Markets gapped down Friday, opening 0.62% lower in the SPY, down 0.60% in the DIA, and down 0.96% in the QQQ.  However, that was the last we saw of the Bears on the day.  The Bulls met the gap down with a slow, steady rally that recrossed the gap and hit the highs of the day at about 3:50 pm.  The last 10 minutes saw modest profit-taking in all three major index ETFs.  This action gave us white-bodied candles with essentially no lower wick and a small upped wick in the SPY, DIA, and QQQ.  None of the index ETFs came close to challenging their T-line and only the DIA came near its 50sma.  This all happened on above-average volume in the QQQ, and a bit below-average volume in the SPY and DIA.

On the day, seven of the 10 sectors were in the green with Energy (+0.84%) out front leading the way higher while Communications Services (-0.42%) lagging behind the other sectors.  At the same time, the SPY gained 0.05%, DIA gained 0.02%, and QQQ lost 0.13%.  VXX fell 2.54% to close at 25.71 and T2122 climbed but remains deep into the oversold area at 8.04.  10-year bond yields recovered during the day but still fell to 4.251% while Oil (WTI) climbed 1.26% to close at $81.40 per barrel.  So, the Bears gapped us down only to be met by all-day buying.  This might have been profit-taking after a strongly bearish week, which saw SPY down 2.05%, DIA down 2.23%, and QQQ down 2.21%.  (The last 10 minutes might also be related to options expiration.)       

There was no major economic news reported Friday.  However, the Fed did publish data indicating that US banks did reduce lending in the week ending August 9.  Overall bank credit fell from $17.25 trillion to $17.23 trillion.  This was the second consecutive weekly drop.  This included a decline in “loans and leases” falling from $12.15 trillion to $12.13 trillion and industrial loans also fell from $2.75 trillion to $2.74 trillion.  At the same time, Reuters released a survey of economists (taken August 14-18) found that a strong majority feel the Fed is done raising rates.  The same poll found a slim majority believing the FOMC will not start cutting rates until at least the end of March.  99 of 110 economists say the Fed will not hike rates in September, which is in line with current Fed Futures that show 89% of traders agree with the economists. 

Related to foreign attempts to unseat the Dollar as the world’s default (and reserve) currency. The BRICS group will hold a meeting in South Africa this week.  Ahead of this, the Fed released research showing that in the 20 years ending in 2019, 95% of all international trade in the Americas region was invoiced in Dollars.  The same goes for 74% of Asian region trade and 79% of trade in the rest of the world (not including the EU, which uses the Euro).  In addition, coming into this week’s BRICS meeting, there’s no obvious competitor to the Dollar yet.  China’s Yuan is not a reliable candidate due to the fact the Chinese will not let their currency freely float with markets.  Other BRICS countries don’t have the economic scale to make their currencies feasible as a Dollar alternative.  In addition, trading US dominance of world markets for the dominance of China or India is something that would take a lot of thinking, convincing, and guts.  The British would love to reclaim global reserve currency status for the pound, but they are too small economically and have massive historical baggage from their colonial past. This leaves the Euro, which is seen as too politically fragmented (especially related to their various economic and fiscal policies) and are unlikely to be supported by China and India.  The last potential substitute is that there has been some talk of a gold-backed digital currency. However, that would take a massive effort and coordination to create a completely new currency, with the problem of managing the various country’s gold reserves (such that participants trust each other) on top of the creation and coordination of an agreed safe cryptocurrency (which many of the BRIC countries have opposed to date). The bottom line is just ahead of the BRICS meeting in Johannesburg, no public progress has been made on others finding a replacement for the US Dollar.

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In stock news, Reuters reported Friday that some of the world’s largest consumer goods companies are already experimenting with using artificial intelligence to develop marketing and advertising content.  UL, NSRGY (Nestle), and MDLZ were among the examples mentioned and the article also said they would be using data from WMT, AMZN, and KR to train their AI models. On Saturday, TSLA began notifying employees whose personal information had been disclosed in a data breach that happened back in May.  (TSLA is only notifying employees because the AG of ME posted that it found two former TSLA employees had misappropriated that data in lawsuits filed Friday.  The breach affected nearly 76,000 employees’ data.)

In stock legal and regulatory news, during the day Friday, US Senator Vance from OH (headquarters location of CLF which made a bid for X) again publicly urged X not to even entertain offers from foreign buyers.  As you will remember, CLF was the first bidder to buy out X, followed by private company Esmark, and then MT (a Luxembourg-based company).  Vance said he would pursue ways to ensure the company “stayed American.”  Then, after the close Friday, the FDA approved a new dosage of REGN’s Eylea eye disease drug.  On Saturday, GM announced it would cut its Cruise Robotaxi fleet in San Francisco by 50% temporarily.  This comes hours after the CA Dept. of Motor Vehicles announced it has opened an investigation into several Cruise-involved crashes within the last week.  After the investigation, GM will need to address the findings prior to resuming full-scale operations.  (This reduced the number down to 50 Cruise robotaxis operating during the day and 150 in the evenings.)

In China market news, the country’s securities regulators announced a package of measures aimed at propping up their stock markets.  These include cutting trading costs, changing rules to encourage share buybacks, extending trading hours, and increasing financial standards (which would, over time, increase the attractiveness and health of listed companies).  The regulator spokesman answered a question by saying they did not know yet whether a reduction in stamp duties (fees for loans, leases, and securities trades) would take place as had been discussed recently.  Most analysts applauded the moves but said it would not be anywhere near enough to overcome major concerns over the Chinese economy. Then to top this off, Monday the Chinese Central Bank cut its one-year loan rate by less than expected (down 10 basis points instead of the 15 basis-point cut that was expected (down to 3.45%). It also made no changes to the 5-year loan rate and the analyst consensus was that they would reduce that rate by 15 basis points. Most importantly, the PBOC did nothing at all to the long-term mortgage rates (which is what the property sector and public felt needed relief). As a result, the Chinese stock markets were not impressed with these actions and are still hoping for more and bigger government stimulus.

After the close Friday, PANW missed on revenue while beating on earnings.  That beat was a surprise since the market had been very worried since the company said they would announce earnings after the market close on a Friday.  (That was announced August 2 and the stock was down almost 16% since that timing was released.)  PANW was up as much as 10% in after-hours trading following the report.

Overnight, Asian markets were mixed.  Hong Kong (-1.82%), Shenzhen (-1.32%), and Shanghai (-1.24%) led the region lower.  Meanwhile, Thailand (+0.44%), India (+0.43%), and Japan (+0.37%) paced the gainers.  However, in Europe, we see green across the board at midday.  The CAC (+1.18%), DAX (+0.74%), and FTSE (+0.53%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.34% open, the SPY is implying a +0.49% open, and the QQQ implies a +0.63% open at this hour.  At the same time, 10-year bond yields are spiking back up to 4.298% and Oil (WTI) is jumping up 1.32% to $82.32 in early trading.

There is no major economics news scheduled for Monday.  There are also no major earnings reports scheduled for before the opening bell.  However, after the close, FN, LU, NDSN, and ZM report.

In economic news later this week, on Tuesday we get July Existing Home Sales and API Weekly Crude Oil Stocks Report.  We also hear from Fed members (Goolsbee twice and Bowman).  Then Wednesday, Building Permits, Preliminary August S&P US Mfg. PMI, Preliminary August S&P Global Composite PMI, July New Home Sales, and EIA Crude Oil Inventories are reported.  On Thursday, we get July Durable Goods Orders, Weekly Initial Jobless Claims, Fed Balance Sheet, and Bank Reserve Balance with the Fed.  The Central Bankers Jackson Hole Conference also starts.  Finally, on Friday, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan Consumer Inflation Expectation, and Michigan Consumer 5-year Inflation Expectations.  Fed Chair Powell also speaks and the Jackson Hole Conference continues.

In terms of earnings reports, on Tuesday, BIDU, BJ, CSIQ, CTRN, COTY, DKS, IQ, LOW, M MDT, SCSC, LZB, TOL, and URBN report.  Then Wednesday, we hear from ANF, AAP, ADI, BBWI, DY, FL, GRAB, KSS, LANC, PTON, WSM, ADSK, GES, NTAP, NVDA, SNOW, and SPLK report.  On Thursday, BURL, DLTR, NTES, WOOF, RY, TD, WB, GPS, INTU, MRVL, JWN, ULTA, and WDAY report.  Finally, on Friday, there are no earnings reports scheduled.

In miscellaneous news, US Treasury Bond yields were on a massive roller-coaster last week. Not only did the 10-year bond yield close at its highest level since 2007, but they also then crashed by the largest amount in history.  Bloomberg quoted a bond market analyst as saying the reason is pretty simple.  He said, “Given rising real yields and ambitious valuation levels in particular for US stocks, the risk-reward looks better for bonds.”  Elsewhere, the US Dollar booked its fifth straight week of gains (its longest winning streak in 15 months).  Finally, the drought in Panama is causing more supply chain problems.  Previously, the draft depths of ships had been reduced.  Now, the number of ships allowed to transit the Panama Canal has been reduced from 36 to 32 per day.  The wait time, prior to transit, for the largest ships has risen to 17 days as ships stack up (and partially unload to reduce their draft). 

In late-breaking news, Bloomberg released investor survey data (from 602 professional and retail traders they surveyed). The data shows that two-thirds believe it is still unclear that the Fed has done enough to fight inflation. However, more than half also say traditional Fed indicators (like the job market and price index data) will not be the driver when the Fed moves to cut. Instead, they feel the driver will be financial market turmoil that will prompt a Fed rate cut. At the same time, about 80% of respondents say they expect a recession in the EU within the next 12 months. I am not sure how this survey squares with the current Fedwatch Futures data that shows 89% of traders see no rate hike in September and only about a third even expect another hike at all in 2023.

With that background, it looks like the Bulls are in control so far in the premarket. All three major index ETFs show a premarket gap up and then are giving us white-bodied candles so far in the early session. However, none of them are close to retesting their T-line (8ema) yet. The short-term trend remains bearish with all three well below their T-line. Of course, the long-term trend is still hanging on to a bullish course but it has been pushed by the Bears over the last three weeks. As far as extension goes, the premarket move gets rid of any concern about overextension below the T-line (8ema). Meanwhile, the T2122 indicator remains quite oversold, but it is not pegged to the bottom of its range. So, we have room to move either direction, but are still due for a pause or bounce soon. Just remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet.

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 absolutely 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 money is 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

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

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

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

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

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

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

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

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

On Thursday, markets started the day a bit higher (gapping up 0.24% on the SPY, up 0.33% in the DIA, and up 0.39% in the QQQ).  However, that was essentially the last we saw of the Bulls for the day.  After that open, the DIA managed to grind sideways in a very tight range until 11 am.  Then it sold off in waves, closing on the lows.  After its gap, the SPY sold off slowly until noon, had a very weak one-hour bounce, and then also sold off all the way into the close.  QQQ immediately sold off harder than the other two major index ETFs for the first hour.  At that point, it modestly bounced until 1 pm before it also sold off hard the rest of the day.  This action gave us large black-bodied candles with tiny wicks in the SPY, DIA, and QQQ.

On the day, nine of the 10 sectors were in the red again with Consumer Cyclical (-1.40%) once more leading the way lower and Energy (+0.83%) holding up much better than any other sector.  At the same time, the SPY lost 0.76%, DIA lost 0.78%, and QQQ lost 1.09%.  VXX gained another 4.81% to close at 26.38 and T2122 dropped even further into the oversold area at 2.86.  10-year bond yields continued to climb to 4.284% while Oil (WTI) climbed to close at $80.39 per barrel. This all took place on slightly less-than-average volume again across all three major index ETFs.  So, the Bulls opened us higher.  However, after that, it was all Bears all the time the rest of the day, even picking up speed in the afternoon.          

The major economic news reported Thursday included Weekly Initial Jobless Claims that came in just a bit below expectation at 239k (compared to a forecast of 240k and the prior week’s 250k reading).  At the same time, the Philly Fed Manufacturing Index was reported dramatically higher than predicted at +12.0 (versus the -10.0 forecast and even further above the July value of -13.5). However, the Philly Fed Employment Index came in well below anticipated at -6.0 (compared to a forecast of -0.7 and even the July reading of -1.0).  Then, after the close, the Fed’s Balance Sheet showed another reduction of $62 billion, down to $8.146 trillion from $8.208 trillion.

The NY Fed released survey results Thursday afternoon.  The survey found that, at least as of just before the late-July Fed meeting, big banks and money managers believed the July rate hike would be the last one for this tightening cycle.  The survey also showed that most “Primary Dealers” believe we will see Fed rate cuts starting in April, while money managers think the cuts will begin in March of 2024.  Furthermore, the big banks expect the Fed to stop reducing its Balance Sheet when it reaches $6.75 trillion (now at $8.146 trillion as reported above and falling at a rate of about $50-$75 billion per week).

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In stock news, Blue Shield of CA made major waves by announcing it will stop using CVS to manage its pharmacy benefits program and will instead work with AMZN and other firms.  (CVS lost 8.14% on the day on this news.)  Elsewhere, PFE announced that its updated COVID-19 vaccine does show “neutralizing activity” against the Eris subvariant in addition to the (still dominant) Omicron variant.  Not to be outdone, MRNA announced the results of an initial study which showed their updated COVID-19 vaccine is “effective” against Omicron, Eris, and Fornax variants.  In the afternoon, troubled electric carmaker MULN launched a $25 million stock buyback program in an effort to boost the stock price and avoid being delisted.  At the same time, private trucking company Estes Express submitted a $1.3 billion bid to purchase the freight terminals of bankrupt YELL.  Meanwhile, F and its partners (a consortium of South Korean firms) announced they will build a $900 million battery factory in Quebec.  In the late afternoon, Bloomberg reported that GS is on a hiring spree, having hired several hundred new staff to address concerns identified by the Fed.  Twitter (“X”) was in trouble yet again Thursday after ads from ADBE, GILD, and several other brands were run beside “pro-Nazi” content.  ADBE and GILD have suspended advertising on X after the latest in the social media platforms series of blunders.

In stock legal and regulatory news, the union for striking Hollywood Writers sent a letter urging the FTC to investigate DIS, AMZN, and NFLX on antitrust grounds.  The Writers Guild of America told FTC Chair Khan that those three companies have amassed too much power in the streaming media industry and are now effectively an oligopoly.  At the same time, GOOGL’s YouTube unit defeated a racial bias lawsuit that had been filed by black and Hispanic content creators.  A US District Judge in San Francisco threw out the case, saying the claims did not come close to suggesting discrimination.  Elsewhere, Reuters reported that US Customs has begun increased inspections of car parts being imported from China in an effort to identify and stop the import of any products produced by supply chains involving forced (Uyghur) labor.  At midday, TSLA notified Core Lithium it will sue the Australian miner in seven days unless the two sides reach a mutual agreement. This comes after the two companies failed to reach an agreement on supply quantities and prices prior to a mutually agreed prior date.  Late in the day, C was subpoenaed by the US House Judiciary Committee (GOP) over alleged data sharing with the FBI without the appropriate legal process prior to that disclosure.  This is part of the effort by the GOP members of the committee to help the January 6 defendants by using subpoena power to provide extra discovery for their defenses. 

After the close, AMAT, GLOB, KEYS, and ROST reported beats on both the revenue and earnings lines.  However, FTCH missed on both the top and bottom lines.  It is worth noting that AMAT and ROST raised forward guidance.  On the other side, KEYS and FTCH lowered their guidance. 

Overnight, Asian markets were nearly red across the board with only Australia (+0.03%) barely hanging on to green.  Hong Kong (-2.05%), Shenzhen (-1.75%), and Shanghai (-1.00%) led the region lower.  In Europe, we see a similar picture taking shape at midday with only Russia (+0.64%) appreciably in the green.  Meanwhile, The CAC (-0.81%), DAX (-0.77%), and FTSE (-0.80%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are also pointing to a red start to the day.  The DIA implies a -0.18% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.61% open at this hour.  At the same time, 10-year bond yields are down sharply to 4.223% and Oil (WTI) is off a quarter of a percent to $80.19 per barrel in early trading.

There is no major economics news scheduled for Friday.  The major earnings reports scheduled for before the opening bell include DE, EL, VIPS, XPEV, and PANW.  Then, after the close, there are no major reports scheduled.

So far this morning, DE and EL reported beats on both the revenue and earnings lines.  Meanwhile, VIPS missed on revenue while beating on earnings.  However, XPEV missed on both the top and bottom lines.  It is worth noting that DE raised its forward guidance while EL, VIPS, and XPEV all lowered their guidance.

In miscellaneous news, JPM reported Thursday that hedge funds have slowed down their exit from value and small-cap stocks in the last month.  The study said the flow of funds moving from value to growth stocks in the last month (as “AI fever” hit) has now drawn mostly ended.  This report seems reasonable as the “high growth” QQQ names are down 6.54% since the first of the month.  Elsewhere, China’s largest developer and the world’s most heavily indebted real estate company, China Evergrande, filed for Chapter 15 bankruptcy protection in NY on Thursday.  (Chapter 15 is the foreign entity equivalent to Chapter 11.)  Finally, the Texas electric grid operator (ERCOT) issued a voluntary power conservation request for Thursday, saying it expected to hit its tenth record high demand of the summer in the late afternoon and evening.  NRG (which also serves parts of TX) also requested customer electric conservation for the same reason. 

In late-breaking news, Bitcoin plummeted 9% between 5:30 pm and 5:35 pm Thursday night.  The news came a few hours after SpaceX disclosed it had written down its Bitcoin holdings by $373 million.  The main cryptocurrency recovered about half of the losses by 9:30 pm.  Elsewhere, Reuters reported that last night President Biden approved the sending of F-16 fighters from Denmark and the Netherlands to Ukraine.  These planes will eventually be replaced by F-35 jets from LMT.

With that background, it looks like the Bears are still in control so far in premarket. We see black-body candles trading near the lows of the early session in all three major index ETFs at this point. The trend remains bearish with all three below their T-line (8ema). QQQ and DIA are getting close to their next potential support level this morning. However, SPY still has air below it until it reaches potential support. Of course, the long-term trend is still hanging on to a bullish course but it is being pushed hard by the Bears over the last three weeks. As far as extension goes, we are getting extended below the T-line (8ema) in al three with the SPY and QQQ being especially stretched. The T2122 indicator also remains very oversold, but not yet quite pegged to the bottom of its range. So, we are do for a pause or bounce soon. However, remember the market can remain too extended a lot longer than we can remain solvent betting on a reversal that has not happened yet. Also keep in mind that this is Friday, payday. So, take some profits off the table and prepare your account for the weekend news cycle by lightening up, hedging, or buying some insurance for your positions.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets started the day just on the Bearish side of flat (gapping down 0.10% in the SPY, down 0.13% in the DIA, and down 0.13% in the QQQ).  At that point, we saw a modest divergence with DIA rallying sharply for 20 minutes to reach the highs of the day before slowly meandering back down the rest of the day.  Meanwhile, the SPY and QQQ meandered sideways with a very modest Bullish trend until shortly after 11 am.  Then the SPY and QQQ sold off briskly until 1 pm and ground sideways until 3 pm before resuming their move lower.  All three of those major index ETFs went out very near their lows of the day.  This action gave us black-bodied candles with upper wicks in all three. 

On the day, nine of the 10 sectors were in the red with Consumer Cyclical (-1.25%) leading the way lower and Utilities (+0.26%) being the only sector to hang on to the green territory.  At the same time, the SPY lost 0.73%, DIA lost 0.53%, and QQQ lost 1.06%.  VXX gained 1.61% to close at 25.17 and T2122 dropped slightly, further into the oversold area at 5.54.  10-year bond yields continued to climb to 4.27% while Oil (WTI) was down 2.22% to close at $79.19 per barrel. This all took place on less-than-average volume again across all three major index ETFs.  So, the Bears put in some work, following through to the downside after a tepid early attempt to reverse the downtrend by the Bulls.          

The major economic news reported Wednesday included Preliminary July Building Permits, which came in slightly below expectations at 1.442 million (compared to a forecast of 1.463 million and a June reading of 1.441 million).  On a month-on-month basis, this was actually a +0.1% move (versus a forecast of -1.7% and June’s 3.7% fall).  At the same time, July Housing Starts were reported above the predicted amount at 1.452 million (compared to the 1.448 million forecast and the June value of 1.398 million).  On a month-on-month basis, that was a strong +3.9% (versus a forecast of +2.7% and vastly better than June’s -11.7%).  Later, July Industrial Production was a matter of what timeframe you are considering.  On a month-on-month basis, Industrial Production rose more than anticipated at +1.0% (compared to a forecast of +0.3% and June’s 0.80% decline).  However, on a year-on-year basis, July Industrial Production was a bit worse than expected at -0.23% (versus a -0.10% forecast but still significantly better than June’s 0.78% decline).  At midmorning, the EIA Weekly Crude Oil Inventory saw a much bigger drawdown than predicted at -5.960 million barrels (compared to a forecast of -2.320 million barrels and far worse than the prior week’s inventory build of 5.851 million barrels).  The EIA also said that US Oil Production reached a new three-year high of 12.7 million barrels per day on average produced last week.

The July Fed Meeting Minutes came out Wednesday.  They showed a divided FOMC, with “some” members citing the risks of pushing rates too far even as “most” members still prioritizing the fight against inflation over the potential for economic harm.  For example, “a couple” participants called for leaving rates unchanged again in July.  Still, the vote was unanimous to raise a quarter point.  Later, the committee discussed risk management steps that might bear on future rate decisions.  In summary, the minutes showed the group was committed to following the course they had been indicating to markets for some time.  However, at least the written verbiage they want to put out will continue to say everything is “data dependent.”  With that said, they may have tipped their hand as to how the group is leaning when it was agreed that future moves will be dictated by the data which will “help clarify the extent to which the disinflation process was continuing.”  In addition, both staff economists and the committee members now seem to see a potential “soft landing” taking shape.

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In stock news, GM invested $60 million in another battery startup (Mitra Chem), which specialized in using AI to optimize the design and creation of lithium-ion battery parts.   Elsewhere, Bloomberg reported that BAESY is in talks to acquire BALL’s aerospace division for more than $4 billion.  At the same time, MULN announced that it will debut its ultra-high-performance FIVE RS crossover vehicle on August 20.  (The FIVE RS will reportedly do 0-60mph in less than 2 seconds and will have a top speed over 200mph.)  Later, Reuters reported that MT is now considering entering the bidding for X and has brought in investment bankers to help prepare an offer.  After the close, BX (along with a private company and Canada’s second-largest pension fund) struck a deal with BAC. The deal will allow them to buy $1.5 billion worth of solar and wind plants to capitalize on the 2022 Biden green energy funding in the Inflation Reduction Act.  As part of the deal, a private company (Invenergy Renewables) will sell BAC $580 million of tax credits and put the money toward 14 projects being led by AEP.  Overnight, the Wall Street Journal reported that GOOGL’s Health Science unit (Verily) is planning more cost-cutting after losing more money than expected in the last year.  The details are unknown but Verily laid off 200 workers and discontinued some products earlier this year.  At the same time, Reuters reports that TSN is now planning to sell its Chinese poultry business according to three sources.  That unit has $1.1 billion in annual sales revenue.  Also overnight, BAESY did agree to buy BALL’s aerospace unit but for a higher-than-expected $5.55 billion in cash.  Finally, early today Reuters reported that STLA is investing more than $100 million in CA lithium extraction company Controlled Thermal Resources.  (BRKB has struggled to extract lithium in the same area due to large concentrations of silica in the brine from which lithium is extracted.  Controlled Thermal has the technology to remove the silica and other undesirable elements prior to the extraction process.)

In stock legal and regulatory news, Bloomberg reported that V is facing an investigation by the Dept. of Justice over how much it charges merchants for the technology used to safeguard cardholder data.  (That service is called “tokenization” and it replaces the card number used with a computer-generated token.)  The DOJ is investigating the validity of charging merchants more for not using the new tokenization service it offers.  (MA reached a settlement in December with the FTC over the same practice the DOJ investigating V over.)  At the same time, a lawsuit was filed against SBGI, by its bankrupt subsidiary, accusing SBGI of siphoning off $1.5 billion from the bought-out firm, causing the bankruptcy.  Elsewhere, INTC announced it has abandoned the proposed purchase of TSEM after being unsuccessful in getting Chinese authorities to approve the deal.  As a result of killing the deal, INTC owes TSEM $353 million.  At the same time, the NHTSA announced that TM is issuing a recall for 168k 2022-2023 hybrid pickup trucks over a potential fuel leak fire hazard.  In Europe, the Czech government passed a law that will charge multinationals a 15% minimum profit tax for companies with greater than $817.50 million in sales in two of the last four years.  (This is aimed at preventing multinationals from moving profits to a country of the least taxes.)  Back in the US, the state of TX approved the TSLA standard for charging networks in that state to qualify for federal funds.  Meanwhile, officials from seven states wrote to FTC Chair Khan opposing KR’s proposed $24.6 billion acquisition of ACI.  At the same time, Reuters reported that ALL has agreed to pay $90 million to settle a class action suit brought by shareholders who had accused the insurer of lowering underwriting standards (poor risk management) to boost sales growth.  At the close, the FDA announced it has approved a bone disorder treatment from IPSEY.  The drug will have an estimated cost of $400,000 per year and this gives the company a lead over REGN which has a treatment for the same disease still listed as experimental.  After the close, 16 people who witnessed the 2022 Buffalo NY grocery store mass shooting filed suit against three firearms retailers and GOOGL (where the defendant live-streamed the shooting on YouTube).  Also after the close, the FTC approved the EQT acquisition of QMCO for $5.2 billion (announced in September 2022).

After the close, A, HRB, JKHY, NU, and LRN all reported beats on both the revenue and earnings lines.  However, SQM missed on both the top and bottom lines. It is worth noting that A also lowered its forward guidance. So far this morning, JD, TCEHY, and TJX reported beats on both the revenue and earnings lines.  Meanwhile, EAT, PFGC, and TGT missed on revenue while beating on the earnings line.  It is worth noting that TGT cut its full-year guidance.

Overnight, Asian markets were mixed but leaned toward the red side.  Shenzhen (+0.61%), Thailand (+0.61%), and Taiwan (+0.42%) led the gainers.  Meanwhile, Malaysia (-1.06%), New Zealand (-0.95%), and Australia (-0.68%) paced the losses.  However, in Europe, the bourses are leaning strongly to the downside at midday.  The breadth of losses is wide with Finland (+0.31%) being the only appreciable green while the CAC (-0.05%), DAX (-0.07%), and FTSE (-0.13%) are typical of modest losses and lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.27% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.18% open at this point.  At the same time, 10-year bond yields are climbing again at 4.302% and Oil (WTI) is 1.12% to $80.25 per barrel in early trading.

The major economics news scheduled for Thursday includes Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and Philly Fed Mfg. Employment (all at 8:30 am), and the Fed Balance Sheet (4:30 pm).  The major earnings reports scheduled for before the opening bell include ARCO, BILI, DOLE, NICE, TPR, and WMT.  Then, after the close, AMAT, FTCH, GLOB, KEYS, and ROST report.

In economic news later this week, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, the National Futures Assn. approved COIN to sell crypto futures to us investors on Wednesday.  (75% of all global cryptocurrency transactions are done using futures.  However, US investors have not been able to participate in that market until this approval.)  Meanwhile in Washington, as Congress headed home for summer recess there was no movement on the Appropriations bills, which could lead to a government shutdown.  However, an interesting development was hinted at.  House Speaker McCarthy floated the idea of a continuing resolution, kicking the can down the road until December or January.  Democrats, especially in the Senate, were very supportive of the idea.  The “why?” is the interesting part.  Speculation is that some people believe pushing off the decisions until later may see legal developments having weakened one faction’s support from the base and made them more amenable to compromises.  It’s pure speculation, but it might make sense since nothing else is likely to change between the two sides whether the deadline is in 30 days or five months. 

So far this morning, BILI, NICE, and WMT all reported beats on both revenue and earnings.  Meanwhile, DOLE missed on revenue while beating on earnings.  However, TPR and ARCO missed on both the top and bottom lines.  It is worth noting, the BILI and TPR have lowered their forward guidance.  At the same time, WMT raised its forward guidance.

With that background, it looks like markets are looking to give us a modest gap-up, but indecisive start to the morning. The SPY and QQQ are giving us the strongest (white-bodied) premarket candles but that is not saying much. The trend remains bearish with all three major index ETFs below their T-line (8ema). None of the three major index ETFs have a potential support level immediately below at this moment. Of course, the long-term trend is still hanging on to a bullish course but it is being pushed by the Bears over the last three weeks. As far as extension goes, we are starting to get a little bit extended below their T-line (8ema) and the T2122 indicator remains very oversold, but not yet quite pegged to the bottom of its range. So, both sides have some slack to work with. However, the Bulls have much more room to run and we may be in need of a pause or pullup.

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 absolutely 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 money is 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

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

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

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

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

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

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

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

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

Tuesday saw markets gap down again with SPY opening down 0.44%, DIA opening down 0.45%, and QQQ opening down 0.32%.  After that open, the Bears were able to follow through to the downside for the first hour.  At that point, all three major index ETFs meandered sideways in waves not far up off the lows until 3 pm.  From there, all three sold off in the last hour, reaching new lows for the day.  This action gave us gap-down, large-body, black candles in all three major index ETFs.  DIA printed what can easily be seen as an Evening Star signal that broke through the recent support level.  Meanwhile, QQQ printed a Bearish Harami that failed its T-line.  SPY did not print a signal, but definitely took out recent lows and at best (from a Bullis standpoint) could be seen as right at the potential support level now..

On the day, all 10 sectors were in the red with Financial Services (-1.85%) and Basic Materials (-1.84%) out front leading the way lower and Healthcare (-0.41%) holding up far better than the other sectors.  At the same time, the SPY lost 1.16%, DIA lost 1.01%, and QQQ lost 1.05%.  VXX gained 5.76% to close at 24.77 and T2122 dropped deep into the oversold area at 5.76.  10-year bond yields continued to climb to 4.217% while Oil (WTI) was down 1.85% to close at $80.97 per barrel. This all took place on less-than-average volume across all three major index ETFs.  So, the bears got a big tailwind overnight from the Fitch banking sector warnings and that was reinforced when Fed Member Kashkari advocated “significantly higher” capital requirements for banks (beyond even the just hinted and not yet proposed new ones from the Fed, FDIC and Comptroller of the Currency).           

The major economic news reported Tuesday included the July Export Price Index, which came in much higher than expected at +0.7% (compared to a forecast of +0.2% and far higher than the June reading of -0.7%).  At the same time, the July Import Price Index also came in high at +0.4% (versus the forecast of +0.2% and the June value of -0.1%). July Retail Sales also increased much more than predicted at +0.7% (compared to a +0.4% forecast and a June value of +0.3%).  However, the Preliminary August NY Empire State Mfg. Index was reported far lower than anticipated at -19.0 (versus a forecast of -1.0 and even worse compared to the July reading of +1.10).  Later in the morning, June Business Inventories came in lower than expected at +0.0% (versus the forecast of +0.1% and the May value of +0.2%).  At the same time, June Retail Inventories also came in lower than predicted at +0.3% (compared to a forecast of +0.4% and a May reading of -0.1%).  Then, at the close, the June TIC Net Long-Term Transactions (which is the difference between foreign securities bought by the US citizens versus US securities bought by foreigners…it measures whether money is flowing into or out of our markets) came in higher than expected at +$195.9 billion (compared to a forecast of +107.2 billion and far above the May value of +$23.6 billion).  Finally, after the close, the API Weekly Crude Oil Stocks Report showed a larger-than-expected inventory drawdown of 6.195 million barrels (versus the forecasted drawdown of 2.050 million barrels and much lower than the prior week’s 4.067-million-barrel inventory build).

In Fed-speak news, in addition to his statements calling for even stricter banking regulations, Minneapolis Fed President Kashkari said he was not ready to say the Fed is done raising rates.  Specifically, Kashkari said, “I’m seeing positive signs that say, hey, we may be on our way; we can take a little bit more time to get some more data and before we decide whether we need to do more.”  At the same time, he said the Fed is “a long way” from cutting rates, even though there is a possibility of cutting them next year “just to keep monetary policy at a stable point.”

SNAP Case Study | Actual Trade

In stock news, Reuters reported that sporting-related companies NKE, ADDYY, and DKS are scrambling to unload products at significant discounts after the US Women’s World Cup Soccer team failed to make the second round of the World Cup Soccer Tournament.  They reported that various retail analysts were seeing 25%-35% discounts on jerseys, t-shirts, sweats, and other branded apparel.  Elsewhere, BP announced they have invested in a start-up company that is seeking to use vapor from heavy industry locations to sharply reduce the production costs of zero-carbon hydrogen.  At the same time, financially troubled UP said Tuesday that it will give up to 95% of its common stock to investment firms in return for a $500 million lifeline.  The investors include DAL and two private equity firms.  Later, BLNK announced it will be expanding its Latin American electric charging network.  The company had previously committed to 2,100 EV chargers across eight countries in the region.  In unrelated news, TSLA launched two cheaper and shorter-range versions of its Model S and Model X cars.  (Both will have exactly the same hardware, but will use software to limit the range.  The shorter-range version will be about $10,000 less than their “full range” sister products.)  Late in the day, private firm Esmark said it had $7.8 billion of cash in the bank and was ready to close an acquisition of X (the all-cash offer was made Monday).  After the close, OXY announced it would be acquiring carbon-capture firm Carbon Engineering for $1.1 billion.  At the same time, drugmaker MNKKQ announced it is preparing to seek bankruptcy protection for the second time in three years after failing to make a $200 million settlement payment to opioid victims.  In addition, LUV announced it has reached a tentative agreement with the union representing over 17,000 transport of its workers who handle ramp, cargo, and provisioning operations.

In stock legal and regulatory news, the White House and CFPB announced plans to regulate companies in the surveillance industry, including the data brokers that accumulate and sell consumer personal data.  The announcement specifically called out EXPGF, TRU, and EFX (consumer credit rating agencies) for selling “credit header information” such as names, addresses, and social security numbers.  This comes after the FTC sued (in late 2022) an Idaho company for selling cell phone geolocation data.  Elsewhere, the 4^th Circuit Court of Appeals ruled that WBA must face trial (it revived the lawsuit) for defrauding the US and the state of VA related to billing and eligibility of patients for expensive hepatitis C drugs.  (A lower court had dismissed the trial on the odd reasoning that WBA had violated federal law in its pre-authorization filings making the post-treatment billing irrelevant.  The Appeals Court rejected that idea.)  At the same time, Canada’s corporate ethics watchdog announced Tuesday that it is investigating RL over allegations the company uses forced labor (including Uyghur labor) in its Chinese production facilities.  Meanwhile, NY state fined CAR $275,000 for refusing to rent vehicles to people who do not have credit cards, even if they offered to pay a deposit.

After the close, A, HRB, JKHY, NU, and LRN all reported beats on both the revenue and earnings lines.  It is worth noting that A also lowered its forward guidance. So far this morning, JD, TCEHY, and TJX reported beats on both the revenue and earnings lines.  Meanwhile, EAT, PFGC, and TGT missed on revenue while beating on the earnings line.  It is worth noting that TGT cut its full-year guidance.

Overnight, Asian markets were nearly red across the board with only two of the twelve exchanges barely hanging onto green territory.  Meanwhile, South Korea (-1.76%), Japan (-1.46%), and Hong Kong (-1.36%) led the region lower.  In Europe, the picture is more mixed but still leans toward the red at midday.  The CAC (-0.07%), DAX (+0.05%), and FTSE (-0.48%) are leading the region lower with five green and 10 red bourses (Russia being down 2.11%) in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a flat start to the day.  The DIA implies a +0.01% open, the SPY is implying a -0.03% open, and the QQQ implies a -0.05% open at this hour.  At the same time, 10-year bond yields have pulled back a bit to 4.186% and Oil (WTI is flat at $80.97 per barrel in early trading.

The major economics news scheduled for Wednesday includes July Building Permits and July Housing Starts (both at 8:30 am), July Industrial Production (9:15 am), EIA Crude Oil Inventories (10:30 am), and FOMC Meeting Minutes (2 pm).  The major earnings reports scheduled for before the opening bell include EAT, JD, PDGC, TGT, TCEHY, TJX, and ZIM.  Then, after the close, AVT, SQM, CSCO, KE, STNE, and SNPS report.

In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, China lowered its one-year and medium-term interest rates by 15 basis points to 2.5% on Tuesday.  Even as modest as it was, that was the largest cut in three years.  However, interest rates are far from China’s largest problems as another of China’s largest real estate developers is at risk of loan defaults and the country’s largest financial conglomerate (Zhongzhi Enterprise Group, often called China’s Blackstone) just missed payments on its investment products.  In addition, later Tuesday, it was reported that new bank loans fell to a 14-year low.  Elsewhere, Bloomberg reported that CS’s Annual Global Wealth Report found that global household wealth fell last year for the first time since the 2008 financial crisis.  Total net private wealth decreased by 2.4% to a total of $454.4 trillion in 2022. 

In late-breaking news, Nielsen reports that for the first time ever, TV (broadcast and cable) viewing dropped below 50% of all views.  At the same time, streaming media viewing rose to 39%.  Elsewhere, Bloomberg reports there is discontent in the ranks of senior management at GS.  Apparently, a large faction of senior GS managers want the CEO (Soloman) replaced.  Finally, China is going further in its efforts to prop up its economy by asking some of the largest investment funds in both the Shanghai and Shenzhen exchanges to be “net buyers of stocks.”  No carrot or stick was mentioned in the report.  Instead, it was just a request and exhortation, which may imply something in China that it doesn’t in other parts of the world.  China is also considering reducing the country’s “stamp duty” (which is a government fee for approval of loans, leases, insurance, and other financial contracts). 

With that background, it looks like traders are undecided this morning with small-body candles near Tuesday’s close level. The trend remains bearish with all three major index ETFs below their T-line (8ema). Only the SPY is sitting at a potential support level at this moment but the other two are not far above their own potential support. Of course, the long-term trend is still hanging on to a bullish incline but it is being pushed by the Bears over the last three weeks. As far as extension goes, none of the major index ETFs are too far from the T-line. However, the T2122 indicator is now oversold, but not yet quite pegged to the bottom of its range. So, both sides have some slack to work with. However, the Bulls have more room to run.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened just on the red side of flat Monday (gapping down 0.21% in the SPY, down 0.08% in DIA, and down 0.22% in the QQQ).  However, the Bulls took over early and rallied all three major index ETFs to highs by 11 am.  Then the doldrums took over to give us a sideways grind in all three major that lasted until 3:55 pm.  Finally, we saw a strong rally the last 5 minutes of the day in SPY, DIA, and QQQ.  This action gave us Morning Star signal candles in the SPY and QQQ with the SPY closing right up against its T-line (8ema).  Meanwhile, DIA was much more indecisive, printing a white-bodied Spinning Top that closed just above the T-line after retesting that level. It’s worth noting that chip stocks (NVDA, MU, MRVL, and AMD) really led the parade Monday.  This all happened on less-than-average volume in all three major index ETFs.

On the day, six of the 10 sectors were in the red with Technology (+1.25%) way, way out front leading the way higher and Utilities (-1.13%) far behind, lagging the other sectors.  At the same time, the SPY gained 0.54%, DIA gained just 0.05%, and QQQ gained 1.12%.  VXX lost 1.68% to close at 23.43 and T2122 fell a bit but remains in the mid-range at 28.02.  10-year bond yields spiked again to 4.201% while Oil (WTI) was down 0.76% to close at $82.56 per barrel. This all took place on average volume in the QQQ and well below average in the large-cap index ETFs.  So, we saw a minor gap lower met with pretty much immediate buying.  However, after that move, markets just treaded water until the end of the day when the Bulls drove us higher into the close.         

There was no major economic news reported Monday.  However, the NY Fed did release its monthly survey of consumer inflation expectations.  The survey found that, on average, in July consumers now expect inflation to be at 3.5% a year from now down sharply from the 3.8% average expectation one month ago (June).  This was the lowest expectation reading since April of 2021.  In addition, 3-year and 5-year inflation expectations also dropped, although not as much, from 3.0% to 2.9%.  The survey also found positive improvements in consumer views on their personal finances and the job market over the next year.  The percentage that expect their personal situation to improve over the next year rose to the highest level since September 2021. Elsewhere, US bank regulators (FDIC, Fed, and Office of the Comptroller) said they will soon propose new regulations that require any bank with more than $100 billion in assets to issue enough long-term debt to cover capital losses in the event they ever fail.

SNAP Case Study | Actual Trade

In stock news, PYPL named current INTU exec. Alex Chriss as its new CEO.  Chriss will take over for the current CEO on September 27.  At the same time, AMC stock gapped sharply lower (closing down 35.55%) while APE (preferred shares of AMC) closed up 16.29%.  This was the result of fear that the recent settlement of shareholder legal challenges will allow AMC to issue more shares, diluting the existing ones.  (Also AMC announced at 10-to-1 reverse split for August 24 with all APE shares converted to common stock on August 25.)  Over in China, shares of electric vehicle makers (LI, XPEV, NIO, and BYDDY) fell as TSLA announced more price cuts as it continues the EV price war.  Later, HE fell 35% based on fear of the electric utilities’ potential liability from the fires on Maui last week.  At the same time, CHK announced Monday it will sell its remaining “Eagle Ford” assets to SBOW for $700 million.  Elsewhere, KHC named insider Carlos Abrams-Rivera as its new CEO. At the same time, BTAI announced it will cut more than 50% of its workforce as it pivots to restructure the business.  By mid-afternoon, FFIE announced it has delivered its first Futurist Alliance 2.0 car (priced at $309k).  This “electric supercar” has more than 1,000 horsepower (doing 0-60mph in 2.27 seconds) and the ability to go 381 miles between charges.  Late in the day, there were two updates to the Monday morning report that X had turned down a CLF offer to buy the steelmaker out.  On Monday, the USW union threw its support behind the CLF offer to buy CLF.  At the same time, privately-held Esmark made an offer of $7.8 billion ($35/share) for X (the rejected CLF offer was $7.3 billion).  After hours, LL announced it has begun exploring “strategic alternatives.”  LL shared plummeted 19% in post-market trading on that news.

In stock legal and regulatory news, GOEV revealed Monday that it has finalized $113 million in incentive agreements with the state of OK and the North American Cherokee Nation.  The deal would allow GOEV to earn $113 million over 10 years if it meets the set performance objectives.  Elsewhere, President Biden called on F, GM, STLA, and the UAW to come together to reach a fair agreement. (No mention was made of the potential to invoke a 30-day non-strike cooling-off period.)  Later, UBS agreed to pay $1.435 billion to settle US charges that the Swiss lender misled investors, leading them to buy distressed mortgage securities in 2008.  (The impressive thing is that UBS managed to drag out the process for 15 years.  For example, CS, which UBS bought in June, paid $5.28 billion for the same crime…but way back in 2017.)  At the end of the day, NKLA recalled all battery-powered trucks it has delivered and stopped sales of new ones after an investigation found battery coolant leaks led to fires.  At the same time, an Australian court fined DELL $6.5 million for misleading customers about discounts for add-on computer monitors.  In addition, the FTC fined EXPGF (Experian) $650,000 for spamming consumers with marketing emails without providing a way to opt-out.  Meanwhile, the FDA approved PFE’s blood cancer therapy named Elrexfio.  At the same time, K won a 3-0 decision by the 9^th Circuit Court of Appeals where plaintiffs had sought to revive a class action suit against K over the label claims on the amount of protein in its cereal.

After the close, GSM and XP both missed on revenue while beating on earnings. So far this morning, CAH and HD reported beats on both the revenue and earnings lines.  Meanwhile, ESLT, IHS, and ONON beat on revenue while missing on earnings.  On the other side, SE missed on revenue while beating on earnings.  Unfortunately, TME missed on both the top and bottom lines.  It is worth noting that IHS lowered its forward guidance.

Overnight, Asian markets were mixed.  Hong Kong (-1.03%), South Korea (-0.79%), and Shenzhen (-0.70%) paced the losses.  Meanwhile, Japan (+0.56%), Australia (+0.38%), and Taiwan (+0.37%) led the gainers.  In Europe, the bourses are leaning heavily toward the bearish side at midday.  The CAC (-1.27%), DAX (-1.04%), and FTSE (-1.45%) are leading the region lower with only two exchanges in the green in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.61% open, the SPY is implying a -0.57% open, and the QQQ implies a -0.52% open at this hour.  At the same time, 10-year bond yields are spiking again to 4.231% and Oil (WTI) is down more than one percent to $81.66 per barrel in early trading.

The major economics news scheduled for Tuesday includes July Retail Sales, July Export Price Index, July Import Price Index, and NY Fed Empire State Mfg. Index (all at 8:30 am), June Business Inventories and June Retail Inventories (both at 10 am), June TIC Net Long-Term Transactions (4 pm), and API Weekly Crude Oil Stock Report (4:30 pm).  Fed member Kashkari also speaks at 11 am.  The major earnings reports scheduled for before the opening bell include CAH, ESLT, HD, HIS, SE, and TME. Then, after the close, A, COHR, HRB, JKHY, NU, and LRN report.

In economic news later this week, on Wednesday, July Building Permits, July Housing Starts, July Industrial Production, EIA Crude Oil Inventories, and FOMC Meeting Minutes are reported.  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Wednesday, EAT, JD, PDGC, TGT, TCEHY, TJX, ZIM, AVT, SQM, CSCO, KE, STNE, and SNPS reports.  On Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, Nomura Securities released data from its study of 0DTE (zero days to expiration) options.  The study found that 0DTE contracts are surging in use, accounting for more than 55% on S&P500 Index volume on a single day recently (1.86 million contracts).  The study also found that contrary to the past (when Call options were the most widely used) over the last 20 days 0DTE Put options had about 10% more volume than 0DTE Call options.  Elsewhere, Argentina made some “moves” on Monday, devaluing their currency 18% against the Dollar and hiking their central bank interest rate 21% to a staggering 118%.  Overnight, Russia’s central bank called an “unscheduled emergency meeting” in the hope of stopping the crash of the Ruble. 

In late-breaking news, Fitch announced warnings for dozens of US banks overnight.  This is the primary driver behind the strength of the bears in Europe and in the US premarket.  The warning said that if the industry score were to drop from AA- to A+ (a one-step downgrade), it would be forced to rerate all 70 major US banks it covers.  As of now, Fitch rates BAC, BNY, JPM, and STT as AA-.  It has MS and WFC at A+.  They rate BOKF, C, GS, and UMBF at A.  Fitch has CBU at A-.  COLB, HTH, and WTFC are rated BBB+ by them.  Meanwhile, BKU, EWBC, FINN, SNV, and TRMK are at a BBB rating. Finally, among the investment grade banks, Fitch has WAL at BBB-.  Fitch rates CATY and PACW as “below investment grade” BB+. 

So far this morning, JKS reported beats on both the revenue and earnings lines.  (ERJ has not yet reported.)

With that background, it looks like the bears have gapped the premarket down and have kept the pressure on with black-bodied candles sitting at the low of the early session. DIA has dropped back down through its T-line (8ema). The short-term trend remains bearish, but the long-term trend is still hanging on to a bullish incline but it is starting to be pushed. As far as extension goes, all of the major index ETFs remain close to the T-line and the T2122 indicator is still in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday saw a gap lower following a hotter-than-expected PPI number. The SPY gapped down 0.44%, DIA gapped down 0.21%, and QQQ gapped down 0.71%.  However, like the reverse of Thursday, the Bulls stepped in to rally until 10:30 in the QQQ and 10:45 am in the SPY and QQQ.  Both of the large-cap index ETFs recrossed the gap with the DIA traveling triple the distance of that opening gap down.  From that point, all three major index ETFs rode the rollercoaster sideways within a modest range.  This action gave us white-bodied candles across the SPY, DIA, and QQQ.  DIA had the smallest wicks, closing back up across the T-line (8ema) and printing a Piercing candle.  At the same time, the SPY printed a gap-down, Spinning Top and QQQ printed a gap-down, white-bodied Doji, that gapped down through and failed a retest of its 50sma.

On the day, seven of the 10 sectors were in the green with Energy (+0.91%) way out front leading the way higher and Technology (-0.75%) lagged behind the other sectors.  At the same time, the SPY lost 0.06%, DIA gained 0.32%, and QQQ lost 0.64%.  VXX lost almost four percent to close at 23.83 and T2122 climbed slightly and remains in the mid-range at 31.43.  10-year bond yields spiked again to 4.158% while Oil (WTI) was up fractionally to close at $83.04 per barrel. This all took place on average volume in the QQQ and well below average in the large-cap index ETFs.  So, it was a whipsaw day with a gap and a reversal followed by waves the rest of the day.  Once again, after a lot of travel, the SPY, DIA, and QQQ all ended up very near where they started.      

The major economic news reported Friday included July month-on-month PPI came in hotter than expected at +0.3% (compared to a forecast of +0.2% and the June reading of +0.0%). Later, the Preliminary August Michigan Consumer Sentiment came in just a bit better that anticipated at 71.2 (versus a 71.0 forecast but a bit lower than the July value of 71.6).  Meanwhile, the Preliminary August Michigan Consumer Expectations came in a bit lower than expected at 67.3 (compared to a forecast of 68.1 and the July reading of 68.3).  At the same time, Preliminary August Michigan Consumer Inflation Expectations were reported better than predicted at 3.3% (versus to a forecast of 3.8% and better than the July reading of 3.4%). Over the longer term, the Preliminary August Michigan 5-year Consumer Inflation Expectations also came in lower than anticipated at 2.9% (compared to a forecast of 3.0% and a July value of 3.0%).

SNAP Case Study | Actual Trade

In Fed news, Reuters provided a breakdown of current Fed members that may be useful.  Doves include Harker (Philly), Bostic (Atlanta), Daly (San Fran), Logan (Dallas), and Barkin (Richmond).  Those leaning dovish are Goolsbee (Chicago), Cook (Governor), Collins (Boston), and Kashkari (Minny).  Centrists include Williams (NY), Jefferson (Governor), and Barr (Vice-Chair).  Those who lean hawkish are Powell (Chair), Bowman (Governor), and Mester (Cleveland).  Finally, the Hawks are Waller (Governor), and Bullard (St. Louis).

In stock news, the tense and ugly negotiations between the “Big 3” automakers and the UAW continued Friday.  After the UAW threw the latest STLA in the trash the prior week, STLA firmly rejected the UAW counter-offer calling for the union to “focus on reality.”  (The current 4-year deals between the UAW and GM, F, and STLA end on September 14, and a strike has already been authorized by the union.)  Elsewhere, an F joint venture with a Chinese state-owned automaker (owned 50-50) is now planning its own joint venture with that same Chinese state-owned company (Chongqing Chagan Automotive) to launch an electric vehicle manufacturer. This will leave the Chinese state owning 70% of the EV venture.  Later, WYNN announced it is “winding down” its online sports betting platform WynnBET, saying that customer acquisition costs were too high (too much competition) and rules across different states were not clear.  For now, they have ceased operation in AZ, CO, IN, LA, NJ, TN, VA, and WV.

In stock legal and regulatory news, Reuters reported Friday that the SEC has begun an investigation into ILMN’s $7.1 billion acquisition of Grail (a cancer detection test kit maker) in 2021.  Details are not available yet, but the investigation seems to be related to certain management statements and compensation connected to the deal.  (The EU fined ILMN $476 million in July for closing the deal without EU approval.)  Elsewhere, a US District judge dismissed a lawsuit against SBUX on Friday.  The Chief judge of the district called it a frivolous suit by a conservative activist group who were challenging SBUX’s diversity, equity, and inclusion policies.  The judge said the group’s statements in filings clearly show the suit was meant to make political points rather than address any losses from the group’s $6,000 of SBUX stock.  Meanwhile, the US Dept. of Transportation and China have agreed to double the number of flights between the two countries.  UAL, AAL, DAL, CEA, ZNH, and AIRYY are the airlines currently offering flights between the two destinations.

Overnight, Asian stocks leaned heavily toward the red with only two of the region’s 12 exchanges hanging onto the green.  Meanwhile, Hong Kong (-1.58%), Singapore (-1.41%), Japan _1.27%), and Taiwan (-1.25%) led the region lower.  In Europe, we see a much more bullish picture taking shape with nine of the 15 bourses in the green at midday.  The FTSE (-0.31%) lags while the CAC (+0.22%), and DAX (+0.44%) lead the region higher.  However, it should be noted that even with the Russian Ruble falling to a 17-month low against the Dollar, the Russian exchange is up 2.14% in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly green start to the week. The DIA implies a +0.20% open, the SPY is implying a +0.21% open, and the QQQ implies a +0.30% open at this hour.  At the same time, 10-year bond yields have climbed to 4.148% and Oil (WTI) is down four-tenths of a percent to $82.84 per barrel in early trading.

There is no major economics news scheduled for Monday.  The major earnings reports scheduled for before the opening bell include ERJ and JKS.  Then, after the close, GSM and SU report.

In economic news later this week, on Tuesday, we get July Retail Sales, July Export Price Index, July Import Price Index, NY Fed Empire State Mfg. Index, June Business Inventories, June Retail Inventories, June TIC Net Long-Term Transactions, and API Weekly Crude Oil Stock Report.  Fed member Kashkari also speaks.  Then Wednesday, July Building Permits, July Housing Starts, July Industrial Production, EIA Crude Oil Inventories, and FOMC Meeting Minutes are reported.  On Thursday, we get Weekly Initial Jobless Claims, Philly Fed Mfg. Index, Philly Fed Mfg. Employment, and the Fed Balance Sheet.  Finally, on Friday, there is no significant economic news scheduled.

In terms of earnings reports, on Tuesday we hear from CAH, ESLT, HD, HIS, SE, TME, A, COHR, HRB, JKHY, NU, and LRN.  Then Wednesday, EAT, JD, PDGC, TGT, TCEHY, TJX, ZIM, AVT, SQM, CSCO, KE, STNE, and SNPS reports.  On Thursday, we hear from ARCO, BILI, DOLE, NICE, TPR, WMT, AMAT, FTCH, GLOB, KEYS, and ROST.  Finally, on Friday, DE, EL, VIPS, XPEV, and PANW report.

In miscellaneous news, the Fed reported Friday that US large bank deposits rose by $17.60 billion to the $17.36 trillion level in the week ended August 2.  At the same time, US commercial bank lending also rose by $9.3 billion to $12.132 trillion (adjusted) during the same week.  Elsewhere, Refinitiv Lipper reported that investors withdrew $14.96 billion from US equity funds in the week ending August 9.  This was the biggest outflow in seven weeks. Finally, GS economists are now predicting Fed rate cuts starting in Q2 of 2024.

In late-breaking news, on Sunday X announced it has rejected a $7.3 billion unsolicited buyout offer from rival CLF. (This would have been a 43% premium over Friday’s closing price for X.) The X management said it has rejected the offer because CLF was trying to force X to make its decision without doing enough due diligence.  However, X said it is reviewing its strategic alternatives after receiving the offer.  (Bear in mind that any deal is likely to face regulatory pushback since CLF is already the largest steelmaker in the US while X is also in the top four steel producers.)

So far this morning, JKS reported beats on both the revenue and earnings lines.  (ERJ has not yet reported.)

With that background, it looks like premarket action started higher but is indecisive at best since then. The SPY did try to retest its T-line (8ema) from below before backing down. Meanwhile, the DIA remains above its T-line, but close to it, and is printing an indecisive early-session candle. At the same time, QQQ opened up its premarket session higher, testing its 50sma from below, but has faded since then. So, the short-term trend is still bearish and the long-term trend remains bullish, although it is starting to be pushed. As far as extension goes, all of the major index ETFs are close to the T-line and the T2122 indicator remains in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped higher Thursday on better-than-expected CPI data.  The SPY gapped up 0.54%, DIA gapped up 0.56%, and QQQ gapped up 0.80%.  From there, all three major index ETFs followed through with a rally to the highs of the day at 10 am.  At that point, the Bears took over and led a slow, protracted selloff that saw the SPY, DIA, and QQQ all recross their opening gap.  This led to a 90-minute bounce and a selloff in the last 30 minutes of the day.  This action gave us indecisive, black-bodied, Spinning Top candles (with large upper wicks) in all three major index ETFs.  All three also retested and failed their T-line (8ema) with the QQQ remaining right at its 50sma (testing), while the SPY and DIA are not far above their 50sma and look headed that way.

On the day, six of the 10 sectors were in the red again but not nearly as strongly) with Basic Materials (-0.35%) and Utilities (-0.30%) leading the losses while Communication Services (+0.55%) held up much better than the other sectors.  At the same time, the SPY gained 0.04%, DIA gained 0.17%, and QQQ gained 0.18%.  VXX gained 0.45% to close at 24.80 and T2122 fell a bit but remains in the mid-range at 31.25.  10-year bond yields spiked again to 4.109% while Oil (WTI) lost 1.80% to close at $82.89 per barrel.  This all took place on average volume across all three major index ETFs.  So, it was a whipsaw day with a gap and a little follow-through to the upside, met with a long steady selloff and then a smaller trip up and down.  In the end, after a lot of travel, the SPY, DIA, and QQQ all ended up just above where they started.    

The major economic news reported Thursday included July Year-on-Year CPI, which came in a touch better than expected at +3.2% (compared to a forecast of +3.3% but still worse than the June value of +3.0%).  However, the July Month-on-Month CPI came in exactly as predicted at +0.2% (versus the +0.2% forecast and the +0.2% June reading).  At the same time, Weekly Initial Jobless Claims were higher than forecasted at 248k (compared to a 230k prediction and well above the prior week’s 227k).  Later in the day, the July Federal Budget Balance came in far worse than expected at -$221.0 billion (versus a suspect forecast of -$109.3 billion but slightly better than the June value of -$228.0 billion).  So, markets latched on to the annual CPI number and said it was a beat, gapping higher. However, if you have a more bearish outlook, you saw that it also ticked up versus the June number (and you note July Core Year-on-Year CPI is still +4.7%) and think the Fed still has rate hiking left to do.

In Fed-speak news, San Francisco Fed President Daly told a Yahoo Finance interview (a couple of hours after the CPI release) that it was too early to say whether the Fed has done enough fighting inflation. However, she did seem to hint that there is only one more hike at most in the cards (as other Fed members have implied or said). She said, “Whether we raise another time, or hold rates steady for a longer period — those things are yet to be determined,” Daly went on to say “It would be premature to project what I think would happen because there’s a lot of information coming in between now and our next meeting.”

SNAP Case Study | Actual Trade

In stock news, Reuters reports that INTM is exploring options and in talks to potentially sell the business to buyout firm Madison Dearborn Partners for more than $1 billion.  Elsewhere, SPCE again completed a tourist trip to the edge of space, carrying three customers and a company instructor to 55 miles altitude before returning to its New Mexico base.  (This is the second such commercial trip, with the first taking place at the end of June.)   Later, MULN announced it was doing a reverse 1 for 9 stock split overnight.  (This move is part of the company’s effort to remain listed on the Nasdaq exchange.)  At the same time, an F exec told analysts they expect better software added to the company’s highly-profitable commercial truck/van line will boost revenue by $4,000-$5,000 per unit.  (There was no detail on what this new software would do for truck buyers, but it was said to be related to fleet safety, security, insurance, and partial vehicle autonomy.)  Late in the day, UAL canceled some flights into HI and ALK flagged some HI flights for major delays both citing the wildfires on the Maui island.  After the close, ACHR announced it has completed a $215 million equity offering that included STLA, BA, UAL, and ARKK as investors.

In stock legal and regulatory news, Reuters reported that the FTC investigators looking into the KR $24.6 billion acquisition of ACI are focused on how the deal would squeeze small suppliers and small grocery competitors.  Reuters said the FTC is still undecided on whether or not to oppose the deal.  Later, the US 2^nd Circuit Court of Appeals ruled that a shareholder class action suit against GS cannot go forward.  (The suit alleged GS had misled investors about business practices and conflicts of interest prior to the subprime mortgage crisis.)  Elsewhere, penny stock biotech firm AMRS has filed for bankruptcy.  At the same time, the FDA approved a JNJ antibody-based therapy for hard-to-treat blood cancers.  (JNJ is expecting a $300k price for a typical six-month treatment and says around 36,000 people are expected to be diagnosed with the disease this treat during 2023.)  Meanwhile, another politically conservative group is attacking a corporation.  This time K was targeted in a public letter sent to the EEOC, urging the agency to take action against the cereal maker, alleging a workplace diversity program is illegal.  The letter also claimed K cereal packaging during “Pride Month” sexualized its products (although it is unclear why the EEOC would care about that allegation).  At the same time, the Wall Street Journal reported that AMZN will be “shelving” several of its private-label clothing brands as a way to cut expenses while also appeasing FTC antitrust concerns.  The move will impact 27 of AMZN’s 30 in-house clothing divisions.  Later, the 11th Circuit Court of Appeals ruled 3-0 in favor of HOOD and threw out a proposed class-action lawsuit by meme stock investors who said the broker’s halting of trading meme stocks caused them to lose money.  Late in the day, the NTHSA cited a UAL flight crew for failures that caused a flight to sharply lose altitude shortly after takeoff in December before recovering in HI.  After the close, it was announced that BA and ACHR had settled their mutual lawsuits for undisclosed terms.

After the close, DTEGY, FLO, and PAM reported beats on both revenue and earnings.  Meanwhile, NWS and NWSA missed on revenue while beating on earnings.  However, ASTL and CANO missed on both the top and bottom lines. It’s worth noting that CANO lowered its forward guidance.

Overnight, Asian stocks leaned heavily to the red side.  Japan (+0.84%) was by far the largest gainer of the three green exchanges.  Meanwhile, Shenzhen (-2.18%), Shanghai (-2.01%), and Hong Kong (-0.90%) led the region lower.  In Europe, we see the same picture taking shape with only two smaller bourses hanging onto green at midday.  The CAC (-0.79%), DAX (-0.48%), and FTSE (-1.12%) are typical and lead the way lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward an open just on the red side of flat.  The DIA implies a -0.01% open, the SPY is implying a -0.11% open, and the QQQ implies a -0.21% open at this hour.  At the same time, 10-year bond yields have backed down very slightly to 4.096% and Oil (WTI) is up another 0.40% to $83.16 per barrel in early trading.

The major economics news scheduled for Friday includes July PPI month-on-month (8:30 am), Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, and Preliminary Michigan 5-year Inflation Expectations (all three at 10 am), and the WASDE Ag report (noon).  The major earnings reports scheduled for before the opening bell are limited to ACDVF and SPB.  Then, after the close, there are no earnings reports scheduled.

So far this morning, ACDVF beat on both the revenue and earnings lines. Meanwhile, SPB missed on revenue while beating on earnings.

In consumer debt news, the Mortgage Bankers Assn. reported its quarterly survey results.  The survey found that US mortgage delinquency rates reached an all-time low in Q2 at 3.37%.  (Of those, 1.61%, unadjusted, fell into the “seriously delinquent” category which was itself a 23-year low.) This (3.37%) was the lowest rate of mortgage loan delinquencies since the group started the survey in 1979.  It was also down 3.64% year-on-year.  The MBA survey cited a strong job market and low-interest rates as the main cause of the low delinquency rate.  However, Moody’s reported that credit card delinquencies hit 7.2% in Q2 (up from 6.5% in Q1).  At the same time, they say auto loan delinquencies hit 7.3% in Q2 versus 6.9% in Q1. So, apparently, not all debt is of the same priority, or perhaps not all studies are equally valid.

In late-breaking news, CNBC reported this morning that OXY (and two start-ups, one of which is backed by MSFT) are set to gain $1.2 billion as part of the Dept. of Energy plan to create giant vacuums to capture and then wells to sequester carbon from the atmosphere.  So far, the underlying “Direct Air Capture” technology has not scaled up enough to make much difference in fighting climate change.  However, the two projects this money will fund are expected to capture more carbon than all 18 projects of the same type that exist now globally…combined.  The project will remove 2 million metric tons of carbon per year, which is the equivalent of the emissions from 500,000 gasoline cars.  These projects will also create 5,000 jobs in TX and LA.  ($3.5 billion in funding for two additional hub projects is expected to be approved next year.)

With that background, it looks like markets are still undecided this morning, perhaps waiting on the PPI number. If you’re a Bull, the good news is that the major US indices are not following the rest of the world lower, at least yet. However, there is no strength being shown in the premarket as all three major index ETFs are giving us small, black-bodied candles with lower wicks. So, we are up off the early session lows but still below the premarket open. DIA remains right at its T-line (8ema), retesting from below again and QQQ is doing the same thing with its 50sma. The difference is that the DIA T-line is falling while the QQQ 50sma is rising. So, the short-term trend remains bearish and the long-term trend remains bullish, although it is starting to be pushed. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum. That PPI print may cause some premarket volatility and impact the open. However, it should not be as bad as with the CPI. Finally, it is Friday, Payday. So, take some profits to pay yourself and prepare for the weekend news cycle.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Wednesday started out flat (up 0.06% in the SPY, down 0.03% in the DIA, and up 0.07% in the QQQ).  At that point, the QQQ sold off hard until 11:30 am while the SPY and DIA just ground sideways until 10:45 am before following the QQQ by selling off hard until noon.  From there all three major index ETFs rallied until 2:40 pm and then all three sold off into the close.  This action gave us black-bodied candles in all three with the SPY printing a Bearish Engulfing candle and the DIA printing a black-bodied Spinning Top candle.  The DIA also retested and failed its T-line (8ema) as the QQQ retested its 50sma and closed just on the bottom side of that potential support level.

On the day, six of the 10 sectors were in the red again with Technology (-1.43%) by far the biggest loser while Energy (+1.12%) held up much better than the other sectors.  At the same time, the SPY lost 0.67%, DIA lost 0.48%, and QQQ lost 1.10%.  The VXX lost 0.88% to close at 24.69 and T2122 rose a bit and remains in the mid-range at 42.35.  10-year bond yields dropped again but remain above 4% at 4.01% while Oil (WTI) gained 1.56% to close at $84.21 per barrel.  This all took place on a bit below-average volume again in all three major index ETFs. So, markets opened just on either side of flat.  However, the tech-heavy QQQ (led by chip names VNDA, AVGO, and MRVL) led the markets lower before the Bulls staged a modest bounce back only to run out of steam.  Again, this felt like a lackluster day of drift, perhaps waiting on the CPI number Thursday. 

The major economic news reported Wednesday was limited to the EIA Weekly Crude Oil Inventories which followed the API data from Tuesday night.  EIA showed an unexpected crude inventory build of 5.851 million barrels (compared to a forecasted build of 0.567 million barrels and dramatically higher than the previous week’s drawdown of 17.049 million barrels). 

After the close, APP, CENX, CPA, FLNC, ILMN, JAZZ, LGFA, LGFB, MATV, MFC, NASB, TTD, TTEK, DIS, and WYNN all reported beats on both the revenue and earnings lines. Meanwhile, CACI, CRGY, ENS, and G missed on revenue while beating on earnings.  On the other side, VSAT and PAAS beat on revenue while missing on earnings.  Unfortunately, CDE, NGL, and UHAL missed on both the top and bottom lines.  It is worth noting that TTD, APP, and JAZZ raised their forward guidance.  However, ILMN lowered its forward guidance. 

SNAP Case Study | Actual Trade

In stock news, Reuters reported Wednesday that strong international travel was helping some, but hurting domestic travel companies.  The Air Transport trade group said international travel had reached 90% of the pre-pandemic peak and cruise operators are seeing record demand.  However, a good portion of this foreign travel has come at the expense of domestic travel.  As a result, the average domestic flight ticket is down 8% from the same time in 2022 as airlines compete for passengers.   Elsewhere, the CFO of GM told an investor conference that the company is struggling to produce electric vehicles.  GM had targeted 25,000 of just the Cadillac Lyriq electric SUV this year but had only produced fewer than 2,400 in the first half.  Later, VZ said they will be raising prices again on at least some of its wireless plans.  This follows rival T raising prices in July.  After the close, DIS also announced it will increase the price of its Disney+ service for the second time in less than a year.  This increase will be a whopping 27% (from $10.99 to $13.99).  Finally, in last-minute news, TPR announced it will acquire CPRI for $8.5 billion ($57/share). CPRI shares are soaring in the premarket on the news.

In stock legal and regulatory news, a politically conservative legal group sued TGT (in Florida naturally), alleging that the retailer had misrepresented its risk management system in the wake of conservative cancel culture attacks on LGBTQ merchandise. The suit seeks unspecified damages for the decline in share price which the plaintiff alleges are wholly attributable to the LGBTQ merchandise backlash from conservatives.  Elsewhere, a US federal judge allowed a class action lawsuit against NIO to proceed.  The suit alleges the automaker lied in 2018 about building its own factory in China, which led to a decline in share prices.  Meanwhile, US railroad regulators gave a mixed review of the NSC safety culture following the February derailment (of a train carrying dangerous chemicals) in East Palestine OH.  The review praised NSC for changes made since that derailment but also disclosed it was considering several enforcement actions against the company (which had been focused for years on just meeting the minimum legal safety standards per the report).  The potential actions would be focused on track maintenance, safety inspections, repair practices, and hours of service (employee overwork beyond safe limits).  Late in the day, the FAA announced it has agreed to an industry group request and will extend the deadline until Oct. 28 for meeting the minimum number of flights required at New York City airports (to avoid losing gates and landing slots).  DAL is the primary major airline beneficiary of the change.

In government news, PIED is facing anger and skepticism from NC state officials in relation to its plans to expand lithium mining in order to supply TSLA.  The state is now concerned that the existing mine is already impacting water levels (causing some wells to run dry) in the area as lithium mining is very water-intensive.  At the same time, officials expressed concern over runoff from an expansion.  PIED announced they would be open to adding a new containment pond but did not address water usage.  In the UK, parliament opened an investigation into the country’s approach to migrating from fossil fuel toward electric vehicles.  The study is aimed to identify things the UK government can do to accelerate and support the transition ahead of the already set 2030 and 2035 deadlines.  The report is to be submitted in September.  At midday, Reuters reported that Amtrak and Texas Central Partners are exploring high-speed rail service between Dallas and Houston, seeking government grants to underwrite the project. Elsewhere, President Biden signed an executive order prohibiting US investments inside China covering three sectors.  Those sectors are semiconductors and microelectronics, quantum information technologies, and artificial intelligence technologies.  (Democrats largely praised the order.  However, the Republican response was mixed with House Foreign Affairs Committee Chair McCaul praising the move even as others including Senator Rubio called the narrowly-tailored ban “almost laughable.”)  The bans are expected to take effect next year after multiple rounds of public comment. 

Overnight, Asian stocks were mixed.  Taiwan (-1.40%) was by far the biggest mover and followed by India (-0.46%) paced the losers.  Meanwhile, Japan (+0.84%), Thailand (+0.33%), and Shanghai (+0.31%) led the gainers.  In Europe, the bourses are leaning to the green side again at midday.  The CAC (+0.94%), DAX (+0.59%), and FTSE (+0.06%) are typical of the spread but four smaller exchanges in the red in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.49% open, the SPY is implying a +0.52% open, and the QQQ implies a +0.62% open at this hour.  At the same time, 10-year bond yields remain flat at 4.003% and Oil (WTI) is off a half of a percent to $84.00 per barrel in early trading.

The major economics news scheduled for Thursday includes July CPI year-on-year, July CPI month-on-month, and Weekly Initial Jobless Claims (all at 8:30 am), July Federal Budget Balance (2 pm), and the Fed Balance Sheet (4:30 pm).  Philly Fed President Harker also speaks again at 4:15 pm.  The major earnings reports scheduled for before the opening bell AQN, BABA, AIT, AZUL, TAST, HBI, KELYA, EYE, NVO, ACDC, RL, USFD, and WWW.  Then, after the close, ASTL, BAP, and NWSA report..

In economic news later this week, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.

In terms of earnings reports, on Friday, ACDVF reports.

In US energy news, US oil production is now projected to reach an average of 12.9 million barrels per day later this year according to the EIA data released Wednesday.  (That is a 16% increase in the last two and a half years and an all-time record output.) This 12.9mbpd value represents a 200k barrel per day increase over the last EIA forecast.  US Oil output is also expected to reach 13.1 million barrels per day in 2024, which will be far in excess of the US record and the world’s second-largest oil producer (Saudi Arabia), which now produces less than 10 million barrels per day according to OPEC (after recent self-imposed 1 million bpd reductions).  The downside (for US gas prices at least) is that domestic oil producers are shipping more oil abroad to take advantage of the higher prices in Europe and Asia.  In addition, US domestic oil usage is also near all-time highs at 20.6 million barrels per day (20.8 million barrels per day is the record, set in 2005). 

So far this morning, BABA, AIT, TAST, DDS, EYE, NVZMY, and RWEOY all reported beats on both the revenue and earnings lines.  Meanwhile, HBI, USFD, and YETI missed on revenue while beating on earnings.  On the other side, AQN and WWW beat on the revenue line while missing on earnings.  Unfortunately, NVO and SIX missed on both the top and bottom lines. It is worth noting that HBI and WWW lowered forward guidance while YETI raised guidance.

With that background, it looks like the Bulls are again looking to gap us higher, but are still giving us inside day-type candles in the premarket (at least ahead of CPI data). DIA is retesting its T-line (8ema) from below this morning in the premarket this morning. However, we should also note that all three major index ETFs are giving us small, black-bodied candles in the early session. (Meaning they are off the highs.) So, there is not a lot of conviction. The short-term trend is bearish and the longer-term trend remains Bullish. However, the DIA is testing its 50sma while the SPY and QQQ are not far above their own. So, even longer-term Bulls have to be nervous. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, once again both sides of the market have plenty of room to run…if they can find momentum. That CPI print should cause some premarket volatility and will impact the open. Just be aware.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped lower at the open Tuesday (down 0.58% in the SPY, down 0.60% in the DIA, and down 0.69% in the QQQ).  This resulted from disappointing international trade data out of China, a surprise windfall profits tax on banks in Italy, and a Moody’s downgrade of 10 US banks (and others put on warning for downgrade). After the open, all three of the major index ETFs followed through until about 11 am.  At that point, the Bulls stepped in and began a slow, steady rally that lasted right into the close.  This action gave us gap-down, white-bodied Hammer candles in the SPY and DIA as well as a gap-down, black-bodied Hammer candle in the QQQ.  Only DIA managed to make it up to its T-line (8ema) closing right up against the underside of that average.

On the day, six of the 10 sectors were in the red with Financial Services (-1.04%) and Technology (-1.02%) leading the way lower while Healthcare (+1.00%) held up much better than the other sectors.  At the same time, the SPY lost 0.43%, DIA lost 0.45%, and QQQ lost 0.85%.  The VXX gained 1.76% to 24.91 and T2122 fell but again but remains in the mid-range at 36.13. 10-year bond yields dropped back again but remain above 4% at 4.024% while Oil (WTI) gained 1.05% to close at $82.80 per barrel.  This all took place on a bit below-average volume in all three major index ETFs.  So, Bears gapped the market lower and had control in the morning.  However, by late-morning the Bulls clocked in and led a slow comeback rally the rest of the day.  Once again, this felt like a news-driven jolt and then a modest drift up on the day.  It felt like the opposite of Monday, with the fall characterized more by a lack of conviction than a true change of direction.

The major economic news reported Tuesday included June Exports, which increased slightly to $247.50 billion (compared to the May value of $247.10 billion).  We also got June Imports, which fell slightly to $313.00 billion (down from the May $316.10 billion).  Together, these gave us a June Trade Balance of -$65.50 billion (a bit below the forecast of -$65.00 billion but better than the May deficit of $68.30 billion).  Then, after the close, the API Weekly Crude Oil Stock report gave us an unexpected oil inventory build of 4.067 million barrels (versus a forecast calling for a drawdown of 0.233 million barrels and far better than the prior week’s 15.400-million-barrel drawdown.  

In Fed-speak news, Philly Fed President Harker (voter) told an event that barring any abrupt change in the direction of recent economic data, the FOMC may be at a stage where it can leave rates where they are for some time.  Harker said, “Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work,” … “we will need to be there for a while.”  Meanwhile, Atlanta Fed President Bostic (a non-voter and dove) again said he does not believe any more hikes will be needed.  At the same time, NY Fed President Williams (voter) was quoted in a New York Times interview to say “I think we’re pretty close to what a peak rate would be.”  (However, he did not go so far as to commit to one more hike or not.) 

SNAP Case Study | Actual Trade

In stock news, AAPL and SSNLF (Samsung) will both become “anchor investors” in the IPO of chip designer Arm (which is being spun off by current owner SFTBY (Softbank).  Arm is the chip platform that AAPL chose when dropping INTC chips and going with their so-called “AAPL chip” (Arm-based) chips for AAPL computing products.  NVDA and AMZN are also in talks to become anchor investors but neither were announced Tuesday.  Elsewhere, BA deliveries fell in July with the company supplying 43 aircraft (down from 60 in June and compared to Airbus delivering 65).  At the same time, ADT announced it is selling its commercial security business unit to a private equity firm for $1.6 billion. Meanwhile, negotiations are getting contentious in the auto industry as the UAW threw the latest contract offer from STLA in the trash can after the company proposed cutting vacation days, cutting healthcare coverage, cutting 401(k) contributions, and lifting the cap on temporary workers.  (Current UAW contracts with STLA, GM, and F all expire September 14.)  After the close, DIS made an interesting and odd decision. The family-oriented entertainment company’s ESPN unit agreed to launch a sports betting service under the name “ESPN Bet” in partnership with PENN.  (PENN will pay ESPN $1.5 billion in cash and offer $500 million in warrants to purchase PENN shares over a 10-year period.)

In stock legal, regulatory, and government news, UK media regulator Ofcom said on Tuesday that it has opened an investigation into SNAP for potentially not doing enough to remove underage users (under 13) from its platform.  At the same time, NVO announced that a large study has found its wildly-popular obesity drug Wegovy has also been shown to have clear cardiovascular benefits.  Elsewhere, US regulators fined nine companies a total of $549 million on Tuesday.  WFC and BNPQY received the largest fines and have agreed to pay penalties for having brokerage employees who used off-record communications tools like WhatsApp.  WFC paid $125 million and BNPQY (BNP Paribas) $35 million to the Commodity Futures Trading Commission.  Other firms hit with fines include among others including BMO, MC, and HLI.  Later, a US federal judge ruled against GOOGL, dismissing the company’s bid to have a privacy lawsuit thrown out.  The $5 billion class action suit alleges GOOGL collected users browsing histories without obtaining user consent and without even explicitly telling users it would do so.  At the same time, LUV announced it will appeal a fringe TX federal judge ruling that said three of the airline’s senior attorneys must attend “religious liberty training” held by a TX conservative Christian legal group.  During the afternoon, the NHTSA announced it has opened an investigation into 1.1 million older STLA Dodge Ram 1500 pickup trucks over power steering loss issues.  Near the close, a judge dismissed ABNB’s lawsuit against New York City for what the company had called a “de facto ban” on short-term rentals (because hosts were required to register with the city).  The judge cited 12,000 complaints the city had received about short-term rentals in a 5-year period preceding the law.  After the close, a US Appeals Court panel of judges in OH rejected an appeal by SBUX, ruling that the company must rehire seven employees fired in Memphis for supporting a union.

After the close, ACCO, AKAM, AMC, ARRY, BHF, CLOV, CPNG, DOOR, FG, FNV, GNW, GO, LYFT, OSCR, QGEN, QDEL, RXT, RIVN, SLF, SMCI, and TWLO all reported beats on both the revenue and earnings lines.  At the same time, IOSP, LILA, and MODG missed on revenue while beating on earnings.  On the other side, EDR, FLT, FNF, TTWO, and TOST beat on revenue while missing on earnings.  However, DAR, IAC, and JXN missed on both the top and bottom lines.  It is worth noting that SMCI, TOST, and LYFT raised their forward guidance. 

Overnight, Asian stocks were mixed but leaned toward the green.  South Korea (+1.21%), Malaysia (+0.76%), and Thailand (+0.65%) led the more plentiful gainers while Japan (-0.53%), Shenzhen (-0.53%), and Shanghai (-0.49%) paced the five down exchanges.  Meanwhile, in Europe, we see green across the board at midday.  The CAC (+1.17%), DAX (+1.03%), and FTSE (+0.78%) lead the region but the gains are broad-based in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.09% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.09% open at this hour.  At the same time, 10-year bond yields are up a bit to 4.036% and Oil (WTI) is up another percent to $83.78 per barrel in early trading.

The major economics news scheduled for Wednesday is limited to EIA Crude Oil Inventory (10:30 am).  The major earnings reports scheduled for before the opening bell include BERY, BHG, BCO, BAM, CRL, GEO, HMC, NOMD, OGE, PENN, RBLX, SONY, SWX, SLVM, UWMC, VTNR, VSH, and WEN.  Then, after the close, APP, CACI, CANO, CENX, CDE, CPA, CRGY, ENS, G, ILMN, JAZZ, MFC, NGL, PAAS, TTEK, VSAT, DIS, and WYNN report.

In economic news later this week, on Thursday, we get July CPI year-on-year, July CPI month-on-month, Weekly Initial Jobless Claims, July Federal Budget Balance, and the Fed Balance Sheet.  Finally, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.

In terms of earnings reports, on Thursday, we hear from AQN, BABA, AIT, AZUL, TAST, HBI, KELYA, EYE, NVO, ACDC, RL, USFD, WWW, ASTL, BAP, and NWSA.  Finally, on Friday, ACDVF reports.

In miscellaneous news, President Biden designated almost 1 million acres near the Grand Canyon (AZ) as a national monument Tuesday.  The purported reason was that the lands are sacred to Havasupai and Hopi Native American tribes.  However, the land is also known to hold about one percent of US uranium reserves and this designation will prevent new mining leases on that land, potentially heading off environmental damage to the area.  Elsewhere, Ag analysts expect the US corn crop to be the second-largest on record after rains in July helped a critical growing stage.  The WASDE report comes out on Friday, but the USDA has already increased the percentage of corn cropland rated from good to excellent by four percent.  (Corn prices are down 18% since the end of June.)  Meanwhile, US credit card balances passed $1 trillion in Q2 according to data released by the NY Fed.  This took them to a record $1.03 trillion as Household debt rose 0.1% to $17.06 trillion.

In late-breaking news, China fell into deflation registering a drop in its CPI for the first time in more than two years.  Prices fell 0.3% in China during the month of July while PPI fell for a 10^th consecutive month, contracting 4.4%.  This adds to the pressure on Beijing to add more monetary and fiscal support to its economy.  Elsewhere, US Mortgage demand fell again because interest rates climbed to a 21-year high during the week.  The average 30-year, fixed-rate, conforming loan rate jumped to 7.09% (up from 6.93% the week prior).  This led to a 3% decline in new purchase loan applications and a 4% decline in refinance mortgage applications.

So far this morning, ATS, CRL, EONGY, GEO, HMC, ICL, PENN, VSH, VWDRY, and WE all reported beats on both the revenue and earnings lines.  (Oddly, after beating lowered estimates, WE also warned of possible bankruptcy after going public only in 2021.  They cited the pandemic as hurting the company.)  Meanwhile, ADRNY, NOMD, SONY, and WEN missed on revenue while beating on earnings.  On the other side, VTNR and BCO beat on revenue while missing on earnings.  Unfortunately, BAM and OGE missed on both the top and bottom lines. It is worth noting that GEO also lowered its forward guidance.

With that background, it looks like the Bulls are retesting their T-line (8ema) from below in the premarket this morning and QQQ is not that far below its own. However, we should also note that all three major index ETFs are giving us small, indecisive (Doji-like) candles in the early session. So, there is not a lot of conviction. The short-term trend is bearish and the longer-term trend remains Bullish. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. We only have EIA Oil Inventory news scheduled during the day today. So, again, this should be a light news week overall until the CPI print on Thursday.

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 absolutely 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 money is 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

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Monday saw a gap higher at the open.  SPY gapped up 0.40%, DIA gapped up 0.38%, and QQQ gapped up 0.51%.  From there, the DIA meandered sideways until shortly past 10 am, when it began a rally that lasted until 2 pm before modestly selling off the last two hours of the day.  Meanwhile, SPY and QQQ meandered sideways until 11:30 am before modestly rallying the remainder of the day…even accelerating the last 15 minutes into the close.  This action gave us white-bodied candles in all three major index ETFs.  The SPY gave us a Bullish Harami that remained below its T-line (8ema).  Meanwhile, QQQ printed a white-bodied, Hammer, Bullish Harami that also remained below its T-line.  Finally, the DIA gave us a white-bodied, inside day that crossed back above its own T-line.

On the day, all 10 sectors were in the green with Financial Services (+1.00%) and Industrials (+0.95%) leading the way higher while Utilities (+0.03%) lagged behind the other sectors.  At the same time, the SPY gained 0.87%, DIA gained 1.13%, and QQQ gained 0.85%.  The VXX dropped 5.23% to 24.48 and T2122 climbed again but remains in the mid-range at 66.67.  10-year bond yields spiked (mostly prior to the open) to 4.101% while Oil (WTI) fell 0.37% to close at $82.51 per barrel.  This all took place on well-below-average volume in all three major index ETFs.  So, Bulls gapped the market higher and then modestly drift on up in light volume.  This felt like a drifting day more characterized by a lack of Bears than strength from the Bulls.

There was no major economic news reported Monday.  However, we did hear from three Fed members.  New York Fed President Williams said “The debate is really about: Do we need to do another rate increase? Or not? … I think we’re pretty close to what a peak rate would be.”  Williams later said “Assuming inflation continues to come down … then if we don’t cut interest rates at some point next year, then real interest rates will go up, and up, and up. And that won’t be consistent with our goals.” However, Fed Governor Bowman (a hawk) told an audience “I supported raising the federal funds rate at our July meeting, and I expect that additional increases will likely be needed to lower inflation to the goal.” 

SNAP Case Study | Actual Trade

In stock news, SHW shut down production at its Garland, TX plant after an explosion and fire.  No damage assessment or timeline for resumption is yet available.  Later, CPB announced it has agreed to buy SOVO for $2.33 billion in cash.  CPB will acquire the Michael Angelo’s and Rao brands from the deal.  Elsewhere, Reuters reported that PBR has said it is planning to increase its capital investments by 10% in its new 5-year plan versus the previous one.  The $86 billion 2024-2028 capital expense plan (specific projects) is set to be released before year-end.  At the same time, TOSYY (Toshiba) announced a $14 billion tender offer to take the company private.  The offer will be launched today agreeing to pay $32.44 per share.  Two-thirds of shareholders need to accept the offer for it to take effect.  (TOSYY closed at $16.47 after a 2.5% gain on the news.)  Meanwhile, TSN announced it will close four chicken processing plants (3,000 jobs in AR, IN, and MO) sometime late in 2023 or early 2024.  In the auto industry, STLA threw its hat into the electric vehicle ring saying that it will offer a Fiat brand low-cost ($27,000) EV July 2024.  In the air industry, ERJ announced that the demand for executive jets has not softened and the company still has a two-year backlog of orders.  At the same time, as reported here Monday, PARA announced that KKR has agreed to buy its Simon & Schuster unit for $1.62 billion.  In news that may become legal, PYPL announced Monday that it has launched a US Dollar backed stablecoin to compete with Tether (which has 67% of that market) and USD Coin (which has a 21% share of the market).  (The other US tech firm to try this was META, whose Libra stablecoin was killed by regulators.)

In stock legal, regulatory, and government news, the FTC agreed to dismiss its case that had been aimed at blocking the ICE $11.7 billion acquisition of BKI.  This came as both sides remain in negotiation about potential asset sales of the combined entity that would make the FTC more comfortable with the purchase.  Elsewhere, EU antitrust regulators formalized their opposition to the ADBE $20 billion purchase if Figma (a cloud-based design platform), which it said would remove an important rival to ADBE’s Photoshop.  A formal, final decision is now scheduled for December 14.  At the same time, the FDA approved a SAGE and BIIB partnership drug for postpartum depression but rejected it as a treatment for the broader-category “major depressive disorder.”  The market had assumed it would receive approval for the broader condition ($1 billion market) as opposed to the narrow market ($250 – $500 million market).  Meanwhile, Reuters reported that AMZN is preparing for a meeting with the FTC in an effort to head off portions or all of a long-awaited antitrust lawsuit against the e-commerce giant.  At the close, a federal judge put a predatory lending (hiding the true cost of borrowing from the borrower) lawsuit brought by the US Consumer Financial Protection Bureau and the NY Attorney General against CACC on hold.  The judge cited the US Supreme hearing a separate case brought by conservatives aimed at ruling the funding of the US CFPB is unconstitutional (and therefore the agency should not exist and should not be allowed to regulate or sue) as the reason.  Finally, after the close, PTRA filed for Chapter 11 bankruptcy.

After the close, BKD, PLUS, JELD, KD, MTW, NNI, PARA, PLTR, PRIM, RNG, SWKS, STRL, TDC, and WMK all reported beats on both the revenue and earnings lines.  Meanwhile, CTRA, CAPL, ICUI, KMPR, OKE, and PRI missed on revenue while beating on earnings.  On the other side, ACM, AEL, and ARKO beat on revenue while missing on earnings.  Unfortunately, CBT, CE, COMP, IFF, and MRC missed on both the top and bottom lines.  It is worth noting that ACM, PLUS, PLTR, and STRL all raised their forward guidance.  However, IFF lowered its forward guidance.

Overnight, Asian stocks were mixed but leaned red.  Japan (+0.38%) and Malaysia (+0.36%) were the only two appreciable gainers while Hong Kong (-1.81%), Thailand (-0.92%), and New Zealand (-0.55%) paced the losses.  Meanwhile, in Europe, with the lone exception of Denmark (+1.81%) the bourses are strongly red at midday.  The CAC (-0.96%), DAX (-1.27%), and FTSE (-0.62%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a strong move lower at the open.  The DIA implies a -0.62% open, the SPY is implying a -0.68% open, and the QQQ implies a -0.75% open at this hour.  At the same time, 10-year bond yields are plummeting to 3.984%, and Oil (WTI) is down 1.55% to $80.67 per barrel in early trading.

At least part of the reason for global stock weakness was a fall in China’s July Trade data, which fell more than expected.  The data showed Chinese exports were down 14.5% year-on-year in July while imports were down 12.5% versus July 2022. Meanwhile, in Europe, Italy surprised markets with a new 40% windfall profits tax on banks.  (That one-off tax will figure out to be about 19% of banks’ net profits for the year according to analysts at C.)  On this side of the pond, Moody’s cut the credit rating of 10 US banks and put 11 others on a “negative outlook” overnight.  Those whose credit rating was cut include BK, USB, STT, TFC, CFR, NTRS, MTB, PNFP, BOKF, and WBS.  Among those who saw a downgrade to a “negative outlook” were COF, CFG, and FITB.

The major economics news scheduled for Tuesday includes June Imports, June Exports, and June Trade Balance (all at 8:30 am), and API Weekly Crude Oil Stocks Report (4:30 pm).  The major earnings reports scheduled for before the opening bell include AHCO, ADT, ARMK, ATKR, GOLD, BR, CPRI, CEIX, DDOG, DUK, LLY, ENR, FOXA, GFS, HNI, HZNP, INGR, LCII, LI, NFE, NYT, NXST, NRG, OGN, PRGO, PLTK, RPRX, QSR, SEE, SEAS, STGW, TDG, UAA, UPS, VRTV, WMG, and ZTS.  Then, after the close, AKAM, AMC, BHF, CLOV, CPNG, DAR, EDR, FG, FLT, FNF, FNV, GNW, GO, IAC, IOSP, JXN, LILA, LYFT, DOOR, QGEN, QDEL, RXT, RIVN, SLF, SMCI, TTWO, TOST, MODG, and TWLO report.

In economic news later this week, on Wednesday, EIA Crude Oil Inventories are reported.  On Thursday, we get July CPI year-on-year, July CPI month-on-month, Weekly Initial Jobless Claims, July Federal Budget Balance, and the Fed Balance Sheet.  Finally, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.

In terms of earnings reports, on Wednesday, BERY, BHG, BCO, BAM, CRL, GEO, HMC, NOMD, OGE, PENN, RBLX, SONY, SWX, SLVM, UWMC, VTNR, VSH, WEN, APP, CACI, CANO, CENX, CDE, CPA, CRGY, ENS, G, ILMN, JAZZ, MFC, NGL, PAAS, TTEK, VSAT, DIS, and WYNN report. On Thursday, we hear from AQN, BABA, AIT, AZUL, TAST, HBI, KELYA, EYE, NVO, ACDC, RL, USFD, WWW, ASTL, BAP, and NWSA.  Finally, on Friday, ACDVF reports.

In miscellaneous news, BYND posted a 30% revenue decline last night and said there is falling demand for its artificial meat products.  Elsewhere, a trade group representing airlines has asked the FAA to extend the deadline for airlines to fly a minimum number of flights from NYC airports in order to maintain their gates and flight slots.  (Months ago, the FAA had given DAL until September 15 to comply with minimums unless they wanted to lose some NYC-originating routes. The group asked the FAA to extend this through the end of October.)

So far this morning, ALE, ARMK, DDOG, LLY, GFS, LI, OGN, PRGO, RPRX, QSR, TDG, UA, UAA, and ZTS all reported beats to both the revenue and earnings lines.  Meanwhile, ATKR, GOLD, BR, INGR, NFE, PLTK, SEE, and UPS all missed on revenue while beating on earnings.  On the other side, DUK, J, LCII, and NXST beat on revenue while missing on earnings.  Unfortunately, ADT, ENR, and SEAS missed on both the top and bottom lines.  It is worth noting that LI, LLY, and TDG raised forward guidance.  However, UPS and PLTK both lowered their forward guidance.

With that background, it looks like the Bears woke up in the mood to push this morning. All three major index ETFs are giving us gap-down, black-bodied candles this morning. (Meaning they are near their pre-market lows.) So far, QQQ and DIA are still inside candles, but all three are moving lower as the premarket session moves along. However, at least as of now, none of the three has taken out recent lows. So, they remain in the trading range. All three remain below their T-line (8ema) and the short-term trend is bearish. However, the longer-term trend remains Bullish. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. We only have Trade news scheduled during the day today. In fact, this should be a light news week overall until the CPI print on Thursday.

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 absolutely 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 money is 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

🎯 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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