Dow Suffers Its First Three-Day Losing Streak Since December

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"What started off as a promising bounce was devoured by the bears," quipped Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "There really wasn't a lot of news that sparked the selling, just a steady lack of buyers as the day progressed." Over is the Dow Jones Industrial Average's (DJI) record-setting streak of sessions without three consecutive losing days, as it surrendered 127 points to close just shy of the 15,000 level.

Continue reading for more on today's market, including :

  • Schaeffer's Senior Trading Analyst Bryan Sapp shares what he expects to see if " last week's lows [on the S&P 500] give way."
  • Hewlett-Packard ( HPQ ) options pits were a popular destination -- for bulls and bears -- following optimistic comments from CEO Meg Whitman concerning future revenue growth.
  • QUALCOMM, Inc. ( QCOM ) option bulls continue to strategize, even as the stock violates technical support .
plus...
    The "fear barometer" hits a multi-month high, early adopters of Apple ( AAPL ) bonds learn some unpleasant news, and Texas Instruments ( TXN ) bears bet against earnings.

The Dow Jones Industrial Average (DJI) dropped 126.8 points, or 0.8%, to close at 14,995.23. The move not only put the index south of the psychologically important 15,000 barrier, but below its 40-day moving average as well, which has been breached just twice on a daily closing basis in 2013. Four of the Dow's 30 components managed to close in positive territory, with Hewlett-Packard ( HPQ ) leading the charge, up 2.8%. Bringing up the rear was American Express ( AXP ), which dropped 2.4% to come in last among the 26 declining issues.

The S&P 500 Index (SPX) was also down 0.8%, shedding 13.6 points to close at 1,612.52. The Nasdaq Composite (COMP) held above its 40-day moving average by a hair, but still gave back 36.5 points, or 1.1%, to settle at 3,400.43. So far this week, the COMP is the worst performer among the major indexes, down nearly 2%.


The CBOE Market Volatility Index (VIX) , meanwhile, has surged nearly 23% during the last three days, tacking on an additional 8.9%, or 1.5 points, in today's trading. The VIX closed at 18.59 after hitting the 18.60 mark intraday -- its highest level since late February.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Another streak bites the dust," noted Detrick. "This time, the Dow finally dropped three straight days. It hadn't happened in all of 2013, and the streak made it up to a record 112 days. The previous record was 95 days back in 1935. Is the 'buy the dip' mentality that has worked so well finally ending? This trend -- coupled with the nice, big, round 1,000 level on the Russell 2000 Index (RUT) acting as huge resistance -- means the 'June Chop' theory is playing out nicely so far this month ... and just might continue."

3 Things to Know About Today's Market :

  • Eyes were turned to global issues today , as the German government implored its highest court to dismiss charges that the European Central Bank's bond-buying program is a violation of existing directives. Elsewhere, the situation in Turkey became more frenzied, even as the Prime Minister agreed to speak with protestors. (NBC News)
  • Despite the unbridled enthusiasm at launch time, bonds issued by Apple Inc. ( AAPL ) have lost 9% during their first six weeks. The pullback can be attributed to a sell-off in the corporate bond space, as interest rates have zoomed higher. (Financial Times, login required)
  • For the first time in a month, the number of new mortgage applications rose on a week-over-week basis. This coincided with another increase in the 30-year fixed mortgage rate, which hit an average of 4.15%, or 8 basis points higher than the previous week. Mortgage rates have jumped 56 basis points in the past six weeks. (CNBC)

5 Stocks We Were Watching Today :

  1. Dendreon Corporation (DNDN) remained a favorite among bearish speculators.
  2. Put buyers targeted Texas Instruments ( TXN ) , in the wake of the company's revised second-quarter earnings forecast.
  3. Zynga Inc (ZNGA) was a favorite among covered call traders, who expect short-term resistance at the $3 level.
  4. Baird lifted its 12-month price target for Tesla Motors (TSLA) by a hefty margin this morning, as the stock has more than tripled in value during the past year.
  5. Cisco Systems (CSCO) option traders sold intermediate-term, out-of-the-money calls.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude oil muscled higher today against a mixed backdrop of news, including reports of an increase in weekly stockpiles and estimates for rising demand (but falling consumption) in China. By the close, July-dated oil was up 50 cents, or 0.5%, at $95.88 per barrel.

Gold futures were also higher today, paring earlier losses as traders looked to the safe-haven appeal of the yellow metal. Gold for August delivery settled up $15, or 1.1%, to end the session at $1,392 per ounce, bouncing back from an intraday nadir of $1372.20.

SCHAEFFER'S MARKET POSTURE



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: AAPL , AXP , HPQ , QCOM , TXN

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