All four of the indices moved lower on Monday as the trade dispute between the U.S. and China heated up once again. The Nasdaq was the worst performer with a loss of 1.43% and it was followed by the Russell with a loss of 1.06%. The S&P lost 0.56% and the Dow was the best performer with a loss of 0.35%.
Despite the overwhelming bearish performances from the indices, the sectors were evenly split with five moving higher and five moving lower. The materials sector was the top performer with a gain of 0.4%. The consumer staples sector was the second best performer with a gain of 0.37%.
[hana-code-insert name=’adsense-article’ /]The tech sector was the worst performer with a loss of 1.25% and it was followed by the consumer discretionary sector with a loss of 1.24%.Those were the only two sectors that lost more than one percent.
The scans were bearishly skewed for a second straight night and that was enough to push the barometer back in to negative territory.
There were 38 names on the bearish list and 14 names on the bullish list.
The barometer dropped from 23.6 to -0.9 as a result of the bearish skew.
The one stock that stood out the most was from the bearish list and it is one that we have played before. Altice USA (NYSE: ATUS) appeared on the bearish list again as it did on July 12. The company’s fundamentals are pretty bad with an EPS rating of 24 and an SMR rating of an E.
The chart shows how the stock has struggled at the $19.25 level before turning lower on three prior occasions in the last seven months. We also see that the stochastic readings have been in overbought territory and made a bearish crossover in each of those instances.
Buy to open the October $20-strike puts on ATUS at $1.40 or better. These options expire on October 19. These options will double if the stock drops to $17.20 and that is above the $16.50 level that seems to be the key support level. I suggest a target of 100% and a stop at $19.50.
— Rick Pendergraft
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