Markets gapped down Tuesday on higher-than-expected PPI numbers and then put in an indecisive, wide-range day that both retested the T-line (and failed) and the lows from a week ago.  All 3 major indices printed Doji or Spinning Top candles, meaning Wednesday’s action is more important than Tuesday’s wavering candle.  On the day, SPY lost 0.69%, DIA lost 0.24%, and QQQ lost 1.04%.  The VXX rose to 21.93 and T2122 dropped into the oversold territory at 9.96.  10-year bond yields rose slightly to 1.443% and Oil (WTI) fell over a percent to $70.44/barrel.   

On Tuesday, the Senate passed a National Debt Ceiling increase of $2.5 trillion (to $31.4 trillion) along party lines, with one Republican absent.  This is the level they estimate will cover government spending into 2023.  The bill them moved to the House, who took up and passed the measure late last night.  The bill then headed to the President for signature before a government exceeded the debt limit today.

Analysts seem to be moving ahead of the Fed as a wave of downgrades hit Tech stocks.  This signals that they are now focusing less on growth and more on value as the Fed has now said Inflation is priority number one.  Among the names taking a hit after the close were ADBE, DDOG, NET, and ZS. Those stocks all moved significantly lower in premarket trading today. 

Mortgage refinancing applications fell 6% for the week, while new home purchase loan applications rose just 1%.  This happened as 30-year fixed-rate loan interest rates remained at 3.30%. 

Overnight, Asian markets mixed but leaned toward the red side on modest moves.  Hong Kong (-0.91%), Shenzhen (-0.73%), and Australia (-0.70%) paced the losses.  Meanwhile, Taiwan (+0.35%), led the 5 gainers.  In Europe, stocks are mixed, but mostly green at mid-day.  The FTSE (-0.24%), DAX (+0.28%), and CAC (+0.67%) are typical of the spread.  However, there are a couple of outliers like Denmark (+1.07%) and Russia (+1.05%) in early afternoon trading.  As of 7:30 am, US Futures are pointing to an open just on the red side of flat.  The DIA is implying a -0.01% open, the SPY implies a -0.04% open, and the QQQ is implying a -0.22% ahead of morning data.  10-year bond yields are up to 1.45% and Oil (WTI) is down 1.2% in early trading.

The major economic news scheduled for release Wednesday includes Nov. Retail Sales, Nov. Import/Export index, and NY Empire State Mfg. Index (all at 8:30 am), Crude Oil Inventories (10 am), Fed Interest Rate Projections, Fed Economic Projections, Fed Interest Rate Decision, and Fed Statement (all at 2 pm), and FED Press Conference (2:30 pm).  The major earnings reports scheduled for the day are limited to ABM, TTC, and REVG before the open.  Then after the close, LEN, TCOM, NDSN, and HEI report. 

All eyes (and most wagging tongues) will be focused on the Fed today, with widespread expectations that they double the pace of bond-buying taper. However, for my money, the $64,000 question is what they say about how soon we could see a rate hike. Many pundits now expect the statement or press conference to reveal they will end taper in Q1 and might do the first rate hike in March. (This would be at least a quarter ahead of current projections.)

Expect volatility and whipsaw action after the Fed. So, don’t rush into trades before the afternoon Fed news. Stick to your trade rules and on managing the things you can control. Just keep consistently taking profits when you have them and move your stops in your favor. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade carefully, and continue to think twice before holding through earnings…especially without a hedge in place.

Ed

Swing Trade Ideas for your consideration and watchlist: TZA, NEE, AKAM, PFE, TSCO, TSN, MDLZ, BAC, TMSU. 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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