2022 Winds Down as QQQ Chases YTD Low

Markets opened flat on Wednesday and then, after an hour of waffling sideways, began a slow but consistent roller coaster ride lower.  All three major indices have now fallen below their T-lines (8ema) and the DIA is also dropped through its 50sma (the other two have been below their own 50sma for some time).  The SPY also fell through its support level (which had held it up since 12/19).  For its part, QQQ closed at a new low close for the year, and looks like it is on the hunt to reach a new 2022 overall low. This action gave us black-bodied candles in the DIA, SPY, and QQQ. (They could be seen as Evening Star signals in the DIA and SPY.) Yet again, this is happening at a very low volume.

On the day, all ten sectors were in the red with the Energy sector (-2.43%) leading the way lower while the Healthcare sector (-0.55%) held up best.  Meanwhile, the SPY was down 1.22%, the DIA was down 1.14%, and the QQQ is down 1.32%.  At the same time, the VXX was down 0.21% to 14.31 and T2122 fell back into the oversold territory at 14.31.  10-year bond yields surged from the early lows to 3.888% and Oil (WTI) is down just over one percent to $78.66 per barrel.  So, overall, it was a bearish, but low-volume day.

In economic news, November Pending Home Sales came in well below expectations at -4.0% (versus the forecast of -0.8% but better than the October reading of -4.6%).  Then, after the close, the API Weekly Crude Oil Stock Report showed that inventories fell by 1.3 million barrels last week (compared to a drawdown of 3.069 million barrels in the week prior).  This was the second straight week of oil inventory declines.  However, the API also showed a build in gasoline inventories by 510k barrels and an increase in distillate stocks by 388k barrels.

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In stock news, LUV continues to struggle as it was forced to cancel 60% of its flights (another 2,500) on Wednesday.  The airline is in serious trouble as it has already had to cancel nearly 60% of Thursday’s flights.  Elsewhere, GILD purchased the remaining rights for an experimental cancer therapy from JNCE for $67 million.  (GILD already owned a portion of those rights.  This deal also eliminates the GILD potential liability of  needing to pay JNCE up to $685 million in milestone payments as well as percentage of sales royalties if the drug does get to market.)  Meanwhile, ABB completed the sale of its 19.9% remaining stake in the power grid business which it had previously sold 80.1% to Hitachi.  Late in the day, the US 9th Circuit Court of Appeals revived a lawsuit against GOOGL, HAS, MAT, and other companies for violating the privacy of children (luring kids under age 13 to their websites and then tracking online them without parental consent).  The decision was unanimous by a 3-0 vote.

In energy news, Reuters reported Wednesday that Russian natural gas exports are now expected to come in 45% lower in 2022 than they did in 2021.  This includes the increase in exports to China.  As a result (and partially offsetting the volume loss), the global average price of natural gas has increased 45% during 2022.  More significantly, the trends are expected to accelerate in 2023 since the EU ban on Russian natural gas has now come into effect.  In related news, ship insurers said Wednesday that they are cancelling war risk coverage across the Russia, Ukraine, and Belarus region as of January 1.  This is a response to the re-insurers cancelling coverage due to sanctions. However, under pressure from the Japanese government, Japan’s own insurers have decided to continue covering ships in Russian waters.   Finally, XOM has filed suit against the EU in a move aimed to block the new windfall profits tax (which could cost XOM up to $2 billion by the end of 2023). 

In miscellaneous news, the US announced Wednesday that it is reinstituting rules that require passengers 2 years of age and older to get a negative covid test to enter the US from China, Hong Kong, and Macau.  In Europe, Italy announced they will begin testing incoming passengers from China and they also asked the EU to institute tighter restriction on travelers from the China region.  Finally, related to the Russian invasion of Ukraine, Russia fired another massive salvo of more than 100 missiles at Ukrainian civil infrastructure targets (mostly electrical grid, water facilities, and housing targets). 

Overnight, Asian markets leaned to the downside.  Thailand(+0.85%), Malaysia (+0.78%), and India (+0.38%) managed to stay green.  However, the rest of the region was in the red, led by South Korea (-1.94%), Japan (-0.94%), and Australia (-0.94%).  In Europe, markets are leaning to the upside on modest moves at midday.  The FTSE (-0.19%) is one of the few laggards while the DAX (+0.25%), and CAC (+0.13%) are more typical of the region in early afternoon trade.  As of 7:30 am, US Futures point toward a green start to the day.  The DIA implies a +0.22% open, the SPY is implying a +0.42% open, and the QQQ implies a +0.58% open at this hour.  At the same time, 10-year bond yields are flat at 3.879% and Oil (WTI) is down 1.43% to $77.83/barrel in early trading.

The major economic news events scheduled for Thursday are limited to Weekly Initial Jobless Claims (8:30 am) and EIA Weekly Crude Oil Inventories (11 am).  There are no earnings reports scheduled for the day.

In economic news on Friday, we get the Chicago PMI.

This is an extremely light week for earnings with no reports scheduled for either Thursday or Friday.

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With that background, it looks like the three major indices are looking to open up with modestly bullish, inside candles. This is welcome news for the bulls after the DIA gave up T-line and 50sma support and the SPY fell through a significant support level on Wednesday. Over-extension is not a problem yet in any of the major indices, despite the T2122 reading. Just remember that the very light volume of a holiday-sandwiched short week can exaggerate market moves. So, don’t go chasing too many new positions unless you can get in and out very quickly or you are willing to ride the trade through the new year. It’s time to get your 2022 trading book squared up, book your tax losses, and prepare for next year. This is not the time to be trying to save the month or year.

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

TSLA Pulls QQQ Lower Again (-71% YTD)

The large-cap indices opened flat on Tuesday and then meandered sideways in a fairly narrow range on either side of the breakeven point the rest of the day.  However, QQQ opened down a quarter of a percent and preceded to sell off hard the first 30 minutes of the day.  Then it followed the large-cap lead by trading sideways in a fairly narrow range near the lows of the day right into the close.  DIA managed to hold above its 50sma after a retest as well as holding its T-line (8ema).  Meanwhile, SPY managed to hang onto the support level it has been leaning on for a week.  This action left us with an indecisive Doji in the DIA, an indecisive Spinning Top type candle in SPY, and a large, black-bodied candle with a small lower wick in the QQQ.  This all happened on very low volumes.

On the day, six of the ten sectors were in the green with Communications Services (+0.54%) leading the way higher as the Technology sector (-1.09%) lagged behind.  Meanwhile, the SPY was down 0.39%, the DIA gained 0.13%, and the QQQ was down 1.41%.  At the same time, the VXX is flat at 14.34 and T2122 fell but also remains in the mid-range at 35.40. 10-year bond yields surged up to 3.847% and Oil (WTI) was up fractionally to $79.81 per barrel.  So, overall, it was a dead day between the holidays with the exception of a morning selloff in the high-tech QQQ. Chief among the reasons for the QQQ selloff was another brutal -11% day for TSLA and 7% down day for NVDA.

In economic news, the November Goods Trade Balance came in better than expected at -$83.35 billion (compared to a forecast of -$96.90 billion and October’s reading of -$98.80 billion).  Meanwhile, the November Retail Inventories fell by 0.3% (not as big of a drop as in October, when Retail Inventories dropped 0.7%).  After the close, Reuters reported that the Case Shiller national home price index increased 9.2% in October, which was the first single-digit gain in more than two years (+10.7% in September).  At the same time, Fannie Mae and Freddie Mac said the annual home price growth slowed to 9.8% for October (down from +11.1% in September).  So, housing prices continued to outpace inflation in the fall, but the increases are slowing.

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In stock news, on Monday, NIO lowered its guidance for the number of vehicles it will deliver in Q4.  They lowered the estimate from 43,000-48,000 down to 39,000, citing covid-related supply chain disruptions.  Elsewhere, a portion of ATVI’s workforce (the group from the studio named Proletariat, who created the World of Warcraft game, that ATVI recently acquired) have voted to unionize. MSFT is still fighting to purchase ATVI, but the FTC is fighting that MSFT acquisition for antitrust reasons.  Meanwhile, LUV remains under fire from the US DOT (and the public) after canceling another 2,589 flights Tuesday, which was 30 times more cancellations than the airline with the second-highest number of canceled flights.

In miscellaneous news, the Wall Street Journal reported Tuesday that the FDA is now planning to make recommendations on the regulation of products containing CBD (a non-psychoactive cannabis component).  The decision will come in the next couple of months and depending on that decision new agency rules or Congressional actions may be required for the next step.  Elsewhere, US refineries across the Southeast and Gulf Coast began after a pipeline outage over Christmas shutdown a 500k barrels per day supply from North Dakota and last week’s winter storm caused refinery shutdowns in Texas, Louisiana, and Mississippi.  Finally, ECB Vice President de Guindos told Bloomberg that mild temperatures November-December, along with high winds (which aid European wind power generation), have eased the economic outlook across Europe. However, he went on to say 2023 will be difficult as the ECB forecasts inflation will fall to 3% by the end of next year while GDP is forecast to remain under 1%.

In China news, as has been reported for weeks now, the wave of covid cases across that country is building to epic levels since their dropping of restrictions.  Hospitals in several regions (including the manufacturing and supply chain hub of Shanghai) are stretched to the limits.  It has gotten to the point where the government has simply stopped providing numbers again and all anyone has to go from is images of stacks of corpses all over crematoria and hospitals, patients being treated sitting in hospital halls, and anecdotal reports from doctors who say they are overwhelmed and 35% of medical staff continue working even though they too are sick.  With that backdrop, Taiwan, Japan, the US, and Europe are now considering new travel restrictions that will ban flights, require negative tests, and/or impose quarantines again on travelers coming from China.

Overnight, Asian markets were mostly in the red.  Hong Kong (+1.56%) was an outlier with a three other small winning exchanges.  At the same time, South Korea (-2.24%), Taiwan (-1.08%), and Shenzhen (-0.86%) led the rest of the region lower. However, in Europe, with the exceptions of Russia (-0.51%) and Greece (-0.19%), we see green across the board at midday.  The FTSE (+0.94%), DAX (+0.10%), and CAC (+0.24%) are leading the region higher in early afternoon trade. As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.29% open, the SPY is implying a +0.26% open, and the QQQ implies a +0.20% open at this point.  At the same time, 10-year bond yields have fallen to 3.82% and Oil (WTI) is off three-tenths of a percent to $79.30/barrel in early trading.

The major economic news events scheduled for Wednesday are limited to November Pending Home Sales (10 am) and the API Weekly Crude Oil Stocks Report (4:30 pm).  The only major earnings report scheduled for the day is CALM before the open.  There are no earnings reports scheduled for after the close.

In economic news on Thursday, the Weekly Initial Jobless Claims and EIA Weekly Crude Oil Inventories are reported.  Finally, on Friday, we get the Chicago PMI.

This is an extremely light week for earnings with no reports scheduled for either Thursday or Friday.

LTA Scanning Software

With that background, it looks like, of the three major indices, only DIA is moving in premarket. (The other two are gapping slightly, but indecisive in their premarket action.) However, the DIA is now at a retest a resistance level, just above its upturning T-line (8ema). Meanwhile, is stuck in the body range of the prior three daily candles (below its T-line) and the QQQ is just trying to hold on after an awful day by TSLA and NVDA helped drag that index lower Tuesday. Over-extension is not a problem yet in any of the major indices. However, the very light volume of a holiday-sandwiched short week can exaggerate market moves. So, don’t go chasing too many new positions unless you can get in and out very quickly or you are willing to ride the trade through the new year.

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: PAGS, VTNR, and WTI. 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

LUV Struggles With Winter Storm

Friday saw a modest gap lower at the open (0.49% in the QQQ, 0.17% in the DIA, and 0.31% in the SPY).  From that point, we saw a morning swing lower, followed almost immediately by a swing back above the Thursday close.  One last swing lower took us back toward the open.  However, that was the end of the volatility for the day.  The rest of the day saw a very slow, steady, tight range with a slightly bullish trend move for the entire last 5 hours of the day.  This action gave us white-bodied candles with tiny upper wicks and larger lower wicks.  The DIA even managed to print a Bull Engulfing candle. The SPY managed to hold its support level and the DIA managed to hold its 50sma yet again.  All of this happened on lower-than-average volume again.

On the day, all ten of the sectors were in the green with Energy (+2.213.10%) leading the way higher as the Technology (+0.03%) and Healthcare (+0.04%) sectors lagged.  Meanwhile, the SPY gained 0.58%, the DIA gained 0.51%, and the QQQ gained just 0.22%.  At the same time, the VXX fell 2.71% to 14.35 and T2122 has climbed up into the center of the mid-range at 50.96. 10-year bond yields surged up to 3.751% and Oil (WTI) was up 2.40% to $79.35 per barrel.  So, overall, it was a mildly volatile morning that turned into a dead market most of the as traders left early for the long holiday weekend (and to beat the storm).

In economic news, on Thursday, Q3 GDP was revised up to 3.2% (from the previous estimate of 2.9% and far above the Q2 final GDP of -0.5%).  The Q3 Price Index was also revised upward to 4.4% from the prior estimate of 4.3% but far, far below the Q2 reading of +9.0%.  Weekly Initial Jobless Claims also came in slightly better than was forecasted at 216k (versus the expected 222k and a tad above the previous week’s 214k).  Then, on Friday, Nov., Durable Goods Orders fell 2.1% (compared to a forecast of -0.6% and the Oct. reading of +0.7%).  The Nov. PCE Price Index (the Fed’s favorite inflation indicator) came in at 5.5% (well down from the October reading of 6.1%) and showed a second straight month of decline.  November Personal Spending also came in below expectation at +0.1% (versus the forecast of +0.2% and the October reading of +0.9%).  Michigan Consumer Sentiment also beat expectations at 59.7 (versus the forecast of 59.1 and the prior reading of 59.1).  Finally, Nov. New Home Sales were massively stronger than expected at +5.8% (versus a forecast of -4.7% but still well below the October value of +8.2%).  However, this did amount to an actual increase in the homes sold to 640k in November compared to only 605k in October.  So, overall, the economy seems to be stronger than expected, yet inflation is falling some, and consumers are generally feeling better than forecasted.  The FOMC could not have asked for much more than that for Xmas.

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In stock news, on Friday it was announced that GOOGL’s YouTube had won out over rivals AMZN, AAPL, and DirecTV (owned by T and TPG) in the bidding war for NFL Sunday Ticket content.  The price is $2 billion per year for seven years.  Also on Friday, TSLA shares dropped hard as the company announced it has doubled the US discounts for Model 3 and Model Y vehicles.  Elon Musk also pleaded to stop the stock bleeding by saying the will probably not sell any more TSLA stock for two years, but “definitely not in 2023.”  Elsewhere, the US government awarded LMT a $1.05 billion contract for the delivery of F-35 aircraft and awarded a separate $497 million contract to BA for the delivery of CH-47F helicopters. On Saturday it was announced that META will pay $725 million to resolve a lawsuit stemming from its 2016 sale of 87 million American’s data to Cambridge Analytica in support of the Trump campaign.  (However, a judge must still approve the settlement.)  On Monday, TM announced its global car production in November increased by 1.5% to a record 833,104 vehicles.  MA also said that their statistics show US retail sales grew 7.6% this holiday season (well above the 7.1% they had forecasted in September but still below 2021’s 8.5% year-on-year growth).  The bill also guarantees $44.9 billion in military, humanitarian, and economic aid to Ukraine as the Russian war against that country is now in its 11th month.

In country or government news, China is reeling from Covid with more than 37 million cases (and that is per Chinese government data).  However, on Monday anecdotal reports from Reuters crowded commuter trains in Shanghai and Beijing for the first time in a couple of weeks.  So, even as TSLA was forced to pull forward its previously planned plant shutdown to 12/25/22 – 1/2/23, some businesses are attempting to muddle through the latest wave.  Meanwhile, in the US, the Congress and Senate passed its $1.7 trillion omnibus spending bill to keep the government running through September 2023.  The bill included a 10% increase in Defense spending ($858 billion, well more than requested by President Biden) and a lesser 5% increase in Domestic spending.  Finally, US airlines were forced to cancel over 17,000 flights between Wed. and Monday due to winter storms.  This put a crimp into airline profits on what has been traditionally the third-largest travel weekend of the year.

In miscellaneous last-minute news, LUV is under scrutiny from the US Dept. of Transportation as the company has canceled or delayed 80% of its flights Monday and Tuesday. For comparison, in the same period, DAL has canceled 9% of its flights while UAL canceled just 1%. Meanwhile, in China, a few provinces are reaching the critical level related to available ICU beds in the covid wave that has followed reopening. Specifically, the Zhejiang province near Shanghai now has 1 million active hospitalized cases and forecasts a peak of about 2 million near New Year’s day. Most of these are now elderly patients (50%, up from the normal 20%), which are most likely to turn into ICU cases. This could pose a threat to nearby (and supply chain critical) Shanghai.

Overnight, Asian markets were mixed but mostly green.  Australia (-0.63%) and Hong Kong (-0.44%) were the only red in the region.  Meanwhile, Shenzhen (+1.16%), Thailand (+1.01%), and Shanghai (+0.98%) led the region higher.  In Europe, with the lone exception of Portugal (-0.27%), we see a green picture across the board at midday.  The FTSE (+0.05%) is flat while the DAX (+0.71%) and CAC (+1.00%) lead 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 +0.58% open, the SPY is implying a +0.52% open, and the QQQ implies a +0.29% open at this hour.  At the same time, 10-year bond yields are up to 3.773% and Oil (WTI) is up another half of a percent to $79.92/barrel in early trading.

The major economic news events scheduled for Tuesday are limited to Nov. Goods Trade Balance and Nov. Retail Inventories (both at 8:30 am).  There are no major earnings reports scheduled for before the open or after the close on Tuesday.

In economic news on Wednesday, we get Nov. Pending Home Sales and the API Weekly Crude Oil Stocks Report.  On Thursday, the Weekly Initial Jobless Claims and EIA Weekly Crude Oil Inventories are reported.  Finally, on Friday, we get the Chicago PMI.

This is an extremely light week for earnings as only CALM reports Wednesday.  There are no reports scheduled for either Thursday or Friday.

LTA Scanning Software

With that background, it looks like all three major indices are again fading from early premarket bullishness, but will still look to open to the upside. with the DIA looking to retest its T-line (8ema) and the SPY failing its premarket test of that level. Over-extension is not an issue in any of the major indices. The SPY is looking to join the DIA in another test of the T-line (8ema). Both tests come from below as the bulls look to get back above. This holiday-sandwiched short week is likely to be light on volume. So, don’t go chasing too many new positions unless you can get your move very quickly or you are willing to ride the trade through a long weekend and likely dead week to follow.

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: SQQQ, FDX, XLE. 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

Q3 GDP and Jobless Claims This AM

Markets gapped higher on Wednesday (0.4% in the QQQ, 0.5% in SPY, and 1% in the DIA).  Then we saw strong follow-through until 11 am. At that point, we saw a sideways grind within a tight range for the rest of the day.  This action gave us something that could be seen as a Morning Star type pattern in the SPY and QQQ.  For the day, we got gap-up, white-bodied candles with smaller wicks on both ends. It is worth noting that the DIA did break up through its T-line (8ema) once again during the day.

On the day, all ten of the sectors were in the green with Energy (+2.21%) leading the way higher while the Consumer Defensive (+1.10%) sector lagged.  Meanwhile, the SPY gained 1.48%, the DIA gained 1.59%, and the QQQ gained 1.45%.  At the same time, the VXX fell 3.78% to 13.99 and T2122 has climbed up into the mid-range at 47.54. 10-year bond yields surged up to 3.671% and Oil (WTI) was up 2.94% to $78.47 per barrel.  So, overall, it was a strong bullish morning and then a dead afternoon that gave markets some relief from bearish over-extension (call it a Santa Relief pop).

In economic news, Q3 Current Accounts (Exports minus Imports) came in better than expected at a $217.1 billion deficit (compared to a forecasted $222.0 billion deficit or the prior reading of a $238.7 billion deficit).  Later in the morning, Conference Board Consumer Confidence came in well above expectations at 108.3 (versus the forecast of $101.0 and the previous reading of 101.4).  Meanwhile, November Existing Home Sales came in below forecast at 4.09 million (compared to the expected 4.20 million and the October reading of 4.43 million).  Finally, EIA Weekly Crude Oil Inventories showed a greater drawdown than expected at -5.894-million-barrels (versus the forecast of -1.657-million-barrels and far lower than last week’s massive 10.231-million-barrel inventory build). So, it seems the improvement in Import/Export ratio and an unexpected big jump in consumer confidence trumped concerns over slipping home sales.

SNAP Case Study | Actual Trade

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In stock news, GM recalled 140,000 Chevy Bolt electric cars (2017-2023) over fire hazard in the event of a crash related to seatbelt tensioners igniting the carpet.  In other news, TSP (self-driving truck company) announced it will lay off 25% of its workforce.  The move comes less than a month after TSP ended (or had terminated?) a deal to co-develop autonomous trucks with Navistar.  In Europe, Germany announced it has now ended its proceedings against GOOGL related to the company’s online news service. This came after the company made changes to benefit German news publishers.   Elsewhere, UAA has hired the current President of MAR to be the new CEO of UAA beginning in February.  Finally, SLDP announced it has agreed to a $20 million deal with BMWYY (BMW automotive) to produce batteries in the carmaker’s German plants through 2024.

In Fed news, seven Republican Senators have introduced a bill that would dramatically change the Fed.  The bill calls for all Fed Regional Bank Presidents to become political nominees of the President, which would then also require Senate approval.  It also calls for reducing the number of Fed Regional Banks from 12 to 5 and instead of rotation, all 5 Presidents would then be permanent voting members of the FOMC.  It’s unclear how this “politicizing in the name of depoliticizing” of the Fed would help remove politics (which was the stated goal of the seven Senators).  However, it is clear the primary concern of the GOP Senators is stopping the Fed from researching the economic impacts of climate change and social factors.  Speaking of the Fed, a survey of CFOs conducted by the Richmond Fed found that two-thirds of them say their firms will not curtail spending plans due to the Fed rate hikes.  30% said rate hikes have already caused them to reduce spending.  However, on average, the CFOs said their companies would not reduce spending unless Fed rates hit 6.4% (a level far above the currently forecasted terminal rate at this point).

In miscellaneous news, Sam Bankman-Fried of FTX infamy has arrived in the US after extradition from the Bahamas.  It is unclear if it is related to this, but overnight his co-Founder of FTX (Gary Wang) and his co-CEO of Alameda Research both pleaded guilty to charges and agreed to cooperate with prosecutors in their case against SBF.  Elsewhere, China announced that in January it will cut quarantine requirements for overseas travelers.  With that said, estimates are that China now has over 1 million active cases and is dealing with up to 5,000 virus deaths per day.  Major cities (like Beijing and Shanghai) are also largely self-quarantining due to the post-repression massive outbreaks.  So, it is uncertain how the Chinese economy is coping (growing on the opening or faltering on the resulting wave of illness).

After the close, MLKN reported beats on both the earnings and revenue line. However, MU missed on both the top and bottom lines.  MU also lowered its forward guidance and announced a 10% reduction in its staff as well as the suspension of bonuses.  So far this morning, KMX has reported significant misses on both lines.  (PAYX reports at 8:30 am.)

Overnight, Asian markets were mostly green.  Shanghai (-0.46%), India (-0.39%), and Shenzhen (-0.33%) were the only red in the region.  Meanwhile, Hong Kong (+2.71%), Taiwan (+1.47%), and South Korea (+1.19%) led the region higher.  In Europe, we see a similar picture taking shape at midday.  The DAX (-0.18%), CAC (-0.04%), and FTSE MIB (-0.10%) are the only red in the region.  Meanwhile, the FTSE (+0.45%) leads the bulk of the continent’s exchanges in modest gains in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a -0.17% open, the SPY is implying a -0.13% open, and the QQQ implies a -0.18% open at this hour.  10-year bond yields are retreating to 3.654% and Oil (WTI) is up more than 1.5% to $79.49/barrel in early trading.

The major economic news events scheduled for Thursday include Q3 GDP, Q3 GDP Price Index, and Weekly Initial Jobless Claims (all at 8:30 am).  Major earnings reports scheduled before the open Wednesday include KMX and PAYX.  Then, after the close, there are no major earnings reports scheduled.

In economic news on Friday, Nov. Durable Goods, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, and Nov. New Home Sales are reported.  Meanwhile, in earnings, on Friday, there are no reports scheduled.

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With that background, it looks like all three major indices are fading from earlier bullishness with the DIA looking to retest its T-line (8ema) and the SPY failing its premarket test of that level. Keep in mind that the SPY still has its 50sma close overhead as another potential resistance. Overextension is not a problem at this point, either in terms of the T-line or T2122. Remember that the week is winding down with a half-day Friday and then the market is closed Monday. Also, note that with the huge storm wreaking havoc across the nation that traders may hit the door early in case of travel delays. That means it may be time to start hedging, flattening, or taking profits…and you will not be the only trader thinking that way. My point is, don’t go chasing too many new positions unless you can get your move very quickly or you are willing to ride the trade through a long weekend and likely dead week to follow.

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: TWKS, RIG, BKR, MDB, DOCU, CAT, OKTA, SPXS, SQQQ, BIDU, and RWM. 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 Look To Make Move At Open

On Tuesday the large-cap indices opened flat while the QQQ gapped down half of a percent.  From that point, all three indices chopped sideways (with a slightly bullish trend in the large-caps) all the way into 3:30 pm.  The DIA continues to hold its retest of the 50sma from above and the SPY is holding on in its retest of a support level.  However, the QQQ continues to get the worst of the beating in the current downtrend. This action is giving us indecisive, white-bodied, Spinning Top type candles in all three major indices.  And these moves came on below-average volume.  

On the day, nine of the ten sectors are in the green with Healthcare (+1.50%) and Energy (+1.47%) leading the way higher while the Consumer Cyclical (-0.54%) sector fared worst.  Meanwhile, the SPY was up 0.14%, the DIA was up 0.31%, and the QQQ was down 0.08%.  At the same time, the VXX is down 0.75% to 14.54 and T2122 has climbed but remains in oversold territory at 14.54.  10-year bond yields surged up to 3.695% and Oil (WTI) was up 1.10% to $76.02 per barrel.  So, overall, it was an indecisive grind of a day in the bearish trend, which at least gave a little over-extension relief in the large-cap indices.

In economic news, November Building Permits came in lower than expected at 1.342 million (compared to the forecasted 1.485 million and the October reading of 1.512 million).  So, this amounted to an 11.2% decline month-on-month.  Meanwhile, November Housing Starts came in stronger than expected at 1.427 million (versus the forecast of 1.400 million and October’s reading of 1.434 million).  Finally, after hours, the API Weekly Crude Oil Stock Report showed a larger-than-expected drawdown of -3.069 million barrels (compared to the forecasted drawdown of 0.167 million barrels and last week’s large inventory build of +7.819 million barrels).

SNAP Case Study | Actual Trade

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In bad actor company news, WFC agreed to a record $3.7 billion settlement with the US Consumer Financial Protection Bureau.  This included a $1.7 billion fine and more than $2 billion in compensation for victims.  This settlement was related to abuses tied to mortgages, auto loans, wrongly charged overdraft fees, and the unauthorized opening of checking accounts.  For its part, WFC released a statement saying many of the required actions had already been done and the company’s Q4 earnings will reflect expenses for the civil penalty and customer remediation efforts.  The company has now been labeled as a “repeat offender” by the CFPB and remains under a consent decree from the Federal Reserve over other offenses such as creating fake accounts to get around Fed capitalization rules. The settlement also does not offer immunity to any WFC employees that violated laws or the company from individual lawsuits related to losses and harm caused.

In stock news, the US Postal Service announced Tuesday that it intends to purchase at least 66,000 electric vehicles between now and 2028.  Of those, 45,000 – 60,000 will come from OSK.  In other transportation news, BA won the backing of SU Senator Cantwell (Chair of Senate Commerce Comm.) for a waiver from the FAA certification of meeting safety standards for 737 MAX planes. (Because a BA waiver from a deadline to meet safety standards is just what the world needs.)  Elsewhere, AMZN has reached a settlement with the EU over three different antitrust investigations.  AMZN avoided any fines in the three cases. 

In miscellaneous news, TRP submitted a plan for the reopening of the Keystone oil pipeline to US regulators on Tuesday.  The cleanup of the pipeline’s third major spill in five years will take months but, with approval, TRP hopes to have the pipeline back online soon.  Meanwhile, the Equipment Leasing and Finance Assn. (ELFA) reported that US companies borrowed 9% more to finance equipment investments in November than they had a year earlier.  The group said, “Labor markets are stable, inflation woes appear to be abating, consumers are spending, and businesses continue to expand and grow: a recipe for stable growth by providers of equipment financing.”  In political news, Ukrainian President Zelenskiy will address the US Congress in person today (in his first trip abroad since the Russian invasion of his country).

After the close, NKE and WOR reported beats on both the revenue and earnings lines.  However, FDX missed on revenue while beating on earnings (even though the beat is actually a 34.2% negative earnings growth).  FDX also lowered its forward guidance and announced an additional $1 billion in cost-cutting measures.  So far this morning, RAD has reported beats on both the top and bottom lines.  (CTAS, CCL, and TTC all report closer to the opening bell.)

Overnight, Asian markets were mixed with Australia (+1.29%) leading the gainers as India (-1.01%) paced the losses.  Most of the region produced modest moves in an even split of directions.  Meanwhile, in Europe, the region’s exchanges lean heavily to the upside with only Portugal (-0.05%) showing any red.  The FTSE (+0.87%), DAX (+0.71%), and CAC (+1.03%) are leading the region higher.  However, the gains are widespread and consistent in early afternoon trade.  As of 7:30 am, US Futures are pointing to a green start to the day.  The DIA implies a +0.64% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.18% open at this hour.  10-year bond yields are down a bit to 3.681% and Oil (WTI) is up 2% to $77.76/barrel in early trading.

The major economic news events scheduled for Wed. include Q3 Current Accounts (8:30 am), Conf. Board Consumer Confidence and November Existing Home Sales (both at 10 am), and EIA Weekly Crude Oil Inventories (10:30 am).  Major earnings reports scheduled for before the open include Wednesday, CCL, RAD, and TTC.  Then, after the close, MU and MLKN report.

In economic news later this week, on Thursday, we get Q3 GDP, Q3 GDP Price Index, and Weekly Initial Jobless Claims.  Finally, on Friday, Nov. Durable Goods, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, and Nov. New Home Sales are reported. 

Meanwhile, in earnings later this week, on Thursday, we hear from KMX and PAYX.  Finally, on Friday, there are no reports scheduled.

LTA Scanning Software

In late-breaking news, mortgage demand surged 6% last week as interest rates fell to their lowest level since September.  New home purchase loan applications decreased 0.1% week-on-week, but this is to be expected in what is a normally very slow week for the housing market.  The national average rate for a 30-year fixed-rate conforming loan fell to 6.34% (down from 6.42%) over the week.  This caused a 6.1% increase in the demand for refinance loan applications.

With that background, it looks like all three major indices want to make a move back up toward their T-line (8ema) this morning. However, only the DIA looks like it put in a real bottom to the recent strong bearish move while the other two simply look like volatility testing the downtrend line at least for now. Keep in mind that the SPY has its 50sma close overhead as potential resistance and the DIA has a price-action resistance level not far above. So, don’t assume any bullish moves will go untested. Nonetheless, we remain extended to the downside and some relief was in order. (Just be aware that this relief can come in the form of a bullish move or sideways rest.) Be cautious and keep in mind that the week is winding down with a half-day Friday and then the market is closed Monday. That means it may be time to start hedging, flattening, or taking profits…and you will not be the only trader thinking that way. My point is, don’t go chasing too many new positions unless you can get your move very quickly or you are willing to ride the trade through a long weekend and likely dead week to follow.

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

Housing Data As Market Looks For Rest

Markets opened flat on Monday.  However, the bears immediately stepped in to drive all three major indices lower for a little over half of an hour.  We then saw a 30-minute bullish reversal followed by a second wave lower until 11:45 am.  From there, we saw a slower selloff that lasted until we saw some buying at the end of the day.  The SPY and QQQ move lower, away from their 50sma and T-line (8ema). Meanwhile, the DIA is retesting its 50sma from above while also moving further away from its T-line.  This action is giving us black-bodied candles with lower wicks that can certainly be seen to be forming Bearish Doji Continuation (Sandwich) patterns in the 3 major indices. 

On the day, all ten of the sectors are in the red with Technology (-1.74%) leading the way lower while the Consumer Defensive (-0.13%) sector held up best. Meanwhile, the SPY was down 0.85%, the DIA was down 0.47%, and the QQQ was down 1.60%.  All three of those indices made these moves on relatively low volume.  At the same time, the VXX is down 2.4% to 14.65 and T2122 remains deep in oversold territory at 8.93.  10-year bond yields surged up to 3.594% and Oil (WTI) was up 1.80% to $75.63 per barrel.  So, overall, it was a bearish grind of a day, giving us a fourth-straight down day to start the 4.5-day preholiday week.

In stock news, AAPL was fined $1.06 million by a French court Monday for imposing abusive commercial clauses on French App developers by the AAPL app store.  In other legal news, the SEC announced that HON will pay $200 million to settle US and Brazilian criminal and civil corruption charges related to bribing Brazilian state-owned energy company.  At the same time, MDLZ said Monday that it has agreed to sell its gum business (Trident and Dentyne) to a European gum and confectionary maker.  Elsewhere, Reuters reported that BLK plans no major changes to he way the company engages on and votes on environmental and social issues regardless of pushback from Texas GOP and national Republican politicians in general.  Meanwhile, seed and pesticide maker CTVA said it will cut a (trivial, 51) jobs next year as its exit from Russia has seen a cut in sunflower seed demand.  Finally, after hours, LCID announced it has now completed a $1.5 billion capital raise by issuing stock to Saudi Arabia’s Public Investment Fund.

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In energy news, Reuters reported that Venezuelan-owned Citgo Petroleum is on track to make a record $2.5 billion profit this year.  The Houston-based Citgo plans to use the funds to repay debt and invest in the reliability of its operations.  (The company posted a $160 million loss in 2021.)  In other Reuters news, the agency reports that the US will become a net exporter of oil in 2023.  Current government data shows that the US is importing 1.1 million barrels per day (down sharply from 7 million barrels per day just 5 years ago) while at the same time, exporting 3.4 million barrels per day.  The US is also the leading LNG exporter in the world.  For 2022, the US was a net importer by 0.7%, but US oil production is planned to increase again to another record in 2023.  Finally, EU energy ministers agreed to a price cap for natural gas if electric prices exceed $191.11/megawatt-hour for three days).

In miscellaneous news, the Bank of Japan unexpectedly widened (doubled) the range for its rate cap for 10-year Japanese Bonds.  (They essentially will let rates vary up to a half of a percent on either side of the 0% target rate, leaving a 1% wide range.)  Analysts say that regardless of verbiage, this is a step toward a rate increase early next year which is a change for one of the region’s staunchest “rock bottom rates” central banks.  This move also caused the Yen to jump higher.  Elsewhere, EPIC games (Fortnite) took a big hit in a settlement with the FTC.  Epic will pay a $275 million penalty for violating children’s online privacy rights.  It will pay another $245 million in refunds for using deceptive practices (dark patterns) to get children to make accidental in-game purchases in its “free to play” game. Finally, it is worth noting that AMZN has now given back all of its Covid era gains with the stock down 50% on the year.

After the close, HEI reported beats on the revenue and earnings lines.  However, SCS missed on revenue while beating on earnings.  So far this morning, GIS beat on both the top and bottom lines.  Meanwhile, FDS missed on revenue while beating (by 11%) on earnings.

Overnight, Asian markets were red across the board as the Bank of Japan shocked the market with a new yield curve policy Japan (-2.46%), Taiwan (-1.82%), and Shenzhen (-1.58%) led the region lower.  Meanwhile, in Europe, there is a lot of red but still three smaller exchanges holding onto green at midday.  The FTSE (-0.02%) is flat while the DAX (-0.22%) and CAC (-0.21%) are typical of the modest red action in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed, flat start to the day.  The DIA implies a +0.18% open, the SPY is implying a +0.03% open, and the QQQ implies a -0.19% open at this hour.  10-year bond yields are surging again to 3.653% and Oil (WTI) is up 1.33% to $76.19/barrel in early trading.

The major economic news events scheduled for Tuesday include November Building Permits and November Housing Starts (both at 8:30 am), and API Weekly Crude Oil Stocks (4:30 pm).  The major earnings reports scheduled for before the open include FDS and GIS.  Then, after the close, FDX, NKE, and WOR report. 

In economic news later this week, on Wednesday, Q3 Current Accounts, Conf. Board Consumer Confidence, Nov. Existing Home Sales, and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get Q3 GDP, Q3 GDP Price Index, and Weekly Initial Jobless Claims.  Finally, on Friday, Nov. Durable Goods, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, and Nov. New Home Sales are reported.

Meanwhile, in earnings later this week, on Wednesday, CCL, RAD, TTC, MU, and MLKN report.  On Thursday, we hear from KMX and PAYX.  Finally, on Friday, there are no reports scheduled.

LTA Scanning Software

One last tidbit of late news. The House passed a $1.7 trillion omnibus budget (lasting through September 2023) as the last piece of business for the year. The bill is expected to pass with bipartisan support in the Senate and be signed before the weekend deadline. The bill did not include either the Democrat’s hoped-for permanent status for expanded child tax credits or the Republican hoped-for tax cuts for businesses. However, on the heals of the committee report on the January 6 insurrection, it did include a tightening of law intended to prevent such events from occurring again.

With that background, it looks like markets want to start the day flat (ahead of housing data) with the exception of the still-bearish tech space. The DIA will be testing its 50sma again and SPY continues to test a support level. However, the QQQ has no such nearby support. Nonetheless, we are extended, both in terms of the T-line (8ema) and the T2122 (4-week new high/low ratio) indicator. So, some relief is in order. Be cautious and aware of the recent volatility (gaps and intraday reversals). Remember, chasing is a bad habit and a good way to walk into a slamming door.

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: XLF, META, AAPL, BA, GOOG, TSLA, LEN, IAG, and MRNA. 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

Over-Extended Markets Look For Relief

Friday saw another serious gap down in the SPY (-1.20%) and DIA (-1.08%) but only a 0.34% gap down in the QQQ.  However, after a half hour of volatility, all three major indices got in lock step to sell off until 10:30 am and then slowly drift sideways with a very modest bearish trend that reached the lows of the day at about 2:30 pm.  At that point, the bulls stepped in to rally us up off the lows this last hour as volatility kicked in for expiration gyrations.  This action is giving us gap-down, black-bodied, indecisive, Spinning Top type candles in all the major indices.  The SPY and QQQ have both now dropped down through their 50sma while the DIA bounced up off its own 50sm after a test of that level as a support.  Volume has been above average in the DIA, but much less so in the SPY and QQQ.

On the day, all ten of the sectors are in the red with Utilities (-1.50%) leading the way lower while the Healthcare (-0.30%) and Basic Materials (-0.43%) sectors held up best.  At the same time, the SPY was down 1.63%, the DIA was down 1.15%, and the QQQ was down 0.95%.  The VXX is flat at 15.01 and T2122 dropped deep inside of the oversold territory at 7.25.  10-year bond yields were down from the open to 3.484% and Oil (WTI) was down 2.36% to $74.31 per barrel.  So, overall, it was a bearish and volatile day where we only the DIA was able to stay above its 50sma.

In economic news, the Manufacturing PMI came in below expectation at 46.2 (versus a 47.7 forecast and 47.7 previous reading). The same was true for Services PMI which came in at 44.4 (compared to the 46.8 forecasted and 46.2 prior reading).  In addition, the S&P Global Composite PMI was also below expectations at 44.6 (versus 47.0 which was forecasted and the prior reading of 46.4).

SNAP Case Study | Actual Trade

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In stock news, BAYRY and the state of OR finalized a $698 million settlement resolving chemical environmental pollution claims dating all the way back to 1977.  The root cause was PCBs manufactured by MON (which BAYRY acquired).  Elsewhere, the NHTSA has opened an investigation into GM Cruise robotaxis after 242 reports of the vehicles unexpectedly stopping in the middle of the street, snarling San Francisco traffic and stranding passengers.  At the same time, BMO reported that it has raised $1.9 billion of capital by issuing new shares in an effort to increase its capital cushion with a turbulent economy ahead.  In other news, FFIE fell more than 26% on Friday after the company revealed that production plans for its long-delayed luxury electric vehicle will depend on the company getting additional financing.  In layoff news, it was reported by Bloomberg that internal sources tell them GS is preparing to fire 8% of its workforce (4,000 people).  Finally, the US Dept. of Labor announced after the close that AMZN had failed to record work-related injuries at six different warehouses located in five states.  This included 14 separate OSHA safety violations, each with a fine of a paltry $14,500.

In energy news, US gasoline prices hit a 15-month low on Friday as the AAA reported that the national average price dropped to $3.18/gallon.  Meanwhile, the EU Energy Ministers are meeting in Brussels in furious negotiations to agree on a price cap for Natural Gas prices as their national leaders agreed should happen last week.

In miscellaneous news, LHX announced Sunday that it has agreed to buy AJRD for $58/share.  (It is worth noting that LHX competitor LMT was forced to drop its own deal to buy AJRD earlier this year when antitrust regulators sued to block a deal.)  Then this morning (US time) META was warned by the EU that it is breaching EU Antitrust Laws by abusing its position to corner the online classified advertising market.  In Elon Musk news, he launched a poll asking Twitter users whether he should step down as CEO and 57.5% of respondents (17.5 million votes cast) said “yes.”  This comes one day after the third-largest TSLA shareholder told Musk he should resign as CEO of TSLA.

Overnight, Asian markets leaned heavily to the downside.  Shanghai (-1.92%), Shenzhen (-1.51%), and Japan (-1.05%) led the region lower with only India (+0.83%) and Singapore (+0.49%) in the green.  However, in Europe, with the sole exception of Russia (-0.82%), exchanges are green across the board at midday.  The FTSE (+0.54%), DAX (+0.53%), and CAC (+0.62%) lead the region higher although the gains are broad and similar across the continent in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly higher start to the day.  The DIA implies a +0.20% open, the SPY is implying a +0.28% open, and the QQQ implies a +0.37% open at this hour.  10-year bond yield have jumped up to 3.535% and Oil (WTI) is up nearly a half of a percent to $74.60/barrel in early trading.

There are no major economic news events scheduled for Monday.  There are no major earnings reports scheduled for before the open.  However, after the close, HEI and SCS report.

In economic news later this week, on Tuesday, we get Nov. Building Permits, Nov. Housing Starts, and API Weekly Crude Oil Stocks Report.  Then, on Wednesday, Q3 Current Accounts, Conf. Board Consumer Confidence, Nov. Existing Home Sales, and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get Q3 GDP, Q3 GDP Price Index, and Weekly Initial Jobless Claims.  Finally, on Friday, Nov. Durable Goods, Nov. PCE Price Index, Nov. Personal Spending, Michigan Consumer Sentiment, and Nov. New Home Sales are reported. Also, remember that Friday is a half-day as markets close early for virtual Christmas Eve.

Meanwhile, in earnings later this week, on Tuesday we hear from FDS, GIS, FDX, NKE, and WOR.  Then Wednesday, CCL, RAD, TTC, MU, and MLKN report.  On Thursday, we hear from KMX and PAYX.  Finally, on Friday, there are no reports scheduled.

LTA Scanning Software

With that background, it looks like markets will start the week in a modestly bullish mood. (Up, but still inside of Friday’s candles.) The DIA and SPY may have closed last week sitting on minor support levels. In either case, the bears have the short-term trend in their favor. However, we are over-extended to the downside in terms of the T-line and also the T2122 (4-week new high/low ratio) indicator. So, some relief is in order. Be cautious and aware of the recent volatility (gaps and intraday reversals).

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

Quad Witching and PMI Data Today

On Thursday, markets opened with strong gaps lower after disappointing economic news on top of follow through to the Fed announcements.  (SPY gapped down 1.26%, DIA gapped down 1.07%, and QQQ gapped down 1.43%.)   There was a strong follow-up selloff for the first 40 minutes of the day which then turned into a secondary, slow and steady selloff that lasted up until 2:30 pm.  At that point, the bulls stepped in to rally us up off the lows to retest the support/resistance level that had been broken in the large-cap indices at about 3:15 pm.  However, that retest failed and the bears stepped back in to retrace about halfway back to the lows by the close.  This action gave us large, black-bodied, candles that have fallen through a support level in all three major indices.  All three are also starting to get a little extended from their T-lines (8ema), especially in the QQQ.

On the day, all ten of the sectors are in the red with Technology (-3.70%) leading the way lower while the Energy sector (-0.50%) held up best.  In the meantime, the SPY was down 2.44%, the DIA was down 2.18%, and the QQQ was down 3.32%.  This action took place on greater than average volume.  The VXX spiked by 6.25% to 14.96 and T2122 dropped well inside the oversold territory at 8.85.  10-year bond yields were down as well to 3.448% and Oil (WTI) was down 1.42% to $76.18 per barrel.  So, overall, it was a bearish follow-through day where the QQQ gave up support and the large-cap indices continue to fight to hold onto their own support levels.

In economic news, there were several signs of a slowing economy Thursday.  Weekly Initial Jobless Claims did come in lower than expected at 211k (compared to a forecast of 230k and last week’s value of 231k).  However, at the same time, the NY Fed’s Empire State Mfg. Index came in significantly lower than was forecasted at -11.20 (versus -1.00 expected and the previous +4.50) and the Philly Fed Mfg. Index came in lower than expected at -13.80 (versus the -10.0 that was forecast, but better than the previous month’s -19.4).  November Retail Sales also came in lower than expected at -0.6% (compared to -0.1% forecasted and the previous reading of 1.3%).  In addition, November Industrial Production grew less than expected at +2.51% (compared to the previous month’s +3.34%).  Then Oct. Business Inventories grew less than expected at +0.3% (versus +0.4% forecasted and the prior reading of +0.2%).  Finally, Oct. Retail Inventories fell 0.5% compared to the Sep. fall of 0.4%.

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In stock news, Reuters reports that GRAB has frozen hiring in an effort to cut costs.  In another Reuters report, it was revealed that a joint venture involving the parent firm of  SHEL and Dutch energy company Eneco has won the right to build a large wind farm in the North Sea.  Elsewhere, NFLX fell 8.63% after an online trade magazine report said the streamer’s new ad business is suffering a slow start and is not delivering the viewership that had been promised to advertisers.  Later in the day, Bloomberg reported that GE is considering the purchase of two units that are in process of being spun off by MDT.  In other news, MULN announced it has received an order for 6,000 electric cargo vans.  In related auto news, F raised the base price of its cheapest F-150 Lightning electric truck to $56,000.  On the legal front, UL announced it has resolved litigation with its independent board (over the sale of its Ben & Jerry’s ice cream business in Israel).  Finally, French prosecutors raided the headquarters of GE in France late Thursday as part of a probe into GE tax fraud.

In energy news, TRP announced Thursday that its Keystone pipeline spill in Kansas spilled crude that was diluted with bitumen.  Bitumen sinks in water and in the ground, which complicates cleanup.  (The last major spill involving bitumen took years due to this complication.)  However, in good news for TRP, the pipeline partially reopened. In other energy news, the state of CA approved $2.9 billion to install 90,000 new charging stations in the state by 2025.  (This is part of the state’s goal to reach 250,000 charging stations in the state by then.)  Finally, after the close, NERC (North American Electric Reliability Corporation, in charge of the electric grid) officials said that both the Midwest and CA electric grids are being pushed to their limits and there are high risks of energy grid shortfalls both this winter and for the next five years.  In the Midwest, more electric generation capacity is being taken offline than is coming online.  Meanwhile, in CA, demand variability is the key risk.  Both areas are also being pressured by demand that is increasing due to climate issues.

In miscellaneous news, overnight the Senate passed (on a bipartisan 71-19 with 10 abstentions) a 1-week funding package to keep the government past today.  The House had passed its version of the same bill on Wednesday by 224-201 with far less bipartisanship on the part of the GOP in the House.  This will be a stop-gap until an omnibus spending bill can be passed on Dec. 23. (when Congress leaves for Xmas).  Elsewhere, Elon Musk has fully drunken the Kool-Aid as he banned journalists he did not like from Twitter overnight.  Those include CNN, The New York Times, Washington Post, Voice of America, and many independent journalists.  It seems the “free speech absolutist” really has some exceptions to his rule.  Finally, today is quad-witching.  So, look out for volatility as we have open interest of $8 trillion in options alone this week.  This is just shy of last year’s record levels where we saw huge volume jumps and a large increase in volatility.

After the close, ADBE came in just shy of estimates on revenue but beat on earnings estimates.  So far today, ACN, DRI, and WGO have all reported beat to both the top and bottom lines.  It is worth noting that the ADBE, CAN, and DRI beats were all the result of revenue and earnings growth (not lowered estimates).  However, the WGO beat was against lowered forecasts and actually showed significant negative growth on both lines.

Overnight, Asian markets were mostly in the red.  Japan (-1.87%), Taiwan (-1.40%), and Singapore (-1.01%) led the region lower while Malaysia (+0.78%) and Hong Kong (+0.42%) held up best.  Meanwhile, in Europe, with the sole exceptions of Russia (+0.03%), we see red across the board at midday.  The FTSE (-1.19%), DAX (-0.44%), and CAC (-1.18%) are leading the way lower in early afternoon trade.  As of 7:30 am, US Futures are pointing to another gap down to start the day.  The DIA implies a -0.98% open, the SPY is implying a -0.98% open, and the QQQ implies a -0.61% open at this hour.  At the same time, 10-year bond yields are back up to 3.497% and Oil (WTI) is down almost 2% to $74.63/barrel in early trading.

The major economic news events scheduled for Friday are limited to Mfg. and Services PMIs (both at 9:45 am).  The major earnings reports scheduled for before the open are limited to ACN, DRI, and WGO.  There are no reports scheduled after the close.

LTA Scanning Software

With that background, it looks like an ugly start to the day, where all 3 major indices have given up support levels, the DIA seem to be reaching to retest its previously broken long-term downtrend line, and quadruple witching is going to throw extra volume and volatility into the mix. All 3 indices are also crossing back down through their 50sma (despite a “Golden Cross” just 2 days ago in the DIA). We are also closing out a second straight down week in all 3 of those. However, we are a little over-extended in the major indices both in terms of the T-line (8ema) and in terms of the T2122 indicator. So, the bears are in control, but be ready for more whiplash as we close out the week.

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

See you in the trading room.

Ed

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

Bears Awake Early With More Data Ahead

Markets opened just on the red side of flat Wednesday but then started a slow grind higher, rising all the way into the 2 pm FOMC announcements.  However, traders did not like what they saw from the Fed and we got a massive, volatile selloff for the next 5 minutes, leading into a sideways chop until 2:30 pm when Fed Chair Powell began to speak.  Once again this caused another huge selloff for 5 minutes taking us to the lows of the day.  Then the dip-buyers stepped in and have been rallying back up toward the T-line (8ema) on the daily chart up until 3:15 pm when the bears stepped back in.  This action is giving us indecisive, black-bodied, Spinning Top candles in all major indices.

On the day, eight of the ten sectors are in the red with Financial Services (-1.12%) and Energy (-1.10%) leading the way lower while the Healthcare (+0.15%) sector held up best.  Meanwhile, the SPY was down 0.64%, the DIA was down 0.47%, and the QQQ was down 0.74%.  This action took place on greater than average volume.  The VXX fell by 3.43% to 14.08 and T2122 dropped to just outside the oversold territory at 26.22.  10-year bond yields were also volatile but now down to 3.479% and Oil (WTI) was up more than 2.6% again to $77.38 per barrel.  So, overall, it was a mildly bullish day right up until the Fed chopped it down with an axe.  After that, it was schizophrenic while traders try to evaluate the Fed projection, parse the Fed statement, and read between the lines of Chair Powell’s responses to questions.

In economic news, the November Import Price Index fell more than expected at -0.6% (compared to the forecast of -0.5%) and the November Export Price Index fell less than expected at -0.3% (versus the forecast of -0.4%).  Both of those indicate a lessening of inflation pressure.  Later in the morning, EIA Weekly Oil Inventories unexpectedly spiked (following last night’s API lead) by 10.231 million barrels (compared to a forecasted 3.595 million barrel drawdown).  However, as we know, the Fed was the main stage of the day.  The Fed is projecting Q4 Interest Rates of 4.4% this year, 5.1% in 2023, 4.1% in 2024, and 3.1% in 2025.  They said they expect longer-term interest rates to be 2.5%.  They also decided to increase Interest rates to 4.25% – 4.50% (a smaller than the recent, 0.50% hike).  The FOMC statement said they welcome the October and November reductions in inflation, but then implied they will keep rates high through 2023 (when the market had been expecting a rate cut in the next year). Meanwhile, the unanimously-approved policy statement remains hawkish.  During his presser, Powell echoed this when he said the Fed policy is not “sufficiently restrictive” yet and “more rate hikes are appropriate.”  Finally, he said it will take “substantially more evidence that inflation is cooling” (before stopping the ever more restrictive policy).

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In stock news, CVX announced that it is forming a joint venture with a Swedish firm Baseload Capital to develop large-scale geothermal electricity generation projects in the US.  Elsewhere, GM recalled 825k 2020-2023 trucks and SUVs over an issue with daytime running lights and headlights.  In Canada, the trial over the ROG purchase of SJR wrapped up with many expecting a quick verdict.  (The two are on the same side seeking the deal to go through with the Canadian government blocking their merger over antitrust concerns.)  Meanwhile, a subsidiary of AIG filed for bankruptcy last evening in order to complete the wind-down of the business unit that was at the center of the 2008 financial crisis.  The unit still owes its parent $37 billion and AIG has already taken the $37 billion as a loan loss.  Finally, after the close, WBD raised its estimates of “scrapped content” expenses to $3.5 billion (a $1 billion increase).

In government news, on Wednesday, it was reported that the SEC will be voting on rules that would require orders to be auctioned at market (which would kill the existing “payment for order flow” model that brokerages use as of today).  After the close, the SEC did vote to move forward on the new rule proposals.  Elsewhere, the SEC and Dept. of Justice filed charges against 8 social media influencers for securities fraud in relation to a “pump and dump” scheme.  In unrelated news, the same agencies charged an employee of major financial services firm TIAA-CREF with “front-running” that company’s trades, which amounts to both securities and wire fraud.  Finally, the NLRB voted 3-2 to throw out a Trump-era rule that prohibited small “micro union” organizing (which is a key union organizing tactic where small groups organize and then the small groups can merge into one larger union (when the union might not have won a vote of all employees of a company or facility).

In miscellaneous news, overnight it was reported that despite his statements otherwise, Elon Musk has sold another $3.58 billion of TSLA stock.  This brought his total 2022 sales of the stock to almost $40 billion.  Then in late-breaking news, across the pond the Bank of England has followed the Fed to raise interest rates 0.5% (to 3.5%), which is also a slowing of increase from November’s ).75% increase.  Of note, is that the decision to take this action was a 6-3 vote (not unanimous).  Finally, the FTX saga continues as it was reported overnight that someone wrote and stored code that was designed to hide the movement of money from FTX to Alameda Research (which was SBF’s personal investing company) by hiding the liabilities. Bloomberg reports that this code was found in a GitHub account that bears the name of an FTX executive.

After the close, LEN, NDSN, and TCOM all reported beats on both the revenue and earnings lines.  However, it is worth noting that although LEN had an 11% earnings beat, it reduced its forward guidance. (JBL is scheduled to report at 8 am.)

Overnight, Asian markets leaned heavily red as the region gave its reaction to the Fed news from yesterday.  South Korea (-1.60%), Hong Kong (-1.55%), and India (-1.32%) led the region lower while only Shenzhen (+0.32%) managed any gains.  Meanwhile, in Europe, we see a lot of red but three smaller exchanges remain in the green at midday.  With that said, the FTSE (-0.44%), DAX (-1.15%), and CAC (-1.15%) are more typical and lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.75 open, the SPY is implying a -0.96% open, and the QQQ implies a -1.22% open at this hour.  10-year bond yields are falling again at 3.466% and Oil (WTI) is off one-tenth of a percent to $77.20/barrel in early trading.

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

In economic news later this week, on Friday, Mfg. PMI and Services PMI are reported.  Meanwhile, in earnings later this week, on Friday, we hear from CAN, DRI, and WGO.

LTA Scanning Software

The Fed’s message that the inflation fight will take longer and require higher terminal rates than the market has assumed thus far has now had a night to sink in. While the initial wave of volatility has subsided, this morning we get the rethink move of the re-reaction (which closed out Wednesday in a rebound wave). It looks like all 3 major indices will gap back below their T-lines (8ema) at the open today. However, it is far from certain whether the bears have the energy for a long run lower. After all, inflation is coming down, gas prices are as low as they have been in a year, layoffs have picked up (but nothing like they were in 2008), and the indications are that the consumer is still spending for the holidays. So, the world is not ending.

With that background, the short-term trend is bullish trendline looks like it might be broken today if we get any follow-through to the current premarket candles. . There is no problem with over-extension yet, either in terms of the T-line (8ema) or the T2122 indicator. So, both sides have room to run, if they have the buyers/sellers to do it. On the charts, we see resistance right above in the DIA (as well as T-line support/resistance in all 3) as well as potential support not far below in the SPY, QQQ, and DIA. Be ready for more whiplash as we get another shotgun blast of economic data at 8:30 am.

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: GSK, MRK, DXCM, HAL, NIO, TSLA, DKNG, and CRK. 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

FOMC Today With a Half Percent Priced In

Tuesday was the definition of “Whipsaw” as traders loved the CPI data and turned what had already looked like a gap up into a massive gap higher.  (The SPY gapped up 2.8%, the DIA gapped 2.14% higher, and the QQQ gapped up a whopping 3.82% at the open.)  However, then the bears showed up, driving a strong and persistent selloff until 1 pm.  That selloff had completely faded the opening gap in all 3 major indices (and more than faded it in the DIA).  By that point, the bulls were rested and began a slow rally back in the other direction until 2 pm, when another selloff began.  This volatile action gave us very large, gap-up, black candles with lower wicks in the DIA, SPY, and QQQ.

On the day, eight of the ten sectors are in the green with the Energy (+1.75%) sector leading us higher while the Communication Services (-0.13%) and Consumer Defensive (-0.11%) sectors were the laggards.  Meanwhile, the SPY was up 0.76%, the DIA was up 0.35%, and the QQQ was up 1.08%.  This action took place on greater than average volume.  The VXX fell by 4.14% to 14.58 and T2122 remains in the mid-range at 65.67.  10-year bond yields were also volatile but now down to 3.507% and Oil (WTI) was up more than 2.8% to $75.25 per barrel.  So, overall, it was an extremely volatile day that saw a range that was many times the close-to-close move.

In economic news, the November CPI showed a much smaller-than-expected increase of +0.1% (compared to the forecast of +0.3% and the October reading of +0.4%).  This was the smallest increase since August of 2021.  It also translates into an annualized consumer inflation of 7.1% (compared to 7.3% that was forecasted and the 7.7% annual CPI was sitting at last month.  As mentioned, the market loved this news since it is strong evidence that Fed moves to date have started to bring inflation down.  (And traders expect this to translate into a smaller rate hike and softened tone in the Fed announcement and presser today.)  Later, after the close, API reported that oil inventories unexpectedly rose by 7.8 million barrels this week (versus the forecast of a 3.9-million-barrel drawdown and last week’s 6.4-million-barrel drop). This was particularly unexpected given the midwest pipeline shutdown that is depriving a major storage hub of 662k barrels per day.

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In stock news, BA reported that its plane deliveries rose in November to 48 (up from 35 in October). Meanwhile, STLA recalled 1.4 million 2019-2022 Dodge Ram pickups over faulty tailgate latches.  In other auto news, F announced it is adding a third “crew” to its Dearborn F-150 Lightning electric vehicle assembly plant (increasing production capacity by 50%).  In the health industry, Reuters reports the MRNA Covid-19 vaccine has been now shown to work against the melanoma type of cancer.  This news drove MRNA stock massively higher, closing up 19.63% on the day.  Elsewhere, RTX has announced a $6 billion stock repurchase program.  Finally, the CEO of UAL told the media on Tuesday that UAL and its main competitors are preparing for a “mild” recession in 2023.  He went so far as to say that “if he didn’t read the Wall Street Journal or watch CNBC the word recession would not even be in his vocabulary right now.” Along those same lines, DAL said Wednesday morning that it expects to double earnings in 2023 due to “rebounded and robust” travel demand.

In anti-trust news, according to Bloomberg, AAPL will allow alternative app stores onto iPhones by the end of 2023…but only in the EU (where it is being forced to do so by anti-monopoly law).  This may end up a boon for MSFT, META, AMZN, and any other company with a major app store.  Meanwhile, ILMN began pre-emptively defending its purchase of Grail, by pledging to keep selling its DNA sequencing services to other firms.  This comes ahead of an FTC commissioner’s vote on the deal, which is the final US hurdle.  Still, the EU antitrust regulators have already temporarily blocked the deal and are set to make a final decision in early 2023.  Finally, on Tuesday, MSFT President Smith said the company has offered to agree to a legally-binding FTC Consent Decree that would force MSFT to continue providing the “Call of Duty” game franchise to rival game platforms if the FTC would allow the acquisition of ATVI to proceed.  (The EU is still investigating the deal and has promised to decide whether or not they’ll allow it by March 2023.)

In miscellaneous news, part of the reason behind Tuesday’s big rally in oil was that the Dollar dropped hard against all its major pair partners. The expectation of less hawkish action and verbiage out of the FOMC would have a weakening effect on the dollar.  Yet another impact of the good inflation news was a drop in mortgage rates.  A 30-year fixed-rate mortgage has dropped to 6.28%, which is nearly half a percent lower than the rate at the end of November.  Elsewhere, on Tuesday the Pentagon switched course and recommended that the US give Patriot Missile systems to Ukraine for air defense.  (Those are made by RTX, LMT, and BA.)  President Biden still needs to approve the shipments, but if it is done, it would be a major increase in capability for Ukraine to keep their country’s power grid online as repaired.

After the close, ABM reported beats on both the revenue and earnings lines.  However, ABM also lowered its forward guidance.  So far this morning, REVG has posted a beat on both the top and bottom lines.

Overnight, Asian markets leaned heavily to the green side.  Taiwan (+1.49%), South Korea (+1.13%), and Malaysia (+0.89%) led the rally while Chinese exchanges lagged.  Meanwhile, in Europe, exactly the opposite is taking shape at midday.  The only green on the European board is Athens (+0.18%) and Denmark (+0.20%).  At the same time, the FTSE (-0.24%), DAX (-0.51%), and CAC (-0.38%) are typical and lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are just on the green side of flat.  The DIA implies a +0.15% open, the SPY is implying a +0.15% open, and the QQQ implies a +0.10% open at this hour.  10-year bond yields are just south of flat at 3.503% and Oil is up 1% to $76.21/barrel in early trading.

The major economic news events scheduled for Wednesday include the November Import/Export Price Index (8:30 am), EIA Crude Oil Inventories (10:30 am), Fed Q4 Interest Rate Projections, Fed Economic Projections, FOMC Statement, and the Fed Interest Rate Decision (all at 2 pm), and FOMC Press Conference (2:30 pm).  (Note that Fed Futures have priced in an 80% probability of a 0.50% rate hike today.) The major earnings reports scheduled for before the open are limited to REVG.  Then after the close, LEN, NDSN, and TCOM report.

In economic news later this week, on Thursday, we get November Retail Sales, Weekly Initial Jobless Claims, NY Fed Empire State Mfg. Index, Philly fed Mfg. Index, Nov. Industrial Production, Oct. Business Inventories, and Oct. Retail Inventories are reported.  Finally, on Friday, Mfg. PMI and Services PMI are reported.

In earnings later this week, on Thursday we get reports from JBL and ADBE.  Finally, on Friday, we hear from CAN, DRI, and WGO.

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As all eyes look toward the Fed today, Bloomberg implies that somebody knew something early about CPI data which led to yesterday’s strong rally. Bloomberg says that there were massive bullish bets made in the minute prior to the release of CPI information. This magnified the premarket action and led to the huge gap-ups at the open. Only time will tell whether this will be investigated and whether the SEC could prove any inside info was acted upon.

With that background, the short-term trend is bullish after yesterday’s rollercoaster ride. Premarket prices are now essentially flat and there is no problem with over-extension, either in terms of the T-line (8ema) or the T2122 indicator. So, both the bulls and the bears have room to run once the FOMC gives its current verdict. Be ready for more whiplash as we are getting economic and interest rate projections in addition to the Fed release (and that statement’s verbiage will be parsed nine ways to Sunday). Then, a half hour later, Powell speaks AND answers questions. So, there will be something (probably several things) for both camps the latch onto today. And that is how you get the violent jerks back and forth as “average sentiment” gets worked out over an hour or two. (Also, beware that it is quite possible we then have another reassessment overnight and yet another market reaction to the news on Thursday morning.)

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: XLE, FNGU, GSK, HAL, APA, NEM, GEO, FIVN, ARDX, and AMAT 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.

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