Markets gapped lower at the open Monday and then the bears gave us about half an hour’s worth of follow-through before bobbing along the bottom until noon.  However, then the “intraday reversal” norm kicked in as the bulls stepped in and led a rally that lasted the rest of the day.  This left us with white, large-bodied hammer-type candles in the SPY and DIA while the QQQ came up just short of printing a Bullish Piercing Candle.  With that said, the SPY and QQQ are still a bit extended below their T-line with the DIA closer, but certainly not testing the 8ema yet.  On the day, SPY gained 0.58%, DIA gained 0.68%, and QQQ gained 1.29%.  The VXX fell more than 5% to 24.80 and T2122 rose but remains inside the oversold territory at 14.29.  10-year bond yields fell sharply to 2.822% and Oil (WTI) fell more than 2.9% to $99.07/barrel (which was well up off the lows of the day).

Following through on Sunday’s news, the board of TWTR reversed course and accepted Elon Musk’s offer of $54.20/share to take the company private.  The stock closed up 5.64% to $51.69 after gapping up 4.25% at the open.  The deal is still subject to the approval of a shareholder vote. Assuming the deal closes, this puts the TWTR platform in the hands of one of the company’s former most vocal critics (who happens to have used the platform to break the law, for which he was fined tens of millions of dollars by the SEC).  While he is mainly just a PR man for all his companies, the key question for longer-term investors is how hands-on he will be and what this might mean for TSLA.  Cryptocurrency (and Musk favorite) Dogecoin also jumped 20% on the news, pricing in the hope that he will continue to heavily promote Dogecoin through TWTR.

Also in the afternoon, F announced it expects to increase electric F-150 production by 3.5 times for 2022 over previously announced production numbers (150k units vs. 40k units announced last year).  This would dwarf the production plans from RIVN and GM, which are expected to produce in the area of 10k units during the same period.  The company said it was confident it would hit this production plan and is aiming to have produced over 2 million electric vehicles by 2026.  TSLA, the leader in electric vehicles, has announced, but has not actually shipped any of its own “cyber trucks.”

SNAP Case Study | Actual Trade

Today another AMZN facility in NY will be voting on unionizing.  Elsewhere, the Shanghai area reported a record After the close, CCK, WRB, PKG, OI, AXTA, CDNS, SBAC, and ARE all posted beats on both the top and bottom lines.  Meanwhile, WHR, AMP, and ZION missed on revenues while beating on earnings.  On the other side, UHS and CR beat on revenue while missing on the earnings line.

In economic news, after the close, the USDA updated its Food Price Outlook for 2022.  The new forecast calls for 5%-6% overall food inflation in the US over the remainder of the year.  Included in this number is a forecast 5.5%-6.5% increase in “away from home” food prices.  Elsewhere, also after the close, a survey was released that showed 40% of US small businesses plan to raise prices by at least 10%.  The survey was conducted by the National Federation of Independent Businesses (NFIB) between April 14 and 17 covering 540 of their small business members.  The survey also found that nearly another half of the surveyed companies plan to increase prices between 4% and 9%.

Overnight, the Asian markets were mixed but leaned to the downside as China is again expanding testing and lockdowns for Covid.  Australia (-2.08%), Shenzhen (-1.66%), and Shanghai (-1.44%) paced the losses while India (+1.46%) led gainers by more than a percent over South Korea (+0.42%) and Japan (+0.41%).  In Europe, stocks are mostly green at mid-day.  The FTSE (+0.82%), DAX (+0.89%), and CAC (+1.11%) lead the region higher while only Portugal and Greece show any red in early afternoon trading.  As of 7:30 am, US Futures are pointing toward another down start to the day.  The DIA implies a -0.44% open, the SPY is implying a -0.43% open, and the QQQ implies a -0.48% open at this hour.  10-year bond yields are dropping again to 2.799% and Oil (WTI) is up fractionally to $98.87/barrel in early trading.

The major economic news scheduled for release on Tuesday includes Mar. Durable Goods Orders (8:30 am), Conf. Board Consumer Confidence and Mar. New Home Sales (both at 10 am).  Major earnings reports scheduled for the day include MMM, AAN, ALLE, ARCH, ADM, ARCC, AVY, CNC, GLW, CEQP, DHI, ECL, ENTG, GE, HUBB, NSP, IVZ, JBLU, MSCI, EDU, NTRS, NVS, NVR, PCAR, PEP, PII, BPOP, RTX, ROP, ST, SHW, SCL, TRU, UBS, UPS, VLO, and WM before the open.  Then after the close, ACCO, GOOGL, ASH, AGR, BHE, BYD, CNI, COF, CHX, CHE, CMG, CB, CSGP, EW, EQR, EXAS, FFIV, GM, GOOG, HA, IEX, JPNR, MTDR, MSFT, MKSI, MDLZ, NCR, RRC, RHI, RUSHA, SKX, TER, TX, and V report.

So far this morning, CNC, UPS, VLO, ADM, GE, PEP, MMM, UBS, DHI, SHW, WM, GLW, ATLKY, AVY, GPK, ROPST, JBLU, ALLE, SCL, ENTG, and ARCH have all posted beats on both revenue and earnings.  Meanwhile, RTX, NVS, CJPRY, and MSCI all missed on revenue while beating on earnings.  On the other side, IVZ and ARCC have reported beating the estimates on revenue but missed on the bottom line. Finally, NMR, PII, FANUY, and AWI all reported missed on both lines.

A huge surge of mostly good earnings leads the day’s news. That is saying something, considering that Russian Foreign Sec. Lavrov threatened the West to stop supporting Ukraine by telling an interview that the threat of the war in Ukraine escalating into a nuclear war was “very, very real.” Another wave of those earnings will hit after the close, with MSFT and GOOGL headlining that list. Despite the positive earnings news and even PEP raising its forward guidance, the premarkets look to be taking back much of Monday’s gains. The fear of spreading covid impacts from China (but hitting the global economy) is also weighing on the minds of longer-term investors, which is a headwind for bullish traders. However, remember that both intraday reversals have been the norm for a while now. So, respect that fact and continue to be cautious. Don’t be in a hurry to chase gaps and early moves. It is better to give up a little of the move than to have to suffer through reversal pains after you jump early.

Focus on the process and enjoy yourself. Stick with your 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. So, 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.

Ed

Swing Trade Ideas for your consideration and watchlist: VLO, SYY, TGT, JNJ, IBM, GPRO, PSTG, KSS, PEP. 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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