All three major indices gapped modestly higher at the open Wednesday. This was followed by an immediate 30-minute selloff in the QQQ. Then all 3 of those indices “roller-coastered” their way sideways in a volatile rest of the day. This left us with a gap-up Doji in the DIA, a gap-up black Spinning Top type candle in the SPY, and a Large black Dark Cloud Cover candle in the QQQ. On the day, SPY lost 0.10%, DIA gained 0.68% (largely on the earnings-related big gains from IBM +7.08% and PG +2.66%), and the QQQ lost 1.50%. The VXX fell 1.37% to 24.39 and T2122 rose to just outside the overbought territory at 76.55. 10-year bond yields fell to 2.846% and Oil (WTI) ended unchanged at $102.56/barrel.l.
During the day, Crude Oil inventories came in dramatically lower than expected (-8 million barrels vs + 2.5 million barrels set.). The Fed Beige Book also indicated that (surprise!) inflationary pressures remain strong. NFLX continued to be hammered for Tuesday night’s earnings miss, closing down 35% (which was actually up more than 4% from the lows of the day). AAPL has its Atlanta store employees file for a union election (jumping ahead of the New York City store that is also gathering signatures in order to trigger a union vote). San Francisco Fed President Daly (a dove) also voiced her thoughts. This included that she fears the coming series of rate hikes could tip the economy into recession, but that she also thought the dip would be mild.
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After the close Wednesday, TSLA, EFX, KNX, LSTR, SCX, SEIC, KMI, VMI, and THC all reported beating on both the revenue and earnings lines. TSLA in particular blew away Wall Street’s expectations ($3.22 actual vs $2.26 est. and $18.76 billion vs $17.80 bill est.). Meanwhile, AA, and CCI both missed on revenue while beating on earnings. On the opposite side, CVNA and GL both beat on revenue while missing on earnings. However, LCRX and SNBR reported misses on both lines.
In business news this morning, AMZN announced that it plans to open up its Prime delivery service to other retailers. This will allow other merchants to sell their goods under the “Buy with Prime” without explicitly mentioning AMZN…for a fee of course. The service will also appeal to the 200 million existing AMZN Prime members. Elsewhere, AAL says that it expects a Q2 profit and is seeing very strong bookings. It has returned to 94% of its 2019 flight schedule, which is more than competitors DAL and UAL.
Overnight, the Asian markets were mixed again, with more exchanges in the green than red, but the losers moved more than the winners. Shenzhen (-2.70%), Shanghai (-2.26%), and Hong Kong (-1.25%) paced the losses. Meanwhile, India (+1.49%) and Japan (+1.23%) were by far the biggest gainers. In Europe, stocks are mostly green at mid-day. The FTSE (+0.17%) lags again while the DAX (+1.57%) and CAC (+1.82%) are leading the region higher in early afternoon trading. As of 7:30 am, US Futures are pointing toward a green start to the day. The DIA implies a +0.63% open, the SPY is implying a +0.79% open, and the QQQ implies a +1.08% open at this hour. 10-year bond yields are back up to 2.877% and Oil (WTI) is up three-quarters of a percent to $103.05 in early trading.
The major economic news scheduled for release on Thursday, we get Initial Weekly Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), and Fed Chair Powell speaks at both 11 am and 1 pm. Major earnings reports scheduled for the day include ABB, ALK, AAL, T, AN, BX, DHR, DQ, DOV, DOW, FCX, GPC, HRI, HBAN, KEY, MMC, NEE, NUE, PNR, PM, POOL, DGX, SNA, SON, SNV, TSCO, TPH, UNP, WSO, and XRX before the open. Then after the close, SAM, FE, ISRG, PPG, SNAP, SIVB, and UFPI report.
So far this morning, AN, PM, BX, DOW, DHR, MMC, AAL, TSCO, DGX, DOV, SON, HBAN, POOL, WSO, SNA, PNR, ALK, TPH, SNV, and DQ have all posted beats on both lines. Meanwhile, T missed on revenue while beating on earnings. On the other side, KEY, XRX, and HRI beat on revenue but missed on the earnings line. However, ABB missed on both lines.
Earnings will be a tailwind for the bulls today as a large majority of reports came in as beats on both lines last night and this morning. However, Jobless Claims have a chance to rock the boat in premarket while Fed Chair Powell is also speaking during the day. The mega-cap Dow Components look to be breaking free of the recent range while the broader SPY and QQQ seem to still be struggling with that resistance. This may indicate a rotation toward the names perceived to be safer in a rising-rate environment. However, remember that both intraday volatility and day-to-day chop have been the norm for a while now. So, respect that fact and continue to be cautious. Don’t be in a hurry to chase into a rally the first few minutes of the day. Swing trading is not about catching every cent of a move. It’s about taking your slice out of the middle of a swing.
Remember that the first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor.
Swing Trade Ideas for your consideration and watchlist: MCK, CLX, TSLA, DVN, NKE, CCJ, MO, URA, IBM, ORCL, APD, UA, SWN, F, FSR, APA, GM, COP. 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.
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🎯 Dick Carp: the scanner paid for the year with HES-thank you
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🎯 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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