Services PMI, JOLTs, and Fed Minutes Today

On Tuesday, the major indices all gapped down strongly on recession fear (following Europe which had the same fears).  After an hour or two (depending on the index) of bobbing along the lows, the bulls stepped in to drive a rally that lasted the rest of the day.  This caused the DIA to mostly close the morning gap, the SPY to fully close the opening gap, and the QQQ to close the gap and then travel the gap distance higher yet.  All 3 of those major indices closed on their highs with the SPY and QQQ printing outside day candles (and both closing above their T-line).  On the day, SPY gained 0.18%, DIA lost 0.36%, and QQQ gained 1.72%.  The VXX was flat at 22.55 and T2122 fell to just outside the oversold territory at 23.59.  10-year bond yields ell to 2.829% and Oil (WTI) plummeted 8.13% on that recession (demand destruction) fears to $99.59/barrel (closing below $100 for the first time since May).  

In economic news, May Factory Orders came in much higher than expected.  May was up 1.6% while a 0.5% gain was forecast and April had seen a 0.7% increase.  Unfilled orders also increased 0.4% (indicating strong demand) while orders for electrical equipment, appliances, and components declined 1.0%.  Meanwhile, bond yields again flashed a recession warning sign when the 2-year and 10-year bond yields closed inverted.  Related to President Biden dropping tariffs on Chinese goods, analysts are now estimating that eliminating those tariffs would only provide a one-time inflation reduction of 0.3%.  The small size of the reduction also makes the lifting less likely.

In business news, XOM raised its Q2 profit estimates, nearly doubling Q1 earnings. In an odd legal move, Ben & Jerry’s sued their parent company UL on Tuesday.  B&J is fighting to prevent the sale of its business to an Israeli licensee, saying that selling its ice cream in the occupied West Bank is against the company’s values.  In other legal news, JPM was fined $850,000 for not reporting certain types of forex swap trades to the CFTC.

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In energy news, on Tuesday, offshore oil and gas workers in Norway went on strike over pay, only to have the strike end a few hours later.  The Norwegian government stepped in to force a settlement.  This avoids what would have been a 1.2 million barrel per day loss of oil (almost exclusively in the European market).  Elsewhere, analysts at C are now predicting that oil prices that have soared this year will drop to $65/barrel before year-end (as a result of a recession).

In technical analysis news, today we will look at the QQQ 100.  Of those 99 stocks, 33 are trading above their 50sma.  The largest of these are GOOG, COST, AMGN, PEP, SBUX, MRNA, TMUS, CRWD, INTU, and GILD.  65 of that 99 are trading above their T-line (8ema), including the same 10, plus CHTR, PANW, PDD, VRTX, AZN, ORLY, ZM, BIDU, DDOG, and ATVI.  Of the QQQ 100, only ASML is trading at/near its own 52-week low.  None of those stocks are trading at/near their 52-week highs.

Mortgage demand fell for the second straight week and this decline could not even be stopped by a second straight week of rate drops.  The average 30-year, fixed-rate, conforming loan rate fell to 5.74% (down from 5.84% last week).  Nonetheless, loan applications fell 5.4% week-on-week.  Home purchase loan applications fell 4% for the week (17% year-on-year) while refinance applications dropped 8% for the week (down 78% from on year ago).

Overnight, Asian markets leaned heavily to the red side.  Taiwan (-2.53%), South Korea (-2.13%), and Shanghai (-1.43%) led the region lower.  However, New Zealand (+1.60%) and India (+1.13%) diverged from the rest of the region.  In Europe, stocks are strongly green across the board at mid-day.  The FTSE (+1.79%), DAX (+1.51%), and CAC (+1.56%) are leading the region higher with some of the minor exchanges moving either faster to the upside in early afternoon trading.  As of 7:30 am, US Futures are pointing towards a slightly red open.  The DIA implies a -0.15% open, the SPY is implying a -0.20% open, and the QQQ implies a -0.28% open at this hour.  10-year bond yields are down again to 2.809% while Oil (WTI)  has rebounded to $100.18/barrel in early trading.

The major economic news events scheduled for release Wednesday include June Services PMI (9:45 am), June ISM Non-Mfg. PMI and May JOLTs (10 am), and FOMC Meeting Minutes (2 pm).  We also get a Fed speaker (Williams at 9 am).  There are no major scheduled earnings reports either before the open or after the close.

In economic news coming later this week, on Thursday we get June ADP Nonfarm Employment, Imports/Exports, May Trade Balance, Weekly Initial Jobless Claims, Crude Oil Inventories and a couple of Fed speakers.  Finally, on Friday we get June Avg. Hourly Earnings, June Nonfarm Payrolls, June Participation Rate, June Unemployment Rate, and a Fed speaker.

On the earnings front, it is a very slow week.  On Thursday we do get a report from HELE and LEVI.  Then once again, there are no reports on Friday.

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On the Russian invasion story, Ukraine has asked Turkey to investigate and seize 3 more cargo ships suspected of carrying grain stolen from Ukraine and shipped from Sevastopol in Crimea.  Meanwhile, Ukraine held back Russian ground forces at the border of the Luhansk and Donetsk regions.  Elsewhere, the strain is starting to show on the Russian military.  The Russian Duma passed two laws that demonstrate this strain.  The first law requires businesses to supply goods to the military for the war effort.  The second law changes Russian labor law allowing companies who supply the military to force workers to work nights, weekends, and holidays in addition to revoking vacation leaves if the company deems it necessary to support the war effort.  These laws are also a clue that the Kremlin expects this war to continue for at least months and likely longer.

With this backdrop, the market continues to chop around the respective T-lines the last 4-5 days. However, the longer-term trend remains bearish and it looks like price is having trouble getting past the resistance caused by the long, downward move. Normally, the FOMC Minutes can cause a reaction. However, we have had so many Fed speakers telling us how they each see things that it is unlikely any new clues come from the minutes today. So, focus on the trend, support/resistance, and price action. (Also, for swing positions, don’t forget that earnings season starts anew at the end of next week. In addition, we are likely to continue getting pre-reports to manage market expectations every day now.)

Remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money! (So don’t give very damn much of it back while hoping for a home run.) Another way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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: INTC, AMZN, XBI, KR, USO, ETSY, TUP. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Recession Fears Welcome Traders Back

On Friday, markets opened roughly flat but sold off from 10 am to the lows of the day at about 10:45 am.  From that point forward the bulls rallied the rest of the day, closing very near the highs.  This left us with white candles having lower wicks in all 3 major averages.  The QQQ managed to print a Bullish Engulfing (of a Doji) candle and both the SPY and DIA managed to close back above their T-lines (8ema).  On the day, SPY gained 1.06%, DIA gained 0.98%, and QQQ gained 0.66%.  The VXX fell 2.34% to 22.54 and T2122 surged up into the mid-range at 49.53.  10-year bonds plunged to 2.889% and Oil (WTI) surged 2.5% to $108.47/barrel.

On the economic data front, June Manufacturing PMI came in better than expected (52.7 vs 52.4 est.).  However, ISM Manufacturing PMI came in well below estimates just 15 minutes later (53 vs. 54.9 expected).  Then the Atlanta Fed GDP tracker reported that we are likely in a recession now.  It estimates that Q2 GDP was -2.1% after Q1 GDP was officially announced as -1.6%.  This came after a massive 0.3% drop in the indicator on 6-27.

In business news, TLSA has temporarily closed its factories in both Germany and China, for several weeks to come.  This comes after the company also announced disappointing vehicle delivery numbers for Q2 (short of analyst estimates) over the weekend.  In China, the Model Y assembly lines will close for the next 2 weeks and then halt the Model 3 lines for 20 days starting on July 18.  Meanwhile, in Germany, the TSLA plant in Berlin will close for 2 weeks starting July 11.  However, sources told Bloomberg the company still expects to roughly double production at the Berlin plant in August

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In cryptocurrency news, on Friday afternoon, more turmoil hit the crypto market as major crypto broker Voyager Digital suspended all trading, deposits, and withdrawals. On Sunday, that company said it was pursuing “strategic alternatives” (i.e. buyout or bankruptcy).  This came as Bitcoin closed the day at about $19,300 (which, to be fair, was actually up 2.3% for the day).  In another story that does not help, it was reported Sunday that COIN has been selling geographic tracking data to the US government.  In this case, specifically selling it to the US ICE agency.  ICE has apparently been buying the ability to track every transaction of a dozen different cryptocurrencies (including Bitcoin, Ethereum, and Tether) that were processed through the COIN network since August 2021.  Then on Monday, yet another crypto lender (Vauld) also halted deposits, withdrawals, and trading. 

On the Russian invasion story, on the ground, Russian forces advanced to capture all of the Luhansk oblast (Eastern Ukraine) over the weekend.  This was a larger territorial gain than the invaders had made in the previous 2 months combined.  Meanwhile, on Sunday, Turkey seized a Russian cargo ship filled with grain stolen from the Ukraine port of Berdiansk.  On Monday, Russia is preparing to shut down the main natural gas pipeline (Nord Stream 1) to Europe for annual maintenance from July 11-July 21.  The fear in Europe is that the pipeline might not come back online if Putin plays games.  (If this happened, the European plan to fill gas storage tanks this summer in expectation of a Russian cutoff during winter would likely fail and Europe would be at serious risk.)

In Forex news, the Euro fell to its lowest level (against the dollar) since 2002 on fears of a major recession and potential natural gas shortages.  A July survey (Sentix) shows that European investor confidence has fallen to the lowest level since the early days of the pandemic shutdowns.  Meanwhile, dollar strength continues as global investors seek a safe haven for their cash reserves.

Overnight, Asian markets were mixed.  South Korea (+1.80%), Japan (+1.03%), and Taiwan (+0.93%) led the gainers.  Meanwhile, Thailand (-1.22%), Singapore (-0.52%), and Shenzhen (-0.41%) paced the losses.  In Europe, with the exception of Russia (+0.72%), the entire continent is in the red at mid-day.  The FTSE (-0.90%), DAX (-0.93%), and CAC (-1.19%) are leading the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a red start to the day.  The DIA implies a -0.39% open, the SPY is implying a -0.43% open, and the QQQ implies a -0.57% open at this hour.  10-year bond yields are up to 2.919% and Oil (WTI) is down a half of a percent to $107.89/barrel in early trading.

The major economic news events scheduled for release Tuesday are limited to May Factory Orders (10 am).  There are no scheduled earnings reports either before the open or after the close.

In economic news coming later this week, on Wednesday we get June Services PMI, June ISM Non-Mfg. PMI, May JOLTs, FOMC Meeting Minutes, and a Fed speaker.  Then on Thursday we get June ADP Nonfarm Employment, Imports/Exports, May Trade Balance, Weekly Initial Jobless Claims, Crude Oil Inventories and a couple of more Fed speakers.  Finally, on Friday we get June Avg. Hourly Earnings, June Nonfarm Payrolls, June Participation Rate, June Unemployment Rate, and a Fed speaker.

On the earnings front, it is a very slow week.  There are no major earnings reports scheduled for either Tuesday or Wednesday.  On Thursday we do get a report from HELE and LEVI.  Then once again, there are no reports on Friday.

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As July really starts, markets are still expecting a 75-basis-point rate hike on July 28 and recession fears continue to grow, although the major banks and Fed say that still is not the base case for their forecasting. With a week two before earnings season kicks off again, do not be surprised if we get pre-announcements and the lowering of forecasts as companies scramble to lower expectations not only for the Q2 reports, but also for the rest of the year. Yet, there are also some indications that (in places) inflation rates (if not prices) may have peaked.

With this backdrop, the market trend is still bearish and it looks like price is having trouble getting past the resistance of the T-line in all 3 major indices (at least in pre-market today). So, while traders typically come back from a long weekend in a good mood (and that spirit tends to lift markets for at least a day), I don’t think that will necessarily be the case today. I’m just not so sure that the current environment with growing fears of recession will lend itself to a “feeling refreshed” bounce.

Either way, don’t chase gaps. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. Always, always, always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money! (So don’t give very damn much of it back while hoping for a home run.) Another way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Rough Half Over and Long Weekend Ahead

Stocks gapped just over a percent lower at the open Thursday and then followed through at least that much lower in the next 30 minutes.  However, then the reversal took hold and the bull ran us back up to flat on the day by about 12:30 pm.  The whip was no over though as we reversed the bears ran us back down to the open levels about 45 min. later and so on and so on all day long.  This volatile action left us with long-legged, Doji or Spinning Top type candles in all 3 major indices.  All but 2 sectors were in the red again as Energy was the weakest sector for the second day in a row.  On the day, SPY lost 0.77%, DIA lost 0.62%, and QQQ lost 1.24%.  VXX climbed 1% to 23.08 and T2122 rose, but remains deep in the oversold territory at 8.95.  10-year bonds rallied late but closed down at 3.018% and Oil (WTI) was down more than 3.5% to $105.87/barrel as the day/quarter/half ended.

Speaking of the end of the period, the S&P 500 just finished its worst half since 1970, losing 21% since the start of the year.  Not to be outdone, QQQ lost more than 32% over the same period, but this was just the worst performance since the 2002 dot-com bust for the tech-heavy index.  For the month, SPY lost 8.57%, DIA lost 6.68%, and QQQ lost 9.08%.  The quarter was also brutal with QQQ down 22.69%, DIA down 11.16%, and SPY off 16.40%.

During the day we continued the trend of bad economic data.  The May PCE Price Index came in slightly lower than expected, but still near 40-year highs.  This is the Fed’s preferred inflation measure.  However, even if better than expected the number is still bad enough that they are not likely to reduce the speed of rate hikes. Meanwhile, Jobless Claims came in 3,000 higher for the week than expected.  Finally, later in the day Chicago PMI came in a bit lower than forecast, but remained in expansion territory (56.0 vs. 58.0 est.).

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In energy news, despite all the constant talk about inflation, June saw some relief.  US natural gas prices fell 16.5% for the month of June.  This was the worst monthly loss for that commodity in the last 3 years.  Over the same time span, WTI Oil fell 7.65%.  However, it is important to note that WTI is up more than 28% YTD while natural gas is up 31.3% on the year.

In cryptocurrency news, Bitcoin closed the month below $19,000.  This capped a greater than 40% loss for the month of June and it is also down more than 58% on the year.  GTBC also sued the SEC for rejecting its application to offer a Bitcoin spot-price ETF.  Finally, Celsius Network (the largest cryptocurrency lender) said late Thursday that it was now exploring strategic options including M&A deals and restructuring.  This comes after it froze withdrawals earlier in June while citing “extreme market conditions.”

After the close, MU missed on revenue while beating on earnings.  During the earnings report, MU also offered a dim outlook for the rest of 2022, on worries that consumers are not spending as much on computers and phones.  Analysts were caught off guard by all this because MU held an analyst’s day with just 2 weeks left in the quarter and were very upbeat, presenting a rosy picture.  MU stock was down hard on the news, off as much as 9.6% in after-hours trading. 

In business news, KSS announced that it has ended talks with FRG and no longer intends to pursue selling the business. The reason stated is that the retail situation has gotten significantly worse since the start of the sale negotiations.  KSS also lowered its outlook.  KSS stock is down 17% while FRG remains unchanged on the news in premarket trading.  Elsewhere, in an interesting twist, despite lockdowns in various regions across the country and generally tough market conditions, Chinese EV maker NIO reported record sales for June, delivering just under 13,000 vehicles (up 60% from one year prior).  Even more interesting is that Chinese EV rivals XPEV and Li Auto both reported even better numbers for the month.  XPEV delivered 15,295 vehicles (up 133% from the same month in the prior year)  and Li Auto delivered 13,024 vehicles (up 69% from June 2021).  NIO stock is up 2.6% and XPEV is up 3% in premarket trading.

Overnight, Asian markets leaned heavily to the downside.  Only Malaysia (+0.38%) and Thailand (+0.28%) managed any green.  Meanwhile, Taiwan (-3.26%) was an outlier to the downside as Japan (-1.73%) and South Korea (-1.17%) led the region lower.  In Europe, stocks are mixed but lean slightly toward the red at mid-day.  The FTSE (-0.25%), DAX (-0.10%), and CAC (unch.) are typical of most exchanges with half a dozen exchanges in the green led by Russia (+1.13%) 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 -0.36% open, the SPY is implying a -0.38% open, and the QQQ implies a -0.45% open at this hour.  10-year bond yields are down sharply again to 2.939% and Oil (WTI) is up nearly 2% to $107.85/barrel in early trading.

The major economic news events scheduled for release Friday are limited to June Mfg. PMI (9:45 am) and June ISM Mfg. PMI (10 am).  There are no scheduled earnings reports either before the open or after the close.

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As July starts, markets are expecting a 75-basis-point rate hike on July 28 and probably at least another half of a percent in September. As recession looks more likely, companies are falling all over one another in the mad scramble to lower forecasts (and more importantly market expectations) for the earnings season that gets into full swing in a couple of weeks. And on top of these issues, there is continued worry of very high inflation. Yet, there are also indications that (in places) inflation rates (if not prices) may have peaked. The market continues its bearish trend, but it must also be said that the trend is getting “long in the tooth” at least in the longer term.

In the short term, I would not be at all surprised if we see a low-volume day. (Thursday was the first time in two weeks we even reached the 50-day average volume in the SPY and QQQ…and even so, the DIA did not make that milestone). With a 3-day weekend ahead and news reports of travel problems (flight delays and cancellations), I expect a fair number of traders to call it a week and try to get ahead of the crowd. If you are trading, get yourself set for the long news cycle. Look at getting flat (or at least smaller), or hedged, especially if you have profits. They will sell the positions back to you Tuesday, I promise.

Don’t chase gaps. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. And always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Recession Fears Lead as 1-3-6mo Periods End

On Wednesday, markets opened flatish and essentially traded in a tight range all day.  (The QQQ was slightly more volatile, but still traded in a 1.5% range.)  This leaves us with indecisive Doji-like candles on the day, with the SPY and QQQ failing to climb back above their T-lines (8ema) and DIA managing to climb just back above and hold it.  Seven of the 10 sectors were in the red, with only Healthcare being more than half of a percent in the green.  Energy was by far the worst-performing of the sectors, being down more than 2.75% for the day.  On the day, SPY lost 0.12%, DIA gained 0.23%, and QQQ gained 0.10%.  The VXX was flat at 22.84 and T2122 dropped a bit further into the oversold territory at 7.58.  10-year bond yields fell significantly to 3.097% and Oil (WTI) fell 2.2% to $109.29 after having been up more than 1% early in the day. 

During the day, Fed Chair Powell reiterated the central bank’s pledge to fight inflation by raising rates.  Specifically, he said inflation was the biggest risk to the economy and while there is some risk of the Fed overshooting and causing a recession, it’s more important to prevent higher inflation from taking hold in the long term.  At the same event, ECB President Lagarde played down the risk of recession in Europe.  Instead, she too is more concerned about inflation and its impact on the economy of the region.  However, she also warned that the tight monetary policy required to fight inflation could be a strain on the countries with high debt levels (in particular Italy).

In business news, during the day, one of the FCC Commissioners called on AAPL and GOOGL to remove TikTok from their app stores.  In doing so, Brendan Carr cited a report that the Chinese government had accessed US TikTok users’ data.  After hours it was announced that the CEO of XRX died.  UBS also paid a $25 million fine to settle fraud charges levied by the SEC after the close.  Elsewhere, PFE and BNTX revealed they have signed a $3.2 billion deal with the US gov’t. for 105 million doses of vaccine with deliver starting in the late summer.  (There is also a US option to increase the order by another 195 million doses if needed.)  Finally, RH released a revised 2022 forecast, adjusting revenue growth projections down and also reducing the operating margin forecast.  RH stock was down as much as 8.5% in after-hours trading.

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In economic news, Bloomberg reports Senate Democrats are working to shrink the amount of tax increases (on corporations and the rich) in President Biden’s previously proposed economic plan.  This is a move to appease WV Senator Manchin and AZ Senator Sinema who were the real reason the package failed to pass earlier this year.  No timeline for a renewed proposal and vote on the package was offered by Bloomberg. Elsewhere, for what it’s worth, the CEO of WFC (Scharf) told a conference yesterday that he does not believe the economy is ready for the big Fed rate hikes he sees coming.  He went on to explain that he does not believe all the shocks caused by larger (bigger than 50 basis point) hikes have been factored into forecast models and that he feels small and mid-size businesses simply will not be able to handle the shocks that 75-basis-point or even 1% or more rate hikes as they come.

In cryptocurrency news, Bitcoin fell below $19,000 again Thursday as the digital currency selloff continues.  This rout caused crypto hedge fund Three Arrows Capital (3AC) to fall into liquidation, which added to the woes of that market.  For what it is worth, JPM crypto analysts have told customers that they believe the massive deleveraging they have seen in the crypto space is in an advanced state and may not last much longer. Finally, it was also announced overnight that the recent $100 million cryptocurrency theft at blockchain bridge Horizon is very likely a state-sponsored North Korean hack.

After the close, MLKN reported beats on both revenue and earnings.  So far this morning, AYI, STZ, and WBA all reported beats on both the top and bottom lines.  WBA specifically cited growth in its online sales channel.

On the Russian invasion story, Russia announced that its unemployment rate fell to 3.9% in May (a record low, and surely they would never cook the books).  The Russian Economic Minister also said he expects Russian GDP to contract by 7.8% for the year despite huge gains from energy sales and the impact of inflation.  (Western estimates have been 10%-35% contraction.)  In addition, according to Rosstat (a supposedly independent source), Russian Industrial production fell 1.7% for the month of May.  However, their biggest problem is that May Retail Sales fell 10.1% (after a 9.8% fall in April).  This contraction was far more than was forecast.  Elsewhere, NATO formally offered membership to Sweden and Finland after Turkey was appeased by the US promising to upgrade Turkey’s F-16 fleet.  Putin then warned that if NATO builds any defense infrastructure in either country Russia would “respond.”  On the ground, Russia retreated from Snake Island after they have repeatedly suffered heavy losses on that small, but strategic “unsinkable battleship.”

Overnight, Asian markets were mostly in the red with the exception of mainland China which popped on Chinese Manufacturing PMI rising for the first time in 4 months and President Xi declaring victory over covid.  Shenzhen (+1.57%) and Shanghai (+1.10%) were the only green in the region.  Meanwhile, Taiwan (-2.72%), Australia (-1.97%), and South Korea (-1.91%) led the region lower.  In Europe, stocks are sharply lower across the board at mid-day.  Russia (-5.70%) is an outlier.  However, the FTSE (-1.87%), DAX (-2.73%), and CAC (-2.81%) are typical and lead the region lower in early afternoon trading.  In the US, as of 7:30 am, Futures are pointing toward a strong gap lower at the start of the day.  The DIA implies a -1.18% open, the SPY is implying a -1.36% open, and the QQQ implies a -1.57% open at this hour.  10-year bond yields a plunging again to 3.046% and Oil (WTI) is off a half of one percent to $109.21 in early trading.

The major economic news events scheduled for release Thursday, include May PCE Price Index, Initial Jobless Claims, and May Personal Spending (all at 8:30 am), and Chicago PMI (9:45 am).  On the earnings front, we get reports from AYI, STZ, and WBA before the open.  Then, after the close, we hear from MU.

In economic news coming later this week, on Friday we get June Mfg. PMI and June ISM Mfg. PMI. 

On the earnings front, there are no reports on Friday, July 1.

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The worst half since 1970 is coming to an end today and Mr. Market seems to be in a “give ’em more of the same” mood this morning. With the periods ending and a long weekend ahead, we should expect volatility and quite possibly dying volume in the afternoon (if traders head out to stretch that long weekend). Moreover, it looks like price might be heading down to test a “Dreaded h” pattern in all 3 major indices. So, caution is the watchword for today.

Don’t chase gaps. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. And always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Speakers, PCE, and Oil Inventories On Tap

On Tuesday, markets gapped and then ran higher for a 1% gain across all 3 major indices during the first 10 minutes of the day.  However, this was just a bull trap.  From that point, we saw a steady and protracted selloff right into the close.  This gives us Bearish Evening Star type signals in all 3 major indices and all 3 also gave up their T-lines (8ema).  On the day, SPY lost 2.00%, DIA lost 1.57% and QQQ lost 3.05%.  The VXX rose slightly to 22.78 and T2122 dropped back into the oversold territory at 17.11. 10-year bond yields fell slightly to 3.183% and Oil (WTI) gained 2% to $111.75/barrel.

Bloomberg reported new problems in the US supply chain.  Due to the buildup in retailer inventories (ahead of the holiday season), and slowdowns by rail and trucking carriers, the largest ports in the US are dealing with over-flowing warehouses. This is due to a glut of containers awaiting shipment to the rest of the US.  The volume of inbound containers has tripled since February.  However, truck and rail carriers are unable to catch up.  As a result, 28,000 containers sit in the Port of Los Angeles, with two-thirds of them have been waiting to be loaded on rail cars for more than 9 days. This comes just weeks before 115,000 rail workers may begin a strike on July 18 (after months of failed contract negotiations and, in addition, dock workers’ contracts also expires on this Friday.  In the other (main) mode of transport, half of the truck loading gates remain unfilled daily, even as storage at both the ports of Los Angeles and Long Beach (which together handle over 42% of Asian import containers) sits at 99.7%.  (Normally there is a vacancy rate of about 5%.)   Put all together, these conditions can mean new (or worse) delays and shortages among manufacturers and retailers starting immediately.

In oil news, WTI surged another 2% Tuesday after it was reported that Saudi Arabia and the UAE have told the west they cannot increase production because they are near max production capacity.  In addition, Reuters reported Monday that the Strategic Petroleum Reserve fell by 6.9 million barrels in the last week.  This brings the SPR to less than 498 million barrels, which is the lowest level since 1986 (and down about one-third from the all-time high SPR level reached in 2010). With that all said, US oil production is still at the same level it was in 2019. So, the problem does not seem to be domestic production.

SNAP Case Study | Actual Trade

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In business news, the board of DIS has extended the contract of CEO Bob Chapek for another 3 years.  TSLA laid off 200 workers from its CA Autopilot team.  PINS CEO Ben Silbermann stepped down after the close.  Former GOOGL Commerce Unit President Bill Ready will take the vacated role.  After the close it was announced that XOM and IMO will sell Canadian assets to SPGYF (Whitecap Resources) for $1.48 billion.

So far this morning, GIS and PDCO have both reported beats on the revenue and earnings lines.  Meanwhile, MSM missed on revenue while beating on earnings.  However, BBBY and MKC both missed on the top and bottom lines. (SCHN and UNF report at 8 am). In addition, BBBY reports that its CEO is leaving the company after they missed estimates by a large margin.

In technical analysis news, the S&P 500 closed back in the bearish market territory on Tuesday with only 65 of the 502 members managing to close in the green on the day.  However, exactly half (251) of them remain above their T-line (8ema). This list includes XOM, OXY, UNH, QCOM, KO, PFE, PG, MRK, BA, BMY, and ABBV.  At the same time, 70 of the 502 are above their 50sma, including XOM, UNH, PFE, MRK, BMY, and ABBV.

On the mortgage front, after an odd increase in mortgage applications, the demand for loans was basically flat last week.  Even as the average interest rate fell to 5.84% from the prior week’s 5.98%, loan applications did not change much.  New home purchase loan applications rose 0.1% (but were still 24% lower than one year ago) while new home loan applications rose 2% (but were still down 80% from one year ago).

Overnight, Asian markets were red across the board.  Shenzhen (-2.20%), Hong Kong (-1.88%), and South Korea (-1.82%) led the way lower.  However, losses were widespread with only a couple of the smaller exchanges managing to lose less than a quarter of one percent.  In Europe, stocks are not universally in the red, but only two minor exchanges are managing to hold on to the green side of flat at mid-day (and only by their fingernails).  The FTSE (-0.59%) lags but the DAX (-2.00%) and CAC (-1.27%) are typical of the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a slightly lower start to the day.  The DIA implies a -0.08% open, the SPY is implying a -0.23% open, and the QQQ implies a -0.35% open at this hour.  10-year bond yields are down to 3.162% and Oil (WTI) is up 1% to $112.89/barrel in early trading.

The major economic news events scheduled for release Wednesday, we get Q1 GDP (final rev at 8:30), Crude Oil Inventories (10:30), and 3 Fed speakers (Mester at 6:30 am, Chair Powell at 9 am, and Bullard at 1:05 pm).  On the earnings front, we get reports from BBBY, GIS, MKC, MSM, PDCO, PAYX, SCHN, and UNF before the open.  Then, after the close, we hear from MLKN and SGH.

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

On the earnings front, on Thursday, we get reports from AYI, STZ, WBA, and MU.  There are no reports on Friday, July 1.

LTA Scanning Software

Yesterday’s much lower than expected Consumer Confidence number caused a tech rout as traders fled from growth stocks. Not only did this hit stocks, but Bitcoin is back below $20,000 again this morning. Central Bankers are not helping matters as markets watch the ECB Central Bank Forum for clues and, so far, the speeches have all pointed toward bigger and faster hikes as Euro ara inflation data gave mixed signals. (German inflation came in lower than expected while some others came in higher. Spain unexpectedly printed a double-digit inflation number.) Today the speakers will also be key with Fed Chair Powell speaking as well as BoE Governor Bailey, and ECB President Lagarde. With this all said, this may not be the day for any major new moves by traders. Month/Quarter/Half end is fast approaching, we have a long weekend ahead, and uncertainty is the rule in markets now.

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. And always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SQQQ, TZA, SDS, CVX, SU, LYFT, AMD, M, AMAT, TNA, BITO. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Trade Goods Balance, Retail Inventories

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

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

LTA Scanning Software

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

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Remember that trading is our job. So, do the work and follow the process. And always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s NOT house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Russia Defaults, Durable Goods on Tap

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

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

LTA Scanning Software

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

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ACCD, CHWY, PLTR, DKNG, ARKK, TTWO, SBUX, ZS, ZM, SNOW. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Banks Flush, Energy Edgy, Airlines Short-Staffed

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

LTA Scanning Software

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

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: BKKT, TUP, COIN, W, XBI, SHOP, U, TDOC, TLRY, BYND. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Powell Testifies, API Hints at Crude Build

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

LTA Scanning Software

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

As always, remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always, always, always move your stops in your favor. Remember the “Legend of the man in the green bathrobe“…it’s not house money, it’s all our money (so don’t give very damn much of it back). Also, the first rule of making big money in the market is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. As they say, the best time to have taken a $500 loss is when you are now staring at a $1,500 loss. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bears Say “Not So Fast” to the Relief Rally

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

Overnight, Asian markets were down sharply across the board.  Hong Kong (-2.56%), Taiwan (-2.42%), and South Korea (-2.74%) paced the losses Meanwhile, New Zealand (-0.21%) and Japan (-0.37%) were the “winners” in the region.  In Europe, we have a very similar story taking shape at mid-day.  Only Russia (+0.15%) shows any green with the FTSE (-1.18%), DAX (-1.89%), and CAC (-1.46%) leading the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -1.05% open, the SPY is implying a -1.24% open, and the QQQ implies a -1.44% open at this hour.  10-year bond yield are plummeting to 3.199% and Oil (WTI) is dropping hard, down 3.35% to $104.80/barrel in early trading.

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

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

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

LTA Scanning Software

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

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

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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