Markets opened relatively flat (large-cap indices gapping down slightly and the QQQ gapping up a bit), but then began a face-ripping rally that lasted half an hour.  From that point onward was a slow, steady rally that even picked up steam at the end of the day.  This second strong day in a row left us with large white candles in all 3 major indices.  The move not only took out the T-lines in all 3 major indices, but it also begins a new bullish trend (low on 1/24, high on 1/26, higher-low on 1/28, and higher high on 1/31).  On the day, SPY gained 1.77%, DIA gained 1.13%, and QQQ gained a whopping 3.19%.  The VXX fell almost 7% to 21.41 and T2122 jumped back into the mid-range at 66.67.  10-year bond yields fell slightly to 1.784% and Oil (WTI) rose 1.75% to $88.35/barrel.

Despite Monday’s very strong day for the bulls, the close wrapped up a brutal first month of the year.  For January, the SPY was down 5.27%, DIA was down 3.37%, and QQQ was down 8.75%.  However, only the QQQ is below its T-line and uptrend lines on the monthly chart.

After the close Monday, NXPI, SANM, CBT, CRUS, GGG, ARE, and FN all reported beats on both lines.  Meanwhile, KMPR missed on earnings, but beat on revenue.  However, AXTA and WWD missed on both lines. In other business news, FEDX suspended all US express freight services (overnight, 2-day, and 3-day delivery) as the company is reeling from the impact of omicron. Just another example of supply chain woes that are not easy to solve and won’t go away soon.

Overnight, Asian markets were mostly green, to the extent they were open (all Chinese markets are closed until Feb. 4th or 5^th).  India (+1.37%), Thailand (+0.78%), and Australia (+0.49%) led the region’s gainers.  In Europe, exchanges are green across the board as a political settlement to the Russian threat to Ukraine seems more likely than recently.  The FTSE (+0.92%), DAX (+1.08%), and CAC (+1.11%) are leading the continent higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a slightly down open.  The DIA implies a -0.19% open, the SPY implies a -0.22% open, and the QQQ implies a -0.05% open at this hour.  10-year bond yields are trading lower (1.741%) and Oil (WTI) is off six-tenths of a percent in early trading.

The only major economic news scheduled for release Tuesday are Mfg. PMI (9:45 am) and ISM Mfg. PMI as well as Dec. JOLTS (both at 10 am).  Major earnings reports scheduled for before the market include ARCB, BR, CTLT, CRVL, ENTG, EPD, XOM, BEN, GFF, IMO, LII, LDI, MDC, MAN, PNR, PBI, PHM, SMG, ST, SIRI, SWK, UBS, UPS and WAT.  Then after the close, AMD, GOOGL, AMCR, DOX, ASH, CB, EA, EHC, EQR, GM, GNW, GILD, GOOG, IEX, LFUS, MTCH, OI, PYPL, PKI, SBUX, and UNM report.

The bulls have had a great couple of days. However, there remains a lot of overhead resistance to work through. So, while the very short-term trend has flipped bullish, don’t confuse that for sunshine and blue skies ahead. Continue to exercise caution is key until the longer-term downtrend has been broken.

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: IP, HOOD, AXP, GPS, GPN, RIDE, BYND, XOM. 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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