On Thursday, for the third day in a row, markets gapped higher, put in a little follow-through and then sold off to spring the bull trap.  This left us with black candles (a very big one in the QQQ) with upper wicks.  On the day, SPY lost 0.46%, DIA squeaked out a +0.04% gain, and QQQ lost 1.01%.  The VXX rose to 24.49 and T2122 fell deeper into the oversold territory at 2.11.  10-year bond yields fell to 1.808% and Oil (WTI) was down slightly to $86.91/barrel.

During the day, Q4 GSP came in as a massive beat (a 40-year high).  The print was +6.9% while the consensus estimate was 5.5%.  So, the Q4 economy was much stronger than expected, but the strongest inflation in 40 years also contributed to this high print.  On the other hand, December Durable Goods Orders and Pending Home Sales both came in much weaker than expected.

After hours Thursday, AAPL, AJG, BZH, V, WDC, WRB, JNPR, RHI, and KLAC all reported beats on both lines.  However, EMN, MDLZ, OLN, RMD, SYK, TEAM, and X beat on revenue but missed on earnings.  On the opposite side, FICO and WAL beat on earnings but missed on revenue.  Meanwhile, BOOT and CE missed on both lines.

Overnight, Asian markets mixed.  Japan (+2.09%), Australia (+2.19%), and South Korea (+1.87%) led the gainers.  However, New Zealand (-1.64%), Hong Kong (-1.08%), and Shanghai (-0.97%) were all lower as the region gets ready for the long Chinese market holiday that begins Monday.  In Europe, stocks are nearly red across the board at mid-day, with the lone exception of Russia (+0.90%).  The FTSE (-1.23%), DAX (-1.97%), and CAC (-2.11%) are typical and lead the region lower on fear of a Russian invasion of Ukraine and the closing of the Nord Stream 2 Gas Pipeline.  As of 7:30 am, US Futures are pointing toward a down open.  The DIA implies a -0.74% open, the SPY is implying a -0.77% open, and the QQQ implies a -0.48% open at this hour.  10-year bond yields are trading higher at 1.841% and Oil (WTI) is up to $87.24/barrel in early trading.

So far this morning, CAT, CHD, CTXS, PSX, SYF, VFC, and WY have all reported beats on both lines.  Meanwhile, ALV, BAH, CHTR, HNNMY, and CL have reported beats on earnings, but came in light on revenue.  At the same time, CVX, LYB, and SEOAY beat on revenue, but missed on earnings.

The major economic news scheduled for release Friday includes Dec. PCE Price Index, Q4 Employment Cost, and Dec. Personal Spending (all at 8:30 am), and Michigan Consumer Sentiment (10 am).  Major earnings reports scheduled for before the market include ALV, BAH, CAT, CHTR, CVX, CHD, CL, LYB, MOG.A, SYF, VFC, and WY.  There are no major reported scheduled for after the close.

Overhead resistance, the realization of a rough year with no help from the Fed, and fear over a Russian invasion of Ukraine have the bears in control. However, while they have smacked down the bulls’ attempt at a rally the last 3 days in a row, the bears have not been able to drive the market to further depths. So, be careful in an environment of intraday reversals and overall indecision. Also, remember it’s Friday and there is a weekend news cycle to be endured. Consider hedging, getting small, and especially taking profits where you have them.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Don’t be stubborn, protect yourself from yourself. When you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.)

Ed

Swing Trade Ideas for your consideration and watchlist: TZA, SQQQ, SPXU, SDOW, SDS, DXD, DUST, RWM, DOG, JDST, QID. 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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