Black Day for Crude, Stocks in the Red!

Stocks on Wall Street closed in the red on Tuesday against the backdrop of a plunge in crude which sent energy stocks spinning lower. Retail stocks traded off as more concerns piled up about the plans of Amazon (AMZN) to gain a stronger presence in the clothing and apparel market. Biotech stocks were the one beacon of light, recording gains of 1.27% on the day.

Crude fell 2% after word got out about a rise in supply on the part of a number of producers, a trend that’s increasingly undermining OPEC and other oil-rich countries’ efforts to support a glut-saturated market. Many investors thought that the $45-$55 barrel range is realistic but prices have continually fallen in keeping with American producers’ heightened efficiency. Yesterday, crude tested the $43 barrel level for the first time since November, ending sharply off by 2.1% at the $43.48 barrel level.

It’s becoming more and more apparent that the energy OPEC has invested since 2016 to limit world crude supply has not succeeded in creating equilibrium in that market – and that American companies, especially those companies deriving crude from oil shale, have become more efficient, now capable of staying competitive at lower prices. Take, for example, the number of active drills in the U.S., which has risen month in and month out over the last few months. Furthermore, the tapering in gasoline usage, is worrisome not only because of the consequences it has on crude market demand, but also seeing that it’s likely to signal broader market woes.

The market’s declines only got worse as trading neared, after the rhetoric of the Dallas Fed President, Robert Kaplan, which seemed to only add to investors’ discomfort about the anticipated Fed’s monetary tightening pace. Kaplan stated that technology and globalization are two factors checking U.S. inflation, which signals the continuity of low inflation. Earlier, Boston Fed President, Eric Rosengren, commented that the era of low interest rates in the U.S. and elsewhere in the world poses a financial stability risk factor.

Daily Summary: The Dow Jones fell 0.29%, the S&P 500 shedding 0.67%, the NASDAQ recording losses of 0.82%.

One of the stocks that stood out in yesterday’s trading was AMD, which rallied 6% after reports that its new processor, Ryzen, was in high demand, something expected to push up company profits in the second quarter of the year. The watchmaker, FOSL, rose 1.7% after receiving an upgrade from Buckingham, which noted the company’s current high valuation. TSLA rose 0.7% after reports from Bloomberg that the company is close to signing an agreement to establish a factory in China, which would enable it to avoid paying a 25% tariff on car imports.

On the S&P 500, 49 stocks rose to new 52-week highs, 10 dipping to new yearly lows; on the NASDAQ, 99 stocks recorded new 52-week highs, 87 falling to new yearly lows.

About 7.1 billion shares changed hands on U.S. exchanges, similar to the 6.86 billion average over the last 20 trading days.

Wednesday: The continued decline in crude prices is likely to become an entrenched problem for stocks in the event crude loses its hold on the $40 barrel level. Crude will be in the limelight in the market again today, with weekly crude reserves coming out today at 10:30; the commodity is now traded 20% beneath its latest high, recorded last January.

Analysts expect the U.S. Department of Energy to announce a decline in inventories of 2 million barrels. In the event we see a rise in inventories, it could be a problem. The $40 level is important, seeing that at such a level, most American crude companies are unprofitable. The going wisdom is that a breakdown from $40 to $30 could already affect the stock market.

Besides energy figures, home sale numbers will be released at 10:00; it will be carefully followed by investors after home start numbers came out beneath expectations last week. Existing home sale numbers are expected to record a 0.5% decline.

IndexLastDaily change
DJX(0.27%)21,467Down
SPX(0.67%)2,437Down
Nasdaq(0.82%)6,188Down

Earnings reports are expected from KMX and ATU before opening. After closing, ORCL will be reporting.

Wednesday’s Hot Stocks: ADBE, FDX, LZB, ATU, ADBE, RHT

IPOs: None

Have a great trading day!

 

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Tuesday8:30Current Account Balance-$123.4BMedium
Wednesday10:00Existing Home Sales5.52MMedium
Wednesday10:30Crude Oil InventoriesLow
Thursday8:30Initial Claims240KHigh
Thursday9:00FHFA Housing Price IndexMedium
Friday10:00New Home Sales599KMedium

 

Earning Calendar

 

SymbolCompanyAM/PMDay
LENLennar CorporationAMTuesday
RHTRed Hat, Inc.PMTuesday
FDXFedEx CorporationPMTuesday
ADBEAdobe Systems IncorporatedPMTuesday
KMXCarMax Inc.AMWednesday
ORCLOracle CorporationPMWednesday
CACICACI International IncPMWednesday
HAINThe Hain Celestial Group, Inc.AMThursday
CCLCarnival CorporationPMThursday
CMCCommercial Metals CompanyPMThursday
ACNAccenture plcPMThursday
BBBYBed Bath & Beyond Inc.PMThursday

  

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
MS46VSLRJWN
ILG29AXSMKLAC
LUV61.24VNDAOKE
CTSH67.88ARNAROST
AAP123.49 APA
SNAP17  
KMX59.12  

 

 

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%
1314.6.2017SIGShortOpen -1.1%
1416.6.2017AABA (YHOO)LongOpen+2.15%
15
16
17
18  

 

Today’s Picks – Swing “New-York Strategy

No.1 –    KR

Company Name
The Kroger Co.
Entry Point22.20
Stop Area23.05
1st Target21.70
Swing Target20.46
Avg. Volume11.55M
SectorServices | Grocery Stores
Earning Date
Risk RateNormal
Risk\Reward Ratio2.05:1