Stocks gapped down about six-tenths of a percent on Tuesday, following Asia and Europe on fears of Covid’s impact through China on the global economy.  Markets then proceeded to sell off all day long.  With that said, the morning and last hour selloffs were much stronger than the mid-day drift lower.  This left us with big, ugly, black candles that were essentially Marubozu (shaved head) candles that closed on the lows.  On the day, SPY lost 2.78%, DIA lost 2.35%, and QQQ lost a whopping 3.77%.  The VXX gained 6.25% to 26.35 and T2122 dropped deep into the oversold territory at 2.88.  10-year bond yields fell sharply to 2.743% and Oil (WTI) spiked 3.7% to $102.14/barrel.

During the day, the US Senate confirmed Lael Brainard as Vice-Chair of the Fed, making her the country’s top banking regulator as well.  This may be of note inasmuch as she has been the lone vote against easing bank regulation on several previous Fed votes.  In other economic news during the day, March Durable Goods Orders, Conf. Board Consumer Confidence and March New Home Sales all came in slightly below the expected number.

In a follow-up to the Elon Musk, TWTR, and TSLA story, it appears traders believe that having his attention split again (between TSLA, SpaceX, Boring Company, and now TWTR) will hurt TSLA.  TSLA stock fell 12.19% on the day (wiping out $129 billion in market cap in the process).  This came on top of the half a percent pullback the stock put in after the announcement on Monday afternoon.

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After the close, MSFT, V, TXN, TNET, TER, MDLZ, MTDR, BHE, JBT, EXAS, CB, EW, COF, AGR, CMG, RHI, RUSHA, SKX, HA, BYD, DHX, FFIV, and ENPH all reported beating estimates on both revenue and earnings.  Meanwhile, GM, MKSI, and CHE missed on revenue while beating on earnings.  On the other side, JNPR and HA beat on revenue while missing on earnings.  However, GOOG, GOOGL, FANUY, and EQR missed on both lines.  With that said, GOOG/GOOGL also announced a $70 billion share buyback program (up from $50 billion last year).  Finally, despite missing on revenue and citing supply chain issues, GM maintained its revenue forecast for the year and raised its earnings outlook.

In non-earnings news after the close, HOOD announced it is laying off 9% of its full-time staff.  The company claimed the layoffs were to get rid of redundancy caused when they grew too fast last year.  Elsewhere, it was also announced that AMZN will not face any OSHA penalties stemming from the 2021 tornado-related collapse of its Illinois warehouse.  In electric car news, LCID announced that they have received an order for 100,000 cards from the Saudi Arabian government.  GM also announced that they have now received 140,000 reservations for their Chevrolet Silverado EV.  The latter two announcements were clearly responses to F announcing massively increased electric F-150 as well as other EVs (600k by 2023 and 2 million by 2026).

On the Russian invasion story, Russia is ratcheting up tensions with the West in a game of chicken.  Russian Foreign Minister Lavrov went so far as to say the threat of nuclear war was “very, very real.”  Later in the day, Russia decided to cut its supply of gas going to Poland and Bulgaria. The suspension was ostensibly because the two countries refuse to change their contracts to pay in Rubles instead of the dollars that are specified in the contracts.  However, another potential reason is that Poland has recently given heavy weapons (tanks, artillery, and perhaps Mig jets) to Ukraine.  For their part, former close Russian ally Bulgaria has led efforts in the EU to sanction Russia and has raised funds to help Ukraine strengthen its defenses.  Elsewhere, for the first time, German Economic Minister Habeck said that a full embargo on Russian oil would be manageable.  Finally, the Justice Dept. also announced after the close that it will be seeking additional authority from Congress to seize and sell Russian assets. Attorney-General Garland said he hopes for the authority to give the proceeds of those sales directly to Ukraine.

Overnight, the Asian markets were mostly red, with the exception of mainland China.  Taiwan (-2.05%), Japan (-1.17%), and South Korea (-1.10%) passed the widespread losses.  However, Shenzhen (+4.37%) and Shanghai (+2.49%) were clear outliers and the only appreciable green in the region. (The China rally came as official data showed that Chinese industrial profits rose 8.5% in Q1. This result shocked analysts who were expecting Covid-related slowed profits.)  In Europe, stocks are green across the region at mid-day, with the lone exception of Greece.  The FTSE (+0.83%), DAX (+0.25%), and CAC (+0.44%) lead the way on market-cap and volume.  However, some of the smaller exchanges are moving more (especially Russia at +3.01%) in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap higher at the start of the day.  The DIA implies a +0.90% open, the SPY is implying a +0.67% open, and the QQQ implies a +0.54% open at this hour.  10-year bond yields are up a bit to 2.767% and Oil (WTI) is up fractionally to $101.99/barrel in early trading.

The major economic news scheduled for release on Wednesday includes Mar. Trade Balance and Mar. Retail Inventories (both at 8:30 am), Mar. Pending Home Sales (10 am), and Crude Oil Inventories (10:30 am).  However, there is a blizzard of major earnings reports scheduled for the day including AMT, APH, ADP, BA, BSX, BG, CVE, GIB, CHKP, CHEF, CME, CSTM, DAN, ETR, EEFT, EVR, FISV, GRMN, GD, GPI, HOG, HELE, HES, HUM, IQV, KHC, MHO, MKL, MAS, NSC, ODFL, OSK, OC, PAG, PRG, ROL, R, SABR, STX, SLGN, SPOT, SHOO, STM, TMUS, TMHC, TEL, TECK, TDY, TRN, UMC, VRT, WNC, and WAB before the open.  Then after the close, AFL, ALGN, ALSN, AMED, AWK, AMGN, AR, ASGN, AVB, AVT, AXS, BMRN, CHRW, CACI, CP, CG, CLS, CCS, CAKE, FIX, CYH, DFS, ESI, EHC, EQT, EQIX, RE, F, GGG, HP, HTZ, HOLX, ICLR, INVH, JBSS, LVS, MAT, MTH, FB, MEOH, MAA, MOH, MYRG, NBR, NEX, ORLY, PYPL, PPC, PINS, PLXS, PTC, QCOM, RJF, RRX, NOW, SAVE, FTI, TDOC, TROX, UCTT, URI, WFRD, WSC, and AUY report.

So far this morning, CNC, UPS, VLO, ADM, GE, PEP, MMM, UBS, DHI, SHW, WM, GLW, ATLKY, AVY, GPK, ROPST, So far this morning, AMT, HUM, BG, GSK, GD, KHC, ADP, TEL, STM, GPI, BSX, ASAZY, SPOT, GIB, DAN, OC, CSTM, TMHC, DASTY, CME, EVR, HELE, WNC, and SHOO have all posted beats on both revenue and earnings.  Meanwhile, TMUS, DB, TECK, UMC, and TDY all missed on revenue while beating on earnings.  On the other side, VRT, CVE, MKL, ETR, and CHKP have reported beating the estimates on revenue but missed on the bottom line. Finally, BA, CS, EEFT, HOG, LYG, RNECY, TLSNY, TRN, and WAB all reported misses on both lines.

Another huge wave of largely good earnings leads the news today. Elsewhere, Europe is so far shrugging off the risks posed by Russia cutting natural gas supplies to two European nations as well as the Germans saying a Russian oil embargo would be “manageable.” With that said, despite backing off overnight highs, it looks like we are back in the “day-to-day chop” mode…at least at the start of the day. Also remember, that despite yesterday being an exception to the rule, we have been experiencing intraday reversals a lot lately. So, do not get caught in any whipsaw you are not prepared to weather. Respect the market condition 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: 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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