T3’s Take 3: Hillary Clinton Beats Up Biotech


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1) A Little Scare

We have now gone 41 days without a 1% down move in the S&P 500, but the bears made some progress today.

The S&P 500 finished down just -0.5%, but below the surface, the action was pretty ugly.

The red hot Nasdaq Biotech ETF (IBB) was up 1.0% in early trading, but it collapsed intraday and closed down -3.4%.

Presidential candidate Hillary Clinton attacked pharma company Mylan(MYL) for raising the price of its EpiPen emergency allergy treatment, which implies that the drug industry could again come under fire over pricing practices.

We also saw many hot momentum stocks like Twilio (TWLO) andAcacia (ACIA) get hit hard.

But only time will tell if I finally get paid on my VIX calls…

2) Oil Takes a Hit

Crude oil fell nearly 3% on a very bearish inventory report from the Energy Information Administration.

Traders expected an -850K decline in US crude stocks, but they actually grew by 2,501K.

This 3,351K barrel miss just about erases last week’s 3,458K beat.

However, keep in mind that oil has been moving on chatter about a possible OPEC production freeze, so keep an eye out for those headlines.

3) Playing in Italy

This morning, I added a position in the iShares MSCI Italy ETF (EWI).

Italy is one of the worst-performing and most hated markets in the world, and options traders are putting up big money in the options market to bet on further declines.

Since sentiment is so incredibly negative, Italy may be washed out, so I decided to dip my toe in.

I plan on treating this as a “set it and forget it” position.

P.S. Don't forget to sign up for Rob Smith's FREE training session!

Thursday’s Trading Calendar

US Economics (Time Zone: EDT)

08:30 Initial Jobless Claims (8/20): exp. 265k , prior 262k
08:30 Continuing Claims (8/13): exp. 2155k , prior 2175k
08:30 Durable Goods Orders (Jul P): exp. 3.40% , prior -3.90%
08:30 Durables Ex Transportation (Jul P): exp. 0.40% , prior -0.40%
08:30 Cap Goods Orders Nondef Ex Air (Jul P): exp. 0.20% , prior 0.40%
08:30 Cap Goods Ship Nondef Ex Air (Jul P): exp. 0.30% , prior -0.20%
09:45 Markit US Services PMI (Aug P): exp. 51.8 , prior 51.4
09:45 Markit US Composite PMI (Aug P):   prior 51.8
09:45 Bloomberg Consumer Comfort (8/21):   prior 43.6
10:30 EIA Natural Gas Storage Change (8/19): exp. 16 , prior 22
10:30 EIA Working Natural Gas Implied Flow (8/19): exp. 16 , prior 22
11:00 Kansas City Fed Manf. Activity (Aug): exp. -2 , prior -6
18:30 Fed's George to Meet Fed Up with Other Fed Leaders Invited    

Global Economics

04:00 EUR German ifo Business Climate
19:30 JPY Tokyo Core CPI y/y


Before Open:

1-800-Flowers.com (FLWS)
Dollar General (DG)
Dollar Tree (DLTR)
Sears Holdings (SHLD)
Tiffany & Co (TIF)

After Close:

Brocade Comm. (BRCD)
GameStop (GME)