IN THE NEWS HIGHLIGHTS:

• Stocks still lower following rumor that Gary Cohn intends to step down as NEC Director; White House says rumor is false.
• Dow components Wal-Mart (WMT) and Cisco Systems(CSCO) slide following earnings.
• Top-weighted information technology sector underperforms amid broad weakness.
• Crude oil rebounds.
• US dollar slightly higher.

RECAP– The markets sold off from the opening bell and continued to do so throughout the day, carrying that momentum into the close. Crude oil bounced back today following early selling. The US dollar also rose slightly after testing resistance of 94 again.

In-depth look of daily news at Briefing.com (CLICK HERE)

In-depth look at after hours movers (CLICK HERE)

Economic Calendar

Today

• August 17: Unemployment Claims – Actual: 232K  Forecast: 240K  Previous: 244K
  • Unemployment claims continue to remain low, beating expectations.

Upcoming Reports

• Nothing major left this week. 

FedWatch September 20 Rate Hike Probability for August 17: 1.4% (View the probability chart here)

A Look At The S&P 500 Chart – KEY Levels

• RSI is below 50.
• On Balance Volume is below its moving average.
• The market sold off today, matching the selloff from last week.
• The market easily broke previous support around 2440 and went as low as 2430. With the large-body candle put in today, it is a sign that the negative momentum was significant and consistent into the close. The next recognizable level of support is at 2400.

A Look Into the Heat Map

The market was very bearish today and the weakness was consistent throughout all sectors.

(click on symbol for chart)
SPX – Bullish
DOW– Bullish
Nasdaq– Bullish
Russell – Bullish

VIX – 15.55

COMMODITIES

Oil (USO) – Bullish – Crude oil is retracing following its previous rally as it has hit resistance of $50.
Ag (DBA) – Bearish
GLD – Bullish
SLV – Bearish

THE DOLLAR

UUP – USD weighted ETF – Bearish

SOLON’S TRADING THOUGHTS

The release of the FOMC meeting minutes did not unveil anything surprising. The Fed is grappling with the lack of inflation despite relatively low unemployment. The other major topic on hand is the Fed proceeding with reduction of their balance which is set to take place in the near future.With the combination of low inflation and balance reduction, it is expected that the Fed will remain somewhat dovish and not raise rates too aggressively.

Volatility spiked late last week. It shows you how the market can turn out of nowhere with volatility reentering the market. As the VIX gets lower with the market recovering, it would make more sense to buy puts again. With support being broken last week, the market can easily sell off again at a moment’s notice. We saw volatility spike again today as the market sold off. Any move back up would be a good time to buy puts and hedge. 

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