Stocks made a modest gap higher Friday and then went on an all-day roller-coaster ride that ended on an upswing.  This left all 3 major indices as indecisive candles, with only the SPY having an appreciable candle body.  On the day, SPY gained 0.49%, DIA gained 0.43%, and QQQ lost 0.08%.  The VXX was flat at 25.20 and T2122 remained in the overbought territory at 86.77.  The 10-year bond yield spiked higher again to 2.477% and Oil (WTI) went up slightly to $112.58.

As mentioned above, interest rates spiked Friday.  As a result, 30-year, fixed-rate mortgage rates soared to 4.95% on average.  This was the second spike of a quarter percent during the week and, as a result, the average mortgage payment is now 20% (1.64%) higher than one year ago.  Coming into the Spring housing market, when 40% of all home sales occur, this doesn’t bode well for builders and related businesses. In other interest rate news, the 5-year and 30-year bond yields have inverted early today. This was the first inversion since 2006 and could be a harbinger of a recession to come. However, this is not the primary inversion that yield-watchers focus on. The main rate being watched “2-year vs. 10-year,” which remains positive for now.

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On the Russian invasion story, Bloomberg reported Friday afternoon that Chinese companies and diplomats have been pressing the US State Dept. for details on how to comply with sanctions against Russia.  While the Chinese may be looking for loopholes, this is encouraging since there are no secondary sanctions for those who violate the rules.  So, a desire to work within the sanction rules is seen as a bad sign for Russia and a great sign for the West. Elsewhere, the war continues with a tightening of the siege of Mariupol and Russian advances around Kyiv seem to be attempting to cut the capital off as well.

In other China-related news, the city of Shanghai (25 million people, the country’s financial hub, and a major seaport) announced that it will be locked down in two stages, half at a time.  This lockdown is planned for a total of nine days, with the Eastside closed until April 1 and the Westside closed from April 1-5. The city had already been reeling from local lockdowns for a couple of weeks. So, while the total lockdown of half the city at a time will have an impact on supply chains and global trade, the effect will not be as crippling as a lockdown out of the blue.

In a follow-up to a story from last month, it seems a 16-year-old in London has been arrested and released and named as the head of the hacking group Lapsus$.  Apparently, he was only caught when a rival hacking group gave his identity to authorities due to a group rivalry.  This kid, along with 6 friends aged 16 to 21, are the ones that hacked NVDA last month and just last week hacked both MSFT and OKTA.  (The source code to Bing, Bing Maps, and Cortana have been posted online, just like the NVDA source code was a month ago. In addition, the login credentials of 95% of OKTA users have been exposed.  OKTA is an identity/authentication platform used by thousands of businesses for both online and physical access, including NASDAQ.)

Overnight, the Asian markets were mixed but leaned to the downside as most of the gainers were very modest.  Hong Kong (+1.31%) was an outlier on the green side.  However, New Zealand (-1.21%), Shenzhen (-1.02%), Taiwan (-0.89%), and Japan (-0.73%) paced the losses in the region.  In Europe, markets are solidly green with the lone exception of Russia (-2.15%) at mid-day.  (Remember that Russia is now allowing all stocks to trade, but non-Russian investors are still prohibited to sell stock and the Russian Central Bank is putting a floor under their market to prevent collapse.)  The FTSE (+0.72%), DAX (+2.10%), and CAC (+1.91%) are typical of the range of gains in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green open.  The DIA implies a +0.14% open, the SPY is implying a +0.17% open, and the QQQ implies a +0.17% open at this hour.  10-year bond yields are down slightly and Oil (WTI) is off almost 5% to $108.25 in early trade.

Major economic news scheduled for release on Monday is limited to Feb. Trade Goods Balance and Feb. Retail Inventories (both at 8:30 am).  The major earnings reports scheduled before the open are limited to JEF, SAIC, and XPEV.  There are no major earnings scheduled for after the close.

Major economic news later this week include Feb. JOLTS, Conf. Board Consumer Confidence, and a Fed speaker on Tuesday.  Wed. brings ADP Nonfarm Employment, Q4 GDP, and Crude Oil Inventories.  Then on Thursday we get Feb. PCE Price Index, Weekly Jobless Claims, Feb. Personal Spending, Chicago PMI, and a Fed speaker.  On Friday we get Avg. Hourly Earnings, Nonfarm Payrolls, Participation Rate, Unemployment Rate, and ISM Mfg. PMI.

With a heavy dose of economic news in the week ahead, premarket prices are tepidly higher. The massive volatility in energy markets continues to be the standard. The bulls still clearly have the momentum, but there is resistance close overhead from major averages and prior price levels. Be careful of both quarter-end window dressing and intraday volatility as we head into the last 4 days of a quarter of war and inflation-ridden markets.

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 big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: RIOT, BABA, NET, NVDA, PLTR, FSR, LUMN, NKE, CVS, AMD, DGX. 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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