Markets gapped up on Thursday and then proceeded to put in a slow, all-day rally that closed near the highs.  This left us with large white candles in all 3 major indices and a lower-high for our new trend.  On the day, SPY gained 1.51%, DIA gained 1.05%, and QQQ gained 2.22% (led by a banner day by NVDA).  The VXX fell 1% to 25.20 and T2122 rose back deeper into the overbought territory at 87.15.  10-year bond yields pulled back from early-day highs to close up at 2.364% and Oil (WTI) fell 3% to $111.37/barrel.

On the Russian invasion story, NATO and the European Union sanctioned 400 more individuals (300 of which are Russian Parliamentarians) as well as Russian defense companies.  The US Treasury Dept. and UK PM Johnson both threatened to sanction Russian-owned gold.  President Biden publicly said that if Russia used chemical or biological weapons, we would respond and the response would depend on the nature of the use (which implies a proportionate military response).  Later, at a meeting of the G7, Biden went on to say he believes that Russia should be removed from the G20.  Overnight, as expected, the US and EU reached a natural gas supply deal that will cut or eliminate the need for Russian natural gas.

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Related to energy, US average gasoline prices have also fallen about 10 cents in the last week according to AAA.  However, in some places like CA, gas has reached $7 at some stations.  Meanwhile, oil prices declined globally Thursday after the EU decided to not sanction Russian oil…at this point. On the other hand, US natural gas producers are meeting with German gas buyers today in support of the LNG deal mentioned above. US producers will supply the EU with 15 billion cubic meters on LNG this year and up to 50 billion cubic meters each year until at least 2030.  It is unclear if this is in addition to the 6.5 billion cubic feet of LNG per day the US already supplies the EU.  Meanwhile, the Russian Duma is discussing taking Bitcoin in payment for their oil from “friendly” countries like China and Turkey in order the avoid sanctions.

In other European developments, the EU and European Parliament have reached a deal on their “Digital Markets Act.”  The law is aimed at curbing global (US for all intents and purposes) tech giants from abusing their position to hurt smaller rivals.  If any “gatekeeper” company is found guilty of doing so, they can be fined 10% of their global revenue (repeat offenders can be fined 20% of global revenue).  The law will immediately impact FB, AAPL, AMZN, and GOOG who operate “walled gardens” that limit customer choices and make it hard or impossible for outside companies to reach those “captured customers” without paying dearly for the privilege.  It also creates a massive set of rules the companies must comply with in order to do business in the largest combined consumer market.

Overnight, the Asian markets were mixed to end the week.  Hong Kong (-2.47%), Shenzhen (-1.89%), and Shanghai (-1.17%) were the only real movers as the rest of the region was split on modest moves.  In Europe, stocks are leaning to the upside at mid-day, with the notable exceptions of Russia (-3.66%) and Greece (-1.38%).  The FTSE (+0.25%), DAX (+0.80%), and CAC (+0.78%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.27% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.49% open at this hour.  10-year bond yields are flat at 2.363% and Oil (WTI) is down almost 2% in early trading.

Major economic news scheduled for release on Friday includes Michigan Consumer Sentiment and Feb. Pending Home Sales (10 am) and two more Fed speakers (Williams at 10 am and Waller at noon).  The major earnings reports scheduled before the open are limited to DOOO.  There are no earnings scheduled for after the close.

The natural gas deal likely means great days for the Us natural gas suppliers and shippers. However, it may be too late to chase that trade if you didn’t take the hint when I mentioned the potential earlier this week. Beyond that, the European Digital Markets Act impacts may hold sway today. However, US traders may well ignore that story, counting on tech giant litigation to mitigate future damage. With that said, the Russian invasion is likely to hold the mindshare of traders as we head into the weekend news cycle. The bias is clearly bullish with the strong rally and now a higher-low, especially if we can get some follow-through. However, be careful of volatility and quarter-end window dressing starting to happen.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: CGNT, JBT, BNTX, ROKU, ZG, PYPL, NFLX, HUBS, PINS, CRM, QS, PLTR, HOOD. 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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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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