Tuesday saw a modest gap down on the Russian “soft invasion” of Ukraine.  Then, after a half-hour of volatility, markets sold off most of the day.  This left us with gap-down, indecisive Spinning Top or Doji candles in all 3 major indices.  All 3 are also at the breakout point of a bearish “Dreaded h” pattern.  On the day, SPY lost 1.07%, DIA lost 1.46%, and QQQ lost 1.00%.  This put all 3 into correction territory, with the QQQ in a bear market (depending on how you measure). The VXX was flat at 23.36 and T2122 dropped down into the oversold territory at 10.24.  10-year bond yields rose to 1.944% and Oil (WTI) rose 1.32% to $92.27/day.

The US and Europe hit Russia with symbolic, but largely meaningless, sanctions as a result of the soft invasion of Ukraine. These included sanctions on a handful of smaller Russian banks (which don’t get their funding from abroad, so the impact is not heavy). Probably most notable was Germany’s decertifying the “Nord Stream 2” Natural Gas pipeline.  (50% of Nord Stream 2 funding came from Western Europe and Russia responded by threatening that Europe would soon be paying 20% more than the record price for its natural gas.) Still, this sanction has a minimal impact since the pipeline was not yet online and nobody thinks that the pipeline project won’t eventually be given a green light again.  The fear the market is likely to focus on is that Russia recognized the entire DonBas region as being separate from Ukraine, not just the area already controlled by Russian-backed Separatists.  That means they claim to support Separatist “ownership” of well over 3 times as much territory as the Separatists actually now control.  This implies a Russian offensive in support of its friends to at least the borders of the DonBas region.

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In other news, both the Mfg. and Services PMIs came in higher than expected.  Even Conf. Board Consumer Confidence slightly beat expectations.  Then, after the close, MOS, AGR, TOL, PANW, FANG, CDNS, PSA, RXT, TXRH, NDSN, O, TDOC, and MTDR all reported beats on both lines.  Meanwhile, MELI, CWH, RRC, and EXAS beat on revenue but missed on earnings.  On the other side, VRSK, missed on revenue but beat on earnings.  However, CZR and RIG missed on both lines. 

So far this morning, LOW, ETR, OMI, ODP, BCO, PSN, TNL, WWW, and NI have all reported beats on both lines.  Meanwhile, BCS, VIPS, and OSTK reported beats on earnings but came in short on revenue.  On the other side, HFC, TAP, DAN, CSTM, VRT, ARKO, and PRG all missed on earnings but beat on revenue.  As of now, there have been no reports that missed on both lines.

Overnight, the Asian markets were mixed, but mostly green.  Japan (-1.71%) was by far the most bearish with Shenzhen (+1.93%) by far the most bullish.  The rest of the region saw modest gains in the half of a percent range.  In Europe, markets are rebounding with green seen across the board at mid-day.  Of note, Belgium (+1.54%) is a full percent ahead of the rest of the continent.  The FTSE (+0.33%), DAX (+0.61%), and CAC (+0.99%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a green open.  The DIA implies a +0.52% open, the SPY is implying a +0.63% open, and the QQQ implies a +0.98% open at this hour.  10-year bond yields have risen to 1.969% as traders step back from bonds and Oil (WTI) is down half of a percent in early trading after yesterday’s rise.

There is no major economic news scheduled for Wednesday.  The major earnings reports scheduled for before the open include BCS, BHC, BCO, CLH, CSTM, DAN, ETR, FYBR, GIL, HFC, IHRT, LOW, TAP, NI, ODP, OSTK, OMI, PSN, PBR, PRG, SBGI, TJX, TNL, VRT, VIPS, and WWW.  Then after the close, AEM, AMED, ANSS, ACA, BBWI, BKNG, CHK, FIX, CTRA, CCRN, CW, DK, EBAY, WTRG, FLS, FNF, FRG, HLF, HTZ, IR, KALU, LHCG, LYV, MANT, VAC, MYRG, NTAP, OPAD, PTVE, PARR, RCII, RYI, SNBR, SUM, FTI, and UCTT report.

The bulls would sure like to do at least a relief rally not that the S&P has entered correction territory. However, Ukraine is in the process of declaring a state of emergency and has told its citizens to leave Russia immediately. The good news is, at least as of now, there is no active fighting between formally Russian troops (as opposed to the Russians posing as Ukrainian Separatists) and Ukrainian forces. So this morning, traders are likely to be over the initial shock and happy there is no active fighting. Look for that little relief rally to ensue. However, keep in mind that the technical damage and overhead resistance are still major hurdles to the bulls getting the market into full rally mode. So, expect volatility, fear news causing market knee-jerks, and trade cautiously.

Remember that you don’t have to trade every day and you definitely don’t need to chase the premarket moves by trading early. Ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Trading is a marathon, not a sprint. So, stick to your trading rules and manage the things that you can control. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If 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: ABBV, SYY, FTNT, KO, CHKP, CVS, FFIV, CHD, T. 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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