On Friday, markets diverged at the open.  SPY gapped up 0.60%, QQQ gapped up 0.77%, but DIA opened 0.03% lower.  From there, all three major index ETFs saw some follow-through, with DIA rallying until 10:15 a.m. and then meandering sideways the rest of the day.  Meanwhile, SPY and QQQ continued their rally until about 1:45 p.m. before starting their own sideways meanders for the remainder of the session. This action gave us white-bodied candles in all three major index ETFs.  SPY printed a Spinning Top type crossing back above its T-line (8ema).  QQQ could be called a fat body Spinning Top that also gapped up above, retested and stayed above its T-line.  DIA had the weakest candle, with a larger upper wick, but also crossed back above its T-line and closed just a few cents above.  This all happened on below-average volume in all three.

On the day, eight of the 10 sectors were in the green with Technology (+2.14%) way out in front (by more than one percent) leading the rest of the market higher.  At the same time, Utilities (-0.78%) lagged far behind the other sectors.  Meanwhile, SPY gained 0.95%, DIA gained 0.36%, and QQQ gained 1.54%.  VXX fell another 3.24% to close at 13.43 and T2122 climbed but remained in its mid-range at 61.21.  10-year bond yields rose to 4.663% and Oil (WTI) was just on the green side of flat to close at $83.66 per barrel.  So, Friday, the market thumbed its nose at conventional wisdom and took the PCE reading as Bullish.  Or perhaps traders just ignored that data while focusing on strong earnings from MSFT and a great report (a beat), first-ever dividend, and raised forward guidance from GOOGL.  In either case, it was the Bulls’ Day and ended the strongest week for the markets (SPY and QQQ) since November.

The major economic news scheduled for Friday included March Core PCE Index Year-on-Year, which was flat at 2.8% (higher than the forecast 2.6% but in-line with the February 2.8% value).  On a Month-on-Month basis the March Core PCE Price Index was flat as expected at +0.3% (compared to a +0.3% forecast and prior reading).  On the headline number, March PCE Price Index Year-on-Year was hotter than predicted at +2.7% (versus a forecast of +2.6% but up two ticks from February’s +2.5%).  For the Month-on-Month basis, the PCE Price Index was flat, as predicted and seen the prior month, at +0.3%.  At the same time, March Personal Spending remained flat at +0.8% (compared to a forecast of +0.6% and a February reading of +0.8%).  Later, Michigan Consumer Sentiment was down to 77.2 (versus a 77.8 forecast and the previous value of 79.4).  At the same time, Michigan Consumer Expectations were also low at 76.0 (compared to a 77.0 forecast and a previous value of 77.4).  In terms of forward-looking, the Michigan 1-Year Inflation Expectation if up to 3.2% (versus a forecast of 3.1% and well up from the prior +2.9% value).  On the longer-term, the Michigan 5-Year Inflation Expectations are +3.0% (in-line with the forecast of +3.0% but up two ticks from the previous +2.8% reading).

In stock news, on Friday, SBUX and US worker’s union met for contract negotiations.  In other labor news, Reuters reported that MBGAF (Daimler Truck) faces an imminent strike at six US facilities by 7,300 UAW workers if a deal was not reached by 10 p.m. Friday. At the same time, the staff of a Las Vegas CVS facility voted to join a pharmacy union by an overwhelming 87% vote. (The was the first CVS facility to unionize.)  Later, GM announced it is closing manufacturing operations in Columbia and Ecuador. With plans to lay off 850 workers in Columbia and an unspecified number in Ecuador.  At the same time, AAL announced it will have to adjust flights and routes in the second half to adjust for BA 787 jet delivery delays.  (This comes one day after LUV said it will need to shut down operations at some airports for the same reason.)  Later, GOOGL filed a motion with a federal court in VA, asking the court to reject the US government lawsuit accusing it of anticompetitive online advertising practices.  At the same time, LHX confirmed earlier reports that the company will cut 5% of its workforce in a bid to streamline.  After the close, Bloomberg reported that AAPL has re-opened its talks with OpenAI in a bid to catch up to its peers in the AI race.  The talks are aimed toward brining generative AI features to iPhones.  (AAPL is also in talks with GOOGL to license its AI technology named Gemini.)  Late Friday evening, MBGAF did reach a new contract agreement with the UAW.  (Daimler workers will get an immediate 10% raise, with an additional 3% increase in 3-months, then at 6-months, and finally at 12-months after ratification.  There will also be additional cost-of-living increases and profit-sharing. 

In stock legal and governmental news, on Friday, the BRKB subsidiary real estate brokerage reached a $250 million settlement on antitrust litigation related to how realtors are paid.  Later, the NHTSA announced it is investigating TSLA’s 2023 recall related to “Full Self Driving” software, after 20 crashes attributed to that feature have been reported after the software patch.  (The hypothesis is that TSLA’s system meant to ensure the driver remains attentive and in control of the vehicle is lax or faulty.)  The re4call covered 2 million TSLA vehicles (every one ever sold).  Later, by a 2-1 vote a federal appeals court revived a NY state law requiring the provision of affordable high-speed internet to low-income families.  (T, VZ, and industry trade groups had sued to block the 2021 law and r in the original trial.)  At the same time, FAA investigators are looking into an incident Friday where a DAL jet had its emergency slide fall off the plane after takeoff from NY.  The jet involved was a BA 767 enroute to Los Angeles.  Later, the FDIC announced it had sold seized bank FRBK (closed by PA state banking regulators Thursday night) to FULT in order to protect depositors and continue bank operations.   On Saturday.  MBGAF (Mercedes-Benz) announced that the US Dept. of Justice has closed its probe into the company over emissions test manipulation on its diesel engines.

Overnight, Asian markets were green across the board.  Shenzhen (+2.22%), Taiwan (+1.86%), and South Korea (+1.17%) led the region higher.  In Europe, we see a similar picture taking shape with only three of 15 bourses in red at midday.  (Greece at -0.44% was the only appreciable red bourse.)  The CAC (+0.12%), DAX (-0.04%), and FTSE (+0.48%) lead the region modestly higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.16% open, the SPY is implying a +0.23% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bonds are down to 4.624% and Oil (WTI) is flat at $83.88 per barrel in early trading.

There is no major economic news scheduled for Monday.  The major earnings reports scheduled for before the open include ARLP, BBVA, DQ, BEN, HNI, JKS, ON, RVTY, PHG, and SOFI.  Then, after the close, AMKR, ACGL, CNO, CCK, CWK, CVI, ESI, EG, FFIV, FLS, LOGI, NXPI, PARAA, PARA, SANM, SBAC, ST, SUI, RIG, WELL, WWD, and YUMC report. 

In economic news later this week, on Tuesday we get Q1 Employment Cost Index, Chicago PMI, Conf. Board Consumer Confidence, and API Weekly Crude Oil Stocks.  Then on Wednesday, ADP Nonfarm Employment Change, March Construction Spending, April S&P Global Mfg. PMI, ISM Mfg. Employment, ISM Mfg. PMI, ISM Mfg. Price Index, March JOLTs Job Openings, EIA Weekly Crude Oil Inventories, FOMC Rate Decision, FOMC Statement, and Fed Chair Press Conference are reported.  On Thursday, we get March Exports, March Imports, March Trade Balance, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q1 Nonfarm Productivity, Q1 Unit Labor Cost, March Factory Orders, and Fed Balance Sheet.  Finally, on Friday, April Avg. Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, April Unemployment Rate, April S&P Global Services PMI, April S&P Global Composite PMI, ISM Non-Mfg. Employment, ISM Non-Mfg. PMI, ISM Non-Mfg. PMI Price Index, and Fed Member Williams speaks.

In terms of earnings reports later this week, on Tuesday, we hear from MMM, APD, ATI, AEP, AMT, ARCB, ADM, BGC, EAT, CNP, KO, GLW, DAN, ETN, ECL, LLY, EPD, FELE, IT, GEHC, GPK, HSBC, HUBB, ITW, INCY, KBR, LEA, LDOS, MPC, MLM, MCD, MLCO, TAP, MPLX, NOG, OMF, PCAR, PYPL, PAG, PNM, PEG, QSR, RITM, SIRI, STLA, SCL, SYY, TMHC, THC, TKR, TT, UFPI, ABRA, AMD, AMZN, AMCR, ASH, EQH, BXP, CZR, CC, CHK, CLX, FANG, EIX, EXR, FBIN, HI, INVH, LEG, LFUS, LPLA, LUMN, MATX, MCY, MDLZ, NGD, OI, OKE, PK, PINS, PSNY, PRU, PSA, QUAD, RNR, RSG, RYI, SWKS, SBUX, SYK, SMCI, UNM, and WERN.  Then on Wednesday, AER, ARCC, ADP, AVA, AVT, AXTA, GOLD, BLCO, CG, CRS, CDW, COR, CVE, CENX, GIB, CHEF, CLH, CNDT, CVS, DD, ENTG, ESAB, EL, EEFT, FLEX, FTS, GRMN, GTES, GNRC, GSK, GPN, IDXX, NSP, JCI, KKR, KHC, DRS, LTH, MAR, MA, NBIX, NCLH, OGE, PSN, PFE, PPL, SMG, SLGN, SR, STGW, TRN, TTMI, UTHR, VRSK, WEC, WLK, YUM, ACHC, AFL, ALB, ALL, AFG, AIG, AWK, ANSS, CAR, AXS, BALY, BBSI, BZH, BV, CHRW, CWH, CVNA, CF, CMPR, CTSH, CODI, CTVA, CW, DLX, DVN, DASH, EBAY, ENSG, NVST, ETSY, ES, EXPI, FLSR, FNV, GFL, GIL, THG, HLF, HST, JAZZ, KMPR, MRO, MKL, MET, MGM, MAA, MOS, MUSA, MYRG, PGRE, PTEN, PAYC, CNXN, PTC, QRVO, QCOM, RHP, SIGI, SCI, SFM, SUM, TTEK, TWI, TROX, UGI, VMI, VTR, VICI, ZG, and Z report.  On Thursday, we hear from AGCO, ATUS, AME, APA, APG, APO, APTV, MT, ARES, ARW, BHC, BAX, BCE, BDX, BDC, BWA, BTSG, BRKR, CNQ, CAH, CHD, CI, CNK, CNHI, CIGI, COP, CMI, XRAY, DBD, D, DRVN, DNB, ENOV, NVRI, EXC, ULCC, HWM, HII, NSIT, ICE, IQV, IRM, ITRI, ITT, JHG, K, KTB, LNC, LIN, MCO, MUR, NFG, NVO, ONEW, OGN, PH, PATK, PBF, BTU, PTON, PENN, PNW, PBI, PWR, REGN, RXO, SABR, SNDR, SEE, SHEL, SO, SWK, TRGP, TFX, TRI, UPBD, VAL, VSTS, VMC, W, WEN, WCC, WRK, XYL, ZBH, ZTS, AES, ALHC, AEE, AMGN, AAPL, ACA, BECN, SQ, BKNG, BFAM, CIVI, COIN, ED, CTRA, DVA, DLR, DKNG, EOG, WTRG, EXPE, FND, FTNT, GDDY, HOLX, HUN, ILMN, IR, LYV, MTZ, MODV, MNST, MSI, ZEUS, OTEX, OPEN, OEC, PTVE, PXD, POST, RGA, REZI, RKT, RYAN, SEM, SM, SWN, TXRH, X, and WSC.  Finally, on Friday, ADNT, AXL, AMRX, BEPC, BEP, CBOE, CBRE, GTLS, LNG, CRBG, FLR, FYBR, GPRE, HSY, KOP, MGA, NMRK, NVT, PAA, PAGP, TRP, TAC, TRMB, and XPO report.

So far this morning, ARLP, DPZ, HNI, RVTY, and SOFI all reported beats on both the revenue and earnings lines.  Meanwhile, JKS and PHG missed on revenue while beating on earnings.  Unfortunately, DQ missed on both the top and bottom lines.

In miscellaneous news, on Saturday, the China International Capital Corp (one of China’s largest banks) announced it had cut the base pay of 2,000 investment bankers by 25%.  This comes after the bank cut banker bonuses by 40% last year.  On Sunday, TSLA CEO Musk travelled to China to lobby their government for approval to roll out Full Self Driving in that country.  Musk gained approval to remove restrictions (such as automated lane changes) from TSLA vehicles in China, despite safety concerns. Reports are that the large amount of data collected by the cars will be held in China (the key hurdle was approval for “data security”) and the cars will use BIDU’s mapping technology.

With that background, it looks as if the Bulls are gapping all three major index ETFs higher in the premarket. However, all three are also putting in small, indecisive candles since that higher open in the early session. SPY, DIA, and QQQ are all back above their T-line (8ema) at this moment. So, the short-term trend is bullish but not strongly so. Meanwhile, the mid-term remains bearish but under pressure from Bulls. The longer-term market remains Bullish but trend has been 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 in the center of 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, six of the 10 are in the green with only GOOGL (-1.54%) and META (-1.25%) appreciably lower so far. MEanwhile, TSLA (+11.46%) is soaring on the China FSD approval while that biggest dog (NVDA +0.17%) is just on the green side of flat. Keep in mind that we’ve seen a lot of whipsaw lately. So, be careful not to chase a gap. Also remember that this is a Fed week and end of April, meaning we’ll get April Jobs data on Friday as well as a ton of earnings over the week. There will be a ton of ammunition for “wait and see” and over-reaction on news this week. Be careful.

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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service