For the second straight day, markets got unexpectedly strong economic data before the open Friday.  However, they largely ignored the January Payrolls number coming in well over 300k jobs more than expected added as well as larger than expected average hourly earnings.  Stocks went on a wild roller-coaster ride, opening more or less flat, swinging down a percent in the morning, swinging up 2% mid-day, and ending the day on a sharp 1% selloff the last half hour of the day.  This all left us with long-legged, Spinning Top type candles that showed great indecision in all 3 major indices.  On the day, SPY gained 0.47%, DIA lost 0.03%, and QQQ gained 1.26%.  VXX fell to 21.00 and T2122 fell slightly to 27.16.  10-year bond yields spiked again to 1.916% and Oil (WTI) rose almost 2% to $91.92/barrel.

Right before the close on Friday, Bloomberg reported that AAPL will be launching lower-end versions of their iPhone and iPad products.  The report claims the new iPhone SE would have the same design, but a faster processor than the current models, but would sell at a 45% discount to the current flagship model.  The same thing is true of the new iPad offering (45% discount from their current model).  Both products are expected to be announced on March 8.

After hours, PTON stock shot as much as 35% higher after the Wall Street Journal reported that AMZN has approached the company about a potential acquisition of the stationary bike maker.  However, the WSJ also reported that no deal was imminent and that there are other potential buyers considering making an offer for the company behind the beaten-down stock.

Over the weekend, the two largest US discount airlines (ULCC and SAVE) agreed to merge.  The $6.6 billion merger would create the fifth-largest US airline.  Denver-based Frontier (ULCC) would be the senior partner by 51.5 to Frontier’s (SAVE) 48.5 percent, with its current Chairman becoming the Chair of the combined entity.  No CEO has been determined yet and of course, the deal is subject to regulatory approval. However, since the combined company would still only be number 5 in the US and the current airlines serve largely different routes, no major hurdles are expected.

Overnight, the Asian markets that were open were mixed.  (All Chinese markets are closed until Feb. 4th or 5^th).  Overnight, the Asian markets (now back from the holidays) were mixed but mostly green.  Shanghai (+2.03%), Taiwan (+1.28%), and Shenzhen (+0.96%) led the gainers.  Meanwhile, India (-1.73%) and Japan (-0.70%) paced the losses.  In Europe, stocks lean to the upside at mid-day.  The FTSE (+0.46%), DAX (+0.42%), and CAC (+0.15%) are fairly typical of the continent in early afternoon trading.  However, there are 5 exchanges in the red, led by outlier FTSE MIB (-1.07%).  As of 7:30 am, US Futures are pointing toward a flat open.  The DIA implies a dead flat open, the SPY is implying a +0.07% open, and the QQQ implies a +0.17% open at this point.  10-year bond yields are up to 1.925% and Oil (WTI) is down three-quarters of a percent in early trading.

There is no major economic news scheduled for release Monday.  Major earnings reports scheduled for before the market include AMG, CAN, DKILY, ENR, GTES, HAS, ON, IX, TSN, and ZBH.  Then after the close, ACM, AMGN, BAP, KMT, LEG, CNXN, PFG, SPG, TTWO, TDC, and TFII report.  

The premarket futures action looks to be indecisive around the top end of the Thursday-Friday range, with the bulls trying to build on the second small positive week in a row amidst an otherwise volatile and rough start to the year. The is no planned economic news today, but markets will keep a close eye on inflation and even more importantly, the Fed’s response to it. (Bloomberg reported this weekend that the futures have priced six rate hikes in 2022 into the market. This is significantly more than even the worst-case predicted by big banks and twice what the Fed has said they expect.) The point is, the market is in overreact mode to any potential moves by the Fed. Just be aware of this and remain nimble and/or hedged to volatility.

Stick to your trading rules and manage the things that you can control. 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 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. (That’s why we set stops in the first place.) Trading is a marathon, not a sprint.

Ed

Swing Trade Ideas for your consideration and watchlist: BITO, HOOD, VMW, BBBY, MCD, IBM. 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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