Profit-Taking Friday?

The bulls continue their surge Thursday.  The SPY and DIA both gapped higher and then just vacillated the rest of the day, closing very near the open.  The QQQ gapped higher, but found some follow-through as TSLA rebounded after Wednesday’s profit-taking.  The SPY ended 0.34% higher, the DIA 0.30% higher, and the QQQ 0.86% higher.  All three were new all-time high closes.  The VXX fell slightly to 14.09 and the T2122 fell back to 67.15 (out of the overbought region).

We received generally good economic data (Weekly Jobless Claims were below estimates again and Unit Labor Costs were in-line, while Q4 Nonfarm Productivity was below expectation) on the day.  Added to this was generally good earnings.  Together these factors seemed to override any coronavirus fears for the bulls. 

On the coronavirus front, the number of patients continues to grow.  The tally now sits over 31,000 confirmed cases and 636 deaths.  In terms of impacts, it was announced that airlines around the world have now canceled 50,000 flights to or from China (including Hong Kong).  However, an independent economic data provider about China, called China Beige Book (not to be confused with the periodic US Beige Book Report produced by the Fed) forecasts that while there will be a GDP drag on China, the long-term outlook remains stable.

After hours Thursday, EBAY was taking a beating after ICE said they have decided to stop exploring a buyout of the auction website.  MYAD was down a whopping 30% after missing on both the top and bottom lines.  However, UBER also spiked on a smaller than expected loss and PINS soared 17% after beating estimates. 

Overnight, Asian markets were mixed, but generally in the red.  For a change of pace, China was the lone green spot in that region. However, Europe is showing red across the board at this point in their day.  As of 7:45 am, U.S. futures are all pointing toward a gap lower of a modest one-third of one percent.

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Friday’s major economic news includes Jan. Avg. Hourly Earnings, Jan. Nonfarm Payrolls, and Jan. Unemployment Rate (all at 8:30 am).  While earnings are light on Friday, we will hear from ABBV, CBOE, and FE.

The bulls have been relentless all week.  However, globally, Friday seems like a profit-taking day.  Maybe the rest of the world wants to lock in gain before the long weekend news cycle just as we suggest.  The trend remains clearly bullish, but we are a bit extended and there is that weekend headline risk to consider. 

So, again I think we need to remain nimble, hedged or cautious.  Don’t let profitable positions go South on you when you aren’t looking.  I know I sound like a broken record on the topic, but nobody ever went broke taking profits and reducing risk.  Plan the trade, make the trade come to you and then trade the plan.

Ed

No Swing Trade Ideas for your consideration and watchlist on Friday If you have tickers you want to discuss, be sure to come to the trading room at 9:10am Eastern and we'll give them a look. Trade smart, take profits along the way and trade your plan. Also, don't forget to check for upcoming earnings. Finally, remember that the stocks/etfs 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.

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🎯 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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