ADP Job Loss Numbers for May came in better than expected and that was all the bulls needed to control the market on the day.  We saw a 0.70% gap higher at the open and steady follow-through until the last 10 minutes of the day, when minor profit-taking caused us to close off the high.  On the day the SPY gained 1.30%, the DIA gained 2.06%, and the QQQ gained a mild 0.45%.  In all 3 cases, the bears could at least make a case that resistance is temporarily holding (all-time highs in the case of the QQQ), but there is no doubting who is in-charge in the marketplace.  VXX closed down to 31.11 and T2122 is even higher than the prior close at 97.98.  10-yr. bond yields rose to 0.751% and shockingly Oil (WTI) closed basically flat at $36.72/barrel.

During the day the next step in US-China tensions (trade war fear) took place as the US banned Chinese passenger airlines from flying to US destinations.  This is a tit-for-tat response to China’s ban of US airlines (DAL and UAL), which was itself a response to US moves in reaction to the Hong Kong Security Law situation. 

In business news, the CEO of PPC and executives of a smaller chicken producer (Claxton Poultry) were indicted for poultry price-fixing on Wednesday afternoon.   PPC stock was hammered as a result and the impact spilled over into TSN, which had no executives named in the indictments.

On the Virus front itself, the global headline numbers are 6,596,713 confirmed cases and 388,424 deaths.  In Europe, the ECB is set to increase stimulus (buying Euro country bonds) as and when the economic impact numbers dictate according to the ECB President.  Mexico has overtaken the US in terms of new daily cases of the virus, which is worrying for a country with far less than half the population and much less medical infrastructure.

In the US, we have 1,902,101 confirmed cases and 109,146 deaths reported to date. New cases in the state of TX were reported to be rising, now at +2.6% for the week.  In fact, new case numbers are rising again across the South (with Louisiana being an interesting exception).  DAL also announced it will cap plan capacity at 60% of pre-virus levels through September.  However, on the positive side, GM announced they will be at pre-virus vehicle production rates by the end of June.  Las Vegas has also opened its casinos and hotels at 50% capacity again as of today.

Overnight, Asian markets were mixed, but mostly green again.  However, European stocks are red across the board as of midday.  (The FTSE rebalanced the members of its indexes, which may have some impact in the UK.)  It is also worth noting that both Saudi Arabia and Russia are not backing away from production cuts previously announced now that oil demand has risen again. At 7:30 am, US futures are also pointing to a gap lower of 0.3%-0.5%.  

Thursday’s major economic news includes Apr. Imports/Exports, Initial Jobless Claims, Q1 Nonfarm Productivity, Apr. Trade Balance, and Q1 Unit Labor Cost (all at 8:30 am).  Major earnings reports are limited to CIEN, GIII, MIK, NAV, SJM, and TTC before the open.  Then after the close AVGO, CAL, COO, GPS, RH, and SAIC all report.

The bulls are still in control, but resistance and extension are very real at this point.  After an impressive 4-day run-up, a pause may be in the cards.  However, the trend and momentum are both in the bull’s favor.  Even protest tensions have eased as the non-peaceful episodes have died out.  Continue to stay focused on the short-term chart and don’t hesitate to lock in profits.  However, don’t bet against the trend unless you’re doing it to hedge.  Above all, don’t chase or predict.

Ed

Trade ideas for your watchlist and consideration. BA, MGM, WYNN, DRI, ERI, JPM, OIH, ORCL. Trade your plan, take profits along the way, and smart. 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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