After a pennant formation resolved itself to the downside last month, it appears that a new pennant formation is forming. While it looked as though the U.S. market was primed for a liftoff with the rest of the planet bouncing, the S&P 500 reversed course intraday and ended up falling back into the pennant range. Closing near the lows of the day, it appears that the U.S. market is now leading the way to the downside. Options traders in particular can thrive in these circumstances. Learn more by clicking here: http://www.optionsuniversity.com
The CBOE Volatility Index (VIX) is largely unchanged from a week ago. While the volatility is higher than it has been for most of the year, it is far off of the recent high brief spike above 50, and seems to be settling into a tighter range. With the Fed meeting happening next week, it is possible that things could get choppy around the announcement about whether or not interest rates will be increased this month. Most experts are pegging the chances at about 30%, but recognize that rate hikes are coming fairly soon regardless.
OVERSEAS: In Asia, every major market has given back at least a portion of the gains from the previous day. After gaining 7.7% yesterday, the Nikkei is down over 2% today. Major Chinese exchanges are down 1-3% as well as previous hopes of the Chinese government taking action to boost the stock market have been replaced with poor economic data and now assurances of a quick fix any time soon. Similarly, European markets are broadly down despite the Bank of England keeping interest rates unchanged.
OIL: The EIA Petroleum Status report will be out later today. Overall, demand is weaker than supply as the summer driving season comes to a close, while global production remains high. Oil prices are down a couple of dollars in the last week to about $44 per barrel.
JOBS: The U.S. weekly jobless claims number came in as forecasted at 275K new claims. This is down somewhat from the previous week (an adjusted 281K claims). Job openings were up strongly in July coming in at 5.7M compared to an expectation of 5.3M. The consensus is that the jobs market continues to improve gradually, and it will be interesting to see how inflation and consumer sentiment numbers perform tomorrow as a result.
BIOTECH INSIDER: After taking several quick two-week gains in the biotech sector, we are hot on the trail of oversold ACADIA Pharmaceuticals (SYMBOL: ACAD). The company just filed its New Drug Application for Parkinson’s disease Psychosis (PDP). According to the National Parkinson Foundation, between four and six million people worldwide suffer from Parkinson’s disease. About 40% suffer from PDP, characterized by hallucinations and delusions. At the moment, there are no other FDA-approved therapies being used to treat PDP issues. If ACAD has its drug approved, it could provide significant profit opportunity. ACAD has also requested Priority Review of NDA, which if granted, would accelerate the review from ten months to just six months. To get access to similar, hot biotech opportunities, visit: http://optionswealthinsiders.com/biotechv2/
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