Stocks opened very modestly lower on Thursday and proceeded to wobble around until 11 am when a slow, steady selloff started and lasted until 3 pm. However, that last hour of the day saw a brutal selloff in all 3 major indices only managing to bounce up slightly from the lows of the day. This left us with big, ugly, black candles that gave up the T-line in the SPY and DIA, with the QQQ closing not far above that 8ema. On the day, SPY lost 1.44%, DIA lost 1.50%, and QQQ lost 1.28%. The VXX rose just under 3% to 25.70 and T2122 fell all the way back to the mid-range at 48.02. 10-year bond yields recovered from early lows to close at 2.347%. There was also a 2-year vs. 10-year rate inversion on Thursday, an event that has preceded every recession since 1955. However, the lead time between this inversion and those recessions varies greatly and can be as long as 2 years. Oil (WTI) closed down 6.16% to $101.08/barrel after President Biden confirmed he will be releasing 1 million barrels of oil per day for 180 days from the strategic oil reserves.
The day’s action brought the first quarter to a close. During the quarter, despite a very strong rally over the last 3 weeks, it was not a good 3 months for any of the major indices. SPY lost over 5% for the 3-month period even after rallying well over 8% during the last 13 sessions. DIA lost 4.75% since the first of the year even after rallying 6.4% since March 8th. However, the worst-hit index ETF was the QQQ, which lost almost 10% over the quarter (despite a rally of almost 14% since March 14). All-in-all, this was the worst quarter since 2020.
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On the Russian invasion story, Russian troops have left Chernobyl and the Ukrainians who are back in control of the plant (according to the IAEA) claim a number of the Russian troops received significant doses of radiation during their occupation. The UK has agreed to join the US in releasing oil from their strategic reserves as part of the effort to offset the effects and push for more restrictions on Russian oil supplies. India is hosting a visit from Russian Foreign Minister Lavrov. This comes just after UK Foreign Sec. Truss and US Deputy National Security Advisor Singh were in Delhi pressuring India to stop buying Russian oil (which Russia is selling to India at a discount to keep the sales going).
In business news, AMZN faced unionization votes at both their Bessemer AL (re-vote after AMZN unduly influenced the first vote) and Staten Island NY warehouses on Thursday. As of Thursday evening, no definitive results were announced. However, in AL the union was 118 votes behind with 416 disputed ballots left uncounted. This is far different than last year’s vote where the company won the vote by a 2-to-1 margin. In NY, it looks like the facility will unionize with about 57% of the counted vote favoring unionization as some counting continues today.
Overnight, the Asian markets were mixed with more exchanges green than red. New Zealand (+1.18%), Malaysia (+0.95%), and Shanghai (+0.94%) led the gainers while South Korea (-0.65%), Japan (-0.56%), and Taiwan (-0.38%) paced the losses. In Europe, stocks are green across the board (including Russia +1.94%) with the lone exception of Portugal (-0.33%) at mid-day. The FTSE (+0.26%), DAX (+0.41%), and CAC (+0.53%) lead the way as usual. As of 7:30 am, US Futures are pointing toward a green open to the day (in front of a lot of economic data). The DIA implies a +0.49% open, the SPY is implying a +0.45% open, and QQQ implies a +0.44% open at this hour. 10-year bond yields have spiked back up to 2.406% and Oil (WTI) is flat in early trading.
Major economic news scheduled for release on Friday includes Avg. Hourly Earnings, Nonfarm Payrolls, Participation Rate, and Unemployment Rate (all at 8:30 am), and ISM Mfg. PMI (at 9:45 am). There are no major earnings reports scheduled for the day.
The February Payrolls data, which is expected to be good, will likely have some impact on premarkets. However, at this point, it looks like we are headed for a green start to the day. Let’s hope it isn’t an “April Fools” joke that leads to intraday reversals. With that said, we should continue to expect volatility (especially in energy markets) to continue to be the norm. The bulls still have the momentum and the couple of days of pullback we’ve seen may have been just what the doctor ordered for a continued rally. With that said, don’t get complacent. It is Friday, with a weekend news cycle ahead and a war at the edge of Europe still raging.
The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.
Ed
Swing Trade Ideas for your consideration and watchlist: No Trade Ideas Today 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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