Price Reset!

Wall Street fell strongly yesterday, the S&P 500 and the Dow Jones suffering their worst trading day in a month-and-a-half after the latest tech stock declines intensified and offset the banking sector’s strength.

The tech sector (XLK), which has led the S&P 500 to rally 8% year-to-date, fell 1.8% yesterday, making in the market’s biggest daily loser. The declines on the sector were not limited to but included Apple (AAPL), and Microsoft (MSFT), which weighed more than anything, on the S&P 500.

Financial stocks (XLF) and energy stocks (XLE) were the only sectors that traded up yesterday, investors injecting funds into the sectors which have lagged year-to-date.

U.S. stocks have been trading at high valuations and close to their historic highs for quite some time, faith in their underlying value flagging – and now being put to the test. With few significant catalysts that can propel stock prices higher, market prices need a reset, precisely what we saw yesterday!

In Summary for the Day: The Dow Jones fell 0.78%, the S&P 500 shedding 0.86%. The NASDAQ was the worst performing of the three large indexes, dropping 1.44% and closing beneath its 50-period EMA for the first time since April 13th; this close beneath the technically significant level could spark further declines. Gold fell 0.3%, crude though rising 0.4% with its sixth consecutive winning day.

The VIX, which is thought of as the market’s best fear gauge – measuring short-term volatility – soared to a 6-week high to the 15.6 point level, before backtracking to some degree before closing.

The second quarter wraps up today, the rise in volatility most certainly felt over the last few days, the NASDAQ, this past Wednesday, having recorded its best trading day since November 7th.

Financial stocks (XLF) were the light at the end of the tunnel with gains of 0.7%, banking stocks rising after the Fed approved 34 banks’ plans to execute stock buybacks and issue dividends after they successfully passed the central banks’ stress tests. In essence, stress tests measure how banks would fare in a severe financial crisis. The stocks that stood out in the sector included Wells Fargo (WFC), which soared 2.7%, and Citigroup (C), which jumped 2.8% after announcing that it would raise dividends by 100% and buy back $15.6 billion shares.

Another stock of note was GRPN which rallied 4.3% after receiving a rating upgrade. LULU soared 5.2% after the company’s CEO announced that he was buying $5.5 million in shares. RAD toppled 26.5% after it and the drugstore chain, WBA, announced that they were ending their merger plans after failing to receive regulatory approval.

In Summary: This is the best opportunity bears have had in months. The NASDAQ is beneath its 50-period EMA, a level at which the index hasn’t traded in months. The question is whether the bears can translate this isolated losing day into a trend with lasting effect. This is something that they haven’t succeeded in doing since November 8th, U.S. Election Day.

About 7.9 billion shares traded hands on U.S. exchanges, above the 7.3 billion average over the last 20 trading days.

Friday: Today is the last trading day for June, Q2, and the first half of the year, all in one! And a lot hinges on what happens today! Take for example the S&P 500 which is now traded off 0.61% on the week, though only negligibly down by 0.04% on the month. The market’s performance today will in large part determine whether June goes down as being in the red or in the green. The heretofore performance for the quarter is more secure, with gains of 2.14%.

Today’s Economic figures will command attention, traders eyeing private income and spending figures which are expected to be released today before opening at 8:30 N.Y. time, the University of Michigan Consumer Confidence Index reading then coming out at 10:00.

The stocks expected to see volatile movement today include NKE, and MU, which both reported yesterday after closing.

Index Last Daily change
DJX (0.78%) 21,287 Down
SPX (0.86%) 2,420 Down
Nasdaq (1.44%) 6,144 Down

Friday’s Hot Stocks: MU, NKE, AOBC

IPOs: BY, AKCA, TNTR

Have a great trading day!

 

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Monday 8:30 Durable Orders -0.6% Medium
Tuesday 10:00 Consumer Confidence 116.7 Medium
Wednesday 10:30 Crude Oil Inventories Low
Thursday 8:30 GDP – Third Estimate 1.2% High
Thursday 8:30 Initial Claims 241K High
Friday 8:30 Personal Income 0.3% Medium
Friday 8:30 Personal Spending 0.1% Medium
Friday 8:30 PCE Prices Medium
Friday 9:15 Chicago PMI 57.8 Medium
Friday 10:00 Michigan Sentiment – Final 94.7 High

 

Earning Calendar

 

Symbol Company AM/PM Day
FDS FactSet Research Systems Inc. BMO Tuesday
DRI Darden Restaurants, Inc. BMO Tuesday
PAYX Paychex, Inc. BMO Wednesday
GIS General Mills, Inc. BMO Wednesday
MON Monsanto Company BMO Wednesday
WOR Worthington Industries, Inc. AMC Wednesday
MKC McCormick & Company, Incorporated BMO Thursday
CAG Conagra Brands, Inc. BMO Thursday
WBA Walgreens Boots Alliance, Inc. BMO Thursday
STZ Constellation Brands, Inc. BMO Thursday
NKE NIKE, Inc. AMC Thursday
MU Micron Technology, Inc. AMC Thursday

  

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
KITE 103.81 SCSS CAG
VMW 85.45 LULU DATA
USG 27.89   KHC
    VMW
    DATA

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.5.2017 AAOI Long Close 2.5.2017 +0.54%
2 3.5.2017 SCSS Long Close 9.5.2017 -1.71%
3 4.5.2017 CRZO Short Close 5.5.2017 +0.30%
4 8.5.2017 WTW Long Close 16.5.2017 +6.09%
5 15.5.2017 AAN Long Close 16.5.2017 -1.70%
6 16.5.2017 CCL Long Close 17.5.2017 -0.41%
7 17.5.2017 AMAG Short Close 24.5.2017 +5.38%
8 17.5.2017 AAN Long Close 24.5.2017 -2.59%
9 19.5.2017 TRCO Long Close 23.5.2017 -1.45%
10 19.5.2017 GIMO Long Close 26.5.2017 +2.05%
11 1.6.2017 BF.B Long Close 6.6.2017 +0.95%
12 7.6.2017 LULU Long Close 9.6.2017 -2.24%
13 14.6.2017 SIG Short Close 23.6.2017 +2.29%
14 16.6.2017 AABA (YHOO) Long Close 26.6.2017 +3.14%
15 21.6.2017 KR Short Close 27.6.2017 -2.75%
16 29.6.2017 DKS Short Open   +1.76%
17
18    

 

Today’s Picks – Swing “New-York Strategy

 No.1 –  DRI

Company Name Darden Restaurants
Entry Point 92
Stop Area 90.85
1st Target 92.60
Swing Target 95.22
Avg. Volume 1.53M
Sector Services | Restaurants
Earning Date
Risk Rate Normal
Risk\Reward Ratio 2.80:1

 

No.2 – ATUS

Company Name Altice USA
Entry Point 32.86
Stop Area 32.35
1st Target 33.25
Swing Target 35.29
Avg. Volume 10.31M
Sector Technology | Telecom Services – Domestic
Earning Date
Risk Rate Normal
Risk\Reward Ratio 4.76:1