Hole in the Barrel: Crude Tumbles 5.4%

The S&P 500 and the Dow Jones fell yesterday as energy stocks suffered their worst day of losses in almost 6 months. The energy sector (XLE) fell 2.5% on the background of a plunge of over 5% in crude prices that came on the background of stronger than expected gains in crude reserves. While OPEC countries are cutting production, inventories in the U.S. have grown and oil shale producers are making handsome profits at these levels, production now stabilizing.

In summary for the day, the Dow fell 0.3%, the S&P 500 shedding 0.23% and the NASDAQ rising 0.06%. The Russell 2000 dropped 0.6%, gold slipping 0.6% and crude ending sharply off by 5.4%.

According to the U.S. Dept. of Energy, reserves last week grew by 8.2 million barrels, significantly outpacing expectations for a 2 million rise; all-in-all, now we’ve seen 9 straight weeks of inventory growth. The Exchange Traded Fund, the DWT, which enables traders to take a 3-fold position inverse to the movement of crude, soared almost 16% yesterday. The negative momentum in crude is likely to grow seeing that the number of futures long on crude are significantly higher than those going short, meaning that if hedge fund managers panic, things could get ugly. The correction we had seen until now could be in jeopardy, bringing an end to the period of relative stability seen in energy prices this past year.

According to a report by Bloomberg, crude reserves are now 39% above their 5-year average for this time of year, the number of active drills in the U.S. now 51% higher year-over-year.

Another sector that traded under selling pressure was real estate; sensitive to interest rate movement, it fell 1.5% after the ADP survey released yesterday before opening pointed to 298 thousand new private sector positions last month, catching the market off guard and far outpacing the consensus of 190 thousand new positions. With such strong figures for the private sector, the stage is set on Friday for solid numbers from the Labor Department’s official February employment report. With flimsy chances of seeing a weak employment report at the end of the week, the Fed presumably stands to hike rates in its meeting next Wednesday.

Wall Street stock indexes are still close to their all-time highs, fueled by optimism about the growth-oriented policies of the Trump administration. In tandem, policy details are still vague, concerns about valuations being over overpriced now more vocal.

One of the stocks that stood out in yesterday’s trading was PLCE, which soared 18.3% on the background of a large earnings surprise for last quarter. EXPR toppled 10.9%. Despite conforming to analysts’ earnings expectations, the company lowered its full-year forecast. CAT fell 2.8% after the NY Times released a report commissioned by the federal government that alleges that the company engaged in tax and accounting fraud. No charges have been filed yet against the company. HRB soared almost 15% in its best trading day in almost 8 years after the tax service company reported its last quarter financial results.

On the S&P 500, 15 stocks rose to new 52-week highs, 13 dipping to new yearly lows; on the NASDAQ, 65 stocks recorded new 52-week highs, 47 falling to new yearly lows.

About 7.07 billion shares changed hands on U.S. exchanges, slightly above the 6.94 billion average over the last 20 trading days.

Thursday: Trading today will center on crude prices and the headlines coming out of Europe, as U.S. traders await the all-important employment report that will be released tomorrow. Yesterday’s breakdown in the price of crude, the Fed’s intents to hike rates, the potential for new policy announcements on the part of the Trump administration, Friday’s employment report and the impending European elections all cause today’s trading to revolve around a few key market events.

In light of a sizable amount of uncertainty, European Central Bank (ECB) president, Mario Draghi, will try not to rock the boat when he speaks today. The ECB is expected to make its monetary policy announcement today at 7:45 N.Y. time, after which it will be holding a press conference at 8:30. Traders will look for every sign from Draghi as to when the ECB is likely to terminate its asset purchase program. The press conference, during which Draghi will field questions, will be most interesting, especially when taking into account that the pace of Euro zone inflation has now reached 2%, with the bloc’s economic figures now coming out strong.

The economic figures expected to be released today include weekly unemployment claims at 8:30, alongside import and export prices and the Fed balance, all at the same hour.

IndexLastDaily changeR2R1PPS1S2
DJX20,856(-0.33%)Down     
SPX2,363(-0.23%)Down238.11237.33236.87236.09235.63
Nasdaq5,8380.06%Up131.47131.11130.78130.42130.09

Today’s reporting companies include SIG, SPLS and PRTY before the opening bell. After closing, be primed for the numbers of FNSR, LOCO, ULTA, and PAY.

Thursday’s Hot Stocks: SIG, SPLS, PRTY, CWH, RATE, ELF

IPOs: JILL

Have a great trading day!

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Monday10:00Factory Orders1.0%Medium
Tuesday8:30Trade Balance-$48.5BMedium
Wednesday8:15ADP Employment Change180KMedium
Wednesday8:30Productivity-Rev.1.5%Medium
Wednesday10:00Wholesale Inventories-0.1%Medium
Wednesday10:30Crude InventoriesLow
Thursday8:30Export Prices ex-ag.Medium
Thursday8:30Import Prices ex-oilMedium
Thursday8:30Initial ClaimsHigh
Friday8:30Nonfarm Payrolls188KHigh
Friday8:30Unemployment Rate4.7%High
Friday8:30
Average Workweek
34.4Medium
Friday14:00Treasury BudgetMedium

 

Earning Calendar

 

SymbolCompanyAM/PMDay
CASYCasey’s General Stores, Inc.PMMonday
THOThor Industries, Inc.PMMonday
DKSDick’s Sporting Goods, Inc.AMTuesday
MOMOMomo Inc.AMTuesday
NAVNavistar International CorporationAMTuesday
URBNUrban Outfitters, Inc.PMTuesday
CIENCiena CorporationAMWednesday
UNFIUnited Natural Foods, Inc.PMWednesday
SIGSignet Jewelers LimitedAMThursday
PAYVeriFone Systems, Inc.PMThursday
FNSRFinisar CorporationPMThursday
ULTAUlta Beauty, Inc.PMThursday
YPFYPF S.A.PMThursday

 

 9.3.2017

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
AXTA30.21 AXTAFANG
NKTR15.61 BITADOV
PBYI41.35 PPGCVX
SWKS97.57 MOMODVN
    OAS
    SLCA

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.2.2017AKAOLongClose16.2.2017+11.29%
22.2.2017DATALongClose6.2.2017+13.09%
37.2.2017GNCShortClose9.2.2017+3.26%
49.2.2017PGLongClose13.2.2017-0.63%
59.2.2017ATILongClose14.2.2017+2.42%
613.2.2017STXLongClose16.2.2017+1.26%
714.2.2017CXWLongClose23.2.2017+4.53%
815.2.2017ZENLongClose23.2.2017+1.60%
921.2.2017AALongClose23.2.2017-1.17%
1022.2.2017SCORShortClose24.2.2017+0.78%
1123.2.2017NTAPLongClose8.3.2017+2.95%
1227.2.2017DATALongClose1.3.2017-2.14%
136.3.2017LBTYKLongOpen +1.55%
148.3.2017FTNTLongOpen +1.41%
15      
16      

 Today’s Picks – Swing “New-York Strategy

No.1 –    ARNC

Company NameArconic 
Entry Point27.19
Stop Area26.60
1st Target27.80
Swing Target30.69
Avg. Volume5.47M
SectorBasic Materials | Aluminum
Earning Date
Risk RateNormal
Risk\Reward Ratio5.93:1

No.2 – CENX

Company NameCentury Aluminum Company
Entry Point13.51
Stop Area12.90
1st Target13.90
Swing Target16.45
Avg. Volume2.86
SectorBasic Materials | Aluminum
Earning Date
Risk RateNormal
Risk\Reward Ratio5.93:1