The bulls did a good job on a volatile day Tuesday, especially in cyclicals and small-caps.  After a dead flat open and sideways first hour, there was a late morning and then last-hour rally taking us out near the highs on all 3 major indices.  It was definitely a “risk-on” day with the IWM (+1.68%) outperforming all 3 of the major indices.  This left us with a Bullish Engulfing candle in both the SPY and QQQ as well as a 2-Star Morning Star in the DIA.  On the day, SPY gained 0.80%, DIA gained 1.04%, and QQQ gained 1.13%.  The VXX fell 4.5% on the day to 19.50 and T2122 remains in the mid-range at 69.70.  10-year bond yields rose sharply again to 1.961% and Oil (WTI) lost 1.77% to $89.70/barrel.

After the close, XPO, CCK, FLT, GFS, PAYC, NCR, HUBG, OMC, JKHY, SCSC, LYFT, SAVE, and ENPH beat on both lines.  Meanwhile, CMG, ATO, and AIZ beat on earnings but came in light on revenue.  YUMC missed on both lines as costs and the impact of Covid double-teamed the Chinese version of the restaurants.

So far this morning, earnings have been pretty strong.  BG, CDW, CVS, HMC, TM, EQNR, PFGC, PAG, LAD, ICL, REYN, and ARCC all reported beats on both lines.  YUM and TRMB missed on earnings, but beat on revenue.  Meanwhile, CME, and IIVI missed on revenue, but beat on earnings.  Only AVYA has reported a miss on both lines as of 7:40 am.

In miscellaneous business news, Ashwani Gupta the COO of Nissan, told CNBC-Europe that his company is focused on having 50% of vehicles produced be electric by 2025. This is similar to the 2021 claims made by BMW to be 50% electric by 2030 and by Volvo to be fully electric by 2030.  Gupta said it is the new “Euro 7” emissions rules taking force in 2025 (and the cost of compliance with them) that will essentially make internal combustion engine vehicles unviable for both car manufacturers and consumers longer-term.  (While Europe is a huge auto market, the rest of the world following Europe’s lead is truly the problem for traditional automakers.  The fear is that if the US were to follow Europe’s lead on emission standards, which our political interests have always fought, the internal combustion engine market would simply end almost immediately.)

Overnight, the Asian markets were green across the board.  Hong Kong (+2.06%), Shenzhen (+1.54%), and Japan (+1.08%) led the way and were typical of the region.  In Europe, we see the same thing as of mid-day.  The FTSE (+0.74%) lags, but the DAX (+1.63%) and CAC (+1.48%) are typical, with some of the smaller exchanges being up more than 2% in early afternoon trading.  As of 7:30 am, US Futures point toward a gap higher.  The DIA implies a +0.61% open, the SPY is implying a +0.85% open, and the QQQ implies a +1.21% open at this hour.  10-year bond yields have dropped to 1.927% and Oil (WTI) is off a third of a percent in early trading.

The major economic news scheduled for release Wednesday is limited to Crude Oil Inventories (10:30) and the WASDE Report (noon).  However, there are also 2 Fed speakers (Bowman at 10:30 and Mester at noon).  Major earnings reports scheduled for before the market include AVYA, BDC, BG, CDW, CHEF, CME, CVS, EGNR, FOX, FOXA, HMC, IIVI, LAD, MSGE, PAG, PFGC, REYN, TEVA, TM, and YUM.  Then after the close, UHAL, AFG, ACGL, ASGN, CHX, CPA, CXW, DCP, ENS, ENSG, NVST, EQT, EFX, RE, IFF, ITT, LUMN, MAT, MDU, MGM, MOH, MSI, NGL, ORLY, PPC, PAA, SONO, STC, TTMI, TWLO, USX, UBER, DIS, and ZNGA report.

It looks like markets are going to try to complete daily J-hooks in all 3 major indices, at least in the premarket. With limited planned economic news today and generally strong morning earnings, the bulls have all the momentum at the opening bell. However, volatility and fear of rate hikes did not disappear overnight. So, don’t assume this is the start of an unending bull run. Just stay aware and remain nimble and/or hedged to volatility.

Stick to your trading rules and manage the things that you can control. Trade with the trend, don’t chase, keep consistently taking profits when you have them, and move your stops in your favor. Remember that the first rule of making money in the market is to not lose big money in the market. So, don’t be stubborn, and protect yourself from yourself. If you are wrong, just admit it and take your loss. (That’s why we set stops in the first place.) Trading is a marathon, not a sprint.

Ed

Swing Trade Ideas for your consideration and watchlist: PENN, MRVL, VIPS, LUV, V, CHGG, WOOF, BBBY. 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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