9/11, PPI, Oil Output, and WFC Top the News

Markets opened flat Thursday after Weekly Jobless claims came in well below estimate (310k vs 335k est.) in the last report before the end of extended unemployment will hit the books.  Stocks then put in a little rally the first half-hour.  At that point, we saw a slow fade back to flat at 1 pm.  However, at one Fed member Bowman told the American Bankers Assn. she is “still encouraged about the economic recovery and expects the Fed to taper bond buying this year.” This was nothing new, but markets still sold off hard for 30 minutes before grinding sideways in a tight range the rest of the day.  This left us with Inverted Hammer-type candles in all 3 major indices with prices going out near the lows.  On the day, SPY lost 0.42%, QQQ lost 0.34%, and DIA lost 0.38%.  The VXX gained 2% to 26.06 and T2122 held steady at 33.54.  10-year bond yields dropped to 1.295% and Oil (WTI) fell almost 2% to $67.98/barrel. 

Despite the drop in oil prices, Bloomberg reported Thursday evening that US Oil output fell to its lowest level on record (going back to 1983) after Hurricane Ida.  This amounts to a 1.5mil barrel/day production decline.  In fact, 75% of US oil and gas production in the Gulf of Mexico remains offline more than 10 days after the storm left the gulf.  Maybe most alarmingly, on Wednesday, RDS.A (one of the largest global oil producers) declared “force majeure” on many of its open contracts to deliver oil. This news about the severity of the problem can't help but impact the Oil E&P tickers that focus on the gulf.

After the close, WFC announced it will pay another $250 million fine.  This one stems from a banking regulator finding that WFC did not properly execute a mortgage loss mitigation program.  This violated a 2018 consent order and was tied to the company’s loan modification program.  The Office of the Comptroller of the Currency said they are also considering putting limits on the bank’s future activities since it has engaged in “unsafe and unsound practices.”  Oddly, WFC stock rose 1.6% in after-hours trading on the news.

Thursday evening, New York joined CA to become the second state (and large population state to boot) that will ban the sale of new internal combustions vehicles by 2035.  The NY ban impacts both cars and trucks, while CA only bans internal-combustion light-duty trucks (SUVs and pickups) as of then.  This is more evidence of the major shift in the auto industry, potentially working in favor of TSLA, NKLA (head starts) and requiring major retooling and technology shifts from the old guard like GM, F, and FCAU. Obviously, batteries, electricity production, and charging station infrastructure-related industries will benefit from the accelerating trend.

Overnight, Asian markets were mostly green on modest moves.  The three exceptions to this rule were Hong Kong (+1.91%), Japan (+1.25%), and Taiwan (+0.98%) which posted strong week-ending gains as Chinese game stocks made a comeback after the Thursday overreaction to the downside.  In Europe, stocks are mostly higher on modest moves as the region rebounds from fear that preceded the ECB meeting.  The FTSE (+0.34%), DAX (+0.45%), and CAC (+0.36%) are leading the way at mid-day.  As of 7:30 am, US Futures are pointing to a gap higher.  The DIA is implying a +0.52% open, the SPY implying a +0.45% open, and the QQQ implying a +0.44% open at this hour.  10-year bond yields are up to 1.321%, Oil (WTI) is up 1.85% to $69.41/barrel, and the dollar is down just slightly in early trading.

The major economic news scheduled for release on Friday is limited to August PPI (8:30 am), and WASDE Report (noon).  The major earnings reports scheduled for the day are limited to KR before the open.  There are no reports scheduled for after the close.

The bulls have been showing a few cracks in their armor this week with the DIA and SPY both printing 4 lower closes and the QQQ now having printed 2 lower closes. However, the T-line (8ema) may still give the QQQ support as the massive high-tech names continue to do work for the bulls with the "buy the dip" outlook. Expect the PPI to impact futures later this morning and this may lead to some volatility early. However, also remember this is Friday, there will be a lot of 9/11 remembrances distracting traders and it has been a light-volume week with no major news (and a heavier news cycle coming next week). So, we may see more drifting on low volume today.

As always, manage your existing trades before you chase any new ones. Remember you don't have to trade every day. So, consider whether this market suits your trading style or not before blindly trading. Focus on the process and on managing the things you can control. Don't worry too much about the things outside of your control. Good trading rules and discipline is what separates long-term success from failure in trading. However, above all, consistently take profits when you have them. A good trader just won't let greed turn their winners into losers.


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

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🎯 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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