Markets opened higher to start the day Friday.  SPY gapped up 0.41%, DIA gapped up 0.38%, and QQQ gapped up 0.58%.  At that point, SPY and QQQ rallied higher for an hour as DIA chopped sideways for the same period.  From there, all three major index ETFs sold off until 2:15 p.m.  Then for the last hour and 45 minutes all three bounced and then fell back to close near the lows.  This action gave us a gap-up, black-bodied, Spinning Top type candle with most of the wick on the top.  It retested from below and failed the test of its T-line (8ema).  At the same time, QQQ printed a gap-up Shooting Star type of candle that crossed back above its T-line.  For its part, DIA gave us a gap-up, large black-bodied, outside day candle that retested the T-line from below and failed.  This happened on average volume in the QQQ and above-below-average volume in SPY and DIA.

On the day, seven of the 10 sectors were again in the red with Utilities (-1.19%) and Financial Services (-1.11%) well out in front leading the way lower.  On the other side, Technology (+0.56%) was by far the strongest sector.  Meanwhile, SPY lost 0.03%, DIA lost 0.62%, and QQQ gained 0.61%.  VXX spiked 4.70% higher to close at 55.29 and T2122 dropped to just outside its oversold territory to the bottom of the mid-range at 21.14.  At the same time, as mentioned, 10-Year bond yields rose again to close at 4.24% while Oil (WTI) jumped 2.05% to close at $71.65 per barrel. So, it was a volatile in the SPY and QQQ, but really just a Bears’ paradise all day in the DIA. 

The major economic news scheduled for Friday included the Preliminary Sept. Core Durable Goods Orders, which was up 0.4% (compared to a forecasted decline of 0.1% but down from August’s +0.6%).  On the headline number, Preliminary Sept. Durable Goods was down 0.8% (versus a forecast of -1.1% and flat from August’s -0.8%). Later, Michigan Consumer Sentiment was up to 70.5 (compared to the forecast and Sept. reading of 68.9).  At the same time, Michigan Consumer Expectations were up to 74.1 (versus a forecast and prior reading of 72.9).  On the outlook side, Michigan 1-Year Inflation Expectations were DOWN significantly to 2.7% (compared to a previous value of 2.9%).  Looking even further out, Michigan 5-Year Inflation Expectations stayed flat at 3.0% (with the same 3.0% forecast and prior value).

After the close, E reported misses on both the revenue and earnings lines.

In stock news, on Friday, the Wall Street Journal reported BA is weighing the sale of its space business as part of the process of streamlining and freeing up cash. At the same time, META announced it had signed a partnership with Reuters to use the company’s news content in its AI chatbot.  (Financial terms of the deal were not disclosed.)  Later, NVDA again briefly passed AAPL to become the world’s most valuable company. (Both companies ended the day with roughly a market capitalization around $3.5 trillion.)  MSFT, which had taken that crown in June, closed the session with a $3.18 trillion cap.  Late Friday afternoon, COST recalled private-label salmon products due to listeria risk after a recall from it private meat supplier Acme Smoked Fish Corp. 

In stock legal and governmental news, on Friday, in the UK, London’s High Court ruled in favor of BCS, by reducing a shareholder lawsuit (over misleading investors about its private “dark pool” trading) by more than half.  The ruling reduced the lawsuit amount by $428 million to just under $300 million.  Later, a US District Judge blocked the pending $8.5 billion merger of TPR and CPRI, in a victory for the FTC.  At the same time, a different US District Judge approved a $102 million settlement of the US Justice Dept. civil claim against the owner of the ship that struck the Baltimore Francis Scott Key Bridge, killing six people.  (That amount covered the Federal costs to respond to the wreck and clear the bridge debris. Separately, the state of MD is suing the shipping company for the cost to replace the bridge.) Later, the Nuclear Regulatory Commission announced it has begun the long process of reviewing the restart of CEG’s Three-Mile Island nuclear power plant (after CEG signed a deal to sell the power it would produce to MSFT).

Elsewhere, LYFT agreed to pay $2.1 million to settle FTC charges that it misled prospective drivers about how much money they could earn.  Later, a federal jury found that MASI had violated two AAPL patents with its smartwatches, but did not violate other patents as AAPL had claimed. The damages awarded were a paltry $250 (not $250k, or $2.50 million…just $250, which is an infinitely small portion of what AAPL spent on the suit). This was AAPL’s countersuit to MASI’s 2022 US Intl. Trade Commission complaint that had blocked the import of Apple watches and forced AAPL to remove certain technology before resuming import.  After the close, DAL filed suit against CRWD in GA state court in relation to the global systems outage DAL had suffered in July.

In miscellaneous news, on Friday, there were separate reports the China had targeted the phones of senior members of Vice President Harris’ campaign and her opponent, in what was called a cyber-espionage attack.  This was done by penetrating the VZ phone network.  Elsewhere, the Panama Canal reported a 9.5% increase in annual profit to $3.45 billion despite a severe drought that reduce the number of vessels allowed to transit the canal.  (The canal handled 423 million tons of cargo with an average of 27.3 ships per day transiting the canal.  This was down from 36 ships per day the previous year.  However, a 5% decrease in operating costs and price increases provided for a strong year.) 

Meanwhile, the state of NM released a study on Friday regarding proposed “setback” regulations (which would prevent drilling within 2,250 feet from residential, educations, health or correctional institutions or within 650 feet of streams, lakes, ponds, wetlands, or irrigation infrastructure). The study indicated the proposed regulations would impact 15% of new wells.  (NM is the second-largest oil producing state in the US.  The study said this could eventually curtail up to 5.4% of the stats’s potential future oil output.  This refers to a reduction of increases.) Finally, on Sunday, Japan’s Liberal Democratic Party (which had been in power since 2009) suffered major setbacks and lost its majority in Parliament during Sunday snap elections. (The LDP and its coalition partner only secured 215 seats, with 233 needed for a majority. Prior to Sunday, the LDP and its junior partner party had 279 seats.)  This deals a major blow to PM Ishiba who was elected from withing the LDP and only took office on October 1^st.

In other war news, South Korea increased its estimate of North Korean troops sent to Russia to fight against Ukraine to 12,000.  (The US has said it has proof of 3,000 North Korean troops in training.)  Meanwhile, on Saturday, Norway confirmed that 1,500 of the North Koreans have already been deployed to the lines in the Kursk region. Maybe buoyed by the new source of troops, on Sunday Russia’s Putin said “there would be no trade” to end the war.  Most analysts say this means he isn’t interested in negotiations. Still, less than a week before, Putin said he’d consider any deal that acknowledged the situation on the ground (in other words, any deal that gives Russia all the land it has taken since 2014…there was no word whether that means he’s willing to give up the small area of Kursk now held by Ukraine).

Overnight, Asian markets were mixed but leaned toward the green side.  Japan (+1.82%), South Korea (+1.13%), and Shanghai (+0.68%) led the gainers.  Meanwhile, Thailand (-0.71%) and Taiwan (-0.64%) paced the losses. In Europe, the picture redder at midday with only three of the 14 exchanges in the green. The CAC (+0.18%), DAX (-0.20%), and FTSE (-0.31%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures point toward a gap higher to start the day. The DIA implies a +0.41% open, the SPY is implying a +0.49% open, and the QQQ implies a +0.63% open at this hour.  At the same time, 10-Year bond yields are up to 4.258% and Oil (WTI) has plummeted 5.89% to $67.56 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, CX, CNP, FMX, ON, and PHG.  Then, after the close, AMKR, BRO, CDNS, CWH, CR, CVI, ESI, EHC, FFIV, FLS, F, LEG, QUAD, SBAC, SKY, UCTT, VFC, WELL, and WM report.

In economic news later this week, on Tuesday, we get Preliminary September Goods Trade Balance, Preliminary September Retail Inventories, October Conference Board Consumer Confidence, September JOLTS Job Openings, and API Weekly Crude Oil Stocks.  Then Wednesday, October ADP Nonfarm Employment Change, Preliminary Q3 PCE Prices, Preliminary Q3 GDP, Preliminary Q3 Price Index, September Pending Home Sales, and EIA Weekly Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September Core PCE Price Index, September PCE Price Index, September Personal Spending, Q3 Employment Cost Index, October Chicago PMI, and the Fed Balance Sheet.  Finally, on Friday, October Average Hourly Earnings, October Nonfarm Payrolls, October Private Nonfarm Payrolls, October Participation Rate, October Unemployment Rate, September Construction Spending, October ISM Mfg. Employment, October ISM Mfg. PMI, October ISM Mfg. Employment, October ISM Mfg. Prices, and October S&P Global Mfg. PMI are reported.

In terms of earnings reports later this week, on Tuesday, we hear from ATI, AMT, ABG, BP, CHKP, GLW, CROX, DHI, EXP, ECL, EPD, ESAB, FOR, FELE, ULCC, GPK, HNI, HSBC, HUBB, INCY, ITT, JBLU, LDOS, MAS, MCD, MSCI, NVS, PYPL, PAG, PFE, PSX, RITM, RCL, SOFI, SWK, SYY, THC, UFPI, XRX, ZBRA, AMD, ALHC, ALSN, GOOGL, BMRN, BXP, CZR, CAKE, CHE, CMG, BC, EXE, DVA, EIX, EA, EQT, EXR, FSLR, FE, FMC, GOOG, IEX, NGVT, LSTR, LFUS, MCY, MTH, MOD, MDLZ, NGD, OI, OKE, PK, QRVO, RSG, SNAP, SYK, UNM, V, and WERN.  Then Wednesday, ABBV, AER, ARCC, ADP, AVT, AXTA, SAN, BSAC, BLCO, BIIB, EAT, BG, CAT, CDW, CHEF, CLH, DAN, LLY, ENIC, EXC, FLEX, FTV, GRMN, GTES, GEHC, GSK, GPI, HES, HUM, ITW, JKS, KEX, KHC, DRS, MHO, MLM, NBIX, NI, OMF, OPCH, OSK, OTIS, PSN, REYN, SLGN, SITE, SW, SCL, TEL, TEX, TT, UMC, VRSK, VMC, XPO, ZBH, ACHC, AFL, AEM, ALGT, ALL, AWK, AMGN, AR, ACGL, ACA, AXS, BHC, BECN, BIO, BKNG, CHRW, CVNA, CF, CMPR, CLX, CTSH, COIN, COLM, CODI, COMP, CACC, CW, DASH, EBAY, NVST, EQIX, EQR, ETSY, EG, FND, GEN, GDDY, GRBK, THG, HLF, HLI, HUBG, INVH, KMPR, KLAC, LPLA, MTW, MATX, META, MET, MGM, MSFT, MAA, MPWR, MUSA, MYRG, NXT, PGRE, CNXN, PSMT, PRU, PSA, HOOD, ROKU, RYAN, SCI, SFM, APXC, SBUX, SUM, TDOC, TWI, RIG, TTMI, TWLO, VTR, WTS, and WSC report.  On Thursday, we hear from ALNY, MO, AME, BUD, APG, APTV, ARGX, ARW, AVNT, BALL, BBVA, BDC, BGC, OWL, BWA, BMY, CNQ, CVE, LNG, CI, CNK, CCO, CMS, CMCSAA, COP, CFR, DRVN, DNB, ETN, EME, ETR, NVRI, EL, GNRC, GIL, GPRE, DINO, HII, H, IDA, IDXX, NSIT, NSP, ICE, IP, IQV, ITRI, JHG, K, KIM, KTB, LAZ, LECO, LNC, LIN, HZO, MA, MRK, MIDD, NCLH, OTEX, OGN, PH, PATK, PBF, BTU, PTON, PHIN, PWR, REGN, RBLX, SABR, SN, SHEL, SIRI, SO. STLA, STM, TFX, UBER, UPBD, VAL, VRN, GWW, WEC, WEN, WCC, WTW, XEL, XYL, AES, LNT, AMZN, AMCR, AAPL, TEAM, CAR, CGAU, CNO, CTRA, DORM, EMN, EGO, ERIE, ICFI, IR, INTC, JNPR, MTZ, RGA, SEM, SKYW, SM, X, and VICI.  Finally, on Friday, AMR, ARCB, ARES, BTSG, CAH, CBOE, GTLS, CHTR, CVX, CHD, D, ENB, XOM, IMO, LYB, MGA, NVT, MD, PPL, SPG, TROW, TXNM, USM, WAT, and W report.

So far this morning, CX and PHG missed on revenue while beating on earnings.  However, ARLP and CNP missed on both the top and bottom lines.

With that background, it looks like the Bulls are indecisively in-charge early in all three major index ETFs. All three opened the premarket higher, but have printed indecisive candles (mostly wick) since that open. SPY is back above its T-line (8ema) leaving only DIA below its own T-line. With that said, two of the three major index ETFs above their T-line, the short-term trend remains tepidly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three, as they all sit within striking distance of another all-time high. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator is now back at the bottom of its mid-range, but not yet oversold. So, markets do have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, all 10 are in the red this morning. GOOGL (+2.17%) is leading the rally while TSLA (+0.79%) is the leading dollar-volume trader, nearly doubling the normal biggest dog, NVDA (+1.08%) in dollar-volume traded so far this morning.

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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