Stocks gapped lower between 0.60% and 1.00% in the major indices Wednesday.  Then after about an hour of sideways grind, they followed through to the downside to reach the lows of the day shortly after 11:45 am.  However, once again the dip buyers stepped in and the bulls began a rally that took us back to the highs of the day closing the morning gap in the large-caps) by 2:40 pm.  The Whipsaw took effect there and all 3 major indices started back down the rest of the day.  This action left all 3 major indices giving us gap-down, Doji / Spinning Top candles which indicate indecision in the current pullback.

On the day, SPY lost 0.71%, DIA lost 0.45%, and QQQ lost 1.14%.  Nine of the ten sectors were in the red with the Energy Sector managing green while Basic Materials, Technology, and Consumer Cyclicals led the way lower.  The VXX fell just under 1% to 21.10 and T2122 fell out of the overbought territory to 71.31.  10-year bond yields were significantly higher to 2.889%, while Oil (WTI) was up 1.36% to $87.71/barrel on the day.  Overall, a modestly red, indecisive day where all 3 major indices stayed above their respective T-lines (8ema).

In economic news, July Retail Sales came in dead flat, which was slightly below the +0.1% forecast and well below June’s +0.8%.  Meanwhile, June Business inventories came in as forecast at 1.4% (down from May’s 1.6%) and June Retail Inventories came in better than expected a 1.5% (versus 1.6% forecast).  The big surprise was EIA Oil inventories, which came in down 7.056mil barrels (versus -0.275mil forecast).  With this said, the big news was the July FOMC Minutes, which indicated meeting participants are in favor of sustained action to bring down inflation and stated that they saw a “neutral rate” (neither supportive nor restrictive of growth) to be around 2.25% – 2.50%.  Futures markets have now priced in a 50-basis-point hike for September (versus the last two meeting’s 0.75% hikes).

SNAP Case Study | Actual Trade

In earnings news, after the close, AMCR, BBWI, CSCO, KEYS, and SNPS all reported beating on both the revenue and earnings lines.  Meanwhile, ZTO missed on revenue while beating on earnings.  So far this morning, CLPBY, BJ, KSS, EL, NTES, SPTN, CSIQ, NICE, and FORTY all reported beats on both lines.  Meanwhile, TPR missed on revenue while beating on earnings.  However, it is worth noting that KSS, EL, and TPR all lowered forward guidance while reporting.

In stock news, HOG and union employees voted to ratify a 5-year contract that averts a potential strike.  The BBY meme stock fell sharply when Ryan Cohen (CEO of GME) filed with the SEC that he is beginning to sell his 9.5 million shares (total holdings) which is roughly 10% of the outstanding shares. Then, after the close, Investing.com reported that DEN is exploring a potential sale after it escaped bankruptcy in 2020. 

In Energy news, as mentioned above, US Oil Inventories fell sharply and unexpectedly this week.  The EIA went on to report that the cause was not domestic consumption nor a lack of supply.  The cause was a record amount of US oil exports of over 5 million barrels per day in the last week while WTI was selling at a steep discount to Brent.  Earlier in the day, a US Appeals Court overruled a lower court ruling that had halted the Biden Administrations’ effort to pause and reevaluate oil and gas leasing on Federal land and waters

Bloomberg reports that following the visit of Speaker of the House Pelosi and a second Congressional delegation the following week, formal trade talks between the US and Taiwan will now start in a long-promised effort to deepen ties. This comes amidst strenuous opposition from China. Elsewhere abroad, UK inflation came in at over 10% yesterday, giving them the highest inflation rate among the G-10. Then early this morning (US time), Turkey cut its interest rates to spur growth…even as the country faces an 80% inflation rate.

Overnight, Asian markets were nearly red across the board.  Only Singapore (+0.33%) showed any appreciable gains.  Meanwhile, Japan (-0.96%), Hong Kong (-0.80%), and Shenzhen (-0.62%) led the rest of the region lower.  In Europe, stocks are mixed at mid-day.  The FTSE (-0.04%), DAX (+0.67%), and CAC (+0.45%) are leading a slight lean to the upside.  However, 7 exchanges are showing red while 8 are showing green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a flat start to the day.  The DIA implies a +0.08% open, the SPY is implying a +0.08% open, and the QQQ implies a +0.03% open at this hour.  10-year bond yields are a bit lower to 2.868% and Oil (WTI) is up 1% to $88.98/barrel in early trading.

The major economic news events scheduled for Thursday include Weekly Initial Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), and July Existing Home Sales (10 am).  There are also two Fed speakers (George at 1:20 pm and Kashari at 1:45 pm).  The major earnings reports scheduled for the day include BJ, CSIQ, EL, KSS, NICE, SPTN, and TPR before the open.  Then, after the close, AMAT and ROST report.

In economic news later this week, on Friday there is no major economic news.  However, in earnings later this week, on Friday we get reports from DE, FL, and VIPS.

Earnings were surprisingly good (although some retail forward guidance was lowered) overnight and this morning. We still have Jobless Claims ahead, but at the moment it is looking like a modest (tentative?) bullish start to the day. That would make yesterday’s pullback exactly what the doctor ordered for a sustained rally. We can probably expect another low-volume, perhaps dead morning, as the rest continues. However, you can’t measure a river’s depth on average, meaning there will be pockets of extreme volatility in places like the meme stocks where BBBY is one to watch. The trend remains bullish, but remember the SPY and QQQ still have their 200sma overhead to deal with, and for that matter, DIA has not pulled away from its 200sma after breaking through.

Remember that trading is our job. So, 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: FUBO, VRM, C, GM, TOST, TTWO, GE, BAC, DM, WFC, WMT, UNP, TGT, RKT. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, markets gapped very modestly lower at the open and continued to follow through to the downside for the first hour. The exception to this was the DIA which was held up by WMT and HD and recovered the gap in the first 5 minutes.  From 10:30 am the bulls stepped into rally strongly at least refilling the gap and reaching the highs of the day at about 2:20 pm. However, at that point, we sold off hard for half of an hour, then waffled for 30 minutes before starting back up.  This is left us with modest gap-down indecisive (Spinning Top) type candles in the SPY and QQQ, as well as a breakout white candle with a significant upper wick in the DIA.

Seven of the ten sectors were in the green, with Consumer Defensive, Basic Materials, and Consumer Cyclicals out in front on strength of those WMT and HD earnings pops.  Healthcare and Technology were the biggest losing sectors Tuesday. SPY and DIA are testing their 200 smas and all 3 major indices are extended from their T-line.  The VXX is down one percent again to 21.29 and T2122 is telling us we remain well overbought at 96.97.  10-year bond yields are up into the 2.817% area and Oil (WTI) is down more than 3.27% to the $86.49/barrel area.

In economic news, we got mixed housing data.  July Building Permits came in a bit above forecast (1.674mil vs. 1.650mil estimated), but still below the June number (1.696mil).  However, July Housing Starts came in below forecast (1.446mil vs. 1.540mil average estimate).  Elsewhere, July Industrial Production came in significantly stronger than was expected (+0.6% vs +0.3% forecast and -0.2% in June).  Finally, at the close, President Biden signed the Inflation Reduction Act, setting a minimum 15% corporate tax rate, allowing Medicare to negotiate prices on 10 specific drugs, and setting up roughly $400 billion in money for automakers who produce “clean vehicles” while removing tax credits for consumers who buy such cars.

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In earnings news, after the close, A and JKHY both reported beating on the revenue and earnings lines.  So far this morning, TECHY, ADI, and PFGC all reported beats on both the top and bottom lines.  Meanwhile, LOW and TJX missed on revenue while beating on earnings.  On the other side, CABGY beat revenue while missing on the earnings line.  However, TGT and ZIM both missed on both lines.

In stock news, on Tuesday AAPL started positioning for the recession by laying off 100 contract recruiters, thus signaling they will do far less hiring in the next six months.  For the second day in a row, BBBY traded in a massive range (an 87% range Tuesday) as retail, and especially meme stock traders, got excited by CME Chairman Ryan Cohen placed another bet on the retailer by buying deep OTM January 2023 call options (with an exercise price at least 3-4 times the stock’s current $20 price).  This wild action also caused BBBY stock trading to be halted several times Tuesday.

In supply chain news, President Biden’s Rail Emergency Board delivered its rail contract recommendations Tuesday. The board’s creation put a stop to potential national rail strikes and the delivery of their advice now starts a 30-day clock before any strikes can legally happen.  The White House expressed hope that these new recommendations will break the stalemate between CSX, UNP, BRKB’s BNSF, and over 115,000 rail workers.  In related news, UNP reported that Q3 freight volumes are up 2% from one year ago.  The rail company also reported less congestion at freight terminals (fewer delays) and improved staffing levels compared to earlier in 2022.

In mortgage news, the average 30-year fixed-rate, conforming loan interest rate fell slightly from 5.47% to 5.45%.  Nonetheless, applications for home purchase loans fell 1% for the week (18% lower than the same week in 2021). Refinance applications also fell 5% for the week (82% lower than a year ago).  This meant an overall 2% lower loan application volume for the week.

Overnight, Asian markets were mostly green.  Only South Korea (-0.67%) printed any significant red.  Meanwhile, Japan (+1.23%), Shenzhen (+1.00%), and India (+0.67%) led the region higher.  In Europe, stocks are leaning heavily to the red side at mid-day.  The FTSE (-0.40%), DAX (-1.39%), and CAC (-0.57%) are leading the region lower with only Denmark (+1.43%) showing any appreciable green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the morning.  The DIA implies a -0.55% open, the SPY is implying a -0.73% open, and the QQQ implies a -0.82% open at this hour.  However, 10-year bond yields are up sharply to 2.88% and Oil (WTI) is on the red side of flat in early trading this morning.

The major economic news events scheduled for Wednesday we get July Retail Sales (8:30 am), June Business Inventories and June Retail Inventories (10 am), EIA Crude Oil Inventories (10:30 am), a 20-year Bond Auction (1 pm), and July FOMC Minutes (2 pm).  Fed Member Bowman also speaks twice (9:30 am and 2:20 pm).  The major earnings reports scheduled for the day include ADI, LOW, PFGC, TGT, TCEHY, TJX, and ZIM, before the open.  Then, after the close, AMCR, BBWI, SQM, CSCO, KEYS, SNPS, and ZTO report.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and July Existing Home Sales are announced and Fed Member George speaks.  Finally, on Friday there is no major economic news.

In earnings later this week, on Thursday, we hear from BJ, CSIQ, EL, KSS, NICE, SPTN, TPR, AMAT, and ROST.  Finally, on Friday we get reports from DE, FL, and VIPS.

This morning, it looks like Mr. Market is looking to correct the bullish over-extended condition we find ourselves facing. A modest pullback would be very healthy for the rally, so don’t panic. However, it may also be a slow day until mid-afternoon as it seems like there is a lot of desire to read the minutes of the FOMC July meeting for clues on what will happen in September. The other story will be the bad report from TGT from its one-time hit taken from discounting to unload inventory. With that backdrop, we can expect another low-volume, perhaps dead morning, potentially followed by a volatile afternoon. Either way, the trend remains bullish, but remember those stocks are extended/overbought…so they need a pause/pullback.

Remember that trading is our job. So, 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: QID, SDS, GE, WFC, GM, C, FUBO. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped lower between a third and a half of a percent on Monday.  However, all 3 major indices had filled the gap by 10 am.   From there we saw a grind sideways most of the morning, followed by a mid-day rally and then a sideways grind most of the afternoon.  Only a slight selloff the last 30 minutes of the day kept all3 major indices from closing near their highs of the day.  This action has left us with gap-down strong white candles with a small upper wick.

Eight of the ten sectors are green, with Energy (-1.99%) by far the biggest loser and a virtual dead heat for the biggest gainer between Consumer Defensive and Utilities.  The VXX has fallen over 2.5% to 21.49 and markets remain overbought with T2122 being very high in its range at 97.37.  10-year bond yields are back down a bit to 2.799% as traders buy bonds and Oil (WTI) is off more than 3.42% to $88.95, which is actually a recovery from early losses of more than 5%.

In economic news, on Monday the NY Empire State Mfg. Index came in far below expectations Monday.  The reading was -31.30 while +5.5 was forecast and July’s reading was +11.10.  That 42-point fall was the second largest on record.  Elsewhere, US Egg commodity prices have fallen 37% since the end of July (after a 47% increase in July).  This will be seen by consumers over the next 30 days.  Overseas, Chinese July Industrial Output grew 3.8%, well below the +4.6% analysts expected and even slightly slower than June’s +3.9%.  Meanwhile, Chinese July Retail Sales rose 2.7% year-on-year, far below the +5.0% forecast and June’s +3.1% number.  For that reason, China’s Central Bank cut both the 7-year and 10-year lending rates by 10 basis points

SNAP Case Study | Actual Trade

After the close, TME, GSM, NU, and FN reported beating on both the top and bottom lines.  However, COMP missed on both the revenue and earnings lines.  FN was up as much as 16% in post-market trading after their beat and an increase in guidance.  Meanwhile, NU was up 11% and GSM was up 9% in post-market trade.

In stock news, after the close, BRKB reported that it has tripled its stake in ALLY while also shedding its VZ holdings.  Elsewhere, AAL announced that it is cutting 16% of its November flight schedule (31,000 flights) well above the 2% of flights they are canceling for September and October.  Meanwhile, TWTR was ordered by the judge to give Elon Musk access to a former TWTR executive’s documents related to the court case over closing Musk’s acquisition of TWTR.  However, the same judge ruled that TWTR only needs to give Musk the data from one “bot checker.”  Lastly, Bloomberg reports that WFC plans to retreat from the home mortgage business.  WFC has dominated that business (issuing one-third of all US mortgages) since other banks backed off of that business during the 2008 financial crisis.  WFC issued $205 billion in new home loans in 2021.

In Energy news, on Monday, crude oil settled at a 6.5-month low on weak demand out of China, Saudi Aramco saying it was ready to ramp up production, and fear that Iran will comply with the 3 remaining stumbling blocks (which would allow Iran to start exporting oil again) Monday night.  Elsewhere, after the close, Reuters reported that energy companies are gearing up to capture some of the $430 billion in US Tax Credits from the Inflation Reduction Act by implementing carbon capture projects (pumping carbon captured from operations into wells).  CVX, XOM, SLB, ET, and TALO are all listed by Reuters as companies planning such projects.  Finally, Bloomberg reports that BP will sell off all of its Mexican oil assets as it refocuses on renewable energy.

President Biden will sign into law today a bill that eliminates the tax credit for electric and hybrid vehicles.  An automotive trade group told Bloomberg that this will eliminate customer tax credits for the purchase of 70% of electric and hybrid vehicles.  However, the same law will give tens of billions of dollars in grants, loans, and tax credits to automakers who build cleaner vehicles.  Obviously, major auto companies like GM, F, TM, HMC, and STLA are in the best position to gain from the incentives, even as the industry customers lose a reason to buy cleaner vehicles.

Overnight, Asian markets were mostly green on modest moves.  The only significant loss was in Hong Kong (-1.05%).  On the other side, Malaysia (+0.98%), India (+0.72%), and Australia (+0.58%) led the gains.  In Europe, stocks are leaning heavily to the upside at mid-day.  The FTSE (+0.64%), DAX (+0.67%), and CAC (+0.40%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.06% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.12% open at this hour.  10-year bond yields are up slightly to 2.81% and Oil (WTI) is flat in early afternoon trading.

The major economic news events scheduled for Tuesday include July Building Permits and July Housing Starts (both at 8:30 am), July Industrial Production (9:15 am), and API Weekly Crude Oil Stock (4:30 pm).  The major earnings reports scheduled for the day include ESLT, HD, SE, and WMT before the open.  Then, after the close, A and JKHY report.

So far this morning, WMT and HD have both reported beats on both lines.  Meanwhile, SE beat on revenue while missing on earnings.  However, ESLT missed on both the top and bottom lines. Both WMT and HD stood by their previous forward guidance during their reports.

In economic news later this week, on Wednesday we get July Retail Sales, June Business Inventories, June Retail Inventories, EIA Crude Oil Inventories, a 20-year Bond Auction, and Fed Member Bowman speaks twice.  Then Thursday Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and July Existing Home Sales are announced and Fed Member George speaks.  Finally, on Friday there is no major economic news.

In earnings later this week, on Wednesday, ADI, LOW, PFGC, TGT, TJX, ZIM, AMCR, BBWI, SQM, CSCO, KEYS, SNPS, and ZTO report.  Then Thursday, we hear from BJ, CSIQ, EL, KSS, NICE, SPTN, TPR, AMAT, and ROST.  Finally, on Friday we get reports from DE, FL, and VIPS.

Coming off Monday’s nice showing, markets seem to be pausing this morning. Or, perhaps, traders are just waiting for more clues as to future Fed rate hike sizes. Regardless, we get housing data later today and that industry’s trade group is already making the morning show rounds fretting about a “housing recession” caused by increasing loan rates and consumer fears over the future. (They conveniently forget about the long run of boon years when rates were historically low.) At any rate, the bulls could certainly use a little pause to rest following the strong moves made in the last week. With that backdrop, we can expect another low-volume day. Overall the trend remains bullish, but remember those stocks are extended/overbought…do not chase.

Remember that trading is our job. So, 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, markets gapped up a half of a percent.  After an hour of finding their footing, the bulls began a slow, steady, all-day rally that ran right into the close.  This left all 3 major indices printing large white candles with small lower wicks.  On the day, SPY gained 1.69%, DIA gained 1.23%, and QQQ gained 1.95%.  All 10 sectors were in the green with Technology leading the charge again.  The VXX also gained 1.66% to 22.05 and T2122 drove even higher into overbought territory at 97.41.  10-year bond yields fell to 2.842% and Oil (WTI) dropped back to $91.88/barrel.  Clearly it was a risk on day. 

This all capped the fourth straight week of gains, with SPY gaining 3.30%, DIA gaining 3.01%, and QQQ gaining 2.69% for the week.  It also cut the losses of the longer-term pullback in half, which may be a key indicator.  (No bear market rally since 1950 has halved its losses from the highs and then returned to new lows.  In other words, if the past is a good indicator, the bottom is now in and the bulls have history on their side.)  With that said, the Fed is still expected to continue raising rates (in smaller increments) for at least another six months.  This means it may still be too early for the broader market to pivot into a “Fed Bull” mode of chasing growth again (at least according to GS as reported by CNBC).

In economic news, both Imports and Exports were down more than expected in July (possibly indicating a global economic slowdown).  However, it was Exports that were much lower than expected (-3.3% vs -1.1% forecast).  The market took this to mean the Fed will have less reason to continue big rate hikes as we move forward.  On the plus side, Michigan Consumer Sentiment and Expectations both came in well above the consensus estimate as well as the June numbers.  This indicates that the public is now more comfortable with the economy and that policies are working as inflation falls and no huge recessionary impacts (mass layoffs) have started in this cycle.  And, as always, a relatively happy consumer is good for corporate profits.

SNAP Case Study | Actual Trade

In stock news, on Friday, PTON announced it will cut 800 jobs, shut stores, and raise prices as the “High-End Bike/Treadmill as a subscription” business struggles to remake its business.  After the close Friday, BA announced it has patched a vulnerability that could have allowed hackers to take control of on-board flight system (air speed, gauge readings, etc.) of some BA manufactured aircraft.  On Saturday, activist hedge fund Starboard Value announced it has slashed its KSS holdings by 80% in Q2 after the fund’s proposed acquisition of KSS was rejected.

In Energy news, Germany has taken measure to cut natural gas consumption by at least 2%.  The new law requires strict cutbacks by both public and private entities.  These include only heating public buildings to 66 degrees, not allowing pools to be heated, as well as building and monument illumination turned off.  Illuminated advertising will also be prohibited between 10 pm and 6 am.  Elsewhere, in a surprise move, Mexico (which now imports 100% of the natural gas it uses) announced plans to become the world’s largest exporter of nat. gas.  This includes 8 new exploration projects not far South of the US border that are expected to have a combined output of more than 50 million tons annually and are expected to come online as soon as 2023.  (Those 8 projects alone would make Mexico the #3 global producer of LNG and produce 55% of the US total production.)  Notable current LNG producers include CQP, LNG, SHEL, and TTE.

President Biden will sign the Inflation Reduction Act this week.  Among the provisions is giving the HHS Dept. the authority to negotiate drug prices for the first time.  (This was a huge loss for big pharma, which spent over $144 million lobbying and made more than $16 million in campaign contributions to defeat this measure.)  Among the companies potentially impacted by negotiations are BMY ($11.5 billion in drugs now likely negotiated), MRK ($7.3 billion in drug sales impacted), JNJ ($5 billion in drug sales now to be negotiated), and ABBV ($3 billion in drug sales impacted) among others.  **Note that these are not the sales amounts to be lost, but which are likely to be reduced by actual negotiated prices.

Overnight, Asian markets were mixed but leaned to the green side on mostly modest moves. Japan (+1.14%) and Taiwan (+0.84%) led the gains while Hong Kong (-0.67%) and Singapore (-0.38%) paced the losses.  In Europe, a similar picture is taking shape at mid-day.  The FTSE (-018%), DAX (-0.01%), and CAC (+0.01%) show a mixed, modest-move atmosphere while smaller exchanges show slightly stronger moves.  For example, Denmark (+1.36%) leads the gains and Norway (-1.00%) paces the losses in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.45% open, the SPY is implying a -0.46% open, and the QQQ implies a -0.26% open at this hour.  However, 10-year bond yields are down to 2.828% and Oil (WTI) is off over 5% to $87.48/barrel in early trading.

The major economic news events scheduled for Monday include NY Empire State Mfg. Index (8:30 am) and June TIC Net Long-Term Transactions (4 pm).  The major earnings reports scheduled for the day include LI, NUI, WEBR, and WES before the open.  Then, after the close, COMP, FN, GSM, NU, and TME report.

In economic news later this week, on Tuesday we get July Building Permits, July Housing Starts, July Industrial Production, and API Weekly Crude Oil Stock.  Then Wednesday we get July Retail Sales, June Business Inventories, June Retail Inventories, EIA Crude Oil Inventories, a 20-year Bond Auction, and Fed Member Bowman speaks twice.  Thursday Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and July Existing Home Sales are announced and Fed Member George speaks.  Finally, on Friday there is no major economic news.

In earnings later this week, on Tuesday we hear from ESLT, HD, SE, WMT, A, and JKHY.  On Wednesday, ADI, LOW, PFGC, TGT, TJX, ZIM, AMCR, BBWI, SQM, CSCO, KEYS, SNPS, and ZTO report.  Then Thursday, we get reports from BJ, CSIQ, EL, KSS, NICE, SPTN, TPR, AMAT, and ROST.  Finally, on Friday we hear from DE, FL, and VIPS.

After the last 4 strong weeks and Friday’s strong move by the bulls, major indices look extended from their T-lines and according to T2122. In addition, China’s Central Bank surprised markets overnight with a rate cut last night. However, it was a small cut of 10 basis points on the 7 and 10-year lending rates. (Indicating they are concerned the Chinese and global markets are cooling too fast.) With that backdrop, we can expect another low volume, yet volatile, day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, but remember those stocks are extended/overbought…do not chase.

Remember that trading is our job. So, 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: TWTR, MCD, ARKK, AMD, GRWG, NVDA, X You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, July CPI numbers came in much better than expected and this led to the bulls gapping markets higher.  The DIA gapped up 1.42%, the SPY gapped up 1.79%, and the QQQ gapped up a massive 2.39% at the open.  This broke the market out of its pullback from the last couple of days. However, after the open, all the heavy partying was over, as the bulls failed to give us follow-through with prices chopping sideways with a slightly bullish trend most of the day.  With that said, a rally at the end of the day took us out near the highs.  This left us with gap-up, indecisive, Spinning Top or Hangman type candles in all 3 major indices.

All ten sectors were green with Technology and Consumer Cyclical up more than two and three-quarters percent.  So, we definitely saw a risk-on day.  With that said, all 3 major indices are also now fairly extended from their T-line (8ema).  On the day, SPY closed up 2.04%, DIA was up 1.57%, and QQQ was up 2.79%.  The VXX fell to 21.44 and T2122 (4-week New High/Low Ratio) is back up deep into the overbought territory at 95.18.  Interestingly, 10-year bond yields were flat on the day at 2.785% and Oil (WTI) is back up 1.13% to $91.51/barrel on the session.

In economic news, as mentioned, July CPI came in a +8.5% annually.  This was much better than the +8.7% expected and a lot better than June’s +9.1% annual reading. EIA Crude Oil Inventories followed Tuesday night’s API data came in dramatically higher than expected.  The reading was +5.458 million barrels compared to a flat +0.073 mil barrels expected.  The 10-year note auction came in at a lower than current 10-year yields (2.775% versus 2.785% open market) and significantly lower than the last auction (2.960%).  Finally, the July Federal Budget Balance came in at 211 billion, which is down 30% from the same period in 2021.

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In energy news, Russian oil deliveries to Hungary. Slovakia, and the Czech Republic after a Hungarian group agreed to pay Ukraine in dollars for the pipeline transit fees.  This is a solution only for the month of August. Elsewhere, on Wednesday, LNT, WEC, NI, and PNM all announced that they are delaying the closure of coal-fired power plants in the US.  This is seen as a political gesture in response to the climate provisions of the recently passed Inflation Reduction Act.  All the companies cited delays or potential delays in the rollout of renewable energy projects when announcing the decision.  In a follow-up to the EIA Crude report, they also announced a drawdown of 4.978 million barrels for the week.  This indicates an increase in travel for the week.   

After the close, DIS, AVT, and STN all reported beating on both the top and bottom lines.  Meanwhile, CPNG, CACI, ENS, MFC, and VZIO all missed on revenue while beating on earnings.  However, APP missed on both the revenue and earnings lines.

In stock news, APP made an all-cash offer to acquire U.  This came the same day that U announced it has won a US government contract in partnership with CACI to provide simulation software.  ACHR has received a $10 million pre-delivery payment from UAL in relation to UAL’s order for 100 of the ACHR electric vertical takeoff and landing aircraft.  During its earnings reports, DIS announced that Disney+ subscriber growth was much higher than expected.  Analysts had forecast 147 million, but DIS reported 152.1 million subscribers.  Finally, JPM gold traders were found guilty of manipulating gold commodity prices by issuing bogus orders (canceled just before execution).  They join traders from DB and BAC who were previously convicted for the same “order spoofing” crimes.

Overnight, Asian markets were almost green across the board.  Only Japan (-0.65%) showed any red.  Meanwhile, Hong Kong (+2.40%), Shenzhen (+2.05%), Taiwan (+1.73%), and South Korea (+1.73%) led the region higher.  In Europe, most exchanges are on the green side, with the exception of the majors, at mid-day.  The FTSE (-0.33%), DAX (-0.07%), and CAC (-0.19%) lag the rest of the region in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.42% open, the SPY is implying a +0.31% open, and the QQQ implies a +0.21% open at this hour.  10-year bond yields are back down to 2.772% and Oil (WTI) is up three-quarters of a percent in early trading this morning.

The major economic news events scheduled for Thursday include July PPI and Weekly Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for the day include AER, AIT, AZUL, BAM, CAH, DDS, HBI, KELYA, EYE, PRMW, SIX, and USFD before the open.  Then, after the close, AQN, BAP, EDR, FLO, ILMN, OSCR, PFHC, RMD, RYAN, TOST, and VET report.

So far this morning, DTEGY, BAM, BFRS, USFD, DDS, AER, AIT, DDL, EYE, PRMW, and SLVM have all reported beats on both lines.  Meanwhile, CAH, KELYA, and TAST all missed on earnings while beating on revenue. However, AEG, HBI, and SIX missed on both the top and bottom lines.

In economic news, later this week, on Friday the July Import/Export Price Index, Michigan Consumer Sentiment, and WASDE Ag Report are released.

After yesterday’s happy CPI news (if 8.5% inflation can be called happy news), traders are hoping for a similar story from PPI. (We know inflation is high, but we want to see Producer Prices coming in a bit to indicate that inflation has already peaked.) That sets up a binary even (similar to earnings, but in this case covering the entire market). If PPI comes in lower than expected, look for traders to gap stocks higher again. However, if PPI does not show the improvement we saw in CPI, I’d expect traders to believe they were overly optimistic yesterday and sell the market in a knee-jerk reaction. With that backdrop look for another low volume, volatile day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, but stocks are extended again relative to their T-lines and T2122.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: UAA, DIS, CVX, Z, BA, AMD, BAC, COF, GRWG, SBUX. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, the large-cap indices opened flat while the QQQ gapped down about six-tenths of a percent.  From the open, both the SPY and QQQ sold off for about an hour.  Then the entire market ground sideways in a tight range the rest of the day.  This gave us indecisive, black-bodied (Spinning Top type) candles that are testing whether they can stay above their T-line (8ema).  With that said, we are just seeing a pullback in an otherwise in-tact uptrend. 

On the day, SPY fell 0.40%, DIA fell 0.16%, and QQQ dropped 1.13%.  In terms of extension, VXX fell slightly to 21.94 and T2122 is back in the mid-range at 68.60.  10-year bond yields are up slightly by remaining at 2.779% and Oil (WTI) is also up very slightly to $90.50/barrel.  So, overall, it was just another roller-coaster, “much ado about nothing” day on Wall Street.

In economic news, Q2 Nonfarm Productivity fell 4.6%, but that was better than the consensus forecast of -4.7% and far better than Q1’s -7.4%.  As is normal when productivity falls, Q2 Unit Labor Costs rose 10.8% which was worse than the forecast rise of 9.5%, but still better than Q1’s +12.7%.  After the close, API reported Weekly Crude Oil Inventories rose far more than expected.  The estimate was a flat +0.073 million barrels.  However, the actual build for the week was +2.156 million barrels.

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After the close, WELL, SMCI, HRB, AKAM, GO, TTEC, and ANGI all reported beating on both the top and bottom lines.  Meanwhile, WYNN, ADV, and MAXR all missed on revenue while beating on earnings.  On the other side, DAR, SWX, and LNW beat on revenue while missing on earnings.  However, COIN and RBLX missed on both the revenue and earnings lines.   

In stock news, META raised $10 billion from its first-ever bond offering, with the proceeds slated to be used for share buybacks and investments in revamping the business.  (This follows recent AAPL and INTC bond offerings.)   NCLH pre-announced a loss for the current quarter with revenue below previous estimates.  The cruise line said they expect occupancy rates will not reach pre-pandemic levels for another year, not at 65% of the 2019 levels.  In contrast, rivals RCL and CCL are both saying they expect to be over 100% occupancy this year.

In energy news, Russian oil shipments to Central Europe (Slovakia, Hungary, Czech Republic) via pipeline by Transneft were halted Tuesday by Ukraine.  The reason is that due to sanctions, Russia is unable to pay the transit fees to Ukraine.  This has shut down 250,000 barrels per day of oil flow.  Elsewhere, Bloomberg reports that the UK has a plan in place for at least several days of organized rolling blackouts next winter.  The British government forecasts that electricity capacity will fall short by one-sixth of peak demand on cold days due to natural gas shortages (even after coal-fired generation plants are brought back online).  Finally, the National Avg. Gasoline price has fallen below $4/gallon for the first time since March.  Gas prices have fallen more than $0.18 in the last week and $0.72 in the last month. In somewhat related news, the Rhine river (a massive logistics thoroughfare for Europe, including oil, natural gas, coal, etc.) has become unpassable as a changing climate has dropped the water level too low for barge traffic over much of the major river.

Overnight, Asian markets were nearly red across the board.  Only Singapore (+0.47%) and India (+0.06%) managed to stay in the green.  Meanwhile, Hong Kong (-1.96%), Shenzhen (-0.87%), and Taiwan (-0.74%) led the region lower.  In Europe, stocks are mixed but lean slightly to the green side at mid-day.  The FTSE (+0.05%), DAX (+0.16%), and CAC (-0.12%) are typical of the region with only Norway (-1.14) and Denmark (+0.80%) showing significant moves in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day (before data).  The DIA implies a +0.20% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.29% open at this hour.  10-year bond yields are up slightly to 2.799% and Oil (WTI) is off almost 2% to $88.83/barrel in early trading.

The major economic news events scheduled for Wednesday include July CPI (8:30 am), EIA Weekly Crude Oil Inventories (10:30 am), 10-year Bond Auction (1 pm), and July Federal Budget Balance (2 pm).  The major earnings reports scheduled for the day include ARCO, BHG, CAE, FOXA, HMC, LTH, NOMD, WEN, and WWW before the open.  Then, after the close, APP, AVAH, AVT, BRFS, CACI, CPNG, ENS, MFC, STN, VZIO, and ZIMV report

So far this morning, WEN and LTH have reported beats on both lines.  Meanwhile, WWW, ADRNY, RKUNY, DNPLY, and BHG all missed on revenue while beating on earnings.  On the other side, HMC and NOMD beat on revenue while missing on the earnings line.  However, VWDRY missed on both the top and bottom lines.

In economic news later this week, on Thursday we get July PPI and Weekly Jobless Claims.  Then on Friday the July Import/Export Price Index, Michigan Consumer Sentiment, and WASDE Ag Report are released.

With CPI data on the docket this morning, expect pre-market trading to get volatile at about 8:30 am. (The consensus estimate is that we will see 8.7% annual inflation.) On a related note, BAC told clients they expect the yield curve to invert more deeply (more than any time since the 1980s) on the Fed’s inflation-fighting actions. Elsewhere, Elon Mush has sold almost $7 billion worth of TSLA stock. (This brings his total sale of TSLA stock to $32 billion since November.) He claims this most recent sale was a preventative move, to avoid a massive sale of the stock if the court rules against him in the TWTR court case. However, he also said he would buy more shares of TSLA in the event he wins the case. With that backdrop look for another low volume, volatile day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, even if we are pausing or pulling back a tick to ease over-extension.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: CVNA, X, IGT, WFC, UBER, BAC, NTR, AA, NVAX, QNST, AR. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Whiplash was the order of the day in markets Monday.  Stocks gapped down by more than one-half of a percent to start the week.  However, the bulls immediately stepped in to rally sharply until 11 am.  They then managed to grind sideways for about an hour…until a strong selloff started at 11 am.  By 1:50 pm, the original gap-down level was reached again, but only to whipsaw back the other direction to recross the gap and then start back lower about 3:20 pm.  All 3 major indices closed modestly on the downside of flat.

This left us with something like white body, Spinning Top candles with more wick than body, and at least some of the wick on each end.  And once again, volume remains well below average.  Three of the 10 sectors are green with Consumer Cyclical by far the biggest winner and Energy by far the biggest since sector on the day.  On the day, SPY lost 0.31%, DIA lost 0.20%, and QQQ lost 0.07%.  The VXX surged almost 4% to 21.77 and T2122 fell but remains in the overbought territory at 90.63.  10-year bond yields fell sharply to 2.584% and Oil (WTI) plunged over 5% to $93.65/barrel. 

In economic news, both the July Mfg. PMI and the July ISM Mfg. PMI came in stronger than was expected.  However, both also came in lower than the June readings.  This news out of the US, in combination with worse-than-expected factory data from China and Europe Monday, resulted in a huge correction in Oil prices ahead of the coming OPEC+ meeting.

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After the close, AFL, BCC, DVN, CAR, TA, FANG, SANM, AMKR, SPG, CNO, MATX, ANET, SBAC, KMT, CACC, VNO, MPWR, AMRC, RRX, ENSG, STRL, TWI, RIG, NSP, UNVR, and RHP all reported beating on both the top and bottom lines.  Meanwhile, DVA, WMB, CF, LEG, and KFRC all missed on revenue while beating on earnings.  On the other side, ATVI, and KMPR beat on revenue while missing on earnings.  However, MOS, PINS, EHC and WWD missed on both the revenue and earnings lines.   

In stock legal news, West Virginia’s counties and cities reached a $400 million settlement with the 3 main medical distributors (MCK, ABC, and CAH) resolving more than 100 lawsuits over liability for the fueling of opioid use.  (This is separate from the $26 billion national settlement that the 3 companies plus JNJ had reached, which excluded WV.)  Elsewhere, AAPL was sued for violations of US Antitrust Law by a French App Development company.  This suit closely resembles one brought by the same law firm against AAPL, which resulted in a $100 million settlement for a smaller app developer last August as well as one the law firm settled with GOOGL for $90 million in June.  Finally, OPEN was fined $62 million by the FTC for cheating potential home sellers between 2017 and 2019.

On the Russian war story, Ukraine was able to launch its first ship full of grain since the start of the invasion.  Ukrainian President Zelenskyy said this was a positive sign and that 16 ships are already loaded with grain and other agricultural products and ready to sail, but that only 3 ships will leave port per day for the next two weeks as per the agreement.  In Russia, the Russian Central Bank (which has been lying already about the state of the economy) told Reuters that the 4.3% economic contraction will likely increase to 7% in Q3.  (Overall, they claim the Russian GDP will fall only 4-6% in 2022 and 1-4% in 2023.)  In addition, Russia has instituted a “stealth national mobilization.”   New edicts require each of Russia’s 85 provinces to raise a new brigade for deployment to Ukraine.  In addition, some major factories are being asked to recruit a battalion each.  (Each battalion represents 500 – 1,000 men and each brigade 2,000 – 8,000 men.)  If actually implemented, that 200,000 fighting-age men would be a significant drain on the Russian economy.

Overnight, Asian markets leaned to the red side.  Chinese markets lead the drop as House Speaker Pelosi visits Taiwan and Chinese reaction is not yet clear.  Shenzhen (-2.37%), Shanghai (-2.26%), and Hong Kong (-2.36%) led the region lower but losses were widespread.  In Europe, stocks are nearly red across the board at mid-day with only Norway (+0.34%) and Greece (+0.23%) managing green.  The FTSE (-0.02%), DAX (-0.72%), and CAC (-0.47%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing to another lower start to the day.  The DIA implies a -0.54% open, the SPY is implying a -0.59% open, and the QQQ implies a -0.72% open at this hour.  10-year bond yield continue to fall to 2.552% and Oil (WTI) is up three-fourths of a percent to $94.64/barrel in early trading.

The major economic news events scheduled for Tuesday we get June JOLTS (10 am), API Weekly Crude Oil Stocks (4:30 pm), and Fed voter Bullard speaks (6:45 pm).  The major earnings reports scheduled for the day include AME, ARNC, BP, CAT, CNP, CMI, DBD, DD, ETN, ENTG, EXPD, RACE, IT, GEO, GPRE, HSC, HSIC, HUN, IDXX, ITW, INCY, IGT, JBLU, KBR, KKR, LCII, LEA, LDOS, LGIH, MPC, MAR, TAP, MPLX, PEG, SPGI, SABR, SEE, SGRY, SYNH, BLD, TSEM, VSH, WAT, WEC, WLK, XYL, ZBRA, and ZBH before the open.  Then, after the close, AMD, ABNB, ANDE, AIZ, BXC, BFAM, CZR, CWH, CHK, CLW, CNDT, CTRA, CXW, DCP, EA, EXAS, FMC, GILD, GXO, THG, PEAK, LFUS, LPLA, MTCH, MCY, MCHP, OI, OSH, OXY, PYPL, PFSI, PXD, PRU, RNG, SCI, SKY, SEDG, SBUX, STE, TEX, TX, UNM, VRSK, VOYA, and WCN report.

So far this morning, BP, MPC, CMI, LEA, DD, TAP, LDOS, MAR, WLK, MPLX, ZBH, HUN, CNP, WEC, AME, ZBRA, XYL, RACE, IT, LCII, BLD, VSH, GPRE, INCY, WAT, ATKR, and GEO have all reported beats on both lines.  Meanwhile, CAT, ETN, HSIC, KBR, SEE, SYNH, IGT, DBD, IDXX, LGIH, and TSEM all missed on revenue while beating on earnings.  On the other side, UBER, PEG, ARNC, JBLU, ENTG, AQUA, and WLKP all beat on revenue while missing on earnings.  However, SPGI, RDSMY, and SGRY all missed on both the top and bottom lines.

In economic news later this week, on Wednesday we get the July Services PMI, June Factory Orders, July ISM Non-Mfg. PMI, and Crude Oil Inventories. Then on Thursday Import/Exports, Weekly Initial Jobless Claims, and the June Trade Balance are announced and Fed voter Mester speaks.  Finally, on Friday we get July Avg. Hourly Earnings, July Nonfarm Payrolls, July Participation Rate, and July Unemployment Rate.

Markets started August on a very volatile day. Today, geopolitical fear of Chinese reaction to House Speaker Pelosi’s Taiwan visit (highest ranking US visitor in 25 years) has global markets on edge as China’s Foreign Minister has now said the PLA (Chinese Army) won’t sit idly by if she did make the visit. The other uncertainty is US political games as Republicans look to use obscure rules to block the Democrat’s tax, health prices, and climate deal they are trying to pass through reconciliation (which only requires 50 votes instead of 60). With that backdrop and pretty strong earnings coming in again today, look for another low volume, volatile day. So, either look for longer horizons (loose stops and ability to ride fluctuations) or tighten up on the bat and take smaller, faster swings. Overall the trend remains bullish, even if we are pausing or pulling back a tick to ease over-extension.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: VIPS, KWEB, FUTU, BABA, PDD, BZ. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened positive, if mixed, on Friday.  The DIA opened flat, while the SPY and QQQ both gapped about a half of a percent higher at the open. All 3 major indices then followed through in a rally until about 10:45 am.  At that point, all 3 sold off sharply for 45 minutes only to reverse again and start a long, strong, sustained rally for almost the entire rest of the day.  With that said, in the last 10 minutes of the day, all 3 indices sold off as that dark pool volume crossed the tape.  This left us with strong white candles with wicks on both ends across the major indices.  Volume was closer, but still below, average on that month-end rebalancing. 

Eight of the 10 sectors were in the green, with Energy up a whopping 3.08% and the worst of the losers was Healthcare (-0.59%).  Over 70% of stocks closed about their 40sma and 29% closed above the 200sma.  On the day, SPY gained 1.46%, DIA gained 1.01%, and QQQ gained 1.82%.  The VXX climbed slightly to 20.94 and T2122 remains deep in the overbought territory at 96.46.  10-year bonds yields were down sharply as somebody bought up bonds, giving us a 2.66% yield and Oil (WTI) was up more than 2% to $98.43/barrel.  This ended the best month since 2020 in all 3 major indices.

In economic news, June Personal Spending came in stronger than expected at +1.1% (versus +0.9% estimated and May’s +0.3%).  The Q2 Employment Cost Index came in a bit higher than expected too at +1.3% (versus +1.2% forecast), but better than Q1’s +1.4% number. The Chicago PMI came in lower than expected at 52.1 (55.0 estimate).  However, Michigan Consumer Sentiment came in better than expected at 51.5 (versus an estimate of 51.1 and last month’s 50.0). Taken together, this shows us the business is softening in anticipation of a downturn, but the consumer (driver of the economy) is holding up and has a little better outlook now that gas prices have been falling for 2 months.

SNAP Case Study | Actual Trade

In stock news, on Friday BABA was added to the SEC’s delisting watchlist (of more than 270 Chinese companies identified as at risk for delisting. The dispute is over non-compliance with US auditing standards.  BABA was down more than 11% on the day.  Elsewhere, AVYA fell 57% after the company posted terrible preliminary Q3 results and fired the company’s CEO.  At the close Friday, AMD passed INTC in terms of market cap after INTC’s -8.56% day on poor earnings and outlook.  On Saturday, BA workers cancelled their planned strike and will instead vote on a new contract proposal on Wednesday.  Also on Saturday, USB was fined $37.5 million for the same practices that caused the uproar over WFC.  USB had pressured employees to meet quotas by illegally accessing customer credit and personal data (for targeting) and then opening sham accounts in customer names.

In China news, real estate developer Evergrande said one of its subsidiaries had been ordered to pay a little over $1 billion to a guarantor, who had guaranteed loans in July 2021.  Evergrande defaulted on the loans, the guarantor paid, and now Evergrande is obligated to pay the guarantor ahead of other creditors.  In the same sector, a Chinese mortgage payment revolt (well over 100 developers have been hit with a loan payment boycott as projects were not completed by developers) has caused prospective new buyers to rethink.  As a result, Chinese July home sales fell a staggering 40% (year on year) as new buyers no longer trust the developers will finish projects.  Elsewhere, Speaker of the House Pelosi has left Sunday for her Asian trip with the itinerary, and the Speaker herself being silent on whether there will be a stop in Taiwan.  This comes as China decried a potential visit from what would be the highest-ranking US official to visit Taiwan since 1997. 

So far this morning, BLDR, J, GPN, AMG, CHKP, ARLP, and L have all reported beats on both the top and bottom lines.  Meanwhile, HSBC missed on revenue while beating on earnings.  On the other side, CNA and JELD both beat on revenue while missing on earnings.  So far there have been no reports today that missed on both revenue and earnings.

Overnight, Asian markets leaned heavily to the green side on Monday.  Shenzhen (+1.20%), Thailand (+1.07%), and India (+1.06%) led the gainers.  Only Taiwan (-0.12%) showed any red on the day.  In Europe, stocks are leaning to the upside, but show more red than in Asia at mid-day.  The FTSE (+0.51%), DAX (+0.40%), and CAC (+0.46%) are leading the region higher while 5 exchanges head South, led by Russia (-0.67%) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.02% open, the SPY is implying a -0.15% open, and the QQQ implies a -0.11% open at this hour.  10-year bond yields are falling, now at 2.649%, and Oil (WTI) is down more than 1.6% to $97.01/barrel in early trading.

The major economic news events scheduled for Monday are limited to Mfg. PMI (9:45 am) and ISM Mfg. PMI (10 am).  The major earnings reports scheduled for the day include AJRD, AMG, ARLP, BLDR, CHKP, CAN, GPN, HSBC, J, JELD, K, and ON before the open.  Then, after the close, ATVI, AFL, AMRC, ANET, CAR, CF, CVI, DVA, DVN, FANG, EHC, ENSG, NSP, KMPR, KMT, LEG, MATX, MOS, PINS, RRX, SANM, SBAC, SPG, STRL, TWI, RIG, TA, UNVR, WMB, and WWD report.

More than 20% of the S&P 500 report earnings this week.  However, in economic news later this week, on Tuesday we get June JOLTS, API Weekly Crude Oil Stocks, and Fed voter Bullard speaks.  Then on Wednesday the July Services PMI, June Factory Orders, July ISM Non-Mfg. PMI, and Crude Oil Inventories are announced.  On Thursday we get Import/Exports, Weekly Initial Jobless Claims, June Trade Balance, and Fed voter Mester speaks.  Finally, on Friday we get July Avg. Hourly Earnings, July Nonfarm Payrolls, July Participation Rate, and July Unemployment Rate.

As markets come off a very strong July, the dual fears of inflation and recession remain. However, for the most part, earnings reports continue to be strong…although many commpanies are issuing warnings and guiding lower. In short, we remain in a volatile market where major intraday reversals or many smaller whipsaws remain the norm. The trend remains bullish, but there is a lot of technical damage (resistance) to work through from the months of pullback. The one thing that continues to ring true is that volume shows that retail traders (and the big money) remain afraid to jump into this market yet. So, be cautious in believing that the recent trend truly shows market conviction.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: BA, NIO, AMD, TSLA, MU, SQM, WMT, NVDA, MRVL, CVX, KMI. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Despite the GDP showing a technical recession is underway, markets opened with very minimal gaps (in both directions, QQQ down and large-caps up) on Thursday.  All 3 major indices then sold off 1% or more over the first hour.  However, at 10:30 am, they all reversed and rallied strongly until noon, more than making up for the selloff.  After an hour of rest, the rally resumed, reaching the highs of the day late in the session and closing near the highs.  This is leaving us with large white candles with significant lower wicks (and small upper wicks) in all 3 major indices. 

All 10 sectors were green (with energy down only 0.05% with 30 minutes left in the day.  67% of stocks are now above their 40sma and 27% are above their 200sma. With that said, volume remains below average. We are also looking very overextended in all 3 major indices in relation to the T-line (8ema).  On the day, SPY gained 1.25%, DIA gained 1.00%, and QQQ gained 0.98%.  The VXX fell 2.3% to 20.82 and T2122 remains deep in the overbought territory at 96.31.  10-year bonds fell to 2.672% and Oil (WTI) was just on the downside of flat for the day at $97.18/barrel.

In economic news, regardless of what Fed Chair Powell, Treasury Sec. Yellen, and the White House said just the day before, GDP data Thursday morning showed we are, at least technically, in a recession.  The Q2 GDP came in at -0.9%, far below the consensus estimate of +0.5%.  However, that was slightly better than Q1’s -1.6% growth number.  In the same vein, Weekly Initial Jobless Claims came in slightly higher than expected at 256k (versus 253k forecast).  However, this too was better than the previous week’s 261k number.  So, the time series shows improvements, but we’re still worst off on both measures than we thought we should be.

SNAP Case Study | Actual Trade

In business news, Thursday was the US House’s turn to pass the “Chips and Science” bill (again in a bipartisan vote) and the “law to be” is now headed for President Biden’s signature. The bill provides $52 billion in subsidies along with another $24 billion in tax credits for semiconductor manufacturing in the US.  The House is expected to pass the revised bill later this week.  The bill disproportionately benefits INTC, TXN, and MU. (INTC alone is expected to get $30 billion in subsidies.)  However, chip designers like AMD, QCOM, and NVDA (regardless of the uproar over insider trading claiming they will benefit) are left out in the cold.  This is because the latter group does not make chips.  Instead, they contract out the production to TSM and to a lesser extent Global Foundries.

In energy news, as expected, we’ve seen record profits (if for some reason, not always revenue) across the major oil producers so far this quarter.  However, a dispute is now in place as the US has officially complained about Mexico’s energy policy of tightening control over its oil and electricity markets.  US energy companies see the actions to strengthen the Mexican state-run energy companies at the cost of private investors as a violation of the USMCA (formerly NAFTA) agreement.  (And the Biden Administration has taken up the cause on behalf of those companies.)  This may lead to a trade dispute, as Mexico is so far being defiant and asserting its national sovereignty.  Elsewhere, Europe is scrambling to cut natural gas use, get coal-fired power plants back online, and today France’s President met with Saudi Crown Prince MBS in another bid to get OPEC+ to increase production quotas at their meeting next week.  Examples of European gas-saving measures include the German city of Hanover switching off lighting at public fountains, the illuminations of buildings, cutting off hot water in public buildings, mandating 33% higher room temperatures (daycare excluded), and putting motion-detecting lighting in many public conveniences/buildings. 

After the close, AAPL, LHX, EIX, EMN, CE, KLAC, AJG, TFII, CC, CLR, TBBK, TXRH, ATR, BIO, SKYW, FSLR, DXCM, UTCC, DECK, AUY, MERC, MTD, MTX, INT, and SGEN all reported beats on both the revenue and earnings lines.  Meanwhile, HIG, MHK, OLN, EW, and BZH missed on revenue while beating on earnings.  On the other side, AMZN, X, VFC, ERIE, and ULCC beat on revenue while beating on earnings.  However, INTC, AVTR, DLR, and ROKU missed on both lines.

Overnight, Asian markets were mixed.  Hong Kong (-2.26%) was an outlier while Shenzhen (-1.30%), Shanghai (-0.89%), and Singapore (-0.28%) paced the losses.  Meanwhile, Thailand (+1.50%), New Zealand (+1.45%), and India (+1.35%) led the gainers.  In Europe, stocks are almost green across the board at mid-day.  Portugal (-0.51%) is the only red while the FTSE (+0.58%), DAX (+1.28%), and CAC (+1.42%) lead the region higher in early afternoon trading.  As od 7:30 am, US Futures are pointing toward a green, if divergent, start to the day.  The DIA implies a +0.21% open, the SPY is implying a +0.66% open, and the QQQ implies a +1.02% open at this hour.  10-year bond yields are back up to 2.701% and Oil (WTI) is back up to $98.60/barrel in early trading.

The major economic news events scheduled for Friday include June PCE Price Index, Q2 Employment Cost Index, and June Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am).  The major earnings reports scheduled for the day include ABBV, AB, AON, ARCB, AZN, BLMN, BAH, CRI, CBOE, CHTR, CVX, CHD, CNHI, CL, ENB, XOM, IMO, ITCB, LYB, MGA, NWL, NMRK, NVT, PSX, PG, GWW, and WY before the open.  There are no major earnings scheduled for after the close.

So far this morning, CVX, BNPQY, CHTR, LYB, SMFG, AZN, TAK, MFG, CL, AFLYY, WY, BAH, CHT, BLMN, AB, ARCB, and NVT all reported beats on both the top and bottom lines.  Meanwhile, XOM, PSX, KMTUY, AON, NWL, and CHD all missed on revenue while beating on earnings.  On the other side, PG, MGA, FMS, and ES all beat on revenue while missing on earnings.  So far this morning, there are no reports that missed on both revenue and earnings.

What is turning out to be another strong quarter of earnings (despite the lowering of forward guidance) has lifted market spirits. Today, it will be AMZN, AAPL (both from last night), CVX, and XOM that lead markets higher early. There is more economic data, but of late, Mr. Market doesn’t seem to care about economic data. With that said, expect more volatility as intraday reversals are the norm in recent weeks. We do have an uptrend in progress in all 3 major indices, but resistance is not too far overhead and we have a weekend news cycle starting after the close. Both of those urge caution on the Friday trader’s part. The only thing we know for sure is that low volumes for weeks indicate that the big money and John Q Public are not ready to believe the bottom is in just yet.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: CLOV, VLO, V, GD, AAPL, NVDA, GE, NFLX, PYPL, CSCO, WMT, CLF. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks all gapped higher, but diverged in doing so yesterday with the traders seeming to bet that the Fed announcement would be positive for the market.  The DIA gapped up four-tenths of a percent, the SPY gapped up nine-tenths of a percent, and the QQQ gapped up 1.6% higher.  After a little follow-through, the first 30 minutes all 3 major indices traded flat (even through the Fed rate announcement) until after Fed Chair Presser started.  However, the move at 2:40 pm was meteoric to the upside.  We then saw the rally continue more-or-less into the close.  This left us with a Bull Kicker in the QQQ and SPY, and just a gap-up strong white candle in the DIA. 

Almost 62% of stocks are now above their 40sma and 23.54% of them are above their 200sma.  So, all 3 major indices are also back above their T-lines (8 ema). The volume on the day was better than Tuesday, but still well below an average that continues to decline.  All 10 sectors were green, with Technology far and away the big winner, up 4.37%.  On the day, SPY gained 2.60%, DIA gained 1.41%, and QQQ gained 4.23%.  The VXX fell 1.7% to 21.31 and T2122 climbed high into the overbought territory at 97.16.  10-year bond yields fell to 2.776% and Oil (WTI) spiked 3.3% to $98.12 (apparently on answers from Chair Powell that we are not in a recession).

As expected, the Fed (in a unanimous vote) raised rates 0.75%, which takes the rate to 2.25-2.50% on Wednesday.  The hike itself was fully priced-in and markets had very little reaction on the hike news alone.  However, Fed Chair Powell’s press conference set off a massive afternoon rally.  In his presser, Powell said he did not think the US was in a recession yet (we’ll find out later this morning). He also said it would be appropriate at some point for the Fed to slow increases and assess how the overall policy was impacting both inflation and the economy.  This left open the possibility for a lesser increase in Sept. which is what I think may have led to the presser-timed rally.  He went on to point out the job growth remains robust and unemployment remains low.

SNAP Case Study | Actual Trade

In business news, the US Senate passed the “Chips and Science” bill in a bipartisan vote.  This bill provides $52 billion in subsidies along with another $24 billion in tax credits for semiconductor manufacturing in the US.  The House is expected to pass the revised bill later this week.  The bill disproportionately benefits INTC, TXN, and MU. (INTC alone is expected to get $30 billion in subsidies.)  However, chip designers like AMD, QCOM, and NVDA (regardless of the uproar over insider trading claiming they will benefit) are left out in the cold.  This is because the latter group does not make chips.  Instead, they contract out the production to TSM and to a lesser extent Global Foundries.

In stock news, after the close, SAVE canceled its negotiations with potential buyer ULCC after months of negotiations.  SAVE’s talks with JBLU (another potential buyer) continue.  (Then overnight JBLU agreed to buy SAVE for $3.8 billion.) However, any potential purchase may face monopoly scrutiny related to the Northeast corridor routes.  Elsewhere, BBY lowered its forward guidance and is now expecting a drop of 13% in sales in Q3 and an 11% drop for the year.  CS also announced they have replaced their CEO.

After the close, F, QCOM, MOH, CHRW, MUSA, LRCX, URI, FBHS, NCR, NOV, MTH, CSL, HOLX, GFL, CCS, ASGN, PLXS, MKSI, FIX, MYRG, CMPR, ACHC, AVB, QGEN, ETSY, GGG, TDOC, INVH, SLM, SNBR, MAA, FRWD, TYL, VICI, HP, and EQT all reported beats on both the top and bottom lines.  Meanwhile, FLEX, WFG, RJF, FTI, OMF, KGC, and OII all beat on revenue while missing on earnings.  On the other side, CTSH, RE, ACGL, EQIX, NOW, AWK, AEM, TROX, FLS, ICLR, ESI, COLM, AMED, CHE, and CHDN all missed on revenue while beating on earnings.  However, META, ORLY, CYH, CINF, SSNC, MEOH, ALGN, LUNMF, CAKE, AR, JBT, and PTC all missed on both the revenue and earnings lines.

Overnight, Asian markets were almost green across the board.  Only Hong Kong (-0.23%) and Taiwan (-0.20%) showed any red.  Meanwhile, New Zealand (+1.74%), India (+1.73%), and Thailand (+1.50%) led the region higher.  In Europe, stocks are showing a similar pattern at mid-day.  It is the biggest exchanges that lag the rally with the FTSE (-0.15%), DAX (+0.01%), and CAC (+0.13%) following the rest of the continent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly down start to the day.  The DIA implies a -0.14% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.56% open at this hour.  10-year bond yields are up slightly to 2.785% and Oil (WTI) is up more than 2% to $99.24/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Q2 GDP and Weekly Initial jobless Claims (both at 8:30 am).  Treasury Sec. Yellen also speaks at 8:30 am.  The major earnings reports scheduled for the day include AOS, AGCO, ALLE, MO, AMT, BUD, HOUS, MT, ARCH, ARES, ABG, BAX, BFH, BC, CP, CRS, CARR, CVE, CMS, CNX, CMCSA, DTE, EXP, EME, EEFT, FAF, FCNCA, FCFS, FMX, FTS, FTV, BEN, FCN, GTX, GOL, GVA, HOG, HSY, HTZ, HON, IP, JHG, KDP, KEX, LH, LAZ, LII, LECO, LIN, LKQ, MDC, MMP, HZO, MLM, MAS, MA, MRK, NOC, ORI, OSK, OSTK, PATK, PBF, BTU, PFE, PCG, BPOP, POR, RS, RCL, SNY, SNDR, SHEL, SIRI, SAH, SO, LUV, SWK, STM, TROW, TRP, TFX, TXT, TMO, TKR, TNL, VLO, VSTO, VC, WST, WEX, WTW, and XEL before the open.  Then after the close, AMZN, AAPL, ATR, AJG, AVTR, BZH, BIO, CE, CC, CLR, DECK, DXCM, DLR, EMN, EIX, EW, ERIE, FSLR, HIG, INTC, KLAC, LHX, LBTYA, MTD, MTX, MHK, OLN, ROKU, SKYW, TXRH, TFII, UCTT, X, VALE, VFC, INT, and AUY report.

So far this morning, CMCSA, VLO, PFE, MRK, SNY, TMO, HON, CVE, LIN, MO, PBF, IP, CARR, SO, ASX, LUV, LH, RS, TXT, KDP, XEL, STM, ABG, AMT, HSY, BC, MDC, ARES, TKR, AOS, VSTO, ALLE, WST, EEFT, VC, KEX, VIRT, POR, EXP, WEX, VLY, TRTN, HEES, KIM, CBZ, and STNG all beat on both the top and bottom lines.  At the same time, MT, BUD, NOC, LKQ, FAF, HOG, LAZ, TNL, TFX, HZO, FCFS, SHEL, and WTW all missed on revenue while beating on earnings.  On the other side, DTE, SIRI, FTS, and ARCH beat on revenue while missing on earnings.  However, SWK, SAH, DTE, BAX, MAS, OSK, TROW, GVA, GTX, OSTK, and JHG all missed on both the top and bottom lines.

In economic news coming later this week, Friday we get the June PCE Price Index, Q2 Employment Cost Index, June Personal Spending, Chicago PMI, and Michigan Consumer Sentiment.

As usual on Fed rate hikes, the market seems to have rethought the late afternoon rally from yesterday and is looking to open tepidly bearish…pending the GDP news, of course. Truthfully, the GDP print (and whether we are actually already in a recession) will drive trading today…especially if it says we are. Also, don’t discount the talking heads rehashing and reparsing every word Powell said yesterday. That may cause fluctuations across the market as every Tom, Dick, and Harry tells us what Powell “was really saying or implying.” Beyond that, we now have higher lows and higher highs in all 3 major indices, which is the very definition of an uptrend. However, don’t be surprised if/when we see more intraday whipsaw action.

Remember that trading is our job. So, 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. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: ENVX, DOV, MRO, GE, F, BEAM, TXN, NFLX, NOK, PYPL. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

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

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