Markets gapped up about four-tenths of a percent on increased hope for a stimulus deal.  However, they immediately began slowly selling off the rest of the morning before slowly rallying all afternoon.  At the end, prices closed about where they opened leaving indecisive, Doji-type candles.  On the day SPY closed up 0.34%, QQQ, up 0.20%, and DIA down 0.11%.  The VXX was flat at 22.17 and T2122 rose further into the overbought territory to 89.43.  10-year bond yields were down just slightly to 0.841% and Oil (WTI) fell 2% to $39.78.  On the week, all 3 major indices had their first down week since mid-September.

On the stimulus front, talks broke down again Friday afternoon and over the weekend the blame game resumed, both sides claiming the other is moving the goalposts.  In addition, the likelihood of progress on a deal at least early in the week is little as the ACB confirmation process and last-minute politicking has retaken center stage in Washington.

In business news, DNKN reported Sunday it is close to a deal with Inspire Brands (owner of Arby’s, Sonic, and Buffalo Wild Wings) to take the company private for $106.50/share).  AAL announced that they will be holding “customer tours” and “Pilot conference calls” in the coming weeks in order to increase public confidence in the use of the troubles BA 737 Max plane.  AAL said they are tentatively expecting the FAA to lift the 737 Max flight ban in the US sometime in mid-November and expects to hold its first flight on the plane on December 29. Finally, China is sanctioning BA and RTX over arms sales to Taiwan.

The virus is raging across the US, even as many continue to downplay the need and/or usefulness of containment measures.  Over the weekend and White House Chief of Staff Meadows flat out stated “we’re not going to control the virus” (brushing off the recommended mitigation methods apparently in favor of economic growth). The country posted a record-high number of cases both Friday and Saturday.  At the same time, 24 states reported single-day new case highs at least once in the last 7 days, 35 states report case counts increasing more than 10% (on a 7-day average basis versus a week ago), and 31 states are in the White House Task Force’s “Red Zone” (having more than 100 cases per 100k of their population).  The case numbers show we now have 8,889,577 confirmed cases and 230,510 deaths with a 7-day average daily new case count have risen to 68,951/day, while the average daily deaths also ticked up to 818.

Globally, the numbers rose to 43,405,696 confirmed cases and the confirmed deaths are now at 1,159,835 deaths.  This includes the world seeing over 428,000 new cases Sunday with a 7-day average about 418,000.  Global Covid deaths rose by nearly 6,000 on the day.  European numbers are surging as governments continue with the least possible impactful responses such as Spain implementing an 11pm to 6am curfew.  However, in good news, AZN reported Monday that its vaccine candidate does produce a similar immune response to virus exposure.  While adverse responses to the vaccine were seen, those responses were lower than catching the virus itself, which is obviously a good thing.

Overnight, Asian markets were mixed, but leaned to the red again.  India (-1.36%) and Shanghai (-0.82%) led the losses, while Hong Kong (+0.54%) and Shenzhen (+0.52%) led gainers.  In Europe, markets are solidly red across the board as the virus surges throughout Europe and the US. Among the big 3 bourses, the DAX is down 2.09%, the CAC down 0.40%, and the FTSE relatively flat at down 0.10% at this point in their day.  The rest of the European Exchanges are down roughly a half to one percent.  As of 7:30 am, US futures are pointing to a gap down at the open. The large-cap indices are both down 0.85%, with the QQQ showing the least weakness at -0.63% as of now. 

The only major economic news for Monday is Sept. New Home Sales (10 am).  Major earnings on the day include HAS, HCA, OTIS, and SAP before the open.  Then after the close, AMKR, CE, CINF, GOOG, GOOGL, NOV, NXPI, and PKG report.

With the Senate locked on ACB Confirmation debate and votes and the Speaker of the House and the President’s Negotiators back to casting blame, stimulus will have to take a back seat for at least a day or two. (Of course, this is also the stretch run of the election. So, all politicians also have things they’d rather focus on than the people’s business right now.) So, the major recent market driver (hope for more stimulus) remains in limbo and there are no other obvious drivers for the day.

It looks like a red open, but still in the range of the last week’s candles. The short-term trend remains bearish and has broken the medium-term uptrend. However, it looks like we may have found some support close below. Just remember that while unlikely today, even a whiff of a stimulus deal would likely turn the bulls loose. So, keep locking-in your profits and sticking to your trading rules. Don’t get greedy, don’t chase the moves you have missed, and don’t predict. Be sure that you respect potential support and resistance.  Follow the trend and trade your plan.

Ed

Swing Trade Ideas for your consideration and watchlist: RIOT, BLL, FTCH, FB, FCX, FITB, NIO, TLRY, M, GNUS, MARK, YY. 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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