Markets gapped up eight-tenths of a percent before grinding sideways for a few hours.  After a small mid-day rally, the ground sideways again the rest of the day, closing near the highs.  On the day, SPY closed up 1.34%, DIA up 1.18%, and the QQQ up 1.07%.  The VXX fell over 4.5% to 17.56 and T2122 spiked back up deep into the overbought territory at 95.41.   10-year bond yield rose again to 0.908% and Oil (WTI) rose over a percent to $47.54 (the highest since late February).

During the day, House Speaker Pelosi invited her 3 counterpart leaders (House Minority Leader McCarthy, Senate Majority Leader McConnell and Senate Minority Leader Schumer) to a meeting to discuss stimulus and a government funding extension.  The four met just after the close, adjourned and then reconvened at 7:30pm.  This meeting came after she completed a hour-long negotiation call with Treasury Sec. Mnuchin.  McConnell also told reporters Congress would not leave town until a Covid package was complete.  There was no report after the evening session, but the developments have raised hope for a deal.

In a follow-up to a previous story about a new EU Law which can fine tech companies up to 10% of their global revenue if they don’t act as good gatekeeper, FB attacked AAPL overnight in praising the new law.  A FB spokesman went on to say they hoped the new law will keep AAPL in check from harming consumers and developers.  This came after AAPL had previously said it was enabling a privacy feature to allow users to block apps from tracking them across different platforms. (Of course, AAPL will still track users over those platforms.)  AAPL responded that FB’s real problem was that its business model is about invasive tracking of consumers. So, this spat is not as much related to the law as it is over AAPL trying to assert dominance over which tech company controls all the data about user’s lives, habits, and preferences to enable it to sell better marketing to advertisers.  This will eventually become a hot topic in the US as well.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 17,143,942 confirmed cases and 311,073 deaths.  We are now seeing 7-day averages of 216,733 new cases and 2,528 deaths per day.  MRNA submitted the paperwork for approval of their vaccine Tuesday.  Also during the day, the FDA approved the first over-the-counter rapid home covid-19 test (from an Australian company).  FL reported that a PFE production problem has caused the next two weeks of vaccine shipments to that state to be placed on hold.  NYC Mayor DeBlasio says he expects another city-wide lockdown right after Christmas based on the current trends.

Globally, the numbers rose to 73,938,418 confirmed cases and the confirmed deaths are now at 1,644,775 deaths.  As a reference, the world is averaging about 628,000 new cases and almost 11,000 new deaths per day. In the UK, Health Minister Hancock announced a new mutation of the virus has been found, which is spreading faster than the original variants, especially in specific places like London.  In related news, London was placed under the country’s toughest tier of restrictions as cases spike in the city. In addition, two of the largest British Medical Journals have posted editorials pleading with PM Johnson to not relax restrictions over Christmas as he has promised he will. At the same time, in Northern Ireland, hospitals are beyond full capacity with at least one hospital using parked ambulances to hold dozens of over-flow patients.

Overnight, Asian markets were mostly in the green. Taiwan (+1.68%) was by far the leader among gainers with Hong Kong (+0.97%) and Australia (+0.72%) being more typical.  The only red seen was modest losses in Chinese exchanges.  In Europe, we see a similar picture so far today.  Only Belgium and Finland show any red (modest) as most exchanges are solidly bullish mid-day.  The FTSE (+0.98%) is u, as is the DAX (+1.54%), and the CAC (+0.61%).  As of 7:30 am, US futures are pointing to a modestly bullish open.  The SPY is implying a +0.26% open, the DIA implying a +0.23% open, and the QQQ implying a +0.17% open at this point in the premarket.  

The major economic news for Wednesday includes Nov. Retail Sales (8:30 am), Dec. Mfg. PMI and Dec. Services PMI (9:45 am), Oct. Business Inventories (10 am), Crude Oil Inventories (10:30 am), FOMC Interest Rate Decision, Fed Interest Rate Projections, and FOMC Statement (all at 2 pm), Fed Chair Press Conf. (2:30 pm).  Some financial news outlets are worrying over a possible disappointment by the Fed, saying we may see a lessening of the Doveish tone, which may spook markets. The major earnings reports on the day are limited to TTC before the open and both ABM and LEN after the close.

With a considerable amount of economic data today and hope for more progress on a stimulus deal, the bulls may have the edge, but markets may wait to see what the Fed tone is this afternoon before making any big moves. Just remember that it’s politicians that are behind stimulus news. So, anything that comes out are just as likely to be positioning as they are to be a deal announcement. The only edge a deal has remains time pressure as the lawmakers want to leave town as soon as possible. So, just be careful to not get carried away on market news.

Maintain discipline to your trading rules and focus on your process. As always, respect the trend, support and resistance, and price action. Put those singles and doubles in the bank when the market gives them to you. Don’t swing for the fences on every trade. As they say, Bulls make money and Bears make money, but pigs get slaughtered. So, leave the top and bottom 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: PLUG, WFC, NIO, BLNK, CPRI, EYE, CLF, SPWR. 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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