Bears Look to Start Friday With a Roar

On Thursday, the major indices gapped lower in a divergent manner. (The DIA gapped down 0.10%, SPY gapped down about 0.25%, and QQQ gapped down two-thirds of a percent.)  After those gaps, we saw a sideways roller-coaster ride in a tight horizontal channel until 2:30 pm.  However, at that point the bulls stepped in to drive a stronger wave for 45 minutes was met by an even sharper selloff in the last 10 minutes of the day. This action left us with indecisive, Spinning Top type candles.  (It also sets up potential Morning Star signals in the 3 indices if we get the right candle Friday.  However, every Morning Star Setup is also a Bearish Doji Continuation Pattern setup.)  With all this said, the indices are also very extended below their T-lines (8ema) at this point.  

On the day, nine of the ten sectors are in the red with Comm. Services (+0.01%) barely hanging on to the green while Consumer Cyclical (-2.24%) was by far the largest losing sector.  Meanwhile, the SPY was down 0.86%, DIS was down 0.42%, and QQQ was down 1.23%.  The VXX was flat at 18.87 and T2122 has dropped extremely deep into the oversold territory to 1.79. 10-year bond yields have spiked to 3.704% and Oil (WTI) was up three-quarters of a percent to $83.60/barrel.  So, the good news is that the major post-Fed volatility has dissipated.  However, the bad news is that there is still major indecision and some volatility within the strong bearish trend.

In Economic news, Q2 Current Account came in much better than expected (-$251.1 billion vs. -$260.6 billion forecast and -$282.5 billion in Q1).  This 11.1% decrease in the deficit happened due to a sharp INCREASE in exports.  Weekly Initial Jobless Claims also came in slightly better than expected (213k vs. 218k forecast, but a bit higher than last week’s 208k).  Meanwhile, overseas, South Korea reported its first monthly PPI fall in two years.  In terms of bond yields, most of them are sitting at the highest level since 2008.  The 2-year is at 4.118% yield.  However, the most concerning fact about bond yields is the complete inversions, which is usually an indicator of a pending recession.  (2-year > 5-year > 10-year > 30-year.)  Finally, in counter-inflationary news, Bloomberg reports that copper has fallen by one-third since March.

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After the close, in earning news, COST reported beats on both the revenue and earnings lines.  At the same time, FDX and AIR both reported misses on revenue while beating on earnings.  None of those companies changed forward guidance.  However, FDX had already reduced the reported quarter’s guidance and had removed all forward estimates in a preannouncement last week.  The company also said it was struggling with light shipping volumes in Europe and Asia.

In other stock news, speaking of FDX, the company announced they are raising Express, Ground, and Home Delivery by an average of 6.9%.  The company will increase FedEx Freight rates by between 6.9% and 7.9%.  They also announced a plan to cut costs which they expect to deliver $2.25 billion in cost savings during fiscal 2023. Elsewhere, the Wall Street Journal reported after the close that HUM and CVS are both in the running to acquire senior primary care provider CANO.  (CANO was up 60% between 3:15 pm and 3:30 pm Thursday as the news leaked.  The stock closed up 32% on the day.)  Finally, after the close, the SEC announced that BA and its former CEO (Muilenburg) have consented to pay $200 million and $1 million respectively to settle charges of issuing materially misleading statements in 2018 and 2019, following the company’s multiple 737Max crashes.

In miscellaneous news, the Yen soared Thursday as Japanese monetary authorities continued their intervention to prop up their currency.  The Yen climbed 1.2% against the US Dollar on the day.  With that said, the Dollar gained against the Euro and Loonie.  Elsewhere, Reuters reports that Senate Republicans threatened large banks (JPM, BAC, C, WFC, USB, PNC, etc.) that they will face unspecified retaliation unless they abandon and avoid all liberal stances on social, environmental, and/or cultural issues (so-called ESG issues).  Meanwhile, the Senate Democrats “requested” (again, an implied and unspecified threat) that the banks remain neutral on employee unionization, limit and strictly manage bank risks, and warned them over profiteering and practices that prey on customers (such as WFC has repeatedly been found guilty). Finally, in one last quasi-political tidbit, it was widely reported last night that Senator Manchin does not have even the Senate votes to pass his Energy bill aimed at removing environmental restrictions, fast-tracking project permitting, and approving pipelines.  It’s uncertain which, if any, of the oil and coal companies (Manchin’s benefactors) may have been relying on this bill or which are most impacted if it does fail to pass.

Overnight, Asian markets were red across the board.  Australia (-1.87%), South Korea (-1.81%), and India (-1.72%) led the region lower.  In Europe, stocks are sharply lower as Putin’s farce referendums begin in the areas Russia still holds (but even refugees from those areas held in Russia are not permitted to vote), the UK announced a raft of corporate tax cuts, and eurozone PMI fell again.  (The British pound also fell 1.8% to a fresh 37-year low versus the dollar.)  The FTSE (-2.14%), DAX (-2.43%), and CAC (-2.33%) are leading the region lower in early afternoon trade.  However, even the best exchange in the region is down 1.70% (Switzerland).  As of 7:30 am, US Futures are pointing toward a significant gap lower to start the day.  The DIA implies a -1.19% open, the SPY is implying a -1.30% open, and the QQQ implies a -1.42% open at this hour.  10-year bond yields are surging again to 3.771% and Oil (WTI) is down more than 3% to $80.85/barrel in early trading.

The major economic news events scheduled for Friday are limited to Mfg. PMI and Service PMI (both at 9:45 am) and Fed Chair Powell speaks again at 2 pm.  There are no major earnings reports scheduled for Friday. 

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As we come into the last day of the week, markets are staring at more than a 4% loss so far by the SPY. GS also sharply reduced their year-end target for the S&P500 from 4300 to 3600 (citing rising interest rates and, as a result, increasing recession risk. Overseas, the Europeans are scrambling to cap wholesale energy prices, subsidize companies and households for energy costs, and add better/additional volatility circuit-breakers to energy markets. The point is, the picture is pretty bleak and there isn’t a lot of good news to bolster bulls.

With this backdrop, the strong bear trend remains in place across all 3 major indices. However, especially after today’s significant gap down, we are again very extended from the T-line (8ema) and are deeply oversold in terms of the T2122 indicator. The DIA will be testing the June lows if we open as we sit now and there is no significant potential support in the other indices before we reach that test as well. So, expect volatility and even though everything looks very bearish, do not forget we are extended. Markets moving in zig-zags and there will be a zag coming at some point soon. Finally, remember that it’s Friday and there is a weekend news cycle ahead. Consider whether you should take profits, move stops, hedge, or adjust position sizes ahead of the two days when we can’t react to news.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

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.

TC2000 Discount

🎯 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

Market Tries to Steady After Fed Whipsaw

Markets gapped about a half of a percent higher at the open Wednesday.  This turned into a long sideways grind in a tight range on low volume for all 3 major indices right up until the Fed announcements at 2 pm.  That abruptly came to an end, when the Fed news hit and we saw the true definition of whipsaw. After the announcement, there was a small surge higher for 5 minutes, only to be met by a massive 1.6% to 2% collapse in the 5 minutes after that initial surge.  The volatility continued when Fed Chair Powell began to speak, the bulls surged the market back up by more than a full percent, to take us to the highs of the day in all 3 major indices at about 2:50 pm.  However, the whip was not done as the bears stepped in shortly after 3 pm to drive us back down into the close, taking us out on the lows of the day.  

On the day, this action left us with large bearish engulfing candles that had a significant upper wick and that had failed a retest of the T-line (8 ema) in all 3 major indices.  All 10 sectors were red on the day with Consumer Defensive (-0.53%) by far the strongest and Consumer Cyclical (-2.58%) by far the weakest sector.  The SPY lost 1.73%, the DIA lost 1.71%, and the QQQ lost 1.82%.  VXX gained over 2% to 18.86 and contrary to what you might expect, T2122 dropped deeper into the oversold territory at 3.45.  10-year bond yields fell to 3.514% and Oil (WTI) fell two-thirds of a percent to $83.42/barrel.

In Economic news, August Existing Home Sales came in a bit stronger than expected (4.8 million versus the 4.7 million forecast and 4.82 million in July).  EIA Weekly Crude Oil Inventories also followed the API number from Tuesday evening by building less than was expected (+1.142 million vs +2.161 million barrels forecast).  Across the pond, the UK’s new PM Truss announced corporate tax cuts and reversing a planned corporate tax increase as her plan for fighting a recession.  IFS (the non-partisan arbiter of UK government spending) called the move disappointing and said there is little chance the cuts would ever pay for themselves and they will likely increase the UK budget deficit by around 3.5% of GDP.  However, as stated above, the day’s big economic news came out of the Fed.

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In Fed News, the FOMC decided to go with a 0.75% rate hike (to 3.25%) which was exactly what more than 80% of traders had been expecting.  The FED statement also indicated that they will keep hiking well above the current level in order to fight inflation.  The FOMC now projects the “terminal point” (the highest they will raise rates) to be 4.6% and that this level will be reached in 2023.  The “Dot Plots” (the individual FOMC member expectations) do not foresee a rate cut until at least 2024.  Meanwhile, the Fed projections see unemployment rising from the current 3.7% to a high of 4.4% next year.  They also expect GDP Growth to slow to +0.2% for 2022 and then rise slowly to a long-term rate of +1.8%.  (That +0.2% growth number for 2022 is a sharp cut from their June estimate of +1.7%.  This coupled with the wording “below trend growth” scared many traders.)  However, the Fed expects headline inflation to drift lower the rest of the year, coming down to a 5.4% number (compared to July which expected 6.3% inflation by year-end).  Finally, they expect to have inflation back down to 2% by 2025.

In stock news, META announced plans to cut costs by 10%.  This is likely to include job cuts, but nothing was announced yet.  Then after the close, MSFT announced an increase in its quarterly dividend by 10% to $0.68, payable on 12/8 for holders of record on 11/17.  On the opposite side, GLT announced it has suspended its dividend in order free up cash for the operational and financial needs of the company.  Also, after the close, FUL, KBH, LEN, SCS, and TCOM all reported misses on the revenue line while also beating on the earnings line. KBH and SCS went further to lower forward guidance while the others left guidance as it was stated the previous quarter.

In Energy news, the UK government announced a multi-billion-pound bailout program to help companies pay their energy bills.  They also will cap wholesale energy prices for the next six months.  In the US, the Senate ratified (in a bipartisan manner, 69-27) the “Kigali Amendment” to the Global Environmental Treaty.  This amendment outlaws various HFC gasses used in HVAC and Refrigeration units.  These both followed an oil surge after Putin’s ratcheting of tensions calling up another 300,000 reservists and then threatening nuclear attacks (by saying they were being threatened with nukes).  However, the Fed got the last word as the Dollar reached a new 20-year high after the Fed news, working against all dollar-denominated commodities and driving oil down. 

Overnight, Asian markets were mixed but leaned to the red side.  Thailand (+0.72%) was by far the biggest of the 3 winners.  Meanwhile, Hong Kong (-1.61%), Australia (-1.56%), and Taiwan (-0.97%) led the majority of the region’s exchanges downward.  In Europe, stocks are mostly red at mid-day with the notable exception of Russia (+2.04%).  The FTSE (-0.32%), DAX (-0.62%), and CAC (-0.68%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.01% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.28% open at this hour.  10-year bond yields are up again to 3.54% and Oil (WTI) is up eight-tenths of a percent to $83.64/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Q2 Current Account and Weekly Initial Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for Thursday, ACN, DRI, and FDS report before the open. Then after the close, AIR, COST, and FDX report. 

In economic news later this week, on Friday, we see Mfg. PMI, Service PMI, and Fed Chair Powell speaks again. Meanwhile, in earnings reports later this week, on Friday there are no major earnings reports scheduled.

So far this morning, ACN has posted beats on both the top and bottom lines.  Meanwhile, FDS beat on revenue while missing on earnings.  The DRI report missed on revenue and reported in-line in terms of earnings.

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In late-breaking news, the Bank of England raised rates by 0.50%, which followed the same move made by Norway’s Central Bank. However, Turkey is swimming against the current by cutting interest rates by a full percent…even as the country is suffering from 80% inflation. Meanwhile, the US Dollar is down this morning (versus the basket of 10 peer currencies). Some of the Dollar’s move lower is due to the Japanese government intervening to prop up the Yen for the first time since 1998.

With this backdrop, the strong bear trend remains in place across all 3 major indices. It now looks (ahead of weekly unemployment data) like we will open just a modest amount lower. However, we are again extended from the T-line (8ema) and are deeply oversold in terms of the T2122 indicator. There is also potential support not far below. So, beware of the potential for “gap and reverse.” As yesterday’s Fed whipsaw should have taught us…we simply can’t get caught chasing. Otherwise, Mr. Market will punish us severely. So, be patient and remember that the first rule of making big money in the market is to not lose big money in the market.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: GME, AAPL, UBER, SQQQ, GOOG, AMZN, SDS. 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.

TC2000 Discount

🎯 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 PlansPrivate 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

F Warns, Swiss Hike, as All Eyes On Fed

Markets gapped down (0.88% in the SPY, 0.89% in the DIA, and 1.10% in the QQQ) at the open Monday.  However, this was a bear trap as bulls immediately stepped in and rallied all 3 major indices back up through the gap and into positive territory before 11 am.  At that point, the market started a sideways grind with a slight bearish trend for a few hours.  Then finally, the bulls stepped back in at 2:30 pm to drive us back to the highs of the day at 3 pm and take us out on the highs.  This action left us with gap-down, white-bodied, Marubozu-type candles that engulfed the prior white candles.

Nine of the 10 sectors were green with Healthcare (-0.75%) by far the biggest loser and Basic Materials (+2.11%) by far the biggest gaining sector.  Meanwhile, the SPY gained 0.76%, DIA gained 0.68%, and QQQ gained 0.60% on the day.  At the same time, the VXX closed down over 9% to 17.99 and T2122 climbed out of the oversold territory to 27.34.  10-year bond yields pulled back from early highs to 3.49% and Oil (WTI) has recovered from early lows to $85.53/barrel.  All-in-all, just a bear trap day that maybe held support and relieved some over-extension.  

In stock news, AXP announced Monday that it will be hiring 1,500 technology workers before the end of 2022 (a 2.5% headcount increase) despite other financial institutions cutting jobs. Meanwhile, TSLA announced that it has completed its production capacity expansion project at its Shanghai facility.  Elsewhere, at the end of the day Monday, Bloomberg reported that banks led by BARC and BAC are moving ahead with risky leveraged buyout financing projects that had 8-10% ahead of the Fed decision, citing several project examples. (The takeaway is that, despite interest rates rising, big banks are still willing to undertake risky projects in search of an additional 4% profit above their own projected terminal Fed Funds Rate…which would make risk-free bond yields in the area of only 2.5%-3% below their risky projects.)  In other news, a group of 46 US states has now appealed a lower court dismissal of an anti-trust lawsuit against META.  Finally, after the close, F warned investors of an additional $1 billion in unplanned supply chain costs during Q3.

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In Economic news, on Monday, the National Assn. of Home Builders Housing Market Index dropped three points to 46.  Any reading below 50 indicates that single-family homebuilders have a bearish sentiment toward the housing market.  Elsewhere, Fed Funds futures have now priced in an 81% chance of a 0.75% rate hike along with a 19% probability of a 1.00% hike by the FOMC on Wednesday.  The US Dollar rose on these expectations, nearing the 20-year high set on September 7th.  Obviously, this inversely impacts all dollar-denominated commodities such as oil, gold, and grains.  Finally, the second largest US Port (Port of Long Beach) reported a decline in inbound containers in August.  The Port Executive Director attributes this to cooling consumer demand and the end of pandemic-related port backlogs.  (Long Beach and Los Angeles together account for 40% of container traffic from China.)

In Energy news, Reuters reports that German utility companies (RWE and Uniper) are very close to signing a long-term LNG supply contract with Qatar as at least a partial replacement for Russian LNG.  The Qatari fields that would supply this gas are partly owned and operated by RDS, XOM, and COP. In a related story, Bloomberg reports that European natural gas prices fell again (its longest losing streak since July) as EU countries unveiled plans to offset costs, avoid shortages, and help household users.  Elsewhere, AAA reports that US vehicle traffic fell by 3.3% in July.  This was the second consecutive monthly decline in travel that the group reported.  However, year-to-date, the group says miles traveled is up 1.8% over 2021 levels.

In miscellaneous news, Turkey’s President Erdogan told PBS News that Russian President Putin has pressed him on the need for peace.  Erdogan went on to say that the basis of any peace deal would have to be returning all Ukrainian land (including Crimea), but that no leader will ever admit military action was a mistake. Meanwhile, the battle to liberate Luhansk has Russian proxies worried and again threatening to hold a referendum to join Russia (implying Russia would then be free to nuke the rest of Ukraine to guarantee the Donbas then remains in Russian hands).  Elsewhere, US Dollar strength continues as the Euro is back below parity, the British Pound is at its lowest level going back to 1980, and the Japanese Yen is again approaching a 24-year low versus the dollar.  Finally, overnight Switzerland kicked off the week’s rate hikes by increasing its benchmark rate by 1.00%.

Overnight, Asian markets were green across the board.  Australia (+1.29%), Hong Kong (+1.16%), and India (+1.10%) led the region higher as China kept its benchmark interest rate unchanged.  Meanwhile, in Europe, at midday, we are seeing the opposite story taking shape.  Russia’s -4.03% is an outlier in the region and the FTSE (-0.09%) is mostly flat in its first trading since before the Queen’s funeral.  However, the DAX (-0.65%) and CAC (-0.74%) are more typical and lead the region lower.  As of 7:30 am, US Futures are pointing toward another down start to the day.  The DIA implies a -0.33% open, the SPY is implying a -0.40% open, and the QQQ implies a -0.47% open at this hour.  10-year bond yield continue to spike and are now at 3.539% while Oil (WTI) is off 0.4% to $85.39/barrel in early trading.

There major economic news events scheduled for Tuesday include August Building Permits and August Housing Starts (both at 8:30 am), and API Weekly Crude Oil Inventories (4:30 pm).  The major earnings reports scheduled for Tuesday are limited to AJG before the open.  Then after the close, SFIX reports. 

In economic news later this week, Wednesday, August Existing Home Sales, EIA Weekly Crude Oil Inventories, Fed Interest Rate Projections, Fed Rate Decision, Fed Statement, Fed Economic Projections, and the Fed Chair Press Conference all are reported.  On Thursday, we get Q2 Current Account and Weekly Initial Jobless Claims.  Finally, on Friday, we see Mfg. PMI, Service PMI, and Fed Chair Powell speaks again.

In earnings reports later this week, Wednesday, GIS, FUL, KGH, LEN, SCS, and TCOM report.  On Thursday, we hear from ACN, DRI, FDS, AIR, COST, and FDX report.  Finally, on Friday there are no major earnings reports scheduled.

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The downtrend remains in place but the market feels like it is pausing here, waiting on the Fed decision before making any significant moves. However, the vast majority of traders expect a 0.75% hike tomorrow (the futures say the probability is now 82%). You will have to judge for yourself whether the risk is more for a lesser or greater hike. With that said (and ahead of housing data), it looks like we will open with a gap down today. So, beware of the potential for “gap and reverse” like yesterday. Simply, just don’t get caught chasing.

The major indices all remain extended a bit to the downside at this point, at least relative to their T-line (8ema). As mentioned, the trend also remains bearish. However, there is support just below. This indecision is not a good environment for swing trading. This is a “get quick or get out” market where the intraday whip and the daily “gap and chop” could eat your account alive. So, don’t feel the need to trade. Be patient and remember that the first rule of making big money predict in the market is to not lose big money in the market.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: BVN, NCLH, LVS, SQQQ, TZA, SPXS, MOS, WMT, NEM, NFLX, NVAX, ZS, PINS, KGC, MRNA, VALE, BAC, JPM, TSLA, FCX, CUK. 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.

TC2000 Discount

🎯 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 PlansPrivate 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

Bear Gap As Bond Yields Rise For Monday

FDX removing guidance and predicting a global recession had markets spooked on Friday.  As a result, the 3 major indices gapped down (between 1.1% and 1.5%) at the open and has then oscillated sideways in a fairly tight range until 2:30 pm.  At that point the bulls stepped to rally for the rest of the day, closing near the highs of the day.  (However, still the lowest close in two months.)  This action gave us gap-down, indecisive Spinning Top candles across all the major indices.  This will put all 3 major indices in a large Bearish Engulfing signal on the Weekly chart. 

On the day, all 10 sectors are firmly in the red.  The Energy and Industrials sectors led the way lower while Comm. Services and Consumer Defensive held up the best.  SPY fell 1.18%, DIA lost 0.76%, and QQQ fell 0.66%.  The VXX gained 3.45% to 19.81 and T2122 dropped deep into the oversold territory at 5.87.  10-year bond yields are back down to 3.453% and Oil (WTI) is mostly flat at $85.28/barrel.  So, overall, it has been a fearful and yet undecided day in the market as most eyes focus on the Fed decision coming this week.

In Economic news, on Friday, Michigan Consumer Expectations came in slightly above expectations (59.9 vs 59.7 forecast) while current Michigan Consumer Sentiment came in below estimates (59.5 versus 60.0 forecast).  Bloomberg also reported interesting news about the housing markets that points toward the bifurcation of the economy.  If seems that in July nearly one-third of home purchases came in all-cash deals (buyers who paid cash and did not need a mortgage).  Records for such things are not kept, but this seems like a huge percentage. On Saturday, GS cut its US Economic Growth forecast for 2023 from 1.5% to 1.1% after it raised its terminal Fed Rate to 4.25% (Fed Funds have priced in 4.5% terminal).  Finally, in what points toward a downturn, WBD has fired 100 television ad salesmen as NFLX also announced another round of 300 terminations in a cost containment move.

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In stock news, Reuters reported that the details of SEC accounting guidance for any companies that hold cryptocurrency assets (announced on the last day of March) are now fleshed out.  These additional costs and capital reserve holding requirements have caused major lenders (GS, JPM, BK, WFC, STT, etc.) to put cryptocurrency projects on hold (or outright canceled).  After the close Friday, US Dept. of Justice officials have asked the court to take part in oral arguments in the Court of Appeals in the Epic Games vs. AAPL antitrust lawsuit. The DOJ is expected to be on the Epic side, but neither party objected to the DOJ request.  Also, after the close, BMY and ABBV both announced minor job cuts (360 for both companies combined).  On Saturday, the ECB asked AMZN and 4 European companies to submit proposals for the creation of a new Digital-Euro (cryptocurrency). This is part of a two-year prototyping and investigation phase of the project.

In Energy news, Germany took control of a major Russian-owned oil refinery Friday.  (This was the Schwedt refinery owned by Rosneft.  This refinery supplies 90% of the fuel used in Berlin.)  Meanwhile, on Sunday, China’s August gasoline exports were reported as almost double (+97.4%), while its LNG imports for the month fell 28.1% from a year earlier.  Overnight, Bloomberg reported that after a Russian Gazprom unit (seized by Germany earlier this year after the invasion) canceled shipments to India, GAIL India has been forced to buy 3 LNG tankers (for October to November delivery) on the open market, paying twice the price it had previously paid Russia.

In miscellaneous news, the Fed is not the only central bank looking at rate hikes this week.  Japan, the UK, Norway, Sweden, Switzerland, Taiwan, and several other countries all have rate meetings set for this week.  While the Fed is widely expected to continue the inflation-fighting theme with another 0.75% hike, much of the rest of the world (especially places like the Philippines, Indonesia, and even Turkey) is likely to take a softer approach.  (Counting on the US and EU to do the heavy lifting on taming global inflation.)  Speaking of Taiwan, overnight President Biden answered an interview question, stating that the US forces would defend Taiwan from “any unprecedented attack.”  (That was the fifth time he has made a similar statement on Taiwan since the Russian invasion of Ukraine.) Finally, note that the UK markets are closed for the Queen’s funeral and Japan is also closed for a national holiday.

Overnight, Asian markets were nearly red across the board.  Only India (+0.52%) and Thailand (+0.07%) were able to manage to hang onto the green.  Meanwhile, South Korea (-1.14%), Malaysia (-1.08%), and Hong Kong (-1.04%) led the region lower.  In Europe, we see a similar story taking shape at mid-day.  Only Russia (+0.30%) is holding green.  At the same time, the DAX (-0.69%), and CAC (-1.23%) 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 -0.85% open, the SPY is implying a -0.87% open, and the QQQ implies a -0.92% open at this hour.  10-year bond yields are up to 3.506% (the highest level since 2011) and Oil (WT) is down almost 2% to $83.55/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for Monday are limited to AZO before the open.  (AZO reported a beat on both the top and bottom lines early today.)

In economic news later this week, Tuesday we get August Building Permits, August Housing Starts, and API Weekly Crude Oil Inventories.  Then Wednesday, August Existing Home Sales, EIA Weekly Crude Oil Inventories, Fed Interest Rate Projections, Fed Rate Decision, Fed Statement, Fed Economic Projections, and the Fed Chair Press Conference all are reported.  On Thursday, we get Q2 Current Account and Weekly Initial Jobless Claims.  Finally, on Friday, we see Mfg. PMI, Service PMI, and Fed Chair Powell speaks again.

In earnings reports later this week, AJG and SFIX report Tuesday.  Then Wednesday, GIS, FUL, KGH, LEN, SCS, and TCOM report.  On Thursday, we hear from ACN, DRI, FDS, AIR, COST, and FDX report.  Finally, on Friday there are no major earnings reports scheduled.

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The downtrend continues with the gap lower looking to take at least the SPY and QQQ indices down near to a potential support level. With that said, and while there may be some movement today, many traders are going to be waiting to see whether the Fed gives us any surprises. (Talking heads are all over the place, calling for every scenario from +0.25% to +1.00% on Wednesday. However, traders have priced in +0.75% judging by the Fed Funds Futures.)

The major indices are extended to the downside at this point, far below their T-line and with T2122 deep into the oversold territory. However, we have seen indecision (more wick than candle body) the last 3 days (as well as in the premarket session today). So, expect some volatility after the gap lower…but also be prepared if the market goes dead while traders begin waiting on the FOMC. All we can do is trade the chart (the actual price action) and not what you predict will happen.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: No Tade 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.

TC2000 Discount

🎯 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 PlansPrivate 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

FDX Scares Market As Bears Look to Roar

Stocks gapped lower at the open Thursday (0.14% in DIA, 0.44% in SPY, and 0.89% in QQQ).  Price then proceeded to meander sideways in a fairly tight range until 2 pm, when the bears took over to drive the market to new lows at about 3:30 pm.  However, a slight rally in the last 30 minutes took us out not far up off the lows. This left us with black, Inverted Hammer type (maybe you’d call QQQ a spinning Top) candles in the 3 major indices.  In addition, all 3 indices have either broken out of or are now right at the breakout level of, their “dreaded h” patterns.  So, the bears will have the wind at their back on Friday.

On the day, eight of the 10 sectors were in the red.  Healthcare (+0.20%) was really the only sector managing to stay green along with Financial Service (+0.01%) while Energy (-2.33%) and Utilities (-2.32%) were by far the weakest.  The SPY closed down 1.14%, DIA lost 0.54%, and QQQ lost 1.67%.  The VXX ended up 0.31% to 19.15 and T2122 remains in the oversold territory at 13.24.  10-year bond yields are climbing to 3.449% and Oil (WTI) is down just under 4% to $85.09/barrel.  So, overall, it was an indecisive day until the bulls ran out of gas mid-afternoon and the bears took over to take us out near the lows.

In Economic news, August Retail Sales grew 0.3%, but some of that increase was in inflated prices rather than additional purchases.  Weekly Jobless Claims came in a bit lower than expected at 213k (226k forecast).  Meanwhile, both the Philly Fed Mfg. (at -9.9 vs. +2.8 forecast) and NY Empire State Mfg. Index (-1.50 vs -13.00 forecast) came in negative with Philly coming in lower than expected and NY coming in above the expectation.  August Exports were down 1.6% while Imports were down 1.0%.  July Business and Retail Inventories came in as expected.  However, August Industrial Production came in below expectations (-0.2% vs. +0.1% forecast).  So, overall, we had mixed results in terms of what the Fed may make of economic growth (if they were to just look at today’s data).

SNAP Case Study | Actual Trade

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In stock news, after hours, FDX withdrew its 2023 forward guidance while saying it expects a global recession next year. The company also warned it will be adversely impacted by global softness in shipments in the current quarter, citing Asia and Europe in particular for economic weakness.  FDX said it now estimates Q1 could come in at $3.44 EPS (far below the current consensus of $5.14).  FDX stock was down 16% in past-market trade on the news.  Elsewhere, 6 companies announced share repurchase plans today.  (TXN announced a dividend increase as well as an additional $15 billion on top of the existing plan of $8.2 billion for share buybacks.  KFRC announced an unspecified repurchase authorization during the period September 16 – November 2, 2022.  MQ authorized $100 million in share buybacks.  ARW added $600 million to its existing buyback program.  OLP declared a $0.45 quarterly dividend and approved a small $5.2 million addition to its remaining $2.3 million repurchase program.  And JG authorized $5 million of share buybacks over the next year.) Meanwhile, the Consumer Financial Protection Bureau announced it will start regulating “buy now, pay later” companies like AAPL, SQ, PYPL, and AFRM.

In Energy news, the deal to avert a rail strike hit oil hard on Thursday.  This caused the “crack spread” (refiner profit margin) to close at its lowest level since March.  Elsewhere, Germany is now in advanced takeover talks with the 3 major gas-importing companies in that country (Uniper SE, CNG AG, and Securing Energy…which was formerly Gazprom Germania).  Finally, on Thursday the Biden Administration announced a plan to accelerate Off-Shore Floating Wind Electrical Generation, setting a new goal of 15 gigawatts of floating offshore capacity by 2035 as part of the broader (and nearer) goal of having 30 gigawatts of offshore wind capacity in production by 2030.  (The latter goal includes floating as well as anchored wind farms.)  Companies in that space include NEE, NEP, GE, WNDY, TPIC, and the etf FAN.

In China news, Asia woke up to a raft of Chinese Economic Reports.  Among these were August Housing Prices (-1.3%), August Industrial Production (+4.2%, beating estimates of +3.8%), August Retail Sales (+5.4%, beating estimates of +3.5%), and August Unemployment (5.3%, down slightly).  These reports did nothing to improve the hopes for a second-half recovery as the Chinese Property slump/debacle and new Covid-19 lockdowns continue to rock the second largest economy in the world.  This came a day after Chinese President Xi Jinping met with Russian President Putin (and reportedly raised concerns over the Russian invasion and losses they have suffered).  Finally, in a bid to bolster US competitive advantage, guarantee sources, and limit the transfer of technologies, President Biden issued an executive order that expanded the regulatory duties and power of the Committee on Foreign Investment in the US.  The order requires them to block foreign acquisitions and investments by countries (especially China) with adversarial aims into US technology firms (especially AI, microelectronics, biotech, quantum computing, clean energy technologies, etc.).  However, the order does not regulate “outbound investment” of American companies in China, which has been a major source of lost intellectual property in the past.  (China requires foreign companies operating in China to turn over trade secrets and data.)

Overnight, Asian markets were nearly red across the board.  The lone holdout was Singapore (+0.01%) which hung onto the green by its fingernails.  Meanwhile, it was  Shanghai (-2.30%), Shenzhen (-2.30%), and India (-1.52%) leading the region lower.  In Europe, a similar picture is taking shape at mid-day.  The FTSE (+0.12%) is the only real green in the region while the DAX (-1.45%) and CAC (-1.30%) are leading the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -0.72% open, the SPY is implying a -0.80% open, and the QQQ implies a -0.95% open at this hour.  10-year bond yields are up to 2.469% and Oil (WTI) is up two-thirds of a percent to $85.62/barrel in early trading.

The major economic news events scheduled for Friday are limited to the Michigan Consumer Sentiment (10 am).  Friday is also Quadruple Witching, so watch for pinning action.  There are no major earnings reports scheduled for the day.

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Thursday’s action and the futures this morning suggest we are headed down to retest the July lows. However, most eyes are trained on the FOMC and traders are trying to prejudge what the Fed will do next week. Talking heads can’t make up their minds with some calling for a 1.00% increase while others say we need to ease off the increases and go 0.50% or even 0.25% this month. The Fed gets the only vote and all we know for sure is that they have been talking in such a way as to suggest 0.75% and that is what is baked into the Fed Funds Futures.

With that backdrop, we should note that the bears clearly have control. However, the gap lower implied by futures will put us pretty extended from both the T-line and in terms of the T2122 reading. So far, the potential support levels don’t seem to be helping the bulls hold the line and fight bearish momentum. All we can do is trade the chart (the actual price action) and not what you predict will happen. Still, keep in mind that it is Friday and that means it’s time to consider the weekend news cycle. Do you need to take profits, hedge, or reduce your position sizes? Think about it.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: DXD, JDST, LABD, SPXS, FAZ, ERY, SPXU, DRIP, SQQQ, FNGD, DOG, SDOW, QID, RWM, SQXS, TZA. 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.

TC2000 Discount

🎯 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 PlansPrivate 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

Rail Deal, Jobless Claims, and Fed Reports

Stocks gapped very modestly higher at the open Wednesday following the extremely bearish gap and run Tuesday.  However, all 3 major indices spent the rest of the day crossing back and forth that gap space.  With that said, the bears picked up a little strength in the afternoon to take us back down to new lows…only for the bulls to step in and rally markets for the last 30 minutes of the day.  This action left us with indecisive (Doji-like) candles in all 3 major indices.

On the day, seven of the 10 sectors were green.  However, Energy (+2.64%) was far and away the most bullish sector while Basic Materials (-0.96%) was by far the most bearish sector.  The SPY gained 0.38%, The DIA gained 0.11%, and the QQQ gained 0.79%.  Meanwhile, the VXX was up less than half of a percent to 19.09 and T2122 climbed a bit, but remains oversold at 17.99.  10-year bond yields have pulled back after being up earlier to 3.41% and Oil (WTI) is up 1.58% to $88.69/barrel.  All-in-all, the bears did not get any follow-through from Tuesday’s massacre.  However, there was also nothing for bulls to really hang their hat on at all…the bears are clearly still in charge.

In Economic news, August wholesale prices (as measured by the PPI) fell 0.1% which is in contrast to Tuesday’s CPI increase.  (The annual rate was 7.3%, down from the July reading of 7.7% annualized.)  This was modestly encouraging to bulls during the premarket.  Later in the morning, EIA Weekly US Crude Oil Inventories showed a 2.442-million-barrel build.  Elsewhere, Amtrack has canceled all long-distance trains until after the railroad strike expected Friday is resolved.  In related news, CSX, UNP, and NSF have stopped rail shipments of refrigerated and volatile or decay-sensitive products like food, chemicals, hazardous materials, etc. until the same potential strikes are resolved.  (9 of 12 unions have reached a tentative deal with the railroads, 1 has rejected the management offer, and the other 2 are undecided as of Wednesday night.)

SNAP Case Study | Actual Trade

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In stock legal news, TSLA was sued by owners over alleged false “Autopilot” and “Full Self-Driving” claims made by the automaker.  Elsewhere, CA sued AMZN over violations of the state’s antitrust law for blocking price competition.  Meanwhile, WFC reached a $94 million settlement to resolve a class-action lawsuit over impacting credit ratings by putting 213,000 mortgage borrowers in forbearance without the customer’s request or approval during the pandemic.  Finally, the Wall Street Journal reported that Fed regulators are frustrated with the progress of C since it was reprimanded over its risk management system.  Sources told the paper that C has been told it will face charges if it does not fix its risk management process very soon.

In miscellaneous news, 4 companies announced share repurchase plans Wednesday.  These include JNJ (up to $5 billion), CHH (5 million shares, bringing the total to 6.7 million), CMCSA (increased to $20 billion), and NETI ($50 million).  Elsewhere, GOOGL announced it will cut project funding and jobs in its “New Idea Incubator.”  Meanwhile, the Ethereum merge (shifting from “proof of work” to “proof of stake”) is expected today.  This merge will essentially kill Ethereum mining operations and dramatically limit the supply of the coin that is available.

In Energy news, oil was up Wednesday on talk of oil being used for heating in Europe if natural gas supplies remain cut by Russia.  Meanwhile, in Congress, Senate Majority Leader Schumer announced that the stop-gap government funding bill (which must be passed and signed before Sept. 30 to avoid a shutdown) will include plans demanded by WV quasi-Democrat Manchin.  Those riders will ease environmental protections and energy project permitting requirements.  (This was part of the deal to get Manchin’s vote for the Inflation Reduction Act earlier this year.)  However, progressive House Democrats (who must also pass any stop-gap bill) have not been consulted and are opposing the amendments on environmental grounds.  Across the pond, the EU has now proposed a windfall profit tax for wind, solar, nuclear, and coal electricity generators by capping the price they could charge to $180/MWh (current prices are just below $500/MWh) in the region.

Overnight, Asian markets were mixed on mostly very modest moves.  Shenzhen (-2.10%) and Shanghai (-1.16%) were the outliers with most exchanges moving only slightly in either direction.  In Europe, we see the same picture taking shape (minus the Chinese outliers) at mid-day.  The FTSE (+0.26%), DAX (-0.12%), and CAC (-0.28%) are typical and lead the region in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.14% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.32% open at this hour.  10-year bond yields are back up to 3.449% and Oil (WTI) is off six-tenths of a percent to $87.95/barrel.

The major economic news events scheduled for Thursday include August Imports / Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, and August Retail Sales, (all at 8:30 am), August Industrial Production (9:15 am), July Business Inventories and July Retail Inventories (both at 10 am).  The major earnings reports scheduled for the day are limited to ADBE before the open.  There are no major earnings reports after the close.

In economic news later this week, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching.  In terms of earnings later this week, there are no earnings reports scheduled for Friday.

LTA Scanning Software

Wednesday was an indecisive, blah day in the market. Premarket futures are implying a similar start today, but we do have quite a bit of data coming before the opening bell. Overall, I would say it looks like traders are still trying to digest the surprise CPI number and prejudge what the Fed will do next week. Talking heads keep bringing up a 1.00% increase by the FOMC, but Fed Funds Futures have priced in 0.75%. In last-minute news, President Biden announced that a tentative deal has been reached between the Rail Worker Unions and the CSX, NSF, and UNP. This deal will avert a strike and avoid serious pain for US supply chains. This should be very good for the bulls (who had worried about impacts). However, I’m not sure many traders understand the real implications of a rail shutdown…so response could be muted.

With that backdrop, we should note that all 3 major indices remain below their downtrend lines and below their T-lines. The market bias is bearish. However, while the bears have control on the daily chart, the bulls have support just below to help them fight that momentum. So, keep an eye on that in the premarket news. Beyond that, trade the chart (the actual price action) and not what you predict will happen. We can’t be first or last over the hill if we want to succeed.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SQQQ, SPXU, DXD, EOG, TWTR, RCL, CCL, AMZN, AAPL. 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.

TC2000 Discount

🎯 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 PlansPrivate 2-Hour Coaching

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

The Price of Disappointment Was Clear

The bulls were in a great mood early in the premarket Tuesday…too great of a mood.  Then the August CPI came in hotter than forecast (and much hotter than the bulls had expected that it would come in well below forecast) and at that point, it was “Katy bar the door.”  So, instead of gapping up two-thirds of a percent, all 3 major indices flipped in premarket and gapped down very significantly (between 2% and 3%) at the open.  From that open, we saw follow-through by the bears until 11:30 am.  Next came a two-hour mid-day pause with the bears finally stepping back in with gusto at 1:30 pm to steadily sell off the 3 major indices the rest of the day.  This action left us with Bearish Kicker candles, which gapped down through the T-line (and downtrend line) and kept going south in the SPY, DIA, and QQQ.

On the day, all 10 sectors are down hard with Energy (-2.52%) and Utilities (-2.57%) as the laggards and Technology (-5.00%) leading the way lower.  The SPY fell 4.31%, the DIA fell 3.96%, and the QQQ fell 5.48%.  Meanwhile, the VXX is up 5% to 19.04 and T2122 dropped all the way from overbought to oversold at 13.21.  After being down in the premarket, 10-year bond yields have spiked up to 3.423%, and Oil (WTI) is just on the red side of flat at $87.58/barrel.  Overall, this was the worst day since 2020 across all 3 major indices.

In Economic news, as mentioned above, August CPI came in at an annual rate of 8.3% when 8.1% was forecast and there had been a lot of talk in the last few days expecting 8.0% based on the continued drop in gas prices. With that said, the August CPI Annual Rate was still better than the 8.5% in July.  (As a result, Feds Fund Futures now show that traders give a 35% probability of a Fed hike of 1% next week.)  Later in the afternoon, the August Federal Budget Balance also came in worse than expected at a $220 billion deficit versus a $213.5 billion deficit forecast and the July level at a $211 billion deficit. Elsewhere, the Dollar rallied 1.48%, bringing the Euro back below parity and gaining 1.2% against the Yen.  Finally, after the close, API reported that US Oil Inventories rose just over 6 million barrels last week (compared to a 3.6 million barrel build the week before).  However, the same group reported a gasoline drawdown of 3.23 million barrels for the same week.

SNAP Case Study | Actual Trade

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In TWTR news, Republican Senator Lindsey Graham proposed Tuesday that TWTR, META and other major social media platforms should face increased regulation and be required to obtain a renewable license to operate.  The Senator said he was working on legislation to do this along with other senators from both sides of the aisle.  At the same hearing, the TWTR whistleblower (best known as “Mudge”) informed the Senate that the FBI previously told the company about Chinese government agents working for Twitter.  However, the company was struggling internally to weigh the cost of protecting user data versus losing the Chinese advertising revenue if they were to take action against the Chinese. In the end, the company decided not to jeopardize the very lucrative revenue stream.

In other stock news, in contrast to GS (which announced coming job cuts on Monday), on Tuesday, both JPM and BAC both told media and investors that said they were more optimistic, would be cautious about doing any layoffs, and are fine with their current headcounts for now.  Elsewhere, SBUX told investors that has plans to open 9,000 new stores in China by 2025.  Meanwhile, the US Dept. of Commerce announced a deal with GOOGL to produce chips that researchers can then use to develop both nanotechnologies and other semiconductor chips.  These chips will be produced by SKYT.  (This is part of the spending from the recent Chips bill.)  Finally, after the close, AAPL announced it is creating a new Ad division and will launch ads within the AAPL App Store before the holiday season.

In miscellaneous news, Bloomberg reported that the US will begin refilling its strategic petroleum reserves once oil falls below $80/barrel.  So, that may put a floor under oil to some extent and for a while after oil prices reach that level.  Elsewhere, President Biden’s National Security Advisor Sullivan told the press that they are preparing another aid package for Ukraine to help follow on to counteroffensive that country has used to liberate more than 2,300 sq. miles of Ukraine from Russian occupation in the last week.  Meanwhile, European Commission President von der Leyen said they would raise an additional $140 billion (on top of the $225 billion of leftover Covid Relief funds that were approved by the EU) for use in cushioning consumer cost-of-living increases. On related news, Germany will increase its stake (and may fully nationalize) the country’s largest gas importer (Uniper SE).  Finally, US mortgage demand fell again last week as interest rates rose.  The national average 30-year fixed-rate mortgage for a conforming loan (20% down) went from 5.94% to 6.01%.  At the same time, loan applications fell 4% for refinancing loans and were flat on the week for new purchase loans.

Overnight, Asian markets were down across the board.  Japan (-2.78%), Australia (-2.58%), and Hong Kone (-2.48%) led the region lower.  In Europe, with the exception of the FTSE-MIB (+0.57%), the same story is taking shape, just with less gusto.  The FTSE (-0.96%), DAX (-0.48%), and the CAC (-0.32%) are leading the region lower on smaller moves in early afternoon trade.  Even Russia (-1.62%) has not seen the bearish momentum we saw in the US yesterday.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day…ahead of data.  The DIA implies a +0.28% open, the SPY is implying a +0.34% open, and the QQQ implies a +0.33% open at this hour.  10-year bond yields are up slightly to 3.442% and Oil (WTI) is flat at $87.24/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to August PPI (8:30 am) and EIA Weekly Oil Inventories (10:30 am).  The only major earnings report scheduled for the day is DOOO before the open.

In economic news later this week, on Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching.

In terms of earnings later this week, Thursday ADBE reports.  However, there are no earnings reports scheduled for Friday.

LTA Scanning Software

Yesterday showed just how binary events can cause markets to react like a jilted lover. Small disappointments can sometimes lead to a face-ripping storm. Those of you who were very short the market had a glorious day (just don’t forget that event could have gone the other way) and those of you who were too long the market learned a valuable lesson about binary risk events. In either case, we’ve now had that zag I’ve been telling you was coming. The good news is that the market always overreacts, re-reacts, and reacts again. In other words, we know another zig is coming sometime soon.

With that backdrop, we should note that all 3 major indices are back below their downtrend lines and below their T-lines. The market bias is bearish. However, while the bears have control on the daily chart, the bulls have support just below to help them fight that momentum. The PPI news should not be such a binary risk as the CPI, but we may still see a reaction. So, keep an eye on that in the premarket. Beyond that, trade the chart (the actual price action) and not what you predict will happen. We can’t be first or last over the hill if we want to succeed.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

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.

TC2000 Discount

🎯 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 PlansPrivate 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

CPI Today, Some Expect Better Number

Markets gapped up through the downtrend lines in all 3 major indices.  After that we saw some follow-through for an hour in the SPY, DIA, and QQQ for an hour.  Prices then drifted back lower until shortly after noon, reaching the opening levels again.  From that point on, price meandered between the open and the highs.  This action left us with gap-up white candles with upper wicks (especially in the DIA).

On the day, all 10 sectors are green with Consumer Cyclical (+1.61%) and Energy (+1.54%) leading the way higher.  The SPY gained 1.07%, the DIA gained 0.71%, and the QQQ gained 1.19%.  The VXX is off 1.73% to 18.15 and T2122 is up well into the overbought territory at 91.92.  (The 3 major indices are also a tad extended above their respective T-lines.)  10-year bond yields have spiked back up to 3.356% (after being down in the 3.27% range early in the day) and Oil (WTI) is up 1.2% to $87.94/barrel.  Overall, the bulls were in a good mood from the Ukraine news and their growing expectation that CPI will come in better than forecast tomorrow morning.

In business news, Monday afternoon, GS announced it will be cutting several hundred positions later this month.  Then, after the close, PTON announced a major shakeup.  Two of the PTON Co-founders (including the CEO and Chairman) as well as the Chief Commercial Officer are leaving.  Elsewhere, after the close, TWTR shareholders voted to approve the sale to Elon Musk, despite his desire to back out of the deal).  BAC was also fined $5 million by FINRA for failing to disclose 7.42 million options positions between 2009 and 2020.  In addition, the SEC charged VMW with misleading investors starting in 2019.  In addition, an industry group that represents US Defense Contractors (LM, BA, RTX, GD, NOC, HON, LHX, TXT, CAE, HII, etc.), issued a report to Congress saying the Pentagon will need an additional $42 billion in the next fiscal year budget to make up for inflation.  Finally, SBUX will be holding an investor day today at 10:30 eastern.  Their new CEO is expected to address guidance, unionization of their workforce (one store at a time), and his vision for the company.

SNAP Case Study | Actual Trade

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In Economic news, the EU announced that member countries can use $227.5 billion in unused pandemic recovery funds for loans to offset the energy crisis brought on by Russia’s invasion of Ukraine.  Meanwhile, in the US, the coal industry (BTU, ARCH, AMR, CEIX, etc.) is in panic mode ahead of what could be a potential Friday strike by rail workers.  (Coal shipments would stop dead in the event of a rail strike.)  Other industries that will be massively impacted include Lumber (BCC, UFPI, EVA, WFG, etc.), Metals and Minerals (FCX, VALE, AA, BHP, RIO, TECK, CCJ, etc.), and Steel (GGB, MT, RS, CMC, etc.).  However, some industries have already shut down rail shipping (due to the nature of their products and the fear of shipments being stuck in rail cars during a strike).  These include Fertilizers (MOS, NTR, CF, CTVA, FMC, SMG, etc.) and Chemicals (LIN, SHW, DOW, ALB, APD, LYB, ECL, DD, CE, etc.).  

In a good sign for markets, a new survey by BAC finds that investors are fleeing the stock market searching for safety on recession fear.  The survey found that 52% of investors are already underweight stocks with a record high 62% saying they are overweight cash.  This matches up with Refinitiv-Lipper data that showed that last week saw the heaviest outflow of funds from equity funds seen in a quarter.  Since most money piles in and out when it is too late, this could indicate the markets are past the worst of the pullback.

After the close, ORCL posted a miss on both the revenue and earnings lines.  The company blamed foreign currency sales (versus the strong dollar) for the EPS miss.  So far this morning, CNM slightly missed on revenue while beating on earnings.  CNM also raised their forward guidance.

Overnight, Asian markets were mixed but leaned to the green side.  South Korea (+2.74%) was an outlier to the upside.  However, India (+0.75%), Australia (+0.65%), and Taiwan (+0.59%) led the region higher in modest trading.  In Europe, stocks are nearly green across the board at mid-day, also on modest moves.  Only Portugal (-0.48%) is preventing the clean sweep.  The FTSE (+0.35%), DAX (+0.71%), and CAC (+0.68%) are typical and are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward another green start to the day (though still well ahead of the morning data).  The DIA implies a +0.67% open, the SPY is implying a +0.71% open, and the QQQ implies a +0.70% open at this hour.  10-year bond yields are down significantly to 3.316% and Oil (WTI) is up more than 1.5% to $89.18/barrel in early trading.

The major economic news events scheduled for Tuesday we get August CPI (the last major inflation data point prior to the Fed 9/20 meeting, at 8:30 am) and the August Federal Budget Balance (2 pm).  The only major earnings report scheduled for the day is CNM before the open.

In economic news later this week, on Wednesday, August PPI and EIA Weekly Oil Inventories are reported.  Then Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching

In terms of earnings later this week, on Wednesday, DOOO reports.  Then Thursday ADBE reports.  Finally, on Friday, there are no earnings reports scheduled.

LTA Scanning Software

The bulls continue their run this morning, as they have the momentum and (again ahead of the CPI data) are looking to gap us higher at the open. The schadenfreude of the Russian losses (men, material, and most importantly land) in Ukraine is also still a mood-lifting factor for traders as well. However, it is worth noting the resistance of the late August lows that will have to be dealt with after the opening bell. This CPI report may well be a large binary event, as some traders seem to have convinced themselves that a lower than forecast number will cause the Fed to hike only 0.50% instead of the 0.75% most expect. Make sure you are trading the reaction, not predicting the news. Either way, we know that zigs don’t last forever. So, there is a zag coming sometime in the not-too-distant future.

With that backdrop, we should note that all 3 major indices have broken their downtrends, but have yet to establish new uptrends (higher swing highs and higher swing lows). This is exactly the type of market that can become very choppy and volatile. So, while the bulls have control in the premarket, be prepared for a “gap and fail” or at least intraday reversals as the bulls and bears fight it out.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: RIG, DVN, SQ, AMZN, NFLX, META, AAPL. 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.

TC2000 Discount

🎯 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 PlansPrivate 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

Bulls Happy on Ukraine, Inflation Hopes

Markets gapped modestly higher (0.6% – 0.9%) at the open Friday.  From there the bulls followed through with a rally the was stronger the first 30 minutes, but continued at a slow steady pace all day in all 3 major indices until profit-taking the last 15 minutes of the day.  This took all 3 up through their T-lines (8ema) and are now at or close to a test of their downtrend lines.  The SPY, DIA, and QQQ are all printed a strong, white-body candles.  This resulted in the first weekly gain (and a strong one at that) in all 3 major indices.

On the day, all 10 sectors are in the green.  However, Energy (+2.89%) and Basic Materials (+2.63%), Energy (+2.58%), and Technology (+2.53%) led the market higher.  However, the safety play Utilities (+0.54%) lagged.  The SPY was up 1.55%, DIA up 1.27%, and QQQ up 2.19%.  The VXX was up 1.4% to 18.47 and T2122 is right at the edge of the overbought territory at 79.22.  10-year bond yields are back up to 3.315% and Oil (WTI) has surged 3% to $86.10/barrel.  Overall, it was been a risk-on, “we ain’t afraid of no Fed hikes” day across the markets.

In business news, on Friday, the US International Trade Commission announced it will launch an investigation into SONO possibly violating the patents held by GOOGL.  Then, on Sunday, JPM acquired its 6th “Fintech” firm (Renovite). JPM was already the world’s largest merchant services bank (card processor), but this acquisition is aimed at allowing it to expand even more quickly into global small-business markets as Renovite supposedly will easily to integrate into JPM existing systems. In more economically important news coming later this week, the largest US Trucking Industry Group urged Congress to prepare legislation to prevent a rail strike on September 16. It seems that after President Biden stepped in to prevent the same strike in August, negotiations between UNP, CSX, and the unions representing 115,000 rail workers are making little progress.  Current legislation prohibits the workers from striking for 30 days (which expires 9/16).  If a strike does take place, the trucking industry group claims it will cost the US $2 billion per day in GDP output. The rail companies and their users are currently scrambling to ensure buffer inventories of supplies in case the stroke hits on Friday.

SNAP Case Study | Actual Trade

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In Russian invasion news, the Russian statistics Bureau (RossStat) revised the Russian Q2 GDP downward.  The release said that the Russian economy shrank 4.1% (down from the prior -4.0%) in Q2.  The World Bank also released a report saying that it will cost $350 billion to rebuild Ukraine after the Russian invasion (far above that country’s GDP of $200 billion in 2021).  On the ground, the Ukrainian offensive has caused a full-scale retreat by the Russians around Kharkiv and specifically the cities of Kupiansk and Izium (the major Russian logistics hub in Eastern Ukraine). In addition to the cities, the Russians fled from about 40 towns and villages, leaving heavy weapons, ammunition, and other supplies as they ran.  During this offensive, Ukraine liberated over 1,100 sq. miles and driven the Russians back to the Russian border in that Northeastern region the 5 days ended Sunday.  (This Ukrainian success will likely impact energy markets as well as overall market sentiment, at least in Europe.)

In Energy news, on Sunday, Treasury Sec. Yellen told CNN that Americans could see a spike in gas prices again this coming Winter.  Her reasoning is that by year-end, EU countries will have significantly cut or stopped buying oil from Russia.  This will mean additional buyers for Middle Eastern and American oil, which will naturally drive prices higher.  Meanwhile, the IAEA reports that the final reactor at the Zaporizhzhia nuclear plant (largest in Europe) has now been shut down.  This eliminates the source of 20% of Ukrainian electricity, but also dramatically reduces the likelihood of an accident from continual Russian shelling in that area.

In technical analysis news, more than 46% of stocks are trading above their 40sma and almost 31% of stocks are trading above their 200sma at this point.  In the SPY, 451 (of 502) tickers had green days on Friday while 470 (or 502) were green for the week.  The biggest gainers on the week were REGN, SEDG, ALB, RCL, FCX, DISH, CZR, DXCM, SYK, MTCH, NCLH, UAL, PVH, CCL, TSLA, FTNT, LNC, HCA, NUE, EW, CTLT, and ENPH (all of this gained 10% or more for the week).  In the QQQ, 90 of 99 tickers were green for the week.  Of those, 11 (ZS, REGN, DOCU, MELI, DXCM, MTCH, TEAM, LULU, TSLA, CRWD, and FTNT) gained 10% or more for the week.

Overnight, Asian markets were green across the board.  Hong Kong (+2.69%), Taiwan (+1.54%), and Japan (+1.16%) led the region higher as Chinese inflation data came in better than expected (+2.5% vs. +2.7% forecast).  In Europe, stocks are also green across the board as traders are in a good mood on the Ukraine war news at mid-day.  The FTSE (+1.27%), DAX (+1.49%), and CAC (+1.21%) are typical and leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green start to the week.  The DIA implies a +0.25% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.49% open at this hour.  10-year bond yields are down a bit to 3.296% and Oil (WTI) is up three-quarters of a percent to $87.39/barrel in early trading.

The major economic news events scheduled for Monday is limited to the WASDE global Agriculture Report (noon) and a 10-year Bond Auction (1 pm).  There are no major earnings reports scheduled before the open.  However, ORCL reports earnings after the close.

In economic news later this week, on Tuesday we get August CPI (last major inflation data point prior to the Fed 9/20 meeting) and August Federal Budget Balance.  Then Wednesday, August PPI and EIA Weekly Oil Inventory are reported.  Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.

In terms of earnings, this is a very light week. Tuesday we hear from CNM.  On Wednesday, DOOO reports.  Then on Thursday ADBE reports.  Finally, on Friday, there are no earnings reports scheduled.

LTA Scanning Software

We start the week with markets in a good mood. The Russian losses (men, material, and most importantly land) in Ukraine have investors more hopeful. There is also a growing expectation that inflation data Tuesday will show that inflation has started to come down. (This expectation is largely on the back of strong and steady drops in fuel prices, but other commodities have joined the trend to a lesser extent.) However, these things may be fleeting. Russia has massive resources available, should it continue to stubbornly stick to Putin’s goal of capturing all of Ukraine. More directly, regardless of whether the CPI (Tuesday) and PPI (Wednesday) show an improvement, not many traders are betting that this will change the Fed’s mind about a 0.75% rate hike next week. So, don’t believe the zig will last forever. There is a zag coming sometime in the not-too-distant future.

With that backdrop, we should note that all 3 major indices are retesting their downtrend lines in the premarket. The DIA seems to be having the least luck at a breakthrough at this point. However, the broader SPY and QQQ seem to be gapping through that line. Above that, we have a potential resistance level from the 8/22-8/24 lows that will soon come into play. So, while the bulls have control in the premarket, be prepared for a “gap and fail.” In addition, intraday reversal and some volatility have been common or late.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ADT, CPNG, RIVN, SNAP, DISH, META, AAPL. 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.

TC2000 Discount

🎯 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 PlansPrivate 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

Bulls Looking to Gap Again on Friday

On Thursday, markets gapped modestly lower (a half of a percent in the large-cap indices and nine-tenths of a percent in the QQQ) on fears generated by fewer than expected new Jobless Claims and Fed Chair Powell’s premarket speech.  However, the bulls stepped in immediately and rallied markets until 11 am.  From there, the roller coaster was on with action oscillating back and forth between the opening lows and the 11 am highs.  This roller-coaster ended on an up wave.  This action tested the T-line (8ema) in all 3 major indices, but only the SPY managed to close above to pass the retest.  All 3 indices printed white-bodied Spinning Top candles.

On the day, seven of the 10 sectors ended up in the green.  The largest movers were Healthcare (+1.93%) and Financial Services (+1.38%).  Communications Services (-0.76%) was the largest losing sector on the day.  The SPY closed up 0.65%, the DIA up 0.60%, and the QQQ up 0.52%.  The VXX is off 1.56% to 18.26 and T2122 remains in the mid-range at 38.60.  10-year bond yields came back up to 3.323% and Oil (WTI) is up 1% to $82.74/barrel.  All-in-all, this was an indecisive day where the bears could not regain control, but the bulls also had no appetite for a fight.

In economic news, before the open, the ECB raised its rates 0.75% as expected.  Meanwhile, in the US, Weekly Initial Jobless Claims came in lighter than expected (222k versus 240k forecast) and Fed Chair Powell vowed to continue raising rates until inflation is under control.  He stressed that job growth is still very strong and therefore, inflation is job number one for the Fed.  Later in the day, EIA Weekly Crude Oil Stock (Inventories) shot higher with an 8.844 million barrel build (compared to a 250k barrel drawdown expected). Elsewhere, Treasury Sec. Yellen was politicking Thursday, touting the economic positives, calling for higher taxes on the rich as well as an increase in public assistance for the poor. However, on economy-related questions, she said that the cap on Russian oil prices will be a net positive for the global economy as well as the US.

SNAP Case Study | Actual Trade

Click for video

In big tech news, the White House announced 6 principles to guide “big tech reform” (which will be aimed at META, TWTR, AAPL, GOOGL, and AMZN).  The effort has broad bipartisan support (although for varying reasons) in Congress.  These principles were enhancing competition, robust privacy protections, rescinding company legal protections, increasing algorithm transparency, ending discriminatory algorithmic decision-making, and improving content moderation.  As you would expect, the tech giants are expected to spend tens of millions of dollars in campaign contributions and lobbying efforts to water down, control, or kill these legislative efforts.

In other stock news, Supreme Court Justice Gorsuch denied the appeal of ET against a $155 million award for not paying interest on late payments to various Oklahoma well owners.  Elsewhere, Reuters reported that TWTR agreed in June to pay whistleblower Zatko $7 million to settle a compensation dispute after TWTR terminated him.  Zatko (who goes by “Mudge”) is in the news for his congressional whistleblowing report and for being subpoenaed by Elon Musk in the trial over Musk’s TWTR buyout deal.  After the close, TMUS announced that it has authorized a $14 billion stock repurchase program to last through September of 2023. Finally, this morning TSLA announced it is “considering” building a lithium processing plant (to make battery materials) on the gulf in Texas. This announcement may have been a deflection as the company also replaced its leadership and set new facility goals at the TSLA Nevada “Gigafactory.”

In energy news, oil rose Thursday despite a large and unexpected rise in crude oil inventories after a 7.5-million-barrel outflow from the US Strategic Petroleum Reserve. US Gasoline inventories also rose 33k barrels (versus an expected drawdown of 1.67 million barrels.)  The primary cause for Thursday’s oil price rise was Russian President Putin threatening to end exports to the West should there be real action on the G-7 proposed “Russian oil price cap.”  Finally, a Wisconsin judge ruled that an ENB pipeline is trespassing on Indian tribal land (due to expired easements) and that the tribe is due financial compensation.  However, he also ruled the pipeline will remain in operation to avoid economic impacts and in recognition of Canada invoking a treaty.  The pipeline imports 540k barrels per day of Canadian oil for Wisconsin refineries.

Overnight, Asian markets were green across the board.  Hong Kong (+2.63%) was an outlier, while Taiwan (+1.20%), Shenzhen (+1.11%), and Singapore (+0.91%) led the region higher.  In Europe, stocks are following Asia at mid-day as we see green across the board.  The FTSE (+1.54%), DAX (+1.48%), and CAC (+1.62%) are leading a broad-based rally in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day in the US as well.  The DIA implies a +0.78% open, the SPY is implying a +0.85% open, and the QQQ implies a +1.08% open at this hour.  10-year bond yields are back down to 3.268% and Oil (WTI) is up almost 2% to $85.19/barrel in early trading.

There are no major economic news events scheduled for Friday.  However, we do have 3 more Fed members scheduled to speak (Evans at 10 am, Waller at noon, and George at noon).  Major earnings reports scheduled for the day are limited to ABM, KR, and WDH before the open.  There are no major earnings reports after the close.

After the close, DOCU and RH reported beats on both the top and bottom lines.  DOCU was up a whopping 18% in after-hours trading.  However, RH, while it did have a 10% after-hours range was flat as to 5 pm. So far this morning, ABM has reported beats on both the top and bottom lines while leaving guidance as previously stated.

LTA Scanning Software

As we start the day, the dollar has retreated after reaching an all-time record high. The ECB rate hike has given the Euro the fuel it needed to climb back just above parity and the Yen rallied on frustration over how weak it has become recently. In CA, EIX warned residents that is likely to need to cut power to 50,000 residents, not over power shortages but due to the risk of starting wildfires. However, this is not to say the temperatures have not caused power supply issues as the state grid operator is in its fourth straight day of grid emergency status. In Ukraine, the fighting is heating up as the Ukrainian army has recaptured over 400 square miles of territory due to new offensives in both the East (Izium area) and South (Kherson region). In a related story, EU states (and other G-7 members) are continuing to work on Russian oil price caps, despite Putin’s escalating threats. And, of course, all eyes seem to be focused on the British royals after the Queen passed away Thursday afternoon.

With that backdrop, we should note the market is still in a downtrend and that downtrend line has not yet been reached for a test of resistance by any of the 3 major indices. Yesterday’s candle turned more positive late after being pretty indecisive most of the day. And, again, we saw a reversal after the opening gap. So, be prepared for volatility, at least early in the day. The T-line (8ema) remains a key level for all 3 indices today as the bulls test their strength and the same will be true of the downtrend when we reach those levels. So, keep an eye on those tests as well.

Remember that today is Friday and its time to pay yourself if you have profits. It’s also time to prepare for the weekend news cycle with appropriate position resizing, hedging, and/or flattening. Bear in mind that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: No new 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.

TC2000 Discount

🎯 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

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