Markets gapped down slightly Friday, but after bobbing around for an hour the bulls rallied the entire rest of the day. This gave us “Morning Star Like” candle signals in all 3 of the major indices. On the day SPY was up 1.62%, DIA was up 1.34%, and QQQ was up 2.32%. However, none of the three have broken their downtrend as we saw a fourth straight week of lower closes in the SPY and DIA. The VXX fell 2.48% to 25.54 and T2122 rose to 18.84, but remains just inside the oversold territory. 10-year bond yields fell slightly to 0.656% and Oil (WTI) fell back to $40.04/barrel.
Sunday Speaker of the House Pelosi said she is making another offer to Treasury Sec. Mnuchin in their negotiations while House Democrats move ahead with plans for a new $2.4 Trillion stimulus bill. She told reporters that the new offer will be revealed shortly and that there is still a chance for a deal. However, this seems like quite a mountain to climb with the Senate and White House focused on confirming ACB to the Supreme court and both parties heavily into campaign mode (doing their best to appease the extremes of their 2 bases).
In the ongoing TikTok saga, a Federal Judge blocked President Trump’s ban on TikTok and WeChat as unconstitutional Sunday evening. However, the judge did not block a broader set of restriction set to go into place November 12 that might effectively make TikTok unusable in the US anyway. Beyond the legal finding, the two sides to the deal (ORCL – WMT) and Byte Dance continue to argue over the terms of the deal, including ORCL claiming Byte Dance will retain no ownership of the new company, while all along it has been reported Byte Dance would retain 80% ownership.
On the virus front, in the US, the numbers show we now have 7,321,465 confirmed cases and 209,454 deaths. As usual, the weekend new case counts were down after seeing 55,000 on Friday. The 7-day average daily new case count is now at 41,461. Deaths came back atypically low at 276 while the 7-day average number is now 759. All this comes as FL Gov. Desantis did his Florida Man impression by completely opening the state and dropping restrictions.
Globally, the numbers rose to 33,342,965 confirmed cases and the confirmed deaths passed a grim milestone, now at 1,002,985 deaths. In the UK, one of the government science advisors has told the press he supports a repeated “mini-lockdown” (14-day) approach as a way to reduce case growth as the UK saw a 60% increase in cases in the last week. In France, intensive care admissions have more than tripled in the Southern region of the country. Down under in Australia, an inquiry has found that a “quarantine hotel” failed to do the isolation demanded in May (visitors, including sex workers, having been allowed into the hostel), which led to over 18,000 infections and over 750 deaths in the state of Victoria.
Overnight, Asian markets were mixed, but leaned to the green side. Japan (+1.32%), South Korea (+1.29%), and Taiwan (+1.88%) paced the gainers. China, Indonesia, and Australia led the losers. However, in Europe stocks are strongly in the green across the board so far today. The DAX is up 2.61%, CAC up 1.94%, and FTSE up 1.32%. At 7:30am, US futures are also pointing to a gap higher at the open. The QQQ is pointing to a 1.70% gap up, and both large cap indices are implying a 1.31% gap up as markets look to rebound after four straight down weeks and Quarter-end coming in a few days.
The only economic news of note for Monday is a Fed speaker (Mester at 2 pm). The only major earnings reports on the day are THO before the open and UNFI after the close.
The bulls are looking to rally at the open. This could be a response to the oversold conditions after 4 down weeks. Or it might be an attempt at quarter-end window-dressing. In either case, be wary of chasing gaps against the trend. All we can do is either sit on the sidelines or be very careful and quick in this market. If you do trade, stick to your rules, follow the trend, and don’t chase moves you have missed. Keep locking-in profits, because it’s the singles and doubles that add up to championships, not the occasional home runs.
Swing Trade Ideas for your Consideration and Watchlist: SRNE, PINS, FSLY, GAME. 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.
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🎯 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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