Markets all gapped higher again on Thursday (up 0.42% in the SPY, up 0.21% in the DIA, and up 0.86% in the QQQ).  However, at that point, we saw a bit of a divergence.  The QQQ again led us higher with a fairly strong and steady rally all day until we saw a little profit-taking in the last 15 minutes.  Meanwhile, the SPY ground sideways in a tight range along its opening level until 11:30, at which point it followed the QQQ with a steady rally that was only broken by profit-taking the last 15 minutes of the day.  On the other hand, DIA lagged again, grinding sideways in a tight range after the open until just after 10:30 am.  Then DIA sold off to retest the opening gap and spend the rest of the day meandering back and forth inside that gap area.  This action gave us gap-up white-bodied candles (more body than wick) in both the QQQ and SPY.  For its part, the DIA gave us a black-bodied Doji-type Harami that never came close to challenging the Wednesday highs.

On the day, all 10 sectors were in the green again with Technology (+2.05%) way out front leading and Industrials (+0.27%) again lagging well behind the other sectors.  At the same time, SPY gained 0.79%, DIA gained 0.08%, and QQQ gained 1.70%.  The VXX gained a half of a percent to 24.21 and T2122 climbed slightly and remains in the high end of the overbought territory at 95.99.  10-year bond yields plummeted again to 3.765% while Oil (WTI) popped another 2.05% to close at $77.30 per barrel.  So, again on Thursday, we saw the big tech names like NVDA (+4.74%) and GOOGL (+4.72%) stretch the market higher.  Meanwhile, the stodgy DIA was held up by MSFT (+1.62%) and CSCO (+1.56%) as the likes of WBA (-1.91%), TRV (-1.69%), and CVX (-1.34%) tried to drag the industrials lower.  This all took place on less-than-average volume in all three major index ETFs.

The major economic news on Thursday, June PPI came in better than expected at +0.1% (compared to a forecast of +0.2% but well above May’s -0.4% reading).  The May PPI data was also revised lower.  In addition, the “Core PPI” fell 0.2% in June.  At the same time, the Weekly Initial Jobless Claims came in below the anticipated level at 237k (versus a forecast of 250k and the prior week’s reading of 249k). Later in the day, The June Federal Budget Balance was reported as worse than expected at -$228.0 billion (compared to a forecast of -$175 billion but better than the May value of -$240 billion).  Overall, this was good economic data showing that inflation is slowly headed in the right direction, and yet the job market is holding up fine.  On the Fed front, San Francisco Fed President Daly reiterated her previous position that two more hikes will be needed this year.  She told a CNBC interview that she wants to start heading toward neutral as inflation gets closer to the 2% Fed goal.  However, she said, “It’s too early to say we have declared victory on inflation.”  Later, St. Louis Fed President (and Uber-hawk) Bullard announced he will be stepping down on August 14 in order to take a dean position at Purdue University.  This will be just under 3 weeks after the July Fed meeting and six weeks prior to the September meeting.  However, Bullard is not a voter this year.  Finally, last night Fed Governor (and voter) Waller said flat out what many Fed members have been implying and hinting at.  He said, “I see two more 25-basis-point hikes in the target (Fed Funds) range over the four remaining meetings this year as necessary to keep inflation moving toward our target.”

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In sundry economic news, Bloomberg reports that in addition to it now looking much more likely that the US will avoid the long-feared recession, the same may be true on a global level.  At least this is one possible conclusion to be drawn from labor markets.  Bloomberg reports that Global job cuts in June were down 25% from May (reaching the lowest level since December) and have been down four of the last five months.  At the same time, the UN and EU are scrambling to save the Black Sea grain deal (allowing Ukrainian grain exports) after Putin has threatened to kill the agreement.  The current deal expires Monday (7/17) and the UN is considering giving in to Russian blackmail by reconnecting a Russian bank to the SWIFT payment network for grain and fertilizer transactions.  In a related story, India (the world’s largest exporter of rice, shipping 41% of global supplies) is currently considering a export ban on most varieties rice.  Bloomberg reports this is due to rising Indian domestic rice prices amidst a disruptive “El Nino” weather pattern.  Finally, after the close, the Fed announced that Bank borrowing from the Fed declined again (very slightly this time) for the week ending July 12.  Total Fed lending from its two backstop programs was $105 billion, down $320 million from the prior week.

In stock news, MITT made a stock-and-cash offer for WMC on Thursday.  The offer will disrupt the all-stock bid made on June 28 by Terra Property Trust.  (The MITT offer is equal to $9.88 per share, which was a 12% premium at the time of the offer and more than a 9% premium on the WMC closing price Thursday).  In other deal news, XOM announced that it has agreed to buy DEN for $4.9 billion in an effort to accelerate the XOM carbon dioxide sequestration (pumping CO2 into wells) program.  Elsewhere, GS announced it has sold off $1 billion in personal loans made by its consumer unit Marcus.  No details were provided, but GS booked $470 million in losses on those loans in Q1.   At the same time, GOOGL announced it is rolling out its “Bard” AI Chatbot to Europe and Brazil.  This news eased market fears over international regulatory hurdles and GOOGL stock soared 4.72% on the day.  In other news, Kelly Blue Book announced that registrations of TSLA Model Y vehicles (TSLA’s least expensive model) surged 103% between January and May.  Meanwhile, NKLA shares skyrocketed 61% on Thursday after the company announced it had entered a strategic partnership with hydrogen producer Bayotech, which has agreed to buy 50 of the NKLA truck produced in the next 5 years.

In stock legal and regulatory news, the NRLB announced Thursday that it received a complaint against AMZN for refusing to bargain with the union elected by workers at the e-commerce giant’s Staten Island, NY distribution center.  (AMZN challenged the election but lost the appeal to the NRLB in January.  However, AMZN spokesmen said this complaint was nothing new and the company will not recognize the union, at least until it has exhausted all legal challenges to the union’s election.)  Elsewhere, a Ninth Circuit Appeals Court opened a docket on the FTC appeal of the lower court ruling against providing an injunction preventing the closing of the MSFT acquisition of ATVI.  No date has yet been set for the hearing of the case.  At mid-morning, a US District Judge ruled blockchain company Ripple Labs did not violate SEC law by selling tokens on public exchanges.  Markets immediately saw this as a huge victory for cryptocurrency (against government regulation of the same). COIN shot 30% higher (ending the day up 24.49%) while MSTR spiked 13% (and ended up 11.69%).  Later, TM and the NHTSA announced that the Japanese car company has recalled 118k 2023 cars (110k in the US) due to a wiring defect in the driver-side airbag.  By mid-afternoon, the EPA announced it has fined CPE $1.3 million for excess emissions (from tanks, flares, and other equipment) at the company’s West Texas Permian Basin operations.  At the end of the market session, Reuters reported that the FTC has opened an investigation into MSFT-backed OpenAI over claims the AI company is putting consumer personal data and reputations at risk through its AI operations.  This is the first potential regulation of artificial intelligence, even if only in terms of potential fines for violating consumer privacy.

Overnight, Asian markets leaned heavily to the green side.  Only Shenzhen (-0.14%) and Japan (-0.09%) were in the read.  Meanwhile, Thailand (+1.60%), South Korea (+1.43%), and Taiwan (+1.30%) led the rest of the region higher.  In Europe, the bourses are mixed at midday with six exchanges in some shade of red and nine in the green to some degree.  The CAC (+0.26%), DAX (-0.22%), and FTSE (+0.25%) are typical and lead the way in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed start near the flat line to the day.  The DIA implies a +0.42% open, the SPY is implying a +0.09% open, and the QQQ implies a -0.04% open at this hour.  At the same time, 10-year bond yields are bouncing back (early), up to 3.787% and Oil (WTI) is just on the red side of flat at $76.79 per barrel in early trading.

The major economic news events scheduled for Friday include June Import Price Index and June Export Price Index (both at 8:30 am), Preliminary July Michigan Consumer Sentiment and Preliminary July Michigan Consumer Expectations (both at 10 am). The major earnings reports scheduled for before the opening bell include BLK, C, ERIC, JPM, STT, UNH, and WFC.  There are no major earnings scheduled for after the close.    

So far this morning, JPM, WFC, BLK, and UNH all reported beats to both the revenue and earnings lines.  These were all “good beats” showing very strong quarter-on-quarter growth in revenue and earnings with the exception of BLK beating while having a 1.4% decline in revenue quarter-on-quarter.  Meanwhile, ERIC missed slightly on revenue at the same time they beat on earnings.  However, that was a “bad beat” on earnings since earnings were down 50% quarter-on-quarter for ERIC.  On the other hand, STT missed significantly on revenue while beating significantly on earnings and both of the numbers reported were quarter-on-quarter increases from Q1.     

In miscellaneous news, Reuters reported that US Small Businesses borrowing has not fallen off much.  In other words, the feared credit crunch does not appear to have materialized (at least yet) despite increasing rates and dire commentator predictions.  According to the National Federation of Independent Business, the average interest rate paid by small firms in June was 9.2% (up 1.4% from May).  However, the lending continues as 28% of surveyed small businesses said they regularly borrowed in June, roughly in line with May but far below the three-year high the survey reported in April.  Meanwhile, part of the strong rally in Oil (and other commodities) is the continuing crash of the US Dollar against major currencies.  The dollar sold off steadily all-day Thursday against the Euro, British Pound, Aussie Dollar, and even Canadian Dollar.  Elsewhere, the Republican focus on social culture wars continues as 13 GOP AGs warned the 100 largest US companies that they will sue those companies over any diversity policies those companies have in place.  The letter sent to the 100 singled out AAPL, GOOGL, MSF, and UBER specifically, but threatened all 100.  Finally, the WHO warned that aspartame (most widely-used artificial sweetener) may cause cancer in high doses.  However, the agency also said the topic needed more research and the sweetener should be safe in normal amounts.  This lessened the blow on companies like KO and PEP which use it in many products.

With that background, it looks like the Bulls are looking to close the week out strong. The DIA candle in particular is large and white after starting the early session down from Thursday’s close. However, note that the DIA is also right at a resistance level while the other two major index ETFs have broken through theirs earlier in the week. SPY is looking to gap up but is more tentative and for its part QQQ is looking to open higher but is a very indecisive premarket candle. Obviously, all three remain above their T-line (8ema) and the bias remains bullish across the market. Regardless, after the open settles out, do not be surprised to see some profit-taking after a strong week in all three major indices. Also, don’t forget that its Friday. So, pay yourself, move your stops, hedge, or do whatever you need to do to prepare for the weekend. All that said, do not be surprised if we drift while we wait. As far as extension goes, the SPY and QQQ are starting to get a bit stretched from the T-line. DIA remains fine in that regard. However, again, the T2122 indicator remains deep into that overbought territory. The old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available…there is just more slack available to the Bears.

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

On Wednesday, better-than-expected CPI numbers led to a gap higher (up 0.88% in the SPY, up 0.66% in the DIA, and up 1.15% in the QQQ).  At this point, the SPY and QQQ started a sideways meander centered on that opening level.  DIA started to grind sideways in a very tight range, which was interrupted by a sharp 45-minute selloff that started at about 11:25 am before continuing sideways inside the opening gap.  All three of the major index ETFs continued that sideways move right into the close.  This action gave us gap-up, indecisive candles, above the T-line (8ema) in all three.  The SPY and QQQ printed Dojis, with the SPY breaking out of June/July highs and QQQ closing right at its breakout level.  Meanwhile, the DIA printed a black-bodied Spinning Top that could be seen as failing the June high retest.

On the day, all 10 sectors were in the green with Basic Materials (+1.94%) way out front leading and Industrials (+0.07%) lagging well behind the other sectors.  At the same time, SPY gained 0.80%, DIA gained 0.27%, and QQQ gained 1.26%.  The VXX fell 5.50% to 24.07 and T2122 pulled back slightly but remains at the high end of the overbought territory at 95.60.  10-year bond yields plummeted to 3.861% while Oil (WTI) popped up 1.42% to close at $75.89 per barrel.  So, Wednesday saw a strong gap-up on the lower-than-expected CPI data.  However, after that, markets simply drifted sideways for the rest of the day.  This took place on above-average volume in the DIA and QQQ with slightly less-than-average volume in the SPY.

The major economic news on Wednesday started with the June month-on-month CPI, which came in below expectations at +0.2% (compared to a forecast of +0.3% but above the May reading of +0.1%).  At the same time, June year-on-year CPI was also below anticipated at +3.0% (versus a forecast of +3.1% and well below the May value of +4.0%).  Later, EIA Crude Oil Inventories showed a much larger build that projected at +5.946-million-barrels (compared to a +0.483-million-barrel forecast and the prior week’s drawdown of 1.508-million-barrels).  It may have nothing to do with what the Fed does in two weeks.  However, that data cannot credibly be spun as not showing progress on inflation.  On the Fed speaker front, Minneapolis Fed President Kashkari published an essay more related to supervision than rates.  He said that Central banks (in general) need to bring inflation back down and create anchored (stable) inflation expectations…adding that interest rates may need to raise further.  The rest of his essay was dedicated to ensuring the banking sector is strong enough to handle the potential additional increase in rates.  Kashkari said, “One way supervisors could ensure banks are prepared is to run new high-inflation stress tests to identify at-risk banks and size individual capital shortfalls.”  Elsewhere, Richmond Fed President Barkin sounded a hawkish note, saying “No matter how you cut it, inflation has been too high.”  Barking added that he agreed that overall demand was beginning to slow, but he wants to be “convinced” by incoming data that it will translate into lower inflation.

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In stock news, Reuters reported midday that NVDA is in talks to become the “anchor investor” in an IPO of Arm.  (Arm is a semiconductor designer whose architecture competes with the x86 platform used by INTC and AMD.  The ARM architecture is mostly used in cloud servers and high-end computing servers like those required for AI applications.) Elsewhere, LCID reported that its Q2 production dropped from Q1 while deliveries stayed flat. The LCID stock fell almost 12% on that news. Later, DPZ announced they have reached a deal allowing customers to buy their pizzas via the UBER and Postmates apps.  (DPZ shot 11.10% higher on that news.)  At the same time, Reuters reported that first-day sales of the AMZN Pride Day 6% (to $6.4 billion) from a year ago on heavy discounting according to Adobe Analytics.  Meanwhile, DIS announced after the close that it has extended the contract of CEO Bob Iger for two more years, through the end of 2026.   Also after the close, VSAT announced that there was a problem with the deployment of its “ViaSat-3 Americas” satellite that may well affect the performance of the satellite.  VSAT stock fell 20% in post-market trading on this news.

In stock legal and regulatory news, the EU antitrust watchdog granted conditional approval for AVGO’s $61 billion acquisition of VMW. The condition was altering the deal to help rival MRVL by ensuring interoperability of future products.  However, the UK competition agency and US FTC are also still reviewing the deal. Elsewhere, TSLA announced the US federal tax credits (now $7,500) for its Model 3 cars “are likely to be reduced on Dec. 31.” It provided no additional information and this could be just a marketing ploy.  Still, the US government is implementing more stringent battery rules in the hope of reducing both carbon emissions and dependence on China.  Meanwhile, it was made public Wednesday that META will appeal EU antitrust charges related to its classified advertisements.  (The appeal was announced in a closed-door meeting Friday, but made public yesterday.)  At the same time, ILMN was hit with a record $476 million fine by the EU for closing its takeover of test maker Grail before getting WU antitrust approval.  In leak news, Reuters reported that the NHTSA is close to reaching a decision on whether or not to allow GM to deploy 2,500 self-driving Cruise vehicles.  (Cruise vehicles are essentially Chevy Bolts without a steering wheel, gas, or brake pedals.)  Finally, on Wednesday evening the FTC filed an appeal to the ruling that denied the agency’s request for an injunction against the MSFT acquisition of ATVI.

After the close, MLKN reported beats on both the revenue and earnings lines.  However, both numbers were down (13% on revenue and 29% on earnings) from the same quarter of 2022. So far this morning, PEP, DAL, and WIT have all reported beats on both the revenue and earnings lines.  (Interestingly, these were not beats against lowered expectations and showed both revenue and earnings growth quarter-on-quarter.  In fact, it was a record amount of earnings for DAL.)  Meanwhile, CAG and FAST both missed on revenue while beating on the earnings line.  (For FAST, even though the Revenue was a miss, both numbers were increases quarter-on-quarter from the previous report.  However, the CAG miss on revenue actually showed Qtr.-on-Qtr. growth but the beat on earnings actually was a decline Qtr.-on-Qtr.)  It should also be noted that PEP raised its forward guidance while CAG lowered its guidance.  Note that PGR and CTAS report closer to the opening bell. 

Overnight, Asian markets were nearly green across the board.  Only Malaysia (-0.13%) showed any red while Hong Kong (+2.60%), Singapore (+1.99%), and Shenzhen (+1.61%) led the region in a broad and strong rally.  Meanwhile, in Europe, the bourses are mostly green at midday with only three spots of red among the 15 exchanges.  The CAC (+0.78%), DAX (+0.57%), and FTSE (+0.37%) are leading the continent higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward another move higher.  The lagging DIA implies at +0.15% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.66% open at this hour.  At the same time, 10-year bond yields continue to fall and are at 3.826% while Oil (WTI) is up three-tenths of a percent to $75.97 per barrel in early trading.

The major economic news events scheduled for Thursday include June PPI and the Weekly Initial Jobless Claims (both at 8:30 am), June Federal Budget Balance (2 pm), and Fed Balance Sheet (4:30 pm).  We also have another Fed speaker (Waller at 6:45 pm).  The major earnings reports scheduled include CTAS, CAG, DAL, FAST, PEP, PGR, and WIT all before the opening bell.  There are no major earnings scheduled for after the close.      

In economic news later this week, on Friday, June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations are reported.      

In terms of earnings reports, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.      

In miscellaneous news, Reuters reported that the one-month moving average of open interest in VIX calls (in other words, the average of the number of existing options bets that the market will fall, driving the VIX up) was at a record high of almost 13.85 million at the end of June.  It fell to 13.71 on Wednesday afternoon.  The interesting thing is that this moving average was at a 3-year low in mid-June before skyrocketing by the end of the month as traders bet the Bulls could not keep running.  However, so far this month the Bulls have defied that logic.  Elsewhere, ocean temperatures (surface) off Florida reached nearly 97 degrees in some areas Monday according to the National Oceanic and Atmospheric Administration buoy data.  This is the highest temperature on record and poses a significant threat to the health of coral reefs, which in turn pose a risk to fishing grounds.  NOAA said that 70% of Florida’s coral reefs have already been bleached or have been eroded (i.e. have been lost) due to climate change impacts. No specific tickers impacted are available yet. Finally, in dollar news, after the CPI data Wednesday, the US Dollar plunged to a 15-month low.  This indicates that money managers now truly believe US interest rates are at or very near a peak.  (The dollar tends to be correlated with US interest rates.) For the record, the dollar is strongly down again Thursday against the Euro, British Pound, and Aussie Dollar.

With that background, it looks like the Bulls are trying to gap up into fresh air again in the SPY and QQQ. DIA is also positive but is only giving a Bullish Harami so far in the premarket session. It should be noted that all three of the major index ETFs are printing indecisive candles in this early session as traders wait on PPI and the rest of the new round of earnings. Obviously, all three remain above their T-line (8ema) with the June PPI data still an hour from being published. So, the bias is still bullish across the market. It looks like the Bulls are trying to add to the week’s nice gains so far. There may be some premarket volatility (and likely volatility near the open) from the PPI data but truthfully that is usually a lot less than the CPI number that always precedes it by a day. Either way, after the open settles out, eyes will turn toward the financials as the big boys report Friday. All that said, do not be surprised if we drift while we wait. Overall, the SPY and QQQ have broken out of recent highs and have some room to run before the next potential resistance level. However, the DIA has yet to get through and is just below the double-top it failed yesterday. As far as extension goes, only the QQQ (in premarket) is starting to get a bit stretched from its T-line. However, again, the T2122 indicator remains deep into that overbought territory. The old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available, just more of it available to the Bears.

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 modestly higher on Tuesday (up 0.19% in the SPY, up 0.36% in the DIA, and up 0.13% in the QQQ).  At that point, both the SPY and QQQ recrossed that opening gap, reaching the lows of the day not long after 10 am.  DIA faded too, but only down into the middle of its opening gap again by shortly after 10 am.  Then Bulls stepped in to lead a rally that took all three major index ETFs to the highs of the day at about noon.  From there DIA ground sideways in a tight range, SPY meandered back and forth between the open and the highs, and QQQ meandered sideways mostly between the prior close and the highs until 3:45 pm.  However, a rally the last minutes of the day took us out very near the highs in all three of those major index ETFs.  This action gave us white-bodied candles with small upper wicks and slightly larger lower wicks.  All three also crossed back up above their T-line (8ema).

On the day, all 10 sectors were in the green with Energy (+1.87%) way out front leading and Healthcare (+0.02%) lagging behind the other sectors. At the same time, SPY gained 0.64%, DIA gained 0.89%, and QQQ gained 0.49%.  The VXX fell three-quarters of a percent to 25.47 and T2122 climbed into the high end of the overbought territory at 96.78.  10-year bond yields fell to 3.976% while Oil (WTI) popped up 2.48% to close at $74.80 per barrel.  So, Tuesday was a Bullish day within a Bullish Pennant formation in the SPY and QQQ as well as within more of a Wedge pattern in the DIA.  This all took place on less-than-average volume in all three major index ETFs.

The major economic news on Tuesday was limited to the energy sector.  The EIA Short-term Energy Outlook now calls for US electric consumption to ease from the 2022 record based on forecasts of slower economic growth and milder weather.  The same report projects the oil market will remain tight, citing the recently announced Saudi and Russian production cuts as well as expected increasing demand in China as well as developing countries.  The EIA also cut its forecast for US oil production by 50,000 barrels per day while still rising to 12.56 million barrels per day.  Elsewhere, after the close, the API Weekly Crude Oil Stocks report showed an unexpected increase of 3.026-million-barrels (compared to a forecasted increase of 0.200-million-barrels and the 4.382-million-barrel inventory drawdown one week prior).  In Fed speak news, oddly enough, I was unable to find a report of St. Louis Fed President Bullard’s remarks. However, New York Fed President Williams told the Financial Times Tuesday exactly what most of the other Fed members have been saying…that rate hikes are likely not done.  Williams also said, “It’s still clearly a very strong labor market with very good jobs growth,” …  “I don’t have a recession in my forecast. (However,) I have pretty slow growth (in my projections).”   Finally, Williams said, “We are not getting the full effects of the restrictive policy that we put in place yet … those are still ahead of us, although we have gotten some of the effects already in certain interest-rate-sensitive sectors.”

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In stock news, CRM announced it will be raising the price of some of its cloud-based products by an average of 9% in August.  (This was the company’s first price increase in seven years and comes even after its recent report showed blowout revenue growth from the cloud-based business.)  Later, BA announced it delivered 60 passenger jets in June, raising the first-half total to 266, up 23% over the first half of 2022.  Elsewhere, the Financial Times reported sourced tell it that the EU is poised to approve the AVGO purchase of VMW as soon as Wednesday.  (VMW was up over 5% on the news.)  At midday, Reuters reported AXAHY (French insurance giant AXA) is actively discussing strategic options for its $2 billion reinsurance business, in what was termed “a bid to cut exposure to natural disasters in light of global warming effects.”  (In May, AIG made the same move, agreeing to sell its reinsurance arm for $3 billion for just 1.4 times book value.)  Meanwhile, Reuters also reported that AMZN is offering deeper discounts than in past years as part of its “Prime Day” 2-day sale.  This included 60% discounts on GPS clothing, 50% off some SONY products, and 40% off PTON bikes.  After the close, Axios reported that META is planning to bring “branded content” to its new Instagram Threads service.  This is a bid to make the platform easier for influencer and advertiser-paid partnerships.  Also after the close, Reuters reported that COTY is in talks with Kim Kardashian to sell back a minority stake in her fragrance and cosmetics brand.  At the same time, the Wall Street Journal reported that DIS is exploring options to sell its Indian joint venture “Star India.”

In stock legal and regulatory news, the NHTSA announced Tuesday it is investigating F related to 346,000 Ford Escape SUVs built in 2020-2021 due to doors opening while the cars are driving.  Later, BAC agreed to pay a $250 million settlement (in fines and compensation) related to the same systematic practice WFC faced a year or two back.  BAC had been opening consumer accounts without authorization, systematically did not pay account-opening bonuses promised, and double-charged fees for insufficient funds.  Elsewhere, AMZN launched the first challenge to the EU Digital Services Act, disputing whether it should be included in the group of companies subjected to online content rules.  At the same time, a US federal judge threw out the FTC’s request for an injunction, telling MSFT it can proceed with the acquisition of ATVI.  (The FTC has until Friday to appeal before MSFT is free to continue.)  In addition, the UK Competition and Markets Authority (which previously blocked the deal) announced it was ready to consider MSFT proposals to resolve antitrust concerns.  (ATVI stock shot up 10% on the good news.)  Meanwhile, Canada’s corporate ethics watchdog announced Tuesday that it has launched an investigation into NKE related to using Uyghur labor in China as part of its operations and supply chain.  At the same time, a US federal appeals court has revived a lawsuit against RCL related to the death of a toddler after a grandfather dropped the child who then fell through an open cruise ship window in the children’s play area of a cruise ship.

In market-related news, NASDAQ announced that a “special rebalance” of the QQQ (NASDAQ 100) will take place later this month.  The idea behind the rebalance is to reduce the concentration of weighting in the top names.  This comes after a blistering rally this year has resulted in AAPL, NVDA, MSFT, AMZN, and TSLA alone accounting for 43.8% of the index weight.  Following the rebalance, those five will “only” account for 38.5% of the QQQ.  The exact changes will be announced Friday and will take effect on Monday, July 24.  Analysts expect SBUX, MDLZ, BKNG, GILD, ISRG, ADI, and ADP to see their index weights increase.

Overnight, Asian markets were mixed with Shenzhen (-0.99%) and Japan (-0.81%) leading the losses while Hong Kong (+1.08%) and South Korea (+0.48%) paced the gains.  However, in Europe, we see green across the board at midday.  The CAC (+0.66%), DAX (+0.81%), and FTSE (+1.14%) lead broad gains across the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modest green start to the day (albeit before the CPI report).  The DIA implies a +0.14% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.23% open at this hour.  At the same time, 10-year bond yields are falling again to 3.956%, and Oil (WTI) is just on the green side of flat at $74.90/barrel in early trading.

The major economic news events scheduled for Wednesday include the June CPI (8:30 am), EIA Crude Oil Inventories (10:30 am), WASDE Ag report (noon), and Fed Beige Book (2 pm).  There are also two more Fed Speakers scheduled (Kashkari at 9:45 am and Mester at 4 pm).  The major earnings reports scheduled for Wednesday are limited to MLKN after the close.  (There are no reports scheduled before the opening bell.)        

In economic news later this week, on Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, Friday June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations.        

In terms of earnings reports, on Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.       

In miscellaneous news, the founder of the “meme stock” sensation lost his lawsuit against Reddit for allegedly wrongly banning him from moderating the community (subReddit) he created and usurping his “WallStreetBets” trademark.  In her decision, the US District Judge ruled that federal law (section 230) gives websites broad immunity for publishing the outside content of others and therefore he lacked standing to sue.  Elsewhere, Canadian regulators followed the Fed’s lead, proposing that lenders and mortgage insurance providers be required to hold more capital in order to better deal with home loan risks as rates increase.  (The rules are open to public comment until September 1.)   At the same time, CNBC reported that (according to TransUnion) the US average credit card balance is $5,733 per person with 35% of people saying their balance is near its highest level ever, while 43% say their balance is actually at the lowest level ever.  At the same time, Bankrate reports that the average US credit card interest rate is now 20.55%.” 

With that background, it looks like the Bulls are trying to follow through on their Tuesday gains. All three major index ETFs are near their premarket highs again today and in positive territory relative to the close yesterday. All three remain above their T-line (8ema) with the June CPI data still an hour from being published. So, the bias is still bullish across the market. It looks like the Bulls are trying to add to the week’s gains. However, we should see some premarket volatility (and likely volatility near the open) on that CPI data. After that settles out, do not be surprised if we drift toward the first earnings reports, which start Thursday with the big banks starting again on Friday. Overall, the SPY is near a retest of a double-top with DIA not too far below a retest of a high as well. Meanwhile, QQQ has a little more ground to cover before it reaches its next test. As far as extension goes, none of the three major index ETFs is stretched from its T-line…but…the T2122 indicator is deep into the overbought territory. Of course, the old saying stands: “The market can remain overbought longer than we can stay solvent being right too early.” So, once again, if either the bulls or the bears did find the energy to run today, there is a slack available, just more of it available to the Bears.

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

On Monday, markets opened basically flat, with SPY gapping down just 0.05%, DIA opening dead flat, and QQQ gapping down 0.04%.  At that point, we saw a divergence with the large-cap index ETFs rallying until 10:15 am while the QQQ sold off sharply until 10 am.  After that, the DIA ground sideways not far from the highs, the SPY roamed back and forth around the previous close, and QQQ spent the day bobbing back and forth on the downside of the open.  However, a strong rally during the last 10 minutes of the day took all three major index ETFs out at or near the highs.  This gave us a white-bodied, Bullish Engulfing candle that closed just above its T-line (8ema) in the SPY.  Meanwhile, DIA also printed a large-bodied, white-bodied Bullish Engulfing candle that closed not far below its T-line. Finally, QQQ gave us a Doji-type candle that retested and failed its T-line.

On the day, eight of 10 sectors were in the green with the Industrials (+1.29%) and Healthcare (+1.25%) leading the way higher while Communications Services (-0.82%) being by far the laggard. At the same time, SPY gained 0.25%, DIA gained 0.64%, and QQQ gained 0.03%.  The VXX fell two-thirds of a percent to 25.66 and T2122 climbed into to lower end of the overbought territory at 83.64.  0-year bond yields fell to 3.998% while Oil (WTI) fell 0.64% to close at $73.22 per barrel.  So, Monday was an indecisive day in the tech-heavy QQQ and a Bullish day in the large-cap index ETFs.  With that said, most of the day was a sideways grind in all three major index ETFs.  This all took place on just-less-than-average volume in the QQQ, not too far-below-average volume in the DIA, but far-below-average volume in the SPY.

The only major economic news on Monday came from Fed speakers.  At mid-morning, San Francisco Fed President Daly (not a voter in 2023) repeated that she believes we will see two more Fed rate hikes in 2023. She said, “We’re likely to need a couple more rate hikes over the course of this year to really bring inflation”…“We may end up doing less because we need to do less; … we could end up doing more. The data will tell us.”  Later, Cleveland Fed President Mester (an alternate voter in 2023) told a Univ. of CA forum, “In order to ensure that inflation is on a sustainable and timely path back to 2%, my view is that the funds rate will need to move up somewhat further from its current level and then hold there for a while as we accumulate more information on how the economy is evolving.”  (She also acknowledged that her outlook on the fed funds rate matches or is slightly above the FOMC collective view.)  At noon, Atlanta Fed Pres. Bostic (also an alternate voter in 2023) repeated his position that the FOMC needs to be patient on rates and give previous restrictive policy time to bring down inflation before it raises rates again.  He said there are a “pretty straightforward” set of reasons why inflation could return to the two percent target without further increases.  He went on to say “Spending on goods has stabilized” and “There are a lot of statistics…that suggest it has peaked and it is actually starting to come down in terms of activity.”  Elsewhere, Fed Vice-Chair for Supervision Barr laid out a sweeping plan to increase the capital requirements on the largest banks in the wake of the failures in March.  The plan will impact all banks with more than $100 billion in assets (which will include CFG, FITB, HBAN, and RF among regionals).  Barr rained on the parade of the largest banks who had hoped the plan would ease restrictions on them at the same time as increasing the requirements on somewhat smaller banks.  Barr said the new banks that will be required to increase capital will be able to do so with less than two years’ worth of retained earnings.  (Meaning he thinks they can forego dividends for a couple of years to build up their balance sheets.)

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In stock news, AMZN announced it is partnering with BKNG to offer exclusive travel deals during its Prime Day events July 11-12.  Elsewhere, in another sign of the death of newspapers, NYT announced it has disbanded its sports desk and will rely on The Athletic website it acquired for sports coverage.  At the same time, Carl Icahn said that his company IEP has restructured $3.7 billion in personal loans in order to remove the link between his need to post collateral and the company stock price.  (IEP stock closed up 20.20% on the news.)  Later, MBGAF (Daimler Trucks) raised its revenue and profit guidance, citing an easing of supply chain constraints and strong demand.  By mid-day, the UAW announced it will begin contract negotiation with STLA on Thursday, F on Friday, and GM on July 18 (far ahead of the mid-September expiration of the current contracts).  After the close, it was made public that BRKB has agreed to buy the D stake in a Maryland LNG terminal for $3.3 billion. The move will give BRKB 75% ownership of the terminal (which is one of just seven now operating in the US).

In stock legal and regulatory news, an Indian court rejected an appeal by PEP which has appealed the revocation of its patent for a particular variety of potatoes grown exclusively for the company’s Lay’s potato chips.  (The ruling means that the potato can be grown and used by others, including competing brands of chips.)  Elsewhere, the European Commission announced it reached a new data transfer agreement with the US government on Monday.  (The deal was criticized by privacy advocates in Europe and is likely to be challenged after European courts have struck down the two prior data transfer agreements between the countries.  A lobbying group representing AAPL, AMZN, NOK, GOOGL, and others welcomed the deal.)  After the close, Politico reported that the US Dept. of Justice is near announcing its decision on whether to legally challenge the private equity purchase (and taking private of) FORG. Meanwhile, closing arguments were held in a CA Superior Court in the latest case against JNJ related to its talc baby powder containing carcinogens.  Compensatory damages being sought are only $3.8 million.  However, attorneys urged the jury to award many times that amount in punitive damages for company negligence related to baby products.

In late-breaking news, Monday night, MSFT confirmed that it will be eliminating more jobs now that its new fiscal year has begun (in addition to the 10,000 layoffs the tech giant announced in January and completed in the first half).  This move is starting modestly with 276 people from the corporate office in Washington state.  Elsewhere, this morning HCA announced it has suffered a data breach as hackers stole millions of patient’s data (covering more than 20 states) and has put the information up for sale online.  The data includes email addresses, personal data, and some medical records.  Meanwhile, overnight AAPL launched a store on the Chinese online giant TME’s WeChat messaging platform.  (WeChat has 1.2 billion active users, mostly in China and surrounding areas.) 

Overnight, Asian markets leaned heavily to the green side.  New Zealand (-0.03%) was the only red in the region.  Meanwhile, South Korea (+1.66%), Australia (+1.50%), and Taiwan (+1.48%) led the region higher.  In Europe, a similar picture is taking shape at midday.  Only Norway (-0.08%) and the FTSE (-0.14%) are lagging in the red while the other 13 bourses are in the green.  As usual, the CAC (+0.92%) and DAX (+0.43%) lead the region on volume.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the day at this point.  The DIA implies a +0.06% open, the SPY is implying a +0.14% open, and the QQQ implies a +0.19% open albeit early.  At the same time, 10-year bond yields are moving lower to 3.968% and Oil (WTI) is up a half of a percent to $73.34 per barrel in early trading.

The major economic news events scheduled for Tuesday are limited to EIA Short-term Energy Outlook and API Weekly Crude Oil Stocks Report (4:30 pm).  Fed member Bullard (9 am) also speaks.  There are no major earnings reports scheduled for Tuesday either before the open or after the close.        

In economic news later this week, on Wednesday, the June CPI, EIA Crude Oil Inventories, WASDE Ag report, and Fed Beige Book are reported.  There are also two more Fed Speakers (Kashkari and Mester).  On Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, Friday June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations.        

In terms of earnings reports, on Wednesday, MLKN reports.  On Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC.        

In miscellaneous news, Turkey did an about-face on Monday with President Erdogan saying he is satisfied and will ask the Turkish Parliament to approve Sweden’s bid to join NATO.  (This literally came a few hours after Erdogan said that he considered Sweden’s membership a bargaining chip, which he might be willing to trade for Turkish admission to the EU.) Elsewhere, Manheim (a used vehicle auction service) reported Monday that US used-car prices by 4.2% in June and were down 10.3% from June 2022 prices.  (This was the largest monthly drop since prior to the Covid-19 pandemic.)  Meanwhile, in state-run media reports Tuesday, China signaled that more economic stimulus is coming soon.  Specifically noted areas for targeted support include the real estate sector (through banking) and the vague “measures to boost business confidence.” 

With that background, it looks like all three major index ETFs are at their premarket highs again today and are all testing their T-lines (8ema) from below. We should remember that we have Fed uber-hawk Bullard speaking this morning, which is very likely to result in talk of larger and more rate hikes than the market expects. Still, the CPI our Wednesday may be a better read-through to Fed action. And, along with earnings starting again later in the week, it would not be surprising to see a “drift day” in the market as traders tread water ahead of those two sets of news. Overall, the pullback in an uptrend continues and only the DIA (laggard all year) is anywhere near putting in a lower-low. So, the trend remains bullish and that’s where the bias should be put when looking for trades. As far as extension goes, none of the three major index ETFs is away from their T-line and the T2122 indicator is just into the lower end of the overbought territory. So, once again, if either the bulls or the bears did find the energy to run today, there is slack (still buyers and sellers available).

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 modestly lower on Friday, with SPY gapping down 0.24%, DIA gapped down even stronger (by 0.36%), but QQQ opened just 0.06% lower).  At that point, the Bulls took over, recrossing the open gap and leading a rally that lasted until 1:30 pm. However, then the Bulls checked out for the week and the Bears led a steady selloff that lasted the rest of the day, reaching new lows for the day in the last few minutes of the session.  This action gave us large-upper wick, black-bodied candles in all three major index ETFs.  SPY printed a Gravestone Doji that failed the T-line (8ema).  DIA and QQQ both printed a black-bodied Inverted Hammer that also failed the T-line.

On the day, seven of 10 sectors were in the green with Energy (+2.25%) being by far the leading sector while Consumer Defensive (-0.64%) being the laggard.  At the same time, SPY lost 0.25%, DIA lost 0.53%, and QQQ lost 0.33%.  The VXX fell 2.5% to end at 25.83 and T2122 jumped back up to the top end of the mid-range at 70.69.  10-year bond yields rose to 4.066% while Oil (WTI) popped up 2.60% to close at $73.67 per barrel.  So, Friday saw a gap lower followed by the bulls running the first half of the day and the bears roaring the last 2.5 hours to drive the indices back below the lower opens.  This all happened on less-than-average volume in all three major index ETFs with DIA coming close to making it to average volume.

In major economic news Friday, surprisingly after Thursday’s ADP Payrolls number, June Nonfarm Payrolls came in well below the expected level at +209K (compared to a forecast of +225k and a May reading of +306k).  In addition, June Private Nonfarm Payrolls also came in well below the anticipated level at +149k (versus a forecast of +200k and May’s +259k reading).  Combined, this was the smallest increase in new jobs in 2.5 years.  So, the economy continues to add jobs but has reduced the pace of increases by almost 50%.  At the same time, June Average Hourly Earnings were reported at +4.4% (versus a forecast of +4.2% but in line with the May value of +4.4%).  The June Participation Rate also remained steady at 62.6%.  Finally, the June Unemployment Rate came in as expected at 3.6% (compared to a forecast of 3.6% and a tick lower than the May value of 3.7%).  In Fed Speak news, on Friday Chicago Fed President Goolsbee told CNBC that he expects inflation to be tamed without a recession, even with additional rate hikes.  Goolsbee said, “The Fed’s overriding goal right now is to get inflation down. We’re going to succeed at it and to do that without a recession would be a triumph,” … “That’s the golden path, and I feel like we’re on that golden path.”  He went on to say, “Overall, the jobs market is outstanding and is getting back to a balanced, sustainable level.”  He ended by confirming that “almost all” of the FOMC voters’ projections point to one or two more hikes. “(So,) there are some modest increases to come, but we’ve done a lot of the lifting and now we’re waiting for the impact.”

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In stock news, FSLR announced Friday that it has obtained a $1 billion revolving credit facility.  At the same time, in China, TSLA announced a new program offering a $500 “cash bonus” (discount) to new customers if they are referred by an existing TSLA owner.  Elsewhere, EADSY (Airbus) announced it will be doing inspections and any needed repairs of its A380 superjumbo jets for customer Emirates Air.  This move comes after increased cracking of wing spars on the A380s in the Emirates fleet.  At the same time, MRNA announced it has signed a deal with China to set up plants and produce mRNA-based medicines in Shanghai China.  (The focus of the deal will be treatments for cancer as well as cardiovascular and autoimmune diseases.)  By day end on Friday, META said that it has more than 70 million users of its 24-hour-old Instagram Threads “friendlier” competitor to Twitter.  (Analysts say META only needs 1-in-4 of its Instagram users to use Threads in order to eclipse Twitter as the largest social-networking app.)

In stock legal and regulatory news, CEO Jamie Dimon urged a dismissal (petitioning both the court and plaintiffs) of a shareholder lawsuit related to the JPM relationship with Jeffrey Epstein Friday.  Elsewhere, the CA State Supreme Courted ruled that CA businesses cannot be sued for negligence related to workers who contracted COVID-19 on the job and then spread the disease to family members.  At the same time, TSLA put more pressure on the US EPA to finalize tougher emissions standards (that would essentially mean more vehicles would need to be electric).  Immediately after the TSLA statement, a group representing GM, TM, VLKAF, and other automakers put out their own statement strongly opposing tighter emissions rules.  Meanwhile, the US Postal Service hiked the price of first-class postage from 63 cents to 66 cents (+4.7%) as of Sunday.  Obviously, this impacts any companies mailing paper documents.  At the same time, US Labor Sec. Su said Friday that she sees no need to step into the UPS-Teamsters negotiations at this time.  However, she (obviously) urged the sides to come to an agreement soon.  (The contract between those two parties ends July 31 and UPS delivers goods worth just over six percent of the US GDP.)   In other news, the US Court of Appeals rejected Venezuela’s motion aimed at preventing six companies joined a court-proposed auction of the assets of Citgo Petroleum as a way to settle past expropriation claims against Venezuela.  Among the companies are OI and HII.  Later, a group of 15 Republican State Attorney’s General sent a letter to BLK questioning whether the mutual funds run by BLK were sufficiently independent as part of their crusade against ESG (which BLK supports considering).  After the close, the NTSB said it is investigating an engine fire on a BA 737-900 MAX operated by UAL which happened at the Newark NJ airport last week.  (The engine was built by a firm partially owned by GE.)  Finally, a NY judge sided with UBER and DASH (as well as others) and issued a temporary restraining order prohibiting the enforcement of the New York City $17.96 minimum wage for app delivery drivers.

In geopolitical news, it is worth noting that Russia’s invasion of Ukraine passed the 500-day make over the weekend. Elsewhere, ahead of the NATO meeting this week, NATO has removed the Membership Action Plan (MAP) which was a long process designed to slow and modify prospective member’s militaries to better fit. This is seen as shortening the path for Ukraine to join, without just outright granting membership in the middle of the war inflicted upon them.  (If they were members, all NATO countries would be at war with Russia if Ukraine requested it.) Speaking of Russia, the Kremlin spokesman told reporters today that five days after the coup, Putin met with 35 members of Wagner PMC, including Prigozhin and Wagner unit leaders. The meeting lasted more than three hours.

Overnight, Asian leaned to the green side on modest moves with only 3 exchanges in the red numbers.  Hong Kong (+0.62%), Shenzhen (+0.50%), and Thailand (+0.43%) led the region higher while Japan (-0.61%), Australia (-0.54%) and South Korea (-0.24%) were the only red.  In Europe, we see green across the board at midday.  The CAC (+0.55%), DAX (+0.45%), and FTSE (+0.23%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed open on either side of flat.  The DIA implies a +0.10% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.24% open at this hour.  At the same time, 10-year bond yields are up to 4.054% and Oil (WTI) is down two-thirds of a percent to $73.35 per barrel in early trading.

The major economic news events scheduled for Monday are limited to three Fed speakers (Daly at 10:30 am, Mester at 11 am, and Bostic at noon). The major earnings reports scheduled for the day are limited to HELE before the open.  There are no major earnings reports scheduled for after the close.         

In economic news later this week, on Tuesday we get the API Weekly Crude Oil Stocks Report.  Then Wednesday, the June CPI, EIA Crude Oil Inventories, WASDE Ag report, and Fed Beige Book are reported.  There are also two more Fed Speakers (Kashkari and Mester).  On Thursday, we get June PPI, Weekly Initial Jobless Claims, June Federal Budget Balance, and Fed Balance Sheet.  Finally, on Friday, the June Import Price Index, June Export Price Index, Preliminary July Michigan Consumer Sentiment, and Preliminary July Michigan Consumer Expectations are reported.        

In terms of earnings reports, on Tuesday there are no major earnings reports scheduled.  Then Wednesday, MLKN reports.  On Thursday, CTAS, CAG, DAL, FAST, PEP, PGR, and WIT report.  Finally, on Friday, we hear from BLK, C, ERIC, JPM, STT, UNH, and WFC..        

In miscellaneous news, US natural gas prices fell 8% last week after updates to US weather models showed an easing of the heatwave which has gripped much of the South for three weeks.  Also impacting the price was the Weekly Nat Gas Storage report, which showed an unexpectedly large 72 billion cubic foot build in inventories.  Elsewhere, the credit issued by US commercial banks rose slightly in the prior week, reaching $17.31 trillion (unadjusted) for the week ending June 28.  However, the part of that lending going to small and medium-sized businesses fell slightly from $2.78 trillion to $2.77 trillion.  On the deposit side, commercial bank deposits fell slightly, down $900 million to $17.343 trillion.  Meanwhile, as Treasury Secretary Yellen returns from Beijing, we get word that China’s CPI was dead flat +0.00% year-on-year in June. This brings hope and expectations that Chinese stimulus will come soon and will help bolster global markets, including the US.

With that background, it looks like all three major index ETFs are at their premarket highs at the moment after another gap down to start the early session. With today only having Fed speakers as news drivers and with CPI and the start of earnings again coming later in the week, it would not be surprising to see a “drift day” in the market. Overall, the pullback in an uptrend continues. However, we should note that DIA (laggard all year) is the weakest of the three and most recently printed a lower high. So, it is either acting as the canary in the coal mine or it is just the anchor that the leaders have to drag along with them. As far as extension goes, none of the three major index ETFs is very far from their T-line and the T2122 indicator remains in the mid-range. So, if either the bulls or the bears did find the energy to run today, there is slack (still buyers and sellers available).

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, after an extremely hot ADP report, markets gapped down across the board with SPY opening down 0.84%, DIA opening down 0.79%, and QQQ opening down 1.05%).  However, that was the end of clear direction for the day.  Essentially all three major index ETFs drifted sideways with the QQQ having a slight bullish lean, and the two large-cap index ETFs continuing modestly lower until about 11 am and then trending modestly bullish.  This action gave us gap-down (below the T-line or 8ema), indecisive candles in all three major index ETFs.  Both SPY and QQQ printed white-bodied, Hammer-type candles while the DIA had a black-bodied, Spinning Top-type candle.  The SPY got close, but only the QQQ was able to cross back above its T-line.

On the day, all 10 sectors were in the red with Energy (-2.11%) leading the way lower while Consumer Defensive (-0.75%) held up better than other sectors.  At the same time, SPY lost 0.78%, DIA lost 1.04%, and QQQ lost 0.76%.  The VXX jumped up 5.74% to close at 26.51 and T2122 dropped to the bottom end of the mid-range at 25.87.  10-year bond yields spiked up above four percent to 4.029% while Oil (WTI) ended flat at $71.85 per barrel.  So, Thursday saw a gap lower but then mostly indecision as the rest of the day was a drift sideways with either a slightly bullish or slightly bearish lean.  This all happened on average volume in the DIA and less-than-average volume in both the SPY and QQQ.

In major economic news Thursday, the June ADP Nonfarm Employment Change came in incredibly hot.  The reported +497k was well more than double the forecasted +228k and almost double the May +267k reading.  This was the news that spooked traders during the premarket.  A little later, May Imports were reported lower than expected at $316.10 billion (versus an April reading of $326.60 billion).  At the same time, May Exports also came in just a bit low at $247.10 billion (compared to an April value of $249.20 billion).  Together those two led to a May Trade Balance of -$69.00 billion, which was exactly as forecasted and an improvement over the April -$74.40 balance).  Meanwhile, Weekly Jobless Claims were a bit above anticipated at 248k (versus a forecast of 245k and higher than the prior week’s 236k).  Later, June Service PMI was stronger than predicted at 54.4 (compared to a 54.1 forecast but lower than the May reading of 54.9).  Simultaneously, the June S&P Global Composite PMI also was slightly better than expected at 53.2 (versus a forecast of 53.0 but also down from the April value of 54.3).  Then, the June ISM Non-Mfg. PMI came in much better than expected at 53.9 (compared to a forecast of 51.0 and an April reading of 50.3).  May JOLTs Job Openings were lower than had been forecasted at 9.824 million (versus a 9.935 million forecast and an April value of 10.320 million).  Afterward, the EIA Weekly Crude Oil Inventories showed a 1.508-million-barrel drawdown (compared to a forecast calling for a 0.983-million-barrel draw but far less than the previous week’s 9.603-million-barrel drawdown.  All-in-all, you could try to spin this some other way but the truth is that the economy remains strong, is weakening slowly to fight inflation, and, so far at least, it seems the Fed has threaded the needle and markets should take them at their word. They paused and there will be two more quarter-point hikes in the second half of the year.

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In stock news, FIS agreed to sell a majority stake in its Worldpay merchant credit card processing services business to private equity firm GTCR.  FIS will receive $11.7 billion and retain 45% ownership in Worldpay, which FIS had purchased for more than $30 billion).  Later, F announced its quarterly auto sales rose 10% versus Q2 of 2022, including a 26% increase in truck sales.  At the same time, STLA announced it has reached a preliminary 10-year deal to purchase rare earth minerals from NB, which plans to mine those minerals at its Nebraska mine.  Elsewhere, PFE made a $25 million investment into CRBU, taking a minority stake in the biotech.  In the afternoon, VLKAF (Volkswagen) announced it plans to launch autonomous vehicles for both ride-hailing and deliveries in Austin TX by 2026.  By mid-afternoon, Reuters reported that CRON (which is backed by MO) is exploring options, including the potential sale of the company.   The article mentions CURLF as a potential buyer of the Canadian pot producer.  However, the biggest news of the day was META’s launch of its Twitter competitor Instagram Threads.  The new app had 30 million user sign-ups for the service in the first 18 hours as it became the most-downloaded app in the Apple App Store.  (Twitter does not release data anymore but reported 229 million active users back in May of 2022.)  For its part, Twitter has threatened to sue META for “poaching of former employees” and theft of trade secrets and intellectual property.  After the close, ABBV announced a cut in its full-year forecast. Citing higher R&D costs.

In stock legal and regulatory news, a federal judge ruled that RIVN must face a suit claiming it defrauded IPO investors.  The suit claims RIVN concealed that it chose to underprice its electric vehicles initially, which led to price hikes that were very unpopular with consumers (that led to a 39% fall in stock price over just 10 days).  At the same time, both UBER and DASH (as well as other app-based delivery services) filed suit against New York City over its law requiring companies to pay delivery workers a minimum of $17.96 per hour.  Elsewhere, EU Antitrust Regulators warned that AMZN’s acquisition of IRBT may reduce competition and has opened a full-scale investigation into the deal.  The decision is due by November 15.  Meanwhile, the SEC announced they will vote next week on proposed changes to implement “swing pricing” to discourage hasty withdrawals from the money market and private asset funds during times of market stress.  They will also vote on whether to require more disclosure from private asset managers (to detect a buildup of risk).  Later, the CA state Air Resources Board along with truck and engine manufacturers such as CMI, GM, F, NAV, STLA, and VLVLY (Volvo) announced they had reached a deal.  The agreement gives the manufacturers more flexibility in meeting the state’s emission rules and will give the companies no less than four years lead time before imposing new restrictions.  After the close, the NRLB sued SBUX over the company’s treatment of workers which the company fired after union votes at Seattle-area stores.  (SBUX claimed they were due to store reorganizations but the employees who had supported a union applied at other stores and were not rehired.)  Also after the close, the FDA granted standard approval to BIIB’s new Alzheimer’s drug (which will mean wider insurance coverage for the treatment).

After the close, LEVI reported in line with forecasts on revenue and beat on earnings.  However, it is worth noting that the company lowered its forward guidance.

Overnight, Asian markets leaned to the red side again.  Australia (-1.69%), Japan (-1.17%), and South Korea (-1.16%) led the region lower.  Meanwhile, in Europe, the bourses are mostly green at midday.  The CAC (+0.57%), DAX (+0.55%), and lagging FTSE (-0.23%) are typical with 10 of the 15 exchanges in the green in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.02% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.16% open at this hour.  At the same time, 10-year bond yields are rising again to 4.056% and Oil (WTI) is up a third of a percent to $72.06 per barrel in early trading.

The major economic news events scheduled for Friday include June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate (all at 8:30 am).  There are no major earnings reports scheduled for the day.         

In miscellaneous news, the NY Fed released study data that indicates inflation may have slowed more than traditional headline numbers indicate.  The May “multivariate core trend” said inflation stood at 3.5% (far below the May 4.6% PCE Price Index for the same period).  This new report says there is actually a 68% chance inflation was really at 3% in May with the high-end of the readings being just below 4%.  Fed staffers speculated the cause of the difference between PCE Price Index and the multivariate core trend is that the latter puts more weight on housing where rent increases have been moderating faster than the PCE Index components.  Unfortunately, no word was given on what this might mean in terms of Fed action in July or beyond.  So, it must be assumed this will not impact have a major impact on Fed rate decisions.  In other Fed news, the central bank reported last night that banks again slightly decreased their borrowing from the Fed’s emergency lending programs.  Fed data released Thursday showed borrowing fell to $270.09 billion last week down from $274.58 billion the previous week. 

With that background, it looks like all three major index ETFs are waiting on June Payrolls data before placing any big bets this morning. As of now, we are looking at a slightly lower open and expectations are for a hot number from the June Jobs data. SPY and QQQ are both retesting the T-line (8ema) in the Premarket. At the same time, DIA is working on an inside day candle. It might be worth noting that all three of the major index ETFs are printing white-bodied candles and are currently at their highs of the early session. Overall, the pullback in an uptrend continues. However, we should note that DIA (laggard all year) is the weakest of the three and most recently printed a lower high. So, it is either acting as the canary in the coal mine or it is just the anchor that the leaders have to drag along with them. We are likely to see premarket volatility around 8:30 am, but I have a suspicion this will be another light-volume mostly drifting day as we head into the weekend again. As far as extension goes, none of the three major index ETFs is very far from their T-line and the T2122 indicator remains in the (bottom of) mid-range. So, if one side did find a reason to run today, there is slack (still buyers and sellers available). Beware of volatility and remember that its Payday. Take at least some profits if you have them, move stops, hedge, and prepare for the weekend news cycle.

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 in all three major index ETFs (down 0.44% in the SPY, down 0.49% in the DIA, and down 0.43% in the QQQ).  However, at that point, the QQQ immediately recrossed the gap on its way to the highs of the day at about 10:40 am.  It then spent the rest of the day wandering around just above the Monday close.  SPY also recrossed the gap, but more slowly, reaching the prior close at 10:40 am and then spending the whole day in the top half of the gap (not far below the Monday close).  For its part, DIA also spent the whole day inside its gap never quite closing it or retouching the open level.  This action gave us gap-down, white-bodied candles with upper wicks in all three major index ETFs. 

On the day, nine of the 10 sectors were in the red with Utilities (+0.61%) leading the way higher while Basic Materials (-2.01%) by far (1.2% worse than any other) the biggest losing sector.  At the same time, SPY lost 0.15%, DIA lost 0.37%, and QQQ was dead flat -0.00%.  The VXX gained 1.33% to close at 25.07 and T2122 dropped back out of the overbought territory into the top end of the mid-range at 73.60.  10-year bond yields spiked up to 3.936% while Oil (WTI) jumped up 3.04% to $71.91 per barrel.  So, Wednesday was another day of consolidation where the bears could not follow through on the opening gap lower but the bulls could not break out to new highs either.  This all happened on well-below-average volume in the SPY and QQQ while DIA volume was not far below-average.

In major economic news Wednesday, May Factory Orders came in well below forecast at +0.3% (compared to a forecast of +0.8% but exactly in line with the April reading of +0.3%).  This was the cause of the big gap lower and I do not know why forecasts had called for the value to increase so dramatically…but it certainly did not.  Nonetheless, Factory Orders did increase, albeit at a slow pace.  However, the big economic news on the day was the FOMC June Meeting Minutes.  Those minutes caused momentary volatility, but in the end, were a nothing burger.  The notes revealed that almost all Fed members were in favor of a pause and also that in their economic projections that they believe (two) additional hikes in the federal funds rate will be needed during 2023. After the close, the API Weekly Crude Oil Stocks report showed a drawdown of 4.382-million-barrels (versus a prior week’s 2.408-million-barrel drawdown).  At the same time, New York Fed President Williams told a moderated panel discussion that the Fed was correct to pause in June, there was still more work to do, and the markets have heard the message that hikes will resume (and there will likely be two quarter-point hikes in the second half of 2023).  He also said that it was a small minority of Fed members who diverge from the more common public FOMC stance. 

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In stock news, shares of KNX (one of the largest US trucking companies) fell 3.29% on Wednesday after a volatile session.  The company warned that Q2 results will be lower than previously expected due to “persistently soft demand.”  However, in Auto news, TM announced their June car sales were up 14.9% from the same month a year ago.  At the same time, STLA unveiled a new “medium” vehicle size platform which will include 26 models across all its brands (Jeep, Chrysler, Ram, Peugeot, Alfa Romeo, Citroen, and Opel).  A bit later, GM announced that their Q2 auto sales had risen 19% from Q2 2022.  Elsewhere, UPS and the Teamster Union both accused the other of walking away from negotiations.  Time remains with the current contract set to expire July 31 but the Teamsters have already voted to authorize a strike if no deal is reached before that date.  (UPS says it is still confident a deal will be reached in time.)  Up in Canada, some Canadian advertisers have begun to pull their advertisements from META in response to the company’s removal of Canadian news from the platform (which itself was in response to a Canadian law passed saying companies must pay Canadian publishers for their content).  There was no word on ads being pulled from GOOGL (which followed META’s lead in solidarity) yet.  After the close, BAC followed suit with its big bank competitors raising its dividend by 9% after passing the Fed stress test last week.

In stock legal and regulatory news, on Wednesday afternoon the FTC ruled that six companies who make cannabis-ingredient products must cease packaging and marketing their foods that are too similar to well-known brands.  Specifically, the FTC ruled “Stoneoes” and “Double Stuff Stoneos” are too similar to Oreos.  Other familiar snacks that had been targeted by pot copycats were Doritos, Cheetos, Jolly Rancher, and Nerds candies.  Elsewhere, the US Interior Dept. approved the construction of DOGEF’s 30-gigawatt wind farm offshore near Atlantic City, NJ.  Then, late in the day, GM announced it could face compliance challenges under the US EPA’s proposed vehicle emissions rules (as well as other state and federal regulations).  It is worth noting that the EPA proposals would not even start to take effect until 2030 and won’t be fully in place until 2032.  At the same time, AMZN, AAPL, GOOGL, META, MSFT, and BKNG said Wednesday that they will fall into the EU’s new criteria making them a “Gatekeeper” and as a result will be forced to comply with tougher rules.  These rules include making messaging platforms interoperable and letting users decide what apps are pre-installed on devices.  Meanwhile, JBLU announced after the close that it will not appeal the US judge’s decision that requires an end to its alliance (defacto merger) with AAL.

In mortgage news, the demand for mortgages dropped last week as interest rates rose.  The average cost of a 30-year, fixed-rate, conforming mortgage rose dramatically from 6.75% to 6.85% (and closing points rose to 0.65 from 0.64) on the week.  This included a brief stay over 7%.  As a result, overall mortgage applications fell by 4.4%.  This was made up of a 5% drop in new-purchase loan requests and a 4% decrease in refinance loan applications.  Interestingly, the average loan size requested fell to the lowest level since January at $423,500.  (The latter fact may say something about home prices and the housing market in general if it becomes a trend.)

Overnight, the nearly unanimous Fed feeling that rates will indeed need to rise twice more in 2023 apparently caught global markets off guard.  Asian markets were all well into the red with the lone exception of India (+0.51%).  Hong Kong (-3.02%), Taiwan (-1.73%), and Japan (-1.70%) led the region lower as Treasury Sec. Yellen arrived in Beijing to work on bilateral policy and trade issues between the two largest economies.  Meanwhile, in Europe, we see the same picture taking shape at midday.  Only Russia (+0.70%) is in the green while the CAC (-1.83%), DAX (-1.16%), and FTSE (-1.38%) lead the region lower.  In the US, as of 7:30 am, Futures are pointing toward a gap down to start the day.  The DIA implies a -0.39% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.38% open at this hour.  At the same time, 10-year bond yields are rising again to 3.975% and Oil (WTI) is positive by four-tenths of a percent at $72.10 per barrel in early trading.

The major economic news events scheduled for Thursday include ADP Nonfarm Employment Change (8:15 am), May Imports/Exports, May Trade Balance, and Weekly Initial Jobless Claims (all at 8:30 am), June Services PMI and June S&P Global Composite PMI (both at 9:45 am), June ISM Non-Mfg. PMI and May JOLTs Job Openings (both at 10 am), and EIA Crude Oil Inventories (11 am).  There are no major earnings reports scheduled for before the open. However, after the close, LEVI reports.        

In economic news later this week, on Friday, June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate are reported.

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

In miscellaneous news, Reuters reported Wednesday that Cyber Insurance premiums dropped 10% in June compared to June 2022.  This dramatically reverses the sharp increase in prior months and comes despite the major global MOVEit hack and ransom attacks.  Elsewhere, the China Daily newspaper quoted a former Vice Commerce Minister (who now heads a state-owned thinktank) as saying that the Chinese rare earth export restrictions were a warning shot and are “just the start” ahead of Treasury Sec. Yellen’s visit, which starts today.  Meanwhile, META launched its competitor for Twitter, called Instagram Threads on Wednesday night.  In a geopolitical tidbit, the President of Belarus Lukashenko told the press that Wagner Group leader Prigozhin had left his country and, interestingly, returned to his home base of St. Petersburg Russia. Finally, after the Fed Minutes, the CME FedWatch Tools shows there is an 88.7% probability of a quarter-point rate hike on July 26.

With that background, it looks like all three major index ETFs are looking to open lower again today. However, only the DIA is back to a retest of its T-line (8ema) so far this morning and all three of the major index ETFs are giving us very small candles. So, either the market is sleeping in today, waiting on the morning data dump, or just unsure of direction at this point. So, the pullback in an uptrend continues, at least as of this point. Again, on a holiday-shortened week at the start of a new quarter, do not expect heavy volume as many traders have taken the week off. We could see reallocation or new money coming into the market. However, I would be surprised if the action was heavy. As far as extension goes, none of the three major index ETFs is too far from their T-line and the T2122 indicator has dropped back outside of its overbought territory. So, there is room to run in either direction if either the bulls or bears can gain momentum. Beware of volatility around the ADP and Weekly Jobless Claims (as well as maybe the JOLTs) reports as traders try to read through to tomorrow’s June Payrolls data.

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 strongly higher on Friday (opening up 0.75% in the SPY, up 0.61% in the DIA, and up 1.01% in the QQQ).  From that point, all three major index ETFs gave us a slow, modest rally right up until 3:55 pm when we saw profit-taking the last 5 minutes across the board.  This action gave us gap-up, white-bodied candles in all the major index ETFs.  The DIA is candle was a Spinning Top, while the SPY and QQQ candle bodies were larger.  SPY broke out of the mid-June candle bodies while DIA and QQQ have not quite gotten to a retest of those prior highs. 

On the day, Friday, all 10 sectors were in the green with Technology (+1.25%) leading the way higher while Communications Services (+0.44%) lagged behind the other sectors.  At the same time, SPY gained 1.18%, DIA gained 0.79%, and QQQ gained 1.54%.  The VXX fell 1.46% to close at 25.00 and T2122 climbed even further into the overbought territory at 97.03.  10-year bond yields remained flat at 3.841% while Oil (WTI) climbed slightly to $70.64 per barrel.  This all happened on just average volume in the DIA and greater-than-average volume in both QQQ and SPY.

The major economic news on Friday started with the Fed’s preferred inflation measure showing a significant reduction in inflation.  The May PCE Price Index came in at 3.8% year-on-year (compared to a forecast of 4.6% and the April reading of 4.3%).  The month-on-month version of that May PCE Price Index showed a 0.1% increase which was well below the +0.5% expected and even well below the April +0.4% value.  The May Core PCE Price Index also came in below expectation but not by nearly as much at 4.6% (compared to a 4.7% forecast and a 4.7% April value).  So, overall, inflation is coming down more than anticipated and that was what the Bulls latched onto…gapping stocks higher.  At the same time, May Personal Spending also came in well below what was anticipated at +0.1% month-on-month (versus the forecast calling for +0.2% and the April reading of +0.6%).  Later, Chicago PMI was lower than expected at 41.5 (versus a forecast of 44.0 and better than the May reading of 40.4).  Finally, the Michigan Consumer Sentiment Survey reported a better-than-expected feeling of 61.5 (above the forecasted 61.3 and well above the May value of 55.4).

On Monday, the DIA gapped down 0.22%, the QQQ gapped up 0.16%, and SPY opened down 0.06%.  From there, the large-cap index ETFs put in a slow, modest but steady rally only broken by DIA profit-taking the last 10 minutes of the shortened day.  At the same time, QQQ was more like a roller coaster but also ended modestly higher.  This action gave us a gap-up white-bodied Doji in the QQQ, along with white-bodied candles in the SPY and DIA.  On the day, nine of the 10 sectors were in the green with Consumer Cyclical (+0.91%) leading and only Healthcare (-0.96%) in the red.  The SPY gained 0.12%, DIA gained 0.06%, and QQQ gained 0.24%. Meanwhile, the VXX fell 1% to 24.74 and T2122 dropped slightly but remains deep in overbought territory at 95.83.  This all happened on very low volume even for a 3.5-hour market day.

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In major economic news Monday, Jun Mfg. PMI came in exactly as expected at 46.3 (down from the May value of 48.4).  Later, ISM Manufacturing PMI came in a bit low at 46.0 (compared to a forecast of 47.2 and a May reading of 46.9).  However, June Mfg. Price Index also came in lower than expected at 41.8 (versus a forecast of 44.0 and a May reading of 44.2).  So, overall June Manufacturing was reported in line to slightly below expectations. However, probably the biggest Monday news was that Saudi Arabia announced they will extend their voluntary oil production cuts for at least another month, through August, with the potential to continue on indefinitely. Russia was quick to follow suit. The effect of these cut extensions was offset by reduced US Manufacturing activity and the holiday-shortened day when many traders were not around at all. However, it is likely to be reflected Wednesday.

In stock news, on Friday, F announced they have signed an initial agreement to sell its Saarlouis Germany plant to a group including Chinese electric vehicle company BYDDY.  Elsewhere, TSP stock plummeted when the self-driving startup said Friday, they are considering selling the company’s US operations in order to focus on the Asia-Pacific geography.  At the same time, the CEO of SHEL’s renewables business left the company Friday just weeks after the SHEL CEO announced the company will focus on oil and gas (the more profitable units).  Meanwhile, DIS’s ESPN business unit laid off 20 on-air personalities mid-day Friday.  At the final bell Friday, AAPL closed with more than a $3 trillion market cap for the first time ever. After the close, JPM, WFC, GS, MS, and C all announced they have raised the Q3 dividends after sailing through the Fed stress test.  On Saturday, UAL awarded 30,000 frequent flier points to all passengers that suffered delays due to plane shortages.  UAL CEO Kirby also claimed that the airline would need to reduce flight schedules due to the planes that could not fly (since they do not comply with FAA 5G interference protections).  Later Saturday. TLSA announced it had beaten analyst expectations by delivering 466,140 vehicles and producing 479,700 during Q2.  This was a 10% increase compared to Q1 and 83% higher than Q2 of 2022. 

In stock legal and regulatory news, the FTS amended its complaint against WMT on Friday, alleging the giant allowed scam artists to use WMT money transfers to defraud consumers.  Elsewhere, the European Commission has demanded that German ga importer UNPRF divest its Dutch business before it will receive regulatory approval of Germany’s bailout of the company.  On this side of the pond, the US Federal Housing Finance Agency said it was considering limiting the ability of the biggest banks to use Federal Home Loan Banks as a financial backstop.  Meanwhile, BRKB-owned BNSF won an appeal of an earlier $228 million award in a case that found the railroad had unlawfully collected the fingerprints of truck drivers.  The Appeals Court ruled that the company had violated the law but also that the company was entitled to a jury-decided award to the plaintiffs (as opposed to the $5,000 per infraction that was assigned by the lower court).  Later, a Federal Judge ruled Friday afternoon that PPC, SAFM, TSN and several smaller companies must face antitrust litigation which accuses them of price fixing to inflate chicken prices.  On Saturday, Bloomberg reported that the FTC is going to bring an antitrust suit against AMZN for its marketplace and related to that platform giving preference to AMZN products.

Overnight, Asian markets leaned heavily toward the downside with only two of the 12 exchanges managing modest green numbers.  Meanwhile, Hong Kong (-1.57%), Shenzhen (-0.91%), and Shanghai (-0.69%) led the rest of the region lower. In Europe, we see the same picture taking shape with only Portugal (+0.26%) in the green at midday.  The CAC (-0.62%), DAX (-0.51%), and FTSE (-0.54%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward the same type of start to the day.  The DIA implies a -0.46% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.55% open at this hour.  At the same time, 10-year bond yields are up to 3.859% and Oil (WTI) is up 2% to $71.19 in early trading.

The major economic news events scheduled for Wednesday include May Factory Orders (10 am), FOMC June Meeting Minutes (2 pm), API Weekly Crude Stocks Report (4:30 pm) and Fed speaker (Williams at 4 pm).  There are no major earnings reports scheduled for Wednesday either before the open or after the close.        

In economic news later this week, on Thursday we get ADP Nonfarm Employment Change, May Imports/Exports, May Trade Balance, Weekly Initial Jobless Claims, June Services PMI, June S&P Global Composite PMI, June ISM Non-Mfg. PMI, May JOLTs Job Openings, and EIA Crude Oil Inventories.  Finally, on Friday, June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate are reported.

In terms of earnings reports, on Thursday LEVI reports.  Then on Friday, again there are no major earnings reports scheduled.

In miscellaneous news, on Friday, Russian Foreign Minister Lavrov announced the expected, saying “I don’t see what arguments there can be by those who would like to continue the Black Sea initiative.”  However, Lavrov was quick to add, “If the Black Sea Initiative ceases to operate, we will provide grain deliveries of a comparable or larger size to the poorest countries at our own expense, free of charge.” Elsewhere, the WHO (World Health Organization) is widely reported to be very near labeling one of the most widely-used artificial sweeteners (aspartame) to be potentially cancer-causing.  More than 6,000 consumer food products contain aspartame. The most widely cited of these are Diet Coke (KO) and Diet Pepsi (PEP).  On Monday, China imposed restrictions on the export of two metals (germanium and gallium) that are critical to the production of semiconductors. (China is the only major source of gallium, accounting for 94% of global production and also the world’s largest producer of germanium.)  This tit-for-tat move related to semiconductors comes a couple of days prior to the visit of Treasury Sec. Yellen to China for talks.  Finally, Japan announced Monday that they intend to go ahead with plans to dump 1 million tons of radioactive waste water from the Fukushima Daiichi Nuclear Power Plant cleanup (that has now been diluted and filtered to remove “most” radiation) into the ocean. The US has said they are accepting of the move, but all the regional nations (China, both Koreas, Indonesia, Malaysia, and the Philippines are objecting strenuously.

With that background, it looks like all three major index ETFs are looking to open lower today. The SPY and especially the DIA are printing black candle bodies in premarket being near their lows of the early session. QQQ is much more indecisive so far this morning. All three remain above their T-line (8ema) meaning this is at most a pullback in the uptrend, at least as of this point. This is the start of a new quarter. So, do not be surprised if we see funds that were late to the party continue reallocations or see fun inflows as FOMO grips the individual traders who compared their accounts to the major indices over the holiday. Also, remember the old Trader’s Almanac rule of thumb that markets are sad (bearish) when they have to come back to work after extra time off. As far as extension goes, none of the three major index ETFs is too far from their T-line. However, the T2122 indicator remains well up into its overbought territory. So, while there is some room to move higher (and keep in mind that markets can remain extended longer than we can remain solvent betting on mean reversion), the bears do have the benefit of more slack to run. Finally, even though many Fed speakers (including Chair Powell) have spoken multiple times since the June FOMC Meeting, the release of minutes this afternoon may cause some volatility. Just be aware.

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

On Thursday, markets opened just on the red side of flat with the SPY gapping down 0.11%, DIA opening 0.05% lower, and QQQ gapping down 0.13%.  However, at that point, there was a modest divergence.  SPY immediately recrossed its gap, ground sideways in a tight range until 11 am, rallied until 1 pm, sold off back to the prior close at 2 pm, and then drifted back to the highs of the day at the close.  At the same time, DIA immediately recrossed its gap, rallied until 12:30 pm, and then drifted just a bit lower in a tight range the rest of the day.  However, QQQ continued lower until 10:50 am, rallied hard back to the prior close by 11:30 pm, and slowly drifted lower the rest of the day.  This action gave us large white-body candles in the large-cap index ETFs and a black-bodied Doji Harami in the QQQ.  The DIA (and maybe the SPY is you squint) could also be seen as a Doji Continuation Signal (Sandwich). 

On the day, all 10 sectors were in the green with Financial Services (+1.34%) leading the way higher (after banks aced the stress test) while Technology (+0.07%) lagged behind the other sectors.  At the same time, SPY gained 0.39%, DIA lost 0.75%, and QQQ lost 0.20%.  The VXX gained 2.17% to close at 25.37 and T2122 climbed back higher into the overbought territory at 94.32.  10-year bond yields fell to 3.842% while Oil (WTI) gained 0.37% to close at $69.82 per barrel.  So, Thursday saw divergence with QQQ (which has led all year) showing weakness and indecision at the same time the large-cap ETFs continued to move higher.  The question is whether this might be a result of quarter-end profit-taking in the leading tech names, simply a result of the big banks acing the Fed stress tests, or the portent of a trend change.  This happened on just less-than-average volume in the DIA and less-than-average volume in both QQQ and SPY.

The major economic news on Thursday, overnight Fed Chair Powell said the US bank sector was “strong and liquidity is very, very high.”  However, he also said, “we are very reluctant to say if the sector’s turmoil was over … (because) our job is to worry about things.”  He went on to maintain a more hawkish stance toward Fed policy.  Powell said, “The committee clearly believes that there’s more work to do, that there are more rate hikes that are likely to be appropriate.”  Later (once the sun came up in the US), Q1 GDP was revised much higher to an unexpectedly strong +2.0% (compared to a preliminary reading of 1.3% and a forecast of +1.4% but still weaker than the Q4 +2.6%).  At the same time, the Q1 GDP Price Index came in lower than expected at 4.1% (versus the forecast of 4.2% but still above the Q4 reading of 3.9%).  So, the economy remained strong and inflation was not rising quite as fast as expected.  The Weekly Initial Jobless Claims came in well below what was anticipated at 239k (compared to a forecast of 266k and the previous week’s value of 265k).  So, the labor market remains very strong.  Later, May Pending Home Sales fell more than projected at -2.7% (versus a forecast of -0.5% and the April value of -0.4%).  Finally, after the close, the Fed Balance Sheet showed to have fallen $21 billion on the week from $8.262 trillion to $8.341 trillion as the Fed continues to reduce its asset holdings.  Overall, the bears could only spin this news negatively in the sense that it means the Fed has more work to do…and that may mean a slow-down later.  On the other hand, the bulls (and realists in my mind) would say that so far, we have seen no recession, the economy remains resilient, and the labor market remains strong. Yet inflation has fallen, even if at a slower pace.  Elsewhere, despite Powell’s comments overnight, later Atlanta Fed President Bostic reiterated his belief that the path of inflation will allow the central bank to not raise rates again this year.  Bostic said, “We have reached a level of the nominal federal funds rate that should be sufficient to move inflation toward the 2% target over an acceptable timeframe.”

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In stock news, CGC completed the sale of its California facility on Thursday for $61.10 million.  This is the company’s fifth such deal since April 1 and is part of the company’s attempt to improve its balance sheet.  Elsewhere, Reuters reported that SNAP has hit 4 million paid subscribers ($3.99/mo.) a milestone since the launching its member service one year ago.  At the same time, Reuters also reported that VLKAF (Volkswagen) is in talks to adopt the TSLA standard for their electric vehicle plugs.  In other auto news, TM announced that their May sales jumped 10% from the same month in 2022.  This was mostly driven by hybrid sales which were up 26%.  Later, SPCE completed its first commercial space flight, which topped out at just under 53 miles altitude.  (SPCE says it has a backlog of 800 customers willing to pay between $250k and $450k to make the flight.)  Meanwhile, OSTK announced that after buying the intellectual property of bankrupt BBBY, it will rebrand itself as Bed Bath and Beyond despite not bidding on the defunct retailer’s store locations.  Late in the day, CVX announced it is offering to sell several oil and gas properties located in NM and TX.  The move comes after the oil giant agreed to buy shale firm PDCE last month (which operates in the same region) and continues the CVX trend of divesting properties in West TX and NM).

In stock legal and regulatory news, the UK Competition Appeal Tribunal rejected the UK Competition and Markets Authority (regulator) bid to delay an appeal of the MSFT purchase of ATVI.  As a result, the appeal will go ahead as originally scheduled at the end of July.  Elsewhere, AAPL will defend itself against EU Antitrust charges based on music streaming as originally alleged by SPOT. The oral hearings will take place today.  At the same time, a US court approved the CNNWQ (Cineworld) to restructure its debt which should allow the company to emerge from bankruptcy in July.  Meanwhile, the US Supreme Court threw out a $96 million award that had been given to MEI in its case against its former European distributor.  Out in San Francisco, arguments were completed Thursday in the FTC bid for a temporary restraining order against MSFT proceeding with its acquisition of ATVI (while FTC litigation continues).  No timeline has been given for a decision.  In related news, the government of Canada weighed in on the deal agreeing with the FTC and UK Competition Authority.  Ottawa sent a letter to the court hearing the FTC request for a restraining order stating they believe the deal will lessen competition and should be halted until the FTC can prove its case.  In military news, the US State Dept. announced the approval of the sale of 24 F-35 fighter jets to the Czech Republic for $5.62 billion.  The contractors for these planes are LMT, RTN, and BA.  Late in the day, the FDA approved BMRN’s gene therapy for hemophilia A.  The company said it expects about 2,500 patients in the US to be eligible to receive the treatment based on the approval.  (However, it is priced at $2.9 million per patient.)

After the close, NKE beat on revenue while missing by a penny on earnings.  It is worth noting that NKE also lowered its forward guidance.

Overnight, Asian markets were mixed again but leaned to the bullish side.  Malaysia (-0.84%) was the only significant loss with four other exchanges being just on the red side of flat.  On the bullish side, Thailand (+1.59%), India (+1.14%), and Shenzhen (+1.02%) were the leaders among the seven gainers with only Australia (+0.12%) moving less than half of a percent.  Meanwhile, in Europe, with the exception of Russia (-0.31%) we see nothing but green at midday.  The CAC (+1.15%), DAX (+1.17%), and FTSE (+0.70%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a strong start to the day at this point.  The DIA implies a +0.31% open, the SPY is implying a +0.39% open, and the QQQ implies a +0.50% open at this hour.  At the same time, 10-year bond yields are surging to 3.876% and Oil (WTI) is just on the red side of flat at $69.81 per barrel in early trading.

The major economic news events scheduled for Friday are limited to May PCE Price Index and May Personal Spending (both at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am).  The only major earnings report scheduled for Friday is STZ before the open.  There are no reports scheduled for after the close.        

Do not forget that US markets are only open for a half-day on Monday and are closed Tuesday for the Independence Day holiday.

In miscellaneous news, the Fed said Thursday that 57 firms (41 banks and 15 service providers) have been certified to use the “FedNow” instant payments system when it launches in late July.  This includes JPM, BK, USB, and WFC among major banks.  Elsewhere, a former PFE employee and his friend were charged with insider trading related to PFE stock and the COVID-19 vaccine.  On the inflation front, preliminary data showed that Eurozone inflation fell more than expected in June to 5.5%.  This news comes just three days after ECB President Lagarde said inflation was too high and is set to remain there for too long as she announced an unexpected rate hike.  In other European news, the Netherlands formally joined President Biden’s export restrictions of semiconductor chipmaking equipment to China.  This primarily affects ASML which is the leader in chip lithography equipment.  (ASML announced Friday that it does not expect the restrictions to have a material impact on its 2023 financial projections.) Finally, union workers at the SPR Witchita KS plant (the primary fuselage supplier to BA) have approved a new deal. This ends the two-week strike with production to resume on July 5.

So far this morning, RAD and GBX reported beats to both the revenue and earnings lines.  Meanwhile, MKC and AYI both reported misses on revenue while beating on earnings.  On the other side, MSM beat on revenue while missing earnings by a penny.  It is worth noting that RAD and GBX both raised forward guidance.  (There were no guidance reductions at least as of yet.)  RAD (+51%) and GBX (+70%) were the only major surprises reported and significantly neither came against reduced forecasts.

With that background, it looks like all three major index ETFs are looking to move higher to start the last day of the quarter. All three of their premarket candles have large, white bodies and tiny wicks at this point. However, it is early and PCE data lays ahead before the open. Remember that this is the end of the quarter, which may mean window dressing and moves like AAPL pushing for a $3 trillion valuation (which it is very near anyway). In addition, with a half-day market on Monday and the holiday on Tuesday, many money managers plan to take Monday off. Again, this gives them extra temptation to sneak out early today to stretch the off-time into a mini vacation. The point is that volumes may die in the afternoon or even all day long with prices drifting higher into the weekend. (Remember the Trader’s Almanac rule of thumb that markets are happy (bullish) the day before long weekends and sad (bearish) when they have to come back to work after extra time off. As far as extension goes, none of the three major index ETFs is too far from their T-line. However, the T2122 indicator has climbed back up well into its overbought territory. So, while there is some room to move higher (and bear in mind that markets can remain extended longer than we can remain solvent betting on mean reversion), the bears do have the benefit of more slack to run. Remember to pay yourself on payday…take the profits you can and prep your account for the weekend (and perhaps 4-day) news cycle.

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 slightly lower on Wednesday with the SPY gapping down 0.25%, DIA down 0.11%, and QQQ down 0.48%.  All three major index ETFs spent the first 45 minutes grinding sideways in a tight range. At that point, the SPY started a rally that recrossed the gap and reached the high of the day at 12:20 pm.  From there, a sharp selloff crossed the gap once again by 1 pm, and then price wobbled sideways until a rally in the last 5 minutes took SPY out above the prior close.  Meanwhile, QQQ was more volatile, rallying sharply from 10:15 to 10:55 am then selling off sharply until 11:30 am, rallying up to the highs of the day at 12:20 pm, selling very hard back down into the gap by 1 pm, and then grinding sideways the rest of the afternoon.  However, DIA had a mid-day bump but ground sideways along the lows almost all day.  This action gave us a white-bodied Spinning top (larger body) candle in the SPY, a white candle with a larger upper wick in the QQQ, and a black-bodied Dragonfly Doji in the DIA.  Both SPY and QQQ held above their T-line (8ema) after a retest while DIA failed to even retest its T-line after gapping down below it.

On the day, five of the 10 sectors were in the red with Utilities (-1.34%%) way out front leading the market lower while Energy (+0.68%) held up better than other sectors.  At the same time, SPY gained 0.05%, DIA lost 0.18%, and QQQ gained 0.20%.  The VXX dropped 3.65% to close at 24.83 and T2122 dropped back to just inside the edge of the overbought territory at 80.10.  10-year bond yields fell to 3.716% while Oil (WTI) gained 2.13% to close at $69.14 per barrel.  So, overall, the day was much ado about nothing.  After a gap lower, the leading index ETFs recovered quickly rethought the rebound, and then drifted.  Meanwhile, the laggard mega-cap DIA spent the day on the South side of the open without really participating in the rebound.  This happened on less-than-average volume in all three major index ETFs but the QQQ was much closer to an average volume day than the other indices.

The major economic news on Wednesday included Preliminary May Trade Goods Balance, which came in a bit better than expected at -$91.13 billion (compared to a forecast of -$92.90 billion and much better than the April reading of -$97.10 billion).  At the same time, Preliminary May Retail Inventories were reported as dead flat at +0.0% (versus the April reading of -0.3%). Later the EIA Weekly Crude Oil Inventories showed a much bigger drawdown than was expected at -9.603-million-barrels (compared to a forecast calling for -1.757-million-barrels and well more than the prior week’s -3.831-million-barrels).  In Fed-speak, FOMC Chair Powell spoke at a Conf. in Portugal on Wednesday saying that “more restriction is coming.”  He went on to say that he would not take “moving at consecutive meetings off the table.”  Later, during questions he said he did not expect a recession, clarifying that “There’s a significant possibility that there will be a downturn … it’s not the most likely case, but it’s certainly possible.”  An interesting aside is that Powell told the conference that the US would not hit the Fed’s 2% inflation target until 2025.  Then, after the close, the Fed announced that all 23 major US banks passed its annual stress test.   Despite $541 billion in projected loan losses across the group, the Fed projects that even during a severe global recession (including a 40% decline in real estate prices) the banks would be able to continue to provide credit and maintain their capital requirements.  Under that severe scenario, the largest banks saw their capital levels drop to 10.1% while large regional banks’ capital levels fell to the 6%-8% level.

SNAP Case Study | Actual Trade

In stock news, in what seemed an odd announcement STLA said it had partnered with an ad agency specifically to reach out to black customers.  (I see nothing odd about targeting any demographic.  However, a press release of doing so just seems weird.)  Later in the day, STLA placed a MI plant on “critical status” which the union contract allows the company to require mandatory overtime.  This move is intended to allow the company to stockpile Jeep/Dodge inventory ahead of a potential strike in September.  Elsewhere, for the second time this week, TRI announced they have reached a deal to buy a company, this time acquiring Imagen (a digital content management company) for an undisclosed price.  At the end of the day, ORCL announced it has modified its database software (primary product) to allow it to run on processors made by startup chip company Ampere (founded by former INTC executives).  This move is intended to allow ORCL to boost cloud computing performance in order to better compete with AMZN and MSFT in that market.  After the close, UPS announced it was working with law enforcement after some of their Canadian shipper customers were hit with cyber phishing attacks disguised as text messages from UPS.  Also after the close, as part of the stress test announcements, Fed Vice Chair for Bank Supervision Barr said banks are expected to announce revisions to their dividend and buyback plans after the close on Friday.

In stock legal and regulatory news, ATVI announced Wednesday that it is adding to its staff in the EU (Spain), following through on one of the promises made to gain EU approval of the MSFT acquisition of the company.  This came after ATVI said it would be reassessing its growth plans in the UK after that country blocked the acquisition and as the CEOs of the two companies testified in the US as part of the FTC lawsuit to block the deal.  Speaking of which, the CEOs of MSFT and ATVI both told a San Francisco Federal court that ever making ATVI games exclusive to MSFT hardware would not make any strategic sense.  ATVI CEO Kotick told the court that if MSFT did ever do that, they would have a revolt on their hands from the 100 million monthly active users.  In other Tech news, NVDA tried to head off rumored additional restrictions on chip sales to China.  The CFO of NVDA said Wednesday that any additional export restriction on sales of chips to China would cause a “permanent loss of opportunities for the US chip industry” (mean NVDA).  Elsewhere, a US district judge dismissed a case against AMZN which had alleged the e-commerce giant had sold “suicide kits” to teenagers.  At the same time, JOBY received FAA approval for flight testing of the company’s “electric air taxi” vehicles.  Meanwhile, SOLVY reached a $393 million settlement with the NJ Dept. of Environmental Protection related to drinking water pollution with “forever chemicals” from the company’s NJ plant.

After the close, MU, WOR, and BB beat on both the revenue and earnings lines.  At the same time, CNXC beat on revenue while missing on earnings.  However, FUL missed on both the top and bottom lines.  It should be noted that MU lowered its forward guidance.  The only major surprise was a 40% upside earnings shock from WOR.  Finally, it is worth noting that MU was upbeat about the current quarter and said that the recent chip glut is beginning to ease.  This came after a crash in computer and phone sales had caused the company’s (and the industry’s) inventories to build.

Overnight, Asian markets were mixed.  Hong Kong (-1.24%) was by far the biggest loser followed by South Korea (-0.55%).  The gainers were led by Thailand (+0.86%), India (+0.82%), and New Zealand (+0.64%).  Meanwhile, in Europe, 13 of the 15 bourses are in the green at midday.  The CAC (+0.81%), DAX (+0.22%), and FTSE (-0.24%) are typical of the performance spread in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a higher start for the day.  The DIA implies a +0.30% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bond yields are back up to 3.745% and Oil (WTI) is up almost six-tenths of a percent to $69.95 per barrel in early trading.

The major economic news events scheduled for Thursday include Q1 GDP, Q1 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am), and May Pending Home Sales (10 am).  We also hear from two Fed speakers, Chair Powell (2:30 am) and Bostic at 3 pm.  The major earnings reports scheduled for Thursday include AYI, GBX, MKC, MSM, PAYX, and RAD before the open.  Then, after the close, NKE reports.        

In economic news later this week, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Friday, STZ reports.

In miscellaneous news, SPCE is set to launch its first commercial space flight via a rocket released from a jet on Thursday.  The flight will take three passengers 50 miles above New Mexico.  Elsewhere, AAPL printed another record high close Wednesday.  This brought the company enticingly near a $3 trillion market cap at $2.98 trillion.  (The company briefly reached the $3 trillion mark intraday on January 3, 2022, but has never closed above that level.)  So, watch that as something traders push for and as a news event today. Finally, Fed Chair Powell again warned that tighter monetary policy was on the way in an overnight (2:30 am) presentation in Europe.  For what it is worth, the CME Fed Watch Tool now shows an 82% probability of a quarter-point hike in July as of now.

So far this morning, RAD and GBX reported beats to both the revenue and earnings lines.  Meanwhile, MKC and AYI both reported misses on revenue while beating on earnings.  On the other side, MSM beat on revenue while missing earnings by a penny.  It is worth noting that RAD and GBX both raised forward guidance.  (There were no guidance reductions at least as of yet.)  RAD (+51%) and GBX (+70%) were the only major surprises reported and significantly neither came against reduced forecasts.

With that background, it looks like all three major index ETFs are looking to move higher again, at least early. The DIA is crossing back above its T-line in premarket action and all three are printing strong white-body candles so far this morning. However, it is early and the GDP data coming at 8:30 am could throw a wrench into the works. Remember that we have only two days left until the month and quarter end. So, there could be some window dressing going on. In addition, with the holiday on Tuesday, many money managers plan to take Monday off…which provided extra temptation to sneak out early to stretch the off-time into a real rest. My point is that volumes may die even more and prices may drift into the weekend. In terms of extension, none of the three major index ETFs is far from their T-line and the T2122 indicator has dropped back to just the lower edge of its overbought territory. Therefore, we have room to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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