Fed Decision and Chairman Presser Today
Tuesday saw the Bulls take a step back toward redemption after Monday’s rough day. SPY opened 0.19% higher, DIA opened 0.04% higher, and QQQ gapped up 0.25%. At that point, all three major index ETFs gave ground to the Bears for 15 minutes before beginning a rally that lasted until 11:15 a.m. for DIA. From there, DIA chopped to the side with a modest Bearish Trend the rest of the day. However, SPY and QQQ kept rallying until 3 p.m. when we saw modest profit-taking the last hour. This action gave us white-bodied candles in all three major index ETFs. SPY printed a white candle with a lower wick and tiny upper wick that crossed back above its T-line (8ema). DIA gave us a white-bodied Spinning Top candle. Finally, QQQ printed a large white candle with wicks at both ends. It retested, but closed just below its T-line. This happened on below average volume in all three major index ETFs.
On the day, seven of the 10 of the sectors were in the red with Consumer Defensive (-1.14%) way out front among the losers. On the other side, Technology (+2.45%) was way, way (by 2%) holding up much better than any other sector. At the same time, SPY gained 0.84%, DIA gained 0.29%, and QQQ gained 1.48%. Meanwhile, VXX lost 3.30% to close at 43.02 while T2122 dropped just outside of its overbought range to the top of the mid-range, closing at 76.11. On the bond side, 10-Year Bond yields were just on the green side of flat at 4.538% and Oil (WTI) gained 1.05%, closing at $73.94 per barrel. So, Tuesday saw a rebound from the DeepSeek collapse with NVDA popping 8.70%, AAPL gaining 3.65%, and MSFT gaining 2.90%.
The major economic news on Tuesday included Preliminary December Core Durable Goods Orders (Month-on-Month), which came in up but lower than expected at +0.3% (compared to a +0.4% forecast but well above the November -0.1% reading). On the headline number, Preliminary December Durable Goods Orders (Month-on-Month) were far below expectation at -2.2% (versus a +0.3% forecast and November’s -2.0% value). Later, January Conf. Board Consumer Confidence reading was lower than had been predicted at 104.1 (compared to a 105.7 forecast and well down from the Dec. 109.5 reading). Then, after the close, the API Weekly Crude Oil Stocks report showed a smaller inventory build that anticipated at +2.860 million barrels (versus a +3.700-million-barrel forecast and the previous week’s 1.000-million-barrel inventory build).
There was no Fed news Tuesday as the FOMC meeting began. (That meeting is still expected to be a hold by most analysts and 99.5% of Fed Futures traders.)
After the close, BXP, FFIV, HLI, LFUS, LOGI, NXT, QRVO, SBUX, LRN, SYK, and UMBF all reported beats on both the revenue and earnings lines. Meanwhile, CB and RNR missed on revenue while beating on earnings. On the other side, PKG beat on revenue while missing on earnings.
Overnight, Asian markets leaned toward to green side as Japan (+1.02%), India (+0.90%), and South Korea (+0.85%) paced the gains while China remained closed. In Europe, with the sole exception of the CAC (-0.26%) we see green across the board at midday. The DAX (+0.81%) and FTSE (+0.35%) lead the region higher in early afternoon trade. In the Us, as of 7:40 a.m., Futures are pointing toward a green start to the day. DIA implies a +0.62% open, SPY is implying a +0.80% open, and QQQ implies a +0.35% open at this hour. At the same time, 10-Year Bond yields are down to 4.528% and Oil (WTI) is down about two-thirds of a percent to $73.31 per barrel in early trading.
The major economic news scheduled for Wednesday includes Preliminary December Goods Trade Balance and Preliminary December Retail Inventories (both at 8:30 a.m.), EIA Weekly Crude Oil Inventories (10:30 a.m.), FOMC Interest Rates Decision, and FOMC Statement (both at 2 p.m.), and Fed Chair Press Conference (2:30 p.m.). The major earnings reports scheduled for before the open include AIT, ASML, ADP, AVT, EAT, GIB, GLW, DHR, EXP, FLEX, GD, GPI, HES, LII, MHO, MSCI, NDAQ, NSC, OTIS, PGR, SLGN, SF, TMUS, TEVA, and VFC. Then after the close, AMP, AXS, CHRW, CP, CLS, CCS, CMPR, IBM, LRCX, LSTR, LVS, LEVI, LBRT, MTH, META, MEOH, MSFT, NFG, RJF, RHI, SEIC, SIGI, NOW, TER, TSLA, TTEK, URI, WDC, WHR, and WM report.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q4 Core PCE Prices, Preliminary Q4 GDP, Preliminary Q4 GDP Price Index, December Pending Home Sales, and Fed Balance Sheet. Finally, on Friday, December PCE Price Index, December PCE Price Index, December Personal Spending, Q4 Employment Cost Index, and Chicago PMI are reported.
In terms of earnings reports later this week, on Thursday, we hear from FLWS, AOS, MO, ABG, AVY, BBVA, BX, BFH, BC, CAH, CRS, CAT, CHKP, CI, CMCSA, CFR, DOV, DOW, IP, KEX, LHX, LAZ, MAN, MMC, MA, MBLY, MUR, NOK, NOC, OSK, PH, PHM, DGX, RCI, ROP, SNY, SCSC, SNDR, SHW, SIRI, LUV, STM, TMO, TSCO, TT, UPS, VLO, AAPL, AJG, TEAM, BKR, BOOT, CNI, CACC, DECK, EMN, GEN, HIG, INTC, KLAC, LPLA, OLN, PFSI, PPG, RMD, SKYW, X, V, and WY. Finally, on Friday, ABBV, AON, ARCB, ALV, BSAC, BAH, BR, BEPC, BEP, CHTR, CVX, CHD, CL, ETN, XOM, BEN, GNTX, IMO, JHG, LYB, NVS, OMF, PSX, RVTY, VSTS, and GWW report.
So far this morning, VLVLY, ASML, ADP, EAT, GPI. HES, LII, MKTAY, NDAQ, NAVI, SLGN, SF, TMUS, TEVA, VFC, and VIRT all reported beats on both the revenue and earnings lines. Meanwhile, AIT, GIB, GLW, GD, and MSCI missed on revenue while beating on earnings. On the other side, DHR, MHO, and OTIS beat on revenue while missing on earnings. However, EXP missed on both the top and bottom lines.
With that background, markets look undecided again this morning ahead of the FOMC decision (after Trump has “demanded lower rates”). QQQ started the early session by gapping back up through its T-line (8ema) but is printing a Doji just above that level. SPY gapped up to start the premarket, but has printed a black-body candle with no wicks since that point and is nearly back to Tuesday’s close. For its part, DIA is printing a small, inside, white-body candle so far this morning. However, with all three back above their T-line, the short-term trend is on the bullish side again. The mid-term downtrend is now a mess and can best be described as broad-range chop. In the long-term all three are bullish. In terms of extension, none of the major index ETFs are very far from their T-line. Meanwhile, T2122 is back in the top of its mid-range. So, both sides have room to work today if they can find momentum. (Expect drift until the Fed decision at 2 p.m. where we are likely to see volatility. In terms of the 10 Big Dogs, six of the 10 are in the green again with AMD (+1.25%) well out front leading the gains. On the other side, NVDA (-1.37%) and AAPL (-1.16%) lead the four laggards. As far as liquidity goes NVDA leads the way, having traded almost four times more than TSLA (-0.47%). However, note that it is a low-volume premarket 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 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 gains are 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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