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Stocks Rebound Enough to Snap Losing Skid

Jim Giaquinto

It wasn’t the strong rebound we would’ve liked after such a rough week, but two of the major indices still managed to end four consecutive days of losses on Monday.

The NASDAQ advanced 0.27% today to 7924.2 after failing to close in the green at all last week. It was a small dent against a loss of 2.6% in the previous four sessions, but it did break the downward momentum.

The S&P was dealing with the same losing skid though it “only” slipped by 1% last week. On Monday, it was up 0.19% to 2877.1, marking another welcomed yet lackluster response.

Unlike its counterparts, the Dow was able to close in the green a couple times during this four-day malaise. On Friday though, it had the steepest loss of the Big 3 and today it slipped by another 0.23% to 25,857.1.

Hopefully, this most recent “tech wreck” has been played out and will prove to be as overblown as the last one. It began when higher-ups at Twitter and Facebook were grilled by Congress on a number of issues that have skittish investors worried about increased regulation or changing business models. We’ll see if tech can build on today as we move through the week.

"We broke the streak of negativity for the NASDAQ today but it wasn’t enough to break the rest of the market out of a very narrow trading range. I expect tomorrow to bring with it more volume and hopefully an extension of the gains on the NASDAQ," said Dave Bartosiak in Momentum Trader and Surprise Trader.

The Dow’s big concern, though, is trade…and that’s not likely to end anytime soon. The situations are pretty much the same as they were on Friday. We’re still waiting for Canada to join the U.S.-Mexico agreement. Then there’s the $200 billion worth of new tariffs on Chinese goods that could be implemented anytime now with another $267 billion on deck and “ready to go on short notice”. We’ve also been hearing about an upcoming trade fight with Japan.

Today's Portfolio Highlights:

Value Investor: Despite all the nail-biting in the market and the media, Tracey feels that trade war fears are overdone with many manufacturers. Therefore, she had no problem adding Atkore International (ATKR), which makes and distributes electrical raceway products for the non-residential construction market. Last month, the company reported a solid third quarter and now earnings are expected to grow 92.3% in fiscal 2018. It’s also one of the rare Zacks Rank #1s (Strong Buys) that have straight As in the Zacks Style Scores of Value, Momentum and Growth. And of course, ATKR is undervalued. The editor likes gaining some exposure to industrials and is willing to be patient by riding out the trade jitters with this name. Read the complete commentary for a lot more on this new pick.

Technology Innovators: On September 5, e-signature solutions provider DocuSign (DOCU) reported a solid beat and raise quarter. However, the market wasn’t very impressed, and the stock has slipped below $60. Brian Bolan sees a buying opportunity in this name, so he added it to the portfolio on Monday. Read more in the complete commentary and be ready for another buy on Thursday.

Black Box Trader: Half of the portfolio’s positions were replaced in this week’s adjustment. The stocks that were sold included:

• Turtle Beach Corp. (HEAR, +5.9%)
• SeaWorld Entertainment (SEAS,+2.9%)
• Angie's List Inc (ANGI, +1.3%)
• NOW Inc.(DNOW)
• Guess? Inc. (GES)

The new buys that replaced names were:

• 3D Systems (DDD)
• American Outdoor Brands (AOBC)
• CF Industries Holdings (CF)
• Cigna Corp. (CI)
• OGE Energy (OGE)

Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Counterstrike: "Last Friday I was a bit nervous what might come over the weekend. There was the possibility for more tariffs on China and then a China retaliation. Because of this an impending gap down was possible. If that scenario played out it would really hurt any long positions. So, we trimmed and raised some cash in anticipation we might get lower prices.

"However, there were no tariffs. In fact, it was a pretty quiet weekend that brought very little news to impact stocks. No news was interpreted as good news, as futures gapped higher last night and held on to gains until the open.

"When the bell rang in New York, stocks couldn’t hold onto gains. Weakness was led by tech as big stocks like Amazon and Apple traded lower. Indices still finished in the green, with the S&P up 0.19% and the Nasdaq up 0.24%."
-- Jeremy Mullin 

Zacks Confidential: Despite some recent hiccups, technology is still the hottest space in the market. And one of the most innovative areas under that umbrella is called FinTech (a.k.a. Financial Technology). This has to do with things like digital payments, marketplace lending, and blockchain. Neena Mishra knows all about the space and how to profit from it, which is why Kevin asked her to take over this week’s Zacks Confidential. Learn what fintech is all about and get an ETF and a couple stocks that will help you capitalize on this growing trend: Here’s Why You Should Invest in FinTech Stocks and ETFs. 

All the Best,
Jim Giaquinto

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