Markets opened flat to just slightly lower on Monday.  However, stocks then proceeded to sell off until 11:30 am before bouncing along the bottom the rest of the day.  This took us back down into the range of the recent week in the large caps, but the QQQ gave up last week’s range.  All 3 major indices printed ugly black candles.  On the day, SPY lost 0.89%, DIA lost 0.89%, and QQQ lost 1.44%.  The VXX rose 4% to 21.64 and T2122 (4-week New High/Low Ratio) dropped to 32.51.  T2108 (Percent of stocks above their 40sma) fell to 28%, indicating there are relatively few stocks holding the market up.  10-year bond yields dropped to 1.414% and Oil (WTI) fell to $71.13/barrel. 

The so-called “meme stocks” took another beating Monday.  AMC lost over 15% and GME lost almost 14%. BBBY lost “only” 6.5% on the day.  This brings AMC and GME’s total loss for the month to over 30% each.   BBBY is faring a bit better for December, down only 9.7%.

Bloomberg reports that the EU Parliament passed new rules, limiting online content and advertising on Monday evening.  These rules would make significant changes to the way online behemoths operate.  Among the new rules are one that would put major limitations on advertising to minors, prohibit companies from requiring users to submit to online tracking, and would require content providers to take down any posts or materials the EU deems illegal.  Sources told Bloomberg that the entire Parliament must now ratify the rules in January, but that the entire EU Parliament is expected to go for even more restrictions that would prohibit all online targeted advertising.  GOOG, AAPL, and FB could see major changes if this happens and every major advertiser might be impacted if this altered marketing effectiveness.

Last night, on the eve of the Fed meeting, the CEO of MS called for the FOMC to raise rates soon.  He also said, “the Fed is 10 rate increases behind normal (where they should be)”.  It is widely expected that the FOMC will double the speed of their bond-buying taper.  If they do, this will conclude during Q1.  The MS CEO seemed to be calling for a rate increase by March, which would be months sooner than the market currently has priced in and quarters ahead of previous Fed guidance.  (A CNBC survey is predicting the first rate hike in June.)

Overnight, Asian markets leaned heavily to the red side, with only two exceptions, but on mostly modest moves.  Hong Kong (-1.33%), Taiwan (-0.95%), and Malaysia (-0.93%) paced the losses.  In Europe, stocks are more mixed at mid-day, again on modest moves.  The FTSE (+0.46%), DAX +0.07%), and CAC (+0.05%) are fairly typical in the region, with only Denmark (-1.17%) as an outlier.  As of 7:30 am US Futures point toward a slightly lower open.  The DIA implies a +0.08% open, the SPY implies a -0.11% open, and the QQQ is implying a -0.42% open at this hour.  10-year bond yields and Oil is flat in early trading.

The major economic news scheduled for release Tuesday is limited to Nov. PPI (8:30 am). There are no major earnings reports scheduled for the day.  However, as mentioned above, today is the beginning of the December Fed meeting.

Global markets seem to be trying to hold ground waiting to see just what FOMC says on Wednesday afternoon. This “wait and see” stance is likely to make for a dead market today and Wednesday morning. However, it also can magnify the impacts of other news like omicron, politics, etc. So, just be prepared for a market similar to how Naval pilots describe night patrol flights…hours of boredom punctuated with moments (landings) of high anxiety.

Take your time. Don’t rush into trades the first minutes of the day. 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: CNC, TMUS, COST, XLRE, TSLA, TSN, PFE, AMC, ZION, TZA, SQQQ, PTON. 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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