Markets were indecisively bullish on Monday.  The SPY gapped up 0.56%, DIA gapped up 0.50%, and QQQ gapped up 0.68%.   At that point, all three major index ETFs faded the gap, reaching the lows of the day at 11:20 a.m.  From there, all three rallied strongly and steadily to the highs at 2:30 p.m.  However, the SPY, DIA, and QQQ then all sold off the last 90 minutes of the day.  This whipsaw action gave us gap-up, white-bodied, Spinning Top candles in all three.  SPY and QQQ printed Bullish Harami Cross candles while DIA printed a Spinning Top that gapped up through, retested and stayed above its T-line (8ema).  This all happened on below average volume in all three major index ETFs.

On the day, nine of the 10 sectors were in the green with Financial Services (1.35%) and Technology (+1.21%) out in front leading the market higher while Basic Materials (-0.13%) was by far the worst performing sector. At the same time, SPY gained 0.92%, DIA gained 0.68%, and QQQ gained 1.01%.  VXX plummeted 7.70% to close at 14.27 and T2122 jumped back up to the center of its mid-range at 53.77. 10-year bond yields fell to 4.611% and Oil (WTI) was just on the red side of flat at $83.02 per barrel.  So, Monday was a bullish, but indecisive and very volatile day.  We saw a gap higher two different down waves of more than half a percent and a 1.4% up wave in the middle.  Not a market for the faint-hearted

There was no major economic news scheduled for Monday.

After the close, AGNC, AMP, BRO, CADE, CR, and PKG reported beats on both the revenue and earnings lines.  Meanwhile, ARE, CDNS, HXL, and MEDP missed on revenue while beating on earnings.  On the other side, SAP and SSD beat on revenue while missing on earnings.  Unfortunately, CLF, GL, LU, and NUE missed on both the top and bottom lines.  It is worth noting, MEDP raised their guidance.  However, NUE and PKG both lowered forward guidance.

In stock news, on Monday, auto supplier ADNT announced its restructuring its Europe business unit and will lay off an unspecified number of workers.  (42% of ADNT’s 70k workers are located in Europe.)  At the same time, UAE-based G42 (an AI firm) said it had agreed to a partnership with QCOM related to QCOM’s cloud AI products.  Later, CAH announced that it had lost contracts from UNH (one of CAH’s largest customers, contributing 16% of revenue in 2023) as the deal will not be renewed at the end of June.  (Industry analysts expect MCK to gain the contracts.)  At the same time, the New York Times reported AAPL is very close to finalizing a worldwide TV rights deal for FIFA’s month-long club tournament.  Later, Reuters reported that an internal memo from BA said the company expects a slower increase in the production and delivery rates for 787 jets.  The memo cited parts shortages from “a few key suppliers.”

In stock legal and governmental news, on Monday EXPR filed bankruptcy (Chapter 11) protection and said it will close more than 100 stores.  Later, the US Supreme Court rejected an appeal from VNDA, which had hoped to revive patents that had been declared invalid by a lower court in the company’s legal dispute with TEVA.  At the same time, the FAA announced it is finalizing rules to require commuter, charter, tour, and aircraft manufacturers to implement a set of safety policies and procedures (akin to a quality management system).  Up to this point, those types of commercial aircraft operators were not required to do so the way major airlines were.  Later, the FTC said it would be filing suit to clock the TPR $8.5 billion acquisition of CPRI.  The agency said the merging of ownership of the two company’s various luxury brands would reduce competition significantly in that industry.  At the same time, KR and ACI said they would be selling off 166 more grocery stores than previously announced as the companies work to get regulatory approval for the $15 billion “merger.” 

Overnight, Asian markets were mixed but leaned toward the green side again.  Hong Kong (+1.92%), Singapore (+1.47%), and Taiwan (+0.97%) led the region higher.  In Europe, with the sole exception of Russia (-0.40%) we see green across the board at midday.  The DAX (+1.12%), CAC (+0.67%), and FTSE (+0.43%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward another green start to the day.  The DIA implies a +0.22% open, the SPY is implying a +0.29% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bond yields are up to 4.637% and Oil (WTI) is down 0.53% to $81.47 per barrel in early trading.

The major economic news scheduled for Tuesday includes Building Permits (8 a.m.), S&P Global Mfg. PMI, S&P Global Services PMI, and S&P Global Composite PMI (all at 9:45 a.m.), March New Home Sales (10 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include DHR, FI, FCX, GE, GM, HAL, HRI, IVZ, JBLU, KMB, LKQ, LMT, MSCI, NEE, NVS, OPCH, PNR, PEP, PII, BPOP, PHM, DGX, RTX, R, SHW, SPOT, UPS, WRB, WBS, and XRX. Then, after the close AGR, BKR, CNI, CB, CSGP, EWBC, ENVA, EQT, EQR, HA, IEX, MTDR, MAT, RRC, STX, STLD, LRN, TSLA, TXN, VLTO, V, WFRD, and WFG report. 

In economic news later this week, Wednesday, March Core Durable Goods, March Durable Goods, and EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q1 GDP, Q1 GDP Price Index, March Goods Trade Balance, March Retail Inventories, March Pending Home Sales, and the Fed Balance Sheet.  Finally, on Friday, March Core PCE Price Index, March PCE Price Index, March Personal Spending, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Wednesday APH, T, AVY, BIIB, BA, BSX, BG, CME, KOF, CSTM, ETR, FTV, GD, GPI, HAS, HLT, HUM, IPG, LII, LAD, MHO, MAS, COOP, EDU, NSC, ODFL, OTIS, OC, PRG, RCI, SABR, SYF, TEL, TDY, TMO, TNL, UMC, VRT, WAB, WSO, AGI, ALGN, AR, BMRN, CACI, CP, CLS, CCS, CHX, CHE, CMG, CHDN, CYH, EHC, F, GGG, ICLR, IBM, KALU, KNX, LRCX, LSTR, MTH, META, MEOH, MOH, NBR, ORLY, OII, PLXS, RJF, ROL, DEIC, NOW, TER, TX, TYL, URI, UHS, VALE, WCN, WU, WHR, and WM report.  On Thursday, we hear from AOS, ADT, ALFVY, ALLE, MO, AAL, HOUS, AIT, ARCH, AMBP, ABG, AZN, BFH, BMY, BC, CARR, CAT, CBZ, CX, CHKP, CMS, CMCSA, CFR, DAR, DOV, DOW, DTE, EQNR, FCNCA, FCFS, FCN, GTX, GEV, HOG, HP, HTZ, HES, HON, IP, KDP, KEX, LH, LAZ, LECO, HZO, MRK, NDAQ, NEM, NOC, ORI, OSK, PCG, PHIN, POOL, RS, RCL, SPGI, SNY, SAH, LUV, SRCL, STM, FTI, TECK, TXT, TSCO, TRU, TPH, UNP, VLO, VC, GWW, WST, WEX, WTW, XEL, AEM, AB, ALSN, GOOGL, ATR, AJG, TEAM, AVB, BYD, COF, CSL, CINF, COLM, DXCM, EMN, EW, EGO, ERIE, FE, GILD, GOOG, TV, HIG, HUBG, INTC, JNPR, KLAC, LHX, MSFT, MTX, MHK, NOV, DOC, PFG, RMD, RHI, ROKU, SKX, SKYW, SNAP, SSNC, TMUS, TDOC, TS, TEX, TFII, TBBB, TPC, WDC, WY, and WKC.  Finally, on Friday, ABBV, AON, ALV, AN, AVTR, BALL, CNC, CHTR, CVX, CL, XOM, FMX, GNTX, HCA, IMO, LYB, NWL, PSX, POR, ROP, SAIA, and TROW report.

So far this morning, DHR, FI, GE, GM, HAL, KMB, LMT, NEE, NVS, OPCH, PNR, PEP, PHM, DGX, RTX, R, and SPOT have all posted beats on both the revenue and earnings lines.  Meanwhile, BANC, HRI, IVZ, NJDCY, and WBS all reported beat on revenue while missing on earnings.  On the other side, JBLU, MSCI, PM, PII, and UPS all missed on revenue while beating on earnings.  Unfortunately, LKQ, SHW, and XRX missed on both the top and bottom lines.  It is worth noting that JBLU has lowered its forward guidance. However, GM has raised guidance after a blowout quarter.

In miscellaneous news, on Monday, the Communist Party Central Economic Planner said the global EV price war will continue the rest of 2024.  The economist said he expects 2.1 million EVs to be sold this year.  However, the three main Chinese EV brands plan to produce 2.3 million themselves.  This does not count TSLA or any other non-Chinese manufacturers.  Later, the Equipment Leasing and Finance Assn. (ELFA) said that US companies borrowed 7% less in March 2024 than they had one year prior.  However, March was also up 18% over February of this year.

With that background, it looks as if the bulls are making another indecisive move higher in the premarket. All three major index ETFs gapped higher to start the early session. However, since that point, all three have also given us more wick than (still white) body in the premarket. DIA remains back above its T-line (8ema). However, the SPY and QQQ remain below their T-line. So the short-term trend remains bearish to mixed. Meanwhile, the mid-term has also turned bearish and the longer-term market remains Bullish but trend is broken and is clearly under pressure. In terms of extension, none of the major index ETFs is too far extended from their T-line and the T2122 indicator is now back in its mid-range. So, both sides have plenty of room to run if they can gain the momentum to do so. In terms of those 10 big dog tickers, eight of the 10 are in the green with only AAPL and INTC barely in the red this morning. With that all said, be careful. This week is packed with economic data (PCE) and a ton of earnings. Plus we’ve see a lot of those widowmaker whipsaws lately.

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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