The weekly jobless claims came in higher than expected Thursday (yet still slightly trending down from the previous weeks). This caused a flat open and down day as resistance held again. The QQQ faired worst among the major indices, falling 1.09% (and printing a Bearish Engulfing candle). Meanwhile, the SPY was down 0.69%, and the DIA down 0.29% (both on indecisive candles). The VXX rose slightly to 34.68 and T2122 pulled back a bit to 82.79. 10-year bond yields were unchanged at 0.68% while Oil (WTI) climbed again to $33.91/barrel.
On the Virus front, the global headline numbers are 5,218,711 confirmed cases and 335,072 deaths. Latin America has overtaken the US and Europe as the region with the most new cases for each of the last three days. Brazil, Peru and Mexico are the worst-hit countries in that region. In China, researchers are finding that in the new Northern China outbreak, the virus is acting differently. Patients there are carrying the virus for a longer period before showing symptoms (raising the amount of asymptomatic spread threat). In addition, they are taking longer to test negative after the first symptoms appear, which raises the amount of care needed. Patients also have more localized damage (in the lungs) and less damage to heart, kidneys, and stomach. Ominously, this all implies that mutations may be underway. We just don't know if any mutations would be favorable or unfavorable for humans yet.
In the US, we have 1,621,333 confirmed cases and 96,363 deaths. All 50 states now have at least a partial reopening, and as expected about a third of states are showing an increase in new daily cases. However, about 14 states have also shown decreases. Bear in mind that both of these numbers could be deceiving, because there is a significant lag between infection and diagnosis, as well as between testing and state-reported results. After hours, the President says he expects a second wave of the virus, but regardless of what comes he won’t close the economy back up..."we'll fight fires" instead.
Overnight, Asian markets were deeply in the red as China plans to impose new security restrictions on Hong Kong and the US continues to escalate tensions with China. Europe is at least partially mixed, but all the major bourses are in well into the red so far today. As of 7:30 am, US futures are also pointing to a half percent gap lower across the board.
There is no major economic news Friday, in front of the Memorial Day weekend. Major earnings reports are also limited to BABA, BKE, CAE, DE, and FL, all before the open.
The bulls refuse to back down, but resistance is proving hard to break at least for the large-caps. With the lack of data and earnings drivers on Friday and with the long weekend ahead, we may see indecision continue or a move on lower volume. Keep in mind that the bears have had no teeth for a couple of months and the bulls no fear. However, the “gap and chop” has been real. So, the only guarantees are uncertainty and volatility. Watch the short-term chart and don’t hesitate to lock in profits. (Put a little money in your pocket for the weekend.) Above all, don’t chase or predict, and remain cautious about longer-term swing trades.
No Trade ideas for today. It's Friday (payday) and we have a long weekend ahead. Put some money in the bank while you can. 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.
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🎯 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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