Monday saw the market open higher.  SPY gaps up 0.28%, DIA gapped up 0.40%, and QQQ gapped up 0.24%.  From there, SPY meandered sideways in the gap the rest of the day. Meanwhile, after the open, DIA continued to rally for 30 minutes before trading sideways with a slight bearish trend and ending the day about half way back to its opening level. As for QQQ, after the open gap up, it immediately sold off for 30 minutes recrossing the opening gap in the first 15 minutes before meandering sideways below Friday’s close the rest of the day.  This action gave us, gap-up black-bodied Hanging Man candles in both the SPY and QQQ.  (Both printed new all-time highs and SPY did manage to print a new all-time high close.)  At the same time, DIA gave us a gap-up, Shooting Star or Inverted Hammer type of candle that printed another all-time high and all-time high close.  This happened on above-average volume in DIA as well as below-average volume in SPY and QQQ.

On the day, eight of the 10 sectors were green with Financial Services (+1.72%) way out in front leading the gainers higher.  On the other side, Basic Materials (-0.95%) was again by far the biggest loser. At the same time, SPY gained 0.10%, DIA gained 0.66%, and QQQ lost 0.06%.  VXX fell slightly to close at 44.65 and T2122 rose back into the bottom of its overbought territory, closing at 83.16.  Meanwhile, 10-Year bond yields rose slightly to 4.306% while Oil (WTI) dropped another 3.13% to close at $68.18 per barrel. So, Monday saw a divergent, if mostly sideways day among the three major index ETFs.  It certainly felt a little toppy in nature.

There was no major economic news scheduled for Monday.  

After the close, GRAB reported beats on both the revenue and earnings lines.  At the same time, IAC beat on revenue while missing (massively) on earnings.  On the other side, LYV missed on revenue while beating on earnings.

Overnight, Asian markets were red across the board.  Hong Kong (-2.84%), Taiwan (-2.33%), and Shanghai (-1.39%) paced the losses.  In Europe, we see the same picture taking shape with region-wide losses at midday.  The CAC (-1.31%), DAX (-0.93%), and FTSE (-0.98%) are leading the region lower in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a modestly red start to the day.  DIA implies a -0.10% open, the SPY is implying a -0.11% open, and QQQ implies a -0.07% open at this hour.  At the same time, 10-Year bond yields are up to 4.361% and Oil (WTI) is up a quarter of a percent to $68.21 per barrel in early trading.

There is major economic news scheduled for Tuesday is limited to NY Fed 1-Year Consumer Inflation Expectations (11 a.m.).  We also hear from Fed members Waller (10 a.m.), Kashkari (2 p.m.), and Harker (5 p.m.).  Major earnings reports scheduled for before the open include ALIT, AZN, SID, SATS, HTZ, HD, IGT, MOS, ONON, PTVE, SE, SHOP, SGRY, TME, THS, and TSN.  Then, after the close, AE, DOX, AHR, ARMN, CAE, PLUS, FIHL, FLUT, ICUI, CART, LNW, NATL, NGL, OXY, RXT, RKT, SWKS, SPOT, STNE, SU, and MODG report.

In economic news later this week, on Wednesday, we get October Core CPI, October CPI, EIS Short-Term Energy Outlook, October Federal Budget Balance, and API Weekly Crude Oil Stocks. We also hear from Fed Member Williams.  On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, October Core PPI, October PPI, EIA Weekly Crude Oil Inventories, and Fed’s Balance Sheet.  We also heat from Fed Chair Powell and Fed member Williams.  Finally, on Friday, October Core Retail Sales, October Retail Sales, October Export Price Index, October Import Price Index, Ny Empire State Mfg. Index, October Industrial Production, September Business Inventories, September Retail Inventories are reported.

In terms of earnings reports later this week, on Wednesday, ARCO, BKKT, DOLE, GFF, KMDA, AGRO, BZH, BRFS, BV, CSCO, DADA, EC, HP, HI, NU, SARO, and TTEK report.  On Thursday, we hear from AAP, AZUL, BILI, EFXT, JD, NTES, NICE, NOMD, SBH, TLN, DIS, ZK, AMAT, GLOB, and POST. Finally, on Friday BABA and SPB report.

So far this morning, AZN, HD, and SLVM reported beats on both the revenue and earnings lines.  Meanwhile, THS missed on revenue while beating on earnings. On the other side, ONON, SE, and TME beat on revenue while missing on earnings. However, IGT and PTVE missed on both the top and bottom lines.

With that background markets seem tepid at these heights.  All three major index ETFs opened the premarket modestly lower and have given us indecisive Doji-like candles since that start.  However, the short, mid-term, and long-term trend remain very bullish. In terms of overextension, all three are stretched above their T-line (8ema) and the T2122 indicator is now in (the lower end of) its overbought territory.  So, while there may be a bit more room to run, the market is in need of a pause or pullback for the health of the rally.  With that said, we have to remember that markets can stay over-baked longer that any of us can remain solvent betting on a reversal.  In terms of the 10 Big Dogs, seven of the 10 are in the red this morning.  INTC (-1.44%) leads the losses while NVDA (+0.41%) paces the gains.  Once again, TSLA (-1.08%) is far-and-away the dollar-volume leader, having traded a very heavy $3.4 billion so far this morning…nine times as much as NVDA, which itself has traded 10 times as much as the third-place stock.  (This is definitely a Trump win phenomenon.)

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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