Huge volatility was the rule Thursday. Stocks gapped sharply lower at the open (-2% in the SPY, -1.8% in the DIA, and -2.9% in the QQQ) after a hot September CPI number. However, as I had warned in the morning blog, whiplash immediately kicked in as the bulls led a huge rally until 11:45 am. Over those 2.25 hours, the SPY gained a massive 5%, DIA gained a staggering 4.5%, and QQQ gained an incredible 6%.  However, that was not the end of the huge volatility.  The rest of the afternoon, we saw a couple more big moves to the downside (and the resulting even larger whips back to the upside). Still, it is important to note that the volume on those later swings began to fade as the day ground on.  In the end, we closed not too far from the highs of the day. 

This action gave us huge, heavy volume, Bullish Engulfing candles (with small wicks on both ends) in all 3 major indices.  The SPY and DIA managed to cross and close above their T-lines (8ema), but the QQQ failed that test (at least for the day).  All 10 sectors are green with Energy (+3.67%) leading the charge and the Consumer Cyclical sector (+1.22%) lagging.  The SPY gained 2.61%, DIA gained 2,84%, and QQQ up 2.32%.  Meanwhile, the VXX fell 2.6% to 20.98 and T2122 has jumped from oversold up into the mid-range at 65.15.  10-year bond yields have spiked to 3.96% and Oil (WTI) was up 2.13% to $89.13/barrel.

In economic news, as mentioned above, the September Month-on-month CPI reading came in at +0.4% (versus +0.2% forecast and +0.1% in August).  That took the September Annualized CPI to +8.2% (versus +8.1% that had been forecast and +8.3% as of August).  So, inflation fell slightly on an annual basis, but not as much as expected.  The Weekly Initial Jobless Claims also came in slightly above expectations at 228k (versus 225k forecast and 219k last week).  Finally, in the late morning, the EIA Crude Oil Inventory showed a massive 9.880 million barrel increase in stocks (versus a forecast 1.750 million barrel build forecast and a drawdown of 1.356million barrels last week).

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In stock news, AAPL and GS launched a joint “high yield savings account” product for holders of the AAPL credit card.  Bloomberg reported that KR is in talks to buy smaller rival ACI.  ACI spiked 11.5% on the news and KR also closed up 1.15%.  Elsewhere, NFLX announced its long-planned “with Ads” tier service for $6.99/mo. starting Nov. 3.  Later, STLA (Dodge/Jeep parent) announced it is cutting one of its three shifts at its Warren MI plant due to a persistent shortage of chips.  Meanwhile, the Chairman of C told a conference that higher capital requirements for big banks (as proposed for the banks entering into riskier cryptocurrency business) might curb lending and make the “potential coming recession” worse.  Finally, a Brazilian court has fined AAPL $19 million and ordered that the iPhones the company sells in that country must come with chargers.

In trading news, on Thursday afternoon, Reuters reported that 24×7 stock trading is likely coming to the US within 5 years.  The report cited sources at several brokers, electronic exchanges, as well as the CBOE exchange, all speaking at the Security Traders Assn. Annual Conference.  There was no specific mention of Options, but one would assume that if the underlying assets were trading 24×7, the options on them would as well.  So, traders may need to study the trading processes and approaches being used in the Forex and Cryptocurrency markets today for a heads-up on how we may be trading stocks in the not-too-distant future.

In Energy news, despite the overall large build in US oil inventories last week, there was a disturbing drawdown in Diesel and Heating Oil stock.  The EIA reported that Distillates stocks, fell 4.9 million barrels for the week to the lowest level since May.  With Winter fast approaching this should be upsetting news for consumers that appear will get the shaft as low inventories allow dealers to charge higher prices.  This news was partially responsible for oil’s 2% rise on Thursday, despite a 10 million barrel increase in oil inventories and a 2 million barrel increase in gasoline stockpiles.

Overnight, Asian markets leaned heavily to the green side. Only Thailand (-0.12%) and Singapore (-0.03%) were in the red.  Meanwhile, Japan (+3.25%), Shenzhen (+2.81%), and Taiwan (+2.48%) led the gainers.  In Europe, we are seeing a similar push to the upside at midday.  Only Russia (-0.79%) is showing red, while the FTSE (+1.25%), DAX (+1.21%), and CAC (+1.77%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green open after Thursday’s volatile, large gain.  The DIA implies a +0.47% open, the SPY is implying a +0.32% open, and the QQQ implies a +0.08% open at this hour.  10-year bonds are showing their own volatility, plunging back down to 3.887% while Oil (WTI) is off just over 1% to $88.13/barrel in early trading.

The major economic news events scheduled for Friday include September Retail Sales and September Import/Export Price Indexes (both at 8:30 am), August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories (all at 10 am). The major earnings reports scheduled for the day include C, FRC, JPM, MS, PNC, USB, UNH, and WFC before the open.  There are no major reports scheduled for after the close.

So far this morning, UNH, JPM, WFC, C, USB, PNC, and FRC all posted beats on both the top and bottom lines.  JPM beat on revenue by almost $9 billion while the other large banks had significant revenue beats as well.  However, MS reported a miss on both revenue and earnings, which they attributed to a collapse of its investment banking business.  In addition, note that USB and FRC both lowered forward guidance after posting their beats.  Finally, KR (second only to WMT among US grocers) announced it has reached the previously mentioned deal to buy ACI (the fourth largest US grocer) for $34.10/share or $24.6 billion.

After yesterday’s extreme volatility and bullish reaction to CPI, as well as a dose of great earnings this morning, the overall mood is likely to be bullish, but leery early in the day. It is less likely the data we get today will reverse markets from any move, but it could dampen or amplify what Mr. Market is doing at that time. With that said, volatility remains a very big concern unless you have the stomach to ride out big swings.

With this backdrop, the premarket action seems to show some modest optimism. Extension isn’t a factor today, either in terms of the T-line or T2122. However, that T-line (8ema) will be a level to watch as we see whether it can hold as support for the large caps or resistance for the QQQ. Today we know three things for sure. First, the strong bear trend is still in place. Second, volatility and huge intraday reversals were off the charts yesterday. And third, the weekend, when we can’t adjust while the market is closed, lies just ahead. So, consider whether you need to take some money off the table or add hedges today. (Remember, the first rule of making big money is to not lose big money.)

So, don’t be stubborn. If you have a loss, just admit you were wrong and take it before it grows. And when the price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Also, keep in mind that trading is a job. It’s not a hobby. 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. Demonstrate patience and wait for confirmation. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets opened little changed Wednesday and then chopped sideways in a fairly small range.  The only exception to this was the SPY which plunged the last 15 minutes of the day to get back near the lows.  The DIA did retest its T-line (8ema), but failed, while the other 2 major indices didn’t even come close.  This action is giving us Indecisive, Inside Day candles in all 3 of the major indices.  The Spy printed more of an Inverted Hammer candle while the DIA gave us a Doji and the QQQ printed a Spinning Top. Overall, just a volatile, sideways day that seems to be coiling up as we wait for another shoe to fall.

On the day, seven of the 10 sectors are in the red with Utilities (-2.99%) being by far the biggest losing group.  On the other side, Consumer Cyclical (+0.27%), Consumer Defensive (+0.24%), and Energy (+0.20%) were the gaining sectors.  Meanwhile, SPY was down 0.32%, DIA was down 0.04%, and QQQ was down 0.03%. The VXX was off 1.01% to 21.54 and T2122 remains oversold at 15.81. 10-year bond yields backed off to 3.898% and Oil (WTI) was down 2.5% to $87.12/barrel.

In economic news, September PPI came in twice as hot as expected at +0.4% (versus +0.2% forecasted and actual in August).  For what it is worth, the September Core PPI (with food and energy prices stripped out) came in as expected at +0.3%, which was also the same as August.  In the afternoon, the September FOMC Meeting Minutes did not give us any new information.  Just as Fed speakers have been telling us since the meeting, the FOMC expects rate hikes to continue at a higher pace and a higher final interest rate level for a longer period than originally expected since inflation is showing little sign of abating yet.  After the close the API reported a 7.054-million-barrel crude oil inventory increase this week, dramatically reversing last week’s 1.770-million-barrel drawdown.  Finally, Treasury Sec. Yellen expressed concerns about liquidity in the bond market as many of the largest buyers have gone away.  Sovereigns, Japanese and European insurance and pension funds, etc. all have their own financial problems and are not looking to add US bonds.  As a result, as the supply of Treasuries has climbed, a lack of liquidity has driven average yields higher and caused outsized volatility.  (I’m not sure that is news, because that is how I was taught that free markets work…when supply goes up and demand goes down, the price falls, meaning in this case the yield rises. Nonetheless, she said it, and the financial media all thought it was newsworthy enough to report.)

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In stock news, Wednesday afternoon, it was announced that CCJ (a uranium supplier) and BEP (a utility) are teaming up to acquire Westinghouse from BBU (a holding company affiliated with BEP).  The $7.9 billion deal will give CCJ a 49% ownership interest in the Westinghouse venture as nuclear power becomes more popular again.  Across the pond, the EU approved the deal where CE will buy DD’s “Mobility and Materials” business unit for $11 billion.  After the close, CLF announced the USW union had ratified a new 4-year labor contract covering 12,000 of its employees.  At the same time, AMAT announced it was cutting its Q4 revenue estimate, citing new export regulations as a headwind.  Meanwhile, the NRLB cited SBUX for having called the police to disperse employees that were pro-union at a Kansas store.  Finally, AMZN announced that it is switching rockets for the upcoming launch of its prototype satellites (intended to compete with Elon Musk’s Starlink of satellite-based high-speed internet system).  The new rocket is from UAL (a joint venture by BA and LMT).

In Energy news, Oil was down in great part to a very strong dollar.  (The Euro fell further below parity to $0.97 while the Dollar rose to a 24-year high of 146.91 Yen.)  In company-related news, XOM announced that its new carbon emissions reduction business, called Low Carbon Solutions unit, had signed CF (the world’s largest ammonia manufacturer) as its first client.  At the same time, they signed a second deal with ENLC (an oil pipeline network).  After he close the EIA (US Energy Information Administration) said that consumers can expect to pay 28% more (compared to last year) to heat their homes this coming winter.  This is based on Natural Gas (half of all homes) prices up 28% year-over-year, Electricity (40% of homes) up 10% over last year, and Heating Oil (9% of homes) up 27% on the year.

So far this morning, WBA, TSM, and FAST all beat on both the revenue and earnings lines.  (As mentioned above, even though TSM beat, it also drastically cut new capital spending for the rest of the year…even while raising guidance.)  Meanwhile, BLK and CMC missed on revenue while beating on earnings.  On the other side, DAL beat on revenue while missing on earnings.  However, DAL did raise guidance after reporting a major surge in summer travel.  Finally, DPZ missed on both lines.

Overnight, Asian markets were red across the board.  Taiwan (-2.07%), Hong Kong (-1.87%), and South Korea (-1.80%) led the red tide, perhaps aided by TSM (the world’s largest chipmaker) cutting 2022 capital spending by 10% in a major warning shot fired across the bow of tech companies.  Meanwhile, in Europe, stock exchanges are mixed but lean to the green side at midday.  The FTSE (+0.04%), DAX (+0.87%), and CAC (+0.40%) are leading the move with four of the smaller exchanges lagging and still red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly green open ahead of consumer inflation data.  The DIA implies a +0.58% open, the SPY is implying a +0.55% open, and the QQQ implies a +0.30% open at this hour.  10-year bond yields remain at 3.89% and Oil (WTI) is also little moved at $87.40/barrel in early trading.

The major economic news events scheduled for Thursday include September CPI and Weekly Initial Jobless Claims (both at 8:30 am), EIA Weekly Crude Oil Inventories (11 am), and the Federal Budget Balance (2 pm tentative).  The major earnings reports scheduled for the day include BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA before the open.  There are no major reports scheduled for after the close.

In economic news later this week, on Friday we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, on Friday, the big banks really kick off earnings season as C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

Markets will be focused on CPI data in at least the pre-market this morning, even though we have had some generally good earnings reports. For what it is worth, Moody’s Chief Economist said overnight that his analysis leads him to expect a significant inflation reduction within 6 months. However, just from a read-through of the PPI data, we should expect a very hot inflation number today. Don’t be surprised if we see more whiplash as markets overreact early, rethink and whip back in the other direction. However, at the moment we appear stuck between this week’s low and the T-line.

With this backdrop, the premarket action seems to show some optimism ahead of the CPI data. The market remains a bit extended in terms of T2122, but not extremely so. Watch the T-line levels for resistance if we bounce on the CPI data. Once again, the one thing we know is that the strong bear trend is still in place and markets have been indecisive the last two days…as if waiting. So, don’t predict a bottom, but keep a watchful eye on market price action.

Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Also, keep in mind that trading is a job. It’s not a hobby. 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. Demonstrate patience and wait for confirmation. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: WBA, APA, HALO, BA, RCL, MO, UPST. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The DIA diverged from the SPY and QQQ at the open Tuesday.  Both SPY and QQQ gapped down half of a percent and then both followed through strongly for 30 minutes to lows where SPY was down 1.20% and QQQ was down 1.75% at 10 am. Meanwhile, DIA gapped down just 0.25 percent and then traded sideways in a very tight range for the first 30 minutes.  However, at 10 am, all 3 got back in lock-step as the bulls started a strong rally that lasted until 1 pm, where we found the highs of the day.  After a little less than 2 hours of grinding slightly lower, the bears really kicked into high gear at about 2:40 pm and drove us to new lows for the day in all 3 major indices at 3:20 pm.  Then the chop continued as the bulls stepped back in to bounce us up off those lows the last 40 minutes of the day.  This action gave us gap-down, indecisive, candles with large upper wicks and smaller lower wicks.  In other words, Spinning Top type candles in all 3 indices.  The DIA retested its T-line (8ema) and failed the test earlier in the day.

On the day, eight of the 10 sectors are in the red with Consumer Defensive (+0.60%) leading the gains and Technology (-1.89%) being by far the sector showing the largest loss.  Meanwhile, SPY lost 0.65%, DIA gained 0.11%, and QQQ lost 1.37%.  The VXX was up 1.5% to 21.76 and T2122 remains in the oversold territory at 12.50.  10-year bond yields rose to 3.937% and Oil (WTI) fell 2.75% to $88.64/barrel.  Overall, it has been a volatile, choppy, and indecisive day across the market.  It may be that markets were really just waiting on inflation and earnings data later this week.

In FOMC news, on Tuesday, Philly Fed President Harker again told an audience he believes the central bank can reduce inflation without triggering a deep recession and causing high unemployment.  However, he did not give additional clues about the size of rate hikes he feels appropriate to do that inflation fight or how long they will continue. Later, Cleveland Fed President Mester told a NY Economic Club audience the Fed needs to continue raising rates.  She reiterated that “at some point, as inflation comes down, then my risk calculation will shift.  But at this point, my concern lies more on the fact we haven’t seen progress on inflation.”  She continued, “Given current economic conditions and the outlook, in my view, the larger risks come from tightening too little.” (She thus implied that she continues to favor at least 0.75% hikes.)

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In stock news, BK announced it will join COIN and BLK in offering cryptocurrency custody services.  Meanwhile, UBER, LYFT, and DASH all slumped Tuesday after a Dept. of Labor proposal was announced that would require any contractor that was “economically dependent” on a company to be classified as an employee by that company.  This would dramatically raise costs.  In union news, AMZN workers in Southern CA have filed a petition with the National Labor Relations Board to have a union election.  At the same time, the voting started in the AMZN upstate NY union vote.  Elsewhere, the US Supreme Court heard arguments on whether or not to overturn a CA law prohibiting the sale of meat (pork) from animals that were kept in tightly confined spaces (which is true for hogs (pork) and chickens and could even be argued for cattle).  Companies that will be directly impacted include TSN, BRFS, HRL, IBA, PPC, and SAFM.  Finally, in “sale news,” AMZN, WMT, and BBY kicked off the holiday sales season with major online sales events (which follow the success of AMZN Prime Day).  Those 2-day sales started Tuesday.

In European economic news, Tuesday afternoon (US time), BoE Governor Baily told UK fund and investors that they had 3 days to get their portfolios fixed before the central bank will withdraw its bond-buying support from the market.  The BoE has stepped in the last 2 weeks with emergency buying to prevent UK bonds from reaching a “self-reinforcing fire sale” situation.  He also implies that this emergency action will delay quantitative tightening by the BoE (which was scheduled to start Oct. 31) until later this year.  Elsewhere, the ECB announced it will wait until interest rates are back close to 2% before it begins to shrink its own balance sheet.

So far this morning, PEP beat on both the revenue (by over $1.13 billion) and earnings (by 7%) lines.  The company also raised its 2022 annual forecast for revenue by 20% (from +10% to +12% for the year).  The company said its revenue rose 20% for Q3 (through price increases) despite a small decline in product volume sold. This indicates that the “inflation story” has given the company cover to increase prices by significantly more than costs rose and that the consumer is willing to accept these higher prices.

In mortgage news, home loan applications fell 2% for the week as the interest rate on a 30-year, fixed-rate, conforming loan went from 6.75% to 6.81%.  However, as rates have risen, there has been renewed interest in adjustable-rate mortgages (which has been a dead niche for years).  (ARMs used to make up less than 3% of loans and now are up to 12% of all new home loans.)  This shift comes as home buyers have become accustomed to very low rates and either expect rates to come back down or are betting that they will have moved again before the rate adjusts up.  The rate for a 5/1 ARM (rate is set for 5 years) is just 5.56%.

Overnight, Asian markets were mixed again but more evenly split today.  Shenzhen (+2.46%) and Shanghai (+1.53%) were by far the strongest markets.  Meanwhile, it was Hong Kong (-0.78%), New Zealand (-0.76%), and Singapore (-0.70%) that paced the region’s losses.  In Europe, the bourses are mixed on mostly modest moves at midday.  The FTSE (-0.10%), DAX (+0.20%), and CAC (+0.11%) show indecision at this point.  At the same time, smaller exchanges are showing greater moves (in both directions) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green start to the day.  The DIA implies a +0.49% open, the SPY is implying a +0.67% open, and the QQQ implies a +0.89% open at this hour.  At the same time, 10-year bond yields are up strongly again to 3.958% and Oil (WTI) is up one-half of a percent at $89.79/barrel in early trading.

The major economic news events scheduled for Wednesday include September PPI (8:30 am), WASDE Ag Report and EIA Short-Term Energy Outlook (both at noon), September Fed Meeting Minutes (2 pm), and the API Weekly Crude Oil Stocks report (4:30 pm).  We also have a Fed speaker scheduled (Bowman at 6:30 pm).  The major earnings reports scheduled for the day are limited to PEP and WIT before the open.  There are no major reports after the close.

In economic news later this week, on Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, and the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Bus. Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

This morning all eyes will be on the PPI numbers during the pre-market. After that, some may look ahead to the Fed Minutes in the afternoon. However, we already know what FOMC Chair Powell said that day and have had an absolute chorus of Fed speakers reiterating the same story since. So, the meeting minutes may be a non-story. So, I think the inflation data (and read-through to out-guessing when the Fed will lighten up) will be the main market driver today. Don’t be surprised if we see some market “dead time” as some traders decide to wait on CPI and the real start of the Earnings Season before placing many bets. Overall then, look for morning volatility and a potentially dead market once we get past that knee-jerk and “second thought.”

With this backdrop, the premarket action seems to show some optimism ahead of the PPI data. The market is a bit extended in terms of T2122, but not extremely so. Watch the T-line levels for resistance if the bounce gets that far. Once again, the one thing we know for sure is that the strong bear trend is still in place and that has to be the main directional indicator we heed. So, don’t predict a bottom. If you are going long the market, be sure you are either quick or in it for the long term because a resumption of the down move is the most likely scenario for now.

Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Also, keep in mind that trading is a job. It’s not a hobby. 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. Demonstrate patience and wait for confirmation. Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: EOG, COP, DVN, SLB, OXY, MRO, VLO, PSX. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped modestly higher Monday (+0.33% in the SPY, +0.45% in DIA, and +0.10% in the QQQ).  However, the bears immediately stepped in to sell off the market to reach the lows of the day at about 1:15 pm.  At that point, we reversed on a dime as the bulls took over to lead a strong rally for 45 minutes.  Finally, we started a sideways roller-coaster ride of smaller moves for the last 2 hours of the day. This action has left us with black-bodied, Hammer Type candles with long, lower wicks in all 3 of the major indices.  It is also worth noting that all 3 indices are also getting a little extended below their T-line (8ema) and both the SPY and QQQ are testing the breakout area of their Dreaded-h patterns.

On the day, 3 of the 10 sectors are in the green, but none of them were significantly higher.  Consumer Defensive (+0.21%) was the largest gaining sector while Energy (-1.95%) and Technology (-1.94%) paced the losses.  Meanwhile, the SPY was down 0.72%, DIA was down 0.34%, and QQQ was down 1.08% (to a 2-year low).  The VXX was up just less than 2.49% to 21.43 and T2122 was up, but remains in the oversold area at 13.38.  10-year bond yields remain at 3.888% since the bond market was closed and Oil is down 2% to $90.75/barrel.  Overall, it was an indecisive down day.

In economic news, midday, Chicago Fed President Evans continued to chorus from the Fed, saying that fighting inflation is still the top priority, even if it means job losses.  At roughly the same time, JPM CEO Jamie Dimon told CNBC that said that the US economy is “actually doing very well” at the moment.  However, he sees a “very, very serious” combination of headwinds that are likely to push the US and global economies into recession in the next six to nine months. He went on to say that Europe is already in recession and blamed the Fed for waiting too long to fight inflation and then doing too little.  His opinion stands in contrast to others like Ark Investors CEO Cathie Wood who released an open letter to the Fed Monday warning that their tight policy could very well cause deflation if they don’t ease.  Elsewhere, in the afternoon, the union that represents workers who build and maintain rail tracks voted to reject the offer made by the committee representing the major freight rail carriers.  This brings the total to date to only four of 12 unions that have voted to accept the offer.  However, the parties have agreed to a “cooling off period.”  So, no rail strike is immediately imminent and negotiations will resume.

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In stock news, Bloomberg reported Monday afternoon that XOM is considering buying DEN.  No final decisions have been reached, but DEN has been seeking strategic options.  BA rival Airbus (an OTC stock) increased deliveries in September, delivering 55 aircraft to bring the YTD total to 437.  BA will announce its own numbers Tuesday.  The Wall Street Journal reported that BIO is in talks to merge with QGEN.  Elsewhere, the European Commission has informed TEVA that its preliminary view is that the company has breached European Union antitrust rules.  Relate to climate and green initiatives, HON announced it has a new technology that can convert ethanol into jet fuel.  This would reduce emissions and help airlines comply with standards that can let them qualify for incentives as laid out in the US Inflation Reduction Act.  Finally, after-hours LEG cut its 2022 guidance by between $100 million and $200 million.  LEG stock was down 8% in after-hours trading.

In Russian news, on Monday, the Putin regime retaliated for the weekend bombing of his bridge over the Kerch straight (to Crimea).  Russia launched well over 100 cruise missiles, 30 kamikaze drones, and more than 40 rockets.  About half of the missiles and nearly all of the drones were shot down by Ukrainian forces.  However, that left about 50 missiles and 40 smaller rockets that hit their non-military targets, many of which were not even of an infrastructure nature.  The G-7 will hold an emergency meeting to discuss responses to the Russian attacks today and Ukrainian President Zelenskyy will speak.  Elsewhere, pro-Russian hackers briefly took airport websites in Chicago, Los Angeles, Atlanta, and New York offline Monday.

The Bank of England was forced to step into UK bond markets again Tuesday.  A day after it extended its emergency measures to backstop pension funds, the BoE said it was seeing “fire sale dynamics” in the UK bond market as it began buying inflation-tied bonds (in addition to its other bond buying).  One of the important UK financial think tanks (IFS) said it estimates the new UK government will need to come up with $66 billion in spending cuts before the new budget is announced (a month early to shore up markets) on October 31.

Overnight, Asian markets were mixed again, but leaned heavily to the downside.  Taiwan (-4.35%), Japan (-2.64%), and Hong Kong (-2.23%) led the region lower on fears of economic slowdown and the impacts of President Biden’s chip export (to China) bans.  Meanwhile, Shenzhen (+0.53%), New Zealand (+0.35%), and Shanghai (+0.19%) managed to stay green.  In Europe, with the exception of Russia (+1.42%), stock exchanges are red across the board at midday.  The FTSE (-0.94%), DAX (-0.87%), and CAC (-0.54%) lead the region lower in early afternoon trade.  As of 7:30 am, US Futures are pointing a down start to the day.  The DIA implies a -0.52% open, the SPY is implying a -0.62% open, and the QQQ implies a -0.60% open at this hour.  10-year bond yields are up to 3.924% and Oil (WTI) is off 2.34% to $88.96/barrel in early trading.

There major economic news events scheduled for Tuesday are limited to a pair of Fed speakers (Harker at 11:30 am and Mester at noon).  Once again, there are no major earnings reports scheduled for the day.

In economic news later this week, on Wednesday we get September PPI, the WASDE Ag Report, September Fed Meeting Minutes, and the API Weekly Crude Oil Stocks report and Fed member Bowman speaks.  Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

In earnings reports later this week, on Wednesday, PEP and WIT report.  Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

Markets seem very fragile amidst the global recession fears, new chip export to China bans (TSM was down 8% in Taiwan overnight), and the Russian War caused energy crisis (and OPEC’s support of Russia and higher oil prices through production cuts). With Inflation data coming both Wednesday (PPI) and Thursday (CPI) as well as Earnings Season kicking off again with Big Banks on Friday, it is hard to see a catalyst for any bullish turn other than a “hopium knee-jerk reaction” to some data point. So, the mood is glum and the market bias will remain bearish overall for at least the short-term.

With this backdrop, the premarket action seems pretty tame, down a half of a percent overall. (Again, perhaps because Mr. Market is waiting on another shoe to drop.) The market SPY and especially the QQQ are extended (to the downside) from their T-Lines, but the DIA remains within 1.3% in premarket and T2122 is oversold, but not extremely. So, a bounce is not set up technically. As has been true for quite a while, the one thing we know for sure this morning is that the strong bear trend is still in place and again that should be the main directional indicator we heed. The large-cap indices MAY find some support at their Dreaded-h pattern breakout levels. However, remember that level did nothing to help the QQQ bulls hold up.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SRTY, MARA, WDC, MMM, QQQ, NFLX, DASH, RIVN. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

On Friday, markets gapped lower on the better-than-expected September Payroll data (which leads traders to conclude that what the Fed has been saying is true…and the Fed will not be easing up on rate hikes anytime soon).  SPY gapped down 1.1%, DIA gapped down 0.9%, and QQQ gapped down 1.75%.  After that, the Bears followed up with a strong selloff in the first 30 minutes before starting a much slower downtrend that has lasted all the way into a small bounce in the last 30 minutes of the day.  This action has given us gap-down, large black candles with small lower wicks that are starting to get just a little extended below the T-line (8ema).  The QQQ is even nearing the breakout of its bearish “Dreaded h” pattern.

On the day, all 10 sectors are in the red.  Technology (-4.13%) is leading the way lower while Energy (-0.62%) is the laggard in the decline.  At the same time, SPY was down 2.81%, DIA is down 2.08%, and QQQ is down 3.81%.  The VXX is up 4% to 20.91 and T2122 has dropped back into the oversold territory at 8.54. 10-year bond yields are up to 3.883% and Oil (WTI) has spiked 4.76% to $92.66/barrel after a strong Payrolls Report seemed to tell the market demand will remain high while production will go down (based on the upcoming OPEC+ production cuts).  So, it was a “good news is bad news” day that has all 3 major indices working on another dreaded-h pattern.

In economic news, September Nonfarm Payrolls came in above expectation (at +263k versus +250k forecasted and +315k in August).  However, September Avg. Hourly Earnings came in lower than expected at +5.0% versus +5.1% forecasted and +5.2% in August.  That may be partially responsible for the September Participation Rate falling slightly to 62.3% (from 62.4% in August).  With that said, the September Unemployment fell to 3.5% (from 3.7% forecasted and 3.7% in August).  So, both of the headline numbers fall into the category of “things that will not give the Fed reason to start easing their rate hikes.”

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In stock news, on Friday, BP announced that it has boosted spending by $500 million in the North Sea and US Shale Basin in response to oil and gas shortages. However, it does not expect any of those projects to increase production for months.  PEP also said it expects to receive the first of 100 TSLA semi tractors on Dec. 1.  (The trucks have been on order since 2017 and PEP will be the first company to receive the new TLSA Semi.)   NIO announced that it will only lease (not sell) its electric vehicles when they go to market in Europe later this year.  The average lease will be $1,200/month.  Elsewhere, the NHTSA announced it has closed a safety investigation (started in 2017) into tired from GT.  Finally, RIVN has recalled almost all of the vehicles they have built over safety concerns stemming from a bolt that appears not fully tightened during production (on nearly every car).

In warning news, an FDX internal memo reported by Reuters showed that the company is significantly lowering its holiday package volume forecast.  The memo did not give the new number but warned contractor delivery companies to expect a downward adjustment to forecasts soon as major shippers have told FDX executives they are adjusting their own forecasts lower.  On Saturday, SSGFF (Samsung) warned that its profits will take up to a 32% hit for the year due to a slowdown in memory chip sales, meaning its customers like INTC, AMD, NVDA, LNVGY, AAPL, HPE, and DELL must be buying less and their own forecasts could be in jeopardy.

In international news, on Saturday, Russia seized the Sakhalin-1 Oil and Gas Project, which leaves US, Japanese, and Indian investors at risk as the order puts a Russian Operator in charge and authority over whether foreign investors can retain their stakes given to the Russian government.  XOM has/had a 30% stake in the project, while Japan’s Sodeco had a 50% stake.  Elsewhere, also Saturday, Taiwan signaled that it will follow President Biden’s new export controls (issued Friday) which limit the export of semiconductor chips made anywhere in the world using US chipmaking equipment.  This will end exports from TSM (and much smaller UMC) to China.  In France, strikes at oil refineries and storage facilities owned by TOT and XOM have more than 21% of gas stations closed for lack of supply.  TOT announced it will begin wage negotiations with the union this month.  The French government said it has a plan to ration fuel, but the situation has not yet reached that point.

Overnight, Asian markets were red across the board.  Hong Kong (-2.95%), Shenzhen (-2.38%), and Shanghai (-1.66%) led the region lower.  In Europe, markets are mixed but lean to the red side in midday trading.  The FTSE (-0.31%), DAX (+0.64%), and CAC (-0.07%) lead the market, with Russia (-3.21%) being an outlier in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly red start to the day.  The DIA implies a flat -0.06% open, the SPY is implying a -0.15% open, and the QQQ implies a -0.25% open at this hour.  10-yeat bond yields are at 3.888% and Oil (WTI) is down eight-tenths of a percent to $91.90/barrel in early trading.

There are no major economic news events scheduled for Monday (Columbus Day).  Bond markets are closed (although stock markets are open).  However, we do have a Fed speaker (Brainard at 1 pm).  There are no major earnings reports scheduled for the day.

In economic news later this week, on Tuesday we have another pair of Fed speaker (Harker and Mester).  Then on Wednesday we get September PPI, the WASDE Ag Report, September Fed Meeting Minutes, and the API Weekly Crude Oil Stocks report and Fed member Bowman speaks.  Thursday, September CPI, Weekly Initial Jobless Claims, EIA Weekly Crude Oil Inventories, the Federal Budget Balance are reported.  Finally, on Friday, we get September Retail Sales, September Import/Exports, August Business Inventories, Mich. Consumer Sentiment, and August Retail Inventories.

The silly season begins again later this week after a couple of days of reprieve. There are no reports scheduled for Monday or Tuesday.  Then, on Wednesday, both PEP and WIT report.  On Thursday, we hear from BLK, CMC, DAL, DPZ, FAST, INFY, PGR, TSM, and WBA.  Finally, on Friday, the banks really kick off the season with C, FRC, JPM, MS, PNC, USB, UNH, and WFC all report.

With September Payrolls behind us and the Fed chorus continuing to beg us to believe that they will not be easing up on rate hikes anytime soon, dejected traders will start watching for earnings evidence to support their preconceived ideas. The weekend has probably taken care of the Payrolls Report volatility. However, good old-fashioned everyday volatility is likely to remain. Also, keep an eye on Ukraine as Putin is a sore loser and has lost face after 2 lanes of his Kerch Bridge were blown up on Saturday. It appears he is moving another large group of soldiers toward Belarus again, perhaps planning to take another run at Kyiv.

With this backdrop, the premarket action seems pretty mild. (Again, perhaps waiting on earnings to begin.) The market extension (to the downside) is a modest issue but we’ve seen far worse recently. So, I will start to watch for (but not expect today) a consolidation or relief rally. The one thing we know for sure this morning is that the strong bear trend is still in place and again that should be the main directional indicator we heed.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: TOST, TWTR, SNOW, RBLX, AAPL, META, SBUX, TSLA, and PYPL. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

The 3 major indices gapped modestly lower at the open Thursday.  Then, initial volatility kicked in for the first hour of the day, reaching the day’s highs and lows in that hour.  After that, stocks meandered sideways in a tight range in the lower half of the day’s range until 2:45 pm (when the bears pushed us lower into new lows for the day.  This action left us with black-bodied, long-wick, indecisive candles in all 3 major indices.  All 3 still remain above their T-line (8ema).  This can also be seen as a Bearish Harami candle in the QQQ and SPY indices.

On the day, 9 of the 10 sectors are in the red.  Energy (+0.74%) was the lone green sector while Utilities (-2.90%) was by far the lagging sector.  Meanwhile, the SPY was down 1.04%, DIA down 1.16%, and QQQ down 0.79%.  The VXX was up 2.92% to 20.09 and T2122 fell but remains in the mid-range at 42.25. 10-year bond yields spiked to 3.822% and Oil was up 1.44% to $89.02/barrel.  Overall, this made Thursday a day of consolidation, perhaps as the market waits on today’s September Payrolls reports.

In economic news, the Weekly Initial Jobless claims came in higher than expected at 219k (versus 203k forecast and last week’s 190k reported).  Meanwhile, among Fed speakers, Minneapolis Fed President Kaskari said the Fed has “more work to do on bringing down inflation” and that the Fed is “quite a way away from being able to pause aggressive rate hikes.  At the same time, Chicago Fed President Evans said that the Fed’s rate policy is likely headed to 4.5% – 4.75% by Spring 2023, saying the Fed has “further to go” (on rate hikes).  New Fed Governor Cook said that inflation “remains stubbornly and unacceptably high and the data over the last few months show that inflationary pressure remains broad-based.”  She went on to say “we (Fed) will keep at it until the job is done.”  So, once again, every Fed speaker has told us that there is no letup in sight on Fed rate hikes (despite Fed Fund Futures pricing in a rate cut next year).

SNAP Case Study | Actual Trade

In stock news, during the day, a French court substantially lowered the fine that had been levied against AAPL (from $1.1 billion to $366 million) for anti-competitive behavior.  While the court agreed that AAPL had abused retailers economic dependency on the company, it also overruled the guilty charge of price-fixing as unproven.  Elsewhere, TM announced that is resuming production of its first electric vehicle (which had been halted for 3 months while new safety measures were designed and implemented related to the batteries).  HMC also announced its first electric SUV, which will hit the market for the 2024 model year.  Meanwhile, the Executive Chairwoman of FFIE resigned (Oct. 3 but announced Thursday), citing death threats she has received during the ongoing fight for control of the company’s board.  In addition, BRY stock jumped during the late afternoon when Reuters reported the company is exploring “strategic options including a potential sale.”  Finally, Elon Musk again asked for a postponement of the TWTR litigation and said that he expects the original deal to close on or about Oct. 28.

In profit warning news, after the close, LEVI missed on revenue and beat on earnings.  However, it also cut its full-year forecast.  LEVI also warned on profits citing inflation and a consumer shift away from higher-end products.  Elsewhere, AMD issued its Q3 preliminary results (it is scheduled to officially report November 1, after the close).  The company said results are likely to come in well below forecast on both weaker demand and supply chain issues.  The company expects gross margins of about 50% (versus the previous forecast of 54%).  Meanwhile, Bloomberg reports that its sources indicate CS may lose $2 billion this year.  In related news, CS is trying to bring in an unnamed outside investor to purchase its advisory and investment banking units as the main part of CEO Koerner’s restructuring plan.  Finally, this morning CS announced it will be buying back just over $3 billion of its own debt and selling the bank-owned Savoy Hotel (located in the Swiss Financial district) in an attempt to fight off a falling share price and ever-increasing bets against the company’s credit default swaps.

In pot news, President Biden pardoned thousands of people with federal convictions for simple marijuana possession.  He also initiated a new review of how the drug is classified.  (Currently marijuana is classified as “schedule 1” or the most dangerous class of drug.  This is a higher classification, meaning harsher penalties, than fentanyl or methamphetamine.)  The President also went on to put pressure on state and local officials by saying nobody should be in jail solely for marijuana possession and urged governors to follow his lead on the matter.  Cannabis tickers like TLRY and CGC jumped more than 20% on the news.

Overnight, Asian markets were red across the board.  Hong Kong (-1.51%), Taiwan (-1.37%), and Shenzhen (-1.29%) led the region lower.  Meanwhile, in Europe, stocks are mixed on modest moves at midday.  The FTSE (+0.14%), DAX (-0.08%), and CAC (+0.16%) lead the region on volume, per normal, in early afternoon trade. However, it appears the region is waiting on the US September Payrolls Reports as a read-through to economic slowing (and perhaps Fed actions).  As of 7:30 am, US Futures are pointing toward a mixed, flat start to the day.  The DIA implies a +0.22% open, the SPY is implying a +0.06% open, and the QQQ implies a -0.25% open at this hour (pre-news).  10-year bond yields are up again to 3.845% and Oil (WTI) is up 1% to $89.35/barrel in early trading.

The major economic news events scheduled for Friday include Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate (all at 8:30 am).  We also have a Fed speaker (Williams at 10 am).  There are no major earnings reports scheduled for the day.

With September Payrolls data coming today, do not be surprised if a beat is bad for markets (as traders assume the Fed will keep on the path of over-sized rate hikes) and visa-versa (a miss may cause traders to jump to the conclusion that the Fed will ease up). The average estimate is for a gain of 255k jobs in September. In either case, we can probably expect the market reaction to be an overreaction and a short-lived one at that. In other words, we are likely to see a swing back the other way very soon. On top of that, there has been no indication whatsoever from Fed members that they are even considering an easing. In fact, most true Fed Watchers are of the opinion they will not change course until something in the economy breaks.

With this backdrop, the premarket action seems to be waiting on the news. Market extension is not an issue as the premarket action has us sitting on the T-line (8ema) in all 3 major indices. The one thing we know for sure this morning is that the strong bear trend has not been broken and that is the main directional indicator we should heed. As mentioned, expect significant volatility today, especially in the premarket as the Payrolls data is released. So, in general, unless you are very quick or very comfortable in high volatility, this could be a day to sit on your hands and “wait and see” at least in the morning.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: No tickers 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped significantly lower on Wednesday (1.25% in the SPY, 1.15% in the DIA, and 1.35% in the QQQ) as markets followed Europe in rethinking whether the Fed would actually pivot soon.  The bears then proceeded to follow through, taking us to the lows of the day at 10:30 am.  However, the bulls stepped in to buy the pullback again, leading a long, steady rally which more than faded the gap and took us to the highs of the day at 3:20 pm.  Then there was one more reversal as the bears took back over at 3:20 pm and drove prices back down into the morning gap by the close.  This action is giving us gap-down, large white candles with wicks on both ends, that had bounced up off the T-line (8ema).

On the day, 7 of the 10 sectors are in the red with Energy (+1.31%) far out front due to the OPEC+ production cut.  On the lagging side, Communications Services (+1.77%) and Utilities (-2.08%) brought up the rear.  Meanwhile, SPY lost 0.19%, DIA lost 0.10% and QQQ lost 0.05%. The VXX is up 0.67% to 19.52 and T2122 is a bit higher y at 69.42.  The 10-year bond yields are back up to 3.751% and Oil (WTI) is up 1.63% to $87.93/barrel.  Basically, it was a schizophrenic day with a strong gap and run one direction that completely reversed to go back in the other direction and then reversed yet again.  However, the very short-term bullish trend remains intact.

In economic news, ADP reported September Nonfarm Employment went up more than expected, coming in at +208k jobs (versus +200k forecast and +185k in August).  The August Trade Balance also was less slightly negative than expected at -$67.40 billion versus -$67.70 billion forecast and -$70.50 billion in July.  In addition, September Services PMI came in better than expected at 49.3 (versus 49.2 forecast and 43.7 in August).  The ISM September Non-Mfg. PMI also came in hotter than expected at 56.7 (versus 56.0 forecast and 56.9 in August).  Overall, these are all things the Fed will not like to see and will probably want to come in worse to slow inflation.  Finally, EIA Weekly Crude Oil Inventories came in with a 1.356 million drawdown (compared to a forecast 2.052-million-barrel build).

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In energy news, as mentioned above, OPEC+ decided on and announced a 2 million barrel per day production cut starting in November.  This was at the very high end of analyst estimates for the cut, which had ranged between 0.5 million and 2 million.  The group’s stated aim is to get oil prices to stabilize in the $100 – $105 / barrel range.  Not that it matters much, but most analysts still do not expect the full 2 million barrel cut to be implemented as all OPEC+ countries tend to cheat their quotas at the margins. Elsewhere, the CEO of TTE made an announcement that the French energy giant will continue to ship Russian liquified Natural gas as long as there are no European sanctions on that fuel.

In stock news, TSN announced it is joining other major corporations and moving its corporate headquarters out of Illinois and into Arkansas.  This move will impact 1,000 employees.  Then, after the close, GM agreed to pay $3.5 million to the DOJ to resolve claims that failed to provide benefits and protections to US service members.  This amount only includes $65,000 in penalties and the other $3.435 million will go to the affected US service members.  Elsewhere, F announced an 11% price hike on electric F-150 Lightning Pro trucks for the 2023 model year.  That brings the base price to $51,974.  At the same time, COST announced comparable store sales rose by 8.5% in September.  This includes an 11.2% increase in US stores and a much smaller 5.7% increase in Canadian stores. Finally, this morning PTON CEO McCarthy said that his company has 6 months to prove it can survive and that 500 more job cuts are coming soon. PTON was down as much as 8% in premarket trade on this “news” but has recovered to be down only 1.65% at the moment.

In miscellaneous news, Bloomberg reported that the entire midday reversal and long rally was likely sparked by a single options trade.  They described this trade as a $31 million debit spread on SPX futures, buying 20,000 October $4500 Calls and 14,000 March $4300 Calls while also selling 48,000 January $4500 Calls.  Elsewhere, late in the afternoon, GS raised its Q3 GDP estimate to +1.9% (from the previous, and recently revised downward, +0.9%).  So, in other words, the economy was stronger in Q3 than GS had expected, even as late as mid-Q3. In Fed speak, Atlanta Fed President Bostic said that the Fed’s fight against inflation is still in early days. Specifically, he said that “despite some glimmers of hope (in recent data), the overarching message I’m drawing (from data) is that we are decidedly in the inflationary woods…not out of them.”

So far this morning, MKC and CAG bother reported beating on the revenue and earnings lines.  The STZ report is late for some reason.

Overnight, Asian markets were mixed.  Shenzhen (-1.29%), Shanghai (-0.55%), and New Zealand (-0.49%) half of the region lower.  Meanwhile, South Korea (+1.02%), Taiwan (+0.66%), and Thailand (+0.56%) led the other half of the region higher.   Over in Europe, stocks are mostly in the red at midday.  The FTSE (-0.71%), DAX (-0.43%), and CA (-0.42%) lead the majority of exchanges lower.  However, there are a handful of smaller exchanges still modestly in the green in early afternoon trading.  As of 7:30 am, US Futures are pointing toward another down start to the day.  The DIA implies a -0.57% open, the SPY is implying a -0.63% open, and the QQQ implies a -0.57% open at this hour.  10-year bond yields are up a bit to 3.773% and Oil (WTI) is off fractionally to $87.44/barrel in early trading.

The major economic news events scheduled for Thursday is limited to Weekly Initial Jobless Claims (8:30 am).  However, we also have two more Fed speakers after the close (Waller at 5 pm and Mester at 6:30 pm).  The major earnings reports scheduled for the day is limited to CAG, STZ, and MKC before the open.  Then after the close, LEVI reports.

In economic news later this week, on Friday, we get Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate.  In earnings reports later this week, on Friday, there are no major earnings reports scheduled.

Overall, the market seems to be caught in the horns of a dilemma. Fed speaker after Fed speaker keeps saying that the fight against inflation is still in the early stages, they may raise rates as high as 4.5% before the end of 2022, and there will be no rate cuts in 2023. However, markets (as gauged by Fed Fund Futures and large-scale equity dip buying) continue to forecast a slowing of easing and a rate cut in 2023. The most recent reasoning being argued is that the Fed needs to slow tightening and then start cutting in order to save other major global economies from collapse. (For example, the UK faces another cliff next week when the BoE stops buying bonds and the new Truss government is still untrusted. Meanwhile, China faces massive government debt, has just reduced its lending to other countries, and has domestic real estate and banking sectors in turmoil.) So, some traders seem to be betting the Fed will let the US live with inflation in favor of stabilizing the global economy.

With this backdrop, the premarket action has been inside of yesterday’s candle in the major indices. This may indicate we are just consolidating and waiting on the September Payrolls data on Friday. Market extension is not a major issue given the implied open. However, the strong bear trend has not been broken and is the main directional indicator we should heed. Continue to expect volatility and watch for the next bearish leg now that we’ve relieved over-extension and had a short relief rally.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: AMZN, MSFT, SLV, FCX, X, ZS, RIG, FL, ENPH, FDX, PINS, and CORN. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

US stocks followed the rest of the globe, gapping strongly higher at the open (2% in the QQQ, 1.6% in the SPY, and 1.33% in the DIA).  The bulls then proceeded to run us up the first 30 minutes, following through strongly on the gap.  This leveled off into a sideways grind in a tight range as the bulls caught their breath from 10 am to 12:45 pm.  At that point, the bears took us lower for half an hour before the bulls stepped in to slowly rally back close at new highs in the large-cap indices.  (The QQQ sold off more heavily and recovered more slowly.  So, it did not reach the late morning highs again.)  This action is leaving us with gap-up, large white candles (with an upper wick in the QQQ).  And, as mentioned in the morning blog, all 3 major indices are now well above their T-lines (8ema).

On the day, all 10 sectors were green with seven of them being up at least 3%. Cons. Defensive (+1.90%) was the laggard and Consumer Cyclical (+4.30%) led the pack higher.  The SPY was up 3.05%, the DIA up 2.83%, and the QQQ up 3.14%.  VXX was down about 3.77% to 19.39 and T2122 is now well into the overbought territory at 90.08.  These moves came on slightly higher than expected volume.  Meanwhile, 10-year bond yields have climbed back from early losses but are still down to 3.631% and Oil (WTI) has spiked another 3.12% to $86.24/barrel (as markets seem to anticipate major production cuts by OPEC+ on Wednesday).  All-in-all, a very bullish day and perhaps near the end of a relief rally as we now approach the downtrend line.

In economic news, August Factory Orders same in dead flat (0.0%), which was below forecast (+0.2%) but also well above the July reading of -1.0%.  However, the most telling number of the day is that August Job Openings (JOLTs) were down a whopping 1.12 million over the July number (10.053 million vs July’s 11.170 million) as well as being far below forecast (10.775 million).  Taken together, these economic indicators seem to be telling us the US economy is cooling fast, which potentially could be read by traders as a reason for the Fed to lighten up soon.  After the close, API Weekly Crude Oil Stocks reported an unexpected drawdown of 1.770 million barrels (versus a forecast build of 1.966 million barrels and the prior week’s build of 4.150 million barrels).

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In Fed news, the FOMC members tried to talk markets out of believing they will pivot soon. NY Fed President Williams reiterated that the Fed’s fight with inflation is not done and it will take some time to decelerate the conditions causing inflation.  Meanwhile, new Fed Governor Jefferson also spoke to a conference in Atlanta, saying “Inflation is still the most serious problem facing the Fed and it may take some time to address.”  He went on to reiterate that the Fed is resolute on bringing inflation back down to 2%.  Finally, San Francisco Fed President Daly said “there’s a lot of room to slow the labor market before we get into severe recessionary conditions.”  She added her prediction that unemployment will reach the 4.5% range and not the high levels some project.  However, again she reiterated that the Fed needs to do further rate hikes to bring down inflation.

In stock news, during the day, an SEC filing indicated that Elon Musk has abandoned his attempt to back out of buying TWTR and is prepared to proceed under the original terms of the buyout deal.  TWTR traded in a 23% range on the day, closing up 22.24%, which is oddly still $2.20/share less than the agreed per share price of the deal.  In other stock news, HAS cut its full-year revenue forecast.  This falls in line with WMT and TGT having announced plans to drastically reduce inventory (those 2 companies account for one-third of HAS sales).  Elsewhere, the New York Times reported that AMZN has sent an internal announcement of a corporate hiring freeze for the rest of the year in its retail/e-tail business (as opposed to cloud IT services).  The Wall Street Journal also reported that META is working to reduce its office space by letting some existing leases expire and consolidating multiple buildings into one.  This comes as META is hiring fewer employees and adopting a hybrid (office/work-from-home) policy.  On the brighter side, F reported strong demand for new vehicles in September although it also reported actual sales for the month were down slightly due to supply shortages.

In miscellaneous news, US Army Corps of Engineers reports that low water levels in the Mississippi River are causing a major shortage of transport in the center of the country.  1,600 barges are waiting for USACE dredging to make the lower Mississippi passable as the river has essentially been closed since last week.  The lack of those barges will be a real problem for agriculture, chemical, and other industries.  For example, 60% of US grain exports travel that river and exit the country via Gulf ports.  This could have a major impact on ADM, CAG, and BG among others. Meanwhile, the EU is set to approve PM purchasing a Swedish competitor of the spinoff MO.  Swedish Match is a large player in European cigarette alternatives.  Finally, US weekly mortgage demand plummeted last week as the average 30-year fixed-rate mortgage rose to 6.75% (from 6.52%) and hurricane Ian killed demand.  The number of applications to refinance loans fell 18% and new home purchase loan applications fell 13% for an overall decline of 14.2%.

So far this morning, AONNY, HELE, and RPM have all reported beats on both the revenue and earnings lines.  LW is scheduled to report at 8:30 am.

Overnight, Asian markets were mostly (and in some cases very strongly) green.  Hong Kong (+5.90%) was a clear outlier. Meanwhile, India (+2.29%), Australia (+1.74%), and Taiwan (+1.66%) led the gainers.  Only the mainland Chinese exchanges, Shenzhen (-1.29%) and Shanghai (-0.55%), were red on the day.  In Europe, we see a completely different story, with red across the board at midday.  The FTSE (-1.01%), DAX (-0.75%), and CAC (-0.62%) lead the region lower on volume.  However, most of the smaller exchanges have made bigger moves in early afternoon trade.  This comes as doubt of a central bank pivot sets in among traders.  (For what it is worth UK PM Truss also made another blunder in telling her party conference she is undecided whether to raise government benefits to offset inflation. That may be true, but while there are ongoing protests over “cost of living” in the streets, the optics are just abysmal.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.70% open, the SPY is implying a -0.68% open, and the QQQ implies a -0.65% open at this hour.  10-year bond yields are up again to 3.683% and Oil (WTI) is up another half of a percent to $86.96/barrel in early trading.

The major economic news events scheduled for Wednesday include OPEC+ decision on production cuts (tba), Sept. ADP Nonfarm Employment Change (8:15 am), August Imports/Exports and August Trade Balance (all at 8:30 am), Sept. Services PMI (9:45 am), Sept. ISM Non-Mfg. PMI (10 am), and EIA Weekly Crude Oil Inventories (10:30 am).  We also have another Fed speaker (Bostic at 4 pm).  The major earnings reports scheduled for the day is limited to HELE, LW, and RPM before the open.

In economic news later this week, on Thursday, the Weekly Initial Jobless Claims are reported.  Finally, on Friday, Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate are reported.

In earnings reports later this week, on Thursday, we hear from CAG, STZ, MKC, and LEVI.  Finally, on Friday, there are no major earnings reports scheduled.

With this backdrop, we see that it appears the Fed members have talked us off the hopium (of a Fed easing) that markets had been smoking. All 3 major indices are above their T-lines, but it looks like we are headed back in that direction for a retest. The strong bear trend remains in place and is the indication we should heed. That line more-or-less coincides with a potential support level from a line across the tops starting on 9/23. Continue to expect volatility and watch for the next bearish leg now that we’ve relieved over-extension.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SSYS, BBIG, RIG, TSM, VLO, WMT, COST, PINS, ORCL, XOM, FDX, and MSFT. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Markets gapped significantly higher on Monday (+1.12 in SPY, +1.20% in the DIA, and +0.75% in the QQQ).  Then the bulls took a few minutes to gather themselves before following through in the morning, grinding sideways in the midday, and then strongly rallying from 1 pm to 3 pm.  Finally, the three major indices all took profits in the last 30 minutes of the day.  This action left us with gap-up, big white candles with significant upper and lower wicks.  The large-cap indices also both retested their T-lines (8ema) and the QQQ got close. 

On the day, all 10 sectors were well into the green.  Consumer Cyclical (+1.66%) and Consumer Defensive (+1.95%) were the lagging sectors.  Meanwhile, Energy (+5.50%) and Basic Materials (+4.04%) led the rebound.  At the same time, the SPY gained 2.62%, the DIA gained 2.61%, and the QQQ gained 2.35%.  The VXX fell 5% to 20.15 and T2122 jumped back up into the mid-range at 52. 10-year bond yields fell to 3.65% and Oil (WTI) spiked 4.69% to 83.22/barrel.  So, the strong bearish trend remains in place, but at a minimum, the over-extension was resolved in just one candle.

In economic news, the September Mfg. PMI came in slightly stronger than expected at 52.0 (versus a 51.8 forecast and a 51.5 reading in August).  However, the September ISM Mfg. PMI came in below forecast at 50.9 versus a 52.2 expected and a 52.8 number in August.  Also, later in the day, NY Fed Pres. Williams said that while there have been a few nascent signs of cooling inflation, the Fed must press forward with its tightening policy to really get inflation under control.  He specifically said that some commodity prices are falling, but that is not enough.  He went on to say goods demand remains very high and both labor and services demand is still outstripping the available supply.  These are all conditions the Fed must force to reverse to get inflation under control in the longer run.  Along those lines, Williams said, “I see inflation moving close to our 2% goal in the next few years.” (Meaning this will be a long tightening cycle.)

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In stock news, CS was the news of the day trading wildly.  It was down 11% in the premarket, opened down just 1%, and then sold off 6% before reversing and raying 9%.  It closed the day up 2.3%.  Elsewhere, AAPL lost its second bid to challenge patents held by QCOM after the Supreme Court declined to hear an AAPL appeal.  This leaves AAPL on the hook for violation of 3 QCOM smartphone patents as had been ruled by lower courts in 2017-2019.   A multi-billion-dollar settlement had already been reached, between the companies, but now that AAPL’s appeal has failed, it will need to renew licenses for those patents from QCOM as soon as 2025.  Meanwhile, RIVN announced it had produced 7,363 vehicles in Q3 (a 67% increase from Q2) and reiterated it still expects to make 25,000 for the full year.  However, not all RIVN news was good after a County judge in Georgia blocked proposed state and county incentives for RIVN to build a $5 billion manufacturing plant in that area.  The ruling found the plan did not appear feasible and it failed to promote the public welfare of local communities.

In other overnight AAPL news, the EU has passed regulations that will force AAPL to violate its longstanding policy of not conforming to industry standards.  The new law would force all mobile devices (phones, tablets, and cameras) to use standard charging ports meaning they can all use the same chargers.  In other AAPL news, Foxconn (the main iPhone manufacturer) said that they are “cautiously optimistic” about Q4 sales and production. This flies in contrast to last week’s announcement that AAPL had scrapped plans to increase production of iPhone 14s.

Also overnight, the Reserve Bank of Australia has sparked global speculation that central banks are about to pivot away from tightening by easing their rate hikes.  The bank raised its rates by only a quarter of a percent (versus the widely expected half of a percent hike).  It seems global traders are adding this to NY Fed President Williams Monday statement that tighter monetary policy has BEGUN to cool demand and reduce inflationary pressures…and lurched to the conclusion a pivot is near at hand. This could be a leading factor in the global rally we are seeing today. (Be extremely careful buying into a market reversal on such thin logic.)

Overnight, Asian markets were mixed but mostly green.  Australia (+3.75%), Japan (+2.96%), and South Korea (+2.50%) led the gainers.  Meanwhile, Shenzhen (-1.29%), Hong Kong (-0.83%), and Shanghai (-0.55%) were the only red in the region.  At the same time, in Europe, we see green across the board at midday.  The FTSE (+1.86%), DAX (+2.95%), and CAC (+3.28%) are leading a charge higher in early afternoon trading.  Even Russia (+0.01%) has managed green so far today.  As of 7:30 am, US Futures are pointing toward a strong gap higher to start the day.  The DIA implies a +1.31% open, the SPY is implying a +1.61% open, and the QQQ implies a +2.04% open at this hour.  10-year bond yields are falling again to 3.589% and Oil (WTI) is up another half of a percent to $84.06/barrel.

The major economic news events scheduled for Tuesday, include August Factory Orders, August JOLTs, and API Weekly Crude Oil Stocks.  However, again we have three Fed speakers (Williams at 9 am, Mester at 9:15 am, and Daly at 1 pm).  The major earnings reports scheduled for the day is limited to AYI before the open.

In economic news later this week, on Wednesday, we get the Sept. ADP Nonfarm Employment Change, August Imports/Exports, August Trade Balance, Sept. Services PMI, Sept. ISM Non-Mfg. PMI, and EIA Weekly Crude Oil Inventories as well as an OPEC+ decision on production cuts.  Then Thursday, the Weekly Initial Jobless Claims are reported.  Finally, on Friday, Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate are reported.

In earnings reports later this week, on Then on Wednesday, HELE, LW, RPM report.  Thursday, we hear from CAG, STZ, MKC, and LEVI.  Finally, on Friday, there are no major earnings reports scheduled.

With this backdrop, we see all 3 major indices looking to gap up above their T-lines. However, the strong bear trend remains in place and has not yet been challenged. It is important to note that we appear to be opening back in the September 23 gap, but there is still a lot of resistance above to work through. Expect more volatility and even though everything looks bearish early, do not forget that we still need over-extension relief.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: AMZN, HD, META, LVS, NEM, GIS, MPC, and VLO. 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.

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

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

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

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

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

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

Hit and Run Candlesticks / Road To Wealth Youtube videos

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

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

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

Stocks gapped down very modestly (0.25% – 0.35%) Friday and followed through for 5 minutes.  However, then volatility stepped in to rally us to the highs of the day by 11:15 am.  At that point, the market reversed again as the bears led a selloff the rest of the day.  This took us to a series of new lows at about 2:30 pm and took us out on the lows.  This action has left us with black-bodied, indecisive, inverted hammer-type candles in all 3 major indices.  It is also worth noting that all 3 indices are again getting extended from their T-lines.

On the day, 9 of 10 sectors are in the green with Basic Materials (+0.15%) as the only sector able to hold onto a gain and Consumer Cyclical (-1.63%) leading the charge lower.  At the same time, SPY was down 1.55%, DIA was down 1.70%, and QQQ was down 1.70%.  The VXX gained almost 3% to 21.21 and T2122 has actually risen to 5.06 (which is still deep in the oversold territory).  10-year bond yields are down, but way up off the early morning lows to 3.821%, and Oil (WTI) is down almost 2% to $79.61/barrel.  Overall, it was a very volatile and bearish day.

So, with inflation high and the Fed on a super-sized hike cycle (while saying they are not going to let up until inflation is clearly headed to 2%), Mr. Market is not a happy camper.  That brought us to the end of a rough week, a brutal month, and a tough quarter.  On the week, SPY lost 2.93%, DIA lost 2.89%, and QQQ lost 2.99%.  For the month, SPY lost 9.62%, DIA lost 8.98%, and QQQ lost 10.70%.  For the quarter, SPY lost 5.32%, DIA lost 6.67%, and QQQ lost 4.65%.

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In economic news, the August Month-on-Month PCE Price Index came in at +4.9%, which was above the +4.7% forecast (and the previous reading of 4.7%).  In addition, the August Mon-on-Month Personal Spending was up +0.4% (compared to a +0.2% forecast and previous reading of -0.2%).  (It is worth noting that core PCE is the Fed’s favorite gauge of inflation and what its 2% target is set against.)  Meanwhile, August Year-on-Year PCE Price Index came in a +6.2%, which was better than the previous reading of +6.4%.  Then the Chicago PMI came in at 45.7 (versus a 51.8 forecast) and Michigan Consumer Sentiment came in at 58.6 (versus a 59.5 forecast and a previous reading of 59.5).  So, that information tells us inflation is up, business is contracting, and the general public is pessimistic.

Speaking of the Fed, Vice Chair Brainard added her full endorsement of the current “higher rates for longer” approach the Fed is undertaking.  She went on to say “Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back toward the target.”  Earlier, Richmond Fed President Barkin had said there were some promising signs of inflation progress.  However, he said that “festering inflation” remains a bigger threat to the economy than us (the Fed) over-correcting.”  Earlier, Fed Governor Bowman (a Republican) suggested averaging bank stress tests to determine bank capital requirements (as opposed to setting them every time they are tested).  Her generally suggested approach was toward lighter regulation of banks.  This stands in stark contrast to Fed Bank Supervisor Barr (Democrat), who has called for more scrutiny of bank risk-taking given the history of financial crises that banks have led the economy into in the past.

In stock news, on Friday, UAL announced it will cancel service from JFK airport as of October because the FAA will not give them additional flights out of that airport.  (UAL had only resumed service from JFK in 2021.)  Meanwhile, EU regulators announced they would publish a decision on whether to allow (or what mandated stipulations must be met to allow) the MSFT acquisition of ATVI by November 8.  Elsewhere, after hours, SWK announced it is cutting 1,000 finance jobs.  (It makes you wonder either who will do the books…or why they had so many since they only have 71,000 total employees.)  On Sunday, TSLA reported that it delivered 343k new vehicles in Q3 which was about 20k fewer vehicles than analysts had been expecting.  However, it was also a 35% increase over Q3 2021. TSLA blamed employee turnover in management positions (after Musk’s “work at least 40 hours per week in the office” decree) and logistics snarls for the shortfall.

After the close, NKE reported beating on both the revenue and earnings lines.  However, MU missed on revenue while beating on earnings.  MU also lowered its forward guidance.  It is also worth noting that despite beating on both lines, NKE reported that they have way too much inventory (44% globally and 65% too much in North America) across multiple seasons of apparel) due to severe supply chain problems. The company said it will be forced to aggressively discount in order to liquidate the excess inventory. Later this morning, CCL reports (9:15 am).

Overnight, Asian markets were mostly in the red.   Japan (+1.07%) was a clear outlier to the upside with only one other exchange managing any green.  However, Thailand (-1.98%), Shenzhen (-1.29%), and India (-1.21%) led the region lower.  Meanwhile, in Europe, we see a similar story taking shape at midday.  Russia (+3.43%), Norway (+1.34%), and Portugal (+0.96%) are the only green to be found on the continent.  At the same time, the FTSE (-0.56%), DAX (-0.59%), and CAC (-0.88%) are leading the region lower in early afternoon trade.  As of 7:15 am, US Futures are pointing toward a mixed start to the day.  The DIA implies a +0.57% open, the SPY is implying a +0.42% open, and the QQQ implies a +0.04% open at this hour.  At the same time, 10-year bond yields are down to 3.75% and Oil (WTI) is up 4.26% to $82.88/barrel in early trading.

The major economic news events scheduled for Monday is limited to September Mfg. PMI (9:45 am) and Sept. ISM Mfg. PMI (10 am).  There are no major earnings reports scheduled for the day.

In economic news later this week, on Tuesday, we get August Factory Orders, August JOLTs, and API Weekly Crude Oil Stocks.  Then Wednesday, the Sept. ADP Nonfarm Employment Change, August Imports/Exports, August Trade Balance, Sept. Services PMI, Sept. ISM Non-Mfg. PMI, and EIA Weekly Crude Oil Inventories are reported.  Thursday, we get the Weekly Initial Jobless Claims.  Finally, on Friday, Sept. Avg. Hourly Earnings, Sept. Payrolls, Sept. Participation Rate, and Sept. Unemployment Rate are reported.

In earnings reports later this week, on Tuesday we hear from AYI.  Then on Wednesday, HELE, LW, and RPM report.  Thursday, we hear from CAG, STZ, MKC, and LEVI.  Finally, on Friday, there are no major earnings reports scheduled.

In late-breaking news from across the pond, the new government of UK PM Truss has scrapped its radical shift to large-scale tax cuts for top-end tax rates and “trickle down” economics. It seems the new PM (who even on Sunday had said she was absolutely committed to her plan) was told to drop it or get out by her fellow Torry party ministers amidst a public backlash, cost of living protests, and market rejection of the plan. The British pound briefly jumped on that news. Elsewhere, Reuters reports that CS is in bad financial health and is seeking to raise capital saw the stock drop 10% at one point during the premarket. Finally, Oil (WTI and Brent) is challenging its downtrend with a major gap this morning. This seems to be driven by rumors coming out of OPEC+ that point to the group announcing major production cuts at their Wednesday meeting.

With this backdrop, and as we start the fourth quarter, markets seem headed toward an inside candle at the open in the large-cap indices and a slight continuation of the down move in the tech-heavy QQQ. Once again, this is not showing a major change in sentiment. The trend remains strongly bearish across the market, but last week’s volatile chop may be continuing. Expect more volatility and even though everything looks bearish early, do not forget that we still need over-extension relief.

Keep in mind that trading is our job. It’s not a hobby. So, treat it that way. Do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: OXY, VLO, MPC, META, NFLX, BE, EGO, JBHT, TWTR. 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.

🎯 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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