Loan Demand Flat As ADP and PMI On Deck

Tuesday was a consolidation day for markets with a flat open leading to a sideways grind in all the major indices.  The QQQ showed the most volatility for the day, but closed well up off the lows and closer to the highs of the day, leaving a Hanging Man type of candle.  The two large-cap indices both printed Doji-like candles.  On the day, the SPY lost 0.15%, the DIA lost 0.05%, and the QQQ lost 0.08%.  The VXX fell slightly to 25.49 and T2122 dropped a bit further down into the mid-range.  10-year bond yields were up to 1.31% and Oil (WTI) fell to $68.52/barrel.  Despite the small losses, the S&P500 booked its 7th-straight winning month in August.  On the month, SPY was up 2.98%, DIA was up 1.27%, and QQQ was up 4.22%.

For the week, mortgage loan demand was basically flat.  New home loan applications rose 1% week-over-week.  Meanwhile, refinancing loan applications fell 4% for the week.  This comes as mortgage rates (30-year fixed, conforming loan) remain steady at 3.03%.  

This morning Bloomberg reported that a new study by Willis Towers Watson Consulting finds that 52% of US employers are planning or are strongly considering implementing employee vaccine mandates by the end of the year.  That is well more than double the 21% that currently have mandates in place. In addition, 14% of the companies are also considering implementing a “healthcare surcharge” on unvaccinated employees in lieu of the mandate.  This comes from a survey of 1,000 US employers conducted August 18-25.

A study research study published Monday in the Journal of American Medical Assn. (JAMA) found that the MRNA vaccine creates well more than twice as many antibodies as the PFE-BTNX vaccine.  The study went on to suggest the differences may be due to a larger amount of active ingredient in the MRNA vaccine and potentially influenced by the different intervals between shots in the two vaccine regimens. 

Overnight, Asian markets were mixed on private data showing that China’s PMI is shrinking (49.2 down from 50.4 in July).  Japan (+1.29%) and Singapore (+1.07%) led the fewer gainers, while Indonesia (-0.97%) and Malaysia (-0.90%) paced the more numerous losers.  In Europe, we see green across the board as of mid-day. The FTSE (+0.79%), DAX (+0.18%), and CAC (+1.20%) are typical of the spread in that region at this hour.  As of 7:30 am, US Futures are pointing to a positive open.  The DIA is implying a +0.29% open, the SPY implying a +0.32% open, and the QQQ implying a +0.20% open in the pre-market.  Meanwhile, the Dollar is up slightly and 10-year bond yields are up to 1.321%, while commodities are mixed in early trading.

The major economic news scheduled for release on Wednesday includes August ADP Nonfarm Employment (8:15 am), August Mfg. PMI (9:45 am), ISM Mfg. PMI (10 am), Crude Oil Inventories (10:30 am), and Fed member Bostic speaks (noon).  The major earnings reports scheduled for the day are limited to BF.B, CPB, and DY before the open.  Then after the close, CHWY, FIVE, and GEF report.

Markets get more economic data today, which may help break the stalemate of the very recent consolidation. In the premarket, we'll see a preview of Friday's August Payrolls data. then mid-morning we get PMI data. Both may lend to some volatility. Remember that we still sit at all-time highs and, perhaps, just a little extended from the T-line (8ema), but the trend remains bullish.

As always, manage your existing trades before you go chasing any new ones. Also, remember, the trend is your friend until it is broken. Simply put, the market maintains a trend far more often than it reverses the trends. Concentrate on the process and on managing those things you 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 winners into losers.

Ed

Swing Trade Ideas for your consideration and watchlist: DGX, RIG, JETS, AMD, NAT, AAPL, WBA, BGFV. 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.

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🎯 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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