Markets opened dead flat on Wednesday and stayed that way until the 2pm Fed Announcement. However, markets loved that there were no surprises and rallied hard from 2 pm right into the close. This left us with strong white candles in all 3 major indices, with all 3 closing at yet another new all-time high close (the 4th in a row for DIA, 5th in a row for SPY and 6th in a row for QQQ). The VXX was down 3.5% to 19.82 and T2122 spiked back up into the overbought territory to 92.65. 10-year bond yields rose to 1.602% and Oil (WTI) fell almost 5% to $79.97/barrel.
As expected, the Fed said Wednesday afternoon that they will begin tapering the purchase of bonds later this month. Fed Chair Powell said the taper will see a reduction of $10 billion in Treasuries and $5 billion in mortgage-backed bonds to be bought. There was only a small change in the FOMC’s view of inflation. They still feel inflation is transitory, but now expect those pressures to last well into next year (when they had originally forecast they would end at the beginning of the year).
After the close, QCOM, BKNG, MET, ANSS, ALB, FOX, FOXA, MGM, FLT, QRVO, MRO, MAC, and MATX all beat on both lines. Meanwhile, PXD, DXC, CTRA, and LUMN beat on the earnings line but missed on revenue. EA, TTWO, LNC, and HST beat on the revenue line but missed on earnings. No companies reported misses on both lines last night.
So far today, ZTS, CI, BDX, REGN, APD, SO, ABC, AES, CNP, IRM, NRG, APTV, and XRAY have all reported beats on both lines. DUK, FIS, ZBH, PWR, CTXS, and HII reported beats on earnings but missed on revenue. On the other side, BLL, VIAC, and DISH beat on revenue but missed on earnings. Only MRNA reported misses on both lines, after reporting lower than expected Covid vaccine sales and reducing the forecast for that product in future quarters.
Overnight, Asian markets were mostly green. Shenzhen (+1.30%), Japan (+0.93%), and Thailand (+0.89%) led the gainers, but the green was widespread. Among the 4 showing red, Taiwan (-0.25%) was the most notable. In Europe, markets are green across the board with the lone exception of Russia (-0.54%). The FTSE (+0.05%) is atypical as it lags, but the DAX (+0.52%) and CAC (+0.39%) are representative of the continent at mid-day. As of 7:30 am, US Futures are pointing toward a mixed open. The DIA is implying a flat -0.01% open, the SPY implies a +0.14% open, and the QQQ implies a +0.35% open. 10-year bond yields are down in early trading, but Oil (WTI) is rebounding hard (almost 2%) early to $82.44/barrel.
The major economic news scheduled for release on Thursday includes Sept Trade Balance, Imports/Exports, Weekly Initial Jobless Claims, Q3 Nonfarm Productivity, and Q3 Unit Labor Costs (all at 8:30 am). Major earnings reports scheduled for the day include AHCO, WMS, AES, APD, AEE, ABC, APTV, ARW, BLL, GOLD, BCE, BDX, BLDR, CNP, CQP, LNG, CI, CTXS, CNHI, CFX, COMM, CS, XRAY, DISH, DUK, DNB, ERJ, EPAM, FIS, GEO, GIL, GTN, GPRE, HBI, HWM, HII, NSIT, IBP, IRM, ICL, ITRI, K, KTB, MRNA, MUR, NOMD, NRG, OGE, OPCH, PAE, PZZA, PH, PENN, PPL, PRMW, PWR, QRTEA, REGN, REYN, SO, SRLP, TRGP, TGNA, VIAC, VSTO, VNT, VMC, W, WCC, ZBH, and ZTS before the open. Then after the close, AMRK, ABNB, LNT, ATUS, AIG, COLD, AMN, BGS, BHF, BKD, CVNA, CC, CNDT, ED, CVET, BAP, CWK, DK, DBX, ENDP, EOG, EXPE, FSLR, FND, FTNT, IAC, IHRT, ILMN, LYV, MTZ, MELI, MTD, MCHP, MNST, MSI, NWSA, OXY, ZEUS, OTEX, CNXN, PDCE, PTON, PFSI, PINS, RDFN, RGA, REZI, RKT, SEM, SWLS, SFM, SQ, TDS, UBER, USM, and WELL report.
Once again we got a flood of earnings. And yet again the large majority of them were very positive. Add to that the fact that the market loved the certainty and specifics offered by the Fed yesterday afternoon, and you have a strong bullish setup. However, we also need to remember that we are extended and coming off of many days straight of new all-time highs. So, it is about time for some extension relief in the form of consolidation or pullback.
With that said, bear in mind that the market can remain very extended longer than you can stay solvent being right early. Also, remember that long-term trading success has never come from betting on a reversal to come. The trend is our friend.
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. Watch your current positions before looking to add any new trades. Trade carefully and think twice about holding through earnings.
Ed
Swing Trade Ideas for your consideration and watchlist: BILI, AG, APA, XLE, CVX, ADBE, CHWY, TDOC, DKS, DG 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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