Despite a double-devaluation of the Chinese Yuan, the market mounted a sharp and surprising comeback on Wednesday afternoon, and stocks ended the day in positive territory. This Thursday morning, however, the market failed to gain any traction, and is now drifting listlessly back down. All of this movement, it should be pointed out, is taking place well within the confines of the relatively narrow trading range the market has been in all year.
One likely culprit for the failure of the rally is the price of oil. WTI crude is now down to $42.59 – a fresh five year low. Tesla (TSLA) confirmed rumors today by announcing that it would raise $500 million through a secondary stock offering. Even after a recent price fall, that still amounts to a dilution of less than five percent.
At present, stocks are down. The S&P 500 is down 0.29%, the DJIA is down 0.30% and the NASDAQ is down 0.26%.
Here are your Thursday morning market metrics. The industries showing strength today Communications Equipment, Specialty Retail and Airlines. The industries showing weakness today are Energy Equipment & Services, Metals & Mining and Real Estate Investment Trusts (REITs).
The VIX is up 3.97% to 14.23 after closing yesterday at 13.61. The most active options this morning is Energy Select Sector SPDR ETF (XLE) with 8,566 September-30 expiring $64 puts changing hands. The total put-call volume ratio is 1.08 (273,074/253,194). NYSE Adv/Dec 849/2,057. NASDAQ Adv/Dec 986/1,368.
Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can follow Julian’s daily hedged options trades and his unfolding market commentary via twitter: @JulianClose_MIC.