Stocks gapped lower at the open Thursday (0.14% in DIA, 0.44% in SPY, and 0.89% in QQQ).  Price then proceeded to meander sideways in a fairly tight range until 2 pm, when the bears took over to drive the market to new lows at about 3:30 pm.  However, a slight rally in the last 30 minutes took us out not far up off the lows. This left us with black, Inverted Hammer type (maybe you’d call QQQ a spinning Top) candles in the 3 major indices.  In addition, all 3 indices have either broken out of or are now right at the breakout level of, their “dreaded h” patterns.  So, the bears will have the wind at their back on Friday.

On the day, eight of the 10 sectors were in the red.  Healthcare (+0.20%) was really the only sector managing to stay green along with Financial Service (+0.01%) while Energy (-2.33%) and Utilities (-2.32%) were by far the weakest.  The SPY closed down 1.14%, DIA lost 0.54%, and QQQ lost 1.67%.  The VXX ended up 0.31% to 19.15 and T2122 remains in the oversold territory at 13.24.  10-year bond yields are climbing to 3.449% and Oil (WTI) is down just under 4% to $85.09/barrel.  So, overall, it was an indecisive day until the bulls ran out of gas mid-afternoon and the bears took over to take us out near the lows.

In Economic news, August Retail Sales grew 0.3%, but some of that increase was in inflated prices rather than additional purchases.  Weekly Jobless Claims came in a bit lower than expected at 213k (226k forecast).  Meanwhile, both the Philly Fed Mfg. (at -9.9 vs. +2.8 forecast) and NY Empire State Mfg. Index (-1.50 vs -13.00 forecast) came in negative with Philly coming in lower than expected and NY coming in above the expectation.  August Exports were down 1.6% while Imports were down 1.0%.  July Business and Retail Inventories came in as expected.  However, August Industrial Production came in below expectations (-0.2% vs. +0.1% forecast).  So, overall, we had mixed results in terms of what the Fed may make of economic growth (if they were to just look at today’s data).

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In stock news, after hours, FDX withdrew its 2023 forward guidance while saying it expects a global recession next year. The company also warned it will be adversely impacted by global softness in shipments in the current quarter, citing Asia and Europe in particular for economic weakness.  FDX said it now estimates Q1 could come in at $3.44 EPS (far below the current consensus of $5.14).  FDX stock was down 16% in past-market trade on the news.  Elsewhere, 6 companies announced share repurchase plans today.  (TXN announced a dividend increase as well as an additional $15 billion on top of the existing plan of $8.2 billion for share buybacks.  KFRC announced an unspecified repurchase authorization during the period September 16 – November 2, 2022.  MQ authorized $100 million in share buybacks.  ARW added $600 million to its existing buyback program.  OLP declared a $0.45 quarterly dividend and approved a small $5.2 million addition to its remaining $2.3 million repurchase program.  And JG authorized $5 million of share buybacks over the next year.) Meanwhile, the Consumer Financial Protection Bureau announced it will start regulating “buy now, pay later” companies like AAPL, SQ, PYPL, and AFRM.

In Energy news, the deal to avert a rail strike hit oil hard on Thursday.  This caused the “crack spread” (refiner profit margin) to close at its lowest level since March.  Elsewhere, Germany is now in advanced takeover talks with the 3 major gas-importing companies in that country (Uniper SE, CNG AG, and Securing Energy…which was formerly Gazprom Germania).  Finally, on Thursday the Biden Administration announced a plan to accelerate Off-Shore Floating Wind Electrical Generation, setting a new goal of 15 gigawatts of floating offshore capacity by 2035 as part of the broader (and nearer) goal of having 30 gigawatts of offshore wind capacity in production by 2030.  (The latter goal includes floating as well as anchored wind farms.)  Companies in that space include NEE, NEP, GE, WNDY, TPIC, and the etf FAN.

In China news, Asia woke up to a raft of Chinese Economic Reports.  Among these were August Housing Prices (-1.3%), August Industrial Production (+4.2%, beating estimates of +3.8%), August Retail Sales (+5.4%, beating estimates of +3.5%), and August Unemployment (5.3%, down slightly).  These reports did nothing to improve the hopes for a second-half recovery as the Chinese Property slump/debacle and new Covid-19 lockdowns continue to rock the second largest economy in the world.  This came a day after Chinese President Xi Jinping met with Russian President Putin (and reportedly raised concerns over the Russian invasion and losses they have suffered).  Finally, in a bid to bolster US competitive advantage, guarantee sources, and limit the transfer of technologies, President Biden issued an executive order that expanded the regulatory duties and power of the Committee on Foreign Investment in the US.  The order requires them to block foreign acquisitions and investments by countries (especially China) with adversarial aims into US technology firms (especially AI, microelectronics, biotech, quantum computing, clean energy technologies, etc.).  However, the order does not regulate “outbound investment” of American companies in China, which has been a major source of lost intellectual property in the past.  (China requires foreign companies operating in China to turn over trade secrets and data.)

Overnight, Asian markets were nearly red across the board.  The lone holdout was Singapore (+0.01%) which hung onto the green by its fingernails.  Meanwhile, it was  Shanghai (-2.30%), Shenzhen (-2.30%), and India (-1.52%) leading the region lower.  In Europe, a similar picture is taking shape at mid-day.  The FTSE (+0.12%) is the only real green in the region while the DAX (-1.45%) and CAC (-1.30%) are leading the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -0.72% open, the SPY is implying a -0.80% open, and the QQQ implies a -0.95% open at this hour.  10-year bond yields are up to 2.469% and Oil (WTI) is up two-thirds of a percent to $85.62/barrel in early trading.

The major economic news events scheduled for Friday are limited to the Michigan Consumer Sentiment (10 am).  Friday is also Quadruple Witching, so watch for pinning action.  There are no major earnings reports scheduled for the day.

Thursday’s action and the futures this morning suggest we are headed down to retest the July lows. However, most eyes are trained on the FOMC and traders are trying to prejudge what the Fed will do next week. Talking heads can’t make up their minds with some calling for a 1.00% increase while others say we need to ease off the increases and go 0.50% or even 0.25% this month. The Fed gets the only vote and all we know for sure is that they have been talking in such a way as to suggest 0.75% and that is what is baked into the Fed Funds Futures.

With that backdrop, we should note that the bears clearly have control. However, the gap lower implied by futures will put us pretty extended from both the T-line and in terms of the T2122 reading. So far, the potential support levels don’t seem to be helping the bulls hold the line and fight bearish momentum. All we can do is trade the chart (the actual price action) and not what you predict will happen. Still, keep in mind that it is Friday and that means it’s time to consider the weekend news cycle. Do you need to take profits, hedge, or reduce your position sizes? Think about it.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: DXD, JDST, LABD, SPXS, FAZ, ERY, SPXU, DRIP, SQQQ, FNGD, DOG, SDOW, QID, RWM, SQXS, TZA. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped very modestly higher at the open Wednesday following the extremely bearish gap and run Tuesday.  However, all 3 major indices spent the rest of the day crossing back and forth that gap space.  With that said, the bears picked up a little strength in the afternoon to take us back down to new lows…only for the bulls to step in and rally markets for the last 30 minutes of the day.  This action left us with indecisive (Doji-like) candles in all 3 major indices.

On the day, seven of the 10 sectors were green.  However, Energy (+2.64%) was far and away the most bullish sector while Basic Materials (-0.96%) was by far the most bearish sector.  The SPY gained 0.38%, The DIA gained 0.11%, and the QQQ gained 0.79%.  Meanwhile, the VXX was up less than half of a percent to 19.09 and T2122 climbed a bit, but remains oversold at 17.99.  10-year bond yields have pulled back after being up earlier to 3.41% and Oil (WTI) is up 1.58% to $88.69/barrel.  All-in-all, the bears did not get any follow-through from Tuesday’s massacre.  However, there was also nothing for bulls to really hang their hat on at all…the bears are clearly still in charge.

In Economic news, August wholesale prices (as measured by the PPI) fell 0.1% which is in contrast to Tuesday’s CPI increase.  (The annual rate was 7.3%, down from the July reading of 7.7% annualized.)  This was modestly encouraging to bulls during the premarket.  Later in the morning, EIA Weekly US Crude Oil Inventories showed a 2.442-million-barrel build.  Elsewhere, Amtrack has canceled all long-distance trains until after the railroad strike expected Friday is resolved.  In related news, CSX, UNP, and NSF have stopped rail shipments of refrigerated and volatile or decay-sensitive products like food, chemicals, hazardous materials, etc. until the same potential strikes are resolved.  (9 of 12 unions have reached a tentative deal with the railroads, 1 has rejected the management offer, and the other 2 are undecided as of Wednesday night.)

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In stock legal news, TSLA was sued by owners over alleged false “Autopilot” and “Full Self-Driving” claims made by the automaker.  Elsewhere, CA sued AMZN over violations of the state’s antitrust law for blocking price competition.  Meanwhile, WFC reached a $94 million settlement to resolve a class-action lawsuit over impacting credit ratings by putting 213,000 mortgage borrowers in forbearance without the customer’s request or approval during the pandemic.  Finally, the Wall Street Journal reported that Fed regulators are frustrated with the progress of C since it was reprimanded over its risk management system.  Sources told the paper that C has been told it will face charges if it does not fix its risk management process very soon.

In miscellaneous news, 4 companies announced share repurchase plans Wednesday.  These include JNJ (up to $5 billion), CHH (5 million shares, bringing the total to 6.7 million), CMCSA (increased to $20 billion), and NETI ($50 million).  Elsewhere, GOOGL announced it will cut project funding and jobs in its “New Idea Incubator.”  Meanwhile, the Ethereum merge (shifting from “proof of work” to “proof of stake”) is expected today.  This merge will essentially kill Ethereum mining operations and dramatically limit the supply of the coin that is available.

In Energy news, oil was up Wednesday on talk of oil being used for heating in Europe if natural gas supplies remain cut by Russia.  Meanwhile, in Congress, Senate Majority Leader Schumer announced that the stop-gap government funding bill (which must be passed and signed before Sept. 30 to avoid a shutdown) will include plans demanded by WV quasi-Democrat Manchin.  Those riders will ease environmental protections and energy project permitting requirements.  (This was part of the deal to get Manchin’s vote for the Inflation Reduction Act earlier this year.)  However, progressive House Democrats (who must also pass any stop-gap bill) have not been consulted and are opposing the amendments on environmental grounds.  Across the pond, the EU has now proposed a windfall profit tax for wind, solar, nuclear, and coal electricity generators by capping the price they could charge to $180/MWh (current prices are just below $500/MWh) in the region.

Overnight, Asian markets were mixed on mostly very modest moves.  Shenzhen (-2.10%) and Shanghai (-1.16%) were the outliers with most exchanges moving only slightly in either direction.  In Europe, we see the same picture taking shape (minus the Chinese outliers) at mid-day.  The FTSE (+0.26%), DAX (-0.12%), and CAC (-0.28%) are typical and lead the region in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.14% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.32% open at this hour.  10-year bond yields are back up to 3.449% and Oil (WTI) is off six-tenths of a percent to $87.95/barrel.

The major economic news events scheduled for Thursday include August Imports / Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, and August Retail Sales, (all at 8:30 am), August Industrial Production (9:15 am), July Business Inventories and July Retail Inventories (both at 10 am).  The major earnings reports scheduled for the day are limited to ADBE before the open.  There are no major earnings reports after the close.

In economic news later this week, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching.  In terms of earnings later this week, there are no earnings reports scheduled for Friday.

Wednesday was an indecisive, blah day in the market. Premarket futures are implying a similar start today, but we do have quite a bit of data coming before the opening bell. Overall, I would say it looks like traders are still trying to digest the surprise CPI number and prejudge what the Fed will do next week. Talking heads keep bringing up a 1.00% increase by the FOMC, but Fed Funds Futures have priced in 0.75%. In last-minute news, President Biden announced that a tentative deal has been reached between the Rail Worker Unions and the CSX, NSF, and UNP. This deal will avert a strike and avoid serious pain for US supply chains. This should be very good for the bulls (who had worried about impacts). However, I’m not sure many traders understand the real implications of a rail shutdown…so response could be muted.

With that backdrop, we should note that all 3 major indices remain below their downtrend lines and below their T-lines. The market bias is bearish. However, while the bears have control on the daily chart, the bulls have support just below to help them fight that momentum. So, keep an eye on that in the premarket news. Beyond that, trade the chart (the actual price action) and not what you predict will happen. We can’t be first or last over the hill if we want to succeed.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The bulls were in a great mood early in the premarket Tuesday…too great of a mood.  Then the August CPI came in hotter than forecast (and much hotter than the bulls had expected that it would come in well below forecast) and at that point, it was “Katy bar the door.”  So, instead of gapping up two-thirds of a percent, all 3 major indices flipped in premarket and gapped down very significantly (between 2% and 3%) at the open.  From that open, we saw follow-through by the bears until 11:30 am.  Next came a two-hour mid-day pause with the bears finally stepping back in with gusto at 1:30 pm to steadily sell off the 3 major indices the rest of the day.  This action left us with Bearish Kicker candles, which gapped down through the T-line (and downtrend line) and kept going south in the SPY, DIA, and QQQ.

On the day, all 10 sectors are down hard with Energy (-2.52%) and Utilities (-2.57%) as the laggards and Technology (-5.00%) leading the way lower.  The SPY fell 4.31%, the DIA fell 3.96%, and the QQQ fell 5.48%.  Meanwhile, the VXX is up 5% to 19.04 and T2122 dropped all the way from overbought to oversold at 13.21.  After being down in the premarket, 10-year bond yields have spiked up to 3.423%, and Oil (WTI) is just on the red side of flat at $87.58/barrel.  Overall, this was the worst day since 2020 across all 3 major indices.

In Economic news, as mentioned above, August CPI came in at an annual rate of 8.3% when 8.1% was forecast and there had been a lot of talk in the last few days expecting 8.0% based on the continued drop in gas prices. With that said, the August CPI Annual Rate was still better than the 8.5% in July.  (As a result, Feds Fund Futures now show that traders give a 35% probability of a Fed hike of 1% next week.)  Later in the afternoon, the August Federal Budget Balance also came in worse than expected at a $220 billion deficit versus a $213.5 billion deficit forecast and the July level at a $211 billion deficit. Elsewhere, the Dollar rallied 1.48%, bringing the Euro back below parity and gaining 1.2% against the Yen.  Finally, after the close, API reported that US Oil Inventories rose just over 6 million barrels last week (compared to a 3.6 million barrel build the week before).  However, the same group reported a gasoline drawdown of 3.23 million barrels for the same week.

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In TWTR news, Republican Senator Lindsey Graham proposed Tuesday that TWTR, META and other major social media platforms should face increased regulation and be required to obtain a renewable license to operate.  The Senator said he was working on legislation to do this along with other senators from both sides of the aisle.  At the same hearing, the TWTR whistleblower (best known as “Mudge”) informed the Senate that the FBI previously told the company about Chinese government agents working for Twitter.  However, the company was struggling internally to weigh the cost of protecting user data versus losing the Chinese advertising revenue if they were to take action against the Chinese. In the end, the company decided not to jeopardize the very lucrative revenue stream.

In other stock news, in contrast to GS (which announced coming job cuts on Monday), on Tuesday, both JPM and BAC both told media and investors that said they were more optimistic, would be cautious about doing any layoffs, and are fine with their current headcounts for now.  Elsewhere, SBUX told investors that has plans to open 9,000 new stores in China by 2025.  Meanwhile, the US Dept. of Commerce announced a deal with GOOGL to produce chips that researchers can then use to develop both nanotechnologies and other semiconductor chips.  These chips will be produced by SKYT.  (This is part of the spending from the recent Chips bill.)  Finally, after the close, AAPL announced it is creating a new Ad division and will launch ads within the AAPL App Store before the holiday season.

In miscellaneous news, Bloomberg reported that the US will begin refilling its strategic petroleum reserves once oil falls below $80/barrel.  So, that may put a floor under oil to some extent and for a while after oil prices reach that level.  Elsewhere, President Biden’s National Security Advisor Sullivan told the press that they are preparing another aid package for Ukraine to help follow on to counteroffensive that country has used to liberate more than 2,300 sq. miles of Ukraine from Russian occupation in the last week.  Meanwhile, European Commission President von der Leyen said they would raise an additional $140 billion (on top of the $225 billion of leftover Covid Relief funds that were approved by the EU) for use in cushioning consumer cost-of-living increases. On related news, Germany will increase its stake (and may fully nationalize) the country’s largest gas importer (Uniper SE).  Finally, US mortgage demand fell again last week as interest rates rose.  The national average 30-year fixed-rate mortgage for a conforming loan (20% down) went from 5.94% to 6.01%.  At the same time, loan applications fell 4% for refinancing loans and were flat on the week for new purchase loans.

Overnight, Asian markets were down across the board.  Japan (-2.78%), Australia (-2.58%), and Hong Kone (-2.48%) led the region lower.  In Europe, with the exception of the FTSE-MIB (+0.57%), the same story is taking shape, just with less gusto.  The FTSE (-0.96%), DAX (-0.48%), and the CAC (-0.32%) are leading the region lower on smaller moves in early afternoon trade.  Even Russia (-1.62%) has not seen the bearish momentum we saw in the US yesterday.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day…ahead of data.  The DIA implies a +0.28% open, the SPY is implying a +0.34% open, and the QQQ implies a +0.33% open at this hour.  10-year bond yields are up slightly to 3.442% and Oil (WTI) is flat at $87.24/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to August PPI (8:30 am) and EIA Weekly Oil Inventories (10:30 am).  The only major earnings report scheduled for the day is DOOO before the open.

In economic news later this week, on Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching.

In terms of earnings later this week, Thursday ADBE reports.  However, there are no earnings reports scheduled for Friday.

Yesterday showed just how binary events can cause markets to react like a jilted lover. Small disappointments can sometimes lead to a face-ripping storm. Those of you who were very short the market had a glorious day (just don’t forget that event could have gone the other way) and those of you who were too long the market learned a valuable lesson about binary risk events. In either case, we’ve now had that zag I’ve been telling you was coming. The good news is that the market always overreacts, re-reacts, and reacts again. In other words, we know another zig is coming sometime soon.

With that backdrop, we should note that all 3 major indices are back below their downtrend lines and below their T-lines. The market bias is bearish. However, while the bears have control on the daily chart, the bulls have support just below to help them fight that momentum. The PPI news should not be such a binary risk as the CPI, but we may still see a reaction. So, keep an eye on that in the premarket. Beyond that, trade the chart (the actual price action) and not what you predict will happen. We can’t be first or last over the hill if we want to succeed.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped up through the downtrend lines in all 3 major indices.  After that we saw some follow-through for an hour in the SPY, DIA, and QQQ for an hour.  Prices then drifted back lower until shortly after noon, reaching the opening levels again.  From that point on, price meandered between the open and the highs.  This action left us with gap-up white candles with upper wicks (especially in the DIA).

On the day, all 10 sectors are green with Consumer Cyclical (+1.61%) and Energy (+1.54%) leading the way higher.  The SPY gained 1.07%, the DIA gained 0.71%, and the QQQ gained 1.19%.  The VXX is off 1.73% to 18.15 and T2122 is up well into the overbought territory at 91.92.  (The 3 major indices are also a tad extended above their respective T-lines.)  10-year bond yields have spiked back up to 3.356% (after being down in the 3.27% range early in the day) and Oil (WTI) is up 1.2% to $87.94/barrel.  Overall, the bulls were in a good mood from the Ukraine news and their growing expectation that CPI will come in better than forecast tomorrow morning.

In business news, Monday afternoon, GS announced it will be cutting several hundred positions later this month.  Then, after the close, PTON announced a major shakeup.  Two of the PTON Co-founders (including the CEO and Chairman) as well as the Chief Commercial Officer are leaving.  Elsewhere, after the close, TWTR shareholders voted to approve the sale to Elon Musk, despite his desire to back out of the deal).  BAC was also fined $5 million by FINRA for failing to disclose 7.42 million options positions between 2009 and 2020.  In addition, the SEC charged VMW with misleading investors starting in 2019.  In addition, an industry group that represents US Defense Contractors (LM, BA, RTX, GD, NOC, HON, LHX, TXT, CAE, HII, etc.), issued a report to Congress saying the Pentagon will need an additional $42 billion in the next fiscal year budget to make up for inflation.  Finally, SBUX will be holding an investor day today at 10:30 eastern.  Their new CEO is expected to address guidance, unionization of their workforce (one store at a time), and his vision for the company.

SNAP Case Study | Actual Trade

In Economic news, the EU announced that member countries can use $227.5 billion in unused pandemic recovery funds for loans to offset the energy crisis brought on by Russia’s invasion of Ukraine.  Meanwhile, in the US, the coal industry (BTU, ARCH, AMR, CEIX, etc.) is in panic mode ahead of what could be a potential Friday strike by rail workers.  (Coal shipments would stop dead in the event of a rail strike.)  Other industries that will be massively impacted include Lumber (BCC, UFPI, EVA, WFG, etc.), Metals and Minerals (FCX, VALE, AA, BHP, RIO, TECK, CCJ, etc.), and Steel (GGB, MT, RS, CMC, etc.).  However, some industries have already shut down rail shipping (due to the nature of their products and the fear of shipments being stuck in rail cars during a strike).  These include Fertilizers (MOS, NTR, CF, CTVA, FMC, SMG, etc.) and Chemicals (LIN, SHW, DOW, ALB, APD, LYB, ECL, DD, CE, etc.).  

In a good sign for markets, a new survey by BAC finds that investors are fleeing the stock market searching for safety on recession fear.  The survey found that 52% of investors are already underweight stocks with a record high 62% saying they are overweight cash.  This matches up with Refinitiv-Lipper data that showed that last week saw the heaviest outflow of funds from equity funds seen in a quarter.  Since most money piles in and out when it is too late, this could indicate the markets are past the worst of the pullback.

After the close, ORCL posted a miss on both the revenue and earnings lines.  The company blamed foreign currency sales (versus the strong dollar) for the EPS miss.  So far this morning, CNM slightly missed on revenue while beating on earnings.  CNM also raised their forward guidance.

Overnight, Asian markets were mixed but leaned to the green side.  South Korea (+2.74%) was an outlier to the upside.  However, India (+0.75%), Australia (+0.65%), and Taiwan (+0.59%) led the region higher in modest trading.  In Europe, stocks are nearly green across the board at mid-day, also on modest moves.  Only Portugal (-0.48%) is preventing the clean sweep.  The FTSE (+0.35%), DAX (+0.71%), and CAC (+0.68%) are typical and are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward another green start to the day (though still well ahead of the morning data).  The DIA implies a +0.67% open, the SPY is implying a +0.71% open, and the QQQ implies a +0.70% open at this hour.  10-year bond yields are down significantly to 3.316% and Oil (WTI) is up more than 1.5% to $89.18/barrel in early trading.

The major economic news events scheduled for Tuesday we get August CPI (the last major inflation data point prior to the Fed 9/20 meeting, at 8:30 am) and the August Federal Budget Balance (2 pm).  The only major earnings report scheduled for the day is CNM before the open.

In economic news later this week, on Wednesday, August PPI and EIA Weekly Oil Inventories are reported.  Then Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.  Friday is also Quadruple Witching

In terms of earnings later this week, on Wednesday, DOOO reports.  Then Thursday ADBE reports.  Finally, on Friday, there are no earnings reports scheduled.

The bulls continue their run this morning, as they have the momentum and (again ahead of the CPI data) are looking to gap us higher at the open. The schadenfreude of the Russian losses (men, material, and most importantly land) in Ukraine is also still a mood-lifting factor for traders as well. However, it is worth noting the resistance of the late August lows that will have to be dealt with after the opening bell. This CPI report may well be a large binary event, as some traders seem to have convinced themselves that a lower than forecast number will cause the Fed to hike only 0.50% instead of the 0.75% most expect. Make sure you are trading the reaction, not predicting the news. Either way, we know that zigs don’t last forever. So, there is a zag coming sometime in the not-too-distant future.

With that backdrop, we should note that all 3 major indices have broken their downtrends, but have yet to establish new uptrends (higher swing highs and higher swing lows). This is exactly the type of market that can become very choppy and volatile. So, while the bulls have control in the premarket, be prepared for a “gap and fail” or at least intraday reversals as the bulls and bears fight it out.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped modestly higher (0.6% – 0.9%) at the open Friday.  From there the bulls followed through with a rally the was stronger the first 30 minutes, but continued at a slow steady pace all day in all 3 major indices until profit-taking the last 15 minutes of the day.  This took all 3 up through their T-lines (8ema) and are now at or close to a test of their downtrend lines.  The SPY, DIA, and QQQ are all printed a strong, white-body candles.  This resulted in the first weekly gain (and a strong one at that) in all 3 major indices.

On the day, all 10 sectors are in the green.  However, Energy (+2.89%) and Basic Materials (+2.63%), Energy (+2.58%), and Technology (+2.53%) led the market higher.  However, the safety play Utilities (+0.54%) lagged.  The SPY was up 1.55%, DIA up 1.27%, and QQQ up 2.19%.  The VXX was up 1.4% to 18.47 and T2122 is right at the edge of the overbought territory at 79.22.  10-year bond yields are back up to 3.315% and Oil (WTI) has surged 3% to $86.10/barrel.  Overall, it was been a risk-on, “we ain’t afraid of no Fed hikes” day across the markets.

In business news, on Friday, the US International Trade Commission announced it will launch an investigation into SONO possibly violating the patents held by GOOGL.  Then, on Sunday, JPM acquired its 6th “Fintech” firm (Renovite). JPM was already the world’s largest merchant services bank (card processor), but this acquisition is aimed at allowing it to expand even more quickly into global small-business markets as Renovite supposedly will easily to integrate into JPM existing systems. In more economically important news coming later this week, the largest US Trucking Industry Group urged Congress to prepare legislation to prevent a rail strike on September 16. It seems that after President Biden stepped in to prevent the same strike in August, negotiations between UNP, CSX, and the unions representing 115,000 rail workers are making little progress.  Current legislation prohibits the workers from striking for 30 days (which expires 9/16).  If a strike does take place, the trucking industry group claims it will cost the US $2 billion per day in GDP output. The rail companies and their users are currently scrambling to ensure buffer inventories of supplies in case the stroke hits on Friday.

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In Russian invasion news, the Russian statistics Bureau (RossStat) revised the Russian Q2 GDP downward.  The release said that the Russian economy shrank 4.1% (down from the prior -4.0%) in Q2.  The World Bank also released a report saying that it will cost $350 billion to rebuild Ukraine after the Russian invasion (far above that country’s GDP of $200 billion in 2021).  On the ground, the Ukrainian offensive has caused a full-scale retreat by the Russians around Kharkiv and specifically the cities of Kupiansk and Izium (the major Russian logistics hub in Eastern Ukraine). In addition to the cities, the Russians fled from about 40 towns and villages, leaving heavy weapons, ammunition, and other supplies as they ran.  During this offensive, Ukraine liberated over 1,100 sq. miles and driven the Russians back to the Russian border in that Northeastern region the 5 days ended Sunday.  (This Ukrainian success will likely impact energy markets as well as overall market sentiment, at least in Europe.)

In Energy news, on Sunday, Treasury Sec. Yellen told CNN that Americans could see a spike in gas prices again this coming Winter.  Her reasoning is that by year-end, EU countries will have significantly cut or stopped buying oil from Russia.  This will mean additional buyers for Middle Eastern and American oil, which will naturally drive prices higher.  Meanwhile, the IAEA reports that the final reactor at the Zaporizhzhia nuclear plant (largest in Europe) has now been shut down.  This eliminates the source of 20% of Ukrainian electricity, but also dramatically reduces the likelihood of an accident from continual Russian shelling in that area.

In technical analysis news, more than 46% of stocks are trading above their 40sma and almost 31% of stocks are trading above their 200sma at this point.  In the SPY, 451 (of 502) tickers had green days on Friday while 470 (or 502) were green for the week.  The biggest gainers on the week were REGN, SEDG, ALB, RCL, FCX, DISH, CZR, DXCM, SYK, MTCH, NCLH, UAL, PVH, CCL, TSLA, FTNT, LNC, HCA, NUE, EW, CTLT, and ENPH (all of this gained 10% or more for the week).  In the QQQ, 90 of 99 tickers were green for the week.  Of those, 11 (ZS, REGN, DOCU, MELI, DXCM, MTCH, TEAM, LULU, TSLA, CRWD, and FTNT) gained 10% or more for the week.

Overnight, Asian markets were green across the board.  Hong Kong (+2.69%), Taiwan (+1.54%), and Japan (+1.16%) led the region higher as Chinese inflation data came in better than expected (+2.5% vs. +2.7% forecast).  In Europe, stocks are also green across the board as traders are in a good mood on the Ukraine war news at mid-day.  The FTSE (+1.27%), DAX (+1.49%), and CAC (+1.21%) are typical and leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green start to the week.  The DIA implies a +0.25% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.49% open at this hour.  10-year bond yields are down a bit to 3.296% and Oil (WTI) is up three-quarters of a percent to $87.39/barrel in early trading.

The major economic news events scheduled for Monday is limited to the WASDE global Agriculture Report (noon) and a 10-year Bond Auction (1 pm).  There are no major earnings reports scheduled before the open.  However, ORCL reports earnings after the close.

In economic news later this week, on Tuesday we get August CPI (last major inflation data point prior to the Fed 9/20 meeting) and August Federal Budget Balance.  Then Wednesday, August PPI and EIA Weekly Oil Inventory are reported.  Thursday, we get August Import/Exports, Weekly Jobless Claims, NY Empire State Mfg. Index, Philly Fed Mfg. Index, August Retail Sales, August Industrial Production, July Business Inventories, and July Retail Inventories.  Finally, on Friday, we get Michigan Consumer Sentiment.

In terms of earnings, this is a very light week. Tuesday we hear from CNM.  On Wednesday, DOOO reports.  Then on Thursday ADBE reports.  Finally, on Friday, there are no earnings reports scheduled.

We start the week with markets in a good mood. The Russian losses (men, material, and most importantly land) in Ukraine have investors more hopeful. There is also a growing expectation that inflation data Tuesday will show that inflation has started to come down. (This expectation is largely on the back of strong and steady drops in fuel prices, but other commodities have joined the trend to a lesser extent.) However, these things may be fleeting. Russia has massive resources available, should it continue to stubbornly stick to Putin’s goal of capturing all of Ukraine. More directly, regardless of whether the CPI (Tuesday) and PPI (Wednesday) show an improvement, not many traders are betting that this will change the Fed’s mind about a 0.75% rate hike next week. So, don’t believe the zig will last forever. There is a zag coming sometime in the not-too-distant future.

With that backdrop, we should note that all 3 major indices are retesting their downtrend lines in the premarket. The DIA seems to be having the least luck at a breakthrough at this point. However, the broader SPY and QQQ seem to be gapping through that line. Above that, we have a potential resistance level from the 8/22-8/24 lows that will soon come into play. So, while the bulls have control in the premarket, be prepared for a “gap and fail.” In addition, intraday reversal and some volatility have been common or late.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Thursday, markets gapped modestly lower (a half of a percent in the large-cap indices and nine-tenths of a percent in the QQQ) on fears generated by fewer than expected new Jobless Claims and Fed Chair Powell’s premarket speech.  However, the bulls stepped in immediately and rallied markets until 11 am.  From there, the roller coaster was on with action oscillating back and forth between the opening lows and the 11 am highs.  This roller-coaster ended on an up wave.  This action tested the T-line (8ema) in all 3 major indices, but only the SPY managed to close above to pass the retest.  All 3 indices printed white-bodied Spinning Top candles.

On the day, seven of the 10 sectors ended up in the green.  The largest movers were Healthcare (+1.93%) and Financial Services (+1.38%).  Communications Services (-0.76%) was the largest losing sector on the day.  The SPY closed up 0.65%, the DIA up 0.60%, and the QQQ up 0.52%.  The VXX is off 1.56% to 18.26 and T2122 remains in the mid-range at 38.60.  10-year bond yields came back up to 3.323% and Oil (WTI) is up 1% to $82.74/barrel.  All-in-all, this was an indecisive day where the bears could not regain control, but the bulls also had no appetite for a fight.

In economic news, before the open, the ECB raised its rates 0.75% as expected.  Meanwhile, in the US, Weekly Initial Jobless Claims came in lighter than expected (222k versus 240k forecast) and Fed Chair Powell vowed to continue raising rates until inflation is under control.  He stressed that job growth is still very strong and therefore, inflation is job number one for the Fed.  Later in the day, EIA Weekly Crude Oil Stock (Inventories) shot higher with an 8.844 million barrel build (compared to a 250k barrel drawdown expected). Elsewhere, Treasury Sec. Yellen was politicking Thursday, touting the economic positives, calling for higher taxes on the rich as well as an increase in public assistance for the poor. However, on economy-related questions, she said that the cap on Russian oil prices will be a net positive for the global economy as well as the US.

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In big tech news, the White House announced 6 principles to guide “big tech reform” (which will be aimed at META, TWTR, AAPL, GOOGL, and AMZN).  The effort has broad bipartisan support (although for varying reasons) in Congress.  These principles were enhancing competition, robust privacy protections, rescinding company legal protections, increasing algorithm transparency, ending discriminatory algorithmic decision-making, and improving content moderation.  As you would expect, the tech giants are expected to spend tens of millions of dollars in campaign contributions and lobbying efforts to water down, control, or kill these legislative efforts.

In other stock news, Supreme Court Justice Gorsuch denied the appeal of ET against a $155 million award for not paying interest on late payments to various Oklahoma well owners.  Elsewhere, Reuters reported that TWTR agreed in June to pay whistleblower Zatko $7 million to settle a compensation dispute after TWTR terminated him.  Zatko (who goes by “Mudge”) is in the news for his congressional whistleblowing report and for being subpoenaed by Elon Musk in the trial over Musk’s TWTR buyout deal.  After the close, TMUS announced that it has authorized a $14 billion stock repurchase program to last through September of 2023. Finally, this morning TSLA announced it is “considering” building a lithium processing plant (to make battery materials) on the gulf in Texas. This announcement may have been a deflection as the company also replaced its leadership and set new facility goals at the TSLA Nevada “Gigafactory.”

In energy news, oil rose Thursday despite a large and unexpected rise in crude oil inventories after a 7.5-million-barrel outflow from the US Strategic Petroleum Reserve. US Gasoline inventories also rose 33k barrels (versus an expected drawdown of 1.67 million barrels.)  The primary cause for Thursday’s oil price rise was Russian President Putin threatening to end exports to the West should there be real action on the G-7 proposed “Russian oil price cap.”  Finally, a Wisconsin judge ruled that an ENB pipeline is trespassing on Indian tribal land (due to expired easements) and that the tribe is due financial compensation.  However, he also ruled the pipeline will remain in operation to avoid economic impacts and in recognition of Canada invoking a treaty.  The pipeline imports 540k barrels per day of Canadian oil for Wisconsin refineries.

Overnight, Asian markets were green across the board.  Hong Kong (+2.63%) was an outlier, while Taiwan (+1.20%), Shenzhen (+1.11%), and Singapore (+0.91%) led the region higher.  In Europe, stocks are following Asia at mid-day as we see green across the board.  The FTSE (+1.54%), DAX (+1.48%), and CAC (+1.62%) are leading a broad-based rally in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day in the US as well.  The DIA implies a +0.78% open, the SPY is implying a +0.85% open, and the QQQ implies a +1.08% open at this hour.  10-year bond yields are back down to 3.268% and Oil (WTI) is up almost 2% to $85.19/barrel in early trading.

There are no major economic news events scheduled for Friday.  However, we do have 3 more Fed members scheduled to speak (Evans at 10 am, Waller at noon, and George at noon).  Major earnings reports scheduled for the day are limited to ABM, KR, and WDH before the open.  There are no major earnings reports after the close.

After the close, DOCU and RH reported beats on both the top and bottom lines.  DOCU was up a whopping 18% in after-hours trading.  However, RH, while it did have a 10% after-hours range was flat as to 5 pm. So far this morning, ABM has reported beats on both the top and bottom lines while leaving guidance as previously stated.

As we start the day, the dollar has retreated after reaching an all-time record high. The ECB rate hike has given the Euro the fuel it needed to climb back just above parity and the Yen rallied on frustration over how weak it has become recently. In CA, EIX warned residents that is likely to need to cut power to 50,000 residents, not over power shortages but due to the risk of starting wildfires. However, this is not to say the temperatures have not caused power supply issues as the state grid operator is in its fourth straight day of grid emergency status. In Ukraine, the fighting is heating up as the Ukrainian army has recaptured over 400 square miles of territory due to new offensives in both the East (Izium area) and South (Kherson region). In a related story, EU states (and other G-7 members) are continuing to work on Russian oil price caps, despite Putin’s escalating threats. And, of course, all eyes seem to be focused on the British royals after the Queen passed away Thursday afternoon.

With that backdrop, we should note the market is still in a downtrend and that downtrend line has not yet been reached for a test of resistance by any of the 3 major indices. Yesterday’s candle turned more positive late after being pretty indecisive most of the day. And, again, we saw a reversal after the opening gap. So, be prepared for volatility, at least early in the day. The T-line (8ema) remains a key level for all 3 indices today as the bulls test their strength and the same will be true of the downtrend when we reach those levels. So, keep an eye on those tests as well.

Remember that today is Friday and its time to pay yourself if you have profits. It’s also time to prepare for the weekend news cycle with appropriate position resizing, hedging, and/or flattening. Bear in mind that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened flat on Wednesday but then the bulls took over and put in a slow, steady, all-day rally.  However, there was very modest profit-taking in the last 10 minutes of the day.  This action left us with large white candles with small upper wicks in all 3 major indices.  DIA and SPY both managed to print Bullish Engulfing signals but none of the 3 major indices managed to touch (or climb up through) its T-line (8 ema).

On the day, 9 of the 10 sectors were green with Energy (-1.13%) being the laggard.  Meanwhile, Utilities and Consumer Cyclical (both up 2.67%) led the gaining sectors.   SPY gained 1.79%, DIA gained 1.32%, and QQQ gained 2.01%.  The VXX fell 3.64% to 18.55 and T2122 climbed out of the oversold territory to 39.00.  10-year bond yields fell to 3.277% and Oil (WTI) dropped a whopping 5.79% to $81.87/barrel.  (The oil decline was mostly based on fears of a dramatic demand decline in the face of skyrocketing European energy prices as well as rate hikes in Europe and the US.)

In economic news, Imports/Exports fell slightly in July ($330 billion and $259 billion vs. June’s $340 and $261 billion).  However, the July Trade Deficit also dropped by just over $10 billion (from $81 billion to $71 billion).  Next door in Canada, the Central Bank raised rates three-quarters of a percent to 3.25% as expected.  After the close, the API Weekly Crude Oil Inventories showed a 3.645-million-barrel increase for the week which was a surprise since a 0.733-million-barrel drawdown was the consensus.  Also after the close, the Fed announced it is reviewing Bank Capital Requirements which might impose tighter controls on large regional banks, depending on the outcome of its review of the “economic climate for lenders.”

SNAP Case Study | Actual Trade

In stock news, AAPL held its annual product announcement.  The company outlined a new line of iPhone 14s with 4 models ranging between $800 and $1,100 dollars.  These will include satellite-based SOS capability using GSAT satellites.  AAPL stock gained 0.93% on the day on this early afternoon news.  GSAT traded in a massive range (85%) but closed down just 1.44% on the day.

After the close, CPRT reported beats on both the revenue and earnings lines.  At the same time, PLAY and CASY beat on revenue while missing on earnings.  On the other side, GME missed on revenue while beating on earnings.  However, AEO missed on both the top and bottom lines. So far this morning, BILI has reported a beat on revenue while missing on earnings.

In miscellaneous news, the US Dollar continues its rally, reaching another 24-year high versus the Yen and a 37-year high against the British Pound yesterday.  However, the Euro gained against the Dollar and is back very slightly above parity.  Elsewhere, a pair of papers were published at an economic forum yesterday claiming that the Fed’s fight against inflation will need to cause more harm to the economy (will be more restrictive) than the market currently appreciates.  In the US West, the CA power grid managed to get through the eighth day of record heat without blackouts.  However, that continues to be a close run race.  Finally, the ECB will announce its decision on interest rates (+0.75% expected) at 8:15 am with a presser to follow at 8:45 am.

Overnight, Asian markets were mostly green with the notable exception of mainland China.  Japan (+2.31%), Australia (+1.77%), and Taiwan (+1.20%) led the region higher while Hong Kong (-1.00%), Shenzhen (-0.86%), and Shanghai (-0.33%) were the only red in the region.  In Europe, stocks are following Asia’s lead at mid-day.  The FTSE (+0.20%), DAX (-0.25%), and CAC (+0.27%) are typical of the continent in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a very modestly green start to the day.  The DIA implies a +0.19% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.16% open at this hour.  10-year bond yields are lower to 3.241% and Oil (WTI) is up fractionally to $81.22/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Weekly Jobless Claims (8:30 am) and Weekly Oil Inventories (11 am).  Fed Chair Powell also speaks at 9:10 am.  The major earnings reports scheduled for the day include BILI before the open.  Then after the close, DOCU and RH report.

In economic news later this week, on Friday, there are no major economic reports.  However, in terms of earnings later this week, on Friday, we hear from ABM, KR, and WDH.

As we start the day, keep in mind that AAPL may get some pushback in sales (and therefore the stock market) as it is testing the price elasticity of its phones by raising prices in 14 markets around the world while also keeping prices the same for iPhone 14s in the US. In politics to watch (which could impact US companies later), the UK’s new PM Truss announced a stimulus package that puts a $2,880 cap on what households pay for energy for the next two years. This will save a typical British household $1,154 annually. The pinch this will put on energy companies was offset (sugar for their medicine) by also announcing the government is granting new oil and gas exploration leases in the North Sea.

With that backdrop, we should note the market is still in a downtrend and yesterday’s strong candle is only a white candle in a sea of black ones until we get confirmation of a reversal (which we do not have yet). So, do not assume a reversal has happened until you have confirmation. Also be aware that futures are likely to react to the ECB Rate news, US Weekly Jobless Claims, and Fed Chair Powell speaking all before the open. So, be prepared for some volatility, at least early in the day. The T-line (8ema) above will be a key level for all 3 indices today as the bulls test their strength. So, keep an eye on that as well.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped slightly higher (about 0.25%) at the open Monday.  However, that was another bull trap as the bears immediately stepped in to sell off the 3 major indices for the first hour.  The bulls did step back in to rally us back to the highs of the day shortly after 11 am.  Still, that was the end of the bull’s strength as all 3 major indices oscillated lower the rest of the day, closing midway between the lows and the previous day’s close.  This action left us with somewhat indecisive Black Spinning Top type candles across all the major indices. 

On the day, all 10 sectors were in the red with Industrials (-0.01%) just barely below break-even and Energy (-1.35%) leading the market lower.  The SPY lost 0.39%, DIA lost 0.50%, and QQQ lost 0.72%.  This all happened on very slightly above-average volume.  The VXX gained eight-tenths of a percent to 19.25 and T2122 fell even further into the oversold territory at 6.06.  10-year bond yields spiked higher to 3.342% and Oil (WTI) was just south of flat at $86.70/barrel.

In stock news, AIG announced that its upcoming IPO of its Corebridge Financial (CRBG) will be priced between $21 and $24 per share and they expect to raise $1.92 billion on the IPO.  Elsewhere, NWL cut its forward guidance after hours, citing a deteriorating economic climate and inflationary pressure.  Then after the close, Reuters reported that sources tell them that CVS’s weekend acquisition of SGFY is likely to face stiff antitrust regulator opposition from the FTC.  Finally, in an attempt to steal AAPL’s thunder (AAPL holds its iPhone 14 launch event today), Tuesday afternoon GOOGL announced their new Pixel watch and Pixel 7 phones (running Android 13) will go on sale on October 6.

SNAP Case Study | Actual Trade

In miscellaneous news, the dollar continued to be strong and gained against the Euro and Yen after the July ISM Services PMI showed edged higher (56.9 vs. 56.7 in June and Economist forecasts of 54.7).   The Yen reached another 24-year low of 142 Yen per dollar on that move.  Elsewhere, after hours, Reuters reported that CEOs from banks (BAC. TFC, and MTB) all said consumers and businesses are still in good financial shape.  Despite inflation and fear of recession, consumers spent 10% more in August than the same month in 2021.  In addition, bank account balances are higher than even before the pandemic according to those bank CEOs.

In energy news, for the second consecutive day, California narrowly averted blackouts. Scorching temperatures above 100 pushed electrical demand to record levels again. At 5:30 pm Pacific, California’s grid operator ordered its highest level of emergency, warning that blackouts were imminent and the CA Office of Emergency Services then asked people to turn off electrical devices. Within 5 minutes electric demand dropped significantly and the crisis was avoided (at least for the moment). However, this was a tight-run affair and the CA electric demand is very near a crisis that could shut down (or at least slow down) the state’s business operations while electric supply is very tight (read: while the heatwave persists).

In real estate-related news, mortgage demand dropped again as the national average rate for a 30-year, fixed-rate, conforming loan rose from 5.80% to 5.94%.  Refinance loan applications fell another 1% on the week (83% lower than the same week in 2021) and new home purchase loan applications also fell 1% (23% lower than last year).  In other real estate news, the big banks (GS, MS, JPM, etc.) have now removed the final hurdles to full-time employees returning to the office.  There are some exceptions as C is being more flexible in allowing workers to use a hybrid remote / in-office schedule.

So far this morning, NIO beat on revenue while missing on earnings.  KFY and GIII both came in in-line on revenue while missing on earnings.  Meanwhile, REVG came in in-line on revenue while beating on earnings.

Overnight, Asian markets were mixed but leaned to the red side.  Taiwan (-1.82%), Australia (-1.42%), and South Korea (-1.39%) led the region lower as China’s trade data missed expectations amid “Zero Covid” shutdowns in various parts of that country.  In Europe, we see even more red at mid-day.  The FTSE (-0.59%), DAX (-0.39%), and CAC (-0.32%) are leading the region lower with only Spain (+0.55%) showing any significant green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a flat start to the day.  The DIA implies a +0.09% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.13% open at this hour.  10-year bond yields are down a bit to 3.324% and Oil (WTI) is up a quarter of a percent in early trading.

The major economic news events scheduled for Wednesday are limited to July Import/Exports and July Trade Balance (8:30 am) and Fed Beige Book (2 pm).  However, there are also 3 Fed speakers (Mester at 10 am, Brainard at 12:40 pm, and Vice Chair Barr at 2 pm).  The major earnings reports scheduled for the day include ASO, GIII, KFY, NIO, and REVG before the open.  Then after the close, AEO, CASY, CPRT, and GME report.

In economic news later this week, on Thursday, Weekly Jobless Claims and Weekly Oil Inventories are reported.  Finally, on Friday, there are no major economic reports.

In terms of earnings later this week, on Thursday, we hear from BILI, DOCU, and RH report.  Finally, on Friday, we hear from ABM, KR, and WDH.

In the watch and phone announcement noted above, GOOGL CEO Pichai said he hopes to improve the company’s efficiency by 20% and that could include a headcount reduction. This is just the latest example of companies fearing a recession or at least an economic slowdown. Elsewhere, be aware that analysts are now expecting the Central Bank of Canada to hike interest rates 0.75% at 10 am today. This may have a modest impact on US markets.

The downtrend remains in place, but the extension to the downside also remains extreme. The premarket indices continue to be flat but are just now on the red side of that break-even line. The SPY is sitting at a potential support level, but the DIA and QQQ support is much less discernable. Expect chop and be very careful about chasing any move as it is likely to be a precursor to reversal.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Counterintuitively, stocks gapped higher at the open Friday after better-than-expected August Payrolls (+315k vs. +300k forecast) which would logically be seen as helping to lead the Fed to a larger September Rate hike that one would think the bulls would hate.  However, maybe traders were hanging their hats on the oddly higher Unemployment rate which rose to 3.7% as opposed to the previous (and expected) 3.5%, which could be seen as giving the Fed cover for a smaller hike. In either case, after some volatility and a 2-hour sideways grind, all 3 major indices sold off hard about noon and then took another leg down about 3:15 pm.  This action left us with large Bearish Engulfing candles that failed a retest of the T-line (8ema).

On the day, 8 of the 10 sectors were red with Healthcare (-1.25%) and Technology (-1.11%) leading the market lower.  Energy (+2.06%) was an outlier on the other side due to G7 agreeing to try to limit the price Russia can get for its oil and, probably not coincidentally, Gazprom shut down natural gas flows to Europe but also announced it had “found a leak” and can no longer commit to restart the gas flows September 3 as previously planned.  The SPY lost 1.05%, the DIA lost 1.04%, and QQQ lost 1.41%.  (This capped off a terrible third-straight down week for the major indices.  On the week, SPY lost 3.22%, DIA lost 2.84%, and QQQ lost 3.99%.)  VXX fell almost 2% on the day to 19.09 and T2122 climbed but remains deep in oversold territory at 10.70. 10-year bond yields fell to 3.195% and Oil (WTI) rose modestly to $87.19/barrel.

In stock news, Friday afternoon it was announced that for the first time AAPL iPhones account for more than half (just over 50%) of all US smartphones. Elsewhere (also Friday afternoon) the CFO of BBBY committed suicide by jumping from his high-rise apartment balcony.  This leaves BBBY without a CEO or CFO as it works to compile its quarterly report for the period ending August 27.  Bloomberg reported Saturday that AMZN has now abandoned dozens of existing and planned delivery facilities around the US as sales have slowed in the post-pandemic period.

SNAP Case Study | Actual Trade

In Forex news, the Euro sank to a new 20-year low (below $0.99) Monday following the news Russia will not reopen the Nord Stream One gas pipeline.  However, the Euro recovered a bit to the $0.99 level within 6 hours.  Meanwhile, the British Pound hit a 2-year low against the dollar as the UK’s Tory Party selected Liz Truss as its new leader and therefore also new Prime Minister.  After her selection, she vowed to cut taxes and also cut energy bills (2 promises, in the short-term and long-term).  No specifics were offered.

In energy news, on Friday, G-7 countries (US, Canada, France, Germany, Italy, UK, and Japan) agreed to force a price cap on Russian Oil and explore insurance rules that would ban shipments of Russian oil above a capped price.  (Analysts predict this plan is likely to be ineffective at best without the cooperation of China and India.)  Not at all coincidentally, Russia announced the flow of natural gas to Europe would not resume as planned Saturday (ostensibly due to an oil leak in a turbine).  Shortly after Russia’s announcement, Germany announced an additional $65 billion (bringing the total to $95 billion) in Consumer Energy Inflation Relief.  Then on Monday, OPEC+ announced a production cut of 100,000 barrels per day starting in October.  This came one month after the group’s token increase of 100,000 barrels per day just one month ago.  The group said that the small September increase (seen as a rebuff of President Biden) was always intended as a temporary measure.  Oil prices surged higher on this small decrease. Finally, Tuesday Uniper (largest German Gas supplier) warned of a European crisis coming soon unless drastic steps are taken to control markets. The company’s CEO said that wholesale prices are now 20 times what they were two years ago.

In Russian invasion news, the head of the UN Inspectors (Intl. Atomic Energy Agency) will release its report on the findings from inspection of the Zaporizhshia nuclear power plant (largest in Europe) following Russia’s takeover and continued shelling in the area.  Elsewhere, India said Monday that it will carefully consider the G-7 price cap on Russian oil.  On another front, French President Macron called for his citizens to cut energy use by 10% in order to avoid rationing in coming months.  For its part, Russia has upped the threats to cut energy supplies to the West and sell more oil to Asia in response to the G-7 price-cap.  They also, through Gazprom, said they have no idea when the gas can resume flowing into the Nord Stream One pipeline, saying it is up to SMNEY (Siemens Energy) to repair the turbine.  However, Siemens said the leak in a turbine is no reason to halt gas flows.

Overnight, Asian markets mixed but leaned to the upside on the day.  Shanghai (+1.36%), Shenzhen (+1.04%), and Thailand (+0.73%) led the region higher on mostly modest moves.  In Europe, stocks are mostly solidly in the green with the major outlier being Norway (-2.54%) at mid-day.  The FTSE (+0.16%), DAX (+0.90%), and CAC (+0.49%) are leading the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.67% open, the SPY is implying a +0.70% open, and the QQQ implies a +0.75% open at this hour. 10-year bond yields are rising again at 3.244% and Oil (WTI) is down two-thirds of a percent to $86.33/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Aug. Services PMI (9:45 am) and Aug. ISM Non-Mfg. PMI (10 am).  In terms of earnings, there are no major earnings reports scheduled for the day.

In economic news later this week, on Wednesday we get July Trade Balance and Fed Beige Book.  Then Thursday, Weekly Jobless Claims and Weekly Oil Inventories are reported.  Finally, on Friday, there are no major economic reports.

In terms of earnings later this week, on Wednesday ASO, GIII, KFY, NIO, REVG, AEO, CASY, and GME report.  Then Thursday, we hear from BILI, DOCU, and RH report.  Finally, on Friday, we hear from ABM, KR, and WDH.

The last piece of news to start the week is that CVS has reached an agreement to buy SGFY for $8 billion or $30.50/share. (That would be a 6% premium over Friday’s closing price of $28.77 for SGFY.) AMZN had been mentioned as a bidder for the healthcare provider and this deal is just another example of vertical integration in the Healthcare-Pharmacy space.

The downtrend remains in place after 3 weeks of pullback. So, while the premarkets are looking to make a modest gap higher, do not get caught up in FOMO to the upside. At this point, it looks like a move to relieve over-extension more than a reversal.

Remember that trading is our job, not a pastime or hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped lower at the open on Wednesday on fears raised by the closing of yet another major (21 million population) Chinese City due to a covid outbreak.  (The gaps were between half of a percent and nine-tenths of a percent.)  We then saw some follow-through with the 3 major indices reaching the lows of the day by 11 am.  At that point, markets ground sideways for a couple of hours.  The day then ended with a slow protracted 3-hour rally that filled the opening gap and closed very near the highs of the day.  This action gave us white-bodied Hammer-type candles in all 3 major indices. It is worth noting that Thursday saw slightly above average volume in all 3 major indices (and that was the first time that has happened on a green day since August 16).

On the day, seven of the 10 sectors were in the red, with Basic Materials and Energy both down more than 2%.  Healthcare (+0.91%) and Utilities (+0.82%) were by far the leading sectors Wednesday.  Despite the sectors leaning red, the SPY gained 0.31%, DIA gained 0.45%, and QQQ gained 0.04%.  The VXX rose 1% to 19.44 and T2122 remains deeply oversold at 3.57.  10-year bond yields spiked higher to 3.257% and Oil (WTI) plummeted another 3.5% to $86.44/barrel.  Overall, this was a small attempt by the bulls to find their footing (support) after reeling since last Friday’s Jackson Hole inspired bloodbath.

In economic news, Weekly Initial Jobless Claims came in better than expected (232k actual versus 248k forecast and 237k previous week).  Q2 Nonfarm Productivity also came in better than expected, but still down.  The actual was -4.1% while -4.5% was the consensus forecast and last quarter we saw -4.6%.  August Mfg. PMI and August ISM Mfg. PMI also both came in stronger than expected (PMI 51.5 actual vs 51.3 forecast and ISM PMI at 52.8 actual versus 52.0 forecast).  All of these things would indicate the economy is at least slightly stronger than expected…therefore giving the Fed cover for a larger September rate hike.  However, on the other side, Q2 Unit Labor Costs came in lower than expected.  They showed a +10.2% actual versus a +10.7% consensus forecast and last quarter’s +10.8%.  This would tend to indicate that there is less inflationary pressure on labor costs than expected, which would speak against a heavy hand by the Fed.

SNAP Case Study | Actual Trade

In stock news, US military veterans sued MMM to prevent the company from spinning off its healthcare business.  The lawsuit calls the move by MMM a blatant attempt to transfer liability over defective earplugs to another company after a judge had ruled MMM could not use bankruptcy to avoid the damages.  Elsewhere, the UK Antitrust Regulator has ruled that the MSFT acquisition of ATVI (for $69 billion) could harm competition.  This is not likely to derail the deal but should force MSFT to give broader assurances around the not ordering platform exclusivity of games to block rivals SONY and Nintendo from having access to ATVI games.

In energy news, XOM and RDS.A agreed to sell their California oil joint venture operations to German asset manager IKAV for $4 billion.  Elsewhere, the US Dollar reached yet another 20-year high Thursday, providing an additional headwind for oil prices (which are denominated in dollars).  In nuclear news, the California legislature approved a bill to extend the life of the state’s only atomic power plant by 5 years on Thursday.  This reversed the 2016 decision to retire the PCG Diablo Canyon plant by 2025.  The bill also provided PCG with a $1.4 billion loan to keep the plant operational until 2030.

After the close AVGO and LULU both reported beats on the revenue and earnings lines.  Both companies also raised forward guidance.  However, JOAN beat on revenue while missing on earnings.  The company left guidance as-is.

This morning, META and QCOM announced an agreement to jointly develop and produce a chipset META’s Quest virtual reality devices.  The chipset will be based on QCOM’s Snapdragon chip line which is already widely used in Android phones.  This partnership comes just weeks ahead of META launching a new virtual reality headset (set for October).  However, losses have continued to widen in META’s “Reality Labs” division since the company bet its future on virtual reality by rebranding in 2021.

Overnight, Asian markets leaned heavily to the red side on modest moves.  Taiwan (-0.87%), Hong Kong (-0.74%), and Singapore (-0.57%) led the region lower.  In Europe, stocks lean heavily to the upside at midday.  The FTSE (+0.62%), DAX (+1.31%), and CAC (+0.44%) are leading the region higher with only 3 smaller exchanges showing red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a slightly red start to the session (granted, well ahead of critical data).  The DIA implies a -0.13% open, the SPY is implying a -0.18% open, and the QQQ implies a -0.36% open at this hour. 10-year bond yields are up just slightly to 3.258% and Oil (WTI) is up almost 2% to $88.29/barrel in early trading.

The major economic news events scheduled for Friday include Aug. Avg. Hourly Earnings, Aug. Nonfarm Payrolls, Aug. Participation Rate, and Aug. Unemployment Rate (all at 8:30 am), July Factory Orders (10 am).  There are no major earnings reports scheduled for the day.

Today brings a slew of data before the open, most importantly August Payrolls data. This is widely expected to come in hotter than the consensus forecast (+300k) and most analysts think this will cause the bears to roar (as traders then expect another 0.75% hike later this month). However, US futures are already pricing in an 80% probability of a 0.75% rate hike. So, to me, the risk seems to be to the upside if somehow the Payroll data comes in a bit soft. With that said, the premarket is essentially flat (just on the red side) already while we wait on the data.

Expect volatility at the open as markets react to Payrolls, Unemployment Rate, and Participation. However, with a 3-day weekend ahead, it is very likely we see light volume in the afternoon (perhaps all day) as the big traders head for a long weekend in the Hamptons. So, be careful about initiating any new positions that you might not be able to get out of later in the day. The short-term trend remains strongly bearish, but we did put in candles that suggest the bulls tried to find support Thursday. If nothing else, we are due a pause just to relieve bearish overextension. The bottom line is that we are in a downtrend, but the bulls are trying to hold this level and the bears may have gotten ahead of themselves.

Again, remember it is Friday and we have a 3-day weekend ahead. Prepare yourself by taking profit, hedging, and/or getting smaller in your risk positions. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

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