Tuesday saw markets gap down at the open and then follow through as traders took profits in front of the after-hours big tech reports to come.  However, the bulls could not be kept down all day as they came back in the last couple of hours of the day.  This led us to close well up off the lows, creating Hammer-type candles in the large caps with the DIA even closing as a white body hammer.  Still, on the day SPY closed down 0.46%, DIA down 0.22%, and QQQ down 1.09%.  The VXX gained 3.4% to 30.86 and T2122 remains in mid-range at 53.33.  10-year bond yields fell sharply to 1.238% and Oil (WTI) was down a fraction to $71.78/barrel.  Most other commodities were down as well, even as the dollar was lower on the day.

During the day, the virus made more headlines as Delta variant infections are spiking, although thankfully without a corresponding spike in deaths.  The CDC reported that the new studies indicate that previous infected/recovered or vaccinated people can spread the Delta variant.  As a result, they are now calling for people to again wear masks indoors, regardless of vaccination status in areas where the infection rate is up (essentially the entire South of the country).  Bloomberg also reported several instances of major employers telling employees to “get vaccinated or get a new job.”  This comes as the White House reported it is considering a vaccination mandate for Federal employees.

After hours, AAPL, MSFT, and GOOG all reported massive beats on both lines.  AAPL reported the iPhone sales increased 50% year-over-year and GOOG gave us a 41% beat on earnings as examples.  Beyond those “big 3,” the rest of the after-close reports also all came in positive.  There was not a single miss on earnings among the 20 majors reporting, with only 2 missing on revenue.  So, the strong earnings story continues, although it is not the earnings, but the reaction that matters.  That being the case, all the major tech names and futures fell on the reports.

So far this morning, the strong earnings season continues.  Every report includes a beat on earnings and only GD has missed on revenue.  MCD, BA, PFE, BMY, HUM, TMO, and others all reported very strong quarters, in most cases handily beating the expectations of analysts.  In other morning news, mortgage rates dropped to a 6-month low of 3.01%.  This caused refinance home loans to jump 9% week-over-week. However, new home loan applications fell 2% for the week.

Overnight, Asian markets were mixed but mostly lower on the day.  Hong Kong (+1.54%) led the comeback after successive days of beatings.  On the other hand, Japan (-1.39%) paced the losses after acting as a safe haven the prior couple of days.  In Europe, stocks are mostly green with only Greece and Norway bucking the trend.  The FTSE (+0.19%), DAX (+0.20%), and CAC (+0.69%) were fairly typical of the modestly green trading at mid-day.  As of 7:30 am, US Futures are pointing to a mixed and modest open.  The DIA is implying a -0.14% open, the SPY implying a +0.07% open, and the QQQ implying a +0.28% open.  The dollar is up so far this morning and so are 10-year bond yields, now at 1.261%. 

The major economic news scheduled for release on Wednesday includes June Trade Balance and June Retail Inventories (both at 8:30 am), Crude Oil Inventories (10:30 am), Fed Rate Decision and Fed Statement (both at 2 pm), and Fed Chair Press Conf. (2:30 pm).  The major earnings reports scheduled for the day include AMG, APH, ADP, AVY, BA, BMY, BG, GIB, CME, CSTM, EXP, EEFT, EVR, FMX, GRMN, GNRC, GD, GSK, HES, HUM, LFUS, MHO, MCD, MCO, NSC, ODFL, OC, PAG, PFE, ROL, R, SC, SHOP, SLGN, SPOT, SCL, TEL, TDY, TEVA, TMO, TNL, UMC, VRT, and WNC all before the open.  Then after the close, ACCO, AFL, AEM, ALGN, ALGT, ATUS, NLY, AR, ASGN, AVB, BHE, CP, CG, CHDN, CMPR, CINF, CNO, CTSH, FIX, CYH, ECHO, ESI, ENSG, EQT, EQIX, RE, FB, F, FBHS, GFL, HIG, HOLX, IR, INVH, KGC, KL, LRCX, MTH, MEOH, MAA, MKSI, MOH, MUSA, MYRG, ORLY, OII, PYPL, PTC, QCOM, RJF, RBC, SIGI, SCI, NOW, SAVE, SSNC, SU, TTEK, TROX, TTMI, URI, WH, XPO, and YUMC report.

With the Fed announcements and the presser coming this afternoon, we are likely to see a wait-and-see game most of the morning. Still, earnings continue to be red hot. In fact, they are so hot that Mr. Market is feeling like the companies may not be able to repeat the performance next quarter, despite raised guidance in most cases. This is the likely cause, at least in part, of the selloffs on the great news.

Remember that you don’t have to trade every day. Trading pre-Fed is like trading through earnings. It tends to be more of a bet as volatility around the Fed meetings is higher and often comes in multiple moves. This is especially true when there is no heavy consensus on what kind of language change might be coming (as today).

If you are taking positions today, be nimble or hedged. So, be sure to manage your current positions first. Don’t chase, stick to your trading rules, and maintain discipline. Success comes from your consistency. This means focusing on the process and managing what you control. Limiting your losses and taking profits when we get them is the key. Remember, trading success is not made in one trade, one day, or one week. It’s about batting your average and adding up those singles and doubles.

Ed

Swing Trade Ideas for your consideration and watchlist: BTBT, REI, BCRX, UAL, XLI, FAS, KR, XHB. 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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