Markets opened flat in the large caps, but the QQQ gapped down a third of a percent on Friday.  After indecision the first hour, all 3 major indices saw a selloff the last hour of the morning.  From there was a sideways drift with a slight bullish slope.  This left us with indecisive candles in all 3 major indices, a Doji in the SPY, a white Spinning Top in the DIA, and a Black Spinning Top in the QQQ.  On the day, SPY lost 0.08%, DIA gained 0.23% (to close at a new all-time high close by a few cents), and the QQQ lost 0.84%.  The VXX rose more than 2% to 21.70 and T2122 slipped slightly but remains in the overbought territory at 85.90.  10-year bond yields fell to 1.641% and Oil (WTI) rose almost 2% to $84.09/barrel.

Bloomberg reported Sunday that China is expecting a new Covid outbreak to get worse in the coming days.  As a result, they have begun locking down some cities and regions (not to the provincial level yet).  If there is any silver lining to this cloud, it is that the current outbreak is mostly in the northern provinces such as Inner Mongolia, which are not the important manufacturing or shipping regions. So, from a global supply chain perspective, this is as good as such a cloud gets.

Over the weekend in Europe, Brexit was back in the news.  The British PM Johnson has been threatening to unilaterally suspend the portion of the post-Brexit trade deal related to Northern Ireland.  So, on Friday the EU began internal discussions about terminating the entire trade deal in the case that Britain breaks the portion related to Northern Ireland.  The two sides also began intense negotiations to avoid the break.  The Pound fell half a percent on this news.  If the deal were to be scrapped, it would wreak havoc with the UK economy at least for months.

This morning Bloomberg is reporting that FB has been keeping investors in the dark about an alarming new trend that is accelerating.  This was part of the basis (if not the media/Congress publicized reason) behind the SEC whistleblower complaint in early October.  It seems that researchers inside FB reported to executives in late March that teens (13-17) and young adults (18-29) are spending far less time and sending fewer messages in the last year.  In fact, fewer teens are even signing up to the platform.  The most troubling fact is that users across all age groups are creating fewer posts at a time when logically they were home more and had very little in the way of other social outlets. Obviously, these trends are a major threat to the company’s advertising business and is the driver behind the recent massive increase in FB marketing efforts.

Overnight, Asian markets were mixed.  Shanghai (+0.76%) and Shenzhen (+0.72%) led to the upside.  Meanwhile, Japan (-0.71%) and Thailand (-0.56%) paced the losses.  In Europe, markets are also mixed as of mid-day.  The FTSE (+0.38%) and DAX (+0.19%) are modestly higher, while the CAC (-0.20%) and many of the smaller exchanges are down in early afternoon trading.  As of 7:30 am, US Futures are pointing toward an open just on the green side of flat.  The DIA is implying a +0.04% open, the SPY implies a +0.12% open, and the QQQ implies a +0.26% open to start the week.  10-year bond yields are up to 1.663% and Oil (WTI) is up a percent in early trading. Finally, contrary to reports last week, PYPL announced that it’s not interested in buying PINS at this point.

There is no major economic news scheduled for release on Monday.  Major earnings reports scheduled for the day include ARLP, HSBC, IBA, KMB, LII, OTIS, and QSR before the open.  Then after the close, ARE, AXTA, BRO, CDNS, CR, CCK, FB, LOGI, OI, PKG, SSD, SUI, TBI, and UHS report.

As we head into a heavy earnings week, the rest of the world looks to be waiting on more direction. The bullish trend is getting some relief from over-extension and that rest may continue today as the market wants to see another earnings card before placing its next bet. So, the bulls remain in control of the trend, but biding time may be the order of the day. Remember, FB reports tonight, GOOG, AMD, and MSFT report Tuesday, and AAPL and AMZN report Wednesday…just among the FANGMAN leaders. Those reports could make major waves in the market. Be prepared.

Remember that it’s discipline and good trading rules that will win in the long run. And that includes consistently taking profits when you have them. Focus on your trading process and on managing the things you can control. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Ed

Swing Trade Ideas for your consideration and watchlist: APA, CLF, ARKK, EOG, DVN, HAL, BP, KRE, SAM, PFE, JNJ, ORCL, M. 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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