Monday was another big day for the Bulls.  All three major index ETFs opened flat with DIA “gapping” the most by opening down 0.09%.  However, that was the last we saw of the Bears.  The SPY, DIA, and QQQ then gave us a long steady rally until the last 15 minutes of the day when we saw very modest profit-taking.  This action gave us large, white-bodied candles with small upper wicks (and no lower wicks) in all three major index ETFs.  All three remain well above their T-line (8ema).  This happened on a bit lower-than-average volume in the QQQ as well as a well-below-average volume in the SPY and DIA.

On the day, nine of the 10 sectors were in the green with Communications Services (+1.42%) out front leading the way higher while Utilities (-0.06%) was the only sector in the red.  At the same time, the SPY gained 0.77%, DIA gained 0.60%, and QQQ gained 1.22%.  The VXX fell 0.75% to close at 18.42 and T2122 fell but remained in the middle of its overbought territory at 90.79.  10-year bond yields dropped again to 4.426% and Oil (WTI) spiked 2.12% to close at $75.50 per barrel.  So, after a few days of consolidation, Monday was another move in the three-week-long strong rally.  We are not extremely stretched but are overbought.

There was no major economic news reported Monday.  However, the NY Fed released the results of its survey of US credit demand.  The report said there was a “notable decline” in credit over the last year with applications down.  (Down from 44.8% of those surveys in 2022 to 41.2% of those surveyed in 2023.  The pre-pandemic level was a high of 45.8% in 2019.)  However, the survey also found an increase in “interest in applying for more credit.” (This hit 29% in October versus the year-to-date average of 26%.  The 2019 number for interest in applying was another high 27.2%.) Interestingly, this may fly in the face of the narrative that “things were great pre-pandemic” since more people were applying for credit and more people were interested in applying then versus now.  However, I suppose it is also possible to argue that fewer people apply now because rates are higher and fewer are interested in applying because they may think they would be turned down.

In Fed speak news, Fed Presidents Goolsbee (Chicago) and Collins (Boston) sparked investor enthusiasm Monday.  Both hinted at the possibility of rate cuts by May.  In a speech, Goolsbee gave a sense of hope, suggesting the economy is on what he has called “the golden path” (lowering inflation without a crashing economy).  Goolsbee did not provide specific forecasts or discuss a specific schedule for future interest rates.  He did, however, acknowledge the market’s anticipation of rate cuts with a 28% chance priced into futures for March and a 58% probability by May.  In the same vein, Boston Fed President Collins noted the encouraging pattern of inflation control from last Friday’s data.  Collins also noted that while future hikes are still possible, they are not her primary expectation.

In stock news, MS announced a major reshuffle of their top executives in preparation for Ted Pick rising to the CEO role.  At the same time, not to be outdone, C announced its own reshuffle as part of CEO Fraser eliminating an entire layer of management (300 senior management roles, which is just under 10% of the staff at that level of the company) as a part of “Project Bora Bora” restructuring.  Later, Bloomberg reported NVDA is working with a spinoff from GOOGL (SandboxAQ) to use its high-end chips for drug and battery development by simulating chemical reactions.  At the same time, MGM union workers rejected the tentative contract the union had negotiated (which included an immediate 18% pay increase).  At the same time, Reuters reported that employees at two WFC branches have filed to have elections on whether or not to unionize.  Elsewhere, AAPL announced it will delay the release of its $3,500 VR/MR Headset until March (the prior date was January) as the company is still having design issues.  Meanwhile, NSANY (Nissan) announced it is following all other non-union automakers in hiking US worker wages.  NSANY said it will increase US plant (9,000 employees) wages by 10% in January.  After the close, FSR announced that its Chief Accounting Officer had quit, less than two weeks after joining the company.  Also after the close, TSLA announced it will RAISE prices on its Model Y in China starting today, by an odd 0.6%.  This may signal a slowing of the EV price war.

In OpenAI news, a few days after the company founder and CEO was ousted by the board (and immediately hired by MSFT), almost 700 of the 770 company employees threatened to resign, unless the company’s board resigns, in a formal letter.  The list of signers of that letter includes every significant employee other than three C-suite executives.  (The ousted CEO Altman was given authority to hire them all for MSFT by MSFT CEO Nadella.)  If 90% of the staff did leave, OpenAI loses most (or all) of its value overnight.  Not to be left behind, CRM CEO Benioff gave an open invitation to those OpenAI employees to join CRM instead of MSFT.  Shortly afterward, significant VC investors in OpenAI told Reuters they are considering suing the board.  For his part, MSFT CEO Nadella (MSFT is the largest shareholder of OpenAI) said that the governance (read board) of OpenAI needs to change immediately, regardless of whether or not Altman returns to that company. 

In stock government, legal, and regulatory news, Reuters reported that employees at two WFC branches have filed with the NLRB to have elections on whether or not to unionize.  The government of Canada announced Monday that it will put forward legislation to provide $20 billion in subsidies (over five years) for “carbon capture and net-zero energy” projects.  At the same time, BAYRY (Bayer) was ordered to pay $1.56 billion to four plaintiffs by a MO jury over claims the company’s Roundup weedkiller had caused diseases including cancer.  Later, Reuters reported that the SEC has been telling lobbyists and corporate executives that it may consider “scaling back” its long-anticipated environmental emissions and greenhouse gas reporting rules.  (Back in March 2022, the SEC announced rules requiring public companies to report climate risks and material emissions.  However, with only a one-vote majority over GOP SEC Commissioners, it seems corporate interests have won the fight and will take the sting out of the rules allowing corporations to mostly go on as usual.  Elsewhere, a German court ruling (saying the government cannot reallocate unused Covid pandemic funds) has wiped $66 billion off the books and put many projects at risk.  Those funds had been slated for subsidies for two chip plants (TSM, INTC, and IFNNY plants), a decarbonized steel capacity increase, and multiple EV battery supply chain projects (impacting TSLA).  The next step is undoubtedly companies threatening to cancel projects, which had been pegged at creating 500k jobs.  Later, a division of ASGN was named the primary contractor for a $61 billion (over 10 years) Dept. of Veteran Affairs IT overhaul project.  At the same time, the NHTSA said it has opened an investigation into HYMTF and KIA over 16 separate recalls the companies have had to issue over 6.4 million vehicles relating to brake fluid leaks that could cause fires.  Meanwhile, TM agreed to pay $60 million in a settlement with the CFPB (of which $12 million was fines) related to illegally bundling unwanted products into car loans that increased loan payments and hurt consumer credit ratings.  At the same time, the US Senate has informed AAL, DAL, SAVE, and other airlines that it will hold a hearing investigating baggage, flight change, and seat selection fees.  Later, the FDA warned healthcare providers not to use Monoject syringes from CAH (patient-controlled pain management devices) after the company initiated a recall.

After the close, A, BRBR, CENT, CENTA, KEYS, TCOM, and ZM…all…reported beats on both the revenue and earnings lines.  It is worth noting that A, CENT, and KEYS have lowered their forward guidance.  However, ZM raised its own guidance.

Overnight, Asian markets were mixed but leaned toward the green side on numbers and strength of move.  Taiwan (+1.20%) and South Korea (+0.77%) paced the gainers while Singapore (-0.49%), Shenzhen (-0.26%), and Hong Kong (-0.25%) led the losses.  In Europe, the bourses lean heavily toward the red at midday.  The CAC (-0.23%) and FTSE (-0.47%) lead the way lower while the DAX (+0.23%) is one of only three exchanges in the green in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.15% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.13% open at this hour.  At the same time, 10-year bond yields are down to 4.41% and Oil (WTI) is off slightly to $77.70 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to October Existing Home Sales (10 a.m.), FOMC Meeting Minutes (2 p.m.), and the API Weekly Crude Oil Stock Report (4:30 p.m.).  The major earnings reports scheduled before the open include ANF, AEO, ADI, BIDU, BBY, BURL, CAL, DKS, DY, IQ, J, KSS, LOW, MDT, NJR, and YSG.  Then, after the close, ADSK, GES, HPQ, JWN, NVDA, and URBN report. 

In economic news later this week, on Wednesday, Oct. Core Durable Goods Orders, Oct. Durable Goods Orders, Weekly Initial Jobless Claims, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and EIA Weekly Crude Oil Inventories are reported.  There is no major economic news scheduled for Thursday with markets and Federal agencies closed for Thanksgiving.  Finally, on Friday, we get S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI.

In terms of earnings reports later this week, on Wednesday, DE reports.  There are no reports on Thursday.  Finally, on Friday we hear from HTHT.

In miscellaneous news, MCO said Monday that “structural demand” for US bonds remains very strong, despite the increased volatility of recent months.  Specifically, Moody’s said not to worry about bond demand because, “As the Fed reduces its Treasury holdings, foreign central banks, pension funds, insurance companies and households will be stabilizing factors in the market.”  (This seems to be a bit at odds with the rating agency’s recent change of US debt outlook to negative.  However, it may be informed by the just-passed CR which eliminates the immediate prospect of a US government closure.)  Elsewhere, the US Dollar dropped to its lowest level in two months Monday as expectations of interest rate increases are now past.  Meanwhile, in Germany, producer prices fell a whopping 11.0% year-on-year in October.  Finally, CNBC reported that gas prices have fallen to their lowest Thanksgiving week price since 2020 after nine consecutive weeks of drops in the national average gasoline price.

So far this morning, ANF, ADI, DKS, DY, IQ, KSS, and MDT all reported beats on both the revenue and earnings lines.  Meanwhile, BIDU, BBY, CAL, and LOW all missed on revenue while beating on earnings.  On the other side, J beat on revenue while missing on earnings.  Unfortunately, BURL missed on both the top and bottom lines.  It is worth noting that ADI, J, and LOW lowered their forward guidance.  However, ANF, DKS, HIBB, and MDT raised their guidance.

With that background, all three major index ETFs opened the premarket just inside the large white candle from Monday. So far in the early session, they have printed small, indecisive, black-bodied candles. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls are in control of both the short-term and 4-5-month trend. In terms of extension, the T-lines (8emas) are not too far extended but Monday’s candle did put all three major index ETFs at the edge of being stretched again. Meanwhile, the T2122 indicator has fallen back but remains in the middle of its overbought range. So, we have some slack to work with but we are still leaning toward the need of pause or pullback. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was another indecisive day in markets as SPY and DIA opened flat while QQQ opened 0.18% lower.  At that point, SPY spent the entire day in a very slow, gradual rally.  Meanwhile, DIA sold off modestly the first 10 minutes and then traded sideways the rest of the day not far below the open level.  At the same time, QQQ followed the SPY lead with a long, slow rally that lasted all day.  However, since it started lower on a larger gap the move closed it just above the prior close.  This action gave us white-bodied Spinning Tops in the SPY and QQQ and a black-bodied Spinning Top in the DIA.  All three major index ETFs remain well above their T-line (8ema) despite the 3–4-day consolidation.  This all happened on far-below-average volume in all three major index ETFs.

On the day, all 10 sectors were in the green with Energy (+2.18%) way out front and leading the way higher while Consumer Defensive (+0.05%) lagged behind the other sectors.  At the same time, the SPY gained 0.12%, DIA lost 0.17%, and QQQ gained 0.02%.  The VXX fell more than 1.54% to close at 18.56 and T2122 spiked up again to the overbought territory at 94.94.  10-year bond yields dropped again to 4.439% and Oil (WTI) spiked 4.03% to close at $75.84 per barrel.  So, Friday was another holding pattern day with markets waffling sideways all day.  We were able to relieve over-extension by marking time (giving the T-line time to make up ground), which was greatly needed.  However, for the most part, it was just an indecisive pause day in a Bullish rally.

The major economic news reported Friday was limited to October Building Permits, which came in above expectations at 1.487 million (compared to a forecast of 1.450 million and even above the September value of 1.471 million).  This was a 1.1% month-on-month increase after September had given us a 4.5% decrease over August.  At the same time, October Housing Starts also came in above predicted at 1.372 million (versus a forecast of 1.345 million and the September reading of 1.346 million).  This amounted to a 1.9% increase from September which itself had seen a 3.1% increase over August.

In Fed Speak news, Boston Fed President Collins stated the FOMC may need to worry less about inflation and let the benefits of strong employment spread to workers.  She said, “The labor force participation rate for prime-aged workers is higher today than it was just before the pandemic … If labor supply expands to meet demand in tight labor markets, then higher levels of economic activity in such times may not generate added price pressures requiring tighter monetary policy.”  “Unemployment rates that are persistently higher by race, or by place, as they have been for a long time, reflect underutilization of our country’s labor resources, and that adversely affects national productivity and prosperity.”  Elsewhere, Chicago Fed President Goolsbee pointed to housing prices as the key to sealing the country’s path to 2% inflation.  Goolsbee said, “If we hit the targets that we expect to hit, then we would be on path to get to 2%, and that’s what I call the golden path — no recession, and inflation gets down — but that housing inflation is the thing we should really keep an eye on.”  Later, Fed Vice-Chair Barr told Bloomberg that current economic readings align with the Fed’s goal of getting to a 2% inflation target.  Even later, Collins spoke again, echoing Barr’s sentiments by saying there has been “promising news” lately on the economic data front but also said she would not take additional tightening off the table yet.  Finally, San Francisco Fed President Daly indicated patience was in order, with no need to hike or cut rates at the moment.  She said, “We can take our time to do it right.”  However, at the same time, Daly wanted to communicate the Fed’s “resolve” to get to the 2% target.

In stock news, union members at both STLA and F voted to ratify the UAW contracts that had been tentatively agreed in October.  This brings the UAW vs Big-3 saga to an end for another four years.   Elsewhere, DCI announced a 12 million share buyback program on Friday.  Later, Reuters reported that C employees now expect major layoffs and a management change announcement on Monday.  Meanwhile, the CEO of AI leader OpenAI (ChatGPT) announced he is stepping down Friday after the company board lost confidence in his direction.  (It is worth noting that MSFT is the largest shareholder of OpenAI and controls multiple board seats.)  Later, the CFO of NKLA resigned after less than a year on the job, saying he “wished to pursue other interests.” After the close, Reuters reported that GM is continuing its on-street testing of Cruise robotaxis in Dubai and Japan, despite parking its entire fleet in the US.  Also after the close, AMZN announced it would be cutting “several hundred” jobs from its Alexa voice assistant unit, citing a greater focus on AI (which presumably can provide the same service).

In stock government, legal, and regulatory news, the CFPB handed Wall Street banks a rare win from the consumer protection agency.  The CFPB proposed cracking down on Big Tech firms by regulating electronic payment and “digital wallet” providers such as AAPL, GOOGL, and PYPL.  This is a boon for V, MA, JPM, C, BAC, WFC, and other more traditional payment processors.  At the same time, DRMA received FDA approval on the protocols to be used for a phase III study of their acne treatment. Later, the Financial Times reported that NOC is pulling out of a competition to supply the UK military with narrowband military satellite communications.  Meanwhile, PAYC was hit with a class action lawsuit.  The suit alleges that the company and its executives made misleading statements about one of its products leading to be surprised by a significant miss on its Q3 report.  Later, the NASDAQ announced that MDRX is under investigation due to its failure to submit financial documents, including its FY2022 Annual and Quarterly reports as well as Quarterly reports in 2023.  After the close, the FDA flagged insufficient data in voting 12-1 against an MRK late-stage drug for chronic cough.

Overnight, Asian markets were mixed but leaned toward the green side.  Hong Kong (+1.86%) was way out front with South Korea (0.86%) a distant second leading the way higher.  Meanwhile, Japan (-0.59%), Singapore (-0.42%), Malaysia (-0.26%), and India (-0.19%) were the only losing exchanges.  In Europe, we see a similar picture taking shape at midday.  The CAC (+0.15%) leads the more plentiful green list while the DAX (-0.28%) and FTSE (-0.29%) pace five losing exchanges in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed, flat start to the day.  The DIA implies a -0.03% open, the SPY is implying a +0.02% open, and the QQQ implies a +0.12% open at this hour.  At the same time, 10-year bond yields are back up to 4.482% and Oil (WTI) is up 1.5% to $77.05 per barrel in early trading.

There is no major economic news scheduled for Monday.  The major earnings reports scheduled for before the open are limited to NIU.  Then, after the close, A, BRBR, CENT, CENTA, KEYS, TCOM, and ZM report. 

In economic news later this week, on Tuesday we get October Existing Home Sales, FOMC Meeting Minutes, and the API Weekly Crude Oil Stock Reports.  Wednesday, Oct. Core Durable Goods Orders, Oct. Durable Goods Orders, Weekly Initial Jobless Claims, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and EIA Weekly Crude Oil Inventories are reported.  There is no major economic news scheduled for Thursday with markets and Federal agencies closed for Thanksgiving.  Finally, on Friday, we get S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI.

In terms of earnings reports later this week, on Tuesday we hear from ANF, AEO, ADI, BIDU, BBY, BURL, CAL, DKS, DY, IQ, J, KSS, LOW, MDT, NJR, YSG, ADSK, GES, HPQ, JWN, NVDA, and URBN.  On Wednesday, DE reports.  There are no reports on Thursday.  Finally, on Friday we hear from HTHT.

In miscellaneous news, Elon Musk’s mouth has him in trouble again.  Last week he made a comment widely seen as antisemitic.  This has caused another mass exodus (see what I did there?) of major advertisers from his renamed Twitter platform.  This includes AAPL, DIA, IBM, WBD, LGF.A, ORCL, CMCSA, PARA, etc.  One analyst told Bloomberg Friday that this hit has likely taken that company down to about one-third the value it had when he bought it just over a year ago.  Then, on Saturday, a major investor in TSLA called for the board to place Musk on leave “for a month or two.”  Elsewhere, in bad news for climate change deniers, the USDA has been forced to revise the national Plant Hardness Map (map indicating what plants can be grown in each area).  The entire country shifted a bit more toward tropical with half the country shifting an entire zone since 2012.  This is a result of the climate being 2.5 degrees warmer on average than it was a decade ago.

With that background, it looks like all three major index ETFs are looking to continue their consolidation…at least based on their premarket candles. All three are flat and have printed small, indecisive candles at this point of the early session. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls are in control of both the short-term and 4-5-month trend. In terms of extension, the T-lines (8emas) are now catching up with all three major index ETFs. However, the T2122 indicator has now back up in the upper end of its overbought range. So, we have some slack to work with but we are still leaning toward the need of pause or pullback. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened lower on Thursday but then proceeded to put in a nothing day.  The SPY “gapped” down 0.10%, the DIA opened 0.18% lower, and the QQQ gapped down 0.21%.  However, as mentioned, the rest of the day was a sideways meander in all three major index ETFs, crossing and recrossing the gap and never straying too far away from it at either the peaks or valleys.  This action gave us indecisive, white-body, Spinning Top candles in the SPY, DIA, and QQQ.  (The QQQ had the largest of the bodies.)   The SPY could also be seen as a Bullish Engulfing candle if you squint.  All three remain well above their T-line (8ema) and 50sma.  This happened on average volume in the DIA, and below-average volume in the SPY and QQQ.

On the day, eight of the 10 sectors were in the red with Energy (-2.00%) way out front leading the way lower while Utilities (+0.44%) held up far better than any other sector.  At the same time, the SPY gained 0.12%, DIA lost 0.07%, and QQQ gained 0.09%.  The VXX fell more than 1.5% to close at 18.85 and T2122 dropped back down into its mid-range at 66.67.  10-year bond yields dropped to 4.443% and Oil (WTI) plummeted 4.87% to close at $72.93 per barrel.  So, Thursday was a holding pattern with markets waffling sideways all day.  We were able to relieve some over-extension by marking time (giving the T-line time to make up ground), which was greatly needed.  However, for the most part, it was just an indecisive pause day in a Bullish rally.

The major economic news reported Thursday included the October Month-on-Month Export Price Index, which came in far below expectation at -1.1% (compared to a forecast of -0.5% and far below the September value of +0.5%).  At the same time, the October Month-on-Month Import Price Index also came in far below anticipated at -0.8% (versus a forecast of -0.3% and far below the September reading of +0.4%).  Both of these show that inflationary pressures are falling, despite the narrative of some.  Meanwhile, Weekly Initial Jobless Claims were greater than predicted at 231k (which was a three-month high, compared to a forecast of 220k and far above the prior week’s 218k).  At the same time, The Philly Fed Mfg. Index was reported better than expected but still showing deteriorating conditions at -5.9 (versus a -9.0 forecast and a -9.0 previous reading).  Later, October Month-on-Month Industrial Production came in lower than predicted at -0.6% (compared to a forecast of -0.3% and far below the Sept. value of +0.1%).  On a year-on-year basis, Oct. Industrial Production was down 0.68% well below the Sept. reading of -0.16%.  (It should be noted, that the UAW strikes had a not insignificant impact on the October Industrial Production.)  Then, at the close, Sept. TIC Net Long-Term Transactions fell by $1.7 billion (massively below the forecast of +$89.4 billion and the Aug. value of +$62.2 billion).  Finally, after the close, the Fed Balance Sheet continued to fall with a current value of $7.815 trillion (down $46 billion from the prior week’s $7.861 trillion).

In stock news, RWT announced Thursday that it had signed a long-term contract from TM to supply the Japanese carmaker’s new NC plant with EV battery materials.  RWT expects to provide enough battery materials to supply 1 million EVs per year with a long-term goal of multiplying that by five (5 million vehicles per year). At the same time, Reuters reported that LLY had agreed to invest $2.19 billion to build a German plant to produce products, addressing a supply chain weakness identified by the COVID pandemic.  Later, after a long and harrowing vote, UAW members ratified the union’s deal with GM.  Attention shifts to F, whose vote ends Friday, and then STLA where the vote ends on Tuesday.  Speaking of GM, the company suspended its Cruise robo-taxi unit employee equity program.  Elsewhere, NTRS announced that it has been chosen to manage COST’s $29 billion retirement plan.  At the same time, TW announced it had acquired algo trading firm r8fin for an undisclosed amount in a deal that will close in 2024.  Later, AMZN announced it would sell HYMTF (Hyundai) cars online starting in 2024.  At the same time, employees at hundreds of SBUX stores walked off their jobs during a store promotional event Thursday, demanding improved staffing and better schedules.  Later, FUJHY (Subaru) is the latest carmaker to raise the wages of its employees and improve healthcare and other benefits following the UAW deals with the big 3 automakers.  After the close, Bloomberg reported that after already delaying its attempt to replace QCOM modem chips with “internally designed” (read “stolen and reverse engineered”) for a year, AAPL now appears likely to miss its latest revised goal of Q2 2025 for the project.  At this point, Bloomberg reported late Q4 2025 looks more likely.  In addition, in a reversal of company tradition going back to its inception, AAPL has again agreed to use industry standards.  This time, it will adopt the industry standard messaging protocol after stubbornly refusing for years.  This will make AAPL to Android messaging much easier and smoother.

In stock government, legal, and regulatory news, FMC was hit with a class-action lawsuit on behalf of investors.  The suit alleges the company failed to disclose critical information about legal defeats and weakening patent protections.  Across the pond, CRSP and VRTX have both achieved milestones in the UK, gaining conditional approval for their gene-edited treatment for sickle cell anemia. At the same time, the Portuguese sister subsidiary of ATUS announced it has found violations during its internal probe after a summer corruption scandal.  Later, the Wall Street Journal reported that regulators are pushing WFC to improve its internal monitoring to detect financial crime at the banks as the company faces a lawsuit alleging it allowed a Las Vegas attorney to operate a Ponzi scheme.  Elsewhere, perhaps in response to political pressure (or perhaps in response to sexual misconduct charges against the FDIC Chair), the FDIC unexpectedly and abruptly canceled a planned meeting on Thursday where the topic was to be a special bank fee on large banks to cover the costs of the March bank failures.  (The cancellation came 15 minutes after the start of the meeting.)  At the deadline, AMZN and TikTok both said they would appeal the EU designation as “gatekeeper” platforms.  (MSFT, AAPL, and GOOGL did not challenge the designation, which brings additional regulatory compliance requirements.)  Later, MS agreed to pay a settlement of $6.5 million to a group of states over negligence that led to a data breach covering millions of customers.  After the close, Reuters reported that according to three sources, AMAT is under US criminal investigation for evading export restrictions on shipments to China via South Korea.  At the same time, bankrupt RAD filed suit against the US Dept. of Justice in the hope of ending a lawsuit against the company for its responsibility in opioid abuse.  Meanwhile, the US ended the evidence phase of its antitrust lawsuit against GOOGL.  At the same time, a US judge rejected bids to dismiss several hundred cases, saying that Kia and HYMTF must face suits claiming they are responsible for auto thefts due to negligence and refusal to change software widely seen as easy to hack (YouTube how-to videos describe it in-depth.)

After the close, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, POST, ROST, and WWD all reported beats on both the revenue and earnings lines.  Meanwhile, MATW, UGI, and ZTO all missed on revenue while beating on earnings.  It is worth noting that GPS and UGI lowered their forward guidance.

Overnight, Asian markets were mixed again but leaned toward the down side.  Hong Kong (-2.12%) was by far (by 1.50%) the biggest loser while Japan (+0.48%) led the five (of 12) gaining exchanges.  In Europe, things are much more bullish as only Russia (-0.21%) is in the red at midday.  The CAC (+0.79%), DAX (+0.78%), and FTSE (+0.82%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed start to the day.  The DIA implies a +0.23% open, the SPY is implying a +0.17% open, but the QQQ implies a -0.06% open at this hour.  At the same time, 10-year bond yields are down again to 4.408% and Oil (WTI) is up 1.37% to $73.88 per barrel in early trading.

The major economic news scheduled for Friday includes Oct. Building Permits and Oct. Housing Starts (both at 8:30 a.m.).  Friday is also options expiration day in the market.  The major earnings reports scheduled for before the open include ATKR, BJ, and SPB.  There are no major earnings reports scheduled for after the close. 

In geopolitical news, China and the US continued to “make nice” on Thursday.  Both sides expressed that there does not need to be conflict with China saying it is not trying to supplant the US as the world’s leading economic power.  Both also said that the two can be both cooperative and competitive.  However, the relations are and will remain an “uneasy coopetition” as President Biden said he stood by previous comments that Xi is a dictator and China stood by claims the US is the aggressor in the relationship.  Meanwhile, in the Middle East, the Israeli offensive in Gaza continues.  On Thursday, the IDF invaded the largest hospital in Gaza, claiming to have found weapons caches and the entrance to a “Hamas tunnel.”  It was reported overnight that the release of 50 more hostages held by Hamas (a deal brokered by Qatar) is being held up.  The point causing the delay is that Israel only wants to provide enough of a cease-fire for the 50 civilians to be transferred out of Gaza, while Hamas wants a 3-day truce in return for that exchange.  In related news, Ukraine is suffering from a severe reduction in the amount of ammunition being supplied to it.  Ukraine’s Western supporters have fallen victim to political theatre in their own countries (meaning politicians feeling the need to express support for Israel by making Israeli military aid the priority).  While the IDF will gladly accept all this largess, the truth is they had more than enough weapons and ammunition to wipe Gaza off the map in their stockpile prior to the Hamas atrocity back in October.  So, Russia is the beneficiary of the Western response to the Hamas terror attack.

In encouraging miscellaneous news, Freddie Mac reported that the average 30-year fixed-rate mortgage loan rate fell to a two-month low this week at 7.44%.  The agency noted a decrease in inflation leading to the decline.  (The 15-year fixed-rate mortgage also fell to 6.76%, down from 6.81% the prior week.)  Elsewhere, the American Farm Bureau reported that the cost to prepare Thanksgiving dinner will be 4.5% LOWER this year than in 2022.  The group’s survey found that seven of the 11 ingredients of their “standard Thanksgiving meal” are lower priced than they were in 2022, including a 5.6% decrease in Turkey prices. Overall, it is looking like the naysayers of Fed actions were wrong, both prices and inflation are falling, and a soft landing may well still be in the cards at this point.

So far this morning, SPB reported a beat on both the revenue and earnings lines.  At the same time, BJ missed on revenue while beating on earnings.  Unfortunately, ATKR missed on both the top and bottom lines.  It is worth noting that SPB has lowered its forward guidance.

With that background, it looks like all three major index ETFs are looking to make a small gap higher to start off Friday. All three are trading higher at this point with SPY and QQQ printing white-bodied candles during the early session while DIA gapped more but is printing a black premarket candle. All three candles are small at this point, indicating not a lot of conviction. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. The downtrend going back to summer has also been well-broken in all three charts. So, the Bulls are in control of both the short-term and 4-5-month trend. This is all on the strength of a dramatic rally over two weeks. In terms of extension, all three major index ETFs remain a bit stretched above their T-line (8ema). At the same time, the T2122 indicator has now dropped back into its mid-range. So, we may still have room to run in either direction, but more of a pause of pullback would definitely be healthy for the rally. With that said, keep in mind that the market can remain overbought longer than you can last predicting a reversal too soon. Finally, remember this is Friday, payday, and time to prepare your account for the weekend news cycle. On top of that, this is an Options Expiration Friday, so don’t be surprised by some volatility.

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

The market gapped higher and then was divergently indecisive on Wednesday.  The SPY opened 0.28% higher, the DIA gapped up 0.24%, and the QQQ opened 0.52% higher.  At that point, the QQQ wandered around below and returned to its opening level.  Meanwhile, SPY meandered back and forth around its opening level and DIA meandered above its open.  All that changed at about 11:30 a.m. when DIA began a slow, steady rally that lasted the rest of the day.  At the same time, QQQ sold off until 1:20 p.m. (recrossing its gap and prior close in the process) before rallying back into the gap and bobbing along the prior close the rest of the day.  And for its part, SPY traded sideways, briefly retested the opening gap, and returned to a sideways grind along the open before dropping back into the gap the last 20 minutes.  This action gave us a gap-up, black-bodied. Spinning Top in the SPY, a gap-up, black-bodied large-body Spinning Top in the QQQ, and a gap-up, white-bodied Spinning Top in the DIA.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (0.89%) out front leading the way higher while Energy (-0.42%) lagged well behind the other sectors.  At the same time, the SPY gained 0.16%, DIA gained 0.49%, and QQQ gained 0.08%.  The VXX fell more than 2% to close at 19.15 and T2122 backed off just a bit but remains deep in overbought territory at 96.43.  10-year bond yields climbed to 4.543% and Oil (WTI) dropped 2.2% to close at $76.53 per barrel. So, Wednesday was another in the two-week string of bullish says.  This one is more indecisive than most as we get extended from the T-line (8ema).  This was the least we could expect after such a strong bullish showing on Tuesday.  It is also worth noting that all three major index ETFs had lower-than-average volume, with SPY having significantly lower volume.

The major economic news reported Wednesday included Oct. Month-on-Month Core PPI, which came in much better than expected at 0.0% (versus a forecast of +0.3% and a Sept. reading of +0.2%).  At the same time, the headline Oct. Month-on-Month PPI was dramatically lower than expected at -0.5% (compared to a forecast of +0.1% and a September value of +0.4%).  In addition, Oct. Month-on-Month Core Retail Sales came in stronger than predicted at +0.1% (versus the -0.2% forecast but still well below the Sept. +0.8%). The headline Oct. Month-on-Month Retail Sales fell 0.1% (compared to a forecasted fall of 0.3% and down a full percent from September’s +0.9%).  At the same time, the NY Empire State Mfg. Index was much stronger than anticipated at 9.10 (versus a -2.80 forecast and a -4.60 September value).   Later, September Business Inventories held steady at 0.4% (the same as the forecast and prior reading).  However, September Retail Inventories were a bit higher than expected at +0.4% (versus the +0.3% forecast but still better than the August +0.5% value).  Later, the EIA Weekly Crude Oil Inventories showed a larger-than-predicted inventory build of 3.600 million barrels (compared to a forecast of +1.793 million barrels but still far lower than the prior week’s +13.869 million barrels).

In stock news, MFC said Wednesday it will buy London-based alternative credit manager CQS for an unspecified amount.  (CQS had $13.5 billion in assets under management as of Oct. 31.)  At the same time, regulatory filings showed that BRKB has liquidated its entire GM (22 million shares) and ATVI positions.  BRKB also began a SIRI position by purchasing 10 million shares.  All this was during Q3.  Elsewhere, TM announced that its Camry (best-selling car in the US) will go all-hybrid in the 2025 model year.  Later, MSFT announced it is releasing its own AI chips (MSFT designed but made by other companies).  The new chip (Maia) will be used to power MSFT’s subscription for $30/mo. “Copilot” AI service.  MSFT said the chip will become available in 2024.  At the same time, CZNS (the 28th largest mortgage lender in the US) announced the closure of its wholesale mortgage lending channel.  CZNS cited declining mortgage volumes and intense competition in the announcement.  Later, SNES announced a reverse stock split, effective at the close on Nov. 16.  The board has not yet decided on the specifics but it will be between 1-for-2 and 1-for-12 shares. 

In stock government, legal, and regulatory news, NATO announced Wednesday that it will replace its aging fleet of 14 AWACS planes with a military version of the BA 737.  The deal of an unspecified value (billions) will be signed in 2024.  Later, AWKFN was given UK approval for a second phase of clinical trial on its severe alcohol Use Disorder treatment.  Later, a bipartisan group of US Senators asked META for documentation related to senior executives’ knowledge of mental and physical health harm associated with its platform before Nov. 30.  Meanwhile, NY state sued PEP, accusing the company of polluting the environment through its single-use plastic wrappers and containers.  At the same time, the FDA (which declined to approve the drug in January of 2022) noted concerns about the data MRK provided on its chronic cough drug.  The FDA said the data might not be enough to prove meaningful benefit.  Overseas, the French Supreme Court upheld serious charges but revised the previous $2 billion penalties against UBS for money laundering and illegal customer solicitation.  The move mandates a new trial at the Paris Court of Appeals to determine the correct damages.  In Greece, both JNJ and CL were fined for violating that country’s profit-cap law prior to the end of 2021 (COVID period).  This follows the same type of fines levied on UL on Nov. 2.  After the close, Reuters reported that ADBE will open remedy discussions with the EU in order to get its acquisition of Figma approved.

After the close, CSCO, CPA, JJSF, PANW, SNEX, and TTEK all reported beats on both the revenue and earnings lines.  However, MMS missed on both the top and bottom lines.  It is worth noting that CSCO lowered and PANW raised forward guidance.

Overnight, Asian markets were mixed but leaned toward the red side on the strength of moves.  Hong Kong (-1.36%), Shenzhen (-1.23%), and Shanghai (-0.71%) led the region lower while India (+0.46% paced the gainers.  In Europe, only two of the 15 bourses are in the green at midday.  The CAC (-0.46%), DAX (+0.31%), and FTSE (-0.49%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a lower start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.19% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields are down to 4.504% and Oil (WTI) is off another percent to $75.86 per barrel in early trading.

The major economic news scheduled for Thursday includes the Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 a.m.), Oct. Industrial Production (9:15 a.m.), and the Fed’s Balance Sheet (4:30 p.m.).  We also hear from Fed member Williams (9:25 a.m.), Fed Governor Kroszner (10 a.m.), Waller (10:30 a.m.), and Mester (noon).  The major earnings reports scheduled before the open include BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, and WSM.  Then, after the close, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO report. 

In economic news later this week, on Friday we get Oct. Building Permits and Oct. Housing Starts.  Friday is also options expiration day.

In terms of earnings reports later this week, on Friday we hear from ATKR, BJ, and SPB.

In miscellaneous news, Chinese President Xi Jinping met with President Biden on Wednesday.  The meeting was mostly symbolic although the two countries agreed to high-level military-to-military contacts.  (However, the top Chinese military posts, Minister of Defense and Head of the Chinese Army are both vacant at the moment.)  China also agreed to take action to curb fentanyl chemical export in exchange for sanctions relief on a Chinese state security agency.  Later, Xi was schmoozed at dinner by the CEOs of BLK, BX, MSFT, C, V, XOM, TSLA, PFE, QCOM, AVGO, and others hoping to curry favor at a $40,000/plate dinner.  Elsewhere, the Senate was scheduled to vote on the stop-gap CR to avert a government shutdown Wednesday night.  Leaders of both parties support the House bill. However, a single Senator could cause a shutdown by requiring procedural moves that would prevent a vote before Saturday. (In late-breaking news, the Senate did overwhelmingly approve the bill and has now sent it to President Bibden’s desk for signature to avert the government shutdown until at least January.)

In UAW news, oh what a difference a day makes. Just a day after it seemed on the brink of failure, the union’s contract with GM is now on the verge of approval.  More than 60% of GM’s huge Arlington TX plant approved the contract.  This increased the approval margin to 54% vs 46% opposed, giving approval a 2,500 vote lead with only nine facilities left to vote.  (GM voting ends Thursday at 4 p.m. Eastern, but the majority of votes have already been cast.)   Approval of the F contract is ahead with 66% in favor of approval (the F vote ends Friday, but again, most votes have already been cast) and STLA approval is essentially a lock with 72% voting in favor with that vote scheduled to end next Tuesday.

So far this morning, BABA, ARCO, BBWI, M, NICE, WMT, and WMG have all reported beats on both the revenue and earnings lines.  Meanwhile, BERY, DDL, DOLE, and NTES all missed on revenue while beating on earnings.  On the other side, PLCE, ONEW, and SIEGY all beat on revenue while missing on earnings.  Unfortunately, BV missed on both the top and bottom lines.  It is worth noting that BBWI and BERY both lowered their forward guidance.  However, M and NICE both raised their guidance.  

With that background, all three major index ETFs are trading lower in the premarket session and have printed black-bodied candles that are now at or near the early session lows. The SPY, DIA, and QQQ all remain well above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend, and the bullish breakout of consolidation is still in play. All three also remain significantly above the downtrend line going back to summer. In other words, the longer-term downtrend remains broken. So, the Bulls are back in control of the longer-term trend on the strength of a hard rally of the last two weeks. In terms of extension, all three major index ETFs are still stretched far above their T-line (8ema). At the same time, the T2122 indicator is at the top end of its overbought territory. So, we are definitely still in need of at least a rest, if not a pullback soon. With that said, remember the market can remain overbought longer than you can last predicting a reversal too soon.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday saw the Bulls run after a better-than-expected CPI report. SPY gapped 1.37% higher, DIA opened 1.16% higher, and QQQ gapped up 1.72%.  All three major index ETFs followed through for the first hour or two.  At that point, all three began to slowly take profits, melting back toward the opening levels until 2 p.m.  Then we saw a strong and steady rally that took all three to the highs of the day at about 3:20 p.m. in the SPY, DIA, and QQQ.  From there, we saw more profit-taking the rest of the day.  This action gave us huge gap-up, white-bodied candles in all three major index ETFs.  The DIA printed a Spinning Top, the QQQ gave us sort of a large-body Spinning Top, and the SPY printed a large-body white candle with an upper wick.  (QQQ also gave us the highest close since mid-July.)  This all happened on average volume in all three major index ETFs.

On the day, all 10 sectors were in the green with Utilities (+4.19%) out in front leading the way higher while Energy (+1.20%) lagged behind the other sectors.  At the same time, the SPY gained 1.94%, DIA gained 1.41%, and QQQ gained 2.15%.  (It’s worth noting that IWM was up a massive 5.45%.)  The VXX fell 0.76% (not as much as many would have thought) to close at 19.56 and T2122 shot up to the top of its overbought territory at 97.11.  10-year bond yields climbed dropped hard to 4.451% and Oil (WTI) was flat at +0.08% to close at $78.34 per barrel.  So, Tuesday wasn’t even a fight.  The major index ETFs gapped strongly higher, followed through (never testing the gap), and even after a little profit-taking put in the strongest day since April.   

The major economic news reported Tuesday included October Core CPI, which came in lower than expected at +0.2% month-on-month (compared to a forecast and Sept. values of +0.3%).  On a year-on-year basis, October Core CPI was also lower than was anticipated at +4.0% (versus a forecast and September reading of +4.1%).  At the same time, the headline year-on-year October CPI came in below predictions at +3.2% (compared to a forecast of +3.3% and much better than the Sept. value of +3.7%).  On a month-to-month basis, the October CPI was dead flat at 0.0% (versus the forecast of +0.1% and much better than September’s +0.4% reading).  On top of all of this, note that the Bureau of Labor Statistics changed the way it estimates the cost of healthcare.  So, these readings are about 0.1% higher than they would have been if they were calculated using last month’s method.  In other words, inflation fell more than the decrease indicated above. Finally, after the close, the API Weekly Crude Oil Stocks report came in at +1.355 million barrels (compared to a forecasted build of 1.400 million barrels but far lower than the prior week’s +11.900 million barrels).

In Fed Speak news, early Tuesday, FOMC Vice-Chair Jefferson (a hawk) told a European conference that “monetary policymakers may need to take more forceful action to keep inflation expectations anchored.”  (However, he was speaking to European central bankers and did not specify that his remarks were related to the US.)  At the same conference, St. Louis Fed President Bullard (an ultra-hawk) warned that despite a period of “nice disinflation” the battle against inflation is not yet won.  He pointed out that in the US, the PCE Inflation number has only fallen to 3.7%, which is still well above the Fed’s 2% target number.  (To be clear, both presentations were made hours before the CPI data was released.  However, both may well have had the numbers prior to release.)

In stock news, RENB and GEDiCube Intl. have agreed to a merger and will now be called Renovaro.AI.  (This is the first merger of an AI company with a biotech firm.) At the same time, BXD announced it had agreed to sell its 45% interest in two MA properties for $1.66 billion.  (The properties are in a biotech hotspot populated by MRNA among others and one of the properties has been pre-leased by AZN although still under construction.)  Later, PFE announced it will cut 500 jobs in the UK as part of a $3.5 billion cost-cutting plan.  At the same time, JAZZ struck a deal with a spinoff from GSK (Autifony Therapeutics).  Under the deal, JAZZ will pay up to $770.5 million if Autifony develops two drugs according to schedule.  JAZZ would then take over the clinical testing, manufacturing, regulatory approvals, and commercialization of the drugs.  Elsewhere, RIVN revealed Tuesday that it will borrow $15 billion under a kind of “phantom bond” issued by its joint-development partner in order to pay for the construction of its GA production plant.  Later, ABNB announced plans to acquire GamePlanner.AI (and AI startup) for an undisclosed sum.  At the same time, Reuters reports that five sources tell it GS is strongly considering paying higher bonuses to top traders and dealmakers in order to prevent poaching by competitors.

In stock government, legal, and regulatory news, CTLT reported to the SEC that it is delaying its quarterly report due to taking an “impairment charge” of around $700 million related to acquisitions by its consumer health business.  (CTLT delayed its annual results several times earlier in the year, blaming production problems.)  The company told the SEC it would report on Wednesday instead of Tuesday.  Later, a NY judge narrowed the scope of WBD’s lawsuit against PARA over the streaming rights to the adult cartoon “South Park.”  At the same time, Reuters reported that ADBE will be given an EU antitrust warning in the next few days (related to its $20 bid to buy cloud-based platform Figma).  The move is reportedly intended to pressure ADBE to offer divestment remedies to appease European competitors.  Elsewhere, in a move that is contrary to what GOP-run states are doing, the ECB issued a stern warning to banks that operate in the Eurozone.  The warning, issued by the central bank’s vice-chair, told of significant penalties if the banks do not improve their Climate and Environment risk management.  At the same time, the US Dept. of Justice asked a judge to dismiss its suit brought against affiliates of UNH which had alleged the firms violated antitrust law by prohibiting employees from moving from one company to another.  In a side note to a case, investment bank BCS (Barclays) has begun telling clients it believes GOOGL will lose its antitrust case brought by the US Dept. of Justice related to their browser market practices, which the US alleges breach antitrust law.  Later, ACHR was hit with an investor lawsuit claiming the company misrepresented its electric VTOL aircraft.  In the same vein, investors filed suit against BCLI alleging the biotech company issued misleading statements about the prospects for its ALS drug.  Later, a US district judge in CA ruled against GOOGL, META, SNAP, and TikTok attempts to have a lawsuit dismissed.  The judge ruled the suit, which alleges the companies illegally enticed and addicted millions of teens to their platform causing the users mental health damage, can proceed.  (This ruling covers hundreds of suits that are likely to become a large single class action suit at some point.)  After the close, the FDA warned AMZN about the sale of seven unapproved eyedrops on the company’s platform, citing both unproven claims (false advertising) and health risks in the letter.  Also after the close, CHTR agreed to pay the SEC $25 million related to unauthorized stock buybacks between 2017 and 2021.

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

Overnight, Asian markets were green across the board (following Tuesday’s US rally).  Hong Kong (+3.92%), Japan (+2.52%), and South Korea (+2.20%) led that region higher but large gains were widespread with China being the laggard.  Meanwhile, in Europe, the bourses lean toward the green side but four of the 15 are still in the red at midday.  The CAC (+0.60%), DAX (+0.73%), and FTSE (+0.97%) lead the continent higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward another green start to the day.  The DIA implies a +0.24% open, the SPY is implying a +0.31% open, and the QQQ implies a +0.50% open at this hour.  At the same time, 10-year bond yields are back up a bit to 4.473% and Oil (WTI) is down 0.45% to $77.91 per barrel.

The major economic news scheduled for Wednesday includes Oct. Core PPI, Oct. PPI, and Oct. Retail Sales (all at 8:30 a.m.), Sept. Business Inventories and Sept. Retail Inventories (10 a.m.), and Weekly EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled before the open include AAP, CTLT, FI, GFF, JD, TGT, TCEHY, TJX, XPEV, and ZIM.  Then, after the close, SQM, CPA, MMS, PANW, and TTEK report. 

In economic news later this week, on Thursday, Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Oct. Industrial Production, and the Fed’s Balance Sheet are reported.  Finally, on Friday we get Oct. Building Permits and Oct. Housing Starts.  Friday is also options expiration day.

In terms of earnings reports later this week, on Thursday, we hear from BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, WSM, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO. Finally, on Friday we hear from ATKR, BJ, and SPB.

In government news, the US Postal Service reported a $6.5 billion net loss for the year ending September 30.  USPS revenue was down 0.4% as first-class mail volume fell to the lowest level since 1968.  Meanwhile, the US Dept. of Energy announced it plans to buy 1.2 million barrels of oil at an average price of $77.57/barrel to help replenish the Strategic Petroleum Reserve.  However, the bid government news is that the House passed Speaker Johnson’s phased “2 cliff” approach in a bipartisan 336-95 vote (with 209 of those votes coming from Democrats).  93 Republicans voted against the stop-gap bill.  (In October, the Speaker’s predecessor was ousted for working with the other side of the aisle.  However, the embarrassing three-week show of ineptitude following McCarthy’s ouster has given Johnson more leeway as the GOP is hesitant to go back through that Speaker selection process again.)  Johnson’s bill approach calls for no up-front cuts, extending current funding levels for military construction, veteran benefits, HUD, Agriculture, FDA, and Environmental programs until January 19. All other federal operations, including Defense, would have their current levels of funding expire on February 2.  President Biden announced that he would sign the bill if it is approved by the Senate.  That signal undoubtedly means Senate Democrats will likely pass the bill. Finally, it is worth noting that President Biden will meet with Chinese President Xi on the sidelines of an Asia-Pacific Economic Conference in San Francisco today. There are no planned outcomes from the meeting as both sides have downplayed expectations. However, anything is possible when the leaders of the two largest economies meet.

In miscellaneous news, while the overall vote count is still in favor of approving the deal, another plant (this one a GM facility in TN) narrowly voted against ratifying the UAW-Big3 tentative agreement.  Overall, approval is leading with 82% support at STLA, 65% support at F, but only 52% at GM (with just over 30% of total GM votes now cast).  Elsewhere, a study published by Boston Consulting covering 554 public companies across 20 sectors found that firms that allow remote work have had four times as much revenue growth as their counterparts with more stringent “work from the office” policies.  Finally, Bloomberg reports that Beijing is planning to offer at least $137 billion of low-cost financing for village renovation and affordable housing programs.  The idea appears to be both to stabilize the real estate sector and stimulate China’s economy through housing-sector construction projects.

So far this morning, TGT, TJX, and XPEV all reported beats on both the revenue and earnings lines.  TGT is particular is noteworthy with a massive earnings beat on only slightly increased sales.  (TGT comparable store sales declined for the second straight quarter.)  Meanwhile, AAP and CTLT beat on revenue while missing on earnings.  On the other side, JD missed on revenue while beating on earnings.  Unfortunately, ZIM missed on both the top and bottom lines.

With that background, all three major index ETFs gapped up to start the premarket session and have printed white-bodied candles that are now at or near the early session highs. The SPY, DIA, and QQQ all remain above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend and the bullish breakout of consolidation is still in play. All three have also significantly reduced (or erased) the distance to their summer highs. So, the Bulls are back in control of the longer-term trend on the strength of a hard rally the last two weeks. In terms of extension, all three major index ETFs are now stretched far above their T-line (8ema). At the same time, the T2122 indicator is in the top of its overbought territory. So, we are definitely in need of at least a rest, if not a pullback soon. With that said, remember the market can remain overbought longer than you can last predicting a reversal too soon.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets were essentially dead on Monday.  SPY gapped down 0.33%, DIA gapped down 0.19%, and QQQ gapped down 0.40%.  All three major index ETFs then took an hour to get their footing and then they rallied strongly until noon recrossing the opening gap in the SPY and QQQ and even more in the DIA.  The SPY, DIA, and QQQ all ground sideways in a tight range.  This action gave us white-bodied candles in all three.  The SPY gave us a white-bodied, Spinning Top, Harami.  Meanwhile, QQQ printed a white Doji Harami in the in the QQQ.  Finally, the DIA gave us a white candle with an upper wick.  This all happened on very low volume in all three major index ETFs.

On the day, six of the 10 sectors were in the red with Utilities (-0.76%) leading the way lower while Energy (+0.82%) held up much better than the other sectors. At the same time, the SPY lost 0.10%, DIA gained 0.16%, and QQQ lost 0.31%.  The VXX fell 1.10% to close at 19.71 and T2122 climbed again within its mid-range at 61.18. 10-year bond yields climbed slightly to 4.64% and Oil (WTI) jumped up 1.84% to close at $78.59 per barrel.  So, Monday saw a gap lower, a morning rally, and then a sideways slog the rest of the day. 

The major economic news reported Monday was limited to the October Federal Budget Balance, which came in with a larger deficit than expected at -$67.0 billion (compared to a forecast of $-65.0 billion but vastly better than the September reading of -$171.0 billion). 

In stock news, MGA announced it had reached a deal with Canadian autoworker union Unifor following a strike last week at one of their plants.   Later, AMP and CMA said they had formed a strategic partnership with CMA financial advisors offering AMP products and services.  Elsewhere, JOBY had the inaugural flight of its electric air taxi on Sunday.  The company is aiming to offer electric air-taxi service to NY City by 2025.  Later, HYMTF (Hyundai) announced they would hike wages at their AL factory by 25% by 2028 after the UAW deal with the Big 3 automakers.  At the same time, ENLC said it has begun operations at its North TX carbon capture and sequestration project. The project is planned to sequester 210,000 metric tons of CO2 annually.  Later, XOM made the announcement that it would begin producing lithium from surface wells by 2027.  (The company plans to build its operations to be the leading lithium producer in the world by 2030, supplying material for 1 million EV batteries per year.)  At the same time, AMZN cut 180 jobs in a second round of layoffs in under a week as it restructured its games division (part of its online streaming operations).  Meanwhile, STLA offered about half (6,400) of its US salaried workers (non-union) voluntary buyouts in an effort to cut costs amid its transformation toward electric vehicles.

In stock government, legal, and regulatory news, BLK said Monday that it was actively talking to the SEC, hoping to get standardized regulatory treatment for cryptocurrency ETFs.  (BLK has advocated for regulations that align with the approach used for Futures ETFs.)  Elsewhere, BA announced it is expanding capacity at its Huntsville, AL plant for production of Patriot missiles following increased orders from and authorized by the US Dept. of Defense.  Later, less than two weeks after a St. Louis Federal Court found the National Assn. of Realtors guilty of overcharging home sellers $1.78 billion in broker fees, a lawsuit was filed in NY against the Real Estate Board of NY.  The suit charges the board, including the two dozen brokerages it represents, have colluded to artificially inflate brokerage fees.  In the afternoon, EU governments and lawmakers reached a deal on targets for domestic supply of critical minerals like nickel, cobalt, magnesium, titanium, and lithium as a means of cutting reliance on China.  Later, a GOOGL expert witness told the company’s antitrust trial that the company’s multi-billion-dollar payments to AAPL and wireless carriers were “normal competitive behavior and not abuse.”  (Interestingly, it also came out that GOOGL also pays AAPL 36% of all ad revenue generated from searches in Safari browsers.  Bloomberg reporters said GOOGL’s chief litigator visibly cringed when that fact was testified to in court.)  At the same time, BA stock rose Monday after a report claimed that China is considering ending its freeze on purchases of the company’s 737 MAX jet.  China refused to comment on the report.  Finally, after the close, a federal judge has allowed a major class-action suit against “hair relaxer” chemical makers like LRLCY (L’Oreal), REVRQ (Revlon), and others to proceed.  The litigation includes more than 8,000 suits, which allege the companies used knowingly cancer-causing chemicals and caused other injuries.

After the close, ACM and SLF reported beats on both the revenue and earnings lines.  At the same time, LU missed on both the top and bottom lines.  It is worth noting that ACM raised its forward guidance.

Overnight, Asian markets were mixed but leaned toward the green side with only four of the 12 exchanges in the red.  South Korea (+1.23%) and Australia (+0.83%) led the gainers while India (-0.42%) was by far the biggest loser.  In Europe, we see a similar picture taking shape at midday with only 5 of the 15 bourses in the red.  Russia (-1.65%) is by far the biggest loser while Athens (+1.84%) is by far the biggest gainer.  However, the CAC (+0.15%), DAX (+0.46%), and FTSE (-0.34%) lead the region as usual on volume. In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.01% open, the SPY is implying a +0.08% open, and the QQQ implies a +0.25% open at this hour.  At the same time, 10-year bond yields are down a bit to 4.622% and Oil (WTI) is jus t on the red side of flat at $78.19 per barrel in early trade.

In a note related to CPI, the Government has changed the way it estimates health insurance costs.  This change is expected to slightly increase the CPI numbers this time and in the future.  (Or, if you prefer, the previous methodology was underestimating health insurance costs, thus artificially suppressing CPI.)

The major economic news scheduled for Tuesday includes October Core CPI and October CPI (both at 8:30 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include ARMK, AZUL, CAE, CSIQ, ENR, HD, IHS, SBH, SE, TME, and VIPS.  Then, after the close, NU reports. 

In economic news later this week, on Wednesday we get Oct. Core PPI, Oct. PPI, Oct. Retail Sales, Sept. Business Inventories, Sept. Retail Inventories, and Weekly EIA Crude Oil Inventories.  On Thursday, Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Oct. Industrial Production, and the Fed’s Balance Sheet are reported.  Finally, on Friday we get Oct. Building Permits and Oct. Housing Starts.  Friday is also options expiration day.

In terms of earnings reports later this week, on Wednesday, AAP, CTLT, FI, GFF, JD, TGT, TCEHY, TJX, XPEV, ZIM, SQM, CPA, MMS, PANW, and TTEK report.  On Thursday, we hear from BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, WSM, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO. Finally, on Friday we hear from ATKR, BJ, and SPB.

In miscellaneous news, the gang that attacked China’s biggest lender (causing trouble for a US bond auction) released a statement Monday saying that ICBC bank had paid a ransom after last week’s hack.  Reuters was unable to confirm that claim.  Elsewhere, the US Supreme Court took on the nature of the politicians that chose and approved them and announced its first-ever “code of ethics.” The code has no standards, no enforcement mechanism (beyond self-compliance by each justice), no penalties, and no increase in third-party reporting.  In short, it was intended purely as a political ploy to reduce public pressure and political interest in regulating their behavior.  However, it is big on platitudes and all nine justices voted in favor of the nothingburger.  Meanwhile, after the close, Reuters reported that JPM is telling its private clients to sell bonds and stocks, moving that money into commodities (oil in particular).  Finally, in an odd twist, Senate Majority Leader Schumer (Democrat) said he was encouraged by House Speaker Johnson’s two-cliff approach to a new CR.  Schumer’s rationale seems to be that “at least it doesn’t call for cuts yet.”  On the other side, the most extreme Republicans (such as Rep. Buck of TX) came out as hating the approach, telling reporters “We got nothing – nothing!”  He went on to say, “I certainly hope that this bill is not going to proceed as it’s currently structured.”

So far this morning, ARMK, ENR, HD, ONON, TME, and VIPS all reported beats to both the revenue and earnings lines.  Meanwhile, IHS beat on revenue while missing on earnings.  However, CSIQ and SBH missed on both the top and bottom lines.

With that background, it looks like all three major index ETFs are now looking to open just on the green side of flat. So far, all three are also giving us small, white-bodied, indecisive candles (more wick than body). That would seem to indicate Mr. Market is waiting on more information (probably the CPI). The SPY, DIA, and QQQ all remain above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend and the bullish breakout of consolidation is still in play. However, keep in mind that all three also remain 3%-4% below their summer highs. So, the Bears remain in control of the longer-term trend. However, those downtrend lines will be tested soon in the large-cap indices and have already been broken in the QQQ. In terms of extension, QQQ is the only major index ETF stretched above its T-line. At the same time, the T2122 indicator is in the top half of its mid-range. So, there is some room to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The Bulls said “not so fast” to the Bears Friday.  The SPY gapped up 0.46%, DIA gapped up 0.49%, and QQQ gapped up 0.45%.  At that point, all three major index ETFs followed through for 30 minutes, retraced for another 30 minutes, and then the Bulls were in charge the rest of the day.  All three major index ETFs closed very close to their highs for the day.  This action gave us large gap-up, white-bodied candles in the SPY, DIA, and QQQ, breaking out of the recent range with strength.  This took place on slightly lower-than-average volume in all three.

On the day, all 10 sectors were in the green with Technology (+2.30%) way out front (by more than 1%) leading the way higher while Consumer Defensive (+0.11%) lagged behind the other sectors. At the same time, the SPY gained 1.56%, DIA gained 1.16%, and QQQ gained 2.25%.  The VXX plummeted 4.04% to close at 19.93 and T2122 shot back up but remained in the center of the mid-range at 57.80. 10-year bond yields fell slightly to 4.622% and Oil (WTI) jumped up 1.98% to close at $77.25 per barrel. So, Friday was the Bulls’ Day from start to finish.  This gave us the second straight week of gains in quite a while.

The major economic news reported Friday included Michigan Consumer Sentiment, which came in lower than expected at 60.4 (compared to a forecast of 63.7 and a previous reading of 63.8).  At the same time, Michigan Consumer Expectations also came in below what was anticipated at 56.9 (versus the 59.5 forecast and a prior value of 59.3).  However, Michigan 1-year Inflation Expectations were higher than predicted at 4.4% (compared to a forecast of 4.0% and a previous reading of 4.2%).  Finally, the Michigan 5-year Inflation Expectation also came in hot at 3.2% (versus a forecast of 3.0% and a prior value of 3.0%).

In Fed speak news, San Francisco Fed President Daly said Friday that it is still too early to say whether the Fed has done enough hiking.  Daly told CNBC, “(Fed policy) is in a very good place” and “the news on inflation has been fairly good.”  She continued, “all of that said, it is far too early to declare victory.”

In stock news, the US Air Force’s B-21 “Raider” bomber built by NOC took its first flight Friday.  The $750 million per flying wing plane achieved its first unscripted step toward production.  (The USAF plans to buy 100 of the jets.)   Elsewhere, Reuters reported that the US cattle herd is at the lowest level in decades, following years of drought that had burnt off pasture land.  This is causing the need for the US to import a record amount of beef.  The article claimed this shift is causing significant margin pressure on companies like TSN. Later, WYNN reached a tentative deal with the hospitality workers union just hours ahead of the union’s scheduled strike.  (CZR and MGM reached deals with the same union earlier in the week.)  The deal covers 5,000 WYNN employees at Las Vegas properties. At the same time, Reuters reported that Chinese electric vehicle maker NIO is still debating whether it will enter the North American market in 2025.  The company is a leading force in the Chinese EV market, but building cars in China for import into the US amid trade tensions has given the company pause.  HMC raised worker pay by 11% after the UAW deal with the “Big 3” automakers.  Despite this, the UAW has targeted HMC, TM, and TSLA workforces as targets for union organizing.  Meanwhile, MULN announced it has secured a former KHC food manufacturing plant and warehouse for the production of its electric vehicles.  Later, a GM assembly plant in Flint MI, narrowly voted AGAINST ratifying the tentative deal between the UAW and GM.  (51.8% of workers at that plant voted against the deal.)

In stock government, legal, and regulatory news, PXMD announced that it had given the FDA new study data indicating their drug had made significant progress against African Sleeping Sickness.  Later, Reuters reported that three sources tell them that EU countries and the EU Parliament are set to agree on “light touch” rules for ABNB next week.  This less aggressive approach to regulation is a stark contrast to the EU approach to other tech firms.  Elsewhere, BKNG has agreed to pay $100.25 million to settle a tax dispute with Italy.  Later, Reuters reported that LUV now expects FAA certification of BA’s 737 MAX 7 plane by April 2024, which will allow the airline to start flying the planes in October or November of that year.

After the close, STNE reported beats on both the revenue and earnings lines. So far this morning, FTRE reported beats on both the revenue and earnings lines.  At the same time, TSN missed on revenue while beating on earnings.  However, HSIC missed on both the top and bottom lines. It is worth noting that FTRE raised its forward guidance while TSN lowered its guidance.

Overnight, Asian markets were mixed but leaned to the red side.  Hong Kong (+1.30%) and Taiwan (+0.94%) were far out front leading the gainers while Singapore (-0.91%) was by far the biggest of the more plentiful losers.  However, in Europe, with the single exception of Athens (-0.07%), we find green across the board at midday.  The CAC (+0.36%), DAX (+0.25%), and FTSE (+0.63%) lead that region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modest red start to the day.  The DIA implies a -0.10% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.24% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.632% and Oil (WTI) is just on the green side of flat at $77.27 per barrel in early trading.

The major economic news scheduled for Monday is limited to the Federal Budget Balance (2 p.m.).  The major earnings reports scheduled for before the open include FTRE, HSIC, and TSN.  Then, after the close, ACM, LU, and SLF report. 

In economic news later this week, on Tuesday, Oct. Core CPI, Oct. CPI, and API Weekly Crude Oil Stocks are reported.  Then Wednesday we get, Oct. Core PPI, Oct. PPI, Oct. Retail Sales, Sept. Business Inventories, Sept. Retail Inventories, and Weekly EIA Crude Oil Inventories.  On Thursday, Oct. Export Priced Index, Oct. Import Price Index, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Oct. Industrial Production, and the Fed’s Balance Sheet are reported.  Finally, on Friday we get Oct. Building Permits and Oct. Housing Starts.

In terms of earnings reports later this week, on Tuesday, we hear from ARMK, AZUL, CAE, CSIQ, ENR, HD, IHS, SBH, SE, TME, VIPS, and NU.  Then Wednesday, AAP, CTLT, FI, GFF, JD, TGT, TCEHY, TJX, XPEV, ZIM, SQM, CPA, MMS, PANW, and TTEK report.  On Thursday, we hear from BABA, ARCO, BBWI, BERY, BV, DDL, DOLE, M, NICE, WMT, WSM, QFIN, AMAT, BZH, CPRT, GPS, GLOB, HI, MATW, POST, ROST, UGI, WWD, and ATO. Finally, on Friday we hear from ATKR, BJ, and SPB.

In Chinese economic news, that country’s “Singles Day” holiday (invented by BABA) ended at midnight Saturday night.  BABA reported that it made year-over-year growth in sales for the event. Meanwhile, rival platform JD reported record sales volume for that holiday.  Reuters reports that industry analysts found sales increased by 2.08% compared to 2022 up to $156.40 billion.  (For reference, event sales grew 2.9% between 2021 and 2022.)  In other China economic news, Reuters reported Sunday that the most recent data (through September) showed a 38.2% year-on-year increase in loans given to the country’s manufacturing sector.  This compares to a slight -0.2% decrease in loans to the Chinese property sector.  While the slight decline in loans to Real Estate developers might track (given the widely-known troubled nature of that sector), the nearly 40% increase in loans to manufacturing was very surprising. Analysts seem to think this is a strategic top-down decision made by Beijing (building the country’s high-tech manufacturing capacity instead of driving domestic consumption).  For example, forecasts say China will soon be able to meet the entire world’s demand for lithium-ion batteries by itself.  However, this is all complicated by the fact that the demand of the rest of the world cannot absorb this added capacity.  As a result, this Chinese investment choice is (to the extent tariffs and trade agreements allow) likely to be disinflationary for the entire world…at least among high-end manufactured goods.

In miscellaneous news, on Friday, MCO changed its outlook on the US credit rating to “negative” from “stable” while maintaining its credit rating at “Aaa.”  The agency cited deficits, rising interest rates (cost to service debt), a lack of measures to reduce spending or increase revenues, and political brinksmanship as contributing factors to their change in outlook.  (The current budget continuing resolution expires on Friday.)  In a related story, on Saturday, Speaker of the House Johnson unveiled the House GOP plan for a partial CR aimed at making the MAGA extremists happy.  The approach calls for splitting the budget for political purposes.  Johnson’s idea kicks the can on some portions of the budget until Jan. 19, while the rest is kicked down the road until Feb 2.  Paired with this is a “poison pill” that calls for dramatic cuts if either of the deadlines are missed, which is what MAGA extremist wanted in the first place.  (The idea behind this is that it puts the pressure on non-extremist portions of the House, Senate, and the President to agree to MAGA budget demands by the deadlines or the default is that MAGA gets the cuts it wants.)  Obviously, that idea is dead on arrival in the Senate and at the Whitehouse. Then on Sunday, some of the MAGA types decided even that was not enough, telling the political shows they would vote against this plan because it does not give them the up-front budget cuts they want.  For what it is worth, neither the House nor Senate versions of a CR will request funding for Israel, Ukraine, or for increased border protection funding.  So, all sides seem to have agreed those issues will be considered as extraordinary funding and not part of the budget. (Although, I am not sure how you can explain expansions on border patrol manpower and facilities as a one-off rather than a part of normal government operations.) 

With that background, it looks like all three major index ETFs are now looking to open inside the top of Friday’s large white candle. So far, all three are giving us small, white-bodied, indecisive candles (more wick than body) inside of those big Friday candles. The SPY, DIA, and QQQ all remain above their T-line (8ema) and 50smas (although it is also worth noting that DIA printed a “death cross” of the 50sma and 200sma Friday). So, the Bulls still have control of the short-term trend and the bullish breakout of consolidation is still in play. However, keep in mind that all three also remain 3%-4% below their summer highs. So, the Bears remain in control of the longer-term trend. However, those downtrend lines will be tested soon in the large-cap indices and has already been broken in the QQQ. In terms of extension, QQQ is the only major index ETF stretched above its T-line. At the same time, the T2122 indicator is in its mid-range. So, there is some room to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, markets opened higher with SPY gapping up 0.26%, DIA gapped up 0.26%, and QQQ gapped up 0.20%.  At that point, all three major index ETFs wove their way sideways until 11:55 a.m.  From there, all three headed South with a hard move lower at 1 p.m. (when a poor 30-year bond auction was apparently caused by a hack of a major Chinese bank, which is normally a big bond buyer).  DIA hit its lows at 2:45 p.m. followed by the SPY and QQQ at 3 p.m.  All three then traded in a tight range the rest of the day.  This action gave us large, black-bodied candles in all three.  The SPY and QQQ both printed what could be seen as Evening Star signals while the DIA just gave us a large black candle.  This happened on average volume in the DIA and QQQ while that SPY gave us less-than-average volume.

On the day, nine of the 10 sectors were in the red with Healthcare (-2.26%) out in front leading the way lower while Energy (+0.07%) held up better than the other sectors, barely holding onto green territory.  At the same time, the SPY lost 0.78%, DIA lost 0.59%, and QQQ lost 0.77%.  The VXX gained 3.85% to close at 20.77 and T2122 fell again but remained at the low end of the mid-range at 26.04. 10-year bond yields rose to 4.634% and Oil (WTI) fell slightly to close at $75.54 per barrel. So, Thursday broke the streak of higher closes in the SPY and QQQ, as well as giving us the second straight lower close in the DIA.  

The only major economic news reported Thursday was Weekly Initial Jobless Claims, which came in slightly higher than expected at 217k (compared to a forecast of 215k but still slightly down from the prior week’s 220k).  Then, after the close, the Fed Balance Sheet again came in down just a bit from the previous week at $7.861 trillion (down from $7.867 trillion the prior week).

In Fed speak news, Richmond Fed President Barkin (hawk) and Atlanta Fed President Bostic (dove) both spoke at a New Orleans event.  Both seemed to indicate that the economy has not yet fully absorbed the impacts of the previous FOMC rate hikes.  In his remarks, Bostic again said he believed the Fed policy is already restrictive enough to curb inflation and warned that there could be some “economic instability” ahead as the economy fully feels the previous Fed hikes.  For his part, Barkin predicted a coming economic downturn and said his forecast had not expected the strong Q3 growth.  He argued that an economic slowdown is necessary to stop price-setters from continuing to raise prices.  Later, Fed Chair Powell told an IMF conference in Washington that he and his Fed colleagues are encouraged by the slowing pace of inflation but are still not sure they have done enough to keep that slowing momentum going. He said, (the Fed is committed to a 2% rate of inflation target), but… “we are not confident that we have achieved such a stance.”  Powell went on to say inflation remains “well above” where they would like to see it but also described the Fed policy as “significantly restrictive.”  Above all, Chairman Powell tried to warn investors not to expect rate cuts in 2024 (as many still predict).  Finally, he said, “We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening.”

In stock news, UNH announced Thursday that it is transitioning eight insulin products to tier 1 status (least expensive).  Those products are made by LLY, NVO, and SNY.  At the same time, TDG announced it is buying a components and subsystem business from private company CPI for $1.39 billion.  Later MGM announced it has reached a tentative deal with the hospitality workers union, less than 24 hours ahead of a strike by 25,470 Las Vegas employees.   (CZR reached a deal earlier and WYNN has not yet reached an agreement.)  Elsewhere in the entertainment industry, the Screen Actors Guild reached a deal with studios such as DIS, PARA, NFLX, WBD, FOX, and AMZN ending the 118-day strike. Later, software company BILL issued a statement seeking to quash the rumors that it is in negotiations to be acquired.  At the same time, FSR revealed is negotiating with five different carmakers in the hope of attaining additional production capacity in the hope of launching two additional models by 2025.  Later, Reuters reported that NVDA plans to release three new chips aimed at the Chinese markets.  Less than a month after US officials tightened rules on export to China, NVDA has reworked the product designs of their AI chips to skirt the restrictions.  At the same time, XOM said it has acquired a floating production and storage facility from SBFFY for $1.26 billion.  Later, UAL announced it is revamping its loyalty program tied to CCF credit cards with changes taking effect on January 1.  Meanwhile, Reuters reports that GS is working on a dozen different projects to incorporate AI into its business practices.  After the close, TKO announced that major shareholder McMahon plans to sell 8.4 million shares in a secondary offering for $713.16 million.  Also after the close, BKNG announced it would begin booking cruises.  In addition, NFLX and WBD announced they are partnering with VZ to offer a $10/month streaming combination (versus the old price of $17/mo.).

In stock government, legal, and regulatory news, early Thursday, the NHTSA said that TSLA is recalling 159 Model S and Model X cars.  At the same time, AAPL suffered a setback related to its $14 billion tax bill in the EU.  An advisor to the EU’s top court said that a lower court had made legal errors when ruling in favor of AAPL and the top court should review the case on whether AAPL owes Ireland $14 billion.  Later, the Bulgarian Parliament approved a $1.5 billion purchase of Stryker fighting vehicles from GD.  At the same time, a US bankruptcy court ruled that Scandinavian airline SAS could receive a $450 million loan from private firm Castlelake.  The funds will be vital to repaying APO, which is the debtor-in-possession of the airline.  After the close, AAPL agreed to pay $25 million to the Dept. of Justice to settle claims that the company has illegally favored lower-wage immigrant workers over US and green-card-holding people.  Of this, $6.75 million are penalties and the $18.25 million will go to an unspecified number of discrimination victims.  After the close, a US judge approved the $290 million JPM settlement with victims of disgraced and deceased financier Epstein.

After the close, DTEGY, HOLX, LNW, LGF.A, NWSA, RBA, STN, TTD, and WYNN all reported beats on both the revenue and earnings lines.  Meanwhile, CANO beat on revenue while missing on earnings.  On the other side, FLO, ILMN, MTD, VYX, and NGL all missed on revenue while beating on earnings.  Unfortunately, CPRI, TPC, and U missed on both the top and bottom lines.  It is worth noting that ILMN lowered its forward guidance.  

Overnight, Asian markets were nearly red across the board.  Only India (+0.15%) held on to green territory while Hong Kong (-1.76%) Thailand (-1.10%), and Singapore (-0.91%) led the region lower.  In Europe, we do see red across the board at midday.  The CAC (-1.11%), DAX (-0.78%), and FTSE (-1.28%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed start to the day.  The DIA implies a +0.16% open, the SPY is implying a +0.05% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-year bond yields are back down slightly to 4.606% while Oil (WTI) is up 1.33% to $76.74 per barrel in early trading.

The major economic news scheduled for Friday are limited to Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  However, there were some last-minute Fed speaking engagements including Logan, Bostic, and Daly. The major earnings reports scheduled for before the open are limited to AQN.  Then, after the close, STNE reports. 

So far this morning, TOELY and DWAHY reported beats on both the revenue and earnings lines.  However, AQN missed on revenue while reporting in line with expectations on earnings.

In miscellaneous news, a hacking and ransomware attack on Chinese ICBC bank stopped it and others from participating in the US 30-year bond auction.  In turn, the lack of Chinese buyers caused soft demand and spooked US markets Thursday afternoon.  Back in the US, the Fed’s semiannual supervision report said that it was keeping a close tab on banks (related to rising interest rates and commercial real estate losses).  Despite some concerns, the report said the overall banking system remains sound and most lenders remain well-capitalized.  Unrelated to this, the Bank of England said Friday that the UK’s 50 largest banks will be subjected to a stress test that imagines a scenario worse than 2022’s shock to the gilt market.

With that background, it looks like all three major index ETFs are now looking to open up a bit from the Thursday close. All three are giving us white-bodied, indecisive candles (more wick than body) inside of Thursday’s black candle. The SPY, DIA, and QQQ all remain above their T-line (8ema) and 50smas (although the SPY and DIA are close to retesting those averages). So, the Bulls still have control of the short-term trend, even after pulling back from the recent impressive Bull run. However, keep in mind that all three also remain 4%-5% below their summer highs. So, the Bears remain in control of the longer-term trend. In terms of extension, none of the major index ETFs are stretched from their T-line. At the same time, the T2122 indicator is in its mid-range (the bottom of that range). So, there is some room to run in either direction. Bear in mind that this is Friday. So, pay yourself by taking some profits and prepare your account for the weekend news cycle. This might include, lightening up, buying insurance (puts/calls) on individual positions, or hedging your overall account.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Wednesday was another indecisive day in the Market.  SPY gapped up 0.14%, DIA gapped up 0.15%, and QQQ gapped up 0.11%.  From that point, all three major index ETFs put in a gradual morning selloff, reaching the low of the day at noon, followed by a gradual afternoon rally.  This action gave us indecisive candles in all three.  The SPY and QQQ both printed Doji candles while the DIA printed a black-bodied Spinning Top.  All three remain above their T-line (8ema) as well as their 50sma.  This came on well below-average volume in the SPY, DIA, and QQQ.

On the day, eight of the 10 sectors were in the red with Energy (-1.44%) again out front leading the way lower while Technology (+0.28%) was again trying to pull the rest of the market higher by holding up best.  At the same time, the SPY gained 0.07%, DIA lost 0.12%, and QQQ gained 0.06%.  The VXX fell another 1.9% to close at 20.00 and T2122 fell again but remained in the middle of its mid-range at 41.67.  10-year bond yields fell again to 4.492% and Oil (WTI) plummeted another 2.25% to close at $75.63 per barrel.  So, Wednesday gave us a ninth-straight day of gains in the QQQ, eighth-straight in the SPY, and the first lower close in nine days in the DIA.  However, again this was another low-volume and indecisive day as the rally seems to be losing steam (particularly in the large-cap index ETFs).

The only major economic news reported Wednesday was a change in forecast by the EIA.  The agency now forecasts a 300k barrel-per-day decrease in total petroleum consumption in the US by year-end.  Previously, the EIA had forecast a 100k barrel-per-day increase in petrol consumption by the US by year-end.

In Fed speak news, FOMC Chair Powell spoke at a Fed Research and Statistics Div. 100-year anniversary celebration Wednesday.  In his remarks, Powell emphasized the need for economic forecasting and models to be agile given unpredictable global events.  Reuters also reported that NY Fed President Williams spoke at the same celebration as Powell.  Williams lauded recent research and statistics improvements by the Fed, which he said three decades ago was all about the “here and now” (tactical view), but after a large transformation now allows the FOMC to make longer-term and more strategic decisions.  Later Reuters reported that the Cleveland Fed has officially begun the search for a successor to current branch President Mester who retires next June.  (Mester has held the Cleveland Fed Presidency since 2014.)   After the close, Fed Vice-Chair Jefferson indicated to a gathering that he favors erring on the side of doing too much (on inflation) versus not doing enough.  In prepared remarks, Jefferson said, “If (inflation) expectations were to begin to drift, the reality or expectation of a weak monetary policy response would exacerbate the problem.”

In stock news, the CEO of STLA said Wednesday that the next new model from Chrysler will be an electric crossover vehicle.  Elsewhere, FTS announced Wednesday that it has completed a $500 million private placement of senior unsecured notes.  Later, CZR announced it had reached a tentative 5-year deal with the Culinary Worker Union, averting a potential strike by 10,000 employees at its nine Las Vegas locations.  However, potential strikes are still pending against MGM and WYNN properties in Las Vegas.  Later, SPR announced plans to raise $200 million by issuing more class A common stock.  At the same time, AMZN announced it has begun cutting jobs in its Music division.  However, AMZN would not confirm the number of layoffs.  Later, NVO announced it would discontinue its long-lasting insulin Levemir.  The discontinuation will be phased, beginning in January and lasting through 2024.  The company cites other alternative insulins available and manufacturing constraints as the reason.  (NVO also offers other basal insulin drugs such as Tresiba.)  At the same time, LMND announced it has reached the two million customer milestone (after achieving 1 million in late 2020).  Later, META announced it would require advertisers to disclose when AI is used to create or alter political, social, or election-related ads on Facebook and Instagram. 

In stock government, legal, and regulatory news, Reuters reported Wednesday that C has agreed to pay $25.9 million to settle charges from the CFPB related to allegations of discrimination against Armenian-Americans on credit card applications based solely on the applicant’s last name.  Later, the NHTSA announced that GM is recalling nearly 1,000 Cruise driverless robotaxis after one of the vehicles dragged a pedestrian during an accident in October.  At the same time, TGT asked an FL judge to dismiss a shareholder lawsuit that alleged the company had ignored potential risks of offering LGBTQ merchandise during Pride Month.  The company claims the allegations are completely without merit and have nothing to do with the stock, but are instead just the expression of the plaintiff’s disagreement with the company decision.  (The plaintiff is a front for a nonprofit run by long-time anti-progressive activist and former advisor to the ex-President, Stephen Miller.)  Later, KO announced Wednesday it is withdrawing two soft drinks in Croatia in response to Croatian state inspection authorities’ orders after batches of the products were suspected of causing illnesses.  Meanwhile, Reuters reports that GOOGL will be asked to explain measures taken to protect children in line with EU rules.  (This is related to YouTube and the report says TikTok faces the same inquiries.)  Later, LLY received both US and UK approval for its Zepbound weight-loss drug.  The drug will compete with wildly successful Wegovy from NVO.  (Analysts expect that niche to be a $100 billion annual market by the end of the decade.)

After the close, ALTG, AMC, APP, CENX, DIT, GNW, HUBS, JXN, KGC, MFC, MGM, SPNT, TTEC, TWLO, VSAT, and DIS all reported beats on both the revenue and earnings lines.  Meanwhile, ATO, BGS, CTVA, ENS, G, MATV, SU, and MODG all missed on revenue while beating on earnings.  On the other side, AE, AFRM, JAZZ, TTWO, and LYFT all beat on revenue while missing on earnings.  Unfortunately, ASH, FLT, HP, and UHAL missed on both the top and bottom lines.  It is worth noting that ALTG, APP, HUBS, LYFT, and TWLO raised their forward guidance.  However, MODG and TTEC both lowered their guidance.

Overnight, Asian markets were mixed again with Japan (+1.49%) by far (by more than 1%) the biggest mover.  On the downside, Thailand (-0.48%) paced the losses followed by Malaysia (-0.37%).  Meanwhile, in Europe, the bourses lean heavily to the green side with only three of 15 exchanges in red at midday.  The CAC (+0.76%), DAX (+0.44%), and FTSE (+0.45%) lead that region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed and flat start to the day.  The DIA implies a +0.13% open, the SPY is implying a +0.10% open, and the QQQ implies a -0.06% open at this hour.  At the same time, 10-year bond yields have rebounded to 4.543% and Oil is up 0.45% to $75.67 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims (8:30 a.m.), WASDE Ag Report (noon), and Fed Chair Powell speaks again at 2 p.m.  The major earnings reports scheduled for before the open include AEE, MT, BDX, CLMT, TAST, COMM, DBD, EPC, GLP, GRAB, HBI, HE, HBM, IHRT, KELYA, LI, EYE, NOMD, ACDC, RCI, SN, SCSC, SONY, SLVM, TPR, TDG, USFD, WRK, WWW, and YPF.  Then, after the close, CANO, CPRI, FLO, HOLX, ILMN, LNW, MTD, NWSA, NGL, PBR, RBA, STN, TTD, TPC, U, and WYNN report. 

In economic news later this week, on Friday, 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 Friday, AQN, AU, and STNE report.

Ping An Insurance Group to take over China’s largest private property developer Country Garden.  The Chinese State Council instructed provincial governments to arrange the rescue of Country Garden by Ping An.  However, Reuters also reported that Ping An spokesman categorically denied it has been asked to do so.  Elsewhere, NERC said that more than half of the people in North America (180 million) could face electricity shortages this coming winter during extreme cold periods due to a lack of natural gas infrastructure.  In somewhat related news, TX passed a state constitutional amendment to create a $10 billion fund to improve the reliability of the state’s energy-generating infrastructure.  (However, this will have no impact this coming winter.)

So far this morning, MT, BDX, TAST, CTTAY, CRARY, EPC, GRAB, LI, EYE, NOMD, RCI, SN, TDG, and WWW all reported beats on both the revenue and earnings lines.  At the same time, AZN, DDS, SLVM, TPR, USFD, WB, and WRK reported revenue misses while beating on earnings.  On the other side, AVAH and BAK reported beats on the revenue line while missing on earnings.  Unfortunately, COMM, GLP, HBI, and SONY missed on both the top and bottom lines.  It is worth noting that HBI lowered its forward guidance while LI, EYE, and NOMD raised their own guidance.

With that background, it looks like more indecision this morning as the premarket opened not far from the prior close and have printed small candles with mostly wicks so far in the early session. All three major index ETFs remain well above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend, even though we are consolidating. Keep in mind that all three still remain 4%-5% below their summer highs. So, the Bears remain in control of the longer-term trend. In terms of extension, the T-line is catching up to the DIA and even the SPY. However, the QQQ remains a bit stretched above its T-line. At the same time, the T2122 indicator is back in its mid-range. So, there is some room to run in either direction. Be aware of potential volatility from the Jobless Claims before the open and Chair Powell’s speech in the afternoon.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday was another bullish day in the market.  The SPY opened flat, DIA “gapped” down 0.09%, and QQQ gapped up 0.25% at the open.  At that point, all three major index ETFs made a morning rally, with QQQ by far the strongest.  Then after 11 a.m., all three meandered sideways in a fairly tight range the rest of the day, all of the ending on a down wave.  This action gave us white-bodied candles in the SPY, DIA, and QQQ with SPY and DIA printing a Spinning Top and QQQ printing a larger-body candle.  It is worth noting all three are at or have just broken through a potential resistance level.  All three also remain well above their T-line (8ema) although the consolidation in DIA is helping alleviate extension a bit.  This all happened on well-below-average volume in the SPY, DIA, and QQQ.

On the day, six of the 10 sectors were in the red with Energy (-2.36%) leading the way lower while Technology (+1.06%) pulling the rest of the market higher.  At the same time, the SPY gained 0.28%, DIA gained 0.95%, and QQQ gained 0.15%.  The VXX fell another 0.41% to close at 20.39 and T2122 fell again but remained in the middle of its mid-range at 48.88.  10-year bond yields fell to 4.571% and Oil (WTI) plummeted 4.19% to close at $77.45 per barrel.  So, Tuesday gave us a seventh-straight day of gains in the SPY and DIA and the eighth day of gains in the QQQ.  However, again this was another low-volume and indecisive day in the large-caps while things were more bullish in the QQQ. 

The major economic news reported Tuesday included September Exports, which came in higher than August at $261.10 billion (compared to an August value of $255.40 billion).  At the same time, September Imports were also up at $322.70 billion (versus the August value of $314.10 billion).  Together, these gave us a Sept. Trade Balance that came in higher than expected at -$61.50 billion (compared to a forecast of -$59.90 billion and an August reading of -$58.70 billion).

In Fed speak news, Minneapolis Fed President Kashkari again said the Fed may need to do more in a Bloomberg interview Tuesday morning.  Kashkari said, “When activity continues to run this hot, that makes me question if policy is as tight as we assume it currently is.”  He continued, “So if you saw inflation tick back up and you saw continued very strong economic activity in the real side of the economy that would tell me we might need to do more.”  However, shortly afterward, Chicago Fed President Goolsbee told CNBC that the Fed is making progress and reiterated that he continues to see the US as being on a “golden path” where inflation comes down without a recession or much of a slowing.  Goolsbee said, “Over the next couple of months, we might equal the fastest drop in inflation in the last century.”  Goolsbee continued, “So we’re making progress on the inflation rate … and as long as we’re making progress, as I’ve been saying for a while, the moment of arguing how high should the (policy) rate go is going to fade to how long should we keep rates at this level as inflation is coming down.” Later, Fed Governor Waller told a St. Louis Fed seminar (talking about the Q3 GDP data), “This was an outstanding quarter…this big blowout number.”  He continued, “Everything was booming.  So, this is something we are keeping a very close eye on when we think about policy going forward.”

In stock news, on Tuesday TM informed its dealers that it is reducing production at its joint venture plants in China.  Originally, TM had planned to reduce production in Oct. and Nov.  However, the announcement said production will now be reduced through February as the company tries to reduce an inventory glut.  Later, UAW members working for GD voted to approve the tentative contract agreement reached in October. At the same time, CNHI announced plans to delist in Italy and maintain a single listing on the NYSE as of Jan. 2, 2024.  In addition, CNHI announced a new $1 billion share buyback plan.  Later, Reuters reported that NFE had terminated a joint project with Mexican energy company Pemex to develop a deep-water LNG project in the Gulf of Mexico.  (The same project was canceled in 2016 as being too expensive before being revived in 2019.)  Elsewhere, STLA announced plans to retire its V-8 Hemi engine in Ram pickup trucks starting in 2025 as it moves toward hybrid and electric versions of the truck.  Later, TSLA reported a “notable increase” in new car registrations in China.  The report showed 14,000 insurance registrations of TSLA cars in China for the week ending Nov. 5 versus 10,800 the prior week.  After the close, Reuters reported that sources tell it that GS intends to “offload” the GM credit card business.  Also after the close, Bloomberg reported that AAPL has halted development of software for iPhones, iPads, Macs, and other devices so that developers can focus on finding glitches and bugs in the existing code.  This rare move came after a proliferation of bugs have been reported in recent months.

In stock government, legal, and regulatory news, JNJ announced Tuesday that it will seek FDA clearance for its Ottava robotic surgery system in 2024.  This comes after delays caused by technical issues and COVID-19 disruptions.  (If approved, JNJ’s system will compete with the ISRG and MDT robotic surgery systems.)  Across the pond, the UK government revealed upcoming legislation that will make automakers (not individual vehicle owners) liable for any accidents that happen when self-driving is engaged.  This came at the urging of the insurance industry and may auger events to come in the US.  Back in the US, the CFPB proposed a new rule Tuesday that could extend the agency’s reach to cover nonbank digital wallet providers such as AAPL, GOOGL, and PYPL.  At the same time, GE did settle with the Dept. of Justice for $9.4 million over allegations of selling uninspected and out-of-spec parts to the US Army and Navy.  Elsewhere, by a 2-1 vote, the 9^th Circuit Court of Appeals upheld an injunction on the state of CA, preventing them from requiring businesses to warn consumers that the active ingredient in MON’s Roundup weedkiller causes cancer.  Later the FTC sent a letter to ABBV, AZN, and TEVA saying the agency will dispute 110 patents the companies have filed with the FDA to prevent competitors from selling similar products. 

After the close, AKAM, DVA, DVN, EC, GILD, IAC, JHX, JKHY, KD, MBC, OXY, PRI, PRIM, RXT, and TOST all reported beats on both the revenue and earnings lines.  At the same time, AMRK, CIVI, COTY, CPNG, EBAY, PLUS, EXR, MOS, PR, RIVN, and STE beat on revenue while missing on earnings.  On the other side, AEL, BHF, CAPL, FG, FNF, GO, GXO, IOSP, MASI, HOOD, MRC, TKO, and VTRS missed on revenue while beating on earnings.  Unfortunately, ANDE, DAR, DOOR, OVV, PAAS, and SNBR missed on both the top and bottom lines.  It is worth noting that DVA, EBAY, and JKHY raised their forward guidance.  However, GO, MASI, and SNBR lowered their forward guidance.

Overnight, Asian markets were mixed with Singapore (-1.39%) and South Korea (-0.91%) pacing the seven losing exchanges while Taiwan (+0.33%), Australia (+0.26%), and Thailand (+0.25%) lead the five gaining exchanges.  Meanwhile, in Europe, we see a similar mixed picture at midday.  The CAC (+0.13%), DAX (-0.09%), and FTSE (unch) are typical of the region in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a similar flat and mixed start to the day.  The DIA implies a +0.01% open, the SPY is implying a -0.03% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.587% and Oil (WTI) is down another nine-tenths of a percent to $76.69 per barrel in early trading.

The major economic news scheduled for Wednesday are limited to EIA Crude Oil Inventories (10:30 a.m.).  We also hear from Fed Chair Powell (9:15 a.m.) as well as Fed member Williams (1:40 p.m.).  The major earnings reports scheduled for before the open include ADNT, BIIB, GIB, CRL, CCO, SID, EDR, GTN, IBP, BEKE, K, MIDD, NFE, NYT, NXST, ODP, PTEN, PFGC, PLTK, PSNY, RL, RPRX, REYN, RBLX, SEAS, FOUR, SWX, SPTN, STWD, SHOO, TRP, TEVA, UAA, UWMC, VSH, WBD, and KLG.  Then, after the close, AE, AFRM, ALTG, AMC, APP, ASH, ATO, GBS, ATG, CENX, CTVA, ENS, FLT, G, HP, HUBS, JXN, JAZZ, KGC, LYFT, MFC, MATV, MGM, SU, TTWO, MODG, TTEC, TWLO, UHAL, VSAT, and DIS report. 

In economic news later this week, on Thursday, we have the Weekly Initial Jobless Claims, WASDE Ag Report, and Fed Chair Powell speaks again.  Finally, on Friday, 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 AEE, MT, BDX, CLMT, TAST, COMM, DBD, EPC, GLP, GRAB, HBI, HE, HBM, IHRT, KELYA, LI, EYE, NOMD, ACDC, RCI, SN, SCSC, SONY, SLVM, TPR, TDG, USFD, WRK, WWW, YPF, CANO, CPRI, FLO, HOLX, ILMN, LNW, MTD, NWSA, NGL, PBR, RBA, STN, TTD, TPC, U, and WYNN report.  Finally, on Friday, AQN, AU, and STNE report.

In miscellaneous news, the NY Fed reported Tuesday that US credit card debt has now topped $1 trillion to reach a record $1.08 trillion at the end of Q3.  That amounted to a $154 billion increase year-over-year.  It is worth noting that the average annual rate for US credit cards is not over 20% (also an all-time high).  Elsewhere, the Mortgage Brokers Assn. reported that the rate of the average US mortgage plunged by a quarter of a percent last week from 7.86% to 7.61%.  As a result, mortgage demand picked up with refinance loan applications rising 2% for the week and new home purchase loan applications increasing 3% versus the prior week.  Overall loan applications were up 2.5% on the week.

So far this morning, ADDYY, BIIB, EDR, GIB, CRL, CRZBY, FOUR, EONGY, ICL, BEKE, KNBWY, ADRNY, NYT, REYN, TEVA, and SHOO all reported beats on both the revenue and earnings lines.  Meanwhile, GTN, NFE, and PTEN all beat on revenue while missing on earnings.  On the other side, MIDD, ODP, PFGC, SEAS, STWD, and UAA missed on revenue while beating on earnings.  Unfortunately, ADNT, CCO, PLTK, RPRX, and SPTN missed on both the top and bottom lines.

With that background, it looks like yet again Mr. Market is undecided early in the day. The Premarket started flat and mixed in all three major index ETFs. From that point, all three have printed small, indecisive, and mixed-color candles during the early session. All three remain well above their T-line (8ema) and 50smas. So, the Bulls still have control of the short-term trend. Keep in mind that all three remain 4%-5% below their summer highs. So, the Bears remain in control of the longer-term trend. In terms of extension, all three remain a bit stretched from their T-line but the T2122 indicator has dropped back into its mid-range. So, while there is some room to run in either direction, the market remains in need of a pause or pullback to relieve extension. Remember that we’ve had quite a string of gains in a row. So we’re stretched to the upside. (However, also remember that the market can stay stretched longer than we can stay afloat knowing it has to turn soon.) So, be aware of that potential volatility.

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.

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