Markets gapped higher on hopes that a vaccine will have some sort of preliminary data from a small human safety trial in July.  From there markets ground and faded the rest of the day, maybe on news of another ratcheting of tension between the US and China.  Although reported over the weekend, Tuesday afternoon news that the White House is considering specific sanctions on China, which preceded the late-day fade.  The SPY closed up 1.23%, the DIA up 2.19%, and the QQQ printed an ugly big black candle to close down 0.27% after its almost 2% gap higher to open.  The VXX closed down slightly to 33.83 and T2122 rose again to the nose-bleed area at 96.32.  10-year bond yield rose to 0.695% and Oil (WTI) rose to $34.25/barrel.

During the afternoon Senate Majority Leader McConnell said Congress will “probably” need to pass another coronavirus relief bill.  This comes after 10 days of declaring the Democrats bill DOA.  Among key Republican demands are liability immunity for those businesses whose workers contract coronavirus at work.  McConnell’s statement falls in-line with President Trump acknowledging the need for another round of stimulus.

On the Virus front, the global headline numbers are 5,709,551 confirmed cases and 352,753 deaths.  In China, the city of Wuhan has completed 6.5 million tests in 9 days as fear of a second wave in the city are being taken seriously.  Meanwhile, in Europe, France announced a $9 billion fund to aid its auto industry.  Germany also extended their social distancing rules through June, but reduced travel restrictions to many countries at the same time.  The EU unveiled the French/German plan to borrow $827 billion for a recovery fund to lend member states.  This is in addition to the original bailout program which still has $600 billion of unemployment, loan and investment funds available.

In the US, we have 1,725,808 confirmed cases and have broken the 100k level in deaths with 100,625 reported to date.  F was forced to pause production at a Kansas City plant after another employee was diagnosed and a “deep cleaning” of the plant must be done.  CA also announced after the close that it will allow barbershops to open in most counties.  On the other side of the country NY Governor Cuomo said they will move forward infrastructure projects like subway expansion, Train Station redesign, etc. in an effort to stimulate the economy.

Overnight, Asian markets were mixed, but tended to be closer to flat except for a very green India.  Europe also shows a little red, but in general is leaning heavily to the green side, especially in the three major bourses (FTSE, CAC and DAX), which are up 1.5-2%.  As of 7:30 am, US futures are also pointing to a mixed gap higher at the open (QQQ 0.7%, SPY 1.4% and DIA 1.65%).

Major economic news on Wednesday is limited to an FOMC Speaker (Bullard at 12:30 pm) and the Fed Beige Book (2 pm).  Major earnings reports are also limited to RL and VIPS reporting before the open.  Then ADSK, HPQ, NTAP, SPTN, TOL, and WDAY report after the close.

It seems the bulls are very hopeful about the economic recovery.  So, we could see them run again today.  However, don’t forget yesterday’s gap was met with a selling fade (especially in the QQQ).  So, “gap and chop” remains real.  Keep your eye on the short-term chart and don’t hesitate to lock in profits.  Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

Ed

Trade ideas for your watchlist and consideration: M, NIO, UAL, DUST, DXC, UCO, CBOE, BP. 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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