On Wednesday, markets popped at the open again.  SPY gapped up 0.49%, DIA gapped up 0.31%, and QQQ gapped up 0.92%.  From there, SPY and QQQ rallied slowly and steadily until noon while DIA bounced sideway along its open and inside its gap.  At noon, SPY and QQQ followed DIA sideways the rest of the day. This action gave us indecisive candles in all three major index ETFs.  SPY printed a gap-up, white-bodied, Inverted Hammer or possibly a Shooting Star type based on follow-through.  QQQ printed something similar, but with a larger body.  For its part, DIA gave us a gap-up, black-bodied Doji.  This all happened on below-average volume in all three major index ETFs.

On the day, eight of the 10 of the sectors were in the red with Technology (+1.46%) by far the strongest sector while Utilities (-1.87%) and Energy (-1.43%) led the market lower.  It is worth noting that nine of the 10 Big Dogs were in the green, led by NFLX (+9.69%), NVDA (+4.43%), and MSFT (+4.13%).  At the same time, SPY gained 0.55%, DIA gained 0.27%, and QQQ gained 1.28%.  Meanwhile, VXX rose 1.52% to close at 42.75 while T2122 dropped but stayed just inside the overbought range, closing at 80.43.  On the bond side, 10-Year Bond yields rose back to 4.607% and Oil (WTI) dropped another 0.51% to $75.44 per barrel.  So, Tuesday saw a gap higher, then the broader indices rallied through the morning only to follow the Mega-Cap DJIA sideways the rest of the day.  Once again, most of the gain was accomplished at the opening gap. 

The major economic news on Wednesday was limited to the US Leading Economic Index, which came in as expected at -0.1% (compared to a forecast of -0.1% and a November reading of +0.4%).  Then, after the close, the API Weekly Crude Oil Stocks report showed a 1.000-million-barrel inventory build (versus the prior week’s 2.600-million-barrel drawdown).

There was no Fed news Wednesday as they prepare for next week’s FOMC meeting.  (That meeting is expected to be a hold by most analysts and 99.5% of Fed Futures traders.)

After the close, AA, CACI, CADE, and DFS reported beats on both the revenue and earnings lines.  Meanwhile, KNX, PLXS, and STLD missed on revenue while beating on earnings.  However, KMI missed on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned toward the red side.  Thalina (-1.29%) and South Korea (-1.24%) paced the losses while Taiwan (+0.97%) and Japan (+0.79%) led the gainers.  In Europe, the bourses are leaning toward the green side with only three of 14 exchanges in the red at midday.  The CAC (+0.39%), DAX (+0.30%), and lagging FTSE (+0.01%) lead the region higher in early afternoon trade.  In the US., as off 7:45 a.m., Futures are pointing toward a mixed open.  DIA implies a +0.14% open, SPY is implying a -0.13% open, and QQQ implies a -0.50% open at this hour.  At the dame time, 10-Year Bond yields are up to 4.64% and Oil (WTI) is up a third of a percent to $75.71 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims and Weekly Continuing Jobless Claims (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (noon), and the Fed Balance Sheet (4:30 p.m.).  Trump also speaks at 11 a.m.  The major earnings reports scheduled for before the open include ALK, AAL, ELV, FCX, GE, HBAN, MKC, NTRS, ORI, TAL, and UNP. Then, after the close, COLB, CSX, EWBC, ISRG, and TXN report.

In economic news later this week, on Friday, we get S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Dec. Existing Home Sales, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, Friday, we hear from AXP, ERIC, HCA, NEE, and VZ.

So far this morning, AAL, ELV, GE, MKC, NTRS, TAL, and TCBI have all reported beats on both the revenue and earnings lines.  Meanwhile, HZO and ORI missed on revenue while beating on earnings.  On the other side, SDVKY and VLY beat on revenue while missing on earnings. 

With that background, it looks like the market is undecided early today.  All three major index ETFs opened the premarket in one direction and have traded the other direction since that start.  SPY and DIA are giving us white body candles while QQQ is now showing a black-body candle. With that said, all three are well above their T-line (8ema) and thus the short-term trend is bullish.  All three have also broken mid-term downtrend lines (running back to the mid-December all-time highs). However, they haven’t printed higher-highs and higher-lows to confirm an uptrend. So, downtrends are broken, but a new bullish trend hasn’t been established.  In the long-term all three are bullish.  In terms of extension, all three are now stretched above their T-line at this point.  For its part, T2122 has fallen but remains in the bottom of its overbought range. So, we need more of a pause or pullback to keep the rally healthy.  However, the market can remain over-extended longer than any of us can stay solvent betting on a reversal too soon.  In terms of the 10 Big Dogs, six of the 10 are in the red with NVDA (-1.81%) well out in front leading the QQQ lower.  On the other side, META (+0.53%) is holding up better than the others.  Related to volume, NVDA also leads the way, having traded 1.5 times as much dollar-volume as TSLA (-0.44%), which itself has traded 5 times as much as AAPL (+0.16%) and MSFT (-0.66%). 

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