The four main indices all lost ground yesterday, but the depth of the losses varied greatly. The Russell was the top performer and only lost 0.04%. The Nasdaq lost 0.28% and the S&P lost 0.4% representing the middle and the Dow got hit hard with a loss of 1.15%. The latest round of tariff proposals had a greater impact on Dow components.
[hana-code-insert name=’adsense-article’ /]Six of the ten main sectors moved lower with the two worst performers being the targets of the latest tariff threats.The industrial sector lost 2.1% and the materials sector lost 1.76%.
The utilities sector led the way with a gain of 1.03% followed by the consumer staples sector with a gain of 0.5%.
My scans shifted a little more toward balanced last night with 20 names on the bullish list and 37 on the bearish list.
The barometer moved up to -22.6 from -29.8.
The barometer hasn’t been in positive territory since June 6.
The trade idea for today is a bearish one for the third straight day. Dish Network (Nasdaq: DISH) appeared on the bearish list last night and the stock has been trending lower for quite some time now. The EPS rating isn’t too bad at 69 and the SMR rating is a C. There just seems to be too much downside momentum right now.
You can see on the chart that the stochastics and 10-day RSI are the highest they have been in the past year and now the stochastics have made a bearish crossover. I marked two instances where the stochastic readings were close to or at overbought levels and then made the bearish cross.
Buy to open the Aug18 35-strike puts on DISH at $3.00 or better. These options expire on August 17. The recent low for the stock was $28.80 and I look for that level to get tested again. I would suggest a target of 100% for the gain and I would use the $35 level as a stop-loss point.
— Rick Pendergraft
[hana-code-insert name=’investorplace-article2′ /]