Tech Panic Selling Continues

Stocks on Wall Street got a cold reception all over again yesterday, trading in the red after the large tech firms (acronym: FAANG) were beaten to a pulp in light of investors’ mass flight. Indexes were sympathetic, falling in turn, but with that said, volatility was relatively kept in check. And why is that?! Because despite the market’s vulnerability, the bears can’t gather enough strength to shake up more than a few individual sectors.

As a result, a substantial rotation is playing out; bulls are running away from tech stocks which had accumulated returns in the tens of percentage points this year, e.g. Apple (AAPL) and Amazon (AMZN), putting their money to work in areas that have recently lagged behind the rest of the market like energy stocks and industrial stocks. Small-cap stocks have also been graced with some of the rotated funds, and it could be that they’re in for a breakout to a new high, a feat not seen since the post-election rally, which quickly came to a halt come December.

In Summary for the Day: The Dow Jones fell 0.2%, the S&P 500 retreating 0.1% and the NASDAQ declining 0.5%. The Russell 2000 traded off by 0.2%, gold falling by a similar amount – while crude rose 0.5%.

One of the stocks that stood out in yesterday’s trading was Under Armour (UAA) while led the gains on the S&P 500 with a surge of 5.8%; on the flipside, the biggest index weight was NFLX, which fell 4.2%.

The stock of NTRI soared 4.7% on the background of an upgrade from analysts at Sidoti, who noted that the stock is trading at an attractive price in the wake of its latest correction. General Electric (GE) tumbled 3.6% after the company’s CEO announced that he would be stepping down on August 1st. Apple (AAPL) fell 2.5%, prompting further weakness in tech stocks, after shouldering a downgrade to “Neutral” on the part of analysts at Mizuho, who noted that the company has outperformed the market this year and that its entire upcoming product launch cycle has been fully priced in at  the stock’s current valuation levels. After yesterday’s losses, AAPL is still trading up 26% on the year.

The stability par excellence which the market demonstrated yesterday, especially leading up to the Fed’s monetary policy decision this Wednesday, is apparently linked to the expectation that the Fed will lower its inflation forecast for the remainder of the year – in keeping with what the ECB did last week – even if it’s accompanied by a quarter point rate hike.

About 7.89 billion shares changed hands on U.S. exchanges, significantly above the 6.81 billion average over the last 20 trading days.

Friday: The Federal Reserve kicks off its 2-day meeting today and investors will be looking for details as to the timing and manner in which the Fed will begin to start the long process of shrinking its balance sheet. Over the last few years, it’s mushroomed to $4.5 trillion because of the bank’s massive quantitative easing bond acquisition platform; that, after all, was the policy adopted by the Fed to keep the economy from sliding into a recession.

The central bank is expected to hike rates by a quarter of a point today, and is likewise expected to provide further detail about how it intends on lowering the amount of bonds and mortgage-linked assets on its balance sheet. The Fed’s bond purchase program is thought by many to be the largest financial experiment ever. It’s not clear though how the Fed will proceed from hereon in and how its tack will ripple through the economy.

Two reports on inflation will be released this week before the Fed announces its rate hike decision. The Producer Price Index will be released today at 8:30 N.Y. time, and is expected to come out flat. The Consumer Price Index (CPI) will be released tomorrow morning, along with retail chain sales numbers.

IndexLastDaily change
DJX(0.17%)21,236Down
SPX(0.10%)2,429Down
Nasdaq(0.52%6,176Down

Tuesday’s Hot Stocks: MRK, SAIC, XLRN, SYNA

IPOs: None

Have a great trading day!

 

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Tuesday8:30PPIHigh
Wednesday8:30Retail SalesMedium
Wednesday8:30CPIHigh
Wednesday10:00Business InventoriesMedium
Wednesday10:30Crude Oil InventoriesLow
Wednesday14:00FOMC Rate DecisionHigh
Thursday8:30Philadelphia FedMedium
Thursday8:30Export\Import Prices ex-ag.Medium
Thursday8:30Initial ClaimsMedium
Thursday8:30Empire ManufacturingMedium
Thursday9:15Industrial ProductionMedium
Friday8:30Housing StartsMedium
Friday8:30Building PermitsMedium
Friday10:00Mich SentimentHigh

 

Earning Calendar

 

SymbolCompanyAM/PMDay
HRBH&R Block, Inc.PMTuesday
JBLJabil Circuit, Inc.PMWednesday
KRThe Kroger Co.AMThursday
FNSRFinisar CorporationPMThursday
ALRAlere Inc.AMFriday

 

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
TPX$51.60UANFLX
OMER$17.19CBSBAX
TRV$125.80COTY 
CBI$15.00GTXI 
LBTYA$29.15OMER 
 NK 

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.5.2017AAOILongClose2.5.2017+0.54%
23.5.2017SCSSLongClose9.5.2017-1.71%
34.5.2017CRZOShortClose5.5.2017+0.30%
48.5.2017WTWLongClose16.5.2017+6.09%
515.5.2017AANLongClose16.5.2017-1.70%
616.5.2017CCLLongClose17.5.2017-0.41%
717.5.2017AMAGShortClose24.5.2017+5.38%
817.5.2017AANLongClose24.5.2017-2.59%
919.5.2017TRCOLongClose23.5.2017-1.45%
1019.5.2017GIMOLongClose26.5.2017+2.05%
111.6.2017BF.BLongClose6.6.2017+0.95%
127.6.2017LULULongClose9.6.2017-2.24%
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15
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Today’s Picks – Swing “New-York Strategy

 No.1 –  CCL

Company NameCarnival Corporation
Entry Point63.59
Stop Area62.65
1st Target64.30
Swing Target66.48
Avg. Volume3.36M
SectorServices | Resorts & Casinos
Earning Date27 Jun
Risk RateNormal
Risk\Reward Ratio3.07:1

No.2 – SIG

Company NameSignet Jewelers Limited
Entry Point58.88
Stop Area61.15
1st Target57.55
Swing Target46.09
Avg. Volume1.70M
SectorServices | Jewelry Stores
Earning Date
Risk RateHigh
Risk\Reward Ratio5.63:1