Markets were generally listless on Friday as many traders had apparently already left for the long weekend. The major indices opened flat and that’s largely how they stayed all day.  The only real take-away from the daily chart is that resistance held again.  At the close, the SPY was up 0.19%, the DIA down 0.06%, and the QQQ up 0.35%.  VXX was down slightly to 34.35 and the T2122 4-week High-Low Ratio climbed further into overbought territory at 90.98.  The 10-year bond yield fell slightly to 0.657% and Oil (WTI) fell slightly to $33.25/barrel.

As had been predicted, HTZ filed for bankruptcy over the weekend.  The White House also threatened US sanctions on China and revocation of Hong Kong’s special trade status with the US.  This was in reply to a new Chinese security law which impacts Hong Kong.  China responded with a statement this means we are entering a new cold war.  The latest development has both sides now blocking flights from the air carriers of the other country, including DAL and UAL.

On the Virus front, the global headline numbers are 5,611,540 confirmed cases and 348,328 deaths.  Brazil has become the new epicenter of the pandemic with a runaway infection rate and now has the second most number of cases to the US.  As a result, over the weekend the US had to impose travel restrictions on people who are from or who have visited Brazil.  Elsewhere, an ex-officio member of the ECB said they are likely to add more stimulus on top of the recently announced $817 billion plan.  (The next ECB meeting is on June 4.)  In Germany, Lufthansa received a $10 billion bailout from the government, which also gives the German government a 20% stake in the airline.  Finally, the UK also began easing Monday.

In the US, we have 1,706,226 confirmed cases and 99,805 deaths.  All 50 states have reopened at least partially now.  On Sunday, data showed that for average daily new case counts, 19 of the states have rising rates, 23 states are holding relatively steady, and 8 states have rates trending downward. Meanwhile, Boston Fed Pres. Rosengren announced the Fed will begin its lending program to mid-sized companies over the next 2 weeks.  This is similar to the PPP loan/grant program, but focused on larger companies (15,000 employees or less).   This came as a White House Economic Advisor told reporters the US Unemployment rate may still be over 10% in November.

Overnight, Asian markets were strongly green as vaccine hopes overrode fear from China/US tensions.  Europe is also green for the most part, but not quite as strongly so far today.  As of 7:30 am, US futures are also pointing to a 1.5%-2% gap higher at the open.

Major economic news on Tuesday is limited to conf. Board Consumer Confidence and April New Home Sales (both at 10 am).  Major earnings reports are also light with AZO, BNS, BAH, and ESLT reporting before the open.  KEYS and VSAT report after the close.

Everybody feels good after a long weekend and that rings true for the markets as well. With hope for a vaccine and seeing crowds shopping and partying again all weekend, Tuesday is looking like a bullish start to the week. However, the “gap and chop” has been real for months. There is also no evidence for any of the vaccines (just hope that we may see some evidence in several months). And while America revels in its freedom, it does so despite the best advice of experts (not because of it).  So, the only guarantees are uncertainty and volatility.  Watch the short-term chart and don’t hesitate to lock in profits.  Above all, don’t chase or predict, and remain cautious about longer-term swing trades.

Ed

Trade ideas for your watchlist and consideration: INSG, TWLO, ETSY, RRC, AR, TFX, EBAY, BCRX, GRUB, ILMN, DXCM, KMX, CSX. Trade smart, take profits along the way and trade your plan. Also, don’t forget to check for upcoming earnings. Finally, remember that the stocks/etfs 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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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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