Jobless Claims, GDP, and Jackson Hole

Markets opened just on the green side of flat Wednesday.  That was followed by a long drift sideways with a slight bullish lean for the rest of the day.  This left us with Spinning Top or Doji-type candles in all 3 major indices.  On the day, SPY gained 0.21% (to a new all-time high close), DIA gained 0.13%, and QQQ gained 0.11% (to another new all-time high close). The VXX fell 2.28% to 26.10 and T2122 rose into the overbought territory at 82.05.  10-year bond yields spiked to 1.344% and Oil (WTI) rose 1.14% to $68.31/barrel.

During the day, WDC spiked higher on reports of a big tech merger.  The Wall Street Journal reported that WDC is close to a deal with Japanese memory maker Kioxia (a one-time spin-off from Toshiba). This reaction is quite odd, in that WDC would be the purchasing company and yet was up over 15% at one point in the day (before closing up 7.8%).  This comes after a proposed Kioxia buyout by MU fell through last month.  The WDC deal will reportedly value Kioxia at $20 billion and will be paid for in WDC stock.  Kioxia is the inventor of NAND flash memory technology widely used in most computer memory and solid-state storage. 

After the close, the White House held a cybersecurity summit, aimed at preventing hacks and ransomware attacks such as the Colonial Pipeline incident, came to an end. GOOG announced they will spend $10 billion over 5 years to strengthen their security and pledged to train 100,000 IT people on security best practices.  Not to be outdone, MSFT said they will spend $20 billion over 5 years to deliver more advanced security tools (software) and pledged to spend $150 million to help government agencies upgrade security.  IBM pledged to train 150,000 people in cybersecurity skills over 3 years and announced a data storage infrastructure solution that is more secure than current architectures.  AMZN said it is planning to give users of its cloud services free multi-factor authentication devices.  Many other firms gave non-specific support to security and the attendees agreed to create a new industry standard for security.

In miscellaneous stock news, one day after PFE received approval, MRNA has now filed with the FDA requesting its Covid-19 vaccine get full approval (versus the current “Emergency Use” approval). Elsewhere, the CEO of TOL told CNBC that recent lumber price declines will save the company $40,000 per house and help offset other inflation pressures in the second half of the year.

Overnight, Asian markets were mixed but leaned to the red as South Korea hiked interest rates.  Shenzhen (-1.92%), Shanghai (-1.09%), and Hong Kong (-1.08%) led to the downside.  Most of the green was barely green, with the notable exception of Malaysia (+1.02%).  In Europe, stocks are showing modest red moves everywhere except for 2 minor exchanges.  The FTSE (-0.35%), DAX (-0.63%), and CAC (-0.29%) are typical of the continent at mid-day.  As of 7:30 am, US Futures are pointing to a flat, but red open.  The DIA is implying a +0.09% open, the SPY implying a -0.08% open, and the QQQ implying a -0.17% open at this hour.  10-year bond yields and the Dollar are also flat, but Oil is down nine-tenths of a percent to $67.73 in early trading.

The major economic news scheduled for release on Thursday is limited to Q2 GDP and Weekly Jobless Claims (both at 8:30 am).  The Jackson Hole Symposium also begins at 9 am.  The major earnings reports scheduled for the day include FLWS, ANF, BURL, CM, COTY, DG, DLTR, SJM, MOMO, SAFM, XPEV, and YSG before the open.  Then after the close, DELL, GPS, HPQ, MRVL, PTON, VMW, and WDAY report.

As Jackson Hole gets underway, markets are likely to watch and wait until they get a better read on what the Fed will do and when. So, it is quite possible we are going to stay in "pause mode" at least until Fed Chair Powell's presentation. At that point, we may see Mr. Market make a decision (and move). However, volatility around each of the many presentations is possible. So, this would be a great time to be nimble, hedged, or with plenty of dry powder (cash).

Good trading rules and discipline is what separates long-term success from failure in trading. Concentrate on the process and on managing those things you can control, while not worrying too much about the things you cannot control. As always, manage your existing trades before you go chasing any new ones. Remember, the trend is your friend until it is broken. And if you miss a move, just admit it and move on to the next chart. Never chase price on an entry and remember to keep your losses small by using stops or hedges. Above all, consistently take profits when you have them. Don't let greed turn winners into losers.

Ed

Swing Trade Ideas for your consideration and watchlist: RIDE, CUBI, CG, FAST, NAVI, TSCO, RCL, MARA. 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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