Markets opened essentially flat on Monday and then went on a morning roller-coaster ride.  However, at about 12:30 pm, the bulls took over and put in a sustained rally for the rest of the day, closing on the highs.  This left us with white-bodied candles with lower wicks in all 3 major indices.  The QQQ put in a Doji Continuation signal while it is quite possible to see the DIA as a Hanging Man candle after the rally of the last 2 weeks.  On the day, SPY gained 0.70%, DIA gained 0.27%, and QQQ gained 1.56%.  The VXX rose 2% to 25.73 and T2122 fell to 82.69.  10-year bond yields fell a bit to 2.455% and Oil (WTI) plunged more than 9% to $103.49.

Before the opening Monday, TSLA made an SEC filing saying that it wants to split the stock and will ask for approval at its next annual shareholder’s meeting.  This would be done with a “stock dividend,” although the split ratio was not revealed.  With a stock dividend, for example, if the split was 4-for-1, then every stockholder of record would get 3 additional shares for every share they own at the time of the split.  The annual meeting has not yet been scheduled, but the 2021 meeting was in early October.  TSLA stock has more than doubled since the last split in August 2020.

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President Biden released his 2023 Budget Monday.  The plan calls for a 20% minimum income tax rate for those who earn over $100 million, increasing the corporate tax rate from 21% to 28%, and repealing several tax breaks for oil and gas producers.  The proposal has zero chance of passing as-is but will be the starting point for the haggling in the House and Senate.

The “Chinese Beige Book” a private market survey (not official Chinese government numbers) of 4300 Chinese Manufacturers, says that Chinese Manufacturing has been hit harder by Covid this quarter than last year.  This will have read-through impacts on supply chain issues across the globe. The problem was attributed to the rest of the world coming out of fiscal and monetary stimulus mode as well as the impacts of the disease on both Chinese production and demand.  Revenue, profit, and demand growth are all getting softer, which highlights the reason China is still easing while the rest of the world has begun to tighten.  One anomaly is that the survey found that the much-derided Chinese Property sector is actually doing better than the headline would have us believe.  This is especially true in Beijing and Shanghai (the current city lockdown notwithstanding) according to a report from CNBC.

Overnight, the Asian markets were mostly green.  Hong Kong (+1.12%) and Japan (+1.10%) led the gainers while Malaysia (-0.91%) and Shenzhen (-0.46%) paced the losses.  However, in Europe, with the exception of Russia (-0.91%) we see strong green numbers across the board at mid-day.  The FTSE (+1.33%), DAX (+1.91%), and CAC (+2.30%) are leading the region higher in early afternoon trading.  As of 7:30 am, US Futures are pointing toward a modestly green start to the day.  The DIA implies a +0.38% open, the SPY is implying a +0.39% open, and the QQQ implies a +0.35% open at this hour.  10-year bond yields are up strongly again to 2.503% and Oil (WTI) is rebounding 1.46% from Monday’s terrible drubbing in early trade.

Major economic news scheduled for release on Tuesday is limited to Feb. JOLTS and Conf. Board Consumer Confidence (both at 10 am) and a couple of Fed speakers (Williams at 9 am and Harker at 10:45 am).  The major earnings reports scheduled before the open are limited to ASO, ESLT, and MKC.  Then after the close, CALM, CHWY, CNXC, LULU, MU, MLKN, PVH, and RH report.

With Ukraine making some gains in the South (near besieged Mariupol) and no major economic news this morning, the mood seems to be somewhere between lifting and waiting in the premarket. However, we should expect massive volatility (especially in energy markets) to continue to be the norm. So, don’t get complacent. The bulls still clearly have the momentum, but there is resistance close overhead from major averages in the QQQ and DIA as well as prior price levels. Be careful of both quarter-end window dressing rotation toward the winners funds look to assure owners they are in the ones that did best…even if it was a last-minute entry. And expect that intraday volatility as we head into the last 3 days of a quarter of war and inflation-ridden markets.

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: TDOC, FAST, NET, PLTR, MCHP, ORCL, DLTR, WMT, UPS, MSFT, COST, BSX, ARKK, AMD. 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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