Markets opened flat on Wednesday as traders waited on the Fed decision.  The three major indices then wandered around the opening level before a midday selloff.  The bulls then stepped in at about 1:15 pm and rallied markets into the Fed announcement.  At that point, all three showed major volatility, first spiking up, selling off hard, and reversing again and again.  All three reached the highs of the day at 2:50 pm before then putting in the strongest downtrend of the day.  This move saw a 3:15 pm bounce but resumed and took all three major indices out on their lows.  This action gave us large, black-bodied candles with large upper wicks in the SPY, DIA, and QQQ.  The DIA also printed an Evening Star signal and crossed back below its T-line and 200sma.  SPY crossed down its 200sma while remaining above its T-line.  And, continuing to be the strongest of the major indices, QQQ remains well above its T-line.

On the day, all 10 sectors were in the red with Financial Services (-2.39%) leading the way lower while Consumer Defensive (-0.80%) held up better than the other sectors.  At the same time, the SPY lost 1.70%, the DIA lost 1.67%, and QQQ lost 1.36%.  VXX climbed 4% to 50.43 and T2122 dropped back into the oversold territory at 8.06.  10-year bond yields plummeted again to 3.451% while Oil (WTI) gained half of a percent to $70.02 per barrel.  So, Wednesday saw huge volatility following the Fed statement, Dot Plots, and press conference the bulls seemed to like but Treasury Sec. Yellen said the FDIC will not cover all deposits, which gave the bears firm control at the end of the day (on fears of more regional bank runs).  This all happened on average volume. 

In economic news, the EIA Weekly Crude Oil Inventories came in much higher than expected at +1.117 million barrels (compared to a forecast that called for a drawdown of 1.565 million barrels and the prior week’s build of 1.550 million barrels).  Later, the Fed Future Interest Rate Projections (aka Dot Plots) showed a forecast of 5.1% (the terminal rate) for 2023 (up from the prior forecast of 4.4%), 4.3% interest rate in 2024 (down from the prior forecast of 5.1%), and 3.1% in 2025 (down from the prior forecast of 4.1%).  The FOMC also raised the Fed Funds Rate by 25 basis points to the 4.75%-5.00% range.  The Fed statement continued to predict one more rate hike and no rate cuts in 2023.  However, they also stated that the future hike is not a sure thing and will depend on data. During his press conference, Fed Chair Powell said “the US banking system is sound and resilient.”  He also said disinflation is happening, that the Fed had considered a rate hike pause due to the banking issue, and that this current situation with regional banks is likely to tighten credit conditions for households and businesses (which will help the Fed to curb inflation by weighing on the economy).  At the same time, Treasury Sec. Yellen told the Senate Banking Committee that banks have been shoring up their liquidity the last two weeks and that the government was taking steps to protect depositors.  However, she said the FDIC was not considering providing “blanket insurance” (insuring all deposits regardless of size) at this time.  She said it was worthwhile to look at changes, but increasing above the current $250,000 limit is not being considered. Still, she said when a bank fails and is believed to pose a systemic risk (i.e., pose a risk of contagion of bank runs) “we are likely to invoke a risk exception” that allows the FDIC to cover all deposits.  So, basically, Yellen said they won’t insure all deposits but if a bank gets run and they think it will prevent panic, they will cover all deposits for that specific bank.  (Here’s to hope that your bank is likely to cause a panic if it goes under.)

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In stock news, the CFO of BA said Wednesday that the company will be taking more charges due to supplier quality issues on the KC-46 Tanker jet program, but added that the charges would not impact BA annual cash flow.  Elsewhere, the surprise GME profit on Tuesday night triggered a massive short-squeeze resulting in a 35% gain after a very volatile day that saw the stock up 53% at one point.  Meanwhile, BIDU’s smart car business unit received approval to be the first company to test autonomous vehicles on the road in Shanghai (population 26 million).  At the same time, Reuters reported that the MSFT search engine Bing has received a 15.8% boost in usage (compared to a 1% decline in the use of the GOOGL search engine) since the February 7 release of Bing’s AI-powered (ChatGPT) engine.  However, please be aware that Bing’s share of searches was so small to start with that this seemingly big move is really tiny overall.  In other news, ALB announced it will be opening a $1.3 billion lithium processing plant in South Carolina.  After the close, COIN said it has been issued a Wells Notice (notice the SEC intends to bring enforcement action). Finally, F announced on Thursday it will be re-releasing 2021 and 2022 results to reflect a finer level of detail by business unit. This is the first major car company to do so and will give much more insight into the company (and industry). Industry analysts expect to see massive losses from the electric vehicle unit but time will tell.

In stock legal and regulatory news, the CEO of MRNA defended the new, dramatically higher $130/dose price (versus $18/dose) for the COVID-19 vaccine before the US Senate Wednesday.  He was pushed by Senator Sanders but responded by pointing out it will be in single-dose syringes rather than in the 10-dose vials sold to the US government in 2021-2022.  In other drug news, the NIH announced it will not be using its “march-in” rights to grant production licenses to other manufacturers for the PFE prostate cancer drug Xtandi.  The agency said their analysis shows the drug is widely available (despite it selling for $170,000/year/patient).  At the same time, the US FDA has declined to approve ABBV’s Parkinson’s disease therapy.  This was a significant hit to ABBV, as the treatment was meant to be one of the company’s biggest drug introductions in the next one to two years.  Elsewhere, Reuters reported that GOOGL will gain unconditional EU antitrust approval for the acquisition of math app Photomath. The European Commission will rule on the deal on March 28, but sources tell Reuters the deal is approved.  Meanwhile, on this side of the pond, JNJ has appealed to the US Supreme Court to revive its effort to use bankruptcy law to avoid liability in more than 38,000 cases alleging JNJ’s Baby Powder (contaminated with asbestos) caused damages.  In other news, House GOP members are lining up behind business interests as they summoned NRLB officials while alleging the NRLB had been unfair to SBUX in ruling that the company broke labor law hundreds of times in its effort to fight unions.  In transportation, the FAA agreed to a request from DAL to reduce the “minimum flights requirement” and New York and Washington DC airports. The change will allow DAL and UAL to operate fewer flights (during congestion, staff outages, or whatever) without losing their landing slots at those airports.

After the close, CHWY, KBH, WOR, and SCS all reported beats on both the revenue and earnings lines.  Meanwhile, MLKN missed on revenue while beating (significantly) on earnings.  It is worth noting that MLKN lowered forward guidance and SCS raised guidance at the time of the report.  It is also worth noting that in addition to MLKN, CHWY, and WOR earnings were significant upside surprises versus the average analyst forecast.

Overnight, Asian markets were mixed but leaned toward the green side.  Australia (-0.67%), India (-0.44%), and Japan (-0.17%) led the losses.  Meanwhile, Hong Kong (+2.34%), Shenzhen (+0.94%), and Taiwan (+0.66%) paced the gainers.  In Europe, markets are red across the board at midday.  The CAC (-0.55%), FTSE (-0.97%), and DAX (-0.63%) are typical and are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.20% open, the SPY is implying a +0.47% open, and the QQQ implies a +0.90% open at this hour.  At the same time, 10-year bond yields are back up to 3.50% and Oil (WTI) is down three-quarters of a percent to $70.43/barrel in early trading.

The major economic news events scheduled for Thursday include Building Permits (8 am), Q4 Current Account and Weekly Initial Jobless Claims (8:30 am), and February New Home Sales (10 am).  The major earnings reports scheduled for the day include ACN, DOOO, CMC, DRI, FDS, and GIS before the opening bell.  Then after the close, JOAN reports. 

In economic news later this week, on Friday, Feb. Durable Goods, Mfg. PMI, S&P Global Composite PMI, and Services PMI are reported.  In earnings later this week, on Friday, EXPR reports.

So far this morning, ACN, GIS, DRI, and DOOO all reported beats on the revenue and earnings lines.  Meanwhile, FDS missed on revenue while beating on earnings.  On the other side, CMC beat on revenue while missing on earnings.  It is worth noting that GIS has raised its forward guidance.

In late-breaking news, Bloomberg reports that the big Wall Street banks have eased off of their previously announced hiring freezes as they attempt to snap up the best talent available from CS.  Elsewhere, F began releasing its prior results broken out by business unit.  It seems the EV unit lost $2.1 billion in 2022, which was offset by $10 billion in operating profits from the internal combustion and fleet sales units.  Finally, the CEO of C (Jane Fraser) said that the SIVB collapse demonstrates we are in a new world where bank customers can move millions of dollars with just a couple clicks from any location.  She implied there need to be new or changed regulations to protect banks from “digital runs” because remote access to money electronically has removed banks’ ability to forecast the need for liquid assets.

With that background, it looks like the bulls are looking to make a move against yesterday’s late-day selloff. This is especially true in the QQQ. SPY has recrossed its T-line (8ema) and 200sma to the upside in premarket. Overextension from the T-line is not an issue in any of the big indices. However, T2122 is back in the oversold zone. While there is some economic news (including Weekly Jobless Claims) today, I suspect that talk and fears related to regional banks may be a big driver of direction. Until the regional banks stocks calm down, it will be hard for the big banks to hold up. And without the big banks, it’s hard for the DIA and SPY to hold ground either. So, be cautious and don’t let FOMO put you in a position where this daily chop eats you alive.

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 Monday, markets started the day essentially flat (opening up 0.15% in the SPY, up 0.27% in the DIA, and down 0.33% in the QQQ). After that open, the SPY rallied slowly until 11:30 am.  Meanwhile, the DIA rallied more strongly but only for 30 minutes.  The QQQ sold off during the first 30 minutes but then rallied until 11:30 am.  From that point, all three major indices had a midday slump before rallying right back to where they were at 11:30 am.  This action gave us a white-bodied inside day candle in the SPY (crossing above its T-line in the process).  QQQ printed a white-bodies Hammer candle.  For its part, DIA printed a white, large-bodied candle with only a tiny upper wick (also crossing back above its own T-line by pennies).  This happened on average volumes (down from the last week and a half) as traders wait on the Wednesday Fed move.

On the day, all 10 sectors were in the green with Energy (+1.68%) leading the way higher while Consumer Cyclical (+0.38%) lagged behind the other sectors. At the same time, the SPY gained 0.94%, the DIA gained 1.19%, and the QQQ gained 0.20%.  VXX fell 5% to 53.16 and T2122 rose back out of the oversold area to 24.82.  10-year bond yields climbed (significantly from premarket open) to 3.492% while Oil (WTI) fell 1.15% to $67.51 per barrel.  So, Monday saw markets calm down after the Friday bank worries. This came even though FRC got hammered (-47.11% after several trading halts during the day) and a few other regionals were also big losers.  However, NYCB, PACW, FCNCA, and other regional banks also were big winners on the day. 

In stock news, AMZN announced Monday that it will lay off 9,000 more employees in the coming weeks.  (The company laid off 18,000 in November – January.)  In leadership news, the CEO of NCLH announced Monday that he is retiring in June and will be succeeded by insider Frank Del Rio.  At the same time, SBUX CEO Shultz left two weeks early with new CEO Narasimham taking over Monday.  Elsewhere, MULN announced it has acquired both the North and South American distribution rights for the DragonFLY K50 electric supercar (capable of 0-60mph in 2 seconds and a top speed of more than 200mph).  At the same time, PSNY officially launched an electric SUV in China and clashed its starting price by $29,000 in doing so.  It is unclear if PSNY intends to offer the reduced prices in the US as well.  Meanwhile, JPM CEO Dimon is heading up talks with other major bank CEOs in an effort to rescue and stabilize FRC.  The Wall Street Journal reports sources to the talks tell them that some or all of last week’s $30 billion in deposits the big banks made at FRC may be converted to a capital injection.  However, the same sources told WSJ that a complete buyout is also on the table.  In other banking news, COIN has stopped support for the SBNY digital payment platform (more than a week after regulators took control of the bank and a day after NYCB entered into an agreement to buy the deposits and loans of SBNY).  In M&A news, RBA completed its acquisition of IAA on Monday.  In M&A rumors, Reuters reports the TMO and South Korean firm Celltrion are competing to acquire the BAX Biopharma Solutions unit.  Sources told Reuters the sale could net BAX $4 billion.

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In stock legal and regulatory news, European Commission Vice President Vestager said Monday that tax deals between multinationals and EU countries amount to illegal tax breaks.  She indicated new investigations into many multinational companies are likely to happen. Europe’s top court has not yet ruled on her ruling (thrown out by lower courts) against AAPL, AMZN, and SBUX.  However, the same court did uphold her ruling against ENGIY and her actions have forced Luxembourg, the Netherlands, and Belgium to change their practices of giving breaks to corporations.  Elsewhere, the NHTSA said Monday that F has recalled 1.5 million (2013-2018 Fusion and Lincoln MKZ) vehicles over faulty brakes and wipers.  Meanwhile, GOOGL has denied charges from the US DOJ (and 30 states) that the company intentionally destroyed records of internal chat communications related to the search business as part of an antitrust case.  GOOGL said it made “reasonable efforts” to preserve those records since the case was filed in 2020 but unfortunately those records have now been permanently deleted.  In other potential news, IATA (an airline industry lobbying group) told Reuters Monday that increased airline travel may trigger UN-based global emission caps on the major airlines (AAL, DAL, UAL, JBLU, etc.) as soon as 2024.

In energy news, Reuters reported that US crude oil exports to Europe have hit another record this month, at an average of 2.1 million barrels per day so far in March.  The report cited lower demand from US refineries and the broad discounts in the WTI benchmark price.  Meanwhile, over in the Natural Gas space, the front-month April Natty contract continued falling Monday.  The price closed at $2.24/mmBtu, the lowest closing price since February (which was itself the low since July 2020).

In miscellaneous news, President Biden used his first veto to slap down the anti-ESG bill (which forbade federal employee retirement funds from considering ESG issues for any reason when choosing investments, regardless of the implications of such or customer preferences).  The bill had passed both houses of Congress with small majorities. So, it is unlikely supporters can overcome the veto.  On the other side of the political aisle, a few GOP lawmakers have already requested all documents and personnel records from the Fed and FDIC relating to the failures of SIVB and SBNY banks.  Their letter to the agencies seems to state a conclusion (before beginning) with the letter demanding the records, citing what “appears to be glaring bank mismanagement and regulators lack of basic supervision and enforcement of…rules.”  There is no word on when the investigation will begin or when hearings will be held.

Overnight, Asian markets leaned heavily to the green side.  Japan (-1.42%) and New Zealand (-0.29%) were the only red in the region.  Meanwhile, Shenzhen (+1.60%), Thailand (+1.40%), and Hong Kong (+1.36%) led the area markets higher.  In Europe, we see green across the board at midday.  The FTSE (+1.37%), DAX (+1.64%), and CAC (+1.50%) are leading the continent higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a move higher to start the day.  The DIA implies a +0.88% open, the SPY is implying a +0.80% open, and the QQQ implies a +0.54% open at this hour.  At the same time, 10-year bond yields are climbing fast to 3.549% and Oil (WTI) is up fractionally to $67.79/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Feb. Existing Home Sales (10 am) and API Crude Oil Stocks Report (4:30 pm).  The major earnings reports scheduled for the day include CSIQ and TME before the opening bell.  Then after the close, AIR, GME, and NKE report.

In economic news later this week, on Wednesday, EIA Crude Oil Inventories, Q1 Interest Rate Projections, the Fed Rate Decision, and the Fed Statement, are all reported and Fed Chair Press Conference takes place.  On Thursday, we get Building Permits, Q4 Current Account, Weekly Initial Jobless Claims, and New Home Sales.  Finally, on Friday, Feb. Durable Goods, Mfg. PMI, S&P Global Composite PMI, and Services PMI are reported.

In earnings later this week, on Wednesday, OLLI, WOOF, WGO, CHWY, KBH, MLKN, SCS and WOR report.  On Thursday, we hear from CAN, DOOO, CMC, DRI, FDS, and GIS.  Finally, on Friday, EXPR reports.

So far this morning, CSIQ and TME reported beats on both the revenue and earnings lines.  It is worth noting that CSIQ also lowered its forward guidance.

In late-breaking news, this morning Treasury Sec. Yellen told an American Bankers Association audience that the government is ready to guarantee more deposits if the banking crisis were to worsen.  In an apparent attempt to stave off criticism (mostly from GOP lawmakers but also the most progressive Democrats), she said the actions taken so far were not aimed at any specific banks or classes of banks but instead were to protect the broader US Banking system.  She went on to say “And similar actions could be warranted if smaller institutions suffer deposit runs that pose a risk of contagion.”  FRC (currently the most troubled bank) jumped 15% in premarket after her remarks were published. Finally, as of this morning, the Fed Funds Futures are saying that there is an 86.4% probability of a quarter-point hike by the Fed tomorrow and a 13.6% chance we see no hike.

With that background, it looks like the bulls are making another charge this morning (at least in the premarket). SPY is challenging Thursday’s high and DIA is well above its recent high. However, while QQQ is moving up, it remains below the recent highs from Thursday and Friday. Overextension is still not an issue in any of the big indices and T2122 is up out of the oversold territory at this point. While the regional banking issue may cause more turbulence, I suspect we may be in the “wait and see” area ahead of Fed actions on Wednesday. So, the bulls may make a run this morning and we should be prepared for bank-caused volatility. However, much like Monday afternoon, I think we may drift until there is certainty on the Fed’s move.

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 gapped lower in the large-cap indices (down 0.74% in the SPY and down 0.82% in the DIA) while the QQQ opened flat.  This came after markets had rethought the Thursday lifelines that had been thrown the CS ($50 billion loan) and FRC ($30 billion in deposits from the US mega banks).  After a half hour of waffling to the side, all three major indices sold off sharply until 11:45 am.  From there, the rest of the day saw a sideways grind inside of a tight range.  This action gave us Bearish Harami candles in the two large-cap indices and a black Spinning Top in the QQQ.  It is worth noting that the SPY crossed back down through its T-line (8ema) and 200sma after having crossed above Thursday.

On the day, all 10 sectors were in the red with Financial Services (-3.09%) leading the way lower while Communications Services (-0.64%) held up better than other sectors.  At the same time, the SPY lost 1.55%, the DIA lost 1.47%, and the QQQ lost 0.47%.  VXX spiked by 10.90% to 55.96 and T2122 dropped back inside of the oversold area at 8.54.  10-year bond yields plunged to 3.429% on a risk-off day while Oil (WTI) fell another 2.96% to $66.34 per barrel.  So, Friday saw a gap lower on more fear of bank collapses.  However, the QQQ bulls did not really give much back and remained the strongest of the major indices.  Once again, this happened on heavier-than-average volume across the board, particularly in the QQQ.  This pattern of increasing volumes has been noticeable the entire last week.

In economic news, February Industrial Production came in far below expectation on a year-on-year basis at -0.25% (compared to a forecast of +3.00% and the January reading of +0.49%).  On a month-on-month basis, Feb. Industrial Production was flat but still below the expectation of +0.2% and far below the January monthly +0.3% value.  So, bottom line, for the third day in a row we had data suggesting industrial manufacturing is not in great shape.  Then, later in the day, Michigan Consumer Sentiment also came in below expectation at 63.4 (versus a forecast of 66.9 and well below the February reading of 67.0).  With all of that said, fear of spreading liquidity problems for regional banks (which have plowed massive amounts of money in long-dated bonds for years and now would lose their shirts if forced to sell in order to fulfill deposit redemption requests) and the entire CS solvency problem, made the health of the US and Global banking system the primary economic topic Friday.

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In stock news, META launched a verification subscription service like the one Elon Musk did at Twitter and later SNAP launched.  The META service is available on both Facebook and Instagram.  Elsewhere, Bill Ackman tweeted Friday that BAC is buying recently closed SBNY as of today (Monday).  He didn’t cite a source of his information.  However, Reuters then reported that sources tell it that Ackman’s rumor is false.  In unrelated news, the Financial Times reported Friday that the GS trading desk has lost around $200 million in the market turmoil following the collapse of SIVB.  Meanwhile, after the close Friday, BRKB urged its shareholders to reject proposals that company management avoids discussing hot-button social and political issues.  They also asked shareholders to reject a proposal that the company discloses more about its climate change and diversity efforts.  At the same time, but unrelated, BBBY announced it will do a reverse stock split and a special meeting on March 27 to determine the ratio (between 1-for-5 and 1-for-10). The BBBY stock was down 23% in after-hours trading on the news.  Finally, the Wall Street Journal reported that DIS kept 94% of its subscribers despite raising prices 38% on its Disney+ streaming service.

In stock legal and regulatory news, the SEC will vote Wednesday on new regulations first proposed in January 2022 that would require funds to report within one business day any events indicating “significant stress.”  (The idea, introduced after the Archegos Capital Management collapse, is that even the collapse of private funds could pose a systemic threat to other financial institutions.)  Elsewhere, ASTR has asked Nasdaq for more time to get its stock price back above $1 to avoid being delisted.  The company has not been in compliance since October.  ASTR said it expects to hear back from the exchanges by April 5, which follows its March 30 earnings report.  If an extension is not granted, ASTR will face being dropped by the exchange.  After the close Friday, a US Appeals Court revived a lawsuit by UBER challenging the CA law that would require them to provide proof that workers are independent contractors in order to avoid having to treat them as employees.  Meanwhile, days after being sued by the state of Ohio, NSC shareholders sued the railroad for defrauding them by prioritizing profit over safety.  (Being too risk-seeking instead of capital preservationist.) Finally, on Sunday, the FDIC said that a subsidiary of NYCB will take over the vast majority of SBNY (including the branches and $60 billion in outstanding loans), leaving about $4 billion in receivership.

Regarding the CS saga, Friday afternoon, Reuters reported that CS would be holding internal talks over the weekend on “the scenarios facing the bank.” That came as other major European banks had already “curbed dealing with CS” until after events play out.  Those banks included DB and SCGLY, and HSBC according to Reuters.  Friday night, the Financial Times reported that UBS was in talks to buy CS or at least some of the assets of CS.  By Sunday, Bloomberg reported that UBS had offered to buy CS for (a paltry) $1 billion and that CS was pushing back against that offer.  Meanwhile, the Financial Times said multiple sources told it that the Swiss government was seriously considering either a partial or full nationalization of the troubled bank.  Finally, on Sunday evening, CS agreed to terms with UBS acquiring them for $3.2 billion (CS shareholders get 1 UBS share for every 22.48 CS shares they hold).  The Swiss National Bank also pledged a $108 billion loan to support the takeover project.

Overnight, Asian markets were red across the board.  Hong Kong (-2.65%) was by far the biggest loser with Japan (-1.42%). Australia (-1.38%), Singapore (-1.37%) and New Zealand (-1.37%) leading the region lower.  Meanwhile, in Europe, the bourses lean heavily toward the green side at midday.  The FTSE (+0.22%), DAX (+0.65%), and CAC (+0.73%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are Pointing toward a start to the day just on the green side of flat.  The DIA implies a dead flat open, the SPY is implying a +0.02% open, and the QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields continue to fall, now at 3.376% and Oil (WTI) is off 1.5% to $65.74/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include FL and PDD before the opening bell.  Then after the close, ACDC reports.

In economic news later this week, on Tuesday we get Feb. Existing Home Sales and EIA Crude Oil Inventories.  Then Wednesday, Q1 Interest Rate Projections, the Fed Rate Decision, and Fed Statement are all reported and the Fed Chair Press Conference takes place.  On Thursday, we get Building Permits, Q4 Current Account, Weekly Initial Jobless Claims, and New Home Sales.  Finally, on Friday, Feb. Durable Goods, Mfg. PMI, S&P Global Composite PMI, and Services PMI are reported.

In earnings later this week, on Tuesday, we hear from CSIQ, TME, AIR, GME, and NKE.  Then Wednesday, OLLI, WOOF, WGO, CHWY, KBH, MLKN, SCS and WOR report.  On Thursday, we hear from CAN, DOOO, CMC, DRI, FDS, and GIS.  Finally, on Friday, EXPR reports.

So far this morning, FL posted beats on both the revenue and earnings lines.  (FL  posted a massive beat on revenue…at 86.5% positive surprise.)  However, PDD missed on revenue while beating on earnings.  It is worth noting that FL also lowered its forward guidance.

With that background, it looks like the SPY is remaining in its range from the previous seven days. At the same time, DIA was below its own seven-day range but has climbed back up into that area now. Meanwhile, the QQQ (which has been the market leader for some time) seems to be continuing its pullback inside Thursday’s big bullish candle…at least in premarket action. Overextension is not an issue in any of the indices at this point. However, T2122 is well into the Bullish Reversal Zone (extended). Another issue we have to deal with today is that the banking situation in the US (mainly regionals) is not settled. FRC is down more than 20% in premarket action (which is actually a 26% recovery from the premarket lows). On the other hand, NYCB and PACW are up 30% and 18% respectively. So be prepared for volatility swings as the explosiveness of regional banks spills over into other areas of the market on what would normally be a “wait and see” a couple of days ahead of the Fed Meeting Wednesday.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened weak on Thursday with SPY gapping down 0.62%, DIA gapping down 0.59%, and QQQ gapping down 0.29%.  However, bulls immediately started a strong rally in the QQQ and the two large-cap indices followed after an hour of wandering around near the open.  Shortly after 1 pm, all three major indices rallies began a very mild consolidation pullback that lasted until 2:40 pm.  At that point, a more modest rally got underway again and drove into the close with the SPY, DIA, and QQQ all closing very near the highs of the day.  This action gave us large, white-bodied candles with very little wick.  Again, the QQQ led, bouncing up off its T-line (8ema) and pulling away during the day to break the downtrend line that had held since the start of February.  For its part, the SPY crossed up through its T-line and 200sma.  Meanwhile, the DIA came up and is sitting just below both its T-line and 200sma.

On the day, nine of the 10 sectors were in the green with Technology (+2.77%) leading the way higher while Communications Services (-0.27%) was the only red sector.  At the same time, the SPY gained 1.73%, the DIA gained 1.17%, and the QQQ gained 2.64%.  VXX plummeted 8.19% to 50.46 and T2122 surged back up out of oversold territory at 31.93.  10-year bond yields surged to 3.587% on a risk-on day while Oil (WTI) climbed 1.12% to $68.32 per barrel.  So, Thursday, saw a gap lower on lasting fear of bank contagion.  However, the bulls led by tech (particularly semiconductors) rallied markets out of the recent choppy consolidation range.  Again, this happened on heavier-than-average volumes across the board, particularly in the QQQ.

In economic news, February Building Permits came in notably stronger than expected at 1.524 million (versus a forecast of 1.340 million and much stronger than the January reading of 1.339 million).   Likewise, the February Housing Starts came in above expectations at 1.450 million (compared to the forecast of 1.310 million and the Jan. value of 1.321 million).  This meant Building Permits were up 13.8% for February and Housing Starts were up 9.8%.  Both seem to show the housing market remains strong.  Meanwhile, the February Export Price Index was well above expectation at +0.2% (compared to a forecast of -0.1% but down significantly from the January +0.5% value).  At the same time, the February Import Price Index fell but not as much as expected at -0.1% (versus a forecast of -0.2% and a January reading of -0.4%).  This means the average value of the goods the US exported rose while the average value of goods imported fell in February. Elsewhere, Weekly Initial Jobless Claims came in lower than expected at 192k (compared to a forecast of 205k and well below the prior week’s 212k).  All of the above tends to show a robust economy.  On the other side of the ledger, like the Empire State report Wednesday, the Philly Fed Mfg. Index came in well below the reading expected at -23.2 (versus a forecast of -15.6 but slightly better than the Feb. reading of -24.3).  So, currently (March), Manufacturing seems to have slowed greatly while the rest of the economy appears to still be in good shape.

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In stock news, the Financial Times reported that HOOD made a policy exception (policy banning short positions) for their customers who had Puts on SBNY.  The exception will allow HOOD customers holding profitable Puts in SBNY to keep those positions open into the expiration date (today).  Elsewhere, STLA has launched the first tranche of its nearly $1.6 billion buyback program starting today and going through June.  Meanwhile, BLNK announced Thursday that it has won a contract from the US Postal Service to sell the agency 41,500 electric vehicle charging units.  (No dollar amount was given for the contract.)  Mid-afternoon, Reuters reported that PACW was well into talks about receiving a liquidity boost from ATCO.  In other regional bank news, FRC received $30 billion from JPM, C, BAC, WFC, GS, and MS as part of a rescue package.  Later, to calm investor fears, the CEO of MULN released a statement telling investors that the automaker was on track to fulfill its deliveries schedule, including beginning delivery for a 6,000-unit order before the end of March.  After the close, MSFT announced and made a demo of a new “AI Copilot” for its Office 365 programs (Word, Excel, PowerPoint, and Outlook).  The AI product will first be released to 20 of MSFT’s enterprise customers but will be rolled out wider soon.  Finally, DUK announced after the close, that its unit in Central Florida (Polk County) will begin construction this month on its first water-based (lake) solar array of 1,800 floating solar panels (generating 1 megawatt) covering 2 acres of water.

In stock legal and regulatory news, AAL lost an appeal to the European Union Court of Justice which had sought to get the EU to nullify an agreement between AAL and DAL (where AAL gave up two airport landing slots to DAL for the Heathrow and Philadelphia airports) due to DAL not using the slots they were given.  At nearly the same time, London’s High Court ruled LNVGY (Lenovo) must pay IDCC $138.7 million for a license for use of a portfolio of IDCC’s telecom patents. Elsewhere, CS was sued by US investors claiming the bank defrauded them by concealing problems and for having material weaknesses in internal controls that contributed to those shareholders having the wrong impression of the bank’s finances.  Meanwhile, after the close, the FDA Advisory Board voted 16-1 in favor of full approval of the PFE oral COVID-19 antiviral treatment for adults at high risk of progression to severe disease.  (The FDA very seldom rules against the Advisory Board’s recommendation.)  Also, after the close, Dept. of Labor investigators reported that BP safety rules and poor training contributed to the death of two Ohio refinery workers last year.  OSHA has proposed that BP pay $156,250 in penalties (the amount is limited by federal statute) for eleven violations at the facility, which BP has since sold to CVE.

In miscellaneous news, the Fed reported data Thursday evening saying that banks had borrowed a record $153 billion from its Discount window over the last week.  This was a massive jump over the prior week’s borrowing of $4.58 billion.  In addition, it was a huge increase in the record borrowing from the Fed. Prior to this week, the previous record was $111 billion borrowed in one week during the 2008 financial crisis.  Elsewhere, there are a few troubling signs (in terms of economic strength) coming out of how companies treat their employees when times get tough.  BBBY announced Thursday that it will not pay severance to the employees let go from stores the retailer closes.  (Presumably, those people would still be eligible to draw state unemployment insurance benefits, meaning presumably the company paid unemployment premiums for those employees.)  Then, last night, GOOGL decided it will not honor previously approved (and started) medical or maternity leave of those employees it has laid off.  However, regardless of the employee’s status at the time of layoff, those people will get standard severance as of their termination date. There was no word on how much this move will save the tech giant.

After the close, FDX missed on the revenue line but crushed estimates on earnings ($3.41 versus the analyst-expected $2.76 per share).  FDX also raised its forward guidance for 2023.

Overnight, Asian markets ended the week green across the board.  Hong Kong (+1.64%), Taiwan (+1.52%), Malaysia (+1.46%), and Japan (+1.20%) led the region higher.  Meanwhile, in Europe, the bourses lean heavily to the green side at midday.  Only Portugal (-1.05%) and Switzerland (-0.25%) are in the red.  At the same time, the FTSE (+0.45%), DAX (+0.33%), and CAC (+0.19%) lead the rest of the region higher in early afternoon trading.  As of 7:30 am, US Futures are modestly down.  The DIA implies a -0.44% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.03% open.  10-year bond yields are falling significantly again (implying a move to safety) at 3.50% and Oil (WTI) is up 0.35% to $68.59/barrel in early trading.

The major economic news events scheduled for Friday are limited to Feb. Industrial Production (9:15 am), and Michigan Consumer Sentiment (10 am).  The major earnings reports scheduled for the day include AQN and XPEV before the opening bell.  There are no major earnings reports scheduled for after the close. Also, be aware that today is Triple-Witching Friday.

So far this morning, AQN beat on both the revenue and earnings lines.  However, XPEV missed on both lines.  It is also worth noting that XPEV has lowered its forward guidance. Unrelated, but also of note is that CS, FRC, PACW, and probably other banks are getting hammered by bears again early this morning. There seems to have been a rethink about whether the huge bailout loans/deposits of CS and FRC are bullish or bearish. Beware any spread of that sentiment across the other banks.

In central banks news, despite the EU raising rates 0.50% Thursday, Fed Funds Futures indicate there is an 80.5% probability of a quarter-point hike by the FOMC next week.  The remaining 19.5% of probability is on “there will be no hike at all.” Interestingly, one of the reasons cited by European Central Bank President Lagarde for staying with a half percent rate hike was that the ECB feared a change in course would spook markets.  As one would expect, she went on to say the European banking system is strong, there is no liquidity crisis, and there is no tradeoff between price stability (inflation) and financial stability.  On the other side of the Pacific, China loosened its reserve requirement ratio (the key tool the People’s Bank of China uses to regulate monetary policy).  The move reduces that requirement to 7.6%, the lowest level since 2007.  So, China is easing, Europe is tightening, and the US appears to be on path to slowing its tightening.

With that background, it looks like markets are reassessing yesterday’s bullish move, despite the FRC bailout taking shape (which was just a rumor yesterday afternoon). The SPY looks to be coming back down to retest its T-line and 200sma. Meanwhile, the DIA looks to be failing or pushing down off those averages in premarket action. However, QQQ remains strong and QQQ bulls are not giving an inch this morning. Overextension is not an issue in large-cap indices. However, QQQ is a bit extended above its T-line. Another issue we have to deal with today is that today is Triple-Witching Friday. So be prepared for volatility swings as the big institutions roll positions (on top of banking sector concerns and news). And, triple witching or not, it is Friday. So, take some profit, pay yourself, and get your positions ready for the weekend news cycle and Fed meeting next week.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, US markets opened significantly lower, following Europe, in the wake of news that troubled major bank CS would not get any more financial support from its largest holder (Saudi National Bank).  The SPY gapped 1.5% lower, the DIA gapped down 1.64%, and QQQ gapped 0.91% lower at the open.  The QQQ then rode a roller coaster sideways until 1 pm, when a strong rally started that recrossed the opening gap and took it to the highs of the day at 3 pm.  Meanwhile, the two large-cap indices then meandered above and below their opening level until just before 2 pm.  At that point, they followed the QQQ higher in a rally that lasted until 3 pm but never recrossed their opening gap lower.  From 3 pm into the close, all three major indices chopped sideways.  This action gave us gap-down, white-bodied, candles with large lower wicks and very little upper wick in the SPY, DIA, and QQQ.  QQQ also closed above its T-line after a morning retest.

On the day, nine of the 10 sectors were in the red with Energy (-5.04%) leading the way lower while Utilities (+0.63%) was the only green sector.  At the same time, the SPY lost 0.62%, the DIA lost 0.83%, and QQQ gained 0.52%.  VXX spiked 6.39% to 54.96 and T2122 fell back deep into the oversold territory at 4.20.  10-year bond yields plummeted again to 3.47% as traders sought shelter in bonds and Oil (WTI) plunged 4.23% to $68.31 per barrel (the lowest in more than a year).  So, Wednesday, saw a large gap lower on fear of bank contagion from CS in Europe.  However, the bulls finally got things going in the afternoon to rally back, led by the tech-heavy QQQ.  Once again, this happened on heavier-than-average volume, particularly in the SPY and DIA.

In economic news, the February PPI came in much better than expected at -0.1% (compared to a forecast of +0.3% and the January reading of +0.3%).  The Feb. Core PPI number also thumped expectations a 0.0% (versus the forecast of +0.4% and even better than the January value of +0.1%).  So, markets got good news in the “reasons the Fed might slow down hikes” front.  However, the NY Fed Empire State Mfg. Index was a bad miss, coming in at -24.60 (compared to a forecast of -8.00 and a January reading of -5.80).  February Retail Sales fared better but also missed coming in at -0.4% (versus a forecast of -0.3% and far worse than the January reading of +3.2%).  Later in the morning, January Business Inventories beat estimates by coming in at -0.1% (compared to a forecast of +0.1% and a December value of +0.3%).  This was the first fall in business inventories in almost two years.  January Retail Inventories also beat expectations at +0.1% (versus the forecast of +0.2% and the Dec. reading of +0.2%).  Finally, the EIA Weekly Crude Oil Inventories showed a build of 1.550 million barrels (versus a forecasted build of 1.188 million barrels and far worse than the previous week’s drawdown of 1.694 million barrels).

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In stock news, TMUS announced it has agreed to buy budget mobile service Mint Mobile (owned by celebrity Ryan Reynolds) for $1.35 billion.  Elsewhere, the FDIC has contracted with PIPR to relaunch an auction for failed lender SIVB.  (Rumored bidders include RY and PNC.)  Late in the day, Bloomberg reported that the Swiss government was in talks with CS on options to stabilize the bank.  At the same time, the Swiss National Bank had pledged financial support for the company (the second largest Swiss bank behind UBS).  At the same time, the US Senate Banking Committee said Wednesday it will hold hearings on banking sector risks which are likely to include questioning of C, JPM, BAC, WFC, USB, PNC, and perhaps some of the most volatile regional banks.  However, Republicans also want answers from regulators as to why SIVB was not caught before its collapse.  (However, SIVB was not subject to stress tests or other risk management rules since the 2018 regulation rollbacks.)  No reintroduction of old or introduction of new regulations is expected for political reasons.  Meanwhile, K announced it will change its name (of the remaining global snack unit) to “Kellanova” once its North American cereal unit is spun off.  Kellanova will continue to trade under ticker K.  Late in the afternoon, Reuters reported that XOM is strongly considering selling its majority stake in the Rovigo LNG terminal located offshore Italy.

In stock legal and regulatory news, the US Consumer Financial Protection Bureau has opened an investigation into data broker companies that collect and track personal data.  No specific targets were mentioned, but among the largest brokers of that data are EFX, ORCL, and EXPGY (as well as several unlisted companies).  Meanwhile, Medicare announced Wednesday that it will impose “inflation fines” on 27 drugs for having had their prices raised faster than the inflation rate.  These include drugs from ABBV, GILD, PFE, KMDA, JNJ, and SGEN.  The fines vary from $2 to $390 per dose.  In the auto industry, TSLA has been hit with a class action lawsuit over the company preventing TSLA car owners from exercising “the right to repair.”  In legal news BUD lost its case, in which BUD had accused STZ of violating a US distribution agreement related to selling hard seltzers.  Elsewhere, the COP Willow project has been hit with a lawsuit filed by a coalition of environmental groups hoping to reverse President Biden’s recent approval of the project.  (COP is not the defendant as the suit is against the Bureau of Land Management, but they are the one impacted by the suit.)  After the close, a federal appeals court upheld the $5.6 billion antitrust class-action settlement against V and MC (filed on behalf of 12 million retailers).

After the close, ADBE, ZTO, and FIVE reported beats on both the revenue and the earnings line.  Meanwhile, AE and TPC missed on revenue while reporting in-line on earnings (although both were losses).  It is worth noting that TPC reduced its forward guidance.

Overnight, Asian markets leaned heavily to the red side, with only New Zealand (+0.70%) and India (+0.08%) managing to stay green.  Meanwhile, Hong Kong (-1.72%), Shenzhen (-1.54%), and Australia (-1.46%) led the region lower.  In Europe, we see the opposite picture taking shape at midday.  Only Denmark (-0.53%) and Russia (-0.05%) are in the red, while the FTSE (+0.77%), DAX (+0.35%), and CAC (+0.56%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed but generally down start to the day.  The DIA implies a -0.48% open, the SPY is implying a -0.38% open, and the QQQ implies a +0.09% open at this hour.  At the same time, 10-year bond yields are lower again to 3.468% and Oil (WTI) is off fractionally to $67.38/barrel in early trading.  

The major economic news events scheduled for Thursday include February Building Permits, Feb. Housing Starts, Feb. Export Price Index, Feb. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am).  The major earnings reports scheduled for the day include ASO, DG, GIII, MOMO, JBL, BEKE, LE, SIG, TITN, and WSM before the opening bell.  Then after the close, FDX reports.

In economic news later this week, on Friday, Feb. Industrial Production, and Michigan Consumer Sentiment are reported.  Meanwhile, in earnings later this week, on Friday, AQN and XPEV report.

So far this morning, SIG, BEKE, MOMO, OEZVY, and PLCE all reported beats on the revenue and earnings lines.  Meanwhile, DG and DBI missed on the revenue line while beating on earnings.  On the other side, GIII and LE both beat on revenue while missing on the earnings line.  (JBL, WSM, and ASO report later in the morning.)  It is worth noting that BEKE raised its forward guidance while DBI, GIII, MOMO, and PLCE lowered forward guidance.

In late-breaking bank news, CS soared overnight on more details.  The Swiss bank regulators announced that CS meets all capital and liquidity requirements and the Swiss National Bank said it has loaned CS $54 billion.  CS stock was up as much as 24% in the US premarket session before fading to up 5.5% after soaring 30% at the European open.  Meanwhile, regional bank FRC was cut to “junk credit status” by two rating agencies (S&P and Fitch) Wednesday and overnight announced it is seeking “strategic alternatives” including the sale of the company.  Elsewhere, it was announced last night that GS received $100 million for its part in trying to broker the sale of SIVB and for buying SIVB bonds as part of last-ditch efforts to save the bank.  (At least one US Senator is demanding investigation and potential clawbacks since GS was on both sides of the sale of those bonds.)  In other GS news, they raised their odds of a US recession to 35% based on the banking crisis.

With that background, premarkets have faded from early apparent moves higher (following Europe). Ahead of the morning data, it looks like we are in a flat, wait-and-see, mood. The most that can be said of the action this week might be that the large-cap indices are in a choppy consolidation for the last 4-5 days. Meanwhile, the QQQ is trying to pull the market a bit higher. Overextension is not an issue this morning. However, choosing a direction and getting some follow-through is an issue. Expect more volatility as the banking saga plays out with ever more shoes dropping and corresponding “all is well” signs. Be careful and either quick or slow and able to take short-term pressure in your trading.

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 higher Tuesday as trader fear over regional banks faded over Monday night.  The SPY opened up 1.33% higher, the DIA up 1.04% higher, and the QQQ up 1.21% higher.  All three of those major indices then led a slow, steady rally until 11:30 am.  From that point, we saw a slow, steady pullback until 1 pm.  At 1 pm, that selloff picked up steam, reaching the lows of the day at about 3:20 pm.  However, the day ended with a rally in the last 40 minutes.  This action gave us gap-up, white-body candles.  The QQQ had the least wick on each end and crossed back above its T-line (8ema), 50sma, and 200sma.  However, the DIA printed a gap-up Doji that remained below its T-line and could be said to have failed a test of its 200sma overhead during the day.  Lastly, the SPY printed a gap-up, Spinning Top candle that failed a retest of its T-line and 200sma. 

On the day, all 10 sectors were in the green with Technology (+2.30%) leading the way higher while Energy (+0.40%) lagged behind the other sectors.  At the same time, the SPY gained 1.65%, the DIA gained 1.07%, and QQQ gained 2.30%.  VXX fell more than 5% to 51.66 and T2122 climbed but remains inside the oversold territory at 17.81.  10-year bond yields climbed to 3.691% and Oil (WTI) fell 4.4% to $71.52 per barrel.  So, Tuesday saw a reversal of sentiment, particularly in the regional banks, during the premarket and then a whipsaw day.  This was led by extremely volatile regional banks, which gapped very strongly higher but then got hit midday when Moody’s announced it has placed five regional banks on “review for downgrade” in terms of creditworthiness.  (I don’t know how much to put into this, but Bloomberg reported that more than 100 top executives of regional banks bought shares of their own company Tuesday.)  Once again, this happened on heavier-than-average volume, particularly in the SPY.

In economic news, interestingly, the February CPI numbers were a non-event for the market.  The year-over-year number came in at 6% which was exactly as expected (and much better than the January surprise 6.4%).  Meanwhile, the month-on-month number came in at 0.4% (again exactly as forecast but 0.1% better than the 0.5% reading last month).  At the same time, the February Core CPI reading was right on forecast year-over-year (and had fallen a tenth of a percent from January) while the month-over-month reading came in 0.1% high at 0.5% (versus a forecast and previous reading of 0.4%).  The bottom line is that this indicated that inflation is coming down but remains far above the Fed’s 2% target.  After hours, the API Weekly Crude Oil Stocks report was released.  The report said that US crude inventories rose 1.155 million barrels last week.  However, the report also saw sharp weekly declines in gasoline and distillates (diesel and heating oil) inventories.

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In stock news, NKE announced it will stop using kangaroo skin for shoes later this year.  This move comes weeks after German rival Puma made the same move.  In aerospace news, BA said its plane deliveries fell to 28 in February (down from 38 in January).  The company cites supply chain problems.  Over in the semiconductor space, Reuters reported that INFN (chips for telecom) is exploring strategic options including the sale of the company.  Elsewhere, RCAT announced it has made an unspecified “significant” investment in Firestorm (an American company that is developing a completely modular 3D-printed UAV.  Meanwhile, AMC investors approved issuing more shares and implementing a 1-for-10 reverse split while also converting APE shares into AMC common stock.  The move will allow AMC to raise money while diluting the position of existing AMC holders.  APE shares jumped 22% on the news while AMC fell 12%.  In Cupertino, AAPL stalled bonuses and promotions (and said they will reduce the frequency of future bonuses) while also expanding the company hiring freeze.  In other big tech news, META said on Tuesday that it will cut 10,000 jobs sometime this year.  This follows the company’s first round of layoffs last fall where 11,000 jobs (13% of the workforce) were eliminated.  In food news, TSN said after the close Tuesday that it will be closing two chicken processing plants in the US on May 12, resulting in the termination of 1,700 employees.  At the same time, DLTR announced it is at least temporarily stopped selling eggs amidst skyrocketing egg prices from last year.   The company says it hopes to bring back eggs in the fall.

In stock legal and regulatory news, a CA judge ruled that a California Civil Rights Agency must provide details of its investigation that resulted in the agency suing TSLA over “widespread race discrimination” at its main assembly plant.  (TSLA is claiming the agency did not investigate the discrimination cases before suing the company.)  In medical news, the FDA said data from PFE’s oral COVID-19 drug trials support its use in adults with a high risk of progressing to severe disease.  This brings the drug (pill) closer to approval.  At the same time, NVO said it will follow the lead of LLY and slash the list price for its insulin by up to 75%, bowing to pressure from President Biden and the 2022 Inflation Reduction Act (which capped Medicare recipients insulin price at $35 per month).  In the tech space, EBAY asked a US judge to block META’s bid to get an EBAY executive to testify as part of its defense of an FTC antitrust lawsuit.  EBAY claimed the META subpoena would allow META (whose marketplace is a competitor to EBAY) to get proprietary information. Elsewhere, the US Surface Transportation Board is set to announce its decision on whether to approve or reject the CP $31 billion bid to acquire KSU today.  In other railroad news, the state of Ohio sued NSC on Tuesday over the February 3 derailment that released over one million gallons of hazardous materials into the environment around East Palestine OH.  No dollar amount is yet listed, but the suit seeks compensation for the cleanup as well as the death of tens of thousands of animals and fish.

In energy news, oil fell to a three-month low on Tuesday, purportedly on worries that inflation will cause the Fed to increase rates higher than expected.  This is a bit odd since the stock market seems to have had a completely different read on the CPI data.  Elsewhere, the US Senate reintroduced a bill at the urging of the American Petroleum Institute (big oil) that would allow the nationwide sale, year-round, of a higher percentage blend of ethanol.  The bipartisan bill would allow a 15% blend (10% is the current maximum) and would increase US corn demand and perhaps food input prices at the margin.  The stated purposes of the bill are reducing fuel costs and dependence on foreign oil.  For what it is worth, it should be noted that this bill is opposed by many environmental groups (ethanol causes more smog than gasoline) and the US is an oil exporter, not an importer (3.6 million barrels per day exported).  However, there is broad backing from midwestern (corn-producing) states and the oil industry.  Finally, after the close, the US Interior Dept. withdrew a land exchange deal that had been approved by the Trump administration.  The deal would have allowed a road to be built through a national wildlife refuge to allow oil companies to more easily reach the North Slope drilling facilities.

After the close, GES, LEN, and CTOS all reported beats on the revenue and earnings lines.  Meanwhile, STNE missed on revenue while beating on earnings.  It is worth noting that GES lowered its forward guidance.  (LEN specifically cited high property prices as having helped offset supply problems during the quarter.)

Overnight, Asian markets leaned heavily to the green side.  Thailand (+2.70%), Hong Kong (+1.52%), and Singapore (+1.38%) led the region higher while India (-0.42%) was the only appreciable red in the area.  Meanwhile, in Europe, at midday, we see deep red across the board after the top holder of CS ruled out investing more in the company.  The FTSE (-2.32%), DAX (-2.81%), and CAC (-3.42%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a big move lower to start the day.  The DIA implies a -1.54% open, the SPY is implying a -1.55% open, and the QQQ implies a -1.38% open at this hour.  At the same time, 10-year bond yields are plunging to 3.526% and Oil (WTI) is down another 1.78% to $70.09/barrel in early trading.    

The major economic news events scheduled for Wednesday include February PPI, Feb. Retail Sales, and NY Empire State Mfg. Index (all at 8:30 am), Jan. Business Inventories and Jan. Retail Inventories (both at 10 am), and EIA Weekly Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day include ARCO and CLMT before the opening bell.  Then after the close, ADBE, FIVE, HSAI, YY, TPC, and ZTO report.

In economic news later this week, on Thursday, we get Feb. Building Permits, Feb. Housing Starts, Feb. Export Price Index, Feb. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index.  Finally, on Friday, Feb. Industrial Production, and Michigan Consumer Sentiment are reported.

In earnings later this week, on Thursday, we hear from ASO, DG, GIII, MOMO, JBL, BEKE, LE, SIG, TITN, WSM, and FDX.  Finally, Friday, AQN and XPEV report.

So far this morning, ARCO reported beats on both the revenue and earnings lines.  Meanwhile, CLMT beat on revenue while missing on earnings.  On the other side, EONGY missed on revenue while coming in in-line on earnings.

In late-breaking news, the Saudi National Bank, the largest holder of CS, ruled out providing any more assistance to the troubled Swiss bank.  This caused CS shares to plummet 24% before rebounding slightly and led to a spread of fear throughout Europe similar to what US markets suffered under the SIVB collapse last Friday.  Elsewhere, US mortgage demand rose 6.5% for the week (a 7% increase for home purchase loan applications and a 5% increase in refinance applications).  This came after rates plummeted on the SIVB news and came despite extremely volatile US interest rates.  Meanwhile, it was announced the federal prosecutors were investigating SBNY over their business with crypto clients prior to the bank being shut down.  However, NY state banking regulators said the closure had nothing to do with crypto.

With that background, markets seem to be following Europe’s lead in fearing a CS collapse (despite CS being well down the list of largest global banks or largest US banks). It looks like the bears are headed back to retest Monday’s candle, but in extremely volatile action during premarket. The QQQ, which has been the market leader all year, seems to be giving back the T-line (8ema). Of course, we still have PPI and Empire State Mfg. Index dat a to come before the bell. However, the trend remains bearish and strong. Extention is not yet a big problem in terms of the T-line or the T2122 indicator (at least as of Tuesday’s closing price). However, we need to watch out for gaps and extreme volatility at the open. So, this might be a time to sit on your hands until things settle out unless you are a seasoned volatility scalper/trader.

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.

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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 Monday, markets gapped lower on the contagion fear coming from the collapse of SIVB on Friday.  The SPY gapped down 1.03%, DIA gapped down 0.91%, and QQQ gapped down 0.65%.  However, the bulls immediately stepped in to buy the dip and rally stocks hard until 11:30 am – 12 pm.  From noon to 1:30 pm, we saw a pullback across all three major indices.  Then from 1:30 pm to 3:30 pm we got a roundtrip rally and fade, bringing us back to roughly the 1:30 pm level.  At that point, we saw a small bounce before continuing lower to close out the day.  This action gave us white-bodied candles with large upper wicks and small lower wicks in all three major indices. 

On the day, six of the 10 sectors were in the red with Financial Services (-3.63%) again leading the way lower while Utilities (+1.29%) did best as investors ran for safety.  At the same time, the SPY lost 0.16%, the DIA lost 0.27%, and QQQ gained 0.74%.  The VXX spiked another 3% to 54.54 and T2122 dropped even more deeply into the oversold territory at 1.87.  10-year bond yields plummeted again to 3.549% (another massive move for bond yields) and Oil (WTI) fell almost 3% to $74.41 per barrel.  So, Monday saw the bears overreact with a big gap down at the open, the bulls overreact to that with a strong rally all morning, and then both sides wrestle their way not far from where we ended Friday.  Once again, this happened on heavier-than-average volume.

In economic news, the only real story of the day was the fallout and follow-up on the SIVB collapse last Friday.  Sunday evening, regulators closed SBNY to avoid a similar fate (and news cycle) as SIVB suffered.  Then, prior to the open Monday, the Treasury Dept., Fed, and FDIC announced that every depositor would be made whole for all deposits, regardless of the FDIC $250k insurance limit.  Meanwhile, the Fed created a new program called Bank Term Funding Program that will offer banks loans for up to a year.  (This program will allow banks in the same situation as SIVB to borrow against the low-yield bonds they own rather than be forced to liquidate them at a huge loss.  So, the banks will have money to cover any deposit withdrawals without booking big losses.)  Despite the Fed backstop, FDIC promised coverage of deposits, and proclamations from Sec. Yellen and President Biden that the system was sound (and made sure to emphasize that no taxpayer money will be used to clean up the mess), many regional banks took major hits in the market Monday.  These include FRC (-61.83%, WAL (-47.06%), KEY (-27.33%), ZION (-25.72%), and PACW (-21.05%).  As a result, many “industry analysts” and “economy talking heads” began calling for the Fed to halt its rate hikes “before something else breaks.”  Despite this, as of early evening on Monday, the Fed Fund Futures said there was still a 68% probability of a 0.25% rate hike next week with the other 32% betting on “no increase.”

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In stock news, PFE signed a $43 billion deal to acquire SGEN on Monday.  This deal has been rumored and in the works for quite some time (and was reported here long ago).  However, now it is official…pending regulatory approval.  In other M&A news, RBA released a letter responding to its founder (who had released a public letter in opposition to the RBA $7 billion acquisition of IAA).  In their response, RBA said their company is different than when Ritchie founded and ran the company since he retired nearly 20 years ago.  Essentially saying, RBA cannot be run as a small family-owned company if it is to keep delivering record growth and shareholder returns.  Meanwhile, after the close, it was disclosed that HYMLF has agreed to buy GM’s plant in India.  GM stopped selling cars in India in 2017 and sold a different plant in India to a Chinese firm in 2019.  However, this would complete GM’s exit from India.  Elsewhere, the US Dept. of Veterans Affairs (aka VA) announced Monday that it will begin providing coverage for a new Alzheimer’s treatment from BIIB and ESALY.  In other biotech news, Carl Icahn has launched a proxy fight with ILMN, demanding three board seats and criticizing the company’s acquisition of cancer test maker Grail.  After hours, Reuters reported that BA is expected to announce the sale of almost 80 787 Dreamliner jets to two Saudi Arabian airlines.  Finally, also after hours, UAL unexpectedly released a forecast of a loss for Q1 citing higher operating costs and weaker-than-expected demand.

In stock legal and regulatory news, the Interior Dept. approved a slightly cut-down (219 or 250 proposed wells approved) version of COP’s Willow oil and gas drilling project to be located inside the National Petroleum Reserve (a 23-million-acre area and the largest tract of undisturbed land in the US).  This was done over strenuous opposition from environmental groups.  COP estimates the project area holds 600 million barrels of oil.  Elsewhere, the US Court of Appeals has reversed a federal court decision, which had cited a US Supreme Court ruling that US Patent Office Trial and Appeal Board rulings cannot be appealed.  This ruling will allow many major companies to go back to federal district courts to appeal patent validity rulings including AAPL, GOOGL, CSCO, INTC, EW, TSLA, CMCSA, and others.  This will also prolong patent disputes by significant amounts and gives the major firms (with deeper pockets) an advantage in patent disputes.  Meanwhile, BUR (one of the largest litigation funders in the world) has sued SYY to prevent them from settling price-fixing claims with major chicken, pork, and beef producers.  BUR had advanced SYY $140 million so the company could sue the producers in exchange for a share of the settlement, but now says SYY is preparing to settle for “low-ball amounts.”  Finally, the US Dept. of Justice has filed suit against RAD charging that the company missed red flags it should have caught when it filled hundreds of thousands of opioid prescriptions between 2014 and 2019.

In late-breaking news, overnight CS admitted finding “material lapses in control” after the SEC prompted them on the matter last week.  The company released its annual report (which had been due for release last Thursday) and also said that its outflow of deposits has not reversed, but is at lower levels than in late 2022.  Meanwhile, the “too big to fail” major banks (BAC, C, JPM, WFC) are all reporting massive windfalls of new deposits in the last couple of days, streaming in as panicked customers seek safety.  Still, the stock market may be adjusting already as regional bank stocks are rocketing back toward prior prices in the premarket.  For example, FRC is up 33%, WAL is up 26%, KEY is up 17%, and ZION is up 11% this morning.  Finally, related to grain prices, the Ukraine-Russia grain deal (exempting Ukrainian grain shipments from Russian attacks in exchange for allowing Russian grain and fertilizer exports) has been extended for another 60 days.

Overnight, Asian markets were red across the board.  Thailand (-3.13%), South Korea (-2.56%), and Hong Kong (-2.27%) led the region lower.  Meanwhile, in Europe, the bourses lean heavily to the green side with only three showing red at midday.  The FTSE (-0.19%), Switzerland (-0.30%), and Amsterdam (-0.02%) are the only red while the DAX (+0.57%) and CAC (+0.27%) lead the region higher.  As of 7:30 am, the US Futures are pointing toward a green start to the day.  The DIA implies a +0.54% open, the SPY is implying a +0.63% open, and the QQQ implies a +0.58% open at this hour.  At the same time, 10-year bond yields have stabilized and climbed back to 3.602% while Oil (WTI) is down another 2.1% to $73.22/barrel in early trading.

The major economic news events scheduled for Tuesday include February CPI (8:30 am), API Weekly Crude Oil Stocks (4:30 pm), and we also hear from Fed member Bowman (5:20 pm).  The major earnings reports scheduled for the day include CAL and HIS before the opening bell.  Then after the close, GES, LEN, and STNE report.      

In economic news later this week, on Wednesday, February PPI. Feb. Retail Sales, NY Empire State Mfg. Index, Jan. Business Inventories, Jan. Retail Inventories, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get Feb. Building Permits, Feb. Housing Starts, Feb. Export Price Index, Feb. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index.  Finally, on Friday, Feb. Industrial Production, and Michigan Consumer Sentiment are reported.

In earnings later this week, on Wednesday, ARCO, CLMT, ADBE, FIVE, HSAI, YY, TPC, and ZTO report.  On Thursday, we hear from ASO, DG, GIII, MOMO, JBL, BEKE, LE, SIG, TITN, WSM, and FDX.  Finally, Friday, AQN and XPEV report.

So far this morning, CAL has reported beats on both the revenue and earnings lines.  IHS has not reported yet although scheduled at 6:55am.

With that background, it looks like the bulls are in charge early today (before the CPI release). However, expect heavy volatility at 8:30 am and again at the opening bell. The trend remains bearish and strong. Extention is not yet a big problem in terms of the T-line (8ema). However, the T2122 indicator is extremely stretched in the bullish reversal zone. As I see it, we are badly in need of at least a relief rally or pause. DIA found support early Monday. Any support SPY and QQQ found is less clear. The one thing we do know is that if the bulls are going to make any run at all, there will be many minor and major resistance levels to deal with overhead.

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 started out basically flat on Friday (down 0.15% on the SPY, down 0.18% in the DIA, and up 0.11% in the QQQ).  All three major indices then meandered sideways in the morning, with an up wave reaching the highs of the day at about 11:30 am.  At that point, the SPY, DIA, and QQQ all sold off strongly until 2 pm.  The rest of the day was spent in a relief bounce and then heading back down to the lows of the day at 3:50 pm before ending on a modest 10-minute bounce.  This action gave us larger-bodied, black candles with wicks on both ends.  The QQQ (which has been the leader for some time) took out its most recent swing-low (completing a Dreaded-h pattern) as well as breaking down through and closing just below both its converging 50sma (rising) and 200sma (falling).  At the same time, the SPY closed at a potential support level.

On the day, all 10 sectors were in the red with Financial Services (-2.75%) once again leading the way lower while Communications Services (-0.32%) held up best.  At the same time, the SPY lost 1.44%, the DIA lost 1.04%, and QQQ lost 1.40%.  The VXX spiked more than 11.4% to 52.93 and T2122 dropped even more deeply into the oversold territory at 2.08.  10-year bond yields plummeted to 3.704% (a massive 0.219% move for bond yields) and Oil (WTI) climbed 1.27% to $76.68 per barrel.  So, Friday saw the bears react to February Payrolls by anticipating that the Fed will not like stronger-than-expected jobs growth and will hike rates more than traders had already baked in.  This all happened on huge volume (at least in terms of recent months), the highest in the last four months…which begs the question as to whether this was capitulation?

In economic news, February Nonfarm Payrolls came in above expectation at +311k (compared to a forecast of +205k but well below the blowout January reading of +504k).  At the same time, Feb. Private Nonfarm Payrolls also beat expectations at +265k (versus the forecast of +210k and again, below the blowout January number of +386k).  Meanwhile, the February Participation Rate crept up to 62.5% (up from 62.4% in January).  However, the February Unemployment Rate unexpectedly rose to 3.6% (above the forecasted 3.4% and the January value of 3.4%).  On top of all this, the February Average Hourly Earnings (year-on-year) increased less than expected at +4.6% (as compared to the forecast of +4.7% but still well above the January reading of +4.4%).  So, overall, the bulls could hang their hat on the increase in payrolls showing good growth while also decreasing in pace as the Fed wants at the same time the wage growth is easing slightly.  However, the bears could see still much stronger job growth than anticipated and wage growth still far above the Fed’s target rate.  Finally, at 2 pm, the February Federal Budget Balance showed a larger deficit than was expected at -$262.0 billion (versus a forecast of -$256.0 billion).

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In stock news, after widespread rumors, FRC and WAL both calmed markets Friday saying their liquidity and deposits remain strong and neither expects spill-over effects from the SIVB implosion.  Elsewhere, MRNA said Friday that it is planning to hire 2,000 employees by the end of 2023 as well as setting up new West Coast offices as it plans to scale up RNA vaccine research.  (For comparison, MRNA had 3,900 employees at the end of 2022.)  Meanwhile, Reuters reported that GM is exploring the use of ChatGPT in a collaboration with MSFT.  In M&A news, a majority of RBA shareholders have voted in favor of the company buying IAA for about $7 billion (cash and stock).  At the same time, AAPL shareholders rejected two proposals from politically conservative groups related to diversity and business done with China.  In other news, seeking some good press (and/or avoiding negative) NSF agreed to give members of two unions up to seven paid sick days per year.  In addition, F announced they will resume the production of F-150 Lightning trucks today after solving battery cell manufacturing defects.  Finally, a rash of companies (especially silicon valley startups) are being forced to address how much of their assets are now tied up (and potentially lost) due to the failure of SIVB.  Among these are RBLX (who said 5% of its cash is tied up at SIVB) and ROKU (who said 26% of its cash is tied up at that bank).  It is worth noting that the FDIC only insures $250k in deposits.  However, capitalism never misses an opportunity as, on Saturday, several hedge funds began offering to buy the deposits of companies with stranded capital at a price of 60 cents on the dollar or less.

In stock legal and regulatory news, on Friday, SIVB was halted before the opening bell by the SEC and the bank itself was shut down by State of CA regulators who turned it over to the FDIC after the company failed to raise enough capital in its last-ditch stock offering Thursday.  Elsewhere, Reuters reported an exclusive on Friday saying that the OCC (Options Clearing Corporation, the largest options clearing house) and the FIA (Futures Industry Assn.) have begun investigating the risk of 0DTE (Zero Days to Expiration) options contracts in a project that began on March 1. This comes after analysts at JPM publicly said they fear 0DTE options could supercharge volatility, turning a 5% intraday loss into a 25% or greater rout.  (0DTE volume on the S&P500 have tripled since January.)  The leaning seems to be toward continuing to allow 0DTE options, but industry members are nervous (or perhaps are not making as much or in as much control of that new market yet). Meanwhile, after the close Friday, the FAA approved BA restarting the deliveries of 787 Dreamliners following the company resubmitting previous erroneous data analysis.

In bank fear news, the shocking speed behind the collapse of SIVB (the 16^th largest US bank) has made many think back on how quickly Lehman Brothers and Bear Sterns went under.  Speaking of speed, on Sunday, the FDIC completed the auction for buyers of SIVB assets after being unable to find a bank to acquire the entirety of SIVB.  Sunday morning, Treas. Sec. Yellen told CBS reporters that the government will not bail out SIVB, but is already working with its depositors on ways to secure their uninsured funds beyond what the FDIC insures. Later that same day, Sec. Yellen ordered the FDIC to allow SIVB depositors to have access to all their money Monday.  (So, the FDIC has been ordered to bail out the depositors, if not the bank, by increasing the amount of deposits covered.) Meanwhile, CNN reports that other US banks are now sitting on more than $620 billion in unrealized losses.  Since the banking system is all built on confidence, any fear of bank runs could cause a vicious cycle of fear causing runs and runs causing more fear.  By Sunday night, the Treasury Dept., Fed, and FDIC made a joint decision to close SBNY due to this systemic risk.  However, Reuters reported that several sources told them there will be some major government action (involving the Fed, Treasury Dept., and FDIC) to shore up the system. Most likely, this will be announced before the open today.

Overnight, Asian markets were mixed.  Hong Kong (+1.95%), Shanghai (+1.20%), and South Korea (+0.67%) led the gainers.  Meanwhile, Thailand (-1.66%), India (-1.49%), and Singapore (-1.42%) paced the losers. In Europe, with the lone exception of Russia (+0.26%), the regions are in the red across the board at midday.  The FTSE (-1.69%), DAX (-2.10%), and CAC (-1.92%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing to a mixed but green open.  The DIA implies a flat +0.05% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.89%  open at this hour.  At the same time, 10-year bond yields are plummeting again (as traders seek safe havens) to 3.549% and Oil (WTI) is down 1.54% to $75.50/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day are limited to LU and ZIM before the opening bell.  There are no reports scheduled for after the close.         

In economic news later this week, on Tuesday, we get February CPI, API Weekly Crude Oil Stocks, and hear from Fed member Bowman.  Then Wednesday, February PPI. Feb. Retail Sales, NY Empire State Mfg. Index, Jan. Business Inventories, Jan. Retail Inventories, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get Feb. Building Permits, Feb. Housing Starts, Feb. Export Price Index, Feb. Import Price Index, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index.  Finally, on Friday, Feb. Industrial Production, and Michigan Consumer Sentiment are reported.

In earnings later this week, on Tuesday, we hear from CAL, IHS, GES, LEN, and STNE.  Then Wednesday, ARCO, CLMT, ADBE, FIVE, HSAI, YY, TPC, and ZTO report.  On Thursday, we hear from ASO, DG, GIII, MOMO, JBL, BEKE, LE, SIG, TITN, WSM, and FDX.  Finally, Friday, AQN and XPEV report.

So far this morning, ZIM reported beats on both the revenue and earnings lines. At the same time, LU missed on revenue and reported in-line with analyst expectations on the earnings line.  Neither company has changed guidance as of this point.

In late-breaking news, HSBC bought the entirety of SIVB’s UK operations for the princely sum of $1.21 (1 pound sterling). So, UK customers of SIVB will continue life as normal while HSBC absorbs SIVB in that country. Elsewhere, GS has changed its call for the Fed next week. GS now expects no rate hike (pause), down from its earlier call of a quarter-percent hike this time around. Obviously, the reason for the change is an expectation the Fed will not want to change liquidity or make any more changes until the SIVB shock works its way out of the financial system. Traders have also shifted their bets with Fed Fund futures now showing a 66% probability of a quarter percent hike and a 34% of no hike at all.

With that background, it looks like futures are pulling back in the last 15-20 minutes. We are now looking at more of a flat (large-cap indices) to modestly up (QQQ) open to the day. Extention is not a problem in terms of the T-line (8ema). However, the T2122 indicator is very stretched. As I see it, SPY has no real support below til it reaches the 378-379 area. Meanwhile, the DIA has very, very modest support right here and then none until it reaches the 311 area. As for QQQ, I see no support until it reaches the 284 area. Expect volatility today. There will likely be unscheduled news and soothing words from the FDIC, Fed, Treasury Sec. Yellen, and maybe the President. However, it is hard to say whether the market will take those as a good thing or a reason to panic.

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

Well, that was a day.  On Thursday stocks gapped modestly higher at the open (up 0.19% in the SPY, up 0.36% in the DIA, and up 0.14% in the QQQ).  We even saw a little positive follow-through in all three major indices for the first half hour of the day.  However, then the bears stepped in taking the whole market on a steady selloff that lasted until 3:25 pm.  Only a very modest bounce in the last half hour kept all three indices from closing on their lows.  This action gave us large, black-bodied, Bearish Engulfing candles in the SPY, DIA, and QQQ.  All three also formed Doji Continuation (Doji Sandwich) patterns, suggesting more downside to come.  The QQQ crossed back below its T-line (8ema) and the two large-cap indices both gave up the support level of the most recent swing low.  SPY and DIA also crossed back below their 200sma.

On the day, all 10 sectors were in the red with Financial Services (-3.48%) leading the way lower (read “getting crushed”) and Consumer Defensive (-1.03%) and Utilities (-1.05%) holding up best.  At the same time, the SPY lost 1.83%, the DIA lost 1.65%, and QQQ lost 1.76%.  The VXX spiked more than 10% to 47.51 and T2122 dropped back deep into the oversold territory at 4.61.  10-year bond yields dropped to 3.905% and Oil (WTI) dropped 1.50% to $75.51 per barrel.  So, Thursday was a very decisively bearish day with the market not seeming to wait on Friday’s February Payrolls data.  This all happened on greater than average volume (the most volume we’ve seen in two weeks).

In economic news, the Weekly Initial Jobless Claims came in higher than expected at 211k (compared to a forecast of 195k and the prior week’s reading of 190k).  However, the main economic news on the day was President Biden’s budget proposal.  This was highlighted by a $3 trillion reduction in the federal deficit over 10 years.  The President proposes paying for this reduction by quadrupling the tax on company stock buybacks (but this only raises it from 1% to 4%).  He also proposed a “Billionaire Tax” on all households worth more than $100 million, which prohibits them from paying less than a minimum rate of 25%.  In addition, he proposed raising the corporate tax rate to 28% (from the current 21%, but still well below the 35% rate in place before the 2017 corporate tax cuts).  The other major plank of the proposal was the shoring up of Medicare by increasing the Medicare Tax on individuals making more than $400k/year from 3.8% to 5%.  The White House claims this would ensure Medicare solvency through 2050.  While there were many other provisions, the most notable was a 3.2% increase in Defense spending and an $800 million increase in border security funding (both Republican favorites).  This budget proposal was simply a political move, pushing the things Biden ran on (and will likely run on again in 2024) while daring the GOP to put forth their own actual counter-proposal.  However, the GOP is restricted by Senate Majority Leader McConnel’s stated desire to increase defense spending, the GOP having jeered the idea of cutting Social Security or Medicare at the State of the Union speech, and there not being nearly enough other spending to cut in order to actually achieve the GOP’s claim that it will pass a balanced budget and reduce the deficit without raising taxes.  However, despite challenges on the GOP side, in truth, President Biden’s proposal was dead on arrival in the GOP-led House as proposed. So, the actual budget is very unlikely to look like what either side wants, particularly if the deficit is going to be addressed.

SNAP Case Study | Actual Trade

In stock news, Reuters reported mid-day that CHRW is in “advanced talks” to name former UPS COO Barber as its new CEO.  Elsewhere, bank stocks were crushed on Thursday after the Wednesday night decision by SIVB to do a multi-billion-dollar equity offering and also to sell tens of billions of dollars worth of securities at a loss in order to shore up its balance sheet.  (SIVB lost over 60% on the day while, in sympathy, USB lost 7.01%, BAC lost 6.2% WFC lost 6.18%, JPM lost 5.41%, and C lost 4.1%.) In other news, under pressure from GOP Attorneys General, MA, V, and AXP announced a decision to “pause” a plan to implement unique transaction codes for guns and ammunition in the way that other product category sales are differentiated.  Meanwhile, BYDDY followed in the footsteps of TSLA by offering new discounts on certain models purchased by the end of March.  At the same time, GM announced Thursday that it has offered buyouts to most salaried employees and expects to take a pre-tax charge of up to $1.5 billion to cover the costs.  In better news, CAT announced that it is seeing strong construction equipment demand in North America.  As a result, CAT CFO Bonfield said Thursday that he believes the US will avoid a recession.  After the close, the AAL pilot’s union said it has set a strike authorization vote for April.  Also after the close, Reuters reported that DIS CEO Iger said the mouse house will consider making content for other companies (platforms), similar to the HBO model.

In stock legal and regulatory news, the FTC announced it is exploring a probe of META and GOOGL (among a total of 8 social media firms) for deceptive advertising on their platforms.  (The final vote on whether to go ahead with the investigation will happen next week.)  As reported yesterday, CS has delayed the release of its annual report.  We now know the late-night call from the SEC was about previous “revisions” CS had made to its consolidated cashflow reports for 2019 and 2020.  Elsewhere, FINRA has fined broker Webull $3 million for failing to exercise due diligence before approving its customers to trade options as well as poor response to customer complaints.  After hours, the FTC announced it had unanimously voted to take action to block ICE from acquiring mortgage data vendor BKI (in a deal for $13.1 billion).  Meanwhile, US Senator Rubio has introduced legislation aimed at blocking the F deal with Chinese battery company CATL.  (The bill would void tax credits for EVs using batteries from that plant.  This bill is a layup for Rubio because the plant is not in his state, it targets a Chinese firm, and “green projects” are not something his party’s base supports.)  Finally, the SEC is set to vote on March 15 on 3 new rules that will dictate how brokers, clearing houses, and other financial companies handle the risk of hacking, respond to customer data theft, and disclose cybersecurity events to them and the public.  In a perhaps-related story, BLKB was fined $3 million by the SEC Thursday after the close for misleading disclosures related to a 2020 ransomware attack the company suffered.

After the close, ULTA and DOCU reported beats on both the revenue and earnings lines.  Meanwhile, TKC and ORCL both missed on revenue while beating on earnings.  On the other side, MTN beat on revenue while missing on earnings.  Unfortunately, HVRRY, GPS, and QFIN missed on both the top and bottom lines.  It is worth noting that ORCL, ULTA, and DOCU all raised their forward guidance.  However, GPS and MTN both lowered forward guidance.

Overnight, Asian markets were deeply red across the board.  Hong Kong (-3.04%), Australia (-2.28%), and Japan (-1.67%) led the way, but the “best” showing in the region was New Zealand (-0.84%).  Meanwhile, at midday, Europe is following Asia lower with red across all exchanges.  The FTSE (-1.68%), DAX (-1.20%), and CAC (-1.10%) lead the way on volume as usual but the entire region is well into red territory with the best early afternoon performance coming from Norway (-0.40%).  As of 7:30 am, US Futures are pointing toward a mixed start to the day not far on either side of the flat line.  The DIA implies a -0.22% open, the SPY is implying a -0.10% open, and the QQQ implies a +0.08% open at this hour.  At the same time, 10-year bond yields plummeted to 3.825% and Oil (WTI) is down more than a percent to $74.95/barrel in early trading.

The major economic news events scheduled for Friday include February Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Participation Rate, and Feb. Unemployment Rate (all at 8:30 am), and Feb. Federal Budget Balance (2 pm).  The major earnings reports scheduled for the day include ERJ before the opening bell.  There are no reports scheduled for after the close.      

So far this morning, JKS and BKE have reported beats on both the revenue and earnings lines.  Meanwhile, KT missed on both the top and bottom lines.  (ERJ has not reported yet.)

In late-breaking news, SIVB is scrambling to avoid a “run on the bank” after many funds advised clients to pull their cash out of that bank. It looks like, after yesterday’s 60% drop, SIVB is poised to gap down another 45% this morning. Meanwhile, crypto got crushed Thursday following the collapse of SI. It looks like there is more follow-through on that move again this morning. Elsewhere, US-China economic tensions continue to increase as more countries got on board with President Biden’s export-to-China restrictions Thursday. For their side, all week Chinese officials have called out US policies as showing the US is nakedly trying to “hem in” China rather than compete economically. However, regardless of all other news, the US market tune is going to be called by February Payrolls data at 8:30 am. After last month’s massive and unexpected jobs creation and historic drop in unemployment, the market greatly fears another strong number will push the Fed into an unexpectedly large rate increase the week after next.

With that background, it looks like the market is recovering from a push lower overnight. As of this moment, all three major indices seem to be roughly flat and waiting for the Payroll data. The short-term trend remains bearish as the DIA and SPY will try to climb back above the 200sma that was given up yesterday and the QQQ retested the convergence of 50sma and 200sma overnight (which happens to coincide with the most recent QQQ swing low). Extention is starting to get a little large in terms of the T-line (8ema). However, the T2122 indicator shows the market deep into the oversold (reversal) territory. As I see it, SPY has some support right where it closed Thursday, but DIA still has a good way to fall before it finds a support level as of now. The QQQ has potential support at the most recent swing-low of 288.50-ish. Expect volatility today, particularly after 8:30 and then shortly after the open.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the man in the green bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is absolutely no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby. It’s a job. The money is real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened flat on Wednesday and then proceeded to undulate sideways the rest of the day.  This left the large-cap indices just on either side of where they closed on Tuesday and the QQQ managed a small gain by rallying the last 30 minutes of the day.  This action gave us indecisive, Spinning Top candles in all three major indices.  The QQQ managed to cross back above its T-line (8ema).  Meanwhile, the SPY is retesting its 50sma.  All of this happened on just below-average volume.

On the day, six of the 10 sectors were in the green as Utilities (+0.80%) led the way higher and Energy (-0.58%) lagged behind the other sectors.  At the same time, the SPY was up 0.16%, the DIA was down 0.12%, and QQQ was up 0.50%.  The VXX fell 1.64% to 43.05 and T2122 rose but remains in the oversold territory at 14.29.  10-year bond yields climbed to 3.989% and Oil (WTI) dropped 1.38% to $76.51 per barrel.  So, Wednesday was an indecisive or “wait and see” day where the market might be waiting on the February Payrolls data.

In economic news, the February ADP Nonfarm Employment Change saw a greater than expected increase at +242k jobs (compared to a forecast of +200k and the Jan. reading of +119k).  Later the January Exports came in up to $257.50 billion (up from $249.00 billion) while the January Imports were also up at $325.80 billion (up from $316.20 billion).  As a result, the January Trade Balance came in very slightly better than expected at a deficit of $68.30 billion (versus a forecast of a $68.90 billion deficit but also worse than the December reading of $67.20 billion deficit).  A little later in the morning, the January JOLTS (Job Openings) came in higher than expected at 10.824 million (compared to the forecast of 10.500 million but down from the December value of 11.234 million openings).  Then the EIA Weekly Crude Oil Inventories showed a drawdown of 1.694 million barrels (versus a forecast inventory build of 0.395 million barrels and much lower than the prior week’s 1.165-million-barrel build).  On the Fed front, Chairman Powell testified again and was questioned (mostly political theatre for many Congressmen) for hours.  Basically, he said nothing new.  He reiterated if (and emphasized only if the totality of) data warrants it, the Fed might increase the pace of rate hikes.  Again, the basic idea is that inflation is not falling as fast as the Fed would like.  So, the terminal rate likely will be higher than the old 5.1% estimate, but he did not say how much higher.  He also said many times that no decision has even been made even on the size of the rate hike to be announced on March 22.

SNAP Case Study | Actual Trade

In stock news, on Wednesday, PYPL instructed its real estate agents to sell its main office (headquarters) in Ireland according to the Irish Times.  The company responded saying the move is a result of the remote work nature of the last three years. However, PYPL did lay off 2,000 Irish employees at the end of January.  Later, Reuters reported that JPM is cutting ties with the Gemini cryptocurrency exchange.  In other news, Reuters also reported that Japan Airlines has decided (but has not announced yet) that it will buy 20 of the 737 Max jets from BA.  Elsewhere, CSX was the latest railroad to suffer an accident as one of their trains derailed in West Virginia, spilling diesel fuel into the New River. After the close, Reuters reported that UBER is exploring whether to sell its logistics unit (Uber Freight) or spin off and IPO the unit.  (The unit was started when UBER acquired logistics firm Transplace in 2017.)  In other news, Bloomberg reports that AAPL has reshuffled the management of its international businesses in order to put a bigger focus on India.  Also after hours, SI announced it is winding down operations and will voluntarily liquidate.  The stock plummeted in post-market trading.

In stock legal and regulatory news, the NHTSA opened a “special investigation” into a February fatal crash in CA involving a TSLA Model S where the so-called auto-pilot feature was suspected of being used.  Meanwhile, the CEO of LUV told reporters that the airline is not counting on being able to deploy BA MAX 7 planes in 2023 as the plane still has not completed the FAA certification process.  He went on to say LUV expects some of the BA-promised plane deliveries for 2023 will now slip into 2024 and regardless of the delivery date, it then takes six months from delivery until the plane is in use.  Across the pond, MSFT told the UK it will license the “Call of Duty” video game franchise to SONY for 10 years as part of the company’s efforts to get UK approval for the purchase of ATVI.  (The UK ruling is due in April.)  After hours, the US International Trade Commission banned the import of video-streaming fitness devices made by PTON after a judge found those devices infringed on patents held by DISH.  The Administration has 60 days to review the decision before it takes effect.  However, Presidents rarely reverse such rulings.

In energy news, the Wall Street Journal reported that new intelligence suggests that the Nord Stream gas pipelines were attacked by a pro-Ukrainian group made up of Ukrainian and Russian individuals.  As mentioned above, the EIA reported Wednesday that US oil inventories fell for the first time since December last week (10 straight weeks of build broken last week).  The report also said refineries operated at 86% of capacity (about 4% below the long-term average for this time of year).  Gasoline inventories fell by 1.134 million barrels after refineries cut gasoline production.  However, distillate (diesel and heating oil) inventories rose 0.138 million barrels compared to an expected drawdown of 1.038 million barrels.

Overnight, Asian markets were mostly in the red.  Japan (+0.63%) was the lone appreciable gainer in the region.  However, India (-0.93%), Hong Kong (-0.63%), and South Korea (-0.53%) led the vast majority of the region lower.  Meanwhile, in Europe, with the exceptions of Greece (+1.10%) and Denmark (+0.37%) the entire region is in the red.  The FTSE (-0.55%), DAX (-0.37%), and CAC (-0.31%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.08% open, the SPY is implying a -0.28% open, and the QQQ implies a -0.55% open at this hour.  At the same time, 10-year bond yields are rising again to 3.997%, and Oil (WTI) is up fractionally to $76.75/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims (8:30 am).  Major earnings reports scheduled for the day include BJ, GCO, GBTG, JD, WLY, and TTC before the opening bell. Then after the close, QFIN, DOCU, GPS, ORCL, ULTA, and MTN report.    

In economic news later this week, on Friday, we get Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Participation Rate, Feb. Unemployment Rate, and Feb. Federal Budget Balance.  In earnings Friday, we hear from, ERJ.

So far this morning, BJ and SKHSY reported beats on both the revenue and earnings lines.  Meanwhile, JD and GCO missed on revenue while beating on the earnings line.  Unfortunately, HVRRY missed on both the top and bottom lines.  It is worth noting that BJ raised its forward guidance while GCO lowered its forward guidance.

In late-breaking news, other than SI deciding to liquidate, the big news of the day will be the release of President Biden’s budget proposal.  It is expected to contain a 25% minimum billionaire tax and a major increase in capital gains tax in order to achieve $3 trillion in deficit reduction over 10 years as well as bolstering Medicare and Medicaid to keep those programs solvent through 2050.  Elsewhere, CS is delaying the release of its annual report “after receiving a call from the SEC late Wednesday night.”  Details of the call were not released other than CS saying its management will need time to understand the SEC comments.  Meanwhile, executives from NSF will face a grilling from the Senate this morning (10 am) over the railroad’s safety problems that led to a spate of recent derailings and specifically the East Palestine OH crash that caused a major chemical spill.

With that background, it looks like the market is just on the bearish side of undecided at least until the Weekly Jobless Claims are released. Meanwhile, the downtrend remains in place as well as all three major indices being below their T-line (8ema). SPY also continues its test of its 50sma. Extention is not a problem from the T-line, but the T2122 indicator remains in the oversold territory. As I see it, both SPY and DIA are still in a potential support area. QQQ may have marginal support here, but it is far less obvious than in the large-cap indices. All three have potentially stronger support levels a little ways below. Of course, all three also have resistance to work through overhead if the bulls plan to make a run.

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