Thursday was an indecisive, up-and-down day that started with a tiny gap down in the large-caps and tiny gap up in the QQQ.  This came after a better than expected Initial Jobless Claims report that came in just under 1 million new claims.  However, after the roller coaster ride, markets closed very near where they opened, putting in a Doji candle in all 3 major indices.  On the day, QQQ closed up 0.23%, SPY down 0.19%, and DIA down 0.22%.  VXX was also flat at 25.51 and T2122 fell just outside the overbought territory at 78.57.  10-year bond yields were up strongly to 0.717% after the big afternoon bond sale and Oil (WTI) closed down a touch to $42.36/barrel.

As has been the case, there was no progress between Democrats and the White House on a stimulus bill.  Senate Majority Leader McConnell adjourned the Senate for the “August Recess.”  This followed the House having already adjourned, but the Senate did not even give the caveat House Speaker Pelosi had given of “Adjourned Pending a deal on a Stimulus Bill.”  This means a deal is very unlikely for weeks to come as both sides (Congressional and Administration) will be much more focused on conventions and politicking than governing for at least the next few weeks. 

In an interesting after-hours story, Fed Governor Brainard said the Boston Fed has been experimenting with a cryptocurrency in collaboration with MIT.  The multi-year project will focus on digital currency.  This seems a direct reaction to FB proposing (and then abandoning) its own alternative to Bitcoin in 2019.  Brainard said that no decision has been made yet on whether to create the new cryptocurrency.  However, programmers working for the Cleveland, Dallas, and New York Federal Reserve banks are collaborating on a study of implementations and implications of this technology.  So, it certainly appears to be headed that way.

On the virus front, in the US, the numbers show we now have 5,416,014 confirmed cases and 170,422 deaths.  The news cases Thursday were 54,364, which is just under the 7-day average.  The daily deaths fell a bit to 1,284, but still well above the 7-day average.  In the afternoon, Dr. Fauci said that he was not pleased with how things are going. (Specifically, he said he was disturbed by the increase in positive test rates in states like OH, KY, IN, and TN.)  However, he also said we need to think about returning to a sense of normalcy, but do so while social distancing and wearing masks.   On that topic, GA Governor Kemp dropped his non-starter lawsuit against Atlanta Mayor Bottoms mask mandate.  

Globally, the number of cases rose to 21,100,844 confirmed cases and 758,012 deaths.  In Europe, the EU closed a deal with AstaZeneca to buy 300 million doses of vaccine at an undisclosed price.  In the UK, they reinstituted travel restrictions (quarantine for incoming passengers from France, Malta, or the Netherlands).  This comes as France declared the cities of Paris and Marseilles as “areas of active virus circulation.”  In Asia Hong Kong reported a 9% contraction of their economy for Q2 and said they expect the overall year to see a 6%-8% contraction versus 2019.  (Given riots and a pandemic, that isn’t exactly shabby…if valid numbers).

Overnight, Asian markets were again mixed, but also more volatile.  China led the 1% gainers, while South Korea India, and Thailand led those losing over 1%.  However, in Europe we see red across the board so far today on the UK travel restrictions.  The FTSE and CAC are down 1.755% apiece, the DAX down 1.04% and the rest of Europe down between 0.75% and 1.50% so far Friday.  In the US, as of 7:30 am futures are mixed, but leaning red.  The QQQ is pointing to a 0.13% gain at the open while both large cap indices are pointing to about a 0.32% fall at the open. 

The major economic news for Friday includes July Retail Sales and Q2 Nonfarm Productivity (both at 8:30 am), July Industrial Production (9:15 am), and July Business Inventories, Mich. Consumer Expectations and June Retail Inventories (all 3 at 10 am).  There are no major earnings reports on the day.

The SPY still sits just below its all-time high.  It still seems likely the bulls won’t give in to the bears before they reach that goal of new highs.  However, markets do seem hesitant as politicians of all stripes have given up on a stimulus deal for now and more economists are predicting slower recovery in Q3 and Q4 than seen in Q2.  So, be a bit careful betting either direction in the short run here.

All we can do is either lighten up positions, tighten up stops or pay extra attention to any trend reversal.  Follow the trend, don’t over-extend and stick to your trading rules.  Don’t try to predict reversals or chase moves you have missed, and take those profits as you go.  Remember, our job is to be consistently profitable, not get rich in a few months.  Also, bear in mind its Friday…of the political silly season.  I might be wise to lighten up on your risk before the weekend news cycles.

Ed

The Daily Swing Trade Ideas for today: PAGS, XLU, RIOT, SLV, ENPH, WU, CL, CDE, HL, NLOK. 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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