Picks of the Day December 6, 2017

Can Santa Save December?!

Wall Street took one step backwards on Tuesday, while the rebound in tech stocks fizzled, the enthusiasm from tax reform tapering. The price of copper fell to its lowest level in 2 months. Usually, the day after a reversal – like Monday’s – we’ll see anywhere from two to 7 days of fitful trading.

The S&P 500 recorded its 3rd straight day of losses, a negative streak not seen since August, which cut the index’s gains year-to-date to 17%. All of the 3 large indexes traded sharply lower towards the end of trading yesterday. One can understand investors. They don’t want to see their gains slip away moments before the year comes to a close. The possibility of closing up shop and here and there buying up a few stocks that have been beaten down certainly seems enticing.

The yield curve of U.S. T-bonds has flattened, the differential between the yields of 5 and 30 year bonds reaching their lowest level in a decade. A flat yield curve on many occasions signals concerns about the economy. A fall in the price of copper, which serves as an indicator of global demand, is another source of concern.

Daily Summary: The Dow Jones fell 0.45%, the S&P 500 shedding 0.37%. The NASDAQ slipped 0.19%.

The tech sector (XLK), which has lost momentum over the last few trading days, rose 0.2% yesterday, making it the only large sector ending in the green. The sector, though, still ended substantially beneath its intraday high.

Investors of late have preferred to sell tech stocks and shift their moneys to bank, communication and transportation stocks. This rotation is aimed at gleaning the benefits of the passage of tax reform, which will slash corporate taxes.

The U.S. House of Representatives voted on Monday to convene in a joint committee with the U.S. Senate in regards to tax reform, which brings Congress one step closer to stamping out and signing their new tax bill.

About 6.9 billion shares changed hands yesterday, slightly above the 6.7 billion average over the last 20 trading days.

Wednesday: The open gap on Tuesday didn’t last long, immediately followed up by selling pressure. The intraday turn for the worse strengthens the feeling about the high we saw Monday on the S&P 500, a high likely to represent the yearly one as well. In my estimate, investors are more vulnerable, more concerned now about what they’re likely to lose, buying pressure posing little sway for them. It seems that investors don’t want to put large sums of money to work at the present moment.

It’s important to remember that seasonally, December is a good period for the stock market. A “Santa Claus Rally,” is a traditional stock market rally in the last 5 days of the outgoing calendar year and the first 2 days of the new trading year. December is usually positive for the stock market, and historically has never been the worst trading month of the year. The seasonality, historically, has certainly been a tailwind.

In summary, the negative gales are likely to die down later in the month. The question is, “Are we going to see a stock buying spree right before Santa’s sled comes to town?”

IndexLastDaily change
DJX24,181(0.45%)Down
SPX2,630(0.37%)Down
Nasdaq6,762(0.19%)Down

Wednesday’s Hot Stocks: RH, AVAV, PLAY, AEO, HRB

IPOs: None

Have a great trading day!

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Monday10:00Factory Orders-0.4 %Medium
Tuesday9:45PMI Services Index54.7Medium
Tuesday10:00ISM Non-Mfg Index59.0Medium
Wednesday8:15ADP Employment Report192,000 Medium
Wednesday8:30Productivity and Costs3.0%Medium
Wednesday10:30Oil InventoriesLow
Thursday8:30Jobless Claims240 KMedium
Thursday8:30William Dudley Speaks Medium
Friday8:30Nonfarm Payrolls185,000High
Friday8:30Unemployment Rate4.1 %High
Friday8:30Average Hourly Earnings – M/M change0.3 %High

 

Earning Calendar

 

SymbolCompanyAM/PMDay
HDSHD Supply Holdings, Inc.AMTuesday
TOLToll Brothers, Inc.AMTuesday
VEEVVeeva Systems Inc.PMTuesday
RHRHPMTuesday
PLAYDave & Buster’s Entertainment, Inc.PMTuesday
AEOAmerican Eagle Outfitters, Inc.AMWednesday
HRBH&R Block, Inc.AMWednesday
AVGOBroadcom LimitedPMWednesday
LULULululemon Athletica Inc.PMWednesday
VRNTVerint Systems Inc.PMWednesday
CIENCiena CorporationAMThursday
MTNVail Resorts, Inc.AMThursday
DGDollar General CorporationAMThursday
UNFIUnited Natural Foods, Inc.PMThursday
FNSRFinisar CorporationPMThursday

  

 

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
DK33.74 FSLRBGS
MAC66  HA
    EIX
    PRGO
    RHI
    KMX
    RL

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.9.2017VNTVLongClose14.9.2017+1.35%
212.9.2017CPBShortClose15.9.2017-1.10%
318.9.2017INSMLongClose22.9.2017+1.92%
425.9.2017GPSLongClose2.10.2017+1.69%
527.9.2017SQMLongClose29.9.2017+1.69%
62.10.2017ATILongClose6.10.2017+3.12%
72.10.2017TROXLongClose18.10.2017+13.93%
83.10.2017ABTLongClose11.10.2017+1.60%
99.10.2017ZGNXLongClose12.10.2017+3.26%
1016.10.2017INSMLongClose19.10.2017-2.82%
1124.10.2017CVSShortClose1.11.2017+4.77 %
1230.10.2017SKXLongClose31.10.2017-1.42%
1331.10.2017STXLongClose2.11.2017-0.15%
143.11.2017AKAMLongClose8.11.2017+1.37%
1510.11.2017JUNOLongClose14.11.2017+1.26%
1616.11.2017FLRLongClose25.11.2017+2.16%

 

Today’s Picks – Swing “New-York Strategy”

 No.1 –  SPLK

Company NameSplunk 
Entry Point78.62
Stop Area76.80
1st Target79.45
Swing Target84.88
Avg. Volume1.9M
SectorTechnology | Application Software
Earning Date
Risk RateHigh
Risk\Reward Ratio3.44:1