Markets gapped modestly higher and followed through the first hour of the day in all 3 major indices.  However, from that point, markets ground sideways in a tight range the entire rest of the day.  This left us with gap-up white candles with small upper wicks in all 3 cases.  It is worth noting that the volume was very light across the board.  On the day, SPY gained 1.16%, DIA gained 0.77%, and QQQ gained 1.95% as stocks continue to be extended to the upside.  The VXX fell over 2% to 25.44 and T2122 rose slightly to a very-extended 96.08.  10-year bond yields continue to spike, closing at 2.388% and Oil (WTI) fell a fraction to $111.30.

Even after markets have digested Chair Powell’s more hawkish position from Monday, the stock market seems to have accepted a more aggressive Fed. However, bond markets continue to spike, and futures markets are now beginning to expect a half-percent hike in both May and June (now reading a 66% chance, up from 50-50 on Monday afternoon). This is in line with GS raising its own forecast Tuesday to an expectation of a 50-basis-point hike at both meetings. Buckle up as Chair Powell speaks again this morning.

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On the Russian story, the FBI provided more background on President Biden’s warning to US companies about cyberattacks.  The Cybersecurity and Infrastructure Security Director told industry executives that 5 major US energy companies and at least 18 other major companies in the Banking and Defense industries have had their networks probed by hackers from Russian IP addresses within the last few days.  These probes are a typical prelude to a coordinated hacking attack.  (She refused to name the companies involved.) Meanwhile, President Biden will be traveling to an emergency NATO summit, a meeting of the Group of 7, and a session of the European Council on Thursday.  He is expected to announce another round of sanctions in coordination with members of the NATO and EU, to increase pressure and crackdown on sanction evasion.  How “the West” will respond if China provides more assistance to Russia is also set to be on the agenda.  Elsewhere, French oil company TTE has also announced that it will stop buying Russian oil by the end of 2022 at the latest.

After the close, ADBE, AIR, and WOR reported beats on bother revenue and earnings.  In other after-hours news, it was announced that the Chairman of GME bought another 100,000 shares of the stock, which brings his ownership to just below 12% of the stock.  This caused GME to soar 20% in post-market trading on the heels of a 31% rally during the day.  So, meme stock wild rides are back baby! This morning, TCEHY beat on revenue while missing badly on earnings.  This same despite it being the slowest revenue growth in company history amidst Chinese tech industry regulation tightening.  Other notable premarket reports include GIS beating on earnings while missing on revenue, WGO beating on the top line while missing on the bottom line, and JKS missing on both lines.

Overnight, the Asian markets were mostly green.  Japan (+3.00%) was an outlier to the upside with Hong Kong (+1.21%), Taiwan (+0.98%), and South Korea (+0.92%) leading the gains.  Only New Zealand (-1.18%) and India (-0.50%) were down.  In Europe, stocks lean to the downside on modest moves at mid-day.  The FTSE (+0.28%) is an outlier with the DAX (-0.32%) and CAC (-0.32%) typical of the rest of the continent.  (Besides the FTSE, only Switzerland and Norway are slightly above flat in early afternoon trading.)  As of 7:30 am, US Futures are pointing toward a modestly lower open.  The DIA implies a -0.27% open, the SPY is implying a -0.33% open, and the QQQ implies a -0.51% open at this hour.  10-year bond yields are slightly lower and Oil (WTI) is up another 2.6% in early trading.

The major economic news scheduled for release on Wednesday includes Feb. New Home Sales (10 am), Crude Oil Inventories (10:30 am), and a couple of more Fed speakers (Chair Powell at 8 am and Daly at 11:45 am).  The major earnings reports scheduled before the open include CTAS, CL, GIS, HTHT, JKS, TCEHY, and WGO.  Then after the market close, FUL, KBH, and TCOM report.

The major indices look to be opening as inside candles this morning. However, Fed Chair Powell will speak again shortly (8 am) and it is unclear if he will return to his moderate tone of the past or stay with the more hawkish tone from Monday. It would not be a surprise if traders really parse his every word and inflection at this point. So, beware of volatility. Also remember that even if a bottom has already been put in, rest and consolidation are clearly in order. However, we can’t predict the market. So, just follow the chart and be careful of chasing at this point of the recent run, but we do need to recognize that the longer-term downtrend has been broken. At this point, we need to see a higher low hold and bulls to step in to establish the new uptrend.

Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. The first rule of making big money in the market is to not lose big money in the market. Don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. Stick to those trading rules and manage the things that you can control while trying not to worry about the things you have no control over at all. Trading is a marathon, not a sprint. So, focus on the process and enjoy yourself.

Ed

Swing Trade Ideas for your consideration and watchlist: GP, ZG, ZION, JBT, CGNT, HES, QS, ASPN, RBLX, FUBO. 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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