All 3 major indices gapped modestly lower at the open Wednesday on concern over stimulus and a lower than expected ADP Payroll Number (25% miss).  However, the bulls stepped in and put in nice white candles for the day on talks between Democrats and Republicans over potential stimulus.  The SPY and QQQ both closed at new all-time high closes and the DIA is not far off.  On the day the DIA gained 0.24%, the SPY gained 0.21%, and the QQQ gained 0.13%.  The VXX was flat at 17.30 and T2122 (4-week New High/Low Ratio) fell 7%, but remains overbought at 86.24.  10-year bond yields rose again to 0.939% and Oil (WTI) rose 1.5% to $45.19/barrel.

CNBC reported some major economic news Wednesday.  It reported that the country’s largest shipper UPS had halted package pickup Monday from many of the nation’s largest retailers, because it is experiencing system capacity problems. In part, this may be due to the shift to online shopping causing increased demand and perhaps made worse by retailers pushing discounts earlier than Black Friday in an attempt to drive more volume to ecommerce (thus “stuffing the pipe” as it were).  Regardless of cause, this is a huge problem heading into holiday season and is impacting companies like NKE, GPS, LB, M, etc. UPS refused comment on whether losses of workers due to the virus had any impact.  Regardless, the virus is having an impact as UPS is gearing up to ship vaccines as it has diverted resources to build ultra-freezer units within its network.

On the stimulus front, three was quite a bit of action during the day.  House Majority Leader Hoyer met with Senate Majority Leader McConnell to discuss stimulus for the second time this week.  A leak from that meeting said they are hoping to pass a combined stimulus and stop-gap government funding bill (to avoid a shutdown) by late next week.  In the Meantime, House Speaker Pelosi and Senate Minority Leader Schumer said that they believe the bi-partisan $908 billion bill introduced in the Senate earlier this week should be the basis for negotiations.  This comes down over a trillion dollars from their previous position, but remains over $400 billion above what McConnell wants.  However, markets may be happy that at least they are talking again.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 14,314,265 confirmed cases and 279,867 deaths.  Wednesday saw almost 204,000 new cases and over 3,000 new deaths (both record highs).  That said, the 7-day average of new cases is at 167,640 while deaths are averaging deaths rise to 1,658/day.  The national number of virus hospitalizations topped 100,000 for the first time on Wednesday.  Los Angeles Mayor (and county), the most populous county in the country issued a 3-week “stay at home” order during the day.  He urged residents to “cancel everything” in hope that after 3-weeks the lockdown can be lifted just days before Christmas.

Globally, the numbers rose to 64,985,212 confirmed cases and the confirmed deaths are now at 1,502,253 deaths. In Europe, the UK has Health Minister has said the PFE vaccine will begin distribution (actual jabs) as soon as Monday.  He also said he hopes the AZN vaccine will also be available by Christmas.  Not to be outdone, Russia has announced it will open mass vaccination centers (using their own freeze-dried vaccine) in Moscow the weekend.  Germany extended restrictions through at least January 10 as they struggle to contain the surge.  In Asia, Japan reported the biggest increase in new cases since early May.

Overnight, Asian markets were mostly green on generally very modest moves.  The exceptions were Malaysia (+1.85%) and Thailand (+1.44%).  In Europe, the opposite is true as markets are mostly red so far Thursday.  Most have moved only modestly, but there are a few showing momentum to the downside.  The FTSE (-0.04%) is flat, but the DAX (-0.42%) and CAC (-0.24%) are much more typical.  As of 7:30 am, US futures are pointing to a flat open.  The DIA is implying a loss of 0.10%, the SPY a loss of 0.04%, and the QQQ a gain of 0.20% at this point in the premarket.

The major economic news for Thursday is limited to Weekly Initial Jobless Claims (8:30 am), Nov. Services PMI (9:45 am), and Nov. ISM Non-Mfg. PMI (10 am).  Major earnings releases include CBRL, DG, DCI, GMS, KR, MIK, SIG, and TD before the open.  Then after the close, COO, MRVL, SAIC, and ULTA report.

Hope related to stimulus talks (Mr. Market loves him some government money)are fighting the virus surge. This likely means Jobless Claims will have the deciding vote in influencing the open. Either way, we remain at all-time highs, in a volatile situation, and the market is still overbought. So be careful.

Don’t predict reversals (the trend is your friend until it is broken) and don’t chase moves you missed. As always, respect support/resistance, the trend, and price action. Maintain that discipline to your trading rules. Keep booking those singles and doubles. Leave “swinging for the fence” to the amateurs. Profits pay the bills, not bragging rights.

Ed

Swing Trade Ideas for your consideration and watchlist: CGC, SNAP, BA, NIO, UBER, PSX, DKNG, SPR. 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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