On Wednesday, the major indices gapped down (SPY – 0.50%, DIA – 0.40%, and QQQ – 0.70%) at the open.  We then saw a rollercoaster ride that was highlighted by a sharp morning rally (taking us to the highs of the day at 10:30 am), a slow mid-day selloff (taking us to the lows of the day at 1 pm) and a sideways oscillation the rest of the day.  This action left us with gap-down, indecisive, Spinning Top candles (perhaps Doji in the QQQ) across the 3 major indices.  The SPY and QQQ both retested and held their T-lines (8ema) and all 3 traded lower than average volume.

On the day, nine of the ten sectors were in the red with only Energy (+2.13%) in the green.  Meanwhile, Healthcare (-2.23%) and Consumer Cyclicals (-1.98%) led the way lower.  SPY lost 0.71%, DIA lost 0.41%, and QQQ lost 0.36%.  The VXX rose 0.78% to 20.60 and T2122 fell back to the mid-range at 56.35.  10-year bond yields spiked to 4.131% and Oil (WTI) rose 3.36% to $85.63/barrel. Overall, it felt like an indecisive day where the market is waiting on something and can’t make up its mind.

In economic news, September Building Permits came in a bit above expectation (1.564 million versus 1.530 million forecast and 1.542 million in August).  However, Sept. Housing Starts came in below forecast (1.439 million actual versus 1.475 million forecast and 1.566 million in August).  The EIA Weekly Crude Oil Inventories came in well below expectations with a drawdown of 1.725 million barrels (compared to a build of 1.380 million barrels forecast and last week’s massive 9.880-million-barrel build). On the Fed front, Minneapolis Fed President Kashkari (strong hawk) told an audience that the US job market remained too strong and inflation probably has not peaked yet.  He went on to say that the FOMC may need to raise rates above 4.75% this year to fight inflation, but his best guess is that inflation should start to react sometime next year, allowing the Fed to pause its rate hikes.  Then last night, St. Louis Fed President Bullard told an audience that he expects the FOMC to end its “front-loading” of aggressive interest-rate hikes by sometime early next year.  He went on to say that beyond that, the central bank could use “small adjustments” to control the situation as inflation cools.

SNAP Case Study | Actual Trade

In stock news, Bloomberg reports that T is working with MS to fund a joint venture with some unspecified infrastructure partner with the aim of investing billions of dollars in the US fiber-optic network expansion.  Meanwhile, FFIE announced that the company has cut jobs and reduced salaries (in exchange for employees getting equity positions) in order to conserve cash.  However, the company is still in talks to raise cash because the conservation will not sustain its burn rate.  Meanwhile, GOOGL-owned Waymo announced it will launch its self-driving ride-hailing service into Los Angeles soon, but on an unspecified date.  (The service is now available and has operated in Phoenix since 2018.)  GTBIF is teaming up with Canadian convenience store chain “Circle K” to sell marijuana at gas stations (with a separate entrance) in 10 Florida locations starting next year.

In energy news, the US Senate quietly advanced the NOPEC bill aimed at punishing OPEC+ countries for their recent production cuts.  The bill would remove the sovereign immunity that national oil companies now have, allowing them to be sued for collusion on price-fixing.  (It’s unclear how the US could enforce rulings, even if companies like Saudi Aramco were found guilty by a US court.)  Earlier, President Biden announced the release of an additional 15 million barrels of oil from the Strategic Petroleum Reserve as well as a plan to begin replenishing the reserve once oil prices hit $70.  It is also worth noting that the US Dollar gained again Wednesday against all its peer currencies (in lock-step with the spike in bond rates).  This made oil cheaper, yet even so, the fear over supply and reduction in US oil inventories drove oil prices higher.

After the close, IBM, EFX, STLD, KALU, LRCX, LBRT, and CCI reported beats on both the revenue and bottom lines.  Meanwhile, TSLA missed on revenue while beating on earnings.  On the other side, KMI, UMPQ, and PACW beat on revenue while missing on earnings.  At the same time, LSTR beat on revenue and came in inline on earnings. However, PPG, AA, KNX, and LVS all missed on both the top and bottom lines.

So far this morning, T, PM, DOW, AAL, DHR, ERIC, GPC, DGX, ALK, POOL, SNA, MSM, and SNV all reported beats on both the revenue and earnings lines.  At the same time, ABB, FITB, KEY, and HRI all beat on revenue while missing on earnings.  On the other side, NOK, BX, MMC, TSCO, and DOV all missed on revenue while beating on earnings.  At this point, there have been no companies that reported misses on both lines today.  (NUE, FCX, UNP, MAN, and WSO report closer to the opening bell.)

Overnight, Asian markets were mixed but leaned heavily to the downside.  Hong Kong (-1.40%), Australia (-1.02%), and Japan (-0.92%) led the move lower.  Only Malaysia (+1.60%), India (+0.30%), and Thailand (+0.25%) managed to stay green in the region.  In Europe, we have a more mixed picture at midday.  The FTSE (+0.01%), DAX (-0.37%), and CAC (+0.44%) are typical of the widely split continent in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modest gap higher to start the day (ahead of data).  The DIA implies a +0.51% open, the SPY is implying a +0.36% open, and the QQQ implies a +0.15% open at this hour.  10-year bond yields are down slightly to 4.128% and Oil (WTI) is up 1.67% to $86.98/barrel in early trading.

The major economic news events scheduled for Thursday include Weekly Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am), Sept. Existing Home Sales (10 am) and a pair of Fed Speakers (Harker at noon and Bowman at 2:05 pm).  The major earnings reports scheduled for the day include ABB, ALK, AAL, T, BX, DHR, DOV, DOW, EWBC, ERIC, FITB, FCX, GPC, HRI, KEY, MAN, MMC, MSM, NOK, NUE, PM, POOL, DGX, SNA, SNV, TSCO, UNP, WSO, and WBS before the open. Then, after the close, SAM, CSX, RHI, SNAP, SIVB, UFPI, WAL, and WHR report. 

In economic news later this week, on Friday, Fed member William speaks.  In earnings reports later this week, on Friday, we hear from AXP, ALV, EEFT, HCA, HBAN, IPG, RF, SLB, and VZ.

In late-breaking international news, the UK government is in turmoil after PM Truss fired another key cabinet member (and again replaced them with someone who did not support her) and the Tory party whip had to use literal force to make Tory members vote the way the PM wanted them to vote. So, the UK media is now openly handicapping who will replace Truss. Meanwhile, in China, the government is weighing whether or not to cut the quarantine time for foreign visitors. At the same time, the top Chinese technology official has summoned Chinese semiconductor companies to an emergency meeting on how to counter President Biden’s chip sale restrictions. Finally, in Ukraine, the Russian use of Iranian “kamikaze drones” to attack both cities and general and electrical infrastructure, in particular, has caused enough damage that President Zelenzkyy has imposed nationwide electric use restrictions.

With that backdrop, the bearish trend continues while all 3 major indices flirt with printing an inverted head and shoulders (bottoming) pattern. Market extension is not a factor, either in terms of the T-line or T2122. Still, the intraday reversals and daily chop remain serious concerns. So, continue to be cautious and show patience (wait for confirmation). With high volatility and less certainty, this may be the time to pursue more cautious trading strategies, including remaining hedged, quick, and/or small.

Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And 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!). Also, keep in mind that trading is not a hobby. It’s a job. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. 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 out). 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 significantly higher at the open (+2.25% in SPY, +2.05% in DIA, and +2.70% in the QQQ) on Tuesday.  However, this was a bull trap.  All 3 major indices immediately sold off hard.  The QQQ had more than faded the gap, while the SPY got within a quarter of one percent and the DIA got within one-third of one percent of doing so by 11:40 am.  From there, we saw a modest rally that lasted until 2:30 pm, regaining about half of the original gap during that time.  Then the bears stepped in to sell off all 3 major indices again at 2:30 pm, revisiting the lows of the day within 15 minutes.  After a pause at the lows, the bulls stepped in for a rally to end the day.  This action gave us large, black candles with a large lower wick in all major indices.

On the day, all 10 sectors were in the green with Communication (+0.50%) lagging and Industrials (+2.03%) leading the charge.  The SPY and DIA both gained 1.13% and the QQQ gained 0.79% on the session.  The VXX fell almost 2% to 20.44 while the T2122 (4-week New High/Low Ratio) jumped back up into the overbought territory at 87.68.  10-year bond yields fell back to 3.998% and Oil (WTI) was down 2.6% to $83.23/barrel.  So, overall, it was a bull trap day with a “gap and crap” action perhaps with some short profit-taking at the end of the day.

In economic news, September Monthly Industrial Production came in much hotter than forecast at +0.4% (versus +0.1% expected and -0.1% in August).  After the close, API reported Weekly Crude Oil Stocks fell 1.270 million barrels (versus an expected build of 1.551 million barrels and compared to last week’s 7.054-million-barrel build).  Atlanta Fed Pres. Bostic spoke before the Urban Institute Tuesday, speaking to Main Street rather than Wall Street and explaining current problems and the potential upside of recession.  He said the economy is still trying to deal with the turmoil caused by the wage and job trends that stemmed from the Pandemic.  The basic problem is that large numbers of workers quit, retired, moved, or changed fields during the pandemic, which put real labor pressure on all companies.  However, the large (deep-pocketed) companies were in the position to raise wages and move to a remote work model.  In that way, they drew workers away from lower wages and less flexible jobs when the economy picked back up. The issue was aggravated this year by inflation, where again the large profitable companies were in a better place to raise wages.  All of this has put small and medium-sized firms in serious trouble, unable to find workers at the lower wages they had been paying (and could afford) in the past.  He did not say so, but he did imply that a recession cycle will help lessen the problem for the SMEs that survive.

SNAP Case Study | Actual Trade

In stock news, Bloomberg reported that CS will be working with MS and RBCI to increase capital.  The details were not available, but previous reporting said CS needs at least $2 billion to shore up its balance sheet and to do restructuring.  Meanwhile, the FAA told BA that some of the company’s documentation submissions for the “737 Max 7” are incomplete and others need reassessment by BA. It was reported Tuesday that AAPL has told its main phone manufacturer in China to halt production and the two main component makers to drastically reduce the production of the iPhone 14 Plus (the cheaper, $899 model) as AAPL reevaluates product demand.  Elsewhere, TWTR froze its employee stock award accounts ahead of an anticipated closing of the Musk buyout will happen at $54.20 on or before Oct. 28.  Finally, AMZN workers in NY have rejected unionization by a 2-to-1 margin.

In stock IPO and M&A news, for the second day in a row, INTC lowered its outlook for the IPO of its self-driving car division Mobileye.  The April expectation was for $50 billion, on Monday it was $20 billion, and on Tuesday at the IPO roadshow, the company said it was now targeting a $16 billion valuation.  Meanwhile, an activist fund (Third Point) announced it has taken a significant position in CL and has urged the company to spin off its Hills Pet Nutrition division via IPO.  Third Point said in an open investor letter that it expects Hills to be worth $20 billion as a standalone company.  Finally, the US Senate Judiciary Committee expressed concerns over the KR acquisition of ACI and said it will hold hearings on the deal next month.

After the close, UAL, NFLX, OMC, JBHT, ISRG, IBKR, and WTFC all reported beats on both the revenue and earnings lines.  It is worth noting that NFLX crushed expectations and also reversed its subscriber losses, adding 2.41 million new subscribers during the quarter.  However, the company did also lower its forward guidance.  Meanwhile, UAL significantly raised its forward guidance on air travel trends.  In less good news, FHN beat on the top line while missing on earnings.

So far this morning, ABT, ASML, PG, TRV, CFG, NDAQ, WGO, CMA, SC, and ELV have all reported beats on both the revenue and earnings lines.  Meanwhile, BKR missed on revenue while beating on the earnings line.  On the opposite side, MTB beat on the revenue side while coming in below analyst estimates on earnings.  However, ALLY reported misses on both the top and bottom lines

Overnight, Asian markets were mixed but leaned to the downside.  Hong Kong (-2.38%), Shenzhen (-1.43%), and Shanghai (-1.19%) paced the losses.  Meanwhile, Malaysia (+1.05%), New Zealand (+0.64%), and Japan (+0.37%) led the gainers.  In Europe, we see a similar picture taking shape at midday.  Russia (-3.12%) is an outlier.   However, the FTSE (-0.02%), DAX (+0.07%), and CAC (+0.17%) represent the middle ground with most smaller exchanges in the red, but also half a dozen of them modestly green in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.25% open, the SPY is implying a -0.30% open, and the QQQ implies a -0.26% open at this hour.  10-year bond yields are back up to 4.088% and Oil (WTI) is up 1.25% to $83.84/barrel in early trading.

The major economic news events scheduled for Wednesday include Sept. Building Permits and Sept. Housing Starts (both at 8:30 am), EIA Weekly Crude Oil Inventories (10:30 am), and Fed Beige Book (2 pm).  We also have 2 Fed speakers scheduled, Kashkari at 1 pm and Bullard at 7:30 pm.  The major earnings reports scheduled for the day include ABT, ALLY, ASML, BKR, CFG, CMA, ELV, LAD, MTB, NDAQ, NTRS, PG, PLD, SCL, TRV, UNF, and WGO before the open. Then, after the close, AA, CCI, EFX, IBM, KALU, KMI, KNX, LRCX, LSTR, LVS, LBRT, PPG, STLD, TSLA, and UMPQ report.

In economic news later this week, on Thursday, Weekly Jobless Claims, Philly Fed Mfg. Index, and Sept. Existing Home Sales are reported.  Finally, on Friday, Fed member William speaks.

In earnings reports later this week, on Thursday, ABB, ALK, T, BX, DHR, DOV, DOW, EWBC, ERIC, FITB, FCX, GPC, HRI, KEY, MAN, MMC, MSM, NOK, NUE, PM, POOL, DGX, SNA, SNV, TSCO, UNP, WSO, WBS, SAM, CSX, RHI, SNAP, SIVB, UFPI, WAL, and WHR report.  On Friday, we hear from AXP, ALV, EEFT, HCA, HBAN, IPG, RF, SLB, and VZ.

Last night’s big beat by NFLX had futures flying as traders read that turn-around as a sign for tech stocks in general. However, overnight trading soon came back to earth as the market continues to reset expectations for a recession. Another sign of that “recession fear” is that mortgage demand fell to a 25-year low last week as the average mortgage rate for a 30-year, fixed-rate loan rose to 6.94% (from 6.81%). So, it seems good earnings (in general) have only limited strength against a tide of economic pessimism.

With that backdrop, extension is not a factor, either in terms of the T-line or T2122. However, intraday reversals and daily chop are serious concerns. Remember that the downtrend remains intact in all the major indices. So, be cautious and demonstrate patience (wait for confirmation). With high volatility and less certainty, this may be the time to pursue more cautious trading strategies, including remaining hedged, quick, and/or small.

Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And 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!). Also, keep in mind that trading is not a hobby. It’s a job. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. 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 out). 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 strongly (+1.75% in the SPY, +1.40% in DIA, and up 2.40% in the QQQ) Monday.  We then proceeded to get bullish follow-through the first 45 minutes of the day. However, at that point, it was like we hit a brick wall covered in Velcro and just got stuck right there as price traded sideways in a very tight range the entire rest of the day.  This action gave us white, Harami candles in all 3 major indices, with DIA being a white, Spinning Top Harami.  All 3 now sit on top of their T-line (8ema), but none of them has broken through local resistance or downtrend.

On the day, all 10 sectors are well into the green with Consumer Defensive (+1.37%) lagging and Technology (+3.52%) and Consumer Cyclical (+3.45%) leading the charge higher.  The SPY gained 2.52%, DIA gained 1.77%, and QQQ gained 3.30%. The VXX was down 2.84% to 20.84 and T2122 has spiked up, but remains just outside the overbought territory at 75.56.  10-yr. bond yield also showed great volatility, recovering from an early plunge to recover up to 4.017%.  And Oil (WTI) is just on the red side of flat at $85.50/barrel. So, overall, a gap-up then a dead flat day.

In economic news, the NY Fed Empire State Mfg. Index came in worse than expected at -9.10, compared to a forecast of -4.00 and September’s reading of -1.50. Meanwhile, Bloomberg Economics updated its model on Monday.  The new forecast projects a 100% probability of a recession within the next 12 months.  The previous update of the forecast had placed the probability at 65%.

SNAP Case Study | Actual Trade

In stock news, STLA said Monday it is seriously considering stopping all car production in China as the major carmakers (western) continue to lose Chinese market share to domestic car companies. Elsewhere, Bloomberg reports that CS has begun the sale of its US Asset Management unit.  Sources told Bloomberg that several private equity firms are interested in the unit, which includes a platform for investing in collateralized loan obligations.  Meanwhile, GOOGL’s YouTube platform announced new advertising methods to reach music and podcast listeners on Monday.  Finally, the Wall Street Journal has reported that INTC has dramatically lowered the valuation of their Mobileye (self-driving car) unit, which the tech giant is in the process of spinning off and IPO.  INTC originally expected an IPO price that would give a $50 billion valuation, but now the company is expecting only $20 billion (or less) from the spinoff.  The IPO roadshow for that spinoff is set to kick off today and will eventually trade under the ticker MBLY.

In stock legal news, the US Dept. of Justice has moved to dismiss its antitrust indictment against two former PPC executives after other prosecutions on the price-fixing charges failed to secure a conviction.  On the other side, the Wall Street Journal reports that the FTC has launched an investigation of V and MA over whether they are using their security token standards to limit debit-card routing competition for online payments.  The agency has already been investigating whether the two firms are stopping merchants from routing payments over other debit card networks. Meanwhile, the US DOJ has filed suit against CI, charging that the company over-charged the Medicare Advantage program by submitting false diagnoses (without the tests that would prove the ailments) in order to increase charges between 2012 and 2019.  Finally, CS paid $495 million to settle a case related to mortgage-backed securities that had been brought by the state of New Jersey.  The NJ Attorney General had claimed $3 billion in damages when the case originated in 2013 and the underlying crime had taken place in 2008.

In energy news, the US EIA said on Monday that oil output from the Texas and New Mexico Permian (shale oil) Basin is forecasted to reach a record in November.  The region’s output is forecast to rise by 50,000 barrels per day to 5.453 million barrels per day.  This is part of a nationwide increase of 104,000 bpd forecast to come from all US shale basins in the month.  Elsewhere, XOM said Monday it has now exited Russia completely after Putin expropriated the company’s Russian properties.  XOM values its losses from that expropriation at $4 billion. Finally, Bloomberg reports that the Biden Administration is moving toward releasing another 10-15 million barrels of oil from the strategic petroleum reserve in a bid to keep gas prices under control.

So far this morning, JNJ, GS, and SBNY all reported beats on the top and bottom lines.  Meanwhile, TFC, MLI, and CBSH all reported beating on the revenue line while also missing on the earnings line.  On the other side, LMT missed slightly on revenue while beating on earnings.  However, HAS missed on both the earnings and revenue lines. STT reports later, at 8:50 am.

Overnight, Asian markets were green with only Shanghai (-0.13%) below break-even.  At the same time, Hong Kong (+1.82%), Australia (+1.72%), and Japan (+1.42%) led the region higher with most exchanges gaining over one percent.  In Europe, we see a similar story taking shape at midday.  Portugal (-0.53%) is the only red in the region while the FTSE (+1.00%), DAX (+1.30%), and CAC (+0.83%) lead the continent higher.  As of 7:30 am, US Futures are pointing toward another gap higher to start the day.  The DIA implies a +1.36% open, the SPY is implying a +1.59% open, and the QQQ implies a +1.84% open at this hour.  10-year bond yields are back down to 3.998% and Oil (WTI) is off a quarter of a percent to $85.22/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Sept. Industrial Production (9:15 am) and API Weekly Crude Oil Stocks Report (4:30 pm).  The major earnings reports scheduled for the day include ACI, GS, HAS, JNJ, LMT, SBNY, STT, and TFC before the open. Then, after the close, AMX, FHN, IBKR, ISRG, JBHT, NFLX, OMC, UAL, and WTFC report.

In economic news later this week, on Wednesday, we see Sept. Building Permits, Sept. Housing Starts, EIA Weekly Crude Oil Inventories, Fed Beige Book, Fed member Bullard speak. On Thursday, Weekly Jobless Claims, Philly Fed Mfg. Index, and Sept. Existing Home Sales are reported.  Finally, on Friday, Fed member William speaks.

In earnings reports later this week, on Wednesday, we hear from ABT, ALLY, ASML, BKR, CFG, CMA, ELV, LAD, MTB, NDAQ, NTRS, PG, PLD, SCL, TRV, UNF, WGO, AA, CCI, EFX, IBM, KALU, KMI, KNX, LRCX, LSTR, LVS, LBRT, PPG, STLD, TSLA, and UMPQ.  On Thursday, ABB, ALK, T, BX, DHR, DOV, DOW, EWBC, ERIC, FITB, FCX, GPC, HRI, KEY, MAN, MMC, MSM, NOK, NUE, PM, POOL, DGX, SNA, SNV, TSCO, UNP, WSO, WBS, SAM, CSX, RHI, SNAP, SIVB, UFPI, WAL, and WHR report.  On Friday, we hear from AXP, ALV, EEFT, HCA, HBAN, IPG, RF, SLB, and VZ.

Overnight gaps seem to be all the rage lately, perhaps revealing a clue to big fund action (manipulation?) in the shadows. And although Monday was a dead tape after 10 am, volatility is still a major concern given the intraday action we saw last week. The premarket seems to indicate we want to test a recent resistance level and has us there now. Don’t get caught up in emotions, especially FOMO. Remember the bull trap on Friday and the bear trap on Thursday that ripped the face off those who chased the gap on those days. Once again, the prudent trader will let things settle out for a while before adding any new positions.

Market extension still is not a factor, either in terms of the T-line or T2122. However, chop and intraday reversal are serious concerns. This will be a big earnings week (see above) and Fed speakers are also likely to cause gyrations as traders keep trying to outguess the FOMC. Remember that the downtrend remains intact in all the major indices. So, be cautious and demonstrate patience (wait for confirmation).

Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And 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!). Also, keep in mind that trading is not a hobby. It’s a job. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. 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 out). 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

US markets gapped higher at the Friday (+0.70% in the SPY, +0.65% in the DIA, and +0.95% in the QQQ) on solid big bank earnings reports.  However, within 10 minutes, the reversal kicked in to see all 3 major indices sell off hard the first hour.  Then a long, slow, grinding bear trend took over to drive us to the lows of the day within a couple of minutes of the close.  This action gave us a Bear Dark Cloud Cover signal in the SPY and QQQ, with a similar candle in the DIA (just support from the T-line prevented it from reaching the right size to be a true Dark Cloud Cover).  The SPY and QQQ also both failed to find support at their T-lines (8ema).

On the day, all 10 sectors were in the red, with Basic Material (-3.75%) leading the market lower while Healthcare (-1.33%) and Communication Services (-1.36%) held up the best.  Meanwhile, SPY was down 2.28%, DIA was down 1.24%, and QQQ was down 3.01%.  The VXX was up 2.24% to 21.45 and T2122 fell but remains in the mid-range at 34.78.  10-year bond yields have reversed an early loss to jump to 4.022% while Oil (WTI) is down 3.92% to $85.61/barrel.  Overall, Friday was a big “bull trap” bearish reversal day which also partially reversed Thursday’s wild bullish ride.

In economic news Friday, September Retail Sales came in dead flat (compared to a forecast of +0.2% and an August reading of +0.4%).  The September Export Price Index was -0.8% (which was better than the -1.0% forecast and the August -1.7%) while the Sept. Import Price Index was -1.2% (which was lower than the forecast -1.1% as well as the August -1.1%). August Business Inventories grew less than expected at +0.8% (versus the +0.9% forecast and July’s +0.5%). The Michigan Consumer Sentiment reading was better than expected a 59.8 (versus the 59.0 forecast and last month’s 58.6 number).  On the Fed front, in a speech at Harvard, Fed Governor Waller said that a digital dollar would not offer material benefits over current US-dollar-denominated payments.  He said this is especially true since a central bank digital currency would introduce additional threats, such as cybersecurity threats.  Finally, Atlanta Fed President Bostic announced late Friday that he had “accidentally” broken Fed trading rules over recent years by doing personal trading during the Fed blackout (pre-announcement) periods, had filed “incomplete” disclosure documents, and had owned more than the permissible limit of US Treasury Bonds last year.  He went on to say that despite these revelations, he had never traded on non-public information.  However, the Fed has begun an investigation and the same type of activity has led to two Fed resignations in the last year.

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In stock news, ABT recalled some of its liquid Similac brand baby formula (due to a bottle defect) on Friday.  Meanwhile, Reuters reported that CS is in talks with several of its peer big banks about underwriting a potential stock offering to raise capital.  The bank said it would prefer not to sell more shares at the current depressed price, but is making plans in case it becomes unavoidable.  The Wall Street Journal reported that Rupert Murdoch is considering combining FOX (and FOXA) with NWSA.  Elsewhere, SLB is getting backlash from 9,000 Russian employees after the company began cooperating with Russian authorities to carry out military conscription orders at work. On Saturday, a second AAPL store (in OK this time) voted to unionize.

In international news, on Friday, UK Prime Minister Truss fired her finance minister (Chancellor of the Exchequer). She also reversed course on the corporate tax cuts she had promised and dug her heels in to defend as late as Thursday.  However, calls for her to resign (just 38 days into the job) continued this weekend.  Meanwhile, markets in the UK are in crisis due to contradictory, unworkable, and unpopular messaging and policies coming out of the PM and her cabinet. Meanwhile, in China, Xi Jinping opened the Communist Party Congress and is expected to be reelected to an unprecedented third term as the head of the Chinese Communist Party later this week.  In his opening speech, Xi doubled down on his “Zero Covid” policy (which still has several major cities locked down and has quarantines in place for some intracity travel) as well as calling for more competition with the US, including the semiconductor arena.

In dividend news, on Sunday, Investing.com reported last week’s largest dividend hikes.  CMC raised its quarterly dividend by 14.3% to $0.16/share (which amounts to an annual yield of 1.6%). LOCO declared a special dividend of $1.50/share (for holders of record on 10/24) to be payable on Nov. 9.  MCD increased its dividend by over 10% to reach a 2.5% annual yield of $6.08/share.  Meanwhile, SKT increased its annual dividend by 10% to $0.22/share, which is a 1.5% annual yield.

So far this morning, BAC and BK both reported beats on the revenue and earnings lines.  In particular, BAC beat revenue estimates by nearly $7 billion.  (SCHW reports at 8:45 am).  In other bank news, the Wall Street Journal reports that GS implemented a sweeping reorganization, splitting its largest unit into three divisions while also combining its asset management and wealth management businesses into a single unit.  

Overnight, Asian markets were mixed with Australia (-1.40%), Taiwan (-1.23%), and Japan (-1.16%) leading the losses.  Meanwhile, India (+0.73%), Thailand (+0.68%), and Shanghai (+0.42%) paced the gains.  However, in Europe, the exchanges are green across the board.  The FTSE (+0.72%), DAX (+0.91%), and CAC (+0.93%) are leading the region higher partially on the good news that Germany has no filled 95% of their natural gas storage (ahead of winter) and partially on a nearly total reversal by the UK government on it unfunded tax cuts and freeze of cost-of-living adjustments.  As of 7:30 am, US Futures are pointing to a significant gap up to start the week.  The DIA implies a +1.03% open, the SPY is implying a +1.24% open, and the QQQ implies a +1.49% open at this hour.  10-year bond yields continue being volatile as they have plunged back down to 3.947% and Oil (WTI) is flat at 85.61/barrel in early trading.

The major economic news events scheduled for Monday are limited to NY Empire State Mfg. Index (8:30 am) and Federal Budget Balance (2pm tentative).  The major earnings reports scheduled for the day include BAC, SCHW, and BK before the open.  There are no major reports scheduled for after the close.

In economic news later this week, on Tuesday we get Sept. Industrial Production and API Weekly Crude Oil Stocks Report.  Then Wednesday, we see Sept. Building Permits, Sept. Housing Starts, EIA Weekly Crude Oil Inventories, Fed Beige Book, Fed member Bullard speak. On Thursday, Weekly Jobless Claims, Philly Fed Mfg. Index, and Sept. Existing Home Sales are reported.  Finally, on Friday, Fed member William speaks.

In earnings reports later this week, on Tuesday, ACI, GS, HAS, JNJ, LMT, SBNY, STT, and TFC report.  Then Wednesday, we hear from ABT, ALLY, ASML, BKR, CFG, CMA, ELV, LAD, MTB, NDAQ, NTRS, PG, PLD, SCL, TRV, UNF, WGO, AA, CCI, EFX, IBM, KALU, KMI, KNX, LRCX, LSTR, LVS, LBRT, PPG, STLD, TSLA, and UMPQ.  On Thursday, ABB, ALK, T, BX, DHR, DOV, DOW, EWBC, ERIC, FITB, FCX, GPC, HRI, KEY, MAN, MMC, MSM, NOK, NUE, PM, POOL, DGX, SNA, SNV, TSCO, UNP, WSO, WBS, SAM, CSX, RHI, SNAP, SIVB, UFPI, WAL, and WHR report.  On Friday, we hear from AXP, ALV, EEFT, HCA, HBAN, IPG, RF, SLB, and VZ.

Volatility seems to want to continue to be the rule, as premarket futures indicate we will be popping back inside Friday’s big, ugly black candle. However, do not get caught up in emotions. Remember the bull trap on Friday and the bear trap on Thursday that ripped the face off those who chased the gap those days. So, just let things settle out for a while before you go adding any new positions.

Extension isn’t a factor today, either in terms of the T-line or T2122. However, volatility and intraday reversal are valid and serious concerns. This will be a big earnings week (see above) and Fed speakers are also likely to cause gyrations as traders keep trying to outguess the FOMC. Remember that the downtrend remains intact in all the major indices and, for what it is worth, we also had a bearish candle signal on Friday. So, be cautious and demonstrate patience (wait for confirmation).

Don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And 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!). Also, keep in mind that trading is not a hobby. It’s a job. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. 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: DHC, WFC, JPM, BA, LUV, SB, NWL, EA, IGT. 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

Huge volatility was the rule Thursday. Stocks gapped sharply lower at the open (-2% in the SPY, -1.8% in the DIA, and -2.9% in the QQQ) after a hot September CPI number. However, as I had warned in the morning blog, whiplash immediately kicked in as the bulls led a huge rally until 11:45 am. Over those 2.25 hours, the SPY gained a massive 5%, DIA gained a staggering 4.5%, and QQQ gained an incredible 6%.  However, that was not the end of the huge volatility.  The rest of the afternoon, we saw a couple more big moves to the downside (and the resulting even larger whips back to the upside). Still, it is important to note that the volume on those later swings began to fade as the day ground on.  In the end, we closed not too far from the highs of the day. 

This action gave us huge, heavy volume, Bullish Engulfing candles (with small wicks on both ends) in all 3 major indices.  The SPY and DIA managed to cross and close above their T-lines (8ema), but the QQQ failed that test (at least for the day).  All 10 sectors are green with Energy (+3.67%) leading the charge and the Consumer Cyclical sector (+1.22%) lagging.  The SPY gained 2.61%, DIA gained 2,84%, and QQQ up 2.32%.  Meanwhile, the VXX fell 2.6% to 20.98 and T2122 has jumped from oversold up into the mid-range at 65.15.  10-year bond yields have spiked to 3.96% and Oil (WTI) was up 2.13% to $89.13/barrel.

In economic news, as mentioned above, the September Month-on-month CPI reading came in at +0.4% (versus +0.2% forecast and +0.1% in August).  That took the September Annualized CPI to +8.2% (versus +8.1% that had been forecast and +8.3% as of August).  So, inflation fell slightly on an annual basis, but not as much as expected.  The Weekly Initial Jobless Claims also came in slightly above expectations at 228k (versus 225k forecast and 219k last week).  Finally, in the late morning, the EIA Crude Oil Inventory showed a massive 9.880 million barrel increase in stocks (versus a forecast 1.750 million barrel build forecast and a drawdown of 1.356million barrels last week).

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In stock news, AAPL and GS launched a joint “high yield savings account” product for holders of the AAPL credit card.  Bloomberg reported that KR is in talks to buy smaller rival ACI.  ACI spiked 11.5% on the news and KR also closed up 1.15%.  Elsewhere, NFLX announced its long-planned “with Ads” tier service for $6.99/mo. starting Nov. 3.  Later, STLA (Dodge/Jeep parent) announced it is cutting one of its three shifts at its Warren MI plant due to a persistent shortage of chips.  Meanwhile, the Chairman of C told a conference that higher capital requirements for big banks (as proposed for the banks entering into riskier cryptocurrency business) might curb lending and make the “potential coming recession” worse.  Finally, a Brazilian court has fined AAPL $19 million and ordered that the iPhones the company sells in that country must come with chargers.

In trading news, on Thursday afternoon, Reuters reported that 24×7 stock trading is likely coming to the US within 5 years.  The report cited sources at several brokers, electronic exchanges, as well as the CBOE exchange, all speaking at the Security Traders Assn. Annual Conference.  There was no specific mention of Options, but one would assume that if the underlying assets were trading 24×7, the options on them would as well.  So, traders may need to study the trading processes and approaches being used in the Forex and Cryptocurrency markets today for a heads-up on how we may be trading stocks in the not-too-distant future.

In Energy news, despite the overall large build in US oil inventories last week, there was a disturbing drawdown in Diesel and Heating Oil stock.  The EIA reported that Distillates stocks, fell 4.9 million barrels for the week to the lowest level since May.  With Winter fast approaching this should be upsetting news for consumers that appear will get the shaft as low inventories allow dealers to charge higher prices.  This news was partially responsible for oil’s 2% rise on Thursday, despite a 10 million barrel increase in oil inventories and a 2 million barrel increase in gasoline stockpiles.

Overnight, Asian markets leaned heavily to the green side. Only Thailand (-0.12%) and Singapore (-0.03%) were in the red.  Meanwhile, Japan (+3.25%), Shenzhen (+2.81%), and Taiwan (+2.48%) led the gainers.  In Europe, we are seeing a similar push to the upside at midday.  Only Russia (-0.79%) is showing red, while the FTSE (+1.25%), DAX (+1.21%), and CAC (+1.77%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green open after Thursday’s volatile, large gain.  The DIA implies a +0.47% open, the SPY is implying a +0.32% open, and the QQQ implies a +0.08% open at this hour.  10-year bonds are showing their own volatility, plunging back down to 3.887% while Oil (WTI) is off just over 1% to $88.13/barrel in early trading.

The major economic news events scheduled for Friday include September Retail Sales and September Import/Export Price Indexes (both at 8:30 am), August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories (all at 10 am). The major earnings reports scheduled for the day include C, FRC, JPM, MS, PNC, USB, UNH, and WFC before the open.  There are no major reports scheduled for after the close.

So far this morning, UNH, JPM, WFC, C, USB, PNC, and FRC all posted beats on both the top and bottom lines.  JPM beat on revenue by almost $9 billion while the other large banks had significant revenue beats as well.  However, MS reported a miss on both revenue and earnings, which they attributed to a collapse of its investment banking business.  In addition, note that USB and FRC both lowered forward guidance after posting their beats.  Finally, KR (second only to WMT among US grocers) announced it has reached the previously mentioned deal to buy ACI (the fourth largest US grocer) for $34.10/share or $24.6 billion.

After yesterday’s extreme volatility and bullish reaction to CPI, as well as a dose of great earnings this morning, the overall mood is likely to be bullish, but leery early in the day. It is less likely the data we get today will reverse markets from any move, but it could dampen or amplify what Mr. Market is doing at that time. With that said, volatility remains a very big concern unless you have the stomach to ride out big swings.

With this backdrop, the premarket action seems to show some modest optimism. Extension isn’t a factor today, either in terms of the T-line or T2122. However, that T-line (8ema) will be a level to watch as we see whether it can hold as support for the large caps or resistance for the QQQ. Today we know three things for sure. First, the strong bear trend is still in place. Second, volatility and huge intraday reversals were off the charts yesterday. And third, the weekend, when we can’t adjust while the market is closed, lies just ahead. So, consider whether you need to take some money off the table or add hedges today. (Remember, the first rule of making big money is to not lose big money.)

So, don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And when the 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!). Also, keep in mind that trading is a job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. 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 opened little changed Wednesday and then chopped sideways in a fairly small range.  The only exception to this was the SPY which plunged the last 15 minutes of the day to get back near the lows.  The DIA did retest its T-line (8ema), but failed, while the other 2 major indices didn’t even come close.  This action is giving us Indecisive, Inside Day candles in all 3 of the major indices.  The Spy printed more of an Inverted Hammer candle while the DIA gave us a Doji and the QQQ printed a Spinning Top. Overall, just a volatile, sideways day that seems to be coiling up as we wait for another shoe to fall.

On the day, seven of the 10 sectors are in the red with Utilities (-2.99%) being by far the biggest losing group.  On the other side, Consumer Cyclical (+0.27%), Consumer Defensive (+0.24%), and Energy (+0.20%) were the gaining sectors.  Meanwhile, SPY was down 0.32%, DIA was down 0.04%, and QQQ was down 0.03%. The VXX was off 1.01% to 21.54 and T2122 remains oversold at 15.81. 10-year bond yields backed off to 3.898% and Oil (WTI) was down 2.5% to $87.12/barrel.

In economic news, September PPI came in twice as hot as expected at +0.4% (versus +0.2% forecasted and actual in August).  For what it is worth, the September Core PPI (with food and energy prices stripped out) came in as expected at +0.3%, which was also the same as August.  In the afternoon, the September FOMC Meeting Minutes did not give us any new information.  Just as Fed speakers have been telling us since the meeting, the FOMC expects rate hikes to continue at a higher pace and a higher final interest rate level for a longer period than originally expected since inflation is showing little sign of abating yet.  After the close the API reported a 7.054-million-barrel crude oil inventory increase this week, dramatically reversing last week’s 1.770-million-barrel drawdown.  Finally, Treasury Sec. Yellen expressed concerns about liquidity in the bond market as many of the largest buyers have gone away.  Sovereigns, Japanese and European insurance and pension funds, etc. all have their own financial problems and are not looking to add US bonds.  As a result, as the supply of Treasuries has climbed, a lack of liquidity has driven average yields higher and caused outsized volatility.  (I’m not sure that is news, because that is how I was taught that free markets work…when supply goes up and demand goes down, the price falls, meaning in this case the yield rises. Nonetheless, she said it, and the financial media all thought it was newsworthy enough to report.)

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In stock news, Wednesday afternoon, it was announced that CCJ (a uranium supplier) and BEP (a utility) are teaming up to acquire Westinghouse from BBU (a holding company affiliated with BEP).  The $7.9 billion deal will give CCJ a 49% ownership interest in the Westinghouse venture as nuclear power becomes more popular again.  Across the pond, the EU approved the deal where CE will buy DD’s “Mobility and Materials” business unit for $11 billion.  After the close, CLF announced the USW union had ratified a new 4-year labor contract covering 12,000 of its employees.  At the same time, AMAT announced it was cutting its Q4 revenue estimate, citing new export regulations as a headwind.  Meanwhile, the NRLB cited SBUX for having called the police to disperse employees that were pro-union at a Kansas store.  Finally, AMZN announced that it is switching rockets for the upcoming launch of its prototype satellites (intended to compete with Elon Musk’s Starlink of satellite-based high-speed internet system).  The new rocket is from UAL (a joint venture by BA and LMT).

In Energy news, Oil was down in great part to a very strong dollar.  (The Euro fell further below parity to $0.97 while the Dollar rose to a 24-year high of 146.91 Yen.)  In company-related news, XOM announced that its new carbon emissions reduction business, called Low Carbon Solutions unit, had signed CF (the world’s largest ammonia manufacturer) as its first client.  At the same time, they signed a second deal with ENLC (an oil pipeline network).  After he close the EIA (US Energy Information Administration) said that consumers can expect to pay 28% more (compared to last year) to heat their homes this coming winter.  This is based on Natural Gas (half of all homes) prices up 28% year-over-year, Electricity (40% of homes) up 10% over last year, and Heating Oil (9% of homes) up 27% on the year.

So far this morning, WBA, TSM, and FAST all beat on both the revenue and earnings lines.  (As mentioned above, even though TSM beat, it also drastically cut new capital spending for the rest of the year…even while raising guidance.)  Meanwhile, BLK and CMC missed on revenue while beating on earnings.  On the other side, DAL beat on revenue while missing on earnings.  However, DAL did raise guidance after reporting a major surge in summer travel.  Finally, DPZ missed on both lines.

Overnight, Asian markets were red across the board.  Taiwan (-2.07%), Hong Kong (-1.87%), and South Korea (-1.80%) led the red tide, perhaps aided by TSM (the world’s largest chipmaker) cutting 2022 capital spending by 10% in a major warning shot fired across the bow of tech companies.  Meanwhile, in Europe, stock exchanges are mixed but lean to the green side at midday.  The FTSE (+0.04%), DAX (+0.87%), and CAC (+0.40%) are leading the move with four of the smaller exchanges lagging and still red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green open ahead of consumer inflation data.  The DIA implies a +0.58% open, the SPY is implying a +0.55% open, and the QQQ implies a +0.30% open at this hour.  10-year bond yields remain at 3.89% and Oil (WTI) is also little moved at $87.40/barrel in early trading.

The major economic news events scheduled for Thursday include September CPI and Weekly Initial Jobless Claims (both at 8:30 am), EIA Weekly Crude Oil Inventories (11 am), and the Federal Budget Balance (2 pm tentative).  The major earnings reports scheduled for the day include BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA before the open.  There are no major reports scheduled for after the close.

In economic news later this week, on Friday we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, on Friday, the big banks really kick off earnings season as C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

Markets will be focused on CPI data in at least the pre-market this morning, even though we have had some generally good earnings reports. For what it is worth, Moody’s Chief Economist said overnight that his analysis leads him to expect a significant inflation reduction within 6 months. However, just from a read-through of the PPI data, we should expect a very hot inflation number today. Don’t be surprised if we see more whiplash as markets overreact early, rethink and whip back in the other direction. However, at the moment we appear stuck between this week’s low and the T-line.

With this backdrop, the premarket action seems to show some optimism ahead of the CPI data. The market remains a bit extended in terms of T2122, but not extremely so. Watch the T-line levels for resistance if we bounce on the CPI data. Once again, the one thing we know is that the strong bear trend is still in place and markets have been indecisive the last two days…as if waiting. So, don’t predict a bottom, but keep a watchful eye on market price action.

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!). Also, keep in mind that trading is a job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. 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: WBA, APA, HALO, BA, RCL, MO, UPST. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 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 DIA diverged from the SPY and QQQ at the open Tuesday.  Both SPY and QQQ gapped down half of a percent and then both followed through strongly for 30 minutes to lows where SPY was down 1.20% and QQQ was down 1.75% at 10 am. Meanwhile, DIA gapped down just 0.25 percent and then traded sideways in a very tight range for the first 30 minutes.  However, at 10 am, all 3 got back in lock-step as the bulls started a strong rally that lasted until 1 pm, where we found the highs of the day.  After a little less than 2 hours of grinding slightly lower, the bears really kicked into high gear at about 2:40 pm and drove us to new lows for the day in all 3 major indices at 3:20 pm.  Then the chop continued as the bulls stepped back in to bounce us up off those lows the last 40 minutes of the day.  This action gave us gap-down, indecisive, candles with large upper wicks and smaller lower wicks.  In other words, Spinning Top type candles in all 3 indices.  The DIA retested its T-line (8ema) and failed the test earlier in the day.

On the day, eight of the 10 sectors are in the red with Consumer Defensive (+0.60%) leading the gains and Technology (-1.89%) being by far the sector showing the largest loss.  Meanwhile, SPY lost 0.65%, DIA gained 0.11%, and QQQ lost 1.37%.  The VXX was up 1.5% to 21.76 and T2122 remains in the oversold territory at 12.50.  10-year bond yields rose to 3.937% and Oil (WTI) fell 2.75% to $88.64/barrel.  Overall, it has been a volatile, choppy, and indecisive day across the market.  It may be that markets were really just waiting on inflation and earnings data later this week.

In FOMC news, on Tuesday, Philly Fed President Harker again told an audience he believes the central bank can reduce inflation without triggering a deep recession and causing high unemployment.  However, he did not give additional clues about the size of rate hikes he feels appropriate to do that inflation fight or how long they will continue. Later, Cleveland Fed President Mester told a NY Economic Club audience the Fed needs to continue raising rates.  She reiterated that “at some point, as inflation comes down, then my risk calculation will shift.  But at this point, my concern lies more on the fact we haven’t seen progress on inflation.”  She continued, “Given current economic conditions and the outlook, in my view, the larger risks come from tightening too little.” (She thus implied that she continues to favor at least 0.75% hikes.)

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In stock news, BK announced it will join COIN and BLK in offering cryptocurrency custody services.  Meanwhile, UBER, LYFT, and DASH all slumped Tuesday after a Dept. of Labor proposal was announced that would require any contractor that was “economically dependent” on a company to be classified as an employee by that company.  This would dramatically raise costs.  In union news, AMZN workers in Southern CA have filed a petition with the National Labor Relations Board to have a union election.  At the same time, the voting started in the AMZN upstate NY union vote.  Elsewhere, the US Supreme Court heard arguments on whether or not to overturn a CA law prohibiting the sale of meat (pork) from animals that were kept in tightly confined spaces (which is true for hogs (pork) and chickens and could even be argued for cattle).  Companies that will be directly impacted include TSN, BRFS, HRL, IBA, PPC, and SAFM.  Finally, in “sale news,” AMZN, WMT, and BBY kicked off the holiday sales season with major online sales events (which follow the success of AMZN Prime Day).  Those 2-day sales started Tuesday.

In European economic news, Tuesday afternoon (US time), BoE Governor Baily told UK fund and investors that they had 3 days to get their portfolios fixed before the central bank will withdraw its bond-buying support from the market.  The BoE has stepped in the last 2 weeks with emergency buying to prevent UK bonds from reaching a “self-reinforcing fire sale” situation.  He also implies that this emergency action will delay quantitative tightening by the BoE (which was scheduled to start Oct. 31) until later this year.  Elsewhere, the ECB announced it will wait until interest rates are back close to 2% before it begins to shrink its own balance sheet.

So far this morning, PEP beat on both the revenue (by over $1.13 billion) and earnings (by 7%) lines.  The company also raised its 2022 annual forecast for revenue by 20% (from +10% to +12% for the year).  The company said its revenue rose 20% for Q3 (through price increases) despite a small decline in product volume sold. This indicates that the “inflation story” has given the company cover to increase prices by significantly more than costs rose and that the consumer is willing to accept these higher prices.

In mortgage news, home loan applications fell 2% for the week as the interest rate on a 30-year, fixed-rate, conforming loan went from 6.75% to 6.81%.  However, as rates have risen, there has been renewed interest in adjustable-rate mortgages (which has been a dead niche for years).  (ARMs used to make up less than 3% of loans and now are up to 12% of all new home loans.)  This shift comes as home buyers have become accustomed to very low rates and either expect rates to come back down or are betting that they will have moved again before the rate adjusts up.  The rate for a 5/1 ARM (rate is set for 5 years) is just 5.56%.

Overnight, Asian markets were mixed again but more evenly split today.  Shenzhen (+2.46%) and Shanghai (+1.53%) were by far the strongest markets.  Meanwhile, it was Hong Kong (-0.78%), New Zealand (-0.76%), and Singapore (-0.70%) that paced the region’s losses.  In Europe, the bourses are mixed on mostly modest moves at midday.  The FTSE (-0.10%), DAX (+0.20%), and CAC (+0.11%) show indecision at this point.  At the same time, smaller exchanges are showing greater moves (in both directions) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.49% open, the SPY is implying a +0.67% open, and the QQQ implies a +0.89% open at this hour.  At the same time, 10-year bond yields are up strongly again to 3.958% and Oil (WTI) is up one-half of a percent at $89.79/barrel in early trading.

The major economic news events scheduled for Wednesday include September PPI (8:30 am), WASDE Ag Report and EIA Short-Term Energy Outlook (both at noon), September Fed Meeting Minutes (2 pm), and the API Weekly Crude Oil Stocks report (4:30 pm).  We also have a Fed speaker scheduled (Bowman at 6:30 pm).  The major earnings reports scheduled for the day are limited to PEP and WIT before the open.  There are no major reports after the close.

In economic news later this week, on Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, and the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Bus. Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

This morning all eyes will be on the PPI numbers during the pre-market. After that, some may look ahead to the Fed Minutes in the afternoon. However, we already know what FOMC Chair Powell said that day and have had an absolute chorus of Fed speakers reiterating the same story since. So, the meeting minutes may be a non-story. So, I think the inflation data (and read-through to out-guessing when the Fed will lighten up) will be the main market driver today. Don’t be surprised if we see some market “dead time” as some traders decide to wait on CPI and the real start of the Earnings Season before placing many bets. Overall then, look for morning volatility and a potentially dead market once we get past that knee-jerk and “second thought.”

With this backdrop, the premarket action seems to show some optimism ahead of the PPI data. The market is a bit extended in terms of T2122, but not extremely so. Watch the T-line levels for resistance if the bounce gets that far. Once again, the one thing we know for sure is that the strong bear trend is still in place and that has to be the main directional indicator we heed. So, don’t predict a bottom. If you are going long the market, be sure you are either quick or in it for the long term because a resumption of the down move is the most likely scenario for now.

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!). Also, keep in mind that trading is a job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. 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: EOG, COP, DVN, SLB, OXY, MRO, VLO, PSX. 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 Monday (+0.33% in the SPY, +0.45% in DIA, and +0.10% in the QQQ).  However, the bears immediately stepped in to sell off the market to reach the lows of the day at about 1:15 pm.  At that point, we reversed on a dime as the bulls took over to lead a strong rally for 45 minutes.  Finally, we started a sideways roller-coaster ride of smaller moves for the last 2 hours of the day. This action has left us with black-bodied, Hammer Type candles with long, lower wicks in all 3 of the major indices.  It is also worth noting that all 3 indices are also getting a little extended below their T-line (8ema) and both the SPY and QQQ are testing the breakout area of their Dreaded-h patterns.

On the day, 3 of the 10 sectors are in the green, but none of them were significantly higher.  Consumer Defensive (+0.21%) was the largest gaining sector while Energy (-1.95%) and Technology (-1.94%) paced the losses.  Meanwhile, the SPY was down 0.72%, DIA was down 0.34%, and QQQ was down 1.08% (to a 2-year low).  The VXX was up just less than 2.49% to 21.43 and T2122 was up, but remains in the oversold area at 13.38.  10-year bond yields remain at 3.888% since the bond market was closed and Oil is down 2% to $90.75/barrel.  Overall, it was an indecisive down day.

In economic news, midday, Chicago Fed President Evans continued to chorus from the Fed, saying that fighting inflation is still the top priority, even if it means job losses.  At roughly the same time, JPM CEO Jamie Dimon told CNBC that said that the US economy is “actually doing very well” at the moment.  However, he sees a “very, very serious” combination of headwinds that are likely to push the US and global economies into recession in the next six to nine months. He went on to say that Europe is already in recession and blamed the Fed for waiting too long to fight inflation and then doing too little.  His opinion stands in contrast to others like Ark Investors CEO Cathie Wood who released an open letter to the Fed Monday warning that their tight policy could very well cause deflation if they don’t ease.  Elsewhere, in the afternoon, the union that represents workers who build and maintain rail tracks voted to reject the offer made by the committee representing the major freight rail carriers.  This brings the total to date to only four of 12 unions that have voted to accept the offer.  However, the parties have agreed to a “cooling off period.”  So, no rail strike is immediately imminent and negotiations will resume.

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In stock news, Bloomberg reported Monday afternoon that XOM is considering buying DEN.  No final decisions have been reached, but DEN has been seeking strategic options.  BA rival Airbus (an OTC stock) increased deliveries in September, delivering 55 aircraft to bring the YTD total to 437.  BA will announce its own numbers Tuesday.  The Wall Street Journal reported that BIO is in talks to merge with QGEN.  Elsewhere, the European Commission has informed TEVA that its preliminary view is that the company has breached European Union antitrust rules.  Relate to climate and green initiatives, HON announced it has a new technology that can convert ethanol into jet fuel.  This would reduce emissions and help airlines comply with standards that can let them qualify for incentives as laid out in the US Inflation Reduction Act.  Finally, after-hours LEG cut its 2022 guidance by between $100 million and $200 million.  LEG stock was down 8% in after-hours trading.

In Russian news, on Monday, the Putin regime retaliated for the weekend bombing of his bridge over the Kerch straight (to Crimea).  Russia launched well over 100 cruise missiles, 30 kamikaze drones, and more than 40 rockets.  About half of the missiles and nearly all of the drones were shot down by Ukrainian forces.  However, that left about 50 missiles and 40 smaller rockets that hit their non-military targets, many of which were not even of an infrastructure nature.  The G-7 will hold an emergency meeting to discuss responses to the Russian attacks today and Ukrainian President Zelenskyy will speak.  Elsewhere, pro-Russian hackers briefly took airport websites in Chicago, Los Angeles, Atlanta, and New York offline Monday.

The Bank of England was forced to step into UK bond markets again Tuesday.  A day after it extended its emergency measures to backstop pension funds, the BoE said it was seeing “fire sale dynamics” in the UK bond market as it began buying inflation-tied bonds (in addition to its other bond buying).  One of the important UK financial think tanks (IFS) said it estimates the new UK government will need to come up with $66 billion in spending cuts before the new budget is announced (a month early to shore up markets) on October 31.

Overnight, Asian markets were mixed again, but leaned heavily to the downside.  Taiwan (-4.35%), Japan (-2.64%), and Hong Kong (-2.23%) led the region lower on fears of economic slowdown and the impacts of President Biden’s chip export (to China) bans.  Meanwhile, Shenzhen (+0.53%), New Zealand (+0.35%), and Shanghai (+0.19%) managed to stay green.  In Europe, with the exception of Russia (+1.42%), stock exchanges are red across the board at midday.  The FTSE (-0.94%), DAX (-0.87%), and CAC (-0.54%) lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing a down start to the day.  The DIA implies a -0.52% open, the SPY is implying a -0.62% open, and the QQQ implies a -0.60% open at this hour.  10-year bond yields are up to 3.924% and Oil (WTI) is off 2.34% to $88.96/barrel in early trading.

There major economic news events scheduled for Tuesday are limited to a pair of Fed speakers (Harker at 11:30 am and Mester at noon).  Once again, there are no major earnings reports scheduled for the day.

In economic news later this week, on Wednesday we get September PPI, the WASDE Ag Report, September Fed Meeting Minutes, and the API Weekly Crude Oil Stocks report and Fed member Bowman speaks.  Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, on Wednesday, PEP and WIT report.  Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

Markets seem very fragile amidst the global recession fears, new chip export to China bans (TSM was down 8% in Taiwan overnight), and the Russian War caused energy crisis (and OPEC’s support of Russia and higher oil prices through production cuts). With Inflation data coming both Wednesday (PPI) and Thursday (CPI) as well as Earnings Season kicking off again with Big Banks on Friday, it is hard to see a catalyst for any bullish turn other than a “hopium knee-jerk reaction” to some data point. So, the mood is glum and the market bias will remain bearish overall for at least the short-term.

With this backdrop, the premarket action seems pretty tame, down a half of a percent overall. (Again, perhaps because Mr. Market is waiting on another shoe to drop.) The market SPY and especially the QQQ are extended (to the downside) from their T-Lines, but the DIA remains within 1.3% in premarket and T2122 is oversold, but not extremely. So, a bounce is not set up technically. As has been true for quite a while, the one thing we know for sure this morning is that the strong bear trend is still in place and again that should be the main directional indicator we heed. The large-cap indices MAY find some support at their Dreaded-h pattern breakout levels. However, remember that level did nothing to help the QQQ bulls hold up.

Keep in mind that trading is our job. It’s not a 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: SRTY, MARA, WDC, MMM, QQQ, NFLX, DASH, RIVN. 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 Friday, markets gapped lower on the better-than-expected September Payroll data (which leads traders to conclude that what the Fed has been saying is true…and the Fed will not be easing up on rate hikes anytime soon).  SPY gapped down 1.1%, DIA gapped down 0.9%, and QQQ gapped down 1.75%.  After that, the Bears followed up with a strong selloff in the first 30 minutes before starting a much slower downtrend that has lasted all the way into a small bounce in the last 30 minutes of the day.  This action has given us gap-down, large black candles with small lower wicks that are starting to get just a little extended below the T-line (8ema).  The QQQ is even nearing the breakout of its bearish “Dreaded h” pattern.

On the day, all 10 sectors are in the red.  Technology (-4.13%) is leading the way lower while Energy (-0.62%) is the laggard in the decline.  At the same time, SPY was down 2.81%, DIA is down 2.08%, and QQQ is down 3.81%.  The VXX is up 4% to 20.91 and T2122 has dropped back into the oversold territory at 8.54. 10-year bond yields are up to 3.883% and Oil (WTI) has spiked 4.76% to $92.66/barrel after a strong Payrolls Report seemed to tell the market demand will remain high while production will go down (based on the upcoming OPEC+ production cuts).  So, it was a “good news is bad news” day that has all 3 major indices working on another dreaded-h pattern.

In economic news, September Nonfarm Payrolls came in above expectation (at +263k versus +250k forecasted and +315k in August).  However, September Avg. Hourly Earnings came in lower than expected at +5.0% versus +5.1% forecasted and +5.2% in August.  That may be partially responsible for the September Participation Rate falling slightly to 62.3% (from 62.4% in August).  With that said, the September Unemployment fell to 3.5% (from 3.7% forecasted and 3.7% in August).  So, both of the headline numbers fall into the category of “things that will not give the Fed reason to start easing their rate hikes.”

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In stock news, on Friday, BP announced that it has boosted spending by $500 million in the North Sea and US Shale Basin in response to oil and gas shortages. However, it does not expect any of those projects to increase production for months.  PEP also said it expects to receive the first of 100 TSLA semi tractors on Dec. 1.  (The trucks have been on order since 2017 and PEP will be the first company to receive the new TLSA Semi.)   NIO announced that it will only lease (not sell) its electric vehicles when they go to market in Europe later this year.  The average lease will be $1,200/month.  Elsewhere, the NHTSA announced it has closed a safety investigation (started in 2017) into tired from GT.  Finally, RIVN has recalled almost all of the vehicles they have built over safety concerns stemming from a bolt that appears not fully tightened during production (on nearly every car).

In warning news, an FDX internal memo reported by Reuters showed that the company is significantly lowering its holiday package volume forecast.  The memo did not give the new number but warned contractor delivery companies to expect a downward adjustment to forecasts soon as major shippers have told FDX executives they are adjusting their own forecasts lower.  On Saturday, SSGFF (Samsung) warned that its profits will take up to a 32% hit for the year due to a slowdown in memory chip sales, meaning its customers like INTC, AMD, NVDA, LNVGY, AAPL, HPE, and DELL must be buying less and their own forecasts could be in jeopardy.

In international news, on Saturday, Russia seized the Sakhalin-1 Oil and Gas Project, which leaves US, Japanese, and Indian investors at risk as the order puts a Russian Operator in charge and authority over whether foreign investors can retain their stakes given to the Russian government.  XOM has/had a 30% stake in the project, while Japan’s Sodeco had a 50% stake.  Elsewhere, also Saturday, Taiwan signaled that it will follow President Biden’s new export controls (issued Friday) which limit the export of semiconductor chips made anywhere in the world using US chipmaking equipment.  This will end exports from TSM (and much smaller UMC) to China.  In France, strikes at oil refineries and storage facilities owned by TOT and XOM have more than 21% of gas stations closed for lack of supply.  TOT announced it will begin wage negotiations with the union this month.  The French government said it has a plan to ration fuel, but the situation has not yet reached that point.

Overnight, Asian markets were red across the board.  Hong Kong (-2.95%), Shenzhen (-2.38%), and Shanghai (-1.66%) led the region lower.  In Europe, markets are mixed but lean to the red side in midday trading.  The FTSE (-0.31%), DAX (+0.64%), and CAC (-0.07%) lead the market, with Russia (-3.21%) being an outlier in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a flat -0.06% open, the SPY is implying a -0.15% open, and the QQQ implies a -0.25% open at this hour.  10-yeat bond yields are at 3.888% and Oil (WTI) is down eight-tenths of a percent to $91.90/barrel in early trading.

There are no major economic news events scheduled for Monday (Columbus Day).  Bond markets are closed (although stock markets are open).  However, we do have a Fed speaker (Brainard at 1 pm).  There are no major earnings reports scheduled for the day.

In economic news later this week, on Tuesday we have another pair of Fed speaker (Harker and Mester).  Then on Wednesday we get September PPI, the WASDE Ag Report, September Fed Meeting Minutes, and the API Weekly Crude Oil Stocks report and Fed member Bowman speaks.  Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

The silly season begins again later this week after a couple of days of reprieve. There are no reports scheduled for Monday or Tuesday.  Then, on Wednesday, both PEP and WIT report.  On Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, the banks really kick off the season with C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

With September Payrolls behind us and the Fed chorus continuing to beg us to believe that they will not be easing up on rate hikes anytime soon, dejected traders will start watching for earnings evidence to support their preconceived ideas. The weekend has probably taken care of the Payrolls Report volatility. However, good old-fashioned everyday volatility is likely to remain. Also, keep an eye on Ukraine as Putin is a sore loser and has lost face after 2 lanes of his Kerch Bridge were blown up on Saturday. It appears he is moving another large group of soldiers toward Belarus again, perhaps planning to take another run at Kyiv.

With this backdrop, the premarket action seems pretty mild. (Again, perhaps waiting on earnings to begin.) The market extension (to the downside) is a modest issue but we’ve seen far worse recently. So, I will start to watch for (but not expect today) a consolidation or relief rally. The one thing we know for sure this morning is that the strong bear trend is still in place and again that should be the main directional indicator we heed.

Keep in mind that trading is our job. It’s not a 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: TOST, TWTR, SNOW, RBLX, AAPL, META, SBUX, TSLA, and PYPL. 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.

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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

The 3 major indices gapped modestly lower at the open Thursday.  Then, initial volatility kicked in for the first hour of the day, reaching the day’s highs and lows in that hour.  After that, stocks meandered sideways in a tight range in the lower half of the day’s range until 2:45 pm (when the bears pushed us lower into new lows for the day.  This action left us with black-bodied, long-wick, indecisive candles in all 3 major indices.  All 3 still remain above their T-line (8ema).  This can also be seen as a Bearish Harami candle in the QQQ and SPY indices.

On the day, 9 of the 10 sectors are in the red.  Energy (+0.74%) was the lone green sector while Utilities (-2.90%) was by far the lagging sector.  Meanwhile, the SPY was down 1.04%, DIA down 1.16%, and QQQ down 0.79%.  The VXX was up 2.92% to 20.09 and T2122 fell but remains in the mid-range at 42.25. 10-year bond yields spiked to 3.822% and Oil was up 1.44% to $89.02/barrel.  Overall, this made Thursday a day of consolidation, perhaps as the market waits on today’s September Payrolls reports.

In economic news, the Weekly Initial Jobless claims came in higher than expected at 219k (versus 203k forecast and last week’s 190k reported).  Meanwhile, among Fed speakers, Minneapolis Fed President Kaskari said the Fed has “more work to do on bringing down inflation” and that the Fed is “quite a way away from being able to pause aggressive rate hikes.  At the same time, Chicago Fed President Evans said that the Fed’s rate policy is likely headed to 4.5% – 4.75% by Spring 2023, saying the Fed has “further to go” (on rate hikes).  New Fed Governor Cook said that inflation “remains stubbornly and unacceptably high and the data over the last few months show that inflationary pressure remains broad-based.”  She went on to say “we (Fed) will keep at it until the job is done.”  So, once again, every Fed speaker has told us that there is no letup in sight on Fed rate hikes (despite Fed Fund Futures pricing in a rate cut next year).

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In stock news, during the day, a French court substantially lowered the fine that had been levied against AAPL (from $1.1 billion to $366 million) for anti-competitive behavior.  While the court agreed that AAPL had abused retailers economic dependency on the company, it also overruled the guilty charge of price-fixing as unproven.  Elsewhere, TM announced that is resuming production of its first electric vehicle (which had been halted for 3 months while new safety measures were designed and implemented related to the batteries).  HMC also announced its first electric SUV, which will hit the market for the 2024 model year.  Meanwhile, the Executive Chairwoman of FFIE resigned (Oct. 3 but announced Thursday), citing death threats she has received during the ongoing fight for control of the company’s board.  In addition, BRY stock jumped during the late afternoon when Reuters reported the company is exploring “strategic options including a potential sale.”  Finally, Elon Musk again asked for a postponement of the TWTR litigation and said that he expects the original deal to close on or about Oct. 28.

In profit warning news, after the close, LEVI missed on revenue and beat on earnings.  However, it also cut its full-year forecast.  LEVI also warned on profits citing inflation and a consumer shift away from higher-end products.  Elsewhere, AMD issued its Q3 preliminary results (it is scheduled to officially report November 1, after the close).  The company said results are likely to come in well below forecast on both weaker demand and supply chain issues.  The company expects gross margins of about 50% (versus the previous forecast of 54%).  Meanwhile, Bloomberg reports that its sources indicate CS may lose $2 billion this year.  In related news, CS is trying to bring in an unnamed outside investor to purchase its advisory and investment banking units as the main part of CEO Koerner’s restructuring plan.  Finally, this morning CS announced it will be buying back just over $3 billion of its own debt and selling the bank-owned Savoy Hotel (located in the Swiss Financial district) in an attempt to fight off a falling share price and ever-increasing bets against the company’s credit default swaps.

In pot news, President Biden pardoned thousands of people with federal convictions for simple marijuana possession.  He also initiated a new review of how the drug is classified.  (Currently marijuana is classified as “schedule 1” or the most dangerous class of drug.  This is a higher classification, meaning harsher penalties, than fentanyl or methamphetamine.)  The President also went on to put pressure on state and local officials by saying nobody should be in jail solely for marijuana possession and urged governors to follow his lead on the matter.  Cannabis tickers like TLRY and CGC jumped more than 20% on the news.

Overnight, Asian markets were red across the board.  Hong Kong (-1.51%), Taiwan (-1.37%), and Shenzhen (-1.29%) led the region lower.  Meanwhile, in Europe, stocks are mixed on modest moves at midday.  The FTSE (+0.14%), DAX (-0.08%), and CAC (+0.16%) lead the region on volume, per normal, in early afternoon trade. However, it appears the region is waiting on the US September Payrolls Reports as a read-through to economic slowing (and perhaps Fed actions).  As of 7:30 am, US Futures are pointing toward a mixed, flat start to the day.  The DIA implies a +0.22% open, the SPY is implying a +0.06% open, and the QQQ implies a -0.25% open at this hour (pre-news).  10-year bond yields are up again to 3.845% and Oil (WTI) is up 1% to $89.35/barrel in early trading.

The major economic news events scheduled for Friday include Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate (all at 8:30 am).  We also have a Fed speaker (Williams at 10 am).  There are no major earnings reports scheduled for the day.

With September Payrolls data coming today, do not be surprised if a beat is bad for markets (as traders assume the Fed will keep on the path of over-sized rate hikes) and visa-versa (a miss may cause traders to jump to the conclusion that the Fed will ease up). The average estimate is for a gain of 255k jobs in September. In either case, we can probably expect the market reaction to be an overreaction and a short-lived one at that. In other words, we are likely to see a swing back the other way very soon. On top of that, there has been no indication whatsoever from Fed members that they are even considering an easing. In fact, most true Fed Watchers are of the opinion they will not change course until something in the economy breaks.

With this backdrop, the premarket action seems to be waiting on the news. Market extension is not an issue as the premarket action has us sitting on the T-line (8ema) in all 3 major indices. The one thing we know for sure this morning is that the strong bear trend has not been broken and that is the main directional indicator we should heed. As mentioned, expect significant volatility today, especially in the premarket as the Payrolls data is released. So, in general, unless you are very quick or very comfortable in high volatility, this could be a day to sit on your hands and “wait and see” at least in the morning.

Keep in mind that trading is our job. It’s not a 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 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.

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

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

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

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

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

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

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

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

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