Dow Suffers Its First Three-Day Losing Streak Since December


Shutterstock photo

"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 .
    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.



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.


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



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.


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

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing , Options
More Headlines for: AAPL , AXP , HPQ , QCOM , TXN

More from Schaeffer's Investment Research


Schaeffer's Investment Research

Schaeffer's Investment Research

Market News
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by