Day Traders Diary


The major indices have not acted well in the early-going, cutting through the morass of a flattish open to engage in a trend-down day so far.  The timing of the move is interesting and also somewhat telling.  That is, the weakness comes on the heels of a relatively disappointing rebound effort Wednesday that lost steam as the session wore on and in front of the July Employment Situation Report on Friday.

The latter is being held out as a marker that will give the market a definitive answer with respect to when the FOMC is going to raise the fed funds rate for the first time since June 2006 (i.e. September or later).  We'll have to see if that definitive answer avails itself (look to the trend in average hourly earnings for the clue), yet there has been an inclination today to reduce risk ahead of the report.

Growth stocks are weak on the heels of negative reactions to the latest earnings results and guidance from FitBit (FIT 44.40, -7.24), Tesla (TSLA 242.73, -27.40), and Keurig Green Mountain (GMCR 53.25, -21.73)

Media stocks are getting hammered for the second straight day, unable to escape Disney's (DIS 105.40, -5.13) guidance shadow and as investors find fault with the latest results from the likes of 21st Century Fox (FOXA 28.25, -3.67) and CBS Corp (CBS 48.33, -2.09)

Some air is being let out of the momentum stocks, evidenced by the weakness in the iShares Nasdaq Biotechnology ETF (IBB 371.50, -15.22) and the Nasdaq 100 (QQQ 110.18, -2.07)

Apple (AAPL 114.55, -0.85) is encountering renewed selling interest

24 of the 30 Dow components are trading with a loss; and

The Russell 2000 (-1.2%) is the worst-performing of the major averages

The effort to reduce risk has been accompanied by an effort to seek downside protection as well.  That inclination can be seen in the CBOE Volatility Index (VIX 13.85, +1.34), which is up 11% today.

Notably, in today's retreat the S&P 500 failed to hold the midpoint of the trading range (2088/2086) that has persisted since March, which invited added selling interest.  The next key support level is the 200-day moving average at 2072.

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