Markets gapped down sharply Friday (with SPY opening down 0.82%, DIA opened down 0.65%, and QQQ opened down 1.12%).  From that point, all three major index ETFs rode the rollercoaster sideways all day, at their peak retracing about half of the opening gap between 1 pm and 2 pm.  However, all three also closed back down near the opening level.  This action resulted in the SPY and QQQ gapping down through their T-line (8ema) and then failing a retest of those levels.  It also gave us indecisive, white-bodied, Doji-like candles in the SPY, QQQ, and DIA.  This also gave us all three looking like they were in Bull Flag patterns.

On the day, all 10 sectors were in the red with Utilities (-1.46%) and Energy (-1.32%) leading the way lower while Consumer Defensive (-0.67%) and Healthcare (-0.67%) held up better than other sectors.  At the same time, SPY lost 0.76%, DIA lost 0.64%, and QQQ lost 0.99%.  The VXX gained 1.26% to 26.48 and T2122 dropped back to the bottom of the mid-range at 25.65.  10-year bond yields fell to 3.735% while Oil (WTI) was down about a quarter or a percent to close at $69.35 per barrel.  So, Friday was really defined by the opening gap, with volatile sideways action the rest of the day. This all happened on less-than-average volume in the SPY, QQQ, and DIA (although DIA was quite near average volume).

In major economic news on Friday, Preliminary Manufacturing PMI came in below expectations at 46.3 (compared to a forecast of 48.5 and the May reading of 48.4).  At the same time, Preliminary Services PMI came in slightly above expectations at 54.1 (versus the forecast of 54.0 but down from the May value of 54.9).  Meanwhile, the Preliminary S&P Global Composite PMI fell to 53.0 (from a May reading of 54.3).  The biggest impact of these was the falling and underperforming Manufacturing PMI that is showing contraction.  Later, BKR gave its weekly oil and gas rig count report.  The data showed an eighth straight week where drillers are taking rigs offline due to low prices.  The reports specifically cited CHK, SWN, and CRK as shutting down rigs on the week, which brings the total 9% lower than one year prior.  Elsewhere, Atlanta Fed President Bostic told a University of Georgia conference “Getting inflation down is Job One, inflation is too high.”  However, Bostic then went on to explain his dovish approach as “I am trying to minimize the dislocation as we get inflation under control. I am hopeful.”  At about the same time, San Francisco Fed President Daly said two more interest rate hikes this year is a “very reasonable” projection.  However, she went on to say that given how fast rates have risen already and how close they are to where they probably need to be, it’s better to move more slowly and carefully than before.  As is usually the case, Daly said, “I want to make sure that we balance those risks on both sides, of under- or over-tightening” … “Adding another six weeks to our decision space, to me that seems optimal, and prudent.” 

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In stock news, there were fires at NKLA company headquarters Friday.  This caused several of the NKLA electric trucks to be damaged.  The company said, “Foul play is suspected as a vehicle was seen in the area of the affected trucks just prior to the incident and an investigation is underway.”  Elsewhere, Reuters reports that Germany is set to order 60 of the CH-47 Chinook helicopters from BA for $8.71 billion.  At the same time, CGC reported a wider-than-expected loss of nearly $500 million on Friday.  The company cited “systemic regulatory issues and competition from illegal marijuana” in their report, which raised real concerns about the company’s viability.  CGC stock fell almost 14% on the day.  That move took the entire marijuana industry sharply lower.  Meanwhile, after the close, AAPL CEO Cook called India a “huge opportunity” after meeting with Indian PM Modi and President Biden at the White House on Friday.  He told CNBC the company would be expanding operations in India, including opening two retail stores.  At the same time, MU announced it has plans to open a facility in PM Modi’s home Indian state and LRCX said it has plans to train 60,000 Indian engineers.

In stock legal and regulatory news, the US Supreme Court ruled 5-4 in favor of COIN by blocking customer lawsuits while the company appeals lower court rulings and hopes to move the suits out of court and into private arbitration.  Elsewhere, the NHTSA announced that HMC is recalling 1.2 million 2018-2023 vehicles due to a faulty coaxial cable connector that may disable the rearview camera.  (HMC had received 274,000 warranty claims related to the issue prior to the recall.)  Meanwhile, Reuters reported that the state of Washington is set to mandate that electric charging stations that want to be part of state programs (get US grant dollars) must include a TSLA plug.  At the same time, US Sec. of Transportation Buttigieg warned of potential airline delays starting July 1.  The issue is a long-standing delay in the rollout of 5G service near airports by T, VZ, and TMUS, who all had agreed to delay the launch until July 1. Yet airlines claim they still have not been able to get their entire fleets retrofitted and, as a result, up to 20% (DAL) of planes will be grounded to avoid altimeter interference.  No other airline has released figures, but they are expected to be similar.  This means a 20% reduction in airline capacity and presumably revenue starting July 1.  Finally, after the close, GSK announced it had settled the first Zantac cancer lawsuit (which was headed for trial in July) for an undisclosed sum.

In geopolitical news, obviously, the attempted coup d’état in Russia (or the march for justice if you prefer) and its impact on their invasion of Ukraine were the main story worldwide.  On Friday night, the fight between Wagner PMC boss Prigozhin and Russian Defense Minister Shoigu and Army Chief Gerasimov went “hot.”  Putin sided with his minister, Shoigu et. al.  This led Wagner to march on and capture the cities of Rostov-on-Don and then Voronezh (halfway from Rostov and Moscow).  Rostov, a city about the same size as Dallas TX, is the main Russian command, logistics, and resupply center for the Russian forces in South Ukraine (including Crimea).  Voronezh, a city about the size of Jacksonville FL, is the main through point to Rostov and the primary center of both logistics and command for Russian attacks on Eastern and Northern Ukraine (Kharkiv, Sumy, etc.).  There was fighting with losses on both sides Saturday. Then Saturday night, with Wagner forces just 125 miles from Moscow, some deal was struck.  Prigozhin told his forces to turn around, Putin pardoned both him and his Wagner forces, and Prigozhin apparently accepted exile to Belorussia.  What Prigozhin was given or threatened with (or both) are unknown.  The only things that seem universally recognized are that Putin’s grip on power took a major hit and the life insurance rates Prigozhin pays must have gone through the roof.  And, the fact that Prigozhin and his men are not dead but instead are given a choice to leave to Wagner African operations or join the Russian Army makes it more likely that other coup attempts will happen in the not-too-distant future. 

Overnight, Asian markets were nearly red across the board with only South Korea (+0.47%) and India (+0.14%) able to hang onto the green.  Meanwhile, Shenzhen (-1.68%), Shanghai (-1.48%), and Thailand (-0.83%) paced the losses.  In Europe, we see a similar picture taking shape a t midday.  Only the CAC (+0.24%) and Portugal (+0.48%) are in the green. At the same time, The DAX (-0.13%) and FTSE (-0.08%) are following the smaller exchanges lower in early afternoon trade.  In the US, as of 7:30 am, Futures are just on the red side of flat.  The DIA implies a -0.05% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.22% open at this hour.  The 10-year bond yields are down sharply to 3.686% and Oil (WTI) is up a half of a percent to $69.51 per barrel in early trading.

There are no major economic news events scheduled for Monday.  The only major earnings reports scheduled for Monday is CCL before the open.  There are no major reports scheduled for after the close.        

In economic news later this week, on Tuesday we get Building Permits, Durable Goods Orders, Conf. Board Consumer Confidence, May New Home Sales, and API Weekly Crude Oil Stocks.  Then Wednesday, Preliminary May Goods Trade Balance, May Preliminary Retail Inventories, EIA Crude Oil Inventories, and Fed Bank Stress Test Results are reported while Fed Chair Powell also speaks.  On Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Tuesday we hear from KFY, SCHN, WBA, and JEF.  Then Wednesday, GIS, UNF, CNXC, FUL, MU, and WOR report.  On Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, on Friday Refinitiv analysts reported Q1 had delivered (during Q2 reports) earnings growth of 0.1% (year-on-year) from the S&P 500 companies. This was far better than the feared forecast of a 5.1% decline.  However, Refinitiv still has a gloomy outlook, expecting Q2 earnings (reported in Q3) to be down 5.6% from the same quarter in 2022.  Elsewhere, a major drought in Panama has been causing the Panama Canal to dry up (lakes used for the locks).  On Sunday, the operator of the canal reduced the depth of the hull (below the water line) permitted to transit the canal by another 13%.  This reduction will cause shipping delays, impacting both major importers and exporters.  The canal transits about 3.5% of global trade.  Ships could be partially unloaded for canal transit or can be rerouted around South America.  (Either option would cause weeks of delay and added expense.) Finally, Bloomberg reports this morning that GS has begun laying off 125 senior positions (managing directors) globally. This comes as investment banking deal values have fallen 40% so far this year.

With that background, it looks like markets want to start the week with a continuation of at least a Bull Flag pullback. All three of the major index ETFs are below their T-line (8ema), indicating the short-term trend is bearish while the longer-term trend remains Bullish in all three. For what it is worth, the markets are printing small and as yet undecisive candles in the premarket session. However, it is early. In terms of extension, none of the three major index ETFs is far from their T-line. T2122 is not far from the oversold territory but remains in the mid-range. So, both sides have room to run if they can muster the energy. The most notable thing about the market this morning is that there is apparently no reaction to the events in Russia. Maybe this is due to their isolation and greatly diminished economic position in the world. However, I have a sneaking suspicion that the reason it is not being noticed is that it so far has not had an impact on the Russian invasion of Ukraine.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Thursday was the Bull’s day after a down start to the day that saw the SPY gap down 0.21%, DIA gapped down 0.13%, and QQQ gapped down 0.39% at the open.  At that point, all-day rallies started in both the SPY and QQQ.  Meanwhile, DIA meandered sideways, closing near the Wednesday close.  This action gave us Bullish Engulfing candles in the SPY and QQQ.  Both of them also crossed back above their T-line (8ema).  Meanwhile, the DIA printed another white-bodied, indecisive Spinning Top candle.  It is worth noting that SPY did this on significantly lower-than-average volume while DIA and QQQ were near but still below-average volume.

On the day, six of the 10 sectors were in the red with Technology (+0.58%) and Consumer Defensive (+0.56%) leading the way higher while Energy (-1.50%) was by far the worst-performing sector.  At the same time, SPY gained 0.36%, DIA lost 0.03%, and QQQ gained 1.18%.  The VXX dropped 2.39% to 26.15 and T2122 dropped back and remains in the mid-range at 46.67.  10-year bond yields spiked to 3.799% while Oil (WTI) plummeted 4.21% to close at $69.48 per barrel.  So, the two index ETFs that have led all year seemed to be trying to reverse their pullback this week.  Meanwhile, DIA (which has lagged all year) still seems to be trying to move lower in an indecisive way.

In major economic news on Thursday, Q1 Current Account (trade deficit) came in a bit larger than expected at -$219.3 billion (compared to a forecast of -$216.9 billion and a revised Q4 value of -$216.2 billion).  At the same time, Weekly Initial Jobless Claims were also higher than expected at 264k (versus a forecast of 260k but right in line with the prior week’s 264k).  It is worth noting that 264k is a 20-month high.  Later in the morning, May Existing Home Sales came in above the anticipated reading at 4.30 million (compared to a forecast of 4.25 million and slightly above the April reading of 4.29 million).  This amounted to a +0.2% month-on-month increase compared to the April 3.2% decrease over March.  Then EIA Weekly Crude Oil Inventories showed a much larger-than-expected drawdown of 3.831-million-barrels (versus a forecasted inventory build of 1.873-million-barrels and far different from the prior week’s 7.919-million-barrel increase in stocks).  After the close, the Fed Balance Sheet was reported as decreased to $8.362 billion (down $26 billion from the prior week’s $8.388 billion). 

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In Fed Speak news, Fed Governor Bowman said Thursday that although she supported the June pause, she feels “additional policy rate increases will be needed” (to control inflation).  She said the Fed “has made progress in lowering inflation, but … we continue to see unacceptably high levels of inflation.”  (She did not explain how many or what her expected terminal rate would be but she did use the plural to describe increases.)   Later, Fed Chair Powell had his second day of Congressional testimony (this time in the Senate) where he said the Fed would move at a “careful pace” as the FOMC edges toward a stopping point for rate hikes.  He said he did share the broad consensus of Fed members that expects modest economic growth, a small rise in unemployment, and a slowly declining inflation over the rest of the year.  Powell then said, “If all those things happen, we are within a couple of rate hikes of the level we need to get to.”  On a different topic, Powell said banks with over $100 billion in assets will soon face higher capital requirements (he did not specify the amount) as the Fed seeks to strengthen banks and finally bring the US in compliance with the 2017 Basel Committee Agreement.  (However, Reuters reported the major banks are already pushing back against this and have marshaled GOP champions to fight the rule revision.  Oddly, Reuters did not cite which major banks or even which GOP champions.)

In stock news, RIVN acquired Swedish route planning software company Iternio.  As mentioned here previously, it was announced Thursday that GE will jointly make fighter jet engines for the Indian air force with India’s state-owned Hindustan Aeronautics.  Elsewhere, OSTK won the bankruptcy court auction for a portion of the assets of defunct BBBY for $21.5 million.  (OSTK was up as much as 22% on the news but closed up 17.28% to $24.84.)  At the same time, SPR (which is a major supplier to both BA and EADSY) suspended production at its Wichita, KS factory (that makes fuselages) after workers rejected a company-proposed four-year deal and announced they would begin striking on Saturday.  Meanwhile, at the close, Investing.com reported the rumor that TSLA is acquiring German wireless charging company Wiferion.  Later, Bloomberg reported that OWL is rebranding its business units amid growing tensions between the company’s top executives.  (OWL was formed in 2021 via a SPAC that merged Dyal Capital with Owl Rock.)

In stock legal and regulatory news, on Thursday, the FTC argued in federal court that the MSFT acquisition of ATVI should be halted until a final legal ruling is issued.  The hearing will continue through June 29 with CEOs from both companies called as witnesses.  Elsewhere, the FDA approved SRPT’s gene therapy for muscular dystrophy. (This was a first-of-its-kind approval for this type of therapy and it is worth noting PFE has its own similar gene therapy in development.) Later, the US Dept. of Energy announced plans to provide up to $9.2 billion in loans to a joint venture between F and South Korean listed company SK Innovation for them to build three battery plants.  (The largest ever DoE loan award.)  After the close, META announced it will end access to news on Facebook and Instagram in Canada after the Canadian Parliament approved legislation to compel internet giants to pay local publishers for their news content.  Also, after the close, MMM announced it has reached a tentative $10.3 billion settlement with “many” public water systems over the company’s “forever chemical” pollution.  MMM said the deal would provide the funds over a 13-year period.  In addition, the states of CA, MN, and WI all joined an FTC lawsuit aimed at stopping the AMGN $27.8 billion deal to buy HZNP based on the deal giving AMGN monopoly positions in two eye disease markets.

Overnight, Asian markets were nearly red across the board for the exchanges that were open.  (Chinese markets remain closed for their Dragon Boat holiday.)  Japan (-1.45%), Singapore (-0.96%), and South Korea (-0.91%) paced the losses.  In Europe, we see a similar picture taking shape at midday.  Only Greece (+0.67%) and Switzerland (+0.51%) are in the green as the CAC (-0.22%), DAX (-0.72%), and FTSE (-0.27%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a fourth consecutive lower start to the day.  The DIA implies a -0.29% open, the SPY is implying a -0.44% open, and the QQQ implies a -0.57% open at this hour.  At the same time, 10-year bond yields a down sharply to 3.735% (back near where they were yesterday morning) and Oil (WTI) is off another 1.22% to $68.66 in early trading.

The major economic news events scheduled for Friday are limited to Manufacturing PMI, Services PMI, and S&P Global Composite PMI (all three at 9:45 am) and we hear from three Fed speakers (Bullard at 5:15 am, Bostic at 8 am, and Mester at 1:40 pm).   The only major earnings reports scheduled for Friday is KMX before the open.  There are no major reports scheduled for after the close.       

So far this morning, KMX reported beats on both the revenue and earnings lines.  The earnings were a 57% upside surprise, yet was actually down 25.6% quarter-on-quarter.  Revenue was also down 17.4% quarter-on-quarter.

In miscellaneous news, following the meeting between President Biden and Indian PM Modi, the US and India mutually agreed to drop six trade disputes that are pending before the WTO.  In addition, India agreed to drop retaliatory tariffs on certain US ag products.  Elsewhere, this morning, CNBC reports that workers at 150 SBUX stores across 22 states will strike after the company changed policy (in an effort to avoid cancel culture boycotts) and refused to allow “Pride decorations” in their stores.  Meanwhile, Treasury Sec. Yellen told Bloomberg that “my odds of it (a recession), if anything, have gone down.” (She went on to cite the resilient labor market and inflation coming down.) Finally, in a “minor miracle,” Interstate 95 in Philadelphia is opening to traffic again today, less than two weeks after a section of raised six-lane highway collapsed after a fuel truck rolled, caught fire, and melted the steel beams supporting the structure.  This does actually have an economic impact as that highway is normally one of the most heavily traveled truck routes in the nation. Its closure had caused prices in the Philly area to rise over the last couple of weeks ostensibly due to the additional cost of trucking via other routes.

With that background, it looks like the QQQ is retesting its T-line for support while SPY is looking to gap back just below its T-line this morning. Meanwhile, DIA remains in its Bull Flag formation. However, once again, the candles the three major index ETFs have printed so far in this premarket are small, indecisive Dojis. So, it looks like the morning move is uncertain. With that said, the very short-term trend is down and the two large-cap index ETFs are below their T-line on a daily chart. So, the bias is bearish. Meanwhile, the longer-term trend remains Bullish (Weekly chart). In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator is smack dab in the center of its mid-range. So, both the Bulls and the Bears have room to run if they can gain the upper hand. We do have several scheduled Fed speakers (and likely a couple of others will give their two cents in unscheduled ways). However, the PMIs at 9:45 am are most likely to be external drivers of momentum. Remember that it’s Friday… payday…and time to get your account set for the weekend news cycle.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, markets gapped down (SPY gapped down 0.22%, DIA gapped down 0.25%, and QQQ gapped down 0.37%).  From that point, both of the large-cap index ETFs meandered sideways with DIA actually fairing better than the SPY but neither of them ended up far from their open.  At the same time, QQQ sold off hard after its gap lower, finding the lows of the day at about 11:25 am.  Then it very slowly and modestly rallied until about 2:30 pm before selling off again into the close.  This left all three of the major index ETFs below their T-line (8ema) at the end of the day.  This action gave us a black-bodied, large-body Spinning Top in the SPY.  For their part, DIA printed a Doji and QQQ gave us a large black-bodied candle that completed a Doji Continuation Pattern (Sandwich).

On the day, five of the 10 sectors were in the red as Technology (-1.53%) by far led the way lower and Energy (+1.20%) by far held up much better than the other sectors.  At the same time, SPY lost 0.51%, DIA lost 0.30%, and QQQ lost 1.36%.  The VXX was down 2.05% to 26.79 and T2122 climbed but remains in mid-range at 70.83.  10-year bond yields ended up unchanged at 3.727% while Oil (WTI) rose 1.66% to close at $72.37 per barrel.  So, it was the second lower-low and third lower close across all three of the major index ETFs.  This all happened on average volume in the QQQ and well-below-average volume in the DIA and SPY. 

In major economic news on Wednesday, came after the close as API Weekly Crude Oil Stocks were reported as a larger inventory drawdown than was expected.  They came in at -1.246-million-barrels compared to a forecast of -0.433-million-barrels and the prior week’s +1.024-million-barrel increase in stocks.  The big economic news was the testimony of FOMC Chairman Powell.  Powell told the House that the fight to get inflation back down to two percent “has a long way to go.”  (Hinting at two additional hikes possible this year, just as he said two weeks ago. By saying a half point of rate increases by year-end was “a pretty good guess.”)  He also said, “We have been seeing the effects of our policy tightening on demand in the most interest-rate–sensitive sectors of the economy such as housing, (but) It will take time, however, for the full effects of monetary restraint to be realized.”  GOP members of the committee pressed Powell on bank capital requirements.  However, he refused to be pressed into telling them Fed plans, saying “Strong capital requirements mean we have a stronger banking system…yet we also know that at the margin, as the costs of capital for banks goes up, the costs of credit goes up,” … “You just have to make a judgment call on that, and that’s what we’ll be doing.” 

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In other Fed speak news, Chicago Fed President Goolsbee told an economic forum that (the June 7 decision to not hike rates) was a close call for him.  However, he said “I felt like a reconnaissance mission is a perfectly appropriate thing to do after you’ve had 10 raises in a row, among the fastest increases in interest rates in recent memory,” … “You know that it takes some time for that to work its way through the economy.”  Goolsbee went on to say (related to a July hike) he had not “decided what should be the rate decision more than a month from now.”  Meanwhile, Atlanta Fed President Bostic echoed Goolsbee’s sentiment about a pause.  In an article published Wednesday he said “If we simply press on with additional rate hikes, we could needlessly drain too much momentum from the economy.”  In addition, Bostic wrote “While the clearest risk of pausing rate hikes is that it allows inflation the opportunity to rekindle, it isn’t his baseline forecast.”  Bostic went even further later in a Yahoo Finance interview when he said, “My baseline is that we should stay at this level for the rest of the year.”

In stock news, AJRD announced they were selected to develop the propulsion system for missiles, which LMT was recently given a $4.4 billion US Army contract to build.  (No value to the AJRD selection was given.)  Elsewhere, MULN shares jumped after the company announced it will not be seeking additional investor financing for at least the balance of 2023, saying it has sufficient cash on hand for the next 12 months.  Later, UBER announced it is eliminating 200 jobs (< 1% of the workforce) from its recruitment division after it decided to keep its staff count flat for the remainder of 2023.  Meanwhile, Reuters reported that INTC is reorganizing its manufacturing business to work like an independent entity.  No clear timeline for the reorganization was given, but INTC did say that the unit will begin reporting margins and they expect their foundries to be the second largest in the world with more than $20 billion in revenue in 2024.  (However, this is not really a close second with TSM expecting to bring in $85 billion in 2024.)  After the close, Bloomberg reported that SES and INTEQ have ended negotiations for a potential merger after the major stakeholders reached an impasse.  At the same time, the Wall Street Journal reports that PARA has received an offer to buy its Simon & Schuster unit.  (No price was reported.)  In addition, LOGI announced a new $1 billion share buyback program after the close.

In stock legal and regulatory news, the FTS sued AMZN in a Washington state Federal court for violating consumer protection laws.  The suit claims AMZN knowingly duped millions of consumers into enrolling in Amazon Prime and then made it very difficult to cancel the subscription service.  Elsewhere, a Delaware federal court hit GOOGL with a $15.1 million verdict for infringing two audio software patents, which was less than half of the $33.1 million in damages requested.  At about the same time, LLY announced that its diabetes treatment Jardiance had received FDA approval for patients aged 10 and up.  Later, it was “another day, another Pharma entity suing to stop Medicare negotiation of drug prices.”  This time, industry lobbying group PhRMA filed suit in a TX federal court seeking to block the government from negotiating on price.  (It is worth noting, the US pays 2.4 times higher prices than the average of other Western countries.)

After the close, KBH, and SCS reported beats on both the revenue and earnings lines.  Meanwhile, ASTL reported misses on both lines.  It should be noted that KBH also raised its forward guidance.  The major surprises included a HUGE 1500% downside surprise in ASTL earnings, a 400% upside surprise on earnings by SCS, and a 52% KBH upside earnings surprise on a 27% revenue upside surprise.

Overnight, Chinese markets were closed for a holiday.  However, Australia (-1.63%) and Japan (-0.92%) led the parts of the region (that did open) lower.  Only South Korea (+0.43%) managed moderate gains on the day.  Meanwhile, in Europe, we see red across the board at midday after the Bank of England surprised with an unexpected half of a percent rate hike.  The CAC (-1.41%), DAX (-0.81%), and FTSE (-1.13%) are leading Europe lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.33% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.40% open at this hour.  At the same time, 10-year bond yields are up to 3.744% and Oil (WTI) is down sharply to $70.90 per barrel in early trading

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims and Q1 Current Account (8:30 am), May Existing Home Sales (10 am), and four Fed Speakers (Waller at 4 am, Bowman at 9:55 am, Mester at 10 am and Chair Powell testifies again at 10 am).  The only major earnings reports scheduled for Wednesday include ACN, CMC, DRI, FDS, and GMS before the open.  There are no major reports scheduled for after the close.     

In economic news later this week, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester).

In terms of earnings reports, on Friday, we hear from KMX.

In miscellaneous news, after the close, Bloomberg reported that total US short interest has reached more than $1 trillion.  This makes the current short bets the largest since April 2022, even as the paper losses of the shorts now exceed $101 billion.  Stocks at the top of that list include the highest fliers (TSLA, AAPL, MSFT, NVDA, etc.).  Other things on the docket today include a meeting between Indian PM Modi and President Biden (at which several trade deals are expected to be announced) with AAPL CEO Cook, TSLA CEO Musk, and others like GE, HII, AMAT, and others on hand for the day’s events.

So far this morning, ACN, CMC, GMS, and FDS have all reported beats on both the revenue and earnings lines.  Meanwhile, DRI missed on revenue while beating on earnings.  Only ACN has changed guidance, lowering its outlook for the future.  The only surprises of note were a 10% upside earnings surprise for CMC and an 11% upside earnings surprise from GMS.

With that background, it looks like the Bears are trying to follow through on the three consecutive lower closes with a modest gap lower this morning. However, the candles the three major index ETFs have printed so far in this premarket are small, indecisive Dojis. So, it looks like the move is uncertain. With that said, the very short-term trend is down with all three of the major indices below their T-line on a daily chart. Meanwhile, the longer-term trend remains Bullish (Weekly chart). In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator remains in its mid-range. So, both the Bulls and the Bears have room to run if they can gain the upper hand. While it is less likely any real bombshells will come from the second day of Chair Powell’s testimony, it is possible sentiment could be swung. At this point (before his testimony), markets have priced in a 76.9% probability of another quarter-point hike in July.

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 volatile on Tuesday with SPY gapping down 0.44%, DIA gapping down 0.50%, and QQQ gapping down 0.46%.  At that point, we saw divergence as the large-cap index ETFs sold off hard (reaching the lows of the day at 10:30 am).  Meanwhile, QQQ immediately recrossed its gap down to reach the highs of the day at about 9:50 am, only to reverse and catch up to the large caps finding the lows of the day at about 10:30 am.  From there, all three major indices got in sync to rally steadily until 1:30 pm.  Then prices ground sideways with a modest Bearish lean the rest of the day.  This action gave us indecisive candles in all three major index ETFs.  The SPY printed a Doji that bounced up off its T-line (8ema).  At the same time, QQQ printed a white-bodied Spinning Top that also bounce up off its T-line.  DIA printed a black-bodied Spinning Top that closed at the T-line. 

On the day, all 10 sectors were in the red as Energy (-1.54%) led the market lower and Healthcare (-0.11%) held up much better than other sectors.  At the same time, SPY lost 0.52%, DIA lost 0.73%, and QQQ lost 0.28%.  The VXX was flat at 27.35 and T2122 dropped back into the center of the mid-range at 51.35.  10-year bond yields fell to 3.723% while Oil (WTI) fell 1.17% to close at $70.94 per barrel. So, overall, it was an indecisive pullback day, where most of the pullback was found in the opening gap.  This all happened on a bit less-than-average volume with SPY being the least volume relative to its average. 

In major economic news on Tuesday, May Preliminary Building Permits came in hotter than expected at 1.491 million (+5.2%), compared to a forecast of 1.425 million and an April reading of 1.147 million.  At the same time, May Preliminary Housing Starts saw a massive jump (up 21.7% from April, the largest one-month jump since 2016) to come in well above the anticipated level at 1.631 million (versus a forecast of 1.400 million and an April value that was revised down to 1.340 million).  

In Fed-speak news, Vice Chair for Bank Supervision Barr told a panel that the Fed is exploring ways to speed up the bank oversight process.  He said they want to move away from scenario-based “one-size fits all” supervision and move toward a more bank specific “what would it take to break this bank or a large piece of it?” approach. However, he also said this is just an early-days effort.  (Bullard and Williams both spoke, but they gave prepared presentations of research and did not answer questions about FOMC direction.)

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In stock news, on Tuesday, EADSY (Airbus) announced the biggest order of jets ever placed.  The largest Indian airline (IndiGo) gave the company an order for 500 narrow-body jets for delivery starting in 2030.  (Interestingly, this order may be more about bragging rights as it tops the previous record order, placed with BA by India’s second-largest airline earlier this year by just 30 planes…although 70 of the BA planes are just an option to buy.)  Later, Reuters reported that KKR has agreed to buy $44 billion of the loans generated by PYPL’s European “Buy Now, Pay Later” business.  Elsewhere, HPE jumped on the bandwagon by announcing it is launching a cloud computing service designed to power AI systems such as ChatGPT.  (AMZN, MSFT, and GOOGL are already major players in that niche and IBM also recently announced plans to join that market.)  In the auto space, GM continues its parade of major internal combustion investments.  On Tuesday afternoon, the automaker announced a $920 million expansion of a diesel engine plant in OH.  Meanwhile, CIVI said Tuesday afternoon that it will acquire Permian Basin oil and gas operations from a private equity firm for $4.7 billion.

In stock legal and regulatory news, LMT has filed complaints with the FTC and Dept. of Defense related to the LHX $4.7 billion acquisition of AJRD that had been announced in December 2022.  (LMT is AJRD’s largest customer and LHX is an LMT competitor.)  Later the Financial Times confirmed and fleshed out a report I posted yesterday, saying CS (now owned by UBS) faces $128 million in fines from the UK and $300 million in fines from the Fed related to mishandling of Archegos Capital.  The added detail is that CS had only set aside $35 million as a reserve for those fines. Meanwhile, the US Dept. of Justice antitrust division announced plans to revise the DOJ’s bank merger review guidelines (last updated in 1995).  At the same time, GCI filed an antitrust lawsuit against GOOGL over claims of monopoly in how businesses purchase online ads.  Elsewhere, SNY said Tuesday afternoon that the International Chamber of Commerce arbitration court had rejected the claims from rival drugmaker (Boehringer Ingelheim) that SNY had been indemnified BI against lawsuits over cancer risk from the drug Zantac.  This relieves SNY of some legal risk since thousands of cancer-related lawsuits have been filed globally related to Zantac. The decision cannot be appealed.  After the close, the FTC proposed a rule to force cable TV providers such as CMCSA, CHTR, DISH, and others to disclose “all-in” pricing (including fees and separate charges) in promotional materials and on bills.  Finally, Reuters reports that the state of TX Dept. of Transportation will require any charging stations even partially backed by state funds to include a TSLA standard plug.  This move was said to be a response to F and GM adopting that standard recently.

After the close, LZB reported beats on both the revenue and earnings lines.  At the same time, FDX missed on revenue while beating on earnings.  It is worth noting, LZB also reduced forward guidance.  The only major surprise was a 36% upside earnings surprise by LZB.  (It is also worth noting that FDX and LZB both beat had lowered estimates.

Overnight, Asian markets were mixed but leaned toward the downside.  Shenzhen (-2.18%), Hong Kong (-1.98%), and Shanghai (-1.31%) led the region lower.  At the same time, we see the same picture taking shape in Europe at midday.  The CAC (-0.20%), DAX (-0.04%), and FTSE (-0.11%) are leading the way lower while a handful of smaller exchanges remain in the green.  In the US, as of 7:30 am, Futures are now pointing to a start to the day just on the red side of flat.  The DIA implies a -0.06% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.11% open at this hour.  Meanwhile, 10-year bond yields are up to 3.748% and Oil (WTI) is off a tenth of a percent to $71.08 per barrel in early trading.

The major economic news events scheduled for Wednesday is limited to API Weekly Crude Oil Stocks (4:30 pm) and two more Fed Speakers (Chair Powell testifies at 10 am and Mester at 4 pm).  The only major earnings reports scheduled for Wednesday include PDCO and WGO before the open.  Then, after the close, ASTL, KBH, and SCS report.   

In economic news later this week, on Thursday, we get Q1 Current Account, Weekly Initial Jobless Claims, May Existing Home Sales, and three Fed Speakers (Waller, Bowman, and Mester).  Finally, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester).

In terms of earnings reports, on Thursday, CAN, CMC, DRI, FDS, and GMS report.  Finally, on Friday, we hear from KMX.

In miscellaneous news, the TX state electricity grid (ERCOT) was forced to call for the voluntary conservation of power Tuesday as a heatwave continues across Southern states.   Elsewhere, mortgage demand was flat for the week even as national average mortgage rates for a 30-year, fixed-rate, conforming loan fell from 6.77% to 6.73%.  Refinance loan applications fell two percent while new home purchase applications rose by the same amount.  Finally, the US House Republicans continue their effort to make political points by targeting what funds are allowed to consider when investing money.  They are targeting “woke investing” by proposing an amendment to the Employee Retirement Income Security Act (ERISA) to prohibit qualified funds from investing in anything that is not solely focused on maximizing profit.  The lead author of the bill (Barr from KY) told CNBC “Environmental, social and governance investing has become a cancer and a fraud within our capital markets,” with the unstated part being that government knows what’s best and how people should be allowed to invest.  (Not exactly a libertine position.)

With that background, it looks like markets remain undecided this morning. With no economic data or brand name earnings reports on tap, this could open the door to talking heads to drive markets. Obviously, the semi-annual testimony from Chair Powell has the biggest probability of swinging sentiment. At this point (before his testimony), markets have priced in a 79.4% probability of another quarter-point hike in July. The chart itself looks like the DIA is trying to find support from the T-line. The other major indices may be in the same camp but have not touched the 8ema yet. Overall, the SPY and QQQ simply look like a minor pullback rest in a bull trend. DIA is similar but also the weakest of the three. In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator is smack in the middle of its range. So, both the Bulls and the Bears have room to run if they can gain the upper hand.

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 a profit-taking day ahead of the long weekend and after a blisteringly strong week.  SPY gapped 0.08% higher, DIA gapped up 0.11%, and QQQ gapped strongly higher, opening up 0.60%. However, after that open the Bears were in control although from 10 am until 1 pm it was more of a sideways grind.  All three major index ETFs closed near their lows.  This action gave us black candles with tiny wicks on both ends.  There were no candle signals according to a strict reading of the chart.  However, the SPY could be seen as having a Dark Cloud Cover sentiment (just missing by an open not above the prior high).  All three remain above their T-line (8ema) and only QQQ could be said to still be over-extended to the upside.

On the day, nine of the 10 sectors were in the red as Communications Services (-0.80%) led the market lower and Utilities (+0.21%) was the only sector to manage to stay in the green.  At the same time, SPY lost 0.71%, DIA lost 0.53%, and QQQ lost 0.63%.  The VXX fell 3.53% to 27.30 and T2122 pulled back modestly but remains in the overbought territory at 87.64.  10-year bond yields climbed to 3.767% while Oil (WTI) gained 1.16% higher to close at $71.44 per barrel.  So, overall, as said above, it was a day for profit-taking.  This can be seen by the very heavy volume in the QQQ (the market leader all year and especially during the week) while SPY and DIA had a bit less-than-average volume, even on a triple witching day.  

For the week, QQQ was up 3.79%, SPY was up 2.22%, and DIA (laggard all year) was up 1.08% even after Friday’s profit-taking.  During those five days, QQQ and SPY had above-average volume while DIA was just above average.  However, none of them had enough volume to call them a “blowoff top.” 

In major economic news on Friday, Michigan Consumer Sentiment came in above the expected number at 63.9 (compared to a forecast of 60.0 and a May reading of 59.2).  At the same time, Michigan Consumer Expectations were significantly higher than was expected at 61.3 (versus a forecast of 56.5 and a May value of 59.2). 

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In stock news, TSP completed its first unmanned road test (39 miles) of its heavy-duty truck in China.  Elsewhere, TSLA also offered new short-term incentives in China for its Model 3 cars.  The incentives offer buyers between June 16 and June 30 discounted interest rates as well as cash subsidies for the customer’s auto insurance.  In other TSLA news, CEO Musk told a French audience that autonomy (full self-driving) was the primary driver of the company’s value.  (Quite an interesting statement given the myriad of legal trouble TSLA faces over claims its “full self-driving” is not autonomous and has failed causing deaths, injuries, and property damage.)  Also on Friday, HUM echoed the UNH Thursday warning about a spike in medical costs due to higher-than-expected demand for surgery.  Later, LLY reported that its migraine drug (which had been approved by the FDA in 2018 for preventative migraine treatment) has failed to prove statistically superior to the competing drug sold by the BVHN and PFE partnership.  Meanwhile, GM continued its “internal combustion investment tour” by announcing it would invest nearly $1 billion in the expansion of production at an OH plant making heavy-duty truck engines.  Construction will begin immediately and will quadruple the plant’s production capacity.  Later, Reuters reported that BALL is now exploring the sale of its aerospace and defense unit for $5 billion with bidders including BAESF, TXT, and private equity firms.  (The goal is to focus on beverage packaging production.)  Finally, Bloomberg reports that MU is very close to signing a deal to build a $1 billion chip packaging plant in India.  This dela may be announced during Indian PM Modi’s state visit to Washington this week.

In stock legal and regulatory news, GOOGL sued a CA man on Friday, charging that he had created 350 fake accounts on its platforms and sold them to real businesses for the purposes of creating 14,000 fraudulent product and service reviews.  Elsewhere, CUBI announced it had bought $631 million worth of loans (formerly belonging to SBNY) from the FDIC at a 15% discount from book value.  Later, WHR announced it had agreed to drop a lawsuit against one of their former Italian executives (whom they had accused of stealing trade secrets when he left to work for a competitor).  At the same time, a US District judge ruled that JPM CEO Dimon will not need to submit to a second deposition related to the US Virgin Island’s lawsuit over the bank’s work for Jeffrey Epstein.  In a tangentially-related story, a US judge preliminarily approved the DB $75 million settlement with the victims of Jeffrey Epstein.  Meanwhile, a federal court in Louisiana dismissed a TSLA complaint against the state restriction on the direct sale of automobiles.  Late Friday the FDA advised COVID-19 vaccine makers (MRNA, PFE/BNTX, NVAX, etc.) to develop new vaccine candidates targeted at the XBB1.5 variant currently circulating.  In fine news, TWNK was fined just under $300,000 by the US Dept. of Labor for safety and training failures that resulted in a preventable partial finger amputation of an employee in December.  Finally, after he close, BMS sued the US Dept. of Health and Humans Services asking the court to declare US government negotiations over drug prices to be unconstitutional.  The specific drug in question is their Eliquis blood thinner.  The ridiculous thing about the suit (and peer suits) is that US patients pay an average of $440 for a dose of Eliquis while the same dose cost $162 in Zurich, $96 in Berlin, and $65 in Johannesburg.  (It’s good to own politicians.)

In overnight news, BABA announced a six-way restructuring, replacing its chairman in the process with an insider (a long-time confidant of Jack Ma).  Elsewhere, Bloomberg reports UBS is facing large fines (maybe $300 million) from the Fed as well as others from UK regulators (maybe $128 million).  These fines related to CS dealings with Archegos Capital prior to its implosion.

Overnight, Asian markets were mixed but leaned (on movement size) toward the red.  Hong Kong (-1.54%) and Thailand (-1.24%) paced the gainers while Australia (+0.86%), India (+0.33%), and New Zealand (+0.33%) led the gainers.  Meanwhile, in Europe, we see a different story taking shape with just two exchanges barely hanging onto the green at midday.  The CAC (-0.26%), DAX (-0.56%), and FTSE (+0.01%) lead the way on volume but most of the smaller bourses have moved more to the downside in early afternoon trade.  In the US, as of 7:30 am, the Futures are pointing to a surprisingly similar start to the week among the major indices. The DIA implies a -0.31% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields are down to 3.763% and Oil (WTI) is up a bit to $72.09 per barrel in early trade.

The major economic news events scheduled for Tuesday are limited to May Building Permits and May Housing Starts (both at 8:30 am), and two Fed Speakers (Bullard at 6:30 am and Williams at 11:45 am).  The only major earnings reports scheduled for Tuesday are FDX and LZB after the close.  

In economic news later this week, on Wednesday, API Weekly Crude Oil Stocks are reported and we two more Fed Speakers (Chair Powell and Mester).  On Thursday, we get Q1 Current Account, Weekly Initial Jobless Claims, May Existing Home Sales and three Fed Speakers (Waller, Bowman, and Mester).  Finally, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester). 

In terms of earnings reports, on Wednesday we hear from PDCO, WGO, ASTL, KBH, and SCS.  Then Thursday, CAN, CMC, DRI, FDS, and GMS report.  Finally, on Friday, we hear from KMX.

In miscellaneous news, the US Dept. of Energy received two ransom requests at a nuclear waste disposal site and Oak Ridge Laboratories on Friday.  This followed the MOVEit security flaw recently found in PRGS software.  Despite this, the Russian hacker group responsible for the hacks posted on their website “WE DON’T HAVE ANY GOVERNMENT DATA” saying that if they mistakenly did get government data “WE STILL DO THE POLITE THING AND DELETE ALL.”  Elsewhere, on Saturday, Bloomberg reported that T recently told 60,000 managers to return to the office.  The catch was that they have sharply reduced the number of offices.  So, many of those ordered back to the office would be required to relocate or quit.  (Bloomberg says sources tell this was seen as a way to reduce the costs of severance incurred had they been forced to lay off many of those people.)  Finally, Sec. of State Blinken met with Chinese leaders, including Chinese President Xi over the weekend.  Both sides made nice, saying a stable relationship is important and inviting Blinken’s Chinese counterpart to Washington for a reciprocal meeting.  However, there were no deals made or changes announced for example related to US sanctions or Chinese policies.

With that background, it looks like the Bears are looking to follow through early on Friday’s pullback. The DIA looks headed to retest its T-line (8ema) as support. However, all three major index ETFs remain above their T-lines at this point. So, the market trend remains bullish. In terms of over-extension, none of the major index ETFs are too far above their T-line but the T2122 indicator remains in the lower half of the overbought territory. So, both the Bulls and the Bears have some room to run if they can manage the momentum.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Thursday was the Bulls’ Day almost from start to finish. The SPY gapped down 0.17%, DIA opened flat, and QQQ gapped down 0.35% at the open.  However, at that point, it was all Bulls, all the time until 3 pm.  The strongest rallies were from 9:30 am to 10 am, 10:30 am to 11:45 am, and 2 pm to 3 pm.  Then, the last hour of the day saw very modest profit-taking as price drifted lower into the close.  This action gave us big white candles with small upper wicks and no lower wicks in all three of the major index ETFs. The DIA bounced up off its T-line while printing a Bullish Engulfing candle and breaking out of its one-candle pullback.  The SPY Bullishly Engulfed a Doji and by day’s end, both the SPY and QQQ were again extended above their 8emas. To say the trend remains bullish is an understatement.

On the day, all 10 sectors were in the green as Communications Services (+1.52%) led the market higher and Consumer Defensive (+0.95%) was the “laggard” sector.  At the same time, SPY gained 1.24%, QQQ gained 1.19%, and DIA gained 1.28%.  The VXX gained 2.65% to 28.30 and T2122 climbed back up into the overbought territory to end at 91.60.  10-year bond yields plummeted to 3.72% while Oil (WTI) shot 3.38% higher to close at $70.58 per barrel.  So, overall, the Bulls simply ran the Bears off after the post-Fed indecision from Wednesday afternoon.  It is interesting to note that for the first time in a long time, all three major index ETFs gave us above-average volume with QQQ printing significantly greater-than-average volume.  However, none of them gave us so much volume that I would say we need to fear it was a “blowoff top.”  

In major economic news on Thursday, the May Export Price Index was far below the expected value at -1.9% (compared to a 0.0% forecast and the April -0.1% value).  At the same time, the May Import Price Index was also down but in line with expectations at -0.6% (versus the -0.6% forecast but well below the April +0.3% reading).  Weekly Initial Jobless Claims came in above the anticipated level at 262k (compared to a 250k forecast but right in line with last week’s 262k value).  Meanwhile, perhaps the oddest data was the divergence in Fed Mfg. Indices.  The NY Fed Empire State Mfg. Index came in far above expectations at +6.60 (versus a forecast of -16.00 and massively above the May reading of -31.80).  However, a relatively short distance away, the Philly Fed Mfg. Index came in slightly worse than anticipated but still down at -13.7 (versus the forecast calling for -13.5 but still a bit better than the May reading of -10.4).  So, both of the Manufacturing Indices were improved but the NY one was greatly improved and positive while Philly was still negative.  (Maybe the May NY reading was an anomaly?)  Meanwhile, May Retail Sales also came in better than expected at +0.3% (compared to a forecast of -0.1% but was slightly down from the April +0.4%).  Later, May Industrial Production Year-on-Year was reported significantly lower than anticipated at +0.23% (versus a +1.30% forecast and even less than the April +0.37% value).  The same was true on a Month-on-Month basis where the change was -0.2% (compared to a +0.1% forecast and an April value of +0.5%).  So, Industrial Production is slowing.  Later still, April Business Inventories came in line with expectations at +0.2% (compared to a +0.2% forecast and growing from the April -0.2% reading).  At the same time, April Retail Inventories came in below what was predicted at -0.2% (versus the -0.1% forecast and well better than the March +0.3% value).

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In stock news, reacting to corporate boycotts, MDLZ continues to refuse to stop doing business in Russia.  However, the company announced Thursday it will try to avoid the stigma by saying that they have stopped making new capital investments in Russia and hope to move all its Russian operations into a separate, stand-alone unit by the end of the year.  Elsewhere, MBGAF (Mercedes Benz) announced Thursday that a 3-month test program in the US will begin today (6/16), in which ChatGPT can be given partial control over car systems so that system responses to voice commands will be (hopefully) better and more natural sounding.  As a follow-on to Thursday’s Retail Sales report, Reuters says both GM and F reported that consumers unexpectedly bought more cars than the companies had forecast.  Meanwhile, DAL announced it will resume paying quarterly dividends, which had been stopped in March 2020 due to the pandemic.  (The dividend will be $0.10 per share for holders of record on July 17, paid August 7.)  Later, the Wall Street Journal reports that TSLX is considering bidding on some of the bankrupt retailer BBBY’s assets, using more than $500 million of debt it lent to BBBY as at least part of the bid.  At the same time, Reuters reports that SPCE will launch its commercial space tourism service late this month when they take three passengers into space June 27-30.  In addition, Reuters also reported that within a day of its blowout earnings report, ORCL laid off hundreds of employees and rescinded job offers within its Health unit on Thursday.  (That unit includes CERN, which ORCL acquired in December.) 

In stock legal and regulatory news, BAYRY (Bayer) and its US subsidiary MON have reached an agreement to pay NY state $6.9 million to settle claims of misleading ads claiming that Roundup weedkiller was environmentally safe. Elsewhere, Bloomberg reported Thursday that GS has paid “millions” to settle an internal complaint after an executive “accidentally” sent a sexually explicit video recording of himself to a female junior staffer. (This complaint was deemed so sensitive that it was handled at the C-suite level and overseen by CEO Solomon.)  In the opposite of government regulation, Reuters has reported that INTC and the German government are very close to a deal whereby the chipmaker will receive a $10.83 billion subsidy (up 50% from the amount originally agreed) in return for INTC building a chip-making Fab plant in Magdeburg Germany.  (A deal is expected to be signed Monday.)  Meanwhile, AMAT sued CA company Mattson (owned by Chinese company) of a 14-month effort to steal technologies and trade secrets used to AMAT’s chipmaking equipment.  Later, the Wall Street Journal reported that both the Dept. of Justice and SEC are investigating GS’s role in the final days of SIVB.

In IPO news, exuberance returned to the market as FOMO drove action on the new issue CAVA. The company had priced its IPO at $19-$20 Wednesday night, but the stock opened Thursday at $42 and reached a high of $47.89 before closing at $43.78. That amounted to a tidy 118+ percent one-day gain for those (institutions, insiders, and others) who had got in at the IPO price. The bottom line is that first, CAVA really caught the right day to list and second, the appetite for IPOs seems to have returned to markets. (Some would say that may be a sign we are nearing a top.)

After the close, ADBE beat on both the revenue and earnings lines.  This included quarter-on-quarter growth of both lines.  ADBE also raised its forward guidance.

Overnight, Asian markets were heavily green with only Taiwan (-0.27%) in the red.  Meanwhile, Shenzhen (+1.11%), Hong Kong (+1.07%), and New Zealand (+0.96%) led the rest of the region higher.  In Europe, we see the same picture taking shape at midday with only Russia (-0.28%) in the red.  The CAC (+0.90%) is out front leading the region while the DAX (+0.30%) and FTSE (+0.38%) also are driving optimism in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a flat start to the day.  The DIA implies a -0.03% open, the SPY is implying a +0.04% open, and the QQQ implies a +0.15% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.732% and Oil (WTI) is off a quarter of a percent to $70.44 per barrel in early trading.

The major economic news events scheduled for Friday are limited to the Michigan Consumer Sentiment Report (10 am) and a pair of Fed Speakers (Bullard at 3 am and Waller at 7:45 am).  There are no major earnings reports scheduled for Friday. Still, it is worth remembering that today is Triple Witching Day (the simultaneous expiration of monthly stock options, stock index futures, and stock index futures options), which causes heavy volume, especially at the end of the day.  Also, remember that Monday is a market holiday (Juneteenth).

In miscellaneous news, Bloomberg reported that markets need to prepare for more uncertainty around soon to begin flowing “economic disaster” news coming out of Washington.  On Thursday, and in spite of claims that they had no such plans earlier this year, a 176-member group of the GOP House members proposed cuts to Social Security in the form of raising the retirement age to 69.  The group’s plan would also subsidize private alternatives to Medicare.  (This would apparently be a precursor to eliminating that government program at some later time.)  The group’s plan (appropriation bills proposals) calls for 30% cuts to all the non-defense areas of the budget…and also for another $5.1 trillion round of tax cuts.  (All of these measures are contrary to what they agreed to and was signed into law by the debt ceiling deal just two weeks ago.)  So, this is the start of what will clearly be another round of GOP brinksmanship. This time, instead of threatening a default of US debt, they will threaten a government shutdown, leading up to the September fiscal year-end.  So, be prepared for coming daily market swings (chop or volatility) based on a series of “the world is ending” and “I’m the most XXX and the other side are all YYY” proclamations from every politician, economist, pundit, Tom, Dick, and/or Harry.  In other government news, several US federal agencies joined a growing list of companies (SHEL as one example) and governments hit by a global hacking campaign known as MOVEit.  This attack took advantage of a flaw in PRGS company software that is widely used (globally) in information infrastructures.

With that background, it looks like the large-cap indices are looking to start Friday with a little rest (modestly lower open). However, QQQ is near premarket highs at this point and the Bulls seem to want to keep running in the tech-heavy index. All three major index ETFs remain above their T-lines (8ema). So, at least at this point, there is no way to see the market except in a bullish trend. In terms of over-extension, the QQQ is far above its 8ema as of this moment while the premarket action has allowed SPY to get some extension relief. The T2122 indicator is back inside of the overbought territory, but only midway into that measure of overextension. A few other things to keep in mind. First, we have had a hell of a bullish run-up this week. So, profit-taking would seem to be in order (don’t be surprised if we see it by the market overall today). Secondly, the first point is especially true ahead of the upcoming 3-day weekend (and you also need to prepare your account for that off period…take profits, hedge, lighten up, move stops, etc.). Finally, it is “triple witching” (the fourth witch stopped trading in 2020). So, we should expect heavy volume today…particularly at day end…with the possibility of “pinning” or even increased volatility in spots. (Triple witching does not tend to increase volatility overall…but you can drown in a river that viewed overall is only a quarter inch deep.)

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Markets diverged again today as DIA continued to be a laggard and contrary to the two other major index ETFs.  SPY opened very modestly higher (up 0.08%), while QQQ opened up 0.04% higher, but DIA gapped down 0.34%.  After the open, SPY and QQQ rallied all morning, reaching the highs of the day at 11:25 am.  At that point, they both began a slow selloff that lasted until 2 pm.  Meanwhile, DIA ground sideways in a tight range until 2 pm after its gap lower.  However, the Fed statement at 2 pm caused the major index ETFs to “sync up” as the market crashed hard for 30 minutes, rallied hard for 30 minutes, and then fell a little less violently during the last hour of the day.  However, the SPY and QQQ did rebound in the last 5 minutes much more than the DIA.  This action gave us indecisive candles in all three major index ETFs.  The SPY printed a long-legged Doji, the DIA a gap-down black-bodied Spinning Top, and the QQQ a white-bodied Hammer or Hanging Man.

On the day, seven of the 10 sectors were in the red as Healthcare (-0.82%) led the market lower, while Consumer Defensive (+0.49%) and Technology (+0.47%) held up much better than other sectors.  At the same time, SPY gained 0.12%, QQQ gained 0.73%, and DIA fell 0.65%.  The VXX fell almost 3% to 27.57 and T2122 dropped back to just outside the overbought territory to 77.19.  10-year bond yields fell to end at 3.796% while Oil (WTI) lost 1.04% to end the day at $68.69 per barrel.  So, overall, it was a divergent day punctuated by the volatility caused by the FOMC.   Still, all three index ETFs remain above their T-lines (8ema) even as DAI retested and held its T-line during the day.  This all happened on well-above-average volume in the QQQ, slightly above-average volume in the DIA, and average volume in the SPY. 

In major economic news, the May PPI (month-on-month) came in better than expected at -0.3% (compared to a forecast of -0.1% and much better than the April value of +0.2%).  At the same time, May Core PPI was reported in line with expected values at +0.2% (exactly matching the forecast and April reading, which were both +0.2%). Later in the morning, the EIA Weekly Crude Oil Inventories came in well above the anticipated level at a build of 7.919-million-barrels (versus a forecast calling for a build of 1.482-million-barrels and far above the previous week’s 0.451-million-barrel drawdown).  However, the main news of the day came from the FOMC.  In terms of Fed Funds rate projections (dot plot), the Fed’s Q2 forecast expects current rates to top out at 5.6% (was 5.1%) this year, one year from now they expect to be at 4.6% (was 4.3%), and two years out they now anticipate the rate to be set at 3.4% (was 3.1%).  Clearly, these were all increases from the projections in the Q1 forecasts.  Their longer-term projection is for rates to fall to 2.5% (the same as it has been since 2019).  With that said, the FOMC did pause rate hikes for the first time in 10 meetings or 18 months, holding rates at the previous 5.00% to 5.25% level.

In terms of Fed speak, as noted above the FOMC statement expects Fed Funds rates to top out at 5.6% later this year.  This implies two more quarter-point hikes spread out across the four remaining 2023 meetings. (This hawkish stance was unexpected by the market and caused the big 2 pm knee-jerk downward.)  They were more upbeat about the 2023 economy, expecting the job market to endure only “small job losses” (compared to a much more somber March statement) as they project the Unemployment Rate will rise to 4.1% before year-end. At the same time, they see inflation on a very similar path to what they had projected in March.  For example, they expect PCE (their preferred inflation measure) to fall to 3.2% later this year.  (They had forecasted it would only fall to 3.4% this year at the March meeting).  Nonetheless, they still anticipate Fed Fund rate cuts (about 1%) to begin in 2024 in order to stimulate growth because they expect Unemployment to reach 4.5% in 2024. 

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As for Chair Powell himself, in addressing the pause, he said, “We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt.”  Later, he tried to “walk back” the Fed Funds rate forecast by saying he thinks rate cuts are “about a couple of years out” (as opposed to one).  However, he also said “I would almost say that the conditions that we need to see in place to get inflation down are coming into place.”  (He later defined that progress to mean “growth meaningfully below trend.”)  The Chair also said that good financial conditions are likely to allow the Fed to push hard on the reduction of its balance sheet (which itself will act as a means of taking liquidity out of the market).  Finally, Powell pushed back against the idea that the FOMC had already made a decision about what they would do in July.  Specifically, he said “I would say two things: One, a decision hasn’t been made. Two, I do expect that it will be a live meeting.”  With that said, as of 5:30 pm Wednesday the CME Fedwatch Tool says that is a 64.5% probability of a quarter-point hike in July (the other 35.5% bet on no hike at that meeting). 

In stock news, health insurance companies took a hard hit Wednesday when UNH announced its costs were rising due to an increase in surgeries by older adults.  (HUM took the worst hit plummeting 11.24%, CVS dropped 7.76%, ELV fell 6.89%, UNH itself was down 6.4%, and CI fell “just 3.11%.)  In better (shareholder) news, SHEL said it will increase shareholder distribution to 30%-40% of cash flow (up from the current 20%-30%).  This includes a 15% boost in dividends as well as an increase in the size and pace of share buybacks.  This comes as the new CEO said the company is doubling-down on its “oil and gas” units shifting away from previous efforts to grow “renewables and low-carbon” businesses.  Elsewhere, VLKAF said on Wednesday that it expects to realize $10.83 billion in savings from cost-cutting and operational efficiency gains by 2026.  At the same time, in boycott news, BUD’s Bud Light beer lost its spot as the top-selling beer in the US (for the week ending June 3) to STZ’s Modelo Especial brand following the backlash from conservatives who did not like BUD doing a social media promotion with transgender influencer Dylan Mulvaney.  (Modelo had 8.4% of US beer sales while Bud Light came in second at 7.3% after Bud Light experienced a 24.6% decrease in sales.)  Meanwhile, GOOGL announced it is launching two new AI-powered features for advertisers designed to automatically find the best ad placements across GOOGL platforms.  Later, SCHW announced it is now forecasting a 10%-11% drop in Q2 revenue due to interest effects and soft trading activity.  (SCHW said it has had to rely on more expensive funding sources than had been expected.)

In stock legal and regulatory news, the FAA said Wednesday that all new passenger aircraft will be required to have a secondary barrier to prevent flight deck intrusions. The rule will not take effect until two years from the “effective date” which itself will not be until August.  This comes as plane manufacturers (BA and EADSY), unions, and the major airline trade group have fought the rule for years.  (The rule was originally supposed to be adopted in 2019.  However, industry interest groups have been very successful in dragging out the implementation as lobbying money and lawyers carry a big stick in Washington.  In other air industry news, in a nod to airline labor shortage problems, the US House voted to raise the mandatory pilot retirement age from 65 to 67 as part of the FAA reauthorization bill expected to be taken up by the whole House next month.  Elsewhere, in Canada, the country’s budgetary watchdog now estimates that the subsidies (tax credits) paid to VLKAF in order to obtain a battery plant will cost their government $1.8 billion (US) more than forecast.  This news comes as tense negotiations are underway between Canada and STLA over the subsidies given to garner its own battery plant.  Meanwhile, President Biden vetoed a bill that would have scrapped limits on the pollution produced by heavy trucks and buses.  This leaves in place EPA rules cutting emissions by 2032 despite GOP and transportation industry objections to the reductions which they say will be too costly to implement over 9 years.

After the close, LEN beat (significantly) on both the revenue and earnings lines.  (The homebuilder posted more than a 12% upside revenue and a 27% upside earnings surprise.)  It is worth noting that the company also raised its forward guidance.

Overnight, Asian markets were mixed.  Hong Kong (+2.17%) and Shenzhen (+1.81%) were by far the biggest gainers while losses were modest, led by South Korea (-0.40%) and India (-0.36%).  Meanwhile, in Europe, the bourses are mostly lower at midday.  The CAC (-0.83%), DAX (-0.70%), and FTSE (+0.04%) lead the way on volume and market cap as usual.  However, Norway (+0.75%) is the biggest of the four gainers in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.41% open, and the QQQ implies a -0.73% open at this hour.  At the same time, 10-year bond yields are back up to 3.829% and Oil (WTI) is up just over 1% to $68.98 per barrel in early trading.

The major economic news events scheduled for Thursday include May Retail Sales, May Imports, May Exports, Weekly Initial Jobless Claims, NY Empire State Mfg. Index, and Philly Fed Mfg. Index (all at 8:30 am), May Industrial Production (9:15 am), April Business Inventories and April Retail Inventories (both at 10 am).  The major earnings reports scheduled for Thursday are limited to KR, JBL, and WLY before the open.  Then, after the close, ADBE reports.

In economic news later this week, on Friday, we Michigan consumer Sentiment, and a Fed Speaker (Waller at 7:45 am).

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

In miscellaneous news, the ECB is expected to raised rates to the highest level in 22 years and leave the door open to more rate increases at 8:15 am today.  Unlike the US, even as the Euro Zone economy flags, the ECB is fighting against the highest inflation in the ECB’s 25-year history (now 6.1%).  Still, this increase is only expected to take ECB rates to 3.5% (nearly two full percent below the US Fed Funds rate).  On this side of the pond, UPS and Teamster negotiators have agreed to one of the key sticking points in their ongoing contract negotiations.  UPS will install air conditioning in its entire fleet of 95,000 delivery vans.  Finally, CAVA priced its IPO last night at $22 per share with 14.4 million shares on offer as of sometime today.  (IPOs typically open after the opening bell as opposed to with the bell.)

With that background, it looks like the Bears are trying to open markets near the lows of the premarket prices. All three major index ETFs remain above their T-lines (8ema). So, at least at this point and by that measure we remain in a bullish uptrend and the move is nothing but a minor pressure relief after five very strong days (at least in the QQQ and SPY). However, the ECB Rate decision or (more likely) the large US data dump at 8:30 am may change that premarket outlook. Expect there to be some volatility now that markets have had a little time to digest the Fed data and words from yesterday. In terms of over-extension, none of the major index ETFs are too far from their T-line as of premarket and the T2122 indicator has dropped back outside of the overbought territory. So, the bulls have some slack if they gather the momentum and, of course, the bears have plenty of room if they want to make a charge.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Tuesday was another day in the Bulls’ column right from the start after a cooler-than-expected CPI number.  The SPY gapped 0.34% higher, DIA gapped 0.17% higher, and QQQ gapped 0.78% higher at the open.  At that point, both of the large-cap index ETFs followed through for the first 15 minutes before selling off back down to the Opening level by 10:15 am.  At that point, both the SPY and DIA rallied back to the highs of the day shortly before 2 pm.  Then we saw an hour of selloff back near the open and an hour of mild rally to end the day in both of those large-cap index ETFs.  Meanwhile, at the open, QQQ almost immediately sold off completely recrossing the opening gap by 10:15 am.  It then rallied back to the open level by 11:30 am and chopped along that level until 1:50 pm.  At that point, the QQQ sold off for 45 minutes and then rallied the last hour of the day to close very near where it opened.  This action gave us gap-up, indecisive candles across all the major indices.  QQQ printed a Doji, SPY printed a white-bodied Spinning Top, and the DIA printed a white-bodied candle with a large upper wick. 

On the day, eight of the 10 sectors were in the green as Basic Materials (+1.79%) led the market higher, while Utilities (-0.11%) and Communication Services (-0.10%) were the lagging sectors.  At the same time, SPY gained 0.66%, DIA gained 0.43%, and QQQ gained 0.77%.  The VXX fell slightly to 28.42 and T2122 climbed even further into the overbought territory to 96.27.  10-year bond yields climbed briskly to end at 3.821% while Oil (WTI) gained 3.02% to end the day at $69.16 per barrel.  Overall, all three index ETFs remain well above their T-lines (8ema) with the QQQ and SPY now extended from it.  This all happened on average volume in all three (slightly below average in the SPY and slightly above average in the QQQ).  So, Tuesday was the Bulls’ Day again but there was indecision.  Perhaps this was a nod to the FOMC announcements ahead or maybe to a lack of drama at the Miami courthouse.  Either way, we go into Wednesday up against potential resistance in the DIA, a bit below it in the SPY, and with room to run in the QQQ.

In major economic news Tuesday, May CPI came in below expectations on a month-over-month basis at +0.1% (compared to a forecast of +0.2% and significantly better than April’s +0.4% reading).  On a year-on-year basis, May CPI also came in better than was anticipated at +4.0% (versus the forecast of +4.1% and much better than the April +4.9% value).  If you look deeper, May Core CPI came in just as expected at +0.4% (month-on-month) and +5.3% (year-on-year).  It is worth noting that the year-on-year value was down two-tenths of a percent from the April reading.  So, overall, this tells us inflation is cooling but remains well above a 2% target.  If you are a hawk, you would say there is a long way to go and the Fed should hike rates more and faster.  On the other side, if you are a dove, you’d say inflation has fallen dramatically (more than 5%) in the last year and the Fed probably should pause to give what they’ve done already a little more time to work (in order to reduce the risk of a hard landing).  Later, after the close, API Weekly Crude Oil Stocks reported an unexpected inventory build of 1.024-million-barrels (versus the expected 1.291-million-barrel drawdown and last week’s 1.710-million-barrel drawdown).

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In stock news, AMD announced a new AI chip that will compete with NVDA’s chips in the same market, starting in Q4.  The AMD chip will have more memory and be more power efficient than NVDA’s current offerings.  However, NVDA will still have the absolute single-chip computing power lead.  At the same time, BA announced that it has delivered 50 737 MAX jets in May (13 less than Airbus but still a 43% improvement over May 2022) as production recovered from the discovery of a defective part.  Elsewhere, Reuters reported that AMZN is now excluding the Chinese rival site Temu (which is owned by PDD) from its “competitive price checks” algorithm.  This could mean that suppliers could sell the same product on Temu at a lower price than AMZN without incurring the online giant’s wrath.  (AMZN is betting it doesn’t have to match/beat Temu prices because buyers won’t check other sites to compare thus raising margins.)  Later, UAL announced that it expects the new contract it is offering pilots to add more than $8 billion in costs over four years (if the deal is approved by the union).  For reference, the deal DAL reached with its pilots in March is expected to add $7 billion to that airline’s costs over the same period.  At the same time, IN Gov. Holcomb announced that GM and Korean manufacturer Samsung will build a $3 billion EV battery plant in the state (planned to begin production in 2026). Later in the day, FSLY disclosed new pricing and product packages.  FSLY shares jumped 8.42% on the news.  Meanwhile, TSN announced that it will terminate 228 corporate employees in Chicago who have refused to relocate to the company’s AR headquarters.  (This is identical to the action taken for employees at the TSN location in SD.) 

In stock legal and regulatory news, STLA recalled 354,000 Jeeps from 2021 to 2023 model years according to the NHTSA.  The recall was over rear coil springs that might fall off while driving after faulty installation.  Elsewhere, Sky News in the UK reports that CNNWQ (Cineworld), who is the primary rival of AMC, is preparing to file for the British version of bankruptcy (administration).  For their part, AMC tells Reuters it is still on track to emerge from US bankruptcy in July.  Later, the state of NY fined BRKa’s Geico insurance unit for violating the state’s law about timely reporting of the vehicle insurance status of vehicles registered in the state.  Late in the day, the NHTSA released a report saying that TSLA Autopilot software has been involved in 736 crashes resulting in 17 fatalities since 2019.  (This was a dramatic increase from the same report in June 2022 when the software had only been linked to three deaths.)  Meanwhile, MMM appealed the dismissal of its subsidiary bankruptcy case in an effort to avoid liability from 260,000 pending lawsuits claiming hearing loss from defective military earplugs.  At roughly the same time, a US appeals court partially revived a shareholder lawsuit (alleging the company concealed a life insurance policy reserves shortfall) against PRU.  That shortfall caused a 10% drop in share price when it was announced in November 2019.  At the close, the NHTSA sided with automakers by issuing a letter to those automakers telling them not to comply with a MA “Right to Repair” law requiring that they release auto telemetry data to independent repair facilities.  The excuse used was that the MA law would pose a safety concern.  Also after the close, it was announced that GOOGL must postpone the planned release of its Bard AI in the EU (formerly planned for this week) due to privacy concerns raised by the Irish Data Protection Commission.  Finally, a US Patent Office tribunal sided with INTC in its bid to invalidate a patent held by VLSI Technology.  The invalidation will cancel out a $1.5 billion patent infringement verdict delivered against INTC in 2021.

In mortgage news, last week the 30-year, fixed-rate, conforming loan rates fell to an average of 6.77% (down from 6.81% the prior week).  As a result, home refinance loan applications rose 6% (but were still 41% lower than the same week in 2022).  New home purchase loan applications climbed 8% for the week. However, they remain 27% below the same week during the previous year.  Overall, this led to a 7.2 increase in mortgage application volume for the week.

Overnight, Asian markets were mostly in the green.  Japan (+1.47%) was by far the biggest winner with Singapore (+0.90%), and Malaysia (+0.35%) rounding out the top gainers.  Meanwhile, South Korea (-0.72%) and Hong Kong (-0.58%) gave us the only significant losses in the region.  In Europe, the bourses lean heavily to the upside at midday with only two spots of red among 13 green exchanges.  The CAC (+0.84%), DAX (+0.57%), and FTSE (+0.55%) are leading Europe higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed and modest start to the day ahead of data.  The DIA implies a -0.11% open, the SPY is implying a +0.19% open, and the QQQ implies a +0.14% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.827% and Oil (WTI) is climbing up 1.3% to $70.33 per barrel in early trading.

The major economic news events scheduled for Wednesday include May PPI (8:30 am), EIA Crude Oil Inventories (10:30 am), Q2 Fed Interest Rate Projections Current year, 1^st year, and 2^nd year, FOMC Economic Projections, FOMC statement, and Fed Interest Rate Decision (all at 2 pm), and the Fed Chair Press Conference (2:30 pm). The major earnings reports scheduled for Wednesday are limited to LEN after the close.

In economic news later this week, 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 Michigan consumer Sentiment, and a Fed Speaker (Waller at 7:45 am).

In terms of earnings reports later this week, on Thursday, KR, JBL, WLY, and ADBE report.  Finally, there are no reports on Friday.

In late-breaking news, the MSFT $69 billion acquisition of ATVI hit another snag on Tuesday evening as a CA federal judge placed a restraining order on the deal to give the FTC challenge time to be heard in the courts.  Elsewhere, Bloomberg reports this morning that the ECB is calling in $540 billion in loans to European banks (pandemic emergency loans) at one time.  This will be a real stress test, especially for smaller banks and especially the ones in Italy and Greece.  Finally, as reported here earlier, the EU has now charged GOOGL with anticompetitive practices in their ad business.  In a preliminary conclusion the European Commission that GOOGL advertising tech is dominant in the European ad buying/publishing market and is abusing that position to harm competitors.  The commission suggested GOOGL may be forced to break up, removing its ad marketplace platform from its ad-selling unit.

With that background, it looks like the Bulls in the QQQ and SPY are tentatively looking to make another push at the open today but also that the DIA remains unsure of this move and is leaning downward. All of this is subject to change based on the PPI numbers. However, those are usually less influential than the CPI data we got yesterday. The pivotal data of the day will obviously come from the Fed at 2 pm and 2:30 pm. Expect there to be at least two jolts at that point. (Usually, we get a knee-jerk reaction…and then a counter-reaction. Sometimes even followed by a re-reaction.) QQQ (and to a lesser extent SPY) is extended away from its T-line at this point. Meanwhile, the T2122 indicator is also deep in the overbought territory. So, rest or a pullback is in order regardless of outside data. So, just be prepared for the volatility in what is otherwise a bullish market.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Monday 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).

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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.

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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.

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