Monday was a risk-on day across the market. The large-caps gapped up about half a percent and then all three major indices followed-through to the upside all morning. The afternoon saw a grind sideways in a tight range. This left us with strong white candles in both large-cap indices and a Bullish Engulfing Hammer-type candle in the QQQ. On the day, SPY gained 1.40%, DIA gained 1.75%, and QQQ gained 0.48%. The VXX fell 6% to 32.58 and T2122 shot higher to just outside the edge of the overbought territory at 77.88. 10-year bond yields spiked, but remain lower, at 1.492% and Oil (WTI) spiked 2.76% to $73.62/barrel. This came as the dollar fell which caused commodity price rises as a result.
During the day Monday bitcoin made news several times. The cryptocurrency fell below $32,000, before settling at $32,300. This came as China extended its crackdown on crypto-mining operations both geographically and ordering AliPay (online payments company) to do no business with entities related to crypto. Jim Cramer also told his colleagues that he has sold “almost all” of his bitcoin holdings. In a case of either bad or good timing (depending on how you look at it), MSTR announced they bought over 13,000 more bitcoin and their bitcoin holdings to $3 billion. (However, their average cost for bitcoin purchase is $37,000…so they are underwater and averaged down today.)
In miscellaneous business news, after the close, XOM announced it will cut 10% of its white-collar staff annually, following the GE model from the Jack Welch years. Meanwhile, DAL announced it plans to hire 1,000 new pilots by next summer. RIDE is taking heat from many of the print and electronic media sources, because top executives sold off major chunks of their stock in February, prior to the release of the company's terrible quarterly earnings in March. CNBC also reported that SAFM is exploring the sale of the company to private ag investment firm Continental Grain. The idea is to take advantage of the high price of chicken. Early Tuesday, the EU announced a new investigation into GOOG for antitrust behavior related to ad technology.
Related to the virus, new US infections continue to fall. The totals rose to 34,419,838 confirmed cases and deaths are now at 617,463. These numbers are now under-reported again as some states (mostly Southern) have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is flat and at an average of 11,502 new cases per day (the lowest number since March 2020). Deaths continue to fall and are now down to 300 per day (again, the lowest number since March 2020). However, it appears we may have made the common mistake again of getting too complacent. The Delta (Indian) variant continues to surge. For example, Missouri has seen a six-fold increase in hospitalizations, due to the new variant and a lack of vaccinations coupled with ending restrictions. Where the Delta variant made up just 10% of cases, Delta now accounts for 90% of the cases and almost all those patients are unvaccinated.
Overnight, Asian markets were mixed but mostly green. The most notable move came as Japan (+3.12%) surged back from its Monday hammering. Indonesia (+1.53%) and Australia (+1.48%) were the other two notable movers. Hong Kong (-0.63%) was the leader of those in the red. In Europe, a similar story is shaping up as of midday. The FTSE (+0.38%), DAX (+0.10%), and CAC (+0.19%) are typical, but there are half a dozen exchanges in the red across the continent. At 7:30 am, US Futures are flat. The DIA is implying a +0.04% open, the SPY implying a +0.11% open, and the QQQ implying a +0.26% open.
The limited major economic news scheduled for Tuesday includes May Existing Home Sales (10 am), Fed member Daly speaks (11 am), and Fed Chair Powell testifies at 2 pm (the first of two days of testimony). There are no major earnings reports scheduled for the day.
Interest rates are up slightly and Oil down two-thirds of a percent during premarket today. The dollar is also slightly stronger, which gives commodities in general a boost. With conflicting stories coming from different Fed members the last several days, don't be surprised if markets bide their time until Chairman Powell testifies this afternoon. Undoubtedly he will be grilled from both sides of the aisle on exactly when tapering of bond-buying and then interest rate hikes may begin. Those are obviously keys to the market psyche.
The odds still favor following the trend and respecting support and resistance levels. That doesn't really help in terms of the large caps, but the QQQ is still holding the bullish trend. Still, all trends reverse at some point and every S/R level is breached eventually. So, don't just assume trend, support, or resistance will always hold. Keep locking in profits, moving your stops, and maintaining discipline. Follow your trading rules, don't chase, and stick to the trade plan. Remember that consistency is the key to long-term trading success.
Swing Trade Ideas for your consideration and watchlist: HES, SFIX, LLY, CNC, KR, SPGI, LYFT, PLTR, FSR, MRO, FUBO, BA, RIG, CDEV, ICPT, PACB, WISH. 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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