Markets gapped down at the open Friday after AMZN’s terrible report the night before.  However, the bulls stepped in and gave us a gradual and wavy rally most of the day.  Then a strong surge the last 30 minutes took us out near the highs. This meant that all 3 major indices managed to squeak out a new all-time high close on strong white candles.  On the day, SPY gained 0.20%, QQQ gained 0.49%, and DIA gained 0.28%.  The VXX rose slightly to 21.44 and T2122 fell slightly to 68.05.  10-year bond yields also fell slightly to 1.557% and Oil (WTI) rose half a percent to $83.30/barrel.

AAL had to cancel 1,500 flights over the Halloween weekend, citing weather (high winds in Dallas), but also Pilot and Flight Attendant shortages.  As of Sunday, about 1% of AAL’s Monday flights had been canceled.  In other labor-related news, on Sunday Bloomberg reported that a tentative deal has been reached between DE and their striking labor union.  The agreement calls for a 10% across-the-board wage increase. 

Also over the weekend, the G20 approved the 15% minimum corporate tax agreement.  The President also tried to get an agreement on the group working together to solve global supply chain issues.  (It’s uncertain what they could do to solve those issues, but they did discuss the topic.) The same G20 group failed to reach an agreement on how to fight global warming ahead of the upcoming “COP26” climate summit this week. This is critical since 80% of global emissions are produced by G20 countries.  In addition, several more leaders have decided to skip the COP26 meeting. So, no matter where anyone stands on the topic, without a united G20 font, it seems unlikely businesses will face major new carbon costs or forced technology changes coming out of this climate meeting.

As the week starts, markets are looking ahead to both a ton of earnings (175 of the SPY report) and other major data. On Wednesday, the FOMC is expected to announce the beginning of its bond-buying taper (with the betting now forecasting the first rate hike in July 2022).  Toward the end of the week, we will get Jobless Claims, Q3 Productivity, and then October Payrolls on Friday.  So, earnings optimism may continue to energize the bulls, but waiting on more direction may also be the move for many traders.

Overnight, Asian markets were mixed on widely varying trading.  Japan (+2.61%) was a huge outlier to the upside and Malaysia (-2.01%) a huge outlier to the downside.  Hong Kong (-0.88%) was down and Taiwan (+0.48%) as mainland China was flat in front of Chinese productivity numbers coming later.  In Europe, markets are green across the board at mid-day on earnings optimism.  The FTSE (+0.51%), DAX (+0.84%), and CAC (+0.88%) are typical of the continent, with some smaller exchanges moving up over 1% in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a gap higher as confidence about earnings grows.  The DIA is implying a +0.48% open, the SPY implies a +0.45% open, and the QQQ is implying a +0.42% open at this hour.  10-year bond yields are up briskly to 1.582% and Oil (WTI) is up half of a percent in early trading.   

The major economic news scheduled for release on Monday is limited to Mfg. PMI (9:45 am) and ISM Mfg. PMI (11 am).  Major earnings reports scheduled for the day include AMG, CNA, ENBL, BEN, JELD, LDI, L, ON, PCG, and TKR before the open.  Then after the close, ANET, CAR, BRKR, BWXT, CLX, CVI, FANG, FN, HOLX, NSP, KMT, LEG, MOS, NTR, NXPI, PSA, RRX, SBAC, SPG, RIG, TA, UNVR, and WMB report.

Earnings optimism continues in premarket this morning, as to date more than 80% of reports have been beats. However, there is plenty of news that could move markets ahead this week. Stay nimble, and don’t forget that you don’t have to chase at the open. The market will present a good opportunity later…you’re not missing anything that can’t be made up. So, manage your risk.

The trend remains bullish, with all 3 major indices sitting at all-time highs. Keep in mind that long-term trading success has never come from betting on a reversal. So, remember, the trend is our friend. Focus on your trade rules and on managing the things you can control. And that should include consistently taking profits when you have them and moving your stops. Watch your current positions before looking to add new trades. Trade carefully and think twice about holding through earnings.

Ed

Swing Trade Ideas for your consideration and watchlist: FCEL, M, QS, BTBT, BB, BMY, NKE, TDOC, XLV, CHWY. 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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