Friday was a rest day for markets after an extremely hard rally all week.  All 3 major indices printed indecisive Doji or Spinning Top type candles. With little change from the Thursday close.  On the day SPY was flat at down 0.02%, QQQ was flat at up 0.07%, and DIA was the “big mover” at -0.24%.  VXX lost almost another 7% to 20.52 and the T2122 4-week New High/Low Ratio fell back to mid-range at 68.11.  10-year bond yields spiked to 0.822% and Oil (WTI) lost another 3.5% to $37.40/barrel.  As said, on the week QQQ was up 9.37%, SPY up 7.23%, and DIA up 6.85% in what was the best week for stocks since April.

Over the weekend, the election results became clearer with the majority of the country recognizing a Biden victory.  President Trump refuses to accept this outcome and will continue lawsuits in hopes that recounts and the courts will reverse or nullify apparent results.  Up to this point, markets seem to like the idea of a split government with the Administration, Senate and House in different party’s hands.  However, January runoff elections for two Georgia Senate seats leave a little bit of uncertainty about this apparent split government scenario.  Nonetheless, assuming GOP victory in at least one Georgia Senate seat, prospects of a “blue wave” leading to major tax changes now seems off the table.  So, the next thing that the market needs to figure out is what these election results will mean for a stimulus package either in a lame duck session or late January.

However, the main market news at this point of the morning was an early morning announcement by PFE and BNTX that their vaccine candidate is more than 90% effective at preventing infection 7 days after a second dose is administered (28 days after initial dose).  There is no data available yet on short-term side effects, long-term health risks, or how long the protection will last.  Nonetheless, this is a major step, and markets absolutely love what they hear so far Monday.

The virus is raging all across the country.  Friday, we had yet another record high of well over 132,000 new cases and even the normally lower weekend numbers remained in the mid-120,000s.  In total, the numbers show we have had 10,292,492 confirmed cases and 243,771 deaths.  This includes 42 states with at least a 10% increase in avg. daily new case counts since last week (30 reporting a record high), 8 holding steady, and none falling. This record surge has raised the 7-day average of new cases to 111,226 while the average of daily deaths to 979/day. 

Globally, the numbers rose to 50,856,631 confirmed cases and the confirmed deaths are now at 1,263,784 deaths.  Global record days on Friday and Saturday have led the 7-day average of new cases is 550,046 while the 7-day average virus deaths are 7,759/day. Obviously, this means more restrictions, lockdowns, and economic trouble, especially throughout Europe.  Frankly, that should be in the cards again in the US but that does not seem to mesh with the desires of the administration.

Overnight, Asian markets were green across the board on the last-minute news of an effective vaccine from PFE/BTNX.  mixed, but mostly green.  Shenzhen (+2.25%) and Japan (+2.12%) led the rally, but the strength was wide-spread.  In Europe, markets are even stronger as they have had more time to react to the news.  At mid-day, the CAC (+6.41%), DAX (+5.31%), and FTSE (+4.48%) are all screaming higher.  However, again the rally is widespread, with only small pockets of under-reaction like Denmark (+0.36%) so far today.  As of 7:30 am US futures are also pointing to major gaps higher at the open.  The DIA is implying a +5.06% gain, the SPY implying a 3.66% gain, and the lockdown technology-heavy QQQ implying only a 0.80% gain at this point.

The only major economic news for Monday are 2 Fed speakers (Harker and 12:20 pm and Mester at 1:30 pm).   Major earnings reports include BRKB, HWM, MCD, SPG, and TGNA.  Then, after the close IFF, NGL, and OXY report.

The virus, an effective vaccine, hope for more stimulus, and reduced fear of major changes from a split government have combined to make a very positive if volatile, environment for markets.  Remember that gaps are gifts and very strong news is almost always tempered by a second thought at least in the short-term.  Markets move in the zig-zap motion the vast majority of the time.

It looks like a screaming open today.  You will be very tempted to chase, but unless you are already in, strongly consider waiting for some consolidation or pullback.  Keep locking in profits and maintain your discipline.  Stick to your rules, follow the trend, and don’t chase the moves you have missed. 

Ed

Swing Trade Ideas for your consideration and watchlist: STAA, UPWK, CDAY, AAPL, SLV, GLD, SWBI. 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service