Markets gapped up a bit on Thursday (large-caps about half of a percent and QQQ about a quarter of a percent).  Stocks then put in a rainbow day, slowly rallying all morning and then slowly selling off all afternoon.  This left all three major averages printing Harami Inverted Hammer type candles with tiny white bodies.  On the Day SPY was up 0.84%, DIA up 0.91%, and QQQ up 0.61%.  The VXX fell a little over 3% to 19.79 and T2122 rose a bit, but remains in the lower mid-range at 37.50.  10-year bond yield rose sharply to 1.048% and Oil (WTI) fell over 1% to $52.26/barrel.

The talk of the day was the Reddit group raid on short positions such as GME. Brokers halted all trading on that ticker (as well as a few others), while the SEC, Congress and the Senate all announced investigations of market manipulation on the situation.  In an odd bedfellow situation liberal Representative Cortez (AOC) and conservative Senator Cruz both bashed brokers for the GME trading freeze.  On top of all this, customers sued some brokers for stopping them from continuing to buy the stock.  At any rate, GME fell 40% on the day as a result of the halt on buying.

During the day, Speaker of the House Pelosi said the House will take the next step to pass the Covid Relief package next week, with or without Republicans.  This will set up the reconciliation process that would allow Democrats to pass the $1.9 trillion relief package even without a single Republican vote.  However, not a single Democrat could break ranks in the Senate for this to work. So, while most people hope for political reconciliation and it is hoped for, politics seems to be going on as usual.

Related to the virus itself, US infections continue to fall from recent extreme highs.  The totals have risen to 26,338,607 confirmed cases and 443,769 deaths.  However, the number of new cases continues the trend downward as the average of new cases is now down to 162,849 new cases per day.  Still, deaths remain stubbornly high at 3,353 per day. In hopefull news, a large scale (30,000+ participants) tests of another new vaccine candidate from NVAX are now underway in the US and Mexico (see below).

Globally, the numbers rose to 102,132,931 confirmed cases and the confirmed deaths are now at 2,202,993 deaths.  In good news, the world’s average new cases is down again to 562,866 per day, but deaths remain high at 14,273 new deaths per day.  The fight between AZN and the EU continues over when and how much vaccine the EU will get.  The European Commission published the contract between the 2 sides in an effort to pressure the company into earlier delivery. In a separate AZN story, the German Vaccine Commission has said that AZN did not test their vaccine on enough elderly patients (65+), and that being the case, there is not enough data to recommend the vaccine for that age group.  Despite this, the EU is expected to approve the AZN vaccine for all ages.  NVAX stocked soared late Thursday when reports came from the UK that very small-scale test data shows their COVID-19 vaccine is up to 89% effective.  It was only 60% effective in a small South African test and only 45% effective in South Africa when patients who also had HIV were counted.  Nonetheless, the UK data gives hope for another vaccine in the next few months. Meanwhile, data out of Israel suggests the PFE-BTNX and MRNA vaccines are both more effective than had been thought.  Israeli data shows that less than 1% of people who were vaccinated with either vaccine have gotten COVID-19 since vaccination.

Overnight, Asian markets were strongly red across the board again.  South Korea (-3.03%) was an outlier, but significant losses were seen in most places such as Japan (-1.89%), India (-1.32%), and Hong Kong (-0.94%).  In Europe, we don’t see all red, but markets are definitely leaning to the downside so far today.  The FTSE (-1.02%), DAX (-0.73%), and CAC (-0.87%) are typical and lead the way lower.  As of 7:30 am, US Futures are also pointing to a gap lower at the open.  The DIA is implying -0.45%, the SPY implying -0.58%, and the QQQ implying -0.83% at this point.

The major economic news for Friday includes PCE Price Index, Q4 Employment Cost, and Dec. Personal Spending (all at 8:30 am), Chicago PMI (9:45 am), Michigan Consumer Sentiment and Dec. Pending Home Sales (both at 10 am).  There are also a couple of Fed speakers (Kaplan at 4 pm and Daly at 5:25 pm).  Major earnings reports on the day include BAH, CAT, CHTR, CVX, CHD, CL, LLY, ERIC, HON, JCI, LHX, LYB, PSX, ROP, SAP, SYF, and WY before the open.  There are no major earnings reports after the close.

It looks like Bears are roaring worldwide on Friday. Mr. Market may be taking profits or getting flat ahead of the weekend. Either way, it looks like earnings and the “social media-driven volatility” are the big stories occupying the Market’s mind. So, continue to be cautious. The short-term trend is bearish, but the longer-term trend could hardly be any more bullish.

Follow the trend, respect support, and resistance levels, and don’t chase the moves you missed.  Remember to lock in your profits. It’s all about achieving trade goals and sticking to your discipline.  Remember, our job as traders is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process.

Ed

Swing Trade Ideas for your consideration and watchlist: ADT, SPWR, WTI, KO, CMCSA, AAPL, TLRY. 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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