Stocks gapped more than a percent higher (2% in the QQQ) on Wednesday.  They then followed-through in the morning before grinding sideways until late-day selling closed all 3 major indices well off their highs.  On the day QQQ gained 2.94%, SPY gained 1.97%, and DIA gained 1.61%.  The VXX fell hard to 26.83 and T2122 climbed out of the oversold range up to 31.21.  10-year bond yields rose a bit to 0.698% and Oil (WTI) rose nearly 3% to $37.78/barrel.

CNBC reported that several economists have told them that $3 trillion of additional fiscal stimulus is needed to support the economy.  The economist interviewed said those funds should be used to incentivize remote working and help the unemployed.  At the same time in Congress, the Senate Republicans plan to vote on just $500 billion (Democrats say it will not pass) while the talks between the Administration and House Speaker Pelosi’s team are still stalled with the GOP side at $1 trillion and the Democrat side at $2 billion.

In the UK, PM Johnson is feeling great pressure after admitting there will very likely be no trade deal before the year end Brexit deadline.  Yesterday he proposed UK legislation that would break the withdrawal agreement (and other international trade agreements), by taking control over Irish, Scottish and Welsh foreign trade.  This was probably an attempt to use Ireland/Northern Ireland as negotiation leverage.  However, the act does jeopardize the UK-US trade agreement as well as the status of many global companies at risk as well.

On the virus front, in the US, the numbers show we now have 6,549,771 confirmed cases and 195,245 deaths.  The 7-day average of new cases has fallen to 37,248.  Meanwhile, deaths rose sharply to 1,209, well above the 7-day average of 753.  The Federal government has decided to drop testing for incoming International travelers.  

Globally, the numbers rose to 28,056,120 confirmed cases and 908,651 deaths.  In a surprising story, AZN says it should know by year-end if its vaccine trial can restart. This is potentially a much longer delay than markets had anticipated.  The Intl. Air Cargo Assn. reported overnight that even ignoring the temperature demands I reported yesterday, the world will still need 8,000 cargo jets the size of a BA 747 to distribute even a single dose of a vaccine worldwide.  (Of course, all the current vaccine candidates require 2 doses and it is undetermined how long that set of vaccinations would provide protection.)  In Europe cases continue to climb as France says they cannot rule out the need for more local lockdowns (although they will resist another national lockdown).  Meanwhile in Asia, India reported more than 95,000 new cases on the day and places like Indonesia have put the brakes on easing.

Overnight, Asian markets were mixed with Shenzhen down over 2% while Japan and South Korea were up about 0.88%.  In Europe, so far today markets are mostly in the red, led to the downside by the FTSE after the UK’s Trade news.  In the US, at 7:30 am, the futures are pointing modestly to the downside with large-caps looking toward a half-percent gap down and the QQQ a gap 0.20% open lower.

The only major economic news for Thursday is Aug. PPI and Weekly Jobless Claims (both at 8:30 am).  The only major earnings reports on the day come after the close when AMRK, CHWY, and ORCL report.

The bulls had a nice day Wednesday.  However, markets closed well off their highs and so far this week, all we are showing is a lower-high. So be careful getting to long on the “buy the dip” sentiment that has surrounded markets for some time.  We are swing traders, not long-term holders and currently the short-term trend is still down.  So, follow the trend, but don’t chase moves you have missed.  Stick with your rules and work to consistently lock-in profits and reduce risk. 

Ed

Trade ideas for Thursday: PENN, OTRK, GOLD, ETSY, DDOG, W, OSTK, PDD, GLW. 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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