In retrospect, Monday’s modest gain may have only been a setup for an even more dramatic tumble on Tuesday. Stoked by fears surrounding a potential impeachment effort, poor PMI numbers for September and calendar-driven profit-taking, the S&P 500’s 1.23% selloff dragged it below some important technical support. The market’s true direction here remains a mystery.
Shares of Charles Schwab (NYSE:SCHW) and TD Ameritrade Holding (NASDAQ:AMTD) led the charge, falling 10% and 26%, respectively, after Schwab announced it would roll-out commission-free online and mobile trading. It’s widely expected its rivals will follow suit. E*trade Financial (NASDAQ:ETFC) took a big hit too, sliding more than 16% lower.
There were a handful of winners, such as Stitch Fix (NASDAQ:SFIX). Shares of the online-stylist advanced a little more than 4% after the company’s fiscal Q4 earnings figure came in better than expected. There just weren’t enough names like SFIX to keep stocks out of the red. The NYSE’s decliners outpaced advancers by three-to-one.
Headed into Wednesday’s session, it’s the stock charts of Twitter (NYSE:TWTR), Synchrony Financial (NYSE:SYF) and Valero Energy (NYSE:VLO) that merit the closest examination as trading prospects. Here’s why.
Synchrony Financial (SYF)
To point out Synchrony Financial took a sizeable loss on Tuesday doesn’t mean a whole lot; most stocks took big hits. The overall market tide spread its carnage around pretty indiscriminately.
But, SYF stock is still worth a closer inspection simply because of the nature and placement of yesterday’s 2.8% setback. It’s the most indicative of bearish possibilities for a handful of different reasons.
Valero Energy (VLO)
A cursory look at Valero Energy shares is a little bit daunting. Although it couldn’t be stopped in 2018 and early 2018, it was pounded into submission late last year. This year’s choppiness hasn’t re-inspired confidence, and investors are especially nervous about energy names right now anyway.
A longer, more thorough look at both stock charts suggests there’s something to this year’s choppiness besides uncertainty though. The volatility is extremely well organized, suggesting there’s a crowd of would-be buyers waiting in the wings to see the official trigger. Other bullish clues have surfaced in the meantime.
Credit has to be given where its due. Before 2017, it wasn’t clear Twitter was going to be able to remain a viable entity on its own. CEO Jack Dorsey found the right chemistry starting in 2017 though, and turned the company — and TWTR stock — around. It wasn’t a straight-line recovery, but it was a recovery nonetheless.
This year’s bullishness has been part of said recovery. It has also been unusually choppy, but that back-and-forth has been polite enough to flesh out some rising support and resistance lines. It’s worth a look at Twitter today simply because the lower edge of the range is about to be tested again, along with another important support line.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley.