Markets gapped up about a third of a percent on Monday and then continued a slow rally that lasted the whole day, closing very near the highs.  This left us with strong white candles in all 3 major indices, with the SPY closing at an all-time high and the DIA and QQQ both missing that mark by just a fraction of a percent.  On the day, SPY gained 1.42%, DIA gained 0.99%, and QQQ gained 1.65% on very low volumes.  The VXX fell 2.4% to 19.70 and T2122 rose further into the overbought territory at 93.02.  10-year bond yields fell to 1.477% and Oil (WTI) rose almost 3% to $76.00/barrel (despite being down 1.5% early in the morning session).  

US airline stocks all gapped sharply lower on the weekend flight cancellation news.  However, they made a nice recovery, in spite of multiple pieces of bad news.  They had to cancel another 1,000 flights Monday (this time blaming winter storms).  In addition, Dr. Fauci (NIH) told MSNBC that the US should consider implementing a vaccine mandate for all domestic air travel.  When asked for comment on this, the White House referred to last week’s statement by the President saying the measure had been considered, but the consensus recommendation was that it was not necessary at this time.  Despite gap-downs of almost 3%, AAL closed -0.49%, UAL closed -0.65%, DAL closed -0.76%, LUV closed -0.26%, and JBLU closed -0.75% on the day. 

China’s 10-year bond yields fell to their lowest level in 18 months as the Chinese government promised “proactive measures” to stabilize their economy in 2022.  Most analysts believe this will mean adding stimulus to stop the decline in economic growth that is being forecast to be the lowest since at least 1990.  Various ministries, including the Chinese Central Bank, finance ministry, and commerce ministry all commented on the call announcing vague plans to stimulate growth including tax and fee cuts. This could have implications for the corporate world as the second-largest economy diverges from the tightening now underway in the US and west.

GS told its employees Monday that effective February 1, all employees who come in their US offices will be required to show proof of full Covid vaccination (including booster shot).  This includes both employees and visitors to the offices.  In addition, starting January 10, the company plans to double Covid testing to a required twice weekly for anyone entering US offices of GS.  It is unclear if other banks will follow suit, but GS has been the leader which other big banks have followed on covid policy so far.

Overnight, Asian markets were green across the board.  Japan (+1.37%), Shenzhen (+0.83%), and Taiwan (+0.82%) led the gains.  In Europe, markets are green across the board at mid-day, with the lone exception of a slightly red FTSE.  The FTSE (-0.02%), DAX (+0.65%), and CAC (+0.50%) lead the region with the latter 2 being typical.  As of 7:30 am, US Futures are pointing toward another modest gap higher at the open.  The DIA implies a +0.25% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.46% open at this hour.

Overnight, Asian markets were green across the board.  Japan (+1.37%), Shenzhen (+0.83%), and Taiwan (+0.82%) led the gains.  In Europe, markets are green across the board at mid-day, with the lone exception of a slightly red FTSE.  The FTSE (-0.02%), DAX (+0.65%), and CAC (+0.50%) lead the region with the latter 2 being typical.  As of 7:30 am, US Futures are pointing toward another modest gap higher at the open.  The DIA implies a +0.25% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.46% open at this hour. 

With the bulk of traders still away on holiday (as evidenced by light volumes), the bulls had a free path to push stocks higher as we head into year-end. At least early on, this looks to be a pattern that will repeat today. With that said, beware of intraday whipsaw because, with light volume, it would not take nearly as much work to increase volatility and punish those who chase. Remember, plan the trade and trade the plan.

Remember the first rule of making a lot of money in the market is to not lose a lot of money in the market. So, stick to your trade rules and on managing the things you can control. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor.

Ed

Swing Trade Ideas for your consideration and watchlist: ARCE, GMRE, SBS, NVDA, ON, AMD, MSFT. 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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