Monday was another Bullish day starting with higher opens.  (SPY gapped 0.23% higher, DIA gapped 0.13% higher, and QQQ gapped 0.48% higher.)  At that point, all three major index ETFs chopped sideways in a volatile way.  At 11 am, the SPY and QQQ started a strong rally that lasted the rest of the day.  Meanwhile, DIA finally began to follow at noon, sold off again from 1:20 pm until 3 pm, and then followed higher again the last hour of the day.  This action gave us gap-up strong white candles with small lower wicks and almost no upper wick.  SPY broke through a resistance level not tested since mid-August 2022 while QQQ is back at levels not seen since March 2022.  All three index ETFs remain above their T-line (8ema) as the trend remains Bullish.

On the day, seven of the 10 sectors were in the green as Technology (+1.99%) led the market higher, while Energy (-1.16%) was by far the lagging sector.  At the same time, SPY gained 0.91%, DIA gained 0.56%, and QQQ gained 1.69%.  The VXX gained a half of a percent again to 28.49 and T2122 climbed back into the overbought territory to 89.41.  10-year bond yields fell slightly to end at 3.742% while Oil (WTI) plummeted 4.45% to end the day at $67.05 per barrel.  So, Monday was the Bulls’ Day again.  We took out resistance levels and pushed on up with technology leading the way higher.  However, it should be noted that this all happened on well-below-average volume in all three major index ETFs.

The only major economic news on Monday was the May Federal Budget Balance which came in a bit worse than expected with a $240.0 billion deficit (compared to a forecast for a $236.0 billion deficit and much worse than the April reading of a $176.0 billion surplus).  The primary cause of the deficit is that revenues were down 21% from a year earlier (mostly coming from a decline in high-end tax returns).  However, spending was up too, with a tripling of the cost of the Medicare program driving much of the increase.  Elsewhere, the NY Fed released a survey Monday which found American inflation expectations have fallen to the lowest level in two years.  The May Survey of Consumer Expectations found that respondents project inflation a year from now will be at 4.1% (down from 4.4% in the prior month’s survey).  The same respondents expect inflation to be at 3.0% in three years (slightly up from April’s 2.9% average).

SNAP Case Study | Actual Trade

In stock news, the Wall Street Journal reported Monday that VZ is looking for a new CFO who would also become the CEO-in-waiting to succeed current CEO Vestberg.  At the same time, LMT and GFS announced a partnership to secure a domestic supply of semiconductors for defense systems.  The partnership aims to garner part of the $52 billion provided by the Chips Act from the previous Congress.  Elsewhere, CAVA released details of their IPO scheduled for later this week.  The offering will be 14.4 million shares with a planned price range between $19 and $20 per share.  In boycott news, MDLZ is facing growing boycotts by corporate entities in the Nordic region over its continued operation in Russia.  Several airlines, railways, hotel chains, retailers, and even the Norwegian Football Assn. are among those who announced they will stop selling MDLZ products in the last few days.  In the auto space, following on the heels of similar stories at other locations (MI and TX), GM announced they will invest $632 million to expand its Ft. Wayne IN internal combustion truck plant capacity.  In other auto news, TSLA sent emails to Canadian customers canceling the customers’ orders for US-built “Model Y Long Range” vehicles.  The email offered those affected the option to instead select Chinese-built “Model Y Long Range” vehicles.  After the close, CB announced it has authorized a $5 billion stock repurchase program effective July 1.

In stock legal and regulatory news, it was announced Monday that GOOGL settled with composer Maria Schneider on Sunday, a day before her case against the company for enabling piracy of her works was scheduled to begin.  Terms of the settlement were not released.  Elsewhere, Reuters reported AVGO is set to win conditional approval for its $61 billion purchase of VMW from the EU Antitrust regulator.  The approval will be tied to remedies relating to interoperability with rival products (such as those from MRVL).  The official decision is not due until July 17, but Reuters says multiple sources have leaked the outcome to them early.  However, in the US, the FTC filed a motion to seek a court order to block the MSFT acquisition of ATVI.  (Antitrust experts say the FTC faces an uphill battle because MSFT has already offered voluntary concessions to allay fears it could dominate the online gaming market.)  JPM has agreed to settle with the victims of Jeffrey Epstein for $290 million.  The settlement still requires the approval of the federal judge overseeing the case.  In the afternoon, US District Judge Sorokin delayed the effective date of the permanent injunction blocking the “effective merger” of AAL and JBLU in the Northeast.  Originally scheduled to be effective June 20, the revision will make the injunction effective 21 days after his final ruling. This comes after the airlines petitioned for him to not block their “mutual frequent flyer and codeshare arrangements” late last week.  At the end of the day, a jury found BRK.A subsidiary PacifiCorp is liable in a $1.6 billion class action lawsuit over wildfires in Oregon.  At the same time, Bloomberg reported GOOGL will be hit with a formal antitrust complaint to be announced Wednesday.  The new suit targets GOOGL’s ad business model which targets individuals based on information gained by tracking them. 

In real estate news, Bloomberg reports that office occupancy in New York has increased. Their survey found that occupancy is above 50% for the first time since before the pandemic. This is welcome news for some as the city estimates that remote work has been costing the New York economy $12 billion a year. However, the same survey found that other major cities such as Washington DC and San Francisco remain below 50% office occupancy.

After the close, ORCL reported beats on both the revenue and earnings lines.  The company also raised forward guidance after reporting jumps in the company’s cloud services revenue growth.

Overnight, Asian markets leaned heavily to the green side with only two exchanges in the red.  Japan (+1.80%), Taiwan (+1.54%), and Shenzhen (+0.76%) led the gainers.  Meanwhile, in Europe, the picture is more mixed at midday.  Seven of the 15 European exchanges are in the red with the CAC (-0.08%), DAX (+0.08%), and FTSE (-0.16%) leading on volume.  Sadly, Russia (+1.39%) is the biggest positive mover on the day as of early afternoon.  In the US, as of 7:30 am, Futures are pointing to a mixed and modestly positive start to the day.  The DIA implies a -0.01% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.736% and Oil (WTI) is up 1.94% to $68.43 per barrel in early trading.

The only major economic news events scheduled for Tuesday are May CPI (8:30 am) and API Weekly Crude Oil Stocks (4:30 pm).  There are no major earnings reports scheduled for either before the open of after the close.

In economic news later this week, on Wednesday, May PPI, EIA Crude Oil Inventories, Q2 Fed Interest Rate Projections for the current year, 1^st year, and 2^nd year, FOMC Economic Projections, FOMC statement, Fed Interest Rate Decision, and Fed Chair Press Conference are reported.  On Thursday, May Retail Sales, May Imports, May Exports, Weekly Initial Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, May Industrial Production, April Business Inventories, and April Retail Inventories are reported.  Then, on Friday, we get Michigan consumer Sentiment, and a Fed Speaker (Waller at 7:45 am).

In terms of earnings reports later this week, on Wednesday, we hear from LEN.  Then Thursday, KR, JBL, WLY, and ADBE report.  Finally, there are no reports on Friday.

In miscellaneous news, overnight TM announced plans for a new EV unit that will offer a full lineup of “extended range” electric vehicles in 2026.  The company also announced it plans to achieve annual sales of 3.5 million all-electric vehicles by 2030.  Finally, the ex-President with a persecution complex has called on his backers to show up to support for him and denounce his indictment today as he is arrested, booked, and arraigned in Miami.  Worse yet, some of his right-wing Congressional and social media supporters have stoked that fire by falsely claiming the 37-count indictment to be a political attack and calling for everything from the abolition of the FBI and Dept. of Justice to actual militant action. (Rep. Higgins of LA called for the taking of bridges and knowing the points of attack on the maps.  Later, he said there is a “3% militia solution” to the indictments.)  As a result, this will undoubtedly be the top news story by day-end Tuesday (probably sooner) and has the potential to throw markets into turmoil based on the action taken by “those people” who show up to protest…and whether authorities are prepared to respond appropriately if they step out of line.

With that background, it looks like the Bulls are looking to make another modest push at the open today but also that the DIA remains the laggard (and mostly undecided this morning). The SPY looks like it wants to retest the Mid-April 2022 lows while QQQ seems to be looking to chasing the March 2022 high level. DIA lags, but has a little room before reaching a strong resistance level starting at the May 1, 2023 high. The main takeaway from this for me is that the bulls have all the momentum this morning. However, QQQ is back to being a bit over-extended from its T-line at this point and it would not take a huge move for SPY to join it in that condition. Meanwhile, the T2122 indicator is back up mid-way into the overbought territory. So, we do have some room to run, but we are also a bit stretched. Obviously CPI this morning will drive early action. Expectations are for the report to show modestly moderating inflation (giving fuel to the Fed Doves for a pause in hikes tomorrow). However, as I said above, the situation in Miami has the potential to cause a massive jerk in the market. So, we might see extreme volatility or a reversal of trend, depending on what the MAGA types do and how authorities react. Just be prepared.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was another Bullish and yet hesitant or indecisive day.  The SPY gapped 0.19% higher, QQQ gapped 0.47% higher, and DIA was the contrarian again, opening down 0.06%.  At that point, SPY and QQQ put in strong rallies while the DIA put in a milder rally over the first hour of the day.  At that point SPY and QQQ sold off with intermittent relief rallies reaching Thursday’s closing level at about 12:45 pm.  Meanwhile, DIA trod water until about 11:20 am when a sharp, short rally had it back at Thursday’s close by 11:35 am.  From there DIA ground sideways in a very tight range until 1:30 pm.  Then the last rally of the day took DIA two-thirds of the way back to the highs before grinding sideways into the close from 2:30 pm onward.  SPY’s last rally started at 12:45 pm and lasted until 2:30 pm before drifting into the close.  At the same time, QQQ rallied more strongly from 12:45 pm until 2:25 pm before selling off into the close.

This action gave us a gap-up (breakout) Doji in the SPY that could easily be seen as a Shooting Star candle.  QQQ also gave us a gap-up, Doji-like black-bodied candle, but since the open was not above this week’s candle body highs, I hesitate to call it a Shooting Star.  We can at least say it was very indecisive and had a large upper wick on tock of the small black body.  For its part, even though DIA was the laggard, it did put in the most Bullish candle.  Even so, it was more than half upper wick on top of a white body.  All three major index ETFs remain above their T-line (8ema).  So, the trend remains bullish.  This all happened on average volume in the DIA and just below average volume in the SPY and QQQ.

On the day, nine of the 10 sectors were in the red on small moves as Basic Materials (-0.77%) led the market lower, while Technology (+0.30%) was the only sector in the green.  Despite this, the SPY gained 0.18%, DIA gained 0.14%, and QQQ gained 0.38%.  The VXX gained a half of a percent to end at 28.36 and T2122 dropped out of the overbought territory (barely) to 79.67.  10-year bond yields fell to end at 3.743% while Oil (WTI) dropped 1.32% to end the day at $70.35 per barrel.  So, Friday was another day where we saw gaps higher, rallies, and protracted selloffs.  It seemed as if the market was truly undecided as to who was in control.

SNAP Case Study | Actual Trade

The only major economic news Friday was the USDA WASDE Ag report.  The biggest news from that report is that the USDA surprisingly lowered its projected US soybean exports by 15 million bushels.  (The USDA tends to not adjust US crop forecasts in the June report.  So, forecasts were left unchanged and a reduction in forecasted exports is less a reflection on US production at this early stage than it is an expectation of a bumper crop in Brazil and other South American countries.)  The report predicts increases in the year-end US grain inventories for corn (up 35 million bushels), soybeans (up 15 million bushels), and wheat (up 6 million bushels). It’s doubtful that the report reflects the Russian dam attack earlier in the week that leaves 1 million acres of wheat cropland (25% of Ukraine’s acreage) without irrigation.

In stock news, the White House announced that TSLA charging stations will be eligible for federal subsidies as long as the charges include a national standard connection (CCS).  TSLA jumped on the news while charging station competitors (CHPT, EVGO, and BLNK) plummeted 10-13% on the day.  Elsewhere, NFLX reported Friday that sign-ups for new accounts have surged in the first days since it started a crackdown on password sharing in the US.  The company reported more than 100,000 new accounts created in each of the first two days of the clampdown program.  Over the weekend, UBS completed its buyout of rival CS after completing the loss-sharing agreement with the Swiss government at the end of last week.  That deal provides a $10 billion Swiss government backstop for losses.  Monday morning, UK PM Sunak said that Britain had concluded a deal with GOOGL to allow the UK priority access to its DeepMind AI for research purposes.  Meanwhile, NDAQ has agreed to acquire private-equity-owned Adenza software (Risk Management and Regulatory Compliance software for the financial services industry) for $10.5 billion.  At the same time, NVS agreed to acquire KDNY for $3.5 billion in order to build out its late-stage development pipeline.

In stock legal and regulatory news, WBA reached a settlement with the state of NM over opioid crisis claims.  The company agreed to pay the state $500 million to settle the state’s claims.  Elsewhere, a US District judge in Seattle rejected company bids to have a case thrown out, instead ruling that AAPL and AMZN must face a consumer antitrust lawsuit that accuses them of conspiring to inflate the price of iPhones and iPads sold through AMZN.  Meanwhile, a US bankruptcy judge has rejected MMM subsidiary Aearo Technologies’ attempt to avoid liability of 260,000 lawsuits over military personnel hearing loss allegedly caused by faulty MMM earplugs.  The judge ruled Aearo was a well-supported subsidiary of MMM and not otherwise in financial stress.  (The bankruptcy was purely a MMM liability avoidance mechanism based on the “Texas Two-Step” strategy to transfer liability and then declare bankruptcy of the subsidiary.)  At the same time, the FDA advisory panel unanimously backed the full approval of BIIB’s Leqembi Alzheimer’s drug.  (The full FDA approval decision is expected by July 6.)  After the close, the US Chamber of Commerce (acting on behalf of drug giants) sued the US Dept of HHS in an effort to block Medicare’s ability to negotiate drug prices with pharmaceutical companies.  Also after the close, AAL and JBLU asked a US judge to allow them to continue a mutual frequent flyer recognition program even after the judge ruled in May that the companies must end their alliance to “coordinate flights and pool revenue” (which was ruled a defacto merger).

Overnight, Asian markets leaned to the green side on modest moves in both directions.  New Zealand (-0.64%) paced the losses while Malaysia (+0.78%), Shenzhen (+0.74%), and Japan (+0.52%) led the gainers. Meanwhile, in Europe, we see a similar picture taking shape with five exchanges showing any red at all while 10 exchanges show larger, yet still modest moves toward the green at midday.  The CAC (+0.53%), DAX (+0.55%), and FTSE (-0.02%) lead the region as always in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the morning. The DIA implies a +0.02% open, the SPY is implying a +0.18% open, and the QQQ implies a +0.41% open at this point.  At the same time, 10-year bond yields are up slightly to 3.747% and Oil (WTI) is sharply lower by 2.28% to $68.57 per barrel in early trading.

The only major economic news events scheduled for Monday is limited to the Federal Budget Balance (2 pm).  There are no major earnings reports scheduled for before the open.  However, after the close, ORCL reports. 

In economic news later this week, on Tuesday, May CPI and API Weekly Crude Oil Stocks are reported.  Then on Wednesday, we get May PPI, EIA Crude Oil Inventories, Q2 Fed Interest Rate Projections for the Current year, 1^st year, and 2nd year, FOMC Economic Projections, FOMC statement, Fed Interest Rate Decision, and the Fed Chair Press Conference.  On Thursday, May Retail Sales, May Imports, May Exports, Weekly Initial Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, May Industrial Production, April Business Inventories, and April Retail Inventories are reported.  Then, on Friday, we get Michigan consumer Sentiment, and we have a Fed Speaker (Waller at 7:45 am).

In terms of earnings reports later this week, they will be few and far between. On Tuesday there are no major reports.  Then Wednesday, we hear from LEN. On Thursday, KR, JBL, WLY, and ADBE report.  Finally, there are no reports again on Friday.

In miscellaneous news, the Fed reported Friday that US bank deposits and lending both increased for the third straight week (for the week ending May 31).  Deposits rose $46.6 billion during the week while lending increased $4.6 billion (residential lending rose $0.6 billion while commercial real estate lending was up $3.7 billion, commercial loans also rose $0.6 billion as Consumer loans fell $2.1 billion).  Elsewhere, the Fed has been counting on falling rental and housing prices to help drive disinflation later this year.  However, Bloomberg reported Saturday that there are factors at play that may cause that housing disinflation to not be as strong as the Fed hopes.  Bloomberg said we saw a near-record low number of houses put up for sale this Spring.  (This will tend to prop up home prices and prevent that disinflation.)  In addition, it seems some banks are now abandoning commercial real estate deals as a market over fear of defaults.  The report cited a Houston-area apartment project from Howard Hughes (TX Real Estate Developer). Hughes is proposing an apartment project in an area with strong rental demand.  Yet 48 lenders who have financed such projects in the past refused to even bid on a financing proposal.  Still, that is just one example, the Bloomberg story also admitted that US apartment construction remains at a record pace this year. Finally, the Fedwatch Tool tells us markets have priced in a 76% probability of no change in rates and a 24% chance of a quarter-point hike this week.

With that background, it looks like the Bulls are looking to make another modest push at the open today. Only the IWM is not following suit and even it is looking at a modestly higher open. The SPY looks like it wants to retest the Mid-August 2022 high while QQQ seems to be looking to retest Friday’s high. DIA lags, but also has some room to move before the next potential resistance level. The main takeaway from this for me is that we are not seeing consolidation anywhere except the IWM and the bulls seem to want to run to new highs. None of the major indices ETF tickers are over-extended from their T-line at this point and the T2122 indicator has dropped back just outside the overbought territory. So, we do have some room to run. That all said, it is Fed week. So, we might see a move early but don’t be surprised by a lot of “wait and see” until the Wednesday decision and presser. As always, beware of intraday volatility since we have been quite uncertain of direction lately (we moved, but the candles were indecisive).

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The Bulls were in control of the market most of the day Thursday.  While all three major index ETFs opened flat and took a half hour to figure out their mood, the rally started at 10 am and did not let up at all until 12:30 pm in the SPY, QQQ, or DIA.  Then, after an hour of midday rest, the bulls took off again rallying almost into the close.  All three major indices closed in the top 10% of their candles.  This action gave us white-bodied candles with tiny wicks in the SPY, QQQ, and DIA.  The QQQ printed a Bullish Harami signal crossing back above its T-line (8ema).  Meanwhile, the SPY is in a tight consolidation (Pop out of the Box) setup and pressing against the top of that range.  For its part, the DIA printed a small J-hook pattern, breaking out Thursday.  All of this happened on a post-pandemic low in volatility (VIX).

On the day, eight of the 10 sectors were in the green as Consumer Cyclical (+0.66%) led the market higher, while Energy and Financial Services (both -0.02%) were the only sectors in the red.  At the same time, SPY gained 0.60%, DIA gained 0.49%, and QQQ gained 1.24%.  The VXX dropped another 2.7% to end at 28.13 and T2122 fell but remains well inside the overbought territory at 91.11.  10-year bond yields spiked to end at 3.797% while Oil (WTI) gained just over 1% to end the day at $72.49 per barrel.  So, Thursday was a bounce-back day with tech reclaiming leadership and the blue-chip industrials taking a step back again.  However, this move came on below-average volume in all three major indices (well below-average in the SPY). 

In major economic news, Weekly Initial Jobless Claims came in significantly above the expected level at 261k, which was an 18-month high, (compared to a forecast of 235k and the prior week’s 233k).  Yet Weekly Continuing Jobless Claims came in under forecast at 1,757k (versus the expected 1,800k and even less than the prior week’s 1,794k).  Later, April Wholesale Inventories fell less than expected at -0.1% month-on-month after upward revision (compared to a forecast of -0.2% but still down from the March 0.0% change).  At the same time, April Wholesale Trade Sales month-on-month increased less than anticipated at +0.2% (versus the forecast of +0.4% but still much better than March’s -2.7% reading).  Then, after the close, the Fed Balance Sheet was reported slightly increased to $8.389 trillion (versus the previous week’s $8.386 billion).  Bank Balances with the Fed were up $100 billion to $3.306 trillion (compared to the prior week’s $3.206 trillion).  This increase came mostly on a surge of borrowing from the Fed’s emergency bank bailout fund that reached its highest level since April.

SNAP Case Study | Actual Trade

In stock news, TM announced Thursday it will be investing $50 million to build a battery research laboratory in MI.  Elsewhere, LCID (partially owned by the Saudi sovereign wealth fund) began delivery of its “Air” sedan in Saudi Arabia.  In other electric vehicle news, F announced that it is on track to reach its goal of producing 150,000 units of its F-150 Lightning this year.  (GM will not introduce an electric version of its Silverado until sometime in 2024.)  During the afternoon, Reuters reported that the CEO of TD said he is confident the bank can resolve the issues with regulators that led to the collapse of TD’s $13.4 billion purchase of FHN.  Then GM announced it is investing $500 million for an expansion of its Arlington TX plant to increase internal combustion SUV production.  (A day after announcing $1 billion to increase ICE truck production at two MI plants.)  In other GM news, CEO Barra said Thursday that GM will join F in adopting the TSLA charging standard and has signed an agreement with TSLA to give GM customers access to the TSLA “supercharger” network.  Meanwhile, HOG suspended production at its York PA plant due to a parts shortage.  This was the second outage at the plant in the last year for the same reason.  Production is now scheduled to resume on June 13.

In stock legal and regulatory news, in Europe, V and MA have won their effort to have class-action lawsuits over fees charged to retailers thrown out.  As a result, each of the hundreds of claimants will need to sue individually.  At the same time, Reuters reported that META’s Instagram and GOOGL’s YouTube (as well as TikTok and Twitter) are the target of a new investigation that may lead to regulatory action by the EU consumer authorities.  This follows a Thursday complaint by a major European consumer group.  The complaint charges advertisers facilitated misleading promotions of crypto assets that have harmed consumers.  EU Internal Markets Commissioner Breton announced he will be meeting with META CEO Zuckerberg on June 23.  In the announcement, Breton demanded that META act immediately against content targeting children and said META’s voluntary “child protection code” is not working and that the meeting is intended to let Zuckerberg explain why and how the problem is being resolved.  Later, MBGAF (Mercedes Benz) beat TSLA to the punch by having its automated driving system (DRIVE PILOT) approved by the CA Dept. of Motor Vehicles (on designated highways under certain road conditions) even without “active driver control of the vehicle.”  (TSLA’s competing “Full Self-Driving” system isn’t approved yet and, thus, still requires a driver constantly supervising the system.)  After the close, the Biden Administration submitted draft legislation to Congress asking that they mandate airlines pay cash compensation for delays of more than three hours when the airline is responsible.

After the close, DOCU reported beat on both the revenue and earnings lines.  It also raised its forward guidance.  Meanwhile, MTN missed on both the top and bottom lines.  MTN also lowered forward guidance.  The only significant surprise was a 31% upside earnings surprise by DOCU.

Overnight, Asian markets were mostly green.  India (-0.38% was the biggest loser, while Japan (+1.97%), South Korea (+1.16%), and Taiwan (+0.91%) led the region higher.  However, in Europe, we see a much more mixed picture taking shape at midday. Five of the bourses are modestly green while the CAC (-0.36%), DAX (-0.31%), and FTSE (-0.51%) lead 10 exchanges modestly lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed start to the day.  DIA is the largest mover, implying a -0.22% open, while SPY implies a -0.03% open and QQQ implies a +0.09% open at this hour.  At the same time, 10-year bond yields were down strongly overnight but are now rebounding to 3.751% while Oil (WTI) was also down hard overnight only to rebound four-tenths of a percent to $71.58 per barrel in early trading.

The only major economic news events scheduled for Friday is the WASDE Ag Report (noon).  The major earnings reports scheduled for the day are limited to NIO before the open.  There are no reports scheduled for after the close. 

So far this morning, electric vehicle maker NIO missed on both the revenue and earning lines.  The company also lowered its forward guidance.  The NIO earnings miss was a 64% downside surprise even after expecting a $0.22 loss per share prior to the report.

In miscellaneous news, the Fed reported that American household wealth rose by $3 trillion in Q1 to $149 trillion, mostly on the back of stock market gains and despite a $600 billion reduction in real estate values.  However, this is still almost $4 trillion below the $152.6 trillion peak in Q1 of 2022.  The same report noted that the growth of household debt slowed, expanding 2.2% in the quarter (compared to a 7.6% increase during the same quarter of 2021).  Elsewhere, the Chinese inflation rate remained near zero in May which has analysts calling for a rate cut.  This comes less than 24 hours after China held a large investor conference in Shanghai attempting to convince global financiers to invest in Chinese business (claiming the country is much more open, free of corruption, and market-based now and moving forward).  So, this is a test of how responsive China is to market pressures.  Will it take its own (Xi’s) counsel or accept the advice of “economic experts” at large financial institutions (which might invest in the country)?  Finally, a large talking point will be the 7-count (so far) South Florida Federal grand jury indictment of ex-President Trump on criminal charges.  The charges may be unsealed today, but for now, the specifics are unknown.  We do know that this case is related to his removal, hiding, and failure to return (even after subpoena) classified documents.  His arraignment will be Tuesday afternoon, which is the latest charges could be unsealed.  While it will make headlines and be a major topic of discussion, there is no indication at this point that the news will drive markets today.

With that background, it looks like markets are again basically undecided this morning. The SPY remains at the top of its week-long tight consolidation. QQQ is trying to move higher but has a potential resistance level just overhead (one that it did repeatedly test recently). Meanwhile, DIA has come back down slightly and is back to the J-hook breakout level for a retest (after Thursday’s breakout). None of the major indices ETF tickers are over-extended from their T-line. However, the T2122 indicator still points toward markets being overbought. Overall, both of the large-cap index ETFs can still best be described as being in a tight consolidation, while the QQQ is trying to recover from its one-day pullback. Remember this is Friday. So, it’s time to pay yourself, lock in some profits, and hedge for the weekend. Also, expect a lot of hot air (on both sides) from the Trump story, which may or may not have a market impact. So, as usual, expect intraday volatility.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Wednesday saw a huge rotation in the market, away from the high-tech leaders that have driven the rally all year.  The SPY gapped 0.12% higher, DIA gapped 0.17% higher, and QQQ gapped 0.09% higher at the open.  Then after a very short follow-through to the upside, a selloff started.  This was a huge selloff in the QQQ and it never really let up all day, closing near the lows.  At the same time, the SPY had just a modest selloff that lasted until just before 11 am, at which point a sideways grind with a slightly bearish trend kicked in and lasted the rest of the day.  However, the DIA selloff was over before 10 am and it chopped sideways with a slightly bullish trend all day long.  This action gave us a Spinning Top type Bearish Engulfing candle in the SPY (just continuing its three-day consolidation), a white-bodied Spinning Top in the DIA (just continuing its three-day consolidation), and a huge Bearish Engulfing candle in the QQQ that dropped back down through its T-line (8ema).

On the day, seven of the 10 sectors were in the green as Energy (+2.28%) was by far the biggest gainer and Technology (-1.28%) by far the biggest loser of the session.  At the same time, SPY lost 0.35%, DIA gained 0.30%, and QQQ lost a whopping 1.70%.  The VXX gained almost a half of a percent to end at 28.91 and T2122 climbed even deeper inside the overbought territory to 97.44.  10-year bond yields spiked to end at 3.797% while Oil (WTI) gained just over 1% to end the day at $72.49 per barrel.  So, Wednesday saw that big rotation out of the mega-cap high-tech names (AMD -5.15%, AMZN -4.25%, GOOG -3.89%, MSFT -3.09%, NVDA -3.05%, etc.)  and into the old-line DIA names (CAT +3.91%, MMM +2.76%, GS +2.74%, CVX +2.59%, etc.). Clearly, the QQQ which has been the leader all year, and itself was led by the handful of mega-cap techs, was suddenly out of favor. This move was punctuated by QQQ posting heavy volume while SPY and DIA saw slightly less-than-average volumes for the day

In major economic news, April Exports fell to $249 billion (compared to the March value of $258.2 billion) while April Imports rose to $323.6 billion (versus the $318.8 billion in March).  However, the April Trade Balance (Deficit) was slightly less than had been expected at -$74.6 billion (compared to a forecast for $75.2 billion but well above the March reading of $60.6 billion).  Later, EIA Weekly Crude Oil Inventories diverged from what the API numbers had shown Tuesday night.  EIA reported oil inventories fell 0.451-million-barrels (versus a forecast calling for a build of 1.022-million-barrels and far lower than the prior week’s 4.488-million-barrel inventory build).  With that said, EIA also reported that Gasoline inventories grew more than expected at +2.746-million-barrels (compared to a forecast of +0.880-million-barrels) and Distillate (Heating Oil and Diesel) inventories grew much more than expected at +5.075-million-barrels (versus a forecast of 1.328-million-barrels).

SNAP Case Study | Actual Trade

In stock news, the Wall Street Journal reported Wednesday that AMZN is following NFLX lead and strongly considering an ad-supported tier for its Amazon Prime Video service.  The same report claimed WBD and PARA were in talks with AMZN to sell their streaming ad-based services through Prime Video.  At about the same time, Bloomberg reported that the world’s largest beef supplier (JBSAY) is currently building the largest lab-grown meat processing plant in the world in Spain.  (The plant will be able to supply 1,000 metric tons of lab-grown meat per year and is expected to be online in 2024.)  Later, Reuters reported the VOD is in the final stages of agreeing to a merger of UK operations with CK Hutchinson.  The agreement would create the largest mobile phone operator in Britain, with the combined company being 51% owned by VOD.  Elsewhere, VLVLY (Volvo) announced the launch of a fully-electric SUV which is scheduled for production later this year.  The EX30 will start at $38,500 (which is cheaper than the competitor TSLA Model 3 even after a series of recent TSLA price cuts).  Meanwhile, NKLA adjourned its shareholder meeting after management failed to get enough votes to support a proposal to issue more shares in order to raise money.  The meeting is planned to reconvene on July 6.  After the close, GME fired its CEO at the time of its quarterly report.  The same announcement named the current Board Chairman to replace the departing CEO Furlong.

In stock legal and regulatory news, BA was sued Wednesday for allegedly stealing trade secrets that they are using for NASA’s Space Launch System rocket.  Wilson Aerospace claims they worked in partnership with BA for two years before BA ended the partnership and continued the project without Wilson.  Elsewhere, after the close Wednesday, TEVA announced it has agreed to pay the state of Nevada $193 million to settle opioid claims against the drugmaker.  Nevada was the last state to settle with TEVA after 48 states previously settled for $4.35 billion.  Meanwhile, RYAAY reached a $5 million settlement with shareholders over a lawsuit accusing the company of defrauding investors by downplaying labor issues.  The CEO had claimed at a shareholder meeting that “hell would freeze over before he recognized a union,” but later offered to recognize a pilot’s union to avoid a possible strike in 2017.  After the close, Axios reported that FOX has notified attorneys for Tucker Carlson (FOX’s former top-drawing host) that he has breached his contract with the company when he launched a Twitter show Tuesday.  The suit has not been filed yet and Carlson’s lawyers claim any suit would violate Carlson’s first amendment rights.

After the close, TCOM reported beats on both the revenue and earnings lines.  At the same time, GME and GEF both reported misses on revenue while beating on earnings.  (While beating, GME earnings were still a loss, just a smaller loss than had been expected.)  It should be noted that GEF raised its forward guidance.  The largest surprises were a 72% upside earnings surprise by TCOM and a 35% upside earnings surprise by GEF.

Overnight, Asian markets were mixed again on mostly modest moves.  Thailand (+1.71%) was by far the largest gainer while Taiwan (-1.12%) and Japan (-0.85%) were by far the biggest losers with the rest of the region making move of less than a half of a percent either direction.  Meanwhile, in Europe, we see a picture with a bullish lean taking shape at midday.  Only two of the region’s bourses are modestly red.  At the same time, The CAC (+0.27%), DAX (+0.21%), and laggard FTSE (-0.06%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are now pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.08% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.04% open at this hour.  Over in the bond pits, the 10-year treasury yield is up to 3.809% and Oil (WTI) is up another two-thirds of a percent to $73.02 per barrel in early trade.

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims (8:30 am), Fed Balance Sheet and Bank Balances with the Fed (both at 4:30 pm).  The major earnings reports scheduled for the day include DBI, REVG, SIG, and TTC before the open.  The after the close, DOCU and MTN report. 

In economic news later this week, on Friday, the WASDE Ag Report comes out. Meanwhile, in terms of earnings reports on Friday, NIO reports.

In miscellaneous news, Treasury Sec. Yellen told CNBC Wednesday that she expects continued progress on bringing down inflation.  She also mentioned the strong labor market and that in the past we considered an Unemployment Rate with a “4” handle to be a very strong labor market.  However, an increase to 3.7% last month was seen by some as a recession warning sign.  When asked about the Fed eventually raising rates to 6%, she said, “Consumer spending has continued to grow in a pretty robust way, but you’re also seeing areas of the economy that are slowing down.”  She then went on to say her former colleagues at the Fed are very capable of making the right decisions but she thinks bringing down inflation is a “top priority.”  Elsewhere, a backlog of ships waiting to unload is building on the US West Coast.  Labor slowdowns by dockworkers have started to cause delays with six container ships waiting (behind schedule) at the Port of Los Angeles and two at Long Beach.  Meanwhile, vessel servicing time has increased at the Ports of Oakland and Seattle.  (Wait times are now 1.5 days while unloading time has risen to 2-5 days up and down the west coast.)  The National Retail Federation and National Assn. of Manufacturers have released public statements urging President Biden to intervene.  The White House has said it is closely monitoring the situation and have engaged with the parties.  (President Biden did intervene in a rail strike last year.)

So far this morning, SIG, REVG, and SKHSY have all reported beats on both the revenue and earnings lines.  Meanwhile, DBI missed on both the top and bottom lines.  (TTC reports at 8:30 am.)  It is worth noting that SIG and DBI both lowered their forward guidance while REVG raised its guidance.  The major surprises included a 94% upside earnings surprise from REVG (on more than 17% revenue upside surprise) and a 24% upside earnings surprise from SIG.

With that background, it looks like markets are undecided again this morning. The QQQ did move lower overnight but has recovered to essentially flat while the SPY and DIA have been trading in a tight range around their Wednesday closes in premarket action. Only the QQQ (after Wednesday’s big and uncharacteristic bearish move) is below its T-line (8ema). However, the QQQ is still far from breaking its uptrend line after months of rally. Overall, both of the large-cap index ETFs can best be described as in a tight consolidation all week, while the QQQ is in a pullback, at least so far. There is no over-extension from the T-line in any of the major indices. However, the T2122 indicator does say we are well into the overbought territory (meaning we need more rest or pullback). Since this is the case, and given all the indecisive action this week (outside of yesterday’s rotation out of high-tech), we need to be wary of intraday volatility and remain alert for more rotation or a change in trend.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets were indecisive Tuesday with DIA again being the laggard as it has been for months.  Essentially, things started the day flat as the SPY opened down 0.08%, DIA opened down 0.01%, and QQQ gapped down 0.17%.  From there, the SPY and QQQ immediately rallied until 10:55 am while DIA followed starting at about 10:10 am.  From that point, all three rode a low-magnitude rollercoaster the rest of the day with DIA at the lows at 2 pm before rallying back to flat at day end.  Meanwhile, SPY stayed more Bullish (closing near the highs) and QQQ ended up at the flat line as well after having seen more pronounced swings all day.  This action gave us indecisive candles in all three major indices.  The DIA printed a Doji, the QQQ printed a white-bodied Spinning Top, and the SPY printed a larger-body, white Spinning Top.  All three major indices remain above their T-line (8ema).  So, overall it was just another consolidation day as markets rested while traders make up their minds.

On the day, nine of the 10 sectors were in the green as Consumer Cyclical (+1.40%) and Financial Services (+1.31%) led the way higher and Consumer Defensive (-0.33%) was the laggard and only red sector.  At the same time, SPY gained 0.22%, DIA gained 0.01%, and QQQ lost 0.02%.  The VXX plummeted nearly 6% to end at 28.78 and T2122 jumped back up deep inside the overbought territory to 95.92. 10-year bond yields fell to end at 3.672% while Oil (WTI) also pulled back nearly 1% to end the day at $71.50 per barrel.  So, Tuesday was an indecisive day where the DIA was dragging markets down while SPY was dragging markets up most of the day while QQQ was the most volatile of the three.  However, at day end, only SPY managed to get past flat, and even that was less than a quarter-percent gain.  All this took place on below-average volume across the board with DIA coming closest to average (but coming up just a bit short).

In major economic news, the EIA Short-Term Energy Outlook stated that it expects US oil production to accelerate faster than previously anticipated while US oil demand will cool versus the prior outlooks.  Specifically, EIA expects US petroleum consumption to only rise 100k barrels to 20.4-million barrels per day (down from a 200k increase that was expected in the May forecast).  However, EIA also expects US oil production to increase 720k barrels per day to 12.61 million barrels per day.  The agency also expects that OPEC+ will continue their current production limits for each of the next five quarters.  Over that time, EIA predicts WTI Oil will average $74.60/barrel (a 1.3% increase over their forecast in May).  Elsewhere, the NY Fed released a study Tuesday that tells us that US supply chain pressures eased again in May.  The report notes that supply chain pressure is below average in all regions of the world.  Later, after the close, the API Weekly Crude Oil Stock report showed an unexpected 1.710-million-barrel drawdown (compared to an expected 1.500-million-barrel inventory build and far lower than the previous week’s 5.202-million-barrel inventory build)..

SNAP Case Study | Actual Trade

In stock news, the Biden Administration confirmed Tuesday that after adjusting its supply chain, TSLA Model 3 cars now qualify for the full $7,500 tax credit.  At the same time, less than a day after announcing it will launch its own AR Headset in 2024, AAPL announced it has acquired an AR headset startup named Mira.  (Mira has AR contracts with the US Air Force and Navy.)  STLA has begun considering a new offer from the Canadian federal and Ontario province governments.  The governments are trying to get STLA and Korean firm LG Energy Solutions to resume construction on the $3.7 billion battery factory, which was halted on May 15 when STLA decide it had not been treated fairly compared to a similar project (deal) that had been put in place after the original STLA deal was inked.  After the close, Beneficient (an alternative asset liquidity provider) is completing a SPAC merger with Avalon Acquisition Company and will begin trading under the BENF ticker sometime this week.  At the same time, BA announced that it will delay deliveries of 787 aircraft again due to the discovery of “flawed parts.”  The problem will impact 90 already-built 787 planes.  No estimate was offered for the resumption of deliveries. Finally, TRP (Canadian) announced it will be cutting an unspecified number of jobs.

In stock legal and regulatory news, the NHTSA announced that F is recalling 125,000 2020-2023 SUVs related to engine failures that can cause fires.  Elsewhere, the DE Supreme Court ruled that a lower court had properly found that TSLA had not been unduly influenced to buy SolarCity (another Elon Musk company) at an inflated price.  Late the Fed, FDIC, and Office of the Comptroller of the Currency issued a joint statement that banks have now been provided final guidance on how to manage risks associated with third-party relationships (such as with fintech and cloud-computing firms).  Meanwhile, Reuters reported that the EPA will scrap a previously proposed plan to include the EV industry in the US biofuel blending program.  The agency will also rescind billions of dollars in tradable credits that had been associated with the plan.  This plan had been backed by companies like TSLA but was opposed by the biofuel producers like DINO, MPC, and ADM.  After the close, MRK sued the US government, seeking to halt Medicare drug price negotiations, despite the US paying more for the drugs in question than any other country.  (Multiple legal analysts told Reuters that the MRK case on constitutional claims is weak and unlikely to succeed.)

After the close, PLAY missed on revenue while beating on earnings.  Unfortunately, CASY missed on both the top and bottom lines.  Neither company posted a guidance change or a major report surprise.

Overnight, Asian markets were mixed.  Japan (-1.82%), New Zealand (-0.88%), and Shenzhen (-0.60%) paced the losses.  Meanwhile, Taiwan (+0.96%), Hong Kong (+0.80%), and India (+0.68%) led the gainers.  In Europe, a similar story is taking shape at midday.  The CAC (-0.04%), DAX (-0.02%), and FTSE (+0.12%) are the smallest movers but lead on volume as always.  Norway (+1.18%) is the biggest gainer and the FTSE MIB (-0.45%) the biggest loser in early afternoon trade.  In the US, as of 7:30 am, Futures are looking for another flat start to the day.  The DIA implies a -0.05% open, the SPY is implying a +0.05% open, and the QQQ implies a -0.01% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.681% and Oil (WTI) is up just more than 1% to $72.52 per barrel in early trading.

The major economic news events scheduled for Wednesday is limited to April Imports, April Exports, and April Trade Balance (all three at 8:30 am), and EIA Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day are limited to BF.A, CPB, OLLI, and UNFI before the open.  The after the close, GME, GEF, and TCOM report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, the WASDE Ag Report comes out.    

In terms of earnings reports later this week, on Thursday, we hear from DBI, REVG, SIG, TTC, DOCU, and MTN.  Finally, on Friday, NIO reports.

In miscellaneous news, after a House conservative defection yesterday (protesting the deal did not cut enough) several Senators (including multiple GOP) called for supplemental spending bills for military and Ukrainian aid.  However, despite his frustration with his party’s conservatives, House Speaker McCarthy said that he has “no immediate plans” (to take up legislation to boost defense spending beyond last week’s deal).  As a side note, US funding for Ukraine will expire on September 30 (fiscal year end).  In a somewhat related story, more evidence of the Russians blowing the hydroelectric dam yesterday was found in the fact that they dramatically increased the volume of the lake behind the dam (by closing the spillways) in the 30 days prior to yesterday’s explosion.  And, of course, they had mined the dam as a threat to prevent a Ukrainian counter-attack across the dam after invading the location a year ago. This morning, the Mortgage Bankers Assn. reported that loan applications fell last week. New purchase mortgage applications fell 1.4% and refinance applications fell 1%. This comes with a background of mortgage rates for a 30-year, conforming (20% down), fixed-rate loan falling from 6.91% to 6.81%. (It is worth noting that this is still the second-highest weekly average rate so far in 2023.)

So far this morning, OLLI beat on both the revenue and earnings lines.  Meanwhile, CPB missed on revenue while beating on earnings.  Unfortunately, UNFI missed on both the top and bottom lines.  (BF.A reports later before the open.)  Of those, only UNFI has changed guidance, lowering its outlook.  There were also no major surprises from this group.

With that background, it looks like the SPY and QQQ are at their premarket highs at the moment while DIA is near its premarket lows. However, overall, the three major index ETFs are little moved from Tuesday’s close. None of them are trying to retest their T-line (8ema) at least yet this morning. The Bullish trend remains in place. In terms of over-extension, the T-line has made up ground on all three of the indices. So, only the QQQ could be said to be extended above the T-line (and you need to squint a bit to say even that this morning). Yet, the T2122 does say we are well into the overbought territory (meaning we need more rest or pullback). Since this is the case, more consolidation or pullback may be in order, but we also have a little room left to run for the bulls and plenty of room for the bears if one group gets some energy. As mentioned above, even on small-body indecisive days like Monday, intraday volatility and chop have been the norm. So, again, remain alert.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Monday was an interesting day, both dead and volatile at different times driven by the news that the Fed may raise bank capital requirements on one hand and AAPL product announcements on the other.  The SPY opened flat (up 0.06%), DIA opened up 0.05%, and QQQ opened down 0.05%. Then, markets diverged as the DIA sold off until 11:30 am before rallying slowly and steadily until 1 pm followed by another selloff that went all the way into the close (on the lows).  At the same time, SPY chopped around until 10:30 am before starting a slow, steady rally that reached the highs of the day at about 1:10 pm.  From there SPY saw stronger selling to reach the lows of the day at 3:10 pm before grinding slightly bullish into the close.  Meanwhile, QQQ rallied all morning (in a more volatile wave) reaching the high of the day at about 1:10 pm.  From there it too sold off even more sharply with large black candles at 2:35 pm and 3:05 pm before rallying back up off the lows in the last hour of the day.  This action gave us a white-bodied Shooting Star type candle in the QQQ, a black-bodied Spinning Top type candle (with a larger upper wick) in the SPY, and a Bear Harami candle in the upper third of Friday’s candle in the DIA.

All three major indices remain above their T-line (8ema).  On the day, seven of the 10 sectors were in the red as Industrials (-0.88%) led the way lower, and Communication Services (+0.44%) held up better than other sectors. At the same time, DIA lost 0.57%, SPY lost 0.19%, and QQQ gained 0.07%.  VXX fall 1.83% to end at 30.61 and T2122 fell back just outside the overbought territory at 76.00. 10-year bond yields fell all day (after being up big early) to end at 3.685% while Oil (WTI) also pulled back after very early day gains to end the day flat at $71.86 per barrel.  So, again, Monday was a Dr. Jekyll – Mr. Hyde day where there were periods of dead action, periods of slow and steady trend, intraday reversals, and also 5-minute periods of extreme move in the QQQ.  However, taken from a higher-level view, it was just an indecisive day. All this took place on just below-average volume in the QQQ, just above-average volume in the DIA, and significantly lower-than-average volume in the SPY.

In major economic news, the May S&P Global Composite PMI came in a bit lower than expected at 54.3 (compared to a forecast of 54.5 but still above the April reading of 53.4).  At the same time, the May Services PMI also came in a bit lower than expected at 54.9 (versus a forecast of 55.1 but above the April value of 53.6).  A few minutes later, April Factory Orders were reported well below what was anticipated at +0.4% (compared to a forecast of +1.1% and even below the March reading of +0.6%).  The May ISM Non-Mfg. Employment was also a bit low at 49.2 (versus the forecast of 51.0 and even below the April value of 50.8).  Finally, the May ISM Non-Mfg. PMI was also below expectations at 50.3 (compared to a 51.8 forecast and the April reading of 51.9).  So, overall, we saw several moderately worse-than-expected economic data point on the day.  However, at the same time, all the PMI readings above 50.0 signal economic expansion.  By themselves, they mean little.  The question is whether this data shows enough slowing to influence Fed opinions.

SNAP Case Study | Actual Trade

In stock news, on Monday, UNH made an unexpected $3.26 billion all-cash offer to buy AMED. This news saw AMED gap 13% higher and follow-through to close at the highs, up 15.44% ($91.74).  At the same time, UBS also announced it expects to close its CS takeover by June 12.  Elsewhere in the Finance space, Canadian insurer Fairfax Financial Holdings has agreed to buy 63 real estate construction loans from KW for $2.1 billion.  (This is notable because KW acquired those loans plus 11 others from PACW during the regional bank scare.  KW had paid $2.4 billion which was a $200 million discount.  As part of the deal, Fairfax also gets a $200 million equity position in KW.)  In the auto space, GM said Monday that it will invest more than $1 billion to upgrade internal-combustion pickup truck production capacity at two Flint, MI plants.  In the tech space, AAPL gapped and ran higher (up 2.2% at a point) to an all-time high ahead of its Developer Conference (product announcements). However, markets then sold the news as AAPL went on a bearish tear in the afternoon to close down 0.76%.  Meanwhile, BX announced it has agreed to buy a San Antonio Texas resort from RHP for $800 million.

In stock legal and regulatory news, a US judge has postponed the start of a trial between the city of Stuart FL, and MMM over “forever chemicals” in the city water supply.  This was because the parties said they were nearing a settlement.  The suit had sought more than $100 million in filtration and remediation damages.  Meanwhile, the NHTSA announced that TSLA has agreed to voluntarily recall a small number (a couple hundred) Model Y cars over a safety concern related to a loose fastener on the steering wheel (which could detach completely).  While this was a tiny recall, TSLA Model Y vehicles have had reports of detached steering wheels globally dating back to May 2020 and TLSA said only 105 of its Model Ys could be affected.  Elsewhere, the state of TX won the latest round of its antitrust lawsuit against GOOGL as the case was ordered returned to a federal court in TX on Monday.  (GOOGL had been fighting to have the case moved to NY.)   After the close, NSC filed to ask a US judge to throw out a class action lawsuit brought on behalf of the 500,000 area residents impacted by the toxic chemical spill resulting from the train derailment in East Palestine OH.

After the close, JOAN reported misses on both the revenue and earnings lines.  The earnings miss was a 59% downside surprise.

Overnight, Asian markets were mixed but leaned to the red side.  Shenzhen (-1.58%), Australia (-1.20%), and Shanghai (-1.15%) paced the losses.  Meanwhile, Japan (+0.90%), South Korea (+0.54%), and Taiwan (+0.28%) led the gainers.  In Europe, we see the same picture taking shape at midday with only four (of 15) bourses in the green.  Greece (+1.56%) is by far the biggest gainer while Russia (-1.88%) is by far the biggest loser.  However, as always, the CAC (-0.27%), DAX (-0.16%), and FTSE (-0.29%) lead the region (this time lower) in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a very modest red start to the day.  The DIA implies a -0.08% open, the SPY is implying a -0.06% open, and the QQQ implies a -0.05% open at this hour.  At the same time, 10-year bonds are down to 3.674% and Oil (WTI) is down nearly 2.34% to $70.46 per barrel in early trading.

The major economic news events scheduled for Tuesday are limited to EIA Short-term Energy Outlook (noon) and API Weekly Crude Oil Stocks Report (4:30 pm).  The major earnings reports scheduled for the day are limited to ABM, ASO, CHS, SIEN, CNM, CBRL, FERG, GIII, SJM, and THO before the open.  The after the close, CASY and PLAY report. 

In economic news later this week, on Wednesday, April Imports/Exports, April Trade Balance, and EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, the WASDE Ag Report comes out.   

In terms of earnings reports later this week, on Wednesday, BF.A, CPB, OLLI, UNFI, GME, GEF, and TCOM report.  On Thursday, we hear from DBI, REVG, SIG, TTC, DOCU, and MTN.  Finally, on Friday, NIO reports.

In miscellaneous news, at its Global Developer Conference, as expected, AAPL announced a new “mixed-reality” headset (for a paltry $3,500 which is about three times the price of the current top-end brands) which will not be launched until sometime in 2024.  At the same time, AAPL announced that the last of its computers will move away from INTC chips to “its own chips” (produced by TSM using the Arm architecture).  In addition, AAPL announced a new iOS 17 for the next generation of iPhones to be announced/offered later this year.  Elsewhere, in Ukraine overnight Russia blew up a dam on the massive Dnipro River, unleashing about 5 billion gallons of water toward 80-100 villages.  While crop production should not be impacted in a huge way, global Wheat prices jumped 3% on the news.  (Obviously, the more important issue for Russia was the terroristic destruction of Ukrainian electric infrastructure (hydro-electric plant), and flooding delaying and encumbering a Ukrainian counter-offensive in the South of the country. Finally, China asked its biggest banks to lower deposit rates again overnight. Theoretically, this would drive more consumer spending and/or possibly support more lending (or at least free up some bank money to cover bad loans). Obviously, the overall goal is to stoke the Chinese economy and help its floundering real estate sector.

So far this morning, FERG, THO, SJM, CIEN, and GIII have all reported beats on both the revenue and earnings lines.  Meanwhile, ABM, CNM, and CHS all missed on revenue while beating on earnings.  (CBRL and ASO report closer to the open.)  There have been no announced guidance changes.  It is worth noting that major surprises came from GIII (a 244% upside earnings surprise) and THO (a 98% upside earnings surprise).  However, even though both were major upside surprises, both were also down sequentially from the prior quarter’s earnings.

With that background, it looks like markets are looking to consolidate a bit more with small, black-body candles just below the prior close in the premarket. However, none of the three major index ETFs appear to be headed to a retest of their T-line (8ema) today, at least at this point. So, the bullish trend remains intact as of now. In terms of over-extension, only the QQQ is extended from (above) its T-line and the T2122 has also dropped back (just) outside of the overbought territory. So, more consolidation or pullback may be in order, but technically we have a little room left to run before we are truly over-extended. As mentioned above, even on small-body indecisive days like Monday, intraday volatility and chop have been the norm. So, again remain alert.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was the Bulls’ Day. It may have been the Debt Ceiling bill passing, a Bullish take on economic data, or just traders being happy that it was Friday.  Whatever the cause, the bulls ruled markets on the day.  This started with a gap higher (up 0.63% in the SPY, up 0.65% in the DIA, and up 0.53% in the QQQ).  This was followed up by a strong rally in the first minutes of the session and then the only tiny bearish wobble of the whole day.  Still, by 10:05 am, the Bulls were running again.  For the QQQ, the run ended shortly after 11 am before a sideways grind in a tight range took over for the rest of the session.  SPY ran up until 11:30 am before grinding sideways with a slightly bullish trend the rest of the day.  DIA led the way for once, continuing its rally until about 2:45 pm before grinding sideways the rest of the way into the close.  This action gave up large white candles with tiny wicks in the DIA and SPY while the QQQ printed a gap-up, white-bodied, Spinning Top candle.  If you had seen Thursday’s candle as having completed a Morning Star signal, Friday was definitely bullish follow-through.s.

All three major indices are back above their T-line (8ema) and DIA broke strongly up through its 50sma.  On the day, nine of the 10 sectors were in the green with Basic Materials (+3.44%), Industrials (+3.15%), and Energy (+3.14%) out in front pulling the rest of the market higher.  Meanwhile, Communications Services (-1.16%) was the only sector in the red on a terrible day for TMUS, T, and VZ.  At the same time, SPY gained 1.45%, QQQ gained 0.75%, and DIA gained 2.15%.  VXX plummeted another 4% to end at 31.18 and T2122 shot up deep into the overbought territory at 96.46. 10-year bond yields rose sharply to 3.698% while Oil (WTI) jumped another 2.52% to end the day at $71.87 per barrel.  So, again, Friday was no day to be a short and no fun at all for the bears.  This all happened on average volume in the SPY and QQQ while DIA had significantly heavier-than-average volume.

In major economic news, the May Nonfarm Payrolls came in smoking hot at +339k (compared to a forecast of +180k and an April reading of +294k). May Private Nonfarm Payrolls were hot also at +283k (versus +160k forecasted and just a little hotter than April’s +253k value).  So, again, our economy continues to produce a lot of jobs…much more than expected.  The May Participation Rate remained the same at 62.6% (which is slightly higher that the predicted fall to 62.5%).  However, the “odd man out” among this data was the May Unemployment Rate, which jumped up to 3.7% (compared to a forecast of 3.5% and the April reading of 3.4%).  That discrepancy given all the newly created jobs leads me to suspect perhaps some seasonal (or other) adjustments are at least partly to blame for the significant rise in unemployment.

SNAP Case Study | Actual Trade

There will be no Fed speak between now and the June 14 announcement.  The Fed entered into its pre-meeting “blackout period” on Friday.  However, in other economic speak Friday, JPM President Pinto (Jamie Dimon’s #2) told investors loan demand is declining even as regional banks are also tightening credit requirements.  He said, “There is no doubt that regional banks and smaller banks … are lending a bit less … I don’t think that the big banks have really changed their lending standards, there is not a huge amount of loan demand in the first place.” 

In stock news, early Friday Bloomberg reported that AMZN is in talks to offer its own wireless service for Prime members.  This caused dramatic falls in stock prices for T, TMU, and VZ.  (The telcos denied that have any talks with AMZN later in the day.)  Then, mid-morning, Reuters reported that the Debt Ceiling agreement “stranded” $16 billion in low-priority Defense spending that has usually always been added to “must pass” bills at the last second.  (Despite this, Congress still raised the Defense budget $80 billion more than the President requested, a trend that has been the norm each year for several years.)  The $16 billion “lost” would have funded tanks from GD, a plane from LMT, and a small ship from HII.  Elsewhere, CBOE announced that it is expanding into allowing cross-listing (US and international listings) which will make it a direct competitor of ICE and Nasdaq.  At the same time, SU told its employees it plans to cut 1,500 jobs (from a base of 16,550) by the end of the year.  In a similar vein, TSN announced its terminating (262 of 500) corporate staff (including key executives) located in South Dakota who chose not to relocate to Arkansas.  Later, GM and PKX announced they are expanding their chemical battery partnership adding another $1 billion to expand capacity at their Canadian plant.  Meanwhile, in another blow to truth, GOOGL said Friday afternoon that its YouTube unit will stop removing content that spreads falsehoods and lies about past US Presidential elections.  For GOOGL, the important aspect is there were rumblings from advertisers over the weekend as a result of the action.  The fear for GOOGL is another mass desertion by advertisers, similar to what was experienced by Twitter when Musk decided to go “free for all” on misinformation.

In stock legal and regulatory news, the NHTSA fined STLA and GM a combined 363 million on Friday for average fuel economy violations.  Friday morning, CC, DD, and CTVA a $1.185 billion settlement agreement with the water systems that serve the vast majority of US citizens related to “forever chemicals” that got into drinking water.  This avoids a federal trial that was set to begin today.  Later, Bloomberg reported sources told them that MMM had reached a tentative $10 billion settlement over the same issue with the same entities.  (However, the MMM settlement has not been confirmed by the two sides publicly.)  Elsewhere, a US District judge in Seattle approved a $415 million settlement of a class action lawsuit involving IGT and an unlisted co-defendant.  At the same time, a District of Columbia judge dismissed a 2018 lawsuit brought against META by the Washington DC government (which had claimed the company misled users over the Cambridge Analytica scandal).  Later Friday, a judge in MA threw out motions that had been filed by F, GM, TM, etc. in an attempt to prevent a law from taking effect which forces automakers to allow “right to repair” access to all auto data needed to repair vehicles.  (In other words, prohibiting automakers from forcing repairs and parts to only come from the automakers.)

Overnight, Asian markets were mostly green.  Japan (+2.20%), Australia (+1.00%), and Hong Kong (+0.84%) led the winners.  Meanwhile, the only three exchanges in the red were Shenzhen (-0.47%), New Zealand (-0.30%), and Malaysia (-0.13%).  In Europe, we see a very similar picture taking shape at midday with only two spots of red on the board.  The CAC (-0.07%), DAX (+0.17%), and FTSE (+0.55%) are leading the way in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed, flat start to the day.  The DIA implies a +0.09% open, the SPY is implying a +0.07% open, and the QQQ implies a -0.10% open at this hour.  At the same time, 10-year bonds are spiking higher at 3.751% and Oil (WTI) is up just over 2% to $73.18 per barrel in early trading. 

The major economic news events scheduled for Monday include May S&P Global Composite PMI and May Services PMI (both at 9:45 am), April Factory Orders and May ISM PMI (both at 10 am).  The major earnings reports scheduled for the day are limited to SAIC before the opening bell and JOAN after the close.  

In economic news later this week, on Tuesday we get EIA Short-term Energy Outlook and API Weekly Crude Oil Stocks Report.  Then Wednesday, April Imports/Exports, April Trade Balance, and EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, the WASDE Ag Report comes out.   

In terms of earnings reports later this week, on Tuesday we hear from ABM, ASO, CHS, SIEN, CNM, CBRL, FERG, GIII, SJM, THO, CASY, and PLAY.  Then Wednesday, BF.A, CPB, OLLI, UNFI, GME, GEF, and TCOM report.  On Thursday, we hear from DBI, REVG, SIG, TTC, DOCU, and MTN.  Finally, on Friday, NIO reports.

In miscellaneous news, analyst firm Refinitiv said Friday that much stronger than expected recent earnings (covering 494 of the S&P 500) have led it to raise its estimate of Q1 earnings to flat versus the same quarter of 2022.  This is after the firm had forecast a 5.1% drop in earnings for the quarter as late as the start of April.  On Sunday, OPEC+ decided to stay with their current production levels with the Russian delegate telling the press that the level will be extended through 2024 (they were to expire at the end of 2023).  However, Saudi Arabia announced it will implement an additional voluntary, one-month reduction of 1 million barrels per day in July (which it could voluntarily extend for additional months). Finally, the Wall Street Journal reported early today that large banks may face a 20% increase in required capital holdings as early as this month. The report said this would only impact banks with more than $100 billion in assets (lowering that definition threshold from $250 billion in assets). This would cause significant changes to lending standards and investment approaches, which might act as a “rate hike by other means.”

So far this morning, SAIC was the only report and it beat on both the revenue and earnings lines.  The company also raised forward guidance.

With that background, it looks like the market is undecided early this Monday morning. All three major index ETFs are above their T-line (8ema) and sitting at Friday’s strong closing level. All three could be seen as sitting not far below, just above, or at a potential resistance level. All three could also be seen as a bit extended above their T-lines, with QQQ (market leader) being the most extended. T2122 also tells us the market is deep in the overbought territory. So, keep your eye open for consolidation or pullback. As usual, intraday volatility and daily-level chop have been the norm…again be aware. Lastly, AAPL is expected to announce new products and product lines mid-day today. Frankly, I don’t think much of the market potential of augmented reality glasses (GOOGL tried and failed and META has been desperately and not very successfully trying to sell the same thing for years). Then again, I never thought AAPL’s phone would take the world by storm either all those years ago. So, just be aware and see if AAPL can fire up the QQQ and SPY.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened just on the green side of flat (up 0.06% in the SPY, down 0.15% in the DIA, and up 0.01% in the QQQ).  DIA then sold off for the first 30 minutes while the SPY and QQQ chopped sideways.  However, at 10 am, all three major indices started strong rallies that lasted until 12:30 pm before grinding sideways with a much lesser Bullish trend until 2:30 pm.  Then we saw another, shorter, strong rally before we saw strong profit taking the last 40 minutes of the day in all three.  This action gave us large white candles with wicks on both ends in the SPY and QQQ.  The DIA was more of a white-bodied Spinning Top candle that closed right at its T-line.  All three major index ETFs could be called Morning Star signals if you squint or are liberal with signal definitions.

On the day, nine of the 10 sectors were in the green with Basic Materials (+2.02%) and Energy (+1.96%) out in front pulling the rest of the market higher while Utilities (-0.36%) was the only sector in the red. At the same time, SPY gained 0.95%, QQQ gained 1.16%, and DIA gained 0.43%.  VXX plummeted 5.72% on the day to end at 32.49 and T2122 shot back up into the mid-range at 60.26. 10-year bond yields fell sharply to 3.601% while Oil (WTI) jumped 2.83% to end the day at $70.03 per barrel.  So, Thursday was the Bulls’ Day as optimism over the Debt Ceiling bill passage spread and economic data painted a picture that could be spun as bullish.  This all happened on average volume in the SPY and DIA while QQQ had less-than-average volume.  

In major economic news, the May ADP Nonfarm Employment Change saw a much higher than expected +278k jobs (compared to a forecast of +170k but still less than April’s +291k).  Shortly afterward, the Weekly Initial Jobless Claims came in just below the anticipated level at 232k (versus the forecast of 235k but slightly above the prior week’s 230k).  At the same time, Q1 Nonfarm Productivity (quarter-on-quarter) was not nearly as bad as feared at -2.1% (compared to the forecast of -2.7% but still much worse than the Q4 +1.7%).  Q1 (quarter-on-quarter) Unit Labor Costs were up but again far better than feared at +4.2% (versus a forecast of +6.3% while still a full percent higher than the Q4 number of +3.2%). All of the above tells us businesses are continuing to hire briskly and layoffs are slightly better than expected.  Meanwhile, the “wage inflation pressure” is falling sharply without as much loss in productivity as feared.  Later in the morning, May Manufacturing PMI was reported just shy of the anticipated level at 48.4 (compared to the 48.5 forecast but still lower than the April 50.2 reading).  Next the ISM May Mfg. PMI also came in just shy of expectations at 46.9 (versus the forecast of 47.0 and not far below the April value of 47.1).  At the same time, the May ISM Mfg. Price Index came in well below projections at 44.2 (compared to a forecast of 52.0 and far below the April 53.2 value).  Finally, EIA Weekly Crude Oil Inventories showed an unexpected build of 4.488 million barrels (versus a forecasted drawdown of 1.101-million-barrels and drastically different from the prior week’s 12.456-million-barrel drawdown).  All-in-all, we saw several pieces of news that can be read as decreasing inflationary pressures, while businesses continue to hire briskly and Manufacturing is not falling off a cliff.

SNAP Case Study | Actual Trade

In Fed talk, Philly Fed President Harker spoke again Thursday.  He went even further than he had on Wednesday, telling the National Assn. for Business Economics, “It’s time to at least hit the stop button for one meeting and see how it goes,”.  Harker went on to say he sees promising signs that the Fed’s previous hikes are having a cooling effect, particularly on housing prices.  At the same time, he said uncertainty over inflation dynamics and the pace of credit tightening make him wary of continuing to raise rates until after the Fed’s prior hikes have been given more time to work.  Finally, he said he expects inflation to fall to 3.5% this year, expects GDP to grow about 1%, and sees unemployment growing to 4.4% by year end. 

In debt ceiling news, the Penn University Wharton school Budget Model Research Group said Thursday that the Republican claimed $1.3 trillion in spending cuts (over 10 years) may mostly evaporate.  Since no deal is binding on a future Congress, the Wharton group expects the same situation that happened after the 2011 debt ceiling deal when Congress simply increased spending again once the next election passed.  The study expects $1 trillion of the $1.3 trillion in cuts to simply evaporate after the 2024 election.  Elsewhere, Senate Majority Leader Schumer announced the Senate will stay in session this weekend until the debt ceiling increase is passed.  Both Schumer and Minority Leader McConnell vowed to do all they could to speed the bill to passage and onto the President’s desk.  However, several GOP Senators are pushing to have amendments allowed.  For example, the Republican caucus expected to offer several defense-related amendments alone.  GOP Senator Graham also threatened to tie up the bill “until Tuesday” (default) if he doesn’t get a guarantee a supplemental Defense Spending bill to follow. At the same time, GOP Senator Paul also threatened to stall the bill into default unless he can add an amendment calling for more spending cuts.  Democrats were not immune to the amendment desire either as Senator Kaine introduced one that removes approval for a Nat. Gas Pipeline across his state.  The odd Senate rules allow would also be problematic.  While it takes 60 votes to pass the bill, amendments can be added with only 50 votes.  Of course, any amendment at all would mean a passed bill would need to go back to the House for another vote before it can head to President Biden for signature.  At the end of the day, leaders Schumer and McConnell got tough with their caucuses because A) there was no time to screw around and go back to the House, and B) the Senate never works on Fridays or Weekends.  So, the bill passed unamended late last night on another bi-partisan vote of 63-36.

In stock news, on Thursday, GS warned that its trading revenue could fall 25% this quarter.  This echoes JPM’s May announcement it expects trading revenue to be down 15% for the quarter and the Wednesday MS warning that trading results will be “notably down.”  In a related story, the CEO of BAC announced that he expects trading revenue and investment banking fees to be roughly flat in Q2.  Elsewhere, META announced a new “mixed reality” headset for $499 ahead of AAPL’s expected unveiling of a headset next week.  At the same time, CNBC reported that MSFT has signed a deal to spend billions of dollars over multiple years with startup CoreWeave in order to provide infrastructure for the inclusion of ChatGPT in MSFT products.  Meanwhile, the CEO of LUV said late Thursday that he expects the industry-wide pilot shortage to last for three years. (LUV currently has 40 planes sitting idle because of the shortage while AAL has said they have 50 mainline jets and 150 regional planes idled by a lack of pilots.)  After the close, BA announced it is “standing down” (canceling) plans for a manned test flight into space of the company’s Starliner rocket.  The flight had been scheduled for July.  Also after the close, Reuters reported that NKLA is planning a reverse stock split in order to come into compliance with the Nasdaq requirement that shares be valued over $1.

In stock legal and regulatory news, the US Supreme Court ruled 9-0 in favor of WORK (a “direct listing” of CRM) throwing out a lower court decision and ordering the 9^th US Circuit Court of Appeals to reconsider the investor class action case over alleged fraudulent prospectus that had been filed against the company.  Elsewhere, GPS has settled (under undisclosed terms) a lawsuit filed by Patagonia Inc. claiming GPS had illegally copied a pocket design.  At the same time, EU Antitrust regulators announced they will decide by July 6 whether to clear the $1.7 billion AMZN acquisition of IRBT.  Back on this side of the pond, the US Medicare health plan announced it will limit reimbursement for Alzheimer’s drugs from ESAIY and BIIB to only cases where it was prescribed by doctors in the agency’s database.  (This will hinder drug sales to Medicare users.)  Meanwhile, the US Supreme Court dealt a blow to unions when it ruled 8-1 to make it easier for employers to sue over strikes that cause property damage.  (A concrete company’s union drivers went on strike while trucks were filled with concrete.  The concrete hardened and caused the company major expenses to remove the cement from the trucks and, of course, the loss of the concrete itself.)  In other news, F filed suit against Blue Cross Blue Shield, accusing the insurer of a price-fixing conspiracy that artificially inflated the automaker’s health insurance costs to cover its employees.

After the close, DELL, AVGO, LULU, and COO all reported beats on both the revenue and earnings lines.  Meanwhile, FIVE missed on revenue while beating on earnings.  Unfortunately, VMW missed on both the top and bottom lines.  It is worth noting that both AVGO and LULU raised their forward guidance.  The only major surprise was a 52% upside earnings shock from DELL (although it was still a 32% earnings decline).

Overnight, Asian markets were mostly (and in some cases strongly) green.  Hong Kong (+4.02%) was way out front, but Shenzhen (+1.50%), South Korea (+1.25%), Japan (+1.21%), and Taiwan (+1.18%) also dragged the rest of the region higher.  In Europe, we see a similar picture taking shape with only Russia (-0.48%) in the red at midday.  The CAC (+1.30%), DAX (+1.20%), and FTSE (+0.91%) lead on volumes as always but some of the smaller bourses have moved even more in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.56% open, the SPY is implying a +0.53% open, and the QQQ implies a +0.53% open on elation that the US will not default (which would have crashed the global economy).  At the same time, 10-year bond yields are slightly higher at 3.608% and Oil (WTI) is up 1.70% to $71.27 per barrel in early trading.

The major economic news events scheduled for Friday include May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 am).  There are no major earnings reports scheduled for the day, either before the open or after the close.   

In miscellaneous news, the Fed reported after the close Thursday that Bank borrowing from its emergency lending programs fell again this week to $285.7 billion (from $288.7 billion the week prior.  This was also far below the peak of $343.7 billion borrowed the week of the SIVB collapse in March.  This decrease also helped the Fed’s Balance Sheet to decline $51 billion to $8.349 trillion last week.  Elsewhere, CNBC reports that early this morning WMT announced it is switching its e-commerce and customer pickup packaging to replace plastics with recyclable paper mailers and boxes.  At the same time, Bloomberg reports that major financial sector names are in a “talent arms race” where JPM is leading big banks in hiring AI-related talent (but most of the other usual suspects in that group are wearing out horses to catch up) and major hedge funds are spending millions of dollars in signing bonuses and offering larger cuts of trading profits to hire and retain top trading talent.

With that background, it looks like the Bulls are breaking all three major index ETFs up out of their recent trading ranges. The DIA is trading back above its T-line and arguing with a potential resistance level as is the QQQ at this hour, while SPY has a little more room to run before it contends with a potential level at highs not seen since mid-August of last year. However, there is some volatility in premarket action. Remember that traders are thrilled that default is off the table but there is still a lot of data coming at 8:30 am that may change the market outlook. So, traders remain apprehensive. Not that it matters this morning but SPY and DIA have no T-line extension problem as of now while the premarket move has QQQ getting a bit extended again. On the T2122 front, that indicator tells us we are in mid-range and have plenty of room to run (in either direction). Be prepared for volatility and remember that it’s Friday. So, pay yourself (take profits), move stops, and hedge yourself for the weekend. With all that said, the Bulls have the whip hand so far this morning.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Wednesday started off with a Bearish gap (down 0.45% in the SPY, down 0.30% in the DIA, and down 0.48% in the QQQ).  The two large-cap index ETFs continued lower for the first hour, reaching the lows of the day at about 10:30 am before grinding sideways until about 1 pm.  At that point, the bulls led a rally back up to the opening level by 2 pm and then another sideways chop into the close.  Meanwhile, QQQ rallied the first 30 minutes of the day, fading the opening gap before the Bears stepped back in at 10 am.  The tech-heavy NASDAQ reached the lows of the day at about 11:30 am and then also ground sideways until 1 pm before rallying back to the opening level at about 1:35 pm. From there, we saw a much wavier sideways action all the way into the close.  This action gave us gap-down Doji candles in all three major indices.  The QQQ is still well above its T-line (8ema), while the SPY retested its T-line (from above) and held on the day.  The DIA retested its own T-line from below and remained below that level.. 

On the day, seven of the 10 sectors were in the red with Energy (-1.78%) way out in front pulling the rest of the market lower while Utilities (+0.72%) and Healthcare (+0.67%) held up better than the other sectors. At the same time, SPY lost 0.68%, QQQ lost 0.57%, and DIA lost 0.30%.  VXX fell 0.78% on the day to end at 34.46 and T2122 fell just into the oversold territory at 17.77. 10-year bond yields fell again to 3.645% while Oil (WTI) plummeted another 2% to end the day at $68.02 per barrel.  So, Wednesday was a bearish day as markets seemed to fear that the House won’t get the Debt Ceiling bill passed and that might give MAGA Senators the ability to stall the deal in the Senate past the deadline causing a debt default.  However, as the day progressed, House Democrats helped Speaker McCarthy get the bill to a floor vote last night.  So, traders were left unsure and that gave us an indecisive day on the Bearish side of neutral.  This all happened on average volume across the three major indices.  

In major economic news Wednesday, the May Chicago PMI came in well below what was expected at 40.4 (compared to a forecast of 47.0 and the April reading of 48.6).  This was the worst reading in six months and indicates there is a contraction in the Manufacturing sector in the Chicago region.  Later, the April JOLTs Job Openings number was higher than anticipated at 10.103 million (versus a forecast of 9.775 million and a March value of 9.745 million).  The new openings came mostly in Retail, Healthcare, Transportation, and Warehousing.  After the close, the API Weekly Crude Oil Stock Report showed a significant unexpected inventory build of 5.202-million-barrels (compared to a forecast of a drawdown of 1.220-million-barrels and a vast swing from the previous week’s 6.799-million-barrel drawdown).

SNAP Case Study | Actual Trade

In Fed speak, early Wednesday Cleveland Fed President Mester (hawk, not a voter) told the Financial Times that (in her estimation) the FOMC does not have a “compelling reason” to pause on its interest rate hikes at the upcoming June Meeting.  A bit later, Fed Governor Bowman (hawk and voter) told a Boston audience that she thinks the rebounding residential housing market could impact how the Fed acts next in the inflation fight.  She said the Fed has been waiting on falling rents to have an impact on headline inflation numbers, but real estate prices have been rising.  However, she said that now home prices have been “leveling out recently, which has implications for our fight to lower inflation.” (She did not explain how or when it might impact decisions.)  On the other side, Philly Fed President Harker (borderline dove and voter) said he is in the pause camp.  He told an event Wednesday afternoon, “I think we can take a bit of a skip for a meeting,” … “I am definitely in the camp of thinking about skipping any increase at this (coming) meeting.”  Finally, Fed Governor Jefferson (hawk and voter) said, “A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle,” which has been taken as hawk approval of a pause. 

In stock news, INTC’s CFO relieved some market fear over sales as he told an investor conference that he sees Q2 Revenue tracking at the upper end of previous guidance. (The fear came from the fact INTC has no AI products and is not participating in the recent AI-chip craze.)  Later, WMT announced shareholders had sided with the CEO and defeated all nine investor-proposed proposals (including revealing China risk exposure, conducting an independent safety review, and disclosing company political contributions).   Elsewhere, TSLA has begun shipping its cars to customers with only a 50% charge (and also giving the customer TSLA Supercharging credits) as a safety measure.   At the same time, the CEO of F said that his company’s cost to produce electric vehicles may not drop to match its cost to produce gasoline vehicles until 2030.  (Analysts had been projecting cost parity by 2025.)  At the close, DOW announced it is cutting its Q2 revenue forecast while citing slower macroeconomic growth (specifically noting weaker Chinese demand) and weaker market prices.  After the close, Reuters reported more than 100 AMZN corporate employees walked off the job in protest of the company’s “return to office” and climate policy changes on Wednesday afternoon.  (This work stoppage only happened in Seattle, but more than 1,900 AMZN employees globally have pledged to protest over those issues.)  Also in after-hours news, LCID announced it has raised $3 billion through a new equity offering (the majority bought by the Saudi Sovereign Wealth Fund).  Finally, the Biden Administration has agreed to let GE build jet engines for Indian military aircraft.  (The agreement will be announced during President Biden’s June 22 visit to India.)

In stock legal and regulatory news, CHWY won a US Appeals Court case, invalidating the company’s 2019 $13,000 fine related to workplace safety after the death of an employee.  The ruling said, “The retail industry as a whole lacked notice of the engineering reconfiguration requirements that OSHA now alleges are mandatory”.  Later, AMZN agreed to pay the FTC $25 million to settle allegations it has violated children’s privacy rights by having the Alexa voice assistant constantly monitoring conversations.  In a separate case, the AMZN agreed to pay the FTC $5.8 million for violating privacy by having its Ring Doorbell system include cameras that were placed in the bedrooms and bathrooms of female customers in 2017 (again, constantly recording and sending data to the company).  Meanwhile, META threatened to remove all “news” content from the view of users in the state of CA. This came in reaction to a CA state bill that would require online platforms to pay news publishers a usage fee for republishing their news stories (the same issue that has been faced in Australia, Canada, and Europe).  Elsewhere, BA said it is taking a “considerable amount of time” to get FAA approval of the company’s 737 MAX 7 and 10 planes.  The company spokesman went on to say they “hope” the 737 MAX 7 will still be certified by the end of this year and 737 MAX 10 certification is projected still to be sometime in 2024.  (LUV has already pushed back plans to have the 737 MAX 7 in service into 2024 after initially having it scheduled to be in service this summer.)  After the close, the NHTSA announced that F has recalled 142,000 2015-2019 Lincoln SUVs over fire risk.  At the same time, a new trial over JNJ talc asbestos claims began in CA.  This overrides the company’s attempt to settle claims and avoid liability via the “Texas Two-Step Bankruptcy” of a subsidiary.

In debt ceiling news, the Congressional Budget Office (nonpartisan) announced late Tuesday that the new work requirements the GOP had said would save money, would actually cost money because the agreement exempted veterans and the homeless.  This complicated things on the GOP side, reducing what they can claim when talking to their supporters. Later, 52 House Democrats crossed the aisle to vote with the majority of GOP members in a procedural vote which allowed a final floor vote.  Then last night, after hours of tedious posturing speeches, the House did pass the bill 314-117 with the support of 165 Democrats and 149 Republicans (bipartisan support).  After this vote was finalized, late last night Senate Majority Schumer stood in a virtually empty Senate chamber to place the bill on the calendar for today.  Senate leaders of both parties hope to see the bill passed within 48 hours.  However, the Senate rules make it easy for a single Senator to grind the process to a halt.  And, at least two Senators (Lee and Rand) have publicly said they want to see the bill stopped.  So, the solution seems to be progressing.  However, it’s not quite a done deal yet.

After the close, CRM, JWN, CHWY, PVH, NTAP, PSTG, VEEV, CRWD, and OKTA all reported beats on both the revenue and earnings lines.  Meanwhile, NGL and VSCO both missed on both the top and bottom lines.  CRM, VEEV, and OKTA all raised their forward guidance while VSCO lowered its guidance.

Overnight, Asian markets were mixed.  New Zealand (+0.87%) and Japan (+0.84%) were by far the largest gainers.  Meanwhile, Thailand (-0.79%) was by far the biggest loser on the day.  In Europe, the bourses are green across the board at midday.  The DAX (+1.11%), CAC (+0.67%), and FTSE (+0.39%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.03% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.20% open at this hour.  At the same time, 10-year bond yields have risen to 3.664% and Oil (WTI) is down another seven-tenths of a percent to $67.63 per barrel in early trading.t.  

The major economic news events scheduled for Thursday include ADP May Nonfarm Employment Change (8:15 am), Weekly Initial Jobless Claims, Q1 Nonfarm Productivity, and Q1 Unit Labor Costs (all three at 8:30 am), May Manufacturing PMI (9:45 am), ISM May Mfg. PMI (10 am), EIA Crude Oil Inventories (11 am), Fed Balance Sheet, and Bank Balances with the Fed (both at 4:30 pm).  We also get a Fed speaker (Harker at 1 pm).  The major earnings reports scheduled for the day are limited to BILI, DOOO, CAL, DG, HRL, M, and SPTN before the open. Then after the close, AVGO, COO, DELL, FIVE, and LULU report. 

In economic news later this week, on Friday, we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate.  In terms of earnings reports later this week, there are no major reports scheduled for Friday.

In miscellaneous news, DB released a study Wednesday saying a wave of bank loan defaults is imminent in the US and Europe.  The study expects the peak of defaults to be in Q4 of 2024 and cites the “fastest monetary tightening cycle in 15 years” as the primary cause.  With that said, the study said default risks are higher in the US than in Europe and it estimates an 11.3% peak default rate for loans in the US.  In a related story, the FDIC said Wednesday that it has added four lenders to its confidential list of “problem banks,” increasing the number on the list to 43.  Elsewhere, after all the Fed speak on Wednesday, traders dramatically shifted the probabilities (based on Fed Fund Futures) of a rate hike at the upcoming June 14 Meeting.  The Fedwatch Tool tells us this morning 72% of traders expect no rate change with 28% still expecting another quarter-point hike.

So far this morning, M, DOOO, and BILI all reported beats on both the revenue and earnings lines.  Meanwhile, HRL, SPTN, and CAL all reported misses on revenue but beat on the earnings lines.  Unfortunately, DG missed on both the top and bottom lines.  So far, there have been no changes made to guidance.  In terms of surprises, M gave us the only significant shock with a 22% upside surprise on earnings (even though that number also represented a 48% earnings decline).

With that background, it looks like the market is still undecided this morning, giving us a premarket candle inside Wednesday’s candle at this point. The DIA seems to want to retest its T-line from below while the QQQ may be thinking about working on a J-hook pattern. For its part, the SPY is just treading water this morning. Perhaps traders are waiting on all the data to come later this morning. The QQQ is a little closer to its T-line than it has been but remains the most extended of the three major index ETFs. Meanwhile, the T2122 indicator is now just inside the oversold territory. Just remember, the economic data is likely to revive talk about whether the Fed will hike rates again in two weeks and news out of the Senate (related to stalling the Debt Ceiling bill) may throw a wet blanket on the Bulls. So, be cautious and ready for volatility.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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 Friday (gapping up 0.17% in the SPY, up 0.30% in the QQQ, and up just 0.12% in the DIA).  However, this open just fueled the Bulls to rally strongly until 11 am in all three major indices. At that point, the two large-cap index ETFs ground sideways (with a very slight bullish trend in the SPY and a slight Bearish trend in the DIA) for the rest of the day.  At the same time, QQQ trended modestly higher from 11 am to 3:15 pm, before taking profit the last 45 minutes of the day.  This action gave us gap-up large white-bodied candles with smaller upper wicks in all three major index ETFs.  The DIA also printed a Morning Star signal (while just failing to close above its T-line (8ema) after a retest.  SPY did cross back above its T-line and QQQ is now very extended above its T-line. 

On the day, all 10 sectors were in the green with Technology (+2.56%) way out front leading the market higher, and Energy (+0.06%) and Healthcare (+0.10%) lagging way behind the other sectors. At the same time, the SPY gained 1.30%, DIA gained 0.94%, and QQQ gained 2.56%.  VXX dropped 3.83% on the day to end at 35.65 and T2122 climbed back up into the mid-range at 50.84. 10-year bond yields fell slightly to 3.81% while Oil (WTI) gained 1.32% to end the day at $72.78 per barrel.  So, Friday was the Tech Bulls’ Day again, with TSLA (+4.72%), AMD (+5.55%), and AMZN (+4.44%) pulling the rest of the QQQ and SPY upward on the promise of AI-based chip sales after a blowout report from MRVL.  Fear of a US Debt Default fell off as all day the reports said a deal was very close.  This all happened on greater-than-average volume in the QQQ and DIA and slightly below-average volume in the SPY.   

In major economic news Friday, April Durable Goods Orders came in much stronger than expected at +1.1% (compared to a forecast of -1.0% but still much weaker than the March reading of +3.3%).  At the same time, the April PCE Price Index also came in stronger than expected on the annual rate at + 4.4% year-on-year (versus a forecast of +3.9% and a March value of +4.2%).  On the month-on-month metric, April PCE Price Index came in right on target at +0.4% (against a forecast of +0.4% but still stronger than the March +0.1% reading).   Meanwhile, the April Personal Spending month-on-month came in very hot at +0.8% (versus the forecast of +0.4% and much higher than the March reading of +0.1%).  On the business side, Preliminary April Retail Inventories showed a decline of 0.1% (compared to the March 0.1% increase).  Later in the morning, Michigan Consumer Sentiment came in higher than anticipated at 59.2 (versus a forecast of 57.9 but still less than the April value of 63.5).  These measures show a stronger consumer than economists have been expecting with a slightly better outlook for the future. 

SNAP Case Study | Actual Trade

In stock news, the IPO of ATMU, Atmus Filtration Technologies (a spinoff of CMI), opened at $21.67 and closed at $22.40 after pricing at $19.50/share on Thursday night.  CMI raised $275 million from the IPO and retains 83% control of the company. Meanwhile, Mexican President Lopez Obrador said Friday that his government may buy up 50% of the stock in Banamex (the C Mexican subsidiary, which C announced Wednesday it would spin off via IPO).  He told the press Mexico has $3 billion for this purchase and if his stock valuation is anywhere near correct it means C will take a major hit on the unit (which it purchased for $12.5 billion in the early 2000s).  On Saturday, MSFT announced it will discontinue some of its hardware products like ergonomic keyboards.  Elsewhere, in a potential blow to major importers (AMZN, DOLE, TGT, WMT, FDP, LOW, HD, etc.) the Panama Canal has ordered ships to lighten their loads and also increased transit fees due to a severe drought lowering the level of lakes used to flood docks over the course of the canal.

In stock legal and regulatory news, a US judge approved $50 million settlement of a class-action lawsuit against AAPL over defective MacBook keyboards.  Elsewhere, MSFT laid out the grounds of its appeal against the British Competition and Markets Authority’s veto of the company’s acquisition of ATVI.  MSFT said its appeal is based on “fundamental errors” in the CMA’s assessment of the company’s cloud gaming services.  At the same time, six major European insurers have quit the Net-Zero Insurance Alliance (aimed at forestalling climate change by committing to reduce greenhouse gases) in the 36 hours prior to the Friday close.  The insurers all cited US Republican political attacks (on behalf of fossil fuel industries) as the GOP has prioritized the financial health of those industries over climate.  Bank of England Governor (and co-chair of the COP26 project) Carney decried the losses and warned the political attacks are now interfering with the Insurance industry’s ability to price climate risk, harming their investors, policyholders, and the local governments that will suffer climate impacts.  Meanwhile, ETRN’s long-delayed Mountain Valley natural gas pipeline (in WV and VA) was dealt another legal blow Friday.  The US District Court in DC ruled that the US Federal Energy Regulatory Commission had “inadequately explained its decision not to prepare a supplemental environmental impact statement” (that would address the) “unexpectedly severe erosion and sedimentation along the pipeline’s right-of-way.”  Later, PFE and MRNA were sued by ALNY over patent infringement related to the two company’s COVID-19 vaccines.  The ALNY suit seeks unspecified damages, but PFE made $37.8 billion and MRNA made $18.4 billion from the sale of the vaccines in question.  Finally, a San Francisco Federal jury awarded SONO $32.5 million in its suit against GOOGL over patent infringement related to wireless audio devices.

In debt ceiling news, on Friday, Treasury Sec. Yellen announced that numbers were refined and it has now been determined that June 5 would be the actual date of default (as opposed to “as soon as June 1”).  However, by Saturday afternoon, the two sides had reached an agreement.  The deal increases the debt ceiling enough to avoid a similar situation for two years.  It raises defense spending by a whopping 11% over 2023 even kicking in an additional (unexpected) 3% while keeping non-defense spending roughly flat in 2024 (versus ’23 levels) and then increasing it by 1% in 2025.  The deal phases in some work requirements for SNAP (food stamps) but then ends those same work requirements in 2030.  It also rescinds about $30 billion in unspent COVID-19 aid (not to include veterans’ medical care or $5 billion for creating the next generation of vaccines and treatments).  The agreement also calls for a “lead environmental agency” to develop new comprehensive environmental reviews intended to appease the oil and gas industry by theoretically speeding up project approvals.  

Nobody wins or loses a negotiation.  However, based on reactions, it appears the MAGA faction of Republicans believes they lost.  There is enough there for them to claim credit (such as reducing IRS staffing).  However, the lack of reality in what they promised “they” would do and the fact that outrage is their political style likely means they were always going to be “the loser” of any deal.  On the other side, many of the most Progressive Democrats may well feel similarly (related to work requirements on SNAP and the loss of funding to increase IRS enforcement on the top one percent).  However, at least as of now, that group has expressed their concerns in a less bombastic way.  For the markets, it is expected that we do see those extremists (maybe both sides, but the GOP side is the one to watch) threaten to kill or at least delay a vote on the deal until there is a default.  Concerningly for us traders, I have heard commentators imply that the President and Speaker are counting on market turmoil to apply pressure to the extremists and get the bill turned into law. That may mean the war of words is not over…or may ramp up this week. Votes are scheduled to begin on Wednesday in the House.

Overnight, Asian markets were mixed and split evenly in number.  South Korea (+1.04%) was by far the biggest gainer while Malaysia (-0.57%) lost the most.  All of the other exchanges fell in the middle on modest moves.  Meanwhile, in Europe, we see a similar story taking shape at midday.  The DAX (+0.56%), CAC (-0.36%), and FTSE (-0.50%) lead a mixed region with on massive moves underway in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a green start to the morning.  The DIA implies a +0.14% open, the SPY is implying a +0.55% open, and the QQQ implies a +1.13% open at this hour.  At the same time, 10-year bond yields are down sharply to 3.719% and Oil (WTI) is off 1.13% to $71.85 per barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Conference Board Consumer Confidence (10 am).  The major earnings reports scheduled for the day are limited to ESLT and SKY before the open.  Then after the close, HPE, HPQ, YY, AND UHAL report.  

In economic news later this week, on Wednesday, we get Chicago PMI, April JOLTs Job Openings, Fed Beige Book, API Weekly Crude Oil Stocks Report and two Fed speakers (Bowman and Harker).  Then Thursday, ADP May Nonfarm Employment Change, Weekly Initial Jobless Claims, Q1 Productivity, Q1 Unit Labor Costs, May Manufacturing PMI, ISM May Mfg. PMI, EIA Crude Oil Inventories, Fed Balance Sheet, Bank Balances with the Fed, and a Fed speaker (Harker) are reported.  Finally, on Friday, we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Private Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate.

In terms of earnings reports later this week, on Wednesday, AAP, CAE, CPRI, CD, DCI, HOV, CHWY, CRWD, NTAP, NGL, JWN, OKTA, PSTG, PVH, CRM, and VEEV report.  Then Thursday, we hear from BILI, DOOO, CAL, DG, HRL, M, SPTN, AVGO, COO, DELL, FIVE, and LULU.  Finally, on Friday, there are no major reports scheduled.

So far this morning, ESLT beat on revenue while missing on earnings.  On the other side, SKY missed on revenue while beating on earnings.  (TNP reports at 8:20 am.)

With that background, it looks like the Bulls are frisky again this morning in the QQQ and SPY. The tech-heavy NASDAQ will be gapping to levels not seen in 14 months with prices now near the overnight highs similar to how they were in premarket Friday. The SPY is gapping as well but has backed off early highs. Still, an open where it sits now will take the main index ETF back to levels not visited since August of last year. However, the stodgy mega-caps remain just in the red and are at their premarket lows. If we open at this level, DIA will be just under its T-line and not giving the follow-through to the Friday Morning Star that the Bulls would have been hoping to get. QQQ is very extended from its T-line while SPY may also be just a bit stretched (both to the upside). Still, the T2122 indicator sits right in the mid-range, telling us we have some room to run. Just remember, the Debt Ceiling may be agreed upon by leaders but there are plenty of people who may decide it is a better political move to throw a wrench in the works (coincidentally getting a lot of headlines in the process) than it would be to get the bill approved and move on to other business. This is particularly true since the deadline has been shown to not hit until June fifth. So, beware of volatility and news risk.

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