Friday brought the markets a divergent open with the QQQ gapping up 0.55%, SPY gapping up 0.29%, and DIA opening 0.09% higher.  The two large-cap indices then immediately recrossed the gap in the first 5 minutes before all three began a morning rally that lasted until 11:30 am.  This was followed by a sideways grind until 1:15 pm when all three major indices pulled back for a few minutes before starting another rally at 1:25 pm.  This rally lasted the rest of the day, closing very near the highs of the day.  This action gave us Morning Star signals in both the SPY and QQQ.  The DIA printed a similar candle, but the Friday candle didn’t climb enough to qualify as a Morningstar.  SPY and QQQ also climbed back above their respective T-line (8ema) and 50sma levels.  This happened on greater than average volume in the SPY and QQQ and less than average in the DIA.

On the day, all 10 of the sectors were in the green as Technology (+2.87%) led the way higher and Utilities (+0.71%) lagged the other sectors.  Meanwhile, the SPY was up 1.86%, the DIA was up 0.92%, and QQQ was up 2.74%. At the same time, the VXX fell 3.57% to 12.17, and T2122 spiked back up into the overbought territory at 92.13.  10-year bond yields rose to 3.481% and Oil (WTI) was up 1.33% to $81.40 per barrel.  So, on the day we saw a divergent, blah opening followed by two sustained rallies broken up by a mid-day pause for rest. 

In economic news, on Friday, December Existing Home Sales came in a little better than forecast at 4.02 million (versus the expected 3.96 million and the Nov. reading of 4.08 million).  Later Philly Fed President Harker (voter) said he expects a few more Fed hikes but he favors them being quarter-point hikes.  He expects the Fed Funds Rate to go above 5% and then favors holding it there for some time.  Interestingly, he said he sees the economy slowing but NOT tipping into recession.  At the same time, KC Fed President George (non-voter and retiring this month) said a soft landing is still possible and that she supports a moderation in the pace of hikes.  In the afternoon, Fed Governor Waller (voter and hawk) told the Council on Foreign Relations that he supports scaling-back rate hikes to 0.25% at this next meeting and feels the FOMC is “pretty close” to interest rates that are “sufficiently restrictive” to bring inflation back to the 2% target.   He also said that under the current policy, he expects inflation to fall to between 3% and 3.5% by year-end.  Those remarks end the Fed Speak prior to the Feb. 1 decision as they hit the “pre-meeting quiet period” on Saturday.

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In stock news, Reuters reported Friday that AMZN will be investing $35 billion by 2040 into expanding data centers in Virginia.  Pending state approval of up to 15 years of additional Sales and Use tax exemptions, the investment would yield 1,000 new jobs in the state.  Elsewhere, AAPL won an appeal that throws out a $308.5 million jury verdict against the company for infringing a patent related to digital rights management.  In other AAPL news, the company has begun layoffs in its retail stores (particularly kiosk-type locations inside other retail locations) as of Friday.  Meanwhile, GM (and Korean partner LG Energy Solutions) has indefinitely shelved plans to build a fourth GM-specific US battery plant.  Across the Atlantic, a French court ordered UBER to pay 139 drivers a total of $18.43 million in damages and lost salaries.  This is a follow-up on a 2020 decision by the top French court, ruling the drivers were employees and not contractors.  UBER plans to appeal the damages award.  Finally, ABB sold its US power conversion business unit for $505 million to a Swiss company.  The deal is scheduled to close in the second half of 2023, subject to US and Taiwanese regulatory approvals.

In energy news, the Texas Pubic Utilities Commission voted for what amounts to an increase in electricity costs in that state. The commission voted unanimously to require electric utilities to pay power plants to remain on standby as well as directing the Texas grid operator (ERCOT) to build new generation sources.  In other energy news, Natural Gas prices continued its plummet Friday, closing down more than 4.3% to 19-month low of $3.134/mmBtu (actually a rebound from the session lows of $3.11). Elsewhere, Bloomberg reported a flurry of outages at Canadian processing facilities has again disrupted the flow of oil to the US.  Chief among these were outages at a CNQ “oil-sands upgrading” facility (which starved the ENB Mainline pipeline) and another ice-caused outage of the Keystone pipeline (this time on the Canadian side of the border).

It is easy to get pessimistic in the face of headlines about huge job cuts.  However, consider this perspective.  First, remember that job cuts are almost universally good for big corporate bottom line.  Second, take a broader view of those big tech layoffs, such as the numbers that were reported this weekend by Morning Brew.  MSFT hired more than 40,000 people in the 18 months ending in December.  So, even after last week’s layoffs, the company has added 30,000 jobs since July 2021.  Meanwhile, GOOGL laid off 12,000 last week, which was less than one-third of the 36,750 new jobs it added in just the first nine months of 2022.  Finally, META recently cut 11,000 jobs.  That’s a lot unless you compare it to the 26,000+ jobs META added in 2020 and 2021.  In other words, even after these mass layoffs, the tech titans have still grown massively in the last couple of years.  So, reorganizing to improve efficiency was very likely in order, regardless of economic conditions.

So far this morning, SYF has reported a beat on both the revenue and earnings lines.  However, BKR reported a miss on both the top and bottom lines.

Overnight, Asian markets were green across the board on modest moves, but keep in mind that many Asian markets are closed to celebrate Lunar New Year.  Japan (+1.33%) was an outlier to the upside.  Meanwhile, in Europe, we see a similar picture taking shape at midday.  Only the FTSE MIB (-0.44%) is showing red while the FTSE (+0.33%), DAX (+0.08%), and the CAC (+0.10%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.01% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.07% open at this hour.  At the same time, 10-year bond yields are up to 3.504% and Oil (WTI) is up three-quarters of a percent to $82.24/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include BKR and SYF before the opening bell.  Then, after the close, BRO, CR, LOGI, and ZION report.

In economic news later in the week, on Tuesday we get Mfg. PMI, Global Composite PMI, Services PMI, and API Crude Oil Stocks.  Then Wednesday EIA Crude Oil Inventories are reported.  On Thursday, we get Dec. Durable Goods Orders, Q4 GDP, Dec. Goods Trade Balance, Weekly Initial Jobless Claims, Dec. Retail Inventories, and Dec. New Home Sales.  Finally, on Friday, Dec. PCE Price Index, Dec. Personal Spending, Michigan Consumer Sentiment, and Dec. Pending Home Sales are reported.

In terms of earnings, on Tuesday, we will hear from MMM, DHI, DHR, GE, HAL, IVZ, JNJ, LMT, ONB, PCAR, RTX, TRV, UNP, VZ, CNI, COF, FFIV, ISRG, MSFT, SLGN, TXN, and WAL.  Then, on Wednesday, ABT, APH, ASML, T, ADP, BA, BOKF, ELV, FCX, GD, GPI, HES, KMB, NDAQ, NEE, NSC, BPOP, PGR, TTM, TEL, TDY, TXT, USB, AMP, AXTA, AXS, BOOT, CACI, CLS, CCI, CSX, FLEX, IBM, LRCX, LVS, LEVI, LBRT, PKG, PLXS, RJF, STX, NOW, STLD, TER, TSLA, and URI report.  Thursday, we hear from VLVLY, ALK, AAL, AIT, ADM, ATLKY, BX, BFH, BFH, CRS, CNX, CMCSA, CFR, DOW, EXP, EWBC, FCNCA, JBLU, HZO, MMC, MA, MKC, MBLY, MUR, NOK, NOC, NUE, ORI, ROK, SAP, SHW, LUV, STM, TROW, TSCO, VLO, VLY, WBS, XEL, XRX, AJG, EMN, INTC, KLAC, KNX, LHX, OLN, RMD, RHI, V, WRB, and WY.  Finally, on Friday, AXP, ALV, BAH, CHTR, CVX, CL, GNTX, HCA, and ROP report.

In late-breaking news, the US Dept. of Justice has opened a probe into ABT or more specifically Abbott’s Sturgis MI infant formula plant which was shut down in 2022 after inspections and caused a national infant formula shortage. (Abbott’s Sturgis plant makes roughly 25% of the US supply of infant formula.) Meanwhile, overseas, India’s Commerce Minister said that AAPL is planning to manufacture 25% of its iPhones in India. That would be a major increase over the 6% of iPhones manufactured in India in the past. This would take advantage of India’s very cheap labor and less restrictive labor laws (Indian workers for AAPL’s primary contract manufacturer Foxconn rioted in 2022 because they had not been paid in three months). No timing for the transition was announced, but JPM cited the same move could be made by 2025 in a September research note. Elsewhere, French President Macron is forging ahead with changes that will raise the retirement age in France. Unions are still supporting the protesters, who have caused gridlock in many major cities in France. In addition, unions have announced a second day of general strikes on January 31. Finally, the US Dollar is down this morning against the Euro and Yen. This comes as ECB Hawks are talking up rate hikes in Europe.

With that background, it looks like the premarket indices are flat and remain undecided this morning. , but not making major moves either direction. The SPY is retesting its 50sma, the DIA looks like it will head up to retest its T-line (8ema) again and QQQ is retesting previous highs. Only the QQQ has any extension from its T-line, but the T2122 indicator is deep into the overbought territory. The Fed is in a quiet period, so we don’t have to worry about Fed-speak. However, there will be several major earnings reports this week (as outlined above). So, be careful of earnings dates. However, the market bias is bullish in the SPY and QQQ with the DIA in more of a sideways wedge formation.

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

Swing Trade Ideas for your consideration and watchlist: SWKS, TSLA, PINS, MU, GOOG, META, WB, AMZN. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

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

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

On Thursday, markets gapped lower at the open (down 0.58% in the SPY and DIA, and down 0.67% in QQQ).  The bears then led a modest follow-through selloff until noon.  At that point, the bulls stepped in to lead an equally tepid rally back to the level of the open at 1:30 pm.  The bulls kept going, reaching the highs of the day at about 2:45 pm.  From there we saw another selloff that took us to the close.  All three major indices also fell through and remain below their 50sma again and the QQQ fell through its T-line.  This action gave us a gap-down, black-bodied, Spinning Top, indecisive candles for the day.  This all happened on less than average volume.

On the day, nine of the 10 sectors were in the red as Industrials (-1.65%) led the way lower and Energy (+1.16%) held up best among the sectors.  Meanwhile, the SPY was down 0.69%, the DIA was down 0.67%, and QQQ was down 0.98%.  At the same time, the VXX was up a half of a percent to 12.62 and T2122 fell but remains in the midrange at 38.06.  10-year bond yields rose slightly to 3.399% and Oil (WTI) was up 1.13% to $80.38 per barrel.  So, on the day we saw a gap-down follow-through on Wednesday’s big black candle, but much indecision after the open. None of the three major averages put in a new lower-low.  That means at this point, it’s still just a pullback in a bull trend.

In economic news, December Building Permits came in slightly lower than expected at 1.330 million (compared to a forecast of 1.370 million and the November reading of 1.351 million).  However, December Housing Starts came in a bit above expectation at 1.382 million (versus a forecast of 1.359 million but still less than the Nov. reading of 1.401 million).  At the same time, Weekly Initial Jobless Claims came in well lower than expected at 190k (compared to the forecast of 214k and the prior week’s reading of 205k).  And, again at 8:30 am, the Philly Fed Mfg. Index also came in better than was forecast at -8.9 (versus an average expectation of -11.0 and the November reading of -13.7).  Finally, later in the day, the EIA Crude Oil Inventories came in much higher than expected, showing an inventory build of 8.408-million-barrels (compared to a forecast of a drawdown of 0.593-million-barrels but still lower than the previous week’s value of +18.962-million-barrels).

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In stock news, WE announced that is planning a small (300 jobs) cut in its workforce. On the same front, COF announced that it has cut 1,100 technology positions.  In other news, KKR has blocked investors from cashing out of one of its untraded REITs after withdrawal requests exceeded their own pre-set limits.  This follows the same move made by BX recently as the REIT industry is under pressure.  Meanwhile, NCLH announced it will sell $500 million in bonds in order to repay existing outstanding debt.  Meanwhile, a state office of the National Labor Relations Board is seeking an order to force SBUX to collectively bargain with workers at a Florida store, even though the store employees voted against unionizing.  The order, which must be approved at a regional level, was sought after the Florida NRLB office determined that complaints of SBUX management threatening and surveilling store employees were valid and so prejudicial that even a new election would be futile.  Elsewhere, after hours, JWN slashed its forward guidance citing the company’s need to do heavy holiday promotions which will hurt earnings.  Finally, a Texas judge has ruled BA will be arraigned on Jan. 26 on charges of felony fraud related to the deaths resulting from the 2021 crashes of 737 Max jets.  This came after families of those killed objected to a 2021 plea deal, that would have given BA immunity from criminal prosecution.

In Fed news, Vice Chair Brainard (voter) said Thursday that evidence in support of a “soft landing” is growing.  She cited falling inflation and a lack of “major job losses” (with unemployment still at 3.5%).  She did not address what she felt might be the right size of hike on Feb. 1, but did say that the full impact of the FOMC’s earlier hikes have not yet been fully felt.  Note that Friday will be the last day for “jawboning” before the Fed’s blackout period ahead of the Jan. 31 meeting starts on Saturday.

In energy news, on Thursday, Natural Gas closed at its lowest level since June 2021 at a price of $3.275/mmBtu.  This is part of a stunning selloff from the late-November price of $7.31/mmBtu. Earlier in the day, the EIA reported that the Biden Administration has stopped withdrawing crude from the US Strategic Oil Reserve after 14 months of taking oil out of that storage to tamp down fuel prices.  The US is already negotiating with oil companies on purchases to refill the reserve.

After the close, PPG reported a beat on both the revenue and earnings lines.  At the same time, NFLX and SIVB both reported beats on revenue while missing on earnings.  However, CNXC missed on both the top and bottom lines.  It is worth noting that PPG also lowered its forward guidance.  So far this morning, ERIC, SLB, SDVKY, ALLY, HBAN, and RF have all reported beats on both the revenue and earnings lines.  (STT reports closer to the opening bell.) 

Overnight, Asian markets leaned heavily to the green side on mostly modest moves.  Hong Kong (+1.82%) was an outlier to the upside while New Zealand (+0.77%), Shanghai (+0.76%), and South Korea (+0.63%) led the pack higher.  Only Thailand (-0.67%) and India (-0.44%) were in the red.  Meanwhile, in Europe, we see a very similar picture at midday.  The FTSE (+0.13%) lags, while the DAX (+0.42%) and CAC (+0.56%) lead the region higher in early afternoon trading.  Only Russia (-0.26%) and Denmark (-0.15%) are showing red at this time.  As of 7:30 am US Futures are pointing toward a mixed open.  The DIA implies a -013% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.51% open at this hour.  At the same time, 10-year bond yields are back up to 3.437% and Oil (WTI) is up fractionally to $80.49/barrel in early trading.

The major economic news events scheduled for Friday are limited to Dec. Existing Home Sales (10 am) and two Fed speakers (Harker at 9 am and Waller at 1 pm).  The major earnings reports scheduled for the day include ALLY, ERIC, HBAN, RF, SLB, and STT before the opening bell.  There are no reports scheduled for after the close.

In late-breaking news, GOOGL joined the chorus of tech giants doing layoffs by announcing 12,000 workers will be laid off globally. This amounts to 6% of the GOOGL workforce. Elsewhere, NFLX founder Reed Hastings stepped down as CEO but will remain Chairman of the board. Two existing executives were named Co-CEO in his place. In other news, crypto lender Genesis filed for bankruptcy after months of speculation that it would do so. Finally, the Frech economy was slowed by strikes and protests today after President Macron announced his plan to raise the French retirement age from 62 to 64 yesterday. French unions are supporting the protesters and have announced a second day of general strikes on January 31. However, Macron argued that the move is needed (due to an aging population) in order to avoid emptying the country’s pension fund.

With that background, it looks like premarkets are undecided this morning, but not making major moves either direction. The QQQ is retesting its T-line (8ema) again (and maybe its 50sma from below a bit later), while SPY is retesting a resistance level above. Extension is no problem with T2122 in its midrange and only the DIA being any real distance from its T-line. So, the bears do have a little room to run if they can muster the sellers. It still looks like DIA may be headed down to retest its 200sma sometime soon. Remember that it’s Friday (payday) and time to take some profits off the board and prepare your account for the weekend news cycle. Finally, it is the last day of Fed speak before the quiet period leading to the FOMC meeting starting Jan 31. So, we have two scheduled Fed speakers, but don’t be surprised if a few others pop their heads out to take a last whack at preparing markets. The Fed Futures are now extremely confident the Feb. 1 hike will be 0.25% (showing a 94.3% probability compared to just a 5.7% probability of a 0.50% hike). However, the hawks (like Bullard) have been talking about wanting a 0.75% hike. So, the risk is bearish for the market as a higher rate hike would hammer markets and give the bears energy to roar.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets started the day with a modest gap higher at the open (up 0.29% in the SPY, up 0.20% in the DIA, and up 0.65% in the QQQ).  However, after 30-40 minutes of drift to the side, the bears stepped in to lead a long, slow, all-day selloff.  This took all three major indices out near the lows.  That action gave us Evening Star-type signals in the SPY and QQQ as well as follow-through to Tuesday’s Bearish Harami in the DIA.  The SPY and DIA both crossed below their T-line (8ema) and both came back down to now be testing their 50sma (after the SPY crossed back below its 200sma).  The volume was above average in the large-cap indices and below average in the QQQ.

On the day, all 10 sectors were in the red as Consumer Defensive (-2.46%) led the way lower and Basic Materials (-0.92%) held up best among the sectors.  Meanwhile, the SPY was down 1.55%, the DIA was down 1.81%, and QQQ was up 1.30%.  At the same time, the VXX was up 3.55% to 12.55 and T2122 fell out of the overbought area and back into the mid-range at 64.41.  10-year bond yields fell sharply to 3.372% and Oil (WTI) was down 1.12% at $79.28 per barrel.  So, overall, it was a decisively bearish day within a bullish trend. However, DIA looks in the worst shape while the other two major indices still just look like a pullback in a trend at this point.

In economic news, December PPI came in significantly lower than expected at -0.5% (compared to a forecast of -0.1% and far lower than the November reading of +0.2%).  This shows that inflation is moving in the right direction.  However, December Retail Sales also came in well lower than expected at -1.1% (versus the forecast of -0.8% and the November reading of -1.0%).  While this too showed that the Fed moves may be slowing the economy…it also showed the economy is slowing, which is bad.  Later in the morning, December Industrial Production also came in significantly lower than was expected at -0.7% (compared to a forecast of -0.1% and a November reading of -0.6%).  Again, this showed a slowing economy.  Then November Business Inventories came in right on target at +0.4% (versus a +0.4% forecast and the Oct. reading of +0.2%). November Retail Inventories also came in on target but down at -0.3% (versus the -0.3% in October).  Finally, after the close, API Weekly Crude Oil Stocks were reported, this time showing another large unexpected build.  For the week oil inventories went up 7.615-million-barrels (compared to a forecast of a drawdown of 1.750-million-barrels and following up on the prior week’s massive 14.865-million-barrel inventory build).

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In stock news, OSHA cited AMZN for failing to keep warehouse workers safe (as its warehouses were designed for speed but not safety) as well as 14 recordkeeping violations.  Although the agency called the violations serious, it does not have the legal authority to levy significant fines.  The total fine will be about $89,000.  Elsewhere, NASA awarded BA a $425 grant for a research project on fuel-efficient airliners related to a new wing design.  (One might think they’d already be doing that research for competitive reasons, but a little money from Uncle Sam always helps I guess.)  At the same time, PRTY filed for chapter 11 bankruptcy.  In other legal news, a US district judge has ruled the COST must face a trial for a class-action suit over its advertising of “dolphin-safe tuna” despite the fishing methods used that harm and kill many dolphins.  In a different court, another US district judge has ruled HOOD must face a lawsuit from customers who claim they were misled about “free trading” when the fees were actually being paid by the “payment for order flow” model that didn’t guarantee those customers a ”best price or fastest execution” fill on orders.  Meanwhile, the LUV Pilot Union has called for a strike authorization vote (to take place until May 1) as mediation with the company over contract details is scheduled to resume on January 24.

In energy news, the API report also showed a 2.8-million-barrel build in gasoline stocks but a 1.8-million-barrel drawdown in distillate (diesel and heating oil) inventory. In other energy news, another North Carolina power substation was damaged by gunfire.  No power outages were reported from this attack.  Finally, Reuters reports that at least 15 US oil refineries are planning scheduled outages for maintenance between now and June.  These outages will range between two weeks and 11 weeks in length, impacting 1.4 million barrels of refining capacity per day.  This is twice as many shutdowns as a normal year and will impact units from MPC, VLO, XOM, PSX, BP, and PBF.  Fuel-producing margins are already increasing even ahead of the reduction in capacity as refining capacity is still 8% lower than prior to the Winter storm around Christmas.

After the close, AA, DFS, and FHN all reported beats on the revenue and earnings lines.  Meanwhile, TCBI and WTFC both beat on revenue while missing on earnings.  On the other side, KMI missed on revenue while reporting inline on earnings. However, FUL missed on both the top and bottom lines.  It is worth noting that KMI raised its forward guidance while FUL lowered its forward guidance.

So far this morning, PG, TFC, FITB, MTB, FAST, CMA, and SNV have all reported beats on both the revenue and earnings lines.  Meanwhile, KEY beat on the revenue line while missing on the earnings line.  However, NTRS reported misses on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned to the green side on modest moves.  Japan (-1.44%) was an outlier again, this time to the downside.  Meanwhile, Shenzhen (+0.87%), Australia (+0.57%), and South Korea (+0.51%) led the region higher.  On the other hand, in Europe, we see red across the board at midday.  The FTSE (-1.12%), DAX (-1.65%), and CAC (-1.63%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.70% open, the SPY is implying a -0.74% open, and the QQQ implies a -0.81% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.388% and Oil (WTI) is off seven-tenths of a percent to $78.92/barrel in early trading.

The major economic news events scheduled for Thursday include December Building Permits, Dec. Housing Starts, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am), and EIA Weekly Crude Oil Inventories (11 am).  We’ll also get another Fed speaker (Williams at 6:35 pm).  The major earnings reports scheduled for the day include CMA, FAST, FITB, KEY, MTB, NTRS, PG, SNV, and TFC before the opening bell.  Then after the close, CNXC, NFLX, PPG, and SIVB report.

In economic news later in the week, on Friday, we get Dec. Existing Home Sales and two Fed speakers (Harker and Waller).  In terms of earnings, on Friday, we will hear from ALLY, ERIC, HBAN, RF, SLB, and STT.

In late-breaking news, AMZN announced that it is ending its charity donation program (known as AmazonSmile) next month. The program donated a portion of the proceed from the sale of eligible products to a customer’s favorite charity. However, while AMZN felt it had the money in boom times, heading into a tough economy it saw the need to cut the expense in addition to the massive layoffs. Elsewhere, HTZ added to the momentum of electric vehicles when it announced a partnership with the city of Denver to bring 5,000 electric vehicles to its Denver-area fleet as well as install charging stations at the Denver airport and throughout the city. Finally, in a sign of potential optimism, the US Census Bureau has reported that more than 5 million new business license applications were filed in 2022. (That amounts to 14,000 per day, every day of last year.) While statistics show that most of those businesses will fail, for our purposes the takeaway is that, in general, you don’t start a new business if you are expecting a bleak economic future.

With that background, it looks like premarkets are in the red this morning. The QQQ is retesting its T-line (8ema), while SPY is retesting a support level, and all three major indices would open below their 50sma if the market were to open at this moment. Extension is no problem with T2122 in its midrange and only the DIA being any real distance from its T-line. So, the bears have a little room to run. It looks like DIA may be headed down to retest its 200sma and the SPY may be headed to retest support in the 378-380 area. Be very cautious taking any longs (avoid catching a falling knife) this morning and remember we have data coming at 8:30 am. With that said, we have not yet put in a lower low or lower high in any of the three major indices. So the bias is still to the upside.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, markets opened basically flat and then the three major indices moved in very different ways the rest of the day.  The SPY wobbled back and forth around the open the rest of the day. We reached the highs at 10:30 am and then the lows at 11:30 am, but spent the entire day no more than one-third of a percent from flat.  At the same time, DIA opened flat and then didn’t stop its selloff until 11:30 am when it hit the lows of the day.  After reaching those lows, it moved in a very tight range along the lows all afternoon.  Meanwhile, the QQQ rode a bigger rollercoaster sideways during the morning (trading in a 1.2% range) but didn’t flatten out at the lows as it spent the afternoon trading in a tight range just on the green side of flat.  All of this happened on lower-than-average volume.

This action gave us indecisive Doji (SPY) and Spinning Top (QQQ) candles while the DIA printed a black-bodied candle that just closed below a Bearish Harami signal.  It may be worth noting that the SPY has managed to stay above its 200sma.  On the day, seven of the 10 sectors were in the red as Basic Materials (-1.11%) led the way lower and Technology (+0.46%) held up best among the sectors.  Meanwhile, the SPY was down 0.17%, the DIA was down 1.13%, and QQQ was up 0.20%.  At the same time, the VXX was up slightly to 12.12 and T2122 fell but remained deep in the overbought territory at 97.20.  10-year bond yields rose to 3.551% and Oil (WTI) was up 1.47% at $81.03 per barrel.  So, overall, it was a low-volume, indecisive day of consolidation for the bulls ahead of Wednesday’s PPI and other data.

In economic news, the NY Fed Empire State Manufacturing Index came in far lower than expected at -32.90 (compared to a forecast of -8.70 and the December value of -11.20).  The Fed may see this as a good sign as it will ease inflationary pressures.  However, after the close, Richmond Fed President Barkin told Fox Business that “he would not want to pause rate increases until it was certain that inflation was falling compellingly toward the central bank’s 2% target.”  This is not directly opposed, but a bit contrary to a few Fed officials recently saying they might prefer smaller hikes or a pause to look at more data before deciding on any more significant hikes.  Elsewhere, in conjunction with last week’s comments by Fed Chair Powell, the Fed ordered the six largest US banks to compile and submit a report by July 31 on how their businesses would be impacted by the range of plausible outcomes of climate change.  Finally, NY Fed President Williams did not address monetary policy, but told an audience that making the economy more inclusive would boost the economy more broadly (as opposed to only helping those in need of more opportunities).

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In stock news, TSLA was in hot water as a deposition from one of its engineers stated a 2016 video promoting their “full self-driving” was faked (staged), showed features the software did not have (like stopping at a red light) and was really just a demonstration of what the potential of the Autopilot software might achieve at some point.  This is despite the video on-screen tagline being “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”  This deposition was released as part of a lawsuit over a 2018 Autopilot crash death.  Meanwhile, EMR unveiled a hostile takeover offer of $7 billion ($53/share) in its bid to acquire NATI.  At the same time, AAPL made a rare January product announcement, as it unveiled new MacBooks powered by a new version of its in-house (ARM-based) M2 chip.  Elsewhere, Sky News (UK) reported the MSFT is considering a cut of 5% of its workforce (11,000 jobs, including engineering jobs) as a result of a slowing global economy.  Later, a top executive from INTC said it is still committed to building its German chip plant (fab), but may need to pace itself given the current environment.  This came after German papers were reporting that INTC was backing away from opening the plant in hope of extracting more government subsidies.  Finally, after hours, CVNA adopted a “poison pill” to limit shareholders from raising their stakes and also reached an agreement to sell up to $4 billion in auto loans to ALLY. This move likely blocks institutions from gaining control and liquidating the struggling car retailer.

In Davos news, German Chancellor Sholz told Bloomberg he is sure Germany will avoid a recession this year (despite Russia’s war on Ukraine). In investment news, BLK told the gathering that it lost $4 billion in 2022 from Republican states that are opposed to the company’s ESG policies.  However, BLK CEO Fink said this was dwarfed by the $230 billion in new funds the asset management group took in during 2022 (which was not normal in a year that saw almost $400 billion in net outflows from funds).  Meanwhile, the CEO of BAC told a Davos audience that the US Consumer is still in “pretty good shape” as “people are spending, their wages are growing, and frankly there’s still a lot of stimulus (in the economy).”  In other news from the event, China’s top envoy to Davos said his country’s economic growth would return to pre-pandemic levels in 2023 (assuming you believe his forecast).  Elsewhere, MSFT said it will be incorporating artificial intelligence like ChatGPT into all of its products.  This news comes as rumors have been swirling that MSFT would expand its 2019 $1 billion investment into OpenAI (the project behind ChatGPT) with sources saying MSFT may invest another $10 billion.  Finally, EU Commission Head von der Leyen told the gathering that the EU will move to counter the “green industry” benefits that the US had given clean-energy-related companies as part of the “Inflation Reduction Act.”  This will include offering tax incentives and loans for EU-based “green” companies. 

After the close, both IBKR and UAL reported beats on the revenue and earnings lines.  UAL also raised its forward guidance, saying it expects to make 50% higher revenue in Q1 than Q1 2022 and also expects to expand its number of flights by 20%.  So far this morning, PNC beat (significantly) on revenue while also coming up short on earnings.  PNC also lowered its forward guidance.  At the same time, JBHT missed on both the top and bottom lines.  (PLD and SCHW report closer to the opening bell.)

Overnight, Asian markets leaned to the upside on mostly moderate moves.  Japan (+2.50%) was an outlier to the upside as the Bank of Japan discusses an exit from both negative rates and a way to prop up the Yen.  However, in the pack, India (+0.62%), Hong Kong (+0.47%), and Thailand (+0.26%) led the region higher.  Only South Korea (-0.47%) and Malaysia (-0.26%) were in the red Wednesday.  In Europe, we see mixed trading that leans to the green side on moderate moves at midday.  The FTSE (unchanged), DAX (+0.14%), and CAC (+0.27%) lead to the upside while a handful of smaller exchanges are in the red by about 0.10% in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest green start to the day.  The DIA implies a +0.09% open, the SPY is implying a +0.19% open, and the QQQ implies a +0.22% open at this hour.  10-year bond yields have fallen to 3.477% and Oil (WTI) is up nearly 2% on optimism Germany will miss falling into recession and the China reopening will spur demand to $81.66/barrel.

The major economic news events scheduled for Wednesday include December PPI and Dec. Retail Sales (both at 8:30 am), Dec. Industrial Production (9:15 am), Nov. Business Inventories and Nov. Retail Inventories (both at 10 am), Fed Beige Book (2 pm), and three Fed speakers (Bostic at 9 am, Bullard at 9:30 am, and Harker at 2 pm).  The major earnings reports scheduled for the day include SCHW, JBHT, PNC, and PLD before the opening bell.  Then after the close, AA, DFS, FHN, FUL, KMI, and WTFC report.

In economic news later in the week, on Thursday, Dec. Building Permits, Dec. Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and EIA Weekly Crude Oil Inventories are reported.  We also get another Fed speaker (Williams).  Finally, on Friday, we get Dec. Existing Home Sales and two Fed speakers (Harker and Waller).

In terms of earnings, on Thursday, CMA, FAST, FITB, KEY, MTB, NTRS, PG, SNV, TFC, CNXC, NFLX, PPG, and SIVB report.  Finally, on Friday, we hear from ALLY, ERIC, HBAN, RF, SLB, and STT.

In late-breaking news, mortgage demand spiked last week by 28% as rates fell to the lowest level since last September.  The average rate for a 30-year fixed-rate conforming loan fell from 6.42% to 6.23% (down almost a full percent from the peak rate at the end of October).  New home purchase applications were up 25% week on week (but still 35% lower than the same week in 2022).  Meanwhile, the number of refinance loan applications rose 34% during the week.

With that background, it looks like markets are modestly green as we wait on PPI and other data at 8:30 am. The QQQ is fighting with a resistance level, the DIA is looking for support on a retest of its T-line (8ema), and the SPY continues to try to stay above its 200sma. T2122 remains heavily overbought, but extension from the T-line is not terrible (especially in the DIA). So, it appears that PPI (and specifically the read-through to how the Fed may react to it) will call the tune early today. The Futures are currently implying an even greater bet (92% vs. yesterday’s 91% probability) that rates will rise by only a quarter-point on February 1. Likewise, the number of traders betting on a half-percent rate hike this time fell from 8.8% yesterday to 7.8% today. So, all the betting is on a more doveish Fed. The risk remains to the hawkish side. So, continue to be watchful.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped down Friday (down 0.83% in the SPY, down 0.80% in the DIA, and down 0.91% in the QQQ).  However, this was a bear trap as the bulls immediately stepped in to lead a rally that faded the gap within an hour and kept going at a slower pace (especially in the DIA) all day long.  This saw us close near the highs of the day.  SPY crossed back up through its 200sma, DIA crossed up through its resistance level, and QQQ climbed back up through its 50sma again.  That action gave us gap-down, large, white candles that are nearly Marubozu (Shaved Head) candles in all three of the major indices.  All of this happened on less-than-average volume again. 

On the day, nine of the 10 sectors were in the green again as Healthcare (+0.76%) led the way higher and Utilities (-0.45%) lagged behind the other sectors.  At the same time, the SPY was up 0.40%, the DIA was up 0.30%, and QQQ was up 0.69%.  At the same time, the VXX was down 2.51% to 12.02 and T2122 climbed even deeper into the overbought territory at 98.82.  10-year bond yields rose to 3.504% and Oil (WTI) was up 2.00% at $79.96 per barrel.  So, overall, it was a lower-volume, comeback day for the bulls after a gap down to start the day as earnings season kicked off again.

In economic news, the December Import Price Index rose by more than expected at +0.4% (compared to a forecast of -0.9%).  Meanwhile, the December Export Price Index fell way more than expected at -2.6% (versus the forecast of -0.5%).  Later in the day, the Michigan Consumer Sentiment reading came in better than expected at 64.6 (compared to a forecast of 60.5 and the December reading of 59.7). This is the highest reading since May of 2022 and indicates an improving consumer outlook for the year.  In the afternoon, Treasury Sec. Yellen warned Congress the US will reach its Debt Ceiling on Thursday and will begin “extraordinary measures” to avoid default. These measures will stretch the time before the US defaults on its debts, but Treasury cannot accurately gauge how long of an extension we will get.  However, she told Speaker McCarthy that default is not likely to happen before early June.  She urged Congress to either suspend or increase the debt limit as soon as possible to avoid the harm a default would do to the country.

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In stock news, HBI shares rose on Friday after the company said it expects to report Q4 net sales a bit above the top end of its previous forecast and adjusted operating profit above the midpoint of its previous guidance.  (HBI reports in February.)  In the afternoon, the Wall Street Journal reported that GOOGL source told them YouTube is testing a group of free (ad-supported) streaming channels and is in talks with various entertainment companies about featuring their movies and shows on a cable-like YouTube hub of channels.   Meanwhile, an SEC filing revealed that the GS unit which covers housing transactions, credit card, and financial technology has lost $3.03 billion in three years and a $1.2 billion loss in the first nine months of 2022.  Elsewhere, the US Dept. of Energy is loaning IONR $700 million (for 10 years at a fixed-rate to be determined when the funds are dispersed) to build its Nevada lithium mining operation.  (F and TM are among the companies that have already committed to buy lithium from that operation.)  Finally, NATI announced it’s starting a strategic review that will include looking for potential suitors to buyout the company.

In energy news, Reuters reports that XOM will sharply boost both gasoline and diesel production at its Beaumont TX refinery after completing a $2 billion expansion.  The expansion will add 250,000 barrels-per-day of crude refining (by January 31) at what was already the second-largest refinery in the US.  However, the net gains in refining capacity will be short-lived as LYB has already said it will be shutting down its own 264,000 Barrel-per-day refinery in Houston at the end of 2023.  Elsewhere, Natural Gas fell another 5.79% on Friday.  This brought the natty down more than 50% in the last 30 days and to a level not seen since June of 2021. Meanwhile, Oil (WTI) posted its largest weekly gain since October as the US Dollar fell to a 7-month low and hope for expanded demand from China.

So far this morning, earnings have been not great.  MS and EDU both reported beats on both the revenue and earnings lines.  However, GS, CFG, SBNY, and SI all reported beats on the revenue lines while missing on the earnings lines.  None of the companies has held their call or provided updated guidance yet.

Overnight, Asian markets were mixed.  Japan (+1.23%) and India (+0.89%) were the only significant gainers while Hong Kong (-0.78%) was the only appreciable loser on the day. The rest of the region made small moves in either direction from flat. However, in Europe, the bourses are nearly red across the board.  Only Athens (+0.39%) is in the green while the FTSE (-0.34%), DAX (-0.04%), and CAC (-0.13%) take the region lower in early afternoon trade as the volume leaders.  As of 7:30 am, US Futures are pointing toward a down start to the week.  The DIA implies a -0.29% open, the SPY is implying a -0.21% open, and the QQQ implies a -0.29% open at this hour.  At the same time, 10-year bond yields are higher to 3.546% and Oil (WTI) is up two-thirds of a percent to  $80.37/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to NY Fed Empire State Mfg. Index (8:30 am) and a Fed speaker (Williams at 3 pm).  The major earnings reports scheduled for the day include CFG, GS, MS, EDU, and SBNY before the opening bell.  Then after the close, IBKR and UAL report.

In economic news later in the week, on Wednesday, we get Dec. Retail Sales, Dec. PPI, Dec. Industrial Production, Nov. Business Inventories, Nov. Retail Inventories, Fed Beige Book, and a Fed speaker (Harker).  Then, on Thursday, Dec. Building Permits, Dec. Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and EIA Weekly Crude Oil Inventories are reported.  We also get another Fed speaker (Williams).  Finally, on Friday, we get Dec. Existing Home Sales and two Fed speakers (Harker and Waller).

In terms of earnings, on Wednesday, we hear from SCHW, JBHT, PNC, PLD, AA, DFS, FHN, FUL, KMI, and WTFC.  On Thursday, CMA, FAST, FITB, KEY, MTB, NTRS, PG, SNV, TFC, CNXC, NFLX, PPG, and SIVB report.  Finally, on Friday, we hear from ALLY, ERIC, HBAN, RF, SLB, and STT.

With that background, it looks we are going to start the week (pending the NY Empire State Mfg. Index) with a modest gap down as the SPY is retesting its 200sma and DIA is retesting a support level (both from above). The bulls do not have to worry about extension from the T-line (8ema), but the T2122 indicator is deep into the overbought territory at this point. It appears that earnings are the story of the morning up to this point. Still, we have to remember that we get December PPI and a slew of other data on Wednesday morning. With the Fed meeting in two weeks, every significant report will be seen basically only in light of how the FOMC might use it to justify a lower/higher rate hike. Right now, Futures are implying a greater than 91% chance that we only get a quarter-point hike this time (only 8.8% are betting we get a half-percent hike). Any news that would give the hawks in the room ammunition will be taken badly by markets. So, be watchful.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, markets gapped slightly higher at the open (up 0.29% in the SPY, up 0.34% in the DIA, and up 0.20% in the QQQ).  However, the bears immediately faded that gap and took us to the low of the day by 10 am.  From that point, the bulls stepped in and we got a slow, wavy, modest bullish trend that reached the highs of the day at 2 pm.  From there, we saw a selloff that lasted until the last 10 minutes of the day.  This action gave us white-bodied, indecisive, Spinning Top types of candles in all three major indices.  The SPY is fighting to cross above its 200sma, QQQ crossed above its 50sma, and DIA is fighting to cross above a resistance level at day end.  This marks the first time since early December that all three major indices are above their 50sma.

On the day, eight of the 10 sectors were in the green again as Energy (+2.13%) led the way higher and Consumer Defensive (-0.39%) lagged behind the other sectors.  At the same time, the SPY was up 0.38%, the DIA was up 0.66%, and QQQ was up 0.54%.  At the same time, the VXX was down almost 5% to 12.33 and T2122 has stayed deep in the overbought territory at 96.88.  10-year bond yields fell to 3.444% and Oil (WTI) has risen 1.20% at $78.34 per barrel.  So, overall, it has been an average-volume, bullish, and yet indecisive day as traders wait on Big Bank earnings on Friday morning.

In economic news, CPI came in just as expected at 6.5% annualized rate (compared to a 6.5% forecast and well below the 7.1% annualized November rate). This news shows that the Fed policy is working and inflation is beginning to come down.  At the same time, Weekly Initial Jobless Claims were a bit lower than expected, coming in at 205k (versus a forecast of 215k and last week’s 206k).  This news may have offset the good trend in the CPI as premarkets immediately sold off, but quickly recovered to flat on the release of these two pieces of data.  Later in the day, the December Federal Budget Balance came in worse than expected at -$85 billion (compared to a forecast of -$70 billion but still far better than the November value of -$249 billion).

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In stock news, LCID won a dismissal of the lawsuit brought against it by investors who claimed management had overstated its production outlook before a SPAC took it public.  Elsewhere, DIS management and board are preparing for a fight with activist investor Nelson Peltz, who formally launched a bid for a board seat on Thursday.  The move by Peltz would seriously threaten new (and former) CEO Bob Iger as Peltz has called for the sale of business units.  In the afternoon, CTSH announced a new CEO effective immediately (former President of INFY).  ERIC reported in Sweden Thursday and its smaller-than-expected provision hinted at a smaller US fine from the US DOJ and SEC.  (ERIC had previously lost a third of its value since the announcement of action by the US government.)  Meanwhile, the Financial Times reports that WBD is considering the sale of its $1+ billion music library.  In other news, TSM has cut 2023 CAPEX by 5%, even after a record Q4 as weak demand for chips has the Taiwanese company worried.  The reduction should not impact the TSM Fabs (Chip production plant) under construction in Arizona.  However, it may preclude or push off plans to build a Fab in Europe or a second Fab in Japan.  Finally, AAPL CEO Tim Cook asked for (and got) a 40% reduction in pay for 2023.  (Don’t worry about Tim, he’ll still make $49 million this year.)

In energy news, the US Energy Information Admin. (EIA) reported a rare build in US natural gas inventories.  The report cited an 11 billion cubic feet increase (compared to a consensus forecast of a 13 billion cubic feet drawdown).  Despite this news, the Feb. natty held up, closing a penny higher than it had on Wednesday.  Meanwhile, Oil (WTI and Brent) were up on Thursday.  The logic behind this might inform why natural gas also held up.  The basic idea is that the December CPI showed that inflation is falling.  If inflation falls, the market guesses that the Fed will ease off on rate increases. In turn, slower interest rate hikes would lead to a dollar that is less strong and potentially more business spending at lower rates.  It is those last two factors that could be read as oil and natural gas will be more valuable in the future and therefore should be bought today.  So, if you followed all of that, a viola, oil prices rose and natural gas prices at least held up after a bearish slide all month.

So far this morning, UNH, JPM, BAC, WFC, DAL, BLK, and FRC all reported beats on both the top and bottom lines.  However, of these numbers, WFC and FRC earnings as well as both lines for BLK showed negative growth (lowered targets).  WIT reported a miss on revenue while reporting in line on earnings.  It is also worth noting that DAL raised its forward guidance.  (C reports at 8:00 am.)  So, the big banks are kicking off earnings season with strong Q4 numbers so far.

Overnight, Asian markets were mostly green.  Japan (-1.25%) and Thailand (-0.34%) were the only red seen.  Meanwhile, Shenzhen (+1.19%), Hong Kong (+1.04%), and Shanghai (+1.01%) led the region higher on mostly solid moves.  In Europe, bourses are mixed at midday but lean to the upside.  The FTSE (+0.49%), DAX (+0.21%), and CAC (+0.31%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.28% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.53% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.465% and Oil (WTI) is up two-thirds of a percent to $78.91/barrel in early trading.

The major economic news events scheduled for Friday are limited to December Import / Export Prices (8:30 am), Michigan Consumer Sentiment (10 am), and a Fed speaker (Harker at 7:30 am).  The major earnings reports scheduled for Friday are limited to BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT all before the opening bell.  There are no major reports scheduled for after the close.

Do not forget that Monday is a market holiday in the US.  However, Canadian markets (TSX) are open Monday.

With that background, it looks like the three major indices are headed back down toward their T-line (8ema) which should provide some relief to the T2122 indicator over-extension. This opening does take the DIA back below a resistance level and takes the SPY back below its 200sma…at least at this point. With a 3-day weekend ahead, that may be a good reason for us to see light volumes today. However, with CPI direction behind us and now the Big Banks giving us a hint that reports might not be so bad this time around, I would not be surprised to see decent trading volumes at least early today. Either way, be cautious and prepare yourself for the long weekend. Take profits, hedge, and limit your risk exposure because, unlike the big funds, you’re not risking other people’s money, you’re risking your own.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, after Fed Chair Powell’s morning speech, markets opened up just on the down side of flat.  At that point, all three major indices chopped sideways until noon. Then a slow, steady bullish trend started that lasted into the close.  This action gave us white-bodied, Bullish Engulfing signals in the SPY and QQQ.  Meanwhile, the DIA bounced up off its 50sma on the day.  All of this, once again, took place on lower-than-average volume.

On the day, all 10 sectors were in the green as Consumer Defensive (+0.09%) lagged behind and Consumer Cyclical (+1.46%) lead the other sectors higher.  Meanwhile, the SPY was up 0.70%, the DIA was up 0.58%, and QQQ was up 0.85%.  At the same time, the VXX was down 4.16% to 12.91 and T2122 remains in the overbought territory at 89.57.  10-year bond yields spiked to 3.606% and Oil (WTI) was up 0.31% at $74.86 per barrel.  So, overall, it has been a bullish day that negated the potential bearish signal from Monday.

In economic news, as mentioned above, Fed Chair Powell spoke to Sweden’s central bank Tuesday.  He made no reference to interest rate decisions other than to say that more increases are likely on the way this year.  His remarks emphasized that fighting inflation requires measures that are politically unpopular and that the Fed must be independent of political control in order to take the hard actions that will bring inflation down.  He also went on to address GOP criticisms by saying that “the Fed should stick to its knitting” (and not stray into using regulatory power to address climate change or social issues).  He emphatically said, “We (the Fed) are not, and will not be a climate policymaker.”  However, he also said asking big banks to examine their readiness for major climate-related events and other risks was fair game but that is as far as it should go.  If the premarket is a judge, traders liked what they heard from Powell. Much later, after the close, the API delivered its Weekly Crude Oil Stocks report with a massive unexpected build in inventories.  The data showed inventory up by 14.865 million barrels (compared to a forecasted drawdown of 2.375 million barrels).

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In stock news, Airbus maintained its position as the world’s largest plane manufacturer when it reported that deliveries rose 8% in 2022.  Airbus delivered 663 jets, compared to just 480 delivered by BA during the year.  Elsewhere, GM, F, GOOGL, SPWR, and RUN announced they will work together to create standards and protocols that will allow for Virtual Power Plants to be used to ease loads on electricity grids.  (The VPP idea is that thousands of decentralized energy sources like electric vehicles and batteries can be pooled together to create a source of power for an electric grid during high-demand periods.)  Meanwhile, CNBC reported that the money AAPL app store developers have received this year suggests that AAPL app store growth has slowed and is likely in line with the 2021 revenue from that unit.  At the same time, FDX said it was trimming Sunday deliveries starting in March, reducing the percentage of the US that is eligible for Sunday delivery down to 50% (from 80%).  In other news, the Wall Street Journal reported that FRG is considering going private through a management buyout.  Finally, WFC (long the leader in home lending) is scaling back its mortgage business and will now only offer home loans to existing banking customers.

In energy news, in addition to the crude oil stocks above, the Weekly API report also showed a 1.8-million-barrel increase in gasoline inventories and a 1.1-million-barrel build of distillate stocks (diesel fuel and heating oil).  Compare these to a forecast of a 1.186-million-barrel build in gasoline inventory and an expected drawdown of 0.472-million-barrels of distillate.  In other news, the US EIA released a forecast on Tuesday afternoon saying that global oil consumption will reach a new record of 102.2 million barrels per day in 2024.  Finally, February Natural Gas futures fell another 7% on Tuesday (following Monday’s 5% rally), bringing the total drop to 52% over the last three weeks.

Early this morning, the FAA suffered a system outage that normally alerts pilots of in-air hazards and airport facility status changes (like closed airports and runways). That system has stopped processing new or updated information. This outage caused the FAA to order the delay or cancellation of all flights in US airspace (inbound or outbound) until the system is restored.  As of 6:30 am, almost 800 flights had been delayed, canceled, or rerouted away from US airspace.  Obviously, this will have a very minor, but real, impact on US businesses, especially airlines. (For reference, the storm just before Christmas caused the cancellation of many thousand flights each day for more than a week.)

Overnight, Asian markets were mixed but lean to the upside on modest moves with Japan (+1.03%) and Australia (+0.90%) leading the gainers while Shenzhen (-0.58%) and Taiwan (-0.35%) paced the losses.  Meanwhile, in Europe, the exchanges are heavily weighted to the green at midday.  The FTSE (+0.64%), DAX (+1.05%), and CAC (+0.98%) are leading the region higher in early afternoon trade with only Norway (-0.63%) and two other very minor spots of red on the board.  As of 7:30 am, US Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.10% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.10% open at this hour.  At the same time, 10-year bond yields are back down to 3.578% and Oil (WTI) is up fractionally to $75.38%/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to EIA Crude Oil Inventories (10:30 am).  There are no major earnings reports scheduled for before the opening bell.  However, after the close, KBH reports.

In economic news later in the week, on Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Thursday, INFY and TSM report.  However, on Friday, we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT report.

In mortgage news, after rising at the end of the year, interest rates dropped sharply last week from 6.58% to 6.42% for a 30-year, fixed-rate, conforming loan.  That drop led to a 5% increase in refinance applications and an overall mortgage volume increase of 1.2% compared to the prior week according to the Mortgage Bankers Association.  The mortgage volume was still 86% lower than the same week in 2022. 

With that background, it looks like the large-cap indices are sitting just on top of their 50sma (also a resistance level for the SPY) after a very small bullish premarket move. Meanwhile, the QQQ is also positive in premarket, but has not yet reached its 50sma above. This is looking like a modest additional follow-through to Tuesday’s move. However, it is far from a definitive direction move in the bullish direction. Nonetheless, the premarket bias is bullish. Do not be surprised if price just drifts and chops around today as the market waits on that CPI report Thursday (not for its own sake, but as a read-through to what the Fed may do at month end). So, don’t count on average volumes, and be very careful trading thin tickers.

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

Swing Trade Ideas for your consideration and watchlist: BWA, DIS, CAT, PYPL, SBUX, ALLY, GILD, LUMN, and META. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped higher at the open (by a half of a percent in the large-cap indices and by three-quarters of a percent in the QQQ), following the rest of the world higher.  Then the bulls gave us a follow-through that lasted until we reached the highs of the day at about 11:30 am.  At that point, the bears stepped in to lead an afternoon selloff that took us lower, all the way into the close.  The large caps completely faded the gap, getting into negative territory by day end.  However, while the QQQ sold off, it held up better than the large caps.  This action saw the SPY retest and fail its 50sma and the coinciding resistance level.  It has also brought the QQQ up near a retest of its own 50sma above before pulling back.  We should also note that all three major indices printed Shooting Star-type candles.

On the day, six of the 10 sectors are in the green as Technology (+1.52%) led the way higher and Healthcare (-1.17%) lagged behind the other sectors.  At the same time, the SPY was down 0.06%, the DIA was down 0.29%, and QQQ was up 0.65%.  Volume was back below average again in all 3 indices.  Meanwhile, the VXX was up 0.52% to 13.47, and T2122 fell but remains in the overbought territory at 85.33.  10-year bond yields plunged down to 3.53% and Oil (WTI) was up 1.53% at $74.90 per barrel.  So, overall, it was a gap-up, Shooting Star type of day with the bulls happy early and the bears completely in control during the afternoon

In economic news, Atlanta Fed President Bostic spoke to an Atlanta business group, basically reiterating the recent comments made by Fed Chair Powell.  Bostic said they (Fed) are prepared to take rates higher and stay higher for longer to tame inflation.  (And, yes, even at the risk of tipping the economy into recession.)  Meanwhile, San Francisco Fed President Daly told the Wall Street Journal that she expects rates to go “somewhere above 5%” and that “doing so in more gradual steps does give you the ability to respond to incoming information.”  However, it did seem that both speakers were talking about whether the Fed will raise 0.25% or 0.50% on February 1. It is also worth noting that neither of these Fed Presidents have a vote in 2023 (both were voters in 2022).

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In stock news, LMT announced a $14.2 billion sale of F-35 fighter jets to Canada (to be delivered in 2026).  Elsewhere, two retailers increased their holiday sales forecasts as AEO and ANF both said Monday that consumers had been snapping up their winter gear during the holidays.  However, on the other side, LULU lowered its Q4 guidance.  In the healthcare space, MRNA is reportedly evaluating a $110-$130 price range for its Covid-19 vaccine once it moves from government contracts to commercial sales.  This is a similar range to the one PFE revealed it is considering.  (The original price for both was $15-$16 per dose and then rose to $26/dose in the July 2022 government contract.)  After the close, Bloomberg reported that AAPL is preparing to stop using chips from AVGO and QCOM in its devices by the end of 2024 (replacing those chips with Wi-Fi chips built to internal designs).  Finally, Bloomberg reported that MSFT is in discussions with OpenAI bout investing as much as $10 billion into the creator of the artificial intelligence chatbot named ChatGPT.

In energy news, the US Federal government has rejected the initial batch of bids to resupply 3 million barrels of crude into the Strategic Petroleum Reserve.  No details on the bid prices were given, but the Dept. of Energy had previously said it is looking to refill the 180 million barrels recently released at a price of $70/barrel.  Meanwhile, the price of the largest exported grade of Russian oil (Urals grade) was selling at well less than half of the international price.  Urals was selling for $37.80/barrel (compared to $79.80/barrel for Brent) at the Baltic Sea port of Primorsk. This is far less than even the G-7 imposed price cap.  All of which is proving that sanctions on Russia are having a serious economic impact. Finally, the German energy regulator said that a natural gas shortage is increasingly unlikely due to conservation efforts and a mild winter.  The Federal Network Agency said Germany’s gas storage facilities are currently still 91% full.

After the close, JEF beat on both the revenue and earnings lines.  However, both lines also showed negative growth (lowered targets) with earnings less than half of the same quarter in 2021.  The company blamed a persistent slump in the number of M&A deals as the cause.  So far this morning, BBBY reported misses on both lines (expected after very recent warnings that the company may file for bankruptcy). ACI and SNX report later in the premarket period.

Overnight, Asian markets were mixed but leaned to the downside.  Singapore (-1.29%), India (-1.03%), and Malaysia (-0.56%) led the region lower while Japan (+0.78%), Shenzhen (+0.50%), and Taiwan (+0.34%) paced the gains.  In Europe, with the sole exception of Portugal (+0.16%), we see red across the board at midday.  The FTSE (-0.19%), DAX (-0.45%), and CAC (-0.73%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are also pointing toward a down start to the day.  The DIA implies a -0.36% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.45% open at this hour.  At the same time, 10-year bond yields are back up to 3.563% and Oil (WTI) is up a half of a percent to $75.04/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Fed Chair Powell speaking (9 am) and the API Weekly Crude Oil Stocks (4:30 pm).  The major earnings reports scheduled for the day are limited to ACI, BBBY, and SNX before the opening bell.  Then after the close, NOTV reports.

In economic news later in the week, on Wednesday, we get EIA Crude Oil Inventories.  On Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Wednesday, we hear from KBH.  On Thursday, INFY and TSM report.  However, on Friday, we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT.

In late-breaking news, COIN announced that it is cutting 20% of its workforce after having cut 18% back in June 2022. The cuts last June were attributed to “growing too fast” while the current cuts are blamed on “market conditions created by bad actors” (referring to FTX). Finally, the Dollar is trading up against the Yen and Pound while it is flat against the Euro this morning. The overall Dollar index is up 0.32% today, which will provide a headwind to commodity prices.

With that background, it looks like all three major indices look like they are headed for a retest of their T-line (8ema) in premarket action. This looks like at least an initial follow-through to Monday’s Shooting Star signal. However, this is far from a definitive direction change and none of the three major indices has even re-entered the three-week consolidation zone again. So, for the moment, this looks like volatility (chop) as markets wait on Fed speakers and CPI later in the week. Fed Chair Powell, may have an outsized impact this morning with no other economic data or major earnings news to offset his tone. So, be cautious in chasing the premarket move unless you are very nimble.

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

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped higher at the open (up 0.83% in the SPY, up 0.88% in the DIA, and up 0.66% in the QQQ).  However, price then immediately reversed and faded the gap to trade back below Thursday’s close before reversing again.  At about 9:50 am, a steady rally began that lasted all the way into 3:15 pm when a small pullback took us into the close.  This action gave us large, white-bodied candles, with larger lower wicks and smaller upper wicks, that caused all three major indices to cross above their T-lines (8ema) and pop up out of the 3-week long consolidation range.  DIA has also crossed back above its 50sma and SPY is about to retest its own 50sma from below.

On the day, all 10 sectors are in the green with the Basic Materials (+3.29%) leading the way higher as Healthcare (+0.99%) lagged way behind the other sectors.  At the same time, the SPY was up 2.24%, the DIA was up 2.14%, and the QQQ up 2.76%.  Volume was slightly above average (for the first time in a long time).  Meanwhile, the VXX was down 2.33% to 13.40 and T2122 spiked back up into the overbought territory at 92.18.  10-year bond yields plunged down to 3.565% and Oil (WTI) was flat at $73.76 per barrel.  So, overall, it was a bullish day that finally broke out of the long consolidation, oddly on economic data that may cause the Fed to stay Hawkish.

In economic news, December Nonfarms Payrolls came in above expectations at +223k (compared to +200k forecasted but less than November’s +256k number).  This took the December Unemployment Rate down to 3.5% (versus the forecast of 3.7% and the November rate of 3.6%).  The December Participation Rate also increased slightly to 62.3% (from the November value of 62.2%).  However, the December Average Hourly Earnings came in lower than expected at +4.6% year-on-year (versus the forecast of +5.0% and less than the November reading of +4.8%).  This might indicate lower inflationary pressure on wages.  Later in the day, November Factory Orders showed a larger drop than forecast at -1.8% (compared to an expectation of -0.8% and an Oct. value of +0.4%).  Then, finally, ISM Non-Mfg. PMI came in significantly lower than expected at 49.6 (versus a forecast of 55.0 and a November value of 56.5).  So, most of this showed a stronger economy than was projected with less inflationary pressure than anticipated, but also a slightly contracting forward outlook in the Services sector. 

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In stock news, on Friday, TLSA announced it will cut prices on various Model 3 and Model Y cars.  Elsewhere, LUV said that it expects to post a loss for Q4 after canceling 17,000 flights in December.  Meanwhile, Reuters reported that China is in talks with PFE to secure licenses to allow its domestic drugmakers to produce a generic version of the antiviral drug Paxlovid.  At the same time, the FDA approved a new Alzheimer’s drug that was co-developed by BIIB.  In other FDA news, the agency announced that the AZN antibody cocktail Evusheld likely does not provide protection to the latest and most prevalent variant of covid.  Later in the afternoon, Reuters reported that MCD is planning corporate layoffs and a shift in emphasis toward building more restaurants according to leaked internal memos. 

In miscellaneous news, Congress finally elected Kevin McCarthy as Speaker of the House.  It took 15 rounds of voting over 4 days (the longest Speaker election in 164 years) and nearly came to blows between Republicans after the 14^th round as a single extremist held the rest of the GOP (and Congress) hostage.  All the while, not a single Democrat crossed the aisle to resolve the matter.  However, in the end, the holdouts were persuaded by major concessions which allow more debate, allow easier amendments, divide the government funding into 12 different bills, give the House ability to defund the salary of any/all government officials, prohibit voting on increasing the debt ceiling without also cutting domestic spending, and finally allow any member of the House to individually call a vote to remove the Speaker at any time. This sets the stage for what will almost certainly be a more contentious, obstructive, and drama-filled two years than has been the case in a long time.  (And that’s saying something.)  Elsewhere, (and in better news) Natural Gas fell 17.1% last week (February contract), making it the third weekly decline in a row.  Meanwhile, Oil closed Friday flat, ending the week lower despite a healthy drop in the Dollar (which raises commodity prices).  Across the pond, Euro-area inflation fell back to single digits in December for the first time since August.

Over the weekend, Bazil suffered an even worse attack than the US suffered on January 6, 2021, putting the current US political problems into perspective. Thousands of supporters of the Trump-esque defeated ex-President Bolsanaro attacked, ceased, and briefly occupied the Brazilian Congress, Presidential Palace, and Supreme Court. Interestingly, in Brazil, it did not take a lying leader with the megaphone of major mass-media organizations behind him to whip the ignorant masses into rioting. There, it was accomplished in a much lower-tech manner. At any rate, the Brazilian military eventually drove the mobs away, but the damage was done. Xenophoia, tribalism, and “kicking down” politics had assaulted democracy. Perhaps more importantly to us, Brazilian business, and grain exports were temporarily halted by the national turmoil.

Overnight, Asian markets were green across the board.  Taiwan (+2.64%), South Korea (+2.63%), and Hong Kong (+1.89%) led the region higher.  Meanwhile, in Europe, we see nearly the same picture at midday.  Only the FTSE (-0.10%) is in the red, while the DAX (+0.50%), and CAC (+0.23%) lead that region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.30% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.45% open at this hour.  At the same time, 10-year bond yields are up a bit to 3.593% and Oil (WTI) has spiked 3.35% to $76.24/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day are limited to AYI and CMC before the opening bell.  Then after the close, JEF reports.

In economic news later in the week, on Tuesday, Fed Chair Powell speaks and the API Weekly Crude Oil Stocks are reported.  Then Wednesday, we get EIA Crude Oil Inventories.  On Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Tuesday, ACI and SNX report.  Then Wednesday, we hear from BSX and KBH.  On Thursday, there are no major earnings reports.  However, on Friday, earnings season kicks off again as we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT report.

Finally, GS announced early this morning that it will be cutting 3,200 jobs later this week after completing an internal cost-cutting review. Bloomberg reports that when GS reports Friday it will unveil a new unit (which will house all of the GS credit card and installment-lending business) and that new unit will show a $2 billion pretax loss. Elsewhere, the Dollar is trading near a seven-month low today. This gives a boost to all commodities in early trading.

With that background, it looks like all three major indices are looking to follow Asia and Europe higher (at least as of premarket). The follow-through on Friday’s strong candle has the SPY retesting its 50sma and resistance from previous price action. All three of the major indices are above their T-line (8ema), but over-extension is not yet a problem in any of them. With CPI and Fed speakers ahead later in the week, do not be surprised to see a move but hen a rest as the market then hopes for a clue as to how the Fed will act at the end of the month.

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

Swing Trade Ideas for your consideration and watchlist: TSLA, AAPL, AMZN, META. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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

For the first time in the new year, markets gapped down at the open Thursday (0.50% in the SPY, 0.50% in the DIA, and 0.68% in the QQQ).  All three major indices then spend the rest of the day wobbling sideways in a three-quarters of a percent range below the open. This action gave us black-bodied, indecisive candles on the day.  All three of the indices are now back just below their T-line (8ema) and remain in the recent consolidation.  The DIA is also back below its 50sma with the QQQ looking like a “Dreaded-h pattern” setup.

On the day, eight of the 10 sectors were in the red with the Technology (-2.06%) and Utilities sector (-1.82%) leading the way lower as the Energy sector (+1.24%) held up best.  Meanwhile, the SPY was down 1.14%, the DIA was down 1.00%, and the QQQ was down 1.57%.  Yet again, this took place on lower-than-average volume.  At the same time, the VXX was up 0.81% to 13.72 and T2122 dropped back down into the mid-range at 39.37.  10-year bond yields are up slightly to 3.72% and Oil (WTI) was up 1.37% to $73.84 per barrel.  So, overall, it was a bearish day that remains in the choppy consolidation of the last 2+ weeks.

In economic news, December ADP Nonfarm Employment was up more than expected, adding 235k jobs (compared to a forecast of +150k and the Nov. reading of +182k).  At the same time, both Imports and Exports were down in November, resulting in a Nov. Trade Balance that was better than expected at -$61.50 billion (versus a forecast of -$73.00 billion and the October value of -$77.80 billion).  Later the Dec. S&P Global Composite PMI came in better than expected at 45.0 (compared to the forecast of 44.6 but still worse than the November reading of 46.4).  Then the US December Services PMI came in at 44.7, which was better than expected (versus the forecast of 44.4 but again still worse than the Nov. reading of 46.2).  Finally, EIA Crude Oil Inventories came in higher than expected at 1.694 million barrels (compared to a forecast of 1.154 million barrels and stronger than the prior week’s 0.718 million barrels). 

SNAP Case Study | Actual Trade

In stock news, SFIX announced Thursday that its CEO will be stepping down effective immediately and also said it would be cutting about 20% of its workforce.  Elsewhere, CAG raised its full-year sales forecast for 2023 by 7%-8% mostly on the impact of price hikes, and also increased its earnings forecast for the year.  At nearly the same time, LW also raised its own 2023 revenue forecast to $4.8-$4.9 billion and significantly raised EPS guidance from $2.45-$2.85 all the way to $3.75-$4.00/share.  Then BBBY announced that it was exploring options including bankruptcy to address its declining situation.  Overseas, AAPL’s primary phone maker Foxconn said that production at its main plant in China had “basically returned to normal” after a 12% decrease in December.  Meanwhile, LAZR announced that its Q4 production deals (orders) had exceeded the target for 60% year-on-year growth in its order book.  Majority owner of WWE (former CEO) Vince McMahon elected himself and two allies to the board of directors (removing three others) with an eye on returning to a leading role one year after leaving over a sexual harassment scandal.

In government action news, a NY Judge has ordered that JPM does have to face a lawsuit from sunglasses maker Ray-Ban over a $272 million cyber theft from the French company’s New York bank account.  Elsewhere, a US Bankruptcy judge has ruled that Celsius Networks actually owns most of its customers $4.2 billion crypto deposits. This means the customers will be last in line for payout from the lender’s bankruptcy case.  Later in the day, PTON agreed to pay a $19 million fine for failing to promptly report a defect in their treadmills that could cause serious injury.  Meanwhile, the FTC has proposed a rule that would forbid any company from requiring employees to sign non-compete or “training repayment” agreements.  The rules are months from final passage, but if put into effect the FTC says it expects this would raise the wages of 30 million Americans by a total of $300 billion per year.

In miscellaneous news, for the second time in a week, natural gas futures (natty) plunged 11% in a day after Wednesday’s 5% increase.  The very warm start to winter in the Northern Hemisphere (especially Europe) had hurt gas prices and put a large crimp in Russia’s efforts to squeeze Europe over its support of Ukraine.  Elsewhere, Fed ultra-hawk Bullard said Thursday that he is optimistic the new year will bring relief from inflation.  He also said “the probability of a soft landing has increased compared to where it was in the fall” adding that this is a great time to fight inflation because of the strong job market.

Overnight, Asian markets were mixed again.  South Korea (+1.12%) was an outlier to the upside with Australia (+0.65%), Thailand (+0.60%), and Japan (+0.59%) leading the region higher.  Meanwhile, India (-0.74%), Singapore (-0.48%), and Hong Kong (-0.29%) paced the losses.  In Europe, the bourses are mostly green at midday.  The FTSE (+0.27%) and CAC (+0.30%) lead the region higher while the DAX (-0.04%) is one of only two exchanges in the red in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a mixed and flat start to the day (ahead of December Payrolls data).  The DIA implies a +0.12% open, the SPY is implying a -0.02% open, and the QQQ implies a -0.33% open at this hour.  At the same time, 10-year bond yields are just slightly higher at 3.729% and Oil (WTI) is off fractionally to $73.38/barrel in early trading.

The major economic news events scheduled for Friday include Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Participation Rate, and Dec. Unemployment Rate (all at 8:30 am), Nov. Factory Orders and Dec. ISM Non-Mfg. PMI (both at 10 am).  The major earnings reports scheduled for the day are limited to GBX before the opening bell.  There are no major earnings reports scheduled for after the close.

So far this morning, GBX has reported a beat on the revenue line while missing on the earnings line.

Unless you’ve been living under a rock, you know the other news of the day which is that the US House has yet to elect a Speaker as the GOP flounders to get its act together. The House adjourned again last night after an 11th attempt failed to reach the 218-vote majority required to elect a Speaker. The GOP is split with 6 “Never McCarthy” votes, 14 “Guarantee me more power” votes, and 202 “McCarthy” votes (of those 60 or so are said to be “McCarthy only” votes). The House will resume speech-making (nominations) and voting again at noon today as the fourth day of the Republican majority gets back underway. Again, if there is any good news, it is that without any real “GOP Platform Agenda” there is no real work that is being missed yet. The first real “must pass” legislation will be the US Debt Ceiling increase and that will not come for a few weeks. So far, markets do not seem to care and are just enjoying the distraction.

With that background, it looks like all three major indices are waiting to see what the December Payrolls data looks like before deciding what to do. Still, at this point in the premarket, all three major indices are close below their T-line (8ema) with the SPY retesting a support level and the QQQ seeming to work on a bearish Dreaded-h pattern. The consolidation range of the last 3 weeks continues to have a grip on the market. Regardless of the Payrolls data (where again, good news will likely be bad news for the market and visa-versa), be careful about chasing either direction on a Friday. No matter what it does today, this market can still break in either direction after reconsideration… especially a two-day reconsideration. If you do trade the post-announcement move, be very nimble or be prepared to wait out any reversal pressure your position might face. Volumes continue to be light as the big money has not decided on a direction yet.

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

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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