Markets jumped higher on Tuesday.  SPY gapped up 0.52%, DIA gapped up 0.41%, and QQQ gapped up 0.54%.  From there was saw a little divergence.  QQQ sold off and recrossed its gap within the first 30 minutes, reaching the lows by 10:20 a.m. At that point, it rallied until 1 p.m. before drifting lower until 3 p.m. and grinding sideways into the close.  Meanwhile, SPY sold off much more mildly only getting back into the middle of its gap by 10:15 a.m. before starting a long, steady rally until 1:20 p.m.  From there it traded sideways all afternoon.  For its part, unlike the other two, DIA rallied from the open in a slow, steady climb the tempered during the afternoon but continued higher the last 90 minutes.  This action gave us a gap-up, white-bodied Hanging Man type candle.  DIA printed a gap-up, white-bodied large candle (which could be said to be part of a “Trader’s Best Friend” pattern).  However, QQQ printed a gap-up, black-bodied, long-legged Doji. 

On the day, all 10 of the sectors were in the green with Industrials (+2.14%) and Healthcare (+2.03%) leading the charge higher.  On the other side, Energy (+0.03%) was by far the laggard sector.  At the same time, SPY gained 0.92%, DIA gained 1.24%, and QQQ gained 0.59%.  Meanwhile, VXX dropped another 4.21% to close at 42.11 while T2122 climbed even higher into the top half of its overbought range, closing at 95.85.  On the bond side, 10-Year Bond yields plummeted to 4.564% and Oil (WTI) dropped another 2.30% to $76.09 per barrel.  (Much of the last two numbers can be attributed to a HUGE move lower by the US Dollar.)  So, Monday saw the Bulls gap markets higher, show some uncertainty, but then rally most of the day.  It appeared as if traders may have been reassured by the Trump administration holding off on tariffs so far and his initial moves to prop up the already strong oil and gas sectors while bypassing climate and environmental policies/laws.  This all happened on well-below-average volume in all three major index ETFs.   

There was no major economic news on Tuesday.

There was no Fed news on Tuesday either.

After the close, COF, HWC, IBKR, NFLX, STX, UAL, WTFC, and ZION all reported beats on both the revenue and earnings lines.

Overnight, Asian markets were mostly green.  Hong Kong (-.163%) was by far the biggest of the four losing exchanges.  Meanwhile, Japan (+1.58%), South Korea (+1.15%), and Taiwan (+0.97%) led the gainers.  In Europe, with two small exchange exceptions we see green across the board at midday.  The CAC (+1.24%), DAX (+1.32%), and lagging FTSE (+0.29%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  DIA implies a +0.38% open, the SPY is implying a +0.47% open, and QQQ implies a +0.87% open at this hour.  At the same time, 10-Year Bond Yields are at 4.578% and Oil (WTI) is up two-tenths of a percent to $75.99 per barrel in early trading.

The major economic news scheduled for Wednesday is limited to the US Leading Economic Index (10 a.m.) and the API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports scheduled for before the open include ABT, ALLY, APH, CMA, GEV, HAL, HDB, JNJ, PG, TEL, TDY, TXT, and TRV. Then, after the close, AA, CACI, DFS, KMI, KNX, PLXS, and STLD report.

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, EIA Weekly Crude Oil Inventories, and the Fed Balance Sheet are reported.  Finally, on Friday, we get S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI, Dec. Existing Home Sales, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations.

In terms of earnings reports later this week, Thursday, ALK, AAL, ELV, FCX, GE, HBAN, MKC, NTRS, ORI, TAL, UNP, COLB, CSX, EWBC, ISRG, and TXN report.  Finally, on Friday, we hear from AXP, ERIC, HCA, NEE, and VZ.

So far this morning, ALLY, BKU, CBSH, FNB, HDB, PG, and TDY have all reported beats on both the revenue and earnings lines.  Meanwhile, ABT, HAL, JNJ, TEL, TXT and TRV all missed on revenue while beating on earnings.  On the other side, CMA beat on revenue while missing on earnings.  However, GEV missed on both the top and bottom lines.

With that background, it looks like the Bulls want to run this morning.  All three major index ETFs gapped up to start the premarket and all three have given us a white-body candle since that point.  SPY and DIA are printing mostly-body candles while QQQ is giving us a small Spinning Top type candle so far in the early session.  With that said, all three are well above their T-line (8ema) and thus the short-term trend is bullish.  All three have also broken mid-term downtrend lines (running back to the mid-December all-time highs). However, they have not printed the higher-highs and higher-lows to confirm an uptrend (just continually gapping higher).  So, downtrends are broken, but a new bullish trend hasn’t been established.  In the long-term all three are bullish.  In terms of extension, all three are now stretched above their T-line at this point.  For its part, T2122 is also in the top part of its overbought range. So, we are in need of a pause or pullback to keep the rally healthy.  However, the market can remain over-extended longer than any of us can stay solvent betting on a reversal too soon.  In terms of the 10 Big Dogs, seven of the 10 are in the green with NFLX (+14.45%) way, way out in front due to last night’s earnings beat.  Meanwhile, TSLA (-1.16%) is by far the laggard.  Related to volume, NVDA (+3.02%) is leading the way, having traded 1.5  times as much dollar-volume as TSLA, which itself has traded 1.5 times as much as NFLX. 

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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