Markets opened flat and ground sideways until noon.  However, FB and AAPL led markets higher as the bulls stepped in again to put together a rally all afternoon.  On the day, QQQ was up 1.32% (another all-time high close), SPY up 0.67%, and DIA up 0.70%.  VXX fell again as there was no fear to be seen in markets, closing at 26.74 and T2122 fell back to 87.72, which is still in overbought territory.  10-year bond yields fell to 0.538% and Oil (WTI) was off slightly to $41.98/barrel.  Gold once again closed at an all-time high of $2,074.80/oz.

President Trump has imposed a 10% tariff on aluminum imports from Canada again (a year after they were dropped and one month after the USMCA pact went into effect).  Canada responded by threatening retaliatory tariffs on US goods according to Reuters.  To go along with his theme of nationalism and “protecting us from foreigners,” the President also banned US firms from doing business with the Chinese companies behind the TikTok and WeChat apps.  Byte Dance (owner of TikTok) has threatened legal action over the ban and had already been in talks to sell to MSFT for over a week.  There was no mention of what made this ban urgent now, when less than a week ago the President said if TikTok was sold to MSFT by Sept. 15 it could avoid the ban.

The other economic news out of Washington was the stimulus deal.  Both Republican and Democrat negotiators claimed more progress was made in talks, but that the sides remain far apart.  President Trump sought to pressure the negotiations by again making the threat to take Executive Orders to do the portions he likes.  (This renewed threat may have led to or helped the afternoon rally. I’m just not sure of the timing on his comments vs. the rally.)  It remains unclear exactly what measures he has the legal right to do.  However, he’s shown a tendency in the past to issue orders and make opponents challenge them in court where legal procedures can be used to render challenges irrelevant due to timing. Among the possibilities are a so-called Payroll Tax Holiday (although it is unclear if this would only be a postponement since he cannot rewrite the tax code by fiat). The other thing mentioned is an extension of the moratorium on evictions.

In the Real Estate Sector, mortgage rates fell again to another record low, the eighth record low this year. Oddly, at the same time a survey by the National Assn. of Homebuilders found that housing is still less affordable than it has been for over 18 months. (That claim is based on the percent of homes sold to people who qualify for loans who have an income at or below the US median.  In other words, tighter lending standards mean fewer “average Americans” qualify to buy a home.)  In a related story, CNBC also reported that 32% of Americans had missed mortgage payments as of July 31.

On the virus front, in the US, we went over 5 million cases as the numbers show we now have 5,032,805 confirmed cases and 162,812 deaths.  On the day, we saw over 58,600 new cases and over 1,200 deaths (still above the 7-day average).  TX saw its positive test rate climb to a tad more than 17% Thursday, just shy of the mid-July peak. Several other states instituted new or extended their mask mandates.

Globally, the number of cases has reached 19,293,179 confirmed cases and 718,326 deaths.  In Asia, India reported a record number of new cases as the (15% more than its previous high).  In Europe, for the second day in a row, Germany saw the largest number of new cases since early May.  Spain and France have also reached their highest 7-day average of new cases since April.

Overnight, Asian markets were in the red across the board, with the lone exception of South Korea which managed a gain of 0.39%.  The key driver was the trade war news as the US took the actions described above.  However, in Europe markets are more mixed and very near flat across the board.  The FTSE is “up” 0.02%, the DAX up 0.23%, and the CAC down 0.26%. In the US, at 7:30 am futures are flat, all 3 major indices are pointing to a down open as the futures sit at -0.38% in all 3 major indices.

The major economic news for Friday is limited to July Avg. Hourly Earnings, July Nonfarm Payrolls, and July Unemployment Rate (all at 8:30 am).  However, obviously July Non-farm Payrolls is a big one and is under close scrutiny by markets. Major earnings include DISH, IEP, MGA, UFS, and VTR all before the open.  There are no major earnings after the close.

Markets remain unrelentingly bullish and have made quite a nice run this week.  However, by most counts, markets are again extended.  Still, this most recent surge has come in a more orderly action (fewer huge gaps and whipsaw candles).  And that sort of price action tends to allow moves to last longer.  So, don’t fight the trend, but remain aware that another pause or swing to the downside may come soon.   

Stick to those trading rules and execute with discipline.  Follow the trend, don’t predict reversals or chase missed-moves, and don’t be greedy.  Take profits along the way.  Remember, a trader’s job is to consistently achieve goals and build their account.  Also bear in mind this is Friday…so lock in some profits ahead of the weekend news cycles.

Ed

The Daily Swing Trade Ideas for today: PM, PENN, AES, ABT, KO, FAST, NKE, MCD. 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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