Large-caps gapped lower at the open and sold off all morning on Monday.  This gave way to a sideways grind near the lows most of the afternoon.  However, a late-day rally brought price up off the lows by the close.  Meanwhile, the QQQ followed the same pattern in the morning.  However, it rallied from 11 am all the way into the close to post a small gain on the day.  All 3 major indices printed indecisive Hammer or Hanging Man type candles for the day.  As of 4 pm, the SPY lost 0.40%, DIA lost 0.80%, and QQQ gained 0.20%.  It should be noted that the market closed the month of November with massive gains (35% in the large-caps).  The VXX fell almost 2% to 17.18 and T2122 (4-week New High/Low Ratio) fell a bit, but remains in overbought territory at 89.72.  10-year bond yields rose very slightly to 0.845% and Oil (WTI) fell a percent to $45.09/barrel.

AMZN followed up on what retail industry analysts reported Monday.  They said that so far, this year’s holiday shopping has been the biggest period in their history.  Analysts went on to say they think AMZN could capture as much as 42% of all buying over the holiday (obviously a massive number).  By comparison, retail foot traffic was down 52% this year on the Black Friday weekend.

In European news, PFE and BNTX have filed for European approval of their vaccine.  Meanwhile the Euro Zone has agreed to strengthen its virus crisis fund, which CNBC reports has been a long-awaited move to address investor concerns.  The move increases the role the fund will play in designing the bailout programs needed in member countries.  This is more in-line with the Northern (i.e. Germany, Austria) fiscal conservatism and less in-line with the Southern (i.e. Italy, Greece) high-debt government.  The fund will be taking over the arbiter role previously played by the EC, ECB, and IMF.

On the virus front itself, infections continue to rage as the US.  The totals have risen to 13,920,038 confirmed cases and 274,332 deaths.  That said, the 7-day average of new cases fell to 162,853 while deaths are averaging deaths rise to 1,517/day.  HHS Sec. Azar said Monday that, assuming no hitches, the first US vaccinations could come by Christmas.  Dr. Fauci (NIH) told CNN he is urging Americans to be ready and to get vaccinated as soon as the vaccine is available to their priority group and region.  He went on to explain that if we can get 80% or more of the country vaccinated, we can achieve herd immunity and get back to normal by Q2 or Q3 of 2021.  However, if only 40%-50% of the population get vaccinated, we will not and restrictions and mitigation will still be needed.

Overnight, Asian markets were green across the board.  Malaysia (+2.53%), Shanghai (+1.77%), and South Korea (+1.66%) led the way, but it was a strong showing throughout the region.  In Europe, markets are mostly green so far today.  The FTSE (+1.91%) is leading, but the DAX (+0.92%), and CAC (+1.02%) are also strong.  The only red on the continent is in smaller exchanges like Denmark (-0.26%) and Portugal (-0.21%).  As of 7:30 am, US futures are pointing to a gap higher at the open.  The DIA is implying a gain of 1.02%, the SPY a gain of 0.98%, and the QQQ a gain of 0.89% at this point.

The major economic news for Tuesday is limited to Nov. Mfg. PMI (9:45 am), Nov. ISM Mfg. PMI (10 am), and two Fed speakers (Chai Powell at 10 am and Brainard at noon).  Major earnings reports on the day are limited to BMO, BNS, and MOMO before the open.  Then after the close HPE, LU, NTAP, CRM, and TCOM report.

The bulls seem to want to get December off to a strong start. With little economic news or earnings reports, the market may be in a position to move. However, also expect sector-specific strength or weakness. For example, the recent news does not bode well for retailers, while online commerce plays may be very strong in this environment.

Once again, we sit at or near all-time highs and the market remains very overextended by most counts. However, as we all know, it doesn’t pay to fight the trend (even when it seems overdone). So, don’t predict. As always, respect the trend, support/resistance, and price action. Don’t chase moves you have missed (there will be another opportunity) and maintain discipline to your trading rules. Keep booking those singles and doubles. Leave “swinging for the fence” to the amateurs. Profits pay the bills, not bragging rights.

Ed

Swing Trade Ideas for your consideration and watchlist: SONO, AAPL, ALGN, FAST, MRVL, TXN, GLW, FSLY, PINS, DKNG, WMT. 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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