Markets gapped down and then put in a very volatile day as stocks rallied strong after Fed Chair Powell told us inflation was “still soft” and the Fed remains committed to the current “easy money” policies, including buying bonds.  This left us with white-body indecisive candles that can be seen as Hammer candles (if you squint).  On the day SPY gained 0.12%, DIA gained 0.05%, and QQQ lost 0.30%.  The VXX fell 4% to 15.08 and T2122 also fell back to 72.05.  The 10-year bond yields fell slightly to 1.353% and Oil (WTI) rose slightly to $61.88/barrel.

SQ bought $170 million in bitcoin Tuesday.  Then overnight a 6^th Chinese city launched their country’s Central Bank official digital currency ($6 million worth) as a test.  Also last night, Bloomberg reported that Japan’s most expensive brokerage (Monex Group) has made a massive rally, up 136% this year, strictly on cryptocurrency bets.  The story just goes to show that more and more of the world’s mainstream financial institutions and governments are starting to accept and invest in the crypto revolution.  This all comes one day after Treasury Sec. Yellen warned that bitcoin was an “extremely inefficient” way to conduct monetary transactions…hinting at the need for the government to regulate those currencies and markets.

Mortgage demand plummeted 11% week-on-week on rate spikes, but may also be distorted by the winter storm impacts.  In other business news, LOW announced a beat on earnings on 28% same-store sales growth.  However, they warned that DIY trends could fade away as consumers return to a more normal life. OMI also beat on the topline, but unlike Lowes, OMI came in almost a percent light on revenue.  Oil patch names like HFC also missed on both top and bottom lines.  In the tech space, IRM missed badly on earnings (over 55%) on an almost 4% revenue miss.

Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 28,897,718 confirmed cases and deaths have now passed half a million at 514,996 deaths.  As mentioned, the number of new cases is starting to level-out and uptick at an average of 70,255 new cases per day.  Oddly, deaths, which have always lagged, seem to be preceding this plateau and rose back up to 2,126 per day.  With that backdrop, the White House said Tuesday that 2 million doses of the JNJ single-shot vaccine can be available next week, pending FDA approval. In addition, White House Press Sec. Psaki also said that states will now get 14.5 million doses/week (up from 8.6 million/week).  President Biden also indicated that masks will be sent directly Americans.

Globally, the numbers rose to 112,739,376 confirmed cases and the confirmed deaths are now at 2,498,495 deaths.  However, the trends have good until very recently.  The world’s average of new cases has up-ticked slightly to 369,614 per day.  Mortality also ticked up, now at 9,522 new deaths per day.  In Europe, Ireland extended their lockdown through April 5.  Meanwhile, Scotland is leaving lockdown and returning to a multi-tier system of restrictions, with the youngest children returning to in-person school next week.  In Spain, the government said it will quadruple the number of available doses during Q2 relative to now.  And in China, another Chinese vaccine maker has filed for Chinese approval after their tests show 65% efficacy (15% less effective than the first Chinese vaccine claimed).

Overnight, the few Asian markets were strongly in the red.  Hong Kong (-2.99%), South Korea (-2.45%), and Shenzhen (-2.03%) led the way lower, but losses were broad and significant.  However, in Europe, markets are almost all modestly green as of mid-day.  The FTSE (+0.05%), and CAC (+0.13%) are flat while the DAX (+0.74%) is leading the way higher.  As of 7:30 am, it appears the US is following Europe up this morning.  The DIA is implying a +0.10% open, the SPY implying a +0.19% open, and the QQQ implying a +0.22% open at this hour.

Major economic news for Wednesday includes Jan. New Home Sales (10 am), Crude Oil Inventories (10:30 am), and 3 Fed speakers (Chair Powell testifies at 10 am, Brainard at 10:30 am, and Clarida at 1 pm).  Major earnings reports on the day include BHC, CQP, LNG, CLH, ELAN, ETR, EXC, HFC, HZNP, IRM, LOW, ODP, OSTK, OMI, PSN, PNW, PPD, RY, SBGI, SITE, TEN, TJX, and VRT before the open.  Then after the close AMED, ANSS, APA, BKNG, BKD, CW, FNF, GEF, ICLR, LB, VAC, NTAP, NVDA, PARR, CNXN, RYI, SPTN, STN, FTI, TPC, UNVR, and VIAC report.

With little new data and Fed Chair Powell unlikely to say anything today that he didn’t say yesterday, it will be earnings reports that are likely to fill the minds of traders today. Meanwhile, the midwest (and TX in particular) are getting back to pandemic normal life as political and business fallout gathers steam. The chop and pullback of the last week were punctuated Tuesday with a high volume major intraday reversal. Is that the capitulation of bears on the pullback? I’m not sure, but it did signal the bulls are ready to jump back in at any time.

That said, the trend remains bearish on a daily level and we have to respect the trend until it is broken. Remember that knife-catching is not a long-term trading career path. Trading is a marathon, not a sprint.  Achieve your ambitions in the long-run by hitting short-term goals over and over again. Forget about predicting reversals or breakouts. Just follow the trend, respect support and resistance, and don’t chase the moves you missed.  Book your trade goals when you can and stick with your discipline.  If you keep locking in your profits when you have them, you’ll never go bust.

Ed

Swing Trade Ideas for your consideration and watchlist: PENN, FCX, MLM, M, PINS, SNAP, APPS. 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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