Thursday saw a dramatic turn-around as a major Russian Invasion gap-down across the board was met by a strong all-day rally that closed near the highs in all 3 major indices as well as the small-caps (IWM).   This led to Bullish Belthold signals and green days in all 4 indices.  (Remember that all candle signals require confirmation.) On the day, SPY gained 1.43%, DIA gained 0.25%, and QQQ gained a massive 3.36%.  This was a tremendous feat after they had gapped down between 2.5% and 3.5%.  VXX lost 3% on the day to 23.94 and T2122 jumped up out of the oversold territory to 25.54.  10-year bond yields recovered from their premarket lows to close down modestly to 1.965% and Oil (QTI) gained 1.35% to $93.25.

The Russian invasion continues today as Russian troops near the Ukrainian capital of Kyiv.  Meanwhile, the West is claiming they are now instituting “crippling sanctions.”  However, that’s debatable since neither of the so-called “nuclear sanctions” was issued.  (Those being tariffs or embargoes placed on the main Russian exports of Oil, Nat. Gas, and Wheat as well as Russia being kicked out of the SWIFT payment system, which would have made all international trade very hard and very expensive.)  The main sanctions that were put in place are the freezing of Russian bank assets and a prohibition on those banks from raising funds in Western financial markets.  However, it is theoretically possible that Germany, Spain, Italy, and other holdouts may still change their minds on those hammer-blow sanctions as the invasion and occupation wear on.  The bottom line is that, as of now, Markets do not perceive major disruptions or problems for the global economy from the invasion.

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In other news, Q4 GDP came in at 7.0% as expected and the Weekly Initial Jobless Claims were very slightly better than expected.  However, Jan. New Home Sales came in slightly less than expected and, interestingly, Crude Oil Inventories came in much higher (4.1 million barrels higher) than was expected.

On the earnings front, after the close, OXY, VMW, SQ, ADSK, ETSY, COIN, UHS, TIMB, SFM, and AAN all reported beats on both lines.  Meanwhile, HKXCY, HEI, FTCH, TPC, EIX, and TV all reported beats on earnings but missed on revenue.  On the other side, EOG, DELL, AEM, CVNA, OPEN, and OPK beat on revenue but missed on earnings.  However, INTU and RKT missed on both revenue and earnings lines.

So far this morning, CM, SRE, NTIOF, LAMR, ICAGY, CRI, CNK, MODV, and SAFM have reported beating on both lines.  Meanwhile, LI, SSREY, GTN, and CLMT missed on earnings but beat on revenue.  On the other side, FL and TV missed on revenue but beat on earnings.  However, QRTEA, SSP, and GVA have reported misses on both lines.

Overnight, the Asian markets were almost green across the board.  Hong Kong (-0.59%) was the only red in the region.  Meanwhile, India (+2.53%), Japan (+1.95%), and Shenzhen (+1.21%) led the bounce back.  In Europe, the rebound is stronger with significant gains all across the continent at mid-day.  The FTSE (+2.41%), DAX (+1.63%), and CAC (+1.99%) can even be said to be laggards in the rebound as most of the smaller exchanges have moved more.  Even Russia (+12.21%) has bounced quite a bit as the sanctions were not as harsh as feared.  Of course, Europe still has an afternoon of trading before they can book this rebound.  As of 7:30 am, US Futures are pointing to a modestly red open.  The DIA implies a -0.40% open, the SPY is implying a -0.35% open, and the QQQ implies a -0.23% open at this hour.  10-year bond yields are up to 1.993% and Oil (WTI) has bounced back half of a percent in early trading.

The major economic news scheduled for Friday includes Jan. Durable Goods Orders, Jan. PCE Price Index, and Jan. Personal Spending (all at 8:30 am), and Michigan Consumer Sentiment and Jan. Pending Home Sales (both at 10 am).  The major earnings reports scheduled for before the open include AES, CLMT, CM, CRI, CNK, SSP, EVRG, FL, GTN, IEP, LI, MODV, PNW, QRTEA, SRE, and VST.   There are no reports scheduled for after the close.

The bulls in the US showed incredible resilience in the face of Russia’s invasion yesterday. For example, the QQQ saw a 7% swing from the opening lows to closing highs. That being said, one gap-down rebound candle does not break the bearish trend and certainly does not mean a new trend has started. We also need to recognize that the volatility is extremely high. (For example, the ATR5 of QQQ is $13.) So, if you’re going to trade in this environment, be fast, be hedged, and be prepared to withstand significant volatility. Do not be the guy that assumes he picked the bottom and will feel no pain. Also, keep in mind that this is Friday and there is a weekend news cycle in front of us (which can be forever when there is a hot war on the doorstep of a huge part of the world economy…the EU).

Ask yourself whether you have an edge in this sort of volatility. If not, sitting on your hands may be the best move you could make. Remember that you don’t have to trade every day. Trading is a marathon, not a sprint. So, stick to your trading rules and manage the things that you can control. When you do trade, trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. 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.) Be careful out there.

Ed

Swing Trade Ideas for your consideration and watchlist: UPST, NKLA, PLUG, GME, HACK, CF, ZEN, MSFT, CHGG. 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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