S&P 500 Now in Longest Losing Streak of the Year

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"Another day, and more selling," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "The S&P 500 Index (SPX) is now down five straight days, the longest losing streak in 2013, matching the streak that coincided with the fiscal cliff drama in late December. Afternoon concerns over Wal-Mart ( WMT ) cutting orders sparked some weakness. Although WMT said this report was erroneous, the shares still closed 1.5% lower." Adding insult to injury, the Dow Jones Industrial Average (DJI) also finished in negative territory, marking its own five-day losing streak.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp opines that, despite today's choppy price action, "the bulls are still in control" for the long term.
  • In his Chart of the Day column, Schaeffer's Senior Options Strategist Tony Venosa, CMT, forecasts a move lower for Peabody Energy ( BTU ).
  • This popular Internet stock's surge higher sparked a flurry of bullish betting , with traders wagering on new annual highs by week's end.
plus...
    New home sales surged in August, bloated inventory rumors plagued Wal-Mart ( WMT ), and Facebook's ( FB ) bullish brokerage notes lured call players to the options pits.

The Dow Jones Industrial Average (DJI - 15,273.26) spent most of the day in the red, touching a session low of 15,253.16 just before 2:00 p.m. ET. By the closing bell, the index was down 61.3 points, or 0.4% -- bringing its losing streak to five days. JPMorgan Chase ( JPM ) led the blue-chip bellwether's six advancers with a gain of 2.7%, while Wal-Mart ( WMT ) paced the 22 decliners with a loss of 1.5%. Intel ( INTC ) and DuPont (DD) remained unchanged.

The S&P 500 Index (SPX - 1,692.77) was also parked in negative territory for much of the session, although it touched an intraday high of 1,701.71 around noon. Nevertheless, the index was back in the red by the close, finishing 4.7 points, or 0.3%, lower -- marking its longest losing streak since late December. Meanwhile, the Nasdaq Composite (COMP - 3,761.10) shed 7.2 points, or 0.2%.

Elsewhere, the CBOE Market Volatility Index (VIX - 14.01) started the day off higher, but ended the session with a loss of 0.1 point, or 0.5%. The "fear barometer" is on pace to finish a third consecutive week below its 20-week moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Small-caps continue to hold up very well," Detrick noted. "Even financials, which had been lagging by a wide margin, bounced some today. Nonetheless, with all the uncertainty that is swirling around the upcoming Washington budget drama, traders are clearly treading lightly here."

3 Things to Know About Today's Market :

  • The Commerce Department said new home sales climbed by 7.9% in August -- marking their fastest growth rate since the start of 2013, and a welcome change from July's decline. The latest figure also fell roughly in line with the consensus view. On a year-over-year basis, new home sales rose 12.6%. (MarketWatch)
  • Meanwhile, a separate report showed that durable goods orders unexpectedly increased by 0.1% in August, after declining for the past two months. Breaking down the numbers further, orders for core durable goods rose 1.5%. However, excluding transportation, new orders edged 0.1% lower. (Reuters)
  • Wal-Mart ( WMT ) took center stage today, amid news that the retailer is cutting U.S. orders in an effort to reduce inventory. The buzz started circulating after several suppliers claimed they received emails describing the inventory reductions from an ordering manager in Arkansas. However, a spokesperson for WMT said the report is "misleading" and "completely false." (CNBC)

5 Stocks We Were Watching Today :

  1. Some upbeat analyst attention triggered a mix of call buying and selling in Facebook's ( FB ) option pits.
  2. J.C. Penney's (JCP) notable tumble attracted a slew of longer-term, bearish speculators.
  3. A news-induced price surge for Molycorp (MCP) prompted traders to scoop up weekly calls.
  4. Applied Materials (AMAT) option bulls wagered on new highs following yesterday's well-received M&A news.
  5. Following an early morning price-target hike, Tesla Motors (TSLA) options players sold-to-open weekly puts.

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 futures fell for a fifth consecutive session, as an unexpected rise in oil supplies pushed prices lower. By the time the dust settled, November-dated crude shaved off 47 cents, or 0.5%, to end at $102.66 per barrel -- marking the lowest close for a front-month contract in nearly three months.

Conversely, gold futures snapped their losing streak, as uncertainty in Washington lured investors to the malleable metal. Gold for December delivery added $19.90, or 1.5%, to finish at $1,336.20 an ounce.

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.

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


This article appears in: Investing , Options

Referenced Stocks: BTU , FB , INTC , JPM , WMT

Schaeffer's Investment Research

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