Year-End Trade Settlement Behind Us

Markets gapped higher about half a percent again Tuesday.  However, after the gap, the rest of the day saw a roller coaster selloff.  This caused large black Bearish Engulfing candles in the large-cap indices and a Black Spinning-Top type candle in the QQQ.  However, it is worth noting the QQQ also closed at yet another all-time high.  Part of the reason behind the post-gap selloff might be that Tuesday was the last day to sell (or buy) and have the trade settled before year-end.  On the day QQQ led at almost flat +0.09%, while the SPY (-0.19%) and DIA (-0.18%) were down slightly on the day.  The VXX rose over 3.6% to 17.43 and T2122 fell to the low side of the midrange at 45.35.  10-year bond yields rose to 0.938% and Oil (WTI) also gained a percent plus to $48.23/barrel.

During the day, Senate Democrats moved for unanimous consent to the increase in direct payments to Americans to $2,000.  However, that was showdown by Senate Majority Leader McConnell.  The “consensus view” is that McConnell will block all attempts for a Senate vote on the direct payments until after the GA Senate runoff elections end next week.  So, the only vote expected in the Senate this week will be a vote on overriding the President’s veto of the $740 billion Defense Spending bill.

Related to the virus itself, US infections continue the winter surge.  The totals have risen to 19,977,704 confirmed cases and 346,579 deaths. The expected post-holiday surge is still a couple of weeks away.  However, the 7-day daily average remains high at 184,221 new cases and the average number of deaths was raised by a record number of new deaths that brought the average to 2,250 deaths per day.  Overnight, a LA Congressman-elect died of Covid. In CA, Governor Newsome extended the stay-at-home order for two regions of the state Tuesday and the new order will stay in place until those regions' "available ICU bed capacity" rises to at least 15%.  Elsewhere, CO has genetically verified the first case of the new strain of the virus (first seen in the UK) that appears much more contagious, but also has no worse a rate of hospitalizations and is no more deadly than the original strain.  The more concerning point was that the case was found in a man who had no history of travel.  This implies the case was locally transmitted.

Globally, the numbers rose to 82,446,401 confirmed cases and the confirmed deaths are now at 1,799,505 deaths.  As a reference, the world is averaging about 563,575 new cases and 10,321 new deaths per day.  In the UK, they approved the Oxford-AZN vaccine today.  The AZN vaccine is less effective (70%), but also requires much less stringent storage temperatures.  In Asia, countries continue to retighten their borders due to the new strain of virus.  Taiwan and Hong Kong joined the list of countries prohibiting or tightening requirements for International travelers entering the country.  In China, the state-owned pharma company Sinopharm announced data showing their own vaccine is 79.34% effective based on two doses.

Overnight, Asian markets were mixed yet again, but this time leaned to the green side. Hong Kong (+2.18%), South Korea (+1.88%), and Taiwan (+1.49%) led the gainers.  The losses came from smaller exchanges like Indonesia (-0.95%), Thailand (-0.86%), and the larger Japan (-0.45%).  There is a similar story in Europe so far today, but on much more moderate moves.  Among the big 3 bourses, the FTSE (-0.06%) and CAC (-0.02%) are on the red side of flat, while the DAX (+0.08%) is just on the green side of flat.  As of 7:30 am, US futures are pointing to a positive open.  The DIA is implying a gain of +0.29%, the SPY implying a gain of +0.34%, and the QQQ implying a gain of +0.33%.

The major economic news for Wednesday is limited to Nov. Trade Balance and Nov. Retail Inventories (both at 8:30 am), Dec. Chicago PMI (9:45 am), Nov. Pending Home Sales (10 am), and Crude Oil Inventories (10:30 am).  There are no major earnings reports on the day.

With the last day to sell (and get the sale settled before year-end) behind us, the Bulls should have a tailwind today. However, with no earnings and no major recent economic news catalyst, it may not be a strong wind. Also, keep in mind that volume is expected to remain on the light side. 

Focus on working your process and keep your eye on the chart. Lock in those base hit profits and maintain your discipline.  Follow the trend, respect support and resistance, and don’t chase the moves you have missed.  Remember that trading is a marathon, not a sprint.  So, don’t try to get rich quick.  Do it in the long-run by hitting goals over and over again.


Swing Trade Ideas for your consideration and watchlist: MKC, HWM, NIO, RIOT. 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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