Markets gapped higher, but mixed amounts on Tuesday.  The QQQ jumped up four-tenths of a percent, the SPY eight-tenths of a percent, and on the day that the Dow broke 30,000, the DIA gapped up a full percent.  We then saw a follow-through rally the rest of the morning.  However, markets spent that afternoon grinding sideways, even with large position-covering volume the last 10 minutes of the day.  VXX lost a percent to 18.05 and T2122 held in place deep in overbought territory at 95.84.  10-year bond yields rose again to 0.882% and oil popped 4% to $44.86/barrel as optimism (or relief from uncertainty) over a government transition seemed to buoy markets in the morning.

Mortgage rates dropped again this week to 2.92%.  This move was cheered by borrowers as mortgage applications climbed 4% for the week (19% increase from the same week in 2019).  However, it was refinancing (71% of the applications) that caused most of this activity.  Refinance applications were up 79% year-on-year and at the highest level since April. 

From the “better to be lucky than good sometimes” file, a sidebar to the recent AZN vaccine news.  It turns out the 90% efficacy rate was only achieved under younger patients.  More interestingly, that dosage was only stumbled upon by mistake.  AZN made a systemic error and only gave half doses to a large group of volunteers.  This was only discovered because they reported far fewer side effects than expected.  So, rather than throw out the data and start again, AZN continued and just gave those volunteers a full dose a month later.  It turns out that this 1.5 dose regimen was over 25% more effective than the full 2 doses…at least in younger patients.  The CDC is reviewing the AZN data and hoping to find ways to increase efficacy or reduce side effects in the similar PFE and MRNA vaccines.

On the virus front itself, infections continue to rage as the US.  This surge has raised the US totals to 12,958,805 confirmed cases and 265,986 deaths.  The 7-day average of new cases to 178,692 while a spike in deaths (2,194, the highest since the start of May) saw the average deaths rise to 1,657/day.  Meanwhile, the HHS is conducting a test of the vaccine distribution networks in hope of heading off problems when an approved vaccine is available. 

Globally, the numbers rose to 60,240,061 confirmed cases and the confirmed deaths are now at 1,417,858 deaths. Hong Kong is seeing another rise in cases as new restrictions are to begin.  The WHO says that Europe is still the epicenter, accounting for 44% of new cases and 49% of deaths the past week.  This came as Germany reported another new record daily high in cases.

Overnight, Asian markets were mixed again, but this time leaned to the red side.  Shenzhen (-1.74%), Shanghai (-1.19%), and India (-1.51%) paced the losses.  Malaysia (+1.22%) and Thailand (+1.01%) were far and away the larges gainers.  In Europe, we see a similar mixed picture so far today.  The FTSE (-0.69%), DAX (-0.18%), and CAC (+0.03%) lead the way, but the continent’s exchanges range from -0.94% to +0.81%.  As of 7:30 am, US futures are also pointing to a mixed open.  The DIA is implying a flat open (-0.05%), the SPY a 0flat (+0.08%) open, and the QQQ to a slight gap higher (+0.38%).

There is a large amount of economic data today.  Oct. Durable Goods, Q3 Employment Cost Index, Q3 GDP Price Index, Oct. Trade Balance, Oct. Retail Inventories, and Oct. Core PCE Price Index (all at 8:30 am), Oct. PCE Price Index, Oct. Personal Spending, Univ. of Michigan Consumer Sentiment, and Oct. New Home Sales (all at 10 am), and Crude Oil Inventories (at 10:30 am).  Major earnings reports are limited to DOOO and DE before the open.  There are no earnings reports after the close.

All the data makes the open uncertain at this point. However, remember many traders may already be headed to the door for a long weekend. So, low-volume volatility is quite possible, As always, respect the trend, support/resistance, and price action. Don’t chase moves you have missed (there will be another opportunity) and stick with your trading rules. Our job as traders is consistency, not hitting home runs,

Ed

Swing Trade Ideas for your consideration and watchlist: WRK, DFS, IP, DAR, PWR, XLB, USB, MTCH, SBUX, BA. 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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