Monday was an interesting day, with a 1.5% swing in premarket futures (after Russia’s President Putin said “okay” to his Foreign Minister saying they should continue talking to the West because there was always a chance to reach a deal).  The net result was a flat open and a whipsaw day that ended up only moderately moved.  All 3 major indices printed indecisive, Spinning Top type candles.  On the day, SPY lost 0.33%, DIA lost 0.40%, and QQQ gained 0.12%.  The VXX rose slightly to 23.31 and T2122 dropped just into the oversold territory at 18.75.  10-year bond yields spiked back up to 1.991% and Oil (WTI) spiked almost 2% to $94.92 (on intraday news that the US was closing its Embassy in Kyiv and rumors that the Russians were moving toward the border of Ukraine).

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The Fed made no announcement following their emergency meeting on Monday, and based on comments made to the press it is likely they have no consensus.  (Bullard called again for a 1% increase before July 1, George said she supports a more gradual approach, and Daly said she favors one modest hike in March and then wait and see.)  However, Reuters reports that by afternoon, futures of the Fed Funds Rate showed that traders are now under a decreased belief the Fed will raise rates before the March Fed meeting (down to 3% implied probability from 30% last Friday).  In addition, futures on the Secured Overnight Financing Rate (the topic of the emergency meeting) now show traders only believe there is a 2% chance of that rate rising before the March Fed meeting (down from 16% on Friday).  These seem to indicate a strong belief there will be no rate increases prior to March.  Of course, traders can be wrong, but leaks (even from the Fed) also happen.

In earnings news, after the close on Monday, AAP, AMKR, CAR, TNET, SCI, CLR, and ANET all reported beats on both lines.  Meanwhile, BKD, PRI, and VNO all missed on earnings but reported beats on revenue.  So far this morning, MAR, IQV, ALLE, HSIC, ZTS, and BWA have all reported beats on both lines.  Meanwhile, FIS beat on earnings but came in light on revenue.  Finally, LDOS just reported a miss on both lines.

Overnight, the Asian markets were mixed and varied.  India (+3.03%), Shenzhen (+1.70%), and Malaysia (+1.00%) led the gainers.  Meanwhile, South Korea (-1.03%), Hong Kong (-0.82%), and Japan (-0.79%) paced the losses.  In Europe, stocks are nearly green across the board on the Russian “step back” news at mid-day.  Only Norway (-0.34%) is in the red, while the FTSE (+0.70%), DAX (+1.84%), and CAC (+1.56%) are typical of the continent.  Russia (+3.08%) is an outlier as that country has started to return some troops to their home bases (away from Ukraine).  As of 7:30 am, US Futures are pointing to a large gap higher.  The DIA implies a +1.29% open, the SPY is implying a +1.64% open, and the QQQ implies a +2.20% open at this hour.  10-year bond yields are spiking to 2.035% and Oil (WTI) is down more than 3.6% on the Russia-Ukraine news.

The only major economic news scheduled for Tuesday is Jan. PPI and NY Empire State Mfg. Index (both at 8:30 am).  The major earnings reports scheduled for before the market include ALLE, ARCH, ABG, BWA, ECL, FIS, FSV, HSIC, HUN, IQV, LDOS, LGIH, MAR, RPRX, QSR, SABR, TRP, WCC, and ZTS.  Then after the close, ACCO, ABNB, AKAM, ANDE, CF, CINF, CLW, CRK, DVN, WIRE, ENLC, GXO, IAC, INVH, LZB, MCY, MRC, REZI, RBLX, SEDG, TX, TOST, VIAC, WELL, and WYNN report

Pent-up bullish energy is likely to be released this morning as Russia has started moving some of its troops back away from the Ukrainian border. That news has sparked strong rallies in Europe and in the US futures market. So, the bulls will have the momentum early. Don’t get caught chasing, because the Russia news is not final and it does nothing to address the main overhang, Fed reaction to inflation (and inflation impacts on corporate profit). More immediately, it also does not change the fact we’ve been seeing a lot of intraday volatility/swings. So, stay nimble and/or hedged to volatility, and remember we have some potential support (at the bottom of a dreaded h pattern) not far below.

Remember that you don’t have to trade every day and you definitely don’t need to chase the premarket moves by trading early. 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. 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: No trade ideas today (Rick is on vacation this week). 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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