Thursday saw a strong gap lower (about 1.6%).  This was met with a strong rally that faded most of that gap by 11:15 am, but then the bears stepped back in and sold back off back to the lows by 12:30 pm.  The rest of the day was smaller waves in the roller coaster ride.  The 50sma held as support in the SPY, but the QQQ has given up the 50sma and the DIA has not reached it yet.  On the day, QQQ lost 1.56%, SPY lost 0.87%, and DIA lost 0.52%.  All closed up off the lows, but far from the highs as well.  The VXX closed down again to 24.38 and T2122 was back down to 46.63.  10-year bond yields were up slightly to 0.689% and Oil (WTI) rose again to $41.04/barrel.

White House Chief of Staff Meadows met with Airline executives during the day and after the meeting told the press that the President supports $25 billion of “narrow” relief for the industry.  (The industry, led by UAL, AAL, and unions have been seeking that amount in additional relief funds for the last month or so.  The threat has been that if they cannot get the additional bailout funds, on top of the recent buyouts, retirements and furloughs, a major wave of new layoffs would come as soon as this fall.)  No word on plans to execute on a bailout or of specific legislation offered. However, they did get the President’s public support of the additional $25 billion (although it did not come directly from the President and the term “narrow” was not defined).

After the close, the Fed announced it will decide by the end of the month if it will continue capping Big Bank dividends.  (For reference WFC was one of the big banks to reduce dividends when the cap was announced in June.) This news comes as another stress test will be started soon.  However, in a change from the previous protocol, this time around the Fed says it will publish company-specific stress findings for each of the 34 institutions it tests.  The Fed announcement went on to outline two severe recession scenarios it will use in the stress testing of reserves this time around.

On Thursday ORCL and Byte Dance both agreed to a Treasury Dept. change of terms for their partnership deal.  The changes were aimed at heading off the White House  national security concerns (oddly that Byte Dance cannot access to user-tracking information the same way that AMZN, GOOG, AAPL, FB, MSFT, other App makers and every Internet Service Provider already use and track the same customer usage/tracking data).  The two other main provisions are ORCL getting complete access to TikTok source code and the entire board of the new company being made up of American citizens regardless of new the company being a foreign entity or what the ownership shares will be.  In a potential twist, WMT is now expected to partner with ORCL on the deal. (In last-second news, it was just announced the White House will block downloads of TikTok and WeChat as of Sunday. No word on the approval/disapproval of the Treasury-revised deal.)

On the virus front, in the US, the numbers show we now have 6,875,103 confirmed cases and 202,219 deaths.  We saw another uptick to 46,295 new cases (well above the 7-day average), but new deaths dropped off a bit to 879 (still just above the 7-day average). In good news, TX moved forward to the next step in their reopening.  They now allow all retail stores, office buildings, restaurants, factories, gyms, and museums to reopen immediately at 75% capacity as long as the hospitals in their region stay below capacity thresholds.

Globally, the numbers rose to 30,380,035 confirmed cases and 951,150 deaths.  In the UK, the Northeast region of England has re-entered lockdown in an effort to stop a new surge in cases.  Other areas of the country are implementing partial measures such as limiting gatherings to single-family and stopping counter restaurant and bar service (so-called table service only).  This comes as testing demand is over 1 million per day, but capacity is only 230,000 tests/day. In Parliament, Government Ministers blamed the public for the problem, saying that only people told by a health professional should attempt to be tested.

Overnight, Asian markets were back to being mixed, but the largest economies leaned positive.  China was up 1.5-2%, while Japan and South Korea were on the green side of flat.  Europe has seen a similar situation so far this morning.  However, European moves have been more modest and lean more to the red side at this point.  The FTSE and CAC are on the red side of flat while the DAX is up a third of a percent at mid-day.  As of 7:30 am, US futures are mixed with the large-caps split modestly on either side of break-even and the NASDAQ pointing toward a half percent gap higher.

The major economic news for Friday is limited to Michigan Consumer Sentiment (10 am).  Once again there are no major earnings reports on the day. However, this is Options Expiration Friday.

Gap and fade or indecision seems to be the standard operating procedure in markets recently.  So, be careful of volatility.  Also, don’t get caught off-guard by any pinning related to options expiration today.  (There are a lot of inexperienced options traders out there right now that Mr. Market has to introduce to the pinning trick.)  As always, stick to your plans, follow the trend, and don’t chase moves you have missed.  (There is always another trade coming soon…no need to suffer FOMO.)  Hang in there with your rules and keep locking-in profits.  Also remember that Friday is payday.  So, take a paycheck and consider whether you want to lighten up or hedge going into the weekend news cycles. 

Ed

Swing Trade ideas for your Consideration and Watchlist: NIO, DOW, DFS, GPC, COF, MMM, KSS, TRUE. 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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