Markets gapped modestly higher at the open Thursday.  Then the bulls stepped in for a morning rally.  Most of the day saw a grind sideways and then bulls made a push at the end of the day.  As a result, the DIA printed a White Marubozu (Shaved Head) candle and the other two major indices printed large white candles themselves.  All 3 closed at the highs of the day.  So, on the day SPY gained 1.14% (closing at an all-time high), DIA gained 1.11%, and QQQ gained 1.18% (also closing at a new all-time high close).  The VXX lost over 4% to 16.50 and T2122 rose deeper into overbought territory to 89.58.  10-year bond yields remains essentially flat at 1.136% and Oil (WTI) rose again to $56.23/barrel (over a 12mo. high).

After the close, Senate Republicans are announcing dozens (hundreds?) of amendments to the budget bill (relief package).  These seem to be being offered as amendments as a way to force the process to vote on the amendments in hopes that it will fracture Democratic solidarity and/or force an item-by-item vote that can be used in later campaigning.  However, the Senate plowed ahead along party lines to pass the budget bill.  So, now reconciliation between the House and Senate versions begins and the package is still on track for signing before the current relief bill expires March 15.

After a meeting with Treasury Sec. Yellen on Thursday, the SEC and CFTC agreed to a timely study of the situation, including trading practices and the actions by brokers that temporarily prevented buying and forced selling of some tickers.  However, they also made a boilerplate statement that “the infrastructure of the stock and commodities markets remains resilient, even during periods of extreme volatility.”  In related news, it was revealed that the CEO of Robinhood is not licensed by FINRA.  In other related news, the high-frequency trading firm Citadel sued the SEC to get the D-Limit method used by the IEX exchange (intended to discourage predatory front-running) prohibited.  (In other words, they don’t want anything to prevent them front-running orders.)  This is related because Citadel accounts for 40% of Robinhood’s revenue.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 27,273,890 confirmed cases and 466,988 deaths.  However, the number of new cases continues the recent trend of falling quickly and is back down to the pre-election level as the average new cases are now 129,894 new cases per day.  Still, deaths remain stubbornly high at 3,100 per day.  JNJ asked the FDA for emergency approval for their COVID-19 vaccine (66% effective, but requires only one shot).  Then Thursday night, one of the Biden COVID advisors told CNBC that the 3 main mutations (UK, South Africa, and Brazil) may evade the immune response created after vaccinations with at least the two existing US vaccines (PFE and MRNA).   White House Chief of Staff Klain said they hope to revive a Trump Administration idea that never got off the ground.  That being the mailing of masks to all Americans.  The original idea was scrapped because of the previous Admin’s fear it might cause “concern or panic.”

Globally, the numbers rose to 105,506,871 confirmed cases and the confirmed deaths are now at 2,296,567 deaths.  In good news, the world’s average of new cases is down again to 485,014 per day, but mortality remains high at 12,969 new deaths per day. Countries are beginning to work on “Vaccine Passports” in many countries.  Sweden is the latest of the EU nations who announced they are working on such a plan with hope of implementing it in the summer.  The UK has announced it will implement mandatory hotel quarantine for incoming travelers from 33 “red list” countries as of mid-February. (The US is not on the list as of now.) 

Overnight, Asian markets were mixed, but mostly green.  The only loses were in Shanghai (-0.16%), Shenzhen (-0.88%), and Malaysia (-0.40%).  The rest of the region was strongly in the green with Japan (+1.51%), Australia (+1.11%), and South Korea (+1.07%) leading the way.  In Europe, a similar story is taking shape as the bulls are in charge in all but 3 exchanges.  The FTSE (+0.09%) is flat, DAX (+0.29%) up modestly, and CAC (+1.11%) leading the charge.  As of 7:30 am, US Futures are implying a moderate gap higher at the open.  DIA is implying +0.47%, SPY implying +0.49%, and QQQ implying +0.37%.

The major economic news for Friday includes Jan. Avg. Hourly Earnings, Jan Nonfarm Payrolls, Jan Participation Rate, Dec. Trade Balance, and Jan Unemployment Rate (all at 8:30 am).  Major earnings reports on the day include ADNT, AON, BERY, CAH, EL, HRC, ITW, LAZ, LIN, REGN, SNY, SPB, TT, and ZBH all before the open.  There are no earnings reports after the close.

With Stimulus now a done deal, the focus turns back to earnings, and the recent so-called social-media volatility. It is worht noting that CNBC is reporting that the recent short-squeezes may not have been as much due to retail traders as had been thought. No exact numbers were given, but insitutional volume in those names apears to be significant. That said, we know it was likely the retail player who bore the brunt of being left holding the bag during this week’s 80% selloff in GME. At any rate, earnings have been better than expected so far this cycle (on average) and with vaccinations now gathering steam, there is a hope for returning to normal again by the summer. That optimism has spilled into markets as the bulls have the momentum again.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed.  Remember, nobody ever sustained a career by picking reversals…so don’t do it. Keep locking in your profits when you have them. It’s all about achieving trade goals and sticking to your discipline.  Our job is to produce consistent gains…not catch lightning in a bottle. So, stick with your plan, maintain discipline and work your process. Also, remember that it’s Friday…and Friday is payday. So, don’t forget to take some profits off the table to pay yourself ahead of the weekend.

Ed

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