Markets gapped down significantly, largely in reaction to an unexpectedly bad Weekly Initial Jobless Claims number and a week forecast during the WMT report. However, after the gap, all 3 major indices slowly ground back toward the prior candle. This left all three in white-bodied indecisive Doji or Spinning Top type candles. On the day, SPY lost 0.43%, DIA lost 0.33%, and QQQ lost 0.44%. The VXX was up slightly to 15.66 and T2122 fall back to mid-range at 56.00. 10-year bond yields gained slightly to 1.297% and Oil (WTI) fell almost 2% to $60.08/barrel.
The Congressional hearings Thursday made for a tough day for both Robinhood and Citadel who got blasted by House members on both sides of the political aisle. Citadel was left defending “payment for order flow” while Robinhood CEO Tenev had to defend that business model as well as not allowing customers to buy GME. However, Reddit and Reddit Trader Keith Gill (Roaring Kitty) received praise from both sides. There were also a couple of revelations, such as that over 50% of Robinhood’s revenue comes from payments for order flow (selling customer orders to the highest bidder). In addition, it was disclosed that Citadel is the broker’s largest counter-party, buying most of the orders that Robinhood sells. It also came out that on January 28, Robinhood was nearly out of business when the clearinghouse demanded $3 billion in posted capital and the company could not come up with that amount. (They stayed afloat by negotiating the clearinghouse down to $1.4 billion, which the company could raise from investors.)
The UK version of the Supreme Court has ruled unanimously that UBER drivers are employees, not independent contractors. UBER now has to go back to the country’s employment court to determine what back compensation their workers are due. The threat is that Europe and even US courts could take the same position in the future. However, this court ruling deals a blow to not only to UBER, but to all “gig economy” based companies that have been relying on contractors to reduce costs by transferring responsibilities to workers.
Related to the virus, US infections continue the recent trend of decreasing new cases. The totals have risen to 28,523,524 confirmed cases and deaths have now passed half a million at 505,309 deaths. However, the number of new cases continues to fall quickly and is back down to the October level as the average new cases are now 73,858 new cases per day. However, deaths remain at a stubbornly high level of 2,075 per day. Mid-day on Thursday, WMT’s CEO told CNBC that his customers need another round of stimulus checks and need it quickly. Then in the evening, Treasury Sec. Yellen made her push for a big package of relief, fast in interviews Thursday evening. Along those lines, House Democrats hope to pass their version of the $1.9 trillion relief package next week according to Speaker Pelosi. It appears they will be doing it without GOP support.
Globally, the numbers rose to 110,929,475 confirmed cases and the confirmed deaths are now at 2,454,516 deaths. However, the trends are good. The world’s average of new cases continues to fall quickly and is now down to 361,898 per day. Mortality lags but is also falling, now down to 9,976 new deaths per day. UK PM Johnson has called for the G7 Countries to work together as a coalition to be able to develop vaccines and treatments to pathogens (like the Covid variants) and test them within 100 days. This would be about 3 times faster than the first covid vaccines were rolled out. French President Macron then urged the G7 to donate 4%-5% of their available vaccine doses to developing countries.
Overnight, the few Asian markets were mixed. Australia (-1.34%) and Japan (-0.72%) led the losses, while Shenzhen (+0.75%) and South Korea (+0.68%) led the gains. In Europe, markets are also mostly green so far today. The FTSE (+0.10%) is just above flat, but the CAC (+0.63%) and DAX (+0.52%) are moderately green at mid-day. As of 7:30 am, US Futures are pointing toward a positive open. The DIA is implying a +0.26% open, the SPY implying +0.36%, and the QQQ implying a +0.53% open at this hour.
The major economic news for Friday is limited to Mfg. PMI and Services PMI (both at 9:45 am), Jan. Existing Home Sales (10 am) and a Fed speaker (Rosengren at 11 am). Major earnings reports on the day include DE, DTE, ITT, MGA, and POR before the open. There are no major earnings reports after the close.
With modest data, limited earnings reports, and Congress still not back in DC, the market does not have a clear driver for the day. It is Friday and with the winter storm projected to move into New York City today, we may see some of the big players head home early. The sideways and lower trading of this week has taken a toll. However, the bulls remain in control of the trend in a broader sense. So, beware of volatility (gap and fade we've seen recently) and get positioned for the weekend.
Forget about predicting. Knife-catching is not a good career path. Just follow the trend, respect support and resistance levels, and don’t chase the moves you missed. Book your trade goals when you can and stick to your discipline. If you keep locking in your profits when you have them, you'll never go bust. Remember that trading is a marathon, not a sprint. You don't have to trade every day and don’t try to get rich quick. Do it in the long-run by hitting goals over and over again. Also, remember it's Friday, so don't forget to pay yourself.
Swing Trade Ideas for your consideration and watchlist: DRI, SMAR, DOCU, H, MGM, KO, SAVE, CLSK, IQ, MU. 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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