Markets opened up mixed to get us started on Thursday.  SPY gapped up 0.23%, DIA opened 0.01% lower, and QQQ gapped up 0.47%.  From there, all three major index ETFs sold off for 30 minutes and then meandered sideways in waves until 1 p.m.  At that point, SPY and QQQ diverged from DIA.  SPY and QQQ made another leg lower for an hour, then rallied for an hour to get back to where they were at 1pm before selling off again the last hour.  For its part, DIA just kept meandering sideways all day.  This action gave us a Bearish Engulfing candle in the QQQ that gapped above and then failed its downtrend line, closing just above its T-line (8ema).  The SPY gave us a Dark Cloud Cover that also gapped above and then failed its downtrend line, but remains above its T-line.  Meanwhile, DIA printed a black-bodied Spinning Top Doji type candle.

On the day, eight of the 10 of the sectors were in the green with Utilities (+2.05%) way out in front leading the way higher.  On the other side, Technology (-0.24%) and Consumer Cyclical (-0.23%) were the only sectors in the red and the laggards. At the same time, SPY fell 0.19%, DIA lost 0.26%, and QQQ dropped 0.70%.  Meanwhile, VXX was just on the green side of flat at +0.16% to close at 43.62 while T2122 rose another 1.80%, closing at 87.56.  On the bond side, 10-Year Bond yields dropped again to 4.615% and Oil (WTI) fell 1.69% to $78.69 per barrel.  So, Thursday was an indecisive day that might have been signaling reversal of Wednesday’s pop.  (Just remember that every candle signal needs confirmation.)  This happened on well-below average volume in all three major index ETFs.

The major economic news Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 217k (compared to a forecast of 210k and the prior week’s 203k).  For ongoing, Weekly Continuing Jobless Claims were lower than was predicted at 1.859k (versus a 1,870k forecast and the previous week’s 1,877k value).  At the same time, the December Export Price Index was higher anticipated at +0.3% (compared to the +0.2% forecast and November’s flat 0.0%).  On the incoming side, the Dec. Import Price Index was +0.1% (versus a -0.1% forecast and in-line with November’s +0.1%).  Meanwhile, the Philly Fed Mfg. Index was MUCH higher than expected at 43.3 (compared to a -5.0 forecast and December’s -10.9 reading).  On the jobs side, Philly Fed Mfg. Employment was also stronger at 11.9 (versus December’s 4.8 value).  At the same time, Dec. Core Retail Sales were up, but less that expected at +0.4% (compared to a forecast of +0.5% and November’s +0.2%).  For the headline number, Dec. Retail Sales were lower than predicted at +0.4% (versus a forecast of +0.6% and November’s +0.8%).  Later, November Business Inventories were up a tick as anticipated at +0.1% (compared to a +0.1% forecast and October’s flat 0.0% value).  At the same time, Nov. Retail Inventories were up, but not as much as predicted at +0.5% (versus the +0.6% forecast, but up sharply from October’s +0.1% reading). Then, after the close, the Fed Balance Sheet showed a $20 billion decline from $6.854 trillion to $6.834 trillion. 

In Fed news, on Thursday, Fed Governor Waller told CNBC that a rate cut cannot be ruled out for March.  He said, “(Inflation) is getting close to what our 2% inflation target would be.”  More broadly, Waller said, “If inflation data comes in as it has, I’d expect a cut in the first half of the year” … “If inflation is down and the labor market stays solid, you could think about restarting rate cuts several months from now…I don’t think March could be completely ruled out.”  Later, Chicago Fed President Goolsbee told the Wall Street Journal, “I have over the last several months become more comfortable that this is a stabilization of the job market at a full-employment-like level, as opposed to something that was crashing through normal and turning into something worse.”  

After the close, JBHT missed on both the revenue and earnings lines.

Overnight, Asian markets were mixed but leaned bullish with five exchanges in the red and seven in the green.  New Zealand (+1.00%) led the gainers while Thailand (-0.88%) paced the losses.  In Europe, the picture is greener with 13 of the 14 bourses above break-even at midday.  The CAC (+1.04%), DAX (+0.98%), and FTSE (+1.29%) lead the region higher in early afternoon trade.  Meanwhile, in the US, as of 7:40 a.m., Futures are pointing toward a modest move higher to start the day.  The DIA implies a +0.38% open, SPY is implying a +0.34% open, and QQQ implies a +0.42% open at this hour.  At the same time, 10-Year Bond yields are down to 4.582% and Oil (WTI) is just on the red side of flat at $78.61 per barrel in early trading.

The major economic news scheduled for Friday are limited to Dec. Building Permits and Dec. Housing Starts (both at 8:30 a.m.), Dec. Industrial Production (9:15 a.m.), and Nov. TIC Net Long-Term Transactions (4 p.m.).  The major earnings reports scheduled for before the open include CFG, FAST, RF, SLB, STT, TFC, WBS, and WIT.  Then, after the close, there are no reports scheduled.

So far this morning, CFG, RF, SLB, STT, TFC, and WBS have all reported beats on both the revenue and earnings lines. Meanwhile, WIT missed on revenue while coming in in-line on earnings.  However, FAST missed on both the top and bottom lines.

With that background, the market tepidly bullish this morning.  The three major index ETFs made a small gap higher to start the premarket.  All three have managed to print small white body candles since the start of the early session, but there are no break-aways from the recent few days’ range.  With that said, all three do remain above their T-line (8ema) and thus the short-term trend is bullish.  It is worth noting that SPY has rejoined DIA (by virtue of the premarket gap higher) in being above their mid-term downtrend line which extends back to mid-December.  So, the downtrends are broken in those two, but a new bullish trend (higher-highs and higher-lows) hasn’t been established.  In the long-term all three are bullish.  In terms of extension, none of the three are too extended above their T-line.  For its part, T2122 is in its overbought range. So, both sides have room to work today, but the Bears have a bit more slack. In terms of the 10 Big Dogs, all 10 are in the green with NVDA (+0.85%) and AAPL (+0.82%) leading the way while INTC (+0.10%) lags.  Related to volume, TSLA (+0.70%) is leading the way, having traded almost twice as much dollar-volume as NVDA, which has traded twice as much as AAPL.  That said, it is a low-volume morning so far.  (Remember this is Options Expiration day and Monday is a holiday.)   

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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