Thursday, we saw about a half of a percent higher in all 3 major indices despite the Weekly Jobless Claims and May Trade Balance both coming in higher than expected.  After that, we saw a slow steady rally that lasted the whole day and closed not far off the highs.  As a result, we had gap-up large white-bodied candles and are now about to approach a retest of the 6/27-6/28 highs.  We also have not broken the longer-term downtrend or put in a higher-high to go with our higher low (create a new bullish trend). On the day, SPY gained 1.50%, DIA gained 1.14%, and QQQ gained 2.14%.  (This was the largest winning streak since March for SPY and QQQ.)  The VXX climbed about three-quarters of a percent to 22.33 and T2122 jumped back up to just inside the lower edge of the overbought territory at 80.68.  10-year bond yields climbed back above 3% to settle at 3.002% and Oil (WTI) spiked 3.7% to $102.16.

In economic news, as mentioned, Weekly Jobless claims came in 5k above forecast (to a 16-month high) and the May Trade Balance came in $600 million above forecast.  Later in the day, crude oil inventories showed a huge inventory build.  Estimates had expected a drawdown of over 1 million barrels.  However, inventories actually climbed 8.24 million barrels, indicating massively decreased demand last week.  Also, Fed members Waller and Bullard said today that they will support a 75-basis-point rate hike later this month.  However, both also said they are currently leaning toward a half-percent hike in September.

In stock news, after the close, LEVI reported a beat on both lines and reaffirmed its forward guidance.  The stock was up more than 5% in after-hours trading.  Elsewhere, GME announced its CFO is leaving the company and more importantly they will launch a program to cut costs and reduce staff (layoffs).  During the day, GME closed up 15% but traded down as much as 10.5% in post-market trade.  In a non-surprise, a report came out after-hours saying the $44 billion TWTR buyout is in serious jeopardy.  It seems Elon Musk and his team have put the efforts to get funding for the deal on hold.  TWTR was down as much as 7.5% in post-market trade.

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In China news, following yesterday’s reports of falling GDP and later of a potential Covid resurgence in Shanghai, the Chinese government is considering a stimulus package. Multiple outlets report the Chinese Ministry of Finance has authorized the sale of $220 billion (dollars) of special bonds with all proceeds going toward the acceleration of infrastructure projects.  These bond sales would be brought forward from 2023 in order to get projects started during the second half of this year.  Not mentioned is the fact that China has already accelerated bond sales to fund projects.  This is evident from the fact that the 2022 bond sales quota was completed during the first half of the year.  Elsewhere, FBI Director Wray and his UK counterpart (MI-5 Director-General McCallum) held a joint press conference in London to warn that the Chinese government is engaged in a massive hacking program.  They described the Chinese hacking as bigger than that of every other country on the planet combined.  The pair said the program was designed to systematically steal technologies and other intellectual property for use in making China economically more prosperous and competitive in the global market.

On the Russian invasion story, German news magazine Der Spiegel reported that the German Economic Minister is considering expropriating the portion of the unapproved Nord Stream 2 pipeline that is located in Germany.  The idea is that Germany would convert that for use as part of a natural gas pipeline from Baltic sources.  On the ground, Russian missile attacks continue at a high pace.  On Thursday, the Russians blew up two large grain storage facilities (hangars) in Odessa. Finally, today the Russian Foreign Minister Lavrov was (for some reason) allowed to speak at the G-20 Meeting in Indonesia.  He used the opportunity to accus the West of spreading “rabid Russophobia.”

In technical analysis news, 145 of the 495 members of the S&P500 are now trading above their 50sma.  This includes AAPL, AMZN, MSFT, GOOGL, GOOG, UNH, QCOM, JNJ, CRM, MRK, PFE, BA, ABBV, NFLX, COST, and VZ.  However, 375 of the 495 are trading above their T-line (8ema).  This includes TSLA, AAPL, NVDA, AMZN, AMD, MSFT, META, GOOGL, GOOG, OXY, INTC, UNH, BAC, JPM, QCOM, JNJ, V, PYPL, AVGO, DIS, MU, CRM, and C.  However, only CI and VRTX are trading very near their 52-week high.  None of the SPY components are trading very near their 52-week lows.

Overnight, Asian markets were mixed but lean to the green side.  Taiwan (+0.89%), India (+0.54%), and New Zealand (+0.51%) led the gains.  Meanwhile, Shenzhen (-0.61%), Shanghai (-0.25%), and Thailand (-0.29%) were the only exchanges in the red across that region.  In Europe, we see the same story taking shape at mid-day.  The FTSE (-0.44%), Russia (-0.68%), and Norway (-0.61%) are the only exchanges in the red in early afternoon trading.  However, the DAX (+0.78%) and CAC (+0.16%) are typical of the range across the rest of the region at this point.  As of 7:30 am, US Futures are pointing toward a mixed start to the day.  The DIA implies a flat +0.02% open, the SPY is implying a -0.16% open, and the QQQ implies a -0.44% open at this hour (in front of the long-awaited June Payroll data).  10-year bonds are back slightly below 3% and Oil (WTI) is flat as we await the big data dump.

The major economic news events scheduled for release Friday include June Nonfarm Payrolls, June Avg. Hourly Earnings, June Participation Rate, and June Unemployment Rate (all at 8:30 am), and a Fed speaker (Williams at 11 am).  There are no major earnings reports scheduled for the day.

At this point, it looks like at least the start of the day will be all about the June Payrolls data. It seems both global and US markets are treading water while waiting on that further clue. Personally, I can’t imagine a seismic shock. We know that there have not been massive layoffs, that we are still in a very tight labor market (2 openings for every applicant), but economic growth is slowing or halted. So, I can image we’ll see a modest increase in Unemployment Rate and a modest increase in average hourly wages. The more important question is the unknown “how will Mr. Market react?” Remember that (Thursday aside) intraday reversals and general market chop continues to be the norm. However, the longer-term trend remains bearish and we have resistance from recent highs and the mid-term downtrend not far overhead. Also, don’t forget that earnings season starts again at the end of next week.

Remember that trading is our job. So, do the work and follow the process. Demonstrate patience and wait for confirmation. Stick with your trading rules, trade with the trend, and consistently take profits when you have them. Always move your stops in your favor and remember the “Legend of the man in the green bathrobe“…it is NOT house money, it’s all our money! (So don’t give very damn much of it back while hoping for a home run.) Another way to put this is Buffett’s first rule of making big money in the market, which is to not lose big money in the market. So, don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. 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. Lastly, remember it is Friday. So, be prepared for the weekend news cycle.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: No tickers 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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