Wednesday saw economic news dampen markets as Retail Sales came in much lower than expected (largest drop since ’92), more big banks all had huge (oddly very close percentage-wise) misses, and the worst reading in NY Empire State Mfg. Index since 1946 led to a 2% gap down at the open.  After a volatile rally most of the day, all the major indices sold off the last hour.  As a result, the SPY closed down 2.12%, the DIA down 1.92%, and the tech-buoyed QQQ down just 1.15%.  All three posted indecisive candles with the QQQ being a Harami Spinning Top and the others Doji.  The VXX closed up 8% to 40.41 while the 10-year bond yield fell to 0.633% as investors chased Treasury safety.  Oil (WTI) was below $20 much of the day, but closed at $20.23/barrel on rumors the US government would cap US production by buying more oil for the national strategic reserve.

Meanwhile, in Michigan, there were crowds of unmasked, virus control opponents protesting the state’s stay-at-home order on Wednesday.  Two conservative groups had called the protest, but it was apparently adopted by others as a good number were also carrying rifles and protesting gun laws possibly among other things.  This follows a much smaller group (dozens) who held the same type of protest in Raleigh, North Carolina for an hour on Tuesday.  The point is that some groups are pushing (following the President’s lead, or maybe leading the President?) for an end to virus-control measures that they believe are hurting (the economy) worse than the virus is hurting people.  So far, this seems to be a politically-centric phenomenon but certainly bears notice as most still predict months or measures of some kind ahead.

After the close, Bloomberg reported that the small business Payroll Protection loan/grant fund ran out of money on Wednesday night.  The Treasury Dept. and the SBA have not announced statistics recently.  However, based on the applications processed by just 3 large banks (JPM, WFC, and C) and the SBA saying the average approved loan was $240,000, the math seems right.  At his daily rally, the President took the opportunity to blame the lack of replenishment funds (among other things) on Democrats.  He also reiterated that it was up to states to do the testing (but the Feds will help if needed) and said he expected states and municipalities to control their own borders to prevent cross-jurisdiction spread. If possible, that too would be a sizable economic obstacle.

In Germany, PM Merkel announced tentative steps to begin reopening its economy.  While most restrictions will stay in place until at least May 3^rd, some small shops (less than 8,500sq ft in size) will be allowed to open as soon as next week.  The timing of this announcement was a bit odd as coincidentally Germany reported a jump in new cases on the day.  In the UK, the cabinet is set to extend its nation-wide lockdown for at least 3 more weeks.  In Spain the death toll rose slightly again and the WHO noted that Europe has half the world’s infections (1 million+ cases and 84,000+ deaths) and is not out of the woods. In doing so, it recommended that any EU reopening goes slow to hopefully reduce the chance of more major outbreaks. 

On the virus front itself, the global headline virus numbers crossed 2 million as we now have 2,096,549 confirmed cases and 135,661 deaths.  At the same time, in the US we now have 644,348 confirmed cases and 28,554 deaths. 

Overnight, Asian markets were mixed, with Japan, Hong Kong, Australia down, while Chinese markets were up slightly.  In Europe, markets are slightly in the green across the board at this point in their day.  As of 7:30 am, US futures are pointing toward a small gap higher in front of the big economic news coming in an hour. 

Thursday’s major economic news includes Mar. Building Permits, Mar. Housing Starts, Mar. Philly Fed Mfg. Index, and Weekly Initial Jobless Claims (all at 8:30 am).  A Fed member (Williams) also speaks at 2pm.  Major earnings reports include ABT, BLK, BK, KEY, MS, NUE, and TSM all before the open.  ISRG reports after the close.

The uptrend remains in place, but volatility continues to be high and gaps have become the norm.  The economic reports at 8:30 am are likely to call the tune for markets today, especially the Initial Jobless Claims that estimates are putting at 5 million.  However, the unveiling of general reopening guidelines could lift markets, helping traders again look ahead past the short-term economic news. 

Regardless of what happens at the open, in this market, traders need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds).  Be very cautious on any swing trades you take.

Ed

No Swing Trade Ideas for your consideration and watchlist today. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs 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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