Markets were indecisive Friday, as details and implications of the first phase of a US-China Trade Deal and the strong Brexit-affirming majority in the UK were being digested. The SPY and DIA closed up 0.06% on Doji candles, while the QQQ closed up 0.33% on a Spinning Top candle. In perhaps an outsized move, the VXX closed down 4.14% as a major source of risk was removed as an overhang. T2122 fell back into the mid-range at 63.43.
Over the weekend, trade negotiator Robert Lighthizer made a lot of news. In the first set of stories, Lighthizer acknowledged a series of concessions on the USMCA deal given not to Mexico and Canada directly, but to US Democrats. To gain passage of the deal, USMCA now includes protections for labor, the environment and excludes some industry-specific prohibitions such as the Pharmaceutical Industry wanted to prevent cross-border drug purchases.
In the second set of articles, he gave more details on the Phase-One Trade Deal with China. He said that while tariffs will be rolled back from 15% to 7.5% on $120 billion in Chinese-made goods, but that the 25% tariff on $250 billion in goods will remain. Of course, all new (planned) tariffs were canceled. Perhaps more interestingly, he also claimed the deal would result in an $80 billion increase (to $200 billion) in exports to China over two years. However, he also said Chinese purchases of US Ag products would be $16 billion (not the $50 billion President Trump claimed Friday). Lighthizer said that plans are to sign the deal during the first week of January.
Lighthizer’s finale for the week was to break the WTO quorum by stopping the appointment of replacement members. This essentially means the WTO is paralyzed and can no longer rule on trade disputes. This gives every country the ability to do whatever they want on trade. And with the US being the biggest economy and major superpower, we can continue to pursue President Trump’s protectionist/confrontational policies without any legal pushback.
The major economic news for Monday includes Dec. NY Empire Mfg. Index (8:30 am) as well as Dec. Mfg. PMI and Dec. Services PMI (both at 9:45 am). There are no earnings scheduled for today. It is worth noting that Sunday night BA reported it was close to making a decision to either temporarily halt or completely discontinue production of the 737 Max. It seems no FAA approval and order cancellations have seriously impacted that plane's viability at least in the short-term.
Overnight, Asian markets were mixed and there remains uncertainty over the actual terms of the US-China Trade deal. In Europe, markets are all bullish, with the FTSE up 2.25% (still flying the election is out of the way). As of 7:30 am, U.S. futures are pointing to a gap higher of between a quarter percent (DIA) and half a percent (SPY and QQQ).
The major economic news Friday includes Nov. Core Retail Sales (8:30 am) and Business Inventories (10 am). There are no major earnings reports on the day.
Overnight, Asian markets were mixed. In Europe, markets are all bullish, with the FTSE up 2.25% (still flying the election is out of the way). As of 7:30 am, U.S. futures are pointing to a gap higher of between a quarter percent (DIA) and half a percent (SPY and QQQ).
Impeachment will make news this week. However, with Senate Republicans not even pretending they'll conduct a real trial, that story is unlikely to have any market impact. So, with the Fed on hold and Phase One of a Trade deal seemingly done, a Santa Claus rally into year-end sure seems like a high probability. We should keep in mind that we’re always just one angry tweet, comment, or unexpected news item from a pullback. So, just remember we are at all-time highs and will likely be extended again soon. Trade the chart we're given, but don’t expect the trend to last forever. We all know market move in zigs and zags. Continue to take profits, move stops, plan your trades, and trade your plans.
Swing Trade Ideas for your watchlist and consideration: BLUE, GGAL, AMRN, FTCH, AAPL, CHGG, PG, WU, FSK, KO, LOW, BURL, MLNX. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about 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.
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.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service