January 30,2018.
Monday was the first real day of declines for 2018. And yesterday, was the second! Two straight days of losses, a development that we hadn’t seen since December 19-20. If we dig a little deeper, it was the first time since November 1st -2nd that we saw two straight days of losses of over 0.5% per day. Yesterday, it was also the first time that the S&P 500 recorded a decline of over 1% since August 17, 2017.
In the meantime, the VIX rose yesterday by 11.4% to the 15.42 point level; something very interesting is happening on the VIX. Up until last Friday, the market had risen on a beeline. But, very interestingly, and in atypical fashion, the VIX also rose. In effect, since the beginning of the year, the VIX recorded gains on 13 of 20 trading days.
So, why exactly did we see a selloff yesterday right in the midst of what would seem like a stellar earnings season?!
Some would point to the rise in bond yields but the answer is much more elementary. Isaac Newton taught us that what goes up must eventually go down. And if we’re already talking about Newton, go no further than the stock of Apple (AAPL) which was beaten to a pulp because of concerns about demand for the iPhone X. Apple will be reporting tomorrow, investors far and wide looking for clarification about the reported downtick in sales of the newest iPhone model. Apple also responded yesterday to news that the Justice Dept. and the SEC were investigating the company’s announcement that it had slowed down older iPhone models. Apple ended off 0.6%.
Daily Summary: The Dow Jones fell 1.37%, the S&P 500 shedding 1.09%, the NASDAQ retreating 0.86%.
One of the stocks that stood out in yesterday’s trading was MetLife (MET), which fell 8.6%, recording the worst performance on the S&P 500, after the news release that the SEC was investigating the insurance company for not making adequate pension payments to cover insurees who had relocated or switched jobs.
Volumes yesterday came to 8.1 billion shares on U.S. exchanges, compared to the 7.1 billion average over the last 20 trading days.
Wednesday: The biggest enemy for the stock market this week was the bond market and the uptick in yields there. There are now three events that could push interest rates higher over the next 24 hours.
First-off, Donald Trump’s State of the Union Address. Secondly, the announcement on the part of the U.S. Treasury about governmental bond issues and their respective size, and lastly, the Fed meeting, which ends today at 14:00 with a policy announcement.
One of Donald Trump’s plans for funding the large infrastructure package he promised was employing governmental bonds. In effect, the U.S. government is expected to double its bond issues this year to almost $1 trillion – and that’s the factor weighing on bond prices, which move inversely to yields.
| Index | Last | Daily change | |
| DJX | 26,077 | (1.37%) | Down |
| SPX | 2,822 | (1.09%) | Down |
| NASDAQ | 7,402 | (0.86%) | Down |
Wednesday’s Hot Stocks: AMD, EA, ILMN, JNPR, SYK, BA, CHKP, WRK, XRX
IPOs: None
Have a great trading day!
Economic Calendar
| ||||
| DAY | TIME (EST) | Event | Forecast | Impact |
| Tuesday | 9:00 | S&P Corelogic Case-Shiller | 0.6 % | Medium |
| Tuesday | 10:00 | Consumer Confidence | 123.4 | High |
| Wednesday | 8:15 | ADP Employment Report | 195,000 | High |
| Wednesday | 9:45 | Chicago PMI | 64.0 | Medium |
| Wednesday | 10:00 | Pending Home Sales Index | 0.4 % | Medium |
| Wednesday | 10:30 | Oil Inventories | -1.1 M barrels | Low |
| Wednesday | 14:00 | FOMC Meeting Announcement | 1.375 % | High |
| Thursday | 8:30 | Jobless Claims | 235 K | Medium |
| Thursday | 9:45 | PMI Manufacturing Index | 55.5 | Medium |
| Thursday | 10:00 | ISM Mfg Index | 58.7 | High |
| Thursday | 10:00 | Construction Spending | 0.5 % | Medium |
| Friday | 8:30 | Nonfarm Payrolls | 176,000 | High |
| Friday | 8:30 | Unemployment Rate | 4.1 % | High |
| Friday | 8:30 | Average Hourly Earnings | 0.3% | High |
| Friday | 10:00 | Consumer Sentiment | 95.0 | High |
| Friday | 10:00 | Factory Orders | 1.5 % | Medium |
Today’s Picks – Day Trading!
| Symbol | Breakout | Breakdown | Momentum | Momentum |
| PF | 63 | NTCT | BEN | |
| PCG | 41.61 | AMBA | VMW | |
| X | ||||
| WBA |
New York Strategy Swing
| # | Date | Stock | Long\ Short | Statues | Data Close | Profit\ Loss |
| 1 | 3.11.2017 | AKAM | Long | Close | 8.11.2017 | +1.37% |
| 2 | 10.11.2017 | JUNO | Long | Close | 14.11.2017 | +1.26% |
| 3 | 16.11.2017 | FLR | Long | Close | 25.11.2017 | +2.16% |
| 4 | 6.12.2017 | SPLK | Long | Close | 8.12.2017 | +1.51% |
| 5 | 11.12.2017 | NKTR | Long | Close | 2.1.2017 | +4.57% |
| 6 | 18.12.2017 | SYY | Long | Close | 19.12.2017 | +0.14% |
| 7 | 3.1.2018 | VOYA | Long | Close | 8.1.2017 | +0.67% |
| 8 | 4.1.2018 | TER | Long | Close | 10.1.2017 | +0.45% |
| 9 | 9.1.2018 | SCG | Long | Close | 10.1.2017 | -3.35% |
| 10 | 11.1.2018 | CREE | Long | Close | 16.1.2018 | +1.84% |
| 11 | 11.1.2018 | CF | Long | Close | 16.1.2018 | +1.66% |
| 12 | 18.1.2018 | MARK | Long | Close | 22.1.2018 | -0.67% |
Today’s Picks – Swing “New-York Strategy”
No.1 – PUMP
| Company Name | ProPetro Holding |
| Entry Point | 19.54 |
| Stop Area | 18.95 |
| 1st Target | 19.95 |
| Swing Target | 22.88 |
| Avg. Volume | 1.97M |
| Sector | Basic Materials | Oil & Gas Equipment & Services |
| Earning Date | 7 Feb |
| Risk Rate | Low |
| Risk\Reward Ratio | 5.66:1 |
Risk Rates: Normal – Regular size, High –Consider reducing size, Low – Consider increasing size