Friday gave us the gap lower at the opening bell on what most attributed to fear over a strong payroll report (fear it will lead the Fed to more hikes).  We opened down 0.57% in the SPY, down 0.30% in the DIA, and down 0.81% in the QQQ.  After an hour of grinding along the lows (and a little lower in the DIA), the Bulls ripped the face off of the Bear chasers.  This resulted in a strong rally in all three major index ETFs until just after noon and then a slow further rally to the highs at about 2:45 p.m.  At that point, all three just ground sideways and a bit lower into the close.  This action gave us strong white-bodied Bullish Engulfing candles in the SPY, DIA, and QQQ.  All three crossed back above their T-line (8ema), barely in the DIA, strongly in the QQQ, and somewhere in between those two on the SPY.

On the day, nine of the 10 sectors were in the green with Technology (+2.03%) far out ahead (by three-quarters of a percent) leading the way higher.  Meanwhile, Consumer Defensive (-0.31%) lagged behind the other sectors. At the same time, the SPY gained 1.19%, DIA gained 0.88%, and the tech-heavy QQQ gained 1.68%.  VXX fell 1.25% to close at 23.64 and T2122 climbed up out of the oversold territory into the lower end of the mid-range at 29.94.  10-year bond yields spiked to close at 4.797% while Oil (WTI) gained a bit more than half of a percent to end the day at $82.79 per barrel.  So, we saw a Bullish whipsaw after a significant open lower.  Some analysts believe this was just largely a short covering rally.  While I tend to be in this camp, short covering does not necessarily count out a bottom.  For example, all three major index ETFs put in above-average volume (far above average in the QQQ) on Friday.  Absolute Breadth also increased slightly.  

The major economic news reported Friday included the September Avg. Hourly Earnings (month-on-month) which came in the same as the August increase at +0.2%.  This is a bit better than expected compared to a forecast of +0.3%.  The September year-on-year Avg. Hourly Earnings also came in just a touch better (from a Fed standpoint) than forecast at +4.2% (versus the +4.3% forecast and +4.3% August reading).  At the same time, September Nonfarm Payrolls came in extremely hot a +336k (compared to a forecast of +170k and the August value of +227k).  There were also big upward revisions to both the July and August job creation numbers.  Likewise, September Private Nonfarm Payrolls were also extremely hot at +263k (versus the +160k forecast and the +177k August reading).  The Sept. Participation Rate remained steady at 62.8%.  Still, even with the massive number of jobs created, the Sept. Unemployment Rate remained steady at 3.8% (compared to a 3.7% forecast and the 3.8% August reading).  As always, interpretation is everything.  The bears (and largely out of the White House party) thought these numbers were a dire warning to the Fed that they MUST hike rates massively and relentlessly to avoid Armageddon.  On the other hand, the bulls (and the party in the White House) see the data as validation that the economy is creating a huge number of jobs while inflation keeps slowly ticking lower.  In short, everything is rosy.  I will leave it to you to decide how you see the data.  For myself, I am between the two extremes but lean toward the latter interpretation.  Either way, I fully expect the Fed to do what they have been saying and signaling for months…hike once more this year and then hold steady, most likely through Q3 of next year.

Speaking of the Fed, Cleveland Fed President Mester (typically a hawk) commented on the Payrolls report Friday in an interview with CNN.  Mester said, “With this one report, [the data] continues to say it’s a strong labor market, but it is getting a little bit less tight than we saw before … We also in that report saw that wage growth is tempering a bit.”  She went on to characterize the overall economy as “economic growth has been strikingly strong and yet we’re still making progress on inflation.”  She continued “We are basically at or near” the peak of the tightening campaign and the main question is how long the Fed should keep rates high to bring inflation back to 2% by the end of 2025.”

In Autoworker contract talks and strike news, the UAW did not widen its strike on Friday.  The UAW reported that the last-minute counter-offer from GM made a major concession as the automaker agreed to include EV battery plants in their UAW offer.  In addition, GM raised their wage increase offer to 23% (surpassing the F and STLA offers).  North of the border, Unifor (UAW equivalent in Canada) says that GM is fighting key elements of the recent F contract agreed and approved by the union to avoid a strike.  The key issues are GM’s classification of full-time employees as temporary contract workers (avoiding higher wages and benefits), health allowances for retirees, and product investment commitments.  The Unifor strike deadline for GM is Monday night at midnight.

In stock news, MGM clarified its report of “significant” impacts on Q3 profits from the cyber-attack back in September.  On Friday, the company said that they estimate the revenue lost is $110 million (which was less than some analysts had feared).  Elsewhere, to add insult to injury, a day after a Commerce Dept. investigation was announced (into the percentage of staff that comes from the US) TSM now faces a labor cost threat from a coalition of 14 unions who say the company is stalling negotiations.  Elsewhere, AMZN announced that its first two Kuiper satellite internet network satellites were launched Friday at 2 p.m.  (Kuiper will compete with Elon Musk’s SpaceX.)  At the same time, AMGN announced it had completed the $27.8 billion acquisition of HZNP.  Late in the day, Reuters reiterated what was reported here before the open Friday, saying that XOM is now in advanced talks to purchase PXD in a deal that could be over $60 billion.  At the same time, T faced rumors Friday late that it is considering divesting its 70% ownership of DirecTV (purchased for $16 billion in 2021).

In stock government, legal, and regulatory news, the UK said the SNAP AI Chatbot may pose a privacy risk for children.  However, the UK Information Commissioner’s Office said it will consider a company reply before deciding whether or not to ban the service in UK.  Later, the US Treasury Dept. issued new EV tax credit guidance on Friday.  The change will allow consumers (as of January) to transfer their $7,500 (new EV) or $4,000 (used) tax credit directly to the dealership.  This will mean a de facto price reduction for electric vehicles. At the same time, the USDA announced that bird flu was detected in a commercial flock of turkeys, the first infection discovered since April.  This comes just as CALM announced that egg prices are down 48% from a year ago (as of September).  Elsewhere, a recall of nearly 10k 2023 electric vehicles by NSANY (Nissan) was announced by the NHTSA.  The recall is related to defective inverter software that could lead to vehicle shutdowns.  After the close, a US District Judge ruled that SBUX must disclose its anti-union spending in efforts to quash a union in Buffalo, NY.  The US Labor Dept. NLRB had demanded the data during its investigation and SBUX had refused.  Also after the close, HEINY (Heineken) had its Brazilian brewery added to the government’s list of companies it says are responsible for labor practices analogous to slavery.  Friday evening, the Mexican government said that WMT will face an anti-trust investigation from the country’s anti-trust panel (related to wholesale distribution of consumer goods).

Overnight, Asian markets were mixed but leaned to the downside on modest moves.  Taiwan (+0.41%) paced the five gaining exchanges while New Zealand (-0.73%) and India (-0.72%) led the seven exchanges in the red.  In Europe, we see a similar mixed picture with a bit more amplitude at midday.  Norway (+1.49%) and Russia (+1.17%) are way out-front pacing the gains while Greece (-1.54%) is by far the biggest loser.  However, the CAC (-0.49%), DAX (-0.73%), and FTSE (+0.22%) lead the region (as usual) on volume in early afternoon trade. In the US, as of 7:30 a.m., Futures point toward a gap down to start the day.  The DIA implies a -0.51% open, the SPY is implying a -0.64% open, and the QQQ implies a -0.83% open at this hour.  At the same time, the 10-year bond yield has spiked to 4.795% and Oil (WTI) spiked 2.64% to $85.80/barrel.

There is no major economic news scheduled for Monday.  There are also no major earnings reports scheduled for either before the open or after the close.

In economic news later this week, on Tuesday we have two Fed speakers (Waller at 1 p.m. and Kashkari at 3 p.m.).  Then Wednesday, we get Sept. PPI, EIA Short-Term Energy Outlook, FOMC Meeting Minutes, API Weekly Crude Oil Stocks report.  We also hear from Fed members Bowman at 4:15 a.m. and Waller at 10:15 a.m.  On Thursday, Sept. CPI, Weekly Initial Jobless Claims, EIA Crude Oil Inventories, Federal Budget Balance, and the Fed’s Balance Sheet are reported.  Finally, on Friday, we get the September Export Price Index, Sept. Import Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations.  Fed member Harker also speaks at 9 a.m.

In terms of earnings reports later this week, on Tuesday, PEP reports.  Then Wednesday, again there are no reports.  However, earnings season starts again on Thursday, as CMC, SAL, DPZ, FAST, INFY, SVNDY, and WBA report.  Finally, on Friday, we hear from BLK, C, JPM, PNC, PGR, UNH, and WFC all report as earnings season kicks off again.

In miscellaneous news, JPM released a market forecast on Friday which predicts a bearish scenario for global equities.  The report cited a very strong dollar, weakening service sector, and interest rates expected to peak in Q4.  JPM suggested that their clients rebalance portfolios to go overweight on technology, consumer staples, and utilities as those sectors get beaten down by currently rising bond yields.  Elsewhere, Bloomberg reported that a bi-partisan group of US Senators (including Majority Leader Schumer) will be in China this week, hoping to get a meeting with Chinese President Xi.  Their hope is to discuss escalating tensions. At the same time, Taiwan is probing four of their companies (at US urging) for helping China’s Huawei set up a network of chip manufacturing plants in Southern China.  (As reported here last week, President Biden is looking likely to meet Xi in mid-November on the sidelines of an Asia Pacific Economic Conference in San Francisco.

In late-breaking news, given the attacks in Israel and Palestine, oil is sure to knee-jerk higher (despite neither place having any real oil production or transit), and oil-levered stocks may take a hit.  The most recent news out of Israel has the IDF placing Gaza under siege (no food, water, fuel, or electricity allowed to enter) and are continuing their pounding of targets in that 141 sq. mile strip.  (The IDF says 500 targets were hit last night alone.)  Elsewhere, CNBC reports that China’s key economic ministries announced Monday that they are targeting a 50% increase in the country’s computing power by 2025.  The six main technology-related ministries jointly announced a goal of 300 exaflops by that date.  (For reference, that would be a computer equivalent to 600 million mainstream laptop computers tied together.)  Just for comparison, the US now has three of the top five supercomputers in the world.  China’s current best (known) is not even among the top 500 of the world’s most powerful computers.

With that background, it appears the Bears are gapping all three major index ETFs lower. However, premarket candles in all three are white-bodied and indecisive. In other words, the Bears are not getting follow-through after the initial knee-jerk gap. We have scheduled news, speakers, or earnings to change the narrative. So, expect the Israel-Palestine war to drive the news cycle all day. In terms of extension, none of the three major index ETFs are far below their T-line (8ema) and the T2122 indicator is now back in its mid-range. So, again we have room to run if either the Bulls or Bears can find energy. Expect more volatility at the open as traders who do not trade the premarket session get their first chance to over-react. It could be a bumpy day. (Mondays like this are the reason for hedging, lightening up, and/or buying option insurance on Friday can be a good idea.)

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 started the day flat Thursday, down 0.02% in the SPY, down 0.03% in the QQQ, and down 0.05% in the DIA.  However, the SPY and QQQ immediately sold off, reaching the low of the day shortly after 11 a.m.  Then both began a slower rally that took them back to their highs (high of the day in SPY) about 2:45 p.m.  From there, the pair of index ETFs traded sideways with a very modest bearish trend for the last 75 minutes.  Meanwhile, DIA traded sideways in a very tight range for an hour after the open.  Then it followed the other major index ETFs lower, finding its lows at about 11:50 a.m.  At that point, DIA traded sideways until 1:15 p.m. before following the SPY and QQQ higher until 2:45 p.m.  From there, DIA traded sideways in a tight range for the rest of the day.

On the day, six of the 10 sectors were in the red with Consumer Defensive (-1.67%) way out in front (by almost a full percent) leading the way lower.  Meanwhile, Financial Services (+0.76%) held up better than the other sectors.  At the same time, the SPY lost 0.04%, DIA gained 0.06%, and the tech-heavy QQQ lost 0.29%.  VXX fell 1.28% to close at 23.97 and T2122 climbed but still remained well into the oversold territory at 9.09.  10-year bond yields basically bobbed along sideways after Wednesday’s “fall” to close at 4.714% while Oil (WTI) dropped another 2.10% to end the day at $82.45 per barrel.  

This action gave us very indecisive candles in all three major index ETFs.  The DIA and SPY printed Dojis that remain below their T-line all day.  At the same time, QQQ printed more of a black-bodied Spinning Top which retested its T-line before closing just below it again.  This all happened on below-average volume in all three major index ETFs.  So, we saw a flat open followed by a selloff, a rebound, and finally a lack of conviction in the last hour.  That probably tells us Mr. Market is just waiting on the next shoe to drop this morning (September Payrolls and Unemployment data in the premarket).

The major economic news reported Thursday included August Exports, which came in higher than the previous month at $256 billion (compared with $251.9 billion in July).  At the same time, August Imports were down slightly to $314.3 billion (versus July’s $316.6 billion). Together this gave us an August Trade Balance (Deficit) of $58.3 billion which was better than expected (compared to a forecast of -$62.3 billion and July’s -$64.7 billion.  After the close, the Fed’s Balance Sheet came in below $8 trillion for the first time in over two years at $7.956 trillion (down $46 billion on the week).  Much of the drop was attributed to a big drop in the credit being given to deal with bank failures.

In Fed speak, Chicago Fed President Goolsbee told Bloomberg he doesn’t see treasury yields threatening a soft landing.  (To be fair, the interview was recorded before rates hit 7.5%.) Goolsbee said “On the real side I feel like nothing has happened so far that is convincing evidence that we are off the golden path.” (Goolsbee has been referring to the Fed path to a soft landing as “the golden path.”)  Later San Francisco Fed President Daly hinted at keeping rates steady at the next Fed meeting.  Daly said, “If we continue to see a cooling labor market and inflation heading back to our target, we can hold interest rates steady and let the effects of policy continue to work.”  Finally, Richmond Fed President Barkin said that surging Treasury yields reflect the strong economic data we’ve seen lately along with a heavy supply of bonds in the market.  (More bonds available drive down bond prices, which automatically drives up the bond yields.)

In Autoworker contract talks and strike news, GM revealed Thursday that it has made a counter-offer to the UAW.  (No details were released.)  Elsewhere, Reuters reported details of the tentative deal between the UAW and VLVLY (Volvo Mack Trucks).  The report showed a 19% hike over 5 years (10% immediately) plus a $3,500 “ratification bonus,” improved benefits (including a $1,000 annual addition to each 401K plan), additional vacation days, and a reduction in the tier-structure (the time it takes to get to top pay scale).    The deal must still be ratified by 4,000 hourly UAW workers.  Meanwhile, UAW President Fain announced he will hold another 2 p.m. Eastern streaming event to update workers on the progress of the talks.  In his post-scheduling the event, he hinted there might be an expansion of the strike but that all three of the automakers may not be hit.

In stock news, BHP told Reuters Thursday that it intends to focus on cost-cutting rather than M&A to improve results over the next year.  Without setting a goal or forecast, the CEO said “If we can cut our cost base by 10%, that’s $20 billion in value…the last time someone created $20 billion with an M&A – I’d like them to tell me when it was.”  At the same time, XOM raised its Q3 profit forecast by $1 billion, citing escalated oil prices.  Elsewhere, a study published in the JAMA Medical Journal showed a link to increased stomach paralysis and other rare gastrointestinal issues for NVO’s wildly popular diabetes drugs Ozempic, Wegovy, and Saxenda which are all widely used for significant weight loss.  Bloomberg said the study found patients on one of those drugs are nine times more likely to develop swelling of the pancreas than a competing diabetes drug.  At the same time, C outlined its layoff process for eliminating layers of management in a brief internal meeting on Thursday.  No specifics were given, but Reuters reports the next layoffs will hit in November. A bit later, CLX announced that its sales took a hard hit from a cyber-attack but also acknowledged a “challenging consumer environment.” In the early afternoon, GSK announced it had raised $1.1 billion by selling 270 million shares of Haleon Plc in the UK. The funds will reportedly be rolled back into its Pharma business unit (Haleon is just an investment).  Meanwhile, STLA announced a $90 million investment in Argentina Lithium & Energy.  STLA will hold 19.9% ownership as a result of the deal.  Late in the day, MRTX shares jumped after Bloomberg reported rumors that French Pharma giant SNY is exploring an acquisition of MRTX.  After the close, MGM announced it expects operational disruptions from its September cyber-attack to negatively impact Q3 results.

In stock government, legal, and regulatory news, the UK announced Thursday morning that it will investigate the AMZN and MSFT dominance of the cloud computing market.  (The two combined have 80% market share with GOOGL being the closest competitor with 5%-10% of the market.)  Later, the Commerce Dept. said it is examining TSM, whose $40 billion AZ plant is a crucial planned recipient of US CHIPS Act funds.  Recent information indicates that nearly half of the project’s workforce comes from Taiwan.  This is, of course, contrary to the act’s goal of increasing US employment and chip manufacturing capability.  (TSM has had a very hard time filling jobs with qualified, i.e., experienced, US workers and has found it most expedient to bring in staff from the Taiwanese facility, of which the AZ fab is designed to be a mirror image.)  Elsewhere, GIFI announced a settlement of a lawsuit with Hornbeck Offshore Services.  After the settlement, the court dismissed the suit.  (No terms were released.)  At the same time, principally INTC, NVDA, and QCOM (but including others) launched a large-scale lobbying campaign in Washington in a bid to defeat semiconductor sales to China.  (NVDA was particularly vocal with the trio above claiming the restrictions could cost their firms $50 billion in lost sales per year from China.)  The three companies also testified before a House committee hearing Thursday.  Later, TSLA asked the Mexican government to build new infrastructure in the Northern Mexican state where the company intends to construct a new car plant.  (These improvements included upgrades to the region’s electric grid and railway system.)  In the afternoon, the NHTSA held a public hearing and recommended the government mandate a recall of 52 million air bag inflators (11 million of those produced under license by ALV).  These inflators were used between 200 and 2018 by 12 different car makers.  At the close, the SEC sued TSLA CEO Musk related to his X (Twitter) purchase. The SEC is attempting to force Musk to testify in the agency’s probe of his purchase of the company.  (Musk defied a subpoena to appear on Sept. 15 from the agency.)

After the close, LEVI missed on revenue while beating on earnings.  The company also cut its full-year guidance again.  (It cut forward guidance just 3 months ago as well.)

Overnight, Asian markets were mostly green.  Thailand (-0.97%) was the only major outlier to the downside while Hong Kong (+1.58%) was an outlier to the upside.  Singapore (+0.61%) and India (+0.55%) were the more typical leaders to the upside.  In Europe, we see the same picture taking shape at midday with only two of the 15 bourses showing red.  The CAC (+0.69%), DAX (+0.83%), and FTSE (+0.40%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., markets are now looking to start the day on the upside.  (Of course, this is pre-Payrolls data.)  The DIA implies a +0.20% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.27% open at this hour.  At the same time, 10-year bond yields are higher at 4.744% and Oil (WTI) is just on the green side of flat at $82.43 per barrel in early trading.

The major economic news scheduled for Friday includes Sept. Avg. Hourly Earnings, Sept. Nonfarm Payrolls, Sept. Private Nonfarm Payrolls, Sept. Participation Rate, Sept. Unemployment Rate (all at 8:30 a.m.).  We also hear from a Fed speaker (Waller at noon).  The major earnings reports scheduled for before the open are limited to. There are no major earnings reports scheduled for Friday (either before the bell or after the close).

In miscellaneous news, Nat Gas hit a price not seen since January as the commodity broke $3 to close at $3.184.  After hours, AMC announced that cultural phenom Taylor Swift is helping it rake in money.  A film of Swift’s recent Eras tour will open on Oct. 13 and has already surpassed $100 million in advance ticket sales.  Meanwhile, Politico reports that in the wake of the GOP mess in Congress, the Biden Administration is now looking at using State Dept. grants as a way to send more weapons to Ukraine.  The idea seems to be grating the money to Ukraine who would use the funds to buy arms from US weapons manufacturers such as GD, NOC, and RTX.  (The same mechanism has been used to transfer weapons to Taiwan in the past.)  At the same time, the National Assn. of Realtors said the average US mortgage rate has now hit a 22-year peak of 7.49% for a 30-year, fixed-rate loan.

In late-breaking news, TSLA announced it will cut its US prices again on its Model 3 and Model Y cars.  (A 3%-4% cut in Model 3 prices and a 3.7% cut in Model Y.)  The move comes after TSLA vehicle deliveries for Q3 missed the market expectations.  At the same time, PHG (Philips) took a hit overnight as the FDA said it does not believe the data shared by the medical device maker is sufficient to evaluate the risks posed by the company’s recalled sleep apnea ventilators.  (More than 10 million of those devices were recalled after a number of deaths were attributed to breathing toxic materials produced by the breakdown of some silicone components of the device.)  Elsewhere, Bloomberg reports this morning that XOM is in “advanced talks” on buying PXD in a $60 billion deal.  It would be the oil giant’s biggest acquisition since Mobil back in 1999.  (The CEO of PXD had previously announced his retirement at year end.)  Finally, a meeting between President Biden and Chinese President Xi next month is looking more likely.  The meeting would take place on the sidelines of an APEC (Asia-Pacific Economic Cooperation) summit in San Francisco in Mid-November.

With that background, it looks like the Bulls are tentatively and indecisively in charge prior to today’s data drop. All three major index ETFs are easing closer to their T-line (8ema) from below. All three are also printing very small, white-body, Spinning Top type candles very early. In terms of extension, none of the three major index ETFs are far below their T-line (8ema) but the T2122 indicator is now in the middle of its oversold range. So, we are not extremely oversold and have some slack to run with if either the Bulls or Bears can find energy. Expect some volatility at 8:30 a.m. and again at the open (and possibly when the UAW streams its news mid-afternoon). Also remember that this is Friday, payday, and time to get your account ready for the weekend news cycle. Just remember, the first rule of making big money in the market is to not lose big money in the market.

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 close to flat Monday (down 0.20% in the SPY, down 0.15% in the DIA, and up 0.04% in the QQQ).  At that point, the SPY chopped sideways until 11:30 a.m. while the DIA chopped but slightly to the downside and QQQ chopped slightly to the upside during the same timeframe.  Then all three sold off until 12:50 p.m. before closing out the day in a sideways chop channel that lasted until 3 p.m.  Finally, all three rallied in the last hour of the day.  This action gave us Doji candles in the SPY (white-bodied) and DIA (black-bodied) as well as a Bullish Harami, white-bodied, Spinning Top type candle in the QQQ.  This all happened with above-average volume in the DIA, average volume in the SPY, and a bit below-average volume in the QQQ.

On the day, nine of the 10 sectors were in the red.  However, Utilities (-4.25%) was a MASSIVE outlier, by 2%.  Other than that, Energy (-2.35%) led the rest lower.  Only Technology (+0.53%) held onto the green area.  At the same time, the SPY lost 0.04%, DIA lost 0.26%, and the tech-heavy QQQ gained 0.83%.  VXX gained slightly to close at 23.36 and T2122 dropped deep into the oversold territory at 6.21.  10-year bond yields spiked to 4.683% while Oil (WTI) plummeted 2.34% to end the day at $88.66 per barrel. So, we saw a flat open followed by chop, a selloff, more chop, and finally a rally.  That all left us little changed overall with only NVDA, GOOGL, ADBE, META, MSFT, AMZN, PDD, and APPL dragging the QQQ back up above its T-line (8ema) to perform better than the large-cap index ETFs.

The major economic news reported Monday included September Global Mfg. PMI, which came in slightly above expectations at 49.8 (compared to a forecast of 48.9 and a previous reading of 47.9).  A few minutes later, September ISM Mfg. Employment was reported above anticipated at 51.2 (versus a forecast of 48.3 and an August value of 48.5).  At the same time, September ISM Mfg. PMI also came in above expectation at 49.0 (compared to a forecast of 47.7 and an August reading of 47.6).  September ISM Mfg. Price Index came in well below predicted at 43.8 (versus a forecast of 48.6 and an August value of 48.4).  So, according to S&P and ISM manufacturing is holding up.  At the same time, the manufacturing price drivers (ISM PMI Price factors) are coming down compared to predicted levels.

In Fed speak news, Fed Governor Bowman told a banking conference that she thinks further rate hikes will be needed.  She said, “…my own expectation that progress on inflation is likely to be slow given the current level of monetary policy restraint, suggests that further policy tightening will be needed to bring inflation down in a sustainable and timely manner.”  Later, Fed Vice Chair for Bank Supervision Barr told a New York economic forecaster conference that he is much less concerned about how much more to raise rates than how long to keep them high.  He said, “In my view, the most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals.”  Barr went on to say “I expect it will take some time.”  Finally, Fed Chair Powell spoke to a business group in PA.  He did not address monetary policy, but said the economy was still dealing with the aftermath of the COVID-19 Pandemic.  Finally, last night Cleveland Fed President Mester told a group that she still thinks the FOMC may need to raise rates one more time.  She added the obvious and often repeated stated Fed position that inflation remains too high and the terminal Fed Funds rate, as well as how long it is held at that level, will depend on how the economy evolves.

In Autoworker contract talks and strike news, GM and F announced they will furlough another 500 workers across four plants because of the impact of the UAW strikes.  At the same time, F announced it was laying off 330 workers due to the strike. Meanwhile, the UAW confirmed to Reuters that it had presented a new contract proposal to GM on Monday and also held another round of talks with STLA.

In stock news, TSLA reported disappointing Q3 delivery numbers, saying that it had delivered 435,059 vehicles in Q3 (short of the average analyst estimate of 456,722).  At the same time, TSLA manufactured 430,488 cars in Q3 well below the average estimate of 461,992. (It should be noted that this failure brings China’s BYD within 3,456 cars of becoming the world’s largest EV maker.) Shortly after the TSLA report, RIVN reported higher-than-expected Q3 vehicle deliveries of 15,564 (compared to an analyst estimate of 14,470), which was a 23% increase from Q2.  At the same time, KKR announced it has sold $560 million worth of industrial real estate (about 5 million square feet) across 50 buildings in Atlanta, Dallas, Chicago, and Central PA.  (The buyer was not disclosed.)  Elsewhere, the CEO of troubled BA supplier SPR resigned and was immediately replaced on an interim basis by a former BA executive.  At the same time, NSC faced its second service outage in the last month (both caused by IT issues).  NSC was downgraded by some analysts on this news.  Later, MSFT CEO Nadella said Monday that major players were competing to lock up content creators for their data (needed to train AI models).  He said the whole atmosphere reminded him of the early days of search engines where the big players started paying tens of billions to lock up publishers with exclusive deals. After the close on Monday, BF.A announced a $400 million share buyback program beginning immediately and lasting until Oct. 1, 2024.  Also after the close, a coalition of hedge funds increased its offer for SCU to $13/share (up from $12.76/share).  SCU closed at $11.38/share.  Meanwhile, WE announced it was delaying a $95 million interest payment.  This raised speculation of bankruptcy but was leaked to be a negotiation tactic with creditors and landlords.

In stock government, legal, and regulatory news, CI announced it reached a settlement over the weekend to pay $172 million for overcharging the government for Medicare Advantage claims.  (It was actually fraud because false claims were submitted to get tens of millions in unearned money.)  Later, MCD and WEN defeated a lawsuit that had alleged the restaurants deceived consumers about the size of their burgers.  At the same time, the NHTSA expanded its investigation into F sport utility and trucks over catastrophic engine failures due to faulty valves.  The investigation now covers 708k 2021-2022 vehicles.  Later, in the early afternoon, the FDIC issued a consent order without fines for DFS, who had been under investigation since an Oct. 2022 audit found incorrect credit card classifications.  However, DFS responded quickly and strongly and was rewarded for its treatment by FDIC.  Elsewhere, Reuters reported Monday that all 10 of the drugmakers subject to negotiations over Medicare drug pricing signed up for the negotiations with the US HHS Dept. prior to the October 1 deadline.  Most of them are suing HHS, wanting to prevent negotiations, but a federal court ruled against a suit on behalf of the 10 from the US Chamber of Commerce on Friday.  In the afternoon, AAPL announced it would appeal a Netherlands Consumer and Markets Authority ruling related to App Store policies.  At the same time, a US District judge in CA ruled in TSLA’s favor by ruling that TSLA owners must pursue any fraud claims (that the company misled them about Autopilot features) in individual arbitration rather than in courts, throwing out a proposed class-action lawsuit in the process.  Meanwhile, the FCC announced the first ever “space debris” fine of just $150k against DISH for waiting until there was not enough fuel left to send an end-of-life satellite into re-entry which would burn up the satellite. After the close, the US Patent Office tribunal rejected a request from VTRS for the agency to review two patents held by NVO related to two weight-loss drugs. VTRS claimed the two patents obviously were based on existing patents for the underlying diabetes drug and should be invalidated.

Overnight, Asian markets leaned heavily to the red side.  Hong Kong (-2.69%), Thailand (-1.51%), and Australia (-1.28%) led the region lower.  In Europe, we nearly see red across the board at midday.  Only the FTSE (+0.19%) remains in the green while the CAC (-0.41%) and DAX (-.51%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.07% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.16% open at this time.  Meanwhile, 10-year bond yields are spiking again to 4.727% and Oil (WTI) is down another two-thirds of a percent to $88.27 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to JOLTs Job Openings (10 a.m.) and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to MKC.  Then after the close, CLM, and NG report. 

In economic news later this week, on Wednesday we get Sept. ADP Nonfarm Employment Change, Sept. S&P Global Services PMI, Sept. S&P Global Composite PMI, Aug. Factory Orders, Sept. ISM Non-Mfg. PMI, Sept. ISM Non-Mfg. Price Index, EIA Crude Oil Inventories, and Fed member Bowman speak.  On Thursday, we get August Imports, August Exports, Weekly Initial Jobless Claims, the Fed Balance Sheet, and two Fed Speakers (Mester at 9 a.m. and Daly at noon).  Finally, Friday, Sept. Avg. Hourly Earnings, Sept. Nonfarm Payrolls, Sept. Private Nonfarm Payrolls, Sept. Participation Rate, Sept. Unemployment Rate, and a Fed speaker (Waller at noon).

In terms of earnings reports later this week, on Wednesday, we hear from AYI, HELE, and RPM.  On Thursday, CAG, STZ, LW, and LEVI report.  Finally, on Friday, there are no major earnings reports scheduled.

So far this morning, MKC missed on revenue while reporting in-line on earnings.  Even so, this was a 5.6% quarter-on-quarter increase for MKC.

In late-breaking news, late last night Florida Rep. Gaetz followed through on his threats by filing a “motion to vacate the chair” in hopes of removing House Speaker McCarthy.  Gaetz has vowed that even if he loses this time, he will refile the motion every time Speaker McCarthy reaches across the aisle to court Democratic votes on any legislation.  On that note, it will very likely be Democrats who decide whether McCarthy keeps his post.  So, the matter will come down to whether McCarthy and the less-fringe Republicans can reach a compromise (actual governing solution) or whether the parties are too far into the “us good vs. them evil” mindset to govern.  Oddly, Gaetz has at least said he backs House Majority Leader (#2 House Republican) as McCarthy’s replacement.  The issue is that that person, Steve Scalise, is currently incapacitated while being treated for a rare blood cancer and in the past has been a staunch supporter of McCarthy.  The point of the whole story is that Congress now has yet another hurdle to get past before it can accomplish anything. Remember the 15 rounds of votes over a number of days it took the GOP to elect McCarthy? Here’s to hoping that doesn’t become “the good old days of a semi-functional Congress.”

With that background, it looks like the Bears are in control this morning in the premarket. All three major index ETFs are printing black-bodied candles with upper wicks and sitting at their early session lows. The QQQ has (as of now) given up its T-line again and it appears we are headed for a modest gap lower at the open. So, for now, the short-term trend clearly remains headed lower. In terms of extension, none of the three major index ETFs are far below their T-line (8ema) but the T2122 indicator is now well into the lower half of its oversold range. So, over-extension is an open question. This tells us either side has at least some slack if they can find the momentum to run.

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 Friday, markets gapped strongly higher as the Fed’s favorite inflation gauge came in better than expected.  The SPY gapped up 0.71%, DIA gapped up 0.65%, and QQQ gapped up 0.98%.  However, at that point, the DIA immediately began selling while the SPY traded sideways, and the QQQ continued to rally.  This lasted until 10 a.m. when the SPY and QQQ followed the DIA selling off. The selling lasted until all three major index ETFs reached the lows of the day at 2:30 p.m.  From that point, the rest of the day saw a sideways grind sideways along the lows with a very, very slight bullish trend.  This action gave us black-bodied candles that retested (and failed) their respective T-lines (8ema).  In addition, DIA printed a Bearish Engulfing candle, SPY came close to printing a Dark Cloud Cover, and QQQ just printed a large-body, black candle with wicks on both ends.  This happened on above-average volume in the DIA and SPY, as well as average volume in the QQQ.

On the day, six of the 10 sectors were in the red led by Energy (-1.51%) way out front leading the other sectors lower.  Meanwhile, Consumer Cyclical (+0.42%) holding up better than the other sectors.  At the same time, the SPY lost 0.24%, DIA lost 0.50%, and the tech-heavy QQQ gained 0.07%.  VXX gained almost 2% to close at 23.32 and T2122 fell but remained just outside the oversold territory at 21.90.  10-year bond yields fell slightly to 4.579% while Oil (WTI) lost just over one percent to end the day at $90.77 per barrel.  So, Friday was another whipsaw day that gave us a strong gap-up, which was met by a selloff that ripped the face off of gap chasers.  This was not helped when the dysfunctional House GOP failed to pass even their extremist version of a set of appropriations bills, leading to what is likely a government shutdown as of Sunday.  The Senate plans to pass a bipartisan funding bill Saturday (after their own GOP troublemaker, Sen. Paul forced the long wait instead of a fast-track Thursday vote after the bill passed 77-19).

The major economic news reported Friday included the August PCE Price Index which came in lower than expected at +0.4% month-on-month (compared to a forecast of +0.5% and a July reading of +0.2%).  That amounted to an August PCE Price Index year-on-year of +3.5%, which was in line with the forecast and a tick higher than the July value of +3.4%.  The “Core” numbers, which strip out food and energy, on a month-on-month basis were +0.1% (lower than the forecasted and July reading of +0.2%).  On a year-on-year basis, the Core number was +3.9% (in line with forecast and down significantly from the +4.3% in July).  At the same time, August Personal Spending came in just as predicted at +0.4%, which was down very sharply from the July +0.9% value.  Meanwhile, the Preliminary August Trade Goods Balance showed a significantly better than anticipated deficit of -$84.27 billion (compared to a forecast of -$91.20 billion and the prior month’s -$90.92 billion).  Preliminary August Retail Inventories came in up 0.6% versus the dead-flat +0.0% in July.  Later, September Chicago PMI survey results were a bit below predicted at 66.0 (versus a 66.3 forecast but slightly above the August reading of 65.5).

In Autoworker contract talks and strike news, in a hopeful sign, the UAW dropped its unfair labor practices charges against GM and SLTA on Friday.  (The union had filed charges with the NLRB on Aug. 31.)  Then in late morning, the UAW expanded the strike, this time hitting a GM plant and an F plant.  The added facilities bring 6,900 new workers to the strike, which has now increased to cover 17% of the workers whose contracts are under negotiation (18,300 total out of 146,000).  Later, the F CEO Farley said the UAW was “holding a deal hostage” over EV battery plants.  UAW President Fain fired back that Farley was “lying about the state of the negotiations,” going on to say the CEO “hasn’t been at the bargaining table this week or for most of the last 10 weeks.  If he were there, he’d know we gave Ford a new comprehensive proposal Monday and still haven’t heard back.”  (For what it is worth, the CEO of F has previously said he expects massive workforce reductions once the transition to EVs is complete. Perhaps as much as 40% workforce reduction.) Following those lines of contention, GM CEO Barra said she felt “It’s clear that there is no real intent to get an agreement (on the union’s part).” 

In government shutdown news, having broken their word from June, the House GOP failed to approve even their own extreme government funding bill Friday. (It would have caused 30% budget reductions in most departments of the government.)  However, 21 GOP members voted against the bill, either because it was not extreme enough for them or because they were more interested in political theatre than the situation.  One of the most extreme right-wing members (Gaetz) even approached Democrats, trying to strike a deal that would allow him to replace the Speaker with a Freedom Caucus member.  Then Saturday, with only 9 hours left (and perhaps in response to Gaetz’s move), Speaker McCarthy reversed course by reaching across the aisle to pass a 45-day CR with Democratic help.  The bill passed 335-91, with 126 GOP votes (58%) and 209 (all but 1) of the Democratic votes.  The CR removed additional support for Ukraine but, oddly, doubled US disaster relief again. (President Biden asked for $4 billion, the Senate made it $8 billion additional, and the House doubled it again to $16 billion.)  The removal of Ukraine aid led to the lone Democratic thumbs down in the House and caused Dem. Senator Bennet to hold up a fast-track vote in the Senate.  However, with three hours to spare the Senate approved the House CR bill 88-9 as-is (meaning no reconciliation and re-votes in both houses were needed).  Then the President signed the bill shortly before the deadline.  Dow futures jumped more than 100 points on the news that the shutdown was averted.  The bottom line is that a shutdown was avoided by kicking the can 45 days down the road…and we can now look forward to more drama a week or so before Thanksgiving. In the meantime, Gaetz said he will move to remove McCarthy as Speaker this week for the high crime of reaching across the aisle to Democrats to keep the government open.

In stock news, Reuters reported exclusively Friday that CG is in talks to acquire two units from MDT for more than $7 billion.  Sources tell them an agreement could be reached within a few weeks.  Elsewhere, the Teamsters Union picketed two AMZN distribution facilities in CA on Friday.  At the same time, TSLA announced that one of its semi-trucks traveled over 1,000 miles in a single day.  (There was no word about any load.  So, it must be assumed it was just the truck with no trailer.  For reference, a semi with a load will typically travel 650 miles in an 11-hour shift, which would be about 1,300 in a driver-team day.)  Later, Reuters reported that APO is among two finalist investors to acquire bankrupt SAS airline.  Monday marks the separation of K from its snack business which will trade under KLG.  Industry analyst IQV reported that 1.8 million people got COVID-19 vaccine shots last week, with 1 million getting the PFE shot and 800k getting the MRNA vaccine.  RYAAY announced it is reducing its Winter flight schedule, citing BA not delivering promised jets on time.  (RYAAY said it now expects to get 14 at most of the 27 aircraft scheduled for delivery in Q4 from BA.)  After the close, WFC announced it had sold $2 billion of its private equity investments to a group or private equity firms including CG.  Then on Saturday, AAPL announced it will be issuing a software update to address a problem on its newly released iPhone 15, which has caused the phones to overheat.  AAPL said the phones are “running hot” due to bugs in iOS 17, a temporary set-up period of the phone, and bugs in apps. On Sunday, AMZN took an image hit as many customers reported receiving email confirmations of gift card purchases, that they never bought.  This led the customers to fear account hacking or much more ominously that AMZN may have been hacked.  As of Sunday evening, AMZN is still investigating.

In stock government, legal, and regulatory news, the SEC announced Friday that eight more broker-dealers have settled over employees discussing business using off-books messaging channels.  IBKR, FITB, PWP, and Nuveen paid a total of $91 million combined.  IBKR also paid $20 million to the CFTC over similar charges.  At the same time, a federal judge in OH declined to block the Biden Administration from negotiating the price of drugs for the Medicare plan.  Elsewhere, MS, BCLYF, and DRW Securities won a dismissal of a private suit alleging the institutions manipulated SPX options linked to the VIX in 2018.  The SEC fined D.E. Shaw $10 million for violating whistleblower protection rules.  Later, the SEC reported that 10 firms were charged a cumulative $79 million for recordkeeping violations.  At the same time, NLRB accused AMZN of violating the terms of a 2021 agreement that required the company to allow workers to unionize if they choose.  After the close, HOOD said it expects to see charges of $100 million in Q3 related to regulatory and legal issues.  Finally, the US Dept. of Energy is in the final stages of talks to lend $1 billion to LAC to allow the company to build out the largest lithium deposit in the US.  The loan is said to provide more than half the funding for the operation.

Overnight, Asian markets were evenly split in number but leaned bullish on the strength of the move.  Hong Kong (+2.51%) and Taiwan (+1.24%) were by far the biggest movers and led the region higher as New Zealand (-0.47%) was the biggest loser on the day.  In Europe, the bourses are leaning to the res side at midday with only four bourses in the green.  The CAC (-0.18%), DAX (-02.7%), and FTSE (-0.26%) lead the region lower with Russia (+0.92%) an outlier to the upside 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 -0.02% open, the SPY is implying a +0.02% open, and the QQQ implies a +0.17% open at this hour.  At the same time, 10-year bond yields are moving higher again to 4.631% and Oil (WTI) is up just under another percent to $91.66 per barrel in early trading.

The major economic news scheduled for Monday includes September S&P US Mfg. PMI (9:45 a.m.), September ISM Mfg. PMI and September ISM Mfg. Prices (both at 10 a.m.)  We also have three Fed speakers (Chair Powell at 11 a.m., Harker at 11 a.m., and Williams at 1:30 p.m.). There are no major earnings reports scheduled for Monday. 

In economic news later this week, on Tuesday we get JOLTs Job Openings and API Weekly Crude Oil Stocks.  Then Wednesday we get Sept. ADP Nonfarm Employment Change, Sept. S&P Global Services PMI, Sept. S&P Global Composite PMI, Aug. Factory Orders, Sept. ISM Non-Mfg. PMI, Sept. ISM Non-Mfg. Price Index, EIA Crude Oil Inventories, and Fed member Bowman speak.  On Thursday, we get August Imports, August Exports, Weekly Initial Jobless Claims, the Fed Balance Sheet, and two Fed Speakers (Mester at 9 a.m. and Daly at noon).  Finally, Friday, Sept. Avg. Hourly Earnings, Sept. Nonfarm Payrolls, Sept. Private Nonfarm Payrolls, Sept. Participation Rate, Sept. Unemployment Rate, and a Fed speaker (Waller at noon).

In terms of earnings reports later this week, on Tuesday MKC, CLM, and NG report.  Then Wednesday, we hear from AYI, HELE, and RPM.  On Thursday, CAG, STZ, LW, and LEVI report.  Finally, on Friday, there are no major earnings reports scheduled.

In miscellaneous news, US crop exports are at risk again as water levels in the Mississippi River have fallen below safe barge traffic levels again.  Just like the Panama Canal, barge operators are being forced to carry smaller, lighter loads per barge to avoid grounding.  In a related story, the low freshwater level of the river has allowed saltwater to creep up the river from the Gulf of Mexico, endangering or ruining drinking water supplies.  The US Army Corps of Engineers has been working on an underwater dam to slow the creep since July and will begin barge delivery of 36 million gallons of fresh water per day to the lower Mississippi area starting this month.

In late-breaking news, CA Governor Newsome appointed Laphonsa Butler to the open interim position to replace Senator Feinstein who died last Thursday.  Her seat will be up for election again in November 2024.  Elsewhere, in good labor news, the UAW and VOLAF (Volvo, Mack trucks) reached a new labor deal just before midnight last night to avoid a strike.  The tentative deal must still be ratified by UAW members.  In less good labor news, union healthcare workers of Kaiser Permanente (private) told CNBC is it not likely that the 310,000 workers will reach a deal with management of the healthcare giant.  This makes a strike, which has already been authorized by the workers, likely across CA, OR, WA, VA, and Washington DC as soon as Wednesday.

With that background, it looks like the pop from Saturday night’s government shutdown avoidance did not last long. All three major index ETFs opened the premarket with a strong gap higher but have sold steadily since, giving us gap-up large black candles in all three so far in the early session. All three remain below their T-line (8ema) and 50sma. (However, QQQ did gap above before selling back below its T-line this morning.) So, for now, the short-term trend clearly remains headed lower. In terms of extension, none of the three major index ETFs are far below their T-line (8ema) and the T2122 indicator is still just outside of its oversold range. This tells us either side has room to run if they can find the momentum to do so.

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 Wednesday, markets gapped modestly higher at the open (up 0.26% in the SPY, up 0.23% in the DIA, and up 0.33% in the QQQ).  However, then the Bears took over and slowly sold off in a wavy move that eventually took us to the lows of the day at 2:15 p.m.  Then the Bulls stepped in to drive an hour-long rally that took the SPY and QQQ to the highs of the day (and the DIA back into the morning gap at 3:15 p.m.).  At that point, we saw a modest selloff in the last 45 minutes of the day in all three major index ETFs.  This action gave indecisive candles in all three.  The SPY printed a black body Doji or small-body Spinning Top candle.  The QQQ gave us a long-legged, black-bodied Doji. Finally, the DIA printed a black-body Hammer-type candle. This happened on above-average volume in the DIA and SPY, as well as slightly less-than-average volume in the QQQ.

On the day, the market was split with five of the sectors in the green and 5 in the red as Utilities (-1.83%) way out front leading the other sectors lower.  Meanwhile, Energy (+2.26%) way, way out in front (by 1.5%) leading the rest higher.  At the same time, the SPY gained 0.04%, DIA lost 0.18%, and the tech-heavy QQQ gained 0.23%.  VXX fell hard to close at 23.97 and T2122 jumped back up but remained in the oversold territory at 12.24.  10-year bond yields spiked again to 4.607% while Oil (WTI) also spiked up to end the day at $93.68 per barrel.  So, Wednesday was another whipsaw day that seems to have been largely influenced by the impending government shutdown (and its effect on markets).  We saw a modest gap up, a long and slow selloff, a sharp rebound, and then one last modest leg down.  After all of that, markets ended the day not very far from their Tuesday close. 

The major economic news reported Wednesday was limited to August Durable Goods Orders which came in better than expected at +0.2% (compared to a forecast of -0.5% and far better than the July reading of -5.6%).  At the same time, August Core Durable Goods Orders came in even better at +0.4% (versus a forecast and July reading of +0.1%).  Later the EIA Weekly Crude Oil Inventory Report showed a greater-than-expected drawdown of stocks at -2.170-million-barrels (compared to a forecasted -1.320-million-barrels and the prior week’s -2.135-million-barrels). 

In Autoworker contract talks and strike news, the UAW threatened to expand its strike against the Big 3 Automakers on Friday, if significant progress is not made in the meantime.  The UAW President will announce the next steps in a streamed videocast at 10 a.m. Eastern Friday.  (So far, only about 12% of UAW members have gone on strike.)  Later, on Wednesday night, the ex-President talked at UAW members (not to them) when he counter-programmed the GOP Presidential debate by speaking at a non-union auto parts supplier in Detroit.  The UAW was not involved in his visit and he was not scheduled to speak to UAW leaders. 

In stock news, Reuters reported that the META executive leading the company’s AI Chip program is leaving the company at the end of the month.  In related news, META unveiled a new AI assistant to help Facebook users create images, etc.  At the same time, LCID opened its new plant in Saudi Arabia on Wednesday.  (The Saudi government committed to buy 100,000 vehicles from LCID over the next decade.)  The facility will serve the whole Middle East producing 155,000 cars per year.  Later, in a twist, cryptocurrency exchange Kraken announced it is planning to offer trading of US-listed stocks and ETFs.  Kraken has filed for FINRA licensing as a broker-dealer and is now targeting a launch date in 2024.  At midday, VLKAF (Volkswagen) took a major hit with an IT outage in Germany that shut down production of cars across the whole group of brands including Porsche and Audi.  Elsewhere, in one of the largest real estate deals so far this year, WFC announced it is investing $550 million in retail real estate in New York City’s 20 Hudson Yards building.  (Half a billion doesn’t go as far as it used to as the investment only gets WFC the 5th-7th floors of the building.)  At the same time, NYC shares surged in volatile trading after a tender offer from Bellevue Capital Partners.  (NYC stock closed up 28.62% after trading in a 44% range on the day.)  Later, NEE stock took an 8.23% loss on the day (massive for a utility) after the CEO attributed poor recent company performance to higher interest rates.  PTON jumped 30% higher in after-hours trading following the company announcement that it had signed a 5-year partnership with LULU.  (The companies agreed to become the exclusive partner of the other, with LULU being the exclusive apparel provider to PTON and PTON being the exclusive digital fitness content provider to LULU.) 

In stock government, legal, and regulatory news, controversial hedge fund Citadel has decided to fight the SEC, refusing to turn over employee “off books” private messages in apps like WhatsApp and Signal.  The fund (known as the biggest buyer of order flow from brokers) is threatening to sue the SEC to avoid disclosing the (probably damning) information.  CG, APO, KKR, BX, and others were served notice to turn over employee “off books” communications at the same time.  Several large banks paid significant fines for such collusion.  Elsewhere, WASH agreed to pay a civil penalty of $9 million to the Dept. of Justice to settle charges of discriminatory lending.  At the same time, the Dept. of Justice sued EBAY, claiming the company was violating the Clean Air Act by selling harmful products, including devices to defeat vehicle emissions controls.  (The case could theoretically lead to billions in fines with a penalty of nearly $6,000 for each of 343,000 such devices the government claims were sold through EBAY.)  Later, the US Senate advanced a bill aimed at allowing banks to finance legal marijuana ventures.  The bill now moves to the Senate floor for debate.  In auto news, HYMTF (Hyundai) and Kia are recalling 3.37 million vehicles over the risk of engine fires according to the NHTSA.  Later, a CA federal court ruled in favor of QCOM dismissing a consumer suit alleging the chipmaker’s exclusive contracts with phone makers artificially inflate phone prices.  By midday, Epic Games appealed to the US Supreme Court to review its AAPL antitrust case, in hopes of overturning lower-court rulings.  In other AAPL news, after the close, AAPL was ordered to face a private antitrust lawsuit brought by payment card issuers accusing the company of stifling competition for its Apple Pay Mobile Wallet, enforcing a monopoly in the US over the iPad, iPhone, and Apple Watch tap-to-pay market.  (The suit alleges that unlike the GOOGL Android platform, which lets users choose between the GOOGL Wallet, Samsung Wallet, and others, AAPL forces its users to use the AAPL wallet.)  Also after the close, a CA federal judge refused to overrule the Santa Barbara County Supervisors who had denied XOM the permits needed to replace a pipeline that has been ruptured since 2015 with a fleet of 25,000 tanker trucks (which would have allowed XOM to reopen its closed offshore platform).  Finally, the judge randomly assigned to hear the FTC antitrust case against AMZN has recused himself without citing a reason.  The case was reassigned, based on rotation, to a judge nominated by President Biden.  However, the FTC has asked the case to be assigned to yet another judge who is already hearing smaller private antitrust cases against AMZN.

After the close, MU reported beats on both the revenue and earnings lines. Meanwhile, WOR missed on revenue while beating on earnings.  However, CNXC, FUL, and JEF all missed on both the top and bottom lines.  It is worth noting that FUL also lowered its forward guidance.

Overnight, Asian markets were mixed but leaned toward the red side. Taiwan (+0.27%) was the biggest mover among the five green exchanges while Japan (-1.54%), Hong Kong (-1.36%), and New Zealand (-1.23%) were by far the biggest losers among the seven exchanges in the red.  In Europe, we see a similar story taking shape at midday with just five of 15 bourses in the green (led by Russia +1.16%).  The CAC (+0.24%), DAX (+0.01%), and FTSE (-0.39%) lead the region on volume in early afternoon trade.  Meanwhile, in the US, Futures are pointing to a mixed and mostly flat start to the day as of 7:30 a.m.  The DIA implies a +0.08% open, the SPY is implying a +0.01% open, and the QQQ implies a -0.16% open at this hour.  At the same time,  10-year bond yields have spiked again to 4.641% and Oil (WTI) is off a quarter of a percent to $93.45 per barrel in early trading.   

The major economic news scheduled for Thursday includes Q2 GDP, Q2 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 a.m.), August Pending Home Sales (10 a.m.), and Fed Balance Sheet (4:30 p.m.).  Fed Chair Powell speaks at 4 p.m.  The major earnings reports scheduled before the opening bell is limited to ACN, KMX, and JBL.  Then after the close, NKE reports. 

In economic news later this week, on Friday, August PCE Price Index, August Goods Trade Balance, August Personal Spending, August Retail Inventories, Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflations Expectations, Michigan 5-year Inflation Expectations are reported and Fed member Williams speaks.

In terms of earnings reports later this week, on Friday, CCL reports.

In miscellaneous news, an interesting event took place in China on Wednesday.  Regional lender Shengjing Bank agreed to sell $24 billion worth of assets (including mostly non-performing loans and corporate bonds) to a government entity.  Given the state of China’s real estate market, the move raised eyebrows.  Elsewhere, a US Senate staffer leaked to Reuters that the MSFT email server security flaw (made public in July) allowed Chinese hackers to steal 60,000 emails from the State Department.  Meanwhile, data shows us that US oil prices continue to rise in large part due to oil producers continuing to ship more oil abroad and draw down US stocks despite lower US demand.  (It is more profitable to ship and sell oil abroad than it is to sell in the US.)  In spite of that dynamic, US gasoline inventories rose over a million barrels last week, as refineries have plenty of oil supply. This took place in the face of what was expected to be a gasoline drawdown of half a million barrels, based on falling retail sales.  So, we have plenty of oil and gasoline.  It is just cheaper to ship the oil abroad and the market allows the industry to keep raising fuel prices (consumers reduce the demand but only do so slowly). In other words, prices are stickier than demand.  Finally, the House GOP remains at square one, working through 700 proposed amendments and four ridiculous partial funding bills that are dead on arrival anyway. This is due to Speaker McCarthy remaining subservient to a radical minority of his party refusing to do anything bipartisan.  McCarthy and his handful of MAGA Congressmen have told sources that they think a shutdown will gain them more concessions. He has even decided to change the subject, talking about non-issues by saying he wants to “sit down with the President to secure the border.” In the meantime, both sides of the aisle acted as grownups in the Senate and have advanced a compromise 45-day CR to fund the government.

With that background, it looks like traders are undecided but leaning bearish in the premarket. All three major index ETFs are printing small, indecisive, but definitely black-bodied candles in the early session. Perhaps we are waiting on the GDP or Jobless Claims for a clue. All three remain well below their T-line (8ema) and 50sma. So, for now, the short-term trend clearly remains headed lower with retests of the August and June lows either accomplished or being the apparent next target for the Bears. In terms of extension, as I said, all three major index ETFs are far below their T-line (8ema), with QQQ obviously stretched furthest, and the T2122 indicator is still in its oversold range. This tells us we are in need of a bounce or at least a pause to relieve the pressure. However, we must remember the market can remain oversold (or overbought) longer than we can stay solvent while betting against it.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped down on Tuesday (down 0.73% in the SPY, down 0.63% in the DIA, and down 0.73% in the QQQ).  All three major index ETFs followed through the first hour before then trading sideways in a tight range until 1:15 p.m.  At that point, all three took another leg lower for 30 minutes before trading sideways along the lows for the last 2.25 hours of the day.  This action gave us gap-down, black-bodied candles with small wicks on both ends across the SPY, DIA, and QQQ.  All three remain stretched below their T-line (8ema) and 50sma, with the DIA falling down through its 200sma on the day.  This happened on a bit below-average volume in the QQQ, right at average volume in the SPY, and a bit above-average volume in the DIA.

On the day, all 10 sectors were in the red with Utilities (-2.65%) way out front leading the other sectors lower.  Meanwhile, Healthcare (-0.45%) held up much better than the other sectors.  At the same time, the SPY lost 1.47%, DIA lost 1.16%, and the tech-heavy QQQ lost 1.50%.  VXX spiked to close at 25.04 and T2122 cropped back to the low end of the oversold territory at 3.47.  10-year bond yields spiked above four-and-a-half percent to 4.55% while Oil (WTI) also gained almost one percent to end the day at $90.54 per barrel.  So, the day started off bearish and step-by-step continued that way for the rest of the day.  This took us back to a state of being over-extended to the downside.

The major economic news reported Tuesday included Building Permits, which were up but still a touch below expectations at 1.541 million (compared to a forecast of 1.543 million and the prior reading of 1.443 million).  That amounted to a 6.8% increase while the forecast called for a 6.9% increase.  Later, the September Conf. Board Consumer Confidence came in a touch low at 103.0 (versus a forecast of 105.5 and well down from the prior value of 108.7).  At the same time, August New Home Sales also came in light at 675k (compared to the forecast of 700k and well down from the July 739k number).  That was a decline of 8.7% month-on-month versus the July number which was a 8.0% increase over June.  Then, after the close, the API Weekly Crude Oil Stock report showed a 1.586-million-barrel build (compared to a forecasted drawdown of 1.650 million barrels and much increased from the previous week’s 5.250-million-barrel drawdown.

In Autoworker contract talks and strike news, President Biden joined the UAW picket line on Tuesday.  During remarks over a bullhorn, he was asked whether autoworkers deserved a 40% raise.  He answered “Yes.”  On the same trip, Biden met with auto suppliers impacted by the strike where MEMA (auto supplier trade group) asked him to provide federal assistance to ensure the viability of the idled parts suppliers.

In stock news, QCOM announced Tuesday that it has entered into a multi-year partnership with Japanese IT company NTT to develop a 5G ecosystem that promotes the adoption of 5G and “AI over 5G” in Japan.  At the same time, the CEO of FWONA (which owns 83% of SIRI) proposed that the radio unit of FWONA be spun off and then merged with SIRI.  Later, FSR closed up 9.60% (after trading in a volatile 20% range) after reaffirming its plan to increase vehicle deliveries to 300 per day later this year (and saying it had already produced 5,000 of its SUVs).  Elsewhere, LILM announced it has begun assembly of its jet-powered electric VTOL jet.  This comes just two months after successful tests of a full-scale prototype in Germany.  At the same time, MMM agreed to pay $10 million for violating sanction restrictions on sales to Iran. Later, ICPT received an unsolicited $19/share cash bid from Alfasigma.  This was an 82% premium on the price at the time but ICPT closed up more than 79% on the news.  At the same time, TGT reported that it would close nine stores across four states on Oct. 21, citing organized retail theft rings that were threatening employees, customers, and inventory shrinkage. 

In stock government, legal, and regulatory news, the Financial Times reported that TSLA (along with several European carmakers) is the subject of an EU probe into whether its cars (built in China) are receiving unfair subsidies.  Later, JPM paid $75 million to the US Virgin Islands to settle a lawsuit over the bank’s ties to Jeffrey Epstein.  Elsewhere, the FTC and 17 states filed suit against AMZN over alleged antitrust violations that allowed the giant to dominate large segments of online retail.  The case was assigned to Reagan-appointed judge Coughenour.  Later the Canadian government announced it will review the proposed merger between BG and Viterra (a company backed by GLCNF).  That merger would create another grain giant, close to the scale of competitors ADM and Cargill.  However, it would make a 3-way grain triopoly.  After the close, a federal judge in AM has overturned a jury verdict of $176.5 million against LLY in favor of TEVA over infringement on three patents.  Meanwhile, a federal district judge in Atlanta ruled in favor of a venture capital fund (backed by JPM, BAC, etc.) and against the conservative anti-diversity plaintiff that had charged the fund was acting illegally because it considered the racial identity of award recipients.  (This will be appealed as it was brought by the same group that was behind the anti-affirmative action decision by the Supreme Court earlier this year.)  Also after the close, the SEC announced that HYZN has agreed to pay $25 million to settle charges of fraud (without admitting guilt, naturally).  Finally, after the close, the FCC announced it would reintroduce “net neutrality” regulations to prohibit T, VZ, CMCSA, and others from blocking websites, slowing internet speeds, or charging higher prices for access to different websites.  This is a huge deal and has been fought tooth and nail by the big telecom and cable companies while it will be cheered by AMZN, NFLX, and other major content platforms.  The FCC will vote Oct. 19 on whether to solicit public comment (which is when the opponent media blitz will begin).

After the close, AIR, COST, and MLKN all reported beats on both the revenue and earnings lines.  The AIR and COST numbers were quarter-on-quarter increases, but despite its own “beats” the MLKN numbers were actually down almost 15% quarter-on-quarter.  Nonetheless, MLKN also raised its forward guidance.

Overnight, Asian markets were mixed but leaned toward the green side with only four of 12 exchanges in the red.  Hong Kong (+0.83%) was by far the biggest mover as the other moves in either direction were for less than half of a percent.  In Europe, we see a similar mixed picture taking shape at midday.  Greece (-1.52%) is the largest loser and Russia (+0.66%) is the biggest gainer.  However, as usual, the CAC +0.05%), DAX (-0.12%), and FTSE (-0.21%) lead the region on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.27% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.35% open at this hour.  At the same time, 10-year bond yields have backed up a bit again to 4.505% and Oil (WTI) is up another 1.42% to $91.69 per barrel.

The major economic news scheduled for Wednesday is limited to the August Durable Goods Order (8:30 a.m.) and EIA Weekly Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled before the opening bell are limited to PAYX.  Then after the close, CNXC, FUL, JEF, MU, and WOR report. 

In economic news later this week, on Thursday, we get Q2 GDP, Q2 GDP Price Index, Weekly Initial Jobless Claims, August Pending Home Sales, Fed Balance Sheet, and Fed Chair Powell speaks.  Finally, on Friday, the August PCE Price Index, August Goods Trade Balance, August Personal Spending, August Retail Inventories, Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year inflation expectations, Michigan 5-year Inflation Expectations are reported and Fed member Williams speaks.

In terms of earnings reports later this week, on Thursday, CAN, KMX, JBL, and NKE report.  Finally, on Friday, CCL reports.

In miscellaneous news, the Wall Street Journal reported that the tentative deal struck between Writers and Hollywood studios will allow the studios to train AI models on the work of the writers, although the writers would be compensated for the work trained upon.  (This may well leave writers vulnerable to replacement.  Studios have done similar things with actors, recording a day or two of lower-tier actors from many angles at scale rate and then using CGI trained on those recordings to produce realistic “cast of thousands” effects in many future movies.)  In related news, the Writers Guild union called for their strike to end today with a member vote on the tentative deal still pending.  Elsewhere, Reuters reported that OpenAI is in talks with institutional investors about selling existing shares at a price that values the company between $80 and $90 billion.  (For reference, earlier this year, OpenAI got an investment that valued the company at $30 billion.)  If completed, this would make OpenAI one of the most valuable private companies.  Finally, House Speaker McCarthy and his MAGA-placating approach have continued to make little (no) progress toward avoiding a government shutdown. Luckily, on the other side of the building, the Senate is working in a bipartisan fashion (led by both Majority Leader Schumer and Minority Leader McConnell) to move forward a short-term continuing resolution to fund the government through Nov. 17.  A procedural vote on this passed 77-19 and this CR also includes $6 billion for disaster relief and $6 billion in additional support for Ukraine.  Late Tuesday, moderate GOP members of the House said they are now willing to invoke a seldom-used “discharge vote” procedure to force a House vote on a CR negotiated between the moderate GOP members and Democrats.  Having the GOP Governance Caucus (Anti-burn it all down MAGA group) do the work of governing allows McCarthy to continue kowtowing to 20 extreme-right members while actually keeping the government operating. However, it’s unsure what that discharge vote might mean for McCarthy’s Speakership.

In late-breaking mortgage news, in China, police have placed the founder of the troubled China Evergrande Group in “police control.”  This is the latest indicator that a liquidation of the company may be in the cards and comes a day after creditors gave the company until October 30 to submit a debt restructuring deal to avoid their moving for that liquidation.  Back in the US, the Mortgage Brokers Assn. reports that the average rate for a conforming, 30-year, fixed-rate loan rose to 7.41% this week (up from 7.31% the week before).  As a result, new home loan applications fell 2% week-on-week (and were down 27% versus the same week last year).  At the same time, applications for loan refinancing fell 1% week-on-week (down 21% over the same week in 2022).

With that background, it looks like the Bulls are gapped us up in the premarket. However, so far in the early session, we are seeing black-bodied, “inside day” candles in all three major index ETFs. (This means that the premarket open was the early session high so far.) All three remain well below their T-line (8ema) and 50sma. The morning gap also did not give the DIA enough energy to retest its 200sma so far this morning. So, for now, the short-term trend is clearly remains headed lower with retests of the August and June lows as the apparent next target for the Bears (except in the SPY where those two targets have already been achieved). In terms of extension, as I said, all three major index ETFs are far below their T-line (8ema) and the T2122 indicator is also in the low end of its oversold range. This tells us we remain stretched and are in need of a bounce or at least a pause to relieve the pressure. However, we must remember the market can remain oversold (or overbought) longer than we can stay solvent betting against it.

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

Monday was another lackluster day in the market.  The SPY gapped down 0.24%, the DIA gapped down 0.28%, and the QQQ gapped down 0.23%.  The three major index ETFs then vacillated back and forth across their opening gaps until 11:15 a.m., when the Bulls moved the SPY and QQQ back up above the Friday closing level and they traded sideways in a tight range until 3:55 p.m.  Meanwhile, the DIA continued its meandering in the morning gap until 3:55 p.m.  However, the strongest candle of the day for all three was the last 5-minutes which took all three out on their highs of the day.  This action gave us a large, white-body Marubozu (shaved head) in the SPY, a white-bodied Piercing Candle in the QQQ, and what could be seen as a large-body, white Hammer in the DIA.  This all happened on less-than-average volume in all three major index ETFs.

On the day, seven of the 10 sectors were in the green with Energy (+1.20%) way out front leading the other sectors higher.  Meanwhile, Communications Services (-0.93%) was by far the biggest laggard sector.  At the same time, the SPY gained 0.42%, DIA gained 0.12%, and the tech-heavy QQQ gained 0.47%.  VXX was just on the green side of flat to close at 22.90 and T2122 climbed but remains in the oversold territory at 14.13.  10-year bond yields spiked above four-and-a-half percent to 4.531% while Oil (WTI) was just on the red side of flat to end the day at $89.88 per barrel. So, in the first 90 minutes of the day markets were undecided. They then made a small move higher only to be undecided again until the last 5 minutes.  All-in-all, it was a nothing day that did not change the support or resistance levels and did not show much of a change in sentiment.  At best it gave us a little relief from Bearish over-extension.

There was no major economic news reported Monday.  However, MCO (Moody’s) warned that a government shutdown would be bad for the US creditworthiness and the US credit rating would come under pressure.  In the process, MCO essentially issued a stern warning to Congress (in a way to the House GOP since they have decided to not reach across the aisle in the hope of a much more conservative Budget).  MCO is the only rating agency that still gives the US its top credit rating.

In Autoworker contract talks and strike news, less than a day after it ratified its new contract with F (by 54% for versus 46% against), Unifor (Canadian version of UAW) announced that its next negotiation target is GM Canada.  (The F contract provides the reinstatement of defined benefit programs, double-digit percentage raises, and a one-time $10,000/employee bonus.)  Meanwhile, in the US, after the close, F announced it will stop construction work on its planned $3.5 billion battery plant in MI.  The company cited its uncertainty about the ability to remain competitive while locked in contract negotiations.  The UAW responded by calling the move a “thinly veiled threat to cut jobs.”

In stock news, OpenAI announced that its ChatGPT engine now has voice and image interaction capabilities similar to AAPL’s Siri and AMZN’s Alexa services.  These are likely to be quickly added to the MSFT AI assistants built into Office, Bing, and other MSFT products.  SPOT is also using this to translate content into different languages.  Later, analysts began reporting inside information indicating that TSLA will be revising its Q3 delivery numbers in the next few days.  The analysts expect about a 2.5% cut in the number of vehicles actually delivered in Q3.  At the same time, MSTR announced that it has recently purchased another $147.3 million worth of Bitcoin bringing their Bitcoin holdings to $4.68 billion. Elsewhere, PFE announced it has restarted production at its NC plant that was damaged by a tornado on July 19.  PFE says it will have all of the plant restarted by year-end but will continue to see lower-than-previous production until mid-2024.  At the same time, QCOM denied published reports that it is closing its Shanghai China R&D facility.  QCOM admitted it will be reducing headcount but will not close the facility.  Over in Europe, NSANY (Nissan) announced that all new vehicles it sells in Europe will be fully electric by 2030.  After the close, COST announced it is now offering its members access to a $29/visit online primary-care visit, a $72/visit virtual checkup (including a standard lab panel), and a $79 online therapy session.  The service is available in all 50 states.  COST won’t accept health insurance since the service is primarily aimed at uninsured Americans.

In stock government, legal, and regulatory news, a German court ruled that NFLX is infringing on an AVGO patent related to high-efficiency video encoding.  The court then issued an injunction requiring that NFLX quit using the technology in question.  (This could reshape NFLX service performance and/or result in a deal very favorable to AVGO.  Elsewhere, MGM has been named in a class-action lawsuit filed Friday.  The suit alleges the name, address, email address, date of birth, social security number, driver’s license number, and other personal information of MGM loyalty program members were taken by hackers as a result of lax security (no encryption) during the Sept. 7 cyberattack.  At the same time, a subsidiary of DB has been fined $25 million by the SEC for misstating ESG reporting (greenwashing).  Later, the NHTSA said that TM recalled nearly 22k Tundra and Tundra hybrid trucks due to wrongly labeled carrying capacities.  Meanwhile, YELP has asked a judge to disqualify a law firm from defending GOOGL because the firm previously represented YELP on matters related to the YELP suit against GOOGL.  After the close, the NHTSA announced it opened an investigation into a JBLU flight on Monday that experienced severe turbulence, injuring 7 of the passengers and one of the flight crew.  Also after the close, AAL filed an appeal of the court ruling requiring it to end its “alliance” with JBLU.  (JBLU previously said it would not appeal in order to protect its $3.8 billion acquisition of SAVE.)

After the close, THO reported beats on both the revenue and earnings lines.  However, despite being significant sales and earnings beats, the numbers showed a quarter-on-quarter decline of 28%.  So far this morning, FERG beat on both the revenue and earnings lines.  However, UNFI missed on revenue while beating on earnings.  It is worth noting that FERG raised its forward guidance while UNFI lowered guidance.  (SNX and CTAS report closer to the opening bell.)

Overnight, Asian markets were nearly red across the board with only Malaysia (+0.15%) hanging onto green territory.  Meanwhile, Hong Kong (-1.48%), South Korea (-1.31%), Japan (-1.11%), and Taiwan (-1.07%) led the rest of the region lower.  In Europe, we see a similar picture taking shape at midday.  Only Greece (+0.40%) and Denmark (+0.26%) are in the green while the CAC (-0.78%), DAX (-0.73%), and FTSE (-0.01%) lead the region lower.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.39% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.54% open at this hour.  At the same time, 10-year bond yields are back down to 4.493% and Oil (WTI) is off two-thirds of a percent to $89.08 pre barrel in early trading.

The major economic news scheduled for Tuesday includes Building Permits (8 a.m.), Conference Board Consumer Confidence and August New Home Sales (both at 10 a.m.) and API Weekly Crude Oil Stock report (4:30 p.m.).  We also have another Fed speaker (Bowman at 1:30 p.m.).  The major earnings reports scheduled before the opening bell are limited to CTAS, FERG, SNX, and UNFI.  Then after the close, AIR, COST, and MLKN report. 

In economic news later this week, on Wednesday, August Durable Goods, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get Q2 GDP, Q2 GDP Price Index, Weekly Initial Jobless Claims, August Pending Home Sales, Fed Balance Sheet, and Fed Chair Powell speaks.  Finally, on Friday, the August PCE Price Index, August Goods Trade Balance, August Personal Spending, August Retail Inventories, Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflations Expectations, Michigan 5-year Inflation Expectations are reported and Fed member Williams speaks.

In terms of earnings reports later this week, on Wednesday, we hear from PAYX, CNXC, FUL, JEF, MU, and WOR.  On Thursday, CAN, KMX, JBL, and NKE report.  Finally, on Friday, CCL reports.

In miscellaneous news, Bloomberg reported that the major exchanges quietly changed the waiting period between listing and options being allowed to trade.  The waiting period was reduced from four to two days after listing to chase the volume.  (Options trading volume has more than doubled since 2019.)  Elsewhere, Reuters reported Monday that the SEC has collected WhatsApp, Signal, and other messaging service communications for thousands of major investment firm employees.  The report said the “illegal off-channel” communication investigation is expanding.  CG, APO, KKR, TPG, and BX, are among the listed companies involved in the expansion.  Meanwhile, financial services firm AON released a report saying that the pension plans of the largest US companies are the healthiest they have been in 12 years after years of record corporate profits.  The report said the average “funded ratio” of S&P 500 companies was 102% as of last Thursday.  (This is the highest ratio since prior to 2011.)

In late-breaking mortgage news, industry analyst Insider Intelligence reported this morning that META Threads is struggling to grow.  The report said Threads ranks above only Tumblr among the social media platforms in terms of US users.  In politics, Congress returns from the 4.5-day weekend they were given when the right-wing part of the GOP caucus killed Speaker McCarthy’s move for a continuing resolution last Thursday.  McCarthy said yesterday that the House will vote again on a 45-day CR and budget bills today with a government shutdown looming Saturday.  Elsewhere, President Biden will join the UAW on the picket line today (with the former President expected Wednesday so that he can counter-program the next GOP debate instead of participating).  Elsewhere, a senior AAPL VP will be testifying today in the GOOGL antitrust trial.  Sr. VP Cue will testify about how and why AAPL chose GOOGL as its default search engine for iPhones.

With that background, it looks like the Bears are gapping us down in premarket. So far in the early session, we are seeing small-bodied, white, indecisive, “inside day” candles in all three major index ETFs. All three remain well below their T-line (8ema) and 50sma. So, for now, the short-term trend is clearly headed lower with retests of the August and June lows as the apparent next target for the Bears (except in the SPY where those two targets have already been achieved). In terms of extension, as I said, all three major index ETFs are far below their T-line (8ema) and while the T2122 indicator is also in its oversold range, it has climbed up off the extreme end of that 20-point span. This tells us we remain a bit stretched, but the bounce Monday reduced the pressure at least a little.

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.

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

Markets gave us a rest or modest rebound on Friday.  The SPY gapped up 0.27%, the DIA opened almost flat at +0.03%, and the QQQ gapped up a respectable 0.55%.  At that point, all three major market index EFS ground sideways for 30 minutes before putting in a modest morning rally that reached the highs of the day at about 11:40 a.m.  Then all three wobbled sideways for an hour.  However, the afternoon saw major whips in both directions, ending the day on the steepest selloff of the day in the last 30 minutes.   This action gave us black-bodied candles with significant upper wicks and tiny lower wicks.  All three major index ETFs remain extended below their T-line (8ema).  The DIA is also approached but not yet testing its 200sma.  This all happened on basically average volume in the SPY, DIA, and QQQ.

On the day, seven of the 10 sectors were in the red with Consumer Defensive (-0.45%), Consumer Cyclical (-0.43%), and Financial Services (-0.42%) leading the other sectors lower.  Meanwhile, Technology (+0.33%) and Energy (+0.25%) held up better than the other sectors.  At the same time, the SPY lost 0.22%, DIA lost 0.29%, and the tech-heavy QQQ gained 0.01%.  VXX gained a quarter of a percent to close at 22.87 and T2122 climbed but remains in the low end of the oversold territory at 4.95.  10-year bond yields fell down to 4.438% while Oil (WTI) gained 0.78% to end the day at $90.33 per barrel.  So, the first half of the day was the pause and modest bounce we might have expected after two strong days of bearish move.  However, then afternoon volatility took over with the Bears getting the best of the action.

The major economic news reported Friday was limited to Preliminary S&P Global Mfg. PMI which came in better than expected at 48.9 (compared to a forecast of 48.0 and the previous reading of 47.9).  However, while better than anticipated, the value below 50 indicates contraction.  At the same time, the S&P Global Services PMI came in a bit below the predicted at 50.2 (versus a forecast of 50.6 and the prior value of 50.5).  Just the opposite of Manufacturing, although the value was below expectation, a reading above 50 indicates expansion in the Services sector.  In addition, the S&P Global Composite PMI was reported at 50.1 (compared to a prior value of 50.2) 

In stock news, investing.com reported Friday that TSLA is in negotiations with the Indian government over opening a battery factory in that country.  At the same time, in non-strike news, SLTA announced it will invest $508 million into their plant in Brazil, in particular in new product development.  Elsewhere, MGM announced it has lost over $52 million in revenue due to the cyberattack suffered more than a week ago.  (This does not include cost to mitigate, instead referring only to lost sales.)  Later, AMZN said it would begin placing ads in Prime Video streaming shows in 2024, selling ad-free access for an extra fee on top of the Prime charge. In other AMZN news, the company said it would hold another two-day “Prime Day” to start on October 10 after previous successes.  After the close, BX announced it was canceling the planned conversion of Class A shares as less than 20% of the needed shares were tendered for conversion.  Meanwhile, GT announced it will cut 700 jobs in its Asia Pacific region, selling 100 retail stores in the process.  After the close, the EEOC sued UPS for disability discrimination in the company’s hiring practices.  After the close, the Wall Street Journal reported that RAD is negotiating with creditors over the terms of its bankruptcy and will liquidate 400-500 stores.  (RAD operates 2,330 stores in 17 states.)  Also after the close, Reuters reported that ORCL has prepaid $104.1 million for CPU chips from startup Ampere Computing according to ORCL’s regulatory filing Friday.  Ampere builds chips based on the newly-IPOed ARM architecture.  Finally, the UK competition watchdog agency signaled Friday that they are willing to approve the MSFT acquisition of ATVI.  This was the final hurdle to the $69 billion deal closing.

In stock government, legal, and regulatory news, a UK-based retail conglomerate (Frasers) has asked a NY court to compel MS CEO Gorman to provide evidence in a UK lawsuit against MS.  (The suit revolves around a $1 billion option position margin call on Frasers.)  Elsewhere, the NHTSA announced Friday they have opened a new investigation into 240k F 2018-2021 EcoSport vehicles over consumer complaints of oil pump failures causing a loss of power while in motion.  At the same time, Politico reported that the FTC will file its long-awaited antitrust suit against AMZN on Tuesday. Later, GS agreed to pay a $6 million fine to the SEC for providing inaccurate and/or incomplete trading data regarding 163 million transactions over a decade.  ($0.036 per error seems like a pretty sweet deal for GS, but what do I know.)  At the same time, private broker/dealer Citadel (famous for buying orders) agreed to pay the SEC $7 million for illegal short sales.  By mid-afternoon, an auto industry group told Reuters that carmakers do not intend to “immediately comply” with an MA law requiring them to share vehicle data with independent repair shops, despite the NHTSA reversing course and saying it was safe for carmakers to do so.  This leaves auto manufacturers open to the possibility of state and federal (FTC) action.

In Autoworker contract talks and strike news, the UAW reported that it had made real progress in talks with F.  However, the union said there was no negotiation progress in talks with GM and SLTA.  As a result, the union expanded its strike to include 38 parts and distribution facilities of GM and STLA across 20 states.  This will increase the number of striking workers from 12,700 to 18,300.  (3,500 of the 5,600 newly striking people work for GM.)  After the UAW invited him, President Biden announced he would visit the picket line Tuesday.  (The leading GOP candidate then said he would visit MI on Wednesday to address autoworkers.)  Later, in a META live event, UAW President Fain detailed the progress that had been made with F including progress on pay, job tiers, profit sharing, and cost of living increases.  (That last issue was significant since the UAW says GM and STLA have not offered any cost-of-living increases over the next contract.  Of course, that is just the UAW side of that issue.)  Then on Sunday, the Canadian union Unifor (Canadian version of UAW) announced its members had voted to approve the tentative agreement the union reached with F last week.

Overnight, Asian markets were mixed with 5 in the red, 5 in the green, and 1 is unchanged.  Japan (+0.85%), Taiwan (+0.66%), and Singapore (+0.33%) pacing the gainers.  Meanwhile, Hong Kong (-1.82%), Shenzhen (-0.57%), and Shanghai (-0.54%) led the losses after fears of a liquidation of China Evergrande Group hit the Chinese markets late.  However, in Europe, we nearly see red across the board at midday with only Greece (+0.64%) hanging onto the green territory.  The CAC (-0.47%), DAX (-0.59%), and FTSE (-0.51%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat.  The DIA implies a -0.04% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.07% open at this hour.  At the same time, 10-year bond yields have jumped back up to 4.491% and Oil (WTI) is just on the green side of flat at $90.10 per barrel in early trading.

The major economic news scheduled for Monday is limited to Fed Member Kashkari speaking after the close at 6 p.m.  There are no major earnings reports scheduled before the opening bell.  However, after the close, THO reports. 

In economic news later this week, on Tuesday we get Building Permits, Conference Board Consumer Confidence, August New Home Sales, API Weekly Crude Oil Stock report, and we have another Fed speaker (Bowman at 1:30 p.m.).  Then Wednesday, August Durable Goods, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get Q2 GDP, Q2 GDP Price Index, Weekly Initial Jobless Claims, August Pending Home Sales, Fed Balance Sheet, and Fed Chair Powell speaks.  Finally, on Friday, the August PCE Price Index, August Goods Trade Balance, August Personal Spending, August Retail Inventories, Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year inflation expectations, Michigan 5-year Inflation Expectations are reported and Fed member Williams speaks.

In terms of earnings reports later this week, on Tuesday, CTAS, FERG, SNX, UNFI, AIR, COST, and MLKN report.  Wednesday, we hear from PAYX, CNXC, FUL, JEF, MU, and WOR.  On Thursday, CAN, KMX, JBL, and NKE report.  Finally, on Friday, CCL reports.

In miscellaneous news, on Friday, House Speaker McCarthy told reporters that he felt no need to reach across the aisle to Democrats, instead saying Republicans have a majority and can solve the budget crisis themselves.  Since he gave the House 4.5 days off this weekend, a government shutdown is now a virtual certainty.  The House returns Tuesday.  The Speaker says the House GOP will rewrite the 12 appropriations bills themselves by lumping them into 4 bills (although decoupling was the whole idea being appropriations bills on top of a total spending amount in the first place) in order to obtain a much more conservative budget prior to entering into negotiations with the Senate…previous agreements and votes during the debt ceiling negotiations in June, be damned.  At the same time, the Dept. of Commerce finalized rules aimed at preventing China from gaining any benefit from the $52.7 billion provided by the Chips and Science Act.  (The rules aim to stop China from benefitting from and research, workforce development…hiring people trained with those funds…or actual production.)  Elsewhere, BAC reported Friday that a record $19 billion was withdrawn from the stock market in the ending then.  At about the same time, the Treasury Dept. reported that over the last year, US household (not institutional) holdings of US bonds have increased from $1 trillion to $2.5 trillion.

In late-breaking news, the Hollywood Writers Union has reached a tentative deal with studios. The hold-up over the weekend had to do with writers being replaced by AI. However, it should be noted that the final contract language is still not written. So, there is still a possibility of disagreement and the union members still have to approve. Regardless, the Actor’s union still remains on strike. Elsewhere, AMZN announced early today that it will invest up to $4 billion into startup AI firm Anthropic (which is a direct competitor to OpenAI that MSFT has put billions into). AMZN will have an unspecified “minority ownership” of Anthropic which recently put out its own AI product named Claude 2. This move will better position AMZN to compete in the AI space with MSFT, GOOGL, and the lesser competitor META. Finally, a senior Japanese Bank (Nomura) executive has been barred from leaving China. He apparently is not under arrest but is not allowed to leave the country. Reportedly, the restriction is linked to a job this executive held prior to joining Nomura in 2018.

With that background, it looks like the Bears have maintained control over the weekend. Premarkets all gapped up modestly but have then sold back down to just below Friday’s closing level, giving us black candles in the early session. So far, that does not seem like a motivated Bear move but the upper hand is still on their side and is picking up a little steam as we start the day. All three major index ETFs remain well below their T-line (8ema) and 50sma. So, for now, the short-term trend is clearly headed lower with a retest of the August and June lows as the apparent next target for the Bears (except in the SPY where those two targets have already been achieved). In terms of extension, as I said, all three major index ETFs are far below their T-line (8ema) and the T2122 indicator is also now at the low end of its oversold range. This tells us we remain stretched, with the possible exception of the stodgy, mega-cap DIA. So, we should see a pause or relief bounce 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

It was all Bears, all the time on Thursday with the market gapping lower at the open (down 0.66% in the SPY, down 0.34% in the DIA, and down 1.03% in the QQQ).  At that point, all three major index ETFs ground sideways, with a modest bearish trend up until 1:30 p.m.  However, at that point, the news broke that the GOP members of the House had again rejected House Speaker McCarthy’s attempt to pass either a continuing resolution or a Defense Appropriations bill.  In response, McCarthy adjourned the House for the week, which makes a government shutdown on October 1 a high-probability event.  For the market, the route was on.  All three major index ETFs sold off hard and steadily the rest of the day, led lower by the QQQ.  All three closed near their low of the day. This action gave us gap-down, large, black candles with now lower wicks and only small upper wicks.  SPY broke down through any potential support from the August lows and now sits on the late-June lows.  DIA sits right at its August low and QQ still has about 0.9% before reaching that milestone.  All three could also be seen as Head & Shoulders patterns near, at, or just past the neckline.  This happened on well-above-average volume in the QQQ and just-above-average volume in the SPY and DIA.

On the day, all 10 sectors were in the red with Basic Materials (-2.19%) surprisingly out in front with Technology (-1.96%) next in line leading the other sectors lower.  At the same time, the SPY lost 1.65%, DIA lost 1.09%, and the tech-heavy QQQ lost 1.83%.  VXX gained 7.70% to close at 22.81 and T2122 dropped down to the low end of the oversold territory at 2.55.  10-year bond yields spiked up to 4.494% (a 16-year high) while Oil (WTI) sat basically flat on the day at $89.58 per barrel.  So, what happened?  It’s hard to tell if it was follow-through to the Fed’s hawkish tone or early morning rumblings of another GOP failure on the appropriations front (which first hit during premarket) that caused the gap lower.  Either way (or even if it was something else), the Bears started the day in charge and the best markets could do was tread water.  However, when Republicans definitely failed to support the Speaker’s move and he sent the House home in reaction, the bottom fell out, and the Bears got to stretch their legs the last couple hours of the day.

The major economic news reported Thursday included the Q2 Current Account (difference between imports and exports), which came in better than expected (but still a sizable deficit) at -$212.1 billion, compared to a forecast of -$221.0 billion and even slightly better than the Q1 reading of -$214.5 billion.  At the same time, Weekly Initial Jobless Claims also came in better than was expected at 201k (versus a forecast of 225k and the prior week’s value of 221k).  We also got the Sept. Philly Fed Mfg. Index, which came in worse than expected at -13.5 (compared to a forecast of -0.7 and much worse than the previous reading of +12.0).  The Sept. Philly Fed Employment Index improved a bit but remains negative at -5.7 (versus a -6.0 previous value).  Later, August Existing Home Sales were reported at 4.04 million (compared to a forecast of 4.10 million and the previous reading of 4.07 million).  This was a decline of 0.7% month-on-month, which is slightly better than the July decline of 2.2%.

In stock news, WMT is considering another significant expansion, looking to move into the healthcare sector.  Reports have emerged that talks are underway between WMT and private primary senior care provider ChenMed, which operates 100 health facilities across 15 southeastern states. Then at mid-morning, Rupert Murdoch announced he would step down as chair of FOXA and NWSA in November, naming his oldest son Lachlan as his successor. Elsewhere, GOOGL was in damage control mode Thursday, telling Reuters it does not foresee any change in its relationship with AVGO. This came after a media report said that GOOGL sources had said the company was considering dropping AVGO as a supplier of AI chips as early as 2027 (over a price dispute) and has already been working with MRVL to replace AVGO.  In acquisition news, CSCO announced it is acquiring SPLK for $157 per share ($28 billion) in an all-cash deal.  At the same time, MMP received shareholder (unit holder) approval for its acquisition of OKE for $19 billion.  Later, GFS was awarded a 10-year, $3.1 billion Dept. of Defense contract.  At the close, Reuters reported it has confirmed that CX is in talks with Mexican banks in a bid to refinance its $3 billion credit facility.  After hours, WBD announced it has expanded its UK studio production capacity by more than 50%.

In stock government, legal, and regulatory news, EU’s antitrust regulators announced they will decide whether to permit WHR to sell its European appliances business to Turkish firm Arcelik.  (Arcelik would own 75% with WHR retaining 25% ownership if the deal is approved.)  Later, the FAA followed the European lead and issued an alert to warn airlines that unapproved parts may be installed in the GE CF6 jet engines.  These fraudulent and unapproved parts may be present in thousands of jet engines globally.  At mid-afternoon, a US federal judge rejected moves by eight big banks to force cities to pursue claims individually.  The judge ruled that BAC, C, JPM, MS, WFC, GS, BCS, and RY must face a class-action suit brought by several cities over the bank’s alleged collusion to drive up interest rates on the cities’ municipal bonds.  After the close, the EPA announced that soil sampling near two PA towns indicates that there is “no immediate threat to the health of people nearby that would warrant a government response.”  This was in connection to testing done after a Wall Street Journal article outlining the paper’s investigation found lead-coated telecom cables buried near two towns in PA.  (VZ and T both initially said they would remove those cables but then declined and hired outside testing agencies once the removal cost was discovered.) 

In Autoworker contract talks and strike news, the UAW is expected to expand its strike against the Big 3 automakers at Noon today.  Sources told Reuters that while all the parties remain at the bargaining table as of last night, GM had offered nothing but a restatement of its earlier offer on Thursday.  F said it remains at the table with no other comment.  STLA offered no comment at all Thursday but had said Wednesday that its Tuesday offer dealt with subcommittee demands (nonfinancial issues).

Overnight, Asian markets leaned toward the green side.  Only Japan (-0.52%), India (-0.34%), and South Korea (-0.27%) were in the red.  Meanwhile, Hong Kong (+2.28%), Shenzhen (+1.97%), and Shanghai (+1.55%) surged to lead most of the region higher.  In Europe, we see the opposite picture taking shape at midday. Only four bourses, led by Greece (+1.47%), are in the green.  On the other side, the CAC (-0.55%) and the DAX (-0.19%) lead the 11 down exchanges lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.05% open, the SPY implies a +0.17% open, and the QQQ implies a +0.37% open at this hour.  At the same time, 10-year bond yields a down a bit to 4.478% and Oil (WTI) is back up by 1.08% to $90.57 per barrel in early trading.

The major economic news scheduled for Friday includes S&P US Mfg. PMI, S&P US Services PMI, and S&P Global Composite PMI (all at 9:45 a.m.).  There are no major earnings reports scheduled for Friday, either before the opening bell or after the close. 

In miscellaneous news, Bloomberg reports that Canada is ready to change oil markets in 2024.  The completion of their internal Trans-Mountain pipeline will allow Canada to expand its daily oil output by 600k barrels piped directly to the port of Vancouver and WA state.  Then, overnight, MCD announced it is raising the royalty fees charged to its new franchisees for the first time in 30 years.  Beginning January 1, all new MCD restaurants will pay 25% more, up from 4% to 5% of sales back to the corporation. (The increase does not affect existing restaurants.  For reference, 95% of the 13,400 MCD restaurants are franchises.)  Finally, the proximate reason for China’s stock surge today is that the country’s leadership leaked to the press that is it considering relaxing the country’s rules on foreign ownership in publicly traded companies.  (Now, total foreign ownership is limited to 30%, and single-entity foreign ownership is capped at 10%.)  You see, China has a problem.  With corruption widespread (and the fighting of corruption creating headlines that make the perception of corruption even worse than the amount that does exist), the propensity for government leaders (and whole groups of company executives) to “just vanish,” and limits on the amount of ownership/control that non-Chinese can have, China is finding it hard to draw in new investors from abroad…despite a potential market of more than a billion people.  So, the loosening of foreign ownership restrictions is a first step toward addressing the issue and drawing in new capital to help jumpstart the country’s floundering post-COVID recovery.

With that background, the premarket is giving us small, gap-up, and white-bodied candles so far. There is nothing in that early session action that would indicate a significant shift from the uber-Bearish move of the last two days. All three major index ETFs remain well below their T-line (8ema) and 50sma. So, for now, the short-term trend is clearly headed lower with a retest of the August and June lows as the apparent next target for the Bears. With that said, the SPY and QQQ are far below their T-line (8ema) and the T2122 indicator is now at the low end of its oversold range. This tells us we are very stretched, with the possible exception of the stodgy, mega-cap DIA. So, we should see a pause or relief bounce soon. Add to that the fact that this is Friday and you could very well see some Bullish action as the Shorts take profits heading into the weekend. Either way, you should prepare your own account for the weekend, taking profits where you have them, perhaps lightening up, and hedging individual positions or the whole portfolio’s Deltas.

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 a typical Fed Day.  Everybody seemed to be waiting on the FOMC.  The SPY gapped up 0.29%, DIA gapped up 0.27%, and QQQ gapped up 0.27%.  From there, SPY traded sideways in a tight range until 2 p.m.  Meanwhile, DIA drifted very, very slowly higher until 2 p.m.  QQQ took the opposite course selling off until 11:30 a.m. and then trading sideways back at Tuesday’s closing level until 2 p.m.  At 2 p.m., Mr. Market was disappointed by the Fed statement, jerking lower for 5 minutes only to recover over the next 30 minutes.  However, once Fed Chair Powell began speaking, it was “Katy bar the door” as all three major index ETFs sold off sharply and steadily right into the close.  This action gave us large black Bearish Engulfing candles in the SPY and QQQ.  The DIA printed a black-bodied candle with a large upper wick.  All three also failed a retest of their t-line (8ema).  This all happened on below-average volume in the SPY and QQQ with average volume in the DIA.

On the day, seven of the 10 sectors were in the red with Technology (-1.40%) way out in front leading the rest lower.  Meanwhile, Communication Services (+0.27%) held up better than the other sectors.   At the same time, the SPY lost 0.92%, DIA lost 0.22%, and the tech-heavy QQQ lost 1.44%.  VXX gained 3.77% to close at 21.18 and T2122 fell only slightly and remains at the low end of the mid-range at 23.21.  10-year bond yields spiked up to 4.395% while Oil (WTI) fell 1.02% to end the day at $90.27 per barrel.  So, again it was a typical Fed Wednesday where we saw price largely drift sideways until 2 p.m., followed by a fast knee-jerk, slow recovery, and then another strong move.  Just don’t be surprised if there is another reaction at the open or early Thursday after Mr. Market has had a night to sleep on it and get his emotions in check. 

The major economic news reported Wednesday included EIA Weekly Crude Oil Inventories which saw a drawdown of 2.135 million barrels.  This was interestingly far less of a draw than the API reported Tuesday night and was just slightly less than the forecast of 2.200 million barrels.  However, it was down sharply compared to the prior week’s 3.954-million-barrel inventory build.  With that said, the big show Wednesday was the Fed.  As expected, the FOMC kept the Fed Funds Rate unchanged at 5.25% – 5.50%.  The “Dot Plots” were also released showing the current Q3 Fed Funds Rate estimate is 5.6% (which is a bit odd since we are sitting well below that and there is not another FOMC meeting in Q3).  One year out, the Q3 projection is 5.1% (which is greatly increased from the prior prediction of 4.6%).  However, that implies two rate cuts between now and the end of 2024.  This is what really spooked markets as the prior plots implied four cuts next year.  Two years out, again we see a major revision upward in the forecast to 3.9% (up from 3.4%).  Three years out the Fed average forecast is for 2.9%, which is down from the previous 3.1%.  Then the Long-Term Fed Funds Rate Projection is 2.5%, which is unchanged from the previous forecast.  Also buried in the Fed report was a significant increase in the Fed expected GDP for 2023, up from 1.0% in June to now expected 2.1% growth this year.  They also expect far less unemployment than they previously did.  In June they expected unemployment to top out at 4.5% in 2024, now they see 4.1% as the terminal unemployment rate.  (We are currently at 3.8% unemployment.) 

The Fed statement still implied one more rate hike this year and stiffened the hawkish “higher for longer” stance.  Then during his press conference, Chair Powell said that a soft landing is not the base case.  He said, “No, I would not do that … I’ve always thought that the soft landing was a plausible outcome … I do think it’s possible.”  Still, regardless of his words, the data released absolutely screams “soft landing” with higher GDP estimates, reduced unemployment expectations, and projected rate cuts (new cycle) starting in a year or less.  So, the bottom line is that the Fed did exactly what was expected, holding rates steady.  They also reinforced what they said they were going to do…keep rates higher longer.  Finally, they told us they are very nearly done raising rates and see us having the softest of landings, just as we have seen in the economy.  (Yet the market took the news poorly because it was hoping for rate cuts to come early in 2024 and continue steadily that year.)

In stock news, UL has hired MS in a new effort to sell its Q-tips and other personal care brands.  At the same time, French supermarkets announced they would be pressing suppliers to cut prices by up to 5%.  Reuters reports this move is expanding in Europe and companies like the aforementioned UL, PEP, KO, and other food and consumer goods companies will face pricing pressure going forward.  Later, Reuters reported that a consortium including KKR and APO is looking to buy the GreenSky Lending unit from GS.  The transaction is now expected to be in the $500 million range, which is a significant haircut from the $2.4 billion GS paid to buy it in September 2021.  At the same time, QCOM announced it is now entering the WIFI Router market.  (It was already a major supplier to the companies in that market.)  In the announcement, QCOM said it has orders in place from CHTR for this new line of products. Elsewhere, BAC announced it is raising the company’s minimum wage to $23/hour effective in October, with a target of raising it to $25/hour by 2025.  (This was a $1/hour increase over the company’s current minimum of $22/hour.)  Later, AMZN announced it plans to hire 250k extra holiday workers for its distribution and delivery units.  By mid-afternoon, it was announced that WDC is considering a split (splitting its hard drive unit from its flash memory business) of the company based on calls from activist investors Elliott Investment Mgmt.  At the same time, it emerged that WDC is also in merger talks with the owners of Kioxia (formerly Toshiba’s flash memory division).

In stock government, legal, and regulatory news, a federal judge in New York rejected an NFLX dismissal motion and ordered the company to face a defamation lawsuit from a Manhattan prosecutor portrayed in one of their crime dramas.  Later, a federal court in TX dismissed the shareholder case against TSLA related to a toxic workplace causing financial harm to the plaintiffs.  However, it was dismissed for evidential deficiencies without prejudice, meaning the plaintiffs can amend the suit and resubmit it later. Later, Bloomberg reported that XOM is lobbying President Biden and other administration officials to allow hydrogen derived from natural gas to be eligible for environmental tax credits available under the 2022 Inflation Reduction Act.  (Those credits are currently reserved for solar, wind, battery minerals, and “pure” hydrogen projects.  Elsewhere, GE filed suit against a supplier (AOG Technics) who was implicated in a scandal over fake components and forged certifications identified by the EU Aviation Safety Agency.  At the same time, RYAAY (Ryanair) has been notified that Italy’s antitrust agency has opened an investigation of the company over potential abuse of a dominant market position.  Later, AZN was sued in the US by a former senior director who claimed the company had refused to pay $189k in owed bonuses and stock options because she worked from home more than two days per week.  In the “you can’t make this stuff up” department, attorneys who sued TSLA board members, forcing them to return $700 million in excess pay have now filed with the court seeking $229 million ($10,690/hour) in attorney fees.  After the close, AMZN said it would be dropping a planned new fee for merchants who do not use its shipping services in the face of an expected FTC lawsuit.

In Autoworker contract talks and strike news, Canadian Unifor union workers will vote on the tentative deal reached with F on Saturday.  Meanwhile, in the US, UAW strikes are expanding with 190 union workers going on strike against an MBGAF (Mercedes) supplier in AL.

After the close, KBH reported beats on both the revenue and earnings lines.  It also raised its forward guidance.  Meanwhile, FDX missed on revenue while beating quite significantly ($4.55/share actual vs. $3.70/share consensus estimate) on earnings.

Overnight, Asian markets were nearly red across the board with only Thailand (+0.42%) staying in the green.  Meanwhile, South Korea (-1.75%), Japan (-1.37%), and Australia (-1.37%) led the region lower.  In Europe, we see the same picture taking shape at midday.  Only Greece (+0.11%) is in the green while the CAC (-1.56%), DAX (-1.20%), and FTSE (-0.71%) lead that region lower.  In the US, as of 7:30 a.m., Futures are pointing to a down start to the day.  The DIA implies a -0.52% open, the SPY is implying a -0.77% open, and the QQQ implies a -1.02% open at this hour.  At the same time, 10-year bond yields are spiking to 4.441% and Oil (WTI) is down two-thirds of a percent to $89.08 per barrel in early trading.

The major economic news scheduled for Thursday includes Q2 Current Account, Weekly Jobless Claims, Philly Fed Mfg. Index, and Philly Fed Mfg. Employment (all at 8:30 a.m.), August Existing Home Sales (10 a.m.), and Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for Thursday include DRI and FDS before the open.  Then, after the close, there are no earnings reports scheduled.

In economic news later this week, on Friday, S&P US Mfg. PMI, S&P U Services PMI, and S&P Global Composite PMI are reported.

In terms of earnings reports later this week, on Friday, there are no major earnings reports scheduled

The following long paragraph is about dysfunctional government.  Skip it if you prefer.  I feel this is important to the market because stock markets tend to go down in the face of dysfunctional government, including shutdowns, and the credit rating of the US is directly related to downgrades from rating agencies likely…which affects bonds and then markets as well.  At any rate, in the Senate Majority Leader Schumer had to use a fairly rare procedural maneuver Wednesday night to sidestep culture war obstructionist Senator Tuberville’s non-filibuster hold on government business.  (Tuberville did not fight Schumer’s move because the move relieved pressure he had been getting from colleagues in his own party while still allowing him to continue his farce blockage).  The move by Schumer let the Senate vote on the appointment of a new Chair of the Joint Chiefs of Staff (Air Force General Brown), which they confirmed by a vote of 83-11.  Two other high-profile positions (Commandant of the Marine Corps and Army Chief of Staff) are expected to be voted on today using the same procedural move, with similar results expected.  However, more than 300 other senior military officers (unit and base commanders in many cases) remain blocked (leaving their positions filled by “acting commanders” due to the anti-governance Senator. The Senate rules allow any single obstructionist Senator to halt governance for any even completely unrelated reason.  Meanwhile, in the House, after the close, Speaker McCarthy said he will try again today to pass the Defense Appropriations bill (which failed its vote on Tuesday).  It appears McCarthy thinks he has now placated the 5 extremists from his party who voted against the bill Tuesday.  (As opposed to compromising with the other party to gain a broad consensus, because party is more important than country.  Besides the job of Congress is not to pass laws in the interest of all the people, but instead to rule over the opposing party and take as much as you can from “their side” while blaming them for doing what you’re doing.)  The fear, of course, is that if those 5 were bought off, that in itself is a good incentive for another tiny group to bolt (or threaten to do so) in order to get their share of the appeasement. Another example of the tyranny of the minority. And with that taking place, there are eight business days left for the House to pass a continuing resolution to avoid a government shutdown (or, in a less likely scenario, pass 12 appropriations bills, get them through the Senate, reconcile the two versions, pass the revisions in both Houses and get President Biden’s signature). 

With that background, the premarket is telling us the rout is continuing with Bears on the warpath. All three of the major index ETFs gapped down to start the early session and have followed through with strong bearish moves. All three remain below their T-line (8ema) and 50sma. So, for now, the short-term trend is clearly headed lower with a retest of the mid-to-late-August low in the cards for SPY today with DIA headed in that direction and QQQ probably still a day or so away from such a retest. In terms of extension, the premarket move has all three major index ETFs stretched below their T-line (although QQQ is clearly the most stretched). However, the T2122 indicator is still just in the lower side of its mid-range. So, it is not extremely clear whether we are stretched enough to see a reversal 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