Markets gapped up Tuesday and then put in a little morning rally as the bulls got on a run.  However, the afternoon was a sideways grind and a selloff the last hour left us with upper wicks.  The SPY put in a Spinning Top candle while the others printed large body with good sized upper wick candles.  On the day, SPY gained 1.33%, DIA gained 1.59%, and QQQ gained 1.63%.  The VXX fell 8.5% to 18.19 and T2122 rose well into the overbought territory at 89.77.  10-year bond yields rose significantly as money moved out of bonds ending at 1.096% and Oil (WTI) gained about 2.5% to $54.87/ barrel (the highest level since early March of 2020).

The social media short squeeze seemed to fall apart Tuesday as GME gapped down and the sellers piled in causing in a 60% loss on the day (after losing 31% on Monday).  AMC saw similar action, losing over 41% after a big black candle of its own from the prior day.  Silver suffered a similar reversal.  So, the crusaders that were not quick and had not taken profits likely got hammered by the gaps and then also learned the lesson of discipline if they held hoping for a recovery.

After the close, major tech earnings announcements set the table for tomorrow. Among these are the Jeff Bezos is stepping down as CEO of AMZN, with his replacement taking over during Q3.  This came after AMZN reported its first $125 billion revenue quarter and doubled earnings estimates ($14.09/hare vs. $7.16/share est.).  GOOG also beat on the top and bottom lines   In non-tech earnings, XOM more than tripled the analyst’s estimates, coming in a 3 cents per share with an average estimate of 0.9 cents expected.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 27,027,430 confirmed cases and 457,868 deaths.  However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 142,524 new cases per day.  Still, deaths remain stubbornly high at 3,179 per day.  The White House COVID Response team announced they will begin shipping vaccines directly to 6,500 retail pharmacies (CVS and WBA) on Feb. 11.  Coupled with the rapidly declining trend of new cases this offers considerable hope for Spring.

Globally, the numbers rose to 104,485,479 confirmed cases and the confirmed deaths are now at 2,265,049 deaths.  In good news, the world’s average of new cases is down again to 512,467 per day, but mortality remains high at 13,716 new deaths per day.  The WHO reported that there has been a 13% decline in new cases globally from last week.  Mexico has approved the use of the Russian Sputnik vaccine.  In India, a survey has found that over 56% of the city’s population has had COVID-19, based on estimates from 28,000 samples.  That is a lot of cases considering the city 30 million residents and the Indian national case count is reported at only 10 million.

Overnight, Asian markets were mixed but mostly green.  South Korea (+1.06%), Japan (+1.00%), and India (+0.97%) led the way.  Meanwhile, China saw losses with Shenzhen (-0.87%) and Shanghai (-0.46%) paces the fall.  In Europe, markets are mostly green so far this morning.  The FTSE (-0.02%) is flat, while the DAX (+0.51%) and CAC (+0.25%) are modestly higher.  As of 7:45 am, US Futures are pointing to a modestly green (and varied) open.  The DIA is flat at +0.01%, the SPY implying +0.32%, and the QQQ implying +0.60% at this point.

The major economic news for Wednesday includes Jan. ADP Nonfarm Employment (8:15 am), Jan. Services PMI (9:45 am), Jan. ISM Non-Mfg. PMI (10 am), Weekly Crude Oil Inventories (10:30 am) and 4 Fed speakers (Bullard at 1 pm, Harker at 2 pm, Mester at 5 pm, and Kaplan at 6:05 pm).  Major earnings on the day include ABBV, APTV, AVY, BIIB, BSX, CPRI, CNHI, EDP, HWM, HUM, LAD, MKL, PFGC, SC, SNDR, SMG, SNE, and SPOT all before the open.  Then after the close, AFL, ALGN, ALL, UHAL, AFG, AVTR, CHNG, CTSH, CTVA, EBAY, ECHO, ENSG, THG, HI, IAC, KLAC, LNC, MET, MUSA, PYPL, QRVO, QCOM, VVV, and YUMC report.

Earnings will again lead markets today with the digestion of Jeff Bezos stepping down at AMZN and strong earnings from GOOG and AMZN also still being digested. The volatility caused by the social media short squeeze may have run out of steam. However, earnings offer their own kind of volatility. So, continue to be careful.

Remember to keep locking in your profits. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed.  It’s all about achieving trade goals and sticking to your discipline.  Remember, our job is to produce consistent gains…not catch record-breaking one-day moves. So, stick with your plan, maintain discipline and work your process.

Ed

Swing Trade Ideas for your consideration and watchlist: Rick is under the weather, so no Trade Ideas for today. You can find Rick’s review of tickers on his YouTube Channel here. 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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