The indices ended their winning streak on Tuesday as all four lost ground on the day. For the S&P it snapped a seven-day winning streak. The Nasdaq took the biggest hit with a loss of 1.69% and it was the only one that lost more than 1.0%.
The S&P fell 0.80%, the Russell dropped 0.60%, and the Dow declined 0.38%.
Eight of the 10 sectors declined on the day with the utilities sector suffering the biggest loss at 2.16%.The tech sector fell 1.8% and the communication services sector dropped 1.49%. Those were the only three sectors that lost more than 1.0%.
The financial sector gained 1.16% and the industrial sector moved up 0.53% as the only two sectors to gain ground on the day.
My scans turned even more bearish last night with 82 bearish signals and only five bullish signals.
The barometer dropped to -54.6 from -34.3 once these results were added in to the equation.
There were a number of bearish trade ideas that I liked from last night’s list, but I feel like the one that is set up the best is on KAR Auction Services (NYSE: KAR). The company scores very low on its fundamental ratings with a 19 on the EPS rating system and a D on the SMR grading scale.
The stock peaked at $17.58 back in June and it has struggled at that same level over the last four days. The stock turned lower the last two days and it looks like it is headed lower again. The 10-day RSI was recently above the 80 level and that is the highest it has been in the past year. The stochastic indicators have been in oversold territory for several weeks now.
Buy to open the October 17.50-strike puts on KAR at $3.60 or better. These options expire on October 16. I suggest a target gain of 100% and that means the stock will need to drop to $12.80. The stock bottomed at $12.68 in July, so it won’t have to break that low to hit our target. I suggest a stop at $18.10.
— Rick Pendergraft
Legendary Stockpicker: "Buy this A.I. stock NOW" [sponsor]His award-winning system pinpointed NVDA and META before both stocks doubled. Now it's flashing "BUY" on this under-the-radar A.I. stock. MORE HERE...