Markets gapped up (slightly in the large-caps and a percent in the QQQ), but then put in a sideways chop that was not far from the highs until the last 10 minutes of the day.  However, Friday ended on a massive selloff on heavy volume to end the week on a down note.  The DIA went out near the lows on a big black-bodied candle while the SPY was a little less decisive and the QQQ put in a black Spinning Top candle.  On the day DIA lost 1.42%, the SPY lost 0.52%, and the QQQ eked out a 0.42% gain.  The VXX fell 4.53% to 16.03 and T2122 fell well into the oversold territory at 10.87.  10-year bond yields fell to 1.407% and Oil (WTI) fell almost 3% to $61.66/barrel.

As expected, late Friday night the House passed the $1.9 trillion relief bill and sent it on to the Senate. As was mentioned Friday, the Senate Parliamentarian has already ruled that the Minimum Wage increase must be stripped out of the Senate version. So, while the Republicans are expected to put up a fight (mostly staking out political positions for the 2022 elections), the bill is expected to pass the Senate, be reconciled with the House and be signed into law in the next two weeks.  As a side note to the ruling by the Parliamentarian, some Democrats are already working on ways to rewrite tax laws to punish large corporations who do not “voluntarily” raise their minimum pay to the $15/hour level.  However, it is unclear if that can make it into law.

Berkshire published Warren Buffett’s annual letter to investors this weekend.  This year Berkshire leaned on stock buy-backs (almost $25 billion worth) instead of deals or company performance to power stock price.  In the past, Buffett derided buybacks as a sign of a company’s management having no better ideas on how to invest.  Bloomberg even published a front-page article critical of this year’s letter, which gave little insight compared to previous years.  It failed to mention the pandemic or climate impacts on the economy or even on the company’s major insurance units.  He did say AAPL was a valuable position for the company (although they unloaded a sizable portion of their position in Q4) and said they paid too much for a $37 billion acquisition 5 years ago.  It also came out that Berkshire owns more of a Chinese electric vehicle maker BYD that does GM, who is another major BYD investor

Related to the virus, US infections are plateauing at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 29,255,365 confirmed cases and deaths have now passed half a million at 525,778 deaths.  As mentioned, the number of new cases fell again over the weekend to an average of 68,966 new cases per day.  Deaths, which have always lagged, seem to fall again to 1,989 per day.  Late Saturday the FDA approved the JNJ 1-shot vaccine for emergency use.  This means 4 million additional doses of vaccine will be available this week and the company has promised to deliver 20 million by the end of the month.

Globally, the numbers rose to 1134,753,130 confirmed cases and the confirmed deaths are now at 2,544,452 deaths.  The trends have been good, but we saw a significant uptick today.  The world’s average new cases has up-ticked slightly again to 385,430 per day.  However, mortality ticked down again, now at 8,966 new deaths per day.  In Europe, the UK is desperately seeking to find one of the 6 cases of the Brazil variant that they have identified.  However, data also shows that their vaccination program is having an effect, with deaths among the elderly down dramatically in the last month.  Meanwhile, in Germany, the government reports that the UK and South African variants now account for most of the cases seen in their country.

Overnight, the few Asian markets were mixed, but mostly in the green.  Taiwan (-3.03%) and South Korea (-2.80%) were large outliers.  However, Japan (+2.41%), Shenzhen (+2.42%), and Australia (+1.74%) are more typical.  In Europe we are seeing green across the board so far this morning.  The FTSE (+1.37%) and CAC (+1.25%) are pacing gains with the DAX (+0.87%) a bit behind.  As of 7:30 am, US Futures are firmly in the green and pointing to a gap up.  The DIA is pointing to a -+0.90% open, the SPY is implying a +0.98% open, and the QQQ is implying a +1.19% open at this point.

The major economic news for Monday is limited to Feb. Mfg. PMI (9:45 am), Feb. ISM Mfg. PMI (10 am), and a Fed speaker (Williams at 9 am).  Major earnings reports on the day include BRKB, CORE, CVET, XRAY, FMX, MIDD, and TGNA before the open.  Then after the close, MELI, PRGO, SGMS, and ZM report.

US Futures popped early Monday as inflation fears seem to have come off the front burner. Perhaps it is the new vaccine (JNJ) in the toolbox that has markets looking to run this morning. Regardless, the bulls look to be in-charge when the opening bell rings. That said, the trend has been to the downside of late. So be careful calling a reversal…volatility and intraday reversals have been the norm in the recent chop.

Follow the trend, respect support and resistance, and don’t chase those moves that you miss.  Another trade will come along any minute. So, achieve your ambitions in the long-run by taking short-term trade goals off the board as they are met, over and over again. Forget about predicting reversals or breakouts. Book your trade goals when you can and stick with your discipline. 

Ed

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