Markets gapped up one-third to one-half of a percent Tuesday and then ground sideways to down in all 3 major indices.  This left us with black-body candles that were flat for the session.  For the day DIA led with a gain of 0.17% (another all-time high close) while the SPY (-0.09%) and QQQ (-0.27%) were on the red side of flat.  VXX gained a little over a percent to 15.92 and T2122 fell back, but remains just inside the overbought territory at 82.87.  10-year bond yields spiked again to 1.311% (the highest in nearly a year) and Oil (WTI) rose 67 cents to close at $60.143/barrel.

The brutal winter storm continues to be the big news story.  Rolling power blackouts (total blackouts in places like parts of TX) and treacherous driving conditions through the Midwest (TX to MN) are having impacts on business we well as people.  Among the industries hit are Oil and Gas Fracking, which has halted throughout the Permian Basin due to the inability to ship product.  As a result, Nat Gas prices spiked to $999/million BTU for next-day delivery in OK (versus $4.19/million last week).  While this is the worst example, other contracts sold at $700, $620, $400, and $275/million at various hubs. 

Bitcoin has set another all-time high this morning, almost touching $52,000 as major investment banks and other firms are starting to support the digital currency.  Mortgage demand also fell over 5% last week as interest rates are increasing at the fastest pace in months.  30-year fixed rate mortgages now average 2.98%, with new purchase loan applications down 6% on the week.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 28,381,220 confirmed cases and 499,991 deaths.  However, the number of new cases continues to fall quickly and is back down to the October level as the average new cases are now 82,841 new cases per day.  However, deaths remain at a stubbornly high level of 2,270 per day.  The University of Virginia has banned all in-person events after 117 new cases (including many of the UK variant) were reported on their campus yesterday.  Even assuming FDA approval, JNJ will be delivering their one-shot vaccine much slower than the government had been led to believe.  While 20-30 million doses by April had been expected, an apparent “miscommunication” now leads to an expectation that the number will be less than 10 million doses in that time.  However, President Biden promised the country would have enough vaccine by the end of July to vaccinate every American (at least those that will take one).

Globally, the numbers rose to 110,115,976 confirmed cases and the confirmed deaths are now at 2,431,617 deaths.  However, the trends are good.  The world’s average of new cases continues to fall quickly and is now down to 374,515 per day.  Mortality lags but is also falling, now down to 10,630 new deaths per day.  South Africa has received its first shipment of the JNJ vaccine and discussions are underway as to whether to restart vaccinations (which were stopped when the MRNA vaccine was found to not work for the South African variant).  And in better news, Sri Lanka has reopened their country for tourists without quarantine.  However, they want no mingling between visitors and locals (and I have no idea how that would work).

Overnight, the few Asian markets that were open were mostly red.  The dramatic outlier was Taiwan (+3.54%), mostly on the strength of TSM (+4.91%).  In Europe, markets are mixed, but mostly red so far today.  The FTSE (-0.22%), CAC (-0.03%), and DAX (-0.57%) are a typical spread with a few minor exchanges like Belgium and Portugal on the green side.  As of 7:30 am, US Futures are pointing toward a flat open.  The DIA is barely green (+0.03%), the SPY barely red (-0.02%) and the QQQ just red (-0.19%) at this hour. 

The major economic news for Wednesday includes Jan. PPI and Jan. Retail Sales (both at 8:30 am), Jan. Industrial Production (9:15 am), Dec. Business Inventories (10 am), and Release of FOMC Jan. Minutes (2 pm).  Major earnings reports on the day include ADI, ATH, CRL, COMM, ENCL, EQT, ES, GRMN, GPC, HSIC, HLT, NI, OC, SHOP, and SAH before the open.  Then after the close, ALB, ALSN, AEL, AR, AXTA, BIDU, CF, CAKE, CYH, ET, HLF, IQ, MANT, MOS, NTR, OVV, PXD, RBC, SNBR, SUN, SNPS, TROX, UFPIVMI, and WCN report.

Again, with Congress gone for the week, earnings, economic news, and the winter storm are likely to drive the discussion. The bulls are still in charge of the trend, but it is the wall of worry (about overextension) that guides them, not an all-out bull charge. Be leery of any volatile moves at this point as it may signal exhaustion.

It’s all about achieving trade goals and sticking to your discipline.  So, keep locking in your profits when you have them. Follow the trend, respect support and resistance levels, and don’t chase the moves you missed.  Just stick with your plans, maintain discipline and work your process. Focus on getting rich slowly and not trying to hit the lottery.

Ed

Swing Trade Ideas for your consideration and watchlist: TRV, BA, SBUX, PENN, CCL, X, GOGO, CBAT, IPHI. 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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