Stocks Set to Snap Weekly Win Streak as Fed Decision Looms

Geopolitical developments and President Donald Trump fueled early moves in stocks this week, after North Korea tested missiles and Trump issued a revised travel ban and tweeted about drug pricing. As the Dow logged its first set of back-to-back losses since January -- eventually extending its string of down days to three -- traders also digested a raft of jobs data amid increased expectations the Fed will raise interest rates at next week's policy meeting.

Payrolls Can't Save Stocks From Weekly Losses

The week's jobs reports culminated in Friday's blowout nonfarm payrolls, which sent stock markets higher. Nevertheless, the major U.S. benchmarks appear on track to close lower on a week-over-week basis, which would have the Dow snapping its four-week winning streak, and the S&P 500 Index (SPX) and Nasdaq Composite (COMP) logging weekly deficits for the first time since late January.

Trump Tweet Shakes Up Drug Stocks

In addition to Trump's tweet that he's working on a system to increase competition in the drug industry, the healthcare sector was also in focus after House Republicans on Tuesday unveiled their plan to repeal and replace the Affordable Care Act (ACA), or Obamacare. Put volume swelled across the sector, as drug stocks sold off. Among one of the week's notable losers was Valeant Pharmaceuticals Intl Inc (NYSE:VRX), which is on track to notch a roughly 11% weekly loss amid a round of refinancing and bearish brokerage notes, including one from Morgan Stanley, which cited "company-specific risk factors."

Biotechs, Blue-Chips Offer Prime Options Trading Opportunities

However, despite the struggles within the biotech sector, not all hope is lost -- with EXACT Sciences Corporation (NASDAQ:EXAS) and Exelixis, Inc. (NASDAQ:EXEL) offering an appealing setup for options traders. Our quantified data identified similar options buying opportunities among several blue-chip stocks, too, including Caterpillar Inc. (NYSE:CAT) -- which found technical support amid a tough week of tax fraud allegations -- and Apple Inc. (NASDAQ:AAPL), even as the stock lingers in overbought territory amid increased optimism from options traders and analysts. In fact, similar quantified data helped subscribers of our Weekend Trader Series recently double their money on a Northrop Grumman Corporation (NYSE:NOC) options trade.

Tech Shares, Mining Stocks Near Key Trendlines

Several other stocks neared key trendlines, too, suggesting breakouts could be on the horizon. As Advanced Micro Devices, Inc. (NASDAQ:AMD) bounced back from last week's drubbing, fellow chipmaker Micron Technology, Inc. (NASDAQ:MU) recently rebounded from its historically supportive 40-day moving average. Looking outside of the tech sphere, shares of mining stocks Allegheny Technologies Incorporated (NYSE:ATI) and Vale SA (ADR) (NYSE:VALE) are trading near trendlines that have historically resulted in near-term bullish price action.

Retail Stocks React to Earnings

Elsewhere, the retail sector enjoyed its fair share of the limelight, amid a rush of late-season earnings reports. The action was mixed, with shares of Express, Inc. (NYSE:EXPR) tumbling more than 10% on Wednesday -- extending a streak of negative earnings reactions -- while disappointing forecasts for Dick's Sporting Goods Inc (NYSE:DKS) and Zumiez Inc. (NASDAQ:ZUMZ) sent shares spiraling. Nevertheless, Wall Street newcomer e.l.f. Beauty Inc (NYSE:ELF) flexed its muscle in the earnings confessional, as did Sears Holdings Corp (NASDAQ:SHLD). Also on the earnings front, biotech Cara Therapeutics Inc (NASDAQ:CARA) is down after its results, while social network stock Momo Inc (ADR) (NASDAQ:MOMO) surged on its company's earnings beat.

Time to Buy Gold With Fed in Focus?

Looking ahead, the Fed will dominate next week's conversation, with the Federal Open Market Committee (FOMC) set to kick off their two-day policy-setting meeting on Tuesday. The market has seemingly priced in a hike in interest rates -- expectations that appear to be reflected in gold prices, too. However, this retreat in gold could be viewed as a prime trading opportunity, with several gold stocks flashing "buy" signals and the SPDR Gold Trust's (GLD) recent losing streak having historically bullish implications. Additionally, as Schaeffer's Senior V.P. of Research Todd Salamone noted in this week's Monday Morning Outlook, speculative players should "consider exposure to gold or gold-mining call options."