Markets started the day slightly lower on Wednesday with the SPY gapping down 0.25%, DIA down 0.11%, and QQQ down 0.48%.  All three major index ETFs spent the first 45 minutes grinding sideways in a tight range. At that point, the SPY started a rally that recrossed the gap and reached the high of the day at 12:20 pm.  From there, a sharp selloff crossed the gap once again by 1 pm, and then price wobbled sideways until a rally in the last 5 minutes took SPY out above the prior close.  Meanwhile, QQQ was more volatile, rallying sharply from 10:15 to 10:55 am then selling off sharply until 11:30 am, rallying up to the highs of the day at 12:20 pm, selling very hard back down into the gap by 1 pm, and then grinding sideways the rest of the afternoon.  However, DIA had a mid-day bump but ground sideways along the lows almost all day.  This action gave us a white-bodied Spinning top (larger body) candle in the SPY, a white candle with a larger upper wick in the QQQ, and a black-bodied Dragonfly Doji in the DIA.  Both SPY and QQQ held above their T-line (8ema) after a retest while DIA failed to even retest its T-line after gapping down below it.

On the day, five of the 10 sectors were in the red with Utilities (-1.34%%) way out front leading the market lower while Energy (+0.68%) held up better than other sectors.  At the same time, SPY gained 0.05%, DIA lost 0.18%, and QQQ gained 0.20%.  The VXX dropped 3.65% to close at 24.83 and T2122 dropped back to just inside the edge of the overbought territory at 80.10.  10-year bond yields fell to 3.716% while Oil (WTI) gained 2.13% to close at $69.14 per barrel.  So, overall, the day was much ado about nothing.  After a gap lower, the leading index ETFs recovered quickly rethought the rebound, and then drifted.  Meanwhile, the laggard mega-cap DIA spent the day on the South side of the open without really participating in the rebound.  This happened on less-than-average volume in all three major index ETFs but the QQQ was much closer to an average volume day than the other indices.

The major economic news on Wednesday included Preliminary May Trade Goods Balance, which came in a bit better than expected at -$91.13 billion (compared to a forecast of -$92.90 billion and much better than the April reading of -$97.10 billion).  At the same time, Preliminary May Retail Inventories were reported as dead flat at +0.0% (versus the April reading of -0.3%). Later the EIA Weekly Crude Oil Inventories showed a much bigger drawdown than was expected at -9.603-million-barrels (compared to a forecast calling for -1.757-million-barrels and well more than the prior week’s -3.831-million-barrels).  In Fed-speak, FOMC Chair Powell spoke at a Conf. in Portugal on Wednesday saying that “more restriction is coming.”  He went on to say that he would not take “moving at consecutive meetings off the table.”  Later, during questions he said he did not expect a recession, clarifying that “There’s a significant possibility that there will be a downturn … it’s not the most likely case, but it’s certainly possible.”  An interesting aside is that Powell told the conference that the US would not hit the Fed’s 2% inflation target until 2025.  Then, after the close, the Fed announced that all 23 major US banks passed its annual stress test.   Despite $541 billion in projected loan losses across the group, the Fed projects that even during a severe global recession (including a 40% decline in real estate prices) the banks would be able to continue to provide credit and maintain their capital requirements.  Under that severe scenario, the largest banks saw their capital levels drop to 10.1% while large regional banks’ capital levels fell to the 6%-8% level.

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In stock news, in what seemed an odd announcement STLA said it had partnered with an ad agency specifically to reach out to black customers.  (I see nothing odd about targeting any demographic.  However, a press release of doing so just seems weird.)  Later in the day, STLA placed a MI plant on “critical status” which the union contract allows the company to require mandatory overtime.  This move is intended to allow the company to stockpile Jeep/Dodge inventory ahead of a potential strike in September.  Elsewhere, for the second time this week, TRI announced they have reached a deal to buy a company, this time acquiring Imagen (a digital content management company) for an undisclosed price.  At the end of the day, ORCL announced it has modified its database software (primary product) to allow it to run on processors made by startup chip company Ampere (founded by former INTC executives).  This move is intended to allow ORCL to boost cloud computing performance in order to better compete with AMZN and MSFT in that market.  After the close, UPS announced it was working with law enforcement after some of their Canadian shipper customers were hit with cyber phishing attacks disguised as text messages from UPS.  Also after the close, as part of the stress test announcements, Fed Vice Chair for Bank Supervision Barr said banks are expected to announce revisions to their dividend and buyback plans after the close on Friday.

In stock legal and regulatory news, ATVI announced Wednesday that it is adding to its staff in the EU (Spain), following through on one of the promises made to gain EU approval of the MSFT acquisition of the company.  This came after ATVI said it would be reassessing its growth plans in the UK after that country blocked the acquisition and as the CEOs of the two companies testified in the US as part of the FTC lawsuit to block the deal.  Speaking of which, the CEOs of MSFT and ATVI both told a San Francisco Federal court that ever making ATVI games exclusive to MSFT hardware would not make any strategic sense.  ATVI CEO Kotick told the court that if MSFT did ever do that, they would have a revolt on their hands from the 100 million monthly active users.  In other Tech news, NVDA tried to head off rumored additional restrictions on chip sales to China.  The CFO of NVDA said Wednesday that any additional export restriction on sales of chips to China would cause a “permanent loss of opportunities for the US chip industry” (mean NVDA).  Elsewhere, a US district judge dismissed a case against AMZN which had alleged the e-commerce giant had sold “suicide kits” to teenagers.  At the same time, JOBY received FAA approval for flight testing of the company’s “electric air taxi” vehicles.  Meanwhile, SOLVY reached a $393 million settlement with the NJ Dept. of Environmental Protection related to drinking water pollution with “forever chemicals” from the company’s NJ plant.

After the close, MU, WOR, and BB beat on both the revenue and earnings lines.  At the same time, CNXC beat on revenue while missing on earnings.  However, FUL missed on both the top and bottom lines.  It should be noted that MU lowered its forward guidance.  The only major surprise was a 40% upside earnings shock from WOR.  Finally, it is worth noting that MU was upbeat about the current quarter and said that the recent chip glut is beginning to ease.  This came after a crash in computer and phone sales had caused the company’s (and the industry’s) inventories to build.

Overnight, Asian markets were mixed.  Hong Kong (-1.24%) was by far the biggest loser followed by South Korea (-0.55%).  The gainers were led by Thailand (+0.86%), India (+0.82%), and New Zealand (+0.64%).  Meanwhile, in Europe, 13 of the 15 bourses are in the green at midday.  The CAC (+0.81%), DAX (+0.22%), and FTSE (-0.24%) are typical of the performance spread in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a higher start for the day.  The DIA implies a +0.30% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.33% open at this hour.  At the same time, 10-year bond yields are back up to 3.745% and Oil (WTI) is up almost six-tenths of a percent to $69.95 per barrel in early trading.

The major economic news events scheduled for Thursday include Q1 GDP, Q1 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am), and May Pending Home Sales (10 am).  We also hear from two Fed speakers, Chair Powell (2:30 am) and Bostic at 3 pm.  The major earnings reports scheduled for Thursday include AYI, GBX, MKC, MSM, PAYX, and RAD before the open.  Then, after the close, NKE reports.        

In economic news later this week, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

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

In miscellaneous news, SPCE is set to launch its first commercial space flight via a rocket released from a jet on Thursday.  The flight will take three passengers 50 miles above New Mexico.  Elsewhere, AAPL printed another record high close Wednesday.  This brought the company enticingly near a $3 trillion market cap at $2.98 trillion.  (The company briefly reached the $3 trillion mark intraday on January 3, 2022, but has never closed above that level.)  So, watch that as something traders push for and as a news event today. Finally, Fed Chair Powell again warned that tighter monetary policy was on the way in an overnight (2:30 am) presentation in Europe.  For what it is worth, the CME Fed Watch Tool now shows an 82% probability of a quarter-point hike in July as of now.

So far this morning, RAD and GBX reported beats to both the revenue and earnings lines.  Meanwhile, MKC and AYI both reported misses on revenue while beating on earnings.  On the other side, MSM beat on revenue while missing earnings by a penny.  It is worth noting that RAD and GBX both raised forward guidance.  (There were no guidance reductions at least as of yet.)  RAD (+51%) and GBX (+70%) were the only major surprises reported and significantly neither came against reduced forecasts.

With that background, it looks like all three major index ETFs are looking to move higher again, at least early. The DIA is crossing back above its T-line in premarket action and all three are printing strong white-body candles so far this morning. However, it is early and the GDP data coming at 8:30 am could throw a wrench into the works. Remember that we have only two days left until the month and quarter end. So, there could be some window dressing going on. In addition, with the holiday on Tuesday, many money managers plan to take Monday off…which provided extra temptation to sneak out early to stretch the off-time into a real rest. My point is that volumes may die even more and prices may drift into the weekend. In terms of extension, none of the three major index ETFs is far from their T-line and the T2122 indicator has dropped back to just the lower edge of its overbought territory. Therefore, we have room to run in either direction.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Tuesday was a Bullish day for markets as the SPY gapped up 0.21%, QQQ gapped up 0.43%, and DIA opened dead flat.  From there, all three major index ETFs gave a slow, steady rally until 2:30 pm.  The last 90 minutes of the day saw the SPY, DIA, and QQQ grind sideways in a tight range and then take profits in the last 10 minutes.  This action gave us large white candles with tiny wicks that crossed back above the T-line (8ema) in all three.  (DIA barely crossed above.)  In the process, you could see the price as having broken a (tight) downtrend line in the SPY, DIA, and QQQ.  This happened on less-than-average volume in the SPY and QQQ and significantly less-than-average volume in the DIA.

On the day, eight of the 10 sectors were in the green with Consumer Cyclical (+2.17%) and Technology (+1.98%) leading the way higher while Healthcare (-0.18%) was the laggard on the day. Meanwhile, SPY gained 1.10%, DIA gained 0.60%, and QQQ gained 1.72%.  The VXX lost 2.50% to close at 25.77 and T2122 jumped back up into the overbought territory at 87.88.  10-year bond yields climbed to 3.766% while Oil (WTI) dropped 2.28% to close at $67.80 per barrel.  So, the bulls were in charge all day on Tuesday with only some very late profit-taking keeping us from closing on the highs.  As has been the case all year, once again, DIA was the laggard. 

The only major economic news on Tuesday, Building Permits came in a bit above the expected value at 1.496 million (compared to 1.491 million forecast and well above the previous value of 1.417 million).  That was a month-on-month increase of 5.6% (versus the anticipated +5.2% but far above the prior value of -1.4%).  Later, May Durable Goods Orders were better than anticipated at +1.7% (compared to a forecast of -1.0% and even increased from the April reading of +1.2%).  Then the Conference Board Consumer Confidence indicator came in well above expectation at 109.7 (versus a forecast of 104.0 and well above the May value of 102.5).  At the same time, May New Home Sales were reported well above what was predicted at 763k (compared to a forecasted 675k and the April reading of 680k).  That was a 12.2% increase versus April’s +3.5% month-on-month growth.  Finally, after the close, the API Weekly Crude Oil Stocks report showed a larger-than-expected drawdown of 2.408-million-barrels (compared to an expected draw of 1.467-million-barrels and well more than the prior week’s 1.246-million-barrel drawdown). 

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In stock news, BAC opened new branches in nine markets (across four states) on Tuesday, bringing its coverage to 3,800 branches spread over 39 states.  (Among the major banks, this is second only to JPM which has branches in 49 states.)  Elsewhere, STLA announced they are launching their own electric vehicle charging business unit to provide customers access to “partner’s charging networks.”  At the same time, CIR announced it has accepted a $1.7 billion offer ($51/share plus debt) from KKR to take the company private.  Meanwhile, TRI announced it has agreed to a $650 million all-cash deal to acquire legal startup Casetext (which has an AI assistant for use by legal professionals).  Then, by mid-afternoon, Bloomberg was reporting that UBS plans to cut more than half of the CS workforce bringing the overall reduction of the combined company to 30% (10,000 jobs reduced).  Later, SMNEY, ABBV, and SBGSY (Schneider Electric) were added to the global list of companies hit by the MOVEit hack (perpetrated by Russian state-sponsored hacking group CIOp).  After the close, SPR and its machinist union reached a tentative deal to end a strike at the company’s Wichita, KS plant.  Union members will vote on the deal Thursday.  (SPR is the main supplier of fuselage assemblies for BA.)  At the same time, the Wall Street Journal reported that Adalytics research has found that GOOGL video ads on other websites violated their promised standards (giving the company’s own internally-placed ads preference) 80% of the time.  (This is a key complaint and could well be important to EU efforts to force GOOGL to divest of their ad network while selling ads of their own.)  GOOGL disputed the findings.

In stock legal and regulatory news, the state of Washington announced they will be following other states in mandating that charging stations that participate in state programs must include a TSLA plug.  Later, the Consumer Financial Protection Bureau fined ACIW $25 million for improperly electronically processing $2 billion in payment transactions without customer authorization.  Elsewhere, hearings started Tuesday for JNJ’s second attempt to eliminate liability for talc cancer claims through the bankruptcy of the subsidiary onto which JNJ has transferred all liability.  Cancer victims are fighting the filing as an obvious abuse of bankruptcy law.  However, JNJ claims its recent $8.9 billion settlement offer (spread over decades) has the support of many of the 38,000 lawsuit-filing attorneys.  Meanwhile, a US district judge in CA rejected AAPL’s bid to have a class action lawsuit thrown out.  The suit alleges that AAPL of defrauded its shareholders by concealing the falling demand for iPhones in China (via comments made by CEO Cook shortly before an earnings report showed the demand had, in fact, dropped sharply).  REGN stock plummeted Tuesday after the company received a “Complete Response Letter” from the FDA related to the company’s aflibercept drug.  However, the letter was solely because the FDA is currently reviewing inspections of a third-party filler of prescriptions for the treatment…not due to any investigation into either REGN or the drug itself.  However, late in the day, the FDA did decline to approve a new higher-dose version of REGN’s Eylea blindness treatment.

In partially explanatory news, there were rumors Tuesday and more reports overnight that the Biden Admin is considering adding more restrictions on the sale of chips to China. This led NVDA (which has developed lower-powered chips to circumvent current restrictions) to drop almost 3.5% yesterday. (It is worth noting that NVDA gets 20% of its revenue from sales to China.) AMD, which is the other super-power in creating AI chips was also down more than 3% on the day. The object of the potential restrictions is the artificial intelligence race and protecting the US (and MSFT as well as GOOGL) lead in that new technology. However, we should note that the same computational results can be obtained from a vast array of lower-end processors as opposed to a smaller array of higher-end ones…just in a much less efficient and more electric-intensive way.

In mortgage news, we saw a reversal of recent relationships last week.  For a long time, it had been the norm that rates drove activity, particularly in home sales.  This week, strong home sales drove rates.  (Tuesday’s new home sales report showed May with a 12% increase in sales versus April and a 20% increase compared to May 2022.)  Weekly mortgage applications for the purchase of homes were up 3% for the week as were applications for a refinance loan.  This came despite the rate for a 30-year, fixed-rate, conforming loan increasing from 6.73% to 6.75%.  (Closing points remained at 0.64%.) 

In earnings news, after the close, JEF missed on both the revenue and earnings lines. 

Overnight, Asian markets were mostly in the green, with Japan (+2.02%), Australia (+1.10%), and India (+0.82%) pacing the gains.  Meanwhile, Thailand ( -0.76%), South Korea (-0.67%), and Shenzhen (-0.47%) were the only red in the region.  In Europe, we see an even stronger picture taking shape at midday.  Only Portugal (-0.05%) shows any red while the CAC (+0.86%), DAX (+0.82%), and FTSE (+0.66%) lead the continent higher in early afternoon trade.  In the US, as of 7:30 am, Futures point to a modestly lower start to the day.  The DIA implies a +0.02% open, the SPY is implying a -0.15% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields have fallen again to 3.737% while Oil (WTI) is flat at $67.71 per barrel in early trading.

The major economic news events scheduled for Wednesday include Preliminary May Goods Trade Balance and May Preliminary Retail Inventories (both at 8:30 am), EIA Crude Oil Inventories (10:30 am), and Fed Bank Stress Test Results (4:30 pm).  We also hear from Fed Chair Powell (9:30 am) and President Biden (on the economy) at 1 pm.  The major earnings reports scheduled for Wednesday are limited to GIS and UNF before the open.  Then, after the close, CNXC, FUL, MU, and WOR report.         

In economic news later this week, on Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, a survey published Tuesday by NatWest found that US fund managers are factoring in greenhouse gas emissions and other climate risks into their debt investment decisions just as much as peers in Europe.  This comes despite Republican efforts in many states and in the US House to make such considerations illegal in the US.  In a related story, BLK CEO Fink told a conference he has simply stopped using the politically weaponized term “ESG” (which many on the far right have labeled “woke”). Instead, he talks to businesses his funds may invest in about decarbonization, corporate ethics, and responsibility without the term. In other news, ERCOT reported that electric use in TX reached an all-time high on Tuesday as the heatwave continued.  ERCOT maintained its request for customers to limit usage but said it has enough resources to meet current demand at the moment.  Elsewhere, the US Dept. of Transportation decided that the New York City plan to charge a “vehicle congestion toll” would not have a significant impact on the environment and therefore does not require an environmental study.  Interestingly, it is Democratic lawmakers (from NJ, of course) who are fighting the toll as nothing but a money grab by NYC.  (If/when implemented this would be the first of its kind toll in the US, similar to what is in place in London and Singapore.)

So far this morning, GIS reported a miss on revenue while beating on the earnings line.  (UNF reports later at 8:10 am.)

With that background, it looks like all three major index ETFs are holding onto their T-line (8ema) during retests from above in the premarket. However, it’s still very early and none of the premarket candles are decisive with all of those ETFs printing Spinning Top type candles so far. From a higher-level view, all three seem to be trying to reverse the recent Bull Flag pullback pattern. In terms of extension, obviously (given the premarket retest), none of the three major index ETFs is too far from their T-line. However, the T2122 indicator is back up in the overbought territory with more than half of that range left above. So, both sides have room to run.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Monday, markets started just on the red side of flat with SPY gapping down 0.12%, DIA also gapping down 0.12%, and QQQ gapping down 0.14% at the open.  From that point, the large-cap indices ground sideways with the DIA slightly more bullish than SPY until 3:40 pm.  Meanwhile, QQQ had an immediate rally at the open only to sell off strongly from 10:10 am until 12:45 pm.  After that, QQQ ground sideways along the lows in a tight range until 3:40 pm.  However, in the last 20 minutes of the day, all three major index ETFs sold off, taking the SPY and QQQ out very near the lows of the day.  This action gave us a black-bodied Inverted Hammer candle in the SPY (which failed a retest of the T-line at its highs), another white-bodied Doji-type candle in the DIA, and a large, black- candle with significant upper wick (which failed a test of its T-line as well).  This happened on less-than-average volume in the QQQ and significantly less-than-average volume in both the SPY and DIA.

On the day, six of the 10 sectors were in the green with Energy (+1.65%) by far the leading sector while Technology (-0.82%) was the laggard on the day. Meanwhile, SPY lost 0.41%, DIA lost 0.01%, and QQQ lost 1.34%.  The VXX was flat at 26.43 and T2122 climbed back into the center of the mid-range at 55.65.  10-year bond yields fell to 3.715% while Oil (WTI) gained two-thirds of a percent to close at $69.57 per barrel.  So, Monday was an indecisive day for large-cap indices with Bears continuing to drive action in the QQQ.  Overall, nothing is technically broken and all three major index ETFs remain in Bull Flag formations.  However, it is also easy to see that the mega-cap DIA has essentially done nothing since December, chopping sideways for six months.  Therefore, the question remains whether DIA has been a front-runner of a major bearish turn in the market or just the laggard being begrudgingly dragged higher by the more growth-oriented SPY and QQQ. 

The only major economic news on Monday was that President Biden launched the previously-funded (by the 2021 infrastructure law) $42.5 billion program designed to get every home high-speed internet access by 2030.  Each state will get at least $107 million in funding, with Texas getting a massive $3.3 billion, from the program.  Still, the program is extremely likely to go the same way as previous federal telephone and internet programs as a major boon for T, VZ, TMUS, CMCSA, CHTR, SPB, etc. all reaping huge profits from grants and underwritten operations.  In Fed-speak news, NY Fed Pres. Williams argued Sunday (in a panel discussion) that bringing down inflation is of utmost importance and he downplayed the link between central bank monetary policy and financial stability (loss of jobs and/or recession). Williams said, “It’s not clear that monetary policy actions play a central role in affecting the emergence of financial stability vulnerabilities.”  Williams also said, “Restoring price stability is of paramount importance because it is the foundation of sustained economic and financial stability.” 

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In stock news, NVO announced that its late-stage trial of its experimental obesity drug is finding that patients are losing 15% of their body weight under the treatment.  The company hopes for US and European approval later this year.  (PFE discontinued its own obesity drug Monday after liver safety issues were found and LLY’s competing drug, which is still in mid-stage trials, shows similar results with 14.7% of body weight lost over a 36-week treatment.)  The obesity treatment market is expected to reach $100 billion per year by the end of the decade.  Elsewhere, AMED agreed to a $3.3 billion offer ($101/share) to be acquired by UNH.  At the same time, AMZN announced it will invest $7.8 billion in OH and $12.7 billion in India by 2030 to expand its cloud computing division capacity.  Meanwhile, FSR began delivery of its Ocean SUV in the US Monday.  Later in the afternoon, PACW sold a $3.54 billion portfolio of loans to ARES (at an undisclosed discount).  The move strengthened the bank’s balance sheet.  After the close, SLG said it has sold its 50% stake in a New York Office Building for $2 billion.  The sale comes as a slight discount on the 2017 purchase price of the building ($2.21 billion).  So, SLG got rid of 50% of an asset that they acquired when the original buyer defaulted (SLG was one of the 2017 lenders) for slightly less than the whole building was worth in 2017.  (Nice gain is a supposedly bad and weakening commercial real estate market.) Also after the close, Bloomberg reported that BN is close to a deal to purchase AEL.  AEL shares jumped in after-hours trading on the news.  In addition, ILMN announced it has begun job cuts and exiting office space to reduce costs.  In the same vein, the Wall Street Journal reported that HOOD is laying off 150 employees (7% of its workforce).  In addition. CNBC reported Monday night that F had confirmed it will carry out layoffs (mostly Engineering jobs) in both the US and Canada this week.  The number of layoffs was not provided. 

In stock legal and regulatory news, Germany’s highest court ruled that carmakers (such as VLKAF, MBGAF, and others) must pay compensation for having fitted their diesel cars with emissions testing cheating devices and software.  This could cost each company millions of dollars.  Elsewhere, the NHTSA announced that TSLA is recalling 26 different configurations of its Model 3 and Model Y 2023 due to battery defects.  (This fault cannot be resolved via an over-the-air software patch.)  No specific number of vehicles impacted by the recall was given.  Later, the US Supreme Court declined to hear a case brought by AAPL and AVGO challenging the patents owned by Caltech.  This returns the case to a lower court for a re-evaluation of damages after the US Court of Appeals objected to $837.8 million from AAPL and $270.2 million from AVGO as too much.  (Almost all AAPL iPhones, iPads, and MacBook devices use chips based on the infringed patents and AVGO is the major supplier to AAPL of chips that infringe upon those patents.)  Caltech has pending cases against MSFT, SSNLF, DELL, and HPQ over the infringement of the same patents.  After the close, a US judge in Houston signaled that he was ready to auction off the assets of Citgo Petroleum (Venezuelan-owned refiner) with proceeds partially going to COP and SMNEY.  Finally, the US Dept. of Defense said it has chosen GD and RNMBF as the finalists competing for a $45 billion contract (which will begin in 2027) to replace US Bradley fighting vehicles.  OSK and BAESY were among the eliminated bidders.

In geopolitical news, after a day of quiet, Wagner boss Prigozhin verbally struck out again, justifying the Wagner position in the conflict, again calling the Russian Defense Minister and Army Chief of Staff criminals and saying that only a handful of his men would join the Russian military (for half the salary).  There were unconfirmed rumors that Prigozhin is currently in a windowless Minsk, Belarus hotel.  Later, Putin released a short video where he thanked Wagner soldiers who did not attack Moscow and then returned to their bases.  He called the dead pilots (who died attacking Wagner forces) heroes.  However, Putin said the rebellion would have been crushed anyway.  Then, without naming them, he called the leaders of the revolt “criminal and treasonous” while saying they will be “brought to justice.”  Presumably he was referring to Prigozhin and perhaps his fellow Wagner founder, GRU Colonel Dmitry Utkin who led the “little green men” forces who took regions of the Donbas in 2014.  Finally (for the Russian story), a short video of Putin meeting with his cabinet (including Defense Minister Shoigu) also apparently meant to send a signal.  Elsewhere, Bloomberg reported overnight that China’s number 2, Li Qiang, told the World Economic Forum that those governments (with the implication being companies headquartered in those countries) that attempt to de-risk away from China will only fragment the global economy.  His speech boosted optimism about Chinese recovery/growth outlook and was the main driver for Chinese markets’ strong day. 

Overnight, Asian markets leaned to the green side.  Hong Kong (+1.88%), Shanghai (+1.23%), and Shenzhen (+0.97%) led the region higher while Taiwan (-1.00%) was by far the biggest loser on the day.  Meanwhile, in Europe, the opposite picture is taking shape at midday.  Twelve of the 15 European bourses are in the red with an undecided CAC (-0.02%), DAX (-0.02%), and FTSE (-0.11%) leading the continent on volume.  Belgium (-1.01%) and Norway (-0.92%) are by far the biggest losers in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed open.  The DIA implies a -0.06% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.38% open at this hour.  Simultaneously, 10-year bond yields are up to 3.727% and Oil (WTI) is down another 1.80% to $68.14 per barrel in early trading.

The major economic news events scheduled for Tuesday include Building Permits and Durable Goods Orders (both at 8:30 am), Conf. Board Consumer Confidence and May New Home Sales (10 am), and API Weekly Crude Oil Stocks (4:30 pm.  The major earnings reports scheduled for Tuesday are limited to KFY, SCHN, and WBA before the open.  Then, after the close, JEF reports.         

In economic news later this week, on Wednesday, Preliminary May Goods Trade Balance, May Preliminary Retail Inventories, EIA Crude Oil Inventories, and Fed Bank Stress Test Results are reported while Fed Chair Powell also speaks.  On Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Wednesday, GIS, UNF, CNXC, FUL, MU, and WOR report.  On Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, Monday evening SPGI reported that June US auto sales are set to increase, following up on the unexpectedly solid volumes of April and May.  The analyst firm expects to see a 9% increase in sales for 2023 as a whole (compared to 2022).  Elsewhere, a MSFT internal memo from late 2022 came out (during a court hearing over the acquisition of ATVI) Monday night.  The memo has CEO Nadella laying out the goal and expectation for MSFT to double its revenue by 2030 while also delivering in excess of 10% annual returns to shareholders via dividends and share buybacks.  This morning, RIDE filed for Chapter 11 Bankruptcy protection and put the company up for sale.  At the same time, RIDE sued Taiwan-based Foxconn for breaking an agreement to invest $170 million into RIDE.  Meanwhile, DAL said it now expects 2023 earnings to be at the high end of previous forecasts.

So far this morning, KFY reported beats on both the revenue and earnings lines.  At the same time, WBA beat on revenue while missing on earnings.  (SNX and SCHN scheduled to report at 8am.)  It is worth noting that both WBA and KFY lowered their forward guidance. 

With that background, it looks like the bears have shown up in the two large-cap index ETFs during the last 30 minutes. Their premarket candles are now red-bodied. At the same time, QQQ is now printing a gap-up Doji in the premarket. However, from a higher-level view, none of the three is signaling a major move. So, the recent pullback still looks like an orderly move (as opposed to the gappy, huge candle moves we see in a typical major bearish trend reversal. To me at least, this signals that we are still in Bull Flag patterns. (However, I’d be lying if I said I was not starting to get concerned about the Flag’s length.) All three of the major index ETFs are below their T-line (8ema), indicating the short-term trend is bearish while the longer-term trend remains Bullish in all three. In terms of extension, none of the three major index ETFs is far from their T-line and the T2122 indicator is right in the center of its mid-range. So, both sides have room to run if they can muster the energy.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Markets gapped down sharply Friday (with SPY opening down 0.82%, DIA opened down 0.65%, and QQQ opened down 1.12%).  From that point, all three major index ETFs rode the rollercoaster sideways all day, at their peak retracing about half of the opening gap between 1 pm and 2 pm.  However, all three also closed back down near the opening level.  This action resulted in the SPY and QQQ gapping down through their T-line (8ema) and then failing a retest of those levels.  It also gave us indecisive, white-bodied, Doji-like candles in the SPY, QQQ, and DIA.  This also gave us all three looking like they were in Bull Flag patterns.

On the day, all 10 sectors were in the red with Utilities (-1.46%) and Energy (-1.32%) leading the way lower while Consumer Defensive (-0.67%) and Healthcare (-0.67%) held up better than other sectors.  At the same time, SPY lost 0.76%, DIA lost 0.64%, and QQQ lost 0.99%.  The VXX gained 1.26% to 26.48 and T2122 dropped back to the bottom of the mid-range at 25.65.  10-year bond yields fell to 3.735% while Oil (WTI) was down about a quarter or a percent to close at $69.35 per barrel.  So, Friday was really defined by the opening gap, with volatile sideways action the rest of the day. This all happened on less-than-average volume in the SPY, QQQ, and DIA (although DIA was quite near average volume).

In major economic news on Friday, Preliminary Manufacturing PMI came in below expectations at 46.3 (compared to a forecast of 48.5 and the May reading of 48.4).  At the same time, Preliminary Services PMI came in slightly above expectations at 54.1 (versus the forecast of 54.0 but down from the May value of 54.9).  Meanwhile, the Preliminary S&P Global Composite PMI fell to 53.0 (from a May reading of 54.3).  The biggest impact of these was the falling and underperforming Manufacturing PMI that is showing contraction.  Later, BKR gave its weekly oil and gas rig count report.  The data showed an eighth straight week where drillers are taking rigs offline due to low prices.  The reports specifically cited CHK, SWN, and CRK as shutting down rigs on the week, which brings the total 9% lower than one year prior.  Elsewhere, Atlanta Fed President Bostic told a University of Georgia conference “Getting inflation down is Job One, inflation is too high.”  However, Bostic then went on to explain his dovish approach as “I am trying to minimize the dislocation as we get inflation under control. I am hopeful.”  At about the same time, San Francisco Fed President Daly said two more interest rate hikes this year is a “very reasonable” projection.  However, she went on to say that given how fast rates have risen already and how close they are to where they probably need to be, it’s better to move more slowly and carefully than before.  As is usually the case, Daly said, “I want to make sure that we balance those risks on both sides, of under- or over-tightening” … “Adding another six weeks to our decision space, to me that seems optimal, and prudent.” 

SNAP Case Study | Actual Trade

In stock news, there were fires at NKLA company headquarters Friday.  This caused several of the NKLA electric trucks to be damaged.  The company said, “Foul play is suspected as a vehicle was seen in the area of the affected trucks just prior to the incident and an investigation is underway.”  Elsewhere, Reuters reports that Germany is set to order 60 of the CH-47 Chinook helicopters from BA for $8.71 billion.  At the same time, CGC reported a wider-than-expected loss of nearly $500 million on Friday.  The company cited “systemic regulatory issues and competition from illegal marijuana” in their report, which raised real concerns about the company’s viability.  CGC stock fell almost 14% on the day.  That move took the entire marijuana industry sharply lower.  Meanwhile, after the close, AAPL CEO Cook called India a “huge opportunity” after meeting with Indian PM Modi and President Biden at the White House on Friday.  He told CNBC the company would be expanding operations in India, including opening two retail stores.  At the same time, MU announced it has plans to open a facility in PM Modi’s home Indian state and LRCX said it has plans to train 60,000 Indian engineers.

In stock legal and regulatory news, the US Supreme Court ruled 5-4 in favor of COIN by blocking customer lawsuits while the company appeals lower court rulings and hopes to move the suits out of court and into private arbitration.  Elsewhere, the NHTSA announced that HMC is recalling 1.2 million 2018-2023 vehicles due to a faulty coaxial cable connector that may disable the rearview camera.  (HMC had received 274,000 warranty claims related to the issue prior to the recall.)  Meanwhile, Reuters reported that the state of Washington is set to mandate that electric charging stations that want to be part of state programs (get US grant dollars) must include a TSLA plug.  At the same time, US Sec. of Transportation Buttigieg warned of potential airline delays starting July 1.  The issue is a long-standing delay in the rollout of 5G service near airports by T, VZ, and TMUS, who all had agreed to delay the launch until July 1. Yet airlines claim they still have not been able to get their entire fleets retrofitted and, as a result, up to 20% (DAL) of planes will be grounded to avoid altimeter interference.  No other airline has released figures, but they are expected to be similar.  This means a 20% reduction in airline capacity and presumably revenue starting July 1.  Finally, after the close, GSK announced it had settled the first Zantac cancer lawsuit (which was headed for trial in July) for an undisclosed sum.

In geopolitical news, obviously, the attempted coup d’état in Russia (or the march for justice if you prefer) and its impact on their invasion of Ukraine were the main story worldwide.  On Friday night, the fight between Wagner PMC boss Prigozhin and Russian Defense Minister Shoigu and Army Chief Gerasimov went “hot.”  Putin sided with his minister, Shoigu et. al.  This led Wagner to march on and capture the cities of Rostov-on-Don and then Voronezh (halfway from Rostov and Moscow).  Rostov, a city about the same size as Dallas TX, is the main Russian command, logistics, and resupply center for the Russian forces in South Ukraine (including Crimea).  Voronezh, a city about the size of Jacksonville FL, is the main through point to Rostov and the primary center of both logistics and command for Russian attacks on Eastern and Northern Ukraine (Kharkiv, Sumy, etc.).  There was fighting with losses on both sides Saturday. Then Saturday night, with Wagner forces just 125 miles from Moscow, some deal was struck.  Prigozhin told his forces to turn around, Putin pardoned both him and his Wagner forces, and Prigozhin apparently accepted exile to Belorussia.  What Prigozhin was given or threatened with (or both) are unknown.  The only things that seem universally recognized are that Putin’s grip on power took a major hit and the life insurance rates Prigozhin pays must have gone through the roof.  And, the fact that Prigozhin and his men are not dead but instead are given a choice to leave to Wagner African operations or join the Russian Army makes it more likely that other coup attempts will happen in the not-too-distant future. 

Overnight, Asian markets were nearly red across the board with only South Korea (+0.47%) and India (+0.14%) able to hang onto the green.  Meanwhile, Shenzhen (-1.68%), Shanghai (-1.48%), and Thailand (-0.83%) paced the losses.  In Europe, we see a similar picture taking shape a t midday.  Only the CAC (+0.24%) and Portugal (+0.48%) are in the green. At the same time, The DAX (-0.13%) and FTSE (-0.08%) are following the smaller exchanges lower in early afternoon trade.  In the US, as of 7:30 am, Futures are just on the red side of flat.  The DIA implies a -0.05% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.22% open at this hour.  The 10-year bond yields are down sharply to 3.686% and Oil (WTI) is up a half of a percent to $69.51 per barrel in early trading.

There are no major economic news events scheduled for Monday.  The only major earnings reports scheduled for Monday is CCL before the open.  There are no major reports scheduled for after the close.        

In economic news later this week, on Tuesday we get Building Permits, Durable Goods Orders, Conf. Board Consumer Confidence, May New Home Sales, and API Weekly Crude Oil Stocks.  Then Wednesday, Preliminary May Goods Trade Balance, May Preliminary Retail Inventories, EIA Crude Oil Inventories, and Fed Bank Stress Test Results are reported while Fed Chair Powell also speaks.  On Thursday, we get Q1 GDP, Q1 GDP Price Index, Weekly Initial Jobless Claims, and May Pending Home Sales along with Fed speaker Bostic.  Finally, on Friday, May PCE Price Index, May Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported.

In terms of earnings reports, on Tuesday we hear from KFY, SCHN, WBA, and JEF.  Then Wednesday, GIS, UNF, CNXC, FUL, MU, and WOR report.  On Thursday, we hear from AYI, GBX, MKC, MSM, PAYX, RAD, and NKE.  Finally, on Friday, STZ reports.

In miscellaneous news, on Friday Refinitiv analysts reported Q1 had delivered (during Q2 reports) earnings growth of 0.1% (year-on-year) from the S&P 500 companies. This was far better than the feared forecast of a 5.1% decline.  However, Refinitiv still has a gloomy outlook, expecting Q2 earnings (reported in Q3) to be down 5.6% from the same quarter in 2022.  Elsewhere, a major drought in Panama has been causing the Panama Canal to dry up (lakes used for the locks).  On Sunday, the operator of the canal reduced the depth of the hull (below the water line) permitted to transit the canal by another 13%.  This reduction will cause shipping delays, impacting both major importers and exporters.  The canal transits about 3.5% of global trade.  Ships could be partially unloaded for canal transit or can be rerouted around South America.  (Either option would cause weeks of delay and added expense.) Finally, Bloomberg reports this morning that GS has begun laying off 125 senior positions (managing directors) globally. This comes as investment banking deal values have fallen 40% so far this year.

With that background, it looks like markets want to start the week with a continuation of at least a Bull Flag pullback. All three of the major index ETFs are below their T-line (8ema), indicating the short-term trend is bearish while the longer-term trend remains Bullish in all three. For what it is worth, the markets are printing small and as yet undecisive candles in the premarket session. However, it is early. In terms of extension, none of the three major index ETFs is far from their T-line. T2122 is not far from the oversold territory but remains in the mid-range. So, both sides have room to run if they can muster the energy. The most notable thing about the market this morning is that there is apparently no reaction to the events in Russia. Maybe this is due to their isolation and greatly diminished economic position in the world. However, I have a sneaking suspicion that the reason it is not being noticed is that it so far has not had an impact on the Russian invasion of Ukraine.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Thursday was the Bull’s day after a down start to the day that saw the SPY gap down 0.21%, DIA gapped down 0.13%, and QQQ gapped down 0.39% at the open.  At that point, all-day rallies started in both the SPY and QQQ.  Meanwhile, DIA meandered sideways, closing near the Wednesday close.  This action gave us Bullish Engulfing candles in the SPY and QQQ.  Both of them also crossed back above their T-line (8ema).  Meanwhile, the DIA printed another white-bodied, indecisive Spinning Top candle.  It is worth noting that SPY did this on significantly lower-than-average volume while DIA and QQQ were near but still below-average volume.

On the day, six of the 10 sectors were in the red with Technology (+0.58%) and Consumer Defensive (+0.56%) leading the way higher while Energy (-1.50%) was by far the worst-performing sector.  At the same time, SPY gained 0.36%, DIA lost 0.03%, and QQQ gained 1.18%.  The VXX dropped 2.39% to 26.15 and T2122 dropped back and remains in the mid-range at 46.67.  10-year bond yields spiked to 3.799% while Oil (WTI) plummeted 4.21% to close at $69.48 per barrel.  So, the two index ETFs that have led all year seemed to be trying to reverse their pullback this week.  Meanwhile, DIA (which has lagged all year) still seems to be trying to move lower in an indecisive way.

In major economic news on Thursday, Q1 Current Account (trade deficit) came in a bit larger than expected at -$219.3 billion (compared to a forecast of -$216.9 billion and a revised Q4 value of -$216.2 billion).  At the same time, Weekly Initial Jobless Claims were also higher than expected at 264k (versus a forecast of 260k but right in line with the prior week’s 264k).  It is worth noting that 264k is a 20-month high.  Later in the morning, May Existing Home Sales came in above the anticipated reading at 4.30 million (compared to a forecast of 4.25 million and slightly above the April reading of 4.29 million).  This amounted to a +0.2% month-on-month increase compared to the April 3.2% decrease over March.  Then EIA Weekly Crude Oil Inventories showed a much larger-than-expected drawdown of 3.831-million-barrels (versus a forecasted inventory build of 1.873-million-barrels and far different from the prior week’s 7.919-million-barrel increase in stocks).  After the close, the Fed Balance Sheet was reported as decreased to $8.362 billion (down $26 billion from the prior week’s $8.388 billion). 

SNAP Case Study | Actual Trade

In Fed Speak news, Fed Governor Bowman said Thursday that although she supported the June pause, she feels “additional policy rate increases will be needed” (to control inflation).  She said the Fed “has made progress in lowering inflation, but … we continue to see unacceptably high levels of inflation.”  (She did not explain how many or what her expected terminal rate would be but she did use the plural to describe increases.)   Later, Fed Chair Powell had his second day of Congressional testimony (this time in the Senate) where he said the Fed would move at a “careful pace” as the FOMC edges toward a stopping point for rate hikes.  He said he did share the broad consensus of Fed members that expects modest economic growth, a small rise in unemployment, and a slowly declining inflation over the rest of the year.  Powell then said, “If all those things happen, we are within a couple of rate hikes of the level we need to get to.”  On a different topic, Powell said banks with over $100 billion in assets will soon face higher capital requirements (he did not specify the amount) as the Fed seeks to strengthen banks and finally bring the US in compliance with the 2017 Basel Committee Agreement.  (However, Reuters reported the major banks are already pushing back against this and have marshaled GOP champions to fight the rule revision.  Oddly, Reuters did not cite which major banks or even which GOP champions.)

In stock news, RIVN acquired Swedish route planning software company Iternio.  As mentioned here previously, it was announced Thursday that GE will jointly make fighter jet engines for the Indian air force with India’s state-owned Hindustan Aeronautics.  Elsewhere, OSTK won the bankruptcy court auction for a portion of the assets of defunct BBBY for $21.5 million.  (OSTK was up as much as 22% on the news but closed up 17.28% to $24.84.)  At the same time, SPR (which is a major supplier to both BA and EADSY) suspended production at its Wichita, KS factory (that makes fuselages) after workers rejected a company-proposed four-year deal and announced they would begin striking on Saturday.  Meanwhile, at the close, Investing.com reported the rumor that TSLA is acquiring German wireless charging company Wiferion.  Later, Bloomberg reported that OWL is rebranding its business units amid growing tensions between the company’s top executives.  (OWL was formed in 2021 via a SPAC that merged Dyal Capital with Owl Rock.)

In stock legal and regulatory news, on Thursday, the FTC argued in federal court that the MSFT acquisition of ATVI should be halted until a final legal ruling is issued.  The hearing will continue through June 29 with CEOs from both companies called as witnesses.  Elsewhere, the FDA approved SRPT’s gene therapy for muscular dystrophy. (This was a first-of-its-kind approval for this type of therapy and it is worth noting PFE has its own similar gene therapy in development.) Later, the US Dept. of Energy announced plans to provide up to $9.2 billion in loans to a joint venture between F and South Korean listed company SK Innovation for them to build three battery plants.  (The largest ever DoE loan award.)  After the close, META announced it will end access to news on Facebook and Instagram in Canada after the Canadian Parliament approved legislation to compel internet giants to pay local publishers for their news content.  Also, after the close, MMM announced it has reached a tentative $10.3 billion settlement with “many” public water systems over the company’s “forever chemical” pollution.  MMM said the deal would provide the funds over a 13-year period.  In addition, the states of CA, MN, and WI all joined an FTC lawsuit aimed at stopping the AMGN $27.8 billion deal to buy HZNP based on the deal giving AMGN monopoly positions in two eye disease markets.

Overnight, Asian markets were nearly red across the board for the exchanges that were open.  (Chinese markets remain closed for their Dragon Boat holiday.)  Japan (-1.45%), Singapore (-0.96%), and South Korea (-0.91%) paced the losses.  In Europe, we see a similar picture taking shape at midday.  Only Greece (+0.67%) and Switzerland (+0.51%) are in the green as the CAC (-0.22%), DAX (-0.72%), and FTSE (-0.27%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a fourth consecutive lower start to the day.  The DIA implies a -0.29% open, the SPY is implying a -0.44% open, and the QQQ implies a -0.57% open at this hour.  At the same time, 10-year bond yields a down sharply to 3.735% (back near where they were yesterday morning) and Oil (WTI) is off another 1.22% to $68.66 in early trading.

The major economic news events scheduled for Friday are limited to Manufacturing PMI, Services PMI, and S&P Global Composite PMI (all three at 9:45 am) and we hear from three Fed speakers (Bullard at 5:15 am, Bostic at 8 am, and Mester at 1:40 pm).   The only major earnings reports scheduled for Friday is KMX before the open.  There are no major reports scheduled for after the close.       

So far this morning, KMX reported beats on both the revenue and earnings lines.  The earnings were a 57% upside surprise, yet was actually down 25.6% quarter-on-quarter.  Revenue was also down 17.4% quarter-on-quarter.

In miscellaneous news, following the meeting between President Biden and Indian PM Modi, the US and India mutually agreed to drop six trade disputes that are pending before the WTO.  In addition, India agreed to drop retaliatory tariffs on certain US ag products.  Elsewhere, this morning, CNBC reports that workers at 150 SBUX stores across 22 states will strike after the company changed policy (in an effort to avoid cancel culture boycotts) and refused to allow “Pride decorations” in their stores.  Meanwhile, Treasury Sec. Yellen told Bloomberg that “my odds of it (a recession), if anything, have gone down.” (She went on to cite the resilient labor market and inflation coming down.) Finally, in a “minor miracle,” Interstate 95 in Philadelphia is opening to traffic again today, less than two weeks after a section of raised six-lane highway collapsed after a fuel truck rolled, caught fire, and melted the steel beams supporting the structure.  This does actually have an economic impact as that highway is normally one of the most heavily traveled truck routes in the nation. Its closure had caused prices in the Philly area to rise over the last couple of weeks ostensibly due to the additional cost of trucking via other routes.

With that background, it looks like the QQQ is retesting its T-line for support while SPY is looking to gap back just below its T-line this morning. Meanwhile, DIA remains in its Bull Flag formation. However, once again, the candles the three major index ETFs have printed so far in this premarket are small, indecisive Dojis. So, it looks like the morning move is uncertain. With that said, the very short-term trend is down and the two large-cap index ETFs are below their T-line on a daily chart. So, the bias is bearish. Meanwhile, the longer-term trend remains Bullish (Weekly chart). In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator is smack dab in the center of its mid-range. So, both the Bulls and the Bears have room to run if they can gain the upper hand. We do have several scheduled Fed speakers (and likely a couple of others will give their two cents in unscheduled ways). However, the PMIs at 9:45 am are most likely to be external drivers of momentum. Remember that it’s Friday… payday…and time to get your account set for the weekend news cycle.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, markets gapped down (SPY gapped down 0.22%, DIA gapped down 0.25%, and QQQ gapped down 0.37%).  From that point, both of the large-cap index ETFs meandered sideways with DIA actually fairing better than the SPY but neither of them ended up far from their open.  At the same time, QQQ sold off hard after its gap lower, finding the lows of the day at about 11:25 am.  Then it very slowly and modestly rallied until about 2:30 pm before selling off again into the close.  This left all three of the major index ETFs below their T-line (8ema) at the end of the day.  This action gave us a black-bodied, large-body Spinning Top in the SPY.  For their part, DIA printed a Doji and QQQ gave us a large black-bodied candle that completed a Doji Continuation Pattern (Sandwich).

On the day, five of the 10 sectors were in the red as Technology (-1.53%) by far led the way lower and Energy (+1.20%) by far held up much better than the other sectors.  At the same time, SPY lost 0.51%, DIA lost 0.30%, and QQQ lost 1.36%.  The VXX was down 2.05% to 26.79 and T2122 climbed but remains in mid-range at 70.83.  10-year bond yields ended up unchanged at 3.727% while Oil (WTI) rose 1.66% to close at $72.37 per barrel.  So, it was the second lower-low and third lower close across all three of the major index ETFs.  This all happened on average volume in the QQQ and well-below-average volume in the DIA and SPY. 

In major economic news on Wednesday, came after the close as API Weekly Crude Oil Stocks were reported as a larger inventory drawdown than was expected.  They came in at -1.246-million-barrels compared to a forecast of -0.433-million-barrels and the prior week’s +1.024-million-barrel increase in stocks.  The big economic news was the testimony of FOMC Chairman Powell.  Powell told the House that the fight to get inflation back down to two percent “has a long way to go.”  (Hinting at two additional hikes possible this year, just as he said two weeks ago. By saying a half point of rate increases by year-end was “a pretty good guess.”)  He also said, “We have been seeing the effects of our policy tightening on demand in the most interest-rate–sensitive sectors of the economy such as housing, (but) It will take time, however, for the full effects of monetary restraint to be realized.”  GOP members of the committee pressed Powell on bank capital requirements.  However, he refused to be pressed into telling them Fed plans, saying “Strong capital requirements mean we have a stronger banking system…yet we also know that at the margin, as the costs of capital for banks goes up, the costs of credit goes up,” … “You just have to make a judgment call on that, and that’s what we’ll be doing.” 

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In other Fed speak news, Chicago Fed President Goolsbee told an economic forum that (the June 7 decision to not hike rates) was a close call for him.  However, he said “I felt like a reconnaissance mission is a perfectly appropriate thing to do after you’ve had 10 raises in a row, among the fastest increases in interest rates in recent memory,” … “You know that it takes some time for that to work its way through the economy.”  Goolsbee went on to say (related to a July hike) he had not “decided what should be the rate decision more than a month from now.”  Meanwhile, Atlanta Fed President Bostic echoed Goolsbee’s sentiment about a pause.  In an article published Wednesday he said “If we simply press on with additional rate hikes, we could needlessly drain too much momentum from the economy.”  In addition, Bostic wrote “While the clearest risk of pausing rate hikes is that it allows inflation the opportunity to rekindle, it isn’t his baseline forecast.”  Bostic went even further later in a Yahoo Finance interview when he said, “My baseline is that we should stay at this level for the rest of the year.”

In stock news, AJRD announced they were selected to develop the propulsion system for missiles, which LMT was recently given a $4.4 billion US Army contract to build.  (No value to the AJRD selection was given.)  Elsewhere, MULN shares jumped after the company announced it will not be seeking additional investor financing for at least the balance of 2023, saying it has sufficient cash on hand for the next 12 months.  Later, UBER announced it is eliminating 200 jobs (< 1% of the workforce) from its recruitment division after it decided to keep its staff count flat for the remainder of 2023.  Meanwhile, Reuters reported that INTC is reorganizing its manufacturing business to work like an independent entity.  No clear timeline for the reorganization was given, but INTC did say that the unit will begin reporting margins and they expect their foundries to be the second largest in the world with more than $20 billion in revenue in 2024.  (However, this is not really a close second with TSM expecting to bring in $85 billion in 2024.)  After the close, Bloomberg reported that SES and INTEQ have ended negotiations for a potential merger after the major stakeholders reached an impasse.  At the same time, the Wall Street Journal reports that PARA has received an offer to buy its Simon & Schuster unit.  (No price was reported.)  In addition, LOGI announced a new $1 billion share buyback program after the close.

In stock legal and regulatory news, the FTS sued AMZN in a Washington state Federal court for violating consumer protection laws.  The suit claims AMZN knowingly duped millions of consumers into enrolling in Amazon Prime and then made it very difficult to cancel the subscription service.  Elsewhere, a Delaware federal court hit GOOGL with a $15.1 million verdict for infringing two audio software patents, which was less than half of the $33.1 million in damages requested.  At about the same time, LLY announced that its diabetes treatment Jardiance had received FDA approval for patients aged 10 and up.  Later, it was “another day, another Pharma entity suing to stop Medicare negotiation of drug prices.”  This time, industry lobbying group PhRMA filed suit in a TX federal court seeking to block the government from negotiating on price.  (It is worth noting, the US pays 2.4 times higher prices than the average of other Western countries.)

After the close, KBH, and SCS reported beats on both the revenue and earnings lines.  Meanwhile, ASTL reported misses on both lines.  It should be noted that KBH also raised its forward guidance.  The major surprises included a HUGE 1500% downside surprise in ASTL earnings, a 400% upside surprise on earnings by SCS, and a 52% KBH upside earnings surprise on a 27% revenue upside surprise.

Overnight, Chinese markets were closed for a holiday.  However, Australia (-1.63%) and Japan (-0.92%) led the parts of the region (that did open) lower.  Only South Korea (+0.43%) managed moderate gains on the day.  Meanwhile, in Europe, we see red across the board at midday after the Bank of England surprised with an unexpected half of a percent rate hike.  The CAC (-1.41%), DAX (-0.81%), and FTSE (-1.13%) are leading Europe lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.33% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.40% open at this hour.  At the same time, 10-year bond yields are up to 3.744% and Oil (WTI) is down sharply to $70.90 per barrel in early trading

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims and Q1 Current Account (8:30 am), May Existing Home Sales (10 am), and four Fed Speakers (Waller at 4 am, Bowman at 9:55 am, Mester at 10 am and Chair Powell testifies again at 10 am).  The only major earnings reports scheduled for Wednesday include ACN, CMC, DRI, FDS, and GMS before the open.  There are no major reports scheduled for after the close.     

In economic news later this week, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester).

In terms of earnings reports, on Friday, we hear from KMX.

In miscellaneous news, after the close, Bloomberg reported that total US short interest has reached more than $1 trillion.  This makes the current short bets the largest since April 2022, even as the paper losses of the shorts now exceed $101 billion.  Stocks at the top of that list include the highest fliers (TSLA, AAPL, MSFT, NVDA, etc.).  Other things on the docket today include a meeting between Indian PM Modi and President Biden (at which several trade deals are expected to be announced) with AAPL CEO Cook, TSLA CEO Musk, and others like GE, HII, AMAT, and others on hand for the day’s events.

So far this morning, ACN, CMC, GMS, and FDS have all reported beats on both the revenue and earnings lines.  Meanwhile, DRI missed on revenue while beating on earnings.  Only ACN has changed guidance, lowering its outlook for the future.  The only surprises of note were a 10% upside earnings surprise for CMC and an 11% upside earnings surprise from GMS.

With that background, it looks like the Bears are trying to follow through on the three consecutive lower closes with a modest gap lower this morning. However, the candles the three major index ETFs have printed so far in this premarket are small, indecisive Dojis. So, it looks like the move is uncertain. With that said, the very short-term trend is down with all three of the major indices below their T-line on a daily chart. Meanwhile, the longer-term trend remains Bullish (Weekly chart). In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator remains in its mid-range. So, both the Bulls and the Bears have room to run if they can gain the upper hand. While it is less likely any real bombshells will come from the second day of Chair Powell’s testimony, it is possible sentiment could be swung. At this point (before his testimony), markets have priced in a 76.9% probability of another quarter-point hike in July.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets were volatile on Tuesday with SPY gapping down 0.44%, DIA gapping down 0.50%, and QQQ gapping down 0.46%.  At that point, we saw divergence as the large-cap index ETFs sold off hard (reaching the lows of the day at 10:30 am).  Meanwhile, QQQ immediately recrossed its gap down to reach the highs of the day at about 9:50 am, only to reverse and catch up to the large caps finding the lows of the day at about 10:30 am.  From there, all three major indices got in sync to rally steadily until 1:30 pm.  Then prices ground sideways with a modest Bearish lean the rest of the day.  This action gave us indecisive candles in all three major index ETFs.  The SPY printed a Doji that bounced up off its T-line (8ema).  At the same time, QQQ printed a white-bodied Spinning Top that also bounce up off its T-line.  DIA printed a black-bodied Spinning Top that closed at the T-line. 

On the day, all 10 sectors were in the red as Energy (-1.54%) led the market lower and Healthcare (-0.11%) held up much better than other sectors.  At the same time, SPY lost 0.52%, DIA lost 0.73%, and QQQ lost 0.28%.  The VXX was flat at 27.35 and T2122 dropped back into the center of the mid-range at 51.35.  10-year bond yields fell to 3.723% while Oil (WTI) fell 1.17% to close at $70.94 per barrel. So, overall, it was an indecisive pullback day, where most of the pullback was found in the opening gap.  This all happened on a bit less-than-average volume with SPY being the least volume relative to its average. 

In major economic news on Tuesday, May Preliminary Building Permits came in hotter than expected at 1.491 million (+5.2%), compared to a forecast of 1.425 million and an April reading of 1.147 million.  At the same time, May Preliminary Housing Starts saw a massive jump (up 21.7% from April, the largest one-month jump since 2016) to come in well above the anticipated level at 1.631 million (versus a forecast of 1.400 million and an April value that was revised down to 1.340 million).  

In Fed-speak news, Vice Chair for Bank Supervision Barr told a panel that the Fed is exploring ways to speed up the bank oversight process.  He said they want to move away from scenario-based “one-size fits all” supervision and move toward a more bank specific “what would it take to break this bank or a large piece of it?” approach. However, he also said this is just an early-days effort.  (Bullard and Williams both spoke, but they gave prepared presentations of research and did not answer questions about FOMC direction.)

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In stock news, on Tuesday, EADSY (Airbus) announced the biggest order of jets ever placed.  The largest Indian airline (IndiGo) gave the company an order for 500 narrow-body jets for delivery starting in 2030.  (Interestingly, this order may be more about bragging rights as it tops the previous record order, placed with BA by India’s second-largest airline earlier this year by just 30 planes…although 70 of the BA planes are just an option to buy.)  Later, Reuters reported that KKR has agreed to buy $44 billion of the loans generated by PYPL’s European “Buy Now, Pay Later” business.  Elsewhere, HPE jumped on the bandwagon by announcing it is launching a cloud computing service designed to power AI systems such as ChatGPT.  (AMZN, MSFT, and GOOGL are already major players in that niche and IBM also recently announced plans to join that market.)  In the auto space, GM continues its parade of major internal combustion investments.  On Tuesday afternoon, the automaker announced a $920 million expansion of a diesel engine plant in OH.  Meanwhile, CIVI said Tuesday afternoon that it will acquire Permian Basin oil and gas operations from a private equity firm for $4.7 billion.

In stock legal and regulatory news, LMT has filed complaints with the FTC and Dept. of Defense related to the LHX $4.7 billion acquisition of AJRD that had been announced in December 2022.  (LMT is AJRD’s largest customer and LHX is an LMT competitor.)  Later the Financial Times confirmed and fleshed out a report I posted yesterday, saying CS (now owned by UBS) faces $128 million in fines from the UK and $300 million in fines from the Fed related to mishandling of Archegos Capital.  The added detail is that CS had only set aside $35 million as a reserve for those fines. Meanwhile, the US Dept. of Justice antitrust division announced plans to revise the DOJ’s bank merger review guidelines (last updated in 1995).  At the same time, GCI filed an antitrust lawsuit against GOOGL over claims of monopoly in how businesses purchase online ads.  Elsewhere, SNY said Tuesday afternoon that the International Chamber of Commerce arbitration court had rejected the claims from rival drugmaker (Boehringer Ingelheim) that SNY had been indemnified BI against lawsuits over cancer risk from the drug Zantac.  This relieves SNY of some legal risk since thousands of cancer-related lawsuits have been filed globally related to Zantac. The decision cannot be appealed.  After the close, the FTC proposed a rule to force cable TV providers such as CMCSA, CHTR, DISH, and others to disclose “all-in” pricing (including fees and separate charges) in promotional materials and on bills.  Finally, Reuters reports that the state of TX Dept. of Transportation will require any charging stations even partially backed by state funds to include a TSLA standard plug.  This move was said to be a response to F and GM adopting that standard recently.

After the close, LZB reported beats on both the revenue and earnings lines.  At the same time, FDX missed on revenue while beating on earnings.  It is worth noting, LZB also reduced forward guidance.  The only major surprise was a 36% upside earnings surprise by LZB.  (It is also worth noting that FDX and LZB both beat had lowered estimates.

Overnight, Asian markets were mixed but leaned toward the downside.  Shenzhen (-2.18%), Hong Kong (-1.98%), and Shanghai (-1.31%) led the region lower.  At the same time, we see the same picture taking shape in Europe at midday.  The CAC (-0.20%), DAX (-0.04%), and FTSE (-0.11%) are leading the way lower while a handful of smaller exchanges remain in the green.  In the US, as of 7:30 am, Futures are now pointing to a start to the day just on the red side of flat.  The DIA implies a -0.06% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.11% open at this hour.  Meanwhile, 10-year bond yields are up to 3.748% and Oil (WTI) is off a tenth of a percent to $71.08 per barrel in early trading.

The major economic news events scheduled for Wednesday is limited to API Weekly Crude Oil Stocks (4:30 pm) and two more Fed Speakers (Chair Powell testifies at 10 am and Mester at 4 pm).  The only major earnings reports scheduled for Wednesday include PDCO and WGO before the open.  Then, after the close, ASTL, KBH, and SCS report.   

In economic news later this week, on Thursday, we get Q1 Current Account, Weekly Initial Jobless Claims, May Existing Home Sales, and three Fed Speakers (Waller, Bowman, and Mester).  Finally, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester).

In terms of earnings reports, on Thursday, CAN, CMC, DRI, FDS, and GMS report.  Finally, on Friday, we hear from KMX.

In miscellaneous news, the TX state electricity grid (ERCOT) was forced to call for the voluntary conservation of power Tuesday as a heatwave continues across Southern states.   Elsewhere, mortgage demand was flat for the week even as national average mortgage rates for a 30-year, fixed-rate, conforming loan fell from 6.77% to 6.73%.  Refinance loan applications fell two percent while new home purchase applications rose by the same amount.  Finally, the US House Republicans continue their effort to make political points by targeting what funds are allowed to consider when investing money.  They are targeting “woke investing” by proposing an amendment to the Employee Retirement Income Security Act (ERISA) to prohibit qualified funds from investing in anything that is not solely focused on maximizing profit.  The lead author of the bill (Barr from KY) told CNBC “Environmental, social and governance investing has become a cancer and a fraud within our capital markets,” with the unstated part being that government knows what’s best and how people should be allowed to invest.  (Not exactly a libertine position.)

With that background, it looks like markets remain undecided this morning. With no economic data or brand name earnings reports on tap, this could open the door to talking heads to drive markets. Obviously, the semi-annual testimony from Chair Powell has the biggest probability of swinging sentiment. At this point (before his testimony), markets have priced in a 79.4% probability of another quarter-point hike in July. The chart itself looks like the DIA is trying to find support from the T-line. The other major indices may be in the same camp but have not touched the 8ema yet. Overall, the SPY and QQQ simply look like a minor pullback rest in a bull trend. DIA is similar but also the weakest of the three. In terms of over-extension, none of the major index ETFs are far from their T-line and the T2122 indicator is smack in the middle of its range. So, both the Bulls and the Bears have room to run if they can gain the upper hand.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was a profit-taking day ahead of the long weekend and after a blisteringly strong week.  SPY gapped 0.08% higher, DIA gapped up 0.11%, and QQQ gapped strongly higher, opening up 0.60%. However, after that open the Bears were in control although from 10 am until 1 pm it was more of a sideways grind.  All three major index ETFs closed near their lows.  This action gave us black candles with tiny wicks on both ends.  There were no candle signals according to a strict reading of the chart.  However, the SPY could be seen as having a Dark Cloud Cover sentiment (just missing by an open not above the prior high).  All three remain above their T-line (8ema) and only QQQ could be said to still be over-extended to the upside.

On the day, nine of the 10 sectors were in the red as Communications Services (-0.80%) led the market lower and Utilities (+0.21%) was the only sector to manage to stay in the green.  At the same time, SPY lost 0.71%, DIA lost 0.53%, and QQQ lost 0.63%.  The VXX fell 3.53% to 27.30 and T2122 pulled back modestly but remains in the overbought territory at 87.64.  10-year bond yields climbed to 3.767% while Oil (WTI) gained 1.16% higher to close at $71.44 per barrel.  So, overall, as said above, it was a day for profit-taking.  This can be seen by the very heavy volume in the QQQ (the market leader all year and especially during the week) while SPY and DIA had a bit less-than-average volume, even on a triple witching day.  

For the week, QQQ was up 3.79%, SPY was up 2.22%, and DIA (laggard all year) was up 1.08% even after Friday’s profit-taking.  During those five days, QQQ and SPY had above-average volume while DIA was just above average.  However, none of them had enough volume to call them a “blowoff top.” 

In major economic news on Friday, Michigan Consumer Sentiment came in above the expected number at 63.9 (compared to a forecast of 60.0 and a May reading of 59.2).  At the same time, Michigan Consumer Expectations were significantly higher than was expected at 61.3 (versus a forecast of 56.5 and a May value of 59.2). 

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In stock news, TSP completed its first unmanned road test (39 miles) of its heavy-duty truck in China.  Elsewhere, TSLA also offered new short-term incentives in China for its Model 3 cars.  The incentives offer buyers between June 16 and June 30 discounted interest rates as well as cash subsidies for the customer’s auto insurance.  In other TSLA news, CEO Musk told a French audience that autonomy (full self-driving) was the primary driver of the company’s value.  (Quite an interesting statement given the myriad of legal trouble TSLA faces over claims its “full self-driving” is not autonomous and has failed causing deaths, injuries, and property damage.)  Also on Friday, HUM echoed the UNH Thursday warning about a spike in medical costs due to higher-than-expected demand for surgery.  Later, LLY reported that its migraine drug (which had been approved by the FDA in 2018 for preventative migraine treatment) has failed to prove statistically superior to the competing drug sold by the BVHN and PFE partnership.  Meanwhile, GM continued its “internal combustion investment tour” by announcing it would invest nearly $1 billion in the expansion of production at an OH plant making heavy-duty truck engines.  Construction will begin immediately and will quadruple the plant’s production capacity.  Later, Reuters reported that BALL is now exploring the sale of its aerospace and defense unit for $5 billion with bidders including BAESF, TXT, and private equity firms.  (The goal is to focus on beverage packaging production.)  Finally, Bloomberg reports that MU is very close to signing a deal to build a $1 billion chip packaging plant in India.  This dela may be announced during Indian PM Modi’s state visit to Washington this week.

In stock legal and regulatory news, GOOGL sued a CA man on Friday, charging that he had created 350 fake accounts on its platforms and sold them to real businesses for the purposes of creating 14,000 fraudulent product and service reviews.  Elsewhere, CUBI announced it had bought $631 million worth of loans (formerly belonging to SBNY) from the FDIC at a 15% discount from book value.  Later, WHR announced it had agreed to drop a lawsuit against one of their former Italian executives (whom they had accused of stealing trade secrets when he left to work for a competitor).  At the same time, a US District judge ruled that JPM CEO Dimon will not need to submit to a second deposition related to the US Virgin Island’s lawsuit over the bank’s work for Jeffrey Epstein.  In a tangentially-related story, a US judge preliminarily approved the DB $75 million settlement with the victims of Jeffrey Epstein.  Meanwhile, a federal court in Louisiana dismissed a TSLA complaint against the state restriction on the direct sale of automobiles.  Late Friday the FDA advised COVID-19 vaccine makers (MRNA, PFE/BNTX, NVAX, etc.) to develop new vaccine candidates targeted at the XBB1.5 variant currently circulating.  In fine news, TWNK was fined just under $300,000 by the US Dept. of Labor for safety and training failures that resulted in a preventable partial finger amputation of an employee in December.  Finally, after he close, BMS sued the US Dept. of Health and Humans Services asking the court to declare US government negotiations over drug prices to be unconstitutional.  The specific drug in question is their Eliquis blood thinner.  The ridiculous thing about the suit (and peer suits) is that US patients pay an average of $440 for a dose of Eliquis while the same dose cost $162 in Zurich, $96 in Berlin, and $65 in Johannesburg.  (It’s good to own politicians.)

In overnight news, BABA announced a six-way restructuring, replacing its chairman in the process with an insider (a long-time confidant of Jack Ma).  Elsewhere, Bloomberg reports UBS is facing large fines (maybe $300 million) from the Fed as well as others from UK regulators (maybe $128 million).  These fines related to CS dealings with Archegos Capital prior to its implosion.

Overnight, Asian markets were mixed but leaned (on movement size) toward the red.  Hong Kong (-1.54%) and Thailand (-1.24%) paced the gainers while Australia (+0.86%), India (+0.33%), and New Zealand (+0.33%) led the gainers.  Meanwhile, in Europe, we see a different story taking shape with just two exchanges barely hanging onto the green at midday.  The CAC (-0.26%), DAX (-0.56%), and FTSE (+0.01%) lead the way on volume but most of the smaller bourses have moved more to the downside in early afternoon trade.  In the US, as of 7:30 am, the Futures are pointing to a surprisingly similar start to the week among the major indices. The DIA implies a -0.31% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.34% open at this hour.  At the same time, 10-year bond yields are down to 3.763% and Oil (WTI) is up a bit to $72.09 per barrel in early trade.

The major economic news events scheduled for Tuesday are limited to May Building Permits and May Housing Starts (both at 8:30 am), and two Fed Speakers (Bullard at 6:30 am and Williams at 11:45 am).  The only major earnings reports scheduled for Tuesday are FDX and LZB after the close.  

In economic news later this week, on Wednesday, API Weekly Crude Oil Stocks are reported and we two more Fed Speakers (Chair Powell and Mester).  On Thursday, we get Q1 Current Account, Weekly Initial Jobless Claims, May Existing Home Sales and three Fed Speakers (Waller, Bowman, and Mester).  Finally, on Friday, Manufacturing PMI, Services PMI, and S&P Global Composite PMI are reported while we hear from three Fed speakers (Bullard, Bostic, and Mester). 

In terms of earnings reports, on Wednesday we hear from PDCO, WGO, ASTL, KBH, and SCS.  Then Thursday, CAN, CMC, DRI, FDS, and GMS report.  Finally, on Friday, we hear from KMX.

In miscellaneous news, the US Dept. of Energy received two ransom requests at a nuclear waste disposal site and Oak Ridge Laboratories on Friday.  This followed the MOVEit security flaw recently found in PRGS software.  Despite this, the Russian hacker group responsible for the hacks posted on their website “WE DON’T HAVE ANY GOVERNMENT DATA” saying that if they mistakenly did get government data “WE STILL DO THE POLITE THING AND DELETE ALL.”  Elsewhere, on Saturday, Bloomberg reported that T recently told 60,000 managers to return to the office.  The catch was that they have sharply reduced the number of offices.  So, many of those ordered back to the office would be required to relocate or quit.  (Bloomberg says sources tell this was seen as a way to reduce the costs of severance incurred had they been forced to lay off many of those people.)  Finally, Sec. of State Blinken met with Chinese leaders, including Chinese President Xi over the weekend.  Both sides made nice, saying a stable relationship is important and inviting Blinken’s Chinese counterpart to Washington for a reciprocal meeting.  However, there were no deals made or changes announced for example related to US sanctions or Chinese policies.

With that background, it looks like the Bears are looking to follow through early on Friday’s pullback. The DIA looks headed to retest its T-line (8ema) as support. However, all three major index ETFs remain above their T-lines at this point. So, the market trend remains bullish. In terms of over-extension, none of the major index ETFs are too far above their T-line but the T2122 indicator remains in the lower half of the overbought territory. So, both the Bulls and the Bears have some room to run if they can manage the momentum.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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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

Thursday was the Bulls’ Day almost from start to finish. The SPY gapped down 0.17%, DIA opened flat, and QQQ gapped down 0.35% at the open.  However, at that point, it was all Bulls, all the time until 3 pm.  The strongest rallies were from 9:30 am to 10 am, 10:30 am to 11:45 am, and 2 pm to 3 pm.  Then, the last hour of the day saw very modest profit-taking as price drifted lower into the close.  This action gave us big white candles with small upper wicks and no lower wicks in all three of the major index ETFs. The DIA bounced up off its T-line while printing a Bullish Engulfing candle and breaking out of its one-candle pullback.  The SPY Bullishly Engulfed a Doji and by day’s end, both the SPY and QQQ were again extended above their 8emas. To say the trend remains bullish is an understatement.

On the day, all 10 sectors were in the green as Communications Services (+1.52%) led the market higher and Consumer Defensive (+0.95%) was the “laggard” sector.  At the same time, SPY gained 1.24%, QQQ gained 1.19%, and DIA gained 1.28%.  The VXX gained 2.65% to 28.30 and T2122 climbed back up into the overbought territory to end at 91.60.  10-year bond yields plummeted to 3.72% while Oil (WTI) shot 3.38% higher to close at $70.58 per barrel.  So, overall, the Bulls simply ran the Bears off after the post-Fed indecision from Wednesday afternoon.  It is interesting to note that for the first time in a long time, all three major index ETFs gave us above-average volume with QQQ printing significantly greater-than-average volume.  However, none of them gave us so much volume that I would say we need to fear it was a “blowoff top.”  

In major economic news on Thursday, the May Export Price Index was far below the expected value at -1.9% (compared to a 0.0% forecast and the April -0.1% value).  At the same time, the May Import Price Index was also down but in line with expectations at -0.6% (versus the -0.6% forecast but well below the April +0.3% reading).  Weekly Initial Jobless Claims came in above the anticipated level at 262k (compared to a 250k forecast but right in line with last week’s 262k value).  Meanwhile, perhaps the oddest data was the divergence in Fed Mfg. Indices.  The NY Fed Empire State Mfg. Index came in far above expectations at +6.60 (versus a forecast of -16.00 and massively above the May reading of -31.80).  However, a relatively short distance away, the Philly Fed Mfg. Index came in slightly worse than anticipated but still down at -13.7 (versus the forecast calling for -13.5 but still a bit better than the May reading of -10.4).  So, both of the Manufacturing Indices were improved but the NY one was greatly improved and positive while Philly was still negative.  (Maybe the May NY reading was an anomaly?)  Meanwhile, May Retail Sales also came in better than expected at +0.3% (compared to a forecast of -0.1% but was slightly down from the April +0.4%).  Later, May Industrial Production Year-on-Year was reported significantly lower than anticipated at +0.23% (versus a +1.30% forecast and even less than the April +0.37% value).  The same was true on a Month-on-Month basis where the change was -0.2% (compared to a +0.1% forecast and an April value of +0.5%).  So, Industrial Production is slowing.  Later still, April Business Inventories came in line with expectations at +0.2% (compared to a +0.2% forecast and growing from the April -0.2% reading).  At the same time, April Retail Inventories came in below what was predicted at -0.2% (versus the -0.1% forecast and well better than the March +0.3% value).

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In stock news, reacting to corporate boycotts, MDLZ continues to refuse to stop doing business in Russia.  However, the company announced Thursday it will try to avoid the stigma by saying that they have stopped making new capital investments in Russia and hope to move all its Russian operations into a separate, stand-alone unit by the end of the year.  Elsewhere, MBGAF (Mercedes Benz) announced Thursday that a 3-month test program in the US will begin today (6/16), in which ChatGPT can be given partial control over car systems so that system responses to voice commands will be (hopefully) better and more natural sounding.  As a follow-on to Thursday’s Retail Sales report, Reuters says both GM and F reported that consumers unexpectedly bought more cars than the companies had forecast.  Meanwhile, DAL announced it will resume paying quarterly dividends, which had been stopped in March 2020 due to the pandemic.  (The dividend will be $0.10 per share for holders of record on July 17, paid August 7.)  Later, the Wall Street Journal reports that TSLX is considering bidding on some of the bankrupt retailer BBBY’s assets, using more than $500 million of debt it lent to BBBY as at least part of the bid.  At the same time, Reuters reports that SPCE will launch its commercial space tourism service late this month when they take three passengers into space June 27-30.  In addition, Reuters also reported that within a day of its blowout earnings report, ORCL laid off hundreds of employees and rescinded job offers within its Health unit on Thursday.  (That unit includes CERN, which ORCL acquired in December.) 

In stock legal and regulatory news, BAYRY (Bayer) and its US subsidiary MON have reached an agreement to pay NY state $6.9 million to settle claims of misleading ads claiming that Roundup weedkiller was environmentally safe. Elsewhere, Bloomberg reported Thursday that GS has paid “millions” to settle an internal complaint after an executive “accidentally” sent a sexually explicit video recording of himself to a female junior staffer. (This complaint was deemed so sensitive that it was handled at the C-suite level and overseen by CEO Solomon.)  In the opposite of government regulation, Reuters has reported that INTC and the German government are very close to a deal whereby the chipmaker will receive a $10.83 billion subsidy (up 50% from the amount originally agreed) in return for INTC building a chip-making Fab plant in Magdeburg Germany.  (A deal is expected to be signed Monday.)  Meanwhile, AMAT sued CA company Mattson (owned by Chinese company) of a 14-month effort to steal technologies and trade secrets used to AMAT’s chipmaking equipment.  Later, the Wall Street Journal reported that both the Dept. of Justice and SEC are investigating GS’s role in the final days of SIVB.

In IPO news, exuberance returned to the market as FOMO drove action on the new issue CAVA. The company had priced its IPO at $19-$20 Wednesday night, but the stock opened Thursday at $42 and reached a high of $47.89 before closing at $43.78. That amounted to a tidy 118+ percent one-day gain for those (institutions, insiders, and others) who had got in at the IPO price. The bottom line is that first, CAVA really caught the right day to list and second, the appetite for IPOs seems to have returned to markets. (Some would say that may be a sign we are nearing a top.)

After the close, ADBE beat on both the revenue and earnings lines.  This included quarter-on-quarter growth of both lines.  ADBE also raised its forward guidance.

Overnight, Asian markets were heavily green with only Taiwan (-0.27%) in the red.  Meanwhile, Shenzhen (+1.11%), Hong Kong (+1.07%), and New Zealand (+0.96%) led the rest of the region higher.  In Europe, we see the same picture taking shape at midday with only Russia (-0.28%) in the red.  The CAC (+0.90%) is out front leading the region while the DAX (+0.30%) and FTSE (+0.38%) also are driving optimism in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a flat start to the day.  The DIA implies a -0.03% open, the SPY is implying a +0.04% open, and the QQQ implies a +0.15% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.732% and Oil (WTI) is off a quarter of a percent to $70.44 per barrel in early trading.

The major economic news events scheduled for Friday are limited to the Michigan Consumer Sentiment Report (10 am) and a pair of Fed Speakers (Bullard at 3 am and Waller at 7:45 am).  There are no major earnings reports scheduled for Friday. Still, it is worth remembering that today is Triple Witching Day (the simultaneous expiration of monthly stock options, stock index futures, and stock index futures options), which causes heavy volume, especially at the end of the day.  Also, remember that Monday is a market holiday (Juneteenth).

In miscellaneous news, Bloomberg reported that markets need to prepare for more uncertainty around soon to begin flowing “economic disaster” news coming out of Washington.  On Thursday, and in spite of claims that they had no such plans earlier this year, a 176-member group of the GOP House members proposed cuts to Social Security in the form of raising the retirement age to 69.  The group’s plan would also subsidize private alternatives to Medicare.  (This would apparently be a precursor to eliminating that government program at some later time.)  The group’s plan (appropriation bills proposals) calls for 30% cuts to all the non-defense areas of the budget…and also for another $5.1 trillion round of tax cuts.  (All of these measures are contrary to what they agreed to and was signed into law by the debt ceiling deal just two weeks ago.)  So, this is the start of what will clearly be another round of GOP brinksmanship. This time, instead of threatening a default of US debt, they will threaten a government shutdown, leading up to the September fiscal year-end.  So, be prepared for coming daily market swings (chop or volatility) based on a series of “the world is ending” and “I’m the most XXX and the other side are all YYY” proclamations from every politician, economist, pundit, Tom, Dick, and/or Harry.  In other government news, several US federal agencies joined a growing list of companies (SHEL as one example) and governments hit by a global hacking campaign known as MOVEit.  This attack took advantage of a flaw in PRGS company software that is widely used (globally) in information infrastructures.

With that background, it looks like the large-cap indices are looking to start Friday with a little rest (modestly lower open). However, QQQ is near premarket highs at this point and the Bulls seem to want to keep running in the tech-heavy index. All three major index ETFs remain above their T-lines (8ema). So, at least at this point, there is no way to see the market except in a bullish trend. In terms of over-extension, the QQQ is far above its 8ema as of this moment while the premarket action has allowed SPY to get some extension relief. The T2122 indicator is back inside of the overbought territory, but only midway into that measure of overextension. A few other things to keep in mind. First, we have had a hell of a bullish run-up this week. So, profit-taking would seem to be in order (don’t be surprised if we see it by the market overall today). Secondly, the first point is especially true ahead of the upcoming 3-day weekend (and you also need to prepare your account for that off period…take profits, hedge, lighten up, move stops, etc.). Finally, it is “triple witching” (the fourth witch stopped trading in 2020). So, we should expect heavy volume today…particularly at day end…with the possibility of “pinning” or even increased volatility in spots. (Triple witching does not tend to increase volatility overall…but you can drown in a river that viewed overall is only a quarter inch deep.)

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets diverged again today as DIA continued to be a laggard and contrary to the two other major index ETFs.  SPY opened very modestly higher (up 0.08%), while QQQ opened up 0.04% higher, but DIA gapped down 0.34%.  After the open, SPY and QQQ rallied all morning, reaching the highs of the day at 11:25 am.  At that point, they both began a slow selloff that lasted until 2 pm.  Meanwhile, DIA ground sideways in a tight range until 2 pm after its gap lower.  However, the Fed statement at 2 pm caused the major index ETFs to “sync up” as the market crashed hard for 30 minutes, rallied hard for 30 minutes, and then fell a little less violently during the last hour of the day.  However, the SPY and QQQ did rebound in the last 5 minutes much more than the DIA.  This action gave us indecisive candles in all three major index ETFs.  The SPY printed a long-legged Doji, the DIA a gap-down black-bodied Spinning Top, and the QQQ a white-bodied Hammer or Hanging Man.

On the day, seven of the 10 sectors were in the red as Healthcare (-0.82%) led the market lower, while Consumer Defensive (+0.49%) and Technology (+0.47%) held up much better than other sectors.  At the same time, SPY gained 0.12%, QQQ gained 0.73%, and DIA fell 0.65%.  The VXX fell almost 3% to 27.57 and T2122 dropped back to just outside the overbought territory to 77.19.  10-year bond yields fell to end at 3.796% while Oil (WTI) lost 1.04% to end the day at $68.69 per barrel.  So, overall, it was a divergent day punctuated by the volatility caused by the FOMC.   Still, all three index ETFs remain above their T-lines (8ema) even as DAI retested and held its T-line during the day.  This all happened on well-above-average volume in the QQQ, slightly above-average volume in the DIA, and average volume in the SPY. 

In major economic news, the May PPI (month-on-month) came in better than expected at -0.3% (compared to a forecast of -0.1% and much better than the April value of +0.2%).  At the same time, May Core PPI was reported in line with expected values at +0.2% (exactly matching the forecast and April reading, which were both +0.2%). Later in the morning, the EIA Weekly Crude Oil Inventories came in well above the anticipated level at a build of 7.919-million-barrels (versus a forecast calling for a build of 1.482-million-barrels and far above the previous week’s 0.451-million-barrel drawdown).  However, the main news of the day came from the FOMC.  In terms of Fed Funds rate projections (dot plot), the Fed’s Q2 forecast expects current rates to top out at 5.6% (was 5.1%) this year, one year from now they expect to be at 4.6% (was 4.3%), and two years out they now anticipate the rate to be set at 3.4% (was 3.1%).  Clearly, these were all increases from the projections in the Q1 forecasts.  Their longer-term projection is for rates to fall to 2.5% (the same as it has been since 2019).  With that said, the FOMC did pause rate hikes for the first time in 10 meetings or 18 months, holding rates at the previous 5.00% to 5.25% level.

In terms of Fed speak, as noted above the FOMC statement expects Fed Funds rates to top out at 5.6% later this year.  This implies two more quarter-point hikes spread out across the four remaining 2023 meetings. (This hawkish stance was unexpected by the market and caused the big 2 pm knee-jerk downward.)  They were more upbeat about the 2023 economy, expecting the job market to endure only “small job losses” (compared to a much more somber March statement) as they project the Unemployment Rate will rise to 4.1% before year-end. At the same time, they see inflation on a very similar path to what they had projected in March.  For example, they expect PCE (their preferred inflation measure) to fall to 3.2% later this year.  (They had forecasted it would only fall to 3.4% this year at the March meeting).  Nonetheless, they still anticipate Fed Fund rate cuts (about 1%) to begin in 2024 in order to stimulate growth because they expect Unemployment to reach 4.5% in 2024. 

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As for Chair Powell himself, in addressing the pause, he said, “We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt.”  Later, he tried to “walk back” the Fed Funds rate forecast by saying he thinks rate cuts are “about a couple of years out” (as opposed to one).  However, he also said “I would almost say that the conditions that we need to see in place to get inflation down are coming into place.”  (He later defined that progress to mean “growth meaningfully below trend.”)  The Chair also said that good financial conditions are likely to allow the Fed to push hard on the reduction of its balance sheet (which itself will act as a means of taking liquidity out of the market).  Finally, Powell pushed back against the idea that the FOMC had already made a decision about what they would do in July.  Specifically, he said “I would say two things: One, a decision hasn’t been made. Two, I do expect that it will be a live meeting.”  With that said, as of 5:30 pm Wednesday the CME Fedwatch Tool says that is a 64.5% probability of a quarter-point hike in July (the other 35.5% bet on no hike at that meeting). 

In stock news, health insurance companies took a hard hit Wednesday when UNH announced its costs were rising due to an increase in surgeries by older adults.  (HUM took the worst hit plummeting 11.24%, CVS dropped 7.76%, ELV fell 6.89%, UNH itself was down 6.4%, and CI fell “just 3.11%.)  In better (shareholder) news, SHEL said it will increase shareholder distribution to 30%-40% of cash flow (up from the current 20%-30%).  This includes a 15% boost in dividends as well as an increase in the size and pace of share buybacks.  This comes as the new CEO said the company is doubling-down on its “oil and gas” units shifting away from previous efforts to grow “renewables and low-carbon” businesses.  Elsewhere, VLKAF said on Wednesday that it expects to realize $10.83 billion in savings from cost-cutting and operational efficiency gains by 2026.  At the same time, in boycott news, BUD’s Bud Light beer lost its spot as the top-selling beer in the US (for the week ending June 3) to STZ’s Modelo Especial brand following the backlash from conservatives who did not like BUD doing a social media promotion with transgender influencer Dylan Mulvaney.  (Modelo had 8.4% of US beer sales while Bud Light came in second at 7.3% after Bud Light experienced a 24.6% decrease in sales.)  Meanwhile, GOOGL announced it is launching two new AI-powered features for advertisers designed to automatically find the best ad placements across GOOGL platforms.  Later, SCHW announced it is now forecasting a 10%-11% drop in Q2 revenue due to interest effects and soft trading activity.  (SCHW said it has had to rely on more expensive funding sources than had been expected.)

In stock legal and regulatory news, the FAA said Wednesday that all new passenger aircraft will be required to have a secondary barrier to prevent flight deck intrusions. The rule will not take effect until two years from the “effective date” which itself will not be until August.  This comes as plane manufacturers (BA and EADSY), unions, and the major airline trade group have fought the rule for years.  (The rule was originally supposed to be adopted in 2019.  However, industry interest groups have been very successful in dragging out the implementation as lobbying money and lawyers carry a big stick in Washington.  In other air industry news, in a nod to airline labor shortage problems, the US House voted to raise the mandatory pilot retirement age from 65 to 67 as part of the FAA reauthorization bill expected to be taken up by the whole House next month.  Elsewhere, in Canada, the country’s budgetary watchdog now estimates that the subsidies (tax credits) paid to VLKAF in order to obtain a battery plant will cost their government $1.8 billion (US) more than forecast.  This news comes as tense negotiations are underway between Canada and STLA over the subsidies given to garner its own battery plant.  Meanwhile, President Biden vetoed a bill that would have scrapped limits on the pollution produced by heavy trucks and buses.  This leaves in place EPA rules cutting emissions by 2032 despite GOP and transportation industry objections to the reductions which they say will be too costly to implement over 9 years.

After the close, LEN beat (significantly) on both the revenue and earnings lines.  (The homebuilder posted more than a 12% upside revenue and a 27% upside earnings surprise.)  It is worth noting that the company also raised its forward guidance.

Overnight, Asian markets were mixed.  Hong Kong (+2.17%) and Shenzhen (+1.81%) were by far the biggest gainers while losses were modest, led by South Korea (-0.40%) and India (-0.36%).  Meanwhile, in Europe, the bourses are mostly lower at midday.  The CAC (-0.83%), DAX (-0.70%), and FTSE (+0.04%) lead the way on volume and market cap as usual.  However, Norway (+0.75%) is the biggest of the four gainers in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a down start to the day.  The DIA implies a -0.22% open, the SPY is implying a -0.41% open, and the QQQ implies a -0.73% open at this hour.  At the same time, 10-year bond yields are back up to 3.829% and Oil (WTI) is up just over 1% to $68.98 per barrel in early trading.

The major economic news events scheduled for Thursday include May Retail Sales, May Imports, May Exports, Weekly Initial Jobless Claims, NY Empire State Mfg. Index, and Philly Fed Mfg. Index (all at 8:30 am), May Industrial Production (9:15 am), April Business Inventories and April Retail Inventories (both at 10 am).  The major earnings reports scheduled for Thursday are limited to KR, JBL, and WLY before the open.  Then, after the close, ADBE reports.

In economic news later this week, on Friday, we Michigan consumer Sentiment, and a Fed Speaker (Waller at 7:45 am).

In terms of earnings reports, there are no reports scheduled for Friday.

In miscellaneous news, the ECB is expected to raised rates to the highest level in 22 years and leave the door open to more rate increases at 8:15 am today.  Unlike the US, even as the Euro Zone economy flags, the ECB is fighting against the highest inflation in the ECB’s 25-year history (now 6.1%).  Still, this increase is only expected to take ECB rates to 3.5% (nearly two full percent below the US Fed Funds rate).  On this side of the pond, UPS and Teamster negotiators have agreed to one of the key sticking points in their ongoing contract negotiations.  UPS will install air conditioning in its entire fleet of 95,000 delivery vans.  Finally, CAVA priced its IPO last night at $22 per share with 14.4 million shares on offer as of sometime today.  (IPOs typically open after the opening bell as opposed to with the bell.)

With that background, it looks like the Bears are trying to open markets near the lows of the premarket prices. All three major index ETFs remain above their T-lines (8ema). So, at least at this point and by that measure we remain in a bullish uptrend and the move is nothing but a minor pressure relief after five very strong days (at least in the QQQ and SPY). However, the ECB Rate decision or (more likely) the large US data dump at 8:30 am may change that premarket outlook. Expect there to be some volatility now that markets have had a little time to digest the Fed data and words from yesterday. In terms of over-extension, none of the major index ETFs are too far from their T-line as of premarket and the T2122 indicator has dropped back outside of the overbought territory. So, the bulls have some slack if they gather the momentum and, of course, the bears have plenty of room if they want to make a charge.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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