Trade Goods Balance, Retail Inventories

Stocks gapped very modestly higher at the open Monday but immediately sold off about 3 times more than the opening gap rose…all before reversing once again.  This whipsaw action continued, with price spending the afternoon on the downside of the previous close.  Overall, this gave us a small bearish move on the day.  This left us with black-body candles that did not quite qualify as Dark Cloud Cover candles above the T-line in all 3 major indices.  Six of the 10 sectors were bullish and 4 of the sectors were bearish.  However, Energy made by far the biggest move, up over 3.25% on the day.  With that said, SPY lost 0.37%, DIA lost 0.18%, and QQQ lost 0.70% on the day.  The VXX fell 2.25% to 22.60 and T2122 dropped a little further down in the mid-range to 63.86.  10-year bond yields rose to 3.207% and Oil (WTI) climbed almost 2% to $109.74/barrel on the day.

In economic news, May Durable Goods Orders and May Pending Home Sales both came in much higher than expected.  The Pending Home Sales number is particularly surprising since interest rates rose overall during the month.  These two reports tend to suggest consumers are still willing and able to make major purchases.  This stands in conflict with a CNBC report Monday (of a Lending Club report) that said that 58% of Americans are now living paycheck-to-paycheck. 

In business news, Bloomberg reported that crypto exchange FTX is considering acquiring HOOD.  (Last month the CEO of FTX took a 7.6% stake in HOOD.)  As a result, HOOD traded in a 24% range on the day, closing up 14%.  However, after the close, FTX CEO Bankman-Fried said there were no active M&A conversations taking place with HOOD at this point.  Elsewhere, AAL regional carriers (subsidiaries) are offering pilots triple pay to pick up flights during July. Perhaps in a hint of waning demand, AMZN announced it will be holding a second “Prime Day” sale this year (the original Prime Day is July 12-13) in Q4.  After the close, BAC said it will raise its dividend by 5%.  Meanwhile, MS raised its dividend by 11% and approved a new $20 billion share buyback plan as of the start of Q3.

SNAP Case Study | Actual Trade

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After the close, NKE and TCOM both reported beats on both the top and bottom lines.  However, CNXC missed on revenue while beating on earnings.  On the other side, JEF reported a beat on revenue while missing on earnings.  So far this morning, SNX reported beats on both lines.

In technical analysis news, 112 of the S&P500 components are trading above their 50sma.  These include GOOGL, GOOG, UNH, JNJ, CRM, PFE, MRK, BMY, ABBV, and VZ.  Of that same group, BMY and LLY are trading at 52-week highs.  However, 421 of the 502 are trading above their T-line (8ema).

In China news, the second-largest economy has now begun easing its “Covid Zero” policy restrictions.  Foreign travelers have had their “quarantine on entry” time cut in half.  At the same time, regional lockdowns have been lifted in many areas as covid rates have fallen.  In addition, for the first time since January 2020, Chinese President Xi will be traveling (but not too far) as he visits Hong Kong later this week.  Markets have taken all these announcements positively.

On the Russian invasion story, Russia continues its missile strikes on Kiev and other Western Ukrainian cities.  Most infamous of these was a strike on a shopping mall in the city of Kremenchuk.  G-7 leaders have labeled the attack a “war crime” as they are urgently discussing how they can reduce the price Russia receives for oil, thus actually reducing Russian revenues for the first time since the start of the war.  However, it is unclear (to say the least) that they can impact the price China or India pay Russia for oil.  The suggestion is that the G-7 can dictate the terms of shipping insurance to only cover oil below a certain limit price.  Separately, NATO announced it will be increasing the size of its “high readiness” forces in the Eastern part of the alliance to over 300,000 troops.  Also, Ukraine is now going to receive 3 Turkish Bayraktar TB2 attack drones at no cost after a crowdfunding campaign has paid for those weapons.

Overnight, Asian markets were green across the board.  Hong Kong (+2.35%), Australia (+1.94%), and New Zealand (+1.70%) paced the gains with Malaysia (+0.10%) a lagging outlier.  In Europe, stocks are mostly following Asia at mid-day.  The FTSE (+0.67%), and DAX (+0.87%), are leading the region higher with the CAC (+0.01%) and two minor exchanges either red or barely green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modest gap higher to start the day.  The DIA implies a +0.36% open, the SPY is implying a +0.47% open, and the QQQ implies a +0.61% open at this hour.  10-year bond yields are off a bit to 3.166% and Oil (WTI) is up half of a percent to $108.12/barrel in early trading.

The major economic news events scheduled for release Tuesday include May Goods Trade Balance and May Retail Inventories (both at 8:30 am), and Conf. Board Consumer Confidence (10 am). On the earnings front, we get a report from SNX before the open.  However, there are no major reports scheduled after the close.

In economic news coming later this week, on Wednesday, we get Q1 GDP, Crude Oil Inventories, and 2 Fed speakers.  On Thursday, we get May PCE Price Index, Initial Jobless Claims, May Personal Spending, and Chicago PMI.  Finally, on Friday we get June Mfg. PMI and June ISM Mfg. PMI.  There will also be the ECB Central Banking forum (6/27-6/29) where both Fed Chair Powell and ECB President Lagarde speak.

On the earnings front, on Wednesday we get reports from BBBY, GIS, MKC, MSM, PDCO, PAYX, SCHN, UNF, MLKN, and SGH.  Thursday, we get reports from AYI, STZ, WBA, and MU.  There are no reports on Friday, July 1.

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Stocks seem to be setting up for a modest gap higher again. Just be sure to remember that yesterday’s gap was met with reversal and whipsaw action has been the norm for quite some time. So, if you chase a gap, be prepared to take the volatility. GS analysts warned that the upcoming quarter’s earnings estimates are too high. While this may end up being true, that is a statement about the average and not very useful on any specific trade. The mid and longer-term trends remain strongly bearish, while the trend this week is strongly bullish. In addition, we are neither oversold nor over-bought at this point. Caution remains the watchword. Small, nimble, and/or hedged are not bad things. Bear in mind that “slow and steady” wins the race.

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. And always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. 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: STNG, BANF, BA, TGT, TUP, WMT, NFLX, QID, CVNA, AAPL, FNGU. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Russia Defaults, Durable Goods on Tap

Major indices gapped 0.8%-1% higher at the open Friday and followed-through sharply to the upside the first 30 minutes of the day.  However, from that point, all 3 major indices ground sideways in a tight range until the bulls stepped in at about 3:30 pm to surge into the close.  All 3 are now well above their T-line (8ema) and printing large, gap-up, white candles with no lower wick and little upper wick.  The SPY definitely qualifies as a Marubozu candle.  On the day, SPY gained 3.18%, DIA gained 2.70%, and QQQ gained 3.43%.  The VXX fell more than one percent to 23.12 and T2122 remains in the mid-range, but are now near the top-end of that range at 70.29.  10-year bond yields rose to 3.136% and Oil (WTI) pulled back late, but still closed up 2.75% to $107.14/barrel.  All-in-all, this completed the first up week of the month for any of the major indices, delivering 5.5% to 7.25% gains for the week of needed over-extension relief.  However, with 30 minutes left in the day, all this action has taken place on low volume.

In economic news, on Friday Fed member James Bullard (extreme hawk) said that the fears of a recession are overblown, with “consumers flush with cash built up over the pandemic.” In a similar vein, the IMF announced that they forecast the US will narrowly escape from having a recession in both the remainder of this year and 2023.  However, in data released by the Census Bureau Friday, it was reported that 15% of renters (8.4 million Americans) are behind on rent payments, with 3 million at risk of eviction within the next two months.  In a tangentially related story, on Friday, Fed Dove Daly joined the FOMC members who publicly say they are open to a 75 basis point hike in July.

In business news, after the close Friday, ULCC sweetened its offer to buy SAVE.  The new offer is $4.13/share ($2/share higher than the original bid).  This comes after JBLU had also increased its own bid for SAVE.  Shareholders of SAVE are set to vote on the takeover offers on Thursday.  Also, after the close, CVX announced it will sell it its CA campus and move the company headquarters to TX.  The company cited real estate market values and the opportunity to “right-size” its headquarters staff and facilities.  The move is expected to come during Q3 of 2023.

SNAP Case Study | Actual Trade

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As the month, quarter, and half-year all come to a close this week, some analysts (JPM and GS for example) are calling for a pop.  (Unless we rally hard early this week, we are looking at the worst market performance for six months since 1970.)  The idea behind these analyst calls is that both funds and individual investors will be reallocating their accounts to take advantage of the better valuations and to prepare for the slower economy expected ahead.  They also note that this reallocation will be coming in front of another long holiday weekend, meaning they expect traders to be in a better mood (potentially feeling better about buying).  However, remember that for any longer-term trades, earnings season kicks off again in mid-July. 

On the Russian invasion story, we are now more than 4 months into Russia’s “4 day war.”  The grace period on Russian bond debt payments expired Sunday. This means that Russia is now technically in default.  It also means that bond giant Pimco is now on the hook for about $2 billion in credit default swaps it bought up just prior to the February invasion.  In sanction news, Russia has decided to block rail traffic to Poland in retaliation for Lithuanian blocking of sanctioned cargo being shipped from Russia to Kaliningrad (Konigsberg) by road or rail.  While the EU tried to back down after the threat to Poland, the Lithuanian PM is standing strong on the sanction.  Elsewhere, Russian hackers stepped up attacks on western (mostly US) targets last weekend. The (likely FSB-controlled) hackers claim they have successfully hacked US infrastructure.  Specifically, they say they hacked XOM (shutting down XOM “Rewards+” fuel cards) nationally and hit SHEL systems in Texas.  Then on Sunday, the G-7 announced more sanctions on Russia, including a prohibition on importing Russian Gold.

In cryptocurrency news, (and as reported here in the past), Three Arrows Capital (a large crypto-focused hedge fund) is in jeopardy of defaulting on $675 million in loans.  With the Monday payment deadline at hand, the company is facing a liquidity crisis after its entanglement with the collapse of the TerraUSD and Luna stablecoins.  This plus the (perhaps related) collapse of cryptocurrency prices has 3AC hurting for cash as it already missed a 6/24 payment, meaning the whole $675 million loan is due today.

In technical analysis news, 10 of the DJIA 30 are trading above their 50sma.  These include MSFT, CRM, V, VZ, JNJ, UNH, IBM, MCD, MRK, and AMGN.  Interestingly, only 3 of the DJIA have a 50sma that is rising, including JNJ, IBM, and MRK. However, all but 3 of the 30 are trading above their T-line (8ema).  Those 2 laggards are CVX, CAT, and DOW.

Overnight, Asian markets were green across the board.  Hong Kong (+2.35%), Australia (+1.94%), and New Zealand (+1.70%) paced the gains with Malaysia (+0.10%) a lagging outlier.  In Europe, stocks are mostly following Asia at mid-day.  The FTSE (+0.67%), and DAX (+0.87%), are leading the region higher with the CAC (+0.01%) and two minor exchanges either red or barely green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modest gap higher to start the day.  The DIA implies a +0.36% open, the SPY is implying a +0.47% open, and the QQQ implies a +0.61% open at this hour.  10-year bond yields are off a bit to 3.166% and Oil (WTI) is up half of a percent to $108.12/barrel in early trading.

The major economic news events scheduled for release Monday are limited to May Durable Goods Orders (8:30 am) and May Pending Home Sales (10 am).  On the earnings front, there are no reports scheduled before the open.  However, after the close, we hear from SNXC, JEF, NKE, and TCOM.

In economic news coming later this week, on Tuesday we get May Goods Trade Balance, May Retail Inventories, and Conf. Board Consumer Confidence.  Then Wednesday, we get Q1 GDP, Crude Oil Inventories, and 2 Fed speakers.  On Thursday, we get May PCE Price Index, Initial Jobless Claims, May Personal Spending, and Chicago PMI.  Finally, on Friday we get June Mfg. PMI and June ISM Mfg. PMI.  There will also be the ECB Central Banking forum (6/27-6/29) where both Fed Chair Powell and ECB President Lagarde speak.

On the earnings front, on Tuesday, we hear from SNX.  Then on Wednesday, we get reports from BBBY, GIS, MKC, MSM, PDCO, PAYX, SCHN, UNF, MLKN, and SGH.  Thursday, we get reports from AYI, STZ, WBA, and MU.  There are no reports on Friday, July 1.

LTA Scanning Software

The bulls may well be following the weekend forecasts of GS and JPM and rallying into the coming end of the period and holiday. However, volatility is still the watchword in both the stock and bond markets. Intraday reversals and whipsaw action have been almost daily occurrences recently. So, caution and nimbleness remain the smart plays. Don’t be in a hurry to chase that gap. As the saying goes, slow is smooth, and smooth is fast. The mid-term and long-term trends remain strongly bearish, while the trend this week is strongly bullish. Just consider whether this is a market where you have an edge before you get into too many or too large of a position.

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. 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: ACCD, CHWY, PLTR, DKNG, ARKK, TTWO, SBUX, ZS, ZM, SNOW. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Banks Flush, Energy Edgy, Airlines Short-Staffed

The major stock indices gapped 0.4% – 0.9% higher at the open Thursday.  Then the QQQ immediately faded that gap before reversing to cross the gap again and run up to new highs at about 11:30 am.  The other 2 major indices simply ground sideways all morning after the gap.  From 11:30 am to 1 pm all 3 major indices sold off back down through the gap to the lows of the day before rebounding yet again to recross the gap in the late afternoon, closing at new highs for the day.  Six of the 10 sectors were up (with the Healthcare sector leading the way) and four of them were down (with Energy by far down the worst performer).  So, after tremendous volatility all 3 major indices printed indecisive, Spinning Top action.  Of the 3, only the QQQ has managed to cross its T-line with the other two majors failing a T-line retest.  Again Thursday, this happened on lower-than-average volume.  On the day, SPY gained 0.95%, DIA gained 0.70%, and QQQ gained 1.49%.  The VXX fell almost 2% to 23.40 and T2122 climbed, but remains inside oversold territory at 16.88.  10-year bond yields fell to 3.091% and Oil (WTI) rebounded off early lows to close down 2% to $104.06/barrel.

During the day we got a number of bad economic data points.  Q1 Current Accounts (difference between the value of imports and exports) came in at a record $291 billion.  Initial Weekly Jobless Claims also came in slightly above forecast.  Later we heard that the June Mfg. PMI and June Services PMI both came in below expectation. However, it is worth noting that both indexes came in above 50, meaning there was more activity in the last month than in the previous month. This added to the energy market fears of a tumble in economic activity (drop in demand).

Related to dividends, the results of the Fed Stress Test on major banks showed that all 33 institutions that were tested passed the test with flying colors.  The test shows these banks can withstand a hypothetical scenario of 10% unemployment, a 40% drop in real estate prices, and a 55% drop in stock prices.  Passing the test now frees up those major banks to pay dividends and initiate share buyback programs.

SNAP Case Study | Actual Trade

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In business news, UAL announced they will drop 12% of their flight schedule, citing labor shortages (pilots in particular).  This follows Wednesday’s AAL announcement that they are dropping flights to 4 smaller cities for the same reasons. Elsewhere, INTC stepped into politics by warning they would have to delay their recently announced new $20 billion chip fabrication plant in Ohio…unless Congress passes the $52 billion semiconductor industry subsidy package very soon.  INTC CEO Pat Gelsinger went on to say the company’s 2021 commitment to spend $100 billion on increasing US chip production would need to be reconsidered unless the bill becomes law soon.  (Two different versions of this bill have already passed in the House and Senate.  The versions are now being negotiated to reach a final form that can be passed and then sent to President Biden for signature. Apparently, INTC thought its threat might be enough to get a finalized bill across the finish line sooner.)

In technical analysis news, after Thursday, among SPY members, only 48 tickers closed above their 50sma.  Among these are BAC, JPM, QCOM, AVGO, V, HD, COST, PYPL, MU, KO, C, PFE, ADBE, BA, PG, DIS, ABBV, NFLX, WMT, MA, CSCO, and CMCSA.  21 of the SPY components are trading at 52-week lows, including META, DE, CAT, FCX, NXPI, GE, MO, DOW, EXPE, EMR, HLT, CMI, MLM, BBWI, WYNN, IR, VMC, RHI, WRK, LNC, and DVA.  In addition, 236 of the SPY constituents are now above their T-line (8ema).

After the close, FDX reported that is missed on both the revenue and earnings lines.  So far this morning, KMX has also beat on both the top and bottom lines.  CCL reports at 9:15 am.

On the Russia story, China and India have stepped up their purchase of Russian oil and gas.  In fact, they’ve bought so much that despite Western embargoes, sanctions, and Russia’s own reduction of gas shipments to Europe, they have sold more energy in the last month than ever before.  Simply put, Russia is rolling in money thanks to their friends China and India.  At this point, the EU is seriously worried about a 100% shutdown of Russian natural gas pipelines.  Germany, Italy, Austria, and the Netherlands are all scrambling to prepare coal-fueled power plants in the event Moscow turns off their gas altogether.  This caused the EU to warn of the collapse of global energy markets if Russia were to shut down its pipeline in the fall/winter.  In particular, Germany warned of a “Lehman Brothers moment”  for energy markets if that happened with contracts being broken as countries fight each other for every cubic foot of natural gas, every gallon of oil, and railcar of coal.

Overnight, Asian markets were green across the board.  South Korea (+2.26%), Hong Kong (+2.09%), and Shenzhen (+1.37%) led the region higher.  In Europe, stocks are mostly following Asia’s example at mid-day.  However, 3 European exchanges are also sharply lower as Finland (-2.85%), Sweden (-1.60%), and Russia (-1.09%) are well in the red.  The FTSE (+1.41%), DAX (+0.95%), and CAC (+2.11%) are leading their region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward another gap to start the day, this one higher.  The DIA implies a +0.67% open, the SPY is implying a +0.78% open, and the QQQ implies a +0.90% open at this hour.  Meanwhile, 10-year bond yields are up to 3.117% and Oil (WTI) is up more than 1.8% to $106.20/barrel in early trading.

The major economic news events scheduled for release Friday are limited to Michigan Consumer Expectations and May New Home Sales (both at 10 am).  We will also hear from Fed hawk Bullard at 7:30 am.  On the earnings front, we get reports from KMX and CCL before the open.  There are no major reports scheduled after the close.

In cryptocurrency news, hackers have again pulled off a major theft, raising fear in the reeling asset class.  This time, $100 million worth of Ethereum from Horizon (a so-called blockchain bridge, which acts as a network hub allowing tokens to be exchanged between blockchains).  Relatively speaking, this was a smaller theft compared to the $600 million Ronin Network and $320 million Wormhole heists.  Still, in a market reeling from stablecoins that go to zero value, threats of government oversight, regulation, and taxation around the globe, this is yet another blow to the “DeFi” movement.

LTA Scanning Software

Volatility is still the watchword in US markets and in particular the stock and bond exchanges. Intraday reversals and whipsaw action still reign in this market. Today we look to be gapping higher at the open again, but so far none of the major indices have taken out the top of the range we’ve dropped into the last 2 weeks. So, caution and taking your time remain the smart plays. Remember that we immediately faded the gap seemingly every day in the last week. So, don’t be in a hurry to chase that gap. As the saying goes, slow is smooth and smooth is fast. The mid-term and long-term trends remain strongly bearish, while the trend this week is bullish and we are still oversold, but more to the edge of that territory than the last few days. So, there isn’t much of an edge for trend traders at the open today.

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. 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: BKKT, TUP, COIN, W, XBI, SHOP, U, TDOC, TLRY, BYND. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Powell Testifies, API Hints at Crude Build

On Wednesday, stocks gapped down about 1% – 1.25% at the open.  However, this was a bear trap as the bulls immediately went on a face-ripping rally in the first hour that took stocks back up through the gap and even another percent higher.  This was yet another trap as the bears then sold the market off back down into the gap.  This seesaw action continued all day with prices closing below the prior day’s close.  This left us with gap-down white candles with large upper wicks in all 3 major indices.  On the day, SPY lost 0.18%, DIA lost 0.22%, and QQQ lost 0.19%.  The VXX lost 3.35% to 23.68 and T2122 fell back into the oversold territory at 8.42.  10-year bonds plunged lower to 3.164% and Oil (WTI) also took a beating, falling 4.7% to $104.37/barrel.

During the day, Fed Chair Powell told the Senate he was “strongly committed” to bringing down inflation.  (Like he was going to say “You know, high inflation doesn’t really both me, so I’m going to let it slide.”)  He clarified that the Fed’s commitment means that they will continue to raise rates until there is “compelling evidence” that inflation is coming down.  During the session, Republicans pressured Powell to clamp down on inflation while Democrats (especially Senator Warren) warned him about causing a recession while he is fighting inflation.  Later in the Day, Chicago Fed Pres. Evans said he thought a 75-basis-point “big move” was reasonable for July.  In other economic news, President Biden called on Congress to suspend the Federal Gasoline Tax (18 cents/gallon for gas and 24 cents/gallon for diesel) for the next 3 months.  However, the number 2 Republican in the Senate (Thune) said the tax holiday is dead on arrival.

In business news, JPM laid off hundreds of employees and reassigned hundreds of others from their mortgage processing departments.  The company believes rising rates will kill mortgage demand in months to come.  Elsewhere, the American Petroleum Inst. Reported that their survey found that US Crude Oil inventories unexpectedly rose 5.6 million barrels (compared to an expected 1.4 million barrel draw-down).  They also reported that gasoline stocks rose 1.2 million barrels.

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In long-term economic concern news, the Western drought is no longer a joke.  The US Bureau of Reclamation has told Western states (Colorado, New Mexico, Wyoming, Arizona, Nevada, and California) that they have 60 days to deliver plans to cut water usage from the Colorado River by 2-4 million acre-feet by next year.  (If the states do not deliver those plans, the Federal government will unilaterally decide the plan.)  This amount of water is the equivalent of enough water for 20-40 million people for an entire year.  Obviously, not all water drawn from the Colorado River is used for residential use.  However, another way to look at this is that 2-4 million acre-feet is more water than the entire state of Arizona uses from the Colorado River over the course of a year.  In addition, the projects are that by 2024 Lake Powell will no longer be able to produce hydroelectric power.

In technical analysis news, after Wednesday’s volatile session, among QQQ members, only META and ILMN remain at 52-week lows among the 98 QQQ members.  (None of the 98 QQQ members are at 52-week highs.)  41 of the 98 are currently above their own T-line (8 ema), including TSLA, AMZN, MSFT, GOOG, COST, and NFLX.  Among the 57 or 98 that are below their T-line are AAPL, NVDA, AMD, META, INTC, QCOM, AVGO, PYPL, MU, ADBE, CSCO, and CMCSA.  In terms of the 50sma, only 11 of the 98 are currently above their 50-day simple moving average, including JD, TMUS, PDD, VRTX, ZM, BIDU, SNPS, MNST, EA, BIIB, and SGEN.

After the close, FUL, KBH, and WOR all reported beats on both the revenue and earnings lines.  So far this morning, DRI, FDS, GMS, and RAD all reported beating on the top and bottom lines.  Meanwhile, ACN beat on the revenue line while missing on the earnings line.

Overnight, Asian markets were mixed but leaned to the green side.  Shenzhen (+2.19%), Shanghai (+1.62%), and Hong Kong (+1.26%) led the gainers.  Meanwhile, South Korea (-1.22%) and Taiwan (-1.12%) paced the losses.  In Europe, stocks are mixed on modest moves as of mid-day.  The FTSE (+0.21%), DAX (-0.40%), and CAC (+0.51%) are typical of the even red and green spread across the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.43% open, the SPY is implying a +0.70% open, and the QQQ implies a +1.00% open at this hour.  10-year bond yields (3.13%) are down and Oil (WTI) ($105.94/barrel) is trading up in early action.

The major economic news events scheduled for release Thursday include Q1 Current Accounts and Weekly Jobless Claims (both at 8:30 am), Mfg. PMI and Services PMI (both at 9:45 am), Crude Oil Inventories (11 am), and Fed Bank Stress Test Results (4:30 pm).  Fed Chair Powell also testifies before the House at 10 am. On the earnings front, we get reports from ACN, DRI, FDS, GMS, and RAD before the open.  Then after the close, FDX reports.

In economic news coming later this week, on Friday, we get Michigan Consumer Expectations and May New Home Sales.

On the earnings front, on Friday, we hear from KMX and CCL.

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Beware of chasing gaps. Volatility and intraday whipsaw action still reigns in this market. Today we look to be gapping higher at the open, but so far none of the major indices have even taken out their T-line. And always remember that brutal gap and reverse from just yesterday. So, caution and taking your time are the smart plays. As the saying goes, slow is smooth and smooth is fast. The trend remains strongly bearish, but we are back in oversold territory. So, there is not much in the way of an edge at the open today.

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. 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: FUTU, VEEV, TUP, TSLA, CHWY, TTWO, ZM, USO, DT, PLTR, BMY, VIPS. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bears Say “Not So Fast” to the Relief Rally

The bulls came back from the long weekend with some energy.  The major indices gapped up 1.5% – 1.7% at the open Tuesday.  All 3 managed to deliver some follow-through the first 90 minutes of the day.  At that point, all 3 began trading sideways the rest of the session.  This action has created a Morning Star type signal in the SPY and DIA.  Meanwhile, the QQQ followed up Friday’s Bullish Harami with a gap-up white candle that tested and failed its T-line (8ema).  However, all 3 also had upper wicks.  It is worth noting that this action all happened on far lower-than-normal volume.  On the day, SPY gained 2.49%, DIA gained 2.20%, and QQQ gained 2.33%.  The VXX fell a little over 1% to 24.38 and T2122 climbed out of the oversold territory into the mid-range at 36.56.  10-year bonds surged to 3.307% and Oil (WTI) gained just under 1% to $110.58/ barrel. 

Before the open Tuesday, K announced that it will split into 3 listed companies (Snack Foods, Cereals, and Plant-based).  The proposed spinoffs would not be finalized until 2023.  As a result, K gapped about 5.14% higher at the open, but then sold off during the session to close up 1.95%.  Later, during the day, the Dept. of Justice reached a settlement with META over its violations of federal housing law via discriminatory advertising.  If the court agrees, META would pay the maximum allowable fine.

Late in the day, Reuters reported on a new research report released by the San Fran. Fed which finds roughly half of US inflation is a result of supply issues.  The research found that another third of inflation is demand-driven. The remainder is due to unknown (ambiguous) causes. In other Fed news, Richmond Fed President Barkin told the press that he agrees with Chair Powell’s assessment that the FOMC will do a hike of 50-75 basis points at the end of July.

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In technical analysis news, after Tuesday’s strong session, only DVA, META, WRK, AOS, SSWI, and HD remains at 52-week lows among S&P500 members.  (None of the 502 members of SPY are at 52-week highs.)  114 of the 502 are currently above their T-line, including TSLA, AAPL, NVDA, AMZN, MSFT, GOOGL, UNH, BAC, JNJ, COST, KO, C, BA, MRK, BMY, ABBV, WMT, CSCO, and VZ.

After the close Tuesday, LZB beat on both lines. So far this morning, KFY and WGO also beat on both the revenue and earnings lines.

In an interesting twist, mortgage demand surged 8% week-on-week.  What makes this interesting is that this happened as interest rates made the largest jump higher in the last 13 years (up to 5.98% from 5.65% last week for a 30-year, fixed-rate mortgage).  Most of this jump in demand came from a surge in the adjustable-rate mortgage applications, meaning home buyers are betting the Fed was right last year and inflation will be “transitory” and come back down.  Also of note is that the “average loan” applied for is $420,000, well down from the $460,000 peak earlier in the year according to CNBC.  This would mean that on average, buyers are looking for more modest homes (in the area of 10% less expensive than they were buying earlier this year).

The CEO of Daimler Truck (the world’s largest truck maker based on the dominance of Europe) told CNBC that his company is now facing enormous supply chain pressure.  He said the company is facing the worst shortage of parts he has seen in his 25-year career with the company, with thousands of trucks unable to progress in manufacturing due to a lack of parts.  He went on to say the company is facing heavy pressure from inflation in the form of energy costs (remember this is a German company subject to shortages and energy costs heavily influenced by Russian supply reduction and also resourcing of parts that used to come from Ukraine).  While he said there are signs of an easing in chip shortages out of Asia, it is the more traditional parts that are in the worst shape in terms of short supply.  All this said, it is important to realize the company is apparently more than passing on those costs as it reported an 17% year-on-year revenue increase and an 11% year-on-year profit increase just last month.  

Overnight, Asian markets were down sharply across the board.  Hong Kong (-2.56%), Taiwan (-2.42%), and South Korea (-2.74%) paced the losses Meanwhile, New Zealand (-0.21%) and Japan (-0.37%) were the “winners” in the region.  In Europe, we have a very similar story taking shape at mid-day.  Only Russia (+0.15%) shows any green with the FTSE (-1.18%), DAX (-1.89%), and CAC (-1.46%) 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 -1.05% open, the SPY is implying a -1.24% open, and the QQQ implies a -1.44% open at this hour.  10-year bond yield are plummeting to 3.199% and Oil (WTI) is dropping hard, down 3.35% to $104.80/barrel in early trading.

The major economic news events scheduled for release Wednesday Fed Chair Powell testifies before Congress (9:30 am) and Fed Member Harker speaks at 11:30 am. On the earnings front, KFY and WGO report before the open.  Then after the close, FUL, KBH, SCS, and WOR report.

In economic news coming later this week, on Thursday we get Q1 Current Accounts, Weekly Jobless Claims, Mfg. PMI, Services PMI, Crude Oil Inventories, Fed Bank Stress Test Results, and Fed Chair Powell testifies again.  Finally, on Friday, we get Michigan Consumer Expectations and May New Home Sales.

On the earnings front, this is another very slow week.  On Thursday, we get reports from CAN, DRI, FDS, GMS, RAD, and FDX.  Then on Friday, we hear from KMX and CCL.

LTA Scanning Software

Beware of chasing gaps. After a brutal week and a 3-day weekend to recover, traders look to be gapping the market higher at the open. However, whipsaw action has been the hallmark of markets lately and nothing material has changed since last week. The trend remains strongly bearish and we remain well oversold. If you just can’t help yourself from going long, be sure you are focused, hedged, and/or small. You will need to be quick. Remember, feeling better after an extra day off is no reason to start picking bottoms.

Trading is our job. So, do the work and follow the process. Wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich steadily over the long run in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bulls Looking to Start Week With Gap Up

On Friday, markets opened within a half of one percent of the Thursday close.  Stocks then ran higher for half an hour and back down for an hour to the lows of the day.  The rest of the session was spent waffling back and forth between those extremes.  As we headed into the long weekend, this has left us with indecisive, Spinning Top candles in all 3 major indices.  The QQQ version was also a bullish Harami candle.  The biggest move on the day was made by the QQQ indice with the Energy sector far and away the weakest sector with Technology and Consumer Cyclicals leading the gains.  The VXX fell almost 3% to 24.66 and T2122 climbed, but markets remain deeply oversold at 3.66.   10-year bond yields fell sharply to 3.231% and Oil (WTI) got crushed, being down more than 6.5% to $109.85/barrel at day end.

In AMZN news, the New York Times reported an internal AMZN memo.  The memo said the company faces a massive national hiring and retention crisis.  For example, the memo said AMZN Phoenix AZ warehouses have already exhausted the entire “community employee candidate pool” due to massive turnover.  (There are no more people in the Phoenix area who either do not already work for AMZN or who would consider taking (or retaking) a job in an AMZN warehouse.)  So, the facility must either drop standards (eliminating drug and criminal checks), go understaffed, pay to bring in candidates from far away, or find ways to streamline and/or replace workers with robots.  The memo went on to say they project that Central CA (serving the LA region) warehouses will reach that level of labor emergency by year-end.  In addition, and more ominously, the memo said the company will face the same situation nationwide across the AMZN warehouse network by 2024.  The metric given in the memo is that the Amazon warehouses are facing a staggering 3% PER WEEK workforce attrition rate in their warehouses.

In other business news, thousands of US-originating flights were canceled over the weekend as airlines cite labor shortages. Among the airlines impacted, AAL canceled 28% of its flights, DAL canceled 26%, UAL canceled 22%, and LUV canceled 37% of its flights over the weekend.  This follows a similar situation with thousands of canceled flights on Memorial Day weekend.  The bottom line is that it appears US airlines are not going to be able to capitalize on the summer (heaviest) travel season again this year.  Elsewhere, employees of a Maryland AAPL store have voted to unionize.  While only a tiny portion of the overall AAPL workforce unionized, this is the first crack in the dam and the first loss since the company started spending considerable time and money to defeat union votes in other stores (such as Atlanta).

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In cryptocurrency news, all major coins continued their fall this weekend.  On Saturday, Bitcoin briefly fell below $17,750 and Ethereum fell below $900. That represents a 75% fall from the November highs for Bitcoin.  For Ethereum, the carnage is even worse as it has fallen 82% from its own high (also reached in November 2021).  CNBC also reported that a $10 billion Crypto hedge fund (Three Arrows Capital) is on the brink of insolvency.  This has resulted in panic selling by even the crypto die-hards and many supposedly hard-core “keep government out” industry leaders to calling for government regulation (and a government agency responsible for maintaining market liquidity).

In technical analysis news, the S&P500 posted its 10th down week in the last 11.  As a result (and as pointed out by a member of the HRC Trading Room), only 10 of the 502 tickers (1.9%) in the S&P500 are currently above their 50sma.  At the same time, 191 of 502 are trading at their 52-week low, including META, INTC, BAC, JPM, QCOM, HD, MU, ADBE, DIS, CMCSA, TXN, WFC, LOW, AMAT, F, TGT, GS, LRCX, ABT, and MS among others.  There are no members of the S&P500 trading at 52-week highs.

On the Russia story, on Saturday the CEO of Russian oil giant Rosneft (Sechin) told the press that BP remains it’s the company’s largest private shareholder (the Russian government owns a majority). In addition, he said BP has expressed a desire to remain an active participant in Rosneft projects.  In Germany, in an attempt to get ahead of next winter, the government has fast-tracked and utilities are now in the process of reopening coal-fueled electricity generation plants. This will allow the country to refill all its natural gas storage tanks before winter.  Germany, Poland, Italy, Austria, and Slovakia have all reported 40% reductions in gas shipments from Russia…reportedly due to “technical problems,” but clearly in retaliation over the EU sanctions and providing of weapons to Ukraine.  On the ground, the cities of Kharkiv (Northeast) and Mykolaiv (South) are under intense shelling again today as Russia continues its scorched earth approach to its land seizure campaign.  Meanwhile, in previously captured Mariupol the city’s Mayor reports that 100,000 people still have no access to drinking water, gas, electricity, or even sewage drainage.  Russia does provide some water once per week but is even restricting access to food in an effort to drive people to move to a Russian camp (former prison camp).

Overnight, Asian markets were mostly solidly green.  The lone exceptions were mainland China where Shenzhen (-0.51%) and Shanghai (-0.26%) lagged.  Taiwan (+2.35%), Hong Kong (+1.87%), and Japan (+1.84%) paced the gains.  In Europe, a similar story is taking shape at mid-day.  Only Russia (-1.08%) and Portugal (-0.81%) are in the red.  Meanwhile, the FTSE (+0.67%), DAX (+0.81%), and CAC (+1.18%) are headed higher with most smaller exchanges leading the way.  As of 7:30 am, US Futures are pointing toward a strong gap higher early.  The SIA implies a +1.51% open, the SPY is implying a +1.66% open, and the QQQ implies a +1.66% open at this hour.  10-year bond yields are back up to 3.284% and Oil (WTI) is up 1.75% to $109.88/barrel in early trading.

The major economic news events scheduled for release Tuesday are limited to May Existing Home Sales (10 am).  There are no major earnings scheduled for the day.

In economic news coming later this week, on Wednesday Fed Chair Powell testifies before Congress.  On Thursday we get Q1 Current Accounts, Weekly Jobless Claims, Mfg. PMI, Services PMI, Crude Oil Inventories, Fed Bank Stress Test Results, and Fed Chair Powell testifies again.  Finally, on Friday, we get Michigan Consumer Expectations and May New Home Sales.

On the earnings front, this is another very slow week.  On Wednesday, we hear from KFY, WGO, FUL, KBH, SCS, and WOR.  Then on Thursday, CAN, DRI, FDS, GMS, RAD, and FDX.  Finally, on Friday, we hear from KMX and CCL.

LTA Scanning Software

Beware of chasing gaps. After a brutal week and a 3-day weekend to recover, traders look to be gapping the market higher at the open. However, whipsaw action has been the hallmark of markets lately and nothing material has changed since last week. The trend remains strongly bearish and we remain well oversold. If you just can’t help yourself from going long, be sure you are focused, hedged, and/or small. You will need to be quick. Remember, feeling better after an extra day off is no reason to start picking bottoms.

Trading is our job. So, do the work and follow the process. Wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich steadily over the long run in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Market Rethinks Fed and Recession Risk

Markets gapped 0.75% – 1.25% higher at the open as traders waited on the Fed.  After the gap, stocks just rollercoastered sideways in a fairly tight range until 2 pm. However, as usual, when the Fed announced its decisions, we saw wide-ranging candles and heavy whiplash action printing new highs and hew lows on the day during the last 2 hours.  Overall, all 3 major indices are printing indecisive Spinning Top candles, just trying to relieve the overextension we’ve had from the T-line and in terms of the 4-week New High/Low Ratio.  Nine of the 10 sectors were in the green with Technology leading the way and Energy in the red on a risk-on session.  On the day, SPY gained 1.40%, DIA gained 0.96%, and QQQ gained 2.50%.  The VXX fell 5.4% to 23.97 and T2122 climbed, but still remains in the oversold territory at 12.00.  10-year bond yields dropped sharply to 3.288% and Oil (WTI) fell 2.6% to $115.84/barrel.

During the afternoon, the Fed raised rates by 0.75% (the largest hike since 1994) to a new range of 1.5%-1.75%, the highest level since before the pandemic.  The Fed also announced its “Dot Plot” where individual FOMC members on average now think the year will end with that benchmark rate at 3.4% (up 1.5% from their forecast in March).  In addition, they cut their GDP growth forecast to +1.7% for the year (down from +2.8% in March).  Fed Chair Powell said that he does not expect 75 basis point hikes to become common, but he does expect a 50-75 basis point hike in July.  The committee also sees unemployment (now 3.6%) moving up to 4.1% by 2024, which is not much of an increase (low-ball estimate?) given the demand destruction that needs to take place to get inflation down to the +2% target.

SNAP Case Study | Actual Trade

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In global economic news, at an emergency meeting Wednesday the ECB announced a plan to reduce the borrowing costs of the Euro Zone’s most indebted countries.  (The term they used was “avoiding fragmentation,” but they were referring to the spread in interest rates between Germany and lower-rated countries like Italy and Greece.)  The new scheme plans to cap borrowing costs by buying the bonds themselves under loose (as yet undecided) criteria.  Then overnight, the Bank of England raised UK interest rates for the 5th consecutive meeting, again moving 0.25%. This came as the UK central bank also announced that the UK economy is shrinking (falling 0.1% in March and 0.3% in April). So, the UK is now clearly dealing with stagflation as inflation is a bit over 11% and they are also experiencing a falling GDP. The British Pound fell 0.80% against the dollar after the announcement.

Elsewhere abroad, Reuters reported after the close that the WTO is considering e-commerce tariffs.  There has been a moratorium on such tariffs in place since 1998, but nations such as India, Pakistan, Indonesia, and South Africa are threatening to block another extension of the moratorium with those countries now forgoing tens of billions of dollars in revenue annually as a result of that moratorium.

On the Russia story, President Biden announced another $1 billion in humanitarian and military aid for Ukraine. Among the weapons in this tranche are 155mm howitzer shells (made by GD), HiMARS rockets (made by LM), and trucks to tow 155mm howitzers (made by OSK).  Elsewhere, Russia reduced the flow of natural gas through its pipeline to Europe again, bringing the total reduction to 60%.  Gazprom said it was doing so in retaliation over Canadian sanctions preventing SMNEY (Siemens Energy) from delivering overhauled equipment.  So, overnight Germany’s Economy Minister Habeck urged all homes and businesses to scale-back natural gas usage with the specter of rationing ahead (not to mention that natural gas prices have spiked 35% in Germany this week due to the supply reduction). All of this is pressuring the Western alliance against Russia as France has already begun talking about Ukraine’s need to compromise (give up land) with Russia eventually and Germany and Italy are slow-playing providing the arms they promised Ukraine. At the same time, the US, UK, and former Soviet satellite states now in NATO are standing strong.

So far this morning, CMC and JBL have both reported beats on both the revenue and earnings lines.  KR reports at 8 am.

Overnight, Asian markets were mixed, but leaned to the downside.  Hong Kong (-2.17%), India (-2.11%), and Thailand (-2.04%) paced the losses.  Meanwhile, Malaysia (+0.94%) and Japan (+0.40%) led the gainers with a handful of other exchanges only modestly in the green.  In Europe, with the exception of Russia, stocks are deeply in the red across the board at mid-day.  The FTSE (-2.44%), DAX (-2.93%), and CAC (-2.44%) lead the way on trading volume with many smaller exchanges making bigger moves down in early afternoon trading.  As of 7:30 am, US Futures are pointing to a significant gap lower after rethinking the Fed announcements overnight.  The DIA is implying a -1.82% open, the SPY implies a -2.25% open, and the QQQ is implying a -2.65% open at this hour.  10-year bond yields have spiked back up to 3.45% and Oil (WTI) is off 1.25% to $113.88/barrel in early trading.

The major economic news events scheduled for release Thursday include May Building Permits, May Housing Starts, Weekly Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am).  The major earnings scheduled before the open are CMC, JBL, and KR.  Then, after the close, we get a report from ADBE.

In economic news coming Friday, we get May Industrial Production and hear from Fed Chair Powell again.  Friday is also a Quadruple-witching day as well as the last day before a 3-day weekend.

LTA Scanning Software

After the Fed’s (expected) rate hike on Wednesday, as usual, the market has had a night to rethink Chair Powell’s words. In hindsight, it appears the market is now going to put more weight on the probability of a recession after Powell said the landing may be bumpier than previously expected during his presser. Therefore we are staring at a gap down open and bond rates continue to show high volatility as they trend higher. Jobless Claims and the Philly Fed Mfg. Index may have some sway on markets, especially if they report unexpected numbers. However, the main driver traders need to watch is the repricing of stocks based on an increased likelihood of recession sometime in the next 12 months.

The whipsaw is very real during times when we are thinking about changing trends and as we’ve seen lately, gap-chasers can get hurt. Trading is our job. So, do the work and work the process. Wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily over the long run in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Today is All About The Fed

On Tuesday the PPI came in a bit down from last month (but still 10.8% on an annual basis) and as a result, the premarket rally faded a bit.  Markets still gapped between a quarter of a percent and three-quarters of a percent higher at the open.  All 3 major indices then whipsawed back and forth all day.  This left us with black-bodied Spinning Top candles in all 3 of those indices.  It is worth noting the volume dropped back to normal or slightly below normal across all major indices.  On the day, SPY lost 0.30%, DIA lost 0.42%, and QQQ managed to eke out a gain of 0.18%.  The VXX fell just under 2% to 25.33 and T2122 climbed slightly to 2.22.  10-year bond yields climbed to 3.479% and Oil (WTI) fell to $118.51/barrel.

Traders are now fully expecting the Fed to raise rates by three-quarters of a percent at 2 pm.  Bond yields are incredible turmoil as the 2-year, 5-year, and 10-year bonds now all yield more than the 30-year (all are inverted).  In fact, the 5-year is the highest yield of those four T-bills.  So, we also have a 5-yr vs 10-yr inversion.

After the close, ASTL missed on revenue by almost 23%, yet still managed to beat on earnings.  Also after the close, MNST announced an increase of $500 million in its share buyback plan ($157 million also remains unspent in its previously-authorized buyback program). 

SNAP Case Study | Actual Trade

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In cryptocurrency news, COIN announced they are letting 18% of their workforce go.  This comes on top of the recent Luna stablecoin failure and other stablecoins losing parity with the dollar.  Bitcoin fell another 7% and is now in the $21,500 area (down 55% on the year) and fell another $1,000 overnight to $20,500.  The second-largest cryptocurrency (Ethereum) is down even more, now at $1,178 which is down 69% on the year.

30-year, conforming mortgage rates surged to 6.28%.  This is a dramatic rise as the rate was 5.55% just a week ago.  As a result, on a $400,000 home, the mortgage payment (without insurance or property taxes) climbed to $1,976/month, a 41% increase on the year.  Of course, this spike has killed mortgage demand with total mortgage applications down 53% from the same week one year ago. 

On the earnings front, this is a very slow week.  On Thursday we get reports from KR, CMC, JBL, and ADBE.  There are no earnings reports on Friday.

Overnight, Asian markets were mixed but leaned red with China up and the rest of the region down.  Hong Kong (+1.14%), Shenzhen (+0.95%), and Shanghai (+0.50%) were the only green in the region with South Korea (-1.83%), Malaysia (-1.50%), and Japan (-1.14%) pacing the losses.  However, in Europe, stocks are nearly green across the board.  Only Norway (-0.64%) is in the red with the FTSE (+1.13%), DAX (+1.13%), and CAC (+1.06%) leading the region higher.  As of 7:30 am, US Futures are pointing toward a moderate gap higher to start the day.  The DIA implies a +0.49% open, the SPY is implying a +0.63% open, and the QQQ implies a +0.85% open at this hour.  10-year bond yields have plummeted back to 3.36% and Oil (WTI) is down half of a percent to $118.33/barrel in early trading.

The major economic news events scheduled for release Wednesday include May Retail Sales, May Import/Export Price Indexes, and NY Empire State Mfg. Index (all at 8:30 am), April Business Inventories (10 am), Crude Oil Inventories (10:30 am), Q2 Fed Interest Rate Projections, Fed Rate Decision, and Fed Statement (all at 2 pm), and Fed Chair Press Conference (2:30 pm).  There are no major earnings scheduled for the day.

In economic news later this week, on Thursday we see May Building Permits, May Housing Starts, and Philly Fed Mfg. Index.  Finally, on Friday we get May Industrial Production and hear from Fed Chair Powell again.

LTA Scanning Software

Today will be all about the reaction to the Fed decision and press conference. Although the market has priced in a 0.75% rate hike today, the dot plot (interest rate projections), statement, and especially what Fed Chair Powell says and how he replies to questions are likely to cause major volatility. Be extremely careful trying to react quickly to the news. The market will likely whipsaw this afternoon and again in the morning as traders overreact, overcompensate again, and then finally whip back after thinking on it overnight. The point is, that there is no need to be in a hurry.

The whipsaw is very real during times when we are thinking about changing trends and as we’ve seen lately, gap-chasers can get hurt. Trading is our job. So, do the work and work the process. Wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily over the long run in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

PPI Looms as CNBC Says 3/4 Hike Likely

On Monday, the bears delivered a huge (2.2% – 3%) gap-down following Friday’s ugly gap-down black candle.  We then saw bearish follow-through (of the gap) that reached the lows at about 11 am. From that point, we saw whipsaw action back and forth between the gap and the morning lows, before heading South to new lows late in the afternoon.  This has left us with large gap-down Spinning Top type candles in all 3 major indices. This all happened on greater the average volume.  All 10 sectors were bright red, with “growth sectors” like Consumer Cyclicals, Basic Materials, and Technology taking the biggest hits. 

The 3 major indices are all now trading well below previous 52-Week Lows, but are also still 4%-8% above their rising 200sma.  All 3 are also far below their T-line, meaning we may well see at least a bounce soon.  On the day, SPY lost 3.83%, DIA lost 2.78%, and QQQ lost 4.65%.  The VXX spiked 10.24% to 25.72 and T2122 shows us deep in the oversold territory at 1.67.  10-year bond yields absolutely screamed higher to 3.366% and Oil (WTI) gained slightly after being down 2% early in the day, closing at $120.86/barrel.

The big fear Monday was that high inflation (as typified by a much hotter than expected CPI on Friday) will lead to a three-quarter or even one-percent rate hike on Wednesday.  This caused bond rates to spike, stocks to gap down and follow-through, and even crypto to selloff.  Fed Chair Powell has repeatedly said he has a strong preference for only multiple half-percent rate hikes in the past.  However, during the afternoon, the Wall Street Journal reported that sources tell them that FOMC voters are entertaining a 0.75% hike on Wednesday.  In fact, CNBC’s Steve Liesman reported that his sources tell him a three-quarters of a percent hike is likely this week.  If the Fed does this, it would be the largest hike since 1994.

SNAP Case Study | Actual Trade

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After the close, ORCL beat estimates on both the revenue and earnings lines.  The company said its Cloud business (infrastructure as a service and software as a service) rose more than expected and this was the key to the beats.  ORCL was up 13.5% in after-hours trading.

We now have bond rate inversions (a better yield for short-term bond than long-term bond).  Both the 2-year and 5-year bonds now have higher yields than the 10-year.  In addition, the Dollar is incredibly strong.  at its highest level against the Yen since 1998.  The Dollar is up 22% versus the Yen and up 15% versus the Euro in the last 12 months.

In economic news later this week, on Wednesday, we get Retail Sales, NY Empire State Mfg. Index, April Business Inventories, Crude Oil Inventories, Q2 Interest Rate Projections, Fed Rate Decision, Fed Statement, and Fed Chair Press Conference.  On Thursday, we see May Building Permits, May Housing Starts, and Philly Fed Mfg. Index.  Finally, on Friday we get May Industrial Production and hear from Fed Chair Powell again.

Overnight, Asian markets were mixed, but leaned to the red side.  Australia (-3.55%) and New Zealand (-2.59%) were outliers, showing by far the largest losses.  Meanwhile, Malaysia (+1.12%) and Shanghai (+1.02%) were by far the biggest gainers and perhaps outliers from the other very modestly green winners of the region.  In Europe, stocks are leaning heavily to the red with only Russia and Norway showing even modest gains at mid-day.  The FTSE (-0.82%), DAX (-0.86%), and CAC (-1.05%) lead the way and are typical of early afternoon trading.  However, Greece (-4.50%) is an outlier to the downside.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.12% open, the SPY is implying a +0.29% open, and the QQQ implies a +0.56% open at this hour.  10-year bond yields have pulled back to 3.318% and Oil is up a half of a percent to $121.67/barrel in early trading.

The major economic news events scheduled for release Tuesday is limited to May PPI (8:30 am).  The only major earnings on the day are CNM and FERG before the open as well as ASTL after the close.

On the earnings front, this is a very slow week.  On Wednesday there are no major earnings reports. Then on Thursday, we do get reports from KR, CMC, JBL, and ADBE.  However, there are no earnings reports again on Friday.

LTA Scanning Software

If we look at the last few days of price action, we see what capitulation should look like. Significant gaps lower and big, black candles that close on their lows, pulling away from the T-line are sure signs that Randolph Duke is yelling “sell, Mortimer, sell” at his brother. And even though volume started below average, it has steadily declined over those last few days as the gaps and candles grew in size. So, even if we are not at THE BOTTOM, we need relief from extension which means we are nearing A BOTTOM. Does the bounce the last 10 minutes of the day and a modest premarket gap up this morning signal that extension relief? Your guess is as good as mine. All I can tell you for sure is that we are extended and we have seen capitulation-type selling the last few days.

The whipsaw is very real during times when we are thinking about changing trends and as we’ve seen lately, gap-chasers can get hurt. Trading is our job. So, do the work and work the process. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor. Remember that the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Finally, remember that you get rich steadily over the long run in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Markets Look to Gap Lower Again

On Friday, the May CPI came in hotter than expected (8.6% vs 8.3% forecast) and a flat premarket turned into a 1.5% – 1.9% gap down at the open.  From there we saw an hour of follow-through to the downside and then an all-day rollercoaster ride sideways.  We ended the day on a dark pool selloff that just took us to a new low.  This gave us gap-down, big black candles that closed on their lows in all 3 major indices.  For the day, SPY lost 2.90%, DIA lost 2.67%, and QQQ lost 3.53%.  The VXX was flat at 23.33 and T2122 fell well into the oversold territory to 6.90.  10-year bond yields spiked to 3.157% and Oil (WTI) fell two-thirds of a percent to $120.66/barrel.

In Economic news, Friday’s much hotter than expected CPI number is likely to have traders laser-focused on Wednesday’s Fed rate decision, interest rate forecast, and perhaps most importantly Fed Chair Powell’s press conference.  More hawkish analysts and media said the number put a 0.75% rate hike back on the table for this week.  However, a large majority of analysts reacted more like GS, which took Friday’s number as a signal to revise its rate-hike forecast to include a half-percent hike this week, in July, and in September.  (Previously, GS had only forecast a quarter-point hike in September.)  Futures markets have now priced in 2.55% of rate hikes in the Fed’s 5 remaining meetings this year, more than last week. For traders, the short-term implication is that we might see a low-volume, dull market until Wednesday afternoon as traders wait to see if Powell gives guidance on what will happen past July.  However, expectations are for more hikes than expected this year. So, a further selloff is also on the table. As for bond markets, yields spiked by the largest amount in 13 years on Friday in response to the CPI number.

In business news, the airline industry is already back to pre-pandemic traveler levels and got another boost Friday.  The CDC dropped the requirement for travelers coming from abroad to prove a negative covid-19 test before entering the country.  The CDC will re-evaluate this decision after 90 days, but that will be after the summer travel season.  Meanwhile, on the other side of the world, South Korea is now a week into its national trucker strike (protesting pay as their fuel costs surge).  So far, there have been port slowdowns causing serious supply chain problems.  Hyundai had production drop 60% at their largest factory on Friday due to component shortages.  However, so far SSNLF (Samsung Electronics) has seen no disruptions and does not expect near-term stoppages given its materials and component inventories.

SNAP Case Study | Actual Trade

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In Crypto news, Bitcoin fell to an 18-month low Friday ($29,000), and fell again over the weekend to $24,000 after failing resistance at $33,000 earlier in the week. Analysts tell Bloomberg they are expecting the fall to continue at least the mid-teen area.  Ethereum price action is also suggesting there may be more pain ahead for digital currencies.  Finally, crypto lender Celsius Network has halted withdrawals, swaps, and transfers on their platform as their coin (CEL) fell 53%.  Rival company Nexo announced plans to acquire assets from Celsius.

S&P 500 stocks sitting at a 52-Week Low INCLUDE (but are not limited to) INTC, MU, DIS, TXN, WFC, GS, MDT, MMM, CCL, ISRG, HCA, EXPE, BSX, SWK, SYK, CFG, SPG, and LH.  Meanwhile, S&P stocks sitting at a 52-Week High are limited to XOM, MPC, VLO, EOG, PSX, and DXCM.

In economic news later this week, on Tuesday we get May PPI.  Wednesday, we get Retail Sales, NY Empire State Mfg. Index, April Business Inventories, Crude Oil Inventories, Q2 Interest Rate Projections, Fed Rate Decision, Fed Statement, and Fed Chair Press Conference.  On Thursday, we see May Building Permits, May Housing Starts, and Philly Fed Mfg. Index.  Finally, on Friday we get May Industrial Production and hear from Fed Chair Powell again.

Overnight, Asian markets were strongly red across the board.  South Korea (-3.52%), Hong Kong (-3.39%), and Japan (-3.01%) led the region lower on China walking back reopening (after lockdown) as well as the nationwide trucker strike in Korea.  In Europe, we see the same picture taking shape as of mid-day.  The FTSE (-1.56%), DAX (-1.78%), and CAC (-2.09%) are typical and lead the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing to a strong gap down to start the week.  The DIA implies a -1.79% open, the SPY is implying a -2.24% open, and the QQQ implies a -2.92% open at this hour.  10-year bond yields are spiking again at 3.255% and Oil (WTI) is off 1.5% to $118.82/barrel in early trading.

The major economic news events scheduled for release Monday is limited to a Fed Speaker (Brainard at 2 pm).  The only major earnings is ORCL which reports after the close.

On the earnings front, this is a very slow week.  On Tuesday we hear from CNM and ASTL.  Wednesday there are no major earnings reports. On Thursday we get reports from KR, CMC, JBL, and ADBE.  There are no earnings reports on Friday.

LTA Scanning Software

Most of the talk is about last night’s Congressional hearings on the January 6 insurrection. However, the big news (and reason for premarket wait-and-see) is the CPI report at 8:30 am. Regardless of how the number comes in, we can expect it to be bad. Consensus forecasts are calling for 8.3% and even if it comes in light that does not mean inflation cannot speed up again. Nonetheless, we can expect a knee-jerk reaction, either way, the report lands…and then a whipsaw back the other direction after reconsideration by traders.

Technically speaking, the bears have the ball now that we have failed down out of the choppy consolidation area. In terms of extension, we are not in the oversold territory yet and while we are a fair way from the T-line after yesterday’s big move, I would not call this over-extended to the downside. If you are a long trader, you need to be very careful as there is room to move before the next support level. However, if you are on the bear side, just keep in mind that the move lower will likely not be in a straight line. With the weekend ahead, this may be a good day to get small, get hedged, or sit on your hands.

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

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

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