Markets diverged a bit at the open following NVDA’s blowout results the night before.  SPY gapped up 0.38%, DIA gapped down 0.11%, and QQQ gapped up 0.94%.  DIA did its best to catch up by rallying sharply the first 30 minutes of the day.  However, QQQ was already throwing the mega-caps a curve by reversing and selling off hard at that same time.  Things got back in sync at 10 am as all three major index ETFs then went on to sell off the rest of the day, closing very near the low of the day.  This action gave us large, black, Bearish Engulfing candles in the SPY and QQQ.  Both of those index ETFs also crossed back below their T-line (8ema) in the process.  For its part, DIA failed a retest of its own T-line on a large, black-bodied candle with a large upper wick.  DIA also fell down out of its four-day consolidation.  All three also retested and failed their 50sma, thus giving us a Blue Ice Failure pattern (with the exception that only QQQ has enough space left down to its 200sma to qualify as a Blue Ice Failure).  

On the day, all 10 sectors were in the red with Technology (-2.17%) and Consumer Cyclical (-1.92%) way out front leading the way lower with Financial Services (-0.32%) and Communications Services (-0.35%) holding up better than the other sectors. At the same time, the SPY lost 1.39%, DIA lost 1.10%, and QQQ lost 2.14%. VXX popped up 4.12% to 25.30 and T2122 dropped back down into the oversold territory to 10.06.  10-year bond yields jumped back up to close at 4.241% while Oil (WTI) was flat to close at $78.88 per barrel.  This happened on slightly above-average volume in the QQQ and average volume in the SPY and DIA.  So, the profit-taking off the opening pop was dramatic and lasted all day Thursday.  DIA has now taken out its uptrend (stretching back to October of 2022).  QQQ is right at (and retesting) its uptrend line stretching back to January.  And SPY remains the only one of the major index ETFs still above and not yet retesting its bullish trend stretching back to mid-October 2022.     

The major economic news reported Thursday included July Durable Good Orders, which came in lower than expected at -5.2% (compared to a forecast of -4.0% and even worse than the June reading of -4.4%).  This included July Core Durable Goods Orders that were reported better than expected at +0.5% (versus a forecast of +0.2% which was also the June value).  At the same time, Weekly Initial Jobless Claims were reported at 230k (versus a forecast of 240k and the previous week’s 240k number).  Later, after the close, the Fed Balance Sheet continued to show its slow reduction as it shrank from $8.146 trillion to $8.139 trillion.  In related news, it is also worth noting that the St. Louis Fed said Thursday that the Fed may need to stop shrinking its balance sheet at least temporarily.  Since the government has issued $1 trillion in bonds since June, money market funds have been holding back on their purchases of bonds.  That leaves the Fed as the other major potential buyer.

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In Fed Speak news, Philly Fed President Harker told CNBC Thursday morning that he doubts the FOMC will need to raise rates again.  Harker said, “Right now I think that we’ve probably done enough.”  He went on to say, “I’m in the camp of let the restrictive stance work for a while, let’s just let this play out for a while, and that should bring inflation down.”  However, Harker was not ready to predict when the Fed might start cutting rates. Just a bit later, Boston Fed President Collins said something very similar when she told Yahoo Finance, “We may be near, we could even be at a place where we would hold and not raise rates further … But certainly, additional increments are possible, and we need to look holistically and be really patient right now and not try to get ahead of what the data will tell us as it unfolds.”  (Both did their interviews on the sidelines of the Jackson Hole Central Banker Conference.)  Both of them also seemed to embrace the recent bond yield rate spikes as something that could help the Fed by increasing longer-term borrowing costs and therefore cooling the economy.

In stock news, TMUS said Thursday that it will be cutting 5,000 jobs (about 7% of its workforce).  The company cited rising costs, cheaper phone plan offerings, and the competitive phone market.  Elsewhere, MA will end its partnership with crypto exchange Binance (which had covered four countries).  In other finance news, the Wall Street Journal reported that a group of funds (led by BLK) that have lent money to WE are exploring the possibility of a Chapter 11 bankruptcy filing.  At the same time, RY announced it would be cutting 1,800 jobs as a cost-cutting measure.  In auto industry news, STLA announced it is expanding its “manufacturer-approved pre-owned vehicle” sales program to the US.  (The program started in Europe in 2019.)  Meanwhile, GOOGL said Thursday that it will provide more information on targeted ads and give researchers more access to data in order to come into compliance with new EU online content rules.  After the close, HE plummeted as much as 24% after announcing it was suspending its dividend after subsidiaries were forced to draw $370 million from their revolving credit lines in the wake of the massive Maui fires.  Also after the close, LMT was awarded a $2.7 billion contract by the US Navy to build 35 additional CH-53K helicopters.  At the same time, GM announced it has agreed to increase the pay of workers at its OH battery plant by an average of 25%.  In addition, Reuters reports that AMZN is in talks with DIA over a potential streaming deal with DIS’s ESPN unit.

In stock legal and regulatory news, late Wednesday night, the SEC made a court filing saying that investors who lost money (victims) when Elon Musk tweeted about taking TSLA private will soon begin receiving payouts, recouping 51.7% of their losses.  At the same time, the TX Public Utilities Commission announced that TSLA will provide the state with two “virtual power plants” (drawing power from people who have TSLA Powerwall batteries and compensating them for the electricity).  Elsewhere, Reuters reported that SAVE has agreed to pay up to $8.25 million to settle a class action suit over hidden carry-on baggage fees.  At the same time, WHR agreed to pay $11.5 million to the US Consumer Protection Product Safety Commission over failure to report glass cooktops that could turn themselves on posing burn and fire hazards.  Later, the NHTSA told Reuters that it would resolve its two-year investigation into TSLA Autopilot in a public announcement soon.  The spokesman declined to describe what that resolution will be or exactly when “soon” will come.  Meanwhile, starting today, the big tech names will be forced to comply with the new EU Digital Service Act which imposes stricter rules on content moderation, user privacy, and transparency.  These include META, AAPL, and GOOGL. (AMZN is fighting its inclusion on the list of companies covered in court.)  Failure to comply could result in fines of up to 10% of total global sales per infraction.  After the close, a US District Court judge dismissed a lawsuit against GOOGL that had been brought by the Republican National Committee which had claimed the tech giant had maliciously marked RNC mass emails as spam.  Also after the close, TD said it expects to be fined and other non-monetary penalties from US authorities over a money laundering investigation.

After the close, AFRM, INTU, MRVL, JWN, ULTA, and WDAY all reported beats on both the revenue and earnings lines.  Meanwhile, GPS missed on revenue while beating on earnings.  It is worth noting that AFRM, INTU, and WDAY raised their forward guidance. 

Overnight, Asian markets were mostly red.  Japan (-2.06%) and Taiwan (-1.72%) were way out front leading 10 of the region’s 12 exchanges lower.  In Europe, the opposite picture is taking shape at midday.  14 of the 15 bourses in the region are squarely in the green while the CAC (+0.74%), DAX (+0.56%), and FTSE (+0.49%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a green start to the day here as well.  The DIA implies a +0.34% open, the SPY is implying a +0.26% open, and the QQQ implies a +0.10% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.249% and Oil (WTI) is up just over one percent to $79.86 per barrel in early trading.

The major economic news scheduled for Friday includes Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations all at 10 am.  Fed Chair Powell also speaks at 10:05 am as the Jackson Hole Conference continues.  There are no major earnings reports scheduled for the day (either before the open or after the close).

In miscellaneous news, both the TX and Central State electric grids warned customers of potential power outages as the brutal heatwave continues to pound much of the US.  Both grid operators urged voluntary power conservation to avoid rolling outages.  In other news, the BRICS group invited some more oil to the party as they formally asked Saudi Arabia, Iran, and UAE to join.  Rounding out the new countries invited were Argentina, Egypt, and Ethiopia. 

As mentioned above, Fed Chair Powell speaks just after 10 am Eastern this morning.  Markets are very likely to parse through every word and facial gesture he delivers looking for a clue to the path for interest rates.  (This is especially true after two dovish statements from Fed members delivered in interviews on the sideline of the conference Thursday.)  If you want to get a little wonky, see if Powell addresses an abstract metric known as “R*” (R-star).  This is not the target interest rate, but instead, it is the rate at which Fed policy is theoretically neutral (neither restricts or stimulates the economy).  Since 2019 that rate has been 2.5% and prior to that the R* was 3.5% going back until 2015.  While Powell will be the main show on Friday, EC President Lagarde also speaks at 3 pm Eastern.  (This will be her first public remarks since the EC’s July rate hike.) 

With that background, it looks like the premarket is modestly bullish after Thursday’s big bearish candles. None of the major index ETFs have done enough premarket work to be retesting their T-lines (8ema) or 50sma. So we are still looking at a Blue Ice Failure pattern in all three with huge Bearish Engulfing candles in the SPY and QQQ (which could both also be working on Dreaded-h patterns (the opposite of a J-hook). In other words, the Bears have all the chart patterns in their favor this morning. So, the short-term downtrend break is back in question for the SPY and QQQ, while DIA has resumed its own move lower. As far as extension goes, none of the major index ETFs are too far extended from their T-line but the T2122 indicator is back down well into the oversold territory. So, both sides have some room to run but the Bulls obviously have more slack if they could manage a rally. Finally, don’t forget it is Friday with the Jackson Hole Conference continuing Saturday (although we do not EXPECT much news then). We also have the long weekend news cycle. So, prepare your account for the weekend by taking some money off the table (it is Payday after all) and moving stops, hedging, or lightening up your positions.

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 the Bulls Day on Wednesday.  SPY opened 0.24% higher, DIA opened 0.15% higher and QQQ gapped up 0.32%.  At that point, all three major index ETFs followed through with a steady rally until almost 2 pm.  Then all three traded sideways the rest of the day with a slight profit-taking trend.  This action gave us gap-up, large-body, white candles in all three.  The SPY crossed back above its T-line (8ema) and with a tiny tick on top is now just below its 50sma.  The QQQ also crossed back up through its T-line but had a slightly larger upper wick than the SPY.  QQQ is also just below its 50sma and you might even say it tested the 50 at the high of the day.  DIA is still in more of a sideways consolidation than a rebound rally like the other two majors.

On the day, all 10 sectors were in the green with Technology (+1.08%) way out front leading the way higher followed by Financial Services (+1.20%) while the lagging sector was Energy (+0.11%).  At the same time, the SPY gained 1.08%, DIA gained 0.52%, and QQQ gained 1.58%.  VXX was down 3.34% to close at 24.30 and T2122 climbed back out of the oversold territory into the lower half of the mid-range at 39.42.  10-year bond yields plummeted lower to close at 4.194% while Oil (WTI) fell 1.48% to close at $78.46 per barrel.  This happened on well-below-average volume in all three of the major index ETFs.  So, the rally relationship has resumed, with QQQ and SPY leading the market higher while DIA lags again.  The question is whether or not this is just a relief rally in the month-long pullback.  Either way, Wednesday belonged to the Bulls.      

The major economic news reported Wednesday included Building Permits, which came in slightly above expectation at 1.443 million (compared to a forecast of 1.442 million and a July reading of 1.441 million).  This amounted to a 0.1% month-on-month increase versus the July value which itself was down 3.7% from June.  Later, the Preliminary August S&P US Mfg. PMI came in light at 47.0 (compared to a forecast calling for 49.3 and a July reading of 49.0).  At the same time, the Preliminary August Services PMI was reported at 51.0 (versus a forecast of 52.3 and a July value of 52.3).  In addition, the Preliminary S&P Global Composite PMI was 50.4 (compared to a 52.0 forecast and a 52.0 July value).  After that, the July New Home Sales came in higher than expected at 714k (versus a 705k forecast and a 684k June reading).  This amounted to a 4.4% increase in July, which was better than the +0.2% increase anticipated and far better than June’s decline of 2.8%.  Later, the EIA Weekly Crude Oil Inventories followed the API report from Tuesday night, showing a 6.135-million-barrel drawdown (compared to a predicted 2.850-million-barrel draw and even the prior week’s 5.960-million-barrel drawdown of inventory.

In Russian news, Putin’s unofficial warlord Yevgeny Prigozhen was killed along with the other co-founder of Wagner Private Military Company (Dmitry Utkin).  Most saw this plane crash coming as the inevitable result of Wagner’s June uprising against Putin.  Still, it is notable. Elsewhere, Reuters reported Wednesday that Russian central bank authorities are working on a presidential decree that may give that country’s retail investors a way to unblock their frozen assets held in overseas accounts.  The scheme would allow foreign investors to buy the assets held abroad (3.5 million Russians hold almost $16 billion in foreign accounts that are now frozen).  The idea is that non-Russian investors would buy the frozen Russian account assets (presumably at a discount) in exchange for assets held in non-frozen accounts that can be repatriated to Russia.  It’s unclear whether Western sanctions would now (or could be made to) block this move.  (One would think this to be the case, otherwise, the Russian oligarchs surely would have done this 18 months ago.) It is also unclear if there is some sort of unmentioned reciprocal agreement at play allowing Western business assets frozen in Russia to be released.

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In stock news, research firm Antenna reported that NFLX continued its strong growth in new subscribers in July (not as strong as June’s record increase, but still 2.6 million is a significant gain in subscribers for a month).  NFLX was up 3.48% on the day of that news.  At the same time, a Business Insider report said TSLA cut its production targets in Germany by 13% (with plans to cut it more later).  The current rate of output is now 4,350 per week from the TSLA Berlin plant.  Simultaneously, Reuters reported that NVO has chosen TMO as a second contract manufacturer for its hit weight loss drug Wegovy.  In the early afternoon, JNJ announced its Janssen division would be closing down much of its vaccine research and development operations.  (The JNJ COVID-19 vaccine did not perform as well as competitors from PFE and MRNA.)  Later, the UAW announced workers at the major F Louisville plant have voted to authorize a strike with three weeks left before the current labor contract expires.  In other auto industry news, GM said they are halting production at their Ft. Wayne assembly plant for a week as they continue to wrestle with part supply issues.  (GM blamed the shortage on a lack of railcars and truck drivers which led to a massive buildup of partially completed vehicles at the plant.)  In M&A news, private company Esmark announced it has rescinded its offer to buy X for $35/share.  In a statement, Esmark said it will respect the USW Steel Workers Union position (the union is supporting CLF buying X for a lower $7.3 billion total price).  After the close, GM announced it was cutting 940 jobs in AZ and would cease its IT operations in that state to reduce costs.  (80-90 of these layoffs come from the self-driving software team.)  At the same time, Reuters reported that a new supplier quality problem has been identified related to 737 MAX production.  The new problem will delay near-term deliveries of those planes and is likely to impact annual production goals.  AAPL announced after the close that it supports the CA state “Right to Repair” bill as currently written, specifically citing that the bill “protects consumer safety, device security, and manufacturers intellectual property rights.”  (This almost assuredly means the bill has been transformed into something worthless to consumers and non-AAPL repair businesses.)

In stock legal and regulatory news, OSHA said Wednesday that it’s investigating a chemical spill at a lithium battery plant owned by GM and South Korea’s LG Energy.  This is one of six open OSHA investigations into that plant’s operations.  (In a possibly related case, after the close, Bloomberg reported that the joint venture is working on a deal to give employees at that plant a 33% raise plus back pay.)  At mid-morning, drugmaker Mallinckrodt (MNKKQ) told Reuters it expects to file for a second bankruptcy in the next few days.  This comes after the drugmaker reached a deal with victims who had agreed to accept $1 billion less in their settlement with the company over opioid distribution practices.  Later, a court in Kenya ordered META into mediation in the company’s dispute with 184 content moderator employees and two contractors who were suing the company for unfair dismissal (because they were organizing a union).  The court ruled META has 21 days to reach an agreement to resolve the dispute with the plaintiffs.  In the afternoon, Reuters reported that UAL has agreed to a $30 million settlement after one day of trial in a case related to their treatment of a quadriplegic man in a vegetative state.  Late in the day, a coalition of environmental activist groups sent a letter to the SEC, pushing to stop Brazilian meatpacker JBSAY from being listed (issuing an IPO) on the NYSE.  After the close, GS, JPM, MS, and UBS agreed to pay $499 million to settle an antitrust lawsuit from investors, which had accused them of conspiring to stifle competition through their stock lending practices.  Also after the close, the FCC announced it would be releasing the public comments made in a bid to deny the broadcast license renewal of the FOX TV station in Philadelphia.  Comments made by the grassroots group “The Media and Democracy Project” have asked for denial based on FOX’s false and harmful information (lies) about the 2020 election. FOX dismissed the petition as frivolous and without merit, but the petitioners mentioned FOX’s $787.5 million defamation case settlement brought by Dominion Voting System and FOX internal communications released related to that case that proved the company knew the results of the election were valid but repeatedly lied about it anyway and knew that could lead to something like the January 6 riot attempting to stop official vote counting.  At the same time, an FDA panel of independent experts voted against the approval of an MDT blood pressure treatment device. 

After the close, ADSK, GES, NTAP, NVDA, SNOW, and SPLK all beat on both the revenue and earnings lines.  It is worth noting that ADSK, GES, NVDA, and SPLK all also raised their forward guidance.  It is also worth noting that there were some major surprise beats on earnings with NVDA surprising by 29.2%, SPLK surprising by 57.8%, GES surprising by 84.6%, and SNOW surprising by 120%.  However, the most notable beat of the day was NVDA’s 170% jump in sales (year-on-year) resulting in a 27% beat on revenue…driven by AI processing demand (whose division sales more than doubled). NVDA also expects AI-related demand to continue increasing, more than doubling again in 2024. That is likely to drive markets (especially QQQ and SPY) this morning.

Overnight, Asian markets were mostly green on the back of the AI rally.  Hong Kong (+2.05%), South Korea (+1.28%), and Taiwan (+1.17%) led the region higher.  Only New Zealand (-0.60%) and India (-0.29%) were in the red.  In Europe, we see a very similar picture taking shape at midday.  Only Russia (-0.76%) and Finland (-0.05%) are in the red, while the CAC (+0.46%), DAX (+0.36%), and FTSE (+0.35%) lead the region higher.  In the US, as of 7:30 am, Futures are pointing toward a mixed open.  The DIA implies a flat open of -0.02%, the SPY is implying a +0.64% open, and the QQQ implies a +1.27% open at this hour.  At the same time, bonds are back up a bit to 4.214% and Oil (WTI) is up fractionally to $79.04 per barrel in early trading.

The major economic news scheduled for Thursday includes July Durable Goods Orders and Weekly Initial Jobless Claims (both at 8:30 am), Fed Balance Sheet and Bank Reserve Balances with the Fed (both at 4:30 pm).  The Central Bankers Jackson Hole Conference also starts at 8 am.  The major earnings reports scheduled for before the opening bell include BURL, DLTR, NTES, WOOF, RY, TD, and WB.  Then, after the close, GPS, INTU, MRVL, JWN, ULTA, and WDAY report. 

In economic news later this week, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations are reported.  Fed Chair Powell also speaks as the Jackson Hole Conference continues.

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

In miscellaneous news, retail industry analyst Susquehanna reported that big retailers have already returned to a cost-cutting focus by going back to a just-in-time inventory model.  Susquehanna analyzed the last 20 years of ocean container ship imports into the US looking for trends. They found that the “big 4” big box retailers (WMT, TGT, HD, and LOW) all reduced their inventories by more than 4% in Q2, which was the largest reduction since 2015.  The analyst is predicting (based on discussions with retailer management) Q3 pre-holiday inventory builds will be larger than last year’s 6% quarter-on-quarter increase but far less than the 14% average from pre-COVID years.

In late-breaking news, Turkey surprised markets this morning with an unexpectedly large rate hike of 7.5%, bringing that country’s main rate to 25%.  The Dollar fell against the Turkish Lira almost immediately.  Elsewhere, privately-held Subway (sandwich shops) sold itself to privately-held Roark Capitol.  Roark already owned Dunkin Donuts, Baskin-Robbins, Sonic, Arby’s, Buffalo Wild Wings, and a host of other restaurant industry brands.  Finally, Bloomberg reported that China has a major $9 trillion “off the books” debt problem.  It seems that this is the amount of debt held by Chinese local governments through state-owned companies set up to borrow on behalf of province and local government entities.  The problem is that the local governments have not been able to raise enough income (tax revenue) to pay the interest on that $9 trillion in hidden debt.  So, banks are unwilling to lend to those entities and investors are not buying bonds issued by those financing companies.  If there were a default by any of those shadow funding agencies, China’s entire $60 trillion financial system would be at risk of collapse.

So far this morning, BURL, DLTR, FRO, RY, and SN all reported beats on both the top and bottom lines.  Meanwhile, NTES and WB missed on revenue while beating on earnings.  On the other side, WOOF and TD beat on revenue while missing on the earnings line.  It is worth noting that WOOF lowered its forward guidance.   

With that background, it looks like the premarket is giving us a similar feel as the Wednesday normal session. SPY and especially QQQ gapped higher and will open with significant gains. Meanwhile, DIA is stuck in the mud and not participating. It is interesting that all three of their premarket candles are indecisive candles (after the gaps from the two broader ETFs). SPY and QQQ are above their T-line (8ema) while DIA remains just below its own T-line. The morning gap will also see the QQQ well up above its 50sma and the SPY retesting its 50sma from below. So, the short-term downtrend has been broken in the SPY and QQQ, but the DIA remains in just a consolidation. Of course, the much longer-term trend is still bullish since last year but that has been pushed hard recently by the Bears. As far as extension goes, the morning gap may have QQQ a little extended above its T-line but the other two are not far from that average. The T2122 indicator is also back in its mid-range, so there is plenty of room to move in either direction, say it with me, if we can find the momentum.

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 Tuesday, the SPY and QQQ gapped up while the DIA opened flat.  SPY opened 0.39% higher, QQQ opened 0.70% higher and DIA opened up only 0.01%.  However, at that point, all three major index ETFs spent the rest of the day in a slow downtrend.  (It is worth noting that QQQ’s downtrend was more volatile and roller-coaster-like than the large caps, but all three made the same slow trip lower.)  This action gave us large-body, black candles in all three.  The SPY printed a Dark Cloud Cover candle that failed a retest of its T-line (8ema).  QQQ also failed a retest of its 8ema but failed to did not print a candle signal.  For its part, the DIA did not even get close enough to test its T-line again but did print an Evening Star signal.

On the day, seven of the 10 sectors were in the red with Financial Services (-0.92%) out front leading the way lower while Utilities (+0.30%) held up better than the other sectors.  At the same time, the SPY lost 0.27%, DIA lost 0.50%, and QQQ lost 0.14%. VXX was basically flat to close at 25.14 and T2122 climbed slightly gain but remained well into the oversold area at 10.00.  10-year bond yields rebounded after they opened lower to close at 4.332% while Oil (WTI) fell 0.58% to close at $80.25 per barrel.  This happened on a well-below-average volume in all three of the major index ETFs.  So, volatility reigned in the morning, but the Bulls took over for the second half of the day.      

The major economic news reported Tuesday was limited to July Existing Home Sales which came in a bit below expectation at 4.07 million (compared to a forecast of 4.15 million and a June reading of 4.16 million).  That corresponded to a 2.2% decrease month-on-month coming after a 3.3% month-on-month decline in June.  (Curiously, at the same time, the median home price rose 1.9% to $406,700, just the fourth time the average has topped $400,000.)  Then, after the close, the API Weekly Crude Oil Stocks Report showed a smaller-than-expected draw on inventories at 2.418 million barrels (versus a forecast calling for a drawdown of 2.900 million barrels but much less than the prior week’s 6.195-million-barrel drawdown). 

In Fed speak, Richmond Fed President Barkin told Reuters Tuesday that the Fed needs to be aware of the possibility that the US economy may accelerate rather than slow in the coming months.  If it does, that would have implications for the FOMC’s fight against inflation.  He noted that US Retail Sales were stronger than expected in July and Consumer Confidence is also rising.  Barkin said, “The reacceleration scenario has come onto the table in a way that it really wasn’t three or four months ago.”  He went on to say, “If I got convinced that inflation was remaining high and demand was giving no signal that inflation was going to come down, that would make the case (for further tightening of monetary policy).”  Related to bond rates, Barkin told Reuters, “It doesn’t strike me that having a 10-year (bond) rate over 4 percent is somehow wildly inappropriate.” 

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In stock news, META announced a new AI model that can transcribe and translate 100 languages on Tuesday morning.  The model (SeamlessM4T) offers speech recognition as well as all the speech-to-text, text-to-speech, text-to-text, and speech-to-speech translation modes.  In other META news, the company rolled out a web-based version (pre-announced a day earlier) of Instagram Threads.  Later, IBM announced it had agreed to sell its weather business to private equity firm Francisco Partners for an undisclosed amount.  (The Wall Street Journal previously reported IBM was seeking to sell the unit at a $1 billion valuation.)  Elsewhere, VMW (in the process of being bought by AVGO) announced it has partnered with NVDA to launch a set of tools that will allow customers to create their own AI applications on NVDA hardware running in their own data centers (as opposed to buying AI processing from cloud vendors like MSFT and AMZN).  In the afternoon, industry watchers said that TSLA’s 13,900 new insurance registrations in China last week added to the 14,000 from the week prior and 12,800 the week before suggests a strong August sales pace for TSLA, at least in China.  In M&A drama news, CLF demanded Tuesday afternoon that X reveal all of its buyout offers.  X has previously rejected CLF’s $7.3 billion cash-and-stock offer and has also received offers (that we know of) from MT and private firm Esmark.  Just after the close, the Teamsters announced their 340,000 UPS workers had approved the new 5-year contract recently agreed between the union and company.

In stock legal and regulatory news, some AAL Pilots are fighting their union in the hope of extending their flying careers.  The union opposed the bill in Congress (championed by airlines) that would raise the retirement age from 65 to 67.  However, some pilots are going around their union (with the help of airlines) to lobby Congress on behalf of the bill.  (An airline industry group says the law could “save” the industry 5,000 pilots over the next two years.  Critical amidst an industry-wide pilot shortage.)  At midday, the US Dept. of Justice announced that NMR had agreed to pay a $35 million fine, pay $808k in restitution, and take responsibility in written form in order to avoid prosecution for lying to customers about bond prices.  (NMR had previously been fined $1.5 million and paid $20.1 million in restitution in a civil settlement with the SEC for the same fraud.)  At the same time, the US Consumer Finance Protection Bureau filed suit against CURO, alleging the lender had pushed 10,000 struggling borrowers to simply refinance their short-term loans to increase their fees.  Later, a “reverse discrimination” lawsuit was filed against GCI, but five current and former employees who claim the newspaper publisher discriminates against white staff in order to fulfill diversity goals.  (No damage figure was provided.)  At the same time, Bloomberg reported that FORG will be acquired by private equity firm Thoma Bravo after the US Dept. of Justice declined to challenge the deal.  Later in the afternoon, MO filed a complaint with the US International Trade Commission seeking to ban the import of rival Juul products, which MO claims infringe on two of its patents.  Then, the US Interior Dept. approved a 704-megawatt wind farm off Rhode Island to be owned and operated jointly by DOGEF and ES.  At the close, the US Dept. of Health and Human Services awarded $1.4 billion in grants, including $326 million for REGN to develop next-generation therapies and vaccines for future COVID-19 variants.

In volatility news, Vietnamese electric vehicle maker VFS (VinFast) continued its massively volatile ride in the six days since its IPO.  On Tuesday, VFS closed up almost 109%after having been up more than 167% at one point in the session.  At the same time, SRE fell almost 50% Tuesday while FN climbed 31.58% by the close.

After the close, LZB, TOL, and URBN all reported beats on both the revenue and earnings lines.  It is also worth noting that TOL raised its forward guidance.

Overnight, Asian markets were mixed but leaned toward the green side.  Taiwan (+0.85%), New Zealand (+0.75%), and Japan (+0.48%) led the more plentiful gaining exchanges.  Meanwhile, China is still on the struggle bus with Shenzhen (-2.14%) and Shanghai (-1.34%) pacing the losers.  In Europe, stocks are mixed with more of the bourses in the red than in the green at midday.  The CAC (-0.14%), DAX (-0.03%), and FTSE (+0.64%) are typical of the spread with only Switzerland (+1.00%) moving more than a percent in early afternoon trade.  In the US, as of 7:30 am, markets are looking to open just on the green side of flat so far.  The DIA implies a +0.13% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.06% open at this hour.  At the same time, 10-year bond yields have backed down strongly again to 4.259%, and Oil (WTI) is down 1.52% to $78.42 per barrel in early trading.

The major economic news scheduled for Wednesday includes Building Permits (8 am), Preliminary August S&P US Mfg. PMI and Preliminary August S&P Global Composite PMI (both at 9:45 am), July New Home Sales (10 am), and EIA Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for before the opening bell include ANF, AAP, ADI, BBWI, DY, FL, GRAB, KSS, LANC, PTON, and WSM.  Then, after the close, ADSK, GES, NTAP, NVDA, SNOW, and SPLK report.

In economic news later this week, on Thursday, we get July Durable Goods Orders, Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Reserve Balance with the Fed.  The Central Bankers Jackson Hole Conference also starts.  Finally, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations are reported.  Fed Chair Powell also speaks as the Jackson Hole Conference continues.

In terms of earnings reports, on Thursday, BURL, DLTR, NTES, WOOF, RY, TD, WB, GPS, INTU, MRVL, JWN, ULTA, and WDAY report.  Finally, on Friday, there are no earnings reports scheduled.

In miscellaneous news, accounting firm Ernst & Young reported that in 2022, for the first time ever, US oil and gas companies paid out more in earnings to shareholders than they spent on exploration and field development.  The E&Y report said the top 50 US oil and gas producers spent $58.8 billion on buybacks and dividends while only spending $55.1 billion on exploration and development.  The report predicted the trend will continue as well as seeing more money plowed into acquisitions rather than actual finding and producing oil and gas.  Elsewhere, Bloomberg reported Tuesday evening that bond sales by US financial institutions topped $2 trillion so far this year, reaching that milestone in the fastest time ever. This comes the same day that S&P downgraded 10 US regional banks, including KEY and CMA.  Finally, mortgage demand dropped to a 28-year low as interest rates spiked last week.  The national average rate for a 30-year, fixed-rate, conforming loan spiked to 7.31%.  This caused new purchase loan applications to fall 5% for the week while refinance applications dropped 3%.

So far this morning, ANF, DY, GRAB, and KSS all beat on both the earnings and the revenue line.  Meanwhile, BBWI missed on revenue while beating on earnings.  On the other side, AAP and PTON both beat on revenue while missing on earnings.  However, ADI and FL missed on both the top and bottom lines.  It is worth noting that ADI, FL, and PTON all lowered their forward guidance.

With that background, it looks like the market is tepid at this hour. While the premarket session opened higher, all three major indices are printing black candles in the early session and have fallen back near Tuesday’s closing level. The SPY and QQQ are failing another retest of their T-lines (8ema) on the early move. The short-term trend remains bearish. Also, on top of the normal resistance levels, all three major index ETFs have to climb through their T-lines AND their 50sma (where they are all flirting with a Blue Ice Failure pattern) to make a push. In other words, the Bulls have their work cut out for them at this point. With that said, the SPY and especially the QQQ are trying to reverse to break the downtrend. Of course, the much longer-term trend is still bullish since last year but that has been pushed hard recently by the Bears. As far as extension goes, there is no issue with extension below the T-line (8ema). However, the T2122 indicator remains oversold, although it isn’t pegged to the bottom of its range. So, once again we have room to move in either direction, but the relief pause or bounce may be here. Just remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Monday gave us a morning roller-coaster. The SPY gapped 0.24% higher, DIA opened just 0.04% higher, and QQQ gapped up 0.40%.  The SPY and QQQ then rallied until 10:10 am.  Meanwhile, DIA only managed to grind sideways until 9:45 am.  Then, all three major index ETFs sold off steadily until 12 pm.  At that point, QQQ was back at the opening level, SPY had crossed back below Friday’s close, and DIA had fallen significantly below Friday’s close.  However, at noon, the Bulls stepped in to drive a strong, steady rally that lasted until a modest pullback in the last 15 minutes.  This action gave us a large, white-bodied candle in the QQQ which barely failed a retest of its T-line on the last-minute profit-taking.  For its part, SPY gave us a white Spinning Top candle.  Finally, the DIA printed a black Spinning Top candle.

On the day, six of the 10 sectors were in the red with Utilities (-0.66%) leading the way lower while Technology (+1.42%) was far out front, holding up better than the other sectors.  At the same time, the SPY gained 0.65%, DIA lost 0.13%, and QQQ gained 1.61%. VXX fell 2.64% to close at 25.03 and T2122 climbed slightly but remains deep into the oversold area at 8.66.  10-year bond yields spiked higher to close at 4.342% while Oil (WTI) fell 0.43% to close at $80.90 per barrel.  This happened in average volume in the QQQ and below-average volume in the SPY and DIA.  So, volatility reigned in the morning, but the Bulls took over for the second half of the day.      

There was no major economic news reported Monday.  However, Reuters did report that a “feud” between centrist and hardline Republicans in the US House has raised the risk of a government shutdown.  The “Freedom Caucus” are pushing for spending $120 billion less than the deal agreed in June between the President and House (taking another bite of the apple).  That group also announced its opposition to any stopgap measures to keep the government open.  Other Republicans are looking for spending on top of the June level for defense, veteran benefits, and border security.  If those two ideas were taken together, it would result in a 25% budget cut in the rest of the budget (including the infrastructure spending the President and Congress have been actively taking credit for recently).  The centrist group (who now call themselves the “Governing Republicans”) say the hardliners ignore the reality that Senate Democrats are not going to go along with their priorities.  As a result of this schism, GS reported Monday they now feel a shutdown is more likely than not.  Current funding ends on September 30 for all 12 appropriations bills and Congress does not return from recess until September 12.  At the same time, the National Federation of Independent Business released the results of its quarterly small business owner survey.  The survey found 52% believe the US is already in recession, which is actually down slightly from 55% in April.  However, 80% said the economy was “okay” or better, and most said their own business financial situation was “strong.”  More than half also said they were less concerned about the health of their own bank, which is a dramatic increase from 31% which had that opinion in April.

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In stock news, NKLA announced it will be selling $325 million in notes that can be converted into stock. NKLA fell almost 23% on the news. Later, Investing.com reported that GS is looking into selling its investment advisory unit.  GS acquired the unit almost 5 years ago for $750 million. (That unit’s profit fell 60% in Q2, but this was partly driven by write-downs related to GS Consumer businesses.)  At the same time, MU pulled a quasi-extortion move by announcing its previously announced $100 billion (over two decades) investments into memory manufacturing plants in ID and NY won’t be possible without federal funding and tax credits for the two projects.  (MU has asked for billions of dollars in support from the CHIPS Act funds.)  By mid-morning, ESTE announced it has agreed to be acquired by PR for $4.5 billion, which comes to $18.64 per share. ESTE closed Friday at $16.23 and closed Monday at $18.94.  Elsewhere, Reuters has reported that WMT is investigating its supply chain based on credible reports that part of its apparel products are being made by Cambodian prison labor, which is illegal in both countries.  Other retailers, including UA and AHRO (Izod), may be using the same supplier according to the article.  Elsewhere, DD announced it has agreed to sell an 80.1% stake in the chemical giant’s Delrin Resin business for $1.8 billion.  (The buyer is a private company.)  At midday, UNP announced that two rail lines into the Los Angeles region have been closed due to washouts caused by flooding.  At the same time, Reuters reported C is now considering removing an entire level of management when the current leader of its largest division retires next year.  Later, META said it will soon launch a web-based version of its Instagram Threads to better compete against X (Twitter). Meanwhile, negotiations between the UAW and “Big 3” automakers are again getting tense.  The UAW reported Monday that STLA has threatened to move all Ram 1500 pickup production to Mexico unless they get an acceptable offer from the union.  For their part, STLA did not deny the report, instead saying “Product allocation for our U.S. plants will depend on these negotiations as well as a plant’s ability to meet specific performance metrics including improving quality, reducing absenteeism and addressing overall cost.”   After the close, SCHW said it plans to lower its headcount in order to cut costs.  (SCHW did not disclose the number of employees or the exact timing, although it did say it expects to realize a $500 million charge for the move in the second half of 2023.)

In stock legal and regulatory news, the FDA placed clinical trials of GILD blood cancer drug on hold.  (This comes a month after GILD had announced it was scrapping new late-stage trials of the drug on hold itself due to a lack of efficacy in earlier testing.)  GILD had acquired the drug as part of its $4.9 billion buyout of “Forty Seven Inc.” back in 2020.  Later, the NHTSA announced it opened an investigation into F over whether or not the company’s recall of 2022 Mach-E electric vehicles properly dealt with safety issues caused by high voltage contacts (which had been found to cause overheating that could lead to an abrupt loss of power while driving).  The NHTSA has received a dozen reports of the same problem on cars that had already undergone the F recall repair.  At the same time, the EU announced that it will require EU antitrust regulatory approval for the purchase of the German EEX exchange by NDAQ.  (This is notable because the deal falls under the normal threshold for antitrust review.)  In the UK, the British competition regulator finalized its approval of the AVGO $60 billion purchase of VMW.  (It has provisionally approved in July.)  Late in the afternoon, the US State Dept. approved the sale of $12 billion in military hardware to Poland.  BA and LMT will be the primary beneficiaries of the sale of 96 Apache AH-64E helicopters, 1,844 Hellfire missiles, and 508 Stinger missiles.  (No contract has been signed yet.)  Then, near the end of the day, the US 10^th District Court of Appeals upheld the dismissal of a shareholder lawsuit against SPR for misleading investors by withholding information about production cuts related to the two crashes of the BA 737 MAX.  After the close, AAPL won the dismissal of a lawsuit that had claimed the Apple Watch blood oxygen sensor exhibits “racial bias” toward people with darker skin tones.  Finally, also after the close, the US Dept. of Justice announced that TEVA will pay $225 million in fines and also divest a key generic cholesterol drug to settle price-fixing charges from the US Dept. of Justice.

After the close, FN and ZM reported beats on both the revenue and earnings lines.  At the same time, LU and NDSN both missed on revenue while beating on earnings.  On the other side, QFIN beat on revenue while missing on earnings.  It is worth noting that ZM raised its forward guidance while NDSN lowered guidance.

Overnight, Asian markets were green across the board. Thailand (+1.29%), Hong Kong (+0.95%), and Japan (+0.92%) led the region higher with India (0.01%) and Australian (+0.09%) lagging well behind.  In Europe, we see the same picture taking shape in the bourses at midday.  The CAC (+1.19%) and DAX (+1.06%) are more typical, with the FTSE (+0.68%) lagging in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.19% open, the SPY is implying a +0.39% open, and the QQQ implies a +0.48% open at this hour.  At the same time, 10-year bond yields are down a bit to 4.318% and Oil (WTI) is off four-tenths of a percent to $80.40 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to July Existing Home Sales (10 am) and API Weekly Crude Oil Stocks Report (4:30 pm).  We also hear from Fed members (Barkin at 7:30 am, Goolsbee at 2:30 pm, and Bowman at 2:30 pm). The major earnings reports scheduled for before the opening bell include BIDU, BJ, CSIQ, CTRN, COTY, DKS, IQ, LOW, M, MDT, and SCSC.  Then, after the close, LZB, TOL, and URBN report.

In economic news later this week, on Wednesday, Building Permits, Preliminary August S&P US Mfg. PMI, Preliminary August S&P Global Composite PMI, July New Home Sales, and EIA Crude Oil Inventories are reported.  On Thursday, we get July Durable Goods Orders, Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Reserve Balance with the Fed.  The Central Bankers Jackson Hole Conference also starts.  Finally, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations are reported.  Fed Chair Powell also speaks at the Jackson Hole Conference which continues until Saturday.

In terms of earnings reports, on Wednesday, we hear from ANF, AAP, ADI, BBWI, DY, FL, GRAB, KSS, LANC, PTON, WSM, ADSK, GES, NTAP, NVDA, SNOW, and SPLK report.  On Thursday, BURL, DLTR, NTES, WOOF, RY, TD, WB, GPS, INTU, MRVL, JWN, ULTA, and WDAY report.  Finally, on Friday, there are no earnings reports scheduled.

In miscellaneous news, one of the largest IPOs ever was filed late Monday as Japan’s SFTBY (SoftBank) filed for the long-awaited stock offering of its Arm chip designer unit.  (You may recall Arm as having been a $40 billion acquisition of NVDA before the deal was scuttled on antitrust grounds.  Arm’s chip architecture is the main competitor of the x86 standard from INTC and AMD and is the basis for AAPL’s so-called “self-designed” chip used in Macs as well as by NVDA for its AI market cards.  Elsewhere, in a hopeful possible read-through to China, overnight the CEO of Australian mining giant BHP said in his earnings call that BHP had seen solid growth in demand from some sectors in China.  He mentioned steel demand from housing starts, infrastructure, automotive, and commercial property development as “pretty strong.”  (They still expect China to produce a billion metric tons of steel this year, for the fifth straight year.)  He went on to say, “In the near term, while the outlook for the developed world is uncertain, we expect China and India to remain relative sources of stability for commodity demand.” Finally, S&P followed Moody’s (two weeks ago) in downgrading 10 US Banks, including KEY and CMA.

So far this morning, BIDU, M, MDT, and IQ all reported beats on both the revenue and earnings lines.  Meanwhile, LOW, CSIQ, and BJ missed on revenue while beating on earnings.  On the opposite side, COTY beat on revenue while missing on earnings.  However, DKS missed on both the top and bottom lines.  It is worth noting that DKS, CSIQ, and COTY lowered their forward guidance.  Meanwhile, MDT raised its forward guidance.

With that background, it looks like the Bulls are in control again so far in the premarket. All three major index ETFs show a premarket gap up and then are giving us white-bodied candles in the early session. The SPY and especially QQQ are retesting their T-lines (8ema) from below but the DIA Bulls still have more work to do before reaching that level. The short-term trend remains bearish. However, the QQQ and SPY are trying to break that three-week trend. Of course, the long-term trend is still clinging to a bullish inclination but it has been pushed hard by the Bears over the last three weeks. As far as extension goes, the premarket move gets rid of any concern about overextension below the T-line (8ema). Meanwhile, the T2122 indicator remains quite oversold, but it is not pegged to the bottom of its range. So, again we have room to move either direction, but the overdue pause or bounce may be here. Just remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet.

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 Friday, opening 0.62% lower in the SPY, down 0.60% in the DIA, and down 0.96% in the QQQ.  However, that was the last we saw of the Bears on the day.  The Bulls met the gap down with a slow, steady rally that recrossed the gap and hit the highs of the day at about 3:50 pm.  The last 10 minutes saw modest profit-taking in all three major index ETFs.  This action gave us white-bodied candles with essentially no lower wick and a small upped wick in the SPY, DIA, and QQQ.  None of the index ETFs came close to challenging their T-line and only the DIA came near its 50sma.  This all happened on above-average volume in the QQQ, and a bit below-average volume in the SPY and DIA.

On the day, seven of the 10 sectors were in the green with Energy (+0.84%) out front leading the way higher while Communications Services (-0.42%) lagging behind the other sectors.  At the same time, the SPY gained 0.05%, DIA gained 0.02%, and QQQ lost 0.13%.  VXX fell 2.54% to close at 25.71 and T2122 climbed but remains deep into the oversold area at 8.04.  10-year bond yields recovered during the day but still fell to 4.251% while Oil (WTI) climbed 1.26% to close at $81.40 per barrel.  So, the Bears gapped us down only to be met by all-day buying.  This might have been profit-taking after a strongly bearish week, which saw SPY down 2.05%, DIA down 2.23%, and QQQ down 2.21%.  (The last 10 minutes might also be related to options expiration.)       

There was no major economic news reported Friday.  However, the Fed did publish data indicating that US banks did reduce lending in the week ending August 9.  Overall bank credit fell from $17.25 trillion to $17.23 trillion.  This was the second consecutive weekly drop.  This included a decline in “loans and leases” falling from $12.15 trillion to $12.13 trillion and industrial loans also fell from $2.75 trillion to $2.74 trillion.  At the same time, Reuters released a survey of economists (taken August 14-18) found that a strong majority feel the Fed is done raising rates.  The same poll found a slim majority believing the FOMC will not start cutting rates until at least the end of March.  99 of 110 economists say the Fed will not hike rates in September, which is in line with current Fed Futures that show 89% of traders agree with the economists. 

Related to foreign attempts to unseat the Dollar as the world’s default (and reserve) currency. The BRICS group will hold a meeting in South Africa this week.  Ahead of this, the Fed released research showing that in the 20 years ending in 2019, 95% of all international trade in the Americas region was invoiced in Dollars.  The same goes for 74% of Asian region trade and 79% of trade in the rest of the world (not including the EU, which uses the Euro).  In addition, coming into this week’s BRICS meeting, there’s no obvious competitor to the Dollar yet.  China’s Yuan is not a reliable candidate due to the fact the Chinese will not let their currency freely float with markets.  Other BRICS countries don’t have the economic scale to make their currencies feasible as a Dollar alternative.  In addition, trading US dominance of world markets for the dominance of China or India is something that would take a lot of thinking, convincing, and guts.  The British would love to reclaim global reserve currency status for the pound, but they are too small economically and have massive historical baggage from their colonial past. This leaves the Euro, which is seen as too politically fragmented (especially related to their various economic and fiscal policies) and are unlikely to be supported by China and India.  The last potential substitute is that there has been some talk of a gold-backed digital currency. However, that would take a massive effort and coordination to create a completely new currency, with the problem of managing the various country’s gold reserves (such that participants trust each other) on top of the creation and coordination of an agreed safe cryptocurrency (which many of the BRIC countries have opposed to date). The bottom line is just ahead of the BRICS meeting in Johannesburg, no public progress has been made on others finding a replacement for the US Dollar.

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In stock news, Reuters reported Friday that some of the world’s largest consumer goods companies are already experimenting with using artificial intelligence to develop marketing and advertising content.  UL, NSRGY (Nestle), and MDLZ were among the examples mentioned and the article also said they would be using data from WMT, AMZN, and KR to train their AI models. On Saturday, TSLA began notifying employees whose personal information had been disclosed in a data breach that happened back in May.  (TSLA is only notifying employees because the AG of ME posted that it found two former TSLA employees had misappropriated that data in lawsuits filed Friday.  The breach affected nearly 76,000 employees’ data.)

In stock legal and regulatory news, during the day Friday, US Senator Vance from OH (headquarters location of CLF which made a bid for X) again publicly urged X not to even entertain offers from foreign buyers.  As you will remember, CLF was the first bidder to buy out X, followed by private company Esmark, and then MT (a Luxembourg-based company).  Vance said he would pursue ways to ensure the company “stayed American.”  Then, after the close Friday, the FDA approved a new dosage of REGN’s Eylea eye disease drug.  On Saturday, GM announced it would cut its Cruise Robotaxi fleet in San Francisco by 50% temporarily.  This comes hours after the CA Dept. of Motor Vehicles announced it has opened an investigation into several Cruise-involved crashes within the last week.  After the investigation, GM will need to address the findings prior to resuming full-scale operations.  (This reduced the number down to 50 Cruise robotaxis operating during the day and 150 in the evenings.)

In China market news, the country’s securities regulators announced a package of measures aimed at propping up their stock markets.  These include cutting trading costs, changing rules to encourage share buybacks, extending trading hours, and increasing financial standards (which would, over time, increase the attractiveness and health of listed companies).  The regulator spokesman answered a question by saying they did not know yet whether a reduction in stamp duties (fees for loans, leases, and securities trades) would take place as had been discussed recently.  Most analysts applauded the moves but said it would not be anywhere near enough to overcome major concerns over the Chinese economy. Then to top this off, Monday the Chinese Central Bank cut its one-year loan rate by less than expected (down 10 basis points instead of the 15 basis-point cut that was expected (down to 3.45%). It also made no changes to the 5-year loan rate and the analyst consensus was that they would reduce that rate by 15 basis points. Most importantly, the PBOC did nothing at all to the long-term mortgage rates (which is what the property sector and public felt needed relief). As a result, the Chinese stock markets were not impressed with these actions and are still hoping for more and bigger government stimulus.

After the close Friday, PANW missed on revenue while beating on earnings.  That beat was a surprise since the market had been very worried since the company said they would announce earnings after the market close on a Friday.  (That was announced August 2 and the stock was down almost 16% since that timing was released.)  PANW was up as much as 10% in after-hours trading following the report.

Overnight, Asian markets were mixed.  Hong Kong (-1.82%), Shenzhen (-1.32%), and Shanghai (-1.24%) led the region lower.  Meanwhile, Thailand (+0.44%), India (+0.43%), and Japan (+0.37%) paced the gainers.  However, in Europe, we see green across the board at midday.  The CAC (+1.18%), DAX (+0.74%), and FTSE (+0.53%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.34% open, the SPY is implying a +0.49% open, and the QQQ implies a +0.63% open at this hour.  At the same time, 10-year bond yields are spiking back up to 4.298% and Oil (WTI) is jumping up 1.32% to $82.32 in early trading.

There is no major economics news scheduled for Monday.  There are also no major earnings reports scheduled for before the opening bell.  However, after the close, FN, LU, NDSN, and ZM report.

In economic news later this week, on Tuesday we get July Existing Home Sales and API Weekly Crude Oil Stocks Report.  We also hear from Fed members (Goolsbee twice and Bowman).  Then Wednesday, Building Permits, Preliminary August S&P US Mfg. PMI, Preliminary August S&P Global Composite PMI, July New Home Sales, and EIA Crude Oil Inventories are reported.  On Thursday, we get July Durable Goods Orders, Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Reserve Balance with the Fed.  The Central Bankers Jackson Hole Conference also starts.  Finally, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations.  Fed Chair Powell also speaks and the Jackson Hole Conference continues.

In terms of earnings reports, on Tuesday, BIDU, BJ, CSIQ, CTRN, COTY, DKS, IQ, LOW, M MDT, SCSC, LZB, TOL, and URBN report.  Then Wednesday, we hear from ANF, AAP, ADI, BBWI, DY, FL, GRAB, KSS, LANC, PTON, WSM, ADSK, GES, NTAP, NVDA, SNOW, and SPLK report.  On Thursday, BURL, DLTR, NTES, WOOF, RY, TD, WB, GPS, INTU, MRVL, JWN, ULTA, and WDAY report.  Finally, on Friday, there are no earnings reports scheduled.

In miscellaneous news, US Treasury Bond yields were on a massive roller-coaster last week. Not only did the 10-year bond yield close at its highest level since 2007, but they also then crashed by the largest amount in history.  Bloomberg quoted a bond market analyst as saying the reason is pretty simple.  He said, “Given rising real yields and ambitious valuation levels in particular for US stocks, the risk-reward looks better for bonds.”  Elsewhere, the US Dollar booked its fifth straight week of gains (its longest winning streak in 15 months).  Finally, the drought in Panama is causing more supply chain problems.  Previously, the draft depths of ships had been reduced.  Now, the number of ships allowed to transit the Panama Canal has been reduced from 36 to 32 per day.  The wait time, prior to transit, for the largest ships has risen to 17 days as ships stack up (and partially unload to reduce their draft). 

In late-breaking news, Bloomberg released investor survey data (from 602 professional and retail traders they surveyed). The data shows that two-thirds believe it is still unclear that the Fed has done enough to fight inflation. However, more than half also say traditional Fed indicators (like the job market and price index data) will not be the driver when the Fed moves to cut. Instead, they feel the driver will be financial market turmoil that will prompt a Fed rate cut. At the same time, about 80% of respondents say they expect a recession in the EU within the next 12 months. I am not sure how this survey squares with the current Fedwatch Futures data that shows 89% of traders see no rate hike in September and only about a third even expect another hike at all in 2023.

With that background, it looks like the Bulls are in control so far in the premarket. All three major index ETFs show a premarket gap up and then are giving us white-bodied candles so far in the early session. However, none of them are close to retesting their T-line (8ema) yet. The short-term trend remains bearish with all three well below their T-line. Of course, the long-term trend is still hanging on to a bullish course but it has been pushed by the Bears over the last three weeks. As far as extension goes, the premarket move gets rid of any concern about overextension below the T-line (8ema). Meanwhile, the T2122 indicator remains quite oversold, but it is not pegged to the bottom of its range. So, we have room to move either direction, but are still due for a pause or bounce soon. Just remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet.

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

On Thursday, markets started the day a bit higher (gapping up 0.24% on the SPY, up 0.33% in the DIA, and up 0.39% in the QQQ).  However, that was essentially the last we saw of the Bulls for the day.  After that open, the DIA managed to grind sideways in a very tight range until 11 am.  Then it sold off in waves, closing on the lows.  After its gap, the SPY sold off slowly until noon, had a very weak one-hour bounce, and then also sold off all the way into the close.  QQQ immediately sold off harder than the other two major index ETFs for the first hour.  At that point, it modestly bounced until 1 pm before it also sold off hard the rest of the day.  This action gave us large black-bodied candles with tiny wicks in the SPY, DIA, and QQQ.

On the day, nine of the 10 sectors were in the red again with Consumer Cyclical (-1.40%) once more leading the way lower and Energy (+0.83%) holding up much better than any other sector.  At the same time, the SPY lost 0.76%, DIA lost 0.78%, and QQQ lost 1.09%.  VXX gained another 4.81% to close at 26.38 and T2122 dropped even further into the oversold area at 2.86.  10-year bond yields continued to climb to 4.284% while Oil (WTI) climbed to close at $80.39 per barrel. This all took place on slightly less-than-average volume again across all three major index ETFs.  So, the Bulls opened us higher.  However, after that, it was all Bears all the time the rest of the day, even picking up speed in the afternoon.          

The major economic news reported Thursday included Weekly Initial Jobless Claims that came in just a bit below expectation at 239k (compared to a forecast of 240k and the prior week’s 250k reading).  At the same time, the Philly Fed Manufacturing Index was reported dramatically higher than predicted at +12.0 (versus the -10.0 forecast and even further above the July value of -13.5). However, the Philly Fed Employment Index came in well below anticipated at -6.0 (compared to a forecast of -0.7 and even the July reading of -1.0).  Then, after the close, the Fed’s Balance Sheet showed another reduction of $62 billion, down to $8.146 trillion from $8.208 trillion.

The NY Fed released survey results Thursday afternoon.  The survey found that, at least as of just before the late-July Fed meeting, big banks and money managers believed the July rate hike would be the last one for this tightening cycle.  The survey also showed that most “Primary Dealers” believe we will see Fed rate cuts starting in April, while money managers think the cuts will begin in March of 2024.  Furthermore, the big banks expect the Fed to stop reducing its Balance Sheet when it reaches $6.75 trillion (now at $8.146 trillion as reported above and falling at a rate of about $50-$75 billion per week).

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In stock news, Blue Shield of CA made major waves by announcing it will stop using CVS to manage its pharmacy benefits program and will instead work with AMZN and other firms.  (CVS lost 8.14% on the day on this news.)  Elsewhere, PFE announced that its updated COVID-19 vaccine does show “neutralizing activity” against the Eris subvariant in addition to the (still dominant) Omicron variant.  Not to be outdone, MRNA announced the results of an initial study which showed their updated COVID-19 vaccine is “effective” against Omicron, Eris, and Fornax variants.  In the afternoon, troubled electric carmaker MULN launched a $25 million stock buyback program in an effort to boost the stock price and avoid being delisted.  At the same time, private trucking company Estes Express submitted a $1.3 billion bid to purchase the freight terminals of bankrupt YELL.  Meanwhile, F and its partners (a consortium of South Korean firms) announced they will build a $900 million battery factory in Quebec.  In the late afternoon, Bloomberg reported that GS is on a hiring spree, having hired several hundred new staff to address concerns identified by the Fed.  Twitter (“X”) was in trouble yet again Thursday after ads from ADBE, GILD, and several other brands were run beside “pro-Nazi” content.  ADBE and GILD have suspended advertising on X after the latest in the social media platforms series of blunders.

In stock legal and regulatory news, the union for striking Hollywood Writers sent a letter urging the FTC to investigate DIS, AMZN, and NFLX on antitrust grounds.  The Writers Guild of America told FTC Chair Khan that those three companies have amassed too much power in the streaming media industry and are now effectively an oligopoly.  At the same time, GOOGL’s YouTube unit defeated a racial bias lawsuit that had been filed by black and Hispanic content creators.  A US District Judge in San Francisco threw out the case, saying the claims did not come close to suggesting discrimination.  Elsewhere, Reuters reported that US Customs has begun increased inspections of car parts being imported from China in an effort to identify and stop the import of any products produced by supply chains involving forced (Uyghur) labor.  At midday, TSLA notified Core Lithium it will sue the Australian miner in seven days unless the two sides reach a mutual agreement. This comes after the two companies failed to reach an agreement on supply quantities and prices prior to a mutually agreed prior date.  Late in the day, C was subpoenaed by the US House Judiciary Committee (GOP) over alleged data sharing with the FBI without the appropriate legal process prior to that disclosure.  This is part of the effort by the GOP members of the committee to help the January 6 defendants by using subpoena power to provide extra discovery for their defenses. 

After the close, AMAT, GLOB, KEYS, and ROST reported beats on both the revenue and earnings lines.  However, FTCH missed on both the top and bottom lines.  It is worth noting that AMAT and ROST raised forward guidance.  On the other side, KEYS and FTCH lowered their guidance. 

Overnight, Asian markets were nearly red across the board with only Australia (+0.03%) barely hanging on to green.  Hong Kong (-2.05%), Shenzhen (-1.75%), and Shanghai (-1.00%) led the region lower.  In Europe, we see a similar picture taking shape at midday with only Russia (+0.64%) appreciably in the green.  Meanwhile, The CAC (-0.81%), DAX (-0.77%), and FTSE (-0.80%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are also pointing to a red start to the day.  The DIA implies a -0.18% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.61% open at this hour.  At the same time, 10-year bond yields are down sharply to 4.223% and Oil (WTI) is off a quarter of a percent to $80.19 per barrel in early trading.

There is no major economics news scheduled for Friday.  The major earnings reports scheduled for before the opening bell include DE, EL, VIPS, XPEV, and PANW.  Then, after the close, there are no major reports scheduled.

So far this morning, DE and EL reported beats on both the revenue and earnings lines.  Meanwhile, VIPS missed on revenue while beating on earnings.  However, XPEV missed on both the top and bottom lines.  It is worth noting that DE raised its forward guidance while EL, VIPS, and XPEV all lowered their guidance.

In miscellaneous news, JPM reported Thursday that hedge funds have slowed down their exit from value and small-cap stocks in the last month.  The study said the flow of funds moving from value to growth stocks in the last month (as “AI fever” hit) has now drawn mostly ended.  This report seems reasonable as the “high growth” QQQ names are down 6.54% since the first of the month.  Elsewhere, China’s largest developer and the world’s most heavily indebted real estate company, China Evergrande, filed for Chapter 15 bankruptcy protection in NY on Thursday.  (Chapter 15 is the foreign entity equivalent to Chapter 11.)  Finally, the Texas electric grid operator (ERCOT) issued a voluntary power conservation request for Thursday, saying it expected to hit its tenth record high demand of the summer in the late afternoon and evening.  NRG (which also serves parts of TX) also requested customer electric conservation for the same reason. 

In late-breaking news, Bitcoin plummeted 9% between 5:30 pm and 5:35 pm Thursday night.  The news came a few hours after SpaceX disclosed it had written down its Bitcoin holdings by $373 million.  The main cryptocurrency recovered about half of the losses by 9:30 pm.  Elsewhere, Reuters reported that last night President Biden approved the sending of F-16 fighters from Denmark and the Netherlands to Ukraine.  These planes will eventually be replaced by F-35 jets from LMT.

With that background, it looks like the Bears are still in control so far in premarket. We see black-body candles trading near the lows of the early session in all three major index ETFs at this point. The trend remains bearish with all three below their T-line (8ema). QQQ and DIA are getting close to their next potential support level this morning. However, SPY still has air below it until it reaches potential support. Of course, the long-term trend is still hanging on to a bullish course but it is being pushed hard by the Bears over the last three weeks. As far as extension goes, we are getting extended below the T-line (8ema) in al three with the SPY and QQQ being especially stretched. The T2122 indicator also remains very oversold, but not yet quite pegged to the bottom of its range. So, we are do for a pause or bounce soon. However, remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet. Also keep in mind that this is Friday, payday. So, take some profits off the table and prepare your account for the weekend news cycle by lightening up, hedging, or buying some insurance for your positions.

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 just on the Bearish side of flat (gapping down 0.10% in the SPY, down 0.13% in the DIA, and down 0.13% in the QQQ).  At that point, we saw a modest divergence with DIA rallying sharply for 20 minutes to reach the highs of the day before slowly meandering back down the rest of the day.  Meanwhile, the SPY and QQQ meandered sideways with a very modest Bullish trend until shortly after 11 am.  Then the SPY and QQQ sold off briskly until 1 pm and ground sideways until 3 pm before resuming their move lower.  All three of those major index ETFs went out very near their lows of the day.  This action gave us black-bodied candles with upper wicks in all three. 

On the day, nine of the 10 sectors were in the red with Consumer Cyclical (-1.25%) leading the way lower and Utilities (+0.26%) being the only sector to hang on to the green territory.  At the same time, the SPY lost 0.73%, DIA lost 0.53%, and QQQ lost 1.06%.  VXX gained 1.61% to close at 25.17 and T2122 dropped slightly, further into the oversold area at 5.54.  10-year bond yields continued to climb to 4.27% while Oil (WTI) was down 2.22% to close at $79.19 per barrel. This all took place on less-than-average volume again across all three major index ETFs.  So, the Bears put in some work, following through to the downside after a tepid early attempt to reverse the downtrend by the Bulls.          

The major economic news reported Wednesday included Preliminary July Building Permits, which came in slightly below expectations at 1.442 million (compared to a forecast of 1.463 million and a June reading of 1.441 million).  On a month-on-month basis, this was actually a +0.1% move (versus a forecast of -1.7% and June’s 3.7% fall).  At the same time, July Housing Starts were reported above the predicted amount at 1.452 million (compared to the 1.448 million forecast and the June value of 1.398 million).  On a month-on-month basis, that was a strong +3.9% (versus a forecast of +2.7% and vastly better than June’s -11.7%).  Later, July Industrial Production was a matter of what timeframe you are considering.  On a month-on-month basis, Industrial Production rose more than anticipated at +1.0% (compared to a forecast of +0.3% and June’s 0.80% decline).  However, on a year-on-year basis, July Industrial Production was a bit worse than expected at -0.23% (versus a -0.10% forecast but still significantly better than June’s 0.78% decline).  At midmorning, the EIA Weekly Crude Oil Inventory saw a much bigger drawdown than predicted at -5.960 million barrels (compared to a forecast of -2.320 million barrels and far worse than the prior week’s inventory build of 5.851 million barrels).  The EIA also said that US Oil Production reached a new three-year high of 12.7 million barrels per day on average produced last week.

The July Fed Meeting Minutes came out Wednesday.  They showed a divided FOMC, with “some” members citing the risks of pushing rates too far even as “most” members still prioritizing the fight against inflation over the potential for economic harm.  For example, “a couple” participants called for leaving rates unchanged again in July.  Still, the vote was unanimous to raise a quarter point.  Later, the committee discussed risk management steps that might bear on future rate decisions.  In summary, the minutes showed the group was committed to following the course they had been indicating to markets for some time.  However, at least the written verbiage they want to put out will continue to say everything is “data dependent.”  With that said, they may have tipped their hand as to how the group is leaning when it was agreed that future moves will be dictated by the data which will “help clarify the extent to which the disinflation process was continuing.”  In addition, both staff economists and the committee members now seem to see a potential “soft landing” taking shape.

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In stock news, GM invested $60 million in another battery startup (Mitra Chem), which specialized in using AI to optimize the design and creation of lithium-ion battery parts.   Elsewhere, Bloomberg reported that BAESY is in talks to acquire BALL’s aerospace division for more than $4 billion.  At the same time, MULN announced that it will debut its ultra-high-performance FIVE RS crossover vehicle on August 20.  (The FIVE RS will reportedly do 0-60mph in less than 2 seconds and will have a top speed over 200mph.)  Later, Reuters reported that MT is now considering entering the bidding for X and has brought in investment bankers to help prepare an offer.  After the close, BX (along with a private company and Canada’s second-largest pension fund) struck a deal with BAC. The deal will allow them to buy $1.5 billion worth of solar and wind plants to capitalize on the 2022 Biden green energy funding in the Inflation Reduction Act.  As part of the deal, a private company (Invenergy Renewables) will sell BAC $580 million of tax credits and put the money toward 14 projects being led by AEP.  Overnight, the Wall Street Journal reported that GOOGL’s Health Science unit (Verily) is planning more cost-cutting after losing more money than expected in the last year.  The details are unknown but Verily laid off 200 workers and discontinued some products earlier this year.  At the same time, Reuters reports that TSN is now planning to sell its Chinese poultry business according to three sources.  That unit has $1.1 billion in annual sales revenue.  Also overnight, BAESY did agree to buy BALL’s aerospace unit but for a higher-than-expected $5.55 billion in cash.  Finally, early today Reuters reported that STLA is investing more than $100 million in CA lithium extraction company Controlled Thermal Resources.  (BRKB has struggled to extract lithium in the same area due to large concentrations of silica in the brine from which lithium is extracted.  Controlled Thermal has the technology to remove the silica and other undesirable elements prior to the extraction process.)

In stock legal and regulatory news, Bloomberg reported that V is facing an investigation by the Dept. of Justice over how much it charges merchants for the technology used to safeguard cardholder data.  (That service is called “tokenization” and it replaces the card number used with a computer-generated token.)  The DOJ is investigating the validity of charging merchants more for not using the new tokenization service it offers.  (MA reached a settlement in December with the FTC over the same practice the DOJ investigating V over.)  At the same time, a lawsuit was filed against SBGI, by its bankrupt subsidiary, accusing SBGI of siphoning off $1.5 billion from the bought-out firm, causing the bankruptcy.  Elsewhere, INTC announced it has abandoned the proposed purchase of TSEM after being unsuccessful in getting Chinese authorities to approve the deal.  As a result of killing the deal, INTC owes TSEM $353 million.  At the same time, the NHTSA announced that TM is issuing a recall for 168k 2022-2023 hybrid pickup trucks over a potential fuel leak fire hazard.  In Europe, the Czech government passed a law that will charge multinationals a 15% minimum profit tax for companies with greater than $817.50 million in sales in two of the last four years.  (This is aimed at preventing multinationals from moving profits to a country of the least taxes.)  Back in the US, the state of TX approved the TSLA standard for charging networks in that state to qualify for federal funds.  Meanwhile, officials from seven states wrote to FTC Chair Khan opposing KR’s proposed $24.6 billion acquisition of ACI.  At the same time, Reuters reported that ALL has agreed to pay $90 million to settle a class action suit brought by shareholders who had accused the insurer of lowering underwriting standards (poor risk management) to boost sales growth.  At the close, the FDA announced it has approved a bone disorder treatment from IPSEY.  The drug will have an estimated cost of $400,000 per year and this gives the company a lead over REGN which has a treatment for the same disease still listed as experimental.  After the close, 16 people who witnessed the 2022 Buffalo NY grocery store mass shooting filed suit against three firearms retailers and GOOGL (where the defendant live-streamed the shooting on YouTube).  Also after the close, the FTC approved the EQT acquisition of QMCO for $5.2 billion (announced in September 2022).

After the close, A, HRB, JKHY, NU, and LRN all reported beats on both the revenue and earnings lines.  However, SQM missed on both the top and bottom lines. It is worth noting that A also lowered its forward guidance. So far this morning, JD, TCEHY, and TJX reported beats on both the revenue and earnings lines.  Meanwhile, EAT, PFGC, and TGT missed on revenue while beating on the earnings line.  It is worth noting that TGT cut its full-year guidance.

Overnight, Asian markets were mixed but leaned toward the red side.  Shenzhen (+0.61%), Thailand (+0.61%), and Taiwan (+0.42%) led the gainers.  Meanwhile, Malaysia (-1.06%), New Zealand (-0.95%), and Australia (-0.68%) paced the losses.  However, in Europe, the bourses are leaning strongly to the downside at midday.  The breadth of losses is wide with Finland (+0.31%) being the only appreciable green while the CAC (-0.05%), DAX (-0.07%), and FTSE (-0.13%) are typical of modest losses and lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.27% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.18% open at this point.  At the same time, 10-year bond yields are climbing again at 4.302% and Oil (WTI) is 1.12% to $80.25 per barrel in early trading.

The major economics news scheduled for Thursday includes Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and Philly Fed Mfg. Employment (all at 8:30 am), and the Fed Balance Sheet (4:30 pm).  The major earnings reports scheduled for before the opening bell include ARCO, BILI, DOLE, NICE, TPR, and WMT.  Then, after the close, AMAT, FTCH, GLOB, KEYS, and ROST report.

In economic news later this week, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, the National Futures Assn. approved COIN to sell crypto futures to us investors on Wednesday.  (75% of all global cryptocurrency transactions are done using futures.  However, US investors have not been able to participate in that market until this approval.)  Meanwhile in Washington, as Congress headed home for summer recess there was no movement on the Appropriations bills, which could lead to a government shutdown.  However, an interesting development was hinted at.  House Speaker McCarthy floated the idea of a continuing resolution, kicking the can down the road until December or January.  Democrats, especially in the Senate, were very supportive of the idea.  The “why?” is the interesting part.  Speculation is that some people believe pushing off the decisions until later may see legal developments having weakened one faction’s support from the base and made them more amenable to compromises.  It’s pure speculation, but it might make sense since nothing else is likely to change between the two sides whether the deadline is in 30 days or five months. 

So far this morning, BILI, NICE, and WMT all reported beats on both revenue and earnings.  Meanwhile, DOLE missed on revenue while beating on earnings.  However, TPR and ARCO missed on both the top and bottom lines.  It is worth noting, the BILI and TPR have lowered their forward guidance.  At the same time, WMT raised its forward guidance.

With that background, it looks like markets are looking to give us a modest gap-up, but indecisive start to the morning. The SPY and QQQ are giving us the strongest (white-bodied) premarket candles but that is not saying much. The trend remains bearish with all three major index ETFs below their T-line (8ema). None of the three major index ETFs have a potential support level immediately below at this moment. Of course, the long-term trend is still hanging on to a bullish course but it is being pushed by the Bears over the last three weeks. As far as extension goes, we are starting to get a little bit extended below their T-line (8ema) and the T2122 indicator remains very oversold, but not yet quite pegged to the bottom of its range. So, both sides have some slack to work with. However, the Bulls have much more room to run and we may be in need of a pause or pullup.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday saw markets gap down again with SPY opening down 0.44%, DIA opening down 0.45%, and QQQ opening down 0.32%.  After that open, the Bears were able to follow through to the downside for the first hour.  At that point, all three major index ETFs meandered sideways in waves not far up off the lows until 3 pm.  From there, all three sold off in the last hour, reaching new lows for the day.  This action gave us gap-down, large-body, black candles in all three major index ETFs.  DIA printed what can easily be seen as an Evening Star signal that broke through the recent support level.  Meanwhile, QQQ printed a Bearish Harami that failed its T-line.  SPY did not print a signal, but definitely took out recent lows and at best (from a Bullis standpoint) could be seen as right at the potential support level now..

On the day, all 10 sectors were in the red with Financial Services (-1.85%) and Basic Materials (-1.84%) out front leading the way lower and Healthcare (-0.41%) holding up far better than the other sectors.  At the same time, the SPY lost 1.16%, DIA lost 1.01%, and QQQ lost 1.05%.  VXX gained 5.76% to close at 24.77 and T2122 dropped deep into the oversold area at 5.76.  10-year bond yields continued to climb to 4.217% while Oil (WTI) was down 1.85% to close at $80.97 per barrel. This all took place on less-than-average volume across all three major index ETFs.  So, the bears got a big tailwind overnight from the Fitch banking sector warnings and that was reinforced when Fed Member Kashkari advocated “significantly higher” capital requirements for banks (beyond even the just hinted and not yet proposed new ones from the Fed, FDIC and Comptroller of the Currency).           

The major economic news reported Tuesday included the July Export Price Index, which came in much higher than expected at +0.7% (compared to a forecast of +0.2% and far higher than the June reading of -0.7%).  At the same time, the July Import Price Index also came in high at +0.4% (versus the forecast of +0.2% and the June value of -0.1%). July Retail Sales also increased much more than predicted at +0.7% (compared to a +0.4% forecast and a June value of +0.3%).  However, the Preliminary August NY Empire State Mfg. Index was reported far lower than anticipated at -19.0 (versus a forecast of -1.0 and even worse compared to the July reading of +1.10).  Later in the morning, June Business Inventories came in lower than expected at +0.0% (versus the forecast of +0.1% and the May value of +0.2%).  At the same time, June Retail Inventories also came in lower than predicted at +0.3% (compared to a forecast of +0.4% and a May reading of -0.1%).  Then, at the close, the June TIC Net Long-Term Transactions (which is the difference between foreign securities bought by the US citizens versus US securities bought by foreigners…it measures whether money is flowing into or out of our markets) came in higher than expected at +$195.9 billion (compared to a forecast of +107.2 billion and far above the May value of +$23.6 billion).  Finally, after the close, the API Weekly Crude Oil Stocks Report showed a larger-than-expected inventory drawdown of 6.195 million barrels (versus the forecasted drawdown of 2.050 million barrels and much lower than the prior week’s 4.067-million-barrel inventory build).

In Fed-speak news, in addition to his statements calling for even stricter banking regulations, Minneapolis Fed President Kashkari said he was not ready to say the Fed is done raising rates.  Specifically, Kashkari said, “I’m seeing positive signs that say, hey, we may be on our way; we can take a little bit more time to get some more data and before we decide whether we need to do more.”  At the same time, he said the Fed is “a long way” from cutting rates, even though there is a possibility of cutting them next year “just to keep monetary policy at a stable point.”

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In stock news, Reuters reported that sporting-related companies NKE, ADDYY, and DKS are scrambling to unload products at significant discounts after the US Women’s World Cup Soccer team failed to make the second round of the World Cup Soccer Tournament.  They reported that various retail analysts were seeing 25%-35% discounts on jerseys, t-shirts, sweats, and other branded apparel.  Elsewhere, BP announced they have invested in a start-up company that is seeking to use vapor from heavy industry locations to sharply reduce the production costs of zero-carbon hydrogen.  At the same time, financially troubled UP said Tuesday that it will give up to 95% of its common stock to investment firms in return for a $500 million lifeline.  The investors include DAL and two private equity firms.  Later, BLNK announced it will be expanding its Latin American electric charging network.  The company had previously committed to 2,100 EV chargers across eight countries in the region.  In unrelated news, TSLA launched two cheaper and shorter-range versions of its Model S and Model X cars.  (Both will have exactly the same hardware, but will use software to limit the range.  The shorter-range version will be about $10,000 less than their “full range” sister products.)  Late in the day, private firm Esmark said it had $7.8 billion of cash in the bank and was ready to close an acquisition of X (the all-cash offer was made Monday).  After the close, OXY announced it would be acquiring carbon-capture firm Carbon Engineering for $1.1 billion.  At the same time, drugmaker MNKKQ announced it is preparing to seek bankruptcy protection for the second time in three years after failing to make a $200 million settlement payment to opioid victims.  In addition, LUV announced it has reached a tentative agreement with the union representing over 17,000 transport of its workers who handle ramp, cargo, and provisioning operations.

In stock legal and regulatory news, the White House and CFPB announced plans to regulate companies in the surveillance industry, including the data brokers that accumulate and sell consumer personal data.  The announcement specifically called out EXPGF, TRU, and EFX (consumer credit rating agencies) for selling “credit header information” such as names, addresses, and social security numbers.  This comes after the FTC sued (in late 2022) an Idaho company for selling cell phone geolocation data.  Elsewhere, the 4^th Circuit Court of Appeals ruled that WBA must face trial (it revived the lawsuit) for defrauding the US and the state of VA related to billing and eligibility of patients for expensive hepatitis C drugs.  (A lower court had dismissed the trial on the odd reasoning that WBA had violated federal law in its pre-authorization filings making the post-treatment billing irrelevant.  The Appeals Court rejected that idea.)  At the same time, Canada’s corporate ethics watchdog announced Tuesday that it is investigating RL over allegations the company uses forced labor (including Uyghur labor) in its Chinese production facilities.  Meanwhile, NY state fined CAR $275,000 for refusing to rent vehicles to people who do not have credit cards, even if they offered to pay a deposit.

After the close, A, HRB, JKHY, NU, and LRN all reported beats on both the revenue and earnings lines.  It is worth noting that A also lowered its forward guidance. So far this morning, JD, TCEHY, and TJX reported beats on both the revenue and earnings lines.  Meanwhile, EAT, PFGC, and TGT missed on revenue while beating on the earnings line.  It is worth noting that TGT cut its full-year guidance.

Overnight, Asian markets were nearly red across the board with only two of the twelve exchanges barely hanging onto green territory.  Meanwhile, South Korea (-1.76%), Japan (-1.46%), and Hong Kong (-1.36%) led the region lower.  In Europe, the picture is more mixed but still leans toward the red at midday.  The CAC (-0.07%), DAX (+0.05%), and FTSE (-0.48%) are leading the region lower with five green and 10 red bourses (Russia being down 2.11%) in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a flat start to the day.  The DIA implies a +0.01% open, the SPY is implying a -0.03% open, and the QQQ implies a -0.05% open at this hour.  At the same time, 10-year bond yields have pulled back a bit to 4.186% and Oil (WTI is flat at $80.97 per barrel in early trading.

The major economics news scheduled for Wednesday includes July Building Permits and July Housing Starts (both at 8:30 am), July Industrial Production (9:15 am), EIA Crude Oil Inventories (10:30 am), and FOMC Meeting Minutes (2 pm).  The major earnings reports scheduled for before the opening bell include EAT, JD, PDGC, TGT, TCEHY, TJX, and ZIM.  Then, after the close, AVT, SQM, CSCO, KE, STNE, and SNPS report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, China lowered its one-year and medium-term interest rates by 15 basis points to 2.5% on Tuesday.  Even as modest as it was, that was the largest cut in three years.  However, interest rates are far from China’s largest problems as another of China’s largest real estate developers is at risk of loan defaults and the country’s largest financial conglomerate (Zhongzhi Enterprise Group, often called China’s Blackstone) just missed payments on its investment products.  In addition, later Tuesday, it was reported that new bank loans fell to a 14-year low.  Elsewhere, Bloomberg reported that CS’s Annual Global Wealth Report found that global household wealth fell last year for the first time since the 2008 financial crisis.  Total net private wealth decreased by 2.4% to a total of $454.4 trillion in 2022. 

In late-breaking news, Nielsen reports that for the first time ever, TV (broadcast and cable) viewing dropped below 50% of all views.  At the same time, streaming media viewing rose to 39%.  Elsewhere, Bloomberg reports there is discontent in the ranks of senior management at GS.  Apparently, a large faction of senior GS managers want the CEO (Soloman) replaced.  Finally, China is going further in its efforts to prop up its economy by asking some of the largest investment funds in both the Shanghai and Shenzhen exchanges to be “net buyers of stocks.”  No carrot or stick was mentioned in the report.  Instead, it was just a request and exhortation, which may imply something in China that it doesn’t in other parts of the world.  China is also considering reducing the country’s “stamp duty” (which is a government fee for approval of loans, leases, insurance, and other financial contracts). 

With that background, it looks like traders are undecided this morning with small-body candles near Tuesday’s close level. The trend remains bearish with all three major index ETFs below their T-line (8ema). Only the SPY is sitting at a potential support level at this moment but the other two are not far above their own potential support. Of course, the long-term trend is still hanging on to a bullish incline but it is being pushed by the Bears over the last three weeks. As far as extension goes, none of the major index ETFs are too far from the T-line. However, the T2122 indicator is now oversold, but not yet quite pegged to the bottom of its range. So, both sides have some slack to work with. However, the Bulls have more room 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

Markets opened just on the red side of flat Monday (gapping down 0.21% in the SPY, down 0.08% in DIA, and down 0.22% in the QQQ).  However, the Bulls took over early and rallied all three major index ETFs to highs by 11 am.  Then the doldrums took over to give us a sideways grind in all three major that lasted until 3:55 pm.  Finally, we saw a strong rally the last 5 minutes of the day in SPY, DIA, and QQQ.  This action gave us Morning Star signal candles in the SPY and QQQ with the SPY closing right up against its T-line (8ema).  Meanwhile, DIA was much more indecisive, printing a white-bodied Spinning Top that closed just above the T-line after retesting that level. It’s worth noting that chip stocks (NVDA, MU, MRVL, and AMD) really led the parade Monday.  This all happened on less-than-average volume in all three major index ETFs.

On the day, six of the 10 sectors were in the red with Technology (+1.25%) way, way out front leading the way higher and Utilities (-1.13%) far behind, lagging the other sectors.  At the same time, the SPY gained 0.54%, DIA gained just 0.05%, and QQQ gained 1.12%.  VXX lost 1.68% to close at 23.43 and T2122 fell a bit but remains in the mid-range at 28.02.  10-year bond yields spiked again to 4.201% while Oil (WTI) was down 0.76% to close at $82.56 per barrel. This all took place on average volume in the QQQ and well below average in the large-cap index ETFs.  So, we saw a minor gap lower met with pretty much immediate buying.  However, after that move, markets just treaded water until the end of the day when the Bulls drove us higher into the close.         

There was no major economic news reported Monday.  However, the NY Fed did release its monthly survey of consumer inflation expectations.  The survey found that, on average, in July consumers now expect inflation to be at 3.5% a year from now down sharply from the 3.8% average expectation one month ago (June).  This was the lowest expectation reading since April of 2021.  In addition, 3-year and 5-year inflation expectations also dropped, although not as much, from 3.0% to 2.9%.  The survey also found positive improvements in consumer views on their personal finances and the job market over the next year.  The percentage that expect their personal situation to improve over the next year rose to the highest level since September 2021. Elsewhere, US bank regulators (FDIC, Fed, and Office of the Comptroller) said they will soon propose new regulations that require any bank with more than $100 billion in assets to issue enough long-term debt to cover capital losses in the event they ever fail.

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In stock news, PYPL named current INTU exec. Alex Chriss as its new CEO.  Chriss will take over for the current CEO on September 27.  At the same time, AMC stock gapped sharply lower (closing down 35.55%) while APE (preferred shares of AMC) closed up 16.29%.  This was the result of fear that the recent settlement of shareholder legal challenges will allow AMC to issue more shares, diluting the existing ones.  (Also AMC announced at 10-to-1 reverse split for August 24 with all APE shares converted to common stock on August 25.)  Over in China, shares of electric vehicle makers (LI, XPEV, NIO, and BYDDY) fell as TSLA announced more price cuts as it continues the EV price war.  Later, HE fell 35% based on fear of the electric utilities’ potential liability from the fires on Maui last week.  At the same time, CHK announced Monday it will sell its remaining “Eagle Ford” assets to SBOW for $700 million.  Elsewhere, KHC named insider Carlos Abrams-Rivera as its new CEO. At the same time, BTAI announced it will cut more than 50% of its workforce as it pivots to restructure the business.  By mid-afternoon, FFIE announced it has delivered its first Futurist Alliance 2.0 car (priced at $309k).  This “electric supercar” has more than 1,000 horsepower (doing 0-60mph in 2.27 seconds) and the ability to go 381 miles between charges.  Late in the day, there were two updates to the Monday morning report that X had turned down a CLF offer to buy the steelmaker out.  On Monday, the USW union threw its support behind the CLF offer to buy CLF.  At the same time, privately-held Esmark made an offer of $7.8 billion ($35/share) for X (the rejected CLF offer was $7.3 billion).  After hours, LL announced it has begun exploring “strategic alternatives.”  LL shared plummeted 19% in post-market trading on that news.

In stock legal and regulatory news, GOEV revealed Monday that it has finalized $113 million in incentive agreements with the state of OK and the North American Cherokee Nation.  The deal would allow GOEV to earn $113 million over 10 years if it meets the set performance objectives.  Elsewhere, President Biden called on F, GM, STLA, and the UAW to come together to reach a fair agreement. (No mention was made of the potential to invoke a 30-day non-strike cooling-off period.)  Later, UBS agreed to pay $1.435 billion to settle US charges that the Swiss lender misled investors, leading them to buy distressed mortgage securities in 2008.  (The impressive thing is that UBS managed to drag out the process for 15 years.  For example, CS, which UBS bought in June, paid $5.28 billion for the same crime…but way back in 2017.)  At the end of the day, NKLA recalled all battery-powered trucks it has delivered and stopped sales of new ones after an investigation found battery coolant leaks led to fires.  At the same time, an Australian court fined DELL $6.5 million for misleading customers about discounts for add-on computer monitors.  In addition, the FTC fined EXPGF (Experian) $650,000 for spamming consumers with marketing emails without providing a way to opt-out.  Meanwhile, the FDA approved PFE’s blood cancer therapy named Elrexfio.  At the same time, K won a 3-0 decision by the 9^th Circuit Court of Appeals where plaintiffs had sought to revive a class action suit against K over the label claims on the amount of protein in its cereal.

After the close, GSM and XP both missed on revenue while beating on earnings. So far this morning, CAH and HD reported beats on both the revenue and earnings lines.  Meanwhile, ESLT, IHS, and ONON beat on revenue while missing on earnings.  On the other side, SE missed on revenue while beating on earnings.  Unfortunately, TME missed on both the top and bottom lines.  It is worth noting that IHS lowered its forward guidance.

Overnight, Asian markets were mixed.  Hong Kong (-1.03%), South Korea (-0.79%), and Shenzhen (-0.70%) paced the losses.  Meanwhile, Japan (+0.56%), Australia (+0.38%), and Taiwan (+0.37%) led the gainers.  In Europe, the bourses are leaning heavily toward the bearish side at midday.  The CAC (-1.27%), DAX (-1.04%), and FTSE (-1.45%) are leading the region lower with only two exchanges in the green in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.61% open, the SPY is implying a -0.57% open, and the QQQ implies a -0.52% open at this hour.  At the same time, 10-year bond yields are spiking again to 4.231% and Oil (WTI) is down more than one percent to $81.66 per barrel in early trading.

The major economics news scheduled for Tuesday includes July Retail Sales, July Export Price Index, July Import Price Index, and NY Fed Empire State Mfg. Index (all at 8:30 am), June Business Inventories and June Retail Inventories (both at 10 am), June TIC Net Long-Term Transactions (4 pm), and API Weekly Crude Oil Stock Report (4:30 pm).  Fed member Kashkari also speaks at 11 am.  The major earnings reports scheduled for before the opening bell include CAH, ESLT, HD, HIS, SE, and TME. Then, after the close, A, COHR, HRB, JKHY, NU, and LRN report.

In economic news later this week, on Wednesday, July Building Permits, July Housing Starts, July Industrial Production, EIA Crude Oil Inventories, and FOMC Meeting Minutes are reported.  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Wednesday, EAT, JD, PDGC, TGT, TCEHY, TJX, ZIM, AVT, SQM, CSCO, KE, STNE, and SNPS reports.  On Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, Nomura Securities released data from its study of 0DTE (zero days to expiration) options.  The study found that 0DTE contracts are surging in use, accounting for more than 55% on S&P500 Index volume on a single day recently (1.86 million contracts).  The study also found that contrary to the past (when Call options were the most widely used) over the last 20 days 0DTE Put options had about 10% more volume than 0DTE Call options.  Elsewhere, Argentina made some “moves” on Monday, devaluing their currency 18% against the Dollar and hiking their central bank interest rate 21% to a staggering 118%.  Overnight, Russia’s central bank called an “unscheduled emergency meeting” in the hope of stopping the crash of the Ruble. 

In late-breaking news, Fitch announced warnings for dozens of US banks overnight.  This is the primary driver behind the strength of the bears in Europe and in the US premarket.  The warning said that if the industry score were to drop from AA- to A+ (a one-step downgrade), it would be forced to rerate all 70 major US banks it covers.  As of now, Fitch rates BAC, BNY, JPM, and STT as AA-.  It has MS and WFC at A+.  They rate BOKF, C, GS, and UMBF at A.  Fitch has CBU at A-.  COLB, HTH, and WTFC are rated BBB+ by them.  Meanwhile, BKU, EWBC, FINN, SNV, and TRMK are at a BBB rating. Finally, among the investment grade banks, Fitch has WAL at BBB-.  Fitch rates CATY and PACW as “below investment grade” BB+. 

So far this morning, JKS reported beats on both the revenue and earnings lines.  (ERJ has not yet reported.)

With that background, it looks like the bears have gapped the premarket down and have kept the pressure on with black-bodied candles sitting at the low of the early session. DIA has dropped back down through its T-line (8ema). The short-term trend remains bearish, but the long-term trend is still hanging on to a bullish incline but it is starting to be pushed. As far as extension goes, all of the major index ETFs remain close to the T-line and the T2122 indicator is still in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum.

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

Friday saw a gap lower following a hotter-than-expected PPI number. The SPY gapped down 0.44%, DIA gapped down 0.21%, and QQQ gapped down 0.71%.  However, like the reverse of Thursday, the Bulls stepped in to rally until 10:30 in the QQQ and 10:45 am in the SPY and QQQ.  Both of the large-cap index ETFs recrossed the gap with the DIA traveling triple the distance of that opening gap down.  From that point, all three major index ETFs rode the rollercoaster sideways within a modest range.  This action gave us white-bodied candles across the SPY, DIA, and QQQ.  DIA had the smallest wicks, closing back up across the T-line (8ema) and printing a Piercing candle.  At the same time, the SPY printed a gap-down, Spinning Top and QQQ printed a gap-down, white-bodied Doji, that gapped down through and failed a retest of its 50sma.

On the day, seven of the 10 sectors were in the green with Energy (+0.91%) way out front leading the way higher and Technology (-0.75%) lagged behind the other sectors.  At the same time, the SPY lost 0.06%, DIA gained 0.32%, and QQQ lost 0.64%.  VXX lost almost four percent to close at 23.83 and T2122 climbed slightly and remains in the mid-range at 31.43.  10-year bond yields spiked again to 4.158% while Oil (WTI) was up fractionally to close at $83.04 per barrel. This all took place on average volume in the QQQ and well below average in the large-cap index ETFs.  So, it was a whipsaw day with a gap and a reversal followed by waves the rest of the day.  Once again, after a lot of travel, the SPY, DIA, and QQQ all ended up very near where they started.      

The major economic news reported Friday included July month-on-month PPI came in hotter than expected at +0.3% (compared to a forecast of +0.2% and the June reading of +0.0%). Later, the Preliminary August Michigan Consumer Sentiment came in just a bit better that anticipated at 71.2 (versus a 71.0 forecast but a bit lower than the July value of 71.6).  Meanwhile, the Preliminary August Michigan Consumer Expectations came in a bit lower than expected at 67.3 (compared to a forecast of 68.1 and the July reading of 68.3).  At the same time, Preliminary August Michigan Consumer Inflation Expectations were reported better than predicted at 3.3% (versus to a forecast of 3.8% and better than the July reading of 3.4%). Over the longer term, the Preliminary August Michigan 5-year Consumer Inflation Expectations also came in lower than anticipated at 2.9% (compared to a forecast of 3.0% and a July value of 3.0%).

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In Fed news, Reuters provided a breakdown of current Fed members that may be useful.  Doves include Harker (Philly), Bostic (Atlanta), Daly (San Fran), Logan (Dallas), and Barkin (Richmond).  Those leaning dovish are Goolsbee (Chicago), Cook (Governor), Collins (Boston), and Kashkari (Minny).  Centrists include Williams (NY), Jefferson (Governor), and Barr (Vice-Chair).  Those who lean hawkish are Powell (Chair), Bowman (Governor), and Mester (Cleveland).  Finally, the Hawks are Waller (Governor), and Bullard (St. Louis).

In stock news, the tense and ugly negotiations between the “Big 3” automakers and the UAW continued Friday.  After the UAW threw the latest STLA in the trash the prior week, STLA firmly rejected the UAW counter-offer calling for the union to “focus on reality.”  (The current 4-year deals between the UAW and GM, F, and STLA end on September 14, and a strike has already been authorized by the union.)  Elsewhere, an F joint venture with a Chinese state-owned automaker (owned 50-50) is now planning its own joint venture with that same Chinese state-owned company (Chongqing Chagan Automotive) to launch an electric vehicle manufacturer. This will leave the Chinese state owning 70% of the EV venture.  Later, WYNN announced it is “winding down” its online sports betting platform WynnBET, saying that customer acquisition costs were too high (too much competition) and rules across different states were not clear.  For now, they have ceased operation in AZ, CO, IN, LA, NJ, TN, VA, and WV.

In stock legal and regulatory news, Reuters reported Friday that the SEC has begun an investigation into ILMN’s $7.1 billion acquisition of Grail (a cancer detection test kit maker) in 2021.  Details are not available yet, but the investigation seems to be related to certain management statements and compensation connected to the deal.  (The EU fined ILMN $476 million in July for closing the deal without EU approval.)  Elsewhere, a US District judge dismissed a lawsuit against SBUX on Friday.  The Chief judge of the district called it a frivolous suit by a conservative activist group who were challenging SBUX’s diversity, equity, and inclusion policies.  The judge said the group’s statements in filings clearly show the suit was meant to make political points rather than address any losses from the group’s $6,000 of SBUX stock.  Meanwhile, the US Dept. of Transportation and China have agreed to double the number of flights between the two countries.  UAL, AAL, DAL, CEA, ZNH, and AIRYY are the airlines currently offering flights between the two destinations.

Overnight, Asian stocks leaned heavily toward the red with only two of the region’s 12 exchanges hanging onto the green.  Meanwhile, Hong Kong (-1.58%), Singapore (-1.41%), Japan _1.27%), and Taiwan (-1.25%) led the region lower.  In Europe, we see a much more bullish picture taking shape with nine of the 15 bourses in the green at midday.  The FTSE (-0.31%) lags while the CAC (+0.22%), and DAX (+0.44%) lead the region higher.  However, it should be noted that even with the Russian Ruble falling to a 17-month low against the Dollar, the Russian exchange is up 2.14% in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the week. The DIA implies a +0.20% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.30% open at this hour.  At the same time, 10-year bond yields have climbed to 4.148% and Oil (WTI) is down four-tenths of a percent to $82.84 per barrel in early trading.

There is no major economics news scheduled for Monday.  The major earnings reports scheduled for before the opening bell include ERJ and JKS.  Then, after the close, GSM and SU report.

In economic news later this week, on Tuesday, we get July Retail Sales, July Export Price Index, July Import Price Index, NY Fed Empire State Mfg. Index, June Business Inventories, June Retail Inventories, June TIC Net Long-Term Transactions, and API Weekly Crude Oil Stock Report.  Fed member Kashkari also speaks.  Then Wednesday, July Building Permits, July Housing Starts, July Industrial Production, EIA Crude Oil Inventories, and FOMC Meeting Minutes are reported.  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Tuesday we hear from CAH, ESLT, HD, HIS, SE, TME, A, COHR, HRB, JKHY, NU, and LRN.  Then Wednesday, EAT, JD, PDGC, TGT, TCEHY, TJX, ZIM, AVT, SQM, CSCO, KE, STNE, and SNPS reports.  On Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, the Fed reported Friday that US large bank deposits rose by $17.60 billion to the $17.36 trillion level in the week ended August 2.  At the same time, US commercial bank lending also rose by $9.3 billion to $12.132 trillion (adjusted) during the same week.  Elsewhere, Refinitiv Lipper reported that investors withdrew $14.96 billion from US equity funds in the week ending August 9.  This was the biggest outflow in seven weeks. Finally, GS economists are now predicting Fed rate cuts starting in Q2 of 2024.

In late-breaking news, on Sunday X announced it has rejected a $7.3 billion unsolicited buyout offer from rival CLF. (This would have been a 43% premium over Friday’s closing price for X.) The X management said it has rejected the offer because CLF was trying to force X to make its decision without doing enough due diligence.  However, X said it is reviewing its strategic alternatives after receiving the offer.  (Bear in mind that any deal is likely to face regulatory pushback since CLF is already the largest steelmaker in the US while X is also in the top four steel producers.)

So far this morning, JKS reported beats on both the revenue and earnings lines.  (ERJ has not yet reported.)

With that background, it looks like premarket action started higher but is indecisive at best since then. The SPY did try to retest its T-line (8ema) from below before backing down. Meanwhile, the DIA remains above its T-line, but close to it, and is printing an indecisive early-session candle. At the same time, QQQ opened up its premarket session higher, testing its 50sma from below, but has faded since then. So, the short-term trend is still bearish and the long-term trend remains bullish, although it is starting to be pushed. As far as extension goes, all of the major index ETFs are close to the T-line and the T2122 indicator remains in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

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