March started off with a bang as markets gapped up about 1.35% and the bulls kept the rally going (slowly) the rest of the day.  This left us with a Bull Kicker type candle in the QQQ, and strong bullish candles in the SPY and DIA (although the DIA did leave an awful lot of upper wick).  On the day, DIA gained 1.98%, SPY gained 2.42%, and QQQ gained 3.01%.  All in all, this was the best day for the S&P since last June.  The VXX fell almost 7.5% to 14.84 and T2122 jumped from oversold all the way into the lower edge of the overbought territory at 82.42.  10-year bond yields rose again to 1.426% and Oil (WTI) fell half a percent to $60.32/barrel.

In US business news, despite still demanding more government bailout money to avoid laying off thousands of employees, UAL disclosed that it is buying 25 new BA 737 Max planes and has accelerated the purchase cycle on an existing order for 45 of those same model plane (40 of which are now to be delivered in 2022).  This comes as UAL says it now expects a rebound in air travel.  BA stock popped almost 6% on the day on this news. In other stories, the head of NKE North America resigned after it was disclosed that her son runs a sneaker resale business and uses a credit card in her name to buy shoes for that business.  In Texas, Reuters reports that the state’s energy companies have skipped almost $2.5 billion in payments for power and services over the last 2 weeks according to the state ERCOT grid operator.  ERCOT did not name the specific companies and amounts yet, but threatens to do so if the bills are not paid soon.  However, the largest electricity provider in the state (Brazos Elec. Power Cooperative) filed for bankruptcy Monday.

In global business news, a severe drought in Taiwan (most of the country’s reservoirs are down to 20% capacity) is threatening to make the global chips shortage worse.  The country has asked major chipmakers TSM and UMC to cut water usage to 10%.   So far, they are avoiding reducing output by buying and trucking in fresh water for their fabs (factories).  This story was reemphasized when NIO (Chinese TSLA rival) reported that the global chip shortage will cause a cut in their production capacity by as much as 25% in Q2.  It did this while reporting a loss for the most recent quarter.

Related to the virus, 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 29,314,254 confirmed cases and deaths have now passed half a million at 527,226 deaths.  The number of new cases fell slightly again overnight to an average of 68,664 new cases per day.  Deaths, which have always lagged, were flat at 1,996 per day.  

Globally, the numbers rose to 115,076,964 confirmed cases and the confirmed deaths are now at 2,552,234 deaths.  The trends have been good, but we saw a significant uptick today.  The world’s average new cases has up-ticked again to 387,769 per day.  Mortality also ticked up, now at 9,041 new deaths per day.  In the UK, the latest data shows that even a single vaccination of a 2-dose regimen cuts the risk of hospitalization by 80% in people over 80 years old at least after 3-4 weeks of time for the vaccine to work.  The study was only of PFE-BTNX and AZN vaccines.  People aged 70-80 got only 61% protection from the PFE vaccine and 73% from the AZN.  In Asia, China has now said more that 500 million of their population will have been vaccinated by the end of June.

Overnight, the few Asian markets were mixed again.  Shanghai (-1.21%), Hong Kong (-1.21%), and Japan (-0.86%) paced the losses.  Meanwhile, South Korea (+1.03%) and India (+1.07%) paced the gains.  In Europe, markets are mostly green so far today.  The FTSE (+0.70%), CAC (+0.62%), and DAX (+0.54%) are typical of the continent with the odd outlier such as Athens (+1.37%) or Belgium (-0.14%).  As of 7:30 am, US Futures are flat after an overnight rollercoaster ride.  The DIA is implying a -0.05% open, the SPY implying a -0.13% open, and the QQQ implying a -0.20% open.

The only economic news for Tuesday is two Fed speakers (Brainard at 1 pm and Daly at 2 pm).  Major earnings reports on the day include ANF, AER, AZO, IGT, KSS, KTB, SER, and TGT before the open.  Then after the close, BGS, DAR, GO, HPE, JWN, ROST, and URBN report.

With no major economic news scheduled and the Senate yet to take up debate on the stimulus bill, it may be inflation and downside protection that drives markets this morning. All eyes will be on the bond market that has pulled back from last week’s highs but is surely trending in the direction of inflation. That said, Monday was a strong day and the bulls liked having the chance to run after a week or slow retreat. We’re close enough to the all-time highs that they can taste it. Be cautious and know the timeframe you are trading. Are you focusing on Monday’s rally, the 2-week pullback, or the post-election rally?

Forget about predicting reversals or breakouts. Just book your trade goals when you can and stick with your discipline.  Follow the trend, respect support and resistance, and don’t chase those moves that you miss.  Another trade will come along any minute. So, achieve your ambitions in the long-run by taking short-term trade goals off the board as they are met, over and over again.

Ed

Swing Trade Ideas for your consideration and watchlist: PINS, PENN, INTC, GE, MARA. 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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