YUM Misses, UBER Beats, As SNAP Punished

Tuesday saw stocks open slightly higher and then diverge with large-caps chopping sideways and QQQ selling off before starting its own chop to the side.  SPY gapped up 0.19%, DIA opened 0.09% higher, and QQQ gapped up 0.27%.  At that point, SPY meandered sideways, recrossing its gap several times.  Meanwhile, DIA chopped to the side above its open and QQQ immediately recrossed the gap up and sold off until 12:30 p.m. before meandering along the lows.  Then, during the last 30 minutes of the day, all three major index ETFs rallied.  This action gave us a white-bodied Spinning Top in the SPY, a large-bodied, white-bodied Bullish Harami in the DIA (that bounced up off its T-line), and a black-bodied Spinning Top in the QQQ (which also bounced up off its 8ema). 

On the day, nine of the 10 sectors were in the green as Healthcare (+1.30%) and Consumer Cyclical (+1.20%) led the way higher.  Meanwhile, on the other end of the spectrum, Communications Services (-0.22%) was the only sector that stayed in the red.  At the same time, the SPY gained 0.29%, the DIA gained 0.39%, and QQQ lost 0.20%.  VXX fell another 2.43% to close at 14.05 and T2122 spiked back up into the center of its mid-range to 55.74.  10-year bond yields dropped back down to 4.09% and Oil (WTI) rose 0.92% and close at $73.45 per barrel. So, good premarket earnings led to a nice start to the day.  However, from that point forward we mostly saw drift and indecision as traders wait for a more broad-based read on earnings season (or more news and/or Fed opinions).

The major economic news released Tuesday was limited to Weekly API Crude Oil Stocks, which showed a smaller-than-expected increase of 0.674 million barrels (compared to a forecasted build of 2.133 million barrels but better than the prior week’s 2.500-million-barrel drawdown).  Elsewhere, the EIA released its short-term Energy Outlook.  The report says it expects US electricity use to rise to records in both 2024 and 2025.  (The US used 3,994 billion kWh in 2023 with 2024 demand projected at 4,112 billion kWh and 2025 at 4,123 billion kWh). 

In Fed news, Cleveland Fed President Mester said Tuesday that she is open to rate cuts if it is clear inflation is still slowing.  Mester said, “Monetary policy is in a good place from which to assess and respond” … “I don’t want to put a particular calendar date on it (rate cuts) – it really is dependent on the state of the economy.”  She added, “There’s no rush.”  Later, Philly Fed President Harker said that a soft landing was in sight for the US economy.  Harker said, “The data point to continued disinflation, to labor markets coming into better balance, and to resilient consumer spending — three elements necessary for us to stick to the soft landing we remain optimistic to achieve.”  He went on to say “real progress” is being made toward (getting back to) the Fed’s 2% target. 

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After the close, AB, AFG, AMGN, AIZ, CSL, CMG, CINF, CRUS, CNO, EW, F, FTNT, IEX, JKHY, LUMN, OI, OMC, OXBC, SONO, SNEX, VLTO, VOYA, WFRD, WU, and YUMC all reported beats on both the revenue and earnings lines.  At the same time, ASTL, AMCR, EQH, CTSH, EXEL, and SNAP all missed on revenue while beating on the earnings lines.  On the other side, GILD, KD, PRU, QGEN, VSAT, and WERN all beat on revenue while missing on earnings.  Unfortunately, AMRK, DOX, ATO, PLUS, NBR, and VFC missed on both the top and bottom lines.  It is worth noting that PLUS and GILD lowered guidance.  However, JKHY, KD, and VLTO raised their forward guidance.

In stock news, USB announced it will resume share buybacks and plans to find $3 billion more in cost savings related to integrating its acquisition of CS.  (UBS says it now expects to save $13 billion total by the end of 2026 from the CS purchase.)  Later, the UAW announced that more than 50% of the workers at VLKAF (Volkswagen) TN plant have signed requests to join the union.  (UAW previously announced it will seek recognition once that number reaches 70%.)  At the same time, DD announced a new $1 billion stock buyback program and hiked its dividend by 6%.  Later, KSS stock jumped as hedge funds (major shareholders) urged the company to sell itself.  (KSS rejected a $64/share offer in 2022, holding out for a $70/share offer that never arrived.  KSS closed at $26.80 on Tuesday.)  At the same time, AMZN announced it will cut 115 jobs from its healthcare services unit (which has 400 employees).  Elsewhere, DIS (ESPN and ABC), FOX, and WBD announced a revolutionary sports-centric subscription streaming service to be launched in the fall of 2024.  This will target non-cable, sports fan subscribers.

In stock legal, governmental, and regulatory news, the NHTSA announced Tuesday that HMC will recall 750k 2020-2021 vehicles related to airbags that could deploy unintentionally during a minor collision. (This is not related to the widely-known Takata airbag recalls across many car makers.  Instead, this is related to a natural disaster at an HMC subcontractor causing it to change the materials used.)   Later, the NHTSA announced that GM is recalling more than 323k trucks for issues that may cause the tailgate to open while driving.  At the same time, the FAA said it would post inspectors at BA, saying BA’s current quality system “is not working.”  Elsewhere, the NTSB released its preliminary report into the mid-air loss of the BA 737 MAX 9 body panel.  The report says bolts were removed to repair a damaged door plug and the bolts were not reinstalled.  Similar missing bolts were found on numerous other 737 MAX 9s.  It also cited that the system allowing BA to certify the safety of their own planes when the company’s primary goal was increasing production rates was untenable.  At the same time, the US, UK, and France along with MSFT, GOOGL, and META signed a joint statement calling for more efforts to tackle cyber spying tools.  Elsewhere, the FDA said after the close Tuesday that it has found quality control lapses at CTLT, including “pest control” issues. (NVO announced Monday it is buying CTLT for $16.5 billion in order to expand production capacity for obesity drugs.)  Later, GOOGL agreed to pay $350 million to settle a shareholder lawsuit related to a security bug in the company’s now-defunct Google+ social media platform.  (The bug exposed users personal data.)  At the same time, a CA judge grilled GM Cruise unit officials over the coverup and then disclosure of the company’s pedestrian-dragging crash in October.  (Afterward, GM raised its offer to end the investigation by CA regulators, raising it to just $112,500.) Later, AAPL won a dismissal of a lawsuit by a Silicon Valley startup accusing AAPL of monopolizing the US heart-rate monitoring apps market via its app store.

Overnight, Asian markets were mostly green, again led by China.  Shenzhen (+2.93%), Shanghai (+1.44%), and South Korea (+1.30%) led the gainers with only two of the 12 exchanges in the red.  Meanwhile, in Europe, the bourses lean toward the red side with only four of 15 bourses in the green at midday.  The CAC (-0.25%), DAX (-0.32%), and FTSE (-0.41%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures point toward a mixed and flat start to the day.  The DIA implies a -0.15% open, the SPY is implying a -0.04% open, and the QQQ implies a +0.07% open at this hour.  At the same time, 10-year bond yields are back up to 4.1333% and Oil (WTI) is up another 0.71% to $73.85 per barrel in early trading.

The major economic news scheduled for Wednesday includes Dec. Exports, Dec. Imports, and Dec. Trade Balance (all at 8:30 a.m.), Weekly EIA Crude Oil Inventories (10:30 a.m.), Dec. Consumer Credit (3 p.m.), and Fed member Bowman speaks (2 p.m.).  The major earnings reports scheduled for before the open include ADNT, BABA, ATS, ARCC, BERY, BAM, BG, CDW, CVS, EPC, EMR, EQNR, EEFT, FOXA, GPRE, GFF, HAIN, HLT, KMT, NBIX, NYT, OMF, PAG, PFGC, REYN, RBLX, SEE, TTMI, UBER, VSTS, VSH, XPO, and YUM.  Then, after the close, ALL, ARM, ASGN, BKH, CENTA, CENT, CPA, CXW, COTY, EHC, ENS, NVST, EFX, EG, FAF, FLT, GL, MAT, MMS, MCK, MAA, MKSI, MOH, MUSA, NWSA, ORLY, OSCR, PYPL, RRX, STE, SLF, SU, UHAL, DIS, and WYNN report. 

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported.  Then Friday there is no major news planned.

In terms of earnings reports later this week, on Thursday, we hear from WMS, APO, MT, ARES, ARW, ABG, AXTA, BAX, BCE, BDC, BWA, CCJ, CX, CIGI, COP, DTE, DUK, GTES, HOG, HSY, HMC, NSP, ICE, IPG, ITT, K, KVUE, LNC, MAS, MDU, NFG, PATK, BTU, PM, RL, RXO, SPGI, SNA, SPB, SAVE, TROW, TPR, TPX, THC, TRI, TDG, UA, UAA, WMG, WEX, ZBH, AFRM, ATR, BYD, CPRI, BAP, DXCM, EXPE, FE, FLO, G, PEAK, ILMN, LEG, MTD, MHK, MSI, NGL, PINS, TTWO, TEX, and TFII.  Finally, on Friday, AMCX, CTLT, ENB, FTS, MGA, NWL, PEP, PAA, PAGP, and TIXT report.

So far this morning, ARCC, BAM, CG, CMRE, CVS, EPC, EMR, EEFT, HLT, OMF, RITM, UBER, VSH, and XPO all reported beats on both the revenue and earnings lines.  At the same time, ATS, ASAZY, BERY, EQNR, PAG, and PFGC all beat on the revenue line while missing on earnings.  On the other side, BG, CDW, HAIN, KMT, NBIX, NYT, and REYN missed on revenue while beating on earnings.  Unfortunately, ADNT, BABA, GPRE, and YUM missed on both the top and bottom lines.  It is worth noting that BG, CVS, HAIN, HLT, KMT, and VSH lowered forward guidance.  However, EMR raised its guidance. Finally, it is also well worth noting that even though BABA missed on both lines, the company increased its share buyback program by $25 billion.

In miscellaneous news, Reuters reported US stock buyback programs are speeding up, now well above the average of the past 12 earnings seasons.  Companies have announced an average of $6.9 billion of stock buybacks PER DAY in the first three weeks of the Q4 earnings season.  This is the highest level at this point since the record $8.2 billion per day at this point of the Q1 2023 reporting period.  Elsewhere, surprisingly strong demand resulted in $54 billion in 3-year treasury bonds sold, just ahead of the record-setting $42 billion 10-year bond sale.  At the same time, in a big move in foreign markets, both GS and MS endorsed having their clients move their higher-risk emerging markets money from China into India, designating it as a prime investment destination for the next decade.

With that background, it looks like all three major index ETFs are looking to open little changed from Tuesday’s close. DIA is giving us the largest (black) body in the premarket but remains above its T-line (8ema). QQQ is giving us the largest (white) body candle in the early session. And, for its part, SPY is giving us a white-bodied, indecisive candle so far this morning. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the long and short term. However, you would be hard-pressed to call the action of the last several days anything other than consolidation in the rally. In terms of extension, none of the three is far from their 8ema and the T2122 indicator is now back down in the center of its midrange. This means the market has plenty of slack to work with if either side of the market gains traction. As I have been saying for a long time, keep an eye on those 10 huge tech stocks. Whatever direction they decide to go is very likely to call the tune for the rest of the market.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

Huge China Rebound Leads Global Mood

Markets opened the week a bit lower.  The SPY and DIA both opened 0.13% lower, and QQQ opened just on the red side of flat.  All three major index ETFs then followed through to the downside, reaching the lows of the day at 10:50 a.m.  At that point, all three reversed and rallied in divergent strengths. QQQ seeing the strongest rally, made it back into the opening gap by 12:40 p.m.  SPY made it back into its own gap at 2:35 p.m.  However, DIA’s shallow rally never got it back to the opening level.  All three of them had a modest selloff during the last hour of the day.  This action gave us black-bodied, Spinning Top Bear Harami candles in the SYP and QQQ.  Meanwhile, DIA printed a black-bodied candle with a good-sized lower wick.  DIA also retested its T-line (8ema) while closing back above while the other two major index ETFs did not even retest their own T-lines.

On the day, nine of the 10 sectors were in the red as Basic Materials (-2.12%) and Utilities (-1.96%) were way out in front leading the market lower.  On the other end of the performance spectrum, Healthcare (+0.27%) was the only sector that managed to stay in the green. At the same time, the SPY lost 0.36%, the DIA lost 0.73%, and QQQ lost 0.13%.  VXX fell almost 4% to close at 14.40 and T2122 plummeted back down into its oversold area to 12.25.  10-year bond yields spiked to 4.164% and Oil (WTI) also recovered to gain 0.77% and close at $72.85 per barrel.  So, great news, especially from META (+20.32%) and strong January Jobs data led to uncertainty and fear in the premarket and at the open.  However, at that point, the Bulls decided good news is good news and rallied all day until they took profits are the end of the session.

The major economic news released Monday included Jan. S&P Global Services PMI, which came in up but a bit below expectation at 52.5 (compared to a forecast of 52.9 and the December 51.4 reading.  At the same time, the S&P Global Composite PMI was also up but a bit below the expected value at 52.0 (versus a 52.3 forecast and a December reading of 50.9).  Later January ISM Non-Mfg. Employment was stronger than was predicted at 50.5 (compared to a 49.4 forecast and strongly higher from the Dec. value of 43.8).  The January ISM Non-Mfg. PMI was stronger than anticipated at 53.4 (versus a forecast of 52.0 and the December 50.5 reading).  The ISM Non-Mfg. Price Index was very hot at 64.0 (compared to the 56.5 forecast and even the 57.4 Dec. value). 

In Fed news, Fed Chair Powell sounded the same notes during his Sunday night 60 Minutes interview that he had the prior Wednesday.  Powell said it was unlikely the Fed would see enough evidence to begin rate cuts at its March meeting.  While not tying the Fed’s hands, this was a rare instance of the Fed specifically saying what is likely to happen (or not happen) at a meeting that is still six months away.  Later, Minneapolis Fed President Kashkari said that inflation is making “rapid progress” toward the Fed’s 2% target.  However, he also said that a resilient economy means the Fed has more time to study data before acting.  Kashkari said, “The implication of this is that…it gives the (Fed) time to assess upcoming economic data before starting to lower the federal funds rate, with less risk that too-tight policy is going to derail the economic recovery.”

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After the close, ACM, AMKR, CBT, COHR, FN, ITUB, NXPI, PLTR, SPG, and SKY all reported beats on both the revenue and earnings lines.  At the same time, CHX and HI reported misses on revenue while beating on earnings.  On the other side, SSD beat on revenue while missing on earnings.  However, CCK, FMC, and VRTX missed on both the top and bottom lines.  It is worth noting that AMKR, CCK, and SPG lowered their forward guidance.  Meanwhile, COHR, and VTRX both raised their guidance.

In stock news, EL said it would cut 3% to 5% of its workforce (meaning 1,850 – 3,100 jobs) due to Chinese buyers backing off from higher-priced luxury goods in favor of low-margin alternatives.  At the same time, YNDX (widely known as Russia’s Google) announced a $5.21 billion deal to exit Russia by selling its Russian operation to a group of Kremlin-approved investors.  Later, politics reared its head in the Nippon Steel purchase of X for $15 billion as the ex-President said that, if elected, he would immediately block the deal.  This, theoretically could lead to a revival of a lesser offer from US-based (and Trump ally-backed) CLF.  At the same time, STLA CEO Elkmann denied that the company has any plans for a merger with any other car manufacturers (or specifically French-led PUGOY or Renault).  This denial came after an Italian newspaper said on Sunday was studying a merger between the companies.  Later, BA announced they had found “mis-drilled holes” in the fuselages of 50 of its 737 MAX planes that have not been delivered yet.  This is the latest quality issue for both the company and that product line.  Elsewhere, DOCU shares fell on Monday after reports indicated that acquisition talks with multiple hedge funds have stalled as the sides disagree on price.  At the same time, META’s internal Oversight Board has determined that an AI deep-fake video suggesting the President is a pedophile does not violate the company’s current content rules (and can remain online).  The group went on to say the company’s current rules are too narrow and incoherent related to AI-generated content.  Later, SNAP said it would cut 528 employees (10% of staff) as part of a cost-cutting measure.  At the same time, SAP said that it would stop buying TSLA vehicles.  Later, NSC said Monday that it completed a $1 billion improvement in its infrastructure during 2023.  At the same time, CMS announced it has reached a “definitive agreement” to sell its appliance service plan business to a private firm for an undisclosed amount. After hours, PINC announced a $1 billion share buyback program and a $400 million accelerated share repurchase transaction with BAC.  At the same time NTCO said it is considering splitting into two companies.  Later, NVS announced it will acquire MOR for $2.9 billion. 

In stock legal, governmental, and regulatory news, a bill being floated in the US House targets Chinese biotech firm Wuxi Apptec by forbidding federally-funded drugmakers from dealing with the company (among others).  The mere anticipation of a potential bill has caused a major selloff of the chares of that company.  However, that company is also partners with several western pharma companies, such as PFE, AZN, and GSK.  These western companies have not yet taken a hit but are at risk. Later, Reuters reported that the US Dept. of Justice has opened a probe into the ADM accounting practices based on an SEC inquiry.  At the same time, the US Dept. of Transportation has begun investigations after videos emerged over the weekend showing human drivers wearing AAPL Vision Pro headsets (and gesturing with both hands) while also driving their TSLA vehicles.  Later, a US federal judge set a date of September 9 date for a jury trial in the US DoJ (and a coalition of states) antitrust suit against GOOGL.  At the same time, FNB agreed to pay a $13.5 million settlement with the US Dept. of Justice and the state of NC over charges of redline discrimination.  Elsewhere, RIO is facing criminal worker safety charges after an employee was seriously injured at a Canadian mine. The charges allege RIO failed to implement and maintain reasonable safety practices and procedures.  At the same time, the FAA urged Congress NOT to increase the airline pilot mandatory retirement age prior to the agency conducting more research.  (DAL, AAL, and LUV are among the airlines pushing for this increase.)  In other FAA news, the agency said that 94% of the BA 737 MAX 9 planes have now been inspected and returned to service following the January mid-air emergency.  After the close, the European Medicines Agency granted RARE’s GTX-102 therapy the PRIME (Priority Medicine) status.  At the same time, WBD won a dismissal of a class action brought by the OH Attorney General claiming concealed negative financial information prior to the company’s 2022 merger with T.  Meanwhile, a US appeals court found that BAYRY (Bayer) is not shielded from lawsuits claiming the company’s Roundup weedkiller caused cancer. (BAYRY had claimed federal regulator approval of the product shielded it from lawsuits over product safety.)  At the same time, Reuters reported that RTX was served subpoenas by the SEC related to 2023 disclosures over the use of powdered metals in engines made by its Pratt and Whitney subsidiary.

Overnight, Asian markets were mixed but leaned toward the green side led by a huge Chinese rebound.  Shenzhen (+6.22%) Hong Kong (+4.04%), and Shanghai (+3.23%) led the region higher with only four of the 12 exchanges in the red.  In Europe, things are even more green at midday with only four of 15 bourses in the red.  The CAC (+0.26%), DAX (-0.07%), and FTSE (+0.54%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start just on the red side of flat.  The DIA implies a -0.14% open, the SPY is implying a -0.08% open, and the QQQ implies a -0.05% open at this hour.  At the same time, 10-year bonds are unchanged at 4.164% and Oil (WTI) is up six-tenths of a percent to $73.22 per barrel in early trading.

The major economic news scheduled for Tuesday is limited to member Weekly API Crude Oil Stocks (4:30 p.m.) and Fed Mester speaks (noon).  The major earnings reports scheduled for before the open are include AGCO, ALFVY, AME, ARMK, ARCB, BP, CARR, CNC, CHKP, CEIX, CMI, DD, LLY, ENR, FSV, FI, ULCC, IT, GRHC, HTZ, INGR, J, KKR, LEA, LIN, NJR, NVT, PNM, SCSC, ST, SPR, SPOT, TM, WAT, WTW, and XYL. Then, after the close, AMRK, ASTL, AB, AMCR, DOX, AFG, AMGN, AIZ, ATO, EQH, CSL, CMG, CINF, CRUS, CNO, CTSH, EW, PLUS, EXEL, F, FTNT, GILD, IEX, JKHY, KD, LUMN, MASI, NBR, OI, OMC, PRU, QGEN, SNAP, SONO, SNEX, VLTO, VFC, VSAT, WFRD, WERN, WU, and YUMC report.

In economic news later this week, on Wednesday we get Dec. Exports, Dec. Imports, Dec. Trade Balance, Weekly EIA Crude Oil Inventories, Dec. Consumer Credit, and Fed member Bowman speaks.  On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported.  Then Friday there is no major news planned.

In terms of earnings reports later this week, on Wednesday, ADNT, BABA, ATS, ARCC, BERY, BAM, BG, CDW, CVS, EPC, EMR, EQNR, EEFT, FOXA, GPRE, GFF, HAIN, HLT, KMT, NBIX, NYT, OMF, PAG, PFGC, REYN, RBLX, SEE, TTMI, UBER, VSTS, VSH, XPO, YUM, ALL, ARM, ASGN, BKH, CENTA, CENT, CPA, CXW, COTY, EHC, ENS, NVST, EFX, EG, FAF, FLT, GL, MAT, MMS, MCK, MAA, MKSI, MOH, MUSA, NWSA, ORLY, OSCR, PYPL, RRX, STE, SLF, SU, UHAL, DIS, and WYNN report.  On Thursday, we hear from WMS, APO, MT, ARES, ARW, ABG, AXTA, BAX, BCE, BDC, BWA, CCJ, CX, CIGI, COP, DTE, DUK, GTES, HOG, HSY, HMC, NSP, ICE, IPG, ITT, K, KVUE, LNC, MAS, MDU, NFG, PATK, BTU, PM, RL, RXO, SPGI, SNA, SPB, SAVE, TROW, TPR, TPX, THC, TRI, TDG, UA, UAA, WMG, WEX, ZBH, AFRM, ATR, BYD, CPRI, BAP, DXCM, EXPE, FE, FLO, G, PEAK, ILMN, LEG, MTD, MHK, MSI, NGL, PINS, TTWO, TEX, and TFII.  Finally, on Friday, AMCX, CTLT, ENB, FTS, MGA, NWL, PEP, PAA, PAGP, and TIXT report.

So far this morning, ARMK, CNC, CHKP, CEIX, LLY, ENR, FI, GEHC, J, KKR, LIN, MLI, WAT, WTW, and XYL all reported beats on both the revenue and earnings lines.  At the same time, AME, ARCB, CARR, DD, ULCC, IT, INGR, NVT, and PNM missed on revenue while beating on earnings. On the other side, LEA and ST beat on revenue while missing on earnings.  Unfortunately, ALFVY, BP, NJR, and SPOT missed on both the top and bottom lines.  It is worth noting that DD, ST, and SPOT lowered their forward guidance.  However, NJR raised its forward guidance.

In Global news, on Monday, China’s securities regulator said it would tighten scrutiny of margin financing and short selling to stabilize their stock markets. The group also said it would be providing new guidelines to brokers, giving investors more time to answer margin calls.  At the same time, Chinese brokers who buy mainland shares for their offshore units were forbidden from reducing their positions.  Some hedge funds were banned from placing sell orders completely while others were just barred from cutting stock positions in their leveraged market-neutral funds.  These were the primary reasons behind Tuesday’s massive rebound rally. At the same time, in Germany, the government unveiled a $17 billion plan to subsidize the conversion of natural gas power plants to hydrogen fuel to supplement the country’s intermittent renewable power generation program. Over the longer term, this could impact both US LNG exports to Europe and the leverage Russia holds over European energy demands. Finally, despite missing on both the top and bottom lines, BP helped UK stocks rally when it announced it will buy back $3.5 billion of its stock during the first half of 2024.

With that background, it looks like all three major index ETFs are looking to open little changed from Monday’s close. DIA is giving us the smallest body (true Doji) but is retesting its T-line in the early session. Meanwhile, SPY is printing another inside-day type Spinning Top in the premarket. QQQ is giving us the largest (black) candle body in the early session but again is little changed from Monday’s closing price. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the long and short term. However, we are also in a consolidation of the rally at the very least. In terms of extension, none of the three is far from their 8ema. However, T2122 is now back down in it oversold region. This means the market has slack to work with to run in either direction, but the bulls may have a little more room to work. With that said, it is worth noting that the market can stay oversold longer than we can stay solvent predicting reversals too early. So, be careful and follow the trend.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Earnings Focus With Less Econ News This Week

The Bulls were in charge all day Friday with the exception of some profit-taking at the end of the session. SPY opened up just 0.09%, DIA gapped down 0.31%, and QQQ gapped up 0.41% after great big tech earnings (AMZN and META) and strong January Payrolls data.  Then from the open, markets rallied steadily all day long until a selloff in the last 45 minutes, especially the last 5 minutes of the day on the dark pool data.  This action gave us large white-bodied candles in all three major index ETFs, with an upper wick.  All three printed new all-time highs and new all-time high closes.  Obviously, all three are above their T-line (8ema).  This happened on slightly above-average volume in the QQQ, SPY was just a tad less-than-average volume, and DIA had less-than-average volume.

On the day, six of the 10 sectors were in the red as Technology (+1.51%) was by far the leading sector dragging the market higher.  On the other end of performance, Communications Services (-2.44%) was by far the lagging sector in the rally.   At the same time, the SPY gained 1.02%, the DIA gained 0.33%, and QQQ gained 1.73%.  VXX was just on the red side of flat to close at 14.99 and T2122 dropped back further toward the center of its mid-range to 56.95.  10-year bond yields climbed to 4.026% and Oil (WTI) fell 2.30% to close at $72.12 per barrel.  So, great news, especially from META (+20.32%) and strong January Jobs data led to uncertainty and fear in the premarket and at the open.  However, at that point, the Bulls decided good news is good news and rallied all day until they took profits are the end of the session.

The major economic news released Friday included Jan. Avg. Hourly Earnings, which came in twice as strong as expected at +0.6% on a month-on-month basis (compared to a forecast of +0.3% and December’s +0.4%).  On a year-on-year basis that was +4.5% (versus a forecast of +4.1% and a December value of +4.3%).  So, given inflation is down, Americans saw real wage growth again in January. At the same time, January Nonfarm Payrolls nearly doubled what was predicted at +353k (compared to the forecast of +187k and even stronger than the December +333k reading).  This was true of the Jan. Private Nonfarm Payrolls as well which were up 317k (versus a +155k forecast and a December reading of +278k).  So, the economy continues to create jobs at a massive rate, laughing in the face of the recession predictors.  The January Participation Rate remained steady at 62.5% (a tick lower than the forecast of 62.6% but in line with December’s 62.5%).  This all led to a slightly better than anticipated Jan. Unemployment Rate of 3.7% (versus a forecast of 3.8% but in line with the Dec. 3.7% value). It is worth noting that this is two consecutive years that the unemployment rate has been less than 4%.  (This is something the US has not seen in more than 50 years.) 

Later, December Factory Orders rose but were a tick lower than expected at +0.2% (compared to the +0.3% forecast and far lower than the massive December +2.6% reading).  At the same time, Michigan Consumer Sentiment was also stronger than expected at 79.0 (versus a 78.8 forecast and much higher than December’s 69.7).  Michigan Consumer Expectations also was stronger than predicted at 77.1 (above the forecast of 75.9 and far above the Dec. 69.7).  Michigan 1-year Inflation Expectations were flat at 2.9% (compared to a 2.9% forecast but down from the previous 3.1% expectation).  Finally, Michigan 5-year Inflation Expectations also stayed flat at 2.9% (which was a tick higher than the 2.8% forecast but in line with the prior month’s 2.9%).  Overall, the only possible way to spin that data as not good would be to say that this may, in theory, give the Fed pause about a March rate cut.  (However, the Fed already told us that on Wednesday.)  So, job growth is still incredible, real wages are growing, and consumers have strong current sentiments and expectations.

Click for video

In Fed news, Fed Governor Bowman said Friday that inflation is falling and she expects it to decline further.  However, she also said there are some worries about upward price pressures.  She warned against cutting rates too soon.  Specifically, Bowman said, “My baseline outlook is that inflation will decline further with the policy rate held at the current level.”  She noted the declines in inflation are “encouraging.”  However, she said, “I will remain cautious in my approach to considering future changes in the stance of policy.”   Later, Chicago Fed President Goolsbee told PBS “The economy still feels strong…the headline numbers (today) were almost breath-taking…and this is in the context that inflation has been coming in better than expected as well…so it is quite positive on both sides.”

In stock news, Reuters reported that Jeff Bezos will be selling 50 million shares of AMZN by January 31, 2025.  At the same time, the UAW announced that more than 30% of HYMTF (Hyundai Motors) AL plant employees have signed cards seeking to join the union.  (At 70%, the UAW would seek recognition and the plant would become a union shop.)  Later, AAPL’s $3,500 Vision Pro “mixed reality” headset hit Apple stores on Friday.  This was the company’s first new product in seven years.  However, it will be a tough sell at its high price, plus weighing 1.4 pounds (without battery) and is being marketed like a computer you wear on your head all day.  Friday marked a milestone with META’s great report leading to the largest single-day gain in market cap ever as it gained more than $205 billion.  (The prior record holders were AAPL and AMZN both at +$190 billion in a single day in 2022.)

In stock legal, governmental, and regulatory news, on Friday, the NHTSA upgraded their probe of power steering problems on 2023 TSLA cars. This is another step toward a potential recall.  At the same time, BLKB agreed to a settlement with the FTC related to a data breach, agreeing to internal policy and procedure changes.  No fine was levied.  Meanwhile, the UK antitrust agency launched an investigation into the $14 billion VOD acquisition of CKHUF.  Later, in other TSLA news, the company agreed to pay a $1.5 million fine to settle a lawsuit brought by 25 CA counties for mishandling, purposefully mislabeling, and disposing of hazardous waste in landfills in those counties.  At the same time, a US appeals court announced it would hear arguments in June related to the JBLU and SAVE appeal hoping to overturn a lower court (and FTC) blocking their $3.8 billion merger.  Elsewhere, a federal judge certified a class action lawsuit against AAPL as customers allege the company has monopolized the iPhone app market by banning purchases of apps from anywhere other than the Apple app store.  The suit will cover anyone who has spent $10 or more in the AAPL app store.  (This follows after AAPL agreed to stop this policy in Europe due to EU legal requirements.)

Overnight, Asian markets were strongly in the red.  Singapore (-1.43%), Shenzhen (-1.13%), and Shanghai (-1.02%) led that region lower.  Only Japan (+0.54%) and Taiwan (+0.20%) were able to hold onto green territory.  Meanwhile, in Europe, 12 of the 15 bourses are in the green at midday.  The CAC (+0.13%), DAX (+0.28%), and FTSE (+0.53%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly down start to the day.  The DIA implies a -0.16% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.15% open at this hour.  At the same time, 10-year bond yields are up to 4.092% and Oil (WTI) is down 0.94% to $71.60 per barrel in early trading.

The major economic news scheduled for Monday includes Jan. S&P Global Services PMI and S&P Global Composite PMI (both at 9:45 a.m.), Jan. ISM Mfg. Employment and Fed member Bostic speaks at 2 p.m.  The major earnings reports scheduled for before the open include AMG, APD, ALGT, CAT, CNA, EL, IDXX, MCD, ON, TKR, and TSN.  Then, after the close, ACM, AMKR, CBT, CHX, COHR, CCK, FN, FMC, HI, ITUB, NXPI, PLTR, SPG, SSD, SKY, and VRTX report.

In economic news later this week, on Tuesday Fed member Mester speaks and Weekly API Crude Oil Stocks are reported.  Then Wednesday we get Dec. Exports, Dec. Imports, Dec. Trade Balance, Weekly EIA Crude Oil Inventories, Dec. Consumer Credit, and Fed member Bowman speaks.  On Thursday, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, WASDE Ag report, and Fed Balance Sheet are reported.  Then Friday there is no major news planned.

In terms of earnings reports later this week, on Tuesday we hear from AGCO, ALFVY, AME, ARMK, ARCB, BP, CARR, CNC, CHKP, CEIX, CMI, DD, LLY, ENR, FSV, FI, ULCC, IT, GRHC, HTZ, INGR, J, KKR, LEA, LIN, NJR, NVT, PNM, SCSC, ST, SPR, SPOT, TM, WAT, WTW, XYL, AMRK, ASTL, AB, AMCR, DOX, AFG, AMGN, AIZ, ATO, EQH, CSL, CMG, CINF, CRUS, CNO, CTSH, EW, PLUS, EXEL, F, FTNT, GILD, IEX, JKHY, KD, LUMN, MASI, NBR, OI, OMC, PRU, QGEN, SNAP, SONO, SNEX, VLTO, VFC, VSAT, WFRD, WERN, WU, and YUMC.  Then Wednesday, ADNT, BABA, ATS, ARCC, BERY, BAM, BG, CDW, CVS, EPC, EMR, EQNR, EEFT, FOXA, GPRE, GFF, HAIN, HLT, KMT, NBIX, NYT, OMF, PAG, PFGC, REYN, RBLX, SEE, TTMI, UBER, VSTS, VSH, XPO, YUM, ALL, ARM, ASGN, BKH, CENTA, CENT, CPA, CXW, COTY, EHC, ENS, NVST, EFX, EG, FAF, FLT, GL, MAT, MMS, MCK, MAA, MKSI, MOH, MUSA, NWSA, ORLY, OSCR, PYPL, RRX, STE, SLF, SU, UHAL, DIS, and WYNN report.  On Thursday, we hear from WMS, APO, MT, ARES, ARW, ABG, AXTA, BAX, BCE, BDC, BWA, CCJ, CX, CIGI, COP, DTE, DUK, GTES, HOG, HSY, HMC, NSP, ICE, IPG, ITT, K, KVUE, LNC, MAS, MDU, NFG, PATK, BTU, PM, RL, RXO, SPGI, SNA, SPB, SAVE, TROW, TPR, TPX, THC, TRI, TDG, UA, UAA, WMG, WEX, ZBH, AFRM, ATR, BYD, CPRI, BAP, DXCM, EXPE, FE, FLO, G, PEAK, ILMN, LEG, MTD, MHK, MSI, NGL, PINS, TTWO, TEX, and TFII.  Finally, on Friday, AMCX, CTLT, ENB, FTS, MGA, NWL, PEP, PAA, PAGP, and TIXT report.

In miscellaneous news, Reuters reported Friday that so far, about 80% of Q4 earnings reports have beat analyst expectations.  (For reference, 76% of S&P 500 companies have beat analyst expectations on average in the last four quarters.)  Overall, S&P 500 earnings are now expected to increase 7.8% in Q4 relative to the same quarter in 2022.  (This is up from a +6.4% estimate as of Thursday and the +4.7% estimate at the beginning of January.)   Elsewhere, even as Congress is deadlocked and unable to pass any of the budget proposed early in 2023, the White House announced President Biden will release his proposed budget for 2024 on March 11.  (Assuming there are no more continuing resolutions to push things down the road, this will be 3 days after the current CRs from 2023 expire.)

In global news, the UN Food and Agriculture Organization said food prices fell to near a 3-year low in January. The report noted, “Global wheat export prices declined in January driven by strong competition among exporters and the arrival of recently harvested supplies in the southern hemisphere countries.”  Elsewhere, the US began a series of airstrikes against Iranian-backed militias in Syria and Iraq on Friday.  These strikes went beyond just the militias and also targeted Iranian Quds Force personnel and facilities.  (Quds force is part of the Iranian Revolutionary Guard.) The Pentagon said it conducted 125 strikes (both missile and aircraft-launched bombings) on 85 command and control targets across 7 unique locations.  The Pentagon spokesman made a point of telling the media this was just the beginning of the reprisals and would continue at the times and places of the US’s choosing.  On Saturday, a second day of strikes were launched at additional targets in both Iraq and Syria as well as 30 Houthi targets in Yemen. 40 militants were reported killed on Saturday.  On Sunday the airstrikes on the Houthi continued.

So far this morning, CAN, EL, IDXX, L, and TKR reported beats on both the revenue and earnings lines.  Meanwhile, AMG, CAT, and MCD all missed on revenue while at the same time beating on earnings.  Unfortunately, APD missed on both the top and bottom lines.  It is worth noting that both APD and TKR lowered their forward guidance.  For what it is worth, MCD claimed the Israel – Hamas war was a key to their revenue miss, citing boycotts in Arab countries (who feel MCD supporting attacks on Palestine) as a cause of its revenue miss.

With that background, it looks like all three major index ETFs are giving us indecisive (Doji-like), white-bodied, inside-day-type candles not far below the Friday close. QQQ looks the strongest so far. All three remain above their T-line (8ema). So, the Bulls remain in control of the trend in both the longer term and short-term. In terms of extension, none of the three is too far stretched from the 8ema. T2122 is also still in the center of its mid-range. This means the market has slack to work with to run in either direction if either the Bulls or Bear can gain enough momentum to do it.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Big Tech Leads Surge Ahead of Jobs Data

Thursday was a bit of a roller coaster ride with the Bulls getting the best of the deal.  SPY gapped up 0.35%, DIA opened flat at +0.01%, and QQQ gapped up 0.44%.  At that point, all three major index ETFs ran that roller coaster up and then back down, bottoming out at about 11:15 a.m.  (DIA had crossed below the prior close by then, but SPY and QQQ were still in the top part of their opening gap.)  From there, all three began a steady and at times briefly volatile rally the entire rest of the day. SPY and DIA both closed on their highs, while QQQ closed just 31 cents short of its high.  SPY and QQQ joined DIA by crossing back above their T-line (8ema).  This action left all three as large, white-bodied candles.  The DIA printed a Bullish Harami after bouncing up off its T-line. This happened on just less-than-average volume in the three index ETFs.

On the day, all 10 sectors were in the green as Consumer Defensive (+2.05%), Basic Materials (+2.05%) and Utilities (+1.96%) led the way higher.  On the other end of performance, Financial Services (+0.03%) barely participated in the rally.  At the same time, the SPY gained 1.31%, the DIA gained 0.98%, and QQQ gained 1.18%.  VXX lost just 0.79% to close at 15.01 and T2122 climbed into the top half of its mid-range to 68.72.  10-year bond yields dropped again to 3.88% and Oil (WTI) fell 2.45% to close at $73.99 per barrel.  So, mostly good earnings and good economic data led us to a gap higher.  After some volatility, the Bulls stepped in to lead a rally most of the day with traders taking prices out on the highs.

The major economic news released Thursday included Weekly Initial Jobless Claims, which came in higher than expected at 224k (compared to a forecast of 213k and the prior week’s 215k reading).  At the same time, Weekly Continuing Jobless Claims also came in a bit hot at 1,898k (versus the forecast of 1,840k and the previous week’s 1,828k value).  Meanwhile, Q4 Unit Labor Costs grew far less than predicted at +0.5% (compared to a forecast of +1.3% but still higher than Q3’s decline of 1.1%).  This led to a Q4 Nonfarm Productivity gain much higher than anticipated at +3.2% (versus a forecast of +2.4% but again far less than Q3’s +4.9% increase).  Later, the January S&P Global Mfg. PMI was stronger than expected at 50.7 (compared to the 50.3 forecast and the prior month’s downwardly revised 47.9 reading).  Then at 10 a.m., Dec. Construction Spending also came in much stronger than predicted at +0.9% (versus a forecast of +0.5% but in line with November’s +0.9%).  At the same time, ISM reported January Mfg. Employment was slightly above expectations at 47.1 (versus a 47.0 forecast and down from the previous month’s 47.5 reading).  January ISM Mfg. PMI came in well above predictions at 49.1 (compared to the 47.2 forecast and 47.1 prior month).  However, the January ISM Mfg. Price Index came in very hot at 52.9 (versus a 46.0 forecast and a 45.2 prior month index).  Finally, after the close, the Fed Balance Sheet came down significantly to $7.630 trillion versus the prior week’s $7.677 trillion (which was a $47 billion decline).

After the close, AMZN, AAPL, TEAM, CLX, DECK, DXC, EMN, ENSG, HIG, HOLX, HLI, KMPR, LPLA, META, MTX, NOV, OTEX, POST, RGA, and X all reported beat on both the revenue and earnings lines.  Meanwhile, HUBG, MCHP, SKX, and SKYW missed on revenue while beating on earnings.  Unfortunately, COLM and GEN missed on both the top and bottom lines.  It is worth noting that TEAM, CLX, DECK, ENSG, META, and POST all raised their forward guidance. However, COLM, DXC, MCHP, and SKX lowered guidance.

Click for video

In stock news, BLBD announced a $60 million stock buyback program.  Later, during its conference call, MRK said it is in the market for acquisitions of up to $15 billion to prepare for the revenue decline of its Keytruda (the top-selling prescription drug, with $25 billion in sales in 2023).  Keytruda goes off-patent at the end of the decade and is expected to top out at $30 billion per year by 2026.  At the same time, META announced it will be deploying an in-house designed custom chip in its data centers (to reduce META’s dependence on NVDA chips) to support its push into AI.  For reference, recently CEO Zuckerberg said it will have 350,000 of NVDA’s “H100” GPUs in place by the end of the year.  H100’s sell for $29,000.  Later, BECN announced it had acquired private Roofer’s Supply for an unspecified sum to greatly expand its presence in the Southeast US.  Meanwhile, JPM, BAC, JEF, and DB are in talks to provide $8 billion in financing for DOCU to take itself private through a leveraged buyout.  At the same time, one day after a Delaware judge threw out Elon Musk’s $56 billion pay package, Musk said he would hold a shareholder vote on moving TSLA’s state of incorporation from DE to much more compliant TX. Elsewhere, CSX announced it reached an agreement with four more groups of workers and will extend paid sick leave to employees represented by those unions.  Later, WCN announced they had completed the acquisition of Canadian firm Secure Energy Services for roughly $1.4 billion.  At the same time, INGR announced it had sold its South Korean unit for $294 million.  Later, the Wall Street Journal reported that INTC will delay its $20 billion fab project in OH, citing a slowdown in chip orders.  The OH facilities are now not expected to finish construction until late 2026.

In stock legal, governmental, and regulatory news, the EU said Thursday that it has begun looking into how big tech companies (GOOGL, AMZN, META, BABA, VOD, TSLA, and AAPL) have moved into the financial services sector.  This is a joint look by the EU’s banking, insurance, and securities regulators and is based on concern that big tech will increase instability in those sectors across Europe.  Later, a Federal Appeals Court dismissed an appeal by investors which accused the world’s 10 largest banks (BAC, BCS, BNPQY, C, GS, JPM, MS, NWG, and UBS…CS was also a defendant but was acquired by UBS) of antitrust violations for rigging prices in the US Treasury market.  Later, the White House said it had sent out opening offers in the first-ever price negotiations to the manufacturers of 10 high-cost drugs (including BMY, PFE, JNJ, and MRK).  At the same time, a coalition of labor groups filed a lawsuit seeking to block an MA state ballot initiative saying that ride-share and delivery drivers would be treated as contractors instead of employees in the state.  UBER, LYFT, DASH, and CART all were part of the drive to get the initiative on the ballot, but the suit alleges that the petitions gathered by the industry groups covered several different and vaguely worded proposals (such as limiting a company’s liability for accidents) that were worded to confuse petition signers.  Elsewhere, the FDA granted CABA “orphan drug status” for its investigational therapy for myositis.  This status grants them tax credits waived fees, and 7-years of exclusive marketing rights for the drug.  At the same time, the FDA gave clearance to HOLX for its AI-based cervical cancer screening system.  After the close, a federal appeals court threw out a $366.2 million verdict against FDX for racial bias.  (In an odd ruling, the appeals court said it found sufficient evidence to support the plaintiff’s claims but reduced the pain and suffering award by 75% to 248k and said she was not entitled to any of the $365 million in punitive damages.  In essence, saying FDX was indeed guilty but the company should not be forced to pay for firing an employee that reported racial discrimination.  The basis of the ruling was that the plaintiff had not proven the company did it with malice toward her specifically as opposed to anybody that reports racial discrimination.)

So far this morning, ABBV, BSAC, BMY, BBU, BEP, CBOE, CHD, CI, REGN, and SAIA have all reported beats to both the revenue and earnings lines.  At the same time, AON, CHTR, and LYB beat on revenue while missing on earnings.  On the other side, CVX and XOM missed on revenue while beating on earnings.  There were no reported misses on both the top and bottom lines.  It is worth noting that BMY also raised its forward guidance.

Overnight, Asian markets leaned toward the green side with only the three Chinese exchanges in the red while the other nine were green.  Shenzhen (-2.24%) and Shanghai (-1.46%) were the only significant losers while South Korea (+2.87%) Australia (+1.47%), Thailand (+1.18%), and Singapore (+1.17%) paced the gainers.  In Europe, only Russia (-0.01%) is very marginally red while the other 14 exchanges are well into the green at midday.  The CAC (+0.68%), DAX (+0.85%), and FTSE (+0.50%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed but green start to the day.  The DIA implies a +0.11% open, the SPY is implying a +0.67% open, and the QQQ implies a +1.13% open at this hour.  At the same time, 10-year bond yields are up very slightly to 3.884% and Oil (WTI) is just on the red side of flat at $73.74 per gallon in early trading.

The major economic news scheduled for Friday include Jan. Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, and Jan. Unemployment Rate (all at 8:30 a.m.), Dec. Factory Orders, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations (all at 10 a.m.).  The major earnings reports scheduled for before the open are include ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW.  There are no earnings scheduled for after the close.

It is worth noting that the huge beats by AMZN and META are leading to the global rally we are seeing this morning. Despite the company’s job cuts in 2023, the company delivered better-than-expected profits, its first-ever quarterly dividend, and it announced a $50 billion stock buyback program. However, this is tempered somewhat by AAPL, which beat but is worrying markets because it reported slowing iPhone sales in China (which represents 20% of company sales). There is also renewed angst over regional banks after NYCB was down another 11% Thursday on top of Wednesday’s record 38% plunge.

In miscellaneous news, JPM said Thursday that January saw a record for the US issuance of institutional leveraged loans.  This happened as falling borrowing costs enticed many companies to borrow.  $140.1 billion net was borrowed for the month, including $51.4 billion in refinancing with the rest made up of new debt.  Elsewhere, IBKR reported an increase in trading activity in January, up 11% from 2023 and up 12% from December.  Margin loan balances also increased 12% over January 2023 to $44.3 billion.  Meanwhile, the US House of Representatives has scheduled a vote on a bill aimed at overturning the Biden Administration pause in LNG project approvals until a climate impact study is completed. However, this is a political stunt by the GOP since the bill stands virtually no chance of approval in the Senate.

In geopolitical news, the EU agreed on a deal to provide Ukraine with $54 billion in financial aid after Hungarian Putin-puppet Orban finally agreed.  In the announcement, the EU shamed the US saying they hope their example encourages the US to do its fair share of supporting democracy by backing Ukraine.

With that background, it looks like we are headed to a strong start to the day (ahead of January Jobs data). Both SPY and DIA gapped up in the premarket and are at new all-time highs. putting in white body candles after the start of the early session. QQQ made the biggest premarket gap up but has not reached its all-time high yet (although it is not far away) and it has put in an indecisive Doji candle since then in the early session. All three major index ETFs are above their T-line (8ema). So, the Bulls remain in control of the trend in the longer term and short-term. In terms of extension, none of the three is too far stretched from the 8ema. T2122 is also still in its mid-range. This means the market has room to run in either direction if the Bulls or Bear can gain enough momentum to do it. Also, continue to keep an eye on those Tech Big Dogs. If those 7-10 stocks lead in one direction, it’s nearly impossible for the rest of the market to do anything but follow given their trading volumes. Finally, remember that its Friday. So, pay yourself and prepare your account for the weekend.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Rethinking Fed Move as More Data Ahead

Wednesday was a bearish day with gaps lower after GOOGL, MSFT, and AMD all beat but disappointed the market. SPY gapped down 0.44%, QQQ gapped down 1.05% and DIA was the exception that proves the rule opening 0.17% higher.  At that point, SPY and QQQ sold off for an hour before trading sideways until 2 p.m.  Meanwhile, DIA just meandered sideways after the open crossing and recrossing the opening gap until 2 p.m.  When the Fed announced no rate cut we saw a modest knee-jerk lower in all three major index ETFs.  However, this more than recovered by 2:30 p.m.  Then when Chair Powell said the FOMC is not ready to cut rates yet and implied doubt about a March start to cuts, all three sold off hard until 3 p.m. and then drifted lower into the close.  This action gave us an Evening Star that crossed down the T-line (8ema) in the SPY.  At the same time, DIA gave us a Bearish Engulfing candle but did not cross below its T-line.  QQQ moved the most, gapping down through its T-line and giving us a large black candle with only an upper wick.

On the day, all 10 sectors were in the red as Technology (-2.42%) was way out in front leading the way lower.  At the same time, the defensive plays Healthcare (-0.34%) and Utilities (-0.43%) holding up better than the other sectors.  Meanwhile, the SPY lost 1.63%, DIA lost 0.81%, and QQQ lost 1.96%.  Meanwhile, VXX popped up 5.07% to close at 15.13 and T2122 dropped all the way down through its mid-range to end just above oversold territory at 22.05.  10-year bond yields plummeted to 3.912% and Oil (WTI) dropped 2.61% to close at $75.79 per barrel.  So, markets started lower on future (not current) earnings worries among the big tech names.  Then we trod water for most of the day.  Even the Fed announcement was basically a non-event since it was very widely anticipated.  However, Fed Chair Powell’s words shocked traders with fear we won’t get a March rate cut, and that flushed the market the rest of the day.  This all happened on above-average volume in the SPY and DIA as well as well-above-average volume in the QQQ.

The major economic news released Wednesday included January ADP Nonfarm Employment Change, which came in well below expectations at +107k (compares to a forecast of +145k and well below the prior reading of +158k).  Later, Q4 Employment Cost Index also came in below predictions at +0.9% (versus a forecast of +1.0% and the Q3 reading of +1.1%).  Later on, January Chicago PMI also came in a bit light at 46.0 (compared to the 48.0 forecast and the prior 47.2 value).  Then EIA Weekly Crude Oil Inventories showed an inventory build of 1.234 million barrels (versus a forecasted drawdown of 0.217 million barrels and far higher than the previous week’s 9.233-million-barrel drawdown.

In Fed news, the FOMC held the Fed Funds target rate steady at 5.25% – 5.50%.  It also removed language saying it was willing to keep increasing rates but also language that indicated inflation was headed back toward its 2% inflation goal.  In addition, the statement added language indicating it is not yet ready to cut rates.  The statement said, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”  More importantly, Fed Chair Powell commented on this, saying, “I don’t think it’s likely that the committee will reach a level of confidence by the March meeting (to lower rates…but that’s to be seen.”  Powell also said, “Inflation has eased over the past year, but remains elevated.”  He went on, “The Fed’s interest rate target is likely at its peak for this tightening cycle” …and “the Fed will likely cut rates at some point this year.”  Finally, Powell said, “we are not declaring victory, we think we still have a way to go.”

Click for video

After the close, ALGN, AVB, AXS, CCS, CMPR, CTVA, CACC, FLEX, MTH, MEOH, NXT, PTC, QRVO, QCOM, SEIC, SIGI, and TTEK all reported beats on both the revenue and earnings lines.  At the same time, BHE, BOOT, THG, and UGI all missed on revenue while beating on earnings.  On the other side, MET beat on revenue while missing on earnings.  Unfortunately, AFL, BV, CHRW, LSTR, and VSTO all missed on both the top and bottom lines.  It is worth noting that BOOT, CTVA, FLEX, and LSTR lowered forward guidance.  However, CCS, NXT, QRVO, and TTEK raised their own guidance.

In stock news, NVAX announced it will lay off 12% of its workforce (about 240 people) in a cost-cutting move for the cash-strapped biotech.  At the same time, Reuters side that Byron Allen had submitted a $30 billion offer to buy PARA, including both debt and equity.  (This came hours after Bloomberg had reported the offer was $14.3 billion for the outstanding shares.)  Later, META CEO Zuckerberg apologized to parents (for the damage social media has done) after Senators of both parties dragged the CEOs of META, SNAP, AAPL, X (Twitter), TikTok, GOOGL, and others over the coals for a lack of monitoring, age restriction, and parental reporting of inappropriate social media content and targeting of children.  (Coincidentally, I’m sure, many of the companies subpoenaed instituted new policies covering overuse by children as well as various content age restrictions within the last week.)  At the same time, financial stocks took a hit Wednesday as NYCB cut its dividend after posting a surprise loss.  (NYCB closed down 37.67% on the news.)  Later, CI announced it had sold its Medicare business unit to HCSG for $3.3 billion. Elsewhere, ADM closed its acquisition of flavor company Fuerst Day Lawson.  Later, TSLA announced it will buy equipment to expand its NV factory to produce Lithium batteries from its Chinese supplier CATL (a controversial partner that has F under attack for partnering with in MI).  TSLA says the move will reduce its costs for batteries.

In stock legal, governmental, and regulatory news, EBAY agreed to pay $59 million and upgrade its compliance measure to settle US Dept. of Justice charges that the company sold pill-making equipment to criminals making counterfeit drugs.  Later, BA was sued by shareholders alleging the company prioritized short-term profit over safety, and misled them about the company’s commitment to making safe aircraft.  At the same time, a group of 25 CA counties sued TSLA alleging the company mishandled hazardous waste at its facilities in that state. (The core allegation is that TSLA regularly mislabel hazardous waste and sends it to landfills in those 25 counties.)  The law being cited calls for civil penalties of $70k per day per violation.  Later, the US Dept. of Health and Human Services announced 2025 reimbursement rates for Medicare Advantage programs that show a total increase of 3.7%.  At the same time, a US District Judge dismissed DIS’s lawsuit against FL Governor DeSantis and members of his appointed state board.  In the dismissal, the judge ruled DIA lacked standing to sue the governor or state Sec. of Commerce.  Elsewhere, the FAA said its previously announced comprehensive audit of BA production will include all elements of production at fuselage supplier SPR.

Overnight, Asian markets were evenly mixed with five exchanges in the red, six in the green, and one remains unchanged.  Australia (-1.20%) was by far the biggest loser (by half of a percent) while South Korea (+1.82%) was by far the biggest gainer (by more than one percent).  Meanwhile, in Europe, we also see a mixed board at midday.  The CAC (-0.69%), DAX (-0.09%), and FTSE (+0.45%) lead the mixed region in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day.  The DIA implies a +0.11% open, the SPY is implying a +0.40% open, and QQQ implies a +0.57% open at this hour.  At the same time, 10-year bond yields are up a bit to 3.944% and Oil (WTI) is up nine-tenths of a percent to $76.52 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 Nonfarm Productivity, and Q4 Unit Labor Costs (all at 8:30 a.m.), S&P Global Mfg. PMI (9:45 a.m.), Dec. Construction Spending, Jan. ISM Mfg. Employment, Jan. ISM Mfg. PMI, Jan. ISM Mfg. Price Index (all at 10 a.m.), and Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open are include FLWS, ATI, MO, ATKR, BALL, BDX, BR, BIP, BC, CAH, CMS, DLX, DOV, ETN, EPD, RACE, HON, HII, ITW, IP, JHG, KEX, LANC, LAZ, MKL, MRK, PH, PTON, PBI, DGX, RVTY, RCI, RCL, SBH, SNY, SNDR, SIRI, SR, SWK, TSCO, TT, WNC, WEC, and WRK.  Then, after the close, AMZN, AAPL, TEAM, CLX, COLM, DECK, DXC, EMN, GEN, HIG, HOLX, HLI, HUBG, KMPR, LPLA, META, MCHP, MTX, NOV, OTEX, POST, RGA, SKX, SKYW, and X report.

In economic news later this week, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Dec. Factory Orders, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations are reported.

In terms of earnings reports later this week, on Friday, ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW report.

So far this morning, MO, ATKR, BR, BIP, CAH, ETN, EPD, RACE, HII, KEX, LAZ, MRK, PTON, PBI, DGX, RVTY, SBH, SHEL, SKFRY, and SR all reported beats to both the revenue and earnings lines.  At the same time, FLWS, BALL, BDX, CMS, DLX, DOV, FCFS, HON, IP, RCL, SIRI, SWK, TAK, TT, WNC, and WEC all missed on revenue while beating on earnings.  On the other side, GOOS beat on revenue while missing on earnings.  Unfortunately, BC, ING, SNY, and WRK missed on both the top and bottom lines.  It is worth noting that BC, DOV, and DGX lowered forward guidance.  However, CAH, MRK, and RCL raised their guidance.

In miscellaneous news, CENTCOM announced Wednesday that the US had destroyed a Houthi surface-to-air missile that presented an imminent threat to US aircraft. Later, a US Destroyer intercepted a Houthi anti-ship missing in the Gulf of Aden. Meanwhile, the US carried out airstrikes against “a number of Houthi drone sites.” So, the Red Sea and Suez Canal remain to be hotspots as the Israeli invasion of Gaza continues. At the same time, the US House of Representatives is set to vote on a bipartisan package of tax breaks for businesses (making R&D and capital expenses and capital investments deductible through at least 2025).  However, the measure would require a two-thirds majority to pass.  The bill also modestly increases Child Tax Credits for low-income taxpayers. 

In China news, FBI Director Wray warned a House Select Committee Wednesday that “China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike.”  Wray said that Chinese government-backed hackers are targeting things like water treatment plants, transportation, electrical infrastructure, as well as oil/natural gas pipelines.  Elsewhere, Bloomberg reported Wednesday evening that China is now openly engaged in a massive banking system overhaul.  Reportedly, Beijing is merging hundreds of rural lenders into giant regional banks.  This process has been slowly and quietly going on in the background since 2022.  However, the process has greatly accelerated in the last month as the country seeks to tackle the $7 trillion credit risk amidst a Chinese real estate collapse.  (For reference on scope, China is said to have between 1.5 and 3 BILLION unoccupied housing units nationally. This is because the government has a strong record of seizing bank deposits.  So, for years or decades, ordinary Chinese people have banded together to invest their savings in investment properties as a way to save with less risk of confiscation.  This resulted in a huge glut of unused, non-producing, and unsaleable housing…leading to massive numbers of loan defaults.)

With that background, it looks like (at least ahead of the economic data dump) we are getting a modestly bullish rethink of the Fed. All three major index ETFs opened the premarket higher and are putting in small, white-bodied candles so far in the early session. SPY is retesting its T-line (8ema) and all three are showing inside candles (Bullish Harami type) for the premarket. DIA remains above its T-line and QQQ is still below and not yet retesting. None of the three have broken their uptrend lines, but all three are close to the trend. So, the Bulls remain in control of the trend in the longer term but after yesterday’s candle, the very short-term trend has to be bearish. In terms of extension, none of the three is too far stretched from the 8ema. T2122 has also fallen but remains outside of its oversold range. This means the market has room to run in either direction if the Bulls or Bear can gain enough momentum to do it. Also, continue to keep an eye on those Tech Big Dogs. Once again yesterday it was those stocks that led markets lower. If those 7-10 stocks lead in one direction, it’s nearly impossible for the rest of the market to do anything but follow given their trading volumes.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

GOOGL and AMD Guidance Disappoints

On Tuesday, markets opened a bit lower.  SPY opened down 0.15%, DIA opened down 0.12%, and QQQ gapped down 0.25%.  At that point, we saw a bit of divergence with SPY meandering back and forth across the gap all day.  Meanwhile, DIA did the same until about 10:45 a.m. when it very lowly rallied the rest of the day, closing not far from the highs.  However, QQQ continued to slowly sell off all day long after the open closing not too far up off the low.  This action gave us a white-bodied Spinning Top candle.  At the same time, QQQ printed a black-bodied Bearish Harami. But DIA gave us a white-bodied, large-body candle.  DIA printed a new all-time high and a new all-time high close.  SPY gave us a new all-time high, but not a new all-time high close.  Obviously, all three remained above their T-line (8ema).

On the day, five of the 10 sectors were in the green as Energy (+0.74%) led the way higher.  At the same time, Technology (-0.90%) was by far the worst-performing sector. Meanwhile, the SPY lost 0.08%, DIA gained 0.31%, and QQQ lost 0.67%.  Meanwhile, VXX lost 1.30% to close at 14.40 and T2122 dropped back outside of its overbought territory to the very top of the mid-range at 79.55.  10-year bond yields dropped to 4.036% and Oil (WTI) climbed 1.32% to close at $77.79 per barrel. So, markets started the day down just a bit and then diverged.  Tech (and in turn the QQQ) which have led markets for a long, long time, moved a bit lower while the lagging mega-cap DIA kept climbing and SPY trod water.  This all happened on a lower-than-average volume in the SPY and DIA as well as a just less-than-average volume in the QQQ.

The major economic news released Tuesday included January Conf. Board Consumer Confidence, which came in just below expectation at 114.8 (compared to a forecast of 115.0 and the previous reading of 108.0).  Still, that was a two-year high for the gauge.  At the same time, December JOLTs Job Openings were higher than predicted at 9.026 million (versus a forecast of 8.750 million and a November value of 8.925 million).  So, the economy remains strong with employers continuing to look for new employees.  Finally, after the close, Weekly API Crude Oil Stocks showed a larger drawdown than anticipated at -2.500 million barrels (compared to a forecasted -0.867 million barrels but far less than the prior week’s 6.674-million-barrel drawdown).

After the close, AMD, GOOGL, AX, BXP, CP, CB, EQR, FIBK, GOOG, MTCH, MSFT, MDLZ, RNR, RHI, SWKS, SYK, TSBA, and UMBF all reported beats on both revenue and earnings.  At the same time, ASH, ENVA, FBIN, LFUS, MOD, and TER all missed on revenue while beating on earnings.  On the other side, HA and UNM both bear on revenue while missing on earnings.  However, EA, JNPR, and SBUX missed on both the top and bottom lines.  It is worth noting that AMD, EA, LFUS, MOD, and MDLZ lowered their forward guidance.  Meanwhile, ASH, SYK, and UNM raised guidance.

Click for video

In stock news, GM CEO Barra promised to buy back another 200 million (of 1.2 billion outstanding) shares.  In addition, she promised a 33% dividend increase. Later, Nippon Steel announced it had agreed in principle to $16 billion in loans from MUFG and the two other largest Japanese banks for the financing to buy X.  Later, WHR said that the Red Sea problems (causing ships to go around Africa on the way to Europe, adding 15 days to the transit from Asia) will begin impacting its European business, but did not specify a financial impact.  At the same time, APH announced it is acquiring a division of CSL in a $2 billion all-cash deal.  Later, ENB said it would be cutting 650 jobs (5% of its workforce) as part of a cost-cutting drive. Elsewhere, Bloomberg reported that PYPL plans to lay off 9% of its workforce in 2024.  At the same time, Reuters reported that TSLA vehicle registrations in CA fell in Q4, the first decline in more than three years.  45,952 TSLA cars were registered in CA in Q4, down from 52,782 in Q4 of 2022. Later, NDAQ announced it is planning to cut “hundreds” of jobs as it integrated fintech firm Adenza into its operations.  Other employees will be reassigned as the technology eliminates the need for many employees.  (NDAQ bought Adenza for $10.5 billion in June 2023.)   After the close, WMT announced a 3-for-1 stock split as of February 23.

In stock legal, governmental, and regulatory news, an Australian court heard closing arguments in a case against BAYRY (Bayer).  The judge will decide whether BAYRY’s Roundup weedkiller caused cancer.  At the same time, Saudi Arabia told the national oil company to ditch plans to expand production, which essentially canceled major projects for SLB, HAL, and BKR, which were all down sharply on the news.  Later, BA said that it was withdrawing a request for exemption of safety regulations for its 737 MAX 7 (an exemption the company has been lobbying Congress and the FAA to get for a year) amidst the ongoing fallout from its quality control crisis.  Meanwhile, the NY Attorney General filed suit against alleging the company failed to protect and reimburse victims of fraud.  At the same time, the US Chamber of Commerce and two Texas business groups sued seeking to force the FCC to allow businesses to discriminate when it comes to internet access.  (The suit seeks to let internet service providers charge different groups different rates and give them different levels of bandwidth based on race, ethnicity, religion, or income level.  Elsewhere, JBLU and SAVE filed for an expedited appeal in their bid to overturn a lower court ruling preventing the companies from merging (which itself came after the FTC had blocked the merger).  At the same time, V was sued by consumers alleging that the company had failed in its duty to make “vanilla” gift cards less likely to be drained by thieves.  (This involved cards sold at WMT, TGT, and CVS among other retailers, which the complaint said can be drained by thieves while still inside their packaging at the stores and undetected by consumers.)  Meanwhile, a Delaware judge invalidated Elon Musk’s $56 billion pay package from TSLA, siding with shareholders who had called the package unfair.

So far this morning, ADP, AVY, BA, BSX, GIB, EVR, FTV, HES, LII, NDAQ, NMR, OTIS, ROP, TEVA, TMO, and UMC all reported beats on both the revenue and earnings lines.  Meanwhile, APTV, EAT, ODFL, PSX, and SLGN missed on revenue while beating on earnings.  On the other side, GPI, NAVI, and NYCB beat on revenue while missing on earnings.  However, MHO and ROK missed on both the top and bottom lines.

Overnight, Asian markets were mixed with China again down sharply.  Shenzhen (-1.95%), Shanghai (-1.48%), and Hong Kong (-1.39%) led the losses while Australia (+1.06%), India (+0.95%), and Japan (+0.61%) paced the gains.  In Europe, bourses lean heavily to the green side at midday with four spots or red amidst 11 spots of green on the board at the break.  The CAC (+0.13%), DAX (-0.01%), and FTSE (+0.10%) “lead” the region higher on volume with many smaller exchanges up stronger such as Athens (+1.55%) in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed but leaning strongly bearish start to the day.  The DIA implies a +0.09% open, the SPY is implying a -0.47% open, and QQQ implies a -1.05% open at this hour.  At the same time, 10-year bond yields are down a bit to 4.026% and Oil (WTI) is down 1.00% to $77.04 per barrel in early trading.

The major economic news scheduled for Wednesday includes Jan. ADP Nonfarm Employment Change (8:15 a.m.), Q4 Employment Cost Index (8:30 a.m.), Jan Chicago PMI (9:45 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), FOMC Rate Decision and FOMC Statement (both at 2 p.m.), and FOMC Press Conference (2:30 p.m.).  The major earnings reports scheduled for before the open are include APTV, ADP, AVY, AVY, BA, BSX, EAT, COR, GIB, EVR, FTV, GPI, HES, LII, MHO, MA, NDAQ, NYCB, NVO, ODFL, OTIS, PSX, ROK, ROP, SLGN, TEVA, TMO, and UMC.  Then, after the close, AFL, ALGN, AVB, AXS, BHE, BOOT, BV, CHRW, CCS, CMPR, CTVA, CACC, FLEX, THG, LSTR, MTH, MEOH, MET, NXT, PTC, QRVO, QCOM, SEIC, SIGI, TTEK, UGI, and VSTO report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 Nonfarm Productivity, Q4 Labor Costs Index, S&P Global Mfg. PMI, Dec. Construction Spending, Jan. ISM Mfg. Employment, Jan. ISM Mfg. PMI, Jan. ISM Mfg. Price Index, and Fed Balance Sheet.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Dec. Factory Orders, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations are reported.

In terms of earnings reports later this week, on Thursday, we hear from FLWS, ATI, MO, ATKR, BALL, BDX, BR, BIP, BC, CAH, CMS, DLX, DOV, ETN, EPD, RACE, HON, HII, ITW, IP, JHG, KEX, LANC, LAZ, MKL, MRK, PH, PTON, PBI, DGX, RVTY, RCI, RCL, SBH, SNY, SNDR, SIRI, SR, SWK, TSCO, TT, WNC, WEC, WRK, AMZN, AAPL, TEAM, CLX, COLM, DECK, DXC, EMN, GEN, HIG, HOLX, HLI, HUBG, KMPR, LPLA, META, MCHP, MTX, NOV, OTEX, POST, RGA, SKX, SKYW, and X.  Finally, on Friday, ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW report.

In miscellaneous news, the Biden Administration announced it had offered another tender for 3 million barrels with a June delivery date.  This is the latest tranche in the bid to refill the Strategic Petroleum Reserve. Elsewhere, President Biden said Tuesday that he has decided how the US will respond to the deadly drone attack on US troops in Jordan (by Iran-backed militia).  Most analysts believe the most likely response will be attacks on some Iranian-backed militias and/or assets in the Middle East (such as Syria and Iraq).  However, the President took the statesmanlike tone that we didn’t need an expanded regional conflict such as a direct strike on Iran itself is likely to bring.

In other news, the IMF raised its global growth forecast for 2024 on Tuesday.  The new expectation is for 3.1% global GDP growth (up from a +2.9% forecast from October).  In the process, the IMF echoed what the Fed has been saying, stating that growth is holding up even as inflation continues to fall.  IMF Chief Economist Gourinchas went on to say the world is in its final descent into a soft landing.  In the US, mortgage demand for new home purchases fell 11% last week (compared to the prior week) and were r20% lower than the same week one year ago.  Applications for refinance loans actually increased 2% on a week-on-week basis (+3% from one year earlier).  This averaged out to a total mortgage application volume decrease of 7.2% week-on-week.  This came as the national average 30-year-fixed rate on a conforming loan remained at 6.78% and closing points rose to 0.65 (up from 0.63 the prior week).  The average loan size also rose to $444,100 which was the largest since May 2022.

With that background, it looks like we are in for a rocky start to the day with the big dogs of tech gapping down the QQQ to start the premarket and then putting in a volatile black-bodied candle since that start. QQQ also gave up its T-line (8ema) in the process. SPY followed QQQ lower, just with much less energy and remains above its T-line. Meanwhile, DIA is diverging and made a modest gap higher to start the early session and has put in a very small-body, indecisive candle since that start. So, the Bulls were disappointed by the GOOGL and AMD beats or guidance last night. In terms of extension, none of the three are too far stretched from the 8ema. T2122 has also fallen to just outside the overbought range. This means the market has room to run in either direction, if the Bulls or Bear can gain enough momentum to do it. Once again, even though 99% of the market knows exactly what to expect from the Fed, with the Fed announcement this afternoon, don’t be surprised if today is a “wait and see” day until 2 p.m. and then volatile the last couple of hours. Also, continue to keep an eye on those Tech Big Dogs. If they lead in one direction, it is basically impossible for the rest of the market to do anything but follow given their trading volumes.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Fed Watch Starts After More Strong Earnings

Markets opened just a touch higher on Monday.  SPY opened 0.04%, DIA opened dead flat, and QQQ opened 0.09% higher.  From that point, all three major index ETFs wandered sideways for 90 minutes.  Then the QQQ and SPY began a modest but steady rally at 11 a.m.  DIA followed starting at 1 p.m.  Then at 3 p.m., the Bulls kicked it into gear so that even after a modest 20-minute pullback all three major index ETFs went out very near their highs of the day.  This action gave us large, white-bodied candles in all three with SPY and QQQ being at least “Trader’s Best Friend” patterns (Doji followed by a large white candle) and QQQ even being a Morning Star signal if you are lenient on the first candle.  All three remain above their T-line (8ema).

On the day, eight of the 10 sectors were in the green as Technology (+1.36%) led the way higher.  At the same time, Communications Services (-0.07%) and Energy (-0.05%) were the only down sectors (barely).  Meanwhile, the SPY gained 0.79%, DIA gained 0.58%, and QQQ gained 1.02%.  (All three closing at new all-time high closes.)  Meanwhile, VXX gained 0.41% to close at 14.59 and T2122 jumped up to the top end of its overbought territory at 94.08.  10-year bond yields dropped to 4.076% and Oil (WTI) fell 1.32% to close at $76.98 per barrel.  So, markets opened just on the bullish side of flat, bided their time for 90 minutes, and then rallied the rest of the day.  The last hour was the strongest move of the day.  This all happened on a well-less-than-average volume in all three major index ETFs.

There was no major economic news released on Monday.

After the close, ARE, CLS, CR, FFIV, GGG, HP, NUE, SANM, SMCI, WHR, and WWD all reported beats on both the revenue and earnings lines.  Meanwhile, CLF missed on revenue while beating on earnings.  It is worth noting that CLS, SANM, SMCI, and WWD all raised forward guidance.  However, WHR lowered guidance.

So far this morning, AOS, DHR, GM, JBLU, MDC, MPC, MPLX, MSCI, and PNR all reported beats on both the revenue and earnings lines.  Meanwhile, JCI, OSK, PFE, PHM, and UPS all missed on revenue while beating on earnings.  On the other side, PII beat on revenue while missing on earnings.  It is worth noting that GM also raised its forward guidance.

Click for video

In stock news, Reuters reported Monday that STLA has begun volume-level production of large and mid-sized hydrogen fuel cell vans.  At the same time, AMZN withdrew from its $1.4 billion acquisition of IRBT.  (This move was in response to opposition from EU antitrust regulators.  The deal was originally valued at $1.7 billion but investigations led to delay and drove the price down.)  At the time this withdrawal was announced, IRBT also announced it would lay off about 31% (350) of its employees.  (IRBT plunged as much as 19% on the day, but closed down just 8.77%.)  Later, the Wall Street Journal reported that GM dealers were pressuring GM corporate to launch and offer more hybrid vehicles to match demand.  Elsewhere, HCMLY announced Monday that it will spin off its North American operations.  (No announcement was made on a potential IPO, with NASDAQ and NYSE both courting the Swiss giant.)  At the same time, WMT announced it will offer annual stock grants to its store managers in an effort to attract and retain talent.  (The awards mean that the most successful store managers could earn more than $400k per year.)  After the close, ALB laid off 300 employees (4% of its global workforce).  This was part of a previously announced cost reduction plan.  (The company expects the move to save it $50 million in 2024.)  Also after the close, Reuters reported that TER (semiconductor testing equipment maker) had pulled more than $1 billion of manufacturing out of China in 2023 in order to ensure compliance with sanctions.

In stock legal, governmental, and regulatory news, the Republican Chairmen of two US House committees sent a letter to President Biden asking that the administration launch investigations into four Chinese companies involved in the F battery plant that is planned for construction in MI. Later, AAL was sued (in a potential class-action suit) for having stripped 1.1 million frequent flier miles from two customers after they doubled up using credit card mileage bonuses.  The pair allege AAL wrongly accused them of fraud.  Elsewhere, TM urged the owners of 50,000 2003-2005 vehicles to stop driving their cars immediately until after recall repairs on airbag inflators can be done.  After the close, PHG (maker of recalled and deadly CPAP machines and masks) reached a settlement with the FDA and Dept. of Justice.  Under the agreement, the company will stop selling sleep apnea machines in the US (until it meets FDA corrective actions and gets approval), which could cost the company $400 million per year.  Also after the close, X agreed to a $42 million settlement of a lawsuit, including $37 million in facility improvements related to a 2018 fire.  (After the fire, X operated its plant without the required desulfurizing equipment for three months, emitting huge clouds of sulfurous gas.). The settlement was with environmental groups and the Allegheny County Health Department.

Overnight, Asian markets were mostly in the red as the region reacted to Monday’s court-ordered liquidation of China Evergrande.  Shenzhen (-2.40%), Hong Kong (-2.32%), and Shanghai (-1.83%) led the region lower.  Meanwhile, in Europe, we see a mostly green picture at midday.  The CAC (+0.47%, DAX (+0.19%), and FTSE (+0.51%) lead the region higher (with only four of the 15 exchanges in red numbers) in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing to an open just on the red side of flat.  The DIA implies a -0.16% open, the SPY is implying a -0.12% open, and the QQQ implies a -0.04% open at this hour.  At the same time, 10-year bond yields are down slightly to 4.064% and Oil (WTI) is flat at $76.78 per barrel in early trading.

The major economic news scheduled for Tuesday includes Jan. Conf. Board Consumer Confidence and Dec. JOLTs Job Openings (both at 10 a.m.), and API Weekly Crude Oil Stocks report (4:30 p.m.).  The major earnings reports scheduled for before the open include AOS, GLW, DHR, GM, HCA, HUBB, JBLU, JCI, MDC, MAN, MPC, MPLX, MSCI, OSK, PNR, PFE, PII, PHM, SYY, and UPS.   Then, after the close, AMD, GOOGL, ASH, BXP, CP, CB, EA, ENVA, EQR, FBIN, GOOG, HA, JNPR, LFUS, MTCH, MSFT, MOD, MDLZ, RNR, RHI, SWKS, SBUX, SYK, TER, and UNM report.

In economic news later this week, on Wednesday, Jan. ADP Nonfarm Employment Change, Q4 Employment Cost Index, Jan Chicago PMI, EIA Weekly Crude Oil Inventories, FOMC Rate Decision, FOMC Statement, and FOMC Press Conference are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Q4 Nonfarm Productivity, Q4 Labor Costs Index, S&P Global Mfg. PMI, Dec. Construction Spending, Jan. ISM Mfg. Employment, Jan. ISM Mfg. PMI, Jan. ISM Mfg. Price Index, and Fed Balance Sheet.  Finally, on Friday, Jan Avg. Hourly Earnings, Jan. Nonfarm Payrolls, Jan. Private Nonfarm Payrolls, Jan. Participation Rate, Jan. Unemployment Rate, Dec. Factory Orders, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, and Michigan 5-year Inflation Expectations are reported.

In terms of earnings reports later this week, on Wednesday, APTV, ADP, AVY, AVY, BA, BSX, EAT, COR, GIB, EVR, FTV, GPI, HES, LII, MHO, MA, NDAQ, NYCB, NVO, ODFL, OTIS, PSX, ROK, ROP, SLGN, TEVA, TMO, UMC, AFL, ALGN, AVB, AXS, BHE, BOOT, BV, CHRW, CCS, CMPR, CTVA, CACC, FLEX, THG, LSTR, MTH, MEOH, MET, NXT, PTC, QRVO, QCOM, SEIC, SIGI, TTEK, UGI, and VSTO report.  On Thursday, we hear from FLWS, ATI, MO, ATKR, BALL, BDX, BR, BIP, BC, CAH, CMS, DLX, DOV, ETN, EPD, RACE, HON, HII, ITW, IP, JHG, KEX, LANC, LAZ, MKL, MRK, PH, PTON, PBI, DGX, RVTY, RCI, RCL, SBH, SNY, SNDR, SIRI, SR, SWK, TSCO, TT, WNC, WEC, WRK, AMZN, AAPL, TEAM, CLX, COLM, DECK, DXC, EMN, GEN, HIG, HOLX, HLI, HUBG, KMPR, LPLA, META, MCHP, MTX, NOV, OTEX, POST, RGA, SKX, SKYW, and X.  Finally, on Friday, ABBV, AON, BSAC, BMY, BBU, BEPC, BEP, CBOE, CHTR, CVX, CHD, CI, XOM, IMO, LYB, REGN, SAIA, and GWW report.

In miscellaneous news, ICE reported Monday that global futures (including derivatives) have hit a record level of open interest.  They reported that 87.2 million stock futures contracts traded on January 25, leaving an open interest of 61.5 million contracts.  At the same time, 33 million energy futures contracts traded leaving an open interest of 56 million contracts.  Elsewhere, JPM reported Monday evening that the 11 new “spot price of Bitcoin” ETFs are seeing large drops in money inflows. 

In government news, after the close, a bipartisan group of Congressional negotiators reached agreement on spending levels for each of the 12 funding bills needed to keep the government open.  These total to the amount previously agreed by House Speaker Johnson and Senate Majority Leader Schumer ($1.59 trillion) but below the amount originally agreed before the GOP reneged on the June 2023 deal. While Johnson could use Democratic votes to get the bills passed in the House, it is unknown whether any of the MAGA extremists would call for his ouster if he did that. (Of course, theoretically, Democrats could also override that tiny minority holding everything hostage by voting for Johnson during a “vote to vacate the chair,” but it is uncertain whether the Democrats would do that.  So, we have a step toward keeping the government open.  However, plenty of uncertainty remains on both sides of the aisle as to whether this step really has any meaning.  Elsewhere, the Treasury Department said on Monday that it expects to borrow $760 billion in Q1, which is $55 billion below the estimate released in October.  The primary reason we do not need to borrow as much is that the economy has been stronger than expected, resulting in higher tax inflows and a higher cash balance than previously forecasted.

With that background, it appears that all three major index ETFs are undecided early. All opened the premarket near their Monday close level and have put in small, black-bodied, and indecisive candles so far in the early session. All three remain above their T-line (8ema) and very, very near their all-time highs. So, the Bulls are still in control of the trend in both the short term and the longer term. In terms of extension, none of the three are too far stretched from the 8ema. However, the T2122 indicator is well into its overbought range. So, the market will again need a pause or pullback soon. Still, both sides have some slack to work with if they can gain enough momentum to do it. Even though 99% of the market knows exactly what to expect from the Fed, with the Fed announcement being tomorrow afternoon, don’t be surprised if today is a “wait and see” day. Continue to keep watching those Tech Big Dogs. (I follow 10, but somebody has coined the term “Magnificant 7” and five of those seven report this week. If those big dogs move as a group, it is basically impossible for the rest of the market to do anything but follow given their trading volumes.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Good Data Thursday with PCE Ahead

The market started out quite bullish again on Thursday.  SPY gapped up 0.45%, DIA opened 0.23% higher, and QQQ gapped up 0.60%.  All three major index ETFs then ground sideways for a while.  DIA was the first to break lower, selling off from 10:30 a.m. until noon.  SPY and QQQ followed at noon with SPY reaching its lows (not quite recrossing the morning gap) by 2:10 p.m.  QQQ sold off most sharply, recrossing its gap by 1:20 p.m. and reaching the low of the day at 2:10 p.m.  From that point, all three put in a modest rally that lasted the rest of the day.  DIA went out on the highs, putting in a white-bodied candle that bounced up off its T-line (8ema) and putting it back at the top of its four-day consolidation.  SPY printed a small, indecisive, white-bodied Hanging Man-type candle (which could also be seen as a Dragonfly Doji type).  QQQ was the laggard, giving us a gap-up, black-bodied, Spinning Top that closed at yet another all-time high close.

On the day, all 10 sectors were in the green as Utilities (+1.80%) and Energy (+1.78%) were way out in front leading the gainers.  At the same time, Consumer Cyclicals (+0.21%) was by far the worst-performing sector.  Meanwhile, the SPY gained 0.54%, DIA gained 0.64%, and QQQ gained 0.12%.  Meanwhile, VXX gained 1.31% to close at 14.64 and T2122 climbed to the top of the mid-range but remains just outside of its overbought territory at 78.52.  10-year bond yields dropped to 4.124% and Oil (WTI) spiked another 2.81% to close at $77.20 per barrel.  So, markets gapped higher on strong economic data and earnings reports (with the exception of TSLA which got hit hard on its miss and lower guidance).  However, at that point, traders were uncertain, took some profits and then finally started to modestly but again in the afternoon.  This all happened on less-than-average volume in all three major index ETFs.

The major economic news on Thursday included Building Permits, which came in just below expectations at 1.493 million (versus a forecast of 1.495 million and well above the prior reading of 1.467 million).  At the same time, Weekly Initial Jobless Claims were higher than projected at 214k (compared to a forecast of 200k and well above the prior week’s 189k).  Weekly Continuing Jobless Claims also came in hot at 1,833k (versus a forecast of 1,828k and the prior week’s 1,806k).  At the same time, Dec. Durable Goods Orders were flat month-on-month at 0.0% (versus a forecast of +1.1% and sharply lower than November’s +5.5%).  However, when looking at only the Core Durable Goods Orders for December, the number was hitter than expected at +0.6% (compared to a forecasted +0.2% and the November +0.5% reading).  In terms of Q4 GDP, it was very strong data coming in at +3.3% (versus the +2.0% forecast and still less than the Q3 +4.9%).  This was mostly real growth since the Q4 GDP Price Index was up just 1.5% (compared to a +2.3% forecast and the +3.3% Q3 value).  So, that data is telling us inflation is coming down sharply but GDP is still climbing briskly.  The December Goods Trade Balance was just slightly better than anticipated at -$88.46 billion (versus a forecast of -$88.70 billion and trending correctly compared to the Nov. -$90.27 billion).  December Retail Inventories were up a bit at +0.6% compared to the November -0.6% reading.  Later, Dec. New Home Sales were better than predicted at 664k (compared to a 645k forecast and much better than November’s 615k).  Finally, after the close, the Fed Balance Sheet was reported to have actually grown (for the first time in a long time) by just a touch from $7.674 trillion to $7.677 trillion (a $3 billion increase in the last week but still down $10 billion from the week before that).

Click for video

In stock news, in the wake of its acquisition of ATVI, MSFT announced the layoff of 1,900 from the Activision and Xbox gaming units (their need was eliminated by the merger).  The cuts represent 8% of the total employees of the post-merger gaming division.  At the same time, TSLA CEO Musk said that Chinese EV-makers will “demolish global rivals” without trade barriers.  This comes after BRKB’s Warren Buffett backed Chinese BYD with its substantially cheaper models compared to TSLA.  Later, PYPL announced new updates to its products on Thursday.  The news was not well received as the stock fell as much as 6.5% on the day before closing down 3.65%.  Elsewhere, GM and HMC said they have begun delivering fuel cell systems to customers from their joint venture.  The JV factory will produce 2,200 fuel cell systems per year by mid-decade.  At the same time, Reuters reported that BAC will give stock awards to 97% of its workforce (employees earning $500k or less).  Later, the CEO of PARA announced an unspecified number of layoffs, telling CNBC the company needs to “run leaner and spend less.”  After the close, LOW said it would be cutting a “limited number” of non-customer-facing corporate positions.  Also after the close, JPM shuffled several top executives as the company prepares for succession after Jamie Dimon leaves.  In addition, LEVI said it would cut between 10% and 15% of its global corporate jobs.  (LEVI has about 5,000 global corporate employees, which would make the cuts between 500 and 750 jobs.)

In stock legal, governmental, and regulatory news, bowing to obvious market opinion, BA CEO Calhoun said he agreed with the FAA ban on the expansion of 737 MAX 9 production following all the quality control issues identified in the wake of a fuselage panel blowing off a jet in mid-flight.  (This came in a brief interview following a meeting on Capitol Hill where Calhoun was explaining to lawmakers that BA would turn things around.)  At the same time, the EU’s top court ruled in favor of VLKAF in a dispute over spare parts manufacturers using similar markings to the original parts Audi logo.  Later, the NRLB accused WMT of union-busting in CA, alleging the company interrogated its employees, removed pro-union flyers from break rooms, and threatened employees who distributed union literature (all being violations of US labor law).   At the same time, the SEC delayed making an approval decision on BLK’s application to launch two Etherium-based spot-price ETFs (similar to the 11 Bitcoin ETFs recently approved).  AAPL announced Thursday that it will begin allowing app downloads from sources outside of its own store…but only in Europe and only in reaction to the new EU law (DMA) that requires this move to avoid massive penalties.  In reaction to the recent accounting investigation, shareholders filed suit against ADM and its executives.  Later, GM revealed it is being probed by both the US Dept. of Justice and the SEC related to the October incident where one of GM’s Cruise self-driving cars ran over and dragged a pedestrian.  GM said these investigations stemmed from a “failure of leadership” (which had tried to hide the incident initially) and vowed to “reform its culture.”  After the close, the CA Public Utilities Commission approved a $45 million penalty against PCG for its part in causing the 2021 “Dixie” fire.  Also after the close, the FTC announced it had ordered MSFT, GOOGL, and AMZN to provide information on their recent investments in AI companies OpenAI and Anthropic.  (The companies have 45 days to provide that information.)

After the close, AJG, ASB, TBBK, INTC, KLAC, LHX, OLN, SSB, V, and WDC all reported beats on both the revenue and earnings lines.  At the same time, COF, TMUS, and WAL beat on the revenue line while missing on earnings.  On the other side, LEVI AND WY missed on revenue while beating on earnings.  It is worth noting that INTC, LHX, and LEVI lowered guidance while WDC raised its forward guidance.

Overnight, Asian markets were mixed and leaned toward the red side.  Hong Kong (-1.60%), Japan (-1.34%), and Shenzhen (-1.06%) were by far the biggest losers while Australia (+0.48%), Singapore (+0.38%), and South Korea (+0.33%) led the gainers.  However, in Europe, we see strong green numbers across the board at midday.  The CAC (+2.17%), DAX (+0.21%), and FTSE (+1.21%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start on the red side of flat.  The DIA implies a -0.05% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.35% open at this hour.  At the same time, 10-year bond yields are down slightly to 4.12% and Oil (WTI) is down 1% to $76.62 per barrel in early trading.

The major economic news scheduled for Friday includes Dec. Core PCE Price Index, Dec. PCE Price Index, and Dec. Personal Spending (all at 8:30 a.m.), and Dec. Pending Home Sales (10 a.m.).  The major earnings reports scheduled for before the open include AXP, ALV, BAH, CL, FCNCA, GNTX, and NSC.  There are no reports scheduled for after the close. 

So far this morning, ALV, BKU, BAH, and CL have reported beats on both the revenue and earnings lines.  Meanwhile, VLVLY missed on revenue while beating on earnings.  On the other side, FCNCA beat on revenue while missing on earnings.  Unfortunately. AXP missed on both the top and bottom lines.  However, AXP and BAH both raised forward guidance.

In miscellaneous news, major private Fintech firm EquiLend reported an outage of its service on Thursday.  The service, which automates the lending of shares between broker-dealers said Wednesday it had identified unauthorized access to its systems.  The system manages $2.4 trillion in stock transactions each month and this outage may have temporarily impacted the ability to short some stocks. (EquiLend is partly owned by GS, JPM, BAC, and BLK among other big Wall Street names.)  Elsewhere, Reuters reported that (in a sign of changed warfare) an explosive drone had a nat. gas field in Northern Iraq, doing limited damage.  Earlier in the day, another drone had targeted US forces near Erbil Iraq.  However, that drone was shot down by US air defenses and did no damage.

In overseas inflation news, the ECB policymakers said Thursday that they were “open to” a policy change in March (i.e. a rate cut).  This was a change in rhetoric for the European Central Bank.  Still, it maintained rates at its historically-high 4% rate.  Later, Japan reported that its Core Consumer Price Index (for Tokyo, which is a leading indicator for the rest of the country) has fallen below the Bank of Japan’s 2% inflation target.  Tokyo’s core CPI in January is just 1.6% above a year earlier, much lower than the 1.9% that was forecasted and down sharply from 2.1% in the December report.

With that background, it appears (take this with a grain of salt because TC2000 is acting up this morning) that all three major index ETFs gapped lower to start the premarket. However, all three have put in strong while candles in the early session. As a result, SPY and DIA look dead flat while QQQ is down just less than a quarter of a percent. All three remain above their T-line (8ema) and very near all-time highs. So, the Bulls are still in control of the trend in the short term and the longer term. In terms of extension, This morning’s premarket action seems to have eliminated its over-stretch from the 8ema while the SPY and DIA are within normal distance from the T-line. The T2122 indicator is near its overbought range, but remains just inside its midrange. So, once again, both sides have slack to work with if they can gain enough momentum to do it. With that said, given Thursday’s very good economic data (growth with falling inflation) the risk remains on the side of a move lower (if PCE data disappoints by coming in hot). Continue to keep watching those Tech Big Dogs. If they make a move as a group, it is almost impossible for the rest of the market to do anything but follow given their trading volumes. Finally, remember it’s Friday. Pay yourself and prepare your account for the weekend.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

TSLA Warning and Big Data Release Ahead

Wednesday gave us a gap higher and then a fade.  SPY opened 0.60% higher, DIA gapped up 0.31%, and QQQ gapped up 0.96%.  After that open, all three major index ETFs meandered back and forth around that open level until 1 p.m.  At that point, we saw profit taking sell off the market the rest of the day.  This action gave us gap-up, black-bodied candles in all three.  All three had higher upper wicks than lower (DIA’s version was mostly body).  While all three also remain above their T-line, DIA is not far above even as QQQ is even more stretched after that morning gap.  This all happened on average volume.

On the day, seven of the 10 sectors were in the red with Energy (+1.04%) way out in front leading the gainers.  At the same time, Utilities (-1.35%) and Communications Services (-1.35%) were by far the worst-performing sectors.  Meanwhile, the SPY gained 0.11%, DIA lost 0.25%, and QQQ gained 0.55%.  Meanwhile, VXX gained 2.63% to close at 14.45 and T2122 dropped but remained in its midrange at 35.98.  10-year bond yields spiked up to 4.18% and Oil (WTI) gained 1.36% to close at $75.38 per barrel.  So, markets gapped higher on Chinese stimulus and a great earnings report (which included their report that orders have TRIPLED in the last quarter by ASML). However, at that point, traders started having second thoughts based on being extended and also on the breadth of the rally (being mostly led by the 10 big dog tech stocks).

The major economic news on Wednesday was limited to S&P Global Manufacturing PMI, which came in well above expectations at 50.3 (compared to a forecast and Dec. value of 47.9).  At the same time, the S&P Global Services PMI also came in higher than was predicted at 52.9 (versus a forecast of 51.0 and the December reading of 51.4).  This gave us an S&P Global Composite PMI of 52.3 (compared to the Dec. reading of 51.4).  Later the EIA Crude Oil Inventories showed a much bigger drawdown than anticipated at -9.233 million barrels (compared to a forecast of -2.150 million barrels and the prior week’s -2.492 million barrels).

After the close, AMP, CNXC, CCI, CSX, IBM, LRCX, PKG, RJF, RMD, STX, NOW, URI, and WRB all reported beats on both the revenue and earnings lines.  At the same time, COLB, LVS, SLM, and TSLA all beat on revenue while missing on earnings.  On the other side, PLXS beat on revenue while missing on earnings.  Unfortunately, CACI, HXL, KNX, LVRO, and LBRT missed on both the top and bottom line.  It is worth noting that CNCX, HXL, KNX, PLXS, and SLM all lowered their forward guidance.  It is also worth noting that TSLA (one of the biggest dogs in terms of dollar value of stock traded) warned of a slowdown in the year ahead.

Click for video

In stock news, the Seattle Times reported Wednesday that BA (not SPR) was the one that reinstalled the panel the explosively left the ALK 737 MAX 9 jet during flight.  The paper said the claims were confirmed by an anonymous whistleblower.  Later, C said that the 5,000 employees it has laid off since the start of the year will be paid through April.  At the same time, STLA announced it had acquired British AI technology firm CloudMade for an undisclosed amount.  Later, a DAL flight using a BA 757 jet lost its nose wheel as the plane was lining up to take off in Atlanta Monday, but the FAA notice on the event was not posted until Wednesday. At the same time, CG announced it is buying a $415 million student loan portfolio from TFC.  Later, Reuters reported that GM will invest $1.4 billion in Brazil over the next four years.  At the same time, Reuters reported the TSN has dropped CVS as its pharmacy benefits manager in favor of a startup.  (CVS, CI, and UNH currently control 80% of that pharmacy benefits market.)  Elsewhere, NVDA (chipmaker) and EQIX (data center provider) announced they are partnering to offer supercomputing systems to the corporate world.  (This service is meant to compete with AMZN and MSFT cloud computing offerings.)  At the same time, SPOT announced they will launch in-app purchases on iPhones as soon as EU laws take effect forcing AAPL to allow this on March 7.  Later, BA announced they had delivered the first 737 MAX 8 jet to China since the early 2019 grounding of those planes.  After the close, F said it expects to see a $1.7 billion pre-tax loss related to employee pension and other post-retirement benefits restatements.  Also after the close, TSLA said it will start making a new model of EV in the second half of 2025.  The new car will be a smaller crossover aimed at the mass market.  (TSLA is notorious for missing its production date promises by years.)

In stock legal, governmental, and regulatory news, LEVI filed suit against Italian luxury brand Brunello Cucinelli claiming trademark infringement.  At the same time, India company Zee Entertainment urged SONY to honor their $10 billion merger agreement after SONY had announced the termination.  Zee also filed suit in India, asking the court to force SONY to honor the deal and saying negotiations had taken two years.  Later, the NHTSA announced that F has agreed to recall 2.24 million older Explorer SUVs (2011 – 1019 models) related to panel trim clips that were not installed properly.  At the same time, court filings show that GOOGL reached a $1.67 billion AI chip patent infringement settlement with Singular Computing, just as the trial’s closing arguments were scheduled to begin.  Elsewhere, EU governments and lawmakers have agreed in principle to terms that would allow them to force European companies to prioritize the production of certain key products to prevent a supply chain crisis. The laws are meant to reduce the impacts of events like the COVID pandemic or the Russian invasion of Ukraine.  The European Commission would be the group vested with the power to make such decrees.  Later, in details of the ADM accounting investigation, it was reported that ADM senior executives’ bonuses were tied to the performance of that company’s minor nutrition unit.  (The nutrition unit contributed less than 10% of the company’s revenue.)  Meanwhile, the Biden Administration urged Congress to approve the sale of LMT F-16 fighter jets to Turkey following a 20-month delay after that country’s parliament approved the entry of Sweden into NATO.  At the same time, President Biden vetoed legislation that would have blocked a waiver granted for government-funded EV charging stations.  (The waiver allows the stations to not be “entirely” manufactured in the US.  It approves stations with more than 55% US materials and manufactured products.)  After the close, the FAA lifted its restrictions on BA 737 MAX 98 planes flying, if the plane has passed inspection.  This will be the first flight of the plane since the January 6 suspension.  However, at the same time, the FAA halted BA production expansion for 737 MAX planes of all types until compliance and quality control procedures are resolved.

Overnight, Asian markets were mixed but leaned toward the green side led by a strong move in China.  Shanghai (+3.03%), Shenzhen (+2.01%), and Hong Kong (+1.96%) led the region higher.  In Europe, we see the opposite picture taking shape as all but 3 of the exchanges are in the red at midday.  The CAC (-0.50%), DAX (-0.44%), and FTSE (-0.17%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a flat start to the day (ahead of data).  The DIA implies a +0.02% open, the SPY is implying a +0.06% open, and the QQQ implies a +0.13% open at this hour.  At the same time, 10-year bond yields are down slightly to 4.17% and Oil (WTI) has popped up 1.13% to $75.95 per barrel in early trading.

The major economic news scheduled for Thursday includes Building Permits, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Dec. Durable Goods Orders, Q4 GDP, Q4 GDP Price Index, Dec. Goods Trade Balance, and Dec. Retail Inventories (all at 8:30 a.m.), Dec. New Home Sales (10 a.m.), and Fed Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open include ALK, AAL, AIT, BX, BFH, CRS, CMCSA, CFR, DOW, EXP, HUM, HZO, MMC, MKC, MBLY, MUR, NEE, NOK, NOC, ORI, BPOP, SDVKY, SHW, LUV, STM, UNP, VLO, VLY, XEL, and XRX.  Then, after the close AJG, COF, INTC, KLAC, LHX, LEVI, OLN, TMUS, V, WAL, WDC, AND WY report. 

In economic news later this week, on Friday, we get the Dec. Core PCE Price Index, Dec. PCE Price Index, Dec. Personal Spending, and Dec. Pending Home Sales.

In terms of earnings reports later this week, on Friday, AXP, ALV, BAH, CL, FCNCA, GNTX, and NSC report.

In miscellaneous news, the US Navy intercepted multiple missiles fired by Yemeni Houthi rebels on Wednesday as they escorted AMKAF (Maersk) ships in the Red Sea. (The ships were carrying US military supplies according to Maersk.)   Elsewhere, CSX reported a 13% drop in Q4 profits, which the company blamed on the loss of margin from its fuel surcharges (which the railroad can no longer charge now that fuel costs have fallen).  Meanwhile, former St. Louis Fed President Bullard (a mega hawk) hinted in an interview Wednesday that the FOMC may cut rates in March, even if inflation has not yet hit the 2% target.  (While no longer a Fed member, Bullard is widely seen as in the know and has always been hawkish.  If he hints at a March cut, that may mean the Doves are being more forceful in behind-the-scenes talks.)

In Fedwatch news, Fed Funds Futures (of the probability of a first rate cut) show only a 1.6% probability of a cut next week.  That probability rises to 41.9% in March, 100% by May, (oddly) back to 98.8% by June, and 99.9% by July.  The other three meetings in 2024 all show a 100% probability of Fed having made its first rate cut.  Of course, these are trader bets and do not necessarily match what the Fed will do. 

So far this morning, ALK, AAL, AIT, BFH, CNX, DOW, EXP, MMC, NOC, BPOP, SHW, and LUV all reported beats on both the revenue and earnings lines. Meanwhile, BANC, HUM, HZO, ORI, VLY, and VIRT all beat on revenue while missing on earnings.  On the other side, BX, MKC, MBLY, STM, and VLO all missed on revenue while beating on earnings.  Unfortunately, MUR, NOK, SDVKY, XEL, and XRX missed on both the top and bottom lines.  It is worth noting that, XRX, MBLY, HZO, and HUM lowered their forward guidance while AAL raised its guidance.

With that background, all three major index ETFs seem to be waiting on the data dump at 8:30 a.m. The SPY is giving us an “inside candle” Doji so far in the premarket while QQQ is giving us a Bullish Harami Spinning Top. DIA is the lone black body candle in the early session, but even so, it is an inside candle. All three remain above their T-line (8ema) and very near all-time highs. So, obviously, the Bulls are still in control of the trend in the short term and the longer term. In terms of extension, the QQQ is still stretched above its T-line withe the SPY getting a bit stretched and DIA just above its own 8ema. The T2122 indicator is also still in its midrange. So, both sides have room to run if they can gather the momentum to do it. With that said, the risk is of a move lower on data the disappoints. As I’ve been saying for some time, keep watching those Big Dogs. If they make a move as a group, it is almost impossible for the rest of the market to do anything but follow given their trading volumes. As of 7:45 a.m., TSLA is getting hammered after yesterday’s earnings miss. However, the rest of the Big Dogs are mixed and lean toward the green side.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

China Cuts Bank Reserve Rules

Markets were undecided on Tuesday with SPY opening 0.12% higher, DIA opening 0.17% lower, and QQQ opening 0.17% higher.  From that point, SPY and QQQ traded sideways, wandering back and forth across the open gap until noon.  DIA also traded sideways in a very tight range along the open for 60 minutes.  Then DIA sold off for 90 minutes before resuming its sideways trading.  Then, at noon, all three major index ETFs made a modest (20-degree) rally the rest of the day.  This left all three as indecisive candles.  SPY and QQQ both printed white-bodied Inside Day Hammer candles.  At the same time, DIA printed a gap-down, black-bodied Doji-type candle.  All three remain above their T-line (8ema).  This all happened on slightly above-average volume in DIA and QQQ and slightly below-average volume in the SPY.

On the day, seven of the 10 sectors were in the green with Communication Services (+1.30%) way out in front leading the way higher.  At the same time, Financial Services (-0.14%) and Industrials (-0.10%) were the worst-performing sectors.  Meanwhile, the SPY gained 0.29%, DIA lost 0.27%, and QQQ gained 0.41%.  Meanwhile, VXX was off by 2.90% to close at 14.08 and T2122 climbed a bit but remained in the upper side of its midrange at 73.33.  10-year bond yields climbed back to 4.136% and Oil (WTI) fell just a bit to close at $74.50 per barrel.  So, after a mixed, flat open the market was pretty much undecided and lethargic on the day.  The Bulls had a slight advantage for the afternoon.  (It is worth noting that the big Tech names were all green but only ranged from INTC (+1.39%) to AMD (+0.14%).

The major economic news on Tuesday was limited to the API Weekly Crude Oil Stocks report, which showed a significantly larger drawdown than expected at -6.674 million barrels (compared to a forecasted 3.000-million-barrel drawdown and the prior week’s 0.483-million-barrel increase). 

In Fed news, on Tuesday, Reuters provided a summary of the FOMC voters’ most recent statements.  However, note that some of these quotes are older than others.  Atlanta Fed President Bostic (dove) said, “If we continue to see a further accumulation of downside surprises in the data it’s possible for me to get comfortable to advocate normalization sooner than the third quarter. But the evidence would need to be convincing.”  NY Fed President Williams (centrist) said, “It will only be appropriate to dial back the degree of policy restraint when we are confident that inflation is moving toward 2% on a sustained basis.”  Fed Governor Waller (centrist) has said, “The key thing is the economy is doing well. It is giving us the flexibility to move carefully and methodically.”  Fed Vice-Chair Barr (centrist) has said, “The Fed is at or near the peak of interest rates.”  Fed Vice-Chair Jefferson said, “We are in a sensitive period of risk management, where we have to balance the risk of not having tightened enough, against the risk of policy being too restrictive.” Fed Governor Cook (centrist) has said, “I see risks as two-sided, requiring us to balance the risk of not tightening enough against the risk of tightening too much.”  San Francisco Fed President Daly recently said, “It takes patience. It takes gradualism.”  Cleveland Fed President Mester (hawk) said, “March is probably too early in my estimation for a rate decline.”  Richmond Fed President Barkin (hawk) said, “Getting inflation under control is critically important.”  Fed Governor Bowman (hawk) said, “While the current stance of monetary policy appears to be sufficiently restrictive … I remain willing to raise the federal funds rate further at a future meeting.”  Finally, Fed Chair Powell (centrist) said, “Declaring victory would be premature … But of course the question is when will it become appropriate to begin dialing back?”

After the close, CNI, EWBC, ISRG, LRN, and TXN all reported beats on both the revenue and earnings lines.  At the same time, BKR missed on revenue while beating on earnings.  On the other side, NFLX and STLD both beat on revenue while missing on earnings.  It is worth noting that NFLX raised forward guidance while TXN lowered its guidance.

Click for video

In stock news, FSR said Tuesday that it expects to deliver the remaining 5,000 vehicles produced in 2023 by the end of Q1, through its new network of 100 dealers in the US, Canada, and Europe.  At the same time, in addition to its earnings, NFLX announced a $5 billion, 10-year deal to broadcast WWE’s weekly program.  Later, SNY agreed to buy INBX in a stock and cash deal worth $2.2 billion.  Elsewhere, GOLD announced that it is accelerating the expansion of its copper mine in Zambia.  This will make that mine one of the largest copper mines in the world.  At the same time, PLUG announced its Georgia “green hydrogen” (liquid hydrogen) plant is now operational.  Later, LUV flight attendants voted to authorize a strike by at 98% margin.  Meanwhile, UAL said it is no longer counting on BA’s 737 MAX 10 jets.  This announcement comes after more BA delays and plane groundings have pushed back delivery schedules that were already years behind schedule.  While UAL did not cancel its orders (at least yet), the airline has removed those planes from its internal plans, saying it believes recent production quality issues will delay certification yet another year.  At the same time, Bloomberg reported that AAPL has reduced the number of features and delayed the release of its “Apple Car” until at least 2028.  (AAPL had previously announced it would develop an autonomous self-driving car by 2026.  The original plan was for a level 4-5 self-driving capability.  The new plan is for level 2+.)  After the close, SAP announced a restructuring that will “impact” 8,000 employees worldwide.  Some of the job cuts will be implemented through voluntary leave programs while many other employees will be “reskilled and transferred” within the company.  Also after the close, Bloomberg reported that WBA is exploring the sale of its “Shields Health Solutions” unit for roughly $4 billion.  Finally, EBAY announced Tuesday evening that it will lay off 9% of its workforce or about 1,000 employees.

In stock government, legal, and regulatory news, the Dept. of Justice requested data from SIX and FUN related to their merger (announced in November).  Later, the FDA asked drugmakers GILD, JNJ, BMY, LEGN, and NVS to add a serious warning label to their cancer therapies that use “CAR-T” technology.  (This comes after recent reports of patients treated with genetically engineered CAR-T technologies developing different cancers than the one the drug was treating.)  Later, AAPL asked a British Competition Tribunal to throw out a $1 billion class-action type lawsuit brought by more than 1,500 app developers alleging AAPL’s 30% fee and monopoly on iPhone app stores are anti-competitive. At the same time, JNJ announced it has reached a tentative settlement to resolve investigations by 42 states and the District of Columbia into whether the company misled consumers about the safety of its talc products. Later, the Wall Street Journal reported that the settlement included a $700 million payment.  The CEO of ALK told NBC news that the company had reported finding many BA 737 MAX 9 planes with loose bolts to the FAA and Dept. of Transportation.  At the same time, ADM was hit with an accounting probe.  This caused ADM shares to plummet 24% on Monday, rebounding slightly (+1.20%) on Tuesday.  Later, NMR was sued by a former employee, claiming she was paid less relative to men, and was fired for insisting that the company stop discriminating against women.  After the close, CACI was awarded a US Army contract for $900 million.  Also after the close, BA announced its CEO will meet with US Senators who are investigating the ALK airline mid-air panel blowout and loose bolts.  Finally, an Oregon jury ordered a subsidiary of BRKB to pay $62.3 million to nine property owners whose properties were damaged by wildfires found to have been caused by the company’s negligence in dealing with power lines.  (This is the first of many trials from 5,000 home and business owners whose properties were damaged by the 2020 fires.)

Overnight, Asian markets were mostly green, with Japan (-0.80%) and South Korea (-0.36%) the only red in the region. Meanwhile, Hong Kong (+3.56%), Thailand (+1.82%), and Shanghai (+1.80%) led the nine gainers.  (China roared back after the PBOC announced policy easing in an attempt to boost their economy.)  In Europe, we see a similar picture with only Russia (-0.59%) and Norway (-0.09%) in the red.  At the same time, The CAC (+0.90%), DAX (+1.27%), and FTSE (+0.39%) lead the region higher.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.22% open, the SPY is implying a +0.43% open, and the QQQ implies a +0.70% open at this hour.  Meanwhile, 10-year bond yields are down to 4.107% and Oil (WTI) is off a quarter of a percent to $74.18 per barrel in early trading.

The major economic news scheduled for Wednesday includes S&P Global Mfg. PMI, S&P Global Services PMI, S&P Global Composite PMI (all at 9:45 a.m.), and EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open Wednesday include ABT, APH, ASML, T, BOKF, ELV, FCX, GD, KMB, EDU, PGR, SAP, TEL, TDY, and TXT.  However, after the close, AMP, CACI, COLB, CNXC, CCI, CSX, HXL, IBM, KNX, LRCX, LVS, LVRO, LBRT, PKG, PLXS, RJF, RMD, STX, NOW, TSLA, URI, and WRB report. 

In economic news later this week, on Thursday, Building Permits, Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Dec. Durable Goods Orders, Q4 GDP, Q4 GDP Price Index, Dec. Goods Trade Balance, Dec. Retail Inventories, Dec. New Home Sales, and Fed Balance Sheet are reported.  Finally, on Friday, we get the Dec. Core PCE Price Index, Dec. PCE Price Index, Dec. Personal Spending, and Dec. Pending Home Sales.

In terms of earnings reports later this week, on Thursday, we hear from ALK, AAL, AIT, BX, BFH, CRS, CMCSA, CFR, DOW, EXP, HUM, HZO, MMC, MKC, MBLY, MUR, NEE, NOK, NOC, ORI, BPOP, SDVKY, SHW, LUV, STM, UNP, VLO, VLY, XEL, XRX, AJG, COF, INTC, KLAC, LHX, LEVI, OLN, TMUS, V, WAL, WDC, AND WY.  Finally, on Friday, AXP, ALV, BAH, CL, FCNCA, GNTX, and NSC report.

In miscellaneous news, on Tuesday, BAC analysts reported that hedge funds were net buyers of stocks last week for the first time in 10 weeks.  The analysis said that the net was $554 million of stock added to hedge fund portfolios.  Elsewhere, bond icon Bill Gross told Bloomberg that the Fed needed to end Quantitative Tightening and begin cutting rates soon.  Gross said the window to do this (to preserve the soft landing) was this year.  Later, Bloomberg reported that India’s stock market has surpassed Hong Kong’s market (by $4.33 trillion versus $4.29 trillion).  This makes India the fourth largest stock market globally, behind the US, China, and Japan.  (Hong Kong, France, and the UK follow those top four.)  Finally, TM Chairman Toyoda told an interview Tuesday that he believes electric-only vehicles will reach a maximum of 30% of the market, with the rest of the market made up of hybrid, hydrogen, and traditional-fuel cars.  Part of his reasoning was explained that 1 billion people in the world still live without electricity (and many, many more without reliable electricity), which makes EV cars a non-starter for that portion of the world.

So far this morning, ABT, ASML, ELV, EDU, and SF all reported beat on both the revenue and earnings lines.  Meanwhile, T and SAP both beat on revenue while missing on earnings.  On the other side, TXT, TDY, and TEL missed on revenue while beating on earnings.  Unfortunately, KMB and GD missed on both the top and bottom lines.  It is worth noting that ELV and EDU both raised forward guidance while ASML, T, and KMB lowered guidance.

With that background, all three major index ETFs gapped higher to start the premarket session. All three are also printing white-bodied candles, which although small, are at the top of their range so far in the early session. The SPY, DIA, and QQQ remain above their T-line (8ema) and sitting at (or near in the case of DIA) all-time highs. So, obviously, the Bulls are in control of the trend in the short term. In the longer term, we are also clearly bullish in all three. In terms of extension, the QQQ is stretched above its T-line after the premarket gap, while the other major index ETFs are still inside the normal range. The T2122 indicator is also still sitting in its midrange. So, both sides have room to run if they can gather the momentum to do it. As I’ve been saying for some time, keep watching those Tech Big Dogs. If they make a move as a group, it is almost impossible for the rest of the market to do anything but follow given their trading volumes. As of 7:45 a.m., all of them are looking to gap higher and all but two of them are printing white-bodied premarket candles.

As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

LTA Scanning Software
TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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