The Market's Tuesday Luck Fades, as Sellers Take the Reins

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"The unbelievable streak of positive Tuesdays is over," sighed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "After 20 consecutive positive Tuesdays, the Dow Jones Industrial Average (DJI) finished lower today, as late-day selling overwhelmed early buyers." This had been the longest streak of its kind since at least 1900.

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

plus...
    Fed worries continue, Amazon.com ( AMZN ) plans for world domination, and Zynga ( ZNGA ) gets kicked when it's down.

The streak of winning Tuesdays in the Dow Jones Industrial Average (DJI) had to end at some point, and that point was today. After trading in positive territory for the first hour of the day, the index fell solidly below the breakeven point in mid-afternoon trading, closing with a loss of 76.5 points, down 0.5% at 15,177.54.

The S&P 500 Index (SPX) , also dropped, giving back 9 points, or 0.6%, to 1,631.38 after an intraday rejection from its 10-day moving average. The index ended the day a hair above Friday's closing level. The Nasdaq Composite (COMP) , meanwhile, surrendered 20.1 points, or 0.6%, to settle at 3,445.26. This was the lowest closing point for the tech-laden index since May 13.

Following a fractional close lower on Monday, the CBOE Market Volatility Index (VIX) posted a minor drop again today. At the close, the fear barometer was off less than 0.1 point, or 0.1%, at 16.27. Intraday, the VIX peaked at 17.25.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Early market action was relatively strong today, but selling pressure took over in early afternoon trading, and most sectors finished in the red," noted Bell. "Although small- and mid-caps suffered the brunt of the damage, the selling seemed rather widespread. Meanwhile, some money flowed toward the Treasurys market, as many traders await the employment report this Friday."

3 Things to Know About Today's Market :

  • The U.S. trade deficit widened to $40.3 billion in April -- an increase of 8.5% from March -- as imports rose by 2.4% while exports increased by a smaller 1.2%. (USA Today)
  • Esther George -- president of Kansas City's Federal Reserve Bank -- reiterated her concerns about the central bank's quantitative easing efforts, noting her desire to taper "the pace of asset purchases as an appropriate next step for monetary policy." A vocal hawk, Ms. George was the sole dissenter of bond-buying activities at this year's first three Fed meetings. (The Wall Street Journal)
  • Amazon.com ( AMZN ) is set to assert its position in the grocery business , with plans to expand delivery of perishable items beyond its Seattle headquarters. For half a decade, the retailing giant has been testing the local fulfillment of groceries such as fresh produce and meat. (Reuters)

5 Stocks We Were Watching Today :

  1. In the wake of downsizing news , Zynga Inc ( ZNGA ) endured a price-target cut from Piper Jaffray.
  2. Call buyers think Toyota Motor Corporation ( TM ) is bound for new multi-year highs .
  3. Short-term Tesla Motors ( TSLA ) call sellers were eying potential resistance at the 100 strike .
  4. Coca-Cola ( KO ) option bears were thirsty for long-term, out-of-the-money puts.
  5. Level 3 Communications (LVLT) put sellers wagered on round-number support .

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 :

Oil was little changed on Tuesday, as investors waited on the sidelines ahead of Wednesday's inventories report. By the close, July-dated crude had slipped 14 cents, or 0.2%, to end the session at $93.31 per barrel.

Gold futures again violated the $1,400 mark, after finishing north of this psychologically significant threshold on Monday. Gold for August delivery was down $14.70 today, dropping 1% to settle at $1,397.20 an ounce. One analyst with Wescott Financial opined that, "there is no strong reason to buy or sell [gold]" in the short term.

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: AMZN , KO , TM , TSLA , ZNGA

Schaeffer's Investment Research

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