Thursday was a divergent day in the markets.  The DIA gapped down half a percent, the SPY gapped down a third of a percent, and the QQQ opened flat.  From there, the DIA rallied on the day, putting in a strong white candle that closed new the highs as a Piercing candle.  The SPY fluctuated all day and ended up as a gap-down Doji.  And the QQQ put in an ugly black candle, but seemed to fine support at the trendline and left a large lower wick.  On the day, DIA gained 0.15%, SPY lost 0.34%, and QQQ lost 0.70%.  The VXX gained 1.5% to 29.33 and T2122 climbed, but remains in the oversold territory at 18.95.  10-yeat bond yields fell to 1.301% and Oil (WTI) fell a third of a percent to $71.42. 

After hours, Treasury Sec. Yellen told CNBC that she expects several more months of rapid inflation.  However, she said that ultimately, she expects prices to fall back to normal levels in 2022.  The main concern she voiced was that lower-income Americans will be priced out of the housing market by home prices that are rising at more than double the CPI.

The Wall Street Journal reports this morning that INTC is in talks to buy Global Foundries. Global Foundries is privately owned and is by far the largest low-end semiconductor manufacturer. Their chips go into most cars, consumer electronics, and industrial machinery.  While not a true direct competitor to TSM and INTC in the higher-end computer chip space, there is enough overlap to cause competitive waves, especially in the long run.

In other stock news from Thursday night, PFE has agreed to pay $345 million to settle an EpiPen price-hike lawsuit.  AAL also canceled the leave of 3,300 flight attendants (furloughed during the pandemic) and announced it will hire 800 more by March 2022 in order to meet travel demand.  In addition, TSLA CEO Elon Musk admitted that there is a chance the company’s new “cybertruck” will be a flop, saying that he doesn’t care because he loves the design.  Finally, Chinese phone maker Xiaomi has overtaken AAPL to become the second-largest cell phone manufacturer behind Korea’s SSGFF (Samsung).

Overnight, Asian markets were mixed but leaned to the red side with Shenzhen (-1.30%), Japan (-0.98%), and Hong Kong (-0.77%) pacing the losses.  Meanwhile, Indonesia (+0.43%) and Singapore (+0.39%) were what passed for the leading gainers.  In Europe, markets are also mixed but leaning to the downside on modest trading.  The FTSE (+0.11%), DAX (-0.14%), and CAC (-0.54%) are a good indication of the spread on the continent at mid-day.  As of 7:30 am, US Futures are pointing to a flat, but modestly green open.  The DIA is implying a +0.11% open, the SPY implying a +0.14% open, and the QQQ implying a +0.18% open.

Major economic news scheduled for Friday is limited to June Retail Sales (8:30 am), May Business Inventories and Michigan Consumer Sentiment (both at 10 am).  The major earnings reports scheduled for the day include ALV, SCHW, ERIC, FHN, KSU, and STT all before the open.  There are no major earnings scheduled for after the close.

Markets look like they will open just on the green side of flat today. The dollar and 10-year bond yields have both ticked up overnight with commodities mixed. (The metals are down, but Ag commodities are higher.) So, we look to end the first week of Q2 earnings reports with mostly great results so far, but concern about inflation. Markets remain very near all-time highs and look extended. However, none of the 3 major indices have broken their trend yet.

The odds still favor sticking with the trend in terms of overall posture. With the long and mid-term trends remaining bullish, don’t get too far out on the bearish side of things yet. However, it’s tough to get too long here either. So, remember you don’t have to trade every day and focus on your open positions first. Don’t chase new positions and remain nimble. Stick to your trading rules, keep taking your profits, moving your stops, and maintaining your discipline. Remember, success is all about consistency…not sporadic big wins. Also, don’t forget its Friday. So, pay yourself and get ready for the 2-day weekend news cycle.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas today. 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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