Markets opened slightly higher Monday and then rode the roller-coaster all day long.  A late-day rally into the close took all 3 major indices out near their highs on reopening optimism.  This left the SPY and DIA at new all-time high closes.  On the day, QQQ was up 1.07%, the SPY was up 0.61%, DIA was up 0.51%.  The VXX was down sharply to 13.16 and T2122 fell slightly but remains deep in the overbought territory at 97.11.  10-year bond yields fell to 1.604% and Oil (WTI) was off one-third of a percent to $65.37/barrel.

The FOMC meeting starts again Tuesday.  While no policy or statement changes are expected at this meeting, markets will be pouring over the new Fed Interest Rate Forecasts.  Traders will also be hoping for better forward guidance on future changes to Fed policy when Chair Powell does the post-statement press conference. This comes amid the backdrop of rising interest rates and current expectations of a booming economy as vaccinations reach further into the population and the economy and public opens more and more every day.

In other economic news, Bloomberg reports that President Biden is working on a tax plan that will raise taxes on individuals making over $400,000 and corporations, but is not looking at the “wealth tax” as proposed by Senators Sanders and Warren. This had been hinted at on Sunday when Treasury Sec. Yellen said policies to address the deficit were on the horizon.  This would be the first tax hike since 1993.  In another plan being discussed are changes in capital gains rates on individuals making more than $1 million, taxes on stock dividends, and even replacing fuel taxes with a mileage-based fee for road use (which would make sure electric vehicle owners pair their share).  The timeline that is being discussed seems to be focused on the fall and apparently, leaks report the taxes will not be made retroactive as other tax changes have been in the past.

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 30,138,586 confirmed cases and deaths have now passed half a million at 548,013 deaths.  As mentioned, the number of new cases fell slightly again to an average of 55,423 new cases per day.  Deaths were flat at 1,282 per day.  In other good news, the Center for Medicare and Medicaid Services reported that nursing home case numbers plunged more (83%) than the general public (58%) in the 6 weeks from Dec. 20 to Feb. 14.  CT and MS also both announced their states will open vaccinations to all adults as of April 1.  This makes 8 states that have announced this expansion about the same time.  In addition, PA will ease restrictions on restaurants and businesses on April 4, bringing the total to 13 states that have eased restrictions.  

Globally, the numbers rose to 120,846,995 confirmed cases and the confirmed deaths are now at 2,674,086 deaths.  The trends have been good, but we saw a significant uptick today.  The world’s average new cases have up-ticked again to 428,861 per day.  Mortality, which lags, was flat, now at 8,482 new deaths per day.  Monday saw major news on the vaccine front in Europe as German, France, Italy, and Spain joining 11 other European countries in suspending use of the AZN vaccine (over blood-clotting fears).  The EU and WHO continue to say there is no real evidence to support those suspensions and urged countries to keep vaccinating.  However, the damage is done to public confidence and the UK is claiming it is a nationalist attack based on Brexit since the AZN vaccine came from England.

Overnight, Asian markets were mixed again, but leaned positive on generally modest moves.  Shenzhen +0.91%) and Shanghai (+0.78%) led the gains today while Indonesia (-0.23%) and India (-0.11%) were typical of the losses.  In Europe, markets are leaning strongly to the green side at this point in their day, but also on modest moves.  The FTSE (+0.60%), DAX (+0.68%), and CAC (+0.24%) are typical of the rest of the continent.  As of 7:30 am, US futures are pointing to a flat open.  The DIA is implying a -0.10% open, the SPY implying a +0.03% open, and the QQQ implying a +0.45% open at this point in the morning.

The major economic news for Tuesday includes Feb. Retail Sales, and Feb. Import and Export Indexes (all at 8:30 am), Feb. Industrial Production (9:15 am), and Jan. Business Inventories (10 am).  Major earnings reports before the open include DBI and JBL.  Then after the close, ADV, CAL, and LEN report.

With little economic news or earnings on tap, all eyes will remain on bond yields and the Fed meeting that starts today as traders look for reassurance on the inflation front. A bullish trend (at the all-time highs) remains in place, but the large-caps seem to be pushing against some resistance at this level, for the moment. Again, the general good mood about recovery and the $1,400 direct payments seem to be providing a tailwind for bulls. However, as mentioned, the market may wait on more direction from the Fed before making any big moves.

Be on the lookout for volatility whenever markets are looking indecisive. As always, follow the trend, respect support and resistance, and don’t chase the moves you missed. Another trade will be along any minute. Also, keep in mind that you are not a mystic. So, don’t try to predict reversals, just follow the market. Most importantly, keep taking your trade goals (profits) off the table when you can and stick to your discipline.  Consistency is the key to long-term trading success.

Ed

Swing Trade Ideas for your consideration and watchlist: HPQ, DVN, NLSN, AVY, HON, NKLA. 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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