Mr. Market Showed His Whip

After a mild open, there was a sharp and strong selloff in the late morning.  Some sellers may have been reacting to a rumor of a spike in coronavirus cases in Beijing (away from Wuhan).  Regardless of the cause, this spike downward put the bears in control for the day.  However, as usual, the bulls spent the rest of the day slowly and steadily working to recover.  That whipping action took its toll on many traders.

At day end, the SPY was down 0.41%, the DIA down 0.45%, and the QQQ down 0.93%.  All three major indices printed indecisive candles with large lower wicks.  While the VXX remains very low (essentially no market fear), at 14.04, Gold and Bonds were both higher on risk-haven trades.

In coronavirus news, the headline numbers are now 77,000 confirmed cases and 2,250 deaths.  (Beware the numbers as there was a third round of debate and change in China’s reporting methods overnight.)  While that rumor of a spike in cases in the Chinese Capital was unconfirmed, there definitely has been an outbreak in South Korea, which has now placed two provinces under “special authority” due to health emergencies and also reported its first death.  Japan also reported two deaths and growth in the number of new cases.  Iran also reports an outbreak with 13 deaths, over 500 confirmed cases, and their national health agency said it is likely the virus now exists in all major Iranian cities. Still, the vast majority of cases remain in China. 

However, the W.H.O. held a news Conference Thursday to say that while this is true now, it may not be the case for long.  They also called for more global funding to fight the disease.  In addition, they cast more doubt on Chinese data by flat-out saying that most of the “new” cases and deaths being reported daily are actually days to weeks old.

Overnight, Asian markets were mixed but mostly in the red.  Europe is also mixed, but may be leaning just a little to the green side at this point.  As of 7:45 am, U.S. futures are also pointing toward a lower open by three-tenths of a percent in the major indices.

Friday’s major economic news includes Feb. Mfg. PMI and Feb. Services PMI (both at 9:45 am), Jan. Existing Home Sales (10 am), and four Fed speakers throughout the day.  The only major earnings on the day are DE and PNW, both before the open.

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While there was a brief pounce by the bears mid-day Thursday, the bulls refused to give ground easily.  So, we remain very near all-time highs, but showing some signs of consolidation or even an early glimpse of pullback.  However, so far at least, it hasn’t paid for those who bet against the bulls and the trend still remains bullish.

Remember that Friday is payday.  So, take profits and keep moving those stops.  It pays to plan the trade and trade the plan.  Don’t chase or get complacent and let a profitable position head South.  Do not forget that as traders, our job is to keep racking up base hits.

Ed

No Trade Ideas for Friday. It's payday, so take some profits and make sure you are set for weekend headline risk. 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.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

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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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