Mixed Bank Results Ahead of Empire State

Markets gapped down Friday (down 0.83% in the SPY, down 0.80% in the DIA, and down 0.91% in the QQQ).  However, this was a bear trap as the bulls immediately stepped in to lead a rally that faded the gap within an hour and kept going at a slower pace (especially in the DIA) all day long.  This saw us close near the highs of the day.  SPY crossed back up through its 200sma, DIA crossed up through its resistance level, and QQQ climbed back up through its 50sma again.  That action gave us gap-down, large, white candles that are nearly Marubozu (Shaved Head) candles in all three of the major indices.  All of this happened on less-than-average volume again. 

On the day, nine of the 10 sectors were in the green again as Healthcare (+0.76%) led the way higher and Utilities (-0.45%) lagged behind the other sectors.  At the same time, the SPY was up 0.40%, the DIA was up 0.30%, and QQQ was up 0.69%.  At the same time, the VXX was down 2.51% to 12.02 and T2122 climbed even deeper into the overbought territory at 98.82.  10-year bond yields rose to 3.504% and Oil (WTI) was up 2.00% at $79.96 per barrel.  So, overall, it was a lower-volume, comeback day for the bulls after a gap down to start the day as earnings season kicked off again.

In economic news, the December Import Price Index rose by more than expected at +0.4% (compared to a forecast of -0.9%).  Meanwhile, the December Export Price Index fell way more than expected at -2.6% (versus the forecast of -0.5%).  Later in the day, the Michigan Consumer Sentiment reading came in better than expected at 64.6 (compared to a forecast of 60.5 and the December reading of 59.7). This is the highest reading since May of 2022 and indicates an improving consumer outlook for the year.  In the afternoon, Treasury Sec. Yellen warned Congress the US will reach its Debt Ceiling on Thursday and will begin “extraordinary measures” to avoid default. These measures will stretch the time before the US defaults on its debts, but Treasury cannot accurately gauge how long of an extension we will get.  However, she told Speaker McCarthy that default is not likely to happen before early June.  She urged Congress to either suspend or increase the debt limit as soon as possible to avoid the harm a default would do to the country.

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In stock news, HBI shares rose on Friday after the company said it expects to report Q4 net sales a bit above the top end of its previous forecast and adjusted operating profit above the midpoint of its previous guidance.  (HBI reports in February.)  In the afternoon, the Wall Street Journal reported that GOOGL source told them YouTube is testing a group of free (ad-supported) streaming channels and is in talks with various entertainment companies about featuring their movies and shows on a cable-like YouTube hub of channels.   Meanwhile, an SEC filing revealed that the GS unit which covers housing transactions, credit card, and financial technology has lost $3.03 billion in three years and a $1.2 billion loss in the first nine months of 2022.  Elsewhere, the US Dept. of Energy is loaning IONR $700 million (for 10 years at a fixed-rate to be determined when the funds are dispersed) to build its Nevada lithium mining operation.  (F and TM are among the companies that have already committed to buy lithium from that operation.)  Finally, NATI announced it’s starting a strategic review that will include looking for potential suitors to buyout the company.

In energy news, Reuters reports that XOM will sharply boost both gasoline and diesel production at its Beaumont TX refinery after completing a $2 billion expansion.  The expansion will add 250,000 barrels-per-day of crude refining (by January 31) at what was already the second-largest refinery in the US.  However, the net gains in refining capacity will be short-lived as LYB has already said it will be shutting down its own 264,000 Barrel-per-day refinery in Houston at the end of 2023.  Elsewhere, Natural Gas fell another 5.79% on Friday.  This brought the natty down more than 50% in the last 30 days and to a level not seen since June of 2021. Meanwhile, Oil (WTI) posted its largest weekly gain since October as the US Dollar fell to a 7-month low and hope for expanded demand from China.

So far this morning, earnings have been not great.  MS and EDU both reported beats on both the revenue and earnings lines.  However, GS, CFG, SBNY, and SI all reported beats on the revenue lines while missing on the earnings lines.  None of the companies has held their call or provided updated guidance yet.

Overnight, Asian markets were mixed.  Japan (+1.23%) and India (+0.89%) were the only significant gainers while Hong Kong (-0.78%) was the only appreciable loser on the day. The rest of the region made small moves in either direction from flat. However, in Europe, the bourses are nearly red across the board.  Only Athens (+0.39%) is in the green while the FTSE (-0.34%), DAX (-0.04%), and CAC (-0.13%) take the region lower in early afternoon trade as the volume leaders.  As of 7:30 am, US Futures are pointing toward a down start to the week.  The DIA implies a -0.29% open, the SPY is implying a -0.21% open, and the QQQ implies a -0.29% open at this hour.  At the same time, 10-year bond yields are higher to 3.546% and Oil (WTI) is up two-thirds of a percent to  $80.37/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to NY Fed Empire State Mfg. Index (8:30 am) and a Fed speaker (Williams at 3 pm).  The major earnings reports scheduled for the day include CFG, GS, MS, EDU, and SBNY before the opening bell.  Then after the close, IBKR and UAL report.

In economic news later in the week, on Wednesday, we get Dec. Retail Sales, Dec. PPI, Dec. Industrial Production, Nov. Business Inventories, Nov. Retail Inventories, Fed Beige Book, and a Fed speaker (Harker).  Then, on Thursday, Dec. Building Permits, Dec. Housing Starts, Weekly Initial Jobless Claims, Philly Fed Mfg. Index, and EIA Weekly Crude Oil Inventories are reported.  We also get another Fed speaker (Williams).  Finally, on Friday, we get Dec. Existing Home Sales and two Fed speakers (Harker and Waller).

In terms of earnings, on Wednesday, we hear from SCHW, JBHT, PNC, PLD, AA, DFS, FHN, FUL, KMI, and WTFC.  On Thursday, CMA, FAST, FITB, KEY, MTB, NTRS, PG, SNV, TFC, CNXC, NFLX, PPG, and SIVB report.  Finally, on Friday, we hear from ALLY, ERIC, HBAN, RF, SLB, and STT.

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With that background, it looks we are going to start the week (pending the NY Empire State Mfg. Index) with a modest gap down as the SPY is retesting its 200sma and DIA is retesting a support level (both from above). The bulls do not have to worry about extension from the T-line (8ema), but the T2122 indicator is deep into the overbought territory at this point. It appears that earnings are the story of the morning up to this point. Still, we have to remember that we get December PPI and a slew of other data on Wednesday morning. With the Fed meeting in two weeks, every significant report will be seen basically only in light of how the FOMC might use it to justify a lower/higher rate hike. Right now, Futures are implying a greater than 91% chance that we only get a quarter-point hike this time (only 8.8% are betting we get a half-percent hike). Any news that would give the hawks in the room ammunition will be taken badly by markets. So, be watchful.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Big Banks Deliver Good Reports So Far

On Thursday, markets gapped slightly higher at the open (up 0.29% in the SPY, up 0.34% in the DIA, and up 0.20% in the QQQ).  However, the bears immediately faded that gap and took us to the low of the day by 10 am.  From that point, the bulls stepped in and we got a slow, wavy, modest bullish trend that reached the highs of the day at 2 pm.  From there, we saw a selloff that lasted until the last 10 minutes of the day.  This action gave us white-bodied, indecisive, Spinning Top types of candles in all three major indices.  The SPY is fighting to cross above its 200sma, QQQ crossed above its 50sma, and DIA is fighting to cross above a resistance level at day end.  This marks the first time since early December that all three major indices are above their 50sma.

On the day, eight of the 10 sectors were in the green again as Energy (+2.13%) led the way higher and Consumer Defensive (-0.39%) lagged behind the other sectors.  At the same time, the SPY was up 0.38%, the DIA was up 0.66%, and QQQ was up 0.54%.  At the same time, the VXX was down almost 5% to 12.33 and T2122 has stayed deep in the overbought territory at 96.88.  10-year bond yields fell to 3.444% and Oil (WTI) has risen 1.20% at $78.34 per barrel.  So, overall, it has been an average-volume, bullish, and yet indecisive day as traders wait on Big Bank earnings on Friday morning.

In economic news, CPI came in just as expected at 6.5% annualized rate (compared to a 6.5% forecast and well below the 7.1% annualized November rate). This news shows that the Fed policy is working and inflation is beginning to come down.  At the same time, Weekly Initial Jobless Claims were a bit lower than expected, coming in at 205k (versus a forecast of 215k and last week’s 206k).  This news may have offset the good trend in the CPI as premarkets immediately sold off, but quickly recovered to flat on the release of these two pieces of data.  Later in the day, the December Federal Budget Balance came in worse than expected at -$85 billion (compared to a forecast of -$70 billion but still far better than the November value of -$249 billion).

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In stock news, LCID won a dismissal of the lawsuit brought against it by investors who claimed management had overstated its production outlook before a SPAC took it public.  Elsewhere, DIS management and board are preparing for a fight with activist investor Nelson Peltz, who formally launched a bid for a board seat on Thursday.  The move by Peltz would seriously threaten new (and former) CEO Bob Iger as Peltz has called for the sale of business units.  In the afternoon, CTSH announced a new CEO effective immediately (former President of INFY).  ERIC reported in Sweden Thursday and its smaller-than-expected provision hinted at a smaller US fine from the US DOJ and SEC.  (ERIC had previously lost a third of its value since the announcement of action by the US government.)  Meanwhile, the Financial Times reports that WBD is considering the sale of its $1+ billion music library.  In other news, TSM has cut 2023 CAPEX by 5%, even after a record Q4 as weak demand for chips has the Taiwanese company worried.  The reduction should not impact the TSM Fabs (Chip production plant) under construction in Arizona.  However, it may preclude or push off plans to build a Fab in Europe or a second Fab in Japan.  Finally, AAPL CEO Tim Cook asked for (and got) a 40% reduction in pay for 2023.  (Don’t worry about Tim, he’ll still make $49 million this year.)

In energy news, the US Energy Information Admin. (EIA) reported a rare build in US natural gas inventories.  The report cited an 11 billion cubic feet increase (compared to a consensus forecast of a 13 billion cubic feet drawdown).  Despite this news, the Feb. natty held up, closing a penny higher than it had on Wednesday.  Meanwhile, Oil (WTI and Brent) were up on Thursday.  The logic behind this might inform why natural gas also held up.  The basic idea is that the December CPI showed that inflation is falling.  If inflation falls, the market guesses that the Fed will ease off on rate increases. In turn, slower interest rate hikes would lead to a dollar that is less strong and potentially more business spending at lower rates.  It is those last two factors that could be read as oil and natural gas will be more valuable in the future and therefore should be bought today.  So, if you followed all of that, a viola, oil prices rose and natural gas prices at least held up after a bearish slide all month.

So far this morning, UNH, JPM, BAC, WFC, DAL, BLK, and FRC all reported beats on both the top and bottom lines.  However, of these numbers, WFC and FRC earnings as well as both lines for BLK showed negative growth (lowered targets).  WIT reported a miss on revenue while reporting in line on earnings.  It is also worth noting that DAL raised its forward guidance.  (C reports at 8:00 am.)  So, the big banks are kicking off earnings season with strong Q4 numbers so far.

Overnight, Asian markets were mostly green.  Japan (-1.25%) and Thailand (-0.34%) were the only red seen.  Meanwhile, Shenzhen (+1.19%), Hong Kong (+1.04%), and Shanghai (+1.01%) led the region higher on mostly solid moves.  In Europe, bourses are mixed at midday but lean to the upside.  The FTSE (+0.49%), DAX (+0.21%), and CAC (+0.31%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.28% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.53% open at this hour.  At the same time, 10-year bond yields are up slightly to 3.465% and Oil (WTI) is up two-thirds of a percent to $78.91/barrel in early trading.

The major economic news events scheduled for Friday are limited to December Import / Export Prices (8:30 am), Michigan Consumer Sentiment (10 am), and a Fed speaker (Harker at 7:30 am).  The major earnings reports scheduled for Friday are limited to BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT all before the opening bell.  There are no major reports scheduled for after the close.

Do not forget that Monday is a market holiday in the US.  However, Canadian markets (TSX) are open Monday.

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With that background, it looks like the three major indices are headed back down toward their T-line (8ema) which should provide some relief to the T2122 indicator over-extension. This opening does take the DIA back below a resistance level and takes the SPY back below its 200sma…at least at this point. With a 3-day weekend ahead, that may be a good reason for us to see light volumes today. However, with CPI direction behind us and now the Big Banks giving us a hint that reports might not be so bad this time around, I would not be surprised to see decent trading volumes at least early today. Either way, be cautious and prepare yourself for the long weekend. Take profits, hedge, and limit your risk exposure because, unlike the big funds, you’re not risking other people’s money, you’re risking your own.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Market Just on Green Side of Flat Early

On Tuesday, after Fed Chair Powell’s morning speech, markets opened up just on the down side of flat.  At that point, all three major indices chopped sideways until noon. Then a slow, steady bullish trend started that lasted into the close.  This action gave us white-bodied, Bullish Engulfing signals in the SPY and QQQ.  Meanwhile, the DIA bounced up off its 50sma on the day.  All of this, once again, took place on lower-than-average volume.

On the day, all 10 sectors were in the green as Consumer Defensive (+0.09%) lagged behind and Consumer Cyclical (+1.46%) lead the other sectors higher.  Meanwhile, the SPY was up 0.70%, the DIA was up 0.58%, and QQQ was up 0.85%.  At the same time, the VXX was down 4.16% to 12.91 and T2122 remains in the overbought territory at 89.57.  10-year bond yields spiked to 3.606% and Oil (WTI) was up 0.31% at $74.86 per barrel.  So, overall, it has been a bullish day that negated the potential bearish signal from Monday.

In economic news, as mentioned above, Fed Chair Powell spoke to Sweden’s central bank Tuesday.  He made no reference to interest rate decisions other than to say that more increases are likely on the way this year.  His remarks emphasized that fighting inflation requires measures that are politically unpopular and that the Fed must be independent of political control in order to take the hard actions that will bring inflation down.  He also went on to address GOP criticisms by saying that “the Fed should stick to its knitting” (and not stray into using regulatory power to address climate change or social issues).  He emphatically said, “We (the Fed) are not, and will not be a climate policymaker.”  However, he also said asking big banks to examine their readiness for major climate-related events and other risks was fair game but that is as far as it should go.  If the premarket is a judge, traders liked what they heard from Powell. Much later, after the close, the API delivered its Weekly Crude Oil Stocks report with a massive unexpected build in inventories.  The data showed inventory up by 14.865 million barrels (compared to a forecasted drawdown of 2.375 million barrels).

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In stock news, Airbus maintained its position as the world’s largest plane manufacturer when it reported that deliveries rose 8% in 2022.  Airbus delivered 663 jets, compared to just 480 delivered by BA during the year.  Elsewhere, GM, F, GOOGL, SPWR, and RUN announced they will work together to create standards and protocols that will allow for Virtual Power Plants to be used to ease loads on electricity grids.  (The VPP idea is that thousands of decentralized energy sources like electric vehicles and batteries can be pooled together to create a source of power for an electric grid during high-demand periods.)  Meanwhile, CNBC reported that the money AAPL app store developers have received this year suggests that AAPL app store growth has slowed and is likely in line with the 2021 revenue from that unit.  At the same time, FDX said it was trimming Sunday deliveries starting in March, reducing the percentage of the US that is eligible for Sunday delivery down to 50% (from 80%).  In other news, the Wall Street Journal reported that FRG is considering going private through a management buyout.  Finally, WFC (long the leader in home lending) is scaling back its mortgage business and will now only offer home loans to existing banking customers.

In energy news, in addition to the crude oil stocks above, the Weekly API report also showed a 1.8-million-barrel increase in gasoline inventories and a 1.1-million-barrel build of distillate stocks (diesel fuel and heating oil).  Compare these to a forecast of a 1.186-million-barrel build in gasoline inventory and an expected drawdown of 0.472-million-barrels of distillate.  In other news, the US EIA released a forecast on Tuesday afternoon saying that global oil consumption will reach a new record of 102.2 million barrels per day in 2024.  Finally, February Natural Gas futures fell another 7% on Tuesday (following Monday’s 5% rally), bringing the total drop to 52% over the last three weeks.

Early this morning, the FAA suffered a system outage that normally alerts pilots of in-air hazards and airport facility status changes (like closed airports and runways). That system has stopped processing new or updated information. This outage caused the FAA to order the delay or cancellation of all flights in US airspace (inbound or outbound) until the system is restored.  As of 6:30 am, almost 800 flights had been delayed, canceled, or rerouted away from US airspace.  Obviously, this will have a very minor, but real, impact on US businesses, especially airlines. (For reference, the storm just before Christmas caused the cancellation of many thousand flights each day for more than a week.)

Overnight, Asian markets were mixed but lean to the upside on modest moves with Japan (+1.03%) and Australia (+0.90%) leading the gainers while Shenzhen (-0.58%) and Taiwan (-0.35%) paced the losses.  Meanwhile, in Europe, the exchanges are heavily weighted to the green at midday.  The FTSE (+0.64%), DAX (+1.05%), and CAC (+0.98%) are leading the region higher in early afternoon trade with only Norway (-0.63%) and two other very minor spots of red on the board.  As of 7:30 am, US Futures are pointing toward a start to the day just on the green side of flat.  The DIA implies a +0.10% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.10% open at this hour.  At the same time, 10-year bond yields are back down to 3.578% and Oil (WTI) is up fractionally to $75.38%/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to EIA Crude Oil Inventories (10:30 am).  There are no major earnings reports scheduled for before the opening bell.  However, after the close, KBH reports.

In economic news later in the week, on Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Thursday, INFY and TSM report.  However, on Friday, we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT report.

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In mortgage news, after rising at the end of the year, interest rates dropped sharply last week from 6.58% to 6.42% for a 30-year, fixed-rate, conforming loan.  That drop led to a 5% increase in refinance applications and an overall mortgage volume increase of 1.2% compared to the prior week according to the Mortgage Bankers Association.  The mortgage volume was still 86% lower than the same week in 2022. 

With that background, it looks like the large-cap indices are sitting just on top of their 50sma (also a resistance level for the SPY) after a very small bullish premarket move. Meanwhile, the QQQ is also positive in premarket, but has not yet reached its 50sma above. This is looking like a modest additional follow-through to Tuesday’s move. However, it is far from a definitive direction move in the bullish direction. Nonetheless, the premarket bias is bullish. Do not be surprised if price just drifts and chops around today as the market waits on that CPI report Thursday (not for its own sake, but as a read-through to what the Fed may do at month end). So, don’t count on average volumes, and be very careful trading thin tickers.

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

Swing Trade Ideas for your consideration and watchlist: BWA, DIS, CAT, PYPL, SBUX, ALLY, GILD, LUMN, and META. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

All Eyes on Chair Powell This Morning

Markets gapped higher at the open (by a half of a percent in the large-cap indices and by three-quarters of a percent in the QQQ), following the rest of the world higher.  Then the bulls gave us a follow-through that lasted until we reached the highs of the day at about 11:30 am.  At that point, the bears stepped in to lead an afternoon selloff that took us lower, all the way into the close.  The large caps completely faded the gap, getting into negative territory by day end.  However, while the QQQ sold off, it held up better than the large caps.  This action saw the SPY retest and fail its 50sma and the coinciding resistance level.  It has also brought the QQQ up near a retest of its own 50sma above before pulling back.  We should also note that all three major indices printed Shooting Star-type candles.

On the day, six of the 10 sectors are in the green as Technology (+1.52%) led the way higher and Healthcare (-1.17%) lagged behind the other sectors.  At the same time, the SPY was down 0.06%, the DIA was down 0.29%, and QQQ was up 0.65%.  Volume was back below average again in all 3 indices.  Meanwhile, the VXX was up 0.52% to 13.47, and T2122 fell but remains in the overbought territory at 85.33.  10-year bond yields plunged down to 3.53% and Oil (WTI) was up 1.53% at $74.90 per barrel.  So, overall, it was a gap-up, Shooting Star type of day with the bulls happy early and the bears completely in control during the afternoon

In economic news, Atlanta Fed President Bostic spoke to an Atlanta business group, basically reiterating the recent comments made by Fed Chair Powell.  Bostic said they (Fed) are prepared to take rates higher and stay higher for longer to tame inflation.  (And, yes, even at the risk of tipping the economy into recession.)  Meanwhile, San Francisco Fed President Daly told the Wall Street Journal that she expects rates to go “somewhere above 5%” and that “doing so in more gradual steps does give you the ability to respond to incoming information.”  However, it did seem that both speakers were talking about whether the Fed will raise 0.25% or 0.50% on February 1. It is also worth noting that neither of these Fed Presidents have a vote in 2023 (both were voters in 2022).

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In stock news, LMT announced a $14.2 billion sale of F-35 fighter jets to Canada (to be delivered in 2026).  Elsewhere, two retailers increased their holiday sales forecasts as AEO and ANF both said Monday that consumers had been snapping up their winter gear during the holidays.  However, on the other side, LULU lowered its Q4 guidance.  In the healthcare space, MRNA is reportedly evaluating a $110-$130 price range for its Covid-19 vaccine once it moves from government contracts to commercial sales.  This is a similar range to the one PFE revealed it is considering.  (The original price for both was $15-$16 per dose and then rose to $26/dose in the July 2022 government contract.)  After the close, Bloomberg reported that AAPL is preparing to stop using chips from AVGO and QCOM in its devices by the end of 2024 (replacing those chips with Wi-Fi chips built to internal designs).  Finally, Bloomberg reported that MSFT is in discussions with OpenAI bout investing as much as $10 billion into the creator of the artificial intelligence chatbot named ChatGPT.

In energy news, the US Federal government has rejected the initial batch of bids to resupply 3 million barrels of crude into the Strategic Petroleum Reserve.  No details on the bid prices were given, but the Dept. of Energy had previously said it is looking to refill the 180 million barrels recently released at a price of $70/barrel.  Meanwhile, the price of the largest exported grade of Russian oil (Urals grade) was selling at well less than half of the international price.  Urals was selling for $37.80/barrel (compared to $79.80/barrel for Brent) at the Baltic Sea port of Primorsk. This is far less than even the G-7 imposed price cap.  All of which is proving that sanctions on Russia are having a serious economic impact. Finally, the German energy regulator said that a natural gas shortage is increasingly unlikely due to conservation efforts and a mild winter.  The Federal Network Agency said Germany’s gas storage facilities are currently still 91% full.

After the close, JEF beat on both the revenue and earnings lines.  However, both lines also showed negative growth (lowered targets) with earnings less than half of the same quarter in 2021.  The company blamed a persistent slump in the number of M&A deals as the cause.  So far this morning, BBBY reported misses on both lines (expected after very recent warnings that the company may file for bankruptcy). ACI and SNX report later in the premarket period.

Overnight, Asian markets were mixed but leaned to the downside.  Singapore (-1.29%), India (-1.03%), and Malaysia (-0.56%) led the region lower while Japan (+0.78%), Shenzhen (+0.50%), and Taiwan (+0.34%) paced the gains.  In Europe, with the sole exception of Portugal (+0.16%), we see red across the board at midday.  The FTSE (-0.19%), DAX (-0.45%), and CAC (-0.73%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are also pointing toward a down start to the day.  The DIA implies a -0.36% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.45% open at this hour.  At the same time, 10-year bond yields are back up to 3.563% and Oil (WTI) is up a half of a percent to $75.04/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Fed Chair Powell speaking (9 am) and the API Weekly Crude Oil Stocks (4:30 pm).  The major earnings reports scheduled for the day are limited to ACI, BBBY, and SNX before the opening bell.  Then after the close, NOTV reports.

In economic news later in the week, on Wednesday, we get EIA Crude Oil Inventories.  On Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Wednesday, we hear from KBH.  On Thursday, INFY and TSM report.  However, on Friday, we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT.

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In late-breaking news, COIN announced that it is cutting 20% of its workforce after having cut 18% back in June 2022. The cuts last June were attributed to “growing too fast” while the current cuts are blamed on “market conditions created by bad actors” (referring to FTX). Finally, the Dollar is trading up against the Yen and Pound while it is flat against the Euro this morning. The overall Dollar index is up 0.32% today, which will provide a headwind to commodity prices.

With that background, it looks like all three major indices look like they are headed for a retest of their T-line (8ema) in premarket action. This looks like at least an initial follow-through to Monday’s Shooting Star signal. However, this is far from a definitive direction change and none of the three major indices has even re-entered the three-week consolidation zone again. So, for the moment, this looks like volatility (chop) as markets wait on Fed speakers and CPI later in the week. Fed Chair Powell, may have an outsized impact this morning with no other economic data or major earnings news to offset his tone. So, be cautious in chasing the premarket move unless you are very nimble.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

GS Cuts 3200 With CPI and Earnings Ahead

Markets gapped higher at the open (up 0.83% in the SPY, up 0.88% in the DIA, and up 0.66% in the QQQ).  However, price then immediately reversed and faded the gap to trade back below Thursday’s close before reversing again.  At about 9:50 am, a steady rally began that lasted all the way into 3:15 pm when a small pullback took us into the close.  This action gave us large, white-bodied candles, with larger lower wicks and smaller upper wicks, that caused all three major indices to cross above their T-lines (8ema) and pop up out of the 3-week long consolidation range.  DIA has also crossed back above its 50sma and SPY is about to retest its own 50sma from below.

On the day, all 10 sectors are in the green with the Basic Materials (+3.29%) leading the way higher as Healthcare (+0.99%) lagged way behind the other sectors.  At the same time, the SPY was up 2.24%, the DIA was up 2.14%, and the QQQ up 2.76%.  Volume was slightly above average (for the first time in a long time).  Meanwhile, the VXX was down 2.33% to 13.40 and T2122 spiked back up into the overbought territory at 92.18.  10-year bond yields plunged down to 3.565% and Oil (WTI) was flat at $73.76 per barrel.  So, overall, it was a bullish day that finally broke out of the long consolidation, oddly on economic data that may cause the Fed to stay Hawkish.

In economic news, December Nonfarms Payrolls came in above expectations at +223k (compared to +200k forecasted but less than November’s +256k number).  This took the December Unemployment Rate down to 3.5% (versus the forecast of 3.7% and the November rate of 3.6%).  The December Participation Rate also increased slightly to 62.3% (from the November value of 62.2%).  However, the December Average Hourly Earnings came in lower than expected at +4.6% year-on-year (versus the forecast of +5.0% and less than the November reading of +4.8%).  This might indicate lower inflationary pressure on wages.  Later in the day, November Factory Orders showed a larger drop than forecast at -1.8% (compared to an expectation of -0.8% and an Oct. value of +0.4%).  Then, finally, ISM Non-Mfg. PMI came in significantly lower than expected at 49.6 (versus a forecast of 55.0 and a November value of 56.5).  So, most of this showed a stronger economy than was projected with less inflationary pressure than anticipated, but also a slightly contracting forward outlook in the Services sector. 

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In stock news, on Friday, TLSA announced it will cut prices on various Model 3 and Model Y cars.  Elsewhere, LUV said that it expects to post a loss for Q4 after canceling 17,000 flights in December.  Meanwhile, Reuters reported that China is in talks with PFE to secure licenses to allow its domestic drugmakers to produce a generic version of the antiviral drug Paxlovid.  At the same time, the FDA approved a new Alzheimer’s drug that was co-developed by BIIB.  In other FDA news, the agency announced that the AZN antibody cocktail Evusheld likely does not provide protection to the latest and most prevalent variant of covid.  Later in the afternoon, Reuters reported that MCD is planning corporate layoffs and a shift in emphasis toward building more restaurants according to leaked internal memos. 

In miscellaneous news, Congress finally elected Kevin McCarthy as Speaker of the House.  It took 15 rounds of voting over 4 days (the longest Speaker election in 164 years) and nearly came to blows between Republicans after the 14th round as a single extremist held the rest of the GOP (and Congress) hostage.  All the while, not a single Democrat crossed the aisle to resolve the matter.  However, in the end, the holdouts were persuaded by major concessions which allow more debate, allow easier amendments, divide the government funding into 12 different bills, give the House ability to defund the salary of any/all government officials, prohibit voting on increasing the debt ceiling without also cutting domestic spending, and finally allow any member of the House to individually call a vote to remove the Speaker at any time. This sets the stage for what will almost certainly be a more contentious, obstructive, and drama-filled two years than has been the case in a long time.  (And that’s saying something.)  Elsewhere, (and in better news) Natural Gas fell 17.1% last week (February contract), making it the third weekly decline in a row.  Meanwhile, Oil closed Friday flat, ending the week lower despite a healthy drop in the Dollar (which raises commodity prices).  Across the pond, Euro-area inflation fell back to single digits in December for the first time since August.

Over the weekend, Bazil suffered an even worse attack than the US suffered on January 6, 2021, putting the current US political problems into perspective. Thousands of supporters of the Trump-esque defeated ex-President Bolsanaro attacked, ceased, and briefly occupied the Brazilian Congress, Presidential Palace, and Supreme Court. Interestingly, in Brazil, it did not take a lying leader with the megaphone of major mass-media organizations behind him to whip the ignorant masses into rioting. There, it was accomplished in a much lower-tech manner. At any rate, the Brazilian military eventually drove the mobs away, but the damage was done. Xenophoia, tribalism, and “kicking down” politics had assaulted democracy. Perhaps more importantly to us, Brazilian business, and grain exports were temporarily halted by the national turmoil.

Overnight, Asian markets were green across the board.  Taiwan (+2.64%), South Korea (+2.63%), and Hong Kong (+1.89%) led the region higher.  Meanwhile, in Europe, we see nearly the same picture at midday.  Only the FTSE (-0.10%) is in the red, while the DAX (+0.50%), and CAC (+0.23%) lead that region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.30% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.45% open at this hour.  At the same time, 10-year bond yields are up a bit to 3.593% and Oil (WTI) has spiked 3.35% to $76.24/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 AYI and CMC before the opening bell.  Then after the close, JEF reports.

In economic news later in the week, on Tuesday, Fed Chair Powell speaks and the API Weekly Crude Oil Stocks are reported.  Then Wednesday, we get EIA Crude Oil Inventories.  On Thursday, December CPI, Weekly Initial Jobless Claims, the WASDE Ag Report, and the December Federal Budget Balance are reported. Finally, on Friday, we get December Import/Export Prices, Michigan Consumer Sentiment, and hear from Fed member Harker.

In terms of earnings, on Tuesday, ACI and SNX report.  Then Wednesday, we hear from BSX and KBH.  On Thursday, there are no major earnings reports.  However, on Friday, earnings season kicks off again as we hear from BAC, BK, BLK, C, DAL, FRC, JPM, UNH, WFC, and WIT report.

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Finally, GS announced early this morning that it will be cutting 3,200 jobs later this week after completing an internal cost-cutting review. Bloomberg reports that when GS reports Friday it will unveil a new unit (which will house all of the GS credit card and installment-lending business) and that new unit will show a $2 billion pretax loss. Elsewhere, the Dollar is trading near a seven-month low today. This gives a boost to all commodities in early trading.

With that background, it looks like all three major indices are looking to follow Asia and Europe higher (at least as of premarket). The follow-through on Friday’s strong candle has the SPY retesting its 50sma and resistance from previous price action. All three of the major indices are above their T-line (8ema), but over-extension is not yet a problem in any of them. With CPI and Fed speakers ahead later in the week, do not be surprised to see a move but hen a rest as the market then hopes for a clue as to how the Fed will act at the end of the month.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

December Payroll Data To Call Next Tune

For the first time in the new year, markets gapped down at the open Thursday (0.50% in the SPY, 0.50% in the DIA, and 0.68% in the QQQ).  All three major indices then spend the rest of the day wobbling sideways in a three-quarters of a percent range below the open. This action gave us black-bodied, indecisive candles on the day.  All three of the indices are now back just below their T-line (8ema) and remain in the recent consolidation.  The DIA is also back below its 50sma with the QQQ looking like a “Dreaded-h pattern” setup.

On the day, eight of the 10 sectors were in the red with the Technology (-2.06%) and Utilities sector (-1.82%) leading the way lower as the Energy sector (+1.24%) held up best.  Meanwhile, the SPY was down 1.14%, the DIA was down 1.00%, and the QQQ was down 1.57%.  Yet again, this took place on lower-than-average volume.  At the same time, the VXX was up 0.81% to 13.72 and T2122 dropped back down into the mid-range at 39.37.  10-year bond yields are up slightly to 3.72% and Oil (WTI) was up 1.37% to $73.84 per barrel.  So, overall, it was a bearish day that remains in the choppy consolidation of the last 2+ weeks.

In economic news, December ADP Nonfarm Employment was up more than expected, adding 235k jobs (compared to a forecast of +150k and the Nov. reading of +182k).  At the same time, both Imports and Exports were down in November, resulting in a Nov. Trade Balance that was better than expected at -$61.50 billion (versus a forecast of -$73.00 billion and the October value of -$77.80 billion).  Later the Dec. S&P Global Composite PMI came in better than expected at 45.0 (compared to the forecast of 44.6 but still worse than the November reading of 46.4).  Then the US December Services PMI came in at 44.7, which was better than expected (versus the forecast of 44.4 but again still worse than the Nov. reading of 46.2).  Finally, EIA Crude Oil Inventories came in higher than expected at 1.694 million barrels (compared to a forecast of 1.154 million barrels and stronger than the prior week’s 0.718 million barrels). 

SNAP Case Study | Actual Trade

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In stock news, SFIX announced Thursday that its CEO will be stepping down effective immediately and also said it would be cutting about 20% of its workforce.  Elsewhere, CAG raised its full-year sales forecast for 2023 by 7%-8% mostly on the impact of price hikes, and also increased its earnings forecast for the year.  At nearly the same time, LW also raised its own 2023 revenue forecast to $4.8-$4.9 billion and significantly raised EPS guidance from $2.45-$2.85 all the way to $3.75-$4.00/share.  Then BBBY announced that it was exploring options including bankruptcy to address its declining situation.  Overseas, AAPL’s primary phone maker Foxconn said that production at its main plant in China had “basically returned to normal” after a 12% decrease in December.  Meanwhile, LAZR announced that its Q4 production deals (orders) had exceeded the target for 60% year-on-year growth in its order book.  Majority owner of WWE (former CEO) Vince McMahon elected himself and two allies to the board of directors (removing three others) with an eye on returning to a leading role one year after leaving over a sexual harassment scandal.

In government action news, a NY Judge has ordered that JPM does have to face a lawsuit from sunglasses maker Ray-Ban over a $272 million cyber theft from the French company’s New York bank account.  Elsewhere, a US Bankruptcy judge has ruled that Celsius Networks actually owns most of its customers $4.2 billion crypto deposits. This means the customers will be last in line for payout from the lender’s bankruptcy case.  Later in the day, PTON agreed to pay a $19 million fine for failing to promptly report a defect in their treadmills that could cause serious injury.  Meanwhile, the FTC has proposed a rule that would forbid any company from requiring employees to sign non-compete or “training repayment” agreements.  The rules are months from final passage, but if put into effect the FTC says it expects this would raise the wages of 30 million Americans by a total of $300 billion per year.

In miscellaneous news, for the second time in a week, natural gas futures (natty) plunged 11% in a day after Wednesday’s 5% increase.  The very warm start to winter in the Northern Hemisphere (especially Europe) had hurt gas prices and put a large crimp in Russia’s efforts to squeeze Europe over its support of Ukraine.  Elsewhere, Fed ultra-hawk Bullard said Thursday that he is optimistic the new year will bring relief from inflation.  He also said “the probability of a soft landing has increased compared to where it was in the fall” adding that this is a great time to fight inflation because of the strong job market.

Overnight, Asian markets were mixed again.  South Korea (+1.12%) was an outlier to the upside with Australia (+0.65%), Thailand (+0.60%), and Japan (+0.59%) leading the region higher.  Meanwhile, India (-0.74%), Singapore (-0.48%), and Hong Kong (-0.29%) paced the losses.  In Europe, the bourses are mostly green at midday.  The FTSE (+0.27%) and CAC (+0.30%) lead the region higher while the DAX (-0.04%) is one of only two exchanges in the red in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a mixed and flat start to the day (ahead of December Payrolls data).  The DIA implies a +0.12% open, the SPY is implying a -0.02% open, and the QQQ implies a -0.33% open at this hour.  At the same time, 10-year bond yields are just slightly higher at 3.729% and Oil (WTI) is off fractionally to $73.38/barrel in early trading.

The major economic news events scheduled for Friday include Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Participation Rate, and Dec. Unemployment Rate (all at 8:30 am), Nov. Factory Orders and Dec. ISM Non-Mfg. PMI (both at 10 am).  The major earnings reports scheduled for the day are limited to GBX before the opening bell.  There are no major earnings reports scheduled for after the close.

So far this morning, GBX has reported a beat on the revenue line while missing on the earnings line.

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Unless you’ve been living under a rock, you know the other news of the day which is that the US House has yet to elect a Speaker as the GOP flounders to get its act together. The House adjourned again last night after an 11th attempt failed to reach the 218-vote majority required to elect a Speaker. The GOP is split with 6 “Never McCarthy” votes, 14 “Guarantee me more power” votes, and 202 “McCarthy” votes (of those 60 or so are said to be “McCarthy only” votes). The House will resume speech-making (nominations) and voting again at noon today as the fourth day of the Republican majority gets back underway. Again, if there is any good news, it is that without any real “GOP Platform Agenda” there is no real work that is being missed yet. The first real “must pass” legislation will be the US Debt Ceiling increase and that will not come for a few weeks. So far, markets do not seem to care and are just enjoying the distraction.

With that background, it looks like all three major indices are waiting to see what the December Payrolls data looks like before deciding what to do. Still, at this point in the premarket, all three major indices are close below their T-line (8ema) with the SPY retesting a support level and the QQQ seeming to work on a bearish Dreaded-h pattern. The consolidation range of the last 3 weeks continues to have a grip on the market. Regardless of the Payrolls data (where again, good news will likely be bad news for the market and visa-versa), be careful about chasing either direction on a Friday. No matter what it does today, this market can still break in either direction after reconsideration… especially a two-day reconsideration. If you do trade the post-announcement move, be very nimble or be prepared to wait out any reversal pressure your position might face. Volumes continue to be light as the big money has not decided on a direction yet.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Consolidation Holds As We Ride The T-Line

Markets gapped up again on Wednesday (0.60% in the SPY, 0.42% in the DIA, and 0.83% in the QQQ) and then looked to be following Tuesday’s example as we sold off to reach the lows by 10:15 am.  However, then the dip-buyers stepped in to lead a steady rally that lasted until noon.  After a 45-minute rest for lunch, the bears stepped in to drive us back near the lows by 2:30 pm, when another rally took over.  This action gave us indecisive Doji or Spinning Top-like candles on the day.  The large-cap indices managed to climb back just above while the QQQ remains just below its T-line (8ema).  The DIA is also continuing to ride along its 50sma.

On the day, all ten of the sectors were in the green with the Consumer Cyclical sector (+3.11%) way out front leading the way higher as the Energy sector (+0.12%) lagged behind.  Meanwhile, the SPY was up 0.75%, the DIA was up 0.40%, and the QQQ was up 0.47%.  This took place on lower-than-average volume.  At the same time, the VXX was down 2.72% to 13.61, and T2122 spiked back up to just outside of the overbought territory at 77.72.  10-year bond yields fell again to 3.679% and Oil (WTI) was down a whopping 4.85% to $73.21 per barrel.  So, overall, it was a very indecisive back-and-forth day that remains in the consolidation of the last 2+ weeks.

In economic news, December ISM Mfg. PMI came in slightly below expectations at 48.4 (compared to a forecasted value of 48.5 and below the November value of 49.0).  Meanwhile, November JOLTs Job Openings came in higher than expected at 10.458 million (versus the 10.000 million forecast and the October value of 10.512 million).  Later, the December FOMC Minutes were released.  In the minutes, it was clear that overall the group felt that restrictive policy was still in order until data indicated that inflation was clearly in a “sustained” downward trend toward 2 percent.  The minutes also show that no voting members expect rate cuts during 2023.  Finally, after the close, the API Weekly Crude Oil Stock Report came out showing a 3.298-million-barrel build (the first increase in three weeks), which was unexpected given the general consensus that the holiday week travel could cause a drawdown. 

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In stock news, CRM announced it is cutting 10% of its workforce (which should be roughly 7,900) and reducing office space in cost-cutting measures.  CRM had already laid off hundreds of employees in November.  Later, GM reclaimed its US sales crown from TM in 2022. GM sold 2.27 million vehicles (up 2.5% over 2021) compared to TM sales of 2.1 million (down 9.6% from 2021).  Meanwhile, BLK is delaying redemptions from its UK property funds after a flood of investors have been seeking to exit Britain’s property market.  During the afternoon, JEF surged following a Nikkei Asia report that SMFG is in the process of raising its stake in Jeffries.  The CEO of SMFG told the outlet that he wants to increase the stake to between 20% and 50% of JEF as soon as discussions with US regulators and JEF management are concluded (SMFG already owns a 5% stake in JEF). 

In government action news, CACC was sued by the US Consumer Finance Protection Bureau and the NY State Attorney General for predatory auto lending (misleading its customers and tricking them into taking high-cost loans on used cars).  Elsewhere, COIN reached a $100 million settlement (which includes a $50 million penalty) with the NY State Dept. of Financial Services for failure to comply with laws regarding account creation.  The FTC disclosed that it had forced OI to drop non-compete requirements that limited where its employees could seek work after leaving OI.  (The agreements had covered about 1,700 workers.)

In energy news, Venezuela’s lack of dredging maintenance has caused a problem for CVX as it attempts to load and move four tanker ships.  The joint ventures with the Venezuelan government intended to bring heavy crude to the US (Mississippi refineries).  The channel to oil terminal in Venezuela is only deep enough to allow tankers to load up to half capacity.  Small tankers are being used to shuttle the heavy oil to a ship-to-ship transfer at sea to fill the larger tankers.  Elsewhere, as mentioned above, the API Weekly Crude Stock report also showed a 1.2-million-barrel build in gasoline (compared to an expected 486k barrel drawdown).  However, there was also a 2.4-million-barrel drawdown in distillate (diesel and heating oil) stocks.

Overnight, Asian markets were mostly green.  Shenzhen (+2.13%), Singapore (+1.55%), and Hong Kong (+1.25%) led the region higher while only a couple of exchanges were in the red.  In Europe, we see a more mixed picture but still leaning to the upside at midday.  The FTSE (+0.46%), DAX (-0.09%), and CAC (+0.05%) lead the region as usual with no clear direction chosen yet in early afternoon trade.  As of 7:30 am, US Futures are pointing to a start to the day just on the green side of flat.  The DIA implies a +0.05% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.29% open at this hour.  At the same time, 10-year bond yields are up a bit to 3.688% and Oil (WTI) is up 2.27% to $74.49/barrel in early trading.

The major economic news events scheduled for Thursday include Dec. ADP Nonfarm Employment Change (8:15 am), Weekly Initial Jobless Claims and Nov. Trade Balance (both at 8:30 am), Dec. Global Composite PMI and Dec. Services PMI (9:45 am), and EIA Weekly Crude Oil Inventories (11 am).  The major earnings reports scheduled for the day include STZ, HELE, LW, MSM, RPM, SCHN, and WBA all before the opening bell.  There are no major earnings reports scheduled for after the close.

In economic news later in the week, on Friday, we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Participation Rate, Dec, Unemployment Rate, Nov. Factory Orders, and Dec. ISM Non-Mfg. PMI.  And in terms of earnings, on Friday, GBX reports.

So far this morning, WBA, CAG, MSM, and HELE have all reported beats on both the revenue and earnings lines.  Meanwhile, RPM missed on revenue while reporting in line on earnings.  (STZ, LW, and SCHN report closer to the opening bell.) 

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In late-breaking news, AMZN has announced it will be laying off more than 18,000 employees.  This is a much larger number than the 10,000 layoffs the tech giant had originally planned.  We also have three previously unplanned Fed speakers today (Harker at 7:30 am, Bostic at 9:20 am, and Bullard 1:20 pm).  And on the Congress front, after six failed votes, the Republicans are no closer to electing a new Speaker of the House as a group of 20 extreme conservatives are revolting in a combination of “give us even more power”, “let any one GOP Congressman call for a new Speaker vote at any time”, and “I’ll never vote for McCarthy” protests.  A seventh vote will begin again at noon today.  (The good news is that since the GOP has no real agenda, the first real piece of House business does not have to come for weeks, when the Debt Ceiling will need to be increased to avoid the US defaulting on its debt.)

With that background, it looks like all three major indices are trying to start the day slightly green. The SPY and DIA are holding on above their T-line and the QQQ is retesting its own T-line (8ema) from below this morning. The consolidation which has been holding for the last two weeks still seems to have a grip on the market. So, be careful about getting too bullish too soon. This market could still break in either direction. Sitting on your hands remains not the worst idea ever. However, if you trade, continue to either be very nimble or prepared to wait out any short-term pressure your position might face. The volumes are likely to pick up this week but the big money eases back into the market slowly and it hasn’t happened yet. (Remember, the big money does not chase. They buy strictly in a price band and will wait for the price to come back to them.)

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

Swing Trade Ideas for your consideration and watchlist: EOSE, MASI, CLF, CAT, IAG, BBWI, BIDU, and AUY. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bears Pound TSLA As Bull Trap Starts 2023

On Tuesday, stocks started the year off with a bull trap head-fake as the major indices all gapped higher (SPY gapping 0.54% higher, DIA gapping 0.33% higher, and QQQ gapping 0.91% higher) and then following through to the upside for 10-15 minutes.  However, as I said, this was a bull trap that was met with a selloff that lasted until 12:50 pm when we hit the lows of the day.  From that point, stocks have churned to the side in a fairly tight range before a minor rally in the last 90 minutes.  This action gave us black-bodied candles with wicks on both ends that gapped up to open above the T-line and then crossed back down.  The SPY, DIA, and QQQ all ended as Dark Cloud Cover signals but not ideal ones with the lower wicks in place.

On the day, seven of the ten sectors were in the red with the Energy sector (-4.23%) way out front leading the way lower as the Communication Services sector (+0.91%) held up best.  Meanwhile, the SPY was down 0.42%, the DIA was down 0.03%, and the QQQ was down 0.68%.  This took place on lower-than-average volume, with the QQQ notably lower than the two large-cap indices.  At the same time, the VXX was down just less than 1% to 13.99 and T2122 fell but still remains in the mid-range at 40.70.  10-year bond yields fell to 3.767% and Oil (WTI) was down 3.84% to $77.21 per barrel.  So, overall, it was a “gap and crap” bull trap day to start the year off by staying in the consolidation of the last 2+ weeks.

In economic news, December Mfg. PMI came in exactly as expected at 46.2 (which was down from the November value of 47.7).  Elsewhere, US construction spending in November unexpectedly rebounded, climbing 0.2% and lifted by nonresidential structures.  (Forecasts had expected a decrease of 0.4%.) Single-family homebuilding still fell for the month despite the overall increase.

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In stock news, LUV has been sued for not providing refunds to all the passengers left stranded by the more than 15,000 flights it canceled around Christmas.  (Instead of a refund, LUV gave people impacted 25,000 airline points.) In a letter to the CEO of LUV, US Sec. of Transportation Buttigieg had said last week that the law requires refunds unless the passengers accept rebookings.  At the same time, NVDA has announced a partnership with Taiwanese contract manufacturer Foxconn to make “electronic control units” for use in self-driving vehicles.  Elsewhere, a small portion of MSFT employees (video game testers at the subsidiary Zenimax Studios) have voted to form the first union among the tech giant’s workforce.  MSFT released a statement saying they would avoid a formal election process overseen by the NLRB by voluntarily recognizing the union after the overwhelming vote by the 300 employees.  Late in the day, the state of Kentucky warned C, JPM, and BLK of potential divestment from those stocks over those companies’ refusal to finance projects of fossil-fuel energy companies.  After the close, South Korea fined TSLA $2.2 million for misleading customers about the driving range of its vehicles in lower temperatures. (Cold weather can cut the range of TSLA vehicles by up to 51%.)  Finally, also after the close, AMZN said it has reached an agreement with unspecified lenders for an $8 billion unsecured loan (which is odd, considering they have 35 billion in cash and cash equivalents on hand).

In miscellaneous news, the FBI arrested two Washington state men in connection with Christmas Day attacks on electric substations in the Tacoma area.  (It was not reported whether the attack in Washington was linked to the North Carolina and South Carolina substation attacks earlier in December.)  Elsewhere, NYMEX front-month Natural Gas futures broke below $4/mmBtu, down 11% on the day.  This brought natty down 40% from the best December price and down 60% from the August high.  In Britain, UK rail workers went on strike Tuesday and will continue their strike for a week.  Later in the month, both ambulance drivers and nurses announced they will strike as well. Finally, TSLA got hammered again Tuesday, closing down 12.24%, which was actually 3.5% better than its low for the day.

In government news, after failing to elect a new Speaker of the House during the first three rounds of voting, Republicans adjourned the House for the day.  It appears that 20 extreme GOP members have dug in with their opposition to presumptive Speaker McCarthy and his supporters are not backing down either.  This is the first multi-ballot vote for Speaker of the House in 100 years (and only the second such situation since before the Civil War). The House will reassemble and resume voting for a Speaker again at noon eastern.

Overnight, Asian markets were mixed with Hong Kong (+3.22%) shooting higher on the backs of BIDU and BABA Hong Kong shares after Ant Group was given permission to expand into consumer finance.  South Korea (+1.68%), Australia (+1.63%), and New Zealand (+1.00%) rounded out the leaders.  On the other side, Japan (-1.45%) and India (-1.04%) paced the losses.  Meanwhile, in Europe, the exchanges are mostly green at midday.  The FTSE (+0.65%) lags, with the DAX (+1.64%) and CAC (+1.74%) leading the region higher.  There are only a couple of exchanges in the red, chiefly led by Norway (-1.24%) in early afternoon trade.  As of 7:30 am, US Futures are pointing toward another green start to the session.  The DIA implies a +0.21% open, the SPY is implying a +0.26% open, and the QQQ implies a +0.43% open at this hour.  At the same time, 10-year bond yields are plunging this morning to 3.681% and Oil (WTI) is off another 2.90% to $74.72/barrel.

The major economic news events scheduled for Wednesday include December ISM Mfg. PMI, Nov. JOLTs Job Openings (both at 10 am), FOMC Meeting Minutes (2 pm), and API Weekly Crude Oil Stock (4:30 pm).  The major earnings reports scheduled for the day are limited to UNF before the opening bell.  There are no major earnings reports scheduled for after the close.

In economic news later in the week, on Thursday, Dec. ADP Nonfarm Employment Change, Weekly Initial Jobless Claims, Nov. Trade Balance, Dec. Global Composite PMI, Dec. Services PMI, and EIA Weekly Crude Oil Inventories are reported.  Finally, Friday, we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Participation Rate, Dec, Unemployment Rate, Nov. Factory Orders, and Dec. ISM Non-Mfg. PMI.

This is another very light week for earnings as on Thursday we get reports from CAG, STZ, HELE, LW, MSM, RPM, SCHN, and WBA.  Finally, on Friday, GBX reports.

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In late-breaking news, Bloomberg reports China is pausing its massive investments into creating its own semiconductor industry meant to compete with the US.  Beijing will instead focus efforts on pumping liquidity into the property sector as a massive wave of Covid is pressuring the housing system.  Meanwhile, in the US, mortgage demand fell 13.2% last week compared to two weeks earlier.  This came as 30-year fixed-rate mortgages increased from 6.34% to 6.58% (nearly double the 3.33% that ended 2021).

With that background, it looks like all three major indices are trying to gap up to retest their T-line (8ema) this morning. Just remember yesterday’s “gap and crap” before you go chasing the move. At least at the open, all three look like they will still be in that consolidation that has been holding as we have chopped around the last two weeks. So, be careful about getting too bullish too soon. Sitting on your hands is not the worst idea ever. However, if you trade, continue to either be very nimble or prepared to wait out any short-term pressure your position might face. The volumes are likely to pick up this week after the holidays but don’t be surprised if the big money eases back into the market slowly. (Remember, the big money does not chase. They buy strictly in a price band and will wait for the price to come back to them.)

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Bulls Welcome 2023 With A Small Pop

Markets gapped on the last day of 2022 (opening down 0.70% in the SPY, down 0.45% in the DIA, and down 1.09% in the QQQ).  All three major indices then ground sideways in a tight range near that opening level.  However, at 1 pm there was a 30-minute selloff across the board taking us to the lows of the day at 1:30 pm.  Another 90-minute sideways grind ensued before a strong, year-ending rally kicked in at 3 pm.  This rally took stocks out on their highs for the day.  None of the three indices was able to get back to its T-line (8ema) and all three still remain below their 50sma.  However, the SPY was able to stay over the support level that has held it up for the last two-plus weeks.  This action gave us white-bodied Hammer candles in the SPY and DIA and a larger white-bodied candle with a lower wick in the QQQ.

On the day, eight of the ten sectors were in the red with the Utilities sector (-0.96%) leading the way lower as the Energy sector (+0.45%) held up best.  Meanwhile, the SPY was down 0.26%, the DIA was down 0.22%, and the QQQ was down just 0.06%.  This took place on lower-than-average volume, with the QQQ notably lower than the two large-cap indices.  At the same time, the VXX was flat at 14.12 and T2122 climbed but remains in the mid-range at 55.56.  10-year bond yields climbed to 3.879% and Oil (WTI) was up 2.69% to end the year at $80.51 per barrel.  So, overall, it was a gap-down, dead-market day with a late-day rally on light volume, all within a downtrend consolidation.

For the month of December, SPY closed down 6.19%, the QQQ closed down 9.23% and both printed Bearish Engulfing candles.  However, the DIA held up best, closing down 4.28% and just printing a black candle that managed to stay above its Monthly T-line.  On the year, SPY fell 19.48%, DIA was down just 8.80%, but QQQ led the way by falling a whopping 33.07%.  That included the big dos (market movers) TSLA (down more than 65% on the year), AAPL (down almost 27% on the year), AMZN (down almost 50%), MSFT (down almost 29%), NVDA (down more than 50%), AMD (down 55%), META (down more than 64% on the year), GOOG (down almost 39%), NFLX (down more than 51%), and INTC (down almost 49% on the year).

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In economic news, on Friday, the Chicago PMI came in considerably stronger than was expected at 44.9 (versus a forecast of 40.0 and a November reading of 37.2).  Yet it is important to note that any reading below 50.0 indicates a contraction.  Then on Saturday, China released its own PMI.  The reading showed that the PMI fell to 47.0 from the November reading of 48.0 (economists had forecast a value of 48.0).  This was the third straight lower reading and the largest fall since the beginning of the pandemic in 2020.

In stock news, on Friday, Canada’s Antitrust Tribunal finally (after months of turmoil) approved the ROG acquisition of SJR for $14.77 billion.  This ruling dismissed the Canadian government’s opposition to the deal.  However, the Canadian Commissioner of Competition indicated the government will appeal the decision, but this was a major hurdle that was overcome.  Meanwhile, in the pharmaceutical space, Reuters reports that PFE, GSK, BMY, AZN, and SNY raised the list price of 350 drugs as of January 1. The increases were 6.4% on average and follows 1,400 drug price increases during 2022.  The drug industry says this is in preparation for the Inflation Reduction Act that was passed in 2022 and that allows the government to begin negotiating drug prices, but not until 2026.  After the close Friday, ACTG announced it is conducting an internal investigation into the apparent misconduct of its former CEO over the misuse (personal use) of funds and for making charitable contributions in his own name.  Also, after the close, a US District Judge ordered NCLH to pay the government of Cuba $110 million in damages and another $3 million in legal fees for use of a port.

In miscellaneous news, TSLA reported record Q4 vehicle deliveries of 405,278 (which was a 40% increase over Q4 2021).  However, the number was still 15,500 below the consensus analyst estimate.  Elsewhere, Eurozone Mfg. PMI rose in December to 47.8 (up from 47.1 in November).  The number still does not indicate expansion, but the trend is positive.  In particular, both Germany and France showed gains for the month. Meanwhile, a new variant of the Omicron strain of Covid is quickly becoming the most prevalent in the US.  The XBB.1.5 variant is deemed “highly immune evasive” meaning existing vaccines and treatments are less effective against this strain.  The number of cases of this variant are doubling each week at the moment and currently account for 41% of all US cases according to the CDC. Finally, it flew under the radar, but there was yet another terror attack on New Year’s Eve. This time it was “only” a single Islamic extremist with a machete in NYC, but this will make headlines and is worth watching for potential additional attacks or news.

Overnight, Asian markets were mixed.  Malaysia (-1.44%) and Australia (-1.31%) paced the losses.  Meanwhile, Hong Kong (+1.84%), Shenzhen (+0.92%), and Shanghai (+0.88%) led the gainers.  In Europe, the exchanges lean heavily to the green side with only Norway (-0.26%) in the red at midday.  The FTSE (+1.49%), DAX (+0.74%), and CAC (+0.59%) are leading the region higher in early afternoon trade. As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.28% open, the SPY is implying a +0.25% open, and the QQQ implies a +0.37% open at this hour.  At the same time, 10-year bond yields are down to 3.771% and Oil (WTI) is off 1.27% to $79.23 per barrel in early trading.

The major economic news events scheduled for Tuesday are limited to December Mfg. PMI (9:45 am).  There are no earnings reports scheduled for the day.

In economic news later in the week, on Wednesday, we get Dec. ISM Mfg. PMI and Nov. JOLTs Job Openings.  Then, Thursday, Dec. ADP Nonfarm Employment Change, Weekly Initial Jobless Claims, Nov. Trade Balance, Dec. Global Composite PMI, Dec. Services PMI, and EIA Weekly Crude Oil Inventories are reported.  Finally, Friday, we get Dec. Avg. Hourly Earnings, Dec. Nonfarm Payrolls, Dec. Participation Rate, Dec, Unemployment Rate, Nov. Factory Orders, and Dec. ISM Non-Mfg. PMI.

This is another very light week for earnings as on Wednesday we hear from UNF.  On Thursday we get reports from CAG, STZ, HELE, LW, MSM, RPM, SCHN, and WBA.  Finally, on Friday, GBX reports.

LTA Scanning Software

In government news, the 118th Congress will convene today with the GOP in control of the House. However, there is division among the GOP caucus as it appears that Republican Leader (and presumptive Speaker of the House) McCarthy does not yet have the votes to be confirmed as Speaker. Even after promising to give away a ton of power, dollars, and control (among his giveaways was allowing any 5 Republicans to be able to force a vote of “no confidence” causing a new election for Speaker) this vote will be a close-run thing. Some analysts think the holdouts will force a second or third ballot to extract more concessions. However, there is no public contender or alternative for the job. Regardless of the outcome, it looks like the process will take a little more time and will therefore delay the swearing-in of the House (which only follows the election of the Speaker).

With that background, it looks like all three major indices are trying to gap up through their T-line (8ema) this morning. However, at least at the open, they look like they will still be in that consolidation that has been holding as we have chopped around the last two weeks. So, be careful about getting too bullish too soon. A morning pop can be (and regularly has been) faded as well as one up day being followed by a down day the next. So, either be very nimble or prepared to wait out any short-term pressure your position might face. The volumes are likely to pick up this week after the holidays but don’t be surprised if the big money eases back into the market. Remember, they like to do bracket-price buying.

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

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

TC2000 Discount

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

Consolidation Continues As 2022 Ends

Markets gapped higher at the open Thursday as the SPY opened 0.79% higher, the DIA opened 0.61% higher, and the QQQ opened 1.13% higher.  All three major indices then saw a morning follow-through to the upside reaching the highs at about noon.  Then the doldrums took over as the entire market traded sideways in a very tight range and on low volume all afternoon. The SPY and DIA both did manage to climb back above their T-line, with the DIA also crossing back above its 50sma and the SPY gapped up through the support level it failed Wednesday.  This action is giving us white-bodied candles with small wicks at both ends.  The DIA is also a Bullish Harami signal.

On the day, all ten sectors were in the green with the Technology sector (+3.08%) leading the way higher as the Consumer Defensive sector (+0.55%) lagging behind.  Meanwhile, the SPY was up 1.78%, the DIA was up 1.07%, and the QQQ was up 2.44%.  At the same time, the VXX was down 1.26% to 14.13 and T2122 climbed out of the oversold territory into the mid-range at 47.47.  10-year bond yields fell back down to 3.826% and Oil (WTI) is down fractionally to $78.70 per barrel.  So, overall, it was a bullish, low-volume day in a downtrend consolidation.

In economic news, the Weekly Initial Jobless Claims came in exactly as expected at 225k (versus a forecast of 225k and last week’s reading of 216k).  Later in the day, the EIA Weekly Crude Oil Inventories came in unexpectedly higher than forecasted, with a build of 0.718 million barrels (compared to a forecasted drawdown of 1.520 million barrels and the prior week’s drawdown of 5.894 million barrels).  EIA also said that gasoline inventories fell unexpectedly by 3.1 million barrels (compared to an expected inventory build of 520k barrels). Meanwhile, distillate (diesel and heating fuel) inventory unexpectedly grew 282k barrels (versus a forecasted 2.05 million barrel drawdown).

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In stock news, Thursday morning, Elon Musk told TSLA employees they should not be bothered by “stock market craziness” (like TSLA being down 70% on the year).  That may be a tougher sell to higher-level employees who get part of their compensation in stock options.  Musk also urged them to “go all out the next few days” to make TSLA Q4 numbers look as good as possible.  Later, the Wall Street Journal reported that AAPL iPhone production is starting to catch up with demand.  The paper reported that the situation is far from normal (due to waves of covid cases), but at least it was better than in November when workers were rioting to get out of the main production facility (in order to avoid infection).  Elsewhere, LUV said late in the day that it plans to return to normal operations “with only minimal disruptions” on Friday after over a week of massive cancelations and delays.  Earlier in the day, LUV had said the outages of the last week will definitely have an adverse impact on Q4 results.  Finally, HSY was hit with a class action lawsuit claiming the company’s dark chocolate contain harmful levels of lead and cadmium.

In energy news, TRP said Thursday that it has completed a controlled restart of the Keystone pipeline after a 21-day outage.  While the cleanup from the third major spill from the pipeline will take months to complete, the flow is back to the 622k barrels per day as it was prior to the closure.

In miscellaneous news, the US Treasury Dept. said Thursday that starting on Jan. 1, electric vehicle leases can qualify for up to $7,500 in tax credits.  The decision also lifts the 200,000 vehicles per manufacturer cap and allows cars assembled outside of the US to qualify.  Essentially, this group of decisions will benefit all makers o electric vehicles.  In related news, Energy-company-funded US Senator Manchin has called for the Treasury Dept. to pause the implementation of those tax credits (despite it having previously been passed into law) saying the Treasury decisions are inconsistent with the intent of the law and would weaken our country’s energy security.

Overnight, Asian markets were mixed, but leaned to the upside on mostly modest moves.  South Korea (-1.93%) was an outlier to the downside while Shanghai (+0.51%), Thailand (+0.45%), and Taiwan (+0.37%) led the more numerous gainers.  In Europe, with the lone exception of Athens (+0.55%), we see red across the board at midday.  The FTSE (-0.48%), DAX (-0.83%), and CAC (-0.65%) are leading the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the last day of the year.  The DIA implies a -0.31% open, the SPY is implying a -0.47% open, and the QQQ implies a -0.75% open at this hour.  At the same time, 10-year bond yields are up a bit to 3.839% and Oil (WTI) is off about a half of a percent to $78.07/barrel in early trading.

The major economic news events scheduled for Friday are limited to Chicago PMI (9:45 am).  There are no earnings reports scheduled for the day.

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In late-breaking news, there is word out of Beijing that they have found a promising covid treatment, claimed to be as effective as PFE’s Paxlovid. The new pill is so far called VV116 (developed by two Chinese drug makers) and trials are showing it may have fewer side effects than the PFE treatment. Beyond that, the key things to keep in mind today are that this is the last day of 2022 trading, and also we have a 3-day weekend ahead. So, get your account ready (small, hedged, or purposefully ready to ride out volatility) for the long news cycle.

With that background, it looks like all three major indices are looking to open up back below their T-line (8ema) but still inside the choppy bear trend consolidation pattern of the last two weeks. The DIA is also looking to open up back below its 50sma as that test continues. At this point, over-extension is not a problem in any of the major indices. However, remember that we are likely to continue seeing very light volume as fund managers get out of town to extend their New Year’s weekend celebration even further. Obviously, think long and hard before you go chasing too many new positions unless you are very nimble. This is not the time to be trying to save your month or year with some hero trade.

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

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

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🎯 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.

Free YouTube Education  •  Subscription PlansPrivate 2-Hour Coaching

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

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