Big Banks Beat, Michigan Surveys Ahead

Markets opened higher Thursday as SPY gapped up 0.30%, DIA gapped up 0.24%, and QQQ gapped up 0.42% at the open.  At that point, all three major index ETFs sold off, recrossing the gap and reaching the lows of the day about 10:30 a.m.  From there, all three rallied steadily until 2:45 p.m. before limping sideways with a modest bearish trend the rest of the session.  This action gave us a gap-up, white-bodied Spinning Top type candle in the SPY that crossed just back up above its T-line (8ema).  Meanwhile, QQQ gave us a gap-up, large, white-bodied candle that crossed strongly above its T-line.  At the same time, DIA gave us a modest ga-up, black-bodied, Spinning Top and outside day candle.  This happened on just above-average volume in the DIA and below-average volume in the SPY and QQQ.

On the day, only four of the 10 sectors were in the green with Technology (+1.53%) way out in front (by more than a percent) leading the market higher.  Meanwhile, it was Financial Services (-0.52%) was the biggest laggard.  At the same time, SPY gained 0.75%, DIA was flat, gaining 0.01%, and QQQ gained 1.60%.  VXX fell 2.02% to close at very low 13.58 and T2122 climbed out of the oversold territory to remain at the low end of its mid-range at 23.53.  10-year bond yields climbed again to 4.582% and Oil (WTI) fell 0.71% to $85.60 per barrel.  So, Thursday, saw a more modest reaction to the upside on good PPI data after Wednesday’s strong reaction to the downside on bad CPI data.  However, we also saw some whipsaw with a rejection of the gap and then a slow, steady reaffirmation of the gap sentiment. 

The major economic news scheduled for Thursday included the Weekly Initial Jobless Claims, which came in a bit lower than expected at 211k (compared to a 216k forecast but down from the prior week’s 222k).  For ongoing claims, Weekly Continuing Jobless Claims were higher at 1,817k (versus a forecast of 1,800k and up from the prior week’s 1,789k).  At the same time, the March Core PPI (month-on-month) were as predicted at +0.2% (compared to a +0.2% forecast and down from February’s +0.3%).  On an annual basis, March Core PPI actually increased to +2.4% (versus a +2.3% forecast and the February +2.1% reading).  On the headline side, March PPI (month-on-month) was lower than anticipated at +0.2% (compared to a +0.3% forecast and well down from February’s +0.6%).  On an annual basis, March PPI was lower than predicted at +2.1% (versus a forecast of +2.2% but well of up the +1.6% in March 2023).  After the close, the Fed Balance Sheet was reported as down $2 billion on the week at $7.438 trillion (compared to the prior week’s $7.440 trillion).

In FOMC speak, Thursday, NY Fed President Williams told a banking group that they (banks) should be ready to tap the Fed liquidity using the Fed Discount Window if or when they face liquidity crunches.  Williams also said he still expects progress on inflation, although he believes there will be “bumps along the way.”  Later, Boston Fed President Collins stuck to the FOMC script, saying she sees no urgency to cut rates.  Collins said, “I do expect it will be appropriate to begin lowering the federal funds rate later this year,” … (However) “recent data suggest it may take more time than I had previously thought to gain greater confidence in inflation’s downward trajectory, before beginning to ease policy.” Collins went on to say she had “Less concern about labor market fragilities, combined with the possibility that policy is only modestly restrictive, also reduces the urgency to ease.”  Elsewhere, Richmond Fed President Barkin said that “the latest numbers (it is unclear if this included PPI but did include CPI) did not increase my confidence” that price pressures are easing on a broad basis (which would be the prerequisite for his voting to cut rates).

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In stock news, on Reuters reported Thursday that Norway’s largest pension fund (KLP) is planning to ask TSLA to begin collective bargaining at the upcoming shareholder meeting.  The crux of the issue is the Swedish TSLA mechanics strike, but the fund said the issue of collective bargaining was a broader issue.  Later, VLVLY (Volvo and Mack Truck) said it will build a new heavy-duty truck plant in Mexico to supplement its US production.  The plant is scheduled to be operational in 2026.  At the same time, Bloomberg reported that private equity firm Clearlake is in talks for another attempt to take BLKB private.  (Clearlake already owns 18.9% of BLKB.)  Elsewhere, Bloomberg also reported that AAPL is “nearing” an overhaul of its Mac computer line which would gain AI processing capability due to a new ARM-based CPU labeled “M4.”  Bloomberg says AAPL is expecting to unveil this new line at its June developer’s conference.  (Mac sales fell 27% in the fiscal year ended in September.  It unveiled new M3 Macs in October.)

Later, F announced it will begin shipping 144k redesigned F-150 and Ranger pickups to dealers.  The trucks were built, but held back until now to deal with quality problems.  (F spent $4.8 billion in 2023 to deal with warranty repairs.) At the same time, F reduced prices on various F-150 Lightning electric trucks by as much as $5,500.  Later, ADM expanded its recall of animal feed due to harmful levels of magnesium, calcium, sodium, and/or phosphorous.  At the same time, LUV told Reuters its expected deliveries of BA jets keep shrinking.  In March, LUV said they expected 46 new 737 MAX planes in 2024.  Now it expects only 20 of the planes this year, which will significantly impact operations.  This impacts not only capacity, but also costs since older jets cannot be retired and are more expensive to maintain.

In stock legal and governmental news, on Thursday, the FAA issued a public notice of an airworthiness directive for BA 747-400F jets.  The directive would force all such jets to have cap seals to fastener collars inside the plan’s fuel tanks.  This came after FAA 737 investigations identified that BA had not been applying cap seals during production in order to cut costs.  At the same time, HPQ was hit with a trademark infringement suit from WEX, alleging HPQ is infringing on its trademark by naming a software product “HPQ Wex.”  Later, China sanctioned GD and a privately-held firm (General Atomics Aeronautical Systems) for selling arms to Taiwan.  (China seized and froze property of the two companies over the arms sales.)  At the same time, Reuters reported that UBS will need to retain between $10 billion and $15 billion in additional capital to meet new capitalization requirements from the Swiss government. This could put a “serious dent” in UBS share buyback plans for 2024.  Later, BHC won the appeal of the verdict which barred rival Alvogen from marketing a proposed generic version of Bausch’s diarrhea treatment until 2029.

Meanwhile, the EU announced it will decide on approval of Nippon Steel’s acquisition of X by May 17.  However, the approval is just a formality since neither company is headquartered in Europe and there are no competition concerns with either company at this time.  At the same time, the Wall Street Journal reported that MS is under investigation by multiple regulators, including the SEC, Office of the Comptroller of Currency, and various Treasury Dept. sub-agencies.  The investigations stem from the bank’s “lax” vetting of potential wealth management clients (true identities and how the client’s raised their wealth) focusing on foreign clients.  Elsewhere, Wednesday’s EPA announcement of new limits on toxic forever chemicals (PFAS) in water is expected to lead to a huge surge in lawsuits against MMM, DD, CC, CTVA, DOW, and other chemical makers who have dumped the chemicals into US waterways and ground water for decades.  (MMM settled a $10.3 billion suit with some US water systems in 2023, while CC, DD, and CTVA settled their own suit for $1.19 billion.  The EPA has given water utilities three years to meet strict “less than 10 parts per trillion” PFAS guidelines.  So, many new suits are expected as local water systems are unable to pay for the mitigation needed to remove PFAS from their water.  (PFAS are linked to many health conditions including liver problems, cholesterol level change, immune system deficiencies, high blood pressure, certain cancers, and many others.  The impacts are dosage and individual dependent.)

Overnight, Asian markets were nearly red across the board, with only Japan (+0.21%) in the green.  Meanwhile, Hong Kong (-2.18%), India (-1.03%) and South Korea (-0.93%) led the region lower.  However, in Europe, we see a green sweep across the board at midday.  The CAC (+0.73%), DAX (+0.79%), and FTSE (+1.10%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing to a down start to the day.  The DIA implies a -0.32% open, the SPY is implying a -0.44% open, and the QQQ implies a -0.59% open at this hour.  At the same time, 10-year bond yields are “down” to 4.526% and Oil (WTI) is up 1.14% to $85.98 per barrel in early trading.

The major economic news scheduled for Friday includes March Import Price Index and March Export Price Index (both at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.).  Fed member Bostic also speaks at 2:30 p.m.  The major earnings reports scheduled for before the open include BLK, C, JPM, PGR, STT, and WFC.  Then, after the close, there are no major reports scheduled.

So far this morning, BLK, JPM, STT and WFC have all reported strong beats on both the revenue and earnings lines.  (C and PGR report closer to the opening bell.)  It is interesting to note that JPM is down sharply on this very good news.  WFC was even more volatile in the premarket but has settled on the green side after its report.  BLK and STT just gained on their beats, with BLK up 2.5% and STT up 3.75% so far on the news in the early session.

In energy news, on Thursday, Reuters reported that the UAE’s national oil company recently held talks with an aim toward acquiring BP.  Ultimately, the UAE decided BP would not be the right strategic fit.  However, this raises the idea that the incredibly deep-pocketed company could target any oil major if it was considering the $112 billion market cap BP.  In other energy news, the Interior Dept. announced on Thursday that it had surpassed its goal of permitting 25 gigawatts of clean energy projects for public lands by 2025.  As of now, the agency said they have permitted 29 GW of projects on public lands or enough to power 12 million homes.  32 GW of new projects are at various stages of approval.

In miscellaneous news, Rho Motion (market research firm) reported Thursday evening that global electric vehicle sales rose 12% during March (compared to March 2023). However, the increase was uneven with China seeing a 27% increase, the US a 15% increase, but Europe seeing a 9% decrease versus the prior year.  The firm had earlier predicted a 25% to 30% increase in 2024 but now says it anticipates EV sales to come in at the lower end of its projections.  Elsewhere, both the largest US airlines and their unions have asked President Biden to not approve any more flights between the US and China because of what they call “anti-competitive” policies that China is imposing on US air carriers.  (In addition, Chinese airlines are allowed to fly shorter routes between the two countries by flying through Russian airspace, which US airlines cannot do.)

With that background, it looks as if the Bears are in control again this morning. All three major index ETFs have printed modest (but certainly not small) black body candles to begin the premarket. The QQQ remains above its T-line (8ema) while the SPY has crossed below and DIA remains below their respective T-lines. So the short-term trend mostly bearish. Meanwhile, the mid-term remains sideways in a choppy consolidating range in the SPY and QQQ, where it is fair to say the Bulls are under strong pressure from the Bears. However, the DIA has already turned Bearish in the mid-term. Longer-term, markets remain Bullish but clearly under pressure. In terms of extension, none of the major index ETFs are too far away from their T-line. In addition, the T2122 indicator is now out of the oversold range but remains at the low end of its mid-range. So, both sides still have some room to run but clearly the Bulls have more slack to play with. In terms of those 10 big dog tickers, eight of the 10 are in the red again this morning with only NFLX (+0.29%) and AMZN (+0.03%) hanging onto the green area. With that said, remember its Friday…pay day…so prepare your account for the weekend news cycle and don’t forget to cut yourself a check. (Tax day is Monday.)

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

STZ Beat, KMX and FAST Miss, As PPI is On Tap

On Wednesday, stocks gapped down after a tick upward in the CPI number.  The SPY gapped down 1.11%, DIA gapped down 1.02%, and QQQ gapped down 1.22% at the open.  However, from there, all three major index ETFs chopped sideways, wobbling along the opening level the rest of the day. This action gave us gap-down, indecisive candles in all three.  The SPY printed a white-body Doji, the DIA printed a black-body Doji, and the QQQ printed a white-body Spinning Top.  SPY and QQQ also gapped down through and remained below its T-line (8ema). This happened on above-average volume in the DIA and QQQ while SPY printed slightly below-average volume.

On the day, nine of the 10 sectors were in the red as Utilities (-2.15%) was out in front leading the market lower.  Meanwhile, Energy (+0.15%) was the only green sector and held up much better than the other sectors.  At the same time, SPY lost 1.00%, DIA lost 1.11%, and QQQ lost 0.87%.  VXX gained 1.91% to close at a still very low 13.86 and T2122 plummeted down into the oversold territory at 10.53.  10-year bond yields spiked again to 4.548% and Oil (WTI) popped another 1.15% to $86.22 per barrel.  So, on Wednesday, saw significant gap lower but then almost nothing except modest chop sideways the rest of the session. 

The major economic news scheduled for Wednesday included March Core CPI (month-on-month), that came in flat which made it a tick hotter than expected at +0.4% (compared to +0.3% forecast and a +0.4% February reading).  On an annual basis, March Core CPI also came in flat at +3.8% (versus to a forecast of +3.7% and the Feb. +3.8% value).  This led to a March CPI (month-on-month) of +0.4%, again flat but hotter than expected compared to a forecast of +0.3% and a February +0.4%.  On an annual basis, March CPI was +3.5% (compared to a +3.4% forecast and a up from the February +3.2% number).  Later, EIA Weekly Crude Oil Inventories rose more than was predicted at +5.841 million barrels (versus a forecasted 0.900-million-barrel build, and even more than the prior week’s 3.210-million-barrel inventory build).  Later yet, the March Federal Budget Balance showed a larger than anticipated deficit of -$236.0 billion (compared to a -$209.4 billion forecast but well down from the February -$296.0 billion level).  However, to be fair the federal deficit was down 38% from $378 billion in March 2023 on both reduced spending and increased tax receipts.

In FOMC speak, the March FOMC Meeting minutes showed that Fed members were already disappointed prior to the recent (since the meeting) strong economic/inflation data.  However, the “typical policymaker” still felt three cuts in 2024 was going to be appropriate, despite their disappointment.  With that said, the minutes shows that the momentum toward fewer cuts in 2024 was already gathering some speed.  That was the “gist” of the rate discussion.  In terms of the Fed Balance Sheet, the minutes made it clear the FOMC will soon stop the reduction.  Policymakers were mostly thinking that in light of the lessons learned during the 2017-2019 tightening, it would be prudent to start easing the current reductions soon.  (The Fed has averaged $76 billion per month in drawdown over the last 12 months.) The minutes said, “Participants generally favor reducing the monthly pace of runoff by roughly half from the recent overall pace.”  The discussion showed that, in part, this would be because it would give more flexibility to the Fed in how it reduces “non-treasury bond holdings.”  (A primary goal of most Fed members is to get as near to an “all treasuries” balance sheet as possible.

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In stock news, on Wednesday, the Wall Street journal reported that RBLX partnered with PUBM to increase video ad sales on its gaming platform.  (RBLX has 71 million daily users.)  Later, META unveiled it new in-house developed AI accelerator chip to be built on a 5nm process and produced by TSM.  (META still has planned to acquire about 350,000 NVDA AI accelerator chips this year.)  At the same time, UBER announced new security measures aimed at boosting (mostly female) passenger safety in the face of many lawsuits alleging UBER was deficient in preventing attacks (including by drivers) on passengers.  Later, Bloomberg reported that AMZN will stop paying developers to create applications for its Alexa devices/services in June.  At the same time, UMGNF (Universal Music Group) announced a partnership with Chinese Entertainment Company TF Entertainment which will add Chinese “C-Pop” performers to the service’s global offerings.  Later, DAL said it expects record Q2 revenue on the expectation of a summer travel boom. 

Elsewhere, STLA told (threatened?) Italian government officials Wednesday, that if Chinese automakers were allowed to open plants in Italy, the company would have to make unpopular decisions such as closing Italian plants.  The CEO of STLA said, “If we are under pressure, the only one thing we could do is to accelerate our efforts to increase productivity to be competitive.” (He implied that labor is much cheaper in other parts of the world.)  He continued, “Then we might not need so many plants as we have now.”  Later, VRTX announced it will buy ALPN for $4.9 billion in cash in order to gain access to the company’s kidney autoimmune disease treatment.

In stock legal and governmental news, on Wednesday, Reuters reported that Vietnam had ordered NFLX to stop advertising and distributing its games in the country before April 25.  (Vietnam has not granted NFLX a license for gaming services.)  Later, a trade group representing AAL, DAL, UAL, and LUV wrote a letter to the FAA asking for even more of an extension (to October 2025) of the waver they’ve gotten to “minimum flight requirements” at NY airports.  The airlines say they are still facing pilot shortages and the air traffic control system is also still facing staff shortages.  (Under the rules, airlines lose their gate assignments and runway slots if they do not average at least 80% usage of the assigned resources. The airlines have already been granted waivers and then had them extended through October 2024.  Now the airlines want another year to get back to normal flight capacities.  At the same time, the Dept. of Justice (and 15 states) antitrust lawsuit against AAPL over its US smartphone app store monopoly was reassigned to a new judge in NJ after the original judge recused himself over a conflict of interest. 

Meanwhile, the NTSB said the Sunday LUV in-flight loss of an engine cowling on a BA 737-800 was due to a maintenance quality problem the night before the incident.  LUV is solely to blame for the aborted flight.  At the same time, the SEC notified private software developer Uniswap of potential action.  (Uniswap was the main developer of the COIN crypto-exchange, although what action the SEC could take against them is uncertain.)  Then, after the close, Politico reported that the Dept. of Justice has formally opened an antitrust probe into the Nippon Steel $14.1 billion acquisition of X.  At the same time, AAPL employees at a company store in NJ filed with the NLRB to get a unionization vote.  Later, the Dept. of Justice files suit in federal court accusing REGN of fraudulent price reporting related to macular regeneration drug Eylea.  The allegations are that REGN inflated the “average sales price” reported to Medicare for reimbursement. 

Overnight, Asian markets were mixed but leaned red in modest trading.  Thailand (-0.84%) was by far the biggest mover and led eight of the 12 exchanges lower.  On the upside, India (+0.49%) led the four gaining exchanges.  In Europe, the bourses are nearly red across the board at midday, with only two of 15 exchanges green.  The DAX (-0.60%), CAC (-0.19%), and FTSE (-0.23%) lead the region lower in early afternoon trade.  As of 7:30 a.m., in the US, Futures are pointing to a down open ahead of PPI data.  The DIA implies a -0.28% open, the SPY is implying a -0.29% open, and the QQQ implies a -0.22% open at this hour.  At the same time, 10-year bond yields are up slightly again to 4.554% and Oil (WTI) is off a half of a percent to $85.76 per barrel in early trading.

The major economic news scheduled for Thursday includes the Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, March Core PPI, and March PPI (all at 8:30 a.m.), and Fed Balance Sheet (4:30 p.m.).  We also hear from Fed members Williams (8:45 a.m.) and Bostic (1:30 p.m.).  The major earnings reports scheduled for before the open are limited to KMX, STZ, and FAST.  Then, after the close, there are no major reports scheduled.

In economic news later this week, on Friday March Import Price Index, March Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.  Fed member Bostic also speaks.

In terms of earnings reports later this week, on Friday, we hear from BLK, C, JPM, PGR, STT, and WFC.

So far this morning, STZ reported beats on both the revenue and earnings lines.  However, KMX and FAST both reported misses on both the top and bottom lines.

In miscellaneous news, on Wednesday, two of the “Big 4” global accounting firms, KPMG and Deloitte, were hit with $25 million in civil penalties and had senior managers barred, in response to “egregious and widespread cheating on auditor certification tests.  (This was just the latest in a long string of auditor companies and their employees helped colleagues obtain internal certifications to be public auditors by sharing test answers.)  Meanwhile, the US Senate voted 53-47 to overturn Federal Highway Administration rules that had set declining targets on greenhouse gas emissions from vehicles on federal highways to near zero by 2050.  (The House has yet to vote on the measure, but if the Democratic Senate voted in favor of the industry position, the House should be an easy pass.)  On the House side of capitol hill, the Freedom Caucus (MAGA) vocal minority killed a GOP bill to reauthorize for five years the Foreign Intelligence Surveillance Act reauthorization measure.  (FISA authorizes warrantless surveillance of foreign intelligence suspects and this bill also imposes some reforms.)  The killing of a procedural vote on the bill came after the MAGA leader called on his minions to kill the bill as he wanted to lean into “deep state” conspiracy theories on the campaign trail.  For his part, after a fourth defeat of his short tenure, House Speaker Johnson vowed to forge ahead even after 19 GOP members jumped shipped and voted with Democrats. (This was ironic since at is one of the group’s biggest complaints about Johnson is that he is too willing to work with Dems.)

In market expectations news, after the March CPI data was reported and had a day to be digested, the Fedwatch tool shows us that as of this morning, only 96.0% of Fed Fund Futures bets are on “no change in rates” at the next (May 1) FOMC meeting. This is actually down 4% from the pre-CPI probabilities.  The other 4% are expecting a quarter-point rate cute on May 1.  For the June 12 meeting, probabilities are showing 83.1% of contracts expecting no cut (up from the 40.8% predicting no cut prior to the CPI data).  16.4% still expect a quarter-point cut in June while 0.5% expect a half percent cut at that meeting.  The July 31 meeting now shows 55.6% expecting no rate change by then.  (This is up from just 24.4% of traders anticipating no change in rates at the July meeting prior to CPI data.)  38.4% expect a quarter point cut in July, 5.8% expect a half-point cut by then, and 0.2% expect a three-quarters of a percent cut by July31.  Even further out, 67.3% of fed fund futures bets predict at least a quarter point rate cut by September 18 with 32.7% hanging onto the belief rates will remain where they are now.  Interestingly, even out in December 13.2% of bets have been placed on no rate cut during 2024.  However, there has not been a single Fed futures bet of any additional rate hikes this year either. 

With that background, it looks as if the Bears are in control again this morning. All three major index ETFs have gapped lower and then printed modest (but certainly not small) black body candles to begin the premarket. All three are also below their T-line (8ema). So the short-term trend is bearish. Meanwhile, the mid-term remains sideways in a choppy consolidating range in the SPY and QQQ, but the DIA has also turned Bearish in the mid-term. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line. However, the T2122 indicator is now in the middle of its oversold range. So, both sides still have some room to run but clearly the Bulls have more slack to play with. In terms of those 10 big dog tickers, eight of the 10 are in the red with only MSFT (+0.31%) and AAPL (+0.13%) hanging onto the green area ahead of PPI data. Speaking of which, remember that while PPI hits today (and may reinforce the bad feeling from CPI yesterday), it is not likely to have as much impact. In either case, earnings season starts again in earnest tomorrow morning. So, we may still see more waiting and drifting after any open fireworks.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

DAL Beats with CPI on the Way

Markets opened higher on Tuesday as the wait on CPI data continued.  SPY gapped up 0.35%, DIA opened 0.14% higher, and QQQ gapped up 0.55%.  However, at that point traders faded the gap finally recrossing it in all three major index ETFs at 10:30 a.m. and continuing south until they reached the lows of the day at 10:55 a.m.  From there, all three slowly and modestly rallied in an uneven way the rest of the day with a spurt the last 5 minutes of the session.  SPY and QQQ crossed back into their morning gap while DIA closed just below the Monday close.  This action gave us black-bodied, long-handle Hammer candles in the SPY, DIA, and QQQ.  SPY and QQQ crossed back up above their T-line (8ema) while DIA remains close below its T-line. 

On the day, six of the 10 sectors were in the green as Basic Materials (+0.61%) was out in front leading the market higher.  Meanwhile, Financial Services (-0.34%) was by far the weakest sector.  At the same time, SPY gained 0.12%, DIA lost 0.07%, and QQQ gained 0.37%.  VXX lost 0.73% to close at a very low 13.60 and T2122 rose but remains in its mid-range at 75.60.  10-year bond yields fell a bit to 4.358% and Oil (WTI) fell 1.25% to $85.34 per barrel.  So, Tuesday saw considerable volatility that mostly came to nothing.  At one point, all three major index ETFs were Evening Star signals, but all of them ended up as Hammers.  The way I read it, is just two groups making unsupported bets ahead of the CPI data.  This all happened on slightly above-average volume in the DIA, slightly below-average volume in the QQQ, and well below-average volume in the SPY. 

The only major economic news scheduled for Tuesday was the API Weekly Crude Oil Stocks after the close, which came in with a larger inventory build than expected at 3.034 million barrels (compared to a +2.415-million-barrel forecast and much bigger than the prior week’s 2.286-million-barrel drawdown).

In FOMC speak, Atlanta Fed President Bostic reconfirmed his early 2024 expectation that there will only be one rate cut in 2024.  However, he also said he’s willing to changing his mind…either in terms of more than one cut in 2024 or none this year.  Yet, he reiterated that his base case it that there will be one cut in 2024.

After the close, PSMT reported beats on both the revenue and earnings lines.  At the same time, WDFC missed massively on revenue while beating on earnings.

Click for video

In stock news, on Tuesday, Bloomberg reported that BX is considering providing the financing for a $5.5 billion French cosmetics firm to go private (L’Occitane).  At the same time, JPM told its customers that sources tell it that AVGO recently won deals from GOOGL and META to produce and supply more than $9 billion in AI chips during the second half of 2024.  (Overall, JPM said the deals should account for $12 billion in AI chip sales for AVGO.)  In unrelated but simultaneous news, GOOGL announced the details of its new ARM-based AI chips made by NVDA.  These new chips are available to customers via GOOGL’s cloud computing services.  Shortly afterward, MSFT said it would invest $2.9 billion to expand its cloud AI infrastructure in Japan over the next two years.  Later, BB announced a deal with AMD to “revolutionize” BB’s robotics systems.  At the same time, BA announced it delivered only 29 planes in March (down more than half from the 64 planes in March 2023).  This capped a quarter where Ba delivered 83 jets.  At the same time, EADSY (Airbus) announced Q1 deliveries rose 12% to 142 aircraft.

Elsewhere, Reuters reported that a cancer therapy developed by MRNA and MRK showed “positive results” for early-stage head and neck melanoma in a newly announced study. Later, INTC announced details of a new version of its AI chip aimed at taking on NVDA.  (INTC used TSM’s 5nm process to build the new chips and will offer the chips via servers built by SMCI and HPE by the end of Q2.)  At the same time, GM said it will resume operations of its “Robotaxi” unit Cruise with a small fleet of human-driven taxis in Phoenix AZ.  Later, HSBC announced it is selling its Argentina unit and will book a $1 billion loss from the deal.  After the close, NVS announced it will cut 680 jobs in its sales organization globally.  This includes 240 in the US and 440 in the company home base of Switzerland.  (This is separate from previously announced 7,000-8,000 jobs being cut due to restructuring.)

In stock legal and governmental news, on Tuesday TSLA settled a lawsuit (for an undisclosed amount) with the family of an AAPL engineer who died while using the TSLA Autopilot feature.  At the same time, the EPA announced the finalized rules for the reduction of cancer-causing emissions from chemical plants.  (The rules apply to 200 large chemical plants, mostly located along the gulf coast in Chemical Alley around Louisianna. (The industry-influenced rule will reduce a plant’s emissions of certain cancer-causing chemicals to 23,700 tons per year.  Later, NSC agreed to pay $600 million to settle a class action lawsuit over its responsibility for the derailment and chemical spill at East Palestine OH in February 2023.  (The settlement is still subject to court approval.)  At the same time, a three-judge panel of the District of Columbia US appeals court upheld the EPA’s decision to allow the state of CA to set its own (stricter) tailpipe emissions and electric vehicle requirements. 

Meanwhile, a hacking group claimed Tuesday to have UNH’s stolen data from its eight-terabyte ransomware hack in February.  (The FBI did not comment, but Reuters reported a hacking hub reported a disgruntled hacker provided the data after a botched $22 million payment allowed their partner hackers to disappear with the bitcoin paid.)  At the same time, META reported that Malaysia has increased its requests to restrict short video content.  (51,638 requests in Q1 2024 versus 42,904 requests in all of 2023.)  Later, Reuters reported that the FAA is investigating allegations that BA whistleblowers have been retaliated against after voicing quality concerns on 787 and 777 model jets.  Elsewhere, a US federal court issued a consent decree forcing PHG to restrict the sale and production of sleep apnea machines following an FDA request.  PHG can no longer sell breathing devices in the US until it complies with FDA concern over noise dampening foam degrading to become toxic and cancerous to users. 

Overnight, Asian markets were mixed.  Hong Kong (+1.85%) was the biggest mover and along with Singapore (+0.67%), and India (+0.49%) paced the gainers.  On the other side, Shenzhen (-1.60%), Shanghai (-0.70%), and Japan (-0.48%) led the losses.  However, in Europe, we see green across the board at midday.  The CAC (+0.61%), DAX (+0.85%), and FTSE (+0.69%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly green start to the day (ahead of CPI).  The DIA implies a +0.17% open, the SPY is implying a +0.10% open, and the QQQ implies a +0.06% open at this hour.  At the same time, 10-year bond yields are down to 4.35% and Oil (WTI) is up two-thirds of a percent to $85.77 per barrel in early trading.

The major economic news scheduled for Wednesday includes March Core CPI and March CPI (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), March Federal Budget Balance and FOMC Meeting Minutes (2 p.m.).  Fed Governor Bowman also speaks at 8:45 a.m.  The major earnings reports scheduled for before the open are limited to DAL.  Then, after the close, there are no major reports scheduled.

In economic news later this week, on Thursday we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, March Core PPI, March PPI, Fed Balance Sheet as well as Fed members Williams and Bostic speaking.  Finally, on Friday March Import Price Index, March Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.  Fed member Bostic also speaks.

In terms of earnings reports later this week, on Thursday, KMX, STZ, and FAST report.  Finally, on Friday, we hear from BLK, C, JPM, PGR, STT, and WFC.

So far this morning, DAL reported beats on both the revenue and earnings lines. 

In miscellaneous news, on Tuesday, an industry group of steelmakers (World Steel Assn.) announced that it expects global steel demand to rise 1.7% in 2024 and to increase further in 2025.  This comes after two years of pandemic-induced declines.  India is expected to be the main driver of the increase in 2024 as Chinese demand is projected to continue declining.  The group also expects growth in the US market after a 2023 slowdown the group says was caused by a housing market slowdown.  At the same time, Reuters reported that Nasdaq short-interest rose 1.2% during the second half of March to 12.183 billion shares (up from 13.022 billion short as of March 15). On the NYSE, Reuters reports the short interest only rose 0.3% over the same period, from 16.051 billion shares to 16.103 billion at the end of March.

In market rate expectations news, ahead of the CPI number, the Fedwatch tool shows us that as of this morning. 100.0% of Fed Fund Futures bets are on no change in rates at the next (May 1) FOMC meeting.  The June meeting probabilities are showing 59.2% of contracts expecting a quarter point cut by Mid-June.  However, 40.8% predict no cut on June 12.  Even the July 31 meeting shows 24.4% of traders anticipate no change in rates by then, while 51.8% expect a quarter-point cut before August and 23.9% expect a half percent or more of cuts by that date. 

With that background, it looks as if the market is very slightly bullish but mostly undecided prior to the CPI data release. All three major index ETFs are just on the green side of flat, but are printing small-body, indecisive candles in the premarket. The SPY and QQQ are both above their T-line (8ema) in the early session, while DIA is just below its T-line and moving toward a retest. (DIA is showing us the most bullish of the early session candles with the largest white body…although it still is not a decisive move.) So the short-term trend is bullish. Meanwhile, the mid-term remains sideways in a choppy consolidating range. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line and the T2122 indicator remains in top end of its mid-range. So, both sides still have plenty of room to run if they can find momentum. In terms of those 10 big dog tickers, they are evenly split so far this morning with the two biggest movers being INTC (+0.81%) and GOOGL (+0.80%). However, by far the biggest market mover is NVDA (-0.56%) and it is pacing the losses of the five down tickers among that group of 10. Finally, remember that while CPI hits today, earnings season starts again in earnest on Friday morning. So, we may still see more waiting and drifting after the CPI knee-jerk.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

The Wait on CPI and Earnings Begins

Markets opened higher on Friday after strong but unsurprising March Jobs data.  SPY gapped up 0.28%, DIA opened 0.10% higher, and QQQ gapped up 0.37%.  After that open, all three major index ETFs rallied steadily until 1 p.m.  Then we saw a modest selloff for 60 minutes.  Finally, we got a two-hour sideways grind into the close in all three.  This action gave us Bullish Harami signals in the SPY, DIA, and QQQ. SPY and QQQ both retested their T-lines (8ema) from below and failed to close above, but did close very near that level.  DIA was clearly the weakest again.  This all came in with just below-average volume in the SPY and slightly above-average volume in the QQQ and DIA.  This gave us a bearish week with SPY down 0.89%, QQQ down 0.80%, and DIA again the weakest, down 2.24%.

On the day, all 10 sectors were red as Technology (-1.57%) was out in front leading the market lower. Meanwhile, Utilities (-029%) and Energy (-0.29%) held up better than the other sectors.  At the same time, SPY lost 1.21%, DIA lost 1.32%, and QQQ lost 1.53%.  VXX spiked up 4.79% to close at a still low 14.00 and T2122 dropped but remains in its mid-range at 30.67.  10-year bond yields fell a bit to 4.311% and Oil (WTI) rose another 1.40% to $86.64 per barrel (as Ukrainian attacks take more and more Russia oil infrastructure under drone attack).  So, Thursday saw a major reversal and the first big down day since the end of January.  This move was clearly brought on by nothing more than Fed talk.  This all happened on slightly above-average volume in the SPY and QQQ with DIA having the largest volume (relative to average) but still only the highest volume in a week. 

The major economic news scheduled for Friday included March Avg. Hourly Earnings (year-on-year), which came in as expected at +4.1% (compared to a +4.1% forecast but down from February’s +4.3% value).  Interestingly, on a month-on-month basis March Avg. Hourly Earnings also came in as expected at +0.3% (versus the +0.3% forecast but up a tick from February’s +0.2% reading).  At the same time, the March Nonfarm Payrolls were very strong at +303k (compared to the +212k forecast and even more than February’s +270k).  The same was true of March Private Nonfarm Payrolls, which were +232k (versus the +160k forecast and even the February +207k value).  The March Participation Rate ticked up to 62.7% (compared to the 62.6% forecast and up two ticks from the February 62.5%).  Altogether, this meant the March Unemployment Rate dropped to 3.8% (versus the 3.9% forecast and February value).  Later, February Outstanding Consumer Credit also came in better than expected at $14.12 billion (compared to a forecast of $16.20 billion and the well down from the January $17.68 billion reading).  So, jobs creation remains very strong and well above the 12-month average.  However, it is also important to know that the numbers above (+303k) are full-time equivalents that are made up in very large portion by part-time jobs as businesses continue to work hard to avoid needing to pay benefits to reduce costs.  In fact, 691k part-time jobs were created in March, with 5.2% of the total workforce holding multiple jobs.

In FOMC speak, Richmond Fed President Barkin said, “Unemployment is at 3.8%. It’s been 26 months in a row with unemployment below 4% … That’s the first time that’s happened since the late ’60s. So, the job market is very strong.”  Shortly afterward, Dallas Fed President Logan followed the recent theme, saying “I believe it’s much too soon to think about cutting interest rates” … “I’m increasingly concerned about upside risk to the inflation outlook.”  Meanwhile, Fed Governor Bowman said, “While it is not my baseline outlook, I continue to see the risk that at a future meeting, we may need to increase the policy rate further should progress on inflation stall or even reverse.”  She then went on to tempered the remark by saying, “We are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to inflation.”  (However), “it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive.  (For now,) our monetary policy stance is restrictive and appears to be appropriately calibrated to reduce inflationary pressures.”

Click for video

In stock news, on Friday, META announced major changes to its content labelling rules which will start applying “Made with AI” labels on videos, images, and audio posted on any of its platforms.  In addition, META said it will apply “digitally altered” labels to deceiving content.  At the same time, Reuters reported SHEL is in the final stages of negotiations to purchase of LNG trading firm Pavilion Energy.  (Saudi Aramco is also competing to buy Pavilion.)  Later, VLKAF (Volkswagen) CEO Blume told a German newspaper Friday that he wants to avoid “utopian goals” for the Chinese market, saying his company “cannot keep up” with other EV makers in that country and that anything more than 10% market share would be “very respectable.”  At the same time, Reuters reported three sources confirm that TSLA has canceled its long-promised inexpensive car after strong Chinese EV competition.  (Later, CEO Musk tweeted that “Reuters was lying.”  In other TSLA news, the company announced it will cut prices on its best-selling Model Y (long-range models) by at least $5,000 as it struggles with the largest car inventory it has ever had.

Elsewhere, JNJ agreed to buy SWAV in a $13.1 billion deal.  JNJ offered $335 per share (a 17% premium on the March-end price) as well as debt assumption.  At the same time, there was another twist in the PARA acquisition story.  CNBC reported the Skydance deal is more of a merger (as opposed to the rejected $26 billion APO offer to buy PARA).  In addition, Skydance would either become a majority shareholder or just a significant minority shareholder.  In either case, the deal would require PARA to raise $3 billion in new equity.  (Skydance already has a tentative deal in place to buy 77% of the voting shares of PARA from their current owner.)  After the close, CEO Musk said TSLA will unveil a “robotaxi” on August 8.  On Saturday, Reuters reported that AAPL laid off 600 workers (not at their Cupertino HQ), rumored to have been part of the company’s now canceled car project.

In stock legal and governmental news, on Friday, a new class-action lawsuit was filed against TSLA, alleging the carmaker of many wage law violations against both factory and warehouse workers.  The suit claims TSLA failed to pay overtime, provide breaks, or reimburse employees for work-related expenses.  Later, a US federal appeals court ruled 3-0 to revive a lawsuit against COIN by its customers who allege the exchange illegally sold them unregistered securities and failed to register as a broker-dealer.  At the same time, the FDA gave accelerated approval to an AZN drug to treat a type of solid tumor.  After the close, PG announced it is recalling 8.2 million defective bags of laundry detergent pods (Tide, Gain, Ace, and Ariel brands) due to a packaging defect that may pose a risk to children.  Also after the close, AAPL filed a motion urging a US appeals court to overturn a US trade tribunal’s decision to ban imports of some Apple Watches due to its infringement of a MASI patent.  Elsewhere, AAPL announced they will allow (were beaten by EU law) app store music streaming apps to link to those service’s own websites and inform users of ways other than the Apple App Store to buy digital services.  Later, a MO judge reduced a $1.56 billion verdict against BAYRY (Bayer = Monsanto) to $611 million after the trial that found the chemicals in their weed killer caused cancer in three people.  BAYRY said they would appeal this appeal.

Overnight, Asian markets were mixed but leaned to the green side with the notable exception of China.  Japan (+0.91%), India (+0.68%), and Taiwan (+0.39%) led the eight gaining exchanges higher.  Meanwhile, Shenzhen (-1.57%) and Shanghai (-0.72%) paced the four losing exchanges.  In Europe, the bourses are almost green across the board at midday with only one of 15 exchanges showing red…and barely red at that.  The CAC (+0.60%), DAX (+0.59%), and FTSE (+0.13%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing to a flat start to the day.  The DIA implies a +0.02% open, the SPY is implying a dead flat open, and the QQQ implies a +0.06% open at this hour.  At the same time, 10-year bond yields have spiked to 4.446% and Oil (WTI) is off 0.79% to $86.20 per barrel in early trading.

The major economic news scheduled for Monday is limited to the NY Fed 1-Year Consumer Inflation Expectations survey (11 a.m.) and Fed member Kashkari speaks at 7 p.m.  There are no major earnings reports scheduled for before the open Monday and there are none at all scheduled for after the close.

In economic news later this week, on Tuesday we get API Weekly Crude Oil Stocks.  Then Wednesday, March Core CPI, March CPI, EIA Weekly Crude Oil Inventories, March Federal Budget Balance, and FOMC Meeting Minutes are reported.  Thursday we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, March Core PPI, March PPI, Fed Balance Sheet as well as Fed members Williams and Bostic speaking.  Finally, on Friday March Import Price Index, March Export Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.  Fed member Bostic also speaks.

In terms of earnings reports later this week, on Tuesday, PSMT and WDFC report.  Then on Wednesday, we hear from DAL.  On Thursday, KMX, STZ, and FAST report.  Finally, on Friday, we hear from BLK, C, JPM, PGR, STT, and WFC.

In miscellaneous news, on Saturday, Treasury Sec. Yellen scolded China, saying they are treating America and other foreign countries “unfairly” in terms of trade.  In addition to complaining about Chinese protectionism, Sec. Yellen said that China is producing more of some products than the world economy can absorb (cheap exports).  Yellen also said that the US reserves the right to protect additional sectors (read additional tariffs, import bans, and potentially trade bans).  Yellen went on to recommend that China focus more on stimulating Chinese consumer spending than on subsidizing export product manufacture.  (I’m sure this as constructive criticism and sincere advice with no ulterior motives.)  Brazil, the UK, and Japan concurred with Yellen’s general drift accusing China of dumping exports on the world market at a loss to drive global competitors out of business.

In market expectations news, the Fedwatch tool shows us that as of this morning. 99.0% of Fed Fund Futures bets are on no change in rates at the next (May 1) FOMC meeting.  (The other percent are betting on a quarter-point rate cut at that time.)  The June meeting probabilities are showing 48.2% of contracts expecting no change by Mid-June.  However, 51.2% predict a quarter point cut on June 12 and 0.5% expect a half-point cut by then.  Even the July 31 meeting shows 30.3% of traders anticipate no change in rates by then, while 50.1% expect a quarter-point cut before August and 19.6% expect a half percent or more of cuts by that date.

In late-breaking news, early Monday it was announced that TSM will receive up to $6.6 billion in US grants as well as a potential loan of up to $5 billion as part of the CHIPS act.  The exact amounts are subject to what TSM actually invests in its new AZ chip fab plants.  (TSM has previously announced it would invest $65 billion in the project.  The company also already has contracts in place to supply AAPL and AMD from the facility once the new fabs come on line.)  Elsewhere, sticking to the theme of her trip, Treasury Sec. Yellen met again with Chinese officials Monday.  Yellen continued to push on the “over-capacity” in China’s industrial sector that is flooding global markets with under-priced (subsidized) Chinese exports.  Therefore, Yellen is pushing China to change its policy focus toward stimulating Chinese consumer demand rather than on full employment via infrastructure and industrial investment.  For their part, Chinese officials seem to be continuing to push back saying that deflation and banking system stability are what they see as their top risks.  Finally, SAVE announced Monday it will push off its planned 2025 and 2026 plane deliveries from EADSY (Airbus) and is laying off 260 pilots in an effort to shore up company liquidity.

With that background, it looks as if the market is undecided early Monday. All three major index ETFs are just on the green side of flat, but are near highs of the premarket. The SPY and QQQ are both retesting their T-line (8ema) in the early session, while DIA is not quite to the retest level. Still, all three remain below their T-line (8ema) at this point. So the short-term trend is bearish. Meanwhile, the mid-term remains sideways in a choppy consolidating range. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line and the T2122 indicator remains in its mid-range. So, both sides still have plenty of room to run if they can find momentum. In terms of those 10 big dog tickers, six of the 10 are modestly in the red this morning. However, the two biggest big dogs are green with TSLA (+1.75% in the premarket) pushing. Finally, remember that earnings season starts again later this week and we have CPI on Wednesday. So, the early part of the week may be an indecisive waiting game.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

March Jobs Data on Tap

Thursday saw a massive midday reversal. To start the day, SPY gapped 0.79% higher, DIA gapped up 0.69%, and QQQ gapped up a whopping 1.04%. At that point, SPY and QQQ traded sideways (give or take some mid-morning wobble) until early afternoon. At the same time, DIA sold down into the gap for just under a half hour and then also traded sideways in a tight rang until early afternoon.  Midday, Fed talk took the floor out from under us as SPY and DIA started a steep selloff at 1 p.m.  QQQ tried to hold up at its open level for 30 minutes, but then followed the large-cap index ETFs lower in its own steep selloff.  Those selloffs lasted right into the close as all three ended up near their lows of the day.  This action gave us huge black Bearish Engulfing candles in SPY and QQQ as well as a huge, black Doji Engulf in the DIA.  All three started the day above and sold back down through their T-line (8ema).  All three also crossed down their 17ema and the 8ema even crossed down the 17ema in the DIA.

On the day, all 10 sectors were red as Technology (-1.57%) was out in front leading the market lower. Meanwhile, Utilities (-029%) and Energy (-0.29%) held up better than the other sectors.  At the same time, SPY lost 1.21%, DIA lost 1.32%, and QQQ lost 1.53%.  VXX spiked up 4.79% to close at a still-low 14.00 and T2122 dropped but remains in its mid-range at 30.67.  10-year bond yields fell a bit to 4.311% and Oil (WTI) rose another 1.40% to $86.64 per barrel (as Ukrainian attacks take more and more Russian oil infrastructure under drone attack).  So, Thursday saw a major reversal and the first big down day since the end of January.  This move was clearly brought on by nothing more than Fed talk.  This all happened on slightly above-average volume in the SPY and QQQ with DIA having the largest volume (relative to average) but still only the highest volume in a week. 

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 221k (compared to a forecast of 213k and the prior week’s 212k).  In the ongoing category, Weekly Continuing Jobless Claims fell to 1,791k (versus the prior week’s 1,810k).  At the same time, Feb. Exports were up at $263.00 billion (compared to a January reading of $257.20 billion).  Still, Feb. Imports were up even more at $331.90 billion (versus a January value of $324.80 billion).  This led to an increased Feb Trade Balance of $68.90 billion (compared to a forecast of $66.90 billion and January’s $67.60 billion).

However, the real news of the day was Fed speak, which included Richmond Fed President Barkin who continued the Fed theme of there is no hurry.  Barkin said that inflation data “has been a little less encouraging,” (in early 2024).   He went on to say “No one wants inflation to reemerge. And given a strong labor market, we have time for the clouds to clear before beginning the process of toggling rates down.”  Later, the big news maker was Minneapolis Fed President Kashkari (who had forecast 2 rates cuts this year at the March FOMC meeting) when he said “If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all.”  Kashkari went on to say cuts were “not off the table, but they are also not a likely scenario given what we know right now. There’s a lot of momentum in the economy right now.” Elsewhere, Chicago Fed President Goolsbee said “The biggest danger to the inflation picture in my view… (is) the continued high inflation in housing services.”  He continued, “I have been expecting it to come down more quickly than it has. If it does not come down, we will have a very difficult time getting overall inflation back to the 2% target.” Goolsbee then went on to say, “(Still,) If we stay restrictive for too long, we will likely see the employment side of the mandate begin to deteriorate.”  Finally, Cleveland Fed President Mester seemed to somewhat contradict Kashkari.  Mester said, “we need to see more evidence that confirms that…and once I see that, then I think we’re in a position to move interest rates down.”

Click for video

In stock news, on Thursday, Reuters reported that TSLA had begun making cars in Germany for export to India.  These will be the first sales into India by TSLA and came after meetings with the Modi government and opening TSLA part factories in that country.  At the same time, IP announced it will seek a secondary listing in London as part of its deal to buy British rival DS Smith.  Later, Reuters reported that GOOGL is talking to investment banks about obtaining financing to buy HUBS.  (HUBS currently has a $32 billion market value.)  At the same time, PEP announced it had reached an agreement with major European retailer Carrefour after a three-month pricing dispute.  This will allow PEP products to return to shelves in France and is expected to expand to include Belgium, Italy, Poland, and Spain.  Later, Reuters reported that EADSY (Airbus) and BA are negotiating how to split up SPR in a buyout of the supplier to both.  At the same time, ALK announced that BA paid the airline $160 million compensation for the grounding of the airline’s 737 MAX 9 jets for inspection earlier this year.  The statement said this was “initial compensation” implying there will be more paid.

Elsewhere, Reuters reported CG is “exploring strategic options” (including sale) of its StandardAero unit.  (StandardAero generated $4.6 billion in revenue in 2023.)  Later, DIS announced it will follow the lead of NFLX and will start cracking down on password sharing for its DIS+ service beginning in June.  DIS CEO Iger said it expects to boost the number of subscribers and make DIS+ profitable.  At the same time, F announced it is delaying the launches of two electric vehicles and instead will focus on boosting hybrid vehicle projects.  After the close, JNJ announced it recommends shareholders reject an unsolicited “mini-tender” by TRC Capital, which is seeking to acquire 1 million shares of JNJ for $151.23 per share.  Also after the close, Bloomberg reported that GS is getting ahead of Fed rate cuts by lowering the rate paid to consumers (by its Marcus consumer bank). GS lowered the rate by a tenth of a percent from 4.5% to 4.4%, which was the first reduction in three years.

In stock legal and governmental news, on Thursday, a US district court judge ruled BAC must face the class action lawsuit alleging the bank reneged on a promise to refund overdraft fees to customers facing financial hardship due to COVID-19.  Later, C, JPM, and RY signed agreements with New York City.  Under the agreement, the banks will disclose a new climate metric based on their financing of low-carbon energy projects versus financing for fossil fuel projects.  At the same time, a five-judge NY state appeals court ruled that PARA investors may sue GS, MS, and other banks that underwrote the PARA stock offerings.  The suit alleges the banks disclosed they “may conduct transactions” that had already been planned, which materially impacted the stock price.  Later, CBOE filed a request with the SEC, seeking regulatory approval to allow ETFs to be added to the mutual fund class.  Analysts say that if approved, the move would likely greatly increase the number and assets within ETFs.  (Previously, Vanguard had a patent on that asset class but the patent expired in May 2023.)  After the close, the FDA disclosed it has sent warning letters to major retailers (and filed civil penalty suits against some) related to the sale of ZYN nicotine pouches (from PM) to underage (younger than 21) customers.

In other news, the National Federation of Independent Businesses announced that its March survey of US small businesses found that hiring plans were the weakest since May 2020.  The survey found that just 11% of surveyed firms plan to create new jobs in the next three months.  (This is down from 12% in February.)  The report concludes that “Job creation plans are now below what would be typical in a strong growth economy.”  However, the report also said “For now, employment activity remains solid, although waning from peak levels.”  Elsewhere, BAC researchers announced findings of their fund analysis saying that “actively managed” funds posted their best quarterly outperformance of indexes since 2007 during Q1.  (64% of active funds outperformed the Russell 1000 large-cap index.  For reference, only 38% of funds outperformed the index in Q1 2023.)

Overnight, Asian markets leaned heavily toward the red side with only two of 12 exchanges in the green.  Japan (-1.96%), South Korea (-1.01%), and Taiwan (-0.63%) led the region lower.  Meanwhile, in Europe, we see a similar picture taking shape at midday with only one exchange holding onto green (barely).  The CAC (-1.40%), DAX (-1.42%), and FTSE (-0.95%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a bounce back green start to the day.  The DIA implies a +0.20% open, the SPY is implying a ++0.30% open, and the QQQ implies a +0.34% open at this hour.  At the same time, 10-year bond yields are back up to 4.33% and oil (WTI) is flat at $86.61 per barrel in early trading.

The major economic news scheduled for Friday include March Avg. Hourly Earnings, March Nonfarm Payrolls, March Private Nonfarm Payrolls, March Participation Rate, and March Unemployment Rate (all at 8:30 a.m.), and Feb. Consumer Credit (3 p.m.).  The major earnings reports scheduled for before the open are limited to GBX.  There are no major earnings reports scheduled after the close.

In miscellaneous news, on Thursday, the global securities exchange watchdog group IOSCO proposed detailed guidance on how regulators in the US, Europe, and Asia and supervise stock exchanges.  The group argued that exchanges have increasingly become listed companies and have massively expanded geographically.  However, the exchanges remain essentially self-regulating despite potential conflicts of interest.  At the same time, the US Dept. of Justice told a US district court that settlement talks had ended in an impasse.  As a result, the court scheduled a trial in January 2026 in the US criminal charges against Chinese tech company Huawei, alleging the company and its CEO misled US banks about the company’s business with Iran (violating sanctions).  This may impact US-China relations further, possibly leading to a retaliatory case filing in China. 

In late-breaking news, Treasury Sec. Yellen is in China for the first of four days of talks with various Chinese officials.  In prepared remarks, she called on China to pursue more market-oriented reforms be open to discussion of over-capacity problems.  She also called on China to collaborate on climate change and share “national security economic actions.”  (Yellen is not scheduled to meet with President Xi, but is meeting today with Vice Premier Lifeng in southern China before traveling to Beijing Saturday for talks with Premier Qieng, Finance Minister Fo’an, and even Beijing city officials.  Finally, business analyst firm Creditsafe reported that certain retailers have recently been noticed to be paying bills late.  While not always an indicator of anything, since many healthy firms always pay their invoices late, it is a possible sign of financial stress.  Among the retailers cited were PTON, EXPR, and BBWI.

With that background, it looks as if the Bulls are looking to push back against Thursday’s “Kashkari-induced” selloff. All three major index ETFs gapped modestly higher to start the premarnet and are following through with small white-body candles in the early session. Of course, this comes before the March Jobs data. Still, all three remain below their T-line (8ema) to start the early session. So the short-term trend is bearish. Meanwhile, the mid-term remains sideways in a consolidating range. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line (although DIA is pushing it) and the T2122 indicator remains in its mid-range. So, both sides still have plenty of room to run if they can find momentum. In terms of those 10 big dog tickers, nine of the 10 are in the green this morning with only GOOGL lagging in the red. (Note that this is exactly the same as Thursday morning.) With all that said, it will be March Jobs data that calls the tune at least early today. Finally, remember its Friday…payday. So, pay yourself and prepare your account for the weekend news cycle.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Jobless Claims on Tap as Bulls Try a Push

Markets diverged at the open Wednesday as SPY started down 0.18%, QQQ gapped down 0.48%, and DIA opened dead flat.  SPY and QQQ immediately recrossed the gap and then traded sideways from 10:30 a.m. to 2:45 p.m.  At that point, the two market- leading index ETFs sold back down and recrossed the gap before rallying the last 30 minutes of the day.  Meanwhile, DIA traded higher until 10 a.m., traded sideways until 2 p.m., sold off until 3:20 p.m., and rallied modestly the last 40 minutes.  This action gave us white-body candles with upper wicks in the SYP and QQQ.  Both retested their T-line (8ema) but closed back below.  However, the DIA gave us a black body Doji candle that never quite retested its own T-line.  This happened on average volume in the DIA and below-average volume in the SPY and QQQ.

On the day, eight of the 10 sectors were green as Basic Materials (+1.14%) was out in front leading the market higher.  Meanwhile, far and away the strongest (and only green sector).  Meanwhile, Consumer Defensive (-0.96%) was by far the weakest sector. At the same time, SPY gained 0.12%, DIA lost 0.08%, and QQQ gained 0.22%.  VXX lost 0.52% to close at a still low 13.38 and T2122 climbed but remains in its mid-range at 73.76.  10-year bond yields fell slightly to 4.351% and Oil (WTI) rose another 0.59% to $85.65 per barrel.  So, Wednesday was mostly a bullish, but indecisive day that did not change anything overall in the market.

The major economic news scheduled for Wednesday included March ADP Nonfarm Employment Change which came in quite strong at 184k (compared to a forecast of 148k and a February reading of 155k).  Later, March S&P Global Services PMI was exactly as predicted at 51.7 (versus the 51.7 forecast but down from February’s 52.3).  At the same time, March S&P Global Composite PMI was a tick low at 52.1 (compared to a 52.2 forecast but down from February’s 52.5 value).  Later, March ISM Non-Mfg. Employment was down at 48.5 (versus the 49.0 forecast but up from the February 48.0 reading).  At the same time, March ISM Non-Mfg. PMI was lower than predicted at 51.4 (compared to a 52.8 forecast and the previous value of 52.6).  March ISM Non-Mfg. Price Index showed prices lower at 53.4 (versus a forecast of 58.4 and a Feb. reading of 58.6).  Later, EIA Weekly Crude Oil Inventories showed a bigger inventory build than anticipated +3.210 million barrels (compared to a predicted drawdown of 0.300 million barrels and even slightly larger than the previous week’s +3.165 million barrels).

In Fed speak news, Atlanta Fed President Bostic came out with a hawkish outlook that expects one rate cut in 2024, not coming until Q4.  Bostic said, “We’ve seen inflation kind of become much more bumpy,” … “If the economy evolves as I expect and that’s going to be seeing continued robustness in GDP and employment, and a slow decline in inflation over the course of the year, I think it will be appropriate for us to start moving down at the end of this year, the fourth quarter.”  Later, Fed Chair Powell said, “If the economy evolves broadly as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year.”  Powell said  that recent data had not materially changed the Fed’s outlook, which continues “to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path.”  Still, Powell also said that cuts would not start until “we have greater confidence that inflation is moving sustainably down toward 2 percent.”  Later, Fed Governor Kluger said “I expect the disinflationary trend to continue.” (Saying that would pave the way for rate cuts over the course of the year.)  She continued, “If disinflation and labor market conditions proceed as I am currently expecting, then some lowering of the policy rate this year would be appropriate.”

Click for video

After the close, LEVI reported beats on both the revenue and earnings lines.  However, BB reported a massive miss on revenue while beating on earnings.  It is worth noting that LEVI raised forward guidance.

In stock news, on Wednesday, Bloomberg reported SPOT will increase prices for the second time in a year.  (The report indicated prices will increase $1 – $2 per month by the end of April.)  In addition, SPOT will offer a new pricing tier on $11/month which will include only music and podcasts (but not audiobooks).  At the same time, Taiwan was hit with the largest earthquake since 1999.   This caused TSM (the world’s largest chip maker) to temporarily close some its plants.  Hours later workers returned to the plants to begin inspections prior to restart of those cleanroom tight fab. TSM management said this could cause a “short-term hiccup” to electronics manufacturers.  Later, F reported a 6.8% rise in US Q1 auto sales.  At the same time, AMZN announced it will cut several hundred “sales, marketing, and tech” jobs in its cloud computing unit.  (The timing is a bit suspect since AMZN announced it will be investing an additional $10 billion per year for each of the next 15 years…$150 billion overall…to expand its cloud computing unit.)  That business unit has 60,000 employees, putting the “few hundred” into perspective.  Later, Reuters reported that EADSY (Airbus) delivered 142 planes in Q1, up 12% from Q1 2023.  Still, this was six planes shy of company goals for Q1.  (EADSY refused comment on the report.)  At the same time, 5,000 pilots at JBLU began negotiations with the company for a new labor contract.  Later, the CEO of ULTA warned that Q1 demand was lackluster for his company and across the industry.   (ULTA fell 15.34% on the comments while peers COTY was down 6.28% and EL fell 4.12%.)  At the same time, HXSCL (SK Hynix), the second largest computer memory chip maker and a major supplier to NVDA, announced it will invest $3.87 billion to build a plant in the state of IN.  This plant would begin full production in H2 2028. 

Elsewhere, DIS management won its battle with shareholders choosing CEO Iger’s slate over the slate proposed by activist Iger opponent Nelson Peltz.  Later, COST announced it will offer members access to weight-loss programs, including access to the hit prescription drugs Ozempic and Wegovy.  At the same time, Bloomberg reported that AAPL is now exploring a move into personal robotics as its “next big thing.”  Later, Reuters reported that sources tell it that BA plane deliveries fell sharply in recent weeks as the FAA has increased quality audits.  After the close, MSFT announced that it (in partnership with Quantinuum) had achieved a breakthrough in quantum computers, making them much more reliable.  (Quantum computes basic unit is a “qubit” which are notoriously error prone.  MSFT said their partnership has developed an error correction algorithm that allow quantum computers to have 800 times fewer errors than any other quantum effort.)  Also after the close, the Financial Times reported that GOOGL is planning to charge for its “AI-powered search engine.”  Meanwhile, XOM made a filing saying that it expects Q1 results to be weaker based on lower oil and gas prices.  At the same time, Reuters reported AAPL has had 6,400 app store users reported outages in addition to service losses for Apple Music and Apple TV+.  Later, Reuters reported PARA has entered into exclusive merger negotiations with Skydance, a private equity firm.  (This comes days after PARA received a $26 billion all-cash offer from APO.)  It is worth noting Bloomberg reported Wednesday that PARA’s controlling shareholder has already reached a tentative agreement to sell her stake to Skydance.

In stock legal and governmental news, on Wednesday, Bloomberg reported that the Fed has blocked a push by global banking watchdogs to make climate risk a focus of financial rules.  (The ECB is pushing for the Basel Committee on Banking Supervision to demand lenders make and meet climate commitments in their lending starting January 2026.)  At the same time, the UAW filed allegations with the NLRB, claiming that MBGAF (Mercedes Benz) management have taken “fierce backlash” measures against union organizers at its AL plant.  Later, a federal judge ruled in favor of ABUS and against MRNA in three of four patent disputes.  This will allow a trial over damages to begin in a year (April 2025).  After the close, Reuters reported that the EU will drop its “sovereignty requirement,” which will make it much easier for AMZN, GOOGL, and MSFT to bid on EU cloud computing contracts.  This came after a draft of cybersecurity certification scheme scrapped the requirement that vendors should be “independent from non-EU laws” (meaning EU-based).  Elsewhere, unsurprisingly, T, VZ, CMCSA, and other telecom industry members have filed opposition to the FCC plan to reinstate “net neutrality” rules thrown out by the Trump administration.  Later, the FDA approved an antibiotic for staph infections from BPMUF.

Overnight, Asian markets were evenly mixed.  South Korea (+1.29%) and Malaysia (+1.06%) led the gainers while Hong Kong (-1.22%) and Taiwan (-0.63%) paced the losses.  Meanwhile, in Europe, the bourses are leaning toward the green side at midday with only five of 15 exchanges in the red.  The CAC (+0.06%), DAX (+0.10%), and FTSE (+0.41%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.25% open, the SPY is implying a +0.32% open, and the QQQ implies a +0.43% open at this hour.  At the same time, 10-year bonds are up slightly to 3.363% and Oil (WTI) is flat at $85.45 per barrel in early trading.

The major economic news scheduled for Thursday, includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Exports, Feb. Imports, Feb Trade Balance, and Fed member Mester speaks.  The major earnings reports scheduled for before the open are limited to CAG, LW, RDUS, and RPM.  There are no major earnings reports scheduled after the close.

In economic news later this week, on Friday, March Avg. Hourly Earnings, March Nonfarm Payrolls, March Private Nonfarm Payrolls, March Participation Rate, March Unemployment Rate, and Feb. Consumer Credit are being reported.

In terms of earnings reports later this week, on Friday, we hear from GBX.

In miscellaneous news, on Wednesday, the CEO of STLA told an auto industry group that the industry needs to halve the weight of batteries in an electric vehicle over the next decade.  (The average electric vehicle now has 1,000 pounds of battery in it.)  He said he thinks that is achievable with many improvements already in the works.  Still, he said the industry still needs a breakthrough in terms of energy density.  He also commented on hydrogen vehicles, saying that “for the time being” affordability is a showstopper for all except large corporate fleets.  Elsewhere, European authorities released a report saying (the obvious to me) that social media stock tips may influence stock prices in the short term, but have no impact in the long run.  The report went on to say it is important to hold financial media to accuracy standards in news and data reported…but this is not the case for social media since the impacts are “only short term.”  (It is worth noting the meme stock craze drove GME up 1,600 percent at one point.) 

So far this morning, CAG and RPM reported beats on both the revenue and earnings lines.  (RDUS and LW report closer to the open).

With that background, it looks as if markets are looking to gap higher to start the day (ahead of data still). The SPY an QQQ both gapped up across their T-line (8ema) to start the early session. Meanwhile, DIA gapped up close to its own T-line. From there, all three major index ETFs have given us tiny, white-body, indecisive candles so far in the premarket. So the short-term trend is very modestly bullish. Meanwhile, the mid-term remains sideways in a consolidating range. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line and the T2122 indicator remains in its mid-range. So, both sides still have plenty of room to run if they can find momentum. It may also be worth noting that all three major index ETFs are at or near a potential area of support. In terms of those 10 big dog tickers, nine of the 10 are in the green this morning with only GOOGL lagging in the red. So, expect a bullish start to the day unless Jobless Claims are a major surprise causing a turn-around.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

INTC Discloses $7 Billion Foundry Loss

On Tuesday, markets gapped lower to start the day.  SPY gapped down 0.76%, DIA gapped down 0.84%, and QQQ gapped down 1.12%.  However, from that point, all three major index ETFs ground sideways along the opening levels.  With a modest rally the last 30 minutes of the day.  This action gave us gap-down Hammer candles in all three major index ETFs.  The SPY and QQQ printed white-body Hammers, while the DIA printed a black-body hammer.  All three gapped down through their T-line (8ema) and never came close to retesting it.  This all happened on roughly average volume (with SPY the weakest of the three in that sense).

On the day, nine of the 10 sectors were red as Energy (+1.28%) was far and away the strongest (and only green sector).  Meanwhile, Healthcare (-1.60%) and Consumer Cyclical (-1.45%) were by far the weakest sectors and led the way lower.  At the same time, SPY lost 0.63%, DIA lost 0.94%, and QQQ lost 0.86%.  VXX gained 2.51% to close at a still low 13.47 and T2122 pulled back to the center of its mid-range at 51.13.  10-year bond yields spiked again to 4.353% and Oil (WTI) rose another 1.96% to $85.34 per barrel.  So, Tuesday was a gap-down day where essentially all of the move happened at the open.  The rest of the day was just treading water as markets start off Q2 similarly to the way they started off Q1…full of fear and uncertainty.  Still, we know how Q1 ended up (the strongest quarter in 5 years).  So, the bulls have not given up hope or anything of that sort.

The major economic news scheduled for Tuesday included February Factory Orders, which came in stronger than expected at +1.4% (compared to a forecast of +1.1% and especially compared to the -3.8% in January).  At the same time, February JOLTs Job Openings were slightly lower than predicted at 8.756 million (versus a forecast of 8.760 million but still up from January’s 8.748 million reading).  After the close, the API Weekly Crude Oil Stocks report showed a larger-than-expected drawdown of 2.286 million barrels (compared to a forecast of -2.000 million barrels and far down from the prior week’s 9.337-million-barrel inventory build). So, overall, the economy still shows as strong with better-than-expected factory orders and a large number of job openings.

In Fed speak news, Cleveland Fed President Mester said she continued to expect rate cuts this year.  However, Mester indicated that the bigger risk (to the FOMC) is still in cutting rates too soon rather than too late.  She said, “with labor markets and economic growth both being very solid, we do not need to take that risk.”  Mester continued, “If the labor market deteriorates, we can move rates down sooner and more quickly than in our baseline. Rather than view this as a normalization, the intention would be to return to an accommodative stance of monetary policy to support the economy.”  Later, San Francisco Fed President Daly said she still expects three rate cuts in 2024.  Still, she said, there isn’t enough convincing data yet to warrant starting the cuts. Daly said, “three reductions this year is a very reasonable baseline.”  However, she quickly added, “Three rate cuts is a projection, and a projection is not a promise.” … “We’re getting there, but it’s not going to be tomorrow, but it’s (also) not going to be forever.”

Click for video

After the close, CALM reported beats on both the revenue and earnings lines. However, PLAY missed on both the top and bottom lines.

In stock news, on Tuesday, TSLA revealed its Q1 vehicle deliveries fell 8.5% from Q1 of 2023.  However, this was also down 20% quarter-on-quarter from Q4 2023.  (This was TSLA’s first year-on-year decline since Q2 2020.)  Later, SLB announced it will acquire competitor CHX for $7.75 billion.  (CHX shareholders will get $40.59 per share, which is a 14.6% premium on the Monday closing price.)  At the same time, UBS announced a new $2 billion share buyback program (up to half completed by the end of Q2).  Later, TM reported a huge 20% increase in Q1 auto sales in the US.  (TM sold 565,098 in Q1 2024 compared to 469,558 in Q1 of 2023.)  In contrast, GM reported that Q1 sales fell 1.5% versus Q1 of 2023 (594,233 in Q1 2024 versus 603,208 in Q1 2023).  At the same time, BABA announced it had bought back $4.8 billion of its stock in Q1 as part of its planned $25 billion buyback through Q1 2027.  Later, Bloomberg reported that HON is considering selling its COVID protective gear business unit in a deal reportedly more than $2 billion.  Elsewhere, APO (owner of Yahoo) announced Yahoo had acquired the AI-driven news platform Artifact for an undisclosed sum.  At the same time, GE announced it has completed its three-way breakup (into GE, GEV, and GEHC).  Later, the USW union representing employees of X announced it would not support the takeover agreement of Nippon Steel for roughly $14.1 billion.  The union said Nippon Steels job protection pledges were “meaningless” because of the open-ended wording that would allow the company to skirt promises to both workers and retirees.  After the close, the largest investor of DIS (Vanguard) announced it had cast its votes in support of management’s (CEO Iger’s) slate of directors in Iger’s fight with activist investor Peltz.  Also after the close, the Washington Post reported that the US Cyber Safety Review Board is expected to release its report into lapses by MSFT that allowed hackers to hack State Dept. and Dept. of Commerce email addresses last year via MSFT’s Exchange mail servers.  Meanwhile, INTC disclosed an increasing and now $7 billion operating loss from its chip-making unit for 2023.  (This is up from $5.2 billion loss from the same unit in 2022.)

In stock legal and governmental news, on Tuesday, it was announced that recreational pot will be on the November ballot in the state of FL.  (This led to a spike in pot stocks like TLRY, ACB, and CGC.)  Later, the FDA announced that it has approved an ABT heart valve repair device.  This comes months after the FDA approved a rival product from EW.  At the same time, DUK filed a rate increase request with the Florida Public Service Commission, looking to pass $820 million in costs onto 1.97 million FL residents it serves.  Later, the FDA said some dosages of LLY’s Mounjaro diabetes drug will be in short supply the rest of 2024 due to soaring demand.  (This is one of the drugs approved for weight loss under a different brand name.)  At the same time, the Biden Administration announced it had responded to offers from the makers of the 10 highest priced drugs covered by Medicare.  These include BMY, MRK, JNJ, ABBV, AMGN, LLY, NVO, and AZN.  At the same time, Reuters reported that the US Dept. of Justice will meet with the families of victims of the two BA 737 MAX crashes in 2018 and 2019. The DOJ is evaluating whether BA violated the terms of its January 2021 agreement to avoid criminal prosecution then. Later, several anti-smoking groups sued the FDA, demanding the agency ban menthol-flavored cigarettes.  This comes after an August final decision was pushed back to March and again missed amidst lobbying by MO and BTI (both of which get more than 20% of their revenue from menthol brands).  At the same time, the FDIC announced it is considering a plan to push BLK, STT, and Vanguard back into passive roles in the banking system.  At the moment all three own more than 10% of many FDIC-regulated banks, including JPM, BAC, WFC, and C. Later, MBGAF (Mercedes Benz) workers in AL filed for a unionization vote with the NRLB.  (The vote could happen within days.)  After the close, C filed motions with a federal judge urging the dismissal of a suit brought by the Attorney General of NY, alleging the company failed to reimburse fraud victims and coercing them into giving up legal remedies before summarily dismissing their claims.  C urged the dismissal based on a Uniform Commercial Code standard that excuses banks from doing so if it had taken “commercially reasonable” security measures to verify customer identities.

Overnight, Asian markets were red across the board.  South Korea (-1.68%), Australia (-1.34%), and Hong Kong (-1.22%) led the region lower.  India (-0.08%) and Shanghai (-0.18%) held up much better than other exchanges.  In Europe, the picture is much greener at midday with only three of the 15 bourses in the red.  The CAC (+0.23%), DAX (+0.27%), and FTSE (-0.37%) lead the region on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a down start to the morning.  The DIA implies a -0.07% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields are up to 4.365% and Oil (WTI) is up another seven-tenths of a percent to $85.75 per barrel in early trading.

The major economic news scheduled for Wednesday include March ADP Nonfarm Employment Change (8:15 a.m., March S&P Global Services PMI and March S&P Global Composite PMI (both at 9:45 p.m.), March ISM Non-Mfg. Employment, March ISM Non-Mfg. PMI, and March ISM Non-Mfg. Price Index (all at 10 a.m.), and EIA Weekly Crude Oil Inventories (10:30 a.m.).  We also hear from Fed members Bowman (9:45 a.m.), Fed Chair Powell (12:10 p.m.), and Fed Vice Chair Barr (1:10 p.m.).  The major earnings reports scheduled for before the open are limited to AYI.  Then, after the close, BB and LEVI report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Exports, Feb. Imports, Feb Trade Balance, and Fed member Mester speaks.  Finally, on Friday, March Avg. Hourly Earnings, March Nonfarm Payrolls, March Private Nonfarm Payrolls, March Participation Rate, March Unemployment Rate, and Feb. Consumer Credit are being reported.

In terms of earnings reports later this week, on Thursday, CAG, LW, RDUS, and RPM report.  Finally, on Friday, we hear from GBX.

In EV adoption news, on Tuesday, Reuters reported that electric vehicles are on track to outnumber petrol vehicles by the end of this year or early 2025 at the latest in Norway.  (Nine out of every 10 cars sold in Norway during Q1 was electric.)  This is an extremely interesting nugget for two reasons.  First, obviously Norway is located far to the North in a cold climate…and batteries do not perform as well in cold temperatures.  Secondly, Norway has huge oil reserves relative to the population. Logically, you might think this should mean gasoline and diesel are cheaper there. You’d be wrong. Norway has among the highest fuel taxes in the world, Norway has small refining capacity, and the Norwegian Krone is a very weak currency (making the oil commodity relatively expensive).

In commodity news, the White House said Tuesday that it is open to ending the current temporary pause in LNG exports if that would help get Ukraine aid passed.  (There is a current pause on approval of NEW LNG export projects while climate impacts are studied.)  This White House proposal comes after House Speaker Johnson (from LA, a major LNG exporting state) told FOX Sunday that reversing the “Biden pause” could make it easier for his party to support a Ukraine aid package.

In mortgage news, the national average rate for a 30-year, fixed-rate, conforming mortgage fell slightly to 6.91% from the prior week’s 6.93% rate.  Loan origination points also fell slightly from 0.60% to 0.59%.  As a result, applications for loans to refinance a home fell 2% week-on-week and were 5% lower than the same week in 2023.  However, applications for new home purchase loans slipped only 0.1% from the prior week, but were 13% lower than the same week in 2023. 

With that background, it looks as if markets are modestly bearish in the early session. All three major index ETFs gapped a bit lower to start the premarket. However, they’re all also putting in small, white-bodied, indecisive candles up to this point this morning. The SPY, QQQ, and DIA are all below their T-line. So the short-term trend is bearish. Meanwhile, the mid-term remains bullish with the notable caveat that QQQ is consolidating in a choppy sideways action. Long-term, it has been and remains all Bulls all the time. In terms of extension, none of the major index ETFs are too far away from their T-line and the T2122 indicator is smack in the center of its mid-range. So, both sides have plenty of room to run if they can find traction. It may also be worth noting that all three major index ETFs are at or near a potential area of support. In terms of those 10 big dog tickers, eight of the 10 are in the red. However, only INTC is getting hammered hard (on last evening’s reveal of a $7 billion loss from their chip foundry unit). Unfortunately, the dog swinging the biggest sticks (NVDA and TSLA) are in that group of eight. So, expect a down start unless morning news causes a major turn-around.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

New Week, Month, and Quarter

On Thursday, SPY and QQQ opened dead flat while DIA opened up 0.11%.  From that point, SPY traded sideways in a very tight range until 2:45 p.m.  At the same time, DIA recrossed its small opening gap and then traded sideways along the previous close in a tight range until 2:45 p.m.  Meanwhile, QQQ also traded sideways with a little more volatility until noon, and then sold off very modestly until 2:45 p.m.  Then at a quarter to 3 p.m., all three major index ETFs rallied to the highs of the day at 3:30 pm and sold off back down the last 30 minutes of the day.  This action gave us indecisive candles in all three, with a Gravestone Doji in the SPY, a Doji in the DIA, and a small, black-bodied Inverted Hammer in the QQQ.  All three remain above their T-line (8ema) and SPY printed a new all-time high with DIA missing the same by a few cents.  This happened on less-than-average volume in all three major index ETFs.

On the day, nine of the 10 sectors were green as Energy (+1.02%) leading the way up while Technology (-0.14%) oddly again lagged and was the only sector in the red. (Odd in that the market remains bullish and for the last two or more years when that was the case, Tech led the way.)  At the same time, SPY lost 0.02%, DIA gained 0.05%, and QQQ lost 0.18%. VXX gained 1.57% to close at a still very low 12.97 and T2122 pulled back 2.26% but remains in the top half of its overbought territory at 92.87.  10-year bond yields rose to 4.206% and Oil (WTI) rose another 2.16% to $83.11 per barrel.  So, Thursday was an indecisive or treading water day, maybe due to PCE data coming out on a non-trading Friday.  This brought us to a +0.36% week in the SPY, +0.82% week in the DIA, and a -0.53% week in the QQQ.  For the month, SPY gained 2.95%, DIA gained 2.00%, and QQQ gained 1.14%.  On the quarter, SPY gained 10.05%, DIA gained 5.54%, and QQQ gained 8.42%.

The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in just below expectations at 210k (compared to a forecast and previous week reading of 212k).  The ongoing or Weekly Continuing Jobless Claims were just a bit higher than predicted at 1,819k (versus the 1,815k forecast and up from the prior week’s 1,795k).  At the same time, Q4 GDP was stronger than expected at +3.4% (compared to the +3.2% forecast but below a blowout +4.9% reading in Q3). Meanwhile, the Q4 GDP Price Index was a tick higher than anticipated at +1.7% (versus a +1.6% forecast but far down from the Q3 +3.3%).  Later, Chicago PMI was below the expected level at 41.4 (compared to a 45.9 forecast and the 44.0 previous reading).  Later, Michigan Consumer Sentiment was stronger than predicted at 79.4 (versus a 76.5 forecast and a 75.2 February value).  At the same time, the Michigan Consumer Expectations were also stronger than predicted at 77.4 (compared to a 74.6 forecast and February 75.2 reading).  In terms of inflation, the Michigan 1-Year Inflation Expectations were a tick lower than anticipated at +2.9% (versus a +3.0% forecast and a +3.0% February value).  The Michigan 5-Year Inflation Expectations were also a tick lower than expected at +2.8% (compared to the +2.9% forecast and Feb. reading).  Later, the Feb. Pending Home Sales were also strong than expected at +1.6% (versus a +1.4% forecast and far better than the January -4.7% value).  Finally, after the close, the Fed Balance Sheet showed a $29 billion reduction week-on-week at $7.485 trillion (down from the prior week’s $7.514 trillion).

On Friday, despite being a market holiday, the February Core PCE Price Index came in as expected at +0.3% (compared to a forecast of +0.3% but down significantly from January’s +0.5%).  On an annual basis, the February Core PCE Price Index also came in just as expected at +2.8% (versus a forecast of +2.8% and down from January’s +2.9%).  Meanwhile, the headline February PCE Price Index (month-on-month) was down to +0.3% (compared to a forecast and January reading of +0.4%).  On an annual basis, the headline February PCE Price Index was in line with predictions at +2.5% (versus a +2.5% forecast but up a tick from January +2.4% value).  At the same time, the Preliminary Feb. Goods Trade Balance was a bit worse than anticipated at -$91.84 billion (compared to a $-90.10 billion forecast and a -$90.51 billion January reading).  Elsewhere, the Feb. Personal Spending was up significantly at +0.8% (versus a forecast of +0.5% and a January +0.2% number).  Finally, Preliminary February Retail Inventories were up to +0.4% (compared to a January value of +0.3%). 

Click for video

In FOMC-speak news, on Friday, Fed Chair Powell spoke at a San Francisco Fed event.  Powell said, the “inflation is along the lines of what we would like to see.”  In comments about Friday’s February PCE data release, Powell said “(The data was) not as low as most of the good readings we got in the second half of last year, but it’s definitely more along the lines of what we want to see (than January’s values).”…“it is what we were expecting.”  He continued, “The decision to begin to reduce rates is a very, very important one … The economy is strong right now, and the labor market is strong right now, and inflation has been coming down. We can and we will be careful about this decision because we can be.” (Essentially, he continued the Fed’s line that things are good now and there is no need to take chances or rock the boat until the committee is sure.)

In stock news, on Thursday, AMC announced an equity offering, saying the company will “from to time” sell stock with a value up to $250 million.  At the same time, Chinese tech company Xiaomi entered the electric vehicle market by debuting a $30,000 car (cheaper than TSLA Model 3) in China.  The move intensifies the EV market in at the very least in China.  In unrelated news, Reuters reported TSLA deliveries in China fell 5% during Q1 compared to the prior quarter.  (TSLA still delivered 8% more cars in Q1 2024 versus Q1 2023, but down from Q4.)  Later, WBA announced it took a $5.8 billion charge in Q4 relate to its acquisition of VillageMD (160 medical clinics).  At the same time, F told Reuters it is considering producing its new hybrid sports-utility vehicle in Spain.  (This is likely related to EU scrutiny of Chinese EV makers and incentives.)  Later, PM announced it is near to launching its flagship IQOS heated tobacco device in Austin TX.  This will be the first test marketing of that device in the US.  (MO and BTI already offer competitive devices in limited test marketing in the US.)  At the same time, Bloomberg reported that AAPL has ramped up production of its new iPad Pro overseas and will likely launch the new product in May.  (The original launch date was March, but the software for the device is still in development and was pushed back.)  The new model iPad Pro will have AAPL’s newest M3 chip.  Later, NXPI (the largest chip maker for cars) introduced a new platform to simplify and speed the software development of its carmaker customers and their partners such as ACN, BB, QNX, ETAS, SNPS, and several others.  At the same time NTR (largest global potash fertilizer producer) announced it is exploring the sale of its operations in Argentina, Chile, and Uruguay as part of a strategic restructuring.  (NTR took a $465 million impairment on South American operations in 2023.)

In stock legal and governmental news, on Thursday, EU regulators told Reuters they are considering the introduction of tougher rules on “zero tobacco” heat sticks offered by PM and BTI.  The companies currently use materials like nicotine-infused tea in the sticks, which are both addictive and pose potential health risks.  Later, a US district judge mostly dismissed a lawsuit accusing grocery chain Trader Joe’s of misleading and endangering consumers by failing to disclose that its dark chocolate contained harmful levels of heavy metals like lead and cadmium. The judge dismissed five claims while allowing claims brought from IL, NY, and WA to proceed (because those states have more specific laws).  At the same time, the Dutch government announced it would spend $2.7 billion to improve infrastructure in the Eindhoven region to prevent ASML from moving production operations abroad.  Later, REYN was sued for alleged false advertising in that the company’s premier Reynolds Wrap aluminum foil is labeled as “Made in USA” while only a small fraction of its materials (like aluminum) come from the US.  At the same time, a federal judge in CA appeared poised to reject TSLA’s bid to have a racial discrimination and harassment case thrown out.  The judge has not filed her ruling, but disagreed with TSLA counsel’s assertions many times during Thursday’s hearing.  Moreover, the judge seemed to agree the EEOC had included (cited) the relevant evidence in their own filing.  Elsewhere a federal just dismissed seven lawsuits against GS and MS related to misconduct that added fuel to the fire and ended Bill Hwang’s Archegos Capital Management company.  At the same time, the US Dept. of Commerce “asked” US companies to stop shipping goods to more than 600 new foreign parties, based on evidence those entities have been redirecting the shipments to Russia.  Those components have been found inside Russian munitions, machinery (“tank sights”, drone control circuits, data link encryption, etc.) on the battlefield in Ukraine.  Later, the TX Attorney General announced he has launched an investigation into BA and their main supplier SPR.  Also in TX, a federal judge (often sought out by conservatives who are “judge shopping”) threw a surprise into the case over whether the CFPB agency has the right to regulate card fees.  He did this by chiding the plaintiffs and transferring the case to a Washington DC court since no plaintiff lived in his court’s Fort Worth district, all the lawyers from both sides, and the agency being sued all reside in DC.

On Friday, AMZN announced it will spend $150 billion over the next 15 years on new and upgraded data centers to bolster its cloud services.  (AMZN hold more than twice the market share of MSFT, who is number two in the cloud computing market.)  Later, T announced Saturday that it is investigating an “incident” two weeks ago that has led to more than 65 million of its customer records being published on the dark web.  T reset the passwords of 7.6 million current users, but in addition, the private information (name, address ,phone number, date of birth, and social security number) of all 65 million has been disclosed.

The major economic news scheduled for Monday includes March S&P Global Mfg. PMI (9:45 a.m.), Feb. Construction Spending, March ISM Mfg. Employment, March ISM Mfg. PMI, and March ISM Mfg. Price Index (all at 10 a.m.).  There are no major earnings reports scheduled for before the open.  However, the major reports scheduled after the close are limited to PVH.

In economic news later this week, on Tuesday, we get Feb. Factory Orders, Feb. JOLTs Job Openings, API Weekly Crude Oil Inventories and Fed speakers Mester and Daly.  Then Wednesday, March ADP Nonfarm Employment Change, March S&P Global Services PMI, March S&P Global Composite PMI, March ISM Non-Mfg. Employment, March ISM Non-Mfg. PMI, March ISM Non-Mfg. Price Index, EIA, and Weekly Crude Oil Inventories.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Exports, Feb. Imports, Feb Trade Balance, and Fed member Mester speaks.  Finally, on Friday, March Avg. Hourly Earnings, March Nonfarm Payrolls, March Private Nonfarm Payrolls, March Participation Rate, March Unemployment Rate, and Feb. Consumer Credit are being reported.

In terms of earnings reports later this week, on Tuesday, PAYX, CALM, and PLAY report.  Then Wednesday, we hear from AYI, BB, and LEVI.  On Thursday, CAG, LW, RDUS, and RPM report.  Finally, on Friday, we hear from GBX.

In miscellaneous news, on Thursday, the UK government backed the idea of them following the US in its move from a T+2 trade settlement timing to T+1 as the US, Canada, and Mexico will move to starting in May.  (China, India and 55% of global markets already settle using T+1 timing or will do so by the end of the year.)  The UK move puts immense pressure on the EU to follow suit.  On Friday, the Mortgage Bankers Assn. announced that the national average cost of a 30-year, fixed-rate loan fell to 6.79% last week (down from 6.87% the week prior).  Overseas, Chinese tech firm Huawei announced its net profits doubled in 2023, despite US sanctions.  The company saw a 9.6% year-on-year revenue increase and a 145% increase in net profit to $12.3 billion.  (Much of the increase came from their hit “Mate 60” smartphone that caused a 47% increase in phone sales in China in Q4…mostly at AAPL’s expense.)

In federal regulation news, a federal judge in TX (Judge shopped for the filing) struck down the Dept. of Transportation rules calling for states to measure, monitor, set declining goals, and mitigation plans toward those goals relate to greenhouse gas emissions.  Elsewhere, in a joint project, NASA and the EPA analyzed US landfills.  The study, published Thursday in the journal Science, found that landfill release was the third-largest source of release of Methane (a more potent greenhouse gas than CO2).  The study labeled 52% of US landfills as “super-emitters” which means they emit more than 100lbs of methane/hour, 24 hours a day, year after year.

With that background, I’m sorry but I feel like death. I did not want to not post the blog but knew I would not be up for it this morning. So, this is posted Sunday evening. Check the premarkets for yourself. However, none of the three major index ETFs are too extended but the T2122 is still well into the overbought territory. Also, don’t forget to put an eye on the 10 big dog tickers. They will point the way for the rest of the market, at least early.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Strong Quarter Ends with Q4 GDP Report

Wednesday saw a significant pop higher to start the day all across the market.  SPY opened 0.58% higher, DIA gapped up 0.54%, and QQQ gapped up 0.71%.  At that point we did get some modest divergence with QQQ recrossing its gap by 10 a.m., SPY selling back half way back across its gap by 10:30 a.m., rallying and then reverting to the open level by 10:30 a.m.  From there, all three major index ETFs just traded sideways in a right range until 3:20 p.m.  All three closed out the day with a strong rally the last 40 minutes.  This action gave us a new all-time high close in the SPY on a white Hanging Man candle that retested and passed the test of its T-line (8ema).  Meanwhile, DIA came within 25 cents of its all-time high close on a large white-body candle with only a small lower wick (almost a Bull Kicker type candle), and QQQ printed a black-bodied Hammer candle that retested and passed the test of its T-line.  This happened on slightly above-average volume in DIA and modestly less-than-average volume in SPY and QQQ.

On the day, all 10 sectors were green as Utilities (+2.46%) of all things was way out in front leading the market higher.  Meanwhile, Technology (+0.37%) lagged far behind all the other sectors.  (This is extremely odd on a bullish day in the last few years and was likely due in part to NVDA, by far the biggest dollar-volume trading stock, begin down 2.50%.)  At the same time, SPY gained 0.84%, DIA gained 1.20%, and QQQ gained just 0.34%. VXX fell 1.77% to close at an extremely low 12.78 and T2122 spiked back up into the top end of its overbought territory at 95.02.  10-year bond yields plummeted to 4.188% and Oil (WTI) rose slightly to $81.70 per barrel.  So, Wednesday was a very odd rally day, with tach lagging and utilities leading (on the bond yield fall).  This leaves us at or very near the all-time highs across the major index ETFs and sets us up for a move the last day of March and the Quarter.

The only major economic news scheduled for Wednesday was limited to EIA Weekly Crude Oil Inventories, which came in with a much bigger inventory build than expected at +3.165 million barrels (compared to a forecast calling for a 0.700-million-barrel drawdown and the prior week’s 1.952-million-barrel drawdown). 

In FOMC-speak news, Fed Governor Waller said Wednesday said, “There is no rush to cut the policy rate” right now.” However, Waller also said rate cuts are still on the table, noting that, further progress expected on lowering inflation “will make it appropriate” for the Fed “to begin reducing the target range for the federal funds rate this year.”  He then continued, “We’re in a situation where if we ease too much or too soon, we could see inflation come back, and if we ease too late, we could do unnecessary harm to employment and people’s working lives,” … “We want to be careful.”  Responding to a question about possibly raising rates again, Waller said “Something would really have to dramatically change on the inflation front to think about pushing higher.”  Instead, he said “it’s just a question of when you start (cutting).”

Click for video

After the close, JEF reported beats on both the revenue and earnings lines.  At the same time, CC, FUL, and MLKN missed on revenue while beating on earnings. However, RH missed on both the top and bottom lines.  It is worth noting that CC and MLKN lowered their forward guidance.  Meanwhile, RH raised guidance despite its misses.

In stock news, on Wednesday, Bloomberg reported that FSR had cut the US prices of its Ocean electric SUV by as much as 39%.  (FSR was recently delisted by NYSE due to an “abnormally low” stock price after the company revealed a lack of cash.)  At the same time, DIS completed the addition of the Hulu service to its Disney+ streaming service Wednesday. Later, the CEO of NSANY (Nissan) told Reuters that his company will invest in Renault’s electric vehicle unit after that units’ public listing fell through.  He went on to say NSANY is also considering a partnership with HMC (Honda) to further build out its global EV offerings.  At the same time, USB announced it had sold $8 billion of former assets of CS to APO.  USB added that it expects to book $300 million from the deal in Q1.  Later, HYMTF (Hyundai) announced it will invest $51 billion over the next three years to increase electric vehicle production, expecting to hire 80,000 new employees.  (Back in November, HYMTF announced a new $12.6 billion EV and battery plant in the state of GA toward the same goal.)  Elsewhere, AMZN announced that its senior employees, who receive mostly stock-related compensation “may not” get a pay raise this year.  (AMZN stock rose 81% in 2023 and is up 18% in 2024.)  After the close, Bloomberg reported that a Yale University study has found that it costs NVO as little as $0.89 (and as much as $5.00) to make a single patient 1-month supply of its runaway hit weight loss drug Ozempic.  This is a public relations black eye for the company since the drug sells for over $1,000/month in the US.  (NVO sells exactly the same drug for $59/month in Germany and $155/month in Canada.)

In stock legal and governmental news, on Wednesday, the Biden Administration began pressuring allies to stop their domestic companies from servicing pre-existing tools and machines used for chipmaking in China.  This is seen as the next step to current bans on selling new semiconductor manufacturing technologies to Beijing.  ASML is the main target of this new push.  Later, AMZN lost its court fight to suspend EU rules on online advertising in that region.  Europe’s top court said the EU interests outweigh the interests of AMZN.  This is in line with the September lower court ruling against AMZN.  (AMZN had sought to have the EU Digital Services Act suspended for years while it prepares and files legal suits and appeals against the legislation.)  At the same time, a US federal judge ruled that WBD did not steal (plagiarize) 2022 “The Batman” movie from a writer who created the original story about the superhero three decades prior to the movie.  Later, another US federal judge ruled that JNJ will get a chance to contest the scientific evidence linking talc to ovarian cancer.  This may further delay the more than 53,000 lawsuits against JNJ over its talc products.

Elsewhere, FL Governor DeSantis and his appointed special district development board settled a state lawsuit with DIS.  The settlement calls for the board and DIS (one of the state’s largest employers and the largest tourist attraction) to work together to reach a consensus on new development plans.  As part of the agreement, DIS agreed to pause filing more briefings in its related federal case against the state while the parties seek to reach that consensus development plan.  (Analysts say this was the likely outcome ever since DeSantis dropped his Presidential candidacy and his backers no longer needed the “woke” concept as a stalking horse.)  Later, ALK and HA entered into an agreement with the US Dept. of Justice that they will not consummate their merge until at least 90 days after the two companies comply with a second round of antitrust document requests.  At the same time, WMT notified the FTC and DOJ that it is withdrawing its antitrust review application and expects to refile an amended version Mach 29 for its planned acquisition of VZIO.  Meanwhile, the NHTSA announced that FUJHY (Subaru) is recalling 118k 2020-2020 cars related to a faulty airbag sensor that can prevent deployment.

Overnight, Asian markets were mixed with six of the region’s exchanges in the green and six in the red.  Shenzhen (+1.31%), Australia (+0.99%), and India (+0.92%) led the gainers.  Meanwhile Japan (-1.46%), Singapore (-0.85%), and Thailand (-0.76%) paced the losses.  In Europe, markets are mostly green at midday with only three of 15 bourses in the red.  The CAC (+0.315), DAX (+0.07%), and FTSE (+0.26%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.01% open, the SPY is implying a -0.04% open, and the QQQ implies a -0.06% open at this hour.  At the same time, 10-year bond yields are back up to 4.224% and oil (WTI) is up 1.41% to $82.50 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 Core PCE, Q4 PCE, Q4 GDP, and Q4 GDP Price Index (all at 8:30 a.m.), Chicago PMI (9:45 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, and Feb. Pending Home Sales (all at 10 a.m.), and the Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open include Thursday, we hear from AZUL, DOOO, MSM, and WBA.  There are no major reports scheduled after the close.

In economic news later this week, on Friday, despite being a market holiday, Feb. Core PCE Price Index, Feb. PCE Price Index, Feb. Personal Spending, Feb. Goods Trade Balance, Feb. Retail Inventories are reported and Fed Chair Powell speaks.

In terms of earnings reports later this week, on Friday, there are no major earnings reports scheduled since it is a market holiday.

In miscellaneous global news, on Wednesday, Russia increased its gasoline imports from Belarus.  The imports are up to 3,000 metric tons in the first half of March.  (Compare this to 590 tons total imported during all of February.)   This move comes after Ukrainian strikes have hit numerous Russian refineries taking 15%-20% of Russia’s refining capacity offline.  In other global news, the US announced new sanctions on six people and two companies in Russia and the UAE, accusing them of funneling funds to North Korea’s weapons programs.  South Korea followed suit, sanctioning four of the people.  Elsewhere, Chinese President Xi met with US executives including the CEO of BX, QCOM, and FDX among the 20 companies that were represented.  Xi argued against the “China collapse theory” and “China peak theory” in a 90-minute attempt to gain more investment in China.  This meeting came after foreign investment in China fell 8% in 2023. (The meeting was also a follow-up on the November meeting Xi had with US executives in San Francisco.)

In late-breaking news, AMZN announced Thursday morning that it is investing $2.75 billion into OpenAI competitor Anthropic in a bid to keep pace with MSFT, which has already embedded OpenAI’s ChatGPT in its Azure cloud services.  This is the second tranche of AMZN’s $4 billion investment into Anthropic. (OpenAI’s ChatGPT, GOOGL’s Gemini, and Anthropic are the three main competitors in the AI space.  All other firms in the AI space are far behind and mostly use one of those three tools via partnership.)  Elsewhere, a federal court ruled that the SEC can move forward with its lawsuit against COIN.  The SEC alleges that COIN engaged in the unregistered sale of securities in its sale of cryptocurrencies.  Finally, HD announced this morning it is acquiring private firm SRS Distribution (supplier to landscaping, pool, and roofing contractors) for $18.25 billion.

So far this morning, WBA beat on both the revenue and earnings lines.  This included significant beats on both.  On the other side, DOOO missed on both the top and bottom lines.  Meanwhile, MSM missed on revenue while beating on earnings.  It is worth noting that DOOO lowered its forward guidance.

With that background, it looks like markets are undecided ahead on news on virtual Friday. All three major index ETFs are printing small, and small-body candles that are little changed from Wednesday’s close. It is worth keeping in mind that this “virtual Friday” is also the end of a strongly bullish quarter where the SPY is up more than 10%. So, there could be a lot of window dressing finishing up today. However, the morning news dump (and to some extent the Friday news which can’t be reacted to until next week) have traders nervous. All three index ETFs remain above their T-line (8ema) and all three T-lines are rising. So, the short-term trend is still bullish, but is under a little pressure at least in the DIA. Meanwhile, the longer-term trend in the three major index ETFs remain strongly bullish with all three at or very near all-time highs. In terms of extension, none of the SPY, DIA, or QQQ are extended too above their T-line. However, the T2122 indicator is back in the top of its overbought territory. So, while both sides still have room to run if they can gather the momentum, the Bears have much more slack to work with. Looking at those 10 Big Dog tech names, they are split evenly with 5 green and 5 red. However, the biggest movers are all on the red side (and that includes 3 of the top 4 dollar-volume leaders in the market). So, be careful here at quarter end.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bulls Pushing Around the Globe Today

Monday saw a little divergence in what was a little bit of a Bear trap.  SPY gapped down 0.28%, DIA gapped down 0.15%, and QQQ gapped down 0.65%.  At that point, SPY and QQQ began slow, steady rallies back across the gap until 3 p.m.  From there, SPY and QQQ sold off with SPY ending up at its opening level while QQQ remained in the middle of its morning gap.  While this was happening, DIA sold off slowly all day long, closing very near its lows.  This gave us a white-bodied candle with large upper wick that bounced up off its T-line (8ema) in the QQQ.  At the same time, SPY printed a gap-down, Gravestone Doji.  Meanwhile, the DIA printed a gap-down, black-bodied candle that closed just 24 cents above its T-line.  This happened on less-than-average volume in all three major index ETFs.  (Far below average in the SPY and QQQ.)

On the day, six of the 10 sectors were red as Industrials (-0.53%) out in front leading the market lower.  Meanwhile, Energy (+0.95%) was by far the biggest mover and the sector that held up best.  At the same time, SPY lost 0.28%, DIA lost 0.40%, and QQQ lost 0.36%. VXX fell slightly to close at a still very low 13.08 and T2122 climbed just a bit but remains in its mid-range at 64.94.  10-year bond yields climbed to 4.249% and Oil (WTI) rose 1.55% to close at $81.88 per barrel.  So, Monday saw a gap lower and then divergence with the DIA following through to the downside while SPY rallied and then fell back to the opening level while the QQQ rallied back across the gap before fading back into the middle of its morning gap.

The major economic news scheduled for Monday was limited, but included February Building Permits, which came in above expectations at 1.524 million (compared to a forecast of 1.518 million and much stronger than the previous 1.489 million).  Later, February New Home Sales were lower than anticipate at 662k (versus a forecast of 675k and a January 664k number).

In Fed-speak news, Chicago Fed President Goolsbee said that he expects three rate cuts by the FOMC in 2024.  In an interview with Yahoo finance, Goolsbee said, “So we’re in an uncertain state but it doesn’t feel to me like we’ve changed fundamentally the story that we’re getting (inflation) back to target”…“I was at the median for this one, (meaning he expects three rate cuts in 2024).”  Meanwhile, Fed Governor Cook told a Harvard event, “Although housing-services inflation remains quite high, the current low rate of increase on new rental leases suggests that it will continue to fall.”  She went on to say, “The risks to achieving our employment and inflation goals are moving into better balance.”  “Nonetheless, fully restoring price stability may take a cautious approach to easing monetary policy over time.”

Click for video

After the close, BKKT missed on both the revenue and earnings lines.

In stock news, on Monday, the CEO and Chairman, and Head of Commercial Planes Division all announced they are stepping down from BA in the midst of the 737 MAX quality fiasco.  At the same time, IR announced it would buy ILC Dover from New Mountain Capital for $2.33 billion.  (The move will increase IR’s presence in the life sciences market and ILC Dover had $700 million in 2023.  The deal is expected to close in Q2.)  Later, ABBV announced it will buy LABP for $212 million ($20.42/share).  At the same time, the Wall Street Journal reported that TSLA and another unnamed US automaker are in negotiations to license battery technology from China’s CATL.  (CATL already has an existing partnership with F.)  Later, Reuters reported that the workers at VLKAF (Volkswagen) Chattanooga, TN plant will vote on whether to join the UAW on April 17-19.  (UAW told Reuters that more than 70% of plant employees had signed cards requesting the vote.)  At the same time, LCID announced it will receive $1 billion in capital from an affiliate of the Saudi Wealth Fund.  Elsewhere, after the close, DELL announced it will cut an unspecified number of jobs as part of a broader cost reduction initiative.  Also after the close, SON said it will raise prices on all grades of uncoated, recycled paperboard sold in Europe.  (The hike 50-60 Euro per ton hikes are set to take effect on deliveries beginning April 15.)  At the same time, VSTO said it will evaluate a revised acquisition offer from MNC Capital.  The new offer is $37.50 per share came after the original $35/share offer was rejected.  Meanwhile, it is worth noting that RDDT spiked 35% on Monday, closing up 30%.

In stock legal and governmental news, on Monday, TNXP announced it had received FDA “Rare Pediatric Disease” designation and approval for its TNX-2900 drug.  (This is something of an upgrade from the 2022 FDA designation of the drug as an “orphaned drug.”)    At the same time, AAPL was hit with a flurry of Consumer lawsuits accusing the phonemaker of monopolizing its smartphone ecosystem.  (These suits look to piggyback on the DOJ and 16-state antitrust case filed against AAPL last week over the same matters.)  Later, US Energy Sec. Granholm announced $6 billion in US funding to support emission reduction projects.  This included CLF and CENX (each getting $500 million), XOM (getting $332 million), KHC (getting $171 million), OI (getting $125 million), DOW (getting $95 million), among the 33 total projects being supported.  At the same time, AMRX announced it had received FDA approval for its generic ear infection treatment.  Elsewhere, MAXN has filed a patent infringement suit against CSIQ.  Later, the US Dept. of Agriculture announced it has detected avian flu in milk from cattle in KS and TX.  (The USDA, FDA, and CDC are investigating dairy cattle in KS, TX, and NM following symptoms in the cattle.  For now, the USDA said there is no concern about milk safety.)

Overnight, Asian markets were mixed but leaned toward the green side.  Singapore (+1.10%), Hong Kong (+0.88%), and South Korea (+0.71%) led the region higher.  Meanwhile, India (-0.42%) was the biggest loser on the day.  In Europe, a similar but greener picture is taking shape at midday.  11 of the 15 bourses are in the green with the CAC (+0.20%), DAX (+0.63%), and FTSE (+0.02%) leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward markets following the rest of the globe higher.  The DIA implies a +0.21%open, the SPY is implying a +0.37% open, and the QQQ implies a +0.50% open at this hour.  A the same time, 10-year bond yields are down slightly to 4.241% and Oil (WTI) is up another third of a percent to $82.21 per barrel in early trading.

The major economic news scheduled for Tuesday includes February Core Durable Goods Orders and February Durable Goods Orders (8:30 a.m.), Conference Board Consumer Confidence (9 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include ESLT, MKC, and SNX.  Then, after the close, CNXC, GME, and NOAH report.

In economic news later this week, on Wednesday, EIA Crude Oil Inventories are reported and Fed member Waller speaks.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 GDP, Q4 GDP Price Index, Chicago PMI, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, Michigan 5-Year Inflation Expectations, Feb. Pending Home Sales, and the Fed Balance Sheet.  Finally, on Friday, despite being a market holiday, Feb. Core PCE Price Index, Feb. PCE Price Index, Feb. Personal Spending, Feb. Goods Trade Balance, Feb. Retail Inventories are reported and Fed Chair Powell speaks.

In terms of earnings reports later this week, on Wednesday, CCL, CTAS, LE, PAYX, UNF, FUL, JEF, MLKN, and RH report.  On Thursday, we hear from AZUL, DOOO, MSM, and WBA.  Finally, on Friday, there are no major earnings reports scheduled since it is a market holiday.

In miscellaneous news, Reuters reported Monday that legal issues are hindering the development of US lithium.  A 1972 federal law gives authority over water extraction (brine pumped into drilled holes, pumped back out, and lithium is extracted from the water) to the federal government. However, states (in particular seven GOP-run states) are passing their own regulations, attempting to override federal control or at least have their own rules.  In most cases, these rules have not been written yet at the state levels.  Since the federal government can’t stop states from passing their own laws and regulations, things are at a standstill.  CVX, XOM, TTI, ALB, and others have lithium projects on hold not wanting to get into operations that are very likely to end in litigation over the activity.

In commodity news, Russia limited its crude exports, presumably at least partially as a result of recent successful Ukrainian attacks on the Russian oil infrastructure.  The promise of an Israeli cease fire also took a hit after the UN Security Council demanded one and Israel (who had demanded that the US veto the measure) wrongly lied about the US and played the victim, accused the US of turning their back on Israel and not caring about Israeli blood.  The net result being that oil shipments through the Red sea and Suez Canal are not on the table for the foreseeable future. Combined, the factors support higher oil prices.  Meanwhile, Cocoa prices hit an all-time high after bean blight and climate-caused hotter and dryer conditions in the Ivory Coast (the world’s largest cocoa producer) have driven prices up 39% year-to-date.

With that background, it looks like the Bulls are trying to bounce back and are in control this morning. All three major index ETFs opened higher and have printed white-body candles since that point. All three remain above their T-line (8ema) and all three T-lines are rising. However, DIA is by far the weakest of these moves and remains near its T-line. So, the short-term trend is still bullish, but is under a little pressure at least in the DIA. Meanwhile, the longer-term trend in the three major index ETFs remain bullish. In terms of extension, none of the SPY, DIA, or QQQ are extended above their T-line and the T2122 indicator is back in its mid-range. So, both sides still have room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, all 10 are in the green during the premarket. The market dollar-volume leaders TSLA, AMD, and NVDA are leading that group higher this morning. This should help the Bulls across the market at least early.

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 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 gains are 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

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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