Bulls Looking to Start Week Strong

Friday was a lackluster day, but bullish after the PMI Indices showed strong economic activity so far this month.  On the day, all 3 major indices were up a fraction.  The SPY closed 0.35% higher, the DIA up 0.51%, and the QQQ up 0.69% (mostly on the back of AAPL’s pre-split gains.  This gave both the SPY and QQQ new all-time high closes. The VXX was flat at 24.62 and the T2122 4-week New High/Low Ratio was also flat at 37.41.  10-year bond yields were down just a touch to 0.635% and Oil (WTI) also fell to $42.26/barrel.  On a weekly chart, both the SPY and QQQ certainly look extended.  However, that certainly has not deterred the bulls yet.

In weekend Tech news, in an “interested third-party” statement, MSFT has warned a US District Court that AAPL blocking of Epic Games from the App Store is detrimental to gaming industry (including MSFT) and to market competition.  In other tech news, CNBC reported that FB CEO Zuckerberg had warned President Trump and lawmakers at an October dinner of a grave threat to the prospects of US tech companies that was posed by Chinese tech firms like TikTok.  Shortly afterward, a national security review was launched and the President started his Executive Order campaign.

On the virus front, in the US, the numbers show we now have 5,874,295 confirmed cases and 180,605 deaths.  The good news is that new cases continued their recent trend down from the July highs.  However, the 7-day averages remain stubbornly above 43,300 new cases and 989 deaths per day.  On Saturday the CDC announced that during the first 7 months of 2020, the US had 215,000 “more deaths than usual.” This suggests the number of virus deaths could be significantly higher than the 170,000 that was reported at the end of July.  In treatment news, Sunday the FDA expanded the use of “convalescent plasma” as a treatment by giving expanded emergency use authorization.

Globally, the numbers rose to 23,612,908 confirmed cases and 812,991 deaths.  In Asia, South Korea suspended in-person classes at the 1,900 schools across their nation as just under 300 students and 80 faculty members have tested positive since the country began a phased return to class.  The country’s President Moon warned of a total lockdown if the new level of alert does not stop the new spread.  However, in the quarantined Australian Victoria state, progress was reported with the fewest new cases in 7 weeks reported in the last 24 hours.

Overnight, Asian markets were overwhelmingly, but not totally green as Malaysia lost half a percent.  However, Hong Kong, Shenzhen, and Thailand all turned in over 1% to the upside.  The rest showed lesser gains.  Of note were massive gains in IPOs on the China’s NASDAQ-like ChiNext board.  This follows a reform that allows IPOs to trade freely during the first 5 days of post-IPO trading.  The same general situation is true in Europe this morning as only Athens shows red.  However, the bulls are even stronger in Europe as the big 3 indices are all up about 2% as of mid-day.  In the US, at 7:30 am, the futures are pointing to a gap higher of between 0.82% (SPY) and 0.98% (DIA), with the QQQ in between.   

There is no major economic news for Monday.  There are also no major earnings on the day.  However, the first of 2 hurricanes are expected to make landfall in the US, in MS or LA on Monday.  (The other on Wednesday at an unknown gulf-coast location.)

On Friday the bulls had a nice day within the recent consolidation range in the large-caps.  The tech-heavy Nasdaq continued their rally.  There simply have been no bears to be seen for some time.  That said, it still feels like markets have been drifting while they wait on political conventions and Congressional vacations to end.  The trend still remains bullish, but the election-year summer doldrums have clearly been in effect.  That may be ending this morning with the bulls looking to make another run toward the blue sky.

Continue to follow the trend and stick to your trading rules.  Don’t chase moves you have missed.  Don’t try to predict reversals or breakouts.  Above all, remember, our job is to be consistently profitable, not get rich quick. 

Ed

The Daily Swing Trade Ideas for today: NKE, AMD, COST, YUM, JCI, QCOM, GLW, MAS. 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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