Once again, the propensity of the S&P 500 index to make its high or low for the week on Friday came to fruition. In a rare occurrence last week, the index reached both extreme levels for the week on Friday.
Unfortunately for investors, the low for the week was made late in the session and the closing price was not far off it. What does it mean for investors? Be prepared for more price action to the downside. With limited positive catalysts, the index may just drift lower into the start of Q3 earnings season and take its cues from the upcoming reports.
The bulls showed some spunk early on with index sniffing 4400 just before lunchtime. However, hawkish comments from the San Francisco Federal Reserve Bank President Mary Daly instigated a brisk nearly 40-handle decline.
Heading into the final thirty minutes, the index was in position to end the three-day losing streak. However, the bears pounced on the opportunity to inflict more pain and took the index to a new low for the session. That low of 4357.25 coincided with its June low of 4357.75.
For the session, the index surrendered 11 handles at the closing price of 4361. That brings the loss for the week to 137 handles.
Among the top components, UnitedHealth Group (NYSE: UNH) was the biggest winner for the third day in a row. For the session, the issue added $4.96 or 0.99% at the closing price of $506.10. That brings the three-day total to $25.44 or 5.3%.
For the session, that was over one percent better than the cash index’s decline of 0.23%. Over the last three sessions, there was huge discrepancy between the two, as the cash index slumped 3.9% for a whopping 9.2% divergence.
On the downside, Tesla Inc. (NASDAQ: TSLA) was the biggest loser. On Friday’s show, co-host Dennis Dick reiterated Gordon Johnson’s bearish thesis on the issue citing the potential of higher labor costs resulting from the possible outcome of the UAW strike.
For the session, the issue declined by $10.88 or 4.2% at the closing price of $244.88.
