Picks of the Day 3.2.2017

Amazon Falls 4% after Closing

Stocks struggled again on Thursday, while political drama, violent protests in California and the earnings report of Amazon (AMZN), which was released yesterday after closing, captured most of investors’ attention.

Word came out towards the end of the trading day that the White House would stiffen sanctions on Iran in response to its ballistic missile attempt. President Trump noted that the nuclear deal would remain intact for the time being, while at the same time, clarifying that all options remained on the table.

In summary for the day, the S&P 500 succeeded in salvaging gains of 0.1%, the NASDAQ dropping 0.1% and the Russell 2000 falling 0.3%. Gold took off 0.9%, crude shedding 0.6%.

Last week, the Dow Jones slashed up through the 20,000 point level, though quickly retraced its steps. We now have an “island gap” pattern made up of a “breakout gap” that carried the index to a new high, followed by a quick reversal, with the index gapping downwards, leaving a deep chasm yet to be filled. This is a pattern thought of as negative seeing that it shows a duo of buyers’ and sellers’ conflicting and alternating emotions.

All-in-all, the technical picture remains unchanged. There’s no market leader, and the extreme levels on indexes that gauge market sentiment and the “island gap” pattern are daunting, with all of the above signaling that stocks are vulnerable if the market starts losing traction – something that perhaps should have happened a while ago. The last time the S&P 500 shed more than 1% in a day was in the month of October, 78 trading days ago. The breakup yesterday in both gold and the precious metal’s Exchange Traded Fund (ETF), the GDX, which tracks gold mines, is likely to be an indicator of future volatility.

The stock of U.S. Steel, X, soared 9.6% after being upgraded by analysts at Bank of America Merrill Lynch on the background of a positive forecast for steel prices. The stock of Macy’s (M) jumped 5.2% after a report in the N.Y. Post that the company is looking for a buyer. Costco (COST) climbed 3.9% in the wake of a surge of 5% in sales at its membership warehouse clubs.

Facebook (FB) fell 1.8%, despite the solid numbers it released on Wednesday, the market concerned about a future spike in capital costs. The fashion chain, Ralph Lauren (RL) plunged 12.33% – despite its good numbers – on the heels of the announcement that company CEO, Stefan Larsson, is stepping down because of disagreements with the company founder about the company’s direction.

After Closing: Amazon (AMZN) reported mixed results with earnings of $1.54 per share, above analysts’ forecast of EPS of $1.40. At the same time, the company’s revenues came to $43.7 billion, beneath analyst forecasts of $44.9 billion. The stock fell 4.15% in late trading on the heels of investors’ disappointment.

Also in late trading, the action camera company, GoPro (GPRO) reported an earnings surprise with EPS of 29 cents, above the forecasted 21 cents; revenues though disappointed, coming out at $540.6 million, falling short of expectations of $576 million after the company recalled its Karma drone. The airborne camera is now back on sale three months after the recall. GPRO tumbled 12% in late-trading.

On the S&P 500, 17 stocks rose to new 52-week highs, 5 dipping to new yearly lows; on the NASDAQ, 86 stocks recorded new 52-week highs, 24 falling to new yearly lows.

All-in-all, 7.03 billion shares changed hands on U.S. exchanges, above the 6.75 billion average over the last 20 trading days.

Friday: Wall Street is on the edge of its seat waiting for a strong January employment report today, one that comes out even stronger than the consensus. Analysts project 175 thousand new hires, with an unemployment rate that stays stable at 4.7%, coupled by a slight wage increase of 0.3%. At the same time, based on the big surprise in January’s ADP survey for private sector hires which pointed to 246 thousand new positions, we can expect today’s number to come out stronger than the consensus.

Besides the employment report which will be released before opening at 8:30 N.Y. time, the PMI service sector index will be released at 9:45, the ISM service sector index coming out at 10:00, together with factory order figures. President Trump is expected to be meeting with his advisory business council at 10:00 in the White House.

A number of companies will be reporting before opening: CLX, HSY, PSX, and WY.

Friday’s Hot Stocks: CLX, HSY, PSX, AMZN, GPRO, FEYE, DATA

IPOs: None

Have a great trading day!

3.2.2017

Today’s Picks – Day Trading!

New York Strategy Swing

Today’s Picks – Swing “New-York Strategy

No.1 – SY