Markets gapped down about half a percent Thursday on a much higher than expected increase in Initial Jobless Claims (853,000 vs 730,000 expected) to a 3-month high.  However, a recovery came quickly and the rest of the day was a range-bound gyration back and forth.  At the end of the day, all 3 major indices printed indecisive candles (Doji, Spinning Top, and Large-wick candles).  The SPY was flat at -0.03%, the DIA flat at -0.11% and the QQQ gained 0.40%.  The VXX gained a percent to 17.39 and T2122 (4-week New High/Low Ratio) fell, but remains in overbought territory at 84.43.  10-year bond yields fall on stalled stimulus talks to 0.908% and Oil (WTI) gained 3% to $46.89/barrel.

Once again, the government failed to reach a deal on more stimulus as the market has been expecting.  Senate Majority Leader McConnell outright rejected the bipartisan proposal which had been the basis of negotiations the last couple of weeks, instead saying that plan should be thrown out and new discussions begun around the last-minute plan from the Administration.  (Business liability waivers is McConnell’s pet project and that seems to be the snag.) The Democrats felt he was just grandstanding and the change of starting point would be a waste of time. So, the House adjourned for the week (having already passed its one-week stopgap spending bill).  This means there is little likelihood of any progress in talks prior to the December 18 end of funding to keep the government open.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 16,042,537 confirmed cases and 299,703 deaths.  Thursday saw another day of 217,779 new cases and another grim record 2,974 new deaths (about one-third of world totals and we have only about 4% of the population).  This brings the 7-day average of new cases to 212,969 while deaths are averaging deaths rose to 2,407/day.  The FDA’s Vaccine Advisory Committee held a day-long public Zoom call to discuss, explain and then vote on recommending the vaccine. As expected, the vote was to recommend the PFE-BTNX be given approval for emergency use.  This is not a final approval vote, but the full FDA is expected take the committee’s recommendation and quickly approve the PFE-BTNX vaccine.

Globally, the numbers rose to 70,852,192 confirmed cases and the confirmed deaths are now at 1,591,300 deaths.  As a reference, the world is averaging about 625,000 new cases and almost 11,000 new deaths per day.  In Europe, France has extended its lockdown until January 8^th, though they are making an exception of Christmas day.  Germany also reported another record number of cases and deaths Friday as their Economic Minister told reporters the country must act now to shutdown the spread before it wrecks the economy.  Russia also reported a record increase in deaths, even though they are a week into mass vaccinations.  AZN announced it will collaborate with the makers of the Russian vaccine for trials and GSK announced their own vaccine will be delayed until late 2021.

Overnight, Asian markets were mixed again.  Malaysia (+1.82%) was a big outlier to the green side, with South Korea (+0.86%) as most green moves were very modest.  On the Downside Shenzhen (-1.31%) and Shanghai (-0.77%) were the big losers.  However, in Europe, markets are red across the board after the EU reached agreement on a $2.1 trillion Covid relief package.  Among the 3 major bourses, FTSE is down 0.99%, DAX down 1.72%, and CAC down 1.04% so far today.  As of 7:30 am, US futures are gap down to start the day.  The SPY is implying a -0.72% open, the DIA implying a -0.63% open, and the QQQ implying a -0.75% open at this point in the premarket.  

The major economic news for Friday is limited to Nov. PPI (8:30 am), Michigan Consumer Sentiment (10 am) and a Fed Speaker (Quarles at 12:40 pm).  There are on major earnings reports on the day.

Once again, the virus, vaccine news, and more delays in stimulus are top of mind in the market.  More bad news related to the Brexit deal has UK PM Johnson telling his country’s businesses and people to prepare for an “Australian-style” crash out of EU Trade. This while we sit near the all-time highs. So, continue to be careful and remember the market is overbought.

As always, respect support and resistance, the trend, and price action. Stay true to your trading rules and trust your process. Keep taking the singles and doubles the market offers you. Don’t try to sell every last share at the very top penny before the turn. Leave “top picking” to the traders who need their ego stroked more than they need to make money.

Ed

Swing Trade Ideas for your consideration and watchlist: STNG, MGM, HAL, JETS, UBER, NAT, ETSY. 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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