Dow Stands Alone as Tech Takes a Break

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The Dow finally broke through yesterday after lagging the NASDAQ for several sessions, and today it was the brightest spot in the market after the surging tech space took a breather.

The index climbed 0.38% on Thursday (or about 95 points) to 25,241.4, adding onto yesterday’s 1.4% jump on the back of the big banks. The Dow was the only major index to finish on the positive side today.

A surging tech sector gave the NASDAQ three straight all-time highs. But the behemoths that led the rally took a break today, including Netflix (-1.65%), Microsoft (-1.57%), Amazon (-0.38%) and Apple (-0.27%). As a result, the streak ended with a slip of 0.70% to 7635.1. The S&P was off -0.07% to 2770.4.

Even the small-cap Russell 2000, which also made new highs the past three days, pulled back 0.49% to 1667.8.

"The tech bellwethers which had been leading the market higher for the last couple of weeks were the ones who got hit the hardest," said Dave Bartosiak, editor of Surprise Trader, Momentum Trader and Blockchain Innovators. "I’m not overly concerned with the selling today. The market has been red hot for the tech stocks lately, a pause for the cause is welcome."

In addition to the runup, stocks are also a bit nervous about the G7 summit starting tomorrow in Canada. President Trump has shaken the world (and the market) with his tariffs, and the other six members are planning to confront him.

Hopefully, nothing geopolitically or domestically will threaten what is shaping up to be a solid week for the market. Heading into tomorrow’s session, the Dow is up more than 2% and the S&P and NASDAQ are each up 1% or more.

In the portfolios, Insider Trader saw the busiest single day in its history, selling six names and buying five amid a flurry of insider buying. Meanwhile, Momentum Trader and Income Investor also added. Learn all about the moves below:

Today's Portfolio Highlights: 

Momentum Trader: The portfolio really thrives in a “buy high, sell higher” type of market, according to Dave. That’s the idea behind today’s addition of Tilly’s (TLYS), a specialty retailer in the action sports industry that has been surging since its last earnings report. This small cap is part of a space in the top 29% of the Zacks Industry Rank, as the retail sector has been bouncing back. The editor wants to ride this momentum so he added it on Thursday with the portfolio’s remaining cash. Read more in the full write up.

Insider Trader: The insiders are BULLISH! How bullish? They’re so bullish that this portfolio had the largest single day group of trades in its history on Thursday. Tracey added five names today, but first she had to make some room by selling Cloudera (CLDR, +16%), Encana (ECA, +13.3%), Schlumberger (SLB, +10.2%), Bristol-Myers (BMY, +2.6%), Philip Morris (PM) and Carbo Ceramics (CRR). The new buys and their insider activity include:

• Centennial Resource (CDEV) – The Chief Accounting Officer & the CFO
• CBOE (CBOE) – The President
• Dollar Tree (DLTR) – Two directors
• John Bean Technologies (JBT) – The CFO & a director
• Sientra (SIEN) – The CEO, the CFO and 4 directors

Most of these buys have been beaten down despite solid fundamentals. The editor is splitting up the cash into the new positions. Read the full write-up for specifics on each of these moves.

Income Investor: In just the past few days, Six Flags Entertainment Corp. (SIX) made a couple long-term growth announcements by leasing rights for 5 new parks in the U.S. and adding 3 new parks in China as part of their international expansion. Furthermore, the amusement park operator beat on both the top and bottom lines in the first quarter, while fiscal 2018 earnings and revenue growth expectations are at 33.8% and 7.76%, respectively. With an impressive 4.47% annual dividend yield and $250 million remaining in its stock repurchase program, Brian decided this would be a good choice for the portfolio and expects it to be a long-term position. Learn a lot more about this new buy in the full commentary.

Good Evening,
Jim Giaquinto

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