By Markus Heitkoetter
￼At the beginning of the week everyone was thinking about new all-time highs.
While the NASDAQ was setting records, the S&P was just points away from a record of its own. But over the last 3 trading sessions the bullish momentum has been put on hold. And now traders are wondering if buyers are willing to step in ahead of the weekend.
The big news of the day was Unemployment Claims coming out lower than expected. After 255,000 Americans filed for unemployment last week, Unemployment Claims are at their lowest levels in 40 years (since November 1973)!
Although a record 40 years in the making might sound impressive, it did little to help the stock market. And by day’s end the major indices were all trading lower.
The S&P lost 12 points today. With a close of 2102.15 the S&P dropped .57%. The DOW ended the day with a 119 point loss. The DOW dropped .67% and closed at 17731.95.
The NASDAQ opened strong, but couldn’t hold onto gains. At the end of the day the NASDAQ was down .49%, closing at 5146.41. It was the third consecutive drop since making all-time highs on Monday.
But we did receive positive news late in the afternoon. According to Bloomberg, analysts are expecting “a 5.3% drop in 2nd quarter profits for S&P companies.” But don’t tell that to Amazon (AMZN)! After reporting earnings after the bell, AMZN traded as high as 19% higher. The after hours move was sparked by a surprise 20% jump in revenue.
In addition to tomorrow’s reaction to the AMZN surprise, traders have New Home Sales numbers tomorrow at 10:00am ET to digest.
Crude Oil dropped another .69% and ended the day at $48.85.
With today’s drop we’re seeing media reports claiming that Crude Oil is officially in a bear market. So is it time to sell? Probably not.
For starters, it’s pretty late to get into this trend. A PowerX sell signal was identified on 29th Jun 2015 near the beginning of this push lower. And then there’s lingering support. Although Crude Oil has been in a free fall, traders should keep in mind that Crude Oil might find support at lows of the year.
We believe it’s a little too late to be a seller. But it’s also way to early to be buyer. Instead we’ll keep an eye out for a change of direction according to PowerX Method rules. After a possible change of direction, we can then look for an opportunity in either direction.