The indices alls started the day slightly in the black on Tuesday, but all of them moved in to the red pretty early in the session. At a press conference President Trump seemed to up the ante with the trade war and that caused the selling to accelerate during the middle of the session. By the end of the day all four of the main indices saw sizable losses.
The Russell suffered the worst loss at 1.58% and it was followed closely by the Nasdaq which lost 1.46%. The S&P fell 0.84% and the Dow experienced the smallest loss at 0.53%.
[hana-code-insert name=’adsense-article’ /]Eight of the 1o sectors fell on the day with the defensive sectors being the lone gainers.The utilities sector gained 1.17% on the day while consumer staples moved up 0.41%.
As for the downside, the energy sector fell 1.58% as the worst performer.
The communication services sector dropped 1.50% and the consumer discretionary sector fell 1.07%.
Those were the only three that dropped more than 1.0%.
My scans turned a little more negative on Tuesday with 33 names on the bearish list and four on the bullish side.
After three straight readings in the -13 range, the barometer fell to a reading of -19.6 on Tuesday.
With the overwhelming number of signals coming from the bearish side, I have a bearish trade idea for you today and it is a little unorthodox. The company is AbbVie (NYSE: ABBV) and it has some pretty solid fundamental ratings with an EPS rating of 94 and an SMR rating of an A.
While it was the daily indicators that put the stock on my radar, it was the weekly chart that stood out the most. The stock has been trending lower for a year and a half now and a trend channel has formed. The stock is hitting the upper rail at this time and the 52-week is looming just overhead as a second layer of resistance.
Buy to open the November 75-strike puts on ABBV at $4.50 or better. These options expire on November 15. In order for these options to double the stock will need drop to $66.00. The low in August was well below this target level. I suggest a target gain of 100% with a stop loss at $75.25.
— Rick Pendergraft
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