Markets saw a significant gap higher at the open Thursday on renewed hopes for a new stimulus deal.  However, we then faded that gap and started a roller-coaster day bouncing between the prior close and that cap-up open.  In the end, this gave us indecisive Doji or Spinning Top candles in all 3 major indices.  On the day, QQQ (led by those huge FAANGM stocks) closed up 1.59%, SPY up 0.64%, and DIA up 0.23%.  VXX was basically flat at 25.01 and the T2122 (4-week New High/Low Ratio) remains in the mid-range at 53.55.  10-year bond yields were also flat at 0.679% and Oil (WTI) fell 4% to $38.58/barrel.

Despite the pre-market optimism Thursday, House Speaker Pelosi and Treasury Sec. Mnuchin were unable to reach a deal on more stimulus.  This as the airline industry laid off 45,000 workers (more than the 32,000 threatened), but said they would rehire them if aa new $25 billion relief program is passed.  In addition, reports surfaced saying the expiration of the $600 Enhanced Unemployment Payments has already begun causing a drag on the economy in terms of reduced personal expenditures.  And more Fed speakers also echoed prior FOMC comments that more stimulus is needed.  While no deal was reached Thursday, the House did pass another $2.2 Trillion stimulus bill, but again Senate Republicans are likely to not even consider the bill (2^nd since May). Nonetheless, Speaker Pelosi told reporters that talks would continue today.

The (strangely) bi-partisan House Antitrust Committee completed its seventh and final hearing on antitrust actions by AAPL, AMZN, GOOG, and FB.  A report will now be written and reviewed by committee members for at least several days.  The themes seem to be increased staffing and funding for enforcement agencies, reversing court decisions that have over-ridden Congressional anti-trust intentions, shifting the burden to companies to prove that mergers were not anti-competitive, and prohibiting “anti-discriminatory” behaviors by companies.  No specifics have yet been leaked on potential legislative remedies.

On the virus front, in the US, the numbers show we now have 7,497,256 confirmed cases and 212,694 deaths.  The 7-day average daily new case count is back up to 42,952, while the 7-day average of deaths remains 731.  This includes 30 states with increasing new case counts.  Of course, the big US virus news today is that the President, First Lady, and close Trump Aide Hicks all tested positive and are now in quarantine.  Their health is not an issue since they have the best healthcare possible for treating them.  However, the image is important. In other virus news, AMZN reports that just under 20,000 of their employees have contracted Covid-19 so far (but for reference they have 1.37 million employees.  So, compared to the general public, that 20,000 number is a bit over 40% less than expected.) CNBC also reported that vaccine trial participants (for PFE and MRNA candidates) have reported intense side-effects (fever, head/body aches, and exhaustion), but that those symptoms have only lasted a day on average.  However, this was based on a minuscule sample of only 5 test subjects.

Globally, the numbers rose to 34,529,418 confirmed cases and the confirmed deaths are now at 1,028,517 deaths. (An increase of about 328,000 cases and 8,934 deaths.)  Italy reported the highest increase in new cases since April on Thursday.  However, following the President’s test results, no more international virus headlines were reported.

Overnight, Asian markets were mixed.  Australia (-1.39%), Japan (-0.67%), Thailand (-0.81%) and Indonesia (-0.87%) paced the losers.  Meanwhile, South Korea (+0.86%), Hong Kong (+0.79%), and India (+1.51%) paced gainers.  In Europe, markets are red across the board, perhaps in reaction to the positive tests at the White House.  Among the big 3 bourses, the DAX is down 0.96%, CAC down 0.87%, and FTSE off 0.67%.  These are typical for other European markets although some of the smaller markets like Russia, Sweden and Portugal are down significantly more due to their own outbreaks.   As of 7:30am, US futures are following Europe.  We are looking at implied gap downs of about 1.4% in the large-cap indices and 2% in the tech-heavy Nasdaq.

The major economic news for Friday includes Sept. Nonfarm Payrolls, Sept. Avg. Hourly Earnings, and Sept. Unemployment Rate (all at 8:30 am), Michigan Consumer Sentiment (10 am), and a Fed speaker (Harker at 9 am).  There are no earnings reports scheduled for Friday.

Prior to the President’s diagnosis, the last Jobs Report before the November election was anticipated to drive markets this morning.  Pre-report consensus expects the report to show a slowing, but continuing recovery of the jobs lost since March.  However, now that there has been a Covid-19 positive, the news cycles and market mindshare are likely to be dominated by that and whether the White House adheres to CDC guidelines on the quarantine and post-positive precautions. That said, the market is prone to over-reaction followed by snap-backs, has a short attention span, and historically-speaking no person (including the President) has tended to have long-term impacts on the market.

After Thursday’s “gap and indecision,” we would normally like to see which way the market breaks. Today’s situation makes that less of a chart-based follow-up. So, be cautious, small, and quick in your trading until we get a read on the trend. Stick to your discipline. Don’t try to predict, chase moves that got away, or abandon your trade plans. Follow the trend and keep locking in profits and reducing risk. Also, regardless of theWhite House situation, today is Friday. So consider whether you want to lighten up over the long news cycle. Among the things we don’t know are what will happen on last-ditch stimulus talks (even though the Senate already left town for a long weekend) and how the situation may impact the President’s tweeting. He may have more time for it now, which is just to say it is an unknown and potential for more market-moving “news.”

Ed

There are no trade ideas today. Members can come to the trading room to see what we look at once things settle, but its too volatile to plan trades in front of the initial over reaction and snap back. 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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