Jobless Claims and Biden Stimulus Plan

Markets opened flat and then printed indecisive (Doji or Spinning Top type candles).  The QQQ even formed a sort of “Morning Star type” signal, although the wicks are too large to meet the technical definition.  On the day, the SPY (+0.25%) was up, the DIA (-0.04%) on the red side of flat, and the QQQ (+0.68%) closed higher.  The VXX was down to 16.49 and T2122 (4-week New High/Low Ratio) rose higher into overbought territory at 90.91.  10-year bond yields fell for the first time this year to 1.095% and Oil (WTI) pulled back half a percent to $52.91/barrel.

After the close, Congress impeached the President for a second time with 10 GOP members voting with all Democrats to call for an impeachment trial.  This vote came as  7,000 National Guard troops (of 20,000 expected) and another 1,500 Federal Law Enforcement personnel had already occupied the Capitol because the FBI reported 3 credible threats of terrorism (dated 1-16 through 1-20) targeting those buildings and officials, presumably around the Inauguration event.

The US Budget Deficit grew 61% in December to $144 billion.  Oddly, that number was much better than the $200 billion deficit for the month that was expected. In other good news, Crude Oil Inventories came in a million barrels lower than expected, declining 3.25 million barrels.  In not-so-good news, Fed member Brainard reported that workers in the bottom quartile of salary still has an unemployment rate above 20%.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 23,616,345 confirmed cases and 393,928 deaths.  This comes as we average just over 253,000 new cases and just over 3,400 deaths per day.  JNJ reported after the close that their one-shot vaccine is showing promising results from a tiny set (57) or early-stage study participants.  However, the company also acknowledged a mfg. delay that has put them behind schedule on production of the vaccine (pre-producing in hope it will be approved later).  Meanwhile, Ohio researchers have identified two new US-originating mutations of COVID-19, one of which (dubbed the “Columbus Strain”) is similar to and as contagious as the UK variant.

Globally, the numbers rose to 92,891,624 confirmed cases and the confirmed deaths are now at 1,989,396 deaths.  As a reference, the world is averaging 733,000 new cases and over 13,400 new deaths per day.  A study out of the UK has found that if you catch COVID-19 and recover, your body has approximately 5 months of immunity, but not lifetime resistance.  In other bad news, one of the Chinese vaccines from Sinovac Biotech was found to be only 50% effective in Brazilian trials (versus the 78% effectiveness the company had claimed from Chinese trials).  In Japan, PM Suga declared a state of emergency for 7 additional regions of the country. And in the UK, Health Sec. Hancock is now considering putting COVID-19 patients into hotels to ease capacity pressure on the NHS.  However, while it would surely help make space, that measure would not help any personnel, material or equipment capacity issues.  And in Germany, the government tightened inbound travel restrictions again today, specifically trying to stop the UK and South African mutations of the virus. This after reporting that German 2020 GDP had contracted by 5%.

Overnight, Asian markets were mixed yet again.  Shenzhen (-1.39%) and Shanghai (-0.91%) again paced the losers.  Meanwhile, Hong Kong (+0.93%) and Japan (+0.85%) led gainers.  European markets are leaning to the green side so far today.  Among the big 3 bourses, the FTSE (+0.73%), DAX (+0.20%), and CAC (+0.10%) are all positive at mid-day.  As of 7:30 am, US futures are flat.  The biggest mover is the DIA, which is implying a +0.27% open, while the SPY implies a +0.14% open, and the QQQ implies a -0.06% open.

The major economic news for Thursday includes Dec. Import/Exports and Weekly Initial jobless Claims (both at 8:30 am) and 3 Fed Speakers (Bostic at 11 am, Chair Powell at 12:30 pm, and Kaplan at 1 pm).  The other event that could be caused major economic news is President-elect Biden will unveil his stimulus proposals after the close.  (Sources have told reporters it will be in the $2 trillion price range.)  Major earnings reports on the day include BLK, DAL, FRC, and TSM before the open.  There are no major earnings reports after the close.

With all political drama done, for now, waiting for more economic news or on the outcome of additional threatened acts of insurrection may give the market pause. Also remember that Monday is a market holiday. So, there could be some hedging or profit-taking the next couple days in front ofth e long weekend. Again, we can look at the bright side of this sideways action helping work off over-extension.

As always, follow the trend, respect both support and resistance, and don’t chase the moves you have missed.  Lock in those profits (base hits are the way we build consistency) and stick with your discipline.  Focus on the overall market, the specific chart, and your own trading process. Remember, trading is a marathon, not a sprint. 

Ed

Swing Trade Ideas for your consideration and watchlist: GBT, QCOM, CB, SPWR, MVIS, LLY, BKD, HUYA, NET. 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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