Chop Continues, May Payroll Data On Deck

Stocks opened more-or-less flat on Thursday.  For the first hour we saw an uneven, whippy selloff.  At that point be bounced up off of the T-line (8ema) and then the bulls stepped in to steadily rally the market the rest of the day, ending on the highs.  This left us with a Large Bullish Engulf in the SPY and QQQ as well as a strong white candle in the DIA.  Just the opposite of Wednesday, today nine sectors were green with only Energy in the red.  However, it is worth noting that the VXX fell 2.5% to 21.70 while the T2122 surged back up deep into the overbought territory at 94.96.  So, over-extension (especially in the tech names like AMD, FB, NVDA, TSLA, and NFLX) is worth keeping an eye on.  Elsewhere, 10-year bond yields were flat at 2.913% and Oil (WTI) climbed almost 2% (after being down hard earlier in the day) to $117.32/barrel.  All-in-all, the choppy consolidation we’ve seen all week continues.

During the day Thursday, ADP Private Payrolls came in far below forecast (+128k vs. +300k est.).  Then both Weekly Jobless claims and Q1 Productivity came in lower than expected and Q1 Unit Labor Cost came in a full percent higher than estimate (+12.6% vs. +11.6% forecast).  Later in the morning, April Factory Orders came in well below forecast as well.  This may be indicating that the economy is slowing and getting more expensive for companies as the Fed sees months of rate hikes ahead.  Fed Vice-Chair Brainard also told CNBC that “it’s very hard to see the cause (for any rate hike) pause.”  This comes after some of the more dovish members had suggested a fall pause to see if they had raised rated enough.

After the close, LULU, RH, and CRWD all reported beats on both the revenue and earnings lines.  Meanwhile, COO beat on revenue while missing on earnings. However, JOAN missed on both lines. 

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In unhappy business news, TSLA CEO Musk says that he has “a super bad feeling about the economy” and says he wants to cut 10% of the TSLA workforce. As a result, TSLA has stopped new hiring for the time being. At the same time, F announced a new $3.7 billion investment in midwestern plants to increase production of electric F-150 as well as the Mustang vehicles. This will result in increased hiring, nominally in the same industry. Elsewhere, and for the second day in a row, a top JPM executive warned investors that they see the economy facing an “unprecedented number of economic shocks” (and as a result, company profits will suffer and stocks will fall).  Yesterday, JPM CEO Dimon referred to that issue as “an economic hurricane” being highly possible.  Finally, Japan’s largest steelmaker (Nippon Steel) has decided to postpone the firing of its large furnace, originally scheduled for this month. The furnace had been closed for upgrades, but the company has decided not to restart the furnace now due to decreased demand from Japanese Automakers, which are the largest buyer of Nippon steel.

On the Russia story, OPEC+ agreed to increase oil production by 648,000 barrels per day in July and August.  Recently, they had been adding 432,000 barrels/day each month.  So, the net increase was 216,000 barrels per day.  However, the group agreed to keep Russia as an active member. Elsewhere, US General Nakasone confirmed that US military hackers have conducted defensive, informational, and offensive cyber operations in support of Ukraine.  This was the first acknowledgment of US offensive hacking activity and the announcement is seen as a warning to Russia against any cyber-attacks on the US.  Finally, Russia has placed limits on its export of noble gasses (which are key ingredients in the production of semiconductor chips) until the end of 2022.

In miscellaneous news, Bloomberg reports that a survey of Americans who earn at least $250,000/year found that one-third of them report living paycheck-to-paycheck.  (I don’t know about you, but that sounds like a consumption problem to me.)  It was also announced that the Biden Administration will cancel the student debt of about 560,000 students of various Corinthian Colleges (around 100 campuses exited).  The for-profit companies were accused of predatory and unlawful practices and face many lawsuits from the Consumer Financial Protection Bureau.  The company filed for Bankruptcy in 2015 rather than face those lawsuits.

Overnight, Asian markets were mixed but leaned to the green side.  Hong Kong (-1.00%), Malaysia (-0.78%), Thailand (-0.74%) and Taiwan (-0.73%) paced the losses.  Meanwhile, Japan (+1.27%), Australia (+0.88%), and Shenzhen (+0.67%) led the more numerous gainers.  In Europe, stocks are mixed at mid-day.  The FTSE (-0.98%), DAX (+0.29%), and CAC (-0.02%) are typical of the continent with Russia (-1.54%) being an outlier in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.45% open, the SPY is implying a -0.68% open, and the QQQ implies a -1.06% open ahead of data.  10-year bond yields are up slightly to 2.924% and Oil (WTI) is off three-quarters of a percent to $115.96/barrel in early trading.

The major economic news scheduled for release Friday we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Participation Rate, and May Unemployment Rate (all at 8:30 am), May Services PMI (9:45 am), and May ISM Non-Mfg. PMI (10 am).  We also have a Fed speaker scheduled (Brainard at 10:30 am).  The major earnings reports scheduled for release include DOOO before the open. There are no reports scheduled for after the close.

So far this morning DOOO reported a miss on the revenue line while beating on the earnings line.

LTA Scanning Software

The chop continues as markets seem to want to open inside the recent up/down range and on a down leg. However, this is all before the Payroll data that all eyes will be watching later this morning. Until that pattern is definitely broken, we have to work with what the chart shows us. And that would be sideways chopping action with intraday volatility. Looked at from a longer-term perspective, this is just consolidation. However, for a Swing Trader, this chop can cut you to pieces. So, be careful. The Payroll data may give the market some direction, but at this moment market indecision is the rule.

Technically speaking, a new uptrend has not yet begun, even if the longer-term downtrend has been broken. We may just be working off some over-extension here with choppy consolidation. However, increasing T2122 levels is not the way we work off over-extension. Finally, with the weekend ahead, this might be a good day to sit on your hands or take off early, unless the Payroll data gives us a clear and sustainable direction. The bottom line is that the market still has to decide whether we’ll see a soft or hard landing of the economy following Fed hikes. Until we know, all I can do is follow the trend (which is flat on the week and down in the longer term) and acknowledge that we are still overbought.

Be very careful chasing any gaps/moves early. Whipsaw is very real during times when we are thinking about changing trends and as we saw yesterday, gap-chasers get hurt. Remember that the first rule of making big money in the market is to not lose big money in the market. Trading is our job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily in Trading…not by striking it rich on one or two trades.

Ed

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Asia Red, Europe Green, US Waiting For Data

Stocks gapped higher about half a percent Wednesday.  However, this was met with an immediate strong selloff that lasted until 1 pm, giving back 2%-3% in the process.  At that point, the bulls stepped back in tepidly to lead a slow afternoon rally that took us right back where Tuesday had closed.  However, the bears weren’t done either and we sold off again the last 10 minutes of the day.  Nine of the 10 sectors were down on the day with only Energy showing green.  All-in-all, this left us with indecisive, larger black-bodied Spinning Top type candles in all 3 major indices.  On the day, SPY lost 0.80%, DIA lost 0.56%, and QQQ lost 0.77%.  Oddly, VXX lost 1.33% to 22.26 while T2122 also fell to 84.21 (still inside the overbought territory).  10-year bond yields surged to 2.915% and Oil (WTI) fell slightly to $114.67/barrel.  Overall, it was just another day of whipsaw indecision after last week’s rally.

During the day Wednesday, May Manufacturing PMI came in slightly lower than forecast, but May ISM Mfg. PMI came in above estimates (and last month).  April JOLTYs came in exactly as expected at 11.4 million current openings (a decline from the prior month).  In a little more depth, back before the pandemic businesses tended to lay off an average of 2 million people each month.  In May, 1.2 million people were laid off while 4.4 million voluntarily quit.  This left us with 11.4 million openings in a still red-hot job market.  So, companies will continue to see pressure on wages and other benefits in order to hire and keep their best employees.

After the close, CHWY, PVH, NTAP, PSTG, and VEEV all reported beats on both the revenue and earnings lines.  Meanwhile, GME beat on revenue while missing on earnings.  However, HPE missed on both lines. 

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In business news, FB number 2 (COO) Sheryl Sandberg (who had been seen as the business mind in the room versus Zuckerberg’s creative/technical skills) announced she is leaving the company (FB, soon to be META) in the fall.  Meanwhile, at TSLA CEO Musk sent emails to office staff demanding that they return to the office full-time or get out.  Specifically, Musk demanded that office employees spend an absolute minimum of 40 hours per week in the main office (not a branch) or the company will assume they have resigned.

On the Russia story, pro-Putin Hungary continues to negotiate against other EU members in a bid to make life harder for Russian opponents.  This time, they are demanding the EU lift sanctions on a Putin-loyalist religious figure in exchange for allowing the previously-agreed sixth round of sanctions (which include a partial ban on Russian oil by year-end) to be enacted.  This round of sanctions would include a ban on insurance companies covering tankers carrying Russian Oil.  While this would hurt Russian oil sales normally, Chinese and India-bound tankers would likely be insured by sovereign sources.  China also reaffirmed its close and growing relationship with Russia.  President Biden announced he will visit Saudi Arabia later this month and in likely-related news, the Saudis have said they are considering increasing oil production to offset the decrease in Russian output.  Finally, OPEC+ began its 3-day meeting in Vienna.  On the docket is whether or not to temporarily exclude Russia from the group.

In miscellaneous news, Bloomberg reports that a survey of Americans who earn at least $250,000/year found that one-third of them report living paycheck-to-paycheck.  (I don’t know about you, but that sounds like a consumption problem to me.)  It was also announced that the Biden Administration will cancel the student debt of about 560,000 students of various Corinthian Colleges (around 100 campuses exited).  The for-profit companies were accused of predatory and unlawful practices and face many lawsuits from the Consumer Financial Protection Bureau.  The company filed for Bankruptcy in 2015 rather than face those lawsuits.

Overnight, Asian markets were mostly in the red.  Hong Kong (-1.00%), South Korea (-1.00%), and Taiwan (-0.73%) paced the losses.  Meanwhile, only Shenzhen (+0.67%), India (+0.64%), and Shanghai (+0.42%) managed gains in that region.  In Europe, stocks are mixed but leaning to the green side at mid-day.  The FTSE (-0.98%), DAX (+0.73%), and CAC (+1.10%) lead the way as always.  Russia (-1.09%) is the biggest loser at least in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green open to the trading day.  The DIA implies a +0.41% open, the SPY is implying a +0.48% open, and the QQQ implies a +0.60% open at this hour.  10-year bond yields are backing down a bit to 2.909% and Oil (WTI) is off 2.7% to $112.18/barrel in early morning trading.

The major economic news scheduled for release Thursday includes ADP Nonfarm Payrolls (8:15 am), Weekly Initial Jobless Claims, Q1 Nonfarm Productivity, and Q1 Unit Labor Costs (all at 8:30 am), April Factory Orders (10 am), and Crude Oil Inventories (11 am).  We also have another Fed speaker (Mester at 1 pm).  The major earnings reports scheduled for release include CIEN, DBI, HRL, SPTN, and TTC before the open.  Then after the close, COO, CRWD, JOAN, LULU, and RH report.

So far this morning HRL and DBI have reported beats on both lines.  Meanwhile, SPTN missed on the revenue line while beating on earnings.  However, CIEN has reported a miss on both the revenue and earnings lines. TTC reports at 8:30 am.

In economic news later this week, on Friday we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Participation Rate, May Unemployment Rate, May Services PMI, and May ISM Non-Mfg. PMI. On the earnings front, we get a report from DOOO on Friday.

LTA Scanning Software

Markets are looking to make a modest gap higher this morning, but remain well inside the body of the black candles from Wednesday. In short, indecision remains the rule as traders may be waiting on Payrolls data Friday before picking a direction. Technically speaking, a new uptrend has not yet begun, even if the longer-term downtrend has been broken. We may just be working off some over-extension here with choppy consolidation. So, this might not be the week to get aggressive. The market still has to decide whether we’ll see a soft or hard landing going into year-end as well as early 2023. All I can do is follow the trend (which is up in the very short-term and down in the mid and longer-term) and acknowledge that we are still overbought.

Be very careful chasing any gaps/moves early. Whipsaw is very real during times when we are thinking about changing trend and as we saw yesterday, gap-chasers get hurt. Remember that the first rule of making big money in the market is to not lose big money in the market. Trading is our job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily in Trading…not by striking it rich on one or two trades.

Ed

Swing Trade Ideas for your consideration and watchlist: PDD, CTLT, PTC, ENPH, CHNG, IBM, LLY, DXC, APD, SNPS, FANG, EOG. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

June Opens With PMIs, JOLTs, and Beige Book

Markets gapped down about half of a percent Tuesday, but then climbed the lightning bolt back to fill the gap mid-afternoon.  However, at about 2:30 pm stocks started selling off hard, perhaps on profit-taking as we wrapped up May.  Regardless, that hard selloff gave back 4.5 hours of bull work in 30 minutes as major indices fell back through the entire gap to get back where they started the day.  This action gave us indecisive, large-wick Spinning Top candles as stocks remained deep in the overbought territory of T2122.  Oddly enough, after a rollercoaster ride, today’s action also leaves us with indecisive, large-wick Doji candles for the month as well across all 3 major indices.  On the day, SPY lost 0.56%, DIA lost 0.56%, and QQQ lost 0.27%.  The VXX was flat at 22.56 and T2122 fell a bit while remaining overbought at 88.46.  10-year bond yields surged up to 2.848% and Oil (WTI) was flat (after being up over 3% during premarket) at $115.20/barrel.

During the day, Chicago PMI came is stronger than expected.  In addition, Conference Board Consumer Confidence also came in above estimates.  (Although it was lower than the April number.)  In addition, President Biden met with Fed Chair Powell and Treasury Sec. Yellen to discuss inflation.  The President told reporters he is going to give the Fed leeway to do their job without interfering and that all 3 agree taming inflation is the number one priority.

After the close, HPQ, CRM, and VSCO all reported beats on both the revenue and earnings lines.  CRM stock was up 8% in post-market trading as it raised its profit guidance for the remainder of the year.  In other stock news, it was reported that FB will be changing to the symbol META prior to the open on June 9.  (Interestingly, FB is buying the symbol from an ETF that is currently using that ticker.)

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The Fed will start Quantitative Tightening (QT) today.  They are starting with an $8.9 trillion portfolio of bonds and security-back mortgages.  The plan is that they sell off $47.5 billion in each of June, July, and August.  After that, the process accelerates to $95 billion per month of sales with a goal of getting down to a $7.5 trillion portfolio by the end of 2023.  The Fed estimates by then, the $1.5 trillion of tightening will be the equivalent of another 0.75% to 1% of rate hikes.

Mortgage demand fell again this week.  That demand has now reached the lowest level since 2018.  On the week, home purchase loan applications fell 1% (14% lower than one year ago).  This came despite rates falling slightly from 5.46% to 5.33% and origination points dropping from 0.60 to 0.51 on average.  The falling demand may well be a sign of consumer fear of economic growth.

On the Russia story, after heavy lobbying by the US and EU, OPEC+ is openly considering whether to suspend Russia from the group.  Elsewhere, President Biden said that the US will provide Ukraine with longer-range MLRS rocket systems.  (The Administration had been hesitant to do so because those longer-range rockets have the ability to strike up to 300km into Russia.)  Predictably, Russia said that the supplying of long-range weapons increases the chance of war between the US and Russia.  Germany also announced it will be supplying Ukraine with its IRIS-T air defense system.

Overnight, Asian markets were mixed, but leaned to the red side.  Malaysia (-1.06%), Taiwan (-0.79%), and Hong Kong (+0.56%) paced the losses.  Meanwhile, Japan (+0.65%), South Korea (+0.61%), and New Zealand (+0.57%) led the gains. In Europe, stocks are also mixed and leaning red at mid-day.  The FTSE (-0.39%), DAX (+0.19%), and CAC (unchanged) lead as always with Russia (+1.22%) posting the biggest gain and Norway (-1.25%) showing the biggest loss in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a flat to slightly green start to the day.  The DIA implies a +0.41% open, the SPY is implying a +0.18% open, and the QQQ implies a dead flat open at this hour.  10-year bond yields are surging again to 2.877% and Oil (WTI) is up 1.2% to $116.04 in early trading.

The major economic news scheduled for release Wednesday includes May ADP Nonfarm Payroll Change (8:15 am), Mfg. PMI (9:45 am), ISM Mfg. PMI and April JOLTs (both at 10 am), and Fed Beige Book (2 pm).  There are also 2 Fed speeches scheduled (Williams at 11:30 am and Bullard at 1 pm).  The major earnings reports scheduled for release include CPRI, DCI, HEPS, and WB before the open.  Then after the close, CHWY GME, HPE, NTAP, PSTG, PVH, and VEEV report.

So far this morning CPRI and WB have reported beats on both lines.  However, DCI beat on the revenue line while missing on earnings.

In economic news later this week, on Thursday we get Weekly Initial Jobless Claims, Q1 Nonfarm Productivity, Q1 Unit Labor Costs, April Factory Orders, Crude Oil Inventories, and another Fed speaker.  Then on Friday, we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Participation Rate, May Unemployment Rate, May Services PMI, and May ISM Non-Mfg. PMI.

On the earnings front for later this week, on Thursday we hear from CAE, CIEN, DBI, HRL, SPTN, TTC, COO CRWD, JOAN, LULU, and RH.  Finally, on Friday we get a report from DOOO.

LTA Scanning Software

As we enter June, Mr. Market is not sure whether we’ve just been in a relief rally for the last week or if the bottom is now in and we simply needed a rest day to end May.  In either case, we have not seen a higher low in any of the 3 major indices. So, technically speaking, a new uptrend has not begun, even if the longer-term downtrend has been broken. With a lot of important news on the docket, this might not be the week to get aggressive. The market still has to decide whether we’ll see a soft or hard landing going into year-end as well as early 2023. If anyone knows exactly how that will shake out, they are wiser than I am. All I can do is follow the trend (which is up in the very short-term and down in the mid and longer-term) and acknowledge that we are still overbought.

Be very careful chasing any moves early. Whipsaw is very real during times when we are thinking about changing trend. Remember that the first rule of making big money in the market is to not lose big money in the market. Trading is our job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily in Trading…not by striking it rich on one or two trades.

Ed

Swing Trade Ideas for your consideration and watchlist: DTE, HDSN, UNG, PBR, CVS, UPS, SOFI, BITO, PYPL, SAVA, LAC, SO. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

May Monthly Candle Still Unclear

Before the open Friday, the Fed’s favorite inflation measure (PCE Index) came in on estimate, down from the previous month’s +5.2%, but still at +4.9%.  This might indicate that inflation has peaked.  This news helped the bulls to gap the QQQ and SPY higher.  In turn, we then saw a strong rally the first hour that slowed over the second hour and ended in a sideways grind in a tight range most of the afternoon before rallying again into the close. However, this rally all happened on below-average volume as it appears traders decided to take off early for the holiday weekend.  On the day, SPY gained 2.45%, DIA gained 1.72%, and QQQ gained 3.26%.  This also ended a 7-week losing streak in all 3 major indices.  The VXX fell 3.44% to 22.46 and T2122 climbed even higher into the overbought territory at 96.56.  10-year bond yields remain flat at 2.743% and Oil (WTI) climbed another nine-tenths of a percent to $115.07/barrel going into the holiday weekend.

The Technology and Consumer Cyclical sectors led the way Friday with TSLA, AAPL, NVDA, AMD, GOOG, AVGO, ADBE, SQ, and DELL leading the way.  However, the Meme stocks were back in vogue as GMA gained more than 43%, AMC gained almost 20%, KOSS gained almost 17%, and BB gained 11.55% on the day.

In electric vehicle news, F delivered its first electric F-150 pickup on Friday according to Bloomberg.  This comes as F increased production plans for the vehicle to 150,000 trucks by mid-2023 and announced that is has more than 200,000 vehicle purchase reservations with deposits.  F stock was up 9.04% on the day Friday. Meanwhile, TSLA has pushed back delivery of its own “Cybertruck” until the end of 2022 or early 2023.  TSLA stock was up 7.33% on Friday.  Never one to let a news cycle go without making a headline, TSLA CEO Musk tweeted that Bill Gates has as much as a $2 billion short position in TSLA.  Meanwhile, electric van maker ELMS warned that it will run out of cash in June (at least one month earlier than previously projected).

SNAP Case Study | Actual Trade

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On the Russia story, on Friday Russia wired a $100 million interest payment to its own domestic settlement house.  However, that is not the same thing as paying the foreign investors in their US accounts.  So, technically, Russia is in default on its bond debt.  Those Russian bonds are now trading at 15-20 cents on the dollar of face value.  On Saturday Putin test-fired a “hypersonic” missile 1,000 km across the Barents Sea (in the Norway and Finland neighborhood) as an apparent signal that he is not happy about Sweden and Finland joining NATO.  S&P also cut the Ukrainian credit rating, citing “a more protracted war.”  On Sunday, pro-Russian Serbia agreed to a 3-year deal with Russia for the supply of natural gas and Pro-Putin Hungary got its way as an exemption for pipeline oil was added to the EU’s Russian oil ban proposal.  Finally, on Monday EU leaders agreed on a partial ban of Russian oil imports.  The ban excludes pipeline oil at the insistence of pro-Putin Hungary and means the ban only impacts two-thirds of Europe’s oil imports from Russia.  Still, it is another sanction on the Russian economy.

In response to a user request, here is some news/ideas for longer-term investments.

JPM sent out a note to clients saying that they are expecting up to $250 billion to flow into stocks during June.  This number is their estimate of “rebalancing inflows” where they expect mutual funds, pension funds, and sovereign wealth funds to sell bonds and buy stocks at the new lower prices (better P/E ratios).  These groups have a total of $7.5 trillion under management and the $250 billion would be the rebalancing into stocks required to get back to the overall 60/40 portfolio weight that the group seeks to achieve.  The note went on to say they expect the recently hit tech sector to do well from this reshuffle as the selloff has many tickers selling at a relatively attractive P/E Ratio.  INTC, AAPL, GOOGL, FB, AMAT, and MU are some of the more attractive P/E stocks among the QQQ 100.  This might be of interest for longer-term holdings.

Also for longer-term holdings, MarketWatch put out a list of high dividend-paying stocks that are expected to increase their dividends the most over the next two years.  These are not necessarily the 15 highest dividend payers of the S&P500, but they are the top in terms of current dividend yield and financials pointing to potentially raised yields in the future. These include: EOG, PPL, MTB, RF, OMC, BKR, AMGN, PFG, CFG, WELL, VTRS, VTR, HBAN, MO, C.  (Note that many of these stocks are in the banking and oil industries, which do well in rate increase, oil shortage, and inflationary times.)

Overnight, Asian markets were mixed but lean to the green side.  Shenzhen (+1.92%), Malaysia (+1.75%), and New Zealand (+1.46%) led the winners. Meanwhile, Australia (-1.03%), India (-0.46%), and Japan (-0.33%) paced the losses.  In Europe, at mid-day stocks are mixed but lean to the red side.  The FTSE (+0.34%), DAX (-0.63%), and CAC (-0.70%) lead as usual.  However, there are a number of mixed moves more than one percent by the smaller exchanges as Europe comes to grips with the partial ban on Russian oil (and expected Russian retaliation on natural gas availability).  As of 7:30 am, US Futures are pointing toward modestly lower open.  The DIA implies a -0.50% open, the SPY is implying a -0.45% open, and the QQQ implies a flat -0.04% open at this hour.  10-year bond yields have moved back up to 2.81% and Oil (WTI) is up more than 3% to $118.57 on the news out of Europe.

The major economic news scheduled for release Tuesday is limited to Chicago PMI (9:45 am) and Conf. board Consumer Confidence (10 am). However, there is also a meeting scheduled at the White House between President Biden, Treasury Sec. Yellen, and Fed Chair Powell. This will undoubtedly lead to statements to the press. The major earnings reports scheduled for release include BEKE and LX before the open.  Then after the close, HPQ, YY, CRM, and VSCO report.

Economic news later this week includes May ADP Nonfarm Payroll Change, Mfg. PMI, ISM Mfg. PMI, Fed Beige Book, and 3 Fed speeches on Wednesday.  On Thursday we get Weekly Initial Jobless Claims, Q1 Nonfarm Productivity, Q1 Unit Labor Costs, April Factory Orders, Crude Oil Inventories, and another Fed speaker.  Finally, on Friday we get May Avg. Hourly Earnings, May Nonfarm Payrolls, May Participation Rate, May Unemployment Rate, May Services PMI, and May ISM Non-Mfg. PMI.

Earnings reports scheduled for later this week include CPRI, DCI, WB, CHWY GME, HPE, NTAP, PSTG, PVH, and VEEV on Wednesday.  Then on Thursday, we hear from CAE, CIEN, DBI, HRL, SPTN, TTC, COO CRWD, JOAN, LULU, and RH.  Finally, on Friday we get reports from DOOO.

LTA Scanning Software

As traders come back after the long weekend, another Fed Governor (Waller) said Monday that he favors continuing to do half-point rate hikes until after neutral is reached (in order to put inflation back into its place). The bulls are hoping to follow through on their strong showing last week. They are also hoping to push to make May a green monthly candle. However, the fundamental issues of inflation and the impact of rising rates remain just as they were at the end of April. So, the forward-looking market still needs to decide whether we’ll see a soft or hard landing going into year end as well as early 2023. If anyone knows exactly how that will shake out, they are wiser than I am. So, all I can do is follow the trend (which is up in the very short-term and down in the mid and longer-term) and acknowledge the extension of every move. (We are overbought at this point and should see rest/pullback regardless of whether we are currently in a relief rally or not.)

Be very careful chasing any moves early. Remember that the first rule of making big money in the market is to not lose big money in the market. Trading is our job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily in Trading…not by striking it rich on one or two trades.

Ed

Swing Trade Ideas for your consideration and watchlist: TREX, VLO, FUBO, DTE, ENPH, SOFI, T, SQ, DIS, JNJ, C, NVDA, UPST, PLUG. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 2-Hour Coaching

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

Friday to Start Very Modestly Green

Stocks gapped a bit higher on retail earnings from BABA, BIDU, DG, DLTR, WSM, and M…even after Q1 GDP came in worse than expected. However, then the bulls really got running and rallied hard the first hour, continuing at a slower pace all the way into 1 pm.  At that point, a sideways grind started near the highs in all 3 major indices that lasted more or less into the close.  Consumer Cyclicals and Technology led the way on this risk-on day with the likes of TSLA, BABA, AMZN, HD, and NIO leading them higher.  This left us with large white candles that had small upper wicks.  On the day, SPY gained 2.00%, DIA gained 1.61%, and QQQ gained 2.77%.  The VXX continued its fall to 23.26 and T2122 climbed even deeper into the overbought territory at 89.59.  10-year bond yields fell slightly to 2.742% and Oil (WTI) spiked 3.25% to $113.92/barrel.

During the day, Bloomberg reported that MSFT has told its MS-Office and Windows divisions to be more selective in hiring.  The executive conveying the message cited tightening economic conditions.  This falls in line with similar messages put forth by other tech giants like FB and NVDA.  It also fits with the SNAP company-wide email saying the company would significantly miss its own guidance in at least the coming quarter.

After the close, COST, DELL, ULTA, ADSK, and MRVL all reported beats on both the revenue and earnings lines.  Meanwhile, GPS and WDAY beat on revenue while missing on earnings.  On the other side, FTCH missed on revenue while beating on earnings.  However, AEO missed on both lines.  It is worth noting that GPS slashed its forward guidance for the remainder of the year.

SNAP Case Study | Actual Trade

Click for video

In other stock news, TWTR shareholders have sued Elon Musk claiming that he has manipulated the market, costing them a huge amount of money (TWTR is down 40% from when Musk’s stake was disclosed).  The suit alleges that Musk is complaining about bots and making other tweets in order to manipulate the stock and negotiate a better price for the deal.  Elsewhere, DAL has cut about 100 flights per day in the US in order to relieve pressure on its schedule.  The airline said this will give them more flexibility to avoid flight delays caused by weather and especially staff shortages.  BP has said it is now reviewing its investment plans in the face of the UK’s new 25% windfall profit tax on energy companies.

On the Russian invasion story, Russian leader Putin offered to allow Ukrainian grain exports from Odesa…if all sanctions against Russia are dropped.  This nonstarter was just another attempt to divide the West as the UK and other “coalition of the willing” countries prepare their navies to sail to the Black Sea to force Russian compliance. Meanwhile, Russia is making slow, but steady gains in the Donbass region as Ukraine simply does not have the artillery, mortars, and air support to stack up against concentrations of Russian forces. This comes as it is reported the US will finally send long-range rocket systems to Ukraine. (This likely will not arrive until mid to late July.) Finally, Russia is also expected to default on their debt at midnight Moscow time. The US declined to give them a renewed exception from sanctions to allow them to pay through US banks.

Overnight, Asian markets were mostly green on the day.  Hong Kong (+2.89%), Taiwan (+1.86%), and India (+1.13%) led the region higher.  In Europe, we see a similar story with only a flat Russia (-0.04%) and down Portugal (-1.13%) in the red at mid-day.  The FTSE (+0.21%) lags again, but the DAT (+0.78%) and CAC (+0.84%) are leading the region higher.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.10% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.50% open ahead of data this morning.  10-year bond yields are down to 2.725% and Oil (WTI) is off a half of a percent to $113.54/barrel in early trading.

The major economic news scheduled for release Friday includes April Trade Goods Balance, April PCE Price Index, April Retail Inventories, and April Personal Spending (all at 8:30 am), and Michigan Consumer Sentiment (10 am).  We also hear from Fed speaker Bullard (7:35 am).  The major earnings reports scheduled for release include, BIG, PDD, and SAFM before the open.  There are no earnings reports scheduled for after the close.

So far this morning PDD has reported beats on both lines.  However, BIG and HIBB have reported misses on both the revenue and earnings lines.

LTA Scanning Software

The bulls did a great job on Thursday but will have their hands full preventing a fade today with the 3-day weekend ahead of us. So, be very wary of chasing moves today. The Bulls are challenging the downtrend, but there is still a lot of resistance and technical damage that will need to be overcome in the weeks ahead if we are destined to reclaim the all-time highs from the start of the year. Flat, nimble, or hedged might be the best way to go into the long weekend news cycle with inflation, recession, and geopolitical risks all on the table.

Remember, you do not need o trade every day or every week. Sitting out the markets and times that don’t give you an edge is smart, not lazy. Remember that the first rule of making big money in the market is to not lose big money in the market. Trading is a job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: No tickers today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Futures Higher After Sleeping on Fed Min.

Markets gapped modestly lower on Wednesday and then road the roller coaster sideways the rest of the day.  A bullish lean the last 90 minutes took stocks out toward the high end of the range.  This left us with white candles with small lower wicks and larger upper wicks.  However, the SPY and DIA both managed to close above their T-lines.  On the day, SPY gained 0.90%, DIA gained 0.58%, and QQQ gained 1.40%.  The VXX fell 1.6% to 23.65 and T2122 spiked into the overbought territory at 90.79.  10-year bond yields were flat on the day at 2.756% and Oil (WTI) gained almost 1% to $110.84/barrel. 

In economic news, April Durable Goods Orders came in at half what was expected (+0.3% vs. +0.6% est.).  Crude Oil Inventories came in lower than expected (down 1.019mil barrels vs. down 737,000 barrels expected).  The non-partisan Congressional Budget Office raised its 2022 economic output (GDP) forecast to +3.1% and also said that it believes inflation has topped out and will have fallen to 2% by 2024.  This good news was unexpected.  However, it was the Fed Meeting Minutes that made the biggest splash.

The Fed minutes released in the afternoon indicated the Fed is ready to move ahead with multiple half-percent rate hikes in the coming meetings.  In fact, they said it was likely that we will see 50-basis-point moves at each of the next few meetings. The thing that was perhaps unexpected was the minutes showed they are ready to keep raising into “neutral” or even “restrictive rate” territory in order to get inflation under control.  Ominously, several of the members said they were concerned about financial stability risks (in both the bond and commodities markets) of them getting to restrictive rates, but generally agreed they would do whatever was needed.

SNAP Case Study | Actual Trade

Click for video

After the close, NVDA, WSM, ENS, MOD, SPLK, and PLUS all reported beats on both the revenue and earnings lines.  Meanwhile, UHAL, GES, and CHNG beat on revenue while missing on earnings.  However, DXC missed on both revenue and earnings lines.  It is worth noting the NVDA fell, despite beating, on light forward guidance.

In other stock news, an SEC filing on Wednesday showed that Musk has increased his personal financial commitment to the TWTR buyout deal to $33.5 billion, with the remaining $10 billion coming from outside investors.  TWTR was up on that news.  However, in perhaps unrelated news, after-hours TWTR shareholders voted to oust longtime Elon Musk associate and backer Egon Durban from his TWTR board seat.  Finally, Reuters reported that there are multiple bidders competing the acquire KSS, and the stock spiked on the news (up as much as 17% and closing up almost 12%).

In AAPL news, yesterday the company released a statement saying that it was raising compensation by 10% or more. It also released an internal video urging workers at its retail stores not to join a union. This morning Bloomberg reports that the company has asked suppliers to build 221 million iPhones, which is in line with 2021 but far below analyst expectations of 240 million units for this year.

Overnight, Asian markets were mixed on modest moves.  Singapore (+0.93%), India (+0.90%), and Shenzhen (+0.57%) led the gainers.  Meanwhile, Taiwan (-0.84%), Australia (-0.69%), and New Zealand (-0.63%) paced the losses.  In Europe, stocks are nearly green across the board (with the sole exception of Sweden (-0.96%) at mid-day.  The FTSE (+0.04%) lags while the DAX (+0.77%) and CAC (+0.74%) are more typical of the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modest gap higher at the start of the day.  The DIA implies a +0.76% open, the SPY is implying a +0.77% open, and the QQQ implies a +0.57% open at this hour.  10-year bond yields are slightly higher at 2.761% and Oil (WTI) is three-quarters of a percent higher at $111.15/barrel in early trading.

The major economic news scheduled for release Thursday is limited to Q1 GDP and Weekly Initial Jobless Claims (both at 8:30 am), and April Pending Home Sales (10 am).  The major earnings reports scheduled for release include BABA, AMWD, BIDU, BURL, CM, DG, DLTR, GCO, IQ, M, and MDT before the open.  Then after the close, AEO, ADSK, COST, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY report.

So far this morning BABA, TD, BIDU, IQ, DG, DLTR, TITN, and M have reported beats on both lines.  At the same time, BKE and GCO missed on revenue while beating on earnings.  However, MDT and BURL reported misses on both the revenue and earnings lines.

The major economic news coming Friday includes a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.

LTA Scanning Software

Back and forth we go as the chop looks to be heading toward a modest gap higher today. Regardless, the bears still have the trend and the bulls have not capitulated in a crescendo of volume yet. So, uncertainty and stubbornness remain. That means volatility and intraday whipsaw are also likely to continue. If we do break lower, keep an eye on that bear market line (about 384 in the SPY) for the S&P. The bulls have defended that line before, so a bounce there is possible. Be very careful about chasing and remain nimble or hedged. There is no need to predict reversals or fear of missing out. The market will still be here after it has given confirmation.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: BMBL, MNKD, DKNG, KRE, WFC, FITB, ZION, XLE, ZIM, FIS, BTU. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Futures Falling as Durable Goods Up Next

Markets gapped more than a percent lower at the open Tuesday after a bad earnings report by BBY and a major guidance warning by SNAP, which hurt the big tech names in sympathy.  The selloff continued for the first hour and a half of the day.  However, then the whipsaw took over as we rallied and then sold multiple times the rest of the day.  By day end we had indecisive Spinning Top candles in all 3 major indices with only the DIA managing to get back into positive territory.  On the day, SPY lost 0.76%, DIA gained 0.17%, and QQQ fell 2.13%.  The VXX ended flat at 24.03 and T2122 fell from over 70 down to 27.04, still in the mid-range, but now toward the bottom end.  10-year bond yields fell sharply to 2.754% as investors bought up those bonds in search of safety.  Meanwhile, Oil (WTI) was only fractionally lower to $109.93/barrel.

As mentioned, Thursday evening’s pre-announcement by SNAP hammered big tech on the day.  FB (-7.62%), TWTR (-5.55%), and GOOG (-5.14%) proved just too much of a drag for the rest of the QQQ to hold up.  In terms of sectors, Consumer Cyclical (-3.12%) was not far behind Technology (-3.33%).  The big consumer cyclical losers on the day were TSLA (-6.93%), AMZN (-3.21%), BABA (-5.46%), and DIS (-4.01%).

During the day Tuesday, Manufacturing PMI came in exactly in line with forecasts (but down a bit from April) while Services PMI came in slightly below forecast at 53.5. However, the big economic news was that April New Home Sales were down 16.6%.  This is clear evidence that spiking rates have killed demand while people still remember 3.3% interest rates earlier this year.

SNAP Case Study | Actual Trade

Click for video

After the close, A, INTU, JWN, CAL, and TOL all reported beats on both the revenue and earnings lines.  However, URBN reported earnings that missed on both lines. JWN also raised its full-year forecast on the strength of momentum from Q1.  In other stock news, WEN spiked over 20% after-hours as its biggest shareholder (hedge fund Trian, which owns 19.4% of the stock) announced it was looking at potential deals to acquire the company.

On the global food story, at the World Economic Forum (Davos) there were several calls for European countries to send warships into the Black Sea in order to break the Russian blockade of Odesa and protect freighters carrying Ukrainian grain. This came the same day a Russian freighter was spotted loading (stealing) grain at the occupied port of Berdyansk. Elsewhere, India is preparing to ban the export of Sugar (on top of last week’s ban on Wheat exports).  India is the second-largest sugar exporter globally.

In economic news, Economists have downgraded the forecast for Chinese growth again.  At this point, they are expecting China to expand at a 4.5% clip for the year.  This is a full percent below the official Chinese growth target.  Meanwhile, in the US, mortgage demand fell again in spite of interest rates falling slightly from 5.49% to 5.46% and origination points also being lowered (from 0.74 to 0.60).  Loan applications for refinancing a home dropped 2% for the week and were 75% lower year on year.  Applications for new home purchase loans were flat on the week, but down 16% year-over-year.

Overnight, Asian markets were mixed again on modest moves.  Shanghai (+1.19%), Taiwan (+0.88%), and Shenzhen (+0.70%) were the biggest gainers.  Meanwhile, New Zealand (-0.66%), India (-0.62%), and Singapore (-0.48%) paced the gainers.  In Europe, stocks are leaning to the upside at mid-day (also on modest moves).  The FTSE (+0.60%), DAX (+0.25%), and CAC (-0.01%) lead the way as usual, with only Norway (+1.23%) moving more than a percent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly lower start to the day. The DIA implies a -0.34% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.28% open at this hour.  However, those futures are all steadily weakening since earlier in the morning. 10-year bond yields are down slightly at 2.734% and Oil (WTI) is up another 1.4% to $111.26/barrel in early trading.

The major economic news scheduled for release Wednesday is limited to April Durable Goods Orders (8:30 am), Crude Oil Inventories (10:30 am), and the May Fed Minutes (2 pm).  There is also a Fed speaker (Brainard at 12:15 pm).  The major earnings reports scheduled for release include BMO, BNS, BAX, DKS, and DY before the open.  Then after the close, UHAL, CHNG, DXC, ENS, GES, NVDA, SPLK, and WSM report.

So far this morning BNS, BMO, and DY have all reported beats on both lines. 

The major economic news coming later this week includes Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales on Thursday.  Then on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.

LTA Scanning Software

It looks like we are headed toward a relatively flat open, (down, but only modestly so at this hour) not gapping one direction or the other for a change. This may be a signal that traders are waiting to sift through the tea leaves of the Fed Minutes this afternoon or simply that markets have been so choppy lately that traders need to take a breath. Regardless, the bears still have the trend and the bulls have not capitulated in a crescendo of volume yet. So, uncertainty and stubbornness remain. That means volatility and intraday whipsaw is also likely to continue. If we do break lower, keep an eye on that bear market line (about 384 in the SPY) for the S&P. The bulls have defended that line before, so a bounce there is possible. Be very careful about chasing and remain nimble or hedged. There is no need to predict reversals or fear missing out. The market will still be here after it has given confirmation.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: Not trade ideas today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Extension Eased Bears Look To Gap Lower

Stocks gapped higher the better part of a percent on Monday after news that President Biden said he is now reconsidering the previous administration’s tariffs on Chinese goods.  After some waffling the first hour, the bulls then stepped in to take us to the highs at mid-day.  The afternoon was spent seesawing sideways not too far from the highs of the day. The SPY and DIA both tested their T-lines (and are still testing at the moment) with the QQQ still having work to do to get to that test.  This action gave us gap-up, white candles with wicks on both ends, but larger wicks on the bottom of the SPY and QQQ.  On the day, SPY gained 1.87%, DIA gained 2.05%, and QQQ gained 1.66%.  All of this happened on low trading volume.  The VXX fell to 24.06 and T2122 climbed to not far outside of the overbought territory (70.09) even though we entered the day well oversold.  So, to the extent this was a relief rally, Mr. Market has now gotten at least some relief.  10-year bond yields rose to 2.866% and Oil (WTI) fell to $110.62/barrel.

As mentioned, President Biden’s statement that he is revisiting Chinese tariffs helped stocks. In particular, big bank stocks across the board shot higher on the news. It is worth noting that JPM CEO Dimon told World Economic Forum (Davos) attendees that he only sees inflation and recession as “big storm clouds in the distance” at this point, continuing to say they may dissipate as the Fed gives more clarity on when the hikes will reach a neutral point. The banks leading the charge Monday included JPM, C, BAC, and WFC who led the way for the DIA and SPY.

After the close, ZM, HEI, and SKY all reported beats on both the revenue and earnings lines.  At the same time, NDSN missed on revenue while beating earnings estimates.   However, AAP reported missing on both lines. ZM was up as much as 21% after-hours after issuing strong guidance on top of their earnings beat. 

SNAP Case Study | Actual Trade

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In other stock news, at the end of the day, the National Labor Relations Board ruled there was merit in the claim that ATVI illegally threatened union organizers using the guise of a broad company social media policy that conflicted with employee rights.  This comes hours before the union vote begins for ATVI subsidiary Raven Software.  All of this is happening while the ATVI buyout by MSFT remains not yet closed.  Elsewhere, the CEO of SNAP send an email to all employees after the close telling them that the company will miss its own targets for both revenue and earnings in the current quarter.  SNAP stock plummeted 31% in after-hours trading following that email.  The company also filed a K-8 form reporting the same to the market.

Monday evening, Bloomberg reported that for the third week in a row, insiders have increased the buying of their own company’s stock.  Last week, 897 insiders across 381 companies, bought over $324 million of their company’s stock.  The week prior, we saw 584 insiders across 288 companies buying $188 million of stock.  Insider buys are often part of a scheduled buying plan.  However, last week’s numbers compare to only 190 insiders across 107 companies buying $43 million one year ago.  So, this may be an indication that insiders think markets are oversold, regardless of whether they fall in the short-term or not.

On the Russian invasion story, a Russian diplomat in Switzerland resigned over his country’s 3-month invasion and occupation of Ukraine.  In Ukraine, the first Russian soldier convicted of war crimes was sentenced to life in prison for murdering a civilian.  The European Economic Commission President von der Leyen told World Economic Forum (Davos) participants that Russia was waging war with food as the UK told Sky News UK that it was exploring all options to get 25 million tons of wheat out of Ukraine.  She went on to say that sanctions are hurting Russia and she hopes for agreement on Russian oil sanctions within days.  On the other side of the world, the leaders of the US, Japan, India, and Australia are in 4-way talks over security and sanctions against Russia.  The 3 more western nations are pressuring India to pivot more toward the West and further isolate Russia.  This includes military purchases (where tens of billions is now spent in Russia that might go to western firms like RTX, GD, NOC, LMT, BA, etc.

Overnight, Asian markets were red across the board with China leading the way lower.  Shenzhen (-3.34%), Shanghai (-2.41%), and Hong Kong (-1.75%) paced the losses.  In Europe, stocks are mixed, with the larger exchanges following Asia lower at mid-day.  The FTSE (-0.13%) lags, but the DAX (-0.63%) and CAC (-0.71%) are more typical of the losses across the major exchanges in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -0.54% open, the SPY is implying a -0.91% open, and the QQQ implies a -1.47% open at this hour.  10-year bond yields are off slightly to 2.821% and Oil (WTI) is up fractionally to $110.65/barrel in early trading.

The major economic news scheduled for release Tuesday is limited to Mfg. PMI and Services PMI (both at 9:45 am), and April New Home Sales (10 am).  However, Fed Chair Powell also is scheduled to speak at 12:20 pm.  The major earnings reports scheduled for release include ANF, AZO, BBY, CSIQ, DOLE, ESLT, NTES, WOOF, and RL before the open.  Then after the close, QFIN, A, CAL, INTU, JWN, TOL, and URBN report.

So far this morning NTES and AZO have reported beats on both lines.  At the same time, BBY and ESLT beat on revenue while missing on earnings.  On the other side, CSIQ and DOLE missed on revenue while beating on earnings.

The major economic news coming later this week includes April Durable Goods Orders, Crude Oil Inventories, and the May FOMC Minutes on Wednesday.  On Thursday we see Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales.  Finally, on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.

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The bears are not taking the bulls’ Monday move lightly and are looking to open markets lower today. With a chunk of over-extension taken off the board by yesterday’s action, those bears may have more strength than the bulls at least early. However, volatility and intraday whipsaw is likely to continue. The bulls have not capitulated in a crescendo of volume yet…so uncertainty and stubbornness remain. Remember that the trend is still to the downside, but the bulls seem to want to defend that bear market line for the S&P. So, be very careful about chasing gaps and remain nimble or hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: SHEL, DRE, COP, C, JPM, ZIM, XLE, ARKK, DVN, OXY, UPST. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Bulls Look to Try Again At Open

Markets gapped about one percent higher on Friday, but this was a Bull Trap.  Right after the open, the selling started and the selloff continued until about 3 pm.  However, a massive rally (options expiration pinning) took us out well over halfway up those candles.  This gave us a black, Bearish Engulfing candle (barely) in the QQQ and just black indecisive candles with huge lower wicks in the SPY and DIA.  The late-day rally saved the SPY from joining the QQQ in Bear Market territory (down more than 20% from the high).  It also capped off the seventh consecutive week of declines across the market.  So, the bears may want to retest that Bear Market level this week.  And with that said, markets are still well oversold, giving the bulls some ammunition.  So, the Bulls may want to try a little relief rally as well.  On the day, SPY gained 0.04%, DIA lost 0.24%, and QQQ lost 0.31%.  The VXX fell a little over a percent to 25.05 and T2122 “climbed” to 8.28.  10-year bond yields fell to 2.79% as traders bought up bonds during the first 6 hours of the day and Oil (WTI) was up marginally to $112.70/barrel.

Last week, TSLA had a terrible streak losing 14%.  However, you have to bear in mind, that the stock has lost 34% since it was revealed (well after the fact) that Musk had been selling off TSLA stock to raise money for his TWTR bid.  Among the problems facing the company are the lockdowns in China stalling production, the Chinese economic downturn hurting demand, massively increased competition from actual major carmakers, and, of course, the 3-ring circus of notoriety for the sake of itself that Musk feels the need to maintain at any cost.  On the Chinese front, TLSA has said it wants all staff to continue living in its Chinese factory until mid-June to minimize the risks of more shutdowns. In other stock news, Sunday night Bloomberg reported that AVGO is in talks to acquire VMW.

Recently, there has been considerable talk in the trading rooms about whether or not we’ve yet seen a bottom in the selloff.  On Sunday, the WSJ suggested the answer is no for now.  They reported that BAC says that 63% of their private client’s portfolios are still in stocks, much higher than when prior bottoms have been reached.  In addition, the VIX is currently at 29 and has reached a maximum of 34.75 in the last month.  Again, this is well below the 40+ it reached in the 2008, 2011, and March 2020 selloffs.  Finally, while most selloffs end in capitulation (extreme volume on at least one big down day), we have not seen any such action yet.  So, at the moment, both the chart and anecdotal evidence point to the bears still being in control.

SNAP Case Study | Actual Trade

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Bloomberg reported over the weekend that Fed members have been telling them that a market selloff is exactly what they need.  The basic idea is that as the market falls, the normally “long-only” public loses money or at least feels worse.  In turn, this will cause the public (on average) to spend less and that lower demand helps to reduce inflation.  So, while the Fed increasing rates works on the supply side (making spending more expensive), a bear market works on the demand side, slowing the consumer’s urge to buy.  For that reason, Bloomberg says several anonymous Fed members have told them that any sort of Fed Put is the last thing they want to see.  Simply stated, any market bullishness would make their “job number one” (taming inflation) twice as hard.  KC Fed President George is expected to confirm this evening.

In climate-related news, the North Americans Electric Reliability Corporation (a non-profit regulatory authority) has warned that the entire Western US, most of the Upper Midwest, and parts of the East Coast are at high risk of blackouts this summer.  This is the result of the long-term drought in the West (now reducing hydroelectric production) and a newly forecast summer heatwave (worse than normal).  This electricity shortage may affect essentially every industry over at least the next 1-2 Quarters.  Climate has also put another hit on the Ag industry as unprecedented rain for months has caused the deterioration (flooding) of Canadian croplands as well as the inability to plant.  The Insurance Journal reports that only 4% of Manitoba croplands are planted, while the 5-year average at this point of the year would be over 50% planted.  Canola and wheat are the crops most impacted, which coincidentally are exactly the crops whose supply is also most impacted by the Russian invasion of Ukraine and the blockading of Odesa. As a result, all companies that use wheat and canola are at great risk of both supply problems and much higher input costs six months down the road.  Of course, consumers will also have to pay much higher prices for staple items like bread, pasta, cereals, battered food, etc.

On the Russian invasion story, Russia cut the flow of natural gas to Finland Saturday (after Finland refused to pay in Rubles).  Lithuania also stopped buying electricity from Russia.  On Sunday, Russian Trans. Minister Savelyev told state media that Western sanctions have effectively broken logistics within Russia.  On the ground, things are looking tough for the Ukrainians in the Luhansk region as Russia made gains around the town of Popasna and blew up the last resupply/retreat bridge for the Ukrainian Army in Severodonetsk / Lysychansk (a large petrochemical industry metroplex).  With no major new Western arms shipments expected until July and Russia getting tens of thousands of additional troops (freed up from Mariupol and returning from their Syrian drawdown), it is looking dire for Ukraine holding onto the Donbass.  Finally, much of the talk at Davos has been about implementing and offsetting Russian Oil sanctions. This included a speech from Ukrainian President Zelensky.

Overnight, Asian markets were mixed on modest moves.  Japan (+0.98%), Thailand (+0.76%), and New Zealand (+0.44%) led the gainers.  Meanwhile, Hong Kong (-1.19%), Singapore (-0.83%), and Malaysia (-0.43%) paced the losses.  This is despite a rally that came when President Biden told the Asian Economic meeting that he was going to revisit the former President’s Chinese tariffs.  (The President also misspoke, saying that the US Military would intervene to defend Taiwan from a Chinese attack.) In Europe, stocks lean heavily to the green side on Biden’s comments as well as more certainty from the ECB as ECB President Lagarde said they are likely to raise rates this summer and be out of negative rates by September.  At mid-day, the FTSE (+1.04%), DAX (+0.75%), and CAC (+0.35%) lead the way and are fairly typical of the continent.  Only Russia (-1.91%) and the FTSE MIB (-0.64%) are in the red in early afternoon trading.  As of 7:30 am, US Futures are pointing to another gap higher to start the day.  The DIA implies a +1.11% open, the SPY is implying a +1.21% open, and the QQQ implies a +1.05% open at this hour.  10-year bond yields are back up to 2.835% and Oil (WTI) is up 1% to $111.36/barrel in early trading.

The only major economic news scheduled for release Monday is a Fed speaker (George at 7 pm).  There are no major earnings reports scheduled before the open. However, AAP, HEI, NDSN, SKY, and ZM report after the close.

The major economic news coming later this week includes Mfg. PMI, Services PMI, and April New Home Sales on Tuesday.  Then on Wednesday, we get April Durable Goods Orders, Crude Oil Inventories, and the May FOMC Minutes.  On Thursday we see Q1 GDP, Weekly Initial Jobless Claims, and April Pending Home Sales.  Finally, on Friday we get a Fed speaker (Bullard, twice), April Trade Goods Balance, April PCE Price Index, April Retail Inventories, April Personal Spending, and Michigan Consumer Sentiment.

Major earnings reports coming later this week include ANF, AZO, BBY, CSIQ, DOLE, ESLT, NTES, WOOF, and RL on Tuesday.  Then Wednesday we get BMO, BNS, BAX, DKS, DY, UHAL, CHNG, DXC, ENS, GES, NVDA, SPLK, and WSM.  On Thursday, we hear from BABA, AMWD, BIDU, BURL, CM, DG, DLTR, GCO, IQ, M, MDT, AEO, ADSK, COST, DELL, FTCH, GPS, MRVL, ULTA, VMW, and WDAY.  Finally, Friday he see BIG, PDD, and SAFM.

LTA Scanning Software

The bulls look to be trying to leverage the late-day rally on Friday into a gap higher this morning. News that the US is reconsidering tariffs on Chinese goods is helping buoy spirits despite the head of the IMF saying they may need to reduce the 2022 global economic growth forecast again. In short, after seven weeks of losses and sitting in a very oversold state, the bulls feel the need to stretch their legs. As traders, we need to keep in mind that despite this fact, the trend is down and the probability of volatility is high. So, continue to be very careful about chasing gaps. Remember that Friday’s gap was a Bull Trap. Either way, that “bear market level” (down 20% from highs) in the area is close below in the S&P. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas Yet (Rick has Internet issues). You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

Bulls Look to Gap Up to End Tough Week

Markets gapped down the better part of a percent on Thursday on fears over economic slowdown.  This led to the immediate start of an all-day, roller-coaster ride within a well-constructed range.  The bottom of this range for the SPY was not far from the Bear Market trip line (down 20% from highs).  So, we may be getting some support from traders at that level (about 383) for the broader market.  At any rate, this action left us with indecisive, Spinning Top type candles across all 3 major indices. On the day, SPY lost 0.63%, DIA lost 0.78%, and QQQ lost 0.57%.  The VXX fell almost 3% to 25.36 and T2122 “climbed” but still remains deep in the oversold area at 7.32.  10-year bond yields fell to 2.851% and Oil (WTI) gained 1.6% to $111.30/barrel.

During the day, Weekly Jobless Claims were reported as slightly higher than expected. However, it was the Philly Fed Mfg. Index that drew the most concern as it came in at only +2.6 (+16.0 was forecast).  This means Manufacturing conditions are only slightly improving (anything above zero), less so than expected and far less so than last month (+17.6).  April Existing Home Sales also came in slightly lower than expected, which falls in line with rising interest rates.  KC Fed President George said “the rough week” in the market was not surprising and is just one of the ways tighter financial conditions will emerge as the Fed tightens policy.

SNAP Case Study | Actual Trade

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After the close, DECK, FLO and PANW all reported beats on both the revenue and earnings lines.  After-hours, DECK was up as much as 16%, PANW was up as much as 12%, and FLO was up as much as 8% on the earnings news.  Meanwhile, CLZNY missed on revenue while beating on earnings.  However, AMAT, ROST, and VFC all missed on both lines.  After hours, AMAT was down as much as 8%, ROST was down 20%, and traded in a wide range up as much as 7% and down as much as 3% on the earnings news.

On the Russian invasion story, the EU has agreed to $19 billion in guaranteed short-term financing for Ukraine. Meanwhile, the Biden Administration approved another small ($100 mil) military aid package for Ukraine, that another 18 Howitzers.  In Congress, the $40 billion Ukraine aid package passed.  This aid bill includes $9 billion for replenishing US stockpiles of arms and munitions given to Ukraine. The main beneficiaries of that $9 billion will be RTX, LMT, GD, and NOC. Finland will also lose its main natural gas supply as of Saturday when Russia shuts down its supply following Finland’s refusal to pay for gas in Rubles. Finland is one of the few gas users to stand up to Putin as the Ruble hit a 7-year high on demand for that currency from gas buyers. Finally, Qatar has offered to sell LNG from its US-based plant to Germany starting in 2024.

President Biden is in South Korea today at the start of his Asian trip.  Many analysts are expecting North Korea to launch a missile or do a nuclear test in order to upstage the visit to South Korea today.  So, keep an eye out for that potentially market-moving news later today.

Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%).  Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way.  However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points.  In Europe, we also see green across the board with the exception of Russia Overnight, Asian markets were green across the board with the minor exception of a flat Malaysia (-0.02%).  Hong Kong (+2.96%), India (+2.89%), Shenzhen (+1.82%), and South Korea (+1.81%) led the way.  However, most of the region was up more than a percent as China kept its one-year lending rate the same while cutting the 5-year rate by 15 basis points.  In Europe, we also see green across the board with the exception of Russia (-1.59%) at mid-day.  The FTSE (+1.95%), DAX (+1.96%), and CAC (+1.40%) lead the way, but gains of more than a percent are seen everywhere except Russia, Greece (+0.83%), and Switzerland (+0.53%) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap up to start the day at the end of a down week.  The DIA implies a +0.77% open, the SPY is implying a +0.95% open, and the QQQ implies a +1.30% open at this hour. 10-year bond yields are up slightly to 2.875% and Oil (WTI) is also fractionally higher to $112.45/barrel in early trading.

There is no major economic news scheduled for release Friday. Major earnings reports scheduled for the day include BAH, DE, and FL before the open. There are no reports scheduled for after the close.

So far this morning BAH and DE have reported beats on both lines.  At the same time, FL missed on revenue while beating on earnings. 

LTA Scanning Software

As we appear to be heading for a seventh straight week of losses (which would be the longest market losing streak since the dotcom bubble burst), Mr. Market seems to be trying to gap into a green day. Bear in mind that this is option expiration Friday and GS estimates $460 billion of single-stock options, as well as $855 billion in S&P-tied derivatives, will all expire. The point is, we may well see some volatility and/or pinning related to all those options expiring today. We also have a coming weekend new cycle to consider. So, continue to be very careful. The short and mid-term trends are bearish, the mid-term move is getting a bit long in the tooth. Plus in the short-term (as shown by T2122), we are oversold and have the potential support of a “bear market level” (down 20% from highs) in the area. So, remain nimble and hedged. Above all, don’t give in to FOMO and feel the need to chase a move or predict a reversal either way.

Trading is a job, not a lottery ticket. So, work the process. Stick with your trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Also, remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. Keep in mind that nobody is right all the time. When you’re wrong, just admit it and take your loss. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss.

Ed

Swing Trade Ideas for your consideration and watchlist: No Trade Ideas Today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

🎯 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 PlansPrivate 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

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