Markets gapped down again Wednesday, and sold off the first hour.  However, as soon as Fed Chair Powell began to speak, the bulls stepped on the gas and rallied the rest of the day.  This left us with strong bullish candles and the DIA even closed at another new all-time high.  On the day, SPY gained 1.10%, DIA gained 1.31%, and QQQ lagged, but still gained 0.82%.  The VXX fell 4% to 14.48 and T2122 jumped back into the overbought territory at 92.76.  10-year bond yield rose again to 1.383% and Oil (WTI) gained half a percent to $63.56/barrel.

Interestingly, Fed Chair Powell said that prices may rise in the coming months, but that does not mean inflation has come back.  I’m not sure how that math works, especially in a time of Fed easy money policy.  Still, markets took it as a sign of the Fed saying they were going to keep their foot on the gas regardless of inflation.  In other Fed news, they reported a systems outage for four hours Wednesday.  This means that millions of interbank transfers, payroll transactions, and even tax refunds could not be processed during that time.  They reported this as a “operational error” and services were mostly restored by day end.  However, the outage does raise questions about the robustness of American financial infrastructure.

VZ was the high bidder in Wednesday’s FCC’s 5G spectrum auction. The spent over $45 billion to secure over 3,500 licenses for the prime “mid-band” frequencies.  T was the second highest bidder, spending over $23 billion to get 1,600 licenses.  No other carrier purchased even 20% of what T bought and T bought less than half what VZ bought. This means VZ will be able to build out the largest 5G network in the country, by far.

Related to the virus and stimulus, US infections are starting to plateau at a level above the fall level after a month and a half of steep and steady decline in new cases. The totals have risen to 28,974,623 confirmed cases and deaths have now passed half a million at 518,363 deaths.  As mentioned, the number of new cases is starting to level-out and uptick at an average of 70,678 new cases per day.  Oddly, deaths, which have always lagged, seem to be preceding this plateau and rose back up to 2,131 per day.  In more good news, NVAX said they expect to apply for FDA approval of their vaccine in Q2.  As expected, House Speaker Pelosi has scheduled the vote to pass the $1.9 trillion relief bill in the House on Friday.  The Senate will then consider the bill.  One key issue that remains is that it will be the Senate Parliamentarian (a little know post) who decides if the $15/hr. minimum wage can be included in the bill.  Democrats have told reporters privately that they hope the Parliamentarian strips that provision from the bill, because they doubt it will pass the Senate with than provision attached.

Globally, the numbers rose to 113,191,956 confirmed cases and the confirmed deaths are now at 2,510,807 deaths.  The trends have been good, but we saw a significant uptick today.  The world’s average of new cases has up-ticked slightly to 376,133 per day.  Mortality also ticked up, now at 9,442 new deaths per day. PFE/BNTX and MRNA have both begun testing booster vaccines to fight the new UK and South African variants specifically.  This would require a 3^rd shot, but would extend protection, once the booster shot is proven in tests.  In Europe, several of the smaller countries (like Austria) are now calling on the EU to create travel passports for those who have been vaccinated.  Meanwhile Germany warned of a third wave if Europe does not reopen cautiously and France imposed a lockdown on another city (Dunkirk) due to outbreak.

Overnight, the few Asian markets were mostly in the green, with the lone exceptions of Shenzhen.  South Korea (+3.50%), Japan (+1.67%), and Taiwan (+1.48%) led the way higher.  In Europe, a similar story is taking shape today.  Only the DAX (-0.17%) and Switzerland (-0.20%) are down, while the rest of the continent is at least above break-even.  The FTSE (+0.40%) leads the way with the CAC (+0.12%) being more typical at this point of the day.  As of 7:30 am, US Futures are mixed with the large-cap straddling the flat line and the QQQ pointing to a -0.76% open.

Major economic news for Thursday includes Jan. Durable Goods Orders, Q4 GDP, and Weekly Initial Jobless Claims (all at 8:30 am), Jan. Pending Home Sales (10 am), and a number of Fed speakers (Bostic at 8:30 am, Quarles at 11:10 am, Bostic again at noon, and Williams at 3 pm).  Major earnings reports on the day include AES, AEP, AMT, BUD, BBY, CWH, CM, CNP, CLF, DPZ, DCI, EME, FCN, GIL, GTN, HSC, SJM, KDP, MLCO, NTES, NLSN, NOMD, PCG, PLTK, PWR, REZI, SAFM, SRCL, TD, TFX, VIPS, and W all before the open.  Then after the close, ACHC, ADT, ABNB, ADSK, CZR, CVNA, FIX, CWK, DELL, DASH, EIX, ENDP, ERIE, FTCH, FND, HPQ, IHRT, LHCG, MTZ, MNST, QRTEA, REGI, RKT, CRM, SFM, TA, UHS, VALE, VMW, WDAY, and INT report.

Jobless Claims, the update on Q4 GDP, and earnings reports are likely to drive markets this morning. Markets were giddy Wednesday after Fed Chair Powell basically said “whatever it takes to get it done” to pump up the economy. However, regardless of Fed speak, rissing bond rates point to inflation and Mr. Market knows how the Fed reacts to inflation. So fear exists as well.

The downtrend is broken in the large-caps, but that question is still debatable in the QQQ as high-tech has lagged. Just follow the trend, respect support and resistance, and don’t chase those moves that you miss.  Another trade will come along any minute. Remember, trading is a marathon, not a sprint.  Achieve your ambitions in the long-run by hitting short-term goals over and over again. Forget about predicting reversals or breakouts. Book your trade goals when you can and stick with your discipline. 

Ed

Swing Trade Ideas for your consideration and watchlist: FDX, XRT, ABBV, HON, LYFT, MU, F, TLRY. You can find Rick’s review of tickers on his YouTube Channel here. 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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