On Tuesday, all three major indices opened flat.  Markets then treaded water until 10 am, when the bears sold us off very hard for 15 minutes as Fed Chair Powell’s remarks were absorbed.  From that point (10:15 am), we saw a slow, meandering selloff the rest of the day, closing near the lows.  This action gave us large, black-bodied candles which completed Evening Star-type signals in the SPY, DIA, and QQQ.  The SPY and DIA both crossed back below their T-lines (8ema), while the QQQ is still right at that retest.  SPY is also back down to retest its 50sma.

On the day, all 10 sectors were in the red with Basic Materials (-2.36%) led the way lower, while Industrials (-0.99%) and Technology (-1.03%) held up better than the other sectors.  At the same time, the SPY was down 1.52%, the DIA was down 1.70%, and QQQ was down 1.23%.  The VXX rose 2.40% to 43.87 (after a 1-for-4 split) and T2122 dropped back deep into the oversold territory at 9.59.  10-year bond yields climbed to 3.968% and Oil (WTI) plummeted 3.82% to $77.39 per barrel.  So, Tuesday was a “wait and see” day that was then owned by the bears once Fed Chair Powell delivered his remarks and answered questions.

In economic news, Fed Chair Powell’s testimony before the Senate stole the show.  In his remarks, Powell said US interest rates will probably have to rise further than the Fed previously thought in order to tame inflation.  He also said that (if the totality of the data were to indicate faster tightening was warranted) “we would be prepared to increase the pace of rate hikes.”  Further, he said that FOMC policy will need to stay restrictive “for some time” and ”the historical record cautions strongly against prematurely loosening policy.”  This testimony flipped market bets, which had been strongly predicting a 25-basis-point hike in March but which now show 29.5% of bets are on a quarter-point hike and 70.5% are betting on a half-percent increase.  Later, during questioning, Powell said a US debt default would have dire consequences for the economy and would likely cause long-lasting harm.  Specifically, he said “Congress really needs to raise the debt ceiling.  If we fail to do so, I think the consequences could be…extraordinarily adverse and could do long-lasting harm.”  Other questions focused on each political party’s pet agenda items, but most were not noteworthy.  Then, after the close, the API Weekly Crude Oil Stocks Report came in with a larger drawdown than expected.  API reported the draw was 3.835 million barrels (compared to an expected drawdown of 0.308 million barrels and the prior week’s inventor build of 6.203 million barrels).

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In stock news, MULN announced it will be unveiling both an electric cargo van and a class 3 low-cab truck this week at an Indianapolis truck show.  Elsewhere, ON shares gained Tuesday after announcing a long-term deal to supply technology to BMW for the carmaker’s electric vehicles. Meanwhile, Reuters reported that BA is facing delivery problems for both 767 freighters and KC-46 tanker planes.  The issue centers around center fuel tanks made by TGI, which had not completed cleaning and paint adhesion processes prior to delivering the components.  The problem will significantly impact deliveries of 30-40 aircraft. At the same time, BX and TRI are selling $2 billion worth of their holdings in the London Stock Exchange to raise cash for other projects. In the Auto industry, TSLA CEO Musk announced Tuesday the company’s next-generation small car “would operate mostly autonomously.”  (However, this is the same claim he has made for many years.)  After hours, Reuters reported that WE is in talks with investors to restructure more than $3 billion in existing debt as well as looking to raise more cash from those investors.  Finally, FDIC officials spent Tuesday at SI, looking for ways to save at least part of the bank.

In stock legal and regulatory news, META failed to get a lawsuit thrown out Tuesday and will need to proceed to trial.  The suit alleges META stole confidential information from AI startup Neural Magic.  As of last year’s filing, Neural Magic was seeking $766 million, but that number has likely skyrocketed as META recently rolled our new AI features. In possibly related news, the META AI model (LLaMa) leaked online Tuesday and was available for anyone to download the code.   Elsewhere, a panel of US federal appellate judges questioned whether the SEC should have rejected the application by Grayscale to convert its GBTC into a Bitcoin spot-price ETF.  (A ruling is not expected until the fall.)  Meanwhile, as expected, the Dept. of Justice filed suit to stop the JBLU acquisition of SAVE on grounds it violates antitrust interests. At the same time, Reuters reports that AMD and NVDA are scrambling to determine whether they need to halt product sales to Chinese-listed Inspur Group after that company was added to the US export blacklist.  (Inspur is the third-largest supplier of servers in the world as of Q3 and, therefore, would be a major customer for both NVDA and AMD.)  It is unclear if INTC also supplies Inspur.  Finally, Bloomberg reported that AMZN has defeated an attempt by employees to sue as a group as they try to recoup internet expenses they incurred while working from home during the pandemic.

After the close, CRWD, CRGY, and MBC all reported beats on both the revenue and earnings lines.  Meanwhile, CASY missed on revenue while beating (significantly) on the earnings line.  It is worth noting that CRWD raised its forward guidance.

Overnight, Asian markets leaned heavily to the downside.  Hong Kong (-2.35%) and South Korea (-1.28%) were by far the largest losers and led the region south.  Still, Japan (+0.48%) and India (+0.24%) managed to eke our gains.  Meanwhile, in Europe, the bourses are mixed but the red outnumbers the green on the board at midday.  The FTSE (-0.07%), DAX (+0.30%), and CAC (-0.08%) are typical of the region in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a start just on the green side of flat.  The DIA implies a +0.08% open, the SPY is implying a +0.09% open, and the QQQ implies a +0.15% open at this hour.  At the same time, 10-year bond yields are up to 3.972% and Oil (WTI) is off fractionally to $77.42/barrel in early trading.

The major economic news events scheduled for Wednesday include ADP February Nonfarm Employment Change (8:15 am), January Imports/Exports and January Trade Balance (both at 8:30 am), Fed Chair Powell testifies before Congress again and Jan. JOLTs Job Openings are reported (both at 10 am), EIA Crude Oil Inventories (10:30 am), WASDE Ag Report (noon), and Fed Beige Book (2pm).  Major earnings reports scheduled for the day include ABM, BF.A, CPB, GOL, KFY, LTH, REVG, and UNFI before the opening bell.  There are no major reports scheduled for after the close. 

In economic news later this week, on Thursday, Weekly Initial Jobless Claims are reported.  Finally, on Friday, we get Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Participation Rate, Feb. Unemployment Rate, and Feb. Federal Budget Balance.

In earnings news later this week, on Thursday, BJ, GBTG, JD, WLY, TTC, QFIN, DOCU, GPS, ORCL, ULTA, and MTN report.  Finally, on Friday, we hear from, ERJ.

So far this morning, CPB, KFY, and REVG have reported beats to both the revenue and earnings lines.  Meanwhile, ADDYY, ABM, and LTH all missed on the revenue line while beating on earnings.  On the other side, UNFI beat on revenue while missing on the earnings line.  (BF.A and BF.B report at 8 am.)  It is worth noting that UNFI has lowered its forward guidance while KFY raised its forward guidance.

In late-breaking news, after Powell’s remarks Tuesday, the bond market inversion has grown to the largest in more than four decades.  Talking heads are telling traders to brace for a full percent hike later this month, but the Fed Fund futures still don’t show that possibility as getting any betting.  (The Fedwatch tool shows a 26.5% probability of a quarter-point hike and a 73.5% probability of a half-percent hike.  So, no money even worth mentioning has been bet on three-quarters of a percent, let alone a full percent, hike on March 22.  Elsewhere, mortgage application volume increased 7.4% for the week with applications to refinance up 9% and new how purchase applications up 7%.  This came despite mortgage rates increasing to 6.79% (up from 6.71%) and points rising to 0.80 from 0.77 during the week (for a 30-year, fixed-rate, 20% down loan).  Finally, for the first time since 2016, a new nuclear reactor has come partially online (splitting atoms) in the US (GA).  The reactor is scheduled to be fully operational this summer.

With that background, it looks like the market is at least waiting on the morning data before showing any cards. Later, Fed Chair begins testifying (to the House this time) at 10 am. Do not expect him to say anything different from yesterday, but we may get a bit more political point-making from the House. Meanwhile, the downtrend is back in control after yesterday’s bearish signal, and the lower high (although it had broken the short-term downtrend line) in all three major indices. The T-line is still being tested in the QQQ, with the other indices being close enough they could be retested from below today. So, extension is no problem from the T-line standpoint. However, we are in the oversold area of T2122. As I see it, both SPY and DIA are at/in a potential support level. QQQ may have marginal support here, but it is far less obvious than in the large-cap indices.

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 absolutely 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 money is 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets made a modest gap higher at the open (up 0.24% in the SPY, up 0.12% in the DIA, and up 0.44% in the QQQ).  At that point, we had a small divergence as the bulls stepped in to lead a slow steady rally in the SPY and QQQ until 12:20 pm.  Meanwhile, the DIA bobbed sideways over that same time.  However, the bears got all three in sync when they stepped in at about 12:25 pm to take us on a slow decline that bottomed out at 3:30 pm with price right back at Friday’s closing level.  The last 30 minutes saw a minor rally up off the lows across the SPY, DIA, and QQQ.  This action gave us Shooting Star-type candles in all three major indices.  It happened on less-than-average volume in the SPY and DIA and slightly greater-than-average volume in the QQQ.

On the day, eight of the 10 sectors were in the red as Basic Materials (-1.98%) led the way lower, while Utilities (+0.43%) held up better than the other sectors.  At the same time, the SPY was up 0.07%, the DIA was up 0.14%, and QQQ was up 0.11%.  The VXX fell 1.74% to 10.71 and T2122 dropped back into the lower half of the midrange at 37.50.  10-year bond yields climbed all day after started down significantly to close at 3.964% and Oil (WTI) was up 1.02% to $80.49 per barrel.  So, overall, Monday was a bullish day all morning and a bearish day all afternoon, which ended up little changed.  Still, the omens were not good for the bulls, leaving that gap-up high wick in all three of the major indices.

In economic news, January Factory Orders came in down, but better than expected at -1.6% (compared to a forecast of -1.8% and the December reading of -1.7%). At the same time, the NY Fed released a report saying that after three years of turmoil, global supply chains are back to normal with pressures on supply chains falling into better reading (fewer problems) than at any time since August 2019.  Elsewhere, Natural Gas prices crashed Monday with the April front-month natural gas contract falling 14.5% after revised weather forecasts indicated mild temperatures ahead for the Spring in both the US and Europe.

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In stock news, the Wall Street Journal reported that PARA is considering the sale of its majority ownership of the BET and VH1 cable networks.  Elsewhere, DXCM shares fell hard Monday after rival ABT received FDA approval for two glucose monitoring and insulin delivery systems.  ABT said it is partnering with PODD, TNDM, and YPSN for launches in multiple countries.  Meanwhile, UIS and BBBY fell sharply after both were removed from the S&P 600 Small-Cap Index.   However, FICO was down slightly after being added to the S&P 500 (to replace LUMN which was moved to the Small-Cap 600 index and gained 4.1% on that move).  In other news, LMT said it has resumed testing on its “advanced” F-35 jets (after a stoppage due to a government delivery halt over an engine safety concern).  Separately, RTX was awarded a $5.2 billion contract to produce 278 engines for the F-35 (with a government option for up to buy up to 518 more engines).  After the close, Bloomberg reported the TSLA has lowered the price of the “Plaid” versions of its Model S and Model X cars by another 4.3% and 8.3% respectively.  At the same time, SCHW petitioned the SEC to withdraw its two recently proposed rules that would force all orders to be sent to auction and give customers the best possible execution of orders (essentially banning payment for order flow).  Finally, TEAM announced after hours that it will lay off 500 employees (5% of its workforce).

In stock legal and regulatory news, Bloomberg reported Monday that the US Dept. of Justice will file suit to prevent JBLU from acquiring SAVE on antitrust grounds.  (The $3.8 billion deal has been under fire related to ticket pricing and flight availability in the Northeast corridor.)  Bloomberg added that the US Dept. of Transportation is expected to launch parallel proceedings also intended to block the deal.  Elsewhere, the NHTSA has opened an investigation into AMZN’s self-certification of its Zoox robotaxi in 2022.  Meanwhile, the US Supreme Court again declined to settle a split among Appeals Courts over whether federal wage laws allow workers to bring nationwide class-action type lawsuits when it refused to hear a case from an FDX employee.  (Several companies had been pushing courts to limit lawsuits over wage issues, such as unpaid overtime, to cover only those employees in the single state where the suit was filed.  So, the court’s refusal to hear the case is a de facto ruling in favor of the position of companies…FDX in this case. Meaning, if a company does wrong, it must be sued in every state in order for the employees of all states to be made whole.)  After the close, FERC (Federal Energy Regulatory Commission) requested answers to another set of questions from the Freeport LNG export facility in Texas, before it will be allowed to restart full commercial operations.  (The plant had already begun a partial restart after eight months of outage following a fire and explosion.)   Finally, after hours, RIO agreed to pay the SEC a $15 million civil penalty for bribing officials in Guinea in order to retain mining rights.

In miscellaneous news, on Saturday San Francisco Fed President Daly said the Jan. inflation data “suggests the disinflation momentum we need is far from certain.”  She went on to suggest that “tighter (Fed) policy, for a longer time, is likely needed,” but she did not speak to specific policy moves other than to suggest she thinks the 5.1% terminal projection made in December will be revised upward.  Elsewhere, on Sunday, the Chinese government set a slightly lower annual growth target compared to 2022.  China is looking for GDP growth of 5% according to a report released at the opening of the country’s annual parliament meeting.  This compares to the 2022 target of 5.5%.  Meanwhile, also Saturday, it was reported that F had filed a patent application for technology that remotely disables heating/air conditioning, radio, and ultimately the car itself if the customer fails to make lease payments on time.  The patent also includes a feature for self-driving cars to return themselves to F impound lots.  However, F says it has no (current?) plans to deploy these technologies itself.  (Still, I be there are a lot of banks that would like to have those features installed.)  Finally, the FDA rejected an application from Elon Musk’s Neuralink, which had wanted to start testing its brain implants in humans.

Overnight, Asian markets were mostly in the green on modest moves, with the exception of China.  Shenzhen (-1.98%), Shanghai (-1.11%), and Hong Kong (-0.33%) were the only red in the region.  Meanwhile, Thailand (+0.72%), India (+0.67%), and Australian (+0.49%) led the rest of the region higher.  Over in Europe, the bourses are evenly split between red and green bourses at midday.  The FTSE (+0.24%), DAX (+0.11%), and CAC (+0.12%) lead the region on volume (as always).  However, it looks like Europe is just as eager for another clue from Fed Chair Powell as the US markets.  As of 7:30 am, US Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.02% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.22% open at this hour.  At the same time, 10-year bond yields are down to 3.94% and Oil (WTI) is off six-tenths of a percent to $79.96/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Fed Chair Powell testifying before Congress (10 am) and then the API Weekly Crude Oil Stocks Report is released at 4:30 pm.  Major earnings reports scheduled for the day are limited to DKS, DOLE, ESAB, FERG, SE, and THO before the opening bell. Then, after the close, CASY, CRGY, and CRWD report. 

In economic news later this week, on Wednesday, we get ADP February Nonfarm Employment Change, Jan. Imports and Exports, Jan. Trade Balance, Fed Chair Powell testifies before Congress again, Jan. JOLTs Job Openings, EIA Crude Oil Inventories, WASDE Ag Report, and Fed Beige Book. On Thursday, Weekly Initial Jobless Claims are reported.  Finally, on Friday, we get Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Participation Rate, Feb. Unemployment Rate, and Feb. Federal Budget Balance.

In earnings news later this week, on Wednesday, we hear from, ABM, BF.A, CPB, GOL, KFY, LTH, and REVG.  On Thursday, BJ, GBTG, JD, WLY, TTC, QFIN, DOCU, GPS, ORCL, ULTA, and MTN report.  Finally, on Friday, we hear from, ERJ.

So far this morning, DKS, DOLE, SE, and ESAB have all reported beats to the revenue and earnings lines.  Meanwhile, THO missed on both the top and bottom lines.  It is worth noting that THO lowered its forward guidance while DKS raised its guidance.  It is also worth noting that DKS crushed expectations with more than double the same-store sales growth in Q4 than analysts had expected.

In late-breaking news, Bloomberg reports META will lay off thousands more employees as soon as later this week.  Elsewhere, BBY has entered a new market, by striking a deal with Atrium Health.  This will expand the BBY “Geek Squad” offering to include the delivery and setup of durable medical equipment (DME) such as heart monitors, vitals, oxygen delivery, etc.

With that background, it looks like the market remains undecided and is waiting on guidance from Fed Chair Powell. So, beware volatility as his opening statement is released and then he begins his testimony at 10 am. Meanwhile, the recent downtrend line remains broken in all three major indicies. However, their 3-day upward move is not very secure either. We definitely have not put in a new higher-low to signal a bullish trend yet. We have no problem with extension (either according to T2122, or the T-line). As I see it, we remain basically at the same place we were in premarket Monday. The DIA is testing a potential resistance level, SPY has a little room to run before hitting its next resistance level, and QQQ has the most headroom above before hitting its next potential resistance level. DIA also has its 50sma just overhead and you could draw a longer-term downtrend just above in the QQQ. Continue to be careful in an unsettled market (especially where the Fed wants to raise expectations for their terminal rate and tamp down any hope for a rate cut this year). (With that said, current Fed Fund Futures say there is a 70.8% probability of a quarter-point hike in two weeks while 29.2% are betting on a half-point hike. Not a single sole has bought futures to indicate they are betting on either no hike or a larger than half-percent hike.)

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets gapped modestly higher at the open Friday.  The SPY gapped up 0.45%, the DIA gapped up 0.32%, and the QQQ gapped up 0.59%.  After that, with the exception of some volatility the first 40 minutes, the bulls were in control in all three major indices.  We saw a slow, steady rally the rest of the day, which closed near very the high.  This action gave us gap-up, large, white-bodied candles with small lower wicks and almost no upper wick.  All three of the major indices crossed back above their T-line (8ema) and the DIA is back up very near a retest of its 50sma. 

On the day, all 10 sectors were in the green with Technology (+2.09%) leading the way higher and Consumer Defensive (+0.39%) lagging behind the other sectors.  At the same time, the SPY was up 1.60%, the DIA was up 1.14%, and QQQ was up 2.07%.  The VXX fell almost 3% to 10.90 and T2122 spiked higher into the edge of overbought territory at 83.16.  10-year bond yields dropped back below the key 4% level to 3.958% and Oil (WTI) jumped up 2.16% to $79.85 per barrel.  So, overall, Friday was a risk-on, bullish day with a slow, steady gain all across the market and all day long.  This all happened on greater-than-average volume in both the SPY and QQQ but a little less-than-average volume in the DIA.

In economic news, the February S&P Global Composite PMI came in slightly below the expectation at 50.1 (compared to a forecast of 50.2 but above the January reading of 46.8).  At the same time, the February US Services PMI came in slightly above the anticipated level at 50.6 (versus the forecast of 50.5 and well above the January value of 46.8).  Moments later, the ISM February non-Mfg. PMI also came in above forecast at 55.1 (compared to an expected value of 54.5 but still slightly below the January reading of 55.2).  So, overall, the data suggest the global economy is just slightly less strong than anticipated (but still expanding), but the US economy was a bit stronger than expected last month.  Finally, on the Fed front, Richmond Fed President Barkin said Friday that he doesn’t see a case for a rate pause yet.  He also said he could see the terminal Fed Funds rate reaching 5.5%-5.75%.  However, Barkin also called for the Fed to “move more deliberately (smaller hikes) than we did last year.”

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In stock news, on Friday, AMZN announced it will push back the start of construction of its new Virginia second headquarters. No timetable was given for the resumption of the project that was expected to create 25,000 jobs.  Elsewhere, META announced price cuts on its VR Headsets ($1499 to $999 and $499 to $429) in an effort to stimulate demand.  At nearly the same time, Bloomberg reported that RIVN executives have been telling employees the company could produce 62,000 electric vehicles in 2023.  However, the company denied the report and said its forecast of 50,000 vehicles for the year still stands.  Later, TSM told Reuters they will be hiring more than 6,000 new engineers in 2023.  However, those new jobs are mainly for their Taiwanese facilities.  Meanwhile, NVDA said the Biden Administration limiting items it authorizes to sell to Huawei is likely to have a “high economic impact” on NVDA.  Reuters reported that QCOM will also suffer moderate economic impact from the decision.  After hours, SI announced they are discontinuing its crypto payment exchange network effective immediately.  The company said it was a “risk-based decision” after serious doubts had been raised earlier in the week as to whether SI could remain afloat.  On Saturday, Sky News (UK) reported that GS is among the suitors interested in acquiring the Subway sandwich chain.  Subway was put up for sale at a $10 billion price tag last week.

In stock legal and regulatory news, on Saturday, the HHTSA announced that TSLA has recalled about 3.500 Model Y cars over loose bolts securing second-row seat frames.  On Sunday, Investing.com reported on how the EU is expected to rule on two deals.  It reports that sources tell them the EU will approve the MSFT $69 billion acquisition of ATVI.  However, AVGO is expected to receive an antitrust warning over the impact of its $61 billion acquisition of VMW.  This likely means AVGO will need to propose remedies to the EU concerns in order to move forward.  Ohio reported Saturday that another NSF train derailed in the state, this time in the Western half of the state.  NSF reports that there were no hazardous materials on the train, although authorities had residents shelter in place as a precaution and the accident caused power outages in the area after taking out power lines.

In miscellaneous news, on Saturday San Francisco Fed President Daly said the Jan. inflation data “suggests the disinflation momentum we need is far from certain.”  She went on to suggest that “tighter (Fed) policy, for a longer time, is likely needed,” but she did not speak to specific policy moves other than to suggest she thinks the 5.1% terminal projection made in December will be revised upward.  Elsewhere, on Sunday, the Chinese government set a slightly lower annual growth target compared to 2022.  China is looking for GDP growth of 5% according to a report released at the opening of the country’s annual parliament meeting.  This compares to the 2022 target of 5.5%.  Meanwhile, also Saturday, it was reported that F had filed a patent application for technology that remotely disables heating/air conditioning, radio, and ultimately the car itself if the customer fails to make lease payments on time.  The patent also includes a feature for self-driving cars to return themselves to F impound lots.  However, F says it has no (current?) plans to deploy these technologies itself.  (Still, I be there are a lot of banks that would like to have those features installed.)  Finally, the FDA rejected an application from Elon Musk’s Neuralink, which had wanted to start testing its brain implants in humans.

Overnight, Asian markets were mixed but leaned to the green side.  South Korea (+1.20%), Japan (+1.11%), and Taiwan (+0.99%) led the region higher.  Meanwhile, in Europe, markets are even more mixed and lean to the red side at midday.  The FTSE (-0.60%), DAX (+0.19%), and CAC (+0.17%) lead the region on volume.  However, Russia (+0.88%), and outlier Greece (-3.26%) are the biggest movers in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed and flat start to the day.  The DIA implies a -0.10% open, the SPY is implying a -0.07% open, and the QQQ implies a +0.01% open at this hour.  At the same time, 10-year bond yields are down briskly to 3.921% and Oil (WTI) is off 1.44% to $78.53/barrel in early trading.

The major economic news events scheduled for Monday is limited to January Factory Orders (10 am).  Major earnings reports scheduled for the day are limited to CIEN and AZUL before the opening bell.  Then, after the close, TCOM, NTNX, BBAR, and PTVE report. 

In economic news later this week, on Tuesday, Fed Chair Powell testifies before Congress and then we get API Weekly Crude Oil Stocks Report is released.  On Wednesday, we get ADP February Nonfarm Employment Change, Jan. Imports and Exports, Jan. Trade Balance, Fed Chair Powell testifies before Congress again, Jan. JOLTs Job Openings, EIA Crude Oil Inventories, WASDE Ag Report, and Fed Beige Book. On Thursday, Weekly Initial Jobless Claims are reported.  Finally, on Friday, we get Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Participation Rate, Feb. Unemployment Rate, and Feb. Federal Budget Balance.

In earnings news later this week, on Tuesday, DKS, DOLE, ESAB, FERG, SE, THO, CASY, CRGY, and CRWD report.  The Wednesday, we hear from, ABM, BF.A, CPB, GOL, KFY, LTH, and REVG.  On Thursday, BJ, GBTG, JD, WLY, TTC, QFIN, DOCU, GPS, ORCL, ULTA, and MTN report.  Finally, on Friday, we hear from, ERJ.

So far this morning, CIEN reported beats on both the revenue and earnings lines.  (AZUL has no specific announcement time other than BMO.)

In late-breaking news, Bloomberg reports that Harris Associates (long the largest holder of CS stock) sold its entire stake in the Swiss bank over the last 3-4 months.  (Harris had held more than 10% of CS stock last year.)  In other banking news, UBS announced it is cutting employee bonuses by 10% while simultaneously raising the pay of CEO Hammers.  Elsewhere, President Biden is expected to veto the Republican bill that would ban funds from even considering a company’s ESG record when deciding which stocks to buy. (The truth is that the E is the only record that mattered as massive amounts of donations and lobbying in support of the bill came from the oil and gas industry.) It appears there will not be enough votes to override a veto. So, this is a win-win for Washington as Senators and Congressmen can tell their backers that they tried and yet funds will still be able to consider a company’s environmental record and risk when deciding whether to invest in it.

With that background, it looks like the market is undecided to start the week after Friday’s strong move by the bulls. With so much market-moving jobs data coming this week, it seems traders may be waiting on a Fed clue from Chair Powell’s testimony to the Senate Tuesday (and maybe House on Wednesday) before increasing or changing their bets. The recent downtrend line is broken in all three major indicies. However, we have not had a new higher-low to signal a bullish trend yet. Extension is not a problem according to T2122, or, of course, the T-line. As I see it, the DIA is testing a potential resistance level, SPY has a little room to run before hitting its next resistance level, and QQQ has the most headroom above before hitting its next potential resistance level. DIA also has its 50sma just overhead. Continue to be careful in an unsettled market (especially where the Fed wants to raise expectations for their terminal rate and tamp down any hope for a rate cut this year). (With that said, current Fed Fund Futures say there is a 69.4% probability of a quarter-point hike in two weeks while 30.6% are betting on a half-point hike. Not a single sole has bought futures to indicate they are betting on either no hike or a larger than half-percent hike.)

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets diverged at the open Thursday.  The SPY gapped down 0.52%, QQQ gapped down 0.92%, but DIA gapped slightly to the upside by 0.16%.  After the open, all three of the major indices led a slow rally until 1:30 pm.  At that point, the bulls stepped in to really stoke the rally for half an hour.  Then from 2 pm, markets ground sideways in a very tight range until about 3:15 when another leg of the rally started taking us to the highs of the day at 3:40 pm.  However, we did see profit-taking in the last 20 minutes.  This action gave us large-body, white candles with small upper wicks in all three major indices.  The QQQ and SPY printed a Bullish Engulfing Signals (SPY engulfing a Doji), and the DIA gave us a Morning Star-type candle.  The SPY and DIA both retested their T-lines (8ema) and closed just below that level.

On the day, eight of the 10 sectors were in the green with Utilities (+1.32%) leading the way higher and the Financial Services (-0.61%) lagging behind the other sectors.  At the same time, the SPY was up 0.74%, the DIA was up 1.04%, and QQQ was up 0.83%.  The VXX fell 3.61% to 11.23 and T2122 climbed higher into the midrange to 42.73.  10-year bond yields spiked over the key 4% level to 4.062% and Oil (WTI) was up 0.33% to $77.95 per barrel.  So, overall, Thursday saw a gap down and, after that, it was a bullish market all day long.  This all happened on less-than-average volume across the board.

In economic news, the Weekly Initial Jobless Claims came in slightly below expectation at 190k (compared to a forecast of 195k and the previous week’s reading of 192k).  At the same time, Q4 Nonfarm Productivity printed far below projection at 1.7% (versus a forecast of 2.6% but at least better than the prior quarter value of 1.4%).  This was mainly a result of the Q4 Unit Labor Cost coming in twice as high as expected at 3.2% (compared to the forecast of 1.6% and the Q3 reading of +2.0%).  After the close, Atlanta Fed President Bostic (non-voter) ruled out supporting any return to aggressive FOMC rate hikes and also touted a pause in hikes by summer.  He told a roundtable that “right now, I am firmly in the quarter-point move camp.”  Meanwhile, Fed Governor Waller’s (voter) post-market videoconference presentation was canceled after that Zoom call was “Porn Bombed.”  However, some of his remarks were pre-released, and said he supports raising the projected terminal rate of the Fed Funds to 5.1%-5.4%.

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In stock news, WMT announced it had 32 Walmart Healthcare Centers at the end of 2022, is opening 17 new ones this year and plans to add 28 new healthcare centers in 2024.  Elsewhere, F recalled 98,500 Ranger trucks over the replacement of airbag inflators.  However, F also said it will restart production of the F-150 Lightning electric truck on March 13 (after F had halted that production in early February following a battery fire).  Meanwhile, BX defaulted on a $562.5 million bond Thursday that was backed by a portfolio of offices and stores in Europe.  In the crypto space, a number of major cryptocurrency companies (including COIN) dropped SI as their banking partner Thursday after SI’s most recent earnings report cast doubt on the company’s ability to stay afloat.  In other downbeat news, Bloomberg reported that C is cutting hundreds of jobs (just less than 1% of its total workforce).  After the close, the state of NV released news that it has approved a new $330 million tax abatement for TSLA after it had said it will invest $3.6 billion in the state to expand its Gigafactory complex in that state.  In executive news, the Wall Street Journal reported after the close that the CEO of WMT (McMillon) plans to stay in that role for at least three more years.  Finally, the Biden Administration is expected to announce another $400 million aid package to Ukraine today.  The package is expected to include HIMARS (made by LMT), GMLRS rockets (made by NOC), and ammunition for the Bradley fighting vehicle (made by BAESY).

In stock legal and regulatory news, GOOGL has won an appeal to the US 9^th Circuit Court where users of “Chrome Incognito Mode” had sued for $5 billion in damages as a class action when it made public that this mode does not make browsing private and anonymous.  The trial will go on in November, but the class-action status was denied, which will severely limit the number of claims and greatly reduce any plaintiff award.  Elsewhere, a US Bankruptcy judge criticized the SEC for its “vague doubts” about a proposed purchase of defunct crypto lender Voyager Digital by Binance.  However, even if the judge approves the $1.3 billion purchase, the deal can’t proceed until the SEC approves it and the SEC has said Voyager Digital’s lending business involves the sale of unregistered securities.  Meanwhile, the US 2^nd Circuit Court of Appeals ruled that the founder of APO cannot revive a conspiracy lawsuit accusing his co-founder (and others) of conspiring to destroy his reputation.  At the same time, across the pond, Reuters reported that sources tell it that MSFT will get EU approval for the long-delayed acquisition of ATVI.  Finally, the seven major US railroads (CP, CSX, KSU, UNP, NSC, BRKB’s subsidiary BNSF, and CNI) agreed to join a voluntary “Close Call Reporting System” after the notoriety brought by the NSC crash and chemical spill in East Palestine OH.  This move was aimed at avoiding mandatory reporting regulations from the NTSB or Transportation Dept.

After the close, DELL, AVGO, HPE, VMW, VSCO, COO, and VVX all reported beats on both the revenue and earnings lines.  Meanwhile, COST and JWN both missed on the revenue line while beating one earnings. On the other side, MRVL beat on revenue while missing on earnings.  There were no major misses on both the top and bottom lines.  It is worth noting that AVGO and COO both raised their forward guidance.  However, DELL, VVX, and MRVL lowered their forward guidance.

Overnight, Asian markets were mixed but leaned to the green side.  India (+1.57%), and Japan (+1.56%) were far and away the biggest winners on the day.  Meanwhile, Thailand (-0.36%), New Zealand (-0.27%), Malaysia (-0.13%), and Singapore (-0.09%) were the only red in the region.  In Europe, we see a heavily green lean at midday.  Only Greece (-0.55%), and Switzerland (-0.05%) show any red, while the FTSE (+0.15%) also lags a bit.  The DAX (+1.11%) and CAC (+0.83%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest gap higher to start the day.  The DIA implies a +0.29% open, the SPY is implying a +0.41% open, and the QQQ implies a +0.46% open at this hour.  At the same time, 10-year bond yields have backed off slightly (but remain above the key 4% level) at 4.013%, and Oil (WTI) is off half a percent to $77.78/barrel in early trading.

The major economic news events scheduled for Friday are limited to Feb. Services PMI and S&P Global Composite PMI (both at 9:45 am), and ISM Non-Mfg. PMI (10 am), and we hear from 2 Fed speakers (Bostic at 11:45 am and Bowman at 3 pm). Major earnings reports scheduled for the day are limited to HIBB before the opening bell.  There are no major earnings reports after the close. 

So far this morning, HIBB missed on both the revenue and earnings lines.  It also lowered its forward guidance.

In late-breaking news, while the Fed has recently pushed back against the idea of a rate hike pause anytime soon and raising expectations for the terminal rate slightly, Europe continues to look for more dovish central bank policy. However, overnight a member of the ECB Governing Council pushed back just a bit against the widespread belief that the ECB’s terminal rate will be under 4%. However, he only pushed a tiny bit, saying “market bets for euro-area interest rates peaking at 4% may prove accurate if inflation remains elevated.” In much less cheery news, XOM now faces a lawsuit filed by the US EEOC (Equal Employment Opportunity Commission) after a black employee found another noose, the fifth to be found at the same facility. The suit alleges that XOM has failed to investigate previous the nooses and has failed to do enough to prevent other such events.

With that background, it looks like the bulls are retesting the T-line in all three major indices this morning in the premarket. If we open right here, we would be breaking the downtrend line in all three, but that does not mean a bullish trend would be started until we put in a high and a higher low. So, be leery of FOMO and chasing new bullish trades too early. There is no problem of extension according to T2122, or, of course, the T-line. As I see it, the QQQ has support just at the bottom of the premarket candle with plenty of room above before hitting the next potential resistance, SPY has a little room to move before hitting resistance at about $400 and change, and DIA has room to run up to about $336 before resistance. Remember the intraday reversals (like yesterday’s “gap and rally”) and don’t forget that its Friday. So, take profits, pay yourself, and prepare your account for the weekend news cycle.

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

The large-cap indices opened the day flat and then whipsawed their way sideways, having made no real progress by 12:45 pm.  However, the QQQ opened flat and then whipsawed its way South, reaching the lows of the day by 11:45 am before swinging back to reclaim most of the lost ground by 12:15 pm.  All three of the major indices then got into lock-step at 12:45 pm and sold off until 3 pm only to bob along not far up off the lows the rest of the day.  This action gave us Spinning Top type candles in the SPY, DIA, and QQQ, with the QQQ having the largest (black) body candle.  The SPY and QQQ had above-average volume while the DIA had a lower-than-average number of shares traded.

On the day, six of the 10 sectors were in the red with Utilities (-1.34%) leading the way lower and Energy (+1.63%) holding up better than the other sectors.  At the same time, the SPY was down 0.37%, the DIA was up 0.13%, and QQQ was down 0.80%.  The VXX rose almost 1% to 11.65 and T2122 climbed slightly to just outside the edge of the oversold territory to 20.78.  10-year bond yields spiked to 3.996% and Oil (WTI) was up 0.82% to $77.68 per barrel.  So, overall, Wednesday was an indecisive day filled with whipsaws.

In economic news, February Manufacturing PMI came in a bit below expectation at 47.3 (compared to a forecast of 47.8 but better than the January value of 46.9).  Just a few minutes later, the Feb. ISM Manufacturing PMI also came in below expectation at 47.7 (versus a forecast of 48.0 but slightly better than the January reading of 47.4).  At the same time, Feb. ISM Mfg. Prices came in significantly hotter than expected at 51.3 (compared to a forecast of 45.1 and a January value of 44.5).  Although these were not earth-moving indicators, they did show a modest slowdown in the economy while the inflation indication is not good.  Then the EIA Weekly Crude Oil Inventories came in with a larger build than forecast to +1.165 million barrels (versus a forecast of +0.457 million barrels but far, far better than the prior week’s build of 7.648 million barrels and even much better than Tuesday night’s API report of +6.203 million barrels).  This build in inventories offset record oil exports of 5.629 million barrels for the week.  Finally, the Fed speak was mixed on Wednesday.  Minneapolis Fed President Kashkari (voter) said he is leaning toward increasing his policy path (adding more rate hikes) but also that he had not made a final decision prior to the March meeting.  However, Atlanta Fed President Bostic released an essay later in the day that said he still feels the 5%-5.25% range would be adequate despite the recent high inflation readings.  The news from Bostic was that he now feels the Fed Funds Rate will need to be kept at that level into 2024.

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In stock news, Reuters reported Wednesday afternoon that US electric vehicle makers are seeing a drop in demand across the board.  The company cited sources at TSLA, RIVN, NKLA, FSR, and LCID as well as noting very public price cuts by TSLA.  It was quite interesting that the article did not mention the big auto brands GM, F, and STLA although the implication was that the slowdown was industry-wide.  In unrelated EV auto news, TSLA CEO Musk announced part 3 of his “TSLA Master Plan.”  He said the plan is to eventually cut the cost of vehicle production in half.  However, the focus of the plan was on “sustainable energy” and working with Musk’s other companies to replace the existing power grid with renewables and TSLA batteries.  Elsewhere, GOOGL’s Waymo self-driving unit laid off 137 employees in its second round of job cuts for 2023.  Meanwhile, LLY announced it will cut list prices for its most commonly prescribed insulin products by 70% and will begin offering $25/mo. insulin as of Q4 this year.  (They currently sell at around $275.)   In labor news, DAL pilots have ratified a new contract offering them a cumulative 34% pay increase.  AAL and UAL pilots have been conducting “informational pickets” amidst claims the companies are dragging out negotiations after publicly promising “industry-leading contracts” at the same time they have offered less than the DAL deal.  This is all part of a war for talent as the major airlines plan to hire over 8,000 new pilots in 2023 alone.

In stock legal and regulatory news, UBS lost its bid to have a lawsuit thrown out of court in London.  The suit will now proceed and claims UBS is liable for $500 million lost by two exiled Chinese businessmen when UBS forced them to sell Hong Kong shares at the height of a market rout in 2015.  Elsewhere, for the second time in two days, the FDA Advisory Board recommended that the FDA approve a respiratory virus vaccine.  This time the recommendation was for GSK’s competitor to the PFE vaccine recommended Tuesday and this time by a stronger 10-2 vote.  In other health-related news, BMY won a dismissal of a $6.4 billion lawsuit that had claimed the company had defrauded investors by delaying the submission of information to the FDA (and which delay allowed BMY to avoid paying shareholders in CELG the $6.4 billion as part of a contingency clause in the company purchase).  Meanwhile, OSHA announced it has opened an investigation into a death that occurred Tuesday at the MPC refinery in Texas City, TX. Elsewhere, a Delaware judge has thrown out a shareholder lawsuit against the MCD board claiming it was wrong to let former CEO Easterbrook keep $125 million in severance when he was fired for having a relationship with one of his employees.

After the close, CRM, SPLK, VEEV, SNOW, ADV, AEO, and OKTA all reported beats to both the revenue and earnings lines.  Meanwhile, PSTG and AAN both missed on revenue while beating on earnings.  On the other side, AIMC, AGL, CANO, LNW, and ERIE all beat on revenue while missing on earnings.  Unfortunately, GEF, JAZZ, and CODI missed on both the top and bottom lines.  It is worth noting that CRM, AGL, and OKTA raised their forward guidance. However, SPLK, PSTG, VEEV, and AAN lowered their forward guidance. (CRM is also notable for its big beats despite the fact they laid off more than 8,000 employees early this year, claiming they were unprofitable and fearing the economic climate.)

Overnight, Asian markets were mixed but leaned to the red side on mostly modest moves. Hong Kong (-0.92%), India (-0.74%), and Singapore (-0.62%) paced the losses while South Korea (+0.62%) and Malaysia (+0.36%) were the only appreciable gainers.  In Europe, we see a similar picture taking shape at midday.  The FTSE (-0.15%), DAX (-0.47%), and CAC (-0.04%) are typical of the region with 4-5 smaller exchanges in just into the green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed start to the day. The DIA implies a +0.18% open, the SPY is implying a -0.39% open, and the QQQ implies a -0.57% open at this hour.  At the same time, 10-year bond yields have crossed above the key 4% level to 4.038% and Oil (WTI) is up 0.37% to $77.99/barrel in early trading.

The major economic news events scheduled for Thursday include Q4 Unit Labor Cost,  Q4 Nonfarm Productivity, and Weekly Initial Jobless Claims (all at 8:30 am).  We also hear from Fed members Waller (4 pm) and Kashkari (6 pm).  Major earnings reports scheduled for the day include AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, and TD before the opening bell.  Then after the close, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO report. 

In economic news later this week, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.  In terms of earnings later in the week, on Friday, HIBB reports.

So far this morning, BBY, M, BURL, TD, PDYPY, SQM, CNQ, AER, and AMRX have reported beats on both the revenue and earnings lines.  Meanwhile, BUD, BIG, PDCO, and BILI missed on revenue while also beating on earnings.  On the other side, GMS and CPG beat on revenue while missing on earnings.  Unfortunately, HRL and STGW missed on both the top and bottom lines.  It is worth noting that BBY, HRL, BILI, and AMRX have all lowered their forward guidance.

In late-breaking news, TSLA took a beating overnight after Elon Musk’s “Master Plan Part 3” was long on platitudes, vagueries, and promises while being short on details, timing, and concrete steps. For example, he did not mention the long-promised (more than 2 years) $25k TSLA model. However, he did say the company has agreed to build a new plant in Mexico to build “the next generation of TSLA vehicles” (which implies the CA and TX plants have less of a role in the company’s future).

With that background, it looks like the bears want to keep pushing in the leading SPY and QQQ indices while the lagging DIA is looking to consolidate. The trend remains bearish and extension is not a problem yet in terms of T-line (8ema) or the T2122 indicator. As I see it, the SPY and especially QQQ have a little way to fall into their next support, but the DIA has minor support just below the premarket price. Respect the trend (the trend is the trend until it ends) and be aware of the potential for intraday whipsaw like we saw yesterday. Also remember the data dump at 8:30am if you are playing in the premarket.

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets opened basically flat on Tuesday.  The DIA sold off for 5 minutes while the other two major indices stayed held ground during that time.  Then all three of the major indices wandered up and down in a tight range until noon.  From noon until 2 pm, all three made a modest rally and this was matched by a two-hour selloff from 2 pm into the last 5 minutes of the day.  That last 5 minutes saw the strongest selling of the day.  This action gave us Inverted Hamer candles in the SPY and QQQ, with the QQQ failing a retest of its T-line (8ema).  However, DIA gave us a black-bodied, Marubozu (shaved head) candle with no wicks and closing on the lows. The QQQ had average volume, the SPY a little greater than average volume, and the DIA less-than-average volume for the session.

On the day, seven of the 10 sectors were in the red with Utilities (-1.63%) leading the way lower and Basic Materials (+0.55%) holding up better than the other sectors.  At the same time, the SPY was down 0.37%, the DIA was down 0.76%, and QQQ was down 0.13%.  The VXX fell 2.04% to 11.54 and T2122 dropped back down to the edge of the oversold territory to 19.92.  10-year bond yields were flat at 3.924% and Oil (WTI) was up almost 1.5% to $76.81 per barrel.  So, overall, Monday was an indecisive day in the SPY and QQQ with the last leg being a bearish move.  However, the DIA was decisively bearish all day.

In economic news, the January Goods Trade Balance grew as it came in at -$91.50 billion (up from -$89.67 billion in December).  January Retail Inventories also grew, coming in at +0.2% (compared to +0.1% in December).  Later in the morning, the Feb. Chicago PMI came in worse than expected at 43.6 (versus a forecast of 45.0 and the January reading of 44.3).  Shortly thereafter, the Conference Board Consumer Confidence also came in low at 102.9 (compared to a forecast of 108.5 as well as the January value of 106.0).  For those traders reading between the tea leaves, the increase in Retail Inventories, contraction value in the Chicago PMI, and decrease in Consumer Confidence (leading indicator) could be signs of a slowing economy…which a bull could read as an excuse for the Fed to not hike as much in March.  Then, after the close, the API Weekly Crude Oil Stocks were reported much higher than expected yet again at +6.203 million barrels (versus a forecast of +0.440 million barrels but improved over the prior week’s +9.895 million barrels).

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In stock news, AMAT unveiled a new semiconductor chip manufacturing tool Tuesday.  AMAT stock jumped on the news and main competitor ASML gapped lower. During the afternoon, GS told an investor conference that it is considering “strategic alternatives” for its consumer business.  (GS CEO Soloman and President Waldron both signaled the company is backing away from Main Street after the company had previously halted its unsecured lending and folded consumer business units into other divisions.)  Analysts really pressed GS execs hard at the event and the CEO seemed flustered. At the same time (but at a different event), CVX CEO Wirth said we could see consolidation among the 5 huge oil major players (CVX, XOM, BP, SHEL, and TTE).  However, he expects severe antitrust hurdles before it happens.  Meanwhile, the Wall Street Journal reports that APO is in talks to buy ARNC.  Later, Reuters reported that V and MA have both pushed back projects and slammed the breaks on partnerships with crypto firms after the bankruptcies of FTX and BlockFi in 2022. Then, after the close, the US Postal Service announced that it plans to buy 9,250 electric Transit vans from F starting later this year.  Their main competitor, GM, also announced after the close that it will lay off 500 salaried workers. Finally, also after the close, NVAX announced it is slashing spending and raised doubts about the ability of the company to remain solvent.

In stock legal and regulatory news, a US Federal District Judge sentenced GLNCY to pay just over $700 million ($428.5 million fine and $272 million forfeiture) after the company’s guilty plea in a decade-long scheme of bribing foreign officials.  While the fine met the plea agreement the company made with prosecutors, it was 15% below the US sentencing guidelines.  Later, the US Labor Dept. threw out exemptions put in place by the Trump Administration which had allowed Federal Contractors to be exempt from anti-discrimination laws.  Elsewhere, the Biden Administration announced on Tuesday that it will require companies winning funds from the $52 billion CHIPS Act to share “excess profits” in exchange for the tax credits and subsidies.  The Commerce Dept. plans to begin accepting applications for the funds in March and the main beneficiaries are expected to be INTC, AMD, NVDA, TSM, TXN, ADI, SWKS, MCHP, and MU.  Meanwhile, the FDA Advisory Board voted 7-4 to recommend a respiratory virus drug from PFE be authorized for older adults in the US. 

After the close, ROST, A, URBN, FRG, FSLR, GO, BGS, ICFI, IHRT, MASI, VZIO and VRSK all reported beats to both the revenue and earnings lines.  Meanwhile, HPQ, AMC, RKT, JXN, EXPI, RIVN, and CPNG missed on revenue while beating on the earnings line.  On the other side, SWX beat on revenue while missing on the earnings line.  Unfortunately, MNST, COMP, and EDR missed on both the top and bottom lines.  It’s worth noting that EDR raised its forward guidance while IHRT and GO both lowered their forward guidance.

Overnight, Asian markets were mixed but leaned heavily to the green side on very uneven moves.  Hong Kong (+4.21%), Shenzhen (+1.11%), and Shanghai (+1.00%) led the gainers.  Hong Kong’s jump came after a bunch of economic data indicated that China was reopening much faster than expected.  For example, the official PMI hit the highest level since 2012.  Meanwhile, in Europe, we see green across the board at midday with the sole exception of Portugal (-0.58%).  The FTSE (+0.88%), DAX (+0.58%), and CAC (+0.69%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing to a modestly green start to the day.  The DIA implies a +0.16% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.36% open at this hour.  At the same time, 10-year bond yields are up to 3.94% and Oil (WTI) is down 0.70% to $76.53/barrel in early trade.  (That’s odd that oil did not get the memo indicating China demand is roaring back.) 

The major economic news events scheduled for Wednesday, include Mfg. PMI (9:45 am), ISM Mfg. PMI (10 am), and EIA Crude Oil Inventory (10:30 am).  Major earnings reports scheduled for the day include ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, and WEN before the opening bell.  Then after the close, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report. 

In economic news later this week, on Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

So far this morning, RY, DY, CLVT, WEN, ACIW, HZNP, and GOLF have all reported beats to both the revenue and earnings lines.  Meanwhile, LOW, ODP, NIO, BHG, DCI, WB, and EYE have all missed on the revenue line while beating on earnings.  On the other side, KSS, QRTEA, ANF, HGV, and QRTEB beat on revenue while missing on the earnings line.  (There were no misses on both lines reported so far today.) It is worth noting that KSS, NIO, and EYE lowered their forward guidance.  However, ODP raised its forward guidance.

In mortgage news, interest rates increased for the third straight week.  As a result, mortgage demand also dropped for the third straight week after spiking earlier this year as rates had dropped.  Last week saw the slowest mortgage demand in 28 years.  The national average rate for a 30-year, fixed-rate, conforming loan hit 6.71% with an increase in points to 0.77 (up from 0.75).  This caused refinance applications to fall 6% and new home purchase applications to also fall the same 6% on the week.

With that background, it looks like the bulls want to make another modest move back up toward the T-line (8ema) in all three major indices again this morning. However, over-extension is not a problem in terms of the T-line and the T2122 indicator is just at the edge of oversold territory. So this is not the result of being stretched to the downside. Regardless, all three major indices remain in a downtrend. In addition, all three indices have minor potential support below as well as resistance above. Respect the trend (the trend is the trend until it ends) and be aware of the potential support and resistance.

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

On Monday, markets gapped higher at the open (up 0.89% in the SPY, up 0.78% in the DIA and up 1.11% in the QQQ).  All three major indices then shopped sideways for just over an hour.  However, at that point, a slow selloff took hold for the rest of the day with price closing not far up off the bottom in all three.  This action left us with gap-up, black-bodied, indecisive Spinning Top candles in the SPY, DIA, and QQQ.  All three very nearly touched their T-line (8ema) at the high of the day.  In addition, the SPY closed up above its 50sma…but just barely above.  This all happened on less-than-average volume in all the major indices.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (+0.79%) and Basic Materials (+0.77%) leading the way higher and Utilities (-0.50%) lagging behind the other sectors.  At the same time, the SPY was up 0.34%, the DIA was up 0.29%, and QQQ was up 0.72%.  The VXX fell 3.59% to 11.81 and T2122 climbed up out of the oversold territory to 39.22.  10-year bond yields fell back a bit to 3.928% and Oil (WTI) fell three-quarters of a percent to $76.75 per barrel.  So, overall, Monday was a gap-up, indecisive day where the bears seemed to have more strength than the bulls after the first hour.

In economic news, January Durable Goods Orders came in below expectation at -4.5% (compared to a forecast of -4.0% and far below the December reading of +5.1%).  The bulls took this as good news, probably under the theory that bad economic data may give the Fed a reason not to raise rates as much in March.  However, later in the morning, January Pending Home Sales came in extremely hot at +8.1% (versus a forecast of +1.0% and a December value of +1.1%).  This news may have helped the bears during the mid-morning start to the selloff.  However, the staying power was not long-lived and seemed to dissipate quickly.  Meanwhile, Treasury Sec. Yellen made a surprise trip to Ukraine.  She called for a “fully funded and appropriately conditioned” (meaning funded by Russian asset seizures and conditioned to avoid/limit corruption) IMF bailout plan for Ukraine by the end of March.  However, she did acknowledge a significant set of legal hurdles to accessing those assets being held in the US and Europe.  Yellen also called for sanctions on the Russian uranium commodity, which had escaped sanctions thus far.

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In stock news, PLTR announced they are cutting 2% of their workforce.  (However, this only amounts to 75 jobs.)  Elsewhere, car maker STLA announced it has purchased a 14.2% stake in MUX (a copper mine located in Argentina, whose largest shareholder is RIO).  In other auto news, FSR told Reuters on Monday that it has increased orders for its “Ocean” sport utility EV and was on track to produce 42,400 vehicles in 2023.  (The Ocean EV starts at $37,500 compared to TSLA Model Y which starts at $54,990.)  At the same time, the Wall Street Journal reported PFE is in talks to buy cancer drugmaker SGEN.  However, there are many hurdles for the deal to clear including a potential major antitrust review.  Meanwhile, WMT, TGT, BABA, HD, LOW, COST, DLTR, IP, DOLE, and NKE are benefitting from plummeting ocean shipping prices (as the largest importers or exporters of containers).  At its peak, the cost was $20,000 per TEU and now the price is $1,150.  However, shipping firms (pink sheet listed) are now canceling voyages and storing containers in a frantic effort to prop up prices.

In stock legal and regulatory news, TD has agreed to pay $1.205 billion to a court-appointed receiver (who will pay back victims) related to an infamous Ponzi scheme 10 years ago.  The bank avoided admitting to doing any wrong, but paid since it repeatedly ignored red flags and funneled all of Allen Stanford’s ill-gotten gains to his offshore accounts in Antigua.  Elsewhere, Politico reported late Monday that the FTC is going to challenge the ICE (owner of NYSE) $13 billion deal to buy BKI.  This move comes after many months of investigation of the pricing power ICE would gain in the mortgage data market.  In Ohio, residents have asked a judge to block NSC from doing cleanup (destroying potential lawsuit evidence) related to the February 3 train derailment and chemical spill.  This came after NSC had only allowed 2 days for the inspection of dozens of rail cars.  However, NSC is also under a tight deadline due to a March 10 deadline from the EPA to clean up residues.  Elsewhere, a Delaware court ruled that it will hold a hearing on April 27 regarding the conversion of APE (AMC Preferred shares) into AMC common shares.  AMC soared on the news, which implies the stock may not be diluted 10-1 on March 14.  (This extends the time for a long APE / Short AMC trade by 1.5 months.)  Meanwhile, LYV has asked a US federal judge in CA to throw out a class action lawsuit related to the sale of Taylor Swift concert tickets.  LYV claims that the ticket buyers (plaintiffs) had all repeatedly agreed to the terms of service which call for confidential arbitration.  After the close, DDD agreed to pay $27 million to the US government to settle its violations of export restrictions to China.

After the close, UHS, RRC, WDAY, CAPL, ZM, HHC, MKSI, TTEC, HEI, HY, and WMK all reported beats on both the revenue and earnings lines.  Meanwhile, OKE, ARKO, PRGO, TWI, PRIM, and ICUI all missed on revenue while beating on earnings.  On the other side, DAR, ACHC, BMRN, and OVV all beat on revenue while also missing on the earnings line.  Unfortunately, OXY and ARGO missed on both the top and bottom lines.  It is worth noting that OKE and ALC both raised forward guidance.  However, MKSI, TTEC, and BMRN all lowered their own forward guidance.

Overnight, Asian markets were mixed and leaned to the downside.  Hong Kong (-0.79%), Taiwan (-0.71%), and India (-0.51%) paced the losses.  Meanwhile, Shenzhen (+0.70%), Shanghai (+0.66%), and Australia (+0.47%) led the gainers.  In Europe, we see the opposite picture at midday with most of the bourses in the green.  The FTSE (-0.43%), DAX (+0.17%), and CAC (+0.13%) lead the way with all but three of the other exchanges modestly green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the morning.  The DIA implies a +0.32% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.43% open at this hour.   

The major economic news events scheduled for Tuesday include January Trade Goods Balance and Jan. Retail Inventories (both at 8:30 am), Chicago PMI (9:45 am), Conf. Board Consumer Confidence (10 am) and API Crude Oil Stocks Report (4:30 pm).  Major earnings reports scheduled for the day include AHCO, ADT, AAP, AMWD, APG, AZO, BMO, BNS, BLDR, CHS, CCO, CLOV, CBRL, DQ, DK, XRAY, IGT, SJM, JLL, KTB, NFE, NXST, NCLH, OMI, PLTK, PRVA, SRE, FOUR, TGT, VRTV, and VTNR before the opening bell.  Then after the close, A, AMC, BGS, COMP, CPNG, EDR, EXPI, FSLR, FRG, GO, HPQ, ICFI, IHRT, JXN, MASI, MNST, RIVN, RKT, ROST, SKWD, SWX, URBN, VRSK, and VZIO report.

In economic news later this week, on Wednesday, Mfg. PMI, ISM Mfg. PMI, and EIA Crude Oil Inventory are reported.  On Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Wednesday, ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, WEN, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report.  On Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

So far this morning, TGT, BMO, AZO, AAP, APG, XRAY, IGT, KTB, PLTK, BLDR, CCO, FOUR, VTNR, and CLOV have all reported beats on both the revenue and earnings lines.  Meanwhile, SRE, SJM, and NFE missed on revenue while beating on earnings.  On the other side, BNS, OMI, ADT, NCLH, DORM, and FRO all beat on revenue while missing on earnings.  Unfortunately, AHCO, AMWD, CHS, and DQ missed on both the top and bottom lines.  It is worth noting that TGT, ADT, CHS, NCLH, and CLOV all lowered their forward guidance.  However, CCO and KTB both raised their own forward guidance.

With that background, it looks like the bulls want to gap markets back up toward their T-lines (8ema) again this morning. This time, it is looking to be a less dramatic inside candle gap up. So, over-extension is not a problem either in terms of the T-line or T2122 indicator. Still, this leaves all three major indices in a downtrend. However, if they can reach yesterday’s highs again (and hold them) they will be testing that downtrend line. I see support just below (bouncing up off it in premarket) in the QQQ and SPY. However, I also see resistance just above in the DIA and probably in the SPY too. So, continue to respect trend and support and resistance. And beware of the recent tendency toward intraday reversals which might point toward a shorter/faster trade, longer/slower trade, and/or the ability to withstand the pressure (sized small enough).

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Markets gapped lower at the open Friday (down 1.29% in the SPY, down 1.14% in the DIA, and down 1.76% in the QQQ).  However, at that point, Mr. Momentum seemed to take off for the weekend.  After that open, all three major indices traded the rest of the day in a tight range bobbing around above and below the open.  This action gave us gap-down, indecisive Doji or Spinning Top candles in all three major indices.  The SPY crossed below its 50sma and then both the SPY and QQQ retested their 200sma from above…and held (at least for the day).  DIA is not far above (and looks headed toward) its own 200sma.

On the day, nine of the 10 sectors were in the red as Technology (-1.89%) led the way lower and Energy (+0.13%) held up better than the other sectors.  At the same time, the SPY was down 1.07%, the DIA was down 1.07%, and QQQ was down 1.67%.  The VXX climbed 3.90% to 12.25 and T2122 has dropped back down just into the oversold territory at 19.66.  10-year bond yields are back up to 3.947% and Oil (WTI) rose 1.50% higher to $76.52 per barrel.  So, overall, on Friday we saw a strong gap lower at the open, but then indecision the rest of the day.  All this took place on a greater-than-average volume.

In economic news, the January PCE Price Index (the Fed’s favorite inflation indicator) came in hotter than expected at 5.4% (compared to a forecast of 5.0% and the Dec. reading of 5.3%).  At the same time, January Personal Spending also came in much hotter than expected at +1.8% (versus a forecast of +1.3% and the December value of -0.1%).  This was the biggest monthly gain since March 2021.  Together these two readings were seen as indications that inflation may still be increasing (or at least is not falling) and the consumer is spending like crazy.  Both of those are more likely to lead the Fed to tighten more and faster, raising the probability of a half percent hike in March.  Hence, our gap down to start the day.  Later in the morning, the Michigan Consumer Sentiment came in slightly better than forecast at 67.0 (compared to an expectation of 66.4 and decently improved from the January value of 64.9).  At the same time, January New Home Sales came in significantly better than expected at 670k (versus a forecast of 620k and a December value of 625k)

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In stock news, on Friday META announced its own AI named LLaMA (short for Large Language Model Meta AI).  The new AI is aimed at researchers and academia and is the first step in META figuring out how it can use AI in its products.  Meanwhile, Reuters reported that several more companies are cutting dividend sizes in an effort to save cash.  As of Friday, these include HBI and VFC.  Elsewhere, Reuters also reported on food companies culling slow-selling product lines as another way to cut expenses.  These companies include KHC, CAG, UL, K, and MDLZ and will affect product selection and especially different sizes (smaller and larger quantities) of the same products available at WMT (Sam’s Club) and COST.  The food companies claim it will save them billions of dollars over the year.  At the same time, sources have told Bloomberg that GM has cut the production of pickup trucks due to growing inventories at dealerships and despite a continued increase in car sales this month.  This implies that, while sales are good now, GM is expecting a downturn.  Finally, hedge fund mgr. and major TSLA investor Ross Gerber told Reuters he was ending his bid for a TSLA board seat two weeks after his very public announcement of running for a seat in order to “reign in” Elon Musk.

In stock legal and regulatory news, the 2^nd US Circuit Court rules that a tiny ($11,000) fine, which OSHA had levied on WMT for requiring pallets of boxes to be improperly stored, causing serious injury to an employee.  (The multiple appeals over a minuscule fine have been an attempt by WMT to avoid liability in a lawsuit filed by the employee.)   Elsewhere, WBD filed a lawsuit against PARA over the streaming rights to the animated comedy show South Park.  At the same time, the US CDC hit PFE, BNTX, and MRNA when it said Friday afternoon that there isn’t enough evidence to recommend multiple annual (ongoing) COVID-19 booster shots.  This comes as the government funding for such shots has or is expiring and the companies had announced major increases in the price of those vaccines.  Meanwhile, GS announced Friday that it expects to incur $2.3 billion more in losses from legal proceedings during the remainder of the year.  However, a CA Judge dismissed an antitrust suit that had been filed against CSGP by a rival real estate firm.  After the close, MS told Reuters that it was cooperating with investigations by the US District Attorney for the Southern District of NY into block trading practices.  At the same time, BLK told reporters it was cooperating in SEC investigations into electronic communications among its investment advisors (i.e. using encrypted communications to collude).

In miscellaneous news, US equity funds suffered massive outflows in the seven days ending last Wednesday.  Lipper data shows investors withdrew almost $7 billion during that week.  Meanwhile, Lipper data shows that investors exited US bond funds as well as they withdrew $1.67 billion during the week. Elsewhere, the US Dollar closed Friday at a seven-week high after hotter-than-expected inflation data.  This came as we saw the largest weekly gain (0.6%) by the Dollar since September.  On Saturday, Warren Buffett sent out his annual BRKB shareholder letter.  In it, he said the company will continue to hold “a boatload of cash and treasury bonds.”  He went on to report BRKB earnings were down 54% year-on-year for Q4 and down 125% year-on-year for all of 2022 (to a net loss of $22.819 billion).  So, if you think you had a rough trading year in 2022, consider that BRKB reported a $53.6 billion loss from investments and derivative trades.  BRKB share repurchases were down from $27 billion in 2021 to $8 billion in 2022.  No new plan for 2023 was announced, but BRKB is sitting on $130 billion in cash.

Overnight, Asian markets were red across the board.  Australia (-1.12%), South Korea (-0.87%), Shenzhen (-0.73%), and Taiwan (-0.71%) led the region lower.  Meanwhile, in Europe, with the lone exception of Greece (-0.53%), the entire region is strongly green at midday.  The FTSE (+0.77%), DAX (+1.52%), and CAC (+1.57%) are typical and lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest gap higher.  The DIA implies a +0.43% open, the SPY is implying a +0.50% open, and the QQQ implies a +0.61% open at this hour.  At the same time, 10-year bond yields have climbed to 3.959% and Oil (WTI) is down by a fraction of a percent to $76.18/barrel in early trading.

The major economic news events scheduled for Monday are limited to Jan. Durable Goods Orders (8:30 am) and January Pending Home Sales (10 am).  Major earnings reports scheduled for the day include AES, BRKB, WTRG, GLP, HSC, KOP, KOS, LI, PNW, and VTRS before the opening bell.  Then after the close, ACHC, ARGO, BMRN, CAPL, DAR, HEI, ICUI, MKSI, OXY, OKE, OVV, PRGO, PRIM, RRC, TWI, TTEC, UHS, WDAY, and ZM report.

In economic news later this week, on Tuesday we get Jan. Durable Goods, Jan. Retail Inventories, Chicago PMI, Conference Board Consumer Confidence and API Crude Oil Stocks Report.  The Wednesday, Mfg. PMI, ISM Mfg. PMI, and EIA Crude Oil Inventory are reported.  On Thursday, we get Q4 Nonfarm Productivity, Q4 Unit Labor Cost, and Weekly Initial Jobless Claims.  Finally, on Friday, Services PMI, S&P Global Composite PMI, and ISM Non-Mfg. PMI are reported.

In terms of earnings later in the week, on Tuesday, we hear from AHCO, ADT, AAP, AMWD, APG, AZO, BMO, BNS, BLDR, CHS, CCO, CLOV, CBRL, DQ, DK, XRAY, IGT, SJM, JLL, KTB, NFE, NXST, NCLH, OMI, PLTK, PRVA, SRE, FOUR, TGT, VRTV, VTNR, A, AMC, BGS, COMP, CPNG, EDR, EXPI, FSLR, FRG, GO, HPQ, ICFI, IHRT, JXN, MASI, MNST, RIVN, RKT, ROST, SKWD, SWX, URBN, VRSK, and VZIO.  Then Wednesday, ANF, BHG, CLVT, CLH, DLTR, DCI, DY, FWONK, HGV, HZNP, JACK, KSS, LSXMA, LOW, EYE, NIO, ODP, PBR, QRTEA, RY, SGRY, VST, WB, WEN, AAN, ADV, AGL, AEO, CANO, SQM, CODI, ERIE, GEF, JAZZ, LNW, OKTA, PFG, CRM, SNOW, SPLK, and VEEV report.  On Thursday, we hear from AER, AMRX, BUD, BBY, BIG, BILI, BURL, CPG, GMS, HRL, KR, M, PDCO, SFM, STGW, TD, AVGO, COO, COST, DELL, HPE, MRVL, JWN, VVX, and VSCO.  Finally, on Friday, HIBB reports.

So far this morning, AES, KOS, HSC, and NE all reported beats on both the revenue and earnings lines.  At the same time, VTRS missed on revenue while beating on the earnings line.  On the other side, WTRG beat on the revenue line while missing on earnings.  Unfortunately, LI missed on both the top and bottom lines.  It is worth noting that HSC has also lowered forward guidance.

With that background, it looks like the bulls want to gap markets back up toward their T-lines (8ema) this morning. (At least prior to the durable good number.) Still, this leaves all three major indices basically in a downtrend although the premarket price is getting close to challenging the downtrend line (but certainly not starting a new uptrend at this point). Extension is not a problem either in terms of T2122 or the T-line. It looks like the bulls are trying to get back above a potential support level that was tested and appeared to fail Friday. Also, keep in mind that the norm recently has been to see large intraday swings. So, be prepared to weather such a whipsaw or look to shorter or longer trade horizons to handle that problem.

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 absolutely 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 money is 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

Whipsaw was the word of the day on Wednesday as we gapped higher at the open (up 0.68% in the SPY, up 0.46% in the DIA, and up 1.26% in the QQQ).  Then, after 25 minutes of finding their feet, the bears stepped in to drive a strong selloff that took all three major indices to the lows of the day (which was down 0.6% from the prior close) at noon.  From there, the bulls stepped in to lead a long, slow, steady rally that got us back to the opening level by 3:30 pm.  Finally, the last 30 minutes saw more selling in all three indices of note.  This action gave us black-bodied, indecisive, Spinning Top candles in the SPY and DIA as well as a black-bodied Hammer candle in the QQQ.  All three major indices remain below their T-line (8ema), but are close enough now that there is no question of over-extension at this point.

On the day, six of the 10 sectors were in the green as Energy (+1.78%) led the way higher (by eight-tenths of a percent) and Communication Services (-0.71%) lagged the other sectors.  At the same time, the SPY was up 0.53%, the DIA was up 0.35%, and QQQ was up 0.87%.  The VXX fell 3.52% to 11.79 and T2122 has climbed back into the mid-range at 45.40.  10-year bond yields fell again, this time to 3.888% and Oil (WTI) jumped 2.27% higher to $75.63 per barrel.  So, overall, we saw a back-and-forth day where we gapped up, faded the gap and continued the same distance lower, and then reversed course again to end up just below where we opened.  If that doesn’t say “INDECISION,” then I don’t know what does.  All this took place on a greater-than-average volume, in fact, much larger-than-average in the DIA.

In economic news, the second estimate of Q4 Gross Domestic Product came in lower than expected at +2.7% (compared to a forecast of +2.9% and the Q3 final reading of +3.2%).  This gave bulls the energy to gap higher at the open on the theory that slower Q4 growth will tell the Fed their measures are working and they can go with a smaller hike during their March meeting.  At the same time, the second estimate of the Q4 GDP Price Index came in above expectation at +3.9% (versus the forecast of +3.5% but still improved from the Q3 value of +4.4%).  Meanwhile, Weekly Initial Jobless Claims came in lower than expected at 192k (compared to a forecast of 200k and even slightly down from the prior week’s 195k number). Again, this all pointed to a goldilocks scenario in the bulls’ eyes.  GDP was falling, but still growing, inflation was trending in the right direction, and yet fewer than expected jobs are being lost.  To bulls, this suggests an economy that is not in serious trouble and a Fed policy that is still doing the job.

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In stock news, BA announced it will stop production of its F/A-18 fighter jet in 2025.  BA said this will free up resources to focus on winning the race to build the pentagon’s 6^th generation fighter contract and building the MQ-25 autonomous refueling tanker.  (LMT and NOC are also competing for the sixth-generation fighter contract.)  Meanwhile, HUM announced it will exit the employer-based insurance business entirely to focus on government-backed programs such as Medicare and direct-to-individual insurance like medicare supplement insurance.  Later, NEM said it sees significant value created for its shareholders in a deal and is in talks to buy NCMGF.  Several of NEM’s competitors have said they are not interested in NCMGF, but the company still rejected NEM’s initial bid (which NEM said it is open to sweetening).  Elsewhere, NFLX said Thursday that it has cut the prices of its subscription plans in some countries in order to boost the number of subscribers.  The Wall Street Journal reported those cuts were in countries in sub-Saharan Africa, Latin America, the Middle East, and Asia.

In stock legal and regulatory news, NVS agreed to pay $30 million to healthcare plans and consumers to settle claims that it schemed to delay the US launch of generic drugs that would compete with its name-brand Exforge hypertension drug.  This was part of a broader $245 million settlement.  Meanwhile, a federal judge in Detroit moved more toward SBUX and dealt a blow to the NRLB ruling against the company.  The judge narrowed his previous “cease and desist” order barring the company from firing pro-union employees.  Originally, the order applied nationwide, but the just has now narrowed this to only cover a single store (in essence allowing SBUX to fire any pro-union employees elsewhere).  This is critical since 280 SBUX stores have unionized in the last two years out of 9,000 US locations.  Elsewhere, after the close, the FAA reported that BA has halted the delivery of 787 Dreamliner jets while it investigates a fuselage component.  (BA has not delivered a 787 since January 26 and there is no timeline available for the resumption.)  Finally, the US Dept. of Justice has asked a federal judge to sanction GOOGL after it claimed the company destroyed evidence by deleting internal corporate communications that had been subpoenaed as part of its antitrust case against GOOGL (related to internet search business).

In energy news, the EIA Weekly Crude oil Inventories saw stockpiles grow for the ninth-straight week.  The report showed an inventory build of 7.648-million-barrels (compared to a forecast of a 2.083-million-barrel build).  Crude inventories have grown by over 60 million barrels so far in 2023.  In addition, refineries operated at 85.9% capacity over the week, down slightly from the prior week and well below the 90% average capacity for this time of year.  Meanwhile, due to the reduced refining, the week saw a drawdown of gasoline inventories by 1.856-million-barrels (versus the forecast of a 0.108-million-barrel build and far less than the prior week’s 2.317-million-barrel build).  However, distillate (diesel and heating oil) inventories rose by 2.698 million barrels (compared to a forecast of a drawdown of 1.126 million barrels and the prior week’s drawdown of 1.285 million barrels).

In miscellaneous news, the USDA released its forecast calling for a 26.8% fall in egg prices during 2023.  The primary factor was that the agency is not seeing a rebound in bird flu after massive culling efforts in 2022.  Meanwhile, a group of Republican states has filed suit against the SEC, challenging the SEC requirements that investment funds reveal how they vote on shareholder ballots (like pay packages).  In the crypto space, the SEC and NY State’s top financial regulator both opposed Binance buying bankrupt crypto lender Voyager.  Both announced the grounds for their opposition is the ”unregistered offer and sale of securities,” which essentially declares crypto to be a security and is just another step in government opposition to cryptocurrencies.  Finally, the Biden Administration announced it will nominate former MA exec Ajay Banga to head the World Bank.

After the close, INTU, BKNG, MELI, ADSK, VICI, LYV, CHE, SWN, RHP, CWK, KWR, LUNMF, ACA, FTCH, SATS, EIX, and OPEN all reported beats on both the revenue and earnings lines.  Meanwhile, FND, PRI, BWXT, INT, CENX, and ZEUS all missed on the revenue line while beating on earnings. On the other side, SQ, PBA, ASR, SEM, ATSG, and SPNT all beat on revenue while missing on earnings.  Unfortunately, WBD, CE, BECN, OII, CVNA, and ACCO missed on both the top and bottom lines.  It is worth noting that CE, FND, ACCO, and ATSG lowered their forward guidance.  However, CHE and OII both raised their forward guidance.

Overnight, Asian markets were mostly in the red.  Japan (+1.29%) and South Korea (+0.53%) were the only appreciable green in the region.  Meanwhile, Hong Kong (-1.68%), Thailand (-1.12%), and Shenzhen (-0.81%) led the rest of the region lower.  In Europe, we see a similar picture taking shape at midday.  The FTSE (+0.21%) is among the handful of green bourses while the DAX (-0.60%) and CAC (-0.57%) are more typical and lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.57% open, the SPY is implying a -0.63% open, and the QQQ implies a -0.90% open at this hour.  At the same time, 10-year bond yields are up to 3.912% again and Oil (WTI) is up a half of a percent to $75.80/barrel in early trading.

The major economic news events scheduled for Friday include the January PCE Price Index and January Personal Spending (both at 8:30 am), Michigan Consumer Sentiment and January New Home Sales (both at 10 am).  Fed member (non-voting, hawk) Mester also speaks at 10:15 am.  The major earnings reports scheduled for the day include CM, GTLS, CNK, EOG, EVRG, FMX, FYBR, GTN, DINO, IEP, and LAMR before the opening bell.  Then after the close, CRC reports.

So far this morning, FYBR, EVRG, CRI, GTN, and PNM have all reported beats on both the revenue and earnings lines.  Meanwhile, CM, LAMR, and GTLS have missed on revenue while beating on earnings.  On the other side, CNK and DINO both beat on revenue while missing on earnings.  There are no major reports that have reported misses on both lines.  (FMX, IEP, and SSP report closer to the open.)  It is worth noting that CRI has lowered its forward guidance.

One year into the Russian War of Expansion against Ukraine, the war drags.  The Russians continue to be willing to take hundreds of thousands of casualties (by most estimates more than 100,000 dead).  On the other side, the West (and the US in particular) seems only willing Ukraine enough military aid to check the Russians.  (As opposed to decisively throwing them out such that they will not come back after regrouping.)  In terms of the business impacts go, according to US News and World Reports, these are the biggest losses.  PM generated 8% of its revenue from Russia and Ukraine prior to the war and that has taken a hefty hit.  PEP was generating 4.4% of total revenue from those two countries prior to the 2022 invasion.  MCD lost 4.2% of its revenue and also took a significant haircut on the assets it sold at fire sale prices to exit Russia.  Less obvious losers are MHK (which lost 4.3% of its revenue which came from Russia and Ukraine), EPAM (which used to generate 4% of revenue from the two countries, CCL (which previously got 3.5% of its revenue from Russia and Ukraine), PVH (lost 3.6% of its revenue), and WAB (which lost 3.5% of its revenue from those two countries).  The biggest corporate winners from the war are LMT, RTX, NOC, and GD, all of which have received new multi-billion dollar orders for everything from Javelin missiles (LMT), to HIMARS rocket systems (LMT), to Stinger missiles (RTX), to Stryker fighting vehicles (GD), to Abrams tanks (GD), to heavy-caliber ammunition (GD), to drones (AVAV).

With that background, it looks like the bears want to gap markets back lower in all three major indices. Still, this leaves all three major indices basically in a consolidation area of the recent downtrend. (At least at the current premarket prices.) Extension is not a problem either in terms of T2122 or the T-line. We’re sitting at a potential support level at the moment. However, all three major indices also face resistance just above after the last few days. The trend remains bearish in the short term while the basic character of the market has been “chop and thrash back-and-forth” in recent weeks. Yesterday, in particular, was a whipsaw day on the intraday chart. So, continue to show some caution and remember that it’s Friday (payday). So, lock in some profits where you can and prepare your account for the weekend news cycle.

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 absolutely 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 money is 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service

On Wednesday, markets opened just on the green side of flat.  All three major indices say 20 minutes of modest rally followed by 45 minutes of a slightly stronger selloff.  However, at 10:40 am, a slow, steady rally took over the market that eventually took us to new highs by 2 pm.  Unfortunately, after buying the rumor all morning, traders sold the news after the Fed Minutes release.  This selloff took us back down to new lows by 3 pm where we stayed until a bounce that last 15 minutes.  This action is giving us black-bodied, indecisive Spinning Top candles in the SPY, DIA, and QQQ. 

On the day, six of the 10 sectors were in the red as Energy (-0.60%) led the way lower and Consumer Cyclical (+0.50%) held up better than the other sectors.  At the same time, the SPY was down 0.12%, the DIA was down 0.22%, and QQQ was up 0.07%.  The VXX fell 2.86% to 12.22 and T2122 has climbed but remains well into the oversold territory at 13.72.  10-year bond yields have fallen slightly to 3.916% and Oil (WTI) is down 3.23% to $73.89 per barrel.  So, we saw a “wait and see” open (despite good earnings reports) and then a slow, but steady rally into the Fed Minutes.  However, at that point, we sold off to take all three major indices out near the lows.  All this took place on a little below-average volume.

In economic news, the FOMC Minutes from the Feb 1 meeting was the only show in town Wednesday.  As mentioned, their release moved markets lower, despite us not learning anything we didn’t know before the release.  All participants expressed that they welcomed the signs of moderating inflation leading up to the meeting.  However, the sentiment that “substantially more evidence of progress on inflation” would be required before they were confident inflation was on a downward path toward 2%.  The vast majority favored a 25-basis-point hike (which is what they announced).  However, three members (including non-voters uber-hawk Bullard and Mester) were in favor of a continuation of 50-basis-point hikes (or at least said they could support a 0.50% hike).  We knew those two had been in favor of a 50-basis-point hike prior to the minutes because they flat-out told us as much last week.  With that said, the minutes also gave us a clue that there was concern over financial stability, both from increasing rates too quickly and potentially from the upcoming Federal Debt Ceiling showdown.  The most heated exchanges were related to the risk of recession with a few attendees seeing an “increased likelihood” of recession while the majority pointed to the labor market which has remained hot implying that businesses still see demand and are working to hold onto or in some cases increase their number of employees and also pointed to excess savings, even noting that some local governments have “sizable budget surpluses.”

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In stock news, Reuters reported that the CEO of MKC told them during an interview that the company is seeing pushback from retailers on price increases for its products.  Specifically, WMT and KR (two largest grocery chains) were mentioned as fighting any increase in prices.  Elsewhere, Reuters also reported that CMCSA took advantage of the recent “AI craze” to sell more than 11 million shares of BZFD so far in the month of February. This came after BZFD has announced it was partnering with OpenAI on ads.  Later, Bloomberg reported that AAPL has made a breakthrough in non-invasive (no blood sample) glucose monitoring.  This would allow the phone maker to compete with current blood or prick required solutions from ABT, PODD, DXCM, and TNDM.  At the same time, INTC announced a cut to its dividend by 65% (to the lowest level since 2007) in an effort to save cash.  INTC has been losing ground to AMD in key markets, had many delayed and mediocre product launches in the last year and is currently facing the worst semiconductor market in a decade coming off the boom pandemic years of high sales and higher prices.  Meanwhile, after the close, TM announced it has accepted union demands for the largest base salary wage hike in 20 years as well as an increase in bonuses.  Shortly after the TM announcement, HMC said it also has agreed to a deal with unions.  However, the HMC deal was only for a 5% pay increase.  Finally, in early evening, GOOGL told “cloud employees and contractors” that they will be sharing desks (on alternate days) in order reduce real estate costs at its five largest locations.  Workers will be in-office two days per week (Monday/Wednesday or Tuesday/Thursday) which is actually down from the currently required 3 days in-office.  There was no word on the amount of expected savings or whether the workers will be 33% more productive on their two days in-office.

In stock legal and regulatory news, CRL shares plunged Wednesday after news broke that the company was subpoenaed by the US Justice Dept. in relation investigations of Cambodian supplier of monkeys for research.  At the same time, AMZN completed its purchase of One Medical (primary care provider) a day after receiving FTC approval for the deal.  Elsewhere, the US Supreme Court ruled that HLX is liable to pay overtime for an oil rig supervisor who earns $200k per year.  The 6-3 majority ruled the person was being paid at a daily rate of $963 and was not on salary. The ruling could have serious implications for corporations employing non-contract staff.  Meanwhile, NSC made several announcements Wednesday that it will take responsibility for the cleanup (as had been ordered Tuesday by the EPA.  After the close, the CDC advisory panel recommended a BVNRY monkeypox vaccine be approved for use in all adults at risk.  Such recommendations usually lead quickly to approval and if approved this would give BVNRY an advantage over EBS whose smallpox vaccine was competing for that market but which causes severe side effects.  Finally, in non-specific corporate news, the NLRB ruled that laid-off workers cannot be required to sign confidentiality or any other (non-compete) agreements that could deter them from exercising their rights to find other employment as a condition for receiving severance pay.  This overturned a pair of Trump-era rulings that had made non-compete and confidentiality contracts a valid condition for receiving severance.

In energy news, after the close the API Weekly Crude Stocks Report came out.  This week saw another very large and unexpected rise in stocks.  The report said crude oil inventories grew 9.895 million barrels (compared to a forecast of a 1.233-million-barrel build and following on the heels of the prior week’s 10.507-million-barrel build).  The report also saw a 0.894-million-barrel build in gasoline inventories as well as a 1.374-million-barrel increase in distillate (diesel and heating oil) stocks.  This report followed a day when crude prices fell 3.3% on fears of upcoming Fed rate hikes and a weakening of the China rebound.  In addition, the Fed minutes also supported a strengthening dollar which rose against sterling, the yen and euro.  (A stronger dollar reduces the price of nearly all dollar-denominated commodities.)

After the close, NVDA, PXD, EBAY, APA, CTRA, PARR, FIX, PDCE, RXT, ANSS, MYRG, CCRN, TDOC, PK, RUN, EXR, COKE, KALU, ICLR, VMI, OGS, STN, SUI, and SM all reported beats on both the revenue and earnings lines. Meanwhile, DVA, NTAP, CAKE, CDE, DVA, GSM, WES, and UCTT reported misses on revenue while beating on earnings.  On the other side, MOS, OPAD, ETSY, CPE, CHDN, CHRD, BTG, DOOR, RYI, and PR all beat on revenue while also missing on earnings. Unfortunately, ATUS, SNBR, FNF, VAC, MATV, and OUT missed on both the top and bottom lines.  It is worth noting that RYI raised its forward guidance.  However, NTAP, VAC, OPAD, RXT, UCTT, and SUI all lowered their forward guidance.

Overnight, Asian markets were mostly in the red.  Taiwan (+1.28%) and South Korea (+0.80%) were strong but the only green in the region.  However, Japan (-1.34%) and Singapore (-1.06%) led the region lower with the rest of the exchanges down less than half of a percent.  Meanwhile, in Europe, the regional bourses are mostly green at midday.  FTSE (-0.18%) is one of three exchanges in the red while the DAX (+0.63%) and CAC (+0.48%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.30% open, the SPY is implying a +0.54% open, and the QQQ implies a +1.00% open at this hour.  At the same time, 10-year bond yields are back up to 3.947% and Oil (WTI) is up 1% to $74.75/barrel in early trading.

The major economic news events scheduled for Thursday includes Q4 GDP, Q4 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am), and EIA Crude Oil Inventories (11 am).  The major earnings reports scheduled for the day include BABA, AMR, AEP, AMT, HOUS, AMBP, AAWW, BBWI, BHC, CBRE, CQP, LNG, COMM, DPZ, DTE, EME, AG, FCN, GPC, GFI, IRM, KDP, LKQ, MRNA, MODV, NTES, NEM, NICE, NOMD, OPCH, PZZA, PCG, PRMW, PWR, RCII, SPTN, SRCL, FTI, TFX, BLD, TAC, VIPS, W, and YETI before the opening bell.  Then after the close, ACCO, ATSG, ACA, ADSK, BALY, BECN, SQ, BKNG, BWXT, CVNA, CE, CGAU, CENX, CHE, CWK, EIX, ERIE, FTCH, FND, INTU, LYV, MTZ, MELI, OII, ZEUS, OPEN, PBA, PRI, RHP, SEM, SWN, VICI, WBD, and INT report.

So far this morning, BABA, LYG, GPC, PWR, BBWI, AMT, BLD, SHOO, MODV, DTE, AEP, CQP, EME, RCII, OPCH, FCN, PZZA, and SATS all reported beats on both the revenue and earnings lines.  Meanwhile, CBRE, VIPS, DISH, ARKAY, COMM, DPZ, IRM, TFX, OGE, PCG, and NICE all missed on revenue while beating on earnings.  On the other side, KDP, W, FTI, NEM, SPTN, NOMD, and GRAB have reported beats on revenue while missing on the earnings line.  Unfortunately, MRNA, NTES, LKQ, and PRMW have reported misses on both the top and bottom lines.  It is worth noting that VIPS, GPC, PWR, IRM, BLD, and GRAB have all raised their forward guidance.  However, BBWI, SPTN, RCII, and NOMD lowered their forward guidance.

In economic news later this week, on Friday, the January PCE Price Index, January Personal Spending, Michigan Consumer Sentiment, and January New Home Sales are reported.  In terms of earnings later in the week, on Friday, we hear from CM, GTLS, CNK, EOG, EVRG, FMX, FYBR, GTN, DINO, IEP, LAMR, and CRC.

In late-breaking news, Elon Musk met with CA Governor Newsom Wednesday.  As a result, the new TSLA Engineering Headquarters will be built in CA instead of in TX where the company Headquarters were moved in 2021 (in tax abatement wrangling).  Meanwhile, NY Fed President (and voter) Williams toed the company line last night.  In his evening presentation, he said it was important that the Fed remain committed to its 2% inflation goal.  (He did not speak to the most recent data, what he thinks would be the appropriate next hike, or where he sees the terminal Fed Funds rate reaching.)  At the same time, a PIMCO subsidiary has defaulted on $1.7 billion in mortgage loans. An industry analyst claims the value of the commercial properties (nationwide) covered by those loans had fallen 20% since the start of the pandemic in 2020. Finally, he CME Fed Watch Tool shows that fewer traders are betting on a quarter-point hike in March now. Still, the futures imply a 73% chance of a quarter-point hike with the odds of a half-point hike rising to 27%.

With that background, it looks like the bulls want to gap markets higher (back toward the T-line) in all three major indices. This is especially true in the QQQ when most of the T-line extension will be eliminated IF we open where premarkets sit now. All three major indices also have potential support levels not too far below. However, they also face resistance just above after the last few days of losses. The trend remains bearish in the short term while the basic character of the market has been “chop and thrash back-and-forth” in recent weeks. So, continue to show some caution.

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 absolutely 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 money is 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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