Stocks gapped significantly lower Thursday as banks missed on earnings and some Fed members were talking about a potential 1% rate hike on July 27.  The markets then sold off for the first 30 minutes before the bulls stepped in at 10 am to start a long, steady rally that reached the highs of the day at about 3:30 pm. This left us with gap-down, white candles with longer lower wicks.  As has been usual for weeks now, all the day’s action happened on lower-than-average volume. By day end, just 26% of all stocks are trading above their 40sma and only 15% of them are trading above their 200sma. All 10 sectors are in the red with Basic Materials being the worst-performing group of the day. The 3 major indices all remain below their T-line (8ema).  On the day, SPY lost 0.24%, DIA lost 0.44%, and QQQ gained 0.36%.  The VXX was flat at 22.32 and T2122 fell back into the oversold territory at 12.39.  10-year bond yields climbed to 2.959%.  However, note that the “2yr vs 5yr” and “2yr/5yr vs 10yr” yield rates are still inverted.  Oil (WTI) was flat on the day at $96.25/barrel. 

As mentioned above, earnings season got off to a less than stellar start Thursday as JPM, MS, TSM, ERIC, and CAG all reported misses on either one or both lines.  JPM CEO Jamie Dimon summed up the economy pretty well. He said that on one hand, the economy continues to grow, the job market remains strong, and consumers’ ability to spend remains healthy.  However, geopolitical tensions, high inflation, poor consumer confidence and uncertainty about Fed tightening impacts are all having very negative consequences.  For its part, JPM only missed on earnings due to increasing their bad loan reserved by nearly half a billion dollars.  However, rival MS missed on a terrible decline in investment banking revenue.  This tells us that businesses are not willing to borrow for mergers and acquisitions at this point in the cycle.  The bottom line is that this is likely a harbinger of a bad earnings season, which is something we have not seen in about a decade (give or take 2020).

In Fed news, the Fed Funds Futures now indicate a 31% probability of a 1% rate hike on July 27.  However, the most likely scenario remains a 0.75% rate increase, which has a 69% probability according to the futures.  This comes after two of the Fed hawks spoke out.  St. Louis Fed President Bullard said he would prefer a 75-basis-point hike and Fed governor Waller said that was what he supported, but said he’d be open to a larger hike if new data shows demand is not slowing.  Finally, Fed Chair Powell and former Vice-Chair Clarida were also cleared of violating any trading rules from 2019-2021 after an independent watchdog published its findings on the Office of the Inspector General’s website.

SNAP Case Study | Actual Trade

In China news, according to Bloomberg, the Chinese Ministry of Housing and Financial Regulators called an emergency meeting with Chinese banks on Thursday night.  It appears there is a widespread mortgage payment boycott taking shape with borrowers refusing to make mortgage payments on at least 100 projects spread across more than 50 cities in the country.  The fear is that this boycott will spread even wider to individual home buyers.  This appears to be a reaction to the recent real estate sector defaults and the government’s response to those companies’ situations.  JEF estimates that a default on just the 100 projects now involved would result in bad loan losses totaling 1% of the entire Chinese mortgage balance.  Elsewhere, the Chinese Q2 GDP numbers came in far below estimates.  The Chinese economy grew 0.4% in Q2 compared to analyst estimates of +1% and Q1’s +4.8% growth.  However, in a small bright spot, June Retail Sales topped expectations, rising 3.1% (no growth was the expected consensus of regional economists). GS has cut its 2022 Chinese growth projection from 4% to 3.3% in response to the news.

In business news, after the close, BAC was fined $225 million for not disbursing state unemployment benefits during the height of the pandemic.  Bloomberg reports that another investigation by regulators has resulted in $1 billion in fines from the 5 biggest US banks (GS, BAC, C, JPM, and MS).  The companies are being fined for failing to monitor/stop employees from using unauthorized, encrypted messaging apps.  It seems each bank will be fined $200 million.

On the Russian invasion story, French President Macron warned his country to prepare for a total cutoff of Russian natural gas.  He promoted alternatives, shutting off public lights at night, and engaging in what he called “energy sobriety.”  Meanwhile, the UK Ministry of Defense released an intelligence update saying that more than 2.5 million people have been forcibly “evacuated” from Ukraine to Russia (filtration camps).  Elsewhere, war crime investigators have noted a sharp increase in the number of mass graves they have found (using satellite imagery) near residential areas that were heavily targeted by Russian artillery according to the Centre for Information Resilience (a non-governmental organization focused on exposing human rights abuses).  This all comes at the same time 45 countries have signed a declaration to punish Russia for war crimes.

Overnight, Asian markets were mixed but leaned to the red side.  Hong Kong (-2.19%), Shanghai (-1.64%), and Shenzhen (-1.52%) led the region lower.  Meanwhile, Taiwan (+0.78%), India (+0.69%), and Japan (+0.54%) led the gains in the region.  In Europe, we nearly see green across the board at mid-day.  Only Sweden (-1.20%) is defying the trend as the FTSE (+0.94%), DAX (+1.63%), and CAC (+0.71%) lead the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.44% open, the SPY is implying a +0.34% open, and the QQQ implies a +0.28% open at this hour.  10-year bond yields are back down to 2.932% and Oil (WTI) is 1.5% higher to $97.23/barrel in early trading.

The major economic news events scheduled for release Friday include June Retail Sales, June Import/Export Price Index, and NY Empire State Mfg. Index (all at 8:30 am), June Industrial Production (9:15 am), May Business Inventories, May Retail Inventories, and Michigan Consumer Sentiment (all 3 at 10 am).   The major earnings reports scheduled for the day include from BK, BLK, C, PNC, PGR, STT, USB, UNH, and WFC before the open.  There are no major reports scheduled for after the close.

So far this morning, BK, C, PNC, USB, and UNH have all reported beating on both the revenue and earnings lines.  Meanwhile, WFC beat on revenue while missing on earnings.  BLK has reported significant misses on both lines. WFC took its earnings hit for similar reasons to JPM on Thursday. The company increased its reserves for bad loan losses by $588 million and also took a $576 million impairment for Q2 equity losses of its venture capital unit.

Earnings season is here again and we are getting a mixed bag right out of the shoot. Futures are showing that markets did not like that news, but probably more eyes are on inflation as yet another Fed voter (Mester) called for “at least” a 0.75% hike when the Fed announces in 2 weeks. This comes hours after Canada hiked rates by a full percent. So, for the first time, Futures are considering that there might be a 1% hike and traders are need to (and are) starting to consider how that might impact the economy and stocks. Expect more volatility and chop because the vast majority of traders don’t remember a similar situation. So, markets are likely to whipsaw back and forth as the market re-learns the lessons taught in prior decades. There are only two things that we know for sure. First, the low volumes of the last few weeks tells us there is not a huge amount of conviction in either the bull or bear camps. Second, we know the trend remains bearish in both the longer and short-term views.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: WOLF, RIDE, MRVL, BA, MSOS, BMY, AAPL, LCID, WMT, TLRY, MAT, DT, PGR. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, stocks gapped down sharply in all 3 major indices after the June CPI number came in at 9.1%, much higher than expected.  However, the chop continued as all 3 had more than filled the gap before 11 am.  From that point, we saw volatile sideways chop the rest of the day, ending on a down-swing back into the gap.  This left us with white candles with upper wicks.  All 3 failed a retest of their T-line again.  On the day, SPY lost 0.52%, DIA lost 0.72%, and QQQ lost 0.21%.  The VXX was flat at 22.41 and T2122 climbed a bit to 31.00.  10-year bond yields fell to 2.932% and Oil (WTI) was on the green side of flat at $96.09/barrel.  It is worth noting that the 2-year, 5-year, and 10-year bond yields remain inverted, which is a recession indicator.  In fact, the 2s vs 10s inversion is the largest since 2000.

In economic news, as mentioned above the June CPI came in at 9.1% annualized compared to a expected 8.8% and a 8.6% CPI printed in May.  However, (and keeping with the more than month-long decline in gas prices) later in the day, crude oi inventories showed another build of 3.254 million barrels (when a drawdown of 155,000 barrels had been expected).  This shows that demand continues to decline and, at least in oil, price is following demand.  In other economic news, Canada’s Central Bank surprised markets with a rate increase of a full percent to 2.5%.  This is expected to put the breaks on Canada’s real estate market.  US futures markets are still pricing in a 72% chance of a 75-basis-point hike by the Fed on July 28.  However, the chance of a full percentage hike is now 28% according to futures.

In energy news, ERCOT (Texas power grid) was forced to take emergency actions Wednesday to avoid rolling blackouts.  ERCOT began paying $5,000/megawatt.  The action forced electric generators to turn on supply regardless of maintenance and other plans.  The state also forced large Bitcoin mining operations to go offline and pled with residents to raise thermostats and avoid large appliance use between 2 pm and 9 pm.

SNAP Case Study | Actual Trade

I know we don’t want to hear it, but in Covid news, after Tuesday’s announcement from the WHO that they are worried about the newest variant (BA.5).  BA.5 is the most transmissible variant so far, being highly contagious.  Cases are climbing as Europe has seen a 25% spike in cases (which is significant since it is summer and people are outside more) and the US reports that 65% of new cases are of this new variant.  On Wednesday, China again ratcheted up lockdowns and testing after closing Macau casinos just 2 days earlier (they are not releasing timely case numbers).  The WHO called for countries to revisit mask mandates.  The point is that the economy, and therefore companies (or at least major employers) especially the public-facing ones, are not out of the woods yet.

In Forex news, the Euro was forced down to parity before recovering again on Wednesday, reaching its lowest level against the strong dollar in over 20 years. A weak European economy, the war-impact risks, and an unfavorable interest rate difference between the Fed and European Central Banks are stoking the flight to dollars. This situation is likely to get worse before it gets better and many analysts are predicting doomsday if Russia fails to turn back on the natural gas after the planned maintenance shutdown. While the strong dollar helps Americans who want to travel to Europe, it is a strong headwind for American companies trying to sell into the European market.

So far this morning, FRC beat on both the earnings and revenue lines.  Meanwhile, JPM beat on revenue while missing on earnings.  (It is worth noting that JPM more than explained away the down earnings by saying it was building up its “bad loan” reserves by $428 million. If even half of that was passed through to earnings they would have beaten estimates.) On the other side, TSM (the world’s largest chipmaker) missed on revenue while beating on earnings.  However, ERIC had a terrible quarter and missed on both lines.

Overnight, Asian markets were mixed on relatively modest moves.  Singapore (-1.22%) was an outlier with Thailand (-0.65%) pacing the losses.  Meanwhile, Taiwan (+0.79%), Shenzhen (+0.75%), and Japan (+0.62%) leading the gains in the region.  In Europe, stocks are red across the board at mid-day.  The FTSE (-0.85%), DAX (-0.99%), and CAC (-1.21%) are leading the region lower in early afternoon trading, but other than Russia every exchange is strongly lower.  As of 7:30 am, US Futures are pointing toward a gap down to start the day.  The DIA implies a -1.30% open, the SPY is implying a -1.22% open, and the QQQ implies a -0.85% open at this hour.  10-year bond yields have recovered to 2.961% and Oil (WTI) is off 2.9% to $93.58/barrel in early trading.

The major economic news events scheduled for release Thursday are limited to June PPI and Weekly Jobless Claims (both at 8:30 am).  However, there is a Fed speaker (Waller at 11 am).   Earnings season kicks off again with major reports scheduled from CTAS, CAG, ERIC, FRC, JPM, MS, and TSM before the open.  There are no major reports scheduled for after the close Thursday.

In economic news coming later this week, on Friday we get June Retail Sales, June Import/Export Price Index, NY Empire State Mfg. Index, June Industrial Production, May Business Inventories, and Michigan Consumer Sentiment.

In earnings reports later this week, on Friday we hear from BK, BLK, C, PNC, PGR, STT, USB, UNH, and WFC.   

Earnings season is here again and we are getting a mixed bag right out of the shoot. Futures are showing that markets did not like that news, but probably more eyes are on inflation as yet another Fed voter (Mester) called for “at least” a 0.75% hike when the Fed announces in 2 weeks. This comes hours after Canada hiked rates by a full percent. So, for the first time, Futures are considering that there might be a 1% hike and traders are need to (and are) starting to consider how that might impact the economy and stocks. Expect more volatility and chop because the vast majority of traders don’t remember a similar situation. So, markets are likely to whipsaw back and forth as the market re-learns the lessons taught in prior decades. There are only two things that we know for sure. First, the low volumes of the last few weeks tells us there is not a huge amount of conviction in either the bull or bear camps. Second, we know the trend remains bearish in both the longer and short-term views.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Tuesday stocks opened mixed and then yo-yoed up and down until 1 pm in the QQQ and SPY.  At the same time, after a small gap lower, DIA had managed to recover fast and stay modestly bullish up to that 1 pm mark as well.  However, at 1 pm a steady and accelerating selloff took over (possibly on political news), driving prices to the lows of the day at 3:30 pm.  After the Congressional hearing ended, stocks bounced up off the lows in the last 15 minutes of the day.  This leaves the 3 major indices as gap-down, black candles that are essentially Spinning Tops (indecisive).  All 3 failed in their attempt to regain the T-line (8ema) after the gap lower. 

Eight of the 10 sectors were red, with Energy by far the biggest loser and Communication Services faring the best, although that is only up 0.28%.  Overall, it was another modestly bearish day, but indecisive day, filled with reversals, and all on low volume.  On the day, SPY lost 0.88%, DIA lost 0.56%, and QQQ lost 0.97%.  The VXX climbed 1.2% to 22.48 and T2122 climbed just outside the oversold territory to 26.42.  10-year bond yields fell just a bit to 2.971% and Oil (WTI) plummeted 8% to $95.68 per barrel.

In stock news, airline stocks skyrocketed on the major drop in oil.  These include AAL (+9.98%), UAL (+8.09%), HA (+6.51%), DAL (+6.15%), and LUV (+4.64%).  Trucking companies were the other big winners, including USX (+8.39%), YELL (+7.32%), and TSP (+5.41%).  After the close, TWTR sued Elon Musk seeking to enforce Musk’s original $54.20/share takeover agreement. 

SNAP Case Study | Actual Trade

In economic news, after the close Tuesday, the IMF cut its US GDP growth forecast again.  The international group now forecasts +2.3% for 2022 after having just lowered to 2.9% in late June.  Elsewhere, US Bond yield rates are still signaling recession risk.  The 2-year yield is inverted with the 5-year and 10-year.  The 5-year yield is also inverted with the 10-year.

In Forex and crypto news, the Euro fell to parity with the Dollar on European recession fears during the day.  This was the first parity since 2002.  However, it recovered to 1.0031 per dollar by day end.  Elsewhere, Bitcoin fell over 5% to close at $19,435 and Ethereum plunged more than 8% to $1,046.  In related news, the US Treasury Dept. is seeking comment on the risks and opportunities of digital assets ahead of a report on cryptocurrencies later this year.

Average mortgage rates held steady for the week at 5.74%, while points decreased from 0.65 to 0.59 (for conforming 20% down loans).  However, demand for new home purchase mortgages fell 4% week-on-week and was 18% lower than the same week last year.  Refinance loan applications did rise 2% for the week (after several terrible weeks), but remained 80% lower than the same week one year ago. 

Overnight, Asian markets were mixed.  Taiwan (+2.68%) was an outlier to the upside, but Shenzhen (+0.56%), Japan (+0.54%), and South Korea (+0.47%) led the gainers.  On the downside, Malaysia (-1.04%), Thailand (-0.68%), and India (-0.57%) paced the losses.  In Europe, stocks are nearly red across the board at mid-day. Athens (+1.62%) is the only green in the region as the FTSE (-0.77%), DAX (-0.90%), and CAC (-0.87%) lead the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day (mind you, before CPI data).  The DIA implies a +0.22% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.38% open at this hour.  10-year bond yields are falling again at 2.948% and Oil (WTI) is up 1% to $96.83/barrel in early trade.

The major economic news events scheduled for release Wednesday include June CPI (8:30 am), Crude Oil Inventories (10:30 am), the Fed Beige Book and the June Federal Budget Balance (both at 2 pm).  The only major earnings reports scheduled for the day are DAL and FAST before the open. On that front, DAL reported a beat on the revenue line while coming up short on the earnings line.  Meanwhile, FAST missed on earnings but came in in-line on earnings.

In economic news coming later this week, on Thursday we see the June PPI and Weekly Jobless Claims.  Finally, on Friday we get June Retail Sales, June Import/Export Price Index, NY Empire State Mfg. Index, June Industrial Production, May Business Inventories, and Michigan Consumer Sentiment.

In earnings reports later this week, earnings season kicks off again on Thursday with reports from CTAS, CAG, ERIC, FRC, JPM, MS, and TSM.  Finally, on Friday we hear from BK, BLK, C, PNC, PGR, STT, USB, UNH, and WFC.   

With earnings season is one day away, all eyes will be on the CPI report later this morning. While it is expected to come in at a sizzling hot 8.8% for June. However, some analysts are considering the worst past us having seen a month-long fall in gasoline prices and computer technology prices continuing to fall as they have most of the year. Against that backdrop, it would not be surprising to continue see a knee-jerk reaction to the CPI release only to resolve in choppy action when traders realize a flood of major earnings reports start tomorrow. The one thing we know for sure is that the low volumes of the last few weeks tell us there is not a huge amount of conviction in either the bull or bear camps. With that said, the longer-term trend remains bearish, we may be sitting on shorter-term uptrend support, and we have a lot of technical damage to work through if we are going to start a rally.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped between a half a percent and a percent lower at the open.  From there we had a sideways grind with a slight bullish trend right up until 2 pm, when a selloff kicked in and drove us back to the lows at the close.  With that said, the T-line (8ema) is fighting to hold as support for all 3 major indices.  So, on the daily candles, the DIA and SPY are looking like indecisive Spinning Top or Doji candles while the QQQ is printing a black-bodied candle with a lower wick.  Nine of the 10 sectors are bearish for the day with the Utilities fairing best (barely green) and Consumer Cyclical by far the worst-performing (down almost 3%).  On the day, SPY lost 1.12%, DIA lost 0.55%, and QQQ lost 2.14%.  The VXX gained 1% on the day to 22.21 and T2122 fell into the top of the oversold territory at 18.63.  10-year bond yields fell back below the key 3% level to 2.984% and Oil (WTI) fell a little most than 1% to $103.61/barrel.  All-in-all, Monday was just another lackluster, low-volume day of chop as Mr. Market decides whether or not we’ve put in a bottom.

In energy news, the Texas grid operator (ERCOT) told state residents to curb electric use between 2 pm and 8 pm Monday to avoid major outages.  This comes as the state is experiencing a heatwave with a 110+ degree heat index over the entire Southeast part of the state.  In addition, ERCOT has a variable rate pricing plan.  So, the cost of power has gotten ridiculous again with a single megawatt hour reaching as high as $2,000 at one point Sunday (compared to an average of just $69 year-to-date).  With no market solution (not connected to national grid) and wind production significantly below normal generation levels, ERCOT has no option other than rolling brownouts and blackouts to deal with record electric demand.  However, blackouts were barely avoided Monday as crypto miners across the state all shut down in addition to other usage curbing that allowed ERCOT to narrowly avoid a worst-case scenario. With that backdrop, Bloomberg reports that nationwide, electric utilities are poised for the most profitable summer in two decades as soaring electric rates are outpacing the cost of natural gas and coal.   Among these are AEP, WEC, CMS, AEE, ES, EIX, etc.

In business news, late in the afternoon, Bloomberg reported that RIVN is planning to lay off 5% of its roughly 14,000-member workforce.  However, the report said the cuts would not affect manufacturing.  RIVN stock was down 6.5% during the day.  After the close, GPS announced its CEO is stepping down, effective immediately.  GPS stock fell 4.6% during the day and as much as another 4.25% after-hours on the news.  This morning PEP raised its revenue guidance for the year, but decided to leave earnings guidance as it was due to inflation, recession, and Russia-Ukraine risks.

SNAP Case Study | Actual Trade

In stock news, TWTR got hammered (-11.30%) Monday in reaction to Elon Musk’s electing to walk away from his $54.20 offer to buy TWTR.  The company replied with lawyers saying the termination letter was invalid and they still expect him to close the deal.  Litigation is undoubtedly ensuing.  TWTR closed at $32.65, meaning that if the deal were to somehow go through, a buyer at the close would make 66% on the sale to Musk.  Other tickers that took heavy hits Monday include DISH (-6.92%), MTCH (-6.70%), TSLA (-6.55%), WYNN (-6.46%), and LVS (-6.31%).  So far this morning PEP reported beating on both the revenue and earnings lines.  PTON also announced that it is shutting down all in-house manufacturing and instead will outsource to Taiwanese partner Rexon Industrial. Also this morning, DG announced its CEO will retire and be replaced by the current COO.

On the Russian invasion story, Europe is worried as the planned maintenance shutdown of the Nord Stream 1 gas pipeline began Monday.  The fear is that Russia will hold the resumption of gas shipments hostage and without cheap natural gas, the German economy is at serious threat.  Overnight, the US reported that Iran is set to supply Russia with “weapon-capable” drones (a feature Russian drones have lacked) as early as later this month.  On the ground, Russian forces are making incremental gains around Kharkiv and Donetsk and continue artillery assaults on the supply routes to the cities of Sloviansk and Kramatorsk according to the UK Ministry of Defence.  However, Ukraine announced (propaganda or reality) it is launching a major offensive to liberate Southern Ukraine from Kherson to Mykolaiv.

In Forex news, the Euro remains on the brink of parity with the Dollar as fear rages in Europe over inflation, recession, and the Ukraine war impacts.  The natural gas supply issue and more talk of tightening out of ECB officials are the most recent driver of this trend.  However, analysts say another “hidden” underlying fear is the increasing number of Covid cases in Chinese cities (and the impact that could have on global supply chains as well as Chinese demand).  So, for now, the dollar safe-haven trade remains in play with the EUR/USD at 1.005.

Overnight, Asian markets leaned heavily to the red side again Tuesday.  Taiwan (-2.72%), Japan (-1.77%), and Shenzhen (-1.41%) paced the losses.  However, the red was widespread, with only Singapore (+0.46%) posting any appreciable gain.  In Europe, again we see a similar story taking shape at mid-day.  With just 3 exchanges barely in the green, the FTSE (-0.60%), DAX (-0.91%), and CAC (-0.46%) are leading the region lower in early afternoon trading.  As of 7:30 am, US Futures are pointing toward another gap down to start the day.  The DIA implies a -0.86% open, the SPY is implying a -0.78% open, and the QQQ implies a -0.52% open at this hour.  10-year bond yields are back up slightly to 2.921% and Oil (WTI) is down hard (almost 5%) on recession fears to $99.03/barrel in early trading.

The major economic news events scheduled for release Tuesday we get the WASDE Report (noon) and the 10-year bond auction (1 pm).  The only major earnings reports scheduled for the day are PEP before the open and AMX after the close.

In economic news coming later this week, on Wednesday, the June CPI, Crude Oil Inventories, the Fed Beige Book, and the June Federal Budget Balance are announced.  On Thursday, we see the June PPI and Weekly Jobless Claims.  Finally, on Friday we get June Retail Sales, June Import/Export Price Index, NY Empire State Mfg. Index, June Industrial Production, May Business Inventories, and Michigan Consumer Sentiment.

In earnings reports later this week, Wednesday we get reports from DAL and FAST.  On Thursday, earnings season kicks off again with reports from CTAS, CAG, ERIC, FRC, JPM, MS, and TSM.  Finally, on Friday we hear from BK, BLK, C, PNC, PGR, STT, USB, UNH, and WFC.  

Earnings season is just a couple of days away and tomorrow we get June CPI. With both inflation and recession at top of mind for traders, it would not be surprising to continue seeing choppy “wait and see” action until we get more clues later in the week. At this point, it looks like a gap down will take us back below the T-line (8ema) in all 3 major indices at the open. However, keep in mind that regardless of how we start the day, intraday reversals and general market chop has been the norm lately. The longer-term trend remains bearish and we have resistance from recent highs and the mid-term downtrend not far overhead.

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and take those profits when you have them. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: CHGG, GM, TRGP, IRM, UPRO, OXY, TNA, PXD, CPE. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, a much stronger-than-expected June Payrolls report (assuming this keeps the Fed on track to rate hikes in 2.5 weeks) resulted in a gap lower at the open (0.2% in the DIA, 0.5% in the SPY, and 1% in the QQQ).  From that point, we got seesaw action that oscillated around the opening gap the rest of the day.  As a result, we got indecisive candles in the DIA and SPY as well as a white candle with wicks on both ends for the QQQ.  This gave us a flat day in an otherwise strong week for the bulls.  33% of stocks are trading above their 40-day average, with Energy and Healthcare being the strongest while Basic Materials was by far the weakest sector on the day.  Movers of note include ENPH, MCK, TSLA, and SEDG to the upside and TWTR, CZR, and AOS to the downside.  On the day, SPY lost 0.12%, DIA lost 0.16%, and QQQ gained 0.13%.  The VXX fell 1.5% to 21.99 and T2122 dropped back into the mid-range at 63.38.  10-year bond yields climbed slightly to 3.084% and Oil (WTI) jumped 2% to $104.86/barrel (on reduced supply out of Kazakhstan).  There also remains a bond yield inversion between the 2s and 10s, which may be a recession indicator.

On the commodities front, Dr. Copper is ringing the recession warning bell.  The price of copper has been falling sharply and steadily since the first of June, down almost 23% over that period.  Cotton has fallen 35% over the same period.  The price of steel (rebar) has been falling since early May but is falling more slowly, down just 18% over twice the length of time.  And despite complaints about inflation, even the price of gas has fallen 19% in the last month (having fallen 26 straight days).  Taken cumulatively, it is clear major buyers are slowing and reducing their orders for raw materials in anticipation of a slowdown in demand soon.

However, it should be noted that some of the fall in prices is not just related to demand.  For example, the release of US Strategic Oil Reserves has had an impact on oil (and thus gasoline prices).  In addition, a global flight to safety has resulted in an increasingly strong dollar, which in turn makes commodities cheaper in dollar terms.  For example, the dollar is up over 11% versus the Euro since the Euro peak in early February.  The dollar is also up a little over 12% against the British Pound since mid-January.  Finally, the dollar is up almost 20% against the Japanese Yen since mid-January.

SNAP Case Study | Actual Trade

In business news, during the day Friday, GOOGL offered concessions (up to selling off its ad placement business) in order to avoid a potential US antitrust lawsuit.  Then after the close, the NHTSA announced it will open a special investigation into a Wednesday Florida crash of a TSLA with a pedestrian while the “Drivers Assist” system was engaged.  Also after the close, Elon Musk notified TWTR that he is ending the deal to purchase their company, claiming TWTR hasn’t complied with contractual obligations and thus voiding the required $1 billion walk-away fee.  Finally, a German Union (Verdi) has called for a strike of the workers at 7 AMZN distribution centers in Germany for Prime Day (July 12).  

In China news, Macau has closed all its casinos for a week as of today due to rising Covid-19 case numbers.  This is the first closure in two years for the casinos, but the closure order does not impact restaurants, supermarkets, pharmacies, or other venues deemed “essential.” The South China Morning Post also reported on Sunday that Hong Kong (and its new mainland-backed government) are “considering” implementing a new health policy very similar to the mainland’s “Zero Covid” policy.  This comes as cases in Hong Kong are on the rise and several mainland cities are in the “circuit breaker” area, close to being forced to reenter city-wide lockdowns.  (That includes major cities like Shanghai and Xi’an.)  Finally, on Sunday the US Sec. of State Blinken told Bloomberg that President Biden and Chinese President Jinping are set to speak in the next couple of weeks.  The topics will include Chinese support of Russia and the potential lifting of US trade tariffs.

In terms of technical analysis, 142 of the SPY 501 are currently trading above their 50sma.  In order of liquidity, these include TSLA, AAPL, AMZN, MSFT, GOOGL, GOOG, UNH, QCOM, V, JNJ, KO, MRK, BA, ABBV, NFLX, COST, PFE, and VZ.  In addition, 316 of the 501 are trading above their T-line (8ema), including TSLA, AAPL, NVDA, AMZN, AMD, MSFT, META, GOOGL, GOOG, OXY, INTC, UNH, BAC, JPM, QCOM, V, JNJ, MU, AVGO, KO, MRK, BA, WMT, PG, ADBE, C, ABBV, NFLX, COST, PFE, TXN, MA, and HD.  Only 3 of the 501 SPY components are very near their 52-week high, including CI, VRTX, and HUM.  Meanwhile, only CE is trading very near its 52-week low.  However, more broadly, 33% of stocks are above their 40sma while only 16.92% are trading above their 200sma.

Overnight, Asian markets were mixed but leaned heavily to the red side.  Japan (+1.11%) and Malaysia (+0.50%) were the only appreciable green among exchanges in the region.  Meanwhile, Hong Kong (-2.77%), Shenzhen (-1,87%), and Shanghai (-1.27%) led the region lower.  In Europe, we see a similar pattern taking shape at mid-day.  The FTSE (-0.24%), DAX (-0.72%), and CAC (-0.56%) are representative of the region with the glaring exception of Norway (+1.46%) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.33% open, the SPY is implying a -0.44% open, and the QQQ implies a -0.61% open at this hour.  10-year bond yields are down to 3.052% and Oil (WTI) is off more than 2% to $102.54/barrel in early trading.

The major economic news events scheduled for release Monday are limited to a Fed speaker (Williams at 2 pm).  The only major earnings report scheduled for the day is GBX before the open. And GBX reported a beat on the revenue line while missing on the earnings line.

In economic news coming later this week, on Tuesday we get the WASDE Report and 10-year bond auction.  Then Wednesday, the June CPI, Crude Oil Inventories, the Fed Beige Book, and the June Federal Budget Balance are announced.  On Thursday, we see the June PPI and Weekly Jobless Claims.  Finally, on Friday we get June Retail Sales, June Import/Export Price Index, NY Empire State Mfg. Index, June Industrial Production, May Business Inventories, and Michigan Consumer Sentiment.

In earnings reports later this week, on Tuesday we hear from PEP and AMX.  Then Wednesday we get reports from DAL and FAST.  On Thursday, earnings season kicks off again with reports from CTAS, CAG, ERIC, FRC, JPM, MS, and TSM.  Finally, on Friday we hear from BK, BLK, C, PNC, PGR, STT, USB, UNH, and WFC.  

Earnings season is back upon us later this week. That, combined with recession fears have center stage in most traders’ minds. As a result, it would not be surprising to see choppy “wait and see” action until we get more clues later in the week. At this point, it looks like we will follow the rest of the world lower on recession, supply chain, and Chinee market (Covid) fears. Remember, regardless of how we start the day, intraday reversals and general market chop tends to be the norm lately. However, the longer-term trend remains bearish and we have resistance from recent highs and the mid-term downtrend not far overhead.

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and take those profits when you have them. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: VEEV, ZM, LLY, SBUX, VSCO, INTU, RIVN, LCID, PENN, AI, PLTR, TDOC, TROW, RBLX, PGEN, ACCD, NIO, WYNN, GM. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Thursday, we saw about a half of a percent higher in all 3 major indices despite the Weekly Jobless Claims and May Trade Balance both coming in higher than expected.  After that, we saw a slow steady rally that lasted the whole day and closed not far off the highs.  As a result, we had gap-up large white-bodied candles and are now about to approach a retest of the 6/27-6/28 highs.  We also have not broken the longer-term downtrend or put in a higher-high to go with our higher low (create a new bullish trend). On the day, SPY gained 1.50%, DIA gained 1.14%, and QQQ gained 2.14%.  (This was the largest winning streak since March for SPY and QQQ.)  The VXX climbed about three-quarters of a percent to 22.33 and T2122 jumped back up to just inside the lower edge of the overbought territory at 80.68.  10-year bond yields climbed back above 3% to settle at 3.002% and Oil (WTI) spiked 3.7% to $102.16.

In economic news, as mentioned, Weekly Jobless claims came in 5k above forecast (to a 16-month high) and the May Trade Balance came in $600 million above forecast.  Later in the day, crude oil inventories showed a huge inventory build.  Estimates had expected a drawdown of over 1 million barrels.  However, inventories actually climbed 8.24 million barrels, indicating massively decreased demand last week.  Also, Fed members Waller and Bullard said today that they will support a 75-basis-point rate hike later this month.  However, both also said they are currently leaning toward a half-percent hike in September.

In stock news, after the close, LEVI reported a beat on both lines and reaffirmed its forward guidance.  The stock was up more than 5% in after-hours trading.  Elsewhere, GME announced its CFO is leaving the company and more importantly they will launch a program to cut costs and reduce staff (layoffs).  During the day, GME closed up 15% but traded down as much as 10.5% in post-market trade.  In a non-surprise, a report came out after-hours saying the $44 billion TWTR buyout is in serious jeopardy.  It seems Elon Musk and his team have put the efforts to get funding for the deal on hold.  TWTR was down as much as 7.5% in post-market trade.

SNAP Case Study | Actual Trade

In China news, following yesterday’s reports of falling GDP and later of a potential Covid resurgence in Shanghai, the Chinese government is considering a stimulus package. Multiple outlets report the Chinese Ministry of Finance has authorized the sale of $220 billion (dollars) of special bonds with all proceeds going toward the acceleration of infrastructure projects.  These bond sales would be brought forward from 2023 in order to get projects started during the second half of this year.  Not mentioned is the fact that China has already accelerated bond sales to fund projects.  This is evident from the fact that the 2022 bond sales quota was completed during the first half of the year.  Elsewhere, FBI Director Wray and his UK counterpart (MI-5 Director-General McCallum) held a joint press conference in London to warn that the Chinese government is engaged in a massive hacking program.  They described the Chinese hacking as bigger than that of every other country on the planet combined.  The pair said the program was designed to systematically steal technologies and other intellectual property for use in making China economically more prosperous and competitive in the global market.

On the Russian invasion story, German news magazine Der Spiegel reported that the German Economic Minister is considering expropriating the portion of the unapproved Nord Stream 2 pipeline that is located in Germany.  The idea is that Germany would convert that for use as part of a natural gas pipeline from Baltic sources.  On the ground, Russian missile attacks continue at a high pace.  On Thursday, the Russians blew up two large grain storage facilities (hangars) in Odessa. Finally, today the Russian Foreign Minister Lavrov was (for some reason) allowed to speak at the G-20 Meeting in Indonesia.  He used the opportunity to accus the West of spreading “rabid Russophobia.”

In technical analysis news, 145 of the 495 members of the S&P500 are now trading above their 50sma.  This includes AAPL, AMZN, MSFT, GOOGL, GOOG, UNH, QCOM, JNJ, CRM, MRK, PFE, BA, ABBV, NFLX, COST, and VZ.  However, 375 of the 495 are trading above their T-line (8ema).  This includes TSLA, AAPL, NVDA, AMZN, AMD, MSFT, META, GOOGL, GOOG, OXY, INTC, UNH, BAC, JPM, QCOM, JNJ, V, PYPL, AVGO, DIS, MU, CRM, and C.  However, only CI and VRTX are trading very near their 52-week high.  None of the SPY components are trading very near their 52-week lows.

Overnight, Asian markets were mixed but lean to the green side.  Taiwan (+0.89%), India (+0.54%), and New Zealand (+0.51%) led the gains.  Meanwhile, Shenzhen (-0.61%), Shanghai (-0.25%), and Thailand (-0.29%) were the only exchanges in the red across that region.  In Europe, we see the same story taking shape at mid-day.  The FTSE (-0.44%), Russia (-0.68%), and Norway (-0.61%) are the only exchanges in the red in early afternoon trading.  However, the DAX (+0.78%) and CAC (+0.16%) are typical of the range across the rest of the region at this point.  As of 7:30 am, US Futures are pointing toward a mixed start to the day.  The DIA implies a flat +0.02% open, the SPY is implying a -0.16% open, and the QQQ implies a -0.44% open at this hour (in front of the long-awaited June Payroll data).  10-year bonds are back slightly below 3% and Oil (WTI) is flat as we await the big data dump.

The major economic news events scheduled for release Friday include June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate (all at 8:30 am), and a Fed speaker (Williams at 11 am).  There are no major earnings reports scheduled for the day.

At this point, it looks like at least the start of the day will be all about the June Payrolls data. It seems both global and US markets are treading water while waiting on that further clue. Personally, I can’t imagine a seismic shock. We know that there have not been massive layoffs, that we are still in a very tight labor market (2 openings for every applicant), but economic growth is slowing or halted. So, I can image we’ll see a modest increase in Unemployment Rate and a modest increase in average hourly wages. The more important question is the unknown “how will Mr. Market react?” Remember that (Thursday aside) intraday reversals and general market chop continues to be the norm. However, the longer-term trend remains bearish and we have resistance from recent highs and the mid-term downtrend not far overhead. Also, don’t forget that earnings season starts again at the end of next week.

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 is 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, stocks opened flat and then chopped sideways for an hour before slowly trending lower the rest of the morning.  However, at noon a slight bullish trend took over up until 2pm.  The FOMC Minutes released caused a return to that morning volatility for about a half of an hour before the bullish trend took back over driving us to the highs of the day about 3:30pm and then backing off again into the close.  This left us with white-bodied, indecisive (Spinning Top) candles sitting on top of the T-line in all 3 major indices.  Six of the sectors were in the red and four in the green on what was a risk-off day (growth sectors in the red, value sectors in the green).  This all happened on another low-volume day.  On the day, SPY gained 0.34%, DIA gained 0.23%, and QQQ gained 0.64%.  The VXX fell almost 2% to 22.16 and T2122 stayed in the lower end of the mid-range at 28.40.  10-year bond yields climbed back up to 2.932% and Oil (WTI) fell 1.6% to $97.93/barrel.

In economic news, both Services PMI and ISM Non-Mfg. PMI for June came in above forecast on Wednesday.  At the same time May Job Openings fell from the prior month, but were still above forecast.  More importantly, those openings still outnumber job seekers by a 2-to-1 margin.  (So, wage inflation will remain strong.) There was also nothing of note in the FOMC Minutes from June.  As they have publicly said, they discussed “more restrictive” policy being needed unless inflation abates.  They also said that they expect a 50-75 basis point hike will be needed in July.  (Futures markets have priced in a 75-basis point hike in July.)

In stock news, during the day Wednesday, PTON made a couple of financial gestures in hopes of retaining workers at the beleaguered company.  PTON repriced stock options (which were issued with a $27.62 exercise price) to the July 1 price of $9.13.  The company also accelerated the vesting requirement by one year.  The company also issued one-time cash bonuses to all hourly employees as long as they stay through January 2023.  Elsewhere, after the close, GME announced a 4-for-1 split for holders of record as of July 18.  GME stock surged as much as 10% in after-hours trading on the news.  AMZN also partnered with GRUB to offer a free year of unlimited food deliveries ($9.99/mo. after 12 months).  The deal allows AMZN to take a 2% stake in GRUB with the possibility to acquire up to 15% of GRUB if certain metrics are met by the partnership.  GRUB now trades under the pink sheet JTKWY and was up 14% on the news.  GRUB competitor DOOR was down 1.4% on the news.

SNAP Case Study | Actual Trade

In China news, Bloomberg reports that the Chinese GDP shrank in Q2 for the first time since 2020 (and only the second time on record).  This conclusion was reached after official and unofficial sources showed a large downturn in retail spending, 20% fewer trucks on the roads compared to a year earlier, and a continuing slump in the property sector (which accounts for one-fifth of the economy).  However, Bloomberg also expects the official numbers to hide the slump.  This contraction will be a serious challenge to President Xi Jinping’s ambitious target of 5.5% growth for the year.  The country’s “Zero Covid” policy, with only lockdowns and mass-testing as tools, continues to be another threat to that growth in the months ahead.  In addition, both US and European GDPs are both tied to China (the world’s second-largest economy) by globalization.

In energy news, Oil fell to a 12-week low on Wednesday.  This came as the Dollar reached a new 20-year high and the Euro fell to another 20-year low.  Oil traders seem more and more worried about recession demand destruction in the months ahead.   This came as Reuters forecasts that today’s inventory report will show a reduction of 1.0 million barrels last week.  This came even as the API reported an unexpected inventory build of 3.8 million barrels for the week ended June 30.  (Economists were expecting that 1.0 million reduction noted above.)

In technical analysis news, 10 of the Dow 30 are trading above their 50sma, including MSFT, UNH, JNJ, CRM, KO, MRK, VZ, AMGN, IBM, and MCD.  Exactly half of the 30 are trading above their T-line (8ema) including AAPL, MSFT, UNH, JNJ, V, CRM, KO, HD, MRK, WMT, PG, VZ, AMGN, MCD, and TRV.  CAT is still trading near a 52-week low.

Overnight, Asian markets were mostly in the green.  Taiwan (+2.51%), South Korea (+1.84%), and Japan (+1.47%) led the region higher, but the gains were widespread with only 2 exchanges modestly in the red.  In Europe, stocks are green across the board as of mid-day.  The FTSE (+1.05%), DAX (+1.43%), and CAC (+1.26%) lead the region higher on breadth alone with some of the smaller exchanges moving faster in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green open ahead of data.  The DIA implies a +0.32% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.34% open at this hour.  Meanwhile, 10-year bond prices are up to 2.937% and Oil (WTI) is up 1% to $99.47/barrel in early trading.

The major economic news events scheduled for release Thursday include June ADP Nonfarm Employment, Imports/Exports, May Trade Balance, and Weekly Initial Jobless Claims (all at 8:30 am), Crude Oil Inventories (11 am), and a couple of Fed speakers (Waller at 1 pm and Bullard at 1 pm).  Major scheduled earnings reports include HELE before the open and then after the close LEVI reports.

In economic news coming later this week, on Finally, get June Avg. Hourly Earnings, June Nonfarm Payrolls, June Participation Rate, June Unemployment Rate, and a Fed speaker.

In a very slow earnings week (with earnings season kicking off at the end of next week) there are no reports scheduled for Friday.

On the Russian invasion story, the Center for Strategic and International Studies released research claiming that Russia is still bringing in $1 billion/day in revenue from oil and gas exports.  (The most recent figures showed they were spending $325 million per day on the war in April.)  GS raised its Natural Gas price forecast, saying that “Russia restoring full flow through Nord Stream 1 pipeline after the maintenance shutdown is no longer the most likely scenario.”

With this backdrop, the bulls look like they want to make another push to start the day. However, ADP Payrolls for June and Weekly Jobless Claims may change that mood (either direction). Remember that intraday reversals and general market chop continues to be the norm. However, the longer-term trend remains bearish and even if we are making the turn in the trend, there is a lot of resistance to work through after the recent protracted move to the downside. 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: watchlist to come in room today. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

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.

SNAP Case Study | Actual Trade

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.

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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, markets 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

SNAP Case Study | Actual Trade

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.

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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped 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.).

SNAP Case Study | Actual Trade

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.

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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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