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.

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

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

 

DAY TIME (EST) Event Forecast Impact
Tuesday 8:30 Current Account Balance -$123.4B Medium
Wednesday 10:00 Existing Home Sales 5.52M Medium
Wednesday 10:30 Crude Oil Inventories Low
Thursday 8:30 Initial Claims 240K High
Thursday 9:00 FHFA Housing Price Index Medium
Friday 10:00 New Home Sales 599K Medium

 

Earning Calendar

 

Symbol Company AM/PM Day
LEN Lennar Corporation AM Tuesday
RHT Red Hat, Inc. PM Tuesday
FDX FedEx Corporation PM Tuesday
ADBE Adobe Systems Incorporated PM Tuesday
KMX CarMax Inc. AM Wednesday
ORCL Oracle Corporation PM Wednesday
CACI CACI International Inc PM Wednesday
HAIN The Hain Celestial Group, Inc. AM Thursday
CCL Carnival Corporation PM Thursday
CMC Commercial Metals Company PM Thursday
ACN Accenture plc PM Thursday
BBBY Bed Bath & Beyond Inc. PM Thursday

  

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
MS 46 VSLR JWN
ILG 29 AXSM KLAC
LUV 61.24 VNDA OKE
CTSH 67.88 ARNA ROST
AAP 123.49   APA
SNAP 17    
KMX 59.12    

 

 

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 Open   -1.1%
14 16.6.2017 AABA (YHOO) Long Open +2.15%
15
16
17
18    

 

Today’s Picks – Swing “New-York Strategy

No.1 –    KR

Company Name
The Kroger Co.
Entry Point 22.20
Stop Area 23.05
1st Target 21.70
Swing Target 20.46
Avg. Volume 11.55M
Sector Services | Grocery Stores
Earning Date
Risk Rate Normal
Risk\Reward Ratio 2.05:1