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.

Index Last Daily change R2 R1 PP S1 S2
DJX 20,856 (-0.33%) Down          
SPX 2,363 (-0.23%) Down 238.11 237.33 236.87 236.09 235.63
Nasdaq 5,838 0.06% Up 131.47 131.11 130.78 130.42 130.09

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

 

DAY TIME (EST) Event Forecast Impact
Monday 10:00 Factory Orders 1.0% Medium
Tuesday 8:30 Trade Balance -$48.5B Medium
Wednesday 8:15 ADP Employment Change 180K Medium
Wednesday 8:30 Productivity-Rev. 1.5% Medium
Wednesday 10:00 Wholesale Inventories -0.1% Medium
Wednesday 10:30 Crude Inventories Low
Thursday 8:30 Export Prices ex-ag. Medium
Thursday 8:30 Import Prices ex-oil Medium
Thursday 8:30 Initial Claims High
Friday 8:30 Nonfarm Payrolls 188K High
Friday 8:30 Unemployment Rate 4.7% High
Friday 8:30
Average Workweek
34.4 Medium
Friday 14:00 Treasury Budget Medium

 

Earning Calendar

 

Symbol Company AM/PM Day
CASY Casey’s General Stores, Inc. PM Monday
THO Thor Industries, Inc. PM Monday
DKS Dick’s Sporting Goods, Inc. AM Tuesday
MOMO Momo Inc. AM Tuesday
NAV Navistar International Corporation AM Tuesday
URBN Urban Outfitters, Inc. PM Tuesday
CIEN Ciena Corporation AM Wednesday
UNFI United Natural Foods, Inc. PM Wednesday
SIG Signet Jewelers Limited AM Thursday
PAY VeriFone Systems, Inc. PM Thursday
FNSR Finisar Corporation PM Thursday
ULTA Ulta Beauty, Inc. PM Thursday
YPF YPF S.A. PM Thursday

 

 9.3.2017

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
AXTA 30.21   AXTA FANG
NKTR 15.61   BITA DOV
PBYI 41.35   PPG CVX
SWKS 97.57   MOMO DVN
        OAS
        SLCA

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.2.2017 AKAO Long Close 16.2.2017 +11.29%
2 2.2.2017 DATA Long Close 6.2.2017 +13.09%
3 7.2.2017 GNC Short Close 9.2.2017 +3.26%
4 9.2.2017 PG Long Close 13.2.2017 -0.63%
5 9.2.2017 ATI Long Close 14.2.2017 +2.42%
6 13.2.2017 STX Long Close 16.2.2017 +1.26%
7 14.2.2017 CXW Long Close 23.2.2017 +4.53%
8 15.2.2017 ZEN Long Close 23.2.2017 +1.60%
9 21.2.2017 AA Long Close 23.2.2017 -1.17%
10 22.2.2017 SCOR Short Close 24.2.2017 +0.78%
11 23.2.2017 NTAP Long Close 8.3.2017 +2.95%
12 27.2.2017 DATA Long Close 1.3.2017 -2.14%
13 6.3.2017 LBTYK Long Open   +1.55%
14 8.3.2017 FTNT Long Open   +1.41%
15            
16            

 Today’s Picks – Swing “New-York Strategy

No.1 –    ARNC

Company Name Arconic 
Entry Point 27.19
Stop Area 26.60
1st Target 27.80
Swing Target 30.69
Avg. Volume 5.47M
Sector Basic Materials | Aluminum
Earning Date
Risk Rate Normal
Risk\Reward Ratio 5.93:1

No.2 – CENX

Company Name Century Aluminum Company
Entry Point 13.51
Stop Area 12.90
1st Target 13.90
Swing Target 16.45
Avg. Volume 2.86
Sector Basic Materials | Aluminum
Earning Date
Risk Rate Normal
Risk\Reward Ratio 5.93:1