Monday saw markets open higher and then we saw some divergence. SPY gapped up 0.54%, DIA gapped up 0.60%, and QQQ gapped up 0.82%. From there, QQQ rallied steadily higher until 10:50 a.m. before trading sideways along the highs the rest of the day. Meanwhile, after the open, SPY meandered around that opening level all day. For its part, DIA met the opening gap higher with an immediate sharp selloff that leveled off after 15 minutes and finally touched the prior close level about noon before drifting back up into the mid-gap the rest of the day. This action gave us a Bullish Harami (with upper wick) in the QQQ. At the same time, SPY and QQQ printed indecisive Spinning Top candles with SPY printing a gap-up white version and DIA giving us a gap-up black-body version. All three major index ETFs gapped up above their T-line (8ema), with QQQ never retesting, SPY retesting and passing, and DIA retesting and failing that test. This happened on well-below-average volume in all three (especially SPY).

On the day, eight of the 10 of the sectors were in the green with Energy (+2.13%) well out in front leading the market higher.  On the other side, Financial Services (-0.59%) and Healthcare (-0.32%) lagging far behind the other sectors.  At the same time, SPY gained 0.68%, DIA gained 0.37%, and QQQ gained 1.21%.  Meanwhile VXX fell 2.53% to close at 42.85 while T2122 popped back into the top half of its mid-range, closing at 61.07.  On the bond side, 10-Year Bond yields rose to close at 4.501% and Oil (WTI) popped 2.07%, closing at $72.47 per barrel.  So, Monday was a gap-up and then diverging sentiment day on low volume.  This may indicate traders waiting on Powell’s testimony, Trump Tariff details, or other news.   

The only major economic news on Monday was the January NY Fed 1-Year Consumer Inflation Expectations, which came in as expected at 3.0% (in-line with the forecast and December reading of 3.0%). 

After the close, ACGL, MEDP, SSD, and WTS reported beats on both revenue and earnings.  Meanwhile, AMKR and CINF missed on revenue while beating on the earnings line. On the other side, VRTX beat on revenue while missing on earnings.  However, COTY and NGL missed on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned toward the red side.  India (-1.32%) and Hong Kong (-1.06%) were by far the biggest losers.  On the other side, Thailand (+1.06%) and South Korea (+0.71%) led the gainers.  In Europe, we see a similar picture taking shape at midday with seven of the 14 bourses in the green and the other half in the red.  The CAC (-0.06%), DAX (+0.03%), and FTSE (-0.03%) lead the region on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.52% open at this hour.  At the same time, 10-Year Bond yields are up to4.535% and Oil (WTI) is up another 1.34% to $73.31 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to the API Weekly Crude Stocks report (4:30 p.m.).  Fed Chair Powell also testifies (10 a.m.) and Fed members Bowman and Williams (both at 3:30 p.m.) speak.  The major earnings reports scheduled for before the open include AN, BP, CG, CARR, KO, DD, ECL, FIS, GFS, HUM, LCII, LDOS, MAR, MAS, RPRX, SPGI, SHOP, SUN, WCC, and KLG. Then after the close, ALSN, AMX, AIG, AIZ, BHF, BN, DASH, EW, ET, ES, ECG, EXEL, GILD, IAC, LYFT, MCY, PBI, PRI, ST, WELL, ZG, and Z report. 

In economic news later this week, on Wednesday, January Core CPI, January CPI, EIA Weekly Crude Oil Inventories and the January Federal Budget Balance are reported.  Fed Chair Powell also testifies and Fed member Bostic reports.  On Thursday, we get Weekly Initial jobless Claims, Weekly Continuing Jobless Claims, January Core PPI, January PPI, and the Fed’s Balance Sheet. Finally, on Friday, Jan. Core Retail Sales, Jan. Retail Sales, Jan. Export Price Index, Jan. Import Price Index, Jan. Industrial Production, Dec. Business Inventories, and Dec. Retail Inventories are reported.

In terms of earnings reports later this week, on Wednesday, GOLD, BIIB, BAM, CHEF, CME, CNDT, CVS, DBD, D, EXC, GNRC, IPG, KHC, LAD, MLM, COOP, NI, QSR, R, SITE, SW, SAH, SPTN, TMHC, THC, VRT, WAB, WAT, ALB, AR, APP, CSCO, CPA, CRBG, CW, EIX, EQIX, FAF, GXO, HUBS, KGC, MTW, MGM, MKSI, MSA, NBR, PPC, QDEL, HOOD, ROL, RGLD, SCI, SLF, TTD, TSE, TROX, TYL, VTR, WCN, WFG, and WMB report.  On Thursday, we hear from ALNY, ATUS, AEP, HOUS, AVNT, CBRE, CROX, DDOG, DE, DTE, DUK, GEHC, GPN, HBI, HRI, HTZ, HMC, HWM, H, IRM, KNF, LECO, TAP, MCO, DNOW, OGN, PBF, PAG, PCG, PHIN, PPL, SBH, SN, SONY, TU, TIXT, TRU, USFD, WEN, YETI, ZBRA, ZTS, AEM, AL, ABNB, AMAT, BIO, BFAM, CAE, COIN, DVA, DXCM, DLR, DKNG, GDDY, IR, LEG, MSI, PANW, RSG, ROKU, TWLO, and WYNN.  Finally, on Friday, AMCX, AEE, AXL, BGC, ENB, FTS, MGA, MRNA, NMRK, POR, TRP, and THS report.

So far this morning, AN, KO, DD, GFS, HUM, LCII, LDOS, MAR, and SPGI all reported beats on both the revenue and earnings lines. Meanwhile, CG, SHOP, and WCC beat on revenue while missing on earnings. On the other side, CARR, FIS, MAS, and RPRX missed on revenue while missing on earnings.  However, BP and SUN missed on both the top and bottom lines.

With that background, it looks like stocks are moving lower in a fairly indecisive manner in the premarket.  All three major index ETFs opened lower and have printed black-body, but tiny, indecisive (Doji or Spinning Top-like) candles so far in the early session. SPY is retesting its T-line (8ema) from above.  QQQ is headed that direction but remains a little above that level.  Meanwhile, Dia is moving lower away from its T-line.  So, the short-term trend is mixed but leans slightly bearish this morning.  The mid-term downtrend (if you want to call it a trend) remains a choppy mess. In terms of extension, as mentioned, all three are back close to their T-line.  Meanwhile, T2122 sits in the upper half of its mid-range.  So, both sides have room to work today if they can find momentum. In terms of the Big Dogs, all 10 are in the red with AMZN (-0.65%) leading a tightly grouped pack lower.  MSFT (-0.25%) has held up best of the 10, but is in that pack headed South.  As far as liquidity goes, NVDA (-0.33%) leads with TSLA (-0.64%) slightly behind and the next-closest trading 10 times less than TSLA.  However, it is worth noting that this is a very low-volume premarket, at least so far.

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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