On Thursday, with the exception of DIA, the Bulls were in charge.  SPY opened 0.18% higher, DIA gapped up 0.37%, and QQQ gapped up 0.32%.  From there, both SPY and QQQ rallied steadily to new highs by about 10:45 a.m.  At that point, both went through a modest midday slump that took them back toward (but not reaching) the opening level by 1:20 p.m.  However, then the Bulls stepped back in to lead another steady rally to new highs all the way into the last few minutes.  For its part, after the open, DIA immediately sold off back to the prior close level before meandering sideways until 1:20 p.m.  From there, just as in the SPY and QQQ, DIA rallied strongly and steadily, but unlike the other two, DIA slumped the last 30 minutes.  This action gave us large, white-bodied candles that crossed above the T-line in SPY and QQQ (gapped above in QQQ).  Meanwhile, DIA printed a white, Spinning Top candle that crossed above its T-line during the day.

On the day, all 10 of the sectors were in the green with Communications Services (+1,82%) out in front leading the market higher. On the other side, Industrials (+0.12%) was by far the worst-performing sector.  At the same time, SPY gained 1.06%, DIA gained 0.82%, and QQQ gained 1.44%.  Meanwhile VXX fell 1.89%, closing at 42.06 and T2122 popped into the top half of the mid-range, closing at 72.22.  On the bond side, 10-Year Bond yields dropped to 4.535% and Oil (WTI) was just on the green side of flat, closing at $71.40 per barrel.  So, Thursday saw the market lay a classic Bear Trap.  The Bears over-reacted to news, gapping stocks lower across the entire market.  Then the Bulls stepped in to immediately fade that gap and the Bears never regained their footing.  By the time the damage was done to the Bears, markets took profits and meandered sideways in the afternoon.  This all happened on below-average volume in all three major index ETFs.

The major economic news on Thursday included Weekly Initial jobless Claims, which came in slightly lower than expected at 213k (compared to a 217k forecast but down from the prior week’s 220k reading).  On the ongoing front, Weekly Continuing Jobless Claims were also down to 1,850k (versus a 1,880k forecast and the previous week’s 1,886k number).  In terms of Producer Prices, the January Month-on-Month Core PPI was as expected at +0.3% (compared to a +0.3% forecast but down a tick from the December +0.4% value).  For the headline number, January Month-on-Month PPI was +0.4% (higher than the +0.3% forecast but down a tick from December’s +0.5% number).  Then, after the close, the Fed’s Balance Sheet was reported and broke trend by growing $3 billion to $6.814 trillion.   

In Fed news, on Thursday, the NY Fed released a report saying that consumer credit only rose modestly in Q4.  The report said, “Consumers are in pretty good shape in terms of the household debt landscape, largely driven by stable balances and solid performance in mortgage loans.  However, for auto loans, higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum.”  In terms of numbers, the report said credit card balances rose $45 billion from the prior quarter to $1.21 trillion, while mortgage balances ticked up $11 billion to $12.61 trillion amid a rise in mortgage creation during the quarter. The report said that auto loan balances rose by $11 billion to $1.66 trillion versus the prior quarter.

After the close, AEM, AL, ABNB, AMAT, BFAM, CAE, COIN, DVA, GT, LEG, MSI, ROKU, and WYNN all reported beats on both the revenue and earnings lines.  At the same time, AEE, DXCM, GDDY, PANW, RWT, and TWLO reported beats on revenue while missing on earnings.  On the other side, DLR, IR, and RSG missed on revenue while beating on earnings.   However, BIO and DKNG missed on both the top and bottom lines.

Overnight, Asian markets were mixed with six of the 12 exchanges green and the other half red.  Hong Kong (+3.69%) was by far the biggest mover and led the gainers while Taiwan (-1.05%) paced the losses. In Europe, the bourses are mostly green at midday.  The CAC (+0.42%), DAX (-0.27%), and FTSE (-0.16%) lead the nine green to five red exchange ratio higher in early afternoon trade.  Meanwhile, in the US, Futures are pointing to a down start to the day.  DIA implies a -0.26% open, the SPY is implying a -0.15% open, and QQQ implies a -0.17% open at this hour.  At the same time, 10-Year Bond Yields are up to 4.537% and Oil (WTI) is up three-quarters of a percent to $71.86 per barrel in early trading.

The major economic news scheduled for Friday includes Jan. Core Retail Sales, Jan. Retail Sales, Jan. Export Price Index, and Jan. Import Price Index (all at 8:30 a.m.), Jan. Industrial Production (9:15 a.m.), Dec. Business Inventories and Dec. Retail Inventories (both at 10 a.m.).  The major earnings reports scheduled for before the open include AMCX, AEE, AXL, BGC, ENB, FTS, MGA, MRNA, NMRK, POR, TRP, and THS.  Then after the close, there are no reports scheduled. 

So far this morning, ENB, FNMA, MGA, MRNA, POR, and TRP reported beats on both the revenue and earnings lines.  Meanwhile, FTS beat on revenue while missing on the earnings line. On the other side THS missed on revenue while beating on earnings. However,  AMCX missed on both the top and bottom lines.

With that background, it looks like the market is modestly lower to start the morning. All three major index ETFs are printing black candles. However, only DIA has a significant candle body, but even it has not quite retested its T-line (8ema) yet.  So, at this time, all three remain above their T-line, meaning the short-term trend is modestly bullish. The mid-term trend remains a choppy sideways mess. At the same time, the long-term trend remains bullish.  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, six of the 10 are in the red with AMZN (-0.35%) pacing the losses.  On the other side, INTC (+1.95%) is by far the biggest mover and leads the gainers.  As far as liquidity goes, TSLA (+1.36%) has traded twice as much dollar volume as NVDA (-0.05%), which itself has traded twice as much as INTC (which has traded three times as much dollar-volume as the next most active ticker). However, it is worth noting that this is still a light volume early session overall.  Finally, remember this is Friday…ahead of a 3-day Weekend.  So, prepare your account for the layoff.

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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