Markets were relatively (by recent standards) stable on Monday.  After opening flat, the major indices traded in a less volatile manner all day long.  All 3 major indices printed a Doji-type indecisive candle with only the DIA having a Black Spinning Top candle.  On the day, SPY lost 0.05%, DIA lost 0.52%, and QQQ lost 0.40% (on a modest gap-down).  The VXX gained 4% t o 26.01 and T2122 remains deep in the overbought territory at 95.65.  10-year bond yields spiked hugely higher to 2.299% following FOMC Chair Powell’s hawkish remarks.  It was the worst day in decades in the bond market.  Oil (WTI) spiked 7.4% to $112.36/barrel on the day as the EU Parliament was debating the banning of Russian oil imports.

During the day, Fed Chair Powell made a speech explaining his personal position (as opposed to his press conference last Wednesday when he was speaking for the FOMC consensus).  During the speech, Powell said that “inflation was much too high” which jeopardizes an otherwise strong recovery.  He went on to vow the Fed will take tough action in the months ahead, including half percent hikes as soon as May if that becomes more appropriate.  (Futures are now pricing in a 50% chance of a 50-basis-point hike at the next meeting in May.)

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On the invasion story, Russia continues to bombard the city of Mariupol after the Ukrainians refused to surrender the city.  That port city is the last holdout preventing the Russians from having unquestioned control of a land route across the southern border from Russia to Crimea.  The EU Parliament continues to debate banning Russian oil and Germany has reached out to UAE as a source of Natural Gas shipments. President Biden also cited “evolving intelligence” that Russia will be launching cyberattacks on the US.  He urged private sector companies to work with Homeland Security to harden their company cyber security immediately.  Elsewhere, S&P has pulled the credit ratings on all Russian firms, making them uninvestable by most funds.

On the business front, after the close, NKE reported beats on both lines and cited strong demand throughout North America.  This was despite only recovering sales in China, where boycotts of western brands had caused pain and are now rebounding.  The SEC also approved new rules by a 3-1 vote requiring corporations with more than $700 mil in shares to disclose how operations affect carbon emissions (including the offsets they purchase to remain compliant) and how climate change may impact their business starting in 2023.  This follows the same rules in the EU, Britain, and several other countries.  (Public comment of 60-days now starts before the final vote and it is likely to be challenged in court by business interests and associated politicians such as the WV state government.)  Overnight BABA stock spiked as the company announced it is increasing its share buyback plan to $25 billion (from $15 billion previously) over the next 2-year period (by March 2024).

Overnight, the Asian markets were mostly green.  Hong Kong (+3.15%) was an outlier with Japan (+1.48%) and India (+1.16%) leading gainers.  Shenzhen (-0.49%) was by far the biggest loser on the day as most losses were closer to flat.  In Europe, stocks lean heavily to the upside with just a couple of exchanges in the red at mid-day.  The FTSE (+0.47%), DAX (+0.75%), and CAC (+0.61%) lead the continent higher in early afternoon trading.  As of 7:30 am, US Futures are pointing to a modestly green open.  The DIA implies a +0.45% open, the SPY is implying a +0.27% open, and the QQQ implies a +0.14% open at this hour.  10-year bond yields are up briskly again to 2.342% and Oil (WTI) is basically flat at $112.02/barrel in early trading.

The only major economic news scheduled for release on Tuesday are a trio of Fed speakers on Tuesday (Williams at 10:35 am, Daly at 2 pm, and Mester at 5 pm).   The only major earnings report scheduled before the open are CCL and HUYA.  Then after the market close, ADBE, PAGS, and WOR report.

More “Fed speak” today is the closest we will get to economic news with no earth-shattering earnings reports on the day either. So, the Russian story is likely to continue holding center stage. Monday’s indecision was not much rest after the strong rally the prior 4 days. So, markets remain extended. Even if a bottom has already been put in, rest and consolidation clearly remain in order. However, don’t try to predict the market. Just follow the chart. Remember the market can remain “wrong” a lot longer than we can stay solvent being “right too early.” So, be careful of chasing optimism at this point, but recognize that the longer-term downtrend has been broken. We just need to see a higher low hold and bulls to step in to establish the new uptrend.

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: NKE, WFC, F, SBUX, GM, AMD, RTX, MSFT, X, XLE, HAL, UPST. 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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