On Thursday, markets opened higher again.  SPY gapped up 0.35%, DIA opened 0.10% higher, and QQQ gapped up 0.57%.  From there, SPY and QQQ followed-through with a rally that lasted until 12:50 p.m.  At that point, both had an afternoon rest before QQQ began to rally again at 2 p.m. and SPY followed at about 2:45 p.m.  However, both SPY and QQQ also took profits the last 30 minutes of the day.  At the same time, after its open, DIA just meandered sideways around that opening gap all day long.  This action gave us gap-up white bodied candles in the SPY and QQQ as well as a modestly gap-up Doji in the DIA.  SPY and QQQ did have smaller upper wicks on large white bodies.  All three major index ETFs are stretched above their T-line (8ema) now.  This happened on above-average volume in the DIA, average volume in the QQQ, and below-average volume in the SPY.

On the day, seven of the 10 sectors were green with Technology (+2.08%) way, way out front leading the gainers higher.  On the other side, Financial Services (-1.26%) and Communication Services (-1.07%) lagged far behind the other sectors.  At the same time, SPY gained 0.77%, DIA gained 0.04%, and QQQ gained 1.58%.  VXX dropped another 3.53% to close at 45.09 and T2122 fell but remained just inside of its overbought territory, closing at 80.80.  Meanwhile, 10-Year bond yields fell sharply to a still high 4.330% while Oil (WTI) rose 0.50% to close at $72.05 per barrel.  So, the day saw follow-through (especially in the tech area) to Wednesday’s post-election spike. The mega-cap DIA was torn between big profit-taking among financials and the pops from INTC (which is soon going bye-bye from that index), AMZN, AAPL, and MSFT.  Among the market’s big dogs TSLA (+2.90%), led NVDA (+2.25%) in dollar-volume traded although both were over $30 billion and less than $35 billion.  So, it was a lot closer than it normally is in terms of trading.  It is also worth noting that SPY, DIA, and QQQ all printed another new all-time high and another new all-time high close.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which were up slightly but also slightly better than expected at 221k (compared to a forecast of 223k and a prior week reading of 218k).  On the ongoing front, Weekly Continuing Jobless Claims came in higher than expected at 1,892k (versus a 1,880k forecast and the prior week’s 1,853k value). At the same time, Preliminary Q3 Nonfarm Productivity (Qtr.-on-Qtr.) was up but not as strong as predicted at +2.2% (compared to a +2.6% forecast and a Q2 reading of +2.1%).  Meanwhile, the Preliminary Q3 Unit Labor Costs were both down sharply but still far higher than anticipated at +1.9% (versus a forecast of +1.1% and a Q2 reading of +2.4%). Later, Sept. Consumer Credit came in DRAMATICALLY lower than predicted at $6.00 billion (less than half of the $12.20 billion forecast and down from August’s $7.64 billion number).  Then, after the close, the Fed Balance Sheet showed another decline, falling $19 billion on the week down to $6.994 trillion.

Prior to the Fed announcements, the ever attention-needy Trump camp leaked to CNN that the ex-President “would likely allow” the FOMC Chairman to serve out the rest of his term rather than firing him.  During his Press Conference, Fed Chair Powell said he gave one-word “No” answers indicating he would not resign, even if asked, and also that Presidents do not have the legal authority to fire a Fed Chairman. (However, it is worth noting that Chair Powell’s term ends in 2026.)

In Fed news, on Thursday, the Fed Interest Rate Decision was to cut rates 0.25% as expected.  This reduces the Fed Funds rate to 4.75% – 5.00%.  The vote for this cut was unanimous. In its statement, the FOMC said, “The economy has continued to expand at a solid pace,” going on to say “Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.”  It is also worth noting that the FOMC removed a line from the September statement which had said the committee had “gained greater confidence that inflation was moving toward its 2% target.”  (This may reflect the reasoning for, or result from the decision to, cut only a quarter point instead of the previous half percent cut.)  The statement summation was, “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance.”  Regarding labor markets, the statement said, “(labor market) conditions have generally eased, and the unemployment rate has moved up but remains low.” (This was a change from language noting a slowing labor market in September.)  

In other news from the Fed Chair press conference, Powell said “In the near term, the election will have no effects on our policy decisions.”  He continued to be pestered by questions about what a new Trump administration means for Fed policy, answering that, “We don’t guess, speculate, and we don’t assume what future policy choices will be” (going on to state the Fed boilerplate “data driven” approach).  This press focus on Trump and what Trump means for the economy led to a shortened press conference.

After the close, AFRM, AKAM, AMN, ANET, AXON, CIVI, ED, DBX, DXC, FTNT, G, PODD, MTD, MSI, NWSA, OPEN, OVV, PINS, QDEL, REZI, RNG, TOST, and TTD all reported beats on both the revenue and earnings lines. Meanwhile, CPAY, EOG, and EXPE missed on revenue while beating on earnings.  On the other side, AL, ABNB, AMRC, BHF, CPRI, EXPI, LGFA, and SOLV beat on revenue while missing on earnings. However, AGL, SQ, DKNG, EVH, MNST, RIVN, and RUN missed on both the top and bottom lines. 

In stock news, on Thursday, Mercury Research reported that INTC’s share of the notebook, desktop, and server market segments is the lowest since 2006. The report said that AMD and ARM were the competitors picking up the lost share.  (Still, it is worth noting that INTC continues to have a 66% in the desktop, 69% in the notebook, and a 70% share in the server space.)  Later, USM announced it has agreed to sell some of its spectrum licenses to T for $1 billion.  At the same time, DUK announced that it expects to see between $2.4 billion and $2.9 billion in costs to restore facilities damaged by Hurricanes Debby, Milton, and Helene. Later, GM announced it is ending production of Cadillac XT4 SUVs as the company shifts more toward electric vehicles. After the close, Bloomberg reported that BLK is in talks with $70 billion hedge fund Millenium Mgmt. over purchasing a stake in the private fund. 

In stock legal and governmental news, on Thursday, the NHTSA announced that VLKAF (Volkswagen) is recalling 114k vehicles in the US over airbag concerns. Later, TPR announced it has paused integration of CPRI while it appeals a US court decision to clock the $8.5 billion acquisition. At the same time, a US federal appeals court ruled that WBD’s CNN unit must face a now-revived defamation lawsuit from “Project Veritas” which CNN had reported was responsible for promoting disinformation and doxing.  Later, the CA Public Utilities Commission increased reporting requirements on autonomous vehicle “incidents” (now at a trip level) for collisions, traffic citations, and stoppage events (when the self-driven vehicles get stuck).  GM, GOOGL, and TSLA are the companies immediately impacted.

In miscellaneous news, on Thursday, the Bank of England also cut its based rate by 25 basis-points to 4.75%. Elsewhere in Europe, German Chancellor Scholz is now facing increasing pressure from business groups (and opposition parties) to call new elections after the collapse of its three-way coalition.  Back in the US, after the Fed rate cut, the Fed Funds Futures market is showing that trades are indicating a 74.5% probability of another quarter-point cut in December.  The other 25.5% probability foresees no cut or increase in December.

In Middle-East War news, on Thursday, the IDF announced it expanded its operations in Northern Gaz, claiming that Hamas has regrouped.  In addition, Israeli strikes in that area killed dozens Thursday, including 27 in one airstrike on a multi-story building in a refugee camp. Elsewhere, the Gaza Ministry of Health reported nearly 44k Palestinians have been killed and another 103k injured since Israel’s responses to the Oct. 7, 2023 Hamas attack began.

Overnight, Asian markets were mixed with five of the 12 exchanges in green and the other seven below break-even.  Hong Kong (-1.07%) was well out in front of the other losers while New Zealand (-1.50%) and Singapore (+1.39%) were well in front of the other gainers.  In Europe, we see a similar picture taking shape with nine of the 14 bourses showing red at midday. The CAC (-0.64%), DAX (-0.60%), and FTSE (-0.78%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly lower start to the day.  DIA implies a -0.02% open, the SPY is implying a -0.12% open, and the QQQ implies a -0.31% open at this hour.  At the same time, 10-Year bond yields are down to 4.308% and Oil (WTI) is down 1.24% to $71.46 per barrel in early trading.

The major economic news scheduled for Friday brings Michigan November Consumer Sentiment, Michigan November Consumer Expectations, Michigan November 1-Year Inflation Expectations, Michigan November 5-Year Inflation Expectations and Sept. Retail Inventories (all at 10 a.m.).  We also hear from Fed Governor Bowman (11 a.m.). The major earnings reports scheduled for before the open include ADNT, WMS, ATSG, AMCX, AXL, AMRX, BAX, BLMN, BEPC, BEP, CLMT, CNH, ERJ, FLO, FLR, FTRE, GLP, GTN, IEP, KOP, LAMR, NRG, PAA, PAGP, RBA, SONY, TIXT, and PARAA.  Then, after the close, CEPU reports.

So far this morning, ADNT, AMRX, BAX, ERJ, PARAA, and TIXT have all reported beats on both the revenue and earnings lines.  Meanwhile, BLMN, FLO, and SONY missed on revenue while beating on earnings. On the other side, CLMT, FTRE, IEP, and NRG beat on revenue while missing on earnings.  However, WMS, FLR, GTN, and LAMR missed on both the top and bottom lines.

With that background, it looks like the market is basically undecided so far in the premarket. SPY and QQQ did gap modestly higher to start the early session, but have printed black-bodied candles since that point and are back to basically flat. Meanwhile, DIA started premarket a bit lower, and has printed a small white-body candle to also climb back to basically break-even from Thursday’s close. With all three being far above their T-lines (8ema), the short-term trend is very bullish. The mid-term trend has also reversed since the surprise election result and is now bullish and the longer-term trend remains strongly Bullish in all three. Basically, the only thing you need to know is that all three major index ETFs now sit at all-time highs. With regard to extension, all three major index ETFs are extended far above their T-line. However, the T2122 indicator remains just inside the bottom of its overbought territory. So, the market is stretched, but theoretically still has some room to push even higher. At the very least, we can say the Bulls have the momentum but are in need of at least a rest. (Just remember that markets can remain too far extended longer than we can stay solvent betting on the reversal.) With regard to those 10 big dog tickers, nine of the 10 are in the red this morning with only AAPL (+0.10%) clinging to green territory. Meanwhile, INTC (-0.91%) leads the pack lower after leading the gains Thursday. In terms of trading volume, NVDA (-0.07%) and TSLA (-0.03%) are neck-and-neck in terms of dollar-volume traded and both have traded 12 or more times as much as the next closest stock. However, it is a lighter volume trading premarket than usual. Finally, do not forget that it’s Friday…pay day. So take some money off the table to pay yourself and prepare your account for the weekend news cycle. (Happy Birthday on Sunday to my fellow Marines and don’t forget Monday is Veteran’s Day, but not a market 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.

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