Tuesday saw another volatile day with a half percent gap higher followed by a roller coaster ride that traded in a 1.25% range before closing back just below the open.  The result was a high-wick Doji day that did nothing to break the downtrend.  On the day, SPY was up 0.38%, DIA up 0.35%, and QQQ up 0.21%.  The VXX was flat at 23.23 and T2122 rose a bit but remains firmly in the mid-range at 63.89.  10-year bond yields rose again to 0.791% and /Oil (WTI) rose a percent and a half to $41.51/barrel.

The main news on stimulus was positive during the day with House Speaker Pelosi saying a deal could come before day end and Senate Majority Leader McConnell saying that if a deal was reached, he would hold a vote in the Senate “at some point.”  However, Pelosi’s statement came before she had spoken to Treasury Sec. Mnuchin Tuesday and McConnell also said he was still doesn’t support a bigger deal and is doubtful that such a deal would pass the vote if he held one.  In the evening, White House Chief of Staff Meadows said more progress was made in negotiations, but big differences remain.

In other news, just before the open Tuesday, the US government sued GOOG over anti-trust violations.  In particular, they cite a deal GOOG struck with AAPL in 2018 to make Google the default search engine on all AAPL devices and software (Safari).  As a result, apparently almost half of all GOOG search traffic came from AAPL devices in 2019.  Emails filed with the case report that an AAPL senior executive wrote to GOOG saying their goal was for the two companies “to work as if they were on company.”  Of course, GOOG later released a statement saying the suit is deeply flawed and would hurt consumers by “artificially propping up” lower-quality search engines.

On the virus front, in the US the numbers show we now have 8,521,465 confirmed cases and 226,204 deaths.  After another day in excess of 62,000 cases, the 7-day average daily new case count has risen to 60,915/day, while the nearly 1,000 deaths did little to move the lagging daily average of deaths, which remains relatively flat at 759.  42 states are reporting an increase in Covid-19 hospitalizations as 20% of all hospitals nationally are reporting 80% or more of their ICU beds are full.  However, there are some parts of the country (those that locked down hardest early in the pandemic) that are now easing restrictions. This includes San Francisco, which has now opened non-essential office spaces and various indoor venues.

Globally, the numbers rose to 41,115,504 confirmed cases and the confirmed deaths are now at 1,130,693 deaths.  This includes the world seeing just under 400,000 new cases a day.  The good news is that global reported Covid deaths remain about 5,500 per day. In the UK, Manchester was forced to lock down based on the city’s spike in cases, but local authorities and even Tory party factions continue to rail against PM Johnson and the restrictions.  Cases also jumped again in Germany amidst talk of more restrictions from Chancellor Merkel.  The Czech Republic saw another all-time high in new cases, including their PM. 

Overnight, Asian markets were mixed yet again on modest moves both directions.  Hong Kong (+0.75%) led the gainers being boosted by airline shares soaring after an announcement of major layoffs (5,900) by Hong Kong based Cathay Pacific.  Meanwhile Shenzhen (-1.10%) and Malaysia (-1.23%) led the losses.  However, most of the Asian exchanges were split modestly on either side of break-even.  In Europe, markets are red across the board on pessimism over more US stimulus.  Among the big 3 bourses, the FTSE is down 1.13%, the DAX down 0.83%, and the CAC down 0.96%.  the rest of the continent’s exchanges are following the same pattern at this point in their day.  As of 7:30 am, US futures are relatively flat, all 3 showing -0.10% to -0.15% as of now. 

The major economic news for Wednesday is limited to Oil Inventories (10:30 am) and a pair of Fed speakers (Brainard at 8:50 am and Mester at 10 am).  However, major earnings reports include ABT, AAN, APH, AVY, BKR, BIIB, ERIC, IPG, KEY, KNX, LAD, NEE, NTRS, SLGN, TMO, and VZ before the open.  Then after the close, CMG, CCI, CSX, DFS, EW, EFX, FTI, GL, KMI, LRCX, MTH, TSLA, UFPI, WHR, and XLNX after the close.

With little news on the schedule, stimulus negotiations and the Senate vote on a much smaller PPP-only bill are likely to lead the news today. The virus continues to surge and the Presidential campaigns may slack off a bit today in preparation for Thursday’s debate. However, we have seen hope spring eternal for more stimulus and all we can be sure of is that volatility remains high. Of course, earnings remain the wildcard, with mixed but generally positive results reported so far against much-lowered expectations.

Continue to be careful and nimble in this whipping market. The short-term trend remains bearish and has broken the medium-term uptrend. However, all it takes is a whiff of a stimulus deal to turn the bulls loose. So, keep locking-in your profits and sticking to your trading rules. Don’t get too greedy, don’t chase the moves you have missed, and don’t predict. Be sure you respect potential support and resistance.  Follow the trend and trade your plan.

Ed

Swing Trade Ideas for your consideration and watchlist: RIOT, TWTR, FITB, BIDU, CARR, F, FCX, NIO. 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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