Be Wary Of a Bull Trap, PPI up Next

Wednesday gave us a sideways move within a range.  SPY opened 0.06% higher, DIA gapped up 0.24%, and QQQ gapped down 0.24%. At that point, SPY sold off modestly for 30 minutes before trading sideways in a tight range until 3:30 p.m.   Meanwhile, DIA rallied modestly for an hour before trading sideways in a very tight range until 1:30 p.m.  From 1:30 p.m. until 3:30 p.m. DIA sold off modestly.  As for QQQ, it sold off briskly the first 30 minutes before grinding sideways in a modest range until 3:30 p.m.  However, at 3:30 p.m. all three major index ETFs sold off sharply (biggest 5-minute candle of the day) and then modestly rebounded the last 25 minutes of the day.  This action gave us a gap-up black-body Doji-type candle in the DIA, a gap-up black-bodied Hanging Man-type candle in the SPY, and a gap-down Bearish Harami in the QQQ.  The two large-caps remain above their T-line (8ema) and the QQQ closed the day right at its own.  All three major index ETFs did this on less-than-average volume.

On the day, eight of the 10 sectors were green as Energy (+1.32%) was out in front leading markets higher.  At the same time, Technology (-0.63%) lagged behind the other sectors and was the only sector much in the red on the day.  Meanwhile, SPY lost 0.16%, the DIA gained 0.11%, and the QQQ lost 0.77%. VXX fell 0.51% to close at 13.56 and T2122 climbed but remained just outside of overbought territory to 79.92.  10-year bond yields spiked again to 4.188% and Oil (WTI) popped 2.63% to close at $79.72 per barrel.  So, for the most part, it was a sideways drift day in the markets.  The was a small amount of movement early, but the bulk of the trading was done in a range-bound area, not far from the prior close.

The only major economic news on Wednesday was EIA Weekly Crude Oil Inventories, which surprised (after API numbers Tuesday evening) with a 1.536-million-barrel drawdown (compared to a forecasted 0.900-million-barrel inventory build and much lower than the prior week’s 1.367-million-barrel build).

After the close, LEN missed on revenue while beating on earnings.  LEN also lowered its forward guidance.

Click for video

In stock news, on Wednesday, BKSY announced it has been awarded a $24 million contract to supply AI services by the US Air Force.  At the same time, Swedish EV maker PSNY announced it is cutting the base price of its Polestar 3 model by more than 12% (down to $73,400).  The company also launched new model variants.  Later, LFWD announced a 1-for-7 reserve split effective at the market open on Friday, March 15.  The move is aimed at maintaining the stock price requirement for NASDAQ listing.  At the same time, MSFT announced it will widen the availability of its AI-powered cyber-security tool on April 1.  Later, VLKAF (Volkswagen) announced it expects only a 3% increase in car sales this year, which is down sharply from 2023’s 12% increase.  At the same time, GEHC announced an increase in the size of its secondary offering from 13 million to 14 million shares a day after announcing the secondary listing.  Later, the GOOGL subsidiary Waymo announced Wednesday that it begin offering free driverless robotaxi services in Los Angeles to select people starting Thursday.  GOOGL said the service will cover 63 square miles ranging from Santa Monica to downtown LA. 

At the same time, X stock fell sharply after the Financial Times reported that President Biden intends to voice concerns about the Nippon Steel acquisition of X.  In unrelated Japanese news, the Japanese media reported the NSANY (Nissan) board of directors is now seeking a partnership with HMC on electric vehicles.  Elsewhere, WS announced it has signed a licensing agreement with MT and will begin using MT’s patented technology to ablate hot-formed blanks, entering a new segment.  After hours, FSR stock crashed 35% when the Wall Street Journal reported the company’s advisors were preparing for a potential bankruptcy.  Also after the close, MO announced it would sell part (35 million shares of its 197 million shares) of its stake in BUD.  This will be accomplished via a secondary offering of BUD.  In addition, BUD has agreed to buy $200 million of its stock back directly from MO.  Meanwhile, UA announced its founder Plank will return as the CEO as of April 1.  At the same time, KNTK announced an 11.4 million share secondary offering.  DLTR announced it plans to close 1,000 stores in the coming years (schedule not specified) after significant setbacks during Q4.

In stock legal, governmental, and regulatory news, on Wednesday the FDA announced it has granted “orphan drug” designation to PRTC’s LYT-200 therapy. (The designation offers tax and other benefits.)  Later, Epic Games asked a US federal judge to hold AAPL in contempt for allegedly violating an injunction governing its App Store.  Epic asked the judge to “end AAPL’s sham compliance” with the court order.  At the same time, the NTSB said Wednesday that BA still refuses to disclose the names of those employees who worked on the 737 MAX 9 door plug or production line.  BA also overwrote video footage of the production.  BA’s CEO’s response was the ridiculous “I’m unable to provide that information…Boeing has no records of the work being performed.”  Later, the FDA also granted PSTX orphaned drug status for its multiple myeloma treatment.  At the same time, PI and NXPI announced they had reached a comprehensive settlement and cross-patent licensing agreement, ending the litigation between the companies.  (NXPI will make a one-time $45 million payment to PI immediately and $15 million per year increasing afterward.)  Elsewhere, Reuters reported the UNH has already been hit with six class action lawsuits of alleged failures related to the loss of personal data.  (It is also expecting suits over financial losses related to its failures to process claims and make payments.)  Separately, the US Dept. of Health announced it has opened an investigation into UNH’s Feb. 21 cyberattack over a breach of protected consumer health (HIPAA) data.  After the close, the FDA approved LIVMARLI (a treatment for a rare liver disease) from MIRM.

Overnight, Asian markets were mixed as South Korea (+0.94%), Singapore (+0.81%), and Thailand (+0.75%) led the seven gainers.  Hong Kong (-0.71%) and Shenzhen (-0.52%) paced the losing 5 exchanges.  In Europe, the bourses lean heavily toward the green at midday.  The CAC (+0.99%), DAX (+0.42%), and FTSE (unchanged) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap higher to start the day.  DIA implies a +0.38% open, SPY is implying a +0.34% open, and QQQ implies a +0.42% open at this hour.  Meanwhile, 10-year bond yields are up to 4.194% and Oil (WTI) is up 0.73% to $80.31 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, and Feb. Retail Sales (all at 8:30 a.m.), Jan. Business Inventories and Jan. Retail Inventories (both at 10 a.m.), and the Fed’s Balance Sheet (4:30 p.m.).  The major earnings reports scheduled for before the open are limited to AVAH, CSIQ, DKS, DG, GIII, and BEKE.  Then, after the close, AGCO, ADBE, ALTG, TLNE, and ULTA report.    

In economic news later this week, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Friday, we hear from ERJ and JBL.

So far this morning, AVAH, CSIQ, DKS, DG, and BEKE all reported beats on both the revenue and earnings lines.  Meanwhile, GIII missed on revenue while beating on earnings.  It is worth noting that GIII also lowered its forward guidance.

In miscellaneous news, on Wednesday, for the second day in a row, Ukrainian drones struck Russian oil refineries.  This attack caused a fire at Rosneft’s largest oil refinery.  (Tuesday’s attacks significantly damaged Lukoil’s largest refinery.) Elsewhere, Reuters reported that global corporate dividends topped $1.66 trillion in 2023 with banks accounting for more than half of the growth.  Meanwhile, the US CFPB alleged that banking and business groups such as the US Chamber of Commerce have been “judge shopping” in the filing of lawsuits challenging credit fee regulations.  Later Wednesday evening Reuters reported that the probe into Monday mid-air dive by a LTMAY airline BA 787 plane is now centered on the pilot seat coming loose from the cabin floor.  Yet another problem for the troubled aircraft maker.  In Europe, the ECB announced a new framework for how it will implement monetary policy.  The interesting change is that the new framework gives banks much more say in how big their cash reserves on hand need to be. 

In late-breaking news, the International Energy Agency said overnight that it projects oil markets will face a supply deficit throughout 2024.  This comes after OPEC+ agreed to extend their 2+ million barrel per day production restrictions as a means of propping up crude prices.  In addition, in the last week, the three largest Russian oil refineries have been attacked by Ukraine in retaliation for the invasion of their country and Russia’s deliberate targeting of energy and economic infrastructure.  The amount of damage done and the schedule of repairs remain unknown.  However, this is expected to have at least some impact on the net oil and distillates availability globally.

With that background, it looks like the Bulls will start the day by leading a positive move. All three major index ETFs opened the premarket by gapping a bit higher and have printed tiny, but white-body candles since that start. All three remain above their T-line (8ema) and all three of those averages are rising. So, the short-term trends are now bullish in all three while the strong bullish longer-term trend is back in play in SPY (and to a lesser extent QQQ) but remains under significant pressure in the DIA. In terms of extension, none of the three major index ETFs is too far from its T-line, but the T2122 indicator is back just outside the edge of overbought territory. This means both sides still have room to run if they can gather the momentum. However, the Bears have more slack. Looking at those 10 Big Dog tech names, seven are in the green this morning. However, it is worth noting that the leader of the AI pack, NVDA, is down more than 1.5% in the early session and TSLA is down 1.4%. As the two most heavily traded stocks in the market (by far) they carry a bigger stick to the market fight. So, be careful. With those two strongly in the red, it will be much harder for Bulls to have traction. It is possible the gap up is just a Bull trap today.

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

EU Regulates AI as IBM Replaces Workers With It

Markets gapped higher on Tuesday.  SPY opened 0.42% higher, DIA opened 0.20% higher and QQQ opened 0.55% higher.  At that point, all three major index ETFs sold off for 15 minutes (recrossing the gap) before rallying sharply for 75 minutes. Then all three sold off modestly until 1 p.m. before beginning a more modest but steady rally that lasted the rest of the day, give or take 5 minutes of profit-taking at the very end.  This action gave us strong Bullish Morning Star signals in the QQQ and SPY (closing up all the way above the Friday candle body in SPY).  DIA gave us more of a gap-up, fat-body white Spinning Top.  All three major index ETFs crossed back above their T-line (8ema) on the day.  This happened on average volume in the QQQ, just less than average volume in the DIA, and below-average volume in the SPY.

On the day, eight of the 10 sectors were green as Technology (+1.69%) was way out in front leading markets higher.  At the same time, Utilities (-0.87%) and Communication Services (-0.63%) lagged behind the other sectors on increasing interest rates (very capital-intensive businesses).  Meanwhile, SPY gained 1.08%, the DIA gained 0.61%, and the tech-heavy QQQ gained 1.43%.  VXX plummeted 4.88% to close at 13.63 and T2122 fell back out of overbought territory to 74.29.  10-year bond yields spiked up to 4.153% and Oil (WTI) dropped a modest 0.24% to close at $77.74 per barrel.  So, we saw markets at the very least unphased by the CPI print Tuesday and then we got the same rally we’ve seen for months, led by the high-tech giants (NDVA +7.16%, META +3.34%, MSFT +2.66%, AMD +2.20%, and AMZN +1.99%), which accounted for $100 billion in trades themselves Tuesday.  However, it was not a super thin rally with more than 58% of the SPY components and 65% of the QQQ components in the green.

The major economic news on Tuesday included Feb. Core CPI, which came in at 3.8% (compared to a forecast of 3.7% but down from January’s 3.9%). On a month-to-month basis, Feb. Core CPI stayed steady at +0.4% (versus a forecast calling for a decline to 0.3% but in line with the January +0.4% reading).  On the headline number, Feb. CPI rose to 3.2% (compared to a forecast and January value of 3.1%).  On the month-to-month basis that was up to +0.4% (in line with the +0.4% forecast but a tick higher than January’s +0.3% reading). Later, the February Federal Budget Balance was better than expected at -$296.0 billion (versus a forecast of -$298.5 billion but dramatically higher than the artificially depressed -$22.0 billion in January). After the close, the API Weekly Crude Oil Stocks showed an unexpected inventory drawdown of 5.521 million barrels (compared to a forecasted inventory build of 0.400 million barrels and the prior week’s +0.423 million barrels).

After the close, QFIN reported a beat on both the revenue and earning lines.

Click for video

In stock news, on Tuesday, MMM announced it had hired outsider Bill Brown, former CEO of LHX, as CEO.  (MMM gapped higher on the news and closed up 4.97%.)  At the same time, BA announced that its plane deliveries slipped to 27 in February (down one from February 2023) bringing the YTD total to 54 (down more than 22% from the first two months of 2023).  Later, Reuters reported that TM is now the most shorted stock in the Asia-Pacific region while SMCI, CMCSA, COF, and WFC are the most shorted large-cap stocks in the US.  Meanwhile, TSLA announced that its Berlin factory has come back online after a week-long closure after arson had caused the plant to be disconnected from the power grid.  At the same time, CPB announced it had finalized its $2.33 billion acquisition of Sovos Brands.  Later, GS announced plans to expand its private credit portfolio by $300 billion over the next five years.  (This is a larger move than competitors MS, which looks to expand by $50 billion in niche, and JPM, which has earmarked $10 billion for its private credit expansion.)  At the same time, ACAD stock plunged after the company reported its Phase 3 trial of a drug to treat schizophrenia had failed to show significant improvement over placebo.  (As a result, the company removed its sales forecast.  ACAD closed down 17.20%.)  Later, GM reported Tuesday that it had produced 20,000 electric vehicles this year that do not qualify for EV Tax Credits before it requalified by changing suppliers.  At the same time, CNBC reported that IBM told its employees it plans to slash an unspecified number of marketing and communications jobs (cutting that staff by 50%) as it replaces workers with AI.  No specific number of jobs were provided.  Later, MINM announced a definitive merger agreement with private e2Companies in an all-stock deal.  Elsewhere, VJET said it intends to delist its stock in the US in a move aimed at reducing the cost of complying with SEC rules.  (The delisting is effective April 1, 2024.)  Later, CRGE filed for chapter 11 bankruptcy after the close.  At the same time, GEHC announced a 13 million share secondary offering.  After the close, the Financial Times reported that CME will apply to begin clearing US Treasury trades later this year.

In stock legal, governmental, and regulatory news, on Tuesday the Canadian and US governments signed a deal to begin a 2-year study into Canadian coal mine pollution that flows into US waters.  This has been a long-standing border dispute and the US Geological Survey had previously concluded that TECK coalmines are the source of the pollution (TECK recently agreed to sell those mining operations to GLNCY).  At the same time, a US District Judge in OR has agreed to hear the FTC suit to block the KR acquisition of ACI, with an initial hearing on Aug. 26. Later, ADM announced that some of its employees had received subpoenas from the US Justice Dept. and the company is correcting the last six years of financial reports after an internal probe.  At the same time, a federal judge ruled that BRKB-owned Geico Insurance will not have to face a class-action lawsuit alleging the company overcharged policyholders during the COVID-19 pandemic.  Later, a federal whistleblower lawsuit against MCK was revived by a unanimous 3-0 appeal ruling of the 2nd Circuit Court of Appeals.  The suit alleges MCK bribed doctors to get them to buy drugs from their company over competitors.  At the same time, INTC has won over an effort to block the sale of its chips to Chinese tech giant Huawei.  (INTC had been issued a license for the deal during the Trump administration for the chips that had not been developed or produced yet.  The Biden admin had been under pressure to revoke the license but decided to let the sale stand because of the deal made under the Trump-issued license. The deal is worth hundreds of millions of dollars, which rival AMD was blocked from when applying for a license during the Biden administration.)  Later, AAPL made a major concession in its changes to comply with the EU Digital Markets Act, saying developers will be free to distribute their apps directly to consumers…but only in Europe.  (This last step could cost AAPL significant revenue as it will lose 30%, nearly no cost, markup on app store sales.)  Elsewhere, PRPL announced a settlement with competitor TPX related to PRPL’s partnership with The Mattress Firm (which TPX has asked the FTC to approve its acquisition of).  The settlement will extend PRPL’s partnership with The Mattress Firm for at least 12 months if the FTC approves the deal.)  At the same time, a former BA employee was found dead of an apparent suicide.  He was in the middle of a deposition for a whistleblower retaliation lawsuit over actions taken against him (after reporting on the company’s quality and production issues).  After the close, AMC announced that a NY federal court had granted preliminary approval of a settlement of a lawsuit alleging certain investors improperly profited from “short swing” profits trading the stock.  Also after the close, the Dept. of Defense announced the F-35 fighter jet program has reached full-rate production.  The announcement will open up more funds released to LMT as part of the contract’s “progress funding” provisions.

Overnight, Asian markets were mixed but leaned toward the red.  India (-1.51%) and Malaysia (-1.06%) were by far the biggest losers of the seven red exchanges.  On the other side, Singapore (+0.61%) and South Korea (+0.44%) led the five gaining exchanges.  In Europe, we see a mostly green picture at midday with 12 of the 15 bourses above the flat line.  The CAC (+0.50%), DAX (+0.08%), and FTSE (+0.06%) lead the region on volume as usual in early afternoon trade.  Meanwhile, in the US, as of 7:30 a.m., Futures are pointing toward a start just on the positive side of flat.  The DIA implies a +0.09% open, the SPY is implying a +0.08% open, and QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields are rising to 4.17% and Oil (WTI) is up 1.38% to $78.63 per barrel in early trading.

The only major economic news scheduled for Wednesday is EIA Crude Oil Inventories (10:30 a.m.).  The major earnings reports scheduled for before the open are limited to ARCO, DLTR, WOOF, ACDC, WSM, and ZIM.  Then, after the close, AE and LEN report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, Feb. Retail Sales, Jan. Business Inventories, Jan. Retail Inventories, and Fed’s Balance Sheet.  Finally, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Thursday, AVAH, CSIQ, DKS, DG, GIII, BEKE, AGCO, ADBE, ALTG, TLNE, and ULTA report.  Finally, on Friday, we hear from ERJ and JBL.

So far this morning, WOOF reported beats on both the revenue and earnings lines.  At the same time, ZIM missed on revenue while beating on earnings.  Unfortunately, DLTR missed on both the top and bottom lines.

In miscellaneous oil news, on Tuesday, Ukraine attacked one of Russia’s largest oil refineries, reportedly taking at least half the facility’s production offline with significant damage. (This refinery processes 6% of Russian crude, 11% of the country’s gasoline, 6.4% of Russia’s diesel fuel, 5.6% of its fuel oil, and 7.4% of Russia’s aviation fuel.  So, while it may not be crippling, it could impact global oil prices as Putin keeps oil inside Russian borders…depending on how long the facilities are offline.)  In other oil news, the US Energy Information Administration raised its 2024 domestic oil output forecast.  EIA now projects an additional 260k barrels per day, reaching 13.19 million barrels per day for 2024.  (This was up 90k barrels per day from the previous forecast.)

In post-CPI market rate expectation news, 99.0% of Fed Funds rate trades are expecting no change in rates next week.  (1% expect a quarter-point rate reduction.)  Meanwhile, 84.4% of traders expect no change on May 1, while 15.5% of trades expect a quarter-point reduction at that meeting.  At the same time, only 33.4% of bets expect no change at the June 12 meeting.  57.1% of trades expect a quarter-point rate cut, while 9.4% expect a half-percent cut by that time.  For the July 31 meeting, only 14.1% expect no change in rates, 43.4% a quarter-point cut, 37.0% expect a half-point cut, and 5.5% anticipate a 0.75% cut by that point.

In late-breaking news, in a landslide vote (523 for, 46 against, 49 abstaining) the EU has passed the world’s first AI regulatory law. The law breaks AI applications into six risk categories, which range from low hazard to unacceptable (which are immediately banned) on the other end. The regulatory body structure, makeup, and processes have not been outlined in reports posted to this point.

With that background, it looks like the Bulls will start the day by leading a very modest move into positive territory. All three major index ETFs opened the premarket slightly higher and have printed tiny white-body candles since that start. All three remain above their T-line (8ema) and all three of those averages are rising. So, the short-term trends are now bullish in all three while the strong bullish longer-term trend is back in play in SPY (and to a lesser extent QQQ) but remains under significant pressure in the DIA. In terms of extension, none of the three major index ETFs is too far from its T-line, and the T2122 indicator is back in its mid-range. This means both sides still have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, six are in the red this morning. Of particular note is that TSLA (-2.04%) and INTC (-1.50%) are by far the biggest movers among those 10 names in the early session. It will be hard for the Bulls to gain traction if those 10 names are not leading the way.

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

Global Markets Red to Start Week

Friday was a reversal day in the market.  SPY opened 0.11% higher, DIA opened just 0.05% higher, and QQQ opened 0.06% higher.  After that open, all three major index ETFs rally significantly higher in the first hour.  However, at that point, all three reversed and sold off until 1:45 p.m.  The next reversal saw a significant bounce up off the lows for an hour in the SPY, DIA, and QQQ.  Then, once again, we reversed and all three sold off the last hour of the day.  This action gave us black-bodied candles in all those major index ETFs.  The QQQ printed a Bearish Engulfing candle that crossed back down through its T-line (8ema).  At the same time, SPY gave us a Bearish Engulfing candle with a large upper wick that remained above its 8ema.  Meanwhile, DIA printed a Gravestone Doji-type candle that retested its T-line from below and closed just back below that level.  This happened on above-average volume in the DIA and especially QQQ.  SPY gave us just below-average volume.

On the day, six of the 10 sectors were red as Technology (-1.24%) was way out in front leading the way lower.  Meanwhile, Communications Services (+0.70%) and Consumer Cyclical (+0.65%) held up better than the other sectors.  At the same time, SPY lost 0.60%, the DIA lost 0.12%, and the tech-heavy QQQ lost 1.44%.  VXX rose 2.62% to close at 14.48 and T2122 fell but remained just inside the overbought territory at 83.14.  10-year bond yields fell to 4.077% and Oil (WTI) dropped a.37% to close at $77.85 per barrel.  So, Friday saw the Bulls open the market very modestly higher and try to follow through for an hour.  However, profit-taking in those mega-cap AI names (such as NVDA -5.55%, INTC – 4.66%, and AMD -1.89%) proved too much to fight.  In fact, of the 10 “Big Dog” names, we saw a role reversal as only beaten-down AAPL (+1.02%) and GOOGL (+0.77%) were in the green.  Those tickers alone decide where the market is going on most days.

The major economic news on Friday included Feb. Avg. Hourly Earnings, which grew at a slowing pace at +4.3% (Year-on-Year) compared to a forecast and January reading of +4.4%.  The slowing growth of wages can be seen better on a Month-on-Month basis where they came in at +0.1% (versus a forecast of +0.2% and a January reading of +0.5%).  At the same time, Feb. Nonfarm Payrolls blew past expectations at +275k (compared to a forecast of +198k and even the January +229k).  On the private side, February Private Nonfarm Payrolls also were hotter than predicted at +223k (versus a forecast of +160k and the January value of +177k).  The Feb. Participation Rate remained steady at 62.5% (the same as in January). Interestingly, even with a much larger than anticipated new job growth, the Feb. Unemployment Rate grew to 3.9% (up from January’s 3.7%).  That marks 25 months of unemployment below 4%, which is the longest streak of “full employment” since the 1960s.

Click for video

In stock news, on Friday, BP announced that its overall carbon emissions climbed in 2023 for the first time since 2019.  However, the company said it still plans to reduce its emissions by 10-15% by 2025 and 20%-30% by 2030 (both compared to the 2019 baseline).   Later, MMM announced the finalization of its plan to spin off its Healthcare business unit (now going by the name Solventum) at the end of March.  On April 1, Solventum will trade under the SOLV ticker.  (MMM will retain 19% ownership of SOLV.)  At the same time, RIVN announced that it has received 68,000 purchase reservations for its recently announced R2 model in less than 24 hours of accepting reservations.  (The R2 will have a base model MSRP of $45,000.)  Later, Reuters reported the consensus of several IT consultancies that it may take months for UNH to make a full recovery from the ransomware attack that shut down its operations 2.5 weeks ago.  (This has had a crippling effect on healthcare providers and patients, who cannot get preapprovals, submit claims, or submit reimbursement requests.  For scale reference, UNH processes about 50% of all medical claims for 900k doctors, 5,500 hospitals, and 600 labs. Many of those providers have already had to seek emergency loans to prevent operational impacts.)  However, UNH said it thinks it will be able to restore its medical claims and payments systems by March 18.  Elsewhere, Reuters reported that GOOGL’s new facility (dedicated to AI) in Mountain View CA, is state of the art…except it has inoperable or at best spotty Wi-Fi coverage.  At the same time, BTTR announced a 1-for-44 reverse split effective March 20.  The move was taken to maintain compliance with NYSE listing rules.  Later, MSFT announced that hackers tied to Russian intelligence are again trying to break into its systems using data stolen from corporate emails in January.

In stock legal, governmental, and regulatory news, on Friday, a three-judge panel of the US Court of Appeals ruled unanimously (3-0) that cryptocurrency exchange Binance must face a lawsuit from investors alleging the company violated US securities laws by selling unregistered tokens, which resulting in investor losses when the tokens lost most of their value. Later, the FAA and NTSB announced they are investigating a UAL-operated BA 737 MAX jet that rolled off the runway in Houston.  No injuries were reported, but this was the third (of four) such incidents of a UAL-operated BA plane in the last week. (Saturday a UAL-operated jet was diverted to Los Angeles after a hydraulic problem following take off.)  At the same time, Bloomberg reported that TSM will be awarded $5 billion in federal grants (Commerce Dept.) for setting up chip fabs in AZ.  (TSM is on record saying that it will invest $40 billion in those facilities.)  Later, the FDA delayed LLY’s experimental treatment for Alzheimer’s disease.  (The FDA will hold a meeting of outside experts to discuss safety and efficacy based on clinical trial data.  No date for the meeting has been set.)  That decision was both unexpected and a disappointment to LLY, which expected the drug to get full use approval later this month.  At the same time, AAPL backed down (after a day) in its battle with game maker Epic Games, unlocking Epic developer accounts.  (AAPL’s move, under pressure from EU regulators, cleared the way for Epic to open its own game store on iPhone and iPad devices…but only in Europe.  Later, AMPY responded to reports made to CA environmental regulators about an oil sheen off the coast of Huntington Beach CA.  AMPY pre-emptively announced that there is no evidence the oil slick has any connection to its oil drilling operations in the area.  At the same time, the FDA approved NVO’s Wegovy weight-loss drug for use in lowering the risk of stroke and heart attack in non-diabetic patients.  (Wegovy has a list price of $1,349 for a 1-month supply and the move is expected to help broaden usage approval from insurers.) Later Friday night, BA said it believes the required documents detailing the removal of a key part from its 737 MAX 9 jets were never created.  This comes after BA said it was unable to find documentation on the removal of four bolts from the 737 MAX 9 door plugs.  Executive VP Ojakli told the US Senate, “We have looked extensively and have not found any such documentation” and the company’s working hypothesis was “the documents required by our processes were not created when the door plug was opened.”  At the same time, a TX federal judge (sounds right) issued a ruling striking down a US NLRB rule that required companies to treat many workers as employees rather than independent contractors, requiring the companies to bargain with unions representing those workers.  (The rule was set to take effect today.)  The NRLB is expected to appeal.  Finally, the Wall Street Journal reported Saturday that the US Dept. of Justice had opened a criminal investigation into the ALK blowout involving the BA 737 MAX 9 jet door panel in January.  The investigation is about whether BA complied with an earlier consent decree (settlement) related to the two fatal crashes of 737 MAX jets in 2018 and 2019.

Overnight, Asian markets were mostly in the red but the biggest movers (as a group) were in the green.  Shenzhen (+2.27%), Hong Kong (+1.43%), and Shanghai (+0.74%) led portions on the region higher.  Meanwhile, Japan (-2.19%) and Australia (-1.82%) were the main movers of the eight red exchanges.  In Europe, with two minor exceptions, we see red across the board at midday.  The CAC (-0.24%), DAX (-0.52%), and FTSE (-0.38%) are setting the tone and leading the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.19% open, and the QQQ implies a -0.23% open at this hour.  At the same time, 10-year bond yields are at 4.083% and Oil (WTI) is down a half of a percent to $77.64 per barrel in early trading.

The only major economic news scheduled for Monday is the NY Fed 1-Year Consumer Inflation Expectation Survey at 10 a.m.  The major earnings reports scheduled for before the open are limited to FTRE.  Then, after the close, CASY, ORCL, and MTN report. 

In economic news later this week, on Tuesday we get Feb. Core CPI, Feb. CPI, Feb. Federal Budget Balance, and API Weekly Crude Oil Stocks report.  Then Wednesday, EIA Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Feb. Core PPI, Feb. PPI, Feb. Retail Sales, Jan. Business Inventories, Jan. Retail Inventories, and Fed’s Balance Sheet.  Finally, on Friday, Feb. Export Price Index, Feb. Import Price Index, NY Empire State Mfg. Index, Feb. Industrial Production, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectation, and Michigan 5-Year Inflation Expectation are reported.

In terms of earnings reports later this week, on Tuesday, ADM, HIS, IGT, KSS, ONON, QFIN, CLOV, and RXT report.  Then Wednesday, we hear from ARCO, DLTR, WOOF, ACDC, WSM, ZIM, and LEN.  On Thursday, AVAH, CSIQ, DKS, DG, GIII, BEKE, AGCO, ADBE, ALTG, TLNE, and ULTA report.  Finally, on Friday, we hear from ERJ and JBL.

So far this morning, FTRE missed on both the top and bottom lines.  FTRE also lowered its forward guidance.

In miscellaneous news, on Friday evening, the US Senate passed the first six funding bills, sending them to President Biden.  The President signed them into law at the last minute, averting the first partial shutdown of government and funding operations through September. The second shutdown cliff comes March 22. Elsewhere, on Saturday, Reuters reported that Australian farmers had ripped out millions of grape vines after 2023 over-production of wine crushed global wine prices.  (In 2023, Australia produced more than two years’ worth of wine and still has two years’ worth of win in storage.)  Australia is the world’s fifth-largest exporter of wine.  Major wine producers like CG announced plans to focus more on top-end wines and cut back lower-end vintages.

Elsewhere overseas, China announced it is in the process of raising $27 billion to fund its next push into home-grown semiconductor manufacturing.  The money was raised from local governments and state agencies into what is known as “the big fund” as China prepares to sharply escalate curbs on technology-related sales to that country.  This also comes amidst China’s own “AI craze” as it too has recognized that as the next area of arms race for the world.  Meanwhile, the European Central Bank said it could begin lowering interest rates in June.  The ECB now forecasts that European inflation will fall back to its 2% target by next year, but that waiting that long to begin rate cuts would cause a recession.  (This came at the same time US Fed Chair Powell told the Senate that the FOMC is “getting close” to the confidence level needed to begin its own cuts.

With that background, it looks like the Bears will start the week in control. All three major index ETFs gapped down a bit and are printing black-body candles in the premarket. SPY is retesting its T-line from above in the early session while DIA and QQQ both started below that level. It is also worth noting that the SPY 8ema is flat while both the QQQ and DIA T-lines have rolled over. So, the short-term trends is now bearish in all three while the strong bullish longer-term trend is under serious test. In terms of extension, none of the three major index ETFs is too far from its T-line. However, T2122, is sitting just inside of overbought territory. Both sides still have room to run if they can gather the energy. Looking at those 10 Big Dog tech names, six are in the red this morning. Of particular note is that the big AI names (NVDA, AMD, and INTC) are toward the bottom of that group in terms of performance in the premarket.

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

Jobless Claims, Q4 Productivity, and Powell

Markets gapped higher on Wednesday with SPY opening up 0.70%, DIA opening up 0.59%, and QQQ opening 0.96% higher.  From that point, SPY and QQQ wandered back and forth on both sides of that opening level.  Meanwhile, DIA followed the same pattern until 1:30 p.m. when it sold off hard, reaching the previous close level before bouncing back into mid-gap during the last 30 minutes.  This action gave us black-bodied, indecisive Spinning Top candles in all three major index ETFs.  Both SPY and QQQ retested and bounced up off their T-line (8ema) while QQQ gapped down through its own 8ema and after a retest closed below.  This happened on average volume in QQQ and below-average volume in the SPY and DIA.

On the day, all 10 sectors were green as Basic Materials (+1.18%) and Technology (+1.17%) were out in front leading the way higher.  Meanwhile, Communications Services (+0.08%) and Consumer Cyclical (+0.09%) lagged behind the other sectors.  At the same time, SPY gained 0.51%, the DIA gained 0.25%, and the tech-heavy QQQ gained 0.63%.  VXX rose 0.35% to close at 14.18 and T2122 jumped back up to the very top of its mid-range at 79.90.  10-year bond yields plummeted to 4.108% and Oil (WTI) rose 1.22% to close at $79.10 per barrel.  So, Wednesday saw the Bulls fight back after the Bears had their day Tuesday.  The much-awaited testimony of Fed Chair Powell was largely a nothingburger.  At least the market did not react to the early release of his statement or the questions and answers.  

The major economic news on Wednesday included Feb. ADP Nonfarm Employment Change, which came in lower than expected at +140k (compared to a forecast of +149k but still much higher than the January +11k reading).  Later, January JOLTs Job Openings were a big more than predicted at 8.863 million (versus the 8.800 million forecasted but below the December 8.889 million).  So, job openings remained high in January but were falling.  Later, EIA Crude Oil Inventories showed less of a build than anticipated at +1.367 million barrels (compared to the +2.400 million barrels forecast and well below the prior week’s +4.199 million barrels reading).  Finally, the Fed Beige Book indicated a modest increase in US economic activity, saying “Economic activity increased slightly, on balance,” … “The outlook for future economic growth remained generally positive, with contacts noting expectations for stronger demand and less restrictive financial conditions over the next 6 to 12 months.”

In Fed news, Fed Chair Powell indicated that he sees rate cuts beginning this year but also said that the win in the fight with inflation “is not assured.” Reaffirming the obvious, Powell said, “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent,” … “At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.” When asked if there will be an announcement when a “soft landing” is achieved, Powell said “We are just going to keep our heads down and do our jobs and try to deliver what the public is expecting from us. We wouldn’t be declaring victory like that.” He continued, “We’re on a good path so far to be able to get there, but “I don’t want to put the label on it. Other people can do that.”  Later, the NY Fed announced that its Global Supply Chain Pressures Index rose to 0.1 in February, up from a revised January value of -0.23.  (While supply chain pressures on inflation increased, they said these pressures remain well within normal and well under the high-stress levels caused by the Pandemic when the index peaked at 4.35 in December 2021.)  Chief among the causes of the increase was the severe drought limiting the Panama Canal passage and terrorist activity in the Red Sea, which limited the Suez Canal passage.  Finally, Minneapolis Fed President Kashkari said that stronger economic numbers early this year likely make it appropriate for the FOMC to have two rate cuts, at most, this year.  Kashkari said, “I was at two (rate cuts in 2024) in December,” … “It’s hard to see, with the data that’s come in, that I’d be saying more cuts than I had in December,” … “It seems like at a base case I’d be where I was in December, or potentially one fewer, but I haven’t decided.”

After the close, HG beat on both the revenue and earnings lines (109% earnings beat on an absolutely MASSIVE 32x beat on revenue).  Meanwhile, VSCO missed on revenue while beating on earnings.

Click for video

In stock news, on Wednesday, Reuters reported that FNF (Fidelity) will cut roughly 9% of their workforce by dismissing about 1,000 workers.  At the same time, the UAW announced that 30% of TM workers at TM’s MO plant have signed union cards seeking to join the union.  (UAW has previously said it will look for support from 70% of a given factory before filing for a union vote.)   Later, STLA announced it will extend the “slowdown” in production at its Turin Italy plant due to weak demand for its Fiat fully-electric and Maserati model cars. (The slowdown started Feb 12 and is now extended through March 30 and covers 2,200 furloughed employees.)  At the same time, CG announced it had begun the process of selling its Japanese Cosmetics supplier Tokiwa in a deal valued at $800 million.  Later, NYCB was halted Wednesday after news broke that the bank was seeking an infusion of funding.  Later in the day, it was announced that NYCB had received more than $1 billion from a group of investors including HUD.  At the same time, ENB announced it will invest $500 million to expand its pipeline and storage network through 2025.  Later, TSLA said the closure of its Berlin factory will continue through the end of next week following an arson attack that left the plant without power.  Elsewhere, XOM is fighting the $53 billion CVX acquisition of HES, by claiming it has rights to HES’s Guyana oil project.  (That project is widely seen as the crown jewel of HES holdings.)  XOM said it may offer a bid for HES if CVX cancels its deal (since XOM thinks it will get the Guyana project).  At the same time, Bloomberg reported that APO is in early talks with TRIP about a potential takeover of the travel information company.  Later, MMAT announced it is seeking shareholder approval to increase the number of common shares it can issue in a bid to rapidly raise working capital.  At the same time, CBZ announced the acquisition of private CompuData for an undisclosed amount. Later, APO announced its intention to sell 55 million shares it holds of ADT.  For its part, ADT said it intends to repurchase 15 million shares as part of the deal.  At the same time, BAC announced it expects investment banking revenue to increase by 10%-15% in Q1 compared to Q1 2023.  Meanwhile, AAPL escalated its feud with Epic Games (maker of Fortnite) by blocking the Epic app from its EU users and also canceling the developer accounts of Epic programmers.  Later, Reuters reported that PNRA has loosened its ingredient standards in order to boost financial estimates ahead of its IPO.  The process will shave $21 million off PNRA annual costs.  (The IPO has not yet launched.)

In stock legal, governmental, and regulatory news, on Wednesday, AAPL tweaked some of its proposals to comply with EU tech rules a day after coming under intense criticism.  Among other minor things, AAPL dropped the requirement that anyone wanting to create an alternative app store must maintain a letter of credit with AAPL as a stand-by measure.  However, AAPL kept the requirement that a new marketplace must have had an Apple Developer Account for two years and have had more than 1 million annual app installs.  At the same time, a US Appeals Court upheld the dismissal of a frivolous lawsuit brought by a conservative group seeking to stop PFE from its diversity initiatives. (The suit did not name a single employee harmed or any amount of harm caused and it did not even own PFE stock.)  Later, Reuters reported that the bank regulators (Fed, FDIC, and Treasury Comptroller of the Currency) will back down from pressure from Banks and will significantly reduce additional capital requirements under what was known as the “Basel III” agreement.  (The proposal was that any bank with more than $100 billion in assets additional capital. This was about a 16% increase in capital reserves and would have impacted three dozen banks.)  The reduction will mean that more of the default risk will continue to be borne by the government rather than the banks.  At the same time, the SEC voted 3-2 in favor of adopting rules requiring public companies to disclose certain climate-related risks.  Even so, various green groups said the rules were already gutted by Ag and Oil interests.  At the same time, 40 US states and the District of Columbia called on META to combat FaceBook and Instagram account hacking…or face legal action.  Later, Reuters reported that high levels of cancer-causing chemical benzene in acne treatment products from EL, TGT, RBGLY, (Reckitt Benckiser), and others by independent lab Valisure.  Valisure filed an FDA petition calling on the agency to force a recall of the products.  Elsewhere, a TX Federal judge barred the Dept. of Commerce from considering race when it decides who qualifies for assistance under Minority Business Development Agency programs.  (If that isn’t ridiculous, I’m not sure what is…but that is why the case was brought in the TX jurisdiction.) Later, BA announced it has (after strong FAA and NTSB pressure) now disclosed the names of its employees who worked on 737 MAX door plugs, a day after being accused of not cooperating by the NTSB. (It’s a little disturbing that the company could avoid disclosing the names of employees…meaning they could not be interviewed individually…involved in such a huge safety issue.)

Overnight, Asian markets were mixed.  Taiwan (+1.00%) was by far the leader to the upside.  Meanwhile, Shenzhen (-1.37%), Hong Kong (-1.27%), and Japan (-1.23%) were the main losers on the day.  In Europe, markets are mostly green on very modest moves with just three of the 15 exchanges in the red at midday.  The CAC (+0.16%), DAX (+0.07%), and FTSE (unchanged) lead the region higher on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a green start to the day (before data).  The DIA implies a +0.15% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.47% open at this hour.  At the same time, 10-year bond yields remain unchanged at 4.108% and Oil (WTI) is down two-thirds of a percent to $78.61 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. Imports, Jan. Exports, Jan. Trade Balance, Final Q4 Nonfarm Productivity, and Final Q4 Unit Labor Costs (all at 8:30 a.m.), Jan. Consumer Credit (3 p.m.), and the Fed Balance Sheet (4:30 p.m.).  Fed Chair Powell also testifies before the Senate (10 a.m.) and Fed member Mester speaks (11:30 a.m.).  The major earnings reports scheduled for before the open include ABM, AEO, BIG, BILI, BJ, BURL, CIEN, YMM, KR, and TTC.  Then, after the close, AVGO, COST, DOCU, GPS, LVRO, MRVL, PBR, and RBT report. 

In economic news later this week, on Friday, Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Private Nonfarm Payrolls, Feb. Unemployment, Feb. Participation Rate, and the WASDE Ag report are delivered.  Fed member Williams also speaks.

In terms of earnings reports later this week, on Friday, AQN and GCO report.

So far this morning, ABM, BURL, and CIEN have all reported beats on the revenue and earnings lines.  Meanwhile, BIG beat on revenue while missing on earnings.  On the other side, BILI and BJ missed on revenue while beating on earnings.  (KR reports at 8 a.m.)  It is worth noting that BURL raised its forward guidance.

In miscellaneous news, Houthi terrorists used missiles to attack two commercial ships Wednesday, one of which resulted in three deaths and the other setting fire to a container ship.  Elsewhere, the US Justice Dept. charged a GOOGL employee with stealing artificial intelligence trade secrets while secretly working with two Chinese-based companies.  Meanwhile, a day after Elon Musk sued OpenAI for “abandoning its original nonprofit mission”, OpenAI announced that Musk had proposed TSLA acquire the company, but was rebuffed, in 2018.  In an email released Wednesday, Musk said that OpenAI would not be relevant “without a dramatic change in execution and resources.” And that “the only path forward for OpenAI was for Tesla, his electric car company, to buy it.”  Musk was rejected, OpenAI turned to a new profit-driven model and increased resources, and now Musk seems upset he did not get his way back in 2018.  Finally, a MSFT engineer told CNBC that the company’s copilot AI tool sometimes creates violent and sexual images and simply ignores copyrights.  (One assumes he may soon be in the job market.)

In late-breaking news, President Biden proposed expanding the number of drugs subject to Medicare price negotiations from 20 to 50 this morning.  This comes after the administration won a legal challenge to the idea that the largest buyer of the drugs should not pay the highest price and whatever the drug companies want to charge.  It also comes after pharmaceutical companies have now participated in negotiations of the 10 highest-priced drugs.  (Other legal challenges by big pharmaceutical companies remain on court dockets.)  The President is expected to outline the idea at tonight’s State of the Union address.  (BMY, JNJ, MRK, AZN, NVS, AMGN, and ABBV are the main companies that would be impacted.)

With that background, all three major index ETFs gapped lower to start the premarket. However, all three have given us strong white-body candles since that open with SPY and QQQ both bouncing up off of their T-lines. (DIA remains below it’s 8ema.) At the same time, all three are in positive territory for the early session at this point. So, the SPY and QQQ short-term trends remain bullish with prices above a rising T-line while DIA is more bearish with the price below a falling 8ema. Similarly, the strong bullish longer-term trend persists in the SPY and QQQ while DIA is in a new downtrend. In terms of extension, none of the three major index ETFs is too far from its T-line. However, T2122, while still technically in its midrange, is sitting just on the cusp of overbought territory. So, both sides still have room to run if they can gather the energy. Looking at those 10 Big Dog tech names, nine are in the green in the early session, once again led by the AI names. Only TSLA is dragging on that group as it is down sharply again this morning.

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

JOLTs, Oil Inventories, and Powell at the House

On Tuesday, markets gapped down to start the day.  SPY opened 0.38% lower, DIA opened down 0.32%, and QQQ opened 0.72% lower.  After that, all three major index ETFs traded lower most of the day (interspersed with sideways periods).  However, at 3:30 p.m. all of them rallied the last 30 minutes of the day.  This action gave us gap-down, large black candles with significant lower wicks.  (SPY could also be seen as an Evening Star type of signal.)  All three also crossed below their T-line (8ema) during the day.  This happened on above-average volume in the QQQ, average volume in the DIA, and less-than-average volume in the SPY.

On the day, six of the 10 sectors were in the red again as Technology (-2.17%) was far and away the biggest loser.  Meanwhile, Energy (+0.50%) held up better than the other sectors.  At the same time, Utilities (+1.35%) by far (by 0.80%) held up better than the other sectors.  The SPY lost 1.00%, the DIA lost 1.04%, and the tech-heavy QQQ lost 1.79%.  VXX jumped 4.13% to close at 14.13 and T2122 fell back to the center of its mid-range at 57.48.  10-year bond yields plummeted to 4.139% and Oil (WTI) fell 0.74% to close at $78.15 per barrel.  So, Tuesday was the Bears’ day, gapping down and following through until the last 30 minutes saw some short covering.   

The major economic news on Tuesday included S&P Global Service PMI, which came in above expectation at 52.3 (compared to a forecast of 51.3 but down from the prior month’s reading of 52.5).  At the same time, the S&P Global Composite PMI also came in higher than predicted at 52.5 (versus a 51.4 forecast and above the prior month’s 52.0 value).  Later, January Factory Orders were down 3.6% (compared to a -3.1% forecast and far below the December -0.3% reading).  At the same time, the Feb. ISM Non-Mfg. Employment Index was down to 48.0 (versus a forecast of 51.4 and a January value of 50.5).  Meanwhile, the Feb. ISM Non-Mfg. PMI also came in lower than expected at 52.6 (compared to the 53.0 forecast and the January 53.4 reading).  At the same time, the Feb. ISM Non-Mfg. Price Index also showed a decline to 58.6 (versus a forecast of 62.0 and the prior value of 64.0).  So, ISM Services are giving the Fed what they wanted to see with declining employment, index, and prices.  Later the API Weekly Crude Oil Stocks report showed a smaller-than-expected inventory build of 0.423 million barrels (compared to a forecast of +2.600 million barrels but far less than the prior week’s +8.428 million barrels).

After the close, BBAR, CRWD, JWN, and ROST all reported beats on both the revenue and earnings lines.  (This was a massive 555% beat on earnings by BBAR.)  It is worth noting the CRWD raised forward guidance (more than analysts had expected).

Click for video

In stock news, on Tuesday, AMZN made an interesting policy change, eliminating data transfer fees for customers who want to transfer their business to a different cloud computing provider.  (The move is intended to eliminate a barrier to getting customers to try their AWS cloud computing service.  It also gets ahead of EU regulations that will require cloud providers to make it easier for customers to change providers.)  At the same time, ACN announced it had agreed to acquire the online learning platform Udacity for an undisclosed amount. (The company also announced it plans to spend more than $1 billion in the technology training and education market in the next three years.)  Later, TSLA halted work (likely until at least early next week) at its German factory near Berlin after a suspected arson attack left the plant without power Tuesday.  (This will cost TSLA hundreds of millions of dollars.)  At the same time, labor unions gave light to the real reason SBUX announced its “framework” for dealing with unions and collective bargaining last week.  A coalition of unions announced an end to their fight for SBUX board seats, withdrawing their three board seat candidates one week before the election.  Elsewhere, Reuters reported that many healthcare providers are still not getting paid by UNH after the insurer’s recent ransomware attack.  The article claims that many smaller providers are running low on cash as they are forced to absorb the upfront costs of being unable to collect payment.  At the same time, CDNS announced it would buy German software company Beat CAE for $1.24 billion ($744 million in cash and the rest in stock).  Later, META reported that both FaceBook and Instagram suffered a two-hour global outage starting at 10 a.m. Eastern Tuesday and caused by technical issues.  At the same time, BOX announced it has enhanced its AI capabilities by integrating into MSFT’s Azure cloud services.  Later, TM announced it would invest $2.22 billion in Brazil in two tranches before 2030.  The investment will result in a new vehicle designed and built in the country.  After the close, TGT joined a crowd of retail companies expanding, announcing it would add 300 new stores.  (WMT announced adding 150, WMT Sam’s 30, etc.)

In stock legal, governmental, and regulatory news, on Tuesday, President Biden put an $8 cap on bank late fees for late credit card payments.  (The current average late fee is $31.  However, it is unclear which banks will see the biggest revenue hit.)  Later, a US federal appeals court unanimously ruled in favor of AAPL, GOOGL, DELL, MSFT, and TSLA, rejecting an appeal by former child miners alleging the companies and their suppliers had used and then obscured the use of “forced child labor” in the production of cobalt and lithium for their batteries.  (The appeals court rules that buying materials from the suppliers, even if knowing supplier practices, did not constitute “participation in the venture.”) At the same time, Republican Senator Rubio called for a $20,000 tariff on cars (Chinese make) brought in from Canada.  He said the vehicle imports are “flooding US auto markets.”  (He said the proposed tariff legislation would also cover Chinese vehicles made in Mexico, but specifically focused on Canada.)  At the end of the day, the latest JNJ talc trial ended in a hung jury in FL, causing a mistrial.  The attorney for the plaintiffs said they intend to file and try the case again.  Elsewhere, an OR state jury ordered BRKB subsidiary PacifiCorp to pay $29.2 million to nine homeowners (and a summer camp) for property damage caused by wildfires sparked by the company’s equipment.  (This was the second of three test cases on the matter by different plaintiffs with overall property damage near $1.9 billion.)  Later, Medicare and Medicaid said they would accelerate payments to healthcare providers in an attempt to partially offset the lack of funds caused by the UNH hack that has stopped many payments for nearly two weeks now.

In late-breaking news, mortgage demand surged 11% last week. The Mortgage Bankers Assn. said this was primarily due to a rush of new homes hitting the market for the Spring. (There were 15% more homes on the market at the end of February than at the same time in 2023. Of note was the $200k – $350k category where supply rose more than 25% year over year.) Still, the national average mortgage rate did fall slightly to 7.02% (from 7.04%) for a 30-year, fixed, conforming loan. So, that could also have been a modestly contributing factor. (Loan origination points remained the same at 0.67.)

Overnight, Asian markets were mixed but leaned toward the green side with seven of the 12 exchanges in positive territory.  Hong Kong (+1.70%), Singapore (+0.93%), and Thailand (+0.83%) led the gainers while all the losses were a third of a percent or less.  In Europe, with just two modest exceptions, the bourses are all green at midday.  The CAC -0.01%), DAX (-0.04%), and FTSE (+0.30%) lead the region on volume 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 +0.21% open, the SPY is implying a +0.32% open, and the QQQ implies a +0.61% open at this hour.  Meanwhile, 10-year bond yields have fallen to 4.158% and Oil (WTI) is up just over 1% to $78.97 per barrel in early trading.

The major economic news scheduled for Wednesday includes Feb. ADP Nonfarm Employment Change (8:15 a.m.), Jan. JOLTs Job Openings (10 a.m.), EIA Crude Oil Inventories (10:30 a.m.), and Fed Beige Book (2 p.m.).  Fed Chair Powell testifies (10 a.m.) before the House, Fed member Daly speaks (noon), and Kashkari (3:15 p.m.).  The major earnings reports scheduled for before the open include ANF, CPB, SID, FL, JD, KFY, REVG, THO, UNFI, and YSG.  Then, after the close, SUPV, and VSCO report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. Imports, Jan. Exports, Jan. Trade Balance, Final Q4 Nonfarm Productivity, Final Q4 Unit Labor Costs, Jan. Consumer Credit, Fed Balance Sheet.  Fed Chair Powell also testifies and Fed member Mester speaks.  Finally, on Friday, Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Private Nonfarm Payrolls, Feb. Unemployment, Feb. Participation Rate, and the WASDE Ag report are delivered.  Fed member Williams also speaks.

In terms of earnings reports later this week, on Thursday, we hear from ABM, AEO, BIG, BILI, BJ, BURL, CIEN, YMM, KR, TTC, AVGO, COST, DOCU, GPS, LVRO, MRVL, PBR, and RBT.  Finally, on Friday, AQN and GCO report.

In miscellaneous news, major business lobbyist groups (including the US Chamber of Commerce) announced Tuesday they will file suit against the Biden Administration Labor Dept. rule making it more difficult to treat workers as independent contractors to avoid paying minimum wage, overtime, benefits, collecting taxes, and minimum working conditions.  The rule takes effect March 11.  The groups filed suit in Beaumont TX, where they hope the benefit of the extremely conservative federal court and appeals district will make the difference in their favor.  Elsewhere, Bitcoin rose above $69,000 to an all-time high Tuesday but then immediately fell 8% to below $62,000 in very volatile trading.  Meanwhile, Bloomberg reported an interview with the CEO of the National Assn. of Manufacturers Timmons.  Timmons said his members are in desperate need of immigrant labor candidates to ease a severe labor shortage caused by US unemployment rates being below 4% for the first time in more than 60 years.  Timmons said his group’s analysts believe the inability to legally hire migrant applicants (or get other workers at those wages from other sources) could lead to a loss of $1.75 trillion in GDP by the end of the decade.  He also said the government is overwhelmed with applications due to the influx of immigrants.  He called for more funding/staff for those federal agencies. So, manufacturers need more workers, illegal immigrants can’t be hired, and the government can’t approve legal migrants fast enough to supply the demand according to that group.

In unsurprising energy news, Ukraine’s Energy Minister said the country ruled out any deals to allow Russian natural gas to transit their country via pipeline after the current deals expire later this year.  EU sources had been optimistic a deal could be worked out, but Ukraine’s minister told an interviewer at the International Atomic Energy Agency that “There are not any possible solutions” to allowing this to happen.  (Europe still gets 8% of its natural gas from Russia as of the end of 2023, down from over 40% in 2021.) This could pose another opportunity for US (or Middle Eastern) LNG exports by year’s end.

So far this morning, FL, JD, KFY, and REVG have reported beats on both the revenue and earnings lines.  Meanwhile, UNFI missed on revenue while beating on earnings.  Unfortunately, THO missed on both the top and bottom lines.  (ANF, BF.B, CPB, and SID report closer to the opening bell.)

With that background, it looks like the Bulls are trying to rebound in the premarket today. SPY and QQQ have both crossed back above their T-line (8ema) in the early session. Meanwhile, DIA as if the major index ETFs are looking to open lower. DIA is printing the largest (white-body) candle of those three major index ETFs. (DIA is giving us a Bullish Harami so far in the premarket.) So, the SPY and QQQ short-term trends are bullish with prices above a rising T-line in both. However, DIA is more bearish with the price below a falling 8ema. Similarly, the strong bullish longer-term trend persists in the SPY and QQQ while DIA is in a new downtrend. In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is back in its midrange. So, both sides have plenty of room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, all 10 are in the green in the early session, with the AI names leading the market higher early on.

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

Bear Look To Test Rally Strength

Markets diverged at the open Monday.  SPY gapped down 0.15%, QQQ opened flat (just 0.01% lower), and DIA gapped down a whopping 0.48%.  After that opening, DIA wandered back and forth inside of its gap (above the Monday open but below the Friday close) all day.  Meanwhile, SPY did a similar thing, riding along the smaller gap until a rally at 2:30 p.m. popped it back above Friday’s close, reaching the highs at 3:15 p.m. when a selloff took it back down into the gap at the close.  At the same time, QQQ spent its time wandering sideways in a range below its flat open, rallied back up above the prior close at 2:30 p.m. and sold off at 3:25 p.m., going out on the lows. This action gave us a high-wick, Gravestone Doji, white candle in the SPY.  DIA retested its T-line (8ema) after a gap below but closed back above, also with a high wick on a white candle.  Finally, QQQ printed a black-body Bearish Harami in the top third of Friday’s candle.

On the day, six of the 10 sectors were in the red as Consumer Cyclical (-1.12%) and Communications Services (-1.07%) were out in front leading the way lower.  At the same time, Utilities (+1.35%) by far (by 0.80%) held up better than the other sectors.  Meanwhile, the SPY lost 0.11%, the DIA lost 0.28%, and the tech-heavy QQQ lost 0.36%.  VXX fell 0.22% to close at 13.57 and T2122 fell back out of the oversold area and back into the top of the mid-range at 75.34.  10-year bond yields climbed back up to 4.217% and Oil (WTI) fell 1.51% to close at $78.76 per barrel.  So, Monday saw some major divergence at the open. Then, all three major index ETFs ground sideways for most of the day.  Then we saw an afternoon pop followed by a late-day swoon.  This all happened on well below average volume in all three.

There was no significant economic news on Monday.

In Fed news, Atlanta Fed President Bostic said there was no urgency to cut rates given the “prospering economy and job market.”  Bostic said, “I need to see more progress to feel fully confident that inflation is on a sure path to averaging 2% over time.”  He went on, “Only when I gain that confidence will I feel the time is right to begin lowering the federal funds rate, …The good news is the labor market and economy are prospering, furnishing the (Federal Open Market) Committee the luxury of making policy without the pressure of urgency.”

After the close, CRGY reported beats on both the revenue and earnings lines.  The company crushed on earnings (beating by 173%) on an 8.4% revenue beat. 

Click for video

In stock news, on Monday, AAL threw a lifeline to BA, placing an order for 115 of the yet-to-be-produced 737-MAX-10 model jets.  (This includes 85 new jets and covers 30 previously-ordered 737-8 jets into 737-10.)  At the same time, AAL ordered 85 EADSY (Airbus) A321neo jets and 90 ERJ (Embraer) E175 planes.  Later, DIS, WBD, and FOX announced that they expect their sports streaming joint venture expects to have five million subscribers in the first five years due to its exclusive broadcast rights to popular sports.  FOX CEO Murdoch said Monday that he sees the addressable market at between 50 and 60 million households (half of the current cable TV market).  At the same time, JBLU and SAVE announced they had canceled their $3.8 billion merger agreement, conceding there was no path forward having been denied by the FTC, then losing its appeal to federal court, and most recently, being denied expedited appeal by the US district court of appeals.  Later, WULF announced it had exercised its option with a joint venture started with a fellow miner (Cumulus Coin) in 2023 and will double its bitcoin mining capacity in PA.  The expansion is expected to come online in 2025.  Elsewhere, ALB announced it is launching an ADR “A share” (each worth 1/20th of a share of ALB) with an initial offering of $1.75 billion worth of the preferred stock.  The new stock will trade under the ALB PR A ticker. (Underwriters will have the right to buy an additional $262.5 million of the new stock within 30 days.)  At the same time, BODI announced the sale of its Van Nuys production facility, using the proceeds to make a partial prepayment on an outstanding loan.  Later, AKRO announced a $300 million IPO, with underwriters having the option to buy another $45 million.  At the same time, CHN, a closed-end investment fund focused on China announced it has cut its management fees in light of economic and market challenges for Chinese securities.  Later, Reuters reported that a senior Nippon Steel executive will meet with the head of the United Steelworkers union this month in an effort to secure the union’s support of the Japanese steelmaker’s $14.9 billion acquisition of X.  After the close, a hacker forum posted that UNH had paid a $23 million ransom in a bid to recover data lost to a hack by the Blackcat ransomware gang.  Later, Bloomberg reported that shipments from TSLA’s Shanghai plant fell to the lowest level in more than a year in February (down 16% month-on-month).  The reduction came amidst renewed discounting by competitors and a sales slump caused by the Lunar New Year holiday.  At the same time, AAPL tried to take the PR sting out of its Monday $2 billion fine from the EU by announcing its new Macbook Air laptop computers (which use a new model of CPU it calls the M3) are now available for order. Finally, F reported that vehicle sales jumped higher in February, up 10.5% compared to February 2023. (89% of the vehicles sold were still traditional, but there was still a huge 81% increase in EV sales and a 32% pop in hybrid sales over the same period a year prior.)

In stock legal, governmental, and regulatory news, on Monday, President Biden said that the manufacturers of 10 high-priced drugs have submitted counter offers in the first-ever Medicare drug price negotiations.  (This includes PFE, BMY, and AZN, who lost their legal challenge to negotiations last Friday.)  At the same time, in addition to the $1.95 billion antitrust fine from the EU, a Canadian court approved a $10.6 million settlement in a class-action suit against the tech giant.  (The suit was over AAPL deliberately slowing down iPhone 6 and 7 phones to force sales of new models.) Later, COF won a dismissal by a federal judge in VA related to overcharging cardholders for foreign exchange fees on international transactions.  At the same time, a jury in a US district court in DE gave a mixed verdict on a patent infringement case.  The just ruled partially in favor of AVDL (on a narcolepsy drug patent) and in favor of JAZZ on a second patent.  (ADVL said it would appeal the portion of the case it lost.)  Elsewhere, the FCC announced that its broadband internet subsidy program (used by 23 million mostly rural Americans) will run out of money in May and will cease without additional funding.  T, CMCSA, and VZ called for Congress to extend the program.  Later, the US Dept. of Health and Human Services presented its case to a 5th-circuit court of appeals asking the court to overrule a lower-court order vacating the federal mandate that requires healthcare insurers to offer cancer screenings and HIV-preventing medication at no extra cost to patients.  (A TX-based Christian health insurer had sued to overturn the mandate and won in conservative TX district court.)  If the ruling is upheld, it largely guts the 2010 “Obamacare” mandate.  After the close, the FAA announced that audits of the BA and SPR production operations failed to comply with manufacturing quality control requirements.  (This was a summary announcement and did not include the detailed action plan it will require the companies to implement.)  Also after the close, the state of FL again lost an appeal trying to revive the state’s political ban on any workplace training the state considered “woke.”  As was found by a lower court in 2022, the 11th Circuit Court of Appeals found the state cannot block employers from requiring employees to attend training related to eight concepts the GOP-run state sees as “woke.”  (Two of the three judges on the appeals court panel were conservative Trump appointees.)  In addition, the SEC announced it has further delayed its decision on approval of a new Ethereum spot price ETF.  (The fund request was filed in November and was first put on hold when 11 bitcoin spot-price funds were approved in January.)

Overnight, Asian markets were mostly red.  Hong Kong (-2.61%) was far out front leading the way lower, but only two of the 12 exchanges were even modestly in the green.  In Europe, we see a similar picture taking shape at midday with only five of 15 exchanges showing green and all moves being modest in both directions.  The CAC (+0.03%), DAX (unchanged), and FTSE (-0.01%) leading the mixed picture in early afternoon trade.  In the US, as of 7:30 a.m.), Futures are pointing toward a down start to the day.  DIA implies a -0.15% open, the SPY is implying a -0.25% open, and the QQQ implies a -0.52% open at this hour.  At the same time, 10-year bond yields are back down to 4.186% and Oil (WTI) is off nine-tenths of a percent to $78.02 per barrel in early trading.

The major economic news scheduled for Tuesday includes Feb. S&P Global Service PMI and Feb. S&P Global Composite PMI (both at 9:45 a.m.), Jan. Factory Orders, Fed ISM Non-Mfg. Employment, Feb. ISM Non-Mfg. PMI, and Feb. ISM Non-Mfg. Price Index (all at 10 a.m.), and the API Weekly Crude Oil Stocks report (4:30 p.m.).  We also hear from Fed Vice-Chair Barr (noon and 3:30 p.m.).  The major earnings reports scheduled for before the open are limited to GBTG, FERG, NIO, TGT, and VVX.  Then, after the close, BBAR, CRWD, JWN, and ROST report. 

In economic news later this week, on Wednesday, Feb. ADP Nonfarm Employment Change, Jan. JOLTs Job Openings, EIA Crude Oil Inventories, and Fed Beige Book are reported. Fed Chair Powell testifies, and Fed member Daly also speaks.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. Imports, Jan. Exports, Jan. Trade Balance, Final Q4 Nonfarm Productivity, Final Q4 Unit Labor Costs, Jan. Consumer Credit, Fed Balance Sheet.  Fed Chair Powell also testifies and Fed member Mester speaks.  Finally, on Friday, Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Private Nonfarm Payrolls, Feb. Unemployment, Feb. Participation Rate, and the WASDE Ag report are delivered.  Fed member Williams also speaks.

In terms of earnings reports later this week, on Wednesday, ANF, CPB, SID, FL, JD, KFY, REVG, THO, UNFI, YSG, SUPV, and VSCO report.  On Thursday, we hear from ABM, AEO, BIG, BILI, BJ, BURL, CIEN, YMM, KR, TTC, AVGO, COST, DOCU, GPS, LVRO, MRVL, PBR, and RBT.  Finally, on Friday, AQN and GCO report.

In miscellaneous news, Reuters reported Monday that several fund managers are now exploring ways to change the currency in which their funds do business.  This is after the SEC adopted a rule, taking effect May 28, that requires funds to settle transactions in one day instead of two.  This makes it harder for funds taking money from foreign investors to exchange the other currency for dollars and buy or sell the equities under the transaction and settle all transactions in one business day.  (Changing to doing all business in dollars, would force the foreign investors to do the currency exchange before sending money to the funds.)  Elsewhere, trucking firm SAIA announced it has seen an increase in LTL (less-than-truckload) freight tonnage in the first two months of the year.  The company said its freight volumes were up 11.8% in January and February versus the same months in 2023.  (Since SAIA is a significant trucking firm this may provide some read-through to the economy.)  Meanwhile, OPEC+ announced it had agreed to extend its 2.2-million-barrel-per-day oil production cuts until the end of June.

In China news, at the opening of the Chinese National (Communist) Party Congress, Beijing announced its 2024 GDP target is for growth “around 5%” with an urban unemployment rate target of 5.5%.  At the same time, China said it was targeting the creation or 12 million new urban jobs and a CPI of “around 3%.”  (For reference, in 2023 the National Bureau of Statistics said China averaged 5.2% unemployment in cities with only +0.2% inflation.)  In addition, China has set its 2024 deficit-to-GDP ratio at 3%, down from a late-2023 upward revision to 3.8%.  This all comes one day after China’s Premier Li Qiang broke a 30-year streak of annual public press conferences.  Finally, retail analyst firm Counterpoint reported that AAPL iPhone sales plunged 24% in the first six weeks of 2024. In particular, the analyst noted strong competition from Hauwei, which is seeing a resurgence based on their new model “Mate 60” smartphone.

So far this morning, NIO and VVX reported beats on both the revenue and earnings lines.  Meanwhile, TGT missed on revenue while beating (significantly) on earnings.  Unfortunately, FERG missed on both the top and bottom lines.  It is worth noting that NIO also lowered forward guidance.

With that background, it looks as if the major index ETFs are looking to open lower. DIA is retesting its T-line (it is below its 8ema at the moment), while QQQ has bounced up off its T-line in the premarket. SPY is lower but has not yet reached its T-line for a test. All three are printing tiny-body, indecisive candles that are mostly wick at this point. However, the strong uptrend line is also under pressure from the move lower. It may be worth noting that the SPY and QQQ T-lines continue to rise while DIA’s 8ema is now flat again. So, the short-term is in question and the longer-term strong bullish trend is under pressure this morning. In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is back in its midrange. So, both the Bulls and Bears both have room to run if they can gather the momentum. Looking at those 10 Big Dog tech names, nine of the 10 are in the red in the early session, with only NVDA (+1.08%) defying the move lower at this point.

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

AAPL Fined As Market Looks For More Records

Friday saw an open modestly higher in the market.  The SPY gapped up 0.18%, the DIA opened just 0.01% lower, and QQQ gapped up 0.18%.  However, the Bulls were just getting started in the SPY and QQQ, starting a rally that lasted until 2:30 p.m. with modest profit taking the last 90 minutes of the day.  Meanwhile, DIA sold off the first 30 minutes before starting a more modest rally that lasted until 2:15 p.m.  Like its larger brother index ETFs, DIA took very modest profits in the last 105 minutes.  This action led to gap-up, large white-bodied candles in the SPY and QQQ.  Both could be said to be “Trader’s Best Friend” signals as they gapped up from indecisive, Doji-like candles.  In addition, both broke out of their pullback printing both new all-time highs and new all-time high closes.  At the same time, DIA bounced up off its T-line (8ema) and printed a Bullish Engulfing candle.  DIA did not print a new all-time high but only missed a new all-time high close by two cents.

On the day, eight of the 10 sectors were in the green as technology (+2.94%) way, way out in front (by 1.61%) leading the way higher.  Meanwhile, Utilities (-0.34%) was the only sector really in the red since Consumer Defensive (-0.02%) was more-or-less flat.  At the same time, the SPY gained 0.94%, the DIA gained 0.35%, and the tech-heavy QQQ gained 1.51%.  VXX gained a mere 0.29% to close at 13.60 and T2122 jumped back up into the oversold territory at 88.49.  10-year bond yields fell back to 4.186% and Oil (WTI) gained almost 2% to close at $79.81 per barrel.  So, Friday saw another day of rallies led by AI names.  AMD (+5.25%) and NVDA (+4.00%) did a lot of the lifting, but INTC (+1.79%) and META (+2.48%) helped also. 

The major economic news released Friday included S&P Global Mfg. PMI, which came in stronger than expected at 52.2 (compared to a 51.5 forecast and the previous 50.7 reading).  Later, January Construction Spending was well below anticipated at -0.2% (versus the +0.2% forecast and the December +1.1% value).  At the same time, Feb. ISM Mfg. Employment fell to a 45.9 index (compared to the January 47.1 reading).  As for the headline number, the February ISM Mfg. PMI also came in low at 47.8 (missing the 49.5 forecast and falling from the January 49.1 number).  However, the Feb. ISM Mfg. PMI Price Index also fell to 52.5 (versus a forecast of 53.5 and the January 52.9 index reading).  Meanwhile, the Michigan Consumer Sentiment was below predicted at 76.9 (compared to a 79.6 forecast and the prior 79.0 value).  The Michigan Consumer Expectations were also below what was anticipated at 75.2 (versus a 78.4 forecast and a 77.1 previous reading).  As for the future, the Michigan 1-year Inflation Expectations came in as expected at 3.0% (compared to a 3.0% forecast and up a tick from the previous 2.9% value).  Over the longer term, Michigan 5-year Inflation Expectations remain steady at 2.9% (versus the 2.9% forecast and 2.9% previous reading). 

In Fed news, Cleveland Fed President Mester called for changes to the Fed Discount Window policies (which would impact the entire banking sector). Mester said, “Testing at this time is not mandatory (she meant except for the largest banks), but I support requiring such testing as part of sound liquidity management.”  She continued, “It is also worth considering requiring banks to pre-position collateral at the window in proportion to their short-term runnable funding, including uninsured deposits, so they would be ready to borrow at the discount window should that funding start to run.”  At the same time, Richmond Fed President Barkin told CNBC that it was too soon to predict when rate cuts will begin.  Barkin said, “I’m still hopeful inflation is going to come down and if inflation normalizes then it makes the case for why you want to normalize rates, but to me, it starts with inflation.” He also said he still sees “wage pressures, I still see inflation pressures (and) we just had a high inflation report yesterday.”  Later, Fed Governor Waller indicated that Fed Balance Sheet decisions have nothing to do with rate policy. Waller said, “Balance sheet plans are about getting liquidity levels right.”…“They do not imply anything about the stance of interest rate policy, which is focused on influencing the macroeconomy and achieving our dual mandate.”  At the same time (but a different event), Dallas Fed President Logan said, “When (Fed Balance Sheet) balances approach a low level, it will be appropriate to slow the pace of asset runoff.”  She continued, “(When the balance sheet hits zero) there will be more uncertainty about how much excess liquidity remains.” … “I don’t think we can identify the (right) level in advance. We’ll need to feel our way to it by observing money market spreads and volatility.” Finally, Fed Governor Kugler indicated she sees a soft landing.  Kugler said, “I am cautiously optimistic that we will see continued progress on disinflation without significant deterioration of the labor market.”  She continued, “We have seen inflation cool significantly, falling more rapidly than at any time since the 1980s…Yet unemployment remains near the lowest levels seen only a few times since the 1960s.”

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In stock news, on Friday, VSTO confirmed that it had received an unsolicited $35 per share ($2.9 billion) takeover offer from MNC Capital.  At the same time, BA announced it would delay plans to ramp up 737 production.  In another BA development, it was reported Friday that BA is in talks to buy its struggling fuselage supplier (and former subsidiary) SPR in an attempt to resolve some of its 737 MAX quality problems.  At the same time, Reuters reported that NSANY (Nissan) is in advanced talks on investing $400 million in electric vehicle maker FSR.  At day end, NVDA closed above the $2 trillion market cap for the first time.  Meanwhile, CNI announced it had reached a tentative 3-year deal with the United Steelworkers union covering 2,500 of its employees.  At the same time, CVX announced it would idle two midwestern biodiesel plants due to poor market conditions.  (The plants were part of 11 plants bought in 2022 with the purchase of REGI for $3.15 billion.)  Later, NVDA CEO Huang told a conference that he believes, based on the current rate of development, AI “general intelligence” could arrive in five years or less.  Specifically, Huang said, “If I gave an AI every single (human) test that you can possibly imagine, you make that list of tests and put it in front of the computer science industry, and I’m guessing in five years’ time, we’ll do well on every single one.”  After hours Friday, SMCI was chosen to join the S&P500, replacing WHR.  At the same time, it was announced that DECK will also join, replacing ZION.  On Saturday, an NSC freight train derailed in PA, spilling diesel fuel and plastic pellets into the nearby Lehigh River.

In stock legal, governmental, and regulatory news, on Friday, BA agreed to pay $51 million for violating export controls over military technology.  The violations included employees in China downloading sensitive data from numerous aircraft (including the AH-64 Apache attack helicopter) and missiles.  At the same time, both SPOT and industry groups told the EU competition regulators that AAPL’s proposed changes to its app store policies disregard EU law and simply amplify its dominance over app developers.  Later, AAPL countered by telling Reuters that “both government agencies and users have concerns about the non-app store loading of apps causing security issues.” At the same time, the FDA announced it would allow GIS and DANOY (and other dairy companies) to advertise the claim that yogurt may reduce the risk of type 2 diabetes.  Later, the FAA announced it would mandate a fix for a BA 737 MAX design flaw that may disable the jet’s engine anti-ice system.  At the same time, a federal judge upheld a law that requires drugmakers to negotiate prices with Medicare, rejecting the challenge of AZN.  Later, ADM reported to the SEC that it expects to correct financial statements that previously misstated interunit sales by March 15.  At the same time, the NHTSA announced that GM is recalling 820k (570k in the US, 240k in Canada) 2020-2024 pickup trucks related to an issue with their tailgates.  Later, the FDA gave full approval to a JNJ lung cancer chemotherapy.  At the same time, a US district court dismissed a 2022 class-action lawsuit that had been brought against MOLN.  After the close, the state of CA approved a GOOGL Waymo proposal to expand its robotaxi fleet in the Los Angeles and San Francisco markets.  Later, the WTO won approval for its moratorium on tariffs on digital transmissions (e-commerce) until 2026.  This was a huge win for GOOGL, MSFT, AMZN, AAPL, and others.  Elsewhere, a US appeals court ruled that the federal government can swap thousands of acres of land with RIO.  The swap will enable RIO to build a copper mine on what Native Americans consider sacred land.  At the same time, BAYRY (Bayer) won a lawsuit brought by an AR family who claimed the mother had developed cancer from exposure to the company’s Roundup weedkiller.  Later, a TX homeowner filed suit against XEL, alleging that the utility’s equipment had started the wildfire raging across the Texas panhandle.  At the same time, the FL Gov. vetoed a bill banning social media for anyone under 16 years old.  Meanwhile, a US District judge ruled GOOGL must face a proposed class-action lawsuit claiming it monopolizes the ad exchange market.  Late Friday, the European Commission said BKNG (along with Musk’s X and TikTok) may be designated gatekeepers, subjecting it to strict rules.  (GOOGL, AMZN, AAPL, META, and MSFT were given that designation in 2023.)

Overnight, Asian markets were mixed but leaned toward the green side.  Taiwan (+1.95%) and South Korea (+1.21%) were by far the biggest movers in the region as Singapore (-0.43%) was the biggest loser.  Meanwhile, in Europe, the bourses lean toward the red side with just five of the 15 exchanges in the green at midday.  The CAC (+0.09%), DAX (-0.07%), and FTSE (-0.49%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a mixed open not far from flat.  The DIA implies a -0.26% open, the SPY is implying a -0.13% open, and the QQQ implies a +0.04% open at this hour.  At the same time, 10-year bond yields are up to 4.205% and Oil (WTI) is down two-thirds of a percent to $79.46 per barrel in early trading.

The major economic news scheduled for Monday is limited to Fed member Harker speaking at 11 a.m.  The major earnings reports scheduled for before the open are limited to SE.  Then, after the close, CRGY and SAIC report. 

In economic news later this week, on Tuesday we get Feb. S&P Global Service PMI, Feb. S&P Global Composite PMI, Jan. Factory Orders, Fed ISM Non-Mfg. Employment, Feb. ISM Non-Mfg. PMI, Feb. ISM Non-Mfg. Price Index, and the API Weekly Crude Oil Stocks report.  We also hear from Fed Vice-Chair Barr (noon and 3:30 p.m.).  Then Wednesday, Feb. ADP Nonfarm Employment Change, Jan. JOLTs Job Openings, EIA Crude Oil Inventories, and Fed Beige Book are reported. Fed Chair Powell testifies, and Fed member Daly also speaks.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. Imports, Jan. Exports, Jan. Trade Balance, Final Q4 Nonfarm Productivity, Final Q4 Unit Labor Costs, Jan. Consumer Credit, Fed Balance Sheet.  Fed Chair Powell also testifies and Fed member Mester speaks.  Finally, on Friday, Feb. Avg. Hourly Earnings, Feb. Nonfarm Payrolls, Feb. Private Nonfarm Payrolls, Feb. Unemployment, Feb. Participation Rate, and the WASDE Ag report are delivered.  Fed member Williams also speaks.

In terms of earnings reports later this week, on Tuesday, we hear from, GBTG, FERG, NIO, TGT, VVX, BBAR, CRWD, JWN, and ROST.  Then Wednesday, ANF, CPB, SID, FL, JD, KFY, REVG, THO, UNFI, YSG, SUPV, and VSCO report.  On Thursday, we hear from ABM, AEO, BIG, BILI, BJ, BURL, CIEN, YMM, KR, TTC, AVGO, COST, DOCU, GPS, LVRO, MRVL, PBR, and RBT.  Finally, on Friday, AQN and GCO report.

In miscellaneous news, social media company Reddit is seeking a $6.5 billion valuation from its upcoming IPO.  The company announced plans to initially price shares between $31 and $34 per share according to the Wall Street Journal.  (Reddit will list under the ticker RDDT when the IPO goes live.)   Elsewhere, the Senate and Congressional leader unveiled the first six (of 12) spending packages (budgets) that are meant to fund half the government through September 30.  Both Houses have until Friday to pass these six (1,050 pages) to avoid the first of Speaker Johnson’s “two cliffs.”  On the geopolitical front, the US began airdrops of humanitarian (mostly food) aid to Gaza over the weekend.  The first successful “test drop” included 38,000 meals.  For reference, there are at least 650k people without food in Gaza with the potential of that growing to as much as 2.3 million if the Israeli invasion and associated restrictions on aid continue.  The point is, we would need to do at least 20 such drops per day to stop the famine now taking place.

In late-breaking news, the European Commission fined AAPL $1.95 billion early today for its antitrust practices related to its app store over 10 years.  The original plaintiff was SPOT and industry groups representing numerous other app developers.  (The EU investigation began in 2019, indicating the behemoth tech company’s ability to stall.)  The appeal of this fine could last months.  

So far this morning, SE reported beats on both the revenue and earnings lines.  It is worth noting that while the company still reported a loss, the earnings were almost 35% better than expected.

With that background, it looks as if there is indecision among the three major index ETFs this morning. The QQQ is printing a small, white-body candle in the premarket and looking to add to Friday’s record prices. The DIA is the worst of the three and although it too is printing a small-body candle in the early session, it gapped lower and looks like it wants to retest the T-line from above again. Meanwhile, the SPY is somewhere in between, giving us a small-body, white candle inside the top of Friday’s record-breaking candle body. It may be worth noting that the T-line of all three are rising again. So, the short-term trend remains bullish and the longer-term strong bullish trend continues to hang on (despite being tested). In terms of extension, none of the three major index ETFs is too far from its T-line, but the T2122 indicator is in the middle of its overbought range. So, both the Bulls and Bears both have room to run if they can gather the momentum. However, the Bears have more slack to work with. Looking at those 10 Big Dog tech names, the Bulls have a slight edge so far this morning. Six of the 10 are green with NVDA, AMD, and INTC leading the way. As you might expect, based on the late-breaking fine news, AAPL is leading the pack lower along with TSLA.

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.

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Welcome to Bonus February – PCE Day

The market opened lower to start the day on Wednesday.  The SPY gapped down 0.31%, DIA gapped down 0.46%, and QQQ gapped down 0.49%.  After that open, both of the large-cap index ETFs spent the day meandering back and forth inside their opening gap.  Meanwhile, QQQ meandered around its opening level all day.  This action gave us gap-down candles across the board with SPY and DIA having white bodies while QQQ gave us a back body Doji.  In fact, both SPY and QQQ were indecisive candles while DIA was a larger white-body candle.  At the same time, DIA and QQQ retested and held above their T-line (8ema) while SPY did not quite get down to that level.  Once again, this came on well below-average volume across the board.

On the day, eight of the 10 sectors were in the red as Energy (-0.82%), and Healthcare (-0.76%) leading the way lower while Industrials (+0.13%) and Utilities (+0.09%) were the only sectors to get back into the green.  At the same time, the SPY lost 0.13%, the DIA lost 0.02%, and the tech-heavy QQQ lost 0.53%.  VXX gained 1.63% to close at 13.75 and T2122 dropped back further into its mid-range at 60.45.  10-year bond yields fell back to 4.266% and Oil (WTI) fell 0.74% to close at $78.29 per barrel.  So, we saw a gap down Wednesday (even before data was released in premarket).  However, after that, it was another blah day with some “fading the gap” leading to not much overall change for the session.

The major economic news released Wednesday included Q4 GDP, which came in slightly lower than expected at +3.2% (compared to a forecast of +3.3% and well down from the Q3 +4.9%).  At the same time, the Q4 GDP Price Index came in higher than anticipated at +1.7% (versus a +1.5% forecast and the Q3 value of +3.3%). Meanwhile, the January Goods Trade Balance was worse than expected at -$90.20 billion (versus the -$88.40 billion forecast and the December -$88.46 billion reading).  Later, January Retail Inventories grew less than predicted at +0.3% (compared to December’s +0.4% value).  Then at EIA Weekly Crude Oil Inventories grew much more than expected at +4.199 million barrels (versus a forecast of +3.100 million barrels and the prior week’s +3.514 million barrels). 

In Fed news, Boston Fed President Collins joined the “not so fast” chorus from the Fed as she indicated she is less confident in rate cuts…especially early ones.  Collins said, “I believe it will likely become appropriate to begin easing policy later this year.”  She continued, “When this happens, a methodical, forward-looking approach to reducing rates gradually should provide the necessary flexibility to manage risks, while promoting stable prices and maximum employment.”  She concluded, “It will be important to see sustained, broadening signs of progress toward the Fed’s dual mandate goals – while recognizing that progress may be uneven.”  Later, NY Fed President Williams sounded similarly, but maybe a bit closer to being ready for rate cuts.  He said, “While the economy has come a long way toward achieving better balance and reaching our 2% inflation goal, we are not there yet.”  However, Williams also said, “My view is that something like the three-rate-cuts-this-year projection from December is a reasonable kind of starting point.”  He added, “as we navigate the remainder of this journey, I will be focused on the data, the economic outlook, and the risks, in evaluating the appropriate path for monetary policy that best achieves our goals.”  Finally, Atlanta Fed President Bostic said he is “penciling in” a first cut this summer.

Click for video

In stock news, META announced it will release the newest version of its AI model (Llama 3) in July.  Later, CTNG announced it is considering “strategic alternatives” to enhance shareholder value.  At the same time, BXRX filed for Chapter 11 bankruptcy.  Later, EXLS announced it had launched an AI solution based on AMZN cloud services for data analytics.  Separately, EXLS announced it had partnered with MSFT to offer industry-specific AI solutions.  At the same time, BRKR announced it had reached a definitive agreement to buy private ELITechGroup for more than $943 million.  The deal is set to be completed in Q2.  Later, QUIK announced it had been awarded a contract to provide low-power chip solutions to a primary defense contractor.  (No details were released.)  At the same time, after being crushed in the media following comments by the CEO that it will implement “surge pricing” WEN issued multiple statements on Wednesday afternoon that it has no plans to implement dynamic or surge pricing.  (So, the statements are saying the CEO lied on an investor call.)  Later, Reuters reported (exclusively) that FI and AMADF are both bidding to buy FOUR for around $6.5 billion.  At the same time, PWFL and MIXT announced their boards have approved a merger set for the first week of April.  Elsewhere, it was announced that SCTL will be acquired by a private firm for $1.10 per share.  The deal is set to close in Q2.  At the same time, EA announced a restructuring that will reduce its workforce by 5%.  Later, FBMS said it had approved a $50 million buyback program.  At the same time, PTLO announced a secondary offering of 8 million shares (with underwriters having options to buy another 1.2 million shares).  Later, the hacking group that penetrated UNH, causing the slow prescription deliveries last week, posted a note Wednesday saying they had stolen millions of medical insurance and health data records.  However, the group deleted the post later.  After the close, AAPL CEO Cook said the company will announce its AI plans later this year.  Also after the close, SHEL’s solar subsidiary Savion has put 25% of its assets up for sale with the help of JEF.  Finally, BUD and the Teamster union have reached an agreement that will avert a strike that was planned for midnight Thursday.  (The deal increases pay by $4/hour immediately and $8/hour over the contract.  In addition, workers will get a $2,500 signing bonus and increased vacation.)

In stock legal, governmental, and regulatory news, on Wednesday, the FAA gave BA 90 days to come up with a new comprehensive quality control plan after inspections found profound shortcomings in the company’s safety and quality programs.  At the same time, GOOGL was hit with a $2.3 billion lawsuit by 32 European media groups who allege they suffered losses due to GOOGL’s digital advertising practices.  Later, AMAT received more subpoenas from the SEC related to shipments to China.  At the same time, the FDA cleared SPRO to begin phase 2 trials for an intravenous antibiotic treatment.  Later, the state of NY filed suit against JBSAY (the world’s largest beef producer) alleging the company has misled the public about its claimed plan to reach zero greenhouse emissions by 2040.  (The ridiculous suit seeks a $5k fine.  JBSAY generated $53.5 billion in revenue in just the first 9 months of 2023.)  At the same time, the FDA gave NVRO clearance for its SI-joint fusion device.  Elsewhere, Bloomberg reported the US dept. of Justice has opened an investigation into BA’s door plug blowout incident about whether or not the company has upheld its obligations under a Deferred Prosecution Agreement from previous wrongdoing.  After the close, FCC Chair Rosenworcel proposed a rule that would require automakers that sell internet-connected cars to comply with a telecommunication law intended to protect domestic violence survivors (from stalking and remote access to vehicles).  Finally, the NHTSA announced that STLA is recalling 338k SUV vehicles over front-end suspension parts that could become loose.

After the close, AMC, GEF, MYRG, NTNX, OKTA, PSTG, CRM, and SNOW reported beats on both the revenue and earnings lines.  Meanwhile, BBSI, HPQ, PARA, and SBGI missed on revenue while beating on earnings.  On the other side, JAZZ, STN, and TPC beat on revenue while missing on earnings.  Unfortunately, CODI, EFXT, MNST, and PARAA missed on both the top and bottom lines.  It is worth noting that NTNX and OKTA raised forward guidance.  However, PSTG, SBGI, SNOW, and TPC lowered their guidance.

Overnight, Asian markets were mixed with five exchanges in the red and seven in the green.  Shenzhen (+3.13%) and Shanghai (+1.94%) far outpaced the rest of the region while Thailand (-0.82%) was by far the biggest loser on the day.  In Europe, we see a greener picture taking shape at midday with 10 of the 15 exchanges in the green.  The CAC (-0.04%), DAX (+0.47%), and FTSE (+0.31%) lead the region higher in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a gap down to start the day.  The DIA implies a -0.31% open, the SPY is implying a -0.27% open, and the QQQ implies a -0.24% open at this hour.  At the same time, 10-year bond yields are back up to 4.307% and Oil (WTI) is just ion the green side of flat at $78.64 per barrel in early trading.

The major economic news scheduled for Thursday includes Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. PCE Price Index, Jan. Core PCE Price Index, and Jan. Personal Spending (all at 8:30 a.m.), Feb. Chicago PMI (9:45 a.m.), Jan. Pending Home Sales (10 a.m.), Fed Balance Sheet (4:30 p.m.), and three Fed speakers (Bostic at 10:50 a.m., Mester at 1:15 p.m., and Williams (8:10 p.m.). The major earnings reports scheduled for before the open include BUD, BBWI, BBY, BCO, CNQ, COMM, CPG, CRH, XRAY, DDL, DOLE, NVRI, ESAB, EVRG, GMS, HGV, HRL, IHRT, MLCO, NTES, NFE, NOMD, PZZA, PSNY, TD, and TGNA.  Then, after the close, ADSK, COO, DELL, EC, GRBK, MTZ, NTAP, PTVE, TTEC, VEEV, and ZS report. 

In economic news later this week, on Friday, S&P Global Mfg. PMI, Jan. Construction Spending, Feb. ISM Mfg. Employment, Feb. ISM Mfg. PMI, Feb. ISM Mfg. PMI Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and two Fed speakers (Bostic at 10 a.m. and Daly at 1:30 p.m.) are reported.

In terms of earnings reports later this week, on Friday, AMRX reports.

In miscellaneous news, in a surprise move, Democratic and Republican leaders from both sides of the aisle in both chambers of Congress announced they have reached a deal on the 12 different annual spending bills.  These measures cover the previous five months and the next seven months. (Better late than never, I guess.) However, to avert a partial government shutdown on Saturday, and even though they say they have agreed, both the House and Senate will need to pass another temporary stop-gap spending bill to keep the lights on until the entire House (which is where the problem is) and Senate can vote on the 12 bills.  This gives the GOP obstructionists (MAGA) in the House time to trash the deal (whose details are not known) and attempt to kill the deal.  At the moment, the agreement calls for six of the funding bills to be passed by March 8 and the other six to be passed on March 22.  However, this is one of those, “I’ll believe it when I see it…and the ink is dry” deals.

In late-breaking news, the main fire in the Texas panhandle (Smokehouse Creek fire) has now consumed 900,000 acres.  Separately, the Windy Deuce fire has burned 142,000 acres and the Vine Creek fire has charred 30,000 acres.  The toll is not yet known, but at least thousands of cattle and 100 or more homes have been destroyed.  Meanwhile, in Europe, consumer rights groups have accused META of massive and illegal (per EU law) collection and processing of user data on Thursday.  The group of 45 consumer organizations filed complaints with both national and EU-wide regulatory bodies.  The data in question can be used to infer sexual orientation, emotional state, and even the person’s susceptibility to addiction.

So far this morning, ITCL, BBWI, BBY, CM, CNQ, XRAY, DDL, NVRI, ESAB, HRL, NFE, and TD all reported beats on both the revenue and earnings lines.  At the same time, ACIW, ABEV, BUD, BCO, CRH, DOLE, NOMD, and PZZA missed on revenue while beating on earnings.  On the other side, ADV and BTSG beat on revenue while missing on earnings.  Unfortunately, CPG, EVRG, GMS, and NTES missed on both the top and bottom lines.  It is worth noting that BBWI, BBY, and NVRI lowered forward guidance. 

With that background, all three major index ETFs are retesting their T-lines (8ema) from above in the premarket. However, all are printing small, indecisive candles ahead of the PCE data. Even the direction of those T-lines is undecided this morning with SPY’s 8ema rising, QQQ’s flat, and DIA’s just rolling over. So, based on the recent data, the short-term trend remains bullish, but precariously so. Meanwhile, the longer-term strong bullish trend continues to hang on (despite being tested). In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is in its mid-range. So, both the Bulls and Bears have room to run if they can gather the momentum. However, based on the 10 Big Dog tech names, the Bears have the edge so far this morning. Nine of the 10 are red and NVDA (+0.01%) is only barely green. As mentioned above, they represent a huge portion of the market and if they move together in one direction, it’s hard for indexes to go the other way. So, unless we get surprisingly good data at 8:30 a.m., it looks like a down start to the day.

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

GDP and Fed Speakers on Tap

Tuesday saw SPY and QQQ open higher and DIA open lower.  QQQ opened 0.14% higher, QQQ gapped up 0.20%, and DIA opened down 0.07%.  From there, SPY and QQQ meandered sideways until 1 p.m.  Meanwhile, DIA sold off the first 5 minutes and then traded sideways in a very tight range, also until 1 p.m.  At that point, all three major index ETFs rallied very modestly the rest of the day.  This gave us indecisive candles in all three.  The SPY and QQQ both printed white-body small-body Hammers.  At the same time, DIA gave us a black-body, larger-body Hammer that bounced up off its T-line (8ema).   Once again, this came on well below-average volume across the board.

On the day, all 10 sectors were in the green as Utilities (+1.56%) was way out in front (by more than half of a percent) leading the way higher and Energy (+0.06%) lagged behind the other sectors.  At the same time, the SPY gained 0.19%, the DIA lost 0.27%, and the tech-heavy QQQ gained 0.24%.  VXX fell another 1.74% to close at 13.55 and T2122 climbed back up to the top of its mid-range at 78.67.  10-year bond yields climbed to 4.307% and Oil (WTI) rose 1.35% to close at $78.63 per barrel.  So, Tuesday was a blah day where the Bears had modest control early and the Bulls had modest control the last half of the day, resulting in not much change.  However, all three remain above their T-line (8ema) and the T-lines are also rising.  (Oddly, once again, IWM was the strongest of the index ETFs gapping 0.95% higher and closing up 1.39%.  

The major economic news released Tuesday included January Durable Goods Orders, which came in well below expectation at -6.1% (compared to a forecast of -4.9% and far below the December reading of -0.3%).  Later, February Conf. Board Consumer Confidence also came in low at 106.7 (versus a forecast of 114.8 and below the Jan. value of 110.9).  Finally, after the close, API Weekly Crude Oil Stocks showed a larger inventory build than planned at +8.428 million barrels (compared to a forecast for a 1.5-million-barrel build and a previous week’s value of +7.168 million barrels).

In Fed news, Fed Governor Bowman indicated that (like other Fed members) she is in no rush to cut interest rates Tuesday. Bowman said, “My baseline outlook continues to be that inflation will decline further with the policy rate held steady.”  She continued, “I will remain cautious in my approach to considering future changes in the stance of policy.”  Bowman concluded, “Reducing our policy rate too soon could result in requiring further future policy rate increases to return inflation to 2 percent in the longer run.” 

After the close, ACHC, A, BECN, BGS, BWXT, CHE, CPNG, DVN, EBAY, GO, ICUI, MASI, OVV, PR, RSG, RYAN, SPLK, UHS, and VZIO all reported beats on both the revenue and earnings lines.  Meanwhile, AGL, CRC, EXR, HY, LNW, and PARR beat on revenue while missing on earnings.  On the other side, CIVI, COMP, FSLR, and ICFI all missed on revenue while beating on earnings.  Unfortunately, ARKO, DAR, TKO, and URBN missed on both the top and bottom lines.  It is worth noting that ACHC and EXR lowered their guidance.  However, AGL, CHE, and EBAY raised forward guidance.

Click for video

In stock news, APO co-founder Black has sold $172.8 million of APO stock according to Reuters.  At the same time, WBD announced it had halted merger talks with PARA. Later, EGIO announced a 1-for-40 reverse (as of 3/1) split to keep it in compliance with NASDAQ rules.  At the same time, SONY announced it would lay off 900 employees from its PlayStation division (located in the UK).  Later, AAPL discontinued its electric car project (Titan) and shifted its focus toward AI.  This was a major multi-year project for AAPL, with 2,000 employees assigned to that project. (There was no word on whether the employees will be reassigned or laid off.) At the same time, Bloomberg reported that AAL has tilted its 100-jet order of narrowbody jets away from BA and toward EADSY (Airbus) due to BA quality problems. Later, CIVI announced it had reached a definitive agreement to repurchase 876k shares of common stock from a hedge fund at $65.54 per share.  Elsewhere, CBRE announced it has completed the acquisition of J&J Worldwide Services for $800 million plus a potential additional $250 million in 2027 (depending on earnings in the meantime).  At the same time, NTR announced it would buy back up to 5% of its outstanding shares between March 1 and Feb 28, 2025.  Later, SHC announced it would launch a secondary offering of 25 million new shares.  After the close, BMBL announced it would cut 350 jobs after the dating app forecasted weak Q1 numbers.  Also after the close, BYND said it would hike prices and “steeply reduce” costs this year even after beating earnings estimates.  (Details of the steep reduction were not provided.)

In stock legal, governmental, and regulatory news, after an outcry in Europe, MSFT’s recently announced (Monday) deal with French AI startup Mistral faces investigation with EU lawmakers telling both companies the deal likely violates EU antitrust rules. At the same time, the NHTSA announced that TM is recalling nearly 281k vehicles over unexpected movement caused by faulty software.  Later, the FDA warned patients and healthcare providers about the potentially serious risks of using HOLX devices implanted in soft tissue. At the same time, Reuters reported that the EU antitrust fine of $543 million related to the antitrust findings against the company brought by SPOT.  Later, the FDA announced that INCY had received a “priority review” designation for its treatment for GVHD. Elsewhere, AMAT received a subpoena from the SEC related to its shipments to China.  This is in addition to a subpoena from the US Dept. of Justice.  After the close, Reuters reported that SBUX has agreed to a “framework” to guide union organizing and collective bargaining to resolve dozens of pending lawsuits.  Workers United Union also announced the agreement with SBUX.  Also after the close, the Wall Street Journal reported that the US Dept. of Justice has launched an antitrust investigation into UNH.

Overnight, Asian markets were nearly red across the board.  Only South Korea (+1.04%) was in the green while Shenzhen (-2.40%), Shanghai (-1.91%), and Hong Kong (-1.51%) lewd the other 11 exchanges lower.  In Europe, we see a similar pattern taking shape with just four exchanges in the green at midday.  The CAC (-0.16%), DAX (+0.06%), and FTSE (-0.80%) lead the region lower in early afternoon trade.  In the US, as of 7:30 a.m., Futures point toward a gap lower to start the day.  The DIA implies a -0.35% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.44% open at this hour.  At the same time, 10-year bond yields backed down to 4.286% and Oil (WTI) is off 1.13% to $77.99 per barrel in early trading.

The major economic news scheduled for Wednesday includes Q4 GDP, Q4 GDP Price Index, Jan. Goods Trade Balance, and Jan. Retail Inventories (all at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), and two Fed speakers (Bostic at noon and Williams at 12:45 p.m.).  The major earnings reports scheduled for before the open include AAP, APG, BIDU, GTLS, DQ, DCI, DY, EME, EDR, GLP, IEP, ICL, IQ, KTB, KOP, LSXMK, LSXMA, LTH, NXST, NRG, ODP, PDCO, QRTEA, RY, SWX, SRCL, SHOO, TJX, BLD, VTNR, VTRS, VIPS, and VST.  Then, after the close, AMC, BMA, BBSI, SQM, CC, CODI, EFXT, GEF, HPQ, JAZZ, MNST, MYRG, NTNX, OKTA, PARAA, PARA, PSTG, CRM, SNOW, STN, and TPC report. 

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. PCE Price Index, Jan. Core PCE Price Index, Jan. Personal Spending, Feb. Chicago PMI, Jan. Pending Home Sales, Fed Balance Sheet, and three Fed speakers (Bostic at 10:50 a.m., Mester at 1:15 p.m., and Williams (8:10 p.m.).  Finally, on Friday, S&P Global Mfg. PMI, Jan. Construction Spending, Feb. ISM Mfg. Employment, Feb. ISM Mfg. PMI, Feb. ISM Mfg. PMI Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and two Fed speakers (Bostic at 10 a.m. and Daly at 1:30 p.m.) are reported.

In terms of earnings reports later this week, on Thursday, we hear from BUD, BBWI, BBY, BCO, CNQ, COMM, CPG, CRH, XRAY, DDL, DOLE, NVRI, ESAB, EVRG, GMS, HGV, HRL, IHRT, MLCO, NTES, NFE, NOMD, PZZA, PSNY, TD, TGNA, ADSK, COO, DELL, EC, GRBK, MTZ, NTAP, PTVE, TTEC, VEEV, and ZS.  Finally, on Friday, AMRX reports.

In miscellaneous news, a conservative federal judge in TX (which is why it was brought there) ruled in favor of a GOP-filed suit, holding that the 2022 $1.7 trillion US government funding bill was unconstitutional.  The reason given was that the law was passed under a pandemic-era rule that allowed US House members to vote by proxy rather than in person.  (The judge said the “quorum clause” of the constitution actually means all members must vote in person, rather than only meaning more than half need to be present to conduct business. That ruling seems dubious at best in a world with the Internet and ubiquitous Zoom meetings)  The judge also said his ruling was “limited” in that it does not block all of the spending and other provisions in the law…only the two provisions that gave pregnant workers stronger legal protections. I’m not sure how only two provisions of the massive law were unconstitutional since the whole law was approved under the same rule.  However, if upheld on appeal, this precedent would seem to open up lawsuits from other entities to challenge all of the other individual aspects of the law for the same reason. Who knows what that means since most of that money has been spent and the government has operated for more than a year under that funding bill.

In late-breaking news, the White House announced Wednesday a new executive order intended to safeguard personal data online.  The order focuses on businesses selling of personal information (you as the product) for advertising and other purposes (US police and intelligence agencies freely buy such data routinely because it is illegal to surveil Americans…but perfectly legal for phones and websites to do so and then sell the information to any and everyone who wants to buy).  While politicians from both sides of the aisle have long “expressed concern” (made political headlines) over the matter, until today, none had taken any real action on it.  (Big tech and the major phone companies, who mostly do the data collecting are massive lobbyists and political contributors directly and via dark-money super PACs.)  Details are not yet available, but I would not be surprised if there is some carve-out that allows US agencies to continue to buy such data.  Regardless, this could be a threat to META, GOOGL, AAPL, MSFT, AMZN, T, VZ, and other major tracking and data collection companies.

So far this morning, APG, DCI, EME, ICL, LTH, RY, SHOO, TJX, and VIPS reported beats on both the revenue and earnings lines.  Meanwhile, BIDU, GTLS, IQ, ODP, SRCL, and BLD reported misses on revenue while beating on earnings.  On the other side, EDR and NRG beat on revenue while missing on earnings.  Unfortunately, AAP, DQ, DY, KTB, NXST, PDCO, and VRTS all missed on both the top and bottom lines.  It is worth noting that AAP, PDCO, TJX, and VIPS lowered their guidance.  However, GTLS and DCI raised forward guidance.

With that background, it appears the market is gapping lower and retesting the T-line (8ema) in all three of the major index ETFs in the premarket. All three are also printing black body, but indecisive candles in the early session. However, at the moment, all three remain above their T-lines in the premarket. So, the short-term trend remains bullish. Meanwhile, the longer-term strong bullish trend continues to hang on (despite being tested). In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is in its mid-range, albeit at the very top of its mid-range. So, both sides of the market still have room to run if they can gather the momentum. Continue to watch those 10 Big Dog tech names. As mentioned above, they represent a huge portion of the market and if they move together in one direction, it’s hard for indexes to go the other way. Right now, nine of the 10 are red with TSLA only modestly above break-even.

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

LOW and M Beat Then Lower Guidance

The market seemed undecided on Monday.  SPY opened 0.13% higher, DIA opened up just 0.05%, and QQQ “gapped” up 0.19%.  From that point, we saw divergence as the SPY sold off very, very slowly for the rest of the day while DIA sold off until 1:40 p.m., and QQQ meandered back and forth across its gap until it recrossed the last 5 minutes of the day.  This action gave us black-bodied candles in all three major index ETFs.  The SPY gave us a big black candle that was about $0.28 from being an Evening Star. At the same time, DIA and QQQ printed black Spinning Top candles.  All of this came on very low volume (well below average) in all three major index ETFs.

On the day, six of the 10 sectors were in the red as Utilities (-1.71%) was way out in front leading the way lower and both Technology and Consumer Cyclicals (+0.16%) held up best.  At the same time, the SPY lost 0.37%, the DIA lost 0.15%, and the tech-heavy QQQ was just 0.05% lower.  VXX fell another 1.01% to close at 13.79 and T2122 fell back down further into its mid-range at 60.00.  10-year bond yields climbed to 4.278% and Oil (WTI) rose 1.43% to close at $77.58 per barrel.  So, on Monday stocks started the day on the green side of flat.  However, then the three major index ETFs diverged before all ended lower.  However, all three remain above their T-line (8ema) and the T-lines are also rising.  (Oddly, IWM gave us a strong white candle that bounced up off the T-line, gaining 0.63%.)  

The major economic news released Monday was limited to Building Permits, which came in stronger than expected at 1.489 million (compared to a forecast of 1.470 million but weaker than an upwardly revised 1.493 million from 10 days prior).  Later, January New Home Sales came in up but also lower than predicted at 661k (versus a forecast of 680k and also up from December’s 651k).  This was a 1.5% increase month-on-month after December rose 7.2% month-on-month.  

In Fed news, in his debut speech, Kansas City Fed President Schmid said Monday that there is no need to preemptively cut rates.  Schmid said, “With inflation running above target, labor markets tight, and demand showing considerable momentum, my own view is that there is no need to preemptively adjust the stance of policy.” He continued, “Instead, I believe that the best course of action is to be patient, continue to watch how the economy responds to the policy tightening that has occurred, and wait for convincing evidence that the inflation fight has been won.”  Related to reducing the Fed Balance Sheet, Schmid said “Some interest-rate volatility should be tolerated as we continue to shrink our balance sheet.”

After the close, DDS, HEI, MBC, PRIM, VLRS, WDAY, and ZM all reported beats on both the revenue and earnings lines.  Meanwhile, AES, CAPL, DORM, SBAC, and STRL missed on revenue while beating on earnings.  On the other side, CPE, ERIE, and U beat on revenue while missing on earnings.  Unfortunately, AAN, ATSG, and OKE missed on both the top and bottom lines.  It is worth noting that AAN and U lowered their guidance.  However, PRIM, SBAC, STRL, and ZM all raised forward guidance.

Click for video

In stock news, AMZN announced a new $5 billion investment in Mexico for Latin American AWS cloud services (setting up a large server farm in Mexico).  Later, VATE announced it will offer $19 million of common stock to current VATE stockholders of record on March 6 through a grant of rights to purchase.  At the same time, PPG announced it has initiated a strategic review of its architectural coating business units in the US and Canada.  Later, MU announced it has begun the mass manufacture of High Bandwidth memory (HBM3E) which is set to be integrated with NVDA’s top AI chips in Q2 2024.  At the same time, GOOGL announced plans to relaunch its Gemini AI tool in a “few weeks” after the service was pulled last week.  (Gemini bugs caused numerous inaccurate outputs including historical inaccuracies.)  Later, CENN said it was finalizing of its “redomiciling” from Australia to the US.  At the same time, AVGO sold its remote-access business unit to KKR for $4 billion.  This was part of the divestitures AVGO promised to make to secure approval for its acquisition of VMW last year.  (Side note, VMW has increased its pricing 10x per seat since the acquisition.)  Later, UNH said on Monday that the prescription outages at pharmacies last week was caused by a hack and ransomware attack from a group known as “Blackcat.”  (This is the same group that had hit MGM and CZR last year.)  At the same time, ATUS rallied 40% Monday after Bloomberg reported CHTR is considering a bid to acquire ATUS. Elsewhere, LUNR announced its moon lander mission will end today after its tipped-over landing is preventing solar panels from charging batteries.  At the same time, EXPE announced approximately 1,500 job cuts as part of a strategic restructuring that it says will cost the company between $80 million and $100 million pre-tax in 2024.

In stock legal, governmental, and regulatory news, HOTH announced it had received the Orphan Drug designation from the FDA, granting it tax credits for clinical testing, waiver of FDA fees, and an exclusive market for its HT-KIT therapy.  Later, the FTC (and eight states) filed suit to block the KR acquisition of ACI for nearly $25 billion.  The FTC lawsuit alleges the merger would eliminate competition in many markets, even with KR offering divestments.  At the same time, the US Dept. of Justice threatened to sue BRKB subsidiary PacifiCorp over its failure to cover $356 million in costs associated with the 2020 Slater wildfire that the company’s power lines caused.  Later, GOOGL ramped up its criticism of MSFT and AMZN (especially MSFT) for what it alleged are anticompetitive practices that help build and protect monopoly positions in cloud computing.  GOOGL urged the FTC and other regulators to step in to break the monopolies.  Elsewhere, a panel of experts appointed by the FAA announced a “safety disconnect” between BA management and employees.  At the same time, the US Dept. of Justice announced that DLTR has agreed to pay $41.675 million in a settlement of an FDA probe into its handling of FDA-regulated products.  Later, a subsidiary of EIX agreed to pay $80 million to the US Forest Service for costs and damages from the 2017 Thomas wildfire found to be caused by the company’s power lines.  At the same time, JBLU and SAVE urged a US appeals court to overturn a lower court ruling that blocked their $3.8 billion merger.  Later, the US Supreme Court heard arguments in a case related to laws in FL and TX meant to restrict META, GOOGL, and other social media companies in how they moderate content.  At the same time, US Sec. of Commerce Raimondo said Monday that the government had received more than double the $28 billion chips grants it plans to award.  She said they have received more than $70 billion in grant requests.  SCLX and SRNEQ settled with VTPX.  Under the agreement, VTPX will pay a series of payments in 2024 and will also pay 6% royalties through the end of relative patents.  Both sides also provided mutual releases of all claims. 

Overnight, Asian markets were mixed but leaned toward the green side, led by China.  Shenzhen (+2.24%), Shanghai (+1.29%), and Hong Kong (+0.94%) paced the gains while South Korea (-0.83%), Taiwan (-0.49%), and Singapore (-0.44%) led the losses.  In Europe, we see bourses leaning toward the red side, with nine of the 15 exchanges underwater at midday.  The CAC (+0.09%), DAX (+0.45), and FTSE (-0.06%) lead the region on volume in early afternoon trade.  In the US, as of 7:30 a.m., Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.04% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.28% open at this hour.  At the same time, 10-year bonds are down a bit to 4.27% and Oil (WTI) is off a quarter of a percent to $77.37 per barrel in early trading.

The major economic news scheduled for Tuesday includes Jan. Durable Goods Orders (8:30 a.m.), Feb. Conf. Board Consumer Confidence (10 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.).  The major earnings reports scheduled for before the open include AHCO, AEP, AMT, AZO, BMO, BNS, CRI, CLVT, CBRL, DK, HSIC, SJM, JLL, DRS, LOW, M, EYE, NCLH, PRGO, PNW, RCM, SEE, SRE, and STGW.  Then, after the close, ACHC, A, AGL, ARKO, BGS, BECN, BWXT, CRC, CHE, CIVI, COMP, CPNG, DAR, DVN, EBAY, EXR, FSLR, GO, ICFI, ICUI, LNW, MASI, OVV, PARR, PK, PR, RSG, RYAN, SPLK, TKO, UHS, URBN, and VZIO report. 

In economic news later this week, on Wednesday, Q4 GDP, Q4 GDP Price Index, Jan. Goods Trade Balance, Jan. Retail Inventories, EIA Weekly Crude Oil Inventories, and two Fed speakers (Bostic at noon and Williams at 12:45 p.m.) are reported.  On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Jan. PCE Price Index, Jan. Core PCE Price Index, Jan. Personal Spending, Feb. Chicago PMI, Jan. Pending Home Sales, Fed Balance Sheet, and three Fed speakers (Bostic at 10:50 a.m., Mester at 1:15 p.m., and Williams (8:10 p.m.).  Finally, on Friday, S&P Global Mfg. PMI, Jan. Construction Spending, Feb. ISM Mfg. Employment, Feb. ISM Mfg. PMI, Feb. ISM Mfg. PMI Price Index, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-year Inflation Expectations, Michigan 5-year Inflation Expectations, and two Fed speakers (Bostic at 10 a.m. and Daly at 1:30 p.m.) are reported.

In terms of earnings reports later this week, on Wednesday, AAP, APG, BIDU, GTLS, DQ, DCI, DY, EME, EDR, GLP, IEP, ICL, IQ, KTB, KOP, LSXMK, LSXMA, LTH, NXST, NRG, ODP, PDCO, QRTEA, RY, SWX, SRCL, SHOO, TJX, BLD, VTNR, VTRS, VIPS, VST, AMC, BMA, BBSI, SQM, CC, CODI, EFXT, GEF, HPQ, JAZZ, MNST, MYRG, NTNX, OKTA, PARAA, PARA, PSTG, CRM, SNOW, STN, and TPC report.  On Thursday, we hear from BUD, BBWI, BBY, BCO, CNQ, COMM, CPG, CRH, XRAY, DDL, DOLE, NVRI, ESAB, EVRG, GMS, HGV, HRL, IHRT, MLCO, NTES, NFE, NOMD, PZZA, PSNY, TD, TGNA, ADSK, COO, DELL, EC, GRBK, MTZ, NTAP, PTVE, TTEC, VEEV, and ZS.  Finally, on Friday, AMRX reports.

In miscellaneous news, Reuters reported Monday that NVDA options account for a full 25% of options premiums now as the AI craze has gained steam.  NVDA options trade $3 billion in options premium per day on average at this point.  Elsewhere, the US Dept. of Commerce restricted exports to Canadian firm Sandvine for allegedly helping the Egyptian government target human rights activists.  Overseas, Japan announced January CORE CPI inflation of 2% on Tuesday (right at the Bank of Japan’s 2% target).  This was slightly above the forecasted 1.9% year-on-year number.  The headline number remained at 2.2% year-on-year, down sharply from 2.6% in December.  In personnel news, JPM hired the head of Banking from their direct competitor C.  At the same time, the Walton family sold roughly $1.5 billion of WMT stock in Q4 while the stock was near record highs.  Finally, speaking of JPM, CEO Jamie Dimon said Monday that “AI is the real deal (not a fad) and will make a real difference in the economy.”  Perhaps more importantly, he said the commercial real estate problem will be contained to “just pockets of the sector” as long as the US avoids a recession.  He went on to say that most property owners can handle the current levels of stress and that “lower valuations tied to interest rates is not a crisis, it’s kind of a known thing.”

In geopolitical news, Sweden officially joined NATO after finally being approved by the Putin-loving Hungarian Parliament.  Meanwhile, in Ukraine, the first known destruction of an American-supplied M1A1 tank was recorded in the Avdiivka area (front-line in Eastern Ukraine).  Meanwhile, in Russia, there was another “mysterious death” of a former Russian military officer and prominent Putin critic (who was famous for leading the “little green men” who invaded and annexed Donbas). Igor Girkin (known as Strelkov) “apparently hung himself” in his cell. (Strelkov, a wanted war criminal himself, criticized Putin not for the invasion of Ukraine, but for the invasion being inept because it was being executed by corrupt Putin cronies who are not qualified).  Meanwhile, French President Macron said Monday that sending Western ground troops to Ukraine had not been ruled out.  The statement was made to the press after a meeting of European heads of state.  Tuesday, German Chancellor Scholz walked back the idea by saying there was “no consensus over deploying ground troops” among European leaders and NATO officials.  This was probably all rhetoric, but with US support of Ukraine frozen the probability of a broader war increases as Russia is making small but significant gains of ground again.

So far this morning, AHCO, AMT, AZO, BNS, SJM, JLL, LOW, M, TIGO, EYE, and SEE all reported beats on both the revenue and earnings lines.  Meanwhile, CRI, CLVT, PRGO, and SRE missed on revenue while beating on earnings.  On the other side, DK, NCLH, and FOUR beat on revenue while missing on earnings.  Unfortunately, BMO, HSIC, RCM, and STGW missed on both the top and bottom lines.  It is worth noting that CRI raised its guidance.  However, LOW and M both lowered guidance.

With that background, it appears the market is on the green side of undecided this morning. All three major index ETFs gapped lower to start the premarket but all three are also putting in white-bodied candles so far in the early session. The QQQ in particular is strong. All three remain above their T-lines in the premarket. So, the short-term trend remains bullish. Meanwhile, the longer-term strong bullish trend continues to hang in (despite being tested). In terms of extension, none of the three major index ETFs is too far from its T-line and the T2122 indicator is in its mid-range. So, both sides of the market have room to run if they can gather the energy to do so. Continue to watch those 10 Big Dog tech names. As mentioned above, they represent a huge portion of the market and if they move together in one direction, it’s hard for indexes to go the other way. Right now, eight of the 10 are green with the two red ones very, very modestly below break-even.

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.

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