Thursday saw a modest gap higher with about 15minutes of follow-through.  The rest of the day was a dead market grinding sideways in a very tight range.  However, heavy selling (or dark pool reporting) saw the biggest candle of the day give back a decent portion of the gains the last 5 minutes.  This left us with white candles with upper wicks in all 3 major indices.  All 10 major sectors were green on the day with Consumer Cyclical and Industrials leading the way.  However, also note that, as expected, the last trading day before the Xmas break was a low volume day.   For the day, SPY gained 0.62%, DIA gained 0.55%, and QQQ gained 0.75%.  The VXX lost a percent to 20.18 and T2122 rose into the overbought territory at 88.10.  10-year bond yields rose to 1.493% and Oil (WTI) rose more than a percent to $73.76/barrel.  

Omicron is back in the news over the weekend as UAL, DAL, AAL, and JBLU had to cancel 1,600 US flights between Friday and Sunday due to covid cases among crews.  While this sounds terrible, it really only accounted for about 5% of all flights over the weekend.  Still, travel-related stocks are dropping in premarket on the news.  In better news, the UK government released a study on Sunday that reports omicron patients are 70% less likely to require hospitalization than those with the delta variant.  This falls roughly in line with a previous South African study finding omicron patients to be 80% less likely to require hospitalization. However, the news may need to be tempered by the fact that omicron is more communicable.  So, in theory, there should be more omicron infections than delta cases.

Bloomberg reported Sunday that MA found that holiday (Nov. 1- Dec. 24) sales rose 8.5% versus 2020 (+10.7% from 2019).  However, note that these ARE NOT inflation-adjusted numbers.  So, the majority of the gains were due to price increases and not new buying.  The largest gains were in apparel (47%), jewelry (32%), and electronics (16%).  MA also reports that ecommerce now accounts for 21% of all holiday sales, which is equal to department store sales.

Mortgage rates fell to a four-week low this week.  The 30-year fixed-rate conforming loan rate averaged 3.27% (down from 3.30%).  However, refinance loan applications rose only 2% while new home purchase loan applications fell 3%.

Overnight, Asian markets were mixed on mostly modest moves.  Malaysia (1.15%) was an outlier to the upside.  Taiwan (+0.49%), India (+0.49%), and Australia (+0.44%) led gainers.  South Korea (-0.43%) and Japan (-0.37%) paced the losses.  In Europe, stocks are mostly green at mid-day.  The FTSE (-0.02%), DAX (+0.15%), and CAC (+0.21%) are typical of the region with Denmark (+1.11%) an outlier.  As of 7:30 am, US Futures are pointing toward a bullish gap to start the week.  The DIA implies a +0.55% open, the SPY is implying a +0.62% open, and the QQQ implies a +0.85% open at this hour.  10-year bond yields are flat, but Oil (WTI) is down almost 1.5% in early trading.

There are no major economic news scheduled for release Monday. Note that Canadian markets are closed Monday in Tuesday for the holiday.  There are no earnings reports scheduled for Monday either before or after the market.  

As we start back up from the Christmas break, it looks like the bulls are in charge as of premarket. Remember that volume is still expected to be low with a lot of big fund leaders extending their holiday another week. With that said, beware of intraday whipsaw that will absolutely punish those who chase. Remember, plan the trade and trade the plan.

Remember the first rule of making a lot of money in the market is to not lose a lot of money in the market. So, stick to your trade rules and on managing the things you can control. When you’re wrong, admit it and take your loss. (That’s why we set stops.) Trade with the trend, keep consistently taking profits when you have them, and move your stops in your favor.

Ed

Swing Trade Ideas for your consideration and watchlist: No trade ideas for Monday. 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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