On Thursday, the SPY and QQQ gapped higher while the DIA opened flat. From there, all 3 major indices made a morning rally to the highs of the day at about 11 am. However, once again the whipsaw kicked in and a selloff took all 3 indices back down to the open value or below in just 30 minutes before grinding sideways for a couple of hours.  At that point, the bulls rallied us back up to within shouting distance of the highs (or to new Highs in the DIA) again by 2:30 pm.  Finally, a very strong rally in the last 45 minutes tool all 3 major indices out on their highs.  This action is giving us white-bodied candles in the SPY, DIA, and QQQ.  The QQQ and SPY both crossed back above their T-line (8ema) and the DIA is right at that level at the close.

All 10 sectors are green with Basic Materials, Technology, and Consumer Cyclical leading the way higher.  On the day, SPY gained 1.41%, DIA gained 1.00%, and QQQ gained 1.77%.  The VXX is down 0.51% to 19.70 and T2122 crossed back up into the overbought territory at 83.95.  10-year bond yields fell back to 3.03% and Oil (WTI) fell 2.09% to $92.91/barrel.  Once again, this all took place on below-average volume.

In economic news, Q2 GDP came in a -0.6% which was better than the -0.8% forecast as well as Q1’s -0.9% print.  Weekly Initial Jobless Claims also came in better than was expected at 243k (versus 253k consensus forecast) as well as slightly better than last week’s 245k number.  In the afternoon, Fed Hawk Bullard told CNBC that he expects high inflation to persist and that interest rates are not yet high enough to begin curbing price increases.  He went on to say he favors front-loading rate hikes and hopes to convince peers to vote for a benchmark rate of between 3.75% to 4.00% by year-end.  Other Fed voters at Jackson Hole said that whether there will be a 0.75% or 0.50% hike in September is not decided yet and will depend on the 2 additional inflation and multiple jobs reports before the meeting. However, rates still need to rise to fight inflation.

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On Thursday, AMZN announced they had struck a deal with hydrogen fuel cell maker PLUG to supply power to forklifts, long-haul trucks, and building operations starting in 2025.  Part of the deal included PLUG giving AMZN a warrant to buy up to 16 million shares of PLUG with an exercise price of $22.98.  (PLUG closed the day at $30.00.)  AMZN also agreed to spend at least $2.1 billion on PLUG products over the 7-year contract.  Later in the day, the California Air Resources Board voted to require all new cars sold in the state to be electric or electric hybrid by 2035.  However, these regulations must still be approved by the US EPA.

In energy news, Reuters reported Thursday evening that ERCOT (the Texas Power Grid operator) has spent an additional $1 billion to avoid blackouts this summer.  This comes in the form of rewards for industrial customers to cut usage, paying power generators a premium to maintain higher reserves (production capacity).  The state set 11 demand records so far this summer.  Elsewhere, OPEC+ is seeing more support for Saudi Arabia’s stated plan to curb oil supplies to “stabilize world oil markets.”  Iraq, Algeria, Bahrain, Kuwait, Venezuela, Equatorial Guinea, Congo, Azerbaijan, and Libya all endorsed the plan to cut OPEC+ production.  (Clarity on the move should be seen on this plan on September 5 when the group meets again.)  Overnight, the UK Energy Regulator announced that they expect Britons to pay as much as three times last year’s price to heat their homes this coming winter (including an 80% hike in October). Meanwhile, Germany is looking at restricting companies able to benefit from higher natural gas prices amidst public outcry over record energy company profits and soaring consumer costs.

In miscellaneous market news, Texas accused BLK, CS, UBS and other European-listed financial companies of boycotting the state’s huge fossil fuel industry.  (This is part of the state’s anti-ESG investing campaign.)  The state claims it may divest billions of dollars in state pension funds from those companies and their funds.  This may have big market price impacts on those stocks.  For example, the Texas School Teach Retirement fund currently owns large positions in BLK. In unrelated news, after the close Thursday, the CBOE announced that it is in talks with IBKR, HOOD, VIRT and others about taking equity stakes in the recently purchased ErisX crypto exchange (to be renamed CBOE Digital). In telecom news, late last night, Elon Musk (SpaceX) and TMUS announced a joint venture aimed at eliminating cellular dead zones. This backup network will only be available to TMUS customers and initially will only cover SMS messages. However, the (at least initially) no-cost backup service will later be upgraded to cover voice calls and video streaming.

After the close Thursday, GPS, VMW, ULTA, and FTCH all reported beats on both the top and bottom lines.  Meanwhile, DELL and MRVL both missed on revenue while also beating on earnings.  On the other side, WDAY beat on revenue while missing on earnings.

Overnight, Asian markets were mixed but leaned to the upside on mostly modest moves.  Shenzhen (-0.37%), Shanghai (-0.31%), and New Zealand (-0.16%) were the losing exchanges.  Meanwhile, Hong Kong (+1.01%), Australia (+0.79%), and Japan (+0.57%) paced the remaining, gaining exchanges in the region.  In Europe, stocks are mixed, but leaning red at mid-day, but again on mostly modest moves.  Denmark (-1.30%) is an outlier.  However, the FTSE (+0.04%), DAX (-0.41%), and CAC (-0.33%) are leading the region in a modest move lower in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a lower start to the day.  The DIA implies a -0.29% open, the SPY is implying a -0.42% open, and the QQQ implies a -0.57% open at this hour.  10-year bond yields are back up to 3.071% and Oil (WTI) is up 1.3% to $93.74 in early trading.

The major economic news events scheduled for Friday include July PCE Price Index, July Personal Spending, July Trade Goods Balance, and July Retail Inventories (all at 8:30 am), Michigan Consumer Sentiment (10 am), and the Jackson Hole Central Banker Symposium continues with Fed Chair Powell Speaking (at 10 am).  The major earnings reports scheduled for the day are limited to JKS before the open.  There are no reports after the close.

Markets will have their eyes focused on Fed Chair Powell’s speech this morning. While he is very unlikely to tell the bulls what they want to hear, the bears are also not going to get everything they want. Expect him to say some version of “it will depend on coming data” when he addresses September Fed actions. Premarket action is looking like a battle around the T-line in all 3 major indices as traders wake up to a modestly down “wait and see” market. The pullback was broken (at least temporarily) on Thursday. However, the new short-term bullish trend is not running rampant yet. So, caution is in order, volatility is expected, and even if we get a good clue from Powell…it is Friday with a long weekend news cycle ahead.

Demonstrate patience and wait for confirmation. Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

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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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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