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The Market is Squeezing!

Well folks, we hope you haven’t been panic selling the continued drop in equities and following your investment plan to a T - emotional trading is bad trading, so set a stop loss and have a plan! Read on for your daily dose of market commentary and trade recommendations.


"Selfishness is not living your life as you wish to live it. Selfishness is wanting others to live their lives as you wish them to." ~ Oscar Wilde


Market Talk

While the market’s sell-off continues a silver lining can be found in yesterday’s minor rejection of the lower level - this confirms its continuance of trading within the range, albeit on the lower end of the oscillation. Today things are looking to be a little bit brighter in the pre-market as Dow, S&P 500 and Nasdaq futures are trading 54, 63 and 86 bps higher currently. It is likely that the market will continue to trade sideways within this range for the next 5-7 trading sessions before a catalyst pushes it into a new price channel; our money is on that being this upcoming Friday jobs report which we’ll do a deeper dive into later this week.


Long: Rex American Resources (REX-NYSE) | Timeline: 2 Days

Rex American Resources Corp (REX) is an American corn distiller that primarily deals with creating products such as ethanol, distillers grains, and non-food grade corn oil. They reported earnings early this morning, unlike many others in the markets today they have grown revenue and earnings from Q1. Sales came in at $44.6M, or 23% above last quarter’s report, while net income jumped by $5.5M, or over 96% from last quarter’s report. On the technical side, the company is trading above its 50 and 200-day moving averages. This while the MACD and momentum for the company have turned in its favour, resting at .71 and .78 respectively. The company has already experienced an increase in price during pre-market trading, however, we believe that it still has room to run.


Short: Conn's, Inc. (CONN-NASDAQ) | Timeline: 2 days

Conn's, Inc. (CONN-NASDAQ), which operates as a specialty retailer of durable consumer goods and related services in the United States has reported earnings this morning, and they’re quite unfavourable, to say the least as the company missed earnings and revenue estimates by 57.14% and 6.37%, respectively. “While we entered the second quarter with a cautious outlook for the remainder of the fiscal year, the retail environment has continued to deteriorate prompting us to accelerate our efforts to reduce operating costs, and lower capital expenditures as well as continue to maintain conservative credit underwriting,” says CEO Chandra Holt as she struggles to maintain a positive company outlook heading into the latter half of the year. Turning to the chart, it is apparent the CEO’s statement holds true as the company has struggled to breakout above the 100-day MA, and after this quarter’s earnings report, bulls will most likely continue struggling due to bears capitalizing on a quality short opportunity as the stock breaks below its rising wedge.


Chart of the Day: S&P 500 forward P/E vs. Real 10-year UST yield

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