Markets diverged, and yet, acted strangely similar most of the day.  DIA opened dead flat, rallied the first 30 minutes, and then traded sideways in a tight range between the open and the 10 am highs the rest of the day.  SPY, gapped down 0.21%, traded sideways for 30 minutes, and then sold off for an hour.  However, from 11 am until the close it too traded sideways in a tight range.  For its part, QQQ gapped down 0.33%, sold off hard until 11 am, and then it too traded sideways in a tight range the rest of the day.  This action gave us a Bullish Harami candle in the DIA, an indecisive Doji in the SPY, and an indecisive (larger-bodied) Spinning Top in the QQQ.  All of the major indices remained above their T-line (8ema) with only the QQQ even testing that level.

On the day, five of the 10 sectors were in the green with Utilities (+2.22%) leading the way higher while Consumer Cyclicals (-1.62%) lagged the other sectors.  At the same time, the SPY lost 0.26%, DIA gained 0.26%, and QQQ lost 0.99%.  VXX lost 0.92% to 44.26 and T2122 fell but remains in the mid-range at 56.00.  10-year bond yields fell again to 3.309% while Oil (WTI) was flat at $80.61 per barrel.  So, on Wednesday we saw divergence as money sought safety.  The mega-cap DIA gained ground while the tech-heavy QQQ lost a percent. SPY fell somewhere in the middle, hurt by the big tech names and helped by the mega-caps.  All of this happened on less-than-average volume in the DIA and SPY but just above-average volume in the QQQ.  

In economic news Wednesday, the March ADP Nonfarm Employment Change came in far below expectations at +145k (compared to a forecast of +200k and a Feb. reading of +261k).  Later, the February Imports and Exports both came in above expectation but still below the January readings at $251.15 billion Exported and $321.70 billion Imported (versus forecasts of $250.40 billion for Exports and $319.40 billion for Imports but still down from the January Exports of $258.10 billion and Jan. Imports of $326.70 billion).  This left the February Trade Balance at -$70.50 billion compared to a forecast of $69.00 billion and a January deficit of $68.70 billion.  After the open, the March S&P Global Composite PMI came in one point below forecast at 52.3 but still better than the February reading at 50.1.  The March US Services PMI also came in light at 52.6 (versus a forecast of 53.8 and a February value of 50.1).  Meanwhile, the March ISM Non-Mfg. PMI reported below expectation at 51.2 (compared to a forecast of 54.5 and the Feb. reading of 55.1).  Finally, the Weekly EIA Crude Oil Inventories fell 3.739 million barrels, which was more than the expected 2.329-million-barrel drawdown but still far below the prior week’s 7.489-million-barrel drawdown.

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In stock news, WMT said Wednesday that it is seeing sustained pressure from inflation that is impacting its customers.  As a result, it plans to slow its pace of hiring.  (This is a day after WMT laid off 2,000 fulfillment center employees in an effort to reduce the cost of package processing by 20% via automation.)  At midday, data from an engineering consortium (MLCommons) showed that flagship artificial chips from QCOM beat the best chips from NVDA in two out of three measures of power efficiency.  (The cost of electricity is a major factor in AI technologies.)  However, NVDA chips took the top spot in terms of absolute performance.  Meanwhile, STLA joined the electric truck market by unveiling the Ram 1500 REV, which will debut in late 2024 as a 2025 model truck. This will be two years after the debut of F’s F-150 Lightning and a year after the GM electric Silverado (due out this fall).  Later in the day, Reuters reported FDX will consolidate its FedEx Ground, outsourced package delivery unit and overnight Express air delivery businesses to cut costs and better compete with UPS and AMZN.  After the close, COST reported that comparable store sales fell by 1.1% (led by a 1.5% decline in the US and a 2.4% decline in Canada) in March.  Elsewhere, ABBV lowered its Q1 and full-year guidance a few weeks before it reports (4/27).

In stock legal and regulatory news, F and STLA both said that new rules from the US Treasury Dept. will cut EV tax credits on most of their electric and hybrid models.  Later the US EEOC filed a “friend of the court” brief backing an appeal by a UBER driver that claims passenger ratings can be biased and were used by the company to kick out non-white drivers at a higher rate than whites.  On the day, JNJ stock soared on what is still just a company-proposed $8.9 billion settlement of 40,000 lawsuits.  (Approval of the JNJ proposal requires 75% of the 60,000 plaintiffs to accept.)  At the close, GS was fined $3 million by FINRA for “mismarking” short orders for 14 billion shares when it reported its trades.  This covered 12,335 trades.  Elsewhere, the FDIC announced it has retained BLK to sell securities it holds in receivership after the collapse of SBNY.  At the same time, CMG filed suit against SG for trademark infringement. 

In miscellaneous news, Speaker of the House McCarthy and a bipartisan group of US Congressmen met with Taiwanese President Tsai on Wednesday during her “transit of the US.” (Called such because China would not like her “visiting” the US.)  Regardless of the diplomatic labeling, China protested loudly and vowed a strong response.  In other China news, AAPL has been secretly (and not so secretly) working to move the bulk of their production out of China and into India in the last six months or so.  Even bringing their main manufacturer (Foxconn) with them.  This is not just AAPL, but a major trend where the Chinese economy has grown enough that its people are a bit less desperate and beginning to demand better conditions and most importantly to corporations, pay.  Vietnam and India seem to be “the winners” in that shift.  However, according to Bloomberg today, EADSY (Airbus) is bucking that trend by opening a new jet manufacturing factory in China.   Meanwhile, Mexico reported that its consumer inflation fell more than expected in March, reaching an 18-month low annual rate of 6.85%.  This was down from a 7.62% annual rate in February.  The question is whether this news bodes well for the US economy?

Overnight, Asian markets were mostly in the red.  South Korea (-1.44%), Thailand (-1.44%), and Japan (-1.22%) led the region lower while Hong Kong (+0.28%) was the “big winner” on the day.  However, in Europe, the bourses are leaning strongly to the green side at midday.  Only, Norway (-0.48%) and Denmark (-0.33%) are in the red as the CAC (+0.31%), DAX (+0.35%), and the FTSE (+0.76%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing to another mixed and flat start to the day. The DIA implies a +0.04% open, the SPY is implying a +0.01% open, and the QQQ implies a -0.20% open at this hour.  At the same time, 10-year bond yields are down to 3.285% and Oil (WTI) is just on the red side of flat at $80.49/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims (8:30 am), Fed Balance Sheet and Bank Reserve Balances with Federal Reserve Bank (both at 4:30 pm).  The major earnings reports scheduled for the day include Wednesday, we hear from LW, STZ, RPM, and LEVI before the open.  There are no earnings reports scheduled after the close.

In economic news later this week, on Friday, US markets are closed but March Avg. Hourly Earnings, March Nonfarm Payrolls, March Participation Rate, March Private Nonfarm Payrolls, and the March Unemployment Rate are reported.

There are no earnings reports scheduled for Friday.

So far this morning, RPM has reported beats on both the revenue and earnings lines., including a 23% upside surprise on the earnings line.  However, RPM also lowered its forward guidance.  Meanwhile, STZ reported 25 minutes late this morning for some reason, missing on revenue while beating on earnings.  STZ also raised its guidance. LEVI is just scheduled for “before the open” and LW reports at 8 am.

With that background, at least in the premarket, the consolidation is continuing. It appears the QQQ will retest its T-Line (8ema) this morning. However, the two large-cap indices just seem to be hanging out at the moment. As I suggested yesterday, it could be that with March Payrolls data coming out while the market is closed Friday, traders want to just wait and see what Monday brings. Overall, the price action still looks like nothing more than a modest pullback and consolidation in a bullish trend. The most concerning of the major indices is QQQ which has pulled back the most and is testing its strong bullish uptrend line. However, you’d be hard-pressed to look at the chart and say the bears are in control in anything but the very short term. Obviously, being this close to the T-line, overextension is not an issue now, either in terms of T-line (8ema) or the T2122 indicator. Again, keep in mind that markets will be closed and you will not be able to react to March Payrolls data until Monday. So, be prepared for the 3-day weekend.

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

See you in the trading room.

Ed

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

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

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

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

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

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

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

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

Tuesday started off flat in all three major indices.  However, by 10 am, the bears had stepped in to sell off the whole market until 12:15 pm.  At that point, we saw a sideways grind in a tight range near the lows in the SPY, DIA, and QQQ.  This grind lasted the rest of the day.  This action is giving us a Bearish Engulfing signal in the SPY (with a lower wick), a Bearish Harami in the DIA (again with a lower wick), and a black candle that qualifies as both a Bearish Dark Cloud Cover and an Indecisive Spinning Top in the QQQ.  One additional piece of info is that the small-cap IWM printed a big, ugly Evening Star candle that crossed below its T-line (8ema).   This all happened on far less-than-average volume in all three major indices, but the IWM had slightly greater-than-average volume.

On the day, seven of the 10 sectors were in the red with Industrials (-2.18%) leading the way lower while Communications Service (+0.37%) and Utilities (+0.33%) held up better than the other sectors.  At the same time, the SPY lost 0.55%, DIA lost 0.58%, and QQQ lost 0.34%.  VXX gained 1.73% to 44.67 and T2122 fell out of overbought territory to 64.79.  10-year bond yields fell again to 3.342% while Oil (WTI) was flat at $80.53 per barrel.  So, Tuesday there was a little bit for both camps.  We came into the day overextended to the upside. That means bulls would be perfectly justified if they characterized the day as a pause or consolidation of an uptrend.  On the other hand, bears could also legitimately say it looks like the uptrend has lost steam and we could be at the start of a bearish reversal. 

In economic news Tuesday, February Factory Orders came in below expectations at -0.7% (compared to the -0.5% forecasted but still much better than the -2.1% reading in January).  Meanwhile, February JOLTs Job Openings came in better than expected at 9.931 million, which was the lowest level in two years, (versus the 10.400 million forecast and the January value of 10.563 million openings).  Both of those will be seen as good news by the Fed as factory activity is slowing and there are notably fewer open jobs (so, less wage inflation pressure).  Then, after the close, the API Weekly Crude Stocks Report showed a much bigger drawdown than expected at -4.346 million barrels (as compared to a forecast of -1.800 million barrels but still not as much as the prior week’s surprise drawdown of 6.076 million barrels).

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In stock news, F reported a 10.7% increase in sales in Q1, selling 456,972 vehicles compared to 432,132 in Q1 of 2022.  Of note is the fact that 95% of those Q1-2023 sales came from trucks and SUVs.  Electric vehicle sales increased 41% year-over-year to 10,866 in the quarter.  The company also announced adding a shift at their Kansas City plant and increasing production across the country to support strong demand.  Meanwhile, F rival GM announced that about 5,000 salaried workers have taken buyouts which the company says puts them “well on their way” toward meeting a goal of cutting $2 billion in costs by the end of 2024.  (The company CFO said the buyouts will contribute approximately $1 billion in savings.  He also said GM will take a $1 billion charge in Q1 related to these contract buyouts.)  Elsewhere, the US Army has awarded LMT a multi-year production contract for JAGM and Hellfire missiles that could run up to $4.5 billion (initial value $439 million in year one).  At the same time, WMT announced that 65% of its stores will be serviced by automation by the end of fiscal 2026. (Meaning the distribution centers will be automated, eliminating warehouse workers.)  The announcement also disclosed that the WMT will lay off more than 2,000 people at online order fulfillment centers related to this automation.  Finally, after the close, TTE announced it has gotten a new (sweeter) deal from Iraq related to its $27 billion project to create 4 natural gas, oil, and renewables projects in the country.  In the new deal, Iraq will take only a 30% ownership stake in the projects, compared to the original deal that gave Iraq 40% ownership in the projects.

In stock legal and regulatory news, the NHTSA announced a recall of 143,000 VLKPY (Volkswagen) 2018-2021 vehicles related to front passenger seat airbag systems.  At the same time, a US Appeals Court has rejected a bid from AAPL, which was seeking to override its rejection for a trademark on “Apple Music.”  (A jazz musician had been using the “Apple Music” term to brand his music in advertising since 1985.)  Later in the day Tuesday, TPG agreed to buy a majority stake in the “Elite” software business of TRI for $500 million.  Elsewhere, Reuters reported JNJ has refiled for bankruptcy of its talc subsidiary (created solely to limit JNJ liability from 40,000 lawsuits claiming the company’s tac powder contained cancer-causing agents).  While JNJ had initially filed for bankruptcy and offered $2 billion to settle all lawsuits, the new filing is offering $8.9 billion (paid over 25 years) to resolve all current and future claims (there are more than 60,000 current claimants).  Meanwhile, ABUS filed a patent infringement lawsuit against PFE and NNTX related to the latter pair’s COVID-19 mRNA vaccine.  Later, a Reuters report says that a 3-judge panel of the 7^th Circuit of the US Court of Appeals appears very skeptical of MMM’s attempt to do the same thing JNJ did above (move liability to a new subsidiary and then file bankruptcy for the subsidiary to avoid liability from lawsuits by the parent corporation.  A bankruptcy judge had ordered lawsuits to continue against MMM even though the subsidiary (Aearo Technologies) is bankrupt.  The suits are related to alleged defective military-issue earplugs that caused deafness.

In mortgage news, rates fell last week but demand for home loans dropped anyway.  Analysts say a lack of home listings are outweighing lower rates as home buyers are not satisfied with the offering available.  The average 30-year fixed-rate, conforming (20% down) loan rate was 6.40% (down from 6.45%) with origination points also falling from 0.62 to 0.59.  Nonetheless, home purchase mortgage applications fell 4% week-on-week while refinance applications fell 5% on the week.  The National Realtors Assn. says the main issue facing that market is a 20% drop in new listings and total “for sale” inventory (houses) less than half of what was on the market at this time in 2019.  So, it appears Americans are staying put longer and not refinancing to do renovations.

Overnight, Asian markets were mixed but leaned (at least in broadness) to the upside.  Japan (-1.68%), Thailand (-1.44%), and Hong Kong (-0.66%) paced the losses.  At the same time, India (+0.91%), South Korea (+0.59%), and Shanghai (+0.49%) led the gainers.  In Europe, we see the opposite picture taking shape at midday.  The more plentiful red side of the market is led by CAC (-0.13%) and DAX (-0.20%), with eight smaller exchanges moving (some moving more) to the downside.  Meanwhile, the FTSE (+0.44%) leads the gainers, with four smaller exchanges moving up less at least in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.08% open, the SPY is implying a -0.12% open, and the QQQ implies a -0.13% open at this hour.  10-year bond yields are up a touch to 3.357% and Oil (WTI) is down four-tenths of a percent to $80.35/barrel in early trading.

The major economic news events scheduled for Wednesday include the ADP March Nonfarm Employment Change (8:15 am), Feb. Imports/Exports and Feb. Trade Balance (both at 8:30 am), March Service PMI and S&P March Global Composite PMI (both at 9:45 am), March ISM Non-Mfg. PMI (10 am), and EIA Weekly Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day include CAG and SCHN before the opening bell.  There are no earnings reports scheduled after the close.

In economic news later this week, Thursday, we get Weekly Initial Jobless Claims and Bank Reserve Balances with Federal Reserve Bank.  Finally, on Friday, US markets are closed but March Avg. Hourly Earnings, March Nonfarm Payrolls, March Participation Rate, March Private Nonfarm Payrolls, and the March Unemployment Rate are reported.

In terms of earnings, on Thursday, LW, STZ, RPM, and LEVI report.  There are no reports scheduled for Friday..

So far this morning, CAG has reported a beat on both the revenue and earnings lines.  The earnings beat was almost a 20% upside surprise versus the average analyst forecast.  CAG also raised its forward guidance.  (SCHN reports at 8 am.)

With that background, at least in the premarket, it looks like the consolidation continues. It could be that with March Payrolls data coming when the market is closed Friday that traders don’t want to get too far in front of their skis. Today’s ADP Payrolls number may give some of them the courage to change that stance. All-in-all, the bulls could not have hoped for a much better start (consolidation) to April after the surge the three-day surge that ended March. Overextension is not an issue now, either in terms of T-line (8ema) or the T2122 indicator. Stay cautious, but the trend is clearly bullish in all three major indices.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Friday was the bull’s day on Wall Street with a modest gap higher at the open from the large-cap indices.  The SPY gapped up 0.22% and DIA gapped up 0.32%.  Meanwhile, QQQ opened dead flat.  However, after the open, a slow, steady rally took hold and kept going the entire day. We closed very near the highs in all three major indices. This action gave us large-bodied, white candles, with no lower wick and a tiny upper wick.  So, nearly Marubozu (Shaved Head) candles in the SPY, DIA, and QQQ.  DIA crossed up through its 50sma during the day and the SPY and QQQ are now getting extended above their T-lines (8ema).  This happened on average volume in QQQ, a bit greater-than-average volume in the SPY but lower-than-average volume in the DIA.

On the day, all 10 sectors were in the green with Consumer Cyclical (+2.02%) leading the way higher while Communications Services (+0.29%) lagged behind other sectors.  At the same time, the SPY gained 1.41%, the DIA gained 1.26%, and QQQ gained 1.66%.  VXX fell slightly to 44.91 and T2122 climbed even further into the overbought territory to 95.39.  10-year bond yields fell again to 3.473% while Oil (WTI) rose 1.79% to $75.70 per barrel.  So, Friday saw the bulls in charge all day long, even though there was not a large gap higher at the open. 

In economic news, the February PCE Price Index came in a bit below expectation at +5.0% (year-on-year), compared to a forecast of +5.1% and the January reading of +5.3%.  Meanwhile, February Personal Spending increased less than expected at +0.2%, versus a forecast of +0.3% and far below the January value of +2.0%.  So, the Fed’s favorite measure of inflation fell three-tenths of a percent while consumer outlays also did not increase as much as expected.  Both are what the Fed wants to see.  Still, it is worth bearing in mind that inflation is still 3% above the Fed target of 2.0%.  Later, the Chicago PMI came in above expectation at 43.8 (compared to a forecast of 43.4 and the February value of 43.6).  Then the Michigan Consumer Sentiment came in below expectations at 62.0 (versus a forecast of 63.2 and the February reading of 63.4). 

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In stock news, STLA announced Friday that it will be spending $3.14 billion to launch eight brands of vehicles (43 total models) as of 2025.  The company claims this to be a larger investment in that region than all competitors combined.  Meanwhile, Chinese electric car maker XPEV announced it will upgrade and expand its Advanced Driver Assistance system to be available all across China by 2024.  This might give XPEV an advantage over TSLA whose driver assist software only has limited availability in China.  (Perhaps unrelated, TSLA CEO Musk announced Friday he will be making a trip to China.)  Elsewhere, after the close, GM said it expects a number of its EV models (including Cadillac Lyriq, Chevy Equinox, and Chevy Blazer) to qualify for the full $7,500 tax credit.  (TSLA had said on Wednesday that its Model-3 will only qualify for partial credit and F will provide more guidance on that matter soon.)  On Sunday, TSLA announced they had delivered 422,875 cars in Q1.  This was a 36% increase compared to Q1-2022 and a 4% growth compared to Q4 2022.  However, this was almost 10,000 cars short of the average analyst estimate.

In stock legal and regulatory news, a CA judge ruled against AMZN in their bid to have a CA state antitrust lawsuit dismissed.  The suit accuses AMZN of illegally forcing merchants to accept policies that caused consumers to pay artificially inflated prices.  Meanwhile, a new racial bias lawsuit was filed against TSLA on Friday by a former worker who claims he was fired for pushing back against racist comments made by his supervisor.  (This is a second suit filed making this claim. In the earlier case, TSLA lost, but the case is being reheard after the plaintiff rejected an appeals court reduction of the jury award.)  Elsewhere, AAPL won its appeal against Britain’s antitrust regulator who wanted to launch an investigation of AAPL and GOOGL mobile browser market dominance.  Late in the day Friday, the CA, MD, NJ, and NC state Attorneys General joined the US Dept. of Justice lawsuit to block the JBLU acquisition of SAVE for $3.8 billion.  Separately, FL closed its probe into the deal aver JBLU and SAVE agreed to increase seat capacity in both Orlando and Ft. Lauderdale.  At the same time, the National Labor Relations Board announced it has found ATVI violated US Labor Laws by illegally spying on employees and threatening to shut down internal communications channels (chat and email) as workers sought to organize.  After the close, JNJ lost its bid to have its subsidiary stay in Bankruptcy (to avoid legal liability) while it waits on an appeal to the US Supreme Court.  Finally, AAPL convinced a US Appeals court to throw out a $502 million verdict for patent infringement against VirnetX.

In energy news, on Friday the Biden Administration auctioned off 73 million acres of drilling rights in the Gulf of Mexico. On Sunday, first came some good news, as Iraq and its Kurdish Regional Government agreed in principle to resume oil exports through Turkey.  This will increase global supply by one-half or one percent.  However, then in a surprise announcement, OPEC+ announced production cuts of about 1.2 million barrels per day (around 3.7% of global daily consumption).  The oil cartel expects to maintain this additional level of production cuts (3.2 million barrels per day in total) through the end of 2023.  The new cuts will begin in May and analysts predict it will cause a $10/barrel increase in oil prices.  All of this comes after oil posted a good week, but a bad month and a terrible quarter.  WTI was up 1.8% on the day Friday, up 9.2% for the week but was down 5% for the month of March and down 7.3% in Q1.  For its part, Natural Gas also had a strong day Friday, surging 5.3% on the day.  Still, it fell 6% on the week, lost 19% in March, and posted a historic record 50% loss in the first quarter. 

Overnight, Asian markets were mixed but leaned toward the green side.  Thailand (-0.55% paced the three losing exchanges while Shenzhen (+1.39%), Malaysia (+0.76%), and Shanghai (+0.72%) led the gainers.  Meanwhile, in Europe, a similar story is taking shape at midday.  The CAC (+0.40%), DAX (-0.04%), and FTSE (+0.73%) are typical and lead the region modestly higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed start to the day.  The DIA implies a +0.36% open, the SPY is implying a -0.09% open, and the QQQ implies a -0.66% open at this hour.  At the same time, 10-year bond yields are up to 3.505% and Oil (WTI) is skyrocketing (+0.608%) on the OPEC+ news to $80.27/barrel.

The major economic news events scheduled for Monday include Manufacturing PMI (9:45 am) and ISM Mfg. PMI (10 am).  The major earnings reports scheduled for the day include SAIC before the open.  Then after the close, there are no earnings reports scheduled.

In economic news later this week, on Tuesday we get February Factory Orders, Feb. JOLTs Job Openings, and the API Weekly Crude Oil Stocks Report. Then Wednesday, ADP March Nonfarm Employment Change, Feb. Imports/Exports, Feb. Trade Balance, March Service PMI, S&P March Global Composite PMI, March ISM Non-Mfg. PMI, and EIA Weekly Crude Oil Inventories are reported.  On Thursday, we get Weekly Initial Jobless Claims and Bank Reserve Balances with Federal Reserve Bank.  Finally, on Friday, US markets are closed but March Avg. Hourly Earnings, March Nonfarm Payrolls, March Participation Rate, March Private Nonfarm Payrolls, and the March Unemployment Rate are reported.

In terms of earnings, on Tuesday, AYI and MSM report.  Then Wednesday, we hear from CAG and SCHN.  On Thursday, LW, STZ, RPM, and LEVI report.  There are no reports scheduled for Friday.

On Sunday CNBC reported that EDR (the parent of the UFC) is very near a deal to acquire WWE (“professional wrestling”).  A deal may be announced as soon as Monday.  However, this morning, the deal is being characterized as a merger with EDR as the senior partner and its leader remaining CEO, while the current leader of UFC (Dana White) would continue to run UFC and the CEO of WWE (Vince McMahon) would continue to run WWE.  Elsewhere, a Swiss newspaper (Tages-Anzeiger) reported Sunday that the new bank created by the UBS acquisition of CS is set to cut 20%-30% if its workforce (11,000 jobs in Switzerland).  US jobs will also be affected, but no details were available.  Meanwhile, China urged Japan not to support the US chip and chip-making equipment embargo on China after Tokyo announced new restrictions Friday.  The new restrictions would prohibit Japanese companies from selling 23 types of chip-making equipment (but avoided naming China specifically).

The short week ahead contains three stories of major note on the political front. Ex-President Trump will be arraigned on 30 charges related to fraudulent bookkeeping on Tuesday. I’m sure there’s no chance that will be turned into a circus but, given what Trump has said/written pre-arraignment, there is always hope for a gag order from the judge. In addition, there are two elections of note Tuesday. The most important is the election of the swing vote to the Wisconsin Supreme Court. At stake will be redistricting and potential future “election was stolen” decisions in that purple (swing) state. It is worth noting that the two sides of this election have spent $40 million total…for the election of a state judge. The other election is the runoff for the new Chicago Mayoral race after the incumbent was defeated during the initial round of voting.

With that background, it looks like the markets are still digesting the OPEC+ surprise production cut (pseudo inflation hike). Tech holders seem nervous (and most impacted), the market-leading SPY appears unsure how that news shakes out, and the mega-cap DIA (secure in the ability to pass on price increases) look unimpressed by the new threat. Remember, today is the first day of the new quarter/month after what could easily be seen as a “Window Dressing” run the last three days of last week. So, it would be natural (and maybe even expected) that we see a pullback or at least consolidation to start April. Bullish overextension was also an issue as of Friday’s close. As a result, we should keep an eye open for bearish action this week.

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 at the open Thursday (up 0.66% in the SPY, up 0.54% in the DIA, and up 0.77% in the QQQ).  However, for the large-cap indices, this was a bull trap as the DIA immediately began selling and the SPY waited an hour and then began selling off.  Both maintained a steady bearish pace once the selling began.  For its part, the QQQ ground sideways and even had a slightly bullish trend until 11:15 am.  At that point, it too began a steady selloff.  DIA reached its low of the day (back below the Wednesday close) at 12:50 pm.  Meanwhile, SPY and QQQ reached their low (still in the gap) at 1:50 pm.   From that point, the bulls stepped in for a slow steady rally that lasted into the close.  This action gave us gap-up candles with the SPY and QQQ both printing Doji and the DIA printing a black-bodied Hanging Man candle.  DIA is also testing a resistance level.

On the day, nine of the 10 sectors were in the green with Consumer Cyclical (+0.97%) leading the way higher while Financial Services (-0.18%) lagged behind other sectors.  At the same time, the SPY gained 0.59%, the DIA gained 0.44%, and QQQ gained 0.95%.  VXX was dead flat at 45.11 and T2122 was also flat, staying in the overbought territory at 88.03. 10-year bond yields fell slightly to 3.553% while Oil (WTI) rose almost 2% to $74.39 per barrel.  So, on Thursday we saw signs of indecision with all three major indices giving us candles with a lot of wick and very little body.  We did move a little further from the T-line (8ema) and there are signs that the bulls are a little tired or at least tepid going into Friday (the last day of the month and quarter).  We also saw a divergence in volumes as DIA had very low volume, QQQ was close to average and SPY was in between the other two major indices.

In economic news, the Final Revision of Q4 GDP came in just shy of forecast at +2.6% (compared to a forecast of +2.7% and a Q3 reading of +3.2%).  At the same time, the Final Revision of Q4 GDP Price Index came in just as expected at +3.9% (versus the forecast of +3.9% and down from the Q3 reading of +4.4%).  So, this confirms that economic growth was slowing in Q4…especially when you consider the inflation factor was above the growth rate.  However, that inflation was also declining.  Both of these are what the Fed hopes to hear and wants to occur.  The only argument, then, is over how fast the slowing of growth and decreasing of inflation are happening.  Elsewhere, the Weekly Initial Jobless Claims were slightly above the forecasted value at 198k (versus an expected 196k and also above the prior week’s 191k reading).  Still, those layoffs are not high enough to significantly impact the labor market. 

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In stock news, on Thursday, VLCN announced it has launched two new models of electric motorcycle, one designed for on road and one for off-road driving.  In other electric vehicle news, F reopened order reservations for its F-150 Lightning trucks at a new $4,000 higher price ($20,000 higher than when the truck was launched in April 2022).  Meanwhile, a bi-partisan group of US Senators introduced a bill aimed at META, GOOGL, AMZN, and AAPL.  The bill would restrict companies selling more than $20 billion in digital advertising from owning more than one part of the stack of services that connect advertisers with the companies who have digital ad space for sale.  After the close, Reuters reported that BA will increase production of its 737 MAX to exceed the current 31 planes per month.  Elsewhere, JD announced after the close that it will spin off its property and industrial units and list those entities on the Hong Kong Stock Exchange.  This appeared to be a counter move to BABA (JD rival) plans to split into six businesses.  After the close, Reuters reported that TSLA “solar roof” installation target were only 2% of CEO Elon Musk’s goals.  (Musk’s 2021 forecast was for an average of 1,000 installations/week in 2021.  However, the 2022 average was only 21 installations per week.)  This miss was due to competitors getting the business.  Finally, after the close it was reported that VORB has failed to secure funding.  As a result, it will cease operations “for the foreseeable future” and will eliminate 85% (675) of the company’s positions.

In stock legal and regulatory news, META announced that beginning next Wednesday, it will allow European users to opt-out of targeted ads on its Facebook and Instagram services.  The move comes in the wake of the December EU privacy order that began fining META $423 million.  Elsewhere, a tech ethics group has asked the US FTC to stop OpenAI from issuing new commercial releases of its ChatGPT-4.  MSFT, which has closely integrated OpenAI into its product offerings, as well as other companies are expected to fight any such move by the FTC.  (A similar request is likely to follow for GOOGL’s Bard and other AI platforms.)  At the same time, the US Consumer Financial Protection Bureau has ruled that lenders must begin collecting demographic and geographic data on loans to small businesses.  The loan census data will be used to identify patterns of discrimination.  Meanwhile, WFC will pay another $98 million for poor oversight and failing to comply with US sanctions against Iran, Syria, and Sudan.  Late in the day, F withdrew its petition to the NHTSA which had sought approval to deploy 2,500 self-driving vehicles annually.  A similar petition from GM is still pending approval.  After the close, President Biden urged the Supreme Court to hear a case after the US Court of Appeals ruled TEVA had infringed a GSK patent by using a so-called “skinny label.”  If the case were heard and the ruling was in TEVA’s favor, generic drugs would likely be more widely available.

In energy news, Natural Gas continues its historic slide.  The front-month natty fell another 4% Thursday with the low of the day coming at $2.082/mmBtu.  This leaves natural gas at the lowest price since mid-July 2020.  And, unless there is a strong rally Friday, the first quarter will book more than a 50% decline in natural gas prices, which would be the largest quarterly drop in history.  Thursday’s move came after the EIA reported a weaker-than-forecasted drawdown of inventories.  The report cited a withdrawal of 47 billion cubic feet for the week (compared to a forecasted drawdown of 54 billion cubic feet).  This leaves inventories 31% higher than the same time in 2022 and up 21% from the 5-year average inventory.  Obviously, UNG reflects the same story, down 53% for the quarter as of Thursday’s close.

In miscellaneous news, the big story for Friday is likely to be ex-President Trump’s indictment by a New York Grand Jury.  This Grand Jury found Trump should stand trial on multiple charges, including at least one felony, related to fraudulent reporting of a hush money payment and it then being claimed as a legitimate business expense for tax purposes.  Apparently, surrender and arraignment has been negotiated to happen next week.  The other big non-economic news is also political but does involve a major corporation.  This one is the story of how DIS outwitted Florida Governor DeSantis’ (and that state’s GOP legislators’) move to punish the company for opposing Florida cultural issue legislation.  DIS, legitimately and in public session, made a minimum 30-year contract (which could actually extend more than 100 years) with the (old) board that governs the Reedy Creek district. (That district board has jurisdiction over Disney World and related properties.)  The contract gives DIS the exclusive right to decide on building high-density projects or buildings of any height or size or to assign those rights to anyone else DIS chooses.  It also bans the new board from using the Disney name or characters in any way (like advertising).  This contract was approved prior to the state taking over the district and DeSantis appointing his own new board.  As a result, the move takes away most of the power of the new board and makes the DeSantis power move largely irrelevant. Obviously, DeSantis and the Florida GOP are furious and threaten action. However, multiple legal experts have reported that the contract is legal and binding.

Overnight, Asian markets were heavily green.  Only New Zealand (-0.41%) and Malaysia (-0.14%) were in the red.  Meanwhile, India (+1.63%), South Korea (+0.97%), and Japan (+0.93%) led the rest of the region higher.  In Europe, we see the same picture taking shape at midday.  Only Russia (-1.37%) and Denmark (-0.19%) are in the red.  Meanwhile, the CAC (+0.56%), DAX (+0.42%), and FTSE (+0.20%) lead the region higher in early afternoon trade.  In the US, as of 7:30 am, Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.21% open, the SPY is implying a +0.18% open, while the QQQ implies a dead flat open at this point.  At the same time, 10-year bond yields are lower to 3.543% and Oil (WTI) is up more than three-quarters of a percent to $74.96 in early trading.

The major economic news events scheduled for Friday include Feb. PCE Price Index, and Feb. Personal Spending (bot hat 8:30 am), Chicago PMI (9:45 am), and Michigan Consumer Sentiment (10 am).  We’ll also hear from Fed Member Williams at 3:05 pm.  There are no major earnings reports scheduled for the day.

With that background, it looks like the markets are waiting on the Fed’s favorite inflation measure at 8:30 am. As of now, all three major indices are just on the bullish side of flat with 100 minutes left before the open. With today being month and quarter end, there may be some more window dressing activity. Also bear in mind that next week is a short week (Markets are closed Friday for “Good Friday”). Overextension is not a huge issue, but we are getting a little far from the T-line (8ema) and T2122 also shows markets a bit stretched. With the big legal news and so many people who feel they will need to weigh in on the topics, we might see a sleepy day in the market. However, that PCE Inflation gauge and quarter end are likely to call the market tune today.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Wednesday, the bulls were in charge from the opening bell, perhaps on upbeat guidance from LULU and MU.  SPY gapped 1.05% higher, DIA gapped 0.85% higher, and QQQ gapped 1.23% higher at the open.  From that point, SPY and QQQ ground sideways in a tight range until 2:30 pm.  Meanwhile, DIA traded down (back into the gap) and then sideways until 2:30 pm.  However, then a mild rally all the way into the close took all three major indices out on their highs. This action gave us Morning Star-type signals in the SPY and QQQ with both printing white, larger-body, smaller wick candles.  However, the DIA printed a white-bodied, potential Hangman (or Hammer if viewed through bullish glasses).  Once again this happened on lower-than-average volume (much lower in the DIA).

On the day, all 10 sectors were in the green with Technology (+2.10%) leading the way higher while Consumer Defensive (+0.64%) lagged behind other sectors.  At the same time, the SPY gained 1.43%, the DIA gained 1.01%, and QQQ gained 1.82%.  VXX fell 3.28% to 45.11 and T2122 climbed into the overbought territory at 88.12. 10-year bond yields fell slightly to 3.564% while Oil (WTI) fell 0.57% to $72.80 per barrel.  So, hump day gave us a strong start to the day, probably on easing concerns over the banking sector.  Then traders played the “wait and see” card until the afternoon when the last 90 minutes saw a modest but steady rally into the close.  SPY did break its downtrend line (going back to the beginning of February) and crossed just above its 50sma.  DIA also crossed just up through its downtrend (also going back to the start of February).

In economic news, February Pending Home Sales came in much better than expected at +0.8% (compared to a forecast of -2.3% but far below January’s blowout reading of +8.1%).  Later in the morning, the EIA Weekly Crude Oil Inventories report gave us a significant drawdown versus the expectation.  Oil inventories fell 7.489 million barrels (versus a forecasted build of 0.092 million barrels and the prior week’s build of 1.117 million barrels.  On the gasoline front, inventories saw a 2.904-million-barrel drawdown (compared to the forecasted drop of 1.625 million barrels and the prior week’s 6.4-million-barrel decline).  In terms of distillates (diesel and heating oil), there was a 281,000-barrel inventor build (versus a forecast of a 1.455-million-barrel decline and the prior week’s 3.313-million-barrel drawdown).

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In stock news, Reuters reported that ICUI has teamed up with a private equity firm to bid against the GEHC and CG in an effort to acquire the medical technology business of MDT.  Elsewhere, UAL CEO Kirby announced the airline had reached an agreement in principle with 30,000 union ground workers for a new two-year contract. At the same time, WMG announced it will lay off 4% of its workforce (only about 270 people) and will cut discretionary spending in the near future.  Meanwhile, the US GSA announced it has awarded BLNK a “Multiple Award Schedule” contract which allows federal agencies to easily purchase BLNK equipment.  At mid-afternoon, M announced it has named Tony Spring (of Bloomingdale’s) as its new President and “CEO in waiting” one day after current CEO Gennette said he would retire in February of next year.  Later, Reuters reported that BAC’s digital personal finance tool (Life Plan) has attracted more than $55 billion in new accounts since it was launched in late 2020.  Meanwhile, DIS announced it has laid off the Chairman of its Marvel Entertainment unit, Ike Perlmutter.  (It is worth noting that Perlmutter had supported activist investor Nelson Peltz’s bid to get a DIS board seat and oppose the reinstatement of DIS CEO Iger.)  In “taking the negotiations public” news, Ryanair confirmed that it is in negotiations with BA over an order of at least 100 jets with the option for 100 more…but that significant discounts needed to be brought to the table to clinch the order.  (Ryanair is one of BA’s largest customers, alongside LUV, and can demand the best pricing.)  Finally, after the close, EA announced it will cut approximately 6% of its workforce as part of a restructuring.

In stock legal and regulatory news, it was announced that FNF will pay the State of NY $3.5 million for anti-competitive agreements that the company had entered into with its competitors in order to avoid competition.  FNF also agreed to end all such “no poach” agreements.  (NY had already reached similar agreements with FNF competitors STC and ORI since late 2021.)  Elsewhere, Britain announced it will “investigate in depth” the $61 billion acquisition of VMW by AVGO.  The announcement said this was after AVGO failed to engage with the UK government after the Brits had published its concerns.  The investigation can take up to six months.  Meanwhile, Bloomberg reports that the FDIC is considering passing a greater share of the $23 billion bank failure costs onto the largest US banks.  While the final decision will not be made until May, this could have significant impacts on BAC, C, JPM, and WFC (each of which may face a multi-billion charge).  At the same time, the state of CA began regulating how much profit oil refiners in the state can make as of Wednesday.  CVX is the largest refiner in that state and PBF has the largest exposure to CA refining with 32% of its refineries located in CA.  After the close, a federal judge ruled that RMAX (as well as other real estate brokerages and the National Assn. of Realtors) must face a class action lawsuit over allegations of conspiring to inflate commission rates in Texas, Florida, New Jersey, Ohio, Pennsylvania, Virginia, North Carolina, and Colorado.

After the close, CNXC beat on revenue while missing on earnings.  Unfortunately, RH and FUL missed on both the revenue and earnings lines.  It is worth noting that RH also lowered its forward guidance.

Overnight, Asian markets leaned heavily to the green side.  Japan (-0.36%), Thailand (-0.32%) and Singapore (-0.26%) were the only red in the region.  Meanwhile, New Zealand (+1.67%), Australia (+1.02%) and Shanghai (+0.65%) led most of Asia higher.  In Europe, we find green across the board at midday.  The CAC (+1.37%), DAX (+1.27%), and FTSE (+0.94%) are leading the region higher in early afternoon trade.  On this side of the pond, as of 7:30 am, US Futures are pointing toward another gap higher to start the day.  The DIA implies a +0.64% open, the SPY is implying a +0.60% open, and the QQQ implies a +0.54% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.556% and Oil (WTI) is up 0.93% to $73.64/barrel in early trading.

The major economic news events scheduled for Thursday include Q4 GDP, Q4 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am) as well as Bank Reserve Balances with Fed (4:30 pm).  However, Treasury Sec. Yellen also speaks at 3:45 pm.  There are no major earnings reports scheduled for the day.

In economic news later this week, on Friday, Feb. PCE Price Index, Feb. Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported as well as Fed Member Williams speaking.  In terms of earnings, there are no major earnings reports scheduled for Friday.

In late-breaking news, Russia has detained a journalist from the Wall Street Journal, alleging suspicion of espionage.  This is undoubtedly just another Russian negotiating tactic as with the American women’s basketball player (Griner) arrested last year.  Still, the move will ratchet up tensions between the US and the former superpower Russia.  Elsewhere, AAPL announced its Worldwide Developer’s Conference (where it usually unveils new products) is set for June 5-9.  This year, in addition to new phones, etc. the tech giant is expected to also unveil a new augmented reality headset.  In oil news, Bloomberg reports that slowly disappearing supplies of Brent has forced S&P to make a huge change.  As of June, the world benchmark oil price will be a combination of oil contracts that will include West Texas Intermediate at Midland TX (Permian Basin oil).  Finally, various sources report that, after another failed test, the $1.1 billion LMT hypersonic missile program will be shut down in favor of a program from RTX. 

With that background, it looks like the bulls will be gapping markets higher again at the open. (At least it does ahead of the morning data dump.) We should also look out for potential window dressing as we come into the end of the quarter Friday. In fact, some would explain Wednesday’s rally as just part of that dressing. The SPY is looking to gap open above its 50sma after ending yesterday just above following an all-day retest from below. QQQ will be retesting a potential that can be seen dating back to at least late April ’22. DIA is not there yet but is getting closer to its 50sma from below. All three major indices are in an uptrend now having broken the mid-term downtrend lines and working on higher highs and higher lows. However, be careful insofar as price has not put in a higher low or successful retest above those broken lines. Overextension is not an issue in any of the big indices in terms of the T-line (8ema), but T2122 indicates we are a bit stretched according to that indicator. Treasury Sec. Yellen speaks late in the day, but if her remarks are released early, they could impact markets (especially the banking sector). However, it is more likely that if markets are news-driven today it will come from the GDSP, GDP Price Index, and Jobless Claims data at 8:30 am. Be careful not to chase, don’t expect immediate follow-through, and make sure your stops and exits are planned before you enter.

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened just on the red side of flat (down 0.15% in the SPY, down 0.12% in the DIA, and down 0.18% in the QQQ).  From that point, we saw a divergence in the three major indices as immediately headed South, continuing its fall until 11 am, when it began to grind sideways along the lows until 1:30 pm.  Meanwhile, the SPY meandered sideways from the open until noon, when it began a modest selloff that lasted until 2 pm.  For its part, DIA actually rallied from the open until 10:15 am and then ground sideways (to slightly lower) at noon.  At that point, it too began a modest selloff that lasted until 2 pm.  From 2 pm into the close, all three major indices put in a very steady and modest rally.  This action gave us indecisive candles in all three, with the SPY and DIA printing Doji that held above their T-lines and the QQQ printing a black-bodied Hammer candle that also held its T-line.

On the day, eight of the 10 sectors were in the green with Energy (+1.65%) once again leading the way higher while Technology (-0.58%) again lagged behind other sectors.  At the same time, the SPY lost 0.22%, the DIA lost 0.15%, and QQQ lost 0.53%.  VXX fell almost 3% to 46.64 and T2122 fell back some but remained in the mid-range at 60.24.  10-year bond yields climbed again to 3.571% as money left bonds while Oil (WTI) rose three-quarters of a percent to $73.36 per barrel.  So, Tuesday gave us a mixed morning with the three major indices getting in step during the afternoon to basically go nowhere.  Indecision abounded is about as much as you can say. This all happened on significantly lower-than-average volume.

In economic news, the February Goods Trade Balance came in just slightly worse than expected at -$91.63 billion (compared to a forecast of -$91.00 billion and a January value of -$91.09 billion).  The primary cause for this was a decline in exports as Imports came in increased.  At the same time, February Retail Inventories (ex-Auto) rose 0.4%, which was up from the January increase of +0.1%.  Later in the morning, the Conference Board Consumer Confidence survey found a more optimistic consumer than had been expected.  The reading came in at 104.2, compared to a forecast of 101.0 and a February reading of 103.4.  Later, after the close, the API Weekly Crude Oil Stocks Report showed a much greater than expected drawdown of 6.076 million barrels (versus the forecast of an inventory build of 0.187 million barrels and the prior week’s 3.262-million-barrel build).

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In stock news, AAPL announced its own “buy now, pay later” program imaginatively name “Pay Later.”  The service is enabled through payments made via MA on loans of $50 – $1,000 which are paid in four installments.  The main company in that “buy now, pay later” space (AFRM) fell 8% Tuesday on the news.  Still, AAPL is not the only company reaching into the loan business as PYPL recently did the same thing. AAPL is not even the only retailer to do so as WMT launched the same type of program in December. Meanwhile, the incoming LYFT CEO Risher (who takes over April 17) said Tuesday that the company is not for sale, which runs contrary to Wall Street expectations.  LYFT fell 7.6% on this news.  Elsewhere, AMC shares jumped Tuesday on a report stating that AMZN is considering acquiring the theatre chain.  At the same time, FCNCA shares hit an all-time high Tuesday in follow-through to the Monday acquisition of SIVB assets at a bargain price.   Late in the afternoon, MSFT announced a new cybersecurity product named “Security Co-Pilot” that uses the OpenAI ChatGPT-4 to help identify breaches and potential vulnerabilities by analyzing data.  After the close, LCID said it will lay off 18% of its workforce (about 1,300 employees) to cut costs as part of its restructuring plan. 

In stock legal and regulatory news, the NHTSA opened an investigation into 50,000 TSLA 2022-2023 Model X vehicles after receiving complaints about seat belt failures.  Meanwhile, in Europe, French and German authorities raided the offices of five banks (including HSBC, SCGLY, and BNPQY) over allegations of dividend stripping fraud where the banks and investors quickly trade shares of companies going ex-dividend in order to obscure ownership and allow them to avoid paying taxes on the dividends.  (This was just the kind of headlines the banking sector needed, given the recent industry news.)  Back on this side of the pond, the US EEOC sued WMT Tuesday claiming it had violated the Americans with Disabilities Act when it fired a North Carolina worker.  In Nevada, lawyers for CZR, WYNN, and MGM asked a US judge to dismiss a case that included all the major Las Vegas hotels as well as their software providers and alleged the group was fixing prices on hotel rooms in the city.  In Brazil, META and GOOGL defended (themselves and) a Brazilian law in front of that country’s Supreme Court.  The law in question is very similar to the infamous Section 230 in the US in that it holds that internet platforms are not responsible for the content posted by their users.  After the close, a federal judge ruled in favor of the US Dept. of Justice saying that GOOGL failed to preserve company chat messages related to an antitrust case and that this breach “merits sanctions.”  Finally, CNBC reported that DG is in settlement talks with OSHA after the company was labeled a “severe violator” of workplace safety laws.

After the close, LULU, JEF, CALM, and PLAY all reported beats on both the revenue and earnings lines.  Meanwhile, MU missed on both the top and bottom lines.  It is worth noting that MU lowered its forward guidance after a massive downside earnings surprise (-$2.03/share versus -0.80/share expected).  However, LULU raised its own forward guidance.

Overnight, Asian markets were mostly green.  Only New Zealand (-0.29%) and Shanghai (-0.16%) were in the red. Meanwhile, Hong Kong (+2.06%), Japan (+1.33%), and Malaysia (+0.80%) led the rest of the region higher.  In Europe, we see green across the board at midday.  The CAC (+1.24%), DAX (+0.91%), and FTSE (+0.82%) are leading the region higher in early afternoon trade.  In the US, as of 7:30 am, the Futures are pointing toward a bullish start to the day.  The DIA implies a +0.73% open, the SPY is implying a +0.85% open, and the QQQ implies a +0.84% open at this hour.  At the same time, 10-year bond yields are down a bit to 3.558% and Oil (WTI) is up 1.04% to $73.96/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to February Pending Home Sales (10 am) and EIA Weekly Crude Oil Inventories (10:30 am).  Fed Vice Chair for Bank Supervision Barr also testifies again at 10 am.  The major earnings reports scheduled for the day are limited to CTAS, PAYX, and UNF before the opening bell.  Then after the close, CNXC, FUL, and RH report.

In economic news later this week, on Thursday, we get Q4 GDP, Q4 GDP Price Index, Weekly Initial Jobless Claims, and Treasury Sec. Yellen speaks.  Finally, on Friday, Feb. PCE Price Index, Feb. Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported as well as Fed Member Williams speaking.

In economic news later this week, on Wednesday, Feb. Pending Home Sales and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get Q4 GDP, Q4 GDP Price Index, Weekly Initial Jobless Claims, and Treasury Sec. Yellen speaks.  Finally, on Friday, Feb. PCE Price Index, Feb. Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported as well as Fed Member Williams speaking.

In earnings later this week, on Thursday and Friday, there are no major earnings reports scheduled.

So far this morning, there have been no major reports.  UNF is scheduled to report at 8:10 am.  Then, CTAS and PAYX are scheduled to report at 8:30 am.

In late-breaking news, the CEO of M, who has been leading the company’s turnaround effort, announced he will retire early next year.  Elsewhere, whistleblowers from failed CS reported that prior to its failure, the bank was once again helping rich Americans dodge taxes.  (In 2014, CS pleaded guilty to criminal charges for “knowingly and willfully” helping wealthy US clients hide assets offshore to avoid taxes.)  The report, released by the US Senate, said the investigation took place over two years and that the illegal activity was still ongoing.  CNBC reports that it is unclear at this point how much liability UBS will face for its newly acquired CS having violated its 2014 plea deal or current ongoing efforts to defraud the US government by hiding taxable assets for US clients.

With that background, it looks like the bulls will be gapping markets higher at the open. The SPY is starting to get closer to its 50sma from below and may move for a retest if there is some follow-through to the opening gap. DIA is also retesting the downtrend line stretching back to mid-February in premarket trading. All three of the major indices are above their T-line (8ema). However, overextension is not an issue in any of the big indices, nor does the T2122 indicator look stretched. Again, the economic news scheduled for today is not likely to be market-moving today. With that said, it is possible some news about the banking sector with another day of grilling for regulators (this time from the House) and the story on CS helping Americans cheat on taxes in the headlines this morning. Either way, the market remains very choppy with a bullish lean (over the last couple of weeks but certainly not a longer timeframe) in all three major indices (especially the QQQ).

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

See you in the trading room.

Ed

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Monday, markets gapped higher at the open (up 0.60% in the SPY, up 0.69% in the DIA, but up only 0.21% in the QQQ).  After 20 minutes of meandering sideways around the opening level, all three major indices began to selloff.  DIA pulled back the least, stopping its descent at about 11:20 am.  Meanwhile, the SPY reached its lows (at the Friday closing level) shortly after noon.  At the same time, QQQ sold off the most reaching its lows at about 12:10 pm.  From these lows, the SPY and QQQ have put in a very slow, almost sideways, climb, regaining a fraction of the ground lost during the morning selloff by the highs, which were reached at about 3 pm.  For its part, DIA did the same very slow climb but having lost the least was able to regain its opening level.  Again, DIA reached its highs of the day just after 3 pm.  This action gave us indecisive candles across all three major indices.  The SPY printed a black-bodied Spinning Top, the DIA printed a black-bodied Doji, and the QQQ printed a black-bodied Bearish Engulfing Candle with wicks on both ends.

On the day, nine of the 10 sectors were in the green with Energy (+2.33%) leading the way higher while Technology (-0.44%) lagged behind the other sectors.  At the same time, the SPY gained 0.19%, the DIA gained 0.65%, and QQQ lost 0.69%.  VXX fell more than 3.5% to 47.97 and T2122 climbed up to the top end of the mid-range (just outside of overbought territory) at 76.12. 10-year bond yields spiked to 3.541% on the day while Oil (WTI) skyrocketed 5.43% to $73.02 per barrel.  Monday saw a gap higher as banking fears quieted down.  However, after the open, action was very indecisive and even leaned bearish (especially in the tech-heavy QQQ that has led the market for some time now).   This all happened on lower-than-average volume (much lower in the SPY and QQQ).

In stock news, CRM announced it has reached a deal with activist investor Elliott Management, which will avoid a proxy fight.  The move came after CRM disbanded its mergers and acquisitions committee, reported stronger-than-expected results, said it will double buybacks and promised more headcount reductions.  Then, at midday, DIS said it will begin the first of three rounds of layoffs (totaling 7,000 job cuts announced in February) this week.  Meanwhile, LCID announced it is recalling 637 of its 2022-2023 vehicles due to electrical problems that could result in a loss of power while driving.  (LCID delivered only 4,494 vehicles as of the end of last year.  So, this is a significant portion of LCID production.)  In other electric vehicle news, LICY announced it will open a new facility to break down (recycle Lithium) batteries in France in 2024.  The project will be similar to plants LICY already has under construction in Germany and Norway.  Meanwhile, CVS said late Monday that it expects to close its $8 billion acquisition of SGFY this week.  (This likely means CVS has gotten past antitrust scrutiny and approvals.)   Elsewhere, after hours, AMTI cut 57% of its workforce and has begun exploring strategic alternatives.  At the same time, PINS announced a restructuring plan which includes the roughly a 4% workforce reduction announced in February.  The announced plan includes subleasing leased office space in San Francisco.  Finally, the Wall Street Journal reported that LYFT announced it has named David Risher (former AMZN and MSFT executive) as CEO beginning April 17.

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In stock legal and regulatory news, RACE hailed a deal, between Germany and the EU, which will allow small-volume manufacturers like RACE to continue producing internal combustion engine vehicles beyond 2035 as long as they can be run on “carbon-neutral e-fuels.”  (Exactly what constitutes a “carbon-neutral e-fuel” was not explained.)  Elsewhere, the US Supreme Court declined to hear an appeal that was a challenge on US steel import tariffs.  This leaves the 25% tariffs on European steel in place and was a loss for DORM and several other Turkish steel importers who were the plaintiffs.  Meanwhile, AMZN lost its bid to avoid a class-action consumer lawsuit (damages are estimated between $55 billion and $172 billion) filed by residents of 18 states over pricing policies.  Later in the day, it came out that the FDIC will backstop the deal whereby FCNCA will acquire much of SIVB assets.  The FDIC will provide FCNCA with a line of credit.  At the same time, the former TSLA employee who had their $137 million racial bias verdict reduced by an appeals court has filed suit again rather than accept the $15 million reduced amount.  The new trial begins this week.  In other legal news, the newly-fired FOX News producer is recanting her testimony supporting FOX in the $1.6 billion defamation case filed against FOX by Dominion Voting Systems.  That same former employee filed amended discrimination and retaliation lawsuits against FOX as well.

In cryptocurrency news, COIN is waiting on the filing of a lawsuit and charges by the SEC (claiming the company sold unregistered securities) which were announced via the receipt of a Wells Notice letter last week.  However, Binance (the world’s largest cryptocurrency exchange) and its CEO Changpeng Zhao will be the first crypto exchange to be tested by the US government.  The US Commodity Futures Trading Commission (CFTC) filed suit against Binance over regulatory violations on Monday.  (Binance recently made news when its due diligence prior to a proposed white knight acquisition turned up the fraud and mismanagement at now-defunct FTX.

In energy news, the major cause behind Oil’s huge rise Monday came from a halt to exports from Iraq’s Kurdistan region.  Turkey stopped pumping Iraqi oil following its loss of an arbitration case confirming that Bagdad’s approval was required for the shipping of Kurdish oil.  This instantly dropped global oil supplies by 450,000 barrels per day.  Adding to the pain, Russia was quick to announce “it is close to achieving its goal of cutting production 500,000 barrels per day (down to 9.5 million barrels per day produced).

After the close, PVH and EE reported beats on both the revenue and earnings lines.  PVH also raised its forward guidance.

Overnight, Asian markets were mostly green.  New Zealand (+1.36%), Hong Kong (+1.11%), and South Korea (+1.07%) led the broad-based rally.  Meanwhile, Taiwan (-0.81%), Shenzhen (-0.72%), and India (-0.20%) paced the losses.  In Europe, we see a similar picture taking shape at midday with an even split of red and green among the bourses.  The CAC (+0.01%), DAX (+0.06%), and FTSE (+0.07%) lead as always on market size.  However, Greece (-1.22%), Denmark (-0.39%), and Belgium (-0.36%) pace the losses.  On this side of the pond, US Futures are pointing toward a start to the day just on the red side of flat.  The DIA implies a -0.02% open, the SPY is implying a -0.10% open, and the QQQ implies a -0.15% open at this hour.  At the same time, 10-year bond yields are rising again to 3.568% as money leave bonds early and Oil (WTI) is on the green side of flat at $72.89/barrel in early trading.

The major economic news events scheduled for Tuesday include Feb. Trade Goods Balance and Feb. Retail Inventories (both at 8:30 am), Conference Board Consumer Confidence (10 am), and the API Weekly Crude Oil Stocks report (4:30 pm).  Fed Vice Chair for Bank Supervision Barr, FDIC Chair Gruenberg, and Treasury Department Undersecretary Liang are also scheduled to testify to (be grilled by) the House at 10 am.  The major earnings reports scheduled for the day are limited to CNM, ESLT, IHS, MKC, SNX, and WBA before the opening bell.  Then after the close, CALM, PLAY, JEF, LULU, and MU report.

In economic news later this week, on Wednesday, Feb. Pending Home Sales and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get Q4 GDP, Q4 GDP Price Index, Weekly Initial Jobless Claims, and Treasury Sec. Yellen speaks.  Finally, on Friday, Feb. PCE Price Index, Feb. Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported as well as Fed Member Williams speaking.

In earnings later this week, on Wednesday, we hear from CTAS, PAYX, UNF, CNXC, FUL, and RH.  On Thursday and Friday, there are no major earnings reports scheduled.

So far this morning, WBA, MKC, and HIS have reported beats on the revenue and earnings lines.  Meanwhile, ESLT beat on revenue while missing on earnings.  On the other side, CNM reported inline on revenue while missing on earnings.  (SNX reports later in the premarket).  It is worth noting that HIS raised its forward guidance.

In late-breaking news, BABA founder Jack Ma returned to China Monday (after more than a year abroad) in what many saw as a potential sign that President Jinping may be softening his stance on the technology sector.  Then overnight it was announced that BABA will split into six different business units, each with its own CEO and board as well as its own ability to raise outside funding and go public.  Ma will not be CEO of any of the units, but his return to China is perceived as the blessing of the move by the government.  BABA shares were up almost 9% in premarket on the news.  Elsewhere, Bloomberg reports SCHW has more than $29 billion in unrealized, long-dated bond losses on its books (as of year-end).  In addition, the report said higher interest rates are starting to cause its customers to move money out of SCHW and into money-market vehicles.

With that background, it looks like the markets are in a “wait and see” mood this morning. All three of the major indices sit just above their T-line (8ema) with DIA and SPY also sitting just above the 17ema. DIA also sits just atop its 200sma. So, overextension is not an issue in any of the big indices, nor does the T2122 indicator look stretched. The economic news scheduled is not likely to be market-moving today. However, it is possible some news about the banking sector will come from the (mostly political) grilling of regulators by the House today. The market remains very choppy with a bullish lean in the SPY, a full-blown bullish trend in the QQQ, and much more of an undecided feel to the DIA.

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 modestly on Friday (down 0.34% in the SPY, down 0.43% in the DIA, and down 0.21% in the QQQ).  This came as DB had put a shock into markets globally on default risks.   After that open, all three major indices wandered around the open level for 90 minutes.  However, about 11:15 am, the bulls stepped in to lead a long, steady rally that lasted the rest of the day, closing very near the highs.  This action gave us white-bodied candles with larger lower wicks, including a Hammer in the QQQ.  This happened on slightly less than average volume on SPY and QQQ as well as a bit heavier than average volume in the DIA.

On the day, eight of the 10 sectors were in the green with Utilities (+2.83%) leading the way higher while Technology (-0.26%) lagging behind the other sectors.  At the same time, the SPY gained 0.64%, the DIA gained 0.44%, and QQQ gained 0.37%.  VXX fell more than 4% to 49.74 and T2122 climbed up out of the oversold territory into the mid-range at 31.67. 10-year bond yields dropped again to 3.374% while Oil (WTI) fell 1% to $69.20 per barrel.  So, Friday saw a gap down, about 1.5 hours of reconsideration, and then a modest rally that lasted the entire rest of the day.

In economic news, February Durable Goods Orders came in lower than expectations at -1.0% month-on-month (compared to a forecast of +0.6% but far better than the January reading of -5.0%).  Later in the morning, Manufacturing PMI was reported to be above the forecast at 49.3 (versus an expected 47.0 and February’s 47.3 value).  The Services PMI also beat expectations at 53.8 (compared to a forecast of 50.5 and even compared to the February reading of 50.6).  At the same time, the S&P Global Composite PMI also beat expectations with a value of 53.3 (versus the forecast of 47.5 and the February value of 50.1).  In Fed talk, St. Louis Fed Pres. Bullard (uber hawk) largely stuck to his guns, telling reporters that the Fed policy rate will likely need to continue rising to higher-than-expected levels once the banking sector stress eases.  (Bullard’s terminal rate forecast is a half percent higher than most Fed members at 5.50% – 5.75%.)  Later, Richmond Fed President Barkin (also a hawk) told CNN that he had no second thoughts on the Fed’s 25-basis-point hike Wednesday.  He went on to say that by the time the FOMC voted, the banking system “felt very stable…So, the conditions were right to do monetary policy the way we want to…”  Meanwhile, Atlanta Fed President Bostic (neutral to dovish) told NPR that “There was a lot of debate.  This wasn’t a straightforward decision, but at the end of the day, we decided there were clear signs that the banking system is sound…(and) inflation is still too high.”

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In stock news, TSLA rolled out version 2.0 of its Full Self-Driving software that makes the feature only available to drivers who achieve a 100/100 safety score (as scored by TSLA sensors and other proprietary factors).  In other auto news, F announced its new Tennessee factory (BlueOval City) is scheduled to build 500k electric vehicles per year.  This is part of the F plan to be producing 2 million electric vehicles per year by 2026.  The BlueOval plant will begin production in the fall of 2025.  Elsewhere, the Wall Street Journal reported that MO is considering expansion of its non-nicotine product lines over the next 12 months.  At the same time, AAL said it would suspend its Philadelphia to Madrid route for about a month (in May to June) due to delivery delays of BA 787 Dreamliner jets.  Over the weekend, according to the Financial Times, the CEOs from PG, PFE, and AAPL are among the very few US-listed company leaders to attend the Chinese Development Forum in Beijing.

In stock legal and regulatory news, late in the day Friday, the US FDA approved a PHAR treatment for weakened immune systems.  (PHAR jumped 22% on the news.)  Meanwhile, Reuters reported that the US Dept. of Justice (and outside lawyers) are investigating TSN over the antitrust law aspects of its announced closure of a Virginia Chicken processing plant.  TSN gave suppliers two months’ notice while antitrust and the Packers and Stockyards Act laws require 90 days’ notice.  Elsewhere, FRBK said Friday that it expects to file its annual report with the SEC much later than the March 30 deadline.  The bank hopes to report by May 1.  The US Dept. of Transportation has rejected an application from JBLU and SAVE that the two be allowed to operate under common ownership.  The DOT cited the pending US Dept. of Justice lawsuit seeking to block the acquisition.

Overnight, Asian markets were mixed.  Hong Kong (-1.75%) was by far the biggest mover with Taiwan (-0.53%) and Shanghai (-0.44%) rounding out the group that paced the losers.  Meanwhile, Singapore (+0.82%), Japan (+0.33%), and New Zealand (+0.28%) led the gainers.  However, in Europe, the bourses are strongly green across the board at midday.  The DAX (+1.40%), CAC (+1.17%), and FTSE (+0.98%) are leading the region higher in early afternoon trade.  As of 7:45 am, US Futures are pointing toward a gap higher to start the day.  The DIA implies a +0.66% open, the SPY is implying a +0.67% open, and the QQQ implies a +0.39% open at this hour.  At the same time, 10-year bond yields are higher to 3.466% and Oil (WTI) is up 1.3% to $70.15/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day are limited to BTNX and CCL before the opening bell.  Then after the close, PVH reports. 

In economic news later this week, on Tuesday, we get Feb. Trade Goods Balance, Feb. Retail Inventories, Conf. Board Consumer Confidence, and the API Weekly Crude Oil Stocks report.  Then Wednesday, Feb. Pending Home Sales and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get Q4 GDP, Q4 GDP Price Index, Weekly Initial Jobless Claims, and Treasury Sec. Yellen speaks.  Finally, on Friday, Feb. PCE Price Index, Feb. Personal Spending, Chicago PMI, and Michigan Consumer Sentiment are reported as well as Fed Member Williams speaking.

In earnings later this week, on Tuesday, CNM, ESLT, IHS, MKC, SNX, WBA, CALM, PLAY, JEF, LULU, and MU report.  Then Wednesday, we hear from CTAS, PAYX, UNF, CNXC, FUL, and RH.  On Thursday and Friday, there are no major earnings reports scheduled.

In late-breaking news, the fallout from the banking crisis continues.  In the US, FCNCA announced it has reached a deal to acquire the deposits and loans of SIVB from the FDIC.  The deal includes $72 billion in assets acquired at a discounted price of $16.5 billion. In Europe, the top managers of CS are facing an investigation and potential disciplinary action from the Swiss Banking Regulator.  Meanwhile, in the Persian Gulf, the head of the Saudi National Bank (whose public refusal to buy more of CS caused that bank’s depositor run) has resigned “for personal reasons.”  Elsewhere, the UAW has elected a reformer as union President.  This may mean trouble for automakers as the new President ran on promises to take tougher negotiating stances in upcoming negotiations.

With that background, it looks like the bulls are going to gap the major indices (large caps) back up above their T-line (8ema). The DIA will also be retesting its 200sma from below at the open. Overextension from the T-line is not an issue in any of the big indices, nor is the T2122 which is back in its mid-range. With no economic news scheduled, the FOMC decision off the table, and banking problems somewhat subsiding, I suspect that the bulls will have a little room to run this morning. This doesn’t necessarily mean any market trend change. It just means the bulls have momentum in the premarket and there is no known obstacle to them stretching their legs in the short-term.

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 Thursday, markets gapped higher to differing degrees (up 0.74% in the SPY, up only 0.37% in the DIA, and up 1.24% in the QQQ).  All three major indices then went on a bullish run, reaching the highs of the day at about 11:10 am.  However, then the bears took over selling off the SPY, DIA and QQQ at an increasing tempo that reached the lows of the day at 3 pm.  The last hour saw a volatile bounce up off the lows that took all three back up to the opening level by the close.  This action gave us gap-up indecisive candles (Doji in the QQQ and DIA as well as a black-bodied Spinning Top in the SPY).  This happened on greater-than-average volume in all three of the indices.

On the day, six of the 10 sectors were in the red with Energy (-1.51%) leading the way lower while Technology (+1.50%) fairing much better than the other sectors.  At the same time, the SPY gained 0.26%, the DIA gained 0.21%, and QQQ gained 1.19%.  VXX climbed 2.67% to 51.89 and T2122 remained well into the oversold territory at 7.94. 10-year bond yields dropped again to 3.412% while Oil (WTI) fell 2.3% to $69.26 per barrel.  So, Thursday saw a major divergence with much money chasing the safety of bonds while at the other end of the spectrum high tech names like NFLX, MU, MRVL, and others leading the QQQ higher.

In economic news, Building Permits came in a bit above expectation at 1.550 million (compared to a forecast of 1.524 million and the prior month’s value of 1.339 million).  This amounted to a 15.1% month-on-month increase (compared to a forecasted 13.8% increase).  Elsewhere, the Q4 Current Account (Imports minus Exports) came in a bit better than expected at -$206.8 billion (versus a forecast of -$213.2 billion and the Q3 reading of -$219.0 billion).  Later, February New Home Sales were reported slightly lower than expected at 640k (compared to a forecast of 650k but slightly better than the January value of 633k).  During the afternoon, Treasury Sec. Yellen told the House Appropriations Committee that she expects inflation to eventually come down as both supply chain pressures (shortages) and shipping costs continue to fall.  She also said a default on US debt would undermine the US dollar’s reserve currency status as well as lead to a recession or worse.  Finally, Yellen said that the FDIC is prepared for more actions to protect depositors if needed according to Bloomberg.

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In stock news, BLK doubled down on the ESG topic Thursday when it said it would continue to push companies on how they treat “material” climate-related risks as well as maintaining its stance on the energy transition despite any criticism from some US politicians.  Elsewhere, the CEO of C, Jane Fraser, told the Washington DC Economic Club that “this is not a credit crisis” and “the banking system is pretty sound.”  She went on to say this is a “situation where “it’s a few banks (causing the problem).”   At the same time, F said that it is expecting a $3 billion loss from its electric vehicle unit this year, but remains on track to achieve an 8% pretax margin by late 2026.  Later, Reuters reported exclusively that WMT will be asking hundreds of workers at five of the company’s e-commerce fulfillment centers to find jobs elsewhere in the company within 90 days.  Midday, aptly named Hindenburg Research (Short Seller) published a report claiming that SQ (Block Inc) overstated its user numbers, understated customer acquisition costs, and facilitated criminal activity.  SQ CEO Jack Dorsey denied the claims and vowed to take legal action against Hindenburg and file a complaint with the SEC.  After hours, Reuters reported they had internal memos from JPM, C, and BAC telling their employees not to poach clients from stressed banks.  The gist of the report was that the big bank’s management did not want to make the problem worse, give anyone the impression their banks are exploiting the situation, or give the banking industry a bad name.

In stock legal and regulatory news, Bloomberg reported that the European Central Bank is rethinking their treatment of liquidity risk in the wake of the failure of CS (and SIVB in the US).  This seems like a pretty obvious need but Bloomberg says sources confirm the discussions are underway (just not formal yet).  Meanwhile, COIN fell on Thursday after Wednesday night’s Wells Notice from the SEC.  However, the firm tried to push back against the SEC by telling Reuters that the company had asked the SEC what product they are selling the SEC considers a security but the agency declined to respond.  Elsewhere, the CFO of HSY said the company is evaluating how it might reduce or eliminate heavy metals (found by Consumer Reports magazine research) from its dark chocolate products.  HSY faces multiple lawsuits over the presence and lack of disclosure of those metals in the products.  At the same time, the Wall Street Journal reports the Dept. of Defense has launched an investigation into BA over the company allowing 250 people to work on current and future Air Force One jets without proper security clearance.  Mid-afternoon, Reuters reported that the US and European Commission have reached an agreement that will allow electric vehicles containing minerals extracted or processed in Europe to qualify for US green subsidies (as set up in the Inflation Reduction Act package).  After hours, Bloomberg reported that the US Dept. of Justice is investigating CS and UBS (among other banks) for helping Russian oligarchs evade sanctions.

In energy news, Oil snapped a 3-day winning streak amidst rumors that OPEC+ will not increase its production cuts, despite oil being at 15-month lows.  This came after Reuters reported that three OPEC+ delegates told them the group is unlikely to go past the 2 million barrel production cuts agreed on in November.  Elsewhere, US Energy Sec. Granholm told lawmakers Thursday that “the US is in no hurry to refill the Strategic Petroleum Reserves.  She also noted that the department intends to proceed with the congressionally mandated release of another 26 million barrels this year.

After the close, JOAN beat on revenue but missed on earnings.

Overnight, Asian markets were nearly red across the board.  Taiwan (+0.32%) and Shenzhen (+0.25%) were the only green.  Meanwhile, Malaysia (-0.80%), India (-0.77%), and Hong Kong (-0.67%) paced the losses.  In Europe, we see the same picture taking shape at midday with only Russia (+0.04%) clinging to green territory.  The spike in default insurance costs at DB has the whole region in fear.  The DAX (-2.21%), CAC (-2.16%), and FTSE (-1.92%) are typical and lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward US markets following the rest of the world lower, at least at the start of the day.  The DIA implies a -0.96% open, the SPY is implying a -0.75% open, and the QQQ implies a -0.42% open at this hour.  At the same time, 10-year bond yields are plummeting as traders seek the safety of bonds, now down to 3.311% and Oil (WTI) is being crushed by nearly 4% to $67.20/barrel in early trading.

The major economic news events scheduled for Friday include Feb. Durable Goods (8:30 am), Mfg. PMI, S&P Global Composite PMI, and Services PMI (all at 9:45 am).  Fed member Bullard also speaks at 9:30 am.  The major earnings reports scheduled for the day are limited to EXPR before the opening bell.  There are no major earnings reports scheduled for after the close. 

So far this morning, EXPR reported a miss on revenue while beating on the earnings line (smaller loss than expected).

In late-breaking news, the big story of the premarket is that DB stock price plunged as much as 13% overnight following a sudden spike in the company’s credit default swaps (i.e. the cost of insuring that they do not default on their debt) Thursday night.  As a result, there is widespread fear in Europe of contagion of runs on the large European banks like DB, HSBC, BNPQY, SAN, UBS, or ISNPY.  In the meantime, across the border in Switzerland, Swiss Banking Regulators blamed the collapse of CS on “the US banking crisis.”  (This conveniently forgets years of scandal, mismanagement, criminal activity, and the $8 billion in losses CS racked up in 2022.)

With that background, it looks like the bears are looking to take us back toward the bottom of the week’s range. However, premarket action is very volatile today, making large swings in both directions. SPY and DIA look like they will open below their T-line (8ema) while, as has been normal for a while, QQQ looks to be holding up best at this point. Overextension from the T-line is not an issue in any of the big indices. However, T2122 is back in the oversold zone. While there is some economic news this morning (including Durable Goods Orders before the open) today, I suspect that talk and fears related to regional banks (and theoretically some of the big boys) will dominate market sentiment. As an aside, it might be interesting to hear Fed mega-hawk Bullard’s tone at 9:30 am amidst market fears over banks. (I wonder if he is a little more dovish than usual this morning and talks up the Fed’s ability to prop up the banking system if needed.) So, be cautious and also remember that this is a Friday. The last two weekends have seen major market-moving news cycles related to banks. Don’t bet against a third such weekend. Have your account prepared.

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 on Wednesday as traders waited on the Fed decision.  The three major indices then wandered around the opening level before a midday selloff.  The bulls then stepped in at about 1:15 pm and rallied markets into the Fed announcement.  At that point, all three showed major volatility, first spiking up, selling off hard, and reversing again and again.  All three reached the highs of the day at 2:50 pm before then putting in the strongest downtrend of the day.  This move saw a 3:15 pm bounce but resumed and took all three major indices out on their lows.  This action gave us large, black-bodied candles with large upper wicks in the SPY, DIA, and QQQ.  The DIA also printed an Evening Star signal and crossed back below its T-line and 200sma.  SPY crossed down its 200sma while remaining above its T-line.  And, continuing to be the strongest of the major indices, QQQ remains well above its T-line.

On the day, all 10 sectors were in the red with Financial Services (-2.39%) leading the way lower while Consumer Defensive (-0.80%) held up better than the other sectors.  At the same time, the SPY lost 1.70%, the DIA lost 1.67%, and QQQ lost 1.36%.  VXX climbed 4% to 50.43 and T2122 dropped back into the oversold territory at 8.06.  10-year bond yields plummeted again to 3.451% while Oil (WTI) gained half of a percent to $70.02 per barrel.  So, Wednesday saw huge volatility following the Fed statement, Dot Plots, and press conference the bulls seemed to like but Treasury Sec. Yellen said the FDIC will not cover all deposits, which gave the bears firm control at the end of the day (on fears of more regional bank runs).  This all happened on average volume. 

In economic news, the EIA Weekly Crude Oil Inventories came in much higher than expected at +1.117 million barrels (compared to a forecast that called for a drawdown of 1.565 million barrels and the prior week’s build of 1.550 million barrels).  Later, the Fed Future Interest Rate Projections (aka Dot Plots) showed a forecast of 5.1% (the terminal rate) for 2023 (up from the prior forecast of 4.4%), 4.3% interest rate in 2024 (down from the prior forecast of 5.1%), and 3.1% in 2025 (down from the prior forecast of 4.1%).  The FOMC also raised the Fed Funds Rate by 25 basis points to the 4.75%-5.00% range.  The Fed statement continued to predict one more rate hike and no rate cuts in 2023.  However, they also stated that the future hike is not a sure thing and will depend on data. During his press conference, Fed Chair Powell said “the US banking system is sound and resilient.”  He also said disinflation is happening, that the Fed had considered a rate hike pause due to the banking issue, and that this current situation with regional banks is likely to tighten credit conditions for households and businesses (which will help the Fed to curb inflation by weighing on the economy).  At the same time, Treasury Sec. Yellen told the Senate Banking Committee that banks have been shoring up their liquidity the last two weeks and that the government was taking steps to protect depositors.  However, she said the FDIC was not considering providing “blanket insurance” (insuring all deposits regardless of size) at this time.  She said it was worthwhile to look at changes, but increasing above the current $250,000 limit is not being considered. Still, she said when a bank fails and is believed to pose a systemic risk (i.e., pose a risk of contagion of bank runs) “we are likely to invoke a risk exception” that allows the FDIC to cover all deposits.  So, basically, Yellen said they won’t insure all deposits but if a bank gets run and they think it will prevent panic, they will cover all deposits for that specific bank.  (Here’s to hope that your bank is likely to cause a panic if it goes under.)

SNAP Case Study | Actual Trade

In stock news, the CFO of BA said Wednesday that the company will be taking more charges due to supplier quality issues on the KC-46 Tanker jet program, but added that the charges would not impact BA annual cash flow.  Elsewhere, the surprise GME profit on Tuesday night triggered a massive short-squeeze resulting in a 35% gain after a very volatile day that saw the stock up 53% at one point.  Meanwhile, BIDU’s smart car business unit received approval to be the first company to test autonomous vehicles on the road in Shanghai (population 26 million).  At the same time, Reuters reported that the MSFT search engine Bing has received a 15.8% boost in usage (compared to a 1% decline in the use of the GOOGL search engine) since the February 7 release of Bing’s AI-powered (ChatGPT) engine.  However, please be aware that Bing’s share of searches was so small to start with that this seemingly big move is really tiny overall.  In other news, ALB announced it will be opening a $1.3 billion lithium processing plant in South Carolina.  After the close, COIN said it has been issued a Wells Notice (notice the SEC intends to bring enforcement action). Finally, F announced on Thursday it will be re-releasing 2021 and 2022 results to reflect a finer level of detail by business unit. This is the first major car company to do so and will give much more insight into the company (and industry). Industry analysts expect to see massive losses from the electric vehicle unit but time will tell.

In stock legal and regulatory news, the CEO of MRNA defended the new, dramatically higher $130/dose price (versus $18/dose) for the COVID-19 vaccine before the US Senate Wednesday.  He was pushed by Senator Sanders but responded by pointing out it will be in single-dose syringes rather than in the 10-dose vials sold to the US government in 2021-2022.  In other drug news, the NIH announced it will not be using its “march-in” rights to grant production licenses to other manufacturers for the PFE prostate cancer drug Xtandi.  The agency said their analysis shows the drug is widely available (despite it selling for $170,000/year/patient).  At the same time, the US FDA has declined to approve ABBV’s Parkinson’s disease therapy.  This was a significant hit to ABBV, as the treatment was meant to be one of the company’s biggest drug introductions in the next one to two years.  Elsewhere, Reuters reported that GOOGL will gain unconditional EU antitrust approval for the acquisition of math app Photomath. The European Commission will rule on the deal on March 28, but sources tell Reuters the deal is approved.  Meanwhile, on this side of the pond, JNJ has appealed to the US Supreme Court to revive its effort to use bankruptcy law to avoid liability in more than 38,000 cases alleging JNJ’s Baby Powder (contaminated with asbestos) caused damages.  In other news, House GOP members are lining up behind business interests as they summoned NRLB officials while alleging the NRLB had been unfair to SBUX in ruling that the company broke labor law hundreds of times in its effort to fight unions.  In transportation, the FAA agreed to a request from DAL to reduce the “minimum flights requirement” and New York and Washington DC airports. The change will allow DAL and UAL to operate fewer flights (during congestion, staff outages, or whatever) without losing their landing slots at those airports.

After the close, CHWY, KBH, WOR, and SCS all reported beats on both the revenue and earnings lines.  Meanwhile, MLKN missed on revenue while beating (significantly) on earnings.  It is worth noting that MLKN lowered forward guidance and SCS raised guidance at the time of the report.  It is also worth noting that in addition to MLKN, CHWY, and WOR earnings were significant upside surprises versus the average analyst forecast.

Overnight, Asian markets were mixed but leaned toward the green side.  Australia (-0.67%), India (-0.44%), and Japan (-0.17%) led the losses.  Meanwhile, Hong Kong (+2.34%), Shenzhen (+0.94%), and Taiwan (+0.66%) paced the gainers.  In Europe, markets are red across the board at midday.  The CAC (-0.55%), FTSE (-0.97%), and DAX (-0.63%) are typical and are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.20% open, the SPY is implying a +0.47% open, and the QQQ implies a +0.90% open at this hour.  At the same time, 10-year bond yields are back up to 3.50% and Oil (WTI) is down three-quarters of a percent to $70.43/barrel in early trading.

The major economic news events scheduled for Thursday include Building Permits (8 am), Q4 Current Account and Weekly Initial Jobless Claims (8:30 am), and February New Home Sales (10 am).  The major earnings reports scheduled for the day include ACN, DOOO, CMC, DRI, FDS, and GIS before the opening bell.  Then after the close, JOAN reports. 

In economic news later this week, on Friday, Feb. Durable Goods, Mfg. PMI, S&P Global Composite PMI, and Services PMI are reported.  In earnings later this week, on Friday, EXPR reports.

So far this morning, ACN, GIS, DRI, and DOOO all reported beats on the revenue and earnings lines.  Meanwhile, FDS missed on revenue while beating on earnings.  On the other side, CMC beat on revenue while missing on earnings.  It is worth noting that GIS has raised its forward guidance.

In late-breaking news, Bloomberg reports that the big Wall Street banks have eased off of their previously announced hiring freezes as they attempt to snap up the best talent available from CS.  Elsewhere, F began releasing its prior results broken out by business unit.  It seems the EV unit lost $2.1 billion in 2022, which was offset by $10 billion in operating profits from the internal combustion and fleet sales units.  Finally, the CEO of C (Jane Fraser) said that the SIVB collapse demonstrates we are in a new world where bank customers can move millions of dollars with just a couple clicks from any location.  She implied there need to be new or changed regulations to protect banks from “digital runs” because remote access to money electronically has removed banks’ ability to forecast the need for liquid assets.

With that background, it looks like the bulls are looking to make a move against yesterday’s late-day selloff. This is especially true in the QQQ. SPY has recrossed its T-line (8ema) and 200sma to the upside in premarket. Overextension from the T-line is not an issue in any of the big indices. However, T2122 is back in the oversold zone. While there is some economic news (including Weekly Jobless Claims) today, I suspect that talk and fears related to regional banks may be a big driver of direction. Until the regional banks stocks calm down, it will be hard for the big banks to hold up. And without the big banks, it’s hard for the DIA and SPY to hold ground either. So, be cautious and don’t let FOMO put you in a position where this daily chop eats you alive.

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