Markets opened flat on Wednesday with “gapping” up 0.04%, DIA gapping up 0.08%, and QQQ gapping up 0.04%.  At that point, the two large-cap index ETFs traded dead sideways while the QQQ made a small rally and then sold off in the first 30 minutes.  All three then sold off until 10:20 a.m., before rallying back up until 11 a.m.  After that, the SPY, DIA, and QQ all traded sideways in a very tight range until 2 p.m.  This led to a selloff that lasted until 3:15 p.m. before the day ended on a modest 45-minute rally.  This led to indecisive Spinning Top candles in all three major index ETFs, white-bodied in the SPY and QQQ as well as a black-bodied on in the DIA.  SPY and DIA both failed a retest and closed tight below their T-line (8ema) and 50sma while QQQ closed tight above its own T-line and 50sma.  This all happened on well-below-average volume in all three major index ETFs. 

On the day, seven of the 10 sectors were in the red with Utilities (+1.02%) way out in front leading the rest of the market higher, while Energy (-0.71%) was by far the biggest laggard sector.  At the same time, the SPY gained 0.12%, DIA lost just 0.19%, and QQQ gained 0.38%.  VXX fell just over two percent to close at 20.51 and T2122 dropped back down to just inside the oversold territory at 19.51.  10-year bond yields fell to close at 4.254% while Oil (WTI) ended the day flat at $88.85 per barrel.  So, on the whole, it was a very indecisive and volatile day (at least within a small range).  

The major economic news reported Wednesday included August Core CPI (month-on-month) which came in a bit hot at +0.3%, compared to a forecast of +0.2% which was also the July value.  However, the August Core CPI (year-on-year) was in line with what was expected at +4.3% (versus a +4.3% forecast and down from the July reading of +4.7%). Meanwhile, the August CPI month-on-month came in as predicted at +0.6% (compared to a +0.6% forecast but far above the July value of +0.2%).  At the same time, August CPI year-on-year was higher than anticipated at +3.7% (versus a forecast of +3.6% and the July reading of +3.2%).  Later the EIA Weekly Crude Oil Inventories showed a significant unexpected build of 3.954 million barrels (compared to a forecast calling for a drawdown of 1.912 million barrels and far above the prior week’s 6.307-million-barrel drawdown). Finally, at 2 p.m., the Federal Budget Balance was massively better than expected at +89.3 billion, yes it was a surplus, (versus a forecasted -$240 billion and the August deficit of $221 billion).  In light of the CPI data, it is worth noting that Wednesday night the CME Fedwatch Tool still shows that markets have priced in a 97% chance that the Fed will leave rates unchanged next week.

In stock news, German jet engine provider MTUAY said Wednesday that it will begin talks with RTX over the $751 million hit MTUAY will suffer due to problems with RTX’s Pratt & Whitney engines.  Elsewhere, DAL is facing a proposed class-action suit in Los Angeles over “Greenwashing” for allegedly false advertising in which DAL claimed to be “carbon-neutral” based on carbon offsets the company had purchased.  Later, XOM disclosed that it’s invested $30 billion into various projects in the Qatar LNG industry.  At the same time, USB was down hard after its three top officers made comments at an industry conference stating that slow loan growth would be a drag in its Q3 performance.  The CEO also said he expected “a little bit more of the effect in Q4.”  In other banking news, C announced a major reorganization Wednesday, cutting entire layers out of the management hierarchy and giving the CEO direct oversight of the five core business units.  Interestingly, while “job cuts” were part of the announcement, no numbers, timing, or specific senior manager exits were mentioned.  Later, EPOW shares jumped after it announced it had received interest from TSLA over its battery component products.  In less promising news, MMM warned that it foresees a “slow growth environment” in 2024, particularly mentioning projected weakness in electronics and consumer segments.  Later SGML announced it is “exploring strategic options” for the whole company after it has received multiple proposals for its Brazilian unit.  After the close, Reuters reported that GS has fired “several” executives in its transaction banking unit after they violated company communications policies (using banned apps like WhatsApp for secret interactions).  Also after the close, SBUX announced that founder and former three-time CEO Schultz will retire from the company board on September 30.  Wednesday evening, the head of US operations for TD said that the US Justice Dept. probe into the bank’s money laundering compliance is “manageable.”  However, he said he expects fines and non-monetary penalties.  Wednesday night, BRKB announced it sold 5.5 million shares of HPQ this week, unraveling a small portion of its $3.27 billion position in the stock.  Finally, The long-anticipated ARM IPO goes live today, after the Wall Street Journal reported Wednesday that it will be priced at $52 per share (top end of its earlier-announced range).

In stock government, and regulatory news, the NASDAQ has formally submitted an application to the SEC, seeking approval to list an ETF the combines the spot and futures contract prices of Ethereum cryptocurrency. The fund, Hashex Nasdaq Ethereum ETF, would be offered by a Brazilian asset management company managed by Toroso Investments.  Elsewhere, the NHTSA announced that TM has issued recalls for nearly 22k 2023 Tundra and Tundra Hybrid vehicles (due to load carrying labeling that can encourage usage at unsafe load capacities).  Overseas, China said that it “has not banned the purchase or use of foreign phones (AAPL).  However, at the same time, the spokesman said they had noticed a lot of recent media exposure over security incidents related to AAPL phones and the Chinese government placed great importance on information security…and will monitor things closely.  (Great house you have there.  It would be a shame is it burned down.  AAPL gets 20% of its revenue from China.)  At the same time, the FBI announced it was investigating the cyber attack at MGM that has kept the hotel and casino operator’s systems paralyzed for three days now.  Meanwhile, AAPL defended its iPhone 12 model after a French watchdog agency halted the sale of that model, claiming the phone breaches EU radiation exposure limits.  AAPL claims the 12 model (2020) phone meets international standards for radiation, but French tests have now found otherwise.  This raises the possibility of European-wide bans on the sale of model 12 iPhones.  After the close, the EEOC filed suit in AR against WMT over allegations it fired hourly workers with disabilities who could not pass a computer-based test which had no relation to their jobs.  (WMT has since discontinued the tests but did not offer to rehire those workers it fired.)  Also after the close, Elon Musk told reporters that while he can’t read lawmaker’s minds, the majority did raise their hand when asked if they felt there was a need from more AI regulation.  (The day-long closed-door session was meant to be a primer for lawmakers on AI technology and issues with speakers including the CEOs from GOOGL, META, NVDA, MSFT, IBM, and TSLA as well as former MSFT CEO Bill Gates.)

In stock legal news, a federal judge in Washington DC ruled that DAL and UAL must face a consumer antitrust class action case that accuses the airlines of conspiring to drive up domestic airfares by reducing the number of seats available.  (AAL and LUV have already settled for $45 million and $15 million respectively over this same claim.)  Elsewhere, in the GOOG antitrust case, Wednesday, a former GOOG executive testified that the company aggressively sought “exclusive” deals with mobile carriers for use of its search engine.  Later, a US Appeals Court questioned why a shareholder lawsuit against PCG officers and directors had been halted since September 2022.  A lower court judge halted the case at company request as PCG pursued bankruptcy.  The three-judge panel called the delay puzzling and questioned what efficiency was being gained by the delay. 

Overnight, Asian markets were mostly in the green.  South Korea (+1.51%), Japan (+1.41%), and Taiwan (+1.36%) paced the gainers while the only three red exchanges were Shenzhen (-0.57%), New Zealand (-0.38%), and Malaysia (-0.27%).  In Europe, the only red at midday comes from Russia (-1.24%).  Meanwhile, The FTSE (+1.24%), CAC (+0.41%), and DAX (+0.24%) lead the region higher.  In the US, as of 7:30 a.m., Futures are pointing toward a higher open.  The DIA implies a +0.30% open, the SPY is implying a +0.44% open, and the QQQ implies a +0.45% open at this hour.  At the same time, 10-year bond yields are up a bit once again to 4.262% and Oil (WTI) is up 1.32% to $89.69 per barrel in early trading.

The major economic news scheduled for Thursday includes August Month-on-Month PPI, Weekly Initial Jobless Claims, and August Retail Sales (all at 8:30 a.m.), July Business Inventories and July Retail Inventories (both at 10 a.m.), and the Fed Balance Sheet (4:30 p.m.).  There are no major earnings reports before the open.  However, after the close, ADBE, CPRT, and LEN report. 

In economic news later this week, on Friday, the August Export Price Index, August Import Price Index, NY Empire State Mfg. Index, August Year-on-Year Industrial Production, August Month-on-Month Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Friday, there are no major earnings reports scheduled again.

In miscellaneous news, Bloomberg reported Wednesday that global central banks are not as down on US Treasuries as the media might have you believe.  In fact, demand is consistent and bond buying is on pace to top last year’s $183 billion as central banks are trying to scoop up beaten-down US bonds.  The article pointed out that currency exchange rate differences accounted for all of the changes in the value of bond sales (not the quantity).  Elsewhere, the EPA issued a surprising report that claimed the US is on track to reduce carbon emissions between 35% and 43% by 2030 (compared to 2005 levels). The agency attributed this to Inflation Reduction Act programs. However, Republicans want to kill those programs in support of industry and would likely dispute those findings as “just made up to take credit.” Meanwhile, on the other side, Environmentalists would likely dispute the findings as pollyannish and overly optimistic, especially given continuing industry pushback and the 6.25 years left between now and 2030.   In other Congressional news, GOP House Majority Whip Emmer introduced a bill aimed at preventing the Fed from creating a Central Bank Digital Currency.  While he claimed this was needed because President Biden “is willing to compromise American’s right to privacy,” he did not mention the idea was first proposed (and studies of the idea began during) the Trump Administration and that the Fed is not actually part of any branch of government.  Meanwhile, on a similar topic, the fifth-largest Australian bank (Macquarie) announced it will begin phasing out cash, check, and phone operations in favor of digital-only transactions.  Finally, the London Metal Exchange reported that Copper stockpiles have reached the highest level in two years, citing a decline in the expected demand from China.

In Autoworker contract talks or strike news, President Biden said Wednesday that he expects the UAW and major automakers to work around-the-clock to avoid a strike.  He also said the White House was engaged with both sides encouraging progress in the negotiations.  For its part, the UAW outlined plans for a series of strikes targeting specific individual auto plants of all three top carmakers.  However, the currently planned strikes would not be company-wide for any of the three.  (This would be the first ever simultaneous strike against the Big 3.)  The current contract expires tonight at midnight and the strikes have already been authorized by workers.  The union said the best offer from the companies was a 20% wage hike spread over 4.5 years offered by F with the other two offering two to 2.5% less than F.  Meanwhile, the UAW lowered its demand from 40% to 36% over the same 4.5-year period.  On Wednesday night, F CEO Farley “rebuffed” comments made by UAW President Fain (who had said F was not taking bargaining seriously).  Instead, Farley blamed Fain for giving “no genuine counteroffer” to the most recent F proposal.  Farley went on to blame Fain for being absent from a Tuesday meeting that he and F Chair Bill Ford expected him.  (Fain later replied he was elsewhere meeting with STLA negotiators.)  As a side note, it does seem odd and unwieldy to hold all three negotiations at the same time, but separately.  Yet the companies do claim to have different issues and situations.  The bottom line of all this is that we seem to be 16 hours from strikes at individual auto plants, which will last varying lengths and rotate between plants for each automaker (a tactic designed to force the companies to either lock all autoworkers out or cause maximum chaos).

With that background, it looks like the Bulls are making at least a modest push this morning. All three major index ETFs are back above their T-line (8ema). The SPY and QQQ are also back above their 50sma while the DIA is just below that average. All three gave us “gap ups” in the early session but the candles are still small and are not showing premarket follow-through (at least yet). The short, mid, and long-term trends remain bullish, but action has been choppy within those trends recently. In terms of extension, none of the major index ETFs are very far from their T-line and the T2122 indicator is now just inside the oversold range. So, there is plenty of slack for either the Bulls or the Bears to make a move. Again, it’s a matter of finding the buyers or sellers to get the move started…one way or the other.

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

Tuesday saw us gap down at the open, down 0.34% in the SPY, down 0.23% in the DIA, and down 0.47% in the QQQ.  At that point, all three of the major index ETFs ground sideways for about and hour.  Then we started some modest wave action, mostly to the side in SPY, a bigger swing to the upside in the DIA, and mostly to the downside in the QQQ all until 1:30 p.m.  However, all three then sold off for two hours and then traded sideways in a tight range the last 30 minutes of the day.  This action gave us a white-bodied Inverted Hammer in the DIA, a black-bodied Inverted Hammer, and a black-bodied candle with an upper wick in the QQQ.  All three retested their T-lines (8ema) during the day with QQQ and SPY failing while SPY held up and closed above.  This all happened in well-below-average volume in all three of the major index ETFs (far below in the DIA). 

On the day, six of the 10 sectors were in the red with Technology (-1.35%) way out front leading the rest of the market lower while Energy (+1.81%) was way out front holding up better than any other sector.  At the same time, the SPY lost 0.56%, DIA lost just 0.05%, and QQQ lost 1.11%.  VXX gained slightly to close at 20.93 and T2122 climbed slightly again but remained in the mid-range at 38.02.  10-year bond yields fell a bit to close at 4.272% while Oil (WTI) popped up 1.87% to close at $88.92 per barrel.  So, on balance, it was a bearish day.  However, it was not very decisive, and overall, it felt like the market is still waiting…maybe on the CPI data. 

The major economic news reported Tuesday started with the EIA Short-Term Energy Outlook.  That report projects that global oil output will be 101.2 million barrels per day in 2023 and then rise again to 102.9 million barrels per day in 2024. Meanwhile, global oil demand will reach 101.0 million barrels per day in 2023 and rise to 102.3 million barrels per day in 2024.  This means EIA projects a 0.2 million barrel per day surplus of oil this year and a 0.6 million barrel per day surplus in 2024.  (All of those numbers would be all-time record highs.)  Despite the projected surpluses, somehow, EIA projects a decline of global oil inventories of almost half a million barrels per day for the rest of 2023.  This led them to predict Brent oil averaging $93/barrel in Q4.  The same report said that the US has regained its spot as the world’s largest LNG exporter after the fire-closed Freeport LNG terminal in TX reopened following an eight-month outage. Later, the WASDE Ag Report from the USDA reflected challenging weather conditions (hot and dry in the Midwest) in the last month.  The USDA lowered their expected crop yields for both corn and soybeans (down 1.3 bushels per acre to 173.8 in corn and down 0.8 bushels per acre to 50.1 for soybeans).  This impact was partially offset by a big jump in the number of acres of corn planted this year.  Then after the close, the API Weekly Crude Oil Stocks Report showed an unexpected increase.  The report found a build of 1.174 million barrels on the week (compared to a forecast calling for a drawdown of 2 million barrels and the prior week’s 5.521-million-barrel drawdown).

In stock news, TSM announced Tuesday that it will invest $100 million into ARM as part of the latter’s IPO.  (TSM is the world’s largest chipmaker and ARM is the major chip design rival to the x86 architecture used by INTC and AMD.)  At the same time, the CEO of LAW announced he will step down from both his CEO and Board Member roles.  LAW announced an existing board member (Scott Hill) as interim CEO.  Later, the CFO of WFC said Tuesday that he expects more layoffs are ahead but gave no timeline for cuts or details on causes. WFC has been cutting for years, having cut more than 40,000 headcount since Q3 of 2020.  However, they still had 233,834 employees at the end of June.  Elsewhere, BA reported that its deliveries decreased in August as it delivered 35 jets (main competitor EADSY delivered 52 in August).  This is well down from BA’s year-to-date average of 43 planes delivered per month.  Later the CEO of WMT told a GS Investor Conference that the company was well-positioned and he actually believes prices will fall in 2024 (at least a bit).  He went on to say that WMT is concerned about inflation in certain categories but is also already seeing “pockets of disinflation” and given the job market and wage increases the company feels “pretty good about where the consumer is in the US.”  In the afternoon, AAPL unveiled their new iPhone 15 line as well as a new Watch.  The phones feature brighter screens and an enhanced camera.  The phones go on sale September 22.  Later, XOS revealed that it has won a contract with the state of CA (and local authorities) to acquire electric step vans and other vehicles for government use in that state.  At the end of the day, PFE / BNTX set its list price for the latest COVID-19 shots at $120/dose while MRNA we tits price at $130/dose.  On Tuesday evening, the CEO of BP resigned (effective immediately) over charges of failing to disclose past personal relationships with colleagues.

In stock government, legal, and regulatory news, EU antitrust regulators asked MSFT competitors and customers for comments on the impacts they may experience if the MSFT-proposed remedies (to gain approval for the ATVI acquisition) are approved. No formal EU investigation of the remedies has been launched.  So, this may just be a precaution or it could signal the EU is waiting for the UK Competition Authority’s final decision before taking another step itself.  Elsewhere, the US Dept. of Defense signed a $21 million deal with a subsidiary of TLOFF (Canadian metal miner) to increase US nickel production by exploring the possibility of a mine in MN.  At the same time, US House Republicans held a hearing of their Chinese Communist Party Committee, hearing from several witnesses.  Interestingly, the party of “less regulation” supported the call from former Trump SEC Chair Clayton’s call for all companies over $50 billion (or with China-based revenue over $10 billion) to report on the company’s exposure to China. (I suppose they believe they can spin it that this is good additional reporting while also opposing climate risk reporting as too onerous but that logic illudes me.) At mid-afternoon, the FDA ruled that the active ingredient in many over-the-counter cold and allergy medicines is not effective.  New research found the active ingredient gave no better results than placebo.  (The next step is for the FDA to decide whether the medicines based on this ingredient need to be removed from sale.)  Later, HYMTF (Hyundai) and Kia asked a US judge to reject lawsuits filed by 17 cities for a failure to install anti-theft technologies in millions of their vehicles.  (A TikTok-inspired crime has led to millions of HYMTF and Kia vehicle thefts burdening police and leading to dozens of crashes and 10 deaths, as of February.)   The automakers responded that the real cause was lax policing by the cities rather than easy-to-steal cars.  (96% of all new vehicles sold since 2015 have had immobilizers, which would stop/limit this type of theft.  However, only 26% of HYMTF and Kia cars contain those devices.)  Meanwhile, a federal “Interagency Working Group on Mining Laws” issued a 168-page report that among other things called on Congress to introduce royalties on US hard rock mining and graduating (increasing over time) mining fees to encourage more and faster development of US mines for materials like lithium, cobalt, and nickel.  After the close, the CDC Advisory Panel voted 13-1 in favor of widespread use of the new COVID-19 vaccines for anyone 6 months of age and older.  In the evening, the SEC filed suit against VIRT (broker) for misleading investors/traders into believing it properly safeguarded confidential information when in reality anyone working for the company in 2018-2019 could access all information with just common usernames and generic passwords shared amongst the broker’s offices.  This allowed their proprietary traders to access holdings, prices, and volumes to aid in their own trading.  Finally, the FDA warned CVS and WBA against manufacturing and selling unapproved eye products (some of which were being illegally marketed for treating medical conditions like cataracts, glaucoma, and conjunctivitis).

In Autoworker contract talks or strike news, auto industry and stock analysts’ notes are coming hot and heavy as the current contract end nears.  BCS said their sources tell them the talks are proceeding very slowly and there is now a high likelihood of a strike.  At the same time, Third Bridge says their analysis finds F the most vulnerable to a strike of the Big 3.  (They say this is based on F’s reliance on just a few high-value models to make their numbers…including the F-series pickups.) 

Overnight, Asian markets were mixed but leaned bearish.  Shenzhen (-1.14%) was by far the biggest loser followed by Australia (-0.74%), and Thailand (-0.66%).  On the plus side, New Zealand (+0.52%) and India (+0.38%) were the leading gainers.  In Europe, things are much more on the red side at midday.  There are only two very modestly green bourses while the CAC (-0.90%), DAX (-0.91%), and FTSE (-0.47%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly lower open.  The DIA implies a -0.14% open, the SPY is implying a -0.11% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-year bond yields are up a bit to 4.30% and Oil (WTI) is up another two-thirds of a percent to $89.40 per barrel in early trading.

The major economic news scheduled for Wednesday includes August Year-on-Year CPI and August Month-on-Month CPI (at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), and Federal Budget Balance (2 p.m.).  The major earnings reports for the day include CBRL and REVG before the open.  There are no major reports scheduled for after the close. 

In economic news later this week, on Thursday, we get August Month-on-Month PPI, Weekly Initial Jobless Claims, August Retail Sales, July Business Inventories, July Retail Inventories, and the Fed Balance Sheet. Then Friday, August Export Price Index, August Import Price Index, NY Empire State Mfg. Index, August Year-on-Year Industrial Production, August Month-on-Month Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Thursday, we hear from ADBE, CPRT, and LEN.  Finally, on Friday, there are no major earnings reports scheduled again.

In miscellaneous news, Reuters reports that unless the current regional drought ends, the Panama Canal will further reduce the maximum number of daily vessel transits.   Many ships already need to reduce loads (containers or bulk) for the transit and then wait to reload on the other side.  (Currently 32 ships per day can transit, down from 36, and the maximum draft has been reduced from 50 feet to 44 feet.)  The canal uses 50 million gallons of fresh water for every ship it transits and the lakes feeding the canal system are drying up due to prolonged drought.  Elsewhere, just ahead of its auction, Citgo (Venezuela-owned and US seized oil refiner) was valued at between $32 and $40 billion.  (The refiner was seized to satisfy $23 billion in claims against Venezuela.)  Citgo is the seventh-largest US oil refiner.  Finally, the US Census Bureau reported that average US individual income fell for the third straight year to a median $74,580.  Similar declines have historically led to recessions.  However, those recessions have usually come at the beginning of the declines, not after the third year.  At the same time, the agency reported that the number of Americans living in non-metro areas outgrew urban populations for the first time in three decades in 2021.

In late-breaking mortgage news, the Mortgage Brokers Association released their weekly data.  This week the national average 30-year, fixed-rate, conforming loan rate increased to 7.27% (up from 7.21%).  As a result, overall demand for mortgages dropped 0.8% from the previous week (and was 31% lower than the same week in 2022).  This included a 5% week-over-week drop in refinance loan applications and a 1% increase in applications for new home purchase loans.

With that background, it looks like markets are waiting on the CPI data today. All three of the major index ETFs are giving us very small premarket candles so far. The DIA is still slightly above its 8ema while the SPY remains slightly below its own T-line. QQQ is the furthest below its T-line but that is not far and it is giving us the best-looking candle this morning. QQQ is also retesting its 50sma, sitting right on that level at the moment. We are likely to see a reaction to CPI (either bullish or bearish). So, expect volatility as we get closer to the open and shortly after the opening bell. The very short-term and mid-term trends remain bullish, but only just so in the short-term. (The previous short-term downtrend has been broken, but we have not yet proven we can hold above that line. So, it is really just a presumed resumption of the mid-term uptrend as of now.) In terms of extension, none of the major index ETFs are very far from their T-line and the T2122 indicator is still sitting in the lower end of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move. Again, it’s a matter of finding the buyers or sellers to get the move started and the CPI data may help with that…one way or the other.

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 up on Monday (up 0.59% in the SPY, up 0.49% in the DIA, and up 0.86% in the QQQ).  After that we had a sag in all three major index ETFs that lasted until 11 a.m.  At that point, the SPY and QQQ had only retraced about half of their morning gap before beginning a long, slow rally that lasted the rest of the day.  On the other hand, DIA continued to sell until almost noon, at which point it had recrossed the morning gap up.  Then DIA followed the other two majors with a very modest afternoon rally getting back up into the middle of the gap.  This action gave us a white-bodied Hammer that bounced up off the T-line (8ema) in the SPY and QQQ, as well as a black-bodied Spinning Top that bounced up off the T-line in the DIA. Both the SPY and QQQ crossed back above their 50sma. This all happened on well-below-average volume (far-below in the DIA) in the major index ETFs. 

On the day, nine of the 10 sectors were in the green with Consumer Cyclical (+1.04%) and Communication Services (+0.96%) leading a broad rally while Energy (-0.82%) was the only laggard in the red.  At the same time, the SPY gained 0.66%, DIA gained 0.25%, and QQQ gained 1.18%.  VXX fell another 2.35% to close at 20.78 and T2122 climbed again but remained in the mid-range at 37.21.  10-year bond yields climbed up to close at 4.294% while Oil (WTI) fell just a couple of pennies from Friday’s close to close at $87.31 per barrel. So, on balance, the bulls won the day again and the breadth has improved in the last few days.  (For example, 302 of the S&P500 were in the green Monday.)  However, the breadth is starting from a very low level and, as an example, only 158 of the S&P500 were up more than the SPY itself.  (TSLA did a lot of lifting in both the SPY and QQQ on its +10.09% day.)  DIA remains the weak link and laggard. 

There was no major economic news reported Monday.  However, the NY Fed released the results of its August Consumer Sentiment survey.  The bank said that respondents now see slightly higher inflation a year from now compared to the July survey.  August showed 3.6% is expected in a year while 3.5% was expected a year out in July.  When looking out three years, the average expectation fell slightly from 2.9% in July to 2.8% in August.  For the five-year horizon, consumers expect 3.0%, which is up slightly from the 2.9% 5-year-out expectation in July.  Elsewhere, a Commissioner for the CFTC proposed the creation of a national database (hard to believe one does not yet exist) where investors and law enforcement can research past fraud convictions and civil fines from agencies for financial misconduct.

In stock news, early Monday QCOM announced it will continue supplying AAPL with 5G chips for its phones and tablets until at least 2026.  Previously, the deal was set to end at the end of 2023 and AAPL purchased the INTC modem business in 2019 with the expectation they could replace QCOM with internally-made modems.  Later, STLA announced that is has teamed up with an investment firm to begin the third phase of its share buybacks (which is part of the $1.5 billion buyback program announced back in February).  This round of buybacks will be comprised of roughly $537 million.  At about the same time, BA announced that Vietnam Airlines committed to order 50 of the company’s 737-8 jets for $7.8 billion during President Biden’s post-G20 Summit visit to their country.  At the same time, back in the US, SJM announced an agreement to acquire TWNK for $5.6 billion ($4.6 billion plus $1 billion in assumed debt).  Elsewhere, DIS and CHTR (second-largest cable operator) reached a deal midday, ending the service disruption that was impacting CHTR customers.  (Despite media predictions of this contract dispute potentially changing the industry, it looks as if that was much more hype than reality.)  In the mid-afternoon, EVGO announced it had received the first batch of 350kw fast chargers from DLTEF.  After the close, analysts say that TSLA’s huge 10% gain was fueled almost completely by industry reports that TSLA’s new “Dojo” supercomputer could add $600 billion in market value by helping speed up the move into robotaxis and software services.  In response, stock analysts from JPM, MS, and others raised their TSLA target prices and the stock exploded higher.  After the close, GE announced it would sell its 32.4 million share stake in AER via an underwritten public offering.  (The deal is worth $2 billion at AER’s closing price.)  GE had previously sold 18 million shares of AER in March.  Also after the close, UPS said it expects its new contract with the Teamsters to increase its wage and benefit costs by 3.3% annually over the life of the contract, which expires July 31, 2028.

In stock government, legal, and regulatory news, a US federal judge ruled against the motion by META, ruling that the company must face a lawsuit claiming they have violated the medical privacy of patients.  At least 664 Hospitals and clinics had let META collect Pixel tracking data, which was then sold to advertisers by META like all other tracking data. In a follow-up to an earlier report, RTX took a $3 billion charge and told airline customers that an average of 350 of EADSY (Airbus) jets will need to be grounded each year (with a maximum of 650 at one time in 2024).  This is needed in order to remove the Pratt & Whitney (owned by RTX) engines to check for a metal flaw in internal engine parts.  RTX estimates 700 engines will need to be removed from jets to undergo a lengthy quality inspection and that process will last through 2026.  (A microscopic impurity was inadvertently introduced into the metal powder used to make internal parts of the engines, potentially causing engine failures when in operation.)  In COVID news, the FDA authorized COVID-19 vaccines from BFE/BNTX and MRNA. (A third vaccine from NVAX is still under review.)  The approval paves the way for the release of the two vaccines later this week.

After the close, CASY and ORCL both missed on revenue while beating on earnings.  Neither company changed forward guidance, although the ORCL quarterly guidance did disappoint by not raising after weaker than was expected cloud revenue for the quarter being reported.

In Autoworker contract talks or strike news, STLA said they plan to make a new offer to the UAW after the union made its own counteroffer on Sunday.  The UAW responded by saying they are ready to negotiate 24×7 until things get hammered out and that some progress has been made, but there is a long way to go.  For its part, STLA sent an email to employees saying the negotiations are on a good path and that many of the negotiating subcommittees had reached a tentative deal over things like health and safety concerns.  Elsewhere, industry analyst J.D. Power said they estimate that the production cuts from a strike against all three major automakers could raise new car prices by 1% each week the strike lasts.  They also say TM, HMC, and VLKAF (Volkswagen) could be winners from a domestic-maker strike.  However, JDP believes they would run out of inventory quickly as well amidst any significant-length strike.  (The current contract ends at midnight on Thursday night and the union has already voted to authorize a strike.)

Overnight, Asian markets were mostly in the red but the biggest movers were on the green side.  Japan (+0.95%) and Taiwan (+0.85%) were by far the largest gainers.  At the same time, South Korea (-0.79%) and Hong Kong (-0.39%) were the leaders of the more numerous down exchanges.  In Europe, the bourses are more evenly split at midday, with six of the 15 exchanges in the green, led by Russia (+1.03%) while eight of the bourses are in the red, led by Finland (-1.11%).  The CAC (-0.06%), DAX (-0.32%), and FTSE (+0.52%) are typical of the spread and lead the region on volume as usual.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the day.  The DIA implies a -0.18% open, the SPY is implying a -0.26% open, and the QQQ implies a -0.28% open at this hour.  Meanwhile, 10-year bond yields are flat at 4.29% and Oil (WTI) is up a little more than two-thirds of a percent to $87.90 per barrel in early trading.

The major economic news scheduled for Tuesday includes the EIA Short-Term Energy Outlook and WASDE Ag Report (both at noon), August Federal Budget Balance (2 p.m.), and API Weekly Crude Oil Stock Report (4:30 p.m.).  In addition, SEC Chairman Gensler is scheduled to testify before the Senate Banking Committee at 10 a.m. There are no major earnings reports scheduled for Tuesday, either before the bell or after the close. 

In economic news later this week, on Wednesday, August Year-on-Year CPI, August Month-on-Month CPI, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get August Month-on-Month PPI, Weekly Initial Jobless Claims, August Retail Sales, July Business Inventories, July Retail Inventories, and the Fed Balance Sheet. Then Friday, August Export Price Index, August Import Price Index, NY Empire State Mfg. Index, August Year-on-Year Industrial Production, August Month-on-Month Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Wednesday, CBRL reports.  On Thursday, we hear from ADBE, CPRT, and LEN.  Finally, on Friday, there are no major earnings reports scheduled again.

In miscellaneous news, AAPL is expected to introduce another new iPhone (v15) today.  At the same time, the US vs. GOOG antitrust case gets underway.  This case accuses GOOG of using exclusive (or effectively exclusive) business contracts to stop competitive search engines from gaining or even maintaining any market share. GOOG is expected to counter by claiming the definition of search is too narrow and if you include searches on AMZN, the AAPL store, SPOT, DASH, and many others then it is possible to say GOOG does not have a search monopoly.

In last-minute stories, Bloomberg reports that Mexico has overtaken China to become the US’s largest supplier of goods (origination point of US imports). Interestingly, Mexico’s currency is the strongest-performing one in the world so far this year, which is saying something given the strength of the Dollar. The Mexican stock market is also one of the best-performing. Elsewhere in the world, Russia’s Putin traveled across his country to meet North Korea’s Kim Jung Un. Putin is desperate for more weapons for his so-far-failed invasion of Ukraine and North Korea has always been and probably will always be in desperate need of economic assistance.

With that background, it looks like the Bears want to test the Bulls resolve after a positive Monday. The SPY and DIA are both retesting their T-line (8ema) from above and the SPY is retesting its 50sma from above in this morning’s premarket action. All three major index ETFs are showing very small candles at this time. So, it may be a wait-and-see market or it could be that there is indecision early this morning. Either way, we are not seeing major volatility or move so far before the opening bell. The very short-term and mid-term trends remain bullish, but only just so in the short-term. (The previous short-term downtrend has been broken, but we have not yet proven we can hold above it. So, it is really a presumed resumption of the mid-term uptrend.) As far as extension goes, none of the major index ETFs are very far from their T-line and the T2122 indicator is still sitting in the lower end of its mid-range. So, there is plenty of slack for either the Bulls or the Bears to make a move. Again, it’s a matter of finding the buyers or sellers to get the move started.

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

Friday was a “much ado about nothing” day in the market.  All three major index ETFs opened flat.  Then they rallied to the highs of the day by mid-morning and slowly sold off, reaching the lows of the day at about 3:30 p.m. Finally, the SPY, DIA, and QQQ all rallied modestly in the last 30 minutes.  This action gave us white-bodied, indecisive candles in all three major index ETFs.  The SPY and QQQ printed high-wick, Inverted Hammer type candles while the DIA printed more of a white-bodied Spinning Top candle.  All three retested their T-lines from below…and failed that test, with DIA closing right at its T-line (8ema) while the other two closed below theirs.  The SPY and QQQ also retested their 50smas from below, with QQQ managing to close about a dime above its 50sma while the SPY filed its test.

On the day, five of the 10 sectors were in the green with Energy (+0.91%) out in front leading the way higher and Industrials (-0.45%) by far the biggest loser among the sectors.  At the same time, the SPY gained 0.15%, DIA gained 0.24%, and QQQ gained 0.14%.  VXX fell a bit over two percent to close at 21.27 and T2122 climbed up out of the oversold territory to the lower end of the mid-range at 29.33.  10-year bond yields were up slightly to close at 4.258% while Oil (WTI) gained another half of a percent to close at $87.33 per barrel.   This all happened on far-below-average volume in all three of the major index ETFs.  So, on balance, the bulls won the day.  However, there was not a lot to feel good about for the Bulls with those upper wicks and failures to clearly break through moving averages.  

For the week, all three major index ETFs printed black, Bearish Harami candles.  The DIA also fell through its weekly T-line (8ema).  However, both the SPY and QQQ retested their own weekly T-lines and passed that test, remaining above.  All three major index ETFs remain well above their weekly 50sma, with the SPY and QQQ far above.  Those latter two remain in a weekly PBO (potential J-hook in formation) pattern of a strong bullish uptrend.  DIA is in the same weekly pattern, but is in a much weaker (and possibly breaking or being challenged uptrend…depending on how you draw it).

There was no major economic news reported Friday.  However, to summarize Fed speakers during the week, we repeatedly heard something like there is no hurry to move and it may well be worth not hiking in September…but we are not declaring victory over inflation and it is very possible we may need to hike or otherwise tighten later.  This included Dallas Fed President Logan (normally more hawkish) saying late Thursday “Another skip could be appropriate … this month but my base case, though, is that there is work left to do.”  Another usually hawkish member, Fed Governor Waller came right out and said it earlier, “We can just sit (to see if inflation keeps trending in a downward direction).”  Meanwhile, other Fed speakers tended to tow the “let’s wait to see what more data says” line in their comments during the week.  For example, NY Fed President Williams said “It’s still an open question as we go forward.  Have we got sufficiently restrictive to achieve that (a 2% Fed inflation goal)?”  While this went on, as of the Friday close, Fed futures indicated that the market has priced in a 93% chance of no rate hike at the September FOMC meeting.  (That probability is up 7% from one month prior.)

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The US dollar completed an eight-straight week of gains against its peers on Friday.  Elsewhere, a Fed report Friday showed that US household wealth jumped to a record in Q2, increasing 3.7% to $154.3 trillion.  This included a $2.6 trillion increase in US household equity holdings, while the value of their real estate rose just $2.5 billion in the quarter. Of course, the wealth gap continues to widen with most of than wealth concentrated in the top 10 percent of American households. (Which, in part, helps explain the “woe is us” reports of credit card debt climbing and people living paycheck-to-paycheck at the same time wealth is at record levels.)

In stock news, late Thursday night, an independent research group announced they had found a security flaw in AAPL iPhones that had allowed Israeli firm NSO to plant spyware on iPhones.  Then on Friday, ABG said it was buying private firm Jim Koons Automotive for $1.2 billion in order to expand its presence in the Mid-Atlantic region. Later, Bloomberg reported that BABA has decided to temporarily shelve its plans to IPO its Freshippo grocery chain due to poor performance in the consumer stock sector recently.  (BABA was hoping for a $6 billion – $10 billion valuation, but investment houses were advising roughly $4 billion would be achieved now.)  At the same time, Chinese auto market analyst CPCA announced that TSLA had more than doubled its Chinese market share in August thanks to significant discounts and tax breaks.  This allowed TSLA to return to unit sales growth for the month. Later, Reuters reported plastics and chemical maker COVTY has entered into discussions with suitor Abu Dhabi National Oil Company.  (In August, ADNOC had offered $12.4 billion for COVTY.)  Elsewhere, the Financial Times reported that the ARM IPO is already oversubscribed by five times (Reuters reported the number was more than six times oversubscribed) in the widely-watched tech IPO.  Later, SLTA announced it is expanding its battery production capacity by 60% globally.  No specific timetable was provided, but the company already has six battery plants under construction around the world and said there are more to come. At the same time, GNL shareholders approved a planned merger with RTL in an all-stock deal.  After the close, NKLA announced that one of its electric semi-trucks caught fire near company headquarters and that this was the second such incident in the last week.  Also after the close, GT announced they would cut 1,200 jobs in Europe, Africa, and the Middle East.

In stock government, legal, and regulatory news, KR announced it will sell 400 stores to private firm C&S Wholesale Grocers for $1.9 billion in an effort to gain approval for its $25 billion acquisition of ACI.  Elsewhere, in Congress, the House announced it will be holding more AI hearings this week including testimony from the President of MSFT and the Chief Scientist of NVDA.  On the Senate side, on Tuesday they will also hold an AI hearing.  Separately, on Wednesday, Senate Majority Leader Schumer is hosting a forum (non-hearing) intended to allow Senators and Congressmen to become more informed on AI matters.  These will consist of various industry presentations and Q&A sessions including one by META CEO Zuckerberg and TSLA CEO Musk.  At the same time, an FTC Administrative Judge ruled against INTU on Friday.  The ruling found that INTU engaged in deceptive advertising and deceived at least 4.4 million customers with ads claiming they were offering “free” tax products and services.  The ruling issued a “cease and desist” order, but no financial penalty.  Later KR announced they had agreed to a $1.4 billion settlement (paid over 11 years) to resolve thousands (most) of outstanding lawsuits by US states and local governments over opioid distribution.  This included $1.2 billion going to states, $177 million in attorney fees, and $36 million to Native American tribes.  In the afternoon, a US federal judge ruled META must face a lawsuit claiming it violated the medical privacy of patients who used medical facility websites that included a META Pixel tracking tool.  The judge ruled against META’s motions to dismiss the case.  In the afternoon, the FDIC released a report saying the agency should have been more aggressive in its policing of the risk management of FRCB prior to its failure in May.  (It said it was unclear if this could have saved the bank given the speed at which depositors pulled their money out of the bank.  However, it should have done more and sooner.)  After the close, the NHTSA cited inadequate inspections as the cause of a UAL 2021 jet engine failure.  Soon after the failure, the FAA ordered immediate inspections of all BA jets with RTX-made Pratt & Whitney 4000 engines.

In Autoworker contract talks or strike news, on Friday, STLA offered the UAW a 14.5% wage increase over four years.  This is far short of the UAW’s desired 46% increase and a reduction to a 32-hour work week.  Previously, GM offered a 10% immediate raise, followed by two other 3% increases over the four years.  The week before, F had offered 9% increase over four years along with a 6% lump-sum one-time payment.  The UAW contract with all of the “Big 3” automakers ends Thursday night at midnight.

Overnight, Asian markets were mixed but leaned toward the green side.  Shenzhen (+0.98%), India (+0.89%), and Shanghai (+0.84%) paced the gains.  Meanwhile, Taiwan (-0.86%), Hong Kong (-0.58%), and Japan (-0.43%) paced the 5 (or 12) down exchanges.  However, in Europe, we see nearly green across the board at midday.  Only Russia (-0.82%) is in the red while the CAC (+0.42%), DAX (+0.34%), and FTSE (+0.06%) lead the 15 green exchanges higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.19% open, the SPY is implying a +0.41% open, and the QQQ implies a +0.61% open at this hour.  At the same time, 10-year bond yields are up a bit to 4.294% and Oil (WTI) is off by three-quarters of a percent to $86.89 per barrel in early trading.

There is no major economic news scheduled for Monday.  There are also no major earnings reports scheduled for before the opening bell.  However, after the close, CASY and ORCL report.

In economic news later this week, on Tuesday we get the EIA Short-Term Energy Outlook, WASDE Ag Report, August Federal Budget Balance, and API Weekly Crude Oil Stock report.  Then Wednesday, August Year-on-Year CPI, August Month-on-Month CPI, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get August Month-on-Month PPI, Weekly Initial Jobless Claims, August Retail Sales, July Business Inventories, July Retail Inventories, and the Fed Balance Sheet. Then Friday, August Export Price Index, August Import Price Index, NY Empire State Mfg. Index, August Year-on-Year Industrial Production, August Month-on-Month Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer 12-month Inflation Expectation, and Michigan Consumer 5-Year Inflation Expectations are reported.

In terms of earnings reports later this week, on Tuesday there are no major reported scheduled.  Then Wednesday, CBRL reports.  On Thursday, we hear from ADBE, CPRT, and LEN.  Finally, on Friday, there are no major earnings reports scheduled again.

In miscellaneous news, on Friday, the SEC approved a NASDAQ request to allow a new AI-driven order type.  The new M-ELO order type would use AI to speed up the matching of orders at the midpoint of the bid-ask spread.  The new order type, first proposed in 2018, would allow investors to trade with 10-millisecond waiting periods.  (This means these orders would fill about 20% faster, greatly reduce non-fills, and reduce required holding times by more than 11%.)  It was not mentioned, but this certainly seems aimed at high-frequency traders and the benefit of brokers. Elsewhere, the state of AK filed suit against the US Dept. of Agriculture, seeking to block the decision announced Wednesday that President Biden was reversing a Trump-era ruling allowing large swaths (9.37 million acres) of the Tongass National Forest to be opened for logging, mining, and oil exploration and production.  Biden’s order canceled dozens of oil and gas leases issued in the last days of the Trump administration. Finally, on Sunday, the now-former CEO of BABA resigned. (It was not long ago that he was “relieved” of CEO and Chairman duties to focus on the new BABA Cloud business.) The unexpected move riles BABA shares in China.

In late-breaking geopolitical news, over the weekend, President Biden and Indian PM Modi announced a new international transportation network project meant to rival China’s “Belt and Road” initiative at the G20 Summit.  The idea is to invest in infrastructure connecting Asia, the Middle East, and Europe.  Not only will US-based multinationals benefit, but it will make the US and India an alternative funding source (competitor) to help limit the increase in Chinese influence in the world (achieved through financing and then takeover).  In a separate initiative, on Sunday it was announced the Biden Administration and Saudi Arabia have jointly entered into talks with multiple African nations to secure ownership of various mining operations (mostly rare earth mines).  Under the joint deals being offered, the Saudis would buy the mines and the US would be guaranteed the right to buy percentages of those mine’s production.  (Implied, but unstated, is that US force would be there to ensure the security of the mines should anything of an Islamic or Wagnerian nature threaten them.)  Finally, there was a major 6.8 earthquake in Morocco Friday.  (This was made “more major” because the region was not built or prepared for such a disaster.)  So far, 2,400 are known dead and 300k are homeless.

With that background, it looks like the Bulls are trying to make another move this morning. All three major index ETFs are back above their T-line (8ema) in the early session. The SPY and QQQ are also back above their 50sma. However, with its black premarket candle, the DIA has, so far, failed a retest of its 50sma. This leaves the SPY, QQQ, and DIA all on the green side of flat at least at this point. The very short-term and mid-term trends are now bullish, but only just so in the short-term. (The previous short-term downtrend has been broken, but we have not yet proven we can hold. So, it is really a presumed resumption of the mid-term uptrend.) As far as extension goes, none of the major index ETFs are far from their T-line and the T2122 indicator is sitting in the lower-end of its mid-range. So, there is plenty of slack for either the bulls or the bears to make a move…again, if they can find the buyers or sellers.

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

Thursday gave us another schizophrenic day with a gap in one direction and the market then trading in the opposite direction all day.  In this case, we gapped down 1.21% in the QQQ, 0.69% in the SPY, down just 0.11% in the DIA.  All three major index ETFs then traded sideways for an hour.  However, at that point, the Bulls stepped in to drive a slow, modest rally that lasted the entire rest of the day.  The SPY and QQQ climbed back up into the opening gap while DIA crossed its much smaller gap to close a little to the positive side.  This gave us white-bodied candles in all three index ETFs that could all be seen as larger-bodied Spinning top-type candles in the SPY, QQQ, and DIA.  QQQ ended the day testing its 50sma from below and DIA was just below its T-line (8ema) at the high of the day.

On the day, eight of the 10 sectors were in the red with only Utilities (+0.93%) by far the strongest while Technology (-1.13%) and Basic Materials (-0.97%) led the way lower. At the same time, the SPY lost 0.31%, DIA gained 0.20%, and QQQ lost 0.72%.  VXX was essentially flat at 21.71 and T2122 climbed but remained inside of the edge of oversold territory at 17.25.  10-year bond yields fell to close at 4.254% while Oil (WTI) dropped 0.81% to close at $86.83 per barrel. (That was Oil’s first drop in 10 days.)  This all happened on lower-than-average volume in all three of the major index ETFs.  So, the Bears had control at the open, but once they got their footing, the bulls were in charge of a tepid rally the rest of the way. 

The major economic news reported Thursday included Weekly Initial Jobless Claims which came in well below expectations at 216k (compared to a forecast of 234k and the prior week’s 229k).  At the same time, Q2 Nonfarm Quarter-on-Quarter Productivity came in at +3.5% (a bit below the +3.7% forecast but far better than the Q1 -2.1%).  In addition, Q2 Quarter-on-Quarter Unit Labor Costs rose 2.2% (far outstripping the +1.6% forecast but also dramatically lower than the Q1 +4.2%).  Later, the EIA Weekly Crude Oil Inventories followed Wednesday evening’s API data by showing a much larger-than-expected drawdown of 6.307 million barrels (versus a forecast calling for a 2.064-million-barrel draw but still far lower than the prior week’s 10.584-million-barrel drawdown).  Finally, after the close, the Fed reported that they reduced their Balance Sheet by another $20 billion from $8.121 trillion to $8.101 trillion.

In Fed and regulator news, on Thursday, the FDIC reported that US bank profits and deposits were broadly steady in Q2.  This suggested that the turmoil in the sector in Q1 had passed.  The report said industry profits in Q2 fell 11.3% year-on-year from 2022 to $70.8 billion.  (If the SIVB and SBNY failures were stripped out of the report, the rest of the sector increased profits by 5.7% in Q2 versus 2022.)  However, deposits declined for the fifth quarter in a row, down 0.5% quarter-on-quarter.  Elsewhere, the Senate confirmed the last open Fed Governor seat, approving Adriana Kugler (who is a labor market expert).  Later, NY Fed President Williams told Bloomberg “We’ve got policy in a good place, but we’re going to need to continue to be data dependent.”  He went on to say that it was an “open question” whether monetary policy is restrictive enough to bring the economy back into the proper balance of inflation and full employment.  After the close, Dallas Fed President Logan said that while it could be appropriate to skip an interest rate hike in September, more policy tightening may be needed before we reach the 2% goal.  She said, “Another skip could be appropriate when we meet later this month, … but skipping does not imply stopping.”

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In stock news, on Tuesday, SUM announced they have agreed to buy Columbian cement producer Cemento Argos for $3.2 billion in cash and stock.  (That deal would make SUM the largest cement maker in the US.)  Elsewhere, NWSA said it’s engaged in various negotiations with artificial intelligence companies over the use of content produced by AI.  At the same time, MGA (electric vehicle components maker) told an investors conference that it expects to roughly double its sales this year and double again by 2025.  Later, the CEO of CHTR said it was urgent to resolve its contract dispute with DIS.  (DIS has blocked CHTR customers from accessing DIS content, including ESPN during the highest-rated football season and CHTR is hemorrhaging subscribers as a result.)  In cost-cutting news, WMT announced changes to its entry-level store compensation plans to make cashiers, stockers, self-checkout helpers, department associates, and personal shoppers all receive the same hourly wage.  The move was meant to take advantage of a slowing job market (which I must have missed happening).  WMT did not specify the amount it expects the move to save.  Meanwhile, the CFO of BA said the company still expects to hit its annual 737 deliveries goal, despite a new production problem that has slowed deliveries of its bestselling 737 MAX.  However, he also said BA will be on the low end of its 400-450 jet target.  In other BA news, SPR told an investor conference Thursday that it has asked BA to absorb more of the financial pain caused by inflation and parts shortages.  The CEO told the conference that their contracts with BA are “not sustainable.”  (BA did not reply to Reuters requests for comment.)  At the same time, the CFO of RIVN told a GS conference that the company expects a significant decrease in the cost of battery materials during 2024, and will even see some of those effects in Q4 of 2023. 

In stock government, legal, and regulatory news, AAPL suffered a second-straight terrible day after China banned the use of iPhones by government officials.  (This move by China is widely seen as both a signal to AAPL, which has recently been moving operations out of China and into places like India, and to the US government that it could ban iPhones altogether if trade wars continue.)  a three-judge federal appeals court panel revived a lawsuit against GM from a black safety supervisor.  The suit accused GM of racism and sexism that created a hostile work environment over complaints of workers displaying nooses and Confederate flags as well as using racial and sexist slurs toward herself and other black employees for a prolonged period without company sanctions.  At the same time, MSFT announced it would pay the legal damages that its customers might suffer if they are sued for copyright infringement for using the output of MSFT AI products.  The potentially legally risky plan could also be a marketing boon for its co-pilot assistant products.  At nearly the same time, MSFT also announced that it suspects Chinese-controlled social media accounts are already using AI to influence voters as the US prepares to enter the heart of the 2024 election cycle.  MSFT said they have made the US Dept. of Justice aware of its research findings.  (Screenshots of META’s Facebook and X, formerly Twitter were provided.)  After the close, Reuters reported that ZM has been in talks with the US FTC and EU, UK, and German competition regulators, outlining anti-competitive behavior by MSFT related to chat and video apps and bundling with MSFT’s dominant Office suite.

In Autoworker contract talks or strike news, GM offered a 10% immediate wage hike and two additional 3% increases over four years.  The offer also included a $5,500 ratification bonus (immediate) as well as $5,000 in potential bonuses over the life of the contract.  The UAW President quickly called it “an insulting proposal that doesn’t come close to an equitable agreement.”  He continued by implying the threat of a strike as of midnight on September 14.  Elsewhere, the UAW said it plans to deliver a counter-proposal to STLA Friday.  Meanwhile, F is taking a different tact, by giving 8,000 UAW hourly workers a $4.33/hour ($9,000/year) raise effective immediately (a week ahead of the expiration of the current contract and before a new contract has been agreed.  For what it is worth, analysts say a strike against STLA is the most likely thing to happen with a strike against GM and F held as negotiating escalation tools by the UAW.

Overnight, Asian markets were nearly red across the board on a modest move day.  Only India (+0.47%) was in the green, while Japan (-1.16%), New Zealand (-0.72%), and Singapore (-0.58%) led the region lower.  In Europe, we see a similar picture taking shape at midday.  Three of the 15 bourses are in the green.  However, the CAC (-0.09%), DAX (-0.41%), and FTSE (-0.09%) lead the way lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.19% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.30% open at this hour.  At the same time, 10-year bond yields are flat at 4.254% and Oil (WTI) is up two-thirds of a percent to $87.48 per barrel in early trading.

There is no major economic news scheduled for Friday.  The only major earnings report on the day is KR before the opening bell.  There are no reports scheduled for after the close.

After the close, DOCU and RH reported beats on both the revenue and earnings lines.  It is worth noting that DOCU raised its forward guidance.  This morning, KR was supposed to report at 7:15 a.m.  However, for some reason, they are delayed and have not posted results yet as of 7:45 a.m.  (Late, KR reported a miss on revenue and a beat on earnings. It has not posted any change to guidance yet.)

In miscellaneous news, traffic on the ChatGPT website fell for the third month in a row.  Since they are widely accepted as the leader in the AI space, this begs the question as to whether “AI mania” is subsiding or if this is just the result of numerous competitors diluting the ChatGPT market leadership.  Elsewhere, the Financial Times reports that GS will begin following the “Jack Welch at GE” plan, meaning they now have plans to fire 1%-5% of the GS workforce annually, based on performance evaluations. This “culling of the deadwood” would lead to 450 to 2,500 firings (and presumably replacement hires) each year. Meanwhile, CNBC did an analysis of just how much impact “shrinkage and theft” are really impacting retailer profits.  (The topic has been a major talking point among right-wing media and has even been cited as an excuse by some retailers to explain poor results.)  CNBC analyzed seven big retailers (TGT, M, DKS, LOW, FL, ULTA, DLTR, TJX, and WMT) balance sheets.  Contrary to the general narrative of the right, they found that inventory losses were only a small fraction of the retailer’s sales and “pale in comparison to other factors squeezing margins.”  (Those factors include “excessive” discounting and promotions.)  In fact, CNBC found that shrink is in line with the industry-standard losses over the last decade (1% – 1.5% of sales).  This suggests that despite individual well-publicized cases that are aided by ever-present video, “organized theft rings” and “people just feeling entitled to take ransack or take what they want” is not really more of a problem than it was a decade or two ago.  It just seems that way because companies are looking for excuses and one side of the political aisle wants to push the narrative that things are terrible.  (To be fair, this is certainly not exclusively a tactic of the right.  It has been said that there are only two themes to politics.  “Things have gone to hell, throw the bum out” and “You’ve never had it this good, give me another term.”)  The point is, that theft was mostly just a convenient excuse, taking advantage of one part of society that wanted to push a certain narrative, being used by companies to justify poor performance.

In geopolitical news, Bloomberg reports that India is currently studying its potential responses to a Chinese invasion of Taiwan.  The report says this comes after the US made discreet inquiries about how India might contribute in the event of war, which would result when the US steps in to defend Taiwan.  While this made news and is being reported as a “new study commissioned by India’s top military commander,” I have serious doubts whether that is entirely true.  Frankly, both Indian and the US military and political leadership would need to be completely incompetent if such a scenario had not been extensively studied and various responses discussed, over and over again.  The topic is probably revisited at least annually in each country. In fact, I would bet that the subject has been discussed between the militaries and between the political leaders of the two countries repeatedly over many years.  (At least ever since India started to think of itself as an emerging power in Asia.)  So, I suspect this is just a story leak meant to make news and apply a bit of pressure on China as the G-20 meeting gets going.  Still, it made Bloomberg’s top headlines.

With that background, it looks like the Bulls tried to make a move in the premarket, but have sold off since that point. All three major index ETFs started the early session at or very near their T-line (8ema), but have since sold down to create black-bodied premarket candles. (QQQ has also done the same with its 50sma this morning.) This leaves the SPY, QQQ, and DIA just on the red side of flat as we get nearer to the open. The short and mid-term trends remain bearish with the long-term trend remaining bullish across all three major index ETFs. As far as extension goes, none of the major index ETFs are far from their T-line and the T2122 indicator is sitting just inside the top edge of the oversold territory. So, both sides have room to run, if they can gain the momentum to do so. Finally, don’t forget it’s Friday. Pay yourself and prepare your account for the weekend news cycle. Hedge, lighten up, or get some insurance (options) to mitigate risk as you see appropriate.

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

Tuesday gave us a modest gap lower at the open (down 0.10% in the SPY, up 0.01% in the DIA, and down 0.23% in the QQQ).  At that point, we saw a little follow-through by the Bears that bottomed out at about 10:40 a.m.  Then the Bull stepped in to rally us until shortly after 11 a.m.  From there, the Bears led a long, slow, wavy decline right into the close on the SPY and DIA.  Meanwhile, the QQQ ran back and forth between the late morning high and the Friday closing level.  This action gave us black-bodied candles with very little wick in the SPY and DIA (with the DIA crossing back just below its T-line and 50sma).  Meanwhile, the QQQ printed a white-bodied Spinning Top candle.

On the day, nine of the 10 sectors were in the red with only Energy (+0.10%) hanging onto green territory while Basic Materials (-0.1.93%) and Industrials (-1.74%) led the way lower.  At the same time, the SPY lost 0.43%, DIA lost 0.55%, and QQQ gained 0.13%.  VXX gained two-thirds of a percent to close at 21.35 and T2122 plummeted back down to the other side of the mid-range to just outside the edge of oversold territory at 21.48.  10-year bond yields shot up to close at 4.266% while Oil (WTI) gained another 1.39% to close at $86.74 per barrel. This all happened on extremely low volume (not much more than half of the 50-day average) in all three of the major index ETFs.  So, the Bears had control on the day, but it sure felt like just a tepid pullback after last week’s pre-holiday rally. 

The major economic news reported Tuesday was limited to July Factory Orders, which came in down but better than expected at -2.1% (compared to a forecast of -2.5% but much worse than the June reading of +2.3%).

In Fed news, Fed Governor Waller said Tuesday that the latest economic data was giving the FOMC space to wait and see whether it needs to raise rates again.  He went on to note that he currently sees nothing that would force the Fed to raise the cost of short-term borrowing again.  Waller said, “we have to wait and see if this inflation trend is continuing … I want see a couple of months continuing along this trajectory before I say we’re done doing anything.”  (For what it’s worth, the market is pricing in only an 8% chance of a rate hike in just over two weeks at the September meeting and just over a 40% chance of a hike at any of the three remaining scheduled 2023 meetings.)  Later in the day, the NY Fed said that it believes the neutral rate (neither restrictive or stimulative), known as R-star had fallen in Q2.  The Fed analysis pegged 0.57% as the R-star for Q2, down from 0.68% in Q1.  It is worth noting that analysts add the Fed target of 2% inflation to that R-star.  In this case, it would mean a 2.57% rate would be neutral for the economy.  Since the Fed currently has rates at 5.25% to 5.50%, that means the Fed is being very restrictive.

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In stock news, on Tuesday, WBD announced that the Hollywood writer’s strike will hit the company’s 2023 profits.  The company expects the impact to be $300 million – $500 million for 2023 reducing earnings to $10.5-$11 billion.  Elsewhere, STLA said that its testing shows that 24 of the company’s existing internal combustion engines work, without modification, on new e-fuels.  (E-fuels are synthetic fuels that blend existing standard fuels with carbon that has been captured and hydrogen created from sustainable electric sources like wind, solar, and nuclear.)  At the same time, UAL announced that it had resumed flight departures after a computer issue had forced them to have the FAA ground all non-departed flights earlier in the day.  By midday, MA denied reports that the company is planning to increase the fees charged merchants when a credit card is processed.  This came after the Wall Street Journal reported it had obtained documents and sources claiming that both MA and V have plans to raise those fees in October and April respectively.  After the close, Reuters reported that the head of GM manufacturing said that current UAW demands “have significant costs attached that would threaten our ability to maintain our manufacturing momentum.”  Also after the close, ENB announced they had agreed to acquire 3 utilities from D for a total purchase price of $14 billion ($9.4 billion in cash and $4.6 billion in assumed debt).  In the early evening, AAPL announced it had extended its deal with soon-to-IPO ARM in a deal that extends until 2040.  (AAPL uses ARM chips in all of its phones, tablets, and computers.  During the evening, COIN announced it would be launching a new lending platform aimed at large institutional investors.  (A regulatory filing shows that COIN has raised $57 million to fund the development and launch of this new platform.)

In stock legal and regulatory news, TSLA filed suit in China against Chinese chip designer Bingling, claiming the company violated its intellectual property rights.  (Bingling specializes in chip design related to battery efficiency optimization.) Later, the NHTSA announced a decision that 52 million airbag inflators should be recalled.  (The agency had first called for the recall in May, but the maker, Arc Automotive, refused.)  This would impact 12 automakers, including GM, F, STLA, TSLA, TM, HYMTF, MBGAF, BMWYY, VLKAF, and models from 2000 through early 2018.  The next step will be a public hearing in October to compel the recall.  After the close, the Wall Street Journal reported that the FTC is planning to file an antitrust suit against AMZN later this month after the e-commerce giant refused to offer concessions related to its pricing and rules requiring third-party sellers to use “Fulfillment by Amazon” to avoid fees.

On Monday evening, ZS posted beats on both the revenue and earnings lines.  The company also raised its forward guidance.  So far this morning, CNM reported in-line revenue but missed on the earnings line by a penny.  At the same time, EXPR missed on both the top and bottom lines.

US mortgage demand fell last week to a 27-year low, even as interest rates fell slightly.  Total applications for new home purchase loans fell two percent for the week (and were 28% lower than one year prior).  Meanwhile, refinancing applications were down five percent week-on-week (and were 30% lower than the same week in 2022).  This all took place while the average rate for a 30-year, fixed-rate, conforming loan dropped from 7.31% to 7.21% (with closing points also decreasing from 0.73 to 0.69).

Overnight, Asian markets were mixed but leaned toward the downside.  Japan (+0.62%) was, by far, the biggest gainer.  Meanwhile, Australia (-0.78%) and South Korea (-0.73%) were by far the biggest losers on the session.  In Europe, things are more dicey at midday with only Belgium (+0.09%) hanging onto green territory.  On the other side, the CAC (-0.71%), DAX (-0.40%), and FTSE (-0.66%) lead the rest of the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing to a modestly red start to the day.  The DIA implies a -0.19% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.27% open at this hour.  At the same time, 10-year bond yields are back down to 4.244% while Oil (WTI) is off a third of a percent to $86.38 per barrel in early trading.

The major economic news scheduled for Wednesday includes July Imports, July Exports, and July Trade Balance (all at 8:30 a.m.), August S&P Global Composite PMI and August S&P Global Services PMI (both at 9:45 a.m.), August ISM Non-Mfg. Employment, August ISM Non-Mfg. PMI, and August ISM Non-Mfg. Price Index (all at 10 a.m.), Fed Beige Book (2 p.m.), and API Weekly Crude Oil Stock Report (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to CNM.  However, after the close, AEO, PLAY, and GME report.   

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Q2 Nonfarm Productivity, Q2 Unit Labor Costs, EIA Crude Oil Inventories, and Fed Balance Sheet are reported.  We also have 3 Fed speakers (Harker at 10 am, Williams at 3:30 pm, and Bowman at 4:55 pm).  Finally, on Friday there are no major economic news reports.

In terms of earnings reports later this week, on Thursday, we hear from ABM, DOOO, DBI, KFY, SAIC, TTC, DOCU, and RH.  On Friday, KR reports.

In China news, last week, while US Commerce Sec. Raimondo was visiting, China unveiled the latest Huawei smartphone.  A Canadian analyst firm acquired and tore one down. What they found was that China has made a massive leap in capability.  The Huawei phone uses a Chinese-made 7nm chip that was created using UEV (extreme ultraviolet lithography).  Prior to this, the most advanced chip China was known to create was 14nm and even the top Western companies only began using UEV lithography in 2019.  7nm still only yields 50% (half the chips made are bad), but this all means China is only one generation behind the West (TSM and INTC for example) rather than previous expectations that China was 3-4 generations behind.  It also means that the sanctions dating back to 2020, and greatly expanded by President Biden, have either been circumvented or made irrelevant by Chinese internal development. Elsewhere, overnight China announced it will increase its support of the property sector. This caused Chinese property developer stocks to spike higher with Evergrande up 83% and Sunac China Holdings up 68%.

In miscellaneous news, Oil settled at a 10-month high on Tuesday after both Russia and Saudi Arabia announced they are extending their voluntary supply cuts through the end of the year.  (Markets had expected another 1-month extension…not the 3-month extension announced.)  The continued strength of the US Dollar also helped oil, as bond rates rose again Tuesday (on a post-holiday flood of investment-grade corporate bonds that took away Treasury buyers and thus drove up bond yields).  Elsewhere, Turkey’s President Erdogan ended his talks with Russia’s Putin with any public progress on resuming the “Grain deal.”  Still, Erdogan said it would soon be possible to revive the deal and get Ukrainian grain to market. 

With that background, it looks like the Bears are looking to start the shortened week with a move lower. DIA even retested its T-line (8ema) in the premarket. However, it has the strongest early session candle bouncing up off the level while the other two major indices are giving us indecisive gap-down candles so far. The trend remains bullish with all three major index ETFs above a rising T-line, 17ema, and 50sma. As far as extension goes, none of the major index ETFs are too far extended from their T-line and the T2122 indicator is sitting right at the upper edge of the midrange (or just outside of overbought territory if you prefer). So, both sides have the room to run, if they can muster the momentum.

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 Friday, markets opened higher, gapping up 0.62% in the SPY, up 0.62% in the DIA, and up 0.67% in the QQQ.  However, that was the last we saw of the Bulls with all three major index ETFs selling off until about noon.  (QQQ had faded its morning gap by 10:35 am while SPY and DIA faded their own gaps by 11:50 am.)  From that low of the day at noon, the SPY and DIA drifted slowly and slightly higher the rest of the day (closing back inside the opening gap area) as QQQ rode waves sideways and did not quite reach the Thursday close level at the end of the day.  This action gave us a gap-up, inside day, black-body Spinning Top in the DIA.  At the same time, we got a gap-up, black-bodied candle in the SPY.  Meanwhile, the QQQ printed a gap-up, Dark Cloud Cover signal.  All three remain above their T-line (8ema) and did not even retest those levels.  The same goes for the DIA not retesting its 50sma, but to be fair, DIA is not far above either average. 

On the day, seven of the 10 sectors were in the green with Energy (+1.96%) far out front leading the way higher while Communications Services (-0.88%) lagged behind the other sectors.  At the same time, the SPY gained 0.19%, DIA gained 0.34%, and QQQ lost 0.11%.  VXX dropped 1.35% to 21.21 and T2122 climbed back up to the edge of the overbought territory at 76.92. 10-year bond yields pulled back slightly to close at 4.18% while Oil (WTI) gained 2.89% to close at $86.05 per barrel. This happened on modestly below-average volume in all three of the major index ETFs.  So, the bullish trend of the week continued but it felt tepid with a strong gap in one direction and then trading the rest of the day that went back the other way. 

The major economic news reported Friday included August Average Hourly Earnings which rose a bit less than expected at +4.3% (year-on-year), compared to a forecast of +4.4% and the July reading of +4.4%.  It is worth noting that the month-on-month Avg. Hourly Earnings also came in a bit below forecast at +0.2% versus both a forecast of +0.3% and the July value of +0.3%.  At the same time, August Nonfarm Payrolls grew more than predicted at +187k (compared to a forecast of +170k and the July reading of +157k).  Meanwhile, August Private Nonfarm Payrolls were reported much stronger than anticipated at +179k (versus a forecast of +150k and a July value of +155k).  The August Participation Rate increased to 62.8% (compared to the forecast and July numbers which were both 62.6%).  This drove a jump in the August Unemployment Rate to 3.8% (from the forecast and July readings which were both 3.5%).  Later the August S&P US Mfg. PMI came in at 47.9 (better than the 47.0 forecasted but lower than the July 49.0 value).  Then the August ISM Mfg. PMI was better than expected at 47.6 (versus a forecast of 47.0 and a July reading of 46.4).  At the same time, the August ISM Mfg. Price Index was reported well above predicted at 48.4 (compared to a 43.9 forecast and a 42.6 July reading).  So, to summarize, wages grew by slightly less than expected and jobs were also up much more than expected.  However, a pop in participation led to a pop in the unemployment rate.  Bloomberg characterized this as a “controlled cooling.”  Meanwhile, manufacturing was better than anticipated but still contracting both in the US and globally.

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In stock news, on Friday, the Wall Street Journal reported that Saudi Aramco is now strongly considering issuing a $50 billion secondary before the end of the year. If done, this would essentially double the world’s largest oil company’s outstanding shares.  This seems a bit odd since the company just increased dividend payouts by $10 billion in August.  However, the $50 billion will be used to bolster the Saudi sovereign wealth fund (which is a major investor in US markets).  Later, HOOD announced it would buy a block of stock formerly owned by Sam Banman-Fried (disgraced “wunderkind” indicted on crypto fraud and conspiracy charges).  The block was seized by the US government in November and is now held by the US Marshal Service.  The sale will be for $605.7 million or $10.96/share.  Elsewhere, entertainment stocks took a hit Friday as a major contract dispute between DIS and CHTR (second-largest cable TV provider) over the television distribution fees of their deal.  Later, TSLA announced a new, restyled Model 3 in China with a higher price.  At the same time, TSLA slashed the price of its premium vehicles, which include the “Full Self-Driving” software, by 14%-21%.  After the close, the New York Times reported that META may allow Facebook and Instagram users in Europe to pay in order to avoid getting advertisements on its platform. 

In stock legal and regulatory news, on Friday, the NHTSA announced that F will recall 169k vehicles to replace rearview cameras, update software on some cameras left in place, and will take a $270 million charge as a result.  Later, the FTC approved the AMGN $27.8 billion acquisition of HZNP.  This comes after the FTC ended its lawsuit to block the deal.  To obtain the agreement, AMGN agreed not to bundle its own drugs with those from HZNP.  Elsewhere, HUM joined the list of big pharma companies who are suing the US government.  In this case, HUM does not want Medicare to claw back billions of dollars of overcharges after audits found prescriptions for medications for conditions that are not even listed in the patient’s medical records.  HUM claims the rule allowing the clawbacks is “arbitrary and capricious.”  The Biden Administration says the clawbacks will save $4.7 billion over 10 years.  At the end of the day, NVS also sued the Dept. of Health and Human Services, hoping to prevent Medicare from negotiating drug prices for its 66 million enrollees.  One of NVS’s top-selling drugs (Enestro) was on the list of 10 drugs Medicare announced it would be negotiating prices on (as opposed to just accepting whatever the drug maker wants as it is now).  After the close, the US government sued EIX for negligence that led to a 2020 fire near Los Angeles, which burned 180 square miles.

In major IPO news, ARM revised its filing and is now pricing the much-anticipated chip stock between $47 and $51 per share.  Although this IPO is expected to raise around $5 billion, with SoftBank retaining 90.6% of the stock.  (The IPO underwriters do have the option to up to an additional $735 million of the stock, which would reduce SoftBank’s stake to 89.9%.)  FWIW, ARM is the architecture AAPL chose when it replace INTC chips with so-called AAPL-designed chips and ARM is the only real competitor to the x86 chip architecture used by the industry leaders INTC and AMD.  

Overnight, Asian markets were mostly in the red.  Japan (+0.30%), India (+0.24%), and Taiwan (+0.01%) managed to hold onto green while Hong Kong (-2.06%), Shanghai (-0.71%), and Shenzhen (-0.67%) led the region lower.  In Europe, we see a similar picture taking shape with only four of the 15 bourses in the green at midday.  The CAC (-0.39%), DAX (-0.24%), and FTSE (+0.09%) are typical of the region in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a red start to the day.  The DIA implies a -0.09% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.42% open at this hour.  At the same time, 10-year bond yields are up briskly to 4.23% and Oil (WTI) is off by a third of a percent to $85.27 per barrel.

The only major economic news scheduled for Tuesday is July Factory Orders (10 a.m.).  There are no major earnings reports scheduled for before the open.  Then, after the close, the only earnings report that might be considered major is ZS.  

In economic news later this week, on Wednesday we get July Imports, July Exports, July Trade Balance, August S&P Global Composite PMI, August S&P Global Services PMI, August ISM Non-Mfg. Employment, August ISM Non-Mfg. PMI, August ISM Non-Mfg. Price Index, Fed Beige Book, and API Weekly Crude Oil Stock Report.  Then Thursday, Weekly Initial Jobless Claims, Q2 Nonfarm Productivity, Q2 Unit Labor Costs, EIA Crude Oil Inventories, and Fed Balance Sheet are reported.  We also have 3 Fed speakers (Harker at 10 am, Williams at 3:30 pm, and Bowman at 4:55 pm).  Finally, on Friday there are no major economic news reports.

In terms of earnings reports later this week, on Wednesday, CNM, AEO, PLAY, and GME report.  Then Thursday, we hear from ABM, DOOO, DBI, KFY, SAIC, TTC, DOCU, and RH.  On Friday, KR reports.

In miscellaneous news, the National Federation of Retailers said that their surveys lead them to predict there will be record back-to-school spending of $135 billion this year. That is up $24 billion (a 21.8% increase over 2022).   Elsewhere, the industry group that represents large private hedge funds filed suit against the SEC on Friday, claiming the agency went too far in requiring them to disclose their expenses and preventing them from giving different investors different deals (sweetheart deals).  Oddly, the group filed suit in New Orleans, so there was probably some judge shopping going on there.  Finally, a reminder that we have 9 days until the current UAW contracts with F, GM, and STLA expire.  Given the nature of brinksmanship, expect a lot of stories on this topic and the possibility of a major strike over those 9 days.

In world economic news, Bloomberg reported Friday that US corporate profits are on the rise again for the second straight quarter. Profits rose 4.5% in Q2 according to data from the Bureau of Economic Analysis.  Their report showed US corporate profits grew from 13.8 percent to 14.3 percent of GDP in the second quarter.  So, in the US we are seeing what may be a “controlled cooling” with an extremely strong job market, and corporate profits on the rise.  (It is worth noting that GS has now lowered the probability of a US recession to 15%, down from 20% and far below the cycle-high probability of 60%.) However, in Europe, things are not as rosy. Inflation there is much worse than in the US and is remaining higher (stickier) due primarily to energy prices. At the same time, EU economic growth continues to be very weak leading many to start talking about potnetial “stagflation” in Europe.  Meanwhile, in China, the picture is grim.  The Chinese are now experiencing a banking sector that is under siege from a real estate crisis, and is also seeing widespread unemployment (especially among youth).

With that background, it looks like the Bears are looking to start the shortened week with a move lower. DIA even retested its T-line (8ema) in the premarket. However, it has the strongest early session candle bouncing up off the level while the other two major indices are giving us indecisive gap-down candles so far. The trend remains bullish with all three major index ETFs above a rising T-line, 17ema, and 50sma. As far as extension goes, none of the major index ETFs are too far extended from their T-line and the T2122 indicator is sitting right at the upper edge of the midrange (or just outside of overbought territory if you prefer). So, both sides have the room to run, if they can muster the momentum.

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

On Friday, stocks gapped a bit higher with SPY gapping up 0.43%, DIA gapping up 0.46%, and QQQ gapping up 0.25%.  Markets then ground sideways until 10 am, when volatility kicked in as Fed Chair Powell’s Jackson Hole prepared remarks led to some knee-jerking and then a 45-minute selloff that reached the lows of the day in all three major index ETFs about 5 minutes after 11 am.  However, the Bulls stepped in at that point, giving us a long, wavy rally that lasted until 3:30 pm when the SPY, IDA, and QQQ all hit their high of the day. Then we saw modest profit-taking the last 30 minutes across the board.  This action gave us indecisive, white-bodied, Bullish Harami Spinning Top candles in all three of the major index ETFs.  QQQ managed to close just above its T-line (8ema), while SPY closed just below its T-line, and DIA did not quite reach its T-line, even at the high of the day. 

On the day, nine of the 10 sectors were in the green with Technology (+0.81%) and Energy (+0.78%) leading the way higher Communications Services (-0.10%) being the only sector left in the red. At the same time, the SPY gained 0.70%, DIA gained 0.72%, and QQQ gained 0.78%.  VXX dropped 4.35% to 24.20 and T2122 climbed back up to the edge of oversold territory at 19.47. 10-year bond yields pulled back slightly to close at 4.231% while Oil (WTI) gained 1.27% to close at $80.05 per barrel.  This happened on slightly above-average volume in all three of the major index ETFs.  So, the volatility and bearish sentiment lasted about 45 minutes and then the day belonged to the Bulls heading into the weekend.  DIA has now taken out its uptrend (stretching back to October 2022).  QQQ is right at (and retesting) its uptrend line stretching back to January.  SPY remains the only one of the major index ETFs still above and not yet retesting its bullish trend stretching back to mid-October 2022.   

The major economic news reported Friday included August Michigan Consumer Sentiment, which came in a bit below expectations at 69.5 (compared to a forecast of 71.2 and the July reading of 71.6).  At the same time, August Michigan Consumer Expectations were also a bit low at 65.5 (versus the 67.3 forecast and the July 68.3 value).  In terms of forward-looking survey results, the August Michigan Inflation Expectations (over the next 12 months) were high at 3.5% (compared to the forecast of 3.3% and the July reading of 3.4%).  Finally, the August Michigan 5-year Inflation Expectation was 3.0% (versus the 2.9% forecast but in line with the July 3.0% value).

In Fed Speaker News, Fed Chair Powell’s Jackson Hole speech was the big news.  In his prepared remarks (released minutes prior to his speech, Powell said “It is the Fed’s job to bring inflation down to our 2% goal, and we will do so.”  His remarks continued, “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”  Still, he also left room for a continued pause in hikes in September by saying, “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”  Elsewhere, on the sidelines of the conference, Cleveland Fed President Mester also bolstered the hawk message, saying “We’ve come a long way, but you know, we don’t want to be satisfied because inflation remains too high.”  She continued, “We need to see more evidence to be assured that [inflation is] coming down in a sustainable way and in a timely way.”

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The other major central banker speaking Friday was European Central Bank President Lagarde.  She called for EU rates to be “higher for longer.” The ECB President said, “In the current environment, this means – for the ECB – setting interest rates at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our 2% medium-term target.”  Lagarde also went on to warn central bankers to fear wage increases “That could make inflation more persistent if expected wage increases are then incorporated into the pricing decisions of firms, giving rise to what I have called ‘tit-for-tat’ inflation.”  Interestingly, that argument seems to run contrary to both research and common sense.  In the US, by far the largest component of inflation in recent months has been the rise in the cost of shelter (rent and house prices), followed by the rise in energy prices, both of which are not driven by wages according to BLS data.  Finally, recent reports from economic researchers have said the main culprit behind inflation since 2019 has been the backlog of orders caused by the pandemic and the resulting cascade of supply chain issues.  In short, supplies fell much more sharply than demand around the world and stayed that way for two years.  So, Lagarde seems to be arguing that workers should accept stagnant wages and whatever inflation that comes every year, in order to avoid giving companies an excuse to raise prices even more than the wage increases they might demand. 

In stock news, on Friday ERIC announced that it forecasts $1 billion in patent cross-licensing revenue from its licensing agreements with Chinese phone maker Huawei.  At the same time, C reported that net outflows from its equity funds have continued.  C says there were $6.1 billion in outflows from equity funds during the week that ended August 23.  Elsewhere, RAD shares plunged Friday when the Wall Street Journal reported that it is getting ready to file for Chapter 11 bankruptcy.  (RAD closed down 51.04%.)  Later, Bloomberg reported that BA is close to restarting the delivery of 737 MAX jets to China after a four-year pause following the deadly crashes in 2019 and 2020.  By late afternoon, Reuters reported that BB had received an acquisition offer from private equity firm Veritas Capital.  (BB closed up more than 18% on the day.)  Meanwhile, UAW workers voted overwhelmingly (97% in favor) to authorize a strike against GM, F, and STLA any time after the current contract expires on September 14.  (As of now, the negotiations between the union and “Big 3” are contentious and not making much progress according to media reports.  Some economists say a strike on all three would cost the economy $500 million per day.)   Late in the day, Reuters reported that TWNK is exploring a sale after receiving takeover interest from major snack food makers.  This news caused a massive spike in the price of TWNK at 2:40 pm.  On the day, TWNK pulled back to close up 21.73%. 

In stock legal and regulatory news, on Friday the MA Supreme Court reversed a lower court ruling in a blow to HOOD.  The decision gives MA state regulators a significant victory in their enforcement action against the online broker, by ruling that the broker does have fiduciary responsibility.  (This was central to the MA case, which claims that HOOD breached its fiduciary responsibility by encouraging inexperienced investors to place risky trades via gamification.)  Elsewhere, AZN joined the other major pharma companies by filing suit against the US over Medicare drug price negotiation plans.  At the same time, the SEC reported that MMM has agreed to pay $6.5 million to settle the charges that it had violated the Foreign Corrupt Practices Act by bribing Chinese officials to curry favor.  Later the SEC also reported that WFC has agreed to pay $35 million in penalties to settle charges that the company overcharged its customers for advisory fees.  Late Friday evening, the FTC suspended its challenge of AMGN’s $27.8 billion acquisition of HZNP.  This pause is effective until September 18 and will give the agency time to consider whether it should settle the case rather than continue a lengthy court fight.  (AMGN may have offered some compromise since it announced “it would be pleased if its commitment were honored.”) Finally, on Sunday, MMM tentatively agreed to pay $5.5 billion to settle 300,000 lawsuits claiming defective MMM earplugs caused permanent hearing loss among US military veterans. The settlement would stop the need for MMM’s once-court-blocked attempt to avoid liability by shifting it to a subsidiary that was then declared bankrupt.

Overnight, Asian markets were nearly green across the board.  Only Malaysia (-0.02%) remained in the red while Japan (+1.73%), Shanghai (+1.13%), and Shenzhen (+1.01%) led the region strongly higher.  In Europe, we do see green across the board at midday.  The CAC (+0.69%), DAX (+0.51%), and lagging FTSE (+0.07%) lead the region higher on volume in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.25% open, the SPY is implying a +0.18% open, and the QQQ implies a +0.29% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.239% and Oil (WTI) is off fractionally to $79.72 per barrel in early trading.

There is no major economic news scheduled for Monday.  There are no major earnings reports scheduled for before the opening bell.  Then, after the close, HEI reports. 

In economic news later this week, on Tuesday we get Conference Board Consumer Confidence, JOLTs Job Openings, and API Weekly Crude Oil Stocks Report.  Then Wednesday, ADP Nonfarm Employment Change, Q2 GDP, Q2 GDP Price Index, July Goods Trade Balance, July Retail Inventories, July Pending Home Sales, and EIA Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, July PCE Price Index (year-on-year), July PCE Price Index (month-on-month), July Personal Spending, August Chicago PMI, and the Fed Balance Sheet.  Finally, on Friday, August Average Hourly Earnings (month-on-month), August Average Hourly Earnings (year-on-year), August Nonfarm Payrolls, August Private Nonfarm Payrolls, August Participation Rate, August Unemployment Rate, August S&P US Mfg. PMI, August ISM Mfg. Employment, August ISM Mfg. PMI, and August ISM Mfg. Prices are reported.

In terms of earnings reports later this week, on Tuesday, BMO, BNS, BBY, BIG, CTLT, CHS, DCI, SJM, NIO, PDD, AMWD, HPE, HPQ, YY, and PVH report.  Wednesday, we hear from PDCO, CHWY, COO, CRWD, FIVE, GEF, OKTA, PSTG, CRM, VEEV, and VSCO.  On Thursday, ASO, CAL, CPB, CM, CIEN, DG, GCO, GMS, HRL, BEKE, OLLI, PSNY, SIG, TITN, UBS, ARMK, AVGO, DELL, LULU, NTNX, and VMW.  On Friday, DDL reports.

In miscellaneous news, CNBC reported Saturday that with 9 million open jobs (in June) and only 5.8 million unemployed workers, a serious imbalance exists. Economists have suggested easing immigration policy to help address the problem, which an economist from the Cato Institute (Libertarian) estimates is costing the US “something like $1 trillion a year” in lost GDP.  (The current immigration process takes about 5 years for a person to legally enter the US and join the workforce.)  However, a survey taken by that same institute found Americans are split on easing immigration restrictions.  As you probably expected, that split is largely along political lines.  Elsewhere, CNBC also reported Saturday that AMZN is expanding its biometric authorization process.  The company already has 200 Whole Foods Market stores that allow customers to have cards on file and then authorize payments by scanning their palms.  AMZN says it will expand that number to 500 stores by year-end. Finally, it seems a primary driver of Asian (and probably European) markets are Chinese measures announced Sunday. China reduced the tax on stock trades, eased restrictions on executives selling shares, and lowered deposit ratios for margin trading. All the moves were to encourage more trading in Shanghai, Hong Kong, and Shenzhen. However, while there was a pop, many investors were looking for stronger action to actually stimulate the Chinese economy.

With that background, it looks like the Bulls are retesting the T-line (8ema) in all three major index ETFs in the early session. The QQQ candle is showing some bullishness (not just a modest gap higher) while the two large-cap index ETFs are much smaller premarket candles. The bulls still have a lot of work ahead of them since in addition to the 8ema, the 50sma remains overhead (we are still looking at a Blue Ice Failure pattern in all three). There is also a number of levels created by previous swing points to overcome. In other words, the Bears have the momentum. As far as extension goes, none of the major index ETFs are too far extended from their T-line and the T2122 indicator is sitting right at the upper edge of the oversold territory. So, both sides have room to run but the Bulls obviously have more slack if they could manage a rally.

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 a bit at the open following NVDA’s blowout results the night before.  SPY gapped up 0.38%, DIA gapped down 0.11%, and QQQ gapped up 0.94%.  DIA did its best to catch up by rallying sharply the first 30 minutes of the day.  However, QQQ was already throwing the mega-caps a curve by reversing and selling off hard at that same time.  Things got back in sync at 10 am as all three major index ETFs then went on to sell off the rest of the day, closing very near the low of the day.  This action gave us large, black, Bearish Engulfing candles in the SPY and QQQ.  Both of those index ETFs also crossed back below their T-line (8ema) in the process.  For its part, DIA failed a retest of its own T-line on a large, black-bodied candle with a large upper wick.  DIA also fell down out of its four-day consolidation.  All three also retested and failed their 50sma, thus giving us a Blue Ice Failure pattern (with the exception that only QQQ has enough space left down to its 200sma to qualify as a Blue Ice Failure).  

On the day, all 10 sectors were in the red with Technology (-2.17%) and Consumer Cyclical (-1.92%) way out front leading the way lower with Financial Services (-0.32%) and Communications Services (-0.35%) holding up better than the other sectors. At the same time, the SPY lost 1.39%, DIA lost 1.10%, and QQQ lost 2.14%. VXX popped up 4.12% to 25.30 and T2122 dropped back down into the oversold territory to 10.06.  10-year bond yields jumped back up to close at 4.241% while Oil (WTI) was flat to close at $78.88 per barrel.  This happened on slightly above-average volume in the QQQ and average volume in the SPY and DIA.  So, the profit-taking off the opening pop was dramatic and lasted all day Thursday.  DIA has now taken out its uptrend (stretching back to October of 2022).  QQQ is right at (and retesting) its uptrend line stretching back to January.  And SPY remains the only one of the major index ETFs still above and not yet retesting its bullish trend stretching back to mid-October 2022.     

The major economic news reported Thursday included July Durable Good Orders, which came in lower than expected at -5.2% (compared to a forecast of -4.0% and even worse than the June reading of -4.4%).  This included July Core Durable Goods Orders that were reported better than expected at +0.5% (versus a forecast of +0.2% which was also the June value).  At the same time, Weekly Initial Jobless Claims were reported at 230k (versus a forecast of 240k and the previous week’s 240k number).  Later, after the close, the Fed Balance Sheet continued to show its slow reduction as it shrank from $8.146 trillion to $8.139 trillion.  In related news, it is also worth noting that the St. Louis Fed said Thursday that the Fed may need to stop shrinking its balance sheet at least temporarily.  Since the government has issued $1 trillion in bonds since June, money market funds have been holding back on their purchases of bonds.  That leaves the Fed as the other major potential buyer.

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In Fed Speak news, Philly Fed President Harker told CNBC Thursday morning that he doubts the FOMC will need to raise rates again.  Harker said, “Right now I think that we’ve probably done enough.”  He went on to say, “I’m in the camp of let the restrictive stance work for a while, let’s just let this play out for a while, and that should bring inflation down.”  However, Harker was not ready to predict when the Fed might start cutting rates. Just a bit later, Boston Fed President Collins said something very similar when she told Yahoo Finance, “We may be near, we could even be at a place where we would hold and not raise rates further … But certainly, additional increments are possible, and we need to look holistically and be really patient right now and not try to get ahead of what the data will tell us as it unfolds.”  (Both did their interviews on the sidelines of the Jackson Hole Central Banker Conference.)  Both of them also seemed to embrace the recent bond yield rate spikes as something that could help the Fed by increasing longer-term borrowing costs and therefore cooling the economy.

In stock news, TMUS said Thursday that it will be cutting 5,000 jobs (about 7% of its workforce).  The company cited rising costs, cheaper phone plan offerings, and the competitive phone market.  Elsewhere, MA will end its partnership with crypto exchange Binance (which had covered four countries).  In other finance news, the Wall Street Journal reported that a group of funds (led by BLK) that have lent money to WE are exploring the possibility of a Chapter 11 bankruptcy filing.  At the same time, RY announced it would be cutting 1,800 jobs as a cost-cutting measure.  In auto industry news, STLA announced it is expanding its “manufacturer-approved pre-owned vehicle” sales program to the US.  (The program started in Europe in 2019.)  Meanwhile, GOOGL said Thursday that it will provide more information on targeted ads and give researchers more access to data in order to come into compliance with new EU online content rules.  After the close, HE plummeted as much as 24% after announcing it was suspending its dividend after subsidiaries were forced to draw $370 million from their revolving credit lines in the wake of the massive Maui fires.  Also after the close, LMT was awarded a $2.7 billion contract by the US Navy to build 35 additional CH-53K helicopters.  At the same time, GM announced it has agreed to increase the pay of workers at its OH battery plant by an average of 25%.  In addition, Reuters reports that AMZN is in talks with DIA over a potential streaming deal with DIS’s ESPN unit.

In stock legal and regulatory news, late Wednesday night, the SEC made a court filing saying that investors who lost money (victims) when Elon Musk tweeted about taking TSLA private will soon begin receiving payouts, recouping 51.7% of their losses.  At the same time, the TX Public Utilities Commission announced that TSLA will provide the state with two “virtual power plants” (drawing power from people who have TSLA Powerwall batteries and compensating them for the electricity).  Elsewhere, Reuters reported that SAVE has agreed to pay up to $8.25 million to settle a class action suit over hidden carry-on baggage fees.  At the same time, WHR agreed to pay $11.5 million to the US Consumer Protection Product Safety Commission over failure to report glass cooktops that could turn themselves on posing burn and fire hazards.  Later, the NHTSA told Reuters that it would resolve its two-year investigation into TSLA Autopilot in a public announcement soon.  The spokesman declined to describe what that resolution will be or exactly when “soon” will come.  Meanwhile, starting today, the big tech names will be forced to comply with the new EU Digital Service Act which imposes stricter rules on content moderation, user privacy, and transparency.  These include META, AAPL, and GOOGL. (AMZN is fighting its inclusion on the list of companies covered in court.)  Failure to comply could result in fines of up to 10% of total global sales per infraction.  After the close, a US District Court judge dismissed a lawsuit against GOOGL that had been brought by the Republican National Committee which had claimed the tech giant had maliciously marked RNC mass emails as spam.  Also after the close, TD said it expects to be fined and other non-monetary penalties from US authorities over a money laundering investigation.

After the close, AFRM, INTU, MRVL, JWN, ULTA, and WDAY all reported beats on both the revenue and earnings lines.  Meanwhile, GPS missed on revenue while beating on earnings.  It is worth noting that AFRM, INTU, and WDAY raised their forward guidance. 

Overnight, Asian markets were mostly red.  Japan (-2.06%) and Taiwan (-1.72%) were way out front leading 10 of the region’s 12 exchanges lower.  In Europe, the opposite picture is taking shape at midday.  14 of the 15 bourses in the region are squarely in the green while the CAC (+0.74%), DAX (+0.56%), and FTSE (+0.49%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a green start to the day here as well.  The DIA implies a +0.34% open, the SPY is implying a +0.26% open, and the QQQ implies a +0.10% open at this hour.  At the same time, 10-year bond yields are up slightly to 4.249% and Oil (WTI) is up just over one percent to $79.86 per barrel in early trading.

The major economic news scheduled for Friday includes Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations all at 10 am.  Fed Chair Powell also speaks at 10:05 am as the Jackson Hole Conference continues.  There are no major earnings reports scheduled for the day (either before the open or after the close).

In miscellaneous news, both the TX and Central State electric grids warned customers of potential power outages as the brutal heatwave continues to pound much of the US.  Both grid operators urged voluntary power conservation to avoid rolling outages.  In other news, the BRICS group invited some more oil to the party as they formally asked Saudi Arabia, Iran, and UAE to join.  Rounding out the new countries invited were Argentina, Egypt, and Ethiopia. 

As mentioned above, Fed Chair Powell speaks just after 10 am Eastern this morning.  Markets are very likely to parse through every word and facial gesture he delivers looking for a clue to the path for interest rates.  (This is especially true after two dovish statements from Fed members delivered in interviews on the sideline of the conference Thursday.)  If you want to get a little wonky, see if Powell addresses an abstract metric known as “R*” (R-star).  This is not the target interest rate, but instead, it is the rate at which Fed policy is theoretically neutral (neither restricts or stimulates the economy).  Since 2019 that rate has been 2.5% and prior to that the R* was 3.5% going back until 2015.  While Powell will be the main show on Friday, EC President Lagarde also speaks at 3 pm Eastern.  (This will be her first public remarks since the EC’s July rate hike.) 

With that background, it looks like the premarket is modestly bullish after Thursday’s big bearish candles. None of the major index ETFs have done enough premarket work to be retesting their T-lines (8ema) or 50sma. So we are still looking at a Blue Ice Failure pattern in all three with huge Bearish Engulfing candles in the SPY and QQQ (which could both also be working on Dreaded-h patterns (the opposite of a J-hook). In other words, the Bears have all the chart patterns in their favor this morning. So, the short-term downtrend break is back in question for the SPY and QQQ, while DIA has resumed its own move lower. As far as extension goes, none of the major index ETFs are too far extended from their T-line but the T2122 indicator is back down well into the oversold territory. So, both sides have some room to run but the Bulls obviously have more slack if they could manage a rally. Finally, don’t forget it is Friday with the Jackson Hole Conference continuing Saturday (although we do not EXPECT much news then). We also have the long weekend news cycle. So, prepare your account for the weekend by taking some money off the table (it is Payday after all) and moving stops, hedging, or lightening up your positions.

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

It was the Bulls Day on Wednesday.  SPY opened 0.24% higher, DIA opened 0.15% higher and QQQ gapped up 0.32%.  At that point, all three major index ETFs followed through with a steady rally until almost 2 pm.  Then all three traded sideways the rest of the day with a slight profit-taking trend.  This action gave us gap-up, large-body, white candles in all three.  The SPY crossed back above its T-line (8ema) and with a tiny tick on top is now just below its 50sma.  The QQQ also crossed back up through its T-line but had a slightly larger upper wick than the SPY.  QQQ is also just below its 50sma and you might even say it tested the 50 at the high of the day.  DIA is still in more of a sideways consolidation than a rebound rally like the other two majors.

On the day, all 10 sectors were in the green with Technology (+1.08%) way out front leading the way higher followed by Financial Services (+1.20%) while the lagging sector was Energy (+0.11%).  At the same time, the SPY gained 1.08%, DIA gained 0.52%, and QQQ gained 1.58%.  VXX was down 3.34% to close at 24.30 and T2122 climbed back out of the oversold territory into the lower half of the mid-range at 39.42.  10-year bond yields plummeted lower to close at 4.194% while Oil (WTI) fell 1.48% to close at $78.46 per barrel.  This happened on well-below-average volume in all three of the major index ETFs.  So, the rally relationship has resumed, with QQQ and SPY leading the market higher while DIA lags again.  The question is whether or not this is just a relief rally in the month-long pullback.  Either way, Wednesday belonged to the Bulls.      

The major economic news reported Wednesday included Building Permits, which came in slightly above expectation at 1.443 million (compared to a forecast of 1.442 million and a July reading of 1.441 million).  This amounted to a 0.1% month-on-month increase versus the July value which itself was down 3.7% from June.  Later, the Preliminary August S&P US Mfg. PMI came in light at 47.0 (compared to a forecast calling for 49.3 and a July reading of 49.0).  At the same time, the Preliminary August Services PMI was reported at 51.0 (versus a forecast of 52.3 and a July value of 52.3).  In addition, the Preliminary S&P Global Composite PMI was 50.4 (compared to a 52.0 forecast and a 52.0 July value).  After that, the July New Home Sales came in higher than expected at 714k (versus a 705k forecast and a 684k June reading).  This amounted to a 4.4% increase in July, which was better than the +0.2% increase anticipated and far better than June’s decline of 2.8%.  Later, the EIA Weekly Crude Oil Inventories followed the API report from Tuesday night, showing a 6.135-million-barrel drawdown (compared to a predicted 2.850-million-barrel draw and even the prior week’s 5.960-million-barrel drawdown of inventory.

In Russian news, Putin’s unofficial warlord Yevgeny Prigozhen was killed along with the other co-founder of Wagner Private Military Company (Dmitry Utkin).  Most saw this plane crash coming as the inevitable result of Wagner’s June uprising against Putin.  Still, it is notable. Elsewhere, Reuters reported Wednesday that Russian central bank authorities are working on a presidential decree that may give that country’s retail investors a way to unblock their frozen assets held in overseas accounts.  The scheme would allow foreign investors to buy the assets held abroad (3.5 million Russians hold almost $16 billion in foreign accounts that are now frozen).  The idea is that non-Russian investors would buy the frozen Russian account assets (presumably at a discount) in exchange for assets held in non-frozen accounts that can be repatriated to Russia.  It’s unclear whether Western sanctions would now (or could be made to) block this move.  (One would think this to be the case, otherwise, the Russian oligarchs surely would have done this 18 months ago.) It is also unclear if there is some sort of unmentioned reciprocal agreement at play allowing Western business assets frozen in Russia to be released.

SNAP Case Study | Actual Trade

In stock news, research firm Antenna reported that NFLX continued its strong growth in new subscribers in July (not as strong as June’s record increase, but still 2.6 million is a significant gain in subscribers for a month).  NFLX was up 3.48% on the day of that news.  At the same time, a Business Insider report said TSLA cut its production targets in Germany by 13% (with plans to cut it more later).  The current rate of output is now 4,350 per week from the TSLA Berlin plant.  Simultaneously, Reuters reported that NVO has chosen TMO as a second contract manufacturer for its hit weight loss drug Wegovy.  In the early afternoon, JNJ announced its Janssen division would be closing down much of its vaccine research and development operations.  (The JNJ COVID-19 vaccine did not perform as well as competitors from PFE and MRNA.)  Later, the UAW announced workers at the major F Louisville plant have voted to authorize a strike with three weeks left before the current labor contract expires.  In other auto industry news, GM said they are halting production at their Ft. Wayne assembly plant for a week as they continue to wrestle with part supply issues.  (GM blamed the shortage on a lack of railcars and truck drivers which led to a massive buildup of partially completed vehicles at the plant.)  In M&A news, private company Esmark announced it has rescinded its offer to buy X for $35/share.  In a statement, Esmark said it will respect the USW Steel Workers Union position (the union is supporting CLF buying X for a lower $7.3 billion total price).  After the close, GM announced it was cutting 940 jobs in AZ and would cease its IT operations in that state to reduce costs.  (80-90 of these layoffs come from the self-driving software team.)  At the same time, Reuters reported that a new supplier quality problem has been identified related to 737 MAX production.  The new problem will delay near-term deliveries of those planes and is likely to impact annual production goals.  AAPL announced after the close that it supports the CA state “Right to Repair” bill as currently written, specifically citing that the bill “protects consumer safety, device security, and manufacturers intellectual property rights.”  (This almost assuredly means the bill has been transformed into something worthless to consumers and non-AAPL repair businesses.)

In stock legal and regulatory news, OSHA said Wednesday that it’s investigating a chemical spill at a lithium battery plant owned by GM and South Korea’s LG Energy.  This is one of six open OSHA investigations into that plant’s operations.  (In a possibly related case, after the close, Bloomberg reported that the joint venture is working on a deal to give employees at that plant a 33% raise plus back pay.)  At mid-morning, drugmaker Mallinckrodt (MNKKQ) told Reuters it expects to file for a second bankruptcy in the next few days.  This comes after the drugmaker reached a deal with victims who had agreed to accept $1 billion less in their settlement with the company over opioid distribution practices.  Later, a court in Kenya ordered META into mediation in the company’s dispute with 184 content moderator employees and two contractors who were suing the company for unfair dismissal (because they were organizing a union).  The court ruled META has 21 days to reach an agreement to resolve the dispute with the plaintiffs.  In the afternoon, Reuters reported that UAL has agreed to a $30 million settlement after one day of trial in a case related to their treatment of a quadriplegic man in a vegetative state.  Late in the day, a coalition of environmental activist groups sent a letter to the SEC, pushing to stop Brazilian meatpacker JBSAY from being listed (issuing an IPO) on the NYSE.  After the close, GS, JPM, MS, and UBS agreed to pay $499 million to settle an antitrust lawsuit from investors, which had accused them of conspiring to stifle competition through their stock lending practices.  Also after the close, the FCC announced it would be releasing the public comments made in a bid to deny the broadcast license renewal of the FOX TV station in Philadelphia.  Comments made by the grassroots group “The Media and Democracy Project” have asked for denial based on FOX’s false and harmful information (lies) about the 2020 election. FOX dismissed the petition as frivolous and without merit, but the petitioners mentioned FOX’s $787.5 million defamation case settlement brought by Dominion Voting System and FOX internal communications released related to that case that proved the company knew the results of the election were valid but repeatedly lied about it anyway and knew that could lead to something like the January 6 riot attempting to stop official vote counting.  At the same time, an FDA panel of independent experts voted against the approval of an MDT blood pressure treatment device. 

After the close, ADSK, GES, NTAP, NVDA, SNOW, and SPLK all beat on both the revenue and earnings lines.  It is worth noting that ADSK, GES, NVDA, and SPLK all also raised their forward guidance.  It is also worth noting that there were some major surprise beats on earnings with NVDA surprising by 29.2%, SPLK surprising by 57.8%, GES surprising by 84.6%, and SNOW surprising by 120%.  However, the most notable beat of the day was NVDA’s 170% jump in sales (year-on-year) resulting in a 27% beat on revenue…driven by AI processing demand (whose division sales more than doubled). NVDA also expects AI-related demand to continue increasing, more than doubling again in 2024. That is likely to drive markets (especially QQQ and SPY) this morning.

Overnight, Asian markets were mostly green on the back of the AI rally.  Hong Kong (+2.05%), South Korea (+1.28%), and Taiwan (+1.17%) led the region higher.  Only New Zealand (-0.60%) and India (-0.29%) were in the red.  In Europe, we see a very similar picture taking shape at midday.  Only Russia (-0.76%) and Finland (-0.05%) are in the red, while the CAC (+0.46%), DAX (+0.36%), and FTSE (+0.35%) lead the region higher.  In the US, as of 7:30 am, Futures are pointing toward a mixed open.  The DIA implies a flat open of -0.02%, the SPY is implying a +0.64% open, and the QQQ implies a +1.27% open at this hour.  At the same time, bonds are back up a bit to 4.214% and Oil (WTI) is up fractionally to $79.04 per barrel in early trading.

The major economic news scheduled for Thursday includes July Durable Goods Orders and Weekly Initial Jobless Claims (both at 8:30 am), Fed Balance Sheet and Bank Reserve Balances with the Fed (both at 4:30 pm).  The Central Bankers Jackson Hole Conference also starts at 8 am.  The major earnings reports scheduled for before the opening bell include BURL, DLTR, NTES, WOOF, RY, TD, and WB.  Then, after the close, GPS, INTU, MRVL, JWN, ULTA, and WDAY report. 

In economic news later this week, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations are reported.  Fed Chair Powell also speaks as the Jackson Hole Conference continues.

In terms of earnings reports, there are no earnings reports scheduled for Friday.

In miscellaneous news, retail industry analyst Susquehanna reported that big retailers have already returned to a cost-cutting focus by going back to a just-in-time inventory model.  Susquehanna analyzed the last 20 years of ocean container ship imports into the US looking for trends. They found that the “big 4” big box retailers (WMT, TGT, HD, and LOW) all reduced their inventories by more than 4% in Q2, which was the largest reduction since 2015.  The analyst is predicting (based on discussions with retailer management) Q3 pre-holiday inventory builds will be larger than last year’s 6% quarter-on-quarter increase but far less than the 14% average from pre-COVID years.

In late-breaking news, Turkey surprised markets this morning with an unexpectedly large rate hike of 7.5%, bringing that country’s main rate to 25%.  The Dollar fell against the Turkish Lira almost immediately.  Elsewhere, privately-held Subway (sandwich shops) sold itself to privately-held Roark Capitol.  Roark already owned Dunkin Donuts, Baskin-Robbins, Sonic, Arby’s, Buffalo Wild Wings, and a host of other restaurant industry brands.  Finally, Bloomberg reported that China has a major $9 trillion “off the books” debt problem.  It seems that this is the amount of debt held by Chinese local governments through state-owned companies set up to borrow on behalf of province and local government entities.  The problem is that the local governments have not been able to raise enough income (tax revenue) to pay the interest on that $9 trillion in hidden debt.  So, banks are unwilling to lend to those entities and investors are not buying bonds issued by those financing companies.  If there were a default by any of those shadow funding agencies, China’s entire $60 trillion financial system would be at risk of collapse.

So far this morning, BURL, DLTR, FRO, RY, and SN all reported beats on both the top and bottom lines.  Meanwhile, NTES and WB missed on revenue while beating on earnings.  On the other side, WOOF and TD beat on revenue while missing on the earnings line.  It is worth noting that WOOF lowered its forward guidance.   

With that background, it looks like the premarket is giving us a similar feel as the Wednesday normal session. SPY and especially QQQ gapped higher and will open with significant gains. Meanwhile, DIA is stuck in the mud and not participating. It is interesting that all three of their premarket candles are indecisive candles (after the gaps from the two broader ETFs). SPY and QQQ are above their T-line (8ema) while DIA remains just below its own T-line. The morning gap will also see the QQQ well up above its 50sma and the SPY retesting its 50sma from below. So, the short-term downtrend has been broken in the SPY and QQQ, but the DIA remains in just a consolidation. Of course, the much longer-term trend is still bullish since last year but that has been pushed hard recently by the Bears. As far as extension goes, the morning gap may have QQQ a little extended above its T-line but the other two are not far from that average. The T2122 indicator is also back in its mid-range, so there is plenty of room to move in either direction, say it with me, if we can find the momentum.

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