Despite a record 11.2% Year-on-Year PPI report before the opening bell, stocks opened flat on Wednesday.  However, at that point, we started a slow, steady rally that lasted the rest of the day.  This left us with large white candles in all 3 major indices and the SPY and DIA both printing Bullish Engulfing candles.  On the day, SPY gained 1.15%, DIA gained 1.03%, and QQQ gained 2.03%.  The VXX fell 4.5% to 24.59 and T2122 shot back up to close just outside the overbought territory at 75.61.  10-year bond yields fell slightly to 2.,701%, and Oil (WTI) gained 3.47% to $104.09/barrel.

AMZN announced Wednesday afternoon that they will be adding a 5% “fuel and inflation” surcharge to all sellers as of April 28 for all users of “Fulfillment By Amazon.”  The vast majority of sellers are expected to raise the price of goods sold through AMZN in response.  (89% of all AMZN sellers use FBA.)  AMZN said their fee amounts to 24 cents per package, which is less than the USP surcharge of 42 cents and the FDX surcharge of 49 cents.

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As if food inflation were not bad enough already, the US is suffering from an outbreak of the bird flu.  So far, 23 million chickens have died across 24 states.  Iowa seems to be the worst-hit state with over 13 million chickens culled in that state so far.  The last outbreak, in 2015, saw 50 million birds die over a six-month period.  So, this outbreak appears to be worse than the last outbreak.  The largest chicken-producer stocks are PPC, SAFM, and TSN, while the largest egg-producing stock is CALM.  Among the companies that consume the most chicken as inputs, we see SYY, HRL, PPC, and TSN. Second-level users of chicken and eggs include MCD, WEN, GIS, and KHC.

In earnings news, so far this morning ALLY, GS, MS, STT, TSM, UNH, and USB have all reported beats on both the revenue and earnings lines.  Meanwhile, RAD beat on revenue, but missed on earnings.  On the other side, PNC and WFC both missed on revenue while beating on earnings.  However, ERIC missed on both lines.

In other stock news, Elon Musk has launched a hostile takeover bid to take TWTR private.  Musk has offered $54.20/share (roughly $43 billion), which is a small 18% premium on Wednesday’s closing price of $45.85.  This move comes less than 24 hours after TWTR investors sued Musk for violating SEC rules and not disclosing he had taken more than a 5% stake in the stock without notifying the SEC within 10 days.  TWTR is wildly volatile in premarket, now at $48.88.

On the Russian invasion story, the Biden Administration confirmed another round of military assistance for Ukraine as reported here yesterday.  The $800 million package includes howitzer artillery, armored personnel carriers, 500 more Javelin missiles, and 300 more Switchblade Kamikaze Drones. Elsewhere, the major defense contractors met with Pentagon officials, who told them to ramp up production of weapons for Ukraine and to expect at least a 2-year war.  These include BA, LHX, RTX, LMT, HII, GD, and NOC.  Interestingly, India’s largest oil refiner has suddenly stopped buying Russian oil and the world’s largest oil trader (Vitol) announced it would also stop buying crude from Russia.  This may indicate they are bowing to pressure from the Biden Admin.

Overnight, the Asian markets were mixed.  Shenzhen (+1.27%), Shanghai (+1.22%), and Japan (+1.22%) led the gainers.  Meanwhile, the broad but modest losses were paced by Taiwan (-0.32%), India (-0.31%), and Thailand (-0.25%).  In Europe, stocks are mostly modestly green at mid-day.  The FTSE (+0.03%), DAX (+0.24%), and CAC (+0.52%) lead the way as usual in early afternoon trading. Russia (-2.16%) is an outlier to the downside for obvious reasons.  As of 7:30 am, US Futures are pointing toward an opening just on the green side of flat.  The DIA implies a +0.21% open, the SPY is implying a +0.04% open, and the QQQ implies a +0.08% open at this hour.  10-year bond yields are down slightly to 2.684% and Oil (WTI) is off eight-tenths of a percent to $103.24/barrel in early trading.

The major economic news scheduled for release on Thursday includes March Retail Sales, March Import/Export Indices, and Weekly Jobless Claims (all at 8:30 am), Feb. Bus. Inventories and Michigan Consumer Sentiment (both at 10 am), and a couple of Fed speakers (Mester at 3:50 pm and Harker at 6 pm).  Earnings season is back as ALLY, C, ERIC, GS, MS, PNC, PGR, RAD, STT, TSM, USB, UNH, and WFC all reporting before the open. There are no major earnings scheduled for after the close.

Also remember that US Markets are closed tomorrow for Good Friday, but we still get NY Empire State Mfg. Index and March Industrial Production numbers.  Also, Friday is Tax Day in the US.

There is a flurry of news to start off the last day of the week. The buzz in the premarket is over earnings and Musk’s TWTR buyout bid. It seemed like markets took the PPI number in stride yesterday, so perhaps the focus has shifted away from economic news and back to specific sectors and charts. With a 3-day holiday weekend ahead, don’t be surprised if volume dries up a bit today in the afternoon. Major intraday reversals have been the rule lately, so beware chasing anything at the open. Continue to be either being very nimble/quick, hedged, or have stops that are loose enough to ride out the whipsaw (and be ready to withstand that short-term pain). Trade carefully and position yourself for the long weekend news cycle.

Remember, earnings season is starting again (check those earnings dates) and also that markets are closed Friday (Good Friday). So, you don’t have to chase trades early this week. 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. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that 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. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: NVCR, ZBH, DAL, CRSP, FSLR, LUV, CMCSA, DASH, ORCL, NEM, ERX. 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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