Markets gapped 1% higher at the open and then bulls followed-through to print bullish harami candles across all the major indices.  Markets seemed to surge after Dr. Fauci held a positive outlook press conference.  However, others said it was after Bernie Sanders dropped out of the Presidential race.  Regardless, the SPY closed up 3.45%, the DIA up 3.41%, and the QQQ up 2.12%.  The VXX fell to 42.40, while the 10-year bond yield up to 0.771% and Oil (WTI) closed up over 10% to $26.14/barrel (somebody thinks they know something about OPEC+).

The relief/stimulus bidding war also heated up again. On Tuesday Senate Republicans had said they would vote Thursday on an additional $250 billion for small business.  On Wednesday Democrats announced they will seek an additional $500 billion to include the $250 billion for small businesses and would add $150 billion for hospitals and $100 billion for states.  Then the figure $350 billion additional was floated by Republican sources to add in bailout money for the cruise industry. However, the $2 Trillion infrastructure bill both the President and Congressional Democrats supported a week or so ago looks to have been shelved again for now as Senate Republicans remain concerned about costs.

Related to the previously passed stimulus bill, banks are experiencing huge logistical issues that are leading to delays.  For example, just 2 banks (JPM and BAC) received 625,000 small business loan applications in the first week.  At the same time, small community banks that normally process 5-6 SBA loans in a year, have received 500 to process in the last week.  These are just front-end issues and don’t reflect the problem experienced on the government (SBA) end to review and approve (or denial) of perhaps millions of new loan applications.  Obviously, delays apply more stress to the economy.

CNBC reported that the consensus expectation for new unemployment claims is at 5.25 million again this week.  After the close, California reported that 2.4 million of their citizens had filed unemployment since March 12.  However, we knew unemployment was bad.  The FOMC minutes indicated that the Fed will keep interest rates near zero until the economy has weathered the pandemic.  Specifically, they tied the decision to their maximum employment mandate.

On the virus front itself, the world crossed above 1.5 million diagnosed cases of COVID-19.  The global headline virus numbers have now reached 1,529,439 confirmed cases and 89,416 deaths (5.8%).  The number of new cases in both Russia and Germany jumped in the last 24 hours. In addition, both Spain and Italy experienced an increase in deaths again Tuesday (after they had fallen for a few days).  However, overnight Spain reports its death toll fell again slightly. While that goes on, the EU failed to reach an agreement on its own 500 billion Euro economic stimulus plan after a 16-hour conference call.  Meanwhile, the UN has announced that it estimates 195 million jobs will be lost globally in Q2 due to the virus.

Meanwhile, in the US we now have 435,160 confirmed cases and 14,797 (3.4%) deaths.  As mentioned above, Dr. Fauci told a press conference that he is now expecting the rate of new cases to plateau starting next week.  However, he reiterated this doesn’t mean it’s time to ease restrictions.  In addition, the consensus model now forecasts US deaths will be about 61,000 (20,000 less than the model showed a week ago).  Part of the reason for this is adherence to the guidelines as shown by drops in travel. For example, the TSA announced that it screened a record low number of passengers Tuesday (97,000).  While still a huge number of people and flights, that is down 95% from a year ago.

Overnight, Asian markets were mixed but mostly green.  In Europe, markets are also mixed, but more evenly distributed red-green at this point in their day.  As of 7:30 am, US futures are pointing toward a one percent gap lower at the open.

The major economic news for Thursday includes Initial Jobless Claims and Mar. Core PPI (both at 8:30 am) and Michigan Consumer Sentiment (10 am).  However, OPEC+ will also meet (10 am) to discuss potential production cuts. Major earnings on the day are limited to DAL and FRC before the open.  For Friday, markets are closed, but major economic news will include Mar. Core CPI (8:30 am) and Federal Budget Balance (2 pm).  There are no major earnings Friday.

The uptrend continues, but the lack of conviction is palpable.  The OPEC meeting today may result in production cuts that could boost the energy sector.  However, unemployment claims and the fact this is “virtual Friday” are unknowns that may be a drag on the day.  So, we need to continue to be very attentive, and either be very fast (day trade) or very slow (long-term holds).  It’s still not a good swing trading market yet with all the gaps and volatility.  And a 3-day weekend is a long time to be holding a position you cannot adjust.  Be very cautious on any swing trades you take.

Ed

There are no Swing Trade Ideas for your watchlist on “Virtual Friday” of a 3-day weekend. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs 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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