US markets rebounded Tuesday on the hope brought by 3 EU Prime Ministers visiting Kyiv and PPI coming in lighter than expected.  Stocks gapped higher and then put in morning and afternoon rallies separated by a 2-hour period of consolidation.  As a result, all 3 major indices printed large white candles that closed near their highs.  On the day, SPY gained 2.20%, DIA gained 1.85%, and QQQ gained 3.14%.  This move put the large-cap indices back above their T-lines.  VXX had a crazy day and was halted numerous times before closing little changed at 28.70.  However, T2122 shot back up into the mid-range at 47.01.  10-year bond yields remained little-changed at 2.146%, but Oil plummeted again on improved prospects for peace, down 7.64% to $95.14/barrel after having been at $93.56 at mid-day.  That is a drop of over 30% from the high reached on March 8th.

On the Russia story, as mentioned above 3 Prime Ministers from EU countries are now in Kyiv to hold talks with Ukrainian President Zelensky.  Zelensky will also speak to the US Congress via zoom today.  President Biden will make his own address after signing that $13.6 billion aid package for Ukraine.  In Europe, the EU and Britain added more individuals from Russia and Belarus to the list of sanctioned people.  For their part, Russia “sanctioned” a number of American politicians from the President to members of Congress…to the extent their sanctions are of any interest.  Russia also has $117 million in bond payments due today. However, there is some optimism coming from Ukrainian President Zelensky saying talks with Russia are becoming more realistic.

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During the day, Sarah Raskin withdrew her candidacy for the office of Fed Vice Chair after WV Senator Manchin effectively killed the nomination Sunday at the behest of the Oil and Gas industry.  President Biden called for an immediate up/down vote on his 4 remaining Fed nominees (sitting Chair Powell, sitting member Brainard, Lisa Cook, and Philip Jefferson).  No word yet on who the President will nominate as a replacement for Raskin to be Vice-Chair (and the top Bank Regulator).

Mortgage demand fell this week as interest rates surged again.  After a brief reprieve, 30-year fixed-rate mortgages spiked higher from 4.09% the week prior to 4.27% this week (for loans with 20% down payments).  Refinancing loan applications fell 3% for the week (and were 49% lower than one year ago).  New home purchase loans rose 1% on the week and were 8% lower than the same week in 2021.

Overnight, the Asian markets were green across the board.  The biggest moves came in China where their government said negotiation with US regulators over cooperating on US-Listed Chinese stocks was progressing.  Hong Kong (+9.08%) was a massive outlier, but Shenzhen (+4.02%) and Shanghai (+3.48%) were no slouches as Chinese stocks soared.  Europe is following Asia with stocks showing green across the board at mid-day.  This came on renewed hope from the 3 EU Prime Ministers’ visit and Ukrainian President Zelenskyy saying that talks with Russia are sounding more realistic.  The FTSE (+1.17%) lags, but the DAX (+3.22%) and CAC (+3.54%) are leading the way higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap higher on the same optimism.  The DIA implies a +1.02% open, the SPY is implying a +1.15% open, and the QQQ implies a +1.68% open at this hour.  10-year bond yields are rising again to 2.174% and Oil (WTI) is up fractionally to $95.90/barrel in early trading.

The major economic news scheduled for release on Wednesday includes Feb. Import/Exports and Feb. Retail Sales (both at 8:30 am), Jan. Retail Inventories (10 am), Crude Oil Inventories (10:30 am), FOMC Interest Rate Decision, FOMC statement, Fed Interest Rate Projections (dots) (all at 2 pm), and Chair Powell’s Press Conf. (2:30 pm).  Ukrainian President Zelensky will also speak to Congress at 9 am and President Biden will speak about 1 pm after signing the Ukrainian aid bill.  The major earnings reports scheduled for release before the open include ARCO, JBL, and LE.  Then after the close EDR, GES, LEN, WSM, and ZTO report.

Markets are looking to gap higher on optimism out of Asia and Ukraine. However, this is a big news day with the Fed holding center stage. So, the entire mood of the market may change mid-afternoon, depending on the rate decision, interest rate outlook (dots), and especially the statement and press conference. Be careful chasing any optimism based out of Ukraine, because we all know we are only one artillery barrage or missile strike from being back to pessimism. Also, remember that we have seen light volumes the last week and that moves on small volume may just be retail-led head fakes. So, continue to trade carefully. Also, be aware that the Chinese Covid lockdowns are spreading along with new cases. So, supply chain issues could get worse.

Stick to your trading rules and manage the things that you can control. Remember that you don’t have to trade every day (or even week) and you definitely don’t need to chase gaps and moves. Trading is a marathon, not a sprint. 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: HTZ, X, CLF, CRWD, XME, RS, AMED, CHGG, FSM, EVGO, LDOS, DLTR, BTG, CF, PAAS, NYMT. 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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