On Monday, the market started the day mostly flat. SPY opened 0.02% lower, opened 0.11% higher, and QQQ gapped down 0.19%.  From there, all three major index ETFs traded sideways for about 20 minutes before selling off until 11 a.m.  At that point, SPY and QQQ traded sideways until about 1:50 p.m. when they sold off into the close.  DIA only differed in that it rallied from 11 a.m. to noon and then sold off the rest of the day.  This action gave us large, black-bodied candles.  SPY retested and closed just above its T-line (8ema).  DIA retested and failed its T-line on a third down day. However, QQQ remains well above its T-line on a large, black-bodied candle with small wicks on both ends.  This happened on well below-average volume in the major index ETFs.

On the day, seven of the 10 of the sectors were in the red again as Communications Services (-3.21%) plummeted and led the rest of the market (by 2%) lower. Meanwhile, Basic Materials (+0.79%) held up a half percent better than any other sector.  At the same time, SPY lost 0.53%, DIA lost 0.48%, and QQQ lost 0.78%. VXX gained 2.27% to close at 42.71 and T2122 climbed up to the center of its mid-range to close at 47.27.  On the bond side, 10-Year bond yields climbed to 4.197 while Oil (WTI) gained 1.38% to close at $68.13 per barrel.  So, Monday gave us a mostly a nothing day where we saw a modest pullback.  However, all three remain within one percent of their all-time high closes.  Thus, it felt much more like a rest or pause day than the end of a Bull run.

The major economic news scheduled for Monday is limited to the New York Fed 1-Yr. Consumer Inflation Expectations survey, which came in up a tick at 3.0% (compared to an October reading of 2.9%). 

In Fed news, we have started the Fed quiet period ahead of next week’s meeting.  Still, it is worth noting this comment on the NY Fed 1-Year Consumer Inflation Expectations survey.  The report noted, “the overall increase in one- and three-year-ahead inflation expectations masks a decline among those without a college degree and an increase among those with a college degree.” So, the less educated seem to believe the new administration policies will be less inflationary than those with more education.

After the close, MDB and TOL reported beats on both the revenue and earnings lines.  Meanwhile, CASY missed on revenue while beating on earnings.  However, ORCL missed on both the top and bottom lines.

Overnight, Asian markets were mixed again with six exchanges in green and six in the red. South Korea (+2.43%) rebounded from their post-martial law slump to lead gainers by almost 2% while Taiwan (-0.64%) paced the losses.  In Europe, the picture is redder in color with 10 of the 14 bourses below water at midday.  The CAC (-0.55%), DAX (+0.06%), and FTSE (-0.51%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a flat start to the morning.  The DIA implies a -0.06% open, the SPY is implying a +0.06% open, and the QQQ implies a +0.14% open at this hour.  At the same time, 10-Year bond yields have popped back up to 4.232% and Oil (WTI) is down 0.37% to $68.12 per barrel in early trading.

The major economic news scheduled for Tuesday include Q3 Nonfarm Productivity and Q3 Unit Labor Costs (both at 8:30 a.m.), WASDE Ag Report (noon), and the API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports scheduled for before the open include ASO, AZO, DBI, FERG, GIII, HEPS, OLLI, and UNFI.  Then, after the close, GME reports.

In economic news later this week, on Wednesday, Nov. Core CPI, Nov. CPI, EIA Weekly Crude Oil Inventories, and the Nov. Federal Budget Balance are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Nove. Core PPI, Nov. PPI, and the Fed Budget Balance.  Finally, on Friday, Nov. Export Price Index and Nov. Import Price Index are reported.

In terms of earnings reports later this week, on Wednesday, M, REVG, ADBE, and NDSN report.  On Thursday, we hear from, CIEN, AVGO, COST, and RH.  There are no reports scheduled for Friday.

So far this morning, UNFI reported beats on both the revenue and earnings lines.  At the same time, GIII missed on revenue while beating on earnings.  However, AZO, DBI, and FERG missed on both the top and bottom lines.

With that background, stocks remain undecided in the premarket.  SPY and DIA both opened the early session flat with little movement since then.  (What move there has been was positive as the bulls moved SPY from slightly negative to slightly positive.)  QQQ was the biggest mover, gapping down in the premarket but then immediately rallying back to just above flat.  Keep in mind that the SPY, DIA, and QQQ all still sit very near all-time highs.  Two of the three are also still above their T-line (8ema). So, the short-term trend is now slightly bullish.  (However, to the extent we can trust TC2000 DIA data, DIA is giving me some concern coming off three straight down days and showing slightly below break-even early.)  Looking further out, obviously the mid-term and longer-term trends also remain bullish sitting at or near those all-time highs.  In terms of extension, none of the three major index ETFs are too stretched from their   T-lines.  Meanwhile, the T2122 indicator sits in the center of its mid-range.  So, both sides of the market have room to move today if they can find momentum.  In terms of the 10 Big Dogs, eight of the 10 are in green numbers at this point of the morning.  GOOGL (+3.70%) is by far the leader in terms of price move. However, TSLA (+0.94%) is the leader in dollar-volume traded (albeit on a very light trading morning) sitting at a about 1.5 times as much traded than NVDA (-0.14%), which itself has traded almost twice as much as the next one of the big dogs.  

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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