The put/call ratio is overbought and there’s divergence and fragmentation in the market and major sectors. So stocks could move lower before rising again, which is why I picked out four short opportunities to trade this market environment — and more in Friday’s stock market recap.
Stock Market Recap
In this stock market recap, global stocks are mixed as the U.S. reported weak jobs data for August.
The economy added 235,000 jobs in August — a huge miss compared to the 740,000 expected. The delta variant was likely the biggest factor in this drop. The unemployment rate, however, hit the consensus mark of 5.4%. A strong jobs environment is one of the Federal Reserve’s biggest considerations for bond tapering.
Keep your eye on the Consumer Discretionary and Financials sectors. Financial stocks could continue the upward trend and break out even higher because of potentially higher interest rates in the near future. With divergence in the market, we could see a pullback. The Financials sector could move higher even if we see stocks cool down. The Consumer Discretionary sector, however, would not be able to do the same.
Roger’s Radar: 4 Short Trades Ahead of a Pullback
Trinseo S.A. (NYSE: TSE) is a global materials company with business primarily in plastics, latex and synthetic rubber. The 50-day moving average is below its 200-day MA and TSE could continue dropping to the $43 level.
All four companies are set up like our usual pullback stocks, but even further to the downside.
Two other stocks on my radar are involved in the Energy sector, specifically solar panels. One of the two manufactures materials used in the panels. The fourth stock provides cloud-based digital banking solutions.
In this video, you’ll learn which sector is ready to break out… which sector is breaking down… an update on the put/call ratio… an update on major Fed data… and four short trade set-ups for a choppy market.
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Check back each morning for Roger’s Radar and the most important news and numbers in the WealthPress stock market recap.