Markets gapped down modestly on Wednesday (down 0.31% in SPY, down 0.50% in DIA, and down 0.16% in QQQ).  The large-cap indices then wandered sideways with a slightly bearish trend and the QQQ just flat meandered sideways until 2 pm. However, when the Fed announced, we saw volatility to the upside and then to the downside over the next 30 minutes. Yet, as soon as Fed Chair Powell began speaking, we got a strong bullish rally for 75 minutes.  Finally, we saw profit-taking in the last 15 minutes of the day.  This action gave us white-bodied candles with wicks on both ends.  Only the DIA would be seen as a candle signal as it printed an indecisive Spinning Top candle.  IT is worth noting that SPY closed right up against a resistance level.

On the day, nine of the 10 sectors were in the green as Technology (+2.72%) lead the way higher and Energy (-1.52%) lagged behind the other sectors.  At the same time, the SPY was up 1.06%, the DIA was up 0.01%, and QQQ was up 2.14%.  Meanwhile, the VXX was down 3% to 10.98 and T2122 is even higher, deep in the overbought territory to 98.74.  10-year bond yields plunged down to 3.417% and Oil (WTI) was off 2.75% to $76.70 per barrel.  So, on the day, we saw a drift sideways until the Fed Chair began speaking.  At that point, the bulls rallied very hard only to take profits the last 15 minutes of the day.  This all happened on heavier-than-average volume.

In economic news, the January ADP Nonfarm Employment Change came in well below forecast at +106k (compared to an expected +178k and a Dec. reading of +253k). Later, January Mfg. PMI came in slightly above expectation at 46.9 (versus a forecast of 46.8 and the Dec. value of 46.8).  Then the January ISM Mfg. PMI came in below what was expected at 47.4 (compared to the forecast of 48.0 and December’s reading of 48.4).  At the same time, the December JOLTs Job Openings report showed a much higher reading than expected at 11.012 million (versus the forecast of 10.250 million and the Nov. value of 10.440 million).  All of these tend to indicate the Fed policies are having the impacts they had hoped.

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However, the main event of the day was the Fed and in Fed news, the FOMC hiked rate 0.25% to 4.50% – 4.75%, which is the highest since October 2007.  During his press conference, Fed Chair Powell repeatedly referred to the “disinflationary process that has started.”  However, he also said “we’re going to be careful about declaring victory” and “we’ve got a long way to go.”  Powell said the labor market is still out of balance and the Unemployment Rate will need to rise from its low 3.5% level to complete the journey back to 2% inflation.  Finally, in a side note to one question, Powell said “a couple more” (rate hikes were likely to come).  That last note was exactly the music the bulls wanted to hear.

In stock news, FDX announced it was cutting more than 10% of management as part of the overall 2% workforce reduction. The company said it had already reduced staff by 12,000 since June.  Elsewhere, AMGN launched a direct competitor drug to ABBV’s blockbuster arthritis offering (Humira).  Competition is expected to lower customer prices, but analysts are expecting the savings to be limited (~ 5%) since it is in the interest of both companies to keep margins as high as possible.  Meanwhile, Reuters reports that RIVN is laying off 6% of its workforce in an effort to cut costs.  At the same time, the Polish competition watchdog (Office of Consumer Protection) has accused AMZN of misleading consumers via its sales and delivery practices on its website.  In other news, Reuters reports that RPD is considering strategic options after attracting acquisition interest.  (RPD spiked 23% Wednesday afternoon on this report.)  Finally, AMC has requested stockholder approval to increase its shares outstanding by 10 times.  However, it has coupled that proposal with a second very popular one that would convert deeply discounted preferred shares into common stock and the two ideas will be decided on a single vote.  The vote is scheduled for March 14.

In energy news, natural gas continued its relentless march downward, closing down 8% to $2.46/mmBtu on Wednesday.  The front-month natty has lost more than 20% so far this week alone.  This appears to be a consumption-led decline since natural gas inventories are only 4% higher than they were a year ago.  Elsewhere, the midday EIA Crude Oil Inventories showed a much larger-than-expected build in oil stocks.  US Inventories went up 4.140 million barrels (compared to a forecast of +0.376 million barrels and following last week’s build of +0.533 million barrels).  This was the sixth straight week of oil inventory builds in the US.  As mentioned above, WTI closed down 2.75% at $76.70/barrel (which was actually after recovering from an afternoon low of $76.08/barrel).

After the close, ALGN, ALGT, ALL, AFG, AVT, CCS, CTVA, ENVA, THG, HOLX, MCK, MTH, META, MAA, QRVO, TTEK, and UGI all reported beats on both the revenue and earnings lines.  Meanwhile, AFL, BHE, CHX, DXC, GL, LFUS, MOD, and RRX missed on revenue while beating on earnings.  On the other side, PTC and SLM both beat on the revenue line while missing on earnings.  However, CHRW, HTHIY, LSTR, MET, and MUSA missed on both the top and bottom lines.  It is worth noting that ALGN, AVT, GL, HOLX, MCK, PTC, SLM, and TTEK all raised their forward guidance.  Unfortunately, BHE, CCS, CHX, CTVA, DXC, LSTR, LFUS, and QRVO all lowered their own forward guidance.

Overnight, Asian markets were mixed on modest moves.  Taiwan (+1.14%), South Korea (+0.70%), and Malaysia (+0.29%) led the gainers.  Meanwhile, Hong Kong (-0.52%), Singapore (-0.41%), and Shenzhen (0.22%) paced the losses.  In Europe, the bourses lean heavily to the green side at midday.  The FTSE (+0.57%), DAX (+1.29%), and CAC (+0.22%) lead the way higher while only a couple smaller exchanges show any red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a very mixed open.  The DIA implies a -0.42% open, the SPY implies a +0.38% open, and the QQQ implies a +1.32% gap higher at the open.  At the same time, 10-year bond yields continue to fall at 3.389% and Oil (WTI) is down six-tenths of a percent to $75.98/barrel in early trading.

The major economic news events scheduled for Thursday include Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 am), and December Factory Orders (10 am).   Major earnings reports scheduled for the day include FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, and WEC before the opening bell.  Then, after the close, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  

In economic news later in the week, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.  In terms of earnings later this week, on Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

So far this morning, CAH, MRK, BMY, CNHI, ABB, BBVA, EL, BDX, BCE, LEA, APTV, AWK, PH, TT, BIP, RCI, DGX, MKL, HSY, WEC, CMS, AME, RACE, DNA, HOG, SBH, FLWS, VSTO, JHG, NJR, FCFS, SXC, DLX, and IMKTA all beat on both the revenue and earnings lines.  Meanwhile, SHEL, SONY, HON, TAK, LLY, IFNNY, BERY, APD, ABG, SIRI, DASTY, BC, ALFVY, BR, ATI, and WNC all missed on revenue while beating on earnings.  On the other side, COP, ICE, HBI, LAZ, and GOOS beat on revenue while missing on earnings.  Unfortunately, APDSKFRY, AVY, PENN, WMS, and BALL missed on both the top and bottom lines.  It is worth noting that BMY, LLY, BDX, PH, TT, HSY, RACE, NJR, and WNC all raised their forward guidance.  However, MRK, EL, LEA, APTV, SWK, SIRI, AVY, HBI, WMS, and GOOS all lowered their own forward guidance.

With that background and more data ahead, it looks like the recent leaders (QQQ and SPY) are going to gap up and try to take markets higher this morning. However, the mega-cap DIA is looking to gap down and is languishing inside its recent wedge, just above its T-line. The SPY is completing its golden cross (50sma cross above 200sma) this morning. A certain group of traders will see that as a great sign and will get long. So, the trend, gaps, technical signs, and two broader market indices are all bullish this morning. Perhaps it is a rotation out of the safety mega-cap names that is weighing the DIA down. Regardless, the bias is bullish, but a lot of economic data is still showing a slowing economy. So, there will continue to be some headwinds.

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 just on the green side of flat Tuesday.  All three major indices then chopped sideways for the first 40 minutes of the day.  At that point, the bulls led a modest rally for about 45 minutes.  Then another sideways move (within a very tight range this time) took over until 12:20 pm when the bulls started another modest move higher most of the afternoon.  However, at about 3:10 pm, the bears stepped back in to start some end-of-day profit-taking.  This action gave us large, white-bodied candles, with modest upper wicks and with only the DIA having a lower wick. All three major indices are back above their T-line, the QQQ is back above its 200sma, and the DIA is back above its 50sma.

On the day, all 10 of the sectors are in the green as Basic Materials (+1.50%) leading the way higher and Communications Services (+0.15%) lagging behind the other sectors.  At the same time, the SPY was up 0.81%, the DIA was up 0.53%, and QQQ was up 0.86%.  Meanwhile, the VXX was down almost 2% to 11.36 and T2122 is right back up deep in the overbought territory to 97.61.  10-year bond yields are down to 3.523% and Oil (WTI) was up 1.20% to $79.08 per barrel.  So, on the day, we saw some support from the T-lines as the bulls took control for the day. This all happened on light volume as the markets wait on big-name earnings and especially the Fed news on Wednesday.

In economic news, the Q4 Employment Cost Index came in lower than expected at +1.0% (compared to a forecast of +1.1% and a Q3 value of +1.2%).  This was the smallest increase in labor costs in a year and is more evidence that inflation is heading in the right direction.  Later, the Chicago PMI came in worse than expected at 44.3 (versus the forecast of 45.0 and the December value of 45.1).  This shows that businesses (purchasing managers), at least those in the Midwest, have a declining outlook for the economy.  Then at 10 am, the Conference Board Consumer Confidence Index also came in a bit below expectation at 107.1 (compared to a forecast of 109.0 and the December reading of 109.0).  This too shows a declining outlook for the economy, this one from consumers.  Finally, after the close, the API Weekly Crude Oil Stocks Report came in with a huge, surprise inventory build.  The report showed an inventory increase of 6.330 million barrels (versus an expected drawdown of -1.000 million barrels and following last week’s 3.378 million barrel crude oil stock build).  This is just another in a string of huge inventory builds in recent weeks in the US.

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In miscellaneous news, as we start a new month, we look back at a nice January in the stock market.  SPY gained 6.29%, DIA gained 2.87%, and QQQ led the rally, up 10.64%.  Even small-caps participated as the IWM was up 9.82% for January.  In terms of sectors, Consumer Cyclical was up a whopping 15.80% with several other areas up 12-13%.  Lowly Energy (+0.25% for the month) lagged the other sectors.  However, all was not rosy in January as an NYSE computer system glitch prevented 250 major stocks from opening on time on January 24.  This resulted in unknown losses, but the NYSE has said the claims made already are likely to exceed the pool of funds set aside to cover such losses.

In stock news, TSLA filed updated 10-K risk assessments with the SEC which now includes the risk of Elon Musk needing to sell more stock (to satisfy his other financial commitments).  Elsewhere, PYPL announced it will lay off 7% of its workforce (2,000 employees) as it braces for an economic slowdown.  BA delivered the last of its 747 jets to AAWW on Tuesday afternoon.  The company’s replacement (the 777X) will not be ready to ship until 2025.  After the close, the EU said it is now studying whether the major tech companies (GOOGL, AMZN, AAPL, META, NFLX, and MSFT) should be charged to subsidize telecom network costs.  (Currently, those costs are government subsidized and implemented by Eu-based Telcos like TEF.)  The reasoning is that the six major tech firms account for well more than 50% of Internet traffic.  The tech giants say the idea amounts to an internet traffic tax and would violate the EU “net neutrality” rules requiring all users to be treated equally.

In stock legal and regulatory news, TSLA disclosed Tuesday that the US Dept. of Justice has sought all its internal documents related to the “Full Self-Driving” and “Autopilot” driver-assist systems.  This seems to be related to a criminal investigation over claims the company made about the vehicle driving itself and deaths that resulted from drivers relying on those systems.  Meanwhile, the National Labor Relations Board is issuing a complaint after its investigation found that AAPL workplace rules violate US labor law.  This would just be another among several complaints pending against AAPL for anti-union actions.  Further down the action chain, a US judge found AMZN guilty of illegally threatening New York warehouse workers if they voted to unionize.

After the close, AMD, DOX, AMGN, CENT, CENTA, MDLZ, OI, RNR, SYK, and SMCI all reported beats on both the revenue and earnings lines.  Meanwhile, CB and UNM both beat on revenue while missing on earnings.  On the other side, CP, EW, JNPR, SNAP, ASH, and HA all missed on revenue while beating on earnings.  However, WDC, EA, and MTCH missed on both the top and bottom lines.  It is worth noting that OI raised its forward guidance.  At the same time, WDC, EA, and SNAP lowered their forward guidance.

Overnight, Asian markets leaned heavily to the upside.  Shenzhen (+1.31%), Hong Kong (+1.05%), South Korea (+1.02%), and Taiwan (+1.01%) led the gains but the increases were widespread.  Only Malaysia (-0.93%) and India (-0.26%) showed any red in that region.  In Europe, we see a similar story taking shape at midday.  The FTSE (+0.20%), DAX (+0.23%), and CAC (+0.25%) lead the way in early afternoon trade.  However, the only red on the continent is Switzerland (-0.46%).  As of 7:30 am, US Futures are pointing toward a modestly down start to the day.  The DIA implies a -0.36% open, the SPY is implying a -0.22% open, and the QQQ implies a flat -0.04% open at this hour.  At the same time, volatile 10-year bond yields are down to 3.488% while Oil (WTI) is up 0.71% to $79.43/barrel in early trading.

The major economic news events scheduled for Wednesday include ADP January Nonfarm Employment Change (8:15 am), Jan. Mfg. PMI (9:45 am), ISM Mfg. PMI and Dec. JOLTs (both at 10 am), EIA Crude Oil Inventories (10:30 am), the FOMC Rate Decision and FOMC Statement (both at 2 pm), and FED Chair Press Conference (2:30 pm).  Major earnings reports scheduled for the day include MO, ABC, ATKR, BSX, EAT, GIB, EPD, EVR, FTV, GSK, HUM, IEX, JCI, MHO, NVS, ODFL, OTIS, PTON, SMG, SR, TMUS, TMO, WRK, and WM before the opening bell.  Then, after the close, AFL, ALGN, ALGT, ALL, AFG, AVT, BHE, CHRW, CCS, CTVA, DXC, ENVA, GL, THG, HOLX, LSTR, LFUS, MCK, MTH, META, MET, MAA, MOD, MUSA, QRVO, RRX, TTEK, and VSTO report. 

In economic news later in the week, on Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In economic news later in the week, on Wednesday, ADP January Nonfarm Employment Change, Jan. Mfg. PMI, ISM Mfg. PMI, Dec. JOLTs, EIA Crude Oil Inventories, the FOMC Rate Decision, FOMC Statement, and FED Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later this week, on Thursday, FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, WEC, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  Finally, Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

So far this morning, ABC, GSK, TMO, MO, OTIS, GIB, EVR, EAT, ATKR, SMG, and SR have all reported beats on both the revenue and earnings lines.  Meanwhile, HUM, NVS, EPD, NVO, JCI, and ODFL all missed on revenue while beating on earnings.  On the other side, BSX, PTON, WM, and IEX beat on revenue while missing on earnings. However, HTHIY (Hitachi) and WRK missed on both the top and bottom lines.  It is worth noting that HUM, PTON, and EAT all raised their forward guidance while none of the reporting companies lowered guidance at this point.

With that background and a heavy day of data (especially the afternoon) ahead, it looks like all three major indices are moving back toward flat in the premarket. All three remain above their T-line (8ema), although the DIA is close above. Once again the SPY is right at the point of a golden cross, with its 50sma kissing up against its 200sma. The QQQ and DIA have resistance levels just above. However, the trend remains bullish in the QQQ, SPY, and to a lesser “inside a wedge” extent in the DIA. Again, remember that 99% of futures bets are expecting a 0.25% rate hike (i.e. the market is certain it knows what the FOMC will do). That means the risk is that the Fed does something unexpected (like a 0.50% rate hike). If that were to happen, I’d expect the bears to roar into action. However, the more likely scenario is that we drift into the report and then look to continue the trend on the comfort of having known what the Fed had been signaling. Another quite possible scenario would have the FOMC do a 0.25% hike, but the statement and Fed Chair Powell both sound very hawkish to dissuade talk of a “March pause” which has been in the financial news the last couple of days. Personally, I won’t try to predict what will happen by trading one way or the other ahead of the Fed.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped down Monday (0.73% in the SPY, 0.34% in the DIA, and down 1.21% in the QQQ).  All three major indices rallied for 45 minutes but then began a selloff that lasted the rest of the day.  We closed very close to the lows.  This action gave us gap-down black-bodied candles with upper wicks.  It would be possible to call the SPY and DIA Inverted Hammer candles, with both of them sitting on the T-line (8ema).  The DIA is also sitting on its 50sma again after the session. This all happened on average volume in the SPY and QQQ while DIA had lower-than-average volume.

On the day, nine of the 10 sectors are in the red as Technology (-2.02%) leading the way lower and Communications Services (+0.03%) holding up better than the other sectors.  At the same time, the SPY was down 1.25%, the DIA was down 0.75%, and QQQ was down 2.02%.  Meanwhile, the VXX was up 2.48% to 11.56 and T2122 dropped out of the overbought territory to 76.04.  10-year bond yields were up to 3.542% and Oil (WTI) was down almost 2.5% to $77.81 per barrel.  So, on the day, we saw a gap-down bearish candle that closed near the lows. 

In stock news, SNY has fired all employees at two vaccine manufacturing plants in India after the company failed to win a UNICEF contract.  At the same time, Reuters reported that CFG cut back on auto lending last year and now plans to further reduce its exposure to this segment of the business as a risk management move.  The plan is to reduce the auto loan portfolio to $5 or $6 billion (from a $14.5 billion peak).  A bit later in the day, UL announced a new CEO (former Heinz exec) Hein Schumacher.  Meanwhile, F announced they are cutting prices on their “Mustang Mach-E” by as much as $5,900.  This follows the lead of TSLA and is the harbinger of an EV price war according to industry analysts.  Not to be outdone, TSLA also announced it is now offering more new discounts and added feature incentives to entice buyers.  Elsewhere, Reuters reported that BA will be adding a third production line for 737 Max planes in mid-2024.  In union news, 8,200 UAL Teamster members have ratified a new two-year contract.  Then, after the close, JBLU pilots also approved a two-year contract extension.

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In stock legal and regulatory news, a US court has rejected the JNJ attempt to offload liability from tens of thousands of talc product lawsuits via the Chapter 11 Bankruptcy of its healthcare subsidiary.  Meanwhile, in Philly, the US Third District Court of Appeals has ruled that drug manufacturers can limit healthcare providers use of outside pharmacies for dispensing drugs under a federal discount program.  The ruling is a win for SNY, NVO, and AZN.  At the same time, the NHTSA has hit VLVLY (Volvo) with a $130 million civil penalty after an investigation found the company failed to recall defective vehicles in a timely fashion.

In energy news, Natural Gas dropped another 6% Monday, falling to nearly a two-year low at $2.646/mmBtu.  This is despite forecasts calling for East Coast temperatures below freezing this week (and nearing 10 degrees Friday).  Meanwhile, Oil (WTI) fell almost 2.5% as analysts are expecting a Wednesday rate hike, which should make the Dollar stronger and therefore lower commodity prices.  Another factor is that despite the European ban and the G-7 price cap, oil analysts say Russian exports remain strong. 

In miscellaneous news, Bloomberg reported that last week was the first week where more than 50% of workers returned to the office across all major US cities.  Meanwhile, US Treasury Sec. Yellen told an interview Monday that “persistently low inflation” is likely to return as a long-term challenge for the economy once the pandemic-era distortions are worked out.  Finally, both the US and Germany said they will not be supplying fighter jets to Ukraine.  However, according to LMT announced the US will continue to supply the planes to European countries (who in-turn may supply the F-16s to Ukraine).  For example, Poland said Monday it was willing to supply F-16s in coordination with other European allies.

After the close, SANM, ARE, GGG, HP, and CADE all posted beats on the revenue and earnings lines.  Meanwhile, WHR and PFG both missed on the revenue line while beating one the earnings line.  On the other side, NXPI and WWD both beat on revenue while missing on earnings.  It is worth noting that WHR and SANM both raised their forward guidance.

Overnight, Asian markets were red across the board with the sole exception of India (+0.07%) which clung to the green.  Meanwhile, Taiwan (-1.48%), Hong Kong (-1.03%), and South Korea (-1.00%) led the region down.  In Europe, markets are mixed but lean heavily to the downside at midday.  The FTSE (-0.85%), DAX (-0.56%), and CAC (-0.53%) lead the region lower while only Russia (+0.33%) is appreciably in the green in early afternoon trade.  As of 7:30 am, US Futures are pointing to a down start to the day.  The DIA implies a -0.27% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.44% open at this hour.  At the same time, 10-year bond yields are down to 3.523% and Oil (WTI) is off 1.16% to $76.99/barrel in early trading.

So far this morning, MPC, GM, UBS, MCD, IP, PHM, GLW, DOV, AOS, LII, ST, KEX, and MSCI have all reported beats on both the revenue and earnings lines.  Meanwhile, XOM, UPS, PFE, PII, MCO, and PNR missed on revenue while beating on earnings.  On the other side, PSX, CAT, MPLX, OSK, and MDC all beat on revenue while missing on earnings.  Unfortunately, SPOT missed on both the top and bottom lines.  It is worth noting that GM, SPOT, PII, and DOV all raised their forward guidance.  However, UPS, PFE, GLW, and OSK all lowered their forward guidance.

The major economic news events scheduled for Tuesday we get Q4 Employment Cost Index (8:30 am), Chicago PMI (9:45 am), Conference Board Consumer Confidence (10 am), and the API Weekly Crude Oil Stocks Report (4:30 pm).  Major earnings reports scheduled for the day include AOS, CAT, GLW, DOV, XOM, GM, HUBB, IMO, IP, KEX, LII, MDC, MAN, MPC, MCD, MCO, MPLX, MSCI, NYCB, OSK, PNR, PFE, PSX, PBI, PII, PHM, ST, SPOT, SYY, UBS, and UPS before the opening bell.  Then, after the close, AMD, DOX, AMGN, ASH, BXP, CP, CENT, CENTA, CB, EW, EA, HA, HLI, JNPR, MTCH, MDLZ, OI, RNR, SNAP, SYK, SMCI, UNM, and WDC report. 

In economic news later in the week, on Wednesday, ADP January Nonfarm Employment Change, Jan. Mfg. PMI, ISM Mfg. PMI, Dec. JOLTs, EIA Crude Oil Inventories, the FOMC Rate Decision, FOMC Statement, and FED Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later this week, on Wednesday, we hear from MO, ABC, ATKR, BSX, EAT, GIB, EPD, EVR, FTV, GSK, HUM, IEX, JCI, MHO, NVS, ODFL, OTIS, PTON, SMG, SR, TMUS, TMO, WRK, WM, AFL, ALGN, ALGT, ALL, AFG, AVT, BHE, CHRW, CCS, CTVA, DXC, ENVA, GL, THG, HOLX, LSTR, LFUS, MCK, MTH, META, MET, MAA, MOD, MUSA, QRVO, RRX, TTEK, and VSTO.  On Thursday, FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, WEC, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  Finally, Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

The main talk on financial news this morning is the fact GM blew away expectations. The company also told wall street it is expecting a stronger year in 2023 than industry analysts had been predicting. This would seem to bolster the idea of a consumer stronger than we thought in Q4 and perhaps a soft landing this year. Still, at the same time, MCD also easily beat expectations on both lines. They cited increased business in what it thinks is a sign of inflation-wary consumers opting for fast food rather than fine dining. Of course, that would point to a consumer under pressure.

With that background, it looks like all three major indices are retesting their T-line (8ema) for support during the premarket. DIA is also retesting its 50sma and the QQQ is falling further from its 200sma (which failed as support on Monday). The trend is still bullish in the QQQ and SPY. Meanwhile, the sideways meander inside a wedge continues in the DIA. Even though more than 99% of futures bets are expecting a 0.25% rate hike (i.e. the market is certain it knows what the FOMC will do), do not be surprised if we drift on lower volumes today and early on Wednesday. (There isn’t much advantage to be had “doubling down,” even when you are sure you know what will happen when everybody else in the market believes the same thing.)

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets diverged slightly at the open Friday with the DIA opening flat, the SPY gapping down a quarter of a percent, and the QQQ gapping down a half of a percent.  From that point, we rode a roller coaster the first 90 minutes.  Then the bulls stepped in to lead a steady rally in all three major indices that has lasted up to 3:30 pm.  However, the bears came in as we saw a sharp selloff the last 30 minutes.  This action gave us white-bodied candles with significant upper wicks in the SPY and QQQ as well as a white Doji-type candle in the DIA.  The QQQ has crossed above its 200sma while the DIA bounced up off its T-line (8ema).

On the day, only four of the 10 sectors were in the green as Consumer Cyclical (+1.26%) lead the way higher and Energy (-1.23%) lagged the other sectors.  At the same time, the SPY was up 0.23%, the DIA was up 0.07%, and QQQ was up 1.00%.  Meanwhile, the VXX was down 1.31 to 11.30 and T2122 rose yet again and remains deep in the overbought territory at 97.15.  10-year bond yields were up to 3.509% and Oil (WTI) was down almost 2% to $79.40 per barrel.  So, on the day, we saw a bullish move going into the weekend with heavy profit-taking going into the close.  This all happened on less than average volume in the large-cap indices while the QQQ managed just over average volume.

In economic news, the Dec. PCE Price Index (Fed’s favorite inflation measure) came in lower than expected at +0.1% for the month and at a +5.0% year-on-year (compared to a forecast of +0.2% for the month and +5.5% y-o-y).  That was the third consecutive fall in the number and the lowest annual number in over a year.  December Personal Spending was also down more than was expected at -0.2% (versus a forecast of -0.1% and November’s reading of -0.1%).  Both of those show slowing inflation and activity, which is what the Fed has been wanting to see.  Later, Michigan Consumer Sentiment actually slightly beat expectations at 64.9 (versus a forecast of 64.6 and the December value of 59.7), showing that consumer outlooks are improving.  Finally, December Pending Home Sales came in much better than expected at +2.5% (compared to a forecast of -0.9% and a November value of -2.6%).

SNAP Case Study | Actual Trade

In stock news, GS cut their CEO’s pay by 29% (to $25 million) following a down 2022. At the same time, BA announced it will be hiring 10,000 new workers in 2023 as it ramps up production.  Elsewhere, the Netherlands and Japan joined President Biden’s Chinese export ban, which means ASML, NINOY, and TOELF joined the group of companies agreeing to not sell semiconductor manufacturing machinery to China.  In other news, WMT and CVS both announced they are cutting the pharmacy hours at stores nationwide due to a shortage of labor.  In bankruptcy news, Bloomberg reported Friday that BBBY has failed to find a buyer and is very likely headed to Chapter 11 bankruptcy.  Finally, F recalled nearly half a million vehicles for rear camera display failures.

In stock legal news, on Friday, AMZN won its bid to have a 2021 lawsuit thrown out (the suit had claimed AMZN’s warehouse worker quotas were biased against older employees forcing them to be at greater risk of injury in order to meet the quotas).  At the same time, Reuters reported that the SEC is now investigating Elon Musk’s role in the “self-driving” claims of TSLA.  In a separate Reuters report, it was claimed that the US Dept. of Justice is again investigating V and MA related to anti-competitive debit card practices.

So far this morning, CAJ, PHG, ARLP, and SOFI have all reported beats on both the revenue and earnings lines.  Meanwhile, RYAAY missed on revenue while beating on earnings.  (BEN is scheduled to report at 8:30 am eastern.)

Overnight, Asian markets were mixed with Taiwan (+3.76%) as an outlier to the upside.  Meanwhile, Shenzhen (+0.98%), India (+0.25%), and Japan (+0.19%) led the region higher.  Hong Kong (-2.73%) was an outlier to the downside while South Korea (-1.35%), Singapore (-0.47%), and Australia (-0.16%) rounded out the area’s red exchanges.  In Europe, markets are leaning heavily to the downside at midday.  The FTTSE (+0.06%) is one of only three bourses that are managing any green while the DAX (-0.76%) and CAC (-0.58%) are more typical and are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a significant gap lower to start the day.  The DIA implies a -0.66% open, the SPY is implying a -0.93% open, and the QQQ implies a -1.23% open at this hour.  At the same time, 10-year bond yields are up to 3.553% and Oil (WTI) is just on the red side of flat at $79.59/barrel in early trading.

There are no major economic news events scheduled for Monday.  Major earnings reports scheduled for the day include ARLP, BEN, and PHG before the opening bell.  Then, after the close, ARE, CADE, GGG, HP, NXPI, PFG, WHR, and WWD report. 

In economic news later in the week, on Tuesday we get Q4 Employment Cost Index, Chicago PMI, Conference Board Consumer Confidence, and the API Weekly Crude Oil Stocks Report.  Then Wednesday, ADP January Nonfarm Employment Change, Jan. Mfg. PMI, ISM Mfg. PMI, Dec. JOLTs, EIA Crude Oil Inventories, the FOMC Rate Decision, FOMC Statement, and FED Chair Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Q4 Nonfarm Productivity, Q4 Unit Labor Costs, and December Factory Orders.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Services PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings, on Tuesday, AOS, CAT, GLW, DOV, XOM, GM, HUBB, IMO, IP, KEX, LII, MDC, MAN, MPC, MCD, MCO, MPLX, MSCI, NYCB, OSK, PNR, PFE, PSX, PBI, PII, PHM, ST, SPOT, SYY, UBS, UPS, AMD, DOX, AMGN, ASH, BXP, CP, CENT, CENTA, CB, EW, EA, HA, HLI, JNPR, MTCH, MDLZ, OI, RNR, SNAP, SYK, SMCI, UNM, and WDC report.  Then Wednesday, we hear from MO, ABC, ATKR, BSX, EAT, GIB, EPD, EVR, FTV, GSK, HUM, IEX, JCI, MHO, NVS, ODFL, OTIS, PTON, SMG, SR, TMUS, TMO, WRK, WM, AFL, ALGN, ALGT, ALL, AFG, AVT, BHE, CHRW, CCS, CTVA, DXC, ENVA, GL, THG, HOLX, LSTR, LFUS, MCK, MTH, META, MET, MAA, MOD, MUSA, QRVO, RRX, TTEK, and VSTO.  On Thursday, FLWS, ABB, WMS, APD, ALFVY, ATI, AME, APTV, ARCO, ARW, ABG, AVY, BALL, BCE, BCX, BERY, BMY, BR, BIP, BC, CAH, CMS, CNHI, COP, DB, LLY, EL, RACE, FCFS, HBI, HOG, HSY, HON, ITW, ICE, LANC, LAZ, LEA, MMP, MKL, MRK, NJR, PH, PENN, DGX, RCI, SBH, SNDR, SIRI, SNA, SONY, SWK, TT, GWW, WNC, WEC, GOOGL, AMZN, AAPL, TEAM, BSMX, BZH, BYD, CVCO, CRUS, CLX, CTSH, COLM, DECK, F, GEN, GILD, GOOG, HIG, HUBG, KMPR, LPLA, MEOH, MCHP, MTX, OTEX, POST, QCOM, RGA, SIGI, SKX, SKYW, SBUX, and X report.  Finally, Friday, we hear from AON, ARCB, AVTR, SAN, BSAC, BBU, BEPC, BEP, CBOE, CHD, CI, LYB, MOG.A, NFG, REGN, SAIA, SNY, and ZBH.

In miscellaneous news, Sunday was the 30th anniversary of the first ETF (now called SPY), which began trading on the Amercian Stock Exchange (now NYSE-Market). It began with only $6.5 billion in assets, but now has $375 billion. It remains the largest ETF in what is now a $6.5 trillion market segment. In 2022, nearly $1 trillion was taken out of mutual funds, but at the same time $600 billion was added to ETFs.

With that background, it looks like the SPY and DIA are headed back to retest their T-lines (8ema) as support this morning. It is worth noting that the SPY is very near a “golden cross” (50sma crossing above the 200sma) which is a signal many funds and old-time traders will take heed of. And despite the gap lower at the open, the short-term trend remains bullish in all three major indices with the mid-term trend bullish in the SPY and QQQ while the DIA works in a wedge. Remember we have the Fed announcements on Wednesday and this is a heavy earnings week including many of the market’s big dogs (most active names), especially Thursday. As far as the Fed goes, almost everybody (literally 99.9% of CME Fedwatch probabilities) is expecting a 0.25% hike. While “the safety of the pack” is great, don’t forget that the risk is to the bearish side should the Fed decide to call an audible and do a bigger hike. Just be prepared.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped higher (up 0.67% in the SPY, up 0.31% in the DIA, and up 1.23% in the QQQ) on Thursday.  However, all three major indices almost immediately moved to fill the gap, with the SPY and DIA having retraced the gap entirely and the QQQ fading its gap by three-fourths by 11 am. Then it was the bulls’ turn to step in with a more modest rally that took all three indices back up to the opening level by 1:40 pm.  At that point, the large-cap indices bobbed along their opening level while the QQQ kept slowly moving higher for another hour before starting its sideways move.  Finally, another modest rally began again at 3 pm and ran into the close.  This action gave us a gap-up, Hanging Man candles in all three major indices.

On the day, nine of the 10 sectors are in the green as Energy (+1.86%) lead the way higher and Consumer Defensive (-0.32) lagged the other sectors.  At the same time, the SPY was up 1.09%, the DIA was up 0.59%, and QQQ was up 1.95%.  Meanwhile, the VXX was down 1.55% to 11.45 and T2122 rose again and remains deep in the overbought territory at 96.98.  10-year bond yields were up to 3.506% and Oil (WTI) was up 1.19% to $81.10 per barrel.  So, on the day, we saw a gap-up day that was indecisive with a bullish lean most of the day.  The DIA stayed above its 50sma and QQQ is testing its 200sma from below. All of this happened on lower-than-average volumes.

In economic news, December Durable Good Orders came in much better than was expected at +5.6% (compared to a forecast of +2.5% and the November value of -1.7%).  At the same time, Q4 GDP came in better than expected at +2.9% (versus the forecast of +2.6%, but worse than the Q3 GDP of +3.2%).  The Q4 GDP Price Index was higher than expected at +3.5% (compared to the forecast of +3.3% but better than the Q3 value of +4.4%).  So, again GDP did not grow as fast as inflation in Q4. In other data, December Goods Trade Balance came in worse than expected at -$90.27 billion (versus the November reading of -$82.93 billion).  Elsewhere, Weekly Initial Jobless Claims were better than expected at 186k (versus a forecast of 205k and last week’s value of 192k).  Then Dec. Retail Inventories grew 0.3% (compared to the Nov. value of -0.4%).  Finally, Dec. New Home Sales grew much more than expected at +2.3% (versus a forecast of -4.7% and a Nov. reading of +0.7%).

SNAP Case Study | Actual Trade

In stock news, on Thursday, Reuters reported that Panama denied QMCO permission to expand its copper mining operations in that country.  Elsewhere, TM surprised the markets with a leadership shakeup when the grandson of Toyota’s founder will step down as CEO on April 1 to be replaced by someone outside of the Toyoda family.  Elsewhere, a Delaware court ruled that shareholders can sue a former MCD executive for damages caused by his allegedly allowing a culture of sexual harassment to flourish.  In a follow-up to the ChatGPT story, BZFD announced that they will use that AI tool to enhance their content.  A separate story by the Wall Street Journal says that BZFD will be paid millions by META to bring content to their platforms.  In other news, BBBY received a notice of default and repayment acceleration from JPM according to regulatory filings.  BBBY said it does not have the money to pay and is considering skipping debt payments on Feb. 1 according to Reuters.  After the close, HAS announced it will cut 1,000 jobs (15% of its workforce) and expects Q4 revenue to be down 17% from the previous year.  The Canadian Privacy Regulator has found HD’s Canadian unit to have shared customer online sales receipts and personal data with META up through October 2022.  Finally, BA plead not guilty to fraud conspiracy charges stemming from the 737 MAX design flaws that caused two plane crashes in 2018 and 2019.

In energy news, natural gas failed to hold the pivotal $3 support level and closed at $2.908/mmBTU Thursday.  However, the price had to rally hard to close at even that level after plunging to $2.688 (lowest since April 2021) early in the day.  Meanwhile, Oil (WTI) rallied all day on upbeat US economic data and news of more supply limitations due to unplanned refinery maintenance shutdowns.  The other news in the oil space was the reaction to the massive CVX buyback plan (as reported here yesterday) of $75 billion, plus an increase of 6.3% on the company dividend.  President Biden attacked the plan as “an odd way for CVX to show what it had recently been claiming to him and Congress…that it was working hard to increase oil production.”

After the close, V, LHX, WRB, KLAC, AJG, and RMD all reported beats on both the revenue and earnings lines.  Meanwhile, SHECY, OLN, WY, and RHI all missed on revenue while beating on earnings.  On the other side, PACW and SSB beat on revenue while missing on earnings.  However, INTC, EMN, and KNX missed on both the top and bottom lines.  It is worth noting that INTC lowered its forward guidance while EMN raised its forward guidance (despite its misses).

Overnight, Asian markets leaned heavily to the green side.  India (-1.61%) was the outlier to the downside.  Meanwhile, Shanghai (+0.76%), South Korea (+0.62%), Shenzhen (+0.54%), and a handful of others were up more than half of a percent in that region.  In Europe, the bourses are moderately higher with only a few minor spots of red on the board at midday.  The FTSE (+0.13%), DAX (+0.16%), and CAC  (+0.01%) are leading the region modestly higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a diverging and modestly down start to the day.  The DIA implies a +0.06% open, the SPY is implying a -0.17% open, and the QQQ implies a -0.35% open at this hour.   At the same time, 10-year bond yields are up strongly to 3.557% and Oil (WTI) is up another 1.5% to $82.28/barrel in early trading.

The major economic news events scheduled for Friday include Dec. PCE Price Index, Dec. Personal Spending, Michigan Consumer Sentiment, and Dec. Pending Home Sales are reported.  Major earnings reports scheduled for the day include AXP, ALV, BAH, CHTR, CVX, CL, GNTX, HCA, and ROP before the opening bell.  There are no major reports scheduled for after the close on Friday. 

So far this morning, CL, FANUY, and BAH have reported beats on both the revenue and earnings lines.  At the same time, CVX beat on revenue while missing on earnings (which is extremely odd for a company that just announced a record-breaking buyback plan and a significant increase in dividends).  On the other side, ALV missed on revenue while beating on earnings.  However, AXP, CHTR, and HCA all reported messes on both the top and bottom lines.  It is worth noting that despite its miss, AXP raised its forward guidance.

In late-breaking news, INTC’s report was terrible Thursday evening.  AMD is taking market share, INTC’s last two lines of chips were extremely power-hungry and in a down computer sales environment their sales forecast missed analyst expectations by billions of dollars.  CEO Gelsinger is doing the rounds today touting a multi-year turnaround plan.  Meanwhile, Japan and the Netherlands are poised to join President Biden’s alliance aimed at limiting Chinese access to any advanced semiconductor-making equipment.  The deal should be announced later today according to Bloomberg. 

With that background, it looks (ahead of some economic data) like the market is going to open in a diverging, yet flattish way this morning. The SPY and QQQ will start with inside day candles while the DIA tepidly reaches toward new recent highs. The trend remains bullish in the SPY and QQQ. Meanwhile, the DIA continues to grind sideways in its wedge (since mid-December). Remember that it is Friday and we have a Fed meeting next week. So, some profit-taking and a “wait and see” market attitude is to be expected. Get yourself positioned for this period by taking profits, hedging, reducing position sizes, etc.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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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 lower at the open on Wednesday (down 1.06% in the SPY, down 0.86% in the DIA, and down a whopping 1.71% in the QQQ).  All three major indices then drifted lower during the first hour.  However, at that point, the bulls stepped in to lead a slow, steady rally the entire rest of the day, closing near the highs.  This allowed all three indices to retest their T-line and close back above.  The DIA also retested and closed above its 50sma while the SPY retested and closed above its 200sma.  This action gave us gap-down, white candles with lower wicks.

On the day, seven of the 10 sectors were in the green as Comm. Services (+1.07%) was way out front leading the way higher and Utilities (-0.54) lagged the other sectors.  At the same time, the SPY was up 0.04%, the DIA was up 0.07%, and QQQ was down 0.22%.  At the same time, the VXX was flat at 11.63 and T2122 fell again but remains in the overbought territory at 91.03.  10-year bond yields fell slightly to 3.451% and Oil (WTI) was up slightly to $80.41 per barrel.  So, on the day, we saw an indecisive action after a strong gap down.  However, the bullish trend remains intact on average volume.

In stock news, ROG is on the cusp of gaining final approval to buy SJR after court defeats have caused the Canadian Competition Bureau to drop plans to kill the deal.  Only approval from the Canadian Finance Minister remains as a hurdle.  Meanwhile, the Wall Street Journal reports that the US Dept. of Justice is investigating GT or more specifically the way GT handled a tire recall that resulted in a number of deaths.  Near the close, the CDC reported that the most recent vaccines from PFE and MRNA have been proven to help prevent symptomatic infections of the most recent covid-19 variants.  Elsewhere, FCX warned that it is struggling to find US workers, and this shortage is limiting the amount of copper it can produce.  At the same time, IBM announced it will cut 3,900 jobs (1.5% of its global workforce).  After the close, Reuters reported that e-cigarette maker Juul is in talks with PM, NO, and Japanese Tobacco (JAPAF).  The talks range from a buyout to licensing and distribution deals as Juul explores its strategic options.  Finally, again, after-hours, CVX announced a massive $75 billion buyback plan (three times its prior $25 billion plan) starting April 1, 2023.  The move exceeded even XOM’s $50 billion buyback plan.

SNAP Case Study | Actual Trade

In energy news, the EIA reported that US Crude Oil Inventories are the highest since June of 2021 after another build last week. However, this was a much smaller increase in stocks than was anticipated based on the API report Tuesday night.  US oil refining margins were also reported to be at a three-month high.  On the Natural Gas front, despite forecasts of colder temperatures, front-month Natural Gas futures dropped into the $2 range before fighting to close right at the all-important $3 support level.  (Actual close was $3.003/mmBtu, which was a 20-month low.)

After the close, FLEX, STLD, LRCX, AMP, STX, RJF, LEVI, CCI, NOW, AXS, AXTA, TER, PLXS, and BOOT all reported beats on both the revenue and earnings lines.  At the same time, IBM, URI, and CACI beat on revenue while missing on earnings.  On the other side, TSLA, CSX, and PKG all missed on revenue while beating on earnings.  Unfortunately, LVS missed on both the top and bottom lines.  It is worth noting that even though TSLA missed on revenue, it did report record Q4 revenue of $24.32 billion.  Also note that LRCX, STX, PKG, TER, and PLXS all lowered forward guidance while URI raised its forward guidance.

So far this morning, CMCSA, ADM, AAL, NOC, NOK, STM, XEL, ATLKY, TSCO, ORI, ROK, JBLU, XRX, CNX, AIT, BFH, and MBLY all reported beats on both the revenue and earnings lines.  Meanwhile, VLO, VLVLY, MMC, SHW, and ALK reported misses on revenue while beating on earnings.  On the other side, SAP, MUR, VIRT, FCNCA, and VLY all reported beats on revenue while missing on earnings.  Unfortunately, DOW, LUV, MKC, and HZO all missed on both the top and bottom lines.  It is worth noticing that AAL, NOC, NOK, STM, ROK, JBLU, and AIT all raised their forward guidance.  However, DOW, LUV, SHW, MKC, and HZO all lowered their own forward guidance.

Overnight, Asian markets were mixed with Hong Kong (+2.37%) leading to the upside while India (-1.27%) leading to the downside.  In Europe, the bourses lean to the green at midday.  The FTSE (+0.11%), DAX (-0.02%), and CAC (+0.67%) are typical and lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed start to the day.  The DIA implies -0.02%, the SPY is implying +0.24%, and the QQQ implies +0.67% at this hour.  Meanwhile, 10-year bond yields are up to 3.495% and Oil (WTI) is up 1.17% to $81.08/barrel in early trading.

The major economic news events scheduled for Dec. Durable Goods Orders, Q4 GDP, Dec. Goods Trade Balance, Weekly Initial Jobless Claims, and Dec. Retail Inventories (all at 8:30 am), and Dec. New Home Sales (10 am). Major earnings reports scheduled for the day include VLVLY, ALK, AAL, AIT, ADM, ATLKY, BX, BFH, BFH, CRS, CNX, CMCSA, CFR, DOW, EXP, EWBC, FCNCA, JBLU, HZO, MMC, MA, MKC, MBLY, MUR, NOK, NOC, NUE, ORI, ROK, SAP, SHW, LUV, STM, TROW, TSCO, VLO, VLY, WBS, XEL, and XRX before the opening bell.  Then, after the close AJG, EMN, INTC, KLAC, KNX, LHX, OLN, RMD, RHI, V, WRB, and WY report.

In economic news later in the week, on Friday, Dec. PCE Price Index, Dec. Personal Spending, Michigan Consumer Sentiment, and Dec. Pending Home Sales are reported.  In terms of earnings, on Friday, AXP, ALV, BAH, CHTR, CVX, CL, GNTX, HCA, and ROP report.

With that background, it looks (ahead of a lot of data) like the market is going to gap higher at the open. This will put all three major indices in a retest of recent highs. So far, it seems generally good earnings are giving the bulls energy this morning. However, GDP and Durable Goods Orders could change that tune in either direction. The trend remains bullish in the SPY and QQQ. Meanwhile, the DIA continues to grind sideways in its wedge (since mid-December).

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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