Friday saw another gap up (half a percent in the DIA), but then the large caps waffled sideways the rest of the day. Meanwhile, the QQQ faded the gap (sold off a bit) before starting its sideways grind the rest of the day. The big banks led the way as a group as investors fought tooth and nail to get in before the post-stress-test dividend increases and buyback programs get announced. SPY printed another new all-time high close as both the DIA and SPY printed Spinning Top type small candles. However, the QQQ printed a Bearish Engulfing of a Shooting Star Doji. On the day, SPY gained 0.35%, DIA gained 0.72%, and the QQQ lost 0.12%. The VXX fell almost 2% to 29.19 and T2122 fell back out of the overbought territory, now at 76.61. 10-year bond yields rose significantly to 1.526% as the Fed-favorite PCE Price Index came in hot and Oil (WTI) was up 1% to $73.98/barrel.
On Saturday, JNJ agreed to halt the sales of opioids across the US as well as to pay a small $260 million settlement with NY state. China also announced that it is forcing TSLA to recall 300,000 Model 3 and Model Y cars related to assisted-driving software. However, this would be a remote “software push” recall and not require cars to be physically returned to dealers. The AAPL streaming video service (Apple TV+, which competes with DIS and NFLX) will start facing a test this week. Up to now, the service has offered as a free 12-month trial with other purchases. However, this will change to a 3-mo. Trial as of Thursday and the first users to have taken the trial will start to be billed $4.99/month.
In the cryptocurrency world this weekend, governments made another move to keep control over currencies. On Sunday, the UK Financial Conduct Authority warned UK consumers and banned the largest crypto exchange (Binance) from doing business in the UK. The exchange has until Wednesday to confirm that it has removed all of its advertising and promotions from UK jurisdiction. Bitcoin held at $33,227 (as of noon Sunday) after the announcement was made. Bloomberg reported that at least one major industry analyst saw this as a positive move, adding that more regulation is a signal that crypto is a more mature and safer asset class…which will draw in more investors.
More clarity has been revealed about the latest investigations GOOG faces from the EU. This time the EU is focused on the GOOG ad network, data collection, and distribution, and the way ads are targeted to users on the YouTube platform. Specifically, the EU is investigating Google Ad Manager, the algorithm used to display ads, the way GOOG rivals’ ads were served to viewers, and whether GOOG used data on those ads for their benefit. In other words, whether the competitor’s ad response data was used by GOOG for competitive advantage and whether rival ads were served on a fair playing ground compared to GOOG’s own product ads. The key “rivals” mentioned here are AAPL, FB, and MSFT.
Overnight, Asian markets leaned heavily to the red side on modest moves following the release of bad Chinese Industrial data. Oddly, Shenzhen (+0.98%) was the sole significant winner, while Indonesia (-1.38%), Malaysia (-0.96%) were outliers to the downside among generally small red numbers across the region. In Europe, markets are also leaning to the downside on somewhat larger moves. The FTSE (-0.51%), DAX (-0.15%), and CAC (-0.49%) are typical of the continent. As of 7:30 am, US Futures are pointing to a mixed, flat open. The DIA is implying a -0.05% open, the SPY is implying a +0.05% open and the QQQ is implying a slightly stronger +0.27% open.
There is no major economic news scheduled for Monday. However, Fed member Williams speaks at 9 am. There are also no major earnings reports scheduled for the day.
10-year bond yields are down in premarket, but holding 1.51%. This came after losses in Asia over data released showed that May Chinese industial profits were down both from April and a year earlier. As the quarter comes to an end Wednesday, markets may also be experiencing some rebalancing and window dressing as funds prepare for their Q2 statements. The bulls have the trends in their favor, but the DIA still faces resistance overhead and the other two major indices seem hesitant to rip higher. So, be cautious and watch for signs of rotation or reversal.
The odds favor following the trend, but also respecting both support and resistance levels. However, all trends reverse at some point and every S/R level is breached eventually. So, don't just assume trend, support, or resistance will always hold. Keep locking in profits, moving your stops, and maintaining discipline. Follow your trading rules, don't chase, and stick to the trade plan. Remember that consistency is the key to long-term trading success.
Swing Trade Ideas for your consideration and watchlist: TLRY, IT, RKT, FSLY, NNOX, NVDA, LEN, PSA, QCOM, PLUG, HD, ALXN, XOM, NOK. 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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