Jobless Claims data helped the Bulls who were in-charge Thursday.  SPY gapped up 1.03%, DIA gapped up 0.45%, and QQQ gapped up 1.43%. From there, DIA continued higher immediately and strongly for an hour.  Meanwhile SPY and QQQ pulled back for 20 minutes before the Bulls followed the DIA in a strong rally, which lasted until 10:50 a.m.  At that point, all three major index ETFs ground sideways until 1 p.m. Then the entire market rallied again to new highs of the day at 2:25 p.m.  From there, we saw a 75-minute, moderate pullback followed by a 20-minute bounce at the end of the day to take all three major index ETFs out near the highs of the day. This action gave us large white-bodied candles in all three.  All three had small upper wicks, with DIA having very little lower wick, SPY having a modest lower wick, and QQQ having a large lower wick.  All three retested their T-line (8ema) from below and closed just below that level.  This happened on average volume in SPY and QQQ as well as less-than-average volume on the DIA.

On the day, all 10 sectors were green with Technology (+3.60%) way out front leading the others higher.  Meanwhile, Utilities (+0.70%) and Consumer Defensive (+0.77%) lagging well behind the others.  At the same time, SPY gained 2.31%, DIA gained 1.75%, and QQQ gained 3.06%. VXX plummeted 7.96% to close at 63.47 while T2122 climbed back out of its oversold area to 42.22.  On the bond front, 10-year bond yields jumped up to 3.989% and Oil (WTI) popped another 1.10% to close at $76.06 per barrel.  So, Thursday was bullish revenge day where NVDA (+6.13%) led the charge of the 10 big dogs leading the rest of the market higher.  In fact, it was the best day for SPY since 2022.

The major economic news scheduled for Thursday was limited to the Weekly Initial Jobless Claims, which showed a bit less than expected filings at 233k (compared to a forecast of 241k and the prior week’s 250k).  At the same time, Weekly Continuing Jobless Claims were higher than predicted at 1,875k (versus a 1,870k forecast and the previous week’s reading of 1,869k).  Together, this Jobless Claims data calmed market fears about recession, causing a premarket surge.  Later, after the close, the Fed Balance Sheet was down by $3 billion, from $7.178 trillion to $7.175 trillion.

In Fed speak news, on Thursday, Richmond Fed President Barkin played down the idea of a need for urgent (especially inter-meeting) rate cuts.  He said the FOMC has time to determine where the economy is, saying “I think you’ve got some time in a healthy economy to figure out whether this is an economy gently moving into a normalizing state … it this one where you really do have to lean into it (meaning cuts).” Speaking about the labor market, he said “What I hear from folks on the ground in the labor market is that people are cutting back on hiring, but not firing.”   In relation to inflation, he said, “I’m actually pretty optimistic that over the next few months we’re going to see good readings on the inflation side.”  Later, Chicago Fed President Goolsbee reiterated his earlier statements that the Fed’s job is not to respond to the stock market or political considerations.  He said, “The Fed’s out of the election business. The Fed is in the economic business.” He went on to say, “We’re not in the business of responding to the stock market. We’re in the business of maximizing employment and stabilizing prices.”

After the close, AKAM, AMN, CCU, DTEGY, DBX, DXC, EDN, EVH, EXPE, G, GILD, NWSA, NWS, PBI, REZI, RXT, SOLV, and TTD all reported beats on both the revenue and earnings lines.  Meanwhile, ATSG, IAG, PARAA, PBA, and PARA missed on revenue while beating on earnings.  On the other side, CPRI, CENX, PODD, PAAS, and TTWO beat on revenue while missing on earnings.  However, NGL, SSP, and TTEC missed on both the top and bottom lines.

In stock news, on Thursday, Reuters reported that DAL, UAL, RYAAY, and ESYJY among other airlines have suspended flights to various parts of the Middle East due to rising tensions between Israel, Hamas, Hezbollah, Yemeni Houthis, and Iran.  Later, GM made an odd announcement, saying it is committed to building a profitable operation in China.  The GM CFO said he did not “necessarily accept” the idea that GM is struggling to make money in China, despite the company reporting a $104 million loss in the country in Q2.  At the same time, Reuters reported that AMZN CEO Jassy is happy with the progress of the company’s “Prime Video” and is planning a significant expansion.  (AMZN increased its investment into Prime Video from $1.7 billion to $13.6 billion for 2024.)   Later, TMICY (Trend Micro) is exploring a sale after getting buyout interest in the last few weeks.  After the close, as part of its earnings announcement, PARA said it would be cutting 15% of its workforce.  (The stock was up on the earnings and job cut announcement.) 

In stock legal and governmental news, on Thursday, NTSB Chair Homendy said the agency would like to complete its probe of the BA 737 MAX 9 mid-air door blow-out early in 2025.  She told Reuters that 12-14 months from the time of the January 5 incident would be the target, adding that a survey of BA’s workers in Renton WA will begin soon.  Later, the NHTSA announced that BMWYY (BMW) will recall just under 106k crossover and sedan cars to fix a starter motor overheating issue via a software update.  At the same time, the Fed announced it had imposed an enforcement action on CUBI for “significant deficiencies” related to its risk management and money-laundering practices.  Later, AAPL announce it has changed its EU app store policy and will now charge app developers a fee of 1% on apps, as well as reducing AAPL commissions on all digital goods and services sold through the AAPL’s EU App Store.  (This move came after an investigation and anti-trust finding against AAPL by the EU, but prior to announcement of final punishments.)

Overnight, Asian markets were mostly green to end the turbulent week.  Taiwan (+2.87%), Australia (+1.25%), South Korea (+1.24%), and Hong Kong (+1.17%) led the region higher.  In Europe, we nearly see green across the board at midday with only AEX (-0.10%) in the red.  Meanwhile, the CAC (+0.32%), DAX (+0.15%), and FTSE (+0.39%) lead 14 of the 15 bourses higher in early afternoon trade.  In the US, as of 7:45 a.m., Futures are pointing toward a modestly red start to the morning.  The DIA implies a -0.05% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-Year bond yields are down to 3.944% and Oil (WTI) is up two-thirds of a percent to $76.67 per barrel in early trading.

There is no major economic news scheduled for Friday.  The major earnings reports scheduled for before the open include AQN, AMCX, AXL, AMRX, CLMT, ROAD, ERJ, EVRG, and NFE.  Then, after the close, there are no major reports scheduled. 

So far this morning, AMRX, CLMT, ROAD, and SLVM have all reported beats on both the revenue and earnings lines.  Meanwhile, AMCX and ERVG beat on revenue while missing on earnings.  However, SATS and NFE missed on both the top and bottom lines.

In miscellaneous news, on Thursday, despite market rumors, the Russian natural gas deliveries to Europe through the pipeline from Russia continue according to both the Ukrainian and German Energy Ministers.  Ukrainian forces captured a transit/pumping station of the pipeline (located in Sudzha, Russia) during an offensive into Russia earlier this week.  (It is worth noting that 50% of all Russian natural gas exports to Europe flow through that station.)  Elsewhere, CBOE announced it is taking the term “derivatives” to a whole new level.  The exchange plans to launch options tied to the futures of the VIX, which itself is a based on the options that track the S&P 500.  (Take a minute and try to grasp that in full.  CBOE will sell options based on futures of an index that is based on options that are based on another index.)  This new vehicle is scheduled to begin trading on October 14, pending regulatory review.

With that background, it looks as if markets are somewhat calm again so far this morning . All three major index ETFs opened higher in the premarket, but then sold back into the red before recovering into the very modest green just now. The very short-term trend is now bullish while the mid-term trend is bearish. However, while the bullish trend line is broken, the longer-term charts remain bullish. (For example, look at a Monthly chart. There is no way to call SPY, DIA, or QQQ bearish based on those monthly charts.) In terms of extension, all three major index ETFs are now back to being close to their T-line (8ema). At the same time, the T2122 indicator is now back up out of its oversold area and into the mid-range. So, the market has some room to run if either side can find momentum. With regard to those 10 big dog tickers, they are evenly split between red and green. However, NVDA (+1.28%) leading the tech in terms of gain and is by far the largest dollar-volume trader The second-largest dollar volume trader is TSLA (+0.08%) which is also (barely) on the green side. Finally, remember its Friday. Monday morning’s gap should have been a warning that you need to prepare your account for weekend news cycles.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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