Friday saw markets open modestly.  SPY opened flat a -0.01%, DIA opened +0.22%, and QQQ gapped down 0.25%.  From there, SPY and QQQ sold off in a wavy manner the rest of the day.  At the same time, DIA meandered sideways above the open all day.  This action gave us large black-body candles with small wicks on both ends for the SPY and QQQ.  Meanwhile, the DIA printed a white-bodied Spinning Top candle that retested but failed it s T-line (8ema).  This happened on well above-average volume in all three major index ETFs.

On the day, eight of the 10 sectors were in the green with Utilities (1.51%) leading the market higher while Technology (-2.21%) was war and away (by 1.6% more than the other red sector) the biggest loser.  The big drag on technology was SMCI (-23.14%) which announced its earnings date, but did not include a prerelease of preliminary results as has been their custom.  This led to panic that the SMCI and the broader tech industry is in trouble.  The worst part for the market was that this spread to NVDA (-10.00%) which is by far the biggest market-mover, normally trading 2-3 times as much dollar volume as the next closes ticker.  However, Friday, NVDA traded five times as much dollar-volume than the next closes ticker.

This led to the SPY losing 0.87%, DIA gaining 0.52%, and QQQ losing a whopping 2.07%.  VXX gained 3.27% to close at 15.46 and T2122 climbed but remains just inside of its oversold territory at 19.15.  10-year bond yields fell a bit to 4.623% and Oil (WTI) was higher by 0.54% at $83.14 per barrel.  So, Friday was a story of fear.  SMCI made the market fear that the AI craze was ending leaving nothing but an abyss for the broader tech sector (which has driven markets for years now).  In addition to the two already mentioned, NFLX (-9.09%), AMD (-5.44%), and META (-4.13%) were also hammered and led the way lower.

There was no major economic news scheduled for Friday.

In FOMC speak, Chicago Fed President Goolsbee said that progress on inflation has been stalled this year.  Gone are his mentions of being on a “golden path.”  For now, he is counseling that the Fed stand pat, saying, “Given the strength of the labor market and progress on easing inflation seen over a longer arc, I believe the Fed’s current restrictive monetary policy is appropriate,” … “I think we have to recalibrate and we have to wait and see.”  He continued, “We’re just trying to figure out what is necessary, how restrictive do we need to be” … “We have weeks, months to find out.”  Finally, and as always, he said “Ultimately the proper policy going forward will depend on the data.”

In stock news, on Friday, Invetstin.com reported that the sale of PARA to Skydance Media may fall through as a competing big of $29 billion is in the works from the joint efforts of SONY and APO.  This news comes as the clock ticks on a 30-day exclusive negotiating rights period ticks away from Skydance.  Later, GOOGL announce they are rolling back requirements that suppliers and staffing firms pay their employees at least $15/hour and provide health benefits.  The move is designed to help suppliers avoid bargaining with unions.  At the same time, Reuters reported that an internal memo shows that NKE will lay off 740 employees at its headquarters. Later, LULU announced it will close id WA state distribution center and lay off 128 employees.  Meanwhile, TSLA announced it is cutting prices on Y, X, and S models by $2,000 and will end its customer referral benefits program on April 30. 

Elsewhere, the UAW won the employee vote at the VLKAF (Volkswagen) TN plant in a landslide vote with 73% for joining the union.  This was a big deal in that it is the first automaker plant in the South to unionize.  Later, a Swiss newspaper reported that the first of five planned waves of layoffs at UBS will begin in June.  This comes after the absorbing of CS and will be a cost-cutting and duplication reduction program.  The report expects 50%-60% of former CS staff to be laid off in one of the five waves.  On Saturday, TSLA cut the price of its “Full Self Driving” feature from $12k to $8k.  Then on Sunday, TSLA cut the price of some models in Europe, Africa, and the Middle East.

In stock legal and governmental news, on Friday, the FAA issued new rules that will require air traffic controllers to have at least 10 hours between shifts and 12 hours off prior to a midnight shift.  The new rules take effect in 90 days.  At the same time, SWBI and RGR appealed to the US Supreme Court to hear their appeal of a $10 billion suit brought by Mexico. The Mexico suit alleges the gun makers are responsible for misuse of their products in that country among others by drug cartels.  The appeal comes after the 1st Circuit Court of Appeals ruled in favor of Mexico, overturning the district court.  Later, the NHTSA announced that STLA is recalling 38k 2023-2024 vehicles over a steering column issue that may prevent the driver’s airbag from deploying.  At the same time, the World Health Org. issued a broader warning over contaminated JNJ children’s cough syrup (now owned by KVUE).  The original problem was found in Nigeria, but cases have now been found around Africa, Asia, and Eurasia.  Later, the Wall Street Journal reported that China has ordered AAPL to remove META WhatsApp and Threads along with other messaging apps from their app store.  At the same time, the US Dept. of Energy announced that ALB, CMI, SMNEY (Siemens), BLBP, and MP will receive a total of $1.93 billion in tax credits related to 35 clean energy projects.

Elsewhere, the NHTSA announced that TLSA will recall 3,900 Cybertrucks to fix an accelerator pedal that can come loose and get lodged in the trim causing unintentional acceleration.  At the same time, the US Interior Dept. announced it will limit oil and gas drilling as well as mining on public lands in Alaska.  Oil companies and AK politicians decried the decision as hurting jobs and the economic growth.  Later, WFC was hit with a sex discrimination lawsuit from one of their bond saleswomen.  The suit alleges the company operates an “unapologetically sexist” workplace where male managers routinely having sexual relations with subordinate women, men often make degrading jokes, and accounts are handled through an “old boy network” which cost the plaintiff millions in commissions and forced her to wait nine years for promotion to director (from Vice President). 

Overnight, Asian markets were mostly green with just three of the 12 exchanges in the red.  Hong Kong (+1.77%), Singapore (+1.53%), and South Korea (+1.45%) led the region higher but the gains were broad with half of the region’s exchanges up more than one percent.  In Europe, we see a similar picture at midday with 13 of 15 bourses in the green.  The FTSE (+1.59%), CAC (+0.18%), and DAX (+0.48%) lead the region on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.52% open, the SPY is implying a +0.56% open, and the QQQ implies a +0.63% open at this hour.  At the same time, 10-year bond yields are up to 4.66% and Oil (WTI) is flat at $83.15 per barrel in early trading.

There is no major economic news scheduled for Monday. However, the major earnings reports scheduled for before the open include ACI, KSPI, SDVKY, TFC, VZ, and ZION.  Then, after the close, ARE, AMP, BRO, CDNS, CLF, CR, GL, HXL, LU, MEDP, NUE, PKG, SAP, and VLRS report. 

In economic news later this week, Tuesday we get Building Permits, S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, March New Home Sales, and API Weekly Crude Oil Stocks.  Then Wednesday, March Core Durable Goods, March Durable Goods, and EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q1 GDP, Q1 GDP Price Index, March Goods Trade Balance, March Retail Inventories, March Pending Home Sales, and the Fed Balance Sheet.  Finally, on Friday, March Core PCE Price Index, March PCE Price Index, March 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 DHR, FI, FCX, GE, GM, HAL, HRI, IVZ, JBLU, KMB, LKQ, LMT, MSCI, NEE, NVS, OPCH, PNR, PEP, PII, BPOP, PHM, DGX, RTX, R, SHW, SPOT, UPS, WRB, WBS, XRX, AGR, BKR, CNI, CB, CSGP, EWBC, ENVA, EQT, EQR, HA, IEX, MTDR, MAT, RRC, STX, STLD, LRN, TSLA, TXN, VLTO, V, WFRD, and WFG.  Then Wednesday APH, T, AVY, BIIB, BA, BSX, BG, CME, KOF, CSTM, ETR, FTV, GD, GPI, HAS, HLT, HUM, IPG, LII, LAD, MHO, MAS, COOP, EDU, NSC, ODFL, OTIS, OC, PRG, RCI, SABR, SYF, TEL, TDY, TMO, TNL, UMC, VRT, WAB, WSO, AGI, ALGN, AR, BMRN, CACI, CP, CLS, CCS, CHX, CHE, CMG, CHDN, CYH, EHC, F, GGG, ICLR, IBM, KALU, KNX, LRCX, LSTR, MTH, META, MEOH, MOH, NBR, ORLY, OII, PLXS, RJF, ROL, DEIC, NOW, TER, TX, TYL, URI, UHS, VALE, WCN, WU, WHR, and WM report.  On Thursday, we hear from AOS, ADT, ALFVY, ALLE, MO, AAL, HOUS, AIT, ARCH, AMBP, ABG, AZN, BFH, BMY, BC, CARR, CAT, CBZ, CX, CHKP, CMS, CMCSA, CFR, DAR, DOV, DOW, DTE, EQNR, FCNCA, FCFS, FCN, GTX, GEV, HOG, HP, HTZ, HES, HON, IP, KDP, KEX, LH, LAZ, LECO, HZO, MRK, NDAQ, NEM, NOC, ORI, OSK, PCG, PHIN, POOL, RS, RCL, SPGI, SNY, SAH, LUV, SRCL, STM, FTI, TECK, TXT, TSCO, TRU, TPH, UNP, VLO, VC, GWW, WST, WEX, WTW, XEL, AEM, AB, ALSN, GOOGL, ATR, AJG, TEAM, AVB, BYD, COF, CSL, CINF, COLM, DXCM, EMN, EW, EGO, ERIE, FE, GILD, GOOG, TV, HIG, HUBG, INTC, JNPR, KLAC, LHX, MSFT, MTX, MHK, NOV, DOC, PFG, RMD, RHI, ROKU, SKX, SKYW, SNAP, SSNC, TMUS, TDOC, TS, TEX, TFII, TBBB, TPC, WDC, WY, and WKC.  Finally, on Friday, ABBV, AON, ALV, AN, AVTR, BALL, CNC, CHTR, CVX, CL, XOM, FMX, GNTX, HCA, IMO, LYB, NWL, PSX, POR, ROP, SAIA, and TROW report.

So far this morning, TFC reported beats on both the revenue and earnings lines.  At the same time, VZ missed on revenue while beating on earnings.

In miscellaneous news, on Friday, the USDA confirmed that bird flu can be transmitted between cattle.  This just adds another vector to be accounted for in attempting to control the virus.  However, as of now, pasteurization still kills the virus, leaving the cattle’s milk still viable for humans and the bird flu is not deadly to cattle.  Elsewhere, Bitcoin finished its fourth “halving” on Friday.  This means that Bitcoin miners only get half as much Bitcoin in return for the same mining effort.  (These “halvings” happen every four years and are designed to make existing Bitcoin even more valuable.  In other news, China slapped an 43.5% anti-dumping tariff on an acid from the US, which is widely used in food, feed, pesticides, and medical fields.  The move comes as trade tensions between Beijing and Washington increase. 

With that background, it looks as if the bulls want to make a run this morning. All three major index ETFs gapped up to start the premarket and have put in strong white-bodied candles with no wicks since then. DIA has even crossed back above its T-line (8ema). However, the SPY and QQQ remain well below their T-line. So the short-term trend remains bearish to mixed. Meanwhile, the mid-term has also turned bearish and the longer-term market remains Bullish but trend is broken and is clearly under pressure. In terms of extension, the QQQ is extended below their T-line but the DIA is fine and SPY is somewhere between those two. Still, the T2122 indicator remains just inside its oversold range. So, again, a rest would seem in order at the very least for the Bears. (Just remember markets can remain oversold a lot longer than we can stay solvent predicting a reversal.) In terms of those 10 big dog tickers, eight of the 10 are in the green with the huge dog NVDA (+1.80%) looking to rebound after the weekend to reconsider the “sky is falling” Friday panic. TSLA (-3.82%) is down hard again as it is hit from its weekend price cuts and other news. With that all said, be careful. This week is packed with economic data (PCE) and a ton of earnings.

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

🎯 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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