On Tuesday, markets opened green, but buyers failed to push beyond the initial open.
As the trading session wore on, stocks declined at a controlled pace.
- Dow Jones -0.5%
- Nasdaq +0.1%
- S&P 500 -0.3%
- Russell 2000 -0.3%
Sector Round Up
Only 3 of the 11 sectors finished the day green.
- Real Estate (XLRE) +0.3%
- Utilities (XLU) +0.3%
- Consumer Discretionary (XLY) +0.2%
At the bottom…
- Consumer Staples (XLP) -0.6%
- Energy (XLE) -0.8%
- Financials (XLF) -0.9%
Retailers Macy’s (M) and Dick’s (DKS) reported lousy earnings and their share prices tumbled -14% and -24%, respectively. The retailers face challenges, including…
- Theft, aka “shrink”
- Increasing late credit card payments
- Inflation weighing on consumer’s budget
At the end of Tuesday’s session, the retailers lost $550 million and $3 billion in market cap, respectively.
Electronics component producer Fabrinet (FN) soared 32% to close at its highest level ever yesterday.
- The company’s earnings beat estimates
- Analysts raised price targets
- Barron’s suggested its surge was riding the AI theme
- Tuesday’s gains added more than $1 billion in market cap
Just because the bears managed a small victory on Tuesday doesn’t mean they’ve taken control.
Overall conditions in the market don’t warrant and change in outlook. We remain bullish but expect seasonal weakness to continue through September.
Your latest readout…
- The VIX remains low, that’s bullish
- RSI levels, the Dow Jones and Russell 2000 are oversold, also bullish
- The put-to-call ratio is neutral
Historically speaking, August is not the best time to buy stocks.
We booked profits in the late July rally. We are looking for buying opportunities in late September and October.
For now, we are in wait-and-see mode.
*RETO support at $6
*HKIT on watch
*GCT support at $12
*TSAT support at $18
*GAMB support at $13
*GROV support at $3
*ACIS (formerly UIHC) support at $7
GRPN support at $10, resistance at $12
EYPT support at $14
AAOI support at $14, resistance at $16
PFIE support at $2
EZGO support at $2.25, resistance at $2.75
ESTE on watch
ACHR support at $7
VFS support at $35