Jobless Claims and Factory Orders Lead

The ADP private payrolls report came in very soft (374k vs 600k est.) before the Open Wednesday, but bulls didn’t seem to care with a slight gap up to start the day.  At that point, QQQ rallied hard for 30 minutes, DIA sold off for an hour, and SPY ground sideways in a very tight range.  All 3 major averages then moved sideways until a long selloff started at 2 pm and ran right into the close.  This left us with a Shooting Star-type candle in the QQQ, a Bearish Engulfing of a Doji in the DIA, and just a black candle in the SPY.  On the day, SPY gained 0.07%, QQQ gained 0.17%, and DIA lost 0.10% as its consolidation continued.  The VXX fell to 24.81 and T2122 rose back into the overbought territory at 88.43.  10-year bond yields started the month unchanged at 1.302% and Oil (WTI) fell slightly to $68.28/barrel.

At the Close Wednesday, F announced it will once again be cutting F-150 pickup production (as well as other highly profitable vehicles) due to the global chip shortage.  The company will leave the currently closed Kansas City plant closed at least another week.  It will also cut shifts at the Kentucky truck plant and run only one of three shifts at the Michigan truck plant.  In a related story, Bloomberg reports this morning that TSLA’s Chinese plants were “closed for days” last month due to the same cause, the chip shortage. 

AAPL announced yesterday that 8 states will now allow their citizens to use electronic IDs such as their iPhone or Apple Watch as valid for security checks, including airports.  The states include AZ, CT, GA, IA, KY, MD, OK, and UT.  This comes after AAPL announced last month that it was working with the TSA to gain approval of ID by electronic device approval.  AAPL also announced plans to make slight tweaks to App payment policy.  This is an attempt to avoid or mitigate moves to force massive changes to the App Store policies and revenue.

So far this morning, CCEP and PDCO reported a beats on both lines while HRL beat on revenue and came in fractions of a cent below estimates on earnings.  In other business news, QSR (Burger King) announced a customer loyalty program, matching recent moves by MCD, WEN, and longer-standing programs from SBUX and CMG.

Overnight, Asian markets were mixed again, this time on modest moves as Australia reported a larger-then-expected (20% higher) trade surplus in July on commodity price strengths.  On the red side, South Korea (-0.97%) and Taiwan (-0.88%) were by far the leaders.  Meanwhile, on the upside, India (+0.92%), Shanghai (+0.84%), and Thailand (+0.81%) led the charge.  In Europe, markets are mostly green at mid-day.  The FTSE (-0.06%), DAX (+0.03%), and CAC (+0.09%) are flat, but most of the continent is a little more to the upside at noon in London.  As of 7:30 am, US Futures are pointing to a modest green open.  However, this is also an hour before a considerable economic data dump.  The DIA is implying a 0+0.15% open, the SPY implying a +0.17% open, and the QQQ implying a +0.22% open at the moment.  10-year bond yields are down to 1.287% and Oil (WTI) is up two-thirds of a percent in early morning trading.

The major economic news scheduled for release on Thursday includes Imports/Exports, Weekly Initial Jobless Claims, Q2 Nonfarm Productivity, and Q2 Unit Labor Costs (all at 8:30 am), July Factory Orders (10 am), and 2 Fed speakers (Bostic at 1 pm and Daly at 3 pm).  The major earnings reports scheduled for the day are limited to AEO, DOOO, CIEN, DCI, GCO, GMS, HRL, PDCO, SIG, and TTC before the open.  Then after the close, AVGO, DOCU, HPE, JOAN, and SAIC report.

With a lot of data coming out this morning and the August Payrolls number due tomorrow, it is worth reminding ourselves that it's not the data that matters. What matters is the way the market reacts to the news. For example, bad economic data could be interpreted as very bad for future earnings reports. However, it could also be interpreted as giving cover to the Fed to push the taper further out. The point is, don't think you can forecast the data, let alone how the market will react. Just stick with the current trend until the trend breaks (ends).

As always, manage your existing trades before you go chasing any new ones. Concentrate on the process and on managing those things you can control, while not worrying too much about the things you can't control. Good trading rules and discipline is what separates long-term success from failure in trading. Above all, consistently take profits when you have them. Don't let greed turn your winners into losers.

Ed

Swing Trade Ideas for your consideration and watchlist: FNKO, CAN, MMAT, STEM, PLAY, USO, GEVO, NLOK, CDEV, CRSR, PWR, AMD. 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.

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🎯 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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