On Monday the large-caps gave us a small gap down, followed by an indecisive, Doji type candle day.  The DIA was a Doji Bearish Harami.  The QQQ gave us a small gap up followed by more bullish follow-through. On the day, The QQQ gained 0.57% to close at yet another all-time high.  The SPY lost 0.21% and DIA lost 0.49%.  The VXX gained about half a percent to 17.21 and T2122 remains deep in overbought territory at 94.84.  10-year bond yields fell to 0.928% and Oil (WTI) fell a little over a percent to $45.63/barrel.  In an interesting sidebar, Fresh Water (H2O) began trading as a commodity Monday.

Monday was a bad day and night for stimulus.  Senate Majority Leader McConnell refused to endorse the bipartisan compromise bill and it appears Congress will need to pass a one-week spending extension on Wednesday to keep the federal government open until December 18.  This is being done because the two sides of the stimulus negotiation have agreed on the high-level numbers, but they are not agreed on the wording of the specifics of spending.  So, in order to roll this into an omnibus funding bill, they need to kick the can down the road another week. 

In corporate news, TSLA will offer another secondary stock sale to raise $5 billion.  This is the second time it has sold more stock in 3 months and may be an indication it is trying to squeeze every penny out of a very high market price for the stock.  Meanwhile, GS has agreed to buy out its Chinese partner (and has applied to Chinese Regulators for the right to have 100% ownership of a securities entity in mainland China).  This followed JPM taking 71% ownership in its own Chinese securities joint venture and CS announcing it would like to take 100% ownership of its mainland securities partnership.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 15,370,339 confirmed cases and 290,474 deaths.  Monday saw another record 200,000+ new cases and 1,539 new deaths.  This brings the 7-day average of new cases is at 206,259 while average deaths rose to 2,300/day.  This comes as Dr. Fauci (NIH) told CBS reporters that the “full brunt of Thanksgiving gatherings on the Covid surge” has not hit yet…but it’s coming soon. This came as Fauci and several other health experts were urging the public to cancel or dramatically change holiday gathering plans.

Globally, the numbers rose to 68,055,468 confirmed cases and the confirmed deaths are now at 1,553,155 deaths.  The big global news was that the UK has begun giving vaccinations using the PFE-BTNX vaccine.  Due to the extreme cold needed and logistics, at least at first, they are focusing on hospital workers and priority patients (like the elderly) who are already located at a major hospital for appointments. However, across the channel, Germany reached a new record high infection rate.  In Asia, Hong Kong increased restrictions on social distancing yet again while South Korea and Japan have called out their militaries to assist in medical staffing and contact tracing.

Overnight, Asian markets were mixed yet again.  Thailand (+2.01%) was an outlier as the gains were generally modest.  The same is true of South Korea (-1.62%) being abnormal while most losses were quite modest.  In Europe, markets are leaning more heavily to the downside so far today.  Only two minor markets are modestly green, but the 3 major bourses are typical with the FTSE down 0.48%, the DAX down 0.41%, and the CAC down 0.82%.  As of 7:30 am, US futures are pointing to a modest gap down.  The SPY (-0.56%), DIA (-0.47%), and QQQ (-0.39%) are all implying lower opens at this point in the premarket.

The major economic news is very limited for Tuesday. This includes Q3 Nonfarm Productivity and Q3 Unit Labor Costs (both at 8:30 am).  The major earnings releases are also limited and include AZO, GIII, and THO before the open.  Then after the close, CHWY and GME report.

Asia and Europe seem to be leading us lower on Tuesday, perhaps on at least a delay in any US stimulus or on the bad virus news from around the world. With limited economic news or earnings to change that lead, it looks like we may have a lower open. However, remember that hope springs eternal among bulls up near the all-time highs. The point being, it does not pay to fight the trend until it is broken. Just be careful.

Respect support and resistance, the trend, and price action. Remain true to your trading rules and trust your process. Keep booking those singles and doubles. It’s the profits you take that pay the bills. So leave “picking the very top” to the traders more interested in stroking their ego than making money.

Ed

Swing Trade Ideas for your consideration and watchlist: NAT, PINS, AAPL, XLC, COOP, AG, SOLO, BLNK, EGO. 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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