Markets opened flat on Wednesday as we saw another sideways grind all day in the SPY and QQQ.  The DIA did similar, but managed a slightly positive trend to its grind.  This action left us with a Doji Harami in the QQQ, a small Bullish Engulfing with upper wick in the SPY, and a larger Bullish Engulfing in the DIA.  On the day, DIA gained 0.60%, SPY gained 0.09% (to a new all-time high close), and QQQ lost 0.16%.  It is worth noting that all the major indices closed Q2 at or very near all-time highs The VXX fell a percent to 29.46 and T2122 rose slightly to 44.12 (still in the mid-range).  10-year bond yields fell to 1.465% and Oil (WTI) gained a tad to $73.51/barrel.

In economic news, ADP Nonfarm Employment came in almost 100,000 higher than expected.  However, it was the May Pending Home Sales that was the big news.  It had been forecast to fall almost 1%, but came in up 8.0%.  That massive beat was very unexpected and may inform the much lower than expected mortgage demand recently.  In short, the sales may have already been booked in April and May.   

During the day Wednesday, Robinhood was fined a record $70 million by FINRA.  This covered $57 million for misleading advertising and another $13 million in restitution to customers for outages that prevented them from exiting trades.  Other news during the day included F announcing that it was cutting production in 8 North American plans (6 in the US) for various periods starting next week and lasting at least into August.  The cause of the shutdown was a lack of semiconductor chips for F-1150, Bronco, Mustang, and Explorer models.

The major automakers report their Q2 sales today (at unscheduled times).  The lone exception is F, which will report the same information Friday.  Analysts are expecting to see a 52% year-on-year increase in sales.  This would bring Q2 sales totals to 4.5 million vehicles, despite the factory shutdowns and incomplete assembly caused by the global chip shortage.

Overnight, Asian markets were mixed, but leaned to the red side on modest moves.  Shenzhen (-0.81%), Australia (-0.65%), and Hong Kong (-0.57%) paced the losses.  In Europe markets are also mixed, but lean to the green side as of mid-day, also on relatively small moves.  The FTSE (+0.45%), DAX (-0.14%), and CAC (-0.03%) are a good indication of European range.  As of 7:30 am, US Futures are pointing to a dead flat open.  The DIA is implying a +0.07% open, the SPY implying a +0.021% open, and the QQQ implying a -0.18% open.  In addition, 10-year bond rates are moved up with some strength overnight, now at 1.48%.  This comes amid Dollar weakness, which is also helping commodities.

Major economic news scheduled for Thursday includes Weekly Initial Jobless Claims (8:30 am), Mfg. PMI (9:45 am), and ISM Mfg. PMI (10 am).  Major earnings reports scheduled for the day include AYI, MKC, and WBA before the open.  There are no earnings releases scheduled for after the close

With the Dollar falling and both interest rate and commodity prices rising early, the stock market may rediscover some inflation fear today. For example, Crude is back to 2018 levels ($75/barrel). While most of the reallocation trade is done, there may be some retail trader shuffling still to do. So, keep an eye on rotation again. That said, the trend is still decidedly bullish, if a bit weary at this point.

Keep taking your profits, moving your stops, and maintaining your discipline. Follow those trading rules and stick to the trade plan. The odds favor following the trend and, as always, respect both support and resistance levels. However, 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. Remember that consistency is the key to long-term trading success. So, book those singles and doubles. Base hits win championships, not the occasional home run. So, don’t try to stretch things and get burnt in the process.

Ed

Swing Trade Ideas for your consideration and watchlist: XPEV, OXY, BP, ERX, AR, XOM, TSLA, IQ, JMIA, RIOT, MARA. 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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