Markets opened flat on Friday.  At that point, we saw a wave of volatility until 11:30 am.  This was volatility to the upside on the SPY and QQQ and to the downside on the DIA. Then the 3 major indices got into lock-step and steadily rallied in the afternoon until we saw a small pullback at 3 pm. However, the day ended on a run back up near the high of the day.  The QQQ broke out of its “W pattern” resistance level during the day.  This action gave us white-bodied candles with wicks at both ends in the SPY and QQQ.  At the same time, the DIA printed a Dragonfly Doji candle. 

On the day, eight of the ten sectors were in the green with the Consumer Cyclical sector (+2.95%) leading the way higher while the Utility sector (-0.97%) lagged behind.  Meanwhile, the SPY gained 0.97%, the DIA gained 0.16%, and the QQQ gained 1.84%. The VXX was down 1.34% to 16.98 and T2122 remained deep in the overbought territory at 96.26.  10-year bond yields remained lower at 3.811% and Oil (WTI) spiked 2.76% to $88.86 per barrel.  So, all-in-all, Friday saw modest follow-through to Thursday’s CPI rally everywhere other than the DIA where we got a pause.

In miscellaneous news, Friday evening, Reuters reported that EL was close to a deal to buy luxury brand Tom Ford for $2.8 billion and details may be announced as soon as today.  On Sunday, TSLA said it will assist Chinese police in investigating another fatal crash (2 dead, 3 injured) of a Model Y car on November 5.  TSLA has faced claims of brake failure in the past in China and a witness to this crash (a family member of the driver) said the driver was having problems with the brake pedal, but video of the crash showed no brake lights.  In various buyback announcements, ASML authorized $12.43 billion in additional buybacks, PSX approved a $5 billion increase in its buyback plan, TMO authorized $4 billion in buybacks, and STLD added another $1.5 billion to its existing share buyback plans.

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In cryptocurrency news, the crypto world continued to be rocked by the implosion (and Friday bankruptcy) of crypto exchange FTX.  Over the weekend, it was reported that, in addition to the company’s financial woes, FTX was hacked with over $400 million in coins missing.  Even more troubling, recently FTX’s former CEO (Sam Bankman-Fried) moved $10 billion of customer funds from the FTX exchange to his own trading company (Alameda Research). From there, as much as $1.7 billion has gone “missing” in the last couple of weeks.  Meanwhile, in the same space, Crypto.com says it has now recovered $400 million of Ether coins days after that money had been “misplaced” when Crypto.com mistakenly sent 320k Ether coins to a cold wallet owned by Gate.io.  All of this turmoil has caused billions of dollars of withdrawals from crypto exchanges and untold loss of capital in the panic selling of the last week.  This has led many leading analysts in the crypto world to call for strong government regulation to re-establish trust before the entire crypto space implodes.

In energy news, Natural Gas prices plunged (5.5%) Friday as traders were trying to figure out how to interpret a blizzard of tweets that have since been called false and disinformation by the target of the tweets.  Essentially, the original tweet said that the major natural gas terminal (Freeport LNG) would remain offline for at least months due to “cracked pipes” that resulted from a fire back in June.  (Markets had been counting on this major terminal coming back online to reduce inventory.)  If true, this would mean that US export of natural gas would be severely curtailed and US inventories of natural gas would skyrocket, lowering US prices for months.  However, Freeport has now said that tweet was false, the information did not come from them (even though the original tweet was made to look like a company announcement). Meanwhile, in Congress, Coal-backed Senator Manchin has now said he does not intend to hold a re-confirmation hearing for President Biden’s Energy Secretary. This is his petty response to Biden calling for the “end of dirty energy” in the last ten days prior to last week’s election.  Nonetheless, it could leave the Energy Dept. without a head for the foreseeable future.

In dividend news, these were the largest dividend increases for last week.  ADP hiked its dividend by 20.2% to $1.25/share ($5 annualized) to be paid on January 1 for the holders of record on December 8.  MAR raised its dividend by 33.3% to $0.40 ($1.60 annualized) per share payable December 30 for holders as of November 22.  AAON hiked its semi-regular dividend by 26% to $0.24 ($0.48 annualized) payable December 16 for holders of record on November 28.  PFSW declared a special $4.50 dividend payable on December 15 for holders as of November 30.  ROP bumped its dividend by 10.1% to $0.6825 per share ($2.73 annualized) payable Jan. 23 for owners as of January 6.

So far this morning, MT, BAM, AZN, USFD, RWEOY, BDX, NIO, DDS, TDG, KELYA, SBH, SLVM, and NICE all posted beats on both the revenue and earnings lines.  At the same time, AEG, WRK, TPR, EPC, and EYE all missed on revenue while beating on the earnings line.  On the other side, PRMW beat on revenue while missing on earnings.  Unfortunately, WE and SIX missed on both the top and bottom lines.  It is worth noting that USFD and PRMW raised their forward guidance.  However, BDX, NIO, TPR, SBH, WE, and YETI all lowered their forward guidance.

Overnight, Asian markets were mixed.  Hong Kong (+1.70%), Taiwan (+1.19%), and Singapore (+1.01%) were the gainers.  Meanwhile, Japan (-1.065) Thailand (-0.85%), and South Korea (-0.34%) paced the rest of the region lower into losses.  In Europe, we see a similarly mixed picture at midday.  The FTSE (+0.26%), DAX (+0.37%), and CAC (+0.27%) are leading the region modestly higher, while 4-5 smaller exchanges are showing red in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a down start to the day.  The DIA implies a -0.24% open, the SPY is implying a -0.38% open, and the QQQ implies a -0.62% open at this hour.  10-year bond yields are rising again at 3.899% and Oil (WTI) is off 1.34$ to $87.77/barrel in early trading.

There are no major economic news events scheduled for Monday.  However, there are two Fed speakers scheduled (Brainard at 11:30 am and Williams at 6:30 pm). The major earnings reports scheduled for the day are QFIN, ACM, XRAY, and VNTR before the open. Then, after the close, NU reports.   

In economic news later this week, on Tuesday, we get October PPI, NY Empire State Mfg. Index, and API Weekly Crude Oil Stocks report. Then Wednesday, October Retail Sales, October Import/Export Price Indexes, October Industrial Production, September Business Inventories, EIA Weekly Crude Oil Inventories, and a Fed speaker (Williams) report. On Thursday, we get October Building Permits, October Housing Starts, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index.  Finally, on Friday, October Existing Home Sales are reported.

In earnings reports later this week, on Tuesday we hear from ARMK, BERY, ENR, AQUA, HD, SE, TME, VVV, WMT, AAP, and GSM.  Wednesday, ARCO, LOW, TGT, TCEHY, TJX, ZIM, BBWI, CSCO, CPA, HP, HI, NVDA, and SONO report.  Then on Thursday, we hear from BABA, BJ, BV, DOLE, KSS, M, NTES, WB, AMAT, FTCH, GPS, KEYS, PANW, POST, ROST, WSM, and WWD report.  Finally, on Friday, we hear from FL, JD, and SPB.

Over the weekend, it became clear that Democrats will retain control of the Senate, with a chance to expand their margin depending on the December Georgia runoff. In addition, control of the House still remains up in the air. (The expected “red wave” we were supposed to see last week, simply wasn’t a wave at all and while it looks more likely the GOP will control the House, it will be by razor-thin margins at best with 10 more races not decided.) Also, as mentioned above, the cryptocurrency implosion (and massive volatility) also became more clear, with allegations that the CEO of FTX had moved and used $10 billion in customer funds to his own trading company prior to the Friday default. (Criminal investigations are now ensuing.) Then, overnight at the G20 summit, President Biden met with Chinese President Xi in a bid to cool tensions between the two largest economies in the world. In not unrelated news, China announced a 16-point plan to boost its real estate sector on Monday.

With that background, premarkets now look modestly red and are very extended (especially the QQQ). So, do some serious thinking before you chase any bullish moves. We know that price moves in a lightning bolt, zig-zag pattern. And, once again, at the moment, our zig is sorely in need of a zag if this is going to be a sustained move higher. Finally, remember that we get another read on the US consumer this week as the big retail names all report. Markets may wait on that news and give outsized importance to individual retail reports this week. So, beware of volatility.

So, continue to be deliberate and disciplined…but don’t be stubborn. Remember it’s 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! And there is absolutely no reason to keep raising your bet (risk) just because you’ve had a win. Finally, keep in mind that trading is not a hobby. It’s a job. The money is real. So, you have to treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: VZ, PFE, FDX, INTC, ANET, NFLX, PLUG, PM. 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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

After a pleasant surprise, stocks ripped higher in the pre-market and gapped massively higher at the open.  (SPY gapped up 3.75%, DIA gapped up 2.75%, and QQQ gapped up 4.95%.)  At that point, we saw a sideways rollercoaster that led to gains of another 0.3% (DIA) to 1.1% (QQQ) by noon.  From that point, stocks sold off modestly for an hour and recovered for another hour, bringing us back to the highs of the day at about 2 pm.  At that point we saw another wave higher the rest of the afternoon.  This action gave us a huge gap-up, followed by strong white candles with lower wicks in the DIA, SPY, and QQQ.  All three indices are now extended well above their T-line (8ema) and the SPY and DIA have broken out of their recent high resistance level.  DIA is also testing its long-term downtrend line (going back to the start of the year).  Meanwhile, the QQQ is testing its 50sma. 

On the day, all ten sectors were in the green with Technology (up a whopping +8.42%) and Consumer Cyclical (+7.06%) leading the way higher while the Energy sector (+2.22%) “lagged” behind.  Meanwhile, the SPY gained 5.49%, DIA gained 3.66%, and QQQ gained 7.31%.  The VXX was down 5.49% to 17.21 and T2122 spiked back up deep into the overbought territory at 97.69.  10-year bond yields continue to be very volatile and plunged back down to 3.824% and Oil (WTI) went up 0.56% to $86.31 per barrel.  So, all-in-all, Thursday was all about the huge gap with a modest morning and then an even larger afternoon follow-through that took us out near the highs.

In economic news, as mentioned above, the October CPI gave us a great surprise by coming in at 7.7% (compared to a forecast of 8.0% and September’s reading of 8.2%).  That 0.5% month-on-month drop led traders to think that inflation is coming under control and the Fed may start easing up on its rate hikes.  As a result, pre-markets rocketed higher and the bulls never looked back.  The Weekly Initial Jobless Claims came in slightly worse than expected at 225k (compared to the forecast of 220k and last week’s reading of 218k).  That too reinforced the idea that the economy was now slowing and that should lead the Fed to ease up soon.  Finally, in the afternoon, the October Federal Budget Balance also came in better than expected at a $88 billion deficit (compared to the expected $90 billion deficit).

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In miscellaneous news, the US Dollar fell sharply on Thursday after the CPI data.  This gave the Japanese Yen its largest gain since 2008 while the British Pound had its best day since 1985.  Meanwhile, in China, the country’s normal annual surge in exports is now in doubt after it reported October exports fell unexpectedly due to falling global demand and covid lockdowns.  Back in the US, Fed speakers on Thursday seemed to embrace more gradual rate hikes at this point.  San Francisco Fed President Daly told a virtual conference that she “supports a more gradual approach.”  At the same time, Kansas City Fed President George said “A more measured approach to rate increases may be particularly useful…”  At a separate event, Philly Fed President Harker said he believes the Fed ought to pause once rates get above 4.6% and that the Fed can always start tightening again if needed, based on data.

In stock news, GOOGL’s Waymo announced it has opened up its autonomous taxi service in Phoenix AZ after months of test runs.   Meanwhile, AZN announced it has withdrawn its application for US approval of its Covid-19 vaccine. AZN cited declining demand that is already being served by existing shots. Elsewhere, AMD released new server market CPU products Thursday that analysts say are far faster, larger (many more cores and I/O lanes), and much more power efficient than rival INTC offerings.  In CEO news, BIIB announced that the former CEO of SNY will take over the reins as BIIB on November 14.  The CEO of KDP also resigned after a violation of the company code of conduct.  However, the CEO of AIG was given a 5-year contract extension after hours.  Finally, after hours, the state of CA sued MMM and DD (and other smaller companies) in an effort to recoup the costs of clean-up of toxic and cancer-causing substances known as “forever chemicals.”  The state is alleging the two firms marketed products containing these chemicals in the state for decades despite knowing their toxicity.

After the close, FLO, BZH, STN, and TOST reported beating on both the revenue and earnings lines.  Meanwhile, EDR missed on revenue while beating on earnings.  On the other side, COMP beat on revenue while missing on earnings.  It is worth noting that TOST raised its forward guidance.  However, COMP and EDR both lowered their forward guidance.

So far this morning, MT, BAM, AZN, USFD, RWEOY, BDX, NIO, DDS, TDG, KELYA, SBH, SLVM, and NICE all posted beats on both the revenue and earnings lines.  At the same time, AEG, WRK, TPR, EPC, and EYE all missed on revenue while beating on the earnings line.  On the other side, PRMW beat on revenue while missing on earnings.  Unfortunately, WE and SIX missed on both the top and bottom lines.  It is worth noting that USFD and PRMW raised their forward guidance.  However, BDX, NIO, TPR, SBH, WE, and YETI all lowered their forward guidance.

Overnight, Asian markets were strongly green across the board.  Following the cue from the US, Hong Kong (+7.74%), Taiwan (+3.73%), and South Korea (+3.37%) led the region higher.  In Europe, we see a more mixed picture, but still leaning toward the upside at midday.  The FTSE (-0.47%), DAX (+0.38%), and CAC (+0.27%) are leading a region that is mixed and showing modest moves in early afternoon trade.  Denmark (-1.24%) is an outlier in the region.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.35% open, the SPY is implying a +0.35% open, and the QQQ implies a +0.39% open at this hour.  10-year bond yields are down again to 3.811% and Oil (WTI) is spiking more than 3% to $89.21/barrel in early trading.

The major economic news events scheduled for Friday is limited to Michigan Cons. Sentiment (10 am).  The major earnings reports scheduled for the day are limited to AQN before the open.  There are no major earnings reports scheduled for after the close.     

So far this morning, AQN beat on the revenue line while missing on the earnings line.  However, DDL had massive misses on both the top and bottom lines.  It is worth noting that AQN also lowered their forward guidance.

After a massive rally on Thursday, US markets (both stock and bonds) seem to have declared victory over the inflation enemy and will now EXPECT the Fed to act accordingly. This just means the risk has shifted to the downside, where Fed words (and especially the December meeting) could crush those raised expectations of the bulls. Be careful buying into that line of thinking. Yes, inflation came down half of a percent, but it’s still at 7.7% and that is a far cry from the Fed’s 2% target. Even more salient is the fact that this is a single data point. All of the Fed members have been talking about tightening and staying tight until inflation has shown clear evidence of SUSTAINED progress toward the target. I’m just a country boy, but to me, one data point does not equal sustained. Either way, all we can do is focus on what the market actually does, not on what we expect the Fed will/should do.

With that background, premarkets look green, but we are very extended and coming into resistance areas in the DIA and QQQ. So, think long and hard about chasing and if you decide to do so, stop and think again. We know that price moves in a lightning bolt, zig-zag pattern. And at the moment, our zig is sorely in need of a zag if this is going to be a sustained move higher. This is born out in the distance from the T-line and the extension in the T2122 indicator. Also remember that control of the House and Senate are still up in the air. While it is a very high probability that the GOP will take the House, we will not know about the Senate for another month due to the GA runoff.

So, continue to be deliberate and disciplined…but don’t be stubborn. Remember it’s 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! And there is absolutely no reason to keep raising your bet (risk) just because you’ve had a win. Finally, keep in mind that trading is not a hobby. It’s a job. The money is real. So, you have to treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!

See you in the trading room.

Ed

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

🎯 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 lower on Wednesday (0.50% in the SPY, 0.60% in the DIA, and 0.70% in the QQQ) at the open.  From there we saw a sideways roller coaster ride in all 3 major indices until noon.  At that point, the bears stepped in to lead a steady 45-degree selloff for the remainder of the day.  All three of the major indices closed very close to their lows for the day.  This action gave us big, ugly black candles that complete Evening Star-type patterns for the DIA, SPY, and QQQ.  (Not picture perfect, but show exactly the same sentiment change that an Evening Star shows.)  The DIA is sitting right at a retest of its T-line (8ema), while the SPY and QQQ gave up the T-line levels during the day.  Meanwhile, the SPY also fell back through its 50sma after having climbed above it just a day before.  Once again, only the DIA managed to reach their average volume for the day.

On the day, all ten sectors were in the red with Energy (-4.25%) leading the way lower and Utilities (-0.92%) holding up the best.  Meanwhile, the SPY lost 2.05%, DIA lost 1.92%, and QQQ lost 2.31%.  The VXX was up 3.11% to 18.21 and T2122 fell out of the overbought territory and back toward the bottom of the mid-range at 27.27. 10-year bond yields continue to be very volatile and fell back to 4.084% and Oil (WTI) plunged 3.72% to $85.60/barrel.  So, overall, it was a gap down and then fail to hold the level type of day.  Perhaps, most traders were waiting on today’s CPI print before making any serious moves.  However, traders continue to seek safety in the mega-cap DIA as it tries to hold the rest of the market up.

In economic news, early Wednesday morning (3 am), NY Fed President Williams told a Swiss audience that relatively stable longer-term inflation expectations are correct.  Still, he also expressed concern that some in the US are expecting short-term declines in price pressures, which is a bad expectation according to Williams.  Then at mid-morning, the EIA Weekly Crude Oil Inventories showed a 3.925-million-barrel build of inventory (three times the size of the expected build of 1.360 million barrels).  Later in the day, the WASDE report increased both US corn and soybean production forecasts (corn was raised by 35 million bushels, and beans were raised by 33 million bushels).  However, the US corn crop is still expected to be at a three-year low.

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In stock news, MSFT faces a new European antitrust complaint from technology trade group CISPE over its cloud computing (Azure) practices.  In related news, EU antitrust regulators are now drawing up charges against META over its use of customer data.  If META loses the case, the EU would impose fines of up to 10% of the company’s global turnover  (but appeals would drag this case out for years).  Elsewhere, in another “do we really need this and is it safe” decision, ZOOM and TSLA announced they will be bringing video conferencing to TSLA vehicles.  On the legal front, a lawsuit filed in Seattle Wednesday claims that AAPL and AMZN have colluded to drive up iPhone and iPad prices, by allowing only 7 of the previous 600 resellers to stay on the AMZN platform.  (20% discounts used to be common on Amazon prior to the removal of the vast majority of AAPL product resellers.)  In addition, LLY was ordered to pay TEVA $176.5 million after losing a trial over patent infringement related to a migraine drug.  Meanwhile, COP announced it is cutting 1,100 jobs on Wednesday and expects to save up to $500 million (after taking charges for the separation costs).

In miscellaneous news, at the close on Wednesday, Binance backed out of its rescue buyout of peer exchange FTX.  This leaves the FTX exchange and its native token FTT on the brink of collapse. That fear spread all across the crypto space as Bitcoin dropped 13%, Ethereum plunged more than 15%, and BNB-USD plummeted over 16%.  On the supply chain front, railroad unions and companies have extended the strike deadline to December 4. The previously agreed cooling-off period was previously set to expire on November 19.  Finally, in China, the number of new Covid cases in Beijing jumped to the highest in five months this week.  Most alarming to the Health Ministry was that a large number of those were outside the city’s quarantine zone.  This raises the specter of even wider quarantines.

After the close, G, WYNN, JAZZ, ENS, ATO, TTEC, RNG, RXT, TTEK, CRGY, JXN, and RIVN all reported beats on both the revenue and earnings lines.  Meanwhile, CPNG, and RDFN both missed on revenue while beating on earnings.  On the other side, LNW beat on revenue while missing on earnings.  Unfortunately, STE, APP, VET, BGS, CANO, KGC, RBT, ADV, and NGL all missed on both the top and bottom lines.

So far this morning, MT, BAM, AZN, USFD, RWEOY, BDX, NIO, DDS, TDG, KELYA, SBH, SLVM, and NICE all posted beats on both the revenue and earnings lines.  At the same time, AEG, WRK, TPR, EPC, and EYE all missed on revenue while beating on the earnings line.  On the other side, PRMW beat on revenue while missing on earnings.  Unfortunately, WE and SIX missed on both the top and bottom lines.  It is worth noting that USFD and PRMW raised their forward guidance.  However, BDX, NIO, TPR, SBH, WE, and YETI all lowered their forward guidance.

Overnight, Asian markets were mostly down.  Singapore (+0.24%) and Malaysia (+0.252%) were the only green in the region.  Meanwhile, Hong Kong (-1.70%), Shenzhen (-1.33%), Taiwan (-0.99%), and Japan (-0.98%) led the rest of the area’s exchanges lower.  In Europe, stocks are slightly more mixed, but still lean to the red side at midday.  The FTSE (-0.03%), DAX (+0.04%), and CAC (-0.40%) lead the region on volume with Russia (+1.33%) being an outlier in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly higher start to the day. The DIA implies a +0.17% open, the SPY is implying a +0.27% open, and the QQQ implies a +0.50% open at this hour.  10-year bond yields are up slightly to 4.09% and Oil (WTI) is off four-tenths of a percent to $85.47/barrel in early trading.

The major economic news events scheduled for Thursday include October CPI and  Weekly Initial Jobless Claims (both at 8:30 am), and October Federal Budget Balance (2 pm).  We also hear from 4 Fed speakers (Waller at 2 am, Mester at 12:30 pm, George at 1:30 pm, and Williams at 6:35 pm).  The major earnings reports scheduled for the day include AZN, AZUL, BDX, BAM, CAE, CEPU, EPC, GBTG, KELYA, EYE, NICE, PRMW, RL, SBH, SIX, TPR, TDG, USFD, WRK, WE, and YPF before the open.  Then, after the close, BZH, COMP, EDR, FLO, ITUB, STN, and TOST report.     

In economic news later this week, on Friday, we get Michigan Consumer Sentiment.  In terms of Friday earnings reports, AQN reports before the open.

With crypto markets in mayhem (the FTX exchange may file for bankruptcy today), and control of Congress still an unknown (it looks like the GOP will win the House and the Dems may just barely hang on to the Senate with their VP tie-breaker, but neither is decided yet as races remain uncalled and/or in need of a runoff election), all eyes are on the October CPI data to come out at 8:30 am. The consensus is expecting an annual rate of 8.0%, which seems like a big ask to me since last month’s number was 8.2%. So, I think the risk is to the upside. If we do get a hotter-than-expected number, markets may shoot lower as traders realize that would likely mean the Fed needs to keep up its aggressive rate hikes. If the consensus number is hit (or even beaten), look for the bulls to run (under the expectation that would mean the Fed will ease up in December). In either case, we should know how the market will react well before the open.

With that background and before that data, it looks like the markets are set to open with a modestly green “inside day” type of price as of now. Extension is no issue at all, either from the T-line or in terms of the T2122 indicator. Bear in mind that divergence between the mega-cap DIA (which has been pulling markets higher pretty much single-handedly as of late) remains a very real factor as traders have been seeking the haven of the big, stodgy names. So, beware of the knee-jerk reaction to the CPI number as well as any surprises from election decisions or sore loser challenges in various “election denying” spots around the country. Those could cause a market blip. However, the key thing to keep in mind is that you are no The Amazing Carnac” and you can’t predict reversals. So, just follow the trend and manage your risk. Slow and steady wins the race.

Be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but 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 with a modest gap higher in the 3 major indices Tuesday (up 0.3% in the SPY and DIA and up 0.6% in the QQQ).  After immediately recrossing that gap the bulls stepped in to rally prices for 2 hours in all 3 of those indices.  Then we traded sideways in a VERY tight range for about 2 hours.  At 1:15 pm, we started a very strong selloff that crossed back down to the lows of the day and lasted until 2:30 pm.  At that point, markets reversed yet again and strongly rallied back across the morning gap and about three-quarters of the way back to the highs of the day, only for another selloff to take us back down the last 30 minutes.  This action gave us very indecisive Spinning Top candles in all 3 indices.  The body of these candles is right at the T-line (8ema) in the QQQ, just above the T-line in the SPY, and just above the breakout of the J-hook pattern in the DIA. 

It is worth noting that the DIA action happened on heavier than average volume, while the SPY and QQQ failed to reach their average volume levels.  On the day, nine of the ten sectors are in the green with only the Energy (-0.16%) in the red while the Basic Materials (+2.05%) sector was far out front and Technology (+0.81%) led the pack of sectors higher.  Meanwhile, SPY gained 0.52%, DIA gained 1.00%, and QQQ gained 0.71%.  The VXX is up 2.91% to 17.66 and T2122 has remained just in the overbought territory at 83.53.  10-year bond yields continue to be very volatile and fell back to 4.134% and Oil (WTI) was down 2.77% to $89.25/barrel.  So, overall, it was a very indecisive and whipsaw day punctuated by a strong morning rally, a mid-day drift, and then an afternoon selloff and rebound.  It’s also clear money was chasing the safety of the mega-cap DIA.

In economic / energy news, the EIA Short-Term Energy Outlook came out Tuesday.  It said the US Q4 and Q1 natural gas prices are expected to be a whopping 17% lower than the EIA had forecast in October.  This is based on a huge increase in natural gas storage as winter approaches.  The report also said it expects natural gas and coal-fueled electricity generation to fall in 2023 from 24% (2022) to 22% (2023).  Finally, the group expects Russian oil output to decrease 14% in 2023, down to 9.3 million barrels per day.  Elsewhere, after the close, the API Weekly Crude Oil Stocks report showed a large unexpected build in oil inventories.  The API report shows a build of 5.618 million barrels over the week compared to a forecast of a 1.100-million-barrel increase and last week’s 6.530-million-barrel drawdown.

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In stock news, GFI ended its bid to acquire AUY after a joint bid of $4.8 billion was made by AEM and PAAS.  (The GFI bid back on May 31 had been $6.7 billion, but that offer has declined to $4 billion as GFI stock declined since the end of Spring.)  Across the pond, STLA won its appeal of an EU order to pay $30 million in back taxes to Luxembourg.  This was a blow to EU rulings that are intended to stop sweetheart tax deals between EU countries and companies.  Meanwhile, Airbus announced that it delivered 60 jets in October, up from 55 in September.  This contrasts with BA, which delivered 35 jets in October down from 51 in September after a fuselage flaw caused delays in the production and delivery of 737 Max planes.  After the close, space company ASTR announced it is laying off 16% of its workforce as the faces rocket delays. Finally, META began laying off 11,000 employees at 6 am today.

In international news, there is an opposite side of the economic harm caused by Russia’s war of aggression in Ukraine.  The country of Georgia says it has received more than 100,000 Russian immigrants, most of which are college educated and many of whom brought significant money with them. As a result, Georgia anticipates its 2023 GDP will be close to 10% compared to pre-Russian-draft forecasts of 2.5% GSP growth.  (Of course, one assumes those people will return home someday.)  In China, the government has expanded a financing program aimed at shoring up troubled real estate developers amid that country’s growing loan defaults from that sector.  The plan will offer $34.5 billion of bond financing to private firms that are at risk of defaulting on loans.

After the close, SFM, AKAM, GO, AMC, MRC, JKHY, MASI, ARRY, NOG, GXO, OVV, NLOK, and VVX all reported beats on both the revenue and earnings lines. Meanwhile, OXY, DAR, and OSCR reported beats on revenue while missing on earnings.  On the other side, DOX, PRI, AMRK, and ANGI missed on revenue while beating on earnings.  Regrettably, DIS, NWS, NWSA, FNF, IAC, VSAT, and NVAX all missed on both the top and bottom lines.

So far this morning, PFGC, SPTN, ICL, CPRI, HGV, CLMT, NOMD, and CRBG all reported beats on both the top and bottom lines.  Meanwhile, GIB, HBI, BHG, WEN, and COHR all missed on revenue while beating on earnings.  Unfortunately, DHI, RCI, MIDD, WWW, and SEAS all missed on both the revenue and earnings lines.  It is worth noting that HBI, BHG, and WWW all also lowered their forward guidance.

Overnight, Asian markets were mixed.  Taiwan (+2.18%), South Korea (+1.06%), and Singapore (+0.63%) led the gains while Hong Kong (-.120%), Shenzhen (-0.79%), and Thailand (-0.62%) paced the losses.  In Europe, markets are leaning to the downside at midday.  The FTSE (-0.27%), DAX (-0.56%), and CAC (-0.35%) are typical of the early afternoon trade.  However, there are three small exchanges that are barely green and three smaller exchanges that are down more than one percent at this point.  As of 7:30 am, US Futures are pointing toward a down open as the market reacts to GOP gains in mid-term elections with cautious pessimism.  The DIA implies a -0.36% open, the SPY is implying a -0.31% open, and the QQQ implies a -0.32% open at this hour.  10-year bond yields are down slightly to 4.126% and Oil (WTI) is off 0.84% to $88.15/barrel in early trading.

The major economic news events scheduled for Wednesday, we get EIA Crude Oil Inventories (10:30 am), the WASDE Ag Report (noon), and another Fed speaker (Williams at 3 am).  The major earnings reports scheduled for the day include BHG, CLMT, CPRI, GIB, COHR, CRBG, DHI, GGB, HBI, HGV, ICL, LTH, MIDD, NOMD, PFGC, RBLX, RCI, SEAS, SWX, SPTN, TRP, TGNA, WEN, and WWW before the open.  Then, after the close, ADV, ATO, BGS, BRFS, CANO, CPNG, CRGY, ENS, FSM, G, JXN, JAZZ, KGC, LNW, MFC, RBT, NGL, RXT, RDFN, RNG, RIVN, STE, TTEK, TTEC, VET, and WYNN report. 

In economic news later this week, on Thursday, October CPI, Weekly Initial Jobless Claims, October Federal Budget Balance, and 2 Fed speakers (Mester at 1:30 pm and George at 2:30 pm) report.  Finally, on Friday, we get Michigan Consumer Sentiment.

It is a bit lighter week of earnings reports as, on Thursday, we hear from AZN, AZUL, BDX, BAM, CAE, CEPU, EPC, GBTG, KELYA, EYE, NICE, PRMW, RL, SBH, SIX, TPR, TDG, USFD, WRK, WE, YPF, BZH, COMP, EDR, FLO, ITUB, STN, and TOST.  Finally, on Friday, AQN reports.

As the mid-term results settle, it appears GOP gains were less than expected, picking up control of the House, but with the Senate likely to once again come down to a runoff race in GA. Meanwhile, in the crypto world, yesterday the exchange Binance saved its competitor FTX buy buying out that company to prevent its failure. This comes after several billions of dollars were withdrawn from FTX in 72 hours as its own coin crashed. Bitcoin fell 3% overnight on the reaction. At this point, all eyes move on from elections toward Thursday’s inflation number.

With that background, it looks like the markets are set to open with a down, but “inside day” type of price. At this point, extension from the T-line is not an issue and T2122 is just barely into the overbought territory. The divergence between the mega-cap DIA (which has been pulling markets higher pretty much single-handedly as of late and the other two indices is the elephant in the room. “How long can those few stodgy mega-caps hold up the entire market” is the question. With all this said, remember that the reality of the economy and the direction of the economy has not been changed one bit by the election. It is all about perception and reaction today. So, beware of the knee-jerk reaction as well as follow-on tremors if/when sore losers start challenging the legitimacy of elections in various spots around the country. The bottom line is that we should be cautious and sustained in our actions. Don’t jump “all in” and “all out.” Slow and steady wins the race.

Be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: TXG, VZ, XLP, BAC. 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 modestly higher (by 0.30% to 0.40% across the 3 major indices) at the open Monday.  Then from 9:30 am to 2 pm, the SPY and QQQ indices rode a roller coaster back and forth the across that gap.  Over that same span, the DIA rode its own roller-coaster with a modest bullish trend.  However, at 2 pm, all 3 indices started a bit stronger bullish trend.   These afternoon rallies have lasted to the highs of the day at 3:30 pm and closed near the highs.  This action gave us a white-bodied hammer or hanging man candles in the SPY and QQQ, while the DIA prints a large-bodied white candle with a smaller lower wick. The SPY and DIA are back above their T-line (8ema), but none are above the longer-term downtrend.  It’s also worth noting the DIA has greater than average volume and both the other major indices were below average.

On the day, nine of the ten sectors are in the green with only the Utilities (-1.64%) in the red while the Energy (+1.13%) and Technology (+1.20%) sectors led the market higher.  Meanwhile, SPY gained 0.96%, DIA gained 1.32%, and QQQ gained 1.10%.  The VXX is down 1.1% to 17.16 and T2122 has edged up into the overbought territory at 82.87.  10-year bond yields were very volatile again and spiked to 4.216% and Oil (WTI) was down 0.82% to $91.85/barrel.  So, overall, it was an indecisive morning in the market, followed by a bullish afternoon, with the mega-cap DIA leading the way all day long.

In stock news, OUST and VLDR announced they have reached a deal to merge.  The deal is expected to close in the first half of 2023.  Elsewhere, VillageMD (which is backed by WBA) announced it is buying Summit Health for $9 billion to expand its footprint in the healthcare business (to compete with AMZN which acquired ONEM in July, and CVS which is planning to buy Signify Health).  WBA will invest $3.5 billion to support the acquisition.  In other WBA news, the company cut its stake in ABC by $1.6 billion (10 million shares).  WBA owned almost 53 million shares of ABC as of August 2.  In legal news, it was announced Monday afternoon that the CFO of TSN (also the son of the CEO and great-grandson of the founder) was arrested Sunday for trespassing and public intoxication.  In Texas, LCID filed suit against the state for blocking it from selling direct to customers in the state (as opposed to having dealerships).  Meanwhile, HD workers in Philadelphia voted against forming a union the NRLB reported.  It was reported by Bloomberg that D is considering selling its multi-billion dollar, 50% stake in the Cove Point LNG facility located in MD.  The facility is run by BRKB (which has 25% ownership) and partly owned by BAM (25% stake). Finally, RIDE announced it is getting another $170 million in funding from Taiwan contract manufacturer Foxconn (which most notably makes iPhones for AAPL). Foxconn already owns a stake in RIDE and last summer bought the namesake RIDE plant in Lordstown Ohio.

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In miscellaneous news, the US Supreme Court conservative majority appeared to be inclined to challenge the regulatory power of the FTC and SEC on Monday (based on their questioning and statements during two hours of oral arguments in cases involving both agencies).  If they rule as the questioning made it appear, it will be easier for companies to appeal regulatory rulings of the Federal government.  Elsewhere, the UK is set to announce a major new deal with the US (after the COP27 Climate Summit) for the US to supply Britain with LNG.  Finally, Bloomberg reported after hours that US Consumer borrowing rose less than expected in September.  Total credit increased by $25 billion compared to August, but the average forecast was for a $30 billion increase.  This $25 included the smallest credit card borrowing increase in four months ($8.3 billion).  This falls in line with V and MA both saying that consumer spending had recently slowed.

After the close, IFF, ATVI, SANM, PTVE, WELL, CBT, LYFT, DOOR, FN, QGEN, PRIM, ACCO, PAM, CLOV, OSH, and ICUI all reported beats on both the revenue and earnings lines.  Meanwhile, FANG, BKD, and SEDG all beat on revenue while missing on earnings.  On the other side, ASTL, CENX, AEL, DIOD, TWI, and MTW all missed on revenue while beating on earnings.  Unfortunately, MOS, BHF, ARKO, VRM, TTWO, and BWXT all missed on both the top and bottom lines.  It is worth noting that SANM, TPVE, ASH, FN, QGEN, and OSH all raised their forward guidance.   However, IFF, WELL, CBT, JHX, LYFT, TTWO, and BWXT all lowered their forward guidance.

So far this morning, DD, BLDR, CNHI, GFS, CG, COTY, and IGT have all reported beats on both the top and bottom lines.  Meanwhile, PKI, NXST, ELAN, REYN, RPRX, HAIN, and CLVT have all missed on revenue while beating on earnings.  On the other side, CEG, AHCO, PLTK, CCO, and NFE all beat on revenue while missing on the earnings line.  Unfortunately, PRGO, DBD, TAC, PRTY, RCM, and VTNR missed on both the revenue and earnings lines.  It is worth noting that GFS and CCO raised their forward guidance while ELAN, PRGO, REYN, and RCM all lowered their own forward guidance.

Overnight, Asian markets were mostly green.  Shenzhen (-0.58%), Shanghai (-0.43%), and Hong Kong (-0.23%) were the only real red in the region.  Meanwhile, Japan (+1.25%), South Korea (+1.15%), and Taiwan (+0.94%) led the region higher.  In Europe, the board is more mixed on modest moves at midday.  The FTSE (-0.15%), DAX (+0.34%), and CAC (-0.05%) are typical of the region in early afternoon trade.  However, Copenhagen (+1.09%) is an outlier and larger mover.  As of 7:30 am, US Futures are pointing toward a green start to the morning.  The DIA implies a +0.29% open, the SPY is implying a +0.30% open, and the QQQ implies a +0.53% open at this hour.  10-year bond yields are up slightly to 4.22% and Oil (WTI) is down two-thirds of a percent to $91.17/barrel in early trading.

The major economic news events scheduled for Tuesday is limited to the EIA Short-Term Energy Outlook (noon). The major earnings reports scheduled for the day include AHCO, BLDR, CG, CLVT, CCO, CNHI, CEG, COTY, DBD, DD, SSP, ELAN, EXPD, GFS, IGT, LITE, NFE, NXST, PRTY, PKI, PRGO, RCM, RPRX, REYN, SCSC, SSRM, SGRY, TAC, and VTNR before the open.  Then, after the close, AMKR, AKAM, AMC, DOX, ANGI, DAR, FNF, GO, GXO, IAC, JKHY, MASI, MRC, NLOK, NVAX, OXY, OSCR, OVV, PRI, SFM, VSAT, and DIS report. 

In economic news later this week, on Wednesday, we get EIA Crude Oil Inventories, the WASDE Ag Report, and another Fed speaker (Williams at 3 am).  Then Thursday, October CPI, Weekly Initial Jobless Claims, October Federal Budget Balance, and 2 Fed speakers (Mester at 1:30 pm and George at 2:30 pm) report.  Finally, on Friday, we get Michigan Consumer Sentiment.

It is a bit lighter week of earnings reports as, on Wednesday, BHG, CLMT, CPRI, GIB, COHR, CRBG, DHI, GGB, HBI, HGV, ICL, LTH, MIDD, NOMD, PFGC, RBLX, RCI, SEAS, SWX, SPTN, TRP, TGNA, WEN, WWW, ADV, ATO, BGS, BRFS, CANO, CPNG, CRGY, ENS, FSM, G, JXN, JAZZ, KGC, LNW, MFC, RBT, NGL, RXT, RDFN, RNG, RIVN, STE, TTEK, TTEC, VET, and WYNN report.  On Thursday, we hear from AZN, AZUL, BDX, BAM, CAE, CEPU, EPC, GBTG, KELYA, EYE, NICE, PRMW, RL, SBH, SIX, TPR, TDG, USFD, WRK, WE, YPF, BZH, COMP, EDR, FLO, ITUB, STN, and TOST.  Finally, on Friday, AQN reports.

All eyes are on the US mid-term elections today. However, crypto markets are all tumbling overnight as major crypto exchange Binance sold off all of its remaining FTT tokens ( the token of FTX, another crypto exchange). With that said, as mentioned above, there are some earnings in the news this morning. Chief among these was the DD report which beat on both the top and bottom lines.

With that background, it looks like the bulls want to retest the T-line in the QQQ today (at least going by premarket action). Meanwhile, the DIA looks to test the breakout level of its J-hook pattern and the SPY is testing its 50sma. The divergence between the mega-cap DIA and the other two main indices tells us that the market is still seeking the safety of the stodgy, traditionally less volatile Dow 30. Take that to heart. While the reality of the economy will not change tonight, Mr. Market is likely to knee-jerk stocks (for no good reason) in one direction or the other based on surprises (or non-surprises) in the results. So, don’t be in a hurry. Unless you are a volatility trader (scalper) there isn’t a lot of reason to jump in before the dust settles. Keep firm hold of your FOMO and your fear in general.

Be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: EGHT, PTON, F, OUST, ACB. 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

Friday was a very volatile bull trap across all 3 major indices.  SPY gapped up 1.6%, DIA gapped 1.15% higher, and QQQ gapped 2% higher at the open.  However, this was met with an immediate selloff that recrossed the gap in the QQQ, crossed back half the gap in the DIA, and crossed back down two-thirds of the gap in the SPY.  However, then it was the bull’s turn to trap the bears as a strong rally in the second half hour took us to new highs, more than crossing up out of the gap, in all 3 major indices.  At that point, the whipsaw kicked in once again as a very strong selloff ensued for the next 75 minutes.  This process completely recrossed the opening gap again, down to new lows on the day at noon.  From there we saw a smaller sideways rollercoaster centered on the Thursday closing price in the SPY, DIA, and QQQ.  That left us bobbing back and forth between small green and small red moves for the day up until 2:15 pm when the bulls began a strong rally that is driving us back up the rest of the day in all 3 indices.  It left the QQQ about three-fourths of the way back up to the opening price, the SPY 90% of the way back up to the opening price, and the DIA back just above the opening price at the close.

This action is giving us gap-up, indecisive, Spinning Top candles with wick on both ends, but considerably more wick to the downside.  On the day, all ten sectors were in the green with Healthcare (+0.42%) lagging and Basic Materials (+5.26%) by far (like by 3% far) the largest gaining sector.  Meanwhile, SPY gained 1.45%, DIA gained 1.35%, and QQQ gained 1.61%.  The VXX was down 1.25% to 17.35 and T2122 was up but remains in the mid-range at 73.62.  10-year bond yields pulled back from early highs to 4.169% and Oil (WTI) gained 5% to $92.54 per barrel.  So, overall, was a very volatile and indecisive day inside a very bearish and gap-filled week. 

In economic news, October Average Hourly Earnings came in exactly as forecast at +4.7% year-on-year (compared to the expected +4.7% and well below the September value of +5.0%).  This would tend to point toward a lessening of inflationary pressure.  However, October Nonfarm Payrolls came in hot at +261k (versus the forecast +200k, but far below the September value of +315k).  Again, this tends to show we are moving in the right direction…just not as fast as forecast.  The same was true for October Private Nonfarm Payrolls which came in at +233k versus the forecast of +200k, but again far below the September value of +319k.  The October Unemployment Rate was up more than expected to 3.7% (versus a forecast of 3.6% and September’s value of 3.5%).  And finally, the October Participation Rate fell to 62.2% versus the September value of 62.3%.  So, all this data seems to lean toward Fed actions working, inflation pressures starting to lessen, and progress being made…just not as much as we would have hoped/forecast.  This is why markets gapped so strongly higher (the expectation that the FOMC will have cover to lessen hikes soon).

SNAP Case Study | Actual Trade

In stock news, Reuters reported that the US Auditors’ onsite inspection of US-listed Chinese companies has now ended.  The article’s sources said it was too early to tell if the audits met US expectations.  The FAA has approved JBLU’s request to waive the minimum flight requirement.  This allows JBLU to keep the right to keep their gates and runway slots at NY’s JFK and NJ’s Newark airports, even though it does not use them at least 80% of the time.  A state of WA court has blocked ACI from paying out the $4 billion dividend to shareholders prior to the closing of the proposed deal to be acquired by KR.  In related news, the unions representing workers at both KR and ACI, as well as 26 organizations (purported antitrust experts) have urged the FTC to block that merger.  The US Supreme Court has agreed to hear AMGN’s appeal to revive their patents on the cholesterol drug Repatha that were invalidated by legal challenges from REGN and SNY in 2019.

In miscellaneous news, Friday afternoon Bloomberg reported that US commercial property prices have plunged 13% from their peak in May (but only 8% over the last 12 months).  Then Saturday, BRKB reported operating income up 20% year-on-year for Q3, but still managed to post a $2.69 billion net loss for the quarter, mostly from insurance losses (compared to a $10.1 billion gain in Q3 of 2121).  BRKB also spent $1.05 billion on stock buybacks during the quarter (bringing the YTD total to over $5.25 billion of stock repurchased).  Elsewhere, interestingly, the CFTC said after the close Friday that currency speculators have reduced their bets on a strong dollar, with the smallest net long position at the end of October for more than a year.  There was $3.08 billion in net long dollar contracts compared to $10.21 billion net long the week before.  This may have contributed to the Dollar’s pullback versus the Euro and Yen on Friday. Finally, on Saturday, China’s Health Ministry told a press conference that (contrary to recent rumors) China will continue its Zero Covid policy.

So far this morning, BRK.B, BNTX, HE, AMG, and FOUR have all reported beats on both the top and bottom lines.  Meanwhile, NRG, NI, and PLTR beat on revenue while missing on the earnings line.  On the other side, VTRS, and THS both missed on the revenue line while beating on earnings.  However, AMR missed on both the revenue and earnings lines.  It is worth noting that BTNX has raised its forward guidance.

Overnight, Asian markets leaned heavily to the upside.  Thailand (-0.17%) was the only exchange in the red. At the same time, Hong Kong (+2.69%), Taiwan (+1.51%), and Japan (+1.21%) led the region higher. In Europe, we see a similar picture taking shape at midday.  The FTSE (-0.22%) is the worst off of the only 2 exchanges showing any red.  Meanwhile, the DAX (+0.84%) and CAC (+0.13%) lead the region higher in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a green start to the day. The DIA implies a +0.54% open, the SPY is implying a +0.48% open, and the QQQ implies a +0.42% open at this hour.  The volatile 10-year bond yields are back down to 4.125% and Oil (WTI) is off more than 1% to $91.65/barrel in early trading.

There are no major economic news events scheduled for Monday.  The major earnings reports scheduled for the day include AMG, AMR, BNTX, CGAU, DK, FNV, DINO, KOS, NI, NRG, THS, and VTRS before the open.  Then, after the close, ACCO, ATVI, ASTL, AEL, ARKO, ASH, BHF, BKD, BWXT, CBT, CENX, CLOV, CAPL, FANG, DIOD, FN, ICUI, IFF, JHX, LYFT, MTW, DOOR, MOS, OSH, PTVE, PRIM, SEDG, TTWO, TWI, VRM, and WELL report. 

In economic news later this week, on Tuesday we have a Fed speaker (Mester at 4:40 am).  On Wednesday, we get EIA Crude Oil Inventories, the WASDE Ag Report, and another Fed speaker (Williams at 4 am).  Then Thursday, October CPI, Weekly Initial Jobless Claims, October Federal Budget Balance, and 2 Fed speakers (Mester at 1:30 pm and George at 2:30 pm) report.  Finally, on Friday, we get Michigan Consumer Sentiment.

It is a bit lighter week of earnings reports as, on Tuesday, we hear from AHCO, BLDR, CG, CLVT, CCO, CNHI, CEG, COTY, DBD, DD, SSP, ELAN, EXPD, GFS, IGT, LITE, NFE, NXST, PRTY, PKI, PRGO, RCM, RPRX, REYN, SCSC, SSRM, SGRY, TAC, VTNR, AMKR, AKAM, AMC, DOX, ANGI, DAR, FNF, GO, GXO, IAC, JKHY, MASI, MRC, NLOK, NVAX, OXY, OSCR, OVV, PRI, SFM, VSAT, and DIS.  Then on Wednesday, BHG, CLMT, CPRI, GIB, COHR, CRBG, DHI, GGB, HBI, HGV, ICL, LTH, MIDD, NOMD, PFGC, RBLX, RCI, SEAS, SWX, SPTN, TRP, TGNA, WEN, WWW, ADV, ATO, BGS, BRFS, CANO, CPNG, CRGY, ENS, FSM, G, JXN, JAZZ, KGC, LNW, MFC, RBT, NGL, RXT, RDFN, RNG, RIVN, STE, TTEK, TTEC, VET, and WYNN report.  On Thursday, we hear from AZN, AZUL, BDX, BAM, CAE, CEPU, EPC, GBTG, KELYA, EYE, NICE, PRMW, RL, SBH, SIX, TPR, TDG, USFD, WRK, WE, YPF, BZH, COMP, EDR, FLO, ITUB, STN, and TOST.  Finally, on Friday, AQN reports.

As mentioned above, there is no scheduled economic news today. However, overnight Bloomberg reported that AAPL is now expecting to make 3 million fewer iPhone 14s than originally anticipated. So, the woes in tech land continue. Probably more importantly, over the weekend, China announced that, despite rumors to the contrary, the second-largest economy in the world is sticking to its strict “Zero Covid” policy. The one olive branch from that press conference was that Chinese officials will discourage “local over-reactions.” (Still, you have to wonder whether a local official whose livelihood and maybe life depend on lowering covid case numbers is going to worry too much about the Health Ministry thinking he “overreacted”). So, it looks like we can expect more lockdowns, Chinese markets, and supply chain disruptions this winter as the covid season kicks into higher gear again.

With that background, it looks like the bulls want to retest the T-line in the SPY, hoping to find strength instead of resistance. However, the QQQ is going to be a big anchor to drag uphill as the mega tech names impact the SPY heavily as well. Even so, it sure looks like the DIA is trying hard to form a bullish J-hook pattern, even as the SPY and QQQ have a fight on their hands just to avoid looking for new lows. That divergence tells us that the market is still seeking the safety of the stodgy mega-cap names in the DIA. Don’t be in a hurry. Let’s see how things settle out after the open before jumping in. Control your FOMO and your fear in general.

Be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: VTR, AMAT, FCX, GDX, AAPL. 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 major indices gapped down at the open Thursday (about 1% in the SPY and QQQ and about two-thirds of a percent in the DIA).  At that point, the large-cap indices started a sideways rollercoaster action with a slightly bullish trend.  Meanwhile, the QQQ gave us a move dead sideways and a more volatile rollercoaster ride.  The DIA had managed to fade the morning gap by 12:20 pm and continued to bob around the level of that previous close the rest of the way.  However, the SPY remained in the gap and the QQQ bobbed around its opening level, not even attempting to fill the gap until the final 30 minutes.  This all ended with a strong selloff in the last 20 minutes of the day across all 3 major indices. This action gave us indecisive, gap-down, Spinning Top candles in the SPY and DIA with the QQQ tending more toward a gap-down, black Inverted Hammer candle.  It is worth noting that the QQQ is now VERY extended from its T-line.

On the day, six of the ten sectors were in the red with Technology (-2.05%) leading the way lower and Energy (+1.53%) lagging the move.  Meanwhile, SPY fell 1.02%, DIA fell 0.45%, and QQQ fell 1.95%.  It’s worth noting that the SPY and QQQ did this on average volume while the SPY did not quite reach average.  Elsewhere, the VXX was down 2.23% to 17.54 and T2122 remained in the mid-range at 43.83.  10-year bond yields rose to 4.149% and Oil (WTI) was down 2.14% to $88.06/barrel.  So, the market was still scared of the Fed at the open but quickly became undecided.  Meanwhile, the heavier volume (relative to average) in the DIA indicates money continues to flee to the safety of mega-caps.

In economic news, September Exports came in a little over a $1 billion less than the prior month while Sept. Imports came in $4.8 billion above the prior month.  The net September Trade Balance was larger than expected at -$73.30 billion (compared to the forecast $72.20 billion).  Weekly Initial Jobless Claims were lower than expected at 217k (versus the forecast of 220k and last week’s 218k number).  Q3 Nonfarm Productivity was up, but up less than expected at +0.3% (compared to the forecast of +0.6% but at least far better than Q2’s number of -4.1%).  Q3 Unit Labor Costs were up less than expected at +3.5% (versus +4.1% forecast and Q2’s reading of +8.9%).  October PMI came in better than expected at 47.8 (versus the 46.6 forecast but worse than the Sept. reading of 49.3).  However, September Factory Orders came in as expected at +0.3%, which was slightly better than the prior month’s +0.2%.  Finally, October ISM Non-Mfg. PMI came in below expectation at 54.4 (versus a forecast of 55.5 and the September reading of 56.7).

SNAP Case Study | Actual Trade

In stock news, TEVA agreed to pay $523 million to the state of NY to settle opioid lawsuits.  Elsewhere, LYFT confirmed it is cutting its staff by 13% (6883 employees). In addition, BA announced the launch of its first crewed Starliner capsule to carry humans has slipped to 2023.  Meanwhile, AMZN announced they are pausing all new corporate hiring.  At the same time, STLA is urging owners of 286,000 2005-2010 Chrysler cars after airbag deployment deaths.  ERIC subsidiary Vonage has agreed to pay $100 million to the FTC to settle a lawsuit over failing to provide a simple method for customers to cancel and imposing “junk” fees.  After the close, GIS announced they are following suit with GM and pausing advertising on Twitter.  Finally, Bloomberg reports AXL has drawn takeover interest from BWA and DANA as well as British firm Melrose Industries.

In miscellaneous news, early Thursday, the Bank of England raised interest rates by the most since 1989 by following the US in doing a 0.75% rate hike.  Back on this side of the pond, the SEC and DOJ announced they are launching probes into company executives gaming the “pre-arranged stock sales” system to do insider trading.  SIEN acknowledged it has been subpoenaed related to CEO trading and in September CMCM CEO and Former President were both charged with insider trading using the 10b5-1 prearranged sale trading plans. The government is expanding the investigation to other companies.  In Canada, the government cut its 2023 GDP forecast to +0.7%, but also cut its deficit forecast by 30% and said that the Canadian economy would narrowly avoid recession.

After the close, AMGN, PYPL, RGA, DXC, SQ, ED, LYV, CTVA, MSI, BECN, MELI, AEE, MCHP, SWKS, ILMN, TKC, VTR, MTD, IHRT, FND, OTEX, TWLO, DBX, EXAS, CTRA, SVC, ED, ATSG, AMN, TS, and CVCO all reported beats on the top and bottom lines.  Meanwhile, SBUX, HVRRY, MNST, GDDY, CNXN, COLD, ZEUS, AL, MTZ, KWR, TDS, and WBD all reported misses on revenue while beating on earnings.  On the other side, EOG, RKT, EXPE, CWK, OPEN, DASH, USM, CE, LFG.A, FRG, TEAM, AGL, SEM, and USX all reported beats on revenue while missing on earnings.  Unfortunately, CVNA, COIN, AVB, and NVST all missed on both the revenue and earnings lines.

So far this morning, CAH, AES, ADNT, HSY, LAMR, ASIX, and CNK have all reported beats on the revenue and earnings lines.  Meanwhile, ITOCY, PBR, TEF, HUN, EVRG, AMCX, and TIXT all missed on revenue while beating on earnings.  On the other side, DUK, QRTEA, IEP, and NFG all beat on revenue while missing on earnings.  Unfortunately, MGA, FLR, SYNH, GTN, and AMRX all missed on both the top and bottom lines.  It is worth noting that SYNH and GTN both lowered their forward guidance.  However, PNM raised its forward guidance.

Overnight, Asian markets were very strongly green, with the sole exception of Japan (-1.68%).  Hong Kong (+5.36%), Shenzhen (+3.20%), and Shanghai (+2.43%) led the region higher again on rumors the Chinese government would move away from its “Zero Covid” lockdown strategy.  (Oddly, these rumors come as China reported its highest number of new cases in more than six months.)  In Europe, we see a similar picture at midday with only Portugal (-0.41%) in the red.  The FTSE (+1.38%), DAX (+1.76%), and CAC (+2.26%) are all strongly green on a very broad-based rally that sees none of the other exchanges up less than one-half of one percent in early afternoon trading.  As of 7:30, Futures are pointing toward a green start to the day in the US as well.  The DIA implies a +0.62% open, the SPY is implying a +0.80% open, and the QQQ implies a +0.85% open ahead of data.  10-year bond yields are up again at 4.163% and Oil (WTI) is surging up 3.5% to $91.28/barrel in early trading.

The major economic news events scheduled for Friday include Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate (all at 8:30 am).  We also have a Fed speaker (Rosengren at 10 am).  The major earnings reports scheduled for the day include ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST before the open.  There are no major reported scheduled for after the close. 

As markets wait on the October Employment data this morning, the rest of the world seems to be buoyed by the hope that the second-largest economy (China) may open up by loosening covid restrictions and lockdowns. That may be the case, but so far there is no official word of such a policy shift and that country is at a six-month high in terms of new covid cases. (Moreover, the Chinese vaccine is ineffective against the now dominant Omicron variants meaning the only tools that government has available are lockdowns or “let it go and hope unrest over mass deaths does not get bad before you reach herd immunity.” The point is, despite market hopes, and rumors, I would not bet money based on just hopium. On this side of the world, all the news seems to revolve around the now-private TWTR. It seems Musk has begun laying off up to half of the company staff and has already been sued for doing so without providing advanced notice.

With that background and as we wait on the employment data, it is clear the bullish trend is broken and the premarket bounce would still have a long way to go to print a Morning Star-type signal in any of the 3 major indices. Extention from the T-line (8ema) is only a factor in the beleaguered QQQ at this point. However, T2122 says we have room to run since we are still in the mid-range. Once again, be very careful about chasing these morning gaps. This is not only a very bearish market, but also very volatile. Any move higher could “rip your face off” by reversing hard. So, strongly consider letting the panic settle out before taking any new trades. Emotions will kill a trader! Control your FOMO and your fear in general. I promise you, there will be plenty of money to make after the knee-jerks ease up. Also, remember that this is Friday…with a long weekend news cycle to get through before we can adjust or close any trades.

This morning, I am reminded of Warren Buffet’s first rule of making a lot of money in the market: “Do not lose a lot of money in the market” (and his second rule is “remember rule #1”). So, be deliberate and disciplined, but don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And when price does move in your direction, always move your stops in your favor and take a little profit off the table. (You have to remember the “Legend of the man in the green bathrobe“…in that situation, it is NOT HOUSE MONEY you’re betting, it’s all OUR MONEY!). Finally, trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but 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 flat to down just a touch on Wednesday.  We then traded sideways in a rollercoaster wave pattern until the Fed announcement at 2 pm.  At that point, we saw a huge spike over 5 minutes in all 3 major indices.  This was followed by a half-hour of sideways chop at the highs and then a massive selloff taking us down 2.5% to 4.5% over the last 90 minutes of the day. This action gave us large black-body candles with large upper wicks.  This also took us far below the T-line (8ema) in the SPY and QQQ while the DIA is just pulling back to the T-line.

On the day, all ten sectors were in the red as Technology (-3.87%) and Basic Materials (-3.60%) led us lower while Communications (-0.75%) lagged behind. Meanwhile, SPY fell 2.53%, DIA fell 1.55%, and QQQ fell 3.43%.  The VXX was up 2.57% to 17.94 and T2122 plunged into the mid-range at 42.33.  10-year bond yields rose to 4.09% and Oil (WTI) is up 0.89% to $89.16/barrel. So, apparently, traders loved the Fed statement and then were scared to death by Chair Powell’s press conference performance.

In economic news, the October ADP Nonfarm Employment Change came in hotter than expected at +239k (compared to a forecast of +195k and September’s +192k number).  EIA Crude Oil inventories showed a larger-than-expected drawdown of 3.115 million barrels (versus the forecast of +0.367 million barrels and last week’s reading of +2.588 million barrels).  However, the big news of the day was from the Fed.  As was expected, the FOMC hiked rates by 0.75% (to a 3.75% – 4% rate).  However, the Bulls took heart from the statement which hinted at softening when it added that in the future they would take “the cumulative tightening” effect into account “which lags monetary policy.”  Those statement additions did seem to be hinting at slowing the rate hikes soon.  However, in his press conference, Fed Chair Powell largely dismissed the idea of pausing soon again reiterating that it will be data-driven and may be soon or further out depending on the data the Fed gets.  This is not what the Bulls wanted to hear and was exactly what the Bears wanted.  Hence, the very strong selloff on this news.

SNAP Case Study | Actual Trade

In stock news, early in the day, the mains iPhone supplier to AAPL “locked in” 200,000 employees for a 7-day Covid quarantine.  This came after employees had been scaling fences and eluding police to escape the plant to avoid Covid.  Early on, OPEN posted a notice that it has cut 18% of its workforce (550 people) due to the poor housing market.  Elsewhere in that arena, CNBC reported the WFC is preparing for major layoffs in their mortgage processing departments as mortgage volume drops.   At mid-morning, CVS, WBA, and WMT agreed to pay $13.8 billion to resolve several thousand state, local, and tribal lawsuits accusing them of mishandling opioid drugs.  This includes $5 billion over 10 years from CVS and $5.7 billion over 15 years for WBA.  WMT will pay $3.1 billion (mostly up front).  In the afternoon, AAL pilots joined peers at UAL and DAL in rejecting the latest contract proposal from their company.  Then, late in the day DD announced it was scrapping its deal to buy ROG due to the failure to get past Chinese Regulatory hurdles.  In other M&A deal news, three state Attorneys General have filed suit to block the KR buyout of ACI (for $25 billion).

In miscellaneous news, French fuel supplies will begin to improve over the next 1-3 weeks.  The strike which had taken 45% of the country’s refining capacity offline for most of October has been resolved and major refineries will slowly come back online starting this week.  XOM and TTE are the main oil companies impacted by shutdowns.  Back in the US, the SEC has implemented new rules for mutual funds.  The rules will require funds to maintain more liquidity (10% of net assets to be highly liquid like cash) as the agency expects the market downturn to cause a flood of redemptions.  The idea is that by requiring the extra cash to be accumulated slowly now, this will avoid market gyrations as funds have to sell in a hurry to meet redemption requests.

After the close, ALL, BKNG, EBAY, ZG, Z, EQIX, APA, WCN, MRO, QRVO, FTNT, FLT, ACA, TTMI, ETSY, QDEL, O, WSC, PTC, WTS, ANSS, RUN, GFL, IR, MKSI, PK, SLF, AFG, VSTO, and CCRN all reported beats on the revenue and earnings lines.  Meanwhile, QCOM, LNC, MGM, HST, WERN, CPE, ES, HHC, MET, OPAD, PDCE, SIGI, SUM, KMPR, TSE, TPC, and ALGT all reported beats on revenue while missing on earnings.  On the other side, CTSH, ALB, EQH, CW, ICLR, PAA, RCII, RIG, WES, and ROKU reported misses on revenue while also beating on earnings.  Unfortunately, LUMN, ATUS, CF, CLR, YELL, NUS, and LHCG all missed on both the revenue and earnings lines.  It is worth noting that CCRN was the only major company to raise guidance.  However, QCOM, TSE, VSTO, MKSI, SUM, ROKU, and ANSS all lowered their forward guidance.

So far this morning, ABC, AER, CI, LNVGY, COP, MAR, TEVA, APTV, REGN, W, SRE, APD, BHC, COMM, INGR, MDU, UAA, PENN, QSR, AER, ADT, APG, EPAM, OGE, H, GIL, ALIT, SRCL, MUR, CROX, BRKR, VIRT, GOLF, MODV, BALL, DLX, ESAB, and UA all reported beats on both the top and bottom lines.  Meanwhile, EXC, JCI, WCC, GOLD, TPX, IRM, ITT, KTB, and WLKP all missed on revenue while beating on earnings.  On the other side, MRNA, TX, and PWR beat on revenue while also missing on earnings.  Unfortunately, FIS, WLK, HII, ZTS, PTON, VNT, WMS, PZZA, MD, and FOCS all missed on both the top and bottom lines.  It is worth noting that CI, INGR, AER, MODV, and ESAB all raised their forward guidance.  However, HII, TPX, PTON, VNT, WMS, and MD all lowered their guidance.

Overnight, Asian markets were very nearly red across the board in reaction to the US Fed.  Only Thailand (+0.04%) managed to hold onto the green.  Meanwhile, Hong Kong (-3.08%), which halted trading midday due to a typhoon warning, Malaysia (-2.15%), and Australia (-1.84%) led the region lower.  In Europe, we do see red across the board at midday.  The FTSE (-0.58%), DAX (-1.09%), and CAC (-0.76%) lead the region lower with many of the smaller exchanges even further down in early afternoon trade.  As of 7:30 am, US Futures are pointing to a down start to the day in follow-up to the second Fed reaction yesterday.  The DIA implies a -0.45% open, the SPY is implying a -0.66% open, and the QQQ implies a -0.90% open at this hour. 10-year bond yields are spiking to 4.193% and Oil (WTI) is down 1.66% to $88.50/barrel in early trading.

The major economic news events scheduled for Thursday include September Imports / Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Unit Labor Cost, and Q3 Nonfarm Productivity (all at 8:30 am), Oct. Services PMI (9:45 am), Sept. Factory Orders and Oct. ISM Non-Mfg. PMI (all at 10 am).  The major earnings reports scheduled for the day include GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, and ZTS before the open.  Then after the close, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report. 

In economic news later this week, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This huge earnings week comes to an end on Friday, as ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

Now that the Fed has disappointed dreamers (who expected to hear the worst is over, the Fed is done with big tightening moves, and we’re off to the races) it looks like markets may be headed back down to retest the mid-October lows. The DIA is giving up its T-line in premarket (and was the last major index to do so). China also reiterated that, despite rumors, they are committed to the “Zero Covid” policy of lockdowns. The next shoe to drop may well be the Bank of England rate decision at 8 am Eastern. So, buckle in for a potentially bumpy ride.

The bullish trend is now broken in the QQQ, SPY, and as of premarket the DIA. Extention from the T-line (8ema) is likely not a factor, although the QQQ is very extended below it at this point. However, T2122 says we are have room to run since we are still in the mid-range. Once again, be very careful about chasing. This is not only a very bearish market, but very volatile. And a relief rally might “rip your face off.” So, strongly consider letting the panic settle out before taking any new trades. Emotions will kill a trader! Control your FOMO and your fear in general. I promise you, there will be plenty of money to make after the knee-jerks ease up.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And 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!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: SQQQ, QID, RIG, BITO, AMD, XLK, AAPL, GM, TDOC, QCOM. 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

A huge Bull Trap was in effect at the open Tuesday as markets gapped strongly higher (up 1% in the SPY, up 0.6% in the DIA, and up a massive 1.4% in the QQQ). However, the bears immediately stepped in and sold off all three major indices hard for the first hour, filling the gap in 30 minutes and then continuing South that amount or more in the second 30 minutes.  Once that trap was sprung, the large caps traded sideways near the lows for the rest of the day.  Meanwhile, the QQQ continued a modest selloff over the afternoon as well.  This action gave us Bearish Engulfing candles in the SPY and DIA as well as a large, black, outside day candle in the QQQ.  The action also took the QQQ back below its T-line (8ema).

On the day, eight of the ten sectors were in the green with the red coming from the Technology (-0.52%) and Consumer Cyclical (-0.17%) sectors while Basic Materials (+1.07%) led the pack higher.  At the same time, SPY fell 0.43%, DIA fell 0.31%, and QQQ fell 1.02%.  The VXX is off 0.96% to 17.49 and T2122 remains in the overbought territory at 88.92.  10-year bond yields have recovered from early losses to be at 4.05% and Oil (WTI) is up more than 2% to $88.30/barrel.  So, this was just a “Bull Trap” day that then faded into a ”wait for the fed” mood all afternoon.

In economic news, the October Mfg. PMI came in a bit above forecast at 50.4 (versus 49.9 expected and 49.9 in September).  The same was true for October ISM Mfg. PMI which came in a 50.2 compared to a forecast of 50.0 and the September value of 50.9.  The oddity was October ISM Mfg. Employment came in a 50.0 compared to the forecast of 53.0 and the September reading of 48.7.  The September JOLTs came in well above expectation at 10.717 million (versus the forecast of 10.000 million and the August number of 10.280 million).  This jump may give cause the Fed to act even more aggressively (or at least give cover for the expected 0.75% hike).  Finally, after the close, API Weekly Crude Oil Stocks fell far more than expected.  The actual number was -6.530 million barrels compared to a forecast of +0.267 million barrels and last week’s build of 4.520 million barrels.

SNAP Case Study | Actual Trade

In stock news, TRQ has postponed a shareholder meeting intended to approve the company’s acquisition by RIO.  The delay comes at the request of RIO.  Elsewhere, UAL pilots have voted to reject a new contract offer from the company.  This throws out the tentative deal reached in June and the unions said pilots would immediately begin to picket the airline.  Meanwhile, INTU has halted hiring at its Credit Karma unit per a report from Bloomberg. Bloomberg also reported that TSLA will be bringing 200 engineers from its Chinese factory to its Fremont CA factory in order to increase US production.  This move may face opposition since the Fremont plant has recently laid off staff.  In legal action, the SEC fined KOP $1.3 million for misleading statements and failing to disclose material information. In addition, the state of Ohio sued DG for shelf prices that were substantially lower than what was charged at the register for 16%-88% of its products.  In layoff news, UPST laid off approximately 10% of their staff due to a “challenging economy.”

In miscellaneous news, Reuters reports that the Treasury Dept. repelled cyber attacks from a pro-Russian hacker group (the same one that attacked banks and airports) in early October.  AMZN sold off 5.52% on Tuesday, causing its valuation to fall below $1 trillion for the first time since April 2020.  BP announced an additional $2.5 billion for its stock buyback plan (to be used this year).  This brings the BP total 2022 buyback to $18.5 billion.

After the close, AIG, MDLZ, EIX, DVN, ANDE, CZR, ABNB, VOYA, CLX, PARR, FMC, LFUS, CNDT, SCI, SMCI, BXC, PSA, CHK, CRK, PEAK, CACC, CRUS, EXR, AEIS, UNVR, BFAM, and COKE all reported beats on the revenue and earnings lines.  Meanwhile, MCK, MTCH, PRU, AMCR, CWH, RNR, TA, and EA reported beats on revenue while missing on earnings.  On the other side, OKE, UNM, AIZ, OI, WU, THG, YUMC, and MCY all missed on revenue while beating on earnings.  Unfortunately, ET, AMD, REZI, CAKE, and VRSK missed on both the top and bottom lines.  It is worth noting that MCK, and SMCI both raised their forward guidance.  However, AMD, ABNB, REZI, and EXR all lowered their forward guidance.

So far this morning, CVS, HUM, GSK, CVE, NVO, CDW, TEL, TT, ETR, OMI, ZBH, ROK, ODP, VMC, HZNP, SITE, VSH, FUN, SHOO, NYT, UTHR, DNOW, FDP, and RITM all reported beats on the revenue and earnings lines.  Meanwhile, DISH, EL, FYBR, GNRC, and BLCO all missed on revenue while beating on earnings.  On the other side, MKL, YUM, MLM, BR, PSN, and SMG all missed on revenue while beating on earnings.  Unfortunately, VWCRY, CEQP, AVNT, EXPI, TRMB, ENTG, and PARA all missed on both the top and bottom lines.  It si worth noting that CVS, TT, ZBH, HZNP, SITE, and CRL all raised their forward guidance.  However, EL, TEL, MLM, AVNT, TRMB, ENTG, SHOO, and BLCO all lowered their forward guidance.

Overnight, Asian markets were mostly green as China continued to lead the region higher on speculation that Xi will reopen the country from covid lockdowns.  Hong Kong (+2.41%), Shenzhen (+1.34%), and Shanghai (+1.15%) led the gains while India (-0.34%) and New Zealand (-0.30%) were the only appreciable red in the region.  In Europe, the exchanges are mixed with the majors leaning red at midday.  The FTSE (-0.39%), DAX (-0.14%), and CAC (-0.08%) seem to be waiting on the Fed in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a mixed, flat start to the day.  The DIA implies a -0.08% open, the SPY is implying a +0.01% open, and the QQQ implies a +0.15% open at this hour.  10-year bond yields are flat (at least by recent volatile standards) at 4.042% and Oil (WTI) is unchanged at $88.36/barrel in early trading.  Again, it feels like we are all waiting on the Fed announcement, wording, and Q/A session.

The major economic news events scheduled for Wednesday, we get ADP Nonfarm Employment (8:15 am), EIA Crude Oil Inventories (10:30 am), FOMC Statement and Fed Rate Decision (both at 2 pm), and FOMC Press Conference (at 2:30 pm).  The major earnings reports scheduled for the day include ATI, APO, AVNT, BLCO, BDC, EAT, BR, CHRW, CDW, FUN, CVE, CRL, CLH, CEQP, CVS, EMR, ENTG, ETR, EL, EXPI, RACE, FYBR, GNRC, GSK, HZNP, HUM, JLL, MKL, MLM, NYT, NMR, DNOW, ODP, OMI, PARA, PSN, PGR, RITM, ROK, SABR, SMG, SBGI, SITE, SHOO, TT, TRMB, UTHR, VSH, VMC, YUM, ZBH before the open.  Then after the close, ALB, ALGT, ALL, ATUS, AFG, APA, ACA, EQH, BBSI, BKNG, CPE, CF, CHRD, CTSH, CLR, CCRN, CW, EBAY, EQIX, EQX, ETSY, ES, FLT, FTNT, GFL, HST, HHC, ICLR, IR, KMPR, KD, LHCG, LNC, LUMN, MRO, MATX, MET, MGM, MKSI, MOD, NUS, NTR, OPAD, PK, PDCE, PAA, PAGP, PTC, QRVO, QCOM, QDEL, O, RCII, ROKU, RYI, SIGI, SUM, SLF, SU, RUN, RIG, TSE, TTMI, TPC, VSTO, WCN, WTS, WERN, WES, WSC, YELL, and Z report.

In economic news later this week, on Thursday, Imports/Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, Q3 Unit Labor Costs, Services PMI, Sept. Factory Orders, Oct. ISM Non-Mfg. PMI report. Finally, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This is a huge earnings week as on Thursday, GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, ZTS, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report.  Finally, on Friday, ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

So, as Fed day starts, it seems the market is expecting a 0.75% rate hike but is hoping to hear a softening of tone and perhaps even a hopeful word that the pace of rate hikes will decrease and end during Q1. Until we hear from the Fed, I would expect a mostly dead market with all the early bets placed and the rest of us waiting to see how things shake out before making new trades.

The bullish trend is not broken and today’s premarket action is very small and indecisive so far. Extention from the T-line (8ema) is not a factor although the DIA remains a bit extended. However, T2122 says we are still in the overbought area. Unfortunately, markets only “tend to react” to overbought or oversold conditions. They can stay extended for quite some time (longer than we can stay solvent as the saying goes). Once again, expect a knee-jerk reaction at 2 pm and perhaps another at 2:30 pm (or shortly thereafter) at a minimum. Do not feel like you have to get your trades on immediately on the Fed news. Let the crazy volatility level out instead of chasing. Control your FOMO I promise you, there will be plenty of money to make after things the crazy volatility settles.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And 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!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but 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

Stocks gapped down at the open Monday (down 0.63% in the SPY, 0.53% in the DIA, and 0.77% in the QQQ).  From that point, the SPY and QQQ rode the rollercoaster sideways around that opening price.  The DIA did something similar, just at a higher-level floating back and forth inside the morning gap.  This action is giving us inside day, Spinning Top (DIA and QQQ) or Doji (SPY) candles in the major indices (or Bearish Harami in the QQQ).  The QQQ also bounced up off its T-line (8ema) and 200sma while the two large-cap indices did not get low enough to retest the T-line level or any other major averages.  All of this happened on much lower-than-average volume, except in the DIA where money was going to seek shelter.

On the day, eight of the ten sectors are in the red with Energy (+0.65%) way out front in leading the gains while Technology (-1.11%) lagged far behind.  Meanwhile, SPY lost 0.70%, DIA lost 0.33%, and QQQ lost 1.16%.  The VXX was down 1.5% to 17.66 and T2122 fell but remains deep in the overbought territory at 91.75.  10-year bond yields spiked up to 4.054% and Oil (WTI) is down 1.99% to $86.16/barrel.  So, overall, it was an indecisive day as markets get ready to take in heavy earnings and wait on the Fed hike/verbiage on Wednesday.

For the month, DIA led the comeback, posting a huge 13.96% gain (the largest gain in 45 years).  SPY came in second, giving us an 8.13% gain.  However, the beleaguered high-tech QQQ lagged behind, posting only a 4% gain.  It is worth noting that SPY showed significant lower wick for October, printing a Bullish Harami candle.  However, QQQ showed major indecision, printing a white-bodied, Spinning Top Bullish Harami candle for the month.  While the DIA closed above the September candle, none of the 3 major indices has challenged the monthly downtrend yet.

SNAP Case Study | Actual Trade

In economic news, Chicago PMI came in below expectations at 45.2 (compared to a forecast of 47.0 and a September reading of 45.7).  In the afternoon, Bloomberg reported that 37% of US small businesses could not pay their rent in October. Still, this is questionable data from a mailed survey of 4,789 businesses.  (The same survey more than half of MA and 49% of NJ businesses could not make rent.)  During the evening, President Biden said he would ask Congress to implement a tax on “windfall profits” that oil and gas companies have been raking in since the war in Ukraine began.

In stock news, RIVN notified people who have reservations to buy one of their vehicles that R1T “Max Pack” trucks will not start until 2024.  This is far after the original “summer 2023” promised delivery.  In China, China Southern Airlines has canceled the planned return to the use of BA’s 737 Max planes.  This would have been the plane’s first flight in China since 2019.  In other China news, Reuters reports that fearing Covid-19 (after a previous worker lock-in), scores of workers at AAPL’s primary iPhone supplier (Foxconn) climbed fences and fled the main iPhone plant in Zhengzhou.  Meanwhile, AMZN announced it will stop listing products from its largest Indian sellers (Appario).  Recent data is not available, but in 2019 Appario accounted for 35% of AMZN sales in India.  Elsewhere, DAL pilots have voted to authorize a strike if union negotiators can’t reach a deal with the airline.  However, due to the Federal “cooling off period” law, there is not expected to be any impact on Thanksgiving travel.

After the close, AFL, CAR, NXPI, WMB, CVI, BCC, AMKR, LEG, HOLX, AWK, VAC, CNO, ANET, SBAC, STRL, and VNO all reported beats on the revenue and earnings lines.  Meanwhile, TEN, SYK, ACHC, KMT, and CIVI all beat on revenue while missing on earnings.  On the opposite side, CINF, HLF, CHE, and CLW all missed on revenue while beating on the earnings line.  However, GT and FLS both missed on the top and bottom line.

So far this morning, MPC, PSX, EPD, LLY, LEA, LDOS, MPLX, CNP, WEC, AME, SON, XYL, LPX, IT, ARCB, BLD, IDXX, WAT, and CHT have all reported beats to the top and bottom lines.  Meanwhile, TM, UBER, KKR, TAP, HSC, NEM, AIRI, and ARNC reported beating on revenue while missing on earnings.  On the other side, BP, PFE, SONY, ETN, HSIC, WAB, TRI, and SEE all missed on revenue while beating on the earnings line.  Unfortunately, ZBRA, LCII, CTLT, and LGIH missed on both the top and bottom lines.   Note that PFE, AME, XYL, IT, BLD, and SOFI all raised forward guidance.  However, LLY, ZBRA, CTLT, LGIH, WAT, and USAC all lowered their forward guidance.

Overnight, Asian markets leaned heavily to the green side.  Only Malaysia (-0.99%) and New Zealand (-0.19%) were in the red.  Meanwhile, Hong Kong (+5.23%), Shenzhen (+3.24%), and Shanghai (+2.62%) roared higher to lead the region to gains.  (The apparent cause for Chinese stocks exploding higher were rumors of talks aimed at reopening the country from Covid restrictions.  However, Chinese PMI also came in slightly better than expected at 49.2.)  In Europe, the exchanges are also nearly (and strongly) green across the board at midday.  Only Greece (-0.24%) is in the red, while the FTSE (+1.63%), DAX (+1.28%), and CAC (+1.74%) are leading a broad-based and strong rally in early afternoon trade. As of 7:30 am, US Futures are pointing toward a gap higher to start November.  The DIA implies a +0.60% open, the SPY is implying a +0.90% open, and the QQQ implies a +1.15% open at this hour.  Meanwhile, 10-year bond yields have plummeted again to 3.949% while Oil (WTI) is up 1.5% to $87.82/barrel in early trade.

The major economic news events scheduled for Tuesday include Mfg. PMI (9:45 am), October ISM Mfg. PMI (10 am), September JOLTs Job Openings (10 am), and API Weekly Crude Oil Stocks (4:30 pm) are reported.  The major earnings reports scheduled for the day include AJRD, AGCO, AME, ARCB, ARNC, BP, CTLT, CNP, CIGI, ETN, ECL, LLY, EPD, FOXA, BEN, IT, HSIC, IDXX, INCY, KKR, LCII, LEA, LDOS, LGIH, LPX, MPC, TAP, MPLX, NEM, PFE, PSX, SEE, SPG, SIRI, SON, SONY, SUN, SYY, TRI, BLD, TM, UBER, WAB, WAT, WEC, XYL, and ZBRA before the open.  Then after the close, AMD, ABNB, AMCR, AIG, ANDE, AIZ, BXC, BFAM, CZR, CWH, CAKE, CHK, CRUS, CLX, CRK, DVN, EIX, EA, ET, ENLC, EXR, FMC, THG, PEAK, LBTYA, LFUS, MTCH, MCK, MDLZ, OI, OKE, PARR, PRU, PSA, RNR, REZI, SCI, SKY, SMCI, TA, UNVR, UNM, VRSK, VOYA, WU, and YUMC report. 

In economic news later this week, on Wednesday, we get ADP Nonfarm Employment, EIA Crude Oil Inventories, FOMC Statement, Fed Rate Decision, and FOMC Press Conference.  Then on Thursday, Imports/Exports, September Trade Balance, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, Q3 Unit Labor Costs, Services PMI, Sept. Factory Orders, Oct. ISM Non-Mfg. PMI report. Finally, on Friday, we get Avg. Hourly Earnings, Oct. Nonfarm Payrolls, Oct. Participation Rate, and Oct. Unemployment Rate.

This is a huge earnings week as on Wednesday, ATI, APO, AVNT, BLCO, BDC, EAT, BR, CHRW, CDW, FUN, CVE, CRL, CLH, CEQP, CVS, EMR, ENTG, ETR, EL, EXPI, RACE, FYBR, GNRC, GSK, HZNP, HUM, JLL, MKL, MLM, NYT, NMR, DNOW, ODP, OMI, PARA, PSN, PGR, RITM, ROK, SABR, SMG, SBGI, SITE, SHOO, TT, TRMB, UTHR, VSH, VMC, YUM, ZBH, ALB, ALGT, ALL, ATUS, AFG, APA, ACA, EQH, BBSI, BKNG, CPE, CF, CHRD, CTSH, CLR, CCRN, CW, EBAY, EQIX, EQX, ETSY, ES, FLT, FTNT, GFL, HST, HHC, ICLR, IR, KMPR, KD, LHCG, LNC, LUMN, MRO, MATX, MET, MGM, MKSI, MOD, NUS, NTR, OPAD, PK, PDCE, PAA, PAGP, PTC, QRVO, QCOM, QDEL, O, RCII, ROKU, RYI, SIGI, SUM, SLF, SU, RUN, RIG, TSE, TTMI, TPC, VSTO, WCN, WTS, WERN, WES, WSC, YELL, and Z report.  On Thursday, GOLF, ADT, WMS, AER, APD, ALIT, ABC, APG, APTV, ARW, AAWW, BALL, BALY, GOLD, BHC, BCE, BRKR, CQP, LNG, CI, COMM, COP, CROX, CMI, DSEY, DNB, SATS, EPAM, ESAB, EXC, FIS, FOCS, GIL, GTN, GPRE, HII, H, INGR, NSIT, IBP, ICE, IRM, ITT, JCI, K, KTB, MAR, MD, MRNA, MODV, MUR, NGD, OGN, PZZA, PH, BTU, PTON, PENN, PNW, PWR, REGN, QSR, RCL, SRE, SPR, STLA, SRCL, TRGP, TPX, TX, TEVA, VNT, W, WCC, WLK, ZTS, AGL, AL, ATSG, AEE, COLD, AMGN, AMN, TEAM, AVB, BECN, SQ, CVNA, CVCO, CE, COIN, CODI, ED, CTRA, CTVA, BAP, CWK, DASH, DBX, DXC, NVST, EXAS, EXPE, FND, FRG, GDDY, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, ZEUS, OTEX, OPEN, PYPL, CNXN, PBA, KWR, RGA, RKT, SEM, SVC, SWKS, SM, SBUX, TDS, TS, TWLO, USX, VTR, and WBD report.  Finally, on Friday, ADNT, AES, AMCX, AXL, AMRX, BEP, CAH, CNK, D, DUK, ENB, EOG, EVRG, FLR, GTES, GLP, HSY, HUN, IEP, KOP, LAMR, LSXMA, MGA, PBR, PPL, SYNH, TEF, TIXT, and VST report.

In late-breaking news, JNJ announced they will buy ABMD at $380/share (a 50% premium to Monday’s closing price of $252.08). The $16.6 billion deal will strengthen JNJ’s cardiovascular business. The other news is the big lift China has given to global markets overnight. Just be careful, because at this point it seems to be based on rumor or opening which could evaporate like mist. Beyond those, the main news continues to be the flood of earnings data. Results are shown above, but in general, I would characterize them as pretty good (especially when you consider the constant mantra of “inflation and recession” we have heard for months). With that said, continue to be cautious, and don’t be in a hurry to chase a gap this morning. Wait until the market open has settled. Remember that rotation continues to be in play among sectors and asset classes (capitalization). You need look no further than the massive DIA performance in October to show that rotation. (When was the last time the stodgy, mega-cap, DIA components led a rally this way? I’ll tell you, it’s been 45 years.)

The trend remains bullish across the market indices and today’s premarket action is looking for a gap back up to retest Friday’s highs (so far). Extention from the T-line (8ema) is not really a factor although the DIA is just a bit extended. However, T2122 says we are still overbought. Unfortunately, markets only tend to react to overbought or oversold conditions. They can stay extended for quite some time (longer than we can stay solvent as the saying goes). Finally, don’t forget the Fed announces Wednesday and this is likely another time where the wording of the statement and exactly how Powell answers questions will be at least as important as the rate hike size. So, a pause until the Fed announcement may well be in the cards.

Be deliberate and disciplined. Don’t be stubborn. Remember that it is 100 times more important to avoid big mistakes than it is to pick big winners. If you have a loss, admit you were wrong and take the loss before it gets out of hand. And 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!). Trading is not your hobby. It’s a job. The money is real. 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. I know the Powerball is huge right now, but give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: FCX, GDX, MARA, AI, TSLA, AMAT, LTHM, QCOM, AAPL, JNK. 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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