Tuesday was a rough day for markets as a modest gap-down turned into a rout as Fed Chair Powell said the FOMC will discuss accelerating the bond-buying taper by a few months at its upcoming meeting. Markets stabilized and ground sideways from noon on, but closed near the lows. This left us with a Doji-Gap down black candle in the SPY and ugly black candles in all 3 major indices. On the day, SPY lost 1.95%, DIA lost 1.79%, and QQQ lost 1.41%. The VXX rose 15% to 25.47 and T2122 dropped to a very oversold 2.93. 10-year bond yields fell to 1.444% and Oil (WTI) plummeted 4.5% to $66.77/barrel.
In Covid news, before the open, MRNA CEO Bancel told the Financial Times that he expects all existing vaccines to be less effective against the omicron variant. This was a contributor to the gap-down open. In a completely separate report, REGN said their antibody treatment may be less effective against the variant as well. MRNA was down 4.36% and REGN was down 2.73% on the day. What wasn’t stressed is that this is to be expected of mutated viruses and new vaccines and treatments for the variant are already under development.
After the close, CRM beat on both lines. It also announced that it was promoting Bret Taylor (former CEO of a previous CRM acquisition) to Co-CEO alongside one of the founders (Marc Bennioff). In other after-hours reports, NTAP beat on both lines, while GFS and HPE both beat on earnings and missed on revenue.
So far this morning, PDCO, DOOO, GIII, and DCI have all beat on both lines. RY beat on revenue but missed on earnings. Refinance mortgage applications fell 15% for the week as 30-year fixed, conforming interest rates increased to 3.31% on average. However, new home purchase applications rose 5% for the week.
Overnight, Asian markets were mostly green. South Korea (+2.14%), Singapore (+1.87%), and Thailand (+1.41%) led the way higher, but the gains were widespread. In Europe, stocks are green across the board at mid-day. The FTSE (+1.51%), DAX (+1.66%), and CAC (+1.66%) are leading European markets higher in early afternoon trading. As of 7:30 am, US Futures point to a significant gap higher as American markets follow the move higher. The DIA is implying a +0.85% open, the SPY implies a +1.23% open, and QQQ implies a 1.46% open, 10-year bond yields are also up to 1.483% and Oil (WTI) is up 4.43% in early trading.
The major economic news scheduled for release Wednesday includes Nov. ADP nonfarm Payrolls (8:15 am), Nov. Mfg. PMI (9:45 am), Nov. ISM Mfg. PMI (10 am), Crude Oil Inventories (10:30 am), Fed Beige Book (2 pm), and a couple of major speakers (Fed Chair Powell testifies and Treas. Sec. Yellen speaks, both at 10 am). The major earnings reports scheduled for the day include DCI, DOOO, GIII, PDCO, and RY before the open. Then after the close, FIVE, PVH, SPLK, and SNPS report.
The whipsaw is continuing this morning as the cycle of overreaction and snap-back to omicron and Fed news keeps volatility high. This is not an easy market for swing trading, but nimble scalpers are loving what they see. So, be a little leery of chasing into what could turn out to be a pop and drop.
That said, for the agile or hedged, at least a short-term rebound seems to be in the cards this morning. Focus on your trade rules and on managing the things you can control. That should include consistently taking profits when you have them and moving your stops in your favor. Trade carefully and continue to think twice before holding through earnings...especially without a hedge.
Swing Trade Ideas for your consideration and watchlist: XPEV, PLBY, XLE, FSR, AAPL, AMD. 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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