Weakness Continues, Dow Drops 200 in 2 Days!

On Tuesday, the market opened weakly, but closed strongly. Yesterday, it was the opposite! Despite the fact that this type of volatility is, under certain circumstances, likely to play into traders’ hands, that’s not the case in the current market. Market movement is a function of apathy and computerized trading more than strong emotion or a change in sentiment.

On Wednesday, the market closed off, led lower by I.B.M. (IBM) and a drop in the price of crude. The Dow Jones closed down 0.58%, IBM being the heaviest weight on the index after missing on the top line with its latest numbers and falling just under 5% on the day. The S&P 500 closed off 0.18%, the energy sector (XLE) weighing on the market with losses of 1.4% after crude fell 3.76% and closed at the $50.44 barrel level.

It’s not fear or greed underlying the movement, but rather the code written up by algorithm traders, along with traders looking for a relative advantage. It seems that even the news streaming into the market doesn’t matter anymore. News is nothing more than a means of justifying movement in one direction or another for a couple of hours, but movement from one day to the next isn’t being driven by the headlines.

There’s no doubt that there are a number of negative market factors, like the weak reaction to date towards earnings reports, the likes of I.B.M. (IBM), yesterday’s prime example – along with the lack of progress on the part of the Trump administration in everything regarding fiscal reform. Likewise, the fact that the Fed is apparently tightening its stance – and that the economy doesn’t seem to be heading anywhere – with treasuries acting as if a recession is impending, and you’ve got a lot of hurdles ahead.

For the sake of transparency, market players will agree that the market isn’t acting “normally,” which has been the case for some time, though it seems like nobody knows what can stir the pot and get the market back on track. It would seem that a change of this fashion can come only after a substantial correction. The fear of losing money is one of the things that can indeed stir emotions. “Correction buying” has already become something that’s automated, something devoid of human thought or feeling.

The market has been on the verge of a price correction for some time now, and the weak movement and yesterday’s horrendous close did nothing to change that picture. Indexes are still holding their ground above March’s low, though the Dow has been leading the movement on the downside.

This is not a healthy market. At the same time, structural factors at play in the way the market is functioning are preventing it from carrying out a healthy correction.

On the economic front, the Beige Book on the economy, which was released yesterday by the Federal Reserve, illustrated growing economic activity in the Fed’s 12 districts of operation. The market’s expectations for a June rate hike have tapered of late on the background of disappointment about the clip of inflation as well as retail chain sales results.

On the S&P 500, 17 stocks rose to new 52-week highs, 2 dipping to new yearly lows; on the NASDAQ, 40 stocks recorded new 52-week highs, 59 falling to new yearly lows.

About 6.07 billion shares changed hands on U.S. exchanges, compared to the 6.41 billion average over the last 20 trading days.

Thursday: The key economic figures today will be initial unemployment claims at 8:30 N.Y. time, along with the release of the Philadelphia Fed Survey at the same hour. The Leading Indicators Index will be released at 10:00.

Today’s earnings reports will include PM and TRV before opening. V will be releasing its numbers after closing.

Index Last Daily change R2 R1 PP S1 S2
DJX 20,404 (-0.58%) Down          
SPX 2,338 (-0.17%) Down 236.91 236.18 235.30 234.57 233.69
Nasdaq 5,863 0.23% Up 132.73 132.39 132.04 131.70 131.35

Today’s Hot Stocks: NUE, PM, TRV, EABY, QCOM, CSX, URI

IPOs: None

Have a great trading day!

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Monday 8:30 Empire Manufacturing 13.0 Medium
Monday 10:00 NAHB Housing Market Index 70 Medium
Tuesday 8:30 Housing Starts 1260K Medium
Tuesday 8:30 Building Permits 1240K Medium
Tuesday 9:15 Industrial Production 0.4% Medium
Wednesday 10:30 Crude Inventories Low
Wednesday 14:00 Fed’s Beige Book High
Thursday 8:30 Initial Claims 241K High
Thursday 8:30 Philadelphia Fed 21.8 Medium
Thursday 10:00 Leading Indicators 0.3% Medium
Friday 10:00 Existing Home Sales 5.55M Medium

 

 

Earning Calendar

 

Symbol Company AM/PM Day
UAL United Continental Holdings, Inc. PM Monday
NFLX Netflix, Inc. PM Monday
GS The Goldman Sachs Group, Inc. AM Tuesday
UNH UnitedHealth Group Incorporated AM Tuesday
BAC Bank of America Corporation AM Tuesday
JNJ Johnson & Johnson AM Tuesday
HOG Harley-Davidson, Inc. AM Tuesday
CMA Comerica Incorporated AM Tuesday
OMC Omnicom Group Inc. AM Tuesday
IBM International Business Machines Corporation PM Tuesday
YHOO Yahoo! Inc. PM Tuesday
LRCX Lam Research Corporation PM Tuesday
BLK BlackRock, Inc. AM Wednesday
ABT Abbott Laboratories AM Wednesday
MS Morgan Stanley AM Wednesday
TXT Textron Inc. AM Wednesday
URI United Rentals, Inc. PM Wednesday
EBAY eBay Inc. PM Wednesday
CSX CSX Corporation PM Wednesday
QCOM QUALCOMM Incorporated PM Wednesday
AXP American Express Company PM Wednesday
PM Philip Morris International Inc. AM Thursday
TRV The Travelers Companies, Inc. AM Thursday
BBT BB&T Corporation AM Thursday
DOV Dover Corporation AM Thursday
DHI D.R. Horton, Inc. AM Thursday
NUE Nucor Corporation AM Thursday
V Visa Inc. PM Thursday
GE General Electric Company AM Friday
NEE NextEra Energy, Inc. AM Friday
HON Honeywell International Inc. AM Friday
SLB Schlumberger Limited AM Friday
STI SunTrust Banks, Inc. AM Friday

 

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
NI 24.29   WRK CRZO
WBA 84.02   WUBA CTRP
SCSS 26   W NFX
PNC   115 EDU  
SLCA   42 AMBA  

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 6.3.2017 LBTYK Long Close 14.3.2017 +2.47%
2 8.3.2017 FTNT Long Close 9.3.2017 +0.37%
3 13.3.2017 ARNC Long Close 21.3.2017 +1.92%
4 14.3.2017 MOMO Long Close 20.3.2017 +5.50%
5 15.3.2017 PTLA Long Close 17.3.2017 +0.65%
6 17.3.2017 NTNX Long Close 21.3.2017 -4.23%
7 22.3.2017 FNSR Short Close 25.3.2017 -2.78%
8 27.3.2017 AKAO Long Close 31.3.2017 +11.31%
9 30.3.2017 AFSI Short Close 3.4.2017 -6.63%
10 3.4.2017 ARNC Long Close 31.3.2017 -2.52%
11 3.4.2017 GME Short Close 10.4.2017 +1.95%
12 5.4.2017 IPXL Long Close 11.4.2017 +7.03%
13 13.4.2017 NKTR Long Open   -0.39%
14            
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18