Stuck Between Support and Resistance

On Thursday, August Retail Sales came in much, much hotter than expected (+0.7% vs. -0.8% expected) and Jobless Claims came in slightly higher than expected (332k vs 330k) in the first week since extended unemployment expired.  As a result, large caps opened flat while the QQQ gapped down about three-tenths of a percent.  At that point, all 3 sold off for half an hour before starting a slow rally that lasted into the last hour.  However, they then backed off the highs a bit.  This left us with indecisive Doji or Spinning Top candles in all 3 major indices that continue to have trouble breaking through the T-line resistance.  On the day, SPY lost 0.17%, DIA lost 0.18%, and QQQ gained 0.07%.  The VXX rose slightly to 25.15 and T2122 remains in the mid-range at 48.07.  10-year bond yields rose to 1.338% and Oil (WTI) was flat at $72.60 despite a spike in the Dollar (up three-tenths of a percent against other major currencies).

Overnight, Asian markets were mixed but leaned to the green side.  New Zealand (+1.18%) and Hong Kong (+1.03%) were the standout movers to the upside and Australia (-0.76%) was by far the biggest loser on the day.  In Europe, markets are mixed, but mostly lower on modest moves at mid-day.  The FTSE (-0.12%), DAX (-0.26%), and CAC (-0.17%) are typical for the continent in early afternoon trade.  As of 7:30 am, US Futures are pointing toward a modestly lower open.  The DIA is implying a -0.18% open, the SPY implying a -0.25% open, and the QQQ implying a -0.28% open at this hour.  The Dollar is also down a bit with 10-year bond yields up to 1.343% and Oil down half of a percent in early trading. 

The only major economic news scheduled for release on Friday is Michigan Consumer Sentiment at 10 am.  There are no major earnings scheduled for the day.

This afternoon, the FDA Vaccine Advisory panel is meeting to debate and vote on whether to recommend PFE and MRNA booster shots for the general public.  There seems to be a debate amongst the panel on whether there is enough scientific evidence that the booster provides enough additional protection to outweigh the use of all production capacity and vaccine doses for initial vaccinations.  Of course, this has to be weighed against the hesitancy and lack of compliance among the remaining unvaccinated.  Either way, the panel votes, PFE and MRNA (and later JNJ) are all likely to be unaffected.  Their vaccine capacity will be used somewhere at roughly the same profit margin. However, future case surge numbers and economic impacts may be influenced by the decision  

Markets have seemed to consolidate this week, even with intraday volatility with the major indices stuck between resistance overhead and support below. However, the short-term bearish trend remains in place. It appears the fear of reduced economic growth (nationally and globally) remains the dominant driver in the market at the moment. This is interesting since BAC reports that money is piling into stocks at the fastest pace in over a year. BAC said that over $62 billion came out of money-market funds in the first 3 days of this week, with $51 billion of that going into stocks and most of the remainder going into bonds. With all this said, all eyes are looking ahead to the Fed meeting next week for the next clue. So, be careful making bets today.

Remember this is Friday. So, prepare yourself for the weekend news cycle and the likelihood of doldrums heading into the Fed meeting next week. Keep in mind that you don't have to trade every day. And when you do trade, the Trend is your friend. Manage your existing trades before you chase any new ones. Focus on the process and on managing the things you can control. Don't worry about the things you can't control. Discipline and good trading rules are what separates trading success from failure over the long run. Above all, consistently take profits when you have them. A good trader refuses to let greed turn their winners into losers.

Ed

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