Markets saw a minor gap down Friday, but it was immediately followed up by a strong selloff that lasted until 1:30 pm.  However, the bears called a week at that point and the bulls put in a relief rally into the close.  On the day we still saw ugly black candles that failed the 50sma, including a Bearish Engulfing in the QQQ.  At the close, DIA was down 1.09%, SPY down 1.55%, and QQQ down 1.28%.  The VXX was flat at 24.37 and T2122 fell back to 34.91.  10-year bond yields were up slightly to 0.697% and Oil (WTI) was flat on the day at $40.98/barrel.  This culminated a 3^rd consecutive down week, in volatile trading.

On Saturday President Trump approved the ORCL / WMT and Byte Dance deal but did so while saying it includes a $5 billion fund to pay for an educational project.  Byte Dance announced they were unaware that any such fund was part of the deal.  So, that part of the announcement appears to be more gamesmanship by the President.  The deal will also still need the approval of the Chinese government.  However, Monday a Chinese state-backed media outlet called the deal “unfair but reasonable” in a possible preview of the official reaction.

To give that deal time to reach approvals, the President did extend the deadline for a ban on TikTok until next week.  However, on Sunday a Federal judge blocked the Administration ban of TikTok and WeChat altogether. (Although a long back-and-forth legal battle is expected up through the tiers of courts.)  So, momentarily it appeared that ORCL and WMT had gotten what they wanted (a toehold in the Social Media space) and they still may. However, that clarity was quickly replaced in favor of more political and legal limbo.

The big US banks are reportedly back in hot water (and reacting in pre-market). US Government files were leaked this morning showing that at least JPM and BK, had joined Germany’s Deutsche Bank and the UK’s Standard Chartered to launder $2 trillion in illicit funds over nearly 2 decades.

On the virus front, in the US, the numbers show we now have 7,004,990 confirmed cases and 204,118 deaths.  The 7-day average of new cases is rising again at 41,330 per day.  However, the average for deaths (which lags) is still trending down at 800 per day.  Meanwhile, on Friday, the CDC reversed its caving to political pressure and changed its guidance for asymptomatic individuals.  The new guidance says that anyone who is exposed to an infected person needs a be tested, regardless of whether or not they show symptoms.  Bloomberg reported that this change was planned earlier, but delayed by a long “review and approval” by Administration outside the CDC.  On Sunday we learned that 31 states have more new cases this week than last and 25 of those states have a higher test result positivity than the previous week.  The fear is that this is another example of a holiday-caused surge as too many Americans ignore guidelines or have relaxed their adherence

Globally, the numbers rose to 31,263,651 confirmed cases and 965,398 deaths.  Even with the new lock-down in the Northeast of their country, UK cases are rising.  Sunday talk was that London is the next potential “local” mini-lockdown (2 weeks) as the Mayor met with the City Council in private session Sunday while UK PM Johnson is expected to address the country again as soon as Tuesday.  In Germany, mandatory mask use has been reintroduced in areas (Munich region).  Elsewhere, the recent Australian whole state lockdown has been vindicated as restrictions are beginning to ease and the new case count has dropped by a factor of 60.

Overnight, Asian markets were back to being mixed, but the largest economies leaned positive.  China was up 1.5-2%, while Japan and South Korea were on the green side of flat.  Europe has seen a similar situation so far this morning.  However, European moves have been more modest and lean more to the red side at this point.  The FTSE and CAC are on the red side of flat while the DAX is up a third of a percent at mid-day.  As of 7:30 am, US futures are mixed with the large-caps split modestly on either side of break-even and the NASDAQ pointing toward a half percent gap higher.

The major economic news for Monday is limited to 3 Fed speakers (Chair Powell at 10 am, Brainard at noon, Williams at 2 pm).  Once again there are no major earnings reports on the day.

Coming off the first 3-week losing streak since March, markets look set to gap lower at the open Monday. However, “gap and rebound” volatility has been the norm in volatile markets recently.  So, be careful, but, as always, stick to your plans. Follow the trend, but don’t chase moves you have missed.  (There is always another trade coming soon…no need to suffer FOMO.)  Hang in there with your rules and keep locking-in profits. 

Ed

Swing Trade ideas for your Consideration and Watchlist: No trade ideas for Monday. 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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