Markets gapped down a half of a percent or so on Wednesday as overnight word from NATO said that actually Russia is continuing to bring more troops to the border of Ukraine.  After that gap, we saw a little morning follow-through to the downside before grinding sideways in a tight range until 2pm.  Then the Fed minutes came out with no big unexpected news and markets rallied to the highs of the day before grinding sideways into the close.  This left us with white Spinning Top type candles in all 3 major indices and little change.  On the day, SPY gained 0.11%, DIA lost 0.16%, and QQQ lost 0.03%.  The VXX fell 4% to 20.53 and T2122 was flat and remains just inside the overbought territory at 81.52.  10-year bond yields fell just a bit to 2.029% and Oil (WTI) fell almost 2% to $90.47/barrel.

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We had some good economic news for a change on Wednesday.  January Retail Sales came in almost twice the expected growth at +3.8% (month on month), which isn’t bad considering the prior month included Christmas.  January Industrial Production also came in better than expected at +4.08%.  Crude Oil inventories managed to show a build of 1.121 million barrels when a drop of 1.572 million barrels had been forecast. As mentioned, the January Fed minutes revealed nothing new. The FOMC is ready to raise rates in March but is still divided on how aggressive and how often rates should be raised and how quickly the Balance Sheet should be reduced by selling the bonds they’ve bought in the last 2 years.

After the close, NVDA, CSCO, ET, AIG, AMAT, SNPS, MRO, HST, CYH, ATUS, PXD, UFPI, CNDT, and ALSN all reported beats on both lines. Meanwhile, KGC, ALB, WAB, and OCDX missed on the revenue line but beat on earnings.  On the other side, DASH, TROX, SAM, H, and SPWR all missed on earnings, but beat on revenue.  However, WCN, AWK, CAKE, and PEGA all missed on both lines.

So far this morning, WMT, SO, BAX, WST, POOL, EPAM, LKQ, and OGN have all reported beats on both earnings and revenue.  (WMT also reiterated its forecast for the year, expecting good growth and earnings in the current economic environment.)  Only SEE has reported any miss, as it came in short of expectations on earnings, but beat on revenue.

Overnight, the Asian markets were mostly green on modest moves. Thailand (+0.60%), South Korea (+0.53%), and Shenzhen (+0.35%) led the gainers while Japan (-0.83%) and India (-0.10%) were the only losers.  In Europe, markets are mixed but lean to the downside at mid-day.  The FTSE (-0.50%), DAX (+0.14%), and CAC (+0.22%) lead as usual, but Russia (-2.09%) is an outlier after making claims the Ukrainians are shelling Separatists (really Russians) in the break-away Eastern part of Ukraine. Ukraine denies this claim and says it is a false-flag operation.  As of 7:30 am, US Futures are pointing toward a red open.  The SIA implies a -0.27% open, the SPY is implying a -0.37% open, and the QQQ implies a -0.53% open at this hour.  10-year bond yields are down significantly again (retesting 2%) and (oddly given the news from Russia) Oil (WTI) is off 1.7% in early trading.

The major economic news scheduled for Thursday includes Jan. Building Permits, Jan. Housing Starts, Weekly Initial Jobless Claims, and Philly Fed Mfg. Index (all at 8:30 am).  We also have 2 scheduled Fed speakers (Bullard at 11 am and Mester at 5 pm).  The major earnings reports scheduled for before the market include AAWW, AN, BAX, COMM, EPAM, FRO, GPC, GEO, LKQ, MD, NICE, OGN, POOL, POR, RS, SAFM, SEE, SO, SCL, SYNH, TPH, TRN, USFD, VC, VNT, WMT, and WST.  Then after the close, AL, LNT, AEL, AMN, ATR, ED, DLR, DBX, KEYS, LBTYA, MATX, RLGY, RDFN, RBA, ROKU, TDS, USM, VTR, and AUY report.

Russian claims that the separatists (largely its own forces) in Eastern Ukraine were shelled (and Ukrainian denial and counter-claims it was a false-flag operation) have sent a shiver into European markets and ticked US futures down overnight. However, earnings news and forecasts are good (including Walmart) so far this morning and we have a fair amount of earnings coming before the bell. Expect more volatility and reversals with the market hyper-sensitive to both geopolitical tensions and Fed inflation reaction news (and yes, we have both a Fed Hawk and Fed Dove speaking today). So, stay nimble and/or hedged to volatility, and remember we have both potential support and potential resistance nearby.

Stick to your trading rules and manage the things that you can control. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.) Remember that you don’t have to trade every day and you definitely don’t need to chase the premarket moves by trading early. Trading is a marathon, not a sprint.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today (Rick is on vacation this week). 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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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.

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