Earnings Reports Calling The Tune Today

Markets opened flat on Wednesday and then ground sideways in a tight range for the first hour of the day.  Then we saw a strong rally for a little over 30 minutes before resuming the sideways grind until about 12:45 pm.  At that point, we saw a sharp selloff that also lasted about 30 minutes before bobbing along sideways for the next 1.5 hours.  A slower rally took over at about 2:30 pm to take price back near the highs of the day only to fade the last 30 minutes.  This left us with white-bodied candles with plenty of wick on each end.  The DIA printed a Doji-type candle and the SPY a Spinning Top.

All 3 of the major indices have now broken through their 50sma and medium-term downtrend.  Exactly half of the 10 sectors are green and half are down.  With that said, Technology is by far the biggest mover, up nearly 2.5% on the day on big moves by NFLX, NVDA, AMD, META, and AMZN.  Once again, all of this happened on below-average volume.  On the day, SPY gained 0.65%, DIA gained 0.20%, and QQQ gained 1.59%. The VXX fell 1.28% to 21.57 and T2122 (the 4-week new High/Low ratio) is deep in the overbought territory at 96.60.  10-year bond yields climbed back above the key 3% level to 3.034% and Oil (WTI) fell just over 1.5% to $102.61/barrel. 

In business news, Reuters reported that SHEL is looking to sell two of its US Gulf of Mexico oil and gas projects (fields), hoping to raise $1.5 billion.  Then after the close, as part of its quarterly report, TSLA announced it sold 75% of its Bitcoin to raise $936 million in cash. Also after the close, F announced it will cut as many as 8,000 jobs in order to raise money for its electric vehicle investments.  Then this morning F reassured markets that it already has secured 100% of the batteries it needs for its 2022 and 2023 plans.

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On the Russian invasion story, natural gas flows resumed from Russia via the Nord Stream 1 pipeline.  However, the flow resumed only at the reduced (60% of capacity) rate that Russia initiated in retaliation for sanctions.  On the ground, Russian forces are getting closer to Ukraine’s second largest power plant (after having previously taken the largest).  Elsewhere, US and European sources claim that Russia is taking the steps needed for their country to annex Eastern and Southern Ukraine by September.  This news comes the same day that Deputy Chair of the Russian Security Council said that Ukraine could disappear from the map as a result of current events.

After the close, STLD, KMI, CSX, CCK, AA, CCI, KNX, and VMI all reported beats on both the top and bottom lines.  Meanwhile, TSLA and EFX missed on revenue while beating on earnings.  On the other side, UAL, LVS, and WTFC beat on revenue while missing on earnings.  However, LSTR and SEIC reported misses on both the top and bottom lines.

So far this morning, T, PM, DOW, TRV, DHR, NOK, MMC, TSCO, IQV, DGX, IPG, KEY, ALK, SON, HBAN, SNA, and SNV have all reported beats on both the revenue and earnings lines.  Meanwhile, SAP, AAL, FITB, DPZ, and HRI all reported beating on revenue while missing on earnings.  On the other side, DHI, AN, BX, DOV, POOL, and TPH all missed on revenue while beating on earnings.  However, ABB missed on both the top and bottom lines.

Overnight, Asian markets were mixed but leaned to the upside.  Hong Kong (-1.51%), Shanghai (-0.99%), and Shenzhen (-0.94%) paced the losses as Real Estate market problems remained top of mind in China.  Meanwhile, Taiwan (+1.39%), South Korea (+0.93%), and Malaysia (+0.93%) led the gainers in the region.  In Europe, we see a similar story taking shape at mid-day.  The FTSE (-0.47%), DAX (-0.45%), and CAC (+0.32%) are typical of the performance spread in the region.  However, Russia (-1.03%) and a couple of other smaller exchanges are down more than a percent in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a mixed and mostly flat start to the day.  The DIA implies a -0.19% open, the SPY is implying a -0.13% open, and the QQQ implies a +0.03% open at this hour.  10-year bond yields are up to 3.051% and Oil (WTI) remains extremely volatile, down 4.5% to $95.42/barrel in early trading.

The major economic news events scheduled for Thursday is limited to Philly Fed Mfg. Index and Weekly Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for the day include AIR, ABB, ALK, AAL, T, AN, BX, DHI, DHR, DPZ, DOV, DOW, FITB, FCX, HRI, HBAN, IPG, IQV, KEY, MMC, NOK, NUE, PM, POOL, DGX, SAP, SNA, SON, SNV, TSCO, TRV, TPH, UNP, and WBS before the opening bell.  Then after the close, SAM, COF, ISRG, MAT, PPG, RHI, STX, SNAP, SIVB, THC, UFPI, VLRS, WRB, and WAL report. 

In economic news coming later this week, on Friday Mfg. PMI and Services PMI are released.

In earnings reports later this week, on Friday we hear from AXP, ALV, CLF, GNTX, HCA, NEE, NHYDY, RF, ROP, SLB, and VZ.

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Earnings remain the main focus for traders today. However, the Jobless Claims and to a lesser extent Philly Fed number coming at 8:30 may also drive markets. As of now, we look to open flat to modestly bearish. Still, there were a lot of strong earnings reports last night and so far this morning and the big tech names look to be trying to pull the rest of the market higher with them. So, don’t be surprised if the bulls find some energy…at least early. The QQQ shows a bullish trend, but the SPY and DIA are still just shy of getting that designation. With a gap to fill above in the large-cap indices, just keep in mind that the path of least resistance in the short term is upward.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

More Earnings Reaction On Tap Today

Stocks gapped higher Tuesday and then slowly followed through to the upside until about 2:15 pm.  At that point, we saw a sideways grind take shape that lasted until the bulls again stepped in the last half hour of the day.  This left us with all 3 major indices forming something like a Fig Newton pattern on the daily chart and closing near their highs.  It was also the best day in 3 weeks for US markets.  The SPY and DIA are still fighting with their respective 50sma and longer-term downtrend resistance levels.  However, QQQ has cleared both those levels and is trying to pull the large caps higher with it, on the strength of names like NVDA, AMD, META, GOOG, AMZN, and NFLX.  All 10 sectors were in the green, with Industrials and Technology leading the way.  On the day, SPY gained 2.70%, DIA gained 2.40%, and QQQ gained 3.08%.  The VXX was flat at 21.85 and T2122 spiked deep into the overbought territory at 98.71.  10-year bond yields have popped back above 3% to 3.028% and Oil (WTI) closed 1.2% higher at $103.81/barrel.  All-in-all, the day was a very nice move on below-average volume for the bulls.

In business news, AMZN sued thousands of Facebook group administrators who allegedly brokered false/fake AMZN product reviews.  META shut down more than 10,000 such groups that AMZN reported for this behavior.  Later in the day, a judge ruled that the trial over the lawsuit brought by TWTR against Elon Musk (seeking to force his $54.20/share purchase) will begin in October.  Musk had sought to delay the trial until mid-2023.  After the close ATVI announced that a second group of employees (this time Quality Assurance testers) have formed a union, just months before the company’s acquisition by MSFT closes.  While this is a tiny group (20 people), it does represent a second department where either ATVI or MSFT will need to deal with the same union (Communications Workers of America).

In China news, the middle-class backlash against the housing sector is building steam.  The real estate sector in China has a long history of starting huge housing projects, selling the units prior to completion, and then never finishing the development (often due to the developer defaulting on loans and going out of business).  A now widespread boycott of paying mortgage payments on such projects has taken root and spread.  Currently, Bloomberg reports more than 300 projects from 24 real estate developers spread across over 90 cities are now participating in the boycott.  This is tripled in size from my first report on it a couple of weeks ago.  This is huge news, because real estate makes up one-fifth of the Chinese economy and public protest of any kind is unheard of in that country.  Elsewhere, SEC Chair Gensler again told reporters it was unclear whether Chinese authorities and American regulators will reach a deal to avoid delisting 200 Chinese companies from US stock exchanges.  He went on to say he was not particularly confident.

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On the Russian story, the Wall Street Journal reported that EU sources are currently expecting that Russia will restart the flow of natural gas through the Nord Stream 1 pipeline (as scheduled) when the planned maintenance period ends Thursday.  The flow is expected to return to 60% of capacity (down 40% from prior levels).  Elsewhere, the Ukrainian First Lady will speak to the US Congress today.  She is expected to ask for more aid and condemn human rights abuses.  In that vein, the US is preparing yet another shipment (the 16th) of military aid for Ukraine.

After the close, OMC, JBHT, CALM, and PNFP all reported beats on both the top and bottom lines.  Meanwhile, IBKR beat on revenue while missing on earnings.  On the other side, NFLX missed on revenue while beating on earnings.  NFLX stock was up as much as 8.5% in after-hours trading as it lost fewer subscribers than analysts had expected (down just less than one million versus a loss of 2 million expected).

So far this morning, ABT, ASML, BIIB, TLSNY, NDAQ, CMA, and ELV all reported beating on both the top and bottom lines.  Meanwhile, MTB missed on revenue while beating on earnings.  On the other side, AKZOY, NTRS, and FHN beat on revenue but missed on earnings.  Finally, BKR, WIT, and HCSG reported misses on both lines.

Overnight, Asian markets were green across the board.  Japan (+2.67%) was an outlier to the upside as the Bank of Japan decided to remain accommodative in fear that economic growth is uncertain (they did not raise rates).  Singapore (+1.68%), Australia (+1.65%), and Hong Kong (+1.11%) led the region higher.  It is worth noting that Hong Kong ended its city-wide Covid isolation program.  In Europe, stocks are mixed but lean to the red side at mid-day.  The FTSE (-0.27%), DAX (-0.39%), and CAC (-0.26%) are leading the region lower.  However, 7 of the smaller exchanges are in the green, led by Greece (+0.95%) and Russia (+0.80%).  As of 7:30 am, US Futures are pointing toward a flat to modestly red start to the day.  The DIA implies a -0.16% open, the SPY is implying a -0.13% open, and the QQQ implies a flat -0.03% open at this hour.  10-year bond yields as back down to 2.969% and Oil (WTI) is off almost 2% to $102.21/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to June Existing Home Sales (10 am) and Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day include ABT, ASML, BKR, BIIB, CMA, ELV, LAD, MTB, NDAQ, NTRS, and WIT before the opening bell.  Then after the close, AA, CCI, CCK, CSX, DFS, EFX, KMI, KNX, LSTR, LVS, SEIC, STLD, TSLA, UAL, VMI, and WTFC report. 

In economic news coming later this week, on Thursday we get Philly Fed Mfg. Index and Weekly Jobless Claims.  Finally, on Friday Mfg. PMI and Services PMI are released.

In earnings reports later this week, on Thursday we get reports from AIR, ABB, AAL, T, AN, BX, DHI, DHR, DPZ, DOV, DOW, FITB, FCX, HRI, HBAN, IPG, IQV, KEY, MMC, NOK, NUE, PM, POOL, DGX, SAP, SNA, SON, SNV, TSCO, TRV, TPH, UNP, WBS, SAM, COF, ISRG, MAT, PPG, RHI, STX, SNAP, SIVB, THC, UFPI and WRB.  Finally, on Friday we hear from AXP, ALV, CLF, GNTX, HCA, NEE, NHYDY, RF, ROP, SLB, and VZ.

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Earnings season remains the top story for markets. However, Mortgage demand dropped to its lowest point since 2000 last week as the average 30-year fixed-rate conforming loan rate rose to 5.82%.  This comes as the overall demand fell another 6%, as new home purchase applications were down 7% week-on-week (down 19% versus the same week last year) and refinance applications fell 4% on the week. So, the housing market will also get some focus from traders.

Recession fears (including those stoked by Russia) will remain in the back of trader’s minds and eyes will also start drifting toward the Fed with a rate meeting next week. Futures are showing a very modestly bearish start to the day right now. However, there are more earnings reports coming before the open and overall the market is in a positive mood after yesterday’s strong showing. Remember that the SPY is still fighting with its mid-term downtrend line and 50sma. So, volatility remains a high probability. The only two things that we know for sure are that we are seeing very low volumes (which tells us there is not much conviction in either the bull or bear camps) and we also know the longer-term trend remains bearish, while we have been in a sideways to slightly bullish more for a few weeks.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: HALO, INSG, AGNC, XBI, SWKS, INMD, RIVN, BMY, NFLX. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Earnings, Downturn, and Gazprom Lead

Markets gapped about 1% higher for the second straight time on Monday, following Europe and Asia.  They even managed to follow-through for a few minutes.  However, by 10 am, a long, slow selloff had taken over to more than fill the gap and drive to the lows of the day before rebounding the last 10 minutes of the day.  This left us with gap-up, Bearish Engulfing Candles with an upper wick on all 3 major indices.  Once again, all this action is taking place on very low volumes. Energy was far and away the biggest gaining sector, while Healthcare was by far the biggest losing sector of the session.  Four of the 10 sectors were positive with the other six being negative.  On the day, SPY lost 0.79%, DIA lost 0.64%, and QQQ lost 0.85%.  The VXX gained 1.72% to 21.91 and T2122 was flat remaining in the overbought territory at 81.63.  10-year bond yields rose to 2.982% and Oil (WTI) spiked 4.64% to $102.12/barrel.

In economic news, despite the increase in bond yields, the curve remains inverted.  The 5-year bond yields is higher than the 10-year bond yield and the 2-year yield is higher than the 5-year yield.  So “2s vs 5s,” “5s vs 10s,” and “2s vs 10s” are all inverted, which are all potential indicators of a coming recession.  Also related to bonds, it was announced that China’s holdings of US Bonds (debt) fell to $980 billion, below $1 trillion for the first time in 12 years (since May 2010). I am not sure if this is a reflection of the health of the Chinese economy, on Chinese perception of US debt risks, come combination of the two, or pure coincidence.

In business news, more companies are reporting belt-tightening.  Early in the day Monday, GS announced it will slow hiring and reinstitute year-end performance reviews and staff reductions.  Later, AAPL said they will slow hiring and reduce spending for some groups.  This comes after MSFT reported over the weekend that they had laid off 1% of its staff and GOOGL said last week they will slow hiring and expected employees to work harder to avoid job cuts.  It was also reported (but not announced) that META has told team managers to weed out poor performers to reduce staff sizes as its Ad business struggles.

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On the Russian story, as many expected, state-owned Gazprom said that due to “unforeseen circumstances” it is not in a position to comply with gas contracts in Europe.  This claim was made to not only cover future non-supply but also to cover the gas shipment reductions (40%) that Gazprom has put in place since June (as direct responses to Western sanctions). Germany has forcefully rejected the Gazprom “force majeure” claim.  European economists are projecting scenarios where the cutoff of Russian gas would reduce the German GDP by at least 6% with major industries like chemicals being shut down nearly completely.  So, in addition to people staying warm in winter, such a move would crush the European economy.

In Forex news, the dollar dropped early this morning on rumors that the ECB will raise rates by 50 basis points amidst a worsening inflation background.  European bonds and stocks fell on the more hawkish outlook. 

After the close, IBM reported beats on both the top and bottom lines.  However, the company slightly reduced guidance for the year in terms of free cash flow (from $10.5 billion to $10 billion) as well as reporting that gross margins shrank from 55.2% (Q1) to 53.4% (Q2).  So far this morning, JNJ, VLVLY, TFC, HAL, TELNY, CFG, and SBNY have all reported beats on both lines.  Meanwhile, NVS, MAN, and HAS all missed on revenue while beating on earnings.  However, ALLY reported a miss on both the top and bottom line.

Overnight, Asian markets were mixed but leaned heavily to the red side on modes moves.  Japan (+0.65%) and India (+0.38%) were the only appreciable gainers.  Meanwhile, Hong Kone (-0.89%), Thailand (-0.74%), and Australia (-0.56%) paced the losses.  In Europe, stocks are also mixed on modest moves at mid-day.  Russia (-1.92%) is by far the biggest loser.  Meanwhile, the FTSE (+0.28%), DAX (+0.01%), and CAC (-0.12%) are typical of the region in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.66% open, the SPY is implying a +0.83% open, and the QQQ implies a +0.88% open at this hour.  10-year bond yields remain flat at 2.98% and Oil (WTI) is down almost 2% to $100.57/barrel.

The major economic news events scheduled for Tuesday include June Building Permits and June Housing Starts (both at 8:30 am).  The major earnings reports scheduled for the day include ALLY, CFG, HAL, HAS, JNJ, LMT, MAN, NVS, SBNY, and TFC before the opening bell.  Then after the close, CALM, IBKR, JBHT, NFLX, and OMC report.

In economic news coming later this week, on Wednesday, June Existing Home Sales and Crude Oil Inventories are announced.  On Thursday we get Philly Fed Mfg. Index and Weekly Jobless Claims.  Finally, on Friday Mfg. PMI and Services PMI are released.

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Again, earnings season and recession fears (including those stoked by Russia) are top of mind for most traders. There are smaller issues that pop up, such as rumors NCR is in talks to be acquired by a private equity firm or that individual companies are tightening belts to get ahead of a downturn. However, with the Fed still more than a week out, those two major themes dominate markets. Futures are showing that markets are in a positive mood this morning. However, expect more volatility and chop. The only two things that we know for sure are that we are seeing very low volumes (which tells us there is not much conviction in either the bull or bear camps) and we also know the trend remains bearish until it is broken and price proves it can hold the break.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: MRVL, DKNG, C, SOFI, KWEB, CGC, WMT, AAPL, ARKK, NFLX, AFRM. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Earnings Top the News This Morning

Stocks gapped 1% – 1.5% higher across all 3 major indices on Friday.  However, from that point they just ground sideways in a very tight range, until a pop higher the last 5 minutes of the day.  This left us with gap-up, white-bodied candles that closed very near the high of the day.  Each of those 3 major indices are now sitting just above their respective T-lines (8ema).  It’s worth noting volume remains well-below average.  All 10 sectors were solidly green with Financial Services being by far the hottest group. On the day, SPY gained 1.87%, DIA gained 2.04%, and QQQ gained 1.81%.  The VXX fell 3.5% to 21.54 and T2122 spiked just up into the overbought territory at 81.67.  10-year bond yields fell to 2.926% and Oil (WTI) prices were up almost 1.9% to $97.55/ barrel.  It’s worth noting that the 2yr vs 10yr bond yields and 5yr vs 10yr bond yields both remained inverted at the end of the week.  By the end of the day Friday, 31.35% of stocks were trading above their 40sma.  At the same time, 16.16% of stocks are trading above their 200sma. 

Taking a broader look, on the week, SPY was down 0.92%, QQQ was down 1.17%, and DIA was down 0.24%.  All 3 printed Hammer-type candles on that weekly chart.  However, all 3 also remain below their weekly T-lines and 50sma levels.  Those 50smas also continue to fall.  In short, the trend remains to the downside.

In economic news Friday, the NY Empire State Mfg. Index came in much higher than expected (11.10 vs -2.00 forecast and -1.20 in June).  June Retail Sales also came in a bit above expectation (+1.0% vs +0.8% estimated and -0.1% the prior month).  However, May Business inventories rose slightly more than expected and May Retail inventories were the same as the prior month.  Finally, the Michigan Consumer Sentiment came also in slightly above forecast (47.3 actual versus 47.0 consensus estimate but still down from the June 47.5).  Taken as a whole, these are clues that the Fed will continue on course for a 0.75% rate hike on July 27.

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In supply chain news, over the weekend, President Biden took action to prevent 115k railroad workers from striking today (and for another 60 days). He also appointed an emergency board whose task is to find a contract compromise within 30 days.  This action prevents 30% of US freight from coming to a halt.  However, from a different direction, ADM is among the major rail users already complaining about inadequate (untimely) rail service. The nation’s ports are staggering from slow rail (and trucking) service causing containers to stack up and having nowhere to put them.  The Port of Los Angeles currently has over 33,000 containers waiting for an average of 9-plus days for pickup by rail or trucking shippers. MarineTraffic says over 640,000 containers are sitting on ships waiting to be unloaded at US ports at the moment.  And CNBC says that out of all US ports, only the Norfolk, VA, and NY/NJ ports are operating at normal speeds.  As a potential answer to this, railroads are proposing that they be allowed to reduce the minimum staffing for a train from two to one employee. Not surprisingly, unions oppose the move as a major safety hazard.

In the invasion story, Saturday Russia took another step back toward a centrally-planned economy.  Putin has appointed a new Deputy Prime Minister (Manturov, formerly Trade Minister) whose job is to mobilize the Russian economy to support the war. New laws force companies to accept military contracts (on the military’s terms) and force workers to work nights, weekends, and holidays, as well as give up vacations if the company feels it necessary. Manturov also declared two new focuses of the Russian economy.  First, he plans to develop local (Russian-made) attack drones.  Second, Taiwan won’t sell them advanced chips and even after ramping up the buying of lower-end chips from China, they have decided they want to develop a Russian semiconductor industry (which will take years at best). 

On the same topic from a different perspective, the first step toward creating this new industry would be to get the lithography equipment needed to make a semiconductor Fab plant. However, currently, ASML (Netherlands) is the only source of lithography equipment in the world and they won’t sell to Russia.  So, Russia will need to steal and/or develop this technology to compete with ASML. Elsewhere, from a European economy point of view, Gazprom announced that they extracted 10% less and exported 33% less natural gas in the first 6 months of 2022 compared to 2021. With the natural gas flow now shut down completely (ostensibly for maintenance) and fear Russia will not turn it back on, the SHEL CEO warned Europe that energy rationing may hit the region by winter and the IEA concurred that Russia is likely going to prevent European nations from filling storage tanks before winter to maximize their leverage.

Overnight, Asian markets were green across the board.  Hong Kong (+2.70%), South Korea (+1.90%), and Shanghai (+1.55%) led the region higher but even the laggard (New Zealand) was up 0.37%.  (Japan was closed today for a holiday.) In Europe, the same is true with the exception of Russia (-0.62%) at mid-day.  This comes on optimism from the EU announcing it will sign a new gas supply deal with Azerbaijan (to replace Russian gas) and a weakening dollar.  The FTSE (+1.19%), DAX (+1.28%), and CAC (+1.53%) are leading the region up in early afternoon trading.  As of 7:30 am, US Futures are pointing toward another significant gap higher to start the day.  The DIA implies a +0.96% open, the SPY is implying a +1.01% open, and the QQQ implies a +1.18% open at this hour.  10-year bond yields are at 2.956% and Oil (WTI) is up almost 2% to $99.51/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include BAC, SCHW, GS, PLD, and SYF before the opening bell.  Then after the close, we hear from IBM.  So far this morning, GS, NRCBY, and SYF have all reported beats on both lines.  BAC beat on revenue while coming in light on earnings.  (SCHW and PLD report closer to the bell.)

In economic news coming later this week, on Tuesday we get June Building Permits and June Housing Starts.  Then Wednesday, June Existing Home Sales and Crude Oil Inventories are announced.  On Thursday we get Philly Fed Mfg. Index and Weekly Jobless Claims.  Finally, on Friday Mfg. PMI and Services PMI are released.

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Earnings season will continue to be a big story and leads the news today. Futures are showing that markets like what they hear out of Europe and earnings so far today. However, be aware that both large-cap indices gaps could be seen as testing the mid-term downtrend. (As the old saw goes, “trust but verify”…or in our case get confirmation.) We certainly could have put in a bottom, but the most recent swing-low was a lower-low (for the DIA and SPY) and that puts a kink in a new bullish trend. So, expect more volatility and chop. Since the vast majority of traders don’t remember a similar situation, we are likely to whipsaw back and forth as the market re-learns the lessons taught in prior decades. There are only two things that we know for sure. First, the low volumes of the last few weeks tell us there is not a huge amount of conviction in either the bull or bear camps (and a LOT of retail traders have fled the market). Second, we know the trend remains bearish until it is broken and price proves it can hold the break.

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: AI, BA, ARKK, AFRM, TDOC, TCOM, DKNG, TGT, AAPL, NFLX, RIDE, TLT, C. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

ERs Mixed, China Weak, Fear of Russia High

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

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

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

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

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

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

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

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

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

LTA Scanning Software

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

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Silly Season Starts, Market Mulls 1% Hike

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

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

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

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

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

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

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

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

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

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

LTA Scanning Software

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

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

All Eyes on CPI, Earnings Season 1 Day Off

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

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

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

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

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

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

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

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

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

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

LTA Scanning Software

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

Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

PEP Beats But Futures Red This Morning

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

LTA Scanning Software

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

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and take those profits when you have them. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Recession Fear and Musk-TWTR Top of Mind

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

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

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

LTA Scanning Software

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

Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and take those profits when you have them. Remember that trading is our job. So, do the work and follow the process. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! One way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

All Eyes on June Payrolls

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

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

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

SNAP Case Study | Actual Trade

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

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

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

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

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

LTA Scanning Software

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

Remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! (So don’t give very damn much of it back while hoping for a home run.) Another way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

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

TC2000 Discount

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

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

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

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

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

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

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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

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