Wednesday saw a major gap up and some follow-through on relief that the election was behind us.  The tech-heavy QQQ that has led the way with a gap-up of almost 3.2%.  However, the election has not been concluded as counting continues.  Perhaps it was that uncertainty led to a selloff that lasted all afternoon left large upper wicks in the major indices.  On the day QQQ gained 4.46%, SPY gained 2.23%, and DIA gained 1.41%.  The VXX was down almost 9% to 22.35 and T2122 fell back out of the over-bought territory to 67.48.  10-year bond yields fell to 0.771% and Oil (WTI) gained almost 4% to $39.13/barrel.

The election continues to be the main news.  While absentee ballot counting, recounts, and several lawsuits remain to play out, it is now looking like a split government in January.  That would greatly impact the ability of a Democratic President to enact their agenda.  It would also likely impact the amount and type of stimulus.  Nonetheless, regardless of the Presidential election outcome, Senate Majority Leader McConnell has said that stimulus will be the main priority the remainder of this year, but unless something has changed the current Senate objects to anything more than small stimulus, while the market expects a large amount.  This all may feed into what the Fed does and says this afternoon.

On the virus front, we had yet another record high of new cases Wednesday with 108,389.  The numbers show we now have 9,802,374 confirmed cases and 239,842 deaths.  The 7-day average of new cases has reached a record of over 92,702 while another 1,200-death day raised the average daily deaths to 894/day.  Even with this a significant proportion of American society refuse to mask, maintain social distance or make additional efforts to wash/disinfect.  However, in good news, experts expect any new lockdowns will help lessen the impact of flu season which is also now on us.  A single test to identify both Covid and the flu has also been developed.

Globally, the numbers rose to 48,561,473 confirmed cases and the confirmed deaths are now at 1,232,955 deaths.  The 7-day average of new cases is 516,520 while the 7-day average virus deaths is 7,111/day.  Several more European countries reported new record-high new case counts Wednesday, including UK, Germany, France, Poland, Czech Republic, and Russia.  Meanwhile, new national lockdowns took effect in the UK and Germany as Italy and Spain both expanded regional quarantines.  In Asia, a third-wave of cases has started in India and South Korea has implemented new restrictions in one province.

Overnight, Asian markets were green across the board.  Hong Kong (+3.25%), Thailand (+3.43%), and Indonesia (+3.04%) were the big winners, but all major Asian indices were up well over 1%.  In Europe, markets are slightly more mixed, but lean heavily to the upside so far today. The FTSE (+0.23%), CAC (+0.92%), and DAX (+1.48%) are all green with Russia (+2.21%) and Denmark (+2.24%) leading gainers.  The only three countries in the red are Greece, Belgium, and Norway.  As of 7:30am US futures are also pointing to a very positive open.  The DIA is implying a +1.35% open, the SPY implying a +1.73% open, and the QQQ implying a +2.58% gain at the open.

The major economic news for Thursday includes Initial Weekly Jobless Claims, Q3 Nonfarm Productivity, and Q3 Unit Labor Costs (all at 8:30 am), a Fed Rate Decision and Statement (2 pm) and the FOMC Press Conference (2:30 pm).  Major earnings reports include BABA, ABC, ARNC, AZN, AAWW, BLL, GOLD, BCE, BDX, BMY, CNQ, CAH, CNP, CI, CNHI, COMM, CORE, XRAY, DISCA, D, DUK, GM, GLP, HBI, HFC, HII, IRM, KELYA, NXST, NTDOY, ODP, PH, REGN, REZI, TRGP, TEVA, THS, VMC, WCC, WRK, and ZTS all report before the open.  Then after the close ADT, AEE, AIG, BKNG, BFH, CZR, CNDT, ED, BAP, CWK, DXC, EOG, FLS, HLF, MTD, MNST, NWSA, PBA, PFSI, RGA, RSG, SRE, SWX, SQ, TMUS, TDS, TSE, UBER, USM, and XPO report.

As the election count winds down, markets are loving the certainty that will bring. The market seems to believe that protracted lawsuits will not have an effect on future direction. Stimulus, the virus, and earnings are back at center stage now. Just be aware that the Fed does have a limit to what they can do this afternoon, but certainly nobody is expecting any tightening or ending of Fed bailout loan programs. So, while short-term volatility in likely to continue, the market seems happy to have the election (mostly) in the rearview mirror.

Remember to follow your rules and maintain discipline, Take your money when you reach goals and don’t let profits evaporate waiting to bag “just a little more.” Follow the trend, don’t chase moves you have missed and respect both support/resistance and your stops. (Bear in mind that a $100 loss looks great when you now have a $1000 loss.) 

Ed

Swing Trade Ideas for your consideration and watchlist: AAPL, ENPH, ABBV, MSFT, RIG, FAS, IDXX, DVN. 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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