Large-cap indices opened flat Monday and spent the day wobbling sideways in a fairly tight range.  The SPY spent most of the day on the plus side while the DIA spent nearly the whole day on the red side of breakeven.  Meanwhile, the QQQ opened flat only to immediately rally for 30 minutes before grinding sideways in a tight range the rest of the day. This action gave us a Doji in the SPY, a black-bodied Spinning Top in the DIA, and a Bullish Engulfing candle with a not insubstantial upper wick in the QQQ.  The QQQ and SPY remained above their T-line while the DIA failed that retest and closed below its own 8ema.  This all happened on very low SPY volume, as well as below-average volume in the DIA and QQQ.

On the day, eight of the 10 sectors were in the green (and a ninth just barely red) with Technology (+0.91%) out in front leading the way higher as Consumer Defensive (-1.01%) was by far the worst performing sector.  At the same time, the SPY gained 0.04%, DIA lost 0.39%, and QQQ gained 0.34%.  VXX was flat on the day at 35.81 and T2122 climbed a bit but remains in the mid-range at 65.43.  10-year bond yields spiked up to 3.717% (after being down a good chunk in premarket) while Oil (WTI) climbed a third of a percent to end the day at $71.81 per barrel.  So, Monday saw a great deal of uncertainty with a handful of big dog tech names (TSLA, AMD, GOOGL, and META) holding up the QQQ and by extension the rest of the market.   

The only economic news Monday was more talking…this time by four non-voting members of the Fed.  Before the open, St. Louis Fed President Bullard (uber-hawk) went further than he has before, saying the US economy has been “fairly robust so far (in 2023) … So, for that reason, I think we’re going to have to grind higher with the policy rate in order to put enough downward pressure on inflation.”  He went on to argue that he thinks two more rate hikes are needed in 2023, adding that he has previously wanted the Fed to make those kinds of moves.  This was quite unusual for a Fed member and contrary to his colleagues’ postures of needing to see more information.  Bullard has already made up his mind weeks and months in advance.  (Perhaps he has that freedom because he is not an FOMC voter this year.)  Later, in a virtual appearance San Francisco Fed President Daly said it would be a historical anomaly to get inflation back to 2% without unemployment going to at least 4%.  She went on to say, “Even three weeks in advance of the (next) meeting, it’s still a lot of time to collect information before we make a decision about what to do in June or what to do for the rest of the year.” (Daly is not a voter either in 2023.)  Meanwhile, Atlanta Fed President Bostic (not a voter either this year) indicated he is still in favor of a June pause, saying “Right now, absent a big change, I think I will be comfortable saying let’s just look and see how things play out.”  At the same event, Richmond Fed President Barkin said “I’m not going to prejudge June,” and “There is a plausible narrative whereby the Fed’s previous rate hikes, plus tighter credit standards amid strains in the banking sector, will cool demand and prices.”  (Barkin does not have a vote in 2023 either.) 

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In stock news, F held an investor day to tout its plan to (profitably) ramp up its electric vehicle business.  However, the company also acknowledged a huge hurdle, saying that its cost structure is $7 billion higher than its competition (non-union TSLA).  Later, INTC told its own investor conference about its plan to shift toward AI chips which it will introduce in 2025 in order to better compete with NVDA and AMD.  (INTC currently has zero market share in the AI space after its AI chips have been delayed for years.)  In other news, M&A Advisory firm GHL announced Monday that it has agreed to be acquired by Japanese company Mizuho Financial Group for $550 million ($15/share, which was a 121% premium over GHL’s Friday close of $6.78).  Meanwhile, WMT has announced it has signed a deal with pet telehealth provider Pawp to allow WMT subscribers access to Vets via video and text without appointments.  (This is direct competition to a service offered by CHWY.)  Elsewhere, both PFE and NVO announced (separately) findings of studies that show their oral weight loss drugs are as effective as the LLY and NVO injectable weight loss drugs that have been so popular and newsworthy in recent months.  Later CVX announced it is buying PDCE in a stock and debt deal worth $7.6 billion.  After the close, TGNA announced a $300 million accelerated share repurchase program and a 20% dividend increase. 

In stock legal and regulatory news, WBA asked a US judge to vacate an arbitrator’s $642 million award to HUM over prescription drug reimbursements after the arbitrator found WBA has submitted millions of falsely-inflated drug prices for reimbursement. It was no surprise the HUM asked the judge to affirm the award.  Elsewhere, FCNCA has sued HSBC for hiring away more than 40 top employees of SBNY after FCNCA bought the holdings of SBNY from the FDIC.  The suit seeks $1 billion in damages, claiming the hiring was a planned scheme and the employees took major customers and trade secrets that allowed SBNY to secure major customers.  Meanwhile, MU announced midday on Monday that after the early morning ban by China, it expects a hit mid-to-high single-digit percentage range.  Two Korean firms SSNLF and SK Hynix (South Korea listed) are expected to pick up the market share unless the US can convince the Koreans to forego the revenue in an effort to punish China.  At the same time, a US judge has ruled the CEO of MMM must attend the mediation sessions aimed at resolving nearly 260,000 lawsuits alleging MMM military earplugs failed causing hearing loss.  After the close, a federal judge in Chicago dismissed some claims made against ABT in litigation over recalled baby formula.  The judge threw our claims of “only economic loss” related to the recall.

In miscellaneous news, the USDA just reported a third of the nation’s winter wheat crop is being abandoned (or will be) in the field.  This comes as farmers have decided it’s economically better to destroy the crop and file an insurance claim than to spend more money harvesting.  This is the highest percentage of a planted winter-wheat crop to be abandoned since World War One.  Elsewhere, the Wall Street Journal reported over the weekend that XOM has acquires 120,000 acres of AR land where it plans to produce lithium.  Meanwhile, the Biden Administration announced a deal that calls for CA, AZ, and NV states to all cut their water usage by about 13%.  The deal means that the Federal government will not need to impose severe restrictions on the states.  (The deal was made more palatable by massive snow and rainfalls this year.)    Finally, President Biden and House Speaker McCarthy did not reach a final debt ceiling agreement Monday.  However, game theory had suggested no deal would be reached with 10 days left until the deadline.  After their meeting, both men said they had a productive meeting and believe they will reach a deal before a default

After the close, ZM, NDSN, and HEI all reported beats on the revenue and earnings lines.  Meanwhile, LU missed on revenue while beating on earnings.  It is worth noting the ZM raised its forward guidance.

Overnight, Asian markets were mixed but leaned to the red side.  Shanghai (-1.52%), Hong Kong (-1.25%), and Shenzhen (-1.03%) led the region lower.  Meanwhile, in Europe, we see a similar picture taking shape at midday as the bourses lean to the red side.  The CAC (-0.82%), DAX (-0.27%), and FTSE (+0.22%) lead and are typical of the spread in the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a very modestly down open.  The DIA implies a -0.13% open, the SPY is implying a -0.11% open, and the QQQ implies a -0.11% open at this hour.  At the same time, 10-year bond yields are jumping again and are now at 3.748% while Oil (WTI) is up two-thirds of a percent to $72.54/barrel in early trading.  

The major economic news events scheduled for Tuesday include Building Permits (8 am), Preliminary May Mfg. PMI, Preliminary May S&P Global Composite PMI, and Preliminary May Services PMI (9:45 am), April New Home Sales (10 am), and API Weekly Crude Stocks Report (4:30 pm).  The major earnings reports scheduled for the day are limited to AZO, BJ, DKS, HIS, LOW, VIPS, and WSM before the open.  Then, after the close, A, INTU, PANW, TOL, URBN, and VFC report. 

In economic news later this week, on Wednesday, EIA Weekly Crude Oil Inventories, FOMC May Minutes, and Treasury Sec. Yellen speaking are on tap.  On Thursday, we get Preliminary Q1 GDP, Preliminary Q1 GDP Price Index, Weekly Initial Jobless Claims, April Pending Home Sales, the Fed Balance Sheet, and Bank Reserve Balances with the Fed.  Finally, on Friday, April Durable Goods Orders, April Goods Trade Balance, Aprile PCE Price Index, April Personal Spending, April Retail Inventories, and Michigan Consumer Sentiment are reported.

In terms of earnings reports later this week, on Wednesday, ANF, ADI, BMO, BNS, DY, KSS, WOOF, XPEV, UHAL, AEO, ENS, PLUS, GES, MOD, NVDA, SNOW, and SPLK report.  On Thursday, we hear from AMWD, BBY, BURL, CM, DLTR, GCO, HEPS, MDT, NTES, RL, RY, TD, TITN, ADSK, COST, DECK, GPS, MRVL, RH, ULTA, and WDAY.  Finally, on Friday, BIG, BAH, and HIBB report.

So far this morning, LOW, VIPS, AZO, and DKS all reported beats on both the revenue and earnings lines.  Meanwhile, BJ missed on revenue while beating on earnings.  On the other side, HIS beat on revenue but missed on earnings.  It is worth noting that LOW also lowered its forward guidance. It’s also worth noting that the largest surprises were 38% (VIPS) and 11% (AZO) upside earnings surprises.

In overnight news, the Saudi Oil Minister warned oil speculators to “watch out” ahead of the OPEC+ meeting.  He went on to say “They did ouch in April.  I don’t have to show my cards, I’m not a poker player … but I would just tell them to watch out.”  He made no clear implications, however, in the past, he has advocated for more investment in expanding production capacity.  So, he could, theoretically, be signaling he intends for OPEC+ not to cut production again or even to increase production quotas.  Elsewhere, Minneapolis Fed President Kashkari (voter in 2023) said last night that if the Fed does pause rate hikes in June, it should also signal that tightening isn’t over yet and the move is just a pause.  Finally, as mentioned above, the one thing both President Biden and Speaker McCarthy agreed on Monday evening was that “a default is off the table.”

With that background, it looks like markets are tepidly in the red this morning. DIA continues to be the weakest of the major indices and is retesting potential support this morning in the premarket. Meanwhile, QQQ and SPY continue to trend bullishly. The SPY does look to be doing a tiny pullback. However, the QQQ isn’t even pulling back and could best be described as consolidating at a potential resistance level at this point. Over-extension from the T-line is not a problem and consolidation will help the QQQ (which is currently the only major indice that is even a bit stretched). The T2122 indicator also continues to sit in its mid-range (telling us we have at least a little room left to run). With this all said, it does not pay to fight the tape and the trend remains bullish at the moment in the SPY and especially QQQ. DIA, on the other hand, is a choppy, slightly bearish mess. The one thing to keep in mind is that breadth of the rally is getting very thin. QQQ only had 19 (of 100) gainers and SPY had 201/500 gainers on Monday. This can be a sign of rally exhaustion.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Friday saw a very modest gap higher (up 0.24% in the SPY, down 0.03% in the DIA, and up 0.06% in the QQQ).   This led to a sideways grind until 11 am in all three major indices.  However, at that point we saw a sharp selloff across the board for 40 minutes.  From that point, the rest of the day saw an undulating sideways move the entire rest of the day in all three indices.  This action gave us indecisive, black-bodied Spinning Top candles in the QQQ, SPY, and DIA (although the DIA body was admittedly larger than the other two indices).  The DIA also closed just below its T-line (8ema) while the other two major indices remain comfortably above their own.  This all happened on average volume in the DIA and less-than-average volume in the SPY and QQQ.

On the day, seven of the 10 sectors were in the red with Consumer Cyclical (-1.15%) leading the way lower as Healthcare (+0.64%) held up better than the other sectors.  At the same time, the SPY lost 0.15%, DIA lost 0.23%, and QQQ lost 0.56%.  VXX gained 2.5% to 35.77 and T2122 dropped back to the center of the mid-range at 56.95.  10-year bond yields spiked up to 3.682% while Oil (WTI) fell a quarter of a percent to end the day at $71.67 per barrel.  So, Friday saw an intraday whipsaw that really amounted to an indecisive stalemate between the bulls and bears with the Bears having just a bit of the upper hand on the strength of a 40-minute mid-day selloff.  

The only economic news Friday was talking.  On the Fed front, Gov. Bowman again pleaded the case on behalf of banks.  She criticized the Fed for using the collapse of SIVB, SBNY, and FRC as a “pretext” for considering what she termed “radical reform of the bank regulatory framework…as opposed to targeted changes to address identified root causes of banking stress.”  She went on to say the new regulation being considered is simply “incompatible with the fundamental strength of the banking system.”  At the same time, NY Fed President Williams told a conference that he refuses to tie Fed policy to his recently published research that shows major global economies are still fundamentally in a low-interest rate world.  Later, Fed Chair Powell spoke and said that recent banking system troubles (causing tighter credit conditions) mean that “our policy rate may not need to rise as much as it would have otherwise to achieve our goals.”  He went on to give what Bloomberg called a clear signal he is open to pausing interest rate increases next month.  Powell said, “We’ve come a long way in policy tightening and the stance of policy is restrictive and we face uncertainty about the lagged effects of our tightening so far and about the extent of credit tightening from recent banking stresses … Having come this far we can afford to look at the data and the evolving outlook to make careful assessments.” 

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In other talking news Friday, Treasury Sec. Yellen told bank CEOs that more bank mergers may be necessary.  Specifically, she told Reuters “Pressures on U.S. regional bank earnings may lead to more concentration in the sector and regulators will likely be open to such mergers.”  Elsewhere, the proximate cause of the mid-day slump in markets was that GOP negotiators walked out of the Debt Ceiling talks.  However, on Friday evening (once the GOP had made their headlines), they returned to the table and negotiations resumed after a six-hour pause. Progress was reported over the weekend and another meeting between President Biden and Speaker McCarthy is scheduled for today after a call from the President (from Airforce One) to McCarthy which the Speaker called “productive.” At this point, it definitely seems like an agreement is a done deal but the two sides will wrestle for political points until the last minute. So, be prepared for news from the Monday meeting (likely bad news to stoke fear).

In stock news, the Wall Street Journal reported Friday that Samsung (which has a little over 27% of smartphone market share) has decided it will not change its default search engine from GOOGL to the MSFT Bing engine.  The company had been considering a switch for a couple of months.  (GOOGL earns $3 billion per year from its contract with Samsung, in addition to ad revenue.)  Meanwhile, CTLT slashed its forecast and again delayed the release of its quarterly results (the third postponement) after replacing several financial directors and naming a new CFO last month.  At the same time, Reuters reports that META will release a text-based app to compete with Twitter in June.  The news outlet reports META is already testing the service with influencers and content creators.  Elsewhere, the CEO of MS announced he will step down sometime in the next 12 months.  In the auto industry, TSLA began offering more discounts ($1,300 this time) on some Model 3 cars in the US and even heavier discounts in Europe.  Finally, in a funny story, the Wall Street Journal reported Friday that AAPL has issued an internal edict to employees forbidding them from using ChatGPT.  This is interesting because it comes less than a day after AAPL announced they are offering a ChatGPT app for iPhones and less than a week since the company hinted that it is working on its own AI offering (when it touted the fact it has been designing AI chips for years).  So, AI is good as a product to sell…just not good enough a product for “us” to use.

In stock legal and regulatory news, a driver for startup Revel is suing TSLA over a crash at the end of January.  The driver claims his TSLA “suddenly and automatically” took accelerated, forcing the driver to need to crash the vehicle in order to get it to stop.  Elsewhere, EU antitrust regulators questioned MSFT competitors about the type of data their contracts with MSFT require them to turn over.  The watchdog asked if MSFT may have used the required data to go directly to the competitors’ customers. In somewhat related news, the same EU antitrust agency finalized its record fine of META (reported here last week) to be a whopping $1.3 billion for transferring EU customer data from European to US servers. Later, the US FDA approved a KRYS gene therapy used to treat skin disorders.  At the end of the day, the US Forest Service told a federal court it is not sure when it would be able to approve a land swap that would allow RIO and BHP to develop a new copper mine in AZ.  (Native American groups have opposed the swap and mine.)  The Biden Administration (Bureau of Land Mgmt.) on Friday issued a decision supporting a $6.6 billion pipeline proposed by ETRN.  (Earlier last week, Energy Sec. Granholm also had backed the pipeline.)  Meanwhile, a US judge ruled Friday that AAL must end its alliance with JBLU in a victory for the Biden Administration which had claimed their agreement would reduce competition and raise consumer prices.  Finally, the Wall Street Journal reports that the NHTSA is making an official demand and will take legal action against ARCW after the company refused the agency’s request that it recall 67 million airbag inflators after nine of them exploded during deployment, killing two people. While ARCW has been defiant, GM proactively recalled all vehicles with those inflators. However, this recall would cut across F, TM, STLA, VLKAF (Volkswagen), and HYMLF (Hyunda/Kia) and could threaten ARCW solvency.

Overnight, Asian markets leaned heavily toward the green side, with only three of the region’s exchanges in the red.  New Zealand (-0.88%) saw the worst of the losses as Hong Kong (+1.17%), Thailand (+0.95%), and Japan (+0.90%) led the region higher.  Meanwhile, in Europe, the bourses are leaning the opposite direction at midday.  The CAC (-0.35%), DAX (-0.33%), and FTSE (flat) lead the region lower with two notable exceptions (Greece +7.06% and Denmark +1.23%) in early afternoon trade.  (Greece skyrocketed as its ruling conservative party won the most seats in the Greek election and will now enter talks with other smaller parties about forming a government.)  In the US, as of 7:30 am, Futures are pointing to a start just on the red side of flat.  The DIA implies a -0.07% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.15% open at this hour.  At the same time, 10-year bond yields are down 3.663% and Oil (WTI) is just on the green side of flat at $71.58/barrel.

The major economic news events scheduled for Monday are limited to just three Fed speakers (Bullard at 8:30 am, Barking at 10:50 am, and Bostic at 10:50 am). The major earnings reports scheduled for the day are limited to RYAAY and ZIM before the open.  Then, after the close, HEI, NDSN, and ZM report  

In economic news later this week, on Tuesday we get Building Permits, Preliminary May Mfg. PMI, Preliminary May S&P Global Composite PMI, Preliminary May Services PMI, April New Home Sales, and API Weekly Crude Stocks Report.  Then Wednesday, EIA Weekly Crude Oil Inventories, FOMC May Minutes, and Treasury Sec. Yellen speaking are on tap.  On Thursday, we get Preliminary Q1 GDP, Preliminary Q1 GDP Price Index, Weekly Initial Jobless Claims, April Pending Home Sales, the Fed Balance Sheet, and Bank Reserve Balances with the Fed.  Finally, on Friday, April Durable Goods Orders, April Goods Trade Balance, Aprile PCE Price Index, April Personal Spending, April Retail Inventories, and Michigan Consumer Sentiment are reported. 

In terms of earnings reports later this week, on Tuesday, we hear from AZO, BJ, DKS, HIS, LOW, VIPS, WSM, A, INTU, PANW, TOL, URBN, and VFC.  Then Wednesday, ANF, ADI, BMO, BNS, DY, KSS, WOOF, XPEV, UHAL, AEO, ENS, PLUS, GES, MOD, NVDA, SNOW, and SPLK report.  On Thursday, we hear from AMWD, BBY, BURL, CM, DLTR, GCO, HEPS, MDT, NTES, RL, RY, TD, TITN, ADSK, COST, DECK, GPS, MRVL, RH, ULTA, and WDAY.  Finally, on Friday, BIG, BAH, and HIBB report.

So far this morning, RYAAY beat on both the revenue and earnings line.  Meanwhile, ZIM missed on both the top and bottom lines.

In miscellaneous news, after the close Friday, the Fed reported that deposits at US banks edged lower on the week ending May 10, falling to $17.10 trillion (from $17.16 trillion the week prior).  At the same time, the Fed reported that bank-provided credit fell from $17.37 trillion to $17.32 trillion.  Meanwhile, at the G-7 Summit, President Biden changed course and approved the transfer of F-16 fighter-bomber jets (from US allies, not the US directly) to Ukraine.  The US will provide Ukrainian pilot training on the jets after having already trained two for the purposes of determining what topics would need to be covered and to what extent.  LMT and GD make the F-16 and it is now being speculated that orders will be placed to replace the jets given to Ukraine by US allies.  (The most recent sale of F16s averaged a price of $350 million per jet after add-ons, accessories, and spare parts were figured in…$4.21 billion for 12 jets in 2022.)  The number of jets to be provided is unknown, however, military analysts say 50 or more may be the fleet size required for combat effectiveness across all of Ukraine.  So, there is a strong potential for large orders of spare parts and maintenance supplies at the very least…and the possibility of large orders for F16 or F35 planes to replace the jets going to Ukraine.

With that background, it looks like traders are still undecided early on Monday. DIA seems to be retesting its T-line while the other two major indices are just sitting inside Friday’s candle just below their closes. SPY may be getting some support from the 2/2 and 5/1 highs level. Meanwhile, QQQ still has to deal with its next resistance level it failed Friday (which has caused multiple reversals back into early 2021. Over-extension from the T-line is not a problem although QQQ remains a bit stretched. The T2122 indicator also sits in its mid-range (telling us we have at least a little room left to run). With this all said, it does not pay to fight the tape and the trend remains bullish at the moment in the SPY and especially QQQ. DIA, on the other hand, is a choppy, slightly bearish mess.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets started the day dead on Thursday (“gapping” up 0.06% in the SPY, up 0.11% in the QQQ, and down 0.25% in the DIA).  The large-cap indices both then proceeded to be dead money for 30 minutes.  However, the Bulls had other plans in the QQQ as a strong rally kicked in at the open and did not let up until noon.  After their 30-minute wake-up call, the SPY and DIA followed QQQ higher until 11 am before resting for an hour. From noon until 2 pm all three major indices sold off a bit (with DIA even crossing back through its open to new lows at 2 pm).  Yet the Bulls would have none of this and led a strong rally across the board the last two hours of the day, taking all three of the major indices out very near the highs.  This action gave us large, white-bodied candles in the SPY and QQQ with essentially no lower wick and a tiny upper wick.  Meanwhile, the DIA printed a white-bodied candle with a longer lower wick and a tiny upper wick.

On the day, six of the 10 sectors were in the green with Technology (+1.83%) leading the way higher as Communications Services (-0.71%) lagged behind the other sectors.  At the same time, the SPY gained 0.96%, DIA gained 0.43%, and QQQ gained 1.86%.  VXX fell another 4% to 34.90 and T2122 climbed back up outside of the oversold territory to 75.61.  10-year bond yields spiked up to 3.651% (as a flood of money came out of bonds) while Oil (WTI) fell 1.18% to end at $72.03 per barrel.  So, Thursday saw the large caps unsure but the “big dog” tech names like NFLX, NVDA, AMD, AMZN, and AAPL dragged the rest of the market to new highs.  This happened on close to average volume in all three major indices.  

In economic news, Weekly Initial Jobless Claims came in below expectations at 242k (compared to a forecast of 254k and the prior week’s 264k number).  However, it must be noted that three-quarters of the decline from last week was due to the stopping of massive fraudulent claims coming from the state of MA.  At the same time, the Philly Fed Manufacturing Index came in better than expected (but still negative) at -10.4 (versus a forecast of -19.8 and far better than the April reading of -31.3).  Later in the morning, April’s Existing Home Sales were just shy of the anticipated value at 4.28 million (compared to a forecast of 4.30 million but well below the March value of 4.43 million).  This represented a 3.4% month-on-month decline.  After the close, the Fed Balance Sheet was reported at $8.457 trillion, which is down $46 billion from one week ago.  Meanwhile, Bank Reserve Balances at the Federal Reserve were up to $3.280 trillion (from last week’s $3.225 trillion). 

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In Fed talk, Fed Governor Jefferson (also Vice-Chair nominee) told a conference that inflation may be slowing but it is too early to judge the full impact of the rapid rate increases the Fed instituted in the last 15 months.  He said “By some measures, progress has been slowing” and “Outside of energy and food, the progress on inflation remains a challenge,”.  However, Dallas Fed President Logan seemed to be in the other camp, saying “The data in coming weeks could yet show that it is appropriate to skip a meeting.”  However, uber-hawk St. Louis Fed President Bullard told the Financial Times “(the slow progress on taming inflation) may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control.”

In stock news, Reuters reported Thursday that in the wake of the failures of SBNY, SVB, and FRC, banks now see social media as a serious threat rather than a potential marketing channel.  Reuters says banks, especially the majors like JPM and C, have set up teams to monitor social media, contact any complaining customers to resolve issues quickly, and also nip any reputational risks in the bud.  (Unstated, but implied, is the big banks using bots to post counter-messaging to any concerns over liquidity.)  In a related story, SCHW (who was a brokerage mentioned among the bank deposit run stories) raised $2.5 billion through a debt offering on Thursday.  Elsewhere, the NYSE and NASDAQ said they will nullify premarket trades of CDW (made between 4 am and 4:22 am Eastern) after share prices briefly plunged 96%.  Meanwhile, Reuters reported SONY is considering spinning off its finance unit in an IPO just three years after taking full control of that line.  Also, in the afternoon, META shared new details on its AI work, including a custom AI chip being developed in-house.  The company claimed it has been developing AI chips since 2020 and their chips use a fraction of the electricity of market-leading NVDA’s AI chips.  In political spat news, DIS has canceled plans to build a $1 billion office campus in Florida, announced the closing of a luxury hotel there, and also canceled the relocation of 2,000 high-paid employees (averaging $120k) to that state amidst the company’s fight with the Florida Governor. The fight is over the Governor’s retaliation against the company for publicly stating opposition to his 2022 cultural agenda law.  The impact on DIS of these decisions is unknown although it has already lost its self-controlled zoning and tax district and will spend a large amount suing the state for breaking related contracts. On the FL side of the equation, these moves will cost the state billions of dollars in lost taxes, jobs, and development in the next few years.

In stock legal and regulatory news, a US district judge issued a temporary restraining order preventing AMGN from closing its $27.8 billion purchase of HZNP until after the suit brought by the FTC to block that deal has been heard in court.  Meanwhile, the US Supreme Court refused to take up an appeal of a lower court decision to throw out a lawsuit against GOOGL.  The case challenged the so-called “Section 230” liability protection of social media companies for content posted by their users.  This caused a sigh of relief across all major tech names.  In another case, the Supreme Court ruled 9-0 against AMGN in its bid to revive patents in an infringement case the company had brought against SNY and REGN.  Elsewhere, GOOGL agreed to pay the state of WA $39.9 million to settle a lawsuit claiming the company had misled users about its location tracking practices.  (The company had previously paid $391.5 million to settle a suit from 40 states last November and another $80+ million to settle with AZ in October over the same issue.)  Later, the NHTSA announced that F is recalling 422k SUVs because the video from rearview cameras may fail even after a prior recall repair.  This recall includes 2020-2023 Ford Explorers and Lincoln Navigators.

After the close, AMAT, ROST, FTCH, and GLOB all reported beats on both the revenue and earnings lines.  Meanwhile, DXC, FLO, and CVCO all missed on revenue while beating on earnings.  Unfortunately, QFIN missed on both the top and bottom lines.  There were no guidance changes announced.

Overnight, Asian markets leaned heavily to the green side.  Hong Kong (-1.40%), Thailand (-0.77%), and Shanghai (-0.42%) were the only red in the region.  Meanwhile, New Zealand (+1.03%), South Korea (+0.89%), and Japan (+0.77%) led the more numerous gainers.  In Europe, we see a similar story taking shape at midday.  The CAC (+0.65%), DAX (+0.57%), and FTSE (+0.43%) lead all but three bourses higher with only Denmark (-0.53%) showing any appreciable loss in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a very modest green start to the day.  The DIA implies a +0.12% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.05% open at this hour.  At the same time, 10-year bond yields are flat at 3.65% and Oil (WTI) is up 1.14% to $72.76/barrel in early trading.  

The major economic news events scheduled for Friday is limited to hearing from three Fed speakers (Williams at 8:45 am, Bowman at 9 am, and Chair Powell at 11 am). The major earnings reports scheduled for the day are limited to DE, CTLT, and FL before the open.  There are no earnings reports scheduled for after the close. 

So far this morning, DE beat on both the revenue and earnings lines.  Showing solid growth in revenue (+30% which was a 17.2% upside surprise) and earnings (+42%, which was a 12.6% upside surprise).  However, FL missed on both the top and bottom lines.  It is worth noting that DE also raised its forward guidance while FL lowered its guidance at the time of reporting.  (CTLT was scheduled to report at 7 am but has been delayed for some reason.)

In miscellaneous news, after the close, the US and Taiwan reached a trade agreement covering customs procedures, regulatory practices, anti-corruption measures, as well as small business issues.  The deal is not expected to impact any tariffs.  This deal was really just a “make-up” deal because Taiwan had previously been excluded from the Indo-Pacific Economic Framework to avoid conflicts with China.  Elsewhere, G7 countries unveiled new sanctions and export controls that target Russia.  The measures added 70 entities to a blacklist prohibiting them from receiving any exports from G7 countries as well as 300 sanctions against individuals, entities, vessels, and aircraft considered facilitators.  The Russian energy-extracting industry was also targeted.  Meanwhile, in Kansas, a Wheat industry group announced the results of its survey of the state’s winter wheat crop.  The survey expects Kansas (the largest wheat-producing state) to have the lowest crop yield since 2000.  They expect a crop of 178-million-bushels (compared to a USDA forecast of 191.4-million-bushels and 2022’s 244.2-million-bushel winter wheat crop). If this new estimate is correct, expect pressure on food prices related to wheat despite the recent extension of the Russia-Turkey-Ukraine grain export deal.

With that background, it looks like DIA is pushing up against resistance at yesterday’s closing level. However, SPY and QQQ are looking to push higher this morning. In addition, all three major indices are up off the premarket lows and are now at the top of their premarket range. Just be aware that QQQ (the market leader) is close to retesting its next resistance level above and it is really a relative handful of massive tech names dragging QQQ (and the rest of the market) higher. Over-extension from the T-line is also a problem for QQQ and to a lesser extent for SPY. However, the T2122 indicator is still in (the top of) its mid-range telling us we have at least a little room left. All of this is taking place on a Friday after a nice up week (especially in QQQ). So, profit-taking and rest for the market seem in order. Don’t get caught off-guard by some Friday selling. Still, we can’t fight the tape and the trend remains bullish at the moment.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

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

Wednesday was the Bulls’ Day.  The SPY gapped up 0.52% and the DIA gapped up 0.54%.  Then after a modest 30-minute pullback, those bulls started running in a long, steady rally that took us to the highs of the day at about 2 pm.  Meanwhile, the QQQ was more muted, gapping up 0.34% and then recrossing the gap before the Bulls stepped in to drive that same long, steady rally to the highs at 2 pm.  From there, we saw very modest profit-taking and a sideways grind into the close near the highs in the SPY, DIA, and QQQ.  This action gave us large-bodied, white candles with larger lower than upper wicks in all three major indices.  The SPY and DIA both crossed back above their T-line (8ema) and DIA crossed back above its 50sma while QQQ continues its rally and is starting to get a bit extended above its own T-line.

On the day, nine of the 10 sectors were in the green with Financial Services (+2.29%) leading the way higher as Utilities (-0.11%) was the only red sector and lagged the rest.  At the same time, the SPY gained 1.19%, DIA gained 1.30%, and QQQ gained 1.21%.  VXX fell 3.32% to 36.36 and T2122 jumped back up out of the oversold territory to 66.67.  10-year bond yields spiked up to 3.581% while Oil (WTI) jumped up 2.62% to end at $72.72 per barrel.  So, Wednesday saw the three major indices get back “in sync” as the bulls ran and then modest profits were taken to end the day.  While volume was less-than-average, all three indices were closer to average volume than has been the case for several days.    

In economic news, Preliminary April Building Permits came in a bit shy of expectations at 1.416 million (compared to a forecast and prior month reading of 1.437 million).  This was a 1.5% month-on-month decline, which was improved from March’s 3.0% month-on-month decline.  However, at the same time, April Housing Starts were very slightly above expectation at 1.401 million (versus a forecast of 1.400 million and the March value of 1.371 million).  Later in the morning, EIA Weekly Crude Oil Inventories showed a much larger than expected inventory build of +5.040-million-barrels (compared to an expected drawdown of 0.920-million-barrels or the prior week’s 2.951-million-barrel increase in inventories).  With all that said, the main economic news came from the Debt Ceiling front.  Both President Biden and Speaker of the House McCarthy told the press (separate events) that the two sides are making progress and neither thinks the US will default on its debt. 

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In stock news, WAL gave an update on their deposits saying that they continue to rise in May after the March and early April spate of withdrawals. Elsewhere, the CEO of FSR told an automotive conference in Germany that the company is actively pursuing partnerships with rivals PSNY and an EV maker supported by Mercedes.  The partnerships are intended to allow the small EV companies to get to scale and work together to solve supply chain challenges that companies like TSLA can solve on their own.  Later, in other EV news, TM announced they are partnering with SZKMY (Suzuki) and Tokyo-listed Daihatsu on a mini-electric commercial van.  Each partner will release their own branded version of the vehicle later this year.  At the same time, PFE announced it is planning to raise $31 billion through its largest-ever debt offering.  PFE intends to use the proceeds to complete its $43 billion deal to acquire SGEN.  The debt offering is expected to close on May 19.  As the economy weakens, many grocery and household product makers are adding to their low-cost products and smaller-size packages specifically for dollar stores like DLTR and DG.  Among these, according to Reuters, are EPC, KHC, HSY, CAG, PG, and SJM, who all have dedicated dollar-store units or teams.  This falls in line with a Tufts University study that found dollar stores to be the fastest-growing US food and household goods retailers.  Meanwhile, FDX pilots voted overwhelmingly in favor of a strike if needed as the pilots union and company enter the final stages of negotiations.  (However, pilots cannot strike until after given permission by the National Labor Relations Mediation Board and after a cooling-off period if and when an impasse is reached.)  Finally, the Wall Street Journal reported that TPG and Francisco Partners are collaborating on a $5 billion bid to acquire NEWR.

In stock legal and regulatory news, Reuters reports that Qatar’s sovereign wealth fund (the second-largest shareholder of CS prior to its forced sale) is seeking legal help in an attempt to recover the haircut it took when CS was sold to UBS at “a fraction of its value.” At the same time, according to multiple sources, Reuters reported META is set to face an unspecified but claimed to be the largest fine ever levied by the EU.  The fine is a result of META failing to comply with warnings and deadlines from a top EU court and continuing to transfer European user data from EU-based servers to US-based servers.  (The prior record fine levied was $821.2 million levied against AMZN.)  In Congress, a bipartisan group of lawmakers introduced legislation making it illegal for automakers (including GM, F, STLA, TSLA, and VLKAF) from eliminating AM radios from new models of their vehicles.  The bill would direct the NHTSA to mandate that new cars include AM radio at no additional charge.  Elsewhere, AVGO has offered “interoperability remedies” in order to address EU antitrust concerns over its deal to acquire VMW for $61 billion.  The EU Antitrust Agency recently extended the deadline for its final decision to July 17.  Meanwhile, the FAA is forecasting a 4.5% increase in flights over the Memorial Day holiday period, expecting the total to be just shy of the pre-pandemic peak.  (DAL expects a 17% increase in passengers from 2022 while AAL and UAL both expect unspecified increases over last year.)  Then, after the close, WBA reached a $230 million settlement with the city of San Francisco over its role in the city’s opioid epidemic.

In miscellaneous news, on Wednesday, the NY Fed published a report that said the downside risk to the economy “eased a bit so far this year, but remains elevated.” At the same time, a Reuters poll of 116 economists found that 60% believe rates are at the same level they will be at year-end. Interestingly, 26% predict no hike and at least a 25-basis-point rate cut before year-end.  Only 14% are expecting another rate hike by the end of the year.  Meanwhile, the Fedwatch Tool tells us markets (futures) are pricing in a 29% chance of a quarter-point hike in June.  However, those futures also see a 43% chance of a rate cut in September, a 79% probability of a cut in November, and a 95% chance of a rate cut in December. So, somebody is (or somebodies are) wrong. The question is whether it is the market, the majority of economists, the Fed, or some combination of the three.

After the close, CSCO, SNPS, CPRT, STNE, and TTWO all reported beats on both the revenue and earnings lines.  Meanwhile, VSAT and ZTO both missed on revenue while beating on earnings.  It is worth noting that CSCO, SNPS, and STNE all raised their forward guidance.  Meanwhile, TTWO lowered its forward guidance.

Overnight, Asian markets leaned heavily to the green side.  Japan (+1.60%), Taiwan (+1.11%), and Hong Kong (+0.85%) led the region higher while only India (-0.28%) and Shenzhen (-0.12%) showed any red.  Meanwhile, in Europe, the bourses are mixed at midday with the big exchanges rallying.  The DAX (+1.68%), CAC (+0.92%), and FTSE (+0.55%) are leading the region higher in early afternoon trade.  In the US, at 7:30 am, Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.09% open, the SPY is implying a +0.22% open, and the QQQ implies a +0.27% open at this hour.  At the same time, 10-year bond yields are rising again at 3.6% and Oil (WTI) is flat at $72.80/barrel in early trading.  

The major economic news events scheduled for Thursday include Philly Fed Mfg. Index and Weekly Initial Jobless Claims (both at 8:30 am), April Existing Home Sales (10 am), Fed Balance Sheet and Bank Balances with the Fed (both at 4:30 pm).  We will also have testimony from Fed Vice Chair (for Bank Supervision) Barr at 9:30 am.  The major earnings reports scheduled for the day include WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, and WMT, before the open.  Then, after the close, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report. 

In economic news later this week, on Friday, we hear from two Fed speakers (Chair Powell and Williams).  In terms of earnings reports later this week, Friday, we hear from DE and FL.

So far this morning, WMT, BEKE, CSIQ, WMS, MSGE, and EXP all reported beat to both the revenue and earnings lines.  Meanwhile, BABA, DOLE, and BBWI all missed on revenue while beating on earnings.  It is worth noting that BEKE and WMT have raised forward guidance while WMS lowered its guidance.  It is also worth noting the MSGE has a 132% upside earnings surprise, BEKE posted a 100% upside surprise on earnings, CSIQ posted a 95% upside surprise on earnings, DOLE posted a 79% upside surprise on earnings, and WMS had a 56% upside surprise on earnings.  So, the sandbagging remains strong.

With that background, it looks like all three major indices are running up to test the next potential resistance level in premarket trading. DIA is also retesting its recent downtrend line. However, it is the QQQ (and the handful of massive tech names) that are leading this march higher, until yesterday’s good news gave financials a boost. Over-extension from the T-line is not a problem in general. However, QQQ is getting stretched. Still, the T2122 indicator sits in the mid-range telling us we have at least a little room to move. Be careful of chop and watch for rotation if traders start to think we are overcooked and look to start locking in profits. We still cannot say we have a nicely trending market anywhere except for the QQQ.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, markets saw a modest gap lower at the open (down 0.27% in the SPY, down 0.30% in the DIA, and down 0.21% in the QQQ).  However, those three major indices diverged at the point, with the QQQ immediately rallying (recrossing the gap within 5 minutes and continuing higher at 1 pm), the SPY trading sideways along its opening level, and the DIA selling off until 10:15 am and then trading sideways until about 1 pm.  At about 1 pm, all three got back in sync by starting a wavy selloff that lasted into the close.  This action gave us a white-bodied candle with a large upper wick in the QQQ, a black-bodied candle with a significant upper wick in the SPY, and a large-bodied black candle in the DIA.  The SPY fell down through its T-line (8ema) while the DIA failed a retest of its 50sma after holding up above the previous three days.

On the day, all 10 sectors were in the red with Utilities (-2.11) leading the way lower as Technology (-0.25%) held up significantly better than any other sector.  At the same time, the SPY lost 0.67%, DIA lost 1.02%, and QQQ gained 0.11%.  VXX was up more than 3% to 37.61 and T2122 climbed dropped back down into the oversold territory at 14.79.  10-year bond yields spiked up to 3.541% while Oil (WTI) fell 0.76% on the day to end at $70.57 per barrel.  So, Tuesday was a divergent day that saw the mega-cap DIA fall out of its recent range, large-cap SPY stay at the lower end of its recent range, and QQQ stay inside the top of its recent range.  This came on very divergent moves in the QQQ as AMD, AMZN, and GOOGL essentially held up that index on their own.  Once again, this happened on well less-than-average volume across all three of the major indices.    

In economic news, April Retail Sales came in much lower than was expected at +0.4% (compared to a forecast of +0.8% but also far better than the March reading of -0.7%).  Later, April Industrial Production month-on-month came in much better than expected at +0.5% (versus a forecast of -0.1% and the March reading of +/- 0.0%). On an annual basis, Industrial Production was up 0.24% (and last year had been up 0.07% versus the 2021 reading). March Business Inventories were a bit lower than expected at -0.1% (compared to the forecast of +0.1% and the February value of +0.2%).  In addition, March Retail Inventories also grew less than expected at +0.3% (versus the forecast and February reading which were both +0.4%).  Finally, after the close, the API Weekly Crude Oil Stocks report showed a 3.690-million-barrel inventory build (compared to an expected drawdown of 1.300-million-barrels but in line with the prior week’s value of a 3.618-million-barrel inventory build).

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In Fed talk, Cleveland Fed President Mester said Tuesday that she does not think the FOMC is at a point where it can hold rates steady for a period of time.  Specifically, she said, “Have we gotten to that rate yet? At this point, given the data we’ve gotten so far, I would say no.”  Later Richmond Fed President Barkin told Bloomberg “I do want to learn more about what’s happening with all these lagged effects.  But I also want to reduce inflation…and if more increases are what’s necessary…I’m comfortable doing that.”  However, NY Fed President Williams told a university audience he was more comfortable with a “pause and see” approach, telling them “We know it takes a while for our decisions to fully affect the economy” … “We’ve got to make our decisions and then watch what happens, get that feedback, see how the economy’s behaving.”  Then Dallas Fed President Logan told a Fed conference “(Changing rates in) smaller, less frequent steps can make it less likely that FOMC monetary policy causes US financial instability.”

In stock news, CNBC (citing sources) reported that CMCSA is likely to sell its 33% stake in the Hulu streaming platform to DIS between now and early next year.  Later, an investing consortium including BX and TRI released a term sheet stating that it is going to sell $3 billion worth of stock in the London Stock Exchange, which would be approximately 5.5% of the exchanges voting shares.  Mid-day, the CEO of OpenAI (creator of ChatGPT) and IBM both told US Senators that artificial intelligence needs to be heavily regulated…but also that we shouldn’t stifle innovation or the great benefits AI could offer.  Testimony from the two raised fears of AI spreading misinformation, influencing elections, infringing copyrights, and upending the economy by replacing swaths of jobs.  (Needless to say, MSFT, GOOGL, and many others companies that have gone “full speed ahead” on AI were likely not pleased by the news.)  Also in the afternoon, a German Automobile Club study found that TSLA Model 3 vehicles dominated its internal combustion engine competitors in terms of reliability for cars older than three years finding that just 1.1 out of every 1,000 2020 TSLA Model 3 broke down annually.  (6.9 breakdowns per 1,000 was the average for gas vehicles and 4.9/1000 was the EV average.)  Elsewhere, after the close, NYCB announced that the FDIC is selling shares of the bank that were acquired during the seizure of SBNY in what amounts to a secondary share offering.  Meanwhile, NOW announced its first-ever stock buyback program of up to $1.5 billion.  Finally, it was announced that the new entity created by the combination of WWE and EDR will trade under the ticker TKO (TKO Group).

In stock legal and regulatory news, the FTC said Tuesday that it will sue to prevent the proposed AMGN $27.8 billion purchase of HZNP which would give AMGN monopoly positions in the treatments in certain diseases.  Meanwhile, the NHTSA announced that STLA is recalling 219,000 2014-2016 Jeep Cherokee SUVs over fire risks due to electrical shorts in the power liftgate.  Later in the day, Reuters reported that WFC has agreed to pay $1 billion to settle a lawsuit that accused the company of defrauding shareholders by misinforming them about its progress in recovering from a series of scandals.”  A US District judge has granted preliminary approval to an all-cash settlement of the suit, but the deal will not be final until a hearing in early September.  Elsewhere, Reuters reports that JNJ has set aside $400 million in a separate fund to resolve State AGs claims that it violated state unfair business practices and consumer protection laws as part of its second attempt to settle 38,000 lawsuits over talc product liability.  (JNJ’s second bankruptcy plea offered $8.9 billion to settle the 38,000 cases.)  At the same time, a US Appeals Court has ruled in favor of GE, HD, and Ikea and against the University of CA, which had sought to ban the import of light bulbs that infringe on the university’s patents. (Lawsuits against AMZN, WMT, and TGT had also  been paused waiting on the outcome of this ruling.)   After the close, MAR settled with the state of TX and agreed to “prominently display all resort fees” to increase price transparency.  This comes a day after the TX State AG filed suit against H for misleading consumers with marketing and hidden fees. 

Overnight, Asian markets were mixed but leaned toward the red side.  Hong Kong (-2.09%) and Thailand (-1.25%) were by far the biggest losers while Taiwan (+1.60%), Japan (+0.84%), and South Korea (+0.58%) were the only appreciable gainers on the day.  Meanwhile, in Europe, the bourses lean heavily to the red side at midday.  The DAX (+0.43%) is an outlier while the CAC (-0.01%) and FTSE (-0.07%) are typical of the small losses being registered across most of the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.41% open, the SPY is implying a +0.37% open, and the QQQ implies a +0.23% open at this hour.  At the same time, 10-year bond yields are back down to 3.519% and Oil (WTI) is up a half of a percent to $71.23/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to April Building Permits and April Housing Starts (both at 8:30 am), and EIA Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day include ARCO, TGT, and TJX before the open.  Then, after the close, SQM, CSCO, STNE, SNPS, TTWO, VSAT, and ZTO report.   

In economic news later this week, on Thursday we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, April Existing Home Sales, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, we hear from two Fed speakers (Chair Powell and Williams).

In terms of earnings reports later this week, Thursday, WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, WMT, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report.  Finally, on Friday, we hear from DE and FL.

After the close, KEYS and KD both reported beats to both the revenue and earnings lines.  It is worth noting that KEYS raised its forward guidance while KD lowered it own guidance.  So far this morning, TCEHY and ARCO have reported beats to both the revenue and earnings lines.  Meanwhile, TGT and TJX both missed on revenue while beating on earnings.  (This includes a 50% upside earnings surprise from ARCO and an 18% upside earnings surprise by TGT.)

With that background, it looks like the SPY is retesting its T-line and the QQQ continues its march higher, at least as of the premarket. Even DIA is trying to climb back above its 50sma (and back into the recent trading range). Over-extension is not a problem yet in terms of distance from the T-lines. However, the T2122 indicator is back in the oversold region. Be careful of the chop and watch for rotation given the divergence of short-term attitudes of the SPY, DIA, and QQQ. We still do not have a nicely trending market anywhere except the QQQ.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened very modestly higher Monday (up 0.14% in the SPY, up 0.09% in the DIA, and up 0.15% in the QQQ).  However, after that open the Bears stepped in to recross the gap and reach the lows of the day at about 10:15 am. From there, the Bulls took the three major indices on a slow, wavy rally that reached the highs of the day at about 1:15 pm.  At that point, we took some profits and then ground sideways in a tight range not too far off the highs.  This action gave us indecisive candles in the SPY, DIA, and QQQ.  The DIA printed a Doji Bullish Harami, the SPY printed a white-bodied Spinning Top Bullish Harami, and the QQQ gave us more of a larger white-bodied Hammer-type candle.  The SPY and QQQ remain above their T-line (8ema) while the DIA remains below its own T-line but also remained above its 50sma.

On the day, nine of the 10 sectors were in the green as Technology (+1.30%) led the way higher while Utilities (-0.79%) lagged behind the other sectors.  At the same time, the SPY gained 0.33%, DIA gained 0.17%, and QQQ gained 0.54%.  VXX was down 2.69% at 36.50 and T2122 climbed back up while remaining in the mid-range at 61.70.  10-year bond yields climbed back to end up to 3.496% while Oil (WTI) gained 1.48% on the day to end at $71.12 per barrel.  So, Monday was an indecisive yet overall bull market that nudged a bit higher.  This came despite very disappointing economic news prior to the open.  And, once again, this happened on well less-than-average volume across all three major indices.    

In economic news, the New York Fed Empire State Manufacturing Index came in far below expectations at -31.80 (compared to a forecast of -3.70 and the April value of +10.80). In Fed speak, Chicago Fed President Goolsbee said Monday that his decision to support a quarter-point hike at two weeks ago was a “close call.”  He went on to say that the thing which gave him pause on a last hike was the potential impact of a hike on credit conditions.  Elsewhere, Atlanta Fed President Bostic told CNBC that if there was a vote Monday, he would vote to hold rates flat.  He went on to say “The appropriate policy is really just to wait and see how much the economy slows from the policy actions that we’ve (already) had.”  However, at the other end of the spectrum was Minneapolis Fed President Kashkari, who told a conference the Fed probably has “more work to do on our end, to try to bring inflation back down.”  He is joined on that side by Richmond Fed President Barkin who told Reuters “You could tell yourself a story where inflation comes down relatively quickly … with only a modest economic slowdown (but) I’m not yet convinced … I do wonder whether we’re not going to need more impact on demand to bring inflation down to where we need to go.”

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In stock news, Reuters reported Monday that WDC and Kioxia (formerly Toshiba’s Memory Business Unit) are speeding up their merger talks in a very tough business environment for computer memory makers.  If agreed, the deal would likely face tough antitrust challenges since the two are the #2 and #4 flash memory makers in the world.  WDC closed up 11.26% on the story Monday. Elsewhere, STLA has stopped the work on construction of a $3.74 billion battery plant in Windsor CA over a disagreement on subsidies. (STLA is now demanding that the CA government give it the same subsidies and grant very recently offered to VWAGY (Volkswagen) in order to get them to commit to building a battery plant in Canada.  STLA made their location decision in 2022 and had already begun plant construction prior to the VWAGY deal.)  In other EV news, FSR announced Monday that it is accelerating production of its Ocean SUV, raising its output goal to between 1,400 and 1,700 by the end of June.  Meanwhile, HEI announced it has reached a deal to buy Wencor (private) for just over $2 billion in order to fill out its portfolio of generic aerospace parts.  In that space, late in the day, Bloomberg reported that DAL is in talks with EADSY (Airbus) for a large wide-body jet order.   At the same time, Reuters reported that CEO Elon Musk has told TSLA management that there can be no hires (including contractors) unless he personally approves the hiring request.  For reference, TSLA has 128k employees at the moment.  Finally, after the close Monday, BRKB said it has begun investing in COF and that it no longer has a position in BK.  This was a somewhat odd information release since regulatory filings back on March 31 had shown this to be the case.

In stock legal and regulatory news, in an interesting twist to a saga that was thought to be dead, the EU gave antitrust approval to the MSFT $69 billion purchase of ATVI.  However, MSFT still faces an uphill battle in overturning the British veto of this acquisition.  MSFT has until May 24 to appeal the denial from the British Competition and Marketed Authority.  In other European legal news, a French prosecutor in Paris has opened a judicial inquiry into “planned obsolescence” and “deceptive marketing” of AAPL products stemming from a December 2022 complaint.  Elsewhere, GS was fined $7.3 million by the ECB for underreporting the risk associated with some corporate loans between 2019 and 2021.  Meanwhile, ABT was sued Monday in a proposed class action suit claiming the company advertising misled consumers into believing its PediaSure product would increase the height of children.  On the docket for Tuesday will be AI regulation as the CEO of OpenAI will appear before a US Senate panel that is considering several different approaches to AI regulation.  MSFT and GOOGL will be the most obviously impacted companies from such regulation.  However, IBM, BABA, BIDU, AMZN, CRM, NVDA, TMPS, TSLA, and dozens of other companies offer or use AI already and could be impacted. Finally, Elon Musk lost his appeal to the US Second Circuit Court of Appeals.  Musk’s appeal was an attempt to overturn his settlement with the SEC which requires the advance review of any tweets Musk puts out containing information about TSLA after Musk’s tweets misled investors in 2018.  (Musk also paid a $20 million fine and was forced to temporarily step down as CEO of TSLA.)

In miscellaneous news, the US Dept. of Energy said after the close that it will purchase 3 million barrels of crude oil to begin filling the Strategic Petroleum Reserve with offers to be submitted by May 31 for delivery in August. Elsewhere, the NY Fed released data showing that the demand for new mortgages had slowed substantially in Q1.  The Fed said this demand fell to the lowest Q1 level since 2014, even after overall mortgage debt rose $121 billion from Q4 to $12.04 trillion.  This came as overall household debt levels rose 0.9% to $17.05 trillion. 

Overnight, Asian markets were mixed.  Taiwan (+1.28%) and Japan (+0.73%) led the gains while Shenzhen (-0.71%), India (-0.61%), and Shanghai (-0.60%) paced the losses.  In Europe, we see a similar picture taking shape at midday.  Belgium (-1.11%) is by far the biggest mover.  However, the CAC (+0.07%), DAX (+0.12%), and FTSE (+0.13%) lead the more plentiful green bourses in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a mixed start to the day.  The DIA implies a -0.23% open, the SPY is implying a -0.07% open, and the QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.478% and Oil (WTI) is off a quarter of a point to $70.95/barrel in early trading.

The major economic news events scheduled for Tuesday include April Retail Sales (8:30 am), April Industrial Production (9:15 am), March Business Inventories and the March Retail Inventories (both at 10 am), and the API Weekly Crude Oil Stocks report (4:30 pm).  We also have Fed speakers (Mester at 8:15 am, Bostic at 8:55 am, Barr testifies at 10 am, Williams at 12:15 pm, and Bostic again at 7 pm).  There will also be another meeting between President Biden and the leaders of both parties from Congress over the debt ceiling (and budget deficit).  The major earnings reports scheduled for the day include BIDU, HD, IQ, SE, and TME before the open.  Then, after the close, CPRT, KEYS, KD, and PTC report.  

In economic news later this week, on Wednesday, April Building Permits, April Housing Starts, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, April Existing Home Sales, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, we hear from two Fed speakers (Chair Powell and Williams).

In terms of earnings reports later this week, Wednesday, we hear from ARCO, TGT, TJX, SQM, CSCO, STNE, SNPS, TTWO, VSAT, and ZTO.  On Thursday, WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, WMT, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report.  Finally, on Friday, we hear from DE and FL.

After the close, NU and XP both reported beats on the revenue and earnings lines.  So far this morning, BIDU, TME, and ONON have reported beats on both the revenue and earnings lines. Meanwhile, HD missed on the top line while beating on earnings.  At the same time, SE and IQ have missed on both the top and bottom lines.  It’s worth noting that ONON has raised guidance while HD lowered its forward guidance.

With that background, it looks like the premarkets are pulling back from earlier highs. However, all three major indices still are hanging inside their recent tight chopping range. The SPY and QQQ remain above their T-lines and the DIA remains below its own 8ema. Only the QQQ has been clearly trending bullishly of late with the SPY grinding sideways and the DIA leaning to the bearish side of trend. With that said, DIA is sitting on a potential support level and the SPY has one just below. All three major indices have a little room above before hitting the next potential resistance level. Over-extension is not a problem yet, either in terms of distance from the T-lines or in terms of the T2122 indicator. So, be careful given the chop and divergence of short-term attitudes of the SPY, DIA, and QQQ.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, markets opened very modestly higher (up 0.29% in the SPY, up 0.35% in the DIA, and up 0.17% in the QQQ).  However, then the Bears took over for most of the day as all three major indices sold off slowly and reached the lows of the day at about 2:30 pm.  At that point, the Bulls stepped in to lead a steady rally up off the lows for the last 90 minutes of the day.  This action gave us black-bodied, Hammer-like candles in the SPY, DIA, and QQQ.  With that said, the QQQ bounced up off its T-line (8ema) while printing a Bearish Engulfing signal (that engulfed a white Spinning Top) on what was the largest-bodied Hammer of the three.  At the same time, the SPY retested and managed to hold its T-line.  Meanwhile, the DIA lagged and did not manage to even retest its T-line during the day.

On the day, six of the 10 sectors were in the green (although only two of them were more than just marginally green).  Utilities (+0.59%) and Energy (+0.46%) led the way higher while Consumer Cyclical (-0.77%) lagged behind the other sectors.  At the same time, the SPY lost 0.13%, DIA lost 0.04%, and QQQ lost 0.36%.  VXX was flat at 37.51 and T2122 fell but remains in the mid-range at 27.46.  10-year bond yields spent the day climbing back to end up just positive at 3.453% while Oil (WTI)fell 1.20% on the day to end at $70.09 per barrel.  So, Friday consisted of 5 hours of slow, steady, bearish action followed by 90 minutes of bullish relief.  This all happened on well less-than-average volume across all three major indices.    

In economic news, April Export Price Index came in just as anticipated at +0.2% (right on the forecast but well above the March value of -0.6%).  However, the April Import Price Index came in above expectation at +0.4% (compared to a forecast of +0.3% and also far above the March reading of -0.8%).  Later, Michigan Consumer Sentiment was reported well below expectation at 57.7 (versus a forecast of 63.0 and the April reading of 63.5).  Elsewhere, Fed uber-hawk Bullard told a Hoover Institution conference that “Monetary policy is now at the low end of what is arguably sufficiently restrictive given current macroeconomic conditions.” He went on to say “the prospects for continued disinflation are good but not guaranteed.”  Finally, President Biden nominated sitting Fed Board member Philip Jefferson to become Fed Vice Chair and current World Bank representative from the US Adriana Kugler to take Jefferson’s seat on the Fed if, in fact, Jefferson is confirmed by the Senate.

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In stock news, on Friday, Twitter announced that Elon Musk will be stepping down as CEO in six weeks, to be replaced by a former NBC (owned by CMCSA) Advertising Executive, while Musk remains as Chairman and “Chief Technology Officer.”  This move is aimed at easing the fears of advertisers who have taken away business and expressed serious concerns since Musk took over the company.  In other big tech news, NFLX told the Wall Street Journal on Friday that it’s planning to reduce spending by $300 million in 2023.  However, the company also said it won’t implement a hiring freeze or additional layoffs.  In the afternoon, TSLA announced it had received an endorsement for its “Full Self Driving” program in China by the Shanghai Municipal Commission.  Elsewhere in electric auto news, FSR announced that it is postponing the release of its “Pear” model until 2025.  Meanwhile, solar stocks soared Friday after new guidance from the Treasury Dept. clarified the clean energy tax incentives that are available to customers installing solar panels.  This included FSLR (+26.48%), ARRY (+16.00%), and ENPH (+4.20%) among others.   After the close, the CEO of PFE told Reuters that negotiating with Medicare over drug prices is like “negotiating with a gun to your head.”  While he said he was unaware of plans Friday, he told the outlet that he expects drug companies to sue in order to block the requirement that drug companies must negotiate the prices they charge.  (This might just be relying on a conservative court system and Supreme Court to lean in favor of business since drug companies already negotiate prices with insurance plans as well as other countries.)

In stock legal and regulatory news, EU antitrust regulators postponed the deadline for their decision on the AVGO proposed $61 billion acquisition of VMW until June 26.  At the same time, HSBC agreed to pay $75 million to settle CFTC (US Commodity and Futures Trading Commission) charges of manipulative and deceptive trading as well as record-keeping failures by the firm.  Meanwhile, China announced their equivalent of a recall, saying TSLA had agreed to fix the software on 1.1 million Model S, Model X, and Model 3 TSLA vehicles (nearly every car the company has ever sold in China).  This is intended to fix a brake failure issue and will be done via over-the-air software updates starting May 29.  (The US NHTSA said it is aware of the problem and is still gathering information related to TSLA vehicles in the US.)  Elsewhere, the business lobby Chamber of Commerce has sued the SEC in an effort to get a new rule forcing corporations to disclose more information about their share buyback programs.  Later, GOOGL agreed to pay the state of TX $8 million to settle claims of deceptive advertising related to the Pixel 4 smartphone.  Toward the end of the day, TSLA Model S and Model X owners sued TSLA over software updates that decreased driving range or caused battery failures in their cars.  The case claims TSLA violated both state and federal laws and has been proposed as a class action suit.  In other auto news, after the close Friday, the NHTSA announced that GM is recalling 1 million SUVs in the US due to the possibility of the airbag inflator exploding during deployment.  This includes the 2014-2017 model years of many different GM brands.  This was part of 67 million airbag inflators that were made by Delphi (which is now owned by ALV) that the company is refusing to recall

In miscellaneous news, the Fed reported Friday that the amount of money parked in money-market funds rose to an all-time high for the second straight week.  Despite this, the Fed also reported that US bank deposits rose in early May, ticking up from the lowest level in two years while bank lending did not change appreciably and remains at that low level.  Elsewhere, in potentially ominous news for the tech industry, China’s largest smartphone manufacturer (Oppo) announced that it is closing its chip design business unit as the global smartphone market continues to decline.  Finally, the Wall Street Journal reported Saturday that AMZN has “optimized” its delivery network.  The redesign results in products having 12% fewer touchpoints prior to being delivered.  At the same time, AMZN is offering US customers $10 to pick up a purchase rather than have it delivered to a home address. 

Overnight, Asian markets leaned to the green side.  Hong Kong (+1.75%), Shenzhen (+1.57%), and Shanghai (+1.17%) led the region higher while Thailand (-1.28%) was the main loser.  In Europe, the bourses are green across the board at midday.  The CAC (+0.48%), DAX (+0.25%), and FTSE (+0.47%) lead the region with Russia (+1.54%) oddly being the largest gainer in mid-afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modest gap higher to start the day.  The DIA implies a +0.36% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.26% open at this hour.  At the same time, 10-year bond yields are up to 3.487% and Oil (WTI) is up 0.57% to $70.44/barrel in early trading.

The major economic news events scheduled for Monday is limited to NY Empire State Mfg. Index (8:30 am) and a Fed speaker (Kashkari at 9:15 am).  The major earnings reports scheduled for the day include CTLT, AZUL, CGAU, and GOGL before the open.  Then, after the close, JHX, NU, and XP report. 

In economic news later this week, on Tuesday, we get April Retail Sales, April Industrial Production, March Business Inventories, March Retail Inventories, API Weekly Crude Oil Stocks report and a Fed speaker (Williams).  Then Wednesday, April Building Permits, April Housing Starts, and EIA Crude Oil Inventories are reported.  On Thursday we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, April Existing Home Sales, Fed Balance Sheet, and Bank Balances with the Fed.  Finally, on Friday, we hear from two Fed speakers (Chair Powell and Williams).

In terms of earnings reports later this week, on Tuesday, BIDU, HD, IQ, SE, TME, CPRT, KEYS, KD, and PTC report.  Then Wednesday, we hear from ARCO, TGT, TJX, SQM, CSCO, STNE, SNPS, TTWO, VSAT, and ZTO.  On Thursday, WMS, BABA, BBWI, CSIQ, DOLE, GRAB, BEKE, MSGE, WMT, AMAT, CVCO, DXC, FTCH, FLO, GLOB, and ROST report.  Finally, on Friday, we hear from DE and FL.

So far this morning, TIO reported beats on both the top and bottom lines.  (Including a surprise 121% revenue beat.)  Meanwhile, TGP beat on revenue (a 117% surprise) while missing on the earnings line.

With that background, it looks like the bulls are looking to make a modest push to start the week. The DIA is poised to retest its T-line from below, while the SPY and QQQ seem to be making modest gains further above their own 8emas. With that said, both of the large-cap indices remain inside their recent sideways chop range of the last week and a half with only the QQQ trending (higher) over that period. None of the major indices are fighting a resistance level right this moment, but all of them have a resistance level not too far above. Over-extension is not a problem yet, either in terms of distance from the T-lines or in terms of the T2122 indicator.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, the large-cap indices gapped modestly lower (down 0.21% in the SPY and down 0.24% in the DIA) while the QQQ opened flat (down just 0.05%).  The Bears followed through in the SPY and DIA, taking price on a rollercoaster ride down to the lows of the day at about 12:10 pm.  Meanwhile, QQQ also sold off but only until 10:30 am when a choppy sideways wave action lasted the rest of the day and left price up off the lows but still below the open.  SPY and DIA followed the QQQ starting at 12:10 pm.  This action left us with indecisive, black-bodied candles in all three indices.  The QQQ printed a Spinning Top, while the two large-cap indices were just black candles with a larger lower wick than the upper wick.

On the day, nine of the 10 sectors were in the red with Financial Services (-1.55%) leading the way lower on regional bank concerns while Utilities (+0.58%) held up better than the other sectors.  At the same time, the SPY lost 0.71%, DIA lost 0.82%, and QQQ lost 0.35%.  VXX climbed 4.89% to 42.06 and T2122 dropped back down into the oversold territory at 10.02.  10-year bond yields climbed slightly to 3.373% while Oil (WTI) was flat on the day at $68.65 per barrel.  So, Thursday was an undecided day with a modest gap down (follow through on Wednesday’s Fed news) in the large caps. This led to choppy, mildly bearish action the rest of the day across the market.  This all happened on just less than average volume in all three major indices.    

In economic news, April Exports increased to $256.20 billion (compared to a March value of $250.90).  At the same time, April Imports fell to $320.40 billion (versus the March reading of $321.50 billion).  As a result, the April Trade Balance fell to $64.20 billion (from March’s $70.60 billion but still above the forecast of $63.30 billion).  In terms of quarterly data, Q1 Preliminary Nonfarm Productivity fell significantly more than expected at -2.7% (as compared to a forecast of -1.8% and the Q4 final value of +1.6%).  This was in large part caused by a significantly higher than anticipated Q1 Preliminary Unit Labor Costs of +6.3% quarter-on-quarter (versus a forecast of +5.5% and a Q4 final number of +3.3%).  Meanwhile, Weekly Initial Jobless Claims were just about as expected at 242k (compared to a forecast of 240k and a prior week’s value of 229k).  Then after the close, the Fed Balance Sheet was reported lower at $8.504 trillion (versus the previous reading of $8.563 trillion or a $59 billion reduction).  At the same time, Bank Reserves held with the Federal Reserve grew to $3.166 trillion versus a previous value of $3.132 trillion).

SNAP Case Study | Actual Trade

In stock news, JNJ’s spinoff IPO KVUE (the largest IPO in a long time) climbed on Thursday in its first day of trading.  The IPO was launched at $22.00 and closed at $25.53 (+17%) which gives it a market cap of $48 billion.  (JNJ still holds a 91.9% stake in the company.)  Elsewhere, Bloomberg reported that MSFT is working with AMD and helping finance the chipmaker’s expansion into AI processors.  At the same time, a German outlet reports that TSLA is actually using batteries from Chinese firm BYD to build Model Y cars in Berlin.  (This makes BYD the fourth external battery supplier for TSLA.)  Elsewhere in Europe, Reuters reports that UBS is considering an IPO to spin off the former Swiss banking operations of CS.  Meanwhile, AFLYY (Air France – KLM) is in talks with APO seeking a $550 million cash injection.  In Asia, Taiwan announced that LMT had informed the country that deliveries of 66 new F-16V fighters ($8 billion sale) will be delayed due to LMT supply chain issues.  The first deliveries had been scheduled for Q4 of 2023.  Finally, the CEOs and other executives of MSFT and GOOGL met with the President and Vice President Thursday.  The companies were told they have a legal responsibility to ensure their products are safe (related to AI inclusion to their products).  The two-hour meeting offered no specific guidelines, rules, laws, or threatened fines.  However, the White House did announce a $140 million investment into the National Science Foundation allowing it to launch seven AI research institutes focused on different aspects of Artificial Intelligence.

In stock legal and regulatory news, US appeals court judges seemed to take SBUX’s side in the coffee chain’s appeal of its loss of an NRLB case that found the company hurt or sought to hurt union organizing efforts by firing seven leaders of the organizing efforts in Memphis, TN.  The judges seemed to ignore the fact that the company fired those people to kill the union effort, instead focusing on the fact that, even after the firings, the Memphis SBUX store did vote to unionize.  Elsewhere, GM pleaded guilty to failing to take adequate safety precautions and thus causing the death of a worker in Canada.  The company agreed to pay a $325,000 fine over the case.  In France, the country’s antitrust agency told META it has two months to change its rules for ad verification partners to avoid being found to be taking unfair advantage of its dominant online advertising market position.  At the close, it was announced that KR has agreed to pay West Virginia $68 million to settle claims related to lax oversight in the opioid epidemic in the state.  Also after the close, AAPL complained that patent owner Arendi had revealed secrets (about how much AAPL paid to settle a patent infringement case) during a separate patent infringement case against GOOGL, violating a confidentiality agreement.  AAPL has asked a court for unspecified damages over the disclosure.

In regional banking news, it was another bleak day in the market for those regional banks.  PACW fell more than 50% on the Wednesday night news that it is “exploring its strategic options.” This opened the floodgates for the shorts to press the group leading WAL to fall 38% (on denied reports by the Financial Times that WAL is exploring a potential sale), FHN to drop 33% (this largely due to the premarket announcement that TD and FHN had called off their merger), and CMA to fall more than 12% for the day.  Still, there were a few winners, on volume, among those regionals.  SI was up 7% and BBD gained almost 2%.  It should be noted that Reuters reported after the close that US federal and state officials are investigating potential “market manipulation” behind recent huge regional banking share moves. 

After the close, AAPL, CNQ, OPEN, ED, EOG, SQ, RGA, BKNG, MSI, NCR, MCHP, LYV, CTRA, SEM, AMN, MNST, DASH, POST, COIN, MATX, CTNT, MTD, LYFT, CNXN, DBX, TDC, NOG, and KE all reported beats on both the revenue and earnings lines. Meanwhile, AIG, BCC, OTEX, COLD, BIO, and BGS all missed on revenue while beating on earnings.  On the other side, LNT, FND, TXRH, TEAM, and DKNG all beat on revenue but missed on earnings.  Unfortunately, GT, RKT, EXPE, BECN, TSE, TDS, USM, AND ERJ all missed on both the top and bottom lines.  It should be noted that OPEN, TPC, LYFT, BIO, and ATSG all lowered their forward guidance while POST, FTNT, and DKNG raised their guidance.

Overnight, Asian markets were mixed.  India (-1.02%), Shenzhen (-0.82%), and New Zealand (-0.67%) paced the losses.  Meanwhile, Hong Kong (+0.50%), Australia (+0.37%), and Malaysia (+0.35%) led the gainers.  In Europe, the bourses are mostly green at midday.  The CAC (+0.47%), DAX (+0.79%), and FTSE (+0.40%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures point to a gap higher to start the day.  The DIA implies a +0.48% open, the SPY is implying a +0.66% open, and the QQQ implies a +0.65% open at this hour.  At the same time, 10-year bond yields are back up to 3.407% and Oil (WTI) is up 2.65% to $70.38/barrel in early trading.  

The major economic news events scheduled for Friday include April Average Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, and April Unemployment Rate (all at 8:30 am).  The major earnings reports scheduled for the day include AES, AMC, AMCX, AEE, AXL, AMRX, BBU, BEPC, BEP, CLMT, CI, CNK, CNHI, D, ENB, EPAM, EVRG, FLR, FYBR, GLP, GTN, HUN, IEP, JCI, LSXMK, LSXMA, MGA, NMRK, OMI, PBF, PAA, PAGP, QRTEA, WBD before the open.  Then, after the close, BAP reports. 

So far this morning, CI, MGA, PBF, JCI, OMI, EVRG, EPAM, BEPC, BEP, CLMT, CNK, AMRX, PNM, and FSK have all reported beats on both the revenue and earnings lines.  Meanwhile, HUN missed on revenue while beating on earnings.  On the other side, FLR, AES, QRTEA, FYBR, and GTN all beat on revenue while missing on the earnings line.  Unfortunately, WBD and UI missed on both the top and bottom lines.  It is worth noting that OMI raised its forward guidance while EPAM and GTN lowered their guidance.

In miscellaneous news, Bloomberg reported Thursday evening that during April, six of every 10 small businesses reported hiring (or trying to hire) new employees.  Related to earnings, as mentioned above AAPL beat on both lines on stronger-than-expected iPhone sales.  However, this was the company’s second consecutive quarterly revenue decline.  The report also showed a record for services including Apple TV+ and iCloud.  The company also announced a $90 billion share buyback program. 

With that background, it looks like the bulls are headed toward the T-line (8ema) in the large-cap indices while the QQQ has already tested and passed back above that level in premarket. Over-extension from the T-lines is not a problem and while T2122 is well into the oversold territory, it is not extremely extended. Don’t forget that we have preliminary April Payroll data this morning and that is likely to impact premarket and the open at the very least. Also, it’s Friday…payday…so pay yourself and get your account ready for the weekend news cycles.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened just on the green side of flat (up 0.11% in the SPY, up 0.12% in the DIA, and up 0.12% in the QQQ).  At that point, we saw a meander sideways dipping up and down until the Fed report.  However, at 2 pm all three of the major indices got very volatile for an hour.  Then a hard selloff took hold for the last hour of the day across the market.  This action gave us black-bodied candles with an upper wick, that closed very near the lows of the day in the SPY, DIA, and QQQ.  If you had squinted and called the prior three candles Evening Stars in those three, then you’d have to say that today we saw bearish follow-through.  All three of the indices are back below their T-line (8ema) with the SPY and DIA back down within 1.5% of their 50sma. 

On the day, eight of the 10 sectors were in the red with Energy (-1.42%) leading the way lower while Healthcare (+0.63%) held up better than the other sectors.  At the same time, the SPY lost 0.69%, DIA lost 0.83%, and QQQ lost 0.65%.  VXX climbed 1.34% to 39.41 and T2122 climbed to just outside of the oversold territory at 20.13.  10-year bond yields dropped again to 3.362% while Oil (WTI) plunged another 4.77% to $68.22 per barrel.  So, to summarize, Wednesday was an undecided, slightly bullish day until the Fed announcement.  Then it got very volatile and the bears took over for good at 3 pm driving us lower into the close.  This all happened on just less than average volume in the SPY and QQQ and right at average in the DIA.     

In economic news, The April ADP Nonfarm Employment Change came in far larger (double) than expected at +296k (compared to a forecast of +148k and the March value of +142k).  Later in the morning, the April S&P Global Composite PMI came in just shy of the anticipated level at 53.4 (versus a forecast of 53.5 but still better than the March reading of 52.3).  At the same time, US April Service PMI also came in just shy of expectation at 53.6 (compared to the 53.7 forecasted but also better than the March value of 52.6).  Then the April ISM Non-Mfg. PMI came in slightly above the anticipated value at 51.9 (versus a forecast of 51.8 and above the March reading of 51.2).  Next, the EIA Weekly Crude Oil Inventories Report showed a slightly larger than expected drawdown of 1.280-million-barrels (versus a forecasted 1.100-million-barrel drawdown but far less than the prior week’s 5.054-million-barrel draw).  However, this was all prelude to the Fed news.

SNAP Case Study | Actual Trade

In Fed news, the FOMC raised rates one-quarter of one percent to a range of 5.00% to 5.25% as was widely expected.  Also, as they have been signaling for some time (to those who want to pay attention), the FOMC opened the door to at least a pause in rate hikes by dropping the language that said “some additional policy firming may be appropriate” and replacing it with “the extent to which additional policy firming may be required would take into account the cumulative tightening of monetary policy.” Then in his press conference, Fed Chair Powell flat out said, “we were no longer saying that we anticipate [some additional policy firming].”  Everything else about the statement and the press conference was normal, always leaving themselves wiggle room and firmly committing to nothing.  However, there were a couple of notable mentions.  Powell said, “The case of avoiding a recession is in my view more likely than that of having a recession.”  Finally, Powell tried to dissuade markets from expecting rate cuts soon by saying “We on the committee have a view that inflation is going to come down not so quickly.” … “It will take some time [for inflation to react to Fed moves that have already been made], and in that world, if that forecast is broadly right, it would not be appropriate to cut rates and we won’t cut rates.”  (Markets seem to be ignoring Powell on that count with Fed Fund Futures pricing in a 70% probability of a rate cut in September.)

In stock news, LLY announced Wednesday that a late-stage trial of its Alzheimer’s drug showed the drug slowed cognitive decline by 35%.  This was a bit better than similar studies from competitors BIIB and ESAIY, whose study found their drug slowed the decline by 27%.  In the car industry, TSLA resumed taking US orders for its Model 3 car at a price that is 18.5% below the August 2022 price.  However, the Model 3 is also eligible for a $3,750 US government tax credit.  Meanwhile, Reuters reported the F is facing another production issue causing three plant closures and an unspecified number of F-150 trucks to be parked unfinished due to a shortage of the correct door handle.  Elsewhere, DRI announced it is purchasing RUTH in an all-cash deal for $715 million.  At the same time, EADSF (Airbus) said Pratt and Whitney (owned by RTX) is having a hard time supplying enough engines and spare parts needed for Airbus to maintain its fleet.  This came after India’s third-largest airline filed for bankruptcy, citing the failure of RTX engines and lack of supplies as a reason. At the close, U announced it will lay off 8% (600 employees) of its workforce.  Also, after the close, OPCH said it is acquiring AMED in an all-stock deal worth $3.6 billion, which would be a 26% premium on the AMED May 2 closing price.  Finally, Bloomberg reported in the early evening that PACW is now “exploring strategic options” as 80% of the regional bank’s loan book is in the commercial and residential real estate markets.  PACW stock fell 60% in post-market trading on the news.

In stock legal and regulatory news, lawyers for HOOD presented arguments in a MA court on Wednesday.  The case is over whether the MA Sec. of State has the right to impose the fiduciary standard that brokers avoid or disclose conflicts of interest to the customer.  (As opposed to “gamifying” trading and selling customer orders to firms that front-run the trades.)  Elsewhere, Britain’s Competition and Markets Authority said on Wednesday that they are investigating the ADBE $20 billion buyout of cloud-based design platform Figma.  A “phase-1 decision” on how to treat the deal is to be announced by June 30.  At the same time, on the side of the pond, the SEC adopted new rules around the transparency of share buyback plans.  Under the new rules, companies will have to disclose average daily share repurchases on a quarterly or semi-annual basis.  Meanwhile, the FTC accused META of misleading parents about protections for children and proposed tightening an agreement with the company that would ban META from profiting off of data from minors.  At day’s end, GOOGL won a jury trial that had accused them of patent infringement related to the retrieval of information from a database.  The jury found the patent invalid since the same technology had been disclosed by others preceding the patent-holders’ claim to that tech.

After the close, ALL, QCOM, AVT, CTSH, CTVA, ZG, APA, WMB, MELI, MRO, EQIX, REZI, OPAD, IR, QRVO, HST, VAC, PSA, CENT, CENTA, VSTO, FLT, CCRN, SEDG, BHE, QGEN, NUS, TTEC, ETSY, CW, ANSS, HUBS, HCC, FG, MMS, MKSI, PARR, QDEL, Z, and SPNT all reported beats on both the revenue and earnings lines.  Meanwhile, ATUS, ATO, GL, ALB, TWI, ULCC, EQH, CODI, and AMED all missed on revenue while beating on earnings.  On the other side, EADSY, MOS, FNF, SIGI, O, WES, CHRD, RUN, and PDCE all beat on revenue while missing on earnings.  Unfortunately, MET, YELL, CPE, GIL, WERN, WES, NVST, TTMI, UGI, and HOUS all missed on both the top and bottom lines.  It is worth noting that QCOM, QRVO, and TTMI lowered their forward guidance, while IR and HST raised their guidance.

Overnight, Asian markets leaned toward the green side on modest moves.  Shenzhen (-0.57%) was the only appreciable loser Thursday while Hong Kong (+1.27%), India (+0.92%), and Shanghai (+0.82%) led the rest of the region higher.  Meanwhile, in Europe, prices are nearly red across the board at midday.  Only Russia (+0.37%) is in the green while the CAC (-0.97%), DAX (-0.83%), and FTSE (-0.83%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.31% open, the SPY is implying a -0.36% open, and the QQQ implies a flat -0.06% open at this hour.  At the same time, 10-year bond yields continue to fall, now at 3.347% and Oil (WTI) is on the red side of flat at $68.47/barrel in early trading as recession fears weigh on markets.  

The major economic news events scheduled for Thursday include March Imports, March Exports, March Trade Balance, Weekly Initial Jobless Claims, Preliminary Q1 Nonfarm Productivity, and Preliminary Q1 Unit Labor Cost (all at 8:30 am), the Fed Balance Sheet and Bank Reserves with the Federal Reserve (both at 4:30 pm).  The major earnings reports scheduled for the day include GOLF, ATI, AEP, BUD, APG, APTV, ARNC, ARW, BALL, BHC, BCE, BDX, BERY, BWA, BV, BRKR, CAH, CG, COMM, COP, CEG, DLX, DNB, EQNR, ES, RACE, FOCS, GTES, GPRE, DINO, HII, H, IBP, ICE, IRM, ITT, JLL, K, KTB, MMP, MLM, MDU, MRNA, MODV, NFE, NJR, NVO, DNOW, NRG, OPCH, OGN, PZZA, PARA, PH, PTON, PENN, PCG, PNW, PLTK, PPL, PRMW, PRVA, PWR, RCM, REGN, RCL, SABR, SBH, SRE, SHEL, FOUR, SWK, STWD, TRGP, TFX, TU, BLD, UPBD, VNT, W, WLK, WRK, XYL, and ZTS before the open.  Then, after the close, ATSG, LNT, AIG, COLD, AMN, AAPL, TEAM, BGS, BECN, BIO, SQ, BCC, BKNG, CNQ, CVNA, ED, CTRA, CWK, DASH, DKNG, DBX, ERJ, EOG, EXPE, FND, FTNT, GDDY, GT, LYV, LYFT, MTZ, MATX, MTD, MCHP, MNST, MSI, NCR, ZEUS, OTEX, OPEN, OEC, CNXN, PBA, POST, KWR, RRX, RGA, RKT, SEM, SHOP, TDS, TXRH, TSE, TPC, and USM report.  

In economic news later this week, on Friday, April Average Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, and the April Unemployment Rate.

In terms of earnings reports later this week, on Friday, AES, AMC, AMCX, AEE, AXL, AMRX, BBU, BEPC, BEP, CLMT, CI, CNK, CNHI, D, ENB, EPAM, EVRG, FLR, FYBR, GLP, GTN, HUN, IEP, JCI, LSXMK, LSXMA, MGA, NMRK, OMI, PBF, PAA, PAGP, QRTEA, WBD and BAP report.

So far this morning, SHEL, CAH, EQNR, MT, BUD, DINO, NVO, MRNA, PCG, WRK, BDX, WCC, BCE, APTV, PWR, SRE, W, REGN, HII, ES, ARNC, APG, XYL, BLD, SBH, VNT, BV, TFX, GOLF, BRKR, MODV, DLX, DNOW, LAMR, FOUR, DDOG, GCI, GEL, PARAA, and RITM all reported beats on both the revenue and earnings lines.  At the same time, COP, SWK, WLK, ZTS, IRM, KTB, OGE, RCM, STWD, and BALL all missed on revenue while beating on earnings.  On the other side, NRG, CEG, AEP, BWA, CG, PENN, H, OPCH, PTON, and PRMW all beat on revenue while missing on earnings.  Unfortunately, PARA, BHC, and NFE missed on both the top and bottom lines.  It is worth noting that DDOG made the only guidance adjustment, raising its forecasts.

In miscellaneous news, Bloomberg reports that TD and FHN have agreed to terminate their $13 billion previously agreed merger.  JNJ priced its KVUE IPO at $22/share and increased the number of shares to be offered to almost 173 million (JNJ will still own 90% interest in KVUE after the IPO, which is expected to close Monday, May 8.  CNBC reported a rumor that AAPL will announce a new $90 billion share buyback program for the year (equal to the 2022 buyback amount).  In the previous decade, AAPL spent more than $572 billion on share buybacks.

With that background, it looks like the bears are now in control in the premarket, especially in the large-cap indices. All three major indices are trading below their T-lines again at this point. Over-extension from the T-lines is not really a problem, though DIA is getting a touch stretched to the downside, and T2122 is back up just outside the oversold territory. So, the pressure to rebound is not heavy yet. With the Fed having told traders what we expected and wanted to hear, we’ve now had the overnight to rethink whether the FOMC and Powell painted too rosy a picture, whether a banking crisis will tip us into a recession, or whether the Wednesday reaction went too far (or not far enough). Don’t be surprised if the Bulls pull a reversal, but don’t bet on it either. Follow trend, don’t predict.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday, markets opened just on the red side of flat again (down 0.18% in the SPY, down 0.15% in the DIA, and down 0.01% in the QQQ).  However, after the tepid open, the bears stepped in to drive a strong selloff that reached the lows of the day at about 11:30 am in all three major indices.  From that point, the rest of the day was a sideways meander with a modest bullish trend.  This action gave us black-bodied candles with large lower wicks in the SPY, DIA, and QQQ.  The QQQ retested and held above its T-line (8ema) while the two large-cap indices closed just below their 8emas.  It also does not take too much imagination to see all three major indices as an Evening Star-type candle.

On the day, all 10 sectors were in the red with Energy (-4.17%) leading the way lower while Basic Materials (-0.40%) held up better than the other sectors.  At the same time, the SPY lost 1.12%, DIA lost 1.02%, and QQQ lost 0.87%.  VXX climbed 4.43% to 38.89 and T2122 dropped down well into the oversold territory to 11.11.  10-year bond yields plummeted again to 3.435% while Oil (WTI) plunged 5.34% to $71.62 per barrel.  So, to summarize, Tuesday was the bears’ day ahead of today’s Fed decision.  This all happened on a little shy of the average volume in all three major indices.     

In economic news, March Factory Orders came in below expectation at +0.9% (versus a forecast of +1.1% but much better than the February reading of -1.1%).  At the same time, the labor market remained strong as March JOLTs Job Openings came in lower than anticipated at 9.590 million (compared to a forecast of 9.775 million and a February value of 9.974 million).  So, Factory activity continues to grow but at a slow pace, while the labor market is slowly tightening, with 400k fewer openings in March than in Feb.  After the close, the API Weekly Crude Oil Stock Report showed a much larger than expected oil inventory drawdown of 3.939-million-barrels (versus a forecast of a 1.000-million-barrel drawdown but still much less than the prior week’s 6.083-million-barrel drawdown.

SNAP Case Study | Actual Trade

In stock news, regional banks took a beating again Tuesday with PACW closing down 27.78%, WAL down 15.12%, and even much larger USB down 7.01% and TFC down 7.61%. Elsewhere, electric vehicle maker MULN announced that has received a 1,000-truck order ($63 million) with first deliveries scheduled to begin in August.  At the same time, Reuters reported the US will announce another $300 million military aid package for Ukraine as soon as today.  The new package will include air-launched rockets, 155mm shells (both made by GD), HIMARS missiles (from LMT), TOW missiles (from RTX) as well as other miscellaneous munitions.  After the close, PNC bank said it can offer $15 billion of its short-term commercial paper (very liquid and generally secure) to calm market worries over liquidity.  This announcement was made even after the bank reported a rise in deposits and profits during Q1.  Finally, despite a blowout success in its quarterly report Tuesday night, F announced it is cutting the price of the Mustang Mach-E again as the price war with TSLA continues.

In stock legal and regulatory news, VMW lost the retrial of its patent infringement case filed by Densify and will pay $84.5 million in the verdict.  (This is much less than the original verdict of $237 million from 2020 which was thrown out on appeal.) Elsewhere, the US SEC will vote today on whether to adopt new rules increasing transparency from the advisors to hedge and private-equity funds. Meanwhile, after the close, AMGN sued NVS for patent infringement over drugs AMGN has sold $5.6 billion of and NVS has now proposed launching generic versions.  At the same time, the White House has summoned the CEOs of GOOGL and MSFT (as well as others) to a Thursday meeting to discuss AI issues and potential regulation.  In bankruptcy news, CNNWQ received court approval to raise $2.26 billion as part of its exit from bankruptcy.  Finally, the US Dept. of Transportation announced Tuesday that it will not extend the July 1 deadline for plane 5G retrofits as had been requested by airlines.  And Airline industry group said this may cause airline operational disruptions during the peak summer travel season.

After the close, F, SBUX, AMD, MUSA, AIZ, CZR, CLX, CWH, AFG, WELL, THG, AXTA, WU, CHK, RNR, LFUS, CRK, JKHY, BFAM, MTW, HY, and UIS all reported beats on both the revenue and earnings lines.  Meanwhile, OKE, ANDE, EIX, AMCR, UNM, YUMC, UFPI, ENLC, EXPI, MTCH, and CLW missed on revenue while beating on the earnings line.  On the other side, PRU, LUMN, VOYA, HLF, SPG, MCY, EXR, and GPOR beat on revenue while missing on earnings.  Unfortunately, ET, SMCI, BXC, and ASH missed on both the top and bottom lines.  It is worth noting that AMCR, MTCH, and ASH lowered their forward guidance.  However, CLX, SMCI, LFUS, JKHY, and PAYC all raised their forward guidance.  (It is also worth noting that F had 62% upside surprise, YUMC had a 61% upside surprise, AIZ had a 55% upside surprise, CZR had a 50% upside surprise, SWH had a whopping 169% upside surprise, THG had an 86% upside surprise, and BFAM had a 44% upside surprise on earnings.)

Overnight, Asian markets were mixed but mostly red.  Hong Kong (-1.18%), New Zealand (-1.08%), and Australia (-0.96%) led the region lower.  Meanwhile, in Europe, the bourses lean heavily to the green side with only three spots of red on the board at midday.  The CAC (+0.68%), DAX (+0.82%), and FTSE (+0.22%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, the Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.11% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.24% open at this hour.  At the same time, 10-year bond yields are down to 3.407% and Oil (WTI) is plummeting again (by 3.07% this time) to $69.47/barrel in early trading.

The major economic news events scheduled for Wednesday include the ADP Nonfarm Employment Change (8:15 am), Services PMI (9:45 am), April ISM Non-Mfg. PMI (10 am), EIA Crude Oil Inventories (10:30 am), FOMC Rate Decision and Fed Statement (both at 2 pm), and Fed Chair Press Conference (2:30 pm).  The major earnings reports scheduled for the day include ADNT, ALGT, AVNT, AVA, GOLD, BDC, BGCP, EAT, BIP, BLDR, BG, CDW, CHEF, CLH, SID, CVS, XRAY, DBD, DRVN, EMR, EL, EEFT, EXC, FTS, GRMN, GNRC, GFF, HBI, HZNP, INGR, JHG, KHC, LPX, MUR, NI, PSN, PSX, RXO, SMG, SBGI, SITE, SR, SPR, STLA, TKR, TT, TRMB, UTHR, VRSK, and YUM before the open.  Then, after the close, ALB, ALL, ATUS, AMED, ANSS, HOUS, APA, ATO, AVT, EQH, BHE, BKH, CPE, CENT, CENTA, CDAY, CHRD, CIVI, COKE, CTSH, CODI, CTVA, CCRN, CW, NVST, EQIX, ETSY, FG, FLT, FNF, ULCC, GIL, GL, HST, IR, IOSP, MRO, VAC, MMS, MELI, MET, MKSI, MOS, NFG, OPAD, PARR, PDCE, PSA, QGEN, QRVO, QCOM, QDEL, O, REZI, SIGI, SEDG, RUN, TWI, TTEC, TTMI, UGI, VSTO, WERN, WES, WMB, XPO, YELL, and Z report.    

In economic news later this week, on Thursday, we get March Imports, March Exports, March Trade Balance, Weekly Initial Jobless Claims, Preliminary Q1 Nonfarm Productivity, Preliminary Q1 Unit Labor Cost, the Fed Balance Sheet, and Bank Reserves with the Federal Reserve.  Finally, on Friday, April Average Hourly Earnings, April Nonfarm Payrolls, April Private Nonfarm Payrolls, April Participation Rate, and the April Unemployment Rate. 

In terms of earnings reports later this week, on Thursday, we hear from GOLF, ATI, AEP, BUD, APG, APTV, ARNC, ARW, BALL, BHC, BCE, BDX, BERY, BWA, BV, BRKR, CAH, CG, COMM, COP, CEG, DLX, DNB, EQNR, ES, RACE, FOCS, GTES, GPRE, DINO, HII, H, IBP, ICE, IRM, ITT, JLL, K, KTB, MMP, MLM, MDU, MRNA, MODV, NFE, NJR, NVO, DNOW, NRG, OPCH, OGN, PZZA, PARA, PH, PTON, PENN, PCG, PNW, PLTK, PPL, PRMW, PRVA, PWR, RCM, REGN, RCL, SABR, SBH, SRE, SHEL, FOUR, SWK, STWD, TRGP, TFX, TU, BLD, UPBD, VNT, W, WLK, WRK, XYL, ZTS, ATSG, LNT, AIG, COLD, AMN, AAPL, TEAM, BGS, BECN, BIO, SQ, BCC, BKNG, CNQ, CVNA, ED, CTRA, CWK, DASH, DKNG, DBX, ERJ, EOG, EXPE, FND, FTNT, GDDY, GT, LYV, LYFT, MTZ, MATX, MTD, MCHP, MNST, MSI, NCR, ZEUS, OTEX, OPEN, OEC, CNXN, PBA, POST, KWR, RRX, RGA, RKT, SEM, SHOP, TDS, TXRH, TSE, TPC, and USM.  Finally, on Friday, AES, AMC, AMCX, AEE, AXL, AMRX, BBU, BEPC, BEP, CLMT, CI, CNK, CNHI, D, ENB, EPAM, EVRG, FLR, FYBR, GLP, GTN, HUN, IEP, JCI, LSXMK, LSXMA, MGA, NMRK, OMI, PBF, PAA, PAGP, QRTEA, WBD, and BAP report. 

In miscellaneous news, fear of another potential pandemic (and potential threat to the poultry supply) is taking shape in the UK.  Thousands of dead wild birds litter England.  The problem is so bad the British government has warned dog walkers to keep their animals on leashes at all times to keep the dogs from eating birds or bird droppings.  The avian flu isn’t contained to the UK either as the USDA has reported at least 170 confirmed cases of mammals (mostly cats and dogs) picking up the disease in the US from this latest wave.  This comes after more than 60 million chickens and turkeys died or were culled to prevent the spread of the last wave in 2022. The good news is that dating back to 1997, there are less than 900 confirmed cases of humans contracting the earlier variants of the avian flu.

So far this morning, CVS, PSX, KHC, BLDR, EXC, EMR, TT, GOLD, FTS, NI, AVNT, GRMN, CLH, GNRC, TKR, EAT, XRAY, PSN, SR, VRSK, JHG, BDC, MUR, CHEF, DRVN, HSC, FDP, and QUAD have all reported beats on both the revenue and earnings lines. Meanwhile, CDW, BIP, INGR, SMG, LPX, TRMB, and UTHR all missed on revenue while beating on earnings.  On the other side, BG, EL, YUM, BLCO, SITE, EEFT, and ALE beat on revenue while missing on the earning line.  Unfortunately, SPR, HZNP, DBD, and AVA missed on both the top and bottom lines.  It is worth noting that CVS, BLDR, and TRMB lowered their forward guidance.  However, KHC, EMR, INGR, TKR, CHEF, and HSC all raised their forward guidance.

With that background, it looks like the large-cap indices are retesting their T-lines (8ema) in the premarket and the tech-heavy QQQ is pushing up away (a bit) from its own. We all know that today will be all about the Fed. So, don’t be surprised with either a dead market or chop going back and forth in an indecisive way right up to 2 pm. Over-extension from the T-lines is not a problem and while T2122 is well into the oversold territory, it is not extremely extended. Don’t get caught predicting the reaction to the FOMC. And, also remember that there tends to be a knee-jerk, followed by a re-reaction…and then an “on second thought” move the next morning when there is a Fed announcement. Be prepared.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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