Markets gapped to all-time highs Monday on a combination of liking the Biden election victory and elation over the PFE / BTNX trial results.  However, after the record-breaking and massive gap higher, markets faded that gap all day, which left us with big ugly black candles in all 3 major indices.  The QQQ even printed a large Bearish Engulfing candle.  On the day, SPY closed up 1.26%, DIA up 3.00%, and QQQ down 2.04%.  VXX was down over 2% to 20.07 and T2122 remains deeply overbought at 91.39.  10-year bond yield made massive gains to 0.922% and Oil (WTI) gained 7.4% to $39.89/barrel.

Part of the day’s fade may have been related to realizing the PFE vaccine joy came on only preliminary data (94 cases), doesn’t include safety data yet, and the vaccine will not be widely available until Q2/Q3 (according to PFE Director Gottlieb).  However, another potential cause could be Senator McConnell saying that with a vaccine now in sight, maybe we don’t need as much stimulus.  CNBC also reported that with Senate runoff elections in January, it will be difficult for any deal to be done prior to those two seats being decided.

In miscellaneous business news, the EU has opened a second antitrust investigation of AMZN.  Meanwhile, BABA is getting set for its Singles Day holiday Wednesday and expects that the addition of live-streaming events will raise the one-day sales to $125 billion. For reference, retail industry researchers estimate US sales on Black Friday were $7.4 billion and Cyber Monday another $9.4 billion.

The virus continues its massive surge. Monday saw another 125,000+ day for new cases, but only 632 deaths.  Those numbers raised the 7-day average of new cases to 117,552 while the average of daily deaths is now 1,001/day.  In positive news, last night the FDA gave emergency use authorization to the LLY antibody product which shows promise for having dropped the number of recipients who later contract the virus from 6.3% to 1.6%.  LLY has a deal in place to provide 300,000 doses within 2 months of that approval.  NVAX also gained approval to begin a phase 3 trial of its own vaccine candidate.

Overnight, Asian markets were mixed, but mostly green.  China took the only hits, with Shenzhen (-1.05%), Shanghai (-0.40%), and Taiwan (-0.35%) all down.  Hong Kong (+1.10%) paced the gainers among major markets, but smaller markets were up significantly more.  In Europe, markets are mixed, but leaning red (mostly the smaller markets).  Among the 3 major bourses, FTSE is up 1.32%, CAC up 1.03%, and DAX flat at +0.15% at this point in their day. As of 7:45 am, US market futures are also mixed.  The DIA is pointing to a 0.71% gap higher, but the QQQ is pointing to a 1.51% gap down while the SPY is flat implying a -0.15% open.

The only major economic news for Tuesday is Sept. JOLTS (10 am) and a Fed speaker (Brainard at 5 pm).  Major earnings reports include ADNT, APD, APG, and GIB before the open.  Then after the close, ENS, HI, PTVE, REYN, SMICY, and SPTN report.

Volatility is likely to continue with the futures suggesting further unwind of the high-tech lockdown plays, but hope among the large-caps with a potentially effective vaccine on the horizon. Remember to not get caught up in moves you have missed. Fear of missing out (FOMO) is a deadly condition for traders. There will always be either another stock setup or the zig-zap motion of the market will bring the one you missed back when it consolidates. 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: RAD, WKHS, PSX, FOLD, OKE, MOMO. 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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