Thursday gave us a more or less flat open after the brutal prior day.  Then markets proceeded on a whippy day-long rally in all 3 major indices.  This left the two large-cap indices as Bullish Harami-type candles.  On the day, SPY gained 1.43%, DIA gained 1.80%, and QQQ gained 0.72%. However, the downtrend was not broken in any of the major indices and there is no indication that the whipsaw action will not continue on Friday.  The VXX fell almost 6% to 25.72 and T2122 came up a bit, but remains in the oversold territory at 14.48.  10-year bond yield rose to 1.449% and Oil (WTI) came up just under 1.9% to $66.81/barrel.

During the day, Germany issued another national lockdown (but only for the unvaccinated).  Their government is debating a national vaccination mandate, but it is unclear if this will happen since Chancellor Merkel leaving office next week.  On our side of the Atlantic, Congress passed a bill to provide temporary funding, avoid a government shutdown, and kick the can down the road until February on passing a budget.  However, the bill still must pass the Senate by Friday to avoid a shutdown and there are indications Senate Republicans will use this leverage to demand a prohibition against government vaccine mandates in the bill.  In an unexpected development, in early-morning hours the Senate passed the shutdown avoidance bill mostly on party lines.

Right at the end of the day, the FTC sued to block NVDA’s acquisition of the chipmaker Arm.  NVDA stock did not respond to the news in the last 30 minutes of the day.  Arm is an alternative chip architecture to the traditional x86 architecture used by the market-leading chipmaker such as TSM.  Arm chips are used in AAPL and QCOM devices as well as Android phones.  In addition to the US lawsuit, this $40 billion purchase by NVDA (from Softbank) also faces stiff resistance from the UK (one-time home of Arm) and the EU by extension.

Thursday afternoon the SEC ruled it is able to force the immediate delisting of Chinese companies that fail to meet the Public Company Accounting Oversight Board (PCAOB) audit requirements.  This stemmed from the 2020 case of Luckin Cofee (LKNCY), who fired its CEO after finding massive internal fraud, where the company simply “created” $310 million in sales on paper.  Thursday night, Chinese ride-hailing company DIDI announced it will delist from the NYSE rather than comply.  The company said it would convert US-listed shares into international exchange shares that are “freely tradeable.” Oddly, DIDI stock spiked 14% higher on this news in the premarket.

Overnight, Asian markets were mixed.  Japan (+1.00%), Shanghai (+0.94%), and Shenzhen (+0.86%) led to the upside.  Meanwhile, India (-1.18%), and Indonesia (-0.69%) paced the losses.  In Europe, markets are mostly green at mid-day.  The FTSE (+0.42%), DAX (+0.24%), and CAC (+0.09%) are representative of the continent, with only a few exchanges slightly on the red side of flat in early-afternoon trading.  As of 7:30 am, US Futures are pointing toward a flat open in front of a lot of data.  The DIA is implying a +0.03% open, the SPY implies a -0.02% open, and the QQQ is implying a -0.03% open at this hour.  10-year bond yields are lower to 1.431% and Oil (WTI) is up more than 2.5% in early trading.

Major economic news scheduled for release Friday includes Nov. Nonfarm Payrolls, Nov. Avg. Hourly Earnings, Nov. Participation Rate, Nov. Unemployment Rate (all at 8:30 am), Nov. Services PMI (9:45 am), and Nov. ISM Non-Mfg. PMI and Oct. Factory Orders (both at 10 am).  The major earnings reports scheduled for the day include BMO, DOLE, and GCO before the open.  There are no earnings reports scheduled for after the close.

The back and forth whipsaw action continued Thursday. However, the market seems to either need some rest or perhaps it is just waiting on the PAyrolls data. In either case, no gap is implied at this point. That said, more volatility is likely as markets adjust to the idea that the Fed will be focusing more on fighting inflation than job creation over the next year. If you’re a swing trader, be very wary of this type of market. Chop is a condition for the very fast (scalpers) and very slow (long-term trading) with the guys in the middle..well…getting shopped up. So, if you don’t trade hedged and you are not extremely quick to be in/out, it’s past time to consider stepping back and waiting for a trending and less volatile environment.

Remember, you don’t have to trade every day or week. Also, keep in mind this is Friday…so don’t forget to prepare for hte weekend news cycle. Stick to your trade rules and on managing the things you can control. (Not trying to force the market to obey your desires.) If you do trade, that should always include consistently taking profits when you have them and moving your stops in your favor. Trade carefully and continue to think twice before holding through earnings…especially without a hedge.

Ed

Swing Trade Ideas for your consideration and watchlist: APA, FANG, ERX, COP, MRO, CVX, HAL, XOP, BP, XOM. 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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