Earnings Reports Calling The Tune Today

Markets opened flat on Wednesday and then ground sideways in a tight range for the first hour of the day.  Then we saw a strong rally for a little over 30 minutes before resuming the sideways grind until about 12:45 pm.  At that point, we saw a sharp selloff that also lasted about 30 minutes before bobbing along sideways for the next 1.5 hours.  A slower rally took over at about 2:30 pm to take price back near the highs of the day only to fade the last 30 minutes.  This left us with white-bodied candles with plenty of wick on each end.  The DIA printed a Doji-type candle and the SPY a Spinning Top.

All 3 of the major indices have now broken through their 50sma and medium-term downtrend.  Exactly half of the 10 sectors are green and half are down.  With that said, Technology is by far the biggest mover, up nearly 2.5% on the day on big moves by NFLX, NVDA, AMD, META, and AMZN.  Once again, all of this happened on below-average volume.  On the day, SPY gained 0.65%, DIA gained 0.20%, and QQQ gained 1.59%. The VXX fell 1.28% to 21.57 and T2122 (the 4-week new High/Low ratio) is deep in the overbought territory at 96.60.  10-year bond yields climbed back above the key 3% level to 3.034% and Oil (WTI) fell just over 1.5% to $102.61/barrel. 

In business news, Reuters reported that SHEL is looking to sell two of its US Gulf of Mexico oil and gas projects (fields), hoping to raise $1.5 billion.  Then after the close, as part of its quarterly report, TSLA announced it sold 75% of its Bitcoin to raise $936 million in cash. Also after the close, F announced it will cut as many as 8,000 jobs in order to raise money for its electric vehicle investments.  Then this morning F reassured markets that it already has secured 100% of the batteries it needs for its 2022 and 2023 plans.

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On the Russian invasion story, natural gas flows resumed from Russia via the Nord Stream 1 pipeline.  However, the flow resumed only at the reduced (60% of capacity) rate that Russia initiated in retaliation for sanctions.  On the ground, Russian forces are getting closer to Ukraine’s second largest power plant (after having previously taken the largest).  Elsewhere, US and European sources claim that Russia is taking the steps needed for their country to annex Eastern and Southern Ukraine by September.  This news comes the same day that Deputy Chair of the Russian Security Council said that Ukraine could disappear from the map as a result of current events.

After the close, STLD, KMI, CSX, CCK, AA, CCI, KNX, and VMI all reported beats on both the top and bottom lines.  Meanwhile, TSLA and EFX missed on revenue while beating on earnings.  On the other side, UAL, LVS, and WTFC beat on revenue while missing on earnings.  However, LSTR and SEIC reported misses on both the top and bottom lines.

So far this morning, T, PM, DOW, TRV, DHR, NOK, MMC, TSCO, IQV, DGX, IPG, KEY, ALK, SON, HBAN, SNA, and SNV have all reported beats on both the revenue and earnings lines.  Meanwhile, SAP, AAL, FITB, DPZ, and HRI all reported beating on revenue while missing on earnings.  On the other side, DHI, AN, BX, DOV, POOL, and TPH all missed on revenue while beating on earnings.  However, ABB missed on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned to the upside.  Hong Kong (-1.51%), Shanghai (-0.99%), and Shenzhen (-0.94%) paced the losses as Real Estate market problems remained top of mind in China.  Meanwhile, Taiwan (+1.39%), South Korea (+0.93%), and Malaysia (+0.93%) led the gainers in the region.  In Europe, we see a similar story taking shape at mid-day.  The FTSE (-0.47%), DAX (-0.45%), and CAC (+0.32%) are typical of the performance spread in the region.  However, Russia (-1.03%) and a couple of other smaller exchanges are down more than a percent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a mixed and mostly flat start to the day.  The DIA implies a -0.19% open, the SPY is implying a -0.13% open, and the QQQ implies a +0.03% open at this hour.  10-year bond yields are up to 3.051% and Oil (WTI) remains extremely volatile, down 4.5% to $95.42/barrel in early trading.

The major economic news events scheduled for Thursday is limited to Philly Fed Mfg. Index and Weekly Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for the day include AIR, ABB, ALK, AAL, T, AN, BX, DHI, DHR, DPZ, DOV, DOW, FITB, FCX, HRI, HBAN, IPG, IQV, KEY, MMC, NOK, NUE, PM, POOL, DGX, SAP, SNA, SON, SNV, TSCO, TRV, TPH, UNP, and WBS before the opening bell.  Then after the close, SAM, COF, ISRG, MAT, PPG, RHI, STX, SNAP, SIVB, THC, UFPI, VLRS, WRB, and WAL report. 

In economic news coming later this week, on Friday Mfg. PMI and Services PMI are released.

In earnings reports later this week, on Friday we hear from AXP, ALV, CLF, GNTX, HCA, NEE, NHYDY, RF, ROP, SLB, and VZ.

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Earnings remain the main focus for traders today. However, the Jobless Claims and to a lesser extent Philly Fed number coming at 8:30 may also drive markets. As of now, we look to open flat to modestly bearish. Still, there were a lot of strong earnings reports last night and so far this morning and the big tech names look to be trying to pull the rest of the market higher with them. So, don’t be surprised if the bulls find some energy…at least early. The QQQ shows a bullish trend, but the SPY and DIA are still just shy of getting that designation. With a gap to fill above in the large-cap indices, just keep in mind that the path of least resistance in the short term is upward.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. 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. 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.


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

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🎯 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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