Do the Long Summer Days of August Have a Surprise in Store?

The employment figures released on Friday were positive. Based on the Labor Department, 209 thousand new positions were produced in the U.S. in the month of July, surpassing the early forecast of 175 thousand. The unemployment rate, as expected, fell to 4.3%. The July employment report led to only limited positive movement in Friday’s trading, but these are the long days of summer and movement is slow. Wall Street ended mixed on the week, the Dow Jones notching gains of 1.2%, though the S&P 500 ended only negligibly up with gains of 0.2%, and the NASDAQ ended off 0.4%.

 

The earnings season usually prompts higher level volatility, but this time around – and despite the solid numbers we saw in most instances – few stocks succeeded in rallying higher on their good numbers. In effect, traders’ tendency over the last few weeks has been to “sell the news” the moment a company releases positive financial results, which leaves potential buyers with even the slightest glimmer of doubt on the sideline.

 

From a technical perspective, there’s support afoot that has succeeded in keeping indexes above key levels. The S&P 500 has not seen significant gains already for 13 days, likewise failing to fall substantially in the same timeframe. In effect, indexes are trapped in a narrow trading range, and are doing the minimum necessary to keep bears at arm’s length.

 

The concern about, though, is that we could see the very flat movement that we saw exactly a year ago in August 2016, when the market, for 3 weeks, traded sideways, with no substantial movement in either direction. It seems that the dynamics in the market support this type of movement. Computerized algorithms are buying every correction, even those most minimal, while selling in the face of every rally. Resultantly, the S&P 500 has ended changed by less than 0.2% in either direction on every trading day over the last few weeks.

 

Market players are now digesting the numbers from the earnings season and many stocks have traded fitfully after the release of their earnings numbers in an attempt to create a new base of support. Stock valuations in many instances have been problematic and value investors have been in no rush to jump on some of the abovementioned corrections.

 

The going wisdom is that movement of this ilk is the precursor for larger movement. We’ve heard about this many times in the past, but generally speaking, the surprise has been that the flat movement has continued for longer than players had originally thought logical. If index and future contract traders are down and out, traders in individual stocks have excelled, capitalizing on the many opportunities produced in limited windows of time ranging from a few days to even a few hours.

 

The earnings season has helped pushed indexes to new highs this summer. At present, 85% of S&P 500 companies have released their earnings reports, quarterly earnings growth now coming to some 12%.

 

The coming week on Wall Street will be dominated by media companies and retailers which will be reporting their earnings numbers alongside the market’s inflation figures; likewise, in the long August summer days, Fed speakers will keep investors on their toes.

 

The earnings reports that will be released this week include Disney (DIS), and News Corp (NWSA), along with large retail chains like Macy’s (M), Nordstrom (JWN), Kohl’s (KSS) and J.C. Penney (JCP). The two issues that have disappointed the market of late, SNAP and APRN, are expected to report on Thursday.

 

The Producer Price Index (PPI) and the Consumer Price Index (CPI) are expected to report towards the end of the week, but it’s the CPI that will be released on Friday which will receive most of the attention after July’s employment numbers indicated yet another month of moderate wage growth, with other inflation numbers not pasting muster. All of this leaves investors skeptical about the possibility that the Fed will hike rates in December. The lack of inflation raises the probability that the Fed will fall short of its annual inflation target come year’s end.

 

Have a great trading week!

  

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Tuesday 6:00 NFIB Small Business Optimism Index 103.2 Medium
Tuesday 10:00 JOLTS 5.600 M Medium
Wednesday 10:00 Wholesale Trade 0.6 % Medium
Wednesday 10:30 Crude Inventories Low
Thursday 8:30 Initial Claims 241 K Medium
Thursday 8:30 PPI 0.1 % High
Friday 8:30 Consumer Price Index 0.2 % High

 

Earning Calendar

 

Symbol Company AM/PM Day
HZNP Horizon Pharma AM Monday
FOLD Amicus Therapeutics, Inc. AM Monday
FDC First Data Corporation AM Monday
TSN Tyson Foods, Inc. AM Monday
CBS CBS Corporation PM Monday
LILA LiLAC Group PM Monday
LBTYA Liberty Global plc PM Monday
MAR Marriott International, Inc. PM Monday
TWLO Twilio Inc. PM Monday
CAR Avis Budget Group, Inc. PM Monday
LPI Laredo Petroleum, Inc. PM Monday
AGIO Agios Pharmaceuticals, Inc. AM Tuesday
ZBRA Zebra Technologies Corporation AM Tuesday
VRX Valeant Pharmaceuticals International, Inc. AM Tuesday
KORS Michael Kors Holdings Limited AM Tuesday
RL Ralph Lauren Corporation AM Tuesday
KITE Kite Pharma, Inc. AM Tuesday
LAMR Lamar Advertising Company AM Tuesday
W Wayfair Inc. AM Tuesday
CVS CVS Health Corporation AM Tuesday
ZTS Zoetis Inc. AM Tuesday
IONS Ionis Pharmaceuticals, Inc. AM Tuesday
DISCA Discovery Communications, Inc. AM Tuesday
EXPD Expeditors International of Washington, Inc. AM Tuesday
NCLH Norwegian Cruise Line Holdings Ltd. AM Tuesday
TSO Tesoro Corporation PM Tuesday
MNST Monster Beverage Corporation PM Tuesday
CLR Continental Resources, Inc. PM Tuesday
GDDY GoDaddy Inc. PM Tuesday
PCLN The Priceline Group Inc. PM Tuesday
DIS The Walt Disney Company PM Tuesday
TSRO Tesaro, Inc. PM Tuesday
TRIP TripAdvisor, Inc. PM Tuesday
Z Zillow Group, Inc. PM Tuesday
NUAN Nuance Communications, Inc. PM Tuesday
ACAD ACADIA Pharmaceuticals Inc. PM Tuesday
LITE Lumentum Holdings Inc. AM Wednesday
SINA SINA Corporation AM Wednesday
MYL Mylan N.V. AM Wednesday
WB Weibo Corporation AM Wednesday
FOXA Twenty-First Century Fox. PM Wednesday
PLNT Planet Fitness, Inc. PM Wednesday
XON Intrexon Corporation PM Wednesday
JACK Jack in the Box Inc. PM Wednesday
YY YY Inc. AM Thursday
KSS Kohl’s Corporation AM Thursday
M Macy’s, Inc. AM Thursday
PRGO Perrigo Company plc AM Thursday
SNAP Snap Inc. PM Thursday
JWN Nordstrom, Inc. PM Thursday
NVDA NVIDIA Corporation PM Thursday
TTD The Trade Desk, Inc. PM Thursday

 

 

 


 

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
DVAX $17.20 CARA TEVA
JD $46.85 GRUB VIAB
CAT $114.90 NBIX CAVM
APO $29.20 CF FNSR
TTMI $13.33 CBB MYL
RSPP $29.67 WTW AAOI
     
   
     

  

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 14.6.2017 SIG Short Close 23.6.2017 +2.29%
2 16.6.2017 AABA (YHOO) Long Close 26.6.2017 +3.14%
3 21.6.2017 KR Short Close 27.6.2017 -2.75%
4 29.6.2017 DKS Short Close 3.7.2017 +1.04%
5 6.7.2017 HAIN Long Close 18.7.2017 +2.52%
6 6.7.2017 DKS Short Close 13.7.2017 +3.96%
7 10.7.2017 ORCL Long Close 13.7.2017 +1.38%
8 13.7.2017 YUMC Short Close 31.7.2017 +2.12%
9 18.7.2017 LB Short Close 20.7.2017 +1.34%
10 20.7.2017 FIVE Short Close 26.7.2017 +1.97%
11 21.7.2017 HOG Short Close 27.7.2017 +0.39%
12 2.8.2017 AKAM Short Close 3.8.2017 -1.12%
13 3.8.2017 NKE Long Open   +0.46%
14 4.8.2017 SBUX Short Open   +0.11%
15