights into future growth and inflation trends.

Asia-Pacific markets mostly saw gains on Wednesday, buoyed by positive momentum from Wall Street. Investors in the region reacted to Australia’s latest jobs data, which revealed an 8-month low unemployment rate of 3.9% for November. Despite this, Australia’s S&P/ASX 200 dipped by 0.28%. In Japan, the Nikkei 225 and Topix indices rose by 1.21% and 0.86%, respectively. South Korea’s President Yoon Suk Yeol, addressing public pressure, stated he would not resign, coinciding with a 1.62% rise in the Kospi index and a 1.1% increase in the Kosdaq. Meanwhile, China’s CSI 300 climbed 0.99%, and Hong Kong’s Hang Seng index advanced by 1.28%.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include CEIN. After the bell reports include AVGO, COST, & RH.

News & Technicals’

President Joe Biden announced the commutation of sentences for nearly 1,500 offenders and the pardoning of 39 others, marking the largest number of clemencies granted in a single day, according to the White House. In a statement, Biden emphasized America’s foundation on the promise of possibility and second chances. The White House noted that Biden has issued more sentence commutations at this point in his presidency than any recent predecessors in their first terms. Biden hinted at further actions, stating that his administration would continue to review clemency petitions and take additional steps in the coming weeks.

Oil prices edged higher for the fourth consecutive day amid potential tighter restrictions on Russian and Iranian oil flows. Brent crude hovered around $74 per barrel, having climbed over 3% in the past three sessions. U.S. Treasury Secretary Janet Yellen suggested that low oil prices might enable further sanctions on Russia, while Donald Trump’s national security adviser nominee indicated a strategy of maximum pressure on Iran. Despite these developments, the International Energy Agency (IEA) warned of a potential oil supply glut next year, contrasting with the U.S. Energy Information Administration’s (EIA) forecast of balanced markets. This comes even as OPEC+ has decided to postpone increasing output.

China reaffirmed its recent policy adjustments and emphasized plans to stimulate growth during a high-level economic planning meeting that concluded on Thursday, as reported by state media. Using language reminiscent of the 2008 global financial crisis, Beijing highlighted an increased urgency to bolster its struggling economy and brace for a potential trade war with the U.S., with Donald Trump returning to the White House. Since late September, Chinese officials have intensified stimulus efforts, but recent economic data shows these measures have not been enough to counter ongoing deflationary pressures. This has raised investor expectations that Beijing will further enhance its stimulus initiatives to revive growth. Notably, the country’s consumer price inflation dropped to a five-month low in November.

Adobe’s stock dropped by 8% following the release of its revenue estimates for the fiscal first quarter, which fell short of expectations. The company projected revenues between $5.63 billion and $5.68 billion, below the consensus estimate of $5.73 billion as reported by LSEG. Despite this, Adobe’s adjusted earnings per share and revenue for the previous quarter exceeded analysts’ forecasts, highlighting a mixed financial outlook for the company.

The market chose to celebrate the rising inflation in the CPI with Nasdaq Composite’s Milestone of 20,000 as big tech surged higher.  Keep in mind that today we have more inflation data with the PPI report as well as jobless claims.  Plan your risk carefully.

Trade Wisely,

Doug

Market Seems to be Waiting on CPI

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Markets traded sideways again Tuesday for the most part.  SPY opened 0.12% higher, DIA opened down 0.12%, and QQQ gapped up 0.22%. From there, SPY and QQQ just meandered back and forth across their opening gaps until about 12:40 p.m. when they began a very modest, but steady, selloff that lasted all the way into the close.  DIA was a bit of a maverick on Tuesday, selling while the other two rallied and rallying while they sold.  However, it too began selling and continued to selloff the last hour of the day.  This action gave us black-bodied candles in all three major index ETFs.  Spy crossed back below its T-line (8ema) on a black candle with very small wicks.  QQQ was more of a fat-bodied, black Spinning Top that retested its T-line from above and passed that test.  Finally, DIA was the most undecided, printing a black Spinning Top with larger wicks.  This happened on well below-average volume in all three major index ETFs.

On the day, eight of the 10 of the sectors were in the red again as Technology (-0.90%) and Basic Materials (-084%) led the majority lower.  On the other side, Communication Services (+0.50%) held up better than the other sectors.  Meanwhile, SPY lost 0.30%, DIA lost 0.33%, and QQQ lost 0.35%. VXX fell one percent to close at 42.46 and T2122 fell into the very top of the oversold territory to close at 19.43.  On the bond side, 10-Year bond yields climbed to 4.23 while Oil (WTI) was flat, closing at $68.40 per barrel.  So, Tuesday was a sideways grind followed by a modest, but steady afternoon selloff.  This may have been traders being nervous ahead of CPI data (which itself is just a precursor to next Week’s Fed rate decision).  Interestingly, 86% of traders (according to Fed Fund Futures) expect a quarter-point rate cute next week and the talking heads have been “sure” that was going to be the case for weeks.

The major economic news scheduled for Tuesday included Q3 Nonfarm Productivity, which fell as expected to 2.2% (compared to a 2.2% forecast but well down from Q2’s 2.5% reading).  Surprisingly, Q3 Unit Labor Costs came in much better than expected at +0.8% (versus the +1.9% forecast but still well above Q2’s unexpectedly low +0.4% value).  At noon, the WASDE Ag report indicate tightening global supplies of corn and soybeans in December.  The USDA decreased estimated year-end stock level of corn significantly.  This may be an indicator of future food inflation.  Later, after the close, the API Weekly Crude Oil Stocks report showed a modest unexpected inventory build of 0.499 million barrels (compared to a forecasted 1.300-million-barrel drawdown but less than the prior week’s 1.232-million-barrel inventory build).

In Fed news, we have started the Fed quiet period ahead of next week’s meeting. 

After the close, GME missed on revenue while beating on earnings.

Overnight, Asian markets were split down the middle with six exchanges in the green and the other six red.  South Korea (+1.02%) paced the gained while Taiwan (-0.96%) had the biggest loss.  In Europe, the picture is greener with 10 of the 14 bourses in positive territory at midday.  The CAC (+0.19%), DAX (even), and FTSE (+0.19%) lead the region in early afternoon trade.  In the US, as of 7:40 a.m., Futures are pointing toward a mixed but modestly bullish start to the day.  The DIA implies a -0.02% open, the SPY is implying a +0.10% open, and the QQQ implies a +0.18% open at this hour.  At the same time, 10-Year Bond yields are up to 4.244% and Oil (WTI) is up 1.39% to $69.54 per barrel in early trading.

The major economic news scheduled for Wednesday include Nov. Core CPI and Nov. CPI (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), and the Nov. Federal Budget Balance (2 p.m.).  The major earnings reports scheduled for before the open are limited to M and REVG.  Then, after the close, ADBE, and NDSN report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Nove. Core PPI, Nov. PPI, and the Fed Budget Balance.  Finally, on Friday, Nov. Export Price Index and Nov. Import Price Index are reported.

In terms of earnings reports later this week, on Thursday, we hear from, CIEN, AVGO, COST, and RH.  There are no reports scheduled for Friday.

So far this morning, REVG reported beats on both the revenue and earnings lines.  Meanwhile, M beat on revenue while missing on earnings.

With that background, it seems stocks are undecided ahead of CPI data.  All three major index ETFs have printed tiny-body candles so far in the premarket.  The SPY is retesting its T-line from below and DIA is testing the support level that held it up Tuesday.  It bears repeating that SPY, DIA, and QQQ all still sit very near their all-time highs.  However, with two of the three sitting modestly below their T-line (8ema) the short-term trend has to be seen as bearish now.  Looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, none of the three major index ETFs are too stretched from their   T-lines.  Meanwhile, the T2122 indicator is back at the top of its oversold range.  So, while both sides of the market have room to move today if they can find momentum, the Bulls have more slack to play with.  In terms of the 10 Big Dogs, eight of the 10 are in green numbers at this point of the morning.  TSLA (+1.48%) is out front again leading the gainers while AAPL (-0.10%) is a modest laggard.  TSLA is also the leader in dollar-volume traded (albeit on a very light trading morning) sitting at a about 2 times as much traded than NVDA (+0.89%).

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 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 gains are 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

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TC2000 Discount

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

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🎯 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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New U.S. Inflation Data

by
New U.S. Inflation Data

Stock futures remained nearly flat on Wednesday with investors waiting the release of new U.S. inflation data. Traders are particularly focused on November’s consumer price index (CPI) reading, expected in the morning. According to economists polled by Dow Jones, the CPI, which measures a basket of goods and services, is anticipated to rise by 0.3% from October and 2.7% year-over-year. Excluding the more volatile food and energy prices, the core CPI is projected to increase by 0.3% month-over-month and 3.3% from the previous year. This data precedes the producer price index report, due on Thursday morning, and both reports are among the last significant economic indicators before the Federal Reserve’s policy meeting next week.

European markets experienced mixed results on Wednesday as traders processed disappointing corporate updates and anticipated the latest U.S. inflation data. Shares of Inditex, the Spanish clothing giant and owner of Zara, dropped by 6% following the release of its interim nine-month and quarterly results. German online retailer Zalando saw a significant decline, falling as much as 10% after announcing its agreement to acquire the fashion group About You. Meanwhile, the U.K. and the European Union are proactively strengthening their cooperation to prepare for potential trade and defense challenges with the incoming U.S. administration. A senior EU diplomat mentioned that the bloc could benefit from closer ties with the U.K. due to Britain’s historical “special relationship” with the United States.

Asia-Pacific markets showed mixed performance on Wednesday as investors reacted to various regional developments. China commenced its annual economic work conference, setting the stage for next year’s economic policies and growth targets. In response, Hong Kong’s Hang Seng index reversed earlier gains, closing 0.76% lower, while China’s CSI 300 index dipped by 0.17%. Conversely, South Korea’s blue-chip Kospi index surged by 1.02%, reflecting investor optimism. Japan’s markets saw modest gains, with the Nikkei 225 rising slightly and the Topix increasing by 0.29%. Meanwhile, Australia’s S&P/ASX 200 index fell by 0.47%, ending the day at 8,353.6.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include CGNT, PLAB, & REVG. After the bell reports include ADBE, NDSN, & OXM.

News & Technicals’

Federal Reserve Chair Jerome Powell is expected to complete his term leading the U.S. central bank, despite earlier suggestions that he might be pressured to resign. This assurance came from Scott Bessent, a prominent hedge fund manager and President-elect Donald Trump’s nominee for Treasury secretary. Bessent confirmed his support for Powell during a conversation with CNBC following a meeting with Senator Mike Crapo of Idaho, stating, “As the President said on Sunday, and I’m in complete agreement with him, that Jay Powell will serve out his term.”

U.S. Treasury yields remained relatively stable on Wednesday as investors awaited the release of November’s consumer price index (CPI) data. By 5:50 a.m. ET, the 10-year Treasury yield had edged up to 4.236%, increasing by more than 1 basis point, while the 2-year Treasury yield also rose by 1 basis point to 4.166%. According to a Dow Jones survey of economists, the CPI is expected to rise by 0.3% from October and 2.7% year-over-year. These inflation figures are among the final significant economic data points before the Federal Reserve’s monetary policy meeting next week, where the central bank will announce its next interest rate decision and provide guidance on future policy and economic outlook on December 18.

Alphabet’s shares saw an uptick on Tuesday following the unveiling of “Willow,” the company’s latest quantum computing chip. While the full potential of quantum computing, such as large-scale simulations and code breaking, may not be realized for years or even decades, the announcement generated significant excitement. Prominent technology leaders, including Tesla CEO Elon Musk and OpenAI CEO Sam Altman, praised the development on social media, highlighting the industry’s anticipation for future advancements in quantum technology.

Major insurance stocks have declined by over 6% since their closing prices last Tuesday, following the tragic shooting of Brian Thompson, CEO of UnitedHealth Group’s insurance division. This drop includes shares of UnitedHealth Group, CVS Health, and Cigna, which are among the largest private health insurers in the U.S. According to Jared Holz, Mizuho’s health-care equity strategist, this stock performance seems to be influenced by renewed negative rhetoric surrounding insurers and their business practices.

As we wait for the new U.S. Inlfation data anything is possible. Keep in mind that tomorrows PPI report could be also be market-moving so plan your risk carefully!

Trade Wisely,

Doug