Markets gapped down slightly Tuesday and then chopped sideways until the last hour of the day.  Then the bulls stepped in for a late-day rally that ran prices up into the close.  On the day SPY closed up 0.39%, QQQ up 0.37%, and DIA up 0.63%.  This made for another all-time high close in the QQQ.  VXX was down again, closing at 27.62 and T2122 rose into the overbought territory at 90.78.  10-year bond yields fell as money chased safety closing at 0.51% and Oil (WTI) finished up to $41.59/barrel.  Gold was also up again, closing at $2,034.60/oz. 

The stimulus deal remains far from done.  Interestingly, the splits in the GOP side have resulted in Senate Majority Leader McConnell being sidelined.  When asked Tuesday evening, he was unaware of the status of negotiations.  However, he did say that if / when the White House and Democrats do reach an agreement, he is prepared to support the deal.  Meanwhile, Speaker of the House Pelosi told Fox News she doesn’t think a deal will be reached this week, while the White House told them a deal will be made this week. Negotiators will resume talks Wednesday.

Late in the day Tuesday, Bloomberg reported that Fed sources tell them the FOMC is expected to soon announce another major push to add inflation to the economy.  This is nothing new as markets seem to have been banking on such a move with rising commodity prices and a falling dollar.  However, it has never been announced that this is actually an official policy.  The new policy and programs aimed at implementing it should be announced sometime in the next few weeks.  Still, there are reportedly internal detractors to the policy who fear the idea of purposefully raising inflation in a high unemployment environment as well as fearing the “unintended consequences” of simply pushing rates to an arbitrary number hoping for only good effects. 

In the US, the virus numbers show we have 4,918,770 confirmed cases and 160,323 deaths.  US daily numbers remain questionable as among others, CA reported dramatic undercounts the last few days due to the changes in destination and format of reporting, as well as now having two formats under new HHS policies.  On the day the report was 54,504 (low relative to a week ago) new cases and 1,362 deaths (which is more in line with historical data).  Tuesday also saw another of the expected cases of students testing positive after returning to schools.  This time a second-grader in GA.

On Tuesday, 34 State Attorneys General wrote a letter to HHC Sec. Azar warning him that GILD is not supplying enough of the drug remdesivir and that GILD’s recently announced drug pricing is impeding treatment of the virus.  They urged the use of the Bayh-Dole Act to allow another company to make the patented drug (which was developed partially using public funds).  In addition, 6 States (LA, MD, MS, MI, OH, VA) have acted to fill the void left by Federal inaction by forming their own pact to purchase 3 million quick-result tests themselves from BDX and QDEL rather than wait any more on Federal action. 

Globally, the number of cases has reached 18,731,900 confirmed cases and 705,023 deaths.  In China, the recent surge of cases seems to have been back under control with 22 reported new cases today.  However, Japan reported over 1,200 new cases for the 8^th straight day over 1,000, which for them is wildfire spread. In Australia, the 3^rd day of lockdown has not yet seen a break in new case numbers. Deaths also remain at record numbers in Victoria province.

Overnight, Asian markets were mixed, but leaned toward the green side and were mostly calm.  Only South Korea (+1.4%) and Indonesia (+1.03%) saw one percent moves.  In Europe, we see green across the board at this point in the day on the back of good European Earnings reports.  The FTSE is up 1% and the DAX and CAC are both up eight-tenths of a percent so far.  In the US, at 7:30 am futures are pointing to a modest gap higher at the open.  The DIA and SPY are looking to open up about 0.60% and the QQQ up about 0.32%.  

The major economic news for Wednesday includes ADP nonfarm Payrolls (8:15 am), Import/Exports (8:30 am), July Markit Service PMI (9:45 am), July ISM Non-Mfg. PMI (10 am), Crude Oil Inventories (10L30 am), and a Fed Speaker (Mester at 5 pm).  Major earnings reports include ABC, ATH, BWA, CDW, CVS, DISCA, HMC, HUM, NLSN, NI, NXST, ODP, PRGO, PGR, REGN, REYN, SRE, TA, TEVA, TRI, VRT, AND W before the open.  Then after the close, ADT, ALB, CWH, CVNA, CENTA, CTL ,CF, DCP, DOX, ET, FISV, GDDY, LNC, MET, PSA, RE, RMD, SQ, TRMB, UHAL, WELL, and WDC all report. (Sorry for the wrong list yesterday.)

Markets remain stubbornly bullish, but in a methodical way (not the huge gaps and big whiplash candles we saw not too long ago).  We are approaching resistance in the large-cap indices, but the QQQ has clear skies overhead. The main driver will continue to be the stimulus deal negotiations.  Democrats say they are staunch at $3.4 trillion and the Republicans, while split, seem to be at a number around $1 trillion.  The area in between is where traders will hope or fear as Mr. Market either counts his money too soon or expects less than we’ll get.  

Keep an eye on those mega-cap FAANG stocks.  Yesterday they again pointed the way.  Although they were split 50/50 on green/red lines among the eight largest cap stocks, the percentages pointed to exactly the index results we saw.  Also, don’t forget to stick to your rules.  Follow the trend, don’t predict reversals or chase missed-moves, and always take profits as you go.  Our job is to consistently make our goals, not catch lightning in a bottle all in one trade.

Ed

The Daily Swing Trade Ideas for today: BJ, GPS, XLB, DG, XLP, PM, HD, XLI, VZ, APA, FRO. 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.

Hit and Run Candlesticks / Road To Wealth Youtube videos

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.

Free YouTube Education  •  Subscription Plans • Private 2-Hour Coaching

DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it.  Past performance does not guarantee future results.  Terms of Service