Stocks gapped down modestly at the open Thursday, but then rallied for the rest of the day, although QQQ had a false start on that rally before doing the same.  All 3 major indices closed near the high of the day.  This gave a third straight large white candle and significantly up day (best 3-day gain since November 2020).  The SPY and DIA ended the day just below their 50sma.  On the day, SPY gained 1.25%, DIA gained 1.20%, and QQQ gained 1.21%.  The VXX rose to 26.15 and T2122 shot deep into the overbought territory at 94.04.  10-year bond yields were flat at 2.176% and Oil (WTI) spiked 8.69% to $103.30/barrel.

On the invasion story, the WHO said Thursday that Russia has attacked 43 hospitals and clinics so far.  The US accused them of war crimes for an attack on a Mariupol theatre that was clearly marked “Children” and was being used as a mass shelter.  In terms of companies, PZZA said it could not pull out of Russia, because the vast majority of its locations in Russia are owned by local franchises.  QSR finds itself in a similar position and is looking at divesting from its partnership after the Russian partner refused to close the Russian Burger King locations. Finally, note that overnight GS said the market is now too relaxed on the risks posed by the invasion.

SNAP Case Study | Actual Trade

During the day Thursday, Jobless Claims, Building Permits, and Housing Starts all came in slightly better than expected. Then after the close, FDX and GME both missed on earnings, but beat on revenue.  On the other side, JOAN beat on earnings but also missed on revenue.  Also, overnight Nickel fell 12% as it has dropped the maximum that is allowed by rule (limit) for the third day in a row at the London Metals Exchange.

Bloomberg reported late Thursday that the new AAPL low-end ($429) iPhone SE, which goes on sale today, will not have to give their phone carrier information at the time of purchase.  The phone can then be paired to any phone network at a later time using eSim technology.  This move is meant to push more sales to AAPL itself, as opposed to being purchased through T or TMUS.  This change will eventually come to VZ network users as well, but contractual obligations are stopping AAPL from doing it at this time.

Fed voter (and lone dissenter at this week’s meeting) James Bullard was talking his position early today.  The St. Louis Fed President (who wanted a half percent hike Wednesday and a full percent hike before July) released a statement this morning saying he feels the Fed needs to raise rates to 3% this year (versus the 1.75% the Fed consensus believed at the Wednesday meeting).  He said only this kind of move would show that the Fed is serious about fighting inflation.

Overnight, the Asian markets were slightly mixed but leaned to the upside.  India (+1.84%), New Zealand (+1.47%), and Shanghai (+1.12%) led the move higher with only Hong Kong (-0.41%) and Thailand (-0.19%) lower on the day.  In Europe, with the exception of Norway (+0.14%), stocks are lower across the board at mid-day.  The FTSE (-0.73%), DAX (-1.50%), and CAC (-1.46%) lead the continent due to market cap and volume, but losses are widespread in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap-down start to the day.  The DIA implies a -0.64% open, the SPY is implying a -0.73% open, and the QQQ implies a -0.75% open at this hour.  10-year bond yields are lower to 2.137% and Oil (WTI) is up another eight-tenths of a percent to $103.83 in early trading.

The major economic news scheduled for release on Friday is limited to Feb. Existing Home Sales (10 am).  However, remember that it is also “quadruple witching day” with stock index futures, stock options, options on stock index futures, and stock index options all expiring.  So, there may be some pegging, rolling or volume anomalies in the afternoon.  There are no major earnings reports either before or after the market on Friday.

Markets have had a very strong week on the back of back-to-back-to-back strong days. This makes all 3 major indices quite extended in the short term. So, rest or pullback would be the normal expectation. Also remember, that we are still in a downtrend. So, be careful chasing that optimism or getting any more net-long at this point. Finally, don’t forget this is Friday with a weekend news cycle ahead. Despite the recent optimism, there is a war going on at the doorstep of Europe (2nd or 3rd largest economy/market in the world) and sanctions going on that the IMF thinks will hurt the global economy. So, risk definitely exists. Finally, don’t forget it’s Quadruple Witching Friday and we may see some seemingly squirrely moves today, especially in the afternoon.

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: No trade ideas today. 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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