On Turn-Around Tuesday, markets gapped the opposite of Monday’s gap-down.  Then, after a couple of hours of sideways waffle, they started a slow rally that lasted until stocks gave back some of the post-gap gains during the last half hour of the day.  This gave us large, gap-up, white candles that closed on their highs and tested the T-line in all 3 major indices.  On the day, SPY gained 1.73%, DIA gained 1.59%, and QQQ gained 2.23%.  The VXX fell almost 5% to 21.66 and T2122 shot back up to mid-range at 66.32.  10-year bond yields shot up to 1.47% and Oil (WTI) jumped 4.17% to $71.47 per barrel.  

A study released overnight from the American National Institute for Communicable Diseases done using South African patients has found that omicron has an 80% lower risk of hospitalization and a 70% lower risk of severe disease compared to the Delta variant.  The study has not yet been peer-reviewed.  Bloomberg reports that while important, at least one UK scientist fears the data may be somewhat biased by the time of year each sample set of data was taken from.  (South Africa immunized 44% of its population during the time period the data was drawn from and seasons changed.)  Still, for the market, this has to be seen as positive.

The World Bank reported overnight that they are forecasting a sharp decrease in GDP growth in China for 2022.  They have lowered their Chinese forecast to +5.1%, which would be the slowest growth in China since 1990.  For reference, Chinese GDP grew 8% this year (which itself is below the 8.1% that had been forecast in October).  This slowing of the second-largest economy could have major US market implications. 

Mortgage rates fell to a four-week low this week.  The 30-year fixed-rate conforming loan rate averaged 3.27% (down from 3.30%).  However, refinance loan applications rose only 2% while new home purchase loan applications fell 3%.

Overnight, Asian markets were almost green across the board on modest moves.  Only Shanghai (-0.07%) remained on the red side of flat while India (+1.10%) was an outlier to the upside.  Most exchanges showed very modest green moves with Hong Kong (+0.57%) and Malaysia (+0.52%) leading the way.  In Europe, markets lean toward the green side on minor moves for the most part at mid-day.  The FTSE (+0.10%), DAX (+0.19%), and CAC (+0.09%) are typical of the continent in early afternoon trading.  As of 7:30 am, US Futures are pointing to a flat open.  The DIA implies a +0.15% open, the SPY is implying a +0.06% open, and the QQQ implies a -0.01% open at this point.

The major economic news scheduled for release Wednesday includes Q3 GDP (8:30 am), Conf. Board Consumer Confidence and Nov. Existing Home Sales (both at 10 am), and Crude Oil Inventories (10:30 am).  The major earnings reports scheduled for the day are limited to KMX, CTAS, MSM, and PAYX before the open.  There are no major reports scheduled for after the close.  

After the Tuesday rebound, beware of a dead market as we are now near the point where traders take off early to get a few extra days of holiday vacation. Intraday whipsaw has been the norm lately, but the global markets and US premarkets are suggesting traders are at least taking the day off. to put a hurt on chasers.

When you’re wrong, admit it and take your loss. (That’s why we set stops.) Remember the first rule of making a lot of money in the market is to not lose a lot of money in the market. So, stick to your trade rules and on managing the things you can control. Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor.

Ed

Swing Trade Ideas for your consideration and watchlist: APPS, NKE, MSFT, V, ARKG, AMD, MU. 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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