Markets essentially opened flat Wednesday and then sold off until 2 pm, possibly on discouraging news on the stimulus front.  From that point, all 3 major indices ground sideways the rest of the day.  This left large black candles that created a Bearish Engulfing signal in the SPY and a Dark Cloud Cover in the DIA.  On the day, the SPY fell 0.92%, the DIA fell 0.46%, and the QQQ fell 2.26%.  The VXX rose 3.68% to 17.20 and T2122 fell 5% but remains in overbought territory at 89.50.  10-year bond yields rose strongly again to 0.939% and Oil (WTI) was flat at $45.62/barrel.

As mentioned, Wednesday saw more bad news related to stimulus, as the major players found another reason to stall the deal.  This comes even though both sides agree on the top line numbers and most of the provisions.  Rather than continue to work on wording around the bipartisan proposal (the basis of the last couple of weeks), Senate Majority Leader McConnell criticized House Speaker Pelosi for not embracing the new Administration offer.  At the same time, Pelosi and Senate Minority Leader Schumer criticized the 11th-hour proposal from Treasury Sec. Mnuchin (who had been absent since before the election) and said negotiations should continue based on the bipartisan proposal.  So, as always, the important thing in Washington is who gets the credit, who loses face, and who can be blamed in the next election much more than it is about the need or available resources

In other federal news, the House has approved a 1-week stop-gap spending bill to avoid a government shutdown.  The extra week is intended to give more time to reach a longer-term spending agreement and the stimulus deal.  The idea is that a desire to leave for the holidays and a government shutdown right before Christmas will be enough pressure on lawmakers to get a deal done.  And finally, the Federal Government and dozens of State Attorneys General sued FB for anticompetitive behavior.  The suit seeks to force FB to divest Instagram and WhatsApp.

Related to the virus itself, US infections continue to rage in the US.  The totals have risen to 15,882,734 confirmed cases and 296,745 deaths.  Wednesday saw another day of 226,762 new cases and another grim record of 3,260 new deaths (about one-third of world totals and we have only about 4% of the population).  This brings the 7-day average of new cases is at 213,361 while average deaths rose to 2,400/day.  The White House Task Force leader Dr. Birx told CNBC overnight that people need to adjust their expectations and that vaccines will not significantly reduce either hospitalizations or deaths until at least late spring.  Until then, only behavior changes can reduce those two numbers.  This came as Dr. Fauci (NIH) again pleaded for the public to avoid gatherings with people outside their immediate family this holiday season.

Globally, the numbers rose to 69,369,386 confirmed cases and the confirmed deaths are now at 1,578,356 deaths.  As a reference, the world is averaging about 625,000 new cases and almost 11,000 new deaths per day.  In potentially concerning news, 2 UK Health Workers have suffered severer allergic reactions after their vaccination jab.  This has caused an immediate change in recommendations for who should and who should not be vaccinated.  For the market, the main gist is that this may cause even more public concern and resistance to vaccination, therefore prolonging the period it will take to reach herd immunity.   Beyond that, hospital beds are in short supply all around the world.  For example, South Korea has begun using cots in shipping containers to supplement its shortage as they are now down to 3% of bed capacity still available for new patients.

Overnight, Asian markets were mixed but leaned to the downside.  Taiwan (-0.98%) saw the worst action, but there was little green elsewhere in the region.  Malaysia (+0.48%) was the best bull outlier example with most Asian exchanges moderately red.  In Europe, markets are also mixed but leaning more heavily to the green side.  The 3 major bourses are typical with the FTSE up 0.78%, the DAX flat at +0.09%, and the CAC up 0.38%.  As of 7:30 am, US futures are pointing to a flat and mixed open.  The SPY is implying -0.01%, the DIA implying -0.13%, and the QQQ a slight drop at -0.33% at this point in the premarket.

The virus, vaccine hope (the PFE-BTNX approval decision is expected any day), and fear over more stimulus delays are fighting for the emotions of the market.  There was also another Brexit Trade Deal failure overnight with the year-end deadline fast approaching. Sitting near the all-time highs and having shown some semblance of resistance here, it feels like the market wants to be bullish, but is scared and waiting for another reason to make the next move.  So, be careful and remember the market is overbought.

Respect support and resistance, the trend, and price action. Stay true to your trading rules and trust your process. Keep booking those singles and doubles. It’s the profits you take that pay the bills, not bragging rights. So, leave “picking the very top” to the traders more interested in stroking their ego than making money.

Ed

Swing Trade Ideas for your consideration and watchlist: OMI, F, CAT, ZM, NVDA, SLM, EVRI. 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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