Markets gapped up about two-thirds of a percent higher in the large-caps and above 1.4% in the QQQ.  After the gap-up, large caps ground sideways, while the QQQ sold off before starting its sideways grind about 11am.   This left us with a Gap-up Doji in the SPY, a large white bullish candle in the DIA (which closed at an all-time high close), and a large ugly black candle in the QQQ.  On the day, DIA gained 1.48%, Spy gained 0.58%, and QQQ lost 0.29%.  The VXX fell over a percent to 14.60 and T2122 rose deep into the overbought territory at 96.05.  10-year bond yields fell slightly to 1.521% and Oil (WTI) rose a percent and a quarter to $64.80/barrel.

The economic news on the day was that there was enough demand for 10-year bonds at the government auction that yields pulled back slightly (higher bond prices mean lower bond yields).  However, the demand was not enough to drive bond yields down strongly.  All-in-all, this is an indication the bond market thinks inflation is in check for now.  In addition, the House passed the $1.9 trillion relief bill as expected.  So, we can expect consumers to have an injection to start spending as soon as the end of the month.

Related to the virus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,862,124 confirmed cases and deaths have now passed half a million at 542,191 deaths.  As mentioned, the number of new cases fell again to an average of 57,621 new cases per day.  Deaths, which have always lagged, was flat at 1,477 per day.  President Biden directed the DHS to purchase 100 million more doses of the JNJ vaccine on Wednesday.  In addition, more states eased restrictions on the day.  MD is allowing “high traffic” businesses like restaurants, gyms, and retail to open without restrictions.  CA announced they will be opening theme parks and outdoor stadiums as of April 1, although at reduced capacities.

Globally, the numbers rose to 118,739,789 confirmed cases and the confirmed deaths are now at 2,634,166 deaths.  The trends have been good, but we saw a significant uptick today.  The world’s average new cases have up-ticked again slightly to 408,286 per day.  Mortality, which lags continued to tick down slowly, now at 8,517 new deaths per day.  In Central and Eastern Europe, the pandemic is picking up steam again.  Among the countries seeing a “third wave” are Poland, Czechia, Ukraine, Romania, Serbia, Bulgaria, and Hungary.  Meanwhile Denmark has suspended use of the AZN vaccine after reports that a number of patients have developed blood clots after vaccination.  In Brazil, for the 2^nd straight day, that country reported a new record number of covid deaths, this time almost 2,300.

Overnight, Asian markets were strongly in the green.  China led the gainers with Shanghai and Shenzhen both posting +2.36%, Hong Kong up +1.65%, and Taiwan up +1.68%.  In Europe, markets are mixed, but leaning to the green side so far today on modest moves.  The FTSE (-0.27%) and DAX (-0.08%) are slightly lower, while the CAC (+0.16%) is slightly higher.  The smaller exchanges are leading to the upside such as Portugal (+1.44%) and Denmark (+1.20%) at this point in their day.  As of 7:30 am, US futures are pointing to a gap higher.  The DIA is implying a +0.31% open, the SPY implying a +0.67% open, and the QQQ implying a major gap up of +1.75% open.

The only major economic news on Thursday are Weekly Initial Jobless Claims (8:30 am) and Jan JOLTS (10 am).  Major earnings reports before the open include GCO, JB, OPCH, PAE, PRTY, and REV.  Then after the close, ULTA and MTN both report.

It looks like traders are reversing the recent rotation into value names this morning. The Tech sector, which has been beaten up in the recent pullback, is looking to roar back on broad pre-market moves. There may also be general market optimism as leaks from the White House suggest President Biden will lay out a “path to normalization” in his speech tonight. Regardless of the reason, it looks like the bulls are chasing back toward new all-time highs across the board.

With that said, don’t blindly chase the gaps you miss. Make sure you are not buying into a volatility move or fade of that gap. Follow the trend, respect support and resistance, and remember another trade will be along any minute. So, control your FOMO. However, also do not try to predict reversals, just follow the market. Most importantly, keep taking your trade goals (profits) off the table when you can and stick to your discipline.  Consistency is the key, not occasional home runs.

Ed

Swing Trade Ideas for your consideration and watchlist: HON, VZ, HAL, KR, JPM, ATKR, K. 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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