Markets gapped down about a half percent Thursday after a worse than expected Weekly Jobless Claims number.  However, the bulls stepped in and rallied markets much of the day.  Then about 2pm markets sold off again taking us back near Wednesdays close before a last-minute rally.  On the day, QQQ was up 0.47%, SPY up 0.28%, and DIA up 0.19% with all 3 leaving large upper wicks.  The VXX fell about 2% to 26.19 and T2122 stayed deeply oversold at 1.50.  10-year bond yields fell to 0.664% and Oil (WTI) rose three-quarters of a percent to $40.22/barrel.

Regardless of your political or economic philosophy, we know markets love “free money” coming from Washington. So, in a follow-up story to the Fed requests for more fiscal stimulus this week, House Speaker Pelosi has instructed her committee chairs to draft another relief package (which will undoubtedly look very similar to the previous package the House passed).  It will include additional enhanced unemployment, direct payments to Americans, small business loans, and aid to the airline industry. The House may vote on this new bill as soon as early next week and the new price tag is said to be $2.4 trillion (which is essentially exactly where the Democrats were when the talks collapsed, but $1 trillion below the last bill the House passed in May).  Last week White House Chief of Staff (and negotiator) Meadows had said the Administration would okay $1.5 trillion.  So, the hope is that this new bill will restart negotiations. However, it remains a longshot as the sides (and even factions on the Republican side) remain far apart.

Following-up to the “TikTok Deal” story (involving ORCL and WMT), things are still unclear.  The Chinese government has not approved the deal, but Byte Dance has applied for a Chinese export license which would allow a partial transfer.  In the US, a Federal Judge has asked the Administration whether it will defer the ban on TikTok and WeChat again or defend their policy in hearings over the weekend.  (No reply yet.)  Meanwhile the President’s claims that ORCL would get full access to all TikTok source code conflicts with Byte Dance’s statements that the new company would buy use of the algorithms, etc. from the Chinese-located parent company, which is where actual processing would occur. And, of course, the President’s claim that Byte Dance would pay $5 billion for an educational project have been denied by Byte Dance.  However, it is known the claim that the board of the new company would all be Americans is false.  The board would include 4 undetermined American Citizens and Chaired by Byte Dance founder Zhang Yiming (with Byte Dance holding 80% of the ownership).   

On the virus front, in the US, the numbers show we now have 7,185,915 confirmed cases and 207,540 deaths.  The daily new case count grew to 45,355, well above the 7-day average of new cases.  Deaths came back to typical numbers at 942 for Thursday, well above the average of 761 per day.

Globally, the numbers rose to 32,454,833 confirmed cases and 988,497 deaths.  As witnessed by the lockdown in Israel, there appears to be a surge in the middle east with Lebanon, UAE, Bahrain.  Oddly, Saudi Arabia, Egypt, and Qatar have all reported dramatic drops in the number of new cases over the last month.  In Europe, the spread continues with Poland, Russia, and the Czech Republic all seeing the highest increase in cases in several months.

Overnight, Asian markets were mixed with India, Australia, and Japan pacing the winners.  China, Taiwan, and Hong Kong paced the losers, though most losses were moderate.  However, stocks are decidedly bearish so far today in Europe.  The DAX is down 1.67%, CAC down 1.76%, and FTSE down 0.57%.  The rest of the bourses are all well into the red as well. At 7:30am, US futures are pointing to another gap down open.  The QQQ is pointing to a modest open 0.30% lower, but the large-cap SPY (-0.63%) and DIA (-0.78%) are implying a bigger gap down as markets are staring into a fourth straight losing week.

The major economic news for Friday is limited to August Durable Goods (8:30 am). There are also no major earnings reports for the day.

The bulls tried to come back on Thursday, but rolled over and gave back ground in the afternoon.  This left us with nothing but an indecisive day in a downtrend.  While this relative pause was expected after a brutal Wednesday, it does nothing to buoy spirits coming into Friday.  The bears continue to smell blood and volatility remains high.  All we can do is either sit on the sidelines or be very careful and quick in this market.  If you do trade, stick to your rules, follow the trend, and don’t chase moves you have missed.  Keep locking-in profits, because it’s the singles and doubles that add up to championships, not the occasional home runs.  Finally, remember it’s Friday.  So make a conscious decision about what positions and/or hedges you want to carry over the weekend news cycle.

Ed

Swing Trade Ideas for your Consideration and Watchlist: TZA, SDS, SQQQ. 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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