PMI Data and When Fed Will Taper in Focus

Markets opened relatively flat on Friday.  However, the dip-buyers showed up and led a choppy rally all day long. This left us with strong bullish candles in all 3 major indices that all closed very near their highs.  On the day, SPY gained 0.77%, DIA gained 0.48%, and QQQ gained 1.04%.  The VXX fell 7.5% to 27.75 and T2122 jumped back up into the mid-range at 41.61.  10-year bond yields rose a bit to 1.257% and Oil (WTI) fell 2.26% to $62.25.  For the week, all 3 major indices gave us long-legged, indecisive, Doji-like candles with the SPY down 0.60%, DIA down 1.19%, and QQQ lost 0.30%.

The annual Jackson Hole Economic Policy Summit coming up at the end of this week.  The recent talk (mostly from non-voting FOMC members in public events) has all been centered around starting the bond-buying taper soon.  That's assumed to be the main point of discussion among the global central bankers at the end of the week.  However, it was interesting to note that on Friday, Fed hawk Kaplan (not a voter) who has been calling for quicker bond-buying taper changed his tune slightly.  In a Friday interview, Kaplan told Fox News he may rethink his position on calling for a quick taper if it continues to look like the Delta variant spread is slowing economic growth.  He went on to say “it’s in our interest to slow the spread and right now we’re in a negative trend.”

Bitcoin hit $50,000 on Sunday night, which was a 3-month high.  This comes after a massive selloff in June and early July.  The all-time high of $64,000 was reached in April prior to the selloff.  Among the drivers of the recent rally was that COIN announced it would buy $500 million in crypto for its balance sheet and also allocate 10% of company profits to go into cryptocurrencies in future quarters.

In miscellaneous stock news, TGT announced they will triple the number of “shop in a shop” DIS stores they host in their stores.  TGT will add 100 DIS shops in existing TGT stores before the holiday season.  This seems to be a counter move to M announcing a few days ago that it will be adding Toys-R-Us “shop-in-a-shop stores.  Both seem to be hopeful signs for the brick-and-mortar retail space and perhaps for the economy in general.

Overnight, Asian markets were almost exclusively green.  Only Singapore (-0.49%) was in the red, while Taiwan (+2.45%), Shenzhen (+1.98%), and Japan (+1.78%) led the gainers.  In Europe, PMI data out of the EU remains strong (59.5) for July.  This has led to green across the board at mid-day in the region.  The FTSE (+0.49%), DAX (+0.25%), and CAC (+0.93%) lead the way as usual, with most of the continent’s exchanges falling somewhere between the FTSE and DAX. As of 7:30 am, US Futures are pointing toward a modest gap-higher.  The SPY is implying a +0.43% open, the DIA implying a +0.35% open, and the QQQ implying a +0.31% open at this hour.  10-year bond yields are up slightly to 1.275% and Oil is trading 3% higher in early trading as the dollar is trading down significantly this morning.

The major economic news scheduled for release on Monday is limited to Mfg. PMI and Services PMI (both at 9:45 am) and July Existing Home Sales (10 am).  The major earnings reports scheduled for the day are limited to JD before the open.  Then after the close, PANW reports.

Good global economic data should give the bulls a little tailwind early today. However, US PMI data for July comes out at 9:45 am, and with few earnings or other data expected, that is likely to drive the tune for the remainder of the day. Breadth picked up in the rally the last few days. However, this is still far from what could be called a broad-based bull charge. So, continue to trade carefully and focus on the trend in your trading horizon.

As always, manage your existing trades before you go chasing any new ones. Concentrate on the process and on managing those things you can control. Good trading rules and discipline is what separates long-term success from failure in trading. So, trade with the trend. If you miss a move, just admit it and move on to the next chart. Never chase price on an entry and remember to keep your losses small by using stops or hedges. And always consistently take profits when you have them.


Swing Trade Ideas for your consideration and watchlist: RIOT, CAN, MRVL, SWCH, MARA, DLTR, EBAY. 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.

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🎯 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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