Markets were mostly in a sideways meander on Thursday.  SPY opened down 0.14%, DIA opened dead flat, and QQQ gapped down 0.41%. From there all three major index ETFs ground sideways until 12:20 p.m.  At that point, SPY and QQQ continued in their sideways wobble until 1:30 p.m.  Then they started a slow, steady selloff.  However, at 12:20 p.m. DIA led by beginning its slow steady selloff 70 minutes early.  This action gave us black-bodied candles in all three major index ETFs.  SPY tested and crossed down, barely, its T-line (8ema).  DIA printed its sixth-straight black candle with a lower close. Finally, QQQ printed the smallest-bodied candle that was also a Bearish Harami but remains comfortably above its T-line.  This happened on below-average volume in all three.

On the day, nine of the 10 of the sectors were in the red as Basic Materials (-1.40%) and Healthcare (-1.30%) were out front leading the way lower. On the other side, Consumer Defensive (+0.07%) held up better than the other sectors and was the only one in the green.  Meanwhile, SPY lost 0.52%, DIA lost 0.51%, and QQQ lost 0.65%.  VXX gained 0.81% to close at 42.47 and T2122 dropped back down into its oversold territory to close at 13.95. On the bond side, 10-Year bond yields jumped up to 4.336% while Oil (WTI) fell a third of a percent to close at $70.05 per barrel.  So, Thursday was punctuated by a gap lower in DPY and QQQ and then a modest, but steady, afternoon selloff in all three major index ETFs.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 242k (compared to a forecast of 221k and the prior week’s 225k reading).  On the ongoing side, Weekly Continuing Jobless Claims were also slightly higher than anticipated at 1,836k (versus the 1,880k forecast and up from the previous week’s 1,871k).  At the same time, Month-on-Month Nov. Core PPI was down as predicted to +0.2% (compared to a 0.2% forecast and down a tick from October’s +0.3% value).  On the headline number, Month-on-Month Nov. PPI was unexpectedly up to +0.4% (versus a +0.2% forecast and the +0.3% October reading). Later, after the close, the Fed Balance Sheet showed a very modest increase of $1 billion on the week, climbing to $6.897 trillion.

In Fed news, we have started the Fed quiet period ahead of next week’s meeting. 

After the close, AVGO and COST reported misses on revenue while beating on earnings.  On the other side, RH beat on revenue while missing on earnings.

Overnight, Asian markets were mixed with five exchanges in green and seven, including the biggest movers, in red.  Shenzhen (-2.23%) Hong Kong (-2.09%), and Shanghai (-2.01%) led the region lower.  In Europe, we see the opposite picture with four of the 14 bourses in red while 10 sit in the green at midday.  The CAC (+0.25%), DAX (+0.24%), and FTSE (+0.11%) lead the region modestly higher in early afternoon trade. Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a green start.  The DIA implies a +0.12% open, the SPY is implying a +0.35% open, and the QQQ implies a +0.79% open at this hour.  At the same time, 10-Year Bond yields are up to 4.351% and Oil (WTI) is up 0.71% to $70.53 per barrel in early trading.

The major economic news scheduled for Friday are limited to November Export Price Index and November Import Price Index (both at 8:30 a.m.).  There are no major earnings reports scheduled either before or after the market.

With that background, the market seems bullish although divergently so.  All three major index ETFs opened the premarket with a modest gap higher. However, they have diverged in action since that point.  SPY has printed a small, white-bodied candle with no wick or Marubozu. At the same time, DIA has printed an uncertain Doji candle inside Thursday’s candle.  Finally, QQQ has given us a larger Marubozu candle and now sits at all-time highs in the early session.  Once again, SPY and QQQ are above their T-line (8ema) while DIA remains below its own T-line.  It is worth remembering that all three sit at or near all-time highs. However, with only two of the three sitting above their T-line the short-term trend has to be seen as modestly bullish.  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 is back in its oversold territory.  So, while both sides of the market have room to move today if they can find momentum, the Bulls have a bite more rope to work with.  In terms of the 10 Big Dogs, six of the 10 are in red numbers at this point of the morning. NVDA (+1.38%) and AMD (+1.23%) pace the winners while META (-0.58%) is the laggard. Once again, TSLA (+1.08%) is leading the dollar-volume traded by about 1.5 times over NVDA with the next closest 3.5 times behind NVDA.  Lastly, remember its Friday and time to get your account ready for the weekend.

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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