[su_spoiler title=”Monday-Wednesday’s Action: Record Moves Up & Down On Wall Street” style=”fancy”]
U.S. stocks experienced their weakest open in history after Asian markets plunged on continued growth concerns. China’s Shanghai Composite tanked -8.5% overnight which sparked a global sell-off. Before Monday’s open, “fear took over” causing the Dow & S&P 500 futures were “limit-down” which means circuit breakers went off causing them to “stop” trading. Five minutes after the open, the Dow plunged 1,089 points – which was the largest point decline in history- and then immediately rallied almost 900 points – which was the largest intra-day rally in history before closing down over 500 points. This type of exaggerated and manic trading typically occurs during bearish, not bullish. phases. The CBOE Volatility Index (VIX) did not produce any quotes during the first 30 minutes of the session but once quotes resumed the index soared past levels seen during the May 2010 flash crash. The VIX is a great fear gauge because it rallies when the market falls (or when fear is elevated). Stocks gapped higher on Tuesday after China cut interest rates and lowered their reserve requirement to stimulate their markets. The FHFA rose by only 0.2% in June, missing estimates for 0.4%. The S&P Case-Shiller index slid -0.1%, missing estimates for 0.1% gain. The PMI service index came in at 55.2, beating estimates for 54.8. New homes ales rose to 507k, missing estimates for 516k. Year-over-year sales were up a very healthy 26%.Consumer confidence rose to 101.5, beating estimates for 94.0. The Richmond Fed Manufacturing index disappointed with a zero reading, missing estimates for 10. The oversold bounce finally occurred on Wednesday, helping the Dow surge a whopping 619 points to its largest single day rally since the 2008 financial crisis! The rally was attributed to FOMC Vice Chair William Dudley, who said a case for a September rate hike seems less compelling than it was a few weeks ago. Durable goods rose 2%, beating estimates for -0.4%.
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[su_spoiler title=”Thursday-Friday’s Action: Wild Action Continues” style=”fancy”]
Thursday was another volatile session on Wall Street after China intervened again in their markets. Bloomberg reported, “Less than an hour before the close today the Shanghai Composite Index turned negative, dropping almost 1 percent before going on an astonishing rally in the last 45 minutes of trading to finish the session 5.3 percent higher. According to people familiar with the matter, the late-day rally was sparked by Chinese government intervention, which aimed to stabilize the equity market ahead of a military parade on September 3.” Central bankers around the world met in their annual Jackson Hole conference in Wyoming. This year’s conference, titled “Inflation dynamics and monetary policy” will focus on helping increase inflation around the globe. U.S. GDP rose 3.7%, beating estimates for 3.2%. Jobless claims came in at 271k, barely missing estimates for 270k. Pending home sales rose 0.5%, missing estimates for 1%. The Kansas City Fed Manufacturing Index plunged to -9, missing estimates for -4. Stocks were relatively quiet on Friday as investors paused to digest this week’s wild action. Personal income matched estimates for 0.4%. Finally consumer confidence came in 91.9, missing estimates for 93.3.
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[su_spoiler title=”Market Outlook:” style=”fancy”]
20% Of Stocks in the S&P 500 Are Above Their Respective 50 DMA
(Market Tends To Turn When This Reading Gets Above 70% or Below 40%)
Observation: Readings above 70% usually (not always) correspond with a short-term pullback
Conversely, reads below 40% usually (not always) correspond with a short-term bounce
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[su_spoiler title=”FLS Conviction Leaders List” style=”fancy”]
The damage last week was severe. The market is now on the cusp of rolling over and forming a new downtrend. We do not like to buy new stocks during a downtrend and “leadership” changes drastically during a downtrend. This list will be updated to reflect the “changing” landscape over the next few weeks.
- AAPL – HUGE positive reversal last week. More time needed before entry point emerges
- AMZN – Big support week – remains one of the strongest performing stocks in the market
- EA – Plunged and closed below its 50 DMA line last week for the first time since Oct 2014
- FB – HUGE positive reversal last week. 50 DMA line is resistance
- FLT – Big reversal last week closed near upper half of weekly range and near its 200 DMA line
- GOOG – Very large positive reversal last week and remains one of the strongest stocks in the market
- NFLX – Huge positive reversal last week and remains one of the strongest stocks in the market
- SBUX – Extremely large weekly range
- TSLA – Big weekly range. Closed in b/w 200 and 50 dma lines
- UA – Big positive reversal last week and closed above 50 DMA line. Remains a very strong stock
- V – Another wild positive reversal last week. Closed near 50 DMA line and remains strong stock
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[su_spoiler title=”7 New Setups” style=”fancy”]
(We like to be aligned with “BIG” trends. Right now, the big trend is UP – weekly and monthly charts). Once a new downtrend forms – there will more bearish setups)
These hand-picked stocks are carefully selected to help with your idea generation and offer you additional setups each week. The setups are based on our proprietary criteria and offer advanced (dotted line) & classic long and short entry points (solid line). Short patterns are typically mirror images of long patterns.
Note: Please Verify All Earnings Dates/Data from Multiple Sources for Every Stock in all our report(s).
Charts Courtesy of FreeStockCharts.com and/or Stockcharts.com
BWLD: Perched Below Resistance
NFLX: New Early Entry Forming
AMZN: New Early Entry Forming
V: New Early Entry Forming
EXPE: New Early Entry Forming
SKX: New Early Entry Forming
SBUX: New Early Entry Forming
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[su_spoiler title=”Strongest Sectors, Groups, & Symbols” style=”fancy”]
[su_heading style=”modern-1-dark” size=”18″]Strongest Sectors [/su_heading]
[su_heading style=”modern-1-dark” size=”18″]Strongest Groups [/su_heading]
[su_heading style=”modern-1-dark” size=”18″]Strongest Stocks Of The Year[/su_heading]
These are the top 20 strongest performing tickers on a year-to-date basis that are trading over $5, average daily volume over 500k and have a market cap >300M (Small cap-Mega Cap) –pls ignore BETR—
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