Markets saw some whipsaw early, but then all 3 major indices started a protracted selloff at 11 am that lasted right into the close.  This left us with more big, ugly black candles with modest upper wicks.  On the day, SPY lost 1.96%, DIA lost 1.43%, and QQQ lost 2.77%.  All three have now given up their 200sma.  The VXX rose over 9% to 23.20 and T2122 fell even more to a ridiculously oversold 0.85.  10-year bond yields fell to 1.771% on strong bond demand and Oil (WTI) fell eight-tenths of a percent to $84.83/barrel.  All-in-all, it was the worst week in the market since March of 2020, with the QQQ down 7.45%, SPY down 5.75%, and DIA down 4.68% in a 4-day week. 

The dramatic fall in cryptocurrencies continues.  Bitcoin closed at $67,130 range in early November (11/7).  However, it closed at $35,096 on Saturday (after having fallen another 14% Friday and more on Saturday).  A pretty brutal 48% loss over 2.5 months.  In early trade today, Bitcoin is down almost another 5% to $33,498.30.  Along with the currency itself, related stocks continue to tumble.  One example is that MSTR was down almost 25% on the week last week.  In addition to the hit from the currency tumbling, one morel cause for this was the SEC announced late Thursday that they are rejecting the way MSTR has been accounting for its Bitcoin holdings.

In a hopeful sign on the inflation front, wholesale fertilizer prices have fallen every week this year.  The price of wholesale urea has fallen dramatically each day last week, including 8.2% on Friday alone.  Unfortunately, retail prices (what farmers pay) have not fallen yet.  However, the wholesale prices are back to the level they were at the first week of October, preceding the massive spike that lasted Oct.-Dec.

Overnight, Asian markets were mixed but lean to the downside.  India (-2.66%) was an outlier with South Korea (-1.49%) and Hong Kong (-1.24%) leading the losses.  Meanwhile, Taiwan (+0.50%) and Japan (+0.24%) paced the gainers.  In Europe, tensions from a potential Russian invasion of Ukraine have markets red across the board at mid-day.  Russia (-6.24%) is obviously an outlier, but the FTSE (-1.17%), DAX (-1.84%), and CAC (-1.83%) are representative of the continent.  As of 7:30 am, US Futures are pointing toward a down open.  The DIA implies a -0.32% open, the SPY is implying a -0.44% open, and the QQQ implies a -0.70% open at this hour.  10-year bond yields are down to 1.735% and Oil is flat in early trading.

The major economic news scheduled for release Monday is limited to Mfg. and Services PMI (both at 9:45 am).  Major earnings reports scheduled for before the market include: HAL and PHG.  Then after the close, BRO, CR, IBM, LOGI, STLD, and ZION report.

Markets are likely to look ahead to the Fed Meeting announcements and press conference on Wednesday. However, pretty much the whole market is sure what they will hear then…a rate hike coming in March as well as the beginning of the selloff of Fed-owned bonds. A wildcard might be something GS suggested in a weekend note. They said the Fed may do more than 4 rate hikes this year. If the Fed were to come out and say that on Wednesday, we could easily see capitulation selling. So, now is the time to be preparing for the bottom, but not predicting a turn or chasing short moves you missed. Trade carefully.

Stick to your trading rules and on managing the things you can control. Don’t chase, trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor. And keep in mind that the first rule of making a lot of money in the market is to not lose a lot of money in the market. So, don’t be stubborn. When you’re wrong, just admit it and take your loss. (That’s why we set stops.)

Ed

Swing Trade Ideas for your consideration and watchlist: TAK, BKR, CHD, BABA, IAC. 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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