Markets opened flat Thursday and then then proceeded to waffle back and forth above and below the open price (positive and negative) all day long.  This left all 3 major indices above their T-lines (8ema) even though the QQQ did retest (and held) that level earlier in the day.  All 3 of those indices are giving us indecisive, Doji / Spinning Top type candles again on the day.  However, the 200sma remains an issue (overhead for SPY and QQQ, just below for DIA).  Seven of the ten sectors were green.  Energy was far and away the biggest moving sector, up more than 2.66% while Healthcare and Communications Services paced the laggards, down about a half of a percent. 

On the day, SPY gained 0.29%, DIA gained 0.11%, and QQQ gained 0.24%.  The VXX was flat at 21.14, but stocks came back into overbought territory according to T2122 at a reading of 91.15.  10-year bond yields are off just slightly to 2.886%, but oil (WTI) was up 2.58% to $90.38/barrel again.  Overall, another positive rest day in a bull trend on below-average volume.

In economic news, Weekly Initial Jobless Claims came in a bit better than expected with 250,000 new claims (versus 265k forecast and 252k last week).  At the same time, Philly Fed Mfg. Index also came in much better than expected at +6.2 versus a -5.0 forecast and a -12.3 last month.  Taken together, this led some traders to conclude the Fed may still hike rates by 0.75% again in September (assuming the trends hold) as opposed to yesterday’s mainstream view that the hike will only be 50 basis points. FOMC voters Bullard (extreme hawk) and George (slight Hawk) both said as much during the day, indicating they were leaning toward voting for a 0.75% increase at the next meeting.  However, there was also some weaker economic news as July Existing Home Sales came in lower than expected at 4.81 million (versus 4.89 million forecast and 5.11 million in June).

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In economic outlook news, consulting company PwC released the results of a survey of more than 700 US corporate top executives.  The results showed that 52% have also implemented hiring freezes and 44% are rescinding job offers.  However, the headline was that half (50%) of US companies are either currently or planning layoffs in the near future.  In the same survey, 70% say they have implemented permanent remote-work options, but 60% also said they will be requiring employees to be in the office more often starting in September.

In stock news, BBBY closed down 19.63% and traded in a 28% range on the day.  This came as near the close, GME CEO Cohen filed a revised Form 144 with the SEC confirming he has sold his entire 9.5 million share stake (including options) in BBBY for a tidy $68 million profit.  (Not bad for a trade he was in for 5 months.)  His own company, GME (another meme stock), closed down 6.39%. After the close, US safety regulators asked TSLA to provide information about their in-car cameras that are intended to monitor self-driving mode driver awareness.  Elsewhere, SBUX’s COO stepped down as the company eliminated that position in a restructuring. Finally, overnight, RIVN announced they are canceling its lowest-cost electric pickup truck.

In earnings news, after the close, AMAT, STNE, and SHG reported beating on both the revenue and earnings lines. Meanwhile, ROST and TKC both missed on revenue while beating on earnings.  So far this morning, VIPS beat on both lines.  Meanwhile, FL and BKE missed on revenue while beating on earnings.  DE was on the opposite side, posting a beat on revenue while substantially missing on earnings.

Overnight, Asian markets leaned heavily to the red side, with 3 exchanges managing to stay green by only a few hundredths of a percent.  Shenzhen (-1.27%), India (-1.10%) and New Zealand (-1.10%) led the region lower.  In Europe, stocks are mixed, but leaning heavily toward the downside at mid-day.  The FTSE (unchanged), DAX (-0.93%), and CAC (-0.53%) are leading the way lower.  However, a few smaller exchanges have managed to stay green (most notably Denmark +1.17%) in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a gap lower to start the day.  The DIA implies a -0.74% open, the SPY is implying a -0.97% open, and the QQQ implies a -1.09% open at this hour.  In addition, bond yields are up briskly to 2.95% and Oil (WTI) is down more than 2% in early trading.

There are no major economic news events scheduled for Friday.  The major earnings reports scheduled for the day include DE, FL, and VIPS before the open.  There are no major earnings reports scheduled for after the close.  However, also be aware that today is options expiration Friday.

Despite generally strong earnings, the combination of better than expected Weekly Jobless Claims numbers (which means fear of a larger than futures currently are expecting Fed rate hike) and fear over economic outlook have stocks poised to break a 4-week winning streak in all 3 major indices. We also are facing expirations day for over $2 trillion in options at the close today. So, beware some pinning in the afternoon. With that said, the trend remains bullish, but it appears SPY has failed a test (and DIA may be failing today) of its 200sma. The gist is that the bears have the wind at their backs this morning.

Remember that trading is our job. So, do the work and follow the process. Stick with your trading rules, trade with the trend, and take those profits when you have them. Demonstrate patience and wait for confirmation. Don’t be stubborn. If you have a loss, just admit you were wrong, respect your stop, and take the loss before it grows. When price does move in your direction, always move your stops in your favor (remember the “Legend of the man in the green bathrobe“…it is NOT HOUSE MONEY, it’s all OUR MONEY!). Lastly, remember that you get rich slowly and steadily in Trading…not by striking it rich on one or two trades. So, give up that lottery ticket mentality.

See you in the trading room.

Ed

Swing Trade Ideas for your consideration and watchlist: ACAD, AMKR, CIEN, CPB, DOV, FISV, KTOS, OKE, STLD, WTRG, XME, JNPR. 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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