Monday was quite the roller-coaster ride.  A gap lower of 1%-1.7% across the 3 major indices and started a wild whipsaw ride (each whip being more than 1% in size) to the downside all morning.  The lows of the day were reached about 12:30 pm, when (for no particular reason) sentiment reversed and a wild whipsaw ride to the upside began.  Again, each major wave of movement was over 1% in size.  All 3 major indices closed in the green and near their highs of the day even as we saw a range of more than 5% in those indices on the day.  This left us with white candles with long lower wicks across the board.  On the day SPY gained 0.40%, DIA gained 0.39%, and QQQ gained 0.49%.  The VXX closed up 2.5% to 23.79 and T2122 remains deeply oversold at 2.47.  10-year bond yields ended up slightly after their own wild ride of a day, closing at 1.774% and Oil (WTI) was down 1.44% to $83.91. 

As mentioned, we experienced massive intraday swings Monday.  While this has not happened in a long time, huge intraday volatility is not unknown.  Bloomberg looked at the Nasdaq 100 (QQQ) over the last 25 years as a gauge for such volatility.  They found many days that were similar to Monday’s whipsaw action in both 2008 (Financial Crisis) and during 2000-2002 (dot-com bubble burst).  That said, the swing we just saw was the largest since January 8, 2001. This may give us a clue to the potential volatility to come during the shift from massive spending and debt related to pandemic recovery and the shift to the new Fed’s goal of reversing that situation to fight inflation.  The moral of the story is that if you’re trading, be damn sure you can handle real pain and are comfortable with volatility.

After the close on Monday, BRO, CR, IBM, STLD, and ZION all beat on both lines.  IBM spiked in after-hours trading after posting its best revenue growth in 10 years (+6.5%) on strong cloud services sales in Q4.  So far this morning, VZ, AXP, LMT, ADM, IVZ, and MMM have all reported beats on both lines.  Meanwhile, JNJ, NEE, RTX, and GE reported beats on earnings but came in light on revenue.

Overnight, Asian markets were nearly red across the board (with only India +0.75% in the green).  Shenzhen (-2.83%), Shanghai (-2.58%), and South Korea (-2.56%) led the region lower.  In Europe, we see the opposite at mid-day.  Bourses are green across the board on the continent with the FTSE (+0.84%), DAX (+0.54%), and CAC (+0.82%) leading the region higher.  As of 7:30 am, US Futures are pointing toward another major gap lower.  The DIA implies a -0.73% open, the SPY is implying a -1.39% open, and the QQQ implies a -2.00% open at this hour.  10-year bond yields are also up sharply to 1.774% and Oil (WTI) is flat in early trading.

The only major economic news scheduled for release Tuesday is Conf. Board Consumer Confidence (10 am).  However, major earnings reports scheduled for before the market include MMM, AXP, ADM, ERIC, GE, IVZ, JNJ, LMT, NEE, PCAR, PII, RTX, UMC, VZ, and XRX.  Then after the close, BXP, CNI, COF, FFIV, HA, MSFT, RNR, and SLGN report.

The Fed meeting starts today as markets are clearly spooked. What may have traders worried is any mention of 4 or more rate hikes this year, when the FOMC position to this point has been to expect 3 hikes. The wildcard everyone is waiting to drop will be what is said about the lightening of the Fed’s massive balance sheet of bonds and other mortgage-backed assets. So, as I said yesterday, now is the time to be preparing for the bottom. Not time to be predicting a turn or chasing moves you have missed. Trade carefully.

The first rule of making money in the market is to not lose big money in the market. So, stick to your trading rules and manage the things you can control. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Don’t be stubborn. When you’re wrong, just admit it and take your loss. (That’s why we set stops.)

Ed

Swing Trade Ideas for your consideration and watchlist: UVXY, SPLK, QID, SDS, TDOC, HAL, FSLY. 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service