Friday saw an essentially flat open as the SPY gapped 0.10% higher, the DIA gapped 0.09% higher, and the QQQ gapped 0.13% lower.  From that point, both large-cap indices chopped sideways in a fairly tight range, ending the day inside the tiny opening gap.  Meanwhile, the QQQ did something similar but with stronger magnitude swings than the large-caps and ending up on the bullish side of the opening gap.  This action gave us indecisive Doji candles in the SPY and DIA (both of which retested their T-lines all day and ended right on that average) and a white-bodied Spinning Top candle in the QQQ that also retested its T-line (8ema) but failed to break above.  The moving averages are still stacked bullish (3ema > 8ema > 17ema > 50sma > 200sma) in all three major indices with the 3ema, 8ema, and 17ema all rising in the large-cap indices while the 3ema is falling slightly in the QQQ.

On the day, the sectors were split 50/50 with Healthcare (+1.20%) by far the strongest and Basic Materials (-1.52%) by far the weakest sectors.  At the same time, the SPY gained 0.08%, DIA gained 0.05%, and QQQ gained 0.10%.  VXX fell almost 2% to 39.20 and T2122 remained flat in the mid-range at 65.10. 10-year bond yields rose a bit to close at 3.568% while Oil (WTI) rose three-quarters of a percent to $77.95 per barrel.  So, Friday was clearly an indecisive day where trader seemed to ponder better than feared earnings, a seemingly resolute and unfazed Fed, and signs of economic slowdown or maybe even mild recession ahead.  This all happened on average volume in the QQQ with lower-than-average volume in the two large-cap indices.    

In economic news, Preliminary Manufacturing PMI came in slightly above expectation Friday at 50.4 (compared to a forecast of 49.0 and a March reading of 49.2).  (This puts this indicator right at flat since anything above 50.0 indicates growth and anything below this level indicates contraction.)  At the same time, Preliminary Service PMI also came in slightly above the anticipated value at 53.7 (versus a forecast of 51.5 and a March reading of 52.6).  Again, this indicates just a bit of growth in the services sector.  Meanwhile, the S&P Global Composite PMI (also preliminary) was reported at 53.5 (slightly better than the forecast of 52.8 and the March reading of 52.3). These all show very modest economic growth in the US and the world (if the data can be believed). Finally, the Fed’s “Inflation Expectations Index” (a new very broad-based tool the Fed developed in 2020) fell to its lowest level in almost two years as of the end of last quarter.  The IEI stood at 2.22% down from 2.31% at the end of December and below all readings going back to June 30, 2021, when it was at 2.18%. 

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In stock news, Reuters reported Friday that LLY will release results of an Alzheimer’s drug trial before the end of June.  The company told Reuters it expects Medicare to reverse course and fully cover the currently experimental drug (implying the trials went very well).  Rival drugs from BIIB and ESAIY are also scheduled to release studies in the next few months.  In other healthcare news, SWAV shares soared on Friday amid rumors that BSX is looking to takeover the medical device maker.  Elsewhere, China’s aviation regulator published a report telling its domestic airlines they can now take delivery of BA 737 MAX jets, subject to newly prescribed training.  This could be very positive for BA, which has 130 737 MAX jets finished and awaiting delivery to Chinese airlines.  Meanwhile, for the second time in a week, WMT sold off another of its online fashion brands to a private retailer.  This is part of a WMT push to improve margins after having bought the brand (Eloquii) in an attempt to compete with AMZN online.  In South America, Chile (the world’s second-largest producer) announced that it will be nationalizing its lithium industry.  This move will hit ALB and SQM hard and may have ripple impacts on TSLA (major customer of both SQM and ALB).  Finally, in it pays to be the boss news, GOOGL reported late Friday night that CEO Pinchai received $226 million in compensation (including $218 million in stock grants) in 2022 even as the company eliminate 12,000 jobs in January. 

In stock legal and regulatory news, the Wall Street Journal reported Friday that the Fed may end the exemption that allowed midsized (regional) banks such as SIVB and SBNY to hide losses on securities they hold.  This would reverse the Trump-era loosening of Fed banking regulation. At the same time, Treasury Sec. Yellen proposed guidelines that would force more nonbank entities (financial institutions that 2019 rules allowed to avoid Dodd-Frank Act reporting and regulation) posing systemic risk to be subject to supervision.  Elsewhere, a US federal judge in Seattle ruled in favor of AMZN related to a consumer class-action lawsuit that accused the company of scheming to curb competition via the “Fulfillment by Amazon” program which then caused consumers to pay more than a free market would have.  (Appeal is expected.)  Meanwhile, a CA jury found that a TSLA autopilot feature did not fail in the first case involving that feature.  The jury could be a good sign as TSLA continues to roll out more advance “Full Self-Driving” features.  In other auto legal news, F defeated an appeal by consumers who had claimed the company cheated on fuel economy tests for Ranger and F-150 trucks.  At the same time, NLST won a $303 million federal jury verdict in TX against SSNLF (Samsung) over computer memory patent infringement.  In an old case, PARA has agreed to pay a $167.5 million settlement to former CBS stock shareholders related to the 2019 merger of Viacom and CBS.

In miscellaneous news, on Sunday, BBBY filed for bankruptcy after failing to raise the money required to save the company.  The filing requested permission to auction off assets even as the firm’s 480 stores are expected to remain open until the assets are liquidated.  However, at the time of the filing, BBBY had stopped paying for the severance of laid-off workers. So, it is unknown if there will be willing employees to keep the doors open.  Elsewhere, CMCSA fired the CEO of its NBCUniversal unit Sunday after he admitted having an inappropriate relationship with a woman at the company.  Meanwhile, overnight, Bloomberg reported than hedge funds have placed the biggest futures short position in history on 10-year bonds (1.29 million contracts).  On its face, this would be a big bet that the US will see a mid-term recession.  However, the article quotes a Treasury Market analyst as saying this could be a bit misleading since hedge funds will often buy cash treasuries and then short the treasury futures in order to arbitrage the difference in price.

Overnight, Asian markets were mixed but leaned to the downside.  Shenzhen (-1.16%), South Korea (-0.82%), and Shanghai (-0.78%) paced the losses while New Zealand (+0.83%), India (+0.68%), and Taiwan (+0.15%) led the gainers.  In Europe, the bourses are also mixed but are leaning modestly toward the green at midday.  The DAX (+0.03%), CAC (-0.02%), and FTSE (-0.05%) lead the region with many of the smaller exchanges moving slightly more to the upside in early afternoon trade.  In the US, Futures are pointing toward a modestly lower start to the day.  The DIA implies a -0.14% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.03% open at this hour.  At the same time, 10-year bond yields are falling to 3.539% and Oil (WTI) is off three-tenths of a percent to $77.64/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include KO, CS, GTX, and PHG before the open.  Then, after the close, AAN, ARE, AMP, BRO, CDNS, CNI, CHX, CLF, CCK, FRC, NBR, PKG, RRC, SSD, and WHR report. 

In economic news later this week, on Tuesday we get Building Permits, Conf. Board Consumer Confidence, March New Home Sales, and API Weekly Crude Oil Stocks.  Then Wednesday, March Durable Goods, March Goods Trade Balance, Preliminary March Retail Inventories, and EIA Crude Oil Inventories are reported.  On Thursday, we get Preliminary Q1 GDP, Weekly Jobless Claims, and March Pending Home Sales.  Finally, on Friday, Q1 Employment Cost Index, March PCE Price Index, March Personal Spending, Chicago PMI, and Michigan Consumer Sentiment.

In terms of earnings reports later this week, on Tuesday,  MMM, ABB, ALFVY, ADM, ARCC, ABG, BIIB, CNC, GLW, DHR, DOW, FISV, GEHC, GE, GM, GEO, HAL, HUBB, IVZ, JBLU, KMB, LH, LTH, MCD, MCO, MSCI, NEE, NTRS, NVS, OMF, PCAR, PEP, PII, PHM, RTX, ST, SHW, SPOT, SCL, THC, TRU, UBS, UPS, VZ, XRX, GOOGL, AGR, BXP, BYD, CMG, CB, CSGP, WIRE, ENVA, ENPH, EQR, GOOG, HA, ILMN, JBT, JNPR, MTDR, MSFT, NEX, OI, RUSHA, TX, TXN, TFII, UHS, V, and WFG reports.  Then Wednesday, we hear from ALLE, AMT, APH, ADP, AVY, BA, BOKF, BSX, CVE, GIB, CME, CSTM, DOV, ETR, EVR, FSV, FTV, GD, GPI, HES, HLT, HUM, NSP, MHO, MAS, NSC, ODFL, OTIS, OC, PAG, BPOP, PRG, RCI, RES, R, SLGN, TMHC, TEL, TECK, TDY, TMO, TNL, UMC, VRT, WNC, WAB, WFRD, ACHC, AFL, ALGN, AB, AWK, NLY, AR, ACGL, ASGN, AVB, AXS, BMRN, CHRW, CACI, CP, CLS, CCS, CHDN, CMPR, FIX, EBAY, EW, ESI, EQT, FBIN, GGG, HELE, ICLR, IEX, KLAC, LSTR, MKL, MAT, MTH, META, MEOH, MAA, MOH, MYRG, NOV, ORLY, OII, PPC, PXD, PLXS, PTC, RJF, RHI, ROKU, ROL, NOW, SNBR, STC, SUI, TDOC, TER, TNET, TROX, TYL, URI, WCN, WSC, and WM.  On Thursday, AOS, ABBV, MO, AAL, AIT, ARCH, AMBP, AZN, BAX, BFH, BMY, BC, CRS, CARR, CAT, CBRE, CNP, CHD, CMS, CNX, CMCSA, CROX, CRF, DQ, DPZ, DTE, LLY, EME, FIS, FAF, FCFS, FCN, GOL, HOG, HAS, HP, HSY, HTZ, HGV, HON, IP, IPG, IQV, KDP, KEX, LEA, LII, LECO, LIN, LKQ, HZO, MA, MRK, NEM, NOC, ORI, OSK, PATK, PTEN, BTU, PNR, DGX, RS, ROK, ROP, SPGI, SNY, SNDR, SIRI, SAH, SO, LUV, SAVE, SRCL, STM, FTI, TXT, TTE, TSCO, TPH, VLO, VLY, VC, GWW, WST, WEX, WTW, WIT, XEL, ATVI, AEM, ALSN, AMZN, AMGN, ATR, ACA, AJG, BZH, COF, CSL, SS, SINF, COLM, DXCM, DLR, EMN, EHC, ERIE, FLSR, FE, GFL, GILD, HIG, PEAK, HUBG, INTC, LHX, LPLA, MTX, MHK, MDLZ, OLN, PINS, PFG, RSG, RMD, SGEN, SKX, SKYW, SM, SNAP, AWN, SSNC, TMUS, X, WY, and INT report.  Finally, on Friday, AON, ARCB, ARES, AVTR, BLMN, CCJ, GTLS, CHTR, CVX, CL, DAN, XOM, FMX, GNTX, IMO, JKS, LAZ, LYB, NYCB, NWL, NHYDY, NVT, POR, SAIA, and TRP report.

In what BUD hopes will end the recent conservative indignation and boycott over a (small by BUD standards) Bud Light line advertising campaign featuring a “trans online influencer”, the company has taken action related to the incident. BUD placed the Bud Light VP of Marketing and her boss on leave. Sales figures show that Bud Light sales fell 10.7% the week following the uproar. However, there was a somewhat corresponding uptick in other BUD brand sales. BUD stock has fallen 1% over the weeks since the campaign made news, meaning that no impact from the uproar is apparent in the market value of the company at least yet. In unrelated news, TAP took a hit over the weekend as Belgium customs destroyed thousands of Miller High Life beers. Like the American conservatives, Belgium apparently (suddenly) took offense that Miller High Life labels itself “the Champagne of beers.” (Although what that has to do with Belgium, as opposed to France, or why the outrage manifested itself now, after decades of Miller using that slogan, beats me.)

So far this morning, KO, CS, and PHG all reported beats on the revenue and earnings lines.  Meanwhile, GTX beat on revenue while missing on earnings.  Oddly, the biggest shock was a 43.2% upside revenue surprise from CS (despite it having been sold to avoid failing during the quarter).  PHG also had a 26% upside surprise on earnings but GTX had a 38% downside surprise on the same line. 

With that background, it looks like all three major indices have climbed back to flat and will be thinking about retesting their T-lines this morning. The consolidation or modest pullback seem to remain underway. Even though more than 90% (according to Fedwatch) of the market is sure there will be just a quarter-point hike at the next Fed meeting a week from Wednesday, uncertainty still abounds. Over-extension is obviously not a problem in terms of the T-line or the T2122 indicator. SPY and QQQ seem to be testing a potential support level but DIA does not have that obvious level helping it below. Right now, the chart tells us to maintain a long bias but be wary of weakening bulls and keep an eye out for trend breaks.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

On Thursday, markets gapped lower again (opening down 0.69% in the SPY, down 0.43% in the DIA, and down 0.97% in the QQQ).  At that point, all three major indices began a long, slow, meandering rally until they reached the highs of the day at about 1:30 pm.  From there, a quicker selloff took the SPY, DIA, and QQQ back to the lows of the day with only some last-minute profit taking closed all the major indices out just up off the lows.  This action gave us indecisive, white-bodied, Spinning Top or Doji-type candles that gapped below their T-line, retested it, and closed just below.  That tends to tell us that markets have not made up their mind yet.  Again, this all happened on lower-than-average volume (much lower in the large-cap indices).

On the day, eight of the 10 sectors were in the red with Communications Services (-2.09%) leading the way lower (by over a percent) while Consumer Defensive (+0.32%) held up better than other sectors.  At the same time, the SPY lost 0.56%, DIA lost 0.31%, and QQQ lost 0.76%.  VXX gained 2.2% to 39.95 and T2122 fell further into the mid-range to 63.13.  10-year bond yields plummeted to close at 3.538% while Oil (WTI) dropped another 2.36% on the day to $77.29 per barrel.  So, Thursday was the second consecutive day that was teed up for the bears, they just could not get their job done.  However, unlike Wednesday, the Bulls also couldn’t keep momentum once they did step in to “buy the dip” at the open.  Accordingly, you could see this as just continued consolidation or as a hesitant start of a pullback within a bullish trend.  That trend is still intact with the 3ema > 8ema > 17ema > 50sma > 200sma in all but the QQQ, where the 3ema crossed just below the 8ema by a few pennies Thursday.    

In economic news, Weekly Initial Jobless Claims came in a bit above expectation at 245k (compared to a forecast of 240k and the prior week’s reading also of 240k).  At the same time, the Philly Fed Manufacturing Index came in well below the anticipated number at -31.3 (versus a forecast of -19.2 and even below the March value of -23.2).  Meanwhile, March Existing Home Sales also came in a little light at 4.44 million (versus an expected 4.50 million and the February reading of 4.55 million).  After the close, the Fed Balance Sheet was reported at $8.593 trillion (as of April 20), which is down $22 billion from the prior week.  At the same time, Bank Balances with the Federal Reserve were reported at $3.165 trillion (as of April 20), which was down $185 billion from the prior week and was the third consecutive weekly decline. 

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In economic speak news, Treasury Sec. Yellen told a Johns Hopkins University audience that “the US banking system remains sound and the (US) government will take any necessary steps to keep it the strongest and safest financial system in the world.”  Later, Fed Governor Waller said that the Fed needs to consider the possible use of AI (which he said offers opportunities and risks) as a way to offset the speed at which customers can pull money out of banks.  “If they are going to have deposit flows being faster we need to think how do we (Fed) do pricing faster, how do we assess the collateral, that’s got to be faster…to make the discount window more effective, we have to be able to do things faster as well.” Waller said.  He also went on to mention that “things have kind of calmed down (in the banking sector).”  Then, at mid-afternoon, Cleveland Fed President Mester (non-voter) told a community roundtable that the Fed has interest rate increases ahead of it, but also said the aggressive move to boost the cost of borrowing to quash inflation is near an end.  (You have to love the doublespeak.)  However, she did go on to say she expects a “soft landing” when she said, “I do think we’re going to have very slow growth – I think growth will be well below 1%.”  Finally, she expects unemployment to top out at 4.5% to 4.75% (it is currently 3.5%) and expects inflation to get down to the Fed’s 2% target in 2025.

In stock news, the CEO of UNP said Thursday that the railroad will slow its pace of hiring in the second half of the year amid a cloudy economic outlook.  In IPO news, UCAR had an eventful first day, including several halts due to volatility. The announced IPO pricing was $6.00/share, while the stock opened at $8.10, reached a high of $75.00, and then closed at $43.18 in its first day of trading…on volume of 3.4 million shares.  (That is interesting since only 2.4 million shares were offered for sale.)  Elsewhere, LMT announced a new partnership with German defense industry leader RNMBF (Rheinmetall) to produce HIMARS rocket launching systems.  The production will take place in Germany but will include both US and German-made components.  Later, NOVA announced the US government would provide a partial loan guarantee of $3 billion to back financing of its solar rooftop systems.  The Dept. of Energy will give an indirect guarantee of 90% for $3.3 billion in customer solar panel installation loans.  Meanwhile, AMZN announced it has launched a program to identify and track sellers in its marketplace who sell counterfeit goods and share that information with the US Customs and Border Protection agency.  After the close, CLX announced it will cut about 4% of its non-production workforce (about 200 jobs) after having cut 100 jobs from the same non-production category in 2022.

In stock legal and regulatory news, the US Dept. of Justice announced it has reached a settlement with MU to resolve the company’s discrimination against a US citizen when it hired a temporary visa worker over the citizen for non-pertinent reasons.  The penalty was not specified but MU will pay the affected worker $85,000 and will be subject to DOJ monitoring for two years.  Elsewhere, in a reversal of an announcement earlier in the week, the US Treasury has made vehicles from RIVN and VLKAF (Volkswagen) eligible for the full $7,500 US Tax Credit for electric and hybrid vehicles.  Meanwhile, a US Bankruptcy Judge in New Jersey has halted most, but not all, liability lawsuits against JNJ (over cancer allegedly caused by tac products). The judge stopped 38,000 of the liability cases while JNJ seeks to reach a settlement with the claimants.  (JNJ filed for Chapter 11 bankruptcy for the unit it transferred all talc business to a second time after having had the first filing invalidated as an obvious attempt to avoid liability.)  The ruling in JNJ’s favor gives the company more leverage against the 80,000 claimants who must weigh their portion of JNJ’s proposed $8.9 billion over 30 years settlement against the possibility the unit’s bankruptcy is approved (in which case JNJ is basically free of all liability).  75% of the claimants would need to accept the offer for the JNJ proposed settlement to go into effect.  At the same time, in New York, PARA has counter-sued WBD in the case involving royalty fees for streaming rights of the “South Park” animated comedy.  After the close, RIDE received a delisting notice from Nasdaq and is now exploring a “reverse split” to get the stock price above the exchange minimum requirement.  (The company has until October 16 to regain compliance.)

After the close, PPG, CSX, VMI, and ASB all reported beats on both the earnings and revenue lines.  Meanwhile, SEIC, OZK, and WRB reported beats on the revenue line while missing on earnings.  Unfortunately, KNX missed on both the top and bottom lines.  It is worth noting that PPG raised its forward guidance while KNX lowered its forward guidance.

Overnight, Asian markets leaned heavily to the red side with only New Zealand (+0.40%) and Singapore (+0.25%) managing to stay green.  Meanwhile, Shenzhen (-2.28%), Shanghai (-1.95%), and Hong Kong (-1.57%) led most of the region lower.  In Europe, the bourses are mixed but lean lower on modest moves at midday.  The DAX (-0.33%), CAC (-0.10%), and FTSE (+0.08%) are typical and lead the region in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.10% open, the SPY is implying a -0.22% open, and the QQQ implies a -0.42% open at this hour.  At the same time, 10-year bonds are flat at 3.538% and Oil (WTI) is also flat at $77.40/barrel in early trading.  

The major economic news events scheduled for Friday are limited to Mfg. PMI, S&P Global PMI, and Services PMI (all at 9:45 am).  The major earnings reports scheduled for the day include ALV, FCX, HCA, PG, RF, SDVKY, SAP, and SLB before the open.  There are no major earnings reports scheduled for after the close on the day. 

So far this morning, PG, HCA, VLVLY, SLB, SDVKY, and ALV have all reported beats to both the revenue and earnings lines.  Meanwhile, SAP missed on revenue while it beat on earnings.  On the other side, RF beat on revenue while missing on earnings.  (FCX is scheduled to report at 8 am.)  It is worth noting that both PG and HCA have raised their forward guidance.  The only significant surprises were HCA with a 24% and SAP with a 12% upside earnings surprises.

In miscellaneous news, the EIA reported a much higher-than-expected Natural Gas inventory build for last week.  Nat Gas storage increased 69 bcf, compared to 25 bcf the prior week and a 5-year average of 41 bcf stockpile build for this week of the year.  Total inventories are 34% higher than a year ago and 21% higher than the 5-year average.  Elsewhere, in late news, AMZN’s Whole Foods unit informed corporate employees that it will lay off several hundred people (only about 0.5% of its total workforce).  Finally, in a sign of a company that doesn’t know what it’s doing, TSLA reversed course overnight. One day after it lowered prices (for the sixth time in less than four months), reported disappointing earnings (which caused the stock to fall 10%) and signaled that price cuts would continue…TSLA announced overnight it will increase prices for its Model S and Model X cars. 

With that background, it looks like the large-cap indices are continuing their test of the T-line (8ema) level this morning. Meanwhile, QQQ is falling a bit further below its own T-line. With no economic news scheduled prior to the open, it looks like earnings will set the mood until at least 9:45 am. Clearly, there is a consolidation or a so-far weak pullback underway. If you look at the candle shapes in the DIA, it is obvious traders are pretty unsure of what will happen next. Regardless, the bullish trend remains in place but is also looking like it is losing steam. Over-extension is obviously not a problem in terms of the T-line or the T2122 indicator. SPY and QQQ seem to be testing a potential support level but DIA does not have that obvious level helping it below. Right now, the chart tells us to maintain a long bias but be wary of weakening bulls and keep an eye out for trend breaks. Also, remember this is Friday. So, pay yourself, lock-in some profits, and prepare your account 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

Markets gapped down to open in a divergent way on Wednesday (down 0.49% in SPY, down 0.19% in the DIA, and down 0.78% in the QQQ).  However, the SPY and QQQ immediately began to rally and recrossed that gap by early afternoon.  From there, both of them traded sideways into the close at very near the previous closing price.  Meanwhile, the DIA began trading sideways right after its gap lower and continued to undulate just below that opening price all day.  This action gave us gap-down, white-bodied candles in both the SPY and QQQ that retested and held their T-lines (8emas).  At the same time, the DIA printed an inside day, indecisive Doji candle that also held a retest of its T-line.  All of this happened on very low volume (far below the average volume in all 3 major indices).

On the day, six of the 10 sectors were in the red with Energy (-0.93%) leading the way lower while Financial Services (+0.57%) held up better than other sectors.  At the same time, the SPY lost 0.02%, DIA lost 0.27%, and QQQ lost 0.05%.  VXX fell another 0.38% to 39.09 and T2122 fell slightly to just outside the overbought territory to 79.79.  10-year bond yields rose a bit to close at 3.595% while Oil (WTI) dropped 2.35% on the day to $78.95 per barrel.  So, Wednesday was teed up for the bears at the open but they just could not deliver.  Bulls simply did not want to give up and bought the dip led by regional banks.  Yet, it remained an indecisive day as the bulls also failed to break out.  All we can say for sure is that we are sitting in a consolidation area with a bullish trend still intact as the 3ema > 8ema > 17ema > 50sma > 200sma.   

In economic news, the EIA Weekly Crude Oil Inventories fell more than expected with a 4.581-million-barrel drawdown (versus to a forecasted 1.088-million-barrel drawdown and farther below the prior week’s 0.597-million-barrel inventory build). The drawdown was largely due to a combination of increased exports and refineries reopening.  At the same time, EIA reported a gasoline inventory build of 1.300-million-barrels (compared to a forecasted 1.267-million-barrel drawdown and the prior week’s 0.331-million-barrel drawdown).  In addition, Weekly Distillate (diesel and heating fuel) Stocks fell 0.356-million-barrels (versus a forecasted 0.927-million-barrel drawdown and the prior week’s reading of -0.606-million-barrels).  Finally, the Fed Beige books showed that economic activity in the US has changed very little in recent weeks and the prospects for future growth were mostly unchanged.  However, there were signs that inflation was cooling as lenders’ new loan volumes and loan demand fell and several banks tightened lending standards.  The report also noted “modest-to-sharp declines in the prices of nonlabor inputs and significantly lower freight costs in recent weeks.”

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In stock news, TOYOF (Toyota Motors) announced it will invest $338 million in a plant to manufacture hybrid compact cars in Brazil. GM and VLKAF (Volkswagen) both have recently announced similar investments in the same technology in Brazil.  In other auto news, VLVLY rolled out a new electric “coupe-shaped SUV” that has no rear window.  Meanwhile, META carried out another round of job cuts (as part of its previously announced 10,000 job cuts during 2023).  No specific number of layoffs was mentioned but this round seems focused on the software engineers and related teams.  In the late afternoon, GE announced that workers at its largest union (about 3,000 employees) have ratified a new two-year contract.  Eight other smaller GE employee unions also ratified contract extensions.  Elsewhere, SNAP rolled out a new AI-powered chatbot to all users (it had previously only been available to their premium subscribers) on Wednesday.

In stock legal and regulatory news, the NHTSA reported that STLA is recalling almost 132,000 2021 Model Ram 1500 pickups due to powertrain software issues. Meanwhile, AMGN won an appeal, which upholds patents that bar generic versions of its psoriasis drug Otezla (which had been proposed by NVS).  AMGN sold $2.2 billion of the drug in 2022.  At the same time, the US 5^th Circuit Court of Appeals said it will fast-track the review of ILMN’s challenge of the US FTC’s order to divest Grail LLC (which ILMN acquired and closed prior to regulatory approval).  It is worth noting that the EU also ordered ILMN to divest Grail back in December.  In Asia, Chinese government investigators concluded that the TSLA factory (where an employee died on February 4) had safety weaknesses and recommended an unspecified penalty.  Elsewhere, the US 9^th Circuit Court of Appeals ruled that AMZN must face a class action lawsuit claiming that the company illegally monitored a private Facebook group used by employees to discuss working conditions.  In the semiconductor sector, GFS sued IBM, claiming that IBM shared the proprietary intellectual property of GFS with INTC and a new Japanese-state-backed chip-building consortium named Rapidus.  After the close, TSLA announced it has settled its lawsuit against a former employee they accused of stealing trade secrets.  No details of the settlement were announced.  Finally, STX agreed to pay $300 million for violating sanctions and shipping Chinese phone maker Huawei $1.1 billion worth of hard drives between mid-2020 and mid-2021.

After the close, LRCX, CCI, EFX, LVS, LBRT, FFIV, WTFC, and FNB all beat on both the revenue and earnings lines.  Meanwhile, TSLA, IBM, STLD, and KMI all missed on the revenue line while beating on earnings.  On the other side, DFS and ZION both beat on revenue while missing on the earnings line.  Unfortunately, AA missed on both the top and bottom lines.  It is worth noting that FFIV also lowered its forward guidance. It is also worth noting that AA had a massive 360% surprise miss on earnings while LVS had a strong 65% upside surprise on earnings. Regional banks ZION, WTFC, and FNB all reported strong upside surprises in revenue (27%, 30%, and 26% respectively).

Overnight, Asian markets leaned heavily to the red side on modest moves, with only Japan (+0.18%), Hong Kong (+0.14%), and India (+0.03%) clinging to the green.  Meanwhile, Thailand (-0.99%), South Korea (-0.46%), and Taiwan (-0.40%) paced the losses in the rest of the region.  In Europe, we see red across the board at midday.  The DAX (-0.77%), CAC (-0.43%), and FTSE (-0.12%) are leading the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward another gap lower to start the day.  The DIA implies a -0.42% open, the SPY is implying a -0.66% open, and the QQQ implies a -0.91% open at this hour.  At the same time, 10-year bond yields are starting the day down at 3.566% and Oil (WTI) is off more than 1.5% to $77.90/barrel in early trading.

The major economic news events scheduled for Thursday include the Weekly Initial Jobless Claims and Philly Fed Mfg. Index (both at 8:30 am) and March Existing Home Sales (10 am).  We also get two Fed speakers (Waller at noon and Bowman at 3 pm).  The major earnings reports scheduled for the day include ALK, T, AN, BX, CMA, DHI, EWBC, FITB, GPC, HRI, HBAN, KEY, MAN, MMC, NOK, NUE, PM, POOL, RAD, SNA, SNV, TSM, TFC, UNP, WSO, and WBS before the open.  Then, after the close, CSX, KLNX, PPG, STX, VMI, and WRB report.  

In economic news later this week, on Friday, Mfg. PMI, S&P Global PMI, and Services PMI are reported.  On the earnings front later this week, on Friday, ALV, FCX, HCA, PG, RF, SDVKY, SAP, and SLB report.

So far this morning, DHI, GPC, KEY, SNA, CMA, HRI, SNV, MMC, HBAN, and HSQVY (Husqvarna) all reported beats on both the revenue and earnings lines.  Meanwhile, T, PM, BX, and TSM missed on revenue while beating on the earnings line. On the other side, AXP, RAD, NOK, TFC, and TCBI all beat on revenue while missing on earnings.  Unfortunately, ALK and POOL missed on both the top and bottom lines.  It is worth noting that DHI and GPC raised their forward guidance while TSM and POOL lowered forward guidance.  Among the notable surprises were a 158% upside surprise on revenue from PM, a 44% upside surprise on earnings by DHI, a 61% downside surprise by RAD, and most of the regional banks posting 30% – 60% upside revenue surprises.

In banking news, analytics company Attom Data reported Wednesday that the rate of US foreclosures rose 22% in Q1 (compared to Q1 2022), hitting a 3-year high.  It also reported that home repossessions also climbed 6% versus 2022.  However, we should note that much of the preceding three years was covered by a foreclosure moratorium and the number of foreclosures is still lower than they were prior to the pandemic.  They are also only a fraction of the record foreclosures in a quarter from back in 2009. 

In miscellaneous last-minute news, TSLA signaled more price cuts lay ahead even as it reported the margin damage from its recent spate of discounts.  Analysts argued on Bloomberg over whether this was aimed at killing off upstart rivals which have sprung up all over or is just trying to keep new plants from needing to idle.  Either way, the fact is that TSLA growth has dramatically slowed and discounts are one way to create more demand.  In other electric vehicle news, TM introduced new models and broadened its offerings to China (like most EV makers did at the Shanghai Auto Show with the glaring exception of “no show” TSLA at this year’s event).  Elsewhere, Swedish Home Goods company IKEA (not US listed) said it will invest $2.2 billion in the US over the next three years to update stores, build new order pickup centers, and expand its footprint in the US.  Finally, the most important chipmaker in the world, TSM, forecasts a weak market for chips for the rest of 2023.  However, the company is sticking with its $36 billion investment plan for 2023 to increase capacity.

With that background, it looks like the bears are again retesting the T-line (8ema) as support in all three major indices this morning. (The QQQ could even be gapping down through the T-line.) However, there is still some economic data before we get to the open. Regardless, the consolidation within a bullish trend remains in place and the moving averages remain stacked bullishly. Over-extension is obviously not a problem in terms of the T-line and the T2122 indicator is also not overbought at the moment (but close to that area at the top of the mid-range). We should also realize that the SPY, DIA, and QQQ all sit not far from potential support below or from potential resistance above. Once again, we have to put aside what we think/feel will should happen and just follow the chart. Right now, the chart tells us to maintain a long bias on a swing trading horizon while keeping an eye peeled, watching for trend breaks. So, be careful and continue go with the trend.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

On Tuesday, markets gave us a divergent day.  The DIA opened flat, sold off until 10:30 am, and then rallied back to flat by 12:20 pm when it then traded sideways in a tight range the rest of the day.  Meanwhile, the SPY gapped up 0.40%, sold off until 11:30 am, and rallied back to the prior close level before again trading sideways in a tight range the rest of the day.  For its part, the QQQ gapped up 0.65%, sold off hard to more than fill the gap by 10:30 am, and then traded sideways in a tight range along Monday’s close price all the way into a close.  This action gave us an indecisive Doji candle that retested the T-line (8ema) in the DIA.  Meanwhile, the SPY and QQQ both printed black-body candles with wicks.  QQQ tested and bounced up off its T-line while the SPY did not even get down to test its 8ema.

On the day, six of the 10 sectors were modestly in the green with Basic Materials (+0.38%) leading the way higher while Utilities (-0.70%) lagged behind other sectors.  At the same time, the SPY gained 0.07%, DIA lost 0.04%, and QQQ gained 0.01%.  VXX fell 0.66% to 39.24 and T2122 fell back but remains just inside the overbought territory to 81.82.  10-year bond yields fell a bit to close at 3.576% while Oil (WTI) was flat on the day at $80.85 per barrel.  So, Tuesday was a divergent, yet very indecisive day.  Despite black-bodied candles, the bullish trend remains with the 3ema > 8ema > 17ema > 50sma > 200sma…and the 3ema, 8ema, and 17ema are all rising across all three major indices.  However, this bullish trend continues to be on very low volume (far below average volume in the SPY, DIA, and QQQ).  

In economic news, March Building Permits (Prelim.) came in well below expectations at 1.413 million (compared to a forecast of 1.450 million and a February reading of 1.550 million).  On a month-on-month basis, this as a -8.8% rate versus an anticipated -6.0% rate forecasted and February’s massive +15.8% rate. Meanwhile, Mach Housing Starts came in slightly above expectation at 1.420 million (versus a forecast of 1.400 million and a February reading of 1.432 million).  Then, after the close, the API Weekly Crude Oil Stocks Report showed a very slightly greater than expected drawdown of 2.675- million-barrels (compared to a forecasted drawdown of 2.464-million-barrels and the prior week’s 0.377-million-barrel inventory build). 

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On the Fed talk front, in an interview Tuesday, St. Louis Fed Pres. Bullard (an extreme Hawk) said Wall Street should not be expecting a recession in the next six months.  He said, “The labor market just seems very, very strong…and a strong labor market that feeds into strong consumption…it doesn’t seem like the (right) moment to be predicting that you will have a recession in the second half of 2023.”  He also went on to say his St. Louis Fed stress index is at zero, and “If you were really going to get a major financial crisis out of this, that index would spike up to a four or five.”  From there, he went on to call for more Fed hikes, including a half percent hike at the early May meeting as well as walking back the idea of a pause in hikes.  Shortly after Bullard’s interview, Atlanta Fed President Bostic told CNBC he too foresees the economy avoiding a recession (as his baseline).  He said he’s in favor of one final increase and then holding rates at that level for “quite some time.”  (Bostic did not comment on the size of the last hike, but in the recent past he said he was leaning toward another quarter percent hike.) 

In stock news, Reuters reported Tuesday afternoon that GS is considering the sale of its GSKY fintech unit as it continues to step back from consumer-facing businesses. (GSKY software facilitates consumer home improvement loans.)   Elsewhere, RIDE said it has resumed production and deliveries of its electric pickup trucks “at a very low pace.”  (This comes after the company stopped production and deliveries in March as part of a voluntary recall due to potential propulsion system problems.)  At the same time, BA announced that despite the recently announced problems with supplier SPR (poor quality fuselages) and the stoppage of deliveries of 737 MAX planes, the firm is l comfortable with its buffer inventories and still plans to ramp up production of the jets.  (More details will be given during the Q1 earnings call 4/26.)  In other air-related news, LUV resumed its service after a software-related outage delayed more than 1800 of its flights on Tuesday.  Later in the afternoon, OPEN announced it is cutting roughly 22% (560 jobs) of its workforce, citing a decline in the housing market.  After the close, AAPL and GOOGL raised concerns about AMZN’s Kindle app saying that app could contain sexually explicit material accessible to children and threatening the removal of the popular app (from app stores) unless AMZN strengthens its content moderation (i.e. removes adult content).

In stock legal and regulatory news, on Tuesday, GOOGL convinced a US Court of Appeals to overturn a Texas jury verdict of $20 million (plus ongoing royalties) for having infringed on three anti-malware patents.  The ruling invalidated the plaintiffs’ patents.  Elsewhere, the US Supreme Court heard a case involving a US Postal worker and appears to be leaning toward making it harder for companies to not accommodate employees’ religious practices (such as not working on their Sabbath day).  This would overturn the precedent in place since 1977, which said companies can avoid accommodating employees if the requests caused more than a minimal inconvenience to the company.  Meanwhile, GM reached a settlement with the US Dept. of Justice related to the company’s discrimination against non-citizens.  The agreed fine was just $365,000.  At the same time, a US Senate Committee released a report claiming CS has hampered a multi-year investigation into Nazi clients and Nazi-linked accounts.  The report said, CS simply halted its internal review and fired the ombudsman overseeing the investigation of accounts that may contain assets of Holocaust victims.  Over at the Ninth Circuit Court of Appeals, judges ruled in favor of UL related to a long-running false advertising claim.  The ruling said that “I Can’t Believe It’s Not Butter” spray and similar products should be allowed to use artificially low serving sizes (less than one spray) related to calories and other nutritional facts on their advertising and labeling.  Finally, FOX was able to limit the damage of the Dominion case by admitting it lied about Dominion facilitating any fraud and the media company got off relatively cheaply (given their obvious guilt) by agreeing to pay $787.5 million in damages. At least one other defamation case is still pending against FOX and several groups (January 6th defendants as well as the Officers who were on the other side) are considering filing liability cases based on the now proven and admitted lies and misrepresentations of facts by the supposed news outlet. So, a hurdle was cleared, but FOX may not be out of the woods yet.

In banking news, Reuters reported that despite BAC, JPM, WFC, and C all beating their analyst estimates this quarter, including windfalls from increasing rates, industry leaders are lowering future expectations.  (Combined, the four banks wrote off $3.4 billion in bad consumer loans in Q1, a 73% increase from Q1 2022.) Unnamed industry executives are warning profits will tail off as a recession looms and customer defaults climb.  Industry analysts that Reuters quoted said “normal” card loan delinquencies run 3%-3.5%. However, they now expect branded card delinquencies may reach 5%-5.5% by early 2024.  At the same time, the same article cited an AXP filing on Tuesday which said February card loan write-offs grew slightly from 1.4% to only 1.7%.  The filling also said AXP “past due loan” volumes remained stable between February and March.  In related news, WAL reported a beat (see above) and said that its deposits had stabilized after being the focus of a potential second leg of the “regional banking crisis.”  WAL deposits fell 11.3% in Q1, but have grown more than $2 billion between March 31 and April 14.  The bank also reaffirmed its full-year deposit growth forecast of +13% to +17%.

After the close, OMC, ISRG, FHN, and WAL all reported beats to both the revenue and earning lines.  Meanwhile, NFLX and UAL both missed on revenue while beating on earnings.  On the other side, IBKR beat (by a significant margin) on revenue while missing on earnings.  It is also worth noting that NFLX lowered its forward guidance.

Overnight, Asian markets were again mixed but leaned toward the red side.  Singapore (+0.44%) led the four exchanges that managed to stay green.  Meanwhile, Hong Kong (-1.37%), Shenzhen (-0.84%), and Thailand (-0.82%) paced the losses among the eight exchanges that were in the red.  In Europe, we see a similar picture taking shape as of midday with only three bourses clinging to green while 12 show red.  However, it is worth noting that these are mostly on modest moves as the CAC (-0.03%), DAX (-0.20%), and FTSE (-0.25%) lead the region lower in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to a down start to the day.  The DIA implies a -0.28% open, the SPY is implying a -0.45% open, and the QQQ implies a -0.69% open at this hour. At the same time, 10-year bond yields are spiking, now up to 3.621% and Oil (WTI) is down nearly 2% to $79.26/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to EIA Crude Oil Inventories (10:30 am) and Fed Beige Book (2 pm).  We also get another Fed speaker, Williams at 7 pm.  The major earnings reports scheduled for the day include ABT, ALLY, ASML, BKR, CFG, ELV, LAD, MS, NDAQ, EDU, SYF, TRV, and USB before the open. Then, after the close, AA, CCI, FDS, EFX, FFIV, IBM, KMI, LRCX, LVS, LBRT, STLD, TSLA, WTFC, and ZION report. 

In economic news later this week, on Thursday, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and March Existing Home Sales are reported and we get two Fed speakers (Waller and Bowman).  Finally, on Friday, Mfg. PMI, S&P Global PMI, and Services PMI are reported.

In terms of earnings reports later this week, on Thursday, ALK, T, AN, BX, CMA, DHI, EWBC, FITB, GPC, HRI, HBAN, KEY, MAN, MMC, NOK, NUE, PM, POOL, RAD, SNA, SNV, TSM, TFC, UNP, WSO, and WBS report.  Finally, on Friday, ALV, FCX, HCA, PG, RF, SDVKY, SAP, and SLB report.

So far this morning, MS, ABT, TRV, USB, ASML, BKR, NDAQ, EDU, and ELV all reported beats on both the revenue and earnings lines.  Meanwhile, SYF, ALLY, and CFG all beat on the revenue line while missing on earnings.  Unfortunately, LAD missed on both the top and bottom lines.  It is worth noting that ASML and EDU both raised forward guidance.  However, CFG lowered its guidance.  It is also worth noting that some of the revenue beats included large upside surprises, especially among the financial names.  MS surprised on revenue by 60%, CFG by 34%, USB by 32%, NDAQ by 69%, and SYF by 19%.

In miscellaneous last-minute news, TSLA cut prices yet again overnight.  This time on Model 3 and Model Y vehicles.  Elsewhere, the rate for a 30-year fixed-rate conforming loan increased sharply last week from 6.30% to 6.43%.  The origination points charged also increased from 0.55 to 0.63.  This caused a 10% fall in new home purchase loan applications and a 6% decrease in mortgage refinancing applications.

With that background, it looks like the bears are taking all three major indices back down to retest their T-lines (8ema) as support this morning. However, the bullish trend remains in place with the moving averages stacked. Over-extension is obviously not a problem in terms of the T-line for any of the major indices. Meanwhile, the T2122 indicator is just barely in the overbought area as well. We should also realize we are either sitting on or are near above potential support in the SPY, DIA, and QQQ. So, it looks like it could be a bearish start to a day in a bullish trend. Once again, if we can put aside fear and prediction, the chart tells us to maintain a long bias on a swing trading horizon while keeping a sharp eye out for trend breaks. So, be careful and go with the flow.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened flat and ground sideways for the first hour in all three major indices.  The bears then stepped in to drive a modest selloff that lasted until 12:30 pm.  At that point, again all three major indices ground sideways along the lows. However, at about 2 pm, markets began a rally (slightly stronger than the morning selloff) which continued all the way into the close.  This action gave us white-bodied candles with lower wicks and also inside day candles.  You might even say the QQQ printed a Hammer that also retested its T-line.  So, all three major indices remain in a bullish average stack (3ema > 8ema > 17ema > 50sma > 200sma). 

On the day, nine of the 10 sectors were in the green with Financial Services (+0.77%) leading the way higher while Energy (-0.83%) lagged behind the other sectors.  At the same time, the SPY gained 0.36%, DIA gained 0.32%, and QQQ gained 0.08%.  VXX fell 2.73% to 39.50 and T2122 climbed back into the overbought territory to 90.22.  10-year bond yields continued to shoot higher to close at 3.602% while Oil (WTI) lost 1.85% to $80.99 per barrel.  So, Monday was sort of a meandering day that saw price drift lower in the morning and higher in the afternoon but all within a fairly tight range (inside Friday’s candles in all three major indices).   

In economic news, on Monday NY Fed’s Empire State Manufacturing Index came in far above expectation at 10.80.  This is compared to a forecast of -18.00 and the March reading of -24.60.  The 10.80 was the strongest reading since July of 2022. Meanwhile, in political news, US House Speaker McCarthy traveled to Wall Street Monday to pitch the same idea that he has proposed for months.  Namely, the GOP will pass a one-year debt ceiling increase (paying debts already incurred, money already spent), in exchange for Democrats and the President agreeing to cut spending back to 2022 levels, reversing some of President Biden’s policies, and then only increasing spending a maximum of 1% per year going forward.  The proposal continues to be a non-starter for Democrats and would also require significant cuts to everything else in the budget unless McCarthy’s fellow Republican, Senate Minority Leader McConnell, gives up his (and others) proposed Defense spending increases (which added $118 billion to President Biden’s last Defense budget request of $740 billion).  So, the US default versus Debt Ceiling increase (and whatever else rides along with that passage) debate is not likely to get serious until May when pressure builds. This will give financial news more fodder to discuss the implications of a US default on its debt.

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In stock news, LLY announced it will invest $1.6 billion in two Indiana manufacturing plants in order to support the production of its recently approved cancer drug Jaypirca.  At the same time, TSLA got bad public relations buzz after the company cut the bonuses of 20,000 employees at its Shanghai factory over the weekend.  As a result, employees took to social media to ask the Chinese people to rally behind them and to ask TSLA CEO Elon Musk to override the decision.  (These are the same workers he praised in tweets last year for “burning the 3 am oil” to keep operations running during the city’s COVID-19 lockdown.)  In other auto-industry news, RNLSY (Renault) announced it is reviewing prices worldwide for its electric vehicles after the latest round of price cuts by TSLA. Elsewhere, PCRFY (Panasonic), which supplies batteries to TSLA, said Sunday that it is considering building a battery plant in Oklahoma after the state passed laws to allow the Governor to offer the company more incentives to do so.  Meanwhile, MRK announced a deal to acquire RXDX for $200/share.  After the close, it was reported Samsung (SSNLF) is considering replacing GOOGL’s Google with MSFT’s Bing as the default search engine for its phones and tablets. This would be a significant hit to GOOGL’s search ad business.

In stock legal and regulatory news, ILMN settled a patent infringement suit (related to genetic testing patents) brought against it by Ravgen Inc.  The settlement details were not disclosed.  Elsewhere, the $1.6 billion defamation lawsuit brought against FOX for allegedly defaming Dominion Voting Systems was delayed one day.  It is widely believed this delay was to allow FOX to seek settlement terms from Dominion (which has already been granted summary judgment on the facts that FOX knowingly and purposefully published lies about Dominion and that those lies caused Dominion harm).  In related news, Reuters reported after the close that a group of FOX investors has now demanded company files and part of the Dominion case discovery as they consider filing suit against FOX directors and executives for the damage they have suffered as a result of the company’s false narrative and fraudulent reporting (and presumably any settlement or judgments) have or will have on their stock value.  Meanwhile, the US Treasury Department announced Monday that VLKAF (Volkswagen), BMWYY (BMW), NSANY (Nissan), RIVN, HYMTF (Hyundai) and VLVLY (Volvo) electric vehicles would lose access to a $7.500 tax credit.  TSLA Model 3 vehicles will see their eligibility cut to $3,750 while other TSLA models retain the full $7.500 credit.  Most F and STLA electric vehicles will also see their tax credit cut to $3,750.  GM Bolt, Bolt EUV, Cadillac Lyriq, Chevy Equinox EV and Blazer EV will all still qualify for the $7.500 tax credit.  Over at the US Supreme Court, justices declined to hear a GM appeal seeking to revive a racketeering lawsuit against STLA (or more precisely its Fiat division).  In other Supreme Court news, the justices did hear an appeal by WORK (owned by CRM now) seeking to have a shareholder lawsuit dismissed.  The case accuses WORK of misleading statements prior to the “self-listing” when WORK was offered.  At the same time, the SEC filed charges against another cryptocurrency exchange (Bittrex) for operating an unregistered securities exchange.  After hours, nine more US states joined the US Dept. of Justice lawsuit against GOOGL that alleges the company broke antitrust law with its digital advertising business (by abusing its dominance).

In banking news, Bloomberg reported that WFC execs are privately concerned that efforts to unionize its bank employees will soon result in union victories.  However, the executives say they have plans to spend millions of dollars to address employee “pain points” and defeat organizing efforts.  Elsewhere, a report showed that the average regional bank has reported only a 3% reduction in deposits since before the “banking crisis” began.  However, there are exceptions, such as SCHW which saw an 11% reduction in deposits.  Meanwhile, AAPL has announced a high-yield 4.15% savings account (via partner GS) for users of its Apple Card as it seeks to draw users away from traditional banks.

Overnight, Asian markets leaned heavily to the red side.  Only Japan (+0.51%), Shanghai (+0.23%), and Shenzhen (+0.04%) managed any green.  Meanwhile, Hong Kong (-0.63%), Taiwan (-0.59%), and New Zealand (-0.44%) led the rest of the region lower.  In Europe, the mirror image of Asia is taking shape at midday.  Only Russia (-0.21%) and Spain (-0.24%) are in the red.  Meanwhile, the CAC (+0.67%), DAX (+0.64%), and FTSE (+0.21%) lead the rest of the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a green start to the day.  The DIA implies a +0.39% open, the SPY is implying a +0.41% open, and the QQQ implies a +0.63% open at this hour.  At the same time, 10-year bond yields are back down to 3.577% and Oil (WTI) is off 0.20% to $80.69/barrel.

The major economic news events scheduled for Tuesday are limited to March Building Permits and March Housing Starts (both at 8:30 am) and API Weekly Crude Oil Stock Report (4:30 pm) and Fed member Bowman speaks at 1 pm.  The major earnings reports scheduled for the day include BAC, BK, ERIC, GS, JNJ, LMT, and PLD before the open. Then, after the close, FHN, IBKR, ISRG, NFLX, OMC, UAL, and WAL report. 

In economic news later this week, on Wednesday, EIA Crude Oil Inventories and Fed Beige Books are reported and Fed member Williams speaks.  On Thursday, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and March Existing Home Sales are reported and we get two Fed speakers (Waller and Bowman).  Finally, on Friday, Mfg. PMI, S&P Global PMI, and Services PMI are reported.

In terms of earnings reports later this week, on Wednesday we hear from ABT, ALLY, ASML, BKR, CFG, ELV, LAD, MS, NDAQ, EDU, SYF, TRV, USB, AA, CCI, FDS, EFX, FFIV, IBM, KMI, LRCX, LVS, LBRT, STLD, TSLA, WTFC, and ZION.  On Thursday, ALK, T, AN, BX, CMA, DHI, EWBC, FITB, GPC, HRI, HBAN, KEY, MAN, MMC, NOK, NUE, PM, POOL, RAD, SNA, SNV, TSM, TFC, UNP, WSO, and WBS report.  Finally, on Friday, ALV, FCX, HCA, PG, RF, SDVKY, SAP, and SLB report.

After the close, JBHT reported misses on both the revenue and earnings lines.  So far this morning, BAC, JNJ, LMT, ERIC, BK, and CBSH all beat on both the revenue and earnings lines.  Meanwhile, GS missed on revenue while beating on earnings.  A couple of notes of interest, BAC’s revenue was a 58% larger beat than analysts expected and BK’s revenue was also a 63% upside surprise.  At the same time, ERIC’s earnings beat was double the analyst-expected number.  It is also worth noting that JNJ has raised its forward guidance.

One last miscellaneous story of note. Bloomberg reports this morning that investors are the most underweight stocks (versus bonds) that they have been since early 2009. This may mean nothing significant for short-term traders. However, for longer-term traders and investors, it means there is a ton of money sitting on the sideline earning almost nothing. That flood of cash back into the market as FOMO kicked in is what led to the massive rally that began in 2009 and continued essentially unbroken until the pandemic in 2020 (or if we throw out that one-off event until the top in 2022). It is just something to keep in mind moving forward.

With that background, it looks like the bulls are trying to break out of the recent range (going back to the start of the month in the case of QQQ) this morning. The bullish trend continues with the moving averages stacked. Over-extension does not appear to be a problem in terms of the T-line (8ema) for any of the major indices. Yet a case can be made that we are getting extended to the upside according to the T2122 indicator. We should also realize we are up against a potential resistance line in the SPY and not too far below on in the DIA. QQQ might be called at “resistance” but it is definitely a weaker or less obvious level. Once again, if we can put aside fear and prediction, the chart is telling us to maintain a long bias on a swing trading horizon while keeping a sharp eye out for trend breaks. So, be careful and go with the flow.

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

Again, on Thursday, markets gapped higher after PPI came in lower than expected.  The SPY gapped up 0.27%, DIA gapped up 0.13%, and QQQ gapped up 0.63%.  We then saw 30 minutes of figuring out the direction in all three major indices.  This led to a long, slow, steady rally that ran all day in the large-cap indices as well as a sharper 20-minute rally before the long, slow steady follow-through rally in the QQQ. These rallies lasted until 3 pm when a sideways grind in a very tight range took hold in all three major indices.  This action gave us large-bodied, white candles in the SPY, DIA, and QQQ.  The two large-cap indices broke out of their recent pullback while the QQQ broke above its consolidation range dating back to 4/5 but did not break out of the pullback that began at the start of the month.

On the day, all 10 sectors were in the green with Healthcare (+1.75%) leading the way higher while Utilities (+0.20%) lagged behind the others.  At the same time, the SPY gained 1.33%, DIA gained 1.12%, and QQQ gained 1.96%.  VXX fell 3.64% to 41.34 and T2122 climbed back well into the overbought territory at 93.45.  10-year bond yields rose to close at 3.449% while Oil (WTI) was down 1.02% to $82.39 per barrel.  So, markets liked the PPI data falling more than expected and didn’t give the bears an inch all day long Thursday.  It was a risk-on day with the tech big dogs (AMZN, NFLX, AAPL, TSLA, and META) taking markets higher.  This happened on just less-than-average volume in SPY and QQQ with the mega-cap DIA trading a bit less than the other two indices (relative to average).    

In economic news, the March Producer Price Index surprisingly came in well below expectations at -0.5% month-on-month (compared to a forecast of +0.1% and also well below the Feb. reading of +0.0%).  More importantly, the March year-on-year PPI value came in at 2.7%, below the forecast of +3.0% and far below the February value of 4.9%.  At the same time, Weekly Initial Jobless Claims were above the anticipated at 239k (versus a forecast of 232k and well above the prior week’s reading of 228k).  Later in the day, Fed data was released showing that of the week ending April 12, bank borrowing from the Fed Discount window fell again to $67.6 billion/day (average) from $69.7 billion/day the prior week.  At the same time, the total banks borrowed from the new Fed Bank Term Funding Program also fell to $71.8 billion (total for the week) from $79.02 billion in the prior week.  This data points to the liquidity problems and turmoil in the banking sector easing, albeit in a modest way. 

SNAP Case Study | Actual Trade

In stock news, AMZN joined the AI race on Thursday, announcing its Cloud Computing division has released a suite of tools aimed at helping other companies develop their own chatbots and image-generation services powered by artificial intelligence.  These services will be powered by AMZN chips as well as AI chips from NVDA.  Midday, it was reported by Reuters that XOM raised its CEO pay by 52% in 2022.  This came as the pay (median) for XOM workers actually fell by 9%.  For reference, the pay of competitors, such as the CEO of CVX rose 4%, the pay of OXY’s CEO rose 35%, and the CEO of COP saw his pay fall 16% (all versus the prior year).  Meanwhile, LCID announced the start of a nationwide tour aiming to allow consumers in 40 US cities to get a chance to experience and drive the company’s Air luxury electric vehicle at “pop-up studio locations” in the cities.  Separately, LCID announced they produced 2,314 and delivered 1,406 vehicles in Q1 (ending March 31).  Elsewhere, S&P reported after the close that hedge funds thought the recent “banking crisis” was a buying opportunity.  The report said hedge funds increased their regional bank stock exposure by 5.5%.  As an example, Citadel (one of the most profitable hedge funds) bought a 5.3% stake in WAL while it was being battered.  After the close, Reuters reported that BBVA, BAC, and SAN will jointly fund a $6 billion deal allowing Mexico to purchase power plants from IBDRY.  Finally, BA announced after the close that it has stopped deliveries of 737 MAX planes as new quality problems (possibly stretching back to 2019) were identified with parts from their supplier SPR.

In stock legal and regulatory news, across the pond, the Swiss parliament rejected the Swiss government’s $121 In stock legal and regulatory news, mid-afternoon Thursday, GOOGL’s attorneys were grilled by a US District Court judge as the company sought to get a US Dept. of Justice antitrust case thrown out.  The suit alleges that GOOGL illegally paid billions of dollars each year to AAPL, MSI, VZ, LG, Samsung and others to keep Google as the default search engine on their phones.  Interestingly, the main alleged victim in the lawsuit is MSFT, who the Dept. of Justice successfully sued for antitrust violations in 1998.  At the same time, STLA told Bloomberg it is leaning toward expanding production of a Peugeot electric vehicle in Spain. This has caused France to directly pressure the CEO of STLA and Slovakia (where the vehicle is now produced) is formulating a strategy to keep or add jobs. Meanwhile, KR asked a US federal judge to dismiss an antitrust case that had been filed by consumers, in hopes of blocking the acquisition of ACI.  Across the pond, the EU said that Ireland has one month to create an order blocking META from doing transatlantic data flows.  This would be the finalization of a ban on META from sharing and using European user data.  Elsewhere, the US Dept. of Justice said ADBE has agreed to pay $3 million to settle allegations the company paid kickbacks to companies that convinced the federal agencies to buy ADBE software.

In miscellaneous news, the downward spiral of Natural Gas prices continued as the front-month Natty contract closed at $1.997/mmBtu on Thursday.  This was the lowest close since June 2020 (amidst national lockdowns).  Prior to that, this low level had not been seen since January 2016.  Thursday’s move came as the EIA announced its natural gas storage data for the week.  This week saw the first inventory build of the year for Nat Gas, but it was a smaller increase than expected at +25bcf (compared to a forecast of +28bcf). In other news, the Supreme Court has decided not to halt a legal settlement that erases $6 billion in debt that was owed by former students of (mainly for-profit) colleges who had been misled about school academics and job prospects.  Meanwhile, a group representing Southern CA seaports (the Pacific Maritime Assn.) claimed Thursday that the largest union of longshoremen on the West Coast is disrupting the busiest seaport in the US for the second week in a row.  This slowdown comes as negotiations over a new contract covering 22,000 West Coast dockworkers near the one-year milestone (with no major progress apparent).  Major shippers like WMT and HD have been diverting cargo ships to ports on the Gulf of Mexico and East Coast to avoid potential work stoppages.

Overnight, Asian markets leaned heavily to the green side. Only New Zealand (-0.42%) and Thailand (-0.28%) were in the red.  Meanwhile, Japan (+1.20%), Taiwan (+0.79%), and Shanghai (+0.60%) led the region higher.  In Europe, we see a similar picture taking shape at midday.  The CAC (+0.43%), DAX (+0.39%), and FTSE (+0.59%) are leading that region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a mixed open ahead of news.  The DIA implies a +0.07% open, the SPY is implying a -0.06% open, and the QQQ implies a -0.44% open at this hour.  At the same time, 10-year bond yields are rising to 3.467% and Oil (WTI) is up half of a percent to $82.57/barrel in early trading.

The major economic news events scheduled for Friday include March Retail Sales and March Import/Export Price Indexes (both at 8:30 am), March Industrial Production (9:15 am), Feb. Business Inventories, Michigan Consumer Sentiment, and Feb. Retail Inventories (all at 10 am).  We also have a Fed Speaker (Waller at 8:45 am).  The major earnings reports scheduled for the day include BLK, C, JPM, PNC, UNH, and WFC before the open.  There are no major earnings reports scheduled for after the close.

So far this morning, UNH, JPM, WFC, PNC, and BLK all reported beats to both the revenue and earnings lines.  (It is worth noting that on the revenue line, JPM surprised by 52% while PNC surprised by 37%, and WFC surprised by 33%.)  C reports at 8 am.  So far, only PNC has changed forward guidance, lowering its outlook.

With that background, at least at this point, it looks like the market’s “wait and see” stance remains intact. The QQQ is making the biggest premarket move…and it is only showing an inside candle move that has yet to go back down to retest the T-line (8ema). I suppose traders could be hanging tight until they see Retail Inventories or even Industrial Production. Still, that seems less important than the big banks starting us off with good reports this morning with record revenues, big deposit increases, and the benefit of higher rates (rate margins) as a tailwind. With that said, all three major indices remain in their bullish trends. The 3ema is still above the 8ema, which is above a rising 17ema, which is above the 50sma and that is above the 200sma for all of them. Over-extension does not appear to be a problem either in terms of the T-line but the T2122 indicator is back in the overbought area. This is what the chart tells us now. So, again, putting aside fear and prediction, the chart is telling us to maintain a long bias on a swing trading horizon while keeping a sharp eye out for trend breaks. However, also remember that it’s Friday. So, don’t forget to pay yourself and prepare for the weekend news cycle when you cannot react to changes until Monday.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped higher on Wednesday after good CPI data.  SPY gapped up 0.52%, the DIA gapped up 0.50%, and the QQQ gapped up 0.64%.  However, again we saw divergence at that point with the large-cap indices meandering sideways for an hour before selling off for 45 minutes, recrossing the gap in the process.  Meanwhile, QQQ had faded the gap-up within 20 minutes of the open and then kept heading lower until 11:15 am.  At that point, all three major indices put in a long, slow rally that lasted until just after 2 pm.  Then, the selloff was on with the bears driving prices lower the rest of the day.  This action gave us large-body, black candles in all three major indices.  This included an Evening Star signal in the SPY, a Dark Cloud Cover in the DIA, and a big, black, outside day candle in the QQQ.  QQQ also crossed back below its T-line while the other two major indices held above their own 8ema.

On the day, seven of the 10 sectors were in the red with Consumer Cyclical (-1.77%) leading the way lower while Industrials (+0.32%) held up best.  At the same time, the SPY lost 0.39%, DIA lost 0.09%, and QQQ lost 0.88%.  VXX gained 0.61% to 42.90 and T2122 fell back out of the overbought territory to 72.44.  10-year bond yields fell to close at 3.402% while Oil (WTI) was up 2.11% to $83.24 per barrel.  So, markets liked the CPI data falling more than expected, following the Fed’s preferred path.  However, as soon we got the three-week-old Fed takes from the day following the SBNY bank, the bears roared as (at that time) Fed members said they expected the banking crisis to push the economy into recession sometime this year.  This happened on less-than-average volume in the large-cap indices and slightly above-average volume in QQQ.     

In economic news, the March Consumer Price Index came in below expectations at 5.0% year-on-year (versus a forecast of 5.2% and the February reading of 6.0%).  This was the ninth consecutive monthly decline.  Later in the morning, the EIA Crude Oil Inventories came in above expectation with a build of 0.597-million-barrels (compared to a forecasted drawdown of 0.583-million-barrels and far higher than the prior week’s 3.739-million-barrel drawdown).  Then at 2 pm, the March Federal Budget Balance was larger than anticipated at -$378.0 billion (versus a forecast of -$302.0 billion and significantly worse than the February reading of -$262.0 billion).  At the same time, the FOMC Minutes basically followed Fed Chair Powell’s remarks from the March 22 press conference.  There was a broad consensus to raise rates by a quarter percent at that point.  However, the terminal level of the Fed Funds Rate was also tamped down by the banking crisis going on then.  Four of the regional Fed Presidents did not want any hike.  The other big news was that Fed Staff (not the voters) put forth that their base case was then expecting a “mild recession later this year” given their assessment of the impact of the banking turmoil on available credit.  Elsewhere, San Fran Fed President Daly told an audience Wednesday that more rate hikes may not be needed to tame inflation, saying “there are good reasons to think that policy may have to tighten more to bring inflation down.” 

SNAP Case Study | Actual Trade

In stock news, a day prior to competitor DAL’s earnings report, AAL announced it is forecasting profits below market expectations.  AAL specifically cited high labor and fuel costs.  In other transport news, GOOGL got some bad press when some of their Waymo self-driving vehicles pulled over due to heavy fog in San Francisco Tuesday night, causing traffic problems during rush hour.  Meanwhile, WBD announced it is combining HBO Max and Discovery+ content to create a new streaming service called “Max” as the company attempts to compete with DIS, NFLX, AMZN, and PARA.  At the same time, the world’s largest luxury brand (LVMH, not US-listed) reported a 17% rise in sales in Q1 and specifically notes a strong rebound in the Chinese market.  In the electric market, an industry insider reported Wednesday that TSLA is about to launch a third generation of its home battery pack, named Powerwall 3.  (No pricing or specs were yet available since the equipment has not yet been approved for connection to the electric grid.)  Elsewhere, EMR agreed to buy NATI for $8.2 billion ($60/share).  Elsewhere, the Teamsters union told UPS it won’t begin national contract negotiations as (previously scheduled to start next week) until after regional supplemental contracts are completed.  30 supplemental contracts remain unsettled and the national contract expires July 31.

In stock legal and regulatory news, across the pond, the Swiss parliament rejected the Swiss government’s $121 billion aid package that had been part of UBS’s buyout of failing CS.  (That government commitment cannot be overturned, but the vote signals that the large house of parliament is not happy with the deal.)  Meanwhile, the US Dept. of Labor (in cooperation with other federal agencies) sent a letter to meat companies TSN, JBSAY, and 16 other meat companies Wednesday, ordering those companies to inspect their supply chains in order to root out illegal child labor.  The letter said the Dept. of Agriculture is exploring enforcement mechanisms and will take action in the near future.  At the same time, US Senator Wyden called for an investigation by Congress and the Administration following a Reuters report that Russia is using facial recognition technology based on chips from NVDA and/or INTC to identify and detain political dissenters. Russian customer records showed that NVDA products continued to arrive in Russia at least through Oct. 31, 2022.  (NVDA responded by saying that if it finds a customer who violated US Export Laws, it will cease doing business with that customer.)  Elsewhere, a Del. Superior Court Judge imposed sanctions on FOX for withholding evidence in the $1.6 billion defamation case brought against it by Dominion Voting Systems.  No fine dollar amount was mentioned, but the cost of added legal work by Dominion following newly the disclosed information will be borne by FOX.  In banking news, head of the National Economic Council (and former Fed Vice-chair) Brainard told reporters Wednesday the banking crisis now has eased in terms of deposit outflows. However, she also called for stronger stress testing (liquidity) requirements that include regional banks.  Finally, CO became the first state to pass “right to repair” legislation for farmers on Wednesday.  The bill will force farm machinery makers like DE and CNHI to provide manuals, diagnostic equipment, and parts to farmers who want to repair (or have local mechanics repair) their farm machinery.  Other states are now expected to follow suit and similar legislation may impact other consumer electronics (like phones, tablets, Mac computers, etc.).

In miscellaneous news, Wednesday evening, CNBC reported that a Univ. of Florida finance professor (Lopez-Lira) told them that he used Chat-GPT to predict the next day’s market directions (based on analyzing all news headlines).  Reportedly, the results were “much better than random chance.”  The professor’s paper has not yet been peer-reviewed.  However, Lopez-Lira said his research suggests AI could be trained to predict stock movements.  (For what it is worth, this research was done using the older ChatGPT 3.5 model.  The professor found less than a 1% chance the model could have achieved the results it attained by mere chance.)  Elsewhere, Bloomberg announced overnight that it will integrate a “ChatGPT-style” AI into its Bloomberg Trading Terminal.  No timeline was mentioned.

Overnight, Asian markets were mixed in very uneven trading.  Shenzhen (-1.21%) and Taiwan (-0.80%) were by far the largest losers.  Meanwhile, South Korea (+0.43%) was the biggest gainer.  Still, the green exchanges outnumbered the red exchanges in the region.  Over in Europe, we see a similarly mixed picture taking shape, but most of the bourses lean toward the green side at midday.  The CAC (+0.93%), DAX (-0.08%), and FTSE (+0.01%) lead on volume as usual in early afternoon trading.  In the US, as of 7 am, Futures are pointing toward a flat to green start to the morning (ahead of PPI data).  The DIA implies a +0.01% open, the SPY is implying a +0.10% open, and the QQQ implies a +0.24% open at this hour.  At the same time, 10-year bond yields are back up to 3.424% and Oil (WTI) is down half a percent to $82.86/barrel. 

The major economic news events scheduled for Thursday are limited to March PPI and Weekly Initial Jobless Claims (both at 8:30 am).  The major earnings reports scheduled for Thursday include DAL, FAST, INFY, and PGR before the open.  There are no major earnings reports scheduled for after the close.

In economic news later this week, on Friday, March Retail Sales, March Import/Export Price Indexes, March Industrial Production, Feb. Business Inventories, Michigan Consumer Sentiment, and Feb. Retail Inventories are reported.

In terms of earnings reports later this week, on Friday, BLK, C, JPM, PNC, UNH, and WFC report.

So far this morning, FAST beat on both the revenue and earnings lines.  Meanwhile, DAL beat on revenue while missing on earnings.  Unfortunately, INFY missed on both the top and bottom lines.  (PGR is scheduled to report at 8:15 am.)

With that background, at least before the PPI data release, traders seem to be continuing their “wait and see” stance. All three major indices are starting to form tiny Bull Harami-type inside candles, staying within the recent consolidation range. Little has changed in the large-cap indices. The 3ema is still above the 8ema, which is above a rising 17ema, which is above the 50sma and that is above the 200sma. The QQQ has nearly the same bullish moving average stack. However, the QQQ 3ema has fallen below the T-line, perhaps giving an indication that the bullish trend has cracks. We also have to recognize that all three major indices are sitting on a potential support level. Over-extension does not appear to be a problem either in terms of the T-line or T2122 indicator. So, the consolidation continues, but the bullish trend has not yet broken. New data or news could change that picture in a heartbeat. However, this is what the chart tells us now. So, again, putting aside fear and prediction, the chart is telling us to maintain a long bias on a swing trading horizon while keeping a sharp eye out for trend breaks.

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 Tuesday, markets opened flat in all three major indices.  At that point, we saw a divergence with the SPY meandering slightly lower until 10:45 am and then starting a long, slow, and modest rally.  At the same time, the DIA just started a long, slow, modest rally after the open.  Meanwhile, QQQ sold off until 11 am and bobbed around until noon when it also started a slow, steady rally.  However, a selloff in the last 30 minutes gave back most of the day’s gains. This action gave us small-body, indecisive candles in both the SPY and DIA, as well as a Bearish Harami candle in the QQQ.  Again, this all happened on very low volumes in all the major indices.

On the day, nine of the 10 sectors were in the green with Basic Materials (+1.70%) leading the way higher while Technology (-0.30%) lagged and was the only sector in the red.  At the same time, the SPY gained 0.03%, DIA gained 0.28%, and QQQ lost 0.64%. VXX fell almost 1% again to 42.64 and T2122 climbed into the extreme end of the overbought territory at 96.46.  10-year bond yields climbed to close at 3.43%. Meanwhile, Oil (WTI) was up 2.19% to $81.49 per barrel.  So, on Tuesday we divergence as Technology languished while the rest of the market slowly rallied, only to give back most of the progress during the last half hour of the day.      

In economic news, on Tuesday, NY Fed President Williams (FOMC voter) toed the company line by saying that future the interest rate path will be data-dependent.  However, he also said that one more hike in May and then a pause is a “reasonable starting point.”  He went on to say that as of now, “the banking system has really stabilized” and that, while the Fed will watch for negative shocks, “right now we’re not seeing any of those effects.”  In a separate event, the NY Fed released a report predicting the Fed’s path for shrinking its balance sheet will take several more years.  (And I guess the Fed ought to know what the Fed’s going to do better than anybody.) The report forecasts that the Fed balance sheet will only have shrunk from $8.7 trillion to about $6 trillion by the summer of 2025 and will then hold steady for about a year.  Elsewhere, Chicago Fed President Goolsbee (FOMC voter) urged “prudence and patience” (caution) by his fellow FOMC members so that the Fed doesn’t raise rates too aggressively.  After the close, the API Weekly Crude Stocks Report showed an unexpected inventory build of 0.377 million barrels (compared to a forecasted drawdown of 1.300 million barrels and far different than the prior week’s 4.346-million-barrel drawdown).

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In stock news, BABA demonstrated its generative AI model named Tongyi Qianwen (which means “truth from a thousand questions”) Tuesday and promised the company will integrate the model into all of the company’s apps soon.  This public demo came just hours before the Chinese government published draft rules covering the way that generative AI services should be managed.  Meanwhile, F said it will invest $1.3 billion to retool a Canadian plant to transform the SUV assembly plant into one that produced multiple models of electric vehicle as well as battery packs.  Completion of the plant conversion is scheduled for late 2024.  In other EV news, HMC announced Tuesday that its goal is to become one to the world’s top three EV manufacturers by 2030.  To get there, the company will invest $18 billion and expects to produce more than 3.64 million electric vehicles per year by the end of the decade.  Elsewhere, Reuters reported that multiple sources tell it ERJ will sign a deal to sell 20 jets to a Chinese airline during this week’s trip to China by Brazilian President Lula da Silva.  At the same time, GLNCY revised its unsolicited bid for TECK, adding a cash component.  TECK management responded that the offer was largely unchanged and rejected it as still decreasing the value to TECK shareholders.

In stock legal and regulatory news, the US Dept. of Energy proposed reducing the credit (rating) automakers get for electric vehicles towards meeting government fuel economy requirements (CAFÉ or Corporate Avg. Fuel Economy).  For example, under the new rules, an F-150ev which currently is credited at 237.1 mpg would only be rated at 67.1 mpg.  This would mean F would need to sell a much higher percentage of hybrid and electric vehicles to maintain an average above the standard.  For reference, STLA paid just $152 million for missing the standard in both 2016 and 2017. However, the NHTSA more than doubled the fines for missing CAFE standards in 2022.  Elsewhere, in India, a group of startups asked an Indian court to suspend the new GOOGL “in App billing fee system” (scheduled to go live on April 26) until it can be reviewed by the Indian antitrust body.  Meanwhile, a US appeals court gave MRNA a win by affirming the decision to throw out an ABUS lawsuit over patent infringement related to MRNA’s COVID-19 vaccines.  At the same time, a group of video gamers has filed a new legal challenge to the MSFT acquisition of ATVI.  This came after a US judge rejected an earlier version of the suit last month.  After the close, a US appeals court ruled a lawsuit against HPQ alleging shareholders were defrauded should be revived, overruling a lower court’s dismissal.  (The SEC has already fined HPQ $6 million over the practices in question in September 2020.)

In miscellaneous news, BAC reported Tuesday evening that its clients pulled roughly $2.3 billion from equities markets last week.  That was the second consecutive week of overall stock market outflows according to the BAC note.  This week’s equities outflow was led by money leaving real estate sector stocks (-$451 million).  Interestingly, at nearly the same time, BX announced it had raised $30.4 billion for its latest global real estate fund.  Elsewhere, Bitcoin climbed above $30,000 Tuesday, for the first time since June 2022.  This puts Bitcoin up 82% on the year.   This comes as G7 members are discussing cryptocurrency standards and how they should be regulated ahead of the next G7 meeting at the end of June. Meanwhile, the EIA released a forecast saying that US electricity use will fall 1% in 2023 (down from a record high in 2022) mostly due to a warm winter.  In addition, the Dept. of Energy said the use of coal in electric generation is set to fall significantly again this year.  In 2022, 20% of electricity was generated through burning coal, and this year that is on track to be 17%.  Finally, BA took over the top spot (for the first time since mid-2018), delivering slightly more planes in Q1 (3 more jets) than its main competitor EADSY (Airbus).

Overnight, Asian markets were mixed but there was more green on the board than red.  Hong Kong (-0.86%) had by far the biggest losses.  Meanwhile, Japan (+0.57%), India (+0.51%), and Australia (+0.47%) led the majority of the region higher.  In Europe, the bourses are mostly green at midday.  The CAC (+0.45%), DAX (+0.30%), and FTSE (+0.64%) lead nine other exchanges higher in early afternoon trade while only three of the smaller markets are in the red.  In the US, as of 7:00 am, Futures are pointing toward a flat to mildly green start to the day (ahead of major data).  The DIA implies a +0.23% open, the SPY is implying a +0.16% open, and the QQQ implies a +0.03% open at this hour.  At the same time, 10-year bond yields are back up to 3.451% and Oil (WTI) is on the red side of flat at $81.49/barrel in early trading.

The major economic news events scheduled for Wednesday include March CPI (8:30 am), EIA Crude Oil Inventories (10:30 am), March Federal Budget Balance and the FOMC Meeting Minutes release (both at 2 pm).  There are no major reports scheduled for Wednesday.

In economic news later this week, on Thursday, March PPI and Weekly Initial Jobless Claims are reported.  Finally, on Friday, March Retail Sales, March Import/Export Price Indexes, March Industrial Production, Feb. Business Inventories, Michigan Consumer Sentiment, and Feb. Retail Inventories are reported.

In terms of earnings reports later this week, on Thursday, we hear from, DAL, FAST, INFY, and PGR.  Finally, on Friday, BLK, C, JPM, PNC, UNH, and WFC report.

In mortgage news, interest rates fell to a two-month low last week, causing homebuyer mortgage demand to rise.  Specifically, the national average 30-year, fixed-rate, 20% down, mortgage rate fell from 6.40% to 6.30% last week.  (Loan origination points also fell from 0.59 to 0.55.)  As a result, demand for new purchase mortgages jumped 8% on the week.  It is worth noting that demand for refinance loans was flat on the week, and overall mortgage demand was still far lower than it was one year prior.  Also, even though the weekly average was reported, it was a sharp one-day decline mid-week that likely drew the increased application volumes.

With that background, at least in the premarket, once again it looks like the market is in “wait and see” mode. The large-cap indices are both just on the green side of flat while the Tech-heavy QQQ is just on the red side. However, the 3ema is still above the rising T-line (8ema), which is above a rising 17ema, which is above the 50sma and that is above the 200sma in all the major indices. So, any way you slice it, the trend remains bullish and we can best be described as in a pullback or Bull Flag inside that bullish trend. (With that said, we do have to recognize we are sitting on potential support in the QQQ, and up against a potential resistance level in the DIA and SPY.) Over-extension is certainly not a problem in terms of the T-line. However, the T2122 indicator is deep into the overbought territory. It’s absolutely true that new data or news could change the picture in a heartbeat. However, that is what the chart tells us now. So, putting aside fear and prediction, the chart is telling us to maintain a long bias and keep a sharp eye out for trend breaks.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped lower on Monday, in a divergent manner.  The SPY opened down 0.62%, DIA gapped down 0.29%, and QQQ gapped down 0.90%.  However, after that open, the bulls stepped in to lead a long, slow, rally that steadily took us higher until 3 pm.  At that point, we saw a sideways grind in a very tight range for the last hour in all three major indices.  This action gave us a white-bodied candle that bounced up off the T-line (8ema) in the SPY.  DIA also printed a white-bodied candle with tiny wicks on each end.  Meanwhile, the QQQ printed a white-bodied candle that started below the T-line, had a larger lower wick, and closed back above the 8ema on an overall inside day candle.  With that said, you can definitely see that the DIA (and perhaps the other major indices) are in a Bull Flag pattern.

On the day, eight of the 10 sectors were in the green with the Industrials (+01.13%) leading the way higher while Healthcare (-0.07%) lagged and was the only sector more than a few ticks into the red.  At the same time, the SPY gained 0.10%, DIA gained 0.32%, and QQQ lost 0.06%.  VXX fell almost 1% to 43.06 and T2122 climbed back into the overbought territory at 87.79.  10-year bond yields climbed strongly all day to close at 3.421% while Oil (WTI) was down more than a percent to $79.80 per barrel.  So, on Monday we saw a significant gap lower, met by all-day buying in what turned out to be a bear trap.  All of this happened on well less-than-average volume in all three major indices.   

In stock news, AMC reported all-time high US Easter weekend revenue, saying that 3.6 million people bought movie tickets over the three days.  Meanwhile, Chinese (and Warren Buffett-backed) electric car maker BYD launched a new suspension system in an effort to take the brand upscale.  The system will be similar to the Porsche and Mercedes Benz luxury ride control features.  In M&A news, TECK again rejected the unsolicited $22.5 billion bid from GLNCY, telling its shareholders the offer was an illusion and management’s restructuring plan is the only viable option.  However, PXD shares rose on reports that XOM has held preliminary talks about buying the company.  (PXD is the third-largest Permian Basin oil producer after CVX and COP).  Elsewhere, workers at a TSN poultry plant went on strike demanding better working conditions.  (Since TSN announced it will close that plant in May, many employees have left, which leaves the remaining employees in tougher conditions and long hours.)   Finally, it was reported Monday that global personal computer sales plunged in Q1. AAPL took the biggest hit with the sale of Macs dropping more than 40% during the quarter. This was far worse than the next-worst-hit Dell whose sales fell 31% in the first three months of 2023.

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In stock legal and regulatory news, it didn’t take long for TSLA to be hit with a class-action lawsuit after reports surfaced at the end of last week that TSLA employees were sharing images and video recorded by TSLA cars from 2019 to 2022.  No dollar amount has yet been assigned to the case.  Elsewhere, BIDU sued AAPL (as well as relevant app developers) over fake copies of BIDU’s AI “Ernie bot” being sold through the AAPL App Store.  Meanwhile, the US CFTC announced GS has agreed to pay $15 million to the US Commodity Futures Trading Commission over charges GS had failed to make proper disclosures and communicate fairly with swap customers.  At the same time, the FTC opened a new front in its fight to stop ICE from buying BKI.  This time the FTC has asked a federal court for a preliminary injunction to halt the deal while its internal administrative process moves forward.  (ICE and BKI had planned to proceed with the deal after an April 28 vote, despite the FTC opposing it.)

In miscellaneous news, Reuters reports that solar panel installers like SPWR and RUN are bracing for an expected steep drop-off in demand in CA.  The state has new solar reimbursement rules taking effect this week (April 15) which will reduce the electric reimbursement rates significantly.  Meanwhile, in banking news, Bloomberg reported Monday that there are signs that the banking system issue is easing.  Specifically, in the last week of March, the Federal Home Loan Bank system (known as the “lender of next-to-last resort”) had a sharp decline in home loans it issued.  For that week, FHLB loaned $37 billion, a sharp decline from the record $304 billion it had loaned just two weeks earlier. This signals that the member banks had less of a need for liquidity.  The report also noted that FHLBs had issued far fewer bonds that week, just $19.8 billion, well down from the $151 billion issued the week SIVB was put into receivership.  Both of these are signs that loan-originating banks are not as strapped for cash and fell they have the liquidity to underwrite loans on their own.

Despite the improved bank liquidity situation reported above, the NY Fed came out with a lagging report from March on Monday. The survey found that more than 58% of those responding reported that it is harder to get credit than it was in March 2022. That level was the highest on record but it is critical to remember this survey has only existed since mid-2013. (So, less than 10 years.) The less useful part of the survey found that 53% of those responding expect credit to be even harder to get a year from now and expressed a possibility that they may miss a debt payment within the next three months.

Overnight, Asian markets were nearly green across the board. Only Shanghai (-0.05%) was in the red while South Korea (+1.42%), Australia (+1.26%), and Japan (+1.05%) led the rest of the region higher.  In Europe, we see the same picture taking place at midday with no red on the board at all.  The CAC (+0.86%), DAX (+0.49%), and FTSE (+0.26%) are typical and leading the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward another mixed and nearly flat start to the day.  The DIA implies a +0.12% open, the SPY is implying a +0.09% open, and the QQQ implies a -0.10% open at this hour.  Meanwhile, 10-year bond yields a down a bit to 3.402% and Oil (WTI) is just on the red side of flat at $79.67/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to the WASDE Ag Report (noon) and API Crude Oil Stocks Report (4:30 pm).  However, we do hear from two Fed more members (Harker at 4 pm and Kashkari at 7:30 pm).  Major earnings reports scheduled for the day are limited to ACI and KMX before the open. Again, there are no earnings reports scheduled after the close.

In economic news later this week, on Wednesday, March CPI, EIA Crude Oil Inventories, March Federal Budget Balance, and the FOMC Meeting Minutes are released.  On Thursday, March PPI and Weekly Initial Jobless Claims are reported.  Finally, on Friday, March Retail Sales, March Import/Export Price Indexes, March Industrial Production, Feb. Business Inventories, Michigan Consumer Sentiment. Feb, and Retail Inventories are reported.

In terms of earnings reports later this week, on Wednesday, there are no major reports.   Thursday, we hear from, DAL, FAST, INFY, and PGR.  Finally, on Friday, BLK, C, JPM, PNC, UNH, and WFC report.

In mixed-bag news, Warren Buffett told Nikkei that he has raised his holdings of Japanese company stocks by almost 50% since 2020 (up 2.4% from 5% of his overall portfolio). Buffett also said he is looking to increase his exposure to Japan, although no specific target companies were named. Meanwhile, Bloomberg reports that in Switzerland, lawmakers are beginning to scrutinize the government’s move that agreed to provide up to $120 billion in taxpayer money to support the UBS takeover of CS. (Swiss lawmakers really can’t do anything to stop the deal at this point. However, they expect to make political hay and apparently hope to revamp the country’s “too big to fail” rules.)

So far this morning, KMX missed on revenue while absolutely blowing away the earnings line (a 100% upside surprise on earnings).  ACI (KR acquisition target pending regulatory approval) reports at 8:30 am.

With that background, at least in the premarket, it looks like the consolidation continues in the major indices. Perhaps traders are waiting on CPI data or need to hear from the big banks as earnings season starts again on Friday. The SPY, DIA, and QQQ all sit just below their rising 3ema and just above their rising T-line (8ema), thus indicating that the short-term bullish trend remains in play. In turn, those 8emas are all sitting above a rising 17ema, which indicates a longer-term bullish trend. Longer-term, all three of the 34emas are rising and the 50sma of the SPY and QQQ are sloping upward as well. Only the DIA has a falling 50sma. So, putting fear and prediction aside, the chart is telling us it is bullish. It is also not over-extended in terms of the T-line. However, the T2122 indicator is back in the overbought territory. Make of that what you will. Personally, I’ve never been good enough to pick a top or bottom. So, all I can do is trade with the trend and cautiously watch for breaks of the trendline. That’s what I’ll do here too.

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 saw a small gap lower at the open (down 0.17% in the SPY, down 0.09% in the DIA, and down 0.53% in the QQQ).  After that open, all three major indices ground sideways to get their bearings for the first 30 minutes of the day.  However, starting at 10 am in the SPY and QQQ as well as 11 am in the DIA, the bulls led a long, slow rally that lasted until 2:30 pm.  From that point, the QQQ and SPY ground sideways in a fairly tight range.  At the same time, DIA did a slow, shallow pullback.  This action gave us a white Bullish Engulfing candle (that bounced up off its T-line) in the SPY, a white-bodied Spinning Top in the DIA, and a Bull Engulfing candle that crossed back up through its T-line in the QQQ.

On the day, seven of the 10 sectors were in the green with the Healthcare (+0.75%) group leading the way higher while Energy (-1.23%) lagged the other sectors.  At the same time, the SPY gained 0.39%, DIA gained 0.02%, and QQQ lost 0.67%.  VXX lost 1.76% to 43.48 and T2122 climbed but remains in the mid-range at 63.69.  10-year bond yields fell slightly again to 3.305% while Oil (WTI) was flat at $80.54 per barrel.  So, on virtual Friday we saw a sideways to very modestly bullish session.  All of this happened on well less-than-average volume in all three major indices.  

In economic news Thursday, the Weekly Initial Jobless Claims came in much higher than expected at 228k (compared to a forecast of 200k but still far below the prior week’s 246k reading).  Then on Friday, March Nonfarm Payrolls increased slightly less than was expected at +236K (compared to a forecast of +239k and far lower than the February reading of +326k). At the same time, March Private Nonfarm Payrolls increased far less than expected at +189k (versus the forecast of +215k and the February value of +266k).  Meanwhile, the March Participation Rate came in a bit above expectation at 62.6% (compared to the forecast and previous reading of 62.5%).  This all resulted in a better-than-expected March Unemployment Rate of 3.5% (versus the forecast and February value of 3.6%).  (Of potential note, Black Unemployment fell to 5%, which is the lowest absolute level since 1972 and the narrowest gap to overall unemployment in over 50 years.)  Finally, March Average Hourly Earnings also increased less than expected at +4.2% annualized (compared to a forecast of +4.3% and growing much slower than the Feb. increase of +4.6%).  The bottom line is that the March Payrolls data came in about as well as the Fed could have hoped.  Participation is up, but job increases are slowing and wage increases are slowing (without either falling off a cliff).  This seems in line with the Fed’s stated path of one more quarter-point rate hike and then stable rates for the rest of the year.  This should be good news for bulls and was followed by an increase in bond yields and the US dollar (which tend to indicate a move to a “risk on” stance).

SNAP Case Study | Actual Trade

In stock news Thursday, Reuters reported that between 2019 and 2022, TSLA employees shared private videos and images recorded by the cameras located in customer cars.  (Many of these videos and images were reportedly highly invasive, showing customers in embarrassing situations and even naked.)  TSLA responded by saying that customer car camera recordings remain anonymous.  However, Reuters reported that several former employees said TSLA internal computer programs can and do routinely identify the locations and owners of the cars doing the recording.  In other TSLA news, the company cut prices again over the weekend (this time by an average of 6%).  This is TSLA’s fifth price cut in 2023.  Elsewhere, WMT announced it has plans to launch a network of electric vehicle charging stations at many US stores by 2030.  This will be in addition to 1,300 charging stations previously announced as part of the WMT partnership with VLKPY (Volkswagen). Meanwhile, Bloomberg reports that BA plans to increase the output of 737 jets to 38 per month by the middle of the year.  (BA currently produces 31 of the 737 planes each month.)   At the same time, HMC announced a recall of 563,000 CRV sport utility vehicles from 2007-2011 model years because rust may cause the frame to detach.  In rumor news, the Wall Street Journal reported that NGG and D both are separately seeking to sell parts of their own natural gas pipeline networks, which combined could be worth $13 billion.  Finally, in black eye news, Reuters reported that LUV CEO Jordan received a 75% compensation increase (mostly from bonus) even though he promised to cut executive bonuses after the 17,000 flight cancellations around Christmas and despite LUV stock falling more than 66% in the year preceding the raise.

In stock legal and regulatory news, the EPA proposed new rules on Thursday that would cause sweeping cuts in vehicle emissions.  The rules will take effect starting in the 2027 model year with the last of the rules phased in by the 2032 model year. Later, HOOD agreed to pay $10.2 million in penalties to several individual states for platform outages in March 2020 as well as for deficient account review and approval processes prior to 2021.  Meanwhile, a day after CMG sued SG for trademark infringement, SG has renamed its newest menu item (formerly known as the “Chipotle Chicken Burrito Bowl”).  Elsewhere, the Treasury Dept. and MSFT reached a settlement over the tech firm’s violations of sanctions and export controls.  MSFT agreed to pay a $3 million to settle 1,300 apparent sanction violations involving Cuba, Iran, Syria, and Russia. (The fine was so small because Treasury said the violations were not egregious and were self-reported.)  At the same time, the US GAO denied LMT’s protest of the Army awarding a $7.1 billion helicopter contract (for a Blackhawk replacement) to TXT.  On Friday, the Financial Times reported that the US Office of the Comptroller of Currency (Treasury Dept.) has scheduled an audit of JPM related to the company’s potential lack of “due diligence” performed as part of the bank’s acquisition of dozens of smaller companies in 2021 and 2022.  This comes after the US Dept. of Justice filed fraud charges against the founder of financial aid company Frank for having defrauded JPM to the tune of $175 million.  Finally, CNBC reported Friday that the Dept. of Labor (OSHA) has again found DG guilty of more than 180 serious workplace violations, including the blocking of fire exits.  However, federal law only allowed OSHA to fine DG $245,544. 

In money flow news, Fed data released Friday showed that bank deposit outflows have stabilized.  Deposits at banks not among the 25 US largest banks were down just $1.1 billion the week ending March 22.  That said, smaller bank deposits are still down $216 billion from their peak in December of 2022.  Over the same period, deposits at the top 25 banks are down $96.2 billion. (Large bank deposits have fallen $519 billion from the high, which was $11.2 trillion dollars in February 2022.)  A different way to look at this situation is that about $350 billion in new money poured into Money Market funds in the four weeks ending April 5.  That took Money Market funds to a record total of $5.25 trillion.  Over that same time, SPY is up 6%, DIA is up 4.77%, and QQQ is up 10.2%.  So, money is flowing out of bank deposits and apparently into both stocks and money market funds at a significant clip.  Big bank earnings reports starting at the end of this week may also give us better insight.

Overnight, Asian markets were mixed but leaned toward the green side.  Shenzhen (-0.80%) was by far the biggest loser on the day. Meanwhile, Thailand (+1.02%) was the biggest winner in the region, followed by South Korea (+0.87%) and Japan (+0.42%).  In Europe, the bourses are closed for holiday on Monday.  In the US, as od 7:30 am, Futures are pointing toward another mixed, flat open.  The DIA implies a +0.08% open, the SPY is implying a -0.07% open, and the QQQ implies a -0.36% open at this hour.  At the same time, 10-year bond yields are up from Thursday’s close to 3.368% and Oil (WTI) also up very slightly to $80.69/barrel.  (For its part, Natural Gas is making a strong move, desperately trying to hang on to the $2 level after a year-long decline.)

The only major economic news events scheduled for Monday is a speech from Fed member Williams (4:15 pm).  The major earnings reports scheduled for the day are limited to GBX before the open.  There are no earnings reports scheduled after the close.

In economic news later this week, on Tuesday, we get the WASDE report, API Crude Oil Stocks Report and hear from two Fed members (Harker and Kashkari).  Then Wednesday, March CPI, EIA Crude Oil Inventories, March Federal Budget Balance, and the FOMC Meeting Minutes are released.  On Thursday, March CPI and Weekly Initial Jobless Claims are reported.  Finally, on Friday, March Retail Sales, March Import/Export Price Indexes, March Industrial Production, Feb. Business Inventories, Michigan Consumer Sentiment. Feb, and Retail Inventories are reported.

In terms of earnings reports later this week, on Tuesday, KMX and ACI report.  Then, on Wednesday, there are no major reports.   Thursday, we hear from, DAL, FAST, INFY, and PGR.  Finally, on Friday, BLK, C, JPM, PNC, UNH, and WFC report..

In under-the-radar geopolitical news, last week, the Chinese response to Taiwan’s President Tsai meeting with US House Speaker McCarthy included announcing plans Friday to begin stopping and inspecting ships in the Taiwan Strait.  Taiwan’s response was to say “No you won’t” and advised ships and shipping lines to call the Republic of China (Taiwan) Coast Guard or Navy should they be radioed or obstructed by China.  Shortly afterward, China said that its operation was a three-day military drill intended to demonstrate its ability to control the Strait.  (Thus, limiting the escalation.)  For its part, the US Administration has de-escalated the situation by simply saying this Chinese move was another ratcheting up of tensions (the same thing China said before the US officials met the Taiwanese leader). 

So far this morning, GBX beat on both the revenue and earnings lines.  It is worth noting that GBX revenue included a 34% upside surprise.

With that background, at least in the premarket, it appears stocked have pulled back in the last 30 minutes, to give us a very modest but red across-the-board opening bell. QQQ is now retesting its T-Line (8ema), with the SPY and DIA not far above their own T-lines. It looks as if the consolidation of last week is trying to continue. Overall, the price action still looks like nothing more than a modest consolidation (or small pullback in QQQ) in a bullish trend. However, you’d still be hard-pressed to look at these charts and say the bears are in control in any meaningful way. Obviously, being this close to the T-lines, overextension is not an issue now, either in terms of the T-line (8ema) or the T2122 indicator. Be cautious, but the last indications we received were bullish candles Thursday and Payroll data that will likely be seen as bullish (unless you are one of the “I don’t know why the sky isn’t falling yet” crowd).

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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